UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC  20549

FORM 10-K

[x]           ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended:  April 30, 20132016

OR

[  ]           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


JOHN WILEY & SONS, INC.
(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 
 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
Class A Common Stock, par value $1.00 per share New York Stock Exchange
Class B Common Stock, par value $1.00 per share New York Stock Exchange
   
 Securities registered pursuant to Section 12(g) of the Act: 
 None 

 


1
 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
 
 
Yes |X|     No |    |
 
 
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.
 
 
Yes |   |     No |X |
 
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
 
 
Yes |X|     No |    |
 
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
 
 
Yes |X|     No |    |
 
 
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. |   |
 
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” ”accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
 
Large accelerated filer   |X|       Accelerated filer   |   |       Non-accelerated filer   |   |      Smaller reporting company   |   |
 
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
 
 
Yes |    |      No |X|
 
 
The aggregate market value of the voting stock held by non-affiliates of the registrant, computed by reference to the closing price as of the last business day of the registrant’s most recently completed second fiscal quarter, October 31, 2012,2015, was approximately $2,037.6$2,331.2 million.  The registrant has no non-voting common stock.
 
 
The number of shares outstanding of the registrant’s Class A and Class B Common Stock as of May 31, 20132016 was 49,197,18148,109,204 and 9,492,4929,475,140 respectively.
 
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 19, 2013,22, 2016, are incorporated by reference into Part III of this formForm 10-K.

 


2
 
JOHN WILEY AND SONS, INC. AND SUBSIDIARIES
FORM 10-K
FOR THE FISCAL YEAR ENDED APRIL 30, 20132016
INDEX


PART I PAGE
ITEM 1.
Business
4
ITEM 1A.
Risk Factors
4-10
4-11
ITEM 1B.
Unresolved Staff Comments
10
11
ITEM 2.
Properties
11
12
ITEM 3.
Legal Proceedings
11
13
ITEM 4Mine Safety Disclosures – Not Applicable 
   
PART II  
ITEM 5.
Market for the Company’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
12
13
ITEM 6.
Selected Financial Data
13
14
ITEM 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
14-54
15-55
ITEM 7A.
Quantitative and Qualitative Disclosures About Market Risk
55-56
55-58
ITEM 8.
Financial Statements and Supplementary Data
58-94
59-98
ITEM 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
95
99
ITEM 9A.
Controls and Procedures
95
99
ITEM 9B.
Other Information
95
99
   
PART III  
ITEM 10.
Directors, Executive Officers and Corporate Governance
95-98
99-102
ITEM 11.
Executive Compensation
98
102
ITEM 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
98-99
102-103
ITEM 13.
Certain Relationships and Related Transactions, and Director Independence
103
ITEM 14.
99
ITEM 14.
Principal Accounting Fees and Services
99
103
   
PART IV  
ITEM 15.
Exhibits, Financial Statement Schedules and Reports on Form 8-K
100-109
104-106
   
SIGNATURES  
 
3
 
PART I

Item 1.
Business
 
The Company, founded in 1807, was incorporated in the state of New York on January 15, 1904. As used herein the term “Company” means John Wiley & Sons, Inc., and its subsidiaries and affiliated companies, unless the context indicates otherwise.
 
The Company is a global provider of knowledge and knowledge-basedknowledge-enabled services that improve outcomes in areas of research, professional developmentpractice and education. Core businesses produceThrough the Research segment, the Company provides digital and print scientific, technical, medical and scholarly research journals, reference works, books, database services and advertising; professionaladvertising. The Professional Development segment provides digital and print books, and certification,corporate learning solutions, employment assessment and training services;services, and test prep and certification. In Education, the Company provides print and digital content, and education content and servicessolutions including online program management services for collegeshigher education institutions and universities and integrated online teaching and learning resourcescourse management tools for instructors and students. The Company takes full advantage of its content from all three core 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 maintains publishing, marketing, and distribution centersCompany’s operations are primarily located in the United States, Canada, Europe, Asia, and Australia.
 
Further description of the Company’s business is incorporated herein by reference in the Management’s Discussion and Analysis section of this 10-K.
 
Employees
 
As of April 30, 2013,2016, the Company employed approximately 5,4004,700 persons on a full-time equivalent basis worldwide.  Company employees include approximately 390 new employees added during fiscal year 2013 due to acquisitions.
 
Financial Information About Business Segments
 
The note entitled “Segment Information” of the Notes to Consolidated Financial Statements and pages 1415 through 4955 of the Management’s Discussion and Analysis section of this Form 10-K are incorporated herein by reference.
 
Financial Information About Foreign and Domestic Operations and Export Sales
 
The note entitled “Segment Information” of the Notes to Consolidated Financial Statements and page 24pages 15 and 55 of the Management’s Discussion and Analysis section of this Form 10-K are incorporated herein by reference.

Item 1A.
Risk Factors
 
You should carefully consider all of the information set forth in this Form 10-K, including the following risk factors, before deciding to invest in any of the Company’s securities. The risks below are not the only ones the Company faces. Additional risks not currently known to the Company or that the Company presently deems immaterial may also impair its business operations. The Company’s business, financial condition, results of operations or prospects could be materially adversely affected by any of these risks.


 
4
 
Cautionary Statement Under the Private Securities Litigation Reform Act of 1995:
 
This Form 10-K and our Annual Report to Shareholders for the year endingended April 30, 2013 contain2016 contains certain forward-looking statements concerning the Company’s 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.
 
Any such forward-looking statements are based upon a number of assumptions and estimates that are inherently subject to uncertainties and contingencies, many of which are beyond the control of the Company, and are subject to change based on many important factors. Such factors include, but are not limited to (i) the level of investment in new technologies and products; (ii) subscriber renewal rates for the Company’s journals; (iii) the financial stability and liquidity of journal subscription agents; (iv) the consolidation of book wholesalers and retail accounts; (v) the market position and financial stability of key retailers; (vi) the seasonal nature of the Company’s education business and the impact of the used-book market; (vii) worldwide economic and political conditions; (viii) the Company’s ability to protect its copyrights and other intellectual property worldwide; (ix) the ability of the Company to successfully integrate acquired operations and realize expected opportunities and (x) other factors detailed from time to time in the Company’s filings with the Securities and Exchange Commission. The Company undertakes no obligation to update or revise any such forward-looking statements to reflect subsequent events or circumstances.
 
Operating and Administrative Costs and Expenses
 
In general, any significant increase in the costs of goods and services provided to the Company may adversely affect the Company’s costs of operation. The Company has a significant investment in its employee base around the world. The Company offers competitive salaries and benefits in order to attract and retain the highly skilled workforce needed to sustain and develop new products and services required for growth. Employment and benefit costs are affected by competitive market conditions for qualified individuals, and factors such as healthcare pension and retirement benefit costs. The Company is a large paper purchaser, and paper prices may fluctuate significantly from time-to-time. To reduce the impact of paper price increases, the Company relies upon multiple suppliers. The Company from time-to-time may hedge the exposure to fluctuations in price by entering into multi-year supply contracts. As of April 30, 2013,2016, the Company’s consolidated paper inventory was approximately $6.6$4.9 million and there were no outstanding multi-year supply contracts.

Protection of Intellectual Property Rights
 
Substantially allA substantial portion of the Company’s publications are protected by copyright, held either in the Company’s name, in the name of the author of the work, or in the name of thea sponsoring professional society. Such copyrights protect the Company’s exclusive right to publish the work in many countries abroad for specified periods, in most cases the author’s life plus 70 years, but in any event a minimum of 50 years for works published after 1978. The ability of the Company to continue to achieve its expected results depends, in part, upon the Company’s ability to protect its intellectual property rights. The Company’s results may be adversely affected by lack of legal and/or technological protections for its intellectual property in some jurisdictions and markets.
 
5
 
Maintaining the Company’s Reputation
 
ProfessionalsThe Company’s professional customers worldwide rely upon many of the Company’s publications to perform their jobs. It is imperative that the Company consistently demonstrates its ability to maintain the integrity of the information included in its publications. Adverse publicity, whether or not valid, may reduce demand for the Company’s publications.
 
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 between the months of December and March.April. Although at fiscal year-end the Company 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 24%22% of total annual consolidated revenue and no one agent accounts for more than 10%11% of total annual consolidated revenue.
 
The Company’s booknon-journal subscription business is not dependent upon a single customer; however, the industry is concentrated in national, regional, and online bookstore chains.customer. Although no one booknon-journal customer accounts for more than 10%9% of total consolidated revenue and 14%12% of accounts receivable at April 30, 2013,2016, the top 10 booknon-journal customers account for approximately 19%16% of total consolidated revenue and approximately 38%26% of accounts receivable at April 30, 2013.2016.  The Company maintains approximately $25 million of trade credit insurance, subject to certain limitations, covering balances due from certain named customers which expires in May, 2017.
 
Changes in Laws and Regulations That Could Adversely Affect the Company’s Business
 
The Company maintains publishing, marketing and distribution centersoperations 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 future financial results.
 
In a recent decision, the US Supreme Court, reversing decisions by the District Court for the Southern District of New York and Court of Appeals for the Second Circuit, held that the “first sale” doctrine of United States Copyright Law applied to copies of US copyrighted material printed outside of the United States. This decision would allow third parties who purchase works meant for sale only within a particular non-US territory to resell those works in the United States.  These works are often available outside the US at prices significantly below those of the US editions to meet local market pricing conditions.  Works developed for sale in markets outside the United States are often not substitutes for similar US editions because they are materially different.  However, any widespread resale in the United States of lower cost works could adversely impact the Company’s operating results. As a result of the change in law, the Company adjusted its business practice in selling into lower priced markets.  The decision principally affects the operations of the Company’s Education business. (See page 20 for a further discussion).
The scientific research publishing industry generates much of its revenue from paid customer subscriptions to online and print journal content. There is debate within government, academic and library communities whether such journal content should be made available for free, immediately or following a period of embargo after publication, referred to as “open access”. For instance, certain governments are considering mandatinghave implemented mandates that all publications containing informationrequire journal articles derived from government-funded research to be made available to the public at no cost.cost after an embargo period. Open access can be achieved in two ways: Green, which enables authors to publish articles in subscription based journals and self–archive the author accepted version of the article for free public use after an embargo period, and Gold, which enables authors to publish their articles in journals that provide immediate free access to the article on the publisher’s website following payment of an article publication fee. These mandates have the potential to put pressure on subscription-based publications and favor business models funded by author fees or government and private subsidies.publications. If such regulations are widely implemented the Company’s operating results could be adversely affected. To date, the majority of governments that have taken a position on Open access have favored the green model and have generally specified embargo periods of twelve months. The publishing community generally takes the view that this period should be sufficient to protect subscription revenues provided that publishers’ platforms offer sufficient added value to the article. Governments in Europe have been more supportive of the gold model, which thus far is generating incremental revenue for publishers with active open access programs. A number of European administrations are showing interest in a business model which combines the purchasing of subscription content with the purchase of open access publishing for authors in their country. This development removes an element of risk by fixing revenues from that market, provided that the terms and price negotiated are acceptable.
6
 
Business Transformation and Restructuring
 
The Company is transforming portions of its business from a traditional publishing model to being a global provider of content-enabled solutions with a focus on digital products and services. The Deltak,acquisition of Deltak.edu, LLC (“Deltak”), Inscape Holdings, Inc. (“Inscape”), Efficient Learning Systems, Inc. (“ELS”), Profiles International (“Profiles”) and ELS acquisitions,CrossKnowledge Group Limited (“CrossKnowledge”), along with the divestment of the Company’s consumer publishing programs, are examples of strategic initiatives that were implemented as part of the Company’s business transformation. The Company will continue to explore opportunities to develop new business models and enhance the efficiency of its organizational structure. The rapid pace and scope of change increases the risk that not all of our strategic initiatives will deliver the expected benefits within the anticipated timeframes. In addition, these efforts may somewhat disrupt the Company’s business activities which could adversely affect its operating results.
 
In fiscal year 2013, theThe Company announced a programcontinues to restructure and realign its cost base with current and anticipated future market conditions (see Note 10).  When implemented, the plan is expected to improve margins by reducing operating expenses and cost of sales and accelerate earnings growth while providing increased capacity for investment to grow our digital businesses.conditions. Significant risks associated with these actions that may impair the Company’s ability to achieve the anticipated cost reductions or that may disrupt its business include delays in the implementation of anticipated workforce reductions in highly regulated locations outside of the U.S., particularly in Europe and Asia,; decreases in employee morale andmorale; the failure to meet operational targets due to the loss of key employees.employees; and disruptions of third parties to whom we have outsourced business functions. In addition, the Company’s ability to achieve the anticipated cost savings and other benefits from these actions within the expected timeframe is subject to many estimates and assumptions. These estimates and assumptions are subject to significant economic, competitive and other uncertainties, some of which are beyond our control. If these estimates and assumptions are incorrect, if we experience delays, or if other unforeseen events occur, our business and results of operations could be adversely affected.
 
Outsourcing of Business Processes
The Company has outsourced certain business functions, principally in technology, content management and certain transactional functions, to third-party service providers to achieve cost savings and efficiencies. If these third-party service providers do not perform effectively, the Company may not be able to achieve the expected cost savings and depending on the function involved, may experience business disruption or processing inefficiencies, all with potential adverse effects on the Company’s operating results.

7
Introduction of New Technologies, Products and Services
 
The Company must continue to invest in technologicaltechnology and other innovations to adapt and add value to its products and services to remain competitive. There are uncertainties whenever developing new products and services, and it is often possible that such new products and services may not be launched or if launched, may not be profitable or as profitable as existing products and services.
A common trend facing each of the Company’s businesses is the digitization of content and proliferation of distribution channels through the internet and other electronic means, which are replacing traditional print formats. The trend to eBooksdigital content has also created contraction in the print book retail market which increases the risk of bankruptcy for certain retail customers, potentially leading to the disruption of short-term product supply to consumers as well as potential bad debt write-offs.  New distribution channels, such as digital formats, the internet, online retailers and growing delivery platforms (e.g. tablets and e-readers), combined with the concentration of retailer power, present both threats and opportunities to the Company’s traditional publishing models, potentially impacting both sales volumes and pricing. In addition, there is an enhanced risk associated with the illegal unauthorized replication and distribution of digital products.
 
Student Demand for Lower Cost Textbooks in Higher Education
The Company’s Education business publishes educational content for undergraduate, graduate and advanced placement students, lifelong learners and in Australia secondary school students. Due to growing student demand for less expensive textbooks, many college bookstores, online retailers and other entities offer used or rental textbooks to students at lower prices than new textbooks. It is uncertain how such sales of lower priced textbooks will impact the Company’s operating results.
Factors that Reduce Enrollment at Colleges and Universities
Enrollment in U.S. colleges and universities can be adversely affected by many factors, including changes in government and private student loan and grant programs, uncertainty about current and future economic conditions, general decreases in family income and net worth and a perception of uncertain job prospects for recent graduates. In addition, enrollment levels at colleges and universities outside the United States are influenced by the global and local economic climate, local political conditions and other factors that make predicting foreign enrollment levels difficult. Reductions in expected levels of enrollment at colleges and universities both within and outside the United States could adversely affect demand for our higher education products.
Information Technology Risks
 
Information technology is a key part of the Company’s business strategy and operations. As a business strategy, Wiley’s technology enables the Company to provide customers with new and enhanced products and services and is critical to the Company’s success in migrating from print to digital business models. Information technology is also a fundamental component of all our business processes; collecting and reporting business data; and communicating internally and externally with customers, suppliers, employees and others.
 
We are continually improving and upgrading our computer systems and software.  We are in the process of implementing a new Enterprise Resource Planning system as part of a multi-year plan to integrate and upgrade our operational and financial systems and processes. The implementation of this global system will occur in phases over the next several years. Implementation of a new enterprise resource planning system involves risks and uncertainties. Any disruptions, delays, or deficiencies in the design or implementation of a new system, could result in increased costs, disruptions in operations or delays in the collection of cash from our customers, as well as have an adverse effect on our ability to timely report our financial results, all of which could materially adversely affect our business, financial condition, and results of operations.
8
Information technology system failures, network disruptions and breaches of data security could significantly disrupt the operations of the Company. Management has designed and implemented policies, processes and controls to mitigate risks of information technology failure and to provide security from unauthorized access to our systems. In addition, the Company has in place disaster recovery plans to maintain business continuity.  The size and complexity of our information technology and information security systems, and those of our third-party vendors with whom we contract, make such systems potentially vulnerable to cyber-attacks common to most industries from inadvertent or intentional actions by employees, vendors, or malicious third-parties. Such attacks are of ever-increasing levels of sophistication and are made by groups and individuals with a wide range of motives. While the Company has taken steps to address these risks, there can be no assurance that a system failure, disruption or data security breach would not adversely affect the Company’s business and operating results.
 
Competition for Market Share and Author and Society Relationships
 
The Company operates in highly competitive markets. Success and continued growth depends greatly on developing new products and the means to deliver them in an environment of rapid technological change. Attracting new authors and professional societies, while retaining our existing business relationships, are also critical to our success.
Student Demand for Lower Cost Textbooks in Higher Education
The Company’s Education business publishes educational content for undergraduate, graduate and advanced placement students, lifelong learners and in Australia secondary school students. Due to growing demand by students for less expensive textbooks, many college bookstores, online retailers and other entities offer used or rental textbooks to students at lower prices than new. It is uncertain what the ultimate impact will be on Wiley’s results from such lower priced textbook sales models.
 
Interest Rate and Foreign Exchange Risk
 
Non-U.S. revenues, as well as our substantial non-U.S. net assets, expose the Company’s results to foreign currency exchange rate volatility. FiscalThe percentage of Consolidated Revenue for fiscal year 2013 revenue was2016 recognized in the following currencies (as measured in(on an equivalent U.S. dollar equivalents):basis) were: approximately 56%57% U.S dollar; 27%28% British pound sterling; 8% euro and 9%7% other currencies. In addition, our interest-bearing loans and borrowings are subject to risk from changes in interest rates. These risks and the measures we have taken to help contain them are discussed in the Market Risk section of this 10-K. For additional details, see Note 15The Company from time-to-time uses derivative instruments to the Consolidated Financial Statements in this 10-K which is incorporated herein by reference.hedge such risks. Notwithstanding our efforts to foresee and mitigate the effects of changes in fiscal circumstances, we cannot predict with certainty changes in currency and interest rates, inflation or other related factors affecting our business.
Changes in Tax Legislation
 
The Company is subject to tax laws within the jurisdictions in which it does business. Changes in tax legislation could have a material impact on the Company’s financial results. There have been recent proposals to reform U.S. tax laws that would significantly impact how U.S. multinational corporations are taxed on earnings outside of the U.S. This could have a material impact on the Company’s financial results since a substantial portion of the Company’s income is earned outside the U.S. In addition, the Company is subject to audit by tax authorities. Although we believe our tax estimates are reasonable, the final determination of tax audits could be materially different from our historical income tax provisions and accruals and have a material impact on the Company’s net income, cash flow and financial position. See Note 12 (“Tax Audits”) for further details on the Company’s income tax audit in Germany.
 
9
Business Risk of Doing Business in Developing, Emerging and EmergingOther Foreign Markets
 
The Company sells its products to customers in the Middle East (including Iran and Syria), Africa (including Sudan), Cuba, and other developing markets where it does not have operating subsidiaries. In addition, approximately 10% of Research journal articles are sourced from authors in China. The Company does not own any assets or liabilities in these markets except for trade receivables. Challenges and uncertainties associated with operating in developing markets has a higher relative risk due to political instability, economic volatility, crime, terrorism, corruption, social and ethnic unrest, and other factors. In fiscal year 2016, the Company recorded revenue and net profits of $3.7 million and $1.0 million, respectively, related to sales to Cuba, Sudan, Syria and Iran. While sales in these markets are not material to the Company’s business results, adverse developments related to the risks associated with these markets may cause actual results to differ from historical and forecasted future operating results.  Disruption
The Company has certain technology development operations in Russia related to software development and architecture, digital content production and system testing services. Due to the political instability within the region, there is the potential for future government embargos and sanctions which could disrupt the Company’s operations in the area. While the Company has developed business continuity plans to address these marketsissues, further adverse developments in the region could also triggerhave a decreasematerial impact on the Company’s business and operating results.
Approximately 14% of Research journal articles are sourced from authors in consumer purchasing power, resulting in a reduced demand for our products.China. Any restrictions on exporting intellectual property could adversely affect the company’s business and operating results.
 
Liquidity and Global Economic Conditions
 
Changes in global financial markets have not had, nor do we anticipate they will have, a significant impact on our liquidity. Due to our significant operating cash flow, financial assets, access to capital markets and available lines of credit and revolving credit agreements, we continue to believe that we have the ability to meet our financing needs for the foreseeable future. As market conditions change, we will continue to monitor our liquidity position. However, there can be no assurance that our liquidity or our results of operations will not be affected by possible future changes in global financial markets and global economic conditions. Similar to other global businesses, we face the potential effects of a global economic recession. Unprecedented market conditions including illiquid credit markets, volatile equity markets, dramatic fluctuations in foreign currency rates and economic recession could affect future results.
 
Effects of Increases in Pension Costs and Funding Requirements
 
The Company provides defined benefit pension plans for the majority of itscertain employees worldwide. In March 2013 theThe Company’s Board of Directors approved amendments to the U.S., Canada and U.K. defined benefit plans that froze the plans, which will befuture accumulation of benefits effective on June 30, 2013.2013, December 31, 2015 and April 30, 2015, respectively. The funding requirements and costs of these plans are dependent upon various factors, including the actual return on plan assets, discount rates, plan participant population demographics and changes in pension regulations. Changes in these factors affect the Company’s plan funding, cash flow and results of operations. A further discussion on how these factors could impact the Company’s consolidated financial statements is included on page 54 within the Management’s Discussion and Analysis section of this 10-K and incorporated herein by reference.
 
10
 
Effects of Inflation and Cost Increases
 
The Company, from time to time, experiences cost increases reflecting, in part, general inflationary factors. There is no guarantee that the Company can increase selling prices or reduce costs to fully mitigate the effect of inflation on company costs.
 
Ability to Successfully Integrate Key Acquisitions
 
The Company’s growth strategy includes title, imprint and other business acquisitions, including knowledge-enabled services which complement the Company’s existing businesses; the development of new products and services; designing and implementing new methods of delivering products to our customers, and organic growth from existing brands and titles.businesses. Acquisitions may have a substantial impact on the Company’s revenues, costs, cash flows, and financial position. Acquisitions involve risks and uncertainties, including difficulties in integrating acquired operations and in realizing expected opportunities; diversions of management resources and loss of key employees; challenges with respect to operating new businesses; debt incurred in financing such acquisitions; and other unanticipated problems and liabilities.
 
Valuation of Goodwill and Intangible Assets
At April 30, 2016, the Company had $951.7 million of goodwill and $877.0 million of intangible assets on its balance sheet. The intangible assets are principally comprised of content and publishing rights, customer relationships, and brands and trademarks. Failure to achieve business objectives and financial projections could result in an asset impairment charge, which would result in a non-cash charge to operating expenses. Goodwill and intangible assets with indefinite lives are tested for impairment on an annual basis and also when events or changes in circumstances indicate that impairment may have occurred. Intangible assets with determinable lives are tested for impairment only when events or changes in circumstances indicate that an impairment may have occurred. Determining whether an impairment exists can be difficult as a result of increased uncertainty and current market dynamics, and requires significant management estimates and judgment. In addition, the potential for goodwill impairment is increased during periods of economic uncertainty. An asset impairment charge could have a material adverse effect on the Company’s business, operating results and financial condition.
Attracting and Retaining Key Employees
 
The Company’s successCompany is highly dependent uponon the retentioncontinued services of its Chief Executive Officer, Chief Financial Officer and other senior officers and key employees globally.employees. The loss of the services of skilled personnel for any reason and the Company’s inability to replace them with suitable candidates quickly or at all, as well as any negative market perception resulting from such loss, could have a material adverse effect on the Company’s business, operating results and financial condition.  In addition, we are dependent upon our ability to continue to attract new employees with key skills to support continued business growth.
 

Item 1B.
Unresolved Staff Comments

None


 
11
 
 
Item 2.
Item 2.      Properties
Properties
 
The Company occupies office, warehouse, and distribution facilities in various parts of the world, as listed below (excluding those locations with less than 10,000 square feet of floor area, none of which is considered material property).  All of the buildings and the equipment owned or leased are believed to be in good operating condition and are generally fully utilized.suitable for the conduct of its business.
 
LocationPurposeOwned or LeasedApprox. Sq. Ft.
    
United States:   
    
New JerseyCorporate HeadquartersLeased404,000415,000
WarehouseLeased380,000
 Office & WarehouseLeased185,000
    
IndianaOfficeLeased123,000108,000
    
CaliforniaOfficeLeased57,00019,000
    
MassachusettsOfficeLeased43,00034,000
    
IllinoisOfficeLeased30,00051,000
    
FloridaOfficeLeased22,00049,000
    
MinnesotaOfficesLeased12,00036,000
    
TexasOfficesLeased29,000
 
ColoradoOfficeLeased15,000
International:   
    
AustraliaOffice & WarehouseLeased93,000
OfficesLeased59,000
    
CanadaOffice & WarehouseLeased87,000
OfficeLeased20,00012,000
    
EnglandWarehousesLeased297,000
 OfficesLeased80,000
 OfficesOwned70,000
    
GermanyOfficeOwned58,00059,000
 OfficeLeased19,00024,000
    
SingaporeOfficesLeased68,000
Office & WarehouseLeased61,00044,000
    
RussiaOfficeLeased18,00021,000
    
IndiaOffice & WarehouseLeased16,000
    
ChinaOfficeLeased14,000
12

Item 3.
Legal Proceedings
 
The Company is involved in routine litigation in the ordinary course of its business. In the opinion of management, the ultimate resolution of all pending litigation will not have a material effect upon the 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.
 
PART II

Item 5.
Market for the Company’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
 
The Company’s Class A and Class B shares are listed on the New York Stock Exchange under the symbols JWa and JWb, 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
 2013                  
 First Quarter $0.24  $49.72  $43.69  $0.24  $49.83  $44.28 
 Second Quarter  0.24   51.32   42.88   0.24   51.18   42.91 
 Third Quarter  0.24   44.43   36.53   0.24   44.26   36.91 
 Fourth Quarter  0.24   39.99   36.09   0.24   40.50   35.89 
 2012                        
 First Quarter $0.20  $53.00  $49.08  $0.20  $53.22  $49.28 
 Second Quarter  0.20   50.71   42.35   0.20   50.90   43.06 
 Third Quarter  0.20   49.43   43.50   0.20   49.66   43.57 
 Fourth Quarter  0.20   47.93   44.41   0.20   48.00   44.30 
 Class A Common StockClass B Common Stock
  Market Price Market Price
 DividendsHighLowDividendsHighLow
2016      
First Quarter $0.30 $58.66 $51.68 $0.30 $58.74 $52.54
Second Quarter0.3053.1848.160.3052.9348.25
Third Quarter0.3054.2940.290.3053.8041.25
Fourth Quarter0.3050.7440.210.3050.8540.18
2015      
First Quarter $0.29 $62.05 $54.52 $0.29 $61.80 $54.35
Second Quarter0.2960.4251.450.2961.0852.04
Third Quarter0.2962.8556.480.2962.7556.37
Fourth Quarter0.2965.2156.880.2965.1056.74
 
On a quarterly basis, the Board of Directors considers the payment of cash dividends based upon its review of earnings, the financial position of the Company, and other relevant factors. As of April 30, 2013,2016, the approximate number of holders of the Company’s Class A and Class B Common Stock were 1,160847 and 9374 respectively, based on the holders of record.
 
During the fourth quarter of fiscal year 2013,2016, the Company made the following purchases of Class A Common Stock under its stock repurchase program: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 2013  -   -   -   1,250,841 
 March 2013  381,189  $39.16   381,189   869,652 
 April 2013  360,000  $37.84   360,000   509,652 
 Total  741,189  $38.52   741,189     
 

 
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 2016118,036 $47.12 118,036 845,006
April 201698,150 $48.00 98,150 746,836
Total216,186 $47.52 216,186  

 
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Item 6.Item 6.      Selected Financial Data
Selected Financial Data

 For the Years Ended April 30, 
 Dollars in millions (except per share data) 2013 2012 2011 2010      2009
 Revenue $1,760.8  $1,782.7  $1,742.6  $1,699.1  $1,611.4 
 Operating Income (a-d)  199.4   280.4   248.1   242.6   218.5 
 Net Income (a-e)  144.2   212.7   171.9   143.5   128.3 
 Working Capital (f)  (32.2)  (66.3)  (228.9)  (188.7)  (157.4)
 Deferred Revenue in Working Capital (f)  (363.0)  (342.0)  (321.4)  (275.7)  (246.6)
 Total Assets  2,806.4   2,532.9   2,430.1   2,308.6   2,216.8 
 Long-Term Debt  673.0   475.0   330.5   559.0   754.9 
 Shareholders’ Equity  988.4   1,017.6   977.9   722.4   513.5 
 Per Share Data                    
 Earnings Per Share (a-e)                    
 
Diluted
 $2.39  $3.47  $2.80  $2.41  $2.15 
 
Basic
 $2.43  $3.53  $2.86  $2.45  $2.20 
 Cash Dividends                    
 Class A Common $0.96  $0.80  $0.64  $0.56  $0.52 
 
Class B Common
 $0.96  $0.80  $0.64  $0.56  $0.52 
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)188.1237.7206.7199.4280.4
Net Income (a-c)145.8176.9160.5144.2212.7
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 Assets2,921.13,004.23,077.42,806.42,532.9
Long-Term Debt605.0650.1700.1673.0475.0
Shareholders’ Equity1,037.11,055.01,182.2988.41,017.6
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 yearyears 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 ($19.8 million after tax or $0.330.33 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 ($21.1 million after tax or $0.350.35 per share)., respectively.
 
(b)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 ($2.6 million after tax or $0.040.04 per share).
 
(c)c)  In fiscal year 2011, the Company recorded a $9.3 million bad debt provision ($6.0 million afterCertain tax or $0.10 per share) related to the bankruptcy of a large book retailer “Borders”.

(d)  In fiscal year 2010, the Company recognized intangible asset impairment and restructuring charges of $15.1 million ($10.6 million after tax or $0.17 per share) principally related to GIT Verlag, a Business-to-Business German-language controlled circulation magazine business acquired in 2002.

(e)  Tax benefits and charges included in fiscal year results are as follows:
·  
Fiscal years 2016, 2014, 2013 2012 and 20112012 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) and $4.2 million ($0.07 per share), respectively, principally associated with legislative reductionsconsecutive tax legislation enacted in the United Kingdom that reduced the U.K. corporate income tax rates.  The benefits reflect the remeasurement of all applicable U.K. deferred tax balances which are reflected at 23% as of April 30, 2013.
·  Fiscal year 20132015 includes a non-recurring tax chargebenefit of $2.1$3.1 million ($0.040.05 per share) due to recently published IRS tax positions related to tax deductions claimed on the Company’s abilitywrite-up of certain foreign tax assets to take certain deductions in the U.S.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.
 
(f)d)  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 paying down debt;acquisitions; debt repayments; funding operations; paying dividends;dividend payments; and purchasing treasury shares. The deferred revenue will be recognized in income asover the products areterm of the subscription; when the related issue is shipped or made available online, toor the customers over the term of the subscription.service is rendered.

 


 
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Item 7.
Management’s Discussion and Analysis of Business, Financial Condition and Results of Operations
 
The Company is a global provider of knowledge and knowledge-basedknowledge-enabled services that improve outcomes in areas of research, professional developmentpractice and education. Core businesses produceThrough the Research segment, the Company provides digital and print scientific, technical, medical and scholarly research journals, reference works, books, database services and advertising; professionaladvertising. The Professional Development segment provides digital and print books, corporate learning solutions, post and certification,pre-employment assessment and training services;services, and test preparation and certification. In Education, the Company provides print and digital content, and education content and servicessolutions including online program management services for collegeshigher education institutions and universities and integrated online teaching and learning resourcescourse management tools for instructors and students. The Company takes full advantage of its content from all three core 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 maintains publishing, marketing, and distribution centersCompany’s operations are primarily located in the United States, Canada, Europe, Asia, and Australia.
 
Business growth comes from a combination of organic growth from existing brands and titles; title, imprint and other business acquisitions which complement the Company’s existing businesses; the development of new products and services; designing and implementing new methods of delivering products to our customers; and organic growth from existing brandsthe development of new products and titles.services. The Company’s revenue grewdeclined at a compound annual rate of 1%0.2% over the past five years.
 
Core BusinessesBusiness Segments
 
Research:
 
The Company’s Research business serves the world’s research and scholarly communities and is the largest publisher for professional and scholarly societies.  Research’s mission is to support researchers, professionals and learners in the discovery and use of research knowledge to help them achieve results that help shape the future.their goals in research, learning and practice. Research products include scientific, technical, medical and scholarly research journals, books, major reference works, databases, clinical decision support tools, and laboratory manuals and workflow tools, in the publishing areas of the physical sciences and engineering, health sciences, social science and humanities and life sciences. Research customers include academic, corporate, government, and public libraries; researchers; scientists; clinicians; engineers and technologists; scholarly and professional societies; and students and professors. The Company’s Research products are sold and distributed globally onlinein digital and in 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. Publishing centers include Australia, China, Germany, India, Singapore, the United Kingdom and the United States. Research accounted for approximately 57%56% of total Company revenue in fiscal year 2013 and generated revenue growth2016 which declined at a compound annual rate of 1% over the past five years.
 
Research revenue by product type includes: Journal Subscriptions; Author-Funded Access; Other Journal Revenue, which includes Journal Subscriptions sold onlinepublishing service charges for article customization charges, sales of journal licensing rights, journal reprint revenue, backfiles and in print;individual articles. In addition, Print Books; Digital Books; and Other Books and eBooks including major reference works; Publishing RightsReference Revenue, which is revenue from theincludes, advertising, book licensing of the right to republish Wiley content either online or in print; Advertising and Other. Other revenue includes journal and article reprints, pay per view journal revenue, the sale of journal backfile collections, journal contributor fees, open access revenuerights, distribution services and the sale of databases and protocols.
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The graph below presents Research revenue by product type for fiscal year 2013:2016 and 2015:
 
                                                                                                                                  
Key growth strategies for the Research business include evolving and developing new licensing models for the Company’s institutional customers; developing new funded access 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 societies; continuing the migration and transformation of the book business from print to digital, focusing resources on high-growth and emerging markets; developing new open access revenue streams; and evolving and developing new licensing models for the Company’s institutionalcorporate customers.
 
Approximately 53%50% of journal subscriptionJournal Subscription revenue is derived from publishing rights owned by the Company. Publishing alliances also play a major role in Research’s success. Approximately 47%50% of journal subscriptionJournal Subscription revenue is derived from publication rights which are owned by professional societies and published by the Company pursuant to a long-term contract 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. The Company publishes the journals of many prestigious societies, including the American Cancer Society, the American Heart Association, the British Journal of Surgery Society, the Federation of European Biochemical Societies, the European Molecular Biology Organization, the American Anthropological Association, the American Geophysical Union and the German Chemical Society.
The Company transitioned from issue-based to time-based digital journal subscription agreements for calendar year 2016. Under this new model, the Company provides access to all journal content published within a calendar year 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 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 significantly simplify the contracting and administration of digital journal subscriptions.
 
The Company’s Research business is a provider of content and services in evidence-based medicine (EBM). Through the Company’s alliance with The Cochrane Collaboration, the Company publishes The Cochrane Library, a premier source of high-quality independent evidence to inform healthcare decision-making, which provides the foundation for the Company’s growing suite of EBM products designed to improve patient healthcare. EBM facilitates the effective management of patients through clinical expertise informed by best practice evidence that is derived from medical literature.
 
Wiley Online Library, the online publishing platform for the Company’s Research business, is one of the world’s broadest and deepest multidisciplinary collections of online resources covering life, health and physical sciences, social science and the humanities. Built on the latest technology and designedDesigned with extensive input from scholars around the world, Wiley Online Library delivers seamless integrated access to over 47 million articles from 1,5001,700 journals, 13,00019,000 online books, and hundreds of multi-volume reference works, laboratory protocols and databases. Wiley Online Library provides the user with intuitive navigation, enhanced discoverability, expanded functionality and a range of personalization options. Access to abstracts is free, 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. Wiley Online Library also provides the Company with revenue growth opportunities through new applications and business models, online advertising, deeper market penetration and individual sales and pay-per-view options.
 
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Full content Access toon Wiley Online Libraryis sold through licenses with academic and corporate libraries, consortia and other academic, government and corporate customers. The Company offers a range of licensing options including customized suites of journal publications for individual customer needs as well as subscriptions for individual journal and online book publications. Licenses are typically sold in durations of one to three years. Through the Article Select and PayPerView programs, the Company provides fee-based access to non-subscribed journal content, book chapters and major reference work articles.
For calendar year 2013, the Company piloted an alternative journal subscription license model for a group of customers.  Previously, those customer licenses were based on a commitment by the Company to provide a discrete number of online journal issues which provided for recognition of revenue by the Company as issues were published.  Under this alternative model, the Company provides access to all journal content published in the calendar year and provides for recognition of revenue on a straight-line basis over the calendar year covered by the alternative license model.  The new license model improves the value proposition for our established customer base in mature markets and makes licensing the Company’s journals a more straightforward process which frees up sales and support resources to focus on growth opportunities in other digital products and services.
 
Wiley Online Library takes advantage of technology to update content frequently and to add new features and resources on an ongoing basis to increase the productivity of scientists, professionals and students. Two examples are EarlyView, through which customers can access individual articles well in advance of print publication, and MobileEditions,the Wiley Journals Apps service, which enables users to view tables ofaccess articles and related content and abstractsfrom over 200 titles on wireless handheld devices and smartphones.a tablet or other mobile device.
 
Wiley Open Access is the Company’s publishing program for open-access research articles. Under the Wiley Open Access business model, research articles submitted by authors are published and compiled by subject area intoin open-access journals. All research articles published in Wiley Open Access journals are freely available to the general public on Wiley Online Library to read, download and share.  A publication service fee is charged upon acceptance of a research article by the Company, which may be paid by the individual author.author or by the author’s funder or institution. To actively support researchers and members who wish to publish in Wiley Open Access journals, an academic or research institution, society or corporation may fund the fee directly. In return for the service fee, the Company provides its customary publishing, editing, peer review, technology and distribution services. All accepted open-access articles are subject to the same rigorous peer-review process applied to the Company’s subscription based journals which are supported by the Company’s network of prestigious journals and societies. In addition to Wiley Open Access, the Company provides authors with the opportunity to make their individual research articles that were published within the Company’s paid subscription journals freely available to the general public through OnlineOpen.OnlineOpen on payment of an Article Payment Charge.
 
Professional Development (“PD”):
 
The Company’s Professional Development business acquires, develops and publishes professional information and content delivered through print and digital books, subscription products,test preparation, assessments, online learning solutions and certification and training services and online applications in the areas ofservices. Communities served include business, finance, accounting, workplace learning, management, leadership, technology, behavioral health, engineering/architecture and education. Professional DevelopmentDevelopment’s mission is focused on creatingto create products and services that help customersprofessionals worldwide learn, achieve results, and enhance their skills throughout their careers enabling corporations to maximize their investment in employees, having them become more effective in the workplace and achieve career success.workplace. Products are developed in print and digitally for worldwide distribution through multiple channels, including major chainschain and online booksellers, independent bookstores, libraries, colleges and universities, warehouse clubs, corporations, direct to consumer, websites, distributor networks and other online applications. Professional Development’s mission is to help professionals worldwide learn, achieve results, develop opportunities and enhance their skills throughout their career. Publishing centers include Australia, Canada, Germany, India, Singapore, the United Kingdom and the United States. Professional Development accounted for approximately 24%23% of total Company revenue in fiscal year 2013 and2016 which declined at a compound annual rate of 2%1% over the past five years.  Excludingyears, including the impact of the divested consumer publishing programs in fiscal year 2013 divestmentand the acquisitions of the Consumer Publishing Programs, the fiveInscape in fiscal year compound growth rate was essentially flat.2012, Efficient Learning Systems, Inc. in fiscal year 2013, Profiles in fiscal year 2014 and CrossKnowledge in fiscal year 2015.
 
17
 
Professional Development revenue by product type includes eBooks and Print Books; Digital Books; Online TrainingTest Preparation and Assessment which is revenue from the sale of productsCertification; Assessments; and services focusing on workplace effectiveness and career success; Publishing Rights which is revenue from the licensing of the right to republish Wiley content either online or in print; Journal Subscriptions online and in print to professionals; and Other. Other includes advertising revenue, distribution and agency revenue and reprint revenue.  Corporate Learning.
The graph below presents PD revenue by product type for fiscal year 2013:2016 and 2015:
                                                                                                                                       

Key growth strategies for the Professional Development business includeinclude: developing and acquiring learning applications, online trainingproducts and assessment, workflow solutionsservices to supportdrive corporate development and professional career development,development; developing leading brands and franchises,franchises; executing strategic acquisitions and partnerships,partnerships; innovating digital and eBookbook formats while expanding their global discoverability and distributiondistribution; and creating advertising opportunities on the Company’s branded websites and online applications. The Company has recently executed several initiatives focusedSeveral of the more recent acquisitions that focus on achieving these growth strategies which are described in more detail below.
 
In February 2012, WileyMay 2014, the Company acquired Inscape Holdings, Inc. (“Inscape”), a leading provider of online training and assessment solutions,CrossKnowledge for approximately $85$166 million in cash, net of cash acquired. The acquisition combines Wiley’s deep wellCrossKnowledge 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 valuablemanagerial and leadership skills assessments, courses, certifications, content and global reachexecutive training programs that are delivered on a cloud-based LMS platform with over 19,000 learning objects in leadership and training with Inscape’s technology, distribution network, and talent expertise, including the innovative EPIC online assessment-delivery platform and an elite global authorized distributors network of nearly 1,700 independent consultants, trainers, and coaches. Inscape’s solution-focused products are used17 languages. CrossKnowledge serves over seven million end-users in thousands of organizations, including major government agencies and Fortune 500 companies. Inscape80 countries. CrossKnowledge generated revenue of $21.6$50.7 million in fiscal year 2013.2016.
 
Inscape’s solutions-focused DiSC® offerings complementIn April 2014, the products published under Wiley’s Pfeiffer brand, such as KouzesCompany acquired Profiles International (“Profiles”) for approximately $48 million in cash, net of cash acquired. Profiles provides pre-employment assessment and Posner’s Leadership Practices Inventory®,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 the growing workplace learning industry.  Through the Pfeiffer brand, Wiley has a 40-year historyover 120 countries, with assessments available in 32 languages. Profiles generated revenue of serving professional development and resource needs of learning professionals.  The combined Inscape and Pfeiffer business increases the Company’s presence$20.3 million in the professional development and skill assessment arena. We believe Inscape’s competitive strengths will also advance a number of Professional Development’s major strategic goals. As a workplace learning business with more than 50% of revenue from a proprietary digital platform, Inscape will enable Wiley to move more rapidly into digital delivery within the growing workplace learning and assessment market and build a significant market position in the category of leadership development.  Inscape also enhances Wiley’s global presence, serving customers around the world in more than 30 languages eachfiscal year with approximately 35% of revenue generated outside the U.S through Inscape’s global distributor network.2016.
 
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In November 2012, the Company acquired Efficient Learning Systems, Inc. (“ELS”) for approximately $24 million in cash, net of cash acquired. ELS is an e-learning system provider focused in the areas of professional finance and accounting.  ELS’ flagship product, CPAExcel, is a modular, digital platform comprised of online self-study, videos, mobile apps, and sophisticated planning tools that has helped over 65,000 professionals prepare for the CPA exam since 1998. The acquisition enhancesenhanced Wiley’s position in the growing CPA test preparation market and providesprovided the Company with a scalable platform that can be leveraged globally across other areas of its Professional Development business. ELSIn 2013, the Company also acquired Elan Guides for approximately $2.5 million. Elan Guides provides content in multiple formats to help prepare candidates for the CFA examinations. The fiscal year 2016 revenue associated with these businesses was generating annualapproximately $14.1 million.
In 2012, Wiley acquired Inscape Holdings, Inc. (“Inscape”), a leading provider of assessment-based employee training solutions, for approximately $85 million in cash, net of cash acquired. The acquisition combined Wiley’s deep well of valuable content and global reach in leadership and training with Inscape’s talent development content, technology and distribution network, including the innovative EPIC online assessment-delivery platform and an elite global authorized distributor network of over 1,700 independent consultants, trainers, and coaches. Inscape’s solution-focused products are used in thousands of organizations, including major government agencies and Fortune 500 companies. Inscape generated revenue of approximately $7$29.3 million prior toin fiscal year 2016.
Inscape’s solutions-focused DiSC® offerings complement Wiley’s existing offerings, such as Kouzes and Posner’s Leadership Practices Inventory® and The Five Behaviors of a Cohesive TeamTM, in the acquisition and contributed $3.7 million togrowing workplace learning industry. The combined assessment offerings increased the Company’s fiscal year 2013 revenue sincepresence in the acquisition date.
In March 2012, the Company announced that it intended to explore opportunities to sellprofessional training and development arena. We believe Inscape’s competitive strengths will also advance a number of its consumer publishing assetsProfessional Development’s major strategic goals. As a workplace learning business with more than 90% of revenue from a proprietary digital platform, Inscape enables Wiley to move more rapidly into digital delivery within the growing workplace learning and assessment market and build a significant market position in the Professional Development business as they no longer aligncategory of leadership development. Inscape also enhanced Wiley’s global presence, serving customers around the world in more than 30 languages each year, with the Company’s long-term business strategy.  Those assets included travel (including the well-known Frommer’s brand), culinary, general interest, nautical, pets, crafts, Webster’s New World, and CliffsNotes.  Duringapproximately 28% of fiscal year 2013,2016 revenue generated outside the Company sold substantially all of these publishing assets in a series of individual transactions for approximately $34 million.  Fiscal year 2013U.S through Inscape’s dedicated global distributor network.
Publishing Alliances and 2012 revenue associated with the operations of the assets sold were $46 million and $73 million, respectively.Programs:
 
Publishing alliances and franchise products are central to the Company’s strategy. The ability to bring together Wiley’s product development, sales, marketing, distribution and technological capabilities with a partner’s content and brand name recognition has been a driving factor in its success. Professional Development alliance partners include Bloomberg Press, the American Institute of Architects, the Leader to Leader Institute, Fisher Investments, the CFA Institute, the BPO Certification Institute,ACT (American College Test), Autodesk and many others.
 
The Company also promotes an active and growing Professional Development custom publishing program. Custom publications are typically used by organizations for internal promotional or incentive programs. The Company’s custom publications include digital and print books written specifically for a customer and customizations of Professional Development’s existing publications to include custom cover art, such as imprints, messages and slogans. Of special note are customized For Dummies publications, which leverage the power of this well-known brand to meet the specific information needs of a wide range of organizations around the world.
 
Education:
 
The Company’s Education business produces educational content and servicessolutions, including online programcourse management for colleges and universities and integrated online teaching and learning resourcestools for instructors and students.students and online program services for higher education institutions. Education’s mission is to help teachers teach and students learn by delivering personalized content, tools and services that demonstrate results to students, faculty and institutions throughout the world personalized content, tools and services that demonstrate results.world. Education offers learning solutions, innovative products and services principally delivered through college bookstores, and online distributors and directly to institutions and more recently direct-to-student, with customers having access to content in multi-mediadigital and custom print formats, as well as the traditional print textbook. Education’s cost-effective, flexible solutions are available in each of its publishing disciplines, including the sciences, engineering, computer science, mathematics, business and accounting, statistics, geography, hospitality and the culinary arts, education, psychology and modern languages.
 
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Education accounted for approximately 19%21% of total Company revenue in fiscal year 20132016 and generated revenue growth at a compound annual rate of 7%3% over the past five years, including the acquisition of Deltak.edu, LLC (“Deltak”)Deltak in fiscal year 2013.
Education revenue by product type includes eBooks and Print Textbooks; Digital Books; Online Program Management; WileyPLUS, the Company’s online learning solution;Management (Deltak); Custom Material; Course Workflow (WileyPLUS), and Other Education revenue which includes revenue from the licensing of publishing content rights and Other Nontraditional and Digital Products such as custom publishing and other content adaption’s.  adaptions.
The graph below presents Education revenue by product type for fiscal year 2013:2016 and 2015:
 
                                                                                                                                    
The Company is transformingcontinues to transform the Education business from a content publisher to an education solutionsolutions provider. Education’s key growth strategies include developing and acquiring digital products and educational servicessolutions across the educational value chain; continuing the transformation of the business from traditional print products to digital and custom products and services; focusing on institutional relationships and direct-to-student digital products; and developing the Company’s online institutional education services model acquired with Deltak.
 
In October 2012, the Company acquired Deltak for approximately $220 million in cash, net of cash acquired. Deltak works in close partnership with leading colleges and universities to develop and support online degree and certificate programs. The acquisition positionsThese new services position the Company as an online education services provider and expands the services and content value chain for how people teach and learn.  Through Deltak,provider. Wiley will now provideprovides a complete solution to help traditional colleges and universitieshigher education institutions transition their programs into valuable online experiences. Deltak offers market research to validate degree or certification program demand,demand; instructional design, marketing,design; marketing; student recruitmentrecruitment; and retention services, and access to theservices. Deltak uses its Engage Learning Management System with the goal of boostingand Student Relationship Platform to enhance the quality and efficacy of online and hybrid programs. Deltak provides theThe Company withnow has access to high-growth markets and a variety of capabilities and technologies for its expansion into custom online courses and curriculum development. The acquisition will also enable Wiley’s Education business to accelerateCompany leverages its digital learning strategystrong reputation and diversify its service offerings to include operational and academic solutions for higher education institutions. Wiley offers Deltak a stable basefinancial stability for new program investment, the ability to accelerate growth globally, to access to professional consumers and expanded offerings ofcorporations and to expand content and faculty development.development offerings. As of April 30, 2016, the Company had 38 partners and 226 degree programs under contract.  Deltak currently supports more than 100 online programs and was generating annualgenerated revenue of approximately $54$96.5 million prior to the acquisition and contributed $33.7 million to the Company’sin fiscal year 2013 revenue since the acquisition date.2016.
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Strategic partnerships and relationships with companies such as Microsoft®, Blackboard, Canvas, Snapwiz and the Culinary Institute of America are also an important component of Education’s growth strategy. 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 Education’s success.
 
Education offers high-quality online learning solutions including Course Workflow (WileyPLUSWileyPLUS), it’sa research-based, online environment for effective course 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 andas 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.
Education encouragespromotes and supports the customization of its content. Wiley Custom Learning Solutions is a full-service custom publishing program that offers an array of tools and services designed to put creation of customized content creation in instructors’ hands. Our suite of custom products empowers users to create high-quality, economicalaffordable education solutions tailored to meet individual classroom needs. Through Wiley Custom Select, aan online custom textbook system, instructors can easily build print and digital materials tailored to their specific course needs and add their own content to create a customized solution derived from any one or more Wiley resources.of the Company’s three business segments.
 
The Company also provides the services of the Wiley Faculty Network, a global community of faculty that offers guidance, training, and resources. Through the Wiley Faculty Network, instructors and administrators can collaborate with each other, attend virtual and live events, and utilize a wealth of resources all designed to help them grow as educators. Colleagues can also benefit from taking part in the Wiley Learning Institute, an online center for professional development offering workshops, applied learning, coaching programs, and a unique community experience.
In a recent decision, the United States Supreme Court held that the “first sale” doctrine of US Copyright Law applied to copies of US copyrighted material printed outside of the United States.  This decision allows third parties who purchase works meant for sale only within a particular non-US territory to resell those works in the United States.  These works are often available outside the US at prices significantly below those of the US editions to meet local market pricing conditions.
In response to the ruling, the Company has implemented changes with respect to the sale of US originated Global Education print works outside the United States. The Company is using a tiered approach in certain non-US markets. In those countries where the Company has sales representatives, direct knowledge of local consumption and face to face management of intermediaries, local pricing will be maintained. In those countries where the Company has significant business through long standing local partners, Preferred Partner Agreements are being executed to minimize the resale of Wiley products outside of their designated markets. Lastly, in all non-US markets where the Company does not have sales representatives or Preferred Partner Agreements, locally price differentiated product is not being sold or distributed. In these countries, Global Education product is available only at North American market prices. All sales orders are now being actively monitored for compliance with this policy. Full implementation of these measures is scheduled for completion by 30 June 2013. Additionally, all products carry RFiD (Radio Frequency Identification) tags to track the original sale location. The Company continues to utilize global product strategies which materially differentiate key US print titles through content adaptation and versioning.
As a result of these changes, the company expects the net difference in revenue and operating profit to be negligible after a period of market transition.  These changes are expected to reduce units sold and revenue in non-US markets while increasing units and revenue in the US.   The reduction in units, at a lower price per unit, will occur immediately in non-US markets while the corresponding recovery of sale of units at a higher price point of formerly cannibalized US units will follow.  The timing difference is due to product available for resale into the US will need to be exhausted over time and not replenished.  A portion of the revenue and operating income recovery will come from the difference in lower net units globally offset by higher average positive price globally.
Content-EnabledKnowledge-Enabled Products and Services:
 
Journal Products:
 
The Company publishes approximately 1,6001,700 Research and Professional Development journals. Journal subscriptionSubscription revenue and other related publishing income, such as Author-Funded Access, advertising, backfile sales, the licensing of publishing rights, journal reprints and individual article sales accounted for approximately 48% of the Company’s consolidated fiscal year 20132016 revenue. The journal portfolio includes titles owned by the Company, in which case they may or may not be sponsored by a professional society; titles owned jointly with a professional society; and titles owned by professional societies and published by the Company pursuant to long-term contracts.
 
The Company sells journal subscriptions directly through Company 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 delivered through the Company’s online platform, Wiley Online Library. Contracts are negotiated by the Company directly with customers or their subscription agents. Licenses range from one to three years in duration and typically cover calendar years. Print journals are generally mailed to subscribers directly from independent printers. The Company does not own or manage printing facilities. The print journal content is also available online via Wiley Online Library. Subscription revenue is generally collected in advance, and deferred until the Company has fulfilled its obligation to the customer at which time the revenue is earned. The Company transitioned from issue-based to time-based digital journal subscription agreements for calendar year 2016. Under this new model, the Company provides access to all journal content published within a calendar year 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.  Print journal subscription revenue is recognized once the related issue is shipped.
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Societies that sponsor or own such journals generally receive a royalty and/or other consideration. The Company may procure editorial services from such societies on a pre-negotiated fee basis. The Company also enters into agreements with outside independent editors of journals that statedefine the duties of the editors, and the fees and expenses for their services. Contributors of articles to the Company’s journal portfolio transfer publication rights to the Company or a professional society, as applicable. Journal articles may be based on funded research through government or charitable grants. In certain cases the terms of the grant may require the grant holder to make articles (either the published version or an earlier unedited version) available free of charge to the general public, typically after an embargo period. Funded open access under the Company’s Wiley Open Access and OnlineOpen business models facilitate the ability of the grant holder to comply.
 
The Company sells journal subscriptions directly through Company 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 online content delivered through the Company’s online platform, Wiley Online Library. Contracts are negotiated by the Company directly with customers or their subscription agents. Licenses range from one to three years in duration and typically cover calendar years.
Print journals are generally mailed to subscribers directly from independent printers. The Company does not own or manage printing facilities. The print journal content is also available online via Wiley Online Library. Subscription revenue is generally collected in advance, and deferred until the related issue is shipped or made available online at which time the revenue is earned.
For calendar year 2013, the Company piloted an alternative journal subscription license model for a group of customers.  Under this alternative model, the Company provides access to all content published in the calendar year and provides for recognition of revenue on a straight-line basis over the calendar year covered by the alternative license model.
Book Products:
 
Book products and other book related publishing revenue, such as advertising and the sale of publishing rights, accounted for approximately 48%41% of the Company’s consolidated fiscal year 20132016 revenue.  Materials for book publications are obtained from authors throughout most of the world through the efforts of an editorial staff, outside editorial advisors, and advisory boards. Most materials originate withare originated by the authors themselves or as a result of suggestion or solicitations by editors and advisors. The Company enters 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 bywith royalties, which vary withdepending on the nature of the product. The Company may make advance payments against future royalties to authors of certain publications. Royalty advances are reviewed for recoverability and a reserve for loss is maintained, if appropriate.
The Company continues to add new titles, revise existing titles, and discontinue the sale of others in the normal course of its business, and also creates adaptations of original content for specific markets based on customer demand. The Company’s general practice is to revise its textbooks approximately every two to fivethree years, if warranted, and to revise other titles as appropriate. Subscription-based products are updated on a more frequent basis.
 
Professional books are sold to bookstores and online booksellers serving the general public; wholesalers who supply such bookstores; warehouse clubs; college bookstores for their non-textbook requirements;bookstores; individual practitioners; and research institutions, libraries (including public, professional, academic, and other special libraries), industrial organizations, and government agencies. The Company employs 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. Trade sales to bookstores and wholesalers are generally made on a returnable basis with certain restrictions. The Company provides for estimated future returns on sales made during the year based on historical return experience and current market trends.
 
Adopted education textbooks and related supplementary material and onlinedigital products such as WileyPLUS, are sold primarily to bookstores and online booksellers, serving both for-profit, and nonprofit educational institutions.institutions and direct-to-students. The Company employs 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. Textbook sales are generally made on a returnable basis with certain restrictions. The textbook business is seasonal, with the majority of textbook sales occurring during the June through August and November through January periods. There are active used and rental textbook markets, which adversely affect the sale of new textbooks.
 
Like most other publishers, theThe Company generally contracts with independent printers and binderies globally for their services. The Company purchases its paper from independent suppliers and printers. The fiscal year 20132016 weighted average U.S. paper prices decreased approximately 2%1% from fiscal year 2012.2015. Approximately 65%75% of the Company’s paper inventory is held in the United States. Management believes that adequate printing and binding facilities, sources of paper and other required materials are available to it, and that it is not dependent upon any single supplier. Printed book products are distributed from both Company-operated warehouses and independent distributors.
 
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The Company develops content in a digital format that can be used for onlineboth 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, WileyPLUS, Wiley Custom Select and other proprietary platforms.  EbooksDigital books are delivered to intermediaries including Amazon, Apple and Google, for re-sale to individuals in various industry-standard formats, which are now also 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 website 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.
The Company’s online presence not only enables it to deliver content online, but also to sell more books. The growth of online booksellers benefits the Company because they provide unlimited virtual “shelf space” for the Company’s entire backlist.
 
Marketing and distribution services are made available to other publishers under agency arrangements. The Company also engages in co-publishing of titles with international publishers and in publication of adaptations of works from other publishers for particular markets. The Company also receives licensing revenue from photocopies, reproductions, translations, and digital uses of its content.
 
Other Digital Products and Services:Solutions:
 
Revenue from Other Digital Products and Services was approximately $64.1 million in fiscal year 2013.  The Company believes that the demand for new digital products and serviceslearning solutions will continue to increase for the foreseeable future.  In order to meet this demand, and remain competitive, the Company is focused on delivering content-enabledknowledge-enabled services, which improve learning, career managementdevelopment and effectivenessemployment management for its target communities.  With the goal of servicing its customers across the arc of their careers the Company is creating new revenue streams through organic development and acquisition. The acquisitions of Deltak, Inscape, ELS, Profiles and ELS acquisitionsCrossKnowledge have enhanced the Company’s portfolio of content-enabledknowledge-enabled digital services and provided the Company with new capabilities and expertise, including new channels to market and direct end-user engagement. The Inscape, ELS, Profiles and ELSCrossKnowledge acquisitions highlight the Company’s focus on providing digital content andcontent; workflow solutions around professional career development and talent assessment, while the Deltak acquisition positions the Company as an online higher educational solutions provider with a variety of capabilities and technologies for its expansion into custom online course and curriculum development. In addition, Education’s Course Workflow (WileyPLUS) platform improves student learning through instant feedback, personalized learning plans and self-evaluation tools.
Corporate Learning:
The Corporate Learning (CrossKnowledge) business offers digital learning solutions for global corporations, universities, and small and medium-sized enterprises, which are sold on a subscription or fee basis. CrossKnowledge’s solutions include a variety of managerial and leadership topics such as leadership, diversity, value creation, client orientation, change and corporate strategy, that are delivered on a cloud-based LMS platform with over 19,000 learning objects 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 Europe, Asia and the Nordics, and in newer markets, such as the U.S. and Latin America. In addition, content and LMS offerings are continuously refreshed and expanded to serve a wider variety of customer needs. Corporate Learning revenue was approximately $50.7 million in fiscal year 2016.
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Assessments:
 
The Inscape and ELSProfiles businesses along withrepresent the core of the Company’s Pfeiffer brand, represent the Company’s professional training and assessment services. These businesses offer a varietyfour of classroom learning solutions and e-learning activities thatthe leading assessment brands available in the market today. The offerings are delivered to customers directly through online digital delivery platforms and alsoeither directly or through an authorized distributor network of independent consultants, trainers and coaches. The Company’s professional training and assessment services offer highly flexible packages and modules for its customers that include online pre-workpre and profile assessments,post-hire assessments. Revenue for these products and services are deferred until the Company’s obligation has been performed, typically when an online assessment has been completed. Assessment revenue was approximately $57.4 million in fiscal year 2016.
Professional Online Test Preparation and Certifications:
The Company’s acquisitions of ELS and Elan Guides represent the Company’s professional Online Test Preparation and Certification services. These businesses offer a variety of online learning solutions and training activities that are delivered to customers directly through online digital delivery platforms.  ELS’ flagship product, CPAExcel, is a modular, digital platform comprised of online self-study, materials, online videos, mobile apps, and other sophisticated planning tools.tools to help professionals prepare for the CPA exam. Elan Guides provides content in multiple formats to help prepare candidates for the Certified Financial Analyst examinations.  Revenue for these products and services are deferred until the Company’s obligation has been performed, typically when an online training program and/or assessment has been completed or over the timeframe covered by a license to use the online training and study materials. PD’s Online Test Preparation and Certification revenue was approximately $28.2 million in fiscal year 2016.
Online Program Management (Deltak):
 
As student demand continues to drive traditional schoolshigher education institutions to offer online degree and certificate programs, institutions are partnering with online program management businesses to develop and support these programs.  As a result ofThrough the Deltak acquisition, the Company has entered this high-growth market, accelerated its digital learning strategy and diversified the service offerings of its Education business to include both operational and academic solutions for higher education institutions. Through Deltak, the Company acquired capabilities and technologies for its expansionto expand into custom online course and curriculum development. Deltak services include market research, marketing, student recruitment, enrollment support, proactive retention support, academic services to design courses, faculty support and access to the Deltak Engage Learning Management System.  Deltak’s online program management revenue is derived from pre-negotiated contracts with institutions that provide for a pre-negotiated share of tuition generated from students who enroll in programs that Deltak develops and manages for its institutional partners.  Service covered under contracts with institutions include market research, marketing, student recruitment, enrollment support, proactive retention support, academic services to design courses and support faculty and access to the Deltak Engage Learning Management System. Online program management revenue is deferred and recognized over the timeframe that each student is enrolled in the online program. TheAs of April 30, 2016 the Company currently supports 31 universityhad 38 partners with 100 online revenue generating programs and 46226 degree programs under contractcontract. Deltak generated revenue of $96.5 million in fiscal year 2016.
Course Workflow (WileyPLUS):
Through Education’s WileyPLUS platform, the Company offers an online environment for effective teaching and learning that is fully integrated with a complete digital or print 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.  WileyPLUS revenue is deferred and recognized over the timeframe that each student is enrolled in development but not yet generating revenue.the online course. WileyPLUS revenue was approximately $58.6 million in fiscal year 2016.
 
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Advertising Revenue:
 
The Company generates advertising revenue from print and online journal subscription products; its online publishing platform, Wiley Online Library; the Wiley Job Network, a full service online job board; online events such as webinars and virtual conferences; community interest websites such as spectroscopyNOW.com and websites for the Company’s leading brands like Dummies.com. These revenues accounted for approximately 3%2% of the Company’s consolidated fiscal year 20132016 revenue.
 
Advertisements are sold by company and independent sales representatives to advertising agencies representing the Company’s target customers. Typical customers include worldwide pharmaceutical companies; equipment manufacturers and distributors servicing the pharmaceutical industry; recruiters; and a variety of businesses targeting the Company’s leading brand customers. The Company’s advertising growth strategy focuses on increasing the volume of advertising on its online publishing platform; leveraging the brand recognition of its titles and society partnerships; the development of new advertising products such as online video promotions or event sponsorship arrangements; and advertising in new and emerging technologies such as the mobile devices market (i.e. applications for smartphones and tablets).
 
Global Operations
 
The Company’s publications and services are sold throughout most of the world through operations primarily located in Europe, Canada, Australia, Asia, and the United States. All operations market their indigenous publications, as well as publications produced by other partspublishing locations of the Company. The Company also markets publications through independent agents as well as independent sales representatives in countries not served by the Company. John Wiley & Sons International Rights, Inc., a wholly owned subsidiary of the Company, sells reprint and translations rights worldwide. The Company publishes or licenses others to publish its products, which are distributed throughout the world in many languages. Approximately 48%49% of the Company’s consolidated fiscal year 20132016 revenue was billed in non-U.S. markets.
 
The global nature of the Company’s business creates an exposure to foreign currency fluctuations relative to the U.S dollar.currency. Each of the Company’s geographic locations sells products worldwide in multiple currencies. The percentage of Consolidated Revenue and deferred revenue, although billed in multiple currencies are accounted for in the local currency of the selling location. Fiscalfiscal year 2013 revenue was2016 recognized in the following currencies (on an equivalent U.S. dollar basis): were: approximately 56%57% U.S dollar; 27%28% British pound sterling; 8% euro and 9%7% other currencies.
 
Competition and Economic Drivers within the Publishing Industry
 
The sectors of the publishing and information services industry in which the Company is engaged are competitive. The principal competitive criteria for the publishing industry are considered to be the following: product quality, customer service, suitability and searchability of format and subject matter, author reputation, price, timely availability of both new titles and revisions of existing books, digital availability of published products, and timely delivery of products to customers.
 
The Company is in the top rank of publishers of research journals worldwide, a leading commercial research chemistry publisher; the leading professional society journal publisher; one of the leading publishers of university and college textbooks and related materials for the “hardside” disciplines, (i.e. sciences, engineering, and mathematics), and a leading publisher in its targeted Professional Development markets. The Company knows of no reliable industry statistics that would enable it to determine its share of the various international markets in which it operates.
 
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Performance Measurements
 
The Company measures its performance based upon revenue, operating income, earnings per share and cash flow, excluding unusual or one-time events, and considering worldwide and regional economic and market conditions. The Company evaluates market share statistics for publishing programs in each of its businesses.  Research uses various reports to monitor competitor performance and industry financial metrics.  Specifically for Research journal titles, the ISI Impact Factor, published periodically by the Institute for Scientific Information, isThomson Reuters® Journal Citation Reports are used as a key metric of a journal title’s influence in scientific publishing. For Professional Development, the Company evaluates market share statistics periodically published by BOOKSCAN, a statistical clearinghouse for book industry point of sale data in the United States. The statistics include survey data from all major retail outlets, online booksellers, mass merchandisers, small chain and independent retail outlets. For Education, the Company subscribes to Management Practices Inc., which publishes customized comparative sales reports.reports, and also uses industry statistics and reports produced by the Association of American Publishers.
 
Results of Operations
 
Throughout this report, references to amountsvariances “excluding foreign exchange”, “currency neutral basis” and “performance basis” exclude both foreign currency translation effects and transactional gains and losses. Foreign currency translation effects are based on the change in average exchange rates for each reporting period multiplied by the current period’s volume of activity in local currency for each non-U.S. location.  For fiscal years 20132016 and 2012,2015, the average annual exchange rates to convert British pounds sterling to U.S. dollars were 1.581.50 and 1.59, respectively.  The1.60; the average annual exchange rates to convert euros into U.S. dollars forwere 1.11 and 1.25, respectively; and the same periodsaverage annual exchange rates to convert Australian dollars into U.S. dollars were 1.290.74 and 1.37,0.86, respectively. Unless otherwise noted, all variance explanations below are on a currency neutral basis.
 
Fiscal Year 2013 Summary ResultsFISCAL YEAR 2016 SUMMARY RESULTS
 
Revenue:
 
Revenue for fiscal year 20132016 decreased 1%5% to $1,760.8$1,727.0 million, but was flator 2% excluding the unfavorable impact of foreign exchange.  IncrementalThe decrease was mainly driven by a decline in print books ($44 million) and the previously announced transition to time-based digital journal subscription agreements for calendar year 2016 ($37 million), partially offset by growth in Online Program Management (Deltak) ($14 million); Corporate Learning (CrossKnowledge) ($13 million); online test preparation and certification ($6 million); new product formats in Education ($6 million); digital books ($4 million) and other ($4 million).
As previously announced the Company transitioned from issue-based to time-based digital journal subscription agreements for calendar year 2016. The transition to time-based digital journal subscription agreements shifted approximately $37 million of revenue from fiscal year 2016 to the Deltak, Inscaperemainder 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 ELS acquisitions ($56 million) was offset by the divestmentadministration of Professional Development (“PD”) consumer publishing programs ($27 million) and lower other print book revenue in each of the Company’s three core businesses.digital journal subscriptions.
 
Cost of Sales and Gross Profit:
 
Cost of sales for fiscal year 20132016 decreased 2%7% to $532.2$465.9 million, or 1%4% excluding the favorable impact of foreign exchange.  On a currency neutral basis and excluding incremental cost of sales from acquisitions ($11 million), cost of sales declined in each of the Company’s three core businesses.  A decline in PD ($9 million) principally reflects lower sales volume in the divested consumer publishing programs; a decline in Education ($5 million)The decrease was mainly driven by lower print textbook sales;sales volume ($8 million); cost savings from outsourcing and a decline in Research ($3 million) reflects the ongoing transition toprocurement initiatives and lower cost digital products ($13 million); lower royalty cost due to the transition to time-based digital journal subscription agreements ($5 million) and other ($4 million), mainly lower composition costs, partially offset by higher royalty rates.rates on society owned journals ($5 million); growth in Corporate Learning (CrossKnowledge) ($4 million) and Online Program Management (Deltak) ($2 million).
 
Gross profit for fiscal year 2013 of 69.8% was 30 basis points higher than prior year.  Excluding the impact of higher margin incremental revenue from acquisitions, gross profit margin declined 10 basis points to 69.4% principally due to higher royalty rates.
 
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Gross profit margin for fiscal year 2016 increased 40 basis points to 73.0% mainly driven by growth in higher margin digital products (70 basis points), partially offset by the impact of transitioning to time-based digital journal subscription agreements.
Operating and Administrative Expenses:
 
Operating and administrative expensesexpense for fiscal year 2013 increased2016 decreased 1% to $933.1$994.6 million, orbut increased 2% excluding the favorable impact of foreign exchange.  The increase was mainly driven by incremental operatingreflects higher student recruitment costs to support new Online Program Management (Deltak) programs ($14 million); investment in the Company’s Enterprise Resource Planning and administrative expenses from acquisitionsrelated systems ($3113 million) and other technology development and maintenance ($17 million); higher technologyemployment costs ($913 million), mainly merit increases and higher accrued variable incentive compensation; investments in Corporate Learning (CrossKnowledge) ($11 million); and higher employmentprocess reengineering consulting ($4 million) and legal costs ($4 million), partially offset by.  Restructuring and other cost containmentsavings initiatives ($941 million); a reduction related tosynergies from the divestment of the PD consumer publishing programsTalent Solution-Assessment business ($86 million); lower journal and booklower distribution costs due to lower volumesales volumes of print books and the migration from print to digital products ($4 million); lower facility costsjournals ($2 million); and a lower bad debt provision ($1 million).  Prior year facility costs included duplicate rent as partially offset the Company was transitioning to new facilities.cost  increases.
 
Restructuring Charges:
 
InBeginning in fiscal year 2013, the Company recorded restructuring charges of $29.3 million, $19.8 million after tax ($0.33 per share), which are described in more detail below:
Restructuring and Reinvestment Program
In fiscal year 2013, the Company announcedinitiated a program (the “Restructuring and Reinvestment Program”) to restructure and realign the Company’sits 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 the fourth quarter of fiscal year 2013,years 2016 and 2015, the Company recorded pre-tax restructuring charges of $24.5$28.6 million or $16.3($0.32 per share) and $28.8 million after tax ($0.270.34 per share), respectively, related to this program. These charges are reflected in Restructuring Charges in the RestructuringConsolidated Statements of Income and Reinvestment Program.  The restructuring charge includes accrued redundancysummarized in the following table (in thousands):
     Total Charges
 2016 2015 Incurred to Date
Charges by Segment:     
   Research$5,048 $4,555 $20,273
   Professional Development2,277 4,385 24,806
   Education1,206 1,571 4,786
   Shared Services20,080 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 consulting7,191 301 18,666
   Other activities4,977 11,410 26,719
Total Restructuring Charges$28,611 $28,804 $124,589
Other Activities reflects leased facility consolidations, contract termination costs and separation benefitsthe curtailment of $19.1 million, process reengineering consulting costs of $2.7 million and termination/curtailment costs related to the U.S.certain defined benefit pension planplans. The fiscal year 2016 restructuring charges of $2.7 million.  Approximately $2.9$28.6 million $6.3 million and $1.1 million of the restructuring charge was recorded within the Research, PD, and Education reporting segments, respectively, with the remainder recognized in Shared Service costs.  The charge isare expected to be fully recovered by April 30, 2014.  The Company expects to record an additional charge or charges during fiscal year 2014 as it implements successive phases of the program.  Given progress to date, the Company expects that it will be in a position to begin implementation ofwithin the next phase of the restructuring initiative mid-fiscal year 2014 which will generate a charge for additional employee separation-related benefits of a similar size to that taken in the fourth quarter of fiscal year 2013.18 months.
Other Restructuring Programs
As part of the Company’s ongoing transition and transformation to digital products and services, certain activities have been identified that will either be discontinued, outsourced, or relocated to a lower cost region.  As a result, the Company recorded a restructuring charge of approximately $4.8 million, $3.5 million after tax ($0.06 per share), in the first quarter of fiscal year 2013 for redundancy and separation benefits. Approximately $3.0 million, $1.3 million and $0.2 million of the restructuring charge was recorded within the Research, PD and Education reporting segments, respectively, with the remainder recognized in Shared Service costs.  The charge is expected to be fully recovered by January 31, 2014.
Impairment Charges:
In fiscal year 2013, in conjunction with the restructuring programs the Company recognized asset impairment charges of $30.7 million, $21.0 million after tax ($0.35 per share), which are described in more detail below:
 
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Consumer Publishing Programs
In September 2012, the Company entered into negotiations with Houghton Mifflin Harcourt (“HMH”) regarding the sale of the Company’s culinary, CliffsNotes, and Webster’s New World Dictionary consumer publishing programs.  As a result, the Company began accounting for these publishing programs as Assets Held for Sale and recorded an impairment charge of $12.1 million, $7.5 million after tax ($0.12 per share), in the second quarter of fiscal year 2013 to reduce the carrying value of the assets within these programs to their fair value based on the estimated sales price, less costs to sell.  In addition, in the second quarter of fiscal year 2013, the Company recorded a pre-tax impairment charge of $3.4 million, or $2.1 million after tax ($0.04 per share) to reduce the carrying value of inventory and royalty advances within its other consumer publishing programs to their estimated realizable value.
Controlled Circulation Publishing Assets
In fiscal year 2013, the Company identified certain controlled circulation publishing programs that no longer align with the Company’s long-term strategy and has shifted key resources from these programs to other publishing programs within the Research business.  As a result, the Company performed an impairment test on the intangible assets related to these controlled circulation publishing programs in the fourth quarter of fiscal year 2013, which resulted in a $9.9 million impairment charge, $8.2 million after tax ($0.14 per share).  The intangible assets principally consisted of acquired publishing rights.  The impairment charge resulted in a full write-off of the carrying value of these intangible assets based on their estimated fair values as determined by the Company.
Technology Investments
In fiscal year 2013, the Company identified certain technology investments which are no longer a long-term strategic fit and resources supporting these investments have been shifted to other areas.  As a result, the Company recorded an asset impairment charge of $5.3 million, $3.2 million after tax ($0.05 per share), to write-off the full carrying value of the related assets.
 
Amortization of Intangibles:
 
Amortization of intangibles increased $5.2 million to $42.0decreased $1.5 million in fiscal year 2013.  The increase was2016 mainly driven by incremental amortization relateddue to the Deltak ($2.7 million) and Inscape ($2.2 million) acquisitions.
Gain (Neteffect of Losses) on Sale of Consumer Publishing Programs:
Sale of Travel Publishing Program
On August 10, 2012, the Company entered into a definitive agreement with Google, Inc. (“Google”) for the sale of its travel publishing program, including all of its interests in the Frommer’s, Unofficial Guides, and WhatsonWhen brands for $22 million in cash, of which $3.3 million is held in escrow related to standard commercial representations and warranties and is expected to be released to the Company by the end of fiscal year 2014. The effective date of the transaction was August 31, 2012.  As a result, the Company recorded a $9.8 million gain on the sale, $6.2 million after tax ($0.10 per share), in the second quarter of fiscal year 2013.  In connection with the sale, the Company also entered into a transition services agreement which will end on December 31, 2013.  Fees earned by the Company in fiscal year 2013 in connection with the service agreement were approximately $0.5 million.
Sale of Culinary, CliffsNotes and Webster’s New World Publishing Programs
On November 5, 2012, the Company completed the sale of the Company’s culinary, CliffsNotes, and Webster’s New World Dictionary consumer publishing programs to HMH for $11.0 million in cash, which approximated the carrying value of related assets sold, of which $1.1 million is held in escrow related to standard commercial representations and warranties and is expected to be released to the Company by the end of fiscal year 2014.  In connection with the sale, the Company also entered into a transition services agreement which ended in March 2013.  Fees earned by the Company in fiscal year 2013 in connection with the service agreement were approximately $1.5 million.
Sale of Other Publishing Programs
In the fourth quarter of fiscal year 2013, the Company completed the sale of its other consumer publishing programs to multiple buyers for approximately $1 million in cash and a future royalty interest.  The Company recorded a $3.8 million loss on the sales ($3.6 million after tax or $0.06 per share).foreign exchange.
 
Interest Expense/Income, Foreign Exchange and Other:
 
Interest expense for fiscal year 2013 increased $4.02016 decreased $0.4 million to $13.1 million.  Higher$16.7 million due to a decrease in the Company’s average borrowing rate from 2.1% to 2.0%, partially offset by higher average debt and higher interest rates contributed approximately $2.2 million and $1.9balances outstanding.  Foreign exchange transaction gains decreased from $1.7 million to the increase, respectively.  The increase$0.5 million in debt was mainly due to financing acquisitions.  The Company’s average cost of borrowing during fiscal years 2013 and 2012 was 1.9% and 1.6%, respectively.year 2016.
 
Provision for Income Taxes:
 
The effective tax rate for fiscal year 20132016 was 22.8%16.6% compared to 21.8%21.6% in the prior year.  During the first quarters ofIn fiscal years 2013 and 2012,year 2016, the Company recorded non-cash deferred tax benefits of $8.4$5.9 million ($0.140.10 per share) and $8.8 million ($0.14 per share), respectively, principally associated with new tax legislation enacted in the United Kingdom (U.K.(“U.K.”) that reduced the future U.K. statutory income tax rates by 2% in each period.. The benefits recognized by the Company reflect the measurementremeasurement of all applicable U.K. deferred tax balances to the new income tax rates.  The U.K. statutory tax rate asrates of 19% effective April 30, 2013 is 23%.
1, 2017 and 18% effective April 1, 2020.  In the fourth quarter of fiscal year 2013,2015, the Company recordedrecognized a non-recurring tax chargebenefit of $2.1$3.1 million ($0.040.05 per share) due to recently published IRS tax positions related to tax deductions claimed on the Company’s abilitywrite-up of certain foreign tax assets to take certain deductions in the U.S. and in the third quarter of fiscal year 2012, the Company released an income tax reserve of approximately $7.5 million ($0.12 per share) due to the expiration of the statute of limitations.  The $7.5 million was originally recorded in conjunction with the purchase accounting for the Blackwell acquisition.fair market value. Excluding the impact of the tax benefits and tax charges described above, the Company’s effective tax rate decreased from 27.8%22.9% to 26.2%19.9% principally due to lower foreign tax rates, a favorable mixtax reserve release and a lower proportion of earnings that resultedincome from lowerthe U.S. earnings in fiscal year 2013 and lower U.K.at higher tax rates.
 
Earnings Per Share:
 
Earnings per diluted share for fiscal year 20132016 decreased 31% to $2.39$0.49 per share reflectingto $2.48 per share, or $0.43 per share excluding the restructuring and impairment chargescurrent ($0.680.32 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), the prior year incomenon-recurring tax reserve releasebenefit ($0.12 per share), the current year tax charge ($0.040.05 per share) and the unfavorable impact of foreign exchange ($0.040.13 per share).  The decline was mainly driven by the transition to time-based digital journal subscription agreements ($0.42 per share); investments in the Company’s Enterprise Resource Planning and related systems, Online Program Management (Deltak) and Corporate Learning (CrossKnowledge), partially offset by restructuring and other cost savings initiatives.
BUSINESS SEGMENT RESULTS:
As part of Wiley’s Restructuring and Reinvestment Program, the net gain on saleCompany 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 consumer publishing programs ($0.04 per share).  ExcludingCompany modified its product/service revenue categories for the Research segment. As a result, prior year amounts have been restated to reflect these items, earnings per diluted share decreased 7% mainly duesame 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 the divested consumer publishing programs ($0.07 per share) and lower print book revenue, partially offset by acquisitions ($0.05 per share).allocate shared service costs to each business segment.
 
28
 
Fiscal Year 2013 Segment Results:
   % change
RESEARCH:20162015% changew/o FX (a)
Revenue:    
Journal Revenue:    
Journal Subscriptions $611,403 $672,218-9%-6%
Author-Funded Access 25,669 22,38815%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 42,5125%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 Margin72.8%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 Margin45.6%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 Margin28.3%30.3%  
 
In fiscal year 2013, the Company renamed its operating segments to better reflect its focus on providing knowledge and knowledge-based services in areas of research, professional development and education.  As a result, Scientific, Technical, Medical and Scholarly has been renamed Research; Professional/Trade has been renamed Professional Development; and Global Education has been renamed Education.  In fiscal year 2013, the Company also changed its internal reporting of segment measures for the purposes of assessing performance and making resource allocation decisions. As a result, the Company now reports on segment performance identified as Contribution to Profit after the allocation of certain direct Shared Services and Administrative Costs.  These costs were previously reported as independent activities and not reflected within each segment's operating results. We will continue to report total Shared Services and Administrative Costs by function as management believes they are useful in understanding the Company’s overall performance.  In addition, management responsibility and reporting of certain Professional Development and Education product lines were realigned as of May 1, 2012.  Prior year results have been restated for comparative purposes for each of the changes described above.

 Research:       
       % change 
 Dollars in thousands 2013 2012% changew/o FX (a) 
 Journal Subscriptions $641,584  $650,938  -1%  0% 
 Books  164,750   179,204  -8%  -7% 
 Other Publishing Income  203,491   210,585  -3%  -1% 
 TOTAL REVENUE $1,009,825  $1,040,727  -3%  -2% 
                
 Cost of Sales  (271,405)  (278,427) -3%  -1% 
                
 GROSS PROFIT  738,420   762,300  -3%  -2% 
 Gross Profit Margin  73.1%   73.2%       
                
 Direct Expenses  (274,714)  (283,840) -3%  -2% 
 Amortization of Intangibles  (26,915)  (26,186) 3%  4% 
 Restructuring Charges (see Note 10)  (5,911)  -       
 Impairment Charges (see Note 11)  (9,917)  -       
                
 DIRECT CONTRIBUTION TO PROFIT $420,963  $452,274  -7%  -2% 
 Direct Contribution Margin  41.7%   43.5%       
                
 Allocated Shared Services and Administrative Costs:              
 Distribution  (46,009)  (47,995) -4%  -3% 
 Technology Services  (66,105)  (65,734) 1%  1% 
 Occupancy and Other  (22,343)  (21,085) 6%  7% 
 CONTRIBUTION TO PROFIT $286,506  $317,460  -10%  -3% 
 Contribution Margin  28.4%   30.5%       

(a)  Adjusted to exclude the fiscal year 2013 restructuring2016 and impairment charges.2015 Restructuring Charges
 
Revenue:
Research revenue for fiscal year 20132016 decreased 3%7% to $1.01 billion,$965.3 million, or 2%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 declinechange 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 largely driven by lower print book revenue and other publishing income.flat with the prior year.
 
Journal Subscriptions
Journal subscription revenue for fiscal year 2013 decreased 1% to $641.6 million, but was flat excluding6% on a currency neutral basis mainly due the unfavorable impact of foreign exchange.  Increased revenue from new society business ($4 million) andmoving to time-based digital journal subscriptions ($4 million) was offset by publication scheduling ($537 million) and the timingtrailing effects of revenue associated with a pilot for a new subscription licensing modelthe Swets bankruptcy ($3 million) further described below.  Calendar year 2013.  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 billings asagreements and foreign exchange, Journal Subscription revenue was flat with the prior year.  As of April 30, 2013 are up 3% over2016, calendar year 2012 mainly due to new society2016 journal subscription renewals were 1% higher than calendar year 2015 billings on a constant currency basis with approximately 95% of targeted business and growth inunder contract for the U.S. and Asia.2016 calendar year.
 
29
 
For calendar
Author-Funded Access, which represents article publication fees that provide for free access to articles, grew $3.3 million in fiscal year 2013,2016. Licensing, Reprints, Backfiles and Other revenue of $178.5 million was flat with the Company piloted an alternative journal subscription license model for a group of customers.  Previously, those customers’ licenses were basedprior year on a commitmentconstant currency basis.
On a currency neutral basis, Print Books declined 6% to $90.6 million in fiscal year 2016.  Digital Books grew 9% on a currency neutral basis which was mainly driven by the Company to provide a discrete number of online journal issues which provided for recognition of revenue by the Company as issues were published.  Under this alternative model, the Company provides access to all content publishedsingle $4 million digital book sale in the calendarcurrent year. Licensing and Other revenue of $14.3 million was flat with the prior year and provides for recognition of revenue on a straight-line basis over the calendar year covered by the alternative license model.  The new licensing terms result in a $3.0 million shift of revenue from fiscal year 2013 to fiscal year 2014 but will have no impact on current or future calendar year journal revenue.currency neutral basis.
 
Books
Book revenue for fiscal year 2013 declined 8% to $164.8 million, or 7% excluding the unfavorable impact of foreign exchange as lower print book revenue ($16 million) was partially offset by growth in digital books ($3 million).
Other Publishing Income
Other publishing income for fiscal year 2013 decreased 3% to $203.5 million, or 1% excluding the unfavorable impact of foreign exchange.  The decline was driven by lower sales of journal reprints ($6 million), backfiles ($4 million) and advertising ($4 million), partially offset by increased sales of publishing rights ($5 million), funded open access ($4 million) and other fees ($2 million).
Total Research Revenue by Region (on a currency neutral basis)is as follows:
·  
Americas declined 1% to $388.2 million
·  
EMEA decreased 2% to $557.3 million
·  
Asia-Pacific decreased 3% to $64.3 million
  % of% change
 20162015Revenuew/o FX
Revenue by Region:    
Americas$370,111$398,57338%-6%
EMEA540,562585,69356%-3%
Asia-Pacific54,581 56,5296%7%
Total Revenue $965,254 $1,040,795100%-3%
 
Cost of Sales:
 
Cost of salesSales for fiscal year 20132016 decreased 3%5% to $271.4$262.7 million, or 1% excluding the favorable impact of foreign exchange. The declinedecrease was mainly driven by growth inlower royalty costs 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 ($7 million) and lower print volume ($4 million), partially offset by higher royalty rates on new society owned journals ($75 million) and higher print inventory obsolescence provisions ($1 million).
 
Gross Profit:
 
Gross profit margin forProfit Margin decreased 70 basis points to 72.8% in fiscal year 2013 of 73.1% was 10 basis points lower than prior year2016 mainly due to higher royalty rates on new society journals (70 basis points), partially offset by higher marginthe impact of transitioning to time-based digital products.journal subscription agreements.
 
Direct Expenses and Amortization:
 
Direct expensesExpenses for fiscal year 2013 of $274.72016 decreased 6% to $229.7 million, decreased 3% from prior year, or 2% excluding the favorable impact of foreign exchange.  The declinedecrease 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), partially offset by merit increases ($2 million), a prior year bad debt provision related to an outstanding receivable with a university in Iran; higher legal and process reengineering consulting fees ($2 million); and higher accrued incentive compensation ($1 million) and lower employment costs ($1 million) mainly due to lower accrued incentive compensation.
.  Amortization of intangibles increased $0.7Intangibles decreased $0.6 million to $26.9$27.5 million in fiscal year 20132016 mainly due to the acquisitionfavorable impact of publication rights for new society journals.foreign exchange.
Contribution to Profit:
 
Contribution to profitProfit for fiscal year 20132016 decreased 10%14% to $286.5$273.0 million, or 3%10% excluding the unfavorable impact of foreign exchange and the current and prior year Restructuring Charges.  The decrease was principally driven by the impact of the transition to time-based journal subscriptions; higher royalty rates on society owned journals; and higher employment costs, partially offset by restructuring and impairment charges.other cost savings from outsourcing and procurement initiatives.  Contribution margin declined 210 basis pointsMargin was 28.3% compared to 28.4%30.3% in fiscalthe prior year 2013, or 50 basis points excluding the restructuring and impairment charges and the unfavorable impact of foreign exchange mainly due to top-line results.period.

30
 
Society Partnerships
·  426 new society journals were signed with combined annual revenue of approximately $31$12 million
·  8187 renewals/extensions were signed with approximately $52$54 million in combined annual revenue
·  418 journals were lost or not renewed with combined annual revenue of approximately $7$11 million
 
New Society Contracts
·  23 journals for the American Geophysical Union, the world’s leading society of Earth and space science
·  
Journal of Brewing and Distilling and Brewer & Distiller International for the Institute of Brewing and Distilling (IBD)
·  
Journal of Engineering Education for the American Society for Engineering Education (ASEE)
·  
Journal of the Experimental Analysis of Behavior (JEAB) and the Journal of Applied Behavior Analysis (JABA) for the Society for Experimental Analysis of Behavior (SEAB)
·  
Psychoanalytic Quarterly previously self-published
·  
Journal of Hepato-Pancreatic-Biliary Sciences, for the Society of Hepato-Pancreatic-Biliary Surgery (Japan)
·  
Cell Biology International, the official journal of the International Federation for Cell Biology as well as the open access spin off journal Cell Biology International Reports previously published by Portland Press
·  
Asia and the Pacific Policy Studies which is a new-start, society-funded open access journal, co-owned with the Crawford School of Public Policy at the Australian National University
·  
Journal of Clinical Pharmacology for the American College of Clinical Pharmacology
·  
Mining + Geo in cooperation with the DGGT- German Society for Geotechnic
·  
Political Science Quarterly for the Academy of Political Science
·  
World Psychiatry for the World Psychiatric Association
·  
Geoscience Data Journal for the Royal Meteorological Society
·  
Australian and New Zealand Journal of Family Therapy for Australian Association of Family Therapy
·  
Respirology Case Reports, for the Asia Pacific Society of Respirology
·  
ACEP News for the American College of Emergency Physicians
·  
Clinical Neurology for the Japanese Society of Neurology
·  
Radiographer & Spectrum for five years from 2013
·  
Sexual Medicine and Sexual Medicine Reviews a new start for the International Society for Sexual Medicine
Acquisitions
·  
In January 2013, Wiley acquired the assets of the FIZ Chemie Berlin, a provider of online database products for organic and industrial chemists. The products include the ChemInform weekly abstracting service and reaction database (CIRX), as well as the abstracting journal Chemisches Zentralblatt, the InfoTherm database of thermophysical properties, and eLearning tools and services.
·  In May 2012, Wiley acquired Harlan Davidson Inc. (HDI), a small family owned publishing company in Wheeling, IL, for approximately $1.4 million.  The acquisition builds on Wiley’s existing high quality American History portfolio, and strengthens growing curriculum areas such as World History, Atlantic History and State History.  Fiscal year 2013 revenue generated by HDI was approximately $0.6 million.
Open Access Survey and Initiatives
·  In October 2012, Wiley announced the results of an author survey on open access.  Over ten thousand authors from Wiley’s journal portfolio responded to questions about gold open access, where their institution or funding body pays a fee to ensure the article is made open access.  The research explored the factors that authors assess when deciding where to publish, and whether to publish gold open access.  Among the top factors considered by authors were the relevance and scope of the journal, the journal’s impact factor and the international reach of the journal.  Of the 10,600 respondents, 30% had published at least one gold open access paper, and 79% stated that open access was more prevalent in their discipline than three years ago.  Among authors yet to publish open access, the list of reasons given included a lack of high profile open access journals (48%), lack of funding (44%) and concerns about quality (34%).  Authors said they would publish in an open access journal if it had a high impact factor, if it were well regarded and if it had a rigorous peer review process.  Wiley’s open access revenue grew approximately $4 million in fiscal year 2013.  An open access option is available for individual journal articles to authors in 81% of the journals Wily publishes.
·  In July 2012, Wiley announced that its open access option for individual journal articles, OnlineOpen, will be available to authors in 81% of the journals it publishes. For a publication service charge, OnlineOpen gives authors the option to publish an open access paper in their journal of choice where it will benefit from maximum impact.  OnlineOpen, Wiley’s hybrid open access model for subscription journals launched in 2004, is available to authors of primary research articles who wish to make their article available to non-subscribers on publication, or whose funding agency requires grantees to archive the final version of their article.  As of April 30, 2013, OnlineOpen is available in over 1,200 subscription journals.
·  In June 2012, Wiley announced the creation of a new role, the Vice President and Director of Open Access, to lead the Company’s open access initiatives.  Working with colleagues, societies, funders, and academic institutions, the role will facilitate the identification of open access opportunities and lead the development of products, policy, technology, processes, sales, and marketing initiatives necessary to provide first class support to authors.
Impact FactorsIndex
 
In July 2012,2015, Wiley announced a strong performance in the number of its journal titles indexed in the Thomson ISI® 2011Reuters® 2014 Journal Citation Reports (JCR) showed that. A total of 1,200 Wiley continues to increase both the number and proportion of its journal titles were indexed, with an impact factor, with 1,156 titles (76% of our total) included.  This is up from 73% in the 2010 report.  Impact factors are a metric that reflect the frequency that peer-reviewed24 Wiley journals are cited by researchers, making them an important tool for evaluating a journal’s quality.  Approximately 34% of the JCR Subject Categories have a Wiley Journal ranked inachieving the top three.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.
 
Nobel Prize Winners
Wiley announced that eight 2012 Nobel Prize winners have published their work with Wiley.  To celebrate the achievements of all Nobel winners, Wiley is making a selection of content from this and past years’ winners of Nobel Prizes in all areas free to access until the end of the year.  Wiley-published winners include: Sir John B. Gurdon, UK, and Professor Shinya Yamanaka, Japan, awarded the Nobel Prize in Physiology or Medicine; Professor Robert J. Lefkowitz and Professor Brian K. Kobilka, USA, awarded the Nobel Prize in Chemistry; and professor Serge Haroche, France, and Dr. David J. Wineland, USA, awarded the Nobel Prize in Physics.  The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel for 2012 has been awarded jointly to Professors Alvin E. Roth and Llyod S. Shapley, of the USA.
Global Citizenship and Research4Life
The Company and other Research4Life partners announced that they have agreed to extend their partnership through 2020.  Wiley also announced that its 12,200 online books would be made available through the Research4Life initiatives of HINARI, AGORA and OARE, benefitting research and academic communities in 80 low- and middle-income countries.  Research4Life provides 6,000 institutions in developing countries with free or low cost access to peer-reviewed online content from the world’s leading scientific, technical and medical publishers. The addition of Wiley’s online books brings the total number of peer reviewed scientific journals, books and databases now available through the public-private Research4Life partnership to almost 30,000.

 Professional Development (PD):       
       % change 
 Dollars in thousands   2013    2012 % change w/o FX (a) 
 Books $339,693  $371,689  -9%  -8% 
 Online Training & Assessment  29,854   7,553       
 Other Publishing Income  46,948   48,320  -3%  -2% 
 TOTAL REVENUE $416,495  $427,562  -3%  -2% 
                
 Cost of Sales  (151,239)  (158,841) -5%  -4% 
                
 GROSS PROFIT  265,256   268,721  -1%  -1% 
 Gross Profit Margin  63.7%   62.8%       
                
 Direct Expenses  (153,411)  (154,549) -1%  -1% 
 Amortization of Intangibles  (8,092)  (5,741) 41%  41% 
 Restructuring Charges (see Note 10)  (7,537)  -       
 Impairment of Consumer Publishing Programs (see Note 11)  (15,521)  -       
 Net Gain on Sale of Consumer Publishing Programs (see Note 5)  5,983   -       
                
 DIRECT CONTRIBUTION TO PROFIT $86,678  $108,431  -20%  -4% 
 Direct Contribution Margin  20.8%   25.4%       
                
 Allocated Shared Services and Administrative Costs:              
 Distribution  (40,664)  (45,118) -10%  -9% 
 Technology Services  (29,187)  (25,248) 16%  16% 
 Occupancy and Other  (11,381)  (13,011) -13%  -13% 
 CONTRIBUTION TO PROFIT $5,446  $25,054  -78%  -9% 
 Contribution Margin  1.3%   5.9%       
   % change
PROFFESIONAL DEVELOPMENT (PD):20162015% changew/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 22,11927%27%
Other Knowledge Service Revenue 28,813 30,094-4%-2%
  296,220 307,971-4%-2%
Talent Solutions:    
Assessment $57,369 $57,0351%1%
Corporate Learning 50,692 42,01721%31%
  108,061 99,0529%14%
     
Total Revenue $404,281 $407,023-1%2%
     
Cost of Sales (103,652) (114,014)-9%-7%
     
Gross Profit $300,629 $293,0093%6%
Gross Profit Margin74.4%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 $143,15717%17%
Direct Contribution Margin41.3%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 $38,13795%84%
Contribution Margin18.4%9.4%  
 
(a)  Adjusted to exclude the fiscal year 2013 restructuring2016 and impairment charges and the net gain on sale of the consumer publishing programs.2015 Restructuring Charges
 
Revenue:
 
PD revenue for fiscal year 20132016 decreased 3%1% to $416.5$404.3 million, orbut increased 2% excluding the unfavorable impact of foreign exchange.  Lower book revenueThe increase on a currency neutral basis was driven by growth in Talent Solutions, and other publishing income wasOnline Test Preparation and Certification partially offset by incremental revenue from the acquired Inscape ($18 million) and ELS ($4 million) online training and assessment businesses.  Thea decline in book revenue was driven by divested consumer titles ($29 million) and continued softness in global retail channels for printBook Revenue.

 
31
 
books.  Ebook
Knowledge Services revenue grew 17% in fiscal year 2013decreased 4% to approximately $47 million.  The decline in other publishing income reflects lower advertising ($2 million) and copyright revenue ($1 million), partially offset by revenue from the Company’s transition services agreements related to the sales of the consumer publishing programs ($2 million).
Total PD revenue by Region (on a currency neutral basis)
·  
Americas fell 3% to $328.6 million
·  
EMEA was flat at $57.2 million
·  
Asia-Pacific fell 1% to $30.7 million
Total PD Revenue by Major Category (on a currency neutral basis)
·  
Business grew 16% to $164.0 million, with solid growth from Inscape and the CFA product launch
·  
Divested Consumer titles fell 38% to $45.6 million
·  
Consumer-Lifelong Learning titles decreased 10% to $45.5 million
·  
Technology was flat with the prior year at $86.3 million
·  
Professional Education was flat at $27.7 million
·  
Architecture fell 7% to $23.2 million
·  
Psychology grew 4% to $13.4 million
Cost of Sales:
Cost of sales for fiscal year 2013 decreased 5% to $151.2$296.2 million, or 4% excluding the favorable impact of foreign exchange.  The decline was driven by lower sales volume in the divested consumer publishing programs ($12 million), partially offset by higher royalty rates ($3 million) and incremental costs from acquisitions ($2 million).

Gross Profit:
Gross profit margin for fiscal year 2013 of 63.7% was 90 basis points higher than prior year reflecting higher margin digital revenue from acquisitions (140 basis points), partially offset by higher royalty rates.
Direct Expenses and Amortization:
Direct expenses for fiscal year 2013 decreased 1% to $153.4 million reflecting planned headcount reductions ($7 million), cost containment initiatives ($3 million) and lower incentive compensation ($1 million), partially offset by incremental costs from acquisitions ($10 million).  The divestment of the consumer publishing programs contributed $8 million towards the improvement in direct expenses.
Amortization of intangibles increased $2.4 million to $8.1 million in fiscal year 2013 mainly due to acquired intangible assets associated with Inscape.
Contribution to Profit:
Contribution to profit decreased $19.6 million to $5.4 million in fiscal year 2013.  Contribution margin was 1.3% compared to 5.9% in the prior year.  Excluding the restructuring and impairment charges and the net gain on sale of the consumer publishing programs the contribution margin declined 50 basis points to 5.4%, principally due to lower print book revenue and higher technology costs, partially offset by cost containment and lower distribution costs.
Acquisitions and Alliances
·  
In August 2012, the Company acquired the assets of Trader’s Library for approximately $1.5 million, assuming sales for 154 products, mostly videos. Traders' Library is a book publishing and distribution company targeting the full spectrum of the investment arena - from individual investors and financial advisors to professional traders.
·  In November 2012, the Company acquired Efficient Learning Systems, Inc. (“ELS”) an e-learning system provider focused in the areas of professional finance and accounting, for $24 million.  The acquisition helps Wiley become a leader in the growing global online CPA exam preparation market and will accelerate our e-learning strategies with capabilities that can be leveraged with other accounting and financial certifications. Revenue report for fiscal year 2013 was $3.7 million, in line with expectations.
·  In December 2012, the Company acquired the assets of Stevenson, Inc., a leading resource for newsletters and online events in fundraising, nonprofit management, and communications. The assets include six well-respected newsletters and a variety of online events. The acquisition will enable Wiley to expand its strategy for digital delivery of content to the growing nonprofit market globally, providing practical information to nonprofit professionals.
·  In the third quarter of fiscal year 2013, Wiley signed a Financial Industry Regulatory Authority (FINRA) series test preparation agreement with the Securities Institute of America (SIA) to provide preparatory exam content for financial brokers and advisors.
Online Training and Assessment Update
The Company has merged its Inscape and Pfeiffer business into a single Workplace Learning Solutions group.   Inscape’s performance for fiscal year 2013 exceeded the company’s earnings expectations. The results reflect the Company’s successful migration to a new 3rd generation Everything DiSC application. Year-over-year comparative revenue growth from Inscape was 8%. Sales through Inscape’s North American distributor sales channels grew 7.5%, while sales through other global distributor channels increased 8.9%.  The Company added a second product development studio, doubled the number of assessment-related training products under development and added leadership focus and brand management resources to our Everything DiSC and Leadership Challenge Lines.
The Company’s indigenous test prep program showed solid growth in fiscal year 2013 with the addition of the Certified Managerial Accountant (CMA) exam prep to our historic and growing CPA Test Prep.   Total revenue nearly doubled to $6 million.  During the year, Wiley also completed the acquisition of ELS, a provider of the full online CPA Review course ‘CPA Excel’, which contributed revenue of $4 million to the Company’s results.
Other Product Launches
·  
Tax Preparer launched in October 2012.  RTRPTestBank.com contains 1000+ multiple choice questions that allow users studying for the Registered Tax Return Preparer exam to create unlimited practice tests and custom quizzes in a format similar to the actual exam.  Candidates can purchase subscriptions through the marketing website, PasstheTaxExam.com, which also sells additional products and provides social features.
·  
CMA Review (1st of two phases) launched in October 2012, WileyCMA.com provides Certified Management Accountant exam candidates with review guides, practice software, study tips, and exam resources.  In partnership with the Institute of Management Accountants (“IMA”), Wiley is responsible for production and sales of all CMA review titles. 
·  
Pfeiffer Assessment Platform Release – an upgrade in September 2012 added 2 new assessments to the website (Treasurer Self and Treasurer 360), improved registration functionality and enhanced certain administrative tools.
·  
Sybex Video Training DVDs and Streaming Websites - released in September and October 2012, these products are available as DVD-ROMs, online streaming products, or as downloadable files.  Using hands-on lessons with step-by-step instruction, the high-definition video training products cover the essential features of the top-selling software packages from Autodesk, a software and services developer for design, engineering and entertainment professionals.

 Education:       
       % change 
 Dollars in thousands 2013      2012% change w/o FX (a) 
 Print Books $184,131  $215,679  -15%  -14% 
 Non-Traditional & Digital Content  105,662   88,006  20%  20% 
 Online Program Management (Deltak)  33,745   -       
 Other Publishing Income  10,920   10,768  1%  3% 
 TOTAL REVENUE $334,458  $314,453  6%  7% 
                
 Cost of Sales  (109,588)  (106,128) 3%  4% 
                
 GROSS PROFIT $224,870  $208,325  8%  8% 
 Gross Profit Margin  67.2%   66.2%       
                
 Direct Expenses  (112,779)  (95,791) 18%  18% 
 Amortization of Intangibles  (6,975)  (4,823) 45%  45% 
 Restructuring Charges (see Note 10)  (1,288)  -       
                
 DIRECT CONTRIBUTION TO PROFIT $103,828  $107,711  -4%  -2% 
 Direct Contribution Margin  31.0%   34.3%       
                
 Allocated Shared Services and Administrative Costs:              
 Distribution  (15,277)  (15,945) -4%  -4% 
 Technology Services  (30,727)  (27,572) 11%  11% 
 Occupancy and Other  (7,079)  (5,771) 23%  23% 
 CONTRIBUTION TO PROFIT $50,745  $58,423  -13%  -11% 
 Contribution Margin  15.2%   18.6%       
(a)   Adjusted to exclude the fiscal year 2013 restructuring charges.
Revenue:
Education revenue for fiscal year 2013 increased 6% to $334.5 million, or 7% excluding the unfavorable impact of foreign exchange mainly driven by incremental revenue from the Deltak acquisition ($34 million) and growth in non-traditional and digital content, partially offset by lower revenue from print textbooks.  Digital revenue, including Deltak, grew $51.4 million in fiscal year 2013 and accounted for 30% of total Education revenue in fiscal year 2013 as compared to 15% in the prior year.
Print Books
Print book revenue for fiscal year 2013 decreased 15% to $184.1 million, or 14%2% excluding the unfavorable impact of foreign exchange.  The decrease was mainly driven by enrollment declines,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 for-profit sector,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 rentals onforeign exchange.  Revenue growth in Corporate Learning came from new customers, including the traditional textbook business.expansion into the U.S. market, 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.
Revenue by Region is as follows:
  % of% change
 20162015Revenuew/o FX
Revenue by Region:    
Americas $291,258 $288,88272%1%
EMEA92,10695,61323%4%
Asia-Pacific20,91722,5285%0%
Total Revenue $404,281 $407,023100%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 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 million, or 7% excluding the favorable impact of foreign exchange. The reduction was driven by restructuring and other cost savings ($18 million) and 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.
Contribution to Profit:
Contribution to Profit for fiscal year 2016 was $74.5 million compared to $38.1 million in the prior year. The improvement was mainly driven by restructuring and other cost savings, gross margin improvement and reduced technology investment. Contribution Margin for fiscal year 2016 increased from 9.4% to 18.4%.
 
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Non-Traditional & Digital Content
Non-traditionalTest 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®, 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 content revenue, which includes WileyPLUS, eBooks, digital content sold directlylearning solutions to institutions, binder editionsthousands of students and custom publishing, increased 20%educators.  As part of the agreement, CrossKnowledge has donated the use of its Learning Management System (LMS) to $105.7Junior 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 in fiscal year 2013.  The growth mainly reflects higher revenue from WileyPLUS and eBooks.JA users.
CrossKnowledge/L’Oréal platform:
 
Total Education Revenue by Region (on a currency neutral basis)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:20162015% changew/o FX (a)
Revenue:    
Books:    
Print Textbooks $107,636 $144,500-26%-20%
Digital Books 34,462 34,0861%5%
  142,098 178,586-20%-15%
     
Custom Materials 51,842 50,6592%2%
     
Course Workflow Solutions (WileyPLUS) 58,551 54,2008%10%
     
Online Program Management (Deltak) 96,469 81,59318%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 Margin72.1%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 Margin33.1%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 Margin10.0%12.5%  
·(a)  
Americas increased 11%Adjusted to $250.6, including incremental Deltak revenue of $33.7 million
·  
EMEA fell 10% to $19.4 million
·  
Asia-Pacific fell 1% to $64.5 million
exclude the fiscal year 2016 and 2015 Restructuring Charges
 
33
Revenue:
Education Revenuerevenue 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 due to higher returns; retail channel consolidation; lower enrollments; increased market penetration by Major Subject* (onrental; 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)
·  
Engineering and Computer Science grew 4% to $43.2 million
·  
Science declined 11% to $62.2 million
·  
Business and Accounting declined 6% to $78.6 million
·  
Social Science declined 4% to $49.2 million
·  
Math declined 9% to $23.6 million
·  
Microsoft Official Academic Course (MOAC) grew 4% to $10.9 million
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.
 
*The above excludes approximately $28.1Revenue from Online Program Management (Deltak) grew 18% to $96.5 million reflecting higher enrollments; an increase in fiscal year 2013institutional 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 related to the school business in Australia and approximately $33.7 million related to Deltak.generating.
Revenue by Region is as follows:
  % of% change
 20162015Revenuew/o FX
Revenue by Region:    
Americas $295,296 $300,17483%-1%
EMEA 15,764 19,2654%-15%
Asia-Pacific 46,442 55,18313%-4%
Total Revenue $357,502 $374,622100%-2%
Cost of Sales:
 
Cost of Sales
Cost of sales for fiscal year 20132016 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), partially offset by higher Online Program Management (Deltak) costs due to program growth ($2 million) 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 $109.6$128.8 million, or 4%5% excluding the favorable impact of foreign exchange.  The increase was mainly driven by incrementalstudent recruitment costs from the Deltak acquisitionto support new Online Program Management (Deltak) programs ($914 million) and merit increases ($1 million), partially offset by restructuring and other cost savings ($5 million); lower print book volumeaccrued variable incentive compensation ($42 million); and other, mainly lower cost digital productsthird-party advertising and promotional expenses ($12 million).
Gross Profit:
Gross profit margin for fiscal year 2013 improved 100 basis points to 67.2% principally due to higher margin incremental Deltak revenue (80 basis points) and growth in digital products.
Direct Expenses and Amortization:
Direct expenses increased 18% to $112.8 Amortization of Intangibles was $9.5 million in fiscal year 2013 principally due to incremental costs from the Deltak acquisition ($18 million)years 2016 and employment costs ($3 million), partially offset by cost containment initiatives ($3 million).2015.

 
Amortization of intangibles increased $2.2 million to $7.0 million in fiscal year 2013 primarily due to acquired intangible assets associated with Deltak.
34
 
Contribution to Profit:
 
Contribution to profitProfit for fiscal year 20132016 decreased 13%23% to $50.7$35.9 million, or 11%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 thousands20162015% Changew/o FX (a)
Distribution and Operation Services $83,109 $89,024-7%-3%
Technology and Content Management 257,822 244,8505%8%
Finance 49,798 52,796-6%-2%
Other Administration 126,777 115,46910%13%
Restructuring Charges (see Note 6) 20,080 18,293  
Total $537,586 $520,4323%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 restructuring charges.  Contribution margin was 15.2% comparedcurrent 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 18.6%incremental investments in the prior year reflectingCompany’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 charges and lowerinitiatives, in November 2015, Wiley entered into an agreement to outsource its US-based print textbook revenue.   Contribution margin from Deltakfulfillment operations to Cengage Learning, with the aim of approximately 6% reflects the continued investment in new university partner programs which are in the development stage.creating a more efficient and variable cost model.  As of April 30, 2016 these operations were fully transitioned to Cengage.
 
35
 
Deltak Acquisition and Update
On October 25, 2012, the Company acquired Deltak.edu (“Deltak”) for approximately $220 million, net of cash acquired.  Deltak, one of the leading Online Program Management (“OPM”) providers in the United States, contributed $33.7 million in revenue in its first six months as a Wiley entity as compared to approximately $54 million in annual revenue at the time of acquisition. Deltak is a high-growth business that works in close partnership with leading colleges and universities to develop and support fully online degree and certification programs, with tuition revenue being shared by both partners under long-term contracts. The business, founded in 1997, provides technology platforms and services including market research validating program demand, instructional design, marketing, and student recruitment and retention services to leading national and regional colleges and universities throughout the United States.
In the fourth quarter of fiscal year 2013, Deltak added two new university partners.  Since the acquisition closed in October, Deltak has added five new university partners, American University, Case Western Reserve University, Queens University of Charlotte, Butler University and the University of Dayton for a total of 31.   In the fourth quarter, Deltak contracted 24 new programs from among new and existing partners. Across Deltak’s partner base as of April 30, 2013 there are approximately 100 revenue-generating programs and 46 programs under contract and in development but not yet generating revenue.  Deltak’s business is in a period of significant growth in market development, providing a runway for continued high growth. During the fourth quarter, the Company received a commitment from Queens University of Charlotte for a campus-wide implementation of the Deltak Engage Learning Management system.
Alliances
In May 2012, Wiley announced a partnership with Quantum Simulations, Inc., a developer of intelligence-based education products and services, to offer intelligent adaptive learning and assessment software with Wiley’s print and digital accounting textbooks, starting with Introductory Accounting through Intermediate Accounting. Wiley and Quantum will combine advanced intelligence technology, proven pedagogical techniques and content expertise to create individualized learning paths for every student.
Total Shared Services and Administrative Costs

              % Change
 Dollars in thousands 2013 2012% Change    w/o FX
            
 Distribution $102,078  $109,079  -6%  -6% 
 Technology Services  159,063   144,418  10%  11% 
 Finance  43,822   45,106  -3%  -2% 
 Other Administration  87,281   89,394  -2%  -2% 
 Restructuring Charges (see Note 10)  14,557   -       
 Impairment Charges (see Note 11)  5,241   -       
 Total $412,042  $387,997  6%  7% 
Shared services and administrative costs for fiscal year 2013 increased 6% to $412.0 million mainly due to the restructuring and impairment charges ($20 million); higher technology consulting and maintenance costs ($11 million) including incremental costs from the Deltak acquisition ($2 million); and higher employment costs ($2 million), partially offset by lower journal and book distribution costs due to the migration from print to digital products ($4 million) and lower facility costs ($2 million).  Restructuring and impairment charges by shared service function: Distribution ($4 million), Technology Services ($10 million), Finance ($2 million) and Other Administration ($4 million).
Liquidity and Capital Resources – Fiscal year 2013LIQUIDITY AND CAPITAL RESOURCES:
 
The Company’s cashCash and cash equivalentsCash Equivalents balance was $334.1$363.8 million at the end of fiscal year 2013,2016, compared with $259.8$457.4 million a year earlier. Cash providedProvided by operating activitiesOperating Activities in fiscal year 20132016 decreased $42.6$5.2 million from fiscal year 2015 to $337.0$350.0 million principally due primarily to changes in operating assetsthe timing of vendor and liabilitiesroyalty payments ($3928 million); higher employee retirement plan contributions ($6 million); and lower net income net of non-cash chargeshigher royalty advance payments due to higher royalty rates on society owned journals and new society contracts ($75 million), partially offset by lower royalty advance payments ($3 million). 
Changes in operating assets and liabilities were primarily due to a disputed income tax deposit paid to German tax authorities as discussed in Note 13 ($42 million), lower income taxes payable due to timing of payments and a lower provision, and lower Accounts Payable ($10 million) due to cost containment.  Partially offsetting these were lowerannual incentive compensation payments ($1715 million),; lower inventoryincome 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 continued migrationimpact of transitioning to time-based digital products, higher Deferred Revenuejournal subscription agreements; foreign exchange; and lower Accounts Receivable due to improved collections and lower book revenue. The increase in Deferred Revenue mainly reflects business growth.timing of cash collections.
 
Cash usedUsed for investing activities forInvesting Activities in fiscal year 20132016 was approximately $342.5$151.4 million compared to $212.1 million in fiscal year 2012. The Company invested $263.3 million in acquisitions, net of cash acquired, compared to $92.2 million in the prior year primarily reflecting $220.5 million for the Deltak acquisition and $23.9 million for the ELS acquisition. During fiscal 2013 the Company received proceeds of $29.9 million from selling certain consumer publishing assets comprised primarily of the Travel program for $22 million, and the Culinary, CliffsNotes and Websters New World consumer publishing programs for $11 million, of which $3.3 million and $1.1 million remain in escrow, respectively. Cash used for technology, property and equipment decreased to $58.7 million in fiscal year 2013 compared to $67.4$279.7 million in the prior year.
Cash provided by financing activities was $90.4 Fiscal year 2015 includes the acquisition of CrossKnowledge (Corporate Learning) for approximately $166 million in fiscal year 2013, as compared to a usecash, net of $104.7 million in fiscal year 2012.cash acquired. The Company’s net debt (debt less cash and cash equivalents) increased $123.7 million from the prior fiscal end mainly due to funds borrowed to finance the acquisitions of Deltak and ELS.  These acquisitions wereacquisition was funded through the use of the existing credit facilityfacilities 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 net borrowings were $198.0which 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 $20.8$39.4 million in the prior year period.  Inyear. Cash used for technology, property and equipment was $93.7 million in fiscal year 2013,2016 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.
36
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 1,846,8731,432,284 shares of common stock at an average price of $48.86 compared to 1,082,502 shares at an average price of $39.92 compared to 1,864,700 shares at an average price of $46.69$57.26 in the prior year.  TheIn fiscal year 2016, the Company increased its quarterly dividend to shareholders by 20%3% to $0.24$0.30 per share in fiscal year 2013 from $0.20versus $0.29 per share in the prior year. ProceedsLower proceeds from the exercise of stock options mainly reflected lower stock option exercises increased $8.9 million to $24.2 million in fiscal 2013.
The notional amount ofyear 2016 compared to the interest rate swap agreement associated with the Term Loan and Revolving Credit Facility was $250 million as of April 30, 2013.  It is management's intention that the notional amount of the interest rate swap be less than the Term Loan and Revolving Credit Facility outstanding during the life of the derivative.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 March.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 September.October.
 
The Company has adequate cash and cash equivalents available, as well as short-term lines of credit to finance its short-term seasonal working capital requirements. The Company does not have any off-balance-sheet debt. Cash and Cash Equivalents held outside the U.S. were approximately $324.6$339 million as of April 30, 2013.2016. The balances in equivalent U.S. dollars were comprised primarily of Pound Sterling, Euros,pound sterling ($222 million), euros ($46 million), Singapore dollars ($19 million), U.S. dollars ($18 million), Australian dollars ($14 million), and Australian dollars.other ($20 million). Maintenance of these non-U.S. dollar cash and cash equivalent balances outside the U.S. does not have a material impact on the liquidity or capital resources of the Company.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 described in Note 14, on October 18, 2012 the Company increased its credit limit under the Revolving Credit Facility from $700 million to $825 million which matures on November 2, 2016.  As of April 30, 2013,2016, the Company had approximately $673.0$605 million of debt outstanding and approximately $162$602 million of unused borrowing capacity under theits Revolving Credit and other facilities. The Company believes that its operating cash flow, together with theits 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 ourits ability to access these markets on terms that are commercially acceptable.  The Company does not have any off-balance-sheet debt.
37
 
The Company’s working capital can be negative due to the seasonality of its businesses. 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; dividendsdividend payments; and purchasing treasury shares. The deferred revenue will be recognized inas income aswhen the products are shipped or made available online to the customers over the term of the subscription. Current liabilities as of April 30, 20132016 include $363.0$426.5 million of such deferred subscription revenue for which cash was collected in advance.
 
Projected capital spending for Technology, Property and Equipment and Composition for fiscal year 20142017 is forecast to be approximately $70$115 million and $49$50 million, respectively, primarilyrespectively. The increase in fiscal year 2017 Technology, Property and Equipment projected spending is mainly driven by investment in new enterprise resource systems to create newenable future operating efficiency gains and enhance existing digital productsspending to transform the Company’s Hoboken headquarters to enable consolidation and system functionality that will drive future business growth.productivity gains. Projected spending for author advances, which is classified as an operating activity, for fiscal year 20142017 is forecast to be approximately $110 million.
 
Fiscal Year 2012 Summary ResultsFISCAL YEAR 2015 SUMMARY RESULTS
 
Throughout this report, references to amounts “excluding foreign exchange”, “currency neutral basis” and “performance basis” exclude both foreign currency translation effects and transactional gains and losses. Foreign currency translation effects are based on the change in average exchange rates for each reporting period multiplied by the current period’s volume of activity in local currency for each non-U.S. location.  For fiscal years 2012 and 2011, the average exchange rates to convert British Pounds sterling to U.S. dollars were 1.59 and 1.56, respectively.  The average exchange rates to convert Euros into U.S. dollars for the same periods were 1.37 and 1.33, respectively.  Unless otherwise noted, all variance explanations below are on a currency neutral basis.
Revenue, Cost of Sales and Gross Profit:Revenue:
 
Revenue for fiscal year 20122015 increased 2%3% to $1,782.7$1,822.4 million, or 1%4% excluding the favorableunfavorable impact of foreign exchange. On a currency neutral basis,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 Research wasEducation 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 declineslower print book revenue in Professional Development (“PD”)all three businesses ($46 million).
Cost of Sales and Education.Gross Profit:
 
Cost of sales for fiscal year 2012 of $543.42015 decreased 1% to $499.7 million, increased 1%, but was flat excluding the unfavorablefavorable 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 margin for fiscal year 20122015 of 69.5%72.6% was 40120 basis points higher than prior year mainly due to increased sales ofcost savings from outsourcing and procurement initiatives and growth in digital products (90 basis points) and incremental revenue from higher margin digital products in PD and Research,acquisitions (60 basis points), partially offset by higher composition costs in Education to support business growth. Approximately 40% of the Company’s revenue for fiscal year 2012 was generated from digital products and services, as compared to 37% in the prior year.royalty rates on society owned journals (30 basis points).
 
Operating and Administrative Expenses:
 
Operating and administrative expenses for fiscal year 2012 of $922.22015 increased 4% to $1,005.0 million, were 1% higher than prior year, or flat5% excluding the unfavorablefavorable impact of foreign exchange. LowerThe 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 ($73 million); the expiration of a real estate tax incentive related to the Hoboken headquarters ($3 million) mainly dueand higher editorial costs in Research to accrued incentive compensation; lower distribution costssupport business growth ($42 million), partially offset by restructuring and other cost savings ($39 million) and lower travel and advertising costs due to cost containment initiativesaccrued incentive compensation ($312 million); were offset by higher technology costs ($13 million); and other ($1 million), mainly higher Research editorial costs to support business growth..
 
On February 16, 2011, Borders Group, Inc. (“Borders”
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Restructuring Charges:
In fiscal year 2013, the Company initiated a program (the “Restructuring and Reinvestment Program”) filedto restructure and realign its cost base with current and anticipated future market conditions. The Company is targeting a petition for reorganization relief under Chapter 11majority of the U.S. Bankruptcy Code. Accordingly,cost savings achieved to improve margins and earnings, while the remainder will be reinvested in high growth digital business opportunities.
In fiscal year 2011years 2015 and 2014, the Company recorded a pre-tax bad debt provisionrestructuring charges of $9.3$28.8 million or $6.0($0.34 per share) and $42.7 million after tax ($0.100.48 per share), within the PD reporting segmentrespectively, related to Borders.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 Development4,385 11,860 22,529
   Education1,571 891 3,580
   Shared Services18,293 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 consulting301 8,556 11,475
   Other activities11,410 8,204 21,742
Total Restructuring Charges$28,804 $42,722 $95,978
Other Activities mainly reflect lease and other contract termination costs. The provision representedcumulative charge recorded to-date related to the Restructuring and Reinvestment Program of $96.0 million is expected to be fully recovered by 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 outstanding receivable with Borders, netlonger-term enterprise systems plans. As a result, the Company recorded an asset impairment charge for previously capitalized software costs related to the program of existing reserves and recoveries. There were no additional charges or bad debt expense with respect to this customer.$4.8 million ($0.06 per share).
 
Amortization of Intangibles:
 
Amortization of intangibles increased $1.5$6.5 million to $36.8$51.2 million or $1.1 million excluding the unfavorable impact of foreign exchange.  The increasein fiscal year 2015 and was mainly driven by incremental amortization related to the Inscape acquisition.
Operating Income:
Operating income for fiscal year 2012 increased 13% to $280.4 million, or 6% excluding the unfavorable impact of foreign exchange and the prior year Borders bad debt provision mainly due to the top-line results and higher gross profit margins.Talent Solutions acquisitions in Professional Development.
 
Interest Expense/Income, Foreign Exchange and Other:
 
Interest expense for fiscal year 2012 decreased $8.32015 increased $3.2 million to $9.0$17.1 million. LowerThe increase was driven by higher interest rates and lowerhigher average debt contributed approximately $4.2 million and $4.1 million to the decrease, respectively.  Losses on foreign currency transactions primarily due to intercompany loansacquisition financing. The Company’s average cost of borrowing in currencies other than U.S. dollars were $2.3 million and $2.2 million for fiscal years 20122015 and 2011,2014 was 1.9% and 1.8%, respectively. Interest income and other forIn fiscal year 2012 increased $0.6 million to $3.02015, the Company recognized foreign exchange transaction gains of $1.7 million mainly duerelated to a favorable copyright infringement settlement received byU.S. dollar intercompany receivables in the Company in fiscal year 2012.U.K. and Germany.
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Provision for Income Taxes:
 
The effective tax rate for fiscal year 20122015 was 21.8%21.6% compared to 25.6%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 years 2012 and 2011,year 2014, the Company recorded non-cash deferred tax benefits of $8.8$10.6 million ($0.140.18 per share) and $4.2 million ($0.07 per share), respectively, principally associated with new tax legislation enacted in the U.K.United Kingdom (“U.K”) that reduced the U.K. statutory income tax rates by 2% and 1%, respectively.3%. The benefits recognized by the Company reflect the remeasurementmeasurement of all applicable U.K. deferred tax balances to the new income tax rates as of 21% effective April 1, 20122014 and 2011, respectively. In addition, in fiscal year 2012 due to20% effective April 1, 2015. Excluding the expirationimpact of the statute of limitations the Company also released
an income tax reserve of approximately $7.5 million ($0.12 per share) originally recorded in conjunction with the purchase accounting for the Blackwell acquisition.  Excluding the tax benefits described above, the Company’s effective tax rate for fiscal year 2012 was 27.8% compareddecreased from 23.3% to 27.4% in the prior year. The increase was mainly22.9% principally due to state net operating losshigher non-U.S. tax benefits of $1.9 million ($0.03 per share) recognized by the Company in the prior year,and lower U.K. income tax rates, partially offset by higherlower net tax benefits on non-U.S. earnings in the current year.reserve releases of $2.0 million.
 
Earnings Per Share:
 
Earnings per diluted share for fiscal years 2012 and 2011 were $3.47 and $2.80, respectively.year 2015 increased 10% to $2.97 per share. Excluding the effectsimpact of favorable foreign exchange ($0.08), the prior year Borders bad debt provision ($0.10), the changes in fiscal year 2012 and 2011 deferred tax benefits associated with the U.K. corporate income tax rates2015 ($0.07)0.34 per share) and the fiscal year 20122014 ($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 reserve releasebenefits and the unfavorable impact of foreign exchange ($0.12)0.11 per share), earnings per diluted share increased 11% or $0.30 per share.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 2012 Segment ResultsFISCAL YEAR 2015 SEGMENT RESULTS:
 
 Research:       
        % change 
 Dollars in thousands 2012 2011% change w/o FX 
 Journal Subscriptions $650,938  $621,551  5%  2% 
 Books  179,204   175,611  2%  1% 
 Other Publishing Income  210,585   201,740  4%  3% 
 TOTAL REVENUE $1,040,727  $998,902  4%  2% 
                
 Cost of Sales  (278,427)  (268,971) 4%  2% 
                
 GROSS PROFIT  762,300   729,931  4%  2% 
 Gross Profit Margin  73.2%   73.1%       
                
 Direct Expenses  (283,840)  (280,028) 1%  0% 
 Amortization of Intangibles  (26,186)  (25,106) 4%  4% 
                
 DIRECT CONTRIBUTION TO PROFIT $452,274  $424,797  6%  4% 
 Direct Contribution Margin  43.5%   42.5%       
                
 Allocated Shared Services and Administrative Costs:              
 Distribution  (47,995)  (52,101) -8%  -9% 
 Technology Services  (65,734)  (63,820) 3%  3% 
 Occupancy and Other  (21,085)  (17,820) 18%  16% 
 CONTRIBUTION TO PROFIT $317,460  $291,056  9%  6% 
 Contribution Margin  30.5%   29.1%       
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.
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   % change
RESEARCH:20152014% changew/o FX (a)
Revenue:    
Journal Revenue:    
Journal Subscriptions
 $672,218
 $675,266
0%1%
Author-Funded Access 22,388 17,67327%29%
Licensing, Reprints, Backfiles, and Other
 188,326
 177,2556%9%
Total Journal Revenue 882,932 870,1941%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 $1,044,3490%2%
     
Cost of Sales (275,487) (280,794)-2%-1%
     
Gross Profit $765,308 $763,5550%2%
Gross Profit Margin73.5%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 $479,1892%3%
Direct Contribution Margin46.8%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 $304,9964%5%
Contribution Margin30.3%29.2%  
(a)  Adjusted to exclude the fiscal year 2015 and 2014 Restructuring Charges
 
Revenue:
 
Research revenue for fiscal year 20122015 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).
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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
 20152014Revenuew/o FX
Revenue by Region:    
Americas$398,573 $408,00138%-2%
EMEA585,693 578,09956%4%
Asia-Pacific 56,529 58,2496%3%
Total Revenue $1,040,795 $1,044,349100%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 $1,040.7$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

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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):20152014% changew/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 Certification22,119 17,97523%23%
Other Knowledge Service Revenue 30,094 29,8841%1%
  307,971 330,822-7%-6%
Talent Solutions:    
Assessment $57,035 $33,04773%73%
Corporate Learning 42,017 -- 
  99,052 33,047200%200%
     
Total Revenue $407,023 $363,86912%13%
     
Cost of Sales (114,014) (111,911)2%3%
     
Gross Profit $293,009 $251,95816%17%
Gross Profit Margin72.0%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 $130,42710%8%
Direct Contribution Margin35.2%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 $22,61669%47%
Contribution Margin9.4%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.

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Revenue by Region is as follows:
  % of% change
 20152014Revenuew/o FX
Revenue by Region:    
Americas $288,882 $285,37671%2%
EMEA95,613 54,24023%78%
Asia-Pacific22,528 24,2536%-4%
Total Revenue $407,023 $363,869100%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.
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·  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.
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   % change
EDUCATION:20152014% changew/o FX (a)
Revenue:    
Books:    
Print Textbooks$144,500$163,152-11%-9%
Digital Books34,08630,13713%15%
 178,586193,289-8%-6%
     
Custom Materials50,65943,55616%16%
     
Course Workflow Solutions (WileyPLUS)54,20049,45910%11%
     
Online Program Management (Deltak)81,59370,17916%16%
     
Other Education Revenue9,58410,494-9%-9%
     
Total Revenue$374,622$366,9772%3%
     
Cost of Sales(110,182)(114,174)-3%-2%
     
Gross Profit$264,440$252,8035%6%
Gross Profit Margin70.6%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$124,1453%4%
Direct Contribution Margin34.1%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 Margin12.5%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.

46
Revenue by Region is as follows:
  % of% change
 20152014Revenuew/o FX
Revenue by Region:    
Americas $300,174 $288,32980%5%
EMEA 19,265 19,3345%0%
Asia-Pacific 55,183 59,31415%-2%
Total Revenue $374,622 $366,977100%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 growth was driven by journal subscriptions, books and other publishing income.
Journal Subscriptions
Journal subscription revenue for fiscal year 2012 increased 5% to $650.9 million, or 2% excluding the favorable impact of foreign exchange. The growthdecrease was mainly driven by increased subscriptionslower composition costs from lower cost digital products ($73 million), new society businesslower royalty costs due to product mix ($4 million) and the timing of production scheduling ($2 million). As of April 30, 2012, receipts for calendar year 2012 journal subscriptions grew approximately 3% over calendar year 2011 with approximately 95% of expected calendar year 2012 subscription receipts received.
Books
Book revenue for fiscal year 2012 increased 2% to $179.2 million, or 1% excluding the favorable impact of foreign exchange. The growth was driven by higher digital reference and eBook sales ($6 million) and lower returnsinventory obsolescence provisions ($21 million), partially offset by a declinehigher student recruitment costs in print booksOnline Program Management (Deltak) due to growth in new partners and programs ($53 million).
 
Other Publishing IncomeGross Profit:
Other publishing income
Gross Profit Margin for fiscal year 2012 of $210.6 million increased 4% over prior year, or 3% on a currency neutral basis. The improvement was driven by increased sales of rights ($5 million)2015 improved 170 basis points to 70.6% principally due to lower composition costs from lower cost digital products (70 basis points), journal advertising ($2 million)lower royalty costs due to product mix (60 basis points) and pay-per-view access ($2 million), partially offset by a decline in reprints ($1 million) and backfiles ($1 million)lower inventory obsolescence provisions (40 basis points).
 
Total Research Revenue by Region (on a currency neutral basis)Direct Expenses and Amortization:
·  
Americas grew 3% to $392.1 million
·  
EMEA grew 1% to $580.9 million
·  
Asia-Pacific grew 4% to $67.7 million
 
Cost of Sales:
Cost of sales for fiscal year 2012Direct Expenses increased 4%6% to $278.4$125.6 million, or 2%7% excluding the unfavorablefavorable impact of foreign exchange.  The increase was mainly driven by higher royalty rates, partially offset by the transition from print to digital products.
Gross Profit:
Gross profit margin for fiscal year 2012 improved 10 basis points to 73.2%.  The improvement was mainly driven by increased sales of higher margin digital products (50 basis points)costs associated with growth in Online Program Management (Deltak) partner programs ($12 million), partially offset by higher royalty rates (40 basis points).
Direct Expensesrestructuring and Amortization:
Direct expenses of $283.8 million increased 1% from the prior year, but was flat excluding the unfavorable impact of foreign exchange.  Lowerother cost savings ($2 million), lower accrued incentive compensation ($41 million) and lower travel and advertisingeditorial costs due to cost containment initiatives ($2 million) were offset by higher editorial costs ($3 million) and additional headcount ($2 million) to support business growth; and a bad debt provision related to an outstanding receivable with a university in Iranreduced title count ($1 million).
Amortization of intangibles increased $1.1Intangibles was $9.5 million to $26.2 million forin fiscal year 2012 mainly due to the acquisition of publication rights for new society journals.years 2015 and 2014.
 
Contribution to Profit:
 
Contribution to profit increased 9%Profit for fiscal year 2015 decreased 4% to $317.5$46.6 million, or 6%but was flat on a currency neutral basis and excluding the favorable impact of foreign exchange.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 improved 140Margin decreased 70 basis points to 30.5%12.5% in fiscal year 2012.2015, or 40 basis points on a currency neutral basis and excluding the Restructuring Charges. The improvementdecline was mainly driven by the top-line results andcontinued investment in Online Program Management (Deltak) program development, partially offset by higher gross profit margins.margins and restructuring and other cost savings.
Society Partnerships
·  24 new society journals were signed with combined annual revenue of approximately $9 million
·  103 renewals/extensions were signed with approximately $45 million in combined annual revenue
·  7 journals were not renewed in fiscal year 2012 which had combined annual revenue of approximately $1 million

 
47
 
New Society Contracts
·  
The Reading Teacher, Journal of Adolescent & Adult Literacy, and Reading Research Quarterly, for the International Reading Association
·  
TESOL Quarterly and TESOL Journal, for Teachers of English to Speakers of Other Languages (TESOL)
·  
The Hastings Center Report, a leading journal in applied ethics, covering areas such as bioethics and the environment
·  
Symbolic Interaction, for the Society for the Study of Symbolic Interaction
·  
International Journal of Pediatric Obesity, for the International Association for the Study of Obesity
·  
PsyCh Journal, for the Institute of Psychology, Chinese Academy of Sciences (IPCAS), China's national psychology research institute. The journal will be the first English-language Psychology journal to appear from China.
·  
Four new titles added to our existing partnership with the Policy Studies Organisation:  Policy & Internet, Poverty & Public Policy, Risk, Hazards & Crisis in Public Policy, and World Medical & Health Policy.
·  
European Journal of Pain for the European Federation of IASP Chapters (EFIC)
·  
Pharmacotherapy, for the American College of Clinical Pharmacists
·  
Rehabilitation Nursing Journal, for the Association of Rehabilitation Nurses (ARN)
·  
British Journal of Educational Technology, for the British Educational Research Association (BERA)
·  
Oceania and Archaeology in Oceania, for the University of Sydney
·  
Biology of the Cell for the French Society for Cell Biology and the French Society for Microscopy
·  
Journal of the American Heart Association for the American Heart Association – the first open access online-only journal for the AHA. The online journal has been launched on-time and on-budget. This is a new society relationship for Research.
·  
British Educational Research Journal (BERJ) and a new-start review journal for the British Educational Research Association (BERA). BERA is the largest educational research organization outside of the U.S., with 1,800 members.
·  
Obesity, for The Obesity Society
·  Journal for the Society for Information Display (SID)
SHARED SERVICES AND ADMINISTRATIVE COSTS:
 
Alliances
·  
Strategic alliance with CECity, Inc. to provide healthcare professionals with new, customized quality and learning solutions. CECity provides healthcare information technology platforms that link job performance improvement, lifelong learning, and quality reporting to drive high-quality clinical outcomes and patient care. This partnership will employ CECity’s market-leading technology capabilities with Wiley’s quality content to develop personalized eLearning and job performance improvementThe following table reflects total shared services for healthcare professionals. 
New Product and Service Launches
·  
In September 2011, Wiley launched the Wiley Job Network – a new online recruitment tool that enables employers to attract talented applicants from high-caliber users in science, technology, healthcare, law, and business. Recruiters and employers who advertise jobs on our network of career sites reach a large pool of talented professionals and specialists who are regular users of one of the world’s leading research platforms, Wiley Online Library.
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.
 
Digital Update
·  Digital revenue accounted for 61% of total Research revenue in fiscal year 2012.
·  The Wiley Job Network has surpassed 50,000 registered users and over 2 million job views since its launch in September.
·  
Total articles accessed on Wiley Online Library increased 26%.
    % Change
Dollars in thousands20152014% Changew/o FX (a)
Distribution and Operation Services$89,024$100,310-11%-10%
Technology and Content Management244,850240,7972%2%
Finance52,79654,191-3%-1%
Other Administration115,469104,80710%12%
Restructuring Charges (see Note 6)18,29322,197--
Impairment Charges (see Note 7)-4,786--
Total$520,432$527,088-1%1%
 
Research Journal Quality and Impact Factors
·  In June, Wiley announced that the number of journal titles with an impact factor in the Thomson ISI® 2010 Journal Citation Reports increased 7% to 1,087 titles, of which 317 are ranked in the top ten. Approximately 73% of Wiley’s journal portfolio has a reported impact factor.  Impact Factor is a leading evaluator of journal influence and impact, as it reflects the frequency that peer-reviewed journals are cited by researchers.
 Professional Development (PD):       
       % change 
 Dollars in thousands 2012  2011 % change w/o FX (a) 
 Books $371,689  $384,921  -3%  -4% 
 Online Training & Assessment  7,553   -       
 Other Publishing Income  48,320   46,077  5%  5% 
 TOTAL REVENUE $427,562  $430,998  -1%  -1% 
                
 Cost of Sales  (158,841)  (165,351) -4%  -4% 
                
 GROSS PROFIT  268,721   265,647  1%  1% 
 Gross Profit Margin  62.8%   61.6%       
                
 Direct Expenses  (154,549)  (159,047) -3%  -3% 
 Amortization of Intangibles  (5,741)  (5,279) 9%  9% 
 Additional Provision for Doubtful Trade Account (see Note 12)  -   (9,290)      
                
 DIRECT CONTRIBUTION TO PROFIT $108,431  $92,031  18%  7% 
 Direct Contribution Margin  25.4%   21.4%       
                
 Allocated Shared Services and Administrative Costs:              
 Distribution  (45,118)  (46,519) -3%  -4% 
 Technology Services  (25,248)  (23,858) 6%  5% 
 Occupancy and Other  (13,011)  (11,684) 11%  11% 
 CONTRIBUTION TO PROFIT $25,054   9,970  151%  32% 
 Contribution Margin  5.9%   2.3%       
(a)  Adjusted to exclude the fiscal year 2011 bad debt provision of $9.3 million related to Borders.2015 and 2014 Restructuring and fiscal year 2014 Impairment Charges
 
Revenue:
PD revenueShared Services and Administrative Costs for fiscal year 2012 declined2015 decreased 1% to $427.6 million. On$520.4 million, but increased 1% on a currency neutral basis book revenueand excluding the current and prior year Restructuring Charges and prior year Asset Impairment Charges.
Distribution and Operation Services costs decreased 4% to $371.7 million, while other publishing income grew 5% to $48.3 million.  The decline in book revenue was mainly driven by softness in the consumer line ($8 million) and declines in technology and business ($2 million).  The declines in consumer, technology and business were due to the residual effectsoutsourcing of the Borders’ bankruptcy, including liquidation sales which we believe were completed by mid-September and the inclusion of sales to Borders in the prior year, combined with a weak global economy and reduced shelf-space forcertain warehousing ($8 million), lower print titles.  Online training and assessment revenue includes the incremental revenue from the Company’s acquisition of Inscape on February 16, 2012volume ($3 million).  Growth in other publishing income is primarily due to increased revenue from advertising and distribution services.
Total PD revenue by Region (on a currency neutral basis)
·  
Americas were flat at $337.7 million
·  
EMEA fell 5% to $58.0 million
·  
Asia-Pacific fell 1% to $31.9 million
Total PD Revenue by Major Category (on a currency neutral basis)
·  
Business grew 2% to $141.6 million
·  
Consumer fell 6% to $123.1 million due in large part to Borders and the weak global economy
·  
Technology fell 1% to $87.1 million
·  
Professional Education was flat with the prior year at $28.0 million
·  
Architecture was flat with the prior year at $25.0 million
·  
Psychology declined 3% to $13.0 million
Cost of Sales:
Cost of sales for fiscal year 2012 declined 4% to $158.8 million reflecting the decline in book revenue.
Gross Profit:
Gross profit margin for fiscal year 2012 improved 120 basis points to 62.8%. The improvement was mainly driven by increased eBook sales (70 basis points), high margin incremental revenue from the Inscape acquisition (20 basis points) and lower composition costs (30 basis points).
Direct Expenses and Amortization:
Direct expenses for fiscal year 2012 decreased 3% to $154.5 million.  The improvement was principally driven by lower sales, marketing and advertising costs due to cost containment initiatives ($2 million), a reduction in the bad debt provision for other retail accounts ($21 million) and lower accrued incentive compensation ($1 million).
Amortization of intangibles Technology and Content Management costs increased $0.5 million to $5.7 million from fiscal year 2012 mainly due to acquired intangible assets associated with Inscape.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:
 
Contribution to Profit:
Contribution to profit forThe Company’s Cash and Cash Equivalents balance was $457.4 million at the end of fiscal year 2012 increased 151% to $25.12015, compared with $486.4 million or 32% on a currency neutral basis and excluding the Borders bad debt provision in the prior year.  Contribution margin for fiscal year 2012 was 5.9% as compared to 2.3% in the prior year.  On a currency neutral basis and excluding the Borders bad debt provision in the prior year, contribution margin improved 150 basis points reflecting higher gross profit margins and lower direct expenses.
Alliances
Wiley (Pfeiffer) partnered with CPP, a leader in research, training, and organizational development tools for a jointly developed Leadership Plus Report. The product, built on the integration of Wiley's Leadership Practices Inventory® (LPI®) and CPP's Myers-Briggs® personality assessment, combines the LPI's in-depth view of applied leadership behavior practices through 360-degree feedback with the Myers-Briggs self-evaluation and insight into personality.
Acquisitions
In February 2012, Wiley acquired Inscape Holdings, a leading global provider of workplace learning solutions, for approximately $85 million in cash, net of cash acquired. The acquisition will combine Wiley's reservoir of valuable content and global reach in leadership and training with Inscape's technology, distribution network, and talent expertise, including the innovative EPIC online assessment-delivery platform and an elite network of nearly 1,700 independent consultants, trainers, and coaches. Inscape was generating approximately $20 million annually in revenue prior to the acquisition.  Inscape derives approximately two-thirds of its revenue from digital products and services.
Consumer Divestiture
In March 2012, Wiley announced that it intends to explore opportunities to sell a number of its consumer print and digital publishing assets as they no longer align with the company’s long-term strategy. Fiscal Year 2012 revenue associated with the assets to be sold was approximately $80 million with a direct contribution to profit, before shared-service expenses, of approximately $6 million. Assets include travel (including the well-known Frommer’s brand), culinary, general interest, nautical, pets, crafts, Webster’s New World, and Cliff’s Notes.  Wiley will re-deploy resources in its Professional Development business to build on its global market-leading positions in business, finance, accounting, leadership, technology, architecture, psychology, education, and through the For Dummies brand.
Digital Update
·  Digital revenue includes eBooks, online advertising, content-enabled services and content licensing.
·  Digital revenue accounted for 15% of total PD revenue, up from 10% in the prior year.
·  eBook sales increased approximately 70% over prior year to approximately $40 million, or 9% of total PD revenue.  Strong eBook growth came from all accounts, notably Amazon, Barnes and Noble and Apple.
 Education:       
       % change 
 Dollars in thousands 2012  2011 % change w/o FX 
 Print Books $215,679  $219,082  -2%  -3% 
 Non-Traditional & Digital Content  88,006   83,893  5%  5% 
 Other Publishing Income  10,768   9,676  11%  6% 
 TOTAL REVENUE $314,453  $312,651  1%  -1% 
                
 Cost of Sales  (106,128)  (104,721) 1%  0% 
                
 GROSS PROFIT $208,325  $207,930  0%  -1% 
 Gross Profit Margin  66.2%   66.5%       
                
 Direct Expenses  (95,791)  (98,583) -3%  -4% 
 Amortization of Intangibles  (4,823)  (4,838) 0%  0% 
                
 DIRECT CONTRIBUTION TO PROFIT $107,711  $104,509  3%  2% 
 Direct Contribution Margin  34.3%   33.4%       
                
 Allocated Shared Services and Administrative Costs:              
 Distribution  (15,945)  (14,393) 11%  8% 
 Technology Services  (27,572)  (21,840) 26%  26% 
 Occupancy and Other  (5,771)  (5,179) 11%  8% 
 CONTRIBUTION TO PROFIT $58,423  $63,097  -7%  -9% 
 Contribution Margin  18.6%   20.2%       
Revenue:
Education revenue for fiscal year 2012 increased 1% to $314.5 million, but declined 1% excluding the favorable impact of foreign exchange. The decline reflects lower revenue from print books, partially offsetearlier.  Cash Provided by growth in non-traditional and digital content revenue and other publishing income.
Print Books
Print book revenue for fiscal year 2012 decreased 2% to $215.7 million, or 3% excluding the favorable impact of foreign exchange. The decline was driven by lower enrollments in for-profit institutions due to government scrutiny over recruiting practices, prior year rental stock build-up and lower demand outside the U.S.
Non-Traditional & Digital Content
Non-traditional and digital content revenue, which includes WileyPLUS, eBooks, digital content sold directly to institutions, binder editions and custom publishing, increased 5% to $88.0 millionOperating Activities in fiscal year 2012.  The growth was principally driven by2015 increased sales of custom textbooks and eBooks, which grew 36% over prior year.
Total Education Revenue by Region (on a currency neutral basis)
·  
Americas grew 1% to $226.9$6.9 million to $355.1 million
·  
EMEA fell 9% to $21.7 million
·  
Asia-Pacific fell 3% to $65.8 million
Total Education Revenue by Major Subject (on a currency neutral basis)
·  
Engineering and Computer Science fell 1% to $41.8 million
·  
Science grew 3% to $70.1 million
·  
Business and Accounting was flat with the prior year at $84.0 million
·  
Social Science declined 6% to $51.4 million
·  
Math fell 4% to $25.9 million
·  
Microsoft Official Academic Couse (MOAC) decreased 4% to $10.6 million
Cost of Sales:
Cost of sales increased 1% to $106.1 million, but was flat excluding the unfavorable impact of foreign exchange.
Gross Profit:
Gross profit margin for fiscal year 2012 declined 30 basis points to 66.4% principally due to higher composition costs.
Direct Expenseslower income tax payments ($18 million), lower income tax deposits paid to German tax authorities ($7 million), lower employee retirement plan contributions ($6 million) and Amortization:
Direct expenses for fiscal year 2012 decreased 3% to $95.8 million, or 4% excluding the unfavorable impact of foreign exchange. The decrease was mainly driven by lower employment costs mainly due to accrued incentive compensationroyalty advance payments ($5 million), partially offset by higher sales and marketing costs ($1 million).  Amortization of intangibles was flat for fiscal year 2012 at $4.8 million.
Contribution to Profit:
Contribution to profit for fiscal year 2012 decreased 7% to $58.4 million, or 9% excluding the favorable impact of foreign exchange. Contribution margin fell 160 basis points to 18.6% in fiscal year 2012 mainly due to higher technology and distribution costs.
Acquisitions and Alliances
·  
An alliance agreement was signed with Blackboard, which will provide instructors and students with direct access to WileyPLUS through the Blackboard learning management system. The collaboration will provide a seamless experience between Wiley course materials and the campus environment. In addition, thirty-one institutions are evaluating a new integration for using digital learning content from Wiley with Blackboard Inc.’s learning management system (LMS). The field trial gives students and faculty access to Wiley’s rich collection of learning content and tools directly within their online course environment. The field trial involves students, faculty and campus administrators across 42 courses at two and four-year higher education institutions in the U.S. and Canada. The integration is expected to be fully available globally in summer 2012. In March 2012, the Company signed a new partnership with the National Environmental Health Association (NEHA), MindLeaders, and Prometric to offer Food Safety training and certification. The three partners are leaders in their fields:  NEHA is a 70-year old association of health departments, concentrating on the inspection of restaurants and foodservice operations in the area of food safety; MindLeaders is a global e-Learning company; and Prometric is a worldwide leader in testing and certification.
·  Wiley acquired the newsletter National Teaching & Learning Forum (NTLF) and launched two 2012 NTLF issues on Wiley Online Library in March. The NTLF is a subscription fee-based newsletter that serves to “create a sustained and sustaining conversation about teaching and learning.”
Wiley Learning Institute

In February 2012, Wiley announced the launch of Wiley Learning Institute™ (www.WileyLearningInstitute.com), a new service center that provides essential knowledge, ideas, and best practices to promote professional learning for faculty and campus leaders. The online center leverages content, expertise, and resources from across Wiley's global businesses to enable them to excel in their work, fulfill the education mission of their institutions, and provide additional opportunities to enhance teaching and learning. Wiley Learning Institute employs the latest technologies to provide participants with interactive workshops, applied learning labs, one-on-one coaching programs, and an online, collaborative community of researchers, thought leaders, and professionals across multiple disciplines.
Digital Update
·  Digital revenue accounted for 16% of Education’s business in fiscal year 2012.
·  Revenue for WileyPLUS fell 2% to approximately $32 million mainly due to a sharp decline in for-profit enrolment.
·  eBook sales grew 36% to approximately $17 million.
Total Shared Services and Administrative Costs
                  % Change 
 Dollars in thousands 2012 2011 % Change       w/o FX 
              
 Distribution $109,079  $113,010   -3%   -5% 
 Technology Services  144,418   125,766   15%   14% 
 Finance  45,106   45,243   0%   -2% 
 Other Administration  89,394   89,170   0%   -1% 
 Total $387,997  $373,189   4%   3% 
Shared services and administrative costs for fiscal year 2012 increased 4% to $388.0 million, or 3% excluding the unfavorable impact of foreign exchange.  The increase mainly reflects higher technology costs to support investments in digital products and infrastructure ($13 million) and higher employment costs due to new hires and merit increases ($7 million). These increases were partially offset by lower accruedannual incentive compensation payments ($620 million), lower distribution costs duehigher payments related to the continued migration from print to digital productsCompany’s restructuring programs ($4 million) and other ($1 million),working capital changes mainly lower professional fees.due to timing.
Liquidity and Capital Resources – Fiscal year 2012
 
The Company’s cash and cash equivalents balance was $259.8 million at the end of fiscal year 2012, compared with $201.9 million a year earlier. Cash provided by operating activitiesUsed for Investing Activities in fiscal year 2012 increased $4.0 million to $379.6 million due primarily to higher net income net of non-cash charges ($24 million), mostly offset by changes in operating assets and liabilities ($13 million) and higher royalty advance payments ($7 million). 
Changes in operating assets and liabilities were primarily due to lower accrued expenses ($29 million) principally accrued incentive compensation; lower Deferred Revenue ($13 million) and lower royalties payable ($7 million) due to higher royalty advance payments, partially offset by lower Accounts Receivable ($15 million) due to improved collections, higher income taxes payable ($12 million) and lower inventories ($3 million). The decrease in Deferred Revenue reflects the timing of subscription cash collections primarily due to accelerated collections in the prior year.
Cash used for investing activities for fiscal year 20122015 was approximately $212.0$279.7 million compared to $113.0 million in fiscal year 2011. The Company invested $92.2 million in the acquisition of publishing businesses, assets and rights compared to $7.2$149.3 million in the prior year. Fiscal year primarily reflecting2015 includes the $85acquisition of CrossKnowledge for approximately $166 million paidin cash, net of cash acquired, while fiscal year 2014 includes the acquisition of Profiles for the Inscape acquisition (See Note 4). This acquisition wasapproximately $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.
48
Composition spending was $39.4 million in fiscal year 2015 compared to $40.6 million in the prior year. The decrease reflects lower spending in Education and Research due to cost reduction efficiencies and lower planned title volume. Cash used for technology, property and equipment increased $12.9was $69.1 million in fiscal year 2012 versus2015 compared to $57.6 million in the prior yearyear.  The increase mainly reflecting increased investmentsreflects Deltak curriculum development costs due to growth in technology to support new productspartners and business growthprograms ($5 million), incremental capital spending for CrossKnowledge ($4 million), and leasehold improvementscapital spending on new facilities. leased facilities ($2 million).
 
Cash used in financing activitiesUsed for Financing Activities was $104.7$61.0 million in fiscal year 2012,2015 as compared to $230.0$53.5 million in fiscal year 2011.the prior year. The Company’s net debt (debt less cash and cash equivalents) decreased $37.2increased $78.9 million from the prior fiscal year end.principally to fund the CrossKnowledge acquisition ($166 million). During fiscal year 2012,2015, net debt borrowings were $20.8$47.7 million compared to net payments of $194.8$27.1 million in the prior year period.  In fiscal 2012, cash was used primarily to fund the Inscape acquisition, repurchase treasury shares and pay dividends to shareholders, partially offset by proceeds on stock option exercises. In fiscal year 2012, the Company repurchased 1,864,700 shares at an average price of $46.69 compared to 577,405 shares at an average price of $48.42 in the prior year.  The Company increased its quarterly dividend to shareholders by 25% to $0.20 per share in fiscal year 2012 from $0.16 per sharetotal notional amount of the interest rate swap agreements associated with the Company’s revolving credit facilities was $300 million as of April 30, 2015.
To take advantage of more favorable interest rates available in the prior year. Proceeds from stock option exercises decreased $12.5 million to $15.3 million in fiscal 2012.
On November 2, 2011,current market, on December 22, 2014, the Company amended and restated itsentered 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 credit facilityagreement with Bank of America - Merrill Lynch and The Royal Bank of Scotland plc, and TD Bank, N.A.. The facility was fully drawn as joint lead arrangers and Bank of America as administrative agent.April 30, 2015. The new agreement consistsborrowing rate is LIBOR plus a margin of a $700 million five-year senior revolving credit facility, which can be drawn in multiple currencies.1.00%. The proceeds of the new revolving credit facility were used to pay downa portion of the Company’s priorexisting revolving credit facilityfacilities 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 Company also has the option to requestRoyal Bank of Scotland plc, and Santander Bank. The new agreement consists of a credit limit increase of up to $250 million in minimum increments of $50 million subject364-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 approval of the lenders.Company consolidated leverage ratio, as defined. The amended credit agreement contains certain restrictive covenants related to the Company’s consolidated leverage ratio and interest coverage ratio. Due to the fact that there are no principal payments due until the end of the amended agreement in fiscal year 2017,ratio, which the Company has classified its entire debt obligation as long-termwas in compliance with as of April 30, 2012. See Note 14 for further discussion2015. The proceeds of the debt arrangement.new revolving credit facility were used to pay a portion of the Company’s existing revolving credit facility and meet seasonal operating cash requirements.
 
The aggregate notional amountDuring fiscal year 2015, the Company repurchased 1,082,502 shares of interest rate swap agreements associated withcommon stock at an average price of $57.26 compared to 1,248,030 shares at an average price of $50.79 in the Term Loan and Revolving Credit Facility were $375.0 million asprior 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 April 30, 2012.  It is management's intention thatstock options reflect a lower volume of stock option exercises in fiscal year 2015 compared to the notional amount of the interest rate swap be less than the Term Loan and Revolving Credit Facility outstanding during the life of the derivatives.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 March.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 September.October.
 
The Company has adequate cash and cash equivalents available, as well as short-term lines of credit to finance its short-term seasonal working capital requirements. The Company does not have any off-balance-sheet debt.
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Cash and Cash Equivalents held outside the U.S. were approximately $253.7$411.6 million as of April 30, 2012.2015. The balances in equivalent U.S. dollars were comprised primarily of Euros, Pound Sterling,pound sterling ($256 million), euros ($73 million), Australian dollars ($45 million), Singapore dollars ($34 million) and Australian dollars.other ($4 million). Maintenance of these non-U.S. dollar cash and cash equivalent balances outside the U.S. does not have a material impact on the liquidity or capital resources of the Company.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, 2012,2015, the Company had approximately $475.0$750.1 million of debt outstanding and approximately $235$302.9 million of unused borrowing capacity under theits Revolving Credit Facility which is described in Note 14 and matures on November 2, 2016. We believeother facilities. The Company believes that ourits operating cash flow, together with ourits revolving credit facilities and other available debt financing, will be adequate to meet ourits 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 ourits ability to access these markets on terms commercially acceptable to us or at all.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 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; dividendsdividend payments; and purchasing treasury shares. The deferred revenue will be recognized inas income aswhen the products are shipped or made available online to the customers over the term of the subscription. Current liabilities as of April 30, 20122015 include $342.0$372.1 million of such deferred subscription revenue for which cash was collected in advance.
 
Critical Accounting Policies and EstimatesCRITICAL ACCOUNTING POLICIES AND ESTIMATES:
 
The preparation of the Company’s financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, 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 the basis for its estimates. Actual results could differ from those estimates, which could affect the reported results. Note 2 of the “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 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 of the above criteria have been met, revenue is recognized upon shipment of products or when services have been rendered. Subscription revenue isRevenue related to journal subscriptions and other products and services that are generally collected in advance. The prepayment isadvance are deferred and recognized as earned primarilyover the term of the subscription; when the related issue is shipped orshipped; made available online overonline; or the term of the subscription.  For calendar year 2013, the Company piloted an alternative journal
subscription license model for a group of customers.  Previously, those customers’ licenses were based on a commitment by the Company to provide a discrete number of online journal issues which provided for recognition of revenue by the Company as issues were published.  Under this alternative model, the Company provides access to all content publishedservice is rendered, in the calendar year and provides for recognition of revenue on a straight-line basis over the calendar year covered by the alternative license model.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.
 
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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 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 teaching and learning environmentcourse management tool for the Company’s Education business which also includes a complete print or digital textbook for the course, as well ascourse; negotiated licenses for bundles of electronicdigital content available on Wiley Online Library,, the online publishing platform for the Company’s Research business.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.
 
WhenThe Company enters into contracts for the Company’s electronicresale of its content is sold through a third party where the Company is generally not the primary obligor withinof the arrangement sincebecause it typically is not responsible for fulfilling the customer’s order ororder;  handling any customer requests or claims. Accordingly, theclaims and/or maintains credit risk. The Company will recognizerecognizes revenue for the sale of its electronic content, through third parties based on the amount billed to the end customer, net of any commission owed to the third party seller of the content.  Revenue is also reported net of any amounts billed to customers foror taxes which are remitted to government authorities.
 
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 in the Consolidated Statements of Financial Position and amounted to $7.4$7.3 million and $6.9$8.3 million as of April 30, 20132016 and 2012,2015, 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 in which we operate. Associated with the estimated sales return reserves, the Company also includes a related reduction in inventory and royalty costs as a result of the expected returns.
Net print book sales return reserves amounted to $31.8$19.9 million and $35.8$25.3 million as of April 30, 20132016 and 2012,2015, respectively. The reserves are reflected in the following accounts of the Consolidated Statements of Financial Position – increase (decrease):
   2013  2012 
 Accounts Receivable $(44,279) $(48,612)
 Inventory  6,862   7,246 
 Accounts and Royalties Payable  (5,583)  (5,593)
 Decrease in Net Assets $(31,834) $(35,773)
 20162015
Accounts Receivable$(29,447)$(37,300)
Inventories4,9246,555
Accounts and Royalties Payable(4,662)(5,405)
Decrease in Net Assets$(19,861)$(25,340)
 
The decrease in the sales return reserve was principally driven by the Company’s continuing migration to eBooks and lower print sales, including the divested consumer publishing titles. A one percent change in the estimated sales return rate could affect net income by approximately $2.9$2.0 million. A change in the pattern or trends in returns could affect the estimated allowance.
 
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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 InventoryInventories balance in the Consolidated Statements of Financial Position and amounted to $28.2$22.0 million and $33.9$21.9 million as of April 30, 20132016 and 2012,2015, respectively.  The decrease in the inventory obsolescence reserve was principally driven by the divestment of Professional Development consumer publishing programs in fiscal year 2013 as discussed in Note 5.
 
Allocation of Acquisition Purchase Price to Assets Acquired and Liabilities Assumed: In connection with acquisitions, the Company allocates 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, current market trends, and synergies to be achieved from the acquisition and expected tax basis of assets acquired. The Company may use an independent appraisera third party valuation consultant to assist in the determination of such estimates.
 
Goodwill and Indefinite-lived Intangible Assets: Goodwill is the excess of the purchase price paid over the fair value of the net assets of the business acquired.  IntangibleIndefinite-lived intangible assets principallyprimarily consist of brands, trademarks, content and publicationpublishing rights customer relationships and non-compete agreements.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 frequently 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 valuesvalue of the Company’sintangible asset to its carrying value.
To evaluate the recoverability of goodwill, the Company primarily uses a two-step impairment test approach at the reporting unitsunit 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.
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 substantially in excessconsidered to determine whether it is more likely than not that the fair value of theira reporting unit is less than its carrying values.amount. If that is the case, the two-step approach described above is then performed to evaluate the recoverability of goodwill.
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 of these intangibles is 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.
 
Impairment of Long-Lived Assets:
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Intangible assets with finite lives are amortized on a straight line basis over the following weighted average estimated useful lives: content and publishing rights – 31 years; customer relationships – 20 years; brands and trademarks – 13 years; non-compete agreements – 4 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 defined benefit pension plans for the majority of itscertain employees worldwide. The Company’s 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, long-term return rates on pension plan assets, healthcare cost trends, discount rates and other factors. In determining such assumptions, the Company consults with outside actuaries and other advisors. The discount rates for the U.S., United Kingdom and Canadian pension plans are based on the derivation of a single-equivalent discount rate using a standard spot rate curve and the timing of expected payments as of the balance sheet date. The spot rate curve is based upon 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 with durations comparable to that of each 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 historical experience and future outlook. While the Company believes 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 defined benefit pension plans of the Company. A hypothetical one percent changeincrease in the discount rate would impact net income and the accrued pension liability by approximately $6.7$1.5 million and $121.7$143.3 million, respectively. A one percent decrease in the discount rate would impact net income and the accrued pension liability by approximately $1.2 million and $178.6 million, respectively. A one percent change in the expected long term rate of return would affect net income by approximately $2.7$3.7 million.
 
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Recently Issued Accounting StandardsStandards:
In March 2016, the FASB issued ASU 2016-09 “Compensation-Stock Compensation (Topic 718): There have been noImprovements 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 standards issuedpolicy election to account for forfeitures when they occur or to estimate the number of awards that have had, or 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 a material impact on the Company’sits 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.
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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 13,12, as of April 30, 20132016 is as follows (in thousands):
    Payments Due by Period     Payments Due by Period 
    Within  2-3   4-5   After 5  Within2-34-5After 5
 Total   Year 1        Years Years  Years TotalYear 1Years
                  
Total Debt $673.0  $-  $-  $673.0  $- $605.0$        -$605.0$        -
                    
Interest on Debt1
 $35.1  $10.6  $19.7  $4.8  $- 50.711.620.418.7-
                    
Non-Cancelable Leases $230.5  $41.1  $75.3  $59.4  $54.7 328.235.247.346.4199.3
                    
Minimum Royalty Obligations $289.3  $69.7  $116.4  $78.2  $25.0 257.483.497.455.021.6
                    
Other Operating Commitments $31.3  $5.9  $13.0  $12.4  $- 71.730.530.011.2-
Total $1,259.2  $127.3  $224.4  $827.8  $79.7 $1,313.0$160.7$195.1$736.3$220.9
 
1 Interest 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, 20132016 remain constant until the maturity of the debt.
 
Item 7A.7A.  Quantitative and Qualitative Disclosures Aboutabout Market Risk
 
The Company is exposed to market risk primarily related to interest rates, foreign exchange and credit risk. It is the Company’s policy to monitor these exposures and to use derivative financial investments and/or insurance contracts from time to time to reduce fluctuations in earnings and cash flows when it is deemed appropriate to do so. The Company does not use derivative financial instruments for trading or speculative purposes.
 
Interest Rates:
 
The Company had $673.0$605.0 million of variable rate loans outstanding at April 30, 2013,2016, which approximated fair value. 
On MarchApril 4, 2016, the Company 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 will pay a fixed rate of 0.92% and receives 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, 2012,2016, the notional amount of the interest rate swap was $350.0 million.
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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 0.645%0.65% and receives a variable rate of interest based on one monthone-month LIBOR (as defined) from the counterparty which is reset every month for a three-yeartwo-year period ending March 31, 2015.August 15, 2016. As of April 30, 2013,2016, the notional amount of the interest rate swap was $250.0$150.0 million.
 
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. During fiscal year 2013,2016, the Company recognized a loss on its hedge contracts of approximately $1.6$0.9 million which is reflected in Interest Expense in the Consolidated Statements of Income. At April 30, 2013,2016, the fair value of the outstanding interest rate swapswaps was a deferred loss of $1.6$0.6 million. Based on the maturity dates of the contracts, approximately $0.1 million and $0.5 million of the deferred loss was recorded in Other Accrued Liabilities and Other Long-Term Liabilities, in the Consolidated Statements of Financial Position.respectively. On an annual basis, a hypothetical one percent change in interest rates for the $423.0$455 million of unhedged variable rate debt as of April 30, 20132016 would affect net income and cash flow by approximately $2.6$0.7 million.
 
Foreign Exchange Rates:
 
Fluctuations in the currencies of countries where the Company operates outside the U.S. may have a significant impact on financial results. The Company is primarily exposed to movements in British pound sterling, euros, Canadian and Australian dollars, and certain currencies in Asia. The Statements of Financial Position of non-U.S. business units are translated into U.S. dollars using period-end exchange rates for assets and liabilities and weighted-average exchange rates for revenues and expenses. FiscalThe percentage of Consolidated Revenue for fiscal year 2013 revenue was2016 recognized in the following currencies:currencies (on an equivalent U.S. dollar basis) were: approximately 56%57% U.S dollar; 27%28% British pound sterling; 8% euro and 9%7% other currencies.
 
The Company’s significant investments in non-U.S. businesses are exposed to foreign currency risk.  Adjustments resulting from translating assets and liabilities are reported as a separate component of Accumulated Other Comprehensive Loss within Shareholders’ Equity under the caption Foreign Currency Translation Adjustment.  During fiscal year 2013,2016, the Company recorded foreign currency translation losses in other comprehensive income of approximately $38.6$21.1 million primarily as a result of the strengtheningweakening of the U.S. dollar relative to the British pound sterling and euro.sterling.
 
Exchange rate gains or losses related to foreign currency transactions are recognized as transaction gains or losses in the Consolidated Statements of Income as incurred. Under certain circumstances, the Company may enter into derivative financial instruments in the form of foreign currency forward contracts to hedge against specific transactions, including intercompany purchases and loans. The Company does not use derivative financial instruments for trading or speculative purposes.
The Company may enter into forward exchange contracts to manage the Company’s exposure on certain foreign currency denominated assets and liabilities. The forward exchange contracts are marked to market through Foreign Exchange Transaction Gains and Losses on the Consolidated Statements of Income, and carried at their fair value on the Consolidated Statements of Financial 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 Gains and Losses. As of April 30, 2013, there was one2016 and 2015, the Company had two open forward exchange contractcontracts with a notional amount in U.S. dollarsamounts of approximately $30.0 million.  The31 million Euros and 274 million Pound Sterling to hedge intercompany loans. As of April 30, 2015, the Company did not maintain any open forward contracts as of April 30, 2012.contracts. During fiscal years 20112014 through 2013,2016, 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. As of April 30, 2013,2016, the fair value of the open forward contractexchange contracts was a gain of approximately $0.1$1.3 million which was measured on a recurring basis using Level 2 inputs and recorded within the Prepaid and Other lineLine item onin the Consolidated Statements of Financial Position. For fiscal years 2013, 20122016, 2015 and 2011,2014, the gains/gains (losses) recognized on the forward contracts were $(0.6)$1.3 million, $2.4$(11.2) million, and $0.6$(0.4) million, respectively.
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Customer 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 between the months of December and March.April. Although at fiscal year-end the Company 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 24%22% of total annual consolidated revenue and no one agent accounts for more than 10%11% of total annual consolidated revenue.
 
The Company’s booknon-journal subscription business is not dependent upon a single customer; however, the industry is concentrated in national, regional, and online bookstore chains.customer. Although no one booknon-journal customer accounts for more than 10%9% of total consolidated revenue and 14%12% of accounts receivable at April 30, 2013,2016, the top 10 booknon-journal customers account for approximately 19%16% of total consolidated revenue and approximately 38%26% of accounts receivable at April 30, 2013.2016. The Company maintains approximately $25 million of trade credit insurance, subject to certain limitations, covering balances due from certain named customers which expires in May, 2017.
 
Disclosure of Certain Activities Relating to Iran:
 
The European Union, Canada and United States have imposed sanctions on business relationships with Iran, including restrictions on financial transactions and prohibitions on direct and indirect trading with listed “designated persons.”  In fiscal year 2013,2016, the Company recorded revenue and net profits of approximately $0.2$2.8 million and $0.1$0.7 million, respectively, related to the sale of scientific and medical content to certain publicly funded universities, hospitals and institutions that meet the definition of the “Government of Iran” as defined under section 560.304 of title 31, Code of Federal Regulations. The Company has assessed its business relationship and transactions with Iran and believes it is in compliance with the regulations governing the sanctions.  The Company intends to continue in these or similar sales as long as they continue to be consistent with all applicable sanctions-related regulations.

 
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“Safe Harbor” Statement Under the
Private Securities Litigation Reform Act of 1995
 
This report contains certain forward-looking statements concerning the Company’s operations, performance, and financial condition. Reliance should not be placed on forward-looking statements, as actual results may differ materially from those in any forward-looking statements.  Any such forward-looking statements are based upon a number of assumptions and estimates that are inherently subject to uncertainties and contingencies, many of which are beyond the control of the Company, and are subject to change based on many important factors. Such factors include, but are not limited to (i) the level of investment in new technologies and products; (ii) subscriber renewal rates for the Company’s journals; (iii) the financial stability and liquidity of journal subscription agents; (iv) the consolidation of book wholesalers and retail accounts; (v) the market position and financial stability of key retailers; (vi) the seasonal nature of the Company’s education business and the impact of the used-book market; (vii) worldwide economic and political conditions; (viii) the Company’s ability to protect its copyrights and other intellectual property worldwide; (ix) the ability of the Company to successfully integrate acquired operations and realize expected opportunities and (x) other factors detailed from time to time in the Company’s filings with the Securities and Exchange Commission. The Company undertakes no obligation to update or revise any such forward-looking statements to reflect subsequent events or circumstances.


 
58
 

Item 8.  Financial Statements and Supplementary Data

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, 2013.2016.
 
Changes in Internal Control over Financial Reporting: There
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/locations and will continue to roll out the ERP in phases over the next three years.
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 2013.2016.
 
The effectiveness of our internal control over financial reporting as of April 30, 20132016 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/ Stephen M. Smith /s/ Mark Allin 
Stephen M. SmithMark Allin 
President and
Chief Executive Officer 
  
59
 /s/ Ellis E. Cousens 
Ellis E. Cousens/s/ John A. Kritzmacher
John A. Kritzmacher
Chief Financial Officer and 
Executive Vice President, and
Chief FinancialTechnology and Operations Officer 
  
 /s//s/ Edward J. Melando 
Edward J. Melando 
Senior Vice President, Controller and 
Chief Accounting Officer 
  
June 26, 201329, 2016 

 


 
60
 
 Report of Independent Registered Public Accounting Firm
 
The Board of Directors and Shareholders
John Wiley & Sons, Inc.:
 
We have audited the accompanying consolidated statements of financial position of John Wiley & Sons, Inc. (the “Company”) and subsidiaries as of April 30, 20132016 and 2012,2015, and 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, 2013.2016. In connection with our audits of the consolidated financial statements, we also have audited Schedule II on Page 94 of this Form 10-K. 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 conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
 
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of John Wiley & Sons, Inc. and subsidiaries as of April 30, 20132016 and 2012,2015, and the results of their operations and their cash flows for each of the years in the three-year period ended April 30, 2013,2016, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.
 
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), John Wiley & Sons, Inc.’s internal control over financial reporting as of April 30, 2013,2016, 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 26, 201329, 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 26, 201329, 2016
 


 
61
 
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 internal control over financial reporting as of April 30, 2013,2016, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). John Wiley & Sons, Inc.’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 on 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). 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 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.
 
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.
 
In our opinion, John Wiley & Sons, Inc. maintained, in all material respects, effective internal control over financial reporting as of April 30, 2013,2016, based on criteria established in Internal Control – Integrated Framework (2013) issued by the 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), the consolidated statements of financial position of John Wiley & Sons, Inc. and subsidiaries as of April 30, 20132016 and 2012,2015, and 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, 2013,2016, and our report dated June 26, 201329, 2016 expressed an unqualified opinion on those consolidated financial statements.
 
(signed) KPMG LLP
 
Short Hills, New Jersey
June 26, 201329, 2016

 
62
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.
63
 
 CONSOLIDATED STATEMENTS OF FINANCIAL POSITION 
 John Wiley & Sons, Inc., and Subsidiaries            April 30 
 Dollars in thousands               2013 2012
 Assets:      
 Current Assets      
 Cash and cash equivalents $334,140  $259,830 
 Accounts receivable  161,731   171,561 
 Inventories  82,017   101,237 
 Prepaid and other  57,083   41,972 
 Total Current Assets  634,971   574,600 
          
 Product Development Assets  87,876   108,414 
 Technology, Property & Equipment  189,625   187,979 
 Intangible Assets  954,957   915,495 
 Goodwill  835,540   690,619 
 Other Assets  103,406   55,839 
 Total Assets $2,806,375  $2,532,946 
          
 Liabilities and Shareholders’ Equity:        
 Current Liabilities        
 Accounts and royalties payable $143,313  $151,350 
 Deferred revenue  362,970   342,034 
 Accrued employment costs  85,306   64,482 
 Accrued income taxes  16,093   18,812 
 Accrued pension liability  4,359   3,589 
 Other accrued liabilities  55,128   60,663 
 Total Current Liabilities  667,169   640,930 
          
 Long-Term Debt  673,000   475,000 
 Accrued Pension Liability  204,362   145,815 
 Deferred Income Tax Liabilities  197,526   181,716 
 Other Long-Term Liabilities  75,962   71,917 
 Shareholders’ Equity        
 Preferred Stock, $1 par value: Authorized - 2 million, Issued - zero  -   - 
 Class A Common Stock, $1 par value: Authorized - 180 million,        
 Issued – 69,793,194 and 69,753,370  69,793   69,753 
 Class B Common Stock, $1 par value:  Authorized - 72 million,        
 Issued – 13,397,068 and 13,436,892  13,397   13,437 
 Additional paid-in capital  290,762   271,809 
 Retained earnings  1,387,512   1,300,713 
 Accumulated other comprehensive loss:        
 Foreign currency translation adjustment  (134,539)  (95,981)
 Unamortized retirement costs, net of tax  (143,124)  (103,381)
 Unrealized loss on interest rate swap, net of tax  (969)  (1,048)
    1,482,832   1,455,302 
 Less Treasury Shares At Cost (Class A – 20,616,829 and 19,771,896;        
 Class B – 3,902,576 and 3,902,576)  (494,476)  (437,734)
 Total Shareholders’ Equity  988,356   1,017,568 
 Total Liabilities and Shareholders’ Equity $2,806,375  $2,532,946 
   
 The accompanying notes are an integral part of the consolidated financial statements. 
 
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.



 
64

 
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.

65
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

66
 

 CONSOLIDATED STATEMENTS OF INCOME 
   
 John Wiley & Sons, Inc., and Subsidiaries For the years ended April 30, 
 Dollars in thousands, except per share data 2013  2012  2011 
           
 Revenue $1,760,778  $1,782,742  $1,742,551 
              
 Costs and Expenses            
 Cost of sales  532,232   543,396   539,043 
 Operating and administrative expenses  933,148   922,177   910,847 
 Restructuring charges  29,293   -   - 
 Impairment charges  30,679   -   - 
 Additional provision for doubtful trade account  -   -   9,290 
 Amortization of intangibles  41,982   36,750   35,223 
 Total Costs and Expenses  1,567,334   1,502,323   1,494,403 
              
 Net Gain on Sale of Consumer Publishing Programs  5,983   -   - 
              
 Operating Income  199,427   280,419   248,148 
              
 Interest expense  (13,078)  (9,038)  (17,322)
 Foreign exchange transaction losses  (2,041)  (2,261)  (2,188)
 Interest income and other  2,614   2,975   2,422 
              
 Income Before Taxes  186,922   272,095   231,060 
 Provision for Income Taxes  42,697   59,349   59,171 
              
 Net Income $144,225  $212,746  $171,889 
              
 Earnings Per Share            
 Diluted $2.39  $3.47  $2.80 
 Basic  2.43   3.53   2.86 
              
 Cash Dividends Per Share            
 Class A Common $0.96  $0.80  $0.64 
 Class B Common  0.96   0.80   0.64 
              
 Average Shares            
 Diluted  60,224   61,272   61,359 
 Basic  59,447   60,184   60,160 
   
 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 Conversions5(5)    -
Comprehensive Income   160,510 88,341248,851
        
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.



 
67
 


 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME 
   
 John Wiley & Sons, Inc., and Subsidiaries For the years ended April 30, 
 Dollars in thousands 2013  2012  2011 
           
 Net Income $144,225  $212,746  $171,889 
              
 Other Comprehensive Income/(Loss):            
 Foreign currency translation adjustment  (38,558)  (30,173)  76,923 
 
        Unamortized retirement costs, net of tax benefit/
(provision) of $16,145; $18,463 and ($7,490), respectively
  (39,743)  (41,745)  19,317 
 
Unrealized gain/(loss) on interest rate swaps,
net of tax benefit/(provision) of ($62); $453 and ($2,208), respectively
  79   (751)  3,665 
 Total Other Comprehensive Income/(Loss)  (78,222)  (72,669)  99,905 
              
 Comprehensive Income $66,003  $140,077  $271,794 
              
 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 2013  2012  2011 
 Operating Activities         
 Net Income $144,225  $212,746  $171,889 
 Adjustments to reconcile net income to net cash provided by operating activities            
 Amortization of intangibles  41,982   36,750   35,223 
 Amortization of composition costs  51,517   50,944   51,421 
 Depreciation of technology, property and equipment  56,017   50,397   45,862 
 Restructuring  and impairment charges  59,972   -   - 
 Net gain on sale of consumer publishing programs  (5,983)  -   - 
 Stock-based compensation  11,928   17,262   17,719 
 Excess tax benefits from stock-based compensation  (193)  (2,044)  (4,816)
 Reserves for returns, doubtful accounts, and obsolescence  987   (3,736)  13,739 
 Non-cash deferred tax benefits on U.K. rate changes  (8,402)  (8,769)  (4,155)
 Other changes in deferred income taxes  (8,846)  11,799   9,862 
 One-time tax charge/(benefit) on tax reserves  2,110   (7,524)  - 
 Foreign exchange transaction losses  2,041   2,261   2,188 
 Pension expense  26,755   20,975   25,633 
 Royalty advances  (105,335)  (108,716)  (101,702)
 Earned royalty advances  100,691   100,639   93,016 
 Changes in Operating Assets and Liabilities            
 Source/(Use), excluding acquisitions            
 Accounts receivable  18,118   9,605   (5,584)
 Inventories  11,501   4,467   7,453 
 Accounts and royalties payable  (5,748)  540   6,425 
 Deferred revenue  32,822   19,381   32,032 
 Income taxes payable  1,429   27,835   16,204 
 Other accrued liabilities  (11,762)  (37,076)  (7,810)
 Pension contributions  (27,521)  (24,939)  (24,782)
 Income tax deposit  (42,077)  -   - 
 Other  (9,191)  6,851   (4,198)
 Cash Provided by Operating Activities  337,037   379,648   375,619 
 Investing Activities            
 Composition spending  (50,434)  (52,501)  (51,471)
 Additions to technology, property and equipment  (58,704)  (67,377)  (54,393)
 Acquisitions, net of cash acquired  (263,272)  (92,174)  (7,166)
 Proceeds from sale of consumer publishing programs  29,942   -   - 
 Cash Used for Investing Activities  (342,468)  (212,052)  (113,030)
 Financing Activities            
 Repayment of long-term debt  (472,500)  (888,411)  (504,800)
 Borrowings of long-term debt  670,500   909,211   310,000 
 Purchase of treasury stock  (73,721)  (87,072)  (27,958)
 Change in book overdrafts  (451)  (4,414)  (1,185)
 Cash dividends  (57,426)  (48,257)  (38,764)
 Debt financing costs  (382)  (3,119)  - 
 Proceeds from exercise of stock options and other  24,188   15,303   27,847 
 Excess tax benefits from stock-based compensation  193   2,044   4,816 
 Cash Provided by (Used for) Financing Activities  90,401   (104,715)  (230,044)
 Effects of Exchange Rate Changes on Cash  (10,660)  (4,904)  15,795 
 Cash and Cash Equivalents            
 Increase for year  74,310   57,977   48,340 
 Balance at beginning of year  259,830   201,853   153,513 
 Balance at end of year  334,140   259,830   201,853 
 Cash Paid During the Year for            
 Interest $12,081  $7,745  $19,686 
 Income taxes, net $56,021  $42,841  $37,822 
 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, 2010 $69,706  $13,485  $210,848  $1,003,099  $(347,056) $(227,646) $722,436 
                              
 Shares Issued Under Employee Benefit Plans          (3,321)      4,524       1,203 
 Purchase of Treasury Shares                  (27,958)      (27,958)
 Exercise of Stock Options, including taxes          21,800       9,660       31,460 
 Stock-based compensation expense          17,719               17,719 
 Class A Common Stock Dividends              (32,648)          (32,648)
 Class B Common Stock Dividends              (6,116)          (6,116)
 Other  43   (44)                  (1)
 Comprehensive Income              171,889       99,905   271,794 
                              
 Balance at April 30, 2011 $69,749  $13,441  $247,046  $1,136,224  $(360,830) $(127,741) $977,889 
                              
 Shares Issued Under Employee Benefit Plans          (1,622)      3,042       1,420 
 Purchase of Treasury Shares                  (87,072)      (87,072)
 Exercise of Stock Options, including taxes          9,123       7,126       16,249 
 Stock-based compensation expense          17,262               17,262 
 Class A Common Stock Dividends              (40,627)          (40,627)
 Class B Common Stock Dividends              (7,630)          (7,630)
 Other  4   (4)                  - 
 Comprehensive Income (Loss)              212,746       (72,669)  140,077 
                              
 Balance at April 30, 2012 $69,753  $13,437  $271,809  $1,300,713  $(437,734) $(200,410) $1,017,568 
                              
 Shares Issued Under Employee Benefit Plans          (4,821)      6,005       1,184 
 Purchase of Treasury Shares                  (73,721)      (73,721)
 Exercise of Stock Options, including taxes          11,846       10,974       22,820 
 Stock-based compensation expense          11,928               11,928 
 Class A Common Stock Dividends              (48,290)          (48,290)
 Class B Common Stock Dividends              (9,136)          (9,136)
 Other  40   (40)                  - 
 Comprehensive Income (Loss)              144,225       (78,222)  66,003 
                              
 Balance at April 30, 2013 $69,793  $13,397  $290,762  $1,387,512  $(494,476) $(278,632) $988,356 
                              
   
 The accompanying notes are an integral part of the consolidated financial statements. 



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 the term “Company” means John Wiley & Sons, Inc., and its subsidiaries and affiliated companies, unless the context indicates otherwise.
 
The Company is a global provider of knowledge and knowledge-basedknowledge-enabled services that improve outcomes in areas of research, professional developmentpractice and education. Core businesses produceThrough the Research segment, the Company provides digital and print scientific, technical, medical and scholarly research journals, reference works, books, database services and advertising; professionaladvertising. The Professional Development segment provides digital and print books, and certification,corporate learning solutions, employment assessment and training services;services, and test prep and certification. In Education, the Company provides print and digital content, and education content and servicessolutions including online program management services for collegeshigher education institutions and universities and integrated online teaching and learning resourcescourse management tools for instructors and students. The Company takes full advantage of its content from all three core 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 maintains publishing, marketing, and distribution centersCompany’s operations are primarily located in the United States, Canada, Europe, Asia, and Australia.
 
Note 2 - Summary of Significant Accounting Policies
 
Principles of Consolidation: The consolidated financial statements include the accounts of the Company. Investments in entities in which the Company has at least a 20%, but less than a majority interest, are accounted for using the equity method of accounting. Investments in entities in which the Company has less than a 20% ownership and in which it does not exercise significant influence are accounted for using the cost method of accounting. All intercompany accounts and transactions have been eliminated in consolidation.
 
Use of Estimates: The preparation of the Company’s financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and 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.  Actual results could differ from those estimates.
 
Reclassifications: Certain prior year amounts have been reclassified to conform to the current year’s presentation.
 
Book Overdrafts: Under the Company’s cash management system, a book overdraft balance exists for the Company’s primary disbursement accounts. This overdraft represents uncleared checks in excess of cash balances in individual bank accounts. The Company’s 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, 20132016 and 2012,2015, book overdrafts of $35.1$17.8 million and $35.6$16.1 million, respectively, were included in Accounts and Royalties Payable in the Consolidated Statements of Financial Position.
 
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 of the above criteria have been met, revenue is recognized upon shipment of products or when services have been rendered. Subscription revenue isRevenue related to journal subscriptions and other products and services that are generally collected in advance. The prepayment isadvance are deferred and recognized as earned primarilyover the term of the subscription; when the related issue is shipped orshipped; made available online overonline; or the term of the subscription.  For calendar year 2013, the Company piloted an alternative journal subscription license model for a group of customers.  Previously, those customers’ licenses were based on a commitment by the Company to provide a discrete number of online journal issues which provided for recognition of revenue
by the Company as issues were published.  Under this alternative model, the Company provides access to all content publishedservice is rendered, in the calendar year and provides for recognition of revenue on a straight-line basis over the calendar year covered by the alternative license model.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.
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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 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 teaching and learning environmentcourse management tool for the Company’s Education business which also includes a complete print or digital textbook for the course, as well ascourse; negotiated licenses for bundles of electronicdigital content available on Wiley Online Library, the online publishing platform for the Company’s Research business.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.
 
WhenThe Company enters into contracts for the Company’s electronicresale of its content is sold through a third party where the Company is generally not the primary obligor withinof the arrangement sincebecause it typically is not responsible for fulfilling the customer’s order ororder;  handling any customer requests or claims. Accordingly, theclaims and/or maintains credit risk. The Company will recognizerecognizes revenue for the sale of its electronic content, through third parties based on the amount billed to the end customer, net of any commission owed to the third party seller of the content.  Revenue is also reported net of any amounts billed to customers foror taxes which are remitted to government authorities.
 
Cash Equivalents: Cash equivalents consist of highly liquid investments with an original maturity of three months or less and are stated at cost plus accrued interest, which approximates market value.
 
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 in the Consolidated Statements of Financial Position and amounted to $7.4$7.3 million and $6.9$8.3 million as of April 30, 20132016 and 2012,2015, respectively.
 
Sales Return Reserves: The process which the Company uses to determine its 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 business. The Company collects, maintains and analyzes significant amounts of sales returns data for large volumes of homogeneous transactions. This allows the Company 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 also includes a related reduction in inventory and royalty costs as a result of the expected returns. Net print book sales return reserves amounted to $31.8$19.9 million and $35.8$25.3 million as of April 30, 20132016 and 2012,2015, respectively.
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The reserves are reflected in the following accounts of the Consolidated Statements of Financial Position – increase (decrease):



   2013  2012 
 Accounts Receivable $(44,279) $(48,612)
 Inventory  6,862   7,246 
 Accounts and Royalties Payable  (5,583)  (5,593)
 Decrease in Net Assets $(31,834) $(35,773)
 as of April 30:
 
The decrease in the sales return reserve was principally driven by the Company’s continuing migration to eBooks.
 20162015
Accounts Receivable$(29,447)$(37,300)
Inventories4,9246,555
Accounts and Royalties Payable(4,662)(5,405)
Decrease in Net Assets$(19,861)$(25,340)
 
Inventories: Inventories are carried at the lower of cost or market. U.S. book inventories aggregating $46.5$31.0 million and $60.7$35.7 million at April 30, 20132016 and 2012,2015, respectively, are valued using the last-in, first-out (LIFO) method.  All other inventories are valued using the first-in, first-out (FIFO) method.
 
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; current market conditions, including estimates of customer demand compared to the number of units currently on hand; and publication revision cycles. The inventory obsolescence reserve is reported as a reduction of the InventoryInventories balance in the Consolidated Statements of Financial Position and amounted to $28.2$22.0 million and $33.9$21.9 million as of April 30, 20132016 and 2012,2015, respectively.  The decrease in the inventory obsolescence reserve was principally driven by the divestment of Professional Development consumer publishing programs in fiscal year 2013 as discussed in Note 5.
 
Product Development Assets:  Product development assets consist of composition costs and royalty advances. Costs associated with developing a publication are expensed until the product is determined to be commercially viable. 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 costs are capitalized and are generally amortized on a double-declining basis over their estimated useful lives, ranging from 1 to 3 years. Royalty advances are capitalized and, upon publication, are recoveredexpensed 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 reflected in the Operating and Administrative Expenses line item in the Consolidated Statements of Income. The Company incurred $46.0$40.5 million, $50.4$42.5 million and $52.5$42.2 million in shipping and handling costs in fiscal years 2013, 20122016, 2015 and 2011,2014, respectively.
 
Advertising Expense: Advertising costs are expensed as incurred. The Company incurred $29.2$54.1 million, $24.3$40.8 million and $27.1$35.2 million in advertising costs in fiscal years 2013, 20122016, 2015 and 2011,2014, respectively.
 
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: Buildings and Leasehold Improvements – the lessorlesser of the estimated useful life of the asset up to 40 years or the duration of the lease; Furniture and Fixtures - 3 to 10 years; Computer Hardware and Software - 3 to 10 years.
 
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Costs incurred for computer software 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 6 years. Costs related to the investment in the Company’s 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.
 
Allocation of Acquisition Purchase Price to Assets Acquired and Liabilities Assumed: In connection with acquisitions, the Company allocates 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, current market trends, and synergies to be achieved from the acquisition and the expected tax basis of assets acquired. The Company may use an independent appraisera third party valuation consultant to assist in the determination of such estimates.
 
Goodwill and Indefinite-lived Intangible Assets: Goodwill is the excess of 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 frequently 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 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.
 
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. If that is the case, the two-step approach described above is then performed to evaluate the recoverability of goodwill.
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 lifelives of these intangibles isare the history and longevity of the brands, trademarks and content and publication rights acquired combined with the strength of cash flowsflows. 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.
 
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Intangible assets with finite lives as of April 30, 2016 are amortized on a straight line basis over the following weighted average estimated useful lives: content and publishing rights – 3531 years; customer relationships – 20 years; brands and trademarks – 1213 years; non-compete agreements – 54 years.
 
AssetsAssets 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.
Derivative Financial Instruments: The Company, from time to time, enters 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. The Company’sAll 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 not use financial instruments for trading or speculative purposes.
 
Foreign Currency Gains/Losses: The Company maintains operations in many non-U.S. locations. Assets and liabilities are translated into U.S. dollars using end of period exchange rates and revenues and expense are translated into U.S. dollars using weighted average rates. The Company’s significant investments in non-U.S. businesses are exposed to foreign currency risk. Foreign currency translation adjustments are accumulated and reported as a separate component of Accumulated Other Comprehensive Loss within Shareholders’ Equity. The Company’s significant investments in non-U.S. businesses are exposed to foreign currency risk. During fiscal year 2013,2016, the Company recorded $38.6$21.1 million of foreign currency translation losses primarily due to the strengthening of the U.S. dollar relative to the British pound sterling and euro.sterling. Foreign currency transaction gains or losses are recognized in the Consolidated Statements of Income as incurred.
 
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 for 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. 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.
 
Recently Issued Accounting Standards:There have been no
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 standards issuedpolicy election to account for forfeitures when they occur or to estimate the number of awards that have had, or 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 a material impact on the Company’sits 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.
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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 issued 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.
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Note 3 – 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):
 
   2013  2012  2011 
 Weighted Average Shares Outstanding  59,672   60,387   60,515 
 Less:  Unearned Restricted Shares  (225)  (203)  (355)
 Shares Used for Basic Earnings Per Share  59,447   60,184   60,160 
 Dilutive Effect of Stock Options and Other Stock Awards  777   1,088   1,199 
 Shares Used for Diluted Earnings Per Share  60,224   61,272   61,359 
 201620152014
Weighted Average Shares Outstanding58,25359,00458,925
Less:  Unearned Restricted Shares(255)(271)(290)
Shares Used for Basic Earnings Per Share57,99858,73358,635
Dilutive Effect of Stock Options and Other Stock Awards736861879
Shares Used for Diluted Earnings Per Share58,73459,59459,514
 
Since their inclusion in the calculation of diluted earnings per share would have been anti-dilutive, options to purchase 2,716,244, 1,655,362336,803, 178,144 and 411,372389,400 shares of Class A Common Stock have been excluded for fiscal years 2013, 20122016, 2015 and 2011,2014, respectively. In addition, for fiscal years 2013, 20122016 and 2011,2015 unearned restricted shares of 23,000, 10,00015,200 and 1,500,2,500, respectively, have been excluded as their inclusion would have been anti-dilutive.
Note 4- Accumulated Other Comprehensive Loss
Changes in Accumulated Other Comprehensive Loss by component, net of tax, for the fiscal years ended April 30, 2016 and 2015 were as follows (in thousands):
 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 and 2015, pre-tax actuarial losses included in Unamortized Retirement Costs of approximately $6.2 million and $7.8 million, respectively, were amortized from Accumulated Other Comprehensive Loss and recognized as pension expense in Operating and Administrative Expenses in the Consolidated Statements of Income.

 
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Note 45 – Acquisitions
 
Inscape:CrossKnowledge:
 
On February 16, 2012,May 1, 2014, the Company acquired all of the stock of Inscape Holdings, Inc.CrossKnowledge Group Limited (“Inscape”CrossKnowledge”) for approximately $85$166 million in cash, net of cash acquired. InscapeCrossKnowledge is a leading provider of workplace learning solutions including DiSC®-basedprovider 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 productsprograms that develop critical interpersonal business skills.  Inscape generatedare 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 and 2015, CrossKnowledge’s revenue of $21.6included in Wiley’s results was $50.7 million in fiscal year 2013. and $42.0 million, respectively.
The $166 million purchase price of $85 million was allocated to identifiable long-lived intangible assets, ($43.9 million) comprised primarily ofmainly customer relationships and content ($63.0 million); technology and trademarks, with the remainder allocated to($6.3 million); long-term deferred tax liabilities ($21.5 million); negative working capital ($4.3 million); and working capital.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 specialist.  Thevaluation consultant. Goodwill represents the excess of the purchase price over the fair value of net assets acquired ($56.8 million) was recorded as goodwill.  Goodwill representsand comprises the estimated value of Inscape’s workforce, unidentifiable intangible assets and the fair value of expected synergies.  The customer relationships, content, technology and trademarks are being amortized over a weighted average estimated useful life of approximately 15 years. Unaudited pro forma financial information has not been presented since the effects of acquisitions were not material on either an individual or aggregate basis. The Company finalized its purchase accounting for Inscape as of April 30, 2012.
Deltak:
On October 25, 2012, the Company acquired all of the stock of Deltak.edu, LLC (“Deltak”) for approximately $220 million in cash, net of cash acquired. Deltak works in close partnership with leading colleges and universities to develop and support online degree and certificate programs. The business provides technology platforms and services including market research to validate program demand, instructional design, marketing, and student recruitment and retention services to leading national and regional colleges and universities throughout the United States.  Deltak currently supports more than 100 online programs and was generating annual revenue of approximately $54 million prior to the acquisition and contributed $33.7 million to the Company’s fiscal year 2013 revenue since the acquisition date.  The $220 million purchase price was allocated to identifiable long-lived intangible assets ($99.4 million) comprised primarily of institutional relationships; and long-term deferred tax liabilities ($34.4 million); with the remainder allocated to technology and working capital. The fair value of intangible assets and technology acquired was based on management’s assessment performed with the assistance of a third party specialist.  The excess of the purchase price over the fair value of net assets acquired ($150.0 million) was recorded as goodwill. Goodwill represents the estimated value of Deltak’sCrossKnowledge’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 ana weighted average estimated useful life of approximately 2015 years. Unaudited proforma financial information has not been presented sinceThe acquisition was funded through the effectsuse of the acquisition were not material. The Company finalized its purchase accounting for Deltak as of April 30, 2013.Company’s existing credit facility and available cash balances.
 
Efficient Learning Systems:Profiles International:
 
On NovemberApril 1, 2012,2014, the Company acquired all of the stock of Efficient Learning Systems, Inc.Profiles International (“ELS”Profiles”) for approximately $24$47.5 million in cash, net of cash acquired.  ELS is an e-learning system provider focused in the areas of professional financeProfiles provides pre-employment assessment and accounting.  ELS’ flagship product, CPAexcel, is a modular, digital platform comprised of online self-study, videos, mobile apps, and sophisticated planningselection tools that has helpedenable 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 65,000 professionals prepare for the CPA exam since 1998. ELS was generating annual revenue of approximately $7 million prior to the acquisition and contributed $3.7 million to the Company’s fiscal year 2013 revenue since the acquisition date.120 countries, with assessments available in 32 languages. The $24
$47.5 million purchase price was allocated to identifiable long-lived intangible assets, mainly customer relationships and assessment content ($6.522.9 million); technology ($3.62.7 million); and long-term deferred tax liabilities ($9.7 million); a credit to short-term deferred tax assets ($2.9 million); with the remainder allocated tonegative working capital. 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 specialist. Thevaluation consultant. Goodwill represents the excess of the purchase price over the fair value of net assets acquired ($17.0 million) was recorded as goodwill.  Goodwill representsand comprises the estimated value of ELS’Profile’s workforce, unidentifiable intangible assets and the fair value of expected synergies. None of the goodwill is deductible for tax purposes. Unaudited proforma financial information has not been presented sinceThe 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 effects of the acquisition were not material. The Company finalized its purchase accountingCompany’s revenue for ELS as of April 30, 2013.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 5 – Sale of Consumer Publishing Programs
In March 2012, the Company announced that it intended to explore opportunities to sell a number of its consumer publishing assets in its Professional Development business as they no longer align with the Company’s long-term business strategy.  Those assets included travel (including the well-known Frommer’s brand), culinary, general interest, nautical, pets, crafts, Webster’s New World, and CliffsNotes.
Sale of Travel Publishing Program:
On August 10, 2012, the Company entered into a definitive agreement with Google, Inc. (“Google”) for the sale of its travel publishing program, including all of its interests in the Frommer’s, Unofficial Guides, and WhatsonWhen brands for $22 million in cash, of which $3.3 million is held in escrow related to standard commercial representations and warranties and is expected to be released to the Company by the end of fiscal year 2014. The effective date of the transaction was August 31, 2012.  As a result, the Company recorded a $9.8 million pre-tax gain on the sale, or $6.2 million after tax ($0.10 per share), in the second quarter of fiscal year 2013.  In connection with the sale, the Company also entered into a transition services agreement which will end on December 31, 2013.  Fees earned by the Company in fiscal year 2013 in connection with the service agreement were $0.5 million.
Sale of Culinary, CliffsNotes and Webster’s New World Publishing Programs:
On November 5, 2012, the Company completed the sale of the Company’s culinary, CliffsNotes, and Webster’s New World Dictionary consumer publishing programs to Houghton Mifflin Harcourt (“HMH”) for $11.0 million in cash, which approximated the carrying value of related assets sold, of which $1.1 million is held in escrow related to standard commercial representations and warranties and is expected to be released to the Company by the end of fiscal year 2014.  In connection with the sale, the Company also entered into a transition services agreement which ended on March 5, 2013.  Fees earned by the Company in fiscal year 2013 in connection with the service agreement were $1.5 million.
Sale of Other Consumer Publishing Programs:
In the fourth quarter of fiscal year 2013, the Company completed the sale of its other consumer publishing programs to various buyers for approximately $1 million in cash and a limited future royalty interest.  The Company recorded a $3.8 million loss on the sales ($3.6 million after tax or $0.06 per share) in the fourth quarter of fiscal year 2013.


 
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Note 6 – InventoriesRestructuring Charges
 
Inventories at April 30 were as followsIn fiscal years 2016, 2015 and 2014, the Company recorded pre-tax restructuring charges of $28.6 million ($0.32 per share), $28.8 million ($0.34 per share) and $42.7 million ($0.48 per share), respectively, which are reflected in the Restructuring Charges line item in the Consolidated Statements of Income and described in more detail below:
Restructuring and Reinvestment Program:
Beginning 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.
The following table summarizes the pre-tax restructuring charges related to this program (in thousands):
   2013  2012 
 Finished Goods $68,040  $86,954 
 Work-in-Process  5,890   6,487 
 Paper, Cloth, and Other  6,577   8,072 
    80,507   101,513 
 Inventory Value of Estimated Sales Returns  6,862   7,246 
 LIFO Reserve  (5,352)  (7,522)
 Total Inventories $82,017  $101,237 
 2016 2015 2014 Total Charges Incurred to Date
Charges by Segment:       
Research$5,048 $4,555 $7,774 $20,273
Professional Development2,277 4,385 11,860 24,806
Education1,206 1,571 891 4,786
Shared Services20,080 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 consulting7,191 301 8,556 18,666
Other activities4,977 11,410 8,204 26,719
Total Restructuring Charges$28,611 $28,804 $42,722 $124,589
 
See Note 2, SummaryOther Activities reflects leased facility consolidations, contract termination costs and the curtailment of Significant Accounting Policies - Sales Return Reserves for a discussion of Inventory Value of Estimated Returns.certain defined benefit pension plans.
 
Note 7 – Product Development Assets
Product development assets consistedThe following table summarizes the activity for the Restructuring and Reinvestment Program liability as of the following at April 30 (in thousands):
   2013  2012 
 Composition Costs $48,861  $54,844 
 Royalty Advances  39,015   53,570 
 Total $87,876  $108,414 
 
Composition
    Foreign 
    Translation & 
 2015ChargesPaymentsReclassifications2016
Severance$18,794$16,443$(18,485)$(95)$16,657
Process reengineering consulting-7,191(7,191)--
Other activities11,8594,977(4,188)(796)11,852
Total$30,653$28,611$(29,864)$(891)$28,509
The restructuring liability for accrued Severance costs are netis reflected in Accrued Employment Costs in the Consolidated Statements of accumulated amortization of $179.9Financial Position. Approximately $0.6 million and $178.2$11.3 million as of April 30, 2013the Other Activities are reflected in Other Accrued Liabilities and 2012,Other Long-Term Liabilities, respectively.

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Note 7 – 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).
Note 8 – Technology, Property and EquipmentInventories
 
Technology, property and equipmentInventories at April 30 were as follows (in thousands):
 20162015
Finished Goods$45,170$52,705
Work-in-Process7,5926,552
Paper, Cloth, and Other4,8674,676
 57,62963,933
Inventory Value of Estimated Sales Returns4,9246,555
LIFO Reserve(4,774)(6,709)
Total Inventories$57,779$63,779
See Note 2, Summary of Significant Accounting Policies - Sales Return Reserves for a discussion of the Inventory Value of Estimated Sales Returns.
Note 9 – Product Development Assets
Product development assets consisted of the following at April 30 (in thousands):
   2013  2012 
 Capitalized Software and Computer Hardware $423,247  $379,034 
 Buildings and Leasehold Improvements  98,846   98,635 
 Furniture, Fixtures and Warehouse Equipment  82,739   82,678 
 Land and Land Improvements  4,025   4,187 
    608,857   564,534 
 Accumulated Depreciation/Amortization  (419,232)  (376,555)
 Total $189,625  $187,979 
 
The
 20162015
Composition Costs$40,944$41,280
Royalty Advances31,18228,309
Total$72,126$69,589
Composition costs are net book value of capitalized software costs was $98.9accumulated amortization of $199.3 million and $88.9$198.2 million as of April 30, 20132016 and 2012,2015, respectively. Depreciation/Amortization expense recognized in 2013, 2012, and 2011 for capitalized software costs was approximately $33.1 million, $26.0 million and $22.6 million, respectively.
Note 9 - Goodwill and Intangible Assets
 
The following table summarizes the activity in goodwill by segment as of April 30 (in thousands):
   2012 Acquisitions Divestments 
Foreign
Translation Adjustment
      2013
 Research $473,209  $-  $-  $(16,626) $456,583 
 Professional Development  217,410   17,026   (5,117)  (332)  228,987 
 Education  -   149,970   -   -   149,970 
 Total $690,619  $166,996  $(5,117) $(16,958) $835,540 
The acquisitions for Professional Development and Education relate to the ELS and Deltak acquisitions, respectively.  The divestments reflect the portion of goodwill allocated to the divested consumer publishing programs.
Intangible assets as of April 30 were as follows (in thousands):
   2013  2012 
    Cost 
Accumulated
Amortization
  Cost Accumulated Amortization
 Intangible Assets with Determinable Lives            
 Content and Publishing Rights $790,881  $(260,947) $794,986  $(227,934)
 Customer Relationships  179,336   (23,634)  83,477   (17,240)
 Brands & Trademarks  25,700   (11,894)  22,374   (8,401)
 Covenants not to Compete  1,840   (782)  790   (484)
    997,757   (297,257)  901,627   (254,059)
 Intangible Assets with Indefinite Lives                
 Brands & Trademarks  153,747   -   165,896   - 
 Content and Publishing Rights  100,710   -   102,031   - 
   $1,252,214  $(297,257) $1,169,554  $(254,059)
Based on the current amount of intangible assets subject to amortization and assuming current exchange rates, the estimated amortization expense for each of the succeeding five fiscal years are as follows: 2014 - $42.0 million; 2015 - $40.8 million; 2016 - $39.6 million; 2017 - $38.1 million and 2018 – $35.3 million.
Note 10 – Restructuring ChargesTechnology, Property and Equipment
 
In fiscal year 2013, the Company recorded pre-tax restructuring charges of $29.3 million, or $19.8 million after tax ($0.33 per share), which are reflected in the Restructuring Charges line itemTechnology, property and equipment consisted of the Consolidated Statements of Income and described in more detail below:following at April 30 (in thousands):
 
Restructuring
 20162015
Capitalized Software and Computer Hardware$539,968$460,199
Buildings and Leasehold Improvements84,92386,225
Furniture, Fixtures and Warehouse Equipment54,60760,460
Land and Land Improvements3,7263,820
 683,224610,704
Accumulated Depreciation(468,454)(417,694)
Total$214,770$193,010
The net book value of capitalized software costs was $151.5 million and Reinvestment Program $121.9 million as of April 30, 2016 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, respectively.
In fiscal year 2013, the Company announced a program (the “Restructuring and Reinvestment Program”) to restructure and realign the Company’s 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 the fourth quarter of fiscal year 2013, the Company recorded pre-tax restructuring charges of $24.5 million, or $16.3 million after tax ($0.27 per share), related to the Restructuring and Reinvestment Program.  The restructuring charge includes accrued redundancy and separation benefits of $19.1
 
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million, process reengineering consulting costs of $2.7 million
Note 11 - Goodwill and termination/curtailment costs related to the U.S. defined benefit pension plan of $2.7 million.  Approximately $2.9 million, $6.3 million and $1.1 million of the restructuring charge was recorded within the Research, PD, and Education reporting segments, respectively, with the remainder recognized in Shared Service costs.  The Company expects to record an additional charge or charges during fiscal year 2014 as it implements successive phases of the program.  Given progress to date, the Company expects that it will be in a position to begin implementation of the next phase of the restructuring initiative mid-fiscal year 2014 which will generate a charge for additional employee separation-related benefits of a similar size to that taken in the fourth quarter of fiscal year 2013.Intangible Assets
 
As of April 30, 2013,The following table summarizes the Company made severance and other employee separation-related payments of approximately $0.3 million, resultingactivity in a remaining liability of approximately $18.8 million reflected in the Accrued Employment Costs line item in the Consolidated Statements of Financial Position.  Remaining payments are expected to be substantially completedgoodwill by October 31, 2014.  As of April 30, 2013, the Company made payments related to reengineering consulting costs of approximately $1.6 million resulting in a remaining liability of approximately $1.1 million reflected in the Other Accrued Liabilities line item in the Consolidated Statements of Financial Position.
Other Restructuring Programs
As part of the Company’s ongoing transition and transformation to digital products and services, certain activities have been identified that will either be discontinued, outsourced, or relocated to a lower cost region.  As a result, the Company recorded a pre-tax restructuring charge of approximately $4.8 million, or $3.5 million after tax ($0.06 per share), in the first quarter of fiscal year 2013 for redundancy and separation benefits. Approximately $3.0 million, $1.3 million and $0.2 million of the restructuring charge was recorded within the Research, PD and Education reporting segments, respectively, with the remainder recognized in Shared Service costs.
During fiscal year 2013, the Company made severance payments of approximately $3.7 million resulting in a remaining liability of approximately $1.1 millionsegment as of April 30 2013, which is reflected in the Accrued Employment Costs line item in the Consolidated Statements of Financial Position. The remaining severance payments are expected to be substantially completed by July 31, 2013.(in thousands):
 
Note 11 – Impairment Charges
 2015AcquisitionsForeign Translation Adjustment2016
Research$447,326-$(14,025)$433,301
Professional Development       365,215         -3,321368,536
Education       149,826--149,826
Total$962,367-$(10,704)$951,663
 
In fiscal year 2013, in conjunction withIntangible assets as of April 30 were as follows (in thousands):
  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)
Based on the restructuring programscurrent amount of intangible assets subject to amortization and assuming current foreign exchange rates, the Company recognized total pre-tax asset impairment charges of $30.7 million, or $21.0 million after tax ($0.35 per share), which are reflected in the Impairment Charges line itemestimated amortization expense for each of the Consolidated Statements of Incomesucceeding five fiscal years are as follows: 2017 - $48 million; 2018 – $44 million; 2019 - $42 million; 2020 - $38 million and described in more detail below:2021 - $35 million.
 
Consumer Publishing Programs
As discussed in Note 5, the Company began accounting for its culinary, CliffsNotes and Webster’s New World Dictionary consumer publishing programs as Assets Held for Sale in the second quarter of fiscal year 2013.  As a result, the Company recorded a pre-tax impairment charge of $12.1 million, or $7.5 million after tax ($0.12 per share), in the second quarter of fiscal year 2013 to reduce the carrying value of the assets within these programs to approximately $9.9 million, which represented their fair value based on the estimated sales price, less costs to sell.  In addition, in the second quarter of fiscal year 2013, the Company recorded a pre-tax impairment charge of $3.4 million, or $2.1 million after tax ($0.04 per share) to reduce the carrying value of inventory and royalty advances within its other consumer publishing programs to their estimated realizable value.
Controlled Circulation Publishing Assets
In fiscal year 2013, the Company identified certain controlled circulation publishing programs that no longer align with the Company’s long-term strategy and has shifted key resources from these programs to other publishing programs within the Research business.  As a result, the Company performed an impairment test on the intangible assets related to these controlled circulation publishing programs in the fourth quarter of fiscal year 2013, which resulted in a $9.9 million pre-tax impairment charge, or $8.2 million after tax ($0.14 per share).  The intangible assets principally consisted of acquired publication rights.  The impairment charge resulted in a full write-off of the carrying value of these intangible assets based on their estimated fair values as determined by the Company utilizing a discounted cash flow analysis.
Technology Investments
In fiscal year 2013, the Company identified certain technology investments which no longer fit the Company’s technology strategy. As a result, the Company recorded an asset impairment charge of $5.3 million, or $3.2 million after tax ($0.05 per share), to write-off the full carrying value of the related assets.
 
Note 12 - Additional Provision for Doubtful Trade Account
In fiscal year 2011, the Company recorded a pre-tax bad debt provision of $9.3 million, or $6.0 million after-tax ($0.10 per diluted share), related to the Company’s customer, Borders Group, Inc. (“Borders”). The net charge was reflected in the Additional Provision for Doubtful Trade Account line item in the Consolidated Statements of Income and represented the difference between the Company’s outstanding receivable with Borders, net of existing reserves and recoveries.
Note 13 - Income Taxes
 
The provisions for income taxes for the years endingended April 30 were as follows (in thousands):
 
   2013 2012 2011
 Current Provision         
 US – Federal $23,835  $11,253  $15,563 
 International  34,019   43,017   35,913 
 State and Local  2,091   2,049   1,988 
 Total Current Provision $59,945  $56,319  $53,464 
 Deferred Provision (Benefit)            
 US – Federal $(11,312) $9,736  $6,164 
 International  (5,553)  (7,820)  2,040 
 State and Local  (383)  1,114   (2,497)
 Total Deferred Provision (Benefit) $(17,248) $3,030  $5,707 
 Total Provision $42,697  $59,349  $59,171 
 201620152014
Current Provision   
US – Federal $(5,365) $27,137 $13,541
International31,95827,61334,519
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 Local595(216)(547)
Total Deferred (Benefit) $761 $(7,164) $(12,303)
Total Provision$29,011$48,593$35,024
 
 
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International and United States pretax income for the years endingended April 30, 2016 were as follows (in thousands):
 
     2013 2012 2011
 International $156,114  $171,315  $162,767 
 United States  30,808   100,780   68,293 
 Total $186,922  $272,095  $231,060 
 201620152014
International  $159,152  $165,085  $159,442
United States15,64160,37636,092
Total $174,793 $225,461 $195,534

 
The Company’s effective income tax rate as a percentage of pretax income differed from the U.S. federal statutory rate as shown below:
 
   2013 2012    2011
 U.S. Federal Statutory Rate  35.0%   35.0%   35.0% 
 Benefit from Lower Taxes on Non-US Income  (9.3)  (6.8)  (7.6)
 State Income Taxes, Net of U.S. Federal Tax Benefit  0.6   0.8   (0.1)
 Deferred Tax Benefit From Statutory Tax Rate Change  (4.5)  (3.2)  (1.8)
 Tax Adjustments  0.7   (4.0)  (0.9)
 Other  0.3   -   1.0 
 Effective Income Tax Rate  22.8%   21.8%   25.6% 
 201620152014
U.S. Federal Statutory Rate35.0%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 Benefit0.80.30.4
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 Rate16.6%21.6%17.9%
Note: A substantial portion of the Company’s income is earned outside the U.S. in jurisdictions with lower statutory income tax rates than the U.S. including: U.K. (20%): Germany (27%): Australia (30%): Canada (28%).
 
Deferred Tax Benefit from Statutory Tax Rate Change:  In fiscal years 2013, 20122016 and 2011,2014, the Company recognized non-cash deferred tax benefits of $8.4$5.9 million ($0.14 per share), $8.8 million ($0.140.10 per share), and $4.210.6 million ($0.070.18 per share), respectfully, principally associated with new tax legislation enacted in the United Kingdom (“U.K.”) that reduced the U.K. statutory income tax rates by 2%, 2% and 1%3%, respectively. The benefits reflect the remeasurement of all applicable U.K deferred tax balances to the new income tax rates which are reflected at the current statutory tax rate of 23% as of19% effective April 30, 2013.1, 2017 and 18% effective April 1, 2020.
 
Tax Adjustments:Adjustments and Other:  In fiscal years 2013, 20122016, 2015 and 2011,2014, the Company recorded tax benefits of $1.3 million, $0.7 million, $10.9 million and $2.0$2.6 million, respectively, related to the expiration of the statute of limitations and favorable resolutions of certain federal, state and foreign tax matters with tax authorities. The fiscal year 2012 tax benefit includes the release of a $7.5 million income tax reserve that was originally recorded in conjunction with the purchase accounting for the Blackwell acquisition.  In addition, to the benefits recorded above, the Company recorded a tax charge of $2.1 million in fiscal year 2013 due to recently published IRS2015, the Company recognized a non-recurring tax positionsbenefit of $3.1 million related to tax deductions claimed on the Company’s abilitywrite-up of certain foreign tax assets to take certain deductions in the U.S.fair market value.
 
Accounting for Uncertainty in Income Taxes:
As of April 30, 20132016 and April 30, 2012,2015, the total amount of unrecognized tax benefits were $25.5$19.9 million and $24.3$19.3 million, respectively, of which $3.1$3.5 million and $3.0 million represented accruals for interest and penalties recorded as additional tax expense in accordance with the Company’s accounting policy. Within the income tax provision for both fiscal years 20132016 and 2012,2015, the Company recorded net interest expense/(income) and penaltiesexpense on thereserves for unrecognized and recognized tax benefits of $0.3$0.5 million and ($1.6) million, respectively.in each year. As of April 30, 20132016 and April 30, 2012,2015, the total amount of unrecognized tax benefits that, if recognized, would reduce the Company’s income tax provision, if recognized, were approximately $23.8$19.2 million and $22.6$18.8 million, respectively. The Company does not expect any significant changes to the unrecognized tax benefits within the next 12twelve months.

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A reconciliation of the unrecognized tax benefits included within the Other Long-Term Liabilities line item in the Consolidated Statements of Financial Position are as follows (in thousands):
   2013  2012 
 Balance at May 1st $24,252  $38,100 
 Additions for Current Year Tax Positions  1,182   375 
 Additions for Prior Year Tax Positions  2,749   1,105 
 Reductions for Prior Year Tax Positions  (906)  (1,521)
 Foreign Translation Adjustment  (291)  (1,681)
 Payments  (1,089)  - 
 Reductions for Lapse of Statute of Limitations  (396)  (12,126)
 Balance at April 30th $25,501  $24,252 
 20162015
Balance at May 1st$19,349$23,826
Additions for Current Year Tax Positions1,077503
Additions for Prior Year Tax Positions533519
Reductions for Prior Year Tax Positions(214)(595)
Foreign Translation Adjustment569(4,207)
Payments(132)-
Reductions for Lapse of Statute of Limitations(1,319)(697)
Balance at April 30th $19,863 $19,349
 
Tax Audits:
The Company files income tax returns in the U.S. and various states and non-U.S. tax jurisdictions. The Company’s major taxing jurisdictions include the United States, the United Kingdom and Germany. The Company is no longer subject to income tax examinations for years prior to fiscal year 20092010 in the major jurisdictions in which the Company is subject to tax. The CompanyCompany’s last completed the U.S. federal audit was for fiscal years 2006 through 2009, resultingwhich resulted in minimal adjustments principally related to temporary differences. The IRS is currently auditing the fiscal year 2013 U.S. Federal income tax return.
 
The Company completed the German tax audit for fiscal years 2003 through 2009. In conjunction with the audit, the German tax authorities notified the Company in May 2012, that they are challenging the Company's tax position with respect to the amortization of certain stepped-up assets.  In fiscal year 2003, the Company merged several of its German subsidiaries into a new operating entity which enabled the Company to increase ("step-up"(“step-up”) the tax deductible net asset basis of the merged subsidiaries to fair market value. The expected tax benefits to be derived from the step-up are approximately 50 million euros claimed as amortization over 15 years beginning in fiscal year 2003. The Company's management and its advisors believe that it is "more likely than not" to successfully defend that the tax treatment was proper and in accordance with German tax regulations. The circumstances are not unique to the Company.
 
In fiscal year 2013,May 2012, as part of its routine tax audit process, the German tax authorities filed a challenge to the Company’s tax position with respect to the amortization of certain stepped-up assets. The Company made deposits of 33 million euros related to amortization claimed on certain "stepped-up" assets through fiscal year 2007.filed an appeal with the local finance court in September 2014.  Under German tax law, the Company must pay all contested taxes and the related interest to have the right to defend its position challenged by authorities.position. The Company has made all required payments to date with total deposits paid of 48 million euros through April 30, 2016. The Company expects that it will be required to deposit additional amounts up to 2510 million euros plus interest for tax returns to be filed in future periods until the issue is resolved.
In October 2014, the Company received an unfavorable decision from the local finance court and is in the process of appealing the court decision. The challengeCompany’s management and its advisors continue to believe that the Company is “more likely than not” to successfully defend that the tax treatment was proper and in accordance with German tax regulations. As such, the Company has not recorded any charges related to the loss of the step-up benefit. The Company filed its appeal in January 2015. Resolution of the appeal is expected to ultimately be decided by a court and could take several yearsup to reach resolution.24 months from January 2015. If the Company is ultimately successful, as expected, the tax deposits will be returned with 6% simple interest, based on current German legislation. The Company recorded $0.9 million as a benefit within the fiscal year 2013 income tax provision for accrued interest income.  As of April 30, 20132016, the USD equivalent of the depositsdeposit and accrued interest income to date was approximately $45.9$62.9 million, which is recorded within Other Assetsas Income Tax Deposits on the Consolidated Statements of Financial Position. The Company records the accrued interest at 6% within the Provision for Income Taxes in the Consolidated Statements of Income.
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Deferred Taxes:
Deferred taxes result from temporary differences in the recognition of revenue and expense for tax and financial reporting purposes.  It is more likely than not that the results of future operations will generate sufficient taxable income to realize the deferred tax assets. The significant components of deferred tax assets and liabilities at April 30 were as follows (in thousands):


 20162015
Inventories       $5,349       $5,230
Intangible and Fixed Assets       288,769       297,323
Total Deferred Tax Liabilities$294,118$302,553
   
Net Operating Losses$3,148$4,599
Reserve for Sales Returns and Doubtful Accounts6,0756,922
Accrued Employee Compensation29,55028,093
Other Accrued Expenses14,84214,583
Retirement and Post-Employment Benefits64,43862,385
Total  Deferred Tax Assets$118,053$116,582
Net Deferred Tax Liabilities$176,065$185,971
   
Reported As  
Current Deferred Tax Assets$11,126$9,981
Non-current Deferred Tax Assets2,6772,995
Non-current  Deferred  Tax Liabilities189,868198,947
Net Deferred Tax Liabilities$176,065$185,971
 
   2013 2012
 Inventory $8,328  $7,185 
 Intangible and Fixed Assets  301,239   276,035 
 Total Deferred Tax Liabilities $309,567  $283,220 
          
 Net Operating Losses $5,813  $6,297 
 Reserve for Sales Returns and Doubtful Accounts  6,297   5,577 
 Accrued Expenses  11,849   6,157 
 Accrued Employee Compensation  35,505   30,946 
 Retirement and Post-Employment Benefits  64,680   48,188 
 Total  Deferred Tax Assets $124,144  $97,165 
          
 Net Deferred Tax Liabilities $185,423  $186,055 
     Reported As      
 Current Deferred Tax Assets $5,513  $219 
 Non-current Deferred Tax Assets  6,590   6,996 
 Current Deferred Tax Liabilities  -   11,554 
 Non-current  Deferred  Tax Liabilities  197,526   181,716 
 Net Deferred Tax Liabilities $185,423  $186,055 
          
Pretax earnings of a non-U.S. subsidiary or affiliate are subject to U.S. taxation when repatriated. The Company intends to reinvest earnings outside the U.S. except in instances where repatriating such earnings would result in no additional tax. Accordingly, the Company has not recognized U.S. tax expense on non-U.S. earnings. At April 30, 2013,2016, the accumulated undistributed earnings of non-U.S. subsidiaries approximated $474$716 million. It is not practical to determine the U.S. income tax liability that would be payable if such earnings were not indefinitely reinvested.
 
Note 1413 - Debt and Available Credit Facilities
 
As of April 30, 20132016 and 2012,2015, the Company’s long-term debt of approximately $605.0 million and $750.1 million, respectively consisted of amounts due under itsthe following revolving credit facility of approximately $673.0 million and $475.0 million, respectively.  facilities:
On November 2, 2011,March 1, 2016, the Company amended and restatedextended 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 with Bank of America - Merrill Lynch and The Royal Bank of Scotland plc as joint lead arrangers and Bank of America as administrative agent.due on November 2, 2016. The new agreement consistedconsists of a $700 million$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 proceeds of the new revolving credit facility were used to pay down the Company’s prior credit facility and meet seasonal operating cash requirements.  On October 18, 2012, the Company increased the facility’s credit limit to $825 million to finance the Deltak acquisition.  Under the current agreement,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 1.05%0.98% to 1.65%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 0.65%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 0.20%0.15% to 0.35%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 $125$350 million in minimum increments of $50 million, subject to the approval of the lenders. The amended 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, 2013.2016. Due to the fact that there are no principal payments due until the end of the amended agreement in fiscal year 2017,2021, 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, 2013.2016. 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.
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On October 31, 2015, the Company renewed its U.S. dollar facility with TD Bank, N.A. which was equally ranked with the Company’s previous agreement with Bank of America - Merrill Lynch and The Royal Bank of Scotland plc, and Santander Bank. The agreement consisted of a $50 million 364-day revolving credit facility which was drawn in fiscal year 2015. The facility was terminated and fully paid off with the proceeds of the RCA refinancing on March 1, 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 was 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.
 
The Company and its subsidiaries have other short-term lines of credit aggregating $10.3$7.2 million at various interest rates. NoThere were no outstanding borrowings under thethese credit lines at April 30, 2016. Outstanding borrowings under these credit lines were outstandingapproximately $0.1 million as of April 30, 2013 or 2012. 2015.
The Company’s total available lines of credit as of April 30, 20132016 were approximately $835 million,$1.1 billion, of which approximately $162 million$0.5 billion was unused. The weighted average interest rates on long-termtotal debt outstanding during fiscal years 20132016 and 20122015 were 1.93%1.88% and 1.60%1.93%, respectively. As of April 30, 20132016 and 2012,2015, the weighted average interest rates for the long-termtotal debt were 1.86%2.12% and 2.01%1.77%, respectively. Based on estimates of interest rates currently available to the Company for loans with similar terms and maturities, the fair value of the Company’s long-term debt approximates its carrying value.
 
Note 1514 – Derivative Instruments and Hedging Activities
 
The Company, from time-to-time, enters 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 not use financial instruments for trading or speculative purposes.
 
Interest Rate Contracts:
The Company had $673.0$605.0 million of variable rate loans outstanding at April 30, 2013,2016, which approximated fair value. During fiscal years 2013As of April 30, 2016 and 2012,2015, the Company maintained two interest rate swap agreements thatmaintained by the Company were designated as fully effective cash flow hedges as defined under Accounting Standards Codification (“ASC”) 815 “Derivatives and Hedging.” As a result, there was no impact on the Company’s Consolidated Statements of Income forfrom changes in the fair value of the interest rate swaps.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 in 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 in 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.
 
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On August 19, 2010,April 4, 2016, the Company entered into ana forward starting interest rate swap agreement which fixed a portion of the variable interest due on itsa variable rate loans outstanding.debt renewal on May 16, 2016. Under the terms of the agreement, the Company paidwill pay a fixed rate of 0.8%0.92% and receivedreceives a variable rate of interest based on one-month LIBOR (as defined) from the counterparty which wasis reset every month for a twenty-nine monththree-year period starting May 16, 2016 ending January 19, 2013, the date that the swap expired.May 15, 2019. As of April 30, 2012,2016, the notional amount of the interest rate swap was $125.0$350.0 million.
 
On March 30, 2012,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 0.645%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 three-yeartwo-year period ending March 31, 2015.August 15, 2016. As of both April 30, 2013 and 2012,2016, the notional amount of the interest rate swap was $250.0$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 the fair value of its 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, 20132016 and 20122015 was a deferred loss of $1.6 million and $1.7 million, respectively.$0.6 million. Based on the maturity dates of the contracts, approximately $0.1 million and $0.2 million of the entire deferred losslosses as of April 30, 2013 was2016 and 2015 were recorded in 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, in the Consolidated Statements of Financial Position.respectively. The deferred loss as of April 30, 2012 of $0.5 million and $1.2 million was recorded in Other Accrued Liabilities and Other Long-Term Liabilities, respectively.  Netpre-tax losses that were reclassified from Accumulated Other Comprehensive Loss into Interest Expense for fiscal years 2013, 20122016, 2015 and 20112014 were $1.6$0.9 million, $0.8$1.7 million and $9.1$1.3 million, respectively. Based on the amount in Accumulated Other Comprehensive Loss at April 30, 2013,2016, approximately $1.1$0.7 million, net of tax, of unrecognized loss would be reclassified into net income in the next twelve months.
 
Foreign Currency Contracts:
The Company may enter into forward exchange contracts to manage the Company’s exposure on certain foreign currency denominated assets and liabilities. The forward exchange contracts are marked to market through Foreign Exchange Transaction Gains and Losses on(Losses) in the Consolidated Statements of Income, and carried at their fair value onin the Consolidated Statements of Financial Position.Position with gains reported in Prepaid and Other and losses reported in Other Accrued Liabilities. 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 Gains and Losses.  (Losses).
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As of April 30, 2013,2016, there was onewere two open forward exchange contract incontracts with notional amounts of 31 million Euros with a notional amount in U.S. dollarsand 274 million Pounds Sterling to hedge intercompany loans. As of approximately $30.0 million.  TheApril 30, 2015, the Company did not maintain any open forward contracts as of April 30, 2012.contracts. During fiscal years 20112014 through 2013,2016, 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. As of April 30, 2013, theThe fair value of the open forward exchange contract was a gain of approximately $0.1 million, whichcontracts was measured on a recurring basis using Level 2 inputs and recorded within the Prepaid and Other line item on the Consolidated Statements of Financial Position.inputs. For fiscal years 2013, 20122016, 2015 and 2011,2014, the gains/gains (losses) recognized on the forward contracts were $(0.6)$1.3 million, $2.4$(11.2) million, and $0.6$(0.4) million, respectively.
 
Note 1615 - CommitmentsCommitment and Contingencies
 
The following schedule shows the composition of rent expense for operating leases (in thousands):
 
 2013 2012 2011          2016          2015         2014
Minimum Rental $41,899  $43,620  $39,676 $37,206$39,748$40,929
Less: Sublease Rentals  (554)  (501)  (665)(597)(639)(642)
Total $41,345  $43,119  $39,011 $36,609$39,109$40,287
 
Future minimum payments under operating leases were $230.4$328.1 million at April 30, 2013.2016. Annual minimum payments under these leases for fiscal years 20142017 through 20182021 are approximately $41.1$35.2 million, $38.3$20.2 million, $37.0$27.1 million, $36.2$25.0 million, and $23.2$21.4 million, respectively. 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 involved in routine litigation in the ordinary course of its business.  A provision for litigation is accrued when information available to the Company 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 not record a liability, but discloses 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 when management believes such future costs will be material. 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 will not have a material effect upon the 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.

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Note 1716 - Retirement Plans
 
The Company and its principal subsidiaries have contributory and noncontributory 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 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.
The Company’s Board of Directors approved plan amendments that froze the Retirement Plan for the Employees of John Wiley & Sons, Canada, 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.
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, effective April 30, 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 April 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.
The Company maintains the Supplemental Executive Retirement Plan for certain officers and senior management which provides for the payment of supplemental retirement benefits after the termination of employment for 10 years or in a lifetime annuity. Under certain circumstances, including a change of control as defined, the payment of such amounts could be accelerated on a present value basis. Future accrued benefits to the Plan have been discontinued as noted above.
The components of net pension expense for the defined benefit plans and the weighted-average assumptions were as follows (in thousands):
                   2016                   2015                  2014
 U.S. Non-U.S. U.S.Non-U.S. U.S.Non-U.S.
Service Cost $       -$1,455  $       -$5,942  $       -$8,066
Interest Cost13,61216,446 13,15917,417 12,61317,144
Expected Return on Plan Assets(14,756)(25,088) (13,782)(22,654) (14,838)(21,607)
Net Amortization of Prior Service Cost and Transition Asset(154)55 (115)68 -124
Recognized Net Actuarial Loss2,2402,475 1,4706,299 5,6817,490
Curtailment/Settlement Loss (Gain)1,857- -(428) -79
Net Pension Charge (Credit)$2,799$(4,657) $732$6,644 $3,456$11,296
         
Discount Rate4.2%3.5% 4.7%4.2% 4.2%4.2%
Rate of Compensation IncreaseN/A3.0% N/A3.2% N/A3.2%
Expected Return on Plan Assets6.8%6.7% 6.8%6.7% 8.0%6.7%
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The curtailment/settlement loss in fiscal year 2016 of $1.9 million, noted above, relates to a disability payment made subject to terms of the Company’s Supplemental Executive Retirement Plan.
The projected benefit obligation, accumulated benefit obligation, and fair value of plan assets for the retirement plans with accumulated benefit obligations in excess of plan assets were $797.4 million, $759.2 million and $567.8 million, respectively, as of April 30, 2016 and $813.3 million, $773.4 million and $589.9 million, respectively, as of April 30, 2015.
The Recognized Net Actuarial Loss for each fiscal year is calculated using the “corridor method” which reflects the amortization of the net loss at the beginning of the fiscal year in excess of 10% of the greater of the market value of plan assets or the projected benefit obligation. The amortization period is based on the average expected life of plan participants.
 
The Company recognizes the overfunded or underfunded status of defined benefit postretirement plans, measured as the difference between the fair value of plan assets and the projected benefit obligation, in the Consolidated Statements of Financial Position.  The change in the funded status of the plan is recognized within Accumulated Other Comprehensive Loss in the Consolidated Statements of Financial Position. Plan assets and obligations are measured at fair value as of the Company’s balance sheet date.
 
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):

       United States     Non-U.S.  Total 
Actuarial Loss $6,257  $7,338  $13,595 
Prior Service Cost  -   121   121 
Total $6,257  $7,459  $13,716 
  U.S.Non-U.S.Total
 Actuarial Loss$2,712$2,819$5,531
 Prior Service Cost(154)56(98)
 Total$2,558$2,875$5,433
 
The Company has agreements with certain officers and senior management that provide for the payment of supplemental retirement benefits after the termination of employment for 10 years or in a lifetime annuity. Under certain circumstances, including a change of control as defined, the payment of such amounts could be accelerated on a present value basis.
In March 2013, the Company’s Board of Directors approved plan amendments that will freeze the U.S. Employees’ Retirement Plan, Supplemental Benefit Plan, and Supplemental Executive Retirement Plan, which will be effective on June 30, 2013.  These plans are U.S. defined benefit plans.  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 June 30, 2013.  This amendment decreased the pension benefit liabilities by $18.2 million, and resulted in an after-tax decrease in accumulated other comprehensive loss of $11.3 million.  The Company also recorded a pension plan curtailment expense of $2.7 million in fiscal year 2013 as a result of the plan amendments, which represented a write-off of the unrecognized prior service cost for the U.S. plans.  The curtailment expense is included within the Restructuring Charges line item in the Consolidated Statements of Income.
 
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The components of net pension expense for the defined benefit plans and the weighted-average assumptions were as follows (in thousands):

                     2013                    2012                   2011 
   U.S.  Non-U.S.  U.S.  Non-U.S.  U.S.  Non-U.S. 
 Service Cost $12,701  $6,204  $9,951  $6,062  $9,591  $6,681 
 Interest Cost  12,032   15,784   12,042   15,862   10,758   16,118 
 Expected Return on Plan Assets  (12,927)  (17,975)  (11,679)  (17,412)  (10,118)  (15,542)
 Net Amortization of Prior Service Cost and Transition Asset  854   127   902   133   770   117 
 Recognized Net Actuarial Loss  6,050   3,905   4,444   670   4,343   2,915 
 Curtailment Loss  2,681   -   -   -   -   - 
 Net Pension Expense $21,391  $8,045  $15,660  $5,315  $15,344  $10,289 
                          
 Discount Rate�� 4.7%   5.0%   5.7%   5.6%   5.9%   5.7% 
 Rate of Compensation Increase  3.1%   3.4%   4.0%   4.4%   4.0%   4.6% 
 Expected Return on Plan Assets  8.0%   6.8%   8.0%   6.8%   8.5%   6.8% 
The projected benefit obligation, accumulated benefit obligation, and fair value of plan assets for the retirement plans with accumulated benefit obligations in excess of plan assets were $683.5 million, $655.0 million and $480.7 million, respectively, as of April 30, 2013 and $563.4 million, $532.2 million and $419.4 million, respectively, as of April 30, 2012.


The following table sets forth the changes in and the status of the Company’s defined benefit plans’ assets and benefit obligations:
 
 
 
Dollars in thousands
                                  2013                           2012 
 CHANGE IN PLAN ASSETS U.S. Non-U.S.  U.S. Non-U.S. 
 Fair Value of Plan Assets, Beginning of Year $160,396  $270,329  $144,887  $268,268 
 Actual Return on Plan Assets  22,161   40,844   9,676   8,033 
 Employer Contributions  13,210   14,311   15,656   9,283 
 Employees’ Contributions  -   1,892   -   1,937 
 Benefits Paid  (9,240)  (6,907)  (9,823)  (11,556)
 Foreign Currency Rate Changes  -   (13,780)  -   (5,636)
 Fair Value, End of Year $186,527  $306,689  $160,396  $270,329 
 CHANGE IN PROJECTED BENEFIT OBLIGATION                
 Benefit Obligation, Beginning of Year $(253,399) $(326,730) $(208,969) $(300,178)
 Service Cost  (12,701)  (6,204)  (9,951)  (6,062)
 Interest Cost  (12,032)  (15,784)  (12,042)  (15,862)
 Employee Contributions  -   (1,892)  -   (1,937)
 Actuarial (Loss)  (56,453)  (66,702)  (30,980)  (21,846)
 Benefits Paid  9,240   6,907   9,823   11,556 
 Foreign Currency Rate Changes  -   16,127   -   7,900 
 Curtailment  18,158   -   -   - 
 Amendments and Other  (472)  -   (1,280)  (301)
 Benefit Obligation, End of Year $(307,659) $(394,278) $(253,399) $(326,730)
 Funded Status $(121,132) $(87,589) $(93,003) $(56,401)
  AMOUNTS RECOGNIZED IN THE STATEMENT OF FINANCIAL POSITION:                
  Current Pension Liability  (3,826)  (533)  (2,524)  (1,065)
  Noncurrent Pension Liability  (117,306)  (87,056)  (90,479)  (55,336)
 
 
 Net Amount Recognized in Statement of Financial Position
 $(121,132) $(87,589) $(93,003) $(56,401)
 AMOUNTS RECOGNIZED IN ACCUMULATED OTHER COMPREHENSIVE LOSS CONSIST OF (before tax)                
  Net Actuarial Loss $(105,311) $(102,083) $(82,301) $(65,859)
  Prior Service Cost  -   (1,039)  (3,062)  (1,185)
  Total Accumulated Other Comprehensive Loss $(105,311) $(103,122) $(85,363) $(67,044)
 Change in Accumulated Other Comprehensive  Loss $(19,948) $(36,078) $(28,921) $(30,084)
 WEIGHTED AVERAGE ASSUMPTIONS USED IN DETERMINING ASSETS AND LIABILITIES                
 Discount Rate  4.2%   4.2%   4.7%   5.0% 
 Rate of Compensation Increase  N/A   3.2%   3.1%   3.4% 
 Accumulated Benefit Obligations $(307,659) $(359,438) $(242,780) $(299,947)
Dollars in thousands20162015
CHANGE IN PLAN ASSETSU.S.Non-U.S.U.S.Non-U.S.
Fair Value of Plan Assets, Beginning of Year$222,966$376,576$207,986$351,092
Actual Return on Plan Assets2,610(2,789)23,16660,997
Employer Contributions9,4598,4503,9729,701
Employee Contributions-68-1,566
Settlements(4,446)--(2,353)
Benefits Paid(14,666)(14,354)(12,158)(7,118)
Foreign Currency Rate Changes-(15,467)-(37,309)
Fair Value, End of Year$215,923$352,484$222,966$376,576
CHANGE IN PROJECTED BENEFIT OBLIGATION    
Benefit Obligation, Beginning of Year$(329,388)$(484,458)$(285,659)$(442,703)
Service Cost-(1,455)-(5,942)
Interest Cost(13,612)(16,446)(13,159)(17,417)
Employee Contributions-(68)-(1,566)
Actuarial Gain (Loss)(13,020)9,582(45,868)(83,782)
Benefits Paid14,66614,35412,1587,118
Foreign Currency Rate Changes-17,330-52,513
Curtailment---5,147
Settlements and Other4,446-3,1402,174
Benefit Obligation, End of Year$(336,908)$(461,161)$(329,388)$(484,458)
Funded Status$(120,985)$(108,677)$(106,422)$(107,882)
AMOUNTS RECOGNIZED IN THE STATEMENT OF FINANCIAL POSITION:   
Other Noncurrent Assets---17
Current Pension Liability(4,817)(675)(4,086)(508)
Noncurrent Pension Liability(116,168)(108,002)(102,336)(107,391)
 Net Amount Recognized in Statement of Financial Position$(120,985)$(108,677)$(106,422)$(107,882)
AMOUNTS RECOGNIZED IN ACCUMULATED OTHER COMPREHENSIVE LOSS (before tax) CONSIST OF: 
Net Actuarial (Loss)$(124,087)$(139,307)$(103,017)$(128,280)
Prior Service Cost Gain (Loss)2,870(521)3,024(555)
Total Accumulated Other Comprehensive Loss$(121,217)$(139,828)$(99,993)$(128,835)
Change in Accumulated Other Comprehensive  Loss$(21,224)$(10,993)$(31,988)$(20,329)
WEIGHTED AVERAGE ASSUMPTIONS USED IN DETERMINING ASSETS AND LIABILITIES:
Discount Rate4.0%3.5%4.2%3.5%
Rate of Compensation IncreaseN/A3.0%N/A3.0%
Accumulated Benefit Obligations$(336,908)$(422,861)$(329,389)$(444,561)

 


 
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Basis for determining discount rate:
 
The discount rates for the United States, United Kingdom and Canadian pension plans were 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 April 30, 2013.payments. The spot rate curve used is based upon a portfolio of Moody’s-rated Aa3 (or higher) corporate bonds. The discount rates for the other international plans were based on similar published indices with durations comparable to that of each plan’s liabilities.
 
Basis for determining the expected asset return:
 
The expected long-term rates of return were 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.
 
Pension plan assets/investments:
 
The investment guidelines for the defined benefit pension plans are established based upon an evaluation of market conditions, plan liabilities, cash requirements for benefit payments, and tolerance for risk.  Investment guidelines include the use of actively and passively managed securities. The investment objective is to ensure that funds are available to meet the plan’s benefit obligations when they are due. The investment strategy is to invest in high quality and diversified equity and debt securities to achieve our long-term expectation.  The plans’ risk management practices provide guidance to the investment managers, including guidelines for asset concentration, credit rating and liquidity.  Asset allocation favors a balanced portfolio, with a global aggregated target allocation of approximately 54%49% equity securities, 43%50% fixed income securities and cash, and 3%1% real estate. Due to volatility in the market, the target allocation is not always desirable and asset allocations will fluctuate between acceptable ranges of plus or minus 5%. The Company regularly reviews the investment allocations and periodically rebalances investments to the target allocations. The Company categorizes its pension assets into three levels based upon the assumptions (inputs) used to price the assets. Level 1 provides the most reliable measure of fair value, whereas Level 3 generally requires significant management judgment. The three levels are defined as follows:
 
·  Level 1:  Unadjusted quoted prices in active markets for identical assets.
·  Level 2:  Observable inputs other than those included in Level 1.  For example, quoted prices for similar assets in active markets or quoted prices for identical assets in inactive markets.
·  Level 3:  Unobservable inputs reflecting assumptions about the inputs used in pricing the asset.




 
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The Company did not maintain any level 3 assets during fiscal years 20132016 and 2012.2015. The following tables set forth, by level within the fair value hierarchy, pension plan assets at their fair value as of April 30 (in thousands):

                                        2013                                         2012                         2016                           2015
 Level 1  Level 2  Total  Level 1  Level 2  Total Level 1Level 2Total Level 1Level 2Total
U.S. Plan Assets                     
Equity Securities:                     
U.S. Commingled Funds $-  $79,449  $79,449  $-  $68,750  $68,750 $         -$69,550 $         -$68,671
Non-U.S. Commingled Funds  -   33,814   33,814   -   29,208   29,208 -28,741 -38,336
Fixed Income Commingled Funds  -   61,440   61,440   -   51,630   51,630 -105,841 -105,363
Real Estate  -   11,824   11,824   -   10,808   10,808 -11,791 -10,596
Total U.S. Plan Assets $-  $186,527  $186,527  $-  $160,396  $160,396 $         -$215,923 $         -$222,966
                           
Non-U.S. Plan Assets                           
Equity Securities:                           
U.S. Equities $1,156  $38,799  $39,955  $14,720  $14,556  $29,276 $         -$24,688 $         -$25,551
Non-U.S. Equities  2,261   107,607   109,868   13,856   71,851   85,707 -72,892 -80,014
Balanced Managed Funds  10,571   1,938   12,509   9,761   1,542   11,303 10,07032,20342,273 10,29566,70777,002
Fixed Income Securities:                        
Government/Sovereign Securities  12,656   41,145   53,801   15,738   32,937   48,675 
Fixed Income Funds  15,781   55,943   71,724   17,483   51,922   69,405 
Fixed Income Funds:-211,561 -190,344
Other:                           
Real Estate/Other  -   15,989   15,989   3,027   12,586   15,613 -508 -489
Cash and Cash Equivalents  2,843   -   2,843   10,350   -   10,350 562-562 3,176-3,176
Total Non-U.S. Plan Assets $45,268  $261,421  $306,689  $84,935  $185,394  $270,329 $10,632$341,852$352,484 $13,471$363,105$376,576
Total Plan Assets $45,268  $447,948  $493,216  $84,935  $345,790  $430,725 $10,632$557,775$568,407 $13,471$586,071$599,542
 
Expected employer contributions to the defined benefit pension plans in fiscal year 20142017 will be approximately $19.4$17.9 million, including $9.5$8.0 million of minimum amounts required for the Company’s non-U.S. plans. From time to time, the Company may elect to make voluntary contributions to its defined benefit plans to improve their funded status.
 
Benefit payments to retirees from all defined benefit plans are expected to approximate $17.1 million in fiscal years 2014 and 2015, $19.4 million in fiscal year 2016, $19.9$22.8 million in fiscal year 2017, $21.4$24.0 million in fiscal year 2018, $23.9 million in fiscal year 2019, $25.4 million in fiscal year 2020, $25.2 million in fiscal year 2021 and $126.8$150.9 million for fiscal years 20192022 through 2023.2026.
 
The Company provides contributory life insurance and health care benefits, subject to certain dollar limitations for substantially all of its eligible retired U.S. employees. The retiree health benefit will no longer be available for any employee who retires after December 31, 2017. The cost of such benefits is expensed over the years the employee renders service and is not funded in advance. The accumulated post-retirement benefit obligation recognized in the Consolidated Statements of Financial Position as of April 30, 20132016 and 20122015 was $6.3$2.2 million and $5.7$6.7 million, respectively. Annual expenses for these plans for fiscal years 2013, 20122016, 2015 and 20112014 were $0.8$0.2 million, $0.7 million and $0.6$0.9 million, respectively.
 
The Company has defined contribution savings plans. The Company contribution is based on employee contributions and the level of Company match. The expense forCompany may make discretionary contributions to all employees as a group. The employer cash contributions to these plans amounted towere approximately $9.2$16.3 million, $9.1$14.8 million and $8.5$13.9 million in fiscal years 2013, 2012,2016, 2015, and 20112014 respectively. Approximately $0.8 million of the fiscal year 2015 contributions were reflected in the Restructuring Charges line item as they were related to contractual obligations resulting from the curtailment of the U.K. defined benefit pension plan. The expense recorded for these plans was approximately $16.2 million, $15.2 million and $15.7 million in fiscal years 2016, 2015, and 2014 respectively.
 
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Note 1817 – Stock-BasedShare-Based Compensation
 
All equity compensation plans have been approved by security holders. Atshareholders. Under the meeting of shareholders held in September 2009, shareholders approved the 20092014 Key Employee Stock Plan, as amended (“the Plan”). Under the Plan,, qualified employees are eligible to receive awards that may include stock options, performance-based stock awards and other restricted stock awards. Under the Plan, a maximum number of 8,000,0008 million shares of Company Class A stock may be issued. As of April 30, 2013,2016, there were approximately 5,775,5625,873,090 securities remaining available for future issuance under the Plan. The Company issues treasury shares to fund awards issued under the Plan.
 
Stock Option Activity:
 
Under the terms of the Company’s stock option plan, the exercise price of stock options granted may not be less than 100% of the fair market value of the stock at the date of grant. Options are exercisable over a maximum period of 10 years from the date of grantgrant. For fiscal years 2015 and prior, options generally vest 50% on the fourth and fifth anniversary date after the award is granted. Starting in fiscal year 2016, options vest 25% per year on April 30th. Under certain circumstances relating to a change of control, as defined, the right to exercise options outstanding couldmay be accelerated.
 
The following table provides the estimated weighted average fair value for options granted each period using the Black-Scholes option-pricing model and the significant weighted average assumptions used in their determination. The expected life represents an estimate of the period of time stock options will be outstanding based on the historical exercise behavior of option recipients. The risk-free interest rate is based on the corresponding U.S. Treasury yield curve in effect at the time of the grant. The expected volatility is based on the historical volatility of the Company’s Common Stock price over the estimated life of the option while, the dividend yield is based on the expected dividend payments to be made by the Company.
   
For the Years
Ended April 30,
 
   2013  2012  2011 
 Fair Value of Options on Grant Date $12.26  $14.11  $11.97 
              
 Weighted Average assumptions:            
 Expected Life of Options (years)  7.3   7.3   7.7 
 Risk-Free Interest Rate  1.2%   2.3%   2.7% 
 Expected Volatility  30.2%   29.0%   28.9% 
 Expected Dividend Yield  2.0%   1.6%   1.6% 
 Fair Value of Common Stock on Grant Date $48.06  $49.55  $40.02 
 
 
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 Rate2.1% 2.2% 2.1%
Expected Volatility29.7% 30.9% 30.5%
Expected Dividend Yield2.1% 1.9% 2.5%
Fair Value of Common Stock on Grant Date$55.99 $59.70 $39.53



 
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A summary of the activity and status of the Company’s stock option plans follows:

   2013  2012 2011
 Stock Options 
Options
(in 000’s)
 
 
Weighted Average
Exercise
Price
 
Weighted Average Remaining
Term
(in years)
 
 
 
Aggregate Intrinsic
Value
(in millions)
  
 
 
 
 
Options
(in 000’s)
 
Weighted
Average
Exercise
Price
 
 
 
 
 
Options
(in 000’s)
 
Weighted Average
Exercise
Price
 
 Outstanding at Beginning of Year  4,130  $40.74         4,258  $38.52   4,987  $36.51 
 Granted  394  $48.06         411  $49.55   413  $40.02 
 Exercised  (784) $34.44         (539) $29.97   (1,133) $30.23 
 Expired or Forfeited  (8) $35.00         -   -   (9) $32.54 
 Outstanding at End of Year  3,732  $42.85   4.6  $4.2   4,130  $40.74   4,258  $38.52 
 Exercisable at End of Year  2,166  $42.45   2.6  $3.1   2,301  $40.08   2,218  $35.40 
 Vested and Expected to Vest in the Future at April 30, 2013  3,603  $42.93   4.5  $4.0                 
 
 
2016
 
 
2015
 
 
2014
 
Options
(in 000’s)
Weighted Average Exercise
Price
Weighted Average Remaining Term (in years)
Aggregate
Intrinsic
Value (in millions)
 
Options
(in 000’s)
Weighted Average Exercise Price 
Options
(in 000’s)
Weighted Average Exercise Price
Outstanding at Beginning of Year1,921$45.50   2,508$42.34 3,732$42.85
Granted166$55.99   189$59.70 322$39.53
Exercised(103)$40.22   (747)$38.32 (1,421)$42.57
Expired or Forfeited(18)$51.02   (29)$49.32 (125)$47.65
Outstanding at End of Year1,966$46.624.3$8.6 1,921$45.50 2,508$42.34
Exercisable at End of Year1,140$45.223.1$5.3 815$42.31 1,191$39.16
Vested and Expected to Vest in the Future at April 301,925$46.614.3$8.5 1,872$42.91 2,432$42.38
 
The intrinsic value is the difference between the Company’s common stock price and the option grant price. The total intrinsic value of options exercised during fiscal years 2013, 20122016, 2015 and 20112014 was $3.1$1.5 million, $8.2$16.1 million and $23.5$12.4 million, respectively.  The total grant date fair value of stock options vested during fiscal year 20132016 was $8.8$5.7 million.
 
As of April 30, 2013,2016, there was $5.5$2.9 million of unrecognized share-based compensation expense related to stock options, which is expected to be recognized over a period up to 54 years, or 2.2 years on a weighted average basis.
 
The following table summarizes information about stock options outstanding and exercisable at April 30, 2013:2016:

    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
 
 $25.32 to $33.05   323   1.9  $31.88   318  $31.97 
 $35.04 to $38.55   950   3.7  $35.99   603  $36.53 
 $40.02 to $47.55   1,039   4.4  $44.57   628  $47.55 
 $48.46 to $49.55   1,420   5.8  $48.66   617  $48.46 
 Total/Average   3,732   4.6  $42.85   2,166  $42.45 
 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 $35.041542.4$34.88 154$34.88
$39.53 to $40.025604.4$39.75 253$40.02
$47.55 to $49.559153.2$48.65 692$48.77
$55.99 to $59.703377.9$57.87 41$55.99
Total/Average1,9664.3$46.62 1,140$45.22
 
Performance-Based and Other Restricted Stock Activity:
 
Under the terms of the Company’s long-term incentive plans, performance-based restricted stock awards are payable in restricted shares of the Company’s Class A Common Stock upon the achievement of certain three-year financial performance-based targets. During each three-year period, the Company adjusts compensation expense based upon its best estimate of expected performance. TheFor fiscal years 2015 and prior, restricted performance shares vest 50% on the first and second anniversary date after the award is earned. For three year periods beginning with fiscal year 2016, restricted performance shares vest 50% at the end of the three-year performance cycle and 50% on April 30th of the following year.
 
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The Company may also grant individual restricted awards of the Company’s Class A Common Stock to key employees in connection with their employment. TheFor fiscal years 2015 and prior, the restricted shares generally vest 50% at the end of the fourth and fifth years following the date of the grant. Starting with fiscal year 2016 grants, restricted performance shares vest ratably 25% per year on the anniversary of the grant.
 
Under certain circumstances relating to a change of control or termination, as defined, the restrictions would lapse and shares would vest earlier. Activity for performance-based and other restricted stock awards during fiscal years 2013, 20122016, 2015 and 20112014 was as follows (shares in thousands):
   2013  2012  2011 
   
Restricted
Shares
 
Weighted
Average
Grant Date
Value
 
Restricted
Shares
 
Restricted
Shares
 
 
Nonvested Shares at Beginning of Year
  1,042  $41.31   904   926 
 Granted  296  $47.31   272   255 
 Change in shares due to performance  (227) $45.31   31   78 
 Vested and Issued  (237) $38.06   (159)  (349)
 Forfeited  (37) $38.54   (6)  (6)
 Nonvested Shares at End of Year  837  $43.39   1,042   904 
 2016 20152014
 Restricted SharesWeighted Average Grant Date Value Restricted SharesRestricted Shares
 
Nonvested Shares at Beginning of Year
 
752
 
$50.64
 
 
745
 
837
Granted289$55.78 363348
Change in shares due to performance86$47.27 (65)(92)
Vested and Issued(154)$43.69 (159)(256)
Forfeited(58)$47.61 (132)(92)
Nonvested Shares at End of Year915$52.60 752745
 
As of April 30, 2013,2016, there was $16.0$21.2 million of unrecognized share-based compensation cost related to performance-based and other restricted stock awards, which is expected to be recognized over a period up to 5 years, or 2.93.2 years on a weighted average basis. Compensation expense for restricted stock awards is measured using the closing market price of the Company’s Class A Common Stock at the date of grant. The total grant date value of shares vested during fiscal years 2013, 20122016, 2015 and 20112014 was $9.0$7.2 million, $7.5$6.8 million and $13.5$9.7 million, respectively.
 
Director Stock Awards:
 
Under the terms of the Company’s Director Stock Plan (the “Director Plan”), each non-employee director receives an annual award of Class A Common Stock equal in value to 100% of the annual director retainer fee (excluding additional retainer fees paid to committee chairpersons), based on the stock price on the date of grant. The granted shares may not be sold or transferred during the time the non-employee director remains a director. There were 13,437; 12,47419,559; 12,131 and 11,14412,408 shares awarded under the Director Plan for fiscal years 2013, 20122016, 2015 and 2011,2014, respectively.
 
Note 1918 - Capital Stock and Changes in Capital Accounts
 
Each share of the Company’s Class B Common Stock is convertible into one share of Class A Common Stock. The holders of Class A stock are entitled to elect 30% of the entire Board of Directors and the holders of Class B stock are entitled to elect the remainder. On all other matters, each share of Class A stock is entitled to one tenth of one vote and each share of Class B stock is entitled to one vote.
 
During fiscal year 2011,2014, the Board of Directors of the Company approved a share repurchase program for an additional four million shares of Class A or Class B Common Stock. The approval of this repurchase program increased the number of shares that may be purchased from time to time in the open market and through privately negotiated transactions to eight million.  During fiscal year 2013,2016, the Company repurchased 1,846,8731,432,284 shares at an average price of $39.92$48.86 per share. As of April 30, 2013,2016, the Company has authorization from its Board of Directors to purchase up to 509,652746,836 additional shares.
 
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Note 2019 - Segment Information
 
In fiscal year 2013, the Company renamed its operating segments to better reflect its focus on providing knowledge and knowledge-based services in areas of research, professional development and education.  As a result, Scientific, Technical, Medical and Scholarly has been renamed Research; Professional/Trade has been renamed Professional Development; and Global Education has been renamed Education.  The Company maintains publishing, marketing and distribution centers principallyCompany’s operations are primarily located in the United States, Canada, Europe, Asia and Australia.  Below is a description of the Company’s three operating segments:
 
Research serves the world’s research and scholarly communities and is the largest publisher for professional and scholarly societies. Research products include scientific, technical, medical and scholarly research journals, books, major reference works, databases, clinical decision support tools, and laboratory manuals and workflow tools, in the publishing areas of the physical sciences and engineering, health sciences, social science and humanities and life sciences. Research customers include academic, corporate, government, and public libraries; researchers; scientists; clinicians; engineers and technologists; scholarly and professional societies; and students and professors. The Company’s Research products are sold and distributed globally onlinein digital and in 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. Publishing centers include Australia, China, Germany, India, Singapore, the United Kingdom and the United States.
 
Professional Development acquires, develops and publishes professional information and content delivered through print and digital books, subscription products,test preparation, assessments, online learning solutions and certification and training services and online applications in the areas ofservices. Communities served include business, finance, accounting, workplace learning, management, leadership, technology, behavioral health, engineering/architecture and education. Products are developed in print and digitally for worldwide distribution through multiple channels, including major chainschain and online booksellers, independent bookstores, libraries, colleges and universities, warehouse clubs, corporations, direct to consumer, websites, distributor networks and other online applications. Publishing centers include Australia, Canada, Germany, India, Singapore, the United Kingdom and the United States.
 
Education produces educationeducational content and servicessolutions, including online programcourse management for colleges and universities and integrated online teaching and learning resourcestools for instructors and students.students and online program services for higher education institutions. Education offers learning solutions, innovative products and services are principally delivered through college bookstores, and online distributors and directly to institutions, with customers having access to content in multi-mediadigital and custom print formats, as well as the traditional print textbook. Education products and servicesEducation’s cost-effective, flexible solutions are available in each of its publishing disciplines, including the sciences, engineering, computer science, mathematics, business and accounting, statistics, geography, hospitality and the culinary arts, education, psychology and modern languages.  Publishing centers include Asia, Australia, Canada, India, the United Kingdom and the United States.
 
Shared Services - The Company reports financial data for shared service functions, which are centrally managed for the benefit of the three global businesses, including Distribution and Operation Services, Technology Services,and Content Management, Occupancy and Other Administration support.
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.
 
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In fiscal year 2013, the Company changed its internal reporting of segment measures for the purposes of assessing performance and making resource allocation decisions. Accordingly, the Company now reports on segment performance after the allocation of certain direct Shared Services and Administrative Costs, identified as Contribution to Profit. These costs were previously reported as independent activities and not reflected within each segment's operating results. In addition, the management responsibility and reporting of certain Professional Development and Education product lines were realigned as of May 1, 2012.  Prior year results have been restated for comparative purposes for each of the changes described above.
 
Segment information is as follows (in thousands):
 For the years ended April 30,
 201620152014
RESEARCH:
   
    
Revenue$965,254$1,040,795$1,044,349
    
Direct Contribution to Profit440,301487,285479,189
Allocated Shared Services and Administrative Costs:   
Distribution and Operation Services(39,348)(44,620)(45,773)
Technology and Content Management(98,442)(96,486)(99,929)
Occupancy and Other(29,516)(30,405)(28,491)
Contribution to Profit$272,995$315,774$304,996
    
PROFESSIONAL DEVELOPMENT:   
    
Revenue $404,281 $407,023 $363,869
    
Direct Contribution to Profit$167,023$143,157130,427
Allocated Shared Services and Administrative Costs:   
Distribution and Operation Services (28,364) (30,838) (37,673)
Technology and Content Management (40,951) (48,002) (50,426)
Occupancy and Other (23,160) (26,180) (19,712)
Contribution to Profit $74,548 $38,137 22,616
    
EDUCATION:   
    
Revenue$357,502$374,622$366,977
    
Direct Contribution to Profit118,375127,729124,145
Allocated Shared Services and Administrative Costs:   
Distribution and Operation Services (15,207) (12,863) (15,685)
Technology and Content Management (51,612) (54,272) (48,097)
Occupancy and Other (15,688) (13,950) (11,769)
Contribution to Profit $35,868 $46,644 48,594
    
Total Contribution to Profit$383,411$400,555$376,206
    
Unallocated Shared Services and Administrative Costs (195,298) (162,816) (169,533)
Foreign Exchange Transaction Gains (Losses)4731,742 (8)
Interest Expense & Other, Net (13,793) (14,020) (11,131)
Income Before Taxes $174,793 $225,461 $195,534
   For the years ended April 30, 
   2013 2012 2011
           
 
RESEARCH:
         
           
 Revenue $1,009,825  $1,040,727  $998,902 
              
 Direct Contribution to Profit  420,963   452,274   424,797 
 Allocated Shared Services and Administrative Costs:            
 Distribution  (46,009)  (47,995)  (52,101)
 Technology Services  (66,105)  (65,734)  (63,820)
 Occupancy and Other  (22,343)  (21,085)  (17,820)
 Contribution to Profit $286,506  $317,460  $291,056 
              
 PROFESSIONAL DEVELOPMENT:            
              
 Revenue $416,495  $427,562  $430,998 
              
 Direct Contribution to Profit  86,678   108,431   92,031 
 Allocated Shared Services and Administrative Costs:            
 Distribution  (40,664)  (45,118)  (46,519)
 Technology Services  (29,187)  (25,248)  (23,858)
 Occupancy and Other  (11,381)  (13,011)  (11,684)
 Contribution to Profit $5,446  $25,054  $9,970 
              
 EDUCATION:            
              
 Revenue $334,458  $314,453  $312,651 
              
 Direct Contribution to Profit  103,828   107,711   104,509 
 Allocated Shared Services and Administrative Costs:            
 Distribution  (15,277)  (15,945)  (14,393)
 Technology Services  (30,727)  (27,572)  (21,840)
 Occupancy and Other  (7,079)  (5,771)  (5,179)
 Contribution to Profit $50,745  $58,423  $63,097 
              
 Total Contribution to Profit $342,697  $400,937  $364,123 
              
 Unallocated Shared Services and Administrative Costs  (143,270)  (120,518)  (115,975)
 Foreign Exchange Transaction Losses  (2,041)  (2,261)  (2,188)
 Interest Expense & Other, Net  (10,464)  (6,063)  (14,900)
 Income Before Taxes $186,922  $272,095  $231,060 
              

 

The following table reflects total shared services and administrative costs by function, which are allocated to business segments based on the methodologies described above:

 For the years ended April 30,
SHARED SERVICES AND ADMINISTRATIVE COSTS:201620152014
Distribution and Operation Services $83,109 $89,024 $100,310
Technology and Content Management 257,822 244,850 240,797
Finance 49,798 52,796 54,191
Other Administration 126,777 115,469 104,807
Restructuring Charges (see Note 6) 20,080 18,293 22,197
Impairment Charges (see Note 7) - - 4,786
Total $537,586 $520,432 $527,088
 
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             For the years ended April 30, 
   2013 2012 2011
 Total Assets         
 Research $1,371,082  $1,444,114  $1,486,052 
 Professional Development  520,703   548,751   465,752 
 Education  422,658   156,286   157,822 
 Corporate/Shared Services  491,932   383,795   320,515 
 Total $2,806,375  $2,532,946  $2,430,141 
              
 Expenditures for Long Lived Assets            
 Research $33,817  $24,454  $24,636 
 Professional Development  43,587   103,934   20,881 
 Education  240,283   20,729   21,545 
 Corporate/Shared Services  54,723   62,935   45,968 
 Total $372,410  $212,052  $113,030 
              
 Depreciation and Amortization            
 Research $60,049  $56,335  $54,423 
 Professional Development  35,434   34,734   34,954 
 Education  33,937   29,792   27,672 
 Corporate/Shared Services  20,096   17,230   15,457 
 Total $149,516  $138,091  $132,506 
In the fiscal year 2015, the Company modified its segment product/service revenue categories to reflect recent changes to the business, including acquisitions and restructuring. All prior periods have been revised to reflect the new categorization as follows:

 For the years ended April 30,
Total Revenue by Product/Service201620152014
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 Development730,434695,859554,146
Education426,077430,733455,848
Corporate/Shared Services548,235630,978674,998
Total$2,921,096$3,004,243$3,077,365
    
Expenditures for Long Lived Assets   
Research$32,294$18,288$23,311
Professional Development15,020179,17459,837
Education10,37614,18811,935
Corporate/Shared Services93,70569,12157,564
Total$151,395$280,771$152,647
    
Depreciation and Amortization   
Research$55,646$57,992$62,664
Professional Development37,83731,94328,542
Education35,53638,92840,023
Corporate/Shared Services26,83025,06216,868
Total$155,849$153,925$148,097
Export sales from the United States to unaffiliated customers amounted to approximately $150.3$164.4 million, $151.1$168.0 million and $149.8$169.0 million in fiscal years 2013, 2012,2016, 2015 and 2011,2014, respectively. The pretax income for consolidated operations outside the United States was approximately $156.1$159.2 million, $171.3$165.1 million and $162.8$159.4 million in fiscal years 2013, 2012,2016, 2015 and 2011,2014, respectively.

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Revenue from external customers based on the location of the customer and long-lived assets by geographic area were as follows (in thousands):
 Revenue  
Long-Lived Assets
(Technology, Property & Equipment)
 
Revenue
 
Long-Lived Assets
(Technology, Property & Equipment)
 2013  2012  2011  2013  2012  2011 2016 2015 2014 2016 2015 2014
United States $911,838  $893,662  $888,833  $134,107  $127,641  $107,377   $884,185   $920,166   $937,106   $166,878   $143,786   $135,711
United Kingdom  123,827   135,781   117,072   31,093   33,145   30,359 153,442 142,680 127,716 23,246 24,711 32,286
Germany  84,737   88,314   91,502   12,492   13,550   14,940 69,676 83,714 89,107 9,629 9,781 12,877
Asia  247,962   251,360   242,177   7,308   7,956   6,530 
Japan76,930 84,420 80,074 35 21 40
China52,815 45,159 41,581 244 307 516
India38,208 39,494 39,953 234 180 172
Australia  79,958   81,150   78,722   3,533   4,400   4,978 78,786 80,380 79,453 1,041 1,696 2,712
France49,970 57,492 25,376 9,517 6,720 -
Canada  66,440   74,797   79,227   1,092   1,287   1,357 50,243 56,949 61,559 1,617 1,606 729
Other Countries  246,016   257,678   245,018   -   -   - 272,782 311,986 293,270 2,329 4,202 3,675
Total $1,760,778  $1,782,742  $1,742,551  $189,625  $187,979  $165,541 $1,727,037 $1,822,440 $1,775,195 $214,770 $193,010 $188,718
                        



 
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Supplementary Financial Information - Results By Quarter (Unaudited)
 $ In millions, except per share data                       2013 2012  
 Revenue       
 First Quarter $410.7   $430.1 
 Second Quarter  431.8    447.0 
 Third Quarter  472.4    451.1 
 Fourth Quarter  445.9    454.5 
 Fiscal Year $1,760.8   $1,782.7 
             
 Gross Profit           
 First Quarter $283.5   $300.4 
 Second Quarter  302.2    314.3 
 Third Quarter  330.6    309.0 
 Fourth Quarter  312.2    315.6 
 Fiscal Year $1,228.5   $1,239.3 
             
 Operating Income           
 First Quarter (a) $39.0   $60.2 
 Second Quarter (c)  62.9    72.0 
 Third Quarter  83.6    78.5 
 Fourth Quarter (e)  13.9    69.7 
 Fiscal Year $199.4   $280.4 
             
 Net Income           
 First Quarter (a,b) $36.1   $50.8 
 Second Quarter (c)  43.1    50.8 
 Third Quarter (d)  57.1    62.9 
 Fourth Quarter (e)  7.9    48.2 
 Fiscal Year $144.2   $212.7 
             
     2013  2012 
 Income Per Share Diluted  Basic Diluted Basic 
 First Quarter (a,b) $0.60  $0.61 $0.82 $0.84 
 Second Quarter (c)  0.71  0.72  0.83  0.84 
 Third Quarter (d)  0.95  0.96  1.03  1.05 
 Fourth Quarter (e)  0.13    0.14  0.80  0.81 
 Fiscal Year $2.39  $ 2.43 $3.47 $3.53 
$ 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
a)In the first quarter of fiscal year 2013, the Company recorded restructuring charges related to certain activities that will either be discontinued, outsourced, or relocated to a lower cost region of $4.8 million ($3.5 million after tax or $0.06 per share).

b)  In the first quarters of fiscal years 20132016 and 2012,2015, the Company recorded non-cash deferred tax benefitsa restructuring charge of $8.4$3.4 million ($0.140.03 per share) and $8.8a restructuring credit of $(0.2) million, ($0.14 per share), respectively, principally associated with 2% legislative reductions in the U.K. corporate income tax rates for both years. The benefits reflect the remeasurement of all applicable U.K. deferred tax balances which are reflected at 23% as of April 30, 2013.under its restructuring programs.

c)b)  In the second quarter of fiscal year 2013,2016, the Company recorded impairment charges related toa restructuring charge of $3.7 million ($0.04 per share) under its restructuring program.
c)  In the divested Professional Development consumer publishing programsthird quarters of $15.5 million ($9.6 million after tax or $0.16 per share).  In addition,fiscal years 2016 and 2015, the Company reported a gain in the second quarterrecorded restructuring charges of fiscal year 2013 associated with the sale of key assets of$13.7 million ($0.16 per share) and $24.0 million ($0.28 per share) under its travel publishing program of $9.8 million ($6.2 million after tax or $0.10 per share).

d)  restructuring programs, respectively. In the third quarter of fiscal year 2012,2016, the Company recorded a $7.5deferred tax benefits of $5.9 million tax benefit ($0.120.10 per share) related toassociated with tax legislation enacted in the reversal of anUnited Kingdom that reduced the U.K. corporate income tax reserve recorded in conjunction with the Blackwell acquisition in fiscal year 2007.rates by 2%.

e)d)  In the fourth quarters of fiscal years 2016 and 2015, the Company recorded restructuring charges of $7.8 million ($0.08 per share) and $4.9 million ($0.07 per share), respectively, under its restructuring programs. In the fourth quarter of fiscal year 20132015, the Company recorded the following items:
·  Restructuring chargesa non-recurring tax benefit of $24.5$3.1 million ($16.3 million after tax or $0.270.05 per share) related to tax deductions claimed on the Company’s Restructuring and Reinvestment Program.write-up of certain foreign tax assets to fair market value.
·  Asset impairment charges of $15.2 million ($11.4 million after tax or $0.19 per share) related to certain controlled circulation publishing programs in the Company’s Research business and certain technology investments.
·  A loss on sale of certain Professional Development consumer publishing programs of $3.8 million ($3.6 million after tax or $0.06 per share).
·  A tax charge of $2.1 million ($0.04 per share) due to recently published IRS tax positions related to the Company’s ability to take certain deductions in the U.S.

 
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Schedule II
JOHN WILEY & SONS, INC., AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED APRIL 30, 2013, 2012,2016, 2015, AND 20112014

(Dollars in thousands)

      Additions/ (Deductions)     
 
 
 
Description
 
Balance at
Beginning
of Period
 
Charged to
Cost &
Expenses
 
Deductions
From
Reserves(2)
 
Balance
at End of
Period
 Year Ended April 30, 2013            
 
Allowance for Sales Returns (1)
 $35,773  $74,793  $78,732  $31,834 
 
Allowance for Doubtful Accounts
 $6,850  $1,863  $1,353  $7,360 
         Allowance for Inventory Obsolescence $33,932  $19,930  $25,619  $28,243 
 Year Ended April 30, 2012                
 
Allowance for Sales Returns (1)
 $48,909  $82,901  $96,037  $35,773 
 
Allowance for Doubtful Accounts
 $19,642  $2,111  $14,903  $6,850 
         Allowance for Inventory Obsolescence $36,917  $23,074  $26,059  $33,932 
 Year Ended April 30, 2011                
 
Allowance for Sales Returns (1)
 $55,311  $96,841  $103,243  $48,909 
 
Allowance for Doubtful Accounts
 $6,859  $13,989  $1,206  $19,642 
         Allowance for Inventory Obsolescence $39,674  $23,772  $26,529  $36,917 
  Additions/ (Deductions)  
 
 
Description
Balance at Beginning of Period
Charged to
Expenses and Other
Deductions From Reserves(2)
Balance at End of Period
Year Ended April 30, 2016    
Allowance for Sales Returns (1)
$25,340$56,094$61,573$19,861
Allowance for Doubtful Accounts$8,290$698$1,734$7,254
Allowance for Inventory Obsolescence$21,901$15,167$15,100$21,968
Year Ended April 30, 2015    
Allowance for Sales Returns (1)
$28,633$52,848$56,141$25,340
Allowance for Doubtful Accounts$7,946
$3,100(3)
$2,756$8,290
Allowance for Inventory Obsolescence$25,087$17,655$20,841$21,901
Year Ended April 30, 2014    
Allowance for Sales Returns (1)
$31,834$52,770$55,971$28,633
Allowance for Doubtful Accounts$7,360$2,441$1,855$7,946
Allowance for Inventory Obsolescence$28,243$18,202$21,358$25,087
 
 (1)Allowance for sales returnsSales Returns represents anticipated returns net of a recovery of inventory and royalty costs. The provision is reported as a reduction of gross sales to arrive at revenue and the reserve balance is reported as a reduction of accounts receivableAccounts Receivable with a corresponding increase in InventoryInventories and a reduction in Accounts and royalties payableRoyalties Payable (See Note 2).
 
 (2)Deductions from reserves include foreign exchange translation adjustments and accounts written off, less recoveries.

 
(3)Additions to Allowance for Doubtful Accounts includes approximately $2 million related to the CrossKnowledge acquisition on May 1, 2014.


 
98
 

Item 9.      Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
 
None
 
Item 9A.   Controls and Procedures
 
Disclosure Controls and Procedures:  As The Company's Chief Executive Officer and Chief Financial Officer, together with the Chief Accounting Officer and other members of the Company's management, have conducted an evaluation of the Company’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”) as of the end of the period covered by this report, an evaluation was performed under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as such term is defined in Rule 13a-15(e) of the Exchange Act.report.  Based on thatthis evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the Company’sCompany's disclosure controls and procedures provide reasonable assurancewere effective to ensure that information required to be disclosed by the Company in reports that it filesfiled or submitssubmitted under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified inby the Securities and Exchange CommissionCommission's rules and forms and (ii) accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
 
Management’s Report on Internal Control over Financial Reporting: Our Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) of the Exchange Act.  Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based upon the framework in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.  Based on that evaluation, our management concluded that our internal control over financial reporting is effective as of April 30, 2013.2016.
 
KPMG LLP, an independent registered public accounting firm, has audited the consolidated financial statements included in this Annual Report on Form 10-K and, as part of their audit, has issued their report, included herein, on the effectiveness of our internal control over financial reporting.
 
Changes in Internal Control over Financial Reporting: There were no changes in our internal control over financial reporting in the fourth quarter of fiscal year 2016 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting during fiscal year 2013.reporting.
 
Item 9B.   Other Information

None
 
PART III
 
Item 10.    Directors, Executive Officers and Corporate Governance
 
The name, age and background of each of the directors nominated for election are contained under the caption “Election of Directors” in the Proxy Statement for our 20132016 Annual Meeting of Shareholders (“20132016 Proxy Statement”) and are incorporated herein by reference.
 
Information on the audit committee financial experts is contained in the 20132016 Proxy Statement under the caption “Report of the Audit Committee” and is incorporated herein by reference.
 
99
 
Information on the Audit Committee Charter is contained in the 20132016 Proxy Statement under the caption “Committees of the Board of Directors and Certain Other Information concerning the Board”Board.”
 
Information with respect to the Company’s Corporate Governance principles is publicly available on the Company’s Corporate Governance website at www.wiley.com/WileyCDA/Section/id-301708.html.
 
Executive Officers
 
Set forth below are the executive officers of the Company as of April 30, 2013.2016. Each of the officers listed will serve until the next organizational meetings of the Board of Directors of the Company and until each of the respective successors are duly elected and qualified.
 
PETER BOOTH WILEYMATTHEW S. KISSNER - 7062
 September 2002October 2015 - Chairman of the Board, John Wiley and Sons, Inc. (Director since 1984)2003)
 
     STEPHEN M. SMITHMARK J. ALLIN – 5855
 May 2011June 2015 - President and Chief Executive Officer and Director, John Wiley and Sons, Inc.
 June 2009 -February 2015- Executive Vice President and Chief Operating Officer –Officer- responsible for strategy and operations for all publishing, editorial, salesof Wiley’s businesses. (succeeded Steve Smith as President and marketing and business development activities globally.Chief Executive Officer, effective June 1, 2015.)
 May 2007 - Senior Vice President, Wiley Europe, Asia and AustraliaSeptember 2014 – responsible for all company activities and operations in the world outside North America
ELLIS E. COUSENS – 61
2001 - Executive Vice President, and Chief Financial and Operations Officer – responsible for  the Company’s worldwide financial organization, strategic planning and business development, internal audit, information technology, distribution and investor relations.Professional Development

PATRIK U. DYBERG – 49
February 2012 – Senior Vice President and Chief Technology Officer – responsible for leading the Company’s global technology functions.
June 2009 – Senior Vice President, Global Solutions Development of LexisNexis – responsible for the development and maintenance of a large suite of customer-facing products.
December 2005 – Vice President and Chief Information Officer of McGraw Hill – responsible for transforming the technology organization from three different business units into a single shared services team.
MARK J. ALLIN – 51
 August 2010 - Senior Vice President, Professional Development – responsible for leading the Company’s global Professional Development business.
JOHN A. KRITZMACHER – 55
 January 2010 -July 2013 – Chief Financial Officer and Executive Vice President, Technology and Chief Operating Officer, Professional and TradeOperations, John Wiley & Sons Inc. – responsible for PD profitabilitythe Company’s worldwide financial organization, strategic planning and marketing operations.business development, technology, internal audit, customer service, distribution and investor relations.
 July 2009October 2012 - Senior Vice President Asia/Pacific and International Development – responsible for managing Wiley’s business operations in Asia and Australia.of Business Operations, Organizational Planning & Structure at WebMD Health Corp
 July 2006October 2008 - Managing Director, Wiley Asia – responsible for managing Wiley’s business operations in AsiaChief Financial Officer and Executive Vice President of Global Crossing Ltd
 
WILLIAM ARLINGTONMARY-JO O’LEARY – 6453 (to be succeeded by Archana Singh effective June 30, 2016)
 1996 -September 2014 – Executive Vice President, Human Resources
May 2013 – Senior Vice President, Human Resources – responsible for managing the Company’s Global Human Resources organization. (Succeeded by Mary-Jo O’Leary on May 1, 2013 and transitioned to the role of Senior Advisor to the Senior Vice President until his retirement on June 30, 2013).
MARY-JO O’LEARY – 50
 October 2012 – Vice President and Director, Human Resources – responsible for working with the Senior Vice President, Human Resources to manage the Company’s Global Human Resources organization. (Succeeded William Arlington as Senior Vice President, Human Resources on May 1, 2013).
 July 2003 – Vice President, Marketing & Sales – responsible for managing the sales, marketing and custom publishing functions for the Company’s Education business.
 
JOSEPH S. HEIDER – 54ARCHANA SINGH - 46 (to succeed Mary-Jo O’Leary effective June 30, 2016)
 May 2011 - Senior2016 – Executive Vice President Education – responsible for leading the Company’s worldwide Education business.and Chief Human Resources Officer
 January 20112014 – Chief Human Resources Officer, Hay Group - Senior Vice President, US Higher Education – responsible for leadingaligning HR strategies and initiatives to support the Company’s US  Higher Education business.organization into its’ next stage of growth. Leading all aspects of Human Resources with a strong focus on talent management, culture alignment and integration.
 May 2010 -2012 – Vice President, Human Resources, Computer Science Corporation - Human Resources Leader for CSC’s enterprise business (technology consulting, application software, services and Chief Operating Officer, Higher Education – responsible for  leading the Company’s US Higher Education Product Development and New Business Development and Production Groups.regions)
 October 2000 -2008 – Corporate Vice President, Product and E-Business Development – responsibleHuman Resources, Advanced Micro Devices (“AMD”) - Human Resources Business Partner for leading the Company’s Higher Education Product and New Business Development Group.global sales, marketing, manufacturing, product engineering, shared services, corporate functions
100
 
GARY M. RINCK – 6164
September 2014 – Executive Vice President, General Counsel
 2004 -– Senior Vice President, General Counsel – responsible for all of the Company’s legal and corporate governance functions at Wiley.
 
STEVEN J. MIRONPHILIP CARPENTER – 5260
 May 2010 - Senior2015 – Executive Vice President, Global Research – responsible for leading the Company’s worldwide Researchjournals publishing business.
 November 2009 - Chief Operating Officer, Scientific, Technical, MedicalSeptember 2014 – Senior Vice President and Scholarly business – responsible for Research's editorial strategy and operations as well as product marketing.Managing Director, Research Communications
 February 2007 -May 2013 – Vice President and Managing Director, Physical ScienceResearch Communications – responsible for leading Research's Physicalthe Company’s worldwide journals publishing business, as part of the broader Research organization.
December 2007 – Vice President and Managing Director, SSH– responsible for leading the Company’s worldwide Social Sciences business.and Humanities journals publishing business, as part of the broader Research organization.
 
VINCENT MARZANO – 5053
September 2014 – Senior Vice President, Treasurer
 September 2006 - Vice President, Treasurer – responsible for global treasury operations, insurable risk management, accounts receivable, and credit and collections.

EDWARD J. MELANDO – 5760
 January 2013 – Senior Vice President, Corporate ControllerController– and Chief Accounting Officer – responsible for Financial Reporting, Taxes, and Financial Shared Services.
 2002 - Vice President, Corporate Controller and Chief Accounting Officer –Controller– responsible for Financial Reporting, Taxes and the Financial Shared Services.
 
REED ELFENBEIN – 5962
May 2015 – Executive Vice President, International Development and Global Research Sales
May 2014 - Senior Vice President, International Development and Global Research Sales
 October 2012 – Senior Vice President, International Development and Global ResearchSTMS – leads team responsible for increasing market share in growing and emerging markets and supervisesleads the worldwide Research sales team.
 February 2007 – Vice President and Managing Director, Sales and Marketing – supervisedresponsible for leading the domestic and international sales and marketing teams.
 
CLAY E. STOBAUGH – 5558
September 2014 – Executive Vice President & Chief Marketing Officer
October 2013 - Senior Vice President & Chief Marketing Officer
 August 2011 – Senior Vice President, Corporate Marketing – responsible for strategic marketing and customer relationship management.
July 2005 – Executive Vice President, Sales and Marketing of SRSsoft, Inc. – responsible for all sales and marketing activity.
 
JOHN W. SEMEL – 4245
May 2015- Executive Vice President and Chief Strategy Officer- responsible for developing, prioritizing, and implementing strategies that drive business growth.
 February 2009 – Senior Vice President, Planning and Development – responsible for global acquisitions and divestitures, strategic investments, strategic planning, corporate alliances and business development.
101
JOAN O’NEIL - 53
 2008November 2015 – Executive Vice President, Business Development of The Weinstein CompanyKnowledge & Learning – responsible for acquisitions, strategic investments, alliances, joint ventures,leading the Company’s global Knowledge & Learning business
September 2014 – Senior Vice President and managing integrated marketing across media properties.Managing Director, Knowledge Services, Professional Development – responsible for leading the Knowledge Services business within the Professional Development business
May 2013 – Vice President and Managing Director, Business, Finance & Accounting, Professional Development – responsible for leading the global business, finance and accounting programs within Professional Development
January 2011 – Vice President & Group Executive Publisher, Professional/Trade – responsible for the finance and accounting programs within the Professional/Trade business
 
MICHAEL PRESTON – 45JEFFREY L. SUGARMAN - 60
May 2015 – Executive Vice President, Talent Solutions and Education Services Group – responsible for leading Wiley’s combined Talent Solutions and Education Services (i.e. CrossKnowledge, Deltak, Profiles International and Inscape Publishing) in the corporate learning and higher education marketplaces.
 February 20092012 – Senior Vice President, Venture Development – responsible for leading execution and integration of Wiley’s talent solutions business acquisition including Inscape Publishing, CrossKnowledge and Profiles International.
November 2001 – President and CEO, Inscape Publishing – responsible for the transformation into an independent company after being acquired by a prominent New York-based private equity firm.
EDWARD J. MAY – 53
November 2013 - Corporate Secretary – responsible for Board administration and compliance with corporate regulatory requirements.
 August 2005October 2012 - Senior AssistantDirector of Corporate Secretary of Sunoco, Inc.Governance, Tyco International Ltd. – responsible for the governance of the company’s subsidiaries, joint venturesstructure and limited liability companies including Sunoco Logistics Partners, L.P. and Sun Coke entities. ERM program at Tyco International Ltd.
 
Item 11.    Executive Compensation
 
Information on compensation of the directors and executive officers is contained in the 20132016 Proxy Statement under the captions “Directors’ Compensation” and “Executive Compensation,” respectively, and is incorporated herein by reference.
 
Item 12.    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
 
Information on the beneficial ownership reporting for the directors and executive officers is contained under the caption “Section 16(a) Beneficial Ownership Reporting Compliance” within the “Beneficial Ownership of Directors and Management” section of the 20132016 Proxy Statement and is incorporated herein by reference. Information on the beneficial ownership reporting for all other shareholders that own 5% of more of the Company’s Class A or Class B Common Stock is contained under the caption “Voting Securities, Record Date, Principal Holders” in the 20132016 Proxy Statement and is incorporated herein by reference.

102
The following table summarizes the Company’s equity compensation plan information as of April 30, 2013:2016:

Plan Category 
Number of
securities to be
issued upon
exercise of
outstanding
options, warrants
and rights
(a)
 
Weighted-average
exercise price of
outstanding
options, warrants
and rights
(b)
 
Number of
securities remaining
available for future
issuance under equity
compensation plans
(excluding securities
reflected in column
(a) (c)
Number of
securities to be
issued upon
exercise of
outstanding
options, warrants
and rights
 
Weighted-average
exercise price of
outstanding
options, warrants
and rights
 
Number of
securities remaining
available for future
issuance under equity
compensation plans
              
Equity compensation plans approved by shareholders  4,569,430(1) $42.85   5,775,562  2,880,697 $46.62  5,873,090
            
Equity compensation plans not approved by shareholders  -   -   - 
            
Total  4,569,430  $42.85   5,775,562 

(1)  This amount includes the following awards issued under the 2009 Key Employee Stock Plan:

 
(1) This amount includes the following awards issued under the 2009 Key Employee Stock Plan:
·  3,732,0281,965,940 shares issuable upon the exercise of outstanding stock options with a weighted average exercise price of $42.85.$46.62
·  837,402914,757 non-vested performance-based and other restricted stock awards. Since these awards have no exercise price, they are not included in the weighted average exercise price calculation.
 
All of the Company’s equity compensation plans are approved by shareholders.
Item 13.    Certain Relationships and Related Transactions, and Director Independence
 
Information on related party transactions and the policies and procedures for reviewing and approving related party transactions are contained under the caption “Transactions with Related Persons” within the “Board and Committee Oversight of Risk” section of the 20132016 Proxy Statement and are incorporated herein by reference.
 
Information on director independence is contained under the caption “Director Independence” within the “Board of Directors and Corporate Governance” section of the 20132016 Proxy Statement.
 
Item 14.    Principal Accountant Fees and Services
 
Information required by this item is contained in the 20132016 Proxy Statement under the caption “Report of the Audit Committee” and is incorporated herein by reference.


 
103
 
PART IV

Item 15.   Exhibits, Financial Statement Schedules and Reports on Form 8-K
 
(a)Financial Statements and Schedules are included in the attached index on page 3 and are filed as part of this report
(b)Reports on Form 8-K submitted to the Securities and Exchange Commission since the filing of the Company’s 10-Q on March 11, 2013:10, 2016:
Announcement of the election of director issued on Form 8-K dated May 2, 2016.
 Earnings release on the fiscal year 20132016 results issued on Form 8-K dated June 18, 2013,14, 2016, which included certain condensed financial statements of the Company.
Employment agreement and announcement of John A. Kritzmacher as the Company’s next Executive Vice President and Chief Financial Officer issued on Form 8-K dated June 4, 2013.
(c)Exhibits
3.1Restated Certificate of Incorporation (incorporated by reference to the Company’s Report on Form 10-K for the year ended April 30, 1992).
3.2Certificate of Amendment of the Certificate of Incorporation dated October 13, 1995 (incorporated by reference to the Company’s Report on Form 10-K for the year ended April 30, 1997).
3.3Certificate of Amendment of the Certificate of Incorporation dated as of September 1998 (incorporated by reference to the Company’s Report on Form 10-Q for the quarterly period ended October 31, 1998).
3.4Certificate of Amendment of the Certificate of Incorporation dated as of September 1999 (incorporated by reference to the Company’s Report on Form 10-Q for the quarterly period ended October 31, 1999).
3.5By-Laws as Amended and Restated dated as of September 2007 (incorporated by reference to the Company’s Report on Form 10-K for the year ended April 30, 2008).
10.1Amended and Restated Credit Agreement dated as of November 2, 2011,March 1, 2016, among the Company and Bank of America, N.A., as Administrative Agent, Swing Lineline Lender, and L/C Issuer, and Other Lenders Party Hereto (incorporated by reference to the Company’s Report on Form 10-Q for the quarterly period ended OctoberJanuary 31, 2011)2016).
10.2Agreement of the Lease dated as of August 4, 2000,July 14, 2014 between Block A South Waterfront Development L.L.C.,Hub Properties Trust as Landlord, an independent third party and the Company,John Wiley and Sons, Inc as Tenant (incorporated by reference to the Company’s Report on Form 10-Q for the quarterly period ended July 31, 2000)2014).
10.320092014 Director Stock Plan (incorporated by reference to the Company’s Report on Form 10-Q for the quarterly period ended October 31, 2009)2014).
10.420092014 Executive Annual Incentive Plan (incorporated by reference to the Company’s Report on Form 10-Q for the quarterly period ended October 31, 2011)2014).
10.5Amended 20092014 Key Employee Stock Plan (Revised September 15, 2011 and incorporated(incorporated by reference to the Company’s Report on Form 10-Q for the quarterly period ended October 31, 2011)2014).
10.6Supplemental Executive Retirement Plan as Amended and Restated effective as of January 1, 2009 (incorporated by reference to the Company’s Report on Form 10-K for the year ended April 30, 2010).
10.7Amendments A and B to the Supplemental Executive Retirement Plan as Amended and Restated Effective January 1, 2009 (incorporated by reference to the Company’s Report on Form 10-Q for the quarterly period ended July 31, 2010).
10.8*10.8Resolution amending the Supplemental Executive Retirement Plan to Cease Accruals and Freeze Participation effective June 30, 2013.
10.9Supplemental Benefit Plan Amended and Restated as of January 1, 2009, including amendments through August 1, 2010 (incorporated by reference to the Company’s Report on Form 10-Q for the quarterly period ended January 31, 2011).
10.10*10.10Resolution amending the Supplemental Benefit (Retirement) Plan to Cease Accruals and Freeze Participation effective June 30, 2013.
10.11Deferred Compensation Plan as Amended and Restated Effective as of January 1, 2008 (incorporated by reference to the Company’s Report on Form 10-K for the year ended April 30, 2010).
10.12*10.12Resolution amending the Deferred Compensation Plan effective July 1, 2013.
104
10.13Deferred Compensation Plan for Directors’ 2005 & After Compensation (incorporated by reference to the Report on Form 8-K, filed December 21, 2005).
10.14*Form of the Fiscal Year 20142017 Qualified Executive Long Term Incentive Plan.
10.15*Form of the Fiscal Year 20142017 Qualified Executive Annual Incentive Plan.
10.16*Form of the Fiscal Year 20142017 Executive Annual Strategic Milestones Incentive Plan.
10.17Form of the Fiscal Year 20132016 Qualified Executive Long Term Incentive Plan (incorporated by reference to the Company’s Report on Form 10-K for the year ended April 30, 2012)2015).
10.18Form of the Fiscal Year 20132016 Qualified Executive Annual Incentive Plan (incorporated by reference to the Company’s Report on Form 10-K for the year ended April 30, 2012)2015).
10.19Form of the Fiscal Year 20132016 Executive Annual Strategic Milestones Incentive Plan (incorporated by reference to the Company’s Report on Form 10-K for the year ended April 30, 2012)2015).
10.20Form of the Fiscal Year 20122015 Qualified Executive Long Term Incentive Plan (incorporated by reference to the Company’s Report on Form 10-K for the year ended April 30, 2011)2014).
10.21Form of the Fiscal Year 20122015 Qualified Executive Annual Incentive Plan (incorporated by reference to the Company’s Report on Form 10-Q10-K for the quarterly periodyear ended July 31, 2011)April 30, 2014).
10.22Form of the Fiscal Year 20122015 Executive Annual Strategic Milestones Incentive Plan (incorporated by reference to the Company’s Report on Form 10-Q10-K for the quarterly periodyear ended July 31, 2011)April 30, 2014).
10.23Senior Executive Employment Agreement to Arbitrate dated as of April 29, 2003 (incorporated by reference to the Company’s Report on Form 10-K for the year ended April 30, 2003).
10.24Schedule of individual officers party to Senior Executive Employment Agreement to Arbitrate dated as of April 29, 2003 (incorporated by reference to the Company’s Report on Form 10-Q for the quarterly period ended October 31, 2009).
10.25Senior Executive Non-competition and Non-Disclosure Agreement dated as of April 29, 2003 (incorporated by reference to the Company’s Report on Form 10-K for the year ended April 30, 2003).
10.26Schedule of individual officers party to Senior Executive Non-Competition and Non-Disclosure Agreement dated as of April 29, 2003 (incorporated by reference to the Company’s Report on Form 10-Q for the quarterly period ended October 31, 2009).
10.2710.25Senior executive Employment Agreement dated as of September 17, 2010 and effective as of May 1, 2011, between Stephen M. Smith and the Company (incorporated by reference to the Company’s Report on Form 8-K dated as of September 22, 2010).
10.2810.26Senior executiveExecutive Employment Agreement dated as of December 1, 2008,April 15, 2015 between Ellis E. CousensMark Allin and the Company (incorporated by reference to the Company’s Report on Form 10-Q for the quarterly period ended January 31, 2009)8-K dated as of April 15, 2015).
10.2910.27Senior executive Employment Agreement dated as of May 20, 2013 between John A. Kritzmacher and the Company (incorporated by reference to the Company’s Report on Form 8-K dated as of June 4, 2013).
10.28Senior executive Employment Agreement letter dated as of March 15, 2004, between Gary M. Rinck and the Company (incorporated by reference to the Company’s Report on Form 10-K for the year ended April 30, 2011).
10.30Senior executive Employment Agreement dated as of May 1, 2010, between Stephen J. Miron and the Company (incorporated by reference to the Company’s Report on Form 10-K for the year ended April 30, 2011).
10.31Senior executive Employment Agreement dated as of November 1, 2011, between Mark J. Allin and the Company (incorporated by reference to the Company’s Report on Form 10-K for the year ended April 30, 2012).
21*List of Subsidiaries of the Company
23*Consent of KPMG LLP
31.1*Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
*           Filed herewith
 
105
 
101.INSXBRL Instance Document
101.SCHXBRL Taxonomy Extension Schema Document
101.CALXBRL Taxonomy Extension Calculation Linkbase Document
101.LABXBRL Taxonomy Extension Label Linkbase Document
101.PREXBRL Taxonomy Extension Presentation Linkbase Document
101.DEFXBRL Taxonomy Extension Definition Linkbase Document
*Filed herewith
106

SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

  JOHN WILEY & SONS, INC. 
  (Company) 
    
Dated:  June 26, 201329, 2016By: /s/ Stephen M. Smith /s/ Mark Allin 
  Stephen M. SmithMark Allin 
  President and
Chief Executive Officer 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated.
 
Signatures Titles Dated
/s/ Stephen M. SmithMark Allin President and Chief Executive Officer June 26, 201329, 2016
Stephen M. SmithMark Allin Director  
     
/s/ Ellis E. CousensJohn A. KritzmacherChief Financial Officer andJune 29, 2016
John A. Kritzmacher Executive Vice President, andJune 26, 2013
Ellis E. CousensChief FinancialTechnology and Operations Officer  
     
/s/ Edward J. Melando Senior Vice President, Controller and June 26, 201329, 2016
Edward J. Melando Chief Accounting Officer  
     
/s/ Peter Booth Wiley Director June 26, 201329, 2016
Peter Booth Wiley    
     
/s/ Jesse C. Wiley EditorManager, Business Development Client Solutions and Director June 26, 201329, 2016
Jesse C. Wiley Director  
     
/s/ William J. Pesce Director June 26, 201329, 2016
William J. Pesce    
     
/s/ William B. Plummer Director June 26, 201329, 2016
William B. Plummer    
     
/s/ Kalpana Raina Director June 26, 201329, 2016
Kalpana Raina    
     
/s/ Mari J. Baker Director June 26, 201329, 2016
Mari J. Baker
/s/ Jean-Lou ChameauDirectorJune 26, 2013
Jean-Lou Chameau    
     
/s/ Mathew S. Kissner Director June 26, 201329, 2016
Mathew S. Kissner    
     
/s/ Raymond McDaniel, Jr. Director June 26, 201329, 2016
Raymond McDaniel, Jr.    
     
/s/ Eduardo R. Menascé Director June 26, 201329, 2016
Eduardo R. Menascé    
     
/s/ Linda KatehiGeorge Bell Director June 26, 201329, 2016
Linda KatehiGeorge Bell
/s/ Laurie LeshinDirectorJune 29, 2016
Laurie Leshin
/s/ William PenceDirectorJune 29, 2016
William Pence    

 


 
107
 
Exhibit 21

Exhibit 21
SUBSIDIARIES OF JOHN WILEY & SONS, INC.(1)
As of April 30, 20132016
  
  
 Jurisdiction
 In Which
 Incorporated
  
John Wiley & Sons International Rights, Inc.Delaware
JWS HQ,Wiley.edu, LLCNew Jersey
JWS DCM, LLCNew Jersey
Deltak edu, IncDelaware
Deltak edu, LLCDelaware
Efficient Learning Systems, IncArizona
Wiley Brasil Divulgacao De Materiais Didaticos LTDA
Wiley Periodicals, Inc.
Brazil
Delaware
Wiley Publishing Services, Inc.
Wiley Subscription Services, Inc.
Inscape Publishing Inc.
Delaware
Delaware
Inscape Publishing LLCDelaware
Profiles International, LLCTexas
Wiley Publishing LLCDelaware
Wiley India Private Ltd.India
Crossknowledge Inc.Delaware
WWL Corp.Delaware
John Wiley & Sons Rus LLCDelaware
Wiley International, LLCDelaware
John Wiley & Sons UK LLPUnited Kingdom
John Wiley & Sons UK 2 LLPUnited Kingdom
Wiley Japan KKJapan
Wiley Europe Investment Holdings, Ltd.United Kingdom
Wiley U.K. (Unlimited Co.)United Kingdom
Wiley Europe Ltd.United Kingdom
John Wiley & Sons, Ltd.United Kingdom
John Wiley & Sons Singapore Pte. Ltd.Singapore
John Wiley & Sons Commercial Service (Beijing) Co., Ltd.China
J Wiley Ltd.United Kingdom
     John Wiley & Sons GmbHGermany
Wiley-VCH Verlag GmbH & Co. KGaAGermany
CrossKnowledge Group LimitedUnited Kingdom
E-Learning SASFrance
Epistema SarlFrance
Wiley Heyden Ltd.United Kingdom
Wiley Distribution Services Ltd.United Kingdom
Blackwell Publishing (Holdings) Ltd.United Kingdom
Blackwell Publishing Ltd.United Kingdom
John Wiley & Sons Singapore Pte. Ltd.Singapore
John Wiley & Sons Commercial Service Co. Ltd.China
John Wiley & Sons GmbHGermany
Wiley-VCH Verlag GmbH & Co. KGaAGermany
Blackwell Science Ltd.United Kingdom
Blackwell Science (Overseas Holdings)United Kingdom
John Wiley & Sons LTD A/SDenmark
Blackwell Verlag GmbHGermany
Wiley Publishing Japan KKJapan
Blackwell SciencePublishing (HK) Ltd.Hong Kong
Wiley Publishing Australia Pty Ltd.Australia
John Wiley and Sons Australia, Ltd.Australia
Blackwell Publishing Asia Pty. LtdAustralia
John Wiley & Sons Canada LimitedCanada
John Wiley & Sons (HK) LimitedHong Kong
Wiley Publishing Canada LimitedCanada
Simulated Biomolecular Systems, Inc.Canada
  
(1)\ The names of other subsidiaries that would not constitute a significant subsidiary in the aggregate have been omitted.



 
108
 
Exhibit 23


CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



The Board of Directors and Shareholders
John Wiley & Sons, Inc.:
 
 
We consent to the incorporation by reference in the Registration Statement No.Nos. 33-62605 and 333-167697 on Form S-8 of John Wiley & Sons, Inc. (the “Company”) of our reports dated June 26, 2013,29, 2016, with respect to the consolidated statements of financial position of John Wiley & Sons, Inc. as of April 30, 20132016 and 2012,2015, and the related consolidated statements of income, comprehensive income, cash flows and shareholders’ equity for each of the years in the three-year period ended April 30, 2013,2016, and the related financial statement schedule, and the effectiveness of internal control over financial reporting as of April 30, 2013,2016, which reports appear in the April 30, 20132016 annual report on Form 10-K of John Wiley & Sons, Inc.

/s/  KPMG LLP

Short Hills, New Jersey
June 26, 201329, 2016
 


 
109
 
Exhibit 31.1

CERTIFICATIONS PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Stephen M. Smith, President and Chief Executive Officer of John Wiley & Sons, Inc. (the “Company”), hereby certify that:

1.  I have reviewed this annual report on Form 10-K of the Company;
2.  Based on my knowledge, this annual report does not contain any untrue statements of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
3.  Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;
4.  The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:
a.  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
c.  Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and
d.  Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter (the Company’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and
5.  The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent function):
a.  all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting that are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and
b.  any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.


By:/s/ Stephen M. Smith
Stephen M. Smith
President and Chief Executive Officer
Dated: June 26, 2013
Exhibit 31.2

CERTIFICATIONS PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Ellis E. Cousens, Executive Vice President and Chief Financial and Operations Officer of John Wiley & Sons, Inc. (the “Company”), hereby certify that:

1.  I have reviewed this annual report on Form 10-K of the Company;
2.  Based on my knowledge, this annual report does not contain any untrue statements of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
3.  Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;
4.  The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:
a.  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
c.  Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and
d.  Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter (the Company’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and
5.  The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent function):
a.  all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting that are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and
b.  any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

By:/s/ Ellis E. Cousens
Ellis E. Cousens
Executive Vice President and
Chief Financial and Operations Officer
Dated: June 26, 2013
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of John Wiley & Sons, Inc. (the “Company”) on Form 10-K for the year ended April 30, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Stephen M. Smith, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1)  the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)  the information contained in the Report fairly presents, in all material respects, the financial condition and   results of operations of the Company.

By:/s/ Stephen M. Smith
Stephen M. Smith
President and Chief Executive Officer
Dated:  June 26, 2013


 
Exhibit 32.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of John Wiley & Sons, Inc. (the “Company”) on Form 10-K for the year ended April 30, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Ellis E. Cousens, Executive Vice President and Chief Financial and Operations Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
(1)  the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)  the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


By:/s/ Ellis E. Cousens
Ellis E. Cousens
Executive Vice President and
Chief Financial and Operations Officer
Dated:  June 26, 2013