UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
[FEE REQUIRED]
For the fiscal year ended:
December 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [NO FEE REQUIRED]
For the transition period from
to
Commission file number 0-315
CCH INCORPORATED
(Exact Name of Registrant as
specified in its charter)
Delaware
36-0936850
(State or other jurisdiction of
(IRS Employer
incorporation or organization)
Identification No.)
2700 Lake Cook Road
Riverwoods, Illinois
60015
(Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including area code
(708) 267-7000
Securities registered pursuant to Section 12(g) of the
Act:
Title of each class Name of each
exchange on which registered
Class A NASDAQ
Class B NASDAQ
Indicate by checkmark 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 at least the past 90 days.
Yes X No
Indicate by check mark if disclosure of
delinquent filers pursuant to Item 405 of Regulation
S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in
definitive proxy or information statements
incorporated by reference in Part III of this Form 10-
K or any amendment to this Form 10-K. [X]
As of March 27, 1995, 16,975,944 shares of Class
A Common Stock were outstanding and the aggregate
market value of the Common Stock (based upon the
closing bid price of these shares in the Over the
Counter Market) of CCH INCORPORATED held by
nonaffiliates was approximately $116 million.
As of March 27, 1995, 16,465,054 shares of Class
B Common Stock were outstanding and the aggregate
market value of the Common Stock (based upon the
closing bid price of these shares in the Over the
Counter Market) of CCH INCORPORATED held by
nonaffiliates was approximately $106 million.
DOCUMENTS INCORPORATED BY REFERENCE
See Listing on Page 10
FORM 10-K CONTENTS
PART I
Page
Item 1. Business 3
Item 2. Properties 3
Item 3. Legal Proceedings 5
Item 4. Submission of Matters to a Vote of
Security Holders 5
PART II
Item 5. Market for the Registrant's Common Stock
and
Related Security Holder Matters 6
Item 6. Selected Financial Data 6
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 6
Item 8. Financial Statements and Supplementary
Data 6
Item 9. Changes in and Disagreements with
Accountants on
Accounting and Financial Disclosure 6
PART III
Item 10. Directors and Executive Officers of the
Registrant 7
Item 11. Executive Compensation 8
Item 12. Security Ownership of Certain Beneficial
Owners
and Management 8
Item 13. Certain Relationships and Related
Transactions 8
PART IV
Item 14. Exhibits, Financial Statement Schedules
and
Reports on Form 8-K 9
Signatures 12
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PART I
ITEM 1. BUSINESS
(a) General Development of Business
CCH INCORPORATED (CCH), name changed from
Commerce Clearing House, Inc. effective January 1,
1995, was incorporated in Delaware in 1927. The
corporate headquarters is located at 2700 Lake Cook
Road, Riverwoods, Illinois 60015. The Company and its
affiliated companies' principal products include (1)
publication of looseleaf current news reports, books
and electronic products primarily on the subjects of
tax and business law, (2) corporate services for
lawyers, financial managers and credit managers and
(3) computer software and services for use by
professionals in processing income tax returns.
(b) Financial Information About Business Segments
The sales and operating profit of each business
segment and the identifiable assets attributable to
each business segment for the three years ended
December 31, 1994 are set forth in Note I (Segment
Information) on pages 32 through 34 of the CCH 1994
Annual Report, which note is incorporated herein by
reference.
(c) Narrative Description of Business
The business of CCH and subsidiaries is
discussed on pages 7 through 9 of the CCH 1994 Annual
Report, which discussion is incorporated herein by
reference.
(d) Foreign Operations
Financial information relating to foreign and
domestic operations for the three years ended December
31, 1994 is presented in Note I (Segment Information)
on pages 32 through 34 of the CCH 1994 Annual Report,
which note is incorporated herein by reference.
ITEM 2. PROPERTIES
The Company owns the following properties,
listed by segment:
Description of Property
Location Square Ft.
Administrative, editorial
and production facilities:
Domestic Publishing Riverwoods,
Illinois 235,000
St.
Petersburg, Florida 144,000
San Rafael,
California 136,000
Chicago,
Illinois 117,000
Clark, New
Jersey 75,000
San Rafael,
California - (1) 63,000
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ITEM 2. PROPERTIES (continued)
Description of Property
Location Square Ft.
Administrative, editorial
and production facilities:
International Publishing Sydney,
Australia 163,200
Don Mills,
Ontario 130,000
Farnham,
Quebec 51,125
Auckland,
New Zealand 43,200
Bicester,
England 42,400
Branch offices:
Legal Information Services Wilmington,
Delaware 24,000
Dover, Delaware 4,000
Administrative and Processing
Centers:
Computer Processing Services Cedar Grove,
New Jersey 54,000
The Company leases the following space, listed
by segment:
Year of
Lease
Description of Property Location Square Ft. Expiration
Administrative, editorial
and production facilities:
Domestic Publishing Chicago, Illinois 225,000 2000
Westfield, New
Jersey 58,500 2003
Washington, D.C. 24,300 2000
Lincolnwood,
Illinois 15,000 1995
Cedar Rapids, Iowa 6,600 1998
Legal Information
Services New York, New York 144,900 1999
Washington, D.C. 22,000 2001
New York, New York 12,400 1999 San Francisco,
California 9,000 2000
Computer Processing
Services Torrance,
California 204,000 (6) 2008
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ITEM 2. PROPERTIES (continued)
Year of Lease
Description of Property Location
Square Ft.
Expiration
Sales and Branch Offices:
Domestic Publishing Various - (2) 113,300 1995-2002
International Publishing Australia,
Various 11,900 1995-2002
Singapore 9,200 1996
Tokyo, Japan 1,100 1995
Various - (3) 8,800 1995-1998
Malaysia 500 1996
London 500 1995-1999
Legal Information Services Various - (4) 187,800 1995-2002
Computer Processing Support Services Various - (5) 169,249 1995-1998
(1) 1/2 of building used by CCH; 1/2 leased to an
outside party
(2) Includes sales offices in 27 different states
(3) Includes sales offices in 4 Canadian Provinces
(4) Includes branch offices in 29 different states
(5) Includes offices in 6 different states
(6) Includes 20,000 square feet of space which has
been sublet to an
outside party and 57,000 square feet of space
available for lease
ITEM 3. LEGAL PROCEEDINGS
1) Robert Taglia, d/b/a Communications Control Ltd.,
a former consultant, filed an action against CCH in
Lake County, IL alleging breach of contract, and
seeking an amount in excess of $4.4 million. This
action was settled out of court in 1994; the
settlement did not have a material impact on the CCH
balance sheet or statement of operations.
2) NationBase, Inc., Clarkson & Sons, Inc. and Gavin
Clarkson filed suit against CCH in Texas alleging
negligent misrepresentation and fraud and seeking
judgment of an unspecified amount and punitive
damages. The plaintiffs recently sent a letter to CCH
demanding $11.5 million in actual damages including
attorney fees, claiming that CCH violated the Texas
Deceptive Trade Practices Act. CCH filed a motion to
dismiss the Texas action or alternatively enter an
order abating the action. CCH has filed an action in
Illinois for collection on a promissory note to CCH.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS
None
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PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND
RELATED
SECURITY HOLDER MATTERS
(a) Principal Market
Principal market on which CCH's common stock is
traded: NASDAQ Stock Market.
(b) Approximate Number of Holders of Common Stock
The approximate number of holders of CCH's common
stock as of February 10, 1995: 4,254 of Class A and
4,251 of Class B. Of this number, approximately 2,456
Class A and B holders are Company employees who
participate in stock ownership plans.
(c) Stock Price and Dividend Information
The information concerning the range of prices of
the Company's common stock and the dividend
information is shown on page 38 of the CCH 1994 Annual
Report, which information is incorporated herein by
reference.
ITEM 6. SELECTED FINANCIAL DATA
A presentation of selected financial data appears
on page 11 of the CCH 1994 Annual Report, which data
is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The discussion by management and its analysis of
financial condition and results of operations is
contained on pages 12 through 16 of the CCH 1994
Annual Report, which discussion is incorporated herein
by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Consolidated financial statements and the related
notes for the three years ended December 31, 1994 are
presented on pages 17 through 36 of the CCH 1994
Annual Report, which statements and related notes are
incorporated herein by reference. Supplementary
financial information on quarterly earnings statement
data for the three years ended December 31, 1994 is
included on page 39 of the CCH 1994 Annual Report,
which supplementary financial information is
incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING
AND FINANCIAL DISCLOSURE
None
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Part III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE
REGISTRANT
Identification of Directors
The names and ages of and family relationships
among the Registrant's Directors, and the position
held by the Registrant's Directors and the business
experience of each Director are stated in the CCH
Proxy Statement dated March 2, 1995 in connection with
its Annual Meeting to be held on March 30, 1995, under
the caption "Election of Directors, which is
incorporated herein by reference.
Identification of Executive Officers
Listed below are the names and ages of the
Registrant's executive officers, the position
currently held by each officer, the business
experience of each officer and the year of initial
election as an executive officer:
Initially Elected
Name Age as Officer
Oakleigh B. Thorne 62 Chairman of the Board 1975
Executive Committee:
Edward L. Massie (1) 65 President and Chief
Executive Officer 1976
Oakleigh Thorne 37 Member, CCH Executive
Committee 1988
Ralph C. Whitley 51 Member, CCH Executive
Committee 1978
Senior Officers:
John I. Abernethy 37 Finance (Chief
Financial Officer) 1990
Christopher Ainsley 36 Strategy 1992
JoAnn Augustine 47 Administration (Corp.
Secretary) 1992
Jonathan Copulsky 40 Product/Customer
Management 1992
Nancy McKinstry 36 Product Management 1992
Stephen J. Uhring 48 Customer Management 1992
Richard G. Honor (2) 65 International 1988
John J. Lynch Jr. 36 Service Products 1993
Eric K. Marcus (3) 40 Technology 1992
Thomas N. Taylor 54 Operations 1984
Hugh J. Yarrington 52 Knowledge 1993
James C. Rooney 61 Knowledge Teams 1993
Each of the foregoing officers has served CCH or a
CCH subsidiary, either as a department manager, junior
officer or executive officer, for five years or more,
except for:
John I. Abernethy previously a partner
with Deloitte & Touche
Christopher Ainsley previously a principal
with Booz-Allen &
Hamilton, and Marakon
Associates
Jonathan Copulsky previously a vice-
president with Booz-
Allen & Hamilton
Nancy McKinstry previously a principal
with Booz-Allen & Hamilton
Eric K. Marcus (3) previously with Coopers
& Lybrand and Financial
Decision Systems, Inc.
Hugh J. Yarrington previously Chief
Operating Officer at the
Bureau of National
Affairs
(1) Retiring as President & CEO April 1995
(2) Retired February 1995
(3) Resigned February 1995
-7-
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE
REGISTRANT (continued)
Other
There have been no events under any bankruptcy
act, no criminal proceedings and no judgments or
injunctions material to the evaluation of the ability
and integrity of any CCH director or executive officer
during the past five years.
ITEM 11. EXECUTIVE COMPENSATION
Remuneration of Directors and Officers
The information on the remuneration of directors
and officers is contained in the CCH Proxy Statement
dated March 2, 1995 in connection with its Annual
Meeting to be held on March 30, 1995, under the
captions Summary Compensation Table, Options/SAR
Grants, Report of the Compensation Committee,
Shareholder Return Performance Information, Pension
Plan, and Supplemental Retirement Plan, which are
incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
(a) Security Ownership of Certain Beneficial Owners
The information concerning persons who are known
by CCH to own beneficially more than 5% of the
Company's stock on February 10, 1995 is shown in the
Proxy Statement for the 1995 Annual Meeting, under the
caption "Stock Ownership of Principal Stockholders and
Management," which is incorporated herein by
reference.
(b) Security Ownership of Management
The information concerning the beneficial
ownership of the Company's common stock by all
directors and officers as a group is shown in the
Proxy Statement for the 1995 Annual Meeting, under the
caption "Stock Ownership of Principal Stockholders and
Management," which is incorporated herein by refer-
ence.
(c) Changes in Control
The Company knows of no contractual arrangements
which may at a subsequent date result in a change in
control of the Company.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS
None
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
REPORTS ON FORM 8-K
(a) 1. Financial Statements
The following consolidated financial statements
of CCH INCORPORATED and subsidiaries are presented on
pages 17 through 36 of the CCH 1994 Annual
Report, which pages are incorporated herein by
reference:
Consolidated Statements of Operations for the
years ended December 31, 1994, 1993 and
1992
Consolidated Balance Sheets as of December 31,
1994 and 1993
Consolidated Statements of Cash Flows for the
years ended December 31, 1994, 1993 and
1992
Consolidated Statements of Stockholders
Investment for the years ended December
31, 1994, 1993 and 1992
Notes to Consolidated Financial Statements for
the three years ended December 31, 1994
Independent Auditors' Report
(a) 2. Financial Statement Schedules
Financial Statement
Schedules are omitted because they are not applicable,
or not required, or because the required information
is included in the consolidated financial statements
or notes thereto.
(a) 3. Exhibit No.
The following exhibits of CCH INCORPORATED are
included in this report:
(3) By-laws of CCH INCORPORATED filed as
Exhibit 3 to the Companys
Annual Report on Form 10-K for the year
ended December 31, 1993
and incorporated herein by reference
(4) Revolving Credit Agreement By and Among
Commerce Clearing House,
Inc., the Banks Signatory Thereto and
National Westminster Bank
PLC, as agent for such banks, dated as
of July 1, 1994
(10) 1993 Long Term Incentive Plan adopted
February 11, 1993 as amended
and restated January 6, 1994 filed as
Appendix A to Proxy
Statement dated March 3, 1995
(13) The Companys 1994 Annual Report to
Shareholders
(21) Subsidiaries of the Registrant
(27) Financial Data Schedule
(99) Certificate of Ownership and Merger
merging Commerce Clearing
House Inc. into CCH INCORPORATED
(b) Reports on Form 8-K
On January 24, 1995, the Company filed a Report
on Form 8-K announcing that it had changed its name
from Commerce Clearing House, Inc. to CCH INCORPORATED
and that its stock symbols were changed from CCLR A
and CCLR B to CCHI A and CCHI B.
-9-
CCH INCORPORATED & Subsidiaries
DOCUMENTS INCORPORATED BY REFERENCE
Part I
Item 1 - Business Pages 7
through 9,
and 32
through 34
of CCH 1994
Annual
Report.
Part II
Item 5 - Market for the Registrant's Page 38 of
CCH 1994
Annual
Report.
Common Stock and Related
Security Holder Matters
Item 6 - Selected Financial Data Page 11 of
CCH 1994
Annual
Report.
Item 7 - Management's Discussion Pages 12
through 16 of CCH 1994 Annual and
Analysis of Financial Report.
Condition and Results of
Operations
Item 8 - Financial Statements and Pages 17
through 39 of CCH 1994 Annual
Supplementary Data Report.
Part III
Item 10 - Directors and Executive CCH Proxy
Statement dated March 2, 1995
Officers of the Registrant in
connectio
n with
its
Annual
Meeting
to be
held on
March 30,
1995 under
the caption
Election of
Directors".
Item 11 - Executive Compensation CCH Proxy
Statement
dated March
2, 1995 in
connection
with its
Annual
Meeting to
be held on
March 30,
1995 under
the captions
"Election of
Directors",
Summary
Compensation
Table,
Options/SAR
Grants,
Report of
the
Compansation
Committee,
Pension
Plan,
Supplementa
l Plan.
Item 12 - Security Ownership of CCH Proxy
Statement dated March 2,
Certain Beneficial Owners 1995 in
connection with its Annual
and Management Meeting to
be held on
March 30,
1995, under
the caption
"Stock
Ownership of
Principal
Stockholders
and
Management.
Part IV
Item 14 - Exhibits, Financial Pages 17
through 36 of CCH
Statement Schedules and 1994 Annual
Report.
Reports on Form 8-K.
-10-
Exhibit No. 22 Subsidiaries
Name of Subsidiary
Organized in
CCH Asia Limited
Delaware
CCH Malaysia SDN. BHD.
Malaysia
CCH Australia Limited
Australia
CCH New Zealand Limited New
Zealand
CCH Canadian Limited
Canada
Les Publications CCH/FM Lte
Canada
CCH Cayman Limited
Grand Cayman, B.W.I.
CCH Editions Limited
Delaware
CCH Europe, Inc.
Delaware
CCH Japan Limited
Delaware
CCH Legal Information Services, Inc.
Delaware
C T Corporation System
Delaware
Washington Service Bureau, Inc.
District of Columbia
All of the above subsidiaries are included
in the consolidated financial statements
furnished by this report and are wholly owned by
CCH or the subsidiary below which such
corporation's name is indented.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d)
of the Securities Exchange Act of 1934, CCH
INCORPORATED has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly
authorized.
CCH
INCORPORATED
/s/
Edward L. Massie
Edward
L. Massie
President & Chief Executive Officer
(Director)
/s/
John I. Abernethy
John
I. Abernethy
Chief
Financial Officer
Date: March 30, 1995
Pursuant to the requirements of the
Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the
Registrant and in the capacities on the dates
indicated:
/s/ John C. Burton /s/
Daniel K. Thorne
John C. Burton Daniel K. Thorne
(Director) (Director)
/s/ William C. Egan, III /s/
Oakleigh B. Thorne
William C. Egan, III Oakleigh B. Thorne
(Director) (Director)
/s/ Richard T. Merrill /s/
Oakleigh Thorne
Richard T. Merrill Oakleigh Thorne
(Director) (Director)
/s/ Ralph C. Whitley /s/
Robert H. Mundheim
Ralph C. Whitley Robert H. Mundheim
(Director) (Director)
Date: March 30, 1995
-12-
SIGNATURES
Pursuant to the requirements of Section 13 or
15(d) of the Securities Exchange Act of 1934, CCH
INCORPORATED has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly
authorized.
CCH
INCORPORATED
Edward
L. Massie
President & Chief Executive Officer
(Director)
John
I. Abernethy
Chief
Financial Officer
Date: March 30, 1995
Pursuant to the requirements of the
Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the
Registrant and in the capacities on the dates
indicated:
John C. Burton Daniel K. Thorne
(Director) (Director)
William C. Egan, III Oakleigh B. Thorne
(Director) (Director)
Richard T. Merrill Oakleigh Thorne
(Director) (Director)
Ralph C. Whitley Robert H. Mundheim
(Director) (Director)
Date: March 30, 1995
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