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 10K and 10Q 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 sir.

Welcome to Wiley’s third quarter conference call. I’m with Ellis Cousens, Executive Vice President, Chief Financial and Operations Officer and Brian Campbell, Director of Investor Relations. As anticipated earlier in the year the effects of foreign exchange on Wiley’s reported financial results is significant and unprecedented. In the third quarter alone, foreign exchange reduced reported revenue by $47 million. On a currency neutral basis, third quarter revenue declined from prior year by 2% reflecting the effect of the worse retail market conditions in the history of Wiley’s professional trade business as well as a delay in journal renewal processing in STMS. Higher education continues to perform well. Including the effect of foreign exchange, EPS is $0.57 per share for the quarter, declined 15% from prior year but increased 20% on a currency neutral basis reflecting the combined effect of reduced incentive compensation accruals, prudent expense management and lower interest expense. Year-to-date revenue of $1.2 billion increased 2% over prior year excluding an unfavorable foreign exchange impact of $56 million. Excluding an unusual prior year tax benefit and foreign exchange, EPS of $1.74 exceeded last year by 21% but only 3% on a reported basis. Operating and administrating expenses for the nine months decreased from prior year by 3% and were flat excluding the favorable effect of foreign exchange. Lower than planned staffing, contingency expense savings in sales, marketing and advertising, reduced incentive compensation accruals and Blackwell integration savings contributed to the favorable comparison to last year. In shared services the only significant year-on-year increases were technology related in support of the Wiley Online Library, Wiley Plus and various online and content management initiatives. Free cash flow for the nine months decreased from prior year by $37 million reflecting the delay in billing journal renewals and increased royalty advances mainly related…

(Operator Instructions) Your first question comes from Drew Crum – Stifel Nicolaus & Company, Inc. Drew Crum – Stifel Nicolaus & Company, Inc.: I wanted to start with the revenue guidance, you reduced it owing to the professional trade business. Are you guys anticipating things get worse there or kind of similar to what we saw in the third quarter? And, related to that if you can give us an update on your inventory and the retail channels and just an update on the status of accounts receivables with your larger customers?

Drew, I’ll start with our expectations for the balance of the fiscal year and the short story there is in terms of comparisons to the fourth quarter of last fiscal year we are expecting improvement and we’re expecting improvement for two reasons. One is, as you may recall that some of the softness in revenue that we’re currently experiencing began in the fourth quarter of the last fiscal year so the comparables are in that respect more favorable if you will. Second, when you look at the combination of the publishing program, the list, the feedback that we’re getting from our sales representatives as they work with major accounts, some of the agreements that we signed, we’re anticipating that the improvement will come or begin to come in the fourth quarter. That assumes of course that there’s nothing that happens in a significant way in terms of markets deteriorating any further. We’re not expecting a huge turnaround in the market in the fourth quarter but as long as it kind of stabilizes or slightly better, we think we have enough going for us internally that those comparisons will be favorable for professional trade in the fourth quarter of the year. Drew Crum – Stifel Nicolaus & Company, Inc.: Can I interject and ask is that improvement on a sequential basis or year-to-year or both?

Both.

Drew, in terms of your question about receivables and inventory, on the inventory side – well, let me kind of start with receivables. I think if you look at last year this time versus this year this time we’ve actually had a little bit of improvement in terms of accounts that are current, small but meaningful. Just to be sure, we do review all of our significant customers on a regular basis meaning at least monthly we have calls with them directly and have discussions with them directly about their current situations good, bad or indifferent. Then with customers that we think might be maybe in a little bit more greater risk profile, we have more frequent conversations. We actually have also agreements with them in confidence to look at some of their underlying information to be able to get a good feel for their financial condition. So, we’re in relatively good shape in that respect. So, versus last year current situation we’re in pretty good shape. On the inventory side for the most part I think we’re in pretty good shape there as well. Provisions are adequate for our current situation with respect to professional trade and so I think we’re in good shape there as well. No concerns at this stage. Drew Crum – Stifel Nicolaus & Company, Inc.: If I could ask another question, I just wonder if you could unwind the impact from foreign currency? Are there any specific buckets that you can call out? Did you do any hedging in the quarter? If not, why? Any guidance you can give us for the fourth quarter assuming fx remains as it is today would be great.

I’ll try and give a much shorter answer than I gave last quarter. As Will noted and certainly in the earnings release as well, $47.5 million negative exchange affect in the third quarter. If current rates hold I think on the last time call I’m pretty sure I gave you second half of the year weighted average exchange rates for the major currencies. Those rates roughly hold for the fourth quarter as well. I’ll give you specifically the rates for the fourth quarter so you have a feel for it. Last year’s weighted average rate for the year was $1.53 and for Sterling was $1.98. So, as we sit today spot last time I looked was $1.27 on the Euro and $1.28 on Sterling so a 17% strengthening of the dollar against the Euro and a 30% strengthening against Sterling with respect to the dollar. Those are more significant moves than the third quarter so the distribution of our business has not materially shifted so one should assume that the affect, assuming current rates hold will be at least as significant in the fourth quarter as it was in the third quarter. That’s the first part. I am using sort of roughly as a rule of thumb is that roughly 25% of the negative effect of the exchange or the positive, if that ever happens again, which I think hopefully it will in my lifetime, about 25% of it is left unhedged by the time we get to operating income. The way that happens, to give you a little bit color about that is we have far more revenues denominated in Euros than we have expenses. So, we have a relatively small operation in Germany but collect significant revenues throughout all of Euro land so to speak. So, there are…

In terms of ’10 we haven’t provided any guidance related to ’10 yet. I can tell you that in terms of our overall cost synergies of $30 million by the end of the third year which will be next year that we’re still tracking to the $30 million. I would imagine that we’re sort of annualizing this again stepping away from sort of all of this what’s going on quite frankly in terms of our reported results and the reasons for the ups and downs and the pluses and minuses. I think we’ll at least reaffirm that $30 million in savings. So, we’re on track I would say for the end of next year. I don’t want to say this yet but I would imagine in this environment maybe it would be a little bit better but it’s a bit hard to decipher some of what is cost savings related to integration and the accommodation of Wiley and Blackwell and cost savings generally trying to quite frankly be fiscally disciplined in this kind of environment.

Drew, regarding the stimulus package I’ll make a couple of comments about that. In the first case as it relates to our higher education business, I think the very good news there is for the first time I can remember at any level that part of the package relates to instructional materials at the higher educational level and I believe it is in the form of tax credits. It’s probably no surprise to you or others that are listening that the early indicators in terms of applications and potential enrollment growth at two and four year public and private institutions is as strong as ever. That’s not unusual during difficult economic times. Whether or not all those people will ultimately end up in the places they want to and whether they’ll have the financing they need to pay tuition and all that remains to be seen but I think it is fair to say that the combination of these economic conditions, the perceived value of a higher education and some support from government is all very positive as it relates to higher education and I repeat for the first time even some support of instructional materials. In addition, there are other components of the package that are in support of since and technology and healthcare and research and part of what I’ve communicated so many time with passion and conviction and I even repeat it again today is that this is a company that is all about promoting knowledge and understanding and we happen to publish in many of the areas that are on the national agenda in terms of where we need improvement. I’d like to believe that we have access to people who can help education and inform others about this and that I believe that there’s support…

On the foreign exchange transaction loss just a note that that UK revolver was paid off during the third quarter so there’s no balance that is carried forward in to the fourth quarter.

Your next question comes from [Adrienne Desiglerge – BNP Paribas]. [Adrienne Desiglerge – BNP Paribas]: A couple of questions if I may regarding today’s presentation, first could you share with us the amount of revenues Wiley Plus accounted for in this quarter?

I actually don’t have that number. I can give you a percentage of annual revenue, I have a forecast for that. It’s at a point where it’s approximating 10% of Wiley’s global higher education revenue on a rolling 12 month basis. What the exact amount was in the quarter I don’t have at my finger tips.

It increased $900,000 from the prior year quarter. So, it’s up just under $1 million from prior year. I don’t recall exactly what it was in the quarter though. [Adrienne Desiglerge – BNP Paribas]: Secondly, you talked about it with Drew but my question was we heard from McGraw-Hill and Cengage predictions of about 3% to 4% in district growth in the higher education markets. Would you say that forecast is plausible or possibly too optimistic?

No, I think that’s a very reasonable number. I would see no reason why that cannot be accomplished given what I know about again the front end of this whole process in terms of applications and enrollments. Now, look that obviously doesn’t convert one for one to purchases of instructional materials but the fact of that matter is that’s an important statistic to look at and it is very, very favorable right now and I would like to believe given some of the other budget pressures that are going to be on public and private institutions in terms of staff and resources I believe instruction materials are going to be as important as ever and I think companies that have some effective digital alternatives as we do could benefit from this as well. I’d actually if you don’t mind want to take advantage of and build on that particular question with an additional point. I suspect none of us are enjoying operating in this kind of environment and if there are some of you who are I’m not sure I really want to understand why but I will tell you from my point of view there are certain things that could come out of this that could have long term beneficial effects. One of those things are if it helps to accelerate the adoption of technology enabled deliver of instructional materials I think that would be hugely beneficial to the customers we serve and to our company and to our shareholders. I really do believe we are in a position where we can deliver more for less. When I say more for less I think lower price points for the student so more units so our revenue per unit may go down but we’d actually grab more revenue because of less piracy and used books and things of that nature. And, I believe as I’ve spoken about on many occasions the outcomes are more quantifiable, that is that teaching and learning is actually happening and greater opportunities to customize if you will materials to the individual learning styles of various students. Last and certainly not least the benefits it has on a company’s balance sheet and cash flow because you don’t obviously have the inventory in the warehouse and the returns to deal with. It is my belief that this could possibly spur on or help accelerate if you will acceptance of electronic delivery of instructional materials and I think that will be a good thing.

The number you were looking for at least through nine months was about just under $21 million so about 15% of revenue year-to-date for Wiley Plus. [Adrienne Desiglerge – BNP Paribas]: Another question if may, talking about higher education again would you say that January has showed a decline in growth or was it in line with November/December?

There was nothing in our experience in January that is unusual for January so I’m not seeing any patterns there of change that would be worth commenting on. I would also just say as a caution, having been a part of that business for a long time, one should not read in to one month particularly between a December and a January when easily revenue could flip from one month to another based on book store ordering patterns. So, if I could provide some advice there are much wiser things to look at an entire quarter because some of those things could flip from one month to the other. [Adrienne Desiglerge – BNP Paribas]: What about the other divisions STMS and professional trade, you said it was the same trend on every month of the quarter?

The one comment I would make about that is of course our STMS business was affected by those processing delays that I mentioned that as I also mentioned the problems that caused that we’ve pretty much taken care of but there’s still some catch up in processing that so there would have been revenue that typically would have happened if we were up to date in January which would have distorted the January to January comparisons that will flop in to the fourth quarter. But, other than that in terms of market based underlying growth rates there’s really nothing material that I could suggest relative to any of our businesses. [Adrienne Desiglerge – BNP Paribas]: One last question, I don’t know if you can give us some color about the beginning of Q4 if you saw some new points especially in higher education that would be really different and really material compared to Q3?

There’s really nothing. As a matter of principal to be frank we don’t provide a whole lot of time providing guidance quarter-to-quarter or month-to-month so we don’t actually think it’s a wise or good thing to do. However, there’s only one quarter left in our fiscal year and in fact one full month is already gone and we’re basically almost at the half way point of last quarter and we’ve provided as definitively as we can guidance for the year. So, I think that should give you an indication of how we feel about the rest of it.

Your next question comes from David Lewis – J.P. Morgan. David Lewis – J.P. Morgan: I was wondering if you could walk through the visibility that you have right now within the STMS segment across both US and international and across corporate universities as well as government?

I don’t know that I can break it down in to that fine of a breakdown but I’ll give you a shot of what I think is important and how I see this all playing out. I think it’s important for us not to trip over the differences between calendar years and fiscal years and all that so I’m going to state this as clearly as I can and then respond to any additional questions you might have. So far as I pointed out earlier in our STMS business as the beginning of this fiscal year and in fact as you know, when one fiscal year ends and then we have our first quarter conference call for the new year we provided you with guidance about how we think the year is going to go. At that time we believed that all of our businesses had a very good opportunity to grow in the mid single digit area. We actually didn’t see huge differences from one business to another. Now, all of that would be on a currency neutral basis. Needless to say, as we’ve said it so many times already, the foreign exchange affect has been huge so if you just look at it on a performance basis, we thought all three businesses had a really good shot at mid single digit growth. I’ll repeat what I said before because I think it’s really important, we still believe that about our STMS business and our higher ed business on a performance basis where we really missed significantly is in our professional trade business for all the reasons we have spoken about. So, we aren’t really seeing anything significantly positive or negative about what’s going on in our STMS business. The sources of revenue are a little bit different and…

Well, I think in terms of multiyear I believe what you may be talking about or I hope you’re talking about or I hope you’re talking about has to do with the customer licenses. Customers can license a duration of one, or two, or three years. I’m not aware of any that are longer than that, there may be a few but I doubt that. I think there are a couple of things coming together, the Wiley licenses and the Blackwell licenses, you put it all together we still have a significant percentage of our licenses cover a three year period of time. The next significant percentage would be annual licenses and in terms of the price increases and additions to content and services that went in to those licenses, I repeat we’ve had a very solid, other than this processing delay which I repeat was internal, we had a very strong renewal season. If we didn’t have these projections about the pressure on state budgets I wouldn’t even be talking about calendar year ’10 now. I feel very good about what our colleagues have accomplished with the ’09 renewals other than that processing delay. There’s really no big news there. Now, I think we should all be clear about the significance of one year deals, two year deals, three year deals and all that. What we basically do is we make a commitment to provide a certain amount of content at a certain price, we cap out price increases so it gives the institution if you will some certainty having to do with what it’s going to take to fund their purchases of Wiley Blackwell materials. We think that’s a service to them, there’s obviously a benefit to us because as you like to say it gives us visibility…

What I’d say about that first is you’ve heard me say it before, I’ll say it again Amazon has been a terrific partner with our company. I define a terrific partner as not only a company that services its customers at a very high level which I believe they do but also a partner that works collaboratively with publishers like Wiley to provide more value and more service to the customers we all care about. Amazon and Wiley are constantly working on new ideas. They could be new ideas that have to do with packages of books, or some promotional campaigns or things of that nature. By the way, it all began with our professional trade business but this also relates to our STMS book publishing and increasingly to higher education. That partnership once again, this unique combination of three businesses, a relationship that started with professional trade has benefited professional trade STMS and higher ed. I think you can see more of that in the future. Now, as it relates to the Kindle the reason I started with all of that is because we’ve been speaking with Amazon about different ways to disseminate our content or our information to customers. The Kindle is one of those devices. They obviously are very, very excited about it. There’s hardly a day that goes by that you don’t hear something about the Kindle 1 or the Kindle 2. It is a terrific device in my view, much better than some of the early versions that other companies had historically came out with so it’s definitely getting better and better from a readers point of view. We have some content, as you know we don’t publish fiction and there are many people who are interested in taking several books on their Kindle on…

Your next question comes from Drew Crum – Stifel Nicolaus & Company, Inc. Drew Crum – Stifel Nicolaus & Company, Inc.: Just two quick follow ups, I just wanted to drill down a little further on this processing delay. You said $7 million of revenue gets pushed to the fourth quarter, what is the impact on cash flow? Also, you mentioned there was some backlog related to that is there any way you can quantify what that means for the fourth quarter?

We did note that $7 million worth of revenue was associated with that. If you multiply that by 12 because the calendar year had one month within the quarter which was January you’d come up with essentially what didn’t reach the third quarter that will move in to the fourth quarter. That will be collected as cash and also as revenue that sort of slips in to the fourth quarter. That’s the number it’s about $85 or $86 or $87 million or so of activity that was moved in to the fourth quarter. You can let me know if you want to hear more about what happened but I can tell you more about what the affect is. No one has asked the question yet so I’ll answer it in anticipation of you possibly asking it is that so how does it look then for the fourth quarter in as much as our net debt position hasn’t really changed and typically in the third quarter is when you’d see the biggest move with respect to net debt. It’s essentially within a couple of million of where it was last year. The expectation is that we’ll wind up the year, this is excluding any discretionary pension contributions, we’ll wind up the year about $100 million lower than we were last year at the end of the year so that’s net debt. That would mean that debt would be something like $750 as opposed to $850, or $840 something or other and cash about the same it depends. We might have a little more cash at the end of the year because the collection is running a little bit later because of the processing running a little bit later. We may not be able to mobilize that cash to reduce the revolver as quickly right at the end of the year so that’s why I talk to net debt rather than the sort of absolute amount of debt. That would mean whereas last year our net debt position would have only decreased by $29 million I expect it to decrease by $120 some odd million this year. I don’t know if that was a question you were going to ask. Drew Crum – Stifel Nicolaus & Company, Inc.: Maybe I can ask one more, is there any update on your planned cap ex spend and product development asset spend?

You mean for next year? Drew Crum – Stifel Nicolaus & Company, Inc.: For fiscal year ’09.

Well, we’re going to release the Q either end of day today or tomorrow. I think you’ll see the same numbers $125 and $45. I can just tell you the $45 is sort of like a little one of these things, it could be a little bit lighter than that on the capital spending side. I think the product development numbers are pretty much spot on but on the capital expenditure side meaning the software development, hardware, might be a little bit below that, it’s a bit tough to tell.

Your next question comes from [Jeff Najenson – Hinde Cobble Capital]. [Jeff Najenson – Hinde Cobble Capital]: I was wondering how much flexibility you have on product development cost and if that’s an area you can easily cut as you’re emphasizing fiscal prudence?

Well, there are two components to that, one is composition cost and the other is author advances. Will spoke a little bit earlier in this remarks about author advances and one of the growth avenues in our journals business now bigger than it was in the past is signing up new society relationships. We’ve for 200 years had book relationships that are quite extensive so there are author advances associated with those. I guess conceivably we could do those things but I don’t think it’s in the cards. I think that would be essentially sacrificing some of our future potential. So, in composition costs essentially that is the production of the materials that are essentially the content. On the capital spending side is the area that we could be potentially more judicious and are in terms of looking at specific investments, particularly in the area of technology there may be some investments that in a different environment might have looked to be more economically justifiable but in this environment might need to be sort of slowed down in some way, shape or form. So, we might defer some investments in technology investment to a later period. So, there’s I think a little bit of potential there. Also, I’d note that the amount that we have for capital spending continues to include some integration spending that should decline and has declined over the course of this year and will decline a little bit more next year. [Jeff Najenson – Hinde Cobble Capital]: Can you remind me how the composition costs in the author advances how that flows through the P&L?

Well, the author advances are essentially recognized as the product is sold. Composition average is there years on a double declining balance basis.

Your next question comes from [John Elmer – Caldwell Securities]. [John Elmer – Caldwell Securities]: Will this is a question that came up a week ago today in the Wall Street Journal, a letter to the editor entitled Free Model Hurts Science Journals. The author spoke about today’s scientific publishers who have faced increasing pressure in recent years to make their publications freely available online to anyone without a subscription. That sounds like a preposterous idea to me, I wonder if you have any comment?

I’m with you. Actually, this is a topic we have discussed and I’m happy to give you the short version. If you want to talk to me a little bit more separately, I’m happy to do it. We’ve discussed this in pervious conference calls and in other forums. What you’re referring to is the notion of some people call it open access, some people call it author pays. As most of you know the current model that has been in place for a long time is the subscriber, the reader or the intermediary that is providing services to a reader pays a certain amount of money to gain access to this material in print or electronic format. What people have been debating is whether or not that model is providing the most access to people and whether or not there’s a different way to fund it. One of the models that has been talked about in many circles and for some time now is whether the author should pay and maybe that payment would come out of an authors’ pocket, maybe it would come out of a research grant, that the author would pay and then it would be free to all. The key points I would make about that is this is not new, that may people have many opinions about it. Wiley offers a model whereby you can go – essentially an authors’ pay model or a subscription model, there’s not much take up on the authors’ pay part of it. We view an author pay model as literally nothing more or less than another business model. The thing that to me it’s unimaginable to me how anyone could assume that this content can be developed, digitized, disseminated, stored, all the things that have to happen with no…

Your next question comes from David Lewis – J.P. Morgan. David Lewis – J.P. Morgan: I was wondering, did you guys cite constant currency cost growth for the quarter?

You’re talking about total cost and expenses from the top of the P&L? David Lewis – J.P. Morgan: Yes.

There was $35 million worth of exchange associated with the third quarter so if you back out the difference there was actually an improvement of about $14.5 million year-on-year so a reduction in expense.

Is operating and administrative on that line?

Yes, total. David Lewis – J.P. Morgan: Can you break out the integration costs and the cost savings for the quarter?

There are three or four components to the $14.5 million savings and then some things going in the opposite direction. One of the pieces was some of the incentive reductions, the accruals that Will mentioned a number of times and that have been noted in the earnings release. There were cost savings of about I would say $4 or $5 million or so incrementally in the third quarter. That’s about $7 million year-to-date or so. There’s also some integration expenses in the prior year that aren’t in the current year so I don’t note those as savings they were just a lower level of investment to integrate the businesses. Then, there were contingency savings or what we refer to as contingency savings which is our approach to managing in a very disciplined way whether it be keeping positions open and vacant, reducing advertising and marketing spend where we think it’s least affective, those kinds of activities. I’d rather not sort of go in to the piece-by-piece quantification but I can tell you all of those were considerable favorable impacts in the quarter. Then, working in the opposite direction was that we certainly did start the year with merit increases so there is an increase in compensation associated with the folks that are here at Wiley. So in other words we did manage headcount and open positions, we did have merit increases within the context of 2009 so that kind of works in the opposite direction. David Lewis – J.P. Morgan: Are we done with integration costs at this point?

No, we’re continuing – well, there are some minor integration projects that are still underway. There is a little bit of integration expenditure that continues with respect to the fulfillment systems which is part of what was some of the issues related to the third quarter. This is the systems that one uses to bill an invoice customer once you’ve settled upon what it is they want to buy from you. This particularly affects our journal business both in print form and in electronic form so that’s relatively diminutive. But, some of that activity is still kind of ongoing and that would have continued quite frankly irrespective of whether or not there were delays in that will continue on for a little bit of time. Will has spoken about Wiley online library. I would less characterize that as an integration project as an enhancement to our capabilities as a company and as a business. However, it does directly affect and benefit both the combination of Wiley and Blackwell. There are cost savings notionally associated with that because we would have done that each independently maybe to differing degrees but there are savings associated with that. We’ve decided to invest some of those savings in a more robust platform to deliver more content and more capabilities with respect to how that content is utilized by researchers and also by our society partners so one might call that integration savings. It gets a little bit fuzzy when you start trying to decipher what is investment and reinvestment from what is cost savings integration related. David Lewis – J.P. Morgan: I just have one quick follow up, you guys were transitioning cost offshore, is there any adjustment to the currency exposure in the next two quarters because of that?

We have moved a fair amount of our journal fulfillment and our shipping and handling operations to Singapore. That transition is not yet complete but for the most part the Sing dollar is pretty well hinged to the US dollar so there’s no effect there with respect to currency. There clearly is an expense savings with respect to cost of supporting that kind of activity in Singapore versus where it formerly was and we’re still doing some of that work in other locations in the United States, in the UK and in some other locations. We principally have shifted most of that activity to Singapore to an entity that was a former Blackwell entity that we expanded to move all of our fulfillment and shipping and handling operations there as well as some content management activities as well.

This does conclude today’s question and answer session. At this time I would like to turn the conference back over to Mr. Will Pesce.

Thank you all very much for participating today and for your thoughtful questions. In closing, I’d like to share one more quote from the investor survey in reference to Ellis and me and I, “Both of them give verbose answers but it’s actually a good thing because they take the time to explain their reasoning.” I hope you still feel the same way. Thank you very much.

This does conclude today’s John Wiley & Sons conference call. Thank you for joining us and have a wonderful day.