COMMITMENTS AND CONTINGENCIES

Lease obligations

The Company leases warehouse space, office space and equipment under various capital and operating leases over periods ranging from one to forty years. Certain of these leases provide for scheduled rent increases based on price-level factors. The Company generally does not enter into leases that call for contingent rent. In most cases, the Company expects that, in the normal course of business, leases will be renewed or replaced. Net rent expense relating to the Company’s non-cancelable operating leases for the three fiscal years ended May 31, 2014, 2013 and 2012 was $27.6, $32.9 and $38.9, respectively.

Amortization of assets under capital leases covering land, buildings and equipment was $0.8, $1.1 and $1.1 for the fiscal years ended May 31, 2014, 2013 and 2012, respectively, and is included in Depreciation and amortization expense.

The following table sets forth the composition of capital leases reflected as Property, plant and equipment in the Consolidated Balance Sheets at May 31:



	2014		2013
Land	$	—	$	—
Buildings	—		39.0
Equipment	0.0		1.0
	0.0		40.0
Accumulated amortization	0.0		(13.4		)
Total	$	0.0	$	26.6

The following table sets forth the aggregate minimum future annual rental commitments at May 31, 2014 under all non-cancelable leases for the fiscal years ending May 31:



	Operating Leases		Capital Leases
2015	$	32.1	$	0.0
2016	25.7		—
2017	19.2		—
2018	14.5		—
2019	8.1		—
Thereafter	14.1		—
Total minimum lease payments	$	113.7	$	0.0
Less minimum sublease income to be received	$	69.9	$	—
Minimum lease payments, net of sublease income	$	43.8	$	0.0
Less amount representing interest			0.0
Present value of net minimum capital lease payments			0.0
Less current maturities of capital lease obligations			—
Long-term capital lease obligations			$	0.0

Other Commitments

The following table sets forth the aggregate minimum future contractual commitments at May 31, 2014 relating to royalty advances and minimum print quantities for the fiscal years ending May 31:



	Royalty Advances		Minimum Print Quantities
2015	$	10.4	$	47.6
2016	2.7		48.3
2017	0.9		44.8
2018	0.8		45.5
2019	0.0		46.3
Thereafter	—		143.4
Total commitments	$	14.8	$	375.9

The Company had open standby letters of credit of $5.3 and $6.6 issued under certain credit lines as of May 31, 2014 and 2013, respectively. These letters of credit are scheduled to expire within one year; however, the Company expects that substantially all of these letters of credit will be renewed, at similar terms, prior to expiration.

Contingencies

Various claims and lawsuits arising in the normal course of business are pending against the Company. The Company accrues a liability for such matters when it is probable that a liability has occurred and the amount of such liability can be reasonably estimated. When only a range can be estimated, the most probable amount in the range is accrued unless no amount within the range is a better estimate than any other amount, in which case the minimum amount in the range is accrued. Legal costs associated with litigation loss contingencies are expensed in the period in which they are incurred. The Company does not expect, in the case of those various claims and lawsuits arising in the normal course of business where a loss is considered probable or reasonably possible, that the reasonably possible losses from such claims and lawsuits (either individually or in the aggregate) would have a material adverse effect on the Company’s consolidated financial position or results of operations.

Grolier Limited is an indirect subsidiary of Scholastic Corporation, located in the United Kingdom, which ceased operations in fiscal 2008 and the operations of which are included in discontinued operations. The Company is currently in the process of settling a Grolier Limited pension plan in effect at the time it ceased operations and is evaluating the potential pension liabilities under the plan relating to the status of the plan as a defined contribution or a defined benefit plan in the context of the conversion of the plan from a defined benefit to a defined contribution plan in 1986. Based on the information currently available to it, the Company does not expect to incur any additional material liability in resolving this issue and settling the plan.