Stephen M. Smith - Chief Executive officer, President and Director Ellis E. Cousens - Chief Financial & Operations Officer and Executive Vice President

Daniel Moore - CJS Securities, Inc. Andrew E. Crum - Stifel, Nicolaus & Co., Inc., Research Division Michael Corty - Morningstar Inc., Research Division Ian Whittaker - Liberum Capital Limited, Research Division

Welcome to the John Wiley & Sons Quarterly Earnings Conference Call. Before introducing 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 the 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. Stephen M. Smith: Good morning. Thank you for participating in Wiley's Fiscal Year 2013 First Quarter Investor Conference Call. And with us are Ellis Cousens, Executive Vice President and Chief Financial Operations Officer; and Brian Campbell, Director of Investor Relations. I'll take a few moments to provide an overview of Wiley's performance in the first quarter and we will then respond to your questions and comments. When we review Wiley's performance, we'll refer to financial variations, excluding the effect of foreign exchange unless otherwise noted. In a difficult economy, Wiley posted a 2% revenue decline for the quarter, reflecting declines in our STMS and Global Education businesses, partially offset by an increase in P/T. On a U.S. GAAP basis, earnings per share fell 26% to $0.60. U.S. GAAP EPS includes deferred tax benefits of $0.14 per share for both fiscal years 2013 and 2012 and a 6% share restructuring charge in fiscal year 2013. Tax benefits were derived from 2 consecutive legislative reductions in the United Kingdom corporate income tax rates. The benefit had no current cash tax impact. Adjusted EPS of $0.52 declined by $0.16, both including and excluding the effects of foreign exchange. Lower revenues and higher operating and administrative expenses offset the lower tax rate. Adjusted EPS excludes the deferred tax benefit and the restructuring charge. Shared services and administrative costs of $95 million were flat to prior year, including foreign exchange. Excluding a $500,000 restructuring charge and foreign exchange, shared service costs increased by 1%, driven mostly by higher technology costs to support investments in digital product and infrastructure, partially offset by lower distribution costs. Free cash flow for the first quarter was the use of $106 million, that's $47 million greater than the prior year. A $30 million contested German income tax deposit was the main driver. As reported previously, tax authorities in Germany notified Wiley in May 2012 that they are challenging the company's tax position with respect to the amortization of the stepped up assets. Under German tax law, the company must deposit with the German government all contested taxes and their related interests and have the right to defend its position as challenged by the authorities. The company's management and its advisers believe that the tax treatment is valid and in accordance with German tax regulations and that it will be successful in court. The circumstances are not unique to the company. First quarter free cash flow was also affected by lower cash earnings as a result of decline in revenues, acceleration of calendar year 2012 cash collections into fiscal year 2012 and higher capital spending on technology. And debt was $365 million at the end of the quarter compared to $353 million a year earlier. During the quarter, Wiley re-published -- repurchased 218,000 shares at a cost of $10.6 million. In June, Wiley increased its quarterly dividend by 20% to $0.24. It was the 19th consecutive annual increase. Now, I'd like to provide some information regarding performance of Wiley's global businesses. You will note that the company now includes a report on segment performance after the allocation of certain direct shared service and administrative costs for the purposes of assessing performance and making resource allocation decisions. STMS revenue of $236 million for the quarter declined by $9 million or 4%. General subscription revenue declined by 2% from prior year, mainly due to publication timing. Rights, backfile and corporate sales revenue also declined in the quarter against a very strong performance in the first quarter of fiscal year 2012. Calendar year 2012 subscription growth rates moderated during the quarter as we saw fewer major license deals compared with the year earlier. At the end of July, institutional subscriptions for calendar year 2012 are up approximately 2% compared with calendar year 2011 at the same time. Particular renewals in Europe, Middle East and Africa driven by cuts in public funding and non-renewable subscriptions in some Middle East markets have slowed our revenue growth. Our business in the U.S. and Asia is performing well. The STMS book business increased 1% to $37 million. Digital revenues grew 54% as a result of strong sales of e-books and digital licensing. This growth was offset somewhat by a decline in print revenue. Digital sales now comprise 23% of total STMS book sales compared with 15% a year ago. Adjusted direct contribution to profit for the quarter of $94 million was down 9% from prior year. Adjusted direct contribution to profit excludes a $3 million restructuring charge related to the discontinuation, outsourcing and/or relocation of certain STMS activities that will result in a reduction in ongoing operating costs. Restructuring charges are expected to be fully recovered within 18 months. In the quarter, STMS signed new contracts with society to publish 7 new journals with a combined annual revenue of $2 million, renew or extended contracts to publish 8 journals at a combined annual revenue of $8 million. 2 journal contracts were lost with annual revenue of $6 million. In August, we announced a new agreement to publish 17 journals from the American Geophysical Union, the world's leading society of Earth and space science. AGU journals, which have annual revenues exceeding $20 million, will be published by Wiley from January 2013. In the 12 months ending in July 2012, full text accesses on Wiley Online Library increased by 15% across all product types compared with the same period a year ago. During this period, usage of journals was up 14% and of books up 38%. Impact's Factors are an important measure of journal quality based on the frequency with which articles published in that particular journal are cited elsewhere in the peer-reviewed literature. The high quality of the Wiley-Blackwell Journal portfolio, as measured by Impact Factors on rankings, is an important element in the purchasing decision-making process for our customers. Thomson ISI 2011 Journal citation reports show that Wiley-Blackwell has continued to increase both the number and proportion of its journal titles with an Impact Factor, with 1,156 titles, that's 76% of our total, now included. This is an increase of 5% from the 2010 Journal Citation Reports and includes 43 titles which have received their first Impact Factor. 34% of all Journal Citation Report categories [indiscernible] Wiley title ranked in the top 3 and over 300 Wiley journals achieved Impact Factors that placed them within the top 10 ranked journals in their field. Turning to Professional/Trade, Professional/Trade had a solid start to the year, with first quarter revenue up 4% to $102 million. The acquisition of inscape contributed to the growth in the quarter, exceeding expectations with revenues of $6 million. Consumer category fell 6% to $23 million, while technology declined 5% to $19 million even as Wiley strengthened its market-leading position in the category. Those in the business category grew significantly by 23% to $39 million, driven by the Inscape performance and the successful launch of a new partnership with the Certified Financial Analyst Institute. E-Book sales of $10 million were flat for the quarter due to timing. Digital revenue, including Inscape, grew by 43% in the quarter and now accounts for 21% of global PT revenue. Gross profit, at 63.2% of revenue declined slightly compared with the prior year performance of 63.5% due to product mix. Adjusted direct contribution to profit grew 4% to $22 million, driven by higher revenues and Inscape margins. Adjusted direct contribution to profit excludes a $1.3 million restructuring charge relating to the discontinuation or relocation of certain PT activities. In the subsequent events following the close of the quarter, Wiley announced an agreement to divest its travel business, including the Frommer's Travel brand to Google. Sale closed at the end of August. We continue to explore opportunities to sell a number of other consumer publishing assets in culinary, general interest and the CliffsNotes brands as announced in March. We will provide additional guidance on the impact of the divestiture of the travel business in the second quarter and with respect to the sale of other consumer publishing assets when and if they occur. First quarter Global Education revenue fell 5% to $73 million. Decline in revenue is due to cautious ordering on the part of bookstores as they anticipate changes in student purchasing behavior and the impact of online ordering, used books and rentals. Revenue from non-traditional products, including digital, binder-ready versions and custom formats increased by 15% to $21 million and now accounts for 29% of Global Education revenue, up from 23% a year ago. WileyPLUS sales grew by 18% in the quarter, leading to an increase in deferred revenue as these revenues are earned over the duration of each course. According to published industry data, the U.S. higher education market has declined by 2.7% since January and grown only slightly by 1.2% for the 12 months ending July. In comparison, Wiley has outperformed the market, with revenues flat for the calendar year-to-date and growth of 2.5% for the rolling 12-month period. We successfully released the integration of WileyPLUS to the Blackboard learning management system in June. Over 150 campuses have implemented the Wiley Blackboard WileyPLUS building block in the first 2 months since release. The structure that any Blackboard campus now has direct access to WileyPLUS courses in their discipline. When WileyPLUS is adopted, the instructor will be able to assign WileyPLUS directly through Blackboard, and students will have a seamless experience between Wiley course materials and their campus environment. The agreement with Blackboard will enable us to increase WileyPLUS penetration in so-called low validation markets, increase direct digital e-commerce sales and enable sales to distance and online education programs. Global Education adjusted direct contribution to profit for the quarter declined 18% to $22 million, but the decrease reflects top line results and higher composition costs. Adjusted direct contribution to profit excludes approximately $170,000 in restructuring charges. In conclusion, we remain confident that Wiley will weather the ups and downs of these challenging market conditions through the balance of fiscal year 2013. We continue to gain market share in the markets we serve. We are focused on accelerating the transition to digital business models, which remain critical to our ability to serve the needs of our customers and we are taking the opportunity to reduce our ongoing operating costs. While the first quarter was a bit weaker than anticipated, looking at the remaining 3 quarters and what we know with regard to revenue to come and how our expenses lay out for the remainder of the year, we continue to believe we can achieve what we provided as guidance in June. We'll again need to manage expense growth carefully as we did successfully last year. Foreign exchange has been a headwind thus far as the fees we cannot forecast has its effect on EPS by the end of the fiscal year. In light of these factors, we reiterate our fiscal year 2013 guidance of currency neutral mid-single-digit revenue growth and EPS in the range of $3.50 and $3.55. Foreign exchange is a possible downside. This excludes all unusual tax benefits and the first quarter restructuring charges. With that as background, we welcome your comments and questions.

[Operator Instructions] We'll go first to Daniel Moore with CJS Securities. Daniel Moore - CJS Securities, Inc.: Given the revenue declines were somewhat across the board, looking at the segments in Q1, just elaborate a little bit more as to your confidence that you can still grow the top line in the mid-single-digit range. Obviously speaking, x currency for the remainder of the year, what are the main drivers? A little bit more detail would be fantastic. Stephen M. Smith: Okay, Dan. So I'll start and as usual, I'll let Ellis complete the things that I should've said and didn't say. So there are a number of things as we look forward to the year in terms of leading indicators. Obviously, one of the big metrics we track is the calendar year subscription growth for 2012, 2/3 of which becomes revenue in fiscal year 2013. And I mentioned the figure of 2% at the end of July. I had a period where most but not all of that business is down and our sales force continues to work on some late license opportunities, particularly in Europe, Middle East and Africa. Overall, we see that as being a driver of further revenue growth, the subscription performance in the first quarter as you mentioned was largely due to the timing of issue publication, which as you know, is the basis for how we recognize revenue. We also have the benefit of knowing that we have won the American Geophysical Union contract, which will bring nice revenue into the last 4 months of the year once we start publishing those journals in January 2013, as well as some pretty good leading indicators around corporate sales, which we expect to perform better in later quarters. So that's by and large, for the STMS business. Those are factors that give us some confidence that we'll perform much better in coming quarters than we did in the first quarter. With respect to our PT business, again we have a very strong front list that we're looking at for second and third quarters so we expect to really pick up some momentum in the marketplace there. We're very optimistic that we will complete the process of restructuring our consumer businesses and we'll be able to continue to benefit from the growth in not only Inscape but also across the business category and some expectation that we will see further eBook growth during the year. I mentioned that eBook sales in the quarter were flat. There's a timing issue there. We had to catch up in the previous year in terms of the way that our customers report revenue to us, which gave us a boost in the first quarter of fiscal '12 and we expect to be much better than flat throughout the rest of the year for eBooks that continues to be significant driver of results. And then lastly, turning to Global Education, as always, it's tough to call at the end of the first quarter, right in the middle of the sales season how that market is going to play out. I mentioned the industry statistic figures that that market has been depressed. There is no doubt that rental textbooks and other business models are having an impact on sales of new books, particularly with the traditional textbook. But we also think that, and we're pretty confident, that our customers in the bookstores are holding back a little bit in terms of their ordering patterns. We expect to see more sales as and when student actually show up for the first week of college whether that's sales of Digital Products to them directly or whether it's bookstores waiting to anticipate the order impacts before placing late orders once they see the ways of the student size. So I think those are all factors that roll into our confidence that we can stay with our guidance of mid-single-digit revenue growth. We are in a tough operating environment. There's no doubt, our markets continue to be difficult as they have been for the last couple of years but we believe the strategies and action plans we've put in place will continue to provide us with opportunities for revenue growth. Daniel Moore - CJS Securities, Inc.: And last year, if we look back, revenue obviously was a little bit disappointing, it didn't quite meet your expectations. But with strong cost controls, you were still able to hit bottom line targets. Maybe talk about your confidence there. If revenue doesn't come through and it's more of a flatter low single-digit type revenue environment this year, are you still confident that you can get to the $3.50 or $3.55? Ellis E. Cousens: Yes, Dan. This is Ellis. So I'll speak a little bit more to the cost size and Steve can fill in the holes that I have if I miss anything. But again, as you noted, particularly in the fourth quarter last year, and throughout the year actually, 3 quarters, the last 3 quarters of the year, we're pretty careful in terms of managing costs and had a pretty, a very strong fourth quarter coming from cost control. A piece of that is what we internally call contingency plans, which is we carefully, in putting together a plan prototype our spending in terms of new investment in addition to headcounts and the like. And we do that every year, whether or not a year is going to -- turn out according to plan or not, as we've done in last year, which also started out a little bit on the weak side. This year as well. We're carefully watching and looking at investments in adding people and investments that are lower priority, let's say in terms of meeting our short, mid term and long-term goals and objectives, in terms of investing around digital transformation and transition. As you also know, that to your question about if you miss revenue, imagine costs, one of those elements of missing revenue is unfortunately incentive comp I guess it's fortunate or unfortunate, we have a fair amount of compensation that is related to performance. And to the extent we've missed any one of the 3 measures that drive that, one of which is revenue, the other is earnings per share, the third is cash flow, if we missed revenue significantly, that would release some incentive comp that otherwise would have been paid to colleagues back into earnings and would bridge some of that gap. One piece that Steve did mention and it's in the earnings release as well, that we can't really predict with any certainty has to do with foreign exchange effects on the bottom line. Both $3.50 to $3.55 was including the effect of foreign exchange, which was neutral for the first quarter of the year but as we exited the quarter, exchange rates particularly with respect to the euro, would have an adverse impact if it stayed where it is for the balance of the year. So that's Steve’s reference to being a headwind, is over the balance of the year that if rates stayed exactly where they are, we could come off of that number would be at the low end, more so than at the higher end. Daniel Moore - CJS Securities, Inc.: That leads to my last question, if indeed -- if we stay where we are today, are we talking about sort of low end or $0.05 impact or can you quantify what the impact on that [indiscernible] . Stephen M. Smith: I can say, we have -- I have a forecast. The number is around the number you mentioned. It's around $0.06 or so but that would mean exchange rates would need to stay exactly where they are and everything else would need to be exactly as we forecasted for the balance of the year. But in terms of order of magnitude, it's about $0.05, $0.06.

We'll go next to Drew Crum with Stifel Nicolaus. Andrew E. Crum - Stifel, Nicolaus & Co., Inc., Research Division: A couple of questions on the Scientific Journals business. Is there any way to quantify the impact from the journal publication timing issue? And when should we expect you guys to recoup that? And then also Steve, I think you made reference to the U.S. market, the business doing well in the U.S. Can you talk about market conditions in the U.S. and any change that you're seeing or is this just relative outperformance for your business? Stephen M. Smith: So the impact of the publication, every quarter, we don't publish exactly the issues that we expect. There are some that move forward into the preceding quarter and some that don't make it into the quarter. So we look at that based on our expectations. And it's of the order of around $3 million is the impact of timing, which is one of the impacts on our overall lower subscription revenue, and as well as -- another factor there that you might want to just be aware of is in fiscal year 2011 or fiscal year 2012, we still build from 2010 calendar business in the first quarter of that year. This year, we only build a tiny bit of the same revenue of 2011 income out of 2012. The difference there is about $1 million as well. So you add that to the $3 million. That's based on the timing of, not publication, but actually of the timing of licenses being transacted. With regard to your question about the U.S. market, my comments were relative. So EMEA is particularly challenging at the moment given the ongoing troubles in Europe. But also we lost entire markets, in Iran, was actually a significant market for scientific journals. We no longer sell journals to Iran because we can't get the money out. So that's had a big effect on that marketplace. In the U.S., we continue to see pretty much the same patterns that we've seen in previous years, with really strong renewals with a major consortia who recognize the high quality of the Wiley-Blackwell general portfolio and we're very encouraged by that. So we're seeing strong growth and good renewal rates with those major customers, offset a little bit by some softness in certain states and territories in California, again being one of our most challenging marketplaces and really as a result of tight funding for some of the funded library budgets and research institutes. So we're seeing some growth in the U.S. We're probably seeing EMEA being flat to down. We are continuing to see nice growth in Asia. Andrew E. Crum - Stifel, Nicolaus & Co., Inc., Research Division: Okay, good. So next question pertains to digital. At your investor meeting last year, you talked about fiscal '14 targets for all the segments and looking at Professional/Trade for the fiscal first quarter, digital accounted for 21% of the total revenue. I think the goal was about 25% by fiscal '14. And jumping over to the higher ed or Global Education, it seems like the adoption rates around digital may be a little slower than we had anticipated previously. So taking those 2 into consideration, do you rethink the targets that you set out last year? And so like to your comments on the trends in digital for those 2 businesses? Stephen M. Smith: Drew, as you know, we have an investor conference coming up at the end of the month and we plan to give you a very thorough update. But just as a headline, we think P/T is well on-track and well-positioned, actually, to exceed its 25% goal digital-only. Inscape acquisition helped enormously with that, of course. And we continue to look for similar opportunities to really move the needle. In terms of Global Ed, we're still seeing very nice takeup of WileyPLUS but also introducing some new offerings in terms of other digital courses that we can bring to market more quickly. And we'll talk quite a bit about our strategy in Global Ed at the upcoming investor conference. I would, I'd say, watch this space. But we certainly don't see any need at this point to revise downward any of our projections about the speed with which we might migrate to digital. Andrew E. Crum - Stifel, Nicolaus & Co., Inc., Research Division: Okay, last question for me, just a housekeeping item. Ellis, what tax rate should we be using for fiscal '13? Ellis E. Cousens: I would say 28% to 29% is a good number to use, excluding the adjustments that we've made out with respect to U.K. tax.

We'll take our next question from Michael Corty with Morningstar. Michael Corty - Morningstar Inc., Research Division: Just a few questions for me. First of all, in the Professional/Trade business, with the variety of assets you have for sale, would you be willing to keep any of those assets for which you don't give a fair price? Obviously, you're being patient in the sale process. And then another one, on the open access initiatives that were -- you talked about briefly in the earnings release, any quick comments on this additional option for single journal articles? Sometimes investors are not familiar with Wiley. They tend to overemphasize the threat of Open Access to your business model. Stephen M. Smith: Michael, let me start out with respect to the sale of PTS. Just to recap, as you know, and we announced, we completed the sale of all of our travel to Google back at the end of August. We'll report on that in the 10-Q. In fact, that question's been asked a number of times. We had $22 million roughly for the sale of those assets. The remaining assets, we're in various stages of discussions with parties concerning those assets. It's a good question if we get a good enough price. The question is what is a good enough price given the nature of our expectations are with respect to performance on those assets? The key there is that those assets do not fit strategically with where we're headed in our professional business. And so therefore, exiting those assets will be key over a point in time, or in somehow transitioning or transforming those in another way. Because strategically, the way those assets currently sit within Professional/Trade, they just don't fit. So our greater preference is certainly as announced is a sale. I think we're feeling relatively kind of neutral to okay, that something may materialize there. There are other options other than sales to exit those businesses in the event that a sale doesn't work. We're kind of a little bit up in the air and through the end of September, we'll have a better read on that. I think by the end of the quarter, when we sit here and have a discussion with you in December, we will at that point in time give you conclusive information on what we've done, either with respect to a sale or with respect to how else we might manage those business for the balance of the year. Another question that you didn't ask but is one that would be logical to ask is with respect to the sale of the travel business and what else we might do with respect to the sale of any other consumer assets. In the second quarter, when we get to December, we'll provide adjusted guidance with respect to the effect on those sales as to revenue and earnings per share, if any, and free cash flow, if any. Although we don't provide guidance on free cash flow, we could describe any kind of proceeds associated with the sale. Ellis E. Cousens: And then I will pick up on the second thought of your question, Michael. First of all, I really welcome your caution that investors should not overreact to news and stories in the media around Open Access. Open Access has been with us for a very long time and the debate continues, although there has been, as you have seen, quite a little movement around that away from the U.K. and from the European Union over the course of the last quarter. Our view is that Open Access as it stands today has not had a detrimental impact on our STMS business, although what does have a detrimental impact is insufficient library funding, to maintain the kind of growth in journal subscriptions that we would like. But Open Access itself, as another business model, has actually provided us with some revenue opportunity as we continue to grow the number of times where we accept publication fees and also launch so-called gold road Open Access only journals. With respect to the developments in the U.K. and Europe, we're both somewhat encouraged and mildly concerned about what we see happening there. We take encouragement from the fact that the debate seems to becoming more sophisticated. That is, the naiveté that existed around the thought that somehow journal articles could be reviewed, digitized, published and made available through highly effective digital platforms, all of that could happen without payment, that it could happen for free. That notion seems to have been dispelled and a clear recognition of the committee report in the U.K. but also in language from the U.K. government and from the EU. But recognized is that a sustainable business model is needed to maintain the quality and reliability and trust in scientific publication and discourse. So we do take encouragement from that. We hope that ultimately, whatever business model prevails, that there's a recognition that there is a need to continue to fund the peer review and publication of scientific research. And we are concerned to make sure that we don't see any dramatic changes in conditions for Open Access deposit particularly in the so-called Green Road model around the embargo period, under which articles after publication are posted to publicly available websites. So our view is we will be living in a mixed economy for some time to come. We don't see any precipitous decline in the subscription business but we do see a little bit of a move towards quality. And so leverage wise, we emphasize quality in our earnings releases and in our communications with investors. We think that quality is going to be -- has become even more important than it has been in the past and for the success of individual titles. And we also see the continuation of growth in the so-called gold road Open Access model and we will no doubt continue to expand our offerings in the Open Access.

[Operator Instructions] And we'll go next to Ian Whittaker with Liberum. Ian Whittaker - Liberum Capital Limited, Research Division: I have 3 questions, all on the Global Education business. The first thing was just interested in your comments about why bookstores have been more cautious in their ordering and your comments about anticipating changes in student's behavior. I wondered if you could talk a little bit more about that. The second thing then just has to sort of just looking at some of the other comments there. You're talking about impact of online ordering, used books and rentals. I mean, these have been Impact Factors for a number of years. Do you think there's any sort of acceleration coming through in those trends on the impact on the Global Education side of the business? And the third thing is it's more of a clarification point. You mentioned that the U.S. higher education sales have been down 2.7% since January. When Pearson reported back in late July, they were talking about gross sales being up 0.7% for the 6 months now. Sort of -- it would either be that July must've been a precipitous month or there's may be some sort difference in terms of how you both classify in the market. So some sort of if you could give some sort of clarification, that would be great. Stephen M. Smith: Let me just take the last one first, if I can. So I didn't listen to Pearson's conference call. I wasn't aware of their number. Where they talking about market growth or were they talking about Pearson's own growth in the period? Ian Whittaker - Liberum Capital Limited, Research Division: No, they were talking about market growth. What they said was in U.S. higher education, the way they classified it was gross sales of 0.7% and that was to the end of June. Stephen M. Smith: Gross sales? Ian Whittaker - Liberum Capital Limited, Research Division: Gross sales. Stephen M. Smith: I actually can't comment on that whether their number came from the same source as the number that I provided. But these were -- this is published industry data on the U.S. higher education market through the month of July. But I think we talk about net sales rather than gross sales. Ian Whittaker - Liberum Capital Limited, Research Division: I'm sorry, can you just clarify what would be the difference between the 2? Stephen M. Smith: Yes, gross is gross before returns. Let me make a couple of comments about bookstore ordering patterns though. So yes, you're right, that obviously online, digital sales and used books and rental have been around in the marketplace for a long time but I would say yes, the impact of those is becoming greater in terms of the impact on sales of the traditional hardcover textbook at the prevailing copy textbook price. So that's made bookstores less certain about stocking up, I would say. If you look back 2 or 3 years ago, bookstores would have anticipated student demand that have taken a note of the enrollment for specific course and they may have ordered anything up to 70% or 80% of the number of students that have ordered copies to cover that, recognizing that in any class, there is always a subgroup of students who won’t buy anything or they’ll go to the library or whatever. I think what we're seeing, if we match ordering of known adoption to known enrollments, we're seeing bookstores taking much, much smaller quantities upfront. That's partly because they don't know how many students will buy a used book, how many will come online to buy digital only. Of course, Amazon's growing strength in the channel has also caused some channel confusion. Bookstores again are reluctant to place orders until they see the students show up on the first day of term with their book lists. And textbooks has added a further confusion into that because we don't think that the print textbook model is necessarily very sustainable. What has been, is that there was a large amount of inventory that went out in previous years. Most of that has remained in the marketplace and is now available in the used books shelves but it's just added to a lot more confusion and bookstores are naturally, I think they're cautious because they wanted to protect their working capital. They don't want to order more than they will have demand for and they're finding it much more difficult now than they were in previous years to predict exactly what that demand will be at the start of the semester. Ian Whittaker - Liberum Capital Limited, Research Division: That's extremely clear. And just on that, do you think that’s likely -- I mean put another way, do you think this is now likely to be a permanent feature of the market, that bookstores react in this way? Or is there any reason why you think it may be exacerbated by the cyclical pressures we're seeing at the moment? Stephen M. Smith: You would hope that bookstores -- provided there aren't similar disruptions to distribution channels in the future, that bookstores will get more used to the new environment and begin to get better at predicting their demand. But I think it is the degree of change and the pace of change over the last year or 2 that's made it particularly hard for them to forecast at this point.

We'll go next to Sammy Cassal [ph] with Exane.

One quick question, I'm familiar with the issues on rentals pressure on for-profit enrollment in the U.S. explaining the pressure you've just talked about. Can you help me understand why Asia Pacific is down more than the U.S. at 9%? What's been going on there, please? Stephen M. Smith: I'm probably not going to be able to give you as comprehensive answer as I'd like to but I do know we have some timing issues around from particularly large adoptions, especially in the country of Taiwan. It might seem strange that I would mention a small island off the coast of China as being significant but within a quarter, actually Taiwan has always been a very large consumer of textbooks. We sell a lot of accounting textbooks there. We do know we've got some orders that are delayed for Taiwan. We're also seeing a tail off in our business in India, which we believe is temporary. But given some of the challenges in the Indian economy that are relatively recent, and we've seen enrollments in a number of courses in India tailed back in this year and we've seen some universities actually shut down individual courses. We're in a bit of a bubble in India in higher education as more and more students saw opportunities there, there's been a correction of that. But we don't see that as being a long-term issue.

Can I ask you, with regards to August as the largest month of the year, do you want to make some comments on how the month of August has been for the markets for higher Ed? Stephen M. Smith: No, Sammy. We will talk to you about that at the end of the second quarter.

And we'll go next to Michael Corty with Morningstar. Michael Corty - Morningstar Inc., Research Division: A question on the bookstores and the rentals asked. Real quick, too. I know these are smaller line items within your entire business but in terms of impacts on the macroeconomy and your business, I know at one point you said that the backfile sales can have some -- are cyclical in some manner, as well as the small amount of ad sales you do. What are the any current trends there that we should be aware of on those 2 line items? Stephen M. Smith: No. As I said in my earlier response, we have leading indicators. Obviously, we have some backfile deals pending, that we are negotiating. We have a forward order basket for ad sales and corporate sales which by the way, goes beyond advertising but also such things as responsive reprints for the pharmaceutical industry. The leading indicators there are pretty good. So we feel that there's still some more business to come there during the course of the year. Obviously, we've got to get those deals done and we've got to finalize the publication of the items that are under order for advertising and reprint sales.

[Operator Instructions] We'll go ahead and go next to Ian Whittaker with Liberum. Ian Whittaker - Liberum Capital Limited, Research Division: I just have a follow-up question. Just going back to education, just look at your technology investment in the quarter. I think it was up around 21% year-on-year. Now I know it's one particular quarter. There were timing issues and so on. But coming back to this point, before the potential to flex costs if revenue declines continued, how much of that technology investment is it what is co-investment that you need to grow additional product further and how much could you scale back on? And I guess, sort of a jump to that, is the argument with digital has always been that digital should help margins in education. You now got it around 29% of revenues. You're sort of -- I know you've been very clear before in saying that there may be a bit of a time lag there for digital margin enhancing but is there anything that you've seen so far that has changed your opinion that digital will eventually enhance margins? Ellis E. Cousens: Ian, this is Ellis. Let me pick up on those questions. With respect to our ability to manage expense growth in technology, there's a number of factor there. One is we can manage current investments in technology in terms of prioritizing what we spend on that directly affects cash, certainly and has some degree of effect in some cases, with respect to what is expensed because of the nature of how some of that investment is capitalized, if it's development and some of it is expensed directly and/or in terms of the timing of when new services go in service and begins depreciating. So there is a degree of flexibility around that. It's principally focused on current investments, so more so on cash, but expenses affect it as well. It is an area of big spend and pretty significant spending growth and we do have clear plan for prioritization in terms of investment and much of that is focused on kind of I call it mid to longer term, and in some cases, near-term investments in transformation and transition. So we tend to protect those areas somewhat more so than other areas of spend. In terms of the rest of your question around -- actually, I'm losing it for a second here. Oh yes, in terms of expectations of margin effect with respect to digital, there is nothing that we would conclude that our expectations in terms of margin benefits coming from digital would be less than we've seen in the past. Some of Steve's answer to the question earlier around the degree or speed of transformation to digital transition and transformation to digital should in fact favorably impact margins sooner if that in fact plays out that way. One of the answers I didn't provide before in retrospect around cost control has to do with some of the structural views that we're taking with respect to our overall cost structure. Some of this is normal kind of view taking with respect to kinds of activities that even in great times when the top line is growing robustly, it's been a while but I can remember those days before the economic cycle that we're in, one takes a look at how we spend money, where we spend money, where we invest in certain skill sets, some of which are strategic and critical and others of which are kind of you can source in other areas where costs are lower. Those opportunities are continuing to grow and expand in terms of the kinds of services that need to be sourced in higher cost locations like in Western Europe and United States and the percentage or the share of expense that can be sourced in other locations that are lower cost within or outside of Wiley, so using third-party vendors for that. So those opportunities are ones that we're onto and we've reaped some benefit of that last year. We're gaining some benefit and accelerating some of those benefits this year. Unfortunately, at times it involves existing colleagues, hence the restructuring charge in the first quarter of $4.8 million. So all to say is that there are opportunities in the normal course, with or without contingency plans, with or without higher or lower rates of revenue growth, where there are opportunities to manage costs in a more tight, careful basis and also strategically, I think I mentioned one of the conference calls, certainly around us looking at strategic procurement of third-party goods and services. That's an opportunity that we're moving on and we'll be moving on that in this quarter, to begin to place some of those opportunities. That will drive, over time -- it won't happen in a quarter or 2 or maybe even 3 but I would say within 12 to 24 months, we'll begin to see significant savings coming from alternative sourcing approaches for those kinds of goods and services which involve, quite frankly, a fairly significant share of expense within the company.

We do not have any further questions in queue. I'd like to turn the conference back over to Mr. Smith for any additional or closing comments. Stephen M. Smith: We thank you for your comments and questions. We look forward to speaking to you again at the end of our second quarter and at our next investor conference call in December. Thank you very much.

And that does conclude today's conference. We thank you for your participation.