William J. Pesce - President and CEO Ellis E. Cousens - EVP, Chief Financial and Operations Officer

Drew E. Crum - Stifel Nicolaus David Lewis - J.P. Morgan

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. William J. Pesce - President and Chief Executive Officer: Good afternoon and welcome to Wiley's second quarter conference call. I am with Ellis Cousens. I will provide an overview, then we will respond to your questions. Revenue for the second quarter and first half of fiscal year 2008 increased by 49% and 48% respectively. Excluding Blackwell, revenue for the second quarter and first half increased by 8% and 6% respectively. Favorable foreign exchange added approximately 2% to 3% to these results. The UK and Germany passed new income tax legislation which favorably affected reported results. Excluding certain tax benefits and Blackwell, adjusted EPS increased 25% in the quarter and 12% for the six months. Blackwell was accretive to EPS in the quarter and for the first half. Wiley's top line growth was driven by Blackwell and the strong global performance of Professional/Trade. Scientific, Technical and Medical revenue increased modestly from strong performances in last year's second quarter and first half. Higher Education reported top line growth in the quarter after a sluggish start to the year. For the first half, Wiley's gross margin of 65.5% was down from prior year as expected. Blackwell's gross margin is lower than Wiley's, primarily due to the high proportion of its revenue that is generated from society journals. Excluding Blackwell and the effective currency, year-to-date operating expenses increased 4% from prior year. Taxes contributed positively to the year-on-year earnings growth in the quarter and first half. Free cash flow for the six months improved by approximately $25 million excluding Blackwell. Higher cash earnings and lower tax payments were the primary contributors to the year-on-year growth. Excluding Blackwell, receivables increased from prior year by $26 million, but day sales outstanding improved by 2 days. The increase in inventories reflects significant reprints and a strong frontlist. The growth in property, plant and equipment was principally due to computer hardware and software purchases. Accounts and royalties payable increased due to timing, business growth and foreign exchange. Base on year-to-date results, leading indicators and market conditions, we reaffirm our guidance for fiscal year 2008 revenue growth in the mid to high single digits and EPS growth in the low double digits excluding Blackwell and certain tax benefits. Previously, our guidance for Blackwell indicated revenue of approximately $450 million with a dilutive effect on EPS of less than $0.10 per share. We are confident that Blackwell's revenue will exceed $450 million, partly due to favorable foreign exchange. Our current forecast indicates that the acquisition will be accretive to EPS by approximately $0.10 per share. I would like to provide some highlights regarding the performance of Wiley's core businesses. We are proud that nine of this year's Nobel Prize winners are members of Wiley's author community along with more than 350 Nobel Laureates who have published with us over the years. Collaborating with this esteemed group reflects Wiley's unwavering commitment to publishing must have content and sharing it with readers around the world. Professional/Trade revenue for the second quarter of $109 million and year-to-date revenue of $199 million advanced 7% from prior year. Acquisitions contributed approximately $1 million to the top line growth in the first half. Direct contribution to profit increased 20% for the quarter and 17% for the six months, mainly due to top line growth, favorable product mix and the recovery of a portion of the bad debt associated with the Advanced Marketing Services bankruptcy. A record October was led by consumer-oriented programs such as travel and reference. The technology program was up 11% in the quarter, resulting in healthy market share gains while business benefited from strong results in finance globally as well as solid performances by our leadership franchises. Licensing of content rights worldwide continued to have a positive impact on results, growing over prior year by approximately 25% in the quarter and for the six months. Sales through online channels, national and retail accounts and specialty retailers were robust. Wiley had a terrific quarter through Amazon. Every Wiley publishing category recorded healthy growth through Barnes & Noble. Scientific, Technical and Medical revenue for the quarter of $57 million was 2% over prior year. Year-to-date revenue of $112 million increased 1% from prior year. Scientific, Technical and Medical reported strong growth in last year's second quarter and six month period of 7% and 9% respectively. In addition, high margin advertising and backfile sales contributed to the sluggish top line growth in the first half of this year. Direct contribution to profit was down from prior year by 1% for the quarter and 3% for the first half, principally due to the modest top line growth and planned increases in operating expenses. Several innovative products published during quarter including InfoPOEMs for Gastroenterologists in collaboration with the American College of Gastroenterology. Wachter's World, the company's first medical blog was launched in October in collaboration with The Society of Hospital Medicine. Wiley's attracting customers through various online marketing initiatives. Electronic versions of major reference works on Wiley InterScience were made available for Google indexing at the beginning of this fiscal year, resulting on a significant increase in downloads. Blackwell's revenue and operating income for the second quarter were $116 million and $14 million respectively. These results were accretive to second quarter EPS by $0.04 per share. Blackwell's revenue and operating income for the six months were $232 million and $30 million respectively. Operating income included $11 million of amortization charges for intangible assets. Related interest costs were $34 million for the six-month period. Excluding certain tax benefits, Blackwell's results for the first half of the year were accretive to Wiley's EPS by $0.09 per share. I am pleased to report that so far this fiscal year, we've added 51 new society publishing agreements and renewed or extended 33 existing agreements. These are important leading indicators for the acquisition. Higher Education revenue for the quarter increased 2% over the last year to $43 million, thereby reducing to year-to-date decline to 3%. Signs of improvement are evident and we expect a strong publishing schedules to have a positive effect on sales during the balance of the year. For the quarter and six months, direct contribution to profit declined from prior year principally due to the top line results, expected margins on Microsoft titles and investments in WileyPLUS. Many frontlist textbooks performed well; however, attrition in the backlist offset those gains. Higher Education's top 10 franchises pulled even with prior year after a disappointing first quarter. Bookstores continue to order at levels well below the number of enrolled students. Reimportation of textbooks into the U.S. and piracy continue to affect results. The company is making strides combating these problems by monitoring suspicious buying behavior and tailoring textbooks for local markets. Wiley is one of three publishers to reach a settlement with several defendants charged with importing unauthorized versions of textbooks. After months of negotiations, a major distributor of products from India agreed not to export books. Wiley is positioned to benefit from the continuing shift of sales through the online channel. Building on the company's excellent relationships with online retailers, sales of higher education publications are up this fiscal year. WileyPLUS continues to gain momentum around the world. Revenue is deferred and will be recognized principally in the second half of this fiscal year. The deferral was approximately $2 million higher than in the first half of last year. Wiley Europe's second quarter revenue of $89 million increased over prior year by 10%. Revenue for the first half of the year grew 8% to $165 million. Foreign exchange favorably affected revenue growth by 5% in both periods. Top line growth in Europe was driven by journals and indigenous scientific, technical and medical books. Direct contribution to profit for the second quarter and six months improved over prior year by 8% and 3% respectively. Excluding favorable foreign exchange, direct contribution to profit increased 5% in the quarter and 2% year-to-date. In the UK, we experienced sluggish results in August and September followed by some tick up in October. The publication schedule of indigenous scientific, technical and medical books is back loaded, so we should experience some upside over the balance of the year. Book sales in the Middle East and Africa are robust. Revenue from The Cochrane collection, an evidence-based medicine collection published in collaboration with the National Health Service was strong. In Germany, journal revenue was tracking to expectations. Several important new journals launched during the quarter. Indigenous professional trade books are up nicely from prior year. Second quarter revenue in Asia, Australia and Canada advanced from prior year by 23% to $40 million or 15% excluding favorable foreign exchange. Year-to-date revenue of $71 million rose 19% over the first half of last year or 12% excluding favorable foreign exchange. Direct contribution to profit excluding favorable foreign exchange grew by approximately $2 million in the quarter and for the six months, mainly due to top line growth generated by indigenous publishing programs. Wiley Asia reported strong second quarter sales in India, China, Malaysia and Thailand. Wiley Asia is building momentum as the company's newer scientific, technical and medical publishing center while the professional and trade program continues to expand. Higher Education was up 12% over prior year as sales in China, Thailand and Indonesia offset disappointing results in Taiwan and Singapore. Translation licensing and custom publishing remained strong in Asia during the quarter. Wiley Australia's solid performance was mainly due to indigenous school and higher education sales. Wiley Canada enjoyed a strong quarter in its higher educational and professional trade business. Our shared services team continues to focus on the integration of Blackwell. Virtually all financial and operating systems will migrate to Wiley systems during the next several months. In summary, at the midpoint of fiscal year 2008, Professional/Trade is off to a solid start. Although Scientific, Technical and Medical reported only modest top line growth, it's off a strong prior year. Higher Education experienced a sluggish first half, but a strong publishing program and the WileyPLUS deferral should have a positive effect on the balance of this year. The Blackwell acquisition continues to perform well. As I mentioned earlier, we reaffirm our revenue and EPS guidance for the full year excluding Blackwell and certain tax benefits and we have increased our guidance for the Blackwell acquisition. Beyond the numbers, we are deeply engaged in the integration process while leading our businesses and investing in Wiley's future as we embark on our third century. With that as background, we welcome your comments and questions. Question And Answer

Thank you. [Operator Instructions]. The first question comes from Drew Crum, Stifel Nicolaus. Drew E. Crum - Stifel Nicolaus: All right, good afternoon everyone, it's Stifel Nicolaus. Two questions for you on Blackwell. The guidance for the fiscal year is $0.10 accretion, yet you've already recognized $0.09 year-to-date. Is there anything one time or are there any additional costs or ramp in costs in the back half of the year that we should expect? And I guess related to that, the $0.09 that you have recognized to date, how much of that can you attribute to the costs and revenue synergies you guys outlined when you made the acquisition? Ellis E. Cousens - Executive Vice President, Chief Financial and Operations Officer: Yes, Drew, this is Ellis. The effect on Blackwell in second half versus first half of the year, many of the transition integration programs and projects will ramp up in the second half of the year. We have accomplished quite a bit over the course of the first half of the year, but there will be some incremental spending in the second half of the year according to our forecast. And so as a result of that, the contributions to the bottom line is that we are including transition as we report to Blackwell numbers as I've said in the past. That includes all of the transition-related activities and expenses wherever they occur. There is this... as Will provided guidance, Wiley standalone excludes any transition spending even if those costs were incurred as... or within former Wiley accounts so to speak. So there is some lack of symmetry between the first and second half of the year. With respect to the second part of your question, in terms of where the upside is coming or are there cost and revenue synergies associated with the $0.09 accretion thus far in here to the first six months. That accretion comes from two places in particular versus where we had expected originally, which is in part why we've changed our guidance here. And those two principal areas are interest expense and the tax benefit of how it is repurchased and financed Blackwell, some of which came together sort of... it became fully known to us after actually closing on the acquisition and providing guidance. So most of it comes from, or all of it's actually coming from interest expense and tax benefit. There really are no material cost savings to speak of in the first half of the year. We are just kind of getting underway quite frankly in those things that will generate ongoing savings. There were certainly some small benefits here and there, but not significant, in other words, to speak of with respect to severance and redundancies and some minor activities. But it really is in the second half of the year that all of the plans and activities that we have with respect to integration come to fruition. So, again, just to be cautious, there will be expense in the second half of the year as a lot of these projects come to completion. There will be cost savings, but they'll principally be recognized in the following year as they annualize out as it were. So we'll exit the year in better shape from a net cost savings perspective than we sit today. And that's all according to the plan and the plan is being executed fairly well. Drew E. Crum - Stifel Nicolaus: Okay, great. Just want to shift gears and get your thoughts on what you're hearing from your retail partners as far as inventory levels and shelf space for P/T both in the U.S. and abroad. And Will, I'd be interested in your comments on the new Kindle product by Amazon. You've talked about a lot in the past Amazon being one of your best partners and just want to get your thoughts around that. Thanks. William J. Pesce - President and Chief Executive Officer: Yes, Drew, there is really not a whole lot to say about inventory levels other than to mention to you that really across the board, our performance has been very solid in P/T. When I say across the board, I mean across several publishing categories and also through the various accounts of the bricks and mortar stores as well as the online in the States and abroad. We are really very pleased with the momentum we have in that business and we expect it to continue given the strength of the frontlist and also frankly the depth and breadth of our backlist. You should also hopefully all observe that in my comments, particularly over the last, I would say, 12 to 15 months or so, we are getting revenue growth out of our professional and trade business not only through the traditional kind of books through various accounts, but also increasingly technology-enabled revenues through, for example, Frommers.com, to pick one of specific case, but also through licensing of some of the great brands that we have. So this business is really doing very well in very competitive markets and our relationships with various retailers is as good as ever. So we are getting the shelf space that we need to promote and sell our products and we feel very good about those partnerships. You asked about the Kindle product with Amazon, one of the reasons why I have made positive statements about our relationship with Amazon over the years is that, frankly, well, they've helped us reach customers who may not have had access to brick and mortar stores not only in the United States but abroad, and that's obviously a good thing. With Wiley's deep backlist, they have been able to provide so-called virtual shelf space if you will for our titles. And as we've commented in the past, Wiley is in many of these subject areas a vertical publisher and a publisher of several books in similar areas. So we all know when we go on to something, a service like Amazon and you purchase a particular book, there are two or three other books that are suggested, books of related interest. And frequently, those are additional Wiley titles published by our professional and trade business. So we feel great about that working relationship. And in addition to that, it really has been a terrific partnership in the sense of either our company or Amazon coming up with ideas about how we can serve customers better. And there is an ongoing dialogue about experimentation and trying to find ways to do more in this market. So we've been involved with them on this particular technology, the Kindle project and we will be experimenting with them in that regard, which you would expect from the healthy partnership that we have. And this is very consistent with our philosophy not only in Professional/Trade but across all of Wiley's businesses. And for those of you who attended our recent investor conference would know, I was talking about Wiley's evolution over time from a company that was basically product-centric, and we distributed print on paper products whether it was books or journals or encyclopedias. Historically, we did that through intermediaries. And we are evolving to a much more customer-centric company. We still of course sell print on paper products primarily through intermediaries. The intermediaries have expanded to include online retailers and in addition, we are disseminating content through many different business models electronically. And electronically can mean everything from WileyPLUS to Wiley InterScience to various e-books to this Kindle capability. And our philosophy about that is that we need to have flexible business models and flexible products to serve the needs of our customers. And we are totally open to new ways of reaching them as long as the integrity of our content is protected and that we are fairly compensated as are our authors. And we've had a wonderful relationship in working out those kinds of relation... situations with Amazon in the past and we look forward to continuing to do that in the future. But it's early days with that particular product, but we are engaged in. Drew E. Crum - Stifel Nicolaus: Okay, great. One last question. Ellis, can you offer an effective tax rate we should be using in our model for '08 and book tax rate as well then and where should we see that normalize as time progresses? Ellis E. Cousens - Executive Vice President, Chief Financial and Operations Officer: Yes, I think for the year in total I would look at 20% to 25%. Drew E. Crum - Stifel Nicolaus: Okay. Ellis E. Cousens - Executive Vice President, Chief Financial and Operations Officer: All right. Drew E. Crum - Stifel Nicolaus: This is effective tax rate, correct? Ellis E. Cousens - Executive Vice President, Chief Financial and Operations Officer: Yes, book rate for the full year. Drew E. Crum - Stifel Nicolaus: Okay. Ellis E. Cousens - Executive Vice President, Chief Financial and Operations Officer: Okay. Drew E. Crum - Stifel Nicolaus: Got it. Thanks guys. Ellis E. Cousens - Executive Vice President, Chief Financial and Operations Officer: You're welcome.

[Operator Instructions]. Next question comes from David Lewis of J.P. Morgan. David Lewis - J.P. Morgan: Hi guys. Solid quarter. Just a few questions. I just wanted to follow up first with the taxes. The tax benefit that Blackwell is seeing, I believe that's related to UK corporate reduction. Does that... are we going to see that benefit on Blackwell through the balance of second half '08? Ellis E. Cousens - Executive Vice President, Chief Financial and Operations Officer: David, the tax benefit I spoke to, I am not sure which one you are speaking to, but the one I was speaking to with respect to having a positive benefit through the first half of the year, which will continue -- David Lewis - J.P. Morgan: Okay. Ellis E. Cousens - Executive Vice President, Chief Financial and Operations Officer: Through the second half of the year is through a tax vehicle that we used in the UK within UK law. We were permitted to make an acquisition of Blackwell in the UK... it's a [ph] UK company through an entity which we've referred to as WEIHL. It's an entity that allows us to finance the acquisition in the UK partially through contribution, equity contribution from Wiley and also by borrowed funds. So the interest expense related to funds that are borrowed to make the acquisition in the UK are deductible there under UK tax law. And also since the umbrella borrowing, as it were, here in the U.S. to finance the acquisition and our other corporate needs is deductible here in the U.S., we essentially get a deduction in the UK for a portion of the acquisition and a deduction for the entire borrowing here in the U.S. So it's the tax benefit related to that borrowing in the UK to finance the acquisition of Blackwell David Lewis - J.P. Morgan: Okay. Ellis E. Cousens - Executive Vice President, Chief Financial and Operations Officer: Yes, this year there is no tax benefit related to the reduction in the corporate income tax rate in the UK. There is a benefit related to the tax reduction in Germany which was retroactive to the 1st of May which just nicely winds up at the start of our fiscal year. So we are realizing a benefit there and will continue forward. In the UK, we want to see that till next year coming from the reduction in the corporate tax rate. David Lewis - J.P. Morgan: Okay. One question on the off shoring of some these costs, pre-publication costs. McGraw-Hill mentioned last week at Media Week that they were seeing a 50% reduction in costs when you offshore some of these pre-publication costs. Is that a good ballpark of the economics that you guys are seeing? Ellis E. Cousens - Executive Vice President, Chief Financial and Operations Officer: I am not sort of in a position yet to put a percent change on that, but we are off shoring, and principally off shoring, not outsourcing. Some of it's outsourced through an entity that was acquired as part of the Blackwell acquisition. We have a Blackwell Publishing Services group in Singapore. So at least with respect to initially all of the journal publishing and activity, these pre-pub costs will be... that activity will be moving to Singapore over time. It's not all there yet. There are significant savings associated with that. I can't yet put a number to that. And then of course there is over time some forward opportunity with respect to other parts of the business to move that as well. David Lewis - J.P. Morgan: Okay. And the last one is can you guys remind me the timing; you are doing a great job with adding these new society publishing agreements. When do they... when are they going to start to hit the books? And I imagine it's... there is going to be a variety of different schedules, but when does that going to start to see an impact? William J. Pesce - President and Chief Executive Officer: Well I'll start and Ellis will... this is Will... will jump in. Well they do start at the beginning of a calendar year, not at the beginning of a fiscal year. And normally, it's at least... it's about a year out in terms of shifting responsibility for those agreements. So there is a distinction as we talk about this, and I made comments specifically as it related to what was going on with Blackwell. There are several different ways in which we are expanding the business. One is of course if we don't currently publish the journal, it's being published by a competitor and we are successful in winning that one over. And usually if we are able to do that, we can sign up agreements, I would say minimally three year agreements, typically five year agreements, sometimes longer than that. Another way in which we can solidify the business is to take existing contracts that aren't yet ready. They maybe within a couple of years, let's say, of reaching termination or being subject to renewal. And we may actually begin those conversations before to continue that relationship. So we have that going on. And then of course there are the renewals of existing agreements as we approach the term. But what you should assume for sure is that it's the beginning of a calendar year and in many cases it's about a year out. But it's not... that's not always the case. And I think the main point I want to emphasize and hope you'll take away, the reason I highlighted that in my opening remarks is you're going... we're going through a process of putting together two very significant, reputable publishing companies in the field of scientific, technical and medical publishing, Blackwell and Wiley. And while we are doing that, we are dealing with quite a bit of transition and integration and all that that takes. And you would imagine that there could be some people who think that this would be a great time to try to win over some of those society relationships that either Blackwell or Wiley had. And the fact that we are winning a very high percentage of contracts or proposals for society journals that are being published by others while renewing and extending our own during this period of transition, I think, as I said earlier, is a very positive statement about the acquisition in terms of the leading indicator if you will. David Lewis - J.P. Morgan: Okay, great. Thanks guys. William J. Pesce - President and Chief Executive Officer: Okay.

[Operator Instructions]. And it appears there are no further questions. William J. Pesce - President and Chief Executive Officer: Well thank you very much for your interest and support. We look forward to speaking with you again when we report third quarter results. Best wishes to you, your family and friends for a happy, healthy and peaceful holiday season. Thank you.

That does conclude today's conference. Thank you for your participation.