Wiley Reports Second Quarter Fiscal Year 2016 Results

• Revenue of $433 million, down 5% over prior year on a constant currency basis, including the impact of a $10 million journal backfile sale in the prior year period
• Journal subscription revenue of $163 million, down 1% on a constant currency basis, including the trailing effects of the Swets subscription agency bankruptcy
• Adjusted EPS of $0.78, down 10% on a constant currency basis, including the $0.10 impact of the large journal backfile sale in the prior year period
• First half revenue and adjusted EPS down 2% and 1%, respectively, on a constant currency basis
• Full-year adjusted EPS outlook reaffirmed but revenue growth outlook revised to flat, excluding the impact of foreign exchange and the shift to time-based journal subscription agreements

HOBOKEN, N.J.--(BUSINESS WIRE)--John Wiley & Sons, Inc. (NYSE:JWa and JWb), a global provider of knowledge and learning solutions that improve outcomes in research, professional practice, and education, today announced the following results for the second quarter of fiscal year 2016:

				% Change
$ millions	FY16		FY15	Excluding FX		Including FX
Revenue:
Q2	$433.4	$477.0		(5%)	(9%)
6 Months	$856.3	$914.9		(2%)	(6%)
Adjusted EPS:
Q2	$0.78	$0.90		(10%)	(13%)
6 Months	$1.36	$1.46		(1%)	(7%)
GAAP EPS:
Q2	$0.74	$0.90			(18%)
6 Months	$1.29	$1.46			(12%)
Please see the attached financial schedules for more detail

Management Commentary

“As anticipated, second quarter results reflect a challenging comparison to the prior-year period due to an unusually large backfile sale in that prior period,” said Mark Allin, Wiley’s President and CEO. “In addition, the quarter was adversely impacted by substantially weaker demand for college textbooks and custom education material. For the six months, revenue and adjusted EPS were down modestly, with Research journal revenue showing steady performance excluding the prior year backfile sale. Meanwhile, we continue to make good progress in the integration of our books businesses, our continued shift to a more variable cost model and the implementation of our cost benchmarking initiative.”

Fiscal Year 2016 Outlook

Wiley is reaffirming its fiscal year 2016 adjusted EPS outlook for flat performance but lowering its revenue outlook from low-single digit growth to flat; both are on a constant currency basis and exclude the adverse transitional impact of shifting to time-based journal subscription agreements. As previously announced, Wiley is moving to time-based digital journal subscription agreements for calendar year 2016. The change will shift roughly $35 million of revenue and $0.35 of EPS from FY16 to FY17, with recurring effect annually thereafter. Most of the revenue and earnings impact will occur in the third quarter, and the change will not impact cash flow. Included in the FY16 EPS guidance is an incremental expense impact of more than $0.15 for the enterprise resource planning system (ERP) implementation as compared to FY15.

Foreign Exchange (FX)

Wiley generates half of its revenue from outside the United States, and is therefore exposed to a stronger dollar, particularly in relation to the euro and pound sterling. For fiscal year 2015, the weighted average rates for sterling and the euro were 1.60 and 1.25, respectively, on a US dollar equivalent basis. The weighted average rates for the first half of fiscal 2016 were 1.55 and 1.12, respectively. Throughout this report, references are made to variances “excluding foreign exchange” or “on a constant currency basis”; such amounts exclude both currency translation effects and transactional gains and losses.

Adjusted Results

The Company provides financial measures referred to as “adjusted” revenue, contribution to profit, and EPS, which exclude restructuring charges. Variances to adjusted revenue, contribution to profit, and EPS are on a constant currency basis unless otherwise noted. Management believes the exclusion of such items provides additional information to facilitate the analysis of results. These non-GAAP measures are not intended to replace the financial results reported in accordance with GAAP.

Second Quarter and First Half Summary

• Second quarter revenue declined 5% on a constant currency basis to $433.4 million due to a $10 million journal backfile sale in the prior year period and declines in book revenue across the three segments. Together, Journal Subscriptions and Author-Funded Access were flat compared to prior year, including the trailing effects of the Swets bankruptcy. Online Program Management and Online Test Preparation grew 18% and 13%, respectively. Second quarter revenue on a US GAAP basis declined 9% primarily due to an adverse currency impact of $19 million. First half revenue declined 2% on a constant currency basis to $856.3 million, or 6% on a US GAAP basis.
• Second quarter adjusted earnings per share (EPS) declined 10% on a constant currency basis to $0.78 due to the high-margin journal backfile sale in the prior year period, higher technology expense related to ERP planning and deployment, and investment in online program management, partially offset by incremental cost savings from restructuring programs. Adjusted EPS excludes restructuring charges and credits, as further described in the attached reconciliation of US GAAP to Adjusted EPS. Second quarter EPS on a US GAAP basis declined 18% to $0.74. US GAAP EPS includes a $0.03 adverse impact from foreign exchange and a $0.04 per share restructuring charge in the quarter. First half adjusted EPS declined 1% on a constant currency basis to $1.36, or 12% on a US GAAP basis.
• Free Cash Flow was a use of $192.7 million for the first half of the year as compared to a use of $140.7 million in the prior year period due to lower net income, working capital timing, and higher capital spending related to the ERP and related systems deployment. Note that free cash flow is seasonally negative in the first half of Wiley’s fiscal year principally due to the timing of annual journal subscription cash collections.
• Restructuring Charge: Wiley recorded a $3.7 million pre-tax restructuring charge in the quarter ($0.04 per share) principally related to process re-engineering consulting costs. After the quarter closed, Wiley completed an agreement to move its US-based print textbook fulfillment operations to Cengage Learning, with the aim of closing its New Jersey distribution facility by April 2016. The exit from the facility will result in near-term restructuring charges as activities progress.
• Share Repurchases: Wiley repurchased 637,717 shares this quarter at a cost of $32.0 million, an average of $50.15 per share. Approximately 1.3 million shares remain in the current authorization program.

RESEARCH

• Revenue: Second quarter revenue of $238.4 million was down 5% on a constant currency basis due to the $10 million journal backfile sale in the prior year period and an 11% decline in Books and References revenue, which offset steady performance in Journal Subscriptions and Author-Funded Access, in combination. For the first six months, Research revenue was down 3% at constant currency.
• Calendar Year 2015 Journal Subscriptions: At the end of October, calendar year 2015 Journal Subscriptions were up 0.3% on a constant currency basis, with nearly all targeted business under contract for the 2015 calendar year. Results were adversely impacted by the Swets bankruptcy and net society publishing losses for the year.
• Adjusted Contribution to Profit: Second quarter adjusted contribution to profit of $67.6 million declined 11% on a constant currency basis mainly due to the high-margin backfile sale in the prior year, as well as higher allocated marketing and technology shared service costs, partially offset by savings from restructuring and strategic vendor sourcing initiatives. For the six months, adjusted contribution to profit was down 5% at constant currency.
• Society Business: Seven society journals were renewed during the quarter, worth approximately $9.9 million in combined annual revenue, and one was not renewed, worth $0.3 million annually.

PROFESSIONAL DEVELOPMENT

• Revenue: Second quarter revenue declined 3% on a constant currency basis to $99.2 million with organic growth in Online Test Preparation (+13%) and Corporate Learning (+7%) offset by a 6% decline in Books. The Assessment business rose 4%, with post-hire assessment growth offsetting an expected decline in pre-hire assessment revenue following portfolio actions to optimize longer-term profitable growth. For the six months, Professional Development revenue grew 3% due to growth in Corporate Learning, which included two additional months of revenue (approximately $5 million) due to a prior-year reporting lag, and strong double-digit growth in Online Test Preparation (+27%).
• Adjusted Contribution to Profit: Excluding foreign exchange, adjusted contribution to profit rose 95% for the quarter and more than doubled for the year. Performance was impacted by lower revenue offset by efficiency gains from restructuring and cost synergies within the Talent Solutions businesses. Six month performance includes two additional months of operating results from the CrossKnowledge acquisition.
• Acquisitions: In October, Wiley announced the acquisition of Chartered Financial Analyst (CFA) content and AnalystSuccess.com from The American College of Financial Services. Terms were not disclosed. The acquisition positions Wiley as a market leader for CFA Test Preparation. Wiley runs online CFA Exam Review Courses on its Efficient Learning Systems platform. In addition to the CFA, Wiley provides advanced online test preparation for the CPA, CMA, CIA, and PMP designations.
• Test Preparation Partnership: Wiley recently announced a partnership with ACT, the nation’s leader in college and career readiness, to enhance our collective test prep product offerings. Wiley will become the exclusive publisher for ACT’s The Real ACT® Prep Guide beginning in January 2016. As producer of the ACT test and ACT WorkKeys®, among other respected assessment programs, ACT is committed to providing insights that help individuals better prepare for success throughout their lives - from education through career.
• Junior Achievement Program: CrossKnowledge and Junior Achievement USA® recently announced a joint partnership that will bring digital learning solutions to thousands of students and educators. As part of the agreement, CrossKnowledge has donated the use of its Learning Management System (LMS) to Junior Achievement USA for the next five years (starting in 2016) through the CrossKnowledge Foundation. It is estimated that nearly 300,000 Junior Achievement users will access CrossKnowledge programs in 2016, and that figure is expected to reach 1.6 million in 2020.

EDUCATION

• Revenue: Second quarter revenue declined 8% on a constant currency basis to $95.8 million, with Print Textbooks down 22% and Custom Material down 25%, offsetting strong growth in Online Program Management (+18%) and Digital Books (+12%). The decline in Textbooks and Custom Material reflects lower enrollments, increased market penetration by rental, channel inventory consumption, and fewer adoptions. WileyPLUS grew 2% over prior year. For the six months, Education revenue is down 5% at constant currency.
• Adjusted Contribution to Profit: Second quarter adjusted contribution to profit declined 19% on a constant currency basis to $15.6 million, reflecting lower revenue and continued investment in Online Program Management.
• Online Program Management (formerly Deltak): Wiley added one university partner in the quarter – Nottingham Trent University (England) – and six new degree programs spanning business and nursing. Nottingham Trent is one of the largest universities in the UK with over 28,000 students. At the end of October, Wiley had 39 partners under contract and 216 online degree programs.
• Distribution Partnership: In November, Wiley entered into an agreement to outsource its US-based print textbook fulfillment operations to Cengage Learning, with the aim of creating a more efficient and variable cost model for print products. Under this agreement, the Company plans to exit its New Jersey distribution center in the spring of 2016.

Earnings Conference Call

• Scheduled for today, December 8, at 10:00 a.m. (EST)
• Access the webcast at www.wiley.com> Investor Relations> Events and Presentations, or http://www.wiley.com/WileyCDA/Section/id-370238.html
• U.S. callers, please dial [phone] and enter the participant code 469774#
• International callers, please dial [phone] and enter the participant code 469774#
• An archive of the webcast will be available 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

Wiley is a global provider of knowledge and knowledge-enabled services that improve outcomes in areas of research, professional practice, and education. Through the Research segment, the Company provides digital and print scientific, technical, medical, and scholarly journals, reference works, books, database services, and advertising. The Professional Development segment provides digital and print books, online assessment and training services, and test prep and certification. In Education, Wiley provides education solutions including online program management services for higher education institutions and course management tools for instructors and students, as well as print and digital content.

JOHN WILEY & SONS, INC.
UNAUDITED SUMMARY OF OPERATIONS
FOR THE SECOND QUARTER AND SIX MONTHS ENDED
OCTOBER 31, 2015 AND 2014
(in thousands, except per share amounts)
SECOND QUARTER ENDED OCTOBER 31,
				2015						2014						% Change
			US GAAP			Adjustments (A)		Adjusted		US GAAP		Adjustments (A)		Adjusted		US GAAP		Adjusted excl. FX
Revenue		$		433,362				433,362		476,972				476,972		-9	%	-5	%
Costs and Expenses
	Cost of Sales			116,764				116,764		134,541				134,541		-13	%	-10	%
	Operating and Administrative			239,987				239,987		253,328				253,328		-5	%	-1	%
	Restructuring Charges (A)			3,694		(3,694	)	-		-		-		-
	Amortization of Intangibles			12,652				12,652		13,099				13,099		-3	%	0	%
	Total Costs and Expenses			373,097		(3,694	)	369,403		400,968		-		400,968		-7	%	-4	%
Operating Income				60,265		3,694		63,959		76,004		-		76,004		-21	%	-13	%
	Operating Margin			13.9	%			14.8	%	15.9	%			15.9	%
Interest Expense				(4,324	)			(4,324	)	(4,506	)			(4,506	)	-4	%	-4	%
Foreign Exchange Gain				38				38		210				210
Interest Income and Other				644				644		1,108				1,108		-42	%	-42	%
Income Before Taxes				56,623		3,694		60,317		72,816		-		72,816		-22	%	-14	%
Provision for Income Taxes (A)				13,023		1,348		14,371		19,039				19,039		-32	%	-21	%
Net Income		$		43,600		2,346		45,946		53,777		-		53,777		-19	%	-11	%
Earnings Per Share- Diluted (A)		$		0.74		0.04		0.78		0.90		-		0.90		-18	%	-10	%
Average Shares - Diluted				58,790		58,790		58,790		59,756		59,756		59,756
SIX MONTHS ENDED OCTOBER 31,
				2015						2014						% Change
			US GAAP			Adjustments (A)		Adjusted		US GAAP		Adjustments (A)		Adjusted		US GAAP		Adjusted excl. FX
Revenue		$		856,343				856,343		914,889				914,889		-6	%	-2	%
Costs and Expenses
	Cost of Sales			236,493				236,493		258,594				258,594		-9	%	-5	%
	Operating and Administrative			482,485				482,485		505,062				505,062		-4	%	0	%
	Restructuring Charges (Credits) (A)			7,119		(7,119	)	-		(155	)	155		-
	Amortization of Intangibles			25,072				25,072		25,754				25,754		-3	%	1	%
	Total Costs and Expenses			751,169		(7,119	)	744,050		789,255		155		789,410		-5	%	-1	%
Operating Income				105,174		7,119		112,293		125,634		(155	)	125,479		-16	%	-6	%
	Operating Margin			12.3	%			13.1	%	13.7	%			13.7	%
Interest Expense				(7,897	)			(7,897	)	(8,650	)			(8,650	)	-9	%	-9	%
Foreign Exchange (Loss) Gain				(42	)			(42	)	45				45
Interest Income and Other				1,308				1,308		1,418				1,418		-8	%	-8	%
Income Before Taxes				98,543		7,119		105,662		118,447		(155	)	118,292		-17	%	-6	%
Provision for Income Taxes (A)				22,486		2,767		25,253		31,024		(24	)	31,000		-28	%	-14	%
Net Income		$		76,057		4,352		80,409		87,423		(131	)	87,292		-13	%	-3	%
Earnings Per Share- Diluted (A)		$		1.29		0.07		1.36		1.46		-		1.46		-12	%	-1	%
Average Shares - Diluted				59,090		59,090		59,090		59,777		59,777		59,777

See the accompanying Notes to Unaudited Financial Statements for a description of each Adjustment.

JOHN WILEY & SONS, INC.
FOR THE SECOND QUARTER AND SIX MONTHS ENDED
OCTOBER 31, 2015 AND 2014
RECONCILIATION OF US GAAP TO ADJUSTED EPS - DILUTED (UNAUDITED)
		Second Quarter Ended				Six Months Ended
		October 31,				October 31,
		2015		2014		2015		2014
US GAAP Earnings Per Share - Diluted		$	0.74	$	0.90	$	1.29	$	1.46
Adjusted to exclude the following:
	Restructuring Charges (A)		0.04		-		0.07		-
Adjusted Earnings Per Share - Diluted		$	0.78	$	0.90	$	1.36	$	1.46

	NOTES TO UNAUDITED FINANCIAL STATEMENTS
Adjustments:
(A)	RESTRUCTURING CHARGES: The adjusted results for the three and six months ended October 31, 2015 exclude restructuring charges related to the Company's Restructuring and Reinvestment Program of $3.7 million or $0.04 per share, and $7.1 million or $0.07 per share, respectively. The adjusted results for the six months ended October 31, 2014 exclude a restructuring credit of $(0.2) million.

Non-GAAP Financial Measures:

In addition to providing financial results in accordance with GAAP, the Company has provided adjusted financial results that exclude the impact of other nonrecurring items described in more detail throughout this press release. These non-GAAP financial measures are labeled as "Adjusted" and are used for evaluating the 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. Unless otherwise noted, adjusted amounts in the attached schedules include foreign exchange.

JOHN WILEY & SONS, INC.
UNAUDITED SEGMENT RESULTS
FOR THE SECOND QUARTER AND SIX MONTHS ENDED
OCTOBER 31, 2015 AND 2014
(in thousands)
SECOND QUARTER ENDED OCTOBER 31,
		2015								2014						% Change
			US GAAP			Adjustments (A)		Adjusted		US GAAP		Adjustments (A)		Adjusted		US GAAP		Adjusted excl. FX
Revenue
Research	$			238,388		-		238,388		264,825		-		264,825		-10	%	-5	%
Professional Development				99,166		-		99,166		105,667		-		105,667		-6	%	-3	%
Education				95,808		-		95,808		106,480		-		106,480		-10	%	-8	%
Total	$			433,362		-		433,362		476,972		-		476,972		-9	%	-5	%
Direct Contribution to Profit
Research	$			110,881		496		111,377		122,744		-		122,744		-10	%	-5	%
Professional Development				41,497		195		41,692		37,597		-		37,597		10	%	14	%
Education				35,849		205		36,054		40,741		-		40,741		-12	%	-9	%
Total	$			188,227		896		189,123		201,082		-		201,082		-6	%	-2	%
Contribution to Profit (After Allocated Shared Services
and Admin. Costs)
Research	$			67,099		496		67,595		80,218		-		80,218		-16	%	-11	%
Professional Development				18,757		195		18,952		9,799		-		9,799		91	%	95	%
Education				15,366		205		15,571		19,729		-		19,729		-22	%	-19	%
Total	$			101,222		896		102,118		109,746		-		109,746		-8	%	-3	%
Unallocated Shared Services and Admin. Costs				(40,957	)	2,798		(38,159	)	(33,742	)	-		(33,742	)	21	%	19	%
Operating Income	$			60,265		3,694		63,959		76,004		-		76,004		-21	%	-13	%
Total Shared Services and Admin. Costs by Function
Distribution and Operation Services	$			(22,111	)	1,208		(20,903	)	(22,706	)	-		(22,706	)	-3	%	-3	%
Technology and Content Management				(62,030	)	(379	)	(62,409	)	(60,181	)	-		(60,181	)	3	%	8	%
Finance				(11,318	)	(496	)	(11,814	)	(12,644	)	-		(12,644	)	-10	%	-2	%
Other Administration				(32,503	)	2,465		(30,038	)	(29,547	)	-		(29,547	)	10	%	6	%
Total	$			(127,962	)	2,798		(125,164	)	(125,078	)	-		(125,078	)	2	%	4	%
SIX MONTHS ENDED OCTOBER 31,
		2015								2014						% Change
			US GAAP			Adjustments (A)		Adjusted		US GAAP		Adjustments (A)		Adjusted		US GAAP		Adjusted excl. FX
Revenue
Research	$			475,778		-		475,778		519,695		-		519,695		-8	%	-3	%
Professional Development				197,831		-		197,831		197,994		-		197,994		0	%	3	%
Education				182,734		-		182,734		197,200		-		197,200		-7	%	-5	%
Total	$			856,343		-		856,343		914,889		-		914,889		-6	%	-2	%
Direct Contribution to Profit
Research	$			217,694		866		218,560		237,478		(185	)	237,293		-8	%	-3	%
Professional Development				82,778		205		82,983		70,509		245		70,754		17	%	20	%
Education				59,137		194		59,331		69,304		51		69,355		-15	%	-11	%
Total	$			359,609		1,265		360,874		377,291		111		377,402		-5	%	0	%
Contribution to Profit (After Allocated Shared Services
and Admin. Costs)
Research	$			132,668		866		133,534		150,177		(185	)	149,992		-12	%	-5	%
Professional Development				37,766		205		37,971		17,322		245		17,567		118	%	119	%
Education				20,067		194		20,261		28,425		51		28,476		-29	%	-25	%
Total	$			190,501		1,265		191,766		195,924		111		196,035		-3	%	3	%
Unallocated Shared Services and Admin. Costs				(85,327	)	5,854		(79,473	)	(70,290	)	(266	)	(70,556	)	21	%	19	%
Operating Income	$			105,174		7,119		112,293		125,634		(155	)	125,479		-16	%	-6	%
Total Shared Services and Admin. Costs by Function
Distribution and Operation Services	$			(43,341	)	1,965		(41,376	)	(46,924	)	384		(46,540	)	-8	%	-6	%
Technology and Content Management				(123,967	)	773		(123,194	)	(121,571	)	(557	)	(122,128	)	2	%	5	%
Finance				(24,067	)	(425	)	(24,492	)	(26,215	)	(93	)	(26,308	)	-8	%	-2	%
Other Administration				(63,060	)	3,541		(59,519	)	(56,947	)	-		(56,947	)	11	%	9	%
Total	$			(254,435	)	5,854		(248,581	)	(251,657	)	(266	)	(251,923	)	1	%	3	%

(A) See the accompanying Notes to Unaudited Financial Statements for a description the Adjustment.

Note: As part of Wiley’s restructuring and reorganization program the Company consolidated certain decentralized business functions (Sales Support, Marketing Services, etc.) into global shared service functions. These newly centralized service groups enable significant cost reduction opportunities, including efficiencies gained from standardized technology and centralized management. The cost of these functions were previously reported as direct operating expenses in each business segment but are now reported within the shared service functions and then allocated to each business segment above. Prior year amounts have been restated to reflect the same reporting methodology.

JOHN WILEY & SONS, INC.
SEGMENT REVENUE by PRODUCT/SERVICE
FOR THE SECOND QUARTER AND SIX MONTHS ENDED
OCTOBER 31, 2015 AND 2014
(in thousands)
		Second Quarter					Six Months
		Ended October 31,		% of	% Change		Ended October 31,		% of	% Change
		2015	2014	Revenue	excl. FX		2015	2014	Revenue	excl. FX
RESEARCH
Journal Revenue
Journal Subscriptions	$	162,796	172,146	68%	-1%	$	320,004	340,970	67%	-1%
Author-Funded Access		6,180	5,067	3%	30%		11,872	10,496	2%	22%
Licensing, Reprints, Backfiles, and Other		36,484	49,056	15%	-20%		75,797	92,554	16%	-12%
Total Journal Revenue		205,460	226,269	86%	-4%		407,673	444,020	86%	-2%
Books and References:
Print Books		23,065	26,161	10%	-8%		46,560	51,162	10%	-5%
Digital Books		7,750	9,800	3%	-18%		16,537	19,056	3%	-7%
Licensing and Other		2,113	2,595	1%	-15%		5,008	5,457	1%	1%
Total Books and References Revenue		32,928	38,556	14%	-11%		68,105	75,675	14%	-5%
Total Revenue	$	238,388	264,825	100%	-5%	$	475,778	519,695	100%	-3%
PROFESSIONAL DEVELOPMENT
Knowledge Services:
Print Books	$	49,246	53,028	50%	-4%	$	97,958	105,891	50%	-4%
Digital Books		11,938	14,120	12%	-13%		22,571	24,974	11%	-8%
Online Test Preparation and Certification		6,269	5,538	6%	13%		14,175	11,200	7%	27%
Other Knowledge Service Revenue		5,467	6,541	6%	-15%		10,905	12,313	6%	-9%
		72,920	79,227	74%	-5%		145,609	154,378	74%	-3%
Talent Solutions:
Assessment		15,758	15,187	16%	4%		28,985	28,309	15%	2%
Corporate Learning		10,488	11,253	11%	7%		23,237	15,307	12%	67%
		26,246	26,440	26%	5%		52,222	43,616	26%	25%
Total Revenue	$	99,166	105,667	100%	-3%	$	197,831	197,994	100%	3%
EDUCATION
Books:
Print Textbooks	$	31,059	41,700	32%	-22%	$	65,603	86,235	36%	-20%
Digital Books		8,889	8,500	9%	12%		14,643	14,204	7%	9%
		39,948	50,200	42%	-16%		80,246	100,439	44%	-16%
Custom Material		12,290	16,400	13%	-25%		35,033	35,972	19%	-3%
Course Workflow (WileyPLUS)		18,446	18,400	19%	2%		19,466	19,714	11%	2%
Online Program Management (Deltak)		23,195	19,699	24%	18%		43,697	35,936	24%	22%
Other Education Revenue		1,929	1,781	2%	8%		4,292	5,139	2%	-16%
Total Revenue	$	95,808	106,480	100%	-8%	$	182,734	197,200	100%	-5%
Note: Segment Revenue Categorization

UNAUDITED ADJUSTED CONTRIBUTION TO PROFIT
INCLUDING ALLOCATED SHARED SERVICES AND ADMINISTRATIVE COSTS
FOR THE SECOND QUARTER AND SIX MONTHS ENDED
OCTOBER 31, 2015 AND 2014
(in thousands)
	Second Quarter Ended								Six Months Ended
	October 31,								October 31,
	2015		2014		% Change		% Change excl. FX		2015		2014		% Change		% Change excl. FX
Research:
Direct Contribution to Profit	110,881		122,744		-10	%	-5	%	217,694		237,478		-8	%	-3	%
Restructuring Charges (Credits) (A)	496		-						866		(185	)
Adjusted Direct Contribution to Profit	111,377		122,744		-9	%	-5	%	218,560		237,293		-8	%	-3	%
Allocated Shared Services and Admin. Costs:
Distribution and Operation Services	(10,085	)	(11,441	)	-12	%	-7	%	(20,264	)	(23,419	)	-13	%	-7	%
Technology and Content Management	(25,749	)	(24,632	)	5	%	7	%	(49,805	)	(49,575	)	0	%	4	%
Occupancy and Other	(7,948	)	(6,453	)	23	%	31	%	(14,957	)	(14,307	)	5	%	12	%
Adjusted Contribution to Profit (after allocated	67,595		80,218		-16	%	-11	%	133,534		149,992		-11	%	-5	%
Shared Services and Admin. Costs)
Professional Development:
Direct Contribution to Profit	41,497		37,597		10	%	13	%	82,778		70,509		17	%	20	%
Restructuring Charges (A)	195		-						205		245
Adjusted Direct Contribution to Profit	41,692		37,597		11	%	14	%	82,983		70,754		17	%	20	%
Allocated Shared Services and Admin. Costs:
Distribution and Operation Services	(6,783	)	(7,969	)	-15	%	-11	%	(13,656	)	(16,270	)	-16	%	-12	%
Technology and Content Management	(10,254	)	(12,227	)	-16	%	-14	%	(20,058	)	(23,172	)	-13	%	-11	%
Occupancy and Other	(5,703	)	(7,602	)	-25	%	-21	%	(11,298	)	(13,745	)	-18	%	-14	%
Adjusted Contribution to Profit (after allocated	18,952		9,799		93	%	95	%	37,971		17,567		116	%	119	%
Shared Services and Admin. Costs)
Education:
Direct Contribution to Profit	35,849		40,741		-12	%	-10	%	59,137		69,304		-15	%	-11	%
Restructuring Charges (A)	205		-						194		51
Adjusted Direct Contribution to Profit	36,054		40,741		-12	%	-9	%	59,331		69,355		-14	%	-11	%
Allocated Shared Services and Admin. Costs:
Distribution and Operation Services	(3,740	)	(3,213	)	16	%	26	%	(7,165	)	(6,545	)	9	%	16	%
Technology and Content Management	(12,592	)	(14,197	)	-11	%	-10	%	(23,810	)	(27,536	)	-14	%	-11	%
Occupancy and Other	(4,151	)	(3,602	)	15	%	18	%	(8,095	)	(6,798	)	19	%	22	%
Adjusted Contribution to Profit (after allocated	15,571		19,729		-21	%	-19	%	20,261		28,476		-29	%	-25	%
Shared Services and Admin. Costs)
Total Adjusted Contribution to Profit (after	102,118		109,746		-7	%	-3	%	191,766		196,035		-2	%	3	%
allocated Shared Services and Admin. Costs)
Unallocated Shared Services and Admin. Costs:
Unallocated Shared Services and Admin. Costs	(40,957	)	(33,742	)	21	%	28	%	(85,327	)	(70,290	)	21	%	28	%
Restructuring Charges (Credits) (A)	2,798		-						5,854		(266	)
Adjusted Unallocated Shared Services and Admin. Costs	(38,159	)	(33,742	)	13	%	19	%	(79,473	)	(70,556	)	13	%	19	%
Adjusted Operating Income	63,959		76,004		-16	%	-13	%	112,293		125,479		-11	%	-6	%

(A) See the accompanying Notes to Unaudited Financial Statements for a description of each Adjustment.

Note: As part of Wiley’s restructuring and reorganization program the Company consolidated certain decentralized business functions (Sales Support, Marketing Services, etc.) into global shared service functions. These newly centralized service groups enable significant cost reduction opportunities, including efficiencies gained from standardized technology and centralized management. The cost of these functions were previously reported as direct operating expenses in each business segment but are now reported within the shared service functions and then allocated to each business segment above. Prior year amounts have been restated to reflect the same reporting methodology.

JOHN WILEY & SONS, INC.
UNAUDITED STATEMENTS OF FINANCIAL POSITION
(in thousands)
		October 31,		April 30,
		2015	2014	2015
Current Assets
Cash & cash equivalents	$	308,235	198,912	457,441
Accounts receivable		183,447	204,424	147,183
Inventories		58,154	70,941	63,779
Prepaid and other		68,951	66,233	72,516
Total Current Assets		618,787	540,510	740,919
Product Development Assets		55,432	58,851	69,589
Technology, Property and Equipment		205,362	190,811	193,010
Intangible Assets		915,174	992,618	917,621
Goodwill		965,571	1,003,290	962,367
Income Tax Deposits		59,810	64,036	57,098
Other Assets		62,691	62,659	63,639
Total Assets		2,882,827	2,912,775	3,004,243
Current Liabilities
Short-term debt		150,000	50,000	100,000
Accounts and royalties payable		161,282	180,033	161,465
Deferred revenue		150,716	163,902	372,051
Accrued employment costs		61,790	66,737	93,922
Accrued income taxes		9,654	10,127	9,484
Accrued pension liability		4,602	4,625	4,594
Other accrued liabilities		55,355	52,976	62,167
Total Current Liabilities		593,399	528,400	803,683
Long-Term Debt		739,051	749,513	650,090
Accrued Pension Liability		196,094	155,497	209,727
Deferred Income Tax Liabilities		203,499	234,685	198,947
Other Long-Term Liabilities		83,111	82,278	86,756
Shareholders' Equity		1,067,673	1,162,402	1,055,040
Total Liabilities & Shareholders' Equity	$	2,882,827	2,912,775	3,004,243

JOHN WILEY & SONS, INC.
UNAUDITED STATEMENTS OF FREE CASH FLOW
(in thousands)
		Six Months Ended
		October 31,
		2015		2014
Operating Activities:
Net income	$	76,057		87,423
Amortization of intangibles		25,072		25,754
Amortization of composition costs		19,967		20,810
Depreciation of technology, property and equipment		32,820		30,510
Restructuring charges (credits)		7,119		(155	)
Restructuring payments		(18,339	)	(16,267	)
Share-based compensation expense		8,112		8,118
Excess tax benefits from share-based compensation		(527	)	(1,774	)
Royalty advances		(45,553	)	(47,997	)
Earned royalty advances		60,163		64,939
Other non-cash charges and credits		18,115		20,436
Change in deferred revenue		(225,115	)	(223,731	)
Net change in operating assets and liabilities		(84,410	)	(62,202	)
Cash Used for Operating Activities		(126,519	)	(94,136	)
Investments in organic growth:
Composition spending		(20,033	)	(16,934	)
Additions to technology, property and equipment		(46,177	)	(29,584	)
Free Cash Flow		(192,729	)	(140,654	)
Other Investing and Financing Activities:
Acquisitions, net of cash		(16,681	)	(172,145	)
Escrowed proceeds from sale of consumer publishing programs		-		1,100
Repayment of long-term debt		(112,641	)	(228,051	)
Borrowings of long-term debt		201,600		325,070
Borrowings of short-term Debt		50,000		-
Change in book overdrafts		285		(8,123	)
Cash dividends		(35,166	)	(34,402	)
Purchase of treasury shares		(44,703	)	(41,534	)
Proceeds from exercise of stock options and other		465		18,876
Excess tax benefits from share-based compensation		527		1,774
Cash Provided by (Used for) Investing and Financing Activities		43,686		(137,435	)
Effects of Exchange Rate Changes on Cash		(163	)	(9,376	)
Decrease in Cash and Cash Equivalents for Period	$	(149,206	)	(287,465	)
RECONCILIATION TO GAAP PRESENTATION
Investing Activities:
Composition spending	$	(20,033	)	(16,934	)
Additions to technology, property and equipment		(46,177	)	(29,584	)
Acquisitions, net of cash		(16,681	)	(172,145	)
Escrowed proceeds from sale of consumer publishing programs		-		1,100
Cash Used for Investing Activities	$	(82,891	)	(217,563	)
Financing Activities:
Cash Used for Investing and Financing Activities	$	43,686		(137,435	)
Excluding:
Acquisitions, net of cash		(16,681	)	(172,145	)
Escrowed proceeds from sale of consumer publishing programs		-		1,100
Cash Provided by Financing Activities	$	60,367		33,610

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 or provided by operating activities, investing activities and financing activities, as an indicator of performance.