Dow Jones Reports First Quarter Results; Provides 2nd Quarter Outlook.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Dow Jones Dow Jones the best known of several U.S. indexes of movements in price on Wall Street. [Am. Hist.: Payton, 202] See : Finance & Company (NYSE NYSE See: New York Stock Exchange : DJ) today reported that it earned 10 cents per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share during the first quarter of 2005, compared with 22 cents per diluted share in the first quarter of 2004. Excluding the special items explained herein, the Company earned 11 cents per diluted share during the first quarter of 2005 and 22 cents per diluted share in the first quarter of 2004. Revenue of $412.1 million in the first quarter of 2005 was up 2.6% over the first quarter of 2004, expenses were up 7.4% and operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. declined 49.7% to $17.0 million. Excluding recent acquisitions and special items, revenue declined 3.4% in the first quarter of 2005, expenses were flat and operating income declined 48.0% compared to the first quarter 2004. The declines in revenue and operating income were mainly due to advertising declines in the Company's Print Publishing segment. Special Items: A special item of two cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. was recorded in the first quarter of 2005 for accretion The act of adding portions of soil to the soil already in possession of the owner by gradual deposition through the operation of natural causes. The growth of the value of a particular item given to a person as a specific bequest under the provisions of a will between the of discount on a contract-guarantee obligation. In the first quarter of 2004, special items netted to zero cents per share as a special gain of two cents per share related to a reduction of a lease obligation reserve was offset by a loss of two cents per share for accretion of discount on a contract-guarantee obligation. Commenting on first quarter results, Peter R. Kann, chairman and chief executive officer of Dow Jones, said, "We continue to battle a persistently per·sis·tent adj. 1. Refusing to give up or let go; persevering obstinately. 2. Insistently repetitive or continuous: a persistent ringing of the telephone. 3. difficult B2B (Business to Business) Refers to one business communicating with or selling to another. See B2B e-commerce, B2C and B2G. B2B - business to business print advertising climate particularly in the technology category. However, heading into the second quarter, we are cautiously cau·tious adj. 1. Showing or practicing caution; careful. 2. Tentative or restrained; guarded: felt a cautious optimism that the offer would be accepted. optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op that advertising trends will improve. Meantime, we will remain sharply focused on controlling costs, improving the quality of our products, integrating our acquisition of MarketWatch MarketWatch operates a financial information website that provides business news, analysis and stock market data to some 6 million people. MarketWatch offers personal finance news and advice, tools for investors and access to industry research. and launching Weekend Edition in September--both of which are proceeding in line with our expectations." Dow Jones said it estimates second quarter 2005 earnings per share before special items to be in the mid-to-upper 30 cents per share range before dilution Dilution A reduction in earnings per share of common stock that occurs through the issuance of additional shares or the conversion of convertible securities. Notes: Adding to the number of shares outstanding reduces the value of holdings of existing shareholders. from Weekend Edition and MarketWatch, compared to the 41 cents per share earned in the second quarter of 2004. After dilution from Weekend Edition and MarketWatch, the Company expects second quarter 2005 earnings per share in the low-to-mid 30 cents per share range. This assumes second quarter 2005 linage lin·age also line·age n. 1. The number of lines of printed or written material. 2. Payment for written work at a specified amount per line. linage Noun 1. at the U.S. Wall Street Journal will be down in the low single digit A single character in a numbering system. In decimal, digits are 0 through 9. In binary, digits are 0 and 1. digit - An employee of Digital Equipment Corporation. See also VAX, VMS, PDP-10, TOPS-10, DEChead, double DECkers, field circus. percentage range compared to the second quarter of 2004. Based on currently anticipated special items in the second quarter of 2005, the Company expects reported earnings per share to be in the low-to-mid 40 cents per share range, compared with 41 cents per share in the second quarter of 2004. Please refer to the attached table for a reconciliation of the Company's second quarter earnings before and after special items. Segment Results Print Publishing revenue of $216.7 million in the first quarter of 2005 declined 8.8% versus the same period a year ago. Advertising linage at the U.S. Wall Street Journal decreased 8.0% (down 9.9% in March) while linage at the international editions of the Journal decreased 14.8% with two fewer issues (down 26.0% in March with two fewer issues). Barron's advertising pages decreased 12.9% in the quarter (down 33.7% in March with one fewer issue). Print Publishing had an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $7.1 million in the first quarter, compared to income of $4.6 million in the first quarter of 2004. Electronic Publishing An umbrella term for non-paper publishing, which includes publishing online or on media such as CDs and DVDs. revenue of $117.2 million in the first quarter of 2005 increased 35.7% from the same period a year ago, driven by the acquisitions of MarketWatch, Alternative Investor and vwd, together with increased revenue in all electronic publishing business units. Operating income of $21.5 million in the first quarter of 2005 increased 15.9% over last year primarily due to growth at both Consumer Electronic Publishing and Indexes. Operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: of 18.3% in the first quarter of 2005 was down from the previous year's 21.4%. Excluding acquisitions, revenue was up 8.0%, operating income increased 12.4% and operating margin was up 90 basis points to 22.2%. Terminal counts at Newswires were up 3.8% compared to last year. Paid subscribers to The Wall Street Journal Online grew to 731,000 as of March 31, 2005, up 5.2% from the prior year period. Ottaway Community Newspapers' revenue of $78.2 million in the first quarter of 2005 increased 0.6% from the same period a year ago. Operating income of $13.3 million was down 21.5% and operating margin was 17.1% versus 21.8% last year due to higher newsprint newsprint low grade paper used for newspapers. Old newspapers are fed to cattle as an alternative roughage and may occasionally be ingested by dogs. Significant amounts of lead are accumulated in tissues; no cases of poisoning have been recorded in cattle, though it has been prices and planned expenses related to a new internet See Web 2.0 and Internet2. initiative and content management system. Advertising revenue was up 1.9% on higher preprint pre·print n. Something printed and often distributed in partial or preliminary form in advance of official publication: a preprint of a scientific article. tr.v. revenue and ad rates, partially offset by a 2.6% decrease in linage in the first quarter (linage was down 2.1% in March). The Company ended the first quarter of 2005 with $615 million in debt compared to $258 million at the end of the first quarter of 2004. This increase is mainly due to the incurrence In`cur´rence n. 1. The act of incurring, bringing on, or subjecting one's self to (something troublesome or burdensome); as, the incurrence of guilt, debt, responsibility, etc. s> Noun 1. in January January: see month. 2005 of an additional $439 million in debt to finance the Company's acquisition of MarketWatch. As previously announced, the Company will host an earnings conference call at 10 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy today. The call can be accessed via a live Web cast through the Investor Relations Investor relations The process by which the corporation communicates with its investors. section of the Company's Web site, www.dowjones.com, or through a listen-only, dial-in conference line, by dialing 877-407-3140. A replay of the conference call and the full text of the prepared remarks will be available on the Company's Web site in the Investor Relations section shortly after the call concludes. Dow Jones & Company (NYSE: DJ; dowjones.com) publishes The Wall Street Journal and its international and online editions, Barron's and the Far Eastern Economic Review, Dow Jones Newswires Dow Jones Newswires is the real-time financial news organization owned by Dow Jones. Founded in 1882, its primary competitors are Bloomberg L.P. and Reuters. The company reports more than 420,000 subscribers -- including brokers, traders, analysts and fund managers -- as of July , Dow Jones Indexes, MarketWatch and the Ottaway group of community newspapers. Dow Jones is co-owner with Reuters Reuters British cooperative news agency. Founded in 1851 by Paul Julius Reuter, it was initially concerned with commercial news but began to serve a growing newspaper clientele after the London Morning Advertiser subscribed in 1858. Group of Factiva Factiva is a division of Dow Jones & Company. The unit provides business and research information and services for the business and education communities. Factiva products provide access to more than 10,000 sources (such as newspapers, journals, magazines, news and radio , with Hearst of SmartMoney SmartMoney The Wall Street Journal Magazine of Personal Business was launched in 1992 by Hearst Corporation and Dow Jones & Company. Its first editor was Norman Pearlstine. It is published monthly and its current circulation is 824,327. and with NBC Universal NBC Universal is a media and entertainment company formed in May 2004 by the combination of General Electric's NBC with Vivendi Universal Entertainment (part of the French Media Group, Vivendi SA). GE owns 80% of NBC Universal with the remaining 20% owned by Vivendi SA. of CNBC CNBC Center for the Neural Basis of Cognition (artificial intelligence) CNBC Consumer News and Business Channel CNBC Congress of National Black Churches, Inc. television operations in Asia and Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). . Dow Jones also provides news content to CNBC and radio
stations in the U.S.Information Relating To relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. : This press release contains forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those anticipated: including the cyclical cyclical Of or relating to a variable, such as housing starts, car sales, or the price of a certain stock, that is subject to regular or irregular up-and-down movements. 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 Reciprocally contradictory or repugnant. Things are said to be inconsistent when they are contrary to each other to the extent that one implies the negation of the other. 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 diversify To acquire a variety of assets that do not tend to change in value at the same time. To diversify a securities portfolio is to purchase different types of securities in different companies in unrelated industries. the Journal's market segment focus beyond financial 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; intense competition for ad revenues and readers the Company's products and services 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 Newswires and other subscription-based products and services, the negative impact of business consolidations and layoffs in the financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. industry on sales; the uncertainties relating to the Company's guarantee to Cantor Fitzgerald Cantor Fitzgerald L.P. is a global financial services firm specializing in bond trading, as well as investment banking, asset management, market data and brokerage services. Securities and Market Data Corporation; and such other risk factors as may be included from time to time in the Company's reports filed with the Securities and Exchange Commission and posted in the Investor Relations section of the Company's web site (www.dowjones.com). This press release includes certain non-GAAP financial measures as defined under SEC rules. As required by SEC rules, we have attached to this press release a reconciliation of those measures to the most directly comparable GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). measures. This reconciliation is also available on the Investor Relations page of our web site (www.dowjones.com).
Dow Jones & Company
Earnings Summary
(Unaudited)
(in thousands, except per share amounts) Quarters Ended March 31
-------------------------
2005 2004
----------- -----------
Reported results:
Revenues $ 412,072 $ 401,621
Operating income $ 16,969 $ 33,759
Net income $ 8,180 $ 17,816
Effective tax rate* 41.7% 41.2%
Diluted EPS $ .10 $ .22
Excluding items described in Note 3:
Operating income $ 16,969 $ 30,998
Net income $ 9,479 $ 18,139
Effective tax rate* 38.2% 38.6%
Diluted EPS $ .11 $ .22
EPS percentage change (50.0)% 83.3%
*The effective income tax rate is net of minority interests.
See notes to financial information on page 10.
Reconciliation of Second Quarter Earnings Outlook
Quarters Ended June 30,
-----------------------------
2005 Guidance 2004 Actual
--------------- -----------
low-to-mid
Reported earnings per share 40 cents $.41
per share range**
Adjusted to remove:
Contract guarantee (.01) (.02)
Gain on disposition of investment .11 .02
--------------- -----------
low-to-mid
EPS before special items 30 cents $.41
===========
per share range**
**Based on special items currently anticipated.
Dow Jones & Company
Condensed Consolidated Statements of Income
(Unaudited)
(in thousands, except per share amounts) Quarters Ended March 31
-----------------------
2005 2004
--------- ---------
Revenues:
Advertising $ 217,744 $ 226,699
Information services 98,469 75,827
Circulation and other 95,859 99,095
--------- ---------
Total revenues 412,072 401,621
Expenses:
News, production and
technology 135,261 122,557
Selling, administrative and general 160,185 145,235
Newsprint 28,201 27,631
Print delivery costs 44,366 47,845
Depreciation and amortization 27,090 27,355
Restructuring charges and September 11-related
items - (2,761)
--------- ---------
Operating expenses 395,103 367,862
--------- ---------
Operating income 16,969 33,759
Other income (deductions):
Investment income 295 91
Interest expense (4,009) (648)
Equity in earnings (losses) of associated
companies 734 (740)
Contract guarantee (1,299) (1,985)
Other, net 1,339 (766)
--------- ---------
Income before income taxes and minority
interests 14,029 29,711
Income taxes 5,849 12,481
--------- ---------
Income before minority
interests 8,180 17,230
Minority interests - 586
--------- ---------
Net income $ 8,180 $ 17,816
========= =========
Net income per share:
- Basic $ .10 $ .22
- Diluted .10 .22
Weighted-average shares outstanding:
- Basic 82,251 81,758
- Diluted 82,756 82,212
See notes to financial information on page 10.
Dow Jones & Company
Segment Information
(Unaudited)
(dollars in thousands) Quarters Ended March 31
-----------------------
2005 2004
--------- ---------
Revenues:
Print publishing $ 216,731 $ 237,575
Electronic publishing 117,179 86,369
Community newspapers 78,162 77,677
--------- ---------
Consolidated revenues 412,072 401,621
Percentage change in revenues
excluding divested/newly-acquired operations (3.4)% 9.1%
Operating income (loss):
Print publishing (7,054) 4,624
Electronic publishing 21,463 18,513
Community newspapers 13,330 16,972
Corporate (10,770) (9,111)
--------- ---------
Segment operating income 16,969 30,998
Restructuring charges and September 11-
related items - 2,761
--------- ---------
Consolidated operating income $ 16,969 $ 33,759
========= =========
Operating margin:
Print publishing (3.3)% 1.9%
Electronic publishing 18.3% 21.4%
Community newspapers 17.1% 21.8%
Consolidated operating margin 4.1% 8.4%
Depreciation and amortization (D&A):
Print publishing $ 14,876 $ 17,676
Electronic publishing 9,237 6,660
Community newspapers 2,940 2,979
Corporate 37 40
--------- ---------
Consolidated D&A $ 27,090 $ 27,355
========= =========
See notes to financial information on page 10.
Dow Jones & Company
Supplemental Segment Revenue Information
(Unaudited)
(in thousands) Quarters Ended March 31
-----------------------
2005 2004
--------- ---------
Print publishing:
U.S. publications:
Advertising $ 135,616 $ 151,182
Circulation and other 64,303 65,953
--------- ---------
Total for U.S. publications 199,919 217,135
International publications:
Advertising 9,798 11,920
Circulation and other 7,014 8,520
--------- ---------
Total for international
publications 16,812 20,440
--------- ---------
Total for print publishing 216,731 237,575
Electronic publishing:
Dow Jones Newswires:
Domestic 48,864 44,403
International 16,133 10,797
--------- ---------
Total newswires 64,997 55,200
Consumer Electronic Publishing* 36,340 18,169
Dow Jones Indexes/Ventures 15,842 13,000
--------- ---------
Total electronic publishing 117,179 86,369
Community newspapers:
Advertising 57,948 56,868
Circulation and other 20,214 20,809
--------- ---------
Total community newspapers 78,162 77,677
--------- ---------
Total segment revenues $ 412,072 $ 401,621
========= =========
* Includes WSJ.com, related vertical sites, licensing/business
development, radio/audio, and the January 2005 acquisition of
MarketWatch, Inc.
See notes to financial information on page 10.
Dow Jones & Company
Statistical Information
(Unaudited)
Quarters Ended March 31
-----------------------
2005 2004
----------- -----------
Advertising volume increase/(decrease):
The Wall Street Journal:
General 2.1% (7.5)%
Technology (23.2) (0.2)
Financial (24.4) 47.1
Classified 1.8 7.9
Total (8.0) 6.3
The Asian Wall Street Journal (7.9) 7.7
The Wall Street Journal Europe (20.6) 13.4
Barron's (12.9) 22.0
Ottaway Newspapers:
Daily (1.6) 2.4
Non-daily (6.7) 13.2
Total (2.6) 4.3
The Wall Street Journal advertising as a
percentage of total Journal linage:
General 41.7% 37.6%
Technology 13.3 15.9
Financial 18.6 22.6
Classified 26.4 23.9
Other statistics: March 31,
-----------------------
2005 2004
----------- -----------
Dow Jones Newswires terminals 300,000 289,000
WSJ.com subscribers 731,000 695,000
WSJ.com unique visitors/business day 169,000 141,000
Dow Jones & Company
Notes to Financial Information
1. The Company's calculation of net income, operating income and
earnings per share excluding special items may not be comparable to
similarly titled measures reported by other companies, since companies
and investors may differ as to what type of events warrant adjustment.
Net income, operating income and earnings per share excluding special
items are not measures of performance under generally accepted
accounting principles and should not be construed as substitutes for
consolidated net income, operating income and earnings per share as a
measure of performance. However, management uses these measures in
comparing the Company's historical performance and believes that they
provide meaningful and comparable information to investors to assist
in their analysis of the Company's performance relative to prior
periods and its competitors.
2. The Company made the following acquisitions during 2005 and 2004:
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
transaction costs of approximately $5 million. This acquisition was
financed by $439 million of commercial paper borrowings and cash,
including cash received from MarketWatch. In February 2005, the
Company refinanced $225 million of this debt with 3.875% three-year
bonds.
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 integrated 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 close to nine million
unduplicated 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.
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. Dow Jones was a minority
shareholder in VWD.
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. The acquisition was funded by the issuance of
debt under the Company's commercial paper program.
Alternative Investor is a provider of newsletters, databases and
industry conferences for the venture-capital and private-equity
markets, and has been combined into the Company's Dow Jones Newswires
business.
3. The following table reconciles reported results to income adjusted
for special items for the quarters ended March 31, 2005 and 2004:
Quarters Ended March 31
------------------------------------------------
2005 2004
----------------------- -----------------------
(in millions, except
per share amounts) Operating Net EPS Operating Net EPS
--------- ----- ----- --------- ----- -----
Reported income $ 17.0 $ 8.2 $ .10 $ 33.8 $17.8 $ .22
Adjusted to remove:
Included in
operating income:
Reversal of lease
obligation reserve
- WFC (a) 2.8 1.7 .02
Included in non-
operating income:
Contract
guarantee (b) (1.3) (0.2) (2.0) (.02)
--------- ----- ----- --------- ----- -----
Adjusted income $ 17.0 $ 9.5 $ .11* $ 31.0 $18.1 $ .22
========= ===== ===== ========= ===== =====
* The sum of the individual amounts does not equal total due to
rounding.
(a) Restructuring charges and September 11-related items:
Reversal of lease obligation reserve - World Financial Center (WFC):
In the fourth quarter 2001, the Company recorded a charge of $32.2
million as a result of its decision to permanently re-deploy certain
personnel and abandon four of seven floors that were leased at its
World Financial Center headquarters. This charge primarily reflected
the Company's rent obligation through 2005 on this vacated space.
In the first quarter 2004, the Company 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 New York location, whose lease term was
expiring. As a result, the Company reversed $2.8 million ($1.7
million, net of taxes, or $.02 per diluted share) of the remaining
lease obligation reserve of the previously abandoned floor at WFC.
(b) Contract guarantee:
Under the terms of the Company's 1998 sale of Telerate to Bridge
Information Systems (Bridge), Dow Jones retained its guarantee of
payments under certain circumstances of certain minimum payments for
data acquired by Telerate from Cantor Fitzgerald Securities (Cantor)
and Market Data Corporation (MDC). The annual minimum payments average
approximately $50 million per year through October 2006 under certain
conditions. Bridge agreed to indemnify Dow Jones for any liability Dow
Jones incurred under the contract guarantee with respect to periods
subsequent to Bridge's purchase of Telerate. In 2000, based in part on
uncertainty with Bridge's solvency as well as other factors, the
Company established a reserve of $255 million representing the net
present value of the total minimum payments of about $300 million from
2001 through October 2006, using a discount rate of 6%. Bridge filed
for bankruptcy in February 2001, but made payments for this data for
the post-petition periods through October 2001, when Telerate ceased
operations, went out of business, sold certain assets and rejected its
contracts with Cantor and MDC. The Company is now in litigation with
Cantor and MDC with respect to their claims for amounts due under the
contract guarantee.
The Company has various substantial defenses to these claims and the
litigation is proceeding. 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 first quarter of 2005 and 2004 included charges related to the
accretion of the discount on the reserve balance of $1.3 million ($.02
per diluted share) and $2.0 million ($.02 per diluted share),
respectively.
4. The Company's business and financial news and information
operations are reported in two segments: print publishing and
electronic publishing. The results of the Company's Ottaway Newspapers
subsidiary, which publishes 15 daily newspapers, and over 30 weekly
newspapers and "shoppers" in nine states in the U.S., are reported in
the community newspaper segment. Print publishing includes the global
operations of The Wall Street Journal and its international editions,
as well as Barron's and U.S. television operations (results of the
Company's international television ventures are included in equity in
earnings (losses) of associated companies). Electronic publishing
includes the operations of Dow Jones Newswires, Consumer Electronic
Publishing and Dow Jones Indexes/Ventures. The results of MarketWatch,
subsequent to the acquisition, are included in Consumer Electronic
Publishing.
5. Restructuring charges and September 11-related items are not
included in segment expenses, as management evaluates segment results
exclusive of these items. For information purposes, the reversal of
the lease obligation reserve allocable to each segment for the three
months ended March 31, 2004 were as follows:
(in thousands) Quarter Ended
March 31
2004
--------------
Print Publishing $ 2,631
Electronic Publishing 125
Corporate 5
--------------
Reversal of lease obligation reserve $ 2,761
==============
6. Summarized financial information for 50% held equity-basis
investments in associated companies were as follows (amounts are at
100% levels):
(in thousands) Quarters Ended March 31
------------------------
2005 2004
------- --------
Factiva
Revenues $68,180 $ 63,534
Operating
income 3,678 4,260
Depreciation and
amortization 2,780 3,102
SmartMoney
Revenues $12,758 $ 12,170
Operating loss (99) (498)
Depreciation and
amortization 124 211
CNBC International *
Revenues $11,170 $ 8,857
Operating loss (7,513) (8,566)
Depreciation and
amortization 673 956
* Includes the results of CNBC Europe and CNBC Asia.
7. On April 8, 2005, the Company announced that it 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 will be used to reduce the
Company's commercial paper borrowings. The Company expects to record
an after-tax gain of approximately $9.5 million, or 11 cents per
diluted share, in the second quarter.
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