The Company had open standby letters of credit of $5.4 and $4.0 issued under certain credit lines as of May 31, 2026 and May 31, 2025, respectively, in support of its insurance programs. 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 their expiration.

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 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.

The Company is a potential claimant in a class action settlement related to alleged copyright infringement. The proposed settlement, which is subject to final court approval and completion of the claims administration process, provides for the distribution of a settlement fund to eligible copyright holders. As of May 31, 2026, the Company has not recorded any receivable related to this matter, as realization of any proceeds is not yet considered both probable and reasonably estimable. The amount and timing of any potential recovery are subject to significant uncertainty, including the outcome of final court approval, the number of valid claims submitted by other claimants, and the final allocation of settlement proceeds. The Company will recognize any proceeds upon receipt.

The Company also expects to receive additional recoveries from its insurance programs related to an intellectual property legal settlement accrued during fiscal 2021, however, it is premature to determine with any level of probability or accuracy the amount of those recoveries at this time.

As a result of a Supreme Court ruling issued in February 2026, the Company may be entitled to a refund of tariffs previously paid on imported products under the International Emergency Economic Powers Act (IEEPA). The Company estimates that approximately $9.0 of its tariff payments are subject to this ruling. As of May 31, 2026, the Company has received $2.8 of refunds related to IEEPA tariffs which were recognized accordingly. The Company has not recognized an asset related to the remaining potential refund. The Company will continue to evaluate new information and will recognize the refund when the right to receive the amount becomes realized or realizable in accordance with ASC 450, Contingencies.

On May 25, 2026, a fire occurred at a book fairs warehouse facility, primarily resulting in damage to inventory. The Company has insurance coverage for property damage and business interruption losses and has filed claims with its insurers. During the year ended May 31, 2026, the Company recognized total losses of $0.6, consisting of inventory write-offs. These losses are included in Asset impairments and write downs in the Consolidated Statements of Operations. As of May 31, 2026, the Company recorded insurance receivables of $0.6 for insurance recoveries deemed probable, not to exceed the related impairment loss recognized. The insurance recoveries are included in Selling, general and administrative expenses in the Consolidated Statements of Operations. The ultimate amount and timing of insurance recoveries, including amounts related to business interruption coverage, remain subject to ongoing negotiations with the Company’s insurers. Any additional recoveries will be recognized upon determination that receipt is probable and reasonably estimable.