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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

For the fiscal year ended December 31, 2004

OR

For the transition period from              to             

Commission file number 1-7564

DOW JONES & COMPANY, INC.

(Exact name of registrant as specified in its charter)

200 LIBERTY STREET, NEW YORK, NEW YORK 10281

(Address of principal executive offices)(Zip Code)

Registrant’s telephone number, including area code: (212) 416-2000

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act:

Class B Common Stock $1.00 par value

(Title of class)

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 a check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).     YES  x    NO  ¨

Aggregate market value of common stock held by non-affiliates of the registrant at January 31, 2005 was approximately $1,993,000,000.

The number of shares outstanding of each of the registrant’s classes of common stock on January 31, 2005: 61,493,160 shares of Common Stock and 20,590,564 shares of Class B Common Stock.

DOCUMENTS INCORPORATED BY REFERENCE

Part III incorporates information from certain portions of the registrant’s definitive Proxy Statement for the 2005 annual meeting of stockholders to be filed with the Securities and Exchange Commission within 120 days after the close of the fiscal year.

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DOW JONES & COMPANY, INC.

FORM 10-K

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2004

INDEX

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PART I

ITEM 1. BUSINESS.

We are a provider of global business and financial news and information through newspapers, newswires, magazines, the Internet, indexes, television and radio. In addition to The Wall Street Journal and our international and online editions, we publish Barron’s, Dow Jones Newswires and Dow Jones Indexes. We also provide news and information of general interest to local communities through our Ottaway group of community newspapers throughout the U.S. We are co-owner with Reuters Group of Factiva, with Hearst of SmartMoney and with NBC Universal of the CNBC television operations throughout Asia and Europe. We also provide news content to CNBC and radio stations in the U.S.

We have determined the following three reportable segments based on the manner in which we manage our business: print publishing, electronic publishing and general-interest community newspapers. Over the three years ended December 2004, approximately 60% of our revenues have been derived from the print publishing segment, with the remaining 40% divided almost equally between our general-interest community newspapers and our electronic publishing segments. In addition, the Company reports certain administrative activities under the corporate segment. Financial information about operating segments and geographic areas is incorporated by reference to Note 13 to the financial statements of this report.

The Company’s principal executive offices are located at 200 Liberty Street, New York, New York, 10281.

The Company makes available all of its annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to such reports free of charge through its Internet Web site at www.dowjones.com. These reports are also available on the Securities and Exchange Commission’s Internet Web site at www.sec.gov.

EMPLOYEES

At December 31, 2004, the Company employed 7,143 full-time employees compared with 6,975 full-time employees at December 31, 2003 and 6,816 at December 31, 2002. The increase in full-time employees in 2004 was largely the result of acquisitions.

PRINT PUBLISHING

Print publishing, which is largely comprised of the global print editions of The Wall Street Journal, publishes business and financial news and information in the U.S., Europe, Asia and Latin America and on CNBC television. The Journal utilizes a global management structure with shared news flows and workforce and a global advertising customer base and pricing. Through a licensing agreement with NBC Universal, the Journal provides branding, news content and on-air expertise to CNBC as a further extension of The Wall Street Journal brand and the content it produces. Print publishing also includes our Barron’s weekly magazine.

Our overall performance in print publishing is largely dependent on the operating performance of the global Wall Street Journal (including its extended U.S. television brand and content) which in turn is largely dependent on B2B advertising revenue, particularly from the financial and technology sectors.

U.S. Publications

The Wall Street Journal, our flagship publication, is one of the country’s largest daily newspapers with average print circulation of 1,810,000 in 2004. The Journal’s three major national editions are printed at 17 printing plants located throughout the U.S. The Journal also sells regional advertising in 18 regional editions.

The Wall Street Journal has an overall daily print capacity of 96 pages, including 24 pages of color. In addition to its business coverage, the Journal also covers the “business of life” with its Personal Journal section which launched in 2002 and runs every Tuesday, Wednesday and Thursday, and Weekend Journal section, which debuted in 1998 and runs every Friday and includes pages devoted to travel, wine, sports, shopping, residential real estate and the arts. The Journal also publishes special reports at various times of the year on topics such as technology, personal finance and executive compensation, e-commerce and health and medicine as well as demographically targeted sections devoted to subjects of retirement and small business.

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In September 2004, we announced the September 2005 launch of the Weekend Edition of The Wall Street Journal, which is a key element of our 2005 to 2007 strategic plan. We expect the launch of the Weekend Edition will build off the success of our Weekend and Personal Journal sections in attracting more consumer-oriented advertisers and reducing our reliance over time on B2B financial and technology advertising. The Weekend Edition will be delivered to readers at home on the weekend, enabling advertisers to reach readers in the right place at the right time, which is highly conducive to influencing their consumer spending decisions.

The Journal reaches additional readers through The Wall Street Journal Sunday, which focuses on personal finance and careers and is published once a week in the business sections of local newspapers with combined circulation of about 10.7 million in more than 80 community newspapers.

The Journal production process employs electronic pagination and satellite transmission of page images to outlying printing plants to enable early delivery of fresher content to the majority of our readers.

The Wall Street Journal is delivered principally in three ways. Each business day, approximately 124,000 copies of The Wall Street Journal are sold at newsstands. Most home and office subscription deliveries are handled through our National Delivery Service, Inc. subsidiary which in 2004 provided early morning delivery to about 1.3 million, or 83%, of The Wall Street Journal’s subscribers each publishing day. The balance of The Wall Street Journal’s home and office deliveries is made by second class postal service.

Barron’s, the Dow Jones Business and Financial Weekly, is a weekly magazine with average circulation in 2004 of 299,000 that caters to financial professionals, individual investors and others interested in financial markets. Barron’s is printed in twelve of The Wall Street Journal’s 17 printing plants. It is delivered by second-class postal service and through National Delivery Service with about 60,000 newsstand copies sold each week.

The Wall Street Journal Classroom Edition is published nine times during the school year and is read by an estimated 750,000 students every month during the academic year in more than 5,300 middle-school and high-school classrooms throughout the U.S. Individuals, organizations and corporations sponsor more than one-third of all subscriptions and schools sponsor the remainder. The Wall Street Journal Campus Edition is included in college newspapers throughout the U.S. and includes the week’s top business news and feature stories.

International Publications

The Wall Street Journal Europe, which had an average circulation in 2004 of 87,000, is headquartered in Brussels, Belgium and printed in Belgium, Germany, Switzerland, Italy, Spain, the United Kingdom and Israel. It is available on the day of publication in continental Europe, the United Kingdom, and parts of the Middle East and North Africa. Starting in 2003, the content of the international editions of The Wall Street Journal added news and opinion articles from The Washington Post.

The Asian Wall Street Journal, which had an average circulation of 80,000 in 2004, is headquartered in Hong Kong and printed in Hong Kong, Singapore, Japan, Thailand, Malaysia, Taiwan, the Philippines, Korea and Indonesia. It has the largest advertising market share of any pan-regional business newspaper in Asia.

We also publish The Wall Street Journal Special Editions, which are a collection of Journal pages in local languages distributed as part of 36 newspapers in 34 countries. The Wall Street Journal Americas, serving Central and South America, is the centerpiece of the Special Editions published in Spanish and Portuguese in 18 leading Latin America newspapers.

In the fourth quarter of 2004, we announced that the Far Eastern Economic Review, a Hong Kong based newsweekly magazine, would change its format to a monthly periodical of issues and ideas largely written by Asian opinion leaders from the fields of politics, business and academics. The first issue of the Far Eastern Economic Review in its new format was published in December 2004. This repositioning resulted in a workforce reduction of approximately 80 employees and reduced costs by approximately $3 million.

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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, its related vertical sites, our consumer electronic licensing and radio businesses and since its acquisition in January 2005, MarketWatch, which includes internet, licensing, radio and newswires operations. Revenues in the electronic publishing segment are mainly subscription based and comprised about 20% of our revenues over the three years ended in 2004.

Dow Jones Newswires

Dow Jones Newswires is the premier provider of real-time, comprehensive business news and information for financial professionals around the world. Its news is displayed on approximately 298,000 English-language terminals worldwide providing users with real-time information on equity, fixed income, foreign exchange, commodities and energy markets. Dow Jones Newswires has a dedicated staff of more than 900 journalists in addition to drawing on the global resources of The Wall Street Journal and the Associated Press (“AP”). Newswires also distributes selected portions of its content to the retail customers of on-line brokers.

Dow Jones News Service is North America’s leading source of business and financial news on U.S. and Canadian companies and markets for brokerage firms, banks, investment companies and other businesses. Capital Markets Report covers global debt and money markets. Corporate Filings Alert provides real-time news covering SEC filings, bankruptcy courts and government agencies.

The Dow Jones Economic Report and the Dow Jones Financial Wire, which are produced outside the United States, provide international economic, business and financial news to subscribers in 71 countries. In addition to these two broad international newswires, Newswires publishes specialized wires dedicated to the coverage of European and Asian equities, banking and foreign exchange markets as well as the World Equities Report, which serves U.S. institutions investing in international markets.

Dow Jones Newswires also publishes on its own or with local partners, in Chinese, Japanese, Spanish, French, Portuguese, Dutch, Italian, German and Russian. In April 2004, we acquired the remaining interest in the news operations of Vereinigte Wirtschaftsdienste GmbH (“vwd”), a German local-language news service, for $12.1 million. Previously, we were a minority shareholder in vwd.

On March 19, 2004, we acquired Alternative Investor Group for $85 million, a company serving the private equity and venture capital markets with newsletters, conferences and databases. Alternative Investor was integrated with Dow Jones Newswires, its newsletters division and Technologic Partners business, which we acquired in late 2003, to form Dow Jones Financial Information Services.

In 2004, Dow Jones Newswires won many accolades including Technology Journalist of the Year, Excellence in Wire Service Reporting and a Codie Award from the Software and Information Industry Association. Also, for the second year in a row, Dow Jones Newswires was named Inside Market Data’s News Provider of the Year.

Consumer Electronic Publishing

The Wall Street Journal Online (“WSJ.com”), introduced in 1996, is a paid online subscription site that offers continuously updated coverage of business news both in the U.S. and abroad. WSJ.com content comprises the global resources of The Wall Street Journal and Dow Jones Newswires as well as its own dedicated journalists. In addition to continuously updated exclusive real-time news and scoops, subscribers have access to the full text of each day’s global editions of the Journal, more than 30,000 in-depth company background reports, an archive of Journal and Dow Jones news articles, and personalized news and stock portfolios. WSJ.com had 712,000 subscribers at the end of 2004 and was the largest paid subscription news site on the Internet.

On January 21, 2005, we completed the acquisition of MarketWatch for a purchase price of approximately $538 million, including transaction costs. MarketWatch is a leading provider of business news, financial information and analytical tools and operates two award-winning Web sites: MarketWatch.com and BigCharts.com. These free, advertising-supported Web sites serve approximately seven million unique visitors per month with timely market news and information. MarketWatch also operates the MarketWatch Information Services group, which is a leading licensor of market news, data, investment analysis tools and other online applications to financial services firms, media companies, and corporations.

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We believe that the MarketWatch acquisition will complement The Wall Street Journal Online network, which provides premium business news to about three million unique visitors per month. By combining the traffic of The Wall Street Journal network of Web sites and MarketWatch, our Web sites are expected to have close to nine million unduplicated unique visitors per month. We also expect that the licensing businesses of MarketWatch will provide additional assets, such as online charting and other tools, which will extend the reach of our business-to-business licensing operations.

Other consumer sites in The Wall Street Journal Network include OpinionJournal.com, which provides commentary on global issues from The Wall Street Journal editorial page; CareerJournal.com, which gives career guidance and job-search services for executives; StartupJournal.com, the premier Web site for entrepreneurs seeking guidance on starting or buying a business or franchise; CollegeJournal.com, which provides guidance and job-search services for future business leaders; and RealEstateJournal.com, a comprehensive guide to commercial and residential property.

Consumer Electronic Publishing also includes our radio/audio business and our consumer electronic licensing division, which offers electronic rights to use Dow Jones’ content. The Wall Street Journal Radio Network produces and distributes late-breaking business reports during the week to 229 radio stations across the country, covering 92% of the population.

Dow Jones Indexes/Ventures

In 1997, we began licensing the Dow Jones Industrial Averages as well as other indexes as the basis for trading options, futures, unit trusts, annuities, exchange traded funds, mutual funds, derivatives and specialized structured products. Dow Jones Indexes also maintains a variety of specialty indexes, such as the Dow Jones-AIG Commodity Index, the Dow Jones Select Dividend Index and the Dow Jones Islamic Market Indexes. Dow Jones Indexes now offers more than 4,000 indexes. During 2004, Dow Jones Indexes launched a new family of hedge fund indexes and also partnered with Wilshire Associates to provide the Dow Jones Wilshire index family, which features the Dow Jones Wilshire 5000 and is expanding to include a complete global family of country, region, sector, cap-range and style indexes.

Dow Jones Ventures includes our reprints/permissions. The reprints/permissions business sells print or electronic reprints of The Wall Street Journal and Barron’s stories.

COMMUNITY NEWSPAPERS

Community newspapers consists of our wholly-owned Ottaway Newspapers, Inc. subsidiary. Revenues in this segment are largely dependent on local consumer-based advertising revenue and comprised about 20% of our revenues over the past three years.

Our Ottaway community newspapers segment serves relatively small, self-contained communities, outside the heavy competitive pressures of large metropolitan papers and other media. In 2002, we divested five low-growth papers, non-strategically located papers, which provided after-tax proceeds of $235 million and utilized $190 million of capital loss carryforwards. In 2003, we acquired the faster growing, more strategically located The Record of Stockton, California.

Ottaway publications now include 15 general-interest dailies, published in nine states: California, Connecticut, Maine, Massachusetts, Michigan, New Hampshire, New York, Oregon and Pennsylvania. Average 2004 circulation of the dailies was approximately 436,000; Sunday circulation for our newspapers was approximately 483,000. Ottaway also publishes more than 30 weekly newspapers and “shoppers.” The primary delivery method for the newspapers is by carrier delivery.

STRATEGIC ALLIANCES (Included in Equity in Earnings (Losses) of Associated Companies)

Dow Jones Reuters Business Interactive LLC (Factiva) is a 50/50 joint venture launched in mid-1999 with Reuters Group Plc. Factiva is the number one provider of global news and business information to corporate end users and holds the number two position, based on revenue, in the archival business news and information marketplace. Factiva’s business information sources include exclusive third party access to Dow Jones and Reuters Newswires and The Wall Street Journal, plus nearly 9,000 sources from around the world. These sources provide current news, historical articles, local-language articles, market research and investment analyst reports, and stock quotes.

CNBC Europe and CNBC Asia Pacific are 50/50 joint ventures between Dow Jones and NBC Universal (NBC). In early 1998, NBC and Dow Jones re-launched their business information channels in Europe and Asia Pacific as CNBC, a service of NBC and Dow Jones. These overseas networks reach more than 120 million households on a full-time basis.

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SmartMoney is a 50/50 joint venture with Hearst Corp. SmartMoney magazine, The Wall Street Journal Magazine of Personal Business, featuring sections on personal investing, spending and saving money, has circulation of more than 800,000 copies. SmartMoney also includes SmartMoney.com and SmartMoney Custom Solutions, a custom publishing business.

Vedomosti, a joint venture owned equally by Dow Jones, Pearson PLC and Independent Media, was introduced in 1999. Vedomosti, considered the only independent business newspaper in Russia, is published Monday through Friday. Circulation reached 66,000 in 2004, with original content created by 80 local reporters and editors and content from The Wall Street Journal and The Financial Times translated into Russian.

STOXX, Ltd. is a joint venture owned equally by Dow Jones and the leading exchanges of Germany (Deutsche Borse) and Switzerland (Swiss Exchange).

In January 2004, Dow Jones and Bennett Coleman & Company Ltd., publisher of the Times of India and the Economic Times, entered into an agreement on a new joint venture to publish The Wall Street Journal for India. Subject to Indian government approval, Dow Jones will own 26% (maximum foreign ownership permitted in India) and Bennett Coleman would own the remaining 74% and launch The Wall Street Journal for India in 2005, using the Journal’s global content.

In December 2003, we and the von Holtzbrinck Group exchanged equity shareholdings so as to increase our interest in The Wall Street Journal Europe to 90% from 51% and reduce our ownership of the von Holtzbrinck Group’s business daily, Handelsblatt, to 10% from 22%, with news and advertising relationships continuing. The Company and the von Holtzbrinck Group are in negotiations to further exchange, in 2005, our cross shareholdings so as to return the Company to full ownership of The Wall Street Journal Europe and of its 41% interest in HB-Dow Jones S.A. and to eliminate the Company’s 10% ownership of Handelsblatt.

Other equity investments include HB-Dow Jones S.A., a part-owner of Economia, a publishing company in the Czech Republic; CareerCast, Inc., a leading supplier of data services to employers and online career sites; and F.F. Soucy Inc. & Partners, L.P., a newsprint mill in Canada.

RAW MATERIALS

The primary raw material used by the Company is newsprint. In 2004, approximately 219,000 metric tons were consumed. Newsprint was purchased principally from eight suppliers. The Company is a limited partner in F.F. Soucy, Inc. & Partners, L.P., Riviere du Loup, Quebec, Canada. F.F. Soucy furnished 18% of total newsprint requirements in 2004. The Company has signed long-term contracts with certain newsprint suppliers, including F.F. Soucy, for a substantial portion of its annual newsprint requirements. For many years the available sources of newsprint have been adequate to supply the Company’s needs.

RESEARCH AND DEVELOPMENT

Research and development expenses, which primarily relate to software development for various operations of the Company, were $32 million in 2004, $29.7 million in 2003 and $31.2 million in 2002.

COMPETITION

Dow Jones print publishing businesses compete with a wide range of information providers in many different channels of distribution. All metropolitan general interest newspapers and many small city or suburban papers carry business and financial content as do many Internet-based services as well as television and radio. In addition, specialized magazines in the business and financial field, as well as general news magazines publish substantial amounts of business-related material. The Journal also competes for advertising with non-business publications offering audiences of similar demographic quality, such as technology and lifestyle magazines. Nearly all of these services seek audiences and seek to sell advertising, making them competitive with Dow Jones’ publications and services.

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The Company’s newswires compete with other global financial newswires including Reuters Group PLC, Bloomberg L.P. and other organizations that publish financial news. The Company’s newswires maintain a stronger market position in North America than internationally.

Consumer Electronic Publishing competes with other Web sites that offer continuously updated coverage of business news as well as licensing of electronic content. Unlike WSJ.com, competitors do not, for the most part, utilize a full online paid subscription model, and most remain free sites. Competitors include FT.com, New York Times Digital, TheStreet.com, Bloomberg, Forbes.com, Yahoo!Finance, CNET, AOL/CNNfn and MSNMoney/CNBC.

Dow Jones’ index-licensing business competes with various organizations that develop and license indexes, including Standard & Poor’s, The Financial Times, and Morgan Stanley/Capital International.

Ottaway Newspapers competes with the metropolitan general-interest newspapers, and other community newspapers as well as radio and television stations in their respective local markets.

Factiva competes with various business information service providers, including Dialog Corp., a division of The Thomson Corporation; and Lexis-Nexis, a division of Reed Elsevier Plc. Factiva also competes with various online, Web-based information services.

The Company’s international television ventures compete with various international satellite networks that not only specialize in general news but also provide business programming. Also, individual television stations, networks and cable channels in each country broadcast programming that competes for advertising and the attention of viewers in their respective markets.

ITEM 2. PROPERTIES.

Dow Jones operates 17 plants with an aggregate of approximately one million square feet for the printing of its domestic publications. Printing plants are located in Palo Alto and Riverside, California; Denver, Colorado; Orlando, Florida; LaGrange, Georgia; Naperville and Highland, Illinois; Des Moines, Iowa; White Oak, Maryland; Chicopee, Massachusetts; South Brunswick, New Jersey; Charlotte, North Carolina; Bowling Green, Ohio; Sharon, Pennsylvania; Dallas and Beaumont, Texas; and Federal Way, Washington. All plants include office space. All are owned in fee except the Palo Alto, California, plant, which is located on 8.5 acres under a lease to Dow Jones for 50 years, expiring in 2015.

Other facilities, owned in fee with a total of approximately one million square feet, house news, sales, administrative, technology and operational staff. These facilities are located in South Brunswick, New Jersey and Chicopee Falls, Massachusetts. The Company has leased about 200,000 square feet of its office space in South Brunswick to other companies.

Dow Jones occupies two major leased facilities in New York City, including leasing about 315,000 square feet downtown at the World Financial Center, which primarily houses editorial and executive staff, and 98,000 square feet at a separate midtown location for advertising sales staff. The Company also leases other business and editorial offices in numerous locations around the world, including 92,000 square feet in Jersey City, New Jersey, 42,000 square feet in three locations in London and 58,000 square feet in three locations in Hong Kong.

Ottaway Newspapers operates in 21 locations, including a 24,000 square foot administrative headquarters in Campbell Hall, New York. These facilities are located in Santa Cruz and Stockton, California; Danbury, Connecticut; Kennebunk and York, Maine; Hyannis, New Bedford and Nantucket, Massachusetts; Traverse City, Michigan; Stratham and Portsmouth, New Hampshire; Middletown, Oneonta, and Plattsburgh, New York; Medford and Ashland, Oregon; and Stroudsburg, Danville and Sunbury, Pennsylvania. Local printing facilities, which include office space in certain locations, total approximately 900,000 square feet. All of these facilities are owned in fee, with the exception of the Maine facilities, which are leased.

The Company believes that its current facilities are suitable and adequate, well maintained and in good condition. Older facilities have been modernized and expanded to meet present and anticipated needs.

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ITEM 3. LEGAL PROCEEDINGS.

On November 13, 2001, the Company instituted a lawsuit in the Supreme Court of the State of New York against Market Data Corp. (MDC) and Cantor Fitzgerald Securities (together with its affiliates, Cantor) seeking a declaratory judgment with respect to the Company’s obligations, if any, under a guarantee issued to MDC and Cantor. The guarantee relates to certain annual “minimum payments” owed by Telerate under certain conditions 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 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 after Telerate stopped receiving the government securities data from Cantor and MDC. MDC has asserted counterclaims demanding payment of $10.2 million (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.

The trial court in January 2003 denied motions by each of the parties that their own claims for relief be granted and that competing claims be dismissed. Appeals from those decisions were not pursued, and discovery has concluded. Dispositive motions are being briefed, with argument before the court scheduled for the first quarter of 2005. The trial is currently scheduled to begin in June 2005.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

Not applicable.

Executive Officers of the Registrant

Each executive officer is elected annually to serve at the pleasure of the Board of Directors.

Mr. Zannino, Mr. Vieth and Mr. Stern have each been employed by the Company for fewer than five years.

Peter R. Kann, age 62, Chairman of the Board since July 1991, Chief Executive Officer since January 1991, served as Publisher of The Wall Street Journal from January 1989 to July 2002, President from July 1989 to July 1991 and Chief Operating Officer from July 1989 to December 1990, Executive Vice President from 1985 to 1989 and Associate Publisher of The Wall Street Journal from 1979 to 1988. Mr. Kann, who is the spouse of Ms. House, joined the Company in 1964.

Richard F. Zannino, age 46, Chief Operating Officer since July 2002, Executive Vice President since joining the Company in February 2001 and served as Chief Financial Officer from February 2001 until July 2002. Before joining Dow Jones, Mr. Zannino was Executive Vice President of Liz Claiborne, Inc., having joined in 1998 as Senior Vice President, Finance & Administration and Chief Financial Officer. Previously, Mr. Zannino had worked briefly as Chief Financial Officer of General Signal Corporation, prior to that company’s sale and before that for five years at Saks Fifth Avenue, ultimately as Executive Vice President and Chief Financial Officer.

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Executive Officers of the Registrant (continued)

Joseph A. Stern, age 55, appointed General Counsel, Vice President and Secretary beginning in February 2005, to replace Peter G. Skinner who retired as Executive Vice President, General Counsel and Secretary as of December 31, 2004. Before joining Dow Jones, Mr. Stern was a partner at Fried, Frank, Harris, Shriver & Jacobson LLP, the Company’s primary outside corporate law firm and has advised the Company on a variety of legal issues. Mr. Stern joined Fried Frank in 1979 and became a partner there in 1984.

L. Gordon Crovitz, age 46, Senior Vice President and President, Electronic Publishing and Senior Vice President/Electronic Publishing since October 1998, Vice President/Planning and Development from November 1997 to October 1998. Managing Director for Telerate’s Asia/Pacific operation from September 1996 to November 1997. Editor and Publisher of Review Publishing Company from July 1993 to September 1996. Mr. Crovitz joined the Company in 1981.

Christopher W. Vieth, age 40, Vice President and Chief Financial Officer since July 2002 and Vice President, Finance from March 2001 to July 2002 and Corporate Controller after joining the Company in July 2000 up until July 2002. Prior to joining Dow Jones, Mr. Vieth had been Vice President and Corporate Controller of Barnes and Noble, Inc. since May 1999. He joined Barnes and Noble in December 1995 as Director of Finance. From 1987 through 1995, Mr. Vieth worked at Amerada Hess Corporation.

Karen House, age 56, Senior Vice President and Publisher of all print editions of The Wall Street Journal since July 2002 and President of Dow Jones’ International Group from January 1995 to July 2002, Vice President of the International Group from March 1989 to January 1995. Ms. House, who is the spouse of Mr. Kann, joined the Company in 1974.

Paul Steiger, age 61, Managing Editor of The Wall Street Journal since June 1991 and Vice President of The Wall Street Journal since May 1992, Deputy Managing Editor from April 1985 to June 1991 and Assistant Managing Editor from 1983 to April 1985. Mr. Steiger joined the Company in 1966.

PART II.

ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

The Company’s common stock is listed on the New York Stock Exchange. The class B common stock is not traded. The approximate number of stockholders of record as of January 31, 2005 was 10,673 for common stock and 3,670 for class B common stock. The Company paid $1.00 per share in dividends in 2004 and in 2003.

Issuer Purchases of Equity Securities

In 1998, the Company’s board of directors authorized the repurchase of $800 million of the Company’s common stock and in September 2000 authorized the repurchase of an additional $500 million of the Company’s common stock. As of December 31, 2004, approximately $326.4 million remained under board authorization for share repurchases. The Company did not repurchase any shares of its common stock in 2004.

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ITEM 6. SELECTED FINANCIAL DATA.

See Management’s Discussion and Analysis of Financial Condition and Results of Operations for a discussion of factors that affect the comparability of the information reflected in this table. The following table shows selected financial data for the most recent five years:

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ITEM 7. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Overview

Dow Jones & Company is a provider of global business and financial news and information through newspapers, newswires, magazines, the Internet, indexes, television and radio. In addition, the Company owns general-interest community newspapers throughout the U.S. Over the three years ended in December 2004, approximately 60% of the Company’s revenues were derived from the print publishing segment, which is largely comprised of the global editions of The Wall Street Journal. The Company’s overall financial results are largely dependent on the operating performance of The Wall Street Journal, which, to a significant extent, is dependent upon business-to-business (B2B) advertising placed in its publications, particularly from the financial and technology sectors. The remaining 40% of total revenues are split almost equally between our general-interest community newspapers segment and our electronic publishing segment, which includes newswires, WSJ Online, indexes and other electronic operations.

We began to see a modest recovery in the global B2B advertising environment beginning in the third quarter 2003 which carried into the first two quarters of 2004. This advertising recovery stalled in the last half of 2004 and remains choppy in part due to continued weakness in B2B technology advertising and volatile financial advertising. For the full year 2004, advertising linage at The Wall Street Journal declined 0.5%, which resulted in a 6% increase in ad revenue at print publishing as the lower volume was more than offset by higher advertising rates. We posted gains in revenue, operating profits and margins in 2004 driven by improvements at all of our business segments. In addition, we are continuing to control costs, improve the quality of our products, sharpen our execution and invest in initiatives to fuel our future growth. These future growth initiatives include our planned launch in September 2005 of the Weekend Edition of the Journal and our January 2005 acquisition of MarketWatch, both of which we believe will help reduce our reliance over time on B2B financial and technology advertising.

In September 2004, we announced the September 2005 launch of the Weekend Edition of the Journal, which will be a key element of our 2005 to 2007 strategic plan. We expect the launch of the Weekend Edition will build off the success of our Weekend Journal and Personal Journal sections in growing and diversifying our advertising customer base by attracting more consumer-oriented advertisers as revenue from the Weekend Edition is expected to mainly come from consumer advertising. We have a uniquely influential and affluent audience that not only makes large B2B spending decisions but also spends heavily on personal consumption items. The Weekend Edition will enable advertisers to reach these readers in the right place at the right time – at home on the weekend – which is highly conducive to influencing their consumer spending decisions. While it is expected that this initiative will be dilutive to earnings by about 15 cents per share in 2005 and more than that in 2006 based on its first full year of operation, we believe that the Weekend Edition will be a major driver of long-term growth in revenue and earnings.

On January 21, 2005, we completed the acquisition of MarketWatch, Inc. (“MarketWatch”) for a purchase price of approximately $538 million, including direct transaction costs. MarketWatch is a leading provider of business news, financial information and analytical tools and operates two award-winning Web sites: MarketWatch.com and BigCharts.com. These free, advertising-supported sites serve approximately seven million unique visitors per month with timely market news and information. MarketWatch also operates the MarketWatch Information Services group, which is a leading licensor of market news, data, investment analysis tools and other online applications to financial services firms, media companies, and corporations. The Company intends to integrate MarketWatch into the Consumer Electronic Publishing business. The Company believes that the MarketWatch merger will complement The Wall Street Journal Online network, which provides premium business news to about three million unique visitors per month. By combining the traffic of The Wall Street Journal network of sites and MarketWatch, the Web sites are expected to have close to nine million unduplicated unique visitors per month. We expect this acquisition will be dilutive to earnings by five cents per share in 2005, reflecting higher interest and amortization costs and then accretive in our first full year of ownership in 2006, when our integration benefits are expected to take full effect.

2004 marked the final year of Business Now, our three year strategic plan, which was launched in 2002 and aimed at accelerating growth and modestly reducing cyclicality by improving operational execution and enhancing existing products and creating new ones to reach new customers, markets and channels. The cornerstone of Business Now was Today’s Journal, a package of content, organization and design changes to The Wall Street Journal that also included a new Personal Journal section. Launched in April 2002, Today’s Journal also increased total page capacity by 20% and tripled color page capacity to 24 pages a day. Today’s Journal has produced strong positive reader and advertiser response. The expanded color advertising capacity, which sells at a 27% premium to black and white advertising, drove a 20% increase in color advertising pages in 2004, to approximately eight pages per day. Since the launch of this new color capacity in January 2002, color advertising pages more than doubled. We also successfully used Today’s Journal to increase our consumer advertising to help reduce our reliance on B2B advertising. Advertising revenue in our targeted consumer categories of auto, travel, health care and luxury goods was up 14% in 2004 and 35% since 2001.

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The Company’s electronic publishing segment implemented a number of Business Now initiatives to improve its products, profits and margins as well as reduce overall Company reliance on B2B advertising. On March 19, 2004, the Company acquired Alternative Investor Group for $85 million. Alternative Investor has been integrated with our newsletters operations and the recently acquired Technologic Partners business. This newly formed business provides newsletters, databases and conferences primarily to the venture capital and private-equity markets. On April 2, 2004, the Company acquired VWD, a German newswires business, for a net price of $5.4 million, expanding on Dow Jones Newswires’ local language newswire businesses. Both of these businesses will be operated as part of Dow Jones Newswires within our electronic publishing segment. In electronic publishing we have also driven significant organic growth in revenue and earnings at our Consumer Electronic Publishing and Dow Jones Indexes businesses.

Our Ottaway community newspapers segment serves relatively small, self-contained communities, outside the heavy competitive pressures of large metropolitan papers and other media. Ottaway’s strong and stable cash flow over the years has helped us weather a particularly harsh B2B ad environment in our print publishing segment. As part of our Business Now three-year plan to enhance our Ottaway property portfolio, we divested five low-growth papers in 2002, which provided after-tax proceeds of $235 million and utilized $190 million of capital loss carryforwards. The second phase of this plan was to acquire more strategic and financially attractive properties, which included the acquisitions in 2003 of The Record of Stockton, California and smaller papers in late 2002.

Finally, we continue to improve the quality and breadth of our products and services. In 2004, we have won a number of awards including two Pulitzer prizes and a number of Loeb awards for the Journal. For the second year in a row, Dow Jones Newswires was named Inside Market Data’s News Provider of the Year and won its first ever Codie Award and the Online Journal won two Codie Awards.

Consolidated Results of Operations

2004 Compared to 2003 - Consolidated

Net Income

Net income in 2004 was $99.5 million, or $1.21 per diluted share, compared with 2003 earnings of $170.6 million, or $2.08 per share (all “per share” amounts included herein are based on reported net income and use diluted weighted-average shares outstanding). Earnings per share in 2004 included certain items affecting comparisons but taken together had no effect on earnings per share in 2004, while 2003 included certain items affecting comparisons that netted to a gain of $1.12 per share. These items are detailed further beginning on page 24.

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Revenues

Revenues in 2004 increased $123 million, or 7.9%, to $1.7 billion. On a “same property” basis, meaning excluding properties divested or acquired in the past 12 months, total revenue was up 4.9%. Advertising revenue was up 8.5% and, on a same property basis, increased 7.1%, primarily reflecting strong gains in advertising rates at the U.S. Journal and volume and rate gains at our community newspapers. Information services revenues were up 15% and, on a same property basis, increased 5.2%, reflecting strong organic growth at Consumer Electronic Publishing and Dow Jones Indexes/Ventures. Circulation and other revenue were up 1.7% and, on a same property basis, decreased slightly.

Operating Expenses

Operating expenses in 2004 increased $103.7 million, or 7.4%, to $1.5 billion. Just over one percentage point of the increase was due to the fact that 2003 expenses were reduced by an $18.4 million gain on the settlement of a business interruption insurance claim, while the remaining increase reflected incremental costs from newly acquired properties (about three percentage points), and the balance due to increases in employee compensation, newsprint usage and prices, and unfavorable changes in foreign currency exchange. Newsprint expense, on a same property basis, increased 8.5% as a result of a 6.5% increase in newsprint prices and a 1.9% increase in consumption. The number of full-time employees at December 31, 2004 was 7,143, up 2.4% from December 31, 2003, primarily reflecting additional employees from acquisitions.

Operating Income

Operating income in 2004 was $162.2 million (9.7% of revenues), up $19.3 million, or 13.5%, from 2003 operating income of $142.9 million (9.2% of revenues). The increase in operating income reflected 33% growth in operating income at our business segments, partially offset by the insurance gain in 2003, which did not recur in 2004.

Non-operating (Loss)/Income

Non-operating losses totaled $4 million in 2004 compared with non-operating income of $79.4 million in 2003. Non-operating income in 2003 included a gain of $59.8 million related to the resolution of a loss contingency related to the sale of our former Telerate subsidiary, $6.7 million of interest income related to an IRS tax refund and a gain of $18.7 million from a non-monetary exchange of interests in Wall Street Journal Europe and Handelsblatt, net of a $9.5 million charge related to the accretion of discount on a contract guarantee, while 2004 included a $6.9 million charge related to the accretion of discount on the contract guarantee, net of a $3.3 million gain on the disposition of an investment. Please see page 24 for additional information on these items.

2003 Compared to 2002 - Consolidated

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Net Income

Net income in 2003 was $170.6 million, or $2.08 per share, compared with 2002 net income of $201.5 million, or $2.40 per share. Earnings per share included certain items affecting comparisons, which netted to a gain of $1.12 per share in 2003 and a gain of $1.66 per share in 2002. These items are detailed further beginning on page 24.

Revenues

Revenues in 2003 declined $10.7 million, or 0.7%, to $1.55 billion primarily as a result of a decline in print publishing revenues. On a same-property basis, meaning excluding properties divested or acquired in the past 12 months, total revenue was down 1.1%, with advertising revenue down 1.7%. Information services revenue increased $5.6 million, or 2%, as growth at both Consumer Electronic Publishing and Dow Jones Indexes/Ventures was somewhat offset by declines in Newswires revenue. Circulation and other revenue was down 2.6%. On a same-property basis, circulation and other revenue declined 2.1% reflecting lower circulation revenue.

Operating Expenses

Operating expenses in 2003 were down $78.5 million, or 5.3%, to $1.41 billion. The reduction in expenses reflected cost-saving initiatives ($24 million); a favorable comparison ($42 million) as 2003 operating expenses included a gain on the settlement of a business interruption insurance claim, while 2002 included restructuring charges; and lower Today’s Journal costs, predominantly launch marketing spent in 2002 ($18 million). These reductions in costs were slightly offset by a net increase in expenses as a result of acquired/divested community newspapers ($5 million). On a same-property basis, newsprint expense increased a modest 0.7%, as a result of a 9.9% increase in newsprint prices and a decline in consumption of 8.4%. The number of full-time employees at December 31, 2003, was 6,975, up 2.3% from 2002, primarily reflecting the additional employees from the acquisition of The Record of Stockton, California in 2003.

Operating Income

Operating income in 2003 was $142.9 million (9.2% of revenues), up $67.8 million, or 90%, from $75.1 million (4.8% of revenues) in 2002. Contributing to the improvement were the gain on the settlement of the business interruption insurance claim, a favorable comparison to the restructuring charge in 2002, and improved results at all of the Company’s business segments.

Non-operating (Loss)/Income

Non-operating income totaled $79.4 million in 2003 compared with non-operating income of $190.2 million in 2002. Non-operating income in 2003 included a gain of $59.8 million related to the resolution of a loss contingency related to the sale of our former Telerate subsidiary, $6.7 million of interest income related to an IRS tax refund and a gain of $18.7 million from a non-monetary exchange of interests in Wall Street Journal Europe and Handelsblatt, net of a $9.5 million charge related to the accretion of discount on a contract guarantee, while non-operating income in 2002 included $197.9 million gain from the sale of businesses, net of a $11.9 million charge related to the accretion of discount on a contract guarantee. Please see page 24 for additional information on these items.

Segment Data

A summary of results of operations for each of the Company’s principal business segments as well as additional financial data is displayed in Note 13 to the financial statements. Segment data excludes restructuring charges and certain September 11-related items as management evaluates segment results exclusive of these items. Please refer to page 24 for further explanation of these items.

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.

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Print Publishing

Print publishing, which is largely comprised of the global editions of The Wall Street Journal, publishes business and financial content world-wide. This content is published primarily in the U.S., Europe, Asia and Latin America editions of The Wall Street Journal and on 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, sales force and pricing. U.S. television, which represents a licensing agreement with NBC Universal to provide branding, news content and on-air expertise to CNBC, is a further extension of the Journal 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. The Company also includes the operations of Barron’s within print publishing instead of reporting them separately because of their relative immateriality to the Company’s results on a consolidated basis and because Barron’s shares services with and its operations are similar to the global Journal.

2004 Compared to 2003 – Print Publishing

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Revenues

Print publishing revenues for 2004 increased $33.4 million, or 3.6%, to $948.8 million, reflecting advertising revenue gains at the U.S. publications.

U.S. print publication revenue increased $33.4 million, or 4%, to $867 million. U.S. print publication advertising revenue increased $36.3 million, or 6.4%, to $606.6 million, despite a 0.5% decrease in advertising linage at The Wall Street Journal as a result of higher ad yield (or revenue per page). General advertising, which represented about 43% of total U.S. Wall Street Journal linage, increased 2.5%, which combined with higher rates yielded an increase in ad revenue of 11% in 2004. The increase in general ad volume was driven by a 4% increase in consumer advertising linage and a 13% increase in consumer ad revenue, with gains in luxury and pharmaceuticals advertising, partially offset by a decline in auto advertising. Financial advertising, which accounted for 18% of total Journal linage, increased 7% with ad revenue up 15% in 2004. Financial ad volume improved as a result of strong gains in wholesale advertising coupled with increases in retail mutual funds advertising partially offset by weakness in banks and savings and loan advertising. Technology advertising, which represented 15% of total U.S. Journal linage, fell 24.1% while ad revenue fell 18% as ad rates improved despite softness in nearly all technology categories. Classified and other advertising linage, which represented about 24% of total U.S. Journal linage, increased 8.9% while ad revenue increased about 12%, driven by strong increases in real estate advertising coupled with increases in classified advertising. Color advertising pages increased 20%, and color premium revenue was up 34%.

Circulation and other revenue for U.S. print publications decreased $2.9 million, or 1.1%, to $260.4 million in part due to lower contractual printing for third parties and slightly lower circulation revenue reflecting somewhat more discounted rates. Average circulation for 2004 for The Wall Street Journal was 1,810,000 compared with circulation of 1,792,000 in 2003. Barron’s average circulation was 299,000 in 2004 compared with 297,000 in 2003.

Revenues at our international publications were flat, as revenue increases at the international editions of the Journal were offset by revenue declines at the Far Eastern Economic Review (FEER), largely due to repositioning of their operations in the fourth quarter of 2004 from a weekly magazine to a monthly publication. International print publication advertising revenues increased $1 million, or 2%, to $48.6 million, as gains in advertising rates were partially offset by a decrease in advertising volume at The Asian Wall Street Journal and The Wall Street Journal Europe and the lower revenue from FEER. International print circulation and other revenues decreased $1 million, or 2.8%, to $33.2 million, in part due to lower conferences revenue and circulation revenue at FEER. Combined average circulation for the International Journals was 167,000 in 2004 compared with 168,000 in 2003.

Expenses

Print publishing expenses in 2004 were held to a $10 million, or 1.1%, increase to $917.3 million, as modest growth in employee compensation and higher newsprint costs were mitigated by lower costs related to the repositioning of FEER operations and lower depreciation expense. Newsprint expense was up 8% as a result of a 6% increase in newsprint prices coupled with a 1.9% increase in consumption.

Operating Income

Print publishing operating income in 2004 was $31.5 million (3.3% of revenues) an improvement of $23.4 million compared with operating income of $8.1 million (0.9% of revenues) in 2003 as increased profits at the U.S. Journal and U.S television were partially offset by higher losses overseas, in part due to unfavorable foreign currency translation costs.

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2003 Compared to 2002 – Print Publishing

Revenues

In 2003, print publishing revenue fell 3.5%, or $33.4 million, to $915.5 million. U.S. print publication revenue fell $24.3 million, or 2.8%, to $833.7 million, largely reflecting a decline in advertising volume and lower circulation revenue at The Wall Street Journal and at Barron’s. U.S. advertising revenue declined 2.6%, to $570.4 million, on lower advertising volume at the U.S. Journal and Barron’s. While advertising volume at the U.S. Journal was down 1.3% for the year, advertising volume began to strengthen in the second half of 2003 (up 7.7% in total) and in the fourth quarter of 2003 the U.S. Journal’s advertising linage increased across all of its major ad categories for the first time since the second quarter of 2000.

General advertising linage, which represented 42% of 2003 total U.S. Wall Street Journal linage, was down 0.6% in 2003, largely reflecting declines in public utility advertising offset by increases in passenger travel, pharmaceuticals and insurance advertising. Technology advertising, which represented 20% of total 2003 Journal linage, fell 2.7% in 2003, despite gains of 13% in the latter half of the year. The year-over-year decrease in technology advertising was the result of declines in personal computer advertising, B2B e-commerce advertising and hardware advertising, partially offset by improvements in software and communications advertising. Financial advertising, which represented 17% of total 2003 Journal linage, fell 15.8% in 2003, primarily resulting from declines in investment advisory and tombstone advertising somewhat offset by an increase in broker advertising. Despite the decline for the full year, financial advertising began to show positive results as fourth quarter ad linage increased 7%. Classified advertising, which represented the remaining 21% of linage, increased 14.1% in 2003, due to improvements in real estate advertising and other classified advertising. Color advertising, which is billed at a premium, was up 28% over 2002.

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Circulation and other revenue for U.S. publications decreased $8.8 million, or 3.2%, to $263.3 million in 2003. Average circulation for The Wall Street Journal was 1,792,000 in 2003 compared with 1,817,000 in 2002. Barron’s average annual circulation was 297,000 in 2003 compared with 295,000 in 2002. The decline in volume along with a decrease in revenue-producing subscriptions and a higher number of discounted subscriptions more than offset incremental revenue from the fourth quarter 2002 Wall Street Journal price increase.

International print publication revenues declined $9.1 million, or 10%, to $81.8 million, primarily as a result of a decline in advertising revenue. Despite increases in advertising linage of 2% at The Asian Wall Street Journal and 9.3% at The Wall Street Journal Europe, revenues decreased as a result of discounts related to the global ad sales program launched in the summer of 2002. Circulation and other revenue for international publications declined $1.9 million, or 5.4%, to $34.1 million in 2003. Average combined circulation for the international editions of The Wall Street Journal was 168,000 in 2003 compared with 179,000 in 2002.

Expenses

Print publishing 2003 expenses declined $49.5 million, or 5.2%, to $907.4 million, reflecting lower expenses resulting from the Company’s cost containment program and reduced Today’s Journal costs as 2002 included expenses related to its launch. Newsprint expense for 2003 was nearly flat compared with 2002, as a 10.1% increase in prices was offset by 9.5% lower newsprint consumption.

Operating Income (Loss)

Print publishing operating income was $8.1 million (0.9% of revenues) compared to an operating loss in 2002 of $8.1 million, as profits at the U.S. Journal and at U.S. television were partially offset by significant losses at the international editions. 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, which electronically distributes business and financial news and information includes the operations of Dow Jones Newswires, Consumer Electronic Publishing and Dow Jones Indexes/Ventures, all of which are expected to have similar long-term economic characteristics. 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 and represented about 20% of the Company’s revenues over the three years ended in 2004.

2004 Compared to 2003 – Electronic Publishing

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Revenues

Electronic publishing revenues in 2004 increased $59.1 million, or 18%, to $381.2 million, primarily as a result of business acquisitions at Dow Jones Newswires and revenue gains at Dow Jones Indexes/Ventures and Consumer Electronic Publishing.

Dow Jones Newswires revenue increased $35 million, or 16%, to $248.1 million, due to recent acquisitions. Excluding recent acquisitions, Dow Jones Newswires revenues were relatively flat. English-language terminals carrying Dow Jones Newswires at December 31, 2004, were 298,000 compared with 293,000 at December 31, 2003. North American terminals increased by 1,000 and International terminals increased by 4,000.

Consumer Electronic Publishing revenue increased $11 million, or 16%, to $79.7 million on a 26% increase in advertising revenue coupled with increases in licensing revenue and WSJ.com subscriber revenue. At the end of December 2004, the number of WSJ.com subscribers reached a record 712,000, an increase of 3.3% from a year earlier. Dow Jones Indexes/Ventures revenues, which include Dow Jones Indexes and reprints/permissions businesses, increased $13.2 million, or 33%, to $53.4 million, driven by increases in Indexes revenue (40%) and in reprints and permissions revenue (19%).

Expenses

Electronic publishing expenses were up $48 million, or 19%, to $302.1 million, primarily as a result of incremental expenses from recent acquisitions (comprising nearly two thirds of the increase) as well as an increase in employee compensation.

Operating Income

Electronic publishing’s operating income was $79 million (20.7% of revenues), an improvement of $11.2 million, or 16%, over 2003 operating income of $67.9 million (21.1% of revenues). The improvement was driven by increased profits at Consumer Electronic Publishing, Dow Jones Indexes/Ventures and from recent acquisitions.

2003 Compared to 2002 – Electronic Publishing

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Revenues

Electronic publishing revenue in 2003 improved $12.5 million, or 4.1%, to $322 million, as strong revenue growth at Consumer Electronic Publishing and Dow Jones Indexes/Ventures were somewhat offset by revenue declines at Dow Jones Newswires.

Dow Jones Newswires revenue decreased $9.2 million, or 4.1%, to $213.1 million. North American revenue declined $7.4 million, or 4.2%, and international revenues declined $1.7 million, or 3.9%, primarily as a result of a decline in retail revenue reflecting contraction in the securities industry. English-language terminals carrying Dow Jones Newswires at the end of 2003 were 293,000 compared with 308,000 in 2002, with North American terminals declining 25,000, while international terminals increased 10,000 year over year.

Consumer Electronic Publishing revenue increased $13 million, or 23%, to $68.7 million as a result of a 29% increase in subscriber revenue driven by a subscription price increase in mid-2002, and increases in advertising (23%) and licensing revenue (9.1%). Total WSJ.com subscribers at the end of 2003 reached 689,000, up 1.5% from 2002. Dow Jones Indexes/Ventures revenue increased $8.7 million, or 27%, to $40.2 million as a result of increases in both Dow Jones Indexes and reprints and permission revenues.

Expenses

Electronic publishing expenses in 2003 were up $5.5 million, or 2.2%, to $254.2 million, as a result of higher marketing costs, facilities expenses and employee incentives partially offset by continued cost control efforts.

Operating Income

Electronic publishing operating income in 2003 of $67.9 million (21.1% of revenues) was $7 million, or 12%, better than 2002 operating income of $60.9 million (19.7% of revenues), as reduced losses at Consumer Electronic Publishing and increased profits at Dow Jones Indexes/Ventures more than offset a decline in profits at Dow Jones Newswires.

Community Newspapers

Community newspapers includes the operations of Ottaway Newspapers, which publishes 15 daily newspapers and over 30 weekly newspapers and “shoppers” in nine states in the U.S. Community newspapers comprised roughly 20% of the Company’s revenues over the three years ended in 2004.

During 2002, the Company sold five low-growth community newspaper properties, completing the divestiture phase of its strategy to enhance the Ottaway Newspaper portfolio. The Company reinvested a portion of these proceeds with the purchase of The Ashland Tidings and The Medford Nickel, two small publications in southern Oregon, in October 2002 and in May 2003, the purchase of The Record of Stockton, California, enhancing the Company’s community newspaper portfolio.

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2004 Compared to 2003 – Community Newspapers