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Operator
Good morning and welcome to Wiley's third-quarter earnings call. As a reminder, this conference is being recorded. At this time I'd like to introduce Wiley's Vice President of Investor Relations, Brian Campbell. Please go ahead, sir.
Brian Campbell - VP of IR
Good morning, everyone, and welcome to our third-quarter 2017 earnings call. Just some housekeeping items before we begin. The call is being recorded and may include forward-looking statements. You shouldn't rely on these statements as actual results may differ materially and are subject to factors discussed in our filings with the SEC. The Company does not undertake any obligations to update or revise forward-looking statements to reflect any subsequent events or circumstances.
For those who prefer to listen to the call over the phone but still want to view the slides, we recommend that you click on the gears icon located in the lower portion of the left-hand side window and select live phone. This will eliminate any delays in viewing the slide transitions as well as remove any potential background noise if you prefer to ask questions. After the call, a copy of the presentation and a playback of the webcast will be available on our investor relations page. I'll now turn the call over to Mark Allin, Wiley's President and CEO.
Mark Allin - President & CEO
Thank you, Brian, and good morning, everyone. Joining us on the call today is John Kritzmacher, CFO and Executive Vice President, Technology and Operations. I will speak to business performance and John will follow with an update on operations, balance sheet, cash flow and outlook.
Before talking about results, note that I will be excluding the impact of foreign exchange when commenting on all variances. Foreign exchange continues to be a revenue headwind, particularly in light of the Brexit decision. The unfavorable impact to revenue was approximately $13 million for the quarter and $37 million for the nine months.
In terms of EPS, the currency impact was neutral in the quarter but unfavorable by $0.05 for the nine months. Please note the impact of FX on our EPS is somewhat naturally hedged by the global footprint of our operations, particularly in the UK. Now on to results. Revenue for the quarter was up 3%, which is primarily due to the $29 million favorable impact of the shift time-based journal subscriptions.
As a reminder, Wiley transitioned from issue-based to time-based digital journal subscriptions for calendar year 2016 to simplify the contracting and administration of these agreements. Approximately $34 million of revenue and $0.38 of EPS shifted from FY16 to this fiscal year, with most of it showing up in this quarter. Note the original projection was for $37 million and $0.42, but the numbers have changed a bit due to foreign exchange impacts, primarily weakness in the British pound.
Also contributing to revenue growth was an $8 million contribution from the Atypon acquisition, steady performance from journal subscriptions and double-digit growth from the solutions segment, which helped offset a market-driven 18% decline in book publishing revenue and the impact of an unusually large one-time $10 million backfile sale in the prior-year period. We will discuss book performance in more detail when we get to our segment results. Note: if you exclude the impact of the time-based subscription shift and the contribution from Atypon, third-quarter revenue at constant currency declined 5%.
Adjusted EPS for the quarter was up 37%, primarily due to the $0.33 impact from the shift to time-based subscriptions and $0.12 in one-time tax benefits related to foreign tax credits, which offset Atypon and Ranku dilution of $0.03, the high margin backfile sale in the prior year, and weakness in book publishing. Excluding the time-based subscription shift and the Atypon and Ranku dilution, adjusted EPS at constant currency declined 5%. Free cash flow was a positive story, rising from [$19] million in the prior-year period to $120 million with most of that due to early journal cash collections.
This is largely a result of the introduction of our database model, which is accelerated renewals and reduced transaction complexity for our customers. Most of that improvement will unwind in the fourth quarter as we near the completion of the subscription sales cycle. Lower tax and restructuring payments also contributed to the favorable cash performance.
In our education services business we signed 4 prominent universities as online program partners: George Mason, St. John's and Seton Hall in the US, and Vlerick Business School in Belgium, as well as 19 new programs. Moreover, this business continues to make significant progress in growing operating profit. Journal subscription renewals are up 5% with 80% -- 87% of calendar year 2017 business now closed.
As noted, the improvement is primarily due to sales acceleration from the rollout of our library database model. For the full calendar year, we're projecting about 1% growth in subscriptions -- in line with the market. We're making good progress with the Atypon integration which will be key to our strategy of growing underlying revenue in research. Atypon's market-leading, online publishing platform provides digital distribution, web development tools and analytics for over 200 publishers and societies.
We believe that Atypon and Wiley together are uniquely positioned to extend our services for authors and society publishers. With all of that said, underlying results for the quarter are mixed. As I noted, our biggest business research continues to deliver solid performance while our solutions businesses are growing well in very competitive markets.
We face persistent market challenges in our books business, particularly education, which is down 27% for the quarter and 19% for the nine months. As a result, we are revising operational guidance for revenue downward from flat to a low single digit revenue decline. On a comparable basis, revenue is down 3% year to date. Adjusted EPS guidance of a mid-single digit decline is reaffirmed.
On a comparable basis adjusted EPS is down 6% year to date. Both projections exclude the impact of foreign exchange, the favorable shift to subscription revenue, the impact of the acquisitions and unusual charges and credits. I'll just touch briefly on this slide, focusing more on the year-to-date numbers. For the nine months, revenue, adjusted operating income and adjusted EPS were up 1%, 3% and 6% respectively.
However, if you normalize for certain non-operational items, including the favorable shift to time-based subscriptions, the impact of the Atypon and Ranku acquisitions, tax and restructuring charges and the pension settlement, the underlying performance for year-to-date revenue, adjusted operating income and adjusted EPS saw a decline of 3%, 11% and 6% respectively. As already noted, steady research performance and strong solutions growth were more than offset by the continuing market-driven decline in book publishing. Year-to-date earnings performance was also impacted by investment in ERP and other areas as expected.
Moving to our research segment, third-quarter journal revenue increased 12%, primarily due to the shift to time-based subscriptions which offset a $10 million backfile sale in the prior-year period. On an underlying basis, journal subscription performance was even while author-funded access grew by 15%. Atypon contributed $8 million in the quarter and $10 million year to date.
We're pleased with Atypon's top-line performance and enthused by what the platform will enable for us, both technically and strategically. Calendar year 2017 billings are up over 5% with 87% of business closed, although much of this is due to early renewals enabled by our move to the database model which has been very well received by customers. As a reminder, we implemented a new database model in FY16 for our largest and most mature customers, providing attractive pricing, simplified contracting for online access to our entire collection of research journals.
These benefits have accelerated the selling cycle and cash collections. For the full calendar year, we expect billings to be up around 1%. We renewed or extended 78 society publishing contracts in the quarter, worth $57 million. Overall, we netted a very marginal decline in society publishing contracts for the quarter.
As a reminder, for the full calendar year 2017, we expect a flat to modest net gain in our contracted society publishing business. Adjusted contribution to profit, or adjusted CTP, was up 17% due to the favorable $25 million shift of gross profit related to time-based subtractions, which offset the high margin $10 million backfile in the prior year and investment to migrate Wiley Online Library to Atypon's Literatum platform. As a reminder, Literatum is the most widely used and fully featured online publishing platform for the professional and scholarly publishing industry, posting one-third of the world's English-language journals.
Through the nine months, revenue and adjusted contribution to profit were up 8% and 4% respectively, again, driven mostly by the time-based subscription shift. In short, we're generally pleased with the consistent performance of research -- our largest and most profitable segment. For the quarter, the publishing segment, which includes books, course workflow and online test preparation, experienced a revenue decline of 13%.
Book publishing had another difficult quarter with education down 27% and STM and professional down 12%, primarily driven by print declines across most categories and an unusually large online book sale of $4 million in the prior year. Sales of new textbooks continue to be severely impacted by lower cost rentals, channel inventory corrections and softer enrollments. Brighter spots include online test preparation and course workflow, both continue to deliver good growth, up 29% and 7% respectively.
Our recently launched ACT test prep solution is performing well and we see strong momentum in securing new testing and certification partnerships and products. Adjusted contribution to profit declined 21%, primarily due to the revenue decline. For the nine months, revenue and adjusted contribution to profit were down 11% and 15% respectively. It goes without saying that book markets have been struggling for some time and we have not been immune.
The pace of market erosion has accelerated over the past year. Our content is still in demand but often in different formats of models available at lower price points. In some case, the content is in demand and packaged as part of the service. In addressing these market trends, we are examining our portfolio to determine which parts of the business are attractive to us and which do not align with our longer-term learning strategy. We will provide more detail in June.
Note that our combined books business made up less than 30% of total year-to-date revenue. The education book business, responsible for much of that decline, was less than 13% of revenue. Solutions is a good story as the segment continues to post double-digit revenue gains and significant profit improvement. The important news here is the signing of 4 new university partners and 19 new programs.
We continue to benefit from our unique position as the top online program management provider, a leading academic research publisher and a reputable provider of course material. We continue to optimize our portfolio and improve operating efficiency. In the quarter, one underperforming non-US partnership and six programs under contract were discontinued.
As of January 31, Wiley had 40 university partners and 244 programs under contract, compared to 37 partners and 231 programs at the end of last quarter. Corporate learning continues to see strong double-digit growth from new and existing corporate clients across Europe and North America. In the quarter, Wiley signed prominent clients in the US, Germany, the UK and France. The professional assessment business, up 5%, continues to be driven by consistent growth from the post-hire business.
Adjusted contribution to profit more than doubled again to $5 million due to improved operating efficiency, particularly in the online program management business. For the nine months, revenue was up 13% while adjusted contribution to profit increased from $500,000 to $11 million. And now over to John, who will take you through our shared service costs, balance sheet, cash flow and outlook.
John Kritzmacher - CFO & EVP of Technology and Operations
Thank you, Mark. Adjusted shared services cost declined 4% in the quarter, driven by 5% declines across distribution and operations and technology and content management. We continue to make real improvements in our operational effectiveness as an organization with more opportunity still ahead. Technology, excluding content management, was down 5% in the quarter due to lower applications development expense, including lower ERP spending.
We expect technology spend, which includes our ERP investment, to be up about 5% for the full year. Looking more broadly, we continue taking actions to drive operational excellence and cost efficiencies across all our business. Toward that end, we incurred a $9 million restructuring charge in the quarter. Approximately $6 million of the charge relates to facilities consolidations with near-term paybacks.
Another $3 million of the charge covers severance related to additional workforce efficiency gains. Our balance sheet continues to provide us with the flexibility and capacity to prudently invest in our business while also returning capital to shareholders. At the end of the third quarter, net debt had been reduced to $383 million from $429 million in the prior-year period. On a trailing 12 month basis, net debt to EBITDA was 1.1 and also 1.1 at the end of the prior-year period.
With respect to potential acquisitions, our interests remain focused on enablers for profitable growth in digital research and learning solutions. These opportunities would include adding highly synergistic products and services and increasing scale in our growth businesses. Cash flow is up sharply year to date with operating cash flow at $229 million versus $117 million in the prior year and free cash flow less composition spending at $120 million versus $19 million in the prior year.
Note that we have expanded the free cash flow label for clarity but the underlying metric is unchanged. The favorable performance was mostly driven by earlier journal cash collections, largely as a result of our successful transition to a database journal subscription model for our largest and most mature customers. These accelerated journal cash collections were largely pulled forward from the fourth quarter and most of the year-to-date gain will unwind in the next quarter.
Also contributing to free cash flow performance were a reduction in tax payments of $9 million and a decline in restructuring payments of $9 million which offset higher CapEx related to our headquarters. Throughout the year we have said that cash flow from operating activities would be flat and free cash flow would be down by $30 million due to higher capital investment. This expectation continues to be roughly right.
As a reminder, we've spent $120 million on the Atypon acquisition which closed in the second quarter. Finally, we utilized $14 million this quarter to repurchase 255,000 shares at an average cost per share of $55.14. Through nine months, we returned a total of $89 million to shareholders in the form of dividends and share repurchases. Our remaining share repurchase authorization is approximately 4 million shares.
As a reminder, we typically review the quarterly dividend at our June Board meeting. Throughout the year, our operational outlook has called for flat revenue and a mid single-digit decline in adjusted EPS. Through nine months, revenue is down operationally 3% due to the accelerated market-driven decline in books. Given the book market weakness, we are lowering our full-year revenue projection to a low single-digit decline.
Meanwhile, our year-to-date adjusted EPS is down operationally 6%. Despite lower revenue, we are maintaining our forecast for a mid single-digit decline in EPS, partly enabled by the one-time tax benefits of $0.12 realized in the third quarter. As a reminder, our operational outlook excludes several items starting with the impact of foreign exchange. Year to date, foreign exchange has adversely impacted revenue and EPS by $37 million and $0.05 respectively.
Our operational outlook also excludes the impact of shifting to time-based subscriptions which favorably impacts revenue and EPS in FY17 by $34 million and $0.38 respectively. And the outlook excludes the Atypon and Ranku acquisitions, which will add $20 million of revenue but $0.10 of EPS dilution. We also exclude unusual charges and credits, including the $0.84 second-quarter charge related to the German tax decision. I'll now turn the call back to Mark.
Mark Allin - President & CEO
Thanks, John. In summary, research and solutions continue to perform well and as expected. We are focused on improving top-line growth in the former and profitability in the latter. Atypon is a key strategic focus for us, allowing us to blend together content and service in this global, digital and dynamic marketplace.
It immediately positions us as an innovative leader in the space. Our focus is to improve top-line performance in this all-important segment and we believe we have the assets to do that. Our online program management business is showing very strong momentum with the signing of 4 new partners and 19 new programs. The partnerships are getting larger, as evidenced by our George Mason announcement.
Corporate learning continues to make good progress on two continents with new corporate clients signed in the US, UK, France and Germany. In addition, the year-to-date profit contributions and solution segment has risen from $500,000 in the prior year to nearly $11 million today. We are addressing the issues in book publishing. We will provide more detail on performance and remedial actions during our year-end conference call.
We recognize the problems, we're addressing them and we will share more information as we finalize our plans. Our content is still in demand but the market is evolving rapidly, presenting both challenges and opportunities which we are moving to address at pace. Our operational revenue outlook for this year has been revised downward but adjusted EPS is reaffirmed. While FY17 is an investment year and books are challenged, our foundation in research and learning services remains on very solid ground.
Our strong cash flow generation should only improve over time, and our focus on operational excellence and investment should yield significant long-term benefit. We have work to do but we remain fully confident in our asset base, including both content and platforms, in our market position and in our people. And with that as background, we welcome your questions.
Operator
(Operator Instructions)
Dan Moore, CJS Securities.
Robert Majek - Analyst
Good morning. This is actually Robert Majek filling in for Dan today. Looking at education textbooks, it is a bit unusual to see an acceleration in the rate of decline at this point in the academic year. Are there specific channels where you're seeing more weakness, and is rental penetration accelerating?
Mark Allin - President & CEO
So I think there are three -- if we step back from one quarter -- I think it is always important with the education business to look across 9 to 12 months, partly because the timing of ordering, the shift to digital ordering which moves further up in the cycle and much closer to the start of the semester, can all impact it. But the same basic trends applied in this quarter is applied through the rest of the year, and it is roughly an even mix between adjustments in inventory in the channel, which turns up for us in the form of returns, the impact of rental as a lower cost option for students, and the softening of enrollments.
So I think what you're seeing primarily in this quarter is the continued inventory correction piece of that, whilst on a lower base of enrollments, with rental still an impact. So there's no real shift between those drivers. They just continued to intensify, as they have done over the last nine months.
Robert Majek - Analyst
And is there a base level of revenue for education texts that, once you reach, you foresee the rate of decline leveling off?
Mark Allin - President & CEO
That's harder to project forward at this point. I think there's so many things at play, including student behavior, the level of enrollments, the mix between the use of digital course solutions, which is obviously where we are anticipating the market to go over time and where our investment is. But in the meantime, we're still facing particularly the impact of lower cost options. So at this point, I wouldn't speculate about that.
Robert Majek - Analyst
Okay, thank you. And just lastly for me, online program management -- congratulations on signing the four new partners. Just in terms of contribution to earnings or dilution, should we still expect profitability in this segment to improve in FY18 or will start-up cost related to new partners push that out further a bit to the right?
John Kritzmacher - CFO & EVP of Technology and Operations
Robert, this is John Kritzmacher. We are expecting, as we've said throughout the year, that for FY17 the performance in terms of profitability for the online programs business will improve substantially. Last year we were on the order of $0.16, $0.17 dilution, where we have said throughout this year that we expect dilution for the online programs business to be somewhere on the order of $0.10. And we're making steady progress toward that in our results through the third quarter.
Robert Majek - Analyst
Thank you.
John Kritzmacher - CFO & EVP of Technology and Operations
Thank you.
Operator
Drew Crum, Stifel.
Drew Crum - Analyst
Okay, thanks. Good morning, guys. On the calendar 2017 journal subscription renewals being up 5% year to date, can you talk about the nature of the remaining 13%? You've got the contract for it. The math would suggest that part of business would be down pretty significantly year on year. But just want to make sure that's accurate, and understand how you get to up only 1% when you're up 5% year to date.
John Kritzmacher - CFO & EVP of Technology and Operations
So, Drew, what we're seeing principally at this point in time is timing differences that we are attributing to our move of our largest and most mature customers onto database model, which essentially is providing unrestricted access to our library, rather than highly specified title-by-title sorts of subscription decisions. That approach to contracting subscriptions with our larger customers has greatly simplified the whole administrative cycle and selling cycle around those subscriptions.
So what we're seeing is renewals happening earlier, and that's providing us with growth at this stage. But we essentially see that as a pull forward in time from subscriptions that would have largely closed in the quarter that we are now in, in the fourth quarter. So it's timing, for the most part.
Drew Crum - Analyst
Okay. And then two other housekeeping items on research: The Atypon dilution that you are expecting, at now $0.10, I believe it was previously $0.15. Can you confirm that, and what's driven the change in the expected dilution?
John Kritzmacher - CFO & EVP of Technology and Operations
So, yes, it was previously -- we had seen it as being on the order of $0.15. It's now favorable to that. Much of the favorability comes from the integration costs that we anticipated being lower so far and what we expect for the balance of the year. That's the most important part of it.
Drew Crum - Analyst
Okay. And, John, can you remind us the impact that the backfile sale had in the year-ago period in terms of accretion to earnings?
John Kritzmacher - CFO & EVP of Technology and Operations
So the backfile sale in the year-ago period was $10 million in terms of revenue, and it was about $0.10 in terms of its impact on earnings.
Drew Crum - Analyst
Okay. And then just one last question for me: In terms of the online program management deals that you announced, without getting into specifics with respect to terms and economics, any commentary on how these compare to the 10-year partnership you signed with George Mason?
Mark Allin - President & CEO
Yes. We've talked for a little while about evolving this Business towards bigger, more recognizable national brand partners with whom we can develop longer-term relationships across a broad number of programs, which we develop over time, and programs which we believe will drive higher average enrollments over time, as well as the core driver. And all four of the relationships that we've signed -- obviously three in the US, one is a very recognized brand in Europe -- represent the kind of partners who we think give us that market reach brand recognition and the kinds of programs which will attract students looking for education solutions to their employment needs and professional growth. So these are the right kind of partners developing the right kind of programs over time.
Drew Crum - Analyst
And, Mark, just to finish the question, the 10-year -- the duration of the George Mason deal, are you guys sacrificing economics in favor of longer-duration partnerships or no?
Mark Allin - President & CEO
No. I think the basic economics of per program that we've talked about before -- the upfront investment in marketing and the move towards economic productivity over a 2- to 3-year period applies. The 10-year relationship here is really about us developing a broad set of programs over time and having confidence that we can do that. It doesn't really shift the economics on a program basis and, therefore, on a partner basis overall.
Drew Crum - Analyst
Okay. Thanks, guys.
John Kritzmacher - CFO & EVP of Technology and Operations
Thanks, Drew.
Operator
(Operator Instructions)
Allen Klee, Sidoti & Company.
Allen Klee - Analyst
Yes, hi. During the analyst day, you talked about longer-term goals of growing research at faster-than-the-market rate. Can you talk a little about your thoughts of when you might start to see that and the actions you are taking to get to those goals? Thank you.
Mark Allin - President & CEO
Sure. I can talk about it roughly in the same way as we did in the investor day. So there are three key drivers. One is continuing to grow our output and publishing footprint -- so capturing a greater share of output; continuing to grow our market footprint in terms of customers, particularly globally, and obviously leveraging the investment in Atypon to position us both to compete and win society business and to grow services that we offer towards some partners more generally.
Those are multi-year investments, but we're putting those in place now. And we expect to see the benefits of those begin to show up in the way that we are performing and in our results over a 2- to 3-year period and beyond. But they are investments for the long term.
Allen Klee - Analyst
Okay. Thank you. Also, just a question on the tax rate: Can you talk about the -- it looked like it was low for the quarter, and what was behind that and does that change anything going forward?
John Kritzmacher - CFO & EVP of Technology and Operations
Sure, Allen. So we had about $0.12 in non-recurring tax benefits in the quarter. Those relate to foreign tax credits, and they are tied to some actions that we took to lower our external debt by taking advantage of cash balances. So that had the effect of lowering our tax rate year to date to about 19%. And we're expecting for the year we'll end up somewhere right around 20%, give or take.
Allen Klee - Analyst
Okay, thank you very much.
John Kritzmacher - CFO & EVP of Technology and Operations
Thanks, Allen.
Operator
(Operator Instructions)
Dan Moore, CJS Securities.
Dan Moore - Analyst
Good morning. Thank you. I apologize if you have covered these previously, but just looking at the corporate learning and online test prep, both had nice upticks, just talk about what you're seeing there -- what areas of the market or disciplines you're seeing growth in your outlook for the remainder of this year but the rest of calendar 2017.
Mark Allin - President & CEO
So the corporate learning business, which is built primarily around the CrossKnowledge acquisition that we made a couple of years ago, so our focus continues to be on securing three-year subscription deals with large enterprise customers to provide customized and focused learning for their workforces globally. And the demand for that continues to grow.
We have a small but growing footprint in the US, and we continue to consolidate our position in Europe. It's a market that is -- the corporate learning market -- the digital corporate learning market continues to grow globally. It's somewhat fragmented, but we now have a pretty significant market position and continue to see a good pipeline of potential clients going forward and to be confident in the ongoing growth of that business.
And in the test preparation business, the focus there is really on growing students for the existing programs that we have, particularly the core CPA and accounting and finance programs. And we're seeing those students come from all over the world. But we're also adding programs. We talked about the ACT program on this course, and we continue to add new courses at a clip through the next 12 months. So feel good about the growth story there as well.
Dan Moore - Analyst
Got it. And then just maybe just a housekeeping in terms of the shift to time-based journals, $0.33 this quarter. How much of the $0.38 EPS benefit for the full year is left or remains to be achieved in fiscal Q4?
John Kritzmacher - CFO & EVP of Technology and Operations
So, Dan, we're done. There was $0.05 in the first quarter, $0.33 in the third quarter, and that's it now. There's no (multiple speakers).
Dan Moore - Analyst
Got it. And no remaining impact as we think about FY18, correct?
John Kritzmacher - CFO & EVP of Technology and Operations
Correct.
Dan Moore - Analyst
Perfect, thank you.
John Kritzmacher - CFO & EVP of Technology and Operations
We can stop talking about this. After almost two years, we can stop talking about this, starting next fiscal year.
Dan Moore - Analyst
Sounds good. Thank you.
Mark Allin - President & CEO
Thank you.
Operator
And there are no further questions at this time. I'd like to turn it back over to Mark Allin.
Mark Allin - President & CEO
Thank you, everybody, for joining us today, and we look forward to speaking with you again at our year-end call in June.
Operator
And that concludes today's call. Thank you for your participation. You may now disconnect.