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PAGE 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1993
Commission file number 1-7564
DOW JONES & COMPANY, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-5034940
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
200 LIBERTY STREET, NEW YORK, NEW YORK 10281
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 416-2000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
------------------- -----------------------------------------
Common Stock $1.00 par value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
Class B Common Stock $1.00 par value
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. YES X NO
--- ---
Indicate by a check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of the registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. ( )
Aggregate market value of common stock held by non-affiliates of the
registrant at January 31, 1994 was approximately $2,180,000,000.
The number of shares outstanding of each of the registrant's classes of
common stock on January 31, 1994: 77,749,642 shares of Common Stock and
22,173,212 shares of Class B Common Stock.
DOCUMENTS INCORPORATED BY REFERENCE
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Definitive Proxy Statement for 1994 Annual Meeting of Stockholders
dated March 18, 1994: Part III.
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PAGE 2
PART I.
ITEM 1. Business.
Dow Jones & Company, Inc. (the company) is a communications and
publishing company. Its operations are currently divided into three
industry segments: information services, business publications and general
interest community newspapers. Financial information about industry
segments and geographic areas are incorporated by reference to Note 15 to
Financial Statements on pages 42 and 43 of this report.
The company currently has approximately 10,000 full-time employees.
The company's principal executive offices are located at 200 Liberty Street,
New York, New York.
Information Services
- - - --------------------
The information services segment of Dow Jones reflects the operations
of the company's Dow Jones/Telerate group and the Business Information
Services group. The Dow Jones/Telerate group primarily serves the financial
services market world-wide and includes Dow Jones Telerate, Dow Jones News
Service, Professional Investor Report, AP-Dow Jones News Service, Federal
Filings and the Dow Jones Asian Equities Report. The Business Information
Services group serves corporate, small business and individual investor
needs largely through Dow Jones News/Retrieval. This group also includes
DowVision, Voice Information Services, SportsTicker, Telco Alliance, and two
radio networks.
Dow Jones Telerate is one of the largest suppliers of real-time market
information and related services to financial professionals with offices or
distributors in more than 80 countries world-wide. Almost two-thirds of
Dow Jones Telerate's revenues are generated by its foreign operations.
Telerate, Inc., which became a wholly-owned subsidiary of Dow Jones in 1990,
started in 1969 as a provider of commercial paper quotations. The breadth
and depth of Dow Jones Telerate are reflected in the mix of services
presently offered. The foundation of the service rests on providing prices
of U.S. Government securities, foreign exchange, international government
bonds, global equities, energy, mortgage-backed securities and a variety of
money market instruments. In addition, Dow Jones Telerate provides global
news coverage of the world's financial markets and an array of services from
outside information providers, ranging from informed commentary on Federal
Reserve actions to analysis of the commodities markets.
Dow Jones Telerate also provides products and software to help users
analyze its live market data. Its Matrix terminal employs the power of a
personal computer to allow customers to build personalized, full-color,
market-specific pages using Dow Jones Telerate data. In 1993 Matrix added
expanded graphing and charting capabilities, as well as access to more
historical and analytical information. Matrix has modules to analyze the
fixed income and foreign exchange markets and sophisticated analytical
tools, including a spreadsheet from Lotus Development Corporation that uses
live Telerate data and contains built-in formulas customized to help traders
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analyze financial markets.
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PAGE 3
Telerate Trading Room Systems (TTRS) provide even more advanced
decision-support tools. Designed to serve the needs of large trading rooms,
TTRS have networking capabilities which enable customers to link trading
rooms world-wide. Running on powerful desktop workstations, TTRS
consolidates several information, transaction and analytic services into a
single terminal at a trader's desk. In 1993 new terminal software, based on
Microsoft's Windows, was added to this product line.
The Treasury 500 product offers the widest coverage available of U.S.
Government securities and provides value-added analytics in addition to the
price information distributed through Dow Jones Telerate's long-standing
exclusive agreement with Cantor Fitzgerald Securities Corp. One of Treasury
500's most important features is that it provides live bids and offers from
an identified source that customers can actually trade on. It also has live
two-sided market displays of best-bid and best-offer prices. In 1993 prices
for U.S. Treasury odd-lot securities from Cantor Fitzgerald were added as
was exclusive distribution of odd-lot prices from Fuji Securities.
In 1993 Dow Jones Telerate began exclusive distribution of real-time
foreign exchange and money market prices from M. W. Marshall & Company and
Exco International, two of the world's foremost foreign exchange brokers.
Dow Jones holds an equity stake in the Japanese consortium Minex Corp.
and serves as exclusive world-wide sales and distribution agent outside of
Japan for Minex's foreign exchange trading service. Minex's service, which
provides for automated matching of trades, was launched in April 1993.
TeleTrac and Tactician products are continually enhanced to make them
more powerful for customers. TeleTrac is a technical analysis tool favored
by dealers in the foreign exchange and fixed income markets and is a
leading technical analysis program in Europe and Asia. Tactician is a
fundamental analysis product targeted at institutional traders in the
Treasury markets and is particularly popular with traders of Japanese
government bonds.
The Digital Page Feed product fills the needs of larger customers who
prefer to receive Dow Jones Telerate's thousands of pages of data in the
form of an electronic feed that can be incorporated into their own
information systems.
Telerate International Quotations (TIQ) product line offers quotes and
news on thousands of securities traded on stock, futures and options
exchanges around the world. TIQ, when combined with Dow Jones Telerate's
fixed income and foreign exchange information, gives customers comprehensive
coverage of the world's major markets and reflects the markets' growing
interaction. Two of TIQ's products, Access Plus and QuotElite, combine in
one service all Dow Jones Telerate data, including information on equities,
foreign exchange and U.S. Government issues.
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PAGE 4
In early 1993, Dow Jones Telerate introduced a new service, Dow Jones
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Emerging Markets Report, which provides information on the emerging capital
markets of developing countries, with particular emphasis on Latin America,
by combining Dow Jones Telerate's live market prices with news from Dow
Jones and the Associated Press, plus market commentary from Thomson
Financial Services.
Other Dow Jones Telerate products and services currently in the
marketplace include: the Telerate Access Service, a personal-computer
software package that provides a link to Telerate's core information base
through the public telephone network and includes access to Dow Jones News/
Retrieval; hand-held quotation devices that deliver current prices, rates
and other data at the touch of a button; and data for mortgage markets.
Dow Jones News Service is the nation's preeminent supplier of business
and financial news to subscribers at brokerage firms, banks, investment
companies and other businesses. The News Service significantly increased
its transmission speed in 1992, enabling it to carry more news and
distribute it faster.
Professional Investor Report (PIR), a companion to the News Service,
focuses on daily trading activity and news of interest to traders,
arbitragers, hedge fund operators and other equity market professionals. In
1993, PIR began following Nasdaq small capitalization market issues thereby
increasing by 25% the number of issues tracked by PIR computers. Capital
Markets Report, which is incorporated into Dow Jones Telerate's basic
information package, is the company's newswire that covers fixed income and
financial futures markets around the world.
AP-Dow Jones, a news service joint venture with Associated Press,
provides international economic, business and financial news to subscribers
in 63 countries. In addition to two broad international newswires, AP-Dow
Jones offers specialized wires dedicated to the coverage of European
equities, banking and the markets in foreign exchange and petroleum. AP-Dow
Jones also produces the European Corporate Report, a news service focusing
on European companies and stock markets, and the World Equities Report
newswire which serves domestic institutions investing in international
markets.
Washington-based Federal Filings publishes newswires, newsletters and
investment research based on its coverage of federal regulatory agencies,
Capitol Hill and bankruptcy courts nationwide. Federal Filings' products
include Corporate BondWatch, a fixed income bond ownership database, and 13F
Advance, which analyzes the equity portfolio changes of prominent money
managers.
In early 1994 Dow Jones Telerate launched the Dow Jones Asian Equities
Report, which covers 12 Asian-Pacific stock markets and the companies traded
on them. Headquartered in Singapore, the service draws on the staffs of AP-
Dow Jones, The Asian Wall Street Journal and Far Eastern Economic Review, as
well as its own editors and reporters.
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PAGE 5
Dow Jones News/Retrieval is widely recognized as one of the nation's
leading suppliers of online business and financial news and information to
financial professionals, private investors, corporate executives and
managers, as well as to information specialists in corporate libraries. In
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1993, it introduced TextSearch Plus, available for personal computers
running Microsoft Windows, to simplify searching and retrieving articles
from its library of more than 1,400 full-text publications.
In 1993, the Business Information Services group began development of
Personal Journal, an electronic publication designed to deliver customized
business and market news, stock quotes, world and national news, weather and
sports 24 hours a day. It will be introduced in 1994 when it will be
included with Microsoft Corp.'s Microsoft At Work operating system for
portable computing devices. Also in development is The Wall Street Journal
Interactive Edition, which will be a real-time, electronic extension of the
printed Journal and the company's newswire services.
DowVision, a comprehensive service that delivers all the Dow Jones
newswires, three press release services and the complete text of The Wall
Street Journal directly to desktops through corporate computer systems,
enables individual users in the corporate and financial marketplaces to
tailor information to their own needs.
Other electronic services offered by the company include SportsTicker,
the nation's leading electronic sports news service, and Voice Information
Services, which provides pay-per-call stock quotes, market updates, company
news and investment analysis. The Dow Jones Market Report, another pay-per-
call service, provides a one minute summary, which is updated hourly, of the
stock market.
The Business Information Services group established the Telco Alliance
Development unit to explore emerging business opportunities with Regional
Bell and other telephone companies. Its primary offering, the Dow Jones
PersonalInfo Network, provides news and information for delivery through
voicemail and electronic mail systems, pagers, personal digital assistants
and screenphones.
Dow Jones' radio products include two radio networks -- "The Wall
Street Journal Report" on AM stations and "The Dow Jones Report" on FM
stations. Together these programs were carried on over 160 stations and
reach nearly 90% of the country, including all of the top 50 markets.
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PAGE 6
Business Publications
- - - ---------------------
Dow Jones' best-known publication, The Wall Street Journal, is the
country's largest daily newspaper with average circulation for 1993 of
1,839,900. The Wall Street Journal is edited in New York City at the
company's executive offices. The Journal's four regional editions are
printed at eighteen plants located across the United States. Advertisers
can also focus their messages on readers served by sixteen localized
editions. In September 1993, Texas Journal was started to provide Journal-
quality reporting on regional business trends and issues. Texas Journal, a
four-page weekly section of regional news produced by a separate staff,
appears in the copies of The Wall Street Journal that are distributed in
Texas.
Production of the paper employs satellite transmission of page images
to the outlying plants and other technologies designed to speed the delivery
of editorial material to the presses and to reduce the steps taken in the
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printing process. The Wall Street Journal is delivered in two ways: by
second class postal service and through the company's own National Delivery
Service, Inc., a subsidiary. At the end of 1993, National Delivery Service
delivered nearly one million of the Journal's subscription copies. The
system provides delivery earlier and more reliably than the postal service.
Approximately 230,000 copies of the Journal are sold each day on newsstands.
Barron's National Business and Financial Weekly, a magazine
specializing in reporting and commentary on financial markets, had average
circulation of 265,200 in 1993. The magazine uses the same facilities
employed in the production of The Wall Street Journal. Barron's is edited
in New York City, and is delivered by second class postal service and
through National Delivery Service. About 123,400 copies are sold on
newsstands.
The Wall Street Journal Europe is headquartered in Brussels and printed
in the Netherlands, Switzerland and England. It is available on day-of-
publication in continental Europe and the United Kingdom. The newspaper,
which began publication in 1983, had average circulation in 1993 of 58,300.
The Asian Wall Street Journal began publication in 1976. It is
headquartered and printed in Hong Kong and is transmitted by satellite to
additional printing sites in Singapore and Japan. The Asian Wall Street
Journal had average circulation of 43,400 in 1993. The Wall Street Journal
Europe and the Asian Journal draw on the resources of The Wall Street
Journal's world-wide staff. The Asian Journal provides the foundation for
the company's Asian Wall Street Journal Weekly, which is published in New
York for North American readers with interests in Asia.
Other business publications include Far Eastern Economic Review, Asia's
leading English-language newsweekly; the National Business Employment
Weekly, which contains career-related news features, job-related ads from
the Journal's regional editions and self-generated advertising; The Wall
Street Journal Classroom Edition, which is published nine times during the
school year and is used by more than 2,700 teachers in high school
classrooms nationwide; and American Demographics magazine, which contains
feature stories analyzing statistics from the United States Census Bureau
and private data collectors.
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PAGE 7
SmartMoney, The Wall Street Journal Magazine of Personal Business, is
published jointly with Hearst Corp. SmartMoney, introduced in 1992, became
a monthly publication with its November 1993 issue. Dow Jones and American
City Business Journals, Inc. launched BIZ, a monthly magazine targeted to
the heads of America's fastest-growing small businesses, in March 1994.
Also included in this segment is The Wall Street Journal's television
group which produces "The Wall Street Journal Report" a half-hour weekly
program with about one million viewers in the U.S. In October 1993, the
television group launched "The Asian Wall Street Journal Report", a half-
hour weekly television news magazine program distributed throughout Asia.
The television group also produces daily news feeds to stations in the U.S.
and abroad.
Dow Jones Investor Network is a video business-news service delivered
to customers' computer terminals, that includes exclusive video interviews
with business leaders and coverage of major corporate announcements and
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events.
Community Newspapers
- - - --------------------
Community newspapers published by Ottaway Newspapers, Inc., a wholly-
owned subsidiary, include 21 general-interest dailies in Arizona,
California, Connecticut, Kentucky, Massachusetts, Michigan, Minnesota,
Missouri, New York, Oregon and Pennsylvania. Average circulation of the
dailies during 1993 was approximately 556,300; Sunday circulation for 13
newspapers was approximately 523,200. The principal administrative office
of Ottaway Newspapers is in Campbell Hall, New York. The primary delivery
method for the newspapers is private delivery.
Other
- - - -----
Dow Jones also has investments in Handelsblatt-Dow Jones GmbH, a joint
venture with the von Holtzbrinck Group, publisher of Germany's leading
business daily, Handelsblatt; Press-Enterprise Co., a daily newspaper in
Riverside, Calif.; Groupe Expansion S.A., a French business publishing
company; Mediatex Communications Corp., publisher of Texas Monthly magazine;
Nation Publishing Group, a Bangkok, Thailand publisher of English and Thai-
language magazines and newspapers; AmericaEconomia, a Spanish-language
business magazine in South America; Asia Business News, a business and
financial television news channel broadcasting in Asia; and newsprint mills
in the United States and Canada. In early 1994, the company invested in
Hubbard Broadcasting Inc.'s new U.S. Satellite Broadcasting venture which
will direct broadcast television programming to viewers in the U.S. having
18-inch dish antennas linked to special home receivers. Dow Jones will be
the exclusive provider of business and financial news to U.S. Satellite
Broadcasting.
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PAGE 8
Raw Materials
- - - -------------
The primary raw material used by the company is newsprint. In 1993,
approximately 218,000 metric tons were consumed. Newsprint was purchased
from sixteen suppliers. F.F. Soucy, Inc. & Partners and Company, Limited,
Riviere du Loup, Quebec, Canada, and Bear Island Paper Company, Richmond,
Virginia, furnished 16.3% and 20.9%, respectively, of total newsprint
requirements. The company is a limited partner in both ventures and has
signed long-term contracts with both for a substantial portion of its annual
newsprint requirements. For many years the available sources of newsprint
have been adequate to supply the company's needs.
Competition
- - - -----------
The company believes that Reuters Holdings PLC ("Reuters"), a company
headquartered in London whose shares are publicly traded in the United
States and the UK, is the only significant company which currently provides,
on a world-wide basis, financial information display services closely
comparable to those furnished by Dow Jones Telerate, although other
companies, primarily Automated Data Processing Corporation, Knight-
Ridder, Inc., Bloomberg L.P., Telekurs A.G., ILX Systems, Inc. and Quick
Corporation of Japan are also in the business of providing financial
information displayed on video screens to customers. The company believes
that Reuters has more subscribers and video screens than the company outside
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North America, but that Dow Jones Telerate has more subscribers and video
screens than Reuters in North America. The company believes that it is the
largest provider of fixed income and foreign exchange data in the United
States.
Many business enterprises, including banks, brokerage houses and other
financial firms, operate data or voice telecommunications systems which are
able to move information rapidly from one location to another, competing
with the company's other information services products.
The business publications of the company remain highly competitive. In
its various news publishing activities, Dow Jones competes with a wide
spectrum of other information media, and this competition may well become
more intense as telecommunications systems are improved and new techniques
are developed. All metropolitan general newspapers and many small city or
suburban papers carry business and financial pages or sections, including
securities quotations. In addition, specialized magazines in the economics
field, as well as general news magazines, publish substantial amounts of
business material. Nearly all these publications seek to sell advertising
space and much of this effort is directly or indirectly competitive with
Dow Jones' publications. The company also competes with television and
radio for advertisers.
All of the community newspapers operating under Ottaway Newspapers,
Inc. compete with metropolitan general newspapers and most compete with
other newspapers available in their respective sales areas.
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PAGE 9
ITEM 2. Properties.
Dow Jones operates eighteen plants with an aggregate of approximately
1.1 million square feet for the printing of its domestic publications.
Printing plants are located in Palo Alto and Riverside, California; Denver,
Colorado; Orlando, Florida; LaGrange, Georgia; Naperville and Highland,
Illinois; Des Moines, Iowa; White Oak, Maryland; Chicopee Falls,
Massachusetts; South Brunswick, New Jersey; Charlotte, North Carolina;
Bowling Green, Ohio; Oklahoma City, Oklahoma; Sharon, Pennsylvania; Dallas
and Beaumont, Texas; and Federal Way, Washington. All plants include office
space. All are owned in fee except the Palo Alto, California plant, which
is located on 8.5 acres under a lease to Dow Jones for 50 years, expiring in
2015.
Other facilities owned in fee with a total of approximately 870,000
square feet house news, sales, administrative, research, computer and
operations staff. These facilities are located in Chicopee Falls,
Massachusetts and South Brunswick, New Jersey.
Dow Jones occupies two major leased facilities in New York City:
editorial and executive staff occupy 340,000 square feet, while advertising
sales staff occupy 90,000 square feet at a separate location. The company
also leases other business and editorial offices in numerous separate
locations around the world, including 50,000 square feet in two locations in
Hong Kong.
Dow Jones Telerate leases approximately 23,000 square feet in New York
City, 325,000 in Jersey City, New Jersey, 115,000 at three locations in
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London, England, 70,000 at three locations in Toronto, Ontario and 30,000 at
two locations in Hong Kong. In addition, Dow Jones Telerate leases space
around the world for its operations.
Ottaway Newspapers operates in 27 locations, including a 24,000 square
foot administrative headquarters in Campbell Hall, New York. These
facilities are located in Sun City, Arizona; Santa Cruz, California;
Danbury, Connecticut; Ashland, Kentucky; Beverly, Hyannis, New Bedford,
Gloucester, Nantucket, Peabody, Fall River and Newburyport, Massachusetts;
Traverse City, Michigan; Mankato, Minnesota; Joplin, Missouri; Exeter and
Hampton, New Hampshire; Middletown, Oneonta, Plattsburgh and Port Jervis,
New York; Medford, Oregon; and Grove City, Sharon, Stroudsburg and Sunbury,
Pennsylvania. Local printing facilities, which include office space, total
approximately 1,062,000 square feet. All facilities are owned in fee.
The company believes that its current facilities are suitable and
adequate, well maintained and in good condition. Older facilities have been
modernized and expanded to meet present and anticipated needs. It is
estimated that between 65% and 75% of the capacity of the company's existing
production facilities is being utilized.
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PAGE 10
ITEM 3. Legal Proceedings.
Not applicable.
ITEM 4. Submission of Matters to a Vote of Security Holders.
Not applicable.
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PAGE 11
Executive Officers of the Registrant
- - - ------------------------------------
Each executive officer is elected annually to serve at the pleasure of
the Board of Directors.
All executive officers named below have been employed by the company
for more than five years.
Peter R. Kann, age 51, Chairman of the Board since July 1991, Chief
Executive Officer since January 1991 and Publisher of The Wall Street
Journal since January 1989, served as President from July 1989 to July 1991
and Chief Operating Officer from July 1989 to December 1990, Executive Vice
President from 1985 to 1989 and Associate Publisher of The Wall Street
Journal from 1979 to 1988.
Kenneth L. Burenga, age 49, President since July 1991 and Chief
Operating Officer since January 1991, served as Executive Vice President
from January 1991 to July 1991 and Senior Vice President from 1986 thru
1990, and General Manager from January 1989 thru December 1990, as Chief
Financial and Administrative Officer from 1986 to 1988 and Vice President/
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Circulation of The Wall Street Journal from 1980 to 1986.
James H. Ottaway, Jr., age 56, Senior Vice President since 1986,
President of International Group and Magazine Group since February 1988,
President of Affiliated Companies Group since 1986, and Chairman of Ottaway
Newspapers, Inc. since 1979, served as Vice President/Community Newspapers
from 1980 to 1985 and as President of Ottaway Newspapers, Inc. from 1970 to
1985 and Chief Executive from 1976 to January 1989.
Peter G. Skinner, age 49, Senior Vice President since November 1989 and
General Counsel and Secretary since 1985, served as Vice President from 1985
to November 1989.
Carl M. Valenti, age 55, Senior Vice President and Publisher and
President of the Information Services Group since July 1989 and President of
Dow Jones Telerate, Inc. since May 1990, served as Vice President of the
company and President/Information Services Group from 1987 to 1989 and as
Vice President/Information Services Group from 1980 to 1987.
Kevin J. Roche, age 59, Vice President/Finance since 1986 and Chief
Financial Officer since January 1989, served as Comptroller from 1977 to
March 1987.
Thomas G. Hetzel, age 38, Comptroller since October 1993, served as
Associate Comptroller from 1992 to 1993 and Assistant Comptroller from 1988
to 1992.
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PAGE 12
PART II.
ITEM 5. Market for the Registrant's Common Equity and Related
Stockholder Matters.
The company's common stock is listed on the New York Stock Exchange.
The class B common stock is not traded. The approximate number of
stockholders of record as of January 31, 1994, was 10,400 for common stock
and 4,700 for class B common stock. The company paid $.80 per share in
dividends in 1993 and $.76 per share in 1992, which represented an earnings
payout of 54.1% in 1993 and 60.9% in 1992, excluding the nonrecurring net
charge for accounting changes and asset write-downs in 1992.
<TABLE>
<CAPTION>
============================================================================
Market Price 1993 Market Price 1992
Quarter ----------------- Dividends ----------------- Dividends
Ended High Low Paid 1993 High Low Paid 1992
<S> <C> <C> <C> <C> <C> <C>
- - - ----------------------------------------------------------------------------
March 31 $33 3/4 $27 1/8 $.20 $34 3/4 $24 1/2 $.19
June 30 32 3/4 26 3/4 .20 34 1/2 27 3/8 .19
September 30 33 3/8 27 3/4 .20 35 3/8 29 3/8 .19
December 31 39 32 1/2 .20 30 3/8 26 1/2 .19
============================================================================
</TABLE>
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PAGE 13
ITEM 6. Selected Financial Data.
See Management's Discussion and Analysis of Financial Condition and
Results of Operations for a discussion of factors that affect the
comparability of the information reflected in this table.
<TABLE>
<CAPTION>
The following table shows selected financial data for the most recent
five years:
============================================================================
(in thousands except
per share amounts) 1993 1992 1991 1990 1989
- - - ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenues $1,931,816 $1,817,870 $1,725,079 $1,720,084 $1,687,877
Income before
cumulative effect
of accounting
changes $147,547 $118,391 $72,189 $106,923 $316,980
Net income $147,547 $107,586 $72,189 $106,923 $316,980
- - - ----------------------------------------------------------------------------
Per Share Amounts:
Income before
cumulative effect
of accounting
changes $1.48 $1.17 $.71 $1.06 $3.15
Net income $1.48 $1.06 $.71 $1.06 $3.15
Dividends $ .80 $ .76 $.76 $ .76 $ .72
- - - ----------------------------------------------------------------------------
Average shares
outstanding 99,773 101,150 101,011 100,826 100,751
Total assets $2,349,539 $2,372,035 $2,470,584 $2,591,377 $2,688,336
Long-term debt,
excl. current
portion $261,073 $334,718 $447,990 $607,805 $718,971
- - - ----------------------------------------------------------------------------
Operating income
as a percent of
revenues 16.4% 15.4% 14.0% 13.3% 19.9%
Net income as a
percent of
revenues 7.6% 5.9% 4.2% 6.2% 18.8%
Net income as a
percent of stock-
holders' equity 9.9% 7.4% 5.0% 7.4% 22.6%
============================================================================
</TABLE>
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PAGE 14
ITEM 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
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Net income in 1993 of $147.5 million, or $1.48 per share, increased $40
million, or 37.1%, from 1992 net income of $107.6 million, or $1.06 per
share. Earnings in 1992 were up $35.4 million, or 49%, from 1991 net income
of $72.2 million, or $.71 per share. Net income in 1992 excluding
accounting changes and asset write-downs was $126.4 million, or $1.25 per
share. Net income in 1993 increased $21.1 million, or 16.7%, from 1992
earnings, adjusted to exclude the nonrecurring items described below. The
improvement was largely the result of advertising linage growth at The Wall
Street Journal, reduced interest expense and improved operating results for
the information services segment.
Earnings in 1992 included the cumulative effect of the adoption of
Statement of Financial Accounting Standards (SFAS) No. 106, "Employers'
Accounting for Postretirement Benefits Other Than Pensions," which reduced
net income by $32.4 million, or $.32 per share, and Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes," which increased
earnings by $21.6 million, or $.21 per share. Also included in 1992 net
income were after-tax charges totaling $8 million, or eight cents per share,
for the write-down of the company's minority investments in Groupe
Expansion, S.A., a French publisher of business magazines, and other Groupe
Expansion-related companies, and for the write-down of Ottaway Newspapers,
Inc.'s investment in the Chapel Hill News.
Results in 1991 included an after-tax charge of $31.8 million, or $.32
per share, from the write-down of goodwill, capitalized development costs
and equipment associated with The Trading Service (TTS), the company's
foreign exchange trading service. If the cumulative effect of the 1992
accounting changes and asset write-downs and the 1991 write-down of TTS were
excluded from each year's respective net income, 1992's net income would
have increased $22.4 million, or 21.5%, from 1991 income of $104 million, or
$1.03 per share.
A summary of the results of operations for each of the company's
principal business segments as well as financial data by geographic area can
be found in Note 15 to the financial statements.
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PAGE 15
OPERATING INCOME
Operating income in 1993 advanced $35.8 million, or 12.7%, to $316.5
million. Operating income was $280.7 million in 1992, an increase of $40
million, or 16.6%, from 1991's income of $240.7 million. In 1991 operating
income grew $11.5 million, or 5%. The operating margin improved to 16.4% in
1993 from 15.4% in 1992 and 14% in 1991.
Approximately $126.2 million, or roughly 40%, of 1993 operating income
was due to foreign operations, primarily at Dow Jones Telerate. Foreign
operations in total were up 21% from $104.3 million in 1992. Operating
income from U.S. operations increased 7.4% in 1993.
Operating income at the information services segment, which includes
the Dow Jones/Telerate and Business Information Services groups, grew $6.7
million, or 4.5%, to $157.4 million in 1993. Revenues in 1993 for the
segment rose $52.6 million, or 6.5%, while operating expenses increased
$45.9 million, or 7%. Operating income in 1993 benefited from fluctuations
<PAGE>
in foreign currency exchange rates, chiefly in the Europe/Gulf region.
Excluding this benefit, 1993 operating income would have been down 1%.
Dow Jones/Telerate group operating income grew 4.5% in 1993, and
operating income at the Business Information Services group was up 4.3%.
The operating margin for the information services segment was 18.3% in 1993,
18.6% in 1992 and 19.4% in 1991. In 1992 operating income for the segment
grew $3 million, or 2.1%, as revenues advanced $47.4 million, or 6.2%, and
operating expenses increased $44.3 million, or 7.2%. Expenses in 1993 and
1992 included substantial investments in technical and product development
and in the acquisition of enhanced information. Operating income at this
segment rose 14.3% in 1991.
Business publications operating income in 1993 increased $28.6 million,
or 24.8%, to $143.7 million. Revenues were up $51.5 million, or 6.7%, as
Wall Street Journal advertising linage grew 3.3%, following a 4% increase in
1992. Operating expenses rose $22.9 million, or 3.5%. Operating income in
1992 climbed $33.6 million, or 41.3%, to $115.1 million. In 1991 operating
income fell 2.7%. The operating margin for the business publications
segment increased to 17.4% in 1993 from 14.9% in 1992 and 11.1% in 1991.
Community newspapers segment operating income of $32.6 million grew
$0.9 million, or 2.9%. The increase was primarily due to higher advertising
rates and continuing cost controls. Operating income was up $4.7 million,
or 17.6%, in 1992 and down $4.5 million, or 14.2%, in 1991. The operating
margin in 1993 for the community newspapers segment was 13.3% compared with
13.5% in 1992 and 11.9% in 1991.
REVENUES
Revenues of $1.9 billion increased $113.9 million, or 6.3%, in 1993 and
$92.8 million, or 5.4%, in 1992, compared with the respective prior years.
Revenues from domestic operations increased 6.3% to $1.4 billion in 1993 and
accounted for slightly less than three-quarters of total revenues. Revenues
from foreign components grew 6.2% to $527.3 million in 1993.
<PAGE>
PAGE 16
Advertising revenue advanced $44.4 million, or 6.8%, to $699 million.
Advertising revenue in 1992 was up $30 million, or 4.8%, from 1991.
Circulation revenue improved $14.3 million, or 4.3%, in 1993 climbing to
$347.8 million. In 1992 circulation revenue rose 5.5% to $333.5 million.
Information services 1993 revenue, which accounted for about 45% of the
company's revenue, increased $52.6 million, or 6.5%, reaching $862 million.
In 1992 revenue from this segment grew $47.4 million, or 6.2%, to $809.4
million from $762 million in 1991.
Dow Jones/Telerate, which primarily serves the financial services
market and includes Dow Jones Telerate, Dow Jones News Services, AP-Dow
Jones News Service, Federal Filings and Professional Investor Report,
produced 90% of information services revenue in 1993. Despite an economic
slowdown in Japan and parts of Europe, revenue in the Europe/Gulf region was
up 6.5% in 1993, while revenue from the Asia/Pacific region was up 5%. As
economic conditions in the U.S. improved, revenue in 1993 from U.S.
operations increased 6% after being essentially flat in 1992. In 1992
<PAGE>
revenues from the Europe/Gulf and Asia/Pacific regions rose 12.6% and 12.2%,
respectively.
The remaining 10% of information services revenue was earned by
Business Information Services, which serves corporate and individual
business consumer needs through Dow Jones News/Retrieval and related
services. Business Information Services revenue was up 13.1% in 1993 after
increasing 1.8% in 1992.
Business publications 1993 revenues of $825.2 million advanced 6.7%
from 1992 revenues of $773.8 million. Revenues in 1992 were up 5.1% from
1991 revenues of $735.9 million. Advertising revenue increased 7.7% in
1993, with the Journal, its overseas editions and Barron's all posting
gains. Advertising linage in 1993 at The Wall Street Journal, the largest
component of business publications, increased 3.3% after rising 4% in 1992.
Ad linage, hurt by the effects of the Persian Gulf war, was down 10.3% in
1991.
Financial advertising at The Wall Street Journal increased 13.4% in
1993 on top of 17.4% growth in 1992. This category comprised 34.2% of total
Journal advertising in 1993, compared with 31.2% in 1992, 27.6% in 1991 and
39% at its peak in 1987. General linage was off 0.9% in 1993, following
declines of 1.2% in 1992 and 9.8% in 1991. Journal advertising rates were
increased an average of about 5% in 1993, 4.5% in 1992 and 6% in 1991.
Advertising linage at Barron's increased 6.9% in 1993. Barron's advertising
linage in 1992 was flat, following an 11.6% drop in 1991.
Circulation revenue at business publications grew 4.4%, as The Wall
Street Journal benefited from roughly a 1% gain in average circulation and a
$10, or 7.2%, midyear increase in its annual subscription price to $149.
This price was last raised in January 1991. The newsstand price of the
Journal remained 75 cents a copy, unchanged since December 1990. Including
the Journal's European and Asian editions, world-wide average circulation
increased to 1,941,600 in 1993 compared with 1,920,300 in 1992 and 1,922,800
in 1991. Barron's average circulation for 1993 was up 5.3% from 1992 to
265,200.
<PAGE>
PAGE 17
Revenues at Ottaway Newspapers, Inc., the company's community
newspapers subsidiary, were up $9.9 million, or 4.2%, in 1993 compared with
the prior year. Revenues were up 3.4% in 1992 after being down in
1991. Ottaway's advertising revenue in 1993 increased $6.7 million, or
4.1%, chiefly as a result of rate increases and sales gains in preprinted
inserts. Advertising revenue rose 2.1% in 1992, after falling 7% in 1991.
Advertising linage edged up 0.6% in 1993. Linage had declined 3.9% in 1992
and 11.9% in 1991, the result of industrywide weakness in retail and
classified advertising. Circulation revenue improved $2.5 million, or 3.8%,
in 1993, following increases of 6.2% and 7.2% in 1992 and 1991,
respectively. Average circulation for Ottaway's 21 daily newspapers was
essentially flat over the 1991-1993 period, at about 556,000.
OPERATING EXPENSES
Operating expenses in 1993 rose $78.2 million, or 5.1%, to $1.6
billion, in part due to increases in payments to outside information
<PAGE>
providers, newsprint costs and depreciation. In 1992 operating expenses
increased $52.8 million, or 3.6%, with higher information services costs
partially offset by lower newsprint. In 1991 operating expenses declined
$6.5 million, or 0.4%.
Information services expenses were up $45.9 million, or 7%, to $704.6
million in 1993, mainly due to increases in contributed data costs,
depreciation and continuing investments in research and product development.
At December 31, 1993, the number of full-time employees for information
services was up 1.5% from year-end 1992.
Business publications expenses rose 3.5% to $681.6 million in 1993,
partially due to additional newsprint expense reflecting increased
consumption and a higher average price. In 1992 operating expenses of
$658.7 million were essentially flat compared with 1991, largely due to
deeply discounted newsprint prices. At December 31, 1993, business
publications full-time employee count was up about 3% from year-end 1992.
Community newspapers expenses were up $9 million, or 4.4%, in 1993,
largely due to newsprint and salaries. Operating expenses increased 1.4% in
1992, after decreasing 1.5% in 1991. The number of full-time employees at
year-end 1993 fell 0.6% from the end of 1992.
In 1993 Dow Jones' purchases of newsprint containing recycled fiber
reached 54% of total purchases, up from 39% in 1992 and 11.5% in 1991. The
company expects purchases of newsprint containing recycled material to
continue to increase in 1994.
Salaries and wages were 31% of operating expenses in 1993, 30% in 1992
and 29% in 1991. Salaries and wages increased 6.4% in 1993, following
increases of 8.4% in 1992 and 1.4% in 1991. In 1993 the company signed a
new three-year contract with a union representing about 20% of its work
force. The contract, which expires January 31, 1996, calls for compensatory
increases of 4% each year for 1993, 1994 and 1995. At December 31, 1993,
Dow Jones employed 10,006 full-time employees, compared with 9,860 at year-
end 1992 and 9,459 at year-end 1991.
<PAGE>
PAGE 18
Dow Jones and the Dow Jones Foundation made public-interest and
charitable contributions in 1993 totaling $2.8 million, which was
approximately 1% of earnings before income taxes and 1.9% of net income.
Contributions in 1993 included those given to the United Negro College Fund
to support entrepreneurial studies at Spelman College, Clark Atlanta
University and the Atlanta University Center.
OTHER INCOME / DEDUCTIONS
Interest expense of $22.6 million decreased $7.8 million, or 25.7%,
from 1992, the result of a lower average debt level and reduced interest
rates on commercial paper. Long-term debt outstanding averaged $339.9
million during 1993 compared with $385.4 million in 1992 and $531.4 million
in 1991.
The company broke even in 1993 in its equity earnings from associated
companies, compared with losses of $4.2 million in 1992 and earnings of $3.9
<PAGE>
million in 1991. The company's share of earnings from its newsprint
affiliates was $2.2 million, a $6.9 million improvement from losses of $4.7
million in 1992. Gains on land sales coupled with increased sales of
newsprint, reflecting the recovering U.S. economy, caused the better 1993
results from newsprint affiliates. Equity losses from newsprint mill
affiliates in 1992 were $8.8 million worse than earnings of $4.1 million in
1991.
The fourth quarters of 1993 and 1992 included write-downs of assets
totaling $8.2 million ($5.4 million after taxes) and $13.4 million ($8
million after taxes), respectively.
In 1991's fourth quarter the company wrote down certain assets of TTS,
its foreign exchange direct dealing service. This write-down resulted in a
nonrecurring charge of $45 million ($31.8 million after taxes). Included in
this charge was an $11.3 million write-down of goodwill and $33.7 million
($20.5 million after taxes) related to capitalized development costs and
equipment.
INCOME TAXES
The effective income tax rate was 48.5% in 1993 versus 49.5% in 1992
and 54.7% in 1991. The lower 1993 rate was chiefly caused by the lesser
impact of stable nondeductible goodwill amortization on higher 1993 pretax
earnings.
Excluding goodwill amortization, the effective income tax rate would
have increased to 42.4% in 1993 from 42.1% in 1992, the result of an
increase as of January 1, 1993, to 35% from 34% in the corporate federal
income tax rate, which diluted net income about $3.3 million, or
three cents per share. The effective tax rate in 1991 excluding goodwill
amortization and the write-down of assets was 40.9%.
<PAGE>
PAGE 19
In 1992 the company adopted SFAS No. 109, "Accounting for Income
Taxes," which mandates a change in accounting for income taxes from an
income statement-based deferred method to a balance sheet-based asset/
liability method. The cumulative effect of the accounting change was a
benefit of $21.6 million, or $.21 per share, to 1992 earnings.
The Omnibus Budget Reconciliation Act of 1993 raised the federal
corporate income tax rate to 35%. The revaluation of deferred taxes, as
required by SFAS No. 109, at the 35% rate was immaterial.
FINANCIAL POSITION
Cash provided by operations in 1993 was $337.6 million, up $32 million,
or 10.5%, from $305.6 million in 1992. The increase, which mainly resulted
from higher earnings, was tempered by a $28.7 million rise in accounts
receivable in 1993 relative to a $0.8 million decline in 1992. The increase
in accounts receivable was attributable both to revenue growth and a
slowdown in advertising receipts resulting from the elimination in early
1993 of a cash discount. In 1993 cash generated through operations was
used to pay dividends of $79.8 million, fund capital expenditures of $159.9
<PAGE>
million and repay debt of $73.9 million. In 1993 Dow Jones purchased
1,668,000 shares of its stock totaling $48.3 million. The year-end cash
balance was reduced to $5.7 million in 1993 from $16.4 million at year-end
1992.
At December 31, 1993, outstanding long-term debt, excluding current
maturities, was $261.1 million. The debt-to-equity ratio at December 31,
1993, was 17.5%, compared with 23.1% at 1992's year end. Long-term debt
peaked at $719 million on December 31, 1989, when the debt-to-equity ratio
was 51.2%. The company used commercial paper to retire long-term notes of
$100 million which matured on February 1, 1994, and will likely use
commercial paper again to retire long-term notes of approximately $92
million which will mature on December 1, 1994.
The company expects in 1994 to be able to meet its normal recurring
operating commitments, to fund estimated capital expenditures of roughly
$210 million, to pay dividends of about $84 million and to repay a portion
of its commercial paper borrowings, all with cash provided by operations.
Capital spending in 1994 will include press equipment, which will enable the
company's business publications to offer advertisers limited four-color
capability several years hence, as well as continued investments in the
technical infrastructure of print and electronic services.
Working capital, excluding unearned revenue, was 1 to 1 at December 31,
1993, compared with 0.9 to 1 at December 31, 1992. Return on equity rose to
9.9% in 1993 from 7.4% in 1992 and 5% in 1991. On January 19, 1994, Dow
Jones announced that it would raise its quarterly dividend to 21 cents per
share from 20 cents per share, an increase of 5%.
<PAGE>
PAGE 20
In January 1994, the company acquired a minority interest in a
subsidiary of Hubbard Broadcasting, Inc., United States Satellite
Broadcasting Company, Inc., for $20 million plus services valued at $5
million. U.S. Satellite plans to broadcast television programming directly
to viewers who will receive the signals on 18-inch dish antennas linked to
special home receivers. Dow Jones will be the exclusive provider of
business and financial news to U.S. Satellite Broadcasting. Also, in early
1994 Dow Jones agreed to lease a transponder to increase its flexibility in
distributing television programming in Asia. The transponder will be on the
APSTAR-2 satellite, which is scheduled to be launched in late 1994 or early
1995. Both investments reflect Dow Jones' intention to become more active
in television programming on a global basis.
OUTLOOK
In 1994 business publications revenues are expected to continue showing
improvement from both rate and volume increases. Advertising rates at The
Wall Street Journal were raised an average of almost four percent effective
January 3, 1994. Improvement in domestic Journal advertising linage is
largely dependent on the continuing recovery of the national economy.
Advertising rates at the Journal's overseas editions were raised an average
of about eight percent, effective January 3, 1994.
Information services revenues in 1994 are expected to continue to
increase at a rate similar to the annual rates of growth achieved over the
<PAGE>
past several years. It is expected that a significant portion of the growth
will continue to come from Dow Jones Telerate's overseas operations.
Information services will continue to make substantial investments in
expanded information and product enhancements. Dow Jones Telerate is
expected to expand the capacity of its networks and will continue to
integrate all its information into more flexible systems. In addition,
information services will continue to concentrate in 1994 on developing
advanced platforms for the storage and retrieval of text, user-friendly,
front-end software for customer terminals and an interactive, real-time
edition of The Wall Street Journal.
Following revenue increases at the community newspapers segment of 4.2%
in 1993 and 3.4% in 1992, revenues are expected to grow modestly in 1994
largely due to price increases.
Dow Jones continues to maintain and monitor its budgetary cost controls
despite the continuing signs of U. S. economic recovery.
In 1993 the company benefited from substantial discounts from its
newsprint suppliers. No increase in stated newsprint prices is anticipated
in 1994, and discounts on average are not expected to vary substantially.
Second class postage rates were last raised in February 1991. No postal
rate increases are anticipated in 1994.
In the absence of a major acquisition, it is expected that interest
expense will continue to fall in 1994 as notes due in 1994 will most likely
be refinanced with lower rate commercial paper.
<PAGE>
PAGE 21
In November 1992 the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 112, "Employers' Accounting
for Postemployment Benefits," which provides for a change in current
accounting practice by requiring accrual, during the years that the employee
renders service, of the costs of providing certain postemployment benefits.
Currently, most of these expenses are accrued by the company at termination.
The company will adopt SFAS No. 112 in the first quarter of 1994 and
will record an after-tax cumulative adjustment of approximately $3 million.
The annual expense of postemployment benefits is not expected to be
materially different from the current expense.
<PAGE>
PAGE 22
<TABLE>
<CAPTION>
ITEM 8. Financial Statements and Supplementary Data
CONSOLIDATED STATEMENTS OF INCOME
Dow Jones & Company, Inc.
For the years ended December 31, 1993, 1992 and 1991
==============================================================================
(in thousands except per share amounts) 1993 1992 1991
- - - ------------------------------------------------------------------------------
<PAGE>
<S> <C> <C> <C>
REVENUES:
Information services $ 861,979 $ 809,387 $ 762,026
Advertising 699,009 654,598 624,581
Circulation and other 370,828 353,885 338,472
- - - ------------------------------------------------------------------------------
Total revenues 1,931,816 1,817,870 1,725,079
- - - ------------------------------------------------------------------------------
EXPENSES:
News, operations and development 625,116 579,737 528,961
Selling, administrative and general 598,292 590,013 559,435
Newsprint 106,357 93,299 114,774
Second class postage and
carrier delivery 96,926 94,818 93,225
Depreciation and amortization (Note 1) 188,665 179,312 187,944
- - - ------------------------------------------------------------------------------
Operating expenses 1,615,356 1,537,179 1,484,339
- - - ------------------------------------------------------------------------------
Operating income 316,460 280,691 240,740
OTHER INCOME (DEDUCTIONS):
Investment income 5,060 6,829 6,480
Interest expense (22,555) (30,355) (41,166)
Equity in earnings (losses) of
associated companies (Note 3) 72 (4,190) 3,863
Other, net (Note 2) (12,797) (18,638) (50,531)
- - - ------------------------------------------------------------------------------
Income before income taxes (Note 7) 286,240 234,337 159,386
Income taxes (Note 7) 138,693 115,946 87,197
- - - ------------------------------------------------------------------------------
Income before cumulative effect of
accounting changes 147,547 118,391 72,189
Cumulative effect of accounting changes
(Notes 1, 7 & 10) (10,805)
- - - ------------------------------------------------------------------------------
NET INCOME $ 147,547 $ 107,586 $ 72,189
==============================================================================
PER SHARE (Note 12):
Income before cumulative effect of
accounting changes $1.48 $1.17 $.71
Cumulative effect of accounting changes (.11)
Net income 1.48 1.06 .71
Cash dividends .80 .76 .76
==============================================================================
Weighted average shares outstanding 99,773 101,150 101,011
==============================================================================
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
PAGE 23
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
Dow Jones & Company, Inc.
December 31, 1993 and 1992
<PAGE>
===============================================================================
(dollars in thousands) 1993 1992
- - - -------------------------------------------------------------------------------
<S> <C> <C>
ASSETS:
Current Assets:
Cash and cash equivalents (Note 1) $ 5,652 $ 16,416
Accounts receivable -- trade, net of
allowance for doubtful accounts of
$14,548 in 1993 and $16,443 in 1992 192,855 164,199
Newsprint inventory (Notes 1 & 4) 7,576 7,237
Deferred income taxes (Notes 1 & 7) 15,784 18,530
Prepaid expenses 22,966 24,642
Other current assets 23,628 18,403
- - - -------------------------------------------------------------------------------
Total current assets 268,461 249,427
- - - -------------------------------------------------------------------------------
Investments in Associated Companies, at equity (Note 3) 70,653 64,304
Other Investments (Notes 2, 5 & 16) 55,009 61,707
Plant and Property, at cost:
Land 22,942 22,980
Buildings and improvements 322,899 308,406
Equipment 1,302,757 1,233,582
Construction in progress 27,155 16,550
- - - -------------------------------------------------------------------------------
1,675,753 1,581,518
Less, Allowance for depreciation (Note 1) 1,081,286 988,546
- - - -------------------------------------------------------------------------------
594,467 592,972
Excess of Cost over Net Assets of Businesses
Acquired, less accumulated amortization of
$243,424 in 1993 and $203,649 in 1992
(Note 1) 1,347,757 1,391,197
Other Assets 13,192 12,428
- - - -------------------------------------------------------------------------------
Total assets $2,349,539 $2,372,035
===============================================================================
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
PAGE 24
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
===============================================================================
(dollars in thousands) 1993 1992
- - - -------------------------------------------------------------------------------
<PAGE>
<S> <C> <C>
LIABILITIES:
Current Liabilities:
Accounts payable -- trade $ 69,032 $ 63,479
Accrued wages, salaries and commissions 46,883 46,746
Profit sharing and other retirement plan
contributions payable (Note 9) 35,122 32,673
Other payables 53,524 65,573
Federal and state income taxes (Note 7) 56,739 56,926
Unearned revenue (Note 1) 204,220 191,754
Current maturities of long-term debt (Note 5) 5,318 5,318
- - - -------------------------------------------------------------------------------
Total current liabilities 470,838 462,469
Long-Term Debt (Notes 5 & 16) 261,073 334,718
Deferred Compensation, principally postretirement
benefit obligation (Notes 1 & 10) 118,985 110,269
Deferred Income Taxes (Notes 1 & 7) 5,327 13,797
Other Liabilities 486 1,391
- - - -------------------------------------------------------------------------------
Total liabilities 856,709 922,644
- - - -------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY:
Common Stock, par value $1 per share; authorized
135,000,000 shares; issued 80,002,971 shares
in 1993 and 79,860,448 shares in 1992 80,003 79,860
Class B Common Stock, convertible, par value $1
per share; authorized 25,000,000 shares; issued
22,178,050 shares in 1993 and 22,320,573 shares
in 1992 22,178 22,321
- - - -------------------------------------------------------------------------------
102,181 102,181
Additional Paid-in Capital 135,109 135,151
Retained Earnings 1,309,533 1,241,819
- - - -------------------------------------------------------------------------------
1,546,823 1,479,151
Less, Treasury Stock at cost, 2,396,573 shares in
1993 and 1,577,752 shares in 1992 53,993 29,760
- - - -------------------------------------------------------------------------------
Total stockholders' equity 1,492,830 1,449,391
- - - -------------------------------------------------------------------------------
Total liabilities and stockholders' equity $2,349,539 $2,372,035
===============================================================================
</TABLE>
<PAGE>
PAGE 25
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
Dow Jones & Company, Inc.
For the years ended December 31, 1993, 1992 and 1991
======================================================================================
(in thousands) 1993 1992 1991
--------------------------------------------------------------------------------------
<S> <C> <C> <C>
OPERATING ACTIVITIES:
<PAGE>
Net income $147,547 $107,586 $ 72,189
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 147,495 138,372 142,358
Amortization of excess of cost over net
assets of businesses acquired 41,170 40,940 40,868
Amortization of deferred costs 4,718
(Gain) on sale of businesses and investments (868) (1,121)
(Gain) loss on disposition of plant and property (529) 2,011 (316)
Write-down of assets 8,171 13,422 45,006
Cumulative effect of accounting changes 10,805
Equity in (earnings) losses of associated
companies, net of distributions 6,549 4,423 2,009
Changes in assets and liabilities:
Accounts receivable - trade (29,679) 371 (5,856)
Unearned revenue 13,451 1,554 6,660
Newsprint inventory (346) 302 1,994
Other current assets (3,834) (3,552) 2,241
Accounts payable and accrued liabilities 1,252 (2,330) 20,313
Federal and state income taxes 1,429 (2,514) 29,191
Deferred taxes (5,724) (16,720) (25,675)
Deferred compensation 8,716 10,285 5,600
Other, net 2,768 1,771 4,125
--------------------------------------------------------------------------------------
Net cash provided by operating activities 337,568 305,605 345,425
--------------------------------------------------------------------------------------
INVESTING ACTIVITIES:
Additions to plant and property (159,943) (125,626) (105,961)
Disposition of plant and property 7,542 11,567 8,797
Businesses and investments acquired, net of
cash received (24,915) (10,608) (2,739)
Businesses and investments sold, net of cash given 4,694 3,083
Proceeds from guaranteed investment contract 5,318 5,318 5,318
Investees' (loans) repayments (185) 100 2,500
--------------------------------------------------------------------------------------
Net cash used in investing activities (167,489) (116,166) (92,085)
--------------------------------------------------------------------------------------
FINANCING ACTIVITIES:
Cash dividends (79,833) (76,912) (76,765)
Increase in long-term debt 47,278 86,055 99,550
Reduction of long-term debt (121,188) (199,746) (259,778)
Proceeds from sale under stock purchase plans 22,553 10,815 4,542
Purchase of treasury stock (48,312) (28,429)
--------------------------------------------------------------------------------------
Net cash used in financing activities (179,502) (208,217) (232,451)
--------------------------------------------------------------------------------------
</TABLE>
<PAGE>
PAGE 26
<TABLE>
<CAPTION>
<S> <C> <C> <C>
EFFECT OF EXCHANGE RATE CHANGES ON CASH (1,341) (828) (3,172)
-------------------------------------------------------------------------------------
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (10,764) (19,606) 17,717
Cash and cash equivalents at beginning of year 16,416 36,022 18,305
<PAGE>
-------------------------------------------------------------------------------------
Cash and cash equivalents at end of year $ 5,652 $ 16,416 $ 36,022
=====================================================================================
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
PAGE 27
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Dow Jones & Company, Inc.
For the years ended December 31, 1993, 1992 and 1991
================================================================================================================
Class B Additional Treasury Stock
(in thousands Common Common Paid-in Retained -----------------
except shares) Stock Stock Capital Earnings Shares Amount Total
- - - ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1990 $79,088 $23,093 $148,128 $1,215,721 (1,303,464) $(30,603) $1,435,427
Net income - 1991 72,189 72,189
Dividends, $.76 per share (76,765) (76,765)
Conversion of class B common
stock into common stock 498 (498)
Sales under stock purchase plans (5,220) 240,271 9,977 4,757
- - - ----------------------------------------------------------------------------------------------------------------
Balance, December 31, 1991 79,586 22,595 142,908 1,211,145 (1,063,193) (20,626) 1,435,608
Net income - 1992 107,586 107,586
Dividends, $.76 per share (76,912) (76,912)
Conversion of class B common
stock into common stock 274 (274)
Capital changes of investee (26) (26)
Sales under stock purchase
plans (7,731) 444,383 19,295 11,564
Purchase of treasury stock (958,942) (28,429) (28,429)
- - - ----------------------------------------------------------------------------------------------------------------
Balance, December 31, 1992 79,860 22,321 135,151 1,241,819 (1,577,752) (29,760) 1,449,391
Net income - 1993 147,547 147,547
Dividends, $.80 per share (79,833) (79,833)
Conversion of class B common
stock into common stock 143 (143)
Sales under stock purchase
plans (Note 8) (42) 849,179 24,079 24,037
Purchase of treasury stock (1,668,000) (48,312) (48,312)
- - - ----------------------------------------------------------------------------------------------------------------
Balance, December 31, 1993 $80,003 $22,178 $135,109 $1,309,533 (2,396,573) $(53,993) $1,492,830
================================================================================================================
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
PAGE 28
<PAGE>
NOTES TO FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
THE CONSOLIDATED FINANCIAL STATEMENTS include the accounts of the company
and its majority-owned subsidiaries. The equity method of accounting is
used for companies and other investments in which the company's common stock
ownership and partnership equity is at least 20% and not more than 50% (see
Note 3). All significant intercompany transactions are eliminated in
consolidation.
UNEARNED REVENUE is recorded as earned, pro rata on a monthly basis, over
the life of subscriptions. Costs in connection with the procurement of
subscriptions are charged to expense as incurred.
DEPRECIATION is computed using straight-line or declining-balance methods
over the estimated useful lives of the respective assets or terms of the
related leases. Upon retirement or sale, the cost of disposed assets and
the related accumulated depreciation are deducted from the respective
accounts and the resulting gain or loss is included in income.
MAINTENANCE AND REPAIRS are charged to expense as incurred. Major renewals,
betterments and additions are capitalized.
CASH EQUIVALENTS are highly liquid investments with a maturity of three
months or less when purchased.
NEWSPRINT INVENTORY is stated at the lower of last-in, first-out (LIFO) cost
or market (see Note 4).
DEFERRED INCOME TAXES are provided for temporary differences in bases
between financial statement and income tax assets and liabilities. In 1992,
the company adopted Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes." Accordingly, deferred tax assets and
liabilities are recalculated annually at tax rates then in effect (see Note
7).
THE EXCESS OF COST OVER NET ASSETS OF BUSINESSES ACQUIRED (GOODWILL) is
amortized using the straight-line method over various periods, principally
forty years. The company evaluates annually whether there has been a
permanent impairment in the value of goodwill. Factors considered in the
valuation include cash flows from operations of businesses acquired and the
market value of comparable companies.
FORWARD EXCHANGE CONTRACTS are entered into to insulate contracted revenue
streams from foreign currency exchange rate fluctuations. As such, these
nonspeculative forward exchange contracts are not recorded on the company's
consolidated balance sheet. Also, unrealized gains and losses on these
forward exchange contracts are deferred and realized upon settlement.
Accordingly, cash flows resulting from forward exchange contract settlements
are classified as cash provided by operations as are the corresponding cash
flows from the revenue streams being insulated (see Note 16).
<PAGE>
PAGE 29
ACCOUNTING CHANGES required by two recent accounting standards, Statement of
Financial Accounting Standards No. 106, "Employers' Accounting for
<PAGE>
Postretirement Benefits Other Than Pensions," and Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes," were adopted by
the company effective January 1, 1992. The impact, as of January 1, 1992,
of these changes on the consolidated statement of income was recorded as the
cumulative effect of accounting changes as follows:
<TABLE>
<CAPTION>
===========================================================================
(in thousands)
- - - ---------------------------------------------------------------------------
<S> <C>
Accrual method of recognizing postretirement
benefits other than pensions, net of income
taxes (see Note 10) ($32,370)
Asset/liability method of recognizing income
taxes (see Note 7) 21,565
- - - ---------------------------------------------------------------------------
Cumulative effect of accounting changes ($10,805)
===========================================================================
</TABLE>
NOTE 2. OTHER, NET
Other, net includes write-downs of assets and gains/losses from foreign
currency exchange rate fluctuations, as well as other miscellaneous non-
operating income and expenses.
In 1993's fourth quarter, the company recorded a charge of $8.2 million
($5.4 million after taxes) to write down certain of its assets.
In the fourth quarter of 1992, a charge of $13.4 million ($8 million after
taxes) was recorded to write down certain of the company's assets. The
assets written down included the company's minority position in Groupe
Expansion, S.A., a French publisher of business magazines, as well as Groupe
Expansion-related companies, and the Chapel Hill News, a community newspaper
held by the company's Ottaway Newspapers, Inc. subsidiary.
In 1991's fourth quarter, the company wrote down certain assets of its
foreign exchange direct dealing service. This write-down of goodwill,
capitalized development costs and equipment resulted in a charge of
approximately $45 million ($31.8 million after taxes).
<PAGE>
PAGE 30
NOTE 3. INVESTMENTS IN ASSOCIATED COMPANIES, AT EQUITY
The operating results of the principal associated companies accounted for by
the equity method have been included in the accompanying consolidated
financial statements on the following bases: Bear Island Paper Company,
L.P. (Bear Island Paper), 33% owned; Bear Island Timberlands Company, L.P.,
33% owned; and F.F. Soucy, Inc. & Partners and Company, Limited (Soucy), 40%
owned.
The company, as a limited partner in Bear Island Paper and Soucy, has signed
long-term contracts with both covering a substantial portion of its annual
newsprint requirements. Operating expenses of the company include the cost
<PAGE>
of newsprint supplied by Bear Island Paper and Soucy of $39,558,000 in 1993,
$42,918,000 in 1992 and $45,750,000 in 1991.
In January 1994, the company increased its ownership in Bear Island Paper
Company, L.P. and Bear Island Timberlands Company, L.P. to 35%.
NOTE 4. NEWSPRINT INVENTORY
Newsprint inventory was determined by the last-in, first-out (LIFO) method.
If inventory had been valued by the average cost method, it would have been
approximately $4,976,000 and $5,085,000 higher in 1993 and 1992,
respectively.
NOTE 5. LONG-TERM DEBT
<TABLE>
<CAPTION>
Long-term debt at December 31 was as follows:
============================================================================
(in thousands) 1993 1992
- - - ----------------------------------------------------------------------------
<S> <C> <C>
Commercial paper, 3.25% to 3.30% at December 31, 1993 $ 31,964 $ 86,055
Notes payable, 7.7% and 8.4%, due February 1 and
December 1, 1994 191,882 191,617
Notes payable, Associated Press, 7.75% 42,545 47,864
Floating rate demand industrial development
revenue bonds 14,500
- - - ----------------------------------------------------------------------------
266,391 340,036
Less: current portion 5,318 5,318
- - - ----------------------------------------------------------------------------
Total long-term debt $261,073 $334,718
============================================================================
</TABLE>
Payments on long-term debt are due as follows: $197,200,000 in 1994,
$5,318,000 in 1995, $37,282,000 in 1996, $5,318,000 in 1997, $5,318,000 in
1998 and $15,955,000 thereafter. Interest payments were $22,459,000 in
1993, $31,825,000 in 1992 and $36,637,000 in 1991.
<PAGE>
PAGE 31
The company can borrow up to $400 million through August 12, 1996, under a
revolving credit agreement with several banks. Borrowings may be made
either in Eurodollars with interest that approximates the applicable
Eurodollar rate or in domestic dollars with interest that approximates
either the bank's prime rate or its C/D rate. A fee of 1/8% is payable on
the unused portion of the commitment which the company may terminate or
reduce at any time. Prepayment of borrowings may be made without penalty.
Although there were no borrowings under the agreement as of December 31,
1993, the company intends to maintain the commitment at least through
December 31, 1994. Accordingly, commercial paper was classified as long-
term.
The bank loan agreement contains various restrictive covenants principally
<PAGE>
relating to net worth, liabilities and cash flows. At December 31, 1993,
consolidated net worth exceeded the minimum by $742 million and total
consolidated liabilities were $1.7 billion less than the maximum.
In December 1989 the company sold $100 million of 8.4% notes due December 1,
1994 and in February 1991 the company sold $100 million of 7.7% notes due
February 1, 1994. Based on the company's ability and intent to refinance
these notes on a long-term basis, through either long-term debt issuances or
the issuance of commercial paper supported by the company's revolving credit
agreement, these notes have been classified as long-term. The notes are
general unsecured obligations of the company and may not be called prior to
maturity. In 1992, at the request of a noteholder, the company redeemed $8
million of its 8.4% notes due December 1, 1994.
The notes payable to the Associated Press are owed by the company in equal
annual principal payments of $5,318,000 which commenced in 1991. The
company purchased a guaranteed investment contract from an insurance company
which is supported by an irrevocable stand-by letter of credit. The
contract, which is included in Other Investments, provides for payments to
the company of interest and principal that match the payments owed the
Associated Press.
The floating rate demand industrial development revenue bonds were repaid
during 1993.
NOTE 6. CAPITAL STOCK
Common stock and class B common stock have the same dividend and liquidation
rights. Class B common stock has ten votes per share, free convertibility
into common stock on a one-for-one basis and can be transferred in class B
form only to members of the stockholder's family and certain others
affiliated with the stockholder.
<PAGE>
PAGE 32
NOTE 7. INCOME TAXES
Effective January 1, 1992, the company adopted Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes." Under
Statement No. 109, deferred taxes are determined upon the cumulative
differences in bases between financial statement and income tax assets and
liabilities. The measurement of deferred taxes resulting from these
differences is based on currently enacted tax rates.
It was principally the recalculation of deferred taxes at the lower 34%
federal income tax rate enacted in the Tax Reform Act of 1986 that resulted
in the 1992 earnings benefit of $21.6 million, or $.21 per share, which has
been included in the cumulative effect of accounting changes (see Note 1).
During 1993 the Omnibus Budget Reconciliation Act was enacted, which
increased the federal corporate income tax rate to 35%. The impact of
remeasuring deferred tax assets and liabilities at this higher rate was
immaterial.
The company's combined current and noncurrent deferred taxes at December 31,
1993 and 1992, consisted of the following deferred tax assets and
liabilities:
<PAGE>
<TABLE>
<CAPTION>
============================================================================
Deferred Tax Deferred Tax
Assets Liabilities
(in thousands) 1993 1992 1993 1992
- - - ----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Depreciation $65,727 $70,079
Employee benefit plans, including
deferred compensation $56,942 $53,339 3,542 2,942
Sales and product allowances 4,811 7,822
Unremitted foreign earnings 7,765 7,654
Write-down of investments 5,615 5,484
All other 6,071 6,883 1,478 3,428
- - - ----------------------------------------------------------------------------
Total deferred taxes $81,204 $81,182 $70,747 $76,449
============================================================================
</TABLE>
The company has not established a deferred tax asset with respect to certain
foreign operating loss carryforwards which are not expected to be realized.
The components of income before income taxes and accounting changes were as
follows:
<TABLE>
<CAPTION>
============================================================================
(in thousands) 1993 1992 1991
- - - ----------------------------------------------------------------------------
<S> <C> <C> <C>
Domestic $154,298 $123,809 $ 61,458
Foreign 131,942 110,528 97,928
- - - ----------------------------------------------------------------------------
$286,240 $234,337 $159,386
============================================================================
</TABLE>
<PAGE>
PAGE 33
The following is a reconciliation of income tax expense to the amount
derived by multiplying income before income taxes and the cumulative effect
of accounting changes by the statutory federal income tax rate of 35% in
1993 and 34% in 1992 and 1991.
<TABLE>
<CAPTION>
============================================================================
% of % of % of
Income Income Income
Before Before Before
(in thousands) 1993 Taxes 1992 Taxes 1991 Taxes
- - - ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Income before taxes
multiplied by statutory
federal income tax rate $100,184 35.0 $ 79,675 34.0 $54,191 34.0
<PAGE>
State and foreign taxes
net of federal income
tax benefit 21,893 7.6 19,482 8.3 14,097 8.8
Amortization of excess of
cost over net assets of
businesses acquired 14,338 5.0 13,920 5.9 17,757 11.1
Other, net 2,278 0.9 2,869 1.3 1,152 0.8
- - - ----------------------------------------------------------------------------
$138,693 48.5 $115,946 49.5 $87,197 54.7
============================================================================
</TABLE>
In the table shown above, amortization of excess of cost over net assets of
businesses acquired for 1991 includes the write-down of The Trading Service.
<TABLE>
Income tax expense was as follows:
<CAPTION>
============================================================================
(in thousands) Federal State Foreign Total
- - - ----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1993:
Currently payable $102,588 $24,632 $15,075 $142,295
Deferred (9,357) 6,376 (621) (3,602)
- - - ----------------------------------------------------------------------------
Total $ 93,231 $31,008 $14,454 $138,693
============================================================================
1992:
Currently payable $ 98,792 $27,280 $ 8,810 $134,882
Deferred (16,848) (2,383) 295 (18,936)
- - - ----------------------------------------------------------------------------
Total $ 81,944 $24,897 $ 9,105 $115,946
============================================================================
1991:
Currently payable $ 76,137 $24,070 $12,424 $112,631
Deferred (20,103) (4,552) (779) (25,434)
- - - ----------------------------------------------------------------------------
Total $ 56,034 $19,518 $11,645 $ 87,197
============================================================================
</TABLE>
<PAGE>
PAGE 34
Income tax payments were $142,988,000 in 1993, $135,180,000 in 1992 and
$83,681,000 in 1991.
<PAGE>
PAGE 35
NOTE 8. STOCK PURCHASE, STOCK OPTION AND EXECUTIVE INCENTIVE PLANS
STOCK PURCHASE PLAN: Under the terms of the Dow Jones 1990 Employee Stock
Purchase Plan, eligible employees may purchase shares of the company's
common stock based on compensation through payroll deductions or lump-sum
<PAGE>
payment. The purchase price for payroll deductions is the lower of 85% of
the fair market value of the stock on the first or last day of the purchase
period. Lump-sum purchases are made during the offering period at the lower
of 85% of the fair market value of the stock on the first day of the
purchase period or the payment date.
<TABLE>
<CAPTION>
The activity in the plan was as follows:
===========================================================================
Shares Subscribed
--------------------------
Price 1993 1992
- - - ---------------------------------------------------------------------------
<S> <C> <C> <C>
Balance, January 1 140,091 140,811
Shares subscribed 213,782 200,338
Purchases $23.59 to $26.35 (200,711) (191,969)
Terminated or canceled (9,638) (9,089)
- - - ---------------------------------------------------------------------------
Balance, December 31 143,524 140,091
===========================================================================
</TABLE>
At December 31, 1993, there were 1,014,350 shares available for future
offerings.
STOCK OPTION PLAN: Under the Dow Jones 1991 Stock Option Plan, options for
shares of common stock may be granted to key employees at not less than the
fair market value of the common stock on the date of grant. Options expire
ten years from the date of grant.
EXECUTIVE INCENTIVE PLANS: The executive incentive plans provide for the
grant to key executives of stock options, performance awards, which were
suspended in 1992, and contingent stock rights. The incentive plans are
administered by the compensation committee of the Board of Directors, the
members of which may not participate in the plans.
The Dow Jones 1992 Long Term Incentive Plan provides for the grant to key
executives of stock options and contingent stock rights (collectively, "plan
awards"). Options for shares of common stock may be granted at not less
than the fair market value of the common stock on the date of grant. An
optionee may purchase shares upon exercise of an option or may surrender
exercisable options in return for an amount equal to any excess of the
market value over the option price on the day the option is surrendered.
Payment to the optionee for such stock appreciation rights may be made in
common stock, cash or a combination of both. Options expire ten years after
date of grant.
<PAGE>
PAGE 36
Contingent stock rights entitle the participant to receive future payments
in the form of common stock. The number of shares of common stock
ultimately received will depend upon the extent to which specified
performance criteria are achieved over the performance period, the
participant's individual performance and other factors, all as determined by
the compensation committee. Accordingly, the number of shares received
could be less than or equal to the number specified in the right, but not
<PAGE>
greater than 125% of that amount.
<PAGE>
PAGE 37
<TABLE>
<CAPTION>
The activity in the stock option and executive incentive plans was as follows:
=============================================================================
Stock Option Executive Incentive
Plan Plans
------------ ----------------------
Shares Shares Contingent
Option Under Under Stock
Prices Option Option Rights
- - - -----------------------------------------------------------------------------
<S> <C> <C> <C>
Balance, December 31, 1990 1,529,764 491,382
Granted $26.00 782,510 179,600
Exercised $10.29 to $22.17 (27,522) (8,552)
Terminated/canceled (77,065)
Surrendered upon exercise
of stock appreciation
rights at $24.25 to $25.50 (225) (2,013)
- - - -----------------------------------------------------------------------------
Balance, December 31, 1991 2,207,462 660,417
Granted $32.88 and $41.09 693,150 98,000 94,200
Granted $28.38 and $35.47 751,200 116,000 109,100
Exercised $15.42 to $32.42 (226,924) (27,864)
Terminated/canceled (66,465) (39,058) (5,900)
Surrendered upon exercise
of stock appreciation
rights at $31.00 to $33.38 (1,515) (22,870)
- - - -----------------------------------------------------------------------------
Balance, December 31, 1992 3,356,908 784,625 197,400
Granted $35.13 and $43.91 518,600 99,300 88,200
Exercised $22.17 to $32.88 (608,220) (51,878)
Terminated/canceled (136,059) (8,611) (4,400)
Surrendered upon exercise
of stock appreciation
rights at $30.00 to $35.88 (13,117) (11,923)
- - - -----------------------------------------------------------------------------
Balance, December 31, 1993 3,118,112 811,513 281,200
=============================================================================
Year granted:
1984 $27.25 38,683 11,023
1985 $28.83 and $31.75 67,559 18,218
1986 $32.42 112,130 32,393
1987 $53.00 and $54.25 85,400 26,104
1988 $32.00 160,680 45,024
1989 $32.50 217,115 82,091
1990 $28.13 284,385 136,260
1991 $26.00 420,520 157,900
1992 $32.88 and $41.09 584,800 89,700 86,300
1992 $28.38 and $35.47 630,440 113,500 106,700
1993 $35.13 and $43.91 516,400 99,300 88,200
- - - -----------------------------------------------------------------------------
3,118,112 811,513 281,200
<PAGE>
=============================================================================
Available for future
grants, December 31, 1993 3,143,950 916,300
=============================================================================
</TABLE>
<PAGE>
PAGE 38
Under the stock option plan, options granted in 1993 become exercisable in
1994 and all other options granted were exercisable at December 31, 1993.
Under the executive incentive plans, options granted prior to 1991 become
exercisable and performance awards and contingent stock rights become
payable four years after they are granted. Fifty percent of the options
granted in 1991 and thereafter become exercisable in the year following the
year of grant; the balance of the options granted become exercisable in the
second year following the year of grant.
Compensation expense was $2,826,000 in 1993, $1,850,000 in 1992 and
$1,633,000 in 1991, with respect to both the stock option and executive
incentive plans.
NOTE 9. PROFIT SHARING AND PENSION PLANS
The company and certain subsidiaries have profit sharing retirement plans
for a majority of employees who meet specified length of service
requirements. The annual cost of the plans, which are funded currently, is
based upon a percentage of consolidated net income, as defined, or
compensation but is limited to the amount deductible for income tax
purposes.
Substantially all employees of subsidiaries who are not covered by the above
plans are covered by noncontributory defined benefit pension plans. These
plans are not material in respect to charges to operations.
Total profit sharing and pension plan expenses amounted to $44,805,000,
$42,157,000 and $38,420,000 in 1993, 1992 and 1991, respectively.
<PAGE>
PAGE 39
NOTE 10. POSTRETIREMENT BENEFITS OTHER THAN PENSIONS, AND POSTEMPLOYMENT
BENEFITS
For a majority of its employees, the company sponsors a defined benefit
postretirement medical plan which provides lifetime health care benefits to
retirees, who meet specified length of service and age requirements, and
their eligible dependents. The plan is unfunded. The company sponsors no
other postretirement benefit plans other than its profit sharing and pension
plans (see Note 9).
As of January 1, 1992, the provisions of Statement of Financial Accounting
Standards No. 106, "Employers' Accounting for Postretirement Benefits Other
Than Pensions," were adopted. The company elected immediate recognition of
its liability attributable to service prior to 1992. Accordingly, after-tax
earnings for 1992 were lowered $32.4 million, or $.32 per share, which was
included in the cumulative effect of accounting changes (see Note 1).
<PAGE>
<TABLE>
<CAPTION>
The following sets forth the plan's status reconciled with amounts reported
in the company's consolidated balance sheets at December 31.
===========================================================================
(in thousands) 1993 1992
- - - ---------------------------------------------------------------------------
<S> <C> <C>
Accumulated postretirement benefit obligation (APBO):
Retirees $16,977 $17,173
Fully eligible active plan participants 13,788 10,749
Other active plan participants 52,573 44,107
- - - ---------------------------------------------------------------------------
Total APBO as of December 31 83,338 72,029
Less: Unrecognized net loss (2,052)
- - - ---------------------------------------------------------------------------
Accrued postretirement benefit liability at
December 31 $81,286 $72,029
===========================================================================
</TABLE>
<TABLE>
<CAPTION>
Pretax postretirement benefit expense included the following components:
===========================================================================
(in thousands) 1993 1992
- - - ---------------------------------------------------------------------------
<S> <C> <C>
Service cost $ 4,850 $4,345
Interest cost 6,168 5,320
- - - ---------------------------------------------------------------------------
Net periodic postretirement benefit cost $11,018 $9,665
===========================================================================
</TABLE>
A 12.5% annual rate of increase in the per capita costs of covered health
care benefits was assumed for 1994, gradually decreasing to 5.5% by the year
2008. Increasing the assumed health care cost trend rates by one percentage
point in each year would increase the accumulated postretirement benefit
obligation as of December 31, 1993, by $15.4 million and increase the
aggregate of the service cost and interest cost components of net periodic
postretirement benefit cost for 1993 by $2.3 million. A discount rate of
7% was used to determine the accumulated postretirement benefit obligation
as of December 31, 1993.
<PAGE>
PAGE 40
At December 31, 1992, the company's accumulated postretirement benefit
obligation was calculated using a discount rate of 8.5% and a health care
cost trend rate of 13.7% for 1993 decreasing to 6.6% by the year 2017.
See Management's Discussion and Analysis regarding Statement of Financial
Accounting Standards No. 112, "Employers' Accounting for Postemployment
Benefits."
<PAGE>
NOTE 11. COMMITMENTS
Commitments for capital expenditures amounted to $24,160,000 at December 31,
1993. Also, the company has a commitment to invest a total of $8,750,000 in
certain of its newsprint affiliates in January 1994 (see Note 3).
<TABLE>
<CAPTION>
Noncancelable leases require minimum rental payments through 2011 totaling
$395,851,000. Payments required for the years 1994 through 1998 are as
follows:
============================================================================
(in thousands) 1994 1995 1996 1997 1998
- - - ----------------------------------------------------------------------------
<C> <C> <C> <C> <C>
$54,879 $51,025 $45,132 $41,657 $36,054
============================================================================
</TABLE>
These leases are principally for office space and equipment and contain
renewal and escalation clauses. Total rental expense amounted to
$83,853,000 in 1993, $82,382,000 in 1992 and $80,610,000 in 1991.
At December 31, 1993, the company had foreign currency forward exchange
contracts settling on various dates through January 1995 to sell 6.6 billion
Japanese yen (against $59,501,000). Risk arises from movements in foreign
currency exchange rates and from the possible inability of counterparties to
meet the terms of their commitments, which the company views as unlikely.
The company has the obligation to furnish financial support in the form of
capital contributions, loans and loan guarantees up to a total of $16.6
million to certain of its investees. At December 31, 1993, loan guarantees
of $7,344,000 with remaining terms of up to nine and one-half years were in
effect. The company views it as unlikely that its investees will fail to
meet the terms of their loan obligations.
NOTE 12. PER SHARE AMOUNTS
Net income per share has been computed on the basis of the weighted average
number of shares outstanding (99,773,000 shares in 1993, 101,150,000 shares
in 1992 and 101,011,000 in 1991). The assumed exercise of outstanding
options under the stock purchase, stock option and executive incentive plans
does not have a material dilutive effect on earnings per share.
<PAGE>
PAGE 41
NOTE 13. RECLASSIFICATIONS
Certain amounts for prior years have been reclassified for comparative
purposes.
NOTE 14. SUMMARY OF QUARTERLY FINANCIAL DATA (UNAUDITED)
The summary of unaudited 1993 and 1992 quarterly financial data shown on
<PAGE>
pages 47 and 48 of this report is incorporated herein by reference.
<PAGE>
PAGE 42
<TABLE>
<CAPTION>
NOTE 15. BUSINESS SEGMENTS
The company's operations by business segment and geographic area were as follows:
Financial Data by Business Segment
================================================================================================
Information Business Community
(in thousands) Services Publications Newspapers Corporate Consolidated
- - - ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenues
1993 $ 861,979 $825,246 $244,591 $1,931,816
1992 809,387 773,753 234,730 1,817,870
1991 762,026 735,939 227,114 1,725,079
Operating income
1993 157,406 143,654 32,563 $(17,163) 316,460
1992 150,678 115,066 31,653 (16,706) 280,691
1991 147,647 81,453 26,922 (15,282) 240,740
Identifiable assets (1)
1993 1,652,394 361,265 199,248 136,632 2,349,539
1992 1,682,972 342,891 198,427 147,745 2,372,035
1991 1,703,897 381,414 200,220 185,053 2,470,584
Depreciation and
amortization expense
1993 138,639 37,044 12,982 188,665
1992 127,535 38,948 12,829 179,312
1991 130,812 44,577 12,555 187,944
Capital expenditures
1993 115,659 31,561 12,723 159,943
1992 99,258 14,532 11,836 125,626
1991 79,833 11,756 14,372 105,961
Investments in associated
companies, at equity (2)
1993 43,224
1992 41,250
1991 46,116
Equity in earnings (losses)
of associated companies (2)
1993 2,252
1992 (4,680)
1991 4,061
=================================================================================================
NOTES:
<PAGE>
(1) Corporate assets include cash and cash equivalents, investments in associated companies and
other investments (see Note 5).
(2) Business publications -- F.F. Soucy, Inc. & Partners and Company, Limited and Bear Island
Paper Company, L.P., operators of newsprint mills located in Quebec, Canada and Richmond,
Virginia, respectively, and Bear Island Timberlands Co., L.P.
</TABLE>
<PAGE>
PAGE 43
<TABLE>
<CAPTION>
Financial Data by Geographic Area
==============================================================================================
United Europe/ Asia/ Other
(in thousands) States Gulf Pacific Foreign Corporate Consolidated
- - - ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Revenues
1993 $1,404,492 $294,415 $192,220 $ 40,689 $1,931,816
1992 1,321,190 278,835 178,398 39,447 1,817,870
1991 1,274,623 251,324 159,202 39,930 1,725,079
Operating income
1993 207,435 53,343 70,471 2,374 $(17,163) 316,460
1992 193,086 41,262 63,310 (261) (16,706) 280,691
1991 165,594 36,130 56,574 (2,276) (15,282) 240,740
Identifiable assets
1993 1,384,358 454,632 251,851 122,066 136,632 2,349,539
1992 1,365,394 477,412 252,772 128,712 147,745 2,372,035
1991 1,403,836 485,576 256,988 139,131 185,053 2,470,584
==============================================================================================
</TABLE>
<PAGE>
PAGE 44
NOTE 16. FAIR VALUE OF FINANCIAL INSTRUMENTS
The following information presents the fair value of the company's financial
instruments which are not carried as such on the company's consolidated
balance sheets. The fair value of these financial instruments as of
December 31, 1993 and 1992, was determined primarily by reference to dealer
markets.
<TABLE>
<CAPTION>
============================================================================
(in thousands) Fair Value Carrying Value
- - - ----------------------------------------------------------------------------
<S> <C> <C>
1993
Other Investments $ 65,657 $ 55,009
Long-Term Debt 268,650 261,073
- - - ----------------------------------------------------------------------------
1992
Other Investments $ 67,210 $ 61,707
Long-Term Debt 346,785 334,718
<PAGE>
============================================================================
</TABLE>
Nonspeculative forward exchange contracts, which insulate contracted revenue
streams from foreign currency exchange rate fluctuations, are not recorded
on the company's consolidated balance sheets (see Note 1). The fair value
of the forward exchange contracts at December 31, 1993, was $59,030,000
against a contracted value of $59,501,000. The fair value as of December
31, 1992, of forward exchange contracts then in effect was $59,344,000
against a contracted value of $59,854,000.
<PAGE>
PAGE 45
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders of
Dow Jones & Company, Inc.:
We have audited the accompanying consolidated balance sheets of Dow Jones &
Company, Inc. and Subsidiaries as of December 31, 1993 and 1992, and the
related consolidated statements of income, stockholders' equity and cash
flows for each of the three years in the period ended December 31, 1993.
These financial statements are the responsibility of the company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and the
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Dow Jones &
Company, Inc. and Subsidiaries as of December 31, 1993 and 1992, and the
consolidated results of their operations and their cash flows for each of
the three years in the period ended December 31, 1993, in conformity with
generally accepted accounting principles.
As discussed in Notes 7 and 10 to the consolidated financial statements,
effective January 1, 1992, the company changed its method of accounting for
income taxes and postretirement benefits other than pensions.
COOPERS & LYBRAND
New York, New York
January 25, 1994
<PAGE>
<PAGE>
PAGE 46
STATEMENT OF MANAGEMENT RESPONSIBILITY FOR FINANCIAL STATEMENTS
To the Stockholders of Dow Jones & Company, Inc.:
Management has prepared and is responsible for the consolidated financial
statements and related information in the Annual Report. The financial
statements, which include amounts based on judgment, have been prepared in
conformity with generally accepted accounting principles consistently
applied.
Management has developed, and in 1993 continued to strengthen, a system of
internal accounting and other controls for the company and its wholly owned
subsidiaries. Management believes these controls provide reasonable
assurance that assets are safeguarded from loss or unauthorized use and that
the company's financial records are a reliable basis for preparing the
financial statements. Underlying the concept of reasonable assurance is the
premise that the cost of control should not exceed the benefit derived. The
company's system of internal controls is supported by written policies, a
program of internal audits, including a periodic review of the Internal
Audit Department, and by a program of selecting and training qualified
staff.
Coopers & Lybrand, independent accountants, have audited the company's
consolidated financial statements, as described in their report. The report
expresses an independent opinion of the fairness of presentation of the
financial statements and, in so doing, provides an independent objective
assessment of the manner in which management meets its responsibility for
fairness and accuracy in financial reporting.
The Board of Directors, through its audit committee consisting solely of
outside directors, is responsible for reviewing and monitoring the company's
financial reporting and accounting practices. The audit committee meets
regularly with management, internal auditors and independent accountants -
both separately and together. The internal auditors and the independent
accountants have free access to the audit committee to review the results of
their audits, the adequacy of internal accounting controls and the quality
of financial reporting.
<PAGE>
PAGE 47
<TABLE>
<CAPTION>
QUARTERLY CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Dow Jones & Company, Inc.
For the fourth quarters ended December 31, 1993 and 1992
============================================================================
(in thousands except per share amounts) 1993 1992
- - - ----------------------------------------------------------------------------
<S> <C> <C>
REVENUES:
Information services $223,459 $212,265
Advertising 192,581 172,932
Circulation and other 96,614 90,914
<PAGE>
- - - ----------------------------------------------------------------------------
Total revenues 512,654 476,111
- - - ----------------------------------------------------------------------------
EXPENSES:
News, operations and development 167,763 156,270
Selling, administrative and general 146,996 148,984
Newsprint 26,767 22,705
Second class postage and carrier delivery 25,581 24,617
Depreciation and amortization 43,984 43,795
- - - ----------------------------------------------------------------------------
Operating expenses 411,091 396,371
- - - ----------------------------------------------------------------------------
Operating income 101,563 79,740
OTHER INCOME (DEDUCTIONS):
Investment income 1,319 1,560
Interest expense (5,213) (6,371)
Equity in losses of associated companies (1,147) (586)
Other, net (Note 2) (8,178) (15,622)
- - - ----------------------------------------------------------------------------
Income before income taxes 88,344 58,721
Income taxes 41,200 28,952
- - - ----------------------------------------------------------------------------
NET INCOME $ 47,144 $ 29,769
============================================================================
PER SHARE:
Net income $.47 $.30
- - - ----------------------------------------------------------------------------
Cash dividends $.20 $.19
============================================================================
Weighted average shares outstanding 99,571 100,887
============================================================================
</TABLE>
<PAGE>
PAGE 48
<TABLE>
<CAPTION>
SUMMARY OF QUARTERLY FINANCIAL DATA
(UNAUDITED)
Dow Jones & Company, Inc.
===========================================================================
Quarter Ended
(in thousands except --------------------------------------
per share amounts) March 31 June 30 Sept. 30 Dec. 31 Year
- - - ---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1993
Revenues $463,435 $487,043 $468,684 $512,654 $1,931,816
Operating income 65,350 81,624 67,923 101,563 316,460
Net income 30,946 39,807 29,650 47,144 147,547
Net income per share .31 .40 .30 .47 1.48
- - - ---------------------------------------------------------------------------
1992
Revenues $436,095 $467,526 $438,138 $476,111 $1,817,870
Operating income 62,451 86,885 51,615 79,740 280,691
Net income 16,143 42,028 19,646 29,769 107,586
<PAGE>
Net income per share .16 .41 .19 .30 1.06
===========================================================================
</TABLE>
Statement of Financial Accounting Standards No. 106, "Employers' Accounting
for Postretirement Benefits Other Than Pensions," and Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes," were
adopted effective January 1, 1992. Excluding the net cumulative effect of
these accounting changes, net income was $26,948,000, or $.27 per share, in
the first quarter of 1992 and $118,391,000, or $1.17 per share, for the
year (see Note 1).
ITEM 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
Not applicable.
PART III.
ITEM 10. Directors and Executive Officers of the Registrant.
The information required by this item with respect to directors of
the company and with respect to compliance with Section 16(a) of the
Securities Exchange Act of 1934 is incorporated by reference to the tables,
including the footnotes thereto, appearing on pages 8 to 10 of the 1994
Proxy Statement and to the material on pages 19 to 20 of the 1994 Proxy
Statement under the caption "Compliance with Section 16(a) of the Exchange
Act". For information relating to executive officers, see Part I, page 11.
<PAGE>
PAGE 49
ITEM 11. Executive Compensation.
The information required by this item is incorporated by reference to
pages 11 to 13 of the 1994 Proxy Statement.
ITEM 12. Security Ownership of Certain Beneficial Owners and Management.
The information required by this item is incorporated by reference to
the tables, including the footnotes thereto, appearing on pages 2 to 6 of
the 1994 Proxy Statement under the captions "Security Ownership of Certain
Beneficial Owners" and "Security Ownership of Directors and Management".
ITEM 13. Certain Relationships and Related Transactions.
The information required by this item is incorporated by reference to
footnotes (3) and (4) on page 10 of the 1994 Proxy Statement and to the
material on page 17 of the 1994 Proxy Statement under the caption
"Compensation Committee Interlocks and Insider Participation".
<PAGE>
PAGE 50
<PAGE>
PART IV.
ITEM 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
14 (a) (1) Financial Statements:
Page
Reference
---------
Included in Part II, Item 8 of this report:
Consolidated statements of income for the years
ended December 31, 1993, 1992 and 1991 22
Consolidated balance sheets, December 31, 1993 and 1992 23-24
Consolidated statements of cash flows for the
years ended December 31, 1993, 1992 and 1991 25-26
Consolidated statements of stockholders' equity for the
years ended December 31, 1993, 1992 and 1991 27
Notes to financial statements 28-44
Report of independent accountants 45
(a) (2) Financial Statement Schedules:
Included in Part IV of this report:
Report and consent of independent accountants 55
V - Property, plant and equipment 56
VI - Accumulated depreciation and amortization of
property, plant and equipment 57
VIII - Valuation and qualifying accounts and reserves 58
X - Supplementary income statement information 59
Other schedules have been omitted since they are either not required or
not applicable.
<PAGE>
PAGE 51
<TABLE>
<CAPTION>
(a) (3) Exhibits
Exhibit
Number Document
------- --------
<S> <C>
<PAGE>
3.1 The Restated Certificate of Incorporation of the Company, as
amended, is hereby incorporated by reference to Exhibit 19.1 to
its Form 10-Q for the quarter ended March 31, 1988.
3.2 The Bylaws of the Company is hereby incorporated by reference to
Exhibit 19.2 to its Form 10-Q for the quarter ended September 30,
1987.
4.1 Form of promissory note for commercial paper is hereby
incorporated by reference to Exhibit 4.1 to its Form 10-Q for the
quarter ended September 30, 1985.
10.1 Deferred Compensation Contracts between the Company and various
officers and directors are hereby incorporated by reference to
Exhibit 20 to its Form 10-K for the year ended December 31, 1980.
10.2 Dow Jones 1981 Stock Option Plan, as amended, is hereby
incorporated by reference to Exhibit 20.2 to its Form 10-Q for the
quarter ended June 30, 1981.
10.3 Dow Jones 1983 Executive Incentive Plan, as amended, is hereby
incorporated by reference to Exhibit 10.3 to its Form 10-K for the
year ended December 31, 1983.
10.4 Lease, as amended, between the Company and Olympia and York
Battery Park Company, of space in The World Financial Center, New
York City, is hereby incorporated by reference to Exhibit 10.9 to
its Form 10-K for the year ended December 31, 1983.
10.5 Dow Jones 1988 Executive Incentive Plan, as amended, is hereby
incorporated by reference to Exhibit 19 to its Form 10-Q for the
quarter ended June 30, 1988.
10.6 Lease, as amended, between the Company and Waterfront Associates,
of space at Harborside Plaza Two, Jersey City, N.J. is hereby
incorporated by reference to Exhibit 10.15 to its Form 10-K for
the year ended December 31, 1989.
10.7 Dow Jones 1991 Stock Option Plan, as amended, is hereby
incorporated by reference to Exhibit 19.2 to its Form 10-Q for the
quarter ended September 30, 1991.
</TABLE>
<PAGE>
PAGE 52
<TABLE>
<CAPTION>
Exhibit
Number Document
------- --------
<S> <C>
10.8 Dow Jones 1992 Long Term Incentive Plan is hereby incorporated by
reference to Exhibit 10 to its Form 10-Q for the quarter ended
March 31, 1992.
10.9 Dow Jones Credit Agreement dated August 13, 1992 between the
<PAGE>
Company and Chemical Bank, is hereby incorporated by reference to
the exhibit to its Form 10-Q for the quarter ended September 30,
1992.
11 Computation of Earnings Per Share.
21 List of Subsidiaries.
23 Consent of Coopers & Lybrand, independent accountants, is
contained on page 55 of this report.
</TABLE>
(b) No reports on Form 8-K were filed during the last quarter of the
1993 fiscal year.
<PAGE>
PAGE 53
Pursuant to the requirements of Section 13 of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
DOW JONES & COMPANY, INC.
By Thomas G. Hetzel
-------------------------
Comptroller
(Chief Accounting Officer)
Dated: March 21, 1994
<TABLE>
<CAPTION>
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Signature Title Date
- - - --------- ----- ----
<S> <C> <C>
Peter R. Kann
- - - -------------------------- Chairman of the Board March 21, 1994
Chief Executive Officer
Kenneth L. Burenga
- - - -------------------------- President March 21, 1994
Chief Operating Officer
<PAGE>
Kevin J. Roche
- - - -------------------------- Vice President/Finance March 21, 1994
Chief Financial Officer
Carl M. Valenti
- - - -------------------------- Director March 21, 1994
James H. Ottaway, Jr.
- - - -------------------------- Director March 21, 1994
William C. Cox, Jr.
- - - -------------------------- Director March 21, 1994
</TABLE>
<PAGE>
PAGE 54
<TABLE>
<CAPTION>
Signature Title Date
- - - --------- ----- ----
<S> <C> <C>
James Q. Riordan
- - - --------------------------- Director March 21, 1994
Martha S. Robes
- - - --------------------------- Director March 21, 1994
Rene C. McPherson
- - - --------------------------- Director March 21, 1994
Bettina Bancroft
- - - --------------------------- Director March 21, 1994
Warren H. Phillips
- - - --------------------------- Director March 21, 1994
Richard D. Wood
- - - --------------------------- Director March 21, 1994
David K. P. Li
- - - --------------------------- Director March 21, 1994
Rand V. Araskog
<PAGE>
- - - --------------------------- Director March 21, 1994
Vernon E. Jordan, Jr.
- - - --------------------------- Director March 21, 1994
Irvine O. Hockaday, Jr.
- - - --------------------------- Director March 21, 1994
</TABLE>
<PAGE>
PAGE 55
INDEPENDENT ACCOUNTANTS' REPORT ON FINANCIAL STATEMENT SCHEDULES
-----------------------
To the Board of Directors and Stockholders
of Dow Jones & Company, Inc.:
Our report on the consolidated financial statements of Dow Jones & Company,
Inc. and its Subsidiaries is included on page 45 of this 1993 Form 10-K. In
connection with our audits of such financial statements, we have also
audited the related financial statement schedules listed in the index on
page 50 of this Form 10-K.
In our opinion, the financial statement schedules referred to above, when
considered in relation to the basic financial statements taken as a whole,
present fairly, in all material respects, the information required to be
included therein.
COOPERS & LYBRAND
New York, New York
January 25, 1994
CONSENT OF INDEPENDENT ACCOUNTANTS
-----------------------
We consent to the incorporation by reference in the Registration Statements
on Form S-3 (File Nos. 33-575 and 33-32110) and Form S-8 (File Nos.
2-72684, 2-95540, 33-35211, 33-45962, 33-45963 and 33-49311) of Dow Jones &
Company, Inc. of our report dated January 25, 1994 appearing on page 45 of
this 1993 Form 10-K. We also consent to the incorporation by reference of
our report on the financial statement schedules, which appears above.
<PAGE>
COOPERS & LYBRAND
New York, New York
March 21, 1994
<PAGE>
PAGE 56
<TABLE>
<CAPTION>
Schedule V
DOW JONES & COMPANY, INC.
and its Subsidiaries
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
for the years ended December 31, 1993, 1992 and 1991
(in thousands)
Other Changes-
Balance at Add (Deduct) Balance
Beginning -------------------- at End
Description of Period Additions Retirements (A) (B) of Period
----------- ---------- --------- ----------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Year ended December 31, 1993:
Land $ 22,980 $ 366 $ 41 $ 113 $ (476) $ 22,942
Buildings and improvements 308,406 12,673 386 130 2,076 322,899
Equipment 1,233,582 118,492 53,683 27 4,339 1,302,757
Construction in progress 16,550 29,342 35 (18,702) 27,155
---------- -------- ------- ------ -------- ----------
$1,581,518 $160,873 $54,145 $ 270 $(12,763) $1,675,753
========== ======== ======= ====== ======== ==========
Year ended December 31, 1992:
Land $ 22,742 $ 343 $ 105 $ 22,980
Buildings and improvements 301,597 12,091 5,317 $ 363 $ (328) 308,406
Equipment 1,141,660 100,204 23,132 4,048 10,802 1,233,582
Construction in progress 33,858 12,988 9,011 (21,285) 16,550
---------- -------- ------- ------ -------- ----------
$1,499,857 $125,626 $37,565 $4,411 $(10,811) $1,581,518
========== ======== ======= ====== ======== ==========
Year ended December 31, 1991:
Land $ 22,212 $ 530 $ 22,742
Buildings and improvements 286,205 11,555 $ 3,020 $ 6,857 301,597
Equipment 1,121,075 70,537 65,772 15,820 1,141,660
Construction in progress 33,294 23,339 22 (22,753) 33,858
---------- -------- ------- -------- ----------
$1,462,786 $105,961 $68,814 $ (76) $1,499,857
========== ======== ======= ======== ==========
Notes:
(A) Property, plant and equipment acquired in business combinations.
(B) Represents transfer of property and equipment placed in service during the year, the effects
</TABLE>
<PAGE>
of changes in foreign exchange rates and the sale of subsidiaries.
<PAGE>
PAGE 57
<TABLE>
<CAPTION>
Schedule VI
DOW JONES & COMPANY, INC.
and its Subsidiaries
SCHEDULE VI - ACCUMULATED DEPRECIATION AND
AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT
for the years ended December 31, 1993, 1992 and 1991
(in thousands)
Additions
Charged to Other Changes-
Balance at Costs and Add (Deduct) Balance
Beginning Expenses -------------------- at End
Description of Period (A) Retirements (B) (C) of Period
----------- ---------- --------- ----------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Year ended December 31, 1993:
Buildings and improvements $121,307 $ 18,674 $ 1,242 $ 1,962 $ 140,701
Equipment 867,239 128,821 45,864 (9,611) 940,585
-------- -------- ------- ------- ----------
$988,546 $147,495 $47,106 $(7,649) $1,081,286
======== ======== ======= ======= ==========
Year ended December 31, 1992:
Buildings and improvements $109,189 $ 17,561 $ 5,054 $ 218 $ (607) $ 121,307
Equipment 768,252 120,811 19,241 2,724 (5,307) 867,239
-------- -------- ------- ------ ------- ----------
$877,441 $138,372 $24,295 $2,942 $(5,914) $ 988,546
======== ======== ======= ====== ======= ==========
Year ended December 31, 1991:
Buildings and improvements $ 94,490 $ 17,420 $ 2,479 $ (242) $ 109,189
Equipment 684,607 124,938 41,754 461 768,252
-------- -------- ------- ------- ----------
$779,097 $142,358 $44,233 $ 219 $ 877,441
======== ======== ======= ======= ==========
Notes:
(A) See Note 1 to the financial statements for depreciation methods.
(B) Accumulated depreciation of property, plant and equipment acquired in business combinations.
(C) Represents the effects of changes in foreign exchange rates and the sale of subsidiaries.
</TABLE>
<PAGE>
PAGE 58
<TABLE>
<CAPTION>
Schedule VIII
<PAGE>
DOW JONES & COMPANY, INC.
and its Subsidiaries
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
for the years ended December 31, 1993, 1992 and 1991
(in thousands)
Additions
------------------------
Balance at Charged to Charged Balance
Beginning Cost and to Other at End
Description of Period Expenses Accounts(A) Deductions(B) of Period
----------- ---------- ---------- ---------- ------------ ---------
<S> <C> <C> <C> <C> <C>
Year ended December 31, 1993:
Reserves deducted from assets -
allowance for doubtful accounts $16,443 $ 5,582 $ 1,520 $ 8,997 $14,548
======= ======= ======= ======= =======
Year ended December 31, 1992:
Reserves deducted from assets -
allowance for doubtful accounts $18,881 $11,112 $ 2,830 $16,380 $16,443
======= ======= ======= ======= =======
Year ended December 31, 1991:
Reserves deducted from assets -
allowance for doubtful accounts $15,404 $12,267 $15,940 $24,730 $18,881
======= ======= ======= ======= =======
Notes:
(A) Recoveries of accounts previously written off and reductions of revenue.
(B) Accounts written off as uncollectible.
</TABLE>
<PAGE>
PAGE 59
<TABLE>
<CAPTION>
Schedule X
DOW JONES & COMPANY, INC.
and its Subsidiaries
SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION
for the years ended December 31, 1993, 1992 and 1991
(in thousands)
Charged to Costs and Expenses
--------------------------------------------
<PAGE>
Item 1993 1992 1991
---- -------- -------- --------
<S <C> <C> <C>>
Maintenance and repairs $ 28,517 $ 27,341 $ 29,141
Amortization of excess of cost over net
assets of businesses acquired 41,170 40,940 40,868
Amortization of deferred costs 4,718
Royalties 99,581 79,519 70,825
Advertising costs 40,088 43,342 43,017
</TABLE>
<PAGE>
PAGE 1
<TABLE>
<CAPTION>
Exhibit 11
DOW JONES & COMPANY, INC.
and its Subsidiaries
COMPUTATION OF EARNINGS PER SHARE
(in thousands except per share data)
1993 1992 1991
PRIMARY -------- -------- --------
<S> <C> <C> <C>
Average shares outstanding used in the computation of
reported earnings per share 99,773 101,150 101,011
Common stock equivalents (assuming the use of the proceeds from
their exercise or issuance to acquire treasury stock at the
average market value of stock during the year)--shares
granted under employee stock option and stock purchase plans 510 242 71
-------- -------- --------
Average shares and common stock equivalents outstanding--primary 100,283 101,392 101,082
======== ======== ========
Net income $147,547 $107,586 $ 72,189
======== ======== ========
Net income per share--primary $1.47 $1.06 $.71
===== ===== =====
FULLY DILUTED
- - - -------------
Average shares outstanding used in the computation of
reported earnings per share 99,773 101,150 101,011
Common stock equivalents (assuming the use of the proceeds from
their exercise or issuance to acquire treasury stock at the
higher of average market value of stock during the year or
year-end market price)--shares granted under employee stock
option and stock purchase plans 862 242 71
-------- -------- --------
Average shares and common stock equivalents outstanding--fully diluted 100,635 101,392 101,082
======== ======== ========
Net income $147,547 $107,586 $ 72,189
======== ======== ========
Net income per share--fully diluted $1.47 $1.06 $.71
===== ===== =====
</TABLE>
<PAGE>
PAGE 1
<TABLE>
<CAPTION>
Exhibit 21
SUBSIDIARIES OF THE COMPANY
Jurisdiction of
Incorporation or
Name of Subsidiary Organization
- - - ------------------ ----------------
<S> <C>
American Demographics, Inc. New York
Courrier Export (U.K.), Limited United Kingdom
Dow Jones Canada, Inc. Canada
Dow Jones Courrier, N.V. Belgium
Dow Jones Courrier, GmbH Switzerland
Dow Jones International Marketing Services (U.K.), Ltd. United Kingdom
Dow Jones International Marketing Services GmbH Germany
Dow Jones Newsprint Company, Inc. Delaware
Dow Jones Printing Company (Asia), Inc. Delaware
Dow Jones Publishing Company (Asia), Inc. (90% owned) Delaware
Dow Jones Broadcasting (Asia), Inc. Delaware
Dow Jones Publishing Company (Europe), Inc. Delaware
Dow Jones Real Estate Development Corporation Delaware
Dow Jones Southern Holding Company, Inc. Delaware
Dow Jones Virginia Company, Inc. Delaware
Dow Jones Ventures I, Inc. Delaware
Dow Jones Ventures II, Inc. Delaware
Federal Filings, Incorporated Delaware
Nanbei Ltd (55% owned) Turks and Caicos
National Delivery Service, Inc. Delaware
Ottaway Newspapers, Inc. Delaware
Chapel Hill Publishing Company, Inc. North Carolina
News-Sun, Inc. Arizona
ONI of North Carolina, Inc. North Carolina
Sample Publishing Company, Inc. North Carolina
The Inquirer & Mirror, Inc. Massachusetts
Portuguese-American Publications, Inc. Massachusetts
Review Publishing Company Limited Hong Kong
The China Phone Book Co. Ltd. Hong Kong
National Fair Ltd. Hong Kong
Societe Civile D.J. France
Dow Jones Telerate Holdings, Inc. Delaware
Telerate Canada Inc. Ontario
Dow Jones Telerate Systems, Inc. California
Telerate Research & Development Pte Ltd Singapore
Dow Jones Telerate, Inc. New York
CompuTrac, Inc. Louisiana
Dow Jones Telerate Software, Inc. Delaware
Dow Jones Telerate Puerto Rico, Inc. Delaware
Telerate Financial Services Co. Delaware
Telerate International Inc. Delaware
Telerate International Limited United Kingdom
</TABLE>
<PAGE>
<PAGE>
PAGE 2
<TABLE>
<CAPTION>
Jurisdiction of
Incorporation or
Name of Subsidiary Organization
- - - ------------------ ----------------
<S> <C>
Dow Jones Telerate International Company
(100% owned Partnership) Delaware
Telerate (Panama) Inc. Panama
Servicios Informativos Telerate Limitada Chile
Dow Jones Telerate (Asia-Pacific) Singapore
Pte Ltd Singapore
Telerate (Australia) Pty Limited Australia
Telerate (Bahamas) Limited Bahamas
Telerate (Belgium) SA Belgium
Telerate (Danmark) A/S Denmark
Dow Jones Telerate Limited United Kingdom
Telerate (Finland) OY Finland
Telerate (France) SA France
HTG SA France
Valgest SA France
Dow Jones Telerate Ireland Limited Ireland
Telerate (Netherlands) BV Netherlands
Dow Jones Telerate Espana S.A. Spain
Telerate (Sweden) AB Sweden
Dow Jones Telerate (Thailand) Limited Thailand
Dow Jones Telerate Technical Services Limited United Kingdom
Telefin SA Greece
Telerate AG Switzerland
Telerate Argentina Limitada S.A. Argentina
Dow Jones Telerate (Singapore) Pte Ltd Singapore
Dow Jones Telerate de Venezuela, C.A. Venezuela
Telerate Financial Information Network
(Hong Kong) Limited Hong Kong
Telerate Financial Information Network
(Asia-Pacific) Limited Hong Kong
Telerate Financial Information Services, Inc. Delaware
Telerate Finansal Sistemler A.S. Turkey
Telerate - Instalcao e Manutencao
de Equipamentos, Lda. Portugal
Telerate Internationale
Finanzinformationsdienst GmbH Austria
Telerate Luxembourg SARL Luxembourg
Telerate New Zealand Limited New Zealand
Advance Pacific Limited Cook Islands
Telerate Uruguay S.A. Uruguay
Telerate Deutschland GmbH Germany
Telerate Norway A/S Norway
Telerate (Cyprus) Limited Cyprus
Dow Jones Telerate (South Africa) (Pty) Limited South Africa
All of the above subsidiaries are included in the consolidated financial
statements.
<PAGE>
</TABLE>
