FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ending March 31, 2000 Commission file number 0-7832
-------------- ------
(3 Months)
JOURNAL EMPLOYEES' STOCK TRUST
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
WISCONSIN 39-6153189
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P.O. Box 661, 333 W. State St., Milwaukee, Wisconsin 53201
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(Address of principal executive offices) (Zip Code)
414-224-2728
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(Registrant's telephone number, including area code)
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(Former name, former address and former fiscal year, if changed since last
report)
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 __
<PAGE>
FORM 10-Q
JOURNAL EMPLOYEES' STOCK TRUST
For Quarter Ending March 31, 2000 Commission file number 0-7832
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INDEX
Page No.
--------
Part I. Financial Information
Item 1. Financial Statements (Unaudited)
Statements of Trust Income
Three months ended March 31, 2000 and 1999 3
Statements of Cash Flows
Three months ended March 31, 2000 and 1999 4
Notes to Financial Statements
March 31, 2000 5
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 6
Item 3. Quantitative and Qualitative Disclosure
of Market Risk 6
Part II. Other Information
Items 1-6. 6
2
<PAGE>
FORM 10-Q
JOURNAL EMPLOYEES' STOCK TRUST
For Quarter Ended March 31, 2000 Commission file number 0-7832
-------------- ------
Part 1, Item 1. Financial Information
-------------------------------------
Statements of Trust Income
--------------------------
Three Months Ended
------------------
03/31/2000 03/31/1999
----------- -----------
(Unaudited) (Unaudited)
Dividends on common stock of
Journal Communications, Inc.
held by the Trust $ 7,253,834 $ 6,921,514
----------- -----------
$ 7,253,834 $ 6,921,514
=========== ===========
Per Share $ 0.30 $ 0.28
----------- -----------
$ 0.30 $ 0.28
=========== ===========
Dividends to holders of Units
of Beneficial Interest $ 7,253,834 $ 6,921,514
----------- -----------
$ 7,253,834 $ 6,921,514
=========== ===========
Per Unit $ 0.30 $ 0.28
----------- -----------
$ 0.30 $ 0.28
=========== ===========
See notes to financial statements.
3
<PAGE>
FORM 10-Q
JOURNAL EMPLOYEES' STOCK TRUST
For Quarter Ended March 31, 2000 Commission file number 0-7832
-------------- ------
Statements of Cash Flows
------------------------
Three Months Ended
------------------
03/31/2000 03/31/1999
------------ ------------
(Unaudited) (Unaudited)
Source of cash:
Receipts from purchasers of Units
of Beneficial Interest (Note 3) $ 33,470,430 $ 29,515,975
Dividends received from
Journal Communications, Inc. 7,253,834 6,921,514
------------ ------------
125,370,911 147,134,313
Uses of cash:
Disbursements to sellers of
Units of Beneficial Interest (33,470,430) (29,515,975)
Dividends paid to holders of
Units of Beneficial Interest (7,253,834) (6,921,514)
------------ ------------
Net decrease in cash 0 0
Cash at beginning of year 0 0
------------ ------------
Cash at March 31 $ 0 $ 0
============ ============
See notes to financial statements.
4
<PAGE>
FORM 10-Q
JOURNAL EMPLOYEES' STOCK TRUST
For Quarter Ended March 31, 2000 Commission file number 0-7832
-------------- ------
Notes to Financial Statements
-----------------------------
March 31, 2000
--------------
(Unaudited)
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 taxes and administrative expenses, as soon as practicable after
receipt. Since its origination, substantially all expenses of the Trust
have been paid by the Company, and cash dividends payable to the Trust have
been paid directly to the unitholders by the Company. The Trust distributes
all of its income and, therefore, pays no income taxes.
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 employees of the
Company ("Employees"). Sales of Units by the Trust 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 are deposited with the
Trust by the purchaser and remitted by the Trust to the seller.
4. Statement of Assets and Liabilities
-----------------------------------
The trust does not own any assets or have any liabilities; therefore, a
statement of assets and liabilities is not provided.
5
<PAGE>
FORM 10-Q
JOURNAL EMPLOYEES' STOCK TRUST
For Quarter Ended March 31, 2000 Commission file number 0-7832
-------------- ------
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
---------------------------------------------
Income is based solely on dividends from Journal Communications, Inc.
Item 3. Quantitative and Qualitative Disclosure of Market Risk
--------------------------------------------------------------
None.
Part II Other Information
-------------------------
Item 1 - Legal Proceedings
--------------------------
On April 14, 2000, the Milwaukee County Circuit Court (J. Donegan) on a motion
for summary judgement in Gauthier v. Journal Communications, Inc., ruled that
the Company was contractually liable to a class of plaintiffs for requiring them
to sell back their Journal units prematurely. The suit was filed by five former
employees who owned Journal units (unitholders). The unitholders were terminated
at the time of the 1995 merger of The Milwaukee Journal and the Milwaukee
Sentinel. The judge previously ruled that the lawsuit could be a class action to
include other former unitholders who terminated during the newspaper merger. As
a result of the merger, some full-time employees took early retirement and
others received voluntary separation incentives. Under the Journal Employees'
Stock Trust Agreement (JESTA), employees whose employment is terminated before
retirement are required to sell back all units to the Company upon termination.
In January 1995, a stock sell-back policy was approved by the trustees of JESTA
that employees who lose their jobs because of corporate restructuring were given
more time to sell back their stock. Employees with twenty (20) or more years as
a unitholder had up to five (5) years to sell their stock, one-fifth each year;
fifteen (15) to twenty (20) years a unitholder had up to four (4) years,
one-fourth each year; ten (10) to fifteen (15) years as a unitholder had three
(3) years, one-third each year; five (5) to ten (10) years as a unitholder had
two (2) years, one-half each year; and two (2) to five (5) years as a unitholder
had one year. The judge ruled that the former employees, who signed separation
agreements in 1995, should have been allowed to sell back units at any point
during the time period. He based his decision on a Journal Sentinel internal
memorandum that outlined termination incentives, including the stock sell-back
schedule but without the language specifying the portion to be sold
6
<PAGE>
FORM 10-Q
JOURNAL EMPLOYEES' STOCK TRUST
For Quarter Ended March 31, 2000 Commission file number 0-7832
-------------- ------
Item 1 - Legal Proceedings
--------------------------
each year. That information was widely known and understood. The memorandum was
not part of the separation agreement that employees signed, but it was referred
to in the agreement. Under the judge's ruling, for instance, a twenty (20) year
unitholder would be permitted to hold all units until five years had passed,
rather than selling some each year. The Company disagrees with this ruling and
on April 21, it filed an interlocutory appeal before the Wisconsin Court of
Appeals to have this decision reversed. At this time the impact of this decision
on the Company or JESTA cannot be determined.
Item 2 - Changes in Securities and Use of Proceeds
--------------------------------------------------
None
Item 3 - Defaults upon Senior Securities
----------------------------------------
None
Item 4- Submission of Matter to a Vote of Security Holders
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None
Item 5 - Other Information
--------------------------
None
Item 6 - Exhibits and Reports on Form 8-K
-----------------------------------------
(a) Exhibit (27) Financial Data Schedule
(b) None
7
<PAGE>
FORM 10-Q
JOURNAL EMPLOYEES' STOCK TRUST
For Quarter Ended March 31, 2000 Commission file number 0-7832
-------------- ------
Signatures
- ----------
Pursuant to the requirements 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.
JOURNAL EMPLOYEES' STOCK TRUST
------------------------------
Date: May 11, 2000 By: /s/ Steven J. Smith
------------ ------------------------------------
Steven J. Smith
Trustee
Date: May 11, 2000 By: /s/ Douglas G. Kiel
------------ ------------------------------------
Douglas G. Kiel
Trustee
9
<PAGE>
FORM 10-Q
JOURNAL EMPLOYEES' STOCK TRUST
For Quarter Ended March 31, 2000 Commission file number 0-7832
-------------- ------
EXHIBIT INDEX
Exhibit Description
27 Financial Data Schedule
10
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 7,254<F1>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 7,254<F1>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-BASIC> 0<F2>
<EPS-DILUTED> 0<F2>
<FN>
<F1>The only revenue and expense associated with the trust pertains to
dividends received and paid out. All dividends received are in turn
paid out, accounting for net income of zero ($0).
<F2>Earnings per share is not applicable as net income is zero ($0).
</FN>
</TABLE>
