PAGE 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999
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 (I.R.S. Employer
incorporation or organization) Identification No.)
200 LIBERTY STREET, NEW YORK, NEW YORK 10281
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 416-2000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
------------------- -----------------------------------------
Common Stock $1.00 par value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
Class B Common Stock $1.00 par value
(Title of class)
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 a 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 the 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. ( )
Aggregate market value of common stock held by non-affiliates of the
registrant at January 31, 2000 was approximately $2,745,000,000.
The number of shares outstanding of each of the registrant's classes of common
stock on January 31, 2000: 68,690,903 shares of Common Stock and 21,173,539
shares of Class B Common Stock.
DOCUMENTS INCORPORATED BY REFERENCE
Parts I and II incorporate information from certain portions of the
registrant's Annual Report to Stockholders for the fiscal year ended December
31, 1999.
Part III incorporates information from certain portions of the registrant's
definitive Proxy Statement for the 2000 annual meeting of stockholders to be
filed with the Security Exchange Commission within 120 days after the close of
the fiscal year.
PAGE 2
PART I.
ITEM 1. Business.
Dow Jones & Company, Inc. (the company) is a global provider of business and
financial news and information. Its operations are divided into three
operating segments: print publishing, electronic publishing and general-
interest community newspapers. Financial information about operating segments
and geographic areas is incorporated by reference to Note 16 to the Financial
Statements on pages 49 through 51 of the 1999 Annual Report to Stockholders
(Exhibit 13 to this Form 10-K.).
On July 1, 1999, the company formed a 50-50 joint venture, Dow Jones Reuters
Business Interactive LLC (Factiva), with Reuters Group Plc, into which Dow
Jones contributed a significant portion of its Dow Jones Interactive business
unit.
In 1999, the company disposed of certain non-core investments which included
its interest in United States Satellite Broadcasting, Inc., a portion of its
holdings in OptiMark Technologies, Inc. and IDD Enterprises L.P., a
subsidiary. On January 14, 2000, the company sold Dow Jones Financial
Publishing Corp., its subsidiary which publishes: Investment Advisor, Asset
Management, Property and Realty Stock Review.
At December 31, 1999, the company employed 8,175 full-time employees. The
company's principal executive offices are located at 200 Liberty Street, New
York, New York, 10281.
Print publishing
- ----------------
The print publishing segment contains the operations of The Wall Street
Journal and its international editions, Barron's and other periodicals, as
well as U.S. television operations. Results of the company's international
television ventures are included in Equity in Losses of Associated Companies.
The Wall Street Journal, the company's flagship publication, is one of the
country's largest daily newspapers with average circulation for 1999 of
1,764,000. The Wall Street Journal is edited in New York City at the
company's executive offices. The Journal's three major regional editions are
printed at 17 plants located across the United States. The Wall Street
Journal offers advertisers the opportunity to focus their messages through 18
localized editions and the option of advertising in full color.
In 1998, the company launched a $232 million three-year program to expand
color and page capacity for The Wall Street Journal. This project will expand
the Journal's page capacity from 80 pages to 96 pages and color page capacity
from eight pages to 24 pages and offers advertisers added flexibility with
regard to the positioning of color advertising throughout the paper.
The Wall Street Journal also expands its coverage of business and economic
trends to select regions of the United States. The Wall Street Journal
regional coverage includes publications in Texas, Florida, California, the
Northwest, the Southeast and the New England markets. These Journal editions
appear every Wednesday as four news and advertising pages in copies of The
Wall Street Journal distributed in their respective markets.
PAGE 3
The Journal also provides weekend-oriented coverage every Friday via a fourth
section "Weekend Journal". Weekend Journal includes expanded personal-finance
coverage as well as pages devoted to travel, wines, sports, residential real
estate and the arts. The Journal also publishes at various times of the year
special reports on topics such as technology, personal finance and executive
compensation, as well as demographically targeted editions devoted to subjects
of retirement and small business.
The Wall Street Journal Sunday, launched in 1999, introduced a four-page
package, roughly half news and half advertising, with content focused on
personal finance and careers. The Sunday Journal is published once a week in
the business sections of partner newspapers with combined circulation of over
5.8 million. Participating newspapers include The Denver Post, The Sun-
Sentinel of Fort Lauderdale, Florida, The Minneapolis Star Tribune, The Orange
County Register, The St. Petersburg Times, the Milwaukee Journal-Sentinel, the
New Orleans Times-Picayune, the Raleigh News & Observer, the St. Louis Post-
Dispatch, The Sacramento Bee, the Austin American-Statesman, the Daily Herald,
the Fort Worth Star-Telegram, the Hartford Courant group, The Providence
Journal and The Record (Bergen Co., NJ). The company receives a content fee
and shares in the advertising revenues. The Technology Journal, initiated in
February 1998, is published each Thursday in the Marketplace section of The
Wall Street Journal. The coverage focuses on companies with new technology
affecting people's lives, or some trend or movement in technology.
The production of the paper employs satellite transmission of page images to
the outlying plants and other technologies designed to speed the delivery of
editorial material to the presses and to reduce the steps taken in the
printing process.
In early 1999, the company initiated The Wall Street Journal Pagination
project, which is expected to streamline the production process and compose
electronically all news and advertising pages of the Journal using a fully
integrated system with a new ad-layout and editorial components. It is
intended to provide a fresher and more competitive Journal by delivering the
paper to more readers before 6:30 a.m. every business day while providing an
edition with more timely news due to later closing pages. The Journal is
expected to be fully paginated by the end of the second quarter of 2000.
Other Dow Jones publications, notably Barron's, The Asian Wall Street Journal
and The Wall Street Journal Europe are expected to be utilizing the new
pagination system by the end of 2000.
The Wall Street Journal is delivered principally in two ways: through the
company's National Delivery Service, Inc. subsidiary and by second-class
postal service. In 1999, the National Delivery Service on average delivered
about 1.2 million, or 78%, of the Journal's subscription copies each
publishing day. This system provides delivery earlier and more reliably than
the Postal Service. Approximately 180,000 copies of the Journal are sold each
business day at newsstands.
The Wall Street Journal Europe is headquartered in Brussels, Belgium and
printed in Belgium, Germany, Switzerland, Italy and the United Kingdom. It is
available on the day of publication in continental Europe, the United Kingdom,
the Middle East and North Africa. The newspaper had an average circulation in
1999 of 80,000. Effective January 1, 2000, the company and the von
Holtzbrinck group, a leading German media company (publisher of Handelsblatt,
a German business newspaper, and with interests in TV production, radio
broadcasting and multimedia) exchanged minority stakes in The Wall Street
Journal Europe and Handelsblatt. The agreement included a commitment to
double circulation of the Journal Europe within five years and to expand the
page capacity from an average of 28 to 40 pages per day, including an increase
in color pages from 8 to 12.
PAGE 4
The Central European Economic Review was distributed as an insert in The Wall
Street Journal Europe and also sold separately by subscription. The magazine,
previously published monthly, was closed in December 1999 and central Europe
coverage was made a daily part of the Journal Europe. Convergence, which is a
quarterly magazine that reports on multimedia industries in Europe, is
delivered as an insert in The Wall Street Journal Europe.
The Asian Wall Street Journal is headquartered and printed in Hong Kong and is
transmitted by satellite to additional printing sites in Singapore, Japan,
Thailand, Malaysia, Taiwan, Philippines, Korea and Indonesia. The Asian Wall
Street Journal had average circulation of 67,000 in 1999.
The company has substantial breadth and depth of journalistic resources with
its print and electronic businesses which are drawn on by all print editions.
The Asian Journal provides the foundation for the company's Asian Wall Street
Journal Weekly Edition, which is published in New York for North American
readers with interests in Asia.
The company began expanding readership of The Wall Street Journal news content
by introducing The Wall Street Journal Americas in 1994 to Central and South
America. Since then the company has broadened its delivery of Journal news
content to other parts of the world. These Special Editions are part of 34
newspapers in 28 countries. They are published in 9 different languages and
serve a combined circulation in excess of five million.
Barron's, the Dow Jones Business and Financial Weekly, is a magazine that
specializes in reporting and commentary on financial markets. The weekend
magazine, which had an average circulation of 300,000 in 1999, uses eleven of
the seventeen printing plants employed in the production of the domestic Wall
Street Journal. Barron's is edited in New York City and is delivered by
second-class postal service and through National Delivery Service. Barron's
sells 115,000 copies at newsstands weekly.
Other business publications include the Far Eastern Economic Review, Asia's
leading English-language business news-weekly, and The Wall Street Journal
Classroom Edition, which is published nine times during the school year and is
used in more than 3,700 middle-school and high-school classrooms throughout
the United States.
SmartMoney, The Wall Street Journal Magazine of Personal Business, featuring
personal investing, spending and saving money, is published jointly with
Hearst Corp. In 1999, SmartMoney launched a free portal site, SmartMoney.com,
which provides investment news, tools, and advice.
Vedomosti, or The Record, was introduced in 1999 in Russia. Vedomosti,
considered the only independent business newspaper in Russia, is published
daily, Monday through Friday. While intended to become a national daily,
initial circulation is centered in the business community in Moscow and St.
Petersburg. The new publication uses original content created by 59 Russian
reporters and editors and content from The Financial Times and The Wall Street
Journal translated into the Russian language. The newspaper is owned one-
third each by Dow Jones, Pearson and Independent Media.
PAGE 5
Also included in this segment is the domestic portion of the company's
television group. As a result of the global business television alliance with
NBC, the company's domestic operations provide business news programming to
CNBC as part of a multiyear license agreement. The company's overseas
television ventures, which were merged with CNBC's overseas operations into
equally-owned operations in Europe and Asia, are included as part of the
Equity in Losses of Associated Companies. In early 1998, NBC and Dow Jones
re-launched their business information channels in Europe and Asia as CNBC, a
service of NBC and Dow Jones. The overseas services reach in total nearly 49
million households on a full-time basis and over 54 million households on a
part-time basis.
Additionally as part of the television alliance with NBC, Dow Jones joined
Microsoft Corp. and NBC in certain interactive initiatives, including
supplying highlights of WSJ.com to the MSNBC internet site, and an ownership
interest in MSNBC Business Video in the United States, renamed CNBC/Dow Jones
Business Video. This service provides live and archived audio and video
business and financial news events via the World Wide Web.
Electronic publishing
- ---------------------
Electronic publishing includes the operations of Dow Jones Newswires, Dow
Jones Indexes, WSJ.com, dowjones.com and Dow Jones Interactive and other.
Dow Jones Newswires is a global publisher of real-time business and financial
news. Its various wires are displayed on approximately 318,000 terminals
worldwide, providing users with real-time information on equities, fixed
income, foreign exchange, commodities and energy. Dow Jones Newswires has a
dedicated staff of over 750 business and financial journalists in addition to
drawing on the resources of the global Journal and Associated Press. In 1998,
the company entered into non-exclusive agreements with Bridge Information
Systems, Inc., Reuters Group Plc and Bloomberg L.P. to market Dow Jones
Newswires worldwide as an optional service to users of these leading market
data vendors. In 1999, the company began to distribute Newswires material
through DLJdirect, an on-line subsidiary of Donaldson, Lufkin & Jenrette, Inc.
and Merrill Lynch Direct. The agreements with these firms mark the first
time that Dow Jones Newswires content has been offered on a real-time basis to
customers of on-line brokers.
Dow Jones News Service, a 24-hour service, is North America's pre-eminent
supplier of business and financial news to subscribers at brokerage firms,
banks, investment companies and other businesses. Capital Markets Report is
the company's newswire that covers fixed income and financial futures markets
around the world.
The Dow Jones Newswires, produced outside the United States in conjunction
with the Associated Press (AP) since 1967, provides international economic,
business and financial news to subscribers in 65 countries. In addition to
two broad international newswires, the company and the AP offer specialized
wires dedicated to the coverage of European and Asian equities, banking and
the markets in foreign exchange. Other newswires provided in alliance with
the AP include the World Equities Report, which serves U.S. institutions
investing in international markets.
PAGE 6
The Dow Jones Asian Equities Report, launched in 1994, covers 15 Asian-Pacific
stock markets and news of the companies traded on them. Headquartered in
Singapore, the service draws on the staffs of the Dow Jones Newswires, The
Asian Wall Street Journal and Far Eastern Economic Review, as well as its own
editors and reporters.
Washington-based Federal Filings publishes newswires, newsletters and
investment research based on its coverage of federal regulatory agencies,
Capitol Hill and bankruptcy courts nationwide. Federal Filings' products
include Federal Filings Business News, a real-time newswire covering the
Security Exchange Commission filings; Daily Bankruptcy Review, a compendium of
large bankruptcy filings throughout the U.S.; and 13F Advance, which analyzes
the equity portfolio changes of prominent money managers.
The Wall Street Journal Interactive Edition (WSJ.com) was introduced in 1996
on the Internet and offers continuously updated coverage of business news both
in the U.S. and around the world, supported by the global resources of The
Wall Street Journal and Dow Jones Newswires. Subscribers have access to more
than 22,000 in-depth background reports on companies, an archive of news
articles, and personal news and stock portfolios. Subscribers can also search
the Dow Jones Publications Library, featuring current and past articles from
6,000 newspapers, magazines and business-news sources. At December 31, 1999,
WSJ.com had over 375,000 subscribers and was the largest paid subscription
site on the Internet.
dowjones.com, a free portal site launched in 1999, offers industry news and
information for small business and non-professional users. It provides a
business search engine, news stories, e-commerce, personalized features and
editorial resources for 29 key industries. dowjones.com also includes
selected stories from Dow Jones Newswires and highlights from WSJ.com. On
February 22, 2000, the company and Excite At Home Corp. announced the
formation of a new company, Work.com, which will combine dowjones.com and
Excite At Home's Work.com. The new venture will develop a premier business
portal, focusing on the business-to business market and build a leading
business portal designed primarily for the needs of small and medium-sized
business Internet users. Consumer sites include SmartMoney.com, which
provides a resource for private investors on personal finance and daily
updates on current investment opportunities; careers.wsj.com; homes.wsj.com;
travel.wsj.com; and startup.wsj.com.
The Dow Jones Indexes group develops, maintains and markets Dow Jones' various
index products. In 1997, the company began licensing the Dow Jones Industrial
Averages as well as other indexes as the basis for trading options, futures,
unit trusts, annuities, mutual funds, derivatives and specialized structured
products. In 1998, Dow Jones and the leading exchanges of France (SBF-Bourse
de Paris), Germany (Deutsche Borse) and Switzerland (Swiss Exchange) entered
into a joint venture, named STOXX Ltd. The Dow Jones STOXX family of indices
accounts for $180 billion of assets at year-end 1999, constituting the largest
assets based on Dow Jones Indexes. STOXX tracks the performance of certain
European equities, including broad-based measures as well as gauging the
market performance of countries that have joined the European Economic and
Monetary Union. In 1999, STOXX expanded into northern Europe, to cover the
Scandinavian and Nordic markets.
Dow Jones Indexes is a global provider of investable indexes. In addition to
the Dow Jones Averages and the pan European Dow Jones STOXX, the Dow Jones
Indexes include the Dow Jones REIT Indexes, the Dow Jones-AIG Commodity Index,
the Dow Jones Islamic Market Indexes, the Dow Jones Internet Indexes, the Dow
Jones Global Titans Index, The Dow Jones Extra Liquid Series, the Dow Jones
Sustainability Group Indexes, and the Dow Jones Total Market Index Series.
PAGE 7
Dow Jones Reuters Business Interactive LLC (Factiva) is a joint venture
launched in mid-1999 with Reuters Group Plc. Each partner had a significant
but different market share in the global market for providing business
information electronically to corporations and professionals. The Dow Jones
Interactive product had a larger customer base in North America, while
Reuters' former product, Reuters Business Briefing, had a larger customer
presence in Europe and Asia. The venture's business plan, combining both
products into one new product, calls for the development of an innovative new
web-based service to provide corporate news, information and research data to
many categories of business professional at their desktops.
Factiva, currently, is a leading global provider of proprietary and third
party business information, as well as a suite of information integration
solutions that help clients combine internal and external news to build
corporate knowledge centers. In addition to exclusive access to Dow Jones and
Reuters newsflows, the joint venture's content, appearing on more than one
million desktops in 30 countries, includes millions of articles from more than
7,000 business, trade and local publications, including information sources in
20 languages with user interfaces in 11 of these languages.
Community Newspapers
- --------------------
Community newspapers published by Ottaway Newspapers, Inc., a wholly-owned
subsidiary, include 19 general-interest dailies in eleven states: California,
Connecticut, Kentucky, Massachusetts, Michigan, Minnesota, Missouri, New
Hampshire, New York, Oregon and Pennsylvania. Average circulation of the
dailies during 1999 was approximately 555,0000; Sunday circulation for 14
newspapers was 530,000. Community newspapers also publish 15 weekly
publications. The daily newspapers and some of the weeklies have their own
Internet web sites, with combined revenues of $1.5 million in 1999. The
principal administrative office of Ottaway Newspapers is in Campbell Hall, New
York. The primary delivery method for the newspapers is private delivery.
Other
- -----
Dow Jones' investments include a minority interest in OptiMark Technologies,
Inc., a developer of trading systems for equities; Nation Multimedia Group
Public Co., Ltd., a Bangkok, Thailand, publisher of English and Thai-language
magazines and newspapers; AmericaEconomia, a Spanish and Portuguese language
business magazine in South America; VWD-Vereinigte Wirtschaftsdienste GmbH, a
German news agency specializing in business and economic news and information;
HB-Dow Jones S.A., a part-owner of Economia, a publishing company in the Czech
Republic; Internet Technologies China, Inc. (Sohu.com Inc.) and F.F. Soucy
Inc. & Partners, L.P., a newsprint mill in Canada.
Effective January 1, 2000, Dow Jones and the von Holtzbrinck group (a major
German media company) swapped minority stakes in The Wall Street Europe and
Handelsblatt, Germany's leading business newspaper. The von Holtzbrinck group
owns 49% of the European Journal, while Dow Jones owns 22% of Handelsblatt.
In addition, Dow Jones contributed a portion of its interest in Economia (a
Czech business newspaper) and VWD (German financial news agency) to the von
Holtzbrinck group.
Other investments of the company include $150 million ($162.3 million
including accrued dividends and a note receivable) of five-year, convertible,
4% preferred stock of Bridge Information Systems, Inc.
PAGE 8
Raw Materials
- -------------
The primary raw material used by the company is newsprint. In 1999
approximately 300,000 metric tons were consumed. Newsprint was purchased
principally from 12 suppliers. The company is a limited partner in F.F.
Soucy, Inc. & Partners, L.P., Riviere du Loup, Quebec, Canada. F.F. Soucy
furnished 12.7% of total newsprint requirements in 1999. The company has
signed long-term contracts with certain newsprint suppliers, including F.F.
Soucy, for a substantial portion of its annual newsprint requirements. For
many years the available sources of newsprint have been adequate to supply the
company's needs.
Research and Development
- ------------------------
Research and development expenses were $30,544,000 in 1999, $60,988,000 in
1998, and $116,420,000 in 1997. Excluding Telerate operations, R&D expenses
totaled $32,029,000 in 1998, and $31,887,000 in 1997.
Competition
- -----------
The print publications of the company are highly competitive. In its various
news-publishing activities, Dow Jones competes with a wide spectrum of other
information media. All metropolitan general interest newspapers and many
small city or suburban papers carry business and financial pages or sections,
including securities quotations, as do many Internet-based publications and
services. In addition, specialized magazines in the business and financial
field, as well as general news magazines publish substantial amounts of
business-related material. Nearly all these publications seek to sell
advertising space and much of this effort is directly or indirectly
competitive with Dow Jones' publications. The Journal also competes for
advertising with non-business publications, such as technology magazines,
offering audiences of similar demographic quality. In addition, the Journal
and the company's other business publications also compete with television and
radio for advertisers.
The company's newswires compete with other global financial newswires
including Reuters Group Plc, Bloomberg L.P., Bridge Information Systems, Inc.,
as well as McGraw-Hill, Inc. The company's newswires maintain a stronger
market position in North America than internationally.
Dow Jones' index-licensing business competes with various organizations that
develop and license indexes, including the Standard & Poors unit of McGraw-
Hill, Inc., Financial Times, and Morgan Stanley/Capital International. Dow
Jones competes with these organizations in developing benchmarks of equity
market performance to which investable products may be linked.
Factiva competes with various business information services, including Dialog
Corp. and Lexis-Nexis, a division of Reed Elsevier Plc which may have an equal
or greater market share. It also competes with various online services
offered via the Internet. Information services that were formerly available
to only a few research professionals in business are now readily available to
many due to the expansion of the Internet. Competition to meet the growing
demand for fast access to business and personal finance information is intense
and technologies to disseminate this information are rapidly changing.
PAGE 9
All of the community newspapers operating under Ottaway Newspapers, Inc.
compete with metropolitan general-interest newspapers, and most compete with
other newspapers, local radio and television available in their respective
sales areas.
The company's overseas business television ventures compete with various
international satellite networks that specialize in general news but also
provide business programming. Also, individual television stations, networks
and cable channels in each country broadcast programming that competes for
advertising and the attention of viewers in their respective markets.
ITEM 2. Properties.
Dow Jones operates 17 plants with an aggregate of approximately one million
square feet for the printing of its domestic publications. Printing plants
are located in Palo Alto and Riverside, California; Denver, Colorado; Orlando,
Florida; LaGrange, Georgia; Naperville and Highland, Illinois; Des Moines,
Iowa; White Oak, Maryland; Chicopee Falls, Massachusetts; South Brunswick, New
Jersey; Charlotte, North Carolina; Bowling Green, Ohio; Sharon, Pennsylvania;
Dallas and Beaumont, Texas; and Federal Way, Washington. All plants include
office space. All are owned in fee except the Palo Alto, California, plant,
which is located on 8.5 acres under a lease to Dow Jones for 50 years,
expiring in 2015.
Other facilities owned in fee with a total of approximately 870,000 square
feet house news, sales, administrative, technology and operational staff.
These facilities are located in South Brunswick, New Jersey, and Chicopee
Falls, Massachusetts. The company presently plans to sublet 400,000 square
feet of office space in South Brunswick.
Dow Jones occupies two major leased facilities in New York City, including
320,000 square feet at the World Financial Center, which primarily houses
editorial and executive staff, and 89,000 square feet at a separate location
for advertising sales staff.
The company also leases other business and editorial offices in numerous
locations around the world, including 50,000 square feet in two locations in
Hong Kong.
Ottaway Newspapers operates in 26 locations, including a 24,000 square foot
administrative headquarters in Campbell Hall, New York. These facilities are
located in Santa Cruz, California; Danbury, Connecticut; Ashland, Kentucky;
Beverly, Hyannis, New Bedford, Gloucester, Nantucket, Peabody, Salem and
Newburyport, Massachusetts; Traverse City, Michigan; Mankato, Minnesota;
Joplin, Missouri; Exeter and Portsmouth, New Hampshire; Middletown, Oneonta,
Plattsburgh and Port Jervis, New York; Medford, Oregon; and Grove City,
Sharon, Stroudsburg and Sunbury, Pennsylvania. Local printing facilities,
which include office space, total approximately 1.2 million square feet. All
facilities are owned in fee except the office space in Salem, which is leased.
The company believes that its current facilities are suitable and adequate,
well maintained and in good condition. Older facilities have been modernized
and expanded to meet present and anticipated needs.
PAGE 10
ITEM 3. Legal Proceedings
Not applicable.
ITEM 4. Submission of Matters to a Vote of Security Holders.
Not applicable.
PAGE 11
Executive Officers of the Registrant
- ------------------------------------
Each executive officer is elected annually to serve at the pleasure of the
Board of Directors.
All executive officers named below, with the exception of Mr. Bailey and Mr.
Baumkirchner, have been employed by the company for more than five years.
Peter R. Kann, age 57, Chairman of the Board since July 1991, Chief Executive
Officer since January 1991 and Publisher of The Wall Street Journal since
January 1989, served as President from July 1989 to July 1991 and Chief
Operating Officer from July 1989 to December 1990, Executive Vice President
from 1985 to 1989 and Associate Publisher of The Wall Street Journal from 1979
to 1988.
Jerome H. Bailey, age 47, joined the company in April 1998 as Senior Vice
President and Chief Financial Officer and in October 1998 was promoted to
Executive Vice President and Chief Financial Officer. Prior to joining Dow
Jones, Mr. Bailey was Chief Financial Officer for Salomon, Inc. and Salomon
Brothers from 1993 until Salomon was acquired by Travelers Group, Inc. in
1997.
Peter G. Skinner, age 55, Executive Vice President since October 1998 and
General Counsel and Secretary since 1985, Senior Vice President from November
1989 to October 1998, President, Television from January 1995 to December
1997, served as Vice President from 1985 to November 1989.
James H. Ottaway Jr., age 62, Senior Vice President since 1986, President of
Magazines since February 1988, Chairman of Ottaway Newspapers, Inc. since
1979, served as President of the International Group from February 1988 to
January 1995, as Vice President/Community Newspapers from 1980 to 1985 and as
President of Ottaway Newspapers, Inc. from 1970 to 1985 and its Chief
Executive from 1976 to January 1989, resuming that position in June 1998.
L. Gordon Crovitz, age 41, Senior Vice President/Electronic Publishing since
October 1998, Vice President/Planning and Development from November 1997 to
October 1998. Managing Director for Telerate's Asia/Pacific operation from
September 1996 to November 1997. Editor and Publisher of Review Publishing
Company from July 1993 to September 1996.
Raymond Baumkirchner, age 54, Vice President, Finance, joined the company in
February 2000. Prior to joining Dow Jones, Mr. Baumkirchner was Managing
Director of PricewaterhouseCoopers LLP since 1995.
Thomas G. Hetzel, age 44, Vice President, Finance since July 1998, Comptroller
from October 1993 to December 1998, served as Associate Comptroller from 1992
to 1993 and Assistant Comptroller from 1988 to 1992.
Lawrence K. Kinsella, age 43, Comptroller since December 1998, served as
Associate Comptroller from October 1993 to December 1998, and Controller of
Telerate from 1990 to May 1998.
PAGE 12
PART II.
ITEM 5. Market for the Registrant's Common Equity and Related Stockholder
Matters.
The information required by this item is incorporated by reference to page 53
of the 1999 Annual Report to Stockholders, included in this Form 10-K as
Exhibit 13.
ITEM 6. Selected Financial Data.
The information required by this item is incorporated by reference to page 54
of the 1999 Annual Report to Stockholders, included in this Form 10-K as
Exhibit 13.
ITEM 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
The information required by this item is incorporated by reference to pages 22
through 32 of the 1999 Annual Report to Stockholders, included in this Form
10-K as Exhibit 13.
ITEM 7A. Quantitative and Qualitative Disclosure about Market Risks.
The information required by this item is incorporated by reference to page 52
of the 1999 Annual Report to Stockholders, included in this Form 10-K as
Exhibit 13.
ITEM 8. Financial Statements and Supplementary Data.
The information required by this item is incorporated by reference to pages 35
through 54 of the 1999 Annual Report to Stockholders, included in this Form
10-K as Exhibit 13.
ITEM 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
Not applicable.
PAGE 13
PART III.
ITEM 10. Directors and Executive Officers of the Registrant.
The information required by this item with respect to directors of the company
is incorporated by reference to the tables, including the footnotes thereto,
titled "Nominees for Election at the Annual Meeting," "Incumbent Directors
(Class of 2001)" and "Incumbent Directors (Class of 2002)" in the 2000 Proxy
Statement and to the material in footnote 5 to the table under the caption
"Security Ownership of Directors and Management" in the 2000 Proxy Statement.
The information required by this item with respect to compliance with Section
16(a) of the Securities Exchange Act of 1934 is incorporated by reference to
the material under the caption "Section 16(a) Beneficial Ownership Reporting
Compliance" in the 2000 Proxy Statement. For the information required by this
item relating to executive officers, see Part I, page 11 of this 1999 Form
10-K.
ITEM 11. Executive Compensation.
The information required by this item is incorporated by reference to the
tables, including the footnotes thereto, appearing under the captions
"Executive Compensation" and "Separation Plan for Senior Management" in the
2000 Proxy Statement, and to the material in the fifth through eighth
paragraphs preceding the "Executive Compensation" section in the 2000 Proxy
Statement.
ITEM 12. Security Ownership of Certain Beneficial Owners and Management.
The information required by this item is incorporated by reference to the
tables, including the footnotes thereto, appearing under the captions
"Security Ownership of Certain Beneficial Owners" and "Security Ownership of
Directors and Management" in the 2000 Proxy Statement.
ITEM 13. Certain Relationships and Related Transactions.
The information required by this item is incorporated by reference to
footnotes 2 and 7 to the tables titled "Nominees for Election at the Annual
meeting," "Incumbent Directors (Class of 2001)" and "Incumbent Directors
(Class of 2002)" in the 2000 Proxy Statement.
PAGE 14
PART IV.
ITEM 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
14(a)(1) The following financial statements, the notes thereto and related
report thereon of PricewaterhouseCoopers, independent certified public
accountants, included in the annual report of the company for the year ended
December 31, 1999 are filed as a part of the report and are incorporated by
reference in Item 8:
Page Reference
--------------
1999 Annual
Report to
Stockholders
(Exhibit 13
to this
Form 10-K)
--------------
Included in Part II, Item 8 of this report:
Consolidated statements of income (loss) for the
years ended December 31, 1999, 1998 and 1997 35
Consolidated balance sheets, December 31, 1999
and 1998 36 - 37
Consolidated statements of cash flows for the
years ended December 31, 1999, 1998 and 1997 38
Consolidated statements of stockholders' equity
for the years ended December 31, 1999, 1998 and 1997 39
Notes to financial statements 40 - 52
Statement of management's responsibility for
financial statements 33
Report of independent accountants 34
Page Reference
--------------
Form 10-K
--------------
(a)(2) Financial Statement Schedules:
Included in Part IV of this report:
Report and consent of independent accountants 19
Schedule II - Valuation and qualifying accounts and reserve 20
Other schedules have been omitted since they are either not required or not
applicable.
PAGE 15
(a) (3) Exhibits
Exhibit
Number Document
- ------- --------
3.1 The Restated Certificate of Incorporation of the company, as amended
April 25,1989, is hereby incorporated by reference to Exhibit 10.15
to its Form 10-Q for the quarter ended June 30, 1999.
3.2 The By-laws of the company restated as of May 17, 1989 is hereby
incorporated by reference to Exhibit 10.16 to its Form 10-Q for the
quarter ended June 30, 1999.
4.1 Form of promissory note for commercial paper is hereby
incorporated by reference to Exhibit 4.1 to its Form 10-Q for the
quarter ended September 30, 1985.
10.1 Deferred Compensation Contracts between the Company and various
officers and directors are hereby incorporated by reference to
Exhibit 20 to its Form 10-K for the year ended December 31, 1980.
10.2 Dow Jones 1981 Stock Option Plan, as amended, is hereby
incorporated by reference to Exhibit 20.2 to its Form 10-Q for
the quarter ended June 30, 1981.
10.3 Lease, as amended, between the Company and Olympia and York
Battery Park Company, of space in The World Financial Center, New
York City, is hereby incorporated by reference to Exhibit 10.9 to
its Form 10-K for the year ended December 31, 1983.
10.4 Dow Jones 1988 Executive Incentive Plan, as amended, is hereby
incorporated by reference to Exhibit 19 to its Form 10-Q for the
quarter ended June 30, 1988.
10.5 Lease, as amended, between the Company and Waterfront Associates,
of space at Harborside Plaza Two, Jersey City, N.J. is hereby
incorporated by reference to Exhibit 10.15 to its Form 10-K for
the year ended December 31, 1989 .
10.6 Dow Jones 1991 Stock Option Plan, as amended, is hereby
incorporated by reference to Exhibit 19.2 to its Form 10-Q for
the quarter ended September 30, 1991.
10.7 Dow Jones 1992 Long term Incentive Plan is hereby incorporated by
reference to Exhibit 10 to its Form 10-Q for the quarter ended
March 31,1992.
10.8 Dow Jones 1997 Long Term Incentive Plan is hereby incorporated
by reference to Exhibit 10 to its Form 10-Q for the quarter ended
March 31, 1997.
10.9 Dow Jones Credit Agreement dated November 16, 1994 between the
company and Chemical Bank is hereby incorporated by reference to
Exhibit 10.9 to its Form 10-K for the year ended December 31,
1994.
PAGE 16
Exhibit
Number Document
------- --------
10.10 First Amendment to the Dow Jones Credit Agreement dated December
31, 1997 between the company and The Chase Manhattan Bank is
hereby incorporated by reference to Exhibit 10.10 to its Form
10-K for the year ended December 31, 1997.
10.11 Retirement Agreement dated December 30, 1997 between the company
and Mr. Valenti is hereby incorporated by reference to Exhibit
10.11 to its Form 10-K for the year ended December 31, 1997.
10.12 Dow Jones 1998 Stock Option Plan is hereby incorporated by
reference to Exhibit 10.12 to its Form 10-Q for the quarter ended
March 31, 1998.
10.13 Separation Plan for Senior Management is hereby incorporated by
reference to Exhibit 10.13 to its Form 10-K for the year ended
December 31, 1998.
10.14 Separation Agreement and Release of Claims dated December 2, 1998
between the company and Mr. Kenneth L. Burenga is hereby
incorporated by reference to Exhibit 10.14 to its Form 10-K for
the year ended December 31, 1998.
10.15 The Restated Credit Facility as of June 29, 1999 is hereby
incorporated by reference to Exhibit 10.17 to its Form 10-Q for
the quarter ended June 30, 1999.
* 13 1999 Annual Report to Stockholders (pages 22 through 54)
21 List of Subsidiaries
23 Consent of PricewaterhouseCoopers LLP, independent accountants,
is contained on page 19 of this report.
* 27 Financial Data Schedule
* Securities and Exchange Commission and New York Stock Exchange copies
only.
(b) Reports on Form 8-K
Form 8-K, dated December 22, 1999
PAGE 17
Pursuant to the requirements of Section 13 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.
By Lawrence K. Kinsella
-------------------------
Comptroller
(Chief Accounting Officer)
Dated: March 1, 2000
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 and on the dates indicated.
Signature Title Date
- --------- ----- ----
Peter R. Kann
- -------------------------- Chairman of the Board March 1, 2000
Chief Executive Officer
Jerome H. Bailey
- -------------------------- Executive Vice President March 1, 2000
Chief Financial Officer
Rand V. Araskog
- -------------------------- Director March 1, 2000
Christopher Bancroft
- -------------------------- Director March 1, 2000
William C. Cox
- -------------------------- Director March 1, 2000
Harvey Golub
- -------------------------- Director March 1, 2000
Roy Hammer
- -------------------------- Director March 1, 2000
Leslie Hill
- -------------------------- Director March 1, 2000
PAGE 18
Signature Title Date
- --------- ----- ----
Irvine O. Hockaday, Jr.
- -------------------------- Director March 1, 2000
Vernon E. Jordan
- -------------------------- Director March 1, 2000
David K.P. Li
- -------------------------- Director March 1, 2000
Jane C. MacElree
- -------------------------- Director March 1, 2000
M. Peter McPherson
- -------------------------- Director March 1, 2000
Frank N. Newman
- -------------------------- Director March 1, 2000
James H. Ottaway, Jr.
- -------------------------- Director March 1, 2000
William C. Steere, Jr.
- -------------------------- Director March 1, 2000
PAGE 19
INDEPENDENT ACCOUNTANTS' REPORT ON FINANCIAL STATEMENT SCHEDULE
---------------------------------------------------------------
To the Board of Directors and Stockholders of Dow Jones & Company, Inc.:
Our audits of the consolidated financial statements referred to in our report
dated January 25, 2000 appearing in the 1999 Annual Report to Shareholders of
Dow Jones & Company, Inc. (which report and consolidated financial statements
are incorporated by reference in this Annual Report on Form 10-K) also
included an audit of the Financial Statement Schedule listed in Item 14(a)(2)
of this Form 10-K. In our opinion, this Financial Statement Schedule presents
fairly, in all material respects, the information set forth therein when read
in conjunction with the related consolidated financial statements.
PRICEWATERHOUSECOOPERS LLP
New York, New York
January 25, 2000
CONSENT OF INDEPENDENT ACCOUNTANTS
- ----------------------------------
We consent to the incorporation by reference in the Registration Statements on
Form S-3 (File No. 333-02071) and Form S-8 (File Nos. 2-72684, 33-45962,
33-45963, 33-49311, 33-55079, 333-57175, 333-70921, and 333-67523) of
Dow Jones & Company, Inc. of our report dated January 25, 2000 which appears
in the Annual Report to Stockholders, which is incorporated in this Annual
Report on Form 10-K. We also consent to the incorporation by reference of our
report dated January 25, 2000 relating to the financial statement schedule,
which appears above.
PRICEWATERHOUSECOOPERS LLP
New York, New York
March 1, 2000
PAGE 20
Schedule II
DOW JONES & COMPANY, INC.
and its Subsidiaries
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
for the years ended December 31, 1999, 1998, and 1997
(in thousands)
Additions
------------------------
Balance at Charged to Charged Balance
Beginning Cost and to Other at End
Description of Period Expenses Accounts(A) Deductions of Period
----------- --------- --------- ---------- ------------ ---------
Year ended December 31, 1999:
Reserves deducted from assets -
Allowance for doubtful accounts $ 6,641 $ 3,479 $ 767 $ 4,717 (B) $ 6,170
======== ======== ====== ======= ========
Tax valuation allowance $222,504 - - $36,680 $185,824
======== ======== ====== ======= ========
Year ended December 31, 1998:
Reserves deducted from assets -
Allowance for doubtful accounts $ 16,445 $ 4,623 $3,234 $17,661 (B) $ 6,641
======== ======== ====== ======= ========
Tax valuation allowance - $222,504 - - $222,504
======== ======== ====== ======= ========
Year ended December 31, 1997:
Reserves deducted from assets -
allowance for doubtful accounts $ 16,234 $ 10,743 $4,134 $14,666 (B) $ 16,445
======== ======== ====== ======= ========
Notes:
(A) Recoveries of accounts previously written off and reductions of revenue.
(B) Accounts written off as uncollectible and credits issued to customers. In 1998 also includes a
deduction of $9,955,000 resulting from the divestiture of Telerate.