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Wiley Reports Second Quarter 2018 Results

HOBOKEN, N.J.--(BUSINESS WIRE)-- John Wiley and Sons Inc. (NYSE:JWA)(NYSE:JWB), a global research and learning company, today announced results for the second quarter ending October 31, 2017.

HIGHLIGHTS

  • Revenue increased 6% to $452 million; +3% at constant currency
  • Adjusted EPS increased 32% to $1.03; +22% at constant currency. EPS on a GAAP basis at $1.04, up from ($0.20)
  • Free Cash Flow less Product Development Spending for six months improved by $38 million
  • Brian A. Napack named as President and CEO

FINANCIAL SUMMARY

Unaudited ($millions except for EPS)

GAAP Measures Q2 2018 Q2 2017 Change

Change

Constant Currency

Revenue $451.7 $425.6 6% 3%
Operating Income $82.8 $47.6 74%
Diluted EPS $1.04 ($0.20) +$1.24
Non-GAAP Measures Q2 2018 Q2 2017 Change Change

Constant Currency

Adjusted Operating Income $81.4 $63.3 16%
Adjusted EPS $1.03 $0.78 22%

  • Revenue increase was largely driven by growth in Research Journals (+3%), STM and Professional Publishing (+4%), and Education Services/Online Program Management (+6%), as well as growth from the Atypon acquisition (+$6 million).
  • Adjusted Operating Income growth was mainly due to higher revenue and lower technology expenses, including ERP implementation costs. Adjusted Contribution to Profit (CTP) for Research, Publishing, and Solutions rose for all three segments. GAAP Operating Income increased 74% to $82.8 million, which also reflected the timing of restructuring charges and credits, as well as a settlement charge related to a pension distribution for terminated employees in the prior year.
  • Adjusted EPS increase was due to higher operating income and lower interest expense. GAAP EPS growth (+$1.24) also reflected unfavorable items in the prior year, including an income tax settlement in Germany (-$0.83) and the pension settlement charge (-$0.10).
  • Return to Shareholders: During the quarter, Wiley repurchased 285,599 shares for $15.2 million at an average cost of $53.37. Approximately 3.2 million shares remain in the repurchase program.

MANAGEMENT COMMENTARY

“The second quarter was highlighted by the announcement of Brian Napack as our new President and CEO and Ella Balagula as our new EVP of Publishing. We also realized improved growth in Research, better than expected results in Publishing, and significant progress in our operational excellence initiatives,” said Matthew Kissner, Chairman. “This month, we celebrate 210 years of enabling many of the world’s advances in research and learning. While we are immensely proud of our legacy, we are just as energized by the opportunities ahead of us.”

FISCAL YEAR 2018 OUTLOOK

The Company reaffirms its fiscal 2018 guidance.

Metric ($M) FY17 Actual FY18 Expectation

(at constant currency)

Revenue $1,718.5 Approximately even
Adjusted Operating Income $228.4 Approximately even
Adjusted EPS $3.01 Low-single digit % decline

Cash from Operations

$314.5 $350 million or higher
Capex $148.3 Slightly lower

Adjusted Results: The Company provides financial measures referred to as “adjusted,” which exclude unusual charges and credits as more fully described in the attached financial schedules. For the three and six month periods ended October 31, 2017, the Company excluded foreign exchange gains and losses on intercompany transactions in deriving adjusted earnings in the current and prior year periods. This change will also be reflected in subsequent periods. The Company believes these gains and losses, which result from transactions associated with tax planning efforts, do not reflect its underlying performance.

Foreign Exchange: Foreign exchange was beneficial to second quarter revenue and EPS by $14.5 million and $0.08, respectively, and first half revenue and EPS by $17.3 million and $0.15. If current rates were to hold through year-end, Wiley would record positive FX variances in the fiscal year of approximately $45 million in revenue, $25 million in operating income, and $0.35 in EPS due to changes in exchange rates and functional currency gains related to calendar year 2017 journal subscriptions in the UK.

Note: variances in this release are on a constant currency basis unless otherwise noted.

RESEARCH SEGMENT

  • Revenue: $228.9 million (+11% GAAP; +5% constant currency). The increase was driven primarily by the contribution from the Atypon acquisition (+$6 million), strong Open Access growth (+25%), and higher Licensing, Reprints, Backfile and Other revenue (+11%).
  • Adjusted Contribution to Profit: $70.8 million (+4% constant currency). Improved performance reflected higher revenue offset primarily by Atypon expenses and higher royalty costs. GAAP Contribution to Profit of $71.2 million (+18%) also reflected impacts from foreign exchange and the timing of restructuring charges and credits.
  • Society Publishing Partnerships: Two new society contracts were signed in the quarter with combined annual revenue of $3.0 million and ten were renewed with combined annual revenue of $6.6 million. None were lost.
  • Wiley Digital Archives: In October, Wiley launched a new program to enable institutional customers to purchase digital access to unique or rare historical primary sources, digitized from partner societies, libraries, and archives around the world.

PUBLISHING SEGMENT

  • Revenue: $165.0 million (+1% GAAP; flat constant currency). Better than expected performance was driven by STM, Professional, and Educational Publishing (+2%) and growth in Test Preparation and Certification (+5%) and Licensing, Distribution, Advertising, and Other (+11%). Course Workflow (WileyPLUS) was down 18% in the quarter due to the timing of revenue recognition. Operationally, WileyPLUS sales (net of actual returns) rose 8% for the quarter and 4% for the six months. The timing differences for revenue recognition reflect longer sales amortization for subscription periods extending across two semesters.
  • Adjusted Contribution to Profit: $42.5 million (+14% constant currency). Improved performance was primarily due to savings from operational excellence initiatives. GAAP Contribution to Profit of $42.5 million (+16%) also reflected impacts from foreign exchange and the timing of restructuring charges and credits.
  • New Leadership: In October, Wiley announced Ella Balagula as the new Executive Vice President of Wiley’s Publishing segment. Prior to joining, Ms. Balagula was Senior Vice President and General Manager of Engineering Solutions at Elsevier, where she was responsible for commercial go-to-market, product management, software development and content acquisition and production in the engineering and academic segments.
  • Partnership: In November, Wiley and Kortext, a digital textbook and personal study platform, announced a partnership with the Egyptian Knowledge Bank (EKB) to provide digital textbooks to every Egyptian citizen and all universities, empowering their students to learn anytime, anywhere.

SOLUTIONS SEGMENT

  • Revenue: $57.9 million (+3% GAAP and +2% constant currency). Growth in Education Services/Online Program Management (+6%) more than offset a 4% decline in Corporate Learning (CrossKnowledge), where French government funding slowed for unemployment initiatives and blended learning programs, and a 2% decline in Professional Assessment, where our pre-hire assessment business has been shifting from enterprise direct sales to higher margin partner channels.
  • Adjusted Contribution to Profit: Increased 14% to $6.7 million. Improvement driven by higher revenue and increased operating efficiency. GAAP Contribution to Profit of $7.3 million (+36%) also reflected impacts from foreign exchange and the timing of restructuring charges and credits.
  • Education Services (OPM): Wiley signed four new programs and discontinued one this quarter. As of October 31, Wiley had 39 university partners and 254 programs under contract.

SIX MONTH RESULTS

Unaudited ($millions except for EPS)

GAAP Measures 1H 2018 1H 2017 Change

Change

Constant Currency

Revenue $863.2 $829.9 4% 2%
Operating Income $97.3 $91.6 6%
Diluted EPS $1.20 $0.34 +$0.86
Cash Flow Used For Operations ($46,357) ($86,094) 46%
Non-GAAP Measures 1H 2018 1H 2017 Change

Change

Constant Currency

Adjusted Operating Income $125.2 $106.3 5%
Adjusted EPS $1.62 $1.31 12%
Free Cash Flow less Product Development Spending (117,754) ($155,426) 24%

  • Revenue growth for the first six months driven primarily by Research Journals (+2%), Education Services/Online Program Management (+10%), and Test Preparation and Certification (+14%), as well as growth from the Atypon acquisition (+$14 million GAAP). Research and Solutions revenue growth more than offset a 4% decline in Publishing revenue.
  • Adjusted Operating Income growth for the first half was mainly due to the increase in revenue, which was partially offset by $6 million of one-time credits related to employee benefit plans in the prior year. GAAP Operating Income was up 6% to $97.3 million as higher restructuring charges were more than offset by the pension settlement charge in the prior year and the favourable impact of foreign exchange in the current year.
  • Adjusted EPS growth in the first six months was due to higher operating income and lower interest expense. GAAP EPS growth (+$0.86) also reflected restructuring charges in both periods and an income tax settlement in Germany (-$0.82) in the prior year.
  • Free Cash Flow less Product Development Spending improvement was mainly due to the timing of cash collections and payments as anticipated in the fourth quarter 2017 report. Free cash flow is seasonally negative in the first half of Wiley’s fiscal year principally due to the timing of collections for journal subscriptions.

EARNINGS CONFERENCE CALL

Scheduled for today, December 6 at 10:00 a.m. (ET). Access the webcast at www.wiley.com> Investor Relations> Events and Presentations, or http://www.wiley.com/WileyCDA/Section/id-370238.html. U.S. callers, please dial (800) 289-0438 and enter the participant code 3013070#. International callers, please dial (323) 994-2083 and enter the participant code 3013070#.

ABOUT WILEY

Wiley, a global research and learning company, helps people and organizations develop the skills and knowledge they need to succeed. Our online scientific, technical, medical, and scholarly journals, combined with our digital learning, assessment and certification solutions help universities, academic societies, businesses, governments and individuals increase the academic and professional impact of their work. For more than 200 years, we have delivered consistent performance to our stakeholders. The company's website can be accessed at www.wiley.com.

FORWARD-LOOKING STATEMENTS

This release contains certain forward-looking statements concerning the Company's operations, performance, and financial condition. Reliance should not be placed on forward-looking statements, as actual results may differ materially from those in any forward-looking statements. Any such forward-looking statements are based upon a number of assumptions and estimates that are inherently subject to uncertainties and contingencies, many of which are beyond the control of the Company, and are subject to change based on many important factors. Such factors include, but are not limited to (i) the level of investment in new technologies and products; (ii) subscriber renewal rates for the Company's journals; (iii) the financial stability and liquidity of journal subscription agents; (iv) the consolidation of book wholesalers and retail accounts; (v) the market position and financial stability of key online retailers; (vi) the seasonal nature of the Company's educational business and the impact of the used book market; (vii) worldwide economic and political conditions; (viii) the Company's ability to protect its copyrights and other intellectual property worldwide (ix) the ability of the Company to successfully integrate acquired operations and realize expected opportunities and (x) other factors detailed from time to time in the Company's filings with the Securities and Exchange Commission. The Company undertakes no obligation to update or revise any such forward-looking statements to reflect subsequent events or circumstances.

JOHN WILEY & SONS, INC.
UNAUDITED SUMMARY OF OPERATIONS
FOR THE SECOND QUARTER AND SIX MONTHS ENDED
OCTOBER 31, 2017 AND 2016
(in thousands, except per share amounts)

SECOND QUARTER ENDED OCTOBER 31,

2017 2016 % Change
US GAAP

Adjustments
(A)

Adjusted US GAAP

Adjustments
(A)

Adjusted US GAAP

Adjusted
excl. FX

Revenue $ 451,731 - 451,731 425,588 - 425,588 6 % 3 %
Costs and Expenses
Cost of Sales 119,865 - 119,865 111,574 - 111,574 7 % 4 %
Operating and Administrative 239,318 - 239,318 247,270 (8,842 ) 238,428 -3 % -1 %
Restructuring and Related (Credits) Charges (1,406 ) 1,406 - 6,847 (6,847 ) - NM 0 %
Amortization of Intangibles 11,183 - 11,183 12,253 - 12,253 -9 % -10 %
Total Costs and Expenses 368,960 1,406 370,366 377,944 (15,689 ) 362,255 -2 % 0 %
Operating Income 82,771 (1,406 ) 81,365 47,644 15,689 63,333 74 % 16 %
Operating Margin 18.3 % 18.0 % 11.2 % 14.9 %
Interest Expense (3,455 ) - (3,455 ) (4,360 ) - (4,360 ) -21 % -21 %
Foreign Exchange (Losses) Gains (416 ) 287 (129 ) (360 ) 1,899 1,539 16 % NM
Interest Income and Other 576 - 576 478 - 478 21 % 21 %
Income Before Taxes 79,476 (1,119 ) 78,357 43,402 17,588 60,990 83 % 19 %
Provision (Benefit) for Income Taxes 19,428 (391 ) 19,037 54,853 (38,957 ) 15,896 -65 % 12 %
Net Income $ 60,048 (728 ) 59,320 (11,451 ) 56,545 45,094 NM 21 %
Earnings Per Share- Diluted $ 1.04 (0.01 ) 1.03 (0.20 ) 0.98 0.78 NM 22 %
Average Shares - Diluted 57,554 57,554 57,554 57,538 57,538 57,538

SIX MONTHS ENDED OCTOBER 31,

2017 2016 % Change
US GAAP

Adjustments
(A)

Adjusted US GAAP

Adjustments
(A)

Adjusted US GAAP

Adjusted
excl. FX

Revenue $ 863,175 - 863,175 829,873 - 829,873 4 % 2 %
Costs and Expenses
Cost of Sales 234,653 - 234,653 225,052 - 225,052 4 % 3 %
Operating and Administrative 483,126 (3,600 ) 479,526 482,497 (8,842 ) 473,655 0 % 1 %
Restructuring and Related Charges (Credits) 24,323 (24,323 ) - 5,927 (5,927 ) - NM 0 %
Amortization of Intangibles 23,802 - 23,802 24,826 - 24,826 -4 % -4 %
Total Costs and Expenses 765,904 (27,923 ) 737,981 738,302 (14,769 ) 723,533 4 % 2 %
Operating Income 97,271 27,923 125,194 91,571 14,769 106,340 6 % 5 %
Operating Margin 11.3 % 14.5 % 11.0 % 12.8 %
Interest Expense (6,728 ) - (6,728 ) (8,431 ) - (8,431 ) -20 % -20 %
Foreign Exchange (Losses) Gains (5,552 ) 6,304 752 (139 ) 3,228 3,089 NM NM
Interest Income and Other 581 - 581 728 - 728 -20 % -20 %
Income Before Taxes 85,572 34,227 119,799 83,729 17,997 101,726 2 % 6 %
Provision (Benefit) for Income Taxes 16,288 10,236 26,524 64,180 (39,021 ) 25,159 -75 % -5 %
Net Income $ 69,284 23,991 93,275 19,549 57,018 76,567 NM 10 %
Earnings Per Share- Diluted $ 1.20 0.42 1.62 0.34 0.98 1.31 NM 12 %
Average Shares - Diluted 57,633 57,633 57,633 58,259 58,259 58,259
(A) See the accompanying Notes to Unaudited Financial Statements for a description of each Adjustment.
NM- Not Meaningful
JOHN WILEY & SONS, INC.
FOR THE SECOND QUARTER AND SIX MONTHS ENDED
OCTOBER 31, 2017 AND 2016

RECONCILIATION OF US GAAP TO ADJUSTED EPS - DILUTED (UNAUDITED)

Second Quarter Ended Six Months Ended
October 31, October 31,
2017 2016 2017 2016
US GAAP Earnings Per Share - Diluted $ 1.04 $ (0.20 ) $ 1.20 $ 0.34
Adjusted to exclude the following:
Restructuring and Related (Credits) Charges (A) (0.02 ) 0.08 0.33 0.07
Foreign Exchange Losses on Intercompany Transactions (B) 0.01 0.01 0.09 0.04
One-time - Pension Settlement (C) - 0.10 - 0.09
Unfavorable Tax Settlement (D) - 0.83 - 0.82
Deferred Income Tax Benefit on UK Rate Change (E) - (0.04 ) - (0.04 )
Adjusted Earnings Per Share - Diluted (F) $ 1.03 $ 0.78 $ 1.62 $ 1.31

NOTES TO UNAUDITED FINANCIAL STATEMENTS

Adjustments:
(A) Adjusted results exclude restructuring (credits) charges and related items associated with the Company's Restructuring and Reinvestment Program. For the three months ended October 31, 2017 and 2016, there were credits of $1.4 million or $(0.02) per share and charges of $6.8 million or $0.08 per share, respectively. For the six months ended October 31, 2017 and 2016, there were charges of $27.9 million or $0.33 per share, and charges of $5.9 million or $0.07 per share, respectively.
(B) In 2017, we adjusted results to exclude foreign exchange losses associated with intercompany transactions. The prior year adjusted earnings per share amounts have been recasted to conform to current year presentation. For the three months ended October 31, 2017 and 2016, there were gains of $0.3 million or $0.01 per share and gains of $1.9 million or $0.01 per share, respectively. For the six months ended October 31, 2017 and 2016, there were gains of $6.3 million or $0.09 per share, and gains of $3.2 million or $0.04 per share, respectively.
(C) As previously disclosed and as reported in the Company's SEC filings, the Company announced a voluntary, limited-time opportunity for terminated vested employees who were participants in the U.S. defined benefit retirement plan to elect a single lump sum payment of accumulated benefits. The election period closed on August 29, 2016. The total charge including a prorata portion of the unamortized net actuarial loss was $8.8 million or $0.10 per share for the quarter and, $0.09 per share for the six month period. The aggregate amount of payments under this one time election was $28.3 million, which was paid from Pension Plan assets in October 2016.
(D) As previously disclosed and as reported in the Company's SEC filings, the Company was appealing an unfavorable tax ruling in Germany related to tax benefits obtained through an increase in the tax deductible basis of certain merged German subsidiaries. In September 2016, the German Federal Fiscal Court issued an unfavorable final judgement in Wiley's longstanding tax appeal. As a result in 2016, the Company recorded a $47.5 million charge, $0.83 per share in the quarter, $0.82 per share for the six month period.
(E) As previously disclosed and as reported in the Company's SEC filings, the adjusted results for the three and six months ended October 31, 2016 exclude deferred tax benefits of $2.6 million, or $0.04 per share, associated with tax legislation enacted in the second quarter of fiscal year 2017 in the United Kingdom that reduced the U.K. corporate income tax rates by 1 percentage point in 2020. The benefits reflect the remeasurement of the Company's deferred tax balances from 18% to the new income tax rate of 17% effective April 1, 2020 and had no current cash tax impact.
(F) The Reconciliation of US GAAP to Adjusted EPS - Diluted table may not foot due to rounding.

Non-GAAP Financial Measures:

In addition to providing financial results in accordance with GAAP, the Company has provided adjusted financial results that exclude the impact of other unusual or special items described in more detail throughout this press release. These non-GAAP financial measures are labeled as "Adjusted" and are used for evaluating the results of operations for internal purposes. These non-GAAP measures are not intended to replace the presentation of financial results in accordance with GAAP. Rather, the Company believes the exclusion of such items provides additional information to investors to facilitate the comparison of past and present operations. Unless otherwise noted, adjusted amounts in the attached schedules include the impact of foreign exchange.
JOHN WILEY & SONS, INC.
UNAUDITED SEGMENT RESULTS
FOR THE SECOND QUARTER AND SIX MONTHS ENDED
OCTOBER 31, 2017 AND 2016
(in thousands)

SECOND QUARTER ENDED OCTOBER 31,

2017 2016 % Change
US GAAP

Adjustments
(A)

Adjusted US GAAP

Adjustments
(A)

Adjusted US GAAP

Adjusted
excl. FX

Research

Revenue
Journal Subscriptions $ 170,163 - 170,163 159,726 - 159,726 7 % 0 %
Open Access 9,350 - 9,350 7,423 - 7,423 26 % 25 %
Licensing, Reprints, Backfiles and Other 41,329 - 41,329 36,367 - 36,367 14 % 11 %
Total Journal Revenue 220,842 - 220,842 203,516 - 203,516 9 % 3 %
Publishing Technology Services (Atypon) 8,028 - 8,028 2,478 - 2,478 NM NM
Total Revenue 228,870 - 228,870 205,994 - 205,994 11 % 5 %
Contribution to Profit (A) 71,163 (388 ) 70,775 60,292 229 60,521 18 % 4 %

Publishing

Revenue
STM and Professional Publishing $ 71,460 - 71,460 68,130 - 68,130 5 % 4 %
Education Publishing 57,711 - 57,711 57,472 - 57,472 0 % -1 %
Course Workflow (WileyPLUS) 16,310 - 16,310 19,840 - 19,840 -18 % -18 %
Test Preparation and Certification 7,919 - 7,919 7,521 - 7,521 5 % 5 %
Licensing, Distribution, Advertising and Other 11,585 - 11,585 10,337 - 10,337 12 % 11 %
Total Revenue 164,985 - 164,985 163,300 - 163,300 1 % 0 %
Contribution to Profit (A) 42,476 71 42,547 36,490 215 36,705 16 % 14 %

Solutions

Revenue
Education Services (OPM) $ 29,737 - 29,737 28,007 - 28,007 6 % 6 %
Professional Assessment 15,821 - 15,821 16,146 - 16,146 -2 % -2 %
Corporate Learning 12,318 - 12,318 12,141 - 12,141 1 % -4 %
Total Revenue 57,876 - 57,876 56,294 - 56,294 3 % 2 %
Contribution to Profit (A) 7,309 (625 ) 6,684 5,359 524 5,883 36 % 14 %
Corporate Expenses (A) (38,177 ) (464 ) (38,641 ) (54,497 ) 14,721 (39,776 ) -30 % -4 %
Operating Income $ 82,771 (1,406 ) 81,365 47,644 15,689 63,333 74 % 16 %
(A) See the accompanying Notes to Unaudited Financial Statements for a description of each Adjustment.
NM- Not Meaningful

SIX MONTHS ENDED OCTOBER 31 ,

2017 2016 % Change
US GAAP

Adjustments
(A)

Adjusted US GAAP

Adjustments
(A)

Adjusted US GAAP

Adjusted
excl. FX

Research

Revenue
Journal Subscriptions $ 338,488 - 338,488 322,410 - 322,410 5 % 0 %
Open Access 18,153 - 18,153 14,936 - 14,936 22 % 22 %
Licensing, Reprints, Backfiles and Other 79,559 - 79,559 73,394 - 73,394 8 % 9 %
Total Journal Revenue 436,200 - 436,200 410,740 - 410,740 6 % 2 %
Publishing Technology Services (Atypon) 16,297 - 16,297 2,478 - 2,478 NM NM
Total Revenue 452,497 - 452,497 413,218 - 413,218 10 % 6 %
Contribution to Profit (A) 132,624 4,448 137,072 120,727 160 120,887 10 % 2 %

Publishing

Revenue
STM and Professional Publishing $ 135,060 - 135,060 138,835 - 138,835 -3 % -3 %
Education Publishing 103,447 - 103,447 112,326 - 112,326 -8 % -8 %
Course Workflow (WileyPLUS) 17,520 - 17,520 20,706 - 20,706 -15 % -16 %
Test Preparation and Certification 19,409 - 19,409 17,077 - 17,077 14 % 14 %
Licensing, Distribution, Advertising and Other 20,827 - 20,827 19,317 - 19,317 8 % 8 %
Total Revenue 296,263 - 296,263 308,261 - 308,261 -4 % -4 %
Contribution to Profit (A) 47,485 10,925 58,410 55,832 569 56,401 -15 % 3 %

Solutions

Revenue
Education Services (OPM) $ 56,074 - 56,074 51,179 - 51,179 10 % 10 %
Professional Assessment 30,708 - 30,708 29,668 - 29,668 4 % 4 %
Corporate Learning 27,633 27,633 27,547 - 27,547 0 % -2 %
Total Revenue 114,415 - 114,415 108,394 - 108,394 6 % 5 %
Contribution to Profit (A) 5,341 2,170 7,511 5,506 524 6,030 -3 % 24 %
Corporate Expenses (A) (88,179 ) 10,380 (77,799 ) (90,494 ) 13,516 (76,978 ) -3 % 1 %
Operating Income $ 97,271 27,923 125,194 91,571 14,769 106,340 6 % 5 %
(A) See the accompanying Notes to Unaudited Financial Statements for a description of each Adjustment.
NM- Not Meaningful
JOHN WILEY & SONS, INC.
UNAUDITED CONDENSED STATEMENTS OF FINANCIAL POSITION
(in thousands)
October 31, April 30,
2017 2016 2017
Current Assets
Cash and cash equivalents $ 72,871 $ 267,410 $ 58,516
Accounts receivable 193,506 212,590 188,679
Inventories 43,540 51,779 47,852
Prepaid and other 54,092 147,753 64,688
Total Current Assets 364,009 679,532 359,735
Product Development Assets 68,124 38,574 70,955
Royalty Advances 12,500 10,353 28,320
Technology, Property and Equipment 274,624 248,281 252,488
Intangible Assets 828,524 822,962 828,099
Goodwill 999,546 974,068 982,101
Other Assets 85,503 79,684 84,519
Total Assets $ 2,632,830 $ 2,853,454 $ 2,606,217
Current Liabilities
Accounts and royalties payable $ 150,888 $ 158,985 $ 139,206
Deferred revenue 244,328 223,307 436,235
Accrued employment costs 79,827 69,072 98,185
Accrued income taxes 17,711 8,515 22,222
Accrued pension liability 5,826 5,459 5,776
Other accrued liabilities 83,615 77,484 86,232
Total Current Liabilities 582,195 542,822 787,856
Long-Term Debt 562,962 883,992 365,000
Accrued Pension Liability 208,382 181,735 214,597
Deferred Income Tax Liabilities 156,397 191,729 160,491
Other Long-Term Liabilities 75,844 71,675 75,136
Shareholders' Equity 1,047,050 981,501 1,003,137
Total Liabilities & Shareholders' Equity $ 2,632,830 $ 2,853,454 $ 2,606,217
JOHN WILEY & SONS, INC.
UNAUDITED CONDENSED STATEMENTS OF FREE CASH FLOW
(in thousands)
Six Months Ended
October 31,
2017 2016
Operating Activities:
Net income $ 69,284 19,549
Amortization of intangibles 23,802 24,826
Amortization of product development spending 20,246 18,701
Depreciation of technology, property and equipment 34,775 34,092
Non-cash charges and credits 56,225 113,852
Net change in operating assets and liabilities (250,689 ) (297,114 )
Cash Used for Operating Activities (46,357 ) (86,094 )
Investments in organic growth:
Additions to technology, property and equipment (56,252 ) (52,728 )
Product development spending (15,145 ) (16,604 )
Free Cash Flow less Product Development Spending (117,754 ) (155,426 )
Other Investing and Financing Activities:
Acquisitions, net of cash (6,097 ) (135,753 )
Net debt borrowings 196,589 278,985
Change in book overdrafts (2,629 ) (5,861 )
Cash dividends (36,699 ) (35,883 )
Purchase of treasury shares (29,257 ) (21,289 )
Proceeds from exercise of stock options and other 7,347 15,890
Cash Provided by Investing and Financing Activities 129,254 96,089
Effects of Exchange Rate Changes on Cash 2,855 (37,059 )
Increase (Decrease) in Cash and Cash Equivalents for Period $ 14,355 (96,396 )
RECONCILIATION TO GAAP PRESENTATION
Investing Activities:
Product development spending $ (15,145 ) (16,604 )
Additions to technology, property and equipment (56,252 ) (52,728 )
Acquisitions, net of cash (6,097 ) (135,753 )
Cash Used for Investing Activities $ (77,494 ) (205,085 )
Financing Activities:
Cash Provided by Investing and Financing Activities $ 129,254 96,089
Excluding:
Acquisitions, net of cash (6,097 ) (135,753 )
Cash Provided by Financing Activities $ 135,351 231,842

Free Cash Flow less Product Development Spending:

The Company provides financial measures referred to as “Free Cash Flow less Product Development Spending.” Free Cash Flow less Product Development Spending is defined as “cash flow from operating activities, less book composition and other product development and capital spending.” Management believes this metric provides additional information to investors to facilitate the comparison of past and present results. This metric is also used internally by management in evaluating results. This non-GAAP measure is not intended to replace the financial results reported in accordance with US Generally Accepted Accounting Principles.

View source version on businesswire.com: http://www.businesswire.com/news/home/20171206005383/en/

John Wiley and Sons Inc.
Brian Campbell, 201-748-6874
Investor Relations
brian.campbell@wiley.com

Source: John Wiley and Sons Inc.