Business Segment Information

9 Months Ended

Nov. 25, 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 November 25, 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						Nine Months Ended
(In thousands)	November 25, 2016			November 27, 2015			November 25, 2016			November 27, 2015
Total Revenue:
North American Social Expression Products	$	338,017		$	348,394		$	931,246		$	969,554
International Social Expression Products		68,271			83,906			167,153			211,932
Intersegment items		(26,192	)		(27,490	)		(51,526	)		(49,089	)
Net		42,079			56,416			115,627			162,843
Retail Operations		50,021			62,279			170,582			199,590
AG Interactive		13,812			14,420			39,855			41,586
Non-reportable segment		1,963			2,522			4,903			4,929
	$	445,892		$	484,031		$	1,262,213		$	1,378,502

	Three Months Ended						Nine Months Ended
(In thousands)	November 25, 2016			November 27, 2015			November 25, 2016			November 27, 2015
Segment Earnings (Loss) Before Tax:
North American Social Expression Products	$	30,129		$	31,123		$	127,901		$	150,459
International Social Expression Products		6,529			1,765			4,024			(3,294	)
Intersegment items		(5	)		(3,012	)		(531	)		(1,382	)
Net		6,524			(1,247	)		3,493			(4,676	)
Retail Operations		(13,340	)		(11,641	)		(31,495	)		(32,399	)
AG Interactive		4,504			5,198			12,638			15,345
Non-reportable segment		129			264			(245	)		59,677
Unallocated
Interest expense		(8,524	)		(6,467	)		(20,061	)		(21,066	)
Profit-sharing and 401(k) match expense		(3,451	)		(3,000	)		(11,937	)		(8,931	)
Corporate overhead expense		(7,760	)		(4,670	)		(17,561	)		(6,518	)
		(19,735	)		(14,137	)		(49,559	)		(36,515	)
	$	8,211		$	9,560		$	62,733		$	151,891

“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 nine month periods ended November 25, 2016, this includes income recognized from state tax credits of $1.1 million and $3.2 million, respectively, as compared to $1.0 million and $7.5 million for the three and nine month periods ended November 27, 2015. See Note 6 for further information.

Also included in “Corporate overhead expense” for both the three and nine month periods ended November 27, 2015, is a $1.1 million reduction of the net gain recognized on the 2015 sale of AGI In-Store. See Note 4 for further information.

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.

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 $2.8 million, $3.5 million and $3.1 million at November 25, 2016, February 29, 2016 and November 27, 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.