SECURITIES & 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 (Fee Required)
For the fiscal year ended December 31, 1995
Commission File Number: 0-7832
JOURNAL EMPLOYEES' STOCK TRUST
(Exact name of registrant as specified in its charter)
WISCONSIN 39-6153189
(State of organization) (I.R.S. employer identification number)
333 West State Street, P. O. Box 661, Milwaukee, Wisconsin 53201
Address of principal executive offices (zip code)
Registrant's telephone number, including area code:
414-224-2374
Securities registered pursuant to Section 12(b) of the Act:
NONE
Securities registered pursuant to Section 12(g) of the Act:
Units of Beneficial Interest
(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 .
State the aggregate market value of the voting stock held by non-
affiliates of the Registrant: Not applicable.
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (Section 229.405 of this chapter) is not contained
herein, and will not be contained, to the best of 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. [ x ]
Portions of Parts I, II and III are incorporated by reference to the
Annual Report of Journal Communications, Inc. on Form 10-K for the year
ended December 31, 1995, filed herewith as Exhibit 99.1.
<PAGE>
PART I
ITEM 1. BUSINESS
The Registrant is a trust created under the Journal Employees' Stock Trust
Agreement, dated May 15, 1937, by all the stockholders of The Journal
Company (now known as Journal Communications, Inc.), a Wisconsin
corporation (the "Company"), to promote stability and to enable its
employees to acquire ownership and control of the Company.
Under the Trust Agreement establishing the Registrant, stockholders of the
Company and the Company itself deposited shares of the Company's stock in
the trust and received in exchange trust units, which in turn have been
sold to active employees of the Company and its subsidiaries. Each unit
represents one share of the Company's common stock. Unitholders may sell
their units to other active employees at the formula price ("Option
Price") defined in the Trust Agreement and are required to do so when they
die or terminate employment, except that (i) retired employees may retain
a decreasing percentage of their units for ten years after retirement and
(ii) employees who are terminated due to downsizing or divestiture may
retain a decreasing percentage of their units for up to five (5) years.
As of the date hereof, the Registrant holds 12,960,000 shares, or ninety
percent (90%), of the outstanding common stock of the Company.
The Registrant engages in no business other than the record holding of
Company shares, the issuing of trust units and, in limited instances, the
voting of Company shares held by it. Most expenses of administering the
trust are borne by the Company.
There are five trustees, all employees of the Company, none of whom
receives any compensation in his capacity as trustee. The Registrant has
no employees.
For a further discussion of the trust's operation and unit ownership, see
Item 5, "Market for Registrant's Common Stock and Related Stock Holder
Matters," and Item 12, "Security Ownership of Certain Beneficial Owners
and Management," in the Annual Report of Journal Communications, Inc. on
Form 10-K, filed herewith as Exhibit 99.1.
ITEM 2. PROPERTIES
The Registrant owns no physical properties. Its records are kept and its
administrative functions are performed in the offices of Journal
Communications, Inc., in Milwaukee, Wisconsin.
ITEM 3. LEGAL PROCEEDINGS None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED
SECURITY HOLDER MATTERS
Reference is made to Item 5, "Market For Registrant's Common Stock and
Related Stock Holder Matters," of the Annual Report of Journal
Communications, Inc., on Form 10-K filed herewith as Exhibit 99.1, and
incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA
Registrant incorporates herein by reference Item 6, "Selected Financial
Data," of the Annual Report of Journal Communications, Inc., on Form 10-K
filed herewith as Exhibit 99.1.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Registrant incorporates herein by reference Item 7, "Management's
Discussion and Analysis of Financial Condition and Results of Operations,"
of the Annual Report of Journal Communications, Inc., on Form 10-K filed
herewith as Exhibit 99.1.
ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS
AND SUPPLEMENTARY DATA
The Financial Statements With Report of Independent Public Auditors are
presented on the pages immediately following.
Report of Ernst & Young LLP, Independent Auditors
The Trustees of Journal
Employees' Stock Trust
We have audited the accompanying statement of assets and liabilities of
Journal Employees' Stock Trust (the Trust) as of December 31, 1995, 1994
and 1993, and the related statements of Journal Communications, Inc.,
common stock held and Trust certificates outstanding, Trust income, and
cash flows for the years then ended. These financial statements are the
responsibility of the Trustees of the Trust. 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 significant estimates made by the Trustees, 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 assets and liabilities of Journal Employees'
Stock Trust at December 31, 1995, 1994 and 1993, Journal Communications,
Inc., common stock held and Trust certificates outstanding, Trust income,
and cash flows for the years then ended in conformity with generally
accepted accounting principles.
ERNST & YOUNG, LLP
Milwaukee, Wisconsin
February 13, 1996
<PAGE>
JOURNAL EMPLOYEES' STOCK TRUST
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1995, 1994 and 1993
1995 1994 1993
Assets:
Cash in bank $ 100 $ 100 $ 100
======= ======= ======
Liabilities:
Note payable to
Journal Communications, Inc. $ 100 100 100
------- ------- -------
$ 100 $ 100 $ 100
======= ======= =======
See accompanying notes.
<PAGE>
JOURNAL EMPLOYEES' STOCK TRUST
STATEMENT OF JOURNAL COMMUNICATIONS INC.
COMMON STOCK HELD AND TRUST CERTIFICATES
OUTSTANDING (Notes 1 and 2)
Years ended December 31, 1995, 1994 and 1993
1995 1994 1993
Shares of Journal
Communications Inc. common
stock:
Held at beginning and
end of year 12,960,000 12,960,000 12,960,000
========== ========== ==========
Trust certificates evidencing
Units of Beneficial Interest in
Journal Communications Inc.
common stock:
Outstanding at beginning
and end of year 12,960,000 12,960,000 12,960,000
========== ========== ==========
See accompanying notes.
<PAGE>
JOURNAL EMPLOYEES' STOCK TRUST
STATEMENT OF TRUST INCOME
(Note 3)
Years ended December 31, 1995, 1994 and 1993
1995 1994 1993
Dividends on common stock of
Journal Communications Inc.
held by the Trust $25,729,448 $23,598,655 $22,564,341
=========== =========== ===========
Dividends to holders of Units of
Beneficial Interest $25,729,448 $23,598,655 $22,564,341
=========== =========== ===========
Dividends per share $ 2.10 $ 1.90 $ 1.80
See accompanying notes.
<PAGE>
JOURNAL EMPLOYEES' STOCK TRUST
STATEMENT OF CASH FLOWS
Years ended December 31, 1995, 1994 and 1993
1995 1994 1993
Sources of cash:
Receipts from purchasers of
Units of Beneficial Interest
(Note 3) $62,411,465 $45,792,223 $38,906,990
Dividends received from
Journal Communications Inc. 25,729,448 23,598,655 22,564,341
----------- ----------- -----------
88,140,913 69,390,878 61,471,331
Uses of cash:
Disbursements to sellers of
Units of Beneficial Interest (62,411,465) (45,792,223) (38,906,990)
Dividends paid to holders of
Units of Beneficial Interest (25,729,448) (23,598,655) (22,564,341)
----------- ----------- -----------
Net increase (decrease) in cash -- -- --
Cash at beginning of year 100 100 100
----------- ----------- -----------
Cash at end of year $ 100 $ 100 $ 100
=========== =========== ===========
See accompanying notes.
<PAGE>
JOURNAL EMPLOYEES' STOCK TRUST
NOTES TO FINANCIAL STATEMENTS
December 31, 1995, 1994 and 1993
1. Organization
The only business of Journal Employees' Stock Trust (Trust), under
agreement dated May 15, 1937, as amended, is the record holding of
common stock of Journal Communications Inc. (Company), the issuance
of Units of Beneficial Interest in such shares (Units) and, in
limited instances, the voting of shares of the Company's common
stock held by it. The Trust is administered by five trustees who
are officers/directors of the Company and receive no remuneration
for services performed for the Trust. The trustees are required to
distribute all Trust income (consisting solely of dividends paid by
the Company), less such amounts as the trustees deem necessary for
payment of administrative expenses, as soon as practicable after
receipt. Since its origination, substantially all expenses of the
Trust have been paid by the Company. The Trust distributes all of
its income and, therefore, pays no income taxes under applicable
income tax codes.
2. Common stock of the Company
Upon deposit by the Company of shares of common stock, the Trust
issues a like number of Units and the Company offers such Units to
its employees, or employees of its subsidiaries (Employees). Sales
of Units by the Company are made at the formula price determined in
accordance with the Trust Agreement.
3. Unitholders' Sales of Units of Beneficial Interest
Unitholders may sell all or a portion of their Units only to other
Employees designated by the President of the Company or, under
certain circumstances, to shareholders of the Company, at the
current formula price under the terms and conditions of the Trust
Agreement. If the Units are not sold in this manner, the Units are
freely transferable, subject to a five-year right of the Company to
purchase the Units at any time at the formula price. Payments for
Units sold by employees to other employees are deposited with the
trustees by the purchaser and remitted by the trustees to the
seller.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The following list shows the names and ages of Registrant's trustees and
the year in which each became a trustee. It also shows the positions held
by each trustee with Journal Communications, Inc.
Position/Office
Name Age Trustee Since with the Company
Robert A. Kahlor (62) May 28, 1986 Chairman of the Board
Steven J. Smith (45) March 9, 1990 President
Thomas M. Karavakis (65) June 26, 1992 Senior Vice President
Douglas G. Kiel (47) March 7, 1995 Senior Vice President
Paul M. Bonaiuto (45) February 1, 1996 Senior Vice President/CFO
All trustees are directors of Journal Communications, Inc., and, except
for Mr. Bonaiuto, have been employed by Journal Communications, Inc., in
key management positions for at least the last five years. Mr. Kahlor has
been Chairman of the Board of the Company since September 1992. Prior to
that, he had been President of the Company. Mr. Smith has been President
of the Company since September 1992. Prior to that he was Executive Vice
President of the Company. For the past five (5) years, Mr. Karavakis has
been a senior vice president of the Company and President of Add, Inc., a
subsidiary of the Company. Mr. Kiel has been a Senior Vice President of
the Company and President of Journal Broadcast Group, Inc., a subsidiary
of the Company, since June 1992. Prior to that, he had been a director of
the Company and Executive Vice President of Journal Broadcast Group, Inc.
Mr. Bonaiuto has been Chief Financial Officer of the Company since January
1996 and was elected a senior vice president in March 1996. Previously
Mr. Bonaiuto had been a director and vice president of the Company and
President of NorthStar Print Group, Inc., a subsidiary of the Company,
from June 1994 to January 1996; Senior Vice President and Chief Financial
Officer of Perry Printing Corporation, then a subsidiary of the Company,
from July 1992 to June 1994, and executive vice president of The Peterson
Group, Wilmington, Delaware, a private equity investment firm, for the
remainder of the past five-year period.
ITEM 11. EXECUTIVE COMPENSATION
The five trustees, all employees of Journal Communications, Inc., do not
receive any compensation in their capacity as trustee.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following chart states the number of units of beneficial interest in
the Registrant held by the trustees of the Registrant:
Units Held as of Percent of Ownership
Name March 13, 1996 * denotes <1%
Paul M. Bonaiuto 13,000 *
Robert A. Kahlor 85,435 *
Thomas M. Karavakis 77,035 *
Douglas G. Kiel 26,300 *
Steven J. Smith 73,880 *
All trustees as a
group 5,577,676 43.0%
Each of the trustees has voting power arising under the Trust Agreement
establishing the Registrant in respect to the number of units set forth
opposite such trustee's name. In addition, as a group, the trustees have
voting power arising under the Trust Agreement establishing the
Registrant, as of March 13, 1996, in respect of 5,302,026 units held by
retirees and other former employees of the Company, employee benefit
trusts, employees' personal trusts and charitable, educational or
religious trusts.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
ON FORM 8-K
(a) 1. Financial Statements and Schedules
The financial statements and schedules listed in the
accompanying index are filed as part of this annual report.
2. Exhibits
The exhibits listed in the accompanying index to exhibits are
filed as part of this Annual Report on Form 10-K.
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Registrant during the
quarter ended December 31, 1995.
JOURNAL EMPLOYEES' STOCK TRUST
INDEX TO FINANCIAL STATEMENTS,
FINANCIAL STATEMENT SCHEDULES
AND EXHIBITS
(Item 14(a))
Form 10-K
1. Financial Statements
Statement of Assets and Liabilities at
December 31, 1995, 1994 and 1993 4
Statement of Journal Communications, Inc.
Common Stock held and Trust Certificates
Outstanding for each of the three years in the
period ended December 31, 1995 5
Statement of Trust Income for each of the three
years in the period ended December 31, 1995 6
Statement of Cash Flows for each of the three
years in the period ended December 31, 1995 7
Notes to Financial Statements 8
2. Financial Statement Schedules
None
3. Exhibits
(3) Journal Employees' Stock Trust Agreement, May 15,
1937, as amended, filed herewith (incorporated by
reference to Exhibit 9 to the Annual Report on Form
10-K of Journal Communications, Inc. for the fiscal
year ended December 31, 1995 (Commission File No.
0-7831))
(23) Consent of Ernst & Young, LLP, Independent Auditors,
filed herewith.
(27) Financial Data Schedule, filed herewith.
(99.1) Annual Report to Shareholders of Journal
Communications, Inc., on Form 10-K for the fiscal year
ended December 31, 1995 (incorporated by reference to
the Annual Report on Form 10-K of Journal
Communications, Inc. for the fiscal year ended
December 31, 1995 (Commission File No. 0-7831))
<PAGE>
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Annual Report to
be signed on its behalf by the undersigned, thereunto duly authorized.
JOURNAL EMPLOYEES' STOCK TRUST
By: /s/ Robert A. Kahlor
Robert A. Kahlor, Trustee
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated:
TRUSTEES OF JOURNAL EMPLOYEES' STOCK TRUST
Date: April 1, 1996 /s/ Robert A. Kahlor
Robert A. Kahlor
Date: April 1, 1996 /s/ Steven J. Smith
Steven J. Smith
Date: April 1, 1996 /s/ Thomas M. Karavakis
Thomas M. Karavakis
Date: April 1, 1996 /s/ Douglas G. Kiel
Douglas G. Kiel
Date: April 1, 1996 /s/ Paul M. Bonaiuto
Paul M. Bonaiuto
<PAGE>
JOURNAL EMPLOYEES STOCK TRUST
EXHIBIT INDEX
Exhibit No. Description
(3) Journal Employees' Stock Trust Agreement, May 15,
1937, as amended, filed herewith (incorporated by
reference to Exhibit 9 to the Annual Report on Form
10-K of Journal Communications, Inc. for the fiscal
year ended December 31, 1995 (Commission File No.
0-7831))
(23) Consent of Ernst & Young, LLP, Independent Auditors,
filed herewith.
(27) Financial Data Schedule, filed herewith.
(99.1) Annual Report to Shareholders of Journal
Communications, Inc., on Form 10-K for the fiscal year
ended December 31, 1995 (incorporated by reference to
the Annual Report on Form 10-K of Journal
Communications, Inc. for the fiscal year ended
December 31, 1995 (Commission File No. 0-7831))
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference,
(a) In the Registration Statement (Form S-8 No. 33-14771) pertaining
to Journal Employees' Stock Trust and in the related prospectus,
and
(b) In the Registration Statement (Form S-8) pertaining to Journal
Communications, Inc. Employees' Stock Trust and in the related
prospectus, submitted to the Securities and Exchange Commission
for filing on March 12, 1991 with respect to 500,000 units of
beneficial interest in said trust,
of our report dated February 13, 1996 with respect to the consolidated
financial statements of Journal Employees' Stock Trust included in this
Annual Report (Form 10-K) for the year ended December 31, 1995.
ERNST & YOUNG, LLP
Milwaukee, Wisconsin
March 25, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF JOURNAL EMPLOYEES' STOCK TRUST FOR THE TWELVE MONTHS
ENDED DECEMBER 31, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 100
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 100
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 100
<CURRENT-LIABILITIES> 100
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 100
<SALES> 0
<TOTAL-REVENUES> 25,729,448
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 25,729,448
<INCOME-TAX> 0
<INCOME-CONTINUING> 25,729,448
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 25,729,448
<EPS-PRIMARY> 2.10
<EPS-DILUTED> 2.10
</TABLE>
