Welcome to the John Wiley & Sons conference call. Today's conference is being recorded. Before introducing Will Pesce, President and Chief Executive Officer, I would like to remind you that this discussion will contain forward-looking statements. You should not rely on such statements as actual results may differ materially, and are subject to factors that are discussed in detail in the company's 10-K and 10-Q filings with the SEC. The company does not undertake any obligation to update or revise forward-looking statements to reflect subsequent events or circumstances. Mr. Pesce, please go ahead.

Good afternoon and welcome to Wiley's third quarter conference call. I'm with Ellis Cousens. I'll provide an overview. Then we will respond to your comments and questions. Before I move into my formal remarks, I want to acknowledge that we may have caused some confusion with schedules that are attached to the earnings release that was issued earlier today. I should point out that those of you who received the earnings release directly from Wiley via email, all of those scheduled are correct, for those of you who have received them either on a website or through Business Wire, there are three schedules, schedule one under summary of operations nine months is fine. Schedule two, summary of operations third quarter, actually has nine months of data in it, not the quarter, and in schedule three for the segment results there is a similar problem. So we have reissued that information, and there is nothing specifically wrong with any of the reported numbers other than in those schedules where as I noted, nine months data ended up in the third quarter information. And whereas we feel good about our third quarter, I think you would have agreed that having nine months data in the third quarter is not an accurate representation of our actual performance. So all of the narratives in the earnings release, is correct, so the problem was just what I outlined. So moving into some of the specifics, third quarter revenues were $429 million an increase of 45% over prior year, excluding Blackwell revenue increased 6%, or 3% excluding favorable foreign exchange. EPS of $0.67, exceeded prior by 18%, excluding certain tax benefits and Blackwell, adjusted EPS increased 7% in the quarter. Year-to-date revenue of $1.2 billion increased 47% over prior year. Excluding Blackwell year-to-date revenue increased 6%…

And thank you Mr. Pesce. (Operator Instructions). And we will take our first question from Drew Crum from Stifel Nicolaus.

Good morning everyone. I want to start with the Blackwell acquisition. Can you talk about what -- where the source of upside was in the quarter relative to your guidance heading in to the quarter?

Yeah, Drew this is Ellis. As we have experienced probably -- in probably two at least of the three quarters of the year thus far. A couple of things are benefiting us. One is some of the tax benefits related to the acquisition itself. We talked earlier in the year a number of times about the tax planning strategies we used. So some of that is coming from tax, some of it is also coming from lower interest rates as you know we have hedged a significant portion of the debt to try and reduce risk cover related to potential upward volatility and raise. It has turned out the other way, certainly but we still have a piece of debt that is floating so we benefited from a decline in interest rates to some degree. It’s principally those two things that are sort of making the way through. A little bit on the operating side as well, a little bit of timing related to some of the integration costs that will be pushed a little bit further out and where the integration has gone well more. More sort of keeping up with what we had planned to do in terms of accomplishing in the integration. Some of the spending is going to happen a little bit later it’s not a lot but principally it’s those three things focusing mostly on the first two.

Okay so can we assume that none of the other costs or revenue synergies you guys have discussed benefited this quarter?

No certainly the revenue synergies will come principally later on at least until after the platforms are combined. We need a combined offering of centric content customers as Will described in his remarks that will come somewhere around middle of calendar year coming, and then even more so in the beginning of the following calendar year meaning January 2009. It’s from that point forward that we'll see more of the synergies. We have seen a little bit coming out of some of the back file work that we've done with respect to Blackwell but there is not a lot of that for the first nine months.

Okay.

Drew, I would add one another aspect of this.

Sure.

This is Will, on the Blackwell book program, and of course the journal program is by far the largest source of revenue. However, they do have a terrific book program and we believed that by bringing the two companies together our colleagues at Blackwell would benefit from Wiley’s global sales and marketing network. And we are already beginning to experience some of the uptick on the book side of things, as a result of bringing the two companies together, particularly in Asia. So where as it is not a material part of our results so far this fiscal year as a positive leading indicator is that we're already beginning to get the benefit of that and we look forward to that happening in the future. The other thing that I highlighted in previous calls that I would like to emphasize again here because -- as I said early, I really appreciate all that our colleagues are doing here. When you are going through a transition of this magnitude, which basically touches just about every part, every location that Wiley had and that Blackwell has. If you look comprehensively across all of our businesses, there is a significant effect. You could imagine from time-to-time that the potential exists for some kind of disruption in the day-in and day-out things that you are doing to maintain your business. I think our colleagues have done a great job in strengthening -- maintaining and strengthening relationships with our society partners. And each quarter I highlight some of the agreements that are either new or where we have extended some of those agreements. Whereas, you will not find again the P&L benefit of that in this fiscal year, it's critically important that we continue to do that. It's a significant accomplishment that we have done that in the current fiscal year for the benefit of future fiscal years.

Will, can you address the renewal rates? Maybe quantify the renewal rates on the Blackwell side of the business, post acquisitions?

Actually, if you're talking about -- usually when people talk about renewal rates they talk about it for customers, I can tell you that the renewal rate on our society partnerships is outstanding. I think I'm aware of one maybe two that we lost and the revenue consequences of that frankly relative to the nearly 60 or so, that we have been able to either renew or extend is all very positive. In terms of renewal for the calendar year, what I can tell you so far is that everything looks fine there. They look like healthy renewal rates. I don't have a specific number I can quote, but that process seems to be going according to expectations.

Okay, I want to shift gears to the STM business, and you may have answered this in your prepared remarks, but the U.S. business is growing at a lower single-digit clip year-to-date. I know coming off of the second quarter, you mentioned that the publication schedule was back-end loaded this fiscal year, are we going to see all of that in the fourth quarter? Or is there something else going that maybe mitigating the growth here?

Yeah, I think there are few items, and talking specifically about U.S. STM revenue, as opposed to global STM revenue, because I do think you have some regional differences here, but when we report our numbers in the earnings release, we breakout the U.S. part of it. And I think there are few things. One is I'd use the word sluggish top line growth relative to what I consider to be very strong prior year results and just to remind everyone. Last year, our U.S. STM revenue was up 9% in the third quarter and for the nine months. It was a particularly strong year. So the basis of comparison there is having some effect on this, although that's not the entire reason. For the nine months, if you go through January, our U.S. STM book revenue was essentially flat with the prior year, and that is partly due to publication scheduled, not entirely due to it, but partly due to it, and we are anticipating an uptick on the book side of things, because of the number of books that are publishing in the fourth quarter. And when I say that, that's not only in the United States, we also have this strong fourth quarter publication scheduled for STM books in Europe. So, we are anticipating that we'll get some of that back then. I would also say that, another contributing factor in terms of year-on-year comparisons is that our revenue from commercial reprints and the advertising market is certainly below our expectations and is constraining the year-on-year growth a bit. To pick out one example of that is that reflects some of the market conditions in the pharmaceuticals industry. Now commercial reprints and advertising is not a huge part of our business relative to other revenue sources, but…

Very good. Let me sneak one more in. Is there any update on CapEx guidance or additions to product development assets?

Well you will see that in the Q that will be filed at the end of the day.

Okay.

Product development, no. The capital spending, you will see an adjustment downward there.

Okay. Thanks guys.

You are welcome.

Thank you so much. (Operator Instructions). And we will take our next question from David Lewis from JPMorgan.

Hi guys.

Hello.

I was wondering if you guys could touch on the economic environment. I know we had addressed this before and you guys have a resilient model. But things have gotten worse since three months ago and specifically I will touch on two things. One obviously states are pinched right now for funding or some states are and I know that is important libraries, which in turn funds some of this STM spending. The second related area the smaller [herald] segment and others thought that with freeze in the credit markets and that continuing to get worse although we saw signs of potentially some relief today there could be issues with students acquiring loans through the Blackwell school, private loans. And I know that it is a much smaller piece of the market but I was wondering if you could touch on those two things in light of the economic environment.

Sure Dave, this is Will. And if you don’t mind what I would like to do is respond to your question about talking about actually all three of our businesses. It is in [essence] PT but let me just round it out and speak to all three businesses and try to highlight the factors here. We have always believed and we continue to believe that relative to other businesses and industries Wiley has a collection of businesses that are somewhat resistant not totally resistant to downturns in the economy. And that has been -- we have a well documented history of that and I don’t have any reason to believe that the current economic conditions will have a material affect on our business. That does not mean it will not have any effect on our business and some of the things that we look at and what I would like to call to your attention is to the extent that governments have lowered tax receipts which is obviously a characteristic of a down cycle. Lower tax receipts usually translate to less support for libraries, in many cases public higher education and areas like that. And to the extent that library budgets get even tighter that over time and has not had an effect on us so far but it’s depending on how long we are operating in those conditions. We could start seeing an effect actually initially on our book programs because I think what happens historically -- what happens there is that libraries will tend to maintain their access to our period view journals and they may delay some purchases of book programs. We don’t have evidence of that, as we speak, but that certainly is a possibility down the road. And when you get out of the library…

Okay. That's great. Thanks. Well, could you also touch on -- I have heard you speak about the scenarios or how Wiley is positioned as content moves online in Higher Ed as well as STM. Could you talk about how you see that the P/T business evolving as content moves online? We touched on it a little bit with Kindle last time, your response was its early days, but also in light of I believe Barnes or -- I know that you guys have had a great success, this is a little bit on the same topic but a little bit off subject. You had a very great success with your Amazon, related to that I believe Barnes and/or [Borders] increased their online program recently?

Yes, thank you for that question. Frankly, we go through -- our fiscal year ends in April and we have an ongoing strategic plan process in this particular week. At our March meeting we present an update to our Board of Directors and of course that is preceded by lots of dialogue around the world in terms of strategic plans and operating budgets and all this. And I want to be very clear that I think our Professional/Trade colleagues have done a wonderful job adapting to changes in the market place enabled by technology. Some people could say if you are stepping back and looking at to all of those guys in STMS or Higher Ed were ahead of Professional/Trade. And that is not because of people inside our organizations, because of the way the market was developing and evolving. I have always said STMS, it was a natural outgrowth of trying to improve the productivity of research and the discoverability if you will of content of making more access to more content than ever before in our history. And it was just a very natural evolution there in Higher Ed. There are so many benefits to professors and students in terms of making, having the technology enable teaching and learning now. The adoption of technology in Higher Ed has been slower than the research community. But you can see that that is beginning to build and Professional/Trade I think what happened is many people were focused perhaps too much on ebook technology and these reading devices. The expectations were really high and it just seems that time and again people were disappointed that it wasn’t being accepted as much. Well the fact of the matter is there is a market there. It is now I am talking about specifically…

That’s great. Just a couple more. I think there was a recent Book Store Conference in the past few weeks and chatter there was that the book stores are scared and I guess it is -- there is a couple of [nuggets] involved with that that I believe a lot of professors or high percentage of college professors, which have been a constraint in terms of adoption, because there they have to sign on their students, are retiring in the next five years. Have we reached -- it seems like obviously WileyPLUS is doing very well. Have we really reached an inflection point with Higher Education and online adoption at this point? I wanted to hear your thoughts there.

Well, I don’t think we're quite there yet to say that there is being massive adoption of technology in the classroom. Those of you who have engaged with us over the years have often heard me say that, where people have missed these things in the past. Is that they've gotten so wrapped up with the technology that they have forgotten that they are human beings involved in the process. Whether we feel good or bad about it, the fact of the matter is that there is inertia in place here. And there are people who for a longtime have been used to delivering Higher Education in a particular way and for them to change. First is you have to have a compelling reason in terms of products and services that make sense. Two is there needs to be an investment in the training. So that people, in this case the professors, are able to adopt the technology and to use it effectively. And thirdly, there needs to be some supporting infrastructure and the fact of the matter is the technology that’s available is way ahead of what was being invested. I think throughout Higher Education to enable this to happen. So the process has been slow and steady. And it's important to say slow and steady with each semester that passes I will become more and more confident that people are seeing the lasting and enduring value that can come through the effective application of technology to teaching and learning and let me give you a couple of examples of that. My interest and excitement in this is not only because I believe that there is significant revenue and profit opportunities for Wiley's investment in Higher Education. I absolutely believe that there is tremendous value added that will come…

No. It is great.

But I think that is the essence of what we are working on.

Okay thanks. Just one or two more quick ones. The initial revenue in cost synergies were one year out at this point and they were $90 million and $140 million. Can you give us a little bit of feedback on how uncomfortable you are with those? When do you think that they perhaps can be sooner or later, one year in it?

Yeah David, this is Ellis. The synergies that you cite are accumulative over the first three years. And we are still on track to realize the cost synergies and the revenue synergies. We spoke a little bit about that earlier on as part of the discussion. As I said in terms of the integration of the two businesses some of the integration spending is delayed a bit or a little bit later than we had initially planned. That does not affect the ultimate level of savings that we will achieve. So just to be clear again is that the numbers you cite are accumulative over three years. I am still confident as to the run rate of savings and synergies that we will expect at the end of the third year. So as we exit three years. And I can note that in fiscal year 2010, is the first year that I am looking forward to as a year that has no integration activity associated with it. So that year, next year is a big year for us to sort of essentially wrap up all of this integration in fiscal ’09. So that by the time we exit ’09 and we are in our fiscal '10 which begins May 1st in 2009, there will be no more substantially no integration activity going on. The two businesses will be fully integrated together operating as a single business and unit and we'll be on our path to realizing those annualized savings that we've noted in that year which will actually be at the end of the third year of the acquisition.

Okay, great. Thanks. And you touched on the near-term, the revenue synergies when we might see them. Should we still expect not to see cost synergies until the beginning of the first quarter?

There are -- so just to be clear, there are cost savings that are integrated into this year’s results but the issue is that when you net against that the integration expense to achieve ultimately the goal of fully integrated cost savings they are about equal. So nothing net sort of falls through this year. That will begin to swing next year a bit but again clearly in 2010 there will be no integration costs just savings.

Great, okay. Thanks guys

You're welcome.

Thank you. (Operator Instructions). And we'll take our next question from Drew Crum from Stifel Nicolaus.

Just one the -- one housecleaning item here. Just give us an update on uses of cash you have got $220 million on the balance sheet. Seems higher than usual for you guys and it looks you bought some shares back in the quarter?

I appreciate your asking that question, Drew as I was actually looking for the opportunity to respond because it is quite frankly a significantly higher number than you could have imagine a company that’s carrying something just $0.5 billion in debt why in the world would they have $220 million in cash sitting on the balance sheet. There are number of pieces to that and I'm sorry this will be slightly longer answer than you might have expected.

Okay.

But of that $220 million, just to sort of set the stage here, 20 of that is in overdraft, which just relates to fiscally when the balance sheet date occurs relative to what’s clearing fee accounts. So we literally have $200 million in cash sitting in various bank accounts principally not in the U.S. So, there is only about $9 million worth of cash sitting in the U.S. The remainder of the 200 is -- which is a $191 million is all outside of the U.S. and principally sitting within Blackwell and a piece of it is also sitting within the U.K. as well, or let's just say non-U.S., non-Blackwell. So you've got a number of things that work here, one is, as we've talked in the past about these whitewash rules regarding our ability to extract the cash out of Blackwell specifically. And we went through a whitewash procedure sometime ago to extract the initial cash that we had acquired with Blackwell, which you might recall is a GBP100 million, so that cash was -- for the most part utilized within and extracted in that iteration. Since then as you know, and as I think you've noted in some of your own notes is that we have -- as you would expect, a very strong cash flow quarter, this past quarter, which is no surprise to anyone. Maybe the magnitude is, but as you know much of our cash received from our journals business comes in the period December, January and a bit more into February and it sort of tails of pretty significantly into March. So that cash is relatively recent coming into the company, our ability to whitewash that cash and use it effectively outside of Blackwell is somewhat inhibited by the statute. However, sort of on…

Okay, great. Thanks, Ellis.

You're welcome.

Thank you, and now for our next question, we'll go to [Carlston Savoy with Princeton] Capital Management.

Hi, guys. I just want to follow-up with the cash question, Ellis on the reduction of long-term debt. It looks like long-term term debt dropped about $100 million, and if that's correct or not, and can you expect to give us a little bit of forecast going to the calendar year, can we expect about $50 million to $100 million drop in debt going for the rest of year?

As you may recall, our peak cash quarter that we report is January. So between January and April, in fact the cash kind of goes a bit sideways to down. So, it will actually be net borrowed a little bit higher at the end of the fiscal year relative to the end of the third quarter. I think I stated it somewhere in the past that we expect to pay down an average of -- forgetting exactly what the numbers are $50 million or so over the first three years. I can tell you that we would expect significant pay down in debt if you measure end of fiscal year to end of fiscal year kind of going forward. Again we have some of these issues to deal with in terms of access of the cash that resides in Blackwell. So the timing of that might be a little bit difficult relative to year-end -- excuse me, relative to the quarter-end as apposed to the April year-end we'll have some more time to work on that. But again we still have to -- we're generating a significant amount of cash in Europe, in U.K. in particular, and irrespective of the whitewash we are working on tax efficient strategies to get the cash back to the U.S. to reduce debt. In the interim, fortunately at least we are earning at least equal to or in some cases better than our costs -- our interest costs here in the U.S. So we'll be working on tax strategies to get that down. I would look at it rather than looking at what the absolute pay down in debt is. In the short-term I'd look at more of our net debt position is at any point in time to get a feel for how well we're performing against what our cash projections are and what are as I say our net debt position is.

Thank you and now for our last question. We will go to Chris Joseph from Emery Investment Management. Chris Joseph - Emery & Downing : Hey Mr. Pesce, it is Chris Joseph at [Emery & Downing]. My question is also about the debt. Given the timing issues will there be a problem where you might need to access the credit markets before you get the cash back from Europe and would represent a problem?

As we, yes sorry. Sorry to break in there. Chris Joseph - Emery & Downing: You can go ahead.

Yeah this is Ellis. We have revolving credit facilities both here and in the U.S. So we have access to -- more than sufficient access to capital here or there. So it would not represent new borrowings per se meaning having a new cap, a new line of credit. These are existing lines of credit. We utilize them over the course of the year to manage certainly the cash flow cycle of the business from high to low. As I mentioned before, we are at a peak in terms of cash generation around the end of the calendar year in to the start of the next calendar year. So we have no need for additional lines of credit and the purpose of the revolvers is just that it is just essentially manage cash against operating requirements of the business over the course of each fiscal year. So we are in quite good shape there. Chris Joseph - Emery & Downing: Okay. Great. Thanks.

Welcome.

And we have no further questions. Mr. Pesce I will turn the call back to you for any closing remarks.

Well, thank you very much for your thoughtful questions and your continued interest in our company and its business. We look forward to speaking with your in June when we report our full year results and provide our outlook for the forthcoming year. Thank you very much.

Thank you. Ladies and gentlemen that does conclude today's conference. We appreciate your participation and have a wonderful day.