NOTE 3 – ACQUISITIONS AND DISPOSITIONS

Sale of Strawberry Shortcake

In February 2015, the Corporation entered into an agreement to sell its Strawberry Shortcake character property and related intangible assets and licensing agreements (collectively, “Strawberry Shortcake”). Cash proceeds of $105,000, which the Corporation received upon completion of the sale in March 2015, are classified within “Investing Activities” on the Consolidated Statement of Cash Flows, and a gain of $61,234 is reflected in “Other operating income – net” on the Consolidated Statement of Income for the year ended February 29, 2016.

As the agreement was entered into prior to the end of 2015, the assets and liabilities related to Strawberry Shortcake, and previously included in the Corporation’s non-reportable segment, were classified as held for sale at February 28, 2015. The major classes of assets and liabilities held for sale included in the Consolidated Statement of Financial Position as of February 28, 2015 were as follows:


	Assets
Prepaid expenses and other	$	229
Other assets		35,300

	$	35,529


	Liabilities
Accrued liabilities	$	500
Deferred revenue		1,212

	$	1,712

Character Property Rights Acquisition

On December 18, 2014, the Corporation, in order to secure complete control and ownership over the rights in certain character properties, including the Strawberry Shortcake property, that the Corporation previously granted to a third party (the “Character Property Rights”), paid $37,700 to purchase these rights, and recorded the rights as indefinite-lived intangible assets. As of February 28, 2015, due to the pending sale of Strawberry Shortcake, the majority of these assets were classified as “Assets held for sale” on the Consolidated Statement of Financial Position. In addition to the initial purchase price paid, the purchase agreement provided for an additional payment of up to $4,000, which was contingent upon the level of proceeds received by the Corporation from any subsequent sale of the acquired properties. Consequently, an additional payment of $2,800 was paid to the seller in 2016 as a result of the sale of Strawberry Shortcake. The cash payments in 2016 and 2015 to acquire the Character Property Rights are reflected within “Investing Activities” on the Consolidated Statement of Cash Flows.

Sale of AGI In-Store

On August 29, 2014, the Corporation completed the sale of its wholly-owned display fixtures business, AGI In-Store, for $73,659 in cash, subject to closing date working capital and certain agreed-upon inventory adjustments. A gain of $35,004, which included the final working capital adjustments of $3,200, was recognized from the sale in 2015. During 2016, the Corporation recorded an adjustment of $1,073 for the repayment of proceeds related to certain non-saleable closing-date inventory that the buyer had the right to return to the Corporation after twelve months from the date of sale. The gain recognized in 2015 and the adjustment recorded in 2016 is included in “Other operating income – net” on the Consolidated Statement of Income. Cash proceeds and repayments in 2015 and 2016, respectively, resulting from the sale are classified within “Investing Activities” on the Consolidated Statement of Cash Flows.

Sale of World Headquarters

On July 1, 2014, the Corporation sold its current world headquarters location and entered into an operating lease arrangement with the new owner of the building. The Corporation expects to remain in its current location until the construction of the new world headquarters is complete, which is anticipated to occur in calendar year 2016. Net of transaction costs, the Corporation received cash proceeds of $13,535 from the sale, and recorded a non-cash loss on disposal of $15,544 during the prior year second quarter, which is reflected in “Other operating income – net” on the Consolidated Statement of Income. The cash proceeds are included in “Proceeds from sale of fixed assets” on the Consolidated Statement of Cash Flows.