10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the quarterly period ended June 30, 2005

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the transition period from                     to                      

Commission file number 1-7564

DOW JONES & COMPANY, INC.

(Exact name of registrant as specified in its charter)

DELAWARE	13-5034940
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

200 LIBERTY STREET, NEW YORK, NEW YORK	10281
(Address of principal executive offices)	(Zip Code)

(212) 416-2000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes x    No ___

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes x    No ___

The number of shares outstanding of each of the issuer’s classes of common stock on June 30, 2005: 62,402,310 shares of Common Stock and 20,458,682 shares of Class B Common Stock.

DOW JONES & COMPANY, INC.

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2005

 INDEX

		Page No.
PART I - Financial Information (unaudited)
Item 1.	Financial Statements
	Condensed Consolidated Statements of Income –	3
	For the quarters and six months ended June 30, 2005 and 2004
	Condensed Consolidated Statements of Cash Flows –	4
	For the six months ended June 30, 2005 and 2004
	Condensed Consolidated Balance Sheets –	5
	As of June 30, 2005 and December 31, 2004
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	33
Item 4.	Controls & Procedures	34
PART II - Other Information
Item 1.	Legal Proceedings	34
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 6.	Exhibits	35
	Signature	36

2

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Dow Jones & Company, Inc.

(unaudited)

(in thousands, except per share amounts)		Quarters Ended June 30						Six Months Ended June 30
		2005			2004			2005			2004
Revenues:
Advertising	$	249,876		$	255,836		$	467,620		$	482,535
Information services		103,590			81,518			202,059			157,345
Circulation and other		100,732			100,436			196,591			199,531
Total revenues		454,198			437,790			866,270			839,411
Expenses:
News, production and technology		141,166			130,052			276,427			252,609
Selling, administrative and general		159,129			148,779			319,314			294,014
Newsprint		31,086			28,947			59,287			56,578
Print delivery costs		46,184			47,024			90,550			94,869
Depreciation and amortization		26,370			26,698			53,460			54,053
Restructuring charges		11,367			-			11,367			(2,761	)
Total operating expenses		415,302			381,500			810,405			749,362
Operating income		38,896			56,290			55,865			90,049
Other income (expense):
Investment income		190			165			485			256
Interest expense		(4,903	)		(800	)		(8,912	)		(1,448	)
Equity in earnings of associated companies		1,832			2,139			2,566			1,399
Write-down of equity investments		(35,865	)		-			(35,865	)		-
Gain on disposition of investments		22,862			3,260			22,862			3,260
Contract guarantee		(1,117	)		(1,819	)		(2,416	)		(3,804	)
Other, net		(486	)		(499	)		853			(1,265	)
Income before income taxes and minority     interests		21,409			58,736			35,438			88,447
Income taxes		20,548			25,004			26,397			37,485
Income before minority interests		861			33,732			9,041			50,962
Minority interests in losses of subsidiaries		-			309			-			895
Net income	$	861		$	34,041		$	9,041		$	51,857
Net income per share:
Basic	$	.01		$	.42		$	.11		$	.63
Diluted		.01			.41			.11			.63
Cash dividends declared per share (Note 6)		.50			.50			.75			.75
Weighted-average shares outstanding:
Basic		82,714			81,799			82,474			81,779
Diluted		83,200			82,211			82,970			82,211
Comprehensive (loss) income (Note 13)	$	(1,185	)	$	32,930		$	5,137		$	51,283
The accompanying notes are an integral part of the condensed consolidated financial statements.

3

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Dow Jones & Company, Inc.

(unaudited)

(in thousands)		For the Six Months Ended June 30
		2005			2004
Cash Flows from Operating Activities:
Net income	$	9,041		$	51,857
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation		47,803			52,015
Amortization of intangibles		5,657			2,038
Equity in earnings of associated companies, net of distributions		4,609			5,175
Minority interests in losses of subsidiaries		-			(895	)
Gain on disposition of  investments		(22,862	)		(3,260	)
Write-down of equity investments		35,865			-
Contract guarantee		2,416			3,804
Changes in assets and liabilities, net of acquisitions:
Accounts receivable		10,292			(13,662	)
Other assets		557			(8,660	)
Accounts payable and accrued liabilities		(55,347	)		(13,978	)
Income taxes		17,588			17,356
Deferred taxes		2,203			(1,964	)
Unearned revenue		1,092			3,033
Deferred compensation and other noncurrent liabilities		10,091			5,842
Other, net		3,036			1,070
Net cash provided by operating activities		72,041			99,771
Cash Flows from Investing Activities:
Additions to plant, property and equipment		(23,409	)		(31,165	)
Funding to investees		(8,620	)		(16,279	)
Advances (to) from equity investees		(1,171	)		9,173
Proceeds from disposition of investments		47,544			6,514
Businesses acquired, net of cash received		(438,122	)		(91,632	)
Other, net		525			2,382
Net cash used in investing activities		(423,253	)		(121,007	)
Cash Flows from Financing Activities:
Cash dividends		(41,179	)		(40,870	)
Proceeds from issuance of bonds		224,899			-
Repayment of commercial paper borrowings		(99,212	)		(43,692	)
Increase in commercial paper borrowings		245,527			105,313
Bond issuance costs		(1,468	)		-
Book overdraft		-			(4,547	)
Contribution from minority partner		2,193			-
Proceeds from sales under stock compensation plans		16,149			5,661
Net cash provided by financing activities		346,909			21,865
Effect of currency exchange rate changes on cash		1,555			952
(Decrease) increase in cash and cash equivalents		(2,748	)		1,581
Cash and cash equivalents at beginning of year		17,237			23,514
Cash and cash equivalents at June 30	$	14,489		$	25,095
The accompanying notes are an integral part of the condensed consolidated financial statements.

4

CONDENSED CONSOLIDATED BALANCE SHEETS

Dow Jones & Company, Inc.

(unaudited)

(in thousands)		June 30 2005			December 31 2004
Assets:
Current Assets:
Cash and cash equivalents	$	14,489		$	17,237
Accounts receivable – trade, net		171,270			168,497
Accounts receivable – other		25,401			23,282
Newsprint inventory		9,207			9,402
Prepaid expenses		23,935			22,471
Deferred income taxes		12,833			13,025
Total current assets		257,135			253,914
Investments in associated companies, at equity		27,227			88,911
Other investments		8,715			14,302
Plant, property and equipment, at cost		1,722,937			1,722,847
Less, accumulated depreciation		1,081,992			1,062,823
Plant, property and equipment, net		640,945			660,024
Goodwill		660,896			245,558
Other intangible assets, net		142,131			88,887
Deferred income taxes		32,272			13,755
Other assets		16,140			14,852
Total assets	$	1,785,461		$	1,380,203
Liabilities:
Current Liabilities:
Accounts payable – trade	$	55,915		$	68,191
Accrued wages, salaries and commissions		69,262			75,926
Retirement plan contributions payable		13,636			24,350
Other payables		82,290			59,947
Contract guarantee obligation		250,921			219,257
Dividends payable		20,716			-
Income taxes		56,237			43,211
Unearned revenue		224,070			215,638
Short-term debt		292,158			9,998
Total current liabilities		1,065,205			716,518
Long-term debt		224,911			135,845
Deferred compensation, principally postretirement benefit obligation		320,149			312,925
Contract guarantee obligation		12,153			41,402
Other noncurrent liabilities		20,046			19,140
Total liabilities		1,642,464			1,225,830
Minority interests in subsidiaries		-			3,830
Stockholders’ Equity:
Common stock		102,181			102,181
Additional paid-in capital		141,931			124,082
Retained earnings		786,592			839,446
Accumulated other comprehensive loss, net of taxes		(5,844	)		(1,940	)
Less, treasury stock, at cost		881,863			913,226
Total stockholders’ equity		142,997			150,543
Total liabilities and stockholders’ equity	$	1,785,461		$	1,380,203
The accompanying notes are an integral part of the condensed consolidated financial statements.

5

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Dow Jones & Company, Inc.

(unaudited)

1.

Basis of Presentation

In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments considered necessary for a fair statement of the Company’s consolidated financial position as of June 30, 2005, and the consolidated results of operations for the three and six month periods ended June 30, 2005 and 2004 and consolidated cash flows for the six month periods then ended.  All adjustments reflected in the accompanying financial statements are of a normal recurring nature.  Reclassifications of certain amounts for prior years have been recorded to conform to the current year presentation.

The condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s annual report on Form 10-K for the year ended December 31, 2004 filed with the Securities and Exchange Commission.  The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year.

2.

Earnings Per Share

Basic and diluted earnings per share have been computed as follows:

(in thousands, except per share amounts)		Quarters Ended  June 30				Six Months Ended  June 30
		2005 (2)		2004 (3)		2005 (2)		2004 (3)
Net income	$	861	$	34,041	$	9,041	$	51,857
Weighted-average shares outstanding – basic		82,714		81,799		82,474		81,779
Effect of dilutive securities:
Stock options		166		147		198		178
Other, principally contingent stock rights		320		265		298		254
Weighted-average shares outstanding – diluted (1)		83,200		82,211		82,970		82,211
Basic earnings per share	$	.01	$	.42	$	.11	$	.63
Diluted earnings per share		.01		.41		.11		.63

(1)	The diluted average shares outstanding have been determined using the treasury stock method, which assumes the proceeds from the exercise of outstanding options were used to repurchase shares at the average market value of the stock during the quarter.
(2)	For the quarter and six months ended June 30, 2005, options to purchase 9.4 million shares at an average price of $52.90 and 9.1 million shares at an average price of $53.34, respectively, have been excluded from the diluted earnings per share calculation because the options’ exercise prices were greater than the average market price during the quarter and six months and to include such securities would be antidilutive.
(3)	For the quarter and six months ended June 30, 2004, options to purchase 7.8 million shares at an average price of $55.89 and 7.6 million shares at an average price of $55.99, respectively, have been excluded from the diluted earnings per share calculation because the options’ exercise prices were greater than the average market price during the quarter and six months and to include such securities would be antidilutive.

6

3.

Stock-based Compensation Plans

The Company accounts for its stock-based compensation in accordance with Accounting Principles Board Opinion No. 25 (APB 25), “Accounting for Stock Issued to Employees,” and its related interpretations.  Had the Company’s stock-based compensation been determined by the fair-value based method of SFAS 123, “Accounting for Stock-Based Compensation,” the Company’s net income and earnings per share would have been as follows:

(in thousands, except per share amounts)		Quarters Ended  June 30						Six Months Ended  June 30
		2005			2004			2005			2004
Net income, as reported	$	861		$	34,041		$	9,041		$	51,857
Add: Stock-based compensation expense
included in reported net income, net of taxes		991			1,576			3,020			3,657
Deduct: Total stock-based compensation expense
determined under fair-value based method for
all awards, net of taxes		(1,428	)		(4,785	)		(4,322	)		(10,313	)
Adjusted net income	$	424		$	30,832		$	7,739		$	45,201
Basic earnings per share:
As reported	$	.01		$	.42		$	.11		$	.63
Adjusted		.01			.38			.09			.55
Diluted earnings per share:
As reported	$	.01		$	.41		$	.11		$	.63
Adjusted		.01			.38			.09			.55

The following table provides the estimated fair value, under the Black-Scholes option-pricing model, of each option granted in 2005 and 2004 and the significant weighted-average assumptions used in their determination.

Stock Options:		Fair Value	Risk-Free Interest Rate	Dividend Yield	Expected Life	Volatility
2005	$	9.53	3.7%	2.4%	5.0 years	27.7%
2004	$	13.45	3.0%	1.7%	5.0 years	29.0%

In December 2004, the FASB issued Statement of Financial Accounting Standards No. 123 (revised 2004), "Share-Based Payment" (SFAS 123R).  This statement eliminates the alternative to apply the intrinsic value measurement provisions of APB 25 to stock compensation awards issued to employees.  Rather, SFAS 123R requires companies to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. That cost will be recognized in the consolidated statements of income over the period during which an employee is required to provide services in exchange for the award, usually the vesting period.  There are various methods of adopting SFAS 123R and the Company has not yet determined which method it will use.  SFAS 123R will be effective for the Company beginning January 1, 2006.

7

4.

Acquisitions and Dispositions

2005:

Acquisition of MarketWatch

On January 21, 2005, the Company completed its acquisition of MarketWatch, Inc. (MarketWatch) for a purchase price of approximately $538 million.  The purchase price consisted of cash tendered totaling $507.7 million to acquire the 28.2 million outstanding common shares of MarketWatch; the exchange of 1.2 million stock options valued at $25 million using the Black-Scholes option pricing model; and, direct third party transaction costs of approximately $5 million.  This acquisition was financed by $439 million of short-term commercial paper borrowings and cash, including cash received from MarketWatch of $74 million.  In February 2005, the Company refinanced $225 million of its commercial paper borrowings with three-year bonds bearing a fixed interest rate of 3.875%.

MarketWatch is a leading provider of business news, financial information and analytical tools and operates two award-winning Web sites: MarketWatch.com and BigCharts.com.  These free, advertising-supported sites serve approximately seven million unique visitors per month with timely market news and information.  MarketWatch also operates the MarketWatch Information Services group, which is a leading licensor of market news, data, investment analysis tools and other online applications to financial services firms, media companies and corporations.  The Company is integrating MarketWatch into the Consumer Electronic Publishing business.  

The Company believes that the MarketWatch acquisition will complement The Wall Street Journal Online network, which provides premium business news to about three million unique visitors per month.  By combining the traffic of The Wall Street Journal network of sites and MarketWatch, the Web sites are expected to have nearly nine million unique visitors per month. These factors contributed to a purchase price in excess of the fair market value of the net tangible and intangible assets acquired from MarketWatch, and as a result, the Company recorded goodwill in connection with this transaction.

Under the purchase method of accounting, the total purchase price is allocated to MarketWatch’s net tangible and intangible assets based upon their estimated fair value as of the date of completion of the merger.  Based upon the purchase price and the valuation performed, the preliminary purchase price allocation, which is subject to change based on the Company’s final analysis, is as follows (in thousands):

Tangible assets:
Current assets	$	89,227
Property, plant and equipment		4,030
Other assets – long term		15,749
Total tangible assets		109,006
Intangible assets:
Customer relationships		15,000
Developed technology		13,211
Trade name		29,000
Goodwill		410,901
Total intangible assets		468,112
Liabilities assumed:
Current liabilities		(39,375	)
Total liabilities assumed		(39,375	)
Net assets acquired	$	537,743

8

The Company has allocated $28.2 million to amortizable intangible assets consisting of customer-related intangible assets and developed technology with weighted-average useful lives of six and four years, respectively.  The pattern of economic benefits to be derived from certain intangible assets is estimated to be greater in the initial period of ownership; accordingly, the Company has recorded accelerated amortization expense for certain intangible assets.  Further, $29 million has been allocated to trade names and $410.9 million to goodwill, which will not be amortized.  Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired, and is not deductible for tax purposes.  

The purchase price allocation for MarketWatch is subject to revision as more detailed analysis is completed and additional information on the fair values of MarketWatch’s assets and liabilities becomes available.  Any change in the fair value of the net assets of MarketWatch will change the amount of the purchase price allocated to goodwill.  Liabilities assumed include approximately $9.8 million of restructuring costs consisting of $3.2 million of charges related to severance of approximately 50 MarketWatch employees and other contractual commitments.

Exchange of Cross Shareholdings

During the second quarter of 2005, the Company and the von Holtzbrinck Group completed its exchange of cross shareholdings.  In exchange for the Company’s 10% interest in Handelsblatt, the Company received the remaining 10% minority interest in The Wall Street Journal Europe that it did not already own; an 11.5% increase in its interest in a Czech Republic business periodical, effectively increasing the Company’s interest to 23%; and, $6 million in cash.  The transaction was accounted for at fair value and the Company recorded a gain of $13.2 million ($8.3 million, net of taxes) in connection with the disposal of its interest in Handelsblatt.

Based on preliminary estimates, the step acquisition of the remaining 10% of The Wall Street Journal Europe resulted in a purchase price allocation to goodwill of $4.4 million and other intangibles of $1.7 million.  The other intangibles consisted of advertising accounts valued at $0.7 million and subscription accounts valued at $0.1 million.  These intangibles will be amortized on a straight-line basis over 8 years.  The remaining $0.9 million represented acquired masthead which has an indefinite life.

Disposition of F.F. Soucy

In April 2005, the Company concluded the sale of its 39.9% minority interest in F.F. Soucy Inc., a Canadian newsprint mill, to its majority owner, Brant-Allen Industries, Inc.  The sales price of $40 million resulted in a gain of $9.6 million ($9.4 million, net of taxes) in the second quarter.  As part of the sale the Company provided Brant-Allen a limited indemnification for certain income tax exposure.  The Company estimated its obligation under this indemnification to be $2.2 million and recorded this amount as a contingent liability and a reduction to the gain on sale. 

2004:

Acquisition of remaining interest in OsterDow Jones

On July 7, 2004, the Company acquired the remaining two-thirds interest in OsterDow Jones Commodity News for $1.6 million.  The new operation, “Dow Jones Commodities Service,” was combined with the Company’s Dow Jones Newswires business.  The step acquisition resulted in a purchase price allocation to goodwill of $1.4 million and tangible assets of $0.2 million.

Acquisition of remaining interest in VWD news operations

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.  The Company was a minority shareholder in VWD.  

Disposition of non-news assets of VWD

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 the Company of $6.7 million.  As a result of this sale, the Company recorded a gain of $3.3 million ($1.8 million, net of taxes) in the second quarter of 2004.    Following the transaction, the Company had no involvement in the continuing operations of the disposed business.  The consideration was received at the time of the sale and a gain was recognized pursuant to the guidance in Staff Accounting Bulletin Topic 5E.

9

Acquisition of Alternative Investor

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.  

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.

Supplemental Pro-forma Information

The following unaudited pro forma information presents a summary of the results of operations of the Company assuming the acquisitions of MarketWatch (acquired January 21, 2005), OsterDow Jones (acquired July 7, 2004), VWD (acquired April 2, 2004) and Alternative Investor (acquired March 19, 2004) occurred at the beginning of each period (in thousands, except per share amounts):

		Quarters Ended June 30				Six Months Ended June 30
		2005		2004		2005		2004
Net revenues	$	454,198	$	458,514	$	870,176	$	886,223
Net income	$	861	$	32,198	$	8,770	$	47,533
Net income per share – basic	$	.01	$	.39	$	.11	$	.58
Net income per share – diluted	$	.01	$	.39	$	.11	$	.58

5.

Write-down of Equity Investments

In July 2005, the Company and NBC Universal agreed to transfer the Company’s 50% interests in both CNBC Europe and CNBC Asia (collectively CNBC International), as well as its 25% interest in CNBC World, to NBC Universal as of December 31, 2005 for nominal consideration, subject to any necessary regulatory or legal approvals.  The transfer of the Company’s interest in CNBC Asia also requires the mutually satisfactory resolution of certain structural matters which are expected to be completed prior to December 31, 2005.

Under the agreement, the Company will fund CNBC International for the remainder of 2005, up to approximately $6 million, irrespective of the operating performance of the ventures, and through 2006 the Company will continue to provide access to news resources and other services to CNBC International, nonexclusively.  There are no plans to alter the licensing relationship in the U.S. between the Company and CNBC.

As of June 30, 2005, in connection with the binding agreement reached with NBC Universal, the Company determined that an other-than-temporary decline in the value of its investments in CNBC International and CNBC World had occurred and, as a result, the Company recorded a charge of $35.9 million ($36.7 million, including taxes) in the second quarter of 2005, largely reflecting the write-down of the investments’ carrying value ($32 million), with the remainder primarily reflecting the additional firmly committed cash payment for which there is no future economic benefit to the Company.

6.

Cash Dividends Declared Per Share

The Company currently pays a $.25 per share dividend each quarter.  Typically, the Company declares its third quarter dividend in its second quarter.

10

7.

Goodwill and Other Intangible Assets

Goodwill balances by reportable segment were as follows:

(in thousands)		June 30 2005		December 31 2004
Print publishing	$	37,840	$	33,403
Electronic publishing		511,039		100,138
Community newspapers		112,017		112,017
Total goodwill	$	660,896	$	245,558

Other intangible assets were as follows:

		June 30, 2005					December 31, 2004
(in thousands)		Gross  Carrying Amount		Accumulated Amortization		Net Amount		Gross Carrying Amount		Accumulated Amortization		Net Amount
Subscription accounts	$	29,048	$	7,804	$	21,244	$	21,004	$	5,435	$	15,569
Advertising accounts		20,112		3,612		16,500		13,448		2,143		11,305
Developed technology		13,211		1,529		11,682		-		-		-
Other		3,021		823		2,198		2,021		533		1,488
Total		65,392		13,768		51,624		36,473		8,111		28,362
Unamortizable intangibles		90,507		-		90,507		60,525		-		60,525
Total other intangibles	$	155,899	$	13,768	$	142,131	$	96,998	$	8,111	$	88,887

Amortization expense, based on intangibles subject to amortization held at June 30, 2005, is expected to be $6.2 million for the last six months of 2005, $11.7 million in 2006, $10.5 million in 2007, $7.8 million in 2008, $4.0 million in 2009 and $3.6 million in 2010.

8.

Debt

The following table summarizes the Company’s debt outstanding:

		June 30		December 31
(in thousands)		2005		2004
Commercial paper, at rates of 2.935% to 3.375%	$	292,158	$	145,843
3.875% Senior Notes due February 15, 2008		224,911		-
Total debt outstanding	$	517,069	$	145,843

Debt outstanding at June 30, 2005 was $517.1 million which consisted of 3-year bonds totaling $224.9 million and commercial paper of $292.2 million with various maturities of less than a year.  As of June 30, 2005, the Company could borrow up to $440 million, $140 million through June 24, 2006 and $300 million through June 24, 2009 under its multiyear revolving credit agreements with several banks.  It is currently the Company’s intent to manage its commercial paper borrowings as short-term obligations.    

The revolving credit agreements contain restrictive covenants, including a limitation on the ratio of consolidated indebtedness to consolidated cash flow and a requirement to maintain a minimum ratio of consolidated cash flow to consolidated interest expense.  At June 30, 2005, the Company was in compliance with respect to both of these restrictive covenants then in effect.  Borrowings may be made either in Eurodollars with interest that approximates the applicable Eurodollar rate or in U.S. dollars with interest that approximates the bank's prime rate, its certificate of deposit rate or the federal funds rate.  A quarterly fee is payable on the commitment which the Company may terminate or reduce at any time.  The quarterly fee, which is dependent on the Company’s debt rating issued by S&P and Moody's, ranges from .08% to .10%.  As of June 30, 2005 and December 31, 2004, no amounts were borrowed und er the revolving credit lines.  The Company intends to extend the revolving credit agreements prior to their expiration.

11

9.

Restructuring Charges

In the second quarter of 2005, the Company recorded a restructuring charge of $11.4 million primarily reflecting employee severance related to a workforce reduction of about 120 full-time employees.  Most of the charge relates to the Company’s efforts to reposition its international print and online operations but also included headcount reductions at other parts of the business.  These workforce reductions are expected to be substantially completed by the end of the year.

The estimated employee severance payments described below were based on predetermined criteria of existing benefit plans and were therefore recorded when the liability was considered probable and reasonably estimable as required by SFAS 112 “Employers’ Accounting for Postemployment Benefits”.

The following table displays the activity and balances of the restructuring reserve accounts through June 30, 2005:

(in thousands)		December 31 2004   Reserve		2005 Expense		Cash Payments			June 30 2005 Reserve
Employee severance – 2005	$	-	$	11,367	$	(386	)	$	10,981
Employee severance – 2004		7,262		-		(2,976	)		4,286	*
Total	$	7,262	$	11,367	$	(3,362	)	$	15,267

*The workforce reductions related to this restructuring initiative are complete.  The remaining reserve relates primarily to continuing payments for employees that have already been terminated.

Reversal of Lease Obligation Reserve – World Financial Center (WFC)

On September 11, 2001, the Company’s headquarters at the World Financial Center sustained damage from debris and dust as a result of the terrorist attacks on the World Trade Center.  Approximately 60% of the floor space, including furniture and related equipment, had been determined a total loss.  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 to abandon four of seven floors that were leased at its World Financial Center headquarters.  This charge primarily reflected the Company’s rent obligation through May 2005 on this vacated space.

During the first quarter of 2004, the Company decided to extend the term of its lease for one of the floors that was previously abandoned and reoccupy this floor with personnel from another of its New York locations, whose lease term was expiring.  As a result, the Company reversed $2.8 million of the remaining lease obligation reserve for the previously abandoned floor at WFC.

10.

Contract Guarantee

In 1998, the Company completed the sale of its former subsidiary, Telerate, to Bridge Information Systems, Inc. (Bridge).   Under the terms of the sale, the Company retained its guarantee of payments under certain circumstances of certain annual minimum payments for data acquired by Telerate from Cantor Fitzgerald Securities (Cantor) and Market Data Corporation (MDC) under contracts entered into during the period when Telerate was a subsidiary of the Company (contract guarantee).  The annual minimum payments average approximately $50 million per year through October 2006 under certain conditions.  Bridge agreed to indemnify the Company for any liability the Company incurred under the contract guarantee with respect to periods subsequent to Bridge's purchase of Telerate.  However, Bridge filed for bankruptcy protection on February 15, 2001, after unsuccessful attempts to reorganize its operations and arrange for additional financing.

The Company believes that Cantor and MDC have the obligation to cover, mitigate or otherwise reduce and/or avoid any losses or damages under these circumstances, including by securing the best possible commercial terms for the supply of the subject data to a third party or parties.  Cantor and MDC deny that they have this obligation.  The Company believes that any and all amounts which are received by Cantor and/or MDC in respect of such data would reduce any liability that the Company might have under the contract guarantee.  As of December 31, 2000, there was a high degree of uncertainty, however, as to what value the data might have in the marketplace; whether an agreement would be reached by Cantor and/or MDC to supply the data to a third party or parties, the financial position of such party or parties; the timing of any such agreement, and various related factors.  Therefore, it was not possible for the Company to determine with any certainty that any such offsets would in fact be realized, or at what time or in what amounts.  Consequently, in December 2000, the Company established a reserve in the amount of $255 million representing the present value of the total estimated annual minimum payments of about $300 million over the remainder of the contract (through October 2006 and using a discount rate of approximately 6%).  In 2001, a portion of this obligation was subsequently paid by Bridge during its bankruptcy proceedings and the Company adjusted its reserve accordingly.

12

The second quarter of 2005 and 2004 included charges related to the accretion of the discount on the reserve balance of $1.1 million and $1.8 million, respectively.  These charges totaled $2.4 million and $3.8 million in the first half of 2005 and 2004, respectively.   The reserve balance as of June 30, 2005 is $263.1 million, of which $250.9 million is classified as current based on the original due dates of the contract.  

On November 13, 2001, the Company instituted a lawsuit in the Supreme Court of the State of New York against MDC and Cantor seeking a declaratory judgment with respect to the Company’s obligations, if any, under the guarantee.  In this lawsuit the Company has asked the court to find that the Company does not and will not owe any payment under the contract guarantee through October 2006.  In the alternative, the Company has asked the court to find that if any amount is owed, it must be reduced by amounts that Cantor and MDC receive or should have received from other distribution of the data. MDC has asserted counterclaims demanding payment of $10.2 million (allegedly the balance owed by Telerate on November 15, 2001), interest, attorneys’ fees, specific performance of the guarantee, and a declaratory judgment as to the validity and interpretation of the guarantee through October 2006.  

Cantor also commenced a separate lawsuit in the Supreme Court of the State of New York (since consolidated with the Company’s case) seeking payment of $10 million (allegedly the balance of the November 2001 minimum payment), payment of $250 million in breach of contract damages, specific performance of the guarantee, a declaration that the guarantee remains in full force and effect, payment of approximately $16 million allegedly owed by Telerate and guaranteed by the Company in the guarantee for the distribution of certain other data, attorneys' fees, interest and other relief.

The trial court in January 2003 denied motions by each of the parties that their own claims for relief be granted and that competing claims be dismissed.  Appeals from those decisions were not pursued, and discovery has concluded.  Dispositive motions have been fully briefed for the court.  The trial previously scheduled to begin in June 2005 has been adjourned and no new trial date has been set.  

Due to the stage of the lawsuit at June 30, 2005, it is not possible to determine whether the court will find that any obligation the Company had under the guarantee may be dismissed or reduced.  Accordingly, the Company believes the balance of the reserve continues to be appropriate.  

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.

13

11.

Other Guarantees and Contingencies

In addition to the litigation that is separately disclosed in Note 10 of this Form 10-Q, there are various libel actions, legal proceedings and other matters that have arisen in the ordinary course of business that represent possible contingencies of the Company and its subsidiaries.  In the opinion of management, based on advice of legal counsel, the ultimate outcome to the Company and its subsidiaries as a result of these legal proceedings and other matters will not have a material effect on the Company’s financial statements.  In addition, the Company has insurance coverage for many of these matters.

The Company’s bylaws provide for indemnification of officers and directors prosecuted in a criminal action or sued in a civil action or proceeding to the full extent permitted by the Delaware General Corporation Law.  The maximum potential amount of future payments the Company could be required to make under these indemnification provisions is unlimited; however, the Company maintains directors' and officers' liability and corporation reimbursement insurance for the benefit of the Company and its directors and officers.  The policy provides coverage for certain amounts paid as indemnification pursuant to the provisions of Delaware law and the Company’s bylaws.  As a result of its insurance coverage, the Company believes that the estimated fair value of these indemnification provisions is minimal.

The Company enters into indemnification agreements in its ordinary course of business, typically with companies from which it is acquiring or to which it is selling businesses, partners in joint ventures, licensees and licensors, and service providers and contractors.  Under these agreements the Company generally indemnifies, holds harmless, and agrees to reimburse the indemnified party for losses suffered or incurred by the indemnified party, as a result of the Company’s activities or its breach of the agreement in question or in connection with any intellectual property infringement claim by any third party with respect to the Company's products.  These indemnification obligations generally survive termination of the underlying agreement, either for some set number of years or perpetually.  In some cases, the maximum potential amount of future payments the Company could be required to make under these indemnification obligations is unli mited. The Company believes that the estimated fair value of these indemnity obligations is minimal and as of June 30, 2005 the Company has approximately $2 million recorded for these obligations.  The Company has not incurred material costs to defend lawsuits or settle claims related to these indemnification provisions.

The Company has guaranteed payment for office space occupied by certain of its joint ventures.  Partners of the Company in these joint ventures have either directly guaranteed their share of any payments required under these guarantees or agreed to indemnify the Company for 50% of any payments the Company may be required to make under these guarantees.  The Company’s share of this obligation totals $6.8 million through 2010.

12.

Pension and Other Postretirement Plans

The components of net periodic benefit costs were as follows:

		Quarters Ended June 30
(in thousands)		Pension Benefits						Other Postretirement Benefits
		2005			2004			2005			2004
Service cost	$	1,425		$	1,292		$	2,164		$	1,539
Interest cost		2,569			2,522			3,478			2,823
Expected return on plan assets		(3,281	)		(3,280	)		-			-
Amortization of prior service cost		183			181			(388	)		(305	)
Recognized actuarial loss		355			194			574			2
Total benefit cost	$	1,251		$	909		$	5,828		$	4,059

		Six Months Ended June 30
(in thousands)		Pension Benefits						Other Postretirement Benefits
		2005			2004			2005			2004
Service cost	$	2,850		$	2,624		$	4,700		$	3,982
Interest cost		5,138			5,076			7,206			6,472
Expected return on plan assets		(6,562	)		(6,560	)		-			-
Amortization of prior service cost		366			352			(811	)		(638	)
Recognized actuarial loss		710			327			1,189			487
Total benefit cost	$	2,502		$	1,819		$	12,284		$	10,303

14

13.

Comprehensive Income

Comprehensive income was computed as follows:

(in thousands)		Quarters Ended  June 30						Six Months Ended  June 30
		2005			2004			2005			2004
Net income	$	861		$	34,041		$	9,041		$	51,857
Add: change in
Adjustment for realized cumulative
translation adjustment in net income		(2,217	)		-			(2,217	)		-
Cumulative translation adjustment		176			708			(48	)		328
Adjustment for realized loss (gain) on
hedging included in net income		181			106			422			(127	)
Unrealized loss on hedging		(805	)		(457	)		(1,663	)		(188	)
Unrealized gain (loss) on investments		619			(1,468	)		(398	)		(587	)
Comprehensive (loss) income	$	(1,185	)	$	32,930		$	5,137		$	51,283

14.

Business Segments

The Company reports the results of its operations in three segments: print publishing, electronic publishing and community newspapers.  In addition, the Company reports certain administrative activities under the corporate segment.

Print publishing, which is largely comprised of the global editions of The Wall Street Journal, publishes business and financial content world-wide.  This content is published primarily in the U.S., Europe, Asia and Latin America editions of The Wall Street Journal and on U.S. television through a licensing arrangement with CNBC.  The Company manages the global Journal operations as one segment as their products comprise the global Journal brand, and there are significant interrelationships within the editions including global management, shared news flows and workforce and a global advertising customer base, sales force and pricing.  U.S. television, which represents a licensing agreement with NBC Universal to provide branding, news content and on-air expertise to CNBC, is a further extension of the Journal brand and content.  The Company also includes the operations of Barron’s within print publishing instead o f reporting them separately because of their relative immateriality to the Company’s results on a consolidated basis and because Barron’s shares services with and its operations are similar to the global Journal.

Electronic publishing, which electronically distributes business and financial news and information, includes the operations of Dow Jones Newswires, Consumer Electronic Publishing and Dow Jones Indexes/Ventures, all of which are expected to have similar long-term economic characteristics.  Consumer Electronic Publishing includes the results of WSJ.com and its related vertical sites, MarketWatch and the Company’s licensing/business development and radio/audio businesses.  Revenues in the electronic publishing segment are mainly subscription-based.  The community newspapers segment publishes 15 daily newspapers, 12 Sunday papers and more than 30 weekly newspapers and “shoppers” in nine states in the U.S.

For both the three and six month periods ended June 30, 2005, approximately 52% of the Company’s revenues were derived from the print publishing segment, which is largely comprised of the global editions of The Wall Street Journal.  In addition, for the same periods, the electronic publishing segment, which includes newswires, online publishing, indexes and other electronic operations, comprised approximately 28% of the Company’s revenue, while the remaining approximately 20% of total revenues were contributed from our general-interest community newspapers segment.

Management evaluates the performance of its segments exclusive of restructuring charges.  See Note 9 for a further discussion of these items.

15

The Company’s operations by business segment were as follows:

(in thousands)		Quarters Ended  June 30						Six Months Ended  June 30
		2005			2004			2005			2004
Revenues (1):
Print publishing	$	235,485		$	253,761		$	452,216		$	491,336
Electronic publishing		128,423			96,214			245,602			182,583
Community newspapers		90,290			87,815			168,452			165,492
Consolidated revenues	$	454,198		$	437,790		$	866,270		$	839,411
Income before income taxes and minority interests:
Print publishing	$	7,224		$	17,289		$	170		$	21,913
Electronic publishing		29,385			22,947			50,848			41,460
Community newspapers		22,603			25,161			35,933			42,133
Corporate		(8,949	)		(9,107	)		(19,719	)		(18,218	)
Segment operating income		50,263			56,290			67,232			87,288
Restructuring charges (2)		(11,367	)		-			(11,367	)		2,761
Consolidated operating income		38,896			56,290			55,865			90,049
Interest expense		(4,903	)		(800	)		(8,912	)		(1,448	)
Equity in earnings of associated companies (3)		1,832			2,139			2,566			1,399
Write-down of equity investments		(35,865	)		-			(35,865	)		-
Gain on disposition of investments		22,862			3,260			22,862			3,260
Contract guarantee		(1,117	)		(1,819	)		(2,416	)		(3,804	)
Other (expense) income, net		(296)			(334	)		1,338			(1,009	)
Income before income taxes and minority interests	$	21,409		$	58,736		$	35,438		$	88,447
Depreciation and amortization (D&A):
Print publishing	$	13,714		$	16,866		$	28,590		$	34,542
Electronic publishing		9,538			6,950			18,775			13,610
Community newspapers		3,080			2,839			6,020			5,818
Corporate		38			43			75			83
Consolidated D&A	$	26,370		$	26,698		$	53,460		$	54,053
(1) Revenues shown represent revenues from external customers.  Transactions between segments are not significant.

⁽²⁾ Restructuring charges are not included in segment expenses, as management evaluates segment results exclusive of these items.  For information purposes, the restructuring charge in 2005 and the reversal of the lease obligation reserve in 2004 allocable by segment for the quarters and six months ended June 30, 2005 and 2004 were as follows:

(in thousands)		Quarters Ended June 30				Six Months Ended June 30
		2005		2004		2005		2004
Print Publishing	$	8,585	$	-	$	8,585	$	(2,631	)
Electronic Publishing		1,969		-		1,969		(125	)
Corporate		813		-		813		(5	)
Total	$	11,367	$	-	$	11,367	$	(2,761	)

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⁽³⁾ Summarized income statement information for the Company's equity-basis investments in associated companies, combined, was as follows (these amounts are in aggregate at 100% levels).  The majority of these investments are partnerships, which require the associated tax benefit or expense to be recorded by the partner.

(in thousands)		Quarters Ended June 30				Six Months Ended June 30
		2005		2004		2005		2004
Revenues	$	129,123	$	133,521	$	267,367	$	259,000
Operating income		8,342		5,638		10,144		7,646
Net income		5,080		4,943		4,572		4,473

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

Dow Jones & Company is a provider of global business and financial news and information through newspapers, newswires, magazines, the Internet, indexes, television and radio.  In addition, the Company owns general-interest community newspapers throughout the U.S.  In the quarter, approximately 52% of the Company’s revenues were derived from the print publishing segment, which is largely comprised of the global editions of The Wall Street Journal.  The Company’s overall financial results are largely dependent on the operating performance of The Wall Street Journal, which, to a significant extent, is dependent upon business-to-business (B2B) advertising placed in its publications, particularly from the financial and technology sectors.  The electronic publishing segment, which includes newswires, online publishing, indexes and other electronic operations, comprises approximately 28% of the Company’s revenue, while the remaining approximately 20% of total revenues are contributed from our general-interest community newspapers segment.

The global business-to-business advertising recession continued to persist in the first half of 2005 and constrain our largest business, print publishing, where revenue declined 8%, driven by a 7% decline in linage at the U.S. Wall Street Journal.  We do however see this situation improving in the second half of 2005 as advertising comparisons to the prior year ease and we are seeing increased advertising plans from B2B finance and technology advertisers.   We continue to control our costs, and make disciplined investments in a number of major new initiatives and rationalize under-performing assets to reshape our portfolio, diversify our advertising categories to reduce our reliance on B2B advertising, improve the quality of our products and set the stage for future growth.  Investments in future growth initiatives include our planned launch in September 2005 of the Weekend Edition of the Journal and our January 200 5 acquisition of MarketWatch, both of which we believe will help us diversify and reduce our reliance over time on B2B financial and technology print advertising.  

In September 2004, we announced the September 2005 launch of the Weekend Edition of the Journal, which is a key element of our 2005 to 2007 strategic plan.  We expect the launch of the Weekend Edition will build off the success of our Weekend Journal and Personal Journal sections in growing and diversifying our advertising customer base by attracting more consumer-oriented advertisers as revenue from the Weekend Edition is expected to include a higher mix of consumer advertising.  We have a uniquely influential and affluent audience that not only makes large B2B spending decisions but also spends heavily on personal consumption items.  The Weekend Edition will enable advertisers to reach these readers in the right place at the right time – at home on the weekend – which is highly conducive to influencing their consumer spending decisions.  While it is expected that this initiative will be dilutive to earnings by about 15 cents p er share in 2005, we believe that the Weekend Edition will be a major driver of long-term growth in revenue and earnings.

On January 21, 2005, we completed the acquisition of MarketWatch, Inc. (MarketWatch) for a purchase price of approximately $538 million, including certain transaction costs, significantly expanding our participation in online publishing.  MarketWatch is a leading provider of business news, financial information and analytical tools and operates two award-winning Web sites: MarketWatch.com and BigCharts.com.  These free, advertising-supported sites serve approximately seven million unique visitors per month with timely market news and information.  MarketWatch also operates the MarketWatch Information Services group, which is a leading licensor of market news, data, investment analysis tools and other online applications to financial services firms, media companies, and corporations.  MarketWatch is being integrated into our Consumer Electronic Publishing business.  The Company believes that the MarketWatch merger will c omplement The Wall Street Journal Online network, which provides premium business news to about three million unique visitors per month.  By combining the traffic of The Wall Street Journal network of sites and MarketWatch, the Web sites are expected to have nearly nine million unique visitors per month.  We expect this acquisition will be dilutive to earnings by five cents per share in 2005, reflecting higher interest and amortization costs, and is then expected to be accretive in our first full year of ownership in 2006, when our integration benefits are effective for the full year.

In the second quarter 2005, we undertook a number of other initiatives to reshape our portfolio and to increase profits for the Company.  At our international print editions of the Journal, we plan to reformat the editions on October 17, 2005 into an easier to read, convenient compact format, as well as better integrating these print editions with The Wall Street Journal Online at WSJ.com to better serve the needs of highly mobile international business leaders.  We recorded a restructuring charge of about $11 million related to this and other reorganizations at other businesses in the quarter.  We expect this international repositioning will yield pretax savings of $17 million annually and $5 million in the last half of 2005.  We also entered into an agreement to exit our unprofitable television partnerships with CNBC in Europe and Asia and in a digital U.S. channel, CNBC World, by the end of this year, while maintaining ou r profitable television licensing relationship with CNBC in the U.S.  The exit from these partnerships is expected to eliminate about $15 million of annual pretax equity losses.  Also in the quarter we sold our non-strategic minority interest in a Canadian newsprint mill for $40 million, which reduced our outstanding debt while only modestly reducing equity earnings.

18

Finally, one of the more public measures of quality is Pulitzer prizes and we are very proud to have won two additional prizes this year, one for health care coverage and the other for film criticism.  These awards represent our 30^th and 31^st Pulitzers, and they are especially pleasing as they represent areas of the Business of Life coverage that will be expanded with the launch of the Weekend Edition of the Journal.

Consolidated Results of Operations

Quarter ended June 30, 2005 compared to quarter ended June 30, 2004:

						% Increase/
(in thousands, except per share amounts)		2005			2004	(Decrease)
Revenues:
Advertising	$	249,876		$	255,836	(2.3	)%
Information services		103,590			81,518	27.1
Circulation and other		100,732			100,436	0.3
Total revenues		454,198			437,790	3.7
Operating expenses		415,302			381,500	8.9
Operating income		38,896			56,290	(30.9	)
Non-operating (loss) income*		(17,487	)		2,755	-
Income taxes		20,548			25,004	(17.8	)
Net income	$	861		$	34,041	(97.5	)
Earnings per share:
Basic	$	.01		$	.42	(97.6	)
Diluted		.01			.41	(97.6	)
*Net of minority interests.

Net Income

Net income in the second quarter of 2005 was $0.9 million, or $.01 per diluted share, compared with second quarter 2004 net income of $34 million, or $.41 per share (all “per share” amounts included herein are based on reported net income and use diluted weighted-average shares outstanding).  Earnings per share for the second quarter of 2005 included certain items affecting comparisons that netted to a reduction in earnings of $.33 per share, while earnings in 2004 included certain items affecting comparisons that had no net effect on earnings per share.  These items are detailed further beginning on page 28.

Revenues

Second quarter revenues increased $16.4 million, or 3.7%, to $454.2 million, reflecting the impact of recent acquisitions, which was partially offset by revenue declines at print publishing.  On a “same property” basis, meaning excluding properties acquired in the past 12 months, total revenue decreased 1.1%.  Advertising revenue declined 2.3%, primarily the result of lower advertising volume at print publishing tempered by incremental advertising revenue from acquisitions, existing electronic operations and community newspapers.  Information services revenues grew 27.1%, reflecting incremental revenue from acquisitions as well as organic growth across electronic publishing.  Circulation and other revenue was up slightly on modestly higher subscription revenue at The Wall Street Journal (U.S.), higher reprint and other revenues despite lower revenues from the Far Eastern Economic Review (FEER) due to its reposition ing as a monthly publication.

Operating Expenses

Operating expenses in the second quarter of 2005 increased $33.8 million, or 8.9%, to $415.3 million, primarily reflecting an $11.4 million restructuring charge, incremental costs from newly-acquired properties (approximately five percentage points of the increase) and higher newsprint costs.  Newsprint costs increased 7.4%, driven by an 8.1% increase in the average cost per ton, partially offset by a 0.6% decline in consumption.  The number of full-time employees at June 30, 2005, was about 7,400 as compared to about 7,100 last June.  Excluding recent acquisitions, the number of full-time employees was down 1% compared to last year.

19

Operating Income

Operating income in the second quarter of 2005 was $38.9 million (8.6% of revenues), down $17.4 million, or 30.9%, from 2004 operating income of $56.3 million (12.9% of revenues), primarily reflecting the restructuring charge and a decline in profits at print publishing.

Consolidated Results of Operations

Six months ended June 30, 2005 compared to six months ended June 30, 2004:

							% Increase/
(in thousands, except per share amounts)		2005			2004		(Decrease)
Revenues:
Advertising	$	467,620		$	482,535		(3.1	)%
Information services		202,059			157,345		28.4
Circulation and other		196,591			199,531		(1.5	)
Total revenues		866,270			839,411		3.2
Operating expenses		810,405			749,362		8.1
Operating income		55,865			90,049		(38.0	)
Non-operating loss*		(20,427	)		(707	)	-
Income taxes		26,397			37,485		(29.6	)
Net income	$	9,041		$	51,857		(82.6	)
Earnings per share:
Basic	$	.11		$	.63		(82.5	)
Diluted		.11			.63		(82.5	)
*Net of minority interests.

Net Income

Net income for the first half of 2005 was $9 million, or $.11 per diluted share, compared with 2004 net income of $51.9 million, or $.63 per share (all “per share” amounts included herein are based on reported net income and use diluted weighted-average shares outstanding).  Earnings per share for the first half of 2005 included certain items affecting comparisons that netted to a reduction in earnings of $.34 per share, while earnings in 2004 included certain items affecting comparisons that had no net effect on earnings per share.  These items are detailed further beginning on page 28.

Revenues

Revenues for the first six months of 2005 increased $26.9 million, or 3.2%, to $866.3 million, reflecting the impact of recent acquisitions, which was partially offset by revenue declines at print publishing.  On a “same property” basis, meaning excluding properties acquired in the past 12 months, total revenue decreased 2.2%.  Advertising revenue declined $14.9 million, or 3.1%, primarily the result of lower advertising volume at print publishing tempered by incremental advertising revenue from acquisitions.  Information services revenues grew 28.4% largely reflecting incremental revenue from acquisitions and organic growth at WSJ.com and Dow Jones Indexes/Ventures.  Circulation and other revenue decreased $2.9 million resulting from a decline in circulation revenue at print publishing in part reflecting lower revenues from the Far Eastern Economic Review (FEER) due to its repositioning as a monthly publica tion.

Operating Expenses

Operating expenses in the first half of 2005 increased $61 million, or 8.1%, to $810.4 million, primarily reflecting the second quarter restructuring charge, incremental costs from newly-acquired properties (approximately six percentage points of the increase) and higher newsprint costs.  Newsprint costs increased 4.8%, driven by a 9.2% increase in the average cost per ton, partially offset by a 4.0% decline in consumption.  

20

Operating Income

Operating income in the second quarter of 2005 was $55.9 million (6.4% of revenues), down $34.2 million, or 38%, from 2004 operating income of $90 million (10.7% of revenues), primarily reflecting a decline in advertising revenue at print publishing and the second quarter 2005 restructuring charge.

Segment Data

The Company reports the results of its operations in three segments: print publishing, electronic publishing and community newspapers.  In addition, the Company reports certain administrative activities under the corporate segment.  

Print Publishing

Print publishing, which is largely comprised of the global editions of The Wall Street Journal, publishes business and financial content world-wide.  This content is published primarily in the U.S., Europe, Asia and Latin America editions of The Wall Street Journal and on U.S. television through a licensing arrangement with CNBC.  The Company manages the global Journal operations as one segment as their products comprise the global Journal brand, and there are significant interrelationships within the editions including global management, shared news flows and workforce and a global advertising customer base, sales force and pricing.  U.S. television, which represents a licensing agreement with NBC Universal to provide branding, news content and on-air expertise to CNBC, is a further extension of the Journal brand and content.  U.S. television contributes a significantly higher operating margin than the publications within t he segment since it largely represents incremental revenue for the global Journal content and branding.  The Company also includes the operations of Barron’s within print publishing instead of reporting them separately because of their relative immateriality to the Company’s results on a consolidated basis and because Barron’s shares services with and its operations are similar to the global Journal.

Quarter ended June 30, 2005 compared to quarter ended June 30, 2004:

(dollars in thousands)							% Increase/
		2005			2004		(Decrease)
Revenues
U.S. publications:
Advertising	$	149,885		$	165,535		(9.5	)%
Circulation and other		65,479			66,104		(0.9	)
Total for U.S. publications		215,364			231,639		(7.0	)
International publications:
Advertising		12,339			13,996		(11.8	)
Circulation and other		7,782			8,126		(4.2	)
Total for international publications		20,121			22,122		(9.0	)
Total revenue		235,485			253,761		(7.2	)
Operating expenses		228,261			236,472		(3.5	)
Operating income	$	7,224		$	17,289		(58.2	)
Operating margin		3.1	%		6.8	%
Included in expenses:
Depreciation and amortization	$	13,714		$	16,866		(18.7	)

21

Statistical information:
Advertising volume increase/(decrease):
The Wall Street Journal:
General	(5.1	)%	17.7	%
Technology	(18.1	)	(30.2	)
Financial	(14.5	)	5.3
Classified	5.6		10.5
Total U.S. Journal	(6.3	)	3.3
The Asian Wall Street Journal	(0.6	)	5.0
The Wall Street Journal Europe	(3.4	)	8.6
Barron’s	(8.3	)	21.1

Revenues

Second quarter 2005 revenue decreased $18.3 million, or 7.2%, to $235.5 million, primarily driven by continued softness in B2B advertising in the U.S. and overseas.  

U.S. advertising revenue decreased $15.7 million, or 9.5%, to $149.9 million, reflecting a 6.3% decline in advertising linage at The Wall Street Journal and lower television licensing revenue from CNBC.  General advertising, which represented about 43.1% of total U.S. Journal linage, decreased 5.1%, reflecting decreases in professional services, travel and pharmaceutical advertising, partially offset by higher auto advertising.  Technology advertising, which represented 14.2% of total U.S. Journal linage, decreased 18.1% in the quarter, due to continued softness in nearly all technology categories except for personal computer and office products advertising.  Financial advertising, which represented 16% of total U.S. Journal linage, decreased 14.5% as declines in wholesale and retail brokerage advertising more than offset the increase in tombstone advertising.  Classified and other advertising linage, which represented 26.7% of tot al U.S. Journal linage, increased 5.6%.  Color advertising revenue, which sells at a 28% premium, increased 11.1%.  

Circulation and other revenue for the U.S. print publications decreased $0.6 million, or 0.9%, to $65.5 million.  Average circulation for the second quarter of 2005 for The Wall Street Journal was 1,776,000 compared with circulation of 1,761,000 in the second quarter of 2004.  Barron’s average circulation was 294,000 in the quarter, a decrease of 1% from 297,000 in the second quarter 2004.  

International print publication revenues decreased $2 million, or 9% to $20.1 million.  Advertising revenue was down $1.7 million, or 11.8%, primarily as a result of lower revenues from FEER due to the repositioning that occurred during the fourth quarter of 2004 and lower advertising volume at the international Journal editions.  International print circulation and other revenues decreased $0.3 million, or 4.2%, to $7.8 million on lower revenue from FEER and lower average subscription rates at the international editions.  Combined average circulation for the international Journals was 185,000 in the second quarter of 2005 compared with 180,000 in the second quarter of 2004.

Expenses

Print publishing expenses in the quarter decreased $8.2 million, or 3.5%, to $228.3 million, as a result of certain cost reductions, including reductions from the repositioning of FEER, as well as lower compensation and depreciation expense.  Partially offsetting the cost reductions were higher marketing costs and other costs related to the up-coming launch of the Weekend Edition of the Journal and a 6.2% increase in newsprint costs, reflecting an 8.3% increase in newsprint prices partially offset by a 1.9% decline in consumption.  The number of full-time employees in the print publishing segment decreased 6% as compared to June 30, 2004.

Operating Income

Print publishing’s second quarter 2005 operating income was $7.2 million (3.1% of revenues) compared to income of $17.3 million (6.8% of revenues) in the second quarter of 2004, as profits in the U.S. were partially offset by international losses.

22

Six months ended June 30, 2005 compared to six months ended June 30, 2004:

(dollars in thousands)							% Increase/
		2005			2004		(Decrease)
Revenues
U.S. publications:
Advertising	$	285,501		$	316,717		(9.9	)%
Circulation and other		129,782			132,057		(1.7	)
Total for U.S. publications		415,283			448,774		(7.5	)
International publications:
Advertising		22,137			25,916		(14.6	)
Circulation and other		14,796			16,646		(11.1	)
Total for international publications		36,933			42,562		(13.2	)
Total revenue		452,216			491,336		(8.0	)
Operating expenses		452,046			469,423		(3.7	)
Operating income	$	170		$	21,913		(99.2	)
Operating margin		-	%		4.5	%
Included in expenses:
Depreciation and amortization	$	28,590		$	34,542		(17.2	)
Statistical information:
Advertising volume increase/(decrease):
The Wall Street Journal:
General		(2.1)	%		5.5	%
Technology		(19.1	)		(19.8	)
Financial		(19.9	)		24.5
Classified		3.7			9.2
Total U.S. Journal		(7.1	)		4.7
The Asian Wall Street Journal		(4.0	)		6.3
The Wall Street Journal Europe		(12.0	)		10.9
Barron’s		(10.6	)		21.5

Revenues

Print publishing revenue for the first six months of 2005 decreased $39.1 million, or 8%, to $452.2 million, which is primarily the result of softness in B2B advertising both in the U.S. and internationally. 

Advertising revenue in the U.S. decreased $31.2 million, or 9.9%, to $285.5 million, reflecting lower television revenue and a 7.1% decline in advertising linage at The Wall Street Journal, somewhat offset by improved advertising yield.  General advertising, which represented about 41.6% of total U.S. Journal linage, decreased 2.1% as declines in advertising for insurance, professional services, auto and travel exceeded the increases in advertising in the pharmaceuticals and luxury categories.  Continued softness in nearly all technology advertising categories, except for personal computer and office products, led to a 19.1% decrease year to date in technology advertising, which represented 14.6% of total U.S. Journal linage.  Financial advertising, which represented 17.3% of total U.S. Journal linage, decreased 19.9% reflecting declines in nearly all categories.  Classified and other advertising linage, which represented 26.5% of total U.S. Journal linage, increased 3.7%.  Circulation and other revenue for the U.S. print publications decreased $2.3 million, or 1.7%, to $129.8 million. 

23

Revenues year to date for international print publications decreased $5.6 million, or 13%, to $36.9 million.  The largest component of this change was the decrease in advertising revenue of $3.8 million, or 14.6%.  This was driven by lower revenues from FEER, which was repositioned during the fourth quarter of 2004, and lower advertising volume at the international editions of the Journal.  Circulation and other revenue for the international print publications decreased $1.9 million, or 11.1%, to $14.8 million. 

Expenses

For the first six months of 2005, print publishing expenses decreased $17.4 million, or 3.7%, to $452 million.  This reflects certain cost reductions, including reductions from the repositioning of FEER, as well as less compensation and depreciation expenses.  These expense reductions were partially offset by higher marketing costs and other costs related to the up-coming launch of the Weekend Edition of the Journal and a 3.7% increase in newsprint costs, which was driven by a 9.5% increase in newsprint prices, less a decline in consumption of 5.3%.

Operating Income

For the first half of 2005, operating income for print publishing was $0.2 million compared to $21.9 million (4.5% of revenues) in the first half of 2004, as losses internationally partially offset the profits in the U.S.

Electronic Publishing

Electronic publishing, which electronically distributes business and financial news and information, includes the operations of Dow Jones Newswires, Consumer Electronic Publishing and Dow Jones Indexes/Ventures, all of which are expected to have similar long-term economic characteristics.  Consumer Electronic Publishing includes the results of WSJ.com and its related vertical sites, MarketWatch and the Company’s licensing/business development and radio/audio businesses.  Revenues in the electronic publishing segment are mainly subscription-based.  

On January 21, 2005, the Company completed the acquisition of MarketWatch for a purchase price of approximately $538 million, including certain transaction costs.  The Company is integrating MarketWatch into the Consumer Electronic Publishing business.  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.  The Company was a minority shareholder in VWD.  On March 19, 2004, the Company purchased Alternative Investor, a provider of newsletters, databases and industry conferences for the venture capital and private equity markets for $85 million.  Alternative Investor was integrated with the Company’s newsle tters division and the recently acquired Technologic Partners business.  

Quarter ended June 30, 2005 compared to quarter ended June 30, 2004:

(dollars in thousands)							% Increase/
		2005			2004		(Decrease)
Revenues:
Dow Jones Newswires:
North America	$	50,282		$	48,945		2.7	%
International		16,730			14,616		14.5
Total Dow Jones Newswires		67,012			63,561		5.4
Consumer Electronic Publishing		44,131			19,893		121.8
Dow Jones Indexes/Ventures		17,280			12,760		35.4
Total revenue		128,423			96,214		33.5
Operating expenses		99,038			73,267		35.2
Operating income	$	29,385		$	22,947		28.1
Operating margin		22.9	%		23.8	%
Included in expenses:
Depreciation and amortization	$	9,538		$	6,950		37.2

24

Statistical information:
Dow Jones Newswires terminals	286,000	291,000
WSJ.com subscribers	744,000	684,000

Revenues

Electronic publishing revenues increased $32.2 million, or 33.5%, to $128.4 million, driven by acquisitions and strong organic revenue growth at all electronic businesses.

Dow Jones Newswires revenue increased $3.5 million, or 5.4%, to $67 million.  Revenues in North America and internationally increased $1.3 million and $2.1 million, respectively.  English-language terminals carrying Dow Jones Newswires at June 30, 2005 were 286,000 compared with 291,000 at June 30, 2004.  International terminals decreased by 5,000 while terminals in North America were flat as compared to last year.

Consumer Electronic Publishing revenue increased $24.2 million, or 121.8%, to $44.1 million reflecting the MarketWatch acquisition and strong organic growth at WSJ.com.  On a pro forma basis, including MarketWatch revenues in the respective periods prior to the Company’s acquisition in January 2005, Consumer Electronic Publishing revenues grew 10%, reflecting growth in advertising and subscriber revenue.  At June 30, 2005, the number of WSJ.com subscribers increased 8.8% to 744,000 from 684,000 a year earlier.  Including MarketWatch, total unduplicated unique visitors to the Company’s online network averaged 8.7 million a month in the second quarter 2005.  Dow Jones Indexes/Ventures revenues, which include Dow Jones Indexes and reprints/permissions businesses, increased $4.5 million, or 35.4%, to $17.3 million.

Expenses

Electronic publishing expenses were up $25.8 million, or 35.2%, to $99 million resulting from incremental expenses from the aforementioned acquisitions, which accounted for the majority of the increase, with the remainder of the increase primarily from higher compensation, facilities and marketing costs.   The number of full-time employees in the electronic publishing segment was up 20% from a year ago mainly due to acquisitions.

Operating Income

Electronic publishing’s operating income was $29.4 million (22.9% of revenues), an improvement of $6.4 million, or 28.1%, over second quarter 2004 operating income of $22.9 million (23.8% of revenues), driven by increased profits at Consumer Electronic Publishing and Dow Jones Indexes/Ventures.  

Six months ended June 30, 2005 compared to six months ended June 30, 2004:

(dollars in thousands)		2005			2004		% Increase/ (Decrease)
Revenues:
Dow Jones Newswires:
North America	$	99,146		$	93,348		6.2	%
International		32,863			25,413		29.3
Total Dow Jones Newswires		132,009			118,761		11.2
Consumer Electronic Publishing		80,471			38,062		111.4
Dow Jones Indexes/Ventures		33,122			25,760		28.6
Total revenue		245,602			182,583		34.5
Operating expenses		194,754			141,123		38.0
Operating income	$	50,848		$	41,460		22.6
Operating margin		20.7	%		22.7	%
Included in expenses:
Depreciation and amortization	$	18,775		$	13,610		38.0

25

Revenues

Electronic publishing revenues for the first six months of 2005 increased $63 million, or 34.5%, to $245.6 million, driven by acquisitions and strong organic revenue growth at all electronic publishing businesses.

Dow Jones Newswires revenue increased $13.2 million, or 11.2%, to $132 million, largely reflecting the effect of acquisitions as well as 3% organic growth.  Revenues in North America and internationally increased $5.8 million and $7.5 million, respectively.   Consumer Electronic Publishing revenue increased $42.4 million, or 111.4%, to $80.5 million, reflecting the MarketWatch acquisition and strong organic growth at WSJ.com.  On a pro forma basis, including MarketWatch revenues in the respective periods prior to the Company’s acquisition in January 2005, Consumer Electronic Publishing revenues grew 11%, reflecting growth in advertising and subscriber revenue.  Dow Jones Indexes/Ventures revenues, which include Dow Jones Indexes and reprints/permissions businesses, increased $7.4 million, or 28.6%, to $33.1 million.

Expenses

Electronic publishing expenses increased $53.6 million, or 38%, to $194.8 million resulting from incremental expenses from acquisitions which accounted for the majority of the increase, with the remainder of the increase primarily from higher compensation, facilities and marketing costs.  

Operating Income

Electronic publishing’s operating income was $50.8 million (20.7% of revenues), an improvement of $9.4 million, or 22.6%, over last year’s operating income of $41.5 million (22.7% of revenues), driven by acquisitions and strong organic revenue growth.

Community Newspapers

Community newspapers includes the operations of Ottaway Newspapers, which publishes 15 daily newspapers and over 30 weekly newspapers and “shoppers” in nine states in the U.S.  In the quarter, community newspapers comprised roughly 20% of the Company’s revenues.

Quarter ended June 30, 2005 compared to quarter ended June 30, 2004:

(dollars in thousands)							% Increase/
		2005			2004		(Decrease)
Revenues
Advertising	$	68,742		$	66,317		3.7	%
Circulation and other		21,548			21,498		0.2
Total revenue		90,290			87,815		2.8
Operating expenses		67,687			62,654		8.0
Operating income	$	22,603		$	25,161		(10.2	)
Operating margin		25.0	%		28.7	%
Included in expenses:
Depreciation and amortization	$	3,080		$	2,839		8.5
Statistical information:
Advertising volume increase/(decrease):
Daily		0.8	%		3.8	%
Non-daily		(3.9	)		13.2
Overall		(0.1	)		5.5

26

Revenues

Community newspapers revenue was up $2.5 million, or 2.8%, to $90.3 million, driven by a $2.4 million, or 3.7%, increase in advertising revenue as increased advertising rates and preprint revenue exceeded the modest decline in overall linage.  The linage results were hampered by weak auto advertising, which more than offset the gains in real estate and help wanted classified advertising.  Circulation and other revenue was almost flat as compared to last year.  Average daily circulation was 432,000 in the second quarter of 2005 compared with 437,000 in 2004.

Expenses

Community newspapers expenses increased $5 million, or 8%, to $67.7 million as a result of higher compensation, newsprint and marketing expenses.  Expenses in 2005 also included increased costs from an investment in a new Ottaway-wide internet initiative and content management system, which the Company expects will contribute to increased online revenue and profit in the future.  Newsprint expense increased 10.7% as a result of a 6.6% increase in newsprint prices and a 3.8% increase in consumption for the quarter.  

Operating Income

Operating income in the second quarter of 2005 was $22.6 million (25% of revenues) compared with income last year of $25.2 million (28.7% of revenues).

Six months ended June 30, 2005 compared to six months ended June 30, 2004:

(dollars in thousands)							% Increase/
		2005			2004		(Decrease)
Revenues
Advertising	$	126,690		$	123,185		2.8	%
Circulation and other		41,762			42,307		(1.3	)
Total revenue		168,452			165,492		1.8
Operating expenses		132,519			123,359		7.4
Operating income	$	35,933		$	42,133		(14.7	)
Operating margin		21.3	%		25.5	%
Included in expenses:
Depreciation and amortization	$	6,020		$	5,818		3.5
Statistical information:
Advertising volume increase/(decrease):
Daily		(0.3	)%		3.2	%
Non-daily		(5.2	)		13.2
Overall		(1.2	)		4.9

Revenues

Community newspapers revenue was up $3 million, or 1.8%, to $168.5 million.  Advertising revenue was up $3.5 million, or 2.8%, to $126.7 million, as increased advertising rates and preprint revenue exceeded the 1.2% overall linage decline.  The linage decline reflected weak auto advertising, partially offset by gains in real estate and help wanted classified advertising.  Circulation and other revenue declined $0.5 million, or 1.3%, to $41.8 million on a modest decline in the circulation.

Expenses

Community newspapers expenses for the first six months of 2005 increased $9.2 million, or 7.4%, to $132.5 million as a result of higher compensation, newsprint and marketing expenses.  Expenses in 2005 also included increased costs from an investment in a new Ottaway-wide internet initiative and content management system, which the Company expects will contribute to increased online revenue and profit in the future.  Newsprint expense increased 7.7% as a result of a 7.1% increase in newsprint prices and a 0.6% increase in consumption.  

Operating Income

Operating income for the first six months of 2005 was $35.9 million (21.3% of revenues) compared with income last year of $42.1 million (25.5% of revenues).

27

Certain Items Affecting Comparisons

The following tables summarize certain items affecting comparisons for the three and six months ended June 30, 2005 and 2004:

		Quarters Ended June 30
(in millions, except		2005									2004
per share amounts)		Operating			Net			EPS			Operating		Net			EPS
Included in operating income:
Restructuring charges  (a)	$	(11.4	)	$	(6.9	)	$	(.08	)
Included in non-operating income:
Contract guarantee (b)					(1.1	)		(.01	)			$	(1.8	)	$	(.02	)
Gain on disposition of
investments (c)					17.7			.21					1.8			.02
Write-down of equity      investments (d)					(36.7	)		(.44	)
Total	$	(11.4	)	$	(27.0	)	$	(.33	)*	$	-	$	-		$	-

		Six Months Ended June 30
(in millions, except		2005									2004
per share amounts)		Operating			Net			EPS			Operating		Net			EPS
Included in operating income:
Restructuring charges  (a)	$	(11.4	)	$	(6.9	)	$	(.08	)	$	2.8	$	1.7		$	.02
Included in non-operating income:
Contract guarantee (b)					(2.4	)		(.03	)				(3.8	)		(.04	)
Gain on disposition of
investments (c)					17.7			.21					1.8			.02
Write-down of equity    investments (d)					(36.7	)		(.44	)
Total	$	(11.4	)	$	(28.3	)	$	(.34	)	$	2.8	$	(0.3	)	$	-

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

(a) Restructuring charges:

2005:

In the second quarter of 2005, the Company recorded a restructuring charge of $11.4 million ($6.9 million, net of taxes) primarily reflecting employee severance related to a workforce reduction of about 120 full-time employees.  Most of the charge relates to the Company’s efforts to reposition its international print and online operations but also includes headcount reductions at other parts of the business.  The bulk of the cash payments under this restructuring charge are expected to be paid over the next 12 months.

28

2004:

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 May 2005 on this vacated space.  

In the first quarter 2004, the Company renewed its lease at the World Financial Center, including extending the term of one of the floors that was previously abandoned.  The Company reoccupied this floor with personnel from another of its New York locations, whose lease term was expiring.  As a result, the Company reversed $2.8 million ($1.7 million, net of taxes) of the remaining lease obligation reserve for the previously abandoned floor at WFC.

(b) Contract guarantee:

Under the terms of the Company's 1998 sale of Telerate to Bridge Information Systems (Bridge), the Company 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 the Company for any liability the Company 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 present value of the total estimated minimum annual 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.  The trial court in January 2003 denied motions by each of the parties that their own claims for relief be granted and that competing claims be dismissed.  Appeals from those decisions were not pursued, and discovery has concluded.  Dispositive motions have been fully briefed for the court. The trial previously scheduled to begin in June 2005 has been adjourned and no new trial date has been set.

The second quarter of 2005 and 2004 included charges related to the accretion of the discount on the reserve balance of $1.1 million and $1.8 million, respectively.  These charges totaled $2.4 million and $3.8 million in the first half of 2005 and 2004, respectively.

29

(c) Gain on disposition of investments:

2005:

In April 2005, the Company concluded the sale of its 39.9% minority interest in F.F. Soucy Inc., a Canadian newsprint mill, to its majority owner, Brant-Allen Industries, Inc.  The sale price of $40 million in cash generated approximately $38 million in after-tax proceeds, which were used to reduce the Company’s commercial paper borrowings.  The Company recorded a gain of $9.6 million ($9.4 million, net of taxes) in the second quarter.

During the second quarter of 2005, the Company and the von Holtzbrinck Group completed its exchange of cross shareholdings.  In exchange for the Company’s 10% interest in Handelsblatt, the Company received the remaining 10% minority interest in The Wall Street Journal Europe that it did not already own; an 11.5% increase in its interest in a Czech Republic business periodical, effectively increasing the Company’s interest to 23%; and, $6 million in cash.  The transaction was accounted for at fair value and the Company recorded a gain of $13.2 million ($8.3 million, net of taxes) in connection with the disposal of its interest in Handelsblatt.

2004:

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 the Company of $6.7 million.  As a result of this sale, the Company recorded a gain of $3.3 million ($1.8 million, net of taxes) in the second quarter of 2004  

(d) Write-down of equity investments:

In July 2005, the Company and NBC Universal agreed to transfer the Company’s 50% interests in both CNBC Europe and CNBC Asia (collectively CNBC International), as well as its 25% interest in CNBC World, to NBC Universal as of December 31, 2005 for nominal consideration, subject to any necessary regulatory or legal approvals.  The transfer of the Company’s interest in CNBC Asia also requires the mutually satisfactory resolution of certain structural matters which are expected to be completed prior to December 31, 2005.

Under the agreement, the Company will fund CNBC International for the remainder of 2005, up to approximately $6 million, irrespective of the operating performance of the ventures, and through 2006 the Company will continue to provide access to news resources and other services to CNBC International, nonexclusively.  There are no plans to alter the licensing relationship in the U.S. between the Company and CNBC.

As of June 30, 2005, in connection with the binding agreement reached with NBC Universal, the Company determined that an other-than-temporary decline in the value of its investments in CNBC International and CNBC World had occurred and, as a result, the Company recorded a charge of $35.9 million ($36.7 million, including taxes) in the second quarter of 2005, largely reflecting the write-down of the investments’ carrying value ($32 million), with the remainder primarily reflecting the additional firmly committed cash payment for which there is no future economic benefit to the Company.

Non-operating Loss

Interest Expense, Net of Investment Income

Interest expense, net increased by $4.1 million to $4.7 million for the second quarter of 2005, reflecting financing costs associated with the acquisition of MarketWatch.  Debt outstanding at June 30, 2005 totaled $517.1 million, compared with debt of $145.8 million at December 31, 2004 and $214.7 million at June 30, 2004.

Equity in Earnings of Associated Companies

In the second quarter of 2005, the Company’s share of equity in earnings of associated companies decreased $0.3 million to $1.8 million, as compared to 2004’s second quarter income of $2.1 million.  During the quarter, improved results at STOXX and CNBC International were more than offset by a decline at Factiva and the exclusion of F.F. Soucy, sold in April of 2005.  For the first six months of 2005, the Company’s share of equity in earnings of associated companies increased $1.2 million, as compared to the first six months of 2004, to $2.6 million, reflecting improved results at STOXX and CNBC International partially offset by declines at Factiva and FF Soucy.  

30

Income Taxes

The following table presents the effective income tax rates, net of minority interests, for the quarters and six months ended June 30, 2005 and 2004:

	Quarters Ended		Six Months Ended
	2005	2004	2005	2004
Effective income tax rate	96.0%	42.3%	74.5%	42.0%
Effective income tax rate, excluding	40.3%	40.9%	39.7%	40.1%
items identified in table below

The effective tax rates were affected by certain transactions, which are detailed below.

		Quarters Ended June 30
(dollars in millions)		2005							2004
		Income Taxes			Pretax Income		Effective Tax Rate (2)		Income Taxes		Pretax Income		Effective Tax Rate (2)
Reported (1)	$	20.5		$	21.4		96.0%	$	25.0	$	59.0		42.3%
Adjusted to remove:
Restructuring charges		(4.4	)		(11.4	)
Contract guarantee					(1.1	)					(1.8	)
Gain on disposition of
investments		5.2			22.9				1.4		3.3
Write-down of equity    investments		0.8			(35.9	)
Adjusted	$	18.9		$	46.9		40.3%	$	23.6	$	57.6	*	40.9%

		Six Months Ended June 30
(dollars in millions)		2005							2004
		Income Taxes			Pretax Income		Effective Tax Rate (2)		Income Taxes		Pretax Income		Effective Tax Rate (2)
Reported (1)	$	26.4		$	35.4		74.5%	$	37.5	$	89.3		42.0%
Adjusted to remove:
Restructuring charges		(4.4	)		(11.4	)			1.1		2.8
Contract guarantee					(2.4	)					(3.8	)
Gain on disposition of
investments		5.2			22.9				1.4		3.3
Write-down of equity    investments		0.8			(35.9	)
Adjusted	$	24.8		$	62.2		39.7%	$	35.0	$	87.1	*	40.1%
(1) Net of minority interests.
(2) The product of the individual amounts does not equal calculated rate due to rounding.

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

Capital Loss Carryforwards

As of June 30, 2005, the Company had a capital loss carryforward remaining of about $436 million (a deferred tax asset of about $166 million which is fully reserved against).  About $119 million of this loss carryforward is recognized for tax purposes and expires in 2006.  The remaining $317 million of this carryforward, which primarily relates to the Cantor contract guarantee obligation, will be recognized for tax purposes only to the extent, if any, that the Company is required to make payment.  If the Company is required to make any such payment, the resulting loss carryforward will be available for use five years from the year it is recognized.

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Liquidity and Capital Resources

Overview

The primary source of the Company’s liquidity is cash flow from operating activities.  The key component of operating cash inflow is cash receipts from advertising customers and subscribers to print and information services.  Operating cash outflows include payments to vendors for raw materials, services and supplies, payments to employees, and payments of interest and income taxes.  Certain employee compensation such as bonuses and payments to the Company’s defined contribution pension plan are paid annually in the first quarter of the year.  The Company expects its cash balance and cash provided from operations to be sufficient to meet its normal recurring operating commitments, fund capital expenditures and pay dividends.  

As previously disclosed, in 2000 the Company established a reserve for the present value of the total estimated payments through October 2006 in connection with the Company’s guarantee of certain minimum payments for data acquired by the Company’s former Telerate subsidiary from Cantor Fitzgerald Securities (Cantor) and Market Data Corporation (MDC).  Bridge Information Systems, Inc., which purchased Telerate in 1998, filed for bankruptcy 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 allegedly due under the contract guarantee.  The Company has various substantial defenses to these claims and the litigation is proceeding.

As of June 30, 2005, the balance of the reserve for the contract guarantee was $263.1 million.  The Company has classified $250.9 million of this reserve as current based on the original due dates of the contract.  Due to the stage of the lawsuit at June 30, 2005, it is not possible to determine whether the court will find that any obligation under the guarantee may be dismissed or reduced.  Accordingly, the Company believes the balance of the reserve continues to be appropriate.  In the event there is an adverse judgment against the Company it would likely be appealed.  If any significant amounts are ultimately considered due, they would likely be financed through the issuance of additional debt.

The Company’s liquidity requirements may be funded, if necessary, through the issuance of commercial paper, bank loans or debt securities.  The Company’s commercial paper program is supported by multiyear revolving credit facilities with several banks.  As of June 30, 2005, the Company could borrow up to $440 million, $140 million through June 24, 2006 and $300 million through June 24, 2009 under its multiyear revolving credit agreements with several banks.  It is currently the Company’s intent to manage its commercial paper borrowings as short-term obligations.    

Cash Flow Summary

For the Six Months Ended June 30, 2005 and 2004:

(in millions)		2005			2004
Net cash provided by operating activities	$	72.0		$	99.8
Net cash used in investing activities		(423.3	)		(121.0	)
Net cash provided by financing activities		346.9			21.9
Effect of currency exchange rate changes on cash		1.6			1.0
(Decrease) increase in cash and cash equivalents		(2.8	)		1.7
Cash and cash equivalents at beginning of year		17.2			23.5
Cash and cash equivalents at June 30	$	14.5	*	$	25.1	*

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

Operating Activities

Cash provided by operating activities for the first six months of 2005 was $72 million, which was down $27.8 million from net cash provided by operations in the same period last year.  The decline was primarily the result of decreased operating income and higher interest paid.   

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Investing Activities

Net cash used in investing activities was $423.3 million in the first six months of 2005, primarily as a result of the January 21, 2005 acquisition of MarketWatch.  Net cash used in investing activities totaled $121 million in the first half of 2004, primarily reflecting the acquisition of Alternative Investor and capital expenditures of $31.2 million.

Financing Activities

Net cash provided by financing activities for the first six months of 2005 was $346.9 million, reflecting an increase in commercial paper borrowings of $245.5 million and the issuance of $225 million three-year fixed rate bonds, principally related to the acquisition of MarketWatch.  Cash outlays in the first six months of 2005 included the payment of $41.2 million in dividends to shareholders.  Net cash provided by financing activities for the first six months of 2004 was $21.9 million, reflecting a net increase in debt of $61.6 million, principally related to the acquisition of Alternative Investor.  Cash outlays in the first six months of 2004 included the payment of $40.9 million in dividends to shareholders.

FORWARD-LOOKING STATEMENTS

This document 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 and that B2B advertising levels, particularly in technology and finance, may or may not return to historical levels; the Company's ability to expand and diversify the Journal's market segment focus beyond finance and technology; 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; intense competition for ad revenues and readers the Company’s products and serv ices face; the impact on the future circulation of the Journal and community newspapers that may be caused by the declining frequency of regular newspaper buying by young people; the Company's ability to successfully integrate the MarketWatch business into its existing business units, and to achieve production and operational efficiencies and synergies in doing so; with respect to our new Weekend Edition, the risks that it may not generate anticipated advertising revenues, resulting in greater losses than expected in its first two years of operation, and that it may draw advertising away from the Company’s other consumer advertising sections; with respect to Newswires and other subscription-based products and services, the negative impact of business consolidations and layoffs in the financial services industry on sales; the uncertainties relating to the Company's guarantee to Cantor Fitzgerald Securities and Market Data Corporation; and such other risk factors as may be included from time to time in th e 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).   The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Foreign Currency Exchange Risk

The Company enters into foreign-currency forward exchange contracts, designated as cash flow hedges, to hedge anticipated operating expenses that are denominated in foreign currencies (principally the e uro and the p ound s terling). Revenues of the Company are largely collected in U.S. dollars.   These contracts, which expire ratably over 2005, are entered into to protect against the risk that operating expenses will be adversely affected by devaluation in the U.S. dollar relative to these currencies.  Realized gains or losses on foreign-currency forward contracts are recognized currently through income and generally offset the transaction gains or losses on the foreign-currency cash flows which they are intended to hedge.

As of June 3 0 , 2005 and December 31, 2004 the Company had foreign currency forward exchange contracts , designated as cash flow hedges, covering approximately $ 20.6 million and $42.6 million of notional amount of currency, respectively. The fair value of the contracts for the six months ended June 30 , 2005 and the year ended 2004 was a n unrealized loss of $1.6 million and an unrealized gain of $ 0.3 million, respectively.  

Interest Rate Risk

The Company’s commercial paper outstanding of $292.2 million at June 30, 2005 is also subject to market risk as the debt reaches maturity and is reissued at prevailing interest rates.  At June 30, 2005, interest rates outstanding ranged from 2.935% to 3.375%, with a weighted-average of 3.13%.  At June 30, 2005 the Company had $224.9 million of fixed rate bonds outstanding, which mature in February 2008.  A change in the market interest rate impacts the fair value of the instrument but has no impact on earnings or cash flows.

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Item 4. Controls & Procedures

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer (CEO) and Chief Financial Officer (CFO), an evaluation of the effectiveness of the Company’s disclosure controls and procedures was performed.  Based on this evaluation, the CEO and CFO have concluded that the Company’s disclosure controls and procedures are effective to ensure that material information is recorded, processed, summarized and reported by management of the Company on a timely basis in order to comply with the Company’s disclosure obligations under the Securities Exchange Act of 1934 and the SEC rules thereunder.

Changes in Internal Controls over Financial Reporting

As a result of the Company’s acquisition of MarketWatch, Inc. (MarketWatch) in the first quarter of 2005, the Company has expanded its internal controls over financial reporting to include consolidation of the MarketWatch results of operations.  These controls will be incorporated into the Company’s Section 404 assessment for 2005.  There were no other changes in the Company’s internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during the three-month period ended June 30, 2005 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

On November 13, 2001, the Company instituted a lawsuit in the Supreme Court of the State of New York against Market Data Corp. (MDC) and Cantor Fitzgerald Securities (together with its affiliates, Cantor) seeking a declaratory judgment with respect to the Company’s obligations, if any, under a guarantee issued to MDC and Cantor.  The guarantee relates to certain annual “minimum payments” owed by Telerate under certain conditions for data acquired by Telerate from Cantor Fitzgerald and MDC under contracts entered into when Telerate was a subsidiary of Dow Jones, and is described in Management’s Discussion and Analysis.

In this lawsuit the Company has asked the court to find that the Company does not and will not owe any payment under the contract guarantee through October 2006.  In the alternative, the Company has asked the court to find that if any amount is owed, it must be reduced by amounts that Cantor and MDC receive or should have received from other distribution of the data after Telerate stopped receiving the government securities data from Cantor and MDC.  MDC has asserted counterclaims demanding payment of $10.2 million (allegedly the balance owed by Telerate on November 15, 2001), interest, attorneys’ fees, specific performance of the guarantee, and a declaratory judgment as to the validity and interpretation of the guarantee through October 2006.

Cantor also commenced a separate lawsuit in the Supreme Court of the State of New York (since consolidated with the Company’s case) seeking payment of $10 million (allegedly the balance of the November 2001 minimum payment), payment of $250 million in breach of contract damages, specific performance of the guarantee, a declaration that the guarantee remains in full force and effect, payment of approximately $16 million allegedly owed by Telerate and guaranteed by the Company in the guarantee for the distribution of certain other data, attorneys’ fees, interest, and other relief.

The trial court in January 2003 denied motions by each of the parties that their own claims for relief be granted and that competing claims be dismissed.  Appeals from those decisions were not pursued, and discovery has concluded.  Dispositive motions have been fully briefed for the court.  The trial previously scheduled to begin in June 2005 has been adjourned and no new trial date has been set.  

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

In 1998 the Company’s Board of Directors authorized the repurchase of $800 million of the Company’s common stock and in September 2000 authorized the repurchase of an additional $500 million of the Company’s common stock.  As of June 30, 2005, approximately $326.4 million remained under board authorization for share repurchases.  The Company has not repurchased any shares of its common stock since the first quarter of 2003.

Item 6. Exhibits

Exhibit Number	Document
3.1	The Restated Certificate of Incorporation of the Company, as amended and restated as of April 20, 2005.
3.2	The Restated Bylaws of the Company, as amended and restated as of April 20, 2005.
10.1	Form of Dow Jones & Company, Inc. Non-Qualified Stock Option Agreement.
10.2	Form of Dow Jones & Company, Inc. Contingent Stock Right Agreement.
10.3	Form of Dow Jones & Company, Inc. Restricted Stock Unit Award Agreement.
31.1	Certifications by the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certifications by the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certifications by the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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SIGNATURE

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.

			DOW JONES & COMPANY, INC.
			(Registrant)
Date:	August 1, 2005	By:	/s/ Robert Perrine
			Robert Perrine
			Chief Accounting Officer and Controller

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EX-3

Exhibit 3.1

RESTATED CERTIFICATE OF INCORPORATION

OF

DOW JONES & COMPANY, INC.

FIRST.  The name of the corporation is Dow Jones & Company, Inc.

SECOND.  Its registered office in the State of Delaware is located at Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801.  The name and address of its registered agent is The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801.

THIRD.  The nature of the business, or objects or purposes to be transacted, promoted or carried on, are:

(a)

To gather, collect, purchase, analyze, prepare, edit, publish and distribute by newspapers, magazines, books, periodicals and other publications, by ticker, by news bulletins and by other methods, news, comment and quotations of all kinds and descriptions;

(b)

To edit, publish, print, conduct and circulate, or otherwise deal with, any newspapers, news services, magazines, books, periodicals, bulletins and other publications, and news, comment and quotations of all kinds and descriptions, and, in general, to carry on the business of collecting, editing, transmitting, publishing and disseminating news, comment and opinion in any form or manner;

(c)

To purchase or otherwise acquire and to sell, either as principal or agent, newspapers, news services, magazines, books, periodicals and other publications of all kinds and descriptions, stationery and stationer’s supplies, and, generally, to carry on the business of wholesale and retail book sellers and stationers;

(d)

To design, manufacture, buy, sell, lease, operate, maintain, service and deal in and with news tickers, stock, bond and other tickers, and other receiving, transmitting and recording instruments, printing, engraving and lithographing machinery, and other machines, machinery and apparatus of all kinds and descriptions for receiving, transmitting, publishing and recording news, comment and quotations;

(e)

To design, manufacture, buy, sell, lease, operate, maintain, service and deal in and with all kinds of machines, machinery and equipment;

(f)

To acquire, hold, use, sell, assign, lease, grant licenses in respect of, and mortgage or otherwise dispose of, letters patent of the United States or any foreign country, patent rights, licenses and privileges, inventions, improvements and processes, copyrights, trademarks and trade names, relating to or useful in connection with any business of the corporation;

(g)

To carry on a general advertising and publicity business in all its branches, either as principal or agent, and to acquire and operate franchises or privileges for the performance of the purposes of the corporation;

(h)

To conduct, and carry on the business of a printer, publisher, lithographer, stereotyper, electrotyper, photographic printer, engraver, bookbinder and stationer, including the printing and publication of newspapers, news services, magazines, news bulletins, stock, bond and other quotations and news, books, pamphlets, periodicals, posters, circulars, envelopes, bill and letterheads, cards, tags, labels, commercial, financial and law blanks and forms of every description; and, in general, to carry on and conduct the business of a printer and publisher;

(i)

To manufacture, purchase or otherwise acquire, invest in, own, mortgage, pledge, sell, assign and transfer or otherwise dispose of, trade in, deal in and deal with goods, wares and merchandise and personal property of every class and description;

(j)

To purchase, buy, sell, exchange, own, hold, maintain, work, develop, convey, mortgage, lease, let, hire and otherwise acquire, dispose of or deal in and with real estate and personal property, wheresoever situated, in any part of the world, and without limit as to the amount or value thereof, and any interest or right or rights therein, and to improve or deal with such property in any way permitted by law;

(k)

To borrow or raise moneys for any of the purposes of the corporation and, from time to time, without limit as to amount, to draw, make, accept, endorse, execute and issue promissory notes, drafts, bills of exchange, warrants, bonds, debentures and other negotiable or non-negotiable instruments and evidences of indebtedness, and to secure the payment of any thereof and of the interest thereon by mortgage upon or pledge, conveyance or assignment in trust of the whole or any part of the property of the corporation, whether at the time owned or thereafter acquired, and to sell, pledge or otherwise dispose of such bonds or other obligations of the corporation for its corporate purposes, and to confer upon the holders of any of its bonds or other obligations such powers, rights and privileges as from time to time may be deemed advisable by the board of directors, to the extent permitted by law;

(l)

To acquire by purchase, subscription or otherwise, and to receive, hold, own, guarantee, sell, assign, exchange, transfer, mortgage, pledge or otherwise dispose of or deal in and with any of the shares of the capital stock, or any voting trust certificates in respect of the shares of capital stock, scrip, warrants, rights, bonds, debentures, notes, trust receipts, and other securities, obligations, choses in action and evidences of indebtedness or interest issued or created by any corporations, joint stock companies, syndicates, associations, firms, trusts or persons, public or private, or by the government of the United States of America, or by any foreign government, or by any state, territory, province, municipality or other political subdivision or by any governmental agency, and as owner thereof to possess and exercise all of the rights, powers and privileges of ownership, including the right to execute consents and vote thereon, and to do any and all acts and things necessary or advisable for the preservation, protection, improvement and enhancement in value thereof;

(m)

To lend and advance money and extend credit to any person, firm or corporation, either with or without security;

(n)

To purchase or otherwise acquire, hold, cancel, reissue, sell, pledge, exchange, transfer or otherwise deal in its own securities, including shares of its capital stock of any class, from time to time and to such extent and in such manner and upon such terms as the board of directors shall determine; provided it shall not use its funds or property for the purchase of its own shares of capital stock when such use would cause any impairment of its capital except as otherwise permitted by law, and provided further that shares of its own capital stock belonging to it shall not be voted upon directly or indirectly;

(o)

To acquire, and pay for in cash, stock or bonds of this corporation or otherwise, the good will, rights, assets and property, and to undertake or assume the whole or any part of the obligations or liabilities of any person, firm, association, trust or corporation;

(p)

To apply for, purchase, or acquire by assignment, transfer or otherwise, and to exercise, carry out and enjoy any and all rights under any statute, ordinance, order, license, power, authority, franchise, concession or privilege which any government or authority, or any other corporate or public body, may be empowered to enact, make or grant, and to pay for, aid in and contribute toward carrying the same into effect, and to appropriate any of the corporation’s stock, bonds, debentures, notes and other securities and assets to defray the necessary costs, charges and expenses thereof;

(q)

To enter into, make and perform contracts of every kind and description with any person, firm, association, trust, corporation, municipality, county, state, body politic or government or colony or dependency thereof;

(r)

To consolidate with or merge into any one or more other corporations whenever and however organized;

(s)

To have one or more offices and to carry on all or any of its operations and business in any of the states, districts, territories or possessions of the United States, and in any and all foreign countries, subject to the laws of such state, district, territory, possession or country;

(t)

In general, to carry on any other business in connection with the foregoing, and to have and exercise all the powers conferred by the laws of Delaware upon corporations formed under the General Corporation Law of the State of Delaware.

The objects and purposes specified in the foregoing clauses shall, except where otherwise expressed, be in nowise limited or restricted by reference to, or inference from, the terms of any other clause in this certificate of incorporation, but the objects and purposes specified in each of the foregoing clauses of this Article shall be regarded as independent objects and purposes, and the enumeration of specific objects and purposes shall not be construed to restrict in any manner the general objects and purposes of the corporation, nor shall the expression of one thing be deemed to exclude another, although it be of like nature.  The enumeration of objects and purposes herein shall not be deemed to exclude or in any way limit by inference any powers, objects or purposes which the corporation is empowered to exercise, whether expressly by force of the laws of Delaware, now or hereafter in effect, or impliedly by any reason able construction of said laws.

FOURTH.  The total number of shares of all classes which the corporation shall have authority to issue is One Hundred Sixty Million (160,000,000), consisting of One Hundred Thirty-five Million (135,000,000) shares of common stock of the par value of $1 per share (hereinafter called “Common Stock”) and Twenty-five Million (25,000,000) shares of class B common stock of the par value of $1 per share (hereinafter called “Class B Common Stock”).

1.  (a)

At every meeting of the stockholders every holder of Common Stock shall be entitled to one (1) vote in person or by proxy for each share of Common Stock standing in his name on the stock transfer records of the corporation and every holder of Class B Common Stock shall be entitled to ten (10) votes in person or by proxy for each share of Class B Common Stock standing in his name on the stock transfer records of the corporation; provided that at every meeting of the stockholders called for the election of directors of the corporation (A) the holders of Common Stock, voting separately as a class, shall be entitled to elect seven (7) of the directors to be elected at such meeting and (B) the holders of class B Common Stock and Common Stock, voting as a separate class, shall be entitled to elect the remaining directors to be elected at such meeting.  However, if paragraph a. of Article Fifth is at any time amended to permit the number of directors of the corporation to exceed eighteen, then at every meeting of the stockholders called for the election of directors, (A) the holders of Common Stock, voting separately as a class, shall be entitled to elect the greater of (x) seven (7) of the directors to be elected at such meeting, or (y) one-third (1/3) of the number of directors to be elected at such meeting, and if one-third (1/3) of such number of directors is not a whole number, the next higher whole number of directors to be elected at such meeting and (B) the holders of Class B Common Stock and Common Stock, voting as a separate class, shall be entitled to elect the remaining directors to be elected at such meeting.  Directors elected by the holders of Common Stock, voting separately as a class, may be removed, with or without cause, only by a vote of the holders of a majority of the shares of Common Stock then outstanding, voting separately as a class.  If, during the interval between annual meet ings of stockholders for the election of directors, the number of directors who have been elected by the holders of Common Stock voting separately as a class shall, by reason or resignation, death or removal, be reduced, the vacancy or vacancies in the directors elected by the holders of Common Stock voting separately as a class shall be filled by a majority vote of the remaining directors then in office, even if less than a quorum, and if not so filled within forty days after the creation of such vacancy or vacancies, the Secretary of the corporation shall call a special meeting of the holders of Common Stock and such vacancy or vacancies shall be filed at such special meeting.  Any director elected to fill any such vacancy by the remaining directors then in office may be removed from office by vote of the holders of a majority of the shares of Common Stock voting separately as a class.

(b)

Every reference in this certificate of incorporation to a majority or other proportion of shares of stock shall refer to such majority or other proportion of the votes of such shares of stock.

2.  (a)

No person holding shares of Class B Common Stock (hereinafter called a “Class B Holder”) may transfer, and the corporation shall not register the transfer of, such shares of Class B Common Stock, whether by sale, assignment, gift, bequest, appointment or otherwise, except to a Permitted Transferee of such Class B Holder, which term shall have the following meanings:

(i)

In the case of a Class B Holder who is a natural person holding record and beneficial ownership of the shares of Class B Common Stock in question, “Permitted Transferee” means (A) the spouse of such Class B Holder, (B) a lineal descendant of a great grandparent of such Class B Holder, (C) the trustee of a trust (including a voting trust) for the benefit of one or more of such Class B Holder, other lineal descendants of a great grandparent of such Class B Holder, the spouse of such Class B Holder, and an organization contributions to which are deductible for federal income, estate or gift tax purposes (hereinafter called a “Charitable Organization”), and for the benefit of no other person, provided that such trust may grant a general or special power of appointment to such spouse and may permit trust assets to be used to pay taxes, legacies and other obligations of the trust or the estate of such Class B Holder payable by reason of the death of such Class B Holder and provided that such trust must prohibit transfer of shares of Class B Common Stock to persons other than Permitted Transferees as defined in clause (ii) below, (D) a Charitable Organization established by such Class B Holder, such Class B Holder’s spouse or a lineal descendant of a great grandparent of such Class B Holder, (E) a corporation all of the outstanding capital stock of which is owned by, or a partnership all of the partners of which are, one or more of such Class B Holder, other lineal descendants of a great grandparent of such Class B Holder, and the spouse of such Class B Holder, provided that if any share of capital stock of such a corporation (or of any survivor of a merger or consolidation of such a corporation), or any partnership interest in such a partnership, is acquired by any person who is not within such class of persons, all shares of Class B Common Stock then held by such corporation or partnership, as the case may be, shall be deemed without further act on anyone’s part to be converted into shares of Common Stock, and stock certificates formerly representing such shares of Class B Common Stock shall thereupon and thereafter be deemed to represent the like number of shares of Common Stock.

(ii)

In the case of a Class B Holder holding the shares of Class B Common Stock in question as trustee pursuant to a trust other than a trust described in clause (iii) below, “Permitted Transferee” means (A) the person who established such trust, and (B) a Permitted Transferee of such person determined pursuant to clause (i) above.

(iii)

In the case of a Class B Holder holding the shares of Class B Common Stock in question as trustee pursuant to a trust which was irrevocable on the record date (hereinafter in this paragraph 2 called the “Record Date”) for determining the persons to whom the Class B Common Stock is first distributed by the corporation, “Permitted Transferee” means any person to whom or for whose benefit principal may be distributed either during or at the end of the term of such trust whether by power of appointment or otherwise.

(iv)

In the case of a Class B Holder holding record (but not beneficial) ownership of the shares of Class B Common Stock in question as nominee for the person who was the beneficial owner thereof on the Record Date, “Permitted Transferee” means such beneficial owner and a Permitted Transferee of such beneficial owner determined pursuant to clauses (i), (ii), (iii), (v) or (vi) hereof, as the case may be.

(v)

In the case of a Class B Holder which is a partnership holding record and beneficial ownership of the shares of Class B Common Stock in question, “Permitted Transferee” means any partner of such partnership.

(vi)

In the case of a Class B Holder which is a corporation (other than a Charitable Organization described in subclause (D) of clause (i) above) holding record and beneficial ownership of the shares of Class B Common Stock in question, “Permitted Transferee” means any stockholder of such corporation receiving shares of Class B Common Stock through a dividend or through a distribution made upon liquidation of such corporation, and the survivor of a merger or consolidation of such corporation.

(vii)

In the case of a Class B Holder which is the estate of a deceased Class B Holder, or which is the estate of a bankrupt or insolvent Class B Holder, and provided such deceased, bankrupt or insolvent Class B Holder, as the case may be, held record and beneficial ownership of the shares of Class B Common Stock in question, “Permitted Transferee” means a Permitted Transferee of such deceased, bankrupt or insolvent Class B Holder as determined pursuant to clauses (i), (v) or (vi) above, as the case may be.

(b)

Notwithstanding anything to the contrary set forth herein, any Class B Holder may pledge such Holder’s shares of Class B Common Stock to a pledgee pursuant to a bona fide pledge of such shares as collateral security for indebtedness due to the pledgee, provided that such shares shall not be transferred to or registered in the name of the pledgee and shall remain subject to the provisions of this paragraph 2.  In the event of foreclosure or other similar action by the pledgee, such pledged shares of Class B Common Stock may only be transferred to a Permitted Transferee of the pledgor or converted into shares of Common Stock, as the pledgee may elect.

(c)

For purposes of this paragraph 2:

(i)

The relationship of any person that is derived by or through legal adoption shall be considered a natural one.

(ii)

Each joint owner of shares of Class B Common Stock shall be considered a “Class B Holder” of such shares.

(iii)

A minor for whom shares of Class B Common Stock are held pursuant to a Uniform Gifts to Minors Act or similar law shall be considered a Class B Holder of such shares.

(iv)

Unless otherwise specified, the term “person” means both natural persons and legal entities.

(d)

Any purported transfer of shares of Class B Common Stock not permitted hereunder shall be void and of no effect and the purported transferee shall have no rights as a stockholder of the corporation and no other rights against or with respect to the corporation.  The corporation may, as a condition to the transfer or the registration of transfer of shares of Class B Common Stock to a purported Permitted Transferee, require the furnishing of such affidavits or other proof as it deems necessary to establish that such transferee is a Permitted Transferee.  The corporation may note on the certificates for shares of Class B Common Stock the restrictions on transfer and registration of transfer imposed by this paragraph 2.

(e)

When the number of outstanding shares of Class B Common Stock falls below Seven Million Five Hundred Thousand (7,500,000), or such higher number as results from adjustments for stock splits or stock dividends, the outstanding shares of Class B Common Stock shall be deemed without further act on anyone’s part to be converted into shares of Common Stock, and stock certificates formerly representing outstanding shares of Class B Common Stock shall thereupon and thereafter be deemed to represent the like number of shares of Common Stock.

3.  (a)

Each share of Class B Common Stock may at any time be converted into one (1) fully paid and nonassessable share of Common Stock.  Such right shall be exercised by the surrender of the certificate representing such share of Class B Common Stock to be converted to the corporation at any time during normal business hours at the principal executive offices of the corporation, or if an agent for the registration of transfer of shares of Class B Common Stock is then duly appointed and acting (said agent being hereinafter called the “Transfer Agent”) then at the office of the Transfer Agent, accompanied by a written notice of the election by the holder thereof to convert and (if so required by the corporation or the Transfer Agent) by instruments of transfer, in form satisfactory to the corporation and to the Transfer Agent, duly executed by such holder or his duly authorized attorney, and transfer t ax stamps or funds therefor, if required pursuant to subparagraph (e) below.

(b)

As promptly as practicable after the surrender for conversion of a certificate representing shares of Class B Common Stock in the manner provided in subparagraph (a) above and the payment in cash of any amount required by the provisions of subparagraphs (a) and (e), the corporation will deliver or cause to be delivered at the office of the Transfer Agent to or upon the written order of the holder of such certificate, a certificate or certificates representing the number of full shares of Common Stock issuable upon such conversion, issued in such name or names as such holder may direct.  Such conversion shall be deemed to have been made immediately prior to the close of business on the date of the surrender of the certificate representing shares of Class B Common Stock, and all rights of the holder of such shares as such holder shall cease at such time and the person or persons in whose name or names the certificate or certificates representing the shares of Common Stock are to be issued shall be treated for all purposes as having become the record holder or holders of such shares of Common Stock at such time; provided, however, that any such surrender and payment on any date when the stock transfer books of the corporation shall be closed shall constitute the person or persons in whose name or names the certificate or certificates representing shares of Common Stock are to be issued as the record holder or holders thereof for all purposes immediately prior to the close of business on the next succeeding day on which such stock transfer books are open.

(c)

No adjustments in respect of dividends shall be made upon the conversion of any share of Class B Common Stock, provided, however, that if a share shall be converted subsequent to the record date for the payment of a dividend or other distribution on shares of Class B Common Stock but prior to such payment, the registered holder of such share at the close of business on such record date shall be entitled to receive the dividend or other distribution payable on such share on such date notwithstanding the conversion thereof or the corporation’s default in payment of the dividend due on such date.

(d)

The corporation covenants that it will at all times reserve and keep available, solely for the purpose of issue upon conversion of the outstanding shares of Class B Common Stock, such number of shares of Common Stock as shall be issuable upon the conversion of all such outstanding shares, provided, that nothing contained herein shall be construed to preclude the corporation from satisfying its obligations in respect of the conversion of the outstanding shares of Class B Common Stock by delivery of purchased shares of Common Stock which are held in the treasury of the corporation.  The corporation covenants that if any shares of Common Stock, required to be reserved for purposes of conversion hereunder, require registration with or approval of any governmental authority under any federal or state law before such shares of Common Stock may be issued upon conversion, the corporation will cause such shares to be duly registered or approved, as the case may be.  The corporation will endeavor to list the shares of Common Stock required to be delivered upon conversion prior to such delivery upon each national securities exchange upon which the outstanding Common Stock is listed at the time of such delivery.  The corporation covenants that all shares of Common Stock which shall be issued upon conversion of the shares of Class B Common Stock, will, upon issue, be fully paid and nonassessable and not subject to any preemptive rights.

(e)

The issuance of certificates for shares of Common Stock upon conversion of shares of Class B Stock shall be made without charge for any stamp or other similar tax in respect of such issuance.  However, if any such certificate is to be issued in a name other than that of the holder of the share or shares of Class B Common Stock converted, the person or persons requesting the issuance thereof shall pay to the corporation the amount of any tax which may be payable in respect of any transfer involved in such issuance or shall establish to the satisfaction of the corporation that such tax has been paid.

4.

Each share of Common Stock and Class B Common Stock shall be equal in respect of rights to dividends and other distributions in cash, stock or property of the corporation, provided that in the case of dividends or other distributions payable in stock of the corporation, including distributions pursuant to stock split-ups or divisions of stock of the corporation, which occur after the date shares of Class B Common Stock are first issued by the corporation, only shares of Common Stock shall be distributed with respect to Common Stock and only shares of Class B Common Stock shall be distributed with respect to Class B Common Stock.

5.

Except as otherwise provided in paragraph 4 above, the corporation shall not issue additional shares of Class B Common Stock after the date shares of Class B Common Stock are first issued by the corporation, and all shares of Class B Common Stock surrendered for conversion shall be retired, unless otherwise approved by the affirmative vote of the holders of a majority of the outstanding shares of stock of the corporation entitled to vote.

6.

The number of authorized shares of any class or classes of stock of the corporation may be increased or decreased by the affirmative vote of the holders of a majority of the outstanding shares of stock of the corporation entitled to vote.

7.

No stockholder of the corporation shall be entitled as of right to subscribe for, purchase or receive any part of any new or additional issue of stock of any class, whether now or hereafter authorized, or of bonds, debentures or other securities convertible into or exchangeable for stock, but all such additional shares of stock of any class, or bonds, debentures or other securities convertible into or exchangeable for stock, may be issued and disposed of by the board of directors on such terms and for such consideration, so far as may be permitted by law, and to such persons, as the board of directors in its absolute discretion may deem advisable.

FIFTH.  The following provisions regarding the election and removal of directors are established:

(a)

The number of directors of the corporation shall be not less than sixteen or more than eighteen, and, subject to such limitation, shall be fixed from time to time by or pursuant to the bylaws.  In addition to any other vote required by law or by this certificate of incorporation, so long as there shall be any Class B Common Stock outstanding, this Section Fifth (a) shall not be amended, altered or repealed without the affirmative vote of a majority of the outstanding shares of Common Stock and the affirmative vote of a majority of the outstanding shares of Class B Common Stock, each voting separately as a class.

(b)

An annual meeting of stockholders shall be held for the election of directors on a date and at a time designated by or in the manner provided in the bylaws.  Each director shall hold office for a term of one year and until such director’s successor is elected and qualified or until such director’s earlier resignation or removal; provided, however, each director elected at the annual meetings of the corporation held in 2001, 2002 and 2003 shall serve for the full three-year term to which such director was elected or until such director’s earlier resignation or removal.

(c)

No director shall stand for election on or after his or her 70^th birthday. Nominations for the election of directors may be made by the board of directors or by any stockholder entitled to vote in the election of directors.  However, any stockholder entitled to vote in the election of directors may nominate one or more persons for election as director only if written notice of such stockholder’s intent to make such nomination or nominations has been given, either by personal delivery or by United States mail, postage prepaid, to the Secretary of the corporation not later than (i) with respect to an election to be held at an annual meeting of stockholders, 45 days in advance of the calendar day on which the corporation’s proxy statement was released to stockholders in connection with the previous year’s annual meeting of stockholders and (ii) with respect to an election to be he ld at a special meeting of stockholders for the election of directors, the close of business on the seventh day following the day on which notice of such meeting is first given to stockholders.  Each such notice shall set forth:  (A) the name and address of the stockholder who intends to make the nomination or nominations and of the person or persons to be nominated; (B) a representation that the stockholder is a holder of record of stock of the corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice; (C) a description of all arrangements or understandings between such stockholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations is or are to be made by the stockholders; (D) such other information regarding each nominee proposed by such stockholder as would have been required to be included in a proxy statement filed pursuant to the proxy rules of the Securities and Exchange Commission if the nominee had been nominated by the board of directors; and (E) the consent of each nominee to serve as a director of the corporation if elected.  The chairman of any meeting of stockholders may refuse to acknowledge the nomination of any person if not made in compliance with the foregoing procedure.  Notwithstanding any other provision of this certificate of incorporation or the bylaws (and notwithstanding the fact that a lesser percentage may be specified by law, this certificate of incorporation or the bylaws), the affirmative vote of the holders of at least 80% of the voting power of the outstanding Voting Stock, voting together as a single class, shall be required to alter, amend, adopt any provision inconsistent with, or repeal this Section Fifth(c).

(d)

Newly created directorships resulting from any increase in the number of directors and any vacancies on the board of directors resulting from resignation, retirement, death, disqualification, removal, or other cause may be filled by a majority of the remaining directors then in office, even if less than a quorum, except as Article Fourth otherwise provides with respect to, if Class B Common Stock is outstanding, the election of directors by the holders of the Common Stock voting separately as a class.  Any director elected in accordance with the preceding sentence shall hold office for the remainder of the full term of the newly created or vacated directorship and until such director’s successor has been elected and has qualified.  No decrease in the number of directors constituting the board of directors shall shorten the term of any incumbent director. Notwithstanding any other provision of this certificate of incorporation or the bylaws (and notwithstanding the fact that a lesser percentage may be specified by law, this certificate of incorporation or the bylaws), the affirmative vote of the holders of at least 80% of the voting power of the outstanding Voting Stock, voting together as a single class, shall be required to alter, amend, adopt any provision inconsistent with, or repeal this Section Fifth(d).

SIXTH.  Any action required or permitted to be taken by the stockholders of the corporation must be taken at a duly called annual or special meeting of stockholders and may not be taken by any consent in writing of such holders.  Special meetings of stockholders of the corporation may be called only by a majority vote of the whole board of directors, except as otherwise required by law and except as Article Fourth otherwise provides with respect to special meetings to be called for the purpose of the election of directors by, if Class B Common Stock is outstanding, the holders of the Common Stock voting separately as a class.  Notwithstanding any other provision of this certificate of incorporation or the bylaws (and notwithstanding the fact that a lesser percentage may be specified by law, this certificate of incorporation or the bylaws), the affirmative vote of the holders of at least 80% of the voting power o f the outstanding Voting Stock, voting together as a single class, shall be required to alter, amend, adopt any provision inconsistent with, or repeal this Article Sixth.

SEVENTH.  The following provisions concerning certain actions and transactions are established:

(a)

In addition to any affirmative vote required by law or this certificate of incorporation, and except as otherwise expressly provided in paragraph (c) of this Article Seventh:

(i)

any merger or consolidation of the corporation or any Subsidiary (as hereinafter defined) with (A) any Interested Stockholder (as hereinafter defined) or (B) any other person (whether or not itself an Interested Stockholder) which is, or after such merger or consolidation would be, an Affiliate (as hereinafter defined) of any Interested Stockholder; or

(ii)

any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or in a series of transactions) to or with any Interested Stockholder or any Affiliate of any Interested Stockholder of any assets of the corporation or any Subsidiary having an aggregate Fair Market Value (as hereinafter defined) of $25 million or more; or

(iii)

the issuance or transfer by the corporation or any Subsidiary (in one transaction or in a series of transactions) of any securities of the corporation or any Subsidiary to any Interested Stockholder or any Affiliate of any Interested Stockholder in exchange for cash, securities or other property (or a combination thereof) having an aggregate Fair Market Value of $25 million or more; or

(iv)

the adoption of any plan or proposal for the liquidation or dissolution of the corporation proposed by or on behalf of any Interested Stockholder or any Affiliate of any Interested Stockholder; or

(v)

any reclassification of securities (including any reverse stock split), or recapitalization of the corporation, or any merger or consolidation of the corporation with any Subsidiary or any other transaction (whether or not with or into or otherwise involving any Interested Stockholder) which has the effect, directly or indirectly, of increasing the proportionate share of the outstanding shares of any class of Equity Security (as hereinafter defined) of the corporation or any Subsidiary which is directly or indirectly owned by any Interested Stockholder or any Affiliate of any Interested Stockholder;

shall require the affirmative vote of the holders of at least 80% of the voting power of the outstanding shares of capital stock of the corporation entitled to vote for the election of directors (the “Voting Stock”), voting together as a single class.  Such affirmative vote shall be required notwithstanding the fact that no vote may be required, or that a lesser percentage may be specified, by law or in any agreement with any national securities exchange or otherwise.

(b)

The term “Business Combination” means any transaction described in clauses (i) through (v) of paragraph (a) of this Article Seventh.

(c)

The provisions of paragraph (a) of this Article Seventh shall not be applicable to a Business Combination, and the Business Combination shall require only the affirmative vote required by law and any other provision of this certificate of incorporation, if all of the conditions specified in either of the following subparagraphs (i) or (ii) are met:

(i)

The Business Combination shall have been approved by a majority of the Continuing Directors (as hereinafter defined).

(ii)

All of the following conditions shall have been met:

(A)

The aggregate amount of the cash and the Fair Market Value as of the date of the consummation of the Business Combination of consideration other than cash to be received per share by holders of Common Stock and Class B Common Stock in the Business Combination is at least equal to the highest of the following:

(1) (if applicable) the highest per share price (including any brokerage commissions, transfer taxes and soliciting dealers’ fees) paid by the Interested Stockholder in question for any shares of Common Stock acquired by it (x) within the two-year period immediately prior to the first public announcement of the terms of the proposed Business Combination (the “Announcement Date”) or (y) in the transaction in which such Interested Stockholder became an Interested Stockholder; or

(2) the Fair Market Value per share of Common Stock on the Announcement Date; or

(3) the Fair Market Value per share of Common Stock on the date on which the Interested Stockholder in question became an Interested Stockholder (the “Determination Date”).

(B)

The aggregate amount of the cash and the Fair Market Value as of the date of the consummation of the Business Combination of consideration other than cash to be received per share by holders of any other class of outstanding Voting Stock is at least equal to the highest of the following:

(1) (if applicable) the highest per share price (including any brokerage commissions, transfer taxes and soliciting dealers’ fees) paid by the Interested Stockholder in question for any shares of such class of Voting Stock acquired by it (x) within the two-year period immediately prior to the Announcement Date or (y) in the transaction in which such Interested Stockholder became an Interested Stockholder; or

(2) (if applicable) the highest preferential amount per share to which the holders of such class of Voting Stock are entitled in the event of any voluntary or involuntary liquidation or dissolution of the corporation; or

(3) the Fair Market Value per share of such class of Voting Stock on the Announcement Date; or

(4) the Fair Market Value per share of such class of Voting Stock on the Determination Date.

(C)

The consideration to be received by holders of a particular class of outstanding Voting Stock is in cash or in the same form as the Interested Stockholder in question has previously paid for shares of such class of Voting Stock, provided that the consideration to be received by holders of Class B Common Stock must be in cash or in the same form as such Interested Stockholder has previously paid for Common Stock.  If the Interested Stockholder in question has previously paid for shares of any class of Voting Stock with varying forms of consideration, the form of consideration to be paid for shares of such class of Voting Stock purchased in the transaction in question hereunder must be either cash or the form used previously by such Interested Stockholder to acquire the largest number of shares of such class of Voting Stock.  The price determined in accordance with subparagraphs (ii)(A) and (ii)(B) of this paragraph (c) shall be subject to appropriate adjustment in the event of any stock dividend, stock split, combination of shares or similar event.

(D)

After the Interested Stockholder in question has become an Interested Stockholder and prior to the consummation of such Business Combination:  (1) except as approved by a majority of the Continuing Directors, there shall have been no failure to declare and pay, in whole or in part, at the regular date therefor any dividends (whether or not cumulative) on the outstanding stock having preference over the Common Stock as to dividends or upon liquidation; (2) there shall have been (x) no reduction in the annual rate of dividends paid on Common Stock or Class B Common Stock (except as necessary to reflect any subdivision of the Common Stock or Class B Common Stock), except as approved by a majority of the Continuing Directors, and (y) no increase in such annual rate of dividends (except as necessary to reflect any reclassification (including any reverse stock split), recapitalization, reorganization or any similar transaction which has the effect of reducing the number of outstanding shares of Common Stock or Class B Common Stock), except as approved by a majority of the Continuing Directors; and (3) such Interested Stockholder shall not have become the beneficial owner of any additional shares of Voting Stock subsequent to the transaction in which it became an Interested Stockholder.

(E)

After the Interested Stockholder in question has become an Interested Stockholder, it shall not have received the benefit, directly or indirectly (except proportionately with all other stockholders of the corporation), of any loans, advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantages provided by the corporation, whether in anticipation of or in connection with such Business Combination or otherwise.

(F)

A proxy or information statement describing the proposed Business Combination and complying with the requirements of the Securities Exchange Act of 1934 and the rules and regulations thereunder (or any subsequent provisions replacing such Act, rules or regulations) shall be mailed to the stockholders of the corporation at least 30 days prior to the consummation of such Business Combination (whether or not such proxy or information statement is required to be mailed pursuant to such Act or subsequent provisions).

(d)

For purposes of this Article Seventh:

(i)

a “person” means any individual, proprietorship, partnership, corporation or other entity, or any group of two or more of the foregoing acting together;

(ii)

“Interested Stockholder” means any person (other than the corporation or any Subsidiary) who or which:

(A)

is the beneficial owner, directly or indirectly, of 10% or more of the voting power of the outstanding Voting Stock; or

(B)

is an Affiliate of the corporation and at any time within the two-year period immediately prior to the date in question was the beneficial owner, directly or indirectly, of 10% or more of the voting power of the then outstanding Voting Stock; or

(C)

is an assignee of or has otherwise succeeded to any shares of Voting Stock which were at any time within the two-year period immediately prior to the date in question beneficially owned by an Interested Stockholder, if such assignment or succession occurred in the course of a transaction or series of transactions not involving a public offering within the meaning of the Securities Act of 1933.

(iii)

A person is a “beneficial owner” of any Voting Stock:

(A)

that such person or any of its Affiliates or Associates (as hereinafter defined) beneficially owns directly or indirectly; or

(B)

that such person or any of its Affiliates or Associates has (1) the right to acquire (whether such right is exercisable immediately or only after the passage of time or upon the occurrence of an event, or both) pursuant to any agreement, arrangement or understanding or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise, or (2) the right to vote pursuant to any agreement, arrangement or understanding; or

(C)

that is beneficially owned, directly or indirectly, by any other person with which such person or any of its Affiliates or Associates has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of any shares of Voting Stock.

(iv)

For the purpose of determining whether a person is an Interested Stockholder pursuant to subparagraph (ii) of this paragraph (d), the number of shares of Voting Stock deemed to be outstanding shall include shares deemed owned through application of subparagraph (iii) of this paragraph (d), but shall not include any other shares of Voting Stock that may be issuable pursuant to any agreement, arrangement or understanding, or upon exercise of conversion rights, warrants or options, or otherwise.

(v)

“Affiliate” and “Associate” have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as in effect on March 1, 1986.

(vi)

“Subsidiary” means any corporation of which a majority of any class of Equity Security is owned, directly or indirectly, by the corporation, provided that for the purposes of the definition of Interested Stockholder set forth in subparagraph (ii) of this paragraph (d), the term “Subsidiary” shall mean only a corporation of which a majority of each class of Equity Security is owned, directly or indirectly, by the corporation.

(vii)

“Continuing Director” means (A) any member of the board of directors who was a member of the board on April 15, 1986, (B) any member of the board of directors who is unaffiliated with the Interested Stockholder in question and who was a member of the board prior to the time that such Interested Stockholder became an Interested Stockholder, and (C) any member of the board of directors who was nominated or elected by a majority of Continuing Directors then on the board of directors.

(viii)

“Fair Market Value” means (A) in the case of stock, the highest closing sale price during the 30-day period immediately preceding the date in question of a share of such stock on the Composite Tape for New York Stock Exchange – Listed Stocks, or, if such stock is not quoted on the Composite Tape, on the New York Stock Exchange, or, if such stock is not listed on such Exchange, on the principal United States securities exchange registered under the Securities Exchange Act of 1934 on which such stock is listed, or, if such stock is not listed on any such exchange, the highest closing bid quotation with respect to a share of such stock during the 30-day period immediately preceding the date in question on the National Association of Securities Dealers, Inc. Automated Quotations System or any system then in use, or if no such quotations are available, the fair market value on the date in question of a share of such stock as determined by the board of directors in good faith and (B) in the case of property other than cash or stock, the fair market value of such property on the date in question as determined by the board of directors in good faith.

(ix)

In the event of any Business Combination in which the corporation survives, the phrase “consideration other than cash to be received” as used in subparagraphs (ii)(A) and (B) of paragraph (c) of this Article Seventh shall include the shares of Common Stock, Class B Common Stock and the shares of any other class of outstanding Voting Stock retained by the holders of such shares.

(x)

“Equity Security” has the meaning ascribed to such term in Section 3(a)(11) of the Securities Exchange Act of 1934, as in effect on March 1, 1986.

(e)

A majority of the entire board of directors shall have the power and duty to determine for purposes of this Article Seventh, on the basis of information known to the directors after reasonable inquiry, (i) whether a person is an Interested Stockholder, (ii) the number of shares of Voting Stock beneficially owned by any person, (iii) whether a person is an Affiliate or Associate of another, and (iv) whether the assets that are the subject of any Business Combination have, or the consideration to be received for the issuance or transfer of securities by the corporation or any Subsidiary in any Business Combination has, an aggregate Fair Market Value of $25 million or more.  A majority of the entire board of directors shall have the further power to interpret all of the terms and provisions of this Article Seventh.

(f)

Nothing contained in this Article Seventh shall be construed to relieve any Interested Stockholder of any fiduciary obligation imposed by law.

(g)

Notwithstanding any other provision of this certificate of incorporation or the bylaws (and notwithstanding the fact that a lesser percentage may be specified by law, this certificate of incorporation or the bylaws), the affirmative vote of the holders of at least 80% of the voting power of the outstanding Voting Stock, voting together as a single class, shall be required to alter, amend, adopt any provision inconsistent with, or repeal this Article Seventh.

EIGHTH.  The board of directors of the corporation, when evaluating any actions or transactions described in paragraph (a) of Article Seventh of this certificate of incorporation, shall give due consideration to all relevant factors, including without limitation the effect of such action or transaction upon the independence and integrity of the corporation’s publications and services and the social and economic effects of such action or transaction upon the corporation’s stockholders, employees, subscribers, readers, advertisers, customers, suppliers and other constituencies, and on the communities in which the corporation and its subsidiaries operate or are located.

NINTH.  The minimum amount of capital with which the corporation will commence business is One Thousand Dollars ($1,000).

TENTH.  The names and places of residence of the incorporators are as follows:

Guy Bancroft…………….

164 Riverway

Boston, Massachusetts

Richard B. Cole………….

64 Valentine Park

West Newton, Massachusetts

Laurence M. Lombard…...

Dedham, Massachusetts

ELEVENTH.  The corporation is to have perpetual existence.

TWELFTH.  The private property of the stockholders shall not be subject to the payment of corporate debts to any extent whatever.

THIRTEENTH.  1. In furtherance and not in limitation of the powers conferred by statute, the board of directors is expressly authorized:

(a)

To make, alter or repeal the bylaws of the corporation;

(b)

To authorize and cause to be executed mortgages and liens upon the real and personal property of the corporation;

(c)

To set apart out of any of the funds of the corporation available for dividends a reserve or reserves for any proper purpose and to abolish any such reserve in the manner in which it was created;

(d)

By resolution or resolutions passed by a majority of the whole board, to designate one or more committees, each committee to consist of two or more of the directors of the corporation, which, to the extent provided in said resolution or resolutions or in the bylaws of the corporation, shall have and may exercise the powers of the board of directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it.  Such committee or committees shall have such name or names as may be stated in the bylaws of the corporation or as may be determined from time to time by resolution adopted by the board of directors;

(e)

When and as authorized by the affirmative vote of the holders of a majority of the stock issued and outstanding having voting power given at a stockholders’ meeting duly called for that purpose, or when authorized by the written consent of the holders of a majority of the voting stock issued and outstanding, to sell, lease or exchange all of the property and assets of the corporation, including its good will and its corporate franchises, upon such terms and conditions and for such consideration, which may be in whole or in part shares of stock in, and/or other securities of, any other corporation or corporations, as its board of directors shall deem expedient and for the best interests of the corporation;

(f)

From time to time to determine whether and to what extent, at what time and place and under what conditions and regulations the accounts and books of the corporation or any of them shall be open to the inspection of any stockholders; and no stockholder shall have any right to inspect any account or book or document of the corporation except as conferred by statute or bylaws or as authorized by a resolution of the stockholders or board of directors.

2.  Notwithstanding any other provision of this certificate of incorporation or the bylaws (and in addition to any different vote that may be specified by law, this certificate of incorporation or the bylaws), so long as there shall be any Class B Common Stock outstanding, (x) Section 43 of the Bylaws of the corporation shall not be amended, altered or repealed, and no bylaw inconsistent with Section 43 of the Bylaws may be adopted, without either (a) if adopted by the stockholders, the affirmative vote of a majority of the outstanding shares of Common Stock and the affirmative vote of a majority of the outstanding shares of Class B Common Stock, each voting separately as a class, or (b) if adopted by the directors, the affirmative vote of at least 80% of the directors then in office and (y) this paragraph 2 shall not be amended, altered or repealed without the affirmative vote of a majority of the outs tanding shares of Common Stock and the affirmative vote of a majority of the outstanding shares of Class B Common Stock, each voting separately as a class.

FOURTEENTH.  Whenever a compromise or arrangement is proposed between this corporation and its creditors or any class of them and/or between this corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of this corporation or of any creditor or stockholder thereof, or on the application of any receiver or receivers appointed for this corporation under the provisions of Section 291 of Title 8 of the Delaware Code or under any similar provisions enacted in place thereof or on the application of trustees in dissolution or of any receiver or receivers appointed for this corporation under the provisions of Section 279 of Title 8 of the Delaware Code or under any similar provisions enacted in place thereof, order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockh olders of this corporation, as the case may be, to be summoned in such manner as the said Court directs.  If a majority in number representing three-fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of this corporation as consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the Court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders or class of stockholders of this corporation, as the case may be, and also on this corporation.

FIFTEENTH.  A director of the corporation shall not be disqualified by his office from dealing or contracting with the corporation either as a vendor, purchaser or otherwise, nor shall any transaction or contract of the corporation be void or voidable by reason of the fact that any director or any firm of which any director is a member or any corporation of which any director is a shareholder, officer or director, is in any way interested in such transaction or contract, provided that such transaction or contract is or shall be authorized, ratified or approved (1) by a vote of a majority of a quorum of the board of directors without including in such majority or quorum any director so interested or member of a firm so interested, or a shareholder, officer or director of a corporation so interested, or (2) by the written consent of the holders of record of a majority of the outstanding shares of stock of the corporation entitled to vote, or (3) by the affirmative vote of the holders of a majority of stock of the corporation represented at any meeting at which a quorum is present, and provided further that such interest shall have been fully disclosed or otherwise known to the directors or stockholders authorizing, ratifying or approving such transaction or contract; nor shall any director be liable to account to the corporation for any profits realized by or from or through any such transaction or contract of the corporation authorized, ratified or approved as aforesaid by reason of the fact that he, or any firm of which he is a member or any corporation of which he is a shareholder, officer or director was interested in such transaction or contract.  Nothing herein contained shall create liability in the events above described or prevent the authorization, ratification or approval of such transactions or contracts in any other manner permitted by law.

SIXTEENTH.  Meetings of stockholders may be held without the State of Delaware, if the bylaws so provide.  The books of the corporation may be kept (subject to any provision contained in the statutes) outside of the State of Delaware at such place or places as may be from time to time designated by the board of directors or in the bylaws of the corporation.  Elections of directors need not be by ballot unless the bylaws of the corporation shall so provide.

SEVENTEENTH.  No director of the corporation shall be liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director’s duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv) for any transaction from which the director derived an improper personal benefit.  Neither the amendment nor the repeal of this Article Seventeenth, nor the adoption of any provision of the certificate of incorporation inconsistent with this Article Seventeenth, shall eliminate or reduce the effect of this Article Seventeenth on any cause of action that arises out of an act or omission of a director occurring prior to such amendment, repeal or adoption.

EIGHTEENTH.  The corporation reserves the right to amend, alter, change or repeal any provision contained in this certificate of incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation.

EX-3

Exhibit 3.2

BYLAWS

OF

DOW JONES & COMPANY, INC.

(Amended and Restated as of April 20, 2005)

OFFICES AND RECORDS

1.

The corporation shall maintain a registered office in Delaware, and may maintain such other offices and keep its books, documents and records at such places within or without Delaware as may from time to time be designated by the board of directors or the business of the corporation may require.

MEETINGS OF STOCKHOLDERS

2.

All meetings of the stockholders shall be held at such place within or without Delaware as the board of directors shall designate.  The place at which any given meeting is to be held shall be specified in the notice of such meeting.

3.

An annual meeting of the stockholders of the corporation for the election of directors and for the transaction of any other proper business shall be held either (i) at 11:00 a.m. on the third Wednesday in April, unless such day is a legal holiday, in which event the meeting shall be held at the same time on the next business day, or (ii) at such other time and date as the board of directors shall designate.

4.

Except as otherwise provided by the laws of Delaware or by the certificate of incorporation, a quorum for the transaction of business at meetings of the stockholders, other than the election of directors to be elected by the holders of common stock voting separately as a class, shall consist of the holders of a majority of the votes of the shares of stock entitled to vote thereat, present in person or represented by proxy.  A quorum for the election of directors to be elected by the holders of common stock voting separately as a class shall consist of the holders of a majority of the shares of common stock entitled to vote thereat, present in person or represented by proxy.  Whether or not a quorum is present, the holders of a majority of the votes of the shares of stock present in person or by proxy at any duty called meeting and entitled to vote thereat may adjourn the meeting from time to time to another time or p lace, at which time, if a quorum is present, any business may be transacted which might have been transacted at the meeting as originally scheduled.  Notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken, unless the adjournment is for more than thirty days or a new record date is fixed for the adjourned meeting, in which event a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

5.

Every stockholder having the right to vote at a meeting of stockholders shall be entitled to exercise such vote in person or by proxy appointed by an instrument in writing subscribed by such stockholder or by his duly authorized attorney-in-fact.  At every meeting of the stockholders every holder of common stock shall be entitled to one (1) vote in person or by proxy for each share of common stock standing in his name on the stock transfer records of the corporation and every holder of class B common stock shall be entitled to ten (10) votes in person or by proxy for each share of class B common stock standing in his name on the stock transfer records of the corporation; provided that at every meeting of the stockholders called for the election of directors of the corporation (A) the holders of common stock, voting separately as a class, shall be entitled to elect seven (7) of the directors to be elected at such meeting, and (B) the holders of class B common stock and common stock, voting as a separate class, shall be entitled to elect the remaining directors to be elected at such meeting.  However if paragraph a. of Article Fifth of the certificate of incorporation is at any time amended to permit the number of directors of the corporation to exceed eighteen, then at every meeting of the stockholders called for the election of directors, (A) the holders of common stock, voting separately as a class, shall be entitled to elect the greater of (x) seven (7) directors to be elected at such meeting, or (y) one-third (1/3) of the number of directors to be elected at such meeting, and if one-third (1/3) of such number of directors is not a whole number, the next higher whole number of directors to be elected at such meeting), and (B) the holders of class B common stock and common stock, voting as a separate class, shall be entitled to elect the remaining directors to be elected at such meeting.  Except as otherwise provi ded by the laws of Delaware, by the certificate of incorporation or by these bylaws, all elections shall be determined and all questions decided by a plurality of the votes cast in respect thereof, a quorum being present.  Every reference in these bylaws to a majority or other proportion of shares of stock shall refer to such majority or other proportion of the votes of such shares of stock.

6.

The secretary shall prepare and make, at least ten days before every meeting of the stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder.  Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of meeting, or, if not so specified, at the place where the meeting is to be held.  The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.

7.

Notice of each meeting of the stockholders shall be given by the secretary, not less than ten nor more than sixty days before the meeting, to each stockholder entitled to vote at such meeting.  Such notice shall set forth the place, date and hour of the meeting, and, in the case of a special meeting, the purpose or purposes thereof, and the business transacted at any special meeting shall be confined to the purposes stated in such notice.  No such notice of any given meeting need be given to any stockholder who files a written waiver of notice thereof with the secretary, either before or after the meeting.  Attendance of a person at a meeting of stockholders, in person or by proxy, shall constitute a waiver of notice of such meeting, except when the stockholder attends the meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.

BOARD OF DIRECTORS

8.

The business of the corporation shall be managed by its board of directors.  Resignations of directors must be in writing and shall be effective upon the date of receipt thereof by the secretary or upon an effective date specified therein, whichever date is later, unless acceptance is made a condition of the resignation, in which event it shall be effective upon acceptance by the board.  Except for directors who were in office on October 31, 1977, no director who is an employee of the corporation or any of its subsidiaries at the time of his election as a director shall be eligible for reelection as a director after the termination of his employment.

9.

The board of directors may by resolution request any retired director to serve in an advisory capacity.  Service in an advisory capacity shall be at the pleasure of the board and upon such terms and conditions and for such compensation as the board may determine.  A retired director serving in such an advisory capacity may attend meetings of the board and take part in discussions thereat but may not vote upon any matter thereat and shall not be considered a director as that term is used in these bylaws or in the certificate of incorporation.

10.

The board of directors may exercise all such powers of the corporation and do all such lawful acts and things as are not by the laws of Delaware, by the certificate of incorporation or by these bylaws directed or required to be exercised or done by the stockholders.

MEETINGS OF THE BOARD

11.

The first meeting of the board of directors after the annual meeting of stockholders may be held without notice, either immediately after said meeting of stockholders, or at such other time and at such place, whether within or without Delaware, as shall be determined by the board.

12.

Regular meetings of the board may be held without notice at such time and place, whether within or without Delaware, as shall from time to time be determined by the board.

13.

Special meetings of the board of directors shall be called by the secretary at the request in writing of the chairman of the board or the president or of any two directors.  Such request shall state the purpose or purposes of the proposed meeting.  Such meetings may be held at any place, whether within or without Delaware.  Notwithstanding the provisions of section 40 of these bylaws, notice of each such meeting shall be given by the secretary or the chairman of the board to each director at least four hours before the meeting; such notice may be given by telephone.  Such notice shall set forth the time and place at which the meeting is to be held and the purpose or purposes thereof.  No such notice of any given meeting need be given to any director who files a written waiver of notice thereof with the secretary, either before or after the meeting.

14.

At meetings of the board of directors, a majority of the directors then in office shall constitute a quorum for the transaction of business unless there is an even number of directors in office in which event one-half thereof shall constitute such a quorum; provided, however that in no event shall such a quorum consist of less than one-third of the total number of directors fixed by or pursuant to these bylaws.  In the absence of a quorum at any duly scheduled or duly called meeting, a majority of the directors present may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present, at which time any business may be transacted which might have been transacted at the meeting as originally scheduled.

15.

Any action required or permitted to be taken at any meeting of the board of directors or of any committee thereof may be taken without a meeting if all members of the board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the board or committee.

EXECUTIVE COMMITTEE

16.

An executive committee of three or more directors may be designated by resolution passed by a majority of the whole board.  The board may designate one or more directors as alternate members of the executive committee, who may replace any absent or disqualified member at any meeting of the executive committee.  During the intervals between meetings of the board the executive committee shall advise and aid the officers of the corporation in all matters concerning its interests and the management of its business, and generally perform such duties as may be directed by the board of directors from time to time.  The executive committee shall possess and may exercise all the powers of the board while the board is not in session, except power to amend the bylaws and to fill newly created directorships and vacancies on the board or the executive committee.  Unless he resigns, dies or is removed prior thereto, each member of the executive committee shall continue to hold office until the first meeting of the board of directors after the annual meeting of stockholders next following his designation, and until his successor has been designated.  Resignations of members of the executive committee must be in writing and shall be effective upon the date of receipt thereof by the secretary or upon the effective date specified therein, whichever date is later, unless acceptance is made a condition of the resignation, in which event it shall be effective upon acceptance by the board.  Any member of the executive committee may be removed at any time, with or without cause, by a majority vote of the whole board.  Regular meetings of the executive committee may be held without notice at such time and place as shall from time to time be determined by the executive committee.  Special meetings of the executive committee shall be called by the secretary at the request of the chairman of the board or of the presi dent or of any two members of the committee.  Notice of each special meeting of the executive committee shall be given by the secretary to each member of the committee.  No such notice of any given meeting need be given to any member of the executive committee who attends the meeting or who files a written waiver of notice thereof with the secretary, either before or after the meeting.

17.

A quorum for the transaction of business at meetings of the executive committee shall consist of a majority of the members of the committee then in office.  If the board has not designated alternate members of the executive committee, or if all such alternates are absent or disqualified, the members of the committee present at any meeting and not disqualified from voting, whether or not they constitute a quorum, may n the absence or disqualification of any member of the committee unanimously appoint another member of the board of directors to act at the meeting in the place of such absent or disqualified member.

18.

The executive committee shall keep regular minutes of its proceedings when any action is taken other than recommendations to the board and report the same to the board also.

COMPENSATION OF DIRECTORS

19.

The directors as such, and as members of any special or standing committee, may receive such compensation for their services as may be fixed from time to time by resolution of the board.  Nothing herein contained shall be construed to preclude any director from serving the corporation in any other capacity and receiving compensation therefor.

OFFICERS

20.

The officers of the corporation shall be chosen by the board of directors.  The principal officers shall be a chairman of the board, a president, a vice chairman, one or more vice presidents (one or more of whom may be designated as executive or senior vice presidents or by other designations), a secretary and a treasurer.  Two or more offices may be held by the same person.  The chairman of the board, the president and the vice chairman shall be chosen by the directors from their own number.  The salaries of the principal officers of the corporation shall be fixed by the board.

21.

The board may appoint such other officers, assistant officers and agents as it shall deem necessary, who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined by the board.

22.

Unless he resigns, dies or is removed prior thereto, each officer of the corporation shall hold office until his successor has been chosen and has qualified.  Any person elected or appointed by the board of directors may be removed at any time, with or without cause, and all vacancies (however arising) may be filled at any time, by the affirmative vote of a majority of the directors then in office.  Any other employee of the corporation may be removed at any time, with or without cause, by the chairman of the board or the president or by any superior of such employee to whom the power of removal has been delegated by the chairman of the board or the president.

CHAIRMAN OF THE BOARD

23.  (a)

The chairman of the board shall preside at all meetings of the stockholders and directors.

       (b)

He shall be the chief executive officer and have general supervision and direction of the business of the corporation, shall see that all resolutions of the board are carried into effect, and shall be a member of all committees of the board except any audit or compensation committee appointed by the board.

       (c)

He shall have all the general powers and duties usually vested in the chief executive officer of a corporation, and in addition shall have such other powers and perform such other duties as may be prescribed from time to time by the board of directors.

PRESIDENT

24.  (a)

The president shall be the chief operating officer of the corporation.

       (b)

He shall be vested with all the powers and perform all the duties of the chairman of the board in the absence or disability of the chairman of the board.

VICE CHAIRMAN AND VICE PRESIDENTS

25.

The vice chairman and each vice president shall have such powers and perform such duties as may be prescribed from time to time by the board of directors, the chairman of the board or the president.  In the absence or disability of the chairman of the board and the president, the vice chairman shall be vested with all the powers and perform all the duties of said officers, and the performance of any act or the execution of any instrument by the vice chairman in any instance in which such performance or execution would customarily have been accomplished by the chairman of the board or the president shall constitute conclusive evidence of the absence or disability of the chairman of the board and the president.

SECRETARY

26.

The secretary shall attend all meetings of the stockholders and record all votes and the minutes of all proceedings in a book to be kept for that purpose.  He shall give, or cause to be given, notice of all meetings of the stockholders and all meetings of directors when notice is required by these bylaws.  He shall have custody of the seal of the corporation and, when authorized by the board of directors, or when any instrument requiring the corporate seal to be affixed shall first have been signed by the chairman of the board, the president, the vice chairman or a vice president, shall affix the seal to such instrument and shall attest the same by his signature.  He shall have such other powers and perform such other duties as may be prescribed from time to time by the board of directors or the chairman of the board or the president.

ASSISTANT SECRETARY

27.

If the board appoints one or more assistant secretaries, each assistant secretary shall be vested with all the powers and authorized to perform all the duties of the secretary in his absence or disability.  The performance of any act or the execution of any instrument by an assistant secretary in any instance in which such performance or execution would customarily have been accomplished by the secretary shall constitute conclusive evidence of the absence or disability of the secretary.  Each assistant secretary shall perform such other duties as may be prescribed from time to time by the board of directors or the chairman of the board or the president or the secretary.

TREASURER

28.  (a)

The treasurer shall have custody of the corporate funds and securities, shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the corporation in such depositaries as may be designated by the board of directors.

       (b)

He shall disburse the funds of the corporation as ordered by the board, taking proper vouchers for such disbursements, and shall render to the chairman of the board, the president and the board of directors, at the regular meetings of the board, or whenever they may require it, an account of all his transactions as treasurer and of the financial condition of the corporation.

       (c)

If required by the board of directors, he shall give the corporation a bond, in a sum and with one or more sureties satisfactory to the board, for the faithful performance of the duties of his office and for the restoration to the corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the corporation.

       (d)

He shall have such other powers and perform such other duties as may be prescribed from time to time by the board of directors or the chairman of the board or the president.

ASSISTANT TREASURERS

29.

If the board appoints one or more assistant treasurers, each assistant treasurer shall be vested with all the powers and authorized to perform all the duties of the treasurer in his absence or disability.  The performance of any act or the execution of any instrument by an assistant treasurer in any instance in which such performance or execution would customarily have been accomplished by the treasurer shall constitute conclusive evidence of the absence or disability of the treasurer.  Each assistant treasurer shall perform such other duties as may be prescribed from time to time by the board of directors or the chairman of the board or the president or the treasurer.

DUTIES OF OFFICERS MAY BE DELEGATED

30.

In the case of the absence of any officer of the corporation, or for any other reason that the board may deem sufficient, the board may delegate for the time being the powers or duties, or any of them, of such officer to any other officer or to any director.

POWERS OF EXECUTION

31.  (a)

All checks and other demands for money and notes and other instruments for the payment of money shall be signed on behalf of the corporation by the treasurer or an assistant treasurer or by such other person or persons as the board of directors or the chairman of the board or the president and the treasurer jointly may from time to time designate.

       (b)

All contracts, deeds and other instruments to which the seal of the corporation is affixed shall be signed on behalf of the corporation by the chairman of the board, by the president, by the vice chairman, by any vice president, or by such other person or persons as the board of directors may from time to time designate, and shall be attested by the secretary or an assistant secretary.

       (c)

All other contracts, deeds and instruments shall be signed on behalf of the corporation by the chairman of the board, by the president, by the vice chairman, by any vice president, or by such other person or persons as the board of directors or the chairman may from time to time designate.

       (d)

All shares of stock owned by the corporation in other corporations shall be voted on behalf of the corporation by such persons and in such manner as shall be prescribed by the board of directors.

INDEMNIFICATION OF DIRECTORS,

OFFICERS, EMPLOYEES AND AGENTS

32.

The corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding to the full extent permitted by the General Corporation Law of Delaware, upon such determination having been made as to his good faith and conduct as is required by said General Corporation Law.  Expenses incurred in defending a civil or crimi nal action, suit or proceeding shall be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf the director, officer, employee or agent to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the corporation as authorized by these bylaws.

CERTIFICATES OF STOCK

33.

The certificates of stock of the corporation shall be numbered and shall be entered in the books of the corporation as they are issued.  They shall exhibit the holder’s name and number of shares and shall be signed by (i) the chairman of the board or president or vice chairman or a vice president and (ii) the treasurer or an assistant treasurer or the secretary or an assistant secretary.  Any or all of the signatures on any stock certificate may be a facsimile.  If any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a stock certificate shall cease to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if he were such an officer, transfer agent or registrar at the date of issue.

TRANSFERS OF STOCK

34.

Transfers of stock shall be made on the books of the corporation only by the person named in the certificate or by his attorney, lawfully constituted in writing, and upon surrender of the certificate therefor.

DATE FOR DETERMINING STOCKHOLDERS OF RECORD

35.

In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the board of directors may fix, in advance, a record date, which shall not be more than sixty nor less than ten days before the date of such meeting, nor more than sixty days prior to any other action.

REGISTERED STOCKHOLDERS

36.

The corporation shall be entitled to treat the holder of record of any share or shares of stock as the holder in fact thereof, and accordingly shall not be bound to recognize any equitable or other claim to or interest in such share on the part of any other person, whether or not it shall have express or other notice thereof, save as expressly provided by the laws of Delaware.

LOST CERTIFICATES

37.

Any person claiming a certificate of stock to be lost, stolen or destroyed shall make an affidavit of that fact in form satisfactory to the corporation, and shall, if the board of directors so requires, give the corporation a bond of indemnity, in form satisfactory to the corporation, whereupon a new certificate may be issued of the same tenor and for the same number of shares as the one alleged to be lost, stolen or destroyed.  The board of directors in its discretion may, as a prerequisite to the issuance of a new certificate, impose such additional lawful requirements as it sees fit.

DIVIDENDS

38.

Dividends upon the capital stock of the corporation may be declared by the board of directors at any regular or special meeting as provided by the laws of Delaware and the certificate of incorporation.  Before payment of any dividend or making any distribution of profits, there may be set aside out of the surplus or net profits of the corporation such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve fund to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purposes as the directors shall think conducive to the interests of the corporation.

SEAL

39.

The corporate seal shall have inscribed thereon the name of the corporation, the year of its organization and the words “Corporate Seal. Delaware.”

NOTICES

40.

Whenever, under the provisions of these bylaws, notice is required to be given to any director or stockholder, such notice may be given in writing (i) by mail, by depositing the same in the United States mail, postage prepaid, or (ii) by telegram, by delivering the same payment of the applicable tariff to a telegraph company for transmission, in either case addressed to such director or stockholder at such address as appears on the records of the corporation, and such notice shall be deemed to be given at the time when the same shall be so mailed or so delivered to a telegraph company.

AMENDMENTS

41.

These bylaws may be altered or amended (i) at any regular meeting of the stockholders by the affirmative vote of the holders of a majority of the stock issued and outstanding and entitled to vote thereat or (ii) at any regular meeting of the board of directors by the affirmative vote of a majority of the directors then in office or (iii) at any special meeting of the stockholders or of the directors by such votes if notice of the proposed alteration or amendment shall have been contained in the notice of such meeting.

FISCAL YEAR

42.

The fiscal year of the corporation shall be the calendar year.

DIRECTOR MATTERS

43.

For so long as there shall be any Class B Common Stock outstanding, (a) the number of directors shall be fixed at sixteen and (b) no Management Person or Bancroft Family Representative shall be elected or appointed as a director of the corporation unless, after giving effect to such election or appointment, a majority of the directors of the corporation then in office shall be persons who are neither Management Persons nor Bancroft Family Representatives.  A “Management Person” means any person who (1) is an officer or employee of the corporation or any of its subsidiaries, or (2) has an immediate family member (as defined in the General Commentary to Section 303A.02(b) of the Listed Company Manual of the New York Stock Exchange as in effect as of February 16, 2005) who is an executive officer of the corporation.  A “Bancroft Family Representative” means (a) any Bancroft Fa mily Member; (b) any natural person who is a trustee of any Bancroft Trust; or (c) any natural person who is an employee, officer, director, partner or manager (or person holding a like position) of one or more Bancroft Family Members, trustees of Bancroft Trusts, Bancroft Charitable Organizations or Bancroft Entities.  “Bancroft Family Member” means any lineal descendent of Jane W. W. Bancroft and any immediate family member of any such descendent.  For purposes of the foregoing, any person who is or was legally adopted by a lineal descendent of Jane W. W. Bancroft shall be deemed to be a lineal descendent of Jane W. W. Bancroft.  “Bancroft Trust” means any trust (including a voting trust) primarily for the benefit of current or future Bancroft Family Members, Bancroft Charitable Organizations or Bancroft Entities.  “Bancroft Charitable Organization” means any organization contributions to which are deductible for federal income, estate or gift tax purposes that was established by one or more Bancroft Family Members, trustees of Bancroft Trusts or Bancroft Entities.  “Bancroft Entities” means any corporation, limited liability company, partnership or similar entity a majority of the common equity interests of which are beneficially owned by one or more Bancroft Family Members, trustees of Bancroft Trusts, Bancroft Charitable Organizations or other Bancroft Entities.”

EX-10

Exhibit 10.1

DOW JONES & COMPANY, INC.

NONQUALIFIED STOCK OPTION AGREEMENT

AGREEMENT between Dow Jones & Company, Inc., a Delaware corporation (hereinafter called the "Company"), and the employee to whom options have been granted and who has agreed to be subject to the terms of this Agreement (the "Optionee"),

W I T N E S S E T H:

1.  Grant of Option.  Pursuant to the provisions of the Dow Jones 2001 Long Term Incentive Plan (the "Plan") the Company hereby grants to Optionee, subject to the terms and conditions of the Plan and subject further to the terms and conditions herein set forth, the right and option to purchase from the Company all or any part of the aggregate number of shares of Common Stock ($1.00 par value) of the Company ("Common Stock") of which Optionee has been given notice by the Company ("Notice"), as of the Date of Grant and at the Exercise Price set forth in such Notice, such option to be exercised as hereinafter provided.  This option is not intended to be, and will not be treated as an "incentive stock option."

2.  Terms and Conditions.  The option is subject to the following terms and conditions:

(a)  Expiration Date.  The option shall expire ten years after the Date of Grant (the "Expiration Date").

(b)  Exercise of Option.  Subject to paragraph 2(d) hereof, this option may be exercised on or after the vesting dates set forth in the following schedule, to the extent provided therein, provided the Optionee shall have remained in the employ of the Company or of an affiliate of the Company as defined in the Plan (any such affiliate being hereinafter called an "Affiliate") through such vesting dates:

Portion of Option Exercisable

Vesting Date

One Hundred Percent (100%)  

Third Anniversary of Date of Grant

This option may be exercised, to the extent exercisable by its terms, in whole or from time to time in part at any time prior to the expiration thereof.

(c)  Payment of Purchase Price Upon Exercise.  Any exercise of this option shall be effected through a Merrill Lynch program for Plan participants (or any successor program designated by the Company).  The option shall be exercised and the purchase price paid by any of the methods prescribed by the Company at the time of exercise.  Currently, options may be exercised, and the purchase price paid, by one or any combination of permissible methods including:  (a) a Cash Purchase Exercise; (b) a Stock Swap Exercise using shares of Common Stock held by the Optionee for at least six months and having a total fair market value on the date of exercise equal to the purchase price; and (c) a Cashless Exercise in which Merrill Lynch will sell shares of Common Stock issued in connection with the Optionee’s exercise (either all such shares or as many shares as are needed to cover the Optionee&# 146;s exercise costs, as the Optionee directs) and remit the purchase price to the Company.  

(d)  Exercise in the Event of Death or Termination of Employment.

(1)  Notwithstanding any provision of paragraph 2(b) to the contrary, if Optionee's employment by the Company or an Affiliate shall terminate because of his or her death or permanent disability, then this option may be exercised in full by Optionee, or by Optionee's Beneficiary as hereinafter defined or, absent a designation of Beneficiary, by the person or persons to whom Optionee's rights under this option pass by will or applicable law, or if no such person has such right, by Optionee's executors or administrators, at any time, or from time to time, but in no event later than the Expiration Date.  If, upon the termination of Optionee’s employment because of his or her retirement, Optionee shall have attained both 62 years of age and ten or more years of service with the Company or an Affiliate, then this option shall continue to vest in accordance with the vesting schedule set forth in paragraph 2( b) and, upon vesting, shall be exercisable to the same extent as if Optionee’s employment had not terminated.  

(2)  If Optionee's employment by the Company or an Affiliate shall terminate for any reason other than death, permanent disability or retirement after having attained both 62 years of age and ten or more years of service with the Company or an Affiliate, this option may be exercised by Optionee, but only to the extent exercisable on the date of such termination, at any time, or from time to time, through the 90th day (or for such longer period as the Compensation Committee (the "Committee"), appointed pursuant to Section 3(a) of the Plan, in its sole discretion, shall determine) after the date of such termination of employment, but no later than the Expiration Date; provided, however, that in the case of termination for cause, all right to exercise this option shall terminate at the date of such termination of employment.  

     (3)  Optionee shall be deemed to be terminated for “cause” if he or she is to be terminated because he or she (i) has been convicted of, or has pleaded guilty to, a felony, (ii) is abusing alcohol or narcotics, (iii) has committed an act of fraud, material dishonesty or gross misconduct in connection with the Company’s business (including, without limitation, an act that constitutes a material violation of the Company’s Code of Conduct), or (iv) has willfully and repeatedly refused to perform his or her duties after reasonable demand for such performance has been made by the Company.

(e)  Forfeiture of Option.  Notwithstanding any provision of paragraph 2(b) or 2(d) to the contrary, if Optionee provides services to a competitor of the Company or an Affiliate, the Committee may in its sole discretion determine that the vested and unvested portions of this option shall be forfeited.  Services to a competitor include, but are not limited to, services as an employee, a consultant or as a non-employee director of such competitor.  In addition, if Optionee violates the Dow Jones Code of Conduct, any fiduciary duties owed to the Company, or any other restrictive covenants which he or she is obligated to honor, including but not limited to non-solicitation of employees, the Committee may in its sole discretion determine that the vested and unvested portions of this option shall be forfeited.

(f)  Transferability of Option.  Optionee may transfer all or any portion of this option, in accordance with rules which may be established by the Committee, to (i) his or her spouse, former spouse, parents, stepparents, children, stepchildren, grandchildren, grandparents, siblings, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, sister-in-law, including adoptive relationships, or any person sharing the Optionee's household (other than a tenant or employee) ("Family Members"), (ii) a trust in which the Family Members have more than 50% of the beneficial interest, (iii) a foundation in which the Family Members (or the Optionee) control the management of assets, and (iv) any entity in which Family Members (or the Optionee) own more than 50% of the voting interests.  Following such a transfer, (x) this option shall not again be transferable other t han by will or by the laws of descent and distribution; (y) this option shall continue to be subject to the same terms and conditions that were applicable immediately prior to transfer, and (z) the term “Optionee” shall be deemed to refer to the transferee for all purposes of this Agreement except as otherwise provided in this paragraph 2(f).  The events of termination of employment of paragraph 2(d) shall continue to be applied with respect to the original Optionee, following which this option shall be exercisable by the transferee only to the extent, and for the periods, specified by such paragraph 2(d).

 (g)  Adjustments in Event of Change in Common Stock.  In the event of any change in the Common Stock of the Company by reason of any stock dividend, recapitalization, reorganization, merger, consolidation, split-up, combination or exchange of shares, or any rights offering to purchase Common Stock at a price substantially below fair market value, or of any similar change affecting the Common Stock, the number and kind of shares subject to this option and the purchase price per share shall be appropriately adjusted consistent with such change in such manner as the Committee may deem equitable to prevent substantial dilution or enlargement of the rights granted to Optionee hereunder.  Any adjustment so made shall be final and binding upon Optionee.

(h)  Optionee Has No Rights as a Stockholder.  Optionee shall have no rights as a stockholder with respect to any shares of Common Stock subject to this option prior to the date of issuance to him or her of a certificate or certificates for such shares.

(i)  Option Confers No Rights with Respect to Continuance of Employment.  This option shall not confer upon Optionee any right with respect to continuance of employment by the Company or any Affiliate, nor shall it interfere in any way with the right of Optionee's employer to terminate Optionee's employment at any time.

(j)  Compliance with Law and Regulations.  This option and the obligation of the Company to sell and deliver shares hereunder, shall be subject to all applicable federal and state laws, rules and regulations and to such approvals by any government or regulatory agency as may be required.  The Company shall not be required to issue or deliver any certificates for shares of Common Stock prior to (i) the listing of such shares on any stock exchange on which the Common Stock may then be listed, and (ii) the completion of any registration or qualification of such shares under any federal or state law, or any ruling or regulation of any government body which the Company shall, in its sole discretion, determine to be necessary or advisable.

(k)  Cancellation of Option.  The Committee may, with the consent of the Optionee, from time to time cancel all or any portion of this option then subject to exercise, and the Company's obligation in respect of such option may be discharged either by (i) payment to the Optionee of an amount in cash equal to the excess, if any, of the fair market value at such time of the shares subject to the portion of the option so cancelled over the aggregate purchase price of such shares, (ii) the issuance or transfer to the Optionee of shares of Common Stock of the Company with a fair market value at such time equal to any such excess, or (iii) a combination of cash and shares with a combined value equal to any such excess, all as determined by the Committee in its sole discretion.

(l)  Designation of Beneficiary.  Optionee may file with the Company a written designation of a beneficiary or beneficiaries hereunder (the "Beneficiary") and may from time to time revoke or change any such designation.  Any designation of Beneficiary shall be controlling over any other disposition, testamentary or otherwise; provided, however, that if the Committee shall be in doubt as to the entitlement of any such Beneficiary to any rights hereunder, the Committee may determine to recognize only the legal representative of Optionee, in which case the Company, the Committee and the members thereof shall not be under any further liability to anyone.

3.  Investment Representation.  The Committee may request that the Optionee (or any transferee, Beneficiary, or legal representative) furnish to the Company, at the time of exercise of all or any part of this option, an agreement (in such form as the Committee may specify) in which Optionee or such other person represents that the shares acquired by him or her upon exercise are being acquired for investment and not with a view to the sale or distribution thereof.  Upon such request, delivery of such representation prior to the delivery of any shares issued upon the exercise of an option and prior to the expiration of the option period shall be a condition precedent to the right of the Optionee or such other person to purchase any shares.

4.  Optionee Bound by Plan.  Optionee hereby acknowledges that the Company has made a copy of the Plan available to him or her and Optionee agrees to be bound by all the terms and provisions thereof.

5.  Withholding of Taxes.  The Committee in its discretion may cause to be made as a condition precedent to the issuance of any shares hereunder appropriate arrangements for the withholding of any federal, state, foreign or local taxes.

6.  Notices.  Any notice hereunder to the Company shall be addressed to it at its offices, P.O. Box 300, Princeton, New Jersey 08543-0300, Attention: Stock Plan Administrator, and any notice hereunder to Optionee shall be addressed to him or her at his or her address as shown on the Company's records, subject to the right of either party to designate at any time hereafter in writing some other address.

IN WITNESS WHEREOF, Dow Jones & Company, Inc. has caused this Agreement to be executed on its behalf by a Vice President and the Optionee has accepted the terms of this Agreement by electronic signature, both as of the Date of Grant.

	Dow Jones & Company, Inc.
	/s/ James A. Scaduto
By:	James A. Scaduto
	Vice President, Human Resources

EX-10

Exhibit 10.2

DOW JONES & COMPANY, INC.
CONTINGENT STOCK RIGHT AGREEMENT

AGREEMENT between Dow Jones & Company, Inc., a Delaware corporation (the "Company"), and the employee to whom a Contingent Stock Right has been granted and who has agreed to be subject to the terms of this Agreement (the "Grantee"),

W I T N E S S E T H:

1.  Grant of Contingent Stock Right.  Pursuant to the provisions of the Dow Jones 2001 Long Term Incentive Plan (the "Plan"), the Company hereby grants to Grantee, subject to the terms and conditions of the Plan and subject further to the terms and conditions herein set forth, a Contingent Stock Right with respect to the number of shares of Common Stock ($1.00 par value) of the Company ("Common Stock") of which Grantee has been given notice by the Company ("Notice") as of the Date of Grant set forth in such Notice (the "Maximum Award").

2.  Terms and Provisions.  The Contingent Stock Right is subject to the following terms and provisions:

     (a)  Performance Period.  The Performance Period shall be the three calendar years ____ through ____.

     (b)  Performance Criteria.  The Compensation Committee appointed by the Board of Directors of the Company to administer the Plan (the "Committee") shall employ such criteria for evaluating the performance of the Grantee and the Company, an affiliate of the Company as defined in the Plan (any such affiliate being hereinafter called an "Affiliate"), or a division or operation of the Company, over the Performance Period as the Committee shall deem appropriate in determining whether and to what extent the Maximum Award shall be earned (the "Performance Criteria").   

     (c)  Dividend Equivalents.  Grantee shall be entitled to receive payment of the same amount of cash as he or she would have received as cash dividends if, on each dividend record date during the entire Performance Period, Grantee had been the holder of record of the number of shares of Common Stock in the Maximum Award (as adjusted pursuant to paragraph 5 hereof).  

     (d)  Final Awards.

        (i) Determination of Final Awards.  Within 90 days preceding or following the completion of the Performance Period, the Committee shall determine the percentage (not to exceed 100%), if any, of the Maximum Award (as adjusted pursuant to paragraph 5 hereof) to be awarded finally to Grantee (the number of full shares of Common Stock resulting from the application of such percentage being hereinafter called the "Final Award").  In making such determination, the Committee may take into account (A) the extent to which the Performance Criteria were, in the Committee's sole opinion, achieved, (B) other aspects of the individual performance of the Grantee during the Performance Period, and (C) such other factors as the Committee may deem relevant, including unforeseen events or changes in circumstances since the date of grant.

       (ii) Distribution of Final Awards.  Following such determination, Grantee may elect, subject to the approval of the Committee, to receive all or a portion of such Final Award in cash, or Common Stock, or a combination of both.  If Grantee elects, with the approval of the Committee, to receive all or a portion of such Final Award in cash, the Company shall pay to Grantee, as soon thereafter as practicable, an amount equal to the fair market value of Common Stock on the date of such Final Award multiplied by the number of shares of Common Stock as to which such election has been made.  If Grantee elects to receive all or a portion of such Final Award in Common Stock, the Company shall issue certificates for the number of shares of Common Stock as to which such election has been made, registered in the name of Grantee.  Concurrently with the payment of such amount or the issu ance of such certificates, the Company shall deliver to Grantee an amount equal to the cash dividends Grantee would have received with respect to the shares of Common Stock representing the Final Award if Grantee had been the holder of record of such shares immediately following completion of the Performance Period.  

      (iii) Withholding of Taxes.  As a condition precedent to the payment of any amount or the issuance and delivery of certificates for shares of Common Stock hereunder, appropriate arrangements shall be made for the withholding of any federal, state, foreign or local taxes.  At Grantee's election, the Company may satisfy such tax withholding obligation by withholding cash or shares of Common Stock with an aggregate fair market value equal to the tax required to be withheld.

     (e)  Termination of Service During Performance Period.

        (i) Death, Disability or Retirement.  If Grantee terminates employment with the Company or an Affiliate prior to the distribution of the Final Award following expiration of the Performance Period because of his or her death, permanent disability or retirement after having attained both 62 years of age and ten or more years of service with the Company or an affiliate of the Company as defined in the Plan (an"Affiliate"), then (except as otherwise provided in paragraph 2(e)(ii)) the Committee shall have sole and absolute discretion to determine the number of shares, if any, in the Maximum Award with respect to which the Grantee shall be deemed to have satisfied the Performance Criteria, and the percentage of such shares to be included in the Final Award.  Following such Committee determination, Grantee or, following his or her death, his or her Beneficiary, may elect, subject to the approval of the Committee, to receive all or a portion of such Final Award in cash, or Common Stock, or a combination of both.  As soon as practicable following any such determination and election, the Company shall satisfy the Final Award by (A) paying to Grantee or his or her Beneficiary, as the case may be, the amount calculated as provided in paragraph 2 (d) (ii) with respect to the number of shares of Common Stock as to which an election to receive cash has been made, and (B) issuing to Grantee or his or her Beneficiary, as the case may be, certificates for the number of shares of Common Stock as to which an election to receive Common Stock has been made.

       (ii) Other Termination.  If Grantee's employment with the Company or an Affiliate terminates prior to the distribution of the Final Award following expiration of the Performance Period (A) within 180 days following either commencement of the Performance Period or the Date of Grant, whichever occurs later, or (B) for any reason other than death, permanent disability or retirement after having attained both 62 years of age and ten or more years of service with the Company or an Affiliate, then this Contingent Stock Right shall be forfeited and cancelled forthwith, unless the Committee, in its sole discretion, shall determine otherwise, or Grantee has an agreement with the Company, or is covered by a Company plan, that provides otherwise.

3.  Restrictions on Transfer.  This Contingent Stock Right shall not be transferable other than by will or the laws of descent and distribution.  

4.  Designation of Beneficiary.  Grantee may file with the Company a written designation of a beneficiary or beneficiaries hereunder (the "Beneficiary") and may from time to time revoke or change any such designation.  Any designation of Beneficiary shall be controlling over any other disposition, testamentary or otherwise; provided, however, that if the Committee shall be in doubt as to the entitlement of any such Beneficiary to any rights hereunder, the Committee may determine to recognize only the legal representative of Grantee, in which case the Company, the Committee and the members thereof shall not be under any further liability to anyone.

5.  Adjustments in Event of Change in Common Stock.  In the event of any change in the Common Stock of the Company by reason of any stock dividend, recapitalization, reorganization, merger, consolidation, split-up, combination or exchange of shares, or rights offering to purchase Common Stock at a price substantially below fair market value, or of any similar change affecting the Common Stock, the number and kind of shares to which this Contingent Stock Right relates shall be appropriately adjusted consistent with such change in such manner as the Committee may deem equitable to prevent substantial dilution or enlargement of the rights granted to Grantee hereunder.  Any adjustment so made shall be final and binding upon Grantee.

6.  No Rights as Stockholder or to Continuance of Employment.  Grantee shall have no rights as a stockholder with respect to any shares of Common Stock to which this Contingent Stock Right relates prior to the date of issuance to him or her of a certificate or certificates for such shares.  This Contingent Stock Right shall not confer upon Grantee any right with respect to continuance of employment by the Company or any Affiliate, nor shall it interfere in any way with the right of the Company or any Affiliate to terminate his or her employment at any time.

7.  Compliance With Government Law and Regulations.  This Contingent Stock Right, the grant of any Final Award hereunder and the obligation of the Company to deliver shares under any such Final Award shall be subject to all applicable federal and state laws, rules and regulations and to such approvals by any government or regulatory agency as may be required.  The Company shall not be required to issue or deliver any certificates for shares of Common Stock prior to (i) the listing of such shares on any stock exchange on which the Common Stock may then be listed, and (ii) the completion of any registration or qualification of such shares under any federal or state law, or any ruling or regulation of any governmental body which the Company shall, in its sole discretion, determine to be necessary or advisable.

8.  Grantee Bound by Plan.  Grantee hereby acknowledges receipt of a copy of the Plan and agrees to be bound by all the terms and provisions thereof.

9.  Notices.  Any notice hereunder to the Company shall be addressed to it at its office, P.O. Box 300, Princeton, New Jersey 08543-0300, Attention: Stock Plan Administrator, and any notice hereunder to Grantee shall be addressed to Grantee at his or her address as shown on the Company's records, subject to the right of either party to designate at any time hereafter in writing some other address.

IN WITNESS WHEREOF, Dow Jones & Company, Inc. has caused this Agreement to be executed on its behalf by a Vice President and Grantee has accepted the terms of this Agreement by electronic signature, both as of the Date of Grant.

	Dow Jones & Company, Inc.
	/s/ James A. Scaduto
By:	James A. Scaduto
	Vice President, Human Resources

EX-10

Exhibit 10.3

DOW JONES & COMPANY, INC.

RESTRICTED STOCK UNIT AWARD AGREEMENT

AGREEMENT between Dow Jones & Company, Inc., a Delaware corporation (hereinafter called the "Company"), and the employee to whom this restricted stock unit award (the "Award") has been granted and who has agreed to be subject to the terms of this Agreement (the "Recipient"),

W I T N E S S E T H:

1.

Grant of Award.  Pursuant to the provisions of the Dow Jones 2001 Long Term Incentive Plan (the "Plan") the Company hereby grants to Recipient, subject to the terms and conditions of the Plan and subject further to the fulfillment of the vesting conditions and to the other terms and conditions herein set forth, the right to receive the aggregate number of shares of Common Stock ($1.00 par value) of the Company ("Common Stock") of which Optionee has been given notice by the Company ("Notice"), as of the Date of Grant set forth in such Notice.

2.

Terms and Conditions.  The Award is subject to the following terms and conditions.

(a)  Vesting of Award.  Subject to paragraphs 2(c) and 2(d) hereof, this Award shall vest in accordance with the following schedule, provided the Recipient shall have remained in the employ of the Company or of an affiliate of the Company as defined in the Plan (any such affiliate being hereinafter called an "Affiliate") through such vesting dates:

Percent of Total Award That is Vested	Vesting Date
100%	Third Anniversary of Grant Date

(b)  Conversion of Restricted Stock Units and Issuance of Shares.  One share of Common Stock shall be issuable for each restricted stock unit that vests on the Vesting Date (the “Shares”), subject to the terms and provisions of the Plan and this Agreement.  Thereafter, the Company will transfer such Shares to Recipient upon satisfaction of any required tax withholding obligations.  No fractional shares shall be issued under this Agreement.  

(c)  Vesting in the Event of Death or Termination of Employment.  

(1)  Notwithstanding any provision of paragraph 2(a) to the contrary, if Recipient's employment by the Company or an Affiliate shall terminate because of his or her death or permanent disability, then the Award shall vest on the third anniversary of the Grant Date as though Recipient had remained in continuous employment with the Company or an Affiliate.  If, upon the termination of Recipient's employment because of his or her retirement, Recipient shall have attained both 55 years of age and ten or more years of service with the Company or an Affiliate, then the Award shall vest on the third anniversary of the Grant Date as though Recipient had remained in continuous employment with the Company or an Affiliate. If Recipient's employment by the Company or an Affiliate shall be terminated without cause after the first anniversary of the Grant Date, then the Award shall vest as follows: (i)  for terminations after the first an niversary of the Grant Date but before the second anniversary of the Grant Date, one-third of the Award shall vest on the third anniversary of the Grant Date and (ii) for terminations after the second anniversary of the Grant Date but before the third anniversary of the Grant Date, two-thirds of the Award shall vest on the third anniversary of the Grant Date.

(2)  If Recipient's employment by the Company or an Affiliate shall terminate for any reason other than death, permanent disability, retirement or termination without cause as aforesaid, then the Award will terminate automatically and be forfeited to the Company immediately and without further notice unless otherwise provided by an agreement between the Recipient and the Company, or by a Company plan in which the Recipient participates) ; provided, however, that, except in the case of the Recipient's termination for cause, the Compensation Committee (the "Committee"), appointed pursuant to Section 3(a) of the Plan, in its sole discretion, may cause a portion of or all of the Recipient's Award to vest. No Shares shall be issued or issuable with respect to any portion of the Award that terminates unvested and is forfeited.  

     (3)  Recipient shall be deemed to be terminated for “cause” if he or she is to be terminated because he or she (i) has been convicted of, or has pleaded guilty to, a felony, (ii) is abusing alcohol or narcotics, (iii) has committed an act of fraud, material dishonesty or gross misconduct in connection with the Company’s business (including, without limitation, an act that constitutes a material violation of the Company’s Code of Conduct), or (iv) has willfully and repeatedly refused to perform his or her duties after reasonable demand for such performance has been made by the Company.

(d)  Non-Transferability of Award.  This Award may not be sold, transferred, pledged, assigned or otherwise alienated at any time other than a transfer by will or by the laws of descent and distribution.  Any attempt to do so contrary to the provisions hereof shall be null and void.

(e)  Adjustments in Event of Change in Common Stock.  In the event of any change in the Common Stock of the Company by reason of any stock dividend, recapitalization, reorganization, merger, consolidation, split-up, combination or exchange of shares, or any rights offering to purchase Common Stock at a price substantially below fair market value, or of any similar change affecting the Common Stock, the number and kind of shares with respect to which the Award has been granted shall be appropriately adjusted consistent with such change in such manner as the Committee may deem equitable to prevent substantial dilution or enlargement of the rights granted to Recipient hereunder.  Any adjustment so made shall be final and binding upon Recipient.

(f)  Recipient Has No Rights as a Stockholder.  Recipient shall not have any right in, to or with respect to any of the Shares (including any voting rights or rights with respect to dividends paid on the Common Stock) issuable under the Award until the Award is settled by the issuance of such Shares to Recipient.  As soon as practicable after such Shares are issued to Recipient, the Company shall pay Recipient an amount equal to the dividends Recipient would have received with respect to the Shares from the Grant Date through the date of such issuance if the Shares had been issued to Recipient on the Grant Date.

(g)  Award Confers No Rights with Respect to Continuance of Employment.  This Award shall not confer upon Recipient any right with respect to continuance of employment by the Company or any Affiliate, nor shall it interfere in any way with the right of Recipient's employer to terminate Recipient's employment at any time.

(h)  Compliance with Law and Regulations.  This Award and the obligation of the Company to deliver shares hereunder, shall be subject to all applicable federal and state laws, rules and regulations and to such approvals by any government or regulatory agency as may be required.  The Company shall not be required to issue or deliver any certificates for shares of Common Stock prior to (i) the listing of such shares on any stock exchange on which the Common Stock may then be listed, and (ii) the completion of any registration or qualification of such shares under any federal or state law, or any ruling or regulation of any government body which the Company shall, in its sole discretion, determine to be necessary or advisable.

(i)  Cancellation of Award.  The Committee may, with the consent of the Recipient, from time to time cancel all or any portion of this Award, and the Company's obligation in respect of such Award may be discharged either by (i) payment to the Recipient of an amount in cash equal to the fair market value at such time of the shares subject to the portion of the Award so cancelled, (ii) the issuance or transfer to the Recipient of shares of Common Stock of the Company equal to the number of shares subject to the portion of the Award so cancelled, or (iii) a combination of cash and shares as described above, all as determined by the Committee in its sole discretion.

(j)  Designation of Beneficiary.  Recipient may file with the Company a written designation of a beneficiary or beneficiaries hereunder (the "Beneficiary" and may from time to time revoke or change any such designation.  Any designation of Beneficiary shall be controlling over any other disposition, testamentary or otherwise; provided, however, that if the Committee shall be in doubt as to the entitlement of any such Beneficiary to any rights hereunder, the Committee may determine to recognize only the legal representative of Recipient, in which case the Company, the Committee and the members thereof shall not be under any further liability to anyone.

3.  Recipient Bound by Plan.  Recipient hereby acknowledges that the Company has made a copy of the Plan available to him or her and Recipient agrees to be bound by all the terms and provisions thereof.

4.  Withholding of Taxes.  Prior to any event in connection with the Award (e.g., vesting) that the Company determines may result in any domestic or foreign tax withholding obligation, whether national, federal, state or local, including any social security tax obligation (the “Tax Withholding Obligation”), the Recipient must arrange for the satisfaction of the minimum amount of such Tax Withholding Obligation in a manner acceptable to the Company. The Recipient's acceptance of this Award constitutes his or her instruction and authorization to the Company and any brokerage firm determined acceptable to the Company for such purpose to sell on the Recipient's behalf a whole number of Shares from those Shares issuable to the Recipient as the Company determines to be appropriate to generate cash proceeds sufficient to satisfy the Tax Withholding Obligation.  Such Shares will be sold on the day the Tax Withholding Obligation arises (e.g., the Vesting Date) or as soon thereafter as practicable.  The Recipient will be responsible for all broker’s fees and other costs of sale, and he or she agrees to indemnify and hold the Company harmless from any losses, costs, damages, or expenses relating to any such sale.  To the extent the proceeds of such sale exceed the Recipient's Tax Withholding Obligation, the Company agrees to pay such excess in cash to the Recipient through payroll or otherwise as soon as practicable.  The Recipient acknowledges that the Company or its designee is under no obligation to arrange for such sale at any particular price, and that the proceeds of any such sale may not be sufficient to satisfy the Recipient's Tax Withholding Obligation.  Accordingly, the Recipient agrees to pay to the Company or any of its Subsidiaries as soon as practicable, including through additional payroll withholding, any amount of the Tax Withholding Obligation that is not s atisfied by the sale of Shares described above.  

6.  Notices.  Any notice hereunder to the Company shall be addressed to it at its offices, P.O. Box 300, Princeton, New Jersey 08543-0300, Attention:  Stock Plan Administrator, and any notice hereunder to the Recipient shall be addressed to him or her at his or her address as shown on the Company's records, subject to the right of either party to designate at any time hereafter in writing some other address.

IN WITNESS WHEREOF, Dow Jones & Company, Inc. has caused this Agreement to be executed on its behalf by a Vice President and the Recipient has accepted the terms of this Agreement by electronic signature, both as of the Date of Grant.

	Dow Jones & Company, Inc.
	/s/ James A. Scaduto
By:	James A. Scaduto
	Vice President, Human Resources

RSU Agreement-US (11.03)

EX-31

EXHIBIT 31.1

CERTIFICATIONS

I, Peter R. Kann, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the period ending June 30, 2005 of Dow Jones & Company, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 1, 2005

/s/ Peter R. Kann

Peter R. Kann

Chief Executive Officer

EX-31

EXHIBIT 31.2

CERTIFICATIONS

I, Christopher W. Vieth, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the period ending June 30, 2005 of Dow Jones & Company, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 1, 2005

/s/ Christopher W. Vieth

Christopher W. Vieth

Chief Financial Officer

EX-32

EXHIBIT 32.1

Statement Pursuant to Section 1350(a) of title 18, United States Code

The undersigned, Peter R. Kann and Christopher W. Vieth, certify that:

(1) The quarterly report on Form 10-Q of Dow Jones & Company, Inc. (the “Company”) for the quarterly period ended June 30, 2005 (the “Form 10-Q”), which is being filed today with the Securities and Exchange Commission, fully complies with the requirements of section 13(a) or 15(d) of the Securities and Exchange Act of 1934.

(2) The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Peter R. Kann

Peter R. Kann

Chief Executive Officer

Dow Jones & Company, Inc.

Date: August 1, 2005

/s/ Christopher W. Vieth

Christopher W. Vieth

Chief Financial Officer

Dow Jones & Company, Inc.

Date: August 1, 2005