EXHIBIT 99.1
Dow Jones & Company
4300 North Route 1
South Brunswick, NJ 08852
Investor Contact: Mark Donohue
(609) 520-5660
Richard Zannino
(609) 520-4121
Media Contact: Steven Goldstein
(609) 520-4110
(888) 294-7227
DOW JONES & COMPANY ANNOUNCES
THIRD QUARTER EARNINGS;
Provides Fourth Quarter Earnings Guidance
SOUTH BRUNSWICK, N.J. (October 11, 2001)-- Dow Jones & Company announced
today that it earned $17.4 million, or 20 cents per diluted share, before
special items, during the quarter ended September 30, 2001, compared to 55
cents per diluted share last year.
The Company reported net income for the quarter of $16.7 million, or 19
cents per diluted share, after recording special items for investment write-
downs, a gain from the reversal of a portion of a reserve for a contract
guarantee, temporary relocation and the costs of a charitable contribution
related to the September 11th attacks, and a gain on the early
extinguishment of debt of an investee. This compares to a loss of 39 cents
per diluted share in the third quarter of 2000, resulting from the write-
down of the carrying value of Bridge Information Systems preferred stock.
Revenue fell 20.5% in the quarter to $397.6 million. Operating income,
excluding special items, was $30.4 million, or 7.6% of revenue, compared to
$83.3 million, or 16.6% of revenue, in the third quarter of 2000.
Peter R. Kann, chairman and CEO of Dow Jones & Company, said: "We are
quite proud of our achievements - journalistic, operational and financial -
during a very difficult quarter. We have come through this period with a
great deal of confidence in Dow Jones' ability to thrive in an improving
economy: the quality, integrity and market-leading position of our brands
and products are stronger than ever; our expenses are rationalized; and our
initiatives for the future, led by capacity expansion at The Wall Street
Journal, remain on schedule."
Dow Jones also announced that, should current business conditions
continue, it expects linage at The Wall Street Journal to be down in the
range of 35% to 45% in the fourth quarter, and further expects earnings
before special items in the quarter to be in the range of 25-35 cents per
diluted share.
Results in Dow Jones' print publishing segment were negatively affected
by the domestic and international advertising environment, exacerbated by
the events of September 11. Revenue in the segment was $229.3 million, down
30% from the year-earlier period. Advertising linage at The Wall Street
Journal in the quarter fell 41.2% on a per-issue basis (and fell 46.8% in
the month of September). The print publishing segment had a slight
operating loss, before special items, reflecting a profit at The Wall Street
Journal, offset by losses at its international editions.
Revenues in Dow Jones' electronic publishing segment decreased 4.9% in
the third quarter to $78.2 million, primarily as a result of advertising
declines from last year's strong levels at The Wall Street Journal Online.
Paid subscribers to WSJ.com, the largest paid subscription site on the web,
continued to grow, reaching 609,000 as of September 30. Operating income,
before special items, in the electronic publishing segment was $13.1 million
in the third quarter, up 18% from a year earlier, due primarily to improved
profitability at Newswires and narrower losses at WSJ.com.
Revenues at Dow Jones' Ottaway community newspapers segment were down
less than one percent to $90 million, as advertising linage declined 1.7%.
Operating income in the segment was $24.6 million, or 27.3% of revenues, for
the quarter, up 1.5% from a year earlier.
During the third quarter the Company repurchased 750,000 shares of its
common stock at an aggregate price of $42.4 million, bringing its total
repurchases for the year to 2.3 million shares at a total cost of $129.7
million.
The Company's earnings conference call will be available at
http://dj.com at 10:00 a.m. Eastern time today.
Dow Jones & Company (NYSE: DJ; dj.com) publishes The Wall Street
Journal and its international and online editions, Barron's and SmartMoney
magazines and other periodicals, Dow Jones Newswires, Dow Jones Indexes, and
the Ottaway group of community newspapers. Dow Jones is co-owner with
Reuters Group of Factiva and with NBC of the CNBC television operations in
Asia and Europe. Dow Jones also provides news content to CNBC and radio
stations in the U.S.
Information Relating To Forward-Looking Statements:
This press release contains forward-looking statements that involve risks
and uncertainties that could cause actual results to differ materially from
those anticipated, including, world political conditions and business,
economic and stock market conditions that impact the volume of advertising,
in particular IPO, dot-com, technology and financial advertising, in the
company's products and services; and such other risk factors as may have
been or may be included from time to time in the company's reports filed
with the Securities and Exchange Commission.
Page 4
Dow Jones & Company
Earnings Summary
Quarters Ended Nine Months Ended
(in thousands, except September 30 September 30
per share amounts) 2001 2000 2001 2000
---- ---- ---- ----
Reported results:
Revenues $397,560 $500,290 $1,341,554 $1,644,199
Operating income 28,667 83,267 100,082 376,681
Net income (loss) 16,668 (33,896) 66,091 155,337
Effective tax rate (a) 40.6% - 36.6% 49.4%
Diluted EPS $.19 $(.39) $.76 $1.74
Excluding special items:
(1) to (10)
Operating income $ 30,387 $ 83,267 $ 133,854 $ 376,681
Net income 17,369 48,399 77,571 221,280
Effective tax rate (a) 40.0% 39.5% 40.0% 39.5%
Diluted EPS $.20 $.55 (b) $.90 $2.48
EPS percentage change (63.6)% 10.0% (63.7)% 56.0%
<FN>
(a) The effective tax rate is net of minority interests.
(b) Diluted shares on a profit basis were 88,354,000.
See notes to financial information on page 9.
Page 5
Dow Jones & Company
Condensed Consolidated Statements of Income (Loss)
Quarters Ended Nine Months Ended
(in thousands, except September 30 September 30
per share amounts) 2001 2000 2001 2000
---- ---- ---- ----
Revenues:
Advertising $220,450 $319,307 $ 797,542 $1,096,920
Information services 72,270 71,257 218,048 207,335
Circulation and other 104,840 109,726 325,964 339,944
-------- -------- ---------- ----------
Total revenues 397,560 500,290 1,341,554 1,644,199
Expenses:
News, operations and development 127,337 137,306 399,085 404,340
Selling, administrative and general 136,020 159,817 463,035 501,872
Newsprint 32,234 44,828 119,442 133,593
Print delivery costs 45,600 47,135 144,942 145,185
Depreciation and amortization 25,982 27,937 81,196 82,528
Restructuring and other
special charges 1,720 33,772
-------- -------- ---------- ----------
Operating expenses 368,893 417,023 1,241,472 1,267,518
Operating income 28,667 83,267 100,082 376,681
Other income (deductions):
Investment income 233 844 1,286 6,146
Interest expense (60) (199) (904)
Equity in losses of
associated companies (1,983) (4,653) (12,040) (14,168)
Gain on disposition of businesses
and investments 20,192
Write-down of investments (8,827) (82,295) (8,827) (82,295)
Contract guarantee, net 8,435 18,720
Other, net (1,088) (544) (255) (940)
-------- -------- ---------- ----------
Income (loss) before income taxes
and minority interests 25,377 (3,381) 98,767 304,712
Income taxes 11,376 31,601 38,091 151,470
-------- -------- ---------- ----------
Income (loss) before minority
interests 14,001 (34,982) 60,676 153,242
Minority interests 2,667 1,086 5,415 2,095
-------- -------- ---------- ----------
Net income (loss) $ 16,668 $(33,896) $ 66,091 $ 155,337
Net income (loss) per share:
- Basic $.20 $(.39) $.77 $1.76
- Diluted .19 (.39) .76 1.74
Weighted-average shares outstanding:
- Basic 85,213 87,476 86,044 88,099
- Diluted 85,777 87,476 86,646 89,063
<FN>
See notes to financial information on page 9.
Page 6
Dow Jones & Company
Segment Information
Quarters Ended Nine Months Ended
September 30 September 30
(in thousands) 2001 2000 2001 2000
---- ---- ---- ----
Revenues:
Print publishing $229,280 $327,624 $ 840,699 $1,139,502
Electronic publishing 78,235 82,245 239,895 241,134
Community newspapers 90,045 90,421 260,960 263,563
-------- -------- ---------- ----------
Consolidated revenues $397,560 $500,290 $1,341,554 $1,644,199
Operating income (loss):
Print publishing $ (981) $ 54,785 $ 45,822 $ 306,083
Electronic publishing 12,978 11,055 22,960 33,233
Community newspapers 24,572 24,202 64,109 68,676
Corporate (7,902) (6,775) (32,809) (31,311)
-------- -------- ---------- ----------
Consolidated operating income $ 28,667 $ 83,267 $ 100,082 $ 376,681
EBITDA:
Print publishing $ 15,719 $ 72,743 $ 114,556 $ 358,452
Electronic publishing 18,600 16,622 51,846 50,161
Community newspapers 28,664 28,512 76,829 81,598
Corporate (6,614) (6,673) (28,181) (31,002)
-------- -------- ---------- ----------
Consolidated EBITDA $ 56,369 $111,204 $ 215,050 $ 459,209
EBITDA Margin:
Print publishing 6.9% 22.2% 13.6% 31.5%
Electronic publishing 23.8 20.2 21.6 20.8
Community newspapers 31.8 31.5 29.4 31.0
All segments 14.2 22.2 16.0 27.9
<FN>
See notes to financial information on page 9.
Page 7
Dow Jones & Company
Supplemental Segment Revenue Information
Quarters Ended Nine Months Ended
September 30 September 30
(in thousands) 2001 2000 2001 2000
---- ---- ---- ----
Print Publishing:
U.S. Publications:
Advertising $136,604 $222,685 $ 539,171 $ 809,373
Circulation and other 67,209 70,569 210,966 224,156
International Publications:
Advertising 16,197 23,300 58,814 72,232
Circulation and other 9,270 11,070 31,748 33,741
-------- -------- ---------- ----------
Total 229,280 327,624 840,699 1,139,502
Electronic Publishing:
Dow Jones Newswires:
Domestic 48,397 48,745 146,394 142,198
International 10,379 10,174 31,395 29,642
-------- -------- ---------- ----------
Total Newswires 58,776 58,919 177,789 171,840
WSJ.com 8,795 12,696 27,236 36,349
Dow Jones Indexes 4,130 3,571 11,763 10,311
Other (a) 6,534 7,059 23,107 22,634
-------- -------- ---------- ----------
Total 78,235 82,245 239,895 241,134
Community Newspapers:
Advertising 63,453 64,541 184,725 188,907
Circulation and other 26,592 25,880 76,235 74,656
-------- -------- ---------- ----------
Total 90,045 90,421 260,960 263,563
Total segment revenues $397,560 $500,290 $1,341,554 $1,644,199
<FN>
(a) Includes Reference Services, Radio/Audio and Licensing/Business Development.
See notes to financial information on page 9.
Page 8
Dow Jones & Company
Statistical Information
Quarters Ended Nine Months Ended
September 30 September 30
2001 2000 2001 2000
Advertising Volume
Year-Over-Year Percentage Change:
The Wall Street Journal
General (43.6)% 10.4% (39.7)% 32.5%
Financial (48.7) (13.0) (39.2) 14.5
Classified (19.1) 15.8 (16.4) 15.2
Total (41.2) 4.5 (36.6) 25.2
The Asian Wall Street Journal (43.9) 26.7 (21.5) 31.5
The Wall Street Journal Europe (32.5) 6.6 (24.0) 23.9
Barron's (30.2) 0.3 (30.1) 21.1
Ottaway Newspapers
Daily (3.5) 2.9 (3.4) 5.3
Non-daily 9.1 (1.8) 5.1 0.9
Total (1.7) 2.2 (2.2) 4.6
Wall Street Journal advertising as a
percentage of total Journal linage:
General 59.3% 61.8% 59.3% 62.4%
Financial 20.7 23.7 23.7 24.7
Classified 20.0 14.5 17.0 12.9
Other statistics: September 30
2001 2000
---- ----
Dow Jones Newswires terminals 326,000 337,000
WSJ.com subscribers 609,000 506,000
WSJ.com unique visitors per business day * 112,000 90,000
WSJ.com average monthly page views per user 127 149
<FN>
* The average number of different individuals who accessed at least one page of
WSJ.com subscriber-only content over the course of a 24-hour day.
Page 9
Dow Jones & Company
Notes to Financial Information
1. The third quarter 2001 included charges to operating income of $1.7
million ($1 million after taxes, or $.01 per diluted share) related to the
September 11 World Trade Center Disaster. The charge included temporary
relocation related costs and a charitable donation of $1 million to the
September 11 Fund, which were partly offset by savings from World Financial
Center (WFC) rent abatement.
2. The third quarter 2001 included a $1.2 million ($.7 million after taxes,
or $.01 per diluted share) gain relating to the early extinguishment of
debt for CNBC Europe. This gain was recorded in Equity in Losses of
Associated Companies.
3. The third quarter 2001 included a write-down of $8.8 million, or $.11
per diluted share, from the impairment in the value of the company's
investments in Nation Multimedia Group Public Co., a multimedia company in
Thailand, and iBEAM Broadcasting Corp., a provider of streaming video
services.
4. The third quarter 2001 included a net gain of $8.4 million, or $.10 per
diluted share, related to a reserve for a contract guarantee. For the nine
months ended September 2001, the company recorded net gains of $18.7
million, or $.21 per diluted share, relating to this matter. In 2000, the
company established a reserve for payments that the company may have to
make on behalf of Bridge Information Systems in connection with Dow Jones'
guarantee of certain minimum payments for data acquired by Dow Jones'
former Telerate subsidiary from Cantor Fitzgerald Securities and Market
Data Corporation. Dow Jones sold Telerate to Bridge in 1998. Bridge is
currently in bankruptcy but made payments for the post-petition periods
through the third quarter of 2001, which were partly offset by the
amortization of the discount on the contract guarantee. In October 2001,
the bankruptcy court granted Bridge's motion to reject Telerate's contracts
with Cantor and MDC. As a result of that rejection, Bridge and Telerate
will likely no longer be making payments to Cantor and MDC under the
agreements. The next quarterly payment is due on November 15.
Cantor and MDC have advised the company that they will file claims seeking
these payments from Dow Jones under the contract guarantee. The company
has various substantial defenses to these claims. Moreover, Cantor was
severely affected by the attack on the World Trade Center and it is not yet
clear how that might impact issues relating to Telerate's agreements with
Cantor and MDC or the contract guarantee.
5. The second quarter of 2001 included restructuring charges of $17.2
million ($10.4 million after taxes, or $.12 per diluted share) for employee
severance related to a workforce reduction and for a technology asset
write-down related to WSJ.com. The first quarter of 2001 included
restructuring charges of $14.9 million ($9.1 million after taxes, or $.10
per diluted share) for employee severance related to a workforce reduction
and for asset write-downs associated with online businesses.
Page 10
Dow Jones & Company
Notes to Financial Information
6. The first quarter of 2001 included a $2.4 million ($1.6 million after
taxes, or $.02 per diluted share) charge to Equity in Losses of Associated
Companies for costs related to the shut-down of Work.com, a joint venture
with Excite@Home.
7. The third quarter of 2000 included a write-down of $82.3 million, or
$.94 per share, from the impairment in the value of the company's
investment in Bridge Information Systems, Inc.
8. The second quarter of 2000 included a net gain of $4.8 million, or $.05
per diluted share, from the sale of its minority interest in SportsTicker
Enterprises L.P.
9. The second quarter of 2000 included a reversal of a 1998 restructuring
charge of $3.2 million ($2.1 million after taxes, or $.02 per diluted
share) relating to a favorable disposition of a satellite contract for CNBC
Europe. The benefit was recorded in Equity in Losses of Associated
Companies.
10. The first quarter of 2000 included a net gain of $9.5 million, or $.10
per diluted share, from the sale of the company's subsidiary, Dow Jones
Financial Publishing Corp.
11. 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
19 daily newspapers and 17 weekly newspapers in 12 states in the U.S., are
reported in the community newspaper segment. Print publishing includes 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). Electronic publishing includes
the operations of Dow Jones Newswires, WSJ.com, Dow Jones Indexes and
other.
Page 11
Dow Jones & Company
Notes to Financial Information
12. Restructuring and other special charges included in operating income
were as follows:
(in thousands) Quarters Ended Nine Months Ended
September 30, 2001 September 30, 2001
------------------ ------------------
Print publishing $ 618 $17,497
Electronic publishing 102 12,186
Community newspapers 321
Corporate 1,000 3,768
------- -------
$ 1,720 $33,772
Excluding restructuring and other special charges, segment operating
income was as follows:
(in thousands) Quarters Ended Nine Months Ended
September 30 September 30
2001 2000 2001 2000
---- ---- ---- ----
Print publishing $ (363) $54,785 $ 63,319 $306,083
Electronic publishing 13,080 11,055 35,146 33,233
Community newspapers 24,572 24,202 64,430 68,676
Corporate (6,902) (6,775) (29,041) (31,311)
------- ------- -------- --------
Consolidated operating income $30,387 $83,267 $133,854 $376,681
13. EBITDA is computed as operating income excluding depreciation,
amortization and restructuring and other special charges.
14. The following table is a summary of 100% of Factiva's results:
(in thousands) Quarters Ended Nine Months Ended
September 30 September 30
2001 2000 2001 2000
---- ---- ---- ----
Revenues $63,763 $61,093 $193,418 $179,089
Operating income 2,139 5,231 8,330 4,312
EBITDA 5,548 7,291 18,063 10,472
15. The following table is a summary of 100% of SmartMoney's results:
(in thousands) Quarters Ended Nine Months Ended
September 30 September 30
2001 2000 2001 2000
---- ---- ---- ----
Revenues $11,606 $16,038 $37,917 $ 46,561
Operating loss (4,860) (5,140) (16,549) (20,166)
EBITDA (4,089) (4,840) (14,773) (19,368)