Business Segment Information

6 Months Ended

Aug. 28, 2015

Segment Reporting [Abstract]

Business Segment Information

Note 18 – 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 segment primarily designs, manufactures and sells greeting cards and other related products through various channels of distribution with mass merchandising as the primary channel. The International Social Expression Products segment primarily designs and sells greeting cards and other related products through various channels of distribution and is located principally in the United Kingdom, Australia and New Zealand. At August 28, 2015, the Retail Operations segment operated 405 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 and electronic mobile devices. For the three and six months ended August 28, 2015, the Corporation’s Non-reportable segment primarily includes licensing activities. For the three and six months ended August 29, 2014, the Non-reportable segment also included the design, manufacture and sale of display fixtures. The display fixtures business was sold on the last day of the quarter ended August 29, 2014. See Note 4 for further information.

	Three Months Ended						Six Months Ended
(In thousands)	August 28, 2015			August 29, 2014			August 28, 2015			August 29, 2014
Total Revenue:
North American Social Expression Products	$	285,556		$	276,990		$	621,160		$	606,047
International Social Expression Products		65,858			68,451			128,026			143,490
Intersegment items		(11,286	)		(11,234	)		(21,599	)		(21,299	)
Net		54,572			57,217			106,427			122,191
Retail Operations		65,503			69,741			137,311			148,905
AG Interactive		13,736			14,445			27,166			28,944
Non-reportable segment		1,661			14,032			2,407			29,922
	$	421,028		$	432,425		$	894,471		$	936,009

	Three Months Ended						Six Months Ended
(In thousands)	August 28, 2015			August 29, 2014			August 28, 2015			August 29, 2014
Segment Earnings (Loss) Before Tax:
North American Social Expression Products	$	46,209		$	27,830		$	119,336		$	97,194
International Social Expression Products		(49	)		(6	)		(5,059	)		3,756
Intersegment items		879			570			1,630			(1,740	)
Net		830			564			(3,429	)		2,016
Retail Operations		(12,615	)		(14,563	)		(20,758	)		(18,603	)
AG Interactive		5,276			5,964			10,147			11,376
Non-reportable segment		(934	)		(1,306	)		59,413			2,709
Unallocated
Interest expense		(6,486	)		(9,255	)		(14,599	)		(18,249	)
Profit-sharing plan expense		(1,675	)		(1,389	)		(3,350	)		(5,468	)
Corporate overhead expense		393			26,662			(4,429	)		18,968
		(7,768	)		16,018			(22,378	)		(4,749	)
	$	30,998		$	34,507		$	142,331		$	89,943

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

For the six months ended August 28, 2015, Non-reportable segment earnings includes a gain of $61.6 million from the sale of Strawberry Shortcake. See Note 4 for further information.

For both the three and six month periods ended August 28, 2015, “Corporate overhead expense” includes income recognized from state tax credits of $6.5 million. See Note 6 for further information.

During the prior year second quarter, the Corporation sold its current world headquarters location and incurred a non-cash loss on disposal of $15.5 million, of which $13.3 million was recorded within the North American Social Expression Products segment and $2.2 million was recorded in “Corporate overhead expense”. See Note 4 for further information

For both the three and six month periods ended August 29, 2014, “Corporate overhead expense” included the gain on sale of AGI In-Store of $38.8 million. See Note 4 for further information.

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 $2.1 million, $4.3 million and $3.5 million at August 28, 2015, February 28, 2015 and August 29, 2014, 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.