Will Pesce, President and CEO Ellis Cousens, EVP, CFO and COO

Drew Crum - Stifel Nicolaus David Lewis - JPMorgan Carlston Savoy - Princeton Capital Management Chris Joseph - Emery & Downing

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% or 4% excluding favorable foreign exchange. EPS for the nine months of $2, exceeded prior year by 36%, excluding certain one-time tax benefits and Blackwell, adjusted EPS increased 9% for the nine months. The Blackwell acquisition contributed revenue of $115 million in the quarter and $347 million in the year-to-date period. The acquisition was accretive to EPS by $0.9 per share in the quarter and $0.18 per share in the year-to-date period excluding certain tax benefits. Wiley's top line growth continues to be driven primarily by Blackwell, Professional/Trade revenue increased modestly in the quarter, but year-to-date results remain well ahead of prior year and industry performance. US scientific, technical and medical revenue increased slightly in the quarter while global revenue advanced 5%. Higher Education showed signs of recovery in the quarter, bringing year-to-date revenue essentially on par with prior year. As expected gross margin as a percent of revenue of 67.5% was below prior year for the nine months reflecting product mix, including the effect of Blackwell's Society journals. Operating expenses for the nine months were 44% higher than prior year, primarily due to the Blackwell acquisition. Excluding Blackwell, and the unfavorable effect of foreign exchange, operating expenses increased by only 3% over prior year. Free cash flow was $37 million better than prior year, reflecting increased cash earnings, lower income tax payments and the timing of royalty payments related to Blackwell, partially offset by increased receivables resulting from sales growth, product development spending and capital expenditures for computer hardware and software. Based on year-to-date results, leading indicators and market conditions, we anticipate full year revenue growth in the mid single-digits and EPS growth in the low double-digits, excluding Blackwell, and one-time tax benefits. We are currently projecting that Blackwell's revenue will be approximately $470 million, and that the acquisition will be accretive to EPS by at least $0.20 per share, which represent improvements from our previous guidance. I'd like to provide some highlights regarding the performance of Wiley's core businesses. Professional/Trade revenue for the quarter advanced 2% over the prior year to $103 million. For the nine months revenue increased 5% to $302 million. Global revenue increased 7% for the nine months. Direct contribution to the profit for the quarter and nine months increased 8% and 14% respectively. In addition to top line growth the profit improvement was due to a bad debt provision recorded in the third quarter of last year and a partial recovery in the second quarter of this year. Excluding these items, direct contribution to profit declined in the quarter reflecting lower gross margins due to product mix, and the timing of advertising costs, while year-to-date results were consistent with top line growth. After a somewhat disappointing December, January was a record month for PT. The business and consumer programs were primarily responsible for the third quarter top line growth, partially offset by softness in technology, and by sales returns. US sales channels had a very good quarter particularly online, national accounts, training and government. Year-to-date growth was driven by strong sales in business, consumer and technology partially offset by sales returns, licensing of rights worldwide and branded website content continued to have a positive effect on results. The Financial Times selected 5 Wiley titles for their list of holiday picks, several Wiley cook books were recognized as best of the year books, Arthur Frommer’s blog was listed as the one of the top 10 websites for travelers in 2008 by the New York Post. Scientific, technical and medical revenue for the quarter and nine months increased 2% to $58 million and $169 million respectively. Global STM revenue advanced 5% in the quarter and the nine month period. Direct contribution to the profit rose 3% for the quarter and was essentially flat for the nine months. Top line growth for the nine months was offset by increased content development costs associated with new journal titles. During the quarter modest journal top line growth was largely offset by softness in book sales, revenue from advertising and commercial reprints was below expectations. Pay per view revenue for journals and online book sales are well ahead of prior year. During the quarter STM signed an agreement to launch archives of drug information which will provide a repository for clinical trials and similar projects that yield negative or inconclusive results. Archives of drug information will be an online only journal with an author paid fee. STM renewed its agreement with the American Association for the Study of Liver Diseases to publish two journals hepatology and liver transplantation. Hepatology has the second highest impact factor of any journal published by Wiley Blackwell. Blackwell revenue and operating income for the third quarter was $115 million and $60 million respectively. Operating income included $5 million of amortization charges for intangible assets related to the acquisition. Interest costs associated with the financing of the acquisition were approximately $17 million. Blackwell’s results were accretive to Wiley’s third quarter EPS by $0.09 a share. Blackwell revenue and operating income for the nine months was $347 million and $45 million respectively. Operating income included $17 million of amortization charges for intangible assets related to the acquisition. Interest costs associated with the financing of the acquisition were approximately $50 million. Blackwell’s results were accretive to Wiley’s year-to-date EPS by $0.18 per share excluding one-time tax benefits. Blackwell continues to extend existing and form new society relationships a new magazine Health for women was signed with the Association of Women’s Health, Obstetric and Neonatal Nurses, which is already one of our publishing partners. This controlled circulation publication extends the company’s presence in the US nursing community. Higher Education revenue increased 3% over the last year's third quarter to $50 million, bringing year-to-date revenue of $136 million within 1% of prior year. Direct contribution to profit for the quarter increased 5% over prior year, but declined 8% for the nine months period principally due to lower planned margins from Microsoft Official Academic Course titles and higher deferred revenue form WileyPLUS. Reported revenue continues to be affected by the growth of WileyPLUS, since revenue is deferred and recognized over the course of one or two semesters, The year-to-date deferral was approximately $2.5 million higher than prior year. WileyPLUS continued to gain momentum as reflected in the significant year-on-year increased in billings and usage. Outside the States WileyPLUS usage is increasing significantly in Asia particularly Malaysia. We recently penetrated the market in South Africa with adoptions in physics and geography. In the quarter improvement in the accounting and engineering programs as well as the sale of content licenses were partially offset by soft sales in social sciences and mathematics. For the nine months period sales of Microsoft titles, the accounting program and licenses were offset by softness in mathematics and social sciences. Book stores continue to purchase new textbooks below the number of enrolled students. Wiley is taking advantage of its collaborative business relationship with online retailers to benefit from the significant growth in sales through online channels. We are also taking advantage of the new industry online platform CourseSmart, to distribute complimentary copies to professors electronically. An increase in re-importation and piracy is evident. We have expanded our adaptation and versioning programs and continue to monitor suspicious volume behavior. While the US revenue for the quarter and nine months increased 8% to $81 million and $246 million respectively, or 3% excluding favorable foreign exchange. Direct contribution to profit for the quarter and nine months increased 5% to $26 million and $83 million respectively, or 4% excluding foreign exchange. Top line growth remained sluggish for our UK Company. Moderate growth in general revenue and strong sales of indigenous professional trade books were partially offset by lower controlled circulation advertising revenue. Softness in the pharmaceutical industry is having a negative effect on advertising and reprint income. Lastly, book publications scheduled particularly in STM are more skewed to the fourth quarter than in the past. In Germany, Wiley-VCH had a solid quarter mainly driven by journals. For the nine months top line growth reflects the positive effect of journals and professional trade books, partially offset by sluggish STM book sales, the German language for dummies program enjoyed a strong quarter driven by robust sales through Amazon. In Europe, we renewed our contracts for the Cochrane Library and The Journal of Pathology. The Journal of Pathology agreement was renewed early extending the term for 10 more years. We have published this journal for 23 years, establishing it as the number one journal in its field. Online usage of products and services continues to grow in Europe. In calendar year 2007, (inaudible) recorded nearly $4 million full text downloads, accounting for approximately 10% of all usage on Wiley InterScience. Third quarter revenue in Asia, Australia, and Canada advanced 13% to $49 million, but only 3% excluding favorable foreign exchange. For the nine months revenue advanced 16% to $120 million or 8% excluding favorable foreign exchange. Strength in Professional/Trade in STM in Asia and indigenous Higher Education publishing in Canada were moderated by sluggish sales in Australia's school business and Canada's Professional/Trade business. Excluding favorable foreign exchange, direct contribution to profit declined in the quarter, principally due to investments in indigenous publishing programs in Asia and Australia and the timing of promotional costs in Canada. While the Asia reported third quarter growth, Higher Education performed particularly well in India. Professional/Trade was strong in most regions, reflecting the effect of the buoyant retail market, new store openings and strong sell through. The STM markets in Japan, Taiwan and Korea improved after a slow start to the year, while India and Southeast Asia continued to perform well. Third quarter results in Australia reflect lower than expected performance from the school front list and the timing of preprint revenue, STM books benefited from effective marketing campaigns to promote new titles. Higher Education continued its strong performance driven by the indigenous publishing program and WileyPLUS. Revenue growth in Canada was driven by indigenous Higher Education publications and STM books. WileyPLUS revenue continues to grow. Sales of Professional/Trade products were down due to pricing pressure caused by the strength of the Canadian dollar. In summary, Professional/Trade is having a solid year. We anticipated good finish for STM globally in part due to a strong book publication schedule in the fourth quarter. Higher Education should continue to benefit from the momentum of WileyPLUS. Blackwell is performing well. We've accomplished a great deal during the past year. Important milestones will be reached within the next four to six months, including the migration of Blackwell content to Wiley InterScience. I am very pleased with and appreciative of, to professionalism, commitment and dedication of Wiley and Blackwell colleagues around the world. They are successfully confronting the challenges of the transition and building a strong foundation that will enable us to realize a promising future. With that background information, I welcome your comments and questions.

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

Drew, I would add one another aspect of this. Drew Crum - Stifel Nicolaus: 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. Drew Crum - Stifel Nicolaus: 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. Drew Crum - Stifel Nicolaus: 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 on the other hand, we have gotten some pretty solid growth out of those areas in prior years and that has slowed down a bit, and certainly is affecting fiscal year '08 relative to fiscal year '07. Another component is that we have talked to you in the past that our digitized back file collection, where as that is certainly tracking to our expectations, its down from the high point and that reflect our success with that. What I mean by that is that we have already achieved significant penetration there in prior years. Now the good news about the Blackwell acquisition is that there are significant opportunities for a back file revenue growth with the Blackwell program. Ellis commented that we're beginning to get some of the benefits out of that. That should continue into fiscal year 2009 and beyond. And then I would just repeat that if you look at, which is not in our year-to-date results per se but if you look at the customer renewals as opposed to the renewals on societies making that distinction. So far that information looks fine to us. We're very consistent with our expectations. So I think it's all of these things combined that has caused a more moderate performance in our U.S. STM business. Some of the regional factors come in to play when you see a global number higher than the U.S. number and one of the great things about this business, there are many great aspects, so one of it is that it's truly a global business. So from time to time you will get some regional differences. And the global numbers are specifically the numbers outside the States currently are at a higher rate of growth than in the United States. That is not a huge surprise to us, but I think the gaps are a little bit higher or bigger than we had expected going in to the year. And we are regaining some real nice results as if you look at the growth in Asia in particular, the results have been very positive. And that is again the benefit of having a global enterprise like this, is when one particular market maybe off a little bit more than the other, you can get some benefits there. So it is all of those factors coming together. Drew Crum - Stifel Nicolaus: 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. Drew Crum - Stifel Nicolaus: Okay.

Product development, no. The capital spending, you will see an adjustment downward there. Drew Crum - Stifel Nicolaus: Okay. Thanks guys.

You are welcome.

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

Hello. David Lewis - JPMorgan: 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 market and look at our advertising business whether that has to do with advertising in our journals or controlled circulation publishing or some of the commercial reprints that I mentioned, particularly when you think about companies like the pharmaceutical industry and the revenue streams that we've developed overtime there. That’s the business that would be affected soonest and probably in percentage terms to the greatest level. Again, I don’t want to overemphasize this but I just want to say that in the STMS business those are the two considerations. Research library budgets would hit books first more than journals. However, no affect yet in that area we would take I think a [proactive] slowdown. Shorter term could be on the advertising controlled circulation in commercial reprint business. We have experienced some of that in that I mentioned in my remarks, whether that's tied specifically to the economy or what has been going on in the pharmaceutical industry for a while, we could all speculate. But not material certainly from a point of view of STMS. In higher education, it's a little bit more complicated because history would tell you that in down markets many people go back to school or stay in school and certainly there is lots and lots of history around that. In doing a quick sampling of what's been going on with applications and I'm not talking about the for profit schools, that have been getting quite a bit of publicity around student loans and all that. If you look at two and four year colleges and universities, public and private, there do not appear to be any indications whatsoever that applications and acceptances are at least at this point being negatively affected. In fact in some places what's happening is that the, number of applications are increasing pretty dramatically. So historically, recessions have caused people to go back for more teaching and learning and to get out of the market -- the job market for a while. There is no reason to assume that that won't happen this time. Having said that, of course, and particularly in public higher education, if there are less dollars around to support student loans and all of that, students may look for ways to cut their costs, could that possibly result in them sharing books even more than ever, it is certainly possible. The offset to that is, I think, the more people look at products and services like WileyPlus, which is all about improving the productivity of teaching and learning. I think it could actually help boost the acceptance of technology like that as universities stride to deliver more instructions for less if they go to more adjunct professors as opposed to full-time professors. Those adjuncts need teaching and learning resources that's what we do for living, so we actually see. So there is, pluses and minuses in that market. I know there is quite a bit of publicity around the student loan situation particularly with the so called for-profit or career colleges, and we do business with those institutions. My feeling is with some of the larger accounts that we deal with. I'm not anticipating for our business a material effect there. So I would say in Higher Ed, mainly neutral, maybe even some people can make a case that could be a little bit of a pickup if again enrollments and acceptances kind of play out the way they have in the past. And in our Professional/Trade business, once again are pretty resilient to changes in the economy. There maybe particular areas that could get affected in some of the consumer categories if book store traffic were to decline significantly. We can go back and forth there because in many cases, if it's a tough economy and people are staying home, they kind of buying books to either improve their skills or to entrainment themselves. So, I think when all said and done, Wiley has been and will continue to be mainly resistant to changes in the cycle. However, in the cases of advertising and particularly if it's for [attractive] recession, you may find in some of these library budgets, It gets a little bit tighter than it had been for us and you could see some affect on our book publishing in STM. David Lewis - JPMorgan: 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 having people gain access to our content on easy ebook readers. There is a market there. We are prepared to benefit from that where Professional/Trade Wiley is really making the difference. It is building on these recognized brands like the Frommer’s brand which is the number one travel guide publisher in North America and we are beginning to introduce that brand more successfully outside of North America. In addition to that we have a branded Frommer's website I mentioned the Arthur Frommer's blog as one example of how we're taking what was historically a print-on-paper business building on that brand to provide more services and value to our readers through a branded website that has all sorts of additional services there. There is the blog as one particular example but there are online forums. There are maps, there is all sorts of very interesting opportunities for users to interact if you will with us and others to build community around the Frommer's brand. And what we're finding is that we're opening up revenue streams there through sponsorship and advertising that’s obviously a good thing. But in addition it’s reinforcing the power of the Frommer’s brand and many of the people who are going on site -- where they can gain some access to content but they need to obviously go to the book to get the complete content. They are going to site initially and then going and buying the book. So that’s one specific example of how our Professional/Trade is I can say the same kind of thing for the For Dummies brand as an example. You mentioned Amazon we've worked successfully with Amazon from the early days when that business was about selling more books. It’s still about selling more books today but with Kindle and other opportunities we're looking at selling books, chapters in books, all sorts of very interesting growth opportunities in that business. And it has really begun to emerge I would say within the last 12 to 24 months. So I believe that business will still for the foreseeable future be primarily a print-on-paper business not because you know Wiley wants that to happen or not. It’s because that’s what our customers want that they still value print-on-paper when they are reading lots of text. However, one of the fastest growing areas for our professional trade business is the compliment print-on-paper book sales with these branded websites opening up revenue streams getting more interaction between us and our customers, which comes back into additional products, but also obviously revenue growth. So I hope you hear it in my voice I am genuinely excited by what our colleagues in P/T are doing. David Lewis - JPMorgan: 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 and that the adoption of this kind of enabling technology like WileyPLUS. For years and years and years public education, frankly in elementary and high schools and public Higher Education have talked about the promise of catering to individual learning styles and needs and the fact of the matter is for years, and years and years, we have fallen far short of that. By basically approaching education in kind of a mass scale or professor in front of a large group assuming that all people kind of learn the same. And with technology, what you are able to do is, to certainly find common ground across many students, but individualize that instruction and provide remedial opportunities, tutorials, all enabled by technology. Where both professors and students can get feedback and you can immediately understand where maybe the learning wasn't happening at exactly the level that you had anticipated and go back and do the remedial work that's required. So that's extremely difficult in large classes with just print-on-paper text books. But you take professors, text books as resources and online digital products like our WileyPLUS and suddenly you have a combination there that I think is really very dynamic. And what we're finding is that again slowly but steadily professors are embracing its students in many ways or leading the charge. We're getting feedback from students who have used WileyPLUS for example in one class and then what they are saying is -- another example that I have in my mind is somebody takes a Principle of Accounting course has used WileyPLUS in their class because the professor recommended it. Had such a success with it, when they are signing up for their financial accounting or their intermediate accounting course, they are saying, you know what I want to take the professor and the course where they are using WileyPLUS again because I had success. We are also finding outside the United States, I mentioned to you. I gave you these examples not because right now they are material with a great -- material in terms of revenue but they are great leading indicators. Could you imagine that I said to you today that one of the places where we are getting terrific success with WileyPLUS is Malaysia and I only say it that way is because you probably wouldn't think of Malaysia as a major Higher Education market for Wiley and historically it hasn't been a major market. But I use that as an example and I just recently mentioned South Africa as well. As the technology is helping places which may have had some difficulty delivering Higher Education effect, they are adopting this technology and finding success with it. So we have a ways to go here. We are absolutely committed to this because we believe in the long-term promise of it and lastly I want to say, this is obviously very attractive because we do believe it promotes knowledge and understanding around the world which is integral to our mission here at the company. In addition to that I think what you are going to find is we are going to able to price electronic delivery in Higher Education below the level that we were able to price text books and I think the outcome of that is we are gong to have lower price points, more unit or usage if you will, greater increases in volume and at least as good if not better cash return on investment because the working capital requirements specifically, books and warehouses, will be lower. So we have to get there. It is going to take some time. But it is a win-win in my view. I am sorry that I went on a little bit long there. David Lewis - JPMorgan: No. It is great.

But I think that is the essence of what we are working on. David Lewis - JPMorgan: 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. David Lewis - JPMorgan: 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. David Lewis - JPMorgan: Great, okay. Thanks guys

You're welcome.

Thank you. (Operator Instructions). And we'll take our next question from Drew Crum from Stifel Nicolaus. Drew Crum - 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. Drew Crum - Stifel Nicolaus: 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 the back of that is that one should note that what you might think went unnoticed, but Blackwell, we pay royalties semiannually at Blackwell and there is a significant royalty payment, which will be coming up in March, so a fair amount of that cash will be used with respect to that royalty payment. And also there is an interest payment due on that inter-company tax planning strategy that we have discussed, which is again relatively significant that will bring cash back into the U.S. So the answer is yes, $200 million of net cash on the balance sheet is much higher than I'd like it to be, and we have to deal with sort of the inhibitions or the inhibiting factors related to our whitewash rules. Also efficient tax planning getting your cash back here on a tax-efficient basis. So it's a combination of those things. But you should know that we work on getting that cash back and we'll get back here to reduce essentially our outstanding debt. So an appropriate way to look at this which I think you have is to look at kind of what our net debt position is. I can also give you a little bit of comfort to tell you that a fair amount of the cash that sits in the U.K. on a un-hedged basis is actually providing positive arbitrage on a interest income/expense basis, so we are actually earning, given the weakness of the dollar, actually more on some of the cash in the U.K. than we are actually paying in interest in the U.S. So it hasn't actually hurt us in the net effect other than the appearance of having an unreasonably high cash balance and having at the same time a significant amount of debt on the balance sheet. Drew Crum - Stifel Nicolaus: 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. Carlston Savoy - 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.