Stephen Smith -- President, CEO and Director :

Drew E. Crum -- Stifel Nicolaus Michael Corty – Morningstar David M. Lewis – JPMorgan Daniel Moore -- CJS Securities

Good morning and welcome to the John Wiley & Sons Quarterly Earnings Call. Before introducing Mr. Steve Smith, President and Chief Executive Officer, I would like to remind you this call is being recorded and may include 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 obligations to update or revise forward-looking statements to reflect subsequent events or circumstances. Mr. Smith, please go ahead.

Good morning. Thank you for participating in Wiley’s Fiscal Year 2012 Third Quarter Investor Conference Call. I’m with Ellis Cousens, Executive Vice President and Chief Financial Operations Officer. I will take a few moments to provide an overview of Wiley’s performance in the third quarter and we will then respond to your questions and comments. In a difficult global economy Wiley achieved revenue growth of 1% in the third quarter both including and excluding foreign exchange. Currency-adjusted revenue growth of 3% in STMS and 2% for Global Education was offset by a decline of 5% for Professional Trades. Adjusted EPS of $0.91 excluding a $0.12 per share one-time tax benefit in the third quarter of fiscal year 2012 and a $0.10 per share bad debt charge in the third quarter of fiscal year 2011 increased by 8%, or 6% excluding the effects of foreign exchange. Higher revenues, proven expense management, lower interest expense and lower income taxes contributed to the result. For the nine month revenue of $1.328 billion was flat on a currency neutral basis, but grew 2% including the positive foreign exchange impact. Adjusted earnings per share for the nine months grew 2% to $2.42. Excluding favorable foreign exchange adjusted EPS fell 1%, reflecting top line results and higher technology and facility costs partially offset by lower interest expense. Year-to-date gross profit as a percent of revenue was 69.5%, 0.5% ahead of the prior-year figure of 69% due to increased digital product sales and product mix. Year-to-date Shared Services and administrative costs of $284 million were up 8% currency neutral due to ongoing investments in digital products and infrastructure and increased facility costs, partially offset by lower distribution expense. Free cash flow for the nine months declined 12% to $181 million, principally due to technology spending and the timing of income tax payments partially offset by journal subscription cash collections. Net debt, long-term debt less cash and cash equivalents, was reduced from prior year by $128 million to $199 million. During the quarter Wiley repurchased 520,000 shares at a cost of $23 million. Now I’d like to provide some information regarding performance of Wiley’s global businesses. During the quarter we’ve made significant announcements that herald an exciting new direction for our Professional Trade business. In mid-February we announced the acquisition of Inscape, a leader – leading provider of assessment-based training products in interpersonal business skills including leadership and management. Inscape, with annual revenue of approximately $20 million, strengthens Wiley’s position in the global training market and brings a number of key strategic and financial advantages, chiefly a global customer base with associated sales channel reach and capabilities, a technology platform for product delivery and customer support as well as strong revenue growth and attractive financial performance. Inscape derives approximately two-thirds of its revenue from digital products and strongly complements Wiley’s existing portfolio of training products published under the Pfeiffer brand. Inscape and Pfeiffer will be integrated to create a powerful force in the growing workplace learning industry. The Inscape network of authorized distributors and consultants extends Pfeiffer’s global reach and approximately one-third of Inscape revenues are earned outside the United States. In a separate statement this week we announced that we will explore the sale of a number of consumer print and digital publishing assets in Professional Trade that no longer align with our long-term strategies. The assets offered for sale are in travel, including the well-known Promus brand, culinary, general interest, nautical, pets, crafts, Webster’s New World and CliffsNotes. The planned divestiture follows a strategic review of the company’s business portfolio, which led to a renewed – new focus on opportunities in categories that meet the strong global demand for high-quality information for professionals in life-long learning enabled by new technology. In Wiley’s fiscal year 2011 the publishing assets offered for sale generated approximately $85 million of revenue and approximately $6 million in profit contribution before related Shared Service expenses. Third quarter professional trade revenue of $108 million declined 6% or 5% excluding the unfavorable effect of foreign currency. The decline is largely attributable for softness in the business book market and reduced retail shelf space for some prints consumer categories, particularly cooking and travel. eBook sales doubled again in the quarter to $9 million or $28 million year-to-date. Strong global sales, growth at Amazon, Barnes & Noble, Kobo and Apple contributed to the increase in eBook sales. Year-to-date gross profit at 62.7% of revenue reflects a 1.1% improvement compared to the same quarter in the prior year due to the EBIT growth partially offset by higher author advanced revisions. Adjusted direct contribution to profit fell 7% to $28 million reflecting top line results partially mitigated by prudent cost control measures. STMS third quarter revenue of $245 million increased by 3% including and excluding foreign exchange. Currency neutral journals revenue grew by 3.8% over prior year reflecting solid underlying calendar year 2011 and 2012 subscription growth and advertising revenue partially offset by lower reprint revenue. Calendar year 2012 journal subscription billings are 6% ahead of prior year at the end of January. Calendar year 2012 subscription receipts are 4% ahead of prior year on a currency neutral basis reflecting accelerated renewals, higher licensed values and new business. At the end of Wiley’s third quarter, we have completed negotiations covering 75% of targeted full year business compared with 73% at the same time last year. Overall, the growth in subscription receipts is slightly ahead of our expectations. The STMS book of business was up 6% against prior year on a currency neutral basis reflecting growth in electronic revenues, particularly digital reference books and eBooks. Direct contribution to profit for the quarter of $99 million was 2% ahead of prior year due to sales growth partially offset by higher royalties. For the nine month, STMS revenue increased 2.3% on a currency neutral basis to $749 million reflecting solid journals subscription income growth and growth in Wright’s income partially offset by a 2% decline in book sales. Excluding the impact of a $5 million one-time sale to Saudi Arabia in the first quarter to prior year, STMS book sales are 2% ahead of prior year. Year-to-date, direct contribution to profit increased by 3%, currency neutral. In the quarter, STMS signed new contracts with the Society to publish two new journals with combined annual revenue of $1.4 million and renewed or extended contracts to publish 39 journals with combined annual revenue of $20 million. Two journal contracts were lost with combined annual revenue of $630,000. For the 12 months ending in January 2011, full text access hits in Wiley Online Library increased by 36% across all product types compared with the same period a year ago. Full text access for books content and the Cochrane Library database of evidence-based medicine increased strongly in the quarter. Third quarter global education revenue grew 2% to $98 million. Revenue in North America grew 4% and Asia Pacific revenue grew 1% while revenue in EMEA – Europe, Middle East and Africa – declined by 9% due to challenging market conditions, especially in the U.K. and some Middle East territories. According to publish industry data, the U.S. higher education market declined by 0.7% from November to January, during which period Wiley’s U.S. sales increased by 3.6%. For full year calendar 2011, Wiley grew 2% whereas the U.S. market was down slightly. Year-to-date global billings of WileyPLUS of $31 million were down 3% versus prior year, reflecting sharp declines in enrollment at the proper institutions where market penetration rates for WileyPLUS have been comparatively high. In the third quarter, WileyPLUS billings were up 7% with a 44% increase in digital-only billings. Sales from WileyPLUS, eBooks, digital contents sold directly to institutions, binder editions and custom publishing grew by 5% to $73 million year to date and now represent 28% of global higher education sales. Sales through online accounts continue to outperform other channels. We launched our WileyPLUS integration with Blackboard Learn in January. We are currently field testing the WileyPLUS integration Blackboard in over 50 courses. The integration will enable customers to seamlessly integrate and customize their Blackboard Learning Management System courses with WileyPLUS, including instructor assignment, student homework, Wiley-provided resources and their own materials. We expect to convert more print-users to WileyPLUS through this new service and we expect an increase in direct e-commerce sales because students will be able to purchase WileyPLUS through their instructor’s Blackboard course site. Year-to-date gross margin for Global Education of 68.5% is on a par with prior year. In the third quarter, direct contribution to profit improved 5% from prior year to $42 million due to the top line results and lower accrued incentive compensation. For the nine months direct contribution to profit declined by 5% on a currency neutral basis versus prior year, reflecting the decline in revenue. In conclusion, our revenue performance after nine months reflects the softness we’ve been facing in Global Education and Professional Trade markets. STMS remains solid with strength in key leading indicators, while in Global Education and Professional Trade some of the factors driving difficult comparisons to prior year have become easier since the start of the new calendar year. With the acquisition of Inscape and the proposed adjustment to our professional trade portfolio we are taking positive steps towards higher rates of sustainable organic revenue growth. In Global Education we are focused on serving the needs of our customers by providing them with valuable teaching and learning solutions that yield improved student outcomes. While continuing to invest in our future, we will manage costs prudently to predict – protect bottom line expectations for the business as a whole in fiscal year 2012. Based on our nine months results and other leading indicators, we are maintaining our full-year revenue guidance of low-single-digit revenue growth excluding foreign exchange. As a result of careful cost control we are reiterating our EPS guidance of $3.15 to $3.20. This excludes the $0.14 deferred tax benefit related to the reduction in U.K. tax rate and the acquisition of Inscape, which is not expected to have significant effect this late in the fiscal year. With that as background we welcome your comments and questions.

(Operator Instructions) Okay. Our first question is from Drew Crum from Stifel, Nicolaus. Go ahead. Your line is open. Drew E. Crum -- Stifel Nicolaus: Okay. Thanks. Good morning, everyone. So want to start with the guidance, can you talk about some of the drivers for the fourth quarter that give you confidence that you can hit the range you’ve reiterated this morning? It implies a pretty big step up year-on-year.

Yeah, Drew, this is Ellis. So clearly we’ve looked pretty carefully at the balance of the year on the performance on a year-to-date basis. The third quarter and the year-to-date is, from an EPS perspective, is certainly where we expected to be over the course of the year from earlier on in the year, so the guidance hasn’t changed from the beginning of the year, second and third quarter no changes. In the fourth quarter in particular you’ve probably seen at least through three quarter – in the third quarter in particular, some deceleration in Shared Service spending. Excuse me. So we expect that to continue and over the balance of the year, Steve alluded to and it’s in the earnings release as well, we’ve been controlling costs very carefully over the course of the year. That continues into the fourth quarter. So that’s been having a tampering effect on direct expense across the board. Also, as you know, we’ve lowered our revenue guidance from the beginning of the year which was mid-single-digits. We’re now at low-single digits. That’ll have an effect on incentive compensation. As a result, we’ll expect lower incentive accruals in the last quarter of the year relative to the last quarter of the year last year. Last year, we had some acceleration of results. So we had a very strong finish to the year last year in parts of the business. So, as a result, on a year-on-year basis we expect incentive accruals to be significantly lower in the fourth quarter. When you take those pieces together, also the effect of – the cumulative effect of share repurchase over the year, we get the full benefit so to speak of what we’ve purchased through the three quarters in the fourth quarter. Whereas we’ve just been getting averaging benefits so to speak through each of the quarters as we buy shares back or have bought shares back. This is not to say and is not an indication of anything we’ll do in the fourth quarter, just purely the arithmetic of the benefit of what we’ve done on a year-to-date basis, 7.3 million shares. When you take all of those pieces together, certainly, we still need to hit our expectations with respect to top line performance. All indications are pretty good there. We talked a little bit in the earnings release, and I’m sure you’ll probably have some follow-up questions regarding how our STMS renewals business is going. That’ll effect, obviously, the three months remaining in the fiscal year through the end of April. So all of that taken together, we’re confident about sticking with our guidance of 315 to 320. Drew E. Crum -- Stifel Nicolaus: Okay. Great. And, Ellis, can you talk about the gross margin decline year-on-year in the quarter? I think through the first half of fiscal 2012 we’d seen record gross margins for the business and it was partly due to the digital transition and given that digital continues to ramp for you guys I was a little surprised to see the gross margin fall in the quarter. So could you discuss what happened on that line?

Yeah, much of that has to do with timing and product mix. So I wouldn’t read too much into that, Drew. Drew E. Crum -- Stifel Nicolaus: Okay. Okay. And can you talk a little bit about what your intentions are with the proceeds of the funds you received from divesting on the consumer publishing assets? Have we seen it already with the acquisition of Inscape? Or do you have further plans for those proceeds?

Well, Drew, cash is all fungible obviously. We’re generating significant free cash flow. We’ve reduced our – our net set positioning is kind of very favorable where in buying shares, it leaves for three-quarters at a reasonable clip. We continue to have an interest in acquisitions. There are a number of things that we are looking at which is not to say that we’re ready to do anything in particular, but nonetheless, there are some interesting opportunities that we continue to look at. So that cash combined with operating cash combined with capacity to borrow under our existing revolving credit facility and access to capital markets, so it’s a range of options in terms of how that cash get used. Again, one often doesn’t want to sort of begin spending cash before they’ve gotten it, so I don’t want to go too far out and have anticipating what kind of proceeds we’ll get from that sale. But nonetheless, we assume those assets are very saleable. There’s been a lot of interest expressed in those assets over the last several quarters and for a period of time, quite frankly, from both what you might consider to be traditional publishers but also and more importantly from, or importantly from, others who I won’t name, but certainly are not typically sort of in the market for publishing assets per se. They see other opportunities with the strength of those brands in the marketplace, particularly in the digital space and areas that we couldn’t directly get to without significant investment in directions that don’t necessarily follow our strategy. So we’re excited about the possibility and potential of those assets moving to a seller, sorry, a purchaser who could make terrific use of them. We have a lot of belief in those assets in the marketplace and we’re excited about kind of focusing on Professional Trade business and our Higher Education, Global Education and STMS business. Drew E. Crum -- Stifel Nicolaus: Okay, great. And just one last – go ahead.

So you see – this is Steve – I’d just like to add a little bit more color to that, just maybe, which you might find helpful. So, the premise behind the divestiture which we’re exploring is that Wiley will grow faster and improve financial performance by focusing on our core target audiences of research, learning and professional practice. And to the extent that we are able to divert those businesses and target the use of that cash and acquisitions in the space that serves those three core target audiences in areas where through the application of enabling technology we can add significant value. That aligns much better with our core strategy, we feel. Drew E. Crum -- Stifel Nicolaus: Thanks for the updates, guys, and one last question for me and I’ll give it to Steve. Can you give us an update on what you’re seeing from a macro perspective and how you’re thinking about calendar 2012 for the U.S. Higher Education market? And if you can talk about some of the headwinds you guys have addressed in the past? For profit enrollment, textbook rental, funding, et cetera? Thanks.

Sure. Sure. So, obviously, we’ve been very focused on that, particularly, as we’re in the middle of our strategic planning cycle for the following fiscal year. It’s much too early for us to give guidance on how we see fiscal year 2013, but we’ll get providing you with that, obviously, at the end of the year. But just some of the things that we’re observing in, particularly in the U.S. Higher Education marketplace, first of all, the headwinds that you refer to primarily relate to I think the biggest single driver was the sharp fall in particularly in for profit enrollments that affected our business in calendar year 2011. Along with the difficult and tough comparables, that was driven really by the gearing up of the marketplace in 2010 to provide – to stock up the Retail business. That didn’t repeat itself in 2011. Both of those – while we’re not expecting a rapid recovery in enrollment in for profit education, we are expecting to see the rate of decline moderate and to stabilize and to begin to move towards future growth, again. We also feel that the disruption that was caused in the textbook rental channel, we’re through that now and we have a more sustainable business model. We don’t see textbook rentals as being a major drag on the business going forward. In fact, it’s pretty clear that’s what many of the players in that segment – the business model is actually pretty difficult to manage. As well as we see some really positive movement in the increasing movement to digital only, the growth and the potential for digital sales across the marketplace. So we’re expecting a market that grows very modestly and we are positioning ourselves to be able to continue to take greater market share and therefore drive back our global AIG business to the kind of revenue growth that we’ve seen in years passed and getting through this difficult year of two – the difficult year was really calendar year 2011 and I referred in my remarks to the relatively improved performance of global education in the third quarter where we saw 4% growth in the U.S. The Middle East is – we have had significant business. It’s not in the scale of things. A big proportion of our business with countries like Egypt and some of the countries that have gone through the Arab spring have been difficult markets for us in 2011. On the other hand we are seeing nice growth in the Arabian Gulf countries that have been more stable and we’ve got some really interesting prospects there. We’ve won contracts. And overall we’re more optimistic than we were in 2011 and we feel we’re well positioned to get the business moving again. Drew E. Crum -- Stifel Nicolaus: Thanks, guys.

Thank you. Our next question is from Mr. Dave Lewis from JPMorgan. Go ahead, please. Your line is open. David M. Lewis – JPMorgan: Hey, guys. Good morning. I was wondering if you could just comment or give us your views on the STMS business and the ongoing open access debate specifically with Sylvan and referring to the Research Works Act and Federal Research Public Access Act. Obviously one of your competitors has been in the press and has been receiving some criticism of late. Obviously the results are very – this is an ongoing debate and the results for the renewals are very strong but I was wondering if you could comment on that and then specifically on if you happen to give any type of concession as to some customers, how that dialogue is going and how you’re able to drive what is clearly increased usage and some positive trends within the overall business to the renewal conversation? Thanks.

Yeah, Dave. Thanks. So there’s a couple of things in there. I’ll talk a little bit about open access first and then come back to the linkage between usage and revenue. But thanks for the question. So yeah the controversy that you referred to was around the Research Works Act that was a bill that was carried forward primarily by the Association of American Publishers and Reid also there. That attempted to draw a line in the sand in terms of government mandates around the compulsory deposit of research articles funded but with U.S. government money or with research institution money in publicly open depositories. Wiley did not publicly support the RWA although we support many of its principles we didn’t feel that defining of the proposed bill was really in the best interest of the long-term dialogue that we have ongoing with groups like the Office of Science & Technology Policy of the White House. In the U.K. we are actively involved and have a seat at the table with the Finch Group that’s looking at Open access and changes in copyright law. And our about preference was really to maintain that dialogue recognizing that the National Institute of Health mandate that was put in place several years ago is really now into fact and there’s not real benefit in trying to overturn the NIH mandate. What we would like to do is work with the research and funding community to make sure that we develop sustainable models for Scholarly publishing and the dissemination of the products that Scholarly researched. So that did raise a little bit of a storm in a tea cup. The RWA has been withdrawn. There is now another piece of legislation that sort of counts as RWA that’s been introduced in Washington called FRPPA, F-R-P-P-A. We are actively opposing that legislation which seeks to extend the NIH mandate to other agencies. The fact is there’s nothing new about any of this. We’ve probably been living with a level of dialogue and a level of controversy around Open access as a model for at least 10 years and over the period of those 10 years, the noise around that and the interest around that has moved up and down. It’s probably at a little bit of a peak at the moment. We believe there are sustain – there is a role for publishers in the process of Scholarly discrimination that we can work with many models. We’ve launched, as you know, a number of open access models, or open access journals, that are growing successfully and achieving status in the marketplace. In the end it’s the value that we bring to peer review to the digitization and enablement of that research content that is valued by our audience. That’s reflected in the fact that our submissions to our journals are up significantly each year versus prior year and the current year, no exception. So, while the debate is likely to continue for a long time, we feel well positioned to participate in that and are confident that those who are in the position to influence this recognize the need to develop and economically sustainable model in the long-term. The question you raised about usage: clearly usage is a strong indicator of the value that the target audience puts on the content. So we track usage as an indicator of whether we are publishing quality content, whether we are making it as accessible it needs to be. The 36% growth in usage that I referred to in the prior year surely – certainly reflects to us the value that our audience has or places on access to our content. We don’t today have a usage – we don’t have a pricing algorithm for our journal subscription that includes usage as a variable. There are – there have been certainly experiments around that both from Wiley and other publishers. And we’re always looking at ways to bring it in. We normally, when we work with our individual customers and consortia around the revisions they make whether to – not to renew their licenses and to bring journals into their licenses, we focus as part of the discussion on usage as well as obviously the quality of the content and the price of that content, the value that it gives to the audience. So usage is already a factor in those discussions but one of many variables that our customers look at when they make their purchasing decisions. David M. Lewis – JPMorgan: That’s great. Thanks, Steve. I’m going to ask one more here and then I’ll hop off and come back, can you just provide us with the margin for Inscape? Or give us – so we can model that out? How should we think about that $20 million revenues? What’s – what is that business growing at? What did it grow in 2011? And what are the margins there roughly?

Yeah. Dave, this is Ellis. So just a couple of things about that. Certainly we’ll provide much more guidance around that when we get to the end of the year, when we’ve had a little bit more experience. Certainly we’ve modeled what we have in terms of expectations from that business from an economic perspective to come to a purchase price decision. One of the key components associated with coming to guidance associated with what our expectations are below revenue certainly have to do with our being able to complete our purchase accounting associated with the acquisition. That’s still not yet completed. The – we have an independent valuation firm who’s working on that, so I don’t quite yet know what that answer’s going to be. I could certainly make a set of assumptions associated with that. And I can tell you I’m pretty confident that we should expect accretion associated with the acquisition beginning in fiscal 2013 and forward. That’s as much as I’d like to say now but just to say that it’s a business that we believe has strong top line growth attractiveness, very healthy and attractive margins. And the combination of those things in addition to, even more importantly, a strategic set within the context of where we want to take our business were the basis of making that acquisition. David M. Lewis – JPMorgan: Great. Thank you all.

You’re welcome.

(Operator Instructions) And our next question is from Michael Corty from Morningstar. Go ahead, please. Michael Corty – Morningstar: Good morning. Had a few questions; following up on the STMS business, with all of the 2012 calendar discussions chasing a bit ahead of last year can you just provide any specific insights into that business maybe by region of the world? Or, more specifically, in the U.S. by your private versus publicly funded customers kind of ending inside? If you could kind of break that down a little bit and how those sales are progressing?

Sure. So as I said at the end of January, we’re up around 4.3% versus the prior year in terms of the amount of licensed business that we had closed in negotiation. I also mentioned that 75 – we, based on our projections for the full year, we equate that with 75% of our 2012 total business, whereas we were at 73%. So there is a – there could be some timing element to this. We are certainly seeing some earlier renewals in North America and Asia, which is being offset by some slightly slower renewals in Europe, in particular, where obviously we have some customers who are facing some financial constraints and so we’re needing to work closely with them through those negotiations. But it’s important to note that our underlying growth appears to be quite solid. Some of the growth is coming from the fact that we continue to add new customers and to convert some existing non-licensed customers to higher value licensing deals. And that’s particularly attributing to high growth in emerging markets. So in India, for example, as well as in other parts of Asia, we continue to see some modest price increases for licenses and for title-by-title subscriptions reflecting the rapid expansion of the amount of content and the high quality content that’s published under those titles. And we’re having some success in up selling and some new journals and packages to our existing customers for access to journals that they previously did not subscribe to. So, for example, a customer who had an STM collection, that’s for Scientific, Technology and Medicine, may have upgraded to a full collection that includes social sciences and humanities titles. The growth is coming fairly evenly across the world. We have had, for many years, the experience that Asia has grown slightly faster than the more mature markets of Europe and North America. This year is no exception to that. We’re also seeing some nice growth in the Middle East and in Latin America. But as I also say, the growth is pretty solid across all regions. Michael Corty – Morningstar: Great. That’s helpful. And then I just had one more question on eBooks, it’s a sensitive area possibly. You’re not named as one of the five publishers that’s talked about with this government lawsuit and Apple.

Yeah. Michael Corty – Morningstar: But just from – if you don’t want to talk about that specifically I guess just in terms of – seems to be that eBooks is such a news business – a new business and there’s a fine line between price fixing alleged versus just price discovery, given that eBooks is such a new industry. How do you think about the pricing of your eBooks relative to traditional books? Obviously there needs to be some sort of experimentation there given it’s such a new business?

Yeah. Thanks, Michael. Let me comment on – I’d rather comment on the implications of the suit, of the ongoing dispute for Wiley. I’ll give you some sense of how we think about eBook pricing. But I – so the five publishers that are mentioned in the articles in the press today are primarily publishers, they’re the big fiction houses, publishers who focus on fiction and general publishing. To me this is really a debate around price volume. So the premise in that marketplace certainly on one side of the argument is that by pricing more aggressively the potential volume is greater, and therefore the total value to the – both to the publisher and to the vendor, the intermediary, is greater. And others who believe they need to sustain pricing that is closer to the pricing of the original paper format. That question or that debate doesn’t really apply to Wiley publishing in areas of professional or educational content because the audience is more defined, it’s more targetable. I think that we and our – we, our customers and their intermediaries recognize that the published – the kind of material that we publish is of higher value to our customers and that therefore – and maybe the price demand is a little less elastic and therefore we have been successfully able to sustain higher prices. In general the price of a Wiley eBook in a sort of general professional category, a business book for example, would be a few dollars less than the equivalent print book. It certainly is – we have some books priced at $9.99, but very few. Generally it’s a couple of dollars less than the price for the print book reflecting the fact that we could pass on some of the benefit of obviously not having to manage inventory and print material to the customer. And the customer gets the benefit of the wider access and the lack of friction in the purchasing process. So that’s essential where we are. It’s also important to note that although Wiley works with Apple under the so-called agency model, where we set the price in advance and pass on a percentage of the revenue to Apple, we do that also with several other eBook vendors. And we’re also working with Amazon and others on the more traditional model, so we have no enforced one model on the entire vendor community. The models happily coexist at Wiley and for the time being, at least, there’s no intention to change that. Michael Corty – Morningstar: Great. That was helpful. Thank you very much.

Thank you. And our next question is from Mr. Dave Lewis from JPMorgan. Go ahead, please. David M. Lewis – JPMorgan: Hey, guys. Yeah, I just want to circle back in P/T and there’s a bunch of questions so I figured I’d hop off before. Steve, could you touch on the digital thesis with respect to professional trade that’s been outlined in the past two Investor Days? Did this announced divestiture – is there any change to the management team’s thinking there? Or is it more respective or specific to types of content and consumer content? And can you just address that? And to be more specific, obviously, as an example, are there more issues with pricing that you’ve seen over the course of the past six months that have you more concerned in a specific constant area? Or are there more concerns of this intermediation with specific types of content? That’s what I’m angling at. Thanks.

Yes. So there isn’t a change to the overall thesis for professional trade. As you’ve seen, Dave, several of our Investor Day presentations when we talked about our strategy for professional trade, it’s been a combination of recognizing the potential value to professional customers from technology-enabled content, particularly as it applies to workplace training, certification and accreditation assessment. And all of the additional value that we can bring to our strong reservoir of professional content and bring that to audiences that are very targetable for us in areas like finance, business, technology, architecture, psychology, as well as what we see as the potential for life-long learning, particularly around the For Dummies brand. So that has always been a central plank of our strategy and we’ve remained entirely focused on that. And, in fact, part of our – the strategic intention here in terms of re-adjusting the portfolio is so that we can focus even more resource around those opportunities because we have a high degree of confidence in our ability to serve that marketplace. I think you’ve hit the nail on the head and you talk about is this something specific to certain categories? We believe that the future value of our travel content, for example, and the Frommer’s brand it’s definitely a digital thesis, it’s definitely a digital strategy. But it’s probably not in an area where it’s paid for content as much as it is content that is provided and funded by advertising or other kind of affiliate revenue. And where we saw the real divergence in strategy was the target audience. For us to be able to build the kind of community and traffic for the whole potential audience with the global traveler and the same could be said for culinary, for example, the cookbook market. It’s not something that we have built that capability. We don’t feel that Wiley is necessarily the best place for that to be taken forward. We think the Frommer’s brand is very well positioned both in the book store, but also online through our investments in Wiley Unlimited – sorry in Frommers.com and Frommer’s Unlimited. But we think, at this point, in order to really leverage that potential across such a diverse and global mass audience, it would be better for someone who’s more focused on a different business model other than paid for content and paid to service, which is where we expect to be earning most of our revenues going forward. David M. Lewis – JPMorgan: That’s great. Thanks, Steve, and can you give us a sense – can you update us on within P/T the revenue by channel? So bricks and mortar, what percentage of revenues, today, are driven by bricks and mortar and how are they trending?

Yeah, I’m going hesitate to give you an exact figure because I don’t have that number at my fingertips. Bricks and mortar, as a percentage of our total business, has obviously come down dramatically and has been accelerating lately particularly with the removal of Borders as a bricks and mortar channel. We estimate that over the last 12 months somewhere between 800 and 1,000 book stores have closed around the world. So that’s a pretty sharp reduction in the amount of shelf, retail shelf space that’s out there. We’ve had – we’ve been seeing bricks and mortar decline as sales through online resellers, and it’s not just Amazon by the way but Barnes & Noble and many other online resellers, have been growing at the expense of bricks and mortar. We don’t feel – we feel much less dependent on bricks and mortar today than we did five years ago, which is probably a good thing. And it is true to say that the categories that we are exploring divesting are more heavily dependent on bricks and mortar than the business that will remain with us. So again, we reduce our dependence on bricks and mortar as a result of this proposed transaction. David M. Lewis – JPMorgan: That’s very helpful. Thanks, Steve. And I guess the last question and its somewhat of a two-part question, do you feel like you’re investing or you’re able to invest enough to offset these declines – investing enough in digital to offset the continued decline in bricks and mortar? And the second half of that question is Ellis, with respect to this P/T announced divestiture, should we still think about modeling operating margin improvement flattish over the next two or three years or so? Thanks.

So let me take the first part and I’ll let Ellis take the operating margin question, although I could give you an answer to that. It should get better. But the – clearly the pace of change over the last year has accelerated in our business. And we’ve been using scenario planning very effectively as a tool at Wiley for several years, but we went through a fairly intensive scenario planning exercise about 1.5 years ago and recognized that the rate of change in our marketplace would determine how quickly the digital opportunities would unfold and how quickly you would need to move to transition and transform our business from the print model. I think that pace has only accelerated in the last year. We feel well placed in terms of the investments we’ve made and you’ve seen in terms of the increases in technology spending year-on-year at Wiley, we have been investing very heavily. But I think we also recognize that we would love to have opportunities to leap forward faster by making the right kind of strategic acquisition that would help us develop some of the technology capabilities and some of the technology models that we know we’re going to need. And so we have good organic investment plans in place. Inscape we hope is just one of what will be a future trajectory of several acquisitions that will have similar characteristics that really help move the needle a little faster towards those digital business models and digital capabilities.

Yeah. And Dave, on your second question, so with the sale of those assets that we’ve outlined we would expect essentially a step function improvement in both gross margins and in contribution margins and in operating margins. And then the remaining business would be a greater beneficiary of our digital strategy or approach along the lines of what Steve described. So we would expect also some uplift in leveraging with respect to those investments around our residual, so to speak, Professional Trade business and greater opportunity for growth and expansion from a top line perspective. And then adding to that is, as I characterized earlier and Steve did as well, the Inscape acquisition provides for faster revenue growth as we expect and also at greater margins, both again at the gross level and at the operating level. So the combination of those three things: the sale of the assets that we’ve identified, the acquisition of Inscape and the benefits of the remaining business of technology and our direct digital strategy investments should all speak positively to margins, both at the gross margin level and at the operating level. David M. Lewis – JPMorgan: That’s great, guys. Thanks a lot for the time.

Thank you. And our next question, and last question, is from Daniel Moore from CJS Securities. Go ahead, please. Daniel Moore -- CJS Securities: Yes. Good morning.

Hi, Daniel.

Good morning. Daniel Moore -- CJS Securities: Regarding the strategic review, it’s just that clarification; do you view it as kind of a culmination or more an ongoing process? In other words are we likely to hear about additional divestments in the coming quarters?

Thanks, Daniel. So sorry, I also just mentioned in my answer to Dave the ongoing process of scenario planning. So we of course continue to monitor very closely events and circumstances in our operating environment that could have an impact on the future growth and health of our business. The strategic review that led to the identification of these consumer categories as a strategic misfit and really sort of followed on from scenario planning and recognized recognition of changes in the marketplace and the opportunities that exist for us in our core categories of research, learning and professional practice. For the time being, we feel confident that everything that would remain after the successful divestiture of these business categories is a good fit with our core strategic audience and our core target market that, of course, you can never say never. So we will continue to monitor changes to make sure that everything aligns with our long-term strategy, but I would certainly not expect to see any further changes any time soon, so nothing in the foreseeable future. Daniel Moore -- CJS Securities: That’s helpful. And my last question refers to cash flow and cash generation. Royalty advances ticked up in the quarter as they have been. Does any of that have to do with the announcement of the Wiley Learning Institute? And how should we think about going forward? Current assets were a little bit higher than current liabilities for the first time. Should we still think of you as having a negative working capital model? Or will that be more neutral as we thing about advances going forward?

Yeah, so Daniel, none of that relates to the Wiley Learning Institute which is a great way to bring together a community around the activities that we have under our Jossey-Bass publishing brand and our Global Education business. But there is no royalty advance implication of Wiley Learning Institute. The advance tick up that you’ve seen in the quarter actually relates to our STMS business and then the timing and advances that we pay to society clients. So, there’s no change there over the long-term. And it, in fact, on a year-to-date basis I think you’d see that it’s even, so it’s a bit of a catch-up in the quarter. Daniel Moore -- CJS Securities: Okay, thank you.

Thank you. And that is our last question. I will not turn the call back over to Mr. Steve Smith. Go ahead.

Well we thank you for your comments and questions. If you are interested in our company, we look forward to talking to you again at the end of the fiscal year at our next conference call. Thank you.

Thank you, ladies and gentlemen for joining today’s presentation. That will conclude the call. Have a good day.