COMMITMENTS AND CONTINGENCIES

12 Months Ended

May 31, 2011

Commitments and Contingencies Disclosure [Text Block]

6. 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, 2011, 2010 and 2009 was $47.3, $44.8 and $45.3, respectively.

The Company was obligated under capital leases covering land, buildings and equipment in the amount of $55.5 and $55.9 at May 31, 2011 and 2010, respectively. Amortization of assets under capital leases was $1.2, $3.5 and $4.0 for the fiscal years ended May 31, 2011, 2010 and 2009, respectively and is included in Depreciation and amortization expense. The most significant of the Company’s capital leases is the lease related to the New York office where the Company’s headquarters are located. This capital lease has an imputed interest rate of 7.9% and the term ends July 2039.

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

	2011			2010
Land	$	3.5		$	3.5
Buildings		39.0			39.0
Equipment		3.0			8.0
		45.5			50.5
Accumulated amortization		(14.1	)		(17.6	)
Total	$	31.4		$	32.9

The following table sets forth the aggregate minimum future annual rental commitments at May 31, 2011 under all non-cancelable leases for fiscal years ending May 31:

	Operating Leases		Capital Leases
2012	$	34.5	$	5.0
2013		31.0		5.6
2014		23.9		5.1
2015		19.2		5.1
2016		15.4		5.1
Thereafter		43.2		191.1
Total minimum lease payments	$	167.2	$	217.0
Less amount representing interest				161.5
Present value of net minimum capital lease payments				55.5
Less current maturities of capital lease obligations				0.5
Long-term capital lease obligations			$	55.0

Other Commitments

The Company had contractual commitments relating to royalty advances at May 31, 2011 totaling $8.6. The aggregate annual commitments for royalty advances are as follows: fiscal 2012 – $5.8; fiscal 2013 – $2.0; fiscal 2014 - $0.6; fiscal 2015 - $0.1; fiscal 2016 - $0.1.

The Company had contractual commitments relating to minimum print quantities at May 31, 2011 totaling $504.9. The annual commitments relating to minimum print quantities are as follows: fiscal 2012 – $55.7; fiscal 2013 – $56.7; fiscal 2014 – $57.8; fiscal 2015 - $58.8; fiscal 2016 - $59.8; thereafter – $216.1.

As of May 31, 2011, the Company had open standby letters of credit of $6.6 issued under certain credit lines, compared to $7.2 as of May 31, 2010. 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

As previously reported, the Company is party to certain actions filed by each of Alaska Laborers Employee Retirement Fund and Paul Baicu, which were consolidated on November 8, 2007. On September 26, 2008, the plaintiff sought leave of the Court to file a second amended class action complaint, in order to add allegations relating to the Company’s restatement announced in the Company’s Annual Report on Form 10-K filed on July 30, 2008. The Court thereafter dismissed the Company’s pending motion to dismiss as moot. On October 20, 2008, the plaintiff filed the second amended complaint, and on October 31, 2008, the Company filed a motion to dismiss the second amended complaint. On September 30, 2010, the Court granted the Company’s motion to dismiss the second amended complaint for failure to state a cause of action, while also granting leave to the plaintiff to move to file a new proposed amended complaint. On December 1, 2010, the plaintiff filed a motion for leave to file a proposed third amended class action complaint, as well as a motion to replace Alaska Laborer Employers Retirement Fund with City of Sterling Heights Police and Fire Retirement System as lead plaintiff, and, on January 14, 2011, the Company filed an opposition to plaintiff’s motions for leave to file a third amended class action complaint and to substitute lead plaintiff, which was argued on March 3, 2011 and is awaiting decision by the court. The proposed third amended class action complaint shortens the original class action period to end on December 16, 2005 rather than on March 23, 2006, but otherwise continues to allege securities fraud relating to statements made by the Company concerning its operations and financial results, now for the period between March 18, 2005 and December 16, 2005, and seeks unspecified compensatory damages. The Company continues to believe that the allegations in such complaint are without merit and is vigorously defending the lawsuit.

In addition to the above suit, various claims and lawsuits arising in the normal course of business are pending against the Company. The results of these proceedings are not expected to have a material adverse effect on the Company’s consolidated financial position or results of operations.