Business Segment Information

9 Months Ended

Nov. 27, 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 November 27, 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. The Non-reportable operating segment primarily includes licensing activities and, prior to the disposition of AGI In-Store on August 29, 2014, the design, manufacture and sale of display fixtures. See Note 4 for further information.

	Three Months Ended						Nine Months Ended
(In thousands)	November 27, 2015			November 28, 2014			November 27, 2015			November 28, 2014
Total Revenue:
North American Social Expression Products	$	348,394		$	360,704		$	969,554		$	966,751
International Social Expression Products		83,906			96,424			211,932			239,914
Intersegment items		(27,490	)		(28,234	)		(49,089	)		(49,533	)
Net		56,416			68,190			162,843			190,381
Retail Operations		62,279			64,398			199,590			213,303
AG Interactive		14,420			15,149			41,586			44,093
Non-reportable segment		2,522			5,617			4,929			35,539
	$	484,031		$	514,058		$	1,378,502		$	1,450,067

	Three Months Ended						Nine Months Ended
(In thousands)	November 27, 2015			November 28, 2014			November 27, 2015			November 28, 2014
Segment Earnings (Loss) Before Tax:
North American Social Expression Products	$	31,123		$	37,613		$	150,459		$	134,807
International Social Expression Products		1,765			8,547			(3,294	)		12,303
Intersegment items		(3,012	)		(5,362	)		(1,382	)		(7,102	)
Net		(1,247	)		3,185			(4,676	)		5,201
Retail Operations		(11,641	)		(16,578	)		(32,399	)		(35,181	)
AG Interactive		5,198			6,131			15,345			17,507
Non-reportable segment		264			5,080			59,677			7,789
Unallocated
Interest expense		(6,467	)		(9,533	)		(21,066	)		(27,782	)
Profit-sharing and 401(k) match expense		(3,000	)		(2,988	)		(8,931	)		(11,079	)
Corporate overhead expense		(4,670	)		(5,388	)		(6,518	)		16,203
		(14,137	)		(17,909	)		(36,515	)		(22,658	)
	$	9,560		$	17,522		$	151,891		$	107,465

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

For the nine months ended November 27, 2015, Non-reportable segment earnings includes a net gain of $61.2 million from the sale of Strawberry Shortcake. See Note 4 for further information.

For both the three and nine month periods ended November 27, 2015, “Corporate overhead expense” includes income recognized from state tax credits of $1.0 million and $7.5 million, respectively. See Note 6 for further information.

For both the three and nine month periods ended November 28, 2014, “Corporate overhead expense” included interest income of $2.5 million related to the Clinton Cards liquidation. See Note 6 for further information.

For both the three and nine month periods ended November 27, 2015, “Corporate overhead expense” includes an adjustment to the net gain recognized on the prior year sale of AGI In-Store of ($1.1) million. For the nine months ended November 28, 2014, “Corporate overhead expense” included a net gain on sale of AGI In-Store of $38.7 million. See Note 4 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

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 $3.1 million, $4.3 million and $4.5 million at November 27, 2015, February 28, 2015 and November 28, 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.