EX-99 3 exhibit991jan27.txt DOW JONES FOURTH QUARTER EARNINGS RELEASE Exhibit 99.1 Investor Contacts: Dow Jones & Company Mark Donohue 200 Liberty Street Director, Investor Relations New York, NY 10281 (609) 520-5660 Richard Zannino Executive Vice President, COO (212) 416-4205 Media Contact: Brigitte Trafford Vice President, Communications (212) 416-3213 DOW JONES REPORTS IMPROVED RESULTS FOR FOURTH QUARTER 2003 Provides 1st Quarter 2004 Outlook NEW YORK (January 27, 2004)?Dow Jones & Company (NYSE: DJ) reported today that it earned 54 cents per diluted share during the fourth quarter ended Dec. 31, 2003, compared with 18 cents per diluted share in the fourth quarter of 2002. Excluding the special items explained herein, the Company earned 43 cents per diluted share during the fourth quarter 2003, an increase of 26.5% from the 34 cents per diluted share earned in the fourth quarter of 2002. Special items netted to a gain of 11 cents per share in the fourth quarter of 2003 as the Company recorded a gain on the previously announced disposal of an equity interest in Handelsblatt in exchange for an increase in the Company's ownership in The Wall Street Journal Europe, partially offset by a loss for accretion of discount on a contract-guarantee obligation. Fourth quarter 2002 special charges netted to a loss of 16 cents per share and included restructuring charges for work force reductions, an insurance gain on property damaged on Sept. 11, 2001, a lease write-off and accretion of discount on a contract-guarantee obligation. Revenue rose 6.0% in the fourth quarter of 2003 to $420.7 million, primarily due to an 8.1% increase in U.S. Wall Street Journal linage compared with the fourth quarter of 2002. Operating expenses were $365.4 million, down slightly from the fourth quarter of 2002, and operating income was $55.3 million compared to 2002's $30.9 million. Excluding special items, operating expenses were up 3.4% in the fourth quarter of 2003, while operating income was up 26.9% from the same period last year with operating margins up to 13.1% in 2003 compared to 11.0% in 2002. For the full year 2003, earnings were $2.08 per share, compared to $2.40 per share in 2002. Excluding the special items contained herein, earnings in 2003 increased 29.7% to 96 cents per share versus 74 cents per share in 2002. Special items in 2003 netted to a gain of $1.12 per share compared to a gain of $1.66 cents per share in 2002. For the full year, revenue fell less than 1% to $1.5 billion. Operating expenses were $1.4 billion, down 5.3% from 2002, and operating income was $142.9 million compared to 2002's $75.1 million. Excluding restructuring charges and September 11 related items, operating expenses were down 2.5% from 2002, and operating income was up 25.9% from the same period last year. Please refer to the attached financial exhibits and notes for more details on the Company's results. Commenting on the quarter's results, Peter R. Kann, chairman and CEO of Dow Jones & Company, said: "We're encouraged by improved results in the quarter and early returns we're seeing on nearly all our `Business Now' strategic initiatives. We're also somewhat pleased with the improving advertising trend we saw at the Journal in the second half of 2003. However, advertising volumes still are well below normal, and business confidence and spending commitments remain somewhat volatile. We'll continue to focus on controlling spending, improving quality, enhancing our products and executing `Business Now' to maximize our results in any advertising environment." Dow Jones also said that it expects earnings per share before special items in the first quarter of 2004 to be in the mid to upper teens cents per share range, compared with 12 cents per share in the first quarter of 2003. This assumes first-quarter 2004 linage at the U.S. Wall Street Journal will be up in the mid to upper single digit percentage range versus the first quarter of 2003 (including an extra issue in 2004). Based on currently anticipated special items in the first quarter of 2004, the Company expects reported earnings per share to be in the low to mid teens cents per share range, compared with 82 cents per share in the first quarter of 2003. Please refer to the attached table for a reconciliation of the Company's first quarter earnings before and after special items. Segment Results Print publishing revenue increased 2.8% in the fourth quarter to $253.2 million, and operating income rose 37.8% to $18.7 million from the same period a year ago. U.S. Wall Street Journal advertising linage increased 8.1% (up 19.0% in December, with one extra issue) while linage at the international editions of the Journal decreased 9.0% (down 9.4% in December, with one extra issue in both the European and Asian editions). Barron's ad pages fell 14.0% in the quarter (down 6.8% in December). Electronic publishing revenue in the fourth quarter was $83.5 million, up 7.2% from the same period a year ago. Operating income was $17.9 million, up 5.7% from last year. Improved performance at Consumer Electronic Publishing and Indexes/Ventures drove these improved results. Operating margin of 21.4% was essentially flat with the same period a year ago. Paid subscribers to The Wall Street Journal Online grew to 689,000 as of Dec. 31, 2003, up 1.5% from Dec. 31, 2002. Ottaway community newspapers' revenue in the fourth quarter was $84.1 million, up 15.6% from the same period a year ago (revenue was up 1.7% excluding the May 2003 acquisition of The Record of Stockton). Same- property advertising linage decreased 2.2% in the fourth quarter (linage was down 3.5% in December with one fewer Sunday). Ottaway total operating income was up 29.6% to $25.1 million in the fourth quarter with an operating margin of 29.9% compared with 26.7% last year. The Company ended the fourth quarter with $153.1 million in commercial paper, compared with $92.9 million at the end of the fourth quarter of 2002. As previously announced, the Company will host an earnings conference call at 10 a.m. EST today. The call can be accessed via a live Web cast through the Investor Relations section of the Company's Web site, www.dowjones.com, or through a listen-only, dial-in conference line, by dialing 201-689-8320. A replay of the conference call and the full text of the prepared remarks will be available on the Company's Web site in the Investor Relations section shortly after the call concludes. Dow Jones & Company (NYSE: DJ; dowjones.com) publishes The Wall Street Journal and its international and online editions, Barron's and the Far Eastern Economic Review, Dow Jones Newswires, Dow Jones Indexes and the Ottaway group of community newspapers. Dow Jones is co-owner with Reuters Group of Factiva, with Hearst of SmartMoney and with NBC of CNBC television operations in Asia and Europe. Dow Jones also provides news content to CNBC and radio stations in the U.S. Information Relating To Forward-Looking Statements: This press release contains forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those anticipated, including the cyclical nature of the company's business and the strong negative impact of economic downturns on the company's core advertising market--business-to-business advertising--and on advertising revenues in general; the severe weaknesses in the current technology and financial advertising markets; the extent of any recovery in the economy; the risk that the company will not benefit from any recovery in the economy; the company's ability to continue to limit and manage expense growth without harming its growth prospects; the uncertainties relating to the company's guarantee to Cantor Fitzgerald Securities and Market Data Corporation; the intense competition the company's existing products and services face; the risk that the company's initiatives to attract more consumer advertising, and other diversified advertising, to The Wall Street Journal will not succeed; with respect to Newswires, the negative impact of consolidations and layoffs in the financial services industry on sales; and such other risk factors as may be included from time to time in the company's reports filed with the Securities and Exchange Commission. This press release includes certain non-GAAP financial measures as defined under SEC rules. As required by SEC rules, we have attached to this press release a reconciliation of those measures to the most directly comparable GAAP measures. This reconciliation is also available on the Investor Relations page of our web site at www.dowjones.com. Dow Jones & Company Earnings Summary 5 (Unaudited)
(in thousands, except per share amount) Quarters Ended December 31 Twelve Months Ended December 31 2003 2002 2003 2002 ---- ---- ---- ---- Reported results: Revenues $420,723 $396,849 $1,548,485 $1,559,173 Operating income 55,294 30,856 142,913 75,083 Net income 44,252 15,235 170,599 201,506 Effective tax rate* 39.5% 44.0% 23.3% 24.0% Diluted EPS $.54 $.18 $2.08 $2.40 Excluding items described in Note 2: Operating income $ 55,294 $ 43,568 $ 124,505 $ 98,893 Net income 35,030 28,234 78,350 61,867 Effective tax rate* 38.1% 40.0% 38.9% 40.0% Diluted EPS $.43 $.34 $.96 $.74 EPS percentage change 26.5% - 29.7% (40.3)% *The effective income tax rate is net of minority interests. See notes to financial information on page 10.
Reconciliation of First Quarter 2004 Earnings Outlook
Quarters Ended March 31 2004 Guidance 2003 Actual ------------- ----------- Reported earnings per share low to mid teens $0.82 cents per share range** Adjusted to remove: Contract guarantee (.02) (.03) Gain on reversal of Telerate sale loss contingency .73 ------ ----- EPS before special items mid to upper teens $0.12 cents per share range **Based on special items currently anticipated.
Dow Jones & Company Condensed Consolidated Statements of Income 6 (Unaudited)
(in thousands, except per share amounts) Quarters Ended December 31 Twelve Months Ended December 31 2003 2002 2003 2002 ---- ---- ---- ---- Revenues: Advertising $249,084 $227,504 $ 871,817 $ 877,681 Information services 72,669 69,732 286,863 281,220 Circulation and other 98,970 99,613 389,805 400,272 -------- -------- ---------- ---------- Total revenues 420,723 396,849 1,548,485 1,559,173 -------- -------- ---------- ---------- Expenses: News, operations and development 125,847 122,095 483,709 495,480 Selling, administrative and general 139,591 131,317 540,529 559,947 Newsprint 28,095 25,835 105,066 103,534 Print delivery costs 47,133 48,866 188,662 191,581 Depreciation and amortization 24,763 25,168 106,014 109,738 Restructuring charges and September 11 related items, net 12,712 (18,408) 23,810 -------- -------- ---------- ---------- Operating expenses 365,429 365,993 1,405,572 1,484,090 -------- -------- ---------- ---------- Operating income 55,294 30,856 142,913 75,083 Other income (deductions): Investment income 260 98 7,771 400 Interest expense (968) (509) (2,830) (3,083) Equity in earnings (losses) of associated companies 2,563 (471) 2,869 (488) Gain on resolution of Telerate sale loss contingencies 59,821 Gain on sale of businesses 197,925 Gain on non-monetary exchange 18,699 18,699 Contract guarantee (2,148) (2,758) (9,523) (11,878) Other, net (771) (576) 1,138 (429) -------- -------- ---------- ---------- Income before income taxes and minority interests 72,929 26,640 220,858 257,530 Income taxes 28,863 11,983 51,704 63,741 Income before minority interests 44,066 14,657 169,154 193,789 Minority interests 186 578 1,445 7,717 -------- -------- ---------- ---------- Net income $ 44,252 $ 15,235 $ 170,599 $ 201,506 ======== ======== ========== ========== Net income per share: - Basic $.54 $.19 $2.09 $2.41 - Diluted .54 .18 2.08 2.40 Weighted-average shares outstanding: - Basic 81,664 82,224 81,593 83,510 - Diluted 82,201 82,519 81,950 83,917 See notes to financial information on page 10.
Dow Jones & Company Segment Information 7 (Unaudited)
(dollars in thousands) Quarters Ended December 31 Twelve Months Ended December 31 2003 2002 2003 2002 Revenues: ---- ---- ---- ---- Print publishing $253,173 $246,223 $ 915,468 $ 948,870 Electronic publishing 83,481 77,905 322,032 309,491 Community newspapers: Comparable operations 73,934 72,721 282,236 278,638 Divested/newly-acquired operations 10,135 28,749 22,174 -------- -------- ---------- ---------- Consolidated revenues $420,723 $396,849 $1,548,485 $1,559,173 ======== ======== ========== ========== Percentage change in revenue excluding divested/newly- acquired operations 3.5% (4.1)% (1.1)% (9.6)% Operating income: Print publishing $ 18,677 $ 13,557 $ 8,079 $ (8,058) Electronic publishing 17,859 16,892 67,871 60,863 Community newspapers: Comparable operations 22,207 19,410 73,954 74,000 Divested/newly-acquired operations 2,939 7,039 5,255 Corporate (6,388) (6,291) (32,438) (33,167) -------- -------- ---------- ---------- Segment operating income 55,294 43,568 124,505 98,893 Restructuring charges and September 11 related items, net (12,712) 18,408 (23,810) -------- -------- ---------- ---------- Consolidated operating income $ 55,294 $ 30,856 $ 142,913 $ 75,083 ======== ======== ========== ========== Operating margin: Print publishing 7.4% 5.5% .9% (.8)% Electronic publishing 21.4 21.7 21.1 19.7 Community newspapers: Comparable operations 30.0 26.7 26.2 26.6 Divested/newly-acquired operations 29.0 24.5 23.7 Segment operating margin 13.1% 11.0% 8.0% 6.3% Depreciation and amortization (D&A): Print publishing $ 15,354 $ 16,510 $ 67,054 $ 71,568 Electronic publishing 6,142 5,580 26,263 25,374 Community newspapers: Comparable operations 2,532 2,751 10,375 11,069 Divested/newly-acquired operations 519 1,675 681 Corporate 216 327 647 1,046 -------- -------- ---------- ---------- Consolidated D&A $ 24,763 $ 25,168 $ 106,014 $ 109,738 ======== ======== ========== ========== See notes to financial information on page 10.
Dow Jones & Company Supplemental Segment Revenue Information 8 (Unaudited) (in thousands) Quarters Ended December 31 Twelve Months Ended December 31 2003 2002 2003 2002 ---- ---- ---- ---- Print Publishing: U.S. Publications: Advertising $163,606 $150,811 $ 570,351 $ 585,851 Circulation and other 66,026 68,906 263,300 272,100 International Publications: Advertising 14,402 17,365 47,674 54,832 Circulation and other 9,139 9,141 34,143 36,087 -------- -------- ---------- ---------- Total 253,173 246,223 915,468 948,870 Electronic Publishing: Dow Jones Newswires: Domestic 42,296 43,383 170,267 177,706 International 10,632 10,849 42,803 44,519 -------- -------- ---------- ---------- Total Newswires 52,928 54,232 213,070 222,225 Consumer Electronic Publishing(*) 19,509 15,318 68,716 55,693 Dow Jones Indexes/Ventures 11,044 8,355 40,246 31,573 -------- -------- ---------- ---------- Total 83,481 77,905 322,032 309,491 Community Newspapers: Advertising Comparable operations 53,889 53,075 203,136 199,919 Divested/newly-acquired operations 8,633 24,325 15,707 -------- -------- ---------- ---------- Total advertising 62,522 53,075 227,461 215,626 Circulation and other Comparable operations 20,045 19,646 79,100 78,719 Divested/newly-acquired operations 1,502 4,424 6,467 -------- -------- ---------- ---------- Total circulation and other 21,547 19,646 83,524 85,186 Total 84,069 72,721 310,985 300,812 -------- -------- ---------- ---------- Total segment revenues $420,723 $396,849 $1,548,485 $1,559,173 ======== ======== ========== ========== (*) Includes WSJ.com, related vertical sites, licensing/business development and radio/audio. See notes to financial information on page 10.
Dow Jones & Company Statistical Information 9 (Unaudited)
Quarters Ended December 31 Twelve Months Ended December 31 2003 2002 2003 2002 ---- ---- ---- ---- Advertising Volume Year-Over-Year Percentage Change: The Wall Street Journal General 2.2% 3.2% (0.6)% (7.9)% Technology 13.8 (29.9) (2.7) (30.4) Financial 7.0 (15.6) (15.8) (28.2) Classified 19.9 4.6 14.1 (6.8) Total 8.1 (8.2) (1.3) (17.6) The Asian Wall Street Journal (12.6) 4.4 2.0 (24.0) The Wall Street Journal Europe (5.3) 6.4 9.3 (22.6) Barron's (14.0) (2.3) (16.0) (10.4) Ottaway Newspapers (*) Daily (3.9) 2.1 (2.5) (1.7) Non-daily 5.6 .8 2.9 (2.5) Total (2.2) 1.9 (1.6) (1.8) Wall Street Journal advertising as a percentage of total Journal linage: General 44.3% 46.8% 41.9% 41.7% Technology 19.0 18.1 19.6 19.8 Financial 18.2 18.4 17.0 19.9 Classified 18.5 16.7 21.5 18.6 Other statistics: December 31 December 31 2003 2002 ----------- ----------- Dow Jones Newswires terminals 293,000 308,000 WSJ.com subscribers 689,000 679,000 WSJ.com unique visitors/business day 125,329 121,071 Average monthly unique visitors to the Journal Network 5,834,000 5,280,000 Average monthly page views to the Journal Network 63,893,000 59,757,000 (*) Percentage excludes divested/newly-acquired operations.
Dow Jones & Company Notes to Financial Information 10 1. The company's calculation of net income, operating income and earnings per share excluding special items may not be comparable to similarly titled measures reported by other companies, since companies and investors may differ as to what type of events warrant adjustment. Net income, operating income and earnings per share excluding special items are not measures of performance under generally accepted accounting principles and should not be construed as substitutes for consolidated net income, operating income and earnings per share as a measure of performance. However, management uses these measures in comparing the company's historical performance and believes that they provide meaningful and comparable information to investors to assist in their analysis of the company's performance relative to prior periods and its competitors. 2. The following table reconciles reported results to income adjusted for special items for the fourth quarter and the twelve months ended December 31, 2003 and 2002.
Quarters Ended December 31 (in millions, except 2003 2002 per share amounts) Operating Net EPS Operating Net EPS --------- --- --- --------- --- --- Reported income $55.3 $44.3 $.54 $30.9 $15.2 $.18 Adjusted to remove: Included in operating income: Restructuring charges (a) (15.8) (9.5) (.11) Insurance gain on WFC damaged assets (a) 3.1 1.8 .02 Included in non-operating income: Contract guarantee (b) (2.1) (.03) (2.8) (.03) Gain on non-monetary exchange of interests in WSJ Europe and Handelsblatt (c) 11.4 .14 Equity Method investments: Restructuring/workforce reductions by Factiva and CNBC International (d) (1.6) (.03) Lease termination charge at SmartMoney (d) (0.9) (.01) ----- ----- ---- ----- ----- ---- Adjusted $55.3 $35.0 $.43 $43.6 $28.2 $.34 ===== ===== === ===== ==== ====
Dow Jones & Company Notes to Financial Information 11
Twelve Months Ended December 31 (in millions, except 2003 2002 per share amounts) Operating Net EPS Operating Net EPS --------- --- --- -------- ---- --- Reported $142.9 $170.6 $2.08 $75.1 $201.5 $2.40 Adjusted to remove: Included in operating income: Restructuring charges (a) (26.9) (15.8) (.18) Insurance gain on WFC damaged assets (a) 3.1 1.8 .02 Gain from business interruption insurance claim (a) 18.4 11.1 .14 Included in non-operating income: Contract guarantee (b) (9.5) (.12) (11.9) (.14) Gain on non-monetary exchange of interests in WSJ Europe and Handelsblatt (c) 11.4 .14 Gain on resolution of Telerate sale loss contingencies (e) 59.8 .73 Sale of ONI properties (f) 164.1 1.94 Equity method investments: Restructuring/workforce reductions by Factiva and CNBC International (d) (1.6) (.03) Lease termination charge at SmartMoney (d) (0.9) (.01) CNBC International gain (d) 3.9 .05 Special income tax matters (g) 19.5 .24 ------ ----- ----- ----- ------ ------ Adjusted $124.5 $78.4* $ .96* $98.9 $ 61.9 $ .74* ====== ===== ===== ===== ====== ====== * The sum of the individual amounts does not equal the total due to rounding.
(a) Restructuring charges and September 11 related items, net: Restructuring The fourth quarter of 2002 included restructuring charges of $15.8 million ($9.5 million after taxes and minority interests, or $.11 per diluted share) reflecting employee severance related to a workforce reduction of about 280 full time employees, or roughly 4% of full-time employees. On a full year basis, including a workforce reduction in the second quarter of 2002, restructuring charges totaled $26.9 million ($15.8 million after taxes and minority interests, or $.18 per diluted shares) largely reflecting employee severance related to a workforce reduction of about 445 full-time employees, or roughly 6%, of full-time employees. September 11 related items, net: In the second quarter of 2003, the company recorded a gain of $18.4 million ($11.1 million after taxes, or $.14 per diluted share) reflecting the settlement of its business interruption insurance claim for loss of operating income suffered as a result of the terrorist attacks on the World Trade Center on September 11, 2001. The fourth quarter of 2002 included a gain of $3.1 million ($1.8 million after taxes, or $.02 per diluted share), reflecting the recovery of insurance proceeds in excess of the carrying value of World Financial Center assets that were destroyed as a result of the September 11 terrorist attacks. Dow Jones & Company Notes to Financial Information 12 (b) Contract guarantee: Under the terms of the company's 1998 sale of Telerate to Bridge Information Systems, Inc. (Bridge), Dow Jones retained its guarantee of payments under certain circumstances of certain minimum payments for data acquired by Telerate from Cantor Fitzgerald Securities (Cantor) and Market Data Corporation (MDC). The annual minimum payments average approximately $50 million per year through October 2006 under certain conditions. Bridge agreed to indemnify Dow Jones for any liability Dow Jones incurred under the contract guarantee with respect to periods subsequent to Bridge's purchase of Telerate. In 2000, based in part on uncertainty with Bridge's solvency as well as other factors, the company established a reserve of $255 million representing the net present value of the total estimated payments from 2001 through October 2006, using a discount rate of 6%. Earnings in 2003 and 2002 have included charges related to the accretion of the discount on the reserve balance. These charges totaled $2.1 million and $2.8 million in the fourth quarters of 2003 and 2002, respectively. For the twelve months of 2003 and 2002, charges related to the accretion of discount totaled $9.5 million and $11.9 million, respectively. Bridge filed for bankruptcy in February 2001 but made payments for this data for the post-petition periods through October 2001, when Telerate ceased operations, went out of business, sold certain assets and rejected its contracts with Cantor and MDC. The company is now in litigation with Cantor and MDC with respect to their claims for amounts due under the contract guarantee. The company has various substantial defenses to these claims and the litigation is proceeding. The trial court rendered a decision in January 2003 denying the parties' respective motions to grant their own claims and to dismiss the competing claims. The company, Cantor and MDC all filed appeals from the trial court's order, but these appeals are in the process of being withdrawn. The discovery phase is proceeding. While it is not possible to predict with certainty the ultimate outcome of this litigation, the company believes the likelihood of a loss exceeding the amount reserved is remote; however, it is possible that such loss could be less than the amount reserved. (c) Gain on non-monetary exchange of interests in WSJ Europe and Handelsblatt: In December 2003, the company and the von Holtzbrinck Group exchanged equity shareholdings so as to increase the company's interest in the Wall Street Journal to 90% from 51% and reduce the company's ownership of the von Holtzbrinck Group's business daily, Handelsblatt, to 10% from 22%, with news and advertising relationships continuing. The company recorded a gain of $18.7 million ($11.4 million after taxes, or $.14 per diluted share), on the disposal of the 12% interest in Handelsblatt. (d) Gains in equity in losses of associated companies: In the fourth quarter of 2002, equity in losses of associated companies included restructuring/workforce reduction charges of $2.7 million at Factiva and CNBC International, combined ($.03 per diluted share), and an office lease termination charge of $1.5 million at SmartMoney ($.01 per diluted share). Equity in losses of associated companies for the full year of 2002 included the fourth quarter charges above of $4.2 million ($.04 per diluted share), and gains at CNBC Asia of $3.9 million ($.05 per diluted share). These gains consisted of a $2.5 million gain from the favorable settlement of a contractual obligation and a $1.4 million gain from the sale of an investment by CNBC Asia. Dow Jones & Company Notes to Financial Information 13 (e) Gain on resolution of Telerate sale loss contingencies: In the first quarter of 2003, the company recorded a gain of $59.8 million ($.73 per diluted share) on the resolution of certain loss contingencies resulting from the sale of its former Telerate subsidiary to Bridge. The reserve for loss contingencies was established as part of the loss on sale of Telerate in 1998 and related to various claims that arose out of the Stock Purchase Agreement, including a purchase price adjustment related to working capital, an indemnification undertaking and other actual and potential claims and counter-claims between the company and Bridge. In February 2001, Bridge declared bankruptcy. In March 2003, these matters were resolved by the bankruptcy court, and the company's contingent liabilities were thereby extinguished. (f) Gains on sale of ONI properties: The second quarter of 2002 included a gain of $44.5 million ($38 million after taxes, or $.45 per diluted share) from the sale of Ottaway's Essex County newspaper properties to Eagle-Tribune Publishing Company. The first quarter of 2002 included a gain of $153.4 million ($126.1 million after taxes, or $1.49 per diluted share) resulting from the sale of four of the company's Ottaway newspapers to Community Newspapers Holdings, Inc. (g) Special income tax matters: In the third quarter of 2003, the Internal Revenue Service ("IRS") completed its audit of the company's tax returns for the 1995 through 1998 tax periods, which had been amended for additional tax refunds. In October 2003, the company received notification that the Congressional Joint Committee on Taxation had approved these claims for tax refunds of approximately $24 million. The company received these refunds plus interest of approximately $6.7 million in the fourth quarter of 2003. Pursuant to the settlement of these claims, in the third quarter of 2003, the company released $25 million of tax provisions no longer needed for loss contingencies and recorded interest income of about $6.7 million (about $4.0 million, net of taxes). The company also recorded a provision of about $9.5 million in the third quarter for loss contingencies relating to recent developments in certain other tax matters. The net effect of these items was an increase in net income of $19.5 million, or $.24 per share. 3. On May 5, 2003, the company's Ottaway Newspaper subsidiary acquired The Record of Stockton, California from Omaha World-Herald Company for $144 million in cash, plus net working capital. Based on September 2003 circulation figures, The Record has daily paid circulation of 59,271 and Sunday circulation of 72,698. Prior to the acquisition, the Record Group reported 2002 revenues of $37 million and operating profits of $9.6 million. 4. Restructuring charges and September 11 related items, net are not included in segment expenses, as management evaluates segment results exclusive of these items. For information purposes, restructuring charges and September 11 related items, net allocable to each segment for the twelve months ended December 31, 2003 and 2002 were as follows:
(in thousands) Quarters Ended December 31 Twelve Months Ended December 31 2003 2002 2003 2002 ---- ---- ---- ---- Print Publishing $ 8,484 $(17,422) $ 16,794 Electronic Publishing 4,078 (951) 6,521 Corporate 150 (35) 495 ------ -------- -------- Total (gain)/charges from restructuring and September 11 related items, net $12,712 $(18,408) $23,810 ======= ======== =======
Dow Jones & Company Notes to Financial Information 14 5. The company's business and financial news and information operations are reported in two segments: print publishing and electronic publishing. The results of the company's Ottaway Newspapers subsidiary, which publishes 15 daily newspapers and more than 30 weeklies and shoppers in nine states in the U.S., are reported in the community newspaper segment. Print publishing includes the global operations of The Wall Street Journal and its international editions, as well as Barron's and U.S. television operations (results of the company's international television ventures are included in equity in earnings of associated companies). Electronic publishing includes the operations of Dow Jones Newswires, Consumer Electronic Publishing and Dow Jones Indexes/Ventures. 6. Summarized financial information for 50% held equity-basis investments in associated companies were as follows (amounts are at 100% levels):
(in thousands) Quarters Ended December 31 Twelve Months Ended December 31 2003 2002 2003 2002 ---- ---- ---- ---- Factiva Revenues $61,834 $61,413 $244,953 $248,886 Operating income 5,328 331 13,265 14,358 Depreciation and amortization 3,092 3,294 12,449 12,824 SmartMoney Revenues $13,291 $14,515 $ 49,691 $ 48,603 Operating income (loss) 1,049 (2,741) (1,206) (9,600) Depreciation and amortization 216 411 1,319 1,773 CNBC International (*) Revenues $12,937 $11,383 $ 40,521 $ 38,886 Operating loss (2,616) (5,776) (20,240) (26,136) Depreciation and amortization 986 1,106 3,883 4,316 (*) Includes the results of CNBC Europe and CNBC Asia.