John Wiley & Sons Announces Third Quarter Fiscal Year 2010 Results

HOBOKEN, N.J.--(BUSINESS WIRE)--John Wiley & Sons, Inc. (NYSE: JWa and JWb):

“In STMS, we are navigating through challenging market conditions due to tight library funding. The quality of our journals and books, as well as our strong relationships with prestigious scholarly societies, are contributing significantly to our results. In calendar year 2009, journal subscription revenue grew 5% over the prior year.”

			Change
$ millions	FY10	FY09		Excluding FX	Including FX
Revenue: Q3 9 Months	$427 1,263	$374 1,208		5% 3%	14% 5%
Reported EPS: Q3 9 Months	0.71 1.95	0.57 1.74		(19%) (7%)	25% 12%
Adjusted EPS:* Q3 9 Months	0.74 2.12	0.57 1.74		(13%) 3%	30% 22%

*Excludes asset impairment and restructuring charges of $0.03 per share, or $2.8 million pre-tax, in third quarter and $0.17 per share, or $14 million pre-tax, in the nine months.

John Wiley & Sons, Inc. (NYSE: JWa and JWb) announced today that revenue for the third quarter of fiscal year 2010 grew 14%, or 5% on a currency neutral basis. Strong growth in Higher Education (HE) and Professional/Trade (P/T), and modest growth in Scientific, Technical, Medical, and Scholarly (STMS), drove the top-line results.

For the quarter, adjusted earnings per share (EPS) rose 30%, but fell 13% on a currency neutral basis. Adjusted EPS excludes a $0.03 per share asset impairment and restructuring charge primarily for GIT Verlag. Revenue growth and lower interest expense were more than offset by an unfavorable comparison to the significant reduction in incentive compensation in last year’s third quarter and a higher income tax rate in 2010 due to lower foreign tax benefits.

Revenue for the nine months of fiscal year 2010 advanced 5%, or 3% on a currency neutral basis. Adjusted EPS for the nine months rose 22% to $2.12, or 3% on a currency neutral basis. Adjusted EPS excludes a $0.17 per share asset impairment and restructuring charge primarily for GIT Verlag. Top-line results and lower interest expense were partly offset by a $5 million insurance receipt in the prior year. Reported EPS increased 12% to $1.95.

“All of our global businesses performed well in the third quarter,” said William J. Pesce, President and CEO. “In STMS, we are navigating through challenging market conditions due to tight library funding. The quality of our journals and books, as well as our strong relationships with prestigious scholarly societies, are contributing significantly to our results. In calendar year 2009, journal subscription revenue grew 5% over the prior year.”

Mr. Pesce continued: “The P/T business enjoyed a successful holiday season. Higher Education is having a record-setting year, out-performing the market with strong results in all geographic regions and subject categories. Revenue related to WileyPLUS, eBooks, institutional (digital-only) sales, and custom publishing now account for 26% of total Higher Education revenue. In all of our businesses, we are collaborating with several eBook, mobile device, and platform partners to provide more access to more content by more customers than at any other time in Wiley’s long history.”

Mr. Pesce concluded, “Based on year-to-date results, market conditions, and leading indicators, we reiterate our guidance of full-year revenue growth for each of our businesses. We continue to project EPS growth on a reported basis, excluding impairment and restructuring, in the mid-to-high teens, from the $2.15 reported in fiscal year 2009.”

Impairment and Restructuring Charges

In the third quarter, Wiley recorded a pre-tax asset impairment and restructuring charge of approximately $2.8 million, $0.03 per share, principally related to the Company’s controlled circulation magazine business. In the second quarter, Wiley concluded that GIT Verlag, a B2B German-language, controlled circulation magazine business acquired in 2002, would not fully realize the value of the assets reflected on the balance sheet.

Incentive Compensation Costs

As reported, EPS in last year’s third quarter benefitted significantly from reduced incentive compensation accruals, primarily related to the performance of P/T. As noted in our full-year guidance, the Company anticipates revenue growth for each of our businesses, on a performance basis, and strong EPS growth, excluding the charges associated with GIT Verlag. As a result, incentive compensation accruals are higher this year. For analytical purposes, it is noteworthy that adjusted EPS in the third quarter of fiscal year 2010 would have grown by double-digits on a performance basis, excluding the increased incentive compensation accruals.

Cost Savings from Off-shoring and Out-sourcing

Wiley is reducing costs associated with the STMS business to finance investments in enabling technology and new businesses. These cost savings are the result of increased off-shoring and out-sourcing of certain functions and activities from high cost locations to Singapore and other countries in Asia. The Company anticipates restructuring charges of up to $2 million, principally in the fourth quarter of this fiscal year, related to off-shoring and out-sourcing. These charges are expected to be fully recovered within 18 months following implementation.

Foreign Exchange

The foregoing and following references to “currency neutral basis,” “excluding foreign exchange,” and “performance basis” exclude the effect of foreign exchange transactions and translations.

SCIENTIFIC, TECHNICAL, MEDICAL, AND SCHOLARLY (STMS)

Third quarter revenue +2% and nine-month revenue flat on a currency neutral basis.
Third quarter contribution to profit +6% and nine-month contribution to profit -2% on a currency neutral basis, excluding asset impairment and restructuring charges.
Asset impairment and restructuring charges, principally for GIT Verlag, totalled approximately $2.8 million ($0.03 per share) in the third quarter and $14 million ($0.17 per share) for the nine-month period.
Signed new contracts in the quarter to publish 2 society journals; renewed or extended contracts for 37 journals; none were lost.
Calendar year 2009 journal subscription revenue grew 5% over 2008, excluding foreign exchange.

Global STMS revenue for the third quarter of fiscal year 2010 rose 13% to $228 million, or 2% excluding favorable foreign exchange. Modest growth in journal subscription, backfile, reprints, and translation revenue was offset by lower B2B advertising revenue. Journal revenue increased 1% on a currency neutral basis, with the Americas driving growth. Book revenue declined 3% on a currency neutral and comparable basis, excluding a prior year sales return reserve adjustment of $3 million.

Direct contribution to profit for the third quarter increased 18% to $89 million, or 2% excluding favorable foreign exchange. The increase reflects top-line results, the effect of out-sourcing initiatives in journal production and expense control, offset by the timing of accrued incentive compensation costs and asset impairment and restructuring charges of $2.8 million.

For the nine months, global STMS revenue was up 2% to $709 million, but was flat excluding favorable foreign exchange. Revenue growth from journal subscriptions, article sales, reprints and the Cochrane subscription-based database was offset by lower book and B2B advertising revenue. Direct contribution to profit for the first nine months was up 1%, but off 7% on a currency neutral basis due to the $14 million asset impairment and restructuring charges, increased costs associated with new business, and a prior year favorable bankruptcy settlement, partially mitigated by expense savings, lower production costs due to off-shoring and out-sourcing, and the completion of Blackwell-related integration activities.

Calendar Year 2010 Journal License Renewals

As expected, we are experiencing modest journal subscription growth in most regions, except Asia, where growth has exceeded our expectations. Major renewals were completed with consortia in the U.S., Canada, U.K., Germany, Spain, Austria, the Netherlands, and South Africa. In the Asia-Pacific region, approximately 90% of licenses have been renewed. Leading indicators in Russia, France, Eastern Europe, and the Middle East are positive, while market conditions remain difficult in Greece, Hungary, and Ireland. Significant new business includes journal licenses in Spain and Romania, and backfile sales in the U.S., Netherlands, Australia, and New Zealand.

Journals

For the quarter, journal revenue increased $2 million on a currency neutral basis, mainly due to journal renewal processing delays in the prior year. Modest current year growth in journal subscriptions and increased reprint, translation, and backfile revenue were partially offset by lower advertising revenue. B2B advertising continues to be soft. On a calendar year basis (through December 31, 2009), journal subscription revenue increased 5% over prior year, excluding foreign exchange.

Society Journal Activity

New signings: 2 journals in the third quarter; 26 for the nine months
Renewed/extended contracts: 37 journals in the third quarter; 71 for the nine months
Contracts not renewed: 0 journals in the third quarter; 2 for the nine months

Key New Journals

Allergy & Rhinology on behalf of the American Academy of Otolaryngic Allergy and the American Rhinologic Society
Thoracic Cancer on behalf of the Tianjin Lung Cancer Institute
The Bulletin of the Institute of Classical Studies (BICS), one of the world’s most prestigious classics journals

Books and Reference

Books and reference revenue for the quarter declined $1 million on a currency neutral basis, excluding a sales return reserve adjustment of $3 million in the third quarter of fiscal year 2009. On a reported basis book revenue increased $4 million.

Database and Online Initiatives

A national license agreement will enable about 60 million Internet users in India access to The Cochrane Library’s internationally renowned collection of healthcare databases. The Cochrane Library helps clinicians and consumers make decisions about the best treatments for their patients.
Essential Evidence, a new product added to the online, evidence-based Essential Evidence Plus, was launched. This resource tool will help clinicians make diagnoses, chart treatment plans, and determine prognoses. The product currently features approximately 700 structured medical topics with approximately 100 more in development.

Alliances

A books co-publishing agreement was signed with The Minerals, Metals & Materials Society. The society is closely affiliated with the American Ceramic Society (ACerS) and ASM International.
An agreement was signed with the Royal Geographical Society for a book series. Wiley also publishes The Royal Geographical Society’s Geographical Journal, Area, and Transactions of the Institute of British Geographers.
An agreement was signed with The American Geographical Society to co-publish both the Geographical Review and FOCUS on Geography. Geographical Review is a leading scholarly periodical.
Through a partnership with the Australian Psychological Society, Wiley will publish three flagship journals – Australian Journal of Psychology, Australian Psychologist, and Clinical Psychologist.

Acquisitions/Divestments

Acquired Microcirculation, the journal of The Microcirculatory Society. The haematology/vascular medicine publication is in its sixteenth year.
Acquired the Israel Journal of Chemistry from Laser Pages Publishing Ltd. Launched in 1951 as the Bulletin of the Research Council of Israel, Section A, it was re-launched in 1963 under its current name.
Sold two journals to Maney Publishing: Cochlear Implants International and Deafness & Education International.

PROFESSIONAL/TRADE (P/T)

Third quarter revenue growth +7% and nine-month revenue growth +3%, both on a currency neutral basis.
Third quarter contribution to profit -2% and nine-month contribution to profit +4%, on a currency neutral basis. Top line growth was offset by higher accrued incentive compensation costs over prior year.
Consumer, technology, and business categories drove results.

Global P/T revenue grew 10% to $107 million in the third quarter of fiscal year 2010, or 7% on a currency neutral basis. Sales growth was strong in all regions, especially the U.S., where the holiday season was solid. Business publishing was driven by social media books; technology by books on new windows operating systems and certification; and consumer by the Meredith publishing agreement and For Dummies brand sales.

Direct contribution to profit rose 3% to $24 million for the third quarter of fiscal year 2010, but declined 2% on a currency neutral basis. Top-line results and expense savings were offset by higher incentive compensation cost accruals compared to last year. As previously reported, last year’s third quarter included reduced accrued incentive compensation costs based upon P/T’s performance in a difficult market.

For the nine months, global P/T revenue of $317 million was up 3% over prior year, on a currency neutral and on a reported basis. Strong second and third quarter results were driven by consumer, business, psychology, and technology and the Meredith and GMAC agreements, all of which more than offset weak first quarter results. North America exhibited the most growth followed by EMEA. Direct contribution to profit was up 4% in the first nine months, on a currency neutral and reported basis, due to higher revenue and expense control.

Notable New Books

Business and Finance: Common Sense of Mutual Funds 10^th Anniversary Edition by John Bogle, a complete revision of one of Wiley’s all-time best-selling investing books; Investor Manifesto by William Bernstein; and The Elements of Investing by Burton Makiel and Charles Ellis. In Leadership, we published Patrick Lencioni’s Getting Naked: a Business Fable about Shedding the Three Fears that Sabotage Client Loyalty. In his career, Patrick Lencioni has sold 2.5 million books through the Wiley franchise. Other finance books include China and the Credit Crisis: The Emergence of a New World Order by Giles Chance; Post Crisis Risk Management: Bracing for the Next Perfect Storm by Tsuyoshi Oyama; and the Stability of Islamic Finance by Iqbal, Askari and Mirakhor.
Psychology: Handbook of Social Psychology, Fifth Edition, Two Volume Set by Susan T. Fiske, Daniel T. Gilbert, Gardner Lindzey; The Corsini Encyclopedia of Psychology, Fourth Edition, 4 Volume Set, by Irving B. Weiner and W. Edward Craighead. This is the go-to reference for psychologists, researchers, and students, both in print and online. The first four videos of the Evidenced-Based Training DVD series, including: The Evidence-Based Practice Overview, Evidence-Based Treatment Planning for Panic Disorder, Evidence-Based Treatment Planning for Depression, and Evidence-Based Treatment Planning for Social Anxiety. Upon completion, the series will offer twelve continuing education training videos to help bring mental health agencies and professionals into compliance with new standards. Continuing education credits will be provided through Essential Learning, with whom we are partnering.
Technology: QuickBooks 2010 For Dummies by Stephen L. Nelson; Mastering Windows Server 2008 R2; and Laptops For Dummies, 4e, by Dan Gookin.
Consumer: Hero of the Pacific by John Brady, about Marine legend John Basilone; Teach Yourself Visually Knitting, 2e, part of the Teach Yourself Visually program; Calorie Counter For Dummies by Rosanne Rust and Meri Raffetto; and iPod and iTunes For Dummies DVD, a 90-minute instructional video that outlines the new iPod products, and features of the iPod software.
Culinary: Amy’s Bread by Amy Scherber and three notable Culinary Institute of America books: Artisan Breads at Home by Eric Castel; Modern Café by Francisco Migoya; Chocolates and Confections at Home by Peter Greweling.

Architecture: Mechanical and Electrical Equipment for Buildings, 10e, by Stein and Reynolds and Architectural Graphics, 5e, by Francis Ching.

Notable Alliances

Publishing agreement signed with Facebook.com to produce “official” branded Facebook instruction guides, The Definitive Facebook Guides. The series will be launched in fiscal year 2011.
Wiley-Pfeiffer (HR development and management) signed an agreement with Korean Management Association to deliver products in Korea.
Agreement signed with the Construction Specifications Institute (CSI) to become the publisher of the CSI Professional Practice Guides. These guides align with CSI’s certification program for Architecture, Engineering, and Construction industry professionals.

HIGHER EDUCATION (HE)

Third quarter revenue +13% and nine-month revenue +14%, on currency neutral basis.
Third quarter contribution to profit +11% and nine-month contribution to profit +21%, on currency neutral basis.
All regions contributing to growth; sales outside the U.S. increased 12% and 15% for the quarter and nine-month period, respectively, on a currency neutral basis.
Third quarter revenue growth by region on a currency neutral basis: North America +13%, EMEA +9%, Asia/Australia +13%.
Sales driven by strong frontlist and WileyPLUS
One-third of WileyPLUS sales are now digital-only.

Third quarter HE revenue grew 23% to $92 million, or 13% on a currency neutral basis. Strong growth occurred in every region and in every subject category. Contributing to the results were a strong frontlist, particularly in accounting and mathematics, increased enrollment and growth in WileyPLUS and custom publishing. Revenue for the school business in Australia increased 18% over the third quarter of fiscal year 2009 on a performance basis. Revenue outside of traditional textbook sales, including WileyPLUS, custom publishing, desktop, and binder editions, is up 40% for the nine months and now represents 26% of all HE revenue.

Direct contribution to profit grew 25% in the third quarter to $38 million, or 11% on a currency neutral basis, reflecting top-line results and increased sales of higher-margin digital products, partially offset by higher accrued incentive compensation costs and development costs to support new products. Gross margin continues to improve with increased digital-only revenue and manufacturing efficiencies.

For the nine months, global HE revenue was up 17% compared to prior year, or 14% on a currency neutral basis. Double-digit growth was experienced in all regions. Year-to-date results include revenue of $2.5 million from books previously reported in STMS and $1 million from books previously reported in P/T. Excluding these books, HE growth was 13% on a performance basis. Direct contribution to profit in the nine months increased 25%, or 21% on a currency neutral basis, primarily due to top-line growth and gross margin improvement.

Nine-Month Results by Subject Category (currency neutral)

In Business and Accounting, revenue exceeded prior year by 16%. A strong accounting frontlist continued to drive growth, particularly Kieso: Intermediate Accounting, 13e; Kimmel: Financial Accounting, 5e; and Weygandt: Accounting Principles, 9e.
In Engineering and Computer Science, revenue exceeded prior year by 20%. Key books included Munson: Fluid Mechanics, 6e; Turban: Information Management, 7e; and Fitzgerald: Data Communications, 10e.
In Mathematics and Statistics, revenue exceeded prior year by 26%. Key books included Hughes Hallett: Calculus, 5e; Anton: Calculus, 9e; Boyce: Elementary Differential Equations, 9e; and Young: College Algebra, 2e.
In Sciences, revenue exceeded prior year by 8%. Growth was attributed to Cutnell: Physics, 8e; Berg: Visualizing Environmental Science, 1e and 2e; and Jenkins: Anatomy and Physiology, 2e.
In Social Sciences, revenue exceeded prior year by 20%. Key books included Huffman: Psychology, 9e; deBlij: Concepts Geography, 4e; Kring: Abnormal Psychology, 11e; and Lucas Murillo: Con Brio–Beginning Spanish.
Revenue from the Visualizing series exceeded prior year by 89%. Growth was driven by Berg: Visualizing Environmental Science, Ireland: Visualizing Human Biology, and Murck: Visualizing Geology.

WileyPLUS

Global fiscal year-to-date billings increased 39% over the prior year period to $28 million.
Deferred WileyPLUS revenue at quarter end was $7 million.
Strong sales increases in the U.S., Asia, Australia, and the U.K.
The first institutional agreement signed in the United Arab Emirates.

Conference Call

Wiley will hold a conference call today, March 11, 2010 at 10:00 a.m. (EST) to discuss its financial results for the third quarter of fiscal year 2010.

To participate in the conference call, please dial the following number approximately ten minutes prior to the 10:00 a.m. start time: (866) 551-3680 and enter the participant code 2632908#.

International callers, please dial the following number approximately ten minutes prior to the 10:00 a.m. start time: (212) 401-6760 and enter the participant code 2632908#.

You may also listen to a live audio webcast of the call by accessing www.wiley.com> Investor Relations> Events and Presentations, or http://www.wiley.com/WileyCDA/Section/id-370238.html

A replay of the conference call will be available through March 18^th and may be accessed by calling (866) 551-4520 and entering pin code 260922#. Additionally, an archive of the webcast will be available at 1 p.m. on Thursday, March 11^th at http://www.wiley.com/WileyCDA/Section/id-370238.html for a period of up to 14 days.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995

This release contains certain forward-looking statements concerning the Company's operations, performance, and financial condition. Reliance should not be placed on forward-looking statements, as actual results may differ materially from those in any forward-looking statements. Any such forward-looking statements are based upon a number of assumptions and estimates that are inherently subject to uncertainties and contingencies, many of which are beyond the control of the Company, and are subject to change based on many important factors. Such factors include, but are not limited to (i) the level of investment in new technologies and products; (ii) subscriber renewal rates for the Company's journals; (iii) the financial stability and liquidity of journal subscription agents; (iv) the consolidation of book wholesalers and retail accounts; (v) the market position and financial stability of key online retailers; (vi) the seasonal nature of the Company's educational business and the impact of the used book market; (vii) worldwide economic and political conditions; (viii) the Company's ability to protect its copyrights and other intellectual property worldwide; (ix) the ability of the Company to successfully integrate acquired operations and realize expected opportunities; and (x) other factors detailed from time to time in the Company's filings with the Securities and Exchange Commission. The Company undertakes no obligation to update or revise any such forward-looking statements to reflect subsequent events or circumstances.

About Wiley

Founded in 1807, John Wiley & Sons, Inc. has been a valued source of information and understanding for more than 200 years, helping people around the world meet their needs and fulfill their aspirations. Wiley and its acquired companies have published the works of more than 400 Nobel laureates in all categories: Literature, Economics, Physiology or Medicine, Physics, Chemistry, and Peace.

Our core businesses publish scientific, technical, medical, and scholarly journals, encyclopedias, books, and online products and services; professional/trade books, subscription products, training materials, and online applications and Web sites; and educational materials for undergraduate and graduate students and lifelong learners. Wiley's global headquarters are located in Hoboken, New Jersey, with operations in the U.S., Europe, Asia, Canada, and Australia. The Company's Web site can be accessed at http://www.wiley.com. The Company is listed on the New York Stock Exchange under the symbols JWa and JWb.

Investor Relations: http://www.wiley.com/WileyCDA/Section/id-370238.html

JOHN WILEY & SONS, INC.

SUMMARY OF OPERATIONS

FOR THE THIRD QUARTER AND NINE MONTHS ENDED

January 31, 2010 AND 2009

(in thousands, except per share amounts)

US GAAP

Third Quarter Ended January 31,

Nine Months Ended January 31,

2010

2009

% Change

2010

2009

% Change

Revenue

427,102

374,383

1,263,435

1,208,031

Costs and Expenses

Cost of Sales

133,437

123,255

393,743

387,141

Operating and Administrative Expenses

214,009

179,412

629,505

615,204

Impairment and Restructuring Charges

2,834

14,332

Amortization of Intangibles

8,559

8,435

26,628

27,855

-4

Total Costs and Expenses

358,839

311,102

1,064,208

1,030,200

Operating Income

68,263

63,281

199,227

177,831

Operating Margin

16.0

16.9

15.8

14.7

Interest Expense

(8,677

)

(12,816

)

-32

(26,503

)

(39,113

)

-32

Foreign Exchange Gains / (Losses)

614

(6,552

)

(10,079

)

(10,571

)

Interest Income and Other, Net

202

458

6,049

Income Before Taxes

60,402

43,958

163,103

134,196

Provision for Income Taxes

17,988

10,527

47,555

30,436

Net Income

42,414

33,431

115,548

103,760

Income Per Share- Diluted

0.71

0.57

1.95

1.74

Average Shares - Diluted

59,826

58,954

59,366

59,557

ADJUSTED

Third Quarter Ended January 31,

Nine Months Ended January 31,

2010

2009

% Change

2010

2009

% Change

Revenue

427,102

374,383

1,263,435

1,208,031

Costs and Expenses

Cost of Sales

133,437

123,255

393,743

387,141

Operating and Administrative Expenses

214,009

179,412

629,505

615,204

Amortization of Intangibles

8,559

8,435

26,628

27,855

-4

Total Costs and Expenses

356,005

311,102

1,049,876

1,030,200

Adjusted Operating Income (A)

71,097

63,281

213,559

177,831

Adjusted Operating Margin (A)

16.6

16.9

14.7

Interest Expense

(8,677

)

(12,816

)

-32

(26,503

)

(39,113

)

-32

Foreign Exchange Gains / (Losses)

614

(6,552

)

(10,079

)

(10,571

)

Interest Income and Other, Net

202

458

6,049

Adjusted Income Before Taxes (A)

63,236

43,958

177,435

134,196

Adjusted Provision for Income Taxes (A)

18,869

10,527

51,770

30,436

Adjusted Net Income (A)

44,367

33,431

125,665

103,760

Adjusted Income Per Share- Diluted (A)

0.74

0.57

2.12

1.74

Average Shares - Diluted

59,826

58,954

59,366

59,557

(A)		The adjusted results for the third quarter and nine month periods ending January 31, 2010 exclude intangible asset impairment and restructuring charges principally related to the GIT Verlag, a B2B German-language controlled circulation magazine business acquired in 2002. The third quarter and nine month charges were $2.8 million, $0.03 per diluted share and $14.3 million, $0.17 per diluted share, respectively.

Note: The Company has provided income measures excluding certain items described above, in addition to net income determined in accordance with GAAP. These non-GAAP financial measures, as shown in the attached Adjusted Summary of Operations, are used in evaluating results of operations for internal purposes. These non-GAAP measures are not intended to replace the presentation of financial results in accordance with GAAP. Rather, the Company believes the exclusion of such items provides additional information to investors to facilitate the comparison of past and present operations.

JOHN WILEY & SONS, INC.
SEGMENT RESULTS
FOR THE THIRD QUARTER AND NINE MONTHS ENDED
January 31, 2010 AND 2009
(in thousands)



			Third Quarter Ended								Nine Months Ended
			January 31,								January 31,
			2010			2009		% Change			2010			2009		% Change
Revenue

Scientific, Technical, Medical and Scholarly		$	228,388		$	202,035		13	%	$	708,613		$	696,400		2	%

Professional/Trade			107,056			97,606		10	%		316,982			307,532		3	%

Higher Education			91,658			74,742		23	%		237,840			204,099		17	%

	Total	$	427,102		$	374,383		14	%	$	1,263,435		$	1,208,031		5	%


Direct Contribution to Profit

Scientific, Technical, Medical and Scholarly
	Adjusted Direct Contribution to Profit (A)	$	91,571		$	75,215		22	%	$	292,472		$	276,730		6	%
	Impairment and Restructuring Charges		(2,834	)		-					(14,332	)		-
	Scientific, Technical, Medical and Scholarly - US GAAP		88,737			75,215		18	%		278,140			276,730		1	%

Professional/Trade			24,484			23,850		3	%		75,782			73,104		4	%

Higher Education			38,315			30,754		25	%		91,720			73,325		25	%

	Total	$	151,536		$	129,819		17	%	$	445,642		$	423,159		5	%


Shared Services and Administrative Costs
	Distribution	$	(28,007	)	$	(26,460	)	6	%	$	(82,452	)	$	(84,996	)	-3	%
	Technology Services		(24,770	)		(19,824	)	25	%		(72,010	)		(69,392	)	4	%
	Finance		(12,004	)		(9,671	)	24	%		(32,710	)		(33,821	)	-3	%
	Other Administration		(18,492	)		(10,583	)	75	%		(59,243	)		(57,119	)	4	%
	Total	$	(83,273	)	$	(66,538	)	25	%	$	(246,415	)	$	(245,328	)	0	%

Operating Income		$	68,263			63,281		8	%	$	199,227			177,831		12	%

(A)		The adjusted results for the third quarter and nine month periods ending January 31, 2010 exclude intangible asset impairment and restructuring charges principally related to the GIT Verlag, a B2B German-language controlled circulation magazine business acquired in 2002. The third quarter and nine month charges were $2.8 million and $14.3 million, respectively.

Note: Management responsibility and reporting of certain Professional Trade and Higher Education product lines were realigned as of May 1, 2009. Prior year results have been restated for comparative purposes.

JOHN WILEY & SONS, INC.
CONDENSED STATEMENTS OF FINANCIAL POSITION
(in thousands)

			January 31,		April 30,
			2010	2009	2009

Current Assets
	Cash & cash equivalents	$	67,473	72,410	102,828
	Accounts receivable		249,941	218,602	178,550
	Inventories		101,560	108,295	111,267
	Prepaid and other		26,432	24,918	46,924
	Total Current Assets		445,406	424,225	439,569
Product Development Assets			109,402	94,397	89,662
Property, Equipment and Technology			149,115	132,454	141,196
Intangible Assets			952,200	869,587	919,375
Goodwill			633,944	555,666	589,993
Deferred Income Tax Benefits			9,888	32,096	14,065
Other Assets			36,287	37,904	29,848
	Total Assets		2,336,242	2,146,329	2,223,708

Current Liabilities
	Accounts and royalties payable		213,234	192,121	160,275
	Deferred revenue		256,129	201,473	246,584
	Accrued income taxes		10,693	922	4,281
	Accrued pension liability		2,560	2,314	2,483
	Other accrued liabilities		115,267	93,630	115,844
	Current portion of long-term debt		67,500	61,875	67,500
	Total Current Liabilities		665,383	552,335	596,967
Long-Term Debt			569,600	826,125	754,900
Accrued Pension Liability			78,738	79,763	90,621
Other Long-Term Liabilities			86,488	94,442	91,292
Deferred Income Taxes			189,096	168,384	176,412
Shareholders' Equity			746,937	425,280	513,516
	Total Liabilities & Shareholders' Equity	$	2,336,242	2,146,329	2,223,708

JOHN WILEY & SONS, INC.
STATEMENTS OF FREE CASH FLOW
(in thousands)


			Nine Months Ended
			January 31,
			2010		2009
Operating Activities:
	Net income	$	115,548		103,760
	Amortization of intangibles		26,628		27,855
	Amortization of composition costs		34,758		32,991
	Depreciation of property, equipment and technology		29,681		26,372
	Impairment and restructuring charges (net of tax)		10,117		-
	Stock-based compensation (net of tax)		7,730		6,258
	Excess tax benefits from stock-based compensation		(3,563	)	(3,882	)
	Foreign exchange transaction losses		10,079		10,571
	Pension expense, net of contributions		(11,351	)	5,142
	Non-cash charges and other		82,761		68,617
	Change in deferred revenue		(9,712	)	(88,299	)
	Net change in operating assets and liabilities, excluding acquisitions		22,053		13,481
	Cash Provided by Operating Activities		314,729		202,866

Investments in organic growth:
	Additions to product development assets		(110,258	)	(94,856	)
	Additions to property, equipment and technology		(31,575	)	(30,454	)

	Free Cash Flow		172,896		77,556

Other Investing and Financing Activities:
	Acquisitions, net of cash		(5,575	)	(22,387	)
	Repayment of long-term debt		(648,871	)	(328,717	)
	Borrowings of long-term debt		463,571		377,865
	Change in book overdrafts		(15,932	)	(32,861	)
	Purchases of treasury stock		-		(35,110	)
	Cash dividends		(24,637	)	(22,937	)
	Proceeds from exercise of stock options and other		17,381		9,143
	Excess tax benefits from stock-based compensation		3,563		3,882
	Cash Used for Investing and Financing Activities		(210,500	)	(51,122	)

Effects of Exchange Rate Changes on Cash			2,249		(13,335	)

Increase (Decrease) in Cash and Cash Equivalents for Period		$	(35,355	)	13,099



RECONCILIATION TO GAAP PRESENTATION

Investing Activities:
	Additions to product development assets	$	(110,258	)	(94,856	)
	Additions to property, equipment and technology		(31,575	)	(30,454	)
	Acquisitions, net of cash		(5,575	)	(22,387	)
	Cash Used for Investing Activities	$	(147,408	)	(147,697	)

Financing Activities:
Cash (Used for) Provided by Investing and Financing Activities		$	(210,500	)	(51,122	)
Less:
	Acquisitions, net of cash		(5,575	)	(22,387	)
	Cash (Used for) Provided by Financing Activities	$	(204,925	)	(28,735	)

Note: The Company’s management evaluates performance using free cash flow. The Company believes free cash flow provides a meaningful and comparable measure of performance. Since free cash flow is not a measure calculated in accordance with GAAP, it should not be considered as a substitute for other GAAP measures, including cash used for investing activities and financing activities, as an indicator of performance.