Business Segment Information

6 Months Ended

Aug. 26, 2016

Segment Reporting [Abstract]

Business Segment Information

Note 18 – Business Segment Information

The Corporation operates in five business segments: North American Social Expression Products, International Social Expression Products, Retail Operations, AG Interactive and Non-reportable. 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 26, 2016, the Retail Operations segment operated 393 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 Corporation’s Non-reportable operating segment primarily includes licensing activities.

	Three Months Ended						Six Months Ended
(In thousands)	August 26, 2016			August 28, 2015			August 26, 2016			August 28, 2015
Total Revenue:
North American Social Expression Products	$	270,769		$	285,556		$	593,229		$	621,160
International Social Expression Products		48,296			65,858			98,882			128,026
Intersegment items		(11,753	)		(11,286	)		(25,334	)		(21,599	)
Net		36,543			54,572			73,548			106,427
Retail Operations		55,149			65,503			120,561			137,311
AG Interactive		13,112			13,736			26,043			27,166
Non-reportable		1,440			1,661			2,940			2,407
	$	377,013		$	421,028		$	816,321		$	894,471

	Three Months Ended						Six Months Ended
(In thousands)	August 26, 2016			August 28, 2015			August 26, 2016			August 28, 2015
Segment Earnings (Loss) Before Tax:
North American Social Expression Products	$	37,627		$	46,209		$	97,772		$	119,336
International Social Expression Products		(1,394	)		(49	)		(2,505	)		(5,059	)
Intersegment items		148			879			(526	)		1,630
Net		(1,246	)		830			(3,031	)		(3,429	)
Retail Operations		(10,693	)		(12,615	)		(18,155	)		(20,758	)
AG Interactive		3,926			5,276			8,134			10,147
Non-reportable		(438	)		(934	)		(374	)		59,413
Unallocated
Interest expense		(5,940	)		(6,486	)		(11,537	)		(14,599	)
401(k) match and profit-sharing expense		(3,425	)		(3,020	)		(8,486	)		(5,931	)
Corporate overhead expense		(4,537	)		1,738			(9,801	)		(1,848	)
		(13,902	)		(7,768	)		(29,824	)		(22,378	)
	$	15,274		$	30,998		$	54,522		$	142,331

“Corporate overhead expense” includes costs associated with corporate operations including, among other costs, senior management, corporate finance, legal, and insurance programs. For the three and six month periods ended August 26, 2016, this includes income recognized from state tax credits of $1.1 million and $2.1 million, respectively, as compared to $6.5 million for both the three and six month periods ended August 28, 2015. See Note 6 for further information.

For the six months ended August 28, 2015, Non-reportable segment earnings included a gain of $61.6 million from the sale of Strawberry Shortcake. 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 $2.6 million, $3.5 million and $2.1 million at August 26, 2016, February 29, 2016 and August 28, 2015, 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.