10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

            X                 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the quarterly period ended May 31, 2013

OR

                              TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the transition period from		to
	Commission file number	1-13859

AMERICAN GREETINGS CORPORATION

(Exact name of registrant as specified in its charter)

Ohio	34-0065325
(State or other jurisdiction of	(I.R.S. Employer Identification No.)
incorporation or organization)

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

(216) 252-7300

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes         X No        

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes         X No        

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer  x
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes         No             X

As of July 5, 2013, the number of shares outstanding of each of the issuer’s classes of common stock was:

Class A Common             29,294,198

Class B Common               2,912,167

AMERICAN GREETINGS CORPORATION

INDEX

		Page Number
PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements		3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		31
Item 4.	Controls and Procedures		31
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings		32
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		34
Item 6.	Exhibits		35
SIGNATURES			36
EXHIBITS

PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

AMERICAN GREETINGS CORPORATION

CONSOLIDATED STATEMENT OF INCOME

(Thousands of dollars except share and per share amounts)

	(Unaudited) Three Months Ended
	May 31, 2013		May 25, 2012
Net sales		$490,545		$389,253
Other revenue		6,758		3,853
Total revenue		497,303		393,106
Material, labor and other production costs		203,837		163,864
Selling, distribution and marketing expenses		170,339		127,163
Administrative and general expenses		71,080		80,168
Other operating (income) expense – net		(3,318)		9,524
Operating income		55,365		12,387
Interest expense		4,312		4,376
Interest income		(120)		(138)
Other non-operating income – net		(1,373)		(2,271)
Income before income tax expense		52,546		10,420
Income tax expense		19,153		3,170
Net income		$    33,393		$    7,250
Earnings per share – basic		$      1.04		$      0.20
Earnings per share – assuming dilution		$      1.02		$      0.20
Average number of shares outstanding		32,115,319		35,505,749
Average number of shares outstanding – assuming dilution		32,701,678		36,154,078
Dividends declared per share		$      0.15		$      0.15

See notes to consolidated financial statements (unaudited).

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AMERICAN GREETINGS CORPORATION

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS)

(Thousands of dollars)

	(Unaudited) Three  Months Ended
	May 31, 2013		May 25, 2012
Net income		$  33,393		$  7,250
Other comprehensive loss, net of tax:
Foreign currency translation adjustments		(2,155)		(8,400)
Pension and postretirement benefit adjustments		377		475
Unrealized gain on securities		1		-
Other comprehensive loss, net of tax		(1,777)		(7,925)
Comprehensive income (loss)		$    31,616		$    (675)

See notes to consolidated financial statements (unaudited).

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AMERICAN GREETINGS CORPORATION

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

(Thousands of dollars)

	(Unaudited)     May 31, 2013		(Note 1)     February 28, 2013		(Unaudited)     May 25, 2012
ASSETS
Current assets
Cash and cash equivalents		$     63,997		$      86,059		$     60,180
Trade accounts receivable, net		122,303		105,497		97,657
Inventories		237,824		242,447		214,588
Deferred and refundable income taxes		59,181		72,560		63,910
Prepaid expenses and other		150,779		155,343		110,482
Total current assets		634,084		661,906		546,817
Other assets		449,770		456,751		530,452
Deferred and refundable income taxes		88,920		92,354		118,385
Property, plant and equipment – at cost		834,272		821,759		738,081
Less accumulated depreciation		459,192		449,307		445,264
Property, plant and equipment – net		375,080		372,452		292,817
		$1,547,854		$ 1,583,463		$1,488,471
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable		$   111,180		$    119,777		$     99,872
Accrued liabilities		82,171		80,098		62,610
Accrued compensation and benefits		34,942		69,309		40,582
Income taxes payable		4,952		4,968		11,007
Deferred revenue		31,872		31,851		34,351
Other current liabilities		64,585		62,593		48,395
Total current liabilities		329,702		368,596		296,817
Long-term debt		260,281		286,381		225,181
Other liabilities		225,101		225,044		265,294
Deferred income taxes and noncurrent income taxes payable		21,730		21,565		21,745
Shareholders’ equity
Common shares – Class A		29,398		29,088		31,336
Common shares – Class B		2,912		2,883		2,860
Capital in excess of par value		525,234		522,425		513,917
Treasury stock		(1,093,407)		(1,093,782)		(1,060,244)
Accumulated other comprehensive loss		(18,910)		(17,133)		(19,755)
Retained earnings		1,265,813		1,238,396		1,211,320
Total shareholders’ equity		711,040		681,877		679,434
		$1,547,854		$ 1,583,463		$1,488,471

See notes to consolidated financial statements (unaudited).

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AMERICAN GREETINGS CORPORATION

CONSOLIDATED STATEMENT OF CASH FLOWS

(Thousands of dollars)

	(Unaudited)
	Three Months Ended
	May 31, 2013		May 25, 2012
OPERATING ACTIVITIES:
Net income		$    33,393		$     7,250
Adjustments to reconcile net income to cash flows from operating activities:
Stock-based compensation		2,475		1,869
Net (gain) loss on disposal of fixed assets		(235)		156
Depreciation and intangible assets amortization		13,057		11,469
Clinton Cards secured debt (recovery) impairment		(2,000)		7,794
Provision for doubtful accounts		17		17,345
Deferred income taxes		6,002		(3,913)
Other non-cash charges		306		291
Changes in operating assets and liabilities, net of acquisitions:
Trade accounts receivable		(17,162)		(2,635)
Inventories		4,229		(7,161)
Other current assets		1,514		4,093
Income taxes		11,313		3,445
Deferred costs – net		10,217		19,560
Accounts payable and other liabilities		(42,446)		(12,830)
Other – net		3,646		3,165
Total Cash Flows From Operating Activities		24,326		49,898
INVESTING ACTIVITIES:
Property, plant and equipment additions		(15,472)		(16,432)
Proceeds from sale of fixed assets		244		19
Purchase of Clinton Cards debt		-		(56,560)
Total Cash Flows From Investing Activities		(15,228)		(72,973)
FINANCING ACTIVITIES:
Proceeds from revolving line of credit and long-term borrowings		160,800		-
Repayments on revolving line of credit and long-term borrowings		(186,900)		-
Issuance or exercise of share-based payment awards		(390)		(728)
Tax benefit (deficiency) from share-based payment awards		247		(421)
Purchase of treasury shares		-		(40,542)
Dividends to shareholders		(4,784)		(5,369)
Total Cash Flows From Financing Activities		(31,027)		(47,060)
EFFECT OF EXCHANGE RATE CHANGES ON CASH		(133)		(2,123)
DECREASE IN CASH AND CASH EQUIVALENTS		(22,062)		(72,258)
Cash and Cash Equivalents at Beginning of Year		86,059		132,438
Cash and Cash Equivalents at End of Period		$  63,997		$   60,180

See notes to consolidated financial statements (unaudited).

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AMERICAN GREETINGS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Three Months Ended May 31, 2013 and May 25, 2012

Note 1 – Basis of Presentation

The accompanying unaudited consolidated financial statements of American Greetings Corporation and its subsidiaries (the “Corporation”) have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary to fairly present financial position, results of operations and cash flows for the periods have been included.

The Corporation’s fiscal year ends on February 28 or 29. References to a particular year refer to the fiscal year ending in February of that year. For example, 2013 refers to the year ended February 28, 2013. The Corporation’s subsidiary, AG Retail Cards Limited, which operates the recently acquired retail stores in the United Kingdom (also referred to herein as “UK”), is consolidated on a one-month lag corresponding with its fiscal year-end of February 1 for 2014. See Note 4 for further information.

The Corporation’s first fiscal quarter begins each year on March 1. The Corporation’s fiscal quarters generally end on the last Friday of the month in which the fiscal quarter ends. In the current year, the first quarter ended on May 31, 2013 and consisted of 92 days. The prior year first quarter ended on May 25, 2012 and consisted of 86 days. This resulted in six additional selling days in the current year first quarter. This fiscal timing will not impact the full year results as the current year fourth quarter will consist of six less days compared to the prior year fourth quarter.

These interim financial statements should be read in conjunction with the Corporation’s financial statements and notes thereto included in its Annual Report on Form 10-K for the year ended February 28, 2013, from which the Consolidated Statement of Financial Position at February 28, 2013, presented herein, has been derived. Certain amounts in the prior year financial statements have been reclassified to conform to the 2014 presentation. These reclassifications had no material impact on financial position, earnings or cash flows.

The Corporation’s investments in less than majority-owned companies in which it has the ability to exercise significant influence over the operation and financial policies are accounted for using the equity method except when they qualify as variable interest entities (“VIE”) and the Corporation is the primary beneficiary, in which case, the investments are consolidated in accordance with Accounting Standards Codification (“ASC”) Topic 810 (“ASC 810”), “Consolidation.” Investments that do not meet the above criteria are accounted for under the cost method.

The Corporation holds an approximately 15% equity interest in Schurman Fine Papers (“Schurman”), which is a VIE as defined in ASC 810. Schurman owns and operates specialty card and gift retail stores in the United States and Canada. The stores are primarily located in malls and strip shopping centers. During the current period, the Corporation assessed the variable interests in Schurman and determined that a third party holder of variable interests has the controlling financial interest in the VIE and thus, the third party, not the Corporation, is the primary beneficiary. In completing this assessment, the Corporation identified the activities that it considers most significant to the future economic success of the VIE and determined that it does not have the power to direct those activities. As such, Schurman is not consolidated in the Corporation’s results. The Corporation’s maximum exposure to loss as it relates to Schurman as of May 31, 2013 includes:

¡ the investment in the equity of Schurman of $1.9 million;

¡ the limited guaranty (“Liquidity Guaranty”) of Schurman’s indebtedness of $10.0 million;

¡ normal course of business trade and other accounts receivable due from Schurman of $24.6 million, the balance of which fluctuates throughout the year due to the seasonal nature of the business; and

¡ the operating leases currently subleased to Schurman, the aggregate lease payments for the remaining life of which was $10.6 million, $11.8 million and $19.0 million as of May 31, 2013, February 28, 2013 and May 25, 2012, respectively.

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The Corporation provides Schurman limited credit support through the provision of a Liquidity Guaranty in favor of the lenders under Schurman’s senior revolving credit facility (the “Senior Credit Facility”). Pursuant to the terms of the Liquidity Guaranty, the Corporation has guaranteed the repayment of up to $10.0 million of Schurman’s borrowings under the Senior Credit Facility to help ensure that Schurman has sufficient borrowing availability under this facility. The Liquidity Guaranty is required to be backed by a letter of credit for the term of the Liquidity Guaranty, which is currently anticipated to end in July 2016. The Corporation’s obligations under the Liquidity Guaranty generally may not be triggered unless Schurman’s lenders under its Senior Credit Facility have substantially completed the liquidation of the collateral under Schurman’s Senior Credit Facility, or 91 days after the liquidation is started, whichever is earlier, and will be limited to the deficiency, if any, between the amount owed and the amount collected in connection with the liquidation. There was no triggering event or liquidation of collateral as of May 31, 2013 requiring the use of the Liquidity Guaranty.

In addition to the investment in the equity of Schurman, the Corporation holds an investment in the common stock of Party City Holdings, Inc. These two investments, totaling $10.8 million are accounted for under the cost method. The Corporation is not aware of any events or changes in circumstances that had occurred during the first quarter of 2014 that the Corporation believes are reasonably likely to have had a significant adverse effect on the carrying amount of these investments.

Note 2 – Seasonal Nature of Business

A significant portion of the Corporation’s business is seasonal in nature. Therefore, the results of operations for interim periods are not necessarily indicative of the results for the fiscal year taken as a whole.

Note 3 – Recent Accounting Pronouncements

In February 2013, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2013-02 (“ASU 2013-02”), “Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income.” ASU 2013-02 requires entities to disclose additional information about changes in other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income and the income statement line items affected. The provisions of this guidance are effective prospectively for annual and interim periods beginning after December 15, 2012. The Corporation adopted this standard on March 1, 2013. See Note 7 for further information.

In July 2012, the FASB issued ASU No. 2012-02 (“ASU 2012-02”), “Testing Indefinite-Lived Intangible Assets for Impairment.” ASU 2012-02 gives entities an option to first assess qualitative factors to determine whether the existence of events and circumstances indicate that it is more likely than not that an indefinite-lived intangible asset is impaired. If based on its qualitative assessment an entity concludes that it is more likely than not that the fair value of an indefinite-lived intangible asset is less than its carrying amount, quantitative impairment testing is required. However, if an entity concludes otherwise, quantitative impairment testing is not required. ASU 2012-02 is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. The Corporation adopted this standard on March 1, 2013. The adoption of this standard did not have a material effect on the Corporation’s financial statements.

Note 4 – Acquisition

During the first quarter of 2013, the Corporation acquired all of the outstanding senior secured debt of Clinton Cards for $56.6 million (£35 million) through Lakeshore Lending Limited (“Lakeshore”), a wholly-owned subsidiary of the Corporation organized under the laws of the UK. Subsequently, on May 9, 2012, Clinton Cards was placed into administration, a procedure similar to Chapter 11 bankruptcy in the United States. Prior to entering

8

into administration, Clinton Cards had approximately 750 stores and annual revenues of approximately $600 million across its two primary retail brands, Clinton Cards and Birthdays. The legacy Clinton Cards business had been an important customer to the Corporation’s international business for approximately forty years and was one of the Corporation’s largest customers.

As part of the administration process, the administrators (“Administrators”) of Clinton Cards and certain of its subsidiaries (the “Sellers”) conducted an auction of certain assets of the business of the Sellers that they believed constituted a viable ongoing business. Lakeshore bid $37.2 million (£23 million) for certain of these remaining assets. The bid took the form of a “credit bid,” where the Corporation used a portion of the outstanding senior secured debt owed to Lakeshore by Clinton Cards to pay the purchase price for the assets. The bid was accepted by the Administrators and on June 6, 2012 the Corporation entered into an agreement with the Sellers and the Administrators for the purchase of certain assets and the related business of the Sellers.

Under the terms of the agreement, the Corporation originally expected to acquire approximately 400 stores from the Sellers, together with related inventory and overhead, as well as the Clinton Cards and related brands. As of July 2, 2013, the Corporation has completed 393 lease assignments and the final number is expected to be 396. The estimated future minimum rental payments for noncancelable operating leases related to the 396 acquired stores will be approximately $360 million.

The stores and assets not acquired by the Corporation remain part of the administration process. It is anticipated that these remaining assets not purchased by the Corporation will be liquidated and the proceeds will be used to repay the creditors of the Sellers, including the Corporation. The Corporation will seek to recover the remaining senior secured debt claim held by it through the liquidation process. However, based on the estimated recovery information provided by the Administrators, the Corporation recorded an aggregate charge of $8.1 million in 2013 relating to the senior secured debt it acquired in the first quarter of the prior year. In the first quarter of 2014, based on updated estimated recovery information provided by the Administrators, the Corporation recorded an adjustment to the charge resulting in a gain of $2.0 million. The remaining balance of the senior secured debt is $12.5 million (£8.2 million) as of May 31, 2013 and is included in “Prepaid expenses and other” on the Consolidated Statement of Financial Position. The liquidation process was originally expected to take approximately twelve months from the closing of the transaction on June 6, 2012. The process is currently expected to be completed by December 31, 2013.

The prior year first quarter included charges of $31.0 million associated with the aforementioned acquisition and are reflected on the Consolidated Statement of Income as follows:

(In millions)	Contract asset  impairment		Bad debt     expense		Legal and   advisory fees		Impairment of   debt purchased		Total
Net sales		$4.0		$     -		$   -		$   -		$  4.0
Administrative and general expenses		-		17.2		2.0		-		19.2
Other operating (income) expense - net		-		-		-		7.8		7.8
		$4.0		$17.2		$2.0		$7.8		$31.0

These charges are reflected in the Corporation’s reportable segments as follows:

(In millions)	Contract asset  impairment		Bad debt     expense		Legal and   advisory fees		Impairment of   debt purchased		Total
International Social Expression Products		$4.0		$17.2		$    -		$    -		$ 21.2
Unallocated		-		-		2.0		7.8		9.8
		$4.0		$17.2		$2.0		$7.8		$31.0

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The total cost of the acquisition has been allocated to the assets acquired and the liabilities assumed based upon their estimated fair values at the date of the acquisition. The estimated purchase price allocation is preliminary and subject to revision as valuation work and other analyses are still being conducted. The following represents the preliminary purchase price allocation:

Purchase price (in millions):
Credit bid	$ 37.2
Effective settlement of pre-existing relationships with the legacy Clinton Cards business	6.4
Cash acquired	(0.6)
	$ 43.0
Allocation (in millions):
Inventory	$ 5.5
Property, plant and equipment	18.4
Intangible assets	22.5
Current liabilities assumed	(3.4)
	$ 43.0

Note 5 – Royalty Revenue and Related Expenses

The Corporation has agreements for licensing the Care Bears and Strawberry Shortcake characters and other intellectual property. These license agreements provide for royalty revenue to the Corporation, which is recorded in “Other revenue” on the Consolidated Statement of Income. These license agreements may include the receipt of upfront advances, which are recorded as deferred revenue and earned during the period of the agreement. Revenues and expenses associated with the servicing of these agreements, primarily relating to the licensing activities included in non-reportable segments, are summarized as follows:

	Three Months Ended
(In thousands)	May 31, 2013		May 25, 2012
Royalty revenue		$ 6,506		$ 3,729
Royalty expenses
Material, labor and other production costs		$ 1,947		$ 2,328
Selling, distribution and marketing expenses		1,248		656
Administrative and general expenses		460		422
		$ 3,655		$ 3,406
In addition to the expenses disclosed above, during the three months ended May 25, 2012 the Corporation incurred charges of $2.1 million associated with our licensing business. See Note 6 for further information.
Note 6 – Other Income and Expense
Other Operating (Income) Expense – Net
	Three Months Ended
(In thousands)	May 31, 2013		May 25, 2012
Clinton Cards secured debt (recovery) impairment		$ (2,000)		$ 7,794
Termination of certain agency agreements		-		2,125
(Gain) loss on asset disposal		(235)		156
Miscellaneous		(1,083)		(551)
Other operating (income) expense – net		$ (3,318)		$ 9,524

The Corporation recorded an impairment of $7.8 million during the quarter ended May 25, 2012 related to the senior secured debt of Clinton Cards that the Corporation acquired. During the three months ended May 31, 2013 the impairment of the secured debt of Clinton Cards was adjusted based on current estimated recovery information provided by the Administrators, resulting in a gain of $2.0 million. See Note 4 for further information.

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In May 2012, the Corporation recorded expenses totaling $2.1 million related to the termination of certain agency agreements associated with its licensing business.

Other Non-Operating Income – Net

	Three Months Ended
(In thousands)	May 31, 2013		May 25, 2012
Foreign exchange gain	$	(915)	$	(1,456)
Rental income		(484)		(636)
Miscellaneous		26		(179)
Other non-operating income – net	$	(1,373)	$	(2,271)

Note 7 – Accumulated Other Comprehensive Loss

The changes in accumulated other comprehensive income (loss) are as follows.

(In thousands)	Foreign Currency Translation   Adjustments		Pensions and Other   Postretirement   Benefits		Unrealized     Investment     Gain		Total
Balance at February 28, 2013		$  12,594		$ (29,731)		$      4		$  (17,133)
Other comprehensive (loss) income before reclassifications		(2,155)		43		1		(2,111)
Amounts reclassified from accumulated other comprehensive income (loss)		-		334		-		334
Net current period other comprehensive (loss) income		(2,155)		377		1		(1,777)
Balance at May 31, 2013		$  10,439		$ (29,354)		$      5		$  (18,910)

The reclassifications out of accumulated other comprehensive income (loss) are as follows.

(In thousands)	Three Months Ended  May 31, 2013		Consolidated Statement of Income  Classification
Amortization of pension and other postretirement benefits items
Actuarial losses, net	$	(704)	Administrative and general expenses
Prior service cost		274	Administrative and general expenses
		(430)
Tax benefit		96	Income tax expense
Total, net of tax		(334)
Total reclassifications	$	(334)

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Note 8 – Earnings Per Share

The following table sets forth the computation of earnings per share and earnings per share - assuming dilution:

	Three Months Ended
	May 31, 2013		May 25, 2012
Numerator (in thousands):
Net income		$33,393		$7,250
Denominator (in thousands):
Weighted average shares outstanding		32,115		35,506
Effect of dilutive securities:
Share-based payment awards		587		648
Weighted average shares outstanding – assuming dilution		32,702		36,154
Earnings per share		$   1.04		$   0.20
Earnings per share – assuming dilution		$   1.02		$   0.20

Approximately 3.2 million and 3.7 million stock options outstanding for the three month periods ended May 31, 2013 and May 25, 2012, respectively, were excluded from the computation of earnings per share–assuming dilution because the options’ exercise prices were greater than the average market price of the common shares during the respective periods.

The Corporation issued 0.3 million and 0.1 million Class A common shares upon exercise of employee stock options and vesting of equity awards during the three months ended May 31, 2013 and three months ended May 25, 2012, respectively.

Note 9 – Customer Allowances and Discounts

Trade accounts receivable are reported net of certain allowances and discounts. The most significant of these are as follows:

(In thousands)	May 31, 2013		February 28, 2013		May 25, 2012
Allowance for seasonal sales returns		$ 29,296		$ 24,574		$ 36,719
Allowance for outdated products		11,971		11,156		15,355
Allowance for doubtful accounts		3,443		3,419		21,366
Allowance for marketing funds		27,305		28,610		28,987
Allowance for rebates		30,276		31,771		33,106
		$102,291		$ 99,530		$135,533

Certain customer allowances and discounts are settled in cash. These accounts, primarily rebates, which are classified as “Accrued liabilities” on the Consolidated Statement of Financial Position, totaled $14.3 million, $13.5 million and $12.5 million as of May 31, 2013, February 28, 2013 and May 25, 2012, respectively.

During the three months ended May 25, 2012, the Corporation recorded an additional allowance for doubtful accounts of approximately $17 million related to its unsecured accounts receivable exposure to Clinton Cards.

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Note 10 – Inventories

(In thousands)	May 31, 2013		February 28, 2013		May 25, 2012
Raw materials		$  25,187		$  21,303		$  18,290
Work in process		12,843		6,683		13,070
Finished products		265,262		278,573		243,951
		303,292		306,559		275,311
Less LIFO reserve		84,252		84,166		82,192
		219,040		222,393		193,119
Display materials and factory supplies		18,784		20,054		21,469
		$237,824		$242,447		$214,588

The valuation of inventory under the Last-In, First-Out (“LIFO”) method is made at the end of each fiscal year based on inventory levels and costs at that time. Accordingly, interim LIFO calculations, by necessity, are based on estimates of expected fiscal year-end inventory levels and costs, and are subject to final fiscal year-end LIFO inventory calculations.

Inventory held on location for retailers with scan-based trading arrangements, which is included in finished products, totaled $68.6 million, $59.7 million and $59.0 million as of May 31, 2013, February 28, 2013 and May 25, 2012, respectively.

Note 11 – Deferred Costs

Deferred costs and future payment commitments for retail supply agreements are included in the following financial statement captions:

(In thousands)	May 31, 2013		February 28, 2013		May 25, 2012
Prepaid expenses and other		$   88,912		$   93,873		$   85,622
Other assets		328,063		332,159		378,091
Deferred cost assets		416,975		426,032		463,713
Other current liabilities		(63,378)		(61,282)		(45,625)
Other liabilities		(91,359)		(92,153)		(131,883)
Deferred cost liabilities		(154,737)		(153,435)		(177,508)
Net deferred costs		$ 262,238		$ 272,597		$ 286,205

The Corporation maintains an allowance for deferred costs related to supply agreements of $7.2 million, $7.9 million and $9.2 million at May 31, 2013, February 28, 2013 and May 25, 2012, respectively. This allowance is included in “Other assets” on the Consolidated Statement of Financial Position.

Note 12 – Debt

As of May 31, 2013, the Corporation was a party to a $400 million senior secured credit agreement (the “Credit Agreement”), under which there was $35.1 million and $61.2 million borrowings outstanding as of May 31, 2013 and February 28, 2013, respectively. There were no borrowings under the Credit Agreement as of May 25, 2012. The Corporation is also a party to an accounts receivable facility that provides funding of up to $50 million, under which there were no borrowings outstanding as of May 31, 2013, February 28, 2013 and May 25, 2012, respectively. The Corporation had, in the aggregate, $27.5 million outstanding under letters of credit under these borrowing agreements, which reduces the total credit available to the Corporation thereunder.

There was no debt due within one year as of May 31, 2013, February 28, 2013 and May 25, 2012, respectively.

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Long-term debt and their related calendar year due dates as of May 31, 2013, February 28, 2013 and May 25, 2012, respectively, were as follows:

(In thousands)	May 31, 2013		February 28, 2013		May 25, 2012
7.375% senior notes, due 2021		$225,000		$225,000		$225,000
Revolving credit facility, due 2017		35,100		61,200		-
6.10% senior notes, due 2028		181		181		181
		$260,281		$286,381		$225,181

The total fair value of the Corporation’s publicly traded debt, which was considered a Level 1 valuation as it was based on quoted market prices, was $227.4 million (at a carrying value of $225.2 million), $233.6 million (at a carrying value of $225.2 million) and $229.1 million (at a carrying value of $225.2 million) at May 31, 2013, February 28, 2013 and May 25, 2012, respectively.

The total fair value of the Corporation’s non-publicly traded debt, which was considered a Level 2 valuation as it was based on comparable privately traded debt prices, was $35.1 million (at a carrying value of $35.1 million) and $61.2 million (at a carrying value of $61.2 million) at May 31, 2013 and February 28, 2013, respectively.

At May 31, 2013, the Corporation was in compliance with the financial covenants under its borrowing agreements.

Note 13 – Retirement Benefits

The components of periodic benefit cost for the Corporation’s defined benefit pension and postretirement benefits plans are as follows:

	Defined Benefit Pension				Postretirement Benefits
	Three Months Ended				Three Months Ended
(In thousands)	May 31, 2013		May 25, 2012		May 31, 2013		May 25, 2012
Service cost		$     320		$    334		$   138		$   213
Interest cost		1,742		1,844		613		800
Expected return on plan assets		(1,574)		(1,613)		(763)		(840)
Amortization of prior service cost (credit)		51		61		(325)		(519)
Amortization of actuarial loss (gain)		917		816		(213)		-
		$  1,456		$ 1,442		$ (550)		$ (346)

The Corporation has a discretionary profit-sharing plan with a 401(k) provision covering most of its United States employees. The profit-sharing plan expense for the three months ended May 31, 2013 was $4.0 million, compared to $3.0 million in the prior year period. The Corporation also matches a portion of 401(k) employee contributions. The expense recognized for the 401(k) match was $1.3 million in each of the three months ended May 31, 2013 and May 25, 2012. The profit-sharing plan and 401(k) matching expenses for the three month periods are estimates as actual contributions are determined after fiscal year-end.

At May 31, 2013, February 28, 2013 and May 25, 2012, the liability for postretirement benefits other than pensions was $16.8 million, $15.7 million and $26.2 million, respectively, and is included in “Other liabilities” on the Consolidated Statement of Financial Position. At May 31, 2013, February 28, 2013 and May 25, 2012, the long-term liability for pension benefits was $81.2 million, $81.4 million and $75.6 million, respectively, and is included in “Other liabilities” on the Consolidated Statement of Financial Position.

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Note 14 – Fair Value Measurements

Assets and liabilities measured at fair value are classified using the fair value hierarchy based upon the transparency of inputs as of the measurement date. The classification of fair value measurements within the hierarchy is based upon the lowest level of input that is significant to the measurement. The three levels are defined as follows:

— Level 1 – Valuation is based upon quoted prices (unadjusted) in active markets for identical assets or liabilities.

— Level 2 – Valuation is based upon quoted prices for similar assets and liabilities in active markets, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

— Level 3 – Valuation is based upon unobservable inputs that are significant to the fair value measurement.

The following table summarizes the financial assets measured at fair value as of May 31, 2013:

(In thousands)	May 31, 2013	Level 1		Level 2	Level 3
Assets measured on a recurring basis:
Deferred compensation plan assets	$ 11,104		$ 8,683	$ 2,421	$        -
The following table summarizes the financial assets measured at fair value as of February 28, 2013:
(In thousands)	February 28, 2013	Level 1		Level 2	Level 3
Assets measured on a recurring basis:
Deferred compensation plan assets	$ 10,636		$ 9,175	$ 1,461	$        -
The following table summarizes the financial assets measured at fair value as of May 25, 2012:
(In thousands)	May 25, 2012	Level 1		Level 2	Level 3
Assets measured on a recurring basis:
Deferred compensation plan assets	$  9,505		$ 7,949	$ 1,556	$        -

The deferred compensation plan includes investments in mutual funds and a money market fund. Assets held in mutual funds were recorded at fair value, which was considered a Level 1 valuation as it is based on each fund’s quoted market value per share in an active market. The money market fund was classified as Level 2 as substantially all of the fund’s investments were determined using amortized cost. Although the Corporation is under no obligation to fund employees’ nonqualified accounts, the fair value of the offsetting nonqualified deferred compensation liability is based on the fair value of the plan’s assets.

Note 15 – Contingency

The Corporation is presently involved in various judicial, administrative, regulatory and arbitration proceedings concerning matters arising in the ordinary course of business, including but not limited to, employment, commercial disputes and other contractual matters, some of which are described below. These matters are inherently subject to many uncertainties regarding the possibility of a loss to the Corporation. These uncertainties will ultimately be resolved when one or more future events occur or fail to occur, confirming the incurrence of a liability or reduction of a liability. In accordance with ASC Topic 450, “Contingencies,” the Corporation accrues for these contingencies by a charge to income when it is both probable that one or more future events will occur confirming the fact of a loss and the amount of the loss can be reasonably estimated. Due to this uncertainty, the actual amount of any loss may ultimately prove to be larger or smaller than the amounts reflected in the Corporation’s Consolidated Financial Statements. Some of these proceedings are at preliminary stages and some of these cases seek an indeterminate amount of damages.

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Baker/Collier Litigation

American Greetings Corporation is a defendant in two putative class action lawsuits involving corporate-owned life insurance policies (the “Insurance Policies”): one filed in the Northern District of Ohio on January 11, 2012 by Theresa Baker as the personal representative of the estate of Richard Charles Wolfe (the “Baker Litigation”); and the other filed in the Northern District of Oklahoma on October 1, 2010 by Keith Collier as the personal representative of the estate of Ruthie Collier (the “Collier Litigation”).

In the Baker Litigation, the plaintiff claims that American Greetings Corporation (1) misappropriated its employees’ names and identities to benefit itself; (2) breached its fiduciary duty by using its employees’ identities and personal information to benefit itself; (3) unjustly enriched itself through the receipt of corporate-owned life insurance policy benefits, interest and investment returns; and (4) improperly received insurance policy benefits for the insurable interest in Mr. Wolfe’s life. The plaintiff seeks damages in the amount of all pecuniary benefits associated with the subject Insurance Policies, including investment returns, interest and life insurance policy benefits that American Greetings Corporation received from the deaths of the former employees whose estates form the putative class.

In the Collier Litigation, the plaintiff claims that American Greetings Corporation did not have an insurable interest when it obtained the subject Insurance Policies and wrongfully received the benefits from those policies. The plaintiff seeks damages in the amount of policy benefits received by American Greetings Corporation from the subject Insurance Policies, as well as attorney’s fees, costs and interest. On April 2, 2012, the plaintiff filed its First Amended Complaint, adding misappropriation of employee information and breach of fiduciary duty claims as well as seeking punitive damages. On April 20, 2012, American Greetings Corporation moved to transfer the Collier Litigation to the Northern District of Ohio, where the Baker Litigation is pending. On July 6, 2012, the Court granted American Greetings Corporation’s Motion to Transfer and transferred the case to the Northern District of Ohio, where the Baker Litigation is pending.

On May 22, 2013, the Court preliminarily approved a full and final settlement of all the claims of the Wolfe and Collier estates, as well as the classes they seek to represent. As a result of the preliminary approval, the Court consolidated the two cases and certified a single class that consists of the heirs or estates of the estates and heirs of all former American Greetings Corporation employees (i) who are deceased; (ii) who were not officers or directors of American Greetings; (iii) who were insured under one of the following corporate-owned life insurance plans: Provident Life & Accident 61153, Provident Life & Accident 61159, Mutual Benefit Life Insurance Company 111, Connecticut General ENX219, and Hartford Life Insurance Company 361; and (iv) for whom American Greetings has received a death benefit on or before the date on which the Court enters the Order of Preliminary Approval. Required notices to potential class members and to state attorney generals as required under the Class Action Fairness Act of 2005 were mailed on May 30, 2013. The Court will entertain final approval of the settlement on September 20, 2013. If the settlement is finally approved by the Court, American Greetings Corporation will deposit $12.5 million into a settlement fund to be distributed in its entirety to those members of the class who present valid claims, their counsel, and a settlement administration vendor. This amount was accrued prior to the first quarter of 2014.

Carter/Wolfe/LMPERS Litigation

On September 26, 2012, we announced that our Board of Directors received a non-binding proposal from Zev Weiss, the Corporation’s Chief Executive Officer, and Jeffrey Weiss, the Corporation’s President and Chief Operating Officer, on behalf of themselves and certain other members of the Weiss family and related parties to acquire all of the outstanding Class A common shares and Class B common shares of the Corporation not currently owned by them (the “Going Private Proposal”). On September 27, 2012, Dolores Carter, a purported shareholder, filed a putative shareholder derivative and class action lawsuit (the “Carter Action”) in the Court of Common Pleas in Cuyahoga County, Ohio (the “Cuyahoga County Court”), against American Greetings Corporation and all of the members of the Board of Directors (“Carter Defendants”). The Carter Action alleges, among other things, that the directors of the Corporation breached their fiduciary duties owed to shareholders in evaluating and pursuing the proposal. The Carter Action further alleges claims for aiding and abetting breaches of fiduciary duty. Among other things, the Carter Action seeks declaratory relief. Subsequently, six more lawsuits were filed in the Cuyahoga County Court purporting to advance substantially similar claims on behalf of American Greetings against the members of the Board of Directors and, in certain cases, additional direct claims against American Greetings. One lawsuit was voluntarily dismissed. The other lawsuits, which remain pending, were consolidated by Judge Richard J. McMonagle on December 6, 2012 (amended order dated December 18, 2012) as In re American Greetings Corp. Shareholder Litigation, Lead Case No. CV 12 792421. Lead plaintiffs and lead plaintiffs’ counsel also were appointed.

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On April 30, 2013, lead plaintiffs’ counsel filed a Consolidated Class Action Complaint. The Consolidated Complaint brings a single class claim against the members of the Corporation’s Board of Directors for alleged breaches of fiduciary duty and aiding and abetting. The plaintiffs allege that the preliminary proxy statement on Schedule 14A filed with the Securities and Exchange Commission (“SEC”) on April 17, 2013 omits information necessary to permit the Corporation’s shareholders to determine if the Merger is in their best interest, that the controlling shareholders have abused their control of the Corporation, that the special committee appointed to oversee the transaction is not independent, and that the other members of the Board of Directors are also not independent. On June 13, 2013, defendants filed motions to dismiss the Consolidated Class Action Complaint based on plaintiffs’ failure to properly plead their claims as derivative actions, exercise their statutory appraisal rights as the sole remedy for dissatisfaction with the proposed share price, and to overcome the business judgment rule with respect to their breach of fiduciary duty claims. The motions remain pending.

On November 6, 2012, R. David Wolfe, a purported shareholder, filed a putative class action (the “Wolfe Action”) in the United States District Court for the Northern District of Ohio (the “Federal Court”) against certain members of the Weiss Family and the Irving I. Stone Oversight Trust, the Irving Stone Limited Liability Company, the Irving I. Stone Support Foundation, and the Irving I. Stone Foundation (“Stone Entities”) alleging breach of fiduciary duties in proposing and pursuing the proposal, as well as against American Greetings, seeking, among other things, declaratory relief. Shortly thereafter, on November 9, 2012, the Louisiana Municipal Police Employees’ Retirement System also filed a purported class action in the Federal Court (the “LMPERS Action”) asserting substantially similar claims against the same defendants and seeking substantially similar relief.

On November 30, 2012, plaintiffs in the Wolfe and LMPERS Actions filed motions (1) to consolidate the Wolfe and LMPERS Actions, (2) for appointment as co-lead plaintiffs, (3) for appointment of co-lead counsel, and, in the Wolfe Action only, (4) for partial summary judgment. On December 14, 2012, the Corporation filed its oppositions to the motions (a) to consolidate the Wolfe and LMPERS Actions, (b) for appointment as co-lead plaintiffs, and (c) for appointment of co-lead counsel. On the same day, the Corporation also moved to dismiss both the Wolfe and LMPERS Actions. The Corporation answered both complaints on January 8, 2013, and on January 11, 2013, it filed its opposition to the motion for partial summary judgment. On February 14, 2013, the Federal Court dismissed both the Wolfe and LMPERS Actions for lack of subject matter jurisdiction. On March 15, 2013, plaintiffs in both the Wolfe and LMPERS Actions filed notices of appeal with the Sixth Circuit Court of Appeals. On April 18, 2013, plaintiff Wolfe moved to dismiss his appeal, which motion was granted on April 19, 2013. On May 8, 2013, plaintiff LMPERS’s moved to dismiss its appeal as well, which motion was granted.

Plaintiffs in the Wolfe and LMPERS Actions alleged, in part, that Article Seventh of the Corporation’s articles of incorporation prohibited the special committee from, among other things, evaluating the merger. The Corporation considered these allegations and concluded that the Article is co-extensive with Ohio law and thus allows the Corporation to engage in any activity authorized by Ohio law. The Corporation also has consistently construed Article Seventh as permitting directors to approve a transaction so long as they are both disinterested and independent.

On April 17, 2013, R. David Wolfe filed a new derivative and putative class action (“Wolfe Action II”) in the United States District Court for the Northern District of Ohio against the Corporation’s directors, certain members of the Weiss Family, and the Stone Entities, as well as the Corporation as a nominal defendant, challenging the merger as financially and procedurally unfair to the Corporation and its minority shareholders. Mr. Wolfe subsequently filed an Amended Complaint on April 29, 2013. The Wolfe Action II seeks a declaratory judgment that Article Seventh precludes the Board of Directors and special committee from approving the merger. In addition, the Wolfe Action II includes a derivative claim for breach of fiduciary duty against the Corporation’s directors for allegedly violating Article Seventh. Finally, the Wolfe Action II includes both a derivative and class action claim for breach of fiduciary duty against the Weiss Family defendants and the Stone Entities for allegedly seeking to acquire the minority shareholders’ interests at an unfair price. Defendants filed their Motions to Dismiss the Wolfe Action II amended Complaint on July 8, 2013.

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Management is unable to estimate a range of reasonably possible losses for these cases in which the damages have not been specified and (i) the proceedings are in the early stages, (ii) there is uncertainty as to the outcome of the pending appeals or motions, and/or (iii) there are significant factual issues to be resolved. However, for these cases, management does not believe, based on currently available information, that the outcomes of these proceedings will have a material adverse effect on the Corporation’s financial condition, though the outcomes could be material to the Corporation’s operating results for any particular period, depending, in part, upon the operating results for such period.

Note 16 – Income Taxes

The Corporation’s provision for income taxes in interim periods is computed by applying its estimated annual effective tax rate against income before income tax expense for the period. In addition, non-recurring or discrete items are recorded during the period in which they occur. The magnitude of the impact that discrete items have on the Corporation’s quarterly effective tax rate is dependent on the level of income in the period. The effective tax rate was 36.4% and 30.4% for the three month periods ended May 31, 2013 and May 25, 2012, respectively. The lower than statutory rate for the three months ended May 25, 2012 was due primarily to the release of reserves upon lapse of the applicable statutes.

At February 28, 2013, the Corporation had unrecognized tax benefits of $21.7 million that, if recognized, would have a favorable effect on the Corporation’s income tax expense of $18.5 million. There were no significant changes to this amount during the first quarter of 2014. It is reasonably possible that the Corporation’s unrecognized tax positions as of February 28, 2013 could decrease $3.1 million during the next twelve months due to anticipated settlements and resulting cash payments related to open years after 1996, which are currently under examination.

The Corporation recognizes interest and penalties accrued on unrecognized tax benefits and refundable income taxes as a component of income tax expense. During the three months ended May 31, 2013, the Corporation recognized net expense of $0.2 million for interest and penalties on unrecognized tax benefits and refundable income taxes. As of May 31, 2013, the total amount of gross accrued interest and penalties related to unrecognized tax benefits less refundable income taxes was a net payable of $4.7 million.

The Corporation is subject to examination by the Internal Revenue Service for tax years 2010 to the present and various U.S. state and local jurisdictions for tax years 1996 to the present. The Corporation is also subject to tax examination in various international tax jurisdictions including Australia, Canada, New Zealand and the United Kingdom for tax years 2006 to the present.

Note 17 – Business Segment Information

The Corporation has North American Social Expression Products, International Social Expression Products, Retail Operations, AG Interactive and non-reportable segments. The North American Social Expression Products and International Social Expression Products segments primarily design, manufacture and sell greeting cards and other related products through various channels of distribution with mass merchandising as the primary channel. At May 31, 2013, the Retail Operations segment operated 396 card and gift retail stores in the United Kingdom. The stores sell products purchased from the International Social Expression Products segment as well as products purchased from other vendors. AG Interactive distributes social expression products, including electronic greetings and a broad range of graphics and digital services and products, through a variety of electronic channels, including Web sites, Internet portals, instant messaging services and electronic mobile devices. The Corporation’s non-reportable operating segments primarily include licensing activities and the design, manufacture and sale of display fixtures.

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(In thousands)	Three Months Ended
Total Revenue:	May 31, 2013		May 25, 2012
North American Social Expression Products		$328,287		$308,559
International Social Expression Products		70,801		62,680
Intersegment items		11,092		-
Net		59,709		62,680
Retail Operations		74,718		-
AG Interactive		14,700		15,496
Non-reportable segments		19,889		6,371
		$497,303		$393,106
(In thousands)	Three Months Ended
Segment Earnings (Loss) Before Tax:	May 31, 2013		May 25, 2012
North American Social Expression Products		$ 66,347		$ 56,218
International Social Expression Products		2,544		(22,557)
Intersegment items		2,214		-
Net		330		(22,557)
Retail Operations		(3,452)		-
AG Interactive		3,313		3,773
Non-reportable segments		7,382		(58)
Unallocated
Interest expense		(4,312)		(4,376)
Profit-sharing expense		(3,981)		(2,980)
Stock-based compensation expense		(2,475)		(1,869)
Corporate overhead expense		(10,606)		(17,731)
		(21,374)		(26,956)
		$ 52,546		$ 10,420

“Corporate overhead expense” includes costs associated with corporate operations including, among other costs, senior management, corporate finance, legal, and insurance programs.

Refer to Note 4 for segment information related to certain prior year charges associated with activities and transactions in connection with Clinton Cards that do not have comparative amounts in the current year.

Termination Benefits

Termination benefits are primarily considered part of an ongoing benefit arrangement, accounted for in accordance with ASC Topic 712, “Compensation – Nonretirement Postemployment Benefits,” and are recorded when payment of the benefits is probable and can be reasonably estimated.

The balance of the severance accrual was $4.5 million, $6.0 million and $5.0 million at May 31, 2013, February 28, 2013 and May 25, 2012, respectively. The payments expected within the next twelve months are included in “Accrued liabilities” while the remaining payments beyond the next twelve months are included in “Other liabilities” on the Consolidated Statement of Financial Position.

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Note 18 – Proposal by Members of the Weiss Family and Related Entities to Acquire the Corporation

On September 26, 2012, the Corporation announced that our Board of Directors received the Going Private Proposal.

On March 29, 2013, the Corporation signed an agreement and plan of merger (as amended on July 3, 2013, the “Merger Agreement”) by and among American Greetings Corporation, Century Intermediate Holding Company (“Parent”), which upon the closing of the Merger (as defined below) will be indirectly owned by the Family Shareholders (as defined below), and Century Merger Company, a wholly-owned subsidiary of Parent (“Merger Sub”). As more fully described in our Current Reports on Form 8-K filed with the SEC on April 1, 2013 and July 5, 2013, at the effective time of the Merger, each issued and outstanding share of the Corporation (other than shares owned by the Corporation, Parent (which will include at the effective time of the Merger all shares currently held by the Family Shareholders), Merger Sub or holders who have properly exercised dissenters’ rights under Ohio law) will be converted into the right to receive $19.00 per share, in cash, without interest and subject to any withholding taxes, and Merger Sub will merge with and into the Corporation, with the Corporation surviving the Merger as a wholly-owned subsidiary of Parent (the “Merger”). The consummation of the Merger is subject to customary conditions, and is further conditioned on the favorable vote of (1) at least two-thirds of the outstanding voting power of the Corporation represented by the Class A common shares and Class B common shares, voting together as a single class, and (2) a majority of the Class A common shares and Class B common shares held by persons other than the Family Shareholders, the Irving I. Stone Foundation and our executive officers and directors, as more fully described in our Current Reports on Form 8-K filed with the SEC on April 1, 2013 and July 5, 2013 and in the proxy statement on Schedule 14A filed with the SEC on July 5, 2013 (the “Majority of the Minority Shareholder Approval” condition). For purposes of the Majority of the Minority Shareholder Approval only, Class B common shares will be entitled to one vote per share. Under the Merger Agreement, “Family Shareholders” includes: Zev Weiss, a director and the Corporation’s Chief Executive Officer; Morry Weiss, the Corporation’s Chairman of the Board of Directors; Jeffrey Weiss, a director and the Corporation’s President and Chief Operating Officer; and certain other members of the Weiss family, together with the Irving I. Stone Limited Liability Company.

See Note 15 for information regarding legal proceedings related to the Going Private Proposal and Merger Agreement.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our unaudited consolidated financial statements. This discussion and analysis, and other statements made in this Report, contain forward-looking statements. See “Factors That May Affect Future Results” at the end of this discussion and analysis for a description of the uncertainties, risks and assumptions associated with these statements. Unless otherwise indicated or the context otherwise requires, the “Corporation,” “we,” “our,” “us” and “American Greetings” are used in this Report to refer to the businesses of American Greetings Corporation and its consolidated subsidiaries.

Overview

Total revenue in the first quarter increased approximately $104 million or 26.5% compared to the prior year period. Approximately three quarters of the increase is related to the prior year second quarter acquisition of certain assets of Clinton Cards PLC (“Clinton Cards”) and an unusually large contract in the fixtures business in the current period. The net increase in revenue due to Clinton Cards was approximately $64 million and the fixtures business added about $11 million. During the first quarter, our fixtures business obtained a contract to supply fixtures to a large consumer electronics company and this contract was the primary driver of the year-over-year revenue increase. We expect this contract to contribute approximately $25 million of revenue in the current year and to be completed during the current year second quarter. The fixtures business is included in the Non-reportable section of our segment reporting.

Net of the items above, revenue increased approximately $29 million or 7.5% compared to the prior year first quarter. About 60% of this increase was related to the cycle of our fiscal calendar. Due to our fiscal calendar cycle, the current year first quarter ended on May 31, 2013, compared to May 25, 2012 in the prior year. This equates to six days, or 7% more selling days in the current year quarter. This timing will not impact the full year results, and will result in less days in the current year fourth quarter compared to the prior year fourth quarter. The remaining 40% of the $29 million increase in revenue was primarily due to higher sales of greeting cards, gift packaging products and higher royalty revenue from our Strawberry Shortcake and Care Bears properties.

First quarter operating income was $55.4 million compared to $12.4 million in the prior year, an increase of $43.0 million. Current year operating income includes costs and fees associated with the Going Private Proposal (as defined below) of $4.5 million and a gain of approximately $2 million related to an adjustment to the impairment of the investment in the senior secured debt of Clinton Cards. The prior year quarter included approximately $31 million of impairments, expenses and fees related to the Clinton Cards transaction and a charge of approximately $2 million related to the termination of certain agency agreements associated with our intellectual properties licensing business. Net of the items above, operating income increased approximately $13 million in the current year first quarter compared to the prior year period.

We estimate that slightly less than 50% of the $13 million increase in operating income is related to the additional selling days in the current year first quarter. The current year quarter was also favorably impacted by increased sales of everyday and seasonal greeting cards and gift packaging products, the impact of the large contract within our fixtures business, lower marketing and product management expenses, and lower costs related to product refresh initiatives. The current quarter was unfavorably impacted by higher scrap expense and the operating loss of $3.5 million from Clinton Cards operations.

Merger Agreement

On September 26, 2012, we announced that our Board of Directors received a non-binding proposal from Zev Weiss, the Corporation’s Chief Executive Officer, and Jeffrey Weiss, the Corporation’s President and Chief Operating Officer, on behalf of themselves and certain other members of the Weiss family and related parties to acquire all of the outstanding Class A common shares and Class B common shares of the Corporation not currently owned by them (the “Going Private Proposal”).

On March 29, 2013, we signed an agreement and plan of merger (as amended on July 3, 2013, the “Merger Agreement”) by and among American Greetings Corporation, Century Intermediate Holding Company (“Parent”), which upon the closing of the Merger (as defined below) will be indirectly owned by the Family Shareholders (as defined below), and Century Merger

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Company, a wholly-owned subsidiary of Parent (“Merger Sub”). As more fully described in our Current Reports on Form 8-K filed with the Securities and Exchange Commission (“SEC”) on April 1, 2013 and July 5, 2013, at the effective time of the Merger, each issued and outstanding share of the Corporation (other than shares owned by the Corporation, Parent (which will include at the effective time of the Merger all shares currently held by the Family Shareholders), Merger Sub or holders who have properly exercised dissenters’ rights under Ohio law) will be converted into the right to receive $19.00 per share, in cash, without interest and subject to any withholding taxes, and Merger Sub will merge with and into the Corporation, with the Corporation surviving the Merger as a wholly-owned subsidiary of Parent (the “Merger”). The consummation of the Merger is subject to customary conditions, and is further conditioned on the favorable vote of (1) at least two-thirds of the outstanding voting power of the Corporation represented by the Class A common shares and Class B common shares, voting together as a single class, and (2) a majority of the Class A common shares and Class B common shares held by persons other than the Family Shareholders, the Irving I. Stone Foundation and our executive officers and directors, as more fully described in our Current Reports on Form 8-K filed with the SEC on April 1, 2013 and July 5, 2013, and in the proxy statement on Schedule 14A filed with the SEC on July 5, 2013 (the “Majority of the Minority Shareholder Approval” condition). For purposes of the Majority of the Minority Shareholder Approval only, Class B common shares will be entitled to one vote per share. Under the Merger Agreement, “Family Shareholders” includes: Zev Weiss, a director and the Corporation’s Chief Executive Officer; Morry Weiss, the Corporation’s Chairman of the Board of Directors; Jeffrey Weiss, a director and the Corporation’s President and Chief Operating Officer; and certain other members of the Weiss family, together with the Irving I. Stone Limited Liability Company.

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Results of Operations

Three months ended May 31, 2013 and May 25, 2012

Net income was $33.4 million, or $1.02 per share, in the first quarter compared to $7.3 million, or $0.20 per share, in the prior year first quarter (all per-share amounts assume dilution).

Our results for the three months ended May 31, 2013 and May 25, 2012 are summarized below:

(Dollars in thousands)	2013		% Total Revenue		2012		% Total Revenue
Net sales		$490,545		98.6%		$389,253		99.0%
Other revenue		6,758		1.4%		3,853		1.0%
Total revenue		497,303		100.0%		393,106		100.0%
Material, labor and other production costs		203,837		41.0%		163,864		41.7%
Selling, distribution and marketing expenses		170,339		34.3%		127,163		32.3%
Administrative and general expenses		71,080		14.3%		80,168		20.4%
Other operating (income) expense – net		(3,318)		(0.7%)		9,524		2.4%
Operating income		55,365		11.1%		12,387		3.2%
Interest expense		4,312		0.9%		4,376		1.1%
Interest income		(120)		(0.0%)		(138)		(0.0%)
Other non-operating income – net		(1,373)		(0.3%)		(2,271)		(0.5%)
Income before income tax expense		52,546		10.5%		10,420		2.6%
Income tax expense		19,153		3.8%		3,170		0.8%
Net income		$ 33,393		6.7%		$ 7,250		1.8%

For the three months ended May 31, 2013, consolidated net sales increased 26.0%, or approximately $101 million, from $389.3 million in the prior year first quarter to $490.5 million in the current three months. The increase was primarily related to the purchase of retail stores from Clinton Cards in the prior year second quarter, which caused an increase in net sales of approximately $63 million during the current quarter compared to the prior year period. The increase was comprised of approximately $74 million of net sales from the Retail Operations segment, reduced by approximately $11 million for the elimination of intersegment sales from the International Social Expression Products segment to the Retail Operations segment. For comparison purposes, the sales being eliminated in the current period would have been third-party sales in the prior year to Clinton Cards stores that were not owned by us at that time. The increase was also driven by higher net sales in our fixtures business of approximately $11 million as discussed in the overview section of this Form 10-Q. The remaining $27 million increase was primarily due to increases in greeting card sales of approximately $20 million and gift packaging, party goods and other ancillary product sales of approximately $7 million compared to the prior year first quarter. As discussed in the overview section, those increases, in particular the increase in everyday greeting card sales, were significantly impacted by the additional six selling days occurring in the three months ended May 31, 2013 that did not occur in the prior year first quarter. We estimate that approximately 60% of the $27 million increase was related to the additional six selling days. In addition, the prior year included an impairment of deferred costs of approximately $4 million related to the supply agreement associated with the Clinton Cards’ Birthdays stores that were closed as part of the Clinton Cards bankruptcy administration process that did not recur in the current year. These increases were partially offset by the unfavorable impact of foreign currency and scan-based trading (“SBT”) implementations of approximately $3 million and $1 million, respectively.

Other revenue, primarily royalty revenue from our Strawberry Shortcake and Care Bears properties, increased $2.9 million during the three months ended May 31, 2013.

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Wholesale Unit and Pricing Analysis for Greeting Cards

Unit and pricing comparatives (on a sales less returns basis) for the three months ended May 31, 2013 and May 25, 2012 are summarized below:

	Increase (Decrease) From the Prior Year
	Everyday Cards		Seasonal Cards		Total Greeting Cards
	2013	2012	2013	2012	2013	2012
Unit volume	6.4%	2.5%	2.0%	1.8%	4.8%	2.2%
Selling prices	3.8%	(3.1%)	3.6%	3.7%	3.5%	(0.6%)
Overall increase / (decrease)	10.4%	(0.7%)	5.6%	5.6%	8.5%	1.6%

During the first quarter, combined everyday and seasonal greeting card sales less returns increased 8.5% compared to the prior year quarter, including increases in unit volume of 4.8% and selling prices of 3.5%. The overall increase was primarily driven by unit growth and increases in selling prices from both our everyday and seasonal greeting cards in our North American Social Expression Products segment and increases in selling prices and unit volume from everyday greeting cards in our International Social Expression Products segment.

Everyday card sales less returns for the first quarter was up 10.4%, compared to the prior year quarter, with increases in unit volume of 6.4% and selling prices of 3.8%. The unit volume increase was primarily a result of additional selling days in the quarter. The selling price increase was a result of favorable product mix and general price increases outpacing the continued shift to a higher proportion of value cards.

Compared to the prior year quarter, seasonal card sales less returns increased 5.6% with an increase in both unit volume and selling prices of 2.0% and 3.6%, respectively. The unit volume improvement was driven by our Father’s Day and Graduation seasonal programs. The increase in selling prices was attributable to our Mother’s Day and Graduation seasonal programs.

Expense Overview

Material, labor and other production costs (“MLOPC”) for the three months ended May 31, 2013 were $203.8 million, an increase of approximately $40 million from $163.9 million in the prior year first quarter. As a percentage of total revenue, these costs were 41.0% in the current period compared to 41.7% for the three months ended May 25, 2012. The retail operations we purchased from Clinton Cards in the prior year second quarter caused a net increase in MLOPC of approximately $20 million during the current quarter compared to the prior year first quarter. This net increase was comprised of approximately $29 million for cost of goods sold through the Retail Operations segment, reduced by approximately $9 million for the adjustment to cost of goods related to intersegment sales from the International Social Expression Products segment to the Retail Operations segment. In addition, MLOPC increased approximately $16 million due to higher sales volume and unfavorable product mix. Also contributing to the increase in MLOPC for the current quarter was approximately $4 million of higher scrap expense than the prior year period.

Selling, distribution and marketing (“SDM”) expenses for the three months ended May 31, 2013 were $170.3 million, increasing approximately $43 million from $127.2 million for the comparable period in the prior year. The increase in the current year first quarter was driven by approximately $44 million of expenses within our Retail Operations segment related to the purchase of Clinton Cards in the prior year second quarter. Also contributing to the increase were higher supply chain costs of $3 million primarily driven by higher sales volume. These increases were partially offset by lower marketing and product management expenses of approximately $3 million.

Administrative and general expenses were $71.1 million for the three months ended May 31, 2013, a decrease of approximately $9 million from $80.2 million in the prior year period. This decrease was driven primarily by lower bad debt expense, whereby the prior year included approximately $17 million related to increased unsecured accounts receivable exposure as a result of Clinton Cards being placed into administration. In addition, legal related expenses decreased by approximately $3 million. These year-over-year decreases were partially offset by expenses within our Retail Operations segment of approximately $6 million and costs and fees related to the Going Private Proposal of $4.5 million that did not have comparative amounts in the prior year first quarter.

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Other operating (income) expense – net was $3.3 million of income during the current year quarter compared to $9.5 million of expense in the prior year. The prior year quarter included an expense of $2.1 million related to the termination of certain agency agreements associated with our licensing business. The prior year also included an impairment of $7.8 million related to the senior secured debt of Clinton Cards that we acquired in the prior year first quarter. In the current year first quarter, based on updated estimated recovery information provided in connection with the Clinton Cards bankruptcy administration, we recorded an adjustment to the Clinton Cards debt impairment resulting in a gain of $2.0 million.

Segment Information

Our operations are organized and managed according to a number of factors, including product categories, geographic locations and channels of distribution. Our North American Social Expression Products and International Social Expression Products segments primarily design, manufacture and sell greeting cards and other related products through various channels of distribution, with mass retailers as the primary channel. As permitted under Accounting Standards Codification (“ASC”) Topic 280 (“ASC 280”), “Segment Reporting,” certain operating segments have been aggregated into the International Social Expression Products segment. The aggregated operating divisions have similar economic characteristics, products, production processes, types of customers and distribution methods. At May 31, 2013, we operated 396 card and gift retail stores in the UK through our Retail Operations segment. These stores sell products purchased from the International Social Expression Products segment as well as products purchased from other vendors. The AG Interactive segment distributes social expression products, including electronic greetings, and a broad range of graphics and digital services and products, through a variety of electronic channels, including Web sites, Internet portals and electronic mobile devices.

Segment results are reported using actual foreign exchange rates for the periods presented. Refer to Note 17, “Business Segment Information,” to the Consolidated Financial Statements for further information and a reconciliation of total segment revenue to consolidated “Total revenue” and total segment earnings (loss) before tax to consolidated “Income before income tax expense.”

North American Social Expression Products Segment

	Three Months Ended
(Dollars in thousands)	May 31, 2013	May 25, 2012	% Change
Total revenue	$328,287	$308,559	6.4%
Segment earnings	66,347	56,218	18.0%

Total revenue of our North American Social Expression Products segment for the quarter ended May 31, 2013, increased $19.7 million, or 6.4%, compared to the prior year period. The increase was primarily driven by higher sales of greetings cards of approximately $13 million and increased sales of gift packaging, party goods and other ancillary products of approximately $9 million. These increases, in particular everyday greeting cards, were significantly impacted by the additional selling days in the quarter ended May 31, 2013 as compared to the prior year period. We estimate that approximately 65% of the increase was due to the additional six selling days. These increases were partially offset by the unfavorable impact of SBT implementations of approximately $2 million.

Segment earnings increased $10.1 million in the current three months compared to the three months ended May 25, 2012. The increase was driven primarily by the impact of higher revenues, partially offset by unfavorable product mix and higher scrap expense. In addition, decreases in marketing and product management expenses of approximately $3 million were offset by higher supply chain costs related to higher sales volume and increased technology maintenance costs of approximately $2 million and $1 million, respectively. We estimate that approximately 60% of the increased segment earnings were due to the additional six selling days.

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International Social Expression Products Segment
	Three Months Ended
(Dollars in thousands)	May 31, 2013	May 25, 2012	% Change
Total revenue	$59,709	$62,680	(4.7%)
Segment earnings (loss)	330	(22,557)	N/A
Total revenue of our International Social Expression Products segment decreased $3.0 million, or 4.7% for the three months ended May 31, 2013, compared to the same period in the prior year. The decrease was driven by the elimination of intersegment sales to the Retail Operations segment of approximately $11 million. For comparison purposes, the sales being eliminated would have been third-party sales in the prior year to Clinton Cards stores that were not owned by us at that time. Net of the elimination of intersegment sales, segment revenue increased approximately $8 million compared to the prior year first quarter. This increase was primarily due to higher sales of greetings cards of approximately $8 million, slightly less than half of which was due to the additional selling days occurring during the three months ended May 31, 2013 as compared to the prior year period. In addition, the prior year included an impairment of deferred costs of approximately $4 million related to the supply agreement associated with the Clinton Cards’ Birthdays stores that were closed as part of the Clinton Cards bankruptcy administration process that did not recur in the current year. Partially offsetting these increases were lower sales of other ancillary products of approximately $2 million, due primarily to the prior year disposition of a small non-card product line. In addition, foreign currency translation had an unfavorable impact of approximately $2 million. Segment earnings increased $22.9 million in the three months ended May 31, 2013 compared to the same period in the prior year. The improvement in earnings was primarily driven by prior year costs of approximately $21 million related to Clinton Cards that do not have comparative amounts in the current year. In the first quarter of the prior year, Clinton Cards, a significant customer, was placed into administration. As a result, we incurred bad debt expense of approximately $17 million and an impairment of deferred costs related to the supply agreement associated with Clinton Cards’ Birthdays stores of approximately $4 million. The remaining improvement in the three months ended May 31, 2013 was the result of the higher sales volume and cost savings related to prior year strategic actions. Retail Operations Segment
	Three Months Ended
(Dollars in thousands)	May 31, 2013	May 25, 2012	% Change
Total revenue	$74,718	-	N/A
Segment loss	(3,452)	-	N/A
In the prior year second quarter, we acquired 396 retail stores in the United Kingdom that we are operating under the “Clintons” brand. As with many retail businesses, the Retail Operations segment’s business is extremely seasonal in nature. As such, the overall profitability of this segment is highly dependent on success during the December holiday season. AG Interactive Segment
	Three Months Ended
(Dollars in thousands)	May 31, 2013	May 25, 2012	% Change
Total revenue	$14,700	$15,496	(5.1%)
Segment earnings	3,313	3,773	(12.2%)
Total revenue of AG Interactive decreased $0.8 million compared to the prior year quarter. This decrease in revenue was driven primarily by lower advertising revenue compared to the prior year. AG Interactive had approximately 3.7 million and 3.8 million online paid subscriptions at the end of the first quarter of the current and prior years, respectively. Segment earnings decreased $0.5 million compared to the prior year quarter primarily due to the impact of lower revenue.

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Non-reportable Segment

	Three Months Ended
(Dollars in thousands)	May 31, 2013	May 25, 2012	% Change
Total revenue	$19,889	$6,371	212.2%
Segment earnings (loss)	7,382	(58)	N/A

Total revenue from our Non-reportable segment increased $13.5 million compared to the prior year quarter. This increase in revenue was driven primarily by our fixtures business, where, during the first quarter, we obtained a contract to supply fixtures to a large consumer electronics company, which accounted for $11.2 million of the year-over-year revenue increase in our Non-reportable segment. We expect this contract to be completed during the current year second quarter. In addition, other Non-reportable segment revenue, primarily royalty revenue from our Strawberry Shortcake and Care Bears properties, increased approximately $2.3 million during the three months ended May 31, 2013.

Segment earnings increased $7.4 million compared to the prior year quarter. About $5.3 million of the increase was due to the impact of the higher revenue in the quarter, with roughly half to two-thirds of that increase due to the large fixture contract obtained in the quarter. In addition, the prior year first quarter included expenses of $2.1 million related to the termination of certain agency agreements associated with our licensing business that did not recur in the current period.

Unallocated Items

Centrally incurred and managed costs are not allocated back to the operating segments. As shown in the following table, the unallocated items include interest expense for centrally-incurred debt, domestic profit-sharing expense, and stock-based compensation expense. Unallocated items also included costs associated with corporate operations such as the senior management, corporate finance, legal and insurance programs.

	Three Months Ended
(Dollars in thousands)	May 31, 2013	May 25, 2012
Interest expense	$  (4,312)	$  (4,376)
Profit-sharing expense	(3,981)	(2,980)
Stock-based compensation expense	(2,475)	(1,869)
Corporate overhead expense	(10,606)	(17,731)
Total Unallocated	$(21,374)	$(26,956)

In the prior year quarter, corporate overhead expense included legal and advisory fees of $2.0 million related to the Clinton Cards transaction and an impairment of $7.8 million related to the senior secured debt of Clinton Cards. The current year included an adjustment to the Clinton Cards debt impairment, based on current estimated recovery information provided in connection with the Clinton Cards bankruptcy administration, which resulted in a gain of $2.0 million. The current three-month period also included $4.5 million of costs and fees related to the Going Private Proposal.

Liquidity and Capital Resources

The seasonal nature of our business precludes a useful comparison of the current period and the fiscal year-end financial statements; therefore, a Consolidated Statement of Financial Position as of May 25, 2012 has been included.

Operating Activities

Operating activities provided $24.3 million of cash during the three months ended May 31, 2013, compared to $49.9 million in the prior year period.

Accounts receivable used $17.2 million of cash during the three months ended May 31, 2013, compared to $2.6 million of cash during the same period in the prior year. The year-over-year change in cash flow of approximately $14.6 million, which occurred primarily within our fixtures business, was driven by growth in accounts receivable related to higher sales levels compared to the prior year.

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Inventory provided $4.2 million of cash during the three months ended May 31, 2013, compared to using $7.2 million of cash during the prior year first quarter. The use of cash in the prior year quarter was primarily due to inventory builds in both of our greeting card segments.

Deferred costs — net generally represents payments under agreements with retailers, net of the related amortization of those payments. During the three months ended May 31, 2013, amortization exceeded payments by $10.2 million. During the prior year first quarter, amortization plus the $4.0 million impairment of the deferred costs related to the supply agreement associated with the Clinton Cards’ Birthdays stores exceeded payments by $19.6 million.

Accounts payable and other liabilities used $42.4 million of cash during the three months ended May 31, 2013, compared to using $12.8 million in the prior year first quarter. About 50% of the year-over-year change in cash usage was related to the Clinton Cards acquisition and the timing of employee compensation payments, which was a result of the current year quarter ending on the last day of May compared to the prior year quarter ending on May 25, 2012. The remaining change was due to normal year-over-year timing of business transactions and related payments.

Investing Activities

Investing activities used $15.2 million of cash during the three months ended May 31, 2013, compared to $73.0 million of cash during the three months ended May 25, 2012. In the current year first quarter, the cash usage was primarily driven by $15.5 million of cash paid for capital expenditures.

During the prior year first quarter we paid $56.6 million of cash to acquire all of the outstanding senior secured debt of Clinton Cards. In addition, cash paid for capital expenditures was $16.4 million in the prior year.

Financing Activities

Financing activities used $31.0 million of cash during the three months ended May 31, 2013, compared to using $47.1 million during the three months ended May 25, 2012. During the current year first quarter, this use of cash was primarily related to dividend payments and repayments of borrowings under our revolving credit facility. We paid cash dividends of $4.8 million and made payments, net of borrowings, that reduced our outstanding borrowings by $26.1 million.

In the first quarter of fiscal 2013, the use of cash was primarily related to share repurchases and cash paid for dividends of $5.4 million. During the three months ended May 25, 2012, $40.5 million was paid to repurchase 2.7 million Class A common shares under our repurchase program in accordance with our Amended and Restated Articles of Incorporation.

Credit Sources

Substantial credit sources are available to us. In total, we had available sources of credit of approximately $450 million at May 31, 2013, which included our $400 million senior secured credit facility and our $50 million accounts receivable securitization facility, of which $387.4 million was unused as of May 31, 2013. Borrowings under the accounts receivable securitization facility are limited based on our eligible receivables outstanding. At May 31, 2013, we had $35.1 million of borrowings under the senior secured credit facility and no borrowings outstanding under the accounts receivable securitization facility. We had, in the aggregate, $27.5 million outstanding under letters of credit, which reduced the total credit availability thereunder as of May 31, 2013.

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Please refer to the discussion of our borrowing arrangements as disclosed in the “Credit Sources” section under Part II, Item 7 of our Annual Report on Form 10-K for the year ended February 28, 2013 for further information.

At May 31, 2013, we were in compliance with our financial covenants under the borrowing agreements described above.

Capital Deployment and Investments

Throughout fiscal 2014 and thereafter, we will continue to consider all options for capital deployment including growth options, acquisitions and other investments in third parties, expanding customer relationships, expenditures or investments related to our current product leadership initiatives or other future strategic initiatives, capital expenditures, the information technology systems refresh project, our new world headquarters project and, as appropriate, preserving cash.

As we have stated, our objective is to continue to expand our position as a leading creator, manufacturer and distributor of social expression products. As such, we have and expect to continue to focus resources on our core greeting card business, developing new, and growing existing, business, including by expanding Internet and other channels of electronic distribution to make American Greetings the natural and preferred social expressions solution, as well as by capturing any shifts in consumer demand. We expect to continue spending in fiscal 2014 in support of our product leadership strategy, primarily related to promotional efforts related to our Web site Cardstore.com and other marketing initiatives within our North American Social Expression Products segment. As we continue to develop Cardstore.com and other channels of distribution, we expect that we will continue to make investments to support these efforts; however, the timing and amount are difficult to estimate, but amounts may be material. In addition, to the extent we are successful in expanding distribution and revenue in connection with expanding our leadership, additional capital may be deployed as we may incur incremental costs associated with this expanded distribution, including upfront costs prior to any incremental revenue being generated. If incurred, these costs may be material. For example, we are in the final stages of completing a contract to distribute greeting cards in over 1,000 stores of a major national retailer. We expect that while this agreement would contribute approximately $150 million of revenue over the life of the agreement, there will be significant upfront costs and competitive terms associated with this contract. As a result, this contract is expected to have a negative net present value during the initial five-year term but we believe that if renewed, the contract will result in a positive net present value to us. However, there can be no assurances that we would be successful in renewing this contract or otherwise reducing costs or implementing measures to improve the profitability of this contract.

Over roughly the next five or six years, we expect to allocate resources, including capital, to refresh our information technology systems by modernizing our systems, redesigning and deploying new processes, and evolving new organization structures, all of which are intended to drive efficiencies within the business and add new capabilities. Amounts that we spend could be material in any fiscal year and over the life of the project. The total amount spent through fiscal 2013 on this project was approximately $84 million. During the three months ended May 31, 2013, we spent approximately $9 million, including capital of approximately $8 million and expense of approximately $1 million, on these information technology systems. Including the amount that has already been spent, we currently expect to spend at least an aggregate of $150 million on these information technology systems over the life of the project, the majority of which we expect will be capital expenditures. We believe these investments are important to our business, help us drive further efficiencies and add new capabilities; however, there can be no assurance that we will not spend more or less than $150 million over the life of the project, or that we will achieve the anticipated efficiencies or any cost savings.

During March 2011, we also announced that in fiscal 2012 we expected that we would begin to invest in the development of a world headquarters in the Northeast Ohio area. The state of Ohio has committed certain tax credits, loans and other incentives totaling up to $93.5 million to assist us in the development of a new headquarters in Ohio. We are required to make certain investments and meet other criteria to receive these incentives over time. Although the project to build a new world headquarters is currently on hold, based on preliminary estimates, the gross costs associated with a new world headquarters building, before any tax credit, loans or other incentives that we may receive, will be between approximately $150 million and $200 million over a number of years following our resumption of the project.

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Our future operating cash flow and borrowing availability under our credit agreement and our accounts receivable securitization facility are expected to meet currently anticipated funding requirements. The seasonal nature of our business results in peak working capital requirements that may be financed through short-term borrowings when cash on hand is insufficient.

Critical Accounting Policies

Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. Please refer to the discussion of our Critical Accounting Policies under Part II, Item 7 of our Annual Report on Form 10-K for the year ended February 28, 2013.

Factors That May Affect Future Results

Certain statements in this report 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 our operations and business environment, which are difficult to predict and may be beyond our control. Important factors that could cause actual results to differ materially from those suggested by these forward-looking statements, and that could adversely affect our future financial performance, include, but are not limited to, the following:

— a weak retail environment and general economic conditions;

— the loss of one or more retail customers and/or retail consolidations, acquisitions and bankruptcies, including the possibility of resulting adverse changes to retail contract terms;

— competitive terms of sale offered to customers, including costs and other terms associated with new and expanded customer relationships;

— the consummation of the Merger;

— the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement;

— the outcome of any legal proceedings that have been or may be instituted against the Corporation or others relating to the Merger Agreement;

— the inability to complete the Merger because of the failure to obtain shareholder approval or the Majority of the Minority Shareholder Approval, failure by Parent and Merger Sub to receive the proceeds of the financing as contemplated by the financing commitments or the failure to satisfy other conditions to consummation of the Merger;

— the failure of the Merger to close for any other reason;

— the pendency of the proposed Merger and the related diversion of our management’s attention from the operation of our business;

— the effect of the announcement of the Merger on our business relationships, operating results and business generally;

— the amount of the costs, fees, expenses and charges related to the Merger;

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— the ability to successfully integrate Clinton Cards and achieve the anticipated revenue and operating profits;

— the ability of the bankruptcy administration to generate sufficient proceeds from the liquidation of the remaining Clinton Cards business to repay the remaining secured debt owed to us;

— the timing and impact of expenses incurred and investments made to support new retail or product strategies, including increased marketing expenses, as well as new product introductions and achieving the desired benefits from those investments;

— expenses we may incur relating to our world headquarters project;

— the timing of investments in, together with the ability to successfully implement or achieve the desired benefits and cost savings associated with, any information systems refresh we may implement;

— the timing and impact of converting customers to a SBT model;

— the ability to achieve the desired benefits associated with our cost reduction efforts;

— Schurman Fine Papers’ ability to successfully operate its retail operations and satisfy its obligations to us;

— consumer demand for social expression products generally, shifts in consumer shopping behavior, and consumer acceptance of products as priced and marketed, including the success of new and expanded advertising and marketing efforts, such as our online efforts through Cardstore.com;

— the impact and availability of technology, including social media, on product sales;

— escalation in the cost of providing employee health care;

— the ability to comply with our debt covenants;

— fluctuations in the value of currencies in major areas where we operate, including the U.S. Dollar, Euro, UK Pound Sterling and Canadian Dollar; and

— the outcome of any legal claims, known or unknown.

Risks pertaining specifically to AG Interactive include the viability of online advertising and subscriptions as revenue generators, and the ability to adapt to rapidly changing social media.

The risks and uncertainties identified above are not the only risks we face. Additional risks and uncertainties not presently known to us or that we believe to be immaterial also may adversely affect us. Should any known or unknown risks or uncertainties develop into actual events, or underlying assumptions prove inaccurate, these developments could have material adverse effects on our business, financial condition and results of operations. For further information concerning the risks we face and issues that could materially affect our financial performance related to forward-looking statements, refer to our periodic filings with the Securities and Exchange Commission, including the “Risk Factors” section included in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended February 28, 2013.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

For further information, refer to our Annual Report on Form 10-K for the year ended February 28, 2013. There were no material changes in market risk, specifically interest rate and foreign currency exposure, for us from February 28, 2013, the end of our preceding fiscal year, to May 31, 2013, the end of our most recent fiscal quarter.

Item 4.  Controls and Procedures

American Greetings maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in its reports under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to the Corporation’s management,

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including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

American Greetings carries out a variety of on-going procedures, under the supervision and with the participation of the Corporation’s management, including its Chief Executive Officer and Chief Financial Officer, to evaluate the effectiveness of the design and operation of the Corporation’s disclosure controls and procedures. Based on the foregoing, the Chief Executive Officer and Chief Financial Officer of American Greetings concluded that the Corporation’s disclosure controls and procedures were effective as of the end of the period covered by this report.

There has been no change in the Corporation’s internal control over financial reporting during the Corporation’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Corporation’s internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1.  Legal Proceedings

Baker/Collier Litigation. American Greetings Corporation is a defendant in two putative class action lawsuits involving corporate-owned life insurance policies (the “Insurance Policies”): one filed in the Northern District of Ohio on January 11, 2012 by Theresa Baker as the personal representative of the estate of Richard Charles Wolfe (the “Baker Litigation”); and the other filed in the Northern District of Oklahoma on October 1, 2010 by Keith Collier as the personal representative of the estate of Ruthie Collier (the “Collier Litigation”).

In the Baker Litigation, the plaintiff claims that American Greetings Corporation (1) misappropriated its employees’ names and identities to benefit itself; (2) breached its fiduciary duty by using its employees’ identities and personal information to benefit itself; (3) unjustly enriched itself through the receipt of corporate-owned life insurance policy benefits, interest and investment returns; and (4) improperly received insurance policy benefits for the insurable interest in Mr. Wolfe’s life. The plaintiff seeks damages in the amount of all pecuniary benefits associated with the subject Insurance Policies, including investment returns, interest and life insurance policy benefits that American Greetings Corporation received from the deaths of the former employees whose estates form the putative class.

In the Collier Litigation, the plaintiff claims that American Greetings Corporation did not have an insurable interest when it obtained the subject Insurance Policies and wrongfully received the benefits from those policies. The plaintiff seeks damages in the amount of policy benefits received by American Greetings Corporation from the subject Insurance Policies, as well as attorney’s fees, costs and interest. On April 2, 2012, the plaintiff filed its First Amended Complaint, adding misappropriation of employee information and breach of fiduciary duty claims as well as seeking punitive damages. On April 20, 2012, American Greetings Corporation moved to transfer the Collier Litigation to the Northern District of Ohio, where the Baker Litigation is pending. On July 6, 2012, the Court granted American Greetings Corporation’s Motion to Transfer and transferred the case to the Northern District of Ohio, where the Baker Litigation is pending.

On May 22, 2013, the Court preliminarily approved a full and final settlement of all of the claims of the Wolfe and Collier estates, as well as the classes they seek to represent. As a result of the preliminary approval, the Court consolidated the two cases and certified a single class that consists of the heirs or estates of the estates and heirs of all former American Greetings Corporation employees (i) who are deceased; (ii) who were not officers or directors of American Greetings; (iii) who were insured under one of the following corporate-owned life insurance plans: Provident Life & Accident 61153, Provident Life & Accident 61159, Mutual Benefit Life Insurance Company 111, Connecticut General ENX219, and Hartford Life Insurance Company 361; and (iv) for whom American Greetings has received a death benefit on or before the date on which the Court enters the Order of Preliminary Approval. Required notices to potential class members and to state attorney generals as required under the Class Action Fairness Act of 2005 were mailed May 30, 2013. The Court will entertain final approval of the settlement on September 20, 2013. If the settlement is finally approved by the Court, American Greetings Corporation will deposit $12.5 million into a settlement fund to be distributed in its entirety to those members of the class who present valid claims, their counsel, and a settlement administration vendor.

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Carter/Wolfe/LMPERS Litigation. On September 26, 2012, the Corporation announced that the Board of Directors had received the Going Private Proposal. On September 27, 2012, Dolores Carter, a purported shareholder, filed a putative shareholder derivative and class action lawsuit (the “Carter Action”) in the Court of Common Pleas in Cuyahoga County, Ohio (the “Cuyahoga County Court”), against American Greetings Corporation and all of the members of the Board of Directors (“Carter Defendants”). The Carter Action alleges, among other things, that the directors of the Corporation breached their fiduciary duties owed to shareholders in evaluating and pursuing the proposal. The Carter Action further alleges claims for aiding and abetting breaches of fiduciary duty. Among other things, the Carter Action seeks declaratory relief. Subsequently, six more lawsuits were filed in the Cuyahoga County Court purporting to advance substantially similar claims on behalf of American Greetings against the members of the Board of Directors and, in certain cases, additional direct claims against American Greetings. One lawsuit was voluntarily dismissed. The other lawsuits, which remain pending, were consolidated by Judge Richard J. McMonagle on December 6, 2012 (amended order dated December 18, 2012) as In re American Greetings Corp. Shareholder Litigation, Lead Case No. CV 12 792421. lead plaintiffs and lead plaintiffs’ counsel also were appointed.

On April 30, 2013, lead plaintiffs’ counsel also filed a Consolidated Class Action Complaint. The Consolidated Complaint brings a single class claim against the members of the Corporation’s Board of Directors for alleged breaches of fiduciary duty and aiding and abetting. The plaintiffs allege that the preliminary proxy statement on Schedule 14A filed with the SEC on April 17, 2013 omits information necessary to permit the Corporation’s shareholders to determine if the Merger is in their best interest, that the controlling shareholders have abused their control of the Corporation, that the special committee appointed to oversee the transaction is not independent, and that the other members of the Board of Directors are also not independent. On June 13, 2013, defendants filed motions to dismiss the Consolidated Class Action Complaint based on plaintiffs’ failure to properly plead their claims as derivative actions, exercise their statutory appraisal rights as the sole remedy for dissatisfaction with the proposed share price, and to overcome the business judgment rule with respect to their breach of fiduciary duty claims. The motions remain pending.

On November 6, 2012, R. David Wolfe, a purported shareholder, filed a putative class action (the “Wolfe Action”) in the United States District Court for the Northern District of Ohio (the “Federal Court”) against certain members of the Weiss Family and the Irving I. Stone Oversight Trust, the Irving Stone Limited Liability Company, the Irving I. Stone Support Foundation, and the Irving I. Stone Foundation (“Stone Entities”) alleging breach of fiduciary duties in proposing and pursuing the proposal, as well as against American Greetings, seeking, among other things, declaratory relief. Shortly thereafter, on November 9, 2012, the Louisiana Municipal Police Employees’ Retirement System also filed a purported class action in the Federal Court (the “LMPERS Action”) asserting substantially similar claims against the same defendants and seeking substantially similar relief.

On November 30, 2012, plaintiffs in the Wolfe and LMPERS Actions filed motions (1) to consolidate the Wolfe and LMPERS Actions, (2) for appointment as co-lead plaintiffs, (3) for appointment of co-lead counsel, and, in the Wolfe Action only, (4) for partial summary judgment. On December 14, 2012, the Corporation filed its oppositions to the motions (a) to consolidate the Wolfe and LMPERS Actions, (b) for appointment as co-lead plaintiffs, and (c) for appointment of co-lead counsel. On the same day, the Corporation also moved to dismiss both the Wolfe and LMPERS Actions. The Corporation answered both complaints on January 8, 2013, and on January 11, 2013, it filed its opposition to the motion for partial summary judgment. On February 14, 2013, the Federal Court dismissed both the Wolfe and LMPERS Actions for lack of subject matter jurisdiction. On March 15, 2013, plaintiffs in both the Wolfe and LMPERS Actions filed notices of appeal with the Sixth Circuit Court of Appeals. On April 18, 2013, plaintiff Wolfe moved to dismiss his appeal, which motion was granted on April 19, 2013. On May 8, 2013, plaintiff LMPERS’ moved to dismiss its appeal as well, which motion was granted.

Plaintiffs in the Wolfe and LMPERS Actions alleged, in part, that Article Seventh of the Corporation’s articles of incorporation prohibited the special committee from, among other things, evaluating the merger. The Corporation considered these allegations and concluded that the Article is co-extensive with Ohio law and thus allows the Corporation to engage in any activity authorized by Ohio law. The Corporation also has consistently construed Article Seventh as permitting directors to approve a transaction so long as they are both disinterested and independent.

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On April 17, 2013, R. David Wolfe filed a new derivative and putative class action (“Wolfe Action II”) in the United States District Court for the Northern District of Ohio against the Corporation’s directors, certain members of the Weiss Family, and the Stone Entities, as well as the Corporation as a nominal defendant, challenging the merger as financially and procedurally unfair to the Corporation and its minority shareholders. Mr. Wolfe subsequently filed an Amended Complaint on April 29, 2013. The Wolfe Action II seeks a declaratory judgment that Article Seventh precludes the Board of Directors and special committee from approving the Merger. In addition, the Wolfe Action II includes a derivative claim for breach of fiduciary duty against the Corporation’s directors for allegedly violating Article Seventh. Finally, the Wolfe Action II includes both a derivative and class action claim for breach of fiduciary duty against the Weiss Family defendants and the Stone Entities for allegedly seeking to acquire the minority shareholders’ interests at an unfair price. Defendants filed their Motions to Dismiss the Wolfe Action II Amended Complaint on July 8, 2013.

Management does not believe, based on currently available information, that the outcomes of the proceedings described above will have a material adverse effect on the Corporation’s financial condition, though the outcomes could be material to the Corporation’s operating results for any particular period, depending, in part, upon the operating results for such period.

In addition to the foregoing, we are involved in various judicial, administrative, regulatory and arbitration proceedings concerning matters arising in the ordinary course of business operations, including, but not limited to, employment, commercial disputes and other contractual matters. We, however, do not believe that any of the other litigation in which we are currently engaged, either individually or in the aggregate, will have a material adverse effect on our business, consolidated financial position or results of operations.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

We did not purchase any equity securities in the three months ended May 31, 2013.

On July 24, 2012, American Greetings announced that its Board of Directors authorized a program to repurchase up to $75 million of its Class A common shares. Under this program, the share repurchases may be made through open market purchases or privately negotiated transactions as market conditions warrant, at prices the Corporation deems appropriate, and subject to applicable legal requirements and other factors. There is no set expiration date for this program; however, purchases under this program have been suspended due to the Going Private Proposal referred to in Note 18, “Proposal by Members of the Weiss Family and Related Entities to Acquire the Corporation,” to the Consolidated Financial Statements.

In addition, pursuant to our Amended and Restated Articles of Incorporation, a holder of Class B common shares may not transfer such Class B common shares (except to permitted transferees, a group that generally includes members of the holder’s extended family, family trusts and charities) unless such holder first offers such shares to the Corporation for purchase at the most recent closing price for the Corporation’s Class A common shares. If the Corporation does not purchase such Class B common shares, the holder must convert such shares, on a share for share basis, into Class A common shares prior to any transfer. It was the Corporation’s general policy to repurchase Class B common shares in accordance with the terms set forth in our Amended and Restated Articles of Incorporation, whenever they are offered by a holder, unless such repurchase is not otherwise permitted under agreements to which the Corporation is a party; however, repurchases of Class B common shares were suspended following our receipt of the Going Private Proposal.

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Item 6.  Exhibits

Exhibits required by Item 601 of Regulation S-K

Exhibit   Number	Description
10.1	Executive Annual Incentive Plan (Fiscal Year 2014 Description).
31 (a)	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31 (b)	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	The following materials from the Corporation’s quarterly report on Form 10-Q for the quarter ended May 31, 2013, formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Statement of Income for the quarters ended May 31, 2013 and May 25, 2012, (ii) Consolidated Statement of Comprehensive Income (Loss) for the quarters ended May 31, 2013 and May 25, 2012, (iii) Consolidated Statement of Financial Position at May 31, 2013, February 28, 2013 and May 25, 2012, (iv) Consolidated Statement of Cash Flows for the quarters ended May 31, 2013 and May 25, 2012, and (v) Notes to the Consolidated Financial Statements for the quarter ended May 31, 2013.
	In accordance with Rule 406T of Regulation S-T, the XBRL related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be part of any registration statement or other document filed under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

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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 thereunto duly authorized.

AMERICAN GREETINGS CORPORATION
	By:	/s/ Robert D. Tyler
		Robert D. Tyler
		Corporate Controller and
		Chief Accounting Officer *

July 10, 2013

* (Signing on behalf of Registrant as a duly authorized officer of the Registrant and signing as the chief accounting officer of the Registrant.)

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EX-10.1

Exhibit 10.1

Rewards for Your Contributions to Our Success Executive Incentive Plan • Fiscal Year 2014

Creativity Innovation Collaboration Our commitment to these ideals has allowed us to become one of the world’s largest publicly owned developers, producers and distributors of social expressions products. As a leader at American Greetings, you have a unique opportunity to focus our associates on these key areas and to cultivate a work environment that is stimulating, productive and rewarding. In addition, the decisions you make and the things you do every day have a direct and meaningful impact both within your department and across the company. We have designed the Executive Incentive Plan to reward you for the critical role you play. As a leader, you help foster and channel your energy and the energy of those around you into building on our business principles, strengthening our marketplace position and generating value for our shareholders. Table of Contents Plan Objectives and Who is Eligible. .2 How the Plan Works.3 Emphasis of Each Plan Component.4 Measuring Performance. .5 Corporate Component.6 Individual Component. .8 Example Calculation. .9 Important Administrative Plan Details11 Key Terms. 12 1

Plan Objectives Who Is Eligible •Focuses on shareholder value and profitable revenue You are eligible to participate in the Plan if you are a Senior growth | Our shareholders expect us to evaluate our Executive Officer (Chairman, CEO, President and COO, results in the same way they do Corporate-level Senior Vice Presidents) or a Section 16 Executive Officer, or other officers as approved by the •Emphasizes team work and mutual cooperation | CEO and COO. Our success depends on the collaborative effort within each of our business units Refer to the sections entitled Important Administrative Plan Details and Key Terms for additional details •Demonstrates the importance of personal drive and on eligibility for participation in the Plan. Commitment to quality | Individual contributions are the foundation of our collective accomplishments •Rewards leaders for success | Award opportunity is greatest when attention is given to the achievement of objectives in each of the two performance areas Watch for Your Participant Letter You will receive a Participant Letter that outlines information specific to your participation in the Plan: • Your total target award 2

How the Plan Works E X A M P L E The Plan provides a cash award for the achievement of goals in two key performance areas measured over a 12-month fiscal year. Success in these key areas helps American If base earnings are $200,000 Greetings create shareholder value and ensure profitable growth over the long term. and target award percentage Your Award Opportunity is 70% of base earnings, Your total target award is established at the beginning of each fiscal year and will be communicated total target award is $140,000. to you at that time. Your total target award is: Base Earnings ($200,000) x • A percentage of your base earnings based on your job level • The award you would earn if each goal is achieved in each performance area Target Award%(70%) The amount of the award you receive will increase or decrease based on actual performance in these two key areas: = Target Award ($140,000) Corporate Individual Performance Performance American Greetings will establish goals at the beginning of each fiscal year: •Corporate goals are developed by management and approved by the Board of Directors. • Individual performance goals are established through the Performance Management Process. At the end of the fiscal year, American Greetings determines the extent to which each goal has been met. 3

Emphasis of Each Plan Component For all plan participants, the corporate component is 80% of your total target award. The individual component is 20% of your total target award. C O M P O N E N T W E I G H T I N G S Corporate Individual 80% 20% E X A M P L E Dan: $112,000 = Corporate • Senior Vice President ($140,000 x 80%) • $200,000 base earnings $28,000 = Individual • $140,000 total target ($140,000 x 20%) award (70% of base earnings) 4

Measuring Performance Performance Multiplier — How It’s Used in the Award Scale When results for the fiscal year are final, the company assesses achievement of goals in each performance area. Performance in each area will determine your actual Plan award. Performance multipliers are another way to think about the award scale. There is a relationship between performance Individual Total and your actual award. Corporate Performance Award For example, there is a 4:1 Performance + = multiplier for the Corporate EPS measure. This means that for every 1% increase or decrease in Awards for the corporate component is based on the financial performance award scale. the percentage of goal achieved, Individual awards are based on your performance rating. the Corporate EPS target award will be adjusted up or down by 4% to determine the actual award. Financial Performance Award Scale Performance Actual Award Your actual award is based on fiscal year-end performance results using the award scale shown at right for corporate financial measures. (See Performance Measures table on page 6 Above Goal MAXIMUM 200% of Target for details.) To earn an award, performance in each area must at least reach threshold. There is no award for below-threshold performance. Goal GOAL 100% of Target Achieving goal means American Greetings pays awards at target levels. Performance above goal will result in an Below Goal THRESHOLD 32% of Target increased award up to a maximum level. Below Threshold 0% of Target The award range for the corporate financial (No Award measures is 0%-200% of target award. Below Threshold) 5

Corporate Component The corporate component consists of two parts: Performance Measures METRIC WHY IT’S IMPORTANT • Corporate Earnings per Share (EPS) Corporate Earnings EPS shows how much profit was generated on a per share • Corporate Total Revenue (Total Revenue) per Share(EPS) basis. It communicates to the investment community the power the company has to make money. The higher our EPS, the greater value the company is able to provide its Each of these parts is weighted. The Plan is designed shareholders. to emphasize the importance of our leaders’ abilities to influence EPS, while paying attention to how they can Corporate When investing in a company, an investor wants to see it affect Total Revenue. The weighting applied to the total Total Revenue grow or improve over time. Management sets a Corporate target award for the corporate component is: (Total Revenue) Total Revenue goal each year to keep activities focused on growing the business year-over-year. • 80% for EPS Refer to the section entitled Key Terms for definitions of these financial measures. • 20% for Total Revenue The potential award under the corporate component EPS and Total Revenue Goal Is a Range ranges from 0% to 200% of target award. Performance The EPS and Total Revenue portion of the corporate component has a goal defined has a direct impact on actual award. For every 1% as a range. That’s because American Greetings believes we have met our EPS and increase or decrease in the percentage of goal achieved: Total Revenue objectives if we perform between 97% and 103% of goal. • EPS target award will be adjusted up or down by 4% to determine the actual award for this part of the corporate component. (Total EPS goal is defined as a range between 97% and 103% of goal). • Total Revenue target award will be adjusted up or down by 4% to determine the actual award (Total Revenue goal is defined as a range between 97% and 103% of goal). Notwithstanding the foregoing, or anything contained herein to the contrary, in the event of the closing of the merger referenced in the Agreement and Plan of Merger, dated March 29, 2013, to which American Greetings is a party, American Greetings reserves the right to approve and implement any modifications to the plan that it deems necessary or appropriate in order to take into account the resulting change in the business, ownership and corporate structure of American Greetings. 6

C O R P O R A T E E P S AwardScale Performance Actual Award Actual Award Corporate Component (4:1) as % of Goal as a % of Target in Dollars Maximum 128% 200% $179,200 120.5% 170% $152,320 113% 140% $125,440 E X A M P L E Goal 97%–103% 100% $89,600 92% 80% $71,680 Dan, Senior Vice President Threshold 80% 32% $28,672 $140,000 total target award H O W I T ’ S C A L C U L A T E D •$112,000corporatecomponent The formula to calculate your actual award as a percent of target is: (Actual Performance–Goal)x4+90% = Actual Award as a % of Target Award (80% of total target award) Performance Above Goal: (105%—103%) x 4 + 100% = 108% of Target Award • $89,600CorporateEPS Performance Below Goal: (95%—97%) x 4 + 100% = 92% of Target Award (80% of total corporate component) • C O R P O R A T E T O T A L R E V E N U E $22,400CorporateTotalRevenue Award Scale Performance Actual Award Actual Award (20% of total corporate component) (4:1) as % of Goal as a % of Target in Dollars Maximum 128% 200% $44,800 120.5% 170% $38,080 113% 140% $31,360 Goal 97%–103% 100% $22,400 92% 80% $17,920 Threshold 80% 32% $7,168 Corporate Performance Threshold H O W I T ’ S C A L C U L A T E D Each part of the corporate component The formula to calculate your actual award as a percent of target is: (Actual Performance–Goal)x4+100%= Actual Award as a % of Target Award has its own performance threshold: Performance Above Goal: (105%—103%) x 4 + 100% = 108% of Target Award Performance Below Goal: (95%—97%) x 4 + 100% = 92% of Target Award • EPS: 80% of goal • Total Revenue: 80% of goal DAN’S ACTUAL AWARD FOR CORPORATE COMPONENT The performance threshold must be met to earn an • EPS Actual Performance: 113% of goal = actual award of 140% of target ($125,440) actual award for that measure. Additionally, if the • Total Revenue Actual Performance: 92% of goal = actual award of 80% of target ($17,920) Corporate EPS threshold is not met, then Corporate TotalAward:$125,440+$17,920=$143,360 Total Revenue will not be paid 7

Individual Component E X A M P L E Your award under the individual component is based on your performance rating under Dan, Senior Vice President the performance management process. Based on your performance rating, you will receive 0% to 200% of your target award, as shown in the chart below. $140,000 total target award •$28,000individualcomponent (20%oftotaltargetaward) Actual Award Performance Rating as a % of Target •Individual Actual Performance: Above Target Exceeds Expectations (Manager Discretion) 150% -200% Exceeds Expectations 100% -150% Meets Expectations 50%—100% Individual Target Award $ 28,000 Improvement Expected/Performance Below Peer Level 0% x Actual Award as a % of Target x 100% Individual Performance Participants who receive an “Improvement Expected” rating will not receive an individual Actual Award $28,000 performance incentive and will only receive 50% of any incentive otherwise earned under the corporate components. If Corporate EPS performance is below threshold, associates with a performance rating of “Exceeds Expectations” will receive an award for the individual performance component as shown in the chart above. Individuals with a “Meets Expectations” or “Improvement Expected/Below Peer Level” performance rating will not receive any portion of the individual performance incentive if Corporate EPS performance is below threshold. 8

Example Calculation Here is an example of how your actual award is determined. EXAMPLE $28,000=Individual Target Dan, Senior Vice President ($140,000 x 20%) $112,000=Corporate Target Individual Performance Base Earnings: $200,000 ($140,000 x 80%) Individual Performance Rating • $89,600 EPS Total Target Award: $140,000 • $22,400 Total Revenue (70% of base earnings) Corporate Goal • $1.25 Corporate EPS • $1.7 Billion Corporate Total Revenue A C T U A L P E R F O R M A N C E The chart below outlines the performance goals and actual performance in the three categories — American Greetings corporate component and Ben’s individual performance. To illustrate how awards Performance Performance and Award Results are calculated, examples of Component and Measure Goal Actual Performance Performance Award as a performance goals are as a % of Goal* % of Target provided in this brochure. Corporate Component Performance is included in the examples to calculate Corporate EPS $1.25 per share $1.41 per share 113% 140% example awards. These are Corporate Total Revenue $1.5 Billion $1.375 Billion 92% 80% examples only; performance Individual Component goals will be different and may be higher or lower than Individual Performance Rating Meets Expectations Meets Expectations N/A 100% the examples provided. * Goal is a range from 97%—103% of the target goal reflected above. 9

Dan’s Total Award Example: Here’s a look at Dan’s total award based on the performance shown on the previous page. $160,000 120,000 C O R P O R AT E C O M P O N E N T 80,000 Target Award x Award as % of Target = Actual Award $143,360 Corporate EPS $112,000 $89,600 x 140% = $125,440 40,000 Corporate Total Revenue $22,400 x 80% = $17,920 Total =$143,360 20,000 $28,000 $28,000 I N D I V I D U A L C O M P O N E N T Target Award x Award as % of Target = Actual Award 0 $28,000 x 100% = $28,000 Total Target Award $140,000 TotalActualAward$171,360 10

Important Administrative Plan Details If your employment status changes, your Plan participation and any payouts may be affected as described below: New Hires Leave of Absence, Incentive Award Omnibus Incentive If you are hired during the Plan Disability, Death Incentive awards earned in fiscal year Compensation Plan year — defined as the American If you take a leave of absence, suffer 2014 will be paid to participants within The Executive Incentive Plan Greetings fiscal year ending February a permanent disability or die, your two and one-half months following the is governed by the American 28, 2014 — and are eligible to actual award will be prorated to the end of fiscal 2014, typically within 60 Greetings Corporation 2007 participate in the Executive Incentive nearest full month based on the actual days after the end of the fiscal year. Omnibus Incentive Compensation Plan, you will receive a prorated period you participated in the Plan Plan awards are subject to normal tax Plan, as such plan may be incentive award based on the period during the year. withholding at a standardized rate and amended from time to time. In of time you participated in the Plan will be deposited to a bank account of the event of a conflict between the and your base earnings during An associate will be deemed to your choice. Executive Incentive Plan and the that time. suffer a permanent disability only Omnibus Incentive Compensation in the following circumstances: (A) It is the intent that incentive awards Plan, the terms of the Omnibus Promotions and Transfers where an associate is absent from fall under the short-term deferral Incentive Compensation Plan will If you are promoted during the employment with American Greetings rules of Section 409A of the Internal govern. Plan year, your individual target due to his or her inability to engage Revenue Code to exempt the award, and base earnings, may in any substantial gainful activity by payment of such Executive Incentive Questions change. If any of these do change, reason of any medically determinable Plan benefits from the requirements If you have questions about the your award will be calculated based physical or mental impairment, which of Section 409A. Executive Incentive Plan and how on the targets, base earnings, plan either can be expected to result in it works, please contact your provisions and actual performance death, or can be expected to last for Calculating Payouts manager. Your manager will work on a prorated basis and rounded to a continuous period of not less than For computation purposes, financial with you to ensure you understand the nearest full month. 12 months; or (B) where an associate goals and actual performance results the Plan so you can maximize your is scheduled to receive income are rounded to the nearest $1,000. annual award. Termination or Retirement replacement benefits for a period The percent of the financial goal If you voluntarily or involuntarily of not less than 3 months under an achieved and the percent of target leave American Greetings, including accident and health plan covering award earned is rounded to the for reason of retirement, before the an American Greetings associate on nearest one-tenth of one percent. The completion of the Plan year, you will account of a medically determinable actual incentive award is rounded to forfeit your Executive Incentive Plan physical or mental impairment that the nearest dollar. award for that fiscal year. can be expected to result in death or last for a continuous period of not less than 12 months. 11

Key Terms The following provides definitions of some common terms used throughout this brochure. Capitalized terms used herein that are not defined will have the meaning set forth in the Omnibus Incentive Compensation Plan. •Base Earnings. Your base •Corporate Total Revenue. earnings are defined as your Consolidated corporate net base salary earned during the sales and other revenues, fiscal year. Base earnings including but not limited exclude health and welfare to royalties, advertising, benefits, bonus, commission, subscriptions and other and incentive payments, revenue streams directly overtime and other direct or related to the conduct of our indirect compensation. Base principal business. earnings for Plan participants outside of the U.S. may be •Eligibility. You are eligible to defined differently and may participate in the Executive vary by country. Incentive Plan if you are a •Corporate Earnings Per Senior Executive (Chairman, Share(EPS). Corporate CEO, President and COO, Corporate-level Senior Vice earnings per share is Presidents) or other Section measured at the end 16 Executive Officer. of the fiscal year and is calculated as corporate net •Fiscal Year. March 1 through income divided by the total February 28 or 29 of the number of planned shares following calendar year. outstanding as calculated on a fully diluted basis. 12

Nothing in this brochure or in any Participant Letter should be construed to create or imply any contract of employment between an associate and American Greetings and its subsidiaries or to create any binding contractual right to payment of any specific amount under the American Greetings Executive Incentive Plan. The provisions of this brochure describe the general guidelines used by American Greetings in determining the benefits payable to Plan participants; however, in every case, American Greetings reserves the right to reduce or eliminate the amount that would otherwise be payable to a participant or participants under such guidelines where it determines, in its discretion, that such a reduction is necessary or appropriate, in light of the participant’s performance or other relevant business circumstances. Any award earned under this Executive Incentive Plan shall be subject to rescission, cancellation or recoupment, in whole or part, if and to the extent so provided under any “clawback” or similar policy of American Greetings in effect on the date of payment or that may be established thereafter, including, without limitation, any “clawback” or recoupment policy of American Greetings as may be adopted by American Greetings from time to time as required by Section 304 of the Sarbanes-Oxley Act of 2002, Section 954 of the Wall Street Reform and Consumer Protection Act, or as otherwise required by applicable law. American Greetings reserves the right to terminate or make changes to the Program, including retroactively, at any time without prior notice to any of the Program’s participants (provided that no amendment to the Program adopted more than 90 days after the beginning of the applicable fiscal year may have the effect of increasing the amount that is or could be payable under the guidelines set forth herein for such fiscal year to any participant who is a “covered employee” of American Greetings as defined in section 162(m)(3) of the Internal Revenue Code). The Board of Directors (or committee thereof) are the only persons who have the authority to alter or amend this Program. Any such alteration or amendment must be done in writing. No participant should rely on an alteration or amendment to this Program unless it is made in writing and signed by the Chief Executive Officer or the Chairman. 13

Notes 14

Notes 15

EX-31.(A)

Exhibit 31 (a)

Certification of Chief Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Zev Weiss, certify that:

1. I have reviewed this quarterly report on Form 10-Q of American Greetings Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of American Greetings Corporation as of, and for, the periods presented in this report;

4. American Greetings Corporation’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for American Greetings Corporation and have:

  a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to American Greetings Corporation, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

  b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

  c) Evaluated the effectiveness of American Greetings Corporation’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

  d) Disclosed in this report any change in American Greetings Corporation’s internal control over financial reporting that occurred during American Greetings Corporation’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, American Greetings Corporation’s internal control over financial reporting; and

5. American Greetings Corporation’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to American Greetings Corporation’s auditors and the audit committee of American Greetings Corporation’s board of directors:

  a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect American Greetings Corporation’s ability to record, process, summarize and report financial information; and

  b) Any fraud, whether or not material, that involves management or other employees who have a significant role in American Greetings Corporation’s internal control over financial reporting.

July 10, 2013	/s/ Zev Weiss
	Zev Weiss
	Chief Executive Officer (principal executive officer)

EX-31.(B)

Exhibit 31 (b)

Certification of Chief Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Stephen J. Smith, certify that:

1. I have reviewed this quarterly report on Form 10-Q of American Greetings Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of American Greetings Corporation as of, and for, the periods presented in this report;

4. American Greetings Corporation’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for American Greetings Corporation and have:

  a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to American Greetings Corporation, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

  b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

  c) Evaluated the effectiveness of American Greetings Corporation’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

  d) Disclosed in this report any change in American Greetings Corporation’s internal control over financial reporting that occurred during American Greetings Corporation’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, American Greetings Corporation’s internal control over financial reporting; and

5. American Greetings Corporation’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to American Greetings Corporation’s auditors and the audit committee of American Greetings Corporation’s board of directors:

  a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect American Greetings Corporation’s ability to record, process, summarize and report financial information; and

  b) Any fraud, whether or not material, that involves management or other employees who have a significant role in American Greetings Corporation’s internal control over financial reporting.

July 10, 2013	/s/ Stephen J. Smith
	Stephen J. Smith
	Senior Vice President and
	Chief Financial Officer (principal financial officer)

EX-32

Exhibit 32

Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with this quarterly report of American Greetings Corporation on Form 10-Q as filed with the Securities and Exchange Commission on the date therein specified (the “Report”), each of the undersigned certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of American Greetings Corporation.

July 10, 2013

/s/ Zev Weiss

Zev Weiss

Chief Executive Officer (principal executive officer)

/s/ Stephen J. Smith

Stephen J. Smith

Senior Vice President and

Chief Financial Officer (principal financial officer)

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Debt

3 Months Ended

May 31, 2013

Debt Disclosure [Abstract]

Debt

Note 12 – Debt

As of May 31, 2013, the Corporation was a party to a $400 million senior secured credit agreement (the “Credit Agreement”), under which there was $35.1 million and $61.2 million borrowings outstanding as of May 31, 2013 and February 28, 2013, respectively. There were no borrowings under the Credit Agreement as of May 25, 2012. The Corporation is also a party to an accounts receivable facility that provides funding of up to $50 million, under which there were no borrowings outstanding as of May 31, 2013, February 28, 2013 and May 25, 2012, respectively. The Corporation had, in the aggregate, $27.5 million outstanding under letters of credit under these borrowing agreements, which reduces the total credit available to the Corporation thereunder.

There was no debt due within one year as of May 31, 2013, February 28, 2013 and May 25, 2012, respectively.

Long-term debt and their related calendar year due dates as of May 31, 2013, February 28, 2013 and May 25, 2012, respectively, were as follows:

(In thousands)	May 31, 2013		February 28, 2013		May 25, 2012
7.375% senior notes, due 2021		$225,000		$225,000		$225,000
Revolving credit facility, due 2017		35,100		61,200		-
6.10% senior notes, due 2028		181		181		181
		$260,281		$286,381		$225,181

The total fair value of the Corporation’s publicly traded debt, which was considered a Level 1 valuation as it was based on quoted market prices, was $227.4 million (at a carrying value of $225.2 million), $233.6 million (at a carrying value of $225.2 million) and $229.1 million (at a carrying value of $225.2 million) at May 31, 2013, February 28, 2013 and May 25, 2012, respectively.

The total fair value of the Corporation’s non-publicly traded debt, which was considered a Level 2 valuation as it was based on comparable privately traded debt prices, was $35.1 million (at a carrying value of $35.1 million) and $61.2 million (at a carrying value of $61.2 million) at May 31, 2013 and February 28, 2013, respectively.

At May 31, 2013, the Corporation was in compliance with the financial covenants under its borrowing agreements.

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Inventories - Schedule of Inventories (Detail) (USD $) In Thousands, unless otherwise specified	May 31, 2013	Feb. 28, 2013	May 25, 2012
Inventory Disclosure [Abstract]
Raw materials	$ 25,187	$ 21,303	$ 18,290
Work in process	12,843	6,683	13,070
Finished products	265,262	278,573	243,951
Gross inventory	303,292	306,559	275,311
Less LIFO reserve	84,252	84,166	82,192
Inventory net of last in first out reserve	219,040	222,393	193,119
Display materials and factory supplies	18,784	20,054	21,469
Net inventory	$ 237,824	$ 242,447	$ 214,588

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CONSOLIDATED STATEMENT OF FINANCIAL POSITION (USD $) In Thousands, unless otherwise specified	May 31, 2013	Feb. 28, 2013	May 25, 2012
Current assets
Cash and cash equivalents	$ 63,997	$ 86,059	$ 60,180
Trade accounts receivable, net	122,303	105,497	97,657
Inventories	237,824	242,447	214,588
Deferred and refundable income taxes	59,181	72,560	63,910
Prepaid expenses and other	150,779	155,343	110,482
Total current assets	634,084	661,906	546,817
Other assets	449,770	456,751	530,452
Deferred and refundable income taxes	88,920	92,354	118,385
Property, plant and equipment - at cost	834,272	821,759	738,081
Less accumulated depreciation	459,192	449,307	445,264
Property, plant and equipment - net	375,080	372,452	292,817
Total assets	1,547,854	1,583,463	1,488,471
Current liabilities
Accounts payable	111,180	119,777	99,872
Accrued liabilities	82,171	80,098	62,610
Accrued compensation and benefits	34,942	69,309	40,582
Income taxes payable	4,952	4,968	11,007
Deferred revenue	31,872	31,851	34,351
Other current liabilities	64,585	62,593	48,395
Total current liabilities	329,702	368,596	296,817
Long-term debt	260,281	286,381	225,181
Other liabilities	225,101	225,044	265,294
Deferred income taxes and noncurrent income taxes payable	21,730	21,565	21,745
Shareholders' equity
Capital in excess of par value	525,234	522,425	513,917
Treasury stock	(1,093,407)	(1,093,782)	(1,060,244)
Accumulated other comprehensive loss	(18,910)	(17,133)	(19,755)
Retained earnings	1,265,813	1,238,396	1,211,320
Total shareholders' equity	711,040	681,877	679,434
Total liabilities and stockholders equity	1,547,854	1,583,463	1,488,471
Common shares Class A [Member]
Shareholders' equity
Common shares	29,398	29,088	31,336
Common shares Class B [Member]
Shareholders' equity
Common shares	$ 2,912	$ 2,883	$ 2,860

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Royalty Revenue and Related Expenses

3 Months Ended

May 31, 2013

Text Block [Abstract]

Royalty Revenue and Related Expenses

Note 5 – Royalty Revenue and Related Expenses

The Corporation has agreements for licensing the Care Bears and Strawberry Shortcake characters and other intellectual property. These license agreements provide for royalty revenue to the Corporation, which is recorded in “Other revenue” on the Consolidated Statement of Income. These license agreements may include the receipt of upfront advances, which are recorded as deferred revenue and earned during the period of the agreement. Revenues and expenses associated with the servicing of these agreements, primarily relating to the licensing activities included in non-reportable segments, are summarized as follows:

	Three Months Ended
(In thousands)	May 31, 2013		May 25, 2012
Royalty revenue		$ 6,506		$ 3,729
Royalty expenses
Material, labor and other production costs		$ 1,947		$ 2,328
Selling, distribution and marketing expenses		1,248		656
Administrative and general expenses		460		422
		$ 3,655		$ 3,406
In addition to the expenses disclosed above, during the three months ended May 25, 2012 the Corporation incurred charges of $2.1 million associated with our licensing business. See Note 6 for further information.

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Recent Accounting Pronouncements (Policies)

3 Months Ended

May 31, 2013

Accounting Changes And Error Corrections [Abstract]

Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income

In February 2013, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2013-02 (“ASU 2013-02”), “Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income.” ASU 2013-02 requires entities to disclose additional information about changes in other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income and the income statement line items affected. The provisions of this guidance are effective prospectively for annual and interim periods beginning after December 15, 2012. The Corporation adopted this standard on March 1, 2013. See Note 7 for further information.

Testing Indefinite-Lived Intangible Assets for Impairment

In July 2012, the FASB issued ASU No. 2012-02 (“ASU 2012-02”), “Testing Indefinite-Lived Intangible Assets for Impairment.” ASU 2012-02 gives entities an option to first assess qualitative factors to determine whether the existence of events and circumstances indicate that it is more likely than not that an indefinite-lived intangible asset is impaired. If based on its qualitative assessment an entity concludes that it is more likely than not that the fair value of an indefinite-lived intangible asset is less than its carrying amount, quantitative impairment testing is required. However, if an entity concludes otherwise, quantitative impairment testing is not required. ASU 2012-02 is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. The Corporation adopted this standard on March 1, 2013. The adoption of this standard did not have a material effect on the Corporation’s financial statements.

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Proposal by Members of the Weiss Family and Related Entities to Acquire the Corporation - Additional Information (Detail) (Subsequent Event [Member], USD $)	1 Months Ended
	Mar. 29, 2013
Subsequent Event [Member]
Pending Status of Going Private Transaction [Line Items]
Outstanding Class A and Class B common shares, price per share	$ 19.00

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Deferred Costs - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	May 31, 2013	Feb. 28, 2013	May 25, 2012
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract]
Allowance for deferred costs related to supply agreements	$ 7.2	$ 7.9	$ 9.2

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Retirement Benefits

3 Months Ended

May 31, 2013

Compensation And Retirement Disclosure [Abstract]

Retirement Benefits

Note 13 – Retirement Benefits

The components of periodic benefit cost for the Corporation’s defined benefit pension and postretirement benefits plans are as follows:

	Defined Benefit Pension				Postretirement Benefits
	Three Months Ended				Three Months Ended
(In thousands)	May 31, 2013		May 25, 2012		May 31, 2013		May 25, 2012
Service cost		$     320		$    334		$   138		$   213
Interest cost		1,742		1,844		613		800
Expected return on plan assets		(1,574)		(1,613)		(763)		(840)
Amortization of prior service cost (credit)		51		61		(325)		(519)
Amortization of actuarial loss (gain)		917		816		(213)		-
		$  1,456		$ 1,442		$ (550)		$ (346)

The Corporation has a discretionary profit-sharing plan with a 401(k) provision covering most of its United States employees. The profit-sharing plan expense for the three months ended May 31, 2013 was $4.0 million, compared to $3.0 million in the prior year period. The Corporation also matches a portion of 401(k) employee contributions. The expense recognized for the 401(k) match was $1.3 million in each of the three months ended May 31, 2013 and May 25, 2012. The profit-sharing plan and 401(k) matching expenses for the three month periods are estimates as actual contributions are determined after fiscal year-end.

At May 31, 2013, February 28, 2013 and May 25, 2012, the liability for postretirement benefits other than pensions was $16.8 million, $15.7 million and $26.2 million, respectively, and is included in “Other liabilities” on the Consolidated Statement of Financial Position. At May 31, 2013, February 28, 2013 and May 25, 2012, the long-term liability for pension benefits was $81.2 million, $81.4 million and $75.6 million, respectively, and is included in “Other liabilities” on the Consolidated Statement of Financial Position.

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Accumulated Other Comprehensive Loss - Reclassifications Out of Accumulated Other Comprehensive Income (Loss) (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	May 31, 2013	May 25, 2012
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Income before income tax expense	$ 52,546	$ 10,420
Tax benefit	(19,153)	(3,170)
Total, net of tax	(377)	(475)
Total reclassifications	(334)
Pensions and Other Postretirement Benefits [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Total reclassifications	(334)
Reclassification out of Accumulated Other Comprehensive Income [Member] | Pensions and Other Postretirement Benefits [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Actuarial losses, net	(704)
Prior service cost	274
Income before income tax expense	(430)
Tax benefit	96
Total, net of tax	(334)
Total reclassifications	$ (334)

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Debt - Additional Information (Detail) (USD $)	May 31, 2013	Feb. 28, 2013	May 25, 2012
Debt Disclosure [Line Items]
Carrying value of Corporations traded debt	$ 260,281,000	$ 286,381,000	$ 225,181,000
Letters of credit outstanding	27,500,000
Non Publicly Traded [Member]
Debt Disclosure [Line Items]
Carrying value of Corporations traded debt	35,100,000	61,200,000
Fair value of Corporations publicly and non-publicly traded debt	35,100,000	61,200,000
Publicly Traded [Member]
Debt Disclosure [Line Items]
Carrying value of Corporations traded debt	225,200,000	225,200,000	225,200,000
Fair value of Corporations publicly and non-publicly traded debt	227,400,000	233,600,000	229,100,000
Credit Agreement [Member]
Debt Disclosure [Line Items]
Current borrowing capacity	400,000,000
Credit Agreement [Member] | Non Publicly Traded [Member]
Debt Disclosure [Line Items]
Carrying value of Corporations traded debt	35,100,000	61,200,000	0
Accounts receivable facility [Member]
Debt Disclosure [Line Items]
Available financing of receivables purchase agreement	$ 50,000,000

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Acquisition - Additional Information (Detail)	3 Months Ended					12 Months Ended	1 Months Ended
	May 31, 2013 USD ($)	May 25, 2012 USD ($)	May 31, 2013 Clinton Cards [Member] USD ($) Store Brand	May 31, 2013 Clinton Cards [Member] GBP (£)	May 25, 2012 Clinton Cards [Member] USD ($)	Feb. 28, 2013 Clinton Cards [Member] USD ($)	Jul. 02, 2013 Clinton Cards [Member] Subsequent Event [Member] Lease Agreements [Member] USD ($) Lease Store
Business Acquisition [Line Items]
Purchase of outstanding senior secured debt		$ (56,560,000)	$ 56,600,000	£ 35,000,000
Number of stores owned Clinton			750	750
Annual revenues Clinton			600,000,000
Liquidation process and negotiations period with landlords for stores to be acquired			2	2
Purchase of debt Clinton cards bid for assets			37,200,000	23,000,000
Number of stores purchased by Lakeshore from Clinton			400	400
Additional future minimum lease payments if remaining store leases are successfully assigned							360,000,000
Completed lease assignments							393
Number of stores related to noncancelable operating lease							396
Clinton Cards secured debt recovery	(2,000,000)	7,794,000	2,000,000		7,800,000	8,100,000
Senior secured notes			12,500,000	8,200,000
Liquidation process and negotiations period with landlords for stores to be acquired			12 months	12 months
Transaction charges incurred as a result of Clinton Cards acquisition					$ 31,000,000

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Other Income and Expense (Tables)

3 Months Ended

May 31, 2013

Other Income And Expenses [Abstract]

Other Operating (Income) Expense - Net

Other Operating (Income) Expense – Net
	Three Months Ended
(In thousands)	May 31, 2013		May 25, 2012
Clinton Cards secured debt (recovery) impairment		$ (2,000)		$ 7,794
Termination of certain agency agreements		-		2,125
(Gain) loss on asset disposal		(235)		156
Miscellaneous		(1,083)		(551)
Other operating (income) expense – net		$ (3,318)		$ 9,524

Other Non-Operating Income - Net

Other Non-Operating Income – Net

	Three Months Ended
(In thousands)	May 31, 2013		May 25, 2012
Foreign exchange gain	$	(915)	$	(1,456)
Rental income		(484)		(636)
Miscellaneous		26		(179)
Other non-operating income – net	$	(1,373)	$	(2,271)

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Royalty Revenue and Related Expenses (Tables)

3 Months Ended

May 31, 2013

Text Block [Abstract]

Revenues and Expenses Associated With Servicing of Agreements

Revenues and expenses associated with the servicing of these agreements, primarily relating to the licensing activities included in non-reportable segments, are summarized as follows:

	Three Months Ended
(In thousands)	May 31, 2013		May 25, 2012
Royalty revenue		$ 6,506		$ 3,729
Royalty expenses
Material, labor and other production costs		$ 1,947		$ 2,328
Selling, distribution and marketing expenses		1,248		656
Administrative and general expenses		460		422
		$ 3,655		$ 3,406

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Other Income and Expense - Other Non-Operating Income - Net (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	May 31, 2013	May 25, 2012
Income Statement [Abstract]
Foreign exchange gain	$ (915)	$ (1,456)
Rental income	(484)	(636)
Miscellaneous	26	(179)
Other non-operating income - net	$ (1,373)	$ (2,271)

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Retirement Benefits (Tables)

3 Months Ended

May 31, 2013

Compensation And Retirement Disclosure [Abstract]

Components of Periodic Benefit Cost for Corporation's Defined Benefit Pension and Postretirement Benefits Plans

The components of periodic benefit cost for the Corporation’s defined benefit pension and postretirement benefits plans are as follows:

	Defined Benefit Pension				Postretirement Benefits
	Three Months Ended				Three Months Ended
(In thousands)	May 31, 2013		May 25, 2012		May 31, 2013		May 25, 2012
Service cost		$     320		$    334		$   138		$   213
Interest cost		1,742		1,844		613		800
Expected return on plan assets		(1,574)		(1,613)		(763)		(840)
Amortization of prior service cost (credit)		51		61		(325)		(519)
Amortization of actuarial loss (gain)		917		816		(213)		-
		$  1,456		$ 1,442		$ (550)		$ (346)

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Acquisition - Charges Reflected in Reportable Segments (Detail) (USD $)	3 Months Ended		12 Months Ended
	May 31, 2013	May 25, 2012	Feb. 28, 2013
Operating Statistics [Line Items ]
Bad debt expense	$ 17,000	$ 17,345,000
Impairment of debt purchased	(2,000,000)	7,794,000
Clinton Cards [Member]
Operating Statistics [Line Items ]
Contract asset impairment		4,000,000
Bad debt expense		17,200,000
Legal and advisory fees		2,000,000
Impairment of debt purchased	2,000,000	7,800,000	8,100,000
Total		31,000,000
Clinton Cards [Member] | International Social Expression Products [Member]
Operating Statistics [Line Items ]
Contract asset impairment		4,000,000
Bad debt expense		17,200,000
Total		21,200,000
Clinton Cards [Member] | Unallocated [Member]
Operating Statistics [Line Items ]
Legal and advisory fees		2,000,000
Impairment of debt purchased		7,800,000
Total		$ 9,800,000

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Earnings Per Share - Computation of Earnings Per Share and Earnings Per Share-Assuming Dilution (Detail) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	May 31, 2013	May 25, 2012
Numerator
Net income	$ 33,393	$ 7,250
Denominator
Weighted average shares outstanding	32,115,319	35,505,749
Effect of dilutive securities:
Share-based payment awards	587,000	648,000
Weighted average shares outstanding - assuming dilution	32,701,678	36,154,078
Earnings per share	$ 1.04	$ 0.20
Earnings per share - assuming dilution	$ 1.02	$ 0.20

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Inventories (Tables)

3 Months Ended

May 31, 2013

Inventory Disclosure [Abstract]

Schedule of Inventories

(In thousands)	May 31, 2013		February 28, 2013		May 25, 2012
Raw materials		$  25,187		$  21,303		$  18,290
Work in process		12,843		6,683		13,070
Finished products		265,262		278,573		243,951
		303,292		306,559		275,311
Less LIFO reserve		84,252		84,166		82,192
		219,040		222,393		193,119
Display materials and factory supplies		18,784		20,054		21,469
		$237,824		$242,447		$214,588

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Income Taxes - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	May 31, 2013	May 25, 2012	Feb. 28, 2013
Income Tax Disclosure [Abstract]
Effective tax rate	36.40%	30.40%
Unrecognized tax benefits			$ 21.7
Income tax expenses affected by unrecognized tax benefits if recognized			18.5
Decreased unrecognized tax benefit			3.1
Interest and penalties on unrecognized tax benefits and refundable income taxes	0.2
Accrued Interest and penalties on unrecognized tax benefit	$ 4.7
Open tax years by major tax jurisdiction	The Corporation is subject to examination by the Internal Revenue Service for tax years 2010 to the present and various U.S. state and local jurisdictions for tax years 1996 to the present. The Corporation is also subject to tax examination in various international tax jurisdictions including Australia, Canada, New Zealand and the United Kingdom for tax years 2006 to the present.

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Contingency - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	1 Months Ended
	May 22, 2013
Commitments And Contingencies Disclosure [Abstract]
Deposit into settlement fund to be distributed to members of class on Insurance Policies lawsuits	$ 12.5

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Royalty Revenue and Related Expenses - Additional Information (Detail) (AG intellectual properties [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended
	May 25, 2012
AG intellectual properties [Member]
Segment Reporting Information [Line Items]
License charges	$ 2,100

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Acquisition (Tables)

3 Months Ended

May 31, 2013

Business Combinations [Abstract]

Charges Incurred for Acquisition

The prior year first quarter included charges of $31.0 million associated with the aforementioned acquisition and are reflected on the Consolidated Statement of Income as follows:

(In millions)	Contract asset  impairment		Bad debt     expense		Legal and   advisory fees		Impairment of   debt purchased		Total
Net sales		$4.0		$     -		$   -		$   -		$  4.0
Administrative and general expenses		-		17.2		2.0		-		19.2
Other operating (income) expense - net		-		-		-		7.8		7.8
		$4.0		$17.2		$2.0		$7.8		$31.0

Charges Reflected in Reportable Segments

These charges are reflected in the Corporation’s reportable segments as follows:

(In millions)	Contract asset  impairment		Bad debt     expense		Legal and   advisory fees		Impairment of   debt purchased		Total
International Social Expression Products		$4.0		$17.2		$    -		$    -		$ 21.2
Unallocated		-		-		2.0		7.8		9.8
		$4.0		$17.2		$2.0		$7.8		$31.0

Purchase Price Allocation

The following represents the preliminary purchase price allocation:

Purchase price (in millions):
Credit bid	$ 37.2
Effective settlement of pre-existing relationships with the legacy Clinton Cards business	6.4
Cash acquired	(0.6)
	$ 43.0
Allocation (in millions):
Inventory	$ 5.5
Property, plant and equipment	18.4
Intangible assets	22.5
Current liabilities assumed	(3.4)
	$ 43.0

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Basis of Presentation

3 Months Ended

May 31, 2013

Accounting Policies [Abstract]

Basis of Presentation

Note 1 – Basis of Presentation

The accompanying unaudited consolidated financial statements of American Greetings Corporation and its subsidiaries (the “Corporation”) have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary to fairly present financial position, results of operations and cash flows for the periods have been included.

The Corporation’s fiscal year ends on February 28 or 29. References to a particular year refer to the fiscal year ending in February of that year. For example, 2013 refers to the year ended February 28, 2013. The Corporation’s subsidiary, AG Retail Cards Limited, which operates the recently acquired retail stores in the United Kingdom (also referred to herein as “UK”), is consolidated on a one-month lag corresponding with its fiscal year-end of February 1 for 2014. See Note 4 for further information.

The Corporation’s first fiscal quarter begins each year on March 1. The Corporation’s fiscal quarters generally end on the last Friday of the month in which the fiscal quarter ends. In the current year, the first quarter ended on May 31, 2013 and consisted of 92 days. The prior year first quarter ended on May 25, 2012 and consisted of 86 days. This resulted in six additional selling days in the current year first quarter. This fiscal timing will not impact the full year results as the current year fourth quarter will consist of six less days compared to the prior year fourth quarter.

These interim financial statements should be read in conjunction with the Corporation’s financial statements and notes thereto included in its Annual Report on Form 10-K for the year ended February 28, 2013, from which the Consolidated Statement of Financial Position at February 28, 2013, presented herein, has been derived. Certain amounts in the prior year financial statements have been reclassified to conform to the 2014 presentation. These reclassifications had no material impact on financial position, earnings or cash flows.

The Corporation’s investments in less than majority-owned companies in which it has the ability to exercise significant influence over the operation and financial policies are accounted for using the equity method except when they qualify as variable interest entities (“VIE”) and the Corporation is the primary beneficiary, in which case, the investments are consolidated in accordance with Accounting Standards Codification (“ASC”) Topic 810 (“ASC 810”), “Consolidation.” Investments that do not meet the above criteria are accounted for under the cost method.

The Corporation holds an approximately 15% equity interest in Schurman Fine Papers (“Schurman”), which is a VIE as defined in ASC 810. Schurman owns and operates specialty card and gift retail stores in the United States and Canada. The stores are primarily located in malls and strip shopping centers. During the current period, the Corporation assessed the variable interests in Schurman and determined that a third party holder of variable interests has the controlling financial interest in the VIE and thus, the third party, not the Corporation, is the primary beneficiary. In completing this assessment, the Corporation identified the activities that it considers most significant to the future economic success of the VIE and determined that it does not have the power to direct those activities. As such, Schurman is not consolidated in the Corporation’s results. The Corporation’s maximum exposure to loss as it relates to Schurman as of May 31, 2013 includes:

¡ the investment in the equity of Schurman of $1.9 million;

¡ the limited guaranty (“Liquidity Guaranty”) of Schurman’s indebtedness of $10.0 million;

¡ normal course of business trade and other accounts receivable due from Schurman of $24.6 million, the balance of which fluctuates throughout the year due to the seasonal nature of the business; and

¡ the operating leases currently subleased to Schurman, the aggregate lease payments for the remaining life of which was $10.6 million, $11.8 million and $19.0 million as of May 31, 2013, February 28, 2013 and May 25, 2012, respectively.

The Corporation provides Schurman limited credit support through the provision of a Liquidity Guaranty in favor of the lenders under Schurman’s senior revolving credit facility (the “Senior Credit Facility”). Pursuant to the terms of the Liquidity Guaranty, the Corporation has guaranteed the repayment of up to $10.0 million of Schurman’s borrowings under the Senior Credit Facility to help ensure that Schurman has sufficient borrowing availability under this facility. The Liquidity Guaranty is required to be backed by a letter of credit for the term of the Liquidity Guaranty, which is currently anticipated to end in July 2016. The Corporation’s obligations under the Liquidity Guaranty generally may not be triggered unless Schurman’s lenders under its Senior Credit Facility have substantially completed the liquidation of the collateral under Schurman’s Senior Credit Facility, or 91 days after the liquidation is started, whichever is earlier, and will be limited to the deficiency, if any, between the amount owed and the amount collected in connection with the liquidation. There was no triggering event or liquidation of collateral as of May 31, 2013 requiring the use of the Liquidity Guaranty.

In addition to the investment in the equity of Schurman, the Corporation holds an investment in the common stock of Party City Holdings, Inc. These two investments, totaling $10.8 million are accounted for under the cost method. The Corporation is not aware of any events or changes in circumstances that had occurred during the first quarter of 2014 that the Corporation believes are reasonably likely to have had a significant adverse effect on the carrying amount of these investments.

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Recent Accounting Pronouncements

3 Months Ended

May 31, 2013

Accounting Changes And Error Corrections [Abstract]

Recent Accounting Pronouncements

Note 3 – Recent Accounting Pronouncements

In February 2013, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2013-02 (“ASU 2013-02”), “Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income.” ASU 2013-02 requires entities to disclose additional information about changes in other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income and the income statement line items affected. The provisions of this guidance are effective prospectively for annual and interim periods beginning after December 15, 2012. The Corporation adopted this standard on March 1, 2013. See Note 7 for further information.

In July 2012, the FASB issued ASU No. 2012-02 (“ASU 2012-02”), “Testing Indefinite-Lived Intangible Assets for Impairment.” ASU 2012-02 gives entities an option to first assess qualitative factors to determine whether the existence of events and circumstances indicate that it is more likely than not that an indefinite-lived intangible asset is impaired. If based on its qualitative assessment an entity concludes that it is more likely than not that the fair value of an indefinite-lived intangible asset is less than its carrying amount, quantitative impairment testing is required. However, if an entity concludes otherwise, quantitative impairment testing is not required. ASU 2012-02 is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. The Corporation adopted this standard on March 1, 2013. The adoption of this standard did not have a material effect on the Corporation’s financial statements.

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Other Income and Expense

3 Months Ended

May 31, 2013

Other Income And Expenses [Abstract]

Other Income and Expense

Note 6 – Other Income and Expense
Other Operating (Income) Expense – Net
	Three Months Ended
(In thousands)	May 31, 2013		May 25, 2012
Clinton Cards secured debt (recovery) impairment		$ (2,000)		$ 7,794
Termination of certain agency agreements		-		2,125
(Gain) loss on asset disposal		(235)		156
Miscellaneous		(1,083)		(551)
Other operating (income) expense – net		$ (3,318)		$ 9,524

The Corporation recorded an impairment of $7.8 million during the quarter ended May 25, 2012 related to the senior secured debt of Clinton Cards that the Corporation acquired. During the three months ended May 31, 2013 the impairment of the secured debt of Clinton Cards was adjusted based on current estimated recovery information provided by the Administrators, resulting in a gain of $2.0 million. See Note 4 for further information.

In May 2012, the Corporation recorded expenses totaling $2.1 million related to the termination of certain agency agreements associated with its licensing business.

Other Non-Operating Income – Net

	Three Months Ended
(In thousands)	May 31, 2013		May 25, 2012
Foreign exchange gain	$	(915)	$	(1,456)
Rental income		(484)		(636)
Miscellaneous		26		(179)
Other non-operating income – net	$	(1,373)	$	(2,271)

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Acquisition

3 Months Ended

May 31, 2013

Business Combinations [Abstract]

Acquisition

Note 4 – Acquisition

During the first quarter of 2013, the Corporation acquired all of the outstanding senior secured debt of Clinton Cards for $56.6 million (£35 million) through Lakeshore Lending Limited (“Lakeshore”), a wholly-owned subsidiary of the Corporation organized under the laws of the UK. Subsequently, on May 9, 2012, Clinton Cards was placed into administration, a procedure similar to Chapter 11 bankruptcy in the United States. Prior to entering into administration, Clinton Cards had approximately 750 stores and annual revenues of approximately $600 million across its two primary retail brands, Clinton Cards and Birthdays. The legacy Clinton Cards business had been an important customer to the Corporation’s international business for approximately forty years and was one of the Corporation’s largest customers.

As part of the administration process, the administrators (“Administrators”) of Clinton Cards and certain of its subsidiaries (the “Sellers”) conducted an auction of certain assets of the business of the Sellers that they believed constituted a viable ongoing business. Lakeshore bid $37.2 million (£23 million) for certain of these remaining assets. The bid took the form of a “credit bid,” where the Corporation used a portion of the outstanding senior secured debt owed to Lakeshore by Clinton Cards to pay the purchase price for the assets. The bid was accepted by the Administrators and on June 6, 2012 the Corporation entered into an agreement with the Sellers and the Administrators for the purchase of certain assets and the related business of the Sellers.

Under the terms of the agreement, the Corporation originally expected to acquire approximately 400 stores from the Sellers, together with related inventory and overhead, as well as the Clinton Cards and related brands. As of July 2, 2013, the Corporation has completed 393 lease assignments and the final number is expected to be 396. The estimated future minimum rental payments for noncancelable operating leases related to the 396 acquired stores will be approximately $360 million.

The stores and assets not acquired by the Corporation remain part of the administration process. It is anticipated that these remaining assets not purchased by the Corporation will be liquidated and the proceeds will be used to repay the creditors of the Sellers, including the Corporation. The Corporation will seek to recover the remaining senior secured debt claim held by it through the liquidation process. However, based on the estimated recovery information provided by the Administrators, the Corporation recorded an aggregate charge of $8.1 million in 2013 relating to the senior secured debt it acquired in the first quarter of the prior year. In the first quarter of 2014, based on updated estimated recovery information provided by the Administrators, the Corporation recorded an adjustment to the charge resulting in a gain of $2.0 million. The remaining balance of the senior secured debt is $12.5 million (£8.2 million) as of May 31, 2013 and is included in “Prepaid expenses and other” on the Consolidated Statement of Financial Position. The liquidation process was originally expected to take approximately twelve months from the closing of the transaction on June 6, 2012. The process is currently expected to be completed by December 31, 2013.

The prior year first quarter included charges of $31.0 million associated with the aforementioned acquisition and are reflected on the Consolidated Statement of Income as follows:

(In millions)	Contract asset  impairment		Bad debt     expense		Legal and   advisory fees		Impairment of   debt purchased		Total
Net sales		$4.0		$     -		$   -		$   -		$  4.0
Administrative and general expenses		-		17.2		2.0		-		19.2
Other operating (income) expense - net		-		-		-		7.8		7.8
		$4.0		$17.2		$2.0		$7.8		$31.0

These charges are reflected in the Corporation’s reportable segments as follows:

(In millions)	Contract asset  impairment		Bad debt     expense		Legal and   advisory fees		Impairment of   debt purchased		Total
International Social Expression Products		$4.0		$17.2		$    -		$    -		$ 21.2
Unallocated		-		-		2.0		7.8		9.8
		$4.0		$17.2		$2.0		$7.8		$31.0

The total cost of the acquisition has been allocated to the assets acquired and the liabilities assumed based upon their estimated fair values at the date of the acquisition. The estimated purchase price allocation is preliminary and subject to revision as valuation work and other analyses are still being conducted. The following represents the preliminary purchase price allocation:

Purchase price (in millions):
Credit bid	$ 37.2
Effective settlement of pre-existing relationships with the legacy Clinton Cards business	6.4
Cash acquired	(0.6)
	$ 43.0
Allocation (in millions):
Inventory	$ 5.5
Property, plant and equipment	18.4
Intangible assets	22.5
Current liabilities assumed	(3.4)
	$ 43.0

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Acquisition - Purchase Price Allocation (Detail) (Clinton Cards [Member], USD $) In Millions, unless otherwise specified	May 31, 2013
Clinton Cards [Member]
Schedule Of Business Acquisitions Purchase Price Allocation [Line Items]
Credit bid	$ 37.2
Effective settlement of pre-existing relationships with the legacy Clinton Cards business	6.4
Cash acquired	(0.6)
Total purchase price	43.0
Inventory	5.5
Property, plant and equipment	18.4
Intangible assets	22.5
Current liabilities assumed	(3.4)
Total allocation	$ 43.0

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Accumulated Other Comprehensive Income (Tables)

3 Months Ended

May 31, 2013

Text Block [Abstract]

Changes in Accumulated Other Comprehensive (Loss)

The changes in accumulated other comprehensive income (loss) are as follows.

(In thousands)	Foreign Currency Translation   Adjustments		Pensions and Other   Postretirement   Benefits		Unrealized     Investment     Gain		Total
Balance at February 28, 2013		$  12,594		$ (29,731)		$      4		$  (17,133)
Other comprehensive (loss) income before reclassifications		(2,155)		43		1		(2,111)
Amounts reclassified from accumulated other comprehensive income (loss)		-		334		-		334
Net current period other comprehensive (loss) income		(2,155)		377		1		(1,777)
Balance at May 31, 2013		$  10,439		$ (29,354)		$      5		$  (18,910)

Reclassifications Out of Accumulated Other Comprehensive Income (Loss)

The reclassifications out of accumulated other comprehensive income (loss) are as follows.

(In thousands)	Three Months Ended  May 31, 2013		Consolidated Statement of Income  Classification
Amortization of pension and other postretirement benefits items
Actuarial losses, net	$	(704)	Administrative and general expenses
Prior service cost		274	Administrative and general expenses
		(430)
Tax benefit		96	Income tax expense
Total, net of tax		(334)
Total reclassifications	$	(334)

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Deferred Costs (Tables)

3 Months Ended

May 31, 2013

Text Block [Abstract]

Deferred Costs and Future Payment Commitments

Deferred costs and future payment commitments for retail supply agreements are included in the following financial statement captions:

(In thousands)	May 31, 2013		February 28, 2013		May 25, 2012
Prepaid expenses and other		$   88,912		$   93,873		$   85,622
Other assets		328,063		332,159		378,091
Deferred cost assets		416,975		426,032		463,713
Other current liabilities		(63,378)		(61,282)		(45,625)
Other liabilities		(91,359)		(92,153)		(131,883)
Deferred cost liabilities		(154,737)		(153,435)		(177,508)
Net deferred costs		$ 262,238		$ 272,597		$ 286,205

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Basis of Presentation - Additional Information (Detail) (USD $) In Millions, unless otherwise specified		3 Months Ended			3 Months Ended
	May 31, 2013	May 31, 2013 Schurman [Member]	May 31, 2013 Schurman [Member] Business trade and other receivables [Member]	May 31, 2013 Schurman [Member] Investment in equity [Member]	May 31, 2013 Schurman [Member] Liquidity Guaranty [Member]	May 31, 2013 Schurman [Member] Operating leases subleased to Schurman [Member]	Feb. 28, 2013 Schurman [Member] Operating leases subleased to Schurman [Member]	May 25, 2012 Schurman [Member] Operating leases subleased to Schurman [Member]
Significant Accounting Policies [Line Items]
Equity interest holdings in Schurman Fine Papers		15.00%
Maximum exposure to loss, Amount			$ 24.6	$ 1.9	$ 10.0	$ 10.6	$ 11.8	$ 19.0
Number of days under liquidity guaranty					91 days
End period of Liquidity Guaranty					2016-07
Total investments in common stock	$ 10.8

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Deferred Costs - Deferred Costs and Future Payment Commitments (Detail) (USD $) In Thousands, unless otherwise specified	May 31, 2013	Feb. 28, 2013	May 25, 2012
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract]
Prepaid expenses and other	$ 88,912	$ 93,873	$ 85,622
Other assets	328,063	332,159	378,091
Deferred cost assets	416,975	426,032	463,713
Other current liabilities	(63,378)	(61,282)	(45,625)
Other liabilities	(91,359)	(92,153)	(131,883)
Deferred cost liabilities	(154,737)	(153,435)	(177,508)
Net deferred costs	$ 262,238	$ 272,597	$ 286,205

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Earnings Per Share - Additional Information (Detail) In Millions, unless otherwise specified	3 Months Ended
	May 31, 2013	May 25, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Amount of stock options excluded from earnings per share	3.2	3.7
Common shares Class A [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise of employee stock options	0.3	0.1

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Other Income and Expense - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		12 Months Ended
	May 31, 2013	May 25, 2012	Feb. 28, 2013
Other Income And Expense [Line Items]
Miscellaneous impairment related to senior secured debt	$ (2,000)	$ 7,794
Clinton Cards [Member]
Other Income And Expense [Line Items]
Miscellaneous impairment related to senior secured debt	2,000	7,800	8,100
AG intellectual properties [Member]
Other Income And Expense [Line Items]
Contract termination		$ 2,125

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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	May 31, 2013	May 25, 2012
Statement Of Income And Comprehensive Income [Abstract]
Net income	$ 33,393	$ 7,250
Other comprehensive loss, net of tax:
Foreign currency translation adjustments	(2,155)	(8,400)
Pension and postretirement benefit adjustments	377	475
Unrealized gain on securities	1
Other comprehensive loss, net of tax	(1,777)	(7,925)
Comprehensive income (loss)	$ 31,616	$ (675)

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Customer Allowances and Discounts

3 Months Ended

May 31, 2013

Text Block [Abstract]

Customer Allowances and Discounts

Note 9 – Customer Allowances and Discounts

Trade accounts receivable are reported net of certain allowances and discounts. The most significant of these are as follows:

(In thousands)	May 31, 2013		February 28, 2013		May 25, 2012
Allowance for seasonal sales returns		$ 29,296		$ 24,574		$ 36,719
Allowance for outdated products		11,971		11,156		15,355
Allowance for doubtful accounts		3,443		3,419		21,366
Allowance for marketing funds		27,305		28,610		28,987
Allowance for rebates		30,276		31,771		33,106
		$102,291		$ 99,530		$135,533

Certain customer allowances and discounts are settled in cash. These accounts, primarily rebates, which are classified as “Accrued liabilities” on the Consolidated Statement of Financial Position, totaled $14.3 million, $13.5 million and $12.5 million as of May 31, 2013, February 28, 2013 and May 25, 2012, respectively.

During the three months ended May 25, 2012, the Corporation recorded an additional allowance for doubtful accounts of approximately $17 million related to its unsecured accounts receivable exposure to Clinton Cards.

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CONSOLIDATED STATEMENT OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	3 Months Ended
	May 31, 2013	May 25, 2012
OPERATING ACTIVITIES:
Net income	$ 33,393	$ 7,250
Adjustments to reconcile net income to cash flows from operating activities:
Stock-based compensation	2,475	1,869
Net (gain) loss on disposal of fixed assets	(235)	156
Depreciation and intangible assets amortization	13,057	11,469
Clinton Cards secured debt (recovery) impairment	(2,000)	7,794
Provision for doubtful accounts	17	17,345
Deferred income taxes	6,002	(3,913)
Other non-cash charges	306	291
Changes in operating assets and liabilities, net of acquisitions:
Trade accounts receivable	(17,162)	(2,635)
Inventories	4,229	(7,161)
Other current assets	1,514	4,093
Income taxes	11,313	3,445
Deferred costs - net	10,217	19,560
Accounts payable and other liabilities	(42,446)	(12,830)
Other - net	3,646	3,165
Total Cash Flows From Operating Activities	24,326	49,898
INVESTING ACTIVITIES:
Property, plant and equipment additions	(15,472)	(16,432)
Proceeds from sale of fixed assets	244	19
Purchase of Clinton Cards debt		(56,560)
Total Cash Flows From Investing Activities	(15,228)	(72,973)
FINANCING ACTIVITIES:
Proceeds from revolving line of credit and long-term borrowings	160,800
Repayments on revolving line of credit and long-term borrowings	(186,900)
Issuance or exercise of share-based payment awards	(390)	(728)
Tax benefit (deficiency) from share-based payment awards	247	(421)
Purchase of treasury shares		(40,542)
Dividends to shareholders	(4,784)	(5,369)
Total Cash Flows From Financing Activities	(31,027)	(47,060)
EFFECT OF EXCHANGE RATE CHANGES ON CASH	(133)	(2,123)
DECREASE IN CASH AND CASH EQUIVALENTS	(22,062)	(72,258)
Cash and Cash Equivalents at Beginning of Year	86,059	132,438
Cash and Cash Equivalents at End of Period	$ 63,997	$ 60,180

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Debt - Long-Term Debt (Detail) (USD $) In Thousands, unless otherwise specified	May 31, 2013	Feb. 28, 2013	May 25, 2012
Debt Instrument [Line Items]
Long-term debt	$ 260,281	$ 286,381	$ 225,181
7.375% senior notes, due 2021 [Member]
Debt Instrument [Line Items]
Long-term debt	225,000	225,000	225,000
Revolving credit facility, due 2017 [Member]
Debt Instrument [Line Items]
Long-term debt	35,100	61,200
6.10% senior notes, due 2028 [Member]
Debt Instrument [Line Items]
Long-term debt	$ 181	$ 181	$ 181

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CONSOLIDATED STATEMENT OF INCOME (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	May 31, 2013	May 25, 2012
Income Statement [Abstract]
Net sales	$ 490,545	$ 389,253
Other revenue	6,758	3,853
Total revenue	497,303	393,106
Material, labor and other production costs	203,837	163,864
Selling, distribution and marketing expenses	170,339	127,163
Administrative and general expenses	71,080	80,168
Other operating (income) expense - net	(3,318)	9,524
Operating income	55,365	12,387
Interest expense	4,312	4,376
Interest income	(120)	(138)
Other non-operating income - net	(1,373)	(2,271)
Income before income tax expense	52,546	10,420
Income tax expense	19,153	3,170
Net income	$ 33,393	$ 7,250
Earnings per share - basic	$ 1.04	$ 0.20
Earnings per share - assuming dilution	$ 1.02	$ 0.20
Average number of shares outstanding	32,115,319	35,505,749
Average number of shares outstanding - assuming dilution	32,701,678	36,154,078
Dividends declared per share	$ 0.15	$ 0.15

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Customer Allowances and Discounts - Allowances and Discounts Trade Accounts Receivable (Detail) (USD $) In Thousands, unless otherwise specified	May 31, 2013	Feb. 28, 2013	May 25, 2012
Valuation and Qualifying Accounts Disclosure [Line Items]
Allowances and discounts on trade accounts receivables	$ 102,291	$ 99,530	$ 135,533
Allowance for seasonal sales returns [Member]
Valuation and Qualifying Accounts Disclosure [Line Items]
Allowances and discounts on trade accounts receivables	29,296	24,574	36,719
Allowance for outdated products [Member]
Valuation and Qualifying Accounts Disclosure [Line Items]
Allowances and discounts on trade accounts receivables	11,971	11,156	15,355
Allowance for doubtful accounts [Member]
Valuation and Qualifying Accounts Disclosure [Line Items]
Allowances and discounts on trade accounts receivables	3,443	3,419	21,366
Allowance for marketing funds [Member]
Valuation and Qualifying Accounts Disclosure [Line Items]
Allowances and discounts on trade accounts receivables	27,305	28,610	28,987
Allowance for rebates [Member]
Valuation and Qualifying Accounts Disclosure [Line Items]
Allowances and discounts on trade accounts receivables	$ 30,276	$ 31,771	$ 33,106

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Earnings Per Share (Tables)

3 Months Ended

May 31, 2013

Earnings Per Share [Abstract]

Computation of Earnings Per Share and Earnings Per Share - Assuming Dilution

The following table sets forth the computation of earnings per share and earnings per share - assuming dilution:

	Three Months Ended
	May 31, 2013		May 25, 2012
Numerator (in thousands):
Net income		$33,393		$7,250
Denominator (in thousands):
Weighted average shares outstanding		32,115		35,506
Effect of dilutive securities:
Share-based payment awards		587		648
Weighted average shares outstanding – assuming dilution		32,702		36,154
Earnings per share		$   1.04		$   0.20
Earnings per share – assuming dilution		$   1.02		$   0.20

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Proposal by Members of the Weiss Family and Related Entities to Acquire the Corporation

3 Months Ended

May 31, 2013

Text Block [Abstract]

Proposal by Members of the Weiss Family and Related Entities to Acquire the Corporation

Note 18 – Proposal by Members of the Weiss Family and Related Entities to Acquire the Corporation

On September 26, 2012, the Corporation announced that our Board of Directors received the Going Private Proposal.

On March 29, 2013, the Corporation signed an agreement and plan of merger (as amended on July 3, 2013, the “Merger Agreement”) by and among American Greetings Corporation, Century Intermediate Holding Company (“Parent”), which upon the closing of the Merger (as defined below) will be indirectly owned by the Family Shareholders (as defined below), and Century Merger Company, a wholly-owned subsidiary of Parent (“Merger Sub”). As more fully described in our Current Reports on Form 8-K filed with the SEC on April 1, 2013 and July 5, 2013, at the effective time of the Merger, each issued and outstanding share of the Corporation (other than shares owned by the Corporation, Parent (which will include at the effective time of the Merger all shares currently held by the Family Shareholders), Merger Sub or holders who have properly exercised dissenters’ rights under Ohio law) will be converted into the right to receive $19.00 per share, in cash, without interest and subject to any withholding taxes, and Merger Sub will merge with and into the Corporation, with the Corporation surviving the Merger as a wholly-owned subsidiary of Parent (the “Merger”). The consummation of the Merger is subject to customary conditions, and is further conditioned on the favorable vote of (1) at least two-thirds of the outstanding voting power of the Corporation represented by the Class A common shares and Class B common shares, voting together as a single class, and (2) a majority of the Class A common shares and Class B common shares held by persons other than the Family Shareholders, the Irving I. Stone Foundation and our executive officers and directors, as more fully described in our Current Reports on Form 8-K filed with the SEC on April 1, 2013 and July 5, 2013 and in the proxy statement on Schedule 14A filed with the SEC on July 5, 2013 (the “Majority of the Minority Shareholder Approval” condition). For purposes of the Majority of the Minority Shareholder Approval only, Class B common shares will be entitled to one vote per share. Under the Merger Agreement, “Family Shareholders” includes: Zev Weiss, a director and the Corporation’s Chief Executive Officer; Morry Weiss, the Corporation’s Chairman of the Board of Directors; Jeffrey Weiss, a director and the Corporation’s President and Chief Operating Officer; and certain other members of the Weiss family, together with the Irving I. Stone Limited Liability Company.

See Note 15 for information regarding legal proceedings related to the Going Private Proposal and Merger Agreement.

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Other Income and Expense - Other Operating (Income) Expense - Net (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	May 31, 2013	May 25, 2012
Other Income Expense [Line Items]
Clinton Cards secured debt (recovery) impairment	$ (2,000)	$ 7,794
(Gain) loss on asset disposal	(235)	156
Miscellaneous	(1,083)	(551)
Other operating (income) expense - net	(3,318)	9,524
AG intellectual properties [Member]
Other Income Expense [Line Items]
Termination of certain agency agreements		$ 2,125

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Inventories - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	May 31, 2013	Feb. 28, 2013	May 25, 2012
Inventory Disclosure [Abstract]
Inventory held on location for retailers with scan-based trading arrangements, which is included in finished products	$ 68.6	$ 59.7	$ 59.0

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Business Segment Information - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	May 31, 2013	Feb. 28, 2013	May 25, 2012
Segment Reporting Information [Line Items]
Severance accrual	$ 4.5	$ 6.0	$ 5.0
United Kingdom [Member]
Segment Reporting Information [Line Items]
Number of card and gift retail stores	396

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Acquisition - Charges Incurred for Acquisition (Detail) (USD $)	3 Months Ended		12 Months Ended
	May 31, 2013	May 25, 2012	Feb. 28, 2013
Schedule Of Activities And Transactions Associated With Related Cost [Line Items]
Bad debt expense	$ 17,000	$ 17,345,000
Impairment of debt purchased	(2,000,000)	7,794,000
Clinton Cards [Member]
Schedule Of Activities And Transactions Associated With Related Cost [Line Items]
Contract asset impairment		4,000,000
Bad debt expense		17,200,000
Legal and advisory fees		2,000,000
Impairment of debt purchased	2,000,000	7,800,000	8,100,000
Total		31,000,000
Clinton Cards [Member] | Net sales [Member]
Schedule Of Activities And Transactions Associated With Related Cost [Line Items]
Contract asset impairment		4,000,000
Total		4,000,000
Clinton Cards [Member] | Administrative and general expenses [Member]
Schedule Of Activities And Transactions Associated With Related Cost [Line Items]
Bad debt expense		17,200,000
Legal and advisory fees		2,000,000
Total		19,200,000
Clinton Cards [Member] | Other Operating (Income) Expense - Net [Member]
Schedule Of Activities And Transactions Associated With Related Cost [Line Items]
Impairment of debt purchased		7,800,000
Total		$ 7,800,000

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Fair Value Measurements (Tables)

3 Months Ended

May 31, 2013

Fair Value Disclosures [Abstract]

Assets Measured at Fair Value as of Measurement Date

The following table summarizes the financial assets measured at fair value as of May 31, 2013:

(In thousands)	May 31, 2013	Level 1		Level 2	Level 3
Assets measured on a recurring basis:
Deferred compensation plan assets	$ 11,104		$ 8,683	$ 2,421	$        -
The following table summarizes the financial assets measured at fair value as of February 28, 2013:
(In thousands)	February 28, 2013	Level 1		Level 2	Level 3
Assets measured on a recurring basis:
Deferred compensation plan assets	$10,636		$ 9,175	$ 1,461	$        -
The following table summarizes the financial assets measured at fair value as of May 25, 2012:
(In thousands)	May 25, 2012	Level 1		Level 2	Level 3
Assets measured on a recurring basis:
Deferred compensation plan assets	$  9,505		$ 7,949	$ 1,556	$        -

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Business Segment Information (Tables)

3 Months Ended

May 31, 2013

Segment Reporting [Abstract]

Schedule of Segment Reporting Information by Segment

(In thousands)	Three Months Ended
Total Revenue:	May 31, 2013		May 25, 2012
North American Social Expression Products		$328,287		$308,559
International Social Expression Products		70,801		62,680
Intersegment items		11,092		-
Net		59,709		62,680
Retail Operations		74,718		-
AG Interactive		14,700		15,496
Non-reportable segments		19,889		6,371
		$497,303		$393,106
(In thousands)	Three Months Ended
Segment Earnings (Loss) Before Tax:	May 31, 2013		May 25, 2012
North American Social Expression Products		$ 66,347		$ 56,218
International Social Expression Products		2,544		(22,557)
Intersegment items		2,214		-
Net		330		(22,557)
Retail Operations		(3,452)		-
AG Interactive		3,313		3,773
Non-reportable segments		7,382		(58)
Unallocated
Interest expense		(4,312)		(4,376)
Profit-sharing expense		(3,981)		(2,980)
Stock-based compensation expense		(2,475)		(1,869)
Corporate overhead expense		(10,606)		(17,731)
		(21,374)		(26,956)
		$ 52,546		$ 10,420

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Earnings Per Share

3 Months Ended

May 31, 2013

Earnings Per Share [Abstract]

Earnings Per Share

Note 8 – Earnings Per Share

The following table sets forth the computation of earnings per share and earnings per share - assuming dilution:

	Three Months Ended
	May 31, 2013		May 25, 2012
Numerator (in thousands):
Net income		$33,393		$7,250
Denominator (in thousands):
Weighted average shares outstanding		32,115		35,506
Effect of dilutive securities:
Share-based payment awards		587		648
Weighted average shares outstanding – assuming dilution		32,702		36,154
Earnings per share		$   1.04		$   0.20
Earnings per share – assuming dilution		$   1.02		$   0.20

Approximately 3.2 million and 3.7 million stock options outstanding for the three month periods ended May 31, 2013 and May 25, 2012, respectively, were excluded from the computation of earnings per share–assuming dilution because the options’ exercise prices were greater than the average market price of the common shares during the respective periods.

The Corporation issued 0.3 million and 0.1 million Class A common shares upon exercise of employee stock options and vesting of equity awards during the three months ended May 31, 2013 and three months ended May 25, 2012, respectively.

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Fair Value Measurements - Assets Measured at Fair Value as of Measurement Date (Detail) (Fair Value, Measurements, Recurring [Member], Deferred Compensation Plan Assets [Member], USD $) In Thousands, unless otherwise specified	May 31, 2013	Feb. 28, 2013	May 25, 2012
Assets measured on a recurring and non-recurring basis:
Assets measured on a recurring basis	$ 11,104	$ 10,636	$ 9,505
Level 1 [Member]
Assets measured on a recurring and non-recurring basis:
Assets measured on a recurring basis	8,683	9,175	7,949
Level 2 [Member]
Assets measured on a recurring and non-recurring basis:
Assets measured on a recurring basis	2,421	1,461	1,556
Level 3 [Member]
Assets measured on a recurring and non-recurring basis:
Assets measured on a recurring basis

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Customer Allowances and Discounts (Tables)

3 Months Ended

May 31, 2013

Text Block [Abstract]

Allowances and Discounts Trade Accounts Receivable

Trade accounts receivable are reported net of certain allowances and discounts. The most significant of these are as follows:

(In thousands)	May 31, 2013		February 28, 2013		May 25, 2012
Allowance for seasonal sales returns		$ 29,296		$ 24,574		$ 36,719
Allowance for outdated products		11,971		11,156		15,355
Allowance for doubtful accounts		3,443		3,419		21,366
Allowance for marketing funds		27,305		28,610		28,987
Allowance for rebates		30,276		31,771		33,106
		$102,291		$ 99,530		$135,533

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Royalty Revenue and Related Expenses - Revenues and Expenses Associated With Servicing of Agreements (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	May 31, 2013	May 25, 2012
Royalty expenses
Material, labor and other production costs	$ 203,837	$ 163,864
Selling, distribution and marketing expenses	170,339	127,163
Administrative and general expenses	71,080	80,168
AG intellectual properties [Member]
Segment Reporting Information [Line Items]
Royalty revenue	6,506	3,729
Royalty expenses
Material, labor and other production costs	1,947	2,328
Selling, distribution and marketing expenses	1,248	656
Administrative and general expenses	460	422
Expenses associated with royalty revenue, Total	$ 3,655	$ 3,406

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Deferred Costs

3 Months Ended

May 31, 2013

Text Block [Abstract]

Deferred Costs

Note 11 – Deferred Costs

Deferred costs and future payment commitments for retail supply agreements are included in the following financial statement captions:

(In thousands)	May 31, 2013		February 28, 2013		May 25, 2012
Prepaid expenses and other		$   88,912		$   93,873		$   85,622
Other assets		328,063		332,159		378,091
Deferred cost assets		416,975		426,032		463,713
Other current liabilities		(63,378)		(61,282)		(45,625)
Other liabilities		(91,359)		(92,153)		(131,883)
Deferred cost liabilities		(154,737)		(153,435)		(177,508)
Net deferred costs		$ 262,238		$ 272,597		$ 286,205

The Corporation maintains an allowance for deferred costs related to supply agreements of $7.2 million, $7.9 million and $9.2 million at May 31, 2013, February 28, 2013 and May 25, 2012, respectively. This allowance is included in “Other assets” on the Consolidated Statement of Financial Position.

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Accumulated Other Comprehensive Income

3 Months Ended

May 31, 2013

Text Block [Abstract]

Accumulated Other Comprehensive Income

Note 7 – Accumulated Other Comprehensive Loss

The changes in accumulated other comprehensive income (loss) are as follows.

(In thousands)	Foreign Currency Translation   Adjustments		Pensions and Other   Postretirement   Benefits		Unrealized     Investment     Gain		Total
Balance at February 28, 2013		$  12,594		$ (29,731)		$      4		$  (17,133)
Other comprehensive (loss) income before reclassifications		(2,155)		43		1		(2,111)
Amounts reclassified from accumulated other comprehensive income (loss)		-		334		-		334
Net current period other comprehensive (loss) income		(2,155)		377		1		(1,777)
Balance at May 31, 2013		$  10,439		$ (29,354)		$      5		$  (18,910)

The reclassifications out of accumulated other comprehensive income (loss) are as follows.

(In thousands)	Three Months Ended  May 31, 2013		Consolidated Statement of Income  Classification
Amortization of pension and other postretirement benefits items
Actuarial losses, net	$	(704)	Administrative and general expenses
Prior service cost		274	Administrative and general expenses
		(430)
Tax benefit		96	Income tax expense
Total, net of tax		(334)
Total reclassifications	$	(334)

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Seasonal Nature of Business

3 Months Ended

May 31, 2013

Text Block [Abstract]

Seasonal Nature of Business

Note 2 – Seasonal Nature of Business

A significant portion of the Corporation’s business is seasonal in nature. Therefore, the results of operations for interim periods are not necessarily indicative of the results for the fiscal year taken as a whole.

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Customer Allowances and Discounts - Additional Information (Detail) (USD $)	May 31, 2013	Feb. 28, 2013	May 25, 2012
Valuation and Qualifying Accounts Disclosure [Line Items]
Allowances and discounts on trade accounts receivables	$ 102,291,000	$ 99,530,000	$ 135,533,000
Allowance for doubtful accounts [Member]
Valuation and Qualifying Accounts Disclosure [Line Items]
Trade allowances and discounts settled in cash	14,300,000	13,500,000	12,500,000
Allowances and discounts on trade accounts receivables	3,443,000	3,419,000	21,366,000
Allowance for doubtful accounts [Member] | Clinton Cards [Member]
Valuation and Qualifying Accounts Disclosure [Line Items]
Allowances and discounts on trade accounts receivables			$ 17,000,000

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Accumulated Other Comprehensive Loss - Changes in Accumulated Other Comprehensive (Loss) (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	May 31, 2013	May 25, 2012
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance	$ (17,133)
Other comprehensive (loss) income before reclassifications	(2,111)
Amounts reclassified from accumulated other comprehensive income (loss)	334
Other comprehensive loss, net of tax	(1,777)	(7,925)
Ending Balance	(18,910)	(19,755)
Foreign Currency Translation Adjustments [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance	12,594
Other comprehensive (loss) income before reclassifications	(2,155)
Other comprehensive loss, net of tax	(2,155)
Ending Balance	10,439
Pensions and Other Postretirement Benefits [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance	(29,731)
Other comprehensive (loss) income before reclassifications	43
Amounts reclassified from accumulated other comprehensive income (loss)	334
Other comprehensive loss, net of tax	377
Ending Balance	(29,354)
Unrealized Investment Gain [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance	4
Other comprehensive (loss) income before reclassifications	1
Other comprehensive loss, net of tax	1
Ending Balance	$ 5

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Debt (Tables)

3 Months Ended

May 31, 2013

Debt Disclosure [Abstract]

Long-Term Debt

Long-term debt and their related calendar year due dates as of May 31, 2013, February 28, 2013 and May 25, 2012, respectively, were as follows:

(In thousands)	May 31, 2013		February 28, 2013		May 25, 2012
7.375% senior notes, due 2021		$225,000		$225,000		$225,000
Revolving credit facility, due 2017		35,100		61,200		-
6.10% senior notes, due 2028		181		181		181
		$260,281		$286,381		$225,181

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Business Segment Information - Schedule of Reporting Information by Segment (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	May 31, 2013	May 25, 2012
Segment Reporting Information [Line Items]
Total Revenue	$ 497,303	$ 393,106
Segment Earnings (Loss) before Tax	52,546	10,420
Interest expense	(4,312)	(4,376)
Stock-based compensation expense	(2,475)	(1,869)
Operating Segments [Member] | North American Social Expression Products [Member]
Segment Reporting Information [Line Items]
Total Revenue	328,287	308,559
Segment Earnings (Loss) before Tax	66,347	56,218
Operating Segments [Member] | International Social Expression Products [Member]
Segment Reporting Information [Line Items]
Total Revenue	70,801	62,680
Segment Earnings (Loss) before Tax	2,544	(22,557)
Operating Segments [Member] | International Social Expression Products and Intersegment Items, Net [Member]
Segment Reporting Information [Line Items]
Total Revenue	59,709	62,680
Segment Earnings (Loss) before Tax	330	(22,557)
Operating Segments [Member] | Retail Operations [Member]
Segment Reporting Information [Line Items]
Total Revenue	74,718
Segment Earnings (Loss) before Tax	(3,452)
Operating Segments [Member] | AG Interactive [Member]
Segment Reporting Information [Line Items]
Total Revenue	14,700	15,496
Segment Earnings (Loss) before Tax	3,313	3,773
Operating Segments [Member] | Non-reportable segments [Member]
Segment Reporting Information [Line Items]
Total Revenue	19,889	6,371
Segment Earnings (Loss) before Tax	7,382	(58)
Intersegment items [Member]
Segment Reporting Information [Line Items]
Total Revenue	11,092
Segment Earnings (Loss) before Tax	2,214
Unallocated [Member]
Segment Reporting Information [Line Items]
Interest expense	(4,312)	(4,376)
Profit-sharing expense	(3,981)	(2,980)
Stock-based compensation expense	(2,475)	(1,869)
Corporate overhead expense	(10,606)	(17,731)
Unallocated expense, total	$ (21,374)	$ (26,956)

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Debt - Long-Term Debt (Parenthetical) (Detail)	May 31, 2013	Feb. 28, 2013	May 25, 2012
7.375% senior notes, due 2021 [Member]
Debt Instrument [Line Items]
Interest rate of debt	7.375%
Long term debt due year	2021	2021	2021
Revolving credit facility, due 2017 [Member]
Debt Instrument [Line Items]
Long term debt due year	2017	2017	2017
6.10% senior notes, due 2028 [Member]
Debt Instrument [Line Items]
Interest rate of debt	6.10%
Long term debt due year	2028	2028	2028

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Fair Value Measurements

3 Months Ended

May 31, 2013

Fair Value Disclosures [Abstract]

Fair Value Measurements

Note 14 – Fair Value Measurements

Assets and liabilities measured at fair value are classified using the fair value hierarchy based upon the transparency of inputs as of the measurement date. The classification of fair value measurements within the hierarchy is based upon the lowest level of input that is significant to the measurement. The three levels are defined as follows:

— Level 1 – Valuation is based upon quoted prices (unadjusted) in active markets for identical assets or liabilities.

— Level 2 – Valuation is based upon quoted prices for similar assets and liabilities in active markets, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

— Level 3 – Valuation is based upon unobservable inputs that are significant to the fair value measurement.

The following table summarizes the financial assets measured at fair value as of May 31, 2013:

(In thousands)	May 31, 2013	Level 1		Level 2	Level 3
Assets measured on a recurring basis:
Deferred compensation plan assets	$ 11,104		$ 8,683	$ 2,421	$        -
The following table summarizes the financial assets measured at fair value as of February 28, 2013:
(In thousands)	February 28, 2013	Level 1		Level 2	Level 3
Assets measured on a recurring basis:
Deferred compensation plan assets	$10,636		$ 9,175	$ 1,461	$        -
The following table summarizes the financial assets measured at fair value as of May 25, 2012:
(In thousands)	May 25, 2012	Level 1		Level 2	Level 3
Assets measured on a recurring basis:
Deferred compensation plan assets	$  9,505		$ 7,949	$ 1,556	$        -

The deferred compensation plan includes investments in mutual funds and a money market fund. Assets held in mutual funds were recorded at fair value, which was considered a Level 1 valuation as it is based on each fund’s quoted market value per share in an active market. The money market fund was classified as Level 2 as substantially all of the fund’s investments were determined using amortized cost. Although the Corporation is under no obligation to fund employees’ nonqualified accounts, the fair value of the offsetting nonqualified deferred compensation liability is based on the fair value of the plan’s assets.

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Inventories

3 Months Ended

May 31, 2013

Inventory Disclosure [Abstract]

Inventories

Note 10 – Inventories

(In thousands)	May 31, 2013		February 28, 2013		May 25, 2012
Raw materials		$  25,187		$  21,303		$  18,290
Work in process		12,843		6,683		13,070
Finished products		265,262		278,573		243,951
		303,292		306,559		275,311
Less LIFO reserve		84,252		84,166		82,192
		219,040		222,393		193,119
Display materials and factory supplies		18,784		20,054		21,469
		$237,824		$242,447		$214,588

The valuation of inventory under the Last-In, First-Out (“LIFO”) method is made at the end of each fiscal year based on inventory levels and costs at that time. Accordingly, interim LIFO calculations, by necessity, are based on estimates of expected fiscal year-end inventory levels and costs, and are subject to final fiscal year-end LIFO inventory calculations.

Inventory held on location for retailers with scan-based trading arrangements, which is included in finished products, totaled $68.6 million, $59.7 million and $59.0 million as of May 31, 2013, February 28, 2013 and May 25, 2012, respectively.

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Business Segment Information

3 Months Ended

May 31, 2013

Segment Reporting [Abstract]

Business Segment Information

Note 17 – Business Segment Information

The Corporation has North American Social Expression Products, International Social Expression Products, Retail Operations, AG Interactive and non-reportable segments. The North American Social Expression Products and International Social Expression Products segments primarily design, manufacture and sell greeting cards and other related products through various channels of distribution with mass merchandising as the primary channel. At May 31, 2013, the Retail Operations segment operated 396 card and gift retail stores in the United Kingdom. The stores sell products purchased from the International Social Expression Products segment as well as products purchased from other vendors. AG Interactive distributes social expression products, including electronic greetings and a broad range of graphics and digital services and products, through a variety of electronic channels, including Web sites, Internet portals, instant messaging services and electronic mobile devices. The Corporation’s non-reportable operating segments primarily include licensing activities and the design, manufacture and sale of display fixtures.

(In thousands)	Three Months Ended
Total Revenue:	May 31, 2013		May 25, 2012
North American Social Expression Products		$328,287		$308,559
International Social Expression Products		70,801		62,680
Intersegment items		11,092		-
Net		59,709		62,680
Retail Operations		74,718		-
AG Interactive		14,700		15,496
Non-reportable segments		19,889		6,371
		$497,303		$393,106
(In thousands)	Three Months Ended
Segment Earnings (Loss) Before Tax:	May 31, 2013		May 25, 2012
North American Social Expression Products		$ 66,347		$ 56,218
International Social Expression Products		2,544		(22,557)
Intersegment items		2,214		-
Net		330		(22,557)
Retail Operations		(3,452)		-
AG Interactive		3,313		3,773
Non-reportable segments		7,382		(58)
Unallocated
Interest expense		(4,312)		(4,376)
Profit-sharing expense		(3,981)		(2,980)
Stock-based compensation expense		(2,475)		(1,869)
Corporate overhead expense		(10,606)		(17,731)
		(21,374)		(26,956)
		$ 52,546		$ 10,420

“Corporate overhead expense” includes costs associated with corporate operations including, among other costs, senior management, corporate finance, legal, and insurance programs.

Refer to Note 4 for segment information related to certain prior year charges associated with activities and transactions in connection with Clinton Cards that do not have comparative amounts in the current year.

Termination Benefits

Termination benefits are primarily considered part of an ongoing benefit arrangement, accounted for in accordance with ASC Topic 712, “Compensation – Nonretirement Postemployment Benefits,” and are recorded when payment of the benefits is probable and can be reasonably estimated.

The balance of the severance accrual was $4.5 million, $6.0 million and $5.0 million at May 31, 2013, February 28, 2013 and May 25, 2012, respectively. The payments expected within the next twelve months are included in “Accrued liabilities” while the remaining payments beyond the next twelve months are included in “Other liabilities” on the Consolidated Statement of Financial Position.

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Contingency

3 Months Ended

May 31, 2013

Commitments And Contingencies Disclosure [Abstract]

Contingency

Note 15 – Contingency

The Corporation is presently involved in various judicial, administrative, regulatory and arbitration proceedings concerning matters arising in the ordinary course of business, including but not limited to, employment, commercial disputes and other contractual matters, some of which are described below. These matters are inherently subject to many uncertainties regarding the possibility of a loss to the Corporation. These uncertainties will ultimately be resolved when one or more future events occur or fail to occur, confirming the incurrence of a liability or reduction of a liability. In accordance with ASC Topic 450, “Contingencies,” the Corporation accrues for these contingencies by a charge to income when it is both probable that one or more future events will occur confirming the fact of a loss and the amount of the loss can be reasonably estimated. Due to this uncertainty, the actual amount of any loss may ultimately prove to be larger or smaller than the amounts reflected in the Corporation’s Consolidated Financial Statements. Some of these proceedings are at preliminary stages and some of these cases seek an indeterminate amount of damages.

Baker/Collier Litigation

American Greetings Corporation is a defendant in two putative class action lawsuits involving corporate-owned life insurance policies (the “Insurance Policies”): one filed in the Northern District of Ohio on January 11, 2012 by Theresa Baker as the personal representative of the estate of Richard Charles Wolfe (the “Baker Litigation”); and the other filed in the Northern District of Oklahoma on October 1, 2010 by Keith Collier as the personal representative of the estate of Ruthie Collier (the “Collier Litigation”).

In the Baker Litigation, the plaintiff claims that American Greetings Corporation (1) misappropriated its employees’ names and identities to benefit itself; (2) breached its fiduciary duty by using its employees’ identities and personal information to benefit itself; (3) unjustly enriched itself through the receipt of corporate-owned life insurance policy benefits, interest and investment returns; and (4) improperly received insurance policy benefits for the insurable interest in Mr. Wolfe’s life. The plaintiff seeks damages in the amount of all pecuniary benefits associated with the subject Insurance Policies, including investment returns, interest and life insurance policy benefits that American Greetings Corporation received from the deaths of the former employees whose estates form the putative class.

In the Collier Litigation, the plaintiff claims that American Greetings Corporation did not have an insurable interest when it obtained the subject Insurance Policies and wrongfully received the benefits from those policies. The plaintiff seeks damages in the amount of policy benefits received by American Greetings Corporation from the subject Insurance Policies, as well as attorney’s fees, costs and interest. On April 2, 2012, the plaintiff filed its First Amended Complaint, adding misappropriation of employee information and breach of fiduciary duty claims as well as seeking punitive damages. On April 20, 2012, American Greetings Corporation moved to transfer the Collier Litigation to the Northern District of Ohio, where the Baker Litigation is pending. On July 6, 2012, the Court granted American Greetings Corporation’s Motion to Transfer and transferred the case to the Northern District of Ohio, where the Baker Litigation is pending.

On May 22, 2013, the Court preliminarily approved a full and final settlement of all the claims of the Wolfe and Collier estates, as well as the classes they seek to represent. As a result of the preliminary approval, the Court consolidated the two cases and certified a single class that consists of the heirs or estates of the estates and heirs of all former American Greetings Corporation employees (i) who are deceased; (ii) who were not officers or directors of American Greetings; (iii) who were insured under one of the following corporate-owned life insurance plans: Provident Life & Accident 61153, Provident Life & Accident 61159, Mutual Benefit Life Insurance Company 111, Connecticut General ENX219, and Hartford Life Insurance Company 361; and (iv) for whom American Greetings has received a death benefit on or before the date on which the Court enters the Order of Preliminary Approval. Required notices to potential class members and to state attorney generals as required under the Class Action Fairness Act of 2005 were mailed on May 30, 2013. The Court will entertain final approval of the settlement on September 20, 2013. If the settlement is finally approved by the Court, American Greetings Corporation will deposit $12.5 million into a settlement fund to be distributed in its entirety to those members of the class who present valid claims, their counsel, and a settlement administration vendor. This amount was accrued prior to the first quarter of 2014.

Carter/Wolfe/LMPERS Litigation

On September 26, 2012, we announced that our Board of Directors received a non-binding proposal from Zev Weiss, the Corporation’s Chief Executive Officer, and Jeffrey Weiss, the Corporation’s President and Chief Operating Officer, on behalf of themselves and certain other members of the Weiss family and related parties to acquire all of the outstanding Class A common shares and Class B common shares of the Corporation not currently owned by them (the “Going Private Proposal”). On September 27, 2012, Dolores Carter, a purported shareholder, filed a putative shareholder derivative and class action lawsuit (the “Carter Action”) in the Court of Common Pleas in Cuyahoga County, Ohio (the “Cuyahoga County Court”), against American Greetings Corporation and all of the members of the Board of Directors (“Carter Defendants”). The Carter Action alleges, among other things, that the directors of the Corporation breached their fiduciary duties owed to shareholders in evaluating and pursuing the proposal. The Carter Action further alleges claims for aiding and abetting breaches of fiduciary duty. Among other things, the Carter Action seeks declaratory relief. Subsequently, six more lawsuits were filed in the Cuyahoga County Court purporting to advance substantially similar claims on behalf of American Greetings against the members of the Board of Directors and, in certain cases, additional direct claims against American Greetings. One lawsuit was voluntarily dismissed. The other lawsuits, which remain pending, were consolidated by Judge Richard J. McMonagle on December 6, 2012 (amended order dated December 18, 2012) as In re American Greetings Corp. Shareholder Litigation, Lead Case No. CV 12 792421. Lead plaintiffs and lead plaintiffs’ counsel also were appointed.

On April 30, 2013, lead plaintiffs’ counsel filed a Consolidated Class Action Complaint. The Consolidated Complaint brings a single class claim against the members of the Corporation’s Board of Directors for alleged breaches of fiduciary duty and aiding and abetting. The plaintiffs allege that the preliminary proxy statement on Schedule 14A filed with the Securities and Exchange Commission (“SEC”) on April 17, 2013 omits information necessary to permit the Corporation’s shareholders to determine if the Merger is in their best interest, that the controlling shareholders have abused their control of the Corporation, that the special committee appointed to oversee the transaction is not independent, and that the other members of the Board of Directors are also not independent. On June 13, 2013, defendants filed motions to dismiss the Consolidated Class Action Complaint based on plaintiffs’ failure to properly plead their claims as derivative actions, exercise their statutory appraisal rights as the sole remedy for dissatisfaction with the proposed share price, and to overcome the business judgment rule with respect to their breach of fiduciary duty claims. The motions remain pending.

On November 6, 2012, R. David Wolfe, a purported shareholder, filed a putative class action (the “Wolfe Action”) in the United States District Court for the Northern District of Ohio (the “Federal Court”) against certain members of the Weiss Family and the Irving I. Stone Oversight Trust, the Irving Stone Limited Liability Company, the Irving I. Stone Support Foundation, and the Irving I. Stone Foundation (“Stone Entities”) alleging breach of fiduciary duties in proposing and pursuing the proposal, as well as against American Greetings, seeking, among other things, declaratory relief. Shortly thereafter, on November 9, 2012, the Louisiana Municipal Police Employees’ Retirement System also filed a purported class action in the Federal Court (the “LMPERS Action”) asserting substantially similar claims against the same defendants and seeking substantially similar relief.

On November 30, 2012, plaintiffs in the Wolfe and LMPERS Actions filed motions (1) to consolidate the Wolfe and LMPERS Actions, (2) for appointment as co-lead plaintiffs, (3) for appointment of co-lead counsel, and, in the Wolfe Action only, (4) for partial summary judgment. On December 14, 2012, the Corporation filed its oppositions to the motions (a) to consolidate the Wolfe and LMPERS Actions, (b) for appointment as co-lead plaintiffs, and (c) for appointment of co-lead counsel. On the same day, the Corporation also moved to dismiss both the Wolfe and LMPERS Actions. The Corporation answered both complaints on January 8, 2013, and on January 11, 2013, it filed its opposition to the motion for partial summary judgment. On February 14, 2013, the Federal Court dismissed both the Wolfe and LMPERS Actions for lack of subject matter jurisdiction. On March 15, 2013, plaintiffs in both the Wolfe and LMPERS Actions filed notices of appeal with the Sixth Circuit Court of Appeals. On April 18, 2013, plaintiff Wolfe moved to dismiss his appeal, which motion was granted on April 19, 2013. On May 8, 2013, plaintiff LMPERS’s moved to dismiss its appeal as well, which motion was granted.

Plaintiffs in the Wolfe and LMPERS Actions alleged, in part, that Article Seventh of the Corporation’s articles of incorporation prohibited the special committee from, among other things, evaluating the merger. The Corporation considered these allegations and concluded that the Article is co-extensive with Ohio law and thus allows the Corporation to engage in any activity authorized by Ohio law. The Corporation also has consistently construed Article Seventh as permitting directors to approve a transaction so long as they are both disinterested and independent.

On April 17, 2013, R. David Wolfe filed a new derivative and putative class action (“Wolfe Action II”) in the United States District Court for the Northern District of Ohio against the Corporation’s directors, certain members of the Weiss Family, and the Stone Entities, as well as the Corporation as a nominal defendant, challenging the merger as financially and procedurally unfair to the Corporation and its minority shareholders. Mr. Wolfe subsequently filed an Amended Complaint on April 29, 2013. The Wolfe Action II seeks a declaratory judgment that Article Seventh precludes the Board of Directors and special committee from approving the merger. In addition, the Wolfe Action II includes a derivative claim for breach of fiduciary duty against the Corporation’s directors for allegedly violating Article Seventh. Finally, the Wolfe Action II includes both a derivative and class action claim for breach of fiduciary duty against the Weiss Family defendants and the Stone Entities for allegedly seeking to acquire the minority shareholders’ interests at an unfair price. Defendants filed their Motions to Dismiss the Wolfe Action II amended Complaint on July 8, 2013.

Management is unable to estimate a range of reasonably possible losses for these cases in which the damages have not been specified and (i) the proceedings are in the early stages, (ii) there is uncertainty as to the outcome of the pending appeals or motions, and/or (iii) there are significant factual issues to be resolved. However, for these cases, management does not believe, based on currently available information, that the outcomes of these proceedings will have a material adverse effect on the Corporation’s financial condition, though the outcomes could be material to the Corporation’s operating results for any particular period, depending, in part, upon the operating results for such period.

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Document and Entity Information	3 Months Ended
	May 31, 2013	Jul. 05, 2013 Common shares Class A [Member]	Jul. 05, 2013 Common shares Class B [Member]
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	May 31, 2013
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q1
Trading Symbol	AM
Entity Registrant Name	AMERICAN GREETINGS CORP
Entity Central Index Key	0000005133
Current Fiscal Year End Date	--02-28
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		29,294,198	2,912,167

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Income Taxes

3 Months Ended

May 31, 2013

Income Tax Disclosure [Abstract]

Income Taxes

Note 16 – Income Taxes

The Corporation’s provision for income taxes in interim periods is computed by applying its estimated annual effective tax rate against income before income tax expense for the period. In addition, non-recurring or discrete items are recorded during the period in which they occur. The magnitude of the impact that discrete items have on the Corporation’s quarterly effective tax rate is dependent on the level of income in the period. The effective tax rate was 36.4% and 30.4% for the three month periods ended May 31, 2013 and May 25, 2012, respectively. The lower than statutory rate for the three months ended May 25, 2012 was due primarily to the release of reserves upon lapse of the applicable statutes.

At February 28, 2013, the Corporation had unrecognized tax benefits of $21.7 million that, if recognized, would have a favorable effect on the Corporation’s income tax expense of $18.5 million. There were no significant changes to this amount during the first quarter of 2014. It is reasonably possible that the Corporation’s unrecognized tax positions as of February 28, 2013 could decrease $3.1 million during the next twelve months due to anticipated settlements and resulting cash payments related to open years after 1996, which are currently under examination.

The Corporation recognizes interest and penalties accrued on unrecognized tax benefits and refundable income taxes as a component of income tax expense. During the three months ended May 31, 2013, the Corporation recognized net expense of $0.2 million for interest and penalties on unrecognized tax benefits and refundable income taxes. As of May 31, 2013, the total amount of gross accrued interest and penalties related to unrecognized tax benefits less refundable income taxes was a net payable of $4.7 million.

The Corporation is subject to examination by the Internal Revenue Service for tax years 2010 to the present and various U.S. state and local jurisdictions for tax years 1996 to the present. The Corporation is also subject to tax examination in various international tax jurisdictions including Australia, Canada, New Zealand and the United Kingdom for tax years 2006 to the present.

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Retirement Benefits - Additional Information (Detail) (USD $) In Millions, unless otherwise specified				3 Months Ended
	May 31, 2013	Feb. 28, 2013	May 25, 2012	May 31, 2013 Profit-sharing plan [Member]	May 31, 2012 Profit-sharing plan [Member]	May 31, 2013 Defined contribution plans [Member] Domestic [Member]	May 31, 2012 Defined contribution plans [Member] Domestic [Member]
Defined Benefit Plan Disclosure [Line Items]
Corporate contributions to the profit-sharing plan				$ 4.0	$ 3.0	$ 1.3	$ 1.3
Liability for postretirement benefits other than pensions	16.8	15.7	26.2
Long-term liability for pension benefits	$ 81.2	$ 81.4	$ 75.6

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Retirement Benefits - Components of Periodic Benefit Cost for Corporation's Defined Benefit Pension and Postretirement Benefits Plans (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	May 31, 2013	May 25, 2012
Defined Benefit Pension Plans [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 320	$ 334
Interest cost	1,742	1,844
Expected return on plan assets	(1,574)	(1,613)
Amortization of prior service cost (credit)	51	61
Amortization of actuarial loss (gain)	917	816
Defined Benefit Plan, Net Periodic Benefit Cost, Total	1,456	1,442
Postretirement Benefits Plans [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	138	213
Interest cost	613	800
Expected return on plan assets	(763)	(840)
Amortization of prior service cost (credit)	(325)	(519)
Amortization of actuarial loss (gain)	(213)
Defined Benefit Plan, Net Periodic Benefit Cost, Total	$ (550)	$ (346)