EX-99 2 dowjonesthirdquarter2004earn.htm THIRD QUARTER EARNINGS RELEASE <B>Page 5




EXHIBIT 99.1


Investor Contact:

Dow Jones & Company

Mark Donohue

200 Liberty Street

Director, Investor Relations

New York, NY 10281

(609) 520-5660


Media Contact:

Nicole Pyhel


Senior Manager, Corporate Communications

(609) 520-4057




DOW JONES REPORTS REVENUE AND PROFIT FOR THIRD QUARTER 2004

Provides 4th Quarter Outlook


NEW YORK (October 14, 2004)¾Dow Jones & Company (NYSE: DJ) today reported that it earned 15 cents per diluted share during the third quarter of 2004, compared with 35 cents per diluted share in the third quarter of 2003.  Excluding the special items explained herein, the Company earned 15 cents per diluted share during the third quarter of 2004, up 7% over the 14 cents per diluted share earned in the third quarter of 2003.

Revenue rose 5.0% in the third quarter of 2004 to $394.9 million compared to third quarter of 2003.  Operating income was up 21.5% over last year to $20.4 million and operating margins were 5.2% in 2004 up from 4.5% in 2003.  Results were driven by improved revenue, profit and margins at Electronic Publishing and Ottaway Community Newspapers.

Special Items: In the third quarter of 2004, the Company recorded special items which net to zero cents per share as a special gain of two cents per share related to a tax benefit was offset by a loss of two cents per share for accretion of discount on a contract-guarantee obligation.  In the third quarter of 2003, special items netted to a gain of 21 cents per share and included a gain of 24 cents per share related to a net tax benefit, partially offset by a charge of 3 cents per share for accretion of discount on a contract-guarantee obligation.

Commenting on third quarter results, Peter R. Kann, chairman and chief executive officer of Dow Jones, said: “Our results were negatively affected by very weak technology advertising, which led to a 6% decline in ad linage at The Wall Street Journal in the quarter, after four consecutive quarterly gains.  Thus, B2B advertising remains volatile.  Nonetheless, we’re pleased to have more than offset this decline as we increased total company revenue and operating income.  Strong advertising yield, continued improvements in Electronic Publishing and Ottaway Community Newspapers, and stringent cost management across the company all contributed.”  

Mr. Kann continued: “Our focus remains on controlling spending, improving quality, enhancing our products, and investing in growth opportunities to maximize our revenue and profitability in any advertising environment.  The latest example of this is our recently announced launch of a Weekend Edition of the Journal scheduled for September 2005.”        

Dow Jones also said that it expects earnings per share before special items in the fourth quarter of 2004, to be up slightly over the 43 cents per share earned in the fourth quarter of 2003.  This assumes fourth quarter 2004 linage at the U.S. Wall Street Journal will be down slightly compared to the fourth quarter of 2003.  Based on currently anticipated special items in the fourth quarter of 2004, the Company expects reported earnings per share to be in the low 40 cents per share range, compared with 54 cents per share in the fourth quarter of 2003.  Please refer to the attached table for a reconciliation of the Company’s fourth quarter earnings before and after special items.

Segment Results

Print Publishing revenue declined $4.0 million, or 1.9%, in the third quarter of 2004 versus the same period a year ago.  Advertising linage at the U.S. Wall Street Journal decreased 6.0% (down 10.2% in September) while linage at the international editions of the Journal decreased 20.0% (down 28.4% in September).  Barron’s advertising pages decreased 5.1% in the quarter (down 2.8% in September with one less issue).  The print publishing segment had an operating loss of $16.6 million in the third quarter, seasonally its weakest quarter, compared to a loss of $11.5 million in third quarter of 2003.

Electronic Publishing revenue in the third quarter of 2004 increased 23.1% from the same period a year ago to $97.6 million with operating income up 26.9% to $21.7 million, driven by the acquisitions of Alternative Investor Group in March 2004 and vwd, a German business wire, in April 2004, together with improved performance in all business segments.  Operating margin of 22.2% was up over the previous year’s 21.5%.  Terminal counts at Newswires were up 2.8% compared to last year.  Paid subscribers to The Wall Street Journal Online grew to 701,000 as of September 30, 2004, up 2.2% from the prior year period.

Ottaway Community Newspapers’ revenue in the third quarter of 2004 increased 5.6% from the same period a year ago to $87.6 million with operating income up 7.9% to $23.5 million.  Operating margin of 26.8% was up over last year’s 26.2%.  Advertising linage increased 4.9% in the third quarter (linage was up 8.8% in September).

The Company ended the third quarter with $197 million in debt, compared with $215 million at the end of the second quarter of 2004 and $194 million at the end of the third quarter of 2003.  

As previously announced, the Company will host an earnings conference call at 10 a.m. ET 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 877-407-3140.   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 Universal 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 advertising revenues, particularly in the Company’s core advertising market-B2B advertising; the risk that inconsistent trends across major advertising categories, such as technology and finance, will continue; the risk that advertising levels will not return to the pre-boom, pre-bust levels that the Company considers normal levels; the Company's ability to limit and manage expense growth, especially in light of its prior cost cutting and its planned growth initiatives, such as the new Weekend Edition; 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, and its planned new Weekend Edition, face; the risk that the Company's initiatives, such as the new Weekend Edition, to attract more consumer advertising, and other diversified advertising, to The Wall Street Journal will not succeed; the risk that the new Weekend Edition will compete against its own current consumer advertising sections, such as the Weekend Journal and Personal Journal, for consumer advertising revenues; the risk that readers do not respond favorably to the new Weekend Edition; 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 and posted in the Investor Relations section of the Company’s web site (www.dowjones.com). 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 (www.dowjones.com).














Dow Jones & Company

Earnings Summary

5

(Unaudited)



(in thousands, except per share amounts)

Quarters Ended

September 30

Nine Months Ended

September 30

 

2004

2003

2004

2003


Reported results:

    

   Revenues

$394,892

$375,946

$1,234,303

$1,127,762

     

   Operating income

20,428

16,816

110,477

87,619

     

   Net income

12,067

28,577

63,924

126,347

     

   Effective tax rate*

37.4%

(25.3)%

41.1%

15.3%

     

   Diluted EPS

$.15

$.35

$.78

$1.54

     

Excluding items described in Note 2:

    

   Operating income

$  20,428

$  16,816

$   107,716

$     69,211

  

    

   Net income

12,237

  11,382

64,395

  43,320

     

   Effective tax rate*

41.5%

38.2%

40.4%

39.5%

     

   Diluted EPS

$.15

$.14

$.78

$.53

     

   EPS percentage change

7.1%

133.3%

47.2%

32.5%


*The effective income tax rate is net of minority interests.


See notes to financial information on page 10.




Reconciliation of Fourth Quarter Earnings Outlook


 

Quarters Ended December 31,

 

2004 Guidance

2003 Actual


Reported earnings per share

Low 40 cents per share range

$.54


Adjusted to remove:

  

  Contract guarantee

                 (.02)

(.03)

  Gain on non-monetary exchange of interests

      in WSJ Europe and Handelsblatt

____________

  .14


EPS before special items

Slightly over 43 cents per share

$.43


**Based on special items currently anticipated.                                                                             



Condensed Consolidated Statements of Income

6

(Unaudited)



(in thousands, except per share amounts)

Quarters Ended

September 30

Nine Months Ended

September 30

 

2004

2003

2004

2003


Revenues:

    

Advertising

$212,148

$208,897

$  694,683

$  622,733

Information services

84,906

71,278

242,251

214,194

Circulation and other

    97,838

    95,771

   297,369

   290,835

   Total revenues

  394,892

  375,946

1,234,303

1,127,762

     

Expenses:

    

News, production and technology

134,056

122,487

386,665

357,862

Selling, administrative and general

140,012

137,143

434,026

400,938

Newsprint

28,382

26,438

84,960

76,971

Print delivery costs

46,416

46,904

141,285

141,529

Depreciation and amortization

25,598

26,158

79,651

81,251

Restructuring charges and September 11

related items, net

_______

_______

     (2,761)

    (18,408)

   Operating expenses

  374,464

  359,130

1,123,826

1,040,143

     

   Operating income

20,428

16,816

110,477

87,619

     

Other income (deductions):

    

Investment income

76

7,258

332

7,511

Interest expense

(964)

(664)

(2,412)

(1,862)

Equity in (losses) earnings of associated

 

companies

(13)

(16)

1,386

306

Gain on disposition of investment

  

3,260

 

Gain on resolution of Telerate sale loss

contingencies

   

59,821

Contract guarantee

(1,651)

(2,306)

(5,455)

(7,375)

Other, net

         759

      1,258

        (506)

        1,909

     

Income before income taxes and minority

interests

18,635

22,346

107,082

147,929

Income taxes

      7,209

    (5,779)

     44,694

      22,841

     

Income before minority interests

11,426

28,125

62,388

125,088

Minority interests

         641

         452

       1,536

        1,259

     

Net income

$  12,067

$  28,577

$   63,924

$  126,347

     

Net income per share:

    

  - Basic

$.15

$.35

$.78

$1.55

  - Diluted

.15

.35

.78

1.54

Weighted-average shares outstanding:

    

  - Basic

81,918

81,507

81,825

81,568

  - Diluted

82,295

81,865

82,239

81,864

                                                                                                                                                   

See notes to financial information on page 10.                                                                          



Dow Jones & Company

Segment Information

7

(Unaudited)



(dollars in thousands)

Quarters Ended

September 30

Nine Months Ended

September 30

 

2004

2003

2004

2003


Revenues:

    

Print publishing

$209,604

$213,586

$  700,940

$  662,295

Electronic publishing

97,644

79,352

280,227

238,551

Community newspapers:

    

  Comparable operations

87,644

83,008

237,175

223,883

  Newly-acquired operations

________

________

      15,961

        3,033

     

  Consolidated revenues

$394,892

$375,946

$1,234,303

$1,127,762

     

Percentage change in revenues excluding

  newly-acquired operations

2.1%

3.7%

6.2%

(2.7)%

     

Operating (loss) income:

    

Print publishing

$(16,589)

$(11,491)

$      5,324

$   (10,598)

Electronic publishing

21,692

17,098

63,152

50,012

Community newspapers:

    

  Comparable operations

23,491

21,766

61,826

54,990

  Newly-acquired operations

  

3,798

857

Corporate

    (8,166)

  (10,557)

    (26,384)

    (26,050)

     

  Segment operating income

20,428

16,816

107,716

     69,211

Restructuring charges and  September 11

  related items, net

_______

_______

       2,761

      18,408

     

  Consolidated operating income

$  20,428

$  16,816

$ 110,477

$    87,619

     

Operating margin:

    

Print publishing

(7.9)%

(5.4)%

0.8%

(1.6)%

Electronic publishing

22.2

21.5

22.5

21.0

Community newspapers:

    

  Comparable operations

26.8

26.2

26.1

24.6

  Newly-acquired operations



23.8

28.3

     

Segment operating margin

5.2

4.5

8.7

6.1

     

Depreciation and amortization (D&A):

    

Print publishing

$  15,396

$  16,312

$   49,938

$    51,700

Electronic publishing

7,294

6,543

20,904

20,121

Community newspapers:

    

  Comparable operations

2,867

3,132

7,899

8,924

  Newly-acquired operations


 

786

75

Corporate

          41

        171

          124

          431

     

  Consolidated D&A

$  25,598

$  26,158

$   79,651

$    81,251


See notes to financial information on page 10.



Dow Jones & Company

Supplemental Segment Revenue Information

8

(Unaudited)



(in thousands)

Quarters Ended

September 30

Nine Months Ended

September 30

 

2004

2003

2004

2003


Print Publishing:

    

U.S. Publications:

    

   Advertising

$128,213

$129,790

$   444,930

$   406,745

   Circulation and other

62,750

63,562

194,807

197,274

     

International Publications:

    

   Advertising

10,159

12,138

36,075

33,272

   Circulation and other

     8,482

      8,096

       25,128

      25,004

     

       Total

209,604

213,586

700,940

662,295

     

Electronic Publishing:

    

Dow Jones Newswires:

    

   Domestic

50,021

42,739

143,369

127,971

   International

    15,515

    10,920

       40,928

      32,171

       Total Newswires(*)

65,536

53,659

184,297

160,142

Consumer Electronic Publishing(**)

19,258

16,254

57,320

49,207

Dow Jones Indexes/Ventures

   12,850

      9,439

       38,610

      29,202

     

       Total

97,644

79,352

280,227

238,551

     

Community Newspapers:

    

Advertising

    

   Comparable operations

65,583

60,748

175,251

162,323

   Newly-acquired operations

_______

_______

       13,517

        2,616

       Total advertising

65,583

60,748

188,768

164,939

     

Circulation and other

    

   Comparable operations

22,061

22,260

61,924

61,560

   Newly-acquired operations

_______

_______

         2,444

           417

       Total circulation and other

22,061

22,260

64,368

61,977

     

       Total

    87,644

    83,008

     253,136

     226,916

     

   Total segment revenues

$394,892

$375,946

$1,234,303

$1,127,762


 (*)    The increase in Dow Jones Newswires revenue in the third quarter and nine months of 2004 was largely due to acquisitions.


(**)  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

September 30

Nine Months Ended

September 30

Advertising Volume

Year-Over-Year Percentage Change:

2004

2003

2004

2003


The Wall Street Journal

    

   General

1.7%

12.5%

3.2%

(1.8)%

   Technology

(35.7)

12.0

(23.0)

(7.8)

   Financial

(10.0)

(12.8)

13.9

(23.0)

   Classified

11.0

10.5

9.8

12.3

 Total

(6.0)

7.1

1.3

(4.7)

     

The Asian Wall Street Journal

(20.6)

29.0

(3.6)

8.7

The Wall Street Journal Europe

(19.4)

23.6

0.5

16.2

Barron’s

(5.1)

(8.9)

12.2

(16.7)

     

Ottaway Newspapers (*)

    

   Daily

2.8

(2.5)

3.0

(2.0)

   Non-daily

14.5

2.4

13.7

1.8

    Total

4.9

(1.7)

4.9

(1.4)

     

Wall Street Journal advertising as

 a percentage of total Journal

 linage:

    

    General

44.0%

40.7%

41.8%

41.0%

    Technology

14.4

21.1

15.1

19.8

    Financial

15.1

15.7

18.5

16.5

    Classified

26.5

22.5

24.6

22.7



 

September 30

September 30

Other statistics:

2004

2003


Dow Jones Newswires terminals

297,000

289,000

WSJ.com subscribers

701,000

686,000

WSJ.com unique visitors/business day

142,000

123,000

Average monthly unique visitors to the Journal Network (**)

4,607,000

n/a

Average monthly page views to the Journal Network (**)

69,696,000

n/a


(*) Percentages exclude divested/newly-acquired operations.


(**) Beginning in the second quarter of 2004, page views and unique visitors statistics for the Journal Network have been calculated using a new measurement technology.  Prior year figures are not available on a comparable basis.  The Journal Network consists of WSJ.com and related vertical sites.






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 third quarter and the nine months ended September 30, 2004 and 2003.


 

Quarters Ended September 30

 

2004

2003

(in millions, except per share amounts)

Operating

Net

EPS

Operating

Net

EPS


       

Reported income

$20.4

$12.1

$.15

$16.8

$28.6

$.35

       

Adjusted to remove:

      

Included in non-operating income:

      

  Contract guarantee  (a)

 

  (1.7)

(.02)

 

  (2.3)

 (.03)

  Certain income tax matters (b)

____

    1.5

  .02

____

  19.5

  .24

Adjusted

$20.4

$12.2*

$.15

$16.8

$11.4

$.14



 

Nine Months Ended September 30

 

2004

2003

(in millions, except per share amounts)

Operating

Net

EPS

Operating

Net

EPS


       

Reported

$110.5

$63.9

$.78

$87.6

$126.3

$1.54

       

Adjusted to remove:

      

Included in operating income:

      

  Reversal of lease obligation

      

     reserve – WFC (c)

2.8

1.7

.02

   

  Gain from business interruption

      

    insurance claim (c)

   

  18.4

  11.1

   .14

Included in non-operating income:

      

  Contract guarantee (a)

 

(5.5)

(.06)

 

 (7.4)

  (.09)

  Gain on resolution of Telerate sale

      

     loss contingencies (d)

    

  59.8

    .73

  Gain on disposition of investment (e)

 

1.8

.02

   

  Certain income tax matters (b)

_____

    1.5

  .02

____

   19.5

    .24

  

      

Adjusted

$107.7

$64.4

$.78

$69.2

$ 43.3

$  .53*


* The sum of the individual amounts does not equal the total due to rounding.


Dow Jones & Company

Notes to Financial Information

11


(a) Contract guarantee:


Under the terms of the Company's 1998 sale of Telerate to Bridge Information Systems (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 minimum payments of about $300 million from 2001 through October 2006, using a discount rate of 6%.  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.


Earnings in 2004 and 2003 included charges related to the accretion of the discount on the reserve balance.  These charges totaled $1.7 million and $2.3 million in the third quarters of 2004 and 2003, respectively.  For the first nine months of 2004 and 2003, charges related to the accretion of discount totaled $5.5 million and $7.4 million, respectively.


(b) Certain income tax matters:


2004 Income tax matters

Income tax expense in the third quarter 2004 included a special tax benefit of $1.5 million, or $.02 per diluted share, as a result of a favorable resolution of a federal tax matter during the quarter.  The Company adjusted its tax accounts for loss contingencies which were resolved favorably.

 

2003 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 $6.7 million ($4.0 million, net of taxes).  The Company also recorded a provision of $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 diluted share.


(c) Restructuring charges and September 11 related items, net:


Reversal of lease obligation reserve – World Financial Center (WFC):

In the fourth quarter 2001, the Company recorded a charge of $32.2 million as a result of its decision to permanently re-deploy certain personnel and abandon four of seven floors that were leased at its World Financial Center headquarters.  This charge primarily reflected the Company’s rent obligation through 2005 on this vacated space.  

 

In the first quarter 2004, the Company decided to extend the term of its lease for one of the floors that was previously abandoned and re-occupy this floor with personnel from another New York location, whose lease term was expiring.  As a result, the Company reversed $2.8 million ($1.7 million, net of taxes, or $.02 per diluted share) of the remaining lease obligation reserve of the previously abandoned floor at WFC.

 




Dow Jones & Company

Notes to Financial Information

12


Gain from business interruption insurance claim

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.


(d) 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 Information Systems (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.


(e) Gain on disposition of investment:


On April 2, 2004, simultaneous with the Company’s acquisition of the remaining interest in the news operations of Vereinigte Wirtschaftsdienste GmbH (“VWD”), VWD sold its non-news assets to a third party, resulting in cash proceeds to Dow Jones of $6.7 million.  Dow Jones was a minority shareholder in VWD.


As a result of this sale, the Company recorded an after-tax gain of $1.8 million, or $.02 per diluted share, in the second quarter of 2004.  



3. The Company made the following acquisitions during the first nine months of 2004 and 2003.

 

Acquisition of Remaining Interest in VWD news operations in 2004

On April 2, 2004, the Company acquired the remaining interest in the news operations of Vereinigte Wirtschaftsdienste GmbH (“VWD”), a German newswires business, for $12.1 million.  The acquired business consists of financial newswires and business newsletters, which have been combined into the Company’s Dow Jones Newswires business, under the brand name Dow Jones-VWD News.  Dow Jones was a minority shareholder in VWD.  


Acquisition of Alternative Investor in 2004

On March 19, 2004, the Company completed its acquisition of Alternative Investor from Wicks Business Information for $85 million plus net working capital.  The $85 million purchase price could be increased by $5 million, payable in 2008, based on the performance of the acquired business.  The acquisition was funded by the issuance of debt under the Company’s commercial paper program.  


Alternative Investor is a provider of newsletters, databases and industry conferences for the venture-capital and private-equity markets, and has been combined into the Company’s Dow Jones Newswires business.


Acquisition of The Record of Stockton, California in 2003

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.  The Record has daily paid circulation of 59,271 and Sunday circulation of 72,698.





Dow Jones & Company

Notes to Financial Information

13



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, the reversal of the lease obligation reserve in 2004 and the gain from insurance claim in 2003 allocable to each segment for the nine months ended September 30, 2004 and 2003 were as follows:


 (in thousands)

Nine Months Ended

September 30

 

2004

2003


   

Print Publishing

$2,631

$17,422

Electronic Publishing

125

951

Community newspapers

  

Corporate

         5

         35

   

Total income

$2,761

$18,408


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 (losses) 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

September 30

Nine Months Ended

September 30

 

2004

2003

2004

2003


   Factiva

    

    Revenues

$65,570

$59,162

$195,741

$183,119

    Operating income

3,418

3,045

13,987

7,937

    Depreciation and amortization

2,642

2,942

9,084

9,357

     

   SmartMoney

    

    Revenues

$12,276

$12,056

$  37,350

$  36,400

    Operating loss

(201)

(1,227)

(787)

(2,255)

    Depreciation and amortization

114

208

536

1,103

     

   CNBC International (*)

    

    Revenues

$  9,087

$  9,432

$  29,573

$  27,584

    Operating loss

(8,290)

(4,698)

(23,285)

(17,624)

    Depreciation and amortization

744

931

2,485

2,897


(*) Includes the results of CNBC Europe and CNBC Asia.