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
|
Trading Symbol
|
||
Class A Common Stock, par value $1.00 per share
|
New York Stock Exchange
|
JW.A
|
||
Class B Common Stock, par value $1.00 per share
|
New York Stock Exchange
|
JW.B
|
Securities registered pursuant to Section 12(g) of the Act:
|
||
None
|
Large accelerated filer
☒
|
Accelerated filer
☐
|
Non-accelerated filer
☐
|
Smaller reporting company
☐
|
Emerging growth company
☐
|
PART I
|
PAGE
|
|
Business
|
4
|
|
Risk Factors
|
10
|
|
Unresolved Staff Comments
|
17
|
|
Properties
|
18
|
|
Legal Proceedings
|
18
|
|
Mine Safety Disclosures
|
18
|
|
19
|
||
PART II
|
||
Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
20
|
|
Selected Financial Data
|
20
|
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
22
|
|
Quantitative and Qualitative Disclosures About Market Risk
|
42
|
|
Financial Statements and Supplementary Data
|
44
|
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
92
|
|
Controls and Procedures
|
92
|
|
Other Information
|
92
|
|
PART III
|
||
Directors, Executive Officers and Corporate Governance
|
93
|
|
Executive Compensation
|
93
|
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
93
|
|
Certain Relationships and Related Transactions, and Director Independence
|
94
|
|
Principal Accounting Fees and Services
|
94
|
|
PART IV
|
||
Exhibits, Financial Statement Schedules
|
95
|
|
Form 10-K Summary
|
96
|
|
|
• |
Adjusted EPS, Adjusted Revenue, Adjusted Operating Profit, Adjusted Contribution to Profit, and Adjusted EBITDA provide a more comparable basis to analyze our
operating results and earnings over time and are measures commonly used by shareholders to measure our performance.
|
|
• |
Free Cash Flow less Product Development Spending helps assess our ability, over the long term, to create value for our shareholders as it represents cash
available to repay debt, pay common stock dividends and fund share repurchases and acquisitions.
|
|
• |
Results on a constant currency basis removes distortion from the effects of foreign currency movements to provide better comparability of our business trends
from period to period. We measure our performance before the impact of foreign currency (or at “constant currency”), which means that we apply the same foreign currency exchange rates for the current and equivalent prior period.
|
• |
actual or anticipated changes in our consolidated operating results;
|
• |
variances between actual consolidated operating results and the expectations of securities analysts, investors and the financial community;
|
• |
changes in financial estimates by us or by any securities analysts who might cover our stock
;
|
• |
conditions or trends in our industry, the stock market or the economy;
|
• |
the level of demand for our stock, the stock market price and volume fluctuations of comparable companies
;
|
• |
announcements by us or our competitors of new product or service offerings, significant acquisitions, strategic partnerships or divestitures;
|
• |
announcements of investigations or regulatory scrutiny of our operations or lawsuits filed against us
;
|
• |
capital commitments;
|
• |
investors’ general perception of the Company and our business
;
|
• |
recruitment or departure of key personnel; and
|
• |
sales of our common stock, including sales by our directors and officers or specific stockholders.
|
Location
|
Purpose
|
Owned or Leased
|
Approx. Sq. Ft.
|
|||
United States:
|
||||||
New Jersey
|
Corporate Headquarters
|
Leased
|
294,000
|
|||
Office
|
Leased
|
185,000
|
||||
Indiana
|
Offices
|
Leased
|
166,000
|
|||
California
|
Office
|
Leased
|
11,000
|
|||
Massachusetts
|
Office
|
Leased
|
26,000
|
|||
Illinois
|
Office
|
Leased
|
52,000
|
|||
Florida
|
Office
|
Leased
|
58,000
|
|||
Minnesota
|
Office
|
Leased
|
22,000
|
|||
Texas
|
Office
|
Leased
|
11,000
|
|||
Colorado
|
Office
|
Leased
|
15,000
|
|||
Kentucky
|
Office
|
Leased
|
47,000
|
|||
International:
|
||||||
Australia
|
Offices
|
Leased
|
34,000
|
|||
Canada
|
Office
|
Leased
|
12,000
|
|||
England
|
Distribution Centers
|
Leased
|
298,000
|
|||
Offices
|
Leased
|
80,000
|
||||
Offices
|
Owned
|
70,000
|
||||
France
|
Offices
|
Leased
|
36,000
|
|||
Germany
|
Office
|
Owned
|
104,000
|
|||
Office
|
Leased
|
18,000
|
||||
Jordan
|
Office
|
Leased
|
24,000
|
|||
Singapore
|
Office
|
Leased
|
35,000
|
|||
Russia
|
Office
|
Leased
|
27,000
|
|||
China
|
Offices
|
Leased
|
18,000
|
|||
India
|
Distribution Centers
|
Leased
|
12,000
|
|||
Office
|
Leased
|
25,000
|
||||
Greece
|
Office
|
Leased
|
16,000
|
Name, Current and Former Positions
|
Age
|
First Elected to
Current Position
|
||
BRIAN A. NAPACK
|
57
|
December 2017
|
||
President and Chief Executive Officer and Director
|
||||
March 2012 – Senior Advisor, Providence Equity Partners LLC
|
||||
JOHN A. KRITZMACHER
|
58
|
July 2013
|
||
Chief Financial Officer and Executive Vice President, Operations
|
||||
October 2012 – Senior Vice President of Business Operations, Organizational Planning &
Structure at WebMD Health Corp
|
||||
MATTHEW S. KISSNER
|
65
|
February 2019
|
||
Executive Vice President, Group Executive
|
||||
December 2017 – Chairman of Company's Board of Directors
|
||||
May 2017 – Interim Chief Executive Officer of the Company
|
||||
October 2015 – Chairman of Company's Board of Directors
|
||||
GARY M. RINCK
|
67
|
September 2014
|
||
Executive Vice President, General Counsel
|
||||
2004 – Senior Vice President, General Counsel
|
||||
JUDY VERSES
|
62
|
October 2016
|
||
Executive Vice President, Research
|
||||
October 2011 – President – Global Enterprise and Education, Rosetta Stone Inc.
|
||||
CHRISTOPHER F. CARIDI
|
53
|
March 2017
|
||
Senior Vice President, Corporate Controller and Chief Accounting Officer
|
||||
March 2014 – Vice President Finance, Thomson Reuters
|
||||
September 2009 – Vice President, Controller/Global Head of Accounting Operations,
Thomson Reuters
|
||||
KEVIN MONACO
|
55
|
October 2018
|
||
Senior Vice President, Treasurer and Tax
|
||||
October 2009 – SVP, Finance, Treasurer and Investor Relations, Coty Inc.
|
||||
AREF MATIN
|
60
|
May 2018
|
||
Executive Vice President, Chief Technology Officer
|
||||
February 2015 – Executive Vice President, Chief Technology Officer, Ascend Learning
|
||||
July 2012 – Executive Vice President, Chief Technology Officer, Pearson Learning Technologies
& Pearson Higher Education
|
||||
TANELI D. RUDA
|
45
|
July 2018
|
||
Executive Vice President, Chief Strategy Officer
|
||||
March 2018 – Head of Corporate Strategy, Thomson Reuters
|
||||
March 2014 – SVP and Managing Director, Global Trade Management, Thomson Reuters
|
||||
January 2010 – SVP, Strategy, Thomson Reuters
|
Total Number
of Shares Purchased
|
Average Price
Paid Per Share
|
Total Number
of Shares Purchased
as Part of a Publicly
Announced Program
|
Maximum Number
of Shares that
May be Purchased
Under the Program
|
|||||||||||||
February 2019
|
—
|
$
|
—
|
—
|
2,446,640
|
|||||||||||
March 2019
|
557,665
|
44.83
|
557,665
|
1,888,975
|
||||||||||||
April 2019
|
—
|
—
|
—
|
1,888,975
|
||||||||||||
Total
|
557,665
|
$
|
44.83
|
557,665
|
1,888,975
|
For the Years Ended April 30,
(a)(b)
|
||||||||||||||||||||
Dollars (in millions, except per share data)
|
2019
|
2018
|
2017
|
2016
|
2015
|
|||||||||||||||
Revenue, net
|
$
|
1,800.1
|
$
|
1,796.1
|
$
|
1,718.5
|
$
|
1,727.0
|
$
|
1,822.4
|
||||||||||
Operating Income
(c)
|
224.0
|
231.5
|
211.5
|
188.1
|
237.7
|
|||||||||||||||
Net Income
(a)
|
168.3
|
192.2
|
113.6
|
145.8
|
176.9
|
|||||||||||||||
Working Capital
(d)
|
(379.8
|
)
|
(394.3
|
)
|
(428.1
|
)
|
(111.1
|
)
|
(62.8
|
)
|
||||||||||
Contract Liability (Deferred Revenue) in Working Capital
(d)
|
(507.4
|
)
|
(486.4
|
)
|
(436.2
|
)
|
(426.5
|
)
|
(372.1
|
)
|
||||||||||
Total Assets
|
2,937.0
|
2,839.5
|
2,606.2
|
2,921.1
|
3,004.2
|
|||||||||||||||
Long-Term Debt
|
478.8
|
360.0
|
365.0
|
605.0
|
650.1
|
|||||||||||||||
Shareholders' Equity
|
1,181.3
|
1,190.6
|
1,003.1
|
1,037.1
|
1,055.0
|
|||||||||||||||
Per Share Data
|
||||||||||||||||||||
Earnings Per Share
|
||||||||||||||||||||
Basic
|
$
|
2.94
|
$
|
3.37
|
$
|
1.98
|
$
|
2.51
|
$
|
3.01
|
||||||||||
Diluted
|
$
|
2.91
|
$
|
3.32
|
$
|
1.95
|
$
|
2.48
|
$
|
2.97
|
||||||||||
Cash Dividends
|
||||||||||||||||||||
Class A Common
|
$
|
1.32
|
$
|
1.28
|
$
|
1.24
|
$
|
1.20
|
$
|
1.16
|
||||||||||
Class B Common
|
$
|
1.32
|
$
|
1.28
|
$
|
1.24
|
$
|
1.20
|
$
|
1.16
|
(a) |
See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” for a discussion of the factors that contributed to our
consolidated operating results for the three years ended April 30, 2019. Certain tax benefits and charges included in the years ended April 30, 2019 – 2015 include:
|
•
|
The year ended April 30, 2019 includes a favorable benefit of $2.9 million, or $0.05 per share in connection with
the reduction in our deferred tax liabilities as a result of a lower U.S. state tax rate resulting from more favorable apportionment factors in 2019. Refer
to Note 12, “Income Taxes,” in the Notes to Consolidated Financial Statements for more information.
|
•
|
The year ended April 30, 2018 includes a favorable impact of $25.1 million ($0.43 per share) from the U.S. government enacted
comprehensive Federal tax legislation originally known as the Tax Cuts and Jobs Act of 2017 (the “Tax Act”). Refer to Note 12, “Income Taxes,” in the Notes to Consolidated Financial Statements for more information.
|
•
|
The year ended April 30, 2017 includes the effect of the German Tax litigation of $49.1 million ($0.85 per share).
|
•
|
The years ended April 30, 2017 and 2016 include tax benefits of $2.6 million ($0.04 per share) and $5.9 million ($0.10 per
share), respectively, principally associated with a reduction in our deferred tax liabilities from consecutive tax legislation enacted in the United Kingdom that reduced the U.K. corporate income tax rates.
|
•
|
The year ended April 30, 2015 includes a non-recurring tax benefit of $3.1 million ($0.05 per share) related to tax deductions
claimed on the write-up of certain foreign tax assets to fair market value.
|
(b) |
On May 1, 2018, we adopted the U.S. accounting standard regarding revenue
recognition ("Topic 606," or "ASC 606"). The adoption of Topic 606 did not have a material impact to our consolidated results of operations.
Refer to Note 2, "
Summary of Significant Accounting Policies, Recently Issued, and Recently Adopted Accounting Standards
," in the Notes to Consolidated Financial Statements for more information.
|
(c) |
Due to the retrospective adoption of Accounting Standards Update (“ASU”)
2017-07, “Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost,”, total net benefits (costs) of $8.1 million and $(5.3) million
related to the non-service components of defined benefit and other post-employment benefit plans were reclassified from Operating and Administrative Expenses to Interest and Other Income (Expense) for the years ended April 30,
2018 and 2017, respectively. Total net benefits related to the non-service components of defined benefit and other post-employment benefit plans were $8.8 million for the year ended April 30, 2019. Refer to Note 2, "Summary of
Significant Accounting Policies, Recently Issued, and Recently Adopted Accounting Standards," in the Notes to Consolidated Financial Statements for more information.
|
(d) |
The primary driver of the negative working capital is unearned contract liabilities (deferred revenue) related to subscriptions for which cash has been
collected in advance. Cash received in advance for subscriptions is used by us for a number of purposes, including acquisitions, debt repayments, funding operations, dividend payments, and purchasing treasury shares. The contract
liabilities (deferred revenue) will be recognized as income when the products are shipped or made available online to the customers over the term of the subscription period.
|
•
|
On July 1, 2019, we completed the acquisition of Zyante Inc. ("Zyante"), a leading provider of computer science and STEM education
courseware. Under the terms of the agreement, Zyante shareholders received $56 million in cash. Zyante will be included in our Education Publishing segment.
|
•
|
On June 28, 2019, our Board of Directors declared a quarterly dividend of $0.34 per share, or approximately $19.2 million, on our
Class A and Class B Common Stock. The dividend is payable on July 24, 2019 to shareholders of record on July 10, 2019.
|
•
|
On May 31, 2019, we completed the acquisition of certain assets of Knewton, Inc. (“Knewton”), included in our Publishing segment.
Knewton is a provider of affordable courseware and adaptive learning technology for an undisclosed amount.
|
• |
On May 30, 2019, we amended and restated our existing credit agreement with a (i) five-year revolving credit facility in an
aggregate principal amount up to $1.25 billion, and (ii) a five-year term loan A facility consisting of $250 million.
|
•
|
Increase in GAAP Results: Revenue of $491.2 million, an increase of 3%, Operating Income of $80.0 million, an increase of 10% and
Diluted EPS of $1.10, an increase of 19%;
|
•
|
Non-GAAP Adjusted Results on a constant currency basis: Adjusted Revenue increase of 7%, Adjusted Operating Income increase of 14%,
and Adjusted EPS increase of 19%;
|
•
|
Non-GAAP Adjusted Results on a constant currency basis and excluding the impact from Learning House acquisition: Adjusted Revenue
increase of 3%, Adjusted Operating Income increase of 17%, and Adjusted EPS increase of 26%.
|
•
|
the incremental impact of the acquisition of Learning House on November 1, 2018, which contributed $31.5 million of revenue,
|
•
|
increased revenue in our Research segment primarily driven by Open Access; and to a lesser extent, Licensing, Reprints, Backfiles,
and Other offerings; and,
|
•
|
increased revenue in all of our Solutions segment businesses, excluding the impact of Learning House.
|
•
|
the incremental impact of Learning House, primarily due to marketing and employment related costs,
|
•
|
an increase in legacy Education Services business marketing costs of $8.1 million primarily due to increased investments to support
revenue growth;
|
•
|
higher employment costs of $3.4 million.
|
2019
|
2018
|
Total Charges
Incurred to Date
|
||||||||||
Charges by Segment:
|
||||||||||||
Research
|
$
|
1,131
|
$
|
5,257
|
$
|
26,544
|
||||||
Publishing
|
650
|
6,443
|
39,581
|
|||||||||
Solutions
|
878
|
3,695
|
7,125
|
|||||||||
Corporate Expenses
|
459
|
13,171
|
96,378
|
|||||||||
Total Restructuring and Related Charges
|
$
|
3,118
|
$
|
28,566
|
$
|
169,628
|
||||||
Charges (Credits) by Activity:
|
||||||||||||
Severance
|
$
|
1,456
|
$
|
27,213
|
$
|
116,259
|
||||||
Consulting and Contract Termination Costs
|
526
|
1,815
|
21,155
|
|||||||||
Other activities
|
1,136
|
(462
|
)
|
32,214
|
||||||||
Total Restructuring and Related Charges
|
$
|
3,118
|
$
|
28,566
|
$
|
169,628
|
2019
|
2018
|
||||
Effective tax rate as reported
|
21.0%
|
10.2%
|
|||
State tax adjustment in 2019
|
1.3%
|
—
|
|||
Deferred Tax from the Tax Act Rate Change
|
(0.1)%
|
11.7%
|
|||
Effective tax rate excluding the deferred tax from the Tax Act and state tax adjustment
|
22.2%
|
21.9%
|
2019
|
2018
|
|||||||
GAAP EPS
|
$
|
2.91
|
$
|
3.32
|
||||
Adjustments:
|
||||||||
Restructuring and related charges
|
0.04
|
0.39
|
||||||
Foreign exchange losses on intercompany transactions
|
0.06
|
0.15
|
||||||
Impact of Tax Cuts and Job Act
|
—
|
(0.43
|
)
|
|||||
Impact of reduction in certain U.S. state tax rates in 2019
|
(0.05
|
)
|
—
|
|||||
Non-GAAP Adjusted EPS
|
$
|
2.96
|
$
|
3.43
|
2019
|
2018
|
% Change
|
% Change
w/o FX (b)
|
|||||||||||||
RESEARCH:
|
||||||||||||||||
Revenue:
|
||||||||||||||||
Journal Subscriptions
|
$
|
661,055
|
$
|
677,685
|
(2
|
)%
|
—
|
|||||||||
Open Access
|
54,671
|
41,997
|
30
|
%
|
33
|
%
|
||||||||||
Licensing, Reprints, Backfiles, and Other
|
185,619
|
181,806
|
2
|
%
|
4
|
%
|
||||||||||
Total Journal Revenue
|
$
|
901,345
|
$
|
901,488
|
—
|
3
|
%
|
|||||||||
Publishing Technology Services (Atypon)
|
35,968
|
32,907
|
9
|
%
|
9
|
%
|
||||||||||
Total Research Revenue
|
$
|
937,313
|
$
|
934,395
|
—
|
3
|
%
|
|||||||||
Cost of Sales
|
254,338
|
247,654
|
3
|
%
|
5
|
%
|
||||||||||
Gross Profit
|
$
|
682,975
|
$
|
686,741
|
(1
|
)%
|
2
|
%
|
||||||||
Gross Profit Margin
|
72.9
|
%
|
73.5
|
%
|
||||||||||||
Operating Expenses (a)
|
394,870
|
383,329
|
3
|
%
|
4
|
%
|
||||||||||
Amortization of Intangibles
|
28,099
|
26,829
|
5
|
%
|
6
|
%
|
||||||||||
Restructuring Charges (See Note 7)
|
1,131
|
5,257
|
(78
|
)%
|
(78
|
)%
|
||||||||||
Contribution to Profit
|
$
|
258,875
|
$
|
271,326
|
(5
|
)%
|
(1
|
)%
|
||||||||
Contribution Margin
|
27.6
|
%
|
29.0
|
%
|
(a) |
Due to the retrospective adoption
of ASU 2017-07, total net benefits
related to defined benefit and other post-employment benefit plans were reclassified from Operating and Administrative Expenses to Interest and Other Income (Expense). The amount for the year ended April 30, 2018 for the Research
segment was $4.2 million. Refer to Note 2, "Summary of Significant Accounting Policies, Recently Issued, and Recently Adopted Accounting Standards," for more information.
|
2019
|
2018
|
% Change
|
% Change
w/o FX (b)
|
|||||||||||||
PUBLISHING:
|
||||||||||||||||
Revenue:
|
||||||||||||||||
STM and Professional Publishing
|
$
|
265,719
|
$
|
287,315
|
(8
|
)%
|
(6
|
)%
|
||||||||
Education Publishing
|
157,579
|
187,178
|
(16
|
)%
|
(14
|
)%
|
||||||||||
Courseware (WileyPLUS)
|
63,485
|
59,475
|
7
|
%
|
7
|
%
|
||||||||||
Test Preparation and Certification
|
40,606
|
35,534
|
14
|
%
|
15
|
%
|
||||||||||
Licensing, Distribution, Advertising and Other
|
46,803
|
48,146
|
(3
|
)%
|
(1
|
)%
|
||||||||||
Total Publishing Revenue
|
$
|
574,192
|
$
|
617,648
|
(7
|
)%
|
(6
|
)%
|
||||||||
Cost of Sales
|
178,050
|
194,900
|
(9
|
)%
|
(7
|
)%
|
||||||||||
Gross Profit
|
$
|
396,142
|
$
|
422,748
|
(6
|
)%
|
(5
|
)%
|
||||||||
Gross Profit Margin
|
69.0
|
%
|
68.4
|
%
|
||||||||||||
Operating Expenses (a)
|
268,425
|
282,958
|
(5
|
)%
|
(4
|
)%
|
||||||||||
Amortization of Intangibles
|
8,166
|
8,108
|
1
|
%
|
1
|
%
|
||||||||||
Restructuring Charges (see Note 7)
|
650
|
6,443
|
(90
|
)%
|
(90
|
)%
|
||||||||||
Publishing brand impairment charge
|
—
|
3,600
|
(100
|
)%
|
(100
|
)%
|
||||||||||
Contribution to Profit
|
$
|
118,901
|
$
|
121,639
|
(2
|
)%
|
(8
|
)%
|
||||||||
Contribution Margin
|
20.7
|
%
|
19.7
|
%
|
(a) |
Due to the retrospective adoption
of ASU 2017-07, total net benefits
related to defined benefit and other post-employment benefit plans were reclassified from Operating and Administrative Expenses to Interest and Other Income (Expense). The amount for the year ended April 30, 2018 for the Publishing
segment was $2.3 million. Refer to Note 2, "Summary of Significant Accounting Policies, Recently Issued, and Recently Adopted Accounting Standards," for more information.
|
(b) |
Adjusted to exclude FX impact and Restructuring Charges, and in the year ended April 30, 2018, a Publishing brand impairment charge was also excluded.
|
2019
|
2018
|
% Change
|
% Change
w/o FX (b)
|
|||||||||||||
SOLUTIONS:
|
||||||||||||||||
Revenue:
|
||||||||||||||||
Education Services
|
$
|
157,549
|
$
|
119,131
|
32
|
%
|
32
|
%
|
||||||||
Professional Assessment
|
65,889
|
61,094
|
8
|
%
|
8
|
%
|
||||||||||
Corporate Learning
|
65,126
|
63,835
|
2
|
%
|
6
|
%
|
||||||||||
Total Solutions Revenue
|
$
|
288,564
|
$
|
244,060
|
18
|
%
|
19
|
%
|
||||||||
Cost of Sales (a)
|
122,337
|
88,462
|
38
|
%
|
39
|
%
|
||||||||||
Gross Profit
|
$
|
166,227
|
$
|
155,598
|
7
|
%
|
8
|
%
|
||||||||
Gross Profit Margin
|
57.6
|
%
|
63.8
|
%
|
||||||||||||
Operating Expenses (a)
|
131,989
|
116,513
|
13
|
%
|
15
|
%
|
||||||||||
Amortization of Intangibles
|
18,393
|
13,291
|
38
|
%
|
39
|
%
|
||||||||||
Restructuring Charges (see Note 7)
|
878
|
3,695
|
(76
|
)%
|
(76
|
)%
|
||||||||||
Contribution to Profit
|
$
|
14,967
|
$
|
22,099
|
(32
|
)%
|
(39
|
)%
|
||||||||
Contribution Margin
|
5.2
|
%
|
9.1
|
%
|
(a) |
In connection
with the acquisition of Learning House, we changed our
accounting policy for certain advertising and marketing costs incurred by our Education Services business to fulfill performance obligations from contracts with educational institutions. Under the new accounting policy, these costs are
included in Cost of Sales whereas they were previously included in Operating and Administrative Expenses on the Consolidated Statements of Income. The impact of this reclassification was an increase to Cost of Sales and a corresponding
decrease to Operating and Administrative Expenses of $45.8 million for the year ended April 30, 2018. This reclassification had no impact on Revenue, net or Contribution to Profit. Refer to “Change in Accounting Policy” in Note 2,
“Summary of Significant Accounting Policies, Recently Issued, and Recently Adopted Accounting Standards,” for more information on the accounting policy change and Note 4, “Acquisition,” for more information related to the acquisition of
Learning House.
|
(b) |
Adjusted to exclude FX impact and Restructuring Charges.
|
• |
lower technology costs in the current year of $18 million associated with our ERP implementation and other reductions in outsourcing and system development
consulting costs;
|
• |
a one-time pension settlement charge in the prior year related to changes in our retiree and long-term disability plans of $9 million; and
|
• |
savings from operational excellence initiatives and restructuring activities.
|
• |
one-time benefits in the prior year related to the changes in our retiree and long-term disability plans of $4 million and a life insurance recovery of $2
million;
|
• |
a full year of costs in the year ended April 30, 2018 associated with the Atypon acquisition, which resulted in an incremental impact of $9 million;
|
• |
an increase in
strategy consultation costs in the
current year of $7 million; and
|
• |
an impairment charge in the current year related to one of our Publishing brands of $4 million.
|
2018
|
2017
|
|||||||
Charges by Segment:
|
||||||||
Research
|
$
|
5,257
|
$
|
1,949
|
||||
Publishing
|
6,443
|
1,596
|
||||||
Solutions
|
3,695
|
1,787
|
||||||
Corporate Expenses
|
13,171
|
8,023
|
||||||
Total Restructuring and Related Charges
|
$
|
28,566
|
$
|
13,355
|
||||
Charges (Credits) by Activity:
|
||||||||
Severance
|
$
|
27,213
|
$
|
8,386
|
||||
Process reengineering consulting
|
1,815
|
148
|
||||||
Other activities
|
(462
|
)
|
4,821
|
|||||
Total Restructuring and Related Charges
|
$
|
28,566
|
$
|
13,355
|
2018
|
2017
|
||||
Effective tax rate as reported
|
10.2%
|
40.5%
|
|||
Estimated net impact in the year ended April 30, 2018 of non-recurring items from Tax Act
|
11.7
|
—
|
|||
Impact of unfavorable German court decision in the year ended April 30, 2017
|
—
|
(25.7)
|
|||
Impact of reduction in U.K. statutory rate on deferred tax balances in the year ended April 30,
2017
|
—
|
1.3
|
|||
Effective tax rate excluding the impact of non-recurring items from the Tax Act in the year ended
April 30, 2018 and the unfavorable German court decision and U.K. tax rate reduction in the year ended April 30, 2017
|
21.9%
|
16.1%
|
2018
|
2017
|
|||||||
GAAP EPS
|
$
|
3.32
|
$
|
1.95
|
||||
Adjustments:
|
||||||||
Restructuring and related charges
|
0.39
|
0.15
|
||||||
Foreign exchange losses on intercompany transactions
|
0.15
|
0.01
|
||||||
Estimated impact of the Tax Act
|
(0.43
|
)
|
—
|
|||||
Pension settlement
|
—
|
0.09
|
||||||
Unfavorable tax decisions
|
—
|
0.85
|
||||||
Deferred income tax benefit on U.K. tax rate change
|
—
|
(0.04
|
)
|
|||||
Non-GAAP Adjusted EPS
|
$
|
3.43
|
$
|
3.01
|
2018
|
2017
|
% Change
|
% Change
w/o FX (b)
|
|||||||||||||
RESEARCH:
|
||||||||||||||||
Revenue:
|
||||||||||||||||
Journal Subscriptions
|
$
|
677,685
|
$
|
639,720
|
6
|
%
|
—
|
|||||||||
Open Access
|
41,997
|
30,633
|
37
|
%
|
34
|
%
|
||||||||||
Licensing, Reprints, Backfiles, and Other
|
181,806
|
164,070
|
11
|
%
|
8
|
%
|
||||||||||
Total Journal Revenue
|
$
|
901,488
|
$
|
834,423
|
8
|
%
|
3
|
%
|
||||||||
Publishing Technology Services (Atypon)
|
32,907
|
19,066
|
73
|
%
|
73
|
%
|
||||||||||
Total Research Revenue
|
$
|
934,395
|
$
|
853,489
|
9
|
%
|
4
|
%
|
||||||||
Cost of Sales
|
247,654
|
219,773
|
13
|
%
|
8
|
%
|
||||||||||
Gross Profit
|
$
|
686,741
|
$
|
633,716
|
8
|
%
|
3
|
%
|
||||||||
Gross Profit Margin
|
73.5
|
%
|
74.3
|
%
|
||||||||||||
Operating Expenses (a)
|
383,329
|
354,986
|
8
|
%
|
6
|
%
|
||||||||||
Amortization of Intangibles
|
26,829
|
26,133
|
3
|
%
|
—
|
|||||||||||
Restructuring Charges (See Note 7)
|
5,257
|
1,949
|
||||||||||||||
Contribution to Profit
|
$
|
271,326
|
$
|
250,648
|
8
|
%
|
(1
|
)%
|
||||||||
Contribution Margin
|
29.0
|
%
|
29.4
|
%
|
(a) |
Due to the retrospective adoption
of ASU 2017-07, total net benefits
related to defined benefit and other post-employment benefit plans were reclassified from Operating and Administrative Expenses to Interest and Other Income (Expense). The amounts for the years ended April 30, 2018 and 2017 for the
Research segment were $4.2 million and $1.6 million, respectively. Refer to Note 2, "Summary of Significant Accounting Policies, Recently Issued, and Recently Adopted Accounting Standards," for more information.
|
• |
a full year of revenue from Atypon, which was acquired in September 2016, of which $14 million was the incremental impact;
|
• |
Open Access growth driven by the strong performance of existing titles and, to a lesser extent, new title launches; and
|
• |
other Journal revenue increases, particularly in reprints, backfiles and the licensing of intellectual content.
|
•
|
a full year of costs in the year ended April 30, 2018 from Atypon which resulted in an incremental impact of $9 million;
|
•
|
higher employment-related costs of $5 million, which included higher incentive compensation from the achievement of certain
financial goals and targets;
|
•
|
higher content and editorial costs of $3 million; and
|
•
|
an increase in product technology costs of $5 million.
|
PUBLISHING:
|
2018
|
2017
|
% Change
|
% Change
w/o FX (b)
|
||||||||||||
Revenue:
|
||||||||||||||||
STM and Professional Publishing
|
$
|
287,315
|
$
|
291,255
|
(1
|
)%
|
(3
|
)%
|
||||||||
Education Publishing
|
187,178
|
196,343
|
(5
|
)%
|
(6
|
)%
|
||||||||||
Courseware (WileyPLUS)
|
59,475
|
62,348
|
(5
|
)%
|
(5
|
)%
|
||||||||||
Test Preparation and Certification
|
35,534
|
35,609
|
—
|
—
|
||||||||||||
Licensing, Distribution, Advertising, and Other
|
48,146
|
47,894
|
1
|
%
|
(2
|
)%
|
||||||||||
Total Publishing Revenue
|
$
|
617,648
|
$
|
633,449
|
(2
|
)%
|
(4
|
)%
|
||||||||
Cost of Sales
|
194,900
|
194,837
|
—
|
(1
|
)%
|
|||||||||||
Gross Profit
|
$
|
422,748
|
$
|
438,612
|
(4
|
)%
|
(5
|
)%
|
||||||||
Gross Profit Margin
|
68.4
|
%
|
69.2
|
%
|
||||||||||||
Operating Expenses (a)
|
282,958
|
302,682
|
(7
|
)%
|
(7
|
)%
|
||||||||||
Amortization of Intangibles
|
8,108
|
9,803
|
(17
|
)%
|
(17
|
)%
|
||||||||||
Restructuring Charges (see Note 7)
|
6,443
|
1,596
|
||||||||||||||
Publishing brand impairment charge
|
3,600
|
—
|
||||||||||||||
Contribution to Profit
|
$
|
121,639
|
$
|
124,531
|
(2
|
)%
|
1
|
%
|
||||||||
Contribution Margin
|
19.7
|
%
|
19.7
|
%
|
(a) |
Due to the retrospective adoption
of ASU 2017-07, total net benefits
related to defined benefit and other post-employment benefit plans were reclassified from Operating and Administrative Expenses to Interest and Other Income (Expense). The amounts for the years ended April 30, 2018 and 2017 for the
Publishing segment were $2.3 million and $1.2 million, respectively. Refer to Note 2, "Summary of Significant Accounting Policies, Recently Issued, and Recently Adopted Accounting Standards," for more information.
|
2018
|
2017
|
% Change
|
% Change
w/o FX (b)
|
|||||||||||||
SOLUTIONS:
|
||||||||||||||||
Revenue:
|
||||||||||||||||
Education Services
|
$
|
119,131
|
$
|
111,638
|
7
|
%
|
7
|
%
|
||||||||
Professional Assessment
|
61,094
|
59,868
|
2
|
%
|
2
|
%
|
||||||||||
Corporate Learning
|
63,835
|
60,086
|
6
|
%
|
(1
|
)%
|
||||||||||
Total Solutions Revenue
|
$
|
244,060
|
$
|
231,592
|
5
|
%
|
3
|
%
|
||||||||
Cost of Sales (a)
|
88,462
|
86,184
|
3
|
%
|
1
|
%
|
||||||||||
Gross Profit
|
$
|
155,598
|
$
|
145,408
|
7
|
%
|
5
|
%
|
||||||||
Gross Profit Margin
|
63.8
|
%
|
62.8
|
%
|
||||||||||||
Operating Expenses (a)
|
116,513
|
115,066
|
1
|
%
|
(1
|
)%
|
||||||||||
Amortization of Intangibles
|
13,291
|
13,733
|
(3
|
)%
|
(6
|
)%
|
||||||||||
Restructuring Charges (see Note 7)
|
3,695
|
1,787
|
||||||||||||||
Contribution to Profit
|
$
|
22,099
|
$
|
14,822
|
49
|
%
|
56
|
%
|
||||||||
Contribution Margin
|
9.1
|
%
|
6.4
|
%
|
(a) |
In connection
with the acquisition of Learning House, we changed our
accounting policy for certain advertising and marketing costs incurred by our Education Services business to fulfill performance obligations from contracts with educational institutions. Under the new accounting policy, these costs are
included in Cost of Sales whereas they were previously included in Operating and Administrative Expenses on the Consolidated Statements of Income. The impact of this reclassification was an increase to Cost of Sales and a corresponding
decrease to Operating and Administrative Expenses of $45.8 million and $40.0 million for the years ended April 30, 2018 and 2017, respectively. This reclassification had no impact on Revenue, net or Contribution to Profit. Refer to
“Change in Accounting Policy” in Note 2, “Summary of Significant Accounting Policies, Recently Issued, and Recently Adopted Accounting Standards,” for more information on the accounting policy change and Note 4, “Acquisition,” for more
information related to the acquisition of Learning House.
|
•
|
lower
technology costs of
approximately $10 million driven by reduced spending on our ERP system and other reductions in depreciation, outsourcing, and systems development consulting costs; and
|
•
|
savings from operational excellence initiatives and restructuring activities;
|
•
|
strategy
consultation
costs in the current year of $7.1 million; and
|
•
|
one-time
benefits in the prior year related to changes in our retiree and long-term disability plans of $4.2 million and a life insurance recovery of $2 million.
|
Item
|
Fiscal Year
2019 Actual
|
Fiscal Year 2020 Outlook
Constant Currency
|
||||||
Revenue
|
$
|
1,800
|
$
|
1,840 - 1,870
|
||||
Research Publishing & Platforms
|
937
|
950-960
|
||||||
Education & Professional Publishing
|
705
|
690-700
|
||||||
Education Services
|
158
|
200-210
|
||||||
Adjusted EBITDA
|
$
|
388
|
$
|
360-375
|
||||
Adjusted EPS
|
$
|
2.96
|
$
|
2.45-2.55
|
||||
Free Cash Flow
|
$
|
149
|
$
|
210-230
|
•
|
Fiscal year 2020 Adjusted EPS is expected to decline primarily due to non-cash amortization expense related to acquisitions and
increased investment to grow and optimize Research and Education Services.
|
•
|
Forward-looking metrics include impact from Learning House and Knewton acquisitions.
|
•
|
Fiscal year 2020 results exclude the impact of the first quarter of fiscal year 2020 restructuring charges related to our
multi-year Business Optimization Program. We anticipate approximately $15 million to $20 million of restructuring charges, of which approximately $10 million to $15 million to be severance-related costs and the remainder to be related
to non-cash costs. We estimate that this multi-year program will potentially yield approximately $30 million in operating savings over time, with half of those savings to be realized in fiscal year 2020.
|
•
|
Fiscal year 2020 Outlook reflects fiscal year 2019 average exchange rates.
|
Year Ended
|
||||
April 30,
|
||||
2019
|
||||
Net Income
|
$
|
168,263
|
||
Interest expense
|
16,121
|
|||
Provision for income taxes
|
44,689
|
|||
Depreciation and amortization
|
161,155
|
|||
Non-GAAP EBITDA
|
390,228
|
|||
Restructuring and related (credits) charges
|
3,118
|
|||
Foreign exchange transaction losses
|
6,016
|
|||
Interest and other income
|
(11,100
|
)
|
||
Non-GAAP Adjusted EBITDA
|
$
|
388,262
|
Payments Due by Period
|
||||||||||||||||||||
Total
|
Within
Year 1
|
2–3
Years
|
4–5
Years
|
After 5
Years
|
||||||||||||||||
Total Debt
|
$
|
478.8
|
$
|
—
|
$
|
478.8
|
$
|
—
|
$
|
—
|
||||||||||
Interest on Debt
(1)
|
31.9
|
17.5
|
14.4
|
—
|
—
|
|||||||||||||||
Non-Cancelable Leases
|
248.6
|
30.9
|
50.5
|
37.8
|
129.4
|
|||||||||||||||
Minimum Royalty Obligations
|
469.8
|
101.1
|
160.1
|
106.1
|
102.5
|
|||||||||||||||
Other Operating Commitments
|
57.4
|
36.1
|
20.8
|
0.5
|
—
|
|||||||||||||||
Total
|
$
|
1,286.5
|
$
|
185.6
|
$
|
724.6
|
$
|
144.4
|
$
|
231.9
|
(1) |
Interest on Debt includes the effect of our interest rate swap agreements and the estimated future interest payments on our unhedged variable rate debt,
assuming that the interest rates as of April 30, 2019 remain constant until the maturity of the debt.
|
Year Ended April 30,
|
||||||||||||
2019
|
2018
|
2017
|
||||||||||
Net Cash Provided by Operating Activities
|
$
|
250,831
|
$
|
382,322
|
$
|
314,903
|
||||||
Net Cash Used in Investing Activities
|
(301,502
|
)
|
(177,411
|
)
|
(243,010
|
)
|
||||||
Net Cash Used in Financing Activities
|
(17,595
|
)
|
(96,831
|
)
|
(346,172
|
)
|
||||||
Effect of Foreign Currency Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash
|
(8,443
|
)
|
3,661
|
(31,011
|
)
|
Year Ended April 30,
|
||||||||||||
2019
|
2018
|
2017
|
||||||||||
Net Cash Provided by Operating Activities
|
$
|
250,831
|
$
|
382,322
|
$
|
314,903
|
||||||
Less: Additions to Technology, Property and Equipment
|
(77,167
|
)
|
(114,225
|
)
|
(105,058
|
)
|
||||||
Less: Product Development Spending
|
(24,426
|
)
|
(36,503
|
)
|
(43,603
|
)
|
||||||
Free Cash Flow less Product Development Spending
|
$
|
149,238
|
$
|
231,594
|
$
|
166,242
|
•
|
lower net earnings adjusted for non-cash items of $24 million, including Learning House;
|
•
|
the unfavorable net impact on accounts receivable and deferred revenue (contract liabilities) from the delay in billings and
subsequent collections of calendar year 2019 journal subscriptions of $57 million;
|
•
|
the net use of cash for other working capital items, including the payment of accounts payable and accrued liabilities of $26
million, primarily due to timing of payments and lower accruals for incentive compensation;
|
•
|
a net use of cash related to employee retirement plan contributions of $13 million, which includes a $10.0 million tax-advantage
discretionary
contribution to the
U.S. Employees' Retirement Plan in fiscal year 2019; and
|
•
|
certain one-time closing costs related to the Learning House acquisition of $10 million.
|
•
|
a $40.7 million favorable impact on accounts payable from the timing of vendor payments;
|
•
|
a $12.1 million favorable impact from lower employee retirement plan contributions; and
|
•
|
a $15.7 million favorable impact on accounts receivable from the timing of customer payments.
|
•
|
our investment in the year ended April 30, 2017 in acquisitions of $125.9 million compared to no investments in the year ended
April 30, 2018. The year ended April 30, 2017 includes cash used for the acquisitions of Atypon ($121 million) and Ranku ($5 million), net of cash acquired;
|
•
|
$60.4 million in proceeds we received in the year ended April 30, 2017 related to the settlement of a foreign exchange forward
contract that was entered into in the year ended April 30, 2016 to manage foreign currency exposures on intercompany loans.
|
2019
|
2018
|
|||||||
Accounts receivable, net
(1)
|
$
|
—
|
$
|
(28,302
|
)
|
|||
Inventories, net
|
$
|
3,739
|
$
|
4,626
|
||||
Accrued royalties
|
$
|
(3,653
|
)
|
$
|
(5,048
|
)
|
||
Contract liability (Deferred revenue)
(1)
|
$
|
25,934
|
$
|
—
|
||||
Decrease in Net Assets
|
$
|
(18,542
|
)
|
$
|
(18,628
|
)
|
Financial Statements
|
|
49
|
|
50
|
|
51
|
|
52
|
|
54
|
|
Notes to Consolidated Financial Statements
|
|
55
|
|
55
|
|
63
|
|
69
|
|
71
|
|
71
|
|
71
|
|
72
|
|
73
|
|
73
|
|
74
|
|
76
|
|
79
|
|
79
|
|
80
|
|
81
|
|
85
|
|
87
|
|
88
|
|
90
|
|
91
|
|
Financial Statement Schedule
|
|
97
|
/s/ Brian A. Napack
|
|
Brian A. Napack
|
|
President and Chief Executive Officer
|
|
/s/ John A. Kritzmacher
|
|
John A. Kritzmacher
|
|
Chief Financial Officer and
|
|
Executive Vice President, Operations
|
|
/s/ Christopher F. Caridi
|
|
Christopher F. Caridi
|
|
Senior Vice President, Corporate Controller and
|
|
Chief Accounting Officer
|
|
|
|
July 1, 2019
|
|
April 30,
|
||||||||
2019
|
2018
|
|||||||
Assets:
|
||||||||
Current Assets
|
||||||||
Cash and cash equivalents
|
$
|
92,890
|
$
|
169,773
|
||||
Accounts receivable, net
|
294,867
|
212,377
|
||||||
Inventories, net
|
35,582
|
39,489
|
||||||
Prepaid expenses and other current assets
|
67,441
|
58,332
|
||||||
Total Current Assets
|
490,780
|
479,971
|
||||||
Product Development Assets
|
62,470
|
78,814
|
||||||
Royalty Advances, net
|
36,185
|
37,058
|
||||||
Technology, Property and Equipment, net
|
289,021
|
289,934
|
||||||
Intangible Assets, net
|
865,572
|
848,071
|
||||||
Goodwill
|
1,095,666
|
1,019,801
|
||||||
Other Non-Current Assets
|
97,308
|
85,802
|
||||||
Total Assets
|
$
|
2,937,002
|
$
|
2,839,451
|
||||
Liabilities and Shareholders’ Equity:
|
||||||||
Current Liabilities
|
||||||||
Accounts payable
|
$
|
90,980
|
$
|
90,097
|
||||
Accrued royalties
|
78,062
|
73,007
|
||||||
Contract liability (Deferred revenue)
|
507,365
|
486,353
|
||||||
Accrued employment costs
|
97,230
|
116,179
|
||||||
Accrued income taxes
|
21,025
|
13,927
|
||||||
Other accrued liabilities
|
75,900
|
94,748
|
||||||
Total Current Liabilities
|
870,562
|
874,311
|
||||||
Long-Term Debt
|
478,790
|
360,000
|
||||||
Accrued Pension Liability
|
166,331
|
190,301
|
||||||
Deferred Income Tax Liabilities
|
143,775
|
143,518
|
||||||
Other Long-Term Liabilities
|
96,197
|
80,764
|
||||||
Total Liabilities
|
1,755,655
|
1,648,894
|
||||||
Shareholders’ Equity
|
||||||||
Preferred Stock, $1 par value: Authorized – 2 million, Issued – 0
|
—
|
—
|
||||||
Class A Common Stock, $1 par value: Authorized – 180 million, Issued – 70,126,963 and
70,110,603 as of April 30, 2019 and 2018, respectively
|
70,127
|
70,111
|
||||||
Class B Common Stock, $1 par value: Authorized – 72 million, Issued – 13,054,707 and
13,071,067 as of April 30, 2019 and 2018, respectively
|
13,055
|
13,071
|
||||||
Additional paid-in capital
|
422,305
|
407,120
|
||||||
Retained earnings
|
1,931,074
|
1,834,057
|
||||||
Accumulated other comprehensive (loss):
|
||||||||
Foreign currency translation adjustment
|
(312,107
|
)
|
(251,573
|
)
|
||||
Unamortized retirement costs, net of tax
|
(196,057
|
)
|
(191,026
|
)
|
||||
Unrealized (loss) gain on interest rate swap, net of tax
|
(574
|
)
|
3,019
|
|||||
Total accumulated other comprehensive loss, net of tax
|
(508,738
|
)
|
(439,580
|
)
|
||||
Less: Treasury Shares At Cost (Class A – 22,633,869 and 21,853,257 as of April 30, 2019 and
2018, respectively, Class B – 3,917,574 and 3,917,574 of April 30, 2019 and 2018, respectively)
|
(746,476
|
)
|
(694,222
|
)
|
||||
Total Shareholders’ Equity
|
1,181,347
|
1,190,557
|
||||||
Total Liabilities and Shareholders’ Equity
|
$
|
2,937,002
|
$
|
2,839,451
|
For the Years Ended April 30,
|
||||||||||||
2019
|
2018
(1)(2)
|
2017
(1)(2)
|
||||||||||
Revenue, net
|
$
|
1,800,069
|
$
|
1,796,103
|
$
|
1,718,530
|
||||||
Costs and Expenses
|
||||||||||||
Cost of sales
(2)
|
554,722
|
531,024
|
500,794
|
|||||||||
Operating and administrative expenses
(1)(2)
|
963,582
|
956,822
|
943,242
|
|||||||||
Restructuring and related charges
|
3,118
|
28,566
|
13,355
|
|||||||||
Amortization of intangibles
|
54,658
|
48,230
|
49,669
|
|||||||||
Total Costs and Expenses
|
1,576,080
|
1,564,642
|
1,507,060
|
|||||||||
Operating Income
|
223,989
|
231,461
|
211,470
|
|||||||||
Interest Expense
|
(16,121
|
)
|
(13,274
|
)
|
(16,938
|
)
|
||||||
Foreign Exchange Transaction (Losses) Gains
|
(6,016
|
)
|
(12,819
|
)
|
421
|
|||||||
Interest and Other Income (Expense)
(1)
|
11,100
|
8,563
|
(3,837
|
)
|
||||||||
Income Before Taxes
|
212,952
|
213,931
|
191,116
|
|||||||||
Provision for Income Taxes
|
44,689
|
21,745
|
77,473
|
|||||||||
Net Income
|
$
|
168,263
|
$
|
192,186
|
$
|
113,643
|
||||||
Earnings Per Share
|
||||||||||||
Basic
|
$
|
2.94
|
$
|
3.37
|
$
|
1.98
|
||||||
Diluted
|
$
|
2.91
|
$
|
3.32
|
$
|
1.95
|
||||||
Weighted Average Number of Common Shares Outstanding
|
||||||||||||
Basic
|
57,192
|
57,043
|
57,337
|
|||||||||
Diluted
|
57,840
|
57,888
|
58,199
|
(1)
|
Due
to the retrospective
adoption of Accounting Standards Update (“ASU”) 2017-07, “Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost,”, total net benefits (costs) of
$8.1 million and $(5.3) million related to the non-service components of defined benefit and other post-employment benefit plans were reclassified from Operating and Administrative Expenses to Interest and Other Income (Expense) for the
years ended April 30, 2018 and 2017, respectively. Total net benefits (costs) related to the non-service components of defined benefit and other post-employment benefit plans were $8.8 million for the year ended April 30, 2019. Refer to
Note 2, "Summary of Significant Accounting Policies, Recently Issued, and Recently Adopted Accounting Standards," in the Notes to Consolidated Financial Statements for more information.
|
(2)
|
In connection with the acquisition of The Learning House, Inc. (“Learning House”), we changed our accounting policy for certain
advertising and marketing costs incurred by our Education Services business to fulfill performance obligations from contracts with educational institutions. Under the new accounting policy, these costs are included in Cost of Sales
whereas they were previously included in Operating and Administrative Expenses on the Consolidated Statements of Income. Including these expenses in Cost of Sales will better align these costs with the related revenue and conform with the
presentation of such costs for Learning House. This change in accounting policy was applied retrospectively.
|
For the Years Ended April 30,
|
||||||||||||
2019
|
2018
|
2017
|
||||||||||
Net Income
|
$
|
168,263
|
$
|
192,186
|
$
|
113,643
|
||||||
Other Comprehensive (Loss) Income:
|
||||||||||||
Foreign currency translation adjustment
|
(60,534
|
)
|
67,639
|
(51,292
|
)
|
|||||||
Unrealized retirement costs, net of tax benefit of $1,337, $252, and $3,286, respectively
|
(5,031
|
)
|
(524
|
)
|
(11,097
|
)
|
||||||
Unrealized (loss) gain on interest rate swaps, net of tax benefit (expense) of $1,161, $(459),
and $(1,709), respectively
|
(3,593
|
)
|
592
|
2,788
|
||||||||
Total Other Comprehensive (Loss) Income
|
(69,158
|
)
|
67,707
|
(59,601
|
)
|
|||||||
Comprehensive Income
|
$
|
99,105
|
$
|
259,893
|
$
|
54,042
|
For the Years Ended April 30,
|
||||||||||||
2019
|
2018
|
2017
|
||||||||||
Operating Activities
|
||||||||||||
Net Income
|
$
|
168,263
|
$
|
192,186
|
$
|
113,643
|
||||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||||||
Amortization of intangibles
|
54,658
|
48,230
|
49,669
|
|||||||||
Amortization of product development assets
|
37,079
|
41,432
|
40,209
|
|||||||||
Depreciation and amortization of technology, property and equipment
|
69,418
|
64,327
|
66,683
|
|||||||||
Restructuring charges
|
3,118
|
28,566
|
13,355
|
|||||||||
Deferred income tax benefit on U.K. rate changes
|
—
|
—
|
(2,575
|
)
|
||||||||
Stock-based compensation expense
|
18,327
|
11,244
|
17,552
|
|||||||||
Excess tax benefits from stock-based compensation
|
—
|
—
|
(414
|
)
|
||||||||
Employee retirement plan expense
|
5,236
|
7,388
|
13,169
|
|||||||||
Royalty advances
|
(129,949
|
)
|
(122,602
|
)
|
(112,370
|
)
|
||||||
Earned royalty advances
|
129,125
|
116,620
|
114,647
|
|||||||||
Impairment of publishing brand
|
—
|
3,600
|
—
|
|||||||||
Foreign currency gains (losses)
|
6,016
|
12,819
|
(421
|
)
|
||||||||
Unfavorable tax litigation
|
—
|
—
|
49,029
|
|||||||||
One-time pension settlement
|
—
|
—
|
8,842
|
|||||||||
Other non-cash credits
|
(11,934
|
)
|
(30,752
|
)
|
(6,450
|
)
|
||||||
Changes in Operating Assets and Liabilities
|
||||||||||||
Accounts receivable, net
|
(52,939
|
)
|
(14,209
|
)
|
(29,886
|
)
|
||||||
Inventories, net
|
3,820
|
13,517
|
8,003
|
|||||||||
Accounts payable
|
7,369
|
16,543
|
(24,182
|
)
|
||||||||
Accrued royalties
|
6,169
|
3,664
|
4,325
|
|||||||||
Contract liability (Deferred revenue)
|
18,106
|
36,243
|
22,692
|
|||||||||
Accrued income taxes
|
9,613
|
(565
|
)
|
19,479
|
||||||||
Restructuring payments
|
(15,219
|
)
|
(30,595
|
)
|
(22,854
|
)
|
||||||
Other accrued liabilities
|
(32,713
|
)
|
1,022
|
10,367
|
||||||||
Employee retirement plan contributions
|
(40,470
|
)
|
(27,550
|
)
|
(39,687
|
)
|
||||||
Other
|
(2,262
|
)
|
11,194
|
2,078
|
||||||||
Net Cash Provided by Operating Activities
|
250,831
|
382,322
|
314,903
|
|||||||||
Investing Activities
|
||||||||||||
Product development spending
|
(24,426
|
)
|
(36,503
|
)
|
(43,603
|
)
|
||||||
Additions to technology, property and equipment
|
(77,167
|
)
|
(114,225
|
)
|
(105,058
|
)
|
||||||
Acquisitions of publication rights and other
|
(9,494
|
)
|
(26,683
|
)
|
(28,842
|
)
|
||||||
Businesses acquired in purchase transactions, net of cash acquired
|
(190,415
|
)
|
—
|
(125,924
|
)
|
|||||||
Proceeds from settlement of foreign exchange forward contracts
|
—
|
—
|
60,417
|
|||||||||
Net Cash Used in Investing Activities
|
(301,502
|
)
|
(177,411
|
)
|
(243,010
|
)
|
||||||
Financing Activities
|
||||||||||||
Repayment of long-term debt
|
(476,246
|
)
|
(467,915
|
)
|
(923,007
|
)
|
||||||
Borrowing of long-term debt
|
596,320
|
459,304
|
683,000
|
|||||||||
Purchase of treasury shares
|
(59,994
|
)
|
(39,688
|
)
|
(50,326
|
)
|
||||||
Change in book overdrafts
|
(5,674
|
)
|
(4,191
|
)
|
(214
|
)
|
||||||
Cash dividends
|
(75,752
|
)
|
(73,542
|
)
|
(71,545
|
)
|
||||||
Net proceeds from exercise of stock options and other
|
3,751
|
29,201
|
15,506
|
|||||||||
Excess tax benefits from stock-based compensation
|
—
|
—
|
414
|
|||||||||
Net Cash Used in Financing Activities
|
(17,595
|
)
|
(96,831
|
)
|
(346,172
|
)
|
||||||
Effects of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash
(1)
|
(8,443
|
)
|
3,661
|
(31,011
|
)
|
|||||||
Cash, Cash Equivalents and Restricted Cash
(1)
|
||||||||||||
(Decrease)/Increase for year
|
(76,709
|
)
|
111,741
|
(305,290
|
)
|
|||||||
Balance at beginning of year
|
170,257
|
58,516
|
363,806
|
|||||||||
Balance at end of year
|
93,548
|
170,257
|
58,516
|
|||||||||
Cash Paid During the Year for
|
||||||||||||
Interest
|
$
|
14,867
|
$
|
12,221
|
$
|
15,733
|
||||||
Income taxes, net of refunds
|
$
|
48,264
|
$
|
48,709
|
$
|
33,674
|
||||||
Non-cash items:
|
||||||||||||
Non-cash items associated with the acquisition of Learning House:
|
||||||||||||
Warrants to purchase 0.4 million shares of Wiley Class A Common Stock issued in connection with the Learning House
acquisition
|
$
|
565
|
—
|
—
|
(1) |
Due to the retrospective
adoption of ASU 2016-18, “Statement of Cash
Flows (Topic 230): Restricted Cash,” we are now required to include restricted cash as part of the change in cash, cash equivalents, and restricted cash. As a result, amounts which were previously classified as cash flows from operating
activities have been reclassified as they are recognized in the total change in cash, cash equivalents and restricted cash. Refer to Note 2, "
Summary of
Significant Accounting Policies, Recently Issued, and Recently Adopted Accounting Standards
," in the Notes to Consolidated Financial Statements for more information.
|
Common Stock
Class A
|
Common Stock
Class B
|
Additional
Paid-in Capital
|
Retained
Earnings
|
Treasury
Stock
|
Accumulated Other
Comprehensive Loss
|
Total
Shareholder’s Equity
|
||||||||||||||||||||||
Balance at April 30, 2016
|
$
|
69,798
|
$
|
13,392
|
$
|
368,698
|
$
|
1,673,325
|
$
|
(640,421
|
)
|
$
|
(447,686
|
)
|
$
|
1,037,106
|
||||||||||||
Restricted Shares Issued under Stock-based Compensation Plans
|
—
|
—
|
(7,617
|
)
|
—
|
8,013
|
—
|
396
|
||||||||||||||||||||
Net (Payments)/Proceeds from Exercise of Stock Options and Other
|
—
|
—
|
8,849
|
—
|
6,657
|
—
|
15,506
|
|||||||||||||||||||||
Excess Tax Benefits from Stock-based Compensation
|
—
|
—
|
414
|
—
|
—
|
—
|
414
|
|||||||||||||||||||||
Stock-based Compensation Expense
|
—
|
—
|
17,552
|
—
|
—
|
—
|
17,552
|
|||||||||||||||||||||
Purchase of Treasury Shares
|
—
|
—
|
—
|
—
|
(50,326
|
)
|
—
|
(50,326
|
)
|
|||||||||||||||||||
Class A Common Stock Dividends ($1.24 per share)
|
—
|
—
|
—
|
(60,143
|
)
|
—
|
—
|
(60,143
|
)
|
|||||||||||||||||||
Class B Common Stock Dividends ($1.24 per share)
|
—
|
—
|
—
|
(11,402
|
)
|
—
|
—
|
(11,402
|
)
|
|||||||||||||||||||
Common Stock Class Conversions
|
288
|
(296
|
)
|
—
|
—
|
—
|
—
|
(8
|
)
|
|||||||||||||||||||
Comprehensive Income (Loss), Net of Tax
|
—
|
—
|
—
|
113,643
|
—
|
(59,601
|
)
|
54,042
|
||||||||||||||||||||
Balance at April 30, 2017
|
$
|
70,086
|
$
|
13,096
|
$
|
387,896
|
$
|
1,715,423
|
$
|
(676,077
|
)
|
$
|
(507,287
|
)
|
$
|
1,003,137
|
||||||||||||
Restricted Shares Issued under Stock-based Compensation Plans
|
—
|
—
|
(7,646
|
)
|
(10
|
)
|
7,968
|
—
|
312
|
|||||||||||||||||||
Net Proceeds from Exercise of Stock Options and Other
|
—
|
—
|
15,686
|
—
|
13,515
|
—
|
29,201
|
|||||||||||||||||||||
Stock-based Compensation Expense
|
—
|
—
|
11,184
|
—
|
60
|
—
|
11,244
|
|||||||||||||||||||||
Purchase of Treasury Shares
|
—
|
—
|
—
|
—
|
(39,688
|
)
|
—
|
(39,688
|
)
|
|||||||||||||||||||
Class A Common Stock Dividends ($1.28 per share)
|
—
|
—
|
—
|
(61,813
|
)
|
—
|
—
|
(61,813
|
)
|
|||||||||||||||||||
Class B Common Stock Dividends ($1.28 per share)
|
—
|
—
|
—
|
(11,729
|
)
|
—
|
—
|
(11,729
|
)
|
|||||||||||||||||||
Common Stock Class Conversions
|
25
|
(25
|
)
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||||
Comprehensive Income, Net of Tax
|
—
|
—
|
—
|
192,186
|
—
|
67,707
|
259,893
|
|||||||||||||||||||||
Balance at April 30, 2018
|
$
|
70,111
|
$
|
13,071
|
$
|
407,120
|
$
|
1,834,057
|
$
|
(694,222
|
)
|
$
|
(439,580
|
)
|
$
|
1,190,557
|
||||||||||||
Restricted Shares Issued under Stock-based Compensation Plans
|
—
|
—
|
(8,544
|
)
|
3
|
8,826
|
—
|
285
|
||||||||||||||||||||
Net Proceeds from Exercise of Stock Options and Other
|
—
|
—
|
4,837
|
—
|
(1,086
|
)
|
—
|
3,751
|
||||||||||||||||||||
Stock-based Compensation Expense
|
—
|
—
|
18,327
|
—
|
—
|
—
|
18,327
|
|||||||||||||||||||||
Purchase of Treasury Shares
|
—
|
—
|
—
|
—
|
(59,994
|
)
|
—
|
(59,994
|
)
|
|||||||||||||||||||
Class A Common Stock Dividends ($1.32 per share)
|
—
|
—
|
—
|
(63,684
|
)
|
—
|
—
|
(63,684
|
)
|
|||||||||||||||||||
Class B Common Stock Dividends ($1.32 per share)
|
—
|
—
|
—
|
(12,068
|
)
|
—
|
—
|
(12,068
|
)
|
|||||||||||||||||||
Common Stock Class Conversions
|
16
|
(16
|
)
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||||
Issuance of Warrants Related to Acquisition of a Business
|
—
|
—
|
565
|
—
|
—
|
—
|
565
|
|||||||||||||||||||||
Adjustment Due to Adoption of New Revenue Standard
|
—
|
—
|
—
|
4,503
|
—
|
—
|
4,503
|
|||||||||||||||||||||
Comprehensive Income (Loss), Net of Tax
|
—
|
—
|
—
|
168,263
|
—
|
(69,158
|
)
|
99,105
|
||||||||||||||||||||
Balance at April 30, 2019
|
$
|
70,127
|
$
|
13,055
|
$
|
422,305
|
$
|
1,931,074
|
$
|
(746,476
|
)
|
$
|
(508,738
|
)
|
$
|
1,181,347
|
2019
|
2018
|
|||||||
Accounts receivable, net
(1)
|
$
|
—
|
$
|
(28,302
|
)
|
|||
Inventories, net
|
$
|
3,739
|
$
|
4,626
|
||||
Accrued royalties
|
$
|
(3,653
|
)
|
$
|
(5,048
|
)
|
||
Contract liability (Deferred revenue)
(1)
|
$
|
25,934
|
$
|
—
|
||||
Decrease in Net Assets
|
$
|
(18,542
|
)
|
$
|
(18,628
|
)
|
April 30, 2019
|
April 30, 2018
|
April 30, 2017
|
April 30, 2016
|
|||||||||||||
Cash and cash equivalents
|
$
|
92,890
|
$
|
169,773
|
$
|
58,516
|
$
|
363,806
|
||||||||
Restricted cash included in Prepaid expenses and other current assets
|
658
|
484
|
—
|
—
|
||||||||||||
Total cash, cash equivalents, and restricted cash shown in the Consolidated Statement of Cash Flows
|
$
|
93,548
|
$
|
170,257
|
$
|
58,516
|
$
|
363,806
|
(i)
|
perpetual licenses granted in connection with other deliverables; revenue that was previously recognized over the life of the
associated subscription for future content is now recognized at a point in time, which is when access to content is initially granted,
|
|||
(ii)
|
customers’ unexercised rights; revenue which was previously recognized at the end of a pre-determined period for situations where we
have received a nonrefundable payment for a customer to receive a good or service and the customer has not exercised such right is now recognized as revenue in proportion to the pattern of rights exercised by the customer,
|
|||
(iii)
|
recognition of estimated revenue from royalty agreements in the period of usage, and
|
|||
(iv)
|
recognition of revenue for certain arrangements with minimum guarantees on a time-based (straight-line) basis due to a stand-ready
obligation to provide additional rights to content.
|
April 30, 2018
|
Adjustments due to Adoption
|
May 1, 2018
|
||||||||||
Assets
|
||||||||||||
Accounts receivable, net
|
$
|
212,377
|
$
|
93,349
|
$
|
305,726
|
||||||
Product development assets
|
78,814
|
(3,725
|
)
|
75,089
|
||||||||
Technology, property and equipment, net
|
289,934
|
(361
|
)
|
289,573
|
||||||||
Other non-current assets
|
85,802
|
5,274
|
91,076
|
|||||||||
Liabilities
|
||||||||||||
Accrued royalties
|
73,007
|
(731
|
)
|
72,276
|
||||||||
Contract liability (Deferred revenue)
|
486,353
|
89,364
|
575,717
|
|||||||||
Deferred income tax liabilities
|
143,518
|
1,400
|
144,918
|
|||||||||
Retained earnings
|
$
|
1,834,057
|
$
|
4,503
|
$
|
1,838,560
|
Years Ended April 30,
|
||||||||||||||||||||||||||||||||||||||||||||||||
2019
|
2018
|
2017
|
||||||||||||||||||||||||||||||||||||||||||||||
Research
|
Publishing
|
Solutions
|
Total
|
Research
|
Publishing
|
Solutions
|
Total
|
Research
|
Publishing
|
Solutions
|
Total
|
|||||||||||||||||||||||||||||||||||||
Research:
|
||||||||||||||||||||||||||||||||||||||||||||||||
Journals Subscriptions
|
$
|
661,055
|
$
|
—
|
$
|
—
|
$
|
661,055
|
$
|
677,685
|
$
|
—
|
$
|
—
|
$
|
677,685
|
$
|
639,720
|
$
|
—
|
$
|
—
|
$
|
639,720
|
||||||||||||||||||||||||
Open Access
|
54,671
|
—
|
—
|
54,671
|
41,997
|
—
|
—
|
41,997
|
30,633
|
—
|
—
|
30,633
|
||||||||||||||||||||||||||||||||||||
Licensing, Reprints, Backfiles and Other
|
185,619
|
—
|
—
|
185,619
|
181,806
|
—
|
—
|
181,806
|
164,070
|
—
|
—
|
164,070
|
||||||||||||||||||||||||||||||||||||
Publishing Technology Services (Atypon)
|
35,968
|
—
|
—
|
35,968
|
32,907
|
—
|
—
|
32,907
|
19,066
|
—
|
—
|
19,066
|
||||||||||||||||||||||||||||||||||||
Publishing:
|
||||||||||||||||||||||||||||||||||||||||||||||||
STM and Professional Publishing
|
—
|
265,719
|
—
|
265,719
|
—
|
287,315
|
—
|
287,315
|
—
|
291,255
|
—
|
291,255
|
||||||||||||||||||||||||||||||||||||
Education Publishing
|
—
|
157,579
|
—
|
157,579
|
—
|
187,178
|
—
|
187,178
|
—
|
196,343
|
—
|
196,343
|
||||||||||||||||||||||||||||||||||||
Courseware (WileyPLUS)
|
—
|
63,485
|
—
|
63,485
|
—
|
59,475
|
—
|
59,475
|
—
|
62,348
|
—
|
62,348
|
||||||||||||||||||||||||||||||||||||
Test Preparation and Certification
|
—
|
40,606
|
—
|
40,606
|
—
|
35,534
|
—
|
35,534
|
—
|
35,609
|
—
|
35,609
|
||||||||||||||||||||||||||||||||||||
Licensing, Distribution, Advertising and Other
|
—
|
46,803
|
—
|
46,803
|
—
|
48,146
|
—
|
48,146
|
—
|
47,894
|
—
|
47,894
|
||||||||||||||||||||||||||||||||||||
Solutions:
|
||||||||||||||||||||||||||||||||||||||||||||||||
Education Services
|
—
|
—
|
157,549
|
157,549
|
—
|
—
|
119,131
|
119,131
|
—
|
—
|
111,638
|
111,638
|
||||||||||||||||||||||||||||||||||||
Professional Assessment
|
—
|
—
|
65,889
|
65,889
|
—
|
—
|
61,094
|
61,094
|
—
|
—
|
59,868
|
59,868
|
||||||||||||||||||||||||||||||||||||
Corporate Learning
|
—
|
—
|
65,126
|
65,126
|
—
|
—
|
63,835
|
63,835
|
—
|
—
|
60,086
|
60,086
|
||||||||||||||||||||||||||||||||||||
Total
|
$
|
937,313
|
$
|
574,192
|
$
|
288,564
|
$
|
1,800,069
|
$
|
934,395
|
$
|
617,648
|
$
|
244,060
|
$
|
1,796,103
|
$
|
853,489
|
$
|
633,449
|
$
|
231,592
|
$
|
1,718,530
|
● |
Research,
|
● |
Publishing, and
|
● |
Solutions.
|
● |
Journal Subscriptions,
|
● |
Open Access,
|
● |
Licensing, Reprints, Backfiles and Other, and
|
● |
Publishing Technology Services (Atypon).
|
● |
STM (Scientific, Technical and Medical) and Professional Publishing,
|
● |
Education Publishing,
|
● |
Courseware (WileyPLUS),
|
● |
Test Preparation and Certification, and
|
● |
Licensing, Distribution, Advertising and Other.
|
● |
Education Services,
|
● |
Professional Assessment, and
|
● |
Corporate Learning.
|
April 30, 2019
|
April 30, 2018
(1)
|
Increase/
(Decrease)
|
||||||||||
Balances from contracts with customers:
|
||||||||||||
Accounts receivable, net
(2)
|
$
|
294,867
|
$
|
212,377
|
$
|
82,490
|
||||||
Contract liability (Deferred revenue)
(2)
|
507,365
|
486,353
|
21,012
|
|||||||||
Contract liability (Deferred revenue) (included in Other Long-Term Liabilities)
|
$
|
10,722
|
$
|
—
|
$
|
10,722
|
Preliminary Allocation as of April 30, 2019
|
||||
Total consideration transferred
|
$
|
201,274
|
||
Assets:
|
||||
Current Assets
|
||||
Cash and cash equivalents
|
10,293
|
|||
Accounts receivable, net
|
8,621
|
|||
Prepaid expenses and other current assets
|
1,439
|
|||
Total Current Assets
|
20,353
|
|||
Technology, Property and Equipment, net
|
343
|
|||
Intangible Assets, net
|
109,548
|
|||
Goodwill
|
110,805
|
|||
Other Non-Current Assets
|
5,025
|
|||
Total Assets
|
$
|
246,074
|
||
Liabilities:
|
||||
Current Liabilities
|
||||
Accounts payable
|
1,542
|
|||
Contract liability (Deferred revenue)
|
959
|
|||
Accrued employment costs
|
4,925
|
|||
Other accrued liabilities
|
9,422
|
|||
Total Current Liabilities
|
16,848
|
|||
|
||||
Deferred Income Tax Liabilities
|
26,769
|
|||
Other Long-Term Liabilities
|
1,184
|
|||
Total Liabilities
|
$
|
44,801
|
Estimated
Fair Value
|
Weighted-Average
Useful Life
(in Years)
|
|||||||
Customer Relationships
|
$
|
103,850
|
15
|
|||||
Course Content
|
5,698
|
4
|
||||||
Total
|
$
|
109,548
|
2019
|
2018
|
2017
|
||||||
Weighted average shares outstanding
|
57,240
|
57,181
|
57,531
|
|||||
Less: Unvested restricted shares
|
(48)
|
(138)
|
(194)
|
|||||
Shares used for basic earnings per share
|
57,192
|
57,043
|
57,337
|
|||||
Dilutive effect of stock options and other stock awards
|
648
|
845
|
862
|
|||||
Shares used for diluted earnings per share
|
57,840
|
57,888
|
58,199
|
Foreign Currency
Translation
|
Unamortized
Retirement Costs
|
Interest
Rate Swaps
|
Total
|
|||||||||||||
Balance at April 30, 2016
|
$
|
(267,920
|
)
|
$
|
(179,405
|
)
|
$
|
(361
|
)
|
$
|
(447,686
|
)
|
||||
Other comprehensive (loss) income before reclassifications
|
(51,292
|
)
|
(18,458
|
)
|
2,735
|
(67,015
|
)
|
|||||||||
Amounts reclassified from Accumulated Other Comprehensive Loss
|
—
|
7,361
|
53
|
7,414
|
||||||||||||
Total other comprehensive (loss) income
|
(51,292
|
)
|
(11,097
|
)
|
2,788
|
(59,601
|
)
|
|||||||||
Balance at April 30, 2017
|
$
|
(319,212
|
)
|
$
|
(190,502
|
)
|
$
|
2,427
|
$
|
(507,287
|
)
|
|||||
Other comprehensive income (loss) before reclassifications
|
67,639
|
(4,979
|
)
|
1,739
|
64,399
|
|||||||||||
Amounts reclassified from Accumulated Other Comprehensive Loss
|
—
|
4,455
|
(1,147
|
)
|
3,308
|
|||||||||||
Total other comprehensive income (loss)
|
67,639
|
(524
|
)
|
592
|
67,707
|
|||||||||||
Balance at April 30, 2018
|
$
|
(251,573
|
)
|
$
|
(191,026
|
)
|
$
|
3,019
|
$
|
(439,580
|
)
|
|||||
Other comprehensive (loss) income before reclassifications
|
(60,534
|
)
|
(9,422
|
)
|
1,121
|
(68,835
|
)
|
|||||||||
Amounts reclassified from Accumulated Other Comprehensive Loss
|
—
|
4,391
|
(4,714
|
)
|
(323
|
)
|
||||||||||
Total other comprehensive loss
|
(60,534
|
)
|
(5,031
|
)
|
(3,593
|
)
|
(69,158
|
)
|
||||||||
Balance at April 30, 2019
|
$
|
(312,107
|
)
|
$
|
(196,057
|
)
|
$
|
(574
|
)
|
$
|
(508,738
|
)
|
2019
|
2018
|
2017
|
Total Charges
Incurred to Date
|
|||||||||||||
Charges by Segment:
|
||||||||||||||||
Research
|
$
|
1,131
|
$
|
5,257
|
$
|
1,949
|
$
|
26,544
|
||||||||
Publishing
|
650
|
6,443
|
1,596
|
39,581
|
||||||||||||
Solutions
|
878
|
3,695
|
1,787
|
7,125
|
||||||||||||
Corporate Expenses
|
459
|
13,171
|
8,023
|
96,378
|
||||||||||||
Total Restructuring and Related Charges
|
$
|
3,118
|
$
|
28,566
|
$
|
13,355
|
$
|
169,628
|
||||||||
Charges (Credits) by Activity:
|
||||||||||||||||
Severance
|
$
|
1,456
|
$
|
27,213
|
$
|
8,386
|
$
|
116,259
|
||||||||
Consulting and Contract Termination Costs
|
526
|
1,815
|
148
|
21,155
|
||||||||||||
Other Activities
|
1,136
|
(462
|
)
|
4,821
|
32,214
|
|||||||||||
Total Restructuring and Related Charges
|
$
|
3,118
|
$
|
28,566
|
$
|
13,355
|
$
|
169,628
|
April 30, 2018
|
Charges
|
Payments
|
Foreign Translation & Other Adjustments
|
April 30, 2019
|
||||||||||||||||
Severance
|
$
|
17,279
|
$
|
1,456
|
$
|
(13,388
|
)
|
$
|
(460
|
)
|
$
|
4,887
|
||||||||
Consulting and Contract Termination Costs
|
—
|
526
|
(223
|
)
|
—
|
303
|
||||||||||||||
Other Activities
|
2,772
|
1,136
|
(1,608
|
)
|
244
|
2,544
|
||||||||||||||
Total
|
$
|
20,051
|
$
|
3,118
|
$
|
(15,219
|
)
|
$
|
(216
|
)
|
$
|
7,734
|
2019
|
2018
|
|||||||
Finished Goods
|
$
|
33,736
|
$
|
36,503
|
||||
Work-in-Process
|
2,094
|
2,139
|
||||||
Paper and Other Materials
|
373
|
550
|
||||||
36,203
|
39,192
|
|||||||
Inventory Value of Estimated Sales Returns
|
3,739
|
4,626
|
||||||
LIFO Reserve
|
(4,360
|
)
|
(4,329
|
)
|
||||
Total Inventories
|
$
|
35,582
|
$
|
39,489
|
2019
|
2018
|
|||||||
Book Composition Costs
|
$
|
19,197
|
$
|
24,887
|
||||
Software Costs
|
38,048
|
52,078
|
||||||
Content Development Costs
|
5,225
|
1,849
|
||||||
Total
|
$
|
62,470
|
$
|
78,814
|
2019
|
2018
|
|||||||
Capitalized Software
|
$
|
440,437
|
$
|
390,774
|
||||
Computer Hardware
|
68,718
|
57,493
|
||||||
Buildings and Leasehold Improvements
|
118,685
|
121,381
|
||||||
Furniture, Fixtures, and Warehouse Equipment
|
57,471
|
60,869
|
||||||
Land and Land Improvements
|
3,390
|
3,678
|
||||||
688,701
|
634,195
|
|||||||
Accumulated Depreciation and Amortization
|
(399,680
|
)
|
(344,261
|
)
|
||||
Total
|
$
|
289,021
|
$
|
289,934
|
2019
|
2018
|
2017
|
||||||||||
Capitalized Software Amortization Expense
|
$
|
50,095
|
$
|
45,449
|
$
|
48,343
|
||||||
Depreciation and Amortization Expense, Excluding Capitalized Software
|
19,323
|
18,878
|
18,340
|
|||||||||
Total Depreciation and Amortization Expense for Technology, Property and Equipment
|
$
|
69,418
|
$
|
64,327
|
$
|
66,683
|
2018
(1)
|
Acquisition
(2)
|
Foreign
Translation
Adjustment
|
2019
|
|||||||||||||
Research
|
$
|
463,419
|
$
|
—
|
$
|
(24,908
|
)
|
$
|
438,511
|
|||||||
Publishing
|
283,851
|
—
|
(706
|
)
|
283,145
|
|||||||||||
Solutions
|
272,531
|
110,805
|
(9,326
|
)
|
374,010
|
|||||||||||
Total
|
$
|
1,019,801
|
$
|
110,805
|
$
|
(34,940
|
)
|
$
|
1,095,666
|
(1)
|
The April 30, 2018 goodwill balances were revised for the Publishing segment which decreased and the Solutions segment which
increased to reflect foreign translation adjustments of $11.6 million.
|
(2)
|
Refer to Note 4, “Acquisition,” in the Notes to Consolidated Financial Statements for more information related to the acquisition
of Learning House on November 1, 2018.
|
2019
|
2018
|
|||||||||||||||||||||||||||||||
Cost
|
Accumulated
Amortization
|
Accumulated
Impairment
|
Net
|
Cost
|
Accumulated
Amortization
|
Accumulated
Impairment
|
Net
|
|||||||||||||||||||||||||
Intangible Assets with Determinable Lives, net
|
||||||||||||||||||||||||||||||||
Content and Publishing Rights
(1)
|
$
|
806,628
|
$
|
(417,456
|
)
|
$
|
—
|
$
|
389,172
|
$
|
824,146
|
$
|
(387,386
|
)
|
$
|
—
|
$
|
436,760
|
||||||||||||||
Customer Relationships
(1)
|
310,977
|
(65,147
|
)
|
—
|
245,830
|
212,020
|
(50,291
|
)
|
—
|
161,729
|
||||||||||||||||||||||
Brands and Trademarks
|
32,802
|
(19,809
|
)
|
—
|
12,993
|
32,111
|
(16,011
|
)
|
—
|
16,100
|
||||||||||||||||||||||
Covenants not to Compete
|
1,681
|
(1,236
|
)
|
—
|
445
|
1,499
|
(844
|
)
|
—
|
655
|
||||||||||||||||||||||
Total
|
1,152,088
|
(503,648
|
)
|
—
|
648,440
|
1,069,776
|
(454,532
|
)
|
—
|
615,244
|
||||||||||||||||||||||
Intangible Assets with Indefinite Lives
|
||||||||||||||||||||||||||||||||
Brands and Trademarks
|
134,509
|
—
|
(3,600
|
)
|
130,909
|
142,189
|
—
|
(3,600
|
)
|
138,589
|
||||||||||||||||||||||
Content and Publishing Rights
|
86,223
|
—
|
—
|
86,223
|
94,238
|
—
|
—
|
94,238
|
||||||||||||||||||||||||
Total
|
220,732
|
—
|
(3,600
|
)
|
217,132
|
236,427
|
—
|
(3,600
|
)
|
232,827
|
||||||||||||||||||||||
Total Intangible Assets, Net
|
$
|
1,372,820
|
$
|
(503,648
|
)
|
$
|
(3,600
|
)
|
$
|
865,572
|
$
|
1,306,203
|
$
|
(454,532
|
)
|
$
|
(3,600
|
)
|
$
|
848,071
|
Fiscal Year
|
Amount
|
|||
2020
|
$
|
50,419
|
||
2021
|
48,517
|
|||
2022
|
44,115
|
|||
2023
|
40,305
|
|||
2024
|
37,929
|
|||
Thereafter
|
427,155
|
|||
Total
|
$
|
648,440
|
2019
|
2018
|
2017
|
||||||||||
Current Provision
|
||||||||||||
U.S. – Federal
|
$
|
2,384
|
$
|
(2,216
|
)
|
$
|
912
|
|||||
International
|
52,518
|
46,112
|
105,228
|
|||||||||
State and Local
|
2,536
|
961
|
100
|
|||||||||
Total Current Provision
|
$
|
57,438
|
$
|
44,857
|
$
|
106,240
|
||||||
Deferred Provision (Benefit)
|
||||||||||||
U.S. – Federal
|
$
|
335
|
$
|
(26,062
|
)
|
$
|
(13,852
|
)
|
||||
International
|
(7,630
|
)
|
2,420
|
(15,330
|
)
|
|||||||
State and Local
|
(5,454
|
)
|
530
|
415
|
||||||||
Total Deferred (Benefit) Provision
|
$
|
(12,749
|
)
|
$
|
(23,112
|
)
|
$
|
(28,767
|
)
|
|||
Total Provision
|
$
|
44,689
|
$
|
21,745
|
$
|
77,473
|
2019
|
2018
|
2017
|
||||||||||
International
|
$
|
204,326
|
$
|
219,178
|
$
|
192,910
|
||||||
United States
|
8,626
|
(5,247
|
)
|
(1,794
|
)
|
|||||||
Total
|
$
|
212,952
|
$
|
213,931
|
$
|
191,116
|
2019
|
2018
|
2017
|
|||
U.S. Federal Statutory Rate
|
21.0%
|
30.4%
|
35.0%
|
||
German Tax Litigation Expense
|
—
|
—
|
25.7
|
||
Cost (Benefit) of Higher (Lower) Taxes on Non-U.S. Income
|
0.9
|
(8.4)
|
(12.7)
|
||
State Income Taxes, net of U.S. Federal Tax Benefit
|
(1.3)
|
0.4
|
0.1
|
||
Deferred Tax (Benefit) from U.S. Tax Reform Rate Change
|
0.1
|
(11.7)
|
—
|
||
Deferred Tax Benefit from U.K. Statutory Tax Rate Change
|
—
|
—
|
(1.3)
|
||
Tax Credits and Related Benefits
|
(0.8)
|
(1.7)
|
(6.2)
|
||
Tax Adjustments and Other
|
1.1
|
1.2
|
(0.1)
|
||
Effective Income Tax Rate
|
21.0%
|
10.2%
|
40.5%
|
• |
lowering the U.S. federal corporate income tax rate to 21% with a potentially lower rate for certain foreign derived income;
|
• |
accelerating deductions for certain business assets;
|
• |
establishing a dividend received deduction, generally eliminating federal income taxes on cash repatriation from foreign subsidiaries;
|
• |
requiring companies to pay a one-time transition tax on post-1986 unrepatriated cumulative non-U.S. earnings and profits (“E&P”) of foreign subsidiaries;
|
• |
eliminating certain deductions such as the domestic production deduction;
|
• |
establishing limitations on the deductibility of certain expenses including interest and executive compensation; and
|
• |
creating new taxes on certain foreign earnings.
|
2019
|
2018
|
|||||||
Balance at May 1
|
$
|
6,833
|
$
|
6,124
|
||||
Additions for Current Year Tax Positions
|
1,473
|
1,372
|
||||||
Additions for Prior Year Tax Positions
|
414
|
69
|
||||||
Reductions for Prior Year Tax Positions
|
(578
|
)
|
(38
|
)
|
||||
Foreign Translation Adjustment
|
(42
|
)
|
45
|
|||||
Payments and Settlements
|
(136
|
)
|
(124
|
)
|
||||
Reductions for Lapse of Statute of Limitations
|
(305
|
)
|
(615
|
)
|
||||
Balance at April 30
|
$
|
7,659
|
$
|
6,833
|
2019
|
2018
|
|||||||
Net Operating Losses
|
$
|
14,491
|
$
|
8,976
|
||||
Reserve for Sales Returns and Doubtful Accounts
|
2,923
|
2,506
|
||||||
Accrued Employee Compensation
|
17,528
|
20,096
|
||||||
Foreign and Federal Credits
|
34,401
|
31,109
|
||||||
Other Accrued Expenses
|
6,262
|
4,632
|
||||||
Retirement and Post-Employment Benefits
|
40,653
|
39,160
|
||||||
Total Gross Deferred Tax Assets
|
$
|
116,258
|
$
|
106,479
|
||||
Less Valuation Allowance
|
(21,179
|
)
|
(8,811
|
)
|
||||
Total Deferred Tax Assets
|
$
|
95,079
|
$
|
97,668
|
||||
Prepaid Expenses and Other Current Assets
|
$
|
(744
|
)
|
$
|
(3,203
|
)
|
||
Unremitted Foreign Earnings
|
(1,985
|
)
|
(1,985
|
)
|
||||
Intangible and Fixed Assets
|
(226,898
|
)
|
(231,869
|
)
|
||||
Total Deferred Tax Liabilities
|
$
|
(229,627
|
)
|
$
|
(237,057
|
)
|
||
Net Deferred Tax Liabilities
|
$
|
(134,548
|
)
|
$
|
(139,389
|
)
|
||
Reported As
|
||||||||
Deferred Tax Assets
|
$
|
9,227
|
$
|
4,129
|
||||
Deferred Tax Liabilities
|
(143,775
|
)
|
(143,518
|
)
|
||||
Net Deferred Tax Liabilities
|
$
|
(134,548
|
)
|
$
|
(139,389
|
)
|
2019
|
2018
|
2017
|
||||||||||
Minimum Rental
|
$
|
29,066
|
$
|
31,451
|
$
|
35,464
|
||||||
Less: Sublease Rentals
|
(719
|
)
|
(708
|
)
|
(626
|
)
|
||||||
Total
|
$
|
28,347
|
$
|
30,743
|
$
|
34,838
|
Fiscal Year
|
Amount
|
|||
2020
|
$
|
30,887
|
||
2021
|
27,326
|
|||
2022
|
23,183
|
|||
2023
|
19,257
|
|||
2024
|
18,576
|
|||
Thereafter
|
129,382
|
|||
Total
|
$
|
248,611
|
• |
Retirement Plan for the Employees of John Wiley & Sons, Canada was frozen effective December 31, 2015;
|
• |
Retirement Plan for the Employees of John Wiley & Sons, Ltd., a U.K. plan was frozen effective April 30, 2015 and;
|
• |
U.S. Employees’ Retirement Plan, Supplemental Benefit Plan, and Supplemental Executive Retirement Plan, were frozen effective June 30, 2013.
|
2019
|
2018
|
2017
|
||||||||||||||||||||||
U.S.
|
Non-U.S.
|
U.S.
|
Non-U.S.
|
U.S.
|
Non-U.S.
|
|||||||||||||||||||
Service Cost
|
$
|
—
|
$
|
912
|
$
|
—
|
$
|
960
|
$
|
—
|
$
|
967
|
||||||||||||
Interest Cost
|
11,704
|
12,943
|
11,666
|
13,876
|
12,398
|
14,449
|
||||||||||||||||||
Expected Return on Plan Assets
|
(13,472
|
)
|
(25,551
|
)
|
(13,154
|
)
|
(26,385
|
)
|
(14,053
|
)
|
(21,173
|
)
|
||||||||||||
Net Amortization of Prior Service Cost
|
(154
|
)
|
57
|
(154
|
)
|
57
|
(154
|
)
|
54
|
|||||||||||||||
Recognized Net Actuarial Loss
|
2,035
|
3,746
|
2,289
|
3,832
|
2,622
|
2,553
|
||||||||||||||||||
Curtailment/Settlement Loss
|
—
|
—
|
-
|
19
|
8,842
|
—
|
||||||||||||||||||
Net Pension Expense (Income)
|
$
|
113
|
$
|
(7,893
|
)
|
$
|
647
|
$
|
(7,641
|
)
|
$
|
9,655
|
$
|
(3,150
|
)
|
|||||||||
Discount Rate
|
4.3
|
%
|
2.6
|
%
|
4.1
|
%
|
2.6
|
%
|
4.0
|
%
|
3.5
|
%
|
||||||||||||
Rate of Compensation Increase
|
N/A
|
3.0
|
%
|
N/A
|
3.0
|
%
|
N/A
|
3.0
|
%
|
|||||||||||||||
Expected Return on Plan Assets
|
6.8
|
%
|
6.5
|
%
|
6.8
|
%
|
6.5
|
%
|
6.8
|
%
|
6.7
|
%
|
U.S.
|
Non-U.S.
|
Total
|
||||||||||
Actuarial Loss
|
$
|
2,390
|
$
|
4,091
|
$
|
6,481
|
||||||
Prior Service Cost
|
(154
|
)
|
82
|
(72
|
)
|
|||||||
Total
|
$
|
2,236
|
$
|
4,173
|
$
|
6,409
|
2019
|
2018
|
|||||||||||||||||||||||
Level 1
|
Level 2
|
Total
|
Level 1
|
Level 2
|
Total
|
|||||||||||||||||||
U.S. Plan Assets
|
||||||||||||||||||||||||
Investments measured at NAV:
|
||||||||||||||||||||||||
Global Equity Securities: Limited Partnership
|
$
|
109,490
|
$
|
95,933
|
||||||||||||||||||||
Fixed Income Securities: Commingled Trust Funds
|
104,138
|
100,295
|
||||||||||||||||||||||
Other: Real Estate Commingled Trust Fund
|
—
|
8,755
|
||||||||||||||||||||||
Total Assets at NAV
|
$
|
213,628
|
$
|
204,983
|
||||||||||||||||||||
Non-U.S. Plan Assets
|
||||||||||||||||||||||||
Equity Securities:
|
||||||||||||||||||||||||
U.S. Equities
|
$
|
—
|
$
|
39,652
|
$
|
39,652
|
$
|
—
|
$
|
31,203
|
$
|
31,203
|
||||||||||||
Non-U.S. Equities
|
—
|
117,575
|
117,575
|
—
|
96,387
|
96,387
|
||||||||||||||||||
Balanced Managed Funds
|
—
|
48,550
|
48,550
|
—
|
91,743
|
91,743
|
||||||||||||||||||
Fixed Income Securities: Commingled Funds
|
855
|
199,720
|
200,575
|
—
|
197,804
|
197,804
|
||||||||||||||||||
Other:
|
||||||||||||||||||||||||
Real Estate/Other
|
—
|
501
|
501
|
—
|
549
|
549
|
||||||||||||||||||
Cash and Cash Equivalents
|
1,396
|
—
|
1,396
|
1,762
|
—
|
1,762
|
||||||||||||||||||
Total Non-U.S. Plan Assets
|
$
|
2,251
|
$
|
405,998
|
$
|
408,249
|
$
|
1,762
|
$
|
417,686
|
$
|
419,448
|
||||||||||||
Total Plan Assets
|
$
|
2,251
|
$
|
405,998
|
$
|
621,877
|
$
|
1,762
|
$
|
417,686
|
$
|
624,431
|
Fiscal Year
|
U.S.
|
Non-U.S.
|
Total
|
||||||||||
2020
|
$
|
16,287
|
$
|
8,868
|
$
|
25,155
|
|||||||
2021
|
14,741
|
9,610
|
24,351
|
||||||||||
2022
|
14,894
|
11,019
|
25,913
|
||||||||||
2023
|
15,259
|
11,433
|
26,692
|
||||||||||
2024
|
15,436
|
12,097
|
27,533
|
||||||||||
2025 – 2029
|
76,053
|
71,732
|
147,785
|
||||||||||
Total
|
$
|
152,670
|
$
|
124,759
|
$
|
277,429
|
2016
|
||||
Fair Value of Options on Grant Date
|
$
|
14.77
|
||
|
||||
Weighted Average assumptions:
|
||||
Expected Life of Options (years)
|
7.2
|
|||
Risk-Free Interest Rate
|
2.1
|
%
|
||
Expected Volatility
|
29.7
|
%
|
||
Expected Dividend Yield
|
2.1
|
%
|
||
Fair Value of Common Stock on Grant Date
|
$
|
55.99
|
2019
|
2018
|
2017
|
||||||||||||||||||||||||||||||
Number
of Options
(in 000’s)
|
Weighted
Average
Exercise Price
|
Weighted Average
Remaining Term
(in years)
|
Aggregate
Intrinsic Value
(in millions)
|
Number
of Options
(in 000’s)
|
Weighted
Average
Exercise Price
|
Number
of Options
(in 000’s)
|
Weighted
Average
Exercise Price
|
|||||||||||||||||||||||||
Outstanding at Beginning of Year
|
611
|
$
|
48.88
|
1,429
|
$
|
47.39
|
1,966
|
$
|
46.62
|
|||||||||||||||||||||||
Granted
|
—
|
$
|
—
|
—
|
$
|
—
|
—
|
$
|
—
|
|||||||||||||||||||||||
Exercised
|
(229
|
)
|
$
|
47.21
|
(788
|
)
|
$
|
45.97
|
(469
|
)
|
$
|
43.74
|
||||||||||||||||||||
Expired or Forfeited
|
(10
|
)
|
$
|
56.97
|
(30
|
)
|
$
|
54.24
|
(68
|
)
|
$
|
49.91
|
||||||||||||||||||||
Outstanding at End of Year
|
372
|
$
|
49.70
|
2.8
|
$
|
0.8
|
611
|
$
|
48.88
|
1,429
|
$
|
47.39
|
||||||||||||||||||||
Exercisable at End of Year
|
372
|
$
|
49.70
|
2.8
|
$
|
0.8
|
530
|
$
|
47.43
|
1,064
|
$
|
46.04
|
||||||||||||||||||||
Vested and Expected to Vest in the Future at April 30
|
372
|
$
|
49.70
|
2.8
|
$
|
0.8
|
599
|
$
|
48.90
|
1,249
|
$
|
45.88
|
Options Outstanding
|
Options Exercisable
|
|||||||||||||||||||||
Range of Exercise Prices
|
Number
of Options
(in 000’s)
|
Weighted Average
Remaining Term
(in years)
|
Weighted
Average
Exercise Price
|
Number
of Options
(in 000’s)
|
Weighted
Average
Exercise Price
|
|||||||||||||||||
$
|
35.04
|
11
|
0.2
|
$
|
35.04
|
11
|
$
|
35.04
|
||||||||||||||
$
|
39.53 to $40.02
|
101
|
2.3
|
$
|
39.71
|
101
|
$
|
39.71
|
||||||||||||||
$
|
48.06 to $49.55
|
106
|
2.3
|
$
|
48.69
|
106
|
$
|
48.69
|
||||||||||||||
$
|
55.99 to $59.70
|
154
|
3.6
|
$
|
57.87
|
154
|
$
|
57.87
|
||||||||||||||
Total/Average
|
372
|
2.8
|
$
|
49.70
|
372
|
$
|
49.70
|
2019
|
2018
|
2017
|
||||||||||||||
Restricted
Shares
|
Weighted Average
Grant Date Value
|
Restricted
Shares
|
Restricted
Shares
|
|||||||||||||
Nonvested Shares at Beginning of Year
|
861
|
$
|
53.22
|
913
|
915
|
|||||||||||
Granted
|
415
|
$
|
62.63
|
525
|
509
|
|||||||||||
Change in Shares Due to Performance
|
(19
|
)
|
$
|
44.17
|
(107
|
)
|
(67
|
)
|
||||||||
Vested and Issued
|
(357
|
)
|
$
|
54.95
|
(318
|
)
|
(267
|
)
|
||||||||
Forfeited
|
(144
|
)
|
$
|
55.37
|
(152
|
)
|
(177
|
)
|
||||||||
Nonvested Shares at End of Year
|
756
|
$
|
57.38
|
861
|
913
|
Changes in Common Stock A:
|
2019
|
2018
|
2017
|
|||||
Number of shares, beginning of year
|
70,111
|
70,086
|
69,798
|
|||||
Common stock class conversions and other
|
16
|
25
|
288
|
|||||
Number of shares issued, end of year
|
70,127
|
70,111
|
70,086
|
|||||
Changes in Common Stock A in treasury:
|
||||||||
Number of shares held, beginning of year
|
21,853
|
22,097
|
21,709
|
|||||
Purchase of treasury shares
|
1,192
|
713
|
953
|
|||||
Restricted shares issued under stock-based compensation plans - non-PSU Awards
|
(210)
|
(153)
|
(74)
|
|||||
Restricted shares issued under stock-based compensation plans - PSU Awards
|
(110)
|
(126)
|
(186)
|
|||||
Stock grants of fully vested Class A shares - common stock
|
—
|
(20)
|
(24)
|
|||||
Restricted shares, forfeited
|
9
|
15
|
8
|
|||||
Restricted shares issued from exercise of stock options
|
(229)
|
(788)
|
(469)
|
|||||
Shares withheld for taxes
|
130
|
116
|
97
|
|||||
Other
|
(1)
|
(1)
|
83
|
|||||
Number of shares held, end of year
|
22,634
|
21,853
|
22,097
|
|||||
Number of Common Stock A outstanding, end of year
|
47,493
|
48,258
|
47,989
|
Changes in Common Stock B:
|
2019
|
2018
|
2017
|
|||||
Number of shares, beginning of year
|
13,071
|
13,096
|
13,392
|
|||||
Common stock class conversions and other
|
(16)
|
(25)
|
(296)
|
|||||
Number of shares issued, end of year
|
13,055
|
13,071
|
13,096
|
|||||
Changes in Common Stock B in treasury:
|
||||||||
Number of shares held, beginning of year
|
3,918
|
3,918
|
3,917
|
|||||
Shares repurchased
|
—
|
—
|
1
|
|||||
Number of shares held, end of year
|
3,918
|
3,918
|
3,918
|
|||||
Number of Common Stock B outstanding, end of year
|
9,137
|
9,153
|
9,178
|
Date of Declaration by Board of Directors
|
Quarterly Cash Dividend
|
Total Dividend
|
Class of Common Stock
|
Dividend Paid Date
|
Shareholders of Record as of Date
|
June 21, 2018
|
$0.33 per common share
|
$19.0 million
|
Class A and
Class B
|
July 18, 2018
|
July 3, 2018
|
September 26, 2018
|
$0.33 per common share
|
$18.9 million
|
Class A and
Class B
|
October 24, 2018
|
October 9, 2018
|
December 19, 2018
|
$0.33 per common share
|
$18.9 million
|
Class A and
Class B
|
January 16, 2019
|
January 2, 2019
|
March 20, 2019
|
$0.33 per common share
|
$18.6 million
|
Class A and
Class B
|
April 17, 2019
|
April 2, 2019
|
For the Years Ended April 30,
|
||||||||||||
2019
|
2018
|
2017
|
||||||||||
Revenue:
|
||||||||||||
Research
|
$
|
937,313
|
$
|
934,395
|
$
|
853,489
|
||||||
Publishing
|
574,192
|
617,648
|
633,449
|
|||||||||
Solutions
|
288,564
|
244,060
|
231,592
|
|||||||||
Total Revenue
|
$
|
1,800,069
|
$
|
1,796,103
|
$
|
1,718,530
|
||||||
Contribution to Profit
(1)
:
|
||||||||||||
Research
|
$
|
258,875
|
$
|
271,326
|
$
|
250,648
|
||||||
Publishing
|
118,901
|
121,639
|
124,531
|
|||||||||
Solutions
|
14,967
|
22,099
|
14,822
|
|||||||||
Total Contribution to Profit
|
$
|
392,743
|
$
|
415,064
|
$
|
390,001
|
||||||
Corporate Expenses
|
(168,754
|
)
|
(183,603
|
)
|
(178,531
|
)
|
||||||
Operating Income
|
$
|
223,989
|
$
|
231,461
|
$
|
211,470
|
For the Years Ended April 30,
|
||||||||||||
2019
|
2018
|
2017
|
||||||||||
Total Assets
|
||||||||||||
Research
|
$
|
1,152,973
|
$
|
1,238,178
|
$
|
1,133,846
|
||||||
Publishing
|
643,549
|
575,033
|
582,339
|
|||||||||
Solutions
|
751,854
|
563,489
|
575,068
|
|||||||||
Corporate
|
388,626
|
462,751
|
314,964
|
|||||||||
Total
|
$
|
2,937,002
|
$
|
2,839,451
|
$
|
2,606,217
|
||||||
Product Development Spending and Additions to Technology, Property and Equipment
|
||||||||||||
Research
|
$
|
(6,457
|
)
|
$
|
(7,538
|
)
|
$
|
(154,189
|
)
|
|||
Publishing
|
(19,712
|
)
|
(23,666
|
)
|
(29,420
|
)
|
||||||
Solutions
|
(9,001
|
)
|
(16,786
|
)
|
(21,210
|
)
|
||||||
Corporate
|
(66,423
|
)
|
(102,738
|
)
|
(98,608
|
)
|
||||||
Total
|
$
|
(101,593
|
)
|
$
|
(150,728
|
)
|
$
|
(303,427
|
)
|
|||
Depreciation and Amortization
|
||||||||||||
Research
|
$
|
37,088
|
$
|
33,655
|
$
|
29,330
|
||||||
Publishing
|
33,892
|
39,495
|
43,831
|
|||||||||
Solutions
|
34,300
|
27,703
|
26,792
|
|||||||||
Corporate
|
55,875
|
53,136
|
56,608
|
|||||||||
Total
|
$
|
161,155
|
$
|
153,989
|
$
|
156,561
|
Revenue, net
|
Technology, Property and Equipment, Net
|
|||||||||||||||||||||||
2019
|
2018
|
2017
|
2019
|
2018
|
2017
|
|||||||||||||||||||
United States
|
$
|
932,927
|
$
|
913,852
|
$
|
786,574
|
$
|
252,459
|
$
|
249,542
|
$
|
208,572
|
||||||||||||
United Kingdom
|
150,242
|
147,406
|
189,479
|
18,331
|
20,955
|
21,368
|
||||||||||||||||||
Germany
|
97,505
|
98,404
|
75,090
|
8,423
|
9,259
|
8,770
|
||||||||||||||||||
Japan
|
77,145
|
81,572
|
62,674
|
87
|
72
|
75
|
||||||||||||||||||
Australia
|
77,453
|
78,270
|
66,309
|
1,440
|
1,454
|
591
|
||||||||||||||||||
China
|
55,024
|
53,076
|
39,653
|
688
|
229
|
270
|
||||||||||||||||||
Canada
|
50,882
|
55,568
|
50,740
|
2,659
|
3,635
|
1,232
|
||||||||||||||||||
France
|
51,441
|
51,826
|
44,760
|
403
|
635
|
335
|
||||||||||||||||||
India
|
36,472
|
41,637
|
34,306
|
1,299
|
1,437
|
245
|
||||||||||||||||||
Other Countries
|
270,978
|
274,492
|
368,945
|
3,232
|
2,716
|
1,600
|
||||||||||||||||||
Total
|
$
|
1,800,069
|
$
|
1,796,103
|
$
|
1,718,530
|
$
|
289,021
|
$
|
289,934
|
$
|
243,058
|
Amounts in millions, except per share data
|
2019
|
2018
|
||||||
Revenue, net
|
||||||||
First Quarter
|
$
|
410.9
|
$
|
411.4
|
||||
Second Quarter
|
448.6
|
451.7
|
||||||
Third Quarter
|
449.4
|
455.7
|
||||||
Fourth Quarter
|
491.2
|
477.3
|
||||||
Year ended April 30,
|
$
|
1,800.1
|
$
|
1,796.1
|
||||
Gross Profit
(1)
|
||||||||
First Quarter
|
$
|
283.1
|
$
|
285.5
|
||||
Second Quarter
|
316.0
|
319.6
|
||||||
Third Quarter
|
305.5
|
319.3
|
||||||
Fourth Quarter
|
340.7
|
340.7
|
||||||
Year ended April 30,
|
$
|
1,245.3
|
$
|
1,265.1
|
||||
Operating Income
(2)
|
||||||||
First Quarter
|
$
|
36.1
|
$
|
12.6
|
||||
Second Quarter
|
57.5
|
80.8
|
||||||
Third Quarter
|
50.3
|
65.4
|
||||||
Fourth Quarter
|
80.1
|
72.7
|
||||||
Year ended April 30,
|
$
|
224.0
|
$
|
231.5
|
||||
Net Income
|
||||||||
First Quarter
|
$
|
26.3
|
$
|
9.2
|
||||
Second Quarter
|
43.8
|
60.0
|
||||||
Third Quarter
|
34.9
|
68.8
|
||||||
Fourth Quarter
|
63.3
|
54.2
|
||||||
Year ended April 30,
|
$
|
168.3
|
$
|
192.2
|
2019
|
2018
|
|||||||||||||||
Basic
|
Diluted
|
Basic
|
Diluted
|
|||||||||||||
Earnings Per Share
(3)
|
||||||||||||||||
First Quarter
|
$
|
0.46
|
$
|
0.45
|
$
|
0.16
|
$
|
0.16
|
||||||||
Second Quarter
|
0.76
|
0.76
|
1.06
|
1.04
|
||||||||||||
Third Quarter
|
0.61
|
0.61
|
1.21
|
1.19
|
||||||||||||
Fourth Quarter
|
1.11
|
1.10
|
0.95
|
0.93
|
||||||||||||
Year ended April 30,
|
$
|
2.94
|
$
|
2.91
|
$
|
3.37
|
$
|
3.32
|
Plan Category
|
Number of
Securities to be
Issued Upon Exercise
of Outstanding Options,
Warrants and Rights
(1)
|
Weighted Average
Exercise Price of
Outstanding Options,
Warrants and Rights
|
Number of
Securities Remaining
Available for Future
Issuance Under Equity
Compensation Plans
(2)
|
|||||||||
Equity compensation plans approved by shareholders
|
1,128,823
|
$
|
49.70
|
4,355,399
|
(1)
|
This amount includes the following awards issued under the 2014 Key Employee Stock Plan:
|
(2)
|
Per the terms of the 2014 Key Employee Stock Plan (“Plan”), a total of 6,500,000 shares shall be authorized for
awards granted under the Plan, less one (1) share for every one (1) share that was subject to an option or stock appreciation right granted after April 30, 2014 under the 2009 Key Employee Stock Plan and 1.76 Shares for every one (1)
share that was subject to an award other than an option or stock appreciation right granted after April 30, 2014 under the 2009 Key Employee Stock Plan. Any shares that are subject to options or stock appreciation rights shall be counted
against this limit as one (1)
share for every one (1) share granted, and any shares that are subject to awards other than options or
stock appreciation rights shall be counted against this limit as 1.76
Shares for every one (1) share granted. After the Effective Date
of the Plan, no awards may be granted under the 2009 Key Employee Stock Plan.
|
(a)
|
See Index to Consolidated Financial Statements and Schedule of this Annual Report on Form 10-K and are filed as part of this report.
|
(b)
|
Exhibits
|
3.1
|
Restated Certificate of Incorporation
(incorporated by reference to the Company's Report on Form 10-K for the year
ended April 30, 1992).
|
3.2
|
Certificate 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, 1996).
|
3.3
|
Certificate 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).
|
3.4
|
Certificate 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).
|
3.5
|
Amended and Restated By-Laws dated as of September 2007
(incorporated by reference to the Company's Report on Form
10-K for the year ended April 30, 2018).
|
10.1
|
Amended and Restated Credit Agreement dated May 30, 2019, among the Company and Bank of America, N.A., as Administrative Agent, Swing Line Lender, and L/C Issuer, and the lenders and other agents party
thereto
(incorporated by reference to the Company's Report on Form 8-K filed on June 5, 2019).
|
10.2
|
Agreement of the Lease dated as of July 14, 2014 between Hub Properties Trust as Landlord, an independent third party and 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, 2014).
|
10.3
*
|
2018 Director Stock Plan
|
10.4
|
2014 Executive Annual Incentive Plan
(incorporated by reference to the Company's Report on Form 10-Q for the
quarterly period ended October 31, 2014).
|
10.5
|
Amended 2014 Key Employee Stock Plan
(incorporated by reference to the Company's Report on Form 10-Q for the
quarterly period ended October 31, 2014).
|
10.6
|
Supplemental 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).
|
10.7
|
|
10.8
|
Resolution amending the Supplemental Executive Retirement Plan to Cease Accruals and Freeze Participation effective June 30, 2013
(incorporated by reference to the Company’s Report on Form 10-K for the year ended April 30, 2013)
|
10.9
|
Supplemental 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
|
Resolution amending the Supplemental Benefit (Retirement) Plan to Cease Accruals and Freeze Participation effective June 30, 2013
(incorporated by reference to the Company’s Report on Form 10-K for the year ended April 30, 2013).
|
10.11
|
Deferred 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
|
Resolution amending the Deferred Compensation Plan effective July 1, 2013
(incorporated by reference to the Company’s Report on Form 10-K for the year ended April 30, 2013).
|
10.13
|
Deferred 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 2020 Qualified Executive Long Term Incentive Plan
|
10.15
*
|
Form of the Fiscal Year 2020 Qualified Executive Annual Incentive Plan
|
10.16
*
|
Form of the Fiscal Year 2020 Executive Annual Strategic Milestones Incentive Plan
|
10.17
|
Form of the Fiscal Year 2019 Qualified Executive Long Term Incentive Plan
(incorporated by reference
to the Company’s Report on Form 10-K for the year ended April 30, 2018).
|
10.18
|
Form of the Fiscal Year 2019 Qualified Executive Annual Incentive Plan
(incorporated by reference to
the Company’s Report on Form 10-K for the year ended April 30, 2018).
|
10.19
|
Form of the Fiscal Year 2019 Executive Annual Strategic Milestones Incentive Plan
(incorporated by
reference to the Company’s Report on Form 10-K for the year ended April 30, 2018).
|
10.20
|
Form of the Fiscal Year 2018 Qualified Executive Long Term Incentive Plan
(incorporated by reference
to the Company’s Report on Form 10-K for the year ended April 30, 2017).
|
10.21
|
Form of the Fiscal Year 2018 Qualified Executive Annual Incentive Plan
(incorporated by reference to
the Company’s Report on Form 10-K for the year ended April 30, 2017).
|
10.22
|
Form of the Fiscal Year 2018 Executive Annual Strategic Milestones Incentive Plan
(incorporated
by reference to the Company’s Report on Form 10-K for the year ended April 30, 2017).
|
10.23
|
Senior 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).
|
10.24
|
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-K for the year ended April 30, 2003).
|
10.25
|
Senior Executive Employment Agreement dated as of April 15, 2015 between Mark Allin and the Company
(incorporated
by reference to the Company's Report on Form 8-K dated as of April 15, 2015).
|
10.26
|
Separation and Release Agreement, effective June 9, 2017, between Mark Allin, former President and Chief Executive Officer and the Company
(incorporated by reference to the Company’s Report on Form 10-Q for the period ended July 31, 2017).
|
10.27
|
Senior 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).
|
10.28
|
Addendum to the Employment Agreement, effective June 26, 2017, between John A. Kritzmacher, and the Company
(incorporated by reference to the Company’s Report on Form 10-Q for the period ended July 31, 2017).
|
10.29
|
Senior 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).
|
10.30
*
|
Employment Letter dated September 26, 2016 between Judy Verses, Executive Vice President, and the Company.
|
10.31
|
Employment Letter dated October 12, 2017 between Brian A. Napack, President and Chief Executive Officer, and the Company
(incorporated by reference to the Company’s Report on Form 10-Q for the period ended October 31, 2017).
|
10.32
|
Employment Letter dated February 5, 2019 between Matthew Kissner, Group Executive, and the Company
(incorporated
by reference to the Company’s Report on Form 8-K filed on February 7, 2019).
|
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.
|
XBRL Instance Document
|
|
XBRL Taxonomy Extension Schema Document
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
* |
Filed herewith
|
Description
|
Balance at
Beginning
of Period
|
Charged to
Expenses
|
Deductions
From Reserves and Other
(2)
|
Balance at
End of Period
|
||||||||||||
Year Ended April 30, 2019
|
||||||||||||||||
Allowance for Sales Returns
(1)
|
$
|
18,628
|
$
|
37,483
|
$
|
37,569
|
$
|
18,542
|
||||||||
Allowance for Doubtful Accounts
|
$
|
10,107
|
$
|
5,279
|
$
|
1,079
|
$
|
14,307
|
||||||||
Allowance for Inventory Obsolescence
|
$
|
18,193
|
$
|
7,328
|
$
|
9,696
|
$
|
15,825
|
||||||||
Valuation Allowance on Deferred Tax Assets
|
$
|
8,811
|
$
|
51
|
$
|
(12,317
|
)
|
$
|
21,179
|
|||||||
Year Ended April 30, 2018
|
||||||||||||||||
Allowance for Sales Returns
(1)
|
$
|
24,300
|
$
|
38,711
|
$
|
44,383
|
$
|
18,628
|
||||||||
Allowance for Doubtful Accounts
|
$
|
7,186
|
$
|
5,439
|
$
|
2,518
|
$
|
10,107
|
||||||||
Allowance for Inventory Obsolescence
|
$
|
21,096
|
$
|
9,182
|
$
|
12,085
|
$
|
18,193
|
||||||||
Valuation Allowance on Deferred Tax Assets
|
$
|
1,300
|
$
|
7,511
|
$
|
—
|
$
|
8,811
|
||||||||
Year Ended April 30, 2017
|
||||||||||||||||
Allowance for Sales Returns
(1)
|
$
|
19,861
|
$
|
53,482
|
$
|
49,043
|
$
|
24,300
|
||||||||
Allowance for Doubtful Accounts
|
$
|
7,254
|
$
|
2,913
|
$
|
2,981
|
$
|
7,186
|
||||||||
Allowance for Inventory Obsolescence
|
$
|
21,968
|
$
|
9,538
|
$
|
10,410
|
$
|
21,096
|
||||||||
Valuation Allowance on Deferred Tax Assets
|
$
|
—
|
$
|
1,300
|
$
|
—
|
1,300
|
(1) |
Allowance for Sales 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 Receivable, net (in the years ended April 30, 2018 and 2017) with
a corresponding increase in Inventories, net and a reduction in Accrued Royalties for the years ended April 30, 2019, 2018 and 2017. Due to the adoption of the new revenue standard, the sales return reserve as of April 30, 2019 is
recorded in Contract Liability (Deferred Revenue).
In prior periods, it was recorded as a reduction to Accounts Receivable, net
. See Note 3, “Revenue
Recognition, Contracts with Customers,” of the Notes to Consolidated Financial Statements for more information.
|
(2) |
Deductions From Reserves and Other for the years ended April 30, 2019, 2018 and
2017 include foreign exchange translation adjustments. Included in Allowance for Doubtful Accounts are accounts written off, less recoveries. Included in Allowance for Inventory Obsolescence are items removed from inventory. Included
in Valuation Allowance on Deferred Tax Assets are
foreign tax credits generated and valuation allowances needed in connection with the Tax Act.
|
JOHN WILEY & SONS, INC.
|
|||
(Company)
|
|||
Dated: July 1, 2019
|
By:
|
/s/ Brian A. Napack
|
|
Brian A. Napack
|
|||
President and Chief Executive Officer
|
Signatures
|
Titles
|
Dated
|
|||
/s/ Brian A. Napack
|
President and Chief Executive Officer and
|
July 1, 2019
|
|||
Brian A. Napack
|
Director
|
||||
/s/ John A. Kritzmacher
|
Chief Financial Officer and
|
July 1, 2019
|
|||
John A. Kritzmacher
|
Executive Vice President, Operations
|
||||
/s/ Christopher F. Caridi
|
Senior Vice President, Corporate Controller and
|
July 1, 2019
|
|||
Christopher F. Caridi
|
Chief Accounting Officer
|
||||
/s/ Jesse C. Wiley
|
Chairman of the Board
|
July 1, 2019
|
|||
Jesse C. Wiley
|
|||||
/s/ Beth A. Birnbaum
|
Director
|
July 1, 2019
|
|||
Beth A. Birnbaum
|
|||||
/s/ William J. Pesce
|
Director
|
July 1, 2019
|
|||
William J. Pesce
|
|||||
/s/ William B. Plummer
|
Director
|
July 1, 2019
|
|||
William B. Plummer
|
|||||
/s/ Mari J. Baker
|
Director
|
July 1, 2019
|
|||
Mari J. Baker
|
|||||
/s/ David C. Dobson
|
Director
|
July 1, 2019
|
|||
David C. Dobson
|
|||||
/s/ Raymond W. McDaniel, Jr.
|
Director
|
July 1, 2019
|
|||
Raymond W. McDaniel, Jr.
|
|||||
/s/ George D. Bell
|
Director
|
July 1, 2019
|
|||
George D. Bell
|
|||||
/s/ Laurie A. Leshin
|
Director
|
July 1, 2019
|
|||
Laurie A. Leshin
|
|||||
/s/ William Pence
|
Director
|
July 1, 2019
|
|||
William Pence
|
SUBSIDIARIES OF JOHN WILEY & SONS, INC.
(1)
|
|
As of April 30, 2019
|
|
Jurisdiction In Which Incorporated
|
|
John Wiley & Sons International Rights, Inc.
|
Delaware
|
Wiley edu, LLC
|
Delaware
|
Wiley Periodicals LLC
|
Delaware
|
Inscape Publishing LLC
|
Delaware
|
Profiles International, LLC
|
Texas
|
Atypon Systems LLC
Wiley Global Technology (Private) Limited
|
Delaware
Sri Lanka
|
Wiley India Private Ltd.
|
India
|
Wiley APAC Services LLP
|
India
|
WWL LLC
|
Delaware
|
John Wiley & Sons Rus LLC
Wiley International LLC
|
Russia
Delaware
|
Wiley Europe Investment Holdings, Ltd.
|
United Kingdom
|
Wiley Europe Ltd.
Wiley Heyden Ltd.
E-Learning SAS
|
United Kingdom
United Kingdom
France
|
John Wiley & Sons, Ltd.
Atypon Systems Ltd UK
|
United Kingdom
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 GmbH
|
Germany
|
Wiley-VCH Verlag GmbH & Co. KGaA
|
Germany
|
CrossKnowledge Group Limited
|
United Kingdom
|
Wiley Distribution Services Ltd.
|
United Kingdom
|
Blackwell Science (Overseas Holdings)
|
United Kingdom
|
John Wiley & Sons A/S
|
Denmark
|
Wiley Publishing Japan KK
|
Japan
|
Wiley Japan KK
|
Japan
|
Wiley Publishing Australia Pty Ltd.
|
Australia
|
John Wiley and Sons Australia, Ltd.
|
Australia
|
John Wiley & Sons Canada Limited
|
Canada
|
John Wiley & Sons (HK) Limited
|
Hong Kong
|
Wiley HK2 Limited
|
Hong Kong
|
(1)
|
The names of other subsidiaries that would not constitute a significant subsidiary in the aggregate have been omitted.
|
1. |
I have reviewed this annual report on Form 10-K of John Wiley & Sons, Inc.;
|
2. |
Based on my knowledge, this report does not contain any untrue statement 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 report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4. |
The registrant’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 registrant 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 registrant, 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 registrant’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 registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal
quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected or is reasonably likely to materially affect the registrant’s internal control over financial reporting; and
|
5. |
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the
registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a. |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to
adversely affect the registrant’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 registrant’s internal control over
financial reporting.
|
By:
|
/s/ Brian A. Napack
|
||
Brian A. Napack
|
|||
President and Chief Executive Officer
|
|||
Dated: July 1, 2019
|
1. |
I have reviewed this annual report on Form 10-K of John Wiley & Sons, Inc.;
|
2. |
Based on my knowledge, this report does not contain any untrue statement 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 report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4. |
The registrant’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 registrant 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 registrant, 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 registrant’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 registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal
quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5. |
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the
registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a. |
All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to
adversely affect the registrant’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 registrant’s internal control over
financial reporting
|
By:
|
/s/ John A. Kritzmacher
|
||
John A. Kritzmacher
|
|||
Chief Financial Officer and Executive Vice President, Operations
|
|||
Dated: July 1, 2019
|
(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/ Brian A. Napack
|
||
Brian A. Napack
|
|||
President and Chief Executive Officer
|
|||
Dated: July 1, 2019
|
(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/ John A. Kritzmacher
|
||
John A. Kritzmacher
|
|||
Chief Financial Officer and Executive Vice President, Operations
|
|||
Dated: July 1, 2019
|
1.
|
Purposes.
The
purposes of the 2018 Director Stock Plan (the “Director Plan”) are to (a) attract and retain highly qualified individuals to serve as directors of John Wiley & Sons, Inc. (the “Company”) and (b) to increase the Non-Employee Directors’
(as defined below) stock ownership in the Company.
|
2.
|
Effective
Date.
Provided that it is approved by the shareholders,
the Director Plan shall be effective as of September 27, 2018.
Following such approval, no further grants shall be made pursuant to the 2014 Director Stock Plan.
|
3.
|
Participation.
Only Non-Employee Directors shall be eligible to participate in the Director Plan. A “Non-Employee Director” is a person who is serving as a director of the Company and who is not an employee of the Company or any subsidiary or
affiliate of the Company.
|
4.
|
Shares
Subject to the Plan.
Subject to adjustment as provided in Section 10 below, no more than an aggregate of 200,000 shares of Class A Common Stock (the “Common Stock”) shall be delivered to Non-Employee Directors or their
beneficiaries under the Director Plan, which shall be treasury shares. All shares awarded under the Director Plan will be charged against the total available for grant.
|
5.
|
Restricted
Stock Grant.
Beginning with the Annual Meeting held in September 2018, and as soon as practicable after every subsequent Annual Meeting, each Non-Employee Director shall receive a grant of restricted shares of the Company’s
Common Stock, rounded upward or downward to the nearest whole share, with a value of no more than $110,000, which such shares shall vest as provided herein. If a Non-Employee Director becomes a director between Annual Meetings, the value
of the shares shall be proportionately reduced to reflect the Non-Employee Director’s actual days of service during this period. If a Non-Employee Director has elected to defer receipt of the shares under the Deferred Compensation Plan
for Directors (or any successor plan), the grant will be in the form of deferred stock rather than shares of the Company’s Common Stock and shall be subject to the same vesting terms as specified herein. The value of the Common Stock or
deferred stock for purposes of this paragraph shall be determined as of the date of the just concluded Annual Meeting and shall be equal to the closing price for the Common Stock as reported by any primary exchange on which the Common
Stock may be listed on such date or, if no shares of the Common Stock were traded on such date, on the next preceding date on which the Common Stock was traded. The grant shares may not be sold or transferred during the time the
Non-Employee Director remains a Director, but may be sold or transferred in the case of death or disability of the Non-Employee Director. Notwithstanding the first sentence of this Section 5, prior to the grant date at Annual Meetings
following the 2018 Annual Meeting, the Governance Committee shall have the right to make adjustments to the amount of the grant share value, so long as the aggregate value of such shares granted with respect to any Annual Meeting does not
exceed $300,000 per director (excluding for this purpose the value of any dividend equivalents credited on deferred stock and the value of any grants pursuant to an election to receive shares in lieu of cash as described in Section 8
below).The Governance Committee may grant additional awards to the Chairman of the Board, or may elect to provide a cash equivalent in lieu of the Director stock award and any additional restricted share award to the Chairman of the
Board.
|
6.
|
Vesting
.
The shares granted pursuant to Section 5 shall vest on the earliest of (i) the day before the next Annual Meeting following the grant, (ii) the Non-Employee Director’s death or disability (as determined by the Governance Committee), or
(iii) a Change in Control (as defined in the 2014 Key Employee Stock Plan) (each a “Vesting Event”). Unless the Board or the Governance Committee determines otherwise in its sole discretion, the grant shall be forfeited if the
Non-Employee Director’s service terminates for any reason before a Vesting Event. Unless otherwise determined by the Governance Committee, any dividends paid on shares of Common Stock will be paid with respect to the granted shares at
the same time and in the same manner as such dividends are paid generally.
|
7.
|
Cash
Compensation
. In addition, the amount of cash compensation paid or payable by the Company to a Non-Employee Director with respect to any calendar year shall be $100,000 (with additional cash compensation of $15,000 for committee
chair ships for Audit, Executive Compensation and Development, and Governance Committees), which such cash compensation shall be pro-rated for the year an individual first becomes a Non-Employee Director. The Board or the Governance
Committee may reallocate the cash compensation and grant of restricted shares of Common Stock referenced in Section 5 as long as the total aggregate value remains unchanged (for example, $150,000 of stock grants and $60,000 of base cash
compensation. Notwithstanding the first sentence of this Section 7, the Governance Committee or the Board shall have the right to make adjustments to the annual cash compensation amount, so long as the cash payment to a Non-Employee
Director does not exceed $200,000 per director in a calendar year. The Governance Committee may also grant additional cash compensation to the Chairman of the Board.
|
8.
|
Election to
Receive Stock in Lieu of Eligible Cash Fees.
Subject to the terms and conditions of the Director Plan, each Non-Employee Director may elect to receive shares of Common Stock or deferred stock (rounded upward or downward to the
nearest whole share) in lieu of all or a portion of the cash compensation otherwise payable for services to be rendered by such Non-Employee Director during each calendar year that begins after the date on which such election is made.
This election may be made in increments of 25%, 50%, 75% or 100% of such compensation, as determined in accordance with Section 9 below. An election under this Section 8 to have cash compensation paid in shares of Stock shall be valid
only if it is in writing, signed by the Non-Employee Director, and filed with the Corporate Secretary of the Company. The election must be irrevocable with respect to the calendar year to which it applies and must be made no later than
the last day of the previous calendar year and, to the extent Sections 409A of the Internal Revenue Code applies, in accordance with the requirements thereof. Common Stock to be received by a Non-Employee Director pursuant to his or
her election shall be distributed to such Non-Employee Director on each cash payment date. For purposes of this paragraph, cash compensation shall mean the Non-Employee Director’s annual retainer fee and the additional retainer fee
received by committee chairmen.
|
9.
|
Equivalent
Amount of Stock.
The number of whole shares of Common Stock to be distributed or allocated (if deferred stock) to a Non-Employee Director in accordance with the Non-Employee Director’s election made under Section 8 above shall
be equal to:
|
10.
|
Change in
Capital Stock
. The total number of shares of Common Stock that may be issued under the Director Plan shall be appropriately adjusted for any change in the outstanding shares of Common Stock through recapitalization, stock split,
stock dividend, extraordinary cash dividend or other change in the corporate structure, or through merger or consolidation in which the Company is the surviving corporation. The Board in its discretion will determine such adjustments and
the manner of application.
|
11.
|
Nonassignability.
No rights under the Director Plan shall be assignable or transferable by a Non-Employee Director other than by will or the laws of descent and distribution
|
12.
|
Legal
Requirements
. The issuance of shares pursuant to the Director Plan and the subsequent transfer of such shares shall be conditioned upon compliance with the listing requirements of any securities exchange upon which the Stock may
be listed, the requirements of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and the requirements of applicable state laws relating to authorization, issuance or sale of securities. The Board
may take such measures as it deems desirable to secure compliance with the foregoing.
|
13.
|
Administration
.
The Board shall administer and interpret the Director Plan in its sole discretion.
|
14.
|
Construction;
Amendment; Termination
. The Director Plan shall be construed in accordance with the laws of the State of New York, and may be amended by action of the Board and approval of the shareholders (to the extent such approval is
required by applicable law or the rules of the stock market or exchange, if any, on which the shares of Common Stock are principally quoted or traded), or terminated at any time by action of the Board.
|
/s/ Archana Singh
|
/s/ Judy Verses
|
||
Archana Singh
|
Judy Verses
|
||
EVP and Chief Human Resources Officer
|
|||
Date : September 26, 2016
|
|||
Section
|
Subject
|
Page
|
I.
|
Definitions
|
2
|
II.
|
Plan Objectives
|
3
|
III.
|
Eligibility
|
3
|
IV.
|
Performance Targets and Measurement
|
4
|
V.
|
Performance Evaluation
|
4
|
VI.
|
Performance Share Units Award Provisions
|
5
|
VII.
|
Restricted Share Units
|
6
|
VIII.
|
Payouts
|
6
|
XI.
|
Administration and Other Matters
|
7
|
A.
|
Performance
targets
, comprising one or more
financial goals
, are defined
for each
business unit
.
Each
financial goal
is assigned a weight, such that the sum of the weights of all
financial goals
for a
business unit
equals 100%.
|
B.
|
Each
participant
is assigned
performance targets
for one or more
business units,
based on the
participant’s
position, responsibilities, and his/her ability to affect
the results of the assigned
business unit
. For each
participant
, each
business unit
is assigned a weight
,
such that the sum of the weights of all
business units
for a
participant
equals 100%
.
Collectively,
all
business unit performance targets
constitute the
participant’s plan period
objectives.
|
C.
|
Each
financial
goal
is assigned
performance levels
(threshold, target and outstanding).
|
A.
|
Financial Results
|
1.
|
At the end of the
plan period,
the
financial results
for each
business unit
are compared with that unit’s
financial goals
to determine the
payout
for each
participant
.
|
2.
|
In determining the attainment of
financial goals
, the impact of any of the events (1) through (9) listed in Section 10.2 of the
shareholder
plan
will
be excluded from the
financial results
for any affected
business unit.
|
3.
|
Award Determination
|
·
|
Achievement of
threshold
performance of at least one
financial goal
of a
performance target
is necessary for a
participant
to receive a
payout
for that
performance target
.
|
·
|
The unweighted
payout
factor for each
financial goal
is determined as follows:
|
o
|
For performance below the
threshold
level, the
payout factor is zero.
|
o
|
For performance at the
threshold
level, the payout factor is 50%.
|
o
|
For performance between the
threshold
and
target
levels, the payout factor is between 50% and 100%, determined on a pro-rata basis.
|
o
|
For performance at the
target
level, the payout factor is 100%.
|
o
|
For performance between the
target
and
outstanding
levels, the payout factor is between 100% and 150%, determined on a pro-rata
basis.
|
o
|
For performance at or above the
outstanding
level, the payout factor is 150%.
|
·
|
A participant’s
plan-end adjusted performance share unit award
is determined as follows:
|
o
|
Each
financial
goal’s
unweighted
payout factor determined above times the weighting of that
financial goal
equals the weighted
payout factor
for
that
financial goal
|
o
|
The sum of the weighted
payout factor
s
for a
business unit’s
financial goals
equals the
payout factor for that
performance target.
|
o
|
The participant’s target incentive
|
o
|
The sum of the payouts for all the business units assigned to a
participant
equals the
participant’s
total
plan-end adjusted performance share unit award
.
|
·
|
The
Committee
may, in its sole discretion, reduce a
participant
’s payout to any level it deems appropriate.
|
A.
|
Performance
share units
, equal to 60% of a
participant
’s
target incentive,
shall be determined at the beginning of the
plan period.
|
B.
|
The
plan-end
adjusted performance share unit award
will be compared to the
performance share units
targeted at the beginning of the
plan period
, and the appropriate amount of
performance share units
will be awarded or forfeited, as required, to bring the
performance share units
award to
the number of shares designated as the
plan-end
adjusted performance share unit award
.
|
A.
|
Normal Payout
.
Plan-end adjusted performance share units awards
will be made within 2-1/2 months after the end of the plan period.
|
B.
|
Resignation or Termination
with or without Cause
. Except as otherwise provided in this Section VIII or in a written agreement approved by the
Committee
,
a
participant
who resigns, or whose employment is terminated by the
Company
, with or without cause before the
award
is vested, will forfeit the right to
receive an
award
.
|
C.
|
Death or Disability
.
Solely to the extent provided by the
Committee
in the award summary or in a written agreement, in the event of a
participant’s
death or disability while in employment prior to the end of the
plan period
, the
participant
(or, in the event of death, his or her estate) will
receive a prorated
plan-end adjusted performance share unit award
which shall be paid out in shares based upon actual performance
upon the conclusion of the plan period, within 2-1/2 months after the end of the plan period. “Disability” for this purpose will be determined by the
Committee
under a definition permitted under Code Section 409A.
|
D.
|
Retirement
. Except
as otherwise provided in this Section VIII or in a written agreement approved by the
Committee
, in the event of a
participant’s
retirement as that term is defined in the
shareholder plan,
prior to the end of the
plan period
, the
participant
will receive a prorated
plan-end adjusted performance share unit
award
(as determined by the
Committee
) which shall be paid out in shares based upon actual performance upon the conclusion
of the
plan period
, within 2-1/2 months after the end of the plan period.
|
E.
|
Change of Control
.
In the event of a Change of Control, as that term is defined in the
shareholder plan
, in cases where:
|
·
|
the acquiring company is not publicly traded, or
|
·
|
where the acquiring company is publicly traded and the company does not assume or replace the outstanding
equity, or
|
·
|
participant’s
employment is terminated due to a "without cause termination" or "constructive discharge" within twenty-four months following a change of control,
|
F.
|
Performance
Share Units
Earned for Completed Plan Periods
. In the event of the
participant’s
death, Disability, or retirement as that term is defined in the
shareholder plan
or
performance share unit
grant agreement, following the end of the
plan period
but prior to full vesting of the
plan-end adjusted performance share unit awards
,
such
performance share units
shall immediately become fully vested.
|
G.
|
Change in Position
.
A
participant
who is hired or promoted into an eligible position during the
plan period
may receive a prorated
plan-end adjusted performance share unit award
as determined by the
Committee
, in its sole discretion.
|
A.
|
The
plan
will be administered by the
Committee
, which shall have authority in its sole discretion to interpret and administer this
plan
, including, without limitation, all questions regarding eligibility and status of any
participant
, and no
participant
shall have any right to receive a
payout or payment of any kind whatsoever, except as determined by the
Committee
hereunder.
|
B.
|
The
Company
will have no obligation to reserve or otherwise fund in advance any amount which may become payable under the
plan
.
|
C.
|
In the event that the
Company
is required to file a restatement of its financial results due to fraud, gross negligence or intentional misconduct by one or more employees and/or material non-compliance with Securities laws, the
Company
will cancel the unvested
performance
share units
previously granted to all
participants
in the amount by which such shares exceeded any lower number of shares
that would have been earned based on the restated financial results, for the plan cycle in which the restatement was required, and if applicable, any gain associated with the award for that plan cycle will be repaid to the
Company
by the participant in the amount by which such gain exceeded any lower gain that would have been made based on the restated
financial results, to the full extent required or permitted by law. This provision extends beyond the clawback requirements under Sarbanes-Oxley that are limited to our Chief Executive Officer and Chief Financial Officer.
|
D.
|
This
plan
may not be modified or amended except with the approval of the
Committee
, in accordance with the provisions of the
shareholder plan.
|
E.
|
In the event of a conflict between the provisions of this
plan
and the provisions of the
shareholder plan
, the provisions of the
shareholder plan
shall apply.
|
F.
|
No awards of any type under this
plan
shall be considered as compensation for purposes of defining compensation for retirement, savings or supplemental executive retirement plans, or any other benefit.
|
Section
|
Subject
|
Page
|
I.
|
Definitions
|
2
|
II.
|
Plan Objectives
|
3
|
III.
|
Eligibility
|
3
|
IV.
|
Performance Targets and Measurement
|
3
|
V.
|
Performance Evaluation
|
4
|
VI.
|
Payouts
|
5
|
VII.
|
Administration and Other Matters
|
5
|
A.
|
Performance targets,
comprising
one or more
financial goals,
are defined for each
business unit
. Each
financial goal
is assigned a weight, such that the sum of the weights of all
financial goals
for a
business unit
equals 100%.
|
B.
|
Each
participant
is assigned
performance targets
for one or more
business
units ,
based on the
participant’s
position, responsibilities, and his/her ability to affect the results of the assigned
business unit
. For each
participant
,
each
business unit
is assigned a weight
,
such that the sum of the weights of all
business units
for a
participant
equals 100%
.
Collectively, all
business unit performance targets
constitute the
participant’s
plan year
objectives.
|
C.
|
Each
financial goal
is
assigned
performance levels
(
threshold
,
target
and
outstanding
).
|
A. |
Financial Results
|
1.
|
At the end of the
plan year,
the
financial results
for each
business
unit
are compared with that unit’s
financial goals
to determine the
payout
for each
participant
.
|
2.
|
In determining the attainment of
financial
goal
s,
|
a.
|
the impact of foreign exchange gains or losses will be excluded.
|
b.
|
the impact of any of the events (1) through (9) listed in Section 4(b)(ii) of the
shareholder plan
will be excluded from the
financial results
of any affected
business unit.
|
3.
|
Award Determination
|
a.
|
Achievement of
threshold
performance of at least one
financial goal
of a
performance target
is necessary for a
participant
to receive a
payout
for that
performance target
.
|
b.
|
The unweighted
payout factor
for each
financial goal
is determined as follows:
|
1.
|
For performance below the
threshold
level, the
payout factor is zero.
|
2.
|
For performance at the
threshold
level, the payout factor is 50%.
|
3.
|
For performance between the
threshold
and
target
levels,
the
payout
factor is between 50% and 100%, determined on a pro-rata basis.
|
4.
|
For performance at the
target
level, the
payout factor is 100%.
|
5.
|
For performance between the
target
and
outstanding
levels, the
payout
factor is between 100% and 150%, determined on a pro-rata basis.
|
6.
|
For
performance at or above
the
outstanding
level, the payout factor is 150%.
|
c.
|
A
participant’s payout
is
determined as follows:
|
1.
|
Each
financial goal’s
unweighted
payout factor determined above times the weighting of that
financial goal
equals the weighted
payout factor
for
that
financial goal.
|
2.
|
The sum of the weighted
payout
factors
for a
business unit
’s
financial goals
equals the
payout
factor for that
performance target.
|
3.
|
The
participant’s total annual
incentive opportunity
|
4.
|
The sum of the
payouts
for
all the
business units
assigned to a
participant
equals the
participant’s
total
payout.
|
d.
|
If the
payout
for the
Company
is higher than the payout for the other
business units
, the
payout
for the
Company
will be reduced to the level of the highest
business unit
payout
.
|
e.
|
If the
payout
for the
Company
or any of the
business units
is below 25%, the
payout
for the impacted
participants
will be funded 25%, provided the
Company’s
performance on
operating income
achieves at least 85% of
target
.
|
f.
|
The
Committee
may, in its
sole discretion, reduce a
participant
’s
payout
to any level it deems appropriate.
|
A.
|
Payouts
will be made within 90
days after the end of the
plan year.
|
B.
|
In the event of a
participant's
death, disability, retirement or leave of absence prior to the
payout
for the
plan year
, the
payout
, if any, will be determined by the
Committee.
Any such
payout
will be calculated as
noted in Section V.
|
C.
|
A
participant
who resigns, or
whose employment is terminated by the
Company
, with or without cause, before the
payout
for the
plan year
, will not receive a
payout
. Exceptions to this provision shall be made with the approval of the
Committee
, in its sole discretion.
|
D.
|
A
participant
who is hired or
promoted into an eligible position during the
plan year
may receive a prorated
payout
as determined by the
Committee
, in its sole discretion.
|
A.
|
The
plan
will be administered
by the
Committee
, which shall have authority in its sole discretion to interpret and administer this
plan
, including, without limitation, all questions regarding eligibility and status of any
participant
, and no
participant
shall have any right to receive a payout or payment of any kind
whatsoever, except as determined by the
Committee
hereunder.
|
B.
|
The
Company
will have no
obligation to reserve or otherwise fund in advance any amount which may become payable under the
plan
.
|
C.
|
In the event that the
Company
is required to file a restatement of its financial results due to fraud, gross negligence or intentional misconduct by one or more employees, and/or material non-compliance with Securities laws, the
Company
will require reimbursement of any annual incentive compensation awarded to all
participants
in the amount by which such compensation exceeded any lower payment that would have been made based on the restated
financial results
, for the fiscal year in which the restatement was required, to the full extent required or permitted by law.
|
D.
|
This
plan
may not be modified
or amended except with the approval of the
Committee,
in accordance with the provisions of the
shareholder plan.
|
E.
|
In the event of a conflict between the provisions of this
plan
and the provisions of the
shareholder plan
, the provisions of the
shareholder plan
shall apply.
|
Section
|
Subject
|
Page
|
I.
|
Definitions
|
2
|
II.
|
Plan Objectives
|
4
|
III.
|
Eligibility
|
4
|
IV.
|
Performance Objectives and Measurement
|
4
|
V.
|
Performance Evaluation
|
4
|
VI.
|
Payouts
|
5
|
VII.
|
Administration and Other Matters
|
6
|
A. |
Strategic milestones
are quantitative and qualitative
individual objectives over which the
participant
has a large measure of control, which lead to, or are expected to lead to,
improved performance for the
Company
in the future.
Strategic milestones
are determined near the beginning of the
plan year
by the
participant
and approved by President and CEO or the
participant's
manager, if the President and CEO is not the
participant's
manager.
|
B. |
The
strategic milestones
for the President and CEO
are reviewed and approved by the
Committee.
|
C. |
The
strategic milestones
for the President and CEO
should be appropriately reflected in those of all other employees at all levels. Each
participant
collaborates with his/her
manager in setting
strategic milestones
. The
strategic milestones
may be revised during the
plan year
, as appropriate.
|
D. |
The determination of
strategic milestones
includes
defining a
target
level of performance and the measure of such, and may include defining
threshold
and
outstanding
levels of performance and the
measures of such.
|
A. |
Achievement of a
participant's strategic milestones
will be determined at the end of the
plan year
by comparing results achieved to previously set objectives.
|
B. |
The President and CEO will recommend for each
participant
an
achievement level
and a
payout
factor
between 0 and 150%, based on performance and using the table below, for achievement of all
strategic milestones,
by
comparing results achieved to the previously set objectives. In determining the
payout factor
, the overall performance on all
strategic milestones
will be considered. The
Committee
will approve the
payout factor
and
payout
for all
participants
.
|
Performance Category
|
Payout Range
|
Exceeds Most Expectations
|
125% - 150%
|
Exceeds Some Expectations
|
110% - 125%
|
Meets All Expectations
|
90% - 110%
|
Meets Most Expectations
|
0% - 90%
|
Does Not Meet Expectations
|
0%
|
|
1. |
Notwithstanding anything to the contrary, the maximum
payout
,
if any, a
participant
may receive is 150% of the
target incentive amount
.
|
|
2. |
The foregoing
strategic milestones
payout
calculation is intended to set forth general guidelines on how awards are to be determined. The purpose of this
plan
is to motivate the
participant
to perform in an
outstanding
manner. The President and CEO has discretion under this
plan
to take into consideration the contribution of the
participant
,
the
participant's
management of his/her organizational unit and other relevant factors, positive or negative, which impact the
Company's
, the
participant's
organizational unit(s), and the
participant's
performance overall in determining whether to recommend granting or denying an award,
and the amount of the award, if any. If the
participant
is the President and CEO, such discretion is exercised by the
Committee
.
|
A.
|
Payout
s will be made within 90
days after the end of the
plan year.
|
B.
|
In the event of a
participant's
death, disability, retirement or leave of absence prior to the
payout
for the
plan year
, the
payout
, if any, will be recommended by the President and CEO to
the
Committee
which shall have sole authority for approval of the payout.
|
C.
|
A
participant
who resigns, or
whose employment is terminated by the
Company
, with or without cause, before
payout
for the
plan year
, will not receive a
payout
. Exceptions to this provision shall be made with the approval of the
Committee
, in its sole discretion.
|
D.
|
A
participant
who transfers
between businesses of the
company
, will have his/her
payout
prorated to the nearest fiscal quarter for the time spent in each business, based on the achievement of
strategic
milestones
established for the position in each business, and based upon a judgment of the
participant's
contribution to the
achievement of goals in each position, including interim revisions, if appropriate.
|
E.
|
A
participant
who is
appointed to a position with a different
target incentive percent
will have his/her
payout
prorated to the nearest fiscal quarter for the time spent in each position, based on the achievement of
strategic milestones
established for each position.
|
F.
|
A
participant
who is hired or
promoted into an eligible position during the
plan year
may receive a prorated
payout
as determined by the President and CEO, in his/her sole discretion, subject to the approval of the
Committee
.
|
A. |
The
plan
is effective for the
plan year
. It will terminate, subject to
payout
, if any, in accordance with and subject to the provisions of this
plan.
|
B.
|
This
plan
will be
administered by the President and CEO, who will have authority to interpret and administer this
plan
, including, without limitation,
all questions regarding eligibility and status of the
participant
, subject to the approval of the
Committee
.
|
C.
|
In the event that the
Company
is required to file a restatement of its financial results due to fraud, gross negligence or intentional misconduct by one or more employees, and/or material non-compliance with Securities laws, the
Company
will require reimbursement of any annual incentive compensation awarded to all
participants
in the amount by which such compensation exceeded any lower payment that would have been made based on the restated financial results, for the fiscal year in which the restatement was
required, to the full extent required or permitted by law.
|
D.
|
This
plan
may be withdrawn,
amended or modified at any time, for any reason, in writing, by the
Company.
|
E.
|
The determination of an award and
payout
under this
plan
, if any, is subject to the approval of the President and CEO and the
Committee
. This
plan
does not confer upon any
participant
the right to receive any
payout
,
or payment of any kind whatsoever.
|
F.
|
No
participant
shall have any
vested rights under this
plan
. This
plan
does not constitute a contract.
|
G.
|
All deductions and other withholdings required by law shall be made to the
participant's
payout
, if any.
|