8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (date of earliest event reported): December 20, 2007

American Greetings Corporation

(Exact Name of Registrant as Specified in its Charter)

Ohio	1-13859	34-0065325
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

One American Road
Cleveland, Ohio	44144
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (216) 252-7300

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

EX-99.1

Item 2.02 Results of Operations and Financial Condition.

On December 20, 2007, American Greetings Corporation issued a press release reporting its results for the quarter ended November 23, 2007. A copy of this press release is attached hereto as Exhibit 99.1.

The information in this Item 2.02 of this Current Report on Form 8-K (including the exhibit attached hereto) is being furnished under Item 2.02 and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of such section, or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

c) Exhibits.

Exhibit	Description
Exhibit 99.1	Press Release — reporting results for the quarter ended November 23, 2007.

2

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

American Greetings Corporation (Registrant)
By:	/s/ Joseph B. Cipollone
	Joseph B. Cipollone, Vice President,
	Corporate Controller and       Chief Accounting Officer

Date: December 20, 2007

3

EX-99.1

Exhibit 99.1

AMERICAN GREETINGS ANNOUNCES THIRD QUARTER RESULTS

CLEVELAND (December 20, 2007) — American Greetings Corporation (NYSE: AM) today announced its third quarter results for the fiscal quarter ended November 23, 2007 and announced a 10 cent per share cash dividend.

Third Quarter Results
For the third quarter of fiscal 2008, the Company reported total revenue of $485.7 million, pre-tax income from continuing operations of $44.5 million, and income from continuing operations of $29.5 million or 53 cents per share (all per-share amounts assume dilution).

In the prior year’s third fiscal quarter, the Company reported total revenue of $521.2 million, pre-tax income from continuing operations of $68.1 million, and income from continuing operations of $47.0 million or 79 cents per share. Included in the prior year’s results is a $20 million pre-tax gain the Company recognized as a result of retailer consolidations and the effect the consolidations had on several long-term supply agreements between the Company and the affected retailers. The prior year’s third quarter also included approximately $14 million of revenue associated with product lines that have since been divested.

Management Comments and Outlook
Chief Executive Officer Zev Weiss said, “During the third quarter, we continued to see improved performance at retail as a result of our strategic card initiative. We continue to receive positive feedback from our retail partners regarding the improvements in cards and are pleased with the card initiative.”

During the third quarter, the Company also announced that it acquired Webshots and that it entered into an agreement to acquire PhotoWorks, two Internet based digital photo sharing businesses. Weiss said, “The acquisition of Webshots gives us the opportunity to expand our current product offerings of online social expressions into the adjacent area of online photo sharing, while PhotoWorks is expected to bring together both the digital and physical products that we believe consumers desire. These transactions provide the opportunity to establish a leadership position in this growing channel of the social expression industry.”

Weiss affirmed the Company’s previously announced estimate of earnings per share from continuing operations for fiscal 2008 to be between $1.35 to $1.55 per share. “While we believe that the earnings guidance provided in April of this year is still appropriate, considering the balance of risks and opportunities it is possible that we will perform around the higher end of the range,” added Weiss.

Investing and Financing Activities
The Company used $45.2 million of cash during the quarter to acquire Webshots.

Under the Company’s $100 million share repurchase program, during the third quarter, the Company purchased approximately 1.7 million shares of its Class A common stock for about

$41 million. The Company has reduced its diluted share count by about 35% over the past 30 months.

The Company’s Board of Directors authorized a cash dividend of 10 cents per share to be paid on January 14, 2008 to shareholders of record at the close of business on January 4, 2008.

Conference Call on the Web
American Greetings will broadcast its conference call live on the Internet at 9:00 a.m. Eastern time today. The conference call will be accessible through the Investor Relations section of the American Greetings Web site at http://investors.americangreetings.com. A replay of the call will be available on the site.

About American Greetings Corporation
American Greetings Corporation (NYSE: AM) is one of the world’s largest manufacturers of social expression products. Along with greeting cards, its product lines include gift wrap, party goods, stationery, calendars, ornaments and electronic greetings. Located in Cleveland, Ohio, American Greetings generates annual revenue of approximately $1.7 billion. For more information on the Company, visit http://corporate.americangreetings.com.

###

CONTACT:
Gregory M. Steinberg
Treasurer and Director of Investor Relations
American Greetings Corporation
216-252-4864
investor.relations@amgreetings.com

Certain statements in this release, including those under “Management Comments and Outlook” may constitute forward-looking statements within the meaning of the Federal securities laws. These statements can be identified by the fact that they do not relate strictly to historic or current facts. They use such words as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” and other words and terms of similar meaning in connection with any discussion of future operating or financial performance. These forward-looking statements are based on currently available information, but are subject to a variety of uncertainties, unknown risks and other factors concerning the Company’s operations and business environment, which are difficult to predict and may be beyond the control of the Company. Important factors that could cause actual results to differ materially from those suggested by these forward-looking statements, and that could adversely affect the Company’s future financial performance, include, but are not limited to, the following:

• retail consolidations, acquisitions and bankruptcies, including the possibility of resulting adverse changes to retail contract terms;

• the Company’s ability to successfully implement its strategy to invest in its core greeting card business;

• the timing and impact of investments in new retail or product strategies as well as new product introductions and achieving the desired benefits from those investments;

• the timing and impact of converting customers to a scan-based trading model;

• the ability to execute share repurchase programs or the ability to achieve the desired accretive effect from such repurchases;

• the ability to successfully complete the proposed acquisition of PhotoWorks and the ability to successfully integrate acquisitions;

• the Company’s ability to successfully complete, or achieve the desired benefits associated with, dispositions;

• a weak retail environment;

• consumer acceptance of products as priced and marketed;

• the impact of technology on core product sales;

• competitive terms of sale offered to customers;

• successful implementation of supply chain improvements and achievement of projected cost savings from those improvements;

• increases in the cost of material, energy, freight, and other production costs;

• the Company’s ability to comply with its debt covenants;

• fluctuations in the value of currencies in major areas where the Company operates, including the U.S. Dollar, Euro, U.K. Pound Sterling, and Canadian Dollar;

• escalation in the cost of providing employee health care; and

• the outcome of any legal claims known or unknown.

Risks pertaining specifically to AG Interactive include the viability of online advertising, subscriptions as revenue generators and the public’s acceptance of online greetings and other social expression products.

In addition, this release contains time-sensitive information that reflects management’s best analysis as of the date of this release. American Greetings does not undertake any obligation to publicly update or revise any forward-looking statements to reflect future events, information or circumstances that arise after the date of this release. Further information concerning issues that could materially affect financial performance related to forward-looking statements can be found in the Company’s periodic filings with the Securities and Exchange Commission, including the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the fiscal year ended February 28, 2007.

AMERICAN GREETINGS CORPORATION
THIRD QUARTER CONSOLIDATED STATEMENT OF INCOME
FISCAL YEAR ENDING FEBRUARY 29, 2008

(In thousands of dollars except share and per share amounts)

	(Unaudited)
	Three Months Ended						Nine Months Ended
	November 23,			November 24,			November 23,			November 24,
	2007			2006			2007			2006
Net sales	$	474,995		$	510,102		$	1,258,829		$	1,271,755
Other revenue		10,751			11,052			24,309			26,537
Total revenue		485,746			521,154			1,283,138			1,298,292
Material, labor and other production costs		223,329			245,187			547,509			593,232
Selling, distribution and marketing expenses		159,420			157,364			444,695			451,419
Administrative and general expenses		60,481			65,287			178,291			183,516
Other operating income — net		(127	)		(20,541	)		(807	)		(20,963	)
Operating income		42,643			73,857			113,450			91,088
Interest expense		4,835			6,951			14,431			27,024
Interest income		(2,115	)		(1,258	)		(5,834	)		(6,716	)
Other non-operating (income) expense — net		(4,582	)		91			(7,478	)		(2,811	)
Income from continuing operations before income tax expense		44,505			68,073			112,331			73,591
Income tax expense		15,017			21,058			43,495			22,583
Income from continuing operations		29,488			47,015			68,836			51,008
(Loss) income from discontinued operations, net of tax		(472	)		2,692			(1,395	)		3,593
Net income	$	29,016		$	49,707		$	67,441		$	54,601
Earnings per share — basic:
Income from continuing operations	$	0.54		$	0.79		$	1.25		$	0.87
(Loss) income from discontinued operations		(0.01	)		0.05			(0.03	)		0.06
Net income	$	0.53		$	0.84		$	1.22		$	0.93
Earnings per share — assuming dilution:
Income from continuing operations	$	0.53		$	0.79		$	1.24		$	0.82
(Loss) income from discontinued operations		(0.01	)		0.04			(0.03	)		0.06
Net income	$	0.52		$	0.83		$	1.21		$	0.88
Average number of common shares outstanding		55,022,689			59,502,276			55,350,736			58,590,857
Average number of common shares outstanding - assuming dilution		55,466,351			59,902,127			55,726,990			64,361,644
Dividends declared per share	$	0.10		$	0.08		$	0.30		$	0.24

AMERICAN GREETINGS CORPORATION
THIRD QUARTER CONSOLIDATED STATEMENT OF FINANCIAL POSITION
FISCAL YEAR ENDING FEBRUARY 29, 2008

(In thousands of dollars)

	(Unaudited)
	November 23,			November 24,
	2007			2006
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	71,117		$	86,216
Trade accounts receivable, net		205,702			239,207
Inventories		239,209			244,181
Deferred and refundable income taxes		76,568			160,983
Assets of businesses held for sale		2,216			13,310
Prepaid expenses and other		213,529			295,866
Total current assets		808,341			1,039,763
GOODWILL		267,308			219,093
OTHER ASSETS		389,324			459,269
DEFERRED AND REFUNDABLE INCOME TAXES		111,959			—
Property, plant and equipment — at cost		975,721			968,755
Less accumulated depreciation		684,170			668,524
PROPERTY, PLANT AND EQUIPMENT — NET		291,551			300,231
	$	1,868,483		$	2,018,356
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Debt due within one year	$	46,490		$	142,000
Accounts payable		131,099			126,956
Accrued liabilities		89,751			91,108
Accrued compensation and benefits		58,969			58,720
Income taxes		31,255			17,412
Liabilities of businesses held for sale		1,383			1,629
Other current liabilities		96,896			91,162
Total current liabilities		455,843			528,987
LONG-TERM DEBT		200,975			223,985
OTHER LIABILITIES		149,869			101,003
DEFERRED INCOME TAXES AND NONCURRENT INCOME TAXES PAYABLE		31,877			25,306
SHAREHOLDERS’ EQUITY
Common shares — Class A		49,929			53,775
Common shares — Class B		3,442			4,224
Capital in excess of par value		443,326			417,444
Treasury stock		(780,044	)		(643,540	)
Accumulated other comprehensive income		22,982			36,067
Retained earnings		1,290,284			1,271,105
Total shareholders’ equity		1,029,919			1,139,075
	$	1,868,483		$	2,018,356

AMERICAN GREETINGS CORPORATION
THIRD QUARTER CONSOLIDATED STATEMENT OF CASH FLOWS
FISCAL YEAR ENDING FEBRUARY 29, 2008
(In thousands of dollars)

	(Unaudited)
	Nine Months Ended
	November 23,			November 24,
	2007			2006
OPERATING ACTIVITIES:
Net income	$	67,441		$	54,601
Loss (income) from discontinued operations		1,395			(3,593	)
Income from continuing operations		68,836			51,008
Adjustments to reconcile to net cash provided (used) by operating activities:
Net (gain) loss on disposal of fixed assets		(481	)		754
Loss on extinguishment of debt		—			5,055
Depreciation and amortization		36,002			37,229
Deferred income taxes		(7,994	)		5,827
Other non-cash charges		5,719			9,180
Changes in operating assets and liabilities, net of acquisitions and dispositions:
Increase in trade accounts receivable		(99,268	)		(92,821	)
Increase in inventories		(49,911	)		(27,202	)
Decrease (increase) in other current assets		18,090			(96,250	)
Decrease in deferred costs — net		29,338			110,076
Increase (decrease) in accounts payable and other liabilities		38,295			(5,894	)
Other — net		4,718			(6,265	)
Cash Provided (Used) by Operating Activities		43,344			(9,303	)
INVESTING ACTIVITIES:
Proceeds from sale of short-term investments		692,985			1,026,280
Purchases of short-term investments		(692,985	)		(817,540	)
Property, plant and equipment additions		(37,394	)		(29,600	)
Cash payments for business acquisitions, net of cash acquired		(51,256	)		(11,154	)
Cash receipts related to discontinued operations		4,283			12,559
Proceeds from sale of fixed assets		2,656			695
Cash (Used) Provided by Investing Activities		(81,711	)		181,240
FINANCING ACTIVITIES:
Increase in long-term debt		—			200,000
Reduction of long-term debt		—			(440,588	)
Increase in short-term debt		23,800			142,000
Sale of stock under benefit plans		26,198			5,630
Purchase of treasury shares		(74,572	)		(186,331	)
Dividends to shareholders		(16,657	)		(13,909	)
Debt issuance costs		—			(8,344	)
Cash Used by Financing Activities		(41,231	)		(301,542	)
DISCONTINUED OPERATIONS:
Cash used by operating activities from discontinued operations		(839	)		(2,377	)
Cash provided by investing activities from discontinued operations		—			1,656
Cash Used by Discontinued Operations		(839	)		(721	)
EFFECT OF EXCHANGE RATE CHANGES ON CASH		6,841			2,929
DECREASE IN CASH AND CASH EQUIVALENTS		(73,596	)		(127,397	)
Cash and Cash Equivalents at Beginning of Year		144,713			213,613
Cash and Cash Equivalents at End of Period	$	71,117		$	86,216

AMERICAN GREETINGS CORPORATION
THIRD QUARTER CONSOLIDATED SEGMENT DISCLOSURES
FISCAL YEAR ENDING FEBRUARY 29, 2008
(In thousands of dollars)

				(Unaudited)
	Three Months Ended						Nine Months Ended
	November 23,			November 24,			November 23,			November 24,
	2007			2006			2007			2006
Total Revenue:
North American Social Expression Products	$	339,543		$	371,726		$	892,518		$	908,909
Intersegment items		(19,423	)		(14,953	)		(41,532	)		(47,811	)
Exchange rate adjustment		2,972			218			4,318			325
Net		323,092			356,991			855,304			861,423
International Social Expression Products		80,604			82,526			199,648			209,019
Exchange rate adjustment		8,606			794			17,958			(1,527	)
Net		89,210			83,320			217,606			207,492
Retail Operations		39,550			42,252			115,856			125,206
Exchange rate adjustment		2,467			178			3,540			299
Net		42,017			42,430			119,396			125,505
AG Interactive		18,912			21,663			55,964			62,151
Exchange rate adjustment		(2	)		31			(1	)		76
Net		18,910			21,694			55,963			62,227
Non-reportable segments		12,486			16,679			34,754			41,510
Unallocated		31			40			115			135
	$	485,746		$	521,154		$	1,283,138		$	1,298,292
Segment Earnings (Loss):
North American Social Expression Products	$	64,549		$	98,533		$	192,288		$	182,111
Intersegment items		(14,481	)		(10,296	)		(31,203	)		(34,125	)
Exchange rate adjustment		1,557			80			2,360			129
Net		51,625			88,317			163,445			148,115
International Social Expression Products		10,037			6,092			11,470			7,148
Exchange rate adjustment		1,117			(30	)		1,464			34
Net		11,154			6,062			12,934			7,182
Retail Operations		(5,833	)		(5,056	)		(15,098	)		(21,428	)
Exchange rate adjustment		86			4			83			1
Net		(5,747	)		(5,052	)		(15,015	)		(21,427	)
AG Interactive		2,194			2,249			8,667			5,498
Exchange rate adjustment		15			(18	)		(2	)		(17	)
Net		2,209			2,231			8,665			5,481
Non-reportable segments		636			3,668			3,598			8,308
Unallocated		(15,312	)		(27,157	)		(61,161	)		(73,919	)
Exchange rate adjustment		(60	)		4			(135	)		(149	)
Net		(15,372	)		(27,153	)		(61,296	)		(74,068	)
	$	44,505		$	68,073		$	112,331		$	73,591