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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, 2003



OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------



For the transition period from
 to



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 incorporation or organization) |  | (I.R.S. Employer Identification No.)



|200 LIBERTY STREET, NEW YORK, NEW YORK   |  | 10281     
|---------------------------------------- |  | ----------
|(Address of principal executive offices) |  | (Zip Code)



(212) 416-2000

(Registrants telephone number, including area code)



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 check mark whether the registrant is an
accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes x No ̈



The number of shares outstanding of each of the issuers classes of common stock on September 30, 2003: 60,828,764 shares of Common Stock and 20,739,406 shares of Class B Common Stock.



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##### Table of Contents

DOW JONES & COMPANY, INC.



INDEX



|                              |  |                                                                                       |  | PAGE
|----------------------------- |  | ------------------------------------------------------------------------------------- |  | ----
|PART I. Financial Information |  |                                                                                      
|                              |  |                                                                                      
|Item 1.                       |  | Financial Statements (unaudited)                                                      |  |     
|                              |  |                                                                                      
|                              |  | Condensed Consolidated Statements of Income -                                         |  |     
|                              |  | For the three months and nine months ended September 30, 2003 and 2002                |  | 3   
|                              |  |                                                                                      
|                              |  | Condensed Consolidated Statements of Cash Flows -                                     |  |     
|                              |  | For the nine months ended September 30, 2003 and 2002                                 |  | 4   
|                              |  |                                                                                      
|                              |  | Condensed Consolidated Balance Sheets -                                               |  | 5   
|                              |  | September 30, 2003 and December 31, 2002                                              |  |     
|                              |  |                                                                                      
|                              |  | Notes to Condensed Financial Statements                                               |  | 6   
|                              |  |                                                                                      
|Item 2.                       |  | Managements Discussion and Analysis of Financial Condition and Results of Operations |  | 12  
|                              |  |                                                                                      
|Item 3.                       |  | Quantitative and Qualitative Disclosures about Market Risk                            |  | 24  
|                              |  |                                                                                      
|Item 4.                       |  | Controls & Procedures                                                                 |  | 24  
|                              | 
|PART II. Other Information    |  |                                                                                      
|                              |  |                                                                                      
|Item 1.                       |  | Legal Proceedings                                                                     |  | 24  
|                              |  |                                                                                      
|Item 6.                       |  | Exhibits and Reports on Form 8-K                                                      |  | 25  



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I. FINANCIAL INFORMATION



|Item 1: |  | Financial Statements
|------- |  | --------------------



CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Dow Jones and Company, Inc.

For the quarters and nine months ended September 30, 2003 and 2002

(unaudited)



|                                                          |  | Quarters EndedSeptember 30 |         |   | Nine Months EndedSeptember 30 |  
|--------------------------------------------------------- |  | -------------------------- | ------- | - | ----------------------------- | -
|(in thousands, except per share amounts)                  |  | 2003                       |         |   | 2002                          |  
|Revenues:                                                 |  |                            |         |   |                               |  
|Advertising                                               |  | $                          | 208,897 |   |                               | $
|Information services                                      |  |                            | 71,278  |   |                               |  
|Circulation and other                                     |  |                            | 95,771  |   |                               |  
|                                                          |  |                            |         |   |                               |  
|                                                          |  |                            |         |  
|Total revenues                                            |  |                            | 375,946 |   |                               |  
|                                                          |  |                            |         |   |                               |  
|                                                          |  |                            |         |  
|Expenses:                                                 |  |                            |         |   |                               |  
|News, operations and development                          |  |                            | 122,487 |   |                               |  
|Selling, administrative and general                       |  |                            | 137,143 |   |                               |  
|Newsprint                                                 |  |                            | 26,438  |   |                               |  
|Print delivery costs                                      |  |                            | 46,904  |   |                               |  
|Depreciation and amortization                             |  |                            | 26,158  |   |                               |  
|Restructuring charges and September 11 related items, net |  |                            |         |   |                               |  
|                                                          |  |                            |         |   |                               |  
|Operating expenses                                        |  |                            | 359,130 |   |                               |  
|                                                          |  |                            |         |  
|Operating income                                          |  |                            | 16,816  |   |                               |  
|                                                          |  |                            |         |  
|Other income (deductions):                                |  |                            |         |   |                               |  
|Investment income                                         |  |                            | 7,258   |   |                               |  
|Interest expense                                          |  |                            | (664    | ) |                               |  
|Equity in (losses) earnings of associated companies       |  |                            | (16     | ) |                               |  
|Gain on resolution of Telerate sale loss contingencies    |  |                            |         |   |                               |  
|Gain on sale of businesses                                |  |                            |         |   |                               |  
|Contract guarantee                                        |  |                            | (2,306  | ) |                               |  
|Other, net                                                |  |                            | 1,258   |   |                               |  
|                                                          |  |                            |         |   |                               |  
|                                                          |  |                            |         |  
|Income before income taxes and minority interests         |  |                            | 22,346  |   |                               |  
|Income taxes                                              |  |                            | (5,779  | ) |                               |  
|                                                          |  |                            |         |   |                               |  
|                                                          |  |                            |         |  
|Income before minority interests                          |  |                            | 28,125  |   |                               |  
|Minority interests in losses of subsidiaries              |  |                            | 452     |   |                               |  
|                                                          |  |                            |         |   |                               |  
|                                                          |  |                            |         |  
|Net income                                                |  | $                          | 28,577  |   |                               | $
|                                                          |  |                            |         |   |                               |  
|                                                          |  |                            |         |  
|Per Share:                                                |  |                            |         |   |                               |  
|Net income per share:                                     |  |                            |         |   |                               |  
|-  Basic                                                  |  | $                          | .35     |   |                               | $
|-  Diluted                                                |  |                            | .35     |   |                               |  
|Cash dividends declared                                   |  |                            |         |   |                               |  
|                                                          |  |                            |         |  
|Weighted-average shares outstanding:                      |  |                            |         |   |                               |  
|-  Basic                                                  |  |                            | 81,507  |   |                               |  
|-  Diluted                                                |  |                            | 81,865  |   |                               |  
|                                                          |  |                            |         |  
|Comprehensive income                                      |  | $                          | 28,903  |   |                               | $
|                                                          |  |                            |         |   |                               |  



The
accompanying notes are an integral part of the financial statements.



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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Dow Jones & Company, Inc.

For the nine months ended September 30, 2003 and 2002

(unaudited)



|                                                                                  |  | Nine Months EndedSeptember 30 |         
|--------------------------------------------------------------------------------- |  | ----------------------------- | --------
|(in thousands)                                                                    |  | 2003                          |         
|Operating Activities:                                                             |  |                               |         
|Net income                                                                        |  | $                             | 126,347 
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                               |         
|Depreciation                                                                      |  |                               | 79,975  
|Amortization of intangibles                                                       |  |                               | 1,276   
|Equity in (earnings) losses of associated companies, net of distributions         |  |                               | 7,897   
|Minority interests in losses of subsidiaries                                      |  |                               | (1,259  
|Gain on resolution of Telerate sale loss contingencies                            |  |                               | (59,821 
|Gain on sale of businesses                                                        |  |                               |         
|Contract guarantee                                                                |  |                               | 7,375   
|Changes in assets and liabilities:                                                |  |                               |         
|Accounts receivable                                                               |  |                               | (1,576  
|Accounts payable and accrued liabilities                                          |  |                               | (9,852  
|Income taxes                                                                      |  |                               | (6,952  
|Deferred taxes                                                                    |  |                               | 5,877   
|Unearned revenue                                                                  |  |                               | (4,315  
|Other assets                                                                      |  |                               | (2,111  
|Other noncurrent liabilities                                                      |  |                               | 3,638   
|Other, net                                                                        |  |                               | (1,860  
|                                                                                  |  |                               |         
|                                                                                  |  |                              
|Net cash provided by operating activities                                         |  |                               | 144,639 
|                                                                                  |  |                              
|Investing Activities:                                                             |  |                               |         
|Additions to property, plant and equipment                                        |  |                               | (37,181 
|Funding of equity-method investments, net                                         |  |                               | (13,834 
|Proceeds from property damage insurance claim                                     |  |                               | 1,271   
|Businesses acquired, net                                                          |  |                               | (149,135
|Disposition of businesses and investments                                         |  |                               |         
|Other, net                                                                        |  |                               | 5,630   
|                                                                                  |  |                               |         
|                                                                                  |  |                              
|Net cash (used in) provided by investing activities                               |  |                               | (193,249
|                                                                                  |  |                              
|Financing Activities:                                                             |  |                               |         
|Cash dividends                                                                    |  |                               | (61,181 
|Increase in long-term debt                                                        |  |                               | 117,317 
|Reduction of long-term debt                                                       |  |                               | (16,690 
|Purchases of treasury stock                                                       |  |                               | (21,135 
|Proceeds from sales under stock compensation plans                                |  |                               | 7,016   
|Contribution from minority partner, net of distribution                           |  |                               | 6,114   
|                                                                                  |  |                               |         
|                                                                                  |  |                              
|Net cash provided by (used in) financing activities                               |  |                               | 31,441  
|                                                                                  |  |                              
|(Decrease) increase in cash and cash equivalents                                  |  |                               | (17,169 
|Cash and cash equivalents at beginning of year                                    |  |                               | 39,346  
|                                                                                  |  |                               |         
|                                                                                  |  |                              
|Cash and cash equivalents at September 30                                         |  | $                             | 22,177  
|                                                                                  |  |                               |         



The
accompanying notes are an integral part of the financial statements.



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CONDENSED CONSOLIDATED BALANCE SHEETS

Dow Jones & Company, Inc.

(unaudited)



|(dollars in thousands)                                              |  | September 302003 |           |   | December 312002 |  
|------------------------------------------------------------------- |  | ---------------- | --------- | - | --------------- | -
|Assets:                                                             |  |                  |           |   |                 |  
|Cash and cash equivalents                                           |  | $                | 22,177    |   |                 | $
|Accounts receivable  trade, net                                    |  |                  | 151,579   |   |                 |  
|Accounts receivable  other                                         |  |                  | 16,543    |   |                 |  
|Newsprint inventory                                                 |  |                  | 14,136    |   |                 |  
|Prepaid expenses                                                    |  |                  | 20,477    |   |                 |  
|Deferred income taxes                                               |  |                  | 14,711    |   |                 |  
|                                                                    |  |                  |           |   |                 |  
|Total current assets                                                |  |                  | 239,623   |   |                 |  
|                                                                    |  |                 
|Investments in associated companies, at equity                      |  |                  | 88,423    |   |                 |  
|                                                                    |  |                 
|Plant, property and equipment, at cost                              |  |                  | 1,705,187 |   |                 |  
|Less, Accumulated depreciation                                      |  |                  | 1,019,303 |   |                 |  
|                                                                    |  |                  |           |   |                 |  
|Plant, property and equipment, net                                  |  |                  | 685,884   |   |                 |  
|                                                                    |  |                 
|Goodwill                                                            |  |                  | 136,389   |   |                 |  
|                                                                    |  |                 
|Other intangibles                                                   |  |                  | 64,234    |   |                 |  
|                                                                    |  |                 
|Deferred income taxes                                               |  |                  | 65,777    |   |                 |  
|                                                                    |  |                 
|Other assets                                                        |  |                  | 20,057    |   |                 |  
|                                                                    |  |                  |           |   |                 |  
|                                                                    |  |                 
|Total assets                                                        |  | $                | 1,300,387 |   |                 | $
|                                                                    |  |                  |           |   |                 |  
|                                                                    |  |                 
|Liabilities:                                                        |  |                  |           |   |                 |  
|Accounts payable and accrued liabilities                            |  | $                | 208,164   |   |                 | $
|Contract guarantee obligation                                       |  |                  | 151,192   |   |                 |  
|Income taxes                                                        |  |                  | 34,007    |   |                 |  
|Unearned revenue                                                    |  |                  | 188,664   |   |                 |  
|                                                                    |  |                  |           |   |                 |  
|Total current liabilities                                           |  |                  | 582,027   |   |                 |  
|                                                                    |  |                 
|Long-term debt                                                      |  |                  | 193,564   |   |                 |  
|Deferred compensation, principallypostretirement benefit obligation |  |                  | 305,669   |   |                 |  
|Contract guarantee obligation                                       |  |                  | 100,386   |   |                 |  
|Other noncurrent liabilities                                        |  |                  | 25,928    |   |                 |  
|                                                                    |  |                  |           |   |                 |  
|                                                                    |  |                 
|Total liabilities                                                   |  |                  | 1,207,574 |   |                 |  
|                                                                    |  |                 
|Minority interests in subsidiaries                                  |  |                  | 5,415     |   |                 |  
|                                                                    |  |                 
|Stockholders equity:                                               |  |                  |           |   |                 |  
|Common stock                                                        |  |                  | 102,181   |   |                 |  
|Additional paid-in capital                                          |  |                  | 120,674   |   |                 |  
|Retained earnings                                                   |  |                  | 797,886   |   |                 |  
|Accumulated other comprehensive income                              |  |                  | (2,334    | ) |                 |  
|                                                                    |  |                  |           |   |                 |  
|                                                                    |  |                  | 1,018,407 |   |                 |  
|Less, treasury stock, at cost                                       |  |                  | 931,009   |   |                 |  
|                                                                    |  |                  |           |   |                 |  
|Total stockholders equity                                          |  |                  | 87,398    |   |                 |  
|                                                                    |  |                  |           |   |                 |  
|                                                                    |  |                 
|Total liabilities and stockholders equity                          |  | $                | 1,300,387 |   |                 | $
|                                                                    |  |                  |           |   |                 |  



The
accompanying notes are an integral part of the financial statements.



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NOTES TO CONDENSED FINANCIAL STATEMENTS

Dow Jones & Company, Inc.

(unaudited)



1. Basis of Presentation



The
accompanying unaudited condensed consolidated financial statements reflect all adjustments considered necessary by management to present fairly the companys consolidated financial position as of September 30, 2003, and the consolidated results
of operations for the three and nine-month periods ended September 30, 2003 and 2002 and consolidated cash flows for the nine-month periods then ended. In managements opinion, all adjustments necessary for a fair presentation in accordance
with generally accepted accounting principles are reflected in the financial statements presented. Reclassifications of certain amounts for prior years have been recorded to conform to the current year presentation.



The condensed consolidated financial statements should be read in conjunction with the
consolidated financial statements and related notes included in the companys annual report on Form 10-K for the year ended December 31, 2002 filed with the Securities and Exchange Commission. The results of operations for the interim periods
are not necessarily indicative of the results to be expected for the full year.



2. Restructuring Charges and September 11 Items, Net:



Gain
on settlement of business interruption insurance claim in 2003

In the second quarter of 2003, the company recorded a gain of $18.4 million ($11.1
million after taxes, or $.14 per diluted share) reflecting the settlement of its business interruption insurance claim for loss of operating income suffered as a result of the terrorist attacks on the World Trade Center on September 11, 2001.



Restructuring Charges in 2002

The second quarter of 2002 included restructuring charges of $11.1 million ($6.3 million after taxes and minority interests, or $.07 per diluted share) largely reflecting
employee severance related to a workforce reduction of approximately 165 full-time employees across the print and electronic publishing and corporate segments.



The following table displays the activity and balances of the restructuring reserve account as of September 30, 2003:



|(in thousands)     |  | December 31,2002Reserve |        | Net CashPayments |   | September 30,2003Reserve
|------------------ |  | ----------------------- | ------ | ---------------- | - | ------------------------
|Employee severance |  | $                       | 17,116 |                  | $ | 13,180                  
|Other exit costs   |  |                         | 264    |                  |   | 58                      



As of September 30, 2003, the
workforce reductions related to the 2002 restructurings were substantially complete. The remaining reserve at September 30, 2003 relates primarily to continuing payments for employees that were terminated.



3. Gain on Resolution of Telerate Sale Loss Contingencies



In the first quarter of 2003, the company recorded a gain of $59.8 million ($.73 per diluted
share) on the resolution of certain loss contingencies resulting from the sale of its former Telerate subsidiary to Bridge Information Systems, Inc. (Bridge). The reserve for loss contingencies was established as part of the loss on sale of Telerate
in 1998 and related to various claims that arose out of the Stock Purchase Agreement, including a purchase price adjustment related to working capital, an indemnification undertaking and other actual and potential claims and counter-claims between
the company and Bridge. In February 2001, Bridge declared bankruptcy. In March 2003, these matters were resolved by the bankruptcy court, and the companys contingent liabilities were thereby extinguished.



4. Contract Guarantee



Under the terms of the companys 1998 sale of Telerate to Bridge, Dow Jones retained its guarantee of payments under certain
circumstances of certain minimum payments for data acquired by Telerate from Cantor Fitzgerald Securities (Cantor) and Market Data Corporation (MDC). The annual minimum payments average approximately $50 million per year through October 2006 under
certain conditions. Bridge agreed to indemnify Dow Jones for any liability Dow Jones incurred under the contract guarantee with respect to periods subsequent to Bridges purchase of Telerate. In 2000, based in part on uncertainty about
Bridges solvency as well as other factors, the company established a reserve of $255 million representing the net present value of the total estimated payments from 2001 through October 2006, using a discount rate of 6%.



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Earnings in 2003 and 2002 included charges related to the accretion of the discount on the reserve balance. These charges
totaled $2.3 million and $2.9 million in the third quarters of 2003 and 2002, respectively. For the first nine months of 2003 and 2002, charges related to the accretion of discount totaled $7.4 million and $9.1 million, respectively.



Bridge filed for bankruptcy in February 2001 but made payments for this data during the
post-petition periods through October 2001, when Telerate ceased operations, went out of business, sold certain assets and rejected its contracts with Cantor and MDC. The company is now in litigation with Cantor and MDC with respect to their claims
for amounts due under the contract guarantee. The company has various substantial defenses to these claims and the litigation is proceeding. The trial court rendered a decision in January 2003 denying the parties respective motions to grant
their own claims and to dismiss the competing claims. The company, Cantor and MDC have all filed appeals from the trial courts order. While these appeals are pending, the discovery phase is proceeding.



While it is not possible to predict with certainty the ultimate outcome of this litigation,
the company believes the likelihood of a loss exceeding the amount reserved is remote; however, it is possible that such loss could be less than the amount reserved.



5. Income Taxes



In the third quarter of 2003, the Internal Revenue Service (IRS) completed its audit of the companys tax returns for the 1995 through 1998 tax periods,
which had been amended for additional tax refunds. In October 2003, the company received notification that the Congressional Joint Committee on Taxation had approved these claims for tax refunds of approximately $24 million. The company expects to
receive these refunds plus interest of approximately $6.7 million in the fourth quarter of 2003. Pursuant to the settlement of these claims, in the third quarter of 2003, the company released $25 million of tax provisions no longer needed for loss
contingencies and recorded interest income of $6.7 million ($4.0 million, net of taxes). The company also recorded a provision of $9.5 million in the third quarter for loss contingencies relating to recent developments in certain other tax matters.
The net effect of these items was an increase in net income of $19.5 million, or $.24 per share.



6. Acquisitions and Dispositions



Acquisition of Technologic Partners in 2003

On September 2, 2003, the company purchased Technologic Partners, a closely held publications
and events firm for $2.7 million. Technologic Partners which has eight online newsletters and produces six conference events annually, is being combined with the Newsletters group within Dow Jones Newswires. Based on preliminary estimates, the
purchase resulted in the acquisition of goodwill of $3.4 million and other intangibles of $.5 million to be amortized on a straight-line basis over five years.



Acquisition of the Record of Stockton in 2003

On May 5, 2003, the
companys Ottaway Newspaper subsidiary acquired The Record of Stockton, California from Omaha World-Herald Company for $146 million ($144 million in cash, plus net working capital).



The purchase resulted in the acquisition of tangible net assets of $12 million, goodwill of $76.6 million and other intangibles of $58.2
million. The acquired goodwill and intangible assets will be deductible for tax purposes.



Acquired other intangible assets consisted of the following:



|(in thousands)                                                           |  | AcquiredIntangibles
|------------------------------------------------------------------------ |  | -------------------
|Subject to amortization:                                                 |  |                    
|Advertising accounts (amortized on a straight-line basis over 12 years)  |  | $                  
|Subscription accounts (amortized on a straight-line basis over 14 years) |  |                    
|                                                                         |  |                    
|                                                                         | 
|Total intangibles subject to amortization                                |  |                    
|                                                                         | 
|Not subject to amortization:                                             |  |                    
|Other, principally masthead                                              |  |                    
|                                                                         |  |                    
|                                                                         | 
|Total acquired intangibles                                               |  | $                  
|                                                                         |  |                    



Had these acquisitions been completed
as of January 1, 2003 or 2002, the impact on the companys results of operations would not have been significantly different from those presented.



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Sale of five Ottaway newspaper properties in 2002

On June 7, 2002, the company completed the sale of Ottaways Essex County newspaper properties to Eagle-Tribune Publishing Company and recognized a gain of $44.5 million ($38 million after taxes, or $.45 per
diluted share). On March 31, 2002, the company completed the sale of four of the Ottaway newspapers to Community Newspapers Holdings, Inc. and recognized a gain of $153.4 million ($126.1 million after taxes, or $1.49 per diluted share).



7. Goodwill and Intangible Assets



Goodwill balances by reportable segment are as follows:



|(in thousands)        |  | September 302003 |         | December 312002
|--------------------- |  | ---------------- | ------- | ---------------
|Print publishing      |  | $                | 16,471  |                
|Electronic publishing |  |                  | 7,900   |                
|Community newspapers  |  |                  | 112,018 |                
|                      |  |                  |         |                
|Goodwill              |  | $                | 136,389 |                
|                      |  |                  |         |                



Intangible assets as of September 30,
2003, were as follows:



|                          |  | September 30, 2003  |        | December 31, 2002      
|------------------------- |  | ------------------- | ------ | -----------------------
|(in thousands)            |  | GrossCarryingAmount |        | AccumulatedAmortization
|Subscription accounts     |  | $                   | 10,080 |                        
|Advertising accounts      |  |                     | 10,414 |                        
|                          |  |                     |        |                        
|                          |  |                     |        |                        
|Total                     |  |                     | 20,494 |                        
|                          |  |                     |        |                        
|Unamortizable intangibles |  |                     | 46,314 |                        
|                          |  |                     |        |                        
|                          |  |                     |        |                        
|Total intangibles         |  | $                   | 66,808 |                        
|                          |  |                     |        |                        



Amortization expense, based on
intangibles subject to amortization held at September 30, 2003, is expected to be $.6 million for the fourth quarter of 2003, $2.2 million in years 2004 and 2005, $2.0 million in 2006 and $1.3 million in 2007 and 2008.



8. Other Guarantees and Contingencies



In addition to the litigation that is separately disclosed in Note 4 of this Form 10-Q,
there are various libel actions and other legal proceedings that have arisen in the ordinary course of business that are pending against the company and its subsidiaries. In the opinion of management, based on advice of legal counsel, the ultimate
outcome to the company and its subsidiaries as a result of these other legal proceedings will not have a material effect on the companys financial statements. In addition, the company has insurance coverage for many of these matters.



The companys bylaws provide for indemnification of officers and
directors prosecuted in a criminal action or sued in a civil action or proceeding to the full extent permitted by the Delaware General Corporation Law. The maximum potential amount of future payments the company could be required to make under these
indemnification provisions is unlimited; however, the company maintains directors and officers liability and corporation reimbursement insurance for the benefit of the company and its directors and officers. The policy provides coverage
for certain amounts paid as indemnification pursuant to the provisions of Delaware law and the companys bylaws. As a result of its insurance coverage, the company believes that the estimated fair value of these indemnification provisions is
minimal.



The company enters into indemnification agreements in its ordinary
course of business, typically with companies from which it is acquiring or to which it is selling businesses, partners in joint ventures, licensees and licensors, and service providers and contractors. Under these agreements the company generally
indemnifies, holds harmless, and agrees to reimburse the indemnified party for losses suffered or incurred by the indemnified party, as a result of the companys activities or its breach of the agreement in question or in connection with any
intellectual property infringement claim by any third party with respect to the companys products. These indemnification obligations generally survive termination of the underlying agreement, either for some set number of years or perpetually.
In some cases, the maximum potential amount of future payments the company could be required to make under these indemnification obligations is unlimited. The company believes that the estimated fair value of these indemnity obligations is minimal
and the company has no liabilities recorded for these obligations as of



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##### Table of Contents

September 30, 2003. The company has not incurred material costs to defend lawsuits or settle claims related to these indemnification provisions.



The company has guaranteed payment for office space occupied by certain of its joint
ventures. The companys partners in these joint ventures have either directly guaranteed their share of any payments required under these guarantees or agreed to indemnify the company for 50% of any payments the company may be required to make
under these guarantees. Dow Jones share of obligations under these guarantees totals $7.5 million through 2010.



9. Dilution and Stock Compensation Plans



Basic and diluted earnings per share have been computed as follows:



|                                                 |  | Quarters EndedSeptember 30 |        | Nine Months EndedSeptember 30
|------------------------------------------------ |  | -------------------------- | ------ | -----------------------------
|(in thousands, except per share amounts)         |  | 2003(2)                    |        | 2002(3)                      
|Net income                                       |  | $                          | 28,577 |                              
|                                                 |  |                            |        |                              
|                                                 |  |                            |        |                              
|Weighted-average shares outstanding  basic      |  |                            | 81,507 |                              
|Effect of dilutive securities:                   |  |                            |        |                              
|Stock options                                    |  |                            | 104    |                              
|Other, principally contingent stock rights       |  |                            | 254    |                              
|                                                 |  |                            |        |                              
|Weighted-average shares outstanding  diluted(1) |  |                            | 81,865 |                              
|                                                 |  |                            |        |                              
|Basic earnings per share                         |  | $                          | .35    |                              
|Diluted earnings per share                       |  |                            | .35    |                              



|(1) | The diluted average shares outstanding have been determined using the treasury stock method, which assumes the proceeds from the exercise of outstanding options were
used to repurchase shares at the average market value of the stock during the quarter.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(2) | Options to purchase 8,439,000 shares in 2003 at an average price of $54.00 have been excluded
from the diluted earnings per share calculation because the options exercise prices were greater than the average market price during the quarter and to include such securities would be antidilutive.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(3) | Options to purchase 7,385,000 shares in 2002 at an average price of $56.29 have been excluded
from the diluted earnings per share calculation because to include such securities would be antidilutive.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Fair Value Based Method



The company accounts for its stock-based compensation in accordance with Accounting Principles Board Opinion No. 25 (APB 25), Accounting for Stock Issued to Employees, and its related interpretations. Had
the companys stock-based compensation been determined by the fair-value based method of SFAS 123, Accounting for Stock-Based Compensation, the companys net income and earnings per share would have been as follows:



|                                                                                                                     |  | Quarters EndedSeptember 30 |        |   | Nine Months EndedSeptember 30 |  
|-------------------------------------------------------------------------------------------------------------------- |  | -------------------------- | ------ | - | ----------------------------- | -
|(in thousands, except per share amounts)                                                                             |  | 2003                       |        |   | 2002                          |  
|Net income, as reported                                                                                              |  | $                          | 28,577 |   |                               | $
|Add: Stock-based compensation expense included in reported net income, net of taxes                                  |  |                            | 1,134  |   |                               |  
|Deduct: Total stock-based compensation expense determined under fair-value based method for all awards, net of
taxes |  |                            | (5,424 | ) |                               |  
|                                                                                                                     |  |                            |        |   |                               |  
|                                                                                                                     |  |                            |        |  
|Adjusted net income (loss)                                                                                           |  | $                          | 24,287 |   |                               |  
|                                                                                                                     |  |                            |        |   |                               |  
|                                                                                                                     |  |                            |        |  
|Basic earnings (loss) per share:                                                                                     |  |                            |        |   |                               |  
|As reported                                                                                                          |  | $                          | .35    |   |                               | $
|Adjusted                                                                                                             |  |                            | .30    |   |                               |  
|Diluted earnings (loss) per share:                                                                                   |  |                            |        |   |                               |  
|As reported                                                                                                          |  | $                          | .35    |   |                               | $
|Adjusted                                                                                                             |  |                            | .30    |   |                               |  



9



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##### Table of Contents

The following table provides the estimated fair value under the Black-Scholes option-pricing model of each option granted
in the first quarter of 2003 and 2002, and the significant weighted-average assumptions used in their determination.



|              |  | FairValue |       | Risk-FreeInterestRate |     |   | DividendYield |     |   | ExpectedLife |           | Volatility |     
|------------- |  | --------- | ----- | --------------------- | --- | - | ------------- | --- | - | ------------ | --------- | ---------- | ----
|Stock Options |  |           |       |                       |     |   |               |     |   |              |           |            |     
|2003          |  | $         | 13.13 |                       | 3.0 | % |               | 2.2 | % |              | 5.0 years |            | 28.0
|2002          |  | $         | 13.55 |                       | 4.4 | % |               | 2.3 | % |              | 5.0 years |            | 25.7



10. Comprehensive Income



Comprehensive income was computed as follows:



|                                      |  | Quarters Ended September 30 |        |   | Nine Months Ended September 30 |  
|------------------------------------- |  | --------------------------- | ------ | - | ------------------------------ | -
|(in thousands)                        |  | 2003                        |        |   | 2002                           |  
|Net income                            |  | $                           | 28,577 |   |                                | $
|Add: change in                        |  |                             |        |   |                                |  
|Cumulative translation adjustment     |  |                             | 703    |   |                                |  
|Unrealized (loss) gain on hedging     |  |                             | (1,241 | ) |                                |  
|Unrealized gain (loss) on investments |  |                             | 864    |   |                                |  
|                                      |  |                             |        |   |                                |  
|                                      |  |                             |        |  
|Comprehensive income                  |  | $                           | 28,903 |   |                                | $
|                                      |  |                             |        |   |                                |  



11. Pending Transactions



In November 2002, the company and the von Holtzbrinck Group entered into
a memorandum of understanding pursuant to which they agreed to exchange equity shareholdings so as to reduce the von Holtzbrinck Groups ownership of The Wall Street Journal Europe to 10% from 49% and the companys ownership of the von
Holtzbrinck Groups business daily, Handelsblatt, to 10% from 22%, with news and advertising relationships continuing. The agreement also provides each party the unilateral option to unwind the strategic alliance entirely. Assuming the
transaction is consummated, the company expects to record an after-tax gain of $11 million, or $.14 per share, on the exchange of its 12% interest in Handelsblatt for 39% of The Wall Street Journal Europe. Although the transaction has not been
finalized, the company is funding Wall Street Journal Europe losses at the ninety-percent level as of January 1, 2003.



12. Business Segments



The company reports the results of its operations in three segments: print publishing, electronic publishing and community newspapers. In addition, the company reports certain administrative activities under the
corporate segment.



Print publishing, which is largely comprised of the global
operations of The Wall Street Journal, produces business and financial content worldwide. This content is published primarily in the U.S., Europe, Asia and Latin America editions of The Wall Street Journal and in U.S. television through a licensing
arrangement with CNBC. The company manages the global Journal operations as one segment as their products comprise the global Journal brand, and there are significant interrelationships within the editions including global management, shared news
flows and workforce and a global advertising customer base and pricing. U.S. television, which represents a licensing agreement with NBC to provide branding, news content and on-air expertise to CNBC, is a further extension of the Journal brand and
the content it produces. The company also includes the operations of Barrons within print publishing instead of reporting them separately because of its relative immateriality to the companys results on a consolidated basis and because
it shares similarities with the global Journal operations.



Print publishing
accounted for approximately 57% of third quarter 2003 revenues, while the electronic publishing and community newspapers segments accounted for approximately 21% and 22%, respectively. The companys overall performance is largely dependent on
the operating performance of the global Wall Street Journal (including its extended U.S. Television brand and content).



10



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##### Table of Contents

Electronic publishing includes the operations of Dow Jones Newswires, Consumer Electronic Publishing and Dow Jones
Indexes/Ventures. Consumer Electronic Publishing includes the results of WSJ.com and its related vertical sites as well as the companys licensing/business development and radio/audio businesses. Revenues in the electronic publishing segment
are mainly subscription based. The community newspapers segment publishes 15 daily newspapers, 12 Sunday papers and more than 30 weeklies and shoppers in 9 states in the U.S.



|                                                          |  | Quarters EndedSeptember 30 |         |   | Nine Months EndedSeptember 30 |  
|--------------------------------------------------------- |  | -------------------------- | ------- | - | ----------------------------- | -
|(in thousands)                                            |  | 2003                       |         |   | 2002                          |  
|Revenues:                                                 |  |                            |         |   |                               |  
|Print publishing                                          |  | $                          | 213,586 |   |                               | $
|Electronic publishing                                     |  |                            | 79,352  |   |                               |  
|Community newspapers:                                     |  |                            |         |   |                               |  
|Comparable operations                                     |  |                            | 72,526  |   |                               |  
|Divested/newly-acquired operations                        |  |                            | 10,482  |   |                               |  
|                                                          |  |                            |         |   |                               |  
|                                                          |  |                            |         |  
|Consolidated revenues                                     |  | $                          | 375,946 |   |                               | $
|                                                          |  |                            |         |   |                               |  
|                                                          |  |                            |         |  
|Income before income taxes and minority interests:        |  |                            |         |   |                               |  
|Print publishing                                          |  | $                          | (11,491 | ) |                               | $
|Electronic publishing                                     |  |                            | 17,098  |   |                               |  
|Community newspapers:                                     |  |                            |         |   |                               |  
|Comparable operations                                     |  |                            | 19,364  |   |                               |  
|Divested/newly-acquired operations                        |  |                            | 2,402   |   |                               |  
|Corporate                                                 |  |                            | (10,557 | ) |                               |  
|                                                          |  |                            |         |   |                               |  
|                                                          |  |                            |         |  
|Segment operating income*                                 |  |                            | 16,816  |   |                               |  
|Restructuring charges and September 11 related items, net |  |                            |         |   |                               |  
|                                                          |  |                            |         |   |                               |  
|                                                          |  |                            |         |  
|Consolidated operating income                             |  |                            | 16,816  |   |                               |  
|                                                          |  |                            |         |  
|Equity in (losses) earnings of associated companies       |  |                            | (16     | ) |                               |  
|Gain on resolution of Telerate sale loss contingency      |  |                            |         |   |                               |  
|Gain on sale of businesses                                |  |                            |         |   |                               |  
|Contract guarantee                                        |  |                            | (2,306  | ) |                               |  
|Other income/(deductions), net                            |  |                            | 7,852   |   |                               |  
|                                                          |  |                            |         |   |                               |  
|                                                          |  |                            |         |  
|Income before income taxes and minority interests         |  | $                          | 22,346  |   |                               | $
|                                                          |  |                            |         |   |                               |  
|                                                          |  |                            |         |  
|Depreciation and amortization (D&A):                      |  |                            |         |   |                               |  
|Print publishing                                          |  | $                          | 16,312  |   |                               | $
|Electronic publishing                                     |  |                            | 6,543   |   |                               |  
|Community newspapers:                                     |  |                            |         |   |                               |  
|Comparable operations                                     |  |                            | 2,502   |   |                               |  
|Divested/newly-acquired operations                        |  |                            | 630     |   |                               |  
|Corporate                                                 |  |                            | 171     |   |                               |  
|                                                          |  |                            |         |   |                               |  
|                                                          |  |                            |         |  
|Consolidated D&A                                          |  | $                          | 26,158  |   |                               | $
|                                                          |  |                            |         |   |                               |  



|* | Restructuring charges and the gain from the business interruption insurance claim related to the September 11 terrorist attacks are not included in segment expenses as management
evaluates segment results exclusive of these items.
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



11



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##### Table of Contents

|ITEM 2. |  | Managements Discussion and Analysis of Financial Condition and Results of Operations
|------- |  | -------------------------------------------------------------------------------------



Revenue and operating results improved across all business segments in the third quarter, buoyed by strong advertising linage gains in
September at the U.S. Wall Street Journal and its international editions. U.S. Wall Street Journal advertising linage for the quarter was up 7.1%, as a 29.4% gain in September more than offset declines during the months of July and August. The U.S.
Journal posted linage increases in each of its major advertising categories in September and for the first time since the third quarter of 2000, quarterly advertising linage increased. Color advertising also showed strong gains, up 62% for the
quarter at the U.S. Journal, as advertisers continue to pay premium rates to take advantage of the companys high quality color advertising in order to reach an attractive and unique audience. Also contributing to the improved revenue and
results in the third quarter were results from the acquisition of the Stockton Record, continued cost management and other business improvements as part of Business Now, the companys long-range strategic plan.



Results of Operations



Third Quarter 2003 Compared To Third Quarter 2002



Net income for the third quarter of 2003 was $28.6 million, or $.35 per diluted share, compared with third quarter 2002 earnings of $2.4
million, or $.03 per share (all per share amounts included herein are based on reported net income and use diluted weighted-average shares outstanding). Net income in both the third quarter of 2003 and 2002 included a $.03 per share
charge to accrete discount on the reserve established in 2000 to cover potential contract guarantee obligations to Cantor Fitzgerald. The third quarter of 2003 also included a net gain of $.24 per share primarily related to the completion of an IRS
tax audit of the companys 1995 through 1998 tax periods. These items are detailed further beginning on page 19. Historically, advertising linage levels and earnings are seasonally lowest in the third quarter of the year.



Third quarter revenues increased 6.7%, to $375.9 million, on advertising revenue gains at the
domestic and international Wall Street Journal editions, as well as incremental revenues as a result of acquisitions of community newspaper properties and gains at the electronic publishing segment. On a same property basis, meaning
excluding Ottaway properties divested or acquired in the past 12 months, total revenue was up 3.7%. Information services revenues increased 3.1%, reflecting strong revenue growth at Consumer Electronic Publishing and Dow Jones Indexes/Ventures,
somewhat offset by a modest decline in Newswires revenue. Circulation and other revenue declined 2.2%, primarily reflecting lower circulation revenue.



Third quarter operating expenses increased $14.7 million, or 4.3%, to $359.1 million, primarily reflecting an increase in expenses from acquired community newspaper
properties ($8.1 million), higher newsprint expense ($1.3 million) and to a lesser extent higher pension costs and severance costs from a minor workforce reduction. Depreciation and amortization expense declined 7.1%, to $26.2 million, largely the
result of reduced capital spending over the past two years. Newsprint expense, on a same-property basis, was up 5.2%, as a 13.1% increase in newsprint prices was partially offset by a 7% decrease in consumption. At the end of September 2003, the
number of full-time employees was about 6,950. On a same property basis, headcount at the end of the third quarter 2003 was down 5% versus last year and 17% below the first quarter of 2001.



Third quarter 2003 operating income of $16.8 million (4.5% of revenues) was more than double
2002 operating income of $8 million (2.3% of revenues) reflecting improvements across all business segments.



Nine Months Ended September 30, 2003 Compared To Nine Months Ended September 30, 2002



Net income for the first nine months of 2003 was $126.3 million, or $1.54 per share, compared with earnings in 2002 of $186.3 million, or $2.21 per share. Included in net
income were certain items affecting comparisons, which netted to a gain of $1.02 per share in 2003 and a gain of $1.81 per share in 2002. These items are detailed beginning on page 18.



Revenues for the first nine months of 2003 declined 3%, to $1.1 billion, primarily the result of a weak advertising and business environment
for most of this year and a net reduction in revenue as a result of divested community newspaper properties. Information services revenues increased 1.3%, as strong revenue growth at Consumer Electronic Publishing and Dow Jones Indexes/Ventures was
offset by a decline in Newswires revenue. Circulation and other revenue was down 3.3%. On a same property basis, circulation and other revenue was down 2.1%, reflecting declines in circulation revenue and lower outside contract printing revenues.



Expenses for the first nine months of 2003 were down $78.0 million, or 7%, to
$1 billion. The reduction in expenses primarily reflected cost saving initiatives ($28 million); a favorable comparison ($30 million) as 2003 operating expenses included a gain on the settlement of a business interruption insurance claim, while 2002
included a restructuring charge; lower Todays Journal costs, predominately launch marketing spent in 2002 ($18 million); and a net reduction in expenses as a result of divested community newspaper properties ($2 million).



12



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##### Table of Contents

Operating income for the first nine months of 2003 was $87.6 million (7.8% of revenues), which was nearly double
nine-month 2002 operating income of $44.2 million (3.8% of revenues), reflecting the gain on the settlement of the business interruption insurance claim, a favorable comparison to the restructuring charge in 2002 as well as continued cost
containment efforts that more than offset the 3% decline in revenue.



Segment Data



The company reports the results of its
operations in three segments: print publishing, electronic publishing and community newspapers. The companys business and financial news and information operations are reported in two segments: print publishing and electronic publishing. The
company also produces general interest content for small regional communities throughout the U.S., the operating results of which are reported in the community newspapers segment. In addition, the company reports certain administrative activities
under the corporate segment.



Print Publishing



Print publishing, which is largely comprised of the global operations of The Wall Street
Journal, produces business and financial content worldwide. This content is published primarily in the U.S., Europe, Asia and Latin America editions of The Wall Street Journal and in U.S. television through a licensing arrangement with CNBC. The
company manages the global Journal operations as one segment as their products comprise the global Journal brand, and there are significant interrelationships within the editions including global management, shared news flows and workforce and a
global advertising customer base and pricing. U.S. television, which represents a licensing agreement with NBC to provide branding, news content and on-air expertise to CNBC, is a further extension of the Journal brand and the content it produces.
The company also includes the operations of Barrons within print publishing instead of reporting them separately because of its relative immateriality to the companys results on a consolidated basis and because it shares similarities
with the global Journal operations.



Print publishing accounted for
approximately 57% of third quarter 2003 revenues. The companys overall performance is largely dependent on the operating performance of the global Wall Street Journal (including its extended U.S. television brand and content). U.S. television
contributes a significantly higher operating margin than the publications within the segment since it largely represents incremental revenue for the global Journal content and branding.



As part of the companys Business Now plan, the company announced in the third quarter that beginning in 2004, editing
operations will be integrated to form a 24-hour Global News Desk that will be responsible for serving all of the companys editions in Asia, Europe and the U.S.



|                              |  | Quarters EndedSeptember 30 |         |    | Nine Months EndedSeptember 30 |  
|----------------------------- |  | -------------------------- | ------- | -- | ----------------------------- | -
|(in thousands)                |  | 2003                       |         |    | 2002                          |  
|Revenues                      |  |                            |         |    |                               |  
|U.S. Publications:            |  |                            |         |    |                               |  
|Advertising                   |  | $                          | 129,790 |    |                               | $
|Circulation and other         |  |                            | 63,562  |    |                               |  
|                              |  |                            |         |   
|International Publications:   |  |                            |         |    |                               |  
|Advertising                   |  |                            | 12,138  |    |                               |  
|Circulation and other         |  |                            | 8,096   |    |                               |  
|                              |  |                            |         |    |                               |  
|                              |  |                            |         |   
|Total revenues                |  |                            | 213,586 |    |                               |  
|Expenses*                     |  |                            | 225,077 |    |                               |  
|                              |  |                            |         |    |                               |  
|                              |  |                            |         |   
|Operating loss*               |  | $                          | (11,491 | )  |                               | $
|                              |  |                            |         |    |                               |  
|                              |  |                            |         |   
|Operating margin              |  |                            | (5.4    | )% |                               |  
|                              |  |                            |         |   
|Included in expenses:         |  |                            |         |    |                               |  
|Depreciation and amortization |  | $                          | 16,312  |    |                               | $



|* | Restructuring charges and the gain from the business interruption insurance claim related to September 11 are not included in segment expenses as management evaluates segment
results exclusive of these items. For information purposes, restructuring charges and the gain from the business interruption insurance claim allocable to the print publishing segment were a gain of $17,422 for the 2003 nine month period and a
charge of $8,310 for the 2002 nine month period.
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



13



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##### Table of Contents

|                                                    |  | Quarters EndedSeptember 30 |   |  | Nine Months EndedSeptember 30 |   
|--------------------------------------------------- |  | -------------------------- | - |  | ----------------------------- | --
|                                                    |  | 2003                       |   |  | 2002                          |   
|Statistical information:                            |  |                            |   |  |                               |   
|Advertising volume year-over-year percentage change |  |                            |   |  |                               |   
|                                                    |  |                            |   | 
|The Wall Street Journal linage                      |  |                            |   |  |                               |   
|General                                             |  | 12.5                       | % |  | (13.6                         | )%
|Technology                                          |  | 12.0                       |   |  | (10.5                         | ) 
|Financial                                           |  | (12.8                      | ) |  | (17.8                         | ) 
|Classified                                          |  | 10.5                       |   |  | (4.1                          | ) 
|Total U.S. Journal linage                           |  | 7.1                        |   |  | (12.0                         | ) 
|                                                    |  |                            |   | 
|The Asian Wall Street Journal linage                |  | 29.0                       |   |  | (2.9                          | ) 
|The Wall Street Journal Europe linage               |  | 23.6                       |   |  | (10.0                         | ) 
|Barrons pages                                      |  | (8.9                       | ) |  | 3.3                           |   



Third Quarter 2003 Compared To
Third Quarter 2002 - Print Publishing



Third quarter 2003 revenue
increased 4%, to $213.6 million, driven by strong advertising gains at the U.S. and international Journal editions. Advertising linage for The Wall Street Journal increased 7.1% for the quarter, with ad linage in September up 29.4% after declines of
4.4% and 10.0% in July and August, respectively. Linage at the international editions of the Journal increased 26.3% (up 44.1% in September, with one extra issue in both the European and Asian editions). Barrons advertising linage declined
8.9% in the quarter (up 4.1% in September). U.S. television licensing revenue was flat.



General advertising, which represented about 41% of total U.S. Journal linage, increased 12.5%, reflecting increases in travel, professional services, insurance, health care and media advertising, more than offsetting declines in apparel,
office products, auto and public utility advertising. Technology advertising, which represented 21% of total U.S. Journal linage, increased 12% in the quarter (with a very strong gain of 60.7% in September). The increase in technology advertising in
the quarter largely reflected improvements in software and communications advertising. Financial advertising, which accounted for 16% of total U.S. Journal linage, fell 12.8% in the quarter with July down 14.2%, August down 40.3% and September up
9.5%, as strong improvements in wholesale advertising were more than offset by declines in retail investment advisory advertising and tombstone advertising. Classified advertising linage, which represented 22% of total U.S. Journal linage, increased
10.5% driven by improvements in real estate and other classified advertising. Color advertising, which is billed at a premium, increased 62% reflecting strong increases throughout the quarter.



Circulation and other revenue for the U.S. print publications decreased 5.8%, primarily
reflecting lower circulation revenue as a result of discount offers required in this difficult economic climate and a deflationary print subscription price environment. Average circulation for the third quarter of 2003 for The Wall Street Journal
was 1,750,000 compared with circulation of 1,794,000 in the third quarter of 2002. Barrons average circulation was 323,000 in the quarter, up from 304,000 in the third quarter 2002. International print circulation and other revenues fell 4.7%,
as a result of modest declines in circulation revenue, outside printing contracts and conference revenue. Combined average circulation for the International Journals was 165,000 in the third quarter of 2003 compared with 159,000 in the third quarter
of 2002.



Print publishing expenses increased .8% in the quarter, to $225.1
million, as higher marketing spending, distribution costs, newsprint and modest severance costs were somewhat offset by lower employee compensation costs and depreciation expense. Newsprint expense was up 3.9% as a result of a 12.2% increase in
newsprint prices partially offset by a 7.4% decrease in consumption. The number of full-time employees in the print publishing segment was down 6.1% from September 30, 2002.



As a result, print publishings third quarter 2003 operating loss of $11.5 million improved 36% from the third quarter 2002 loss of $18
million, as losses at the Journal editions were somewhat offset by modest income from U.S. television. The 36% improvement in operating performance reflected improved results at the U.S. Journal partially offset by increased losses at the
international editions and reduced profitability at U.S. television. As discussed earlier, advertising linage is typically at its lowest level in the third quarter of the year.



14



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##### Table of Contents

Nine Months Ended September 30, 2003 Compared To Nine Months Ended September 30, 2002  Print Publishing



Print publishing revenue was down 5.7%, to $662.3 million, reflecting the
challenging advertising environment for most of this year. Advertising revenues from U.S. publications declined 6.5% reflecting a 4.7% linage decline at The Wall Street Journal and a 16.7% decline in advertising pages at Barrons. International
print advertising revenues were down 11%. Total combined international advertising linage was up 12.4% (12.1% on a per issue basis), however, revenues declined primarily as a result of discounts related to the global ad sales program launched last
summer. Print publishing circulation and other revenues declined 3.4%.



Operating expenses were down 7.1%, to $672.9 million, reflecting ongoing cost containment efforts, reduced Todays Journal costs and lower newsprint expenses. Newsprint expense was down 2.5%, as a 10.6% decline in consumption more than
offset a 9% price increase.



As a result, print publishing operating loss
through September 2003 was $10.6 million, compared with an operating loss of $21.6 million in the first nine months last year as significant losses at the international editions were somewhat offset by modest profits at the U.S. Journal and at U.S.
television operations. The improvement in operating performance reflected improved results at the U.S. Journal partially offset by increased losses at the international editions and reduced profitability at U.S. television.



Electronic Publishing



Electronic publishing includes the operations of Dow Jones Newswires, Consumer Electronic Publishing and Dow Jones Indexes/Ventures.
Consumer Electronic Publishing includes the results of WSJ.com and its related vertical sites as well as the companys licensing/business development and radio/audio businesses. Revenues in the electronic publishing segment are mainly
subscription-based. Electronic publishing represented about 21% of third quarter 2003 revenues.



On September 2, 2003, the company purchased Technologic Partners, a closely held publications and events firm for $2.7 million. Technologic Partners, which has eight online newsletters and produces six conference
events annually, is being combined with the Newsletters group at Dow Jones Newswires.



|                               |  | Quarters EndedSeptember 30 |        |   | Nine Months endedSeptember 30 |  
|------------------------------ |  | -------------------------- | ------ | - | ----------------------------- | -
|(in thousands)                 |  | 2003                       |        |   | 2002                          |  
|Revenues                       |  |                            |        |   |                               |  
|Dow Jones Newswires:           |  |                            |        |   |                               |  
|North America                  |  | $                          | 42,739 |   |                               | $
|International                  |  |                            | 10,920 |   |                               |  
|                               |  |                            |        |   |                               |  
|                               |  |                            |        |  
|Total Newswires                |  |                            | 53,659 |   |                               |  
|Consumer Electronic Publishing |  |                            | 16,254 |   |                               |  
|Dow Jones Indexes/Ventures     |  |                            | 9,439  |   |                               |  
|                               |  |                            |        |   |                               |  
|                               |  |                            |        |  
|Total revenues                 |  |                            | 79,352 |   |                               |  
|                               |  |                            |        |  
|Expenses*                      |  |                            | 62,254 |   |                               |  
|                               |  |                            |        |   |                               |  
|                               |  |                            |        |  
|Operating income*              |  | $                          | 17,098 |   |                               | $
|                               |  |                            |        |   |                               |  
|                               |  |                            |        |  
|Operating margin               |  |                            | 21.5   | % |                               |  
|                               |  |                            |        |  
|Included in expenses:          |  |                            |        |   |                               |  
|Depreciation and amortization  |  | $                          | 6,543  |   |                               | $



|* | Restructuring charges and the gain from the business interruption insurance claim related to September 11 are not included in segment expenses as management evaluates segment
results exclusive of these items. For information purposes, restructuring charges and the gain from the business interruption insurance claim allocable to the electronic publishing segment were a gain of $951 for the 2003 nine month period and a
charge of $2,443 for the 2002 nine month period.
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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|                              |  | September 302003 |  | September 302002
|----------------------------- |  | ---------------- |  | ----------------
|Statistical information:      |  |                  |  |                 
|Dow Jones Newswires terminals |  | 289,000          |  | 324,000         
|WSJ.com subscribers           |  | 686,000          |  | 664,000         





Third Quarter 2003 Compared To Third Quarter 2002  Electronic Publishing



Electronic publishing revenues increased 5.6%, to $79.4 million, as strong increases in Consumer Electronic Publishing and Dow Jones
Indexes/Ventures revenues more than offset lower Newswires revenue. Dow Jones Newswires revenue fell 1.2% from the third quarter of 2002, primarily reflecting a decrease in retail revenue due to contraction in the North American securities industry
partially offset by an increase in newsletters revenue as a result of the purchase of Technologic Partners in early September. English-language terminals carrying Dow Jones Newswires at September 30, 2003 were 289,000 compared with 324,000 at
September 30, 2002. North American terminals decreased by 41,000, while International terminals increased by 6,000.



Consumer Electronic Publishing revenue increased 23%, as a 33% increase in WSJ.com subscriber revenue driven by last years subscription price increase, coupled with
a 35% increase in advertising revenue, was somewhat offset by a 23% decline in licensing revenue. At the end of September 2003, the number of WSJ.com subscribers increased 3.3% from a year earlier, to 686,000. Dow Jones Indexes/Ventures revenues,
which include Dow Jones Indexes and reprints/permissions businesses, increased 23%.



Electronic publishing expenses increased 1.1%, to $62.3 million, resulting from slightly higher marketing costs and depreciation expenses. The number of full-time employees in the electronic publishing segment was down 3.4% from a year ago.



Electronic publishings operating income was $17.1 million (21.5% of
revenues), an improvement of 26% over third quarter 2002 operating income of $13.6 million (18.1% of revenues). The improvement in both margins and profitability were largely driven by increases in revenues at Consumer Electronic Publishing and Dow
Jones Indexes/Ventures.



Nine Months Ended September 30, 2003 Compared To
Nine Months Ended September 30, 2002  Electronic Publishing



Electronic publishing revenues for the first nine months of 2003 improved 3%, to $238.6 million, as strong revenue growth at Consumer Electronic Publishing (22%) and Dow Jones Indexes/Ventures (26%) more than offset lower Newswires revenue
(4.7%). Operating expenses increased 0.5%, to $188.5 million, reflecting higher marketing and facilities costs, which were partially offset by the companys cost containment efforts.



Operating income for the first nine months of 2003 was $50 million (21% of revenues), up 14% from operating income in 2002 of $44 million
(19% of revenues) led by gains at Consumer Electronic Publishing and Dow Jones Indexes/Ventures.



Community Newspapers



Community
newspapers includes the operations of Ottaway Newspapers, which publishes 15 daily newspapers and over 30 weekly newspapers and shoppers in 9 states in the U.S. Community newspapers comprised about 22% of third quarter 2003 revenues.



During the second quarter of 2003, the companys Ottaway Newspapers
subsidiary acquired The Record of Stockton California, enhancing the companys community newspaper portfolio. Prior to the acquisition, The Stockton Record Group reported 2002 revenues of $37 million and operating profits of $9.6 million. The
Record has daily paid circulation of 59,985 and Sunday circulation of 70,732.



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|                                                    |  | Quarters EndedSeptember 30 |        |    | Nine Months EndedSeptember 30 |  
|--------------------------------------------------- |  | -------------------------- | ------ | -- | ----------------------------- | -
|(in thousands)                                      |  | 2003                       |        |    | 2002                          |  
|Revenues                                            |  |                            |        |    |                               |  
|Advertising                                         |  |                            |        |    |                               |  
|Comparable operations                               |  | $                          | 51,869 |    |                               | $
|Divested/newly-acquired operations                  |  |                            | 8,879  |    |                               |  
|                                                    |  |                            |        |    |                               |  
|Total advertising                                   |  |                            | 60,748 |    |                               |  
|                                                    |  |                            |        |   
|Circulation and other                               |  |                            |        |    |                               |  
|Comparable operations                               |  |                            | 20,657 |    |                               |  
|Divested/newly-acquired operations                  |  |                            | 1,603  |    |                               |  
|                                                    |  |                            |        |    |                               |  
|Total circulation and other                         |  |                            | 22,260 |    |                               |  
|                                                    |  |                            |        |   
|Total revenues                                      |  |                            | 83,008 |    |                               |  
|                                                    |  |                            |        |    |                               |  
|                                                    |  |                            |        |   
|Expenses                                            |  |                            |        |    |                               |  
|Comparable operations                               |  |                            | 53,162 |    |                               |  
|Divested/newly-acquired operations                  |  |                            | 8,080  |    |                               |  
|                                                    |  |                            |        |    |                               |  
|                                                    |  |                            |        |   
|Total segment expenses                              |  |                            | 61,242 |    |                               |  
|                                                    |  |                            |        |    |                               |  
|                                                    |  |                            |        |   
|Operating income                                    |  |                            |        |    |                               |  
|Comparable operations                               |  |                            | 19,364 |    |                               |  
|Divested/newly-acquired operations                  |  |                            | 2,402  |    |                               |  
|                                                    |  |                            |        |    |                               |  
|                                                    |  |                            |        |   
|Total operating income                              |  | $                          | 21,766 |    |                               | $
|                                                    |  |                            |        |    |                               |  
|                                                    |  |                            |        |   
|Operating margin                                    |  |                            |        |    |                               |  
|Comparable operations                               |  |                            | 26.7   | %  |                               |  
|Divested/newly-acquired operations                  |  |                            | 22.9   |    |                               |  
|                                                    |  |                            |        |   
|Included in expenses:                               |  |                            |        |    |                               |  
|Depreciation and amortization                       |  |                            |        |    |                               |  
|Comparable operations                               |  | $                          | 2,502  |    |                               | $
|Divested/newly-acquired operations                  |  |                            | 630    |    |                               |  
|                                                    |  |                           
|                                                    |  | Quarters EndedSeptember 30 |        |    | Nine Months EndedSeptember 30 |  
|                                                    |  | 2003                       |        |    | 2002                          |  
|Statistical information:                            |  |                            |        |    |                               |  
|Advertising volume year-over-year percentage change |  |                            |        |    |                               |  
|Dailies                                             |  |                            | (2.5   | )% |                               |  
|Non-Dailies                                         |  |                            | 2.4    |    |                               |  
|Overall                                             |  |                            | (1.7   | )  |                               |  



|* | Percentage excludes divested/newly-acquired operations.
|- | -------------------------------------------------------



Third Quarter 2003 Compared To Third Quarter 2002 - Community Newspapers



Community newspapers third quarter revenue was up 15%, to $83 million, primarily reflecting incremental revenue as a result of newly acquired newspapers. On a
same property basis, revenue increased 0.9%. Same property advertising revenue was flat as modest rate increases were offset by a 1.7% decline in advertising linage. Same property circulation and other revenue increased slightly and
average daily circulation was about 384,000 in 2003 and 394,000 in 2002.



Community newspapers expenses increased 19.3%, to $61.2 million, reflecting in part newly acquired properties. On a same property basis, operating expenses increased 3.5%, as a result of higher employee benefit costs and an increase in
newsprint expense. Newsprint expense, on a same property basis, increased 10% as a result of a 16.5% increase in newsprint prices offset in part by a 5.6% reduction in consumption. The number of full-time employees in the community newspapers
segment was up 15% from a year ago, reflecting acquisitions (on a same property basis headcount was down 1.1%).



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Operating income was $21.8 million (26.2% of revenues), compared with income last year of $20.6 million (28.6% of
revenues). On a same property basis, operating income of $19.4 million (26.7% of revenues) decreased 5.8% from $20.6 million (28.6% of revenues) a year earlier.



Nine Months Ended September 30, 2003 Compared With Nine Months Ended September 30, 2002  Community Newspapers



Community newspaper revenues for the first nine months of 2003 were down 0.5%, to $226.9
million. On a same property basis, revenues were up 1.2%, reflecting higher advertising preprint revenues and increased rates somewhat offset by a 1.4% decline in advertising linage.Expenses for the first nine months of 2003 were up
1.7%, to $171.1 million. On a same property basis, operating expenses increased 3.5%, as a result of higher employee salary and benefit costs as well as an increase in newsprint costs. Newsprint expenses increased 5.9%, as a 4% decline in
consumption was more than offset by a 10.2% increase in newsprint prices.



Community newspapers operating income for the first nine months of 2003 was $55.8 million (24.6% of revenues), down 6.7% from last years operating income of $59.8 million (26.2% of revenues). On a same property basis, operating income
of $51.7 million (24.8% of revenues) was 5.2% below 2002 operating income of $54.6 million (26.5% of revenues).



Certain Items Affecting Comparisons



The following table summarizes certain items affecting comparisons for the nine months ended September 30, 2003 and 2002:



|                                                          |           | Nine Months Ended September 30 |     
|--------------------------------------------------------- | --------- | ------------------------------ | ----
|(in millions, exceptper share amounts)                    |           | 2003                           |     
|                                                          | Operating |                                | Net 
|Included in operating income:                             |           |                                |     
|Restructuring charges(b)                                  |           |                                |     
|Gain from business interruption insurance claim(b)        |           | $                              | 18.4
|Included in non-operating income:                         |           |                                |     
|Contract guarantee(a)                                     |           |                                |     
|Gain on resolution of Telerate sale loss contingencies(c) |           |                                |     
|Sale of ONI properties(d)                                 |           |                                |     
|CNBC International gain(e)                                |           |                                |     
|Special income tax matters(f)                             |           |                                |     
|                                                          |           |                                |     
|                                                          |           |                                |     
|Total                                                     |           | $                              | 18.4
|                                                          |           |                                |     



(a) Contract Guarantee:



Under the terms of the companys 1998 sale of Telerate to Bridge
Information Systems, Inc. (Bridge), Dow Jones retained its guarantee of payments under certain circumstances of certain minimum payments for data acquired by Telerate from Cantor Fitzgerald Securities (Cantor) and Market Data Corporation (MDC). The
annual minimum payments average approximately $50 million per year through October 2006 under certain conditions. Bridge agreed to indemnify Dow Jones for any liability Dow Jones incurred under the contract guarantee with respect to periods
subsequent to Bridges purchase of Telerate. In 2000, based in part on uncertainty about Bridges solvency as well as other factors, the company established a reserve of $255 million representing the net present value of the total
estimated payments from 2001 through October 2006, using a discount rate of 6%.



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Earnings in 2003 and 2002 have included charges related to the accretion of the discount on the reserve balance. These
charges totaled $2.3 million and $2.9 million in the third quarters of 2003 and 2002, respectively. For the first nine months of 2003 and 2002, charges related to the accretion of discount totaled $7.4 million and $9.1 million, respectively.



Bridge filed for bankruptcy in February 2001 but made payments for this data
for the post-petition periods through October 2001, when Telerate ceased operations, went out of business, sold certain assets and rejected its contracts with Cantor and MDC. The company is now in litigation with Cantor and MDC with respect to their
claims for amounts due under the contract guarantee. The company has various substantial defenses to these claims and the litigation is proceeding. The trial court rendered a decision in January 2003 denying the parties respective motions to
grant their own claims and to dismiss the competing claims. The company, Cantor and MDC have all filed appeals from the trial courts order. While these appeals are pending, the discovery phase is proceeding.



While it is not possible to predict with certainty the ultimate outcome of this litigation,
the company believes the likelihood of a loss exceeding the amount reserved is remote; however, it is possible that such loss could be less than the amount reserved.



(b) Restructuring charges and September 11 items, net:



In the second quarter of 2003, the company recorded a gain of $18.4 million ($11.1 million after taxes, or $.14 per diluted share)
reflecting the settlement of its business interruption insurance claim for loss of operating income suffered as a result of the terrorist attacks on the World Trade Center on September 11, 2001.



The second quarter of 2002 included restructuring charges of $11.1 million ($6.3 million
after taxes and minority interests, or $.07 per diluted share) largely reflecting employee severance related to a workforce reduction of roughly 165 full-time employees across the print and electronic publishing and corporate segments. See Note 2 on
page 6 of this Form 10-Q for additional information on restructuring charges.



(c) Gain on resolution of Telerate sale loss contingencies:



In the first quarter of 2003, the company recorded a gain of $59.8 million ($.73 per diluted share) on the resolution of certain loss contingencies resulting from the sale of its former Telerate subsidiary to Bridge. The reserve for loss
contingencies was established as part of the loss on sale of Telerate in 1998 and related to various claims that arose out of the Stock Purchase Agreement, including a purchase price adjustment related to working capital, an indemnification
undertaking and other actual and potential claims and counter-claims between the company and Bridge. In February 2001, Bridge declared bankruptcy. In March 2003, these matters were resolved by the bankruptcy court, and the companys contingent
liabilities were thereby extinguished.



(d) Gains on sale of ONI properties:



On June 7, 2002, the company completed the sale of Ottaways Essex
County newspaper properties to Eagle-Tribune Publishing Company and recognized a gain of $44.5 million ($38 million after taxes, or $.45 per diluted share). On March 31, 2002, the company completed the sale of four of the Ottaway newspapers to
Community Newspapers Holdings, Inc. and recognized a gain of $153.4 million ($126.1 million after taxes, or $1.49 per diluted share).



(e) Gains in equity in earnings (losses) of associated companies:



The second quarter of 2002 included gains at CNBC Asia of $3.9 million ($.05 per diluted share) which consisted of a $2.5 million gain from the favorable settlement of a
contractual obligation and a $1.4 million gain from the sale of an investment by CNBC Asia.



(f) Special income tax matters:



In the
third quarter of 2003, the Internal Revenue Service (IRS) completed its audit of the companys tax returns for the 1995 through 1998 tax periods, which had been amended for additional tax refunds. In October 2003, the company
received notification that the Congressional Joint Committee on Taxation had approved these claims for tax refunds of approximately $24 million. The company expects to receive these refunds plus interest of approximately $6.7 million in the fourth
quarter of 2003. Pursuant to the settlement of these claims, in the third quarter of 2003, the company released $25 million of tax provisions no longer needed for loss contingencies and recorded interest income of $6.7 million ($4.0 million, net of
taxes). The company also recorded a provision of $9.5 million in the third quarter for loss contingencies relating to recent developments in certain other tax matters. The net effect of these items was an increase in net income of $19.5 million, or
$.24 per share.



Equity in Earnings (Losses) of Associated Companies



In the third quarter of 2003, the companys share of equity in
losses of associated companies was roughly break-even, compared with losses of $0.7 million last year. Improved results at CNBC International and F.F. Soucy were offset by declines at Factiva. Equity in earnings of associated companies for the first
nine months of 2003 was $0.3 million compared with near



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break even results in the first nine months of 2002, primarily as a result of improvements at SmartMoney and F.F. Soucy offset by declines at Factiva.



Other Income/Deductions, net



Investment income, net of interest expense totaled $6.6 million for the third quarter of
2003 compared with net interest expense of $.4 million in the third quarter of 2002. The current year included $6.7 million of interest income from the anticipated 1995-1998 IRS tax refund. Other, net for the third quarter of 2003 totaled a gain of
$1.3 million compared with a loss of $.3 million in 2002, largely reflecting foreign exchange gains in 2003 versus some miscellaneous foreign exchange losses in 2002.



Income Taxes



The following table presents the effective income tax rates, net of minority interests, for the quarters and nine months ended September 30, 2003 and 2002:



|                                                                          |  | Quarters Ended September 30 |    |  |  |  | Nine Months Ended September 30 |  
|------------------------------------------------------------------------- |  | --------------------------- | -- |  |  |  | ------------------------------ | -
|                                                                          |  | 2003                        |    |  |  |  | 2002                           |  
|Effective income tax rate                                                 |  | (25.3                       | )% |  |  |  | 59.3                           | %
|Effective income tax rate, excluding items identified in table on page 18 |  | 38.2                        | %  |  |  |  | 40.0                           | %



The effective tax rates were affected
by certain capital loss/gain transactions that occurred during all periods. In addition, the third quarter of 2003 included net tax benefits primarily as a result of the completion of the federal audit of the 1995 through 1998 tax periods. The
effective tax rate in the third quarter 2003 also included a small state tax refund.



The following is a reconciliation of the effective tax rate:



|                            |  | Quarters Ended September 30 |      
|--------------------------- |  | --------------------------- | -----
|                            |  | 2003                        |      
|(dollars in millions)       |  | IncomeTaxes                 |      
|Reported                    |  | $                           | (5.8 
|(net of minority interests) |  |                             |      
|                            |  |                             |      
|Adjusted to remove:         |  |                             |      
|Cantor guarantee            |  |                             |      
|Special income tax matters  |  |                             | (12.8
|                            |  |                             |      
|                            |  |                             |      
|Adjusted                    |  | $                           | 7.0  
|                            |  |                             |      



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|                                                       |  | Nine Months Ended September 30 |      
|------------------------------------------------------ |  | ------------------------------ | -----
|                                                       |  | 2003                           |      
|(dollars in millions)                                  |  | IncomeTaxes                    |      
|Reported                                               |  | $                              | 22.8 
|(net of minority interests)                            |  |                                |      
|                                                       |  |                                |      
|Adjusted to remove:                                    |  |                                |      
|Restructuring charges, net of minority interests       |  |                                |      
|Gain from business interruption insurance claim        |  |                                | 7.3  
|Cantor guarantee                                       |  |                                |      
|Gain on resolution of Telerate sale loss contingencies |  |                                |      
|Sale of ONI properties                                 |  |                                |      
|CNBC International gains                               |  |                                |      
|Special income tax matters                             |  |                                | (12.8
|                                                       |  |                                |      
|                                                       |  |                                |      
|Adjusted                                               |  | $                              | 28.3 
|                                                       |  |                                |      



In the first quarter of 2003, as a
result of changes to Internal Revenue Service (IRS) guidelines in 2002, the company amended its 1998 U.S. Corporate income tax return to include an additional capital loss of about $550 million on its sale of Telerate. Factoring in the amended
capital loss, the company had available approximately $1.3 billion of capital loss carryforward (a deferred tax asset of about $500 million, which was fully reserved). About $1 billion of this loss carryforward is recognized for tax purposes, with
about $852 million expiring at the end of 2003 and $157 million expiring in 2006. The remaining $272 million of capital loss carryforward, which primarily relates to the Cantor contract guarantee obligation, will be recognized for tax purposes only
to the extent, if any, that the company is required to make payment. If the company is required to make such payment, the resulting loss carryforward will be available for use five years from the year it is recognized.



As of September 30, 2003, the company could not conclude that it was more likely than not it
would realize any net tax savings from capital loss carryforwards prior to their expiration and believes the full valuation allowance reserve was appropriate at September 30, 2003. The company has been aggressively evaluating opportunities to
utilize these capital loss carryforwards prior to their expiration. While the company was able to utilize $190 million of capital loss carryforwards to offset capital gains on the sale of five Ottaway properties in 2002, there has not been another
meaningful strategy that is both financially attractive and compatible with the companys criteria for wholly transparent, understandable and conservative financial management. As a result, it is likely that the company will not utilize the
carryforwards that are set to expire in 2003.



Minority Interests in Losses
of Subsidiaries



Minority interests in losses of subsidiaries was $.5
million in the third quarter of 2003 compared with $2.3 million in the third quarter of 2002 and $1.3 million for the nine months ended 2003 compared to $7.1 million for the like period 2002, predominantly reflecting the pending transaction with the
von Holtzbrinck Group to reduce their ownership of The Wall Street Journal Europe. Although the transaction has not been finalized, the company is funding Wall Street Journal Europe losses at the ninety-percent level as of January 1, 2003.



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Liquidity and Capital Resources



Cash Flow Summary



|                                                    |  | Nine Months EndedSeptember 30 |       
|--------------------------------------------------- |  | ----------------------------- | ------
|(in millions)                                       |  | 2003                          |       
|Net cash provided by operating activities           |  | $                             | 144.6 
|Net cash (used in) provided by investing activities |  |                               | (193.2
|Net cash provided by (used in) financing activities |  |                               | 31.4  
|                                                    |  |                               |       
|                                                    |  |                              
|(Decrease) increase in cash and cash equivalents    |  |                               | (17.2 
|Cash and cash equivalents at beginning of year      |  |                               | 39.3  
|                                                    |  |                               |       
|Cash and cash equivalents at September 30           |  | $                             | 22.1  
|                                                    |  |                               |       



Cash provided by operating activities
for the first nine months of 2003 was $144.6 million, which was an improvement of $94 million from net cash provided by operations of $50.6 million in the same period last year. The improvement was primarily the result of higher operating income and
lower income tax payments. The companys federal income taxes that were normally due on September 15 and December 15, 2001, were deferred to January 15, 2002, as the Internal Revenue Service offered relief of these payments for taxpayers that
were affected by the September 11 terrorist attacks on the World Trade Center.



Net cash used in investing activities was $193.2 million in the first nine months of 2003 primarily reflecting the acquisition of The Stockton Record, capital expenditures of $37.2 million and the funding of equity investees. In the first
nine months of 2002, net cash provided by investing activities totaled $185.7 million, primarily reflecting proceeds of about $248 million from the sale of the five Ottaway properties, offset by capital expenditures of $63.8 million.



Net cash provided by financing activities for the first nine months of 2003 was $31.4
million. Sources of cash from financing activities in 2003 included a net increase in debt of $100.6 million, primarily to fund the purchase of The Stockton Record, as well as the receipt of $6.1 million from a minority shareholder to fund a
subsidiary, net of distributions and $7 million from sales under stock compensation plans. Cash outlays included the payment of $61.2 million in dividends to shareholders and the repurchase of shares of treasury stock for $21.1 million. Net cash
used in financing activities in the first nine months of 2002 was $232.9 million, as the company used the proceeds from the sale of the five Ottaway properties during the first half of 2002 to reduce its debt by $77 million and purchase shares of
treasury stock for $112.3 million. Also in 2002, the company paid $63.1 million in dividends and received $13.8 million from sales under stock compensation plans and $5.7 million from a minority shareholder in a subsidiary.



As previously disclosed, in 2000 the company established a reserve for the present value of
the total estimated payments through October 2006 in connection with Dow Jones guarantee of certain minimum payments for data acquired by Dow Jones former Telerate subsidiary from Cantor Fitzgerald Securities (Cantor) and Market Data
Corporation (MDC). Bridge Information Systems, Inc., which purchased Telerate in 1998, is currently in bankruptcy but made payments for this data for the post-petition periods through October 2001, when Telerate ceased operations, went out of
business, sold certain assets and rejected its contracts with Cantor and MDC. The company is now in litigation with Cantor and MDC with respect to their claims for amounts allegedly due under the contract guarantee. The company has various
substantial defenses to these claims and the litigation is proceeding.



As of
September 30, 2003, the balance of the reserve for the contract guarantee was $251.6 million. The company has classified $151.2 million of this reserve as current based on the original due dates of the contract. Due to the stage of the lawsuit at
September 30, 2003, it is not possible to determine whether the court will find that any obligation under the guarantee may be dismissed or reduced. Accordingly, the company believes the balance of the reserve continues to be appropriate.



As discussed earlier, in the fourth quarter of 2003, the company expects to
receive about $30 million of tax refunds and related interest as a result of the completion of the federal audit of the 1995 through 1998 tax periods. The company expects to use these proceeds to fund pension obligations and to reduce debt.



The company expects its cash from operations to be sufficient to meet its
normal recurring operating commitments, fund capital expenditures and pay dividends. If necessary, the companys liquidity requirements may be funded through the issuance of commercial paper, which is supported by a $400 million revolving
credit agreement with several banks. In June 2003, the company renewed its revolving credit agreements with a consortium of banks. Under these agreements, the company can borrow up to $400 million, $130 million through June 21, 2004 and $270 million
through June 24, 2006. The terms are



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essentially the same as the prior agreement. As of September 30, 2003, the companys commercial paper balance was $193.6 million, which is classified as
long-term as it is the companys intent to refinance such debt on a long-term basis. The company has temporarily suspended its share repurchase program to utilize excess cash flow to reduce its debt.



Pending Transactions



In November 2002, the company and the von Holtzbrinck Group entered into a memorandum of understanding pursuant to which they agreed to
exchange equity shareholdings so as to reduce the von Holtzbrinck Groups ownership of The Wall Street Journal Europe to 10% from 49% and the companys ownership of the von Holtzbrinck Groups business daily, Handelsblatt, to 10% from
22%, with news and advertising relationships continuing. The agreement also provides each party the unilateral option to unwind the strategic alliance entirely. Assuming the transaction is consummated, the company expects to record an after-tax gain
of $11 million, or $.14 per share, on the exchange of its 12% interest in Handelsblatt for 39% of The Wall Street Journal Europe. Although the transaction has not been finalized, the company is funding Wall Street Journal Europe losses at the
ninety-percent level as of January 1, 2003.



Information Relating To
Forward-Looking Statements



This document contains
forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those anticipated. Such risks and uncertainties include, but are not limited to: the cyclical nature of the companys
business and the strong negative impact of economic downturns on advertising revenues; the negative impact on the companys core advertising market-business-to-business advertising-caused by weak corporate profits, corporate scandals that have
resulted in damage to business, investor and public confidence; the risk that the current weak advertising market, particularly in the financial and technology segments, will not improve or will improve very slowly or only to a limited extent; the
risk that the company will not benefit from or will only benefit to a limited extent from any improvement in the advertising market in the face of competition from other national business magazines, television, trade publications and other
publications and services; the companys ability to limit and manage expense growth, especially in light of its prior cost-cutting and its planned growth initiatives, without harming its growth prospects; the extent to which the company is
required to perform under the guarantee to Cantor Fitzgerald Securities and Market Data Corporation, and other uncertainties relating to liability under this guarantee; the intense competition the companys existing products and services face
in the markets for financial news and information and advertising revenues from newspapers, specialized magazines, free and paid Internet publications and services, news services, financial television programming and other new media; the
companys ability to expand and diversify its market segment focus beyond financial and technology and the challenge it will face in attempting to become a leading presence in new market segments, such as health care, automotive, telecom, and
high-end consumer goods, where competing publications and services, such as specialty and trade magazines, have already established themselves; the risk that the companys initiatives to attract more consumer advertising, and other diversified
advertising, to The Wall Street Journal will not succeed; the competition the company will face in introducing new products and services in the business-to-business market from already existing newsletters, trade publications, research reports and
services; with respect to circulation, the declining frequency of regular newspaper buying by young people who are potential readers of the companys publications; with respect to Newswires, the challenges the company will face in promoting its
NewsPlus enhancement and in launching the next stages of its Newswire of the Future initiative, in the face of competing resources for in-depth news analysis; with respect to Newswires and other subscription-based products and services,
the negative impact of business consolidations and layoffs in the financial services industry on sales of the companys products and services; with respect to Newswires, the challenges the company faces in striving to increase its international
revenues given the competition from and subscribers desire for, local language news services; with respect to Newswires, risks concerning the financial viability of the Moneyline Telerate business, with which Newswires has entered into a
bundling arrangement that is important to Newswires international revenues; with respect to Newswires, competition from other independent news service providers and the risk that distributors of Newswires products may elect to distribute only
their own news services; the companys ability to find strategic and financially attractive core-business acquisition opportunities; the companys ability to leverage its brands to develop new business opportunities and to generate
advertising and other revenues from these products; the companys ability to achieve strategic alliances and to improve the growth and profitability of existing strategic alliances; with respect to the companys community newspapers
business, its ability to maintain or grow margins and to strengthen its portfolio of newspaper properties, particularly given the difficulty of finding quality newspaper properties to acquire; the degree to which the companys Personal Journal
is able to generate new advertising revenues from diversified markets, such as health care, automotive and consumer goods; the extent to which the recent enhancements to The Wall Street Journal will attract a broader base of readers, subscribers,
and advertisers; in light of the weak advertising market and competition, the companys ability to attract diverse advertisers to place color advertising; the companys ability to increase its circulation and advertising revenues from its
international print publications and to further penetrate overseas markets through print and television products, given the competition from local language publications and television networks and other international publications and television
ventures; the ability of WSJ.com to continue to increase revenues through building subscriber and advertiser numbers and to limit expenses; the amount of user traffic on the companys Internet sites and the pricing of



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advertising on Internet sites generally; potential increased regulation of online businesses; adverse developments relating to the companys
commitments, contingencies and equity investments; adverse developments relating to changes in tax law or rates; risks related to the potential or actual insolvency or bankruptcy of any of the companys suppliers, service providers or business
partners, including providers of software and software maintenance; the companys ability to recover from any possible technical, hardware or software failure; the companys ability to negotiate collective bargaining agreements with its
labor unions without work interruptions; the companys ability to attract and retain qualified personnel if the labor market tightens as a result of an improvement in the economy; cost of newsprint; 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.



|Item 3: |  | Quantitative And Qualitative Disclosures about Market Risk
|------- |  | ----------------------------------------------------------



In December 2002, the company entered into forward foreign currency exchange contracts to exchange $24.5 million for 15.8 million British pounds and to exchange $25.3
million for 25.2 million euro. These contracts, which expire ratably over 2003, are designated as cash flow hedges of anticipated operating expenses that are denominated in these foreign currencies. Revenues of the company are largely collected in
U.S. dollars. The company has not entered into any new forward foreign exchange contracts since December 2002.



These contracts are entered into to protect against the risk that such expenses will be adversely affected by devaluation in the U.S. dollar relative to these currencies. Realized gains or losses on foreign currency
forward contracts are recognized currently through income and generally offset the transaction losses or gains on the foreign currency cash flows which they are intended to hedge.



The companys commercial paper outstanding of $193.6 million at September 30, 2003 is also subject to market risk as the debt reaches
maturity and is reissued at prevailing interest rates. At September 30, 2003, interest rates outstanding ranged from 1.0% to 1.2%, with a weighted-average of 1.1%.



|Item 4: |  | Controls & Procedures
|------- |  | ---------------------



Evaluation of Disclosure Controls and Procedures



As of the end of the period covered by this report, under the supervision and with the participation of the companys management, including the companys Chief
Executive Officer (CEO) and Chief Financial Officer (CFO), an evaluation of the effectiveness of the companys disclosure controls and procedures was performed. Based on this evaluation, the CEO and CFO have concluded that the companys
disclosure controls and procedures are effective to ensure that material information is recorded, processed, summarized and reported by management of the company on a timely basis in order to comply with the companys disclosure obligations
under the Securities Exchange Act of 1934 and the SEC rules thereunder.



Changes in internal controls over financial reporting



There were no
changes in the companys internal controls over financial reporting that occurred during the three month period ended September 30, 2003 that have materially affected, or are reasonable likely to materially affect, the companys internal
control over financial reporting.



PART II. OTHER INFORMATION



|Item 1: |  | Legal Proceedings
|------- |  | -----------------



On February 20, 2001, Market Data Corp. (MDC) commenced a lawsuit against Dow Jones in the Supreme Court of the State of New York, seeking to compel the company to pay $11.7 million, plus interest, attorneys
fees and costs, that MDC claimed was owed under the guarantee issued to MDC and Cantor Fitzgerald Securities (together with its affiliates, Cantor), together with unspecified consequential damages that MDC claimed result from Dow Jones failure
to pay on the guarantee. The guarantee relates to certain annual minimum payments owed by Telerate for data acquired by Telerate from Cantor Fitzgerald and MDC under contracts entered into when Telerate was a subsidiary of Dow Jones, and
is described in Managements Discussion and Analysis.



In April 2001, Dow
Jones paid $5.8 million to MDC covering the period January 1 to February 14, 2001 preceding Bridge Information Systems Chapter 11 bankruptcy filing. Bridge made the payments for the post-petition periods through the third quarter of 2001.
After certain amendments were made to the complaint, the remaining claims in this lawsuit sought the



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payment of interest on the payment made in the first quarter of 2001 and for attorneys fees and costs in this litigation. The parties settled these
claims and this lawsuit was then withdrawn.



In October 2001, the bankruptcy
court granted Bridges motion to reject Telerates contracts with Cantor and MDC. Telerate has indicated that it has ceased operations, is no longer receiving government securities data from Cantor and MDC and will not make further
payments to Cantor and MDC. Cantor and MDC advised the company that they would demand payment from Dow Jones of an amount they alleged was due on November 15, 2001 under the contract guarantee as well as future amounts due through October 2006. The
company has various substantial defenses to these claims.



On November 13,
2001, the company instituted a lawsuit in the Supreme Court of the State of New York seeking a declaratory judgment with respect to the contract guarantee and the claims of Cantor and MDC. In this lawsuit the company has asked the court to find that
the company does not and will not owe any payment under the contract guarantee through October 2006. In the alternative, the company has asked the court to find that if any amount is owed, it must be reduced by amounts that Cantor and MDC receive or
should have received from other distribution of the data. MDC has asserted counterclaims demanding payment of $10,197,416 (allegedly the balance owed by Telerate on November 15, 2001), interest, attorneys fees, specific performance of the
guarantee, and a declaratory judgment as to the validity and interpretation of the guarantee through October 2006.



Cantor also commenced a separate lawsuit in the Supreme Court of the State of New York (since consolidated with the companys case) seeking payment of $10 million
(allegedly the balance of the November 2001 minimum payment), payment of $250 million in breach of contract damages, specific performance of the guarantee, a declaration that the guarantee remains in full force and effect, payment of approximately
$16 million allegedly owed by Telerate and guaranteed by the company in the guarantee for the distribution of certain other data, attorneys fees, interest, and other relief.



Arguments were heard in August 2002 on the parties respective motions to grant their own claims and to dismiss the competing claims.
The Court rendered a decision in January 2003 denying these motions in all material respects. The company, Cantor, and MDC have all filed appeals from the trial courts order. While those appeals are pending, the discovery phase is proceeding.





|Item 6. |  | Exhibits and Reports on Form 8-K
|------- |  | --------------------------------



|ExhibitNumber |  | Document                                                                                                                           
|------------- |  | -----------------------------------------------------------------------------------------------------------------------------------
|              | 
|31.1          |  | Certifications by the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                            
|              | 
|31.2          |  | Certifications by the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                            
|              | 
|32.1          |  | Certifications by the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002





Reports on Form 8-K - The following reports were filed on Form 8-K in the third quarter of 2003.



Form 8-K, dated July 15, 2003, Dow Jones & Company Second Quarter 2003 Earnings Release



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SIGNATURE



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.



|                         |  |  |  | DOW JONES & COMPANY, INC. (Registrant)
|------------------------ |  |  |  | --------------------------------------
|                         |  |  | 
|Dated: November 14, 2003 |  |  |  | By:                                   
|                         |  |  |  |                                       



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