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Other Liabilities
9 Months Ended
Nov. 25, 2016
Other Liabilities Disclosure [Abstract]  
Other Liabilities

Note 11 – Other Liabilities

Included in the Consolidated Statement of Financial Position at November 25, 2016 is a lease obligation related to an operating lease with AG HQ Creative Studios, LLC (“AGHQCS”), a special purpose, wholly-owned subsidiary of H L & L Property Company (“H L & L”), an indirect affiliate of the Corporation, for the Creative Studios Buildings (as defined in Note 17) that now function as the Corporation’s new world headquarters. Due to, among other things, the Corporation’s involvement in the construction of the Creative Studios Buildings, the Corporation was required to be treated, for accounting purposes only, as the “deemed owner” of the Creative Studios Buildings during the construction period, in accordance with ASC 840-40 “Lessee Involvement in Asset Construction.” During the third quarter of 2017, construction was substantially completed. Upon completion, the Corporation did not meet the sale-leaseback criteria for derecognition of the building assets and liabilities. Therefore, the operating lease is accounted for as a financing lease obligation, even though the Corporation does not own the asset and is not the obligor on the corresponding debt.

The lease payments made by the Corporation represent payments of principal and interest on the underlying lease obligation. The interest portion of the lease payment will be reflected as “Interest expense” on the Consolidated Statement of Income and the remaining portion of the lease payment is reflected on the Consolidated Statement of Financial Position as a reduction of the outstanding lease obligation. The interest portion and the principal portion of the lease payment are presented as cash outflows within “Operating Activities” and “Financing Activities,” respectively, on the Consolidated Statement of Cash Flows.

As of November 25, 2016 the carrying value of the Creative Studios Buildings totaled $113.3 million and was included in “Property, plant and equipment – net” on the Corporation’s Consolidated Statement of Financial Position. The corresponding lease obligation, included in “Accrued liabilities” and “Other liabilities” on the Corporation’s Statement of Financial Position, totaled $1.6 million and $112.1 million, respectively. At February 29, 2016 and November 27, 2015, prior to construction completion, the asset and corresponding liability were $94.7 million and $73.3 million, respectively. See Note 17 for further information.