SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: April 30, ~~2016~~2019

~~[ ]~~☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934 ~~(FEE REQUIRED)~~

For the transition period from _________ to _________

Commission file number 001-11507

(Exact name of Registrant as specified in its charter)

NEW YORK		13-5593032
State or other jurisdiction of incorporation or organization		I.R.S. Employer Identification No.


111 River Street, Hoboken, NJ		07030
Address of principal executive offices		Zip Code

		(201) 748-6000

	~~(201) 748-6000~~
	Registrant’s telephone number including area code



Securities registered pursuant to Section 12(b) of the Act: Title of each class	Name of each exchange on which registered	Trading Symbol
Class A Common Stock, par value $1.00 per share	New York Stock Exchange	JW.A
Class B Common Stock, par value $1.00 per share	New York Stock Exchange
	JW.B

	Securities registered pursuant to Section 12(g) of the Act:
	None

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive proxy statement for use in connection with its annual meeting of stockholders scheduled to be held on September ~~22, 2016,~~26, 2019, are incorporated by reference into Part III of this Form 10-K.

JOHN WILEY ~~AND~~& SONS, INC. AND SUBSIDIARIES

FORM 10-K

FOR THE FISCAL YEAR ENDED APRIL 30, ~~2016~~2019

INDEX

PART I		PAGE
ITEM 1.	Business	4
ITEM 1A.	Risk Factors	~~4-11~~10
ITEM 1B.	Unresolved Staff Comments	1117
ITEM 2.	Properties	1218
ITEM 3.	Legal Proceedings	1318
ITEM 4	Mine Safety Disclosures ~~– Not Applicable~~	18
	Information About Our Executive Officers	19

PART II
ITEM 5.	Market for ~~the Company’s~~Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	1320
ITEM 6.	Selected Financial Data	1420
ITEM 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	~~15-55~~22
ITEM 7A.	Quantitative and Qualitative Disclosures About Market Risk	~~55-58~~42
ITEM 8.	Financial Statements and Supplementary Data	~~59-98~~44
ITEM 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	9992
ITEM 9A.	Controls and Procedures	9992
ITEM 9B.	Other Information	9992

PART III
ITEM 10.	Directors, Executive Officers and Corporate Governance	~~99-102~~93
ITEM 11.	Executive Compensation	~~102~~93
ITEM 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	~~102-103~~93
ITEM 13.	Certain Relationships and Related Transactions, and Director Independence	~~103~~94
ITEM 14.	Principal Accounting Fees and Services	~~103~~94

PART IV
ITEM 15.	Exhibits, Financial Statement Schedules ~~and Reports on~~	95
ITEM 16.	Form ~~8-K~~10-K Summary	~~104-106~~ 96

SIGNATURES

Cautionary Notice Regarding Forward-Looking Statements “Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995:

This report contains “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 concerning our business, consolidated financial condition and results of operations. The Securities and Exchange Commission (“SEC”) encourages companies to disclose forward-looking information so that investors can better understand a company’s prospects and make informed investment decisions. Forward-looking statements are subject to risks and uncertainties, many of which are outside our control, which could cause actual results to differ materially from these statements. Therefore, you should not rely on any of these forward-looking statements. Forward-looking statements can be identified by such words as “anticipates,” “believes,” “plan,” “assumes,” “could,” “should,” “estimates,” “expects,” “intends,” “potential,” “seek,” “predict,” “may,” “will” and similar references to future periods. All statements other than statements of historical facts included in this report regarding our strategies, prospects, financial condition, operations, costs, plans and objectives are forward-looking statements. Examples of forward-looking statements include, among others, statements we make regarding our fiscal year 2020 outlook, anticipated restructuring charges and savings, 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 many assumptions and estimates that are inherently subject to uncertainties and contingencies, many of which are beyond our control, 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 our 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 retailers; (vi) the seasonal nature of our educational business and the impact of the used book market; (vii) worldwide economic and political conditions; (viii) our ability to protect our copyrights and other intellectual property worldwide; (ix) our ability to successfully integrate acquired operations and realize expected opportunities; (x) achievement of targeted run rate savings through restructuring activities; and (xi) other factors detailed from time to time in our filings with the SEC. We undertake no obligation to update or revise any such forward-looking statements to reflect subsequent events or circumstances.

Please refer to Part I, Item 1A, “Risk Factors,” of our Annual Report on Form 10-K for important factors that we believe could cause actual results to differ materially from those in our forward-looking statements. Any forward-looking statement made by us in this report is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

Non-GAAP Financial Measures:

We present financial information that conforms to Generally Accepted Accounting Principles in the United States of America (“U.S. GAAP”). We also present financial information that does not conform to U.S. GAAP, which we refer to as non-GAAP.

In this report, we may present the following non-GAAP performance measures:

• Adjusted Earnings Per Share “(Adjusted EPS)”;

• Free Cash Flow less Product Development Spending;

• Adjusted Revenue;

• Adjusted Operating Income and margin;

• Adjusted Contribution to Profit and margin;

• EBITDA and Adjusted EBITDA; and

• Results on a constant currency basis.

Management uses these non-GAAP performance measures as supplemental indicators of our operating performance and financial position as well for internal reporting and forecasting purposes, when publicly providing its outlook, to evaluate our performance and calculate incentive compensation. We present these non-GAAP performance measures in addition to U.S. GAAP financial results because we believe that these non-GAAP performance measures provide useful information to certain investors and financial analysts for operational trends and comparisons over time. The use of these non-GAAP performance measures may also provide a consistent basis to evaluate operating profitability and performance trends by excluding items that we do not consider to be controllable activities for this purpose.

For example:

•

Adjusted EPS, Adjusted Revenue, Adjusted Operating Profit, Adjusted Contribution to Profit, and Adjusted EBITDA provide a more comparable basis to analyze our operating results and earnings over time and are measures commonly used by shareholders to measure our performance.

Index

•

Free Cash Flow less Product Development Spending helps assess our ability, over the long term, to create value for our shareholders as it represents cash available to repay debt, pay common stock dividends and fund share repurchases and acquisitions.

•

Results on a constant currency basis removes distortion from the effects of foreign currency movements to provide better comparability of our business trends from period to period. We measure our performance before the impact of foreign currency (or at “constant currency”), which means that we apply the same foreign currency exchange rates for the current and equivalent prior period.

In addition, we have historically provided these or similar non-GAAP performance measures and understand that some investors and financial analysts find this information helpful in analyzing our operating margins, and net income and comparing our financial performance to that of our peer companies and competitors. Based on interactions with investors, we also believe that our non-GAAP performance measures are regarded as useful to our investors as supplemental to our U.S. GAAP financial results, and that there is no confusion regarding the adjustments or our operating performance to our investors due to the comprehensive nature of our disclosures. We have not provided our 2020 outlook for the most directly comparable U.S. GAAP financial measures, as they are not available without unreasonable effort due to the high variability, complexity, and low visibility with respect to certain items, including restructuring charges and credits, gains and losses on foreign currency, and other gains and losses. These items are uncertain, depend on various factors, and could be material to our consolidated results computed in accordance with U.S. GAAP.

Non-GAAP performance measures do not have standardized meanings prescribed by U.S. GAAP and therefore may not be comparable to the calculation of similar measures used by other companies and should not be viewed as alternatives to measures of financial results under U.S. GAAP. The adjusted metrics have limitations as analytical tools and should not be considered in isolation from or as a substitute for U.S. GAAP information. It does not purport to represent any similarly titled U.S. GAAP information and is not an indicator of our performance under U.S. GAAP. Non-U.S. GAAP financial metrics that we present may not be comparable with similarly titled measures used by others. Investors are cautioned against placing undue reliance on these non-U.S. GAAP measures.

PART I

~~Item 1.~~

~~Business~~

Item 1. Business

The Company, founded in 1807, was incorporated in the state of New York on January 15, 1904. ~~As used herein~~Throughout this report, when we refer to “Wiley,” the ~~term “Company” means~~“Company,” “we,” “our,” or “us,” we are referring to John Wiley & Sons, Inc., and all of our subsidiaries, except where the context indicates otherwise.

Please refer to Part II, Item 8, “Financial Statements and Supplementary Data,” for financial information about the Company and its subsidiaries, ~~and affiliated companies,~~which is incorporated herein by reference. Also, when we cross reference to a “Note,” we are referring to our “Notes to Consolidated Financial Statements,” unless the context indicates otherwise.

~~The Company is~~We are a global ~~provider of knowledge~~research and ~~knowledge-enabled services that improve outcomes in areas of research, professional practice and education.~~learning company. Through the Research segment, ~~the Company provides digital and print~~we provide scientific, technical, medical, and scholarly journals, ~~reference works, books, database~~as well as related content and services, to academic, corporate, and ~~advertising.~~government libraries, learned societies, and individual researchers and other professionals. The ~~Professional Development~~Publishing segment provides ~~digital~~scientific, professional, and ~~print~~education books ~~corporate learning solutions, employment assessment~~ and ~~training services, and test prep and certification. In Education, the Company provides~~related content in print and digital ~~content,~~formats, as well as test preparation services and ~~education solutions including~~course workflow tools, to libraries, corporations, students, professionals, and researchers. The Solutions segment provides online program management services for higher education institutions and ~~course management tools~~learning, development, and assessment services for ~~instructors~~businesses and students. The Company takes full advantage of its content from all three businesses in developing and cross-marketing products to its diverse customer base of researchers, professionals, students, and educators. The use of technology enables the Company to make its content efficiently more accessible to its customers around the world. The Company’sprofessionals. Our operations are primarily located in the United States ~~Canada, Europe, Asia,~~(“U.S.”), United Kingdom (“U.K.”), Germany, Russia, Singapore, and ~~Australia.~~France.

~~Further description~~Business growth strategies include driving pricing and volume growth from existing journal and book brands and titles, as well as learning services related to education and professional development, the development of new journal titles or through publishing partnerships, technology and content acquisitions which complement our existing businesses, designing and implementing new methods of delivering products to our customers, and the development of new products and services.

Business Segments

We report our segment information in accordance with the provisions of Financial Accounting Standards Board Accounting Standards Codification Topic 280, “Segment Reporting” (“FASB ASC Topic 280”). Our segment reporting structure consists of three reportable segments, which are listed below, and a Corporate category:

• Research;

• Publishing; and

• Solutions

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Research:

Research’s mission is to support researchers, professionals and learners in the discovery and use of research knowledge to help them achieve their goals in research, learning and practice. Research provides scientific, technical, medical, and scholarly journals, as well as related content and services, to academic, corporate, and government libraries, learned societies, and individual researchers and other professionals. Journal publishing areas include the physical sciences and engineering, health sciences, social sciences and humanities and life sciences. Research also includes Atypon Systems, Inc. (“Atypon”), a publishing software and service provider that enables scholarly and professional societies and publishers to deliver, host, enhance, market, and manage their content on the web through the Literatum platform.

Research’s customers include academic, corporate, government, and public libraries, funders of research, researchers, scientists, clinicians, engineers and technologists, scholarly and professional societies, and students and professors. Research’s products are sold and distributed globally in digital and print formats through multiple channels, including research libraries and library consortia, independent subscription agents, direct sales to professional society members, and other customers. Publishing centers include Australia, China, Germany, India, the United Kingdom, and the United States. Research’s revenue accounted for approximately 52% of our consolidated revenue in the year ended April 30, 2019.

Research’s major products are: Journal Subscriptions, Licensing, Reprints, Backfiles, and Other, Open Access and Publishing Technology Services (Atypon). The graphs below present Research revenue by product type for the years ended April 30, 2019 and 2018:

Key growth strategies for the Research business include evolving and developing new licensing models for our institutional customers, developing new open access products and revenue streams, focusing resources on high-growth and emerging markets, and developing new digital products, services, and workflow solutions to meet the needs of researchers, authors, societies, and corporate customers.

Journal Subscriptions

We publish approximately 1,700 academic research journals. We sell journal subscriptions directly through our sales representatives, indirectly through independent subscription agents, through promotional campaigns, and through memberships in professional societies for those journals that are sponsored by societies. Journal subscriptions, making up approximately 37% of our consolidated 2019 total company revenue, are primarily licensed through contracts for digital content available online through Wiley Online Library, which we migrated to our Literatum platform in March 2018, acquired as part of our purchase of Atypon. Contracts are negotiated by us directly with customers or their subscription agents. Subscription periods typically cover calendar years. Print journals are generally mailed to subscribers directly from independent printers. We do not own or manage printing facilities. Subscription revenue is generally collected in advance.

Approximately 50% of Journal Subscription revenue is derived from publishing rights owned by us. Publishing alliances also play a major role in Research’s success. Approximately 50% of Journal Subscription revenue is derived from publication rights that are owned by professional societies and published by us pursuant to a long-term contract (generally 5–10 years) or owned jointly with a professional society. These society alliances bring mutual benefit, with the societies gaining Wiley’s publishing, marketing, sales, and distribution expertise, while Wiley benefits from being affiliated with prestigious societies and their members. Societies that sponsor or own such journals generally receive a royalty and/or other financial consideration. We may procure editorial services from such societies on a pre-negotiated fee basis. We also enter into agreements with outside independent editors of journals that define the duties of the ~~Company’s~~editors and the fees and expenses for their services. Contributors of articles to our journal portfolio transfer publication rights to us or a professional society, as applicable. We publish the journals of many prestigious societies, including the American Cancer Society, the American Heart Association, the British Journal of Surgery Society, the European Molecular Biology Organization, the American Anthropological Association, the American Geophysical Union, and the German Chemical Society.

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Literatum, our online publishing platform for our Research segment, delivers integrated access to over 7 million articles from 1,700 journals, as well as 19,000 online books and hundreds of multi-volume reference works, laboratory protocols and databases. Wiley Online Library, which is delivered through our Literatum platform, provides the user with intuitive navigation, enhanced discoverability, expanded functionality, and a range of personalization options. Access to abstracts is free and full content is accessible through licensing agreements or as individual article purchases. Large portions of the content are provided free or at nominal cost to nations in the developing world through partnerships with certain non-profit organizations. Our online publishing platforms provide revenue growth opportunities through new applications and business models, online advertising, deeper market penetration, and individual sales and pay-per-view options. The Literatum platform hosts over 40% of the world’s English language journals.

In 2018, Wiley saw an increase in impact factors across more than half of its indexed titles. An Impact Factor is an industry measure of the importance of a journal within its field and is determined based on the number of citations received by the journal, from other journals. According to the 2017 Journal Citation Reports (“JCR”), re-released in October 2018 by Clarivate Analytics, 58% of Wiley journals increased their impact factor between 2016 and 2017. Wiley had 1,221 journals indexed (72% of the Wiley portfolio), with 13 Wiley titles receiving their first impact factor in this year’s JCR release. In addition, 25 Wiley journals achieved a top-category rank, including CA:A Cancer Journal for Clinicians (Impact Factor of 244.585, ranked #1 in Oncology), World Psychiatry (Impact Factor of 30.000, ranked #1 in Psychiatry – the first Social Sciences title to reach an Impact Factor of 30) and Journal of Cachexia, Sarcopenia and Muscle (Impact Factor of 12.511, ranked #1 in Geriatrics & Gerontology). The Clarivate Analytics index is a barometer of journal influence across the research community.

Licensing, Reprints, Backfiles, and Other

Licensing, Reprints, Backfiles, and Other includes advertising, backfile sales, the licensing of publishing rights, journal and article reprints, and individual article sales. We generate advertising revenue from print and online journal subscription products, our online publishing platform, Literatum, online events such as webinars and virtual conferences, community interest Web sites such as spectroscopyNOW.com, and other Web sites. A backfile license provides access to a historical collection of Wiley journals, generally for a one-time fee. We also engage with international publishers and receive licensing revenue from photocopies, reproductions, translations, and other digital uses of our content. Journal and article reprints are primarily used by pharmaceutical companies and other industries for marketing and promotional purposes. Through the Article Select and PayPerView programs, we provide fee-based access to non-subscribed journal articles, content, book chapters, and major reference work articles. The Research business is ~~incorporated herein~~also a provider of content and services in evidence-based medicine (“EBM”). Through our alliance with The Cochrane Collaboration, we publish The Cochrane Library, a premier source of high-quality independent evidence to inform healthcare decision-making. EBM facilitates the effective management of patients through clinical expertise informed by ~~reference~~best practice evidence that is derived from medical literature.

Open Access

Under the Author-Funded Access business model, accepted research articles are published subject to payment of Article Publication Charges ("APCs"). All Author-Funded articles are immediately free to access online. Contributors of Author-Funded Access articles retain many rights and typically license their work under terms that permit re-use.

Author-Funded Access offers authors choices in how to share and disseminate their work, and it serves the needs of researchers who may be required by their research funder to make articles freely accessible without embargo. APCs are typically paid by the individual author or by the author’s funder, and payments are often mediated by the author’s institution. We provide specific workflows and infrastructure to authors, funders, and institutions to support the requirements of the Author-Funded Access model.

We offer two Open Access publishing models. The first of these is Hybrid Open Access where, upon payment of an APC, authors publishing in the ~~Management’s Discussion~~majority of our paid subscription journals are offered, after article acceptance, the opportunity to make their individual research article openly available through the OnlineOpen service.

The second offering of the Open Access model is a growing portfolio of fully open access journals, also known as Gold Open Access Journals, in which all accepted articles are published subject to receipt of an APC. All Open Access articles are subject to the same rigorous peer-review process applied to our subscription-based journals. As with our subscription portfolio, a number of the Gold Open Access Journals are published under contract for, or in partnership with, prestigious societies, including the American Geophysical Union, the American Heart Association, the European Molecular Biology Organization and ~~Analysis section~~the British Ecological Society. The Open Access portfolio spans life, physical, medical and social sciences and includes a choice of high impact journals and broad-scope titles that offer a responsive, author-centered service.

In January 2019, Wiley announced a new contractual arrangement in support of Open Access, a countrywide partnership agreement with Projekt DEAL, a representative of nearly 700 academic institutions in Germany. This transformative three-year agreement provides all Projekt DEAL institutions with access to read Wiley’s academic journals back to the year 1997, and researchers at Projekt DEAL institutions can publish articles open access in Wiley’s journals. The partnership will better support institutions and researchers in advancing open science, driving discovery, and developing and disseminating knowledge. We are compensated primarily through a fee per article published.

Index

Publishing Technology Services (Atypon)

Publishing:

Our Publishing segment acquires, develops, and publishes scientific, professional and education books and related content, as well as test preparation services and course workflow tools, to libraries, corporations, students, professionals, and researchers. Communities served include business, finance, accounting, workplace learning, management, leadership, technology, behavioral health, engineering/ architecture, science and medicine, and education. Products are developed in print and digitally for worldwide distribution through multiple channels, including chain and online booksellers, libraries, colleges and universities, corporations, direct to consumer, Web sites, distributor networks and other online applications. Publishing centers include Australia, Germany, India, the United Kingdom, and the United States. Publishing accounted for approximately 32% of our consolidated revenue in the year ended April 30, 2019.

Publishing revenue by product type are: STM (Scientific, Technical and Medical) and Professional Publishing, Education Publishing, Test Preparation and Certification, Courseware (WileyPLUS), and Licensing, Distribution, Advertising and Other. The graphs below present Publishing revenue by product type for the years ended April 30, 2019 and 2018:

Key growth strategies for the Publishing business include developing and acquiring products and services to drive corporate development and professional career development, developing leading brands and franchises, executing strategic acquisitions and partnerships, and innovating digital book formats while expanding their global discoverability and distribution. We continue to implement strategies to manage declines in print revenue through cost improvement initiatives and focusing our efforts on growing its digital lines of business. We are continuing to perform portfolio reviews and workforce realignment, restructuring, and operational excellence initiatives. In certain areas, we will explore new formats or promote digital-only, and in other areas, we may rationalize our portfolio. Our approach is to continue to realign our cost structure to help mitigate the market changes that are contributing to revenue decline, and to sharpen our focus on high performing areas and digital opportunities, while improving operating efficiency.

Publishing

Book products accounted for approximately 24% of our consolidated fiscal year 2019 revenue. Categories include STM, Professional, and Education Publishing.

STM books are sold and distributed globally in digital and print formats through multiple channels, including research libraries and library consortia, independent subscription agents, direct sales to professional society members, bookstores, online booksellers, and other customers.

Professional books, which include business and finance, technology, and other professional categories, as well as the For Dummies brand, are sold to bookstores and online booksellers serving the general public, wholesalers who supply such bookstores, warehouse clubs, college bookstores, individual practitioners, industrial organizations and government agencies. We employ sales representatives who call upon independent bookstores, national and regional chain bookstores, and wholesalers. Sales of professional books also result from direct mail campaigns, telemarketing, online access, advertising, and reviews in periodicals.

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Education textbooks and related supplementary material and digital products are sold primarily to bookstores and online booksellers serving both for-profit and nonprofit educational institutions (primarily colleges and universities), and direct-to-students. We employ sales representatives who call on faculty responsible for selecting books to be used in courses, and on the bookstores that serve such institutions and their students. The textbook business is seasonal, with the majority of textbook sales occurring during the July-through- October and December-through-January periods. There are active used and rental print textbook markets, which adversely affect the sale of new textbooks. We are exploring opportunities to expand into the print rental market.

Book sales for STM, Professional and Education Publishing are generally made on a returnable basis with certain restrictions. We provide for estimated future returns on sales made during the year based on historical return experience and current market trends.

Materials for book publications are obtained from authors throughout most of the world, utilizing the efforts of an editorial staff, outside editorial advisors, and advisory boards. Most materials are originated by the authors themselves or as a result of suggestion or solicitations by editors and advisors. We enter into agreements with authors that state the terms and conditions under which the materials will be published, the name in which the copyright will be registered, the basis for any royalties, and other matters. Most of the authors are compensated with royalties, which vary depending on the nature of the product. We may make advance royalty payments against future royalties to authors of certain publications. Royalty advances are reviewed for recoverability and a reserve for loss is maintained, if appropriate.

We continue to add new titles, revise existing titles, and discontinue the sale of others in the normal course of our business, and we also create adaptations of original content for specific markets based on customer demand. Our general practice is to revise our textbooks approximately every three years, if warranted, and to revise other titles as appropriate. Subscription-based products are updated on a more frequent basis.

We generally contract with independent printers and binderies globally for their services. Management believes that adequate printing and binding facilities and sources of paper and other required materials are available to it, and that it is not dependent upon any single supplier.

In fiscal year 2016, we entered into an agreement to outsource our US-based book distribution operations to Cengage Learning, with the continued aim of improving efficiency in our distribution activities and moving to a more variable cost model. As of April 30, 2019, we had one global warehousing and distribution facility remaining, which is in the United Kingdom.

We develop content in a digital format that can be used for both digital and print products, resulting in productivity and efficiency savings, and enabling print-on-demand delivery. Book content is available online through Wiley Online Library (delivered through our Literatum platform), WileyPLUS, Wiley Custom Select, and other proprietary platforms. Digital books are delivered to intermediaries, including Amazon, Apple, Google and Ingram/Vital-Source, for re-sale to individuals in various industry-standard formats, which are now the preferred deliverable for licensees of all types, including foreign language publishers. Digital books are also licensed to libraries through aggregators. Specialized formats for digital textbooks go to distributors servicing the academic market, and digital book collections are sold by subscription through independent third-party aggregators servicing distinct communities. Custom deliverables are provided to corporations, institutions, and associations to educate their employees, generate leads for their products, and extend their brands. Content from digital books is also used to create online articles, mobile apps, newsletters, and promotional collateral. This continual re-use of content improves margins, speeds delivery, and helps satisfy a wide range of customer needs. Our online presence not only enables us to deliver content online, but also to sell more books. The growth of online booksellers benefits us because they provide unlimited virtual “shelf space” for our entire backlist.

Publishing alliances and franchise products are important to our strategy. Professional publishing alliance partners include the AICPA, the CFA Institute, ACT (American College Test), IEEE, American Institute of Chemical Engineers, and many others. Education publishing alliance partners include Microsoft®, Blackboard, Instructure, and the Culinary Institute of America. The ability to join Wiley’s product development, sales, marketing, distribution, and technology with a partner’s content, technology, and/or brand name has contributed to our success.

We also promote active and growing custom professional and education publishing programs. Our custom professional publications are used by professional organizations for internal promotional or incentive programs and include digital and print books written specifically for a customer and customizations of existing publications to include custom cover art, such as imprints, messages, and slogans. More specific are customized For Dummies publications, which leverage the power of this ~~10-K.~~well-known brand to meet the specific information needs of a wide range of organizations around the world. Our custom education publishing program offers an array of tools and services designed to put the creation of customized content in instructors’ hands to create high-quality, affordable education solutions tailored to meet individual classroom needs. Through Wiley Custom Select, an online custom textbook system, instructors can build print and digital materials tailored to their specific course needs and add their own content to create a customized solution.

Index

~~Employees~~8

Courseware (WileyPLUS)

We offer high-quality online learning solutions, including WileyPLUS, a research-based, online environment for effective teaching and learning that is integrated with a complete digital textbook. WileyPLUS improves student learning through instant feedback, personalized learning plans, and self-evaluation tools, as well as a full range of course-oriented activities, including online planning, presentations, study, homework, and testing. In selected courses, WileyPLUS includes a personalized adaptive learning component, Orion, which is based on cognitive science. Orion helps to build student proficiency on topics while improving the effectiveness of their study time. It assists educators in identifying areas that need reinforcement and measures student engagement and proficiency throughout the course.

Test Preparation and Certification

The Test Preparation and Certification business represents learning solutions, training activities and print and digital formats that are delivered to customers directly through online digital delivery platforms, bookstores, online booksellers, and other customers. Products include CPAExcel, a modular, digital platform comprised of online self-study, videos, mobile apps, and sophisticated planning tools to help professionals prepare for the CPA exam, and test preparation products for the CFA®, CMA, CIA®, CMT®, FRN®, FINRA, Banking, and PMP® exams.

Licensing, Distribution, Advertising, and Other

Licensing and distribution services are made available to other publishers under agency arrangements. We also engage in co-publishing titles with international publishers and receive licensing revenue from photocopies, reproductions, translations, and digital uses of our content. Wiley also realizes advertising revenue from branded Web sites (e.g., Dummies.com, etc.) and online applications.

Solutions:

Our Solutions segment provides online program management services for higher education institutions and learning, development, and assessment services for businesses and professionals. Key growth strategies include developing new products and services for existing university partners, increasing enrollments for online program management programs, signing new and prestigious university partners, and developing new digital learning solutions by integrating our professional assessment products and services with our Corporate Learning content and technology.

Solutions revenue by product type are Education Services, Professional Assessment, and Corporate Learning. The graphs below present Solutions revenue by product type for the years ended April 30, 2019 and 2018:

Education Services

As student demand for online degree and certificate programs continues to increase, traditional institutions are partnering with online program management providers to develop and support these programs. Education Services include market research, marketing, student recruitment, enrollment support, proactive retention support, academic services to design courses, faculty support, and access to the Engage Learning Management System, which facilitates the online education experience. Graduate degree programs include Business Administration, Finance, Accounting, Healthcare, Engineering, Communications, and others. Revenue is derived from pre-negotiated contracts with institutions that provide for a share of tuition generated from students who enroll in a program. As of April 30, 2019, the legacy Education Services business had 39 university partners and 276 degree programs under contract.

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On November 1, 2018, Wiley acquired The Learning House, Inc. (“Learning House”) headquartered in Louisville (KY). Learning House provides online program management services including graduate and undergraduate programs; short courses, boot camps, and other skills training and credentialing for students and professionals; pathway services for international students; professional development services for teachers; and learning solutions for corporate clients.

Corporate Learning

The Corporate Learning business offers online learning and training solutions for global corporations, universities, and small and medium-sized enterprises, which are sold on a subscription or fee basis. Learning formats and modules on topics such as leadership development, value creation, client orientation, change management and corporate strategy are delivered on a cloud-based Learning Management System (“LMS”) platform that hosts over 20,000 content assets (videos, digital learning modules, written files, etc.) in 17 languages. Its Mohive offering also provides a collaborative e-learning publishing and program creation system. Revenue growth is derived from legacy markets, such as France, England, and other European markets, and newer markets, such as the U.S. and Brazil. In addition, content and LMS offerings are continuously refreshed and expanded to serve a wider variety of customer needs. These digital learning solutions are sold directly to corporate customers either direct or through our partners.

Professional Assessment

Our professional assessment services include pre-hire screening and post-hire personality assessments, which are delivered to business customers through online digital delivery platforms, either directly or through an authorized distributor network of independent consultants, trainers, and coaches. Wiley’s leadership assessment offerings also include Kouzes and Posner’s Leadership Practices Inventory® and The Five Behaviors of a Cohesive Team^TM.

Our assessment tools enable employers to optimize candidate selections and develop the full potential of their employees. These solutions include pre-hire assessments, including those designed to measure and match personality, knowledge, skills, managerial fit, loyalty, and values, and post-hire assessments, focused on measuring sales and managerial effectiveness, employee performance, and career potential.

Employees

As of April 30, ~~2016, the Company~~2019, we employed approximately ~~4,700~~5,700 persons on a full-time equivalent basis worldwide.

Financial Information About Business Segments

The ~~note entitled~~information set forth in Note 19, “Segment ~~Information”~~Information,” of the Notes to Consolidated Financial Statements and ~~pages 15 through 55 of the Management’s~~Item 7, “Management’s Discussion and Analysis ~~section~~of Financial Condition and Results of Operations,” of this Form 10-K are incorporated herein by reference.

~~Financial~~Available Information ~~About Foreign~~

Our Internet address is www.wiley.com. We make available, free of charge, on or through our website, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and ~~Domestic Operations and Export Sales~~

~~The note entitled “Segment Information”~~amendments to those reports that we file or furnish pursuant to Sections 13(a) or 15(d) of the ~~Notes~~Securities Exchange Act of 1934, or the Exchange Act, as soon as reasonably practicable after we electronically file these materials with, or furnish them to, ~~Consolidated Financial Statements~~the SEC. The information contained on, or that may be accessed through, our website is not incorporated by reference into, and ~~pages 15 and 55 of the Management’s Discussion and Analysis section~~is not a part of, this Form ~~10-K are incorporated herein by reference.~~10-K.

~~Item 1A.~~

~~Risk Factors~~

Item 1A. Risk Factors

The trading price of the shares of our common stock may fluctuate materially, and investors of our common stock could incur substantial losses.

actual or anticipated changes in our consolidated operating results;

~~Cautionary Statement Under~~

variances between actual consolidated operating results and the ~~Private Securities Litigation Reform Act~~expectations of ~~1995:~~securities analysts, investors and the financial community;

changes in financial estimates by us or by any securities analysts who might cover our stock;

conditions or trends in our industry, the stock market or the economy;

the level of demand for our stock, the ~~year ended April 30, 2016 contains certain forward-looking statements concerning the Company’s~~stock market price and volume fluctuations of comparable companies;

announcements by us or our competitors of new product or service offerings, significant acquisitions, strategic partnerships or divestitures;

announcements of investigations or regulatory scrutiny of our operations performance and financial condition. In addition, the Company provides forward-looking statements in other materials released to the public as well as oral forward-looking information. Statements which contain the words anticipate, expect, believes, estimate, project, forecast, plan, outlook, intend and similar expressions constitute forward-looking statements that involve risk and uncertainties. Reliance should not be placed on forward-looking statements, as actual results may differ materially from those in any forward-looking statements.or lawsuits filed against us;

capital commitments;

investors’ general perception of the Company and our business;

recruitment or departure of key personnel; and

sales of our common stock, including sales by our directors and officers or specific stockholders.

If we are ~~subject~~unable to ~~change based on many important factors. Such factors include, but are not limited~~introduce new technologies, products, and services, our ability to ~~(i)~~be profitable may be adversely affected.

~~Operating and Administrative Costs and Expenses~~

The demand for ~~growth. Employment~~digital and ~~benefit~~lower cost books could impact our sales volumes and pricing in an adverse way.

A reduction in enrollment at colleges and universities could adversely affect the demand for our higher education products.

Our intellectual property rights may not be protected, which could adversely affect our consolidated financial position and results of operations.

Adverse publicity could negatively impact our reputation, which could adversely affect our consolidated financial position and results of operations.

~~Maintaining the Company’s Reputation~~

~~The Company’s~~Our professional customers worldwide rely upon many of ~~the Company’s~~our publications to perform their jobs. It is imperative that ~~the Company~~we consistently ~~demonstrates its~~demonstrate our ability to maintain the integrity of the information included in ~~its~~our publications. Adverse publicity, whether valid or not, ~~valid,~~ may reduce demand for our publications and adversely affect our consolidated financial position and results of operations.

In our journal publishing business we have a trade concentration and credit risk related to subscription agents, and in our book business the ~~Company’s publications.~~industry has a concentration of customers in national, regional, and online bookstore chains. Changes in the financial position and liquidity of our subscription agents and customers, could adversely impact our consolidated financial position and results of operations.

~~Trade Concentration and Credit Risk~~

In the journal publishing business, subscriptions are primarily sourced through journal subscription agents who, acting as agents for library customers, facilitate ordering by consolidating the subscription orders/billings of each subscriber with various publishers. Cash is generally collected in advance from subscribers by the subscription agents and is principally remitted to ~~the Company~~us between the months of December and April. Although at fiscal year-end ~~the Company~~we had minimal credit risk exposure to these agents, future calendar-year subscription receipts from these agents are highly dependent on their financial condition and liquidity.

Subscription agents account for approximately ~~22%~~20% of total annual consolidated revenue and no one ~~agent~~affiliated group of subscription agents accounts for ~~more than 11%~~approximately 10% of total annual consolidated revenue.

~~The Company’s non-journal subscription~~Our book business is not dependent upon a single ~~customer.~~customer; however, the industry is concentrated in national, regional, and online bookstore chains. Although no one ~~non-journal~~book customer accounts for more than 9%8% of total consolidated revenue and ~~12%~~11% of accounts receivable at April 30, ~~2016,~~2019, the top 10 ~~non-journal~~book customers account for approximately ~~16%~~13% of total consolidated revenue and approximately ~~26%~~21% of accounts receivable at April 30, ~~2016. The Company maintains~~2019. We maintain approximately $25 million of trade credit insurance, ~~subject to certain limitations,~~ covering balances due from certain named customers, ~~which expires in May, 2017.~~subject to certain limitations and annual renewal.

Changes in ~~Laws~~laws, tariffs, and ~~Regulations That Could Adversely Affect the Company’s Business~~regulations, including regulations related to open access, could adversely impact our consolidated financial position and results of operations.

~~The Company maintains~~We maintain operations in Asia, Australia, Canada, Europe, and the United States. The conduct of our business, including the sourcing of content, distribution, sales, marketing, and advertising, is subject to various laws and regulations administered by governments around the world. Changes in laws, regulations, or government policies, including tax regulations and accounting standards, may adversely affect ~~the Company’s~~our future consolidated financial ~~results.~~

position and results of operations.

~~Business Transformation and Restructuring~~

The ~~Company~~uncertainty surrounding the implementation and effect of Brexit may cause increased economic volatility, affecting our operations and business.

A disruption or loss of data sources could limit our collection and use of certain kinds of information, which could adversely impact our communication with our customers.

If we are unable to retain key employees and other personnel, our consolidated financial condition or results of operations may be adversely affected.

We may not realize the anticipated cost savings and benefits from, or our business may be disrupted by, our business transformation and restructuring efforts.

~~Outsourcing~~We may not realize the anticipated cost savings and processing efficiencies associated with the outsourcing of ~~Business Processes~~certain business processes.

We may be susceptible to information technology risks that may adversely impact our business, consolidated financial position and results of operations.

~~Introduction of New Technologies, Products and Services~~

~~Student Demand for Lower Cost Textbooks in Higher Education~~

~~Factors that Reduce Enrollment at Colleges and Universities~~

~~Information Technology Risks~~

Cyber risk and ~~continued growth depends greatly~~the failure to maintain the integrity of our operational or security systems or infrastructure, or those of third parties with which we do business, could have a material adverse effect on ~~developing new~~our business, consolidated financial condition, and results of operations.

Fluctuations in interest rates and foreign currency exchange rates could materially impact our consolidated financial condition and results of operations.

We may not be able to mitigate the impact of inflation and cost increases, which could have an adverse impact on our consolidated financial position and results of operations.

Changes in tax laws, including regulations and other guidance in connection with the U.S. Federal tax legislation originally known as the Tax ~~Legislation~~Cuts and Jobs Act of 2017 (the “Tax Act”), could have a material impact on our consolidated financial position and results of operations.

~~Business Risk in Developing, Emerging and Other Foreign Markets~~

~~Liquidity~~Changes in global economic conditions could impact our ability to borrow funds and ~~Global Economic Conditions~~meet our future financing needs.

~~Effects~~Changes in pension costs and related funding requirements may impact our consolidated financial position and results of ~~Increases in Pension Costs and Funding Requirements~~operations.

We may not be able to realize the expected benefits of our growth strategies, including successfully integrating acquisitions, which could adversely impact our consolidated financial position and results of operations.

~~Effects of Inflation and Cost Increases~~

~~Ability to Successfully Integrate Key Acquisitions~~

As a result of acquisitions, we may record a significant amount of goodwill and ~~liabilities.~~other identifiable intangible assets and we may never realize the full carrying value of these assets.

~~Attracting and Retaining Key Employees~~

produce accurate financial statements on a timely basis could be impaired.

~~Item 1B.~~

~~Unresolved Staff Comments~~

Item 1B. Unresolved Staff Comments

~~The Company occupies~~

Location		Purpose		Owned or Leased		Approx. Sq. Ft.

United States:

New Jersey		Corporate Headquarters		Leased	~~415,000~~	294,000
		Office ~~& Warehouse~~		Leased		185,000
Indiana		Offices		Leased		166,000
California		Office		Leased		11,000
Massachusetts		Office		Leased		26,000
Illinois		Office		Leased		52,000
Florida		Office		Leased		58,000
Minnesota		Office		Leased		22,000
Texas		Office		Leased		11,000
Colorado		Office		Leased		15,000
Kentucky		Office		Leased		47,000

~~Indiana~~	~~Office~~	~~Leased~~	~~108,000~~

~~California~~	~~Office~~	~~Leased~~	~~19,000~~

~~Massachusetts~~	~~Office~~	~~Leased~~	~~34,000~~

~~Illinois~~	~~Office~~	~~Leased~~	~~51,000~~

~~Florida~~	~~Office~~	~~Leased~~	~~49,000~~

~~Minnesota~~	~~Offices~~	~~Leased~~	~~36,000~~

~~Texas~~	~~Offices~~	~~Leased~~	~~29,000~~

~~Colorado~~	~~Office~~	~~Leased~~	~~15,000~~

International:

Australia		Offices		Leased	~~59,000~~	34,000
Canada		Office		Leased		12,000
England		Distribution Centers		Leased		298,000
		Offices		Leased		80,000
~~Canada~~		Offices		Owned		70,000
France		Offices		Leased		36,000
Germany		Office		Owned		104,000
		Office		Leased		18,000
Jordan		Office		Leased		24,000
Singapore		Office		Leased		35,000
Russia		Office		Leased		27,000
China		Offices		Leased		18,000
India		Distribution Centers		Leased		12,000
		Office
~~England~~	~~Warehouses~~	Leased	~~297,000~~	25,000
Greece	~~Offices~~	~~Leased~~	~~80,000~~
	~~Offices~~	~~Owned~~	~~70,000~~

~~Germany~~	~~Office~~	~~Owned~~	~~59,000~~
	Office	~~Leased~~	~~24,000~~
Leased
~~Singapore~~	~~Offices~~	~~Leased~~	~~44,000~~

~~Russia~~	~~Office~~	~~Leased~~	~~21,000~~

~~India~~	~~Warehouse~~	~~Leased~~	16,000

~~China~~	~~Office~~	~~Leased~~	~~14,000~~

12Item 3. Legal Proceedings

~~Item 3.~~

~~Legal Proceedings~~

The information set forth in Note 15, “Commitment and Contingencies,” of the Notes to Consolidated Financial Statements is incorporated herein by reference.

~~The Company is~~We are involved in routine litigation in the ordinary course of ~~its~~our business. In the opinion of management, the ultimate resolution of all pending litigation will not have a material effect upon ~~the~~our consolidated financial ~~condition~~position or results of ~~operations~~operations.

Item 4. Mine Safety Disclosures

Not applicable.

Index

Information About Our Executive Officers

Set forth below are the current executive officers of the Company.

~~Over~~ Each of the ~~past few years,~~officers listed will serve until the next organizational meetings of the Board of Directors of the Company ~~has from time to time faced claims from photographers or agencies that~~and until each of the Company has used photographs without licenses or beyond licensed permissions. The Company has insurance coverage for a significant portion of such claims. The Company does not believe that its exposure to such claims either individually or in the aggregate is material.respective successors are duly elected and qualified.

Name, Current and Former Positions	Age	First Elected to Current Position

BRIAN A. NAPACK	57	December 2017
President and Chief Executive Officer and Director
March 2012 – Senior Advisor, Providence Equity Partners LLC

JOHN A. KRITZMACHER	58	July 2013
Chief Financial Officer and Executive Vice President, Operations
October 2012 – Senior Vice President of Business Operations, Organizational Planning & Structure at WebMD Health Corp

MATTHEW S. KISSNER	65	February 2019
Executive Vice President, Group Executive
December 2017 – Chairman of Company's Board of Directors
May 2017 – Interim Chief Executive Officer of the Company
October 2015 – Chairman of Company's Board of Directors

GARY M. RINCK	67	September 2014
Executive Vice President, General Counsel
2004 – Senior Vice President, General Counsel

JUDY VERSES	62	October 2016
Executive Vice President, Research
October 2011 – President – Global Enterprise and Education, Rosetta Stone Inc.

CHRISTOPHER F. CARIDI	53	March 2017
Senior Vice President, Corporate Controller and Chief Accounting Officer
March 2014 – Vice President Finance, Thomson Reuters
September 2009 – Vice President, Controller/Global Head of Accounting Operations, Thomson Reuters

KEVIN MONACO	55	October 2018
Senior Vice President, Treasurer and Tax
October 2009 – SVP, Finance, Treasurer and Investor Relations, Coty Inc.

AREF MATIN	60	May 2018
Executive Vice President, Chief Technology Officer
February 2015 – Executive Vice President, Chief Technology Officer, Ascend Learning
July 2012 – Executive Vice President, Chief Technology Officer, Pearson Learning Technologies & Pearson Higher Education

TANELI D. RUDA	45	July 2018
Executive Vice President, Chief Strategy Officer
March 2018 – Head of Corporate Strategy, Thomson Reuters
March 2014 – SVP and Managing Director, Global Trade Management, Thomson Reuters
January 2010 – SVP, Strategy, Thomson Reuters

Index

PART II

~~Item 5.~~

~~Market for the Company’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities~~

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

~~The Company’s~~Our Class A and Class B shares are listed on the New York Stock Exchange under the symbols ~~JWa~~JW.A and ~~JWb,~~JW.B, respectively. ~~Dividends per share and the market price range (based on daily closing prices) by fiscal quarter for the past two fiscal years were as follows:~~

Class A Common Stock Class B Common Stock
Market Price Market Price
Dividends High Low Dividends High Low
2016
First Quarter $0.30 $58.66 $51.68 $0.30 $58.74 $52.54
Second Quarter 0.30 53.18 48.16 0.30 52.93 48.25
Third Quarter 0.30 54.29 40.29 0.30 53.80 41.25
Fourth Quarter 0.30 50.74 40.21 0.30 50.85 40.18
2015
First Quarter $0.29 $62.05 $54.52 $0.29 $61.80 $54.35
Second Quarter 0.29 60.42 51.45 0.29 61.08 52.04
Third Quarter 0.29 62.85 56.48 0.29 62.75 56.37
Fourth Quarter 0.29 65.21 56.88 0.29 65.10 56.74

On a quarterly basis, the Board of Directors considers the payment of cash dividends based upon its review of earnings, ~~the~~our financial position, ~~of the Company,~~ and other relevant factors. As of ~~April 30, 2016,~~May 31, 2019, the approximate number of holders of ~~the Company’s~~our Class A and Class B Common Stock were ~~847~~758 and 7457, respectively, based on the holders of record.

During the year ended April 30, 2017, our Board of Directors approved an additional share repurchase program of four million shares of Class A or B Common Stock. During the fourth quarter of ~~fiscal year 2016, the Company~~2019, we made the following purchases of Class A Common Stock under ~~its~~this publicly announced stock repurchase program.

	Total Number of Shares Purchased		Average Price Paid Per Share		Total Number of Shares Purchased as Part of a Publicly Announced Program		Maximum Number of Shares that May be Purchased Under the Program
February 2019		—	$	—		—		2,446,640
March 2019		557,665		44.83		557,665		1,888,975
April 2019		—		—		—		1,888,975
Total		557,665	$	44.83		557,665		1,888,975

Total Number
of Shares Purchased

Average
Price Paid
Per Share
Total Number of Shares Purchased as part of a Publicly Announced Program Maximum Number of Shares that May be Purchased Under the Program
February 2016 - - - 963,022
March 2016 118,036 $47.12 118,036 845,006
April 2016 98,150 $48.00 98,150 746,836
Total 216,186 $47.52 216,186

Item 6. Selected Financial Data

Operating Income ^(c)

Working Capital ^(d)

Contract Liability (Deferred Revenue) in Working Capital ^(d)

For the Years Ended April 30,
Dollars in millions (except per share data) 2016 2015 2014 2013 2012
Revenue $1,727.0 $1,822.4 $1,775.2 $1,760.8 $1,782.7
Operating Income (a-b) 188.1 237.7 206.7 199.4 280.4
Net Income (a-c) 145.8 176.9 160.5 144.2 212.7
Working Capital (d) (111.1) (62.8) 60.1 (32.2) (66.3)
Deferred Revenue in Working Capital (d) (426.5) (372.1) (385.7) (363.0) (342.0)
Total Assets 2,921.1 3,004.2 3,077.4 2,806.4 2,532.9
Long-Term Debt 605.0 650.1 700.1 673.0 475.0
Shareholders’ Equity 1,037.1 1,055.0 1,182.2 988.4 1,017.6
Per Share Data
Earnings Per Share (a-c)
Diluted
$2.48 $2.97 $2.70 $2.39 $3.47
Basic
$2.51 $3.01 $2.73 $2.43 $3.53
Cash Dividends
Class A Common $1.20 $1.16 $1.00 $0.96 $0.80
Class B Common
$1.20 $1.16 $1.00 $0.96 $0.80

a) (a)

~~In fiscal~~See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” for a discussion of the factors that contributed to our consolidated operating results for the three years 2016, 2015, 2014 and 2013, the Company recorded restructuring charges of $28.6 million ($0.8 per share), $28.8 million ($0.34 per share), $42.7 million ($0.48 per share) and $29.3 million ($0.33 per share), respectively, and related impairment charges in fiscal years 2014 and 2013 of $4.8 million ($0.06 per share) and $30.7 million ($0.35 per share), respectively.

b)	~~In fiscal year 2013, the Company recorded a gain, net of losses, on the sale of certain Professional Development consumer publishing programs of $6.0 million ($0.04 per share).~~

c)	ended April 30, 2019. Certain tax benefits and charges included in ~~fiscal year results are as follows:~~the years ended April 30, 2019 – 2015 include:

Fiscal years 2016, 2014, 2013 and 2012 include tax benefits of $5.9 million ($0.10 per share), $10.6 million ($0.18 per share), $8.4 million ($0.14 per share), and $8.8 million ($0.14 per share), respectively, principally associated with consecutive tax legislation enacted in the United Kingdom that reduced the U.K. corporate income tax rates.

·	~~Fiscal year 2015 includes a non-recurring tax benefit of $3.1 million ($0.05 per share) related to tax deductions claimed on the write-up of certain foreign tax assets to fair market value.~~

·	~~Fiscal year 2012 includes a tax benefit of $7.5 million ($0.12 per share) related to the reversal of an income tax reserve recorded in conjunction with the Blackwell acquisition.~~

The primary driver of the negative working capital is unearned deferred revenue related to subscriptions for which cash has been collected in advance. Cash received in advance for subscriptions is used by the Company for a number of purposes including acquisitions; debt repayments; funding operations; dividend payments; and purchasing treasury shares. The deferred revenue will be recognized in income over the term of the subscription; when the related issue is shipped or made available online, or the service is rendered.

~~Item 7.~~

~~Management’s Discussion and Analysis of Business, Financial Condition and Results of Operations~~

~~Core Business Segments~~

~~Professional Development (“PD”):~~

~~Publishing Alliances and Programs:~~

~~Knowledge-Enabled Products and Services:~~

~~Journal Products:~~

~~Corporate Learning:~~

~~Professional Online Test Preparation and Certifications:~~

~~Online Program Management (Deltak):~~

~~Course Workflow (WileyPLUS):~~

~~Advertising Revenue:~~

~~Global Operations~~

~~Competition and Economic Drivers within the Publishing Industry~~

~~Performance Measurements~~

~~Results of Operations~~

~~FISCAL YEAR 2016 SUMMARY RESULTS~~

~~Cost of Sales and Gross Profit:~~

Consolidated Financial Statements for more information.

The year ended April 30, 2017 includes the effect of the German Tax litigation of $49.1 million ($0.85 per share).

~~Operating and Administrative Expenses:~~

~~Restructuring Charges:~~

Total Charges
2016 2015 Incurred to Date
Charges by Segment:
   Research $5,048 $4,555 $20,273
   Professional Development 2,277 4,385 24,806
   Education 1,206 1,571 4,786
   Shared Services 20,080 18,293 74,724
Total Restructuring Charges $28,611 $28,804 $124,589

Charges by Activity:
   Severance $16,443 $17,093 $79,204
   Process reengineering consulting 7,191 301 18,666
   Other activities 4,977 11,410 26,719
Total Restructuring Charges $28,611 $28,804 $124,589

~~Amortization of Intangibles:~~

~~Interest Expense/Income, Foreign Exchange and Other:~~

~~Provision for Income Taxes:~~

The ~~benefits reflect the remeasurement of all applicable U.K. deferred tax balances to the new income tax rates of 19% effective~~year ended April ~~1, 2017 and 18% effective April 1, 2020. In fiscal year~~30, 2015 ~~the Company recognized~~includes a non-recurring tax benefit of $3.1 million ($0.05 per share) related to tax deductions claimed on the write-up of certain foreign tax assets to fair market value.

Index

(b)

On May 1, 2018, we adopted the U.S. accounting standard regarding revenue recognition ("Topic 606," or "ASC 606"). The adoption of Topic 606 did not have a material impact to our consolidated results of operations. Refer to Note 2, " Summary of Significant Accounting Policies, Recently Issued, and Recently Adopted Accounting Standards," in the Notes to Consolidated Financial Statements for more information.

(c)

Due to the retrospective adoption of Accounting Standards Update (“ASU”) 2017-07, “Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost,”, total net benefits (costs) of $8.1 million and $(5.3) million related to the non-service components of defined benefit and other post-employment benefit plans were reclassified from Operating and Administrative Expenses to Interest and Other Income (Expense) for the years ended April 30, 2018 and 2017, respectively. Total net benefits related to the non-service components of defined benefit and other post-employment benefit plans were $8.8 million for the year ended April 30, 2019. Refer to Note 2, "Summary of Significant Accounting Policies, Recently Issued, and Recently Adopted Accounting Standards," in the Notes to Consolidated Financial Statements for more information.

(d)

The primary driver of the negative working capital is unearned contract liabilities (deferred revenue) related to subscriptions for which cash has been collected in advance. Cash received in advance for subscriptions is used by us for a number of purposes, including acquisitions, debt repayments, funding operations, dividend payments, and purchasing treasury shares. The contract liabilities (deferred revenue) will be recognized as income when the products are shipped or made available online to the customers over the term of the subscription period.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

The information in our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) should be read together with our Consolidated Financial Statements and related notes set forth in Part II, Item 8, as well as the discussion included above, “Cautionary Notice Regarding Forward-Looking Statements “Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995” and “Non-GAAP Financial Measures,” along with Part I, Item 1A, “Risk Factors,” of this Annual Report on Form 10-K. All amounts and percentages are approximate due to rounding and all dollars are in thousands, except per share amounts or where otherwise noted. When we cross-reference to a “Note,” we are referring to our “Notes to Consolidated Financial Statements,” unless the context indicates otherwise.

Recent Events

On July 1, 2019, we completed the acquisition of Zyante Inc. ("Zyante"), a leading provider of computer science and STEM education courseware. Under the terms of the agreement, Zyante shareholders received $56 million in cash. Zyante will be included in our Education Publishing segment.

On June 28, 2019, our Board of Directors declared a quarterly dividend of $0.34 per share, or approximately $19.2 million, on our Class A and Class B Common Stock. The dividend is payable on July 24, 2019 to shareholders of record on July 10, 2019.

On May 31, 2019, we completed the acquisition of certain assets of Knewton, Inc. (“Knewton”), included in our Publishing segment. Knewton is a provider of affordable courseware and adaptive learning technology for an undisclosed amount.

•	On May 30, 2019, we amended and restated our existing credit agreement with a (i) five-year revolving credit facility in an aggregate principal amount up to $1.25 billion, and (ii) a five-year term loan A facility consisting of $250 million.

Fourth Quarter Highlights

Increase in GAAP Results: Revenue of $491.2 million, an increase of 3%, Operating Income of $80.0 million, an increase of 10% and Diluted EPS of $1.10, an increase of 19%;

Non-GAAP Adjusted Results on a constant currency basis: Adjusted Revenue increase of 7%, Adjusted Operating Income increase of 14%, and Adjusted EPS increase of 19%;

Non-GAAP Adjusted Results on a constant currency basis and excluding the impact from Learning House acquisition: Adjusted Revenue increase of 3%, Adjusted Operating Income increase of 17%, and Adjusted EPS increase of 26%.

Results of Operations

FISCAL YEAR 2019 AS COMPARED TO FISCAL YEAR 2018 SUMMARY RESULTS

Revenue:

Revenue for the year ended April 30, 2019 was flat at $1,800 million, as compared with prior year. On a constant currency basis, revenue increased 2% as compared with prior year. This increase was primarily due to the following:

the incremental impact of the acquisition of Learning House on November 1, 2018, which contributed $31.5 million of revenue,

increased revenue in our Research segment primarily driven by Open Access; and to a lesser extent, Licensing, Reprints, Backfiles, and Other offerings; and,

increased revenue in all of our Solutions segment businesses, excluding the impact of Learning House.

These increases were offset by declines in Publishing print product sales.

Refer to Note 4, “Acquisition,” for more information related to the acquisition of Learning House.

See the “Segment Operating Results” below for additional details on each segment’s revenue and contribution to profit performance.

Cost of Sales:

Cost of sales for the year ended April 30, 2019 increased $23.7 million, or 4%, as compared with prior year. On a constant currency basis, cost of sales increased 6%. This increase was primarily due to the following factors:

the incremental impact of Learning House, primarily due to marketing and employment related costs,

an increase in legacy Education Services business marketing costs of $8.1 million primarily due to increased investments to support revenue growth;

Index

higher royalty costs of $6.6 million; and, to a lesser extent,

higher employment costs of $3.4 million.

These increases were offset by lower inventory costs of $5.8 million primarily due to lower Publishing print sales.

In connection with the acquisition of Learning House, we changed our accounting policy for certain advertising and marketing costs incurred by our Education Services business to fulfill performance obligations from contracts with educational institutions. Under the new accounting policy, these costs are included in Cost of Sales whereas they were previously included in Operating and Administrative Expenses on the Consolidated Statements of Income. Including these expenses in Cost of Sales will better align these costs with the related revenue and conform with the presentation of such costs for Learning House. This change in accounting policy was applied retrospectively. The amount reclassified for the year ended April 30, 2018 was $45.8 million. Refer to “Change in Accounting Policy” in Note 2, “Summary of Significant Accounting Policies, Recently Issued, and Recently Adopted Accounting Standards,” for more information on the accounting policy change and Note 4, “Acquisition,” for more information related to the acquisition of Learning House.

Gross Profit Margin:

Gross profit margin for the year ended April 30, 2019 was 69.2% compared with 70.4% in the prior year. On a constant currency basis, the gross profit margin would have been 69.3%.

Operating and Administrative Expenses:

Operating and administrative expenses for the year ended April 30, 2019 increased $6.8 million, or 1%, as compared with prior year and 2% on a constant currency basis. The increase was primarily due to higher costs related to increased resources in editorial resources to increase article output, as well as higher marketing, advertising and sales costs and the incremental impact of the acquisition of Learning House. These factors were partially offset by lower technology costs and the impairment charge in the prior year related to one of our Publishing brands of $3.6 million.

Restructuring and Related Charges:

In the years ended April 30, 2019 and 2018, we recorded pre-tax restructuring charges of $3.1 million and $28.6 million, respectively, related to the Restructuring and Reinvestment Program.

These charges are reflected in Restructuring and Related Charges on the Consolidated Statements of Income and summarized in the following table:

	2019		2018			Total Charges Incurred to Date
Charges by Segment:
Research	$	1,131	$	5,257		$	26,544
Publishing		650		6,443			39,581
Solutions		878		3,695			7,125
Corporate Expenses		459		13,171			96,378
Total Restructuring and Related Charges	$	3,118	$	28,566		$	169,628

Charges (Credits) by Activity:
Severance	$	1,456	$	27,213		$	116,259
Consulting and Contract Termination Costs		526		1,815			21,155
Other activities		1,136		(462	)		32,214
Total Restructuring and Related Charges	$	3,118	$	28,566		$	169,628

The charges above are net of changes in estimates for previously accrued restructuring charges. Other Activities for the year ended April 30, 2019 reflect lease impairment related costs. The credits in Other Activities for the year ended April 30, 2018 mainly reflect changes in estimates for previously accrued restructuring charges related to facility lease reserves.

We currently do not anticipate any further material charges related to the Restructuring and Reinvestment Program.

Amortization of Intangibles:

Amortization of intangibles was $54.7 million for the year ended April 30, 2019, an increase of $6.4 million as compared with prior year. On a constant currency basis, amortization of intangibles increased 14%. The increase in amortization was primarily due to the acquisition of intangibles as part of the acquisition of Learning House and, to a lesser extent, in the Research segment due to the timing of the acquisitions of publishing rights in the second half of 2018.

Index

Operating Income:

Operating income was $224.0 million for the year ended April 30, 2019, a decrease of $7.5 million, or 3%, as compared with prior year. On a constant currency basis, excluding the impact from Learning House, which reported an operating loss of $8.0 million, and restructuring charges and the brand impairment charge in the prior year, operating income decreased 6%, due to higher expenses, partially offset by higher revenue.

Interest Expense:

Interest expense for the year ended April 30, 2019 increased $2.8 million to $16.1 million on a reported basis. This increase was due to a higher average debt balances outstanding, which included borrowings for the funding of the acquisition of Learning House, and a higher weighted average effective borrowing rate.

Foreign Exchange Transaction (Losses) Gains:

Foreign exchange transaction losses were $6.0 million for the year ended April 30, 2019 and were primarily due to the net impact of the change in average foreign exchange rates as compared to the U.S. dollar on our intercompany accounts receivable and payable balances. For the year ended April 30, 2018, foreign exchange transaction losses were $12.8 million which were primarily due to the impact of changes in average foreign exchange rates as compared to the U.S. dollar on our intercompany and third-party accounts receivable and payable balances.

Provision for Income Taxes:

The following table summarizes the effective tax rate for the years ended April 30, 2019 and 2018:

	2019		2018
Effective tax rate as reported		21.0%		10.2%
State tax adjustment in 2019		1.3%		—
Deferred Tax from the Tax Act Rate Change		(0.1)%		11.7%
Effective tax rate excluding the deferred tax from the Tax Act and state tax adjustment		22.2%		21.9%

The effective tax rate for the year ended April 30, 2019 was greater than the rate for the year ended April 30, 2018 due to the net deferred tax benefit from the Tax Act in the year ended April 30, 2018 compared to the relatively small net deferred benefit in the year ended April 30, 2019 from state tax apportionment changes.

The effective tax rate was equal to the U.S. statutory rate for the year ended April 30, 2019 as the increase from higher taxes on non-U.S. income and various other items was offset by a state tax benefit from more favorable apportionment factors which reduced our deferred tax liabilities, net of federal benefit.

The Tax Act

The information set forth in Note 12, "Income Taxes” under the caption "The Tax Act," is incorporated herein by reference and further describes the impact of the Tax Act.

Diluted Earnings Per Share (“EPS”):

EPS for the year ended April 30, 2019 was $2.91 per share compared with $3.32 per share in the prior year. Excluding the impact of the ~~tax benefits described above,~~items included in the ~~Company’s effective tax rate~~table below, Adjusted EPS for the year ended April 30, 2019 decreased ~~from 22.9%~~14% to ~~19.9% principally~~$2.96 per share compared with $3.43 per share in the prior year.

Index

Below is a reconciliation of our GAAP EPS to Non-GAAP Adjusted EPS:

	2019			2018
GAAP EPS	$	2.91		$	3.32
Adjustments:
Restructuring and related charges		0.04			0.39
Foreign exchange losses on intercompany transactions		0.06			0.15
Impact of Tax Cuts and Job Act		—			(0.43	)
Impact of reduction in certain U.S. state tax rates in 2019		(0.05	)		—
Non-GAAP Adjusted EPS	$	2.96		$	3.43

On a constant currency basis, Adjusted EPS decreased 8% due to lower ~~foreign tax rates,~~Adjusted Operating Income. Adjusted EPS for the year ended April 30, 2019 was also lower as compared with prior year due to an $0.15 per share dilutive impact of the Learning House acquisition.

SEGMENT OPERATING RESULTS:

	2019			2018			% Change			% Change w/o FX (b)
RESEARCH:
Revenue:
Journal Subscriptions	$	661,055		$	677,685			(2	)%		—
Open Access		54,671			41,997			30	%		33	%
Licensing, Reprints, Backfiles, and Other		185,619			181,806			2	%		4	%
Total Journal Revenue	$	901,345		$	901,488			—			3	%

Publishing Technology Services (Atypon)		35,968			32,907			9	%		9	%

Total Research Revenue	$	937,313		$	934,395			—			3	%

Cost of Sales		254,338			247,654			3	%		5	%

Gross Profit	$	682,975		$	686,741			(1	)%		2	%
Gross Profit Margin		72.9	%		73.5	%

Operating Expenses (a)		394,870			383,329			3	%		4	%
Amortization of Intangibles		28,099			26,829			5	%		6	%
Restructuring Charges (See Note 7)		1,131			5,257			(78	)%		(78	)%

Contribution to Profit	$	258,875		$	271,326			(5	)%		(1	)%
Contribution Margin		27.6	%		29.0	%

(a)

Due to the retrospective adoption of ASU 2017-07, total net benefits related to defined benefit and other post-employment benefit plans were reclassified from Operating and Administrative Expenses to Interest and Other Income (Expense). The amount for the year ended April 30, 2018 for the Research segment was $4.2 million. Refer to Note 2, "Summary of Significant Accounting Policies, Recently Issued, and Recently Adopted Accounting Standards," for more information.

(b) Adjusted to exclude FX impact and Restructuring Charges.

Revenue:

Research revenue for the year ended April 30, 2019 increased $2.9 million, or flat as compared with prior year. On a ~~tax reserve release~~constant currency basis, revenue increased 3%, compared with prior year, primarily due to continued strong growth in publication volumes for Open Access, particularly hybrid journals.

Gross Profit:

Gross profit for the year ended April 30, 2019 decreased 1% compared with prior year and, on a constant currency basis, increased 2%. This was due to higher revenues, partially offset by higher costs of sales, primarily due to increased royalty costs.

Index

Gross profit margin was 72.9% compared with prior year of 73.5%. On a constant currency basis, gross profit margin would have been 73%.

Contribution to Profit:

Contribution to profit decreased 5% to $258.9 million for the year ended April 30, 2019 as compared with the prior year. On a constant currency basis and excluding restructuring charges, contribution to profit decreased 1% as compared with prior year. This decrease was due to higher operating costs partially offset by higher gross profit. The higher operating costs include additional resources in editorial to support increased journal publishing of $11.2 million, increased costs related to advertising and marketing of $3.0 million, and sales resources of $2.5 million, which were partially offset by lower administrative costs.

Society Partnerships

For calendar year 2019, 17 new society contracts were signed, with combined annual revenue of approximately $5.4 million, and 4 society contracts were not renewed with combined annual revenue of approximately $1.8 million.

Projekt DEAL

In the third quarter of 2019, we completed a new agreement with a national consortium representing all 700 German academic institutions. This new three-year agreement provides those German libraries and their researchers with both subscriptions access and open access publishing. We expect to generate modestly more revenue from this new arrangement and the opportunity to grow revenue through higher publishing volumes.

	2019			2018			% Change			% Change w/o FX (b)
PUBLISHING:
Revenue:
STM and Professional Publishing	$	265,719		$	287,315			(8	)%		(6	)%
Education Publishing		157,579			187,178			(16	)%		(14	)%
Courseware (WileyPLUS)		63,485			59,475			7	%		7	%
Test Preparation and Certification		40,606			35,534			14	%		15	%
Licensing, Distribution, Advertising and Other		46,803			48,146			(3	)%		(1	)%

Total Publishing Revenue	$	574,192		$	617,648			(7	)%		(6	)%

Cost of Sales		178,050			194,900			(9	)%		(7	)%

Gross Profit	$	396,142		$	422,748			(6	)%		(5	)%
Gross Profit Margin		69.0	%		68.4	%

Operating Expenses (a)		268,425			282,958			(5	)%		(4	)%
Amortization of Intangibles		8,166			8,108			1	%		1	%
Restructuring Charges (see Note 7)		650			6,443			(90	)%		(90	)%
Publishing brand impairment charge		—			3,600			(100	)%		(100	)%

Contribution to Profit	$	118,901		$	121,639			(2	)%		(8	)%
Contribution Margin		20.7	%		19.7	%

(a)

Due to the retrospective adoption of ASU 2017-07, total net benefits related to defined benefit and other post-employment benefit plans were reclassified from Operating and Administrative Expenses to Interest and Other Income (Expense). The amount for the year ended April 30, 2018 for the Publishing segment was $2.3 million. Refer to Note 2, "Summary of Significant Accounting Policies, Recently Issued, and Recently Adopted Accounting Standards," for more information.

(b)	Adjusted to exclude FX impact and Restructuring Charges, and in the year ended April 30, 2018, a Publishing brand impairment charge was also excluded.

Revenue:

Publishing revenue decreased 7% to $574.2 million on a reported basis, and 6% on a constant currency basis as compared with prior year. The decrease was primarily due to a decline in Education Publishing and STM and Professional Publishing due to a continued shift in market demand for print products. This decline was partially offset by an increase in volume of Test Preparation and Certification product offerings and an increase in WileyPLUS mainly due to the timing of revenue recognition.

Index

Gross Profit:

Gross profit decreased 6% as compared with prior year and 5% on a constant currency basis, due to the decline in Education Publishing and STM and Professional Publishing revenue; partially offset by a decrease in inventory costs and to a lesser extent, book composition and product development amortization expense.

Contribution to Profit:

Contribution to profit decreased 2% to $118.9 million for the year ended April 30, 2019 as compared with the prior year. On a constant currency basis and excluding restructuring charges and a ~~lower proportion of income from the U.S. at higher tax rates.~~

~~Earnings Per Share:~~

Earnings per diluted share for fiscal year 2016 decreased $0.49 per share to $2.48 per share, or $0.43 per share excluding the current ($0.32 per share) and prior year ($0.34 per share) restructuring charges, the current year deferred tax benefit on the U.K. rate change ($0.10 per share),brand impairment charge in the prior year, ~~non-recurring tax benefit ($0.05 per share)~~contribution to profit decreased 8% as compared with the prior year. This decrease was primarily due to lower gross profit, partially offset by, lower operating expenses including employee related costs, content related costs and, ~~the unfavorable impact of foreign exchange ($0.13 per share).~~to a lesser extent, technology costs.

	2019			2018			% Change			% Change w/o FX (b)
SOLUTIONS:
Revenue:
Education Services	$	157,549		$	119,131			32	%		32	%
Professional Assessment		65,889			61,094			8	%		8	%
Corporate Learning		65,126			63,835			2	%		6	%

Total Solutions Revenue	$	288,564		$	244,060			18	%		19	%

Cost of Sales (a)		122,337			88,462			38	%		39	%

Gross Profit	$	166,227		$	155,598			7	%		8	%
Gross Profit Margin		57.6	%		63.8	%

Operating Expenses (a)		131,989			116,513			13	%		15	%
Amortization of Intangibles		18,393			13,291			38	%		39	%
Restructuring Charges (see Note 7)		878			3,695			(76	)%		(76	)%

Contribution to Profit	$	14,967		$	22,099			(32	)%		(39	)%
Contribution Margin		5.2	%		9.1	%

(a)

In connection with the acquisition of Learning House, we changed our accounting policy for certain advertising and marketing costs incurred by our Education Services business to fulfill performance obligations from contracts with educational institutions. Under the new accounting policy, these costs are included in Cost of Sales whereas they were previously included in Operating and Administrative Expenses on the Consolidated Statements of Income. The impact of this reclassification was an increase to Cost of Sales and a corresponding decrease to Operating and Administrative Expenses of $45.8 million for the year ended April 30, 2018. This reclassification had no impact on Revenue, net or Contribution to Profit. Refer to “Change in Accounting Policy” in Note 2, “Summary of Significant Accounting Policies, Recently Issued, and Recently Adopted Accounting Standards,” for more information on the accounting policy change and Note 4, “Acquisition,” for more information related to the acquisition of Learning House.

(b)	Adjusted to exclude FX impact and Restructuring Charges.

Revenue:

Solutions revenue increased 18% to $288.6 million on a reported basis and 19% on a constant currency basis as compared with prior year. The ~~decline~~increase was mainly driven by the ~~transition~~impact of the acquisition of Learning House on November 1, 2018 which contributed $31.5 million in revenue, and to ~~time-based digital journal subscription agreements ($0.42 per share); investments~~a lesser extent, higher revenue in the ~~Company’s Enterprise Resource Planning and related systems, Online Program Management (Deltak)~~legacy Education Services business, Professional Assessment services and Corporate ~~Learning (CrossKnowledge), partially offset by restructuring and other cost savings initiatives.~~Learning.

~~BUSINESS SEGMENT RESULTS:~~

As part of Wiley’s Restructuring and Reinvestment Program, the Company consolidated its marketing services functions into a single global shared service function. This newly centralized service group enables significant cost reduction opportunities, including efficiencies gained from standardized technology and centralized management. The costs of these functions were previously reported as direct operating expenses in each business segment but are now reported within Shared Services and Administrative Costs and are allocated to each business segment. In addition, the Company modified its product/service revenue categories for the Research segment. As a result, prior year amounts have been restated to reflect these same reporting methodologies. The Company uses occupied square footage of space; number of employees; units shipped; specific identification/activity-based; gross profit; revenue and number of invoices to allocate shared service costs to each business segment.

Index

2827

Gross Profit:

% change
RESEARCH: 2016 2015 % change w/o FX (a)
Revenue:
Journal Revenue:
Journal Subscriptions $611,403 $672,218 -9% -6%
Author-Funded Access 25,669 22,388 15% 21%
Licensing, Reprints, Backfiles, and Other 178,542 188,326 -5% 0%
Total Journal Revenue 815,614 882,932 -8% -4%

Books and References:
Print Books 90,586 99,746 -9% -6%
Digital Books 44,788 42,512 5% 9%
Licensing and Other 14,266 15,605 -9% 0%
Total Books and References Revenue 149,640 157,863 -5% -1%

Total Revenue $965,254 $1,040,795 -7% -3%

Cost of Sales (262,693) (275,487)
-5%
-1%

Gross Profit $702,561 $765,308 -8% -4%
Gross Profit Margin 72.8% 73.5%

Direct Expenses (229,666) (245,278) -6% -2%
Amortization of Intangibles (27,546) (28,190) -2% 2%
Restructuring Charges (see Note 6) (5,048) (4,555)

Direct Contribution to Profit $440,301 $487,285 -10% -6%
Direct Contribution Margin 45.6% 46.8%

Shared Services and Administrative Costs:
Distribution and Operation Services (39,348) (44,620) -12% -7%
Technology and Content Management (98,442) (96,486) 2% 5%
Occupancy and Other (29,516) (30,405) -3% 2%

Contribution to Profit $272,995 $315,774 -14% -10%
Contribution Margin 28.3% 30.3%

~~(a) Adjusted to exclude the fiscal year 2016 and 2015 Restructuring Charges~~

~~Revenue:~~

~~Research revenue for fiscal year 2016 decreased~~Gross profit increased 7% to ~~$965.3~~$166.2 million, or 3% excluding the unfavorable impact of foreign exchange. As previously announced, the Company transitioned from issue-based to time-based digital journal subscription agreements for calendar year 2016. The change shifted approximately $37 million of revenue from fiscal year 2016 to the remainder of calendar year 2016 (fiscal year 2017). The change had no impact on free cash flow. The Company made these changes to simplify the contracting and ~~administration of digital journal subscriptions. Excluding the impact of the transition to time-based subscriptions and foreign exchange, Research revenue was flat with the prior year.~~

Journal Subscriptions revenue decreased 6% on a currency neutral basis mainly due the impact of moving to time-based digital journal subscriptions ($37 million) and the trailing effects of the Swets bankruptcy ($3 million). As previously disclosed, Swets Information Services, a global library subscription agent based in Amsterdam, declared bankruptcy in late September 2014. Excluding the impact of transitioning to time-based journal subscription agreements and foreign exchange, Journal Subscription revenue was flat with the prior year. As of April 30, 2016, calendar year 2016 journal subscription renewals were 1% higher than calendar year 2015 billings8%, on a constant currency basis, as compared with ~~approximately 95%~~prior year. The increase is primarily due to the impact of ~~targeted~~higher revenues as described above, partially offset by higher costs of sales due to the incremental impact of the acquisition of Learning House and higher marketing related costs of $8.1 million, due to the legacy Education Services business ~~under contract~~primarily due to increased investments to support revenue growth; and to a lesser extent, higher composition and product development amortization and employment related costs.

Contribution to Profit:

Contribution to profit for the ~~2016 calendar~~year ended April 30, 2019 includes an operating loss from Learning House of $8.0 million. On a constant currency basis, excluding restructuring charges and the impact from Learning House, contribution to profit decreased 8% as compared with prior year. This was due to higher operating expenses, including increased sales related costs, content costs, and, to a lesser extent, increased technology costs. These factors were partially offset by lower administrative costs.

Legacy Education Services Partners and Programs:

As of April 30, 2019, we had 39 university partners and 276 programs under contract.

CORPORATE EXPENSES:

~~Author-Funded~~

Corporate Expenses for the year ended April 30, 2019 decreased 8% to $168.8 million as compared with prior year. On a constant currency basis and excluding restructuring charges, these expenses decreased 1%. This decrease was primarily due to lower employment related costs, including incentive compensation costs, partially offset by higher stock-based compensation expense of $2.3 million and costs associated with strategic planning of $1.4 million.

FISCAL YEAR 2018 AS COMPARED TO FISCAL YEAR 2017 SUMMARY RESULTS

Revenue:

Revenue for the year ended April 30, 2018 increased 5% to $1,796.1 million, or 1% on a constant currency basis as compared with prior year. The increase was mainly driven by an increase in Research revenue due to a full year of revenue from the Atypon acquisition in the year ended April 30, 2018 and growth in Open Access and, to a lesser extent, higher Education Services (OPM) revenue in Solutions. These increases were partially offset by a decline in Publishing revenue, primarily in STM and in Professional and Education Publishing, which ~~represents article publication fees that provide~~reflected market conditions.

See the "Segment Operating Results" below for ~~free access~~additional details on each segment's revenue and contribution to ~~articles, grew $3.3~~profit performance.

Cost of Sales and Gross Profit:

Cost of Sales for the year ended April 30, 2018 increased 6% to $531.0 million, or 3% on a constant currency basis as compared with prior year. The increase was primarily a result of higher revenues and higher royalty costs on Research journals due to title mix and an increase in ~~fiscal~~new titles at a higher royalty rate.

Gross profit margin for the year ~~2016. Licensing, Reprints, Backfiles~~ended April 30, 2018 was 70.4% and ~~Other revenue of $178.5 million was flat~~decreased slightly compared with the prior year on a constant currency ~~basis.~~basis, primarily in our Publishing segment as a result of the decline in revenue.

~~On a currency neutral basis, Print Books declined 6%~~As noted above, in connection with the acquisition of Learning House, we changed our accounting policy for certain advertising and marketing costs incurred by our Education Services business to ~~$90.6~~fulfill performance obligations from contracts with educational institutions. Under the new accounting policy, these costs are included in Cost of Sales whereas they were previously included in Operating and Administrative Expenses on the Consolidated Statements of Income. The amount reclassified for the year ended April 30, 2018 and 2017 was $45.8 million and $40.0 million, respectively. Refer to “Change in ~~fiscal~~Accounting Policy” in Note 2, “Summary of Significant Accounting Policies, Recently Issued, and Recently Adopted Accounting Standards,” for more information on the accounting policy change and Note 4, “Acquisition,” for more information related to the acquisition of Learning House.

Index

Operating and Administrative Expenses:

Operating and administrative expenses for the year ~~2016. Digital Books grew 9%~~ended April 30, 2018 increased 1% to $956.8 million, but decreased 1% on a constant currency ~~neutral~~ basis ~~which was mainly driven by a single $4 million digital book sale~~as compared with prior year due to the following:

lower technology costs in the current ~~year. Licensing~~year of $18 million associated with our ERP implementation and ~~Other revenue of $14.3 million was flat with~~other reductions in outsourcing and system development consulting costs;

a one-time pension settlement charge in the prior year related to changes in our retiree and long-term disability plans of $9 million; and

savings from operational excellence initiatives and restructuring activities.

The factors were partially offset by:

one-time benefits in the prior year related to the changes in our retiree and long-term disability plans of $4 million and a life insurance recovery of $2 million;

a full year of costs in the year ended April 30, 2018 associated with the Atypon acquisition, which resulted in an incremental impact of $9 million;

an increase in strategy consultation costs in the current year of $7 million; and

an impairment charge in the current year related to one of our Publishing brands of $4 million.

Restructuring and Related Charges:

Beginning in the year ended April 30, 2013, we initiated a program (the “Restructuring and Reinvestment Program”) to restructure and realign its cost base with current and anticipated future market conditions. We are targeting a majority of the cost savings achieved to improve margins and earnings, while the remainder will be reinvested in high-growth digital business opportunities.

In the years ended April 30, 2018 and 2017, we recorded pre-tax restructuring charges of $29 million and $13 million, respectively, related to this program. These charges are reflected in Restructuring and Related Charges on the Consolidated Statements of Income and summarized in the following table:

	2018			2017
Charges by Segment:
Research	$	5,257		$	1,949
Publishing		6,443			1,596
Solutions		3,695			1,787
Corporate Expenses		13,171			8,023
Total Restructuring and Related Charges	$	28,566		$	13,355

Charges (Credits) by Activity:
Severance	$	27,213		$	8,386
Process reengineering consulting		1,815			148
Other activities		(462	)		4,821
Total Restructuring and Related Charges	$	28,566		$	13,355

The credits in Other Activities in 2018 mainly reflect changes in estimates for previously accrued restructuring charges related to facility lease reserves. Other Activities for the year ended April 30, 2017, reflect facility relocation and lease impairment related costs.

Amortization of Intangibles:

Amortization of intangibles for the year ended April 30, 2018 declined 3% to $48 million, or 5% on a constant currency ~~neutral basis.~~

~~Revenue by Region is as follows:~~

% of % change
2016 2015 Revenue w/o FX
Revenue by Region:
Americas $370,111 $398,573 38% -6%
EMEA 540,562 585,693 56% -3%
Asia-Pacific 54,581 56,529 6% 7%
Total Revenue $965,254 $1,040,795 100% -3%

~~Cost of Sales:~~

~~Cost of Sales for fiscal year 2016 decreased 5% to $262.7 million, or 1% excluding the favorable impact of foreign exchange.~~basis compared with prior year. The decrease was ~~mainly driven by lower royalty costs~~a result of the completion of amortization of certain acquired intangible assets.

Interest Expense:

Interest expense for the year ended April 30, 2018 decreased $4 million to $13 million on a reported and constant currency basis. This decrease was due to ~~the transition to time-based digital journal subscription agreements ($5 million) and cost savings from outsourcing and procurement initiatives and~~ lower ~~cost digital products ($4 million),~~average debt balances outstanding, partially offset by a higher ~~royalty rates on society owned journals ($5 million) and higher print inventory obsolescence provisions ($1 million)~~average effective borrowing rate.

~~Gross Profit:~~Foreign Exchange Transaction (Losses) Gains:

~~Gross Profit Margin decreased 70 basis points~~We reported foreign exchange transaction losses of $13 million for the year ended April 30, 2018 compared to ~~72.8%~~gains of $0.4 million in ~~fiscal~~the prior year. The losses in the year ~~2016 mainly~~ended April 30, 2018 were primarily due to the impact of ~~transitioning~~the change in average foreign exchange rates as compared to ~~time-based digital~~the U.S. dollar on our intercompany and third-party accounts receivable and payable balances.

Index

Provision for Income Taxes:

The following table summarizes the effective tax rate for the years ended April 30, 2018 and 2017:

	2018		2017
Effective tax rate as reported		10.2%		40.5%
Estimated net impact in the year ended April 30, 2018 of non-recurring items from Tax Act		11.7		—
Impact of unfavorable German court decision in the year ended April 30, 2017		—		(25.7)
Impact of reduction in U.K. statutory rate on deferred tax balances in the year ended April 30, 2017		—		1.3
Effective tax rate excluding the impact of non-recurring items from the Tax Act in the year ended April 30, 2018 and the unfavorable German court decision and U.K. tax rate reduction in the year ended April 30, 2017		21.9%		16.1%

On December 22, 2017, the U.S. government enacted comprehensive Federal tax legislation originally known as the Tax Cuts and Jobs Act of 2017 (the "Tax Act"). In December 2017, the SEC staff issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act ("SAB 118"), which allowed us to record provisional amounts related to the effect of the Tax Act during a measurement period not to extend beyond one year of the enactment date. As the Tax Act was passed in December 2017, and ongoing guidance and accounting interpretation were expected over the 12 months following enactment, we considered the accounting of the transition tax, deferred tax re-measurements, and other items to be provisional due to the forthcoming guidance and our ongoing analysis of final data and tax positions.

The effective tax rate was lower in the year ended April 30, 2018 as compared with the year ended April 30, 2017 due to the net tax benefit from non-recurring items in the Tax Act and the effect of the German Tax litigation in the year ended April 30, 2017 as described below. Estimated non-recurring items in the Tax Act reduced our income tax expense by approximately $25 million ($0.43/share) or a reduction in our effective tax rate of 11.7 percentage points for the year ended April 30, 2018. Excluding the effect of the Tax Act, the rate was 21.9% for the year ended April 30, 2018.

The rate excluding the benefit from the non-recurring items in the Tax Act was lower than the U.S. statutory rate for the year ended April 30, 2018, primarily due to lower rates applicable to non-U.S. earnings.

German Tax Litigation Expense: In the year ended April 30, 2017, the German Federal Fiscal Court affirmed a lower court decision disallowing deductions related to a stepped-up basis in certain assets. As a result, we incurred an income tax charge of approximately $49 million ($0.85 per share).

Deferred Tax Benefit from U.K. Statutory Tax Rate Change: In the year ended April 30, 2016, the U.K. reduced its statutory rate to 19% beginning April 1, 2017 and 18% beginning April 1, 2020, and in the year ended April 30, 2017, the U.K. further reduced its statutory rate beginning on April 1, 2020, from 18% to 17%. This resulted in a non-cash deferred tax benefit from the re-measurement of our applicable U.K. deferred tax balances of $6 million ($0.10 per share) in the year ended April 30, 2016 and $3 million ($0.04 per share) in the year ended April 30, 2017.

The Tax Act

The information set forth in Note 12, "Income Taxes” of the Notes to Consolidated Financial Statements under the caption "The Tax Act," is incorporated herein by reference and further describes the impact of the Tax Act.

EPS:

EPS for the year ended April 30, 2018 was $3.32 per share compared with $1.95 per share in the prior year. EPS results included the following items, which impacted comparability:

	2018			2017
GAAP EPS	$	3.32		$	1.95
Adjustments:
Restructuring and related charges		0.39			0.15
Foreign exchange losses on intercompany transactions		0.15			0.01
Estimated impact of the Tax Act		(0.43	)		—
Pension settlement		—			0.09
Unfavorable tax decisions		—			0.85
Deferred income tax benefit on U.K. tax rate change		—			(0.04	)
Non-GAAP Adjusted EPS	$	3.43		$	3.01

Index

Excluding the impact of the items included above, Adjusted EPS for the year ended April 30, 2018 increased 14% to $3.43 per share compared with $3.01 per share in the prior year. On a constant currency basis, Adjusted EPS increased 3%.

SEGMENT OPERATING RESULTS:

	2018			2017			% Change			% Change w/o FX (b)
RESEARCH:
Revenue:
Journal Subscriptions	$	677,685		$	639,720			6	%		—
Open Access		41,997			30,633			37	%		34	%
Licensing, Reprints, Backfiles, and Other		181,806			164,070			11	%		8	%
Total Journal Revenue	$	901,488		$	834,423			8	%		3	%

Publishing Technology Services (Atypon)		32,907			19,066			73	%		73	%

Total Research Revenue	$	934,395		$	853,489			9	%		4	%

Cost of Sales		247,654			219,773			13	%		8	%

Gross Profit	$	686,741		$	633,716			8	%		3	%
Gross Profit Margin		73.5	%		74.3	%

Operating Expenses (a)		383,329			354,986			8	%		6	%
Amortization of Intangibles		26,829			26,133			3	%		—
Restructuring Charges (See Note 7)		5,257			1,949

Contribution to Profit	$	271,326		$	250,648			8	%		(1	)%
Contribution Margin		29.0	%		29.4	%

(a)

Due to the retrospective adoption of ASU 2017-07, total net benefits related to defined benefit and other post-employment benefit plans were reclassified from Operating and Administrative Expenses to Interest and Other Income (Expense). The amounts for the years ended April 30, 2018 and 2017 for the Research segment were $4.2 million and $1.6 million, respectively. Refer to Note 2, "Summary of Significant Accounting Policies, Recently Issued, and Recently Adopted Accounting Standards," for more information.

(b) Adjusted to exclude FX impact and Restructuring Charges

Revenue:

Research revenue increased 9% to $934.4 million, or 4% on a constant currency basis as compared with prior year. The increase was primarily due to:

a full year of revenue from Atypon, which was acquired in September 2016, of which $14 million was the incremental impact;

Open Access growth driven by the strong performance of existing titles and, to a lesser extent, new title launches; and

other Journal revenue increases, particularly in reprints, backfiles and the licensing of intellectual content.

As of April 30, 2018, calendar year 2018 journal subscription ~~agreements.~~renewals were 2% higher than calendar year 2017 on a constant currency basis with approximately 97% of targeted business under contract.

~~Direct Expenses and Amortization:~~Gross Profit:

~~Direct Expenses for fiscal year 2016 decreased 6%~~Gross Profit increased 8% to ~~$229.7~~$686.7 million, or 2%3% on a constant currency basis as compared with prior year. The increase was driven by higher revenues. Gross profit margin declined by 80 basis points due primarily to higher journal royalty costs associated with title mix and an increase in new titles at higher royalty rates. We anticipate that we will continue to experience gross margin pressure due to higher journal royalty rates in the year ended April 30, 2019. To offset this gross margin pressure, we will continue to pursue additional operations efficiencies.

Index

Contribution to Profit:

Contribution to Profit increased 8% to $271.3 million as compared with prior year. On a constant currency basis and excluding restructuring charges, contribution to profit decreased 1% as compared with prior year as the ~~favorable~~increase in gross profit was offset by higher operating expenses.

The increase in operating expenses was primarily due to:

a full year of costs in the year ended April 30, 2018 from Atypon which resulted in an incremental impact of ~~foreign exchange.~~$9 million;

higher employment-related costs of $5 million, which included higher incentive compensation from the achievement of certain financial goals and targets;

higher content and editorial costs of $3 million; and

an increase in product technology costs of $5 million.

These factors were partially offset by savings from operational excellence initiatives and restructuring activities.

Society Partnerships

For calendar year 2018, 15 new society contracts were signed, with combined annual revenue of approximately $14 million, and 10 society contracts were not renewed with combined annual revenue of approximately $3 million.

PUBLISHING:	2018			2017			% Change			% Change w/o FX (b)
Revenue:
STM and Professional Publishing	$	287,315		$	291,255			(1	)%		(3	)%
Education Publishing		187,178			196,343			(5	)%		(6	)%
Courseware (WileyPLUS)		59,475			62,348			(5	)%		(5	)%
Test Preparation and Certification		35,534			35,609			—			—
Licensing, Distribution, Advertising, and Other		48,146			47,894			1	%		(2	)%

Total Publishing Revenue	$	617,648		$	633,449			(2	)%		(4	)%

Cost of Sales		194,900			194,837			—			(1	)%

Gross Profit	$	422,748		$	438,612			(4	)%		(5	)%
Gross Profit Margin		68.4	%		69.2	%

Operating Expenses (a)		282,958			302,682			(7	)%		(7	)%
Amortization of Intangibles		8,108			9,803			(17	)%		(17	)%
Restructuring Charges (see Note 7)		6,443			1,596
Publishing brand impairment charge		3,600			—

Contribution to Profit	$	121,639		$	124,531			(2	)%		1	%
Contribution Margin		19.7	%		19.7	%

(a)

Due to the retrospective adoption of ASU 2017-07, total net benefits related to defined benefit and other post-employment benefit plans were reclassified from Operating and Administrative Expenses to Interest and Other Income (Expense). The amounts for the years ended April 30, 2018 and 2017 for the Publishing segment were $2.3 million and $1.2 million, respectively. Refer to Note 2, "Summary of Significant Accounting Policies, Recently Issued, and Recently Adopted Accounting Standards," for more information.

(b) Adjusted in the years ended April 30, 2018 and 2017 to exclude FX impact and Restructuring Charges, and in the year ended April 30, 2018 also excludes a Publishing brand impairment charge.

Revenue:

Publishing revenue decreased 2% to $617.6 million, or 4% on a constant currency basis as compared with prior year. The decline was driven by lower print book revenues, particularly in Education Publishing, due to overall softness in the market as well as other retail options such as rental and digital. Also contributing to the decline in Publishing revenue was a decline in Courseware (WileyPLUS), primarily due to the timing of revenue recognition associated with multi-semester offerings, which are recognized in periods extending across two semesters.

Index

Gross Profit:

Gross Profit decreased 4% to $422.7 million, or 5% on a constant currency basis as compared with prior year. The decrease was mainly driven by the ~~curtailment of a Company defined benefit pension plan ($3 million) and other restructuring savings and cost containment initiatives ($6 million),~~decline in revenues, partially offset by merit increases ($2 million); higher legal and process reengineering consulting fees ($2 million); and higher accrued incentive compensation ($1 million). Amortization of Intangibles decreased $0.6 million to $27.5 million in fiscal year 2016 mainlylower inventory costs due to ~~the favorable impact of foreign exchange.~~cost savings initiatives.

Contribution to Profit:

Contribution to Profit ~~for fiscal~~decreased 2% to $121.6 million as compared with prior year. On a constant currency basis and excluding restructuring charges and a brand impairment charge in the first quarter of the year ~~2016 decreased 14%~~ended April 30, 2018, contribution to ~~$273.0 million, or 10% excluding the unfavorable impact of foreign exchange and the current and prior year Restructuring Charges. The decrease~~profit increased 1%. This was ~~principally driven by the impact of the transition~~primarily due to ~~time-based journal subscriptions; higher royalty rates on society owned journals; and higher employment costs, partially offset by restructuring and other cost~~lower operating expenses, which were primarily savings from ~~outsourcing~~operational excellence initiatives and ~~procurement initiatives. Contribution Margin was 28.3% compared to 30.3% in the prior year period.~~restructuring activities.

	2018			2017			% Change			% Change w/o FX (b)
SOLUTIONS:
Revenue:
Education Services	$	119,131		$	111,638			7	%		7	%
Professional Assessment		61,094			59,868			2	%		2	%
Corporate Learning		63,835			60,086			6	%		(1	)%

Total Solutions Revenue	$	244,060		$	231,592			5	%		3	%

Cost of Sales (a)		88,462			86,184			3	%		1	%

Gross Profit	$	155,598		$	145,408			7	%		5	%
Gross Profit Margin		63.8	%		62.8	%

Operating Expenses (a)		116,513			115,066			1	%		(1	)%
Amortization of Intangibles		13,291			13,733			(3	)%		(6	)%
Restructuring Charges (see Note 7)		3,695			1,787

Contribution to Profit	$	22,099		$	14,822			49	%		56	%
Contribution Margin		9.1	%		6.4	%

(a)

In connection with the acquisition of Learning House, we changed our accounting policy for certain advertising and marketing costs incurred by our Education Services business to fulfill performance obligations from contracts with educational institutions. Under the new accounting policy, these costs are included in Cost of Sales whereas they were previously included in Operating and Administrative Expenses on the Consolidated Statements of Income. The impact of this reclassification was an increase to Cost of Sales and a corresponding decrease to Operating and Administrative Expenses of $45.8 million and $40.0 million for the years ended April 30, 2018 and 2017, respectively. This reclassification had no impact on Revenue, net or Contribution to Profit. Refer to “Change in Accounting Policy” in Note 2, “Summary of Significant Accounting Policies, Recently Issued, and Recently Adopted Accounting Standards,” for more information on the accounting policy change and Note 4, “Acquisition,” for more information related to the acquisition of Learning House.

~~Society Partnerships~~

·	~~6 new society journals were signed with combined annual revenue of approximately $12 million~~

·	~~87 renewals/extensions were signed with approximately $54 million in combined annual revenue~~

·	~~18 journals were not renewed with combined annual revenue of approximately $11 million~~

~~Journal Impact Index~~

In July 2015, Wiley announced a strong performance in the number of its journal titles indexed in the Thomson Reuters® 2014 Journal Citation Reports (JCR). A total of 1,200 Wiley titles were indexed, with 24 Wiley journals achieving the top rank in their respective categories and 240 achieving a top 10 ranking. The Thomson Reuters index is a barometer of journal influence across the research community.

% change
PROFFESIONAL DEVELOPMENT (PD): 2016 2015 % change w/o FX (a)
Revenue:
Knowledge Services:
Print Books $192,149 $206,086 -7% -4%
Digital Books 47,089 49,672 -5% -3%
Online Test Preparation and Certification 28,169 22,119 27% 27%
Other Knowledge Service Revenue 28,813 30,094 -4% -2%
296,220 307,971 -4% -2%
Talent Solutions:
Assessment $57,369 $57,035 1% 1%
Corporate Learning 50,692 42,017 21% 31%
108,061 99,052 9% 14%

Total Revenue $404,281 $407,023 -1% 2%

Cost of Sales (103,652) (114,014) -9% -7%

Gross Profit $300,629 $293,009 3% 6%
Gross Profit Margin 74.4% 72.0%

Direct Expenses (118,638) (131,969) -10% -7%
Amortization of Intangibles (12,691) (13,498) -6% -3%
Restructuring Charges (see Note 6) (2,277) (4,385)

Direct Contribution to Profit $167,023 $143,157 17% 17%
Direct Contribution Margin 41.3% 35.2%

Shared Services and Administrative Costs:
Distribution and Operation Services (28,364) (30,838) -8% -5%
Technology and Content Management (40,951) (48,002) -15% -13%
Occupancy and Other (23,160) (26,180) -12% -8%

Contribution to Profit $74,548 $38,137 95% 84%
Contribution Margin 18.4% 9.4%

~~(a)~~(b) Adjusted to exclude ~~the fiscal year 2016~~FX impact and ~~2015~~ Restructuring ~~Charges~~Charges.

Revenue:

PDSolutions revenue ~~for fiscal year 2016 decreased 1%~~increased 5% to ~~$404.3~~$244.1 million, ~~but increased 2% excluding the unfavorable impact of foreign exchange. The increase~~or 3%, on a constant currency ~~neutral~~ basis ~~was~~as compared with prior year, mainly driven by growth in ~~Talent Solutions, and Online Test Preparation and Certification~~Education Services tuition revenue growth due to higher enrollments, partially offset by a decline in ~~Book Revenue.~~

Knowledge Services revenue decreased 4% to $296.2 million, or 2% excluding the unfavorable impact of foreign exchange. The decrease was mainly driven by Print ($9 million) and Digital ($2 million) Books and Other Knowledge Services Revenue ($1 million), partially offset by growth in Online Test Preparation and Certification ($6 million). Print and Digital Books results reflected continued retail softness, particularly in EMEA and Asia, partially offset by lower sales return provisions. The increase in Online Test Preparation and Certification was driven by new editions of GMAT titles and growth in proprietary sales of the Company’s CPA, CFA and CMA online certification products. The decline in Other Knowledge Services was driven by lower revenue from the licensing of intellectual content.

~~Talent Solutions revenue increased 9% to $108.1 million, or 14% excluding the unfavorable impact of foreign exchange. Revenue growth in~~ Corporate Learning ~~came from new customers, including the expansion into the U.S. market,~~(CrossKnowledge) where French government funding slowed for unemployment initiatives and renewals for existing customers, with France, U.S. and Central and South American markets driving the results. Assessment revenue grew 1% in fiscal year 2016 and was driven by higher post-hire assessment revenue, partially offset by an expected decline in pre-hire assessment revenue following portfolio actions to optimize longer-term profitable growth.

blended learning programs.

~~Revenue by Region is as follows:~~

% of % change
2016 2015 Revenue w/o FX
Revenue by Region:
Americas $291,258 $288,882 72% 1%
EMEA 92,106 95,613 23% 4%
Asia-Pacific 20,917 22,528 5% 0%
Total Revenue $404,281 $407,023 100% 2%

~~Cost of Sales:~~

Cost of Sales for fiscal year 2016 decreased 9% to $103.7 million, or 7% excluding the favorable impact of foreign exchange. The decrease was mainly driven by lower cost digital products ($6 million); lower royalty and print inventory obsolescence provisions ($4 million); and lower sales volume ($2 million), partially offset by growth in the Corporate Learning business ($4 million).

Gross Profit:

Gross Profit ~~Margin~~ increased ~~by 240 basis points~~7% to ~~74.4% in fiscal year 2016. The improvement was mainly driven by higher margin digital revenue (170 bps) and lower royalty and print inventory obsolescence provisions (70 bps).~~

~~Direct Expenses and Amortization:~~

~~Direct Expenses for fiscal year 2016 decreased 10% to $118.6~~$155.6 million, or ~~7% excluding~~5% on a constant currency basis as compared with prior year. The increase primarily reflected the ~~favorable~~ impact of ~~foreign exchange. The reduction~~higher revenue.

Index

A 100-basis-point improvement in gross profit margin was ~~driven by restructuring~~due to higher revenues and ~~other cost savings ($18 million) and~~increased efficiency in recruiting Education Services students, which resulted in lower process reengineering consulting fees ($1 million), partially offset by Corporate Learning business growth ($8 million); higher accrued variable incentive compensation ($2 million); and merit increases ($1 million). Amortization of Intangibles decreased $0.8 million to $12.7 million in fiscal year 2016.

recruitment costs.

Contribution to Profit:

Contribution to Profit ~~for fiscal year 2016 was $74.5~~increased 49% to $22.1 million as compared ~~to $38.1 million in the~~with prior year. ~~The improvement was mainly driven by~~On a constant currency basis and excluding restructuring ~~and other cost savings, gross margin improvement and reduced technology investment. Contribution Margin for fiscal year 2016~~charges, contribution to profit increased ~~from 9.4% to 18.4%.~~

~~Test Preparation Partnership~~

Wiley announced a partnership with ACT, the nation’s leader in college and career readiness, to enhance both organizations’ test prep product offerings and take over as the exclusive publisher for ACT’s The Real ACT® Prep Guide beginning in January 2016. Maker of the ACT test and ACT WorkKeys®56%, among other respected assessment programs, ACT (American College Test) is committed to providing insights that help individuals better prepare for success throughout their lives—from education through career.

~~Junior Achievement Program~~

CrossKnowledge and Junior Achievement USA® announced a joint partnership that will bring digital learning solutions to thousands of students and educators. As part of the agreement, CrossKnowledge has donated the use of its Learning Management System (LMS) to Junior Achievement USA (JA) for the next five years (starting in 2016) through the CrossKnowledge Foundation. This in-kind contribution is one of the largest of its kind in the history of JA. By 2020, we expect that CrossKnowledge programs will reach 1.6 million JA users.

~~CrossKnowledge/L’Oréal platform:~~

CrossKnowledge announced the creation of MySalon-Edu.com, an online platform that focuses on salon education, in conjunction with L’Oréal group. The e-cademy massive online open course (MOOC) was created for professional hairdressers and beauticians.

% change
EDUCATION: 2016 2015 % change w/o FX (a)
Revenue:
Books:
Print Textbooks $107,636 $144,500 -26% -20%
Digital Books 34,462 34,086 1% 5%
142,098 178,586 -20% -15%

Custom Materials 51,842 50,659 2% 2%

Course Workflow Solutions (WileyPLUS) 58,551 54,200 8% 10%

Online Program Management (Deltak) 96,469 81,593 18% 18%

Other Education Revenue 8,542 9,584 -11% -11%

Total Revenue $357,502 $374,622 -5% -2%

Cost of Sales (99,573) (110,182) -10% -8%

Gross Profit $257,929 $264,440 -2% 0%
Gross Profit Margin 72.1% 70.6%

Direct Expenses (128,821) (125,613) 3% 5%
Amortization of Intangibles (9,527) (9,527) 0% 0%
Restructuring Charges (see Note 6) (1,206) (1,571) 0%

Direct Contribution to Profit $118,375 $127,729 -7% -3%
Direct Contribution Margin 33.1% 34.1%

Shared Services and Administrative Costs:
Distribution and Operation Services (15,207) (12,863) 18% 24%
Technology and Content Management (51,612) (54,272) -5% -3%
Occupancy and Other (15,688) (13,950) 12% 15%

Contribution to Profit $35,868 $46,644 -23% -18%
Contribution Margin 10.0% 12.5%

~~(a)~~

~~Adjusted to exclude the fiscal year 2016 and 2015 Restructuring Charges~~

~~Revenue:~~

~~Education revenue for fiscal year 2016 decreased 5% to $357.5 million, or 2% excluding the unfavorable impact of foreign exchange. Print Textbooks decreased 20% to $107.6 million~~primarily due to higher returns; retail channel consolidation; lower enrollments; increased market penetration by rental; and a shift to lower priced alternatives such as Digital Books, Custom Materials and Course Workflow Solutions (WileyPLUS). Digital books increased 5% to $34.5 million, Custom Materials increased 2% to $51.8 million, and Course Workflow Solutions (WileyPLUS) increased 10% to $58.6 million on a currency neutral basis due to new and digital formats. Other Education Revenue decreased 11% to $8.5 million principally due to lower revenue from the ~~licensing of intellectual content.~~

~~Revenue from Online Program Management (Deltak) grew 18% to $96.5 million reflecting higher enrollments; an increase~~improvement in institutional partners and programs generating revenue; and growth in fee-for-service agreements. As of April 30, 2016, Deltak had 38 partners and 226 degree programs under contract, compared to 38 partners and 200 programs as of April 30, 2015. As of April 30, 2016, 186 of Deltak’s 226 degree programs were revenue generating.

~~Revenue by Region is as follows:~~

% of % change
2016 2015 Revenue w/o FX
Revenue by Region:
Americas $295,296 $300,174 83% -1%
EMEA 15,764 19,265 4% -15%
Asia-Pacific 46,442 55,183 13% -4%
Total Revenue $357,502 $374,622 100% -2%

~~Cost of Sales:~~

Cost of Sales for fiscal year 2016 decreased 10% to $99.6 million, or 8% excluding the favorable impact of foreign exchange. The decrease was mainly driven by lower sales volume ($7 million); savings from procurement initiatives and lower cost digital products ($3 million); and lower composition costs ($3 million),gross profit partially offset by higher ~~Online Program Management (Deltak) costs due to program growth ($2 million)~~operating expenses, including higher advertising and ~~higher royalty costs due to mix ($2 million).~~

~~Gross Profit:~~

Gross Profit Margin for fiscal year 2016 improved 150 basis points to 72.1% principally due higher margin growth from Online Program Management (Deltak) (80 bps) and lower inventory and composition costs.

~~Direct Expenses and Amortization:~~

~~Direct Expenses increased 3% to $128.8~~marketing expenses of $6 million ~~or 5% excluding the favorable impact of foreign exchange. The increase was mainly driven by student recruitment costs~~ to support new Online Program Management (Deltak) programs ($14 million) and merit increases ($1 million), partially offset by restructuring and other cost savings ($5 million); lower accrued variable incentive compensation ($2 million); and other, mainly lower third-party advertising and promotional expenses ($2 million). Amortization of Intangibles was $9.5 million in fiscal years 2016 and 2015.sales growth.

Education Services Partners and Programs

~~Contribution to Profit:~~

Contribution to Profit for fiscal year 2016 decreased 23% to $35.9 million, or 18% excluding the current and prior year Restructuring Charges and the unfavorable impact of foreign exchange. The decline was mainly driven by lower print book revenue; investment in Online Program Management (Deltak) programs; and higher digital fulfillment and marketing support costs, partially offset by restructuring and other cost savings and reduced technology investments. Contribution Margin was 10.0% compared to 12.5% in the prior year.

~~SHARED SERVICES AND ADMINISTRATIVE COSTS:~~

As part of Wiley’s Restructuring and Reinvestment Program, the Company consolidated its marketing services functions into a single global shared service function. This newly centralized service group enables significant cost reduction opportunities, including efficiencies gained from standardized technology and centralized management. The costs of these functions were previously reported as direct operating expenses in each business segment but are now reported within Shared Services and Administrative Costs and are allocated to each business segment. As a result, prior year amounts have been restated to reflect these same reporting methodologies. The Company uses occupied square footage of space; number of employees; units shipped; specific identification/activity-based; gross profit; revenue and number of invoices to allocate shared service costs to each business segment.

% Change
Dollars in thousands 2016 2015 % Change w/o FX (a)
Distribution and Operation Services $83,109 $89,024 -7% -3%
Technology and Content Management 257,822 244,850 5% 8%
Finance 49,798 52,796 -6% -2%
Other Administration 126,777 115,469 10% 13%
Restructuring Charges (see Note 6) 20,080 18,293
Total $537,586 $520,432 3% 6%

~~(a) Adjusted to exclude the fiscal year 2016 and 2015 Restructuring Charges~~

Shared Services and Administrative Costs for fiscal year 2016 increased 3% to $537.6 million, or 6% on a currency neutral basis and excluding the current and prior year Restructuring Charges. Lower Distribution and Operation Services costs mainly reflect lower journal shipping and handling costs ($2 million). Technology and Content Management increased mainly due to incremental investments in the Company’s Enterprise Resource Planning and related systems ($13 million); higher license, maintenance and hosting costs ($11 million); investments in Corporate Learning (CrossKnowledge) and Online Program Management (Deltak) programs ($3 million); and merit increases ($2 million), partially offset by restructuring and other cost savings ($14 million). Finance costs decreased 2% on a currency neutral basis mainly due to restructuring and other cost savings ($1 million). Other Administration costs increased mainly due to higher employment costs ($8 million); higher legal costs ($3 million); Online Program Management (Deltak) program growth ($2 million); and process reengineering consulting costs ($2 million).

~~U.S. Distribution Outsourcing:~~

As part of the Company’s restructuring initiatives, in November 2015, Wiley entered into an agreement to outsource its US-based print textbook fulfillment operations to Cengage Learning, with the aim of creating a more efficient and variable cost model. As of April 30, 2016 these operations were fully transitioned to Cengage.

~~LIQUIDITY AND CAPITAL RESOURCES:~~

The Company’s Cash and Cash Equivalents balance was $363.8 million at the end of fiscal year 2016, compared with $457.4 million a year earlier. Cash Provided by Operating Activities in fiscal year 2016 decreased $5.2 million from fiscal year 2015 to $350.0 million principally due to the timing of vendor and royalty payments ($28 million); higher employee retirement plan contributions ($6 million); and higher royalty advance payments due to higher royalty rates on society owned journals and new society contracts ($5 million), partially offset by lower annual incentive compensation payments ($15 million); lower income tax payments and deposits ($11 million); lower payments related to the Company’s restructuring programs ($2 million); and timing of journal subscription cash collections. The change in deferred revenue was driven by lower non-cash earnings mainly due to the impact of transitioning to time-based digital journal subscription agreements; foreign exchange; and timing of cash collections.

Cash Used for Investing Activities in fiscal year 2016 was $151.4 million compared to $279.7 million in the prior year. Fiscal year 2015 includes the acquisition of CrossKnowledge (Corporate Learning) for approximately $166 million in cash, net of cash acquired. The acquisition was funded through the use of the existing credit facilities and available cash and did not have an impact on the Company’s ability to meet other operating, investing and financing needs. Acquisitions in fiscal year 2016 mainly reflect the acquisition of publication rights for society journals. During fiscal year 2015, the Company received $1.1 million of escrow proceeds from the sale of certain consumer publishing assets in fiscal year 2013 which represented the final amounts due to the Company from the sale of those assets.

Composition spending was $37.3 million in fiscal year 2016 compared to $39.4 million in the prior year. Cash used for technology, property and equipment was $93.7 million in fiscal year 2016 compared to $69.1 million in the prior year. The increase mainly reflects incremental investment in the Company’s Enterprise Resource Planning and related systems ($18 million) and other technology infrastructure.

Cash Used for Financing Activities was $285.7 million in fiscal year 2016 compared to $61.0 million in the prior year. During fiscal year 2016, net debt repayments were $145.1 million compared to borrowings of $47.7 million in the prior year. The Company’s net debt (debt less cash and cash equivalents) decreased $51.4 million from the prior year to $241.2 million.

On March 1, 2016, the Company amended and extended its existing revolving credit agreement (“RCA”) with a syndicated bank group led by Bank of America. The previous RCA consisted of a $940 million senior revolving credit facility due on November 2, 2016. The new agreement consists of a $1.1 billion five-year senior revolving credit facility payable March 1, 2021. The proceeds of the amended facility will be used for general corporate purposes including seasonal operating cash requirements investments in technology systems and new businesses, and strategic acquisitions. Under the agreement, which can be drawn in multiple currencies, the Company has the option of borrowing at the following floating interest rates: (i) at a rate based on the London Interbank Offered Rate (“LIBOR”) plus an applicable margin ranging from 0.98% to 1.50%, depending on the Company’s consolidated leverage ratio, as defined, or (ii) for U.S. dollar-denominated loans only, at the lender’s base rate plus an applicable margin ranging from zero to 0.45%, depending on the Company’s consolidated leverage ratio. The lender’s base rate is defined as the highest of (i) the U.S. federal funds effective rate plus a 0.50% margin, (ii) the Eurocurrency rate, as defined, plus a 1.00% margin, or (iii) the Bank of America prime lending rate. In addition, the Company pays a facility fee ranging from 0.15% to 0.25% depending on the Company’s consolidated leverage ratio. The Company also has the option to request an additional credit limit increase of up to $350 million in minimum increments of $50 million, subject to the approval of the lenders. The credit agreement contains certain restrictive covenants related to the Company’s consolidated leverage ratio and interest coverage ratio, which the Company was in compliance with as of April 30, 2016. Due to the fact that there are no principal payments due until the end of the agreement in fiscal year 2021, the Company has classified its entire debt obligation related to this facility as long-term which was approximately $605.0 million as of April 30, 2016. As of April 30, 2015, the entire debt obligation related to the previous facility of approximately $750.1 was classified as long-term. As part of the amendment, the Company paid $3.4 million in debt financing costs in fiscal year 2016 which were capitalized and included in the Other Assets line item in the Consolidated Statements of Financial Position. The total notional amount of the fixed interest rate swap agreements associated with the Company’s revolving credit facility was $500.0 million as of April 30, 2016.

On August 6, 2015, the Company amended its December 22, 2014 364-day U.S. dollar revolving credit facility reinstated every 30 days with Santander Bank, N.A. by increasing the facility to $100 million from $50 million. The additional $50 million was drawn during August and used to repay a portion of the senior revolving credit facility. The facility was equally ranked with the Company’s previous agreement with Bank of America - Merrill Lynch and The Royal Bank of Scotland plc, and TD Bank, N.A. The facility was fully paid on April 29, 2016. This facility’s termination date was May 23, 2016 and was not renewed.

During fiscal year 2016, the Company repurchased 1,432,284 shares of common stock at an average price of $48.86 compared to 1,082,502 shares at an average price of $57.26 in the prior year. In fiscal year 2016, the Company increased its quarterly dividend to shareholders by 3% to $0.30 per share versus $0.29 per share in the prior year. Lower proceeds from the exercise of stock options mainly reflected lower stock option exercises in fiscal year 2016 compared to the prior year.

The Company’s operating cash flow is affected by the seasonality and timing of receipts from its Research journal subscriptions and its Education business. Cash receipts for calendar year Research subscription journals occur primarily from December through April. Reference is made to the Customer Credit Risk section, which follows, for a description of the impact on the Company as it relates to independent journal agents’ financial position and liquidity. Sales primarily in the U.S. higher education market tend to be concentrated in June through August, and again in November through January. Due to this seasonality, the Company normally requires increased funds for working capital from May through October.

Cash and Cash Equivalents held outside the U.S. were approximately $339 million as of April 30, 2016. The balances in equivalent U.S. dollars were comprised primarily of pound sterling ($222 million), euros ($46 million), Singapore dollars ($19 million), U.S. dollars ($18 million), Australian dollars ($14 million), and other ($20 million). Maintenance of these cash and cash equivalent balances outside the U.S. does not have a material impact on the liquidity or capital resources of the Company’s global, including U.S., operations. Cash and cash equivalent balances outside the U.S. may be subject to U.S. taxation, if repatriated. The Company intends to reinvest cash outside the U.S. except in instances where repatriating such earnings would result in no additional income tax. Accordingly, the Company has not accrued for U.S. income tax on the repatriation of non-U.S. earnings. It is not practical to determine the U.S. income tax liability that would be payable if such cash and cash equivalents were not indefinitely reinvested.

As of April 30, ~~2016,~~2018, we had 34 university partners and 239 programs under contract.

CORPORATE EXPENSES:

Corporate Expenses were $183.6 million and $178.5 million in the ~~Company had~~years ended April 30, 2018 and 2017, respectively. On a constant currency basis and excluding restructuring charges and a one-time pension settlement charge in the prior year, these expenses decreased 2%, primarily due to the following:

lower technology costs of approximately ~~$605~~$10 million driven by reduced spending on our ERP system and other reductions in depreciation, outsourcing, and systems development consulting costs; and

savings from operational excellence initiatives and restructuring activities;

partially offset by:

strategy consultation costs in the current year of $7.1 million; and

one-time benefits in the prior year related to changes in our retiree and long-term disability plans of $4.2 million and a life insurance recovery of $2 million.

FISCAL YEAR 2020 OUTLOOK

(amounts in millions, except Adjusted EPS)

We are currently in the process of realigning our existing reporting structure to our new strategic focus areas. This realignment will include the following changes to our segment reporting structure: (1) Education and Professional Publishing, which now consists of the current Publishing segment plus our Corporate Learning and Professional Assessment businesses, and (2) Education Services, which will now include our OPM businesses, including Learning House. Our Research segment will be renamed Research Publishing and Platforms and will continue to include our current Research and Atypon businesses.

Item	Fiscal Year 2019 Actual		Fiscal Year 2020 Outlook Constant Currency
Revenue	$	1,800	$	1,840 - 1,870
Research Publishing & Platforms		937		950-960
Education & Professional Publishing		705		690-700
Education Services		158		200-210
Adjusted EBITDA	$	388	$	360-375
Adjusted EPS	$	2.96	$	2.45-2.55
Free Cash Flow	$	149	$	210-230

Fiscal year 2020 Adjusted EPS is expected to decline primarily due to non-cash amortization expense related to acquisitions and increased investment to grow and optimize Research and Education Services.

Forward-looking metrics include impact from Learning House and Knewton acquisitions.

Fiscal year 2020 results exclude the impact of the first quarter of fiscal year 2020 restructuring charges related to our multi-year Business Optimization Program. We anticipate approximately $15 million to $20 million of ~~debt outstanding~~restructuring charges, of which approximately $10 million to $15 million to be severance-related costs and the remainder to be related to non-cash costs. We estimate that this multi-year program will potentially yield approximately ~~$602~~$30 million in operating savings over time, with half of ~~unused borrowing capacity under its Revolving Credit~~those savings to be realized in fiscal year 2020.

Fiscal year 2020 Outlook reflects fiscal year 2019 average exchange rates.

Index

Adjusted EBITDA:

Below is a reconciliation of GAAP net income to Non-GAAP EBITDA and ~~other facilities. The Company believes~~Adjusted EBITDA:

	Year Ended
	April 30,
	2019
Net Income	$	168,263
Interest expense		16,121
Provision for income taxes		44,689
Depreciation and amortization		161,155
Non-GAAP EBITDA		390,228
Restructuring and related (credits) charges		3,118
Foreign exchange transaction losses		6,016
Interest and other income		(11,100	)
Non-GAAP Adjusted EBITDA	$	388,262

LIQUIDITY AND CAPITAL RESOURCES:

Principal Sources of Liquidity

We believe that ~~its~~our operating cash flow, together with ~~its~~our revolving credit facilities and other available debt financing, will be adequate to meet ~~its~~our operating, investing, and financing needs in the foreseeable future, although there can be no assurance that continued or increased volatility in the global capital and credit markets will not impair ~~its~~our ability to access these markets on terms commercially acceptable. ~~The Company does~~We do not have any off-balance-sheet debt.

As of April 30, 2019, we had cash and cash equivalents of $92.9 million, of which approximately $81.0 million, or 87% was located outside the U.S. Maintenance of these cash and cash equivalent balances outside the U.S. does not have a material impact on the liquidity or capital resources of our operations. Notwithstanding the Tax Act which generally eliminated federal income tax on future cash repatriation to the U.S., cash repatriation may be subject to state and local taxes or withholding or similar taxes. As described in Note 12, “Income Taxes,” of the Notes to Consolidated Financial Statements, since April 30, 2018, we no longer intend to permanently reinvest earnings outside the U.S. We have a $2.0 million liability related to the estimated taxes that would be incurred upon repatriating certain non-U.S. earnings.

As of April 30, 2019, we had $478.8 million of debt outstanding and approximately $623.9 million of unused borrowing capacity under our Revolving Credit and other facilities. Our credit agreement contains certain restrictive covenants related to our consolidated leverage ratio and interest coverage ratio, which we were in compliance with as of April 30, 2019.

On May 30, 2019, we entered into a credit agreement that amended and restated the existing agreement. The credit agreement provides for senior unsecured credit facilities comprised of a (i) five-year revolving credit facility in an aggregate principal amount up to $1.25 billion, and (ii) a five-year term loan A facility consisting of $250 million. The agreement contains certain customary affirmative and negative covenants, including a financial covenant in the form of a consolidated net leverage ratio and consolidated interest coverage ratio. We incurred approximately $4.0 million of costs related to this agreement.

Contractual Obligations and Commercial Commitments

A summary of contractual obligations and commercial commitments, excluding unrecognized tax benefits further described in Note 12, “Income Taxes,” of the Notes to the Consolidated Financial Statements, as of April 30, 2019 is as follows:

			Payments Due by Period
	Total		Within Year 1		2–3 Years		4–5 Years		After 5 Years
Total Debt	$	478.8	$	—	$	478.8	$	—	$	—
Interest on Debt ⁽¹⁾		31.9		17.5		14.4		—		—
Non-Cancelable Leases		248.6		30.9		50.5		37.8		129.4
Minimum Royalty Obligations		469.8		101.1		160.1		106.1		102.5
Other Operating Commitments		57.4		36.1		20.8		0.5		—
Total	$	1,286.5	$	185.6	$	724.6	$	144.4	$	231.9

(1)	Interest on Debt includes the effect of our interest rate swap agreements and the estimated future interest payments on our unhedged variable rate debt, assuming that the interest rates as of April 30, 2019 remain constant until the maturity of the debt.

Index

3735

Analysis of Historical Cash Flow

The following table shows the changes in our Consolidated Statements of Cash Flows for the years ended April 30, 2019, 2018 and 2017.

	Year Ended April 30,
	2019			2018			2017
Net Cash Provided by Operating Activities	$	250,831		$	382,322		$	314,903
Net Cash Used in Investing Activities		(301,502	)		(177,411	)		(243,010	)
Net Cash Used in Financing Activities		(17,595	)		(96,831	)		(346,172	)
Effect of Foreign Currency Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash		(8,443	)		3,661			(31,011	)

Free Cash Flow less Product Development Spending helps assess our ability, over the long term, to create value for our shareholders, as it represents cash available to repay debt, pay common dividends, and fund share repurchases and new acquisitions. Below are the details of Free Cash Flow less Product Development Spending for the years ended April 30, 2019, 2018, and 2017.

Cash flow from operations is seasonally a use of cash in the first half of Wiley’s fiscal year principally due to the timing of collections for annual journal subscriptions, which occurs in the beginning of the second half of our fiscal year.

Free Cash Flow less Product Development Spending:

	Year Ended April 30,
	2019			��	2018			2017
Net Cash Provided by Operating Activities	$	250,831			$	382,322		$	314,903
Less: Additions to Technology, Property and Equipment		(77,167	)			(114,225	)		(105,058	)
Less: Product Development Spending		(24,426	)			(36,503	)		(43,603	)
Free Cash Flow less Product Development Spending	$	149,238			$	231,594		$	166,242

Net Cash Provided by Operating Activities

2019 compared to 2018

Net Cash Provided by Operating Activities in the year ended April 30, 2019 decreased $131.5 million compared to the year ended April 30, 2018 to $250.8 million primarily due to the following factors:

lower net earnings adjusted for non-cash items of $24 million, including Learning House;

the unfavorable net impact on accounts receivable and deferred revenue (contract liabilities) from the delay in billings and subsequent collections of calendar year 2019 journal subscriptions of $57 million;

the net use of cash for other working capital items, including the payment of accounts payable and accrued liabilities of $26 million, primarily due to timing of payments and lower accruals for incentive compensation;

a net use of cash related to employee retirement plan contributions of $13 million, which includes a $10.0 million tax-advantage discretionary contribution to the U.S. Employees' Retirement Plan in fiscal year 2019; and

certain one-time closing costs related to the Learning House acquisition of $10 million.

~~The Company’s~~

Our negative working capital ~~can be negative~~was $379.8 million and $394.3 million as of April 30, 2019, and April 30, 2018, respectively, due to the seasonality of ~~its~~our businesses. The primary driver of the negative working capital is unearned contract liabilities (deferred revenue) related to subscriptions for which cash has been collected in advance. Cash received in advance for subscriptions is used by us for a number of purposes, including acquisitions, debt repayments, funding operations, dividend payments and purchasing treasury shares.

Our change in working capital of $14.6 million was primarily due to the delay in billings and subsequent cash collections for calendar year 2019 subscriptions partly related to our ERP transition. We estimate that approximately $35 million of cash collections for calendar year 2019 journal subscriptions collections were delayed into fiscal year 2020.

The contract liabilities (deferred revenue) will be recognized as income when the products are shipped or made available online to the customers over the term of the subscription. Current liabilities as of April 30, 2019 and as of April 30, 2018 includes $507.4 million and $486.4 million, respectively, primarily related to deferred subscription revenue for which cash was collected in advance.

Index

We expect that our fiscal year 2020 cash flow from operations will benefit from the expected recovery on the timing of journal subscriptions collections. We expect timing related changes in working capital will not be as pronounced as we enter into fiscal 2021. During that time, we expect our cash flow from operations and financial position to continue to provide us with the opportunity and capacity to execute our strategies.

2018 compared to 2017

Net Cash Provided by Operating Activities in the year ended April 30, 2018 increased $67.4 million from the year ended April 30, 2017 to $382.3 million. This was primarily due to:

a $40.7 million favorable impact on accounts payable from the timing of vendor payments;

a $12.1 million favorable impact from lower employee retirement plan contributions; and

a $15.7 million favorable impact on accounts receivable from the timing of customer payments.

The factors above were partially offset by a $15.0 million unfavorable impact from higher taxes paid in the year ended April 30, 2018 as compared with prior year.

Our negative working capital was $394.3 million and $428.1 million as of April 30, 2018, and April 30, 2017, respectively. The primary driver of the negative working capital is unearned deferred revenue related to subscriptions for which cash has been collected in advance. Cash received in advance for subscriptions is used by ~~the Company~~us for a number of purposes, including ~~acquisitions;~~funding operating activities, acquisitions, debt ~~repayments; funding operations;~~repayments, dividend ~~payments;~~payments, and ~~purchasing~~repurchasing treasury shares. The deferred revenue will be recognized as income when the products are shipped or made available online to the customers over the term of the ~~subscription.~~subscription period. Current liabilities as of April 30, ~~2016~~2018 include ~~$426.5~~$486.4 million of such deferred subscription revenue for which cash was collected in advance.

The $33.8 million change in working capital was primarily due to the seasonality of our businesses and the impact from the changes in accounts receivable and accounts payable discussed above. For the year ended April 30, 2019, working capital performance from accounts receivable and accounts payable is expected to be in line with the year ended April 30, 2018.

Net Cash Used in Investing Activities

2019 compared to 2018

Net Cash Used in Investing Activities in the year ended April 30, 2019 was $301.5 million compared to $177.4 million in the prior year. The increase was due to $190.4 million of net cash used to acquire Learning House. This was partially offset by a decrease of $37.1 million due to lower spending for technology, property and equipment in the year ended April 30, 2019 as a result of the May 2018 implementation of our enterprise resource planning system (“ERP”) order to cash release for journal subscriptions and the completion of our headquarters renovations. In addition, a $12.1 million decrease in product development spending, which was primarily due to the adoption of Topic 606 whereby certain costs to fulfill contracts, which were previously included in product development spending are now included in cash flow from operations. As well as a decrease of $17.2 million in cash used for the acquisition of publication rights.

Projected capital spending for Technology, Property and Equipment and ~~Composition~~Product Development Spending for ~~fiscal~~the year ~~2017~~ended April 30, 2020 is forecast to be approximately $115 million and $50 million, respectively. The increase in fiscal year 2017 Technology, Property and Equipment projected spending is mainly driven by investment in new enterprise resource systems to enable future operating efficiency gains and spending to transform the Company’s Hoboken headquarters to enable consolidation and productivity gains.$125 million. Projected spending for author advances, which is classified as an operating activity, ~~for fiscal year 2017~~ is forecast to be approximately ~~$110 million.~~

~~FISCAL YEAR 2015 SUMMARY RESULTS~~

~~Revenue:~~

~~Revenue~~$134 million for ~~fiscal~~the year 2015 increased 3% to $1,822.4 million, or 4% excluding the unfavorable impact of foreign exchange. The increase mainly reflects incremental revenue from the recent acquisitions of CrossKnowledge Group, Ltd. (“CrossKnowledge”) ($42 million) and Profiles International (“Profiles”) ($21 million), growth in Education custom products and workflow solutions ($12 million), Education Services (Deltak) ($11 million), the sale of an individually large journal backfile license ($10 million), journal subscriptions ($7 million), funded access revenue ($5 million), growth in online test preparation ($3 million) and other ($9 million), mainly the licensing of research publication content, partially offset by lower print book revenue in all three businesses ($46 million).

~~Cost of Sales and Gross Profit:~~

Cost of sales for fiscal year 2015 decreased 1% to $499.7 million, but was flat excluding the favorable impact of foreign exchange. Cost savings from outsourcing and procurement initiatives ($10 million), lower print volume ($5 million) and lower cost digital products ($5 million) were partially offset by incremental costs from acquisitions ($8 million), higher royalty rates on society owned journals ($5 million), Education Services (Deltak) program growth ($3 million) and higher journal subscription volume ($3 million).

Gross profit for fiscal year 2015 of 72.6% was 120 basis points higher than prior year due to cost savings from outsourcing and procurement initiatives and growth in digital products (90 basis points) and incremental revenue from higher margin acquisitions (60 basis points), partially offset by higher royalty rates on society owned journals (30 basis points).

~~Operating and Administrative Expenses:~~

Operating and administrative expenses for fiscal year 2015 increased 4% to $1,005.0 million, or 5% excluding the favorable impact of foreign exchange. The increase was mainly driven by incremental operating and administrative expenses from acquisitions ($54 million), higher technology costs related to investments in internal systems and digital platforms ($18 million) including continued development costs related to the Company’s new global Enterprise Resource Planning (“ERP”) system ($6 million), Education Services (Deltak) program growth ($16 million), other employment costs, principally merit ($3 million); the expiration of a real estate tax incentive related to the Hoboken headquarters ($3 million) and higher editorial costs in Research to support business growth ($2 million), partially offset by restructuring and other cost savings ($39 million) and lower accrued incentive compensation ($12 million).

~~Restructuring Charges:~~

In fiscal year 2013, the Company initiated a program (the “Restructuring and Reinvestment Program”) to restructure and realign its cost base with current and anticipated future market conditions. The Company is targeting a majority of the cost savings achieved to improve margins and earnings, while the remainder will be reinvested in high growth digital business opportunities.

In fiscal years 2015 and 2014, the Company recorded pre-tax restructuring charges of $28.8 million ($0.34 per share) and $42.7 million ($0.48 per share), respectively, related to this program. These charges are summarized in the following table (in thousands):

Total Charges
2015 2014 Incurred to Date
Charges by Segment:
   Research $4,555 $7,774 $15,225
   Professional Development 4,385 11,860 22,529
   Education 1,571 891 3,580
   Shared Services 18,293 22,197 54,644
Total Restructuring Charges $28,804 $42,722 $95,978

Charges by Activity:
   Severance $17,093 $25,962 $62,761
   Process reengineering consulting 301 8,556 11,475
   Other activities 11,410 8,204 21,742
Total Restructuring Charges $28,804 $42,722 $95,978

Other Activities mainly reflect lease and other contract termination costs. The cumulative charge recorded to-date related to the Restructuring and Reinvestment Program of $96.0 million is expected to be fully recovered byended April 30, ~~2016.~~

~~Impairment Charges:~~

In fiscal year 2014, the Company terminated a multi-year software development program for an internal operations application due to a change in the Company’s longer-term enterprise systems plans. As a result, the Company recorded an asset impairment charge for previously capitalized software costs related to the program of $4.8 million ($0.06 per share).

~~Amortization of Intangibles:~~

~~Amortization of intangibles increased $6.5 million to $51.2 million in fiscal year 2015 and was mainly driven by Talent Solutions acquisitions in Professional Development.~~

~~Interest Expense/Income, Foreign Exchange and Other:~~

Interest expense for fiscal year 2015 increased $3.2 million to $17.1 million. The increase was driven by higher interest rates and higher average debt due to acquisition financing. The Company’s average cost of borrowing in fiscal years 2015 and 2014 was 1.9% and 1.8%, respectively. In fiscal year 2015, the Company recognized foreign exchange transaction gains of $1.7 million mainly related to U.S. dollar intercompany receivables in the U.K. and Germany.

~~Provision for Income Taxes:~~

The effective tax rate for fiscal year 2015 was 21.6% compared to 17.9% in the prior year. In the fourth quarter of fiscal year 2015, the Company recognized a non-recurring tax benefit of $3.1 million related to tax deductions claimed on the write up of certain foreign tax assets to fair market value. During fiscal year 2014, the Company recorded non-cash deferred tax benefits of $10.6 million ($0.18 per share), principally associated with new tax legislation enacted in the United Kingdom (“U.K”) that reduced the U.K. statutory income tax rates by 3%. The benefits reflect the measurement of all applicable U.K. deferred tax balances to the new income tax rates of 21% effective April 1, 2014 and 20% effective April 1, 2015. Excluding the impact of the tax benefits described above, the Company’s effective tax rate decreased from 23.3% to 22.9% principally due to higher non-U.S. tax benefits and lower U.K. income tax rates, partially offset by lower net tax reserve releases of $2.0 million.

~~Earnings Per Share:~~

Earnings per diluted share for fiscal year 2015 increased 10% to $2.97 per share. Excluding the impact of the fiscal year 2015 ($0.34 per share) and the fiscal year 2014 ($0.48 per share) restructuring charges, the prior year asset impairment charges ($0.06 per share), fiscal year 2015 ($0.05 per share) and fiscal year 2014 ($0.18 per share) non-recurring tax benefits and the unfavorable impact of foreign exchange ($0.11 per share), earnings per diluted share increased 7%. The growth was mainly driven by company-wide restructuring and other cost savings, higher margin digital revenue and lower accrued incentive compensation, partially offset by the dilutive impacts of investments in CrossKnowledge and Education Services (Deltak) and costs incurred for the development of internal systems and digital platforms.

~~FISCAL YEAR 2015 SEGMENT RESULTS:~~

As part of Wiley’s Restructuring and Reinvestment Program, during the first quarter of fiscal year 2015, the Company consolidated certain decentralized business functions (Content Management, Vendor Procurement Services, Marketing Services, etc.) into Shared Service and Administrative functions. These newly centralized service groups are part of the Company’s plan to reduce costs through efficiencies gained from standardized technology and centralized management. The costs of these functions were previously reported as direct operating expenses in each business segment but are now reported within the shared service functions. Prior year amounts have been restated to reflect the same reporting methodology. The Company uses occupied square footage of space; number of employees; units shipped; specific identification/activity-based; gross profit; revenue and number of invoices to allocate shared service costs to each business segment.

% change
RESEARCH: 2015 2014 % change w/o FX (a)
Revenue:
Journal Revenue:
Journal Subscriptions
$672,218
$675,266
0% 1%
Author-Funded Access 22,388 17,673 27% 29%
Licensing, Reprints, Backfiles, and Other
188,326
177,255 6% 9%
Total Journal Revenue 882,932 870,194 1% 3%

Books and References:
Print Books 99,746 112,386 -11% -10%
Digital Books 42,512 45,934 -7%
-5%
Licensing and Other 15,605 15,835
-1%
2%
Total Books and References Revenue 157,863 174,155 -9% -7%

Total Revenue $1,040,795 $1,044,349 0% 2%

Cost of Sales (275,487) (280,794) -2% -1%

Gross Profit $765,308 $763,555 0% 2%
Gross Profit Margin 73.5% 73.1%

Direct Expenses (245,278) (248,404) -1% 1%
Amortization of Intangibles (28,190) (28,188)
0%
0%
Restructuring Charges (see Note 6) (4,555) (7,774)

Direct Contribution to Profit $487,285 $479,189 2% 3%
Direct Contribution Margin 46.8% 45.9%

Shared Services and Administrative Costs:
Distribution and Operation Services (44,620) (45,773) -3% -1%
Technology and Content Management (96,486) (99,929)
-3%
-3%
Occupancy and Other (30,405) (28,491) 7% 9%

Contribution to Profit $315,774 $304,996 4% 5%
Contribution Margin 30.3% 29.2%

~~(a) Adjusted to exclude the fiscal year 2015 and 2014 Restructuring Charges~~

~~Revenue:~~

Research revenue for fiscal year 2015 of $1,040.8 million was flat with the prior year, but increased 2% excluding the unfavorable impact of foreign exchange. The increase was driven by Journal Subscriptions; Licensing, Reprints, Backfiles and Other Journal revenue; and Author-Funded Access, partially offset by declines in Print and Digital Books. Journal Subscription revenue growth was driven by new subscriptions ($4 million), new titles ($2 million) and publication timing ($1 million). As of April 30, 2015, calendar year 2015 journal subscription renewals were up approximately 1% over calendar year 2014 on a constant currency basis with approximately 97% of targeted business closed. Growth in Licensing, Reprints, Backfiles, and Other was mainly driven by the sale of an individually large journal backfile license ($10 million) and journal content rights ($6 million).

Author-Funded Access revenue, which represents article publication fees that provide for free access to author articles, grew $4.7 million in fiscal year 2015 due to a higher volume of articles published by the Company. Print Books declined 10% to $99.7 million and Digital Books declined 5% to $42.5 million excluding the unfavorable impact of foreign exchange.

~~Revenue by Region is as follows:~~

% of % change
2015 2014 Revenue w/o FX
Revenue by Region:
Americas $398,573 $408,001 38% -2%
EMEA 585,693 578,099 56% 4%
Asia-Pacific 56,529 58,249 6% 3%
Total Revenue $1,040,795 $1,044,349 100% 1%

~~Cost of Sales:~~

Cost of Sales for fiscal year 2015 decreased 2% to $275.5 million, or 1% excluding the favorable impact of foreign exchange. The decrease reflects cost savings from outsourcing and procurement initiatives and lower cost digital products ($10 million), partially offset by higher royalty rates on society owned journals ($5 million) and higher journal volume ($3 million).

~~Gross Profit:~~

Gross Profit Margin for fiscal year 2015 of 73.5% was 40 basis points higher than prior year mainly due to cost savings from outsourcing and procurement initiatives and growth in digital products (110 basis points), including the sale of an individually large digital journal backfile license, partially offset by higher royalty rates on society owned journals (70 basis points).

~~Direct Expenses and Amortization:~~

Direct Expenses for fiscal year 2015 of $245.3 million decreased 1% from the prior year, but increased 1% excluding the favorable impact of foreign exchange. The increase was mainly driven by higher editorial costs to support business growth ($3 million) and higher employment costs ($3 million), partially offset by lower accrued incentive compensation ($3 million). Amortization of Intangibles in fiscal year 2015 of $28.2 million was flat with the prior year.

~~Contribution to Profit:~~

Contribution to Profit for fiscal year 2015 increased 4% to $315.8 million, or 5% excluding the current and prior year Restructuring Charges and the unfavorable impact of foreign exchange. Revenue growth and cost savings from outsourcing and procurement initiatives were partially offset by higher royalty rates on society owned journals and higher employment costs. Contribution Margin increased 110 basis points to 30.3% in fiscal year 2015 mainly due to cost savings from outsourcing and procurement initiatives and growth in digital products, partially offset by higher royalty rates on society owned journals.

~~Society Partnerships~~

·	~~9 new society journals were signed with combined annual revenue of approximately $5 million~~

·	~~45 renewals/extensions were signed with approximately $30 million in combined annual revenue~~

·	~~14 journals were not renewed with combined annual revenue of approximately $9 million~~

2020.

2018 compared to 2017

~~Journal Impact Index~~

In July 2014, the Company announced a continued increase in the number of its journal titles indexed in the Thomson Reuters® 2013 Journal Citation Reports (JCR). A total of 1,202 Wiley titles were indexed, up from 1,193 in the previous year report. 27 Wiley journals achieved the top category rank, up from 25 in the previous year. The Thomson Reuters index is an important barometer of journal influence and impact.

% change
PROFFESIONAL DEVELOPMENT (PD): 2015 2014 % change w/o FX (a)
Revenue:
Knowledge Services:
Print Books $206,086 $229,199 -10% -9%
Digital Books 49,672 53,764 -8% -7%
Online Test Preparation and Certification 22,119 17,975 23% 23%
Other Knowledge Service Revenue 30,094 29,884 1% 1%
307,971 330,822 -7% -6%
Talent Solutions:
Assessment $57,035 $33,047 73% 73%
Corporate Learning 42,017 - -
99,052 33,047 200% 200%

Total Revenue $407,023 $363,869 12% 13%

Cost of Sales (114,014) (111,911) 2% 3%

Gross Profit $293,009 $251,958 16% 17%
Gross Profit Margin 72.0% 69.2%

Direct Expenses (131,969) (102,706) 28% 29%
Amortization of Intangibles (13,498) (6,965) 94% 94%
Restructuring Charges (see Note 6) (4,385) (11,860)

Direct Contribution to Profit $143,157 $130,427 10% 8%
Direct Contribution Margin 35.2% 35.8%

Shared Services and Administrative Costs:
Distribution and Operation Services (30,838) (37,673) -18% -17%
Technology and Content Management (48,002) (50,426) -5% -5%
Occupancy and Other (26,180) (19,712) 33% 33%

Contribution to Profit $38,137 $22,616 69% 47%
Contribution Margin 9.4% 6.2%

~~(a) Adjusted to exclude the fiscal year 2015 and 2014 Restructuring Charges~~

~~Revenue:~~

PD revenue for fiscal year 2015 increased 12% to $407.0 million, or 13% excluding the unfavorable impact of foreign exchange. Revenue includes incremental revenue from the Talent Solutions acquisitions of CrossKnowledge ($42 million) and Profiles ($21 million). Excluding revenue from both acquisitions, revenue decreased 6% on a currency neutral basis as declines in Book sales, exceeded growth in Online Test Preparation and Certification and other Assessment revenue. The decline in Book revenue was mainly driven by slow demand for backlist titles through retail and wholesale accounts and strategically planned reductions in front list titles. Growth in Online Test Preparation and Certification reflects the addition of new products, mainly test preparation for the CFA and CMA exams, to the ELS Excel platform. Growth in Assessment revenue excluding the acquisitions was approximately $3.0 million and driven by new Inscape assessment products and other growth in Workplace Learning Solutions products. Other Knowledge Services revenue, which includes the sale of licensing rights, subscription revenue and advertising and agency revenue, increased 1% to $30.1 million due to growth in licensing revenue.

~~Revenue by Region is as follows:~~

% of % change
2015 2014 Revenue w/o FX
Revenue by Region:
Americas $288,882 $285,376 71% 2%
EMEA 95,613 54,240 23% 78%
Asia-Pacific 22,528 24,253 6% -4%
Total Revenue $407,023 $363,869 100% 13%

~~Cost of Sales:~~

Cost of Sales for fiscal year 2015 increased 2% or 3% excluding the favorable impact of foreign exchange to $114.0 million. The increase was mainly driven by costs from new acquisitions ($8 million), partially offset by lower Print Book volume ($5 million).

~~Gross Profit:~~

Gross Profit Margin increased from 69.2% to 72.0% in fiscal year 2015. The improvement was mainly driven by higher margin incremental revenue from the CrossKnowledge (150 basis points) and Profiles (140 basis points) acquisitions.

~~Direct Expenses and Amortization:~~

Direct Expenses for fiscal year 2015 increased 28% to $132.0 million, or 29% excluding the favorable impact of foreign exchange. The increase was driven by incremental operating expenses from Talent Solutions acquisitions ($40 million) and content development costs for new assessment products ($1 million), partially offset by restructuring and other cost savings ($12 million). Amortization of Intangibles increased $6.5 million in fiscal year 2015 principally due to the Talent Solutions acquisitions of CrossKnowledge and Profiles.

~~Contribution to Profit:~~

Contribution to Profit increased 69% to $38.1 million in fiscal year 2015, or 47% on a currency neutral basis and excluding the current and prior year Restructuring Charges. The improvement was mainly driven by restructuring and other cost savings, partially offset by lower Book revenue and the dilutive impact of the CrossKnowledge acquisition. Contribution Margin increased from 6.2% to 9.4% in fiscal year 2015, or 120 basis points on a currency neutral basis and excluding the Restructuring Charges. The increase was mainly driven by restructuring and other cost savings, partially offset by the dilutive impact of the CrossKnowledge acquisition.

~~Acquisitions~~

On April 1, 2014, the Company acquired Profiles International (“Profiles”) for approximately $48 million in cash, net of cash acquired. Profiles provides pre-employment assessment and selection tools that enable employers to optimize candidate selections and develop the full potential of their employees. Solutions include pre-hire assessments, including those designed to measure and match personality, knowledge, skills, managerial fit, loyalty, and values; and post-hire assessments, focused on measuring sales and managerial effectiveness, employee performance and career potential. Profiles serves approximately 4,000 corporate clients and millions of end users in over 120 countries, with assessments available in 32 languages. Profiles revenue and operating income for fiscal year 2015 was $23.3 million and $1.0 million, respectively.

On May 1, 2014, the Company acquired CrossKnowledge Group Limited (“CrossKnowledge”) for approximately $166 million in cash, net of cash acquired. CrossKnowledge is a learning solutions provider focused on leadership and managerial skills development that offers subscription-based, digital learning solutions for global corporations, universities, and small and medium-sized enterprises. CrossKnowledge’s solutions include a variety of managerial and leadership skills assessments, courses, certifications, content and executive training programs that are delivered on a cloud-based LMS platform with over 19,000 learning objects in 17 languages. CrossKnowledge serves over seven million end-users in 80 countries. For the fiscal year ended April 30, 2015, CrossKnowledge’s revenue and operating loss included in Wiley’s results was $42.0 million and $5.1 million, respectively, including $4.6 million of acquisition amortization.

~~Collaborations and Alliances~~

·	CrossKnowledge announced an agreement with Gavisus, a Scandinavian-based digital learning and talent development company. CrossKnowledge will provide Gavisus with the technology to plan, design and deliver online leadership training to clients in Norway, Sweden and Denmark.

Wiley announced a strategic collaboration with SilverCloud Health, a global provider of online behavioral and wellness solutions. The partnership, which will provide a comprehensive range of therapeutic programs across behavioral health and long-term chronic disease management, brings together Wiley’s evidence-based psychological and wellness content and SilverCloud Health’s award-winning cloud-based technology platform. The first set of programs, released in 2015, will address Generalized Anxiety Disorder and Diabetes, conditions that affect more than 40 million people in the United States on a daily basis alone.

·	~~Wiley has partnered with Chinese Cultural University to distribute the CPAexcel test preparation platform in China.~~

The Institute of Management Accountants announced a partnership agreement in India with Wiley to offer Wiley’s Certified Management Accountant Exam (CMA) Learning System as part of a full offering that includes live training from Miles Professional Education, a major professional certification course provider in India.

% change
EDUCATION: 2015 2014 % change w/o FX (a)
Revenue:
Books:
Print Textbooks $144,500 $163,152 -11% -9%
Digital Books 34,086 30,137 13% 15%
178,586 193,289 -8% -6%

Custom Materials 50,659 43,556 16% 16%

Course Workflow Solutions (WileyPLUS) 54,200 49,459 10% 11%

Online Program Management (Deltak) 81,593 70,179 16% 16%

Other Education Revenue 9,584 10,494 -9% -9%

Total Revenue $374,622 $366,977 2% 3%

Cost of Sales (110,182) (114,174) -3% -2%

Gross Profit $264,440 $252,803 5% 6%
Gross Profit Margin 70.6% 68.9%

Direct Expenses (125,613) (118,240) 6% 7%
Amortization of Intangibles (9,527) (9,527) 0% 0%
Restructuring Charges (see Note 6) (1,571) (891)

Direct Contribution to Profit $127,729 $124,145 3% 4%
Direct Contribution Margin 34.1% 33.8%

Shared Services and Administrative Costs:
Distribution and Operation Services (12,863) (15,685) -18% -16%
Technology and Content Management (54,272) (48,097) 13% 13%
Occupancy and Other (13,950) (11,769) 19% 19%

Contribution to Profit $46,644 $48,594 -4% 0%
Contribution Margin 12.5% 13.2%

~~(a)~~

~~Adjusted to exclude the fiscal year 2015 and 2014 Restructuring Charges~~

~~Revenue:~~

Education revenue for fiscal year 2015 increased 2% to $374.6 million, or 3% excluding the unfavorable impact of foreign exchange. The growth was mainly driven by Online Program Management (Deltak), Custom Materials, Course Workflow Solutions (WileyPLUS) and Digital Books, partially offset by a decline in Print Textbooks. WileyPLUS revenue, which is earned ratably over the school semester, grew 10% in fiscal year 2015. Unearned deferred WileyPLUS revenue as of April 30, 2015 was $3.8 million. The decline in Print Textbooks reflects student’s preference for Digital Books and Custom Products, a decline in for-profit enrollments and impact from rental book programs.

Online Program Management (Deltak) accounted for 22% of total Education revenue in fiscal year 2015 compared to 19% in the prior year. During the fiscal year, Wiley added 27 net programs and signed the University of Birmingham (UK), Manhattan College (US), University College Cork (Ireland), University of Delaware (US), and the largest partnership to-date, a university-wide agreement with one of America’s most prestigious institutions. As of April 30, 2015, Deltak had 38 partners and 200 degree programs under contract.

~~Revenue by Region is as follows:~~

% of % change
2015 2014 Revenue w/o FX
Revenue by Region:
Americas $300,174 $288,329 80% 5%
EMEA 19,265 19,334 5% 0%
Asia-Pacific 55,183 59,314 15% -2%
Total Revenue $374,622 $366,977 100% 3%

~~Cost of Sales~~

Cost of Sales for fiscal year 2015 decreased 3% to $110.2 million, or 2% excluding the favorable impact of foreign exchange. The decrease was mainly driven by lower composition costs from lower cost digital products ($3 million), lower royalty costs due to product mix ($2 million) and lower inventory obsolescence provisions ($1 million), partially offset by higher student recruitment costs in Online Program Management (Deltak) due to growth in new partners and programs ($3 million).

~~Gross Profit:~~

Gross Profit Margin for fiscal year 2015 improved 170 basis points to 70.6% principally due to lower composition costs from lower cost digital products (70 basis points), lower royalty costs due to product mix (60 basis points) and lower inventory obsolescence provisions (40 basis points).

~~Direct Expenses and Amortization:~~

Direct Expenses increased 6% to $125.6 million, or 7% excluding the favorable impact of foreign exchange. The increase was mainly driven by costs associated with growth in Online Program Management (Deltak) partner programs ($12 million), partially offset by restructuring and other cost savings ($2 million), lower accrued incentive compensation ($1 million) and lower editorial costs due to a reduced title count ($1 million). Amortization of Intangibles was $9.5 million in fiscal years 2015 and 2014.

~~Contribution to Profit:~~

Contribution to Profit for fiscal year 2015 decreased 4% to $46.6 million, but was flat on a currency neutral basis and excluding the current and prior year Restructuring Charges. Digital revenue growth and cost savings initiatives were partially offset by continued investment in Online Program Management (Deltak) programs. Contribution Margin decreased 70 basis points to 12.5% in fiscal year 2015, or 40 basis points on a currency neutral basis and excluding the Restructuring Charges. The decline was mainly driven by continued investment in Online Program Management (Deltak) program development, partially offset by higher gross profit margins and restructuring and other cost savings.

~~SHARED SERVICES AND ADMINISTRATIVE COSTS:~~

The following table reflects total shared services and administrative costs by function, which are included in the Operating and Administrative Expenses line item in the Consolidated Statements of Income. A portion of these costs are allocated to each segment above based on allocation methodologies described in Note 20.

% Change
Dollars in thousands 2015 2014 % Change w/o FX (a)
Distribution and Operation Services $89,024 $100,310 -11% -10%
Technology and Content Management 244,850 240,797 2% 2%
Finance 52,796 54,191 -3% -1%
Other Administration 115,469 104,807 10% 12%
Restructuring Charges (see Note 6) 18,293 22,197 - -
Impairment Charges (see Note 7) - 4,786 - -
Total $520,432 $527,088 -1% 1%

~~(a) Adjusted to exclude the fiscal year 2015 and 2014 Restructuring and fiscal year 2014 Impairment Charges~~

Shared Services and Administrative Costs for fiscal year 2015 decreased 1% to $520.4 million, but increased 1% on a currency neutral basis and excluding the current and prior year Restructuring Charges and prior year Asset Impairment Charges.

Distribution and Operation Services costs decreased mainly due to the outsourcing of certain warehousing ($8 million), lower print volume ($1 million) and lower accrued incentive compensation ($1 million). Technology and Content Management costs increased mainly due to investments in digital platforms and internal systems ($20 million), including approximately $6 million for the continued investment in the Company’s Enterprise Resource Planning System, incremental costs from Talent Solutions acquisitions ($7 million) and investments in new Online Program Management (Deltak) partners and programs ($2 million), partially offset by Content Management restructuring and other cost savings ($18 million) and lower accrued incentive compensation ($4 million). Finance costs decreased mainly due to lower employment costs ($4 million), partially offset by incremental costs from acquisitions ($3 million). Other Administration costs increased mainly due to incremental costs from the CrossKnowledge acquisition ($5 million) and the expiration of a real estate tax incentive related to the Company’s Hoboken headquarters ($3 million).

~~LIQUIDITY AND CAPITAL RESOURCES:~~

The Company’s Cash and Cash Equivalents balance was $457.4 million at the end of fiscal year 2015, compared with $486.4 million a year earlier. Cash Provided by Operating Activities in fiscal year 2015 increased $6.9 million to $355.1 million principally due to lower income tax payments ($18 million), lower income tax deposits paid to German tax authorities ($7 million), lower employee retirement plan contributions ($6 million) and lower royalty advance payments ($5 million), partially offset by higher annual incentive compensation payments ($20 million), higher payments related to the Company’s restructuring programs ($4 million) and other working capital changes mainly due to timing.

Net Cash Used ~~for~~in Investing Activities in ~~fiscal~~ the year ~~2015~~ended April 30, 2018 was ~~$279.7~~$177.4 million, compared to $149.3 million in the prior year. Fiscal year 2015 includes the acquisition of CrossKnowledge for approximately $166 million in cash, net of cash acquired, while fiscal year 2014 includes the acquisition of Profiles for approximately $48 million, net of cash acquired. The acquisitions were funded through the use of the existing credit facility and available cash and did not have an impact on the Company’s ability to meet other operating, investing and financing needs. During fiscal years 2015 and 2014, the Company received $1.1 million and $3.3 million of escrow proceeds, respectively, from the sale of certain consumer publishing assets in fiscal year 2013 which represented the final amounts due to the Company from the sale of those assets.

~~Composition spending was $39.4 million in fiscal year 2015 compared to $40.6~~$243.0 million in the prior year. The decrease ~~reflects lower spending~~ in ~~Education and Research~~net cash used in investing activities in the year ended April 30, 2018 was primarily due to:

our investment in the year ended April 30, 2017 in acquisitions of $125.9 million compared to ~~cost reduction efficiencies and lower planned title volume. Cash~~no investments in the year ended April 30, 2018. The year ended April 30, 2017 includes cash used for ~~technology, property~~the acquisitions of Atypon ($121 million) and ~~equipment~~Ranku ($5 million), net of cash acquired;

partially offset by:

$60.4 million in proceeds we received in the year ended April 30, 2017 related to the settlement of a foreign exchange forward contract that was ~~$69.1~~entered into in the year ended April 30, 2016 to manage foreign currency exposures on intercompany loans.

Index

Net Cash Used In Financing Activities

2019 compared to 2018

Net Cash Used In Financing Activities was $17.6 million in the year ended April 30, 2019 compared to $96.8 million in fiscal year ~~2015~~2018. This decrease in cash used in financing activities was due to an increase in net borrowings of $128.7 million in the year ended April 30, 2019 compared to ~~$57.6~~the year ended April 30, 2018. This was partially offset by $25.5 million of lower cash proceeds from the exercise of stock options and an increase in cash used of $20.3 million to repurchase shares of our Class A Common Stock.

During the year ended April 30, 2019, we repurchased 1,191,496 shares of Class A Common stock at an average price of $50.35 compared to 713,177 shares of Class A Common Stock at an average price of $55.65 in the prior year. In the year ended April 30, 2019, we increased our quarterly dividend to shareholders by 3% to $1.32 per share annualized versus $1.28 per share annualized in the prior year.

As of April 30, 2019, we had authorization from our Board of Directors to purchase up to 1,888,975 additional shares.

2018 compared to 2017

Net Cash Used in Financing Activities was $96.8 million in the year ended April 30, 2018 compared to $346.2 million in the year ended April 30, 2017. This decrease in cash used was due to lower net debt repayments in the year ended April 30, 2018. Net debt repayments in the year ended April 30, 2018 were $8.6 million compared to $240.0 million in the prior year. The increase mainly reflects Deltak curriculum development costs due to growth in new partners and programs ($5 million), incremental capital spending for CrossKnowledge ($4 million), and capital spending on new leased facilities ($2 million).

~~Cash Used for Financing Activities was $61.0 million in fiscal~~During the year 2015 as compared to $53.5 million in the prior year. The Company’s net debt (debt less cash and cash equivalents) increased $78.9 million from the prior year principally to fund the CrossKnowledge acquisition ($166 million). During fiscal year 2015, net debt borrowings were $47.7 million compared to $27.1 million in the prior year. The total notional amount of the interest rate swap agreements associated with the Company’s revolving credit facilities was $300 million as ofended April 30, ~~2015.~~

To take advantage of more favorable interest rates available in the current market, on December 22, 2014, the Company entered into a $50 million 364-day U.S. dollar revolving credit facility reinstated every 30 days with Santander Bank, N.A. which is equally ranked with the Company’s existing agreement with Bank of America - Merrill Lynch and The Royal Bank of Scotland plc, and TD Bank, N.A.. The facility was fully drawn as of April 30, 2015. The borrowing rate is LIBOR plus a margin of 1.00%. The proceeds of the revolving credit facility were used to pay a portion of the Company’s existing revolving credit facilities and meet seasonal operating cash requirements.

On October 31, 2014, the Company entered into a U.S. dollar facility with TD Bank, N.A. which is equally ranked with the Company’s existing agreement with Bank of America - Merrill Lynch and The Royal Bank of Scotland plc, and Santander Bank. The new agreement consists of a $50 million 364-day revolving credit facility. The facility was fully drawn as of April 30, 2015. The borrowing rate is LIBOR plus an applicable margin ranging from 0.80% to 1.40%, and a facility fee will be due on any undrawn amounts ranging from 0.125% to 0.30%, both depending on the Company consolidated leverage ratio, as defined. The credit agreement contains certain restrictive covenants related to the Company’s consolidated leverage ratio and interest coverage ratio, which the Company was in compliance with as of April 30, 2015. The proceeds of the new revolving credit facility were used to pay a portion of the Company’s existing revolving credit facility and meet seasonal operating cash requirements.

~~During fiscal year 2015, the Company~~ 2018, we repurchased ~~1,082,502~~713,177 shares of common stock at an average price of ~~$57.26~~$55.65, compared to ~~1,248,030~~953,188 shares at an average price of ~~$50.79~~$52.80 in the prior year. In fiscal year 2015, the Company increased its quarterly dividend to shareholders by 16% to $0.29 per share versus $0.25 per share in the prior year. Lower proceeds from the exercise of stock options reflect a lower volume of stock option exercises in fiscal year 2015 compared to the prior year.

Cash and Cash Equivalents held outside the U.S. were approximately $411.6 million as of April 30, 2015. The balances in equivalent U.S. dollars were comprised primarily of pound sterling ($256 million), euros ($73 million), Australian dollars ($45 million), Singapore dollars ($34 million) and other ($4 million). Maintenance of these cash and cash equivalent balances outside the U.S. does not have a material impact on the liquidity or capital resources of the Company’s global, including U.S., operations. Cash and cash equivalent balances outside the U.S. may be subject to U.S. taxation, if repatriated. The Company intends to reinvest cash outside the U.S. except in instances where repatriating such earnings would result in no additional income tax. Accordingly, the Company has not accrued for U.S. income tax on the repatriation of non-U.S. earnings. It is not practical to determine the U.S. income tax liability that would be payable if such cash and cash equivalents were not indefinitely reinvested.

As of April 30, ~~2015, the Company~~2018, we had ~~approximately $750.1 million~~authorization from our Board of ~~debt outstanding~~Directors to purchase up to 3,080,471 additional shares.

RECENTLY ISSUED STATEMENTS OF FINANCIAL ACCOUNTING STANDARDS, ACCOUNTING GUIDANCE, AND DISCLOSURE REQUIREMENTS

We are subject to numerous recently issued statements of financial accounting standards, accounting guidance, and ~~approximately $302.9 million~~disclosure requirements. The information set forth in Note 2, “Summary of ~~unused borrowing capacity under its Revolving Credit~~Significant Accounting Policies, Recently Issued and other facilities. The Company believes that its operating cash flow, together with its revolving credit facilities and other available debt financing, will be adequate to meet its operating, investing and financing needs in the foreseeable future, although there can be no assurance that continued or increased volatility in the global capital and credit markets will not impair its ability to access these markets on terms commercially acceptable. The Company does not have any off-balance-sheet debt.

~~The Company’s working capital can be negative due to the seasonality of its businesses. The primary driver~~Recently Adopted Accounting Standards,” of the ~~negative working capital~~Notes to Consolidated Financial Statements of this Form 10-K is ~~unearned deferred revenue related to subscriptions for which cash has been collected in advance. Cash received in advance for subscriptions is used~~incorporated by ~~the Company for a number of purposes including acquisitions; debt repayments; funding operations; dividend payments;~~reference and purchasing treasury shares. The deferred revenue will be recognized as income when the products are shipped or made available online to the customers over the term of the subscription. Current liabilities as of April 30, 2015 include $372.1 million of such deferred subscription revenue for which cash was collected in advance.describes these new accounting standards.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES:

The preparation of ~~the Company’s financial statements~~our Consolidated Financial Statements and related disclosures in conformity with ~~accounting principles generally accepted in the~~ U.S. GAAP requires our management to make estimates and assumptions that affect the reported ~~amount~~amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the date of the financial statements and ~~reported amounts of~~ revenue and expenses during the reporting period. ~~Management continually evaluates~~These estimates include, among other items, revenue recognition, sales return reserves, allocation of acquisition purchase price to assets acquired and liabilities assumed, goodwill and indefinite-lived intangible assets, intangible assets with finite lives and other long-lived assets, and retirement plans. We review these estimates and assumptions periodically using historical experience and other factors and reflect the ~~basis for its estimates.~~effects of any revisions on the Consolidated Financial Statements in the period we determine any revisions to be necessary. Actual results could differ from those estimates, which could affect the reported results. Note 2, “Summary of Significant Accounting Policies, Recently Issued and Recently Adopted Accounting Standards” of the ~~“Notes~~��Notes to Consolidated Financial Statements” includes a summary of the significant accounting policies and methods used in preparation of our Consolidated Financial Statements. Set forth below is a discussion of ~~the Company’s~~our more critical accounting policies and methods.

Revenue Recognition:The Company recognizes revenue when the following criteria are met: persuasive evidence that an arrangement exists; delivery has occurred or services have been rendered; the price to the customer is fixed or determinable; and collectability is reasonably assured. If all

See Note 3, “Revenue Recognition, Contracts with Customers,” of the ~~above criteria have been met,~~Notes to Consolidated Financial Statements for details of our revenue ~~is recognized upon shipment of products or when services have been rendered. Revenue related~~recognition policy.

Sales Return Reserves:

The process that we use to ~~journal subscriptions~~determine our sales returns and ~~other products and services that are generally collected in advance are deferred and recognized as earned over the term of the subscription; when~~ the related issue is shipped; made available online; or the service is rendered, in accordance with contractual terms. Collectability is evaluated based on the amount involved, the credit history of the customer, and the status of the customer’s account with the Company.

The Company transitioned from issue-based to time-based digital journal subscription agreements for calendar year 2016. Under this new contractual agreement, the Company provides access to all journal content published within a calendar year and recognizesreserve provision charged against revenue on a straight-line basis over the calendar year. Under the Company’s previous licensing model, a customer subscribed to a discrete number of online journal issues and revenue was recognized as each issue was made available online. The Company made these changes to simplify the contracting and administration of digital journal subscriptions.

When a product is sold with multiple deliverables, the Company accounts for each deliverable within the arrangement as a separate unit of accounting due to the fact that each deliverable is also sold on a stand-alone basis. The total consideration of a multiple-element arrangement is allocated to each unit of accounting based on the price charged by the Company when it is sold separately. The Company’s multiple deliverable arrangements principally include WileyPLUS, the online course management tool for the Company’s Education business which includes a complete print or digital textbook for the course; negotiated licenses for bundles of digital content available on Wiley Online Library, the online publishing platform for the Company’s Research business; and test preparation, assessment, certification and training services sold by the Professional Development business which can include bundles of print and digital content and online workflow solutions.

The Company enters into contracts for the resale of its content through a third party where the Company is not the primary obligor of the arrangement because it is not responsible for fulfilling the customer’s order; handling customer requests or claims and/or maintains credit risk. The Company recognizes revenue for the sale of its content, net of any commission owed to the third party seller or taxes which are remitted to government authorities.

~~Allowance for Doubtful Accounts:~~ ~~The estimated allowance for doubtful accounts~~ is based on ~~a review~~applying an estimated return rate to current year returnable print book sales. This rate is based upon an analysis of ~~the aging of the accounts receivable balances,~~actual historical ~~write-off~~return experience ~~credit evaluations of customers and current market conditions. A change~~ in the evaluation of a customer’s credit could affect the estimated allowance. The allowance for doubtful accounts is shown as a reduction of Accounts Receivable in the Consolidated Statements of Financial Positionvarious markets and ~~amounted to $7.3 million and $8.3 million as of April 30, 2016 and 2015, respectively.~~

~~Sales Return Reserve:~~ ~~The estimated allowance for sales returns is based on a review of the historical return patterns, as well as current market trends in the businesses~~geographic regions in which we ~~operate.~~do business. We collect, maintain, and analyze significant amounts of sales returns data for large volumes of homogeneous transactions. This allows us to make reasonable estimates of the amount of future returns. All available data is utilized to identify the returns by market and as to which fiscal year the sales returns apply. This enables management to track the returns in detail and identify and react to trends occurring in the marketplace, with the objective of being able to make the most informed judgments possible in setting reserve rates. Associated with the estimated sales return reserves, ~~the Company~~we also ~~includes~~include a related ~~reduction in~~increase to inventory and ~~royalty costs~~a reduction to accrued royalties as a result of the expected returns. ~~Net print~~Print book sales return reserves amounted to ~~$19.9~~a net liability balance of $18.5 million and ~~$25.3~~$18.6 million as of April 30, ~~2016~~2019 and ~~2015,~~2018, respectively.

Index

The reserves are reflected in the following accounts of the Consolidated Statements of Financial Position – increase (decrease):

	2019			2018
Accounts receivable, net ⁽¹⁾	$	—		$	(28,302	)
Inventories, net	$	3,739		$	4,626
Accrued royalties	$	(3,653	)	$	(5,048	)
Contract liability (Deferred revenue) ⁽¹⁾	$	25,934		$	—
Decrease in Net Assets	$	(18,542	)	$	(18,628	)

⁽¹⁾Due to the adoption of the new revenue standard (See Note 3, Revenue Recognition, Contracts with Customers), the sales return reserve as of April 30, 2019 of $25.9 million is recorded in Contract Liability (Deferred Revenue). In prior periods, the sales return reserve of $28.3 million was recorded as a reduction to Accounts Receivable, net on the Consolidated Statements of Financial Position.

2016 2015
Accounts Receivable $(29,447) $(37,300)
Inventories 4,924 6,555
Accounts and Royalties Payable (4,662) (5,405)
Decrease in Net Assets $(19,861) $(25,340)

A one percent change in the estimated sales return rate could affect net income by approximately ~~$2.0~~$1.5 million. A change in the pattern or trends in returns could also affect the estimated allowance.

~~Reserve for Inventory Obsolescence:~~ Inventories are carried at the lower of cost or market. A reserve for inventory obsolescence is estimated based on a review of damaged, obsolete, or otherwise unsalable inventory. The review encompasses historical unit sales trends by title; current market conditions, including estimates of customer demand compared to the number of units currently on hand; and publication revision cycles. A change in sales trends could affect the estimated reserve. The inventory obsolescence reserve is reported as a reduction of the Inventories balance in the Consolidated Statements of Financial Position and amounted to $22.0 million and $21.9 million as of April 30, 2016 and 2015, respectively.

Allocation of Acquisition Purchase Price to Assets Acquired and Liabilities ~~Assumed:~~Assumed:

In connection with acquisitions, ~~the Company allocates~~we allocate the cost of the acquisition to the assets acquired and the liabilities assumed based on the estimates of fair value for such items, including intangible assets and technology acquired. Such estimates include discounted estimated cash flows expected to be generated by those assets and the expected useful lives based on historical experience and current market trends ~~and synergies~~ to be achieved from the acquisition and the expected tax basis of assets acquired. ~~The Company~~We may use a ~~third party~~third-party valuation consultant to assist in the determination of such estimates.

Goodwill and Indefinite-lived Intangible Assets:

Goodwill is reviewed for possible impairment at least annually on a reporting unit level during the ~~excess~~fourth quarter of each year. A review of goodwill may be initiated before or after conducting the purchase price paid over the fair value of the net assets of the business acquired. Indefinite-lived intangible assets primarily consist of brands, trademarks, content and publishing rights and are typically characterized by intellectual property with a long and well-established revenue stream resulting from strong and well-established imprint/brand recognition in the market. Goodwill and indefinite-lived intangible assets are not amortized but are reviewed annually for impairment, or more frequentlyannual analysis if events or changes in circumstances indicate the ~~asset might be impaired. The Company evaluates the recoverability of indefinite-lived intangible assets by comparing the fair~~carrying value of ~~the intangible asset to its carrying value.~~goodwill may no longer be recoverable.

~~To evaluate the recoverability of goodwill, the Company primarily uses a two-step impairment test approach at the reporting unit level. In the first step, the estimated fair value of the entire~~A reporting unit is ~~compared to its carrying value including goodwill. If~~ the ~~fair value~~operating segment unless, at businesses one level below that operating segment– the “component” level–discrete financial information is prepared and regularly reviewed by management, and the component has economic characteristics that are different from the economic characteristics of the ~~reporting unit is less than the carrying value, a second step is performed to determine the charge for goodwill impairment. In the second step, the Company determines an implied fair value~~other components of the operating segment, in which case the component is the reporting ~~unit’s goodwill by determining the fair value~~unit.

As part of the ~~individual assets and liabilities (including any previously unrecognized intangible assets)~~annual impairment test, we may conduct an assessment of ~~the reporting unit other than goodwill. The resulting implied fair value of the goodwill is compared to the carrying amount and an impairment charge is recognized for the difference.~~

~~In certain circumstances, the Company uses a~~ qualitative ~~assessment as an alternative to the two-step test approach. Under this approach certain market, industry and financial performance~~ factors ~~are considered~~ to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. In a qualitative assessment, we would consider the macroeconomic conditions, including any deterioration of general conditions and industry and market conditions, including any deterioration in the environment where the reporting unit operates, increased competition, changes in the products/services and regulatory and political developments, cost of doing business, overall financial performance, including any declining cash flows and performance in relation to planned revenues and earnings in past periods, other relevant reporting unit specific facts, such as changes in management or key personnel or pending litigation, and events affecting the reporting unit, including changes in the carrying value of net assets.

If ~~that~~an optional qualitative goodwill impairment assessment is not performed, we are required to determine the ~~case,~~fair value of each reporting unit using the two-step process. In step one, we compare the fair value of each of our reporting units with goodwill to its carrying value, including the goodwill allocated to the reporting unit. If the fair value of the reporting unit exceeds its carrying value, there is no indication of impairment and no further testing is required. If the fair value of the reporting unit is less than the carrying value, we must perform step two of the impairment test to measure the amount of impairment loss, if any. In step two, the reporting unit’s fair value is allocated to all of the assets and liabilities of the reporting unit, including any unrecognized intangible assets, in a hypothetical analysis that calculates the implied fair value of goodwill in the same manner as if the reporting unit were being acquired in a business combination. If the implied fair value of the reporting unit’s goodwill is less than the carrying value, the difference is recorded as an impairment loss.

Index

We derive an estimate of fair values for each of our reporting units using a combination of an income approach ~~described~~and a market approach, each based on an applicable weighting. We assess the applicable weighting based on such factors as current market conditions and the quality and reliability of the data. Absent an indication of fair value from a potential buyer or similar specific transactions, we believe that the use of these methods provides a reasonable estimate of a reporting unit’s fair value.

Fair value computed by these methods is arrived at using a number of factors, including projected future operating results, anticipated future cash flows, effective income tax rates, comparable marketplace data within a consistent industry grouping, and the cost of capital. There are inherent uncertainties, however, related to these factors and to our judgment in applying them to this analysis. Nonetheless, we believe that the combination of these methods provides a reasonable approach to estimate the fair value of our reporting units. Assumptions for sales, net earnings, and cash flows for each reporting unit were consistent among these methods.

Annual Goodwill Impairment Test

As of February 1, 2019, we completed step one of our annual goodwill impairment test for our reporting units. We concluded that the fair values of these reporting units were above their carrying values and, therefore, there was no indication of impairment.

Income Approach Used to Determine Fair Values

The income approach is ~~then performed~~based upon the present value of expected cash flows. Expected cash flows are converted to present value using factors that consider the timing and risk of the future cash flows. The estimate of cash flows used is prepared on an unleveraged debt-free basis. We use a discount rate that reflects a market-derived weighted average cost of capital. We believe that this approach is appropriate because it provides a fair value estimate based upon the reporting unit’s expected long-term operating and cash flow performance. The projections are based upon our best estimates of projected economic and market conditions over the related period including growth rates, estimates of future expected changes in operating margins, and cash expenditures. Other significant estimates and assumptions include terminal value long-term growth rates, provisions for income taxes, future capital expenditures, and changes in future cashless, debt-free working capital.

Market Approach Used to Determine Fair Values

The market approach used estimates the fair value of the reporting unit by applying multiples of operating performance measures to the reporting unit’s operating performance (the “Guideline Public Company Method”). These multiples are derived from comparable publicly-traded companies with similar investment characteristics to the reporting unit, and such comparable data are reviewed and updated as needed annually. We believe that this approach is appropriate because it provides a fair value estimate using multiples from entities with operations and economic characteristics comparable to our reporting units and Wiley.

The key estimates and assumptions that are used to determine fair value under this market approach include current and forward 12-month operating performance results, as applicable, and the selection of the relevant multiples to be applied. Under the Guideline Public Company Method, a control premium, or an amount that a buyer is usually willing to pay over the current market price of a publicly traded company, is considered and applied, to the calculated equity values to adjust the public trading value upward for a 100% ownership interest, where applicable.

In order to assess the reasonableness of the calculated fair values of our reporting units, we also compare the sum of the reporting units’ fair values to our market capitalization and calculate an implied control premium (the excess of the sum of the reporting units’ fair values over the market capitalization). We evaluate the ~~recoverability~~control premium by comparing it to control premiums of ~~goodwill.~~recent comparable market transactions. If the implied control premium is not reasonable in light of these recent transactions, we will reevaluate our fair value estimates of the reporting units by adjusting the discount rates and/or other assumptions.

If our assumptions and related estimates change in the future, or if we change our reporting unit structure or other events and circumstances change (such as a sustained decrease in the price of our common stock, a decline in current market multiples, a significant adverse change in legal factors or business climates, an adverse action or assessment by a regulator, heightened competition, strategic decisions made in response to economic or competitive conditions, or a more-likely-than-not expectation that a reporting unit or a significant portion of a reporting unit will be sold or disposed of), we may be required to record impairment charges in future periods. Any impairment charges that we may take in the future could be material to our consolidated results of operations and financial condition.

See Note 11, “Goodwill and Intangible Assets,” of the Notes to Consolidated Financial Statements for details of our goodwill balance and the goodwill review performed in 2019 and other related information.

Index

Intangible Assets with Finite Lives and Other Long-Lived Assets:

Finite-lived intangible assets principally consist of brands, trademarks, content and publication rights, customer relationships, and non-compete agreements and are amortized over their estimated useful lives. The most significant factors in determining the estimated ~~life~~lives of these intangibles isare the history and longevity of the brands, trademarks, and content and publication rights acquired combined with the strength of cash flows. Content and publication rights, trademarks, customer relationships and brands with finite lives are amortized on a straight-line basis over periods ranging from 5 to 40 years. Non-compete agreements are amortized over the terms of the individual agreement, generally up to 5 years.

Intangible assets with finite lives as of April 30, 2019, are amortized on a straight line basis over the following weighted average estimated useful lives: content and publishing rights – ~~31 years;~~34 years, customer relationships – ~~20 years;~~18 years, brands and trademarks – ~~13 years;~~16 years, non-compete agreements – 43 years.

Assets with finite lives are ~~only~~ evaluated for impairment upon a significant change in the operating or macroeconomic environment. In these circumstances, if an evaluation of the projected undiscounted cash flows indicates impairment, the asset is written down to its estimated fair value based on the discounted future cash flows.

~~Share-Based Compensation:~~ The Company recognizes share-based compensation expense based on the fair value of the share-based awards on the grant date, reduced by an estimate of future forfeited awards. As such, share-based compensation expense is only recognized for those awards that are expected to ultimately vest. The fair value of share-based awards is recognized in net income on a straight-line basis over the requisite service period. The grant date fair value for stock options is estimated using the Black-Scholes option-pricing model. The determination of the assumptions used in the Black-Scholes model requires the Company to make significant judgments and estimates, which include the expected life of an option, the expected volatility of the Company’s Common Stock over the estimated life of the option, a risk-free interest rate and the expected dividend yield. Judgment is also required in estimating the amount of share-based awards that may be forfeited. Share-based compensation expense associated with performance-based stock awards is based on actual financial results for targets established three years in advance. The cumulative effect on current and prior periods of a change in the estimated number of performance share awards, or estimated forfeiture rate, is recognized as an adjustment to earnings in the period of the revision. If actual results differ significantly from estimates, the Company’s share-based compensation expense and results of operations could be impacted.

Retirement Plans:~~The Company provides~~

We provide defined benefit pension plans for certain employees worldwide. ~~The Company’s~~Our Board of Directors approved amendments to the U.S., Canada and U.K. defined benefit plans that froze the future accumulation of benefits effective June 30, 2013, December 31, 2015, and April 30, 2015, respectively. Under the amendments, no new employees will be permitted to enter these plans and no additional benefits for current participants for future services will be accrued after the effective dates of the amendments.

The accounting for benefit plans is highly dependent on assumptions concerning the outcome of future events and circumstances, including ~~compensation increases,~~discount rates, long-term return rates on pension plan assets, healthcare cost trends, ~~discount rates~~compensation increases and other factors. In determining such assumptions, ~~the Company consults~~we consult with outside actuaries and other advisors.

The discount rates for the U.S., ~~United Kingdom~~Canada and ~~Canadian~~U.K. pension plans are based on the derivation of a single-equivalent discount rate using a standard spot rate curve and the timing of expected benefit payments as of the balance sheet date. The spot rate ~~curve~~curves are based upon portfolios of corporate bonds rated at Aa or above by a respected rating agency. The discount rate for Germany is based ~~upon~~on a ~~portfolio of Moody’s-rated Aa3 (or higher) corporate bonds. The discount rates for other non-U.S. plans are based on~~ similar published ~~indices~~index with ~~durations~~a duration comparable to that of ~~each~~the plan’s liabilities. The expected long-term rates of return on pension plan assets are estimated using market benchmarks for equities, real estate, and bonds applied to each plan’s target asset allocation and are estimated by asset class, including an anticipated inflation rate. The expected long-term rates are then compared to the historic investment performance of the plan assets as well as future expectations and estimated through consultation with investment advisors and actuaries. Salary growth and healthcare cost trend assumptions are based on ~~the Company’s~~our historical experience and future outlook. While ~~the Company believes~~we believe that the assumptions used in these calculations are reasonable, differences in actual experience or changes in assumptions could materially affect the expense and liabilities related to ~~the~~our defined benefit pension ~~plans of the Company.~~plans. A hypothetical one percent increase in the discount rate would ~~impact~~increase net income and decrease the accrued pension liability by approximately ~~$1.5~~$1.4 million and ~~$143.3~~$135.1 million, respectively. A one percent decrease in the discount rate would ~~impact~~decrease net income and increase the accrued pension liability by approximately ~~$1.2~~$0.6 million and ~~$178.6~~$165.9 million, respectively. A one percent change in the expected ~~long term~~long-term rate of return would affect net income by approximately ~~$3.7~~$4.7 million.

Index

5341

~~Recently Issued Accounting Standards:~~

In March 2016, the FASB issued ASU 2016-09 “Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” which simplifies the accounting for share-based payment transactions, including income taxes, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The new guidance also allows an entity to make an accounting policy election to account for forfeitures when they occur or to estimate the number of awards that are expected to vest with a subsequent true up to actual forfeitures (current GAAP). The standard is effective for the company on May 1, 2017, with early adoption permitted. The Company is currently assessing the impact the new guidance will have on its consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02 "Leases (Topic 842)”. ASU 2016-02 requires lessees to recognize most leases on the balance sheet which will result in an increase in reported assets and liabilities. The recognition of expenses within the income statement is consistent with the existing lease accounting standards. There are no significant changes in the new standard for lessors under operating leases. The standard is effective for the Company on May 1, 2019 with early adoption permitted. Adoption requires application of the new guidance for all periods presented. The Company is currently assessing the impact the new guidance will have on its consolidated financial statements.

In November 2015, the FASB issued ASU 2015-17 “Income Taxes- Balance Sheet Classification of Deferred Taxes”. To simplify the presentation of deferred income taxes, the amendments in this update require that all deferred tax liabilities and assets, including those previously classified as current, be classified as noncurrent in a classified statement of financial position. The amendments in this Update will align the presentation of deferred income tax assets and liabilities with IFRS. The standard is effective for the company May 1, 2017 with early adoption permitted. The Company is currently assessing the impact the new guidance will have on its consolidated financial statements.

In April 2015, the FASB issued ASU 2015-05 "Intangibles- Goodwill and Other- Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in Cloud Computing Arrangements" (“ASU 2015-05”). Cloud computing arrangements represent the delivery of hosted services over the internet which includes software, platforms, infrastructure and other hosting arrangements. The ASU provides criteria to determine whether the cloud computing arrangement includes a software license. A software license can include customized development, maintenance, hosting and other related costs. If the criteria are met, the customer will capitalize the fee attributable to the software license portion of the arrangement as internal-use software. If the arrangement does not include a software license, it should be treated as a service contract. The standard is effective for the Company on May 1, 2016 with early adoption permitted. An entity can elect to adopt either prospectively for all arrangements entered into or materially modified after the effective date or retrospectively. The Company intends to adopt the new guidance on a prospective basis as of May 1, 2016.

In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09 "Revenue from Contracts with Customers" (Topic 606) (“ASU 2014-09”), and the International Accounting Standards Board (“IASB”) published its equivalent standard, International Financial Reporting Standard (“IFRS”) 15, “Revenue from Contracts with Customers”. These joint comprehensive new revenue recognition standards will supersede most existing revenue recognition guidance and are intended to improve and converge revenue recognition and related financial reporting requirements. The standard is effective for the Company on May 1, 2018 with early adoption permitted on May 1, 2017. The standard allows for either “full retrospective” adoption, meaning the standard is applied to all periods presented, or “cumulative effect” adoption, meaning the standard is applied only to the most current period presented in the financial statements. Subsequently, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606) – Principal versus Agent Considerations (“ASU 2016-08”), ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606) – Identifying Performance Obligations and Licensing (“ASU 2016-10”), and ASU 2016-12, Revenue from Contracts with Customers (Topic 606) – Narrow Scope Improvements and Practical Expedients (“ASU 2016-12”), which provide clarification and additional guidance related to ASU 2014-09. The Company must adopt ASU 2016-08, ASU 2016-10, and ASU 2016-12 with ASU 2014-09. The Company is currently assessing whether the adoption of the new guidance will have a significant impact on its consolidated financial statements.

~~Contractual Obligations and Commercial Commitments~~

~~A summary of contractual obligations and commercial commitments, excluding unrecognized tax benefits further described in Note 12, as of April 30, 2016 is as follows (in thousands):~~

Payments Due by Period
Within 2-3 4-5 After 5
Total Year 1 Years Years Years

Total Debt $605.0 $ - $ - $605.0 $ -
Interest on Debt1
50.7 11.6 20.4 18.7 -
Non-Cancelable Leases 328.2 35.2 47.3 46.4 199.3
Minimum Royalty Obligations 257.4 83.4 97.4 55.0 21.6
Other Operating Commitments 71.7 30.5 30.0 11.2 -
Total $1,313.0 $160.7 $195.1 $736.3 $220.9

1Interest on Debt includes the effect of the Company’s interest rate swap agreements and the estimated future interest payments on the Company’s unhedged variable rate debt, assuming that the interest rates as of April 30, 2016 remain constant until the maturity of the debt.

Item 7A. ~~Quantitative~~Quantitative and Qualitative Disclosures about Market Risk

~~“Safe Harbor” Statement Under the~~

~~Private Securities Litigation Reform Act of 1995~~

The following Consolidated Financial Statements and Notes are filed as part of this report.

John Wiley & Sons, Inc. and Subsidiaries

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

To our Shareholders

John Wiley ~~and~~& Sons, Inc.:

The management of John Wiley ~~and~~& Sons, Inc. and subsidiaries is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f).

Under the supervision and with the participation of our management, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on our evaluation under the framework in Internal Control – Integrated Framework issued by COSO, our management concluded that our internal control over financial reporting was effective as of April 30, ~~2016.~~2019.

Changes in Internal Control over Financial Reporting:

The Company acquired Learning House during fiscal year 2019, which represented approximately 1% of total consolidated assets, excluding goodwill and intangibles which are included within the scope of the assessment, and approximately 2% of total consolidated revenues of the Company as of and for the year ended April 30, 2019. Learning House was excluded from the Company's assessment of the effectiveness of the Company’s internal control over financial reporting as of April 30, 2019.

We are in the process of implementing a new global enterprise resource planning system (“ERP”) that will enhance our business and financial processes and standardize our information systems. We have completed the implementation ~~with respect to certain subsidiaries/~~of record-to-report, purchase-to-pay and several other business processes within all locations and will continue to roll out the ERP in phases over the next ~~three years.~~year.

As with any new information system we implement, this application, along with the internal controls over financial reporting included in this process, will require testing for effectiveness. In connection with this ERP implementation, we are updating our internal controls over financial reporting, as necessary, to accommodate modifications to our business processes and accounting procedures. We do not believe that the ERP implementation will have an adverse effect on our internal control over financial reporting.

Except as described above, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting during fiscal year ~~2016.~~2019.

The effectiveness of our internal control over financial reporting as of April 30, ~~2016~~2019 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their report which is included herein.

The Company’s Corporate Governance Principles, Committee Charters, Business Conduct and Ethics Policy and the Code of Ethics for Senior Financial Officers are published on our web site at www.wiley.com under the “About Wiley—~~Investor Relations—~~Corporate Governance” captions. Copies are also available free of charge to shareholders on request to the Corporate Secretary, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030-5774.

/s/ ~~Mark Allin~~Brian A. Napack
~~Mark Allin~~Brian A. Napack
President and
Chief Executive Officer


/s/ John A. Kritzmacher
John A. Kritzmacher
Chief Financial Officer and
Executive Vice President, ~~Technology and~~ Operations

/s/ Christopher F. Caridi

~~/s/ Edward J. Melando~~
~~Edward J. Melando~~Christopher F. Caridi
Senior Vice President, Corporate Controller and
Chief Accounting Officer

~~June 29, 2016~~July 1, 2019

Index

6045

Report of Independent Registered Public Accounting Firm

~~The~~To the Shareholders and Board of Directors ~~and Shareholders~~

John Wiley & Sons, Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated statements of financial position of John Wiley & Sons, Inc. ~~(the “Company”)~~ and subsidiaries (the Company) as of April 30, ~~2016~~2019 and ~~2015, and~~2018, the related consolidated statements of income, comprehensive income, ~~(loss),~~shareholders’ equity, and cash flows ~~and shareholders’ equity~~ for each of the years in the three-year period ended April 30, ~~2016.~~2019, and the related notes and financial statement schedule (collectively, the consolidated financial statements). In ~~connection with~~ our ~~audits of~~opinion, the consolidated financial statements wepresent fairly, in all material respects, the financial position of the Company as of April 30, 2019 and 2018, and the results of its operations and its cash flows for each of the years in the three-year period ended April 30, 2019, in conformity with U.S. generally accepted accounting principles.

We also have audited, ~~Schedule II~~in accordance with the standards of ~~this Form 10-K.~~ the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of April 30, 2019, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated July 1, 2019 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Change in Accounting Principle

As described in Note 2 to the consolidated financial statements, the Company has elected to change its method of accounting for certain advertising and marketing costs. This change in accounting principle has been retrospectively applied to the accompanying consolidated financial statements for the fiscal years ended April 30, 2018 and 2017.

As described in Note 2 to the consolidated financial statements, the Company has changed its method of accounting for revenue recognition effective May 1, 2018 due to the adoption of Accounting Standards Codification Topic 606, Revenue from Contracts with Customers.

Basis for Opinion

These consolidated financial statements ~~and financial statement schedule~~ are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements ~~and financial statement schedule~~ based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the ~~Public Company Accounting Oversight Board (United States).~~PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material ~~misstatement. An audit includes~~misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence ~~supporting~~regarding the amounts and disclosures in the consolidated financial statements. ~~An audit~~Our audits also ~~includes assessing~~included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial ~~statement presentation.~~statements. We believe that our audits provide a reasonable basis for our opinion.

~~In our opinion,~~

/s/ KPMG LLP

We have served as the ~~consolidated financial statements referred to above present fairly, in all material respects,~~Company’s auditor since 2002.

New York, New York
July 1, 2019

Index

Report of Independent Registered Public Accounting Firm

To the ~~financial position~~Shareholders and Board of Directors
John Wiley & Sons, Inc.:

Opinion on Internal Control Over Financial Reporting

We have audited John Wiley & Sons, Inc. and ~~subsidiaries~~subsidiaries’ (the Company) internal control over financial reporting as of April 30, ~~2016 and 2015, and~~2019, based on criteria established in Internal Control – Integrated Framework (2013) issued by the ~~results~~Committee of ~~their operations and their cash flows for each~~Sponsoring Organizations of the ~~years in the three-year period ended April 30, 2016, in conformity with U.S. generally accepted accounting principles. Also in~~Treadway Commission. In our opinion, the ~~related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly,~~Company maintained, in all material respects, effective internal control over financial reporting as of April 30, 2019, based on criteria established in Internal Control – Integrated Framework (2013) issued by the ~~information set forth therein.~~Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), ~~John Wiley & Sons, Inc.’s~~the consolidated statements of financial position of the Company as of April 30, 2019 and 2018, and the related consolidated statements of income, comprehensive income, shareholders’ equity, and cash flows for each of the years in the three-year period ended April 30, 2019, and the related notes and financial statement schedule (collectively, the consolidated financial statements), and our report dated July 1, 2019 expressed an unqualified opinion on those consolidated financial statements.

The Company acquired Learning House during fiscal year 2019, and management excluded from its assessment of the effectiveness of the Company’s internal control over financial reporting as of April 30, ~~2016, based on criteria established in~~ ~~Internal Control – Integrated Framework~~ (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)”), and our report dated June 29, 2016 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

~~(signed) KPMG LLP~~

~~Short Hills, New Jersey~~

~~June 29, 2016~~

~~Report of Independent Registered Public Accounting Firm~~

~~The Board of Directors and Shareholders~~

~~John Wiley & Sons, Inc.:~~

~~We have audited John Wiley & Sons, Inc.’s~~2019, Learning House’s internal control over financial reporting associated with approximately 1% of total consolidated assets, excluding goodwill and intangibles which are included within the scope of the assessment, and approximately 2% of total consolidated revenues of the Company as of and for the year ended April 30, ~~2016, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee~~2019. Our audit of ~~Sponsoring Organizations~~internal control over financial reporting of the ~~Treadway Commission (COSO). John Wiley & Sons, Inc.’s~~Company also excluded an evaluation of the internal control over financial reporting of Learning House.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report onOn Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the ~~Public Company Accounting Oversight Board (United States).~~PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Index

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ KPMG LLP

~~In our opinion, John Wiley & Sons, Inc. maintained, in all material respects, effective internal control over financial reporting as of April 30, 2016, based on criteria established in~~ New York, New York~~Internal Control – Integrated Framework~~
~~(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.~~July 1, 2019

Index

~~We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated statements of financial position of~~ 48

John Wiley & Sons, Inc. and ~~subsidiaries as~~Subsidiaries

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

Dollars in thousands

	April 30,
	2019			2018
Assets:
Current Assets
Cash and cash equivalents	$	92,890		$	169,773
Accounts receivable, net		294,867			212,377
Inventories, net		35,582			39,489
Prepaid expenses and other current assets		67,441			58,332
Total Current Assets		490,780			479,971

Product Development Assets		62,470			78,814
Royalty Advances, net		36,185			37,058
Technology, Property and Equipment, net		289,021			289,934
Intangible Assets, net		865,572			848,071
Goodwill		1,095,666			1,019,801
Other Non-Current Assets		97,308			85,802
Total Assets	$	2,937,002		$	2,839,451

Liabilities and Shareholders’ Equity:
Current Liabilities
Accounts payable	$	90,980		$	90,097
Accrued royalties		78,062			73,007
Contract liability (Deferred revenue)		507,365			486,353
Accrued employment costs		97,230			116,179
Accrued income taxes		21,025			13,927
Other accrued liabilities		75,900			94,748
Total Current Liabilities		870,562			874,311

Long-Term Debt		478,790			360,000
Accrued Pension Liability		166,331			190,301
Deferred Income Tax Liabilities		143,775			143,518
Other Long-Term Liabilities		96,197			80,764
Total Liabilities		1,755,655			1,648,894

Shareholders’ Equity
Preferred Stock, $1 par value: Authorized – 2 million, Issued – 0		—			—
Class A Common Stock, $1 par value: Authorized – 180 million, Issued – 70,126,963 and 70,110,603 as of April 30, 2019 and 2018, respectively		70,127			70,111
Class B Common Stock, $1 par value: Authorized – 72 million, Issued – 13,054,707 and 13,071,067 as of April 30, 2019 and 2018, respectively		13,055			13,071
Additional paid-in capital		422,305			407,120
Retained earnings		1,931,074			1,834,057
Accumulated other comprehensive (loss):
Foreign currency translation adjustment		(312,107	)		(251,573	)
Unamortized retirement costs, net of tax		(196,057	)		(191,026	)
Unrealized (loss) gain on interest rate swap, net of tax		(574	)		3,019
Total accumulated other comprehensive loss, net of tax		(508,738	)		(439,580	)
Less: Treasury Shares At Cost (Class A – 22,633,869 and 21,853,257 as of April 30, 2019 and 2018, respectively, Class B – 3,917,574 and 3,917,574 of April 30, 2019 and 2018, respectively)		(746,476	)		(694,222	)
Total Shareholders’ Equity		1,181,347			1,190,557
Total Liabilities and Shareholders’ Equity	$	2,937,002		$	2,839,451

See accompanying Notes to Consolidated Financial Statements.

Index

John Wiley & Sons, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF INCOME

Dollars in thousands, except per share data

	For the Years Ended April 30,
	2019			2018 ⁽¹⁾⁽²⁾			2017 ⁽¹⁾⁽²⁾
Revenue, net	$	1,800,069		$	1,796,103		$	1,718,530

Costs and Expenses
Cost of sales ⁽²⁾		554,722			531,024			500,794
Operating and administrative expenses ⁽¹⁾⁽²⁾		963,582			956,822			943,242
Restructuring and related charges		3,118			28,566			13,355
Amortization of intangibles		54,658			48,230			49,669
Total Costs and Expenses		1,576,080			1,564,642			1,507,060

Operating Income		223,989			231,461			211,470

Interest Expense		(16,121	)		(13,274	)		(16,938	)
Foreign Exchange Transaction (Losses) Gains		(6,016	)		(12,819	)		421
Interest and Other Income (Expense) ⁽¹⁾		11,100			8,563			(3,837	)

Income Before Taxes		212,952			213,931			191,116
Provision for Income Taxes		44,689			21,745			77,473

Net Income	$	168,263		$	192,186		$	113,643

Earnings Per Share
Basic	$	2.94		$	3.37		$	1.98
Diluted	$	2.91		$	3.32		$	1.95

Weighted Average Number of Common Shares Outstanding
Basic		57,192			57,043			57,337
Diluted		57,840			57,888			58,199

See accompanying Notes to Consolidated Financial Statements.

(1)

Due to the retrospective adoption of Accounting Standards Update (“ASU”) 2017-07, “Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost,”, total net benefits (costs) of $8.1 million and $(5.3) million related to the non-service components of defined benefit and other post-employment benefit plans were reclassified from Operating and Administrative Expenses to Interest and Other Income (Expense) for the years ended April 30, 2018 and 2017, respectively. Total net benefits (costs) related to the non-service components of defined benefit and other post-employment benefit plans were $8.8 million for the year ended April 30, 2019. Refer to Note 2, "Summary of Significant Accounting Policies, Recently Issued, and Recently Adopted Accounting Standards," in the Notes to Consolidated Financial Statements for more information.

(2)

In connection with the acquisition of The Learning House, Inc. (“Learning House”), we changed our accounting policy for certain advertising and marketing costs incurred by our Education Services business to fulfill performance obligations from contracts with educational institutions. Under the new accounting policy, these costs are included in Cost of Sales whereas they were previously included in Operating and Administrative Expenses on the Consolidated Statements of Income. Including these expenses in Cost of Sales will better align these costs with the related revenue and conform with the presentation of such costs for Learning House. This change in accounting policy was applied retrospectively.

The Consolidated Statements of ~~April 30, 2016 and 2015, and~~Income for the ~~related consolidated statements of income, comprehensive income (loss), cash flows and shareholders’ equity for each of the~~ years ~~in the three-year period~~ ended April 30, ~~2016,~~2018, and ~~our report dated June 29, 2016 expressed~~2017 have been reclassified to reflect this change in accounting policy. The impact of this reclassification was an ~~unqualified opinion~~increase to Cost of Sales and a corresponding decrease to Operating and Administrative Expenses of $45.8 million and $40.0 million for the years ended April 30, 2018, and 2017, respectively. This reclassification had no impact on ~~those consolidated financial statements.~~

~~(signed) KPMG LLP~~

~~Short Hills, New Jersey~~

~~June 29, 2016~~Revenue, net, Operating Income, Net Income, or Earnings per Share. Refer to “Change in Accounting Policy” in Note 2, "Summary of Significant Accounting Policies, Recently Issued, and Recently Adopted Accounting Standards," for more information on the accounting policy change and Note 4, “Acquisition,” in the Notes to Consolidated Financial Statements for more information related to the acquisition of Learning House.

Index

62John Wiley & Sons, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Dollars in thousands

	For the Years Ended April 30,
	2019			2018			2017
Net Income	$	168,263		$	192,186		$	113,643

Other Comprehensive (Loss) Income:
Foreign currency translation adjustment		(60,534	)		67,639			(51,292	)
Unrealized retirement costs, net of tax benefit of $1,337, $252, and $3,286, respectively		(5,031	)		(524	)		(11,097	)
Unrealized (loss) gain on interest rate swaps, net of tax benefit (expense) of $1,161, $(459), and $(1,709), respectively		(3,593	)		592			2,788
Total Other Comprehensive (Loss) Income		(69,158	)		67,707			(59,601	)

Comprehensive Income	$	99,105		$	259,893		$	54,042

See accompanying Notes to Consolidated Financial Statements.

Index

John Wiley & Sons, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

Dollars in thousands

	For the Years Ended April 30,
	2019			2018			2017
Operating Activities
Net Income	$	168,263		$	192,186		$	113,643
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of intangibles		54,658			48,230			49,669
Amortization of product development assets		37,079			41,432			40,209
Depreciation and amortization of technology, property and equipment		69,418			64,327			66,683
Restructuring charges		3,118			28,566			13,355
Deferred income tax benefit on U.K. rate changes		—			—			(2,575	)
Stock-based compensation expense		18,327			11,244			17,552
Excess tax benefits from stock-based compensation		—			—			(414	)
Employee retirement plan expense		5,236			7,388			13,169
Royalty advances		(129,949	)		(122,602	)		(112,370	)
Earned royalty advances		129,125			116,620			114,647
Impairment of publishing brand		—			3,600			—
Foreign currency gains (losses)		6,016			12,819			(421	)
Unfavorable tax litigation		—			—			49,029
One-time pension settlement		—			—			8,842
Other non-cash credits		(11,934	)		(30,752	)		(6,450	)
Changes in Operating Assets and Liabilities
Accounts receivable, net		(52,939	)		(14,209	)		(29,886	)
Inventories, net		3,820			13,517			8,003
Accounts payable		7,369			16,543			(24,182	)
Accrued royalties		6,169			3,664			4,325
Contract liability (Deferred revenue)		18,106			36,243			22,692
Accrued income taxes		9,613			(565	)		19,479
Restructuring payments		(15,219	)		(30,595	)		(22,854	)
Other accrued liabilities		(32,713	)		1,022			10,367
Employee retirement plan contributions		(40,470	)		(27,550	)		(39,687	)
Other		(2,262	)		11,194			2,078
Net Cash Provided by Operating Activities		250,831			382,322			314,903
Investing Activities
Product development spending		(24,426	)		(36,503	)		(43,603	)
Additions to technology, property and equipment		(77,167	)		(114,225	)		(105,058	)
Acquisitions of publication rights and other		(9,494	)		(26,683	)		(28,842	)
Businesses acquired in purchase transactions, net of cash acquired		(190,415	)		—			(125,924	)
Proceeds from settlement of foreign exchange forward contracts		—			—			60,417
Net Cash Used in Investing Activities		(301,502	)		(177,411	)		(243,010	)
Financing Activities
Repayment of long-term debt		(476,246	)		(467,915	)		(923,007	)
Borrowing of long-term debt		596,320			459,304			683,000
Purchase of treasury shares		(59,994	)		(39,688	)		(50,326	)
Change in book overdrafts		(5,674	)		(4,191	)		(214	)
Cash dividends		(75,752	)		(73,542	)		(71,545	)
Net proceeds from exercise of stock options and other		3,751			29,201			15,506
Excess tax benefits from stock-based compensation		—			—			414
Net Cash Used in Financing Activities		(17,595	)		(96,831	)		(346,172	)
Effects of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash ⁽¹⁾		(8,443	)		3,661			(31,011	)
Cash, Cash Equivalents and Restricted Cash ⁽¹⁾
(Decrease)/Increase for year		(76,709	)		111,741			(305,290	)
Balance at beginning of year		170,257			58,516			363,806
Balance at end of year		93,548			170,257			58,516
Cash Paid During the Year for
Interest	$	14,867		$	12,221		$	15,733
Income taxes, net of refunds	$	48,264		$	48,709		$	33,674

Non-cash items:
Non-cash items associated with the acquisition of Learning House:
Warrants to purchase 0.4 million shares of Wiley Class A Common Stock issued in connection with the Learning House acquisition	$	565			—			—

See accompanying Notes to Consolidated Financial Statements.

Index

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
John Wiley & Sons, Inc., and Subsidiaries April 30,
Dollars in thousands 2016 2015
Assets:
Current Assets
Cash and cash equivalents $ 363,806 $ 457,441
Accounts receivable 167,638 147,183
Inventories 57,779 63,779
Prepaid and other 81,456 72,516
Total Current Assets 670,679 740,919

Product Development Assets 72,126 69,589
Technology, Property & Equipment 214,770 193,010
Intangible Assets 877,007 917,621
Goodwill 951,663 962,367
Income Tax Deposits 62,912 57,098
Other Assets 71,939 63,639
Total Assets $ 2,921,096 $ 3,004,243

Liabilities and Shareholders’ Equity:
Current Liabilities
Short-term debt $ - $ 100,000
Accounts and royalties payable 166,222 161,465
Deferred revenue 426,489 372,051
Accrued employment costs 97,902 93,922
Accrued income taxes 9,450 9,484
Accrued pension liability 5,492 4,594
Other accrued liabilities 76,252 62,167
Total Current Liabilities 781,807 803,683

Long-Term Debt 605,007 650,090
Accrued Pension Liability 224,170 209,727
Deferred Income Tax Liabilities 189,868 198,947
Other Long-Term Liabilities 83,138 86,756
Shareholders’ Equity
Preferred Stock, $1 par value: Authorized - 2 million, Issued - zero - -
Class A Common Stock, $1 par value: Authorized - 180 million,
Issued – 69,797,994 69,798 69,798
Class B Common Stock, $1 par value: Authorized - 72 million,
Issued – 13,392,268 13,392 13,392
Additional paid-in capital 368,698 353,018
Retained earnings 1,673,325 1,597,439
Accumulated other comprehensive (loss):
Foreign currency translation adjustment (267,920) (246,854)
Unamortized retirement costs, net of tax (179,405) (159,434)
Unrealized loss on interest rate swap, net of tax (361) (345)
(447,686) (406,633)
Less Treasury Shares At Cost (Class A – 21,708,905 and 20,441,767;
Class B – 3,917,128 and 3,910,264) (640,421) (571,974)
Total Shareholders’ Equity 1,037,106 1,055,040
Total Liabilities and Shareholders’ Equity $ 2,921,096 $ 3,004,243

The accompanying notes are an integral part of the consolidated financial statements.

⁽¹⁾

Due to the retrospective adoption of ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash,” we are now required to include restricted cash as part of the change in cash, cash equivalents, and restricted cash. As a result, amounts which were previously classified as cash flows from operating activities have been reclassified as they are recognized in the total change in cash, cash equivalents and restricted cash. Refer to Note 2, "Summary of Significant Accounting Policies, Recently Issued, and Recently Adopted Accounting Standards," in the Notes to Consolidated Financial Statements for more information.

Index

6353

CONSOLIDATED STATEMENTS OF INCOME

John Wiley & Sons, Inc., and Subsidiaries For the years ended April 30,
Dollars in thousands, except per share data 2016 2015 2014

Revenue $ 1,727,037 $ 1,822,440 $ 1,775,195

Costs and Expenses
Cost of sales 465,917 499,683 506,879
Operating and administrative expenses 994,632 1,005,000 969,456
Restructuring charges 28,611 28,804 42,722
Impairment charges - - 4,786
Amortization of intangibles 49,764 51,214 44,679
Total Costs and Expenses 1,538,924 1,584,701 1,568,522

Operating Income 188,113 237,739 206,673

Interest expense (16,707) (17,077) (13,916)
Foreign exchange transaction gains (losses) 473 1,742 (8)
Interest income and other 2,914 3,057 2,785

Income Before Taxes 174,793 225,461 195,534
Provision for Income Taxes 29,011 48,593 35,024

Net Income $ 145,782 $ 176,868 $ 160,510

Earnings Per Share
Diluted $ 2.48 $ 2.97 $ 2.70
Basic 2.51 3.01 2.73

Cash Dividends Per Share
Class A Common $ 1.20 $ 1.16 $ 1.00
Class B Common 1.20 1.16 1.00

Average Shares
Diluted 58,734 59,594 59,514
Basic 57,998 58,733 58,635

The accompanying notes are an integral part of the consolidated financial statements.

64John Wiley & Sons, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

Dollars in thousands

	Common Stock Class A		Common Stock Class B			Additional Paid-in Capital			Retained Earnings			Treasury Stock			Accumulated Other Comprehensive Loss			Total Shareholder’s Equity
Balance at April 30, 2016	$	69,798	$	13,392		$	368,698		$	1,673,325		$	(640,421	)	$	(447,686	)	$	1,037,106

Restricted Shares Issued under Stock-based Compensation Plans		—		—			(7,617	)		—			8,013			—			396
Net (Payments)/Proceeds from Exercise of Stock Options and Other		—		—			8,849			—			6,657			—			15,506
Excess Tax Benefits from Stock-based Compensation		—		—			414			—			—			—			414
Stock-based Compensation Expense		—		—			17,552			—			—			—			17,552
Purchase of Treasury Shares		—		—			—			—			(50,326	)		—			(50,326	)
Class A Common Stock Dividends ($1.24 per share)		—		—			—			(60,143	)		—			—			(60,143	)
Class B Common Stock Dividends ($1.24 per share)		—		—			—			(11,402	)		—			—			(11,402	)
Common Stock Class Conversions		288		(296	)		—			—			—			—			(8	)
Comprehensive Income (Loss), Net of Tax		—		—			—			113,643			—			(59,601	)		54,042
Balance at April 30, 2017	$	70,086	$	13,096		$	387,896		$	1,715,423		$	(676,077	)	$	(507,287	)	$	1,003,137

Restricted Shares Issued under Stock-based Compensation Plans		—		—			(7,646	)		(10	)		7,968			—			312
Net Proceeds from Exercise of Stock Options and Other		—		—			15,686			—			13,515			—			29,201
Stock-based Compensation Expense		—		—			11,184			—			60			—			11,244
Purchase of Treasury Shares		—		—			—			—			(39,688	)		—			(39,688	)
Class A Common Stock Dividends ($1.28 per share)		—		—			—			(61,813	)		—			—			(61,813	)
Class B Common Stock Dividends ($1.28 per share)		—		—			—			(11,729	)		—			—			(11,729	)
Common Stock Class Conversions		25		(25	)		—			—			—			—			—
Comprehensive Income, Net of Tax		—		—			—			192,186			—			67,707			259,893
Balance at April 30, 2018	$	70,111	$	13,071		$	407,120		$	1,834,057		$	(694,222	)	$	(439,580	)	$	1,190,557

Restricted Shares Issued under Stock-based Compensation Plans		—		—			(8,544	)		3			8,826			—			285
Net Proceeds from Exercise of Stock Options and Other		—		—			4,837			—			(1,086	)		—			3,751
Stock-based Compensation Expense		—		—			18,327			—			—			—			18,327
Purchase of Treasury Shares		—		—			—			—			(59,994	)		—			(59,994	)
Class A Common Stock Dividends ($1.32 per share)		—		—			—			(63,684	)		—			—			(63,684	)
Class B Common Stock Dividends ($1.32 per share)		—		—			—			(12,068	)		—			—			(12,068	)
Common Stock Class Conversions		16		(16	)		—			—			—			—			—
Issuance of Warrants Related to Acquisition of a Business		—		—			565			—			—			—			565
Adjustment Due to Adoption of New Revenue Standard		—		—			—			4,503			—			—			4,503
Comprehensive Income (Loss), Net of Tax		—		—			—			168,263			—			(69,158	)		99,105
Balance at April 30, 2019	$	70,127	$	13,055		$	422,305		$	1,931,074		$	(746,476	)	$	(508,738	)	$	1,181,347

See accompanying Notes to Consolidated Financial Statements.

Index

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

John Wiley & Sons, Inc., and Subsidiaries For the years ended April 30,
Dollars in thousands 2016 2015 2014

Net Income $ 145,782 $ 176,868 $ 160,510

Other Comprehensive Income (Loss):
Foreign currency translation adjustment (21,066) (180,190) 67,875
Unrealized retirement costs net of tax benefit (provision) of $8,807; $15,779 and $(12,946), respectively (19,971) (36,409) 20,099
Unrealized (loss) gain on interest rate swaps net of tax benefit (provision) of $10; $(157) and $(225), respectively (16) 257 367
Total Other Comprehensive Income (Loss) (41,053) (216,342) 88,341

Comprehensive Income (Loss) $ 104,729 $ (39,474) $ 248,851

The accompanying notes are an integral part of the consolidated financial statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS

John Wiley & Sons, Inc., and Subsidiaries For the years ended April 30,
Dollars in thousands 2016 2015 2014
Operating Activities
Net Income $ 145,782 $ 176,868 $ 160,510
Adjustments to reconcile net income to net cash provided by operating activities
Amortization of intangibles     49,764 51,214 44,679
Amortization of composition costs     39,658 40,639 45,097
Depreciation of technology, property and equipment     66,427 62,072 58,321
Restructuring  and impairment charges     28,611 28,804 47,508
Deferred tax benefits on U.K. rate changes     (5,859) - (10,634)
Share-based compensation 16,105 13,617 12,851
(Excess) shortfalls in tax benefits from share-based compensation      (1,027) (3,191) 1,466
Employee retirement plan expense     14,323 22,599 30,454
Royalty advances (110,135) (104,876) (107,639)
Earned royalty advances   109,102 110,054 107,529
Other non-cash credits, net         1,463 (8,046) (3,626)
Income tax deposits      (1,151) (5,280) (11,968)
Changes in Operating Assets and Liabilities
Source (Use), excluding acquisitions
Accounts receivable (14,456) 4,488 18,558
Inventories 3,571 9,696 11,146
Accounts and royalties payable 3,997 31,305 7,297
Deferred revenue 66,983 3,913 (750)
Income taxes payable (7,091) 8,330 (14,131)
Restructuring payments (29,864) (32,341) (28,276)
Other accrued liabilities 14,968 (10,901) 30,581
Employee retirement plan contributions (34,214) (28,503) (33,889)
Other (7,000) (15,339) (16,860)
Cash Provided by Operating Activities 349,957 355,122 348,224
Investing Activities
Composition spending (37,272) (39,421) (40,568)
Additions to technology, property and equipment (93,705) (69,121) (57,564)
Acquisitions, net of cash acquired (20,418) (172,229) (54,515)
Proceeds from sale of consumer publishing programs - 1,100 3,300
Cash Used for Investing Activities (151,395) (279,671) (149,347)
Financing Activities
Repayment of long-term debt (460,085) (711,654) (658,224)
Repayment of short-term debt (150,000) - -
Borrowings of long-term debt   415,000 659,369 685,324
Borrowing of short-term debt     50,000 100,000 -
Purchase of treasury stock    (69,977) (61,981) (63,393)
Change in book overdrafts       1,725 (6,711) (12,354)
Cash dividends    (69,896) (68,498) (58,953)
Debt financing costs      (3,362) - -
Net (payments)/proceeds from exercise of stock options and other          (95) 25,326 55,532
Excess (shortfalls ) in tax benefits from share-based compensation       1,027 3,191 (1,466)
Cash Used for Financing Activities (285,663) (60,958) (53,534)
Effects of Exchange Rate Changes on Cash      (6,534) (43,429) 6,894
Cash and Cash Equivalents
(Decrease) Increase for year    (93,635) (28,936) 152,237
Balance at beginning of year   457,441 486,377 334,140
Balance at end of year   363,806 457,441 486,377
Cash Paid During the Year for
Interest $     15,050 $ 14,875 $ 12,511
Income taxes, net $     38,579 $ 45,646 $ 63,815

The accompanying notes are an integral part of the consolidated financial statements

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

Common
Stock
Class A
Common
Stock
Class B
Additional
Paid-in
Capital
Retained
Earnings
Treasury
Stock
Accumulated
Other Comp-
rehensive
Income
(Loss)
Total
Share-
holder’s
Equity

John Wiley & Sons, Inc., and Subsidiaries
Dollars in thousands

Balance at April 30, 2013 $69,793 $13,397 $290,762 $1,387,512 $(494,476) $(278,632) $988,356

Restricted Shares Issued under Share-based Compensation Plans (5,962) 6,144 182
Proceeds from Exercise of Stock Options and other 31,403 24,417 55,820
Shortfall in Tax Benefits from Share-based Compensation (1,466) (1,466)
Share-based compensation expense 12,851 12,851
Purchase of Treasury Shares (63,393) (63,393)
Class A Common Stock Dividends (51,842) (51,842)
Class B Common Stock Dividends (7,111) (7,111)
Common Stock Class Conversions 5 (5) -
Comprehensive Income 160,510 88,341 248,851

Balance at April 30, 2014 $69,798 $13,392 $327,588 $1,489,069 $(527,308) $(190,291) $1,182,248

Restricted Shares Issued under Share-based Compensation Plans (3,471) 4,085 614
Proceeds from Exercise of Stock Options and other 12,093 13,230 25,323
Excess Tax Benefits from Share-based Compensation 3,191 3,191
Share-based compensation expense 13,617 13,617
Purchase of Treasury Shares (61,981) (61,981)
Class A Common Stock Dividends (57,541) (57,541)
Class B Common Stock Dividends (10,957) (10,957)
Comprehensive Income (Loss) 176,868 (216,342) (39,474)

Balance at April 30, 2015 $69,798 $13,392 $353,018 $1,597,439 $(571,974) $(406,633) $1,055,040

Restricted Shares Issued under Share-based Compensation Plans (3,152) 3,325 173
Net (Payments)/Proceeds from Exercise of Stock Options and other 1,700 (1,795) (95)
Excess Tax Benefits from Share-based Compensation 1,027 1,027
Share-based compensation expense 16,105 16,105
Purchase of Treasury Shares (69,977) (69,977)
Class A Common Stock Dividends (58,658) (58,658)
Class B Common Stock Dividends (11,238) 11,238
Comprehensive Income (Loss) 145,782 (41,053) 104,729

Balance at April 30, 2016 $69,798 $13,392 $368,698 $1,673,325 $(640,421) $(447,686) $1,037,106

The accompanying notes are an integral part of the consolidated financial statements.

John Wiley & Sons, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 1 – Description of Business

The Company, founded in 1807, was incorporated in the state of New York on January 15, 1904. ~~As used herein~~Throughout this report, when we refer to “Wiley,” the ~~term “Company” means~~“Company,” “we,” “our,” or “us,” we are referring to John Wiley & Sons, Inc., and ~~its~~all of our subsidiaries, ~~and affiliated companies, unless~~except where the context indicates otherwise.

~~The Company is~~We are a global ~~provider of knowledge~~research and ~~knowledge-enabled services that improve outcomes in areas of research, professional practice and education.~~learning company. Through ~~the~~ our Research segment, ~~the Company provides digital and print~~we provide scientific, technical, medical, and scholarly journals, ~~reference works, books, database~~as well as related content and services, to academic, corporate, and ~~advertising.~~government libraries, learned societies, and individual researchers and other professionals. The ~~Professional Development~~Publishing segment provides ~~digital~~scientific, professional, and ~~print~~education books ~~corporate learning solutions, employment assessment~~ and ~~training services, and test prep and certification. In Education, the Company provides~~related content in print and digital ~~content,~~formats, as well as test preparation services and ~~education solutions including~~course workflow tools, to libraries, corporations, students, professionals, and researchers. The Solutions segment provides online program management services for higher education institutions and ~~course management tools~~learning, development, and assessment services for ~~instructors~~businesses and students. The Company takes full advantage of its content from all three businesses in developing and cross-marketing products to its diverse customer base of researchers, professionals, students, and educators. The use of technology enables the Company to make its content efficiently more accessible to its customers around the world. The Company’sprofessionals. We have operations ~~are~~ primarily located in the United States, ~~Canada, Europe, Asia,~~United Kingdom (“U.K.”), Germany, Russia, Singapore, and ~~Australia.~~France.

Note 2 - – Summary of Significant Accounting Policies, Recently Issued, and Recently Adopted Accounting Standards

Summary of Significant Accounting Policies

~~Principles~~

Basis of ~~Consolidation:~~ ~~The consolidated financial statements~~Presentation:

Our Consolidated Financial Statements include all of the accounts of the ~~Company. Investments~~Company and our subsidiaries. We have eliminated all intercompany transactions and balances in ~~entities~~consolidation. All amounts are in ~~which~~thousands, except per share amounts, and approximate due to rounding.

Change in Accounting Policy:

In connection with the ~~Company has at least a 20%~~acquisition of Learning House (See Note 4, “Acquisition”), ~~but less than a majority interest,~~we changed our accounting policy for certain advertising and marketing costs incurred by our Education Services business to fulfill performance obligations from contracts with educational institutions. Under the new accounting policy, these costs are ~~accounted~~included in Cost of Sales whereas they were previously included in Operating and Administrative Expenses on the Consolidated Statements of Income. Including these expenses in Cost of Sales will better align these costs with the related revenue and conform with the presentation of such costs for ~~using~~Learning House. This change in accounting policy was applied retrospectively.

The Consolidated Statements of Income for the ~~equity method of accounting. Investments in entities in which the Company has less than a 20% ownership~~years ended April 30, 2018 and ~~in which it does not exercise significant influence are accounted for using the cost method of accounting. All intercompany accounts and transactions~~2017 have been ~~eliminated~~reclassified to reflect this change in ~~consolidation.~~accounting policy. The impact of this reclassification was an increase to Cost of Sales and a corresponding decrease to Operating and Administrative Expenses of $45.8 million and $40.0 million for the years ended April 30, 2018 and 2017, respectively. This reclassification had no impact on Revenue, net, Operating Income, Net Income, or Earnings per Share on the Consolidated Statements of Income.

Reclassifications:

Certain prior year amounts have been reclassified to conform to the current year’s presentation.

Use of Estimates:

The preparation of ~~the Company’s financial statements~~our Consolidated Financial Statements and related disclosures in conformity with ~~accounting principles generally accepted in the United States~~U.S. GAAP requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities, ~~and~~the disclosure of contingent assets and liabilities as of the date of the financial statements and ~~reported amounts of~~ revenue and expenses during the reporting period. These estimates include, among other items, revenue recognition, sales return reserves, allocation of acquisition purchase price to assets acquired and liabilities assumed, goodwill and indefinite-lived intangible assets, intangible assets with finite lives and other long-lived assets, and retirement plans. We review these estimates and assumptions periodically using historical experience and other factors and reflect the effects of any revisions on the Consolidated Financial Statements in the period we determine any revisions to be necessary. Actual results could differ from those ~~estimates.~~estimates, which could affect the reported results.

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~~Reclassifications:~~ ~~Certain prior year amounts have been reclassified to conform to the current year’s presentation.~~

Book Overdrafts:

Under ~~the Company’s~~our cash management system, a book overdraft balance exists for ~~the Company’s~~our primary disbursement accounts. This overdraft represents uncleared checks in excess of cash balances in individual bank accounts. ~~The Company’s~~Our funds are transferred from other existing bank account balances or from lines of credit as needed to fund checks presented for payment. As of April 30, ~~2016~~2019 and ~~2015,~~2018, book overdrafts of ~~$17.8~~$7.4 million and ~~$16.1~~$13.1 million, respectively, were included in Accounts ~~and Royalties~~ Payable inon the Consolidated Statements of Financial Position.

See Note 3, “Revenue Recognition, Contracts with Customers,” of the ~~above criteria have been met,~~Notes to Consolidated Financial Statements for details of our revenue is recognized upon shipment of products or when services have been rendered. Revenue related to journal subscriptions and other products and services that are generally collected in advance are deferred and recognized as earned over the term of the subscription; when the related issue is shipped; made available online; or the service is rendered, in accordance with contractual terms. Collectability is evaluated based on the amount involved, the credit history of the customer, and the status of the customer’s account with the Company.recognition policy.

The Company transitioned from issue-based to time-based digital journal subscription agreements for calendar year 2016. Under this new contractual agreement, the Company provides access to all journal content published within a calendar yearCash and recognizes revenue on a straight-line basis over the calendar year. Under the Company’s previous licensing model, a customer subscribed to a discrete number of online journal issues and revenue was recognized as each issue was made available online. The Company made these changes to simplify the contracting and administration of digital journal subscriptions.

When a product is sold with multiple deliverables, the Company accounts for each deliverable within the arrangement as a separate unit of accounting due to the fact that each deliverable is also sold on a stand-alone basis. The total consideration of a multiple-element arrangement is allocated to each unit of accounting based on the price charged by the Company when it is sold separately. The Company’s multiple deliverable arrangements principally include ~~WileyPLUS~~, the online course management tool for the Company’s Education business which includes a complete print or digital textbook for the course; negotiated licenses for bundles of digital content available on ~~Wiley Online Library~~, the online publishing platform for the Company’s Research business; and test preparation, assessment, certification and training services sold by the Professional Development business which can include bundles of print and digital content and online workflow solutions.

Cash Equivalents:

Cash and cash equivalents consist of highly liquid investments with an original maturity of three months or less at the time of purchase and are stated at cost, ~~plus accrued interest,~~ which approximates market ~~value.~~value, because of the short-term maturity of the instruments.

Allowance for Doubtful Accounts:

The estimated allowance for doubtful accounts is based on a review of the aging of the accounts receivable balances, historical write-off experience, credit evaluations of customers, and current market conditions. A change in the evaluation of a customer’s credit could affect the estimated allowance. The allowance for doubtful accounts is shown as a reduction of Accounts Receivable, innet on the Consolidated Statements of Financial Position and amounted to ~~$7.3~~$14.3 million and ~~$8.3~~$10.1 million as of April 30, ~~2016~~2019 and ~~2015,~~2018, respectively.

Sales Return Reserves:

The process ~~which the Company uses~~that we use to determine ~~its~~our sales returns and the related reserve provision charged against revenue is based on applying an estimated return rate to current year returnable print book sales. This rate is based upon an analysis of actual historical return experience in the various markets and geographic regions in which ~~the Company does~~we do business. ~~The Company collects, maintains~~We collect, maintain and ~~analyzes~~analyze significant amounts of sales returns data for large volumes of homogeneous transactions. This allows ~~the Company~~us to make reasonable estimates of the amount of future returns. All available data is utilized to identify the returns by market and as to which fiscal year the sales returns apply. This enables management to track the returns in detail and identify and react to trends occurring in the marketplace, with the objective of being able to make the most informed judgments possible in setting reserve rates. Associated with the estimated sales return reserves, ~~the Company~~we also ~~includes~~include a related ~~reduction in~~increase to inventory and ~~royalty costs~~a reduction to accrued royalties as a result of the expected returns. ~~Net print~~Print book sales return reserves amounted to ~~$19.9~~a net liability balance of $18.5 million and ~~$25.3~~$18.6 million as of April 30, ~~2016~~2019 and ~~2015,~~2018, respectively.

The reserves are reflected in the following accounts of the Consolidated Statements of Financial Position – increase (decrease):

	2019			2018
Accounts receivable, net ⁽¹⁾	$	—		$	(28,302	)
Inventories, net	$	3,739		$	4,626
Accrued royalties	$	(3,653	)	$	(5,048	)
Contract liability (Deferred revenue) ⁽¹⁾	$	25,934		$	—
Decrease in Net Assets	$	(18,542	)	$	(18,628	)

⁽¹⁾ Due to the adoption of the new revenue standard, See Note 3, Revenue from Contracts with Customers the sales return reserve as of April ~~30:~~30, 2019 of $25.9 million is recorded in Contract Liability (Deferred Revenue). In prior periods, the sales return reserve of $28.3 million was recorded as a reduction to Accounts Receivable, net on the Consolidated Statements of Financial Position.

2016 2015
Accounts Receivable $(29,447) $(37,300)
Inventories 4,924 6,555
Accounts and Royalties Payable (4,662) (5,405)
Decrease in Net Assets $(19,861) $(25,340)

Inventories:

~~Inventories:~~Inventories are carried at the lower of cost or market. U.S. book inventories aggregating ~~$31.0~~$21.0 million and ~~$35.7~~$24.0 million at April 30, ~~2016~~2019 and ~~2015,~~2018, respectively, are valued using the last-in, first-out (LIFO) method. All other inventories are valued using the first-in, first-out (FIFO) method.

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Reserve for Inventory Obsolescence:

A reserve for inventory obsolescence is estimated based on a review of damaged, obsolete, or otherwise unsalable inventory. The review encompasses historical unit sales trends by ~~title;~~title, current market conditions, including estimates of customer demand compared to the number of units currently on ~~hand;~~hand, and publication revision cycles. The inventory obsolescence reserve is reported as a reduction of the Inventories, net balance inon the Consolidated Statements of Financial Position and amounted to ~~$22.0~~$15.8 million and ~~$21.9~~$18.2 million as of April 30, ~~2016~~2019 and ~~2015,~~2018, respectively.

Product Development Assets:

Product development assets consist of book composition costs and ~~royalty advances.~~other product development costs. Costs associated with developing a book publication are expensed until the product is determined to be commercially viable. ~~Composition~~Book composition costs represent the costs incurred to bring an edited commercial manuscript to publication, which include typesetting, proofreading, design, illustration costs, and digital formatting. ~~Composition~~Book composition costs are capitalized and are generally amortized on a double-declining basis over their estimated useful lives, ranging from 1 to 3 years. Other product development costs represent the costs incurred in developing software, platforms, and digital content to be sold and licensed to third parties. Other product development costs are capitalized and generally amortized on a straight-line basis over their estimated useful lives. As of April 30, 2019, the weighted average estimated useful life of other product development costs was approximately 5 years.

Royalty Advances:

Royalty advances are capitalized and, upon publication, are expensed as royalties earned based on sales of the published works. Royalty advances are reviewed for recoverability and a reserve for loss is maintained, if appropriate.

Shipping and Handling Costs:

Costs incurred for third party shipping and handling are primarily reflected in ~~the~~ Operating and Administrative Expenses ~~line item in~~on the Consolidated Statements of Income. ~~The Company~~We incurred ~~$40.5~~$32.7 million, ~~$42.5~~$33.7 million, and ~~$42.2~~$39.1 million in shipping and handling costs in ~~fiscal~~the years ~~2016, 2015~~ended April 30, 2019, 2018, and ~~2014,~~2017, respectively.

Advertising Expense:

~~Advertising Expense:~~Advertising costs are expensed as incurred. ~~The Company~~We incurred ~~$54.1~~$89.5 million, ~~$40.8~~$68.3 million, and ~~$35.2~~$61.4 million in advertising costs in ~~fiscal~~the years ~~2016, 2015~~ended April 30, 2019, 2018, and ~~2014,~~2017, respectively, and these costs are included in Cost of Sales and Operating and Administrative Expenses on the Consolidated Statements of Income. Advertising costs of $53.7 million, $38.3 million, and $32.4 million were included in Cost of Sales in the years ended April 30, 2019, 2018, and 2017, respectively. Advertising costs of $35.8 million, $30.0 million, and $29.0 million were included in Operating and Administrative Expenses in the years ended April 30, 2019, 2018, and 2017, respectively. Refer to the section above “Change in Accounting Policy” for more information regarding the reclassification of certain advertising and marketing costs incurred by our Education Services business to fulfill performance obligations from contracts with educational institutions.

Technology, Property, and Equipment:

Technology, property, and equipment is recorded at cost. Major renewals and improvements are capitalized, while maintenance and repairs are expensed as incurred.

Technology, property and equipment is depreciated using the straight-line method based upon the following estimated useful lives: Computer Software – 3 to 10 years, Computer Hardware – 3 to 5 years; Buildings and Leasehold Improvements – the lesser of the estimated useful life of the asset up to 40 years or the duration of the lease; Furniture, Fixtures, and ~~Fixtures - 3 to 10 years; Computer Hardware and Software - 3~~Warehouse Equipment – 5 to 10 years.

Costs incurred for computer software internally developed or obtained for internal use are capitalized during the application development stage and expensed as incurred during the preliminary project and post-implementation stages. Costs incurred during the application development stage include costs of materials and services and payroll and payroll-related costs for employees who are directly associated with the software project. Such costs are amortized over the expected useful life of the related software, which is generally 3 to 65 years. Costs related to the investment in ~~the Company’s~~our Enterprise Resource Planning and related systems are amortized over an expected useful life of 10 years. Maintenance, training, and upgrade costs that do not result in additional functionality are expensed as incurred.

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Allocation of Acquisition Purchase Price to Assets Acquired and Liabilities Assumed:

In connection with acquisitions, ~~the Company allocates~~we allocate the cost of the acquisition to the assets acquired and the liabilities assumed based on the estimates of fair value for such items, including intangible assets and technology acquired. Such estimates include discounted estimated cash flows to be generated by those assets and the expected useful lives based on historical experience and current market trends ~~and synergies~~ to be achieved from the acquisition and the expected tax basis of assets acquired. ~~The Company~~We may use a ~~third party~~third-party valuation consultant to assist in the determination of such estimates.

Goodwill and Indefinite-lived Intangible Assets:

Goodwill isrepresents the excess of the ~~purchase price paid over~~aggregate of the following: (1) consideration transferred, (2) the fair value of any noncontrolling interest in the acquiree, and (3) if the business combination is achieved in stages, the acquisition-date fair value of our previously held equity interest in the acquiree over the net ~~assets~~ of the ~~business acquired.~~ acquisition-date amounts of the identifiable assets acquired and the liabilities assumed.

Indefinite-lived intangible assets primarily consist of brands, trademarks, content, and publishing rights and are typically characterized by intellectual property with a long and well-established revenue stream resulting from strong and well-established imprint/brand recognition in the market.

We use the acquisition method of accounting for all business combinations and do not amortize goodwill or intangible assets with indefinite useful lives. Goodwill and ~~indefinite-lived~~ intangible assets with indefinite useful lives are ~~not amortized but are reviewed~~tested for possible impairment annually ~~for impairment,~~during the fourth quarter of each fiscal year, or more frequently if events or changes in circumstances indicate that the asset might be impaired. ~~The Company evaluates the recoverability of indefinite-lived intangible assets by comparing the fair value of the intangible asset to its carrying value.~~

To evaluate the recoverability of goodwill, the Company uses a two-step impairment test approach at the reporting unit level. In the first step, the estimated fair value of the entire reporting unit is compared to its carrying value including goodwill. If the fair value of the reporting unit is less than the carrying value, a second step is performed to determine the charge for goodwill impairment. In the second step, the Company determines an implied fair value of the reporting unit’s goodwill by determining the fair value of the individual assets and liabilities (including any previously unrecognized intangible assets) of the reporting unit other than goodwill. The resulting implied fair value of the goodwill is compared to the carrying amount and an impairment charge is recognized for the difference.

Derivative Financial Instruments:~~The Company, from~~

From time to time, ~~enters~~we enter into foreign exchange forward ~~exchange~~ and interest rate swap contracts as a hedge against foreign currency asset and liability commitments, changes in interest rates, and anticipated transaction exposures, including intercompany purchases. All derivatives are recognized as assets or liabilities and measured at fair value. Derivatives that are not determined to be effective hedges are adjusted to fair value with a corresponding adjustment to earnings. ~~The Company does~~We do not use financial instruments for trading or speculative purposes.

Foreign Currency Gains/Losses: ~~The Company maintains~~

We maintain operations in many non-U.S. locations. Assets and liabilities are translated into U.S. dollars using ~~end of period~~end-of-period exchange rates and revenues and ~~expense~~expenses are translated into U.S. dollars using weighted average rates. ~~The Company’s~~Our significant investments in non-U.S. businesses are exposed to foreign currency risk. Foreign currency translation adjustments are reported as a separate component of Accumulated Other Comprehensive Loss within Shareholders’ Equity. During ~~fiscal~~the year ~~2016, the Company~~ended April 30, 2019, we recorded ~~$21.1~~$60.5 million of foreign currency translation losses primarily ~~due to~~as a result of the ~~strengthening~~fluctuations of the U.S. dollar relative to the British pound ~~sterling.~~ sterling and, to a lesser extent, the euro. Foreign currency transaction gains or losses are recognized inon the Consolidated Statements of Income as incurred.

~~Share-Based~~

Stock-Based Compensation: ~~The Company recognizes share-based~~

We recognize stock-based compensation expense based on the fair value of the ~~share-based~~stock-based awards on the grant date, reduced by an estimate for future forfeited awards. As such, ~~share-based~~stock-based compensation expense is only recognized for those awards that are expected to ultimately vest. The fair value of ~~share-based~~stock-based awards is recognized in net income generally on a straight-line basis over the requisite service period. ~~Share-based~~The grant date fair value for stock options is estimated using the Black-Scholes option-pricing model. The determination of the assumptions used in the Black-Scholes model required us to make judgments and estimates, which include the expected life of an option, the expected volatility of our Common Stock over the estimated life of the option, a risk-free interest rate, and the expected dividend yield. Judgment was also required in estimating the amount of stock-based awards that may be forfeited. Stock-based compensation expense associated with performance-based stock awards is based on actual financial results for targets established three years in advance. The cumulative effect on current and prior periods of a change in the estimated number of performance share awards, or estimated forfeiture rate, is recognized as an adjustment to earnings in the period of the revision. If actual results differ significantly from estimates, our stock-based compensation expense and consolidated results of operations could be impacted.

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Recently ~~Issued~~Adopted Accounting ~~Standards:~~Standards

~~In March 2016, the FASB issued ASU 2016-09 “Compensation-Stock~~

Stock Compensation ~~(Topic 718): Improvements to Employee Share-Based Payment Accounting” which simplifies the accounting for share-based payment transactions, including income taxes, classification~~– Scope of awards as either equity or liabilities, and classification on the statement of cash flows. The new guidance also allows an entity to make an accounting policy election to account for forfeitures when they occur or to estimate the number of awards that are expected to vest with a subsequent true up to actual forfeitures (current GAAP). The standard is effective for the company on May 1, 2017, with early adoption permitted. The Company is currently assessing the impact the new guidance will have on its consolidated financial statements.Modification Accounting

In November 2015, the FASB issued ASU 2015-17 “Income Taxes- Balance Sheet Classification of Deferred Taxes”. To simplify the presentation of deferred income taxes, the amendments in this update require that all deferred tax liabilities and assets, including those previously classified as current, be classified as noncurrent in a classified statement of financial position. The amendments in this Update will align the presentation of deferred income tax assets and liabilities with IFRS. The standard is effective for the company May 1, 2017, ~~with early adoption permitted. The Company is currently assessing the impact the new guidance will have on its consolidated financial statements.~~

~~In May 2014,~~ the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-09, “Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting,” which clarifies when changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. Under the new guidance, modification accounting is only required if the fair value, vesting conditions or classification (equity or liability) of the new award are different from the original award immediately before the original award is modified. We adopted ASU 2017-09 on May 1, 2018 and there was no impact to our consolidated financial statements. The new guidance must be applied prospectively to awards modified on or after the adoption date. The future impact of ASU 2017-09 will be dependent on the nature of future stock award modifications.

Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost

In March 2017, the FASB issued ASU 2017-07, “Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.” The guidance requires that the service cost component of net pension and postretirement benefit costs be reported in the same line item as other compensation costs arising from services rendered by the pertinent employees during the period, while the other components of net benefit costs must be reported separately from the service cost component and below operating income. The guidance also allows only the service cost component to be eligible for capitalization when applicable. We adopted ASU 2017-07 on May 1, 2018. The new guidance must be applied retrospectively for the presentation of net benefit costs in the income statement and prospectively for the capitalization of the service cost component of net benefit costs.

The effect of retrospectively adopting this guidance resulted in a reclassification of net benefits (costs) of $8.1 million and $(5.3) million from Operating and Administrative Expenses to Interest and Other Income (Expense) on the Consolidated Statements of Income for the years ended April 30, 2018 and 2017, respectively. The amount included in Interest and Other Income (Expense) on the Consolidated Statements of Income for the year ended April 30, 2019 was a net benefit of $8.8 million. We do not capitalize any service costs.

Business Combinations: Clarifying the Definition of a Business

In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business”, which clarifies the definition of a business in order to allow for the evaluation of whether transactions should be accounted for as acquisitions or disposals of assets or business. We adopted ASU 2017-01 on May 1, 2018 and the adoption had no impact for us in fiscal year 2019. The future impact of ASU 2017-01 will be dependent upon the nature of future acquisitions or dispositions made by us.

Statement of Cash Flows: Restricted Cash

In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash.” ASU 2016-18 requires that entities include restricted cash and restricted cash equivalents with cash and cash equivalents in the beginning-of-period and end-of-period total amounts shown on the Statement of Cash Flows. We adopted ASU 2016-18 on May 1, 2018. Retrospective transition method is to be applied to each period presented. As a result of this retrospective adoption, the reclassification of restricted cash into a change in total cash resulted in a reduction in Cash Provided By Operating Activities of $0.5 million for the year ended April 30, 2018. There was no impact for the year ended April 30, 2017.

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The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Statements of Financial Position that sum to the total of the same such amounts shown in the Consolidated Statements of Cash Flows.

	April 30, 2019		April 30, 2018		April 30, 2017		April 30, 2016
Cash and cash equivalents	$	92,890	$	169,773	$	58,516	$	363,806
Restricted cash included in Prepaid expenses and other current assets		658		484		—		—
Total cash, cash equivalents, and restricted cash shown in the Consolidated Statement of Cash Flows	$	93,548	$	170,257	$	58,516	$	363,806

Income taxes: Intra-Entity Transfers of Assets Other than Inventory

In October 2016, the FASB issued ASU 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other than Inventory”, which simplifies the accounting for the income tax consequences of intra-entity transfers of assets other than inventory. Current U.S. GAAP prohibits the recognition of current and deferred income taxes for an intra-entity asset transfer until the asset has been sold to an outside party. The new guidance states that an entity should recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. Consequently, the amendments in this Standard eliminate the exception for an intra-entity transfer of an asset other than inventory. We adopted ASU 2016-16 on May 1, 2018. The adoption of ASU 2016-16 did not have a material impact to our consolidated financial statements.

Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments

In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments,” which provides clarification on classifying a variety of activities within the Statement of Cash Flows. We adopted ASU 2016-15 on May 1, 2018. The adoption of ASU 2016-15 did not have a material impact to our consolidated statements of cash flows.

Financial Instruments: Recognition and Measurement of Financial Assets and Financial Liabilities

In January 2016, the FASB issued ASU 2016-01, “Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.” Subsequently, the FASB issued ASU 2018-03, “Technical Corrections and Improvements to Financial Instruments-Overall.” ASU 2016-01 requires equity investments except those under the equity method of accounting to be measured at fair value with the changes in fair value recognized in net income. The amendment simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment. In addition, it also requires enhanced disclosures about investments. We adopted ASU 2016-01 on May 1, 2018. The adoption of ASU 2016- 01 did not have a material impact to our consolidated financial statements.

Revenue from Contracts with Customers

In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with ~~Customers"~~Customers," (Topic 606) (“ASU 2014-09”), and the International Accounting Standards Board (“IASB”) published its equivalent standard, International Financial Reporting Standard (“IFRS”) 15, “Revenue from Contracts with Customers”. These joint comprehensive new revenue recognition standards will supersedewhich superseded most existing revenue recognition ~~guidance and are intended to improve and converge revenue recognition and related financial reporting requirements. The standard is effective for the Company~~guidance. We adopted ASU 2014-09 on May 1, ~~2018 with early adoption permitted on May 1, 2017.~~2018. The standard allows for either ~~“full retrospective”~~"full retrospective" adoption, meaning the standard is applied to all periods presented, or ~~“cumulative effect”~~"modified retrospective" adoption, meaning the standard is applied only to the most current period presented in the financial statements. Subsequently, the FASB issued ASU ~~No.~~ 2016-08, ~~Revenue~~"Revenue from Contracts with Customers (Topic 606) – Principal versus Agent ~~Considerations (“ASU 2016-08”)~~Considerations", ASU ~~No.~~ 2016-10, ~~Revenue~~"Revenue from Contracts with Customers (Topic 606) – Identifying Performance Obligations and ~~Licensing (“ASU 2016-10”)~~Licensing", ~~and issued~~ ASU 2016-12, ~~Revenue~~"Revenue from Contracts with Customers (Topic 606) – Narrow Scope Improvements and Practical ~~Expedients (“~~Expedients", and ASU ~~2016-12”),~~2016-20, "Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers," which provide clarification and additional guidance related to ASU 2014-09. ~~The Company must adopt~~We also adopted ASU 2016-08, ASU 2016-10, ASU 2016-12, and ASU ~~2016-12~~2016-20 with ASU ~~2014-09.~~2014-09 (collectively, the “new revenue standard”) on May 1, 2018.

We utilized a comprehensive approach to assess the impact of the new revenue standard on our contract portfolio by reviewing our current accounting policies and practices to identify differences that would result from applying the new revenue standard to our revenue contracts. Additionally, we reviewed customer agreements representative of our business models and assessed whether changes in revenue recognition were appropriate under the new revenue standard.

We adopted the new revenue standard as of May 1, 2018, using the modified retrospective method. The ~~Company~~adoption of the new revenue standard did not have a material impact to our consolidated revenues, financial position, or results of operations. Upon adoption, we recorded an immaterial net increase to opening retained earnings resulting from the change in timing of when certain components of our revenue are recognized as required under the new revenue standard as compared to historical policies. Such changes include:

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(i)		perpetual licenses granted in connection with other deliverables; revenue that was previously recognized over the life of the associated subscription for future content is now recognized at a point in time, which is when access to content is initially granted,
(ii)			customers’ unexercised rights; revenue which was previously recognized at the end of a pre-determined period for situations where we have received a nonrefundable payment for a customer to receive a good or service and the customer has not exercised such right is now recognized as revenue in proportion to the pattern of rights exercised by the customer,
(iii)			recognition of estimated revenue from royalty agreements in the period of usage, and
(iv)	recognition of revenue for certain arrangements with minimum guarantees on a time-based (straight-line) basis due to a stand-ready obligation to provide additional rights to content.

The adoption of the new revenue standard resulted in the discontinuance of the historical practice of presenting accounts receivable and deferred revenue balances on a net basis for some of our subscription licensing agreements where we have invoiced a customer in advance of the related revenue being recognized and payment has not yet been received. As of April 30, 2018, the amounts that were previously netted down from accounts receivable and deferred revenue were $59.5 million. The current policy for our subscription licensing agreements is ~~currently assessing whether~~to record accounts receivable when performance occurs and recognize contract liabilities, at the earlier of cash payment being received or the invoice is sent.

In addition, the adoption of the new revenue standard resulted in the reclassification of the sales return reserve provision to Contract Liability (Deferred Revenue) from Accounts Receivable, Net on the Consolidated Statements of Financial Position. As of April 30, 2019 and 2018 the amount was $25.9 million and $28.3 million, respectively.

The impact of the adoption of the new revenue standard was not material to our Consolidated Statements of Income for the year ended April 30, 2019; therefore, we have omitted the disclosure that summarizes the effect of the revenue recognition standard by line item on our Consolidated Statements of Income. The impact to the Consolidated Statements of Financial Position was also not material by line item, except for the reclassification of the sales return reserve provision to contract liability from accounts receivable, net. The cumulative effect of the changes made to our Consolidated Statements of Financial Position at May 1, 2018 as a result of adoption of the new revenue standard using the modified retrospective method were as follows:

	April 30, 2018		Adjustments due to Adoption			May 1, 2018
Assets
Accounts receivable, net	$	212,377	$	93,349		$	305,726
Product development assets		78,814		(3,725	)		75,089
Technology, property and equipment, net		289,934		(361	)		289,573
Other non-current assets		85,802		5,274			91,076
Liabilities
Accrued royalties		73,007		(731	)		72,276
Contract liability (Deferred revenue)		486,353		89,364			575,717
Deferred income tax liabilities		143,518		1,400			144,918
Retained earnings	$	1,834,057	$	4,503		$	1,838,560

Recently Issued Accounting Standards

Intangibles-Goodwill and Other-Internal-Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract

In August 2018, the FASB issued ASU 2018-15, “Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract.” ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The standard is effective for us on May 1, 2020, and interim periods within that fiscal year, with early adoption permitted. We are currently assessing the impact the new guidance will have ~~a significant impact~~ on ~~its~~our consolidated financial statements.

Changes to the Disclosure Requirements for Defined Benefit Plans

In August 2018, the FASB issued ASU 2018-14, “Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20): Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans.” ASU 2018-14 removes certain disclosures that are not considered cost beneficial, clarifies certain required disclosures and added additional disclosures. The standard is effective for us on May 1, 2021, with early adoption permitted. The amendments in ASU 2018-14 would need to be applied on a retrospective basis. We are currently assessing the impact the new guidance will have on our disclosures.

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7361

Changes to the Disclosure Requirements for Fair Value Measurement

In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement.” ASU 2018-13 removes certain disclosures, modifies certain disclosures and added additional disclosures. The standard is effective for us on May 1, 2020, with early adoption permitted. Certain disclosures in ASU 2018-13 would need to be applied on a retrospective basis and others on a prospective basis. We are currently assessing the impact the new guidance will have on our disclosures.

Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income

In February 2018, the FASB issued ASU 2018-02 “Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income,” which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. The standard is effective for us on May 1, 2019, and interim periods within that fiscal year, with early adoption permitted. We adopted ASU 2018-02 on May 1, 2019. We did not elect to reclassify the income tax effects from comprehensive income to retained earnings for the stranded tax effects resulting from the Tax Cuts and Jobs Act. Our policy for releasing the income tax effects from accumulated other comprehensive income is when the corresponding pretax accumulated other comprehensive income items are reclassified to earnings.

Targeted Improvements to Accounting for Hedging Activities

In August 2017, the FASB issued ASU 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities,” to simplify and improve the application and financial reporting of hedge accounting. Subsequently, in November 2018, the FASB issued ASU 2018-16, “Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes”. In April 2019, the FASB issued ASU 2019-04, “Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments.” ASU 2017-12 eases the requirements for measuring and reporting hedge ineffectiveness and clarifies that changes in the fair value of hedging instruments for cash flow, net investment, and fair value hedges should be reflected in the same income statement line item as the earnings effect of the hedged item. The guidance also permits entities to designate specific components in cash flow and interest rate hedges as the hedged risk, instead of using total cash flows. ASU 2018-16 allows the use of the OIS rate based on the SOFR as a U.S. benchmark interest rate for hedge accounting purposes. These ASUs are effective for us on May 1, 2019, with early adoption permitted. We adopted ASU 2017-12, 2018-16 and 2019-04, for those portions related to ASU 2017-02, on May 1, 2019 and there was no impact to our consolidated financial statements at the date of adoption. The future impact will depend upon any future hedging activities we may enter into.

Simplifying the Test for Goodwill Impairment

In January 2017, the FASB issued ASU 2017-04, “Intangibles–Goodwill and Other (Topic 350): “Simplifying the Test for Goodwill Impairment”, which simplifies the measurement of a potential goodwill impairment charge by eliminating the requirement to calculate an implied fair value of the goodwill based on the fair value of a reporting unit’s other assets and liabilities. The new guidance eliminates the implied fair value method and instead measures a potential impairment charge based on the excess of a reporting unit’s carrying value compared to its fair value. The impairment charge cannot exceed the total amount of goodwill allocated to that reporting unit. The standard is effective for us on May 1, 2020, with early adoption permitted. Based on our most recent annual goodwill impairment test completed in the year ended April 30, 2019, we expect no initial impact on adoption.

Measurement of Credit Losses on Financial Instruments

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments—Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments.” Subsequently, in May 2019, the FASB issued ASU 2019-05 - "Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief”, in April 2019, the FASB issued ASU 2019-04, “Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments,” and in November 2018, the FASB issued ASU 2018-19, “Codification Improvements to Topic 326, Financial Instruments-Credit Losses”. ASU 2016-13 requires entities to measure all expected credit losses for most financial assets held at the reporting date based on an expected loss model which includes historical experience, current conditions, and reasonable and supportable forecasts. Entities will now use forward-looking information to better form their credit loss estimates. ASU 2016-13 also requires enhanced disclosures to help financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an entity’s portfolio. ASU 2016-13, ASU 2019-05, ASU 2019-04 and ASU 2018-19 are effective for us on May 1, 2020, including interim periods within those fiscal periods, with early adoption permitted. We are currently assessing the impact the new guidance will have on our consolidated financial statements.

Index

Leases

In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)”. Subsequently, the FASB issued in March 2019, ASU 2019-01, “Leases (Topic 842): Codification Improvements”, in December 2018 ASU 2018-20, “Leases (Topic 842): Narrow Scope Improvements for Lessors”, and in July 2018 the FASB issued ASU 2018-11, “Leases (Topic 842): Targeted Improvements” and ASU 2018-10, “Codification Improvements to Topic 842, Leases”. ASU 2016-02 requires an entity to recognize a right-of-use asset (“ROU”) and lease liability for all leases with terms of more than 12 months and provide enhanced disclosures. Recognition, measurement, and presentation of expenses will depend on classification as a finance or operating lease. Similar modifications have been made to lessor accounting in-line with revenue recognition guidance.

The new standard provides a number of optional practical expedients in transition. We expect to elect the practical expedients to forgo a reassessment of (1) whether any expired or existing contracts are or contain leases, (2) the lease classification for any expired or existing leases, and (3) initial direct costs. We do not expect to elect the practical expedient allowing the use-of-hindsight which would require us to reassess the lease term of our leases based on all facts and circumstances through the effective date. In addition, we do not expect to elect the practical expedient pertaining to land easements.

In addition, the new standard provides as a practical expedient, certain policy elections for ongoing lease accounting to (i) not separate nonlease components from the associated lease component if certain conditions are met, and (ii) not recognize ROU assets and lease liabilities for leases that qualify as short-term. If the short-term recognition exemption is elected, we will not recognize ROU assets or lease liabilities for existing short-term leases in transition. We expect to elect these policy elections.

The standard is effective for us on May 1, 2019, with early adoption permitted. A modified retrospective transition approach is required, applying the new standard to all leases existing at the date of initial application. A company may choose to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements as of its date of initial application. We adopted the new standard on May 1, 2019 and used the effective date as the date of initial application. Accordingly, previously reported financial information will not be updated, and the disclosures required under the new standard will not be provided for dates and periods before May 1, 2019. We expect to recognize operating lease liabilities ranging from approximately $175 to $185 million based on the present value of the remaining minimum rental payments for existing operating leases and ROU assets ranging from approximately $135 to $145 million on our Consolidated Statements of Financial Position. Additionally, we are in the process of implementing a lease accounting system for our leases, including the conversion of our existing lease data to a new system and implementing relevant internal controls and procedures.

See Note 15, “Commitment and Contingencies,” of the Notes to Consolidated Financial Statements for details of our operating leases and future commitments.

Note 3 — Revenue Recognition, Contracts with Customers

Revenue from contracts with customers is recognized using a five-step model consisting of the following: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when (or as) we satisfy a performance obligation. Performance obligations are satisfied when we transfer control of a good or service to a customer, which can occur over time or at a point in time. The amount of revenue recognized is based on the consideration to which we expect to be entitled in exchange for those goods or services, including the expected value of variable consideration. The customer’s ability and intent to pay the transaction price is assessed in determining whether a contract exists with the customer. If collectability of substantially all the consideration in a contract is not probable, consideration received is not recognized as revenue unless the consideration is nonrefundable, and we no longer have an obligation to transfer additional goods or services to the customer or collectability becomes probable.

Index

Disaggregation of Revenue

The following tables present our revenue from contracts with customers disaggregated by segment and product type for the years ended April 30, 2019, 2018 and 2017:

	Years Ended April 30,
	2019								2018								2017
	Research		Publishing		Solutions		Total		Research		Publishing		Solutions		Total		Research		Publishing		Solutions		Total
Research:
Journals Subscriptions	$	661,055	$	—	$	—	$	661,055	$	677,685	$	—	$	—	$	677,685	$	639,720	$	—	$	—	$	639,720
Open Access		54,671		—		—		54,671		41,997		—		—		41,997		30,633		—		—		30,633
Licensing, Reprints, Backfiles and Other		185,619		—		—		185,619		181,806		—		—		181,806		164,070		—		—		164,070
Publishing Technology Services (Atypon)		35,968		—		—		35,968		32,907		—		—		32,907		19,066		—		—		19,066
Publishing:
STM and Professional Publishing		—		265,719		—		265,719		—		287,315		—		287,315		—		291,255		—		291,255
Education Publishing		—		157,579		—		157,579		—		187,178		—		187,178		—		196,343		—		196,343
Courseware (WileyPLUS)		—		63,485		—		63,485		—		59,475		—		59,475		—		62,348		—		62,348
Test Preparation and Certification		—		40,606		—		40,606		—		35,534		—		35,534		—		35,609		—		35,609
Licensing, Distribution, Advertising and Other		—		46,803		—		46,803		—		48,146		—		48,146		—		47,894		—		47,894
Solutions:
Education Services		—		—		157,549		157,549		—		—		119,131		119,131		—		—		111,638		111,638
Professional Assessment		—		—		65,889		65,889		—		—		61,094		61,094		—		—		59,868		59,868
Corporate Learning		—		—		65,126		65,126		—		—		63,835		63,835		—		—		60,086		60,086
Total	$	937,313	$	574,192	$	288,564	$	1,800,069	$	934,395	$	617,648	$	244,060	$	1,796,103	$	853,489	$	633,449	$	231,592	$	1,718,530

Description of Revenue Generating Activities

We generate our revenues from sales from our three reportable segments. We report our segment information in accordance with the provisions of FASB ASC Topic 280, “Segment Reporting” (“FASB ASC Topic 280”). Our segment reporting structure consists of three reportable segments, which are listed below, and a Corporate category:

●

Research,

●

Publishing, and

●

Solutions.

Index

Research Segment

Included within the Research segment are the following revenue streams:

●

Journal Subscriptions,

●

Open Access,

●

Licensing, Reprints, Backfiles and Other, and

●

Publishing Technology Services (Atypon).

Journal Subscriptions

We publish approximately 1,700 academic research journals. We sell journal subscriptionsdirectly through our sales representatives, indirectly through independent subscription agents, through promotional campaigns, and through memberships in professional societies for those journals that are sponsored by societies. Journal subscriptions are primarily licensed through contracts for digital content available online through Wiley Online Library, which we migrated to our Literatum platform, acquired as part of our purchase of Atypon Systems, Inc. (“Atypon”) in March 2018. Contracts are negotiated by us directly with customers or their subscription agents. Subscription periods typically cover calendar years. Print journals are generally mailed to subscribers directly from independent printers. We do not own or manage printing facilities. Subscription revenue is generally collected in advance.

In a typical journal subscription sale, there is a written agreement between us and our customer that cover multiple years. However, we typically account for these agreements as one-year contracts because our enforceable rights under the agreements are subject to an annual confirmation and negotiation process with the customer.

In journal subscriptions, multiple performance obligations exist, which include a stand-ready promise to provide access to new content for one year and a perpetual license for access to historical journal content. The transaction price consists of fixed consideration.

We allocate revenue to the stand-ready promise to provide access to new content for one year based on its standalone selling price and the revenue for new content is recognized over time as we have a continuous stand-ready obligation to provide the right of access to additional intellectual property. The allocation of revenue to the perpetual licenses for access to historical journal content is done using the expected cost plus a margin approach as permitted by the new revenue standard. Revenue is recognized at the point in time when access to historical content is initially granted.

Open Access

Under the Author-Funded Access business model, accepted research articles are published subject to payment of Article Publication Charges (“APCs”). All Author-Funded articles are immediately free to access online. Contributors of Author-Funded Access articles retain many rights and typically license their work under terms that permit re-use. Author-Funded Access offers authors choices in how to share and disseminate their work, and it serves the needs of researchers who may be required by their research funder to make articles freely accessible without embargo. APCs are typically paid by the individual author or by the author’s funder, and payments are often mediated by the author’s institution. We provide specific workflows and infrastructure to authors, funders and institutions to support the requirements of the Author-Funded Access model.

Customers in open access are typically individual educational institutions or a consortium of universities. Under the Author-Funded Access model, we have a signed contract with the customer that contains enforceable rights.

The Author-Funded Access model in a typical model includes an over-time single performance obligation that combines a promise to host the customer’s content on our open access platform, and a promise to provide a discount on APCs of eligible users (as defined in the contract) in exchange for an upfront payment. Enforceable right to payment occurs over time as we fulfill our obligation to provide a discount to eligible users, as defined, on future APCs. Therefore, the upfront payment is deferred and recognized over time.

Index

Licensing, Reprints, Backfiles and Other

Within Licensing, the revenue derived from these contracts is primarily comprised of advance payments, including minimum guarantees and sales- or usage-based royalty agreements. For our sales-or usage-based royalty agreements, we recognize revenue in the period of usage based on the amounts earned. We record revenue under these arrangements for the amounts due and not yet reported to us based on estimates of the sales or usage of these customers and pursuant to the terms of the contracts. We also have certain licenses whereby we receive a non-refundable minimum guarantee against a volume-based royalty throughout the term of the agreement. We recognize revenue for the minimum guarantee on a straight-line basis over the term of the agreement because of the stand-ready promise to provide updates during the subscription period. We recognize volume-based royalty income only when cumulative consideration exceeds the minimum guarantee.

Reprints contracts generally contain a single performance obligation which is the delivery of printed articles. Revenue is recognized at the time of delivery of the printed articles.

For Backfiles, the performance obligation is the granting of a functional intellectual property license. Revenue is recognized at the time the functional intellectual property license is granted.

Other includes our Article Select offering, whereby we have a single performance obligation to our customers to give access to an article through the purchase of a token. The customer redeems the token for access to the article for a 24-hour period. The customer purchases the tokens with an upfront cash payment. Revenue is recognized when access to the article is provided.

Publishing Technology Services (Atypon)

Atypon is a publishing software and service provider that enables scholarly and professional societies and publishers to deliver, host, enhance, market, and manage their content on the web through the Literatum platform. The duration of these contracts is generally multi-year ranging from 2-5 years. Atypon contracts typically include a single performance obligation for the implementation and hosting subscription services. The transaction price is fixed which may include price escalators that are fixed increases per year, and therefore, revenue is recognized upon the initiation of the subscription period and straight-lined over the contract period.

Publishing Segment

Included within the Publishing segment are the following revenue streams:

●

STM (Scientific, Technical and Medical) and Professional Publishing,

●

Education Publishing,

●

Courseware (WileyPLUS),

●

Test Preparation and Certification, and

●

Licensing, Distribution, Advertising and Other.

STM (Scientific, Technical and Medical) and Professional Publishing and Education Publishing

Education textbooks and related supplementary material and digital products are sold primarily to bookstores and online booksellers serving both for-profit and nonprofit educational institutions (primarily colleges and universities), and direct-to-students. We employ sales representatives who call on faculty responsible for selecting books to be used in courses, and on the bookstores that serve such institutions and their students. The textbook business is seasonal, with the majority of textbook sales occurring during the July-through-October and December-through-January periods. Book sales for STM, Professional and Education Publishing are generally made on a returnable basis with certain restrictions.

Index

Our performance obligations as it relates to STM, Professional and Education Publishing are primarily book products delivered in both print and digital form which could include a single or multiple performance obligations based on the number of International Standard Book Number (“ISBN’s”) purchased.

This revenue stream also includes variable consideration as it relates to discounts and returns for both print and digital books. Discounts are identifiable by performance obligation and therefore are applied at the point of sale by performance obligation. The process that we use to determine our sales returns and the related reserve provision charged against revenue is based on applying an estimated return rate to current year returnable print book sales. This rate is based upon an analysis of actual historical return experience in the various markets and geographic regions in which we do business. We collect, maintain and analyze significant amounts of sales returns data for large volumes of homogeneous transactions. This allows us to make reasonable estimates of the amount of future returns. All available data is utilized to identify the returns by market and to which fiscal year the sales returns apply. This enables management to track the returns in detail and identify and react to trends occurring in the marketplace, with the objective of being able to make the most informed judgments possible in setting reserve rates. Associated with the estimated sales return reserves, we also include a related reduction in inventory and royalty costs as a result of the expected returns.

As it relates to print and digital books within the STM, Professional and Education Publishing, revenue is recognized at the point when control of product transfers, which for print is upon shipment or for digital when fulfillment of the products has been rendered.

Courseware (WileyPLUS)

We offer high-quality online learning solutions, including WileyPLUS, a research-based, online environment for effective teaching and learning that is integrated with a complete digital textbook. Courseware customers purchase access codes to utilize the product. This could include a single or multiple performance obligations based on the number of course ISBN’s purchased. Revenue is recognized when the access codes are activated and then over the applicable semester term such product relates to.

Test Preparation and Certification

Test Preparation and Certification contracts are generally three-year agreements. This revenue stream includes multiple performance obligations as it relates to the on-line and printed course materials, including such items as text books, e-books, video lectures, flashcards, study guides and test banks. The transaction price is fixed; however, discounts are offered and returns of certain products are allowed. We allocate revenue to each performance obligation based on its standalone selling price. Depending on the performance obligation, revenue is recognized at the time the product is delivered and control has passed to the customer or over time due to our stand-ready obligation to provide updates to the customer.

Licensing, Distribution, Advertising and Other

Revenue derived from our licensing contracts is primarily comprised of advance payments and sales- or usage-based royalties. Revenue for advance payments is recognized at the point in time that the functional intellectual property license is granted. For sales- or usage- based royalties, we record revenue under these arrangements for the amounts due and not yet reported to us based on estimates of the sales or usage of these customers and pursuant to the terms of the contracts.

Solutions Segment

Included within the Solutions segment are the following revenue streams:

●

Education Services,

●

Professional Assessment, and

●

Corporate Learning.

Index

Education Services

As student demand for online degree and certificate programs continues to increase, traditional institutions are partnering with online program management providers to develop and support these programs. Education Services include market research, marketing, student recruitment, enrollment support, proactive retention support, academic services to design courses, faculty support, and access to the Engage Learning Management System, which facilitates the online education experience. Revenue is derived from pre-negotiated contracts with institutions that provide for a share of tuition generated from students who enroll in a program. The duration of Education Services contracts are generally multi-year agreements ranging from a period of 7-10 years, with some having optional renewal periods.

Education Services includes a single performance obligation for the services provided because of the integrated technology and services our institutional clients need to attract, enroll, educate and support students. Consideration is variable since it is based on the number of students enrolled in a program. We begin to recognize revenue at the start of the delivery of the class within a semester, which is also when the variable consideration contingency is resolved.

Professional Assessment

Our Professional Assessment services include pre-hire screening and post-hire personality assessments, which are delivered to business customers through online digital delivery platforms, either directly or through an authorized distributor network of independent consultants, trainers, and coaches. Professional Assessment services contracts are generally one year.

Professional Assessment includes a performance obligation to stand ready to provide assessments to our distributor’s customers or to provide assessments direct to a customer. Revenue for Professional Assessments is recognized at the time the product or service is provided or delivered. Consideration is allocated to assessments based on standalone selling prices. In addition, as it relates to Professional Assessments customers' unexercised rights for situations where we have received a nonrefundable payment for a customer to receive a good or service and the customer is not expected to exercise such right, we will recognize such “breakage” amounts as revenue in proportion to the pattern of rights exercised by the customer.

Corporate Learning

The transaction price consists of fixed consideration that is determined at the beginning of each year and received at the same time. Within Corporate Learning there are multiple performance obligations which includes the licenses to learning content and the learning application. Revenue is recognized over time as we have a continuous obligation to provide the right of access to the intellectual property which includes the licenses and learning applications.

Accounts Receivable, net and Contract Liability (Deferred Revenue) Balances

When consideration is received, or such consideration is unconditionally due, from a customer prior to transferring goods or services to the customer under the terms of a contract, a contract liability is recorded. Contract liabilities are recognized as revenue when, or as, control of the products or services are transferred to the customer and all revenue recognition criteria have been met.

The following table provides information about receivables and contract liabilities from contracts with customers.

	April 30, 2019		April 30, 2018 ⁽¹⁾		Increase/ (Decrease)
Balances from contracts with customers:
Accounts receivable, net ⁽²⁾	$	294,867	$	212,377	$	82,490
Contract liability (Deferred revenue) ⁽²⁾		507,365		486,353		21,012
Contract liability (Deferred revenue) (included in Other Long-Term Liabilities)	$	10,722	$	—	$	10,722

Index

⁽¹⁾As noted above, prior period amounts have not been adjusted due to adoption of the new revenue standard under the modified retrospective method.

⁽²⁾Due to the adoption of the new revenue standard, the sales return reserve as of April 30, 2019 of $25.9 million is recorded in Contract Liability (Deferred Revenue). In prior periods, it was recorded as a reduction to Accounts Receivable, net on the Consolidated Statements of Financial Position. At April 30, 2018 the sales return reserve was $28.3 million.

Revenue recognized for the year ended April 30, 2019 relating to the contract liability at April 30, 2018 after the adjustments for the adoption of the new revenue standard on May 1, 2018 was $530.4 million.

Remaining Performance Obligations included in Contract Liability (Deferred Revenue)

As of April 30, 2019, the aggregate amount of the transaction price allocated to the remaining performance obligations is approximately $518.1 million, which included the sales return reserve of $25.9 million. Excluding the sales return reserve, we expect that approximately $481.5 million will be recognized in the next twelve months with the remaining $10.7 million to be recognized thereafter.

Assets Recognized for the Costs to Fulfill a Contract

Costs to fulfill a contract are directly related to a contract that will be used to satisfy a performance obligation in the future and are expected to be recovered. These types of costs are incurred in the following revenue streams, (1) Publishing Technology Services (Atypon) and (2) Education Services.

Our assets associated with incremental costs to fulfill a contract were $8.9 million at April 30, 2019 and are included within Other Non-Current Assets on our Consolidated Statements of Financial Position. We recorded amortization expense of $2.6 million during the year ended April 30, 2019 related to these assets within Cost of Sales on the Consolidated Statements of Income. The costs related to Education Services were previously included in Product Development Assets on our Consolidated Statements of Financial Position. Certain costs related to Publishing Technology Services (Atypon) were previously included in Technology, Property and Equipment, net on our Consolidated Statements of Financial Position.

Sales and value-added taxes are excluded from revenues. Shipping and handling costs, which are primarily incurred within the Publishing segment, occur before the transfer of control of the related goods. Therefore, in accordance with the new revenue standard, it is not considered a promised service to the customer and would be considered a cost to fulfill our promise to transfer the goods. Costs incurred for third party shipping and handling are primarily reflected in Operating and Administrative Expenses on the Consolidated Statements of Income. We incurred $32.7 million, $33.7 million, and $39.1 million in shipping and handling costs in the years ended April 30, 2019, 2018 and 2017 respectively.

Note 4 – Acquisition

The Learning House, Inc.

On November 1, 2018, we completed the acquisition of 100% of the outstanding stock of The Learning House, Inc. (“Learning House”) a diversified education services provider. Headquartered in Louisville, KY, Learning House provides online program management services including graduate and undergraduate programs; short courses, boot camps, and other skills training and credentialing for students and professionals; pathway services for international students; professional development services for teachers; and learning solutions for corporate clients. The combination of Learning House and Wiley Education Services creates a leading provider of tech-enabled education services for colleges and universities. The results of operations of Learning House are included in our Solutions segment.

The fair value of the consideration transferred was approximately $201.3 million which included $200.7 million of cash and $0.6 million of warrants, inclusive of purchase price adjustments which were finalized in the fourth quarter of fiscal year 2019. We financed the payment of the cash consideration through borrowings under our revolving credit agreement ("RCA"). The warrants were classified as equity and allow the holder to purchase 400,000 shares of our Class A Common Stock at an exercise price of $90.00, subject to adjustments. The term of the warrants is three years, expiring on November 1, 2021. The fair value of the warrants was determined using the Black-Scholes option pricing model. The fair value of the cash consideration transferred, net of $10.3 million of cash acquired was approximately $190.4 million.

The transaction was accounted for using the acquisition method of accounting. We recorded the preliminary fair value of the assets acquired and liabilities assumed on the acquisition date, all of which are included in the Solutions segment. None of the goodwill will be deductible for tax purposes. The allocation of the consideration transferred to the assets acquired and the liabilities assumed is preliminary and could be revised as a result of additional information obtained due to the finalization of the third-party valuation report, tax related matters and contingencies, but such amounts will be finalized within the measurement period, which will not exceed one year from the acquisition date. The following table summarizes the consideration transferred to acquire Learning House and the preliminary allocation of the purchase price among the assets acquired and the liabilities assumed.

Index

	Preliminary Allocation as of April 30, 2019
Total consideration transferred	$	201,274

Assets:
Current Assets
Cash and cash equivalents		10,293
Accounts receivable, net		8,621
Prepaid expenses and other current assets		1,439
Total Current Assets		20,353

Technology, Property and Equipment, net		343
Intangible Assets, net		109,548
Goodwill		110,805
Other Non-Current Assets		5,025
Total Assets	$	246,074

Liabilities:
Current Liabilities
Accounts payable		1,542
Contract liability (Deferred revenue)		959
Accrued employment costs		4,925
Other accrued liabilities		9,422
Total Current Liabilities		16,848

Deferred Income Tax Liabilities		26,769
Other Long-Term Liabilities		1,184
Total Liabilities	$	44,801

The following table summarizes the identifiable intangible assets acquired and their weighted-average useful life at the date of acquisition.

	Estimated Fair Value		Weighted-Average Useful Life (in Years)
Customer Relationships	$	103,850		15
Course Content		5,698		4
Total	$	109,548

Learning House’s revenue and operating loss included in our Solutions segment results for the year ended April 30, 2019 was $31.5 million and $8.0 million, respectively.

Pro forma financial information related to this acquisition has not been provided as it is not material to our consolidated results of operations.

Atypon Systems, Inc.

On September 30, 2016, we acquired the net assets of Atypon, a Silicon Valley-based publishing-software company, for approximately $121 million in cash, net of cash acquired. We finalized our purchase accounting for Atypon on July 31, 2017, and there were no material changes in the purchase accounting allocation compared to April 30, 2017. We recorded the fair value of the assets acquired and liabilities assumed on the acquisition date, which included $48 million of intangible assets. Goodwill of $70 million was recorded, which is deductible for tax purposes.

Index

Atypon's revenue included in our Research segment results for the years ended April 30, 2019, 2018 and 2017 were $36.0 million, $32.9 million and $19.1 million, respectively. Atypon's operating loss included in our Research segment results for the years ended April 30, 2019, 2018 and 2017 were $3.9 million, $2.7 million and $3.5 million, respectively.

Note 35 – Reconciliation of Weighted Average Shares Outstanding

A reconciliation of the shares used in the computation of earnings per share for the years ended April 30 ~~follows (in thousands):~~follows:

	2019		2018		2017
Weighted average shares outstanding		57,240		57,181		57,531
Less: Unvested restricted shares		(48)		(138)		(194)
Shares used for basic earnings per share		57,192		57,043		57,337
Dilutive effect of stock options and other stock awards		648		845		862
Shares used for diluted earnings per share		57,840		57,888		58,199

2016 2015 2014
Weighted Average Shares Outstanding 58,253 59,004 58,925
Less: Unearned Restricted Shares (255) (271) (290)
Shares Used for Basic Earnings Per Share 57,998 58,733 58,635
Dilutive Effect of Stock Options and Other Stock Awards 736 861 879
Shares Used for Diluted Earnings Per Share 58,734 59,594 59,514

Since their inclusion in the calculation of diluted earnings per share would have been anti-dilutive, options to purchase ~~336,803, 178,144~~260,984, 244,590 and ~~389,400~~301,527 shares of Class A Common Stock have been excluded for ~~fiscal~~the years ~~2016, 2015~~ended April 30, 2019, 2018 and ~~2014,~~2017, respectively. In addition, there were no restricted shares excluded for ~~fiscal~~the year ended April 30, 2019. For the years ~~2016~~ended April 30, 2018 and ~~2015 unearned~~2017, restricted shares of ~~15,200~~26,740 and ~~2,500,~~none, respectively, have been excluded as their inclusion would have been anti-dilutive.

Warrants to purchase 242,402 shares of Class A Common Stock have not been included for the year ended April 30, 2019. There were no warrants issued during the years ended April 30, 2018 and 2017.

Note 4-6 – Accumulated Other Comprehensive Loss

Changes in Accumulated Other Comprehensive Loss by component, net of tax, for the ~~fiscal~~ years ended April 30, ~~2016~~2019, 2018, and ~~2015~~2017 were as ~~follows (in thousands):~~follows:

	Foreign Currency Translation			Unamortized Retirement Costs			Interest Rate Swaps			Total
Balance at April 30, 2016	$	(267,920	)	$	(179,405	)	$	(361	)	$	(447,686	)
Other comprehensive (loss) income before reclassifications		(51,292	)		(18,458	)		2,735			(67,015	)
Amounts reclassified from Accumulated Other Comprehensive Loss		—			7,361			53			7,414
Total other comprehensive (loss) income		(51,292	)		(11,097	)		2,788			(59,601	)
Balance at April 30, 2017	$	(319,212	)	$	(190,502	)	$	2,427		$	(507,287	)
Other comprehensive income (loss) before reclassifications		67,639			(4,979	)		1,739			64,399
Amounts reclassified from Accumulated Other Comprehensive Loss		—			4,455			(1,147	)		3,308
Total other comprehensive income (loss)		67,639			(524	)		592			67,707
Balance at April 30, 2018	$	(251,573	)	$	(191,026	)	$	3,019		$	(439,580	)
Other comprehensive (loss) income before reclassifications		(60,534	)		(9,422	)		1,121			(68,835	)
Amounts reclassified from Accumulated Other Comprehensive Loss		—			4,391			(4,714	)		(323	)
Total other comprehensive loss		(60,534	)		(5,031	)		(3,593	)		(69,158	)
Balance at April 30, 2019	$	(312,107	)	$	(196,057	)	$	(574	)	$	(508,738	)

Foreign Unamortized Interest
Currency Retirement Rate
Translation Costs Swaps Total

Balance at April 30, 2014 $(66,664) $(123,025) $(602) $(190,291)
Other comprehensive income (loss) before reclassifications (180,190) (42,347) (783) (223,320)
Reclassification of amounts to Consolidated Statements of Income - 5,938 1,040 6,978
Total other comprehensive income (loss) (180,190) (36,409) 257 (216,342)
Balance at April 30, 2015 $(246,854) $(159,434) $(345) $(406,633)
Other comprehensive income (loss) before reclassifications (21,066) (24,930) (569) (46,565)
Reclassification of amounts to Consolidated Statements of Income - 4,959 553 5,512
Total other comprehensive income (loss) (21,066) (19,971) (16) (41,053)
Balance at April 30, 2016 $(267,920) $(179,405) $(361) $(447,686)

For the ~~fiscal~~ years ended April 30, ~~2016~~2019 and ~~2015,~~2018, pre-tax actuarial losses included in Unamortized Retirement Costs of approximately ~~$6.2~~$5.5 million and ~~$7.8~~$5.9 million, respectively, were amortized from Accumulated Other Comprehensive Loss and recognized as pension expense in Operating and Administrative Expenses inand Interest and Other Income (Expense) on the Consolidated Statements of Income.

74Note 7 – Restructuring and Related Charges

~~Note 5 – Acquisitions~~

~~CrossKnowledge:~~

~~On May 1, 2014,~~In the Company acquired CrossKnowledge Group Limited (“CrossKnowledge”) for approximately $166 million in cash, net of cash acquired. CrossKnowledge is a learning solutions provider focused on leadership and managerial skills development that offers subscription-based, digital learning solutions for global corporations, universities, and small and medium-sized enterprises. CrossKnowledge’s solutions include a variety of managerial and leadership skills assessments, courses, certifications, content and executive training programs that are delivered on a cloud-based LMS platform with over 19,000 learning objects in 17 languages. CrossKnowledge serves over seven million end-users in 80 countries. For the fiscal years ended April 30, ~~2016~~2019, 2018 and ~~2015, CrossKnowledge’s revenue included in Wiley’s results was $50.7 million and $42.0 million, respectively.~~

The $166 million purchase price was allocated to identifiable long-lived intangible assets, mainly customer relationships and content ($63.0 million); technology ($6.3 million); long-term deferred tax liabilities ($21.5 million); negative working capital ($4.3 million); and goodwill ($122.5 million). The fair value of intangible assets and technology acquired was based on management’s assessment performed with the assistance of a third party valuation consultant. Goodwill represents the excess of the purchase price over the fair value of net assets acquired and comprises the estimated value of CrossKnowledge’s workforce, unidentifiable intangible assets and the fair value of expected synergies. None of the goodwill is deductible for tax purposes. The identifiable long-lived intangible assets are primarily amortized over a weighted average estimated useful life of approximately 15 years. The acquisition was funded through the use of the Company’s existing credit facility and available cash balances.

~~Profiles International:~~

On April 1, 2014, the Company acquired all of the stock of Profiles International (“Profiles”) for approximately $47.5 million in cash, net of cash acquired. Profiles provides pre-employment assessment and selection tools that enable employers to optimize candidate selections and develop the full potential of their employees. Solutions include pre-hire assessments, including those designed to measure and match personality, knowledge, skills, managerial fit, loyalty, and values; and post-hire assessments, focused on measuring sales and managerial effectiveness, employee performance and career potential. Profiles serves approximately 4,000 corporate clients and millions of end users in over 120 countries, with assessments available in 32 languages. The $47.5 million purchase price was allocated to identifiable long-lived intangible assets, mainly customer relationships and assessment content ($22.9 million); technology ($2.7 million); long-term deferred tax liabilities ($9.7 million); a credit to short-term deferred tax assets ($2.9 million); negative working capital ($5.9 million) and goodwill ($40.4 million). The fair value of intangible assets and technology acquired was based on management’s assessment performed with the assistance of a third party valuation consultant. Goodwill represents the excess of the purchase price over the fair value of net assets acquired and comprises the estimated value of Profile’s workforce, unidentifiable intangible assets and the fair value of expected synergies. None of the goodwill is deductible for tax purposes. The identifiable long-lived intangible assets are primarily amortized over a weighted average estimated useful life of approximately 13 years. Profiles contributed $20.3 million, $23.3 million and $1.9 million to the Company’s revenue for fiscal years 2016, 2015 and 2014, respectively.

~~Unaudited proforma financial information has not been presented for any of these acquisitions since the effects of the acquisitions were not material individually or in the aggregate.~~

~~Note 6 – Restructuring Charges~~

~~In fiscal years 2016, 2015 and 2014, the Company~~2017, we recorded pre-tax restructuring and related charges of $3.1 million, $28.6 million, ~~($0.32 per share), $28.8~~and $13.4 million, ~~($0.34 per share) and $42.7 million ($0.48 per share),~~ respectively, which are reflected in the Restructuring and Related Charges line item inon the Consolidated Statements of Income and described in more detail below:

Index

Restructuring and Reinvestment Program:

Beginning in ~~fiscal~~the year ended April 30, 2013, ~~the Company~~we initiated a global program (the “Restructuring and Reinvestment Program”) to restructure and realign ~~its~~our cost base with current and anticipated future market conditions. ~~The Company is~~We are targeting a majority of the expected cost savings achieved to improve margins and earnings, while the remainder will be reinvested in ~~high growth~~high-growth digital business opportunities.

The following ~~table summarizes~~tables summarize the pre-tax restructuring charges related to this ~~program (in thousands):~~program:

	2019		2018			2017		Total Charges Incurred to Date
Charges by Segment:
Research	$	1,131	$	5,257		$	1,949	$	26,544
Publishing		650		6,443			1,596		39,581
Solutions		878		3,695			1,787		7,125
Corporate Expenses		459		13,171			8,023		96,378
Total Restructuring and Related Charges	$	3,118	$	28,566		$	13,355	$	169,628

Charges (Credits) by Activity:
Severance	$	1,456	$	27,213		$	8,386	$	116,259
Consulting and Contract Termination Costs		526		1,815			148		21,155
Other Activities		1,136		(462	)		4,821		32,214
Total Restructuring and Related Charges	$	3,118	$	28,566		$	13,355	$	169,628

2016 2015 2014 Total Charges Incurred to Date
Charges by Segment:
Research $5,048 $4,555 $7,774 $20,273
Professional Development 2,277 4,385 11,860 24,806
Education 1,206 1,571 891 4,786
Shared Services 20,080 18,293 22,197 74,724
Total Restructuring Charges $28,611 $28,804 $42,722 $124,589

Charges by Activity:
Severance $16,443 $17,093 $25,962 $79,204
Process reengineering consulting 7,191 301 8,556 18,666
Other activities 4,977 11,410 8,204 26,719
Total Restructuring Charges $28,611 $28,804 $42,722 $124,589

Other Activities for the year ended April 30, 2019 reflect lease impairment related costs. The credits in Other Activities ~~reflects leased~~for the year ended April 30, 2018 mainly reflect changes in estimates for previously accrued restructuring charges related to facility ~~consolidations, contract termination costs~~lease reserves. Other Activities for the year ended April 30, 2017 reflect facility relocation and ~~the curtailment of certain defined benefit pension plans.~~lease impairment related costs.

The following table summarizes the activity for the Restructuring and Reinvestment Program liability ~~as of~~for the year ended April 30, ~~(in thousands):~~2019:

	April 30, 2018		Charges		Payments			Foreign Translation & Other Adjustments			April 30, 2019
Severance	$	17,279	$	1,456	$	(13,388	)	$	(460	)	$	4,887
Consulting and Contract Termination Costs		—		526		(223	)		—			303
Other Activities		2,772		1,136		(1,608	)		244			2,544
Total	$	20,051	$	3,118	$	(15,219	)	$	(216	)	$	7,734

Foreign
Translation &
2015 Charges Payments Reclassifications 2016
Severance $18,794 $16,443 $(18,485) $(95) $16,657
Process reengineering consulting - 7,191 (7,191) - -
Other activities 11,859 4,977 (4,188) (796) 11,852
Total $30,653 $28,611 $(29,864) $(891) $28,509

~~Note 7 – Impairment Charges~~

Note 8 – Inventories

Inventories, net at April 30 were as ~~follows (in thousands):~~follows:

	2019			2018
Finished Goods	$	33,736		$	36,503
Work-in-Process		2,094			2,139
Paper and Other Materials		373			550
		36,203			39,192
Inventory Value of Estimated Sales Returns		3,739			4,626
LIFO Reserve		(4,360	)		(4,329	)
Total Inventories	$	35,582		$	39,489

2016 2015
Finished Goods $45,170 $52,705
Work-in-Process 7,592 6,552
Paper, Cloth, and Other 4,867 4,676
57,629 63,933
Inventory Value of Estimated Sales Returns 4,924 6,555
LIFO Reserve (4,774) (6,709)
Total Inventories $57,779 $63,779

Index

See Note 2, ~~Summary~~“Summary of Significant Accounting Policies, ~~- Sales~~Recently Issued and Recently Adopted Accounting Standards,” under the caption “Sales Return Reserves,” for a discussion of the Inventory Value of Estimated Sales Returns. Finished Goods are net of a reserve for inventory obsolescence of $15.8 million and $18.2 million as of April 30, 2019 and 2018, respectively.

Note 9 – Product Development Assets

Product development assets consisted of the following at April 30:

	2019		2018
Book Composition Costs	$	19,197	$	24,887
Software Costs		38,048		52,078
Content Development Costs		5,225		1,849
Total	$	62,470	$	78,814

Product development assets include $4.3 million and $4.1 million of work-in-process as of April 30, ~~(in thousands):~~2019 and 2018, respectively, mainly for book composition costs.

2016 2015
Composition Costs $40,944 $41,280
Royalty Advances 31,182 28,309
Total $72,126 $69,589

~~Composition costs~~Product development assets are net of accumulated amortization of ~~$199.3~~$236.5 million and ~~$198.2~~$238.1 million as of April 30, ~~2016~~2019 and ~~2015,~~2018, respectively.

Note 10 – Technology, Property and Equipment

Technology, property and equipment, net consisted of the following at April 30:

	2019			2018
Capitalized Software	$	440,437		$	390,774
Computer Hardware		68,718			57,493
Buildings and Leasehold Improvements		118,685			121,381
Furniture, Fixtures, and Warehouse Equipment		57,471			60,869
Land and Land Improvements		3,390			3,678
		688,701			634,195
Accumulated Depreciation and Amortization		(399,680	)		(344,261	)
Total	$	289,021		$	289,934

The following table details our depreciation and amortization expense for technology, property and equipment, net for the years ended April 30:

	2019		2018		2017
Capitalized Software Amortization Expense	$	50,095	$	45,449	$	48,343
Depreciation and Amortization Expense, Excluding Capitalized Software		19,323		18,878		18,340
Total Depreciation and Amortization Expense for Technology, Property and Equipment	$	69,418	$	64,327	$	66,683

Technology, property and equipment includes $2.3 million and zero of work-in-process as of April 30, ~~(in thousands):~~2019 and 2018, respectively, mainly for capitalized software.

2016 2015
Capitalized Software and Computer Hardware $539,968 $460,199
Buildings and Leasehold Improvements 84,923 86,225
Furniture, Fixtures and Warehouse Equipment 54,607 60,460
Land and Land Improvements 3,726 3,820
683,224 610,704
Accumulated Depreciation (468,454) (417,694)
Total $214,770 $193,010

The net book value of capitalized software costs was ~~$151.5~~$200.2 million and ~~$121.9~~$198.0 million as of April 30, ~~2016~~2019 and ~~2015, respectively. Depreciation expense recognized in fiscal years 2016, 2015, and 2014 for capitalized software costs was approximately $49.6 million, $42.1 million and $36.5 million,~~2018, respectively.

Index

7773

Note 11 -– Goodwill and Intangible Assets

Goodwill

The following table summarizes the activity in goodwill by segment as of April ~~30 (in thousands):~~30:

	2018 ⁽¹⁾		Acquisition ⁽²⁾		Foreign Translation Adjustment			2019
Research	$	463,419	$	—	$	(24,908	)	$	438,511
Publishing		283,851		—		(706	)		283,145
Solutions		272,531		110,805		(9,326	)		374,010
Total	$	1,019,801	$	110,805	$	(34,940	)	$	1,095,666

(1)	The April 30, 2018 goodwill balances were revised for the Publishing segment which decreased and the Solutions segment which increased to reflect foreign translation adjustments of $11.6 million.

2015 Acquisitions Foreign Translation Adjustment 2016
Research $447,326 - $(14,025) $433,301
Professional Development 365,215 - 3,321 368,536
Education 149,826 - - 149,826
Total $962,367 - $(10,704) $951,663

(2)	Refer to Note 4, “Acquisition,” in the Notes to Consolidated Financial Statements for more information related to the acquisition of Learning House on November 1, 2018.

Prior to fiscal year 2019, we reviewed goodwill for impairment on a reporting unit basis annually during the third quarter of each year, using a measurement date of January 31, and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. While we are permitted to conduct a qualitative assessment to determine whether it is necessary to perform a two-step quantitative goodwill impairment test, for our annual goodwill impairment test in the third quarter of 2018 and 2017 we performed a quantitative test for all of our reporting units.

As discussed below, during the fourth quarter of 2018, we voluntarily changed our annual impairment assessment date from January 31 to February 1 for all of our reporting units and our indefinite-lived intangible assets. For our annual goodwill impairment test in the fourth quarter of 2019 we performed a quantitative test for all of our reporting units and in the fourth quarter of 2018 we performed a qualitative assessment for all of our reporting units.

The goodwill impairment test involves a two-step process. In step one, we compare the fair value of each of our reporting units to its carrying value, including the goodwill allocated to the reporting unit. If the fair value of the reporting unit exceeds its carrying value, there is no indication of impairment and no further testing is required. If the fair value of the reporting unit is less than the carrying value, we must perform step two of the impairment test to measure the amount of impairment loss, if any. In step two, the reporting unit’s fair value is allocated to all of the assets and liabilities of the reporting unit, including any unrecognized intangible assets, in a hypothetical analysis that calculates the implied fair value of goodwill in the same manner as if the reporting unit was being acquired in a business combination. If the implied fair value of the reporting unit’s goodwill is less than the carrying value, the difference is recorded as an impairment loss.

2019 Annual Impairment Test as of February 1, 2019

During the fourth quarter of 2019, we completed step one of our annual goodwill impairment test for our reporting units. We concluded that the fair values of these reporting units were above their carrying values and, therefore, there was no indication of impairment.

We estimated the fair value of these reporting units using a weighting of fair values derived from an income and a market approach. Under the income approach, we determined the fair value of a reporting unit based on the present value of estimated future cash flows. Cash flow projections are based on management’s estimates of revenue growth rates and operating margins, taking into consideration industry and market conditions. The discount rate used is based on a weighted average cost of capital adjusted for the relevant risk associated with the characteristics of the business and the projected cash flows. The market approach estimates fair value based on market multiples of current and forward 12-month operating performance results, as applicable, derived from comparable publicly traded companies with similar operating and investment characteristics as the reporting unit.

As noted above, the fair value determined under step one of the goodwill impairment test completed in the fourth quarter of 2019 exceeded the carrying value for each reporting unit. Therefore, there was no impairment of goodwill. However, if the fair value decreases in future periods, we may fail step one of the goodwill impairment test and be required to perform step two. In performing step two, the fair value would have to be allocated to all of the assets and liabilities of the reporting unit. Therefore, any potential goodwill impairment charge would be dependent upon the estimated fair value of the reporting unit at that time and the outcome of step two of the impairment test. The fair values of the assets and liabilities of the reporting unit, including the intangible assets, could vary depending on various factors.

Index

The future occurrence of a potential indicator of impairment, such as a decrease in expected net earnings, adverse equity market conditions, a decline in current market multiples, a decline in our common stock price, a significant adverse change in legal factors or business climates, an adverse action or assessment by a regulator, unanticipated competition, strategic decisions made in response to economic or competitive conditions, or a more-likely-than-not expectation that a reporting unit or a significant portion of a reporting unit will be sold or disposed of, could require an interim assessment for some or all of the reporting units before the next required annual assessment.

We also review our indefinite-lived intangible assets for impairment annually, which consists of brands and trademarks and certain acquired publishing rights. During the fourth quarter of 2019, we completed our annual impairment test related to the indefinite lived intangible assets. We concluded that the fair values of these indefinite-lived intangible assets were above their carrying values and, therefore, there was no indication of impairment. We also concluded that one of our indefinite-lived trademarks had an excess of estimated fair value over its carrying value of approximately 7% as of the 2019 annual impairment test.

Change in Annual Impairment Assessment Date

During the fourth quarter of 2018, we voluntarily changed our annual impairment assessment date from January 31 to February 1 for all of our reporting units and our indefinite-lived intangible assets. This change was made to improve alignment of impairment testing procedures with year-end financial reporting, our annual business planning and budgeting process and the multi-year strategic forecast, which begins in the fourth quarter of each year. As a result, the goodwill and indefinite-lived intangible asset impairment testing will reflect the result of inputs from each of the businesses in the development of the budget and forecast process, including the impact of seasonality of our financial results. Accordingly, management considers this accounting change preferable. This change does not accelerate, delay, avoid, or cause an impairment charge, nor does this change result in adjustments to previously issued financial statements.

In connection with the change in the date of the annual goodwill impairment test, we completed a qualitative assessment of the goodwill by reporting unit as of February 1, 2018 and concluded that it was more likely than not that the fair value of each of the reporting units exceeded its carrying amount. In addition, we also completed a qualitative assessment of our indefinite-lived intangible assets as of February 1, 2018 and concluded that it was more likely than not that the fair value of each of the indefinite-lived intangible assets exceeded its carrying amount.

Intangibles

Intangible assets, net as of April 30 were as ~~follows (in thousands):~~follows:

	2019										2018
	Cost		Accumulated Amortization			Accumulated Impairment			Net		Cost		Accumulated Amortization			Accumulated Impairment			Net
Intangible Assets with Determinable Lives, net
Content and Publishing Rights ⁽¹⁾	$	806,628	$	(417,456	)	$	—		$	389,172	$	824,146	$	(387,386	)	$	—		$	436,760
Customer Relationships ⁽¹⁾		310,977		(65,147	)		—			245,830		212,020		(50,291	)		—			161,729
Brands and Trademarks		32,802		(19,809	)		—			12,993		32,111		(16,011	)		—			16,100
Covenants not to Compete		1,681		(1,236	)		—			445		1,499		(844	)		—			655
Total		1,152,088		(503,648	)		—			648,440		1,069,776		(454,532	)		—			615,244
Intangible Assets with Indefinite Lives
Brands and Trademarks		134,509		—			(3,600	)		130,909		142,189		—			(3,600	)		138,589
Content and Publishing Rights		86,223		—			—			86,223		94,238		—			—			94,238
Total		220,732		—			(3,600	)		217,132		236,427		—			(3,600	)		232,827
Total Intangible Assets, Net	$	1,372,820	$	(503,648	)	$	(3,600	)	$	865,572	$	1,306,203	$	(454,532	)	$	(3,600	)	$	848,071

2016 2015

Cost
Accumulated
Amortization

Cost
Accumulated
Amortization
Intangible Assets with Determinable Lives
Content and Publishing Rights $790,055 $(333,174) $781,618 $(299,022)
Customer Relationships 224,839 (54,677) 225,239 (43,967)
Brands & Trademarks 30,116 (15,713) 30,008 (13,225)
Covenants not to Compete 1,687 (1,011) 1,343 (677)
1,046,697 (404,575) 1,038,208 (356,891)
Intangible Assets with Indefinite Lives
Brands & Trademarks 147,683 - 152,332 -
Content and Publishing Rights 87,202 - 83,972 -
$1,281,582 $(404,575) $1,274,512 $(356,891)
⁽¹⁾ As of April 30, 2019, amounts include intangible assets acquired as part of the acquisition of Learning House on November 1, 2018. Refer to Note 4, “Acquisition,” in the Notes to Consolidated Financial Statements for more information related to the acquisition of Learning House.

Based on the current amount of intangible assets subject to amortization and assuming current foreign exchange rates, the estimated amortization expense for ~~each of~~ the ~~succeeding five fiscal~~following years are as follows: ~~2017 - $48 million;~~

Index

Fiscal Year	Amount
2020	$	50,419
2021		48,517
2022		44,115
2023		40,305
2024		37,929
Thereafter		427,155
Total	$	648,440

In conjunction with a business review performed in the Publishing segment associated with the restructuring activities in the first quarter of the year ended April 30, 2018, ~~– $44 million; 2019 - $42 million; 2020 - $38~~we identified an indefinite-lived brand with forecasted cash flows that did not exceed its carrying value. As a result, an impairment charge of $3.6 million was recorded in the first quarter of the year ended April 30, 2018 to reduce the carrying value of the brand to its fair value of $1.2 million, which will now be amortized over an estimated useful life of 5 years. This impairment charge was included in Operating and ~~2021 - $35 million.~~Administrative Expenses on the Consolidated Statements of Income.

The provisions for income taxes for the years ended April 30 were as ~~follows (in thousands):~~follows:

	2019			2018			2017
Current Provision
U.S. – Federal	$	2,384		$	(2,216	)	$	912
International		52,518			46,112			105,228
State and Local		2,536			961			100
Total Current Provision	$	57,438		$	44,857		$	106,240
Deferred Provision (Benefit)
U.S. – Federal	$	335		$	(26,062	)	$	(13,852	)
International		(7,630	)		2,420			(15,330	)
State and Local		(5,454	)		530			415
Total Deferred (Benefit) Provision	$	(12,749	)	$	(23,112	)	$	(28,767	)
Total Provision	$	44,689		$	21,745		$	77,473

2016 2015 2014
Current Provision
US – Federal $(5,365) $27,137 $13,541
International 31,958 27,613 34,519
State and Local 1,657 1,007 (733)
Total Current Provision $28,250 $55,757 $47,327
Deferred Provision (Benefit)
US – Federal $6,625 $(7,554) $(1,748)
International (6,459) 606 (10,008)
State and Local 595 (216) (547)
Total Deferred (Benefit) $761 $(7,164) $(12,303)
Total Provision $29,011 $48,593 $35,024

International and United States pretax income for the years ended April 30 ~~2016~~ were as ~~follows (in thousands):~~

2016 2015 2014
International $159,152 $165,085 $159,442
United States 15,641 60,376 36,092
Total $174,793 $225,461 $195,534
follows:

	2019		2018			2017
International	$	204,326	$	219,178		$	192,910
United States		8,626		(5,247	)		(1,794	)
Total	$	212,952	$	213,931		$	191,116

~~The Company’s~~

Our effective income tax rate as a percentage of pretax income differed from the U.S. federal statutory rate as shown below:

	2019	2018	2017
U.S. Federal Statutory Rate	21.0%	30.4%	35.0%
German Tax Litigation Expense	—	—	25.7
Cost (Benefit) of Higher (Lower) Taxes on Non-U.S. Income	0.9	(8.4)	(12.7)
State Income Taxes, net of U.S. Federal Tax Benefit	(1.3)	0.4	0.1
Deferred Tax (Benefit) from U.S. Tax Reform Rate Change	0.1	(11.7)	—
Deferred Tax Benefit from U.K. Statutory Tax Rate Change	—	—	(1.3)
Tax Credits and Related Benefits	(0.8)	(1.7)	(6.2)
Tax Adjustments and Other	1.1	1.2	(0.1)
Effective Income Tax Rate	21.0%	10.2%	40.5%

2016 2015 2014
U.S. Federal Statutory Rate 35.0% 35.0% 35.0%
Benefit from Lower Taxes on Non-U.S. Income (14.6) (11.9) (10.8)
State Income Taxes, Net of U.S. Federal Tax Benefit 0.8 0.3 0.4
Deferred Tax Benefit From Statutory Tax Rate Change (3.4) - (5.4)
Tax Adjustments and Other (1.2) (1.8) (1.3)
Effective Income Tax Rate 16.6% 21.6% 17.9%

~~Note:~~ A substantial portion of ~~the Company’s~~our 2019 income iswas earned outside the U.S. in jurisdictions with ~~lower~~different statutory income tax rates than our U.S. statutory rate including: U.K. (57%), Germany (24%), and Australia (7%).

On December 22, 2017, the U.S. ~~including: U.K. (20%): Germany (27%): Australia (30%): Canada (28%~~government enacted comprehensive Federal tax legislation originally known as the Tax Cuts and Jobs Act of 2017 (the “Tax Act”). In December 2017, the SEC staff issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”), which allowed us to record provisional amounts related to the effect of the Tax Act during a measurement period not to extend beyond one year of the enactment date. We completed our analysis during the year ended April 30, 2019 within the measurement period in accordance with SAB 118.

Index

The effective tax rate for the year ended April 30, 2019 was greater than the year ended April 30, 2018 due to the net deferred tax benefit from the Tax Act in the year ended April 30, 2018. Excluding the effect of the Tax Act, the rate was 21.9% for the year ended April 30, 2018, compared to 21.0% for the year ended April 30, 2019.

The effective tax rate was equal to the U.S. statutory rate for the year ended April 30, 2019. The increase from higher taxes on non-U.S. income and various other items was offset by a state tax benefit from more favorable apportionment factors which reduced our deferred tax liabilities, net of federal benefit.

Deferred Tax Benefit from U.K. Statutory Tax Rate Change: In fiscal ~~years~~year 2016, and 2014, the Company recognized non-cash deferred tax benefits of $5.9 million ($0.10 per share), and 10.6 million ($0.18 per share), respectfully, principally associated with new tax legislation enacted in the United Kingdom (“U.K.”) that reduced the U.K. reduced its statutory ~~income tax rates by 2% and 3%, respectively. The benefits reflect the remeasurement of all applicable U.K deferred tax balances~~rate to ~~the new income tax rates of~~ 19% ~~effective~~beginning April 1, 2017, and 18% ~~effective~~beginning April 1, ~~2020.~~2020, and in fiscal year 2017, the U.K. further reduced its statutory rate beginning on April 1, 2020, from 18% to 17%. This resulted in a non-cash deferred tax benefit from the re-measurement of our applicable U.K. deferred tax balances of $2.6 million ($0.04 per share) in the year ended April 30, 2017.

Tax Adjustments and Other:In ~~fiscal~~each of the years ~~2016, 2015~~ended April 30, 2019 and ~~2014, the Company~~April 30, 2018, we recorded a tax ~~benefits~~benefit of ~~$1.3 million, $0.7~~$0.3 million and ~~$2.6~~$0.6 million, respectively related to the expiration of the statute of limitations ~~and~~or favorable resolutions of ~~certain~~ federal, state, and foreign tax matters with tax authorities.

The Tax Act

On December 22, 2017, the U.S. government enacted comprehensive tax legislation. The Tax Act significantly revised the U.S. corporate income tax system by, among other changes, the following:

lowering the U.S. federal corporate income tax rate to 21% with a potentially lower rate for certain foreign derived income;

accelerating deductions for certain business assets;

establishing a dividend received deduction, generally eliminating federal income taxes on cash repatriation from foreign subsidiaries;

requiring companies to pay a one-time transition tax on post-1986 unrepatriated cumulative non-U.S. earnings and profits (“E&P”) of foreign subsidiaries;

eliminating certain deductions such as the domestic production deduction;

establishing limitations on the deductibility of certain expenses including interest and executive compensation; and

creating new taxes on certain foreign earnings.

Deferred tax balances – In ~~addition,~~the year ended April 30, 2018 we remeasured our U.S. deferred tax assets and liabilities based on the federal rate at which they are expected to reverse in ~~fiscal~~the future, generally 21% for reversals anticipated to occur after April 30, 2019. In the prior period, the provisional amount recorded related to the re-measurement of our net deferred tax liability was an estimated net benefit of $25.0 million. During the year ~~2015,~~ended April 30, 2019, in accordance with SAB 118, we completed the ~~Company recognized~~analysis and recorded a ~~non-recurring~~minimal $0.2 million expense.

Foreign tax effects – In connection with the transition from a global tax system, the Tax Act established a mandatory deemed repatriation tax. The tax was computed using our post-1986 E&P that was previously deferred from U.S. income taxes. The tax was based on the amount of foreign earnings held in cash equivalents and certain net assets, which were taxed at 15.5%, and those held in other assets, which were taxed at 8.0%. In accordance with the Tax Act including certain rules applicable to non-calendar year taxpayers, we recorded a provisional amount of $14.2 million in the year ended April 30, 2018. Since April 30, 2018, we no longer assert that we intend to permanently reinvest earnings outside the U.S.

The Tax Act reduced the Federal statutory tax rate from 35% to 21% effective January 1, 2018. As a result, our U.S. federal statutory tax rate was 21.0% for the year ended April 30, 2019 and a blended rate of 30.4% for the year ended April 30, 2018.

The Tax Act created new taxes, effective for us on May 1, 2018, including a provision designed to tax global low taxed income (“GILTI”) and a provision establishing new minimum taxes, such as the base erosion anti-abuse tax (“BEAT”). We have evaluated these provisions and determined there is no material impact to our effective tax rate.

The Tax Act also created a new benefit, effective for us on May 1, 2018, for Foreign Derived Intangible Income (“FDII”), providing a deduction intended to result in a reduced federal income tax rate of approximately 13.125% on certain foreign derived eligible income. For the year ended April 30, 2019, we recorded a tax benefit of ~~$3.1 million related to tax deductions claimed on the write-up of certain foreign tax assets to fair market value.~~$1.2 million.

Index

Accounting for Uncertainty in Income Taxes:

As of April 30, ~~2016~~2019 and April 30, ~~2015,~~2018, the total amount of unrecognized tax benefits were ~~$19.9~~$7.7 million and ~~$19.3~~$6.8 million, respectively, of which ~~$3.5~~$0.7 million and ~~$3.0~~$0.6 million represented accruals for interest and penalties recorded as additional tax expense in accordance with ~~the Company’s~~our accounting policy. Within the income tax provision for ~~both fiscal~~the years ~~2016~~ended April 30, 2019 and ~~2015, the Company~~2018, we recorded net interest expense on reserves for unrecognized and recognized tax benefits of ~~$0.5~~$0.3 million ~~in each year.~~and $0.2 million, respectively. As of April 30, ~~2016~~2019, and April 30, ~~2015,~~2018, the total ~~amount~~amounts of unrecognized tax benefits that would reduce ~~the Company’s~~our income tax provision, if recognized, were approximately ~~$19.2~~$7.7 million and ~~$18.8~~$6.8 million, respectively. ~~The Company does~~We do not expect any significant changes to the unrecognized tax benefits within the next twelve months.

A reconciliation of the unrecognized tax benefits included within the Other Long-Term Liabilities line item inon the Consolidated Statements of Financial Position ~~follows (in thousands):~~follows:

	2019			2018
Balance at May 1	$	6,833		$	6,124
Additions for Current Year Tax Positions		1,473			1,372
Additions for Prior Year Tax Positions		414			69
Reductions for Prior Year Tax Positions		(578	)		(38	)
Foreign Translation Adjustment		(42	)		45
Payments and Settlements		(136	)		(124	)
Reductions for Lapse of Statute of Limitations		(305	)		(615	)
Balance at April 30	$	7,659		$	6,833

2016 2015
Balance at May 1st $19,349 $23,826
Additions for Current Year Tax Positions 1,077 503
Additions for Prior Year Tax Positions 533 519
Reductions for Prior Year Tax Positions (214) (595)
Foreign Translation Adjustment 569 (4,207)
Payments (132) -
Reductions for Lapse of Statute of Limitations (1,319) (697)
Balance at April 30th $19,863 $19,349

~~The Company files~~

Deferred taxes result from temporary differences in the recognition of revenue and expense for tax and financial reporting purposes. It

We believe that it is more likely than not that the results of future operations will generate sufficient taxable income to realize the net deferred tax assets. The significant components of deferred tax assets and liabilities at April 30 were as ~~follows (in thousands):~~follows:

	2016	2015
Inventories	$5,349	$5,230
Intangible and Fixed Assets	288,769	297,323
Total Deferred Tax Liabilities	$294,118	$302,553
			2019			2018
Net Operating Losses	$3,148	$4,599	$	14,491		$	8,976
Reserve for Sales Returns and Doubtful Accounts	6,075	6,922		2,923			2,506
Accrued Employee Compensation	29,550	28,093		17,528			20,096
Foreign and Federal Credits				34,401			31,109
Other Accrued Expenses	14,842	14,583		6,262			4,632
Retirement and Post-Employment Benefits	64,438	62,385		40,653			39,160
Total Gross Deferred Tax Assets			$	116,258		$	106,479
Less Valuation Allowance				(21,179	)		(8,811	)
Total Deferred Tax Assets	$118,053	$116,582	$	95,079		$	97,668

Prepaid Expenses and Other Current Assets			$	(744	)	$	(3,203	)
Unremitted Foreign Earnings				(1,985	)		(1,985	)
Intangible and Fixed Assets				(226,898	)		(231,869	)
Total Deferred Tax Liabilities			$	(229,627	)	$	(237,057	)
Net Deferred Tax Liabilities	$176,065	$185,971	$	(134,548	)	$	(139,389	)

Reported As
Current Deferred Tax Assets	$11,126	$9,981
Non-current Deferred Tax Assets	2,677	2,995
Non-current Deferred Tax Liabilities	189,868	198,947
Deferred Tax Assets			$	9,227		$	4,129
Deferred Tax Liabilities				(143,775	)		(143,518	)
Net Deferred Tax Liabilities	$176,065	$185,971	$	(134,548	)	$	(139,389	)

Index

~~Pretax~~78

The decrease in net deferred tax liabilities is attributable to a foreign exchange driven decrease in our deferred tax liability primarily related to intangible and fixed assets. Our increase in deferred tax liabilities relating to our acquisition of Learning House was offset by the amortization of our deferred tax liabilities related to intangibles and fixed assets, primarily from prior acquisitions. Our increase in deferred tax assets, primarily from foreign and federal tax credits as well as net operating losses, was offset by an increase in our valuation allowance related to those assets. We have concluded that after valuation allowances, it is more likely than not that we will realize substantially all of the net deferred tax assets at April 30, 2019. In assessing the need for a valuation allowance, we take into account related deferred tax liabilities and estimated future reversals of existing temporary differences, future taxable earnings and tax planning strategies to determine which deferred tax assets are more likely than not to be realized in the future. Changes to tax laws, statutory tax rates and future taxable earnings can have an impact on our valuation allowances.

A $21.2 million valuation allowance has been provided based on the uncertainty of utilizing the tax benefits related to our deferred tax assets for foreign tax credits, state, and, to a ~~non-U.S. subsidiary~~small extent, Federal net operating loss carry forwards. As of April 30, 2019, we have apportioned state net operating loss carryforwards totaling $99 million, with a tax effected value of $6 million net of federal benefits, expiring in various amounts over 1 to 20 years.

On June 18, 2019, U.S. Treasury published certain proposed and temporary regulations which would, among other changes, eliminate the dividend received deduction with respect to certain income recognized by us with respect to the transition tax imposed by the Tax Act. Although we are still reviewing the regulations, if applied, such regulations would not materially impact our consolidated financial position or ~~affiliate are subject~~results of operations, as the decrease in our foreign tax credit carryforward would most likely be offset by a decrease in our valuation allowance.

Since April 30, 2018, we no longer intend to ~~U.S. taxation when repatriated. The Company intends to~~permanently reinvest earnings outside the U.S. ~~except in instances where repatriating such earnings would result in no additional tax. Accordingly,~~We have a $2.0 million liability related to the Company has not recognized U.S. tax expense on non-U.S. earnings. At April 30, 2016, the accumulated undistributed earnings of non-U.S. subsidiaries approximated $716 million. It is not practical to determine the U.S. income tax liabilityestimated taxes that would be ~~payable if such earnings were not indefinitely reinvested.~~incurred upon repatriating certain non-U.S. earnings.

Note 14 – Derivative Instruments and Activities

~~The Company, from~~From time-to-time, ~~enters~~we enter into forward exchange and interest rate swap contracts as a hedge against foreign currency asset and liability commitments, changes in interest rates, and anticipated transaction exposures, including intercompany purchases. All derivatives are recognized as assets or liabilities and measured at fair value. Derivatives that are not determined to be effective hedges are adjusted to fair value with a corresponding adjustment to earnings. ~~The Company does~~We do not use financial instruments for trading or speculative purposes.

Index

Interest Rate Contracts:

~~The Company~~

We had ~~$605.0~~$478.8 million of variable rate loans outstanding at April 30, ~~2016,~~2019, which approximated fair value.

As of April 30, ~~2016~~2019 and ~~2015,~~2018, the interest rate swap agreements we maintained ~~by the Company~~ were designated as fully effective cash flow hedges as defined under Accounting Standards Codification ~~(“ASC”)~~ 815 “Derivatives and ~~Hedging.”~~Hedging” ("ASC 815"). As a result, there was no impact on ~~the Company’s~~our Consolidated Statements of Income from changes in the fair value of the interest rate swaps, as they were fully offset by changes in the interest expense on the underlying variable rate debt instruments. Under ASC 815, ~~fully effective~~ derivative instruments that are designated as cash flow hedges have changes in their fair value recorded initially within Accumulated Other Comprehensive Loss inon the Consolidated Statements of Financial Position. As interest expense is recognized based on the variable rate loan agreements, the corresponding deferred gain or loss on the interest rate swaps is reclassified from Accumulated Other Comprehensive Loss to Interest Expense inon the Consolidated Statements of Income. It is management’s intention that the notional amount of interest rate swaps be less than the variable rate loans outstanding during the life of the derivatives.

On April 4, 2016, ~~the Company~~we entered into a forward starting interest rate swap agreement, which fixed a portion of the variable interest due on a variable rate debt renewal on May 16, 2016. Under the terms of the agreement, ~~the Company~~we will pay a fixed rate of 0.92% and ~~receives~~receive a variable rate of interest based on one-month LIBOR (as defined) from the counterparty which is reset every month for a three-year period starting May 16, 2016, ending May 15, 2019. As of April 30, ~~2016,~~2019, the notional amount of the interest rate swap was $350.0 million.

On August 15, 2014, the Company entered into an interest rate swap agreement which fixed a portion of the variable interest due on its variable rate loans outstanding. Under the terms of the agreement, the Company pays a fixed rate of 0.65% and receives a variable rate of interest based on one-month LIBOR (as defined) from the counterparty which is reset every month for a two-year period ending August 15, 2016. As of April 30, 2016, the notional amount of the interest rate swap was $150.0 million.

On January 15, 2014, the Company entered into a $150.0 million notional value interest rate swap agreement which fixed a portion of the variable interest due on its variable rate loans outstanding. Under the terms of the agreement which expired on January 15, 2016, the Company paid a fixed rate of 0.47% and received a variable rate of interest based on one-month LIBOR (as defined) from the counterparty which was reset every month for a two-year period.

~~The Company records~~We record the fair value of ~~its~~our interest rate swaps on a recurring basis using Level 2 inputs of quoted prices for similar assets or liabilities in active markets. The fair value of the interest rate swaps as of April 30, ~~2016~~2019 and ~~2015~~2018, was a deferred ~~loss~~gain of ~~$0.6 million.~~$0.5 million and $5.1 million, respectively. Based on the maturity dates of the contracts, ~~approximately $0.1 million and $0.2 million of~~ the entire deferred ~~losses~~gain as of April 30, ~~2016~~2019 was recorded within Prepaid Expenses and ~~2015 were~~Other Current Assets and as of April 30, 2018, was recorded inwithin Other ~~Accrued Liabilities, with the remaining deferred losses in each period of $0.5 million and $0.4 million recorded in Other Long-Term Liabilities, respectively.~~ Non-Current Assets.

The pre-tax (gains) losses that were reclassified from Accumulated Other Comprehensive Loss ~~into~~to Interest Expense for ~~fiscal~~the years ~~2016, 2015~~ended April 30, 2019, 2018, and ~~2014~~2017 were ~~$0.9~~$(4.7) million, ~~$1.7~~$(1.5) million, and ~~$1.3~~$1.1 million, respectively. Based on the amount in Accumulated Other Comprehensive Loss at April 30, ~~2016,~~2019, approximately ~~$0.7~~$0.2 million, net of tax, of unrecognized ~~loss~~gains would be reclassified into net income in the next twelve months.

Foreign Currency Contracts:

~~The Company~~We may enter into forward exchange contracts to manage ~~the Company’s~~our exposure on certain foreign currency denominated assets and liabilities. The forward exchange contracts are marked to market through Foreign Exchange Transaction (Losses) Gains ~~(Losses) in~~on the Consolidated Statements of Income and carried at their fair value inon the Consolidated Statements of Financial ~~Position with gains reported in Prepaid and Other and losses reported in Other Accrued Liabilities.~~Position. Foreign currency denominated assets and liabilities are remeasured at spot rates in effect on the balance sheet date, with the effects of changes in spot rates reported in Foreign Exchange Transaction (Losses) Gains ~~(Losses).~~on the Consolidated Statements of Income.

As of April 30, ~~2016, there~~2019 and 2018, we did not maintain any open forward contracts. In addition, we did not maintain any open forward contracts during the years ended April 30, 2019 and 2018.

As of April 30, 2017, we did not maintain any open forward contracts, but we did have open forward contracts during the year ended April 30, 2017. There were two open forward exchange contracts with notional amounts of 31 million ~~Euros~~euros and 274 million ~~Pounds Sterling~~pounds sterling to ~~hedge~~manage foreign currency exposures on intercompany loans. ~~As of~~These contracts matured in May 2016 and February 2017, respectively. For the year ended April 30, ~~2015,~~2017, the Company did not maintain any open forward contracts. During fiscal years 2014 through 2016, the Company did not designate any forward exchange contracts as hedges under current accounting standards as the benefits of doing so were not material due to the short-term nature of the contracts. The fair value changes in the forward exchange contracts substantially mitigated the changes in the value of the applicable foreign currency denominated assets and liabilities. The fair value of the open forward exchange contracts was measured on a recurring basis using Level 2 inputs. For fiscal years 2016, 2015 and 2014, the gains ~~(losses)~~ recognized on forward contracts were ~~$1.3 million, $(11.2) million, and $(0.4) million, respectively.~~$59.0 million.

The following schedule shows the composition of net rent expense for operating ~~leases (in thousands):~~leases:

	2019			2018			2017
Minimum Rental	$	29,066		$	31,451		$	35,464
Less: Sublease Rentals		(719	)		(708	)		(626	)
Total	$	28,347		$	30,743		$	34,838

2016 2015 2014
Minimum Rental $37,206 $39,748 $40,929
Less: Sublease Rentals (597) (639) (642)
Total $36,609 $39,109 $40,287

Index

~~Future~~

At April 30, 2019, estimated future minimum ~~payments~~annual rental commitments under ~~operating~~non-cancelable real and personal property leases, were $328.1 million at April 30, 2016. Annual minimum payments under these leases for fiscal years 2017 through 2021 are approximately $35.2 million, $20.2 million, $27.1 million, $25.0 million, and $21.4 million, respectively. as follows:

Fiscal Year	Amount
2020	$	30,887
2021		27,326
2022		23,183
2023		19,257
2024		18,576
Thereafter		129,382
Total	$	248,611

Rent expense associated with operating leases that include scheduled rent increases and tenant incentives, such as rent holidays or leasehold improvement allowances, are recorded on a straight-line basis over the term of the lease. During the first quarter of fiscal year 2015, the Company renewed the lease for its corporate headquarters in Hoboken, New Jersey. The lease renewal is an operating lease which commences on July 1, 2017 and extends the current lease through March 31, 2033. As a result of the renewal, the Company’s total future minimum payments under the new lease will be $223.0 million, with annual minimum payments of $14.4 million in fiscal years 2018 through 2021.

~~The Company is~~We are involved in routine litigation in the ordinary course of ~~its~~our business. A provision for litigation is accrued when information available to ~~the Company~~us indicates that it is probable a liability has been incurred and the amount of loss can be reasonably estimated. Significant judgment may be required to determine both the probability and estimates of loss. When the amount of the loss can only be estimated within a range, the most likely outcome within that range is accrued. If no amount within the range is a better estimate than any other amount, the minimum amount within the range is accrued. When uncertainties exist related to the probable outcome of litigation and/or the amount or range of loss, ~~the Company does~~we do not record a liability, but ~~discloses~~disclose facts related to the nature of the contingency and possible losses if management considers the information to be material. Reserves for legal defense costs are ~~recorded~~recognized when ~~management believes such future costs will be material.~~incurred. The accruals for loss contingencies and legal costs are reviewed regularly and may be adjusted to reflect updated information on the status of litigation and advice of legal counsel. In the opinion of management, the ultimate resolution of all pending litigation as of April 30, ~~2016~~2019, will not have a material effect upon ~~the~~our consolidated financial condition or results of ~~operations of the Company.~~

Over the past few years, the Company has from time to time faced claims from photographers or agencies that the Company has used photographs without licenses or beyond licensed permissions. The Company has insurance coverage for a significant portion of such claims. The Company does not believe that its exposure to such claims either individually or in the aggregate is material.operations.

Note 16 -– Retirement Plans

~~The Company and its principal subsidiaries~~We have retirement plans that cover substantially all employees. The plans generally provide for employee retirement between the ages of 60 and 65, and benefits based on length of service and compensation, as defined.

~~Recent Plan Curtailments~~

~~In fiscal year 2013, the Company’s~~Our Board of Directors approved plan amendments that froze the U.S. Employees’ Retirement Plan, Supplemental Benefit Plan, and Supplemental Executive Retirement Plan, effective June 30, 2013. These plans are U.S. defined benefit plans. Under the amendments, no new employees are permitted to enter these plans and no additional benefits for current participants for future services will be accrued after June 30, 2013.following retirement plans:

~~The Company’s Board of Directors approved plan amendments that froze the~~

Retirement Plan for the Employees of John Wiley & Sons, Canada was frozen effective December 31, 2015. Under the amendments, no new employees are permitted to enter this plan and no additional benefits for current participants for future services will be accrued after December 31, 2015. The Company recorded a one-time pension plan benefit of $0.6 million in fiscal year 2015 as a result of the plan amendments. The curtailment benefit is included within the fiscal year 2015 Restructuring Charges line item in the Consolidated Statements of Income.2015;

~~The Company’s Board of Directors approved plan amendments that froze the~~

Retirement Plan for the Employees of John Wiley & Sons, Ltd., a U.K. plan was frozen effective April 30, ~~2015. Under the amendments, no new employees are permitted to enter this plan~~2015 and;

U.S. Employees’ Retirement Plan, Supplemental Benefit Plan, and ~~no additional benefits for current participants for future services will be accrued after April~~Supplemental Executive Retirement Plan, were frozen effective June 30, 2015. While there was no significant amount recorded for the curtailment, there was a resulting concession with employees to contribute an additional $0.8 million to the Company’s defined contribution plans in fiscal year 2015. This contribution was recognized in the Restructuring charges line item in the Company’s Consolidated Statements of Income.2013.

The components of net pension expense (income) for the defined benefit plans and the ~~weighted-average~~weighted average assumptions were as ~~follows (in thousands):~~follows:

	2016		2015		2014		2019						2018						2017
	U.S.	Non-U.S.	U.S.	Non-U.S.	U.S.	Non-U.S.	U.S.			Non-U.S.			U.S.			Non-U.S.			U.S.			Non-U.S.
Service Cost	$ -	$1,455	$ -	$5,942	$ -	$8,066	$	—		$	912		$	—		$	960		$	—		$	967
Interest Cost	13,612	16,446	13,159	17,417	12,613	17,144		11,704			12,943			11,666			13,876			12,398			14,449
Expected Return on Plan Assets	(14,756)	(25,088)	(13,782)	(22,654)	(14,838)	(21,607)		(13,472	)		(25,551	)		(13,154	)		(26,385	)		(14,053	)		(21,173	)
Net Amortization of Prior Service Cost and Transition Asset	(154)	55	(115)	68	-	124
Net Amortization of Prior Service Cost								(154	)		57			(154	)		57			(154	)		54
Recognized Net Actuarial Loss	2,240	2,475	1,470	6,299	5,681	7,490		2,035			3,746			2,289			3,832			2,622			2,553
Curtailment/Settlement Loss (Gain)	1,857	-	-	(428)	-	79
Net Pension Charge (Credit)	$2,799	$(4,657)	$732	$6,644	$3,456	$11,296
Curtailment/Settlement Loss								—			—			-			19			8,842			—
Net Pension Expense (Income)							$	113		$	(7,893	)	$	647		$	(7,641	)	$	9,655		$	(3,150	)

Discount Rate	4.2%	3.5%	4.7%	4.2%	4.2%			4.3	%		2.6	%		4.1	%		2.6	%		4.0	%		3.5	%
Rate of Compensation Increase	N/A	3.0%	N/A	3.2%	N/A	3.2%		N/A			3.0	%		N/A			3.0	%		N/A			3.0	%
Expected Return on Plan Assets	6.8%	6.7%	6.8%	6.7%	8.0%	6.7%		6.8	%		6.5	%		6.8	%		6.5	%		6.8	%		6.7	%

Index

8581

We adopted ASU 2017-07, “Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost,” on May 1, 2018. Refer to Note 2, "Summary of Significant Accounting Policies, Recently Issued and Recently Adopted Accounting Standards," for more information. The guidance requires that the service cost component of net pension and postretirement benefit costs be reported in the same line item as other compensation costs arising from services rendered by the pertinent employees during the period. Such amounts are reflected in Operating and Administrative Expenses on our Consolidated Statements of Income. The guidance requires that the other components of net benefit costs be reported separately from the service cost component and below operating income. Such amounts are reflected in Interest Income and Other on our Consolidated Statements of Income. We were required to retrospectively adopt this guidance.

The amounts in Accumulated Other Comprehensive Loss that are expected to be recognized as components of net periodic benefit cost during the next fiscal year are as ~~follows (in thousands):~~follows:

	U.S.			Non-U.S.		Total
Actuarial Loss	$	2,390		$	4,091	$	6,481
Prior Service Cost		(154	)		82		(72	)
Total	$	2,236		$	4,173	$	6,409

Large accelerated filer ☒	Accelerated filer ☐
Non-accelerated filer ☐	Smaller reporting company ☐
	Emerging growth company ☐

	Class A Common Stock			Class B Common Stock
		Market Price			Market Price
	Dividends	High	Low	Dividends	High	Low
2016
First Quarter	$0.30	$58.66	$51.68	$0.30	$58.74	$52.54
Second Quarter	0.30	53.18	48.16	0.30	52.93	48.25
Third Quarter	0.30	54.29	40.29	0.30	53.80	41.25
Fourth Quarter	0.30	50.74	40.21	0.30	50.85	40.18
2015
First Quarter	$0.29	$62.05	$54.52	$0.29	$61.80	$54.35
Second Quarter	0.29	60.42	51.45	0.29	61.08	52.04
Third Quarter	0.29	62.85	56.48	0.29	62.75	56.37
Fourth Quarter	0.29	65.21	56.88	0.29	65.10	56.74

	Total Number of Shares Purchased	Average Price Paid Per Share	Total Number of Shares Purchased as part of a Publicly Announced Program	Maximum Number of Shares that May be Purchased Under the Program
February 2016	-	-	-	963,022
March 2016	118,036	$47.12	118,036	845,006
April 2016	98,150	$48.00	98,150	746,836
Total	216,186	$47.52	216,186

	For the Years Ended April 30,^(a)(b)
Dollars (in millions, except per share data)	2019			2018			2017			2016			2015
Revenue, net	$	1,800.1		$	1,796.1		$	1,718.5		$	1,727.0		$	1,822.4
Operating Income ^(c)		224.0			231.5			211.5			188.1			237.7
Net Income ^(a)		168.3			192.2			113.6			145.8			176.9
Working Capital ^(d)		(379.8	)		(394.3	)		(428.1	)		(111.1	)		(62.8	)
Contract Liability (Deferred Revenue) in Working Capital ^(d)		(507.4	)		(486.4	)		(436.2	)		(426.5	)		(372.1	)
Total Assets		2,937.0			2,839.5			2,606.2			2,921.1			3,004.2
Long-Term Debt		478.8			360.0			365.0			605.0			650.1
Shareholders' Equity		1,181.3			1,190.6			1,003.1			1,037.1			1,055.0
Per Share Data
Earnings Per Share
Basic	$	2.94		$	3.37		$	1.98		$	2.51		$	3.01
Diluted	$	2.91		$	3.32		$	1.95		$	2.48		$	2.97
Cash Dividends
Class A Common	$	1.32		$	1.28		$	1.24		$	1.20		$	1.16
Class B Common	$	1.32		$	1.28		$	1.24		$	1.20		$	1.16

For the Years Ended April 30,
Dollars in millions (except per share data)	2016	2015	2014	2013	2012
Revenue	$1,727.0	$1,822.4	$1,775.2	$1,760.8	$1,782.7
Operating Income (a-b)	188.1	237.7	206.7	199.4	280.4
Net Income (a-c)	145.8	176.9	160.5	144.2	212.7
Working Capital (d)	(111.1)	(62.8)	60.1	(32.2)	(66.3)
Deferred Revenue in Working Capital (d)	(426.5)	(372.1)	(385.7)	(363.0)	(342.0)
Total Assets	2,921.1	3,004.2	3,077.4	2,806.4	2,532.9
Long-Term Debt	605.0	650.1	700.1	673.0	475.0
Shareholders’ Equity	1,037.1	1,055.0	1,182.2	988.4	1,017.6
Per Share Data
Earnings Per Share (a-c)
Diluted	$2.48	$2.97	$2.70	$2.39	$3.47
Basic	$2.51	$3.01	$2.73	$2.43	$3.53
Cash Dividends
Class A Common	$1.20	$1.16	$1.00	$0.96	$0.80
Class B Common	$1.20	$1.16	$1.00	$0.96	$0.80

			Total Charges
	2016	2015	Incurred to Date
Charges by Segment:
Research	$5,048	$4,555	$20,273
Professional Development	2,277	4,385	24,806
Education	1,206	1,571	4,786
Shared Services	20,080	18,293	74,724
Total Restructuring Charges	$28,611	$28,804	$124,589

Charges by Activity:
Severance	$16,443	$17,093	$79,204
Process reengineering consulting	7,191	301	18,666
Other activities	4,977	11,410	26,719
Total Restructuring Charges	$28,611	$28,804	$124,589

			% of	% change
	2016	2015	Revenue	w/o FX
Revenue by Region:
Americas	$370,111	$398,573	38%	-6%
EMEA	540,562	585,693	56%	-3%
Asia-Pacific	54,581	56,529	6%	7%
Total Revenue	$965,254	$1,040,795	100%	-3%

				% change
PROFFESIONAL DEVELOPMENT (PD):	2016	2015	% change	w/o FX (a)
Revenue:
Knowledge Services:
Print Books	$192,149	$206,086	-7%	-4%
Digital Books	47,089	49,672	-5%	-3%
Online Test Preparation and Certification	28,169	22,119	27%	27%
Other Knowledge Service Revenue	28,813	30,094	-4%	-2%
	296,220	307,971	-4%	-2%
Talent Solutions:
Assessment	$57,369	$57,035	1%	1%
Corporate Learning	50,692	42,017	21%	31%
	108,061	99,052	9%	14%

Total Revenue	$404,281	$407,023	-1%	2%

Cost of Sales	(103,652)	(114,014)	-9%	-7%

Gross Profit	$300,629	$293,009	3%	6%
Gross Profit Margin	74.4%	72.0%

Direct Expenses	(118,638)	(131,969)	-10%	-7%
Amortization of Intangibles	(12,691)	(13,498)	-6%	-3%
Restructuring Charges (see Note 6)	(2,277)	(4,385)

Direct Contribution to Profit	$167,023	$143,157	17%	17%
Direct Contribution Margin	41.3%	35.2%

Shared Services and Administrative Costs:
Distribution and Operation Services	(28,364)	(30,838)	-8%	-5%
Technology and Content Management	(40,951)	(48,002)	-15%	-13%
Occupancy and Other	(23,160)	(26,180)	-12%	-8%

Contribution to Profit	$74,548	$38,137	95%	84%
Contribution Margin	18.4%	9.4%

				% change
EDUCATION:	2016	2015	% change	w/o FX (a)
Revenue:
Books:
Print Textbooks	$107,636	$144,500	-26%	-20%
Digital Books	34,462	34,086	1%	5%
	142,098	178,586	-20%	-15%

Custom Materials	51,842	50,659	2%	2%

Course Workflow Solutions (WileyPLUS)	58,551	54,200	8%	10%

Online Program Management (Deltak)	96,469	81,593	18%	18%

Other Education Revenue	8,542	9,584	-11%	-11%

Total Revenue	$357,502	$374,622	-5%	-2%

Cost of Sales	(99,573)	(110,182)	-10%	-8%

Gross Profit	$257,929	$264,440	-2%	0%
Gross Profit Margin	72.1%	70.6%

Direct Expenses	(128,821)	(125,613)	3%	5%
Amortization of Intangibles	(9,527)	(9,527)	0%	0%
Restructuring Charges (see Note 6)	(1,206)	(1,571)		0%

Direct Contribution to Profit	$118,375	$127,729	-7%	-3%
Direct Contribution Margin	33.1%	34.1%

Shared Services and Administrative Costs:
Distribution and Operation Services	(15,207)	(12,863)	18%	24%
Technology and Content Management	(51,612)	(54,272)	-5%	-3%
Occupancy and Other	(15,688)	(13,950)	12%	15%

Contribution to Profit	$35,868	$46,644	-23%	-18%
Contribution Margin	10.0%	12.5%

	2016	2015
Accounts Receivable	$(29,447)	$(37,300)
Inventories	4,924	6,555
Accounts and Royalties Payable	(4,662)	(5,405)
Decrease in Net Assets	$(19,861)	$(25,340)

		Payments Due by Period
		Within	2-3	4-5	After 5
	Total	Year 1	Years	Years	Years

Total Debt	$605.0	$ -	$ -	$605.0	$ -
Interest on Debt1	50.7	11.6	20.4	18.7	-
Non-Cancelable Leases	328.2	35.2	47.3	46.4	199.3
Minimum Royalty Obligations	257.4	83.4	97.4	55.0	21.6
Other Operating Commitments	71.7	30.5	30.0	11.2	-
Total	$1,313.0	$160.7	$195.1	$736.3	$220.9

Reports of Independent Registered Public Accounting Firm

Financial Statements
Consolidated Statements of Financial Position - April 30, 2019 and 2018	49
Consolidated Statements of Income for the years ended April 30, 2019, 2018, and 2017	50
Consolidated Statements of Comprehensive Income for the years ended April 30, 2019, 2018, and 2017	51
Consolidated Statements of Cash Flows for the years ended April 30, 2019, 2018, and 2017	52
Consolidated Statements of Shareholders’ Equity for the years ended April 30, 2019, 2018, and 2017	54
Notes to Consolidated Financial Statements
Note 1. Description of Business	55
Note 2. Summary of Significant Accounting Policies, Recently Issued, and Recently Adopted Accounting Standards	55
Note 3. Revenue Recognition, Contracts with Customers	63
Note 4. Acquisition	69
Note 5. Reconciliation of Weighted Average Shares Outstanding	71
Note 6. Accumulated Other Comprehensive Loss	71
Note 7. Restructuring and Related Charges	71
Note 8. Inventories	72
Note 9. Product Development Assets	73
Note 10. Technology, Property, and Equipment	73
Note 11. Goodwill and Intangible Assets	74
Note 12. Income Taxes	76
Note 13. Debt and Available Credit Facilities	79
Note 14. Derivative Instruments and Activities	79
Note 15. Commitment and Contingencies	80
Note 16. Retirement Plans	81
Note 17. Stock-Based Compensation	85
Note 18. Capital Stock and Changes in Capital Accounts	87
Note 19. Segment Information	88
Note 20. Supplementary Quarterly Financial Information–Results By Quarter (Unaudited)	90
Note 21. Subsequent Events	91

Financial Statement Schedule
Schedule II – Valuation and Qualifying Accounts for the years ended April 30, 2019, 2018, and 2017	97

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
John Wiley & Sons, Inc., and Subsidiaries		April 30,
Dollars in thousands		2016		2015
Assets:
Current Assets
Cash and cash equivalents	$	363,806	$	457,441
Accounts receivable		167,638		147,183
Inventories		57,779		63,779
Prepaid and other		81,456		72,516
Total Current Assets		670,679		740,919

Product Development Assets		72,126		69,589
Technology, Property & Equipment		214,770		193,010
Intangible Assets		877,007		917,621
Goodwill		951,663		962,367
Income Tax Deposits		62,912		57,098
Other Assets		71,939		63,639
Total Assets	$	2,921,096	$	3,004,243

Liabilities and Shareholders’ Equity:
Current Liabilities
Short-term debt	$	-	$	100,000
Accounts and royalties payable		166,222		161,465
Deferred revenue		426,489		372,051
Accrued employment costs		97,902		93,922
Accrued income taxes		9,450		9,484
Accrued pension liability		5,492		4,594
Other accrued liabilities		76,252		62,167
Total Current Liabilities		781,807		803,683

Long-Term Debt		605,007		650,090
Accrued Pension Liability		224,170		209,727
Deferred Income Tax Liabilities		189,868		198,947
Other Long-Term Liabilities		83,138		86,756
Shareholders’ Equity
Preferred Stock, $1 par value: Authorized - 2 million, Issued - zero		-		-
Class A Common Stock, $1 par value: Authorized - 180 million,
Issued – 69,797,994		69,798		69,798
Class B Common Stock, $1 par value: Authorized - 72 million,
Issued – 13,392,268		13,392		13,392
Additional paid-in capital		368,698		353,018
Retained earnings		1,673,325		1,597,439
Accumulated other comprehensive (loss):
Foreign currency translation adjustment		(267,920)		(246,854)
Unamortized retirement costs, net of tax		(179,405)		(159,434)
Unrealized loss on interest rate swap, net of tax		(361)		(345)
		(447,686)		(406,633)
Less Treasury Shares At Cost (Class A – 21,708,905 and 20,441,767;
Class B – 3,917,128 and 3,910,264)		(640,421)		(571,974)
Total Shareholders’ Equity		1,037,106		1,055,040
Total Liabilities and Shareholders’ Equity	$	2,921,096	$	3,004,243

The accompanying notes are an integral part of the consolidated financial statements.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
	Common Stock Class A	Common Stock Class B	Additional Paid-in Capital	Retained Earnings	Treasury Stock	Accumulated Other Comp- rehensive Income (Loss)	Total Share- holder’s Equity


John Wiley & Sons, Inc., and Subsidiaries
Dollars in thousands

Balance at April 30, 2013	$69,793	$13,397	$290,762	$1,387,512	$(494,476)	$(278,632)	$988,356

Restricted Shares Issued under Share-based Compensation Plans			(5,962)		6,144		182
Proceeds from Exercise of Stock Options and other			31,403		24,417		55,820
Shortfall in Tax Benefits from Share-based Compensation			(1,466)				(1,466)
Share-based compensation expense			12,851				12,851
Purchase of Treasury Shares					(63,393)		(63,393)
Class A Common Stock Dividends				(51,842)			(51,842)
Class B Common Stock Dividends				(7,111)			(7,111)
Common Stock Class Conversions	5	(5)					-
Comprehensive Income				160,510		88,341	248,851

Balance at April 30, 2014	$69,798	$13,392	$327,588	$1,489,069	$(527,308)	$(190,291)	$1,182,248

Restricted Shares Issued under Share-based Compensation Plans			(3,471)		4,085		614
Proceeds from Exercise of Stock Options and other			12,093		13,230		25,323
Excess Tax Benefits from Share-based Compensation			3,191				3,191
Share-based compensation expense			13,617				13,617
Purchase of Treasury Shares					(61,981)		(61,981)
Class A Common Stock Dividends				(57,541)			(57,541)
Class B Common Stock Dividends				(10,957)			(10,957)
Comprehensive Income (Loss)				176,868		(216,342)	(39,474)

Balance at April 30, 2015	$69,798	$13,392	$353,018	$1,597,439	$(571,974)	$(406,633)	$1,055,040

Restricted Shares Issued under Share-based Compensation Plans			(3,152)		3,325		173
Net (Payments)/Proceeds from Exercise of Stock Options and other			1,700		(1,795)		(95)
Excess Tax Benefits from Share-based Compensation			1,027				1,027
Share-based compensation expense			16,105				16,105
Purchase of Treasury Shares					(69,977)		(69,977)
Class A Common Stock Dividends				(58,658)			(58,658)
Class B Common Stock Dividends				(11,238)			11,238
Comprehensive Income (Loss)				145,782		(41,053)	104,729

Balance at April 30, 2016	$69,798	$13,392	$368,698	$1,673,325	$(640,421)	$(447,686)	$1,037,106

The accompanying notes are an integral part of the consolidated financial statements.

	Foreign	Unamortized	Interest
	Currency	Retirement	Rate
	Translation	Costs	Swaps	Total

Balance at April 30, 2014	$(66,664)	$(123,025)	$(602)	$(190,291)
Other comprehensive income (loss) before reclassifications	(180,190)	(42,347)	(783)	(223,320)
Reclassification of amounts to Consolidated Statements of Income	-	5,938	1,040	6,978
Total other comprehensive income (loss)	(180,190)	(36,409)	257	(216,342)
Balance at April 30, 2015	$(246,854)	$(159,434)	$(345)	$(406,633)
Other comprehensive income (loss) before reclassifications	(21,066)	(24,930)	(569)	(46,565)
Reclassification of amounts to Consolidated Statements of Income	-	4,959	553	5,512
Total other comprehensive income (loss)	(21,066)	(19,971)	(16)	(41,053)
Balance at April 30, 2016	$(267,920)	$(179,405)	$(361)	$(447,686)

				Foreign
				Translation &
	2015	Charges	Payments	Reclassifications	2016
Severance	$18,794	$16,443	$(18,485)	$(95)	$16,657
Process reengineering consulting	-	7,191	(7,191)	-	-
Other activities	11,859	4,977	(4,188)	(796)	11,852
Total	$30,653	$28,611	$(29,864)	$(891)	$28,509

	2016	2015
Composition Costs	$40,944	$41,280
Royalty Advances	31,182	28,309
Total	$72,126	$69,589

	2016	2015
Capitalized Software and Computer Hardware	$539,968	$460,199
Buildings and Leasehold Improvements	84,923	86,225
Furniture, Fixtures and Warehouse Equipment	54,607	60,460
Land and Land Improvements	3,726	3,820
	683,224	610,704
Accumulated Depreciation	(468,454)	(417,694)
Total	$214,770	$193,010

	2015	Acquisitions	Foreign Translation Adjustment	2016
Research	$447,326	-	$(14,025)	$433,301
Professional Development	365,215	-	3,321	368,536
Education	149,826	-	-	149,826
Total	$962,367	-	$(10,704)	$951,663

	2016	2015
Balance at May 1st	$19,349	$23,826
Additions for Current Year Tax Positions	1,077	503
Additions for Prior Year Tax Positions	533	519
Reductions for Prior Year Tax Positions	(214)	(595)
Foreign Translation Adjustment	569	(4,207)
Payments	(132)	-
Reductions for Lapse of Statute of Limitations	(1,319)	(697)
Balance at April 30th	$19,863	$19,349

	2019						2018
	Level 1		Level 2		Total		Level 1		Level 2		Total
U.S. Plan Assets
Investments measured at NAV:
Global Equity Securities: Limited Partnership					$	109,490					$	95,933
Fixed Income Securities: Commingled Trust Funds						104,138						100,295
Other: Real Estate Commingled Trust Fund						—						8,755
Total Assets at NAV					$	213,628					$	204,983

Non-U.S. Plan Assets
Equity Securities:
U.S. Equities	$	—	$	39,652	$	39,652	$	—	$	31,203	$	31,203
Non-U.S. Equities		—		117,575		117,575		—		96,387		96,387
Balanced Managed Funds		—		48,550		48,550		—		91,743		91,743
Fixed Income Securities: Commingled Funds		855		199,720		200,575		—		197,804		197,804
Other:
Real Estate/Other		—		501		501		—		549		549
Cash and Cash Equivalents		1,396		—		1,396		1,762		—		1,762
Total Non-U.S. Plan Assets	$	2,251	$	405,998	$	408,249	$	1,762	$	417,686	$	419,448
Total Plan Assets	$	2,251	$	405,998	$	621,877	$	1,762	$	417,686	$	624,431

	For the Years Ended April 30,
	2016	2015	2014
Fair Value of Options on Grant Date	$14.77	$16.97	$10.12

Weighted Average assumptions:
Expected Life of Options (years)	7.2	7.2	7.4
Risk-Free Interest Rate	2.1%	2.2%	2.1%
Expected Volatility	29.7%	30.9%	30.5%
Expected Dividend Yield	2.1%	1.9%	2.5%
Fair Value of Common Stock on Grant Date	$55.99	$59.70	$39.53

	2016
Fair Value of Options on Grant Date	$	14.77

Weighted Average assumptions:
Expected Life of Options (years)		7.2
Risk-Free Interest Rate		2.1	%
Expected Volatility		29.7	%
Expected Dividend Yield		2.1	%
Fair Value of Common Stock on Grant Date	$	55.99

		Options Outstanding						Options Exercisable
Range of Exercise Prices		Number of Options (in 000’s)		Weighted Average Remaining Term (in years)		Weighted Average Exercise Price		Number of Options (in 000’s)		Weighted Average Exercise Price
$	35.04		11		0.2	$	35.04		11	$	35.04
$	39.53 to $40.02		101		2.3	$	39.71		101	$	39.71
$	48.06 to $49.55		106		2.3	$	48.69		106	$	48.69
$	55.99 to $59.70		154		3.6	$	57.87		154	$	57.87
Total/Average			372		2.8	$	49.70		372	$	49.70

	Options Outstanding			Options Exercisable
Range of Exercise Prices	Number of Options (in 000’s)	Weighted Average Remaining Term (in years)	Weighted Average Exercise Price	Number of Options (in 000’s)	Weighted Average Exercise Price
$33.05 to $35.04	154	2.4	$34.88	154	$34.88
$39.53 to $40.02	560	4.4	$39.75	253	$40.02
$47.55 to $49.55	915	3.2	$48.65	692	$48.77
$55.99 to $59.70	337	7.9	$57.87	41	$55.99
Total/Average	1,966	4.3	$46.62	1,140	$45.22

Changes in Common Stock A:	2019		2018		2017
Number of shares, beginning of year		70,111		70,086		69,798
Common stock class conversions and other		16		25		288
Number of shares issued, end of year		70,127		70,111		70,086

Changes in Common Stock A in treasury:
Number of shares held, beginning of year		21,853		22,097		21,709
Purchase of treasury shares		1,192		713		953
Restricted shares issued under stock-based compensation plans - non-PSU Awards		(210)		(153)		(74)
Restricted shares issued under stock-based compensation plans - PSU Awards		(110)		(126)		(186)
Stock grants of fully vested Class A shares - common stock		—		(20)		(24)
Restricted shares, forfeited		9		15		8
Restricted shares issued from exercise of stock options		(229)		(788)		(469)
Shares withheld for taxes		130		116		97
Other		(1)		(1)		83
Number of shares held, end of year		22,634		21,853		22,097
Number of Common Stock A outstanding, end of year		47,493		48,258		47,989

Changes in Common Stock B:	2019		2018		2017
Number of shares, beginning of year		13,071		13,096		13,392
Common stock class conversions and other		(16)		(25)		(296)
Number of shares issued, end of year		13,055		13,071		13,096

Changes in Common Stock B in treasury:
Number of shares held, beginning of year		3,918		3,918		3,917
Shares repurchased		—		—		1
Number of shares held, end of year		3,918		3,918		3,918
Number of Common Stock B outstanding, end of year		9,137		9,153		9,178

Date of Declaration by Board of Directors	Quarterly Cash Dividend	Total Dividend	Class of Common Stock	Dividend Paid Date	Shareholders of Record as of Date
June 21, 2018	$0.33 per common share	$19.0 million	Class A and Class B	July 18, 2018	July 3, 2018
September 26, 2018	$0.33 per common share	$18.9 million	Class A and Class B	October 24, 2018	October 9, 2018
December 19, 2018	$0.33 per common share	$18.9 million	Class A and Class B	January 16, 2019	January 2, 2019
March 20, 2019	$0.33 per common share	$18.6 million	Class A and Class B	April 17, 2019	April 2, 2019

	For the years ended April 30,
Total Revenue by Product/Service	2016	2015	2014
Journal Revenue	$815,614	$882,932	$870,194
Books and Custom Material	582,818	642,866	693,963
Online Program Management (Deltak)	96,469	81,593	70,179
Talent Solutions	108,061	99,052	33,047
Course Workflow Solutions (WileyPlus)	58,551	54,200	49,459
Other	65,524	61,797	58,353
Total	$1,727,037	$1,822,440	$1,775,195

Total Assets
Research	$1,216,350	$1,246,673	$1,392,373
Professional Development	730,434	695,859	554,146
Education	426,077	430,733	455,848
Corporate/Shared Services	548,235	630,978	674,998
Total	$2,921,096	$3,004,243	$3,077,365

Expenditures for Long Lived Assets
Research	$32,294	$18,288	$23,311
Professional Development	15,020	179,174	59,837
Education	10,376	14,188	11,935
Corporate/Shared Services	93,705	69,121	57,564
Total	$151,395	$280,771	$152,647

Depreciation and Amortization
Research	$55,646	$57,992	$62,664
Professional Development	37,837	31,943	28,542
Education	35,536	38,928	40,023
Corporate/Shared Services	26,830	25,062	16,868
Total	$155,849	$153,925	$148,097

	Revenue			Long-Lived Assets (Technology, Property & Equipment)			Revenue, net						Technology, Property and Equipment, Net
	2016	2015	2014	2016	2015	2014	2019		2018		2017		2019		2018		2017
United States	$884,185	$920,166	$937,106	$166,878	$143,786	$135,711	$	932,927	$	913,852	$	786,574	$	252,459	$	249,542	$	208,572
United Kingdom	153,442	142,680	127,716	23,246	24,711	32,286		150,242		147,406		189,479		18,331		20,955		21,368
Germany	69,676	83,714	89,107	9,629	9,781	12,877		97,505		98,404		75,090		8,423		9,259		8,770
Japan	76,930	84,420	80,074	35	21	40		77,145		81,572		62,674		87		72		75
Australia								77,453		78,270		66,309		1,440		1,454		591
China	52,815	45,159	41,581	244	307	516		55,024		53,076		39,653		688		229		270
Canada								50,882		55,568		50,740		2,659		3,635		1,232
France								51,441		51,826		44,760		403		635		335
India	38,208	39,494	39,953	234	180	172		36,472		41,637		34,306		1,299		1,437		245
Australia	78,786	80,380	79,453	1,041	1,696	2,712
France	49,970	57,492	25,376	9,517	6,720	-
Canada	50,243	56,949	61,559	1,617	1,606	729
Other Countries	272,782	311,986	293,270	2,329	4,202	3,675		270,978		274,492		368,945		3,232		2,716		1,600
Total	$1,727,037	$1,822,440	$1,775,195	$214,770	$193,010	$188,718	$	1,800,069	$	1,796,103	$	1,718,530	$	289,021	$	289,934	$	243,058

$ In millions, except per share data		2016				2015

Revenue
First Quarter	$	422.9			$	437.9
Second Quarter		433.4				477.0
Third Quarter		436.4				465.9
Fourth Quarter		434.3				441.6
Fiscal Year	$	1,727.0			$	1,822.4

Gross Profit
First Quarter	$	303.2			$	313.9
Second Quarter		316.6				342.4
Third Quarter		316.2				341.7
Fourth Quarter		325.1				324.8
Fiscal Year	$	1,261.1			$	1,322.8

Operating Income
First Quarter (a)	$	44.9			$	49.6
Second Quarter (b)		60.3				76.1
Third Quarter (c)		39.6				54.0
Fourth Quarter (d)		43.3				58.0
Fiscal Year	$	188.1			$	237.7

Net Income
First Quarter (a)	$	32.5			$	33.7
Second Quarter (b)		43.6				53.8
Third Quarter (c)		35.5				42.5
Fourth Quarter (d)		34.2				46.9
Fiscal Year	$	145.8			$	176.9

		2016				2015
Income Per Share		Diluted		Basic		Diluted		Basic
First Quarter (a)	$	0.55	$	0.55	$	0.56	$	0.57
Second Quarter (b)		0.74		0.75		0.90		0.91
Third Quarter (c)		0.61		0.62		0.72		0.73
Fourth Quarter (d)		0.59		0.60		0.79		0.80
Fiscal Year	$	2.48	$	2.51	$	2.97	$	3.01