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): April 17, 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:

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

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

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

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

Item 2.02 Results of Operations and Financial Condition.

Item 7.01 Regulation FD Disclosure.

The following information is furnished pursuant to Item 2.02 "Results of Operations and Financial Condition" and Item 7.01 "Regulation FD Disclosure."

On April 17, 2007, American Greetings issued a press release reporting its results for the quarter and year ended February 28, 2007. A copy of this press release is attached hereto as Exhibit 99.1.

During the fourth quarter of fiscal 2007, American Greetings began reporting two business units, its educational products business and its outside investment in an entertainment development and production business, as discontinued operations as decisions were made during the quarter to exit these two businesses. For comparison purposes, prior period reporting has been reclassified to conform to the changes in the presentation of these business units as discontinued operations. Schedules reflecting these reclassifications for each quarter in fiscal 2007 and 2006 are being furnished with this Current Report on Form 8-K as Exhibit 99.2.

Our segment results are internally reported and evaluated at consistent exchange rates between years to eliminate the impact of foreign currency fluctuations. An exchange rate adjustment is included in the reconciliation of the segment results to the consolidated results; this adjustment represents the impact on the segment results of the difference between the exchange rates used for segment reporting and evaluation and the actual exchange rates for the periods presented. The fiscal 2007 and 2006 segment results presented in Exhibit 99.2 are presented at consistent exchange rates used for fiscal 2007.

The information in Items 2.02 and 7.01 of this Current Report on Form 8-K (including the exhibits attached hereto) is being furnished 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 and year ended February 28, 2007.
Exhibit 99.2	Income statement and operating segment information for each quarter of fiscal 2007 and 2006.

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 hereto duly authorized.

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

Date: April 17, 2007

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EX-99.1

Exhibit 99.1

AMERICAN GREETINGS ANNOUNCES FOURTH QUARTER RESULTS

• Earnings results include charges for actions designed to improve return on capital

• Company announces $100 million share repurchase program

• Company announces 25% increase in dividend

CLEVELAND (April 17, 2007) – American Greetings Corporation (NYSE: AM) today announced its results for the fourth quarter and fiscal year ended February 28, 2007, a $100 million share repurchase program, and a 25% increase to its quarterly cash dividend.

Fourth Quarter Results

For the fourth quarter of fiscal 2007, the Company reported net sales of $472.8 million, pre-tax loss from continuing operations of $4.2 million, and a loss from continuing operations of $7.7 million or 14 cents per share (all per-share amounts assume dilution).

During the quarter, the Company took a series of actions to improve its long-term return on capital and to do so, incurred charges in both its continuing as well as its discontinued operations. Within the continuing operations, the Company sold its candle product lines, and as a result, recorded a pre-tax loss of $16 million or approximately 18 cents per share. In addition, during the quarter, the Company also incurred exit costs in connection with the closure of 60 of its retail stores resulting in a pre-tax loss of $6.5 million or approximately 7 cents per share.

In the prior year’s fourth fiscal quarter, the Company reported net sales of $507.4 million, pre-tax income from continuing operations of $63.6 million, and income from continuing operations of $51.1 million or 70 cents per share.

Full Year Results

For the fiscal year ended February 28, 2007, the Company reported net sales of $1,744.6 million, pre-tax income from continuing operations of $69.4 million, and income from continuing operations of $43.3 million or 72 cents per share. Included in these results are a pre-tax loss on the sale of the Company’s candle product lines of $16 million or approximately 16 cents per share, a pre-tax loss associated with the closure of 60 stores within the retail operations segment of $6.5 million or approximately 7 cents per share, and a pre-tax gain of $20 million or approximately 20 cents per share 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.

Management Comments and Outlook

Chief Executive Officer Zev Weiss said, “I am pleased that we continued to execute against our goal of improving the return on capital employed and generating strong cash flow. We generated cash flow from operating activities less capital expenditures of $225 million, well above our initial estimates and even beyond our December guidance. For fiscal year 2008, we are projecting earnings per share between $1.35 and $1.55. I am looking forward to improved earnings as a large portion of the investments in our strategic card initiative is now behind us. In addition, we are able to continue returning capital to our shareholders by repurchasing shares and increasing the dividend.”

Financing Activities

The Company purchased 3.0 million shares of its common stock for $71.3 million during the fourth quarter of fiscal 2007. During the fiscal year, the Company repurchased 11.1 million of its shares for $257.2 million and was not required to issue approximately 7.1 million shares as a result of the convertible notes exchange offer completed in the second quarter.

The Company’s Board of Directors authorized a new $100 million share repurchase program as well as a 25% increase in its quarterly cash dividend from 8 cents per share to 10 cents per share. The share repurchases will be made through a 10b5-1 program in open market or privately negotiated transactions in compliance with the SEC’s Rule 10b-18, subject to market conditions, applicable legal requirements and other factors. The increased dividend will be paid on May 14, 2007 to shareholders of record at the close of business on May 2, 2007.

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 net sales 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;

2

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

• 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;

• successful integration of acquisitions; 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, 2006.

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AMERICAN GREETINGS CORPORATION

FOURTH QUARTER CONSOLIDATED STATEMENT OF OPERATIONS

FISCAL YEAR ENDED FEBRUARY 28, 2007

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

	(Unaudited)
	Quarter Ended February 28,						Year Ended February 28,
	2007			2006			2007			2006
Net sales	$	472,848		$	507,413		$	1,744,603		$	1,875,104
Costs and expenses:
Material, labor and other production costs		233,559			222,549			826,791			846,958
Selling, distribution and marketing		176,487			171,296			627,906			631,943
Administrative and general		67,573			66,440			251,089			242,727
Goodwill impairment		—			—			—			43,153
Interest expense		7,962			8,460			34,986			35,124
Other income - net		(8,503	)		(24,896	)		(65,530	)		(64,676	)
		477,078			443,849			1,675,242			1,735,229
(Loss) income from continuing operations before income tax expense		(4,230	)		63,564			69,361			139,875
Income tax expense		3,513			12,498			26,096			48,879
(Loss) income from continuing operations		(7,743	)		51,066			43,265			90,996
Loss from discontinued operations, net of tax		(4,480	)		(9,272	)		(887	)		(6,620	)
Net (loss) income	$	(12,223	)	$	41,794		$	42,378		$	84,376
Earnings (loss) per share - basic:
(Loss) income from continuing operations	$	(0.14	)	$	0.82		$	0.75		$	1.38
Loss from discontinued operations		(0.08	)		(0.15	)		(0.02	)		(0.10	)
Net (loss) income	$	(0.22	)	$	0.67		$	0.73		$	1.28
Earnings (loss) per share - assuming dilution:
(Loss) income from continuing operations	$	(0.14	)	$	0.70		$	0.72		$	1.24
Loss from discontinued operations		(0.08	)		(0.12	)		(0.01	)		(0.08	)
Net (loss) income	$	(0.22	)	$	0.58		$	0.71		$	1.16
Average number of common shares outstanding		56,035,238			62,736,831			57,951,952			65,965,024
Average number of common shares outstanding - assuming dilution		56,035,238			75,681,656			62,362,794			79,226,384
Dividends declared per share	$	0.08		$	0.08		$	0.32		$	0.32

AMERICAN GREETINGS CORPORATION

FOURTH QUARTER CONSOLIDATED STATEMENT OF FINANCIAL POSITION

FISCAL YEAR ENDED FEBRUARY 28, 2007

(In thousands of dollars)

	(Unaudited) February 28,
	2007			2006
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	144,713		$	213,613
Short-term investments		—			208,740
Trade accounts receivable, net		98,837			139,384
Inventories		182,618			213,109
Deferred and refundable income taxes		135,379			153,282
Assets of businesses held for sale		5,199			24,903
Prepaid expenses and other		227,380			212,814
Total current assets		794,126			1,165,845
GOODWILL		224,105			200,763
OTHER ASSETS		416,887			548,514
DEFERRED INCOME TAXES		52,869			—
Property, plant and equipment - at cost		944,534			953,634
Less accumulated depreciation		659,462			649,794
PROPERTY, PLANT AND EQUIPMENT - NET		285,072			303,840
	$	1,773,059		$	2,218,962
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Debt due within one year	$	—		$	174,792
Accounts payable		118,204			123,757
Accrued liabilities		80,389			73,532
Accrued compensation and benefits		61,192			68,864
Income taxes		24,578			17,240
Liabilities of businesses held for sale		1,932			3,627
Other current liabilities		84,898			97,270
Total current liabilities		371,193			559,082
LONG-TERM DEBT		223,915			300,516
OTHER LIABILITIES		162,410			116,554
DEFERRED INCOME TAXES		6,315			22,785
SHAREHOLDERS’ EQUITY
Common shares - Class A		50,839			56,130
Common shares - Class B		4,283			4,218
Capital in excess of par value		414,859			398,505
Treasury stock		(710,414	)		(676,436	)
Accumulated other comprehensive (loss) income		(1,013	)		9,823
Retained earnings		1,250,672			1,427,785
Total shareholders’ equity		1,009,226			1,220,025
	$	1,773,059		$	2,218,962

AMERICAN GREETINGS CORPORATION

FOURTH QUARTER CONSOLIDATED STATEMENT OF CASH FLOWS

FISCAL YEAR ENDED FEBRUARY 28, 2007

(In thousands of dollars)

	(Unaudited) Year Ended February 28,
	2007			2006
OPERATING ACTIVITIES:
Net income	$	42,378		$	84,376
Loss from discontinued operations		887			6,620
Income from continuing operations		43,265			90,996
Adjustments to reconcile to net cash provided by operating activities:
Goodwill impairment		—			43,153
Loss on disposal of fixed assets		1,726			4,355
Loss on extinguishment of debt		5,055			863
Loss on disposal of product lines		15,969			—
Depreciation and amortization		49,380			54,202
Deferred income taxes		(16,277	)		23,225
Other non-cash charges		13,891			7,219
Changes in operating assets and liabilities, net of acquisitions and dispositions:
Decrease in trade accounts receivable		47,369			33,850
Decrease in inventories		22,227			1,541
Increase in other current assets		(35,973	)		(13,371	)
Decrease in deferred costs - net		128,752			56,610
Decrease in accounts payable and other liabilities		(1,763	)		(33,374	)
Other - net		(6,646	)		123
Cash Provided by Operating Activities		266,975			269,392
INVESTING ACTIVITIES:
Proceeds from sale of short-term investments		1,026,280			1,733,470
Purchases of short-term investments		(817,540	)		(1,733,470	)
Property, plant and equipment additions		(41,726	)		(46,056	)
Cash payments for business acquisitions, net of cash acquired		(13,122	)		(15,315	)
Cash receipts related to discontinued operations		12,559			—
Proceeds from sale of fixed assets		4,847			11,416
Other - net		6,160			—
Cash Provided (Used) by Investing Activities		177,458			(49,955	)
FINANCING ACTIVITIES:
Increase in long-term debt		200,000			—
Reduction of long-term debt		(440,588	)		(10,782	)
Sale of stock under benefit plans		6,834			27,068
Purchase of treasury shares		(257,817	)		(244,642	)
Dividends to shareholders		(18,418	)		(21,184	)
Debt issuance costs		(8,533	)		—
Cash Used by Financing Activities		(518,522	)		(249,540	)
DISCONTINUED OPERATIONS:
Cash used by operating activities from discontinued operations		(961	)		(2,725	)
Cash provided by investing activities from discontinued operations		1,643			566
Cash Provided (Used) by Discontinued Operations		682			(2,159	)
EFFECT OF EXCHANGE RATE CHANGES ON CASH		4,507			(1,924	)
DECREASE IN CASH AND CASH EQUIVALENTS		(68,900	)		(34,186	)
Cash and Cash Equivalents at Beginning of Year		213,613			247,799
Cash and Cash Equivalents at End of Year	$	144,713		$	213,613

EX-99.2

Exhibit 99.2

Income Statement Information

(Unaudited)

The following table reflects the reclassification of fiscal 2007 quarterly amounts for the discontinued operations presentation of our educational products and entertainment development and production business units.

	Fiscal 2007
(In thousands of dollars)	First Quarter			Second Quarter			Third Quarter			Fourth Quarter			Year Ended February 28, 2007
Net sales	$	404,170		$	357,483		$	510,102		$	472,848		$	1,744,603
Material, labor and other production costs		175,237			172,808			245,187			233,559			826,791
Selling, distribution and marketing		142,580			151,475			157,364			176,487			627,906
Administrative and general		61,348			56,881			65,287			67,573			251,089
Goodwill impairment		—			—			—			—			—
Interest expense		12,464			7,609			6,951			7,962			34,986
Other income—net		(6,860	)		(17,407	)		(32,760	)		(8,503	)		(65,530	)
		384,769			371,366			442,029			477,078			1,675,242
Income (loss) from continuing operations before income tax expense (benefit)		19,401			(13,883	)		68,073			(4,230	)		69,361
Income tax expense (benefit)		2,851			(1,326	)		21,058			3,513			26,096
Income (loss) from continuing operations		16,550			(12,557	)		47,015			(7,743	)		43,265
(Loss) income from discontinued operations, net of tax		(1,158	)		2,059			2,692			(4,480	)		(887	)
Net income (loss)	$	15,392		$	(10,498	)	$	49,707		$	(12,223	)	$	42,378
Earnings per share—basic:
Income (loss) from continuing operations	$	0.28		$	(0.22	)	$	0.79		$	(0.14	)	$	0.75
(Loss) income from discontinued operations		(0.02	)		0.04			0.05			(0.08	)		(0.02	)
Net income (loss)	$	0.26		$	(0.18	)	$	0.84		$	(0.22	)	$	0.73
Earnings per share—assuming dilution:
Income (loss) from continuing operations	$	0.26		$	(0.22	)	$	0.79		$	(0.14	)	$	0.72
(Loss) income from discontinued operations		(0.02	)		0.04			0.04			(0.08	)		(0.01	)
Net income (loss)	$	0.24		$	(0.18	)	$	0.83		$	(0.22	)	$	0.71
Average number of common shares outstanding		58,137,230			58,133,066			59,502,276			56,035,238			57,951,952
Average number of common shares outstanding - assuming dilution		71,077,312			58,133,066			59,902,127			56,035,238			62,362,794
Dividends declared per share	$	0.08		$	0.08		$	0.08		$	0.08		$	0.32

Quarterly earnings per share amounts do not add to the full year primarily due to share repurchases during the periods, the conversion of certain debt securities during the period, as well as the anti-dilutive impact of potentially dilutive secutities in periods in which we recorded a net loss.

Income Statement Information

(Unaudited)

The following table reflects the reclassification of fiscal 2006 quarterly amounts for the discontinued operations presentation of our educational products and entertainment development and production business units.

	Fiscal 2006
(In thousands of dollars)	First Quarter			Second Quarter			Third Quarter			Fourth Quarter			Year Ended February 28, 2006
Net sales	$	436,034		$	381,183		$	550,474		$	507,413		$	1,875,104
Material, labor and other production costs		177,256			173,366			273,787			222,549			846,958
Selling, distribution and marketing		152,785			144,414			163,448			171,296			631,943
Administrative and general		61,814			57,677			56,796			66,440			242,727
Goodwill impairment		—			—			43,153			—			43,153
Interest expense		9,677			8,586			8,401			8,460			35,124
Other income - net		(8,457	)		(11,549	)		(19,774	)		(24,896	)		(64,676	)
		393,075			372,494			525,811			443,849			1,735,229
Income from continuing operations before income tax expense		42,959			8,689			24,663			63,564			139,875
Income tax expense		16,675			5,054			14,652			12,498			48,879
Income from continuing operations		26,284			3,635			10,011			51,066			90,996
Income (loss) from discontinued operations, net of tax		130			(394	)		2,916			(9,272	)		(6,620	)
Net income	$	26,414		$	3,241		$	12,927		$	41,794		$	84,376
Earnings per share - basic:
Income from continuing operations	$	0.39		$	0.06		$	0.16		$	0.82		$	1.38
Income (loss) from discontinued operations		—			(0.01	)		0.04			(0.15	)		(0.10	)
Net income	$	0.39		$	0.05		$	0.20		$	0.67		$	1.28
Earnings per share - assuming dilution:
Income from continuing operations	$	0.35		$	0.06		$	0.15		$	0.70		$	1.24
Income (loss) from discontinued operations		—			(0.01	)		0.04			(0.12	)		(0.08	)
Net income	$	0.35		$	0.05		$	0.19		$	0.58		$	1.16
Average number of common shares outstanding		68,595,786			67,101,944			65,425,537			62,736,831			65,965,024
Average number of common shares outstanding - assuming dilution		81,952,895			67,913,912			78,695,259			75,681,656			79,226,384
Dividends declared per share	$	0.08		$	0.08		$	0.08		$	0.08		$	0.32

Quarterly earnings per share amounts do not add to the full year primarily due to share repurchases during the periods as well as the anti-dilutive impact of potentially dilutive secutities in periods in which we recorded minimal net income.

Operating Segment Information

(Unaudited)

The following table reflects the reclassification of fiscal 2007 quarterly amounts for the discontinued operations presentation of our educational products and entertainment development and production business units.

	Fiscal 2007
(In thousands of dollars)	First Quarter			Second Quarter			Third Quarter			Fourth Quarter			Year Ended February 28, 2007
Net Sales:
North American Social Expression Products	$	288,573		$	240,574		$	366,392		$	292,269		$	1,187,808
Intersegment items		(16,377	)		(14,084	)		(13,836	)		(11,042	)		(55,339	)
Exchange rate adjustment		3,143			2,533			4,379			3,177			13,232
Net		275,339			229,023			356,935			284,404			1,145,701
International Social Expression Products		57,323			55,679			73,763			63,035			249,800
Exchange rate adjustment		4,291			6,250			9,173			10,554			30,268
Net		61,614			61,929			82,936			73,589			280,068
Retail Operations		40,678			36,547			39,205			76,960			193,390
Exchange rate adjustment		2,761			3,089			3,225			4,720			13,795
Net		43,439			39,636			42,430			81,680			207,185
AG Interactive		19,960			20,446			21,663			23,196			85,265
Exchange rate adjustment		5			40			31			26			102
Net		19,965			20,486			21,694			23,222			85,367
Non-reportable segments		3,813			6,407			6,108			9,953			26,281
Unallocated		—			2			(1	)		—			1
Exchange rate adjustment		—			—			—			—			—
Net		—			2			(1	)		—			1
	$	404,170		$	357,483		$	510,102		$	472,848		$	1,744,603
Segment Earnings (Loss):
North American Social Expression Products	$	65,828		$	13,820		$	96,180		$	20,098		$	195,926
Intersegment items		(12,028	)		(10,040	)		(9,527	)		(7,910	)		(39,505	)
Exchange rate adjustment		1,418			800			1,664			972			4,854
Net		55,218			4,580			88,317			13,160			161,275
International Social Expression Products		481			535			5,394			2,034			8,444
Exchange rate adjustment		62			42			668			477			1,249
Net		543			577			6,062			2,511			9,693
Retail Operations		(7,178	)		(9,021	)		(5,265	)		3,833			(17,631	)
Exchange rate adjustment		(121	)		(55	)		213			1,157			1,194
Net		(7,299	)		(9,076	)		(5,052	)		4,990			(16,437	)
AG Interactive		2,041			1,208			2,249			315			5,813
Exchange rate adjustment		(1	)		2			(18	)		(22	)		(39	)
Net		2,040			1,210			2,231			293			5,774
Non-reportable segments		(2,095	)		6,735			3,668			7,369			15,677
Unallocated		(29,058	)		(17,957	)		(27,306	)		(32,017	)		(106,338	)
Exchange rate adjustment		52			48			153			(536	)		(283	)
Net		(29,006	)		(17,909	)		(27,153	)		(32,553	)		(106,621	)
	$	19,401		$	(13,883	)	$	68,073		$	(4,230	)	$	69,361

Operating Segment Information

(Unaudited)

The following table reflects the reclassification of fiscal 2006 quarterly amounts for the discontinued operations presentation of our educational products and entertainment development and production business units.

	Fiscal 2006
(In thousands of dollars)	First Quarter			Second Quarter			Third Quarter			Fourth Quarter			Year Ended February 28, 2006
Net Sales:
North American Social Expression Products	$	304,976		$	267,703		$	417,786		$	328,754		$	1,319,219
Intersegment items		(11,675	)		(13,879	)		(19,395	)		(11,670	)		(56,619	)
Exchange rate adjustment		1,566			1,407			3,004			3,084			9,061
Net		294,867			255,231			401,395			320,168			1,271,661
International Social Expression Products		55,339			57,136			75,621			66,193			254,289
Exchange rate adjustment		7,506			4,467			5,815			3,755			21,543
Net		62,845			61,603			81,436			69,948			275,832
Retail Operations		42,860			39,085			41,556			83,264			206,765
Exchange rate adjustment		1,382			1,557			2,336			4,276			9,551
Net		44,242			40,642			43,892			87,540			216,316
AG Interactive		28,047			19,583			20,271			21,715			89,616
Exchange rate adjustment		214			(98	)		(79	)		(84	)		(47	)
Net		28,261			19,485			20,192			21,631			89,569
Non-reportable segments		4,770			3,156			2,779			7,575			18,280
Unallocated		1,049			1,066			780			551			3,446
Exchange rate adjustment		—			—			—			—			—
Net		1,049			1,066			780			551			3,446
	$	436,034		$	381,183		$	550,474		$	507,413		$	1,875,104
Segment Earnings (Loss):
North American Social Expression Products	$	79,475		$	44,648		$	96,718		$	73,579		$	294,420
Intersegment items		(8,535	)		(10,162	)		(13,617	)		(8,415	)		(40,729	)
Exchange rate adjustment		682			581			1,261			1,156			3,680
Net		71,622			35,067			84,362			66,320			257,371
International Social Expression Products		2,070			2,514			(16,859	)		(428	)		(12,703	)
Exchange rate adjustment		292			319			(1,995	)		648			(736	)
Net		2,362			2,833			(18,854	)		220			(13,439	)
Retail Operations		(6,238	)		(11,049	)		(25,068	)		9,135			(33,220	)
Exchange rate adjustment		(42	)		(133	)		95			778			698
Net		(6,280	)		(11,182	)		(24,973	)		9,913			(32,522	)
AG Interactive		330			485			1,456			1,966			4,237
Exchange rate adjustment		(95	)		41			33			48			27
Net		235			526			1,489			2,014			4,264
Non-reportable segments		3,544			3,676			5,288			12,664			25,172
Unallocated		(28,590	)		(22,440	)		(22,733	)		(26,874	)		(100,637	)
Exchange rate adjustment		66			209			84			(693	)		(334	)
Net		(28,524	)		(22,231	)		(22,649	)		(27,567	)		(100,971	)
	$	42,959		$	8,689		$	24,663		$	63,564		$	139,875