FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
for the fiscal year ended
December 31, 2002
Commission File No. 1-7564
DOW JONES 401(k) SAVINGS PLAN
(Full title of the plan)
DOW JONES & COMPANY, INC.
200 Liberty Street, New York, NY 10281
(Name of issuer of the securities held pursuant to the
plan and the address of its principal executive office)
Dow Jones 401(k) Savings Plan
Financial Statements
As of December 31, 2002 and 2001 and for the
Year Ended December 31, 2002
Dow Jones 401(k) Savings Plan
Index to Financial Statements
As of December 31, 2002 and 2001 and for the Year Ended December 31, 2002
Page
Report of Independent Accountants 1
Financial Statements:
Statements of Net Assets Available for Plan Benefits as of
December 31, 2002 and 2001 2
Statement of Changes in Net Assets Available for
Plan Benefits for the Year Ended December 31, 2002 3
Notes to Financial Statements 4
Exhibits:
Consent of Independent Accountants
Statement Pursuant to Section 1350(a) of title 18, United States Code
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Plan Committee of the Board of Directors of Dow Jones & Company, Inc.,
administrator of the Plan, has duly caused this annual report to be signed
by the undersigned thereunto duly authorized.
DOW JONES 401(k) SAVINGS PLAN
Date:June 25, 2003 by /s/Thomas W. McGuirl
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Treasurer
Dow Jones & Company, Inc.
Report of Independent Accountants
To the Participants and Administrator of
Dow Jones 401(k) Savings Plan:
In our opinion, the accompanying statements of net assets available for plan
benefits and the related statement of changes in net assets available for
plan benefits present fairly, in all material respects, the net assets
available for plan benefits of Dow Jones 401(k) Savings Plan (the "Plan") as
of December 31, 2002 and 2001, and the changes in net assets available for
plan benefits for the year ended December 31, 2002 in conformity with
accounting principles generally accepted in the United States of America.
These financial statements are the responsibility of the Plan's management;
our responsibility is to express an opinion on these financial statements
based on our audits. We conducted our audits of these statements in
accordance with auditing standards generally accepted in the United States
of America, which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
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May 30, 2003
New York, New York
Dow Jones 401(k) Savings Plan
Statements of Net Assets Available for Plan Benefits
As of December 31, 2002 and 2001
2002 2001
Assets
Investment in the Master Trust $752,628,131 $866,474,147
Participant loans 12,576,654 13,820,880
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Total investments 765,204,785 880,295,027
Receivables
Employer's contribution 295,752 264,224
Participants' contributions 358,582 264,022
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Total receivables 654,334 528,246
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Net assets available for benefits $765,859,119 $880,823,273
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The accompanying notes are an integral part of these financial statements.
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Dow Jones 401(k) Savings Plan
Statements of Changes in Net Assets Available for Plan Benefits
For the Year Ended December 31, 2002
Investment results
Investment loss from the Master Trust $(84,105,158)
Interest income from participant loans 1,048,350
------------
Total investment loss, net (83,056,808)
Additions to net assets attributed to
Contributions to the Plan
By the employer 17,711,695
By participants 18,680,947
------------
Total contributions 36,392,642
Transfers in 912,542
------------
Total additions 37,305,184
------------
Deductions from net assets attributed to
Benefits paid to participants (67,839,989)
Loan cancellations (1,332,469)
Administrative expenses (40,072)
------------
Total deductions (69,212,530)
------------
Net decrease (114,964,154)
Net assets available for plan benefits
Beginning of the year 880,823,273
------------
End of the year $765,859,119
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The accompanying notes are an integral part of these financial statements.
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Dow Jones 401(k) Savings Plan
Notes to Financial Statements
1. Description of Plan
The following description provides only general information of the Dow Jones
401(k) Savings Plan (the "Plan"). Participants should refer to the Plan
agreement for a more complete description of the Plan's provisions.
General
The Plan is a defined contribution plan, and covers eligible employees of
Dow Jones & Company Inc. and certain of its subsidiaries and affiliates
("Dow Jones" or the "Company"). The Plan is subject to the provisions of
the Employee Retirement Income Security Act of 1974 ("ERISA"). Eligible
employees are enrolled in the Plan on January 1st or July 1st after
completing six months of service.
Contributions
The Plan provides eligible employees with (1) a fixed company contribution
equal to 3% of covered compensation up to $200,000 (the compensation limit
set by the IRS), (2) the opportunity to make employee pre-tax savings
contributions of up to 10% and effective July 1, 2002 40% of covered
compensation (subject to IRS limitations), and (3) a 100% company match on
those employee contributions up to the first 2% of covered compensation
(subject to IRS limitations).
Investment Options
Contributions are all participant directed. The Plan provides for several
investment options. During 2002, the Plan offered 26 mutual funds, the Dow
Stock Fund and the Dow Jones Investment Contract Fund.
Vesting
Participants are fully vested in the amount credited to their accounts at
all times.
Loan Fund
Plan participants who are active employees can borrow from their individual
Plan accounts excluding their voluntary after-tax contributions amount. The
minimum amount a participant can borrow is $1,000 and the maximum is the
lesser of $50,000 (reduced by the highest outstanding loan balance during
the previous twelve months) or 50% of the total value of the participant's
Plan accounts, including voluntary after-tax contributions account, but
reduced by any prior outstanding loan balances on the date of the loan.
The participant's note held by the Loan Fund is pledged as collateral for
the loan. Loan terms range from 1-5 years or up to 10 years for the
purchase of a principal residence. Loans bear interest at rates comparable
to lending institution rates. The interest rate on loans granted during
2002 ranged from 5.5% to 6.0%. The interest rate on loans granted during
2001 ranged from 6.0% to 10.0%. Interest rates on participant loans are
determined by the Program Committee of the Dow Jones Retirement Program
based on the prevailing prime rate.
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Dow Jones 401(k) Savings Plan
Notes to Financial Statements
Payment of Benefits
The benefit to which a participant is entitled is the benefit that can be
provided from the participant's vested account. On termination of
employment due to death, retirement or other reasons, a participant or his
or her beneficiary is entitled to receive the value of the funds allocated
to the participant's account, in one of the following forms of payment:
single distribution, partial payment distributions, quarterly or annual
installments, or annuity contract with an insurance company.
A participant may also elect the date on which any distribution shall
commence, provided such date shall be no later than December 31 of the year
of this attainment of age 70-1/2 if he elects quarterly or annual
installments. A participant electing quarterly or annual installments also
may elect periodic partial single payment distributions. Inactive
participants do not participate in subsequent allocations of employer
contributions.
Loan Cancellations
Loan cancellations are recorded as taxable participant distributions at the
time of cancellation.
Administrative Expenses
Trustee fees of the Plan are paid by the Plan. All other administrative
fees are paid by the Company.
Master Trust
The assets of the Plan are maintained, for investment purposes only, on a
commingled basis with the assets of the Dow Jones Money Purchase Retirement
Plan in the Dow Jones Profit Sharing Retirement Plan Trust (the "Master
Trust"). The plans do not own specific Master Trust assets but rather
maintain beneficial interests in such assets. A portion of trust investment
assets and trust investment activity are allocable to each plan based upon
each Plan's net assets in relation to the total Master Trust net assets.
Allocations are performed on a daily basis. Participant loans and related
interest income represent specific loans of participants under the Plan.
2. Summary of Significant Accounting Policies
Basis of Accounting
The financial statements of the Plan are prepared under the accrual method
of accounting, except for benefit payments, which are recorded when paid.
Investment Valuation and Income Recognition
The investments are held by the Plan's trustee, Fidelity Management Trust
Company ("Fidelity"). The following policy applies to these investments and
any related income subsequently earned.
The investment funds are valued at the net asset value as reported by the
fund managers. Fair values of the underlying investments are based upon the
latest published market quotations, where available. The common shares of
the Company are valued at their fair value on December 31, 2002 and 2001, as
determined by their quoted market prices. Fair values of investments not
having an established market are determined by the fund managers by
reference to quoted market values and other financial data pertaining to
investments of a similar nature, quality, and yield as determined by the
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Dow Jones 401(k) Savings Plan
Notes to Financial Statements
fund managers. Investments in benefit - responsive contracts with financial
institutions are valued at contract value.
Purchases and sales of securities are recorded on a trade-date basis.
Interest income is recorded on the accrual basis. Dividends are recorded on
the ex-dividend date.
The Plan presents within investment income/loss in the statement of changes
in net assets available for plan benefits the net appreciation
(depreciation) in the fair value of its investments, and interest and
dividends. Net appreciation (depreciation) in the fair value of investments
consists of the realized gains or losses and the unrealized appreciation
(depreciation) on those investments. Interest and dividends, consists of
interest earned on the investment contract fund and dividends earned on the
various investments.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions, the most significant of which relate to the valuations of
investments. Actual results could differ from those estimates.
3. Related Party Transactions
Certain Plan investments are shares of mutual funds managed by Fidelity
Management & Research Co., an affiliate of Fidelity. Fidelity is the
trustee as defined by the Plan and, therefore, investments in these mutual
funds qualify as party-in-interest transactions. Trustee fees paid by the
Plan amounted to $40,072 for the year ended December 31, 2002.
4. Concentrations of Credit Risk
Financial instruments which potentially subject the Plan to concentrations
of credit risk consist principally of investment contracts with financial
institutions. These investment contracts typically are uncollateralized
contractual obligations under which the issuer agrees to pay a specific rate
of interest for a fixed period of time and to repay principal at maturity.
The investment contract fund places its contracts with high-credit quality
institutions, limiting the amount of credit exposure to any one financial
institution.
5. Risk and Uncertainties
The Plan provides for various investment options in investment securities.
Investment securities, in general, are exposed to various risks, such as
interest rate, credit and overall market volatility. Due to the level of
risk associated with certain investment securities, it is reasonably
possible that changes in the value of investment securities will occur in
the near term and that such changes could materially affect the amounts
reported in the statement of net assets available for benefits.
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Dow Jones 401(k) Savings Plan
Notes to Financial Statements
6. Contracts with Insurance Company and Banks
The Master Trust contains a fund invested in Guaranteed Investment Contracts
(GICS) with various banks and an insurance company, which are managed by
Fidelity Management Trust Company. The contracts are included in the
financial statements at contract value, which represents contributions made
under the contracts, plus earnings, less withdrawals and administrative
expenses because they are all fully benefit-responsive. Participants may
ordinarily direct the withdrawal or transfer of all or a portion of their
investment at contract value.
There are no reserves against the contract value for credit risk of the
contract issuers or otherwise. The fair value of the Master Trust's
investment in contracts at December 31, 2002 was $318,014,358. The average
yield was approximately 5.94 percent and 6.32 percent for 2002 and 2001,
respectively. The crediting interest rate was approximately 5.63 percent
and 5.96 percent as of December 31, 2002 and 2001, respectively. The
crediting interest rate is based on a formula agreed upon with the issuer.
Such rates are reviewed on a quarterly basis for resetting.
7. Plan Termination
Although the Plan sponsor has not expressed any intent to terminate the
Plan, it has the right to do so at any time, subject to the provisions of
ERISA.
8. Federal Income Taxes
The Internal Revenue Service (IRS) has issued a determination letter dated
July 16, 2002, indicating that the Plan qualifies under Section 401(a) of
the Internal Revenue Code (IRC) and, therefore, the Plan is not subject to
tax under Section 501(a) of the IRC. The Plan is required to operate in
conformity with the IRC to maintain its qualification. The Plan's sponsor
is not aware of any course of action or series of events that have occurred
that might adversely affect the Plan's qualified status. Accordingly, no
provision for federal income taxes has been made.
9. Other Matters
Transfers in of $912,542 in 2002 represent rollovers of qualified
participant balances from qualified plans.
10. Interest in Master Trust
The Plan has approximately a 95.1% and a 97.6% interest in the Master Trust
at December 31, 2002 and December 31, 2001, respectively.
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Dow Jones 401(k) Savings Plan
Notes to Financial Statements
The net assets of the Master Trust are as follows:
2002 2001
Investments at fair value
Cash $ 2,188,863 $ 3,231,448
Mutual Funds 407,204,088 520,750,645
Company Common Stock 2,507,015 2,844,743
Money Market Funds 81,482,077 73,521,389
Participant loans 12,582,541 13,822,317
Investment at contract value
Investment contracts 299,012,369 287,974,703
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$804,976,953 $902,145,245
Changes in net assets of the Master Trust for the year ended December 31,
2002 are as follows:
Investment results
Investment income
Interest and dividends $ 24,637,303
Interest income from participant loans 1,048,493
Net depreciation in mutual funds (113,735,593)
Net depreciation in company common stock (552,902)
------------
Total investment loss, net $(88,602,699)
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-8-
EXHIBITS
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Exhibit
23 Consent of PricewaterhouseCoopers LLP, independent accountants
99 Statement Pursuant to Section 1350(a) of title 18, United States Code