UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended: September 30, 2002
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OF 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 0-7832
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JOURNAL EMPLOYEES' STOCK TRUST
(Exact name of registrant as specified in its charter)
WISCONSIN 39-6153189
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
333 W. State Street
Milwaukee, Wisconsin 53203
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 414-224-2728
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
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As of September 30, 2002 there were 25,920,000 of the Registrant's Units of
Beneficial Interest outstanding (2,810,971 of which were held by Journal
Communications, Inc.).
JOURNAL EMPLOYEES' STOCK TRUST
INDEX
PAGE NO.
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Part I. Financial Information
Item 1. Financial Statements
Statements of Financial Position
As of September 30, 2002 (Unaudited) and December 31, 2001 3
Unaudited Statements of Trust Activity
Three and Nine Months ended September 30, 2002 and 2001 4
Unaudited Statements of Cash Flows
Nine Months ended September 30, 2002 and 2001 5
Notes to Financial Statements
September 30, 2002 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 7
Item 3. Quantitative and Qualitative Disclosure
About Market Risk 7
Item 4. Controls and Procedures 7
Part II. Other Information
Items 1-6. 7
2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
JOURNAL EMPLOYEES' STOCK TRUST
Statements of Financial Position
September 30, 2002 December 31, 2001
------------------ -----------------
(Unaudited)
Assets $ -- $ --
========= =========
Liabilities $ -- $ --
========= =========
See notes to financial statements.
3
JOURNAL EMPLOYEES' STOCK TRUST
Unaudited Statements of Trust Activity
(in thousands, except per share amounts)
Three Months Ended September 30 Nine Months Ended September 30
------------------------------- ------------------------------
2002 2001 2002 2001
---- ---- ---- ----
Dividends on common stock of
Journal Communications, Inc.
held by the Stock Trust $ 6,977 $ 8,956 $ 21,231 $26,359
======== ======== ========== =======
Dividends to holders of units
of beneficial interest $ 6,977 $ 8,956 $ 21,231 $26,359
======== ======== ========== =======
Dividends per share $ 0.30 $ 0.35 $ 0.90 $ 1.05
======== ======== ========== =======
See notes to financial statements.
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JOURNAL EMPLOYEES' STOCK TRUST
Unaudited Statements of Cash Flows
(in thousands)
Nine Months Ended September 30
----------------------------------
2002 2001
--------- ---------
Sources of cash:
Receipts from purchasers of units
of beneficial interest $ 160,937 $ 164,323
Dividends received from
Journal Communications, Inc. 21,231 26,359
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182,168 190,682
Uses of cash:
Disbursements to sellers of
units of beneficial interest (160,937) (164,323)
Dividends paid to holders of
units of beneficial interest (21,231) (26,359)
--------- ---------
(182,168) (190,682)
Net change in cash -- --
Cash at beginning of year -- --
--------- ---------
Cash at September 30 $ -- $ --
========= =========
See notes to financial statements.
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JOURNAL EMPLOYEES' STOCK TRUST
Notes to Financial Statements
September 30, 2002
(Unaudited)
1. Organization
The primary business of the Journal Employees' Stock Trust (the Stock
Trust) is being the holder of record of certain shares of common stock
of Journal Communications, Inc. (the Company), the issuance of, record
keeping and transactions in units of beneficial interest (units) that
represent shares of common stock of the Company owned by the Stock
Trust, voting (including issuance and tabulation of unitholder proxies)
of the common stock of the Company owned by the Stock Trust, and such
other matters as are specified in the Journal Employees Stock Trust
Agreement, dated May 15, 1937, as amended (the Trust Agreement). The
Stock Trust is administered by five trustees who are currently officers
and directors of the Company and receive no remuneration for services
performed for the Stock Trust. The trustees are required to distribute
all Stock Trust income (consisting solely of dividends paid by the
Company), less such amounts as the trustees deem necessary for payment
of administrative expenses, as soon as practicable after receipt. Since
its origination, substantially all expenses of the Stock Trust have
been paid by the Company, and cash dividends payable to the Stock Trust
have been paid by the Company directly to the employees and former
employees who own units (unitholders). The Stock Trust distributes all
of its income and, therefore, pays no income taxes under applicable
income tax codes.
2. Common Stock of the Company
The Stock Trust is the holder of record of ninety percent of the
Company's common stock. The Stock Trust has issued one unit for each
share of common stock which the Stock Trust holds.
3. Unitholders' Purchases and Sales of Units of Beneficial Interest
Unitholders may offer to sell their units only in accordance with the
terms and conditions of the Trust Agreement, which provides four
classes of optionees the right to elect to purchase units offered for
sale. The Company, as one of the optionees under the Trust Agreement,
is not obligated to purchase units, though in recent years for the
convenience of unitholders, it has elected to do so. There is no
assurance the Company will elect to buy units offered for sale in the
future. Since 1996, the Company has elected to offer units owned by the
Company for sale to eligible Company employees through a rotation
system. On October 25, 2002, the Board of Directors of the Company
determined to indefinitely suspend purchase and sale of units.
4. Common Stock Held and Trust Certificates Outstanding
At September 30, 2002 and 2001, the Stock Trust held 25,920,000 shares
of the Company's common stock and has issued a like number of units of
beneficial interest.
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JOURNAL EMPLOYEES' STOCK TRUST
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Income is based solely on dividends from Journal Communications, Inc.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
None.
ITEM 4. CONTROLS AND PROCEDURES
The Stock Trust carried out an evaluation, within 90 days prior to the filing
date of this report, under the supervision and with the participation of certain
of the Trustees of the Stock Trust, of the effectiveness of the design and
operation of the Stock Trust's disclosure controls and procedures, as defined in
Exchange Act Rules 13a-14(c) and 15d-14(c). Based on that evaluation, they
concluded that our disclosure controls and procedures are effective to ensure
that information required to be disclosed in the Stock Trust's Exchange Act
reports is recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commission's rules and forms, and that
such information is accumulated and communicated to them to allow timely
decisions regarding required disclosure.
There have been no significant changes in the Stock Trust's internal controls or
in other factors that could significantly affect these controls subsequent to
the date of their evaluation.
PART II. OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
None.
ITEM 2 - CHANGES IN SECURITIES AND USE OF PROCEEDS
None.
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
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JOURNAL EMPLOYEES' STOCK TRUST
ITEM 5 - OTHER INFORMATION
The primary business of the Stock Trust is being the holder of record of certain
shares of common stock of the Company, the issuance of, record keeping and
transactions in units that represent shares of common stock of the Company owned
by the Stock Trust, voting (including issuance and tabulation of unitholder
proxies) of the common stock of the Company owned by the Stock Trust, and such
other matters as are specified in the Trust Agreement. The Company files annual,
quarterly and special reports, proxy statements and other information with the
SEC, some of which contain information about the Company and its operations. SEC
filings of the Company are available to the public over the Internet at the
SEC's web site at http://www.sec.gov. You may read and copy any filed document
at the SEC's public reference rooms in Washington, D.C. at 450 Fifth Street,
N.W., Judiciary Plaza, Washington, D.C. 20549, and at the SEC's regional offices
in New York, New York and Chicago, Illinois.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits
99.1 Written Statement of the Trustee (Steven J. Smith) with
respect to compliance with Section 13(a) of the Securities and Exchange Act
of 1934.
99.2 Written Statement of the Trustee (Paul M. Bonaiuto) with
respect to compliance with Section 13(a) of the Securities and Exchange Act
of 1934.
b) Reports on Form 8-K
The Stock Trust did not file any report on Form 8-K during the period
covered by this quarterly report.
SIGNATURES
Pursuant to the requirements 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.
Date: November 14, 2002 By: /s/ Steven J. Smith
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Steven J. Smith
Trustee
Date: November 14, 2002 By: /s/ Paul M. Bonaiuto
-----------------------
Paul M. Bonaiuto
Trustee
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JOURNAL EMPLOYEES' STOCK TRUST
CERTIFICATIONS
I, Steven J. Smith, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of Journal Employees
Stock Trust;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report
is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the
registrant's trustees:
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Date November 14, 2002 /s/ Steven J. Smith
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Steven J. Smith
Trustee
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JOURNAL EMPLOYEES' STOCK TRUST
I, Paul M. Bonaiuto, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of Journal Employees
Stock Trust;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report
is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the
registrant's trustees:
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Date November 14, 2002 /s/ Paul M. Bonaiuto
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Paul M. Bonaiuto
Trustee
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