NEW YORK, Nov. 3, 2006 (PRIMEZONE) -- Dow Jones & Company (NYSE:DJ) announced today that it has finalized its third quarter 2006 results with the booking of a tax benefit of $89.4 million, or $1.07 per diluted share, for the planned use of $250.0 million of capital loss carryforwards to offset federal capital-gains taxes on the recently announced deal to sell six Ottaway community newspapers.
The Company reported its third quarter 2006 results in a press release on Oct. 18, 2006. As stated in that release, if the Company concluded prior to the filing of its third quarter 10-Q that it was more likely than not that it would use a portion of its capital loss carryforwards to offset federal taxes on the planned sale of up to six Ottaway newspapers, the Company would adjust the value of its deferred tax assets and increase its third quarter net income and earnings per share. As a result of entering into a definitive agreement on Oct. 27, 2006, to sell six Ottaway newspapers, the Company has concluded it is more likely than not that it will use $250 million of capital loss carryforwards to fully offset federal taxes on the gain on sale.
As a result, for the third quarter of 2006, reported net income was $105.4 million, or $1.26 per diluted share, compared to net income of $10.2 million, or 12 cents per diluted share, last year. Excluding special items and this special tax benefit, earnings per diluted share are unchanged from the Company's original report (11 cents per share in the third quarter 2006 compared to 12 cents per share in the third quarter 2005).
For additional information, please refer to the Company's third quarter 2006 Form 10-Q, filed today with the SEC.
Dow Jones & Company (NYSE:DJ) (dowjones.com) publishes The Wall Street Journal and its international and online editions, Barron's and the Far Eastern Economic Review, Dow Jones Newswires, Dow Jones Indexes, MarketWatch and the Ottaway group of community newspapers. Dow Jones is co-owner with Reuters Group of Factiva and with Hearst of SmartMoney. Dow Jones also provides news content to CNBC and radio stations in the U.S.
The Dow Jones & Company logo is available at http://www.primezone.com/newsroom/prs/?pkgid=2636
Information Relating To Forward-Looking Statements: Non-GAAP Reconciliation
This press release contains forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those anticipated including the risk that the contemplated sales of the Ottaway newspapers may not be consummated or may be delayed and that the Company may not be able to utilize its capital loss carryforwards from the proceeds thereof; and such risks as may be included from time to time in the Company's reports filed with the Securities and Exchange Commission and posted in the Investor Relations section of the Company's web site (www.dowjones.com). The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. This press release includes certain non-GAAP financial measures as defined under SEC rules. As required by SEC rules, we have attached to this press release a reconciliation of those measures to the most directly comparable GAAP measures.
(in millions, Three Months Ended September 30
except per ---------------------------------------------------
share amounts) 2006 2005
------------------------- ------------------------
Operating(a) Net EPS Operating(a) Net EPS
----------- ------ ----- ----------- ----- -----
Reported income $ 13.6 $105.4 $1.26 $ 9.4 $10.2 $ .12
Adjusted to
remove:
Included in
operating
income:
Severance (1.5) (0.9) (.01)
Included in
non-operating
income:
Contract
guarantee (0.9) (.01)
Included in
income
taxes:
Certain income
tax
matters 7.6 .09 1.1 .01
Capital loss
carryforward 89.4 1.07
------- ------- ----- ------ ------ -----
Adjusted income $ 15.1 $ 9.4(b) $.11 $ 9.4 $ 10.0 $ .12
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(a) Amounts exclude discontinued operations.
(b) The sum of the individual amounts does not equal total due to
rounding.