10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended August 30, 2013

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission file number 1-13859

AMERICAN GREETINGS CORPORATION

(Exact name of registrant as specified in its charter)

Ohio	34-0065325
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

One American Road, Cleveland, Ohio	44144
(Address of principal executive offices)	(Zip Code)

(216) 252-7300

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ¨    No  x

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

All of the outstanding capital stock of the registrant is held by Century Intermediate Holding Company. As of October 1, 2013, 100 shares of the registrant’s common stock, par value $0.01 per share, were outstanding.

AMERICAN GREETINGS CORPORATION

INDEX

	Page Number
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements		3
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		25
Item 3. Quantitative and Qualitative Disclosures About Market Risk		36
Item 4. Controls and Procedures		36
PART II—OTHER INFORMATION
Item 1. Legal Proceedings		38
Item 1A. Risk Factors		40
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		41
Item 6. Exhibits		41
SIGNATURES		42
EXHIBITS

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

AMERICAN GREETINGS CORPORATION

CONSOLIDATED STATEMENT OF OPERATIONS

(Thousands of dollars except share and per share amounts)

	(Unaudited)
	Three Months Ended						Six Months Ended
	August 30, 2013			August 24, 2012			August 30, 2013			August 24, 2012
Net sales	$	413,667		$	386,518		$	904,212		$	775,771
Other revenue		6,754			7,318			13,512			11,171
Total revenue		420,421			393,836			917,724			786,942
Material, labor and other production costs		176,674			176,732			380,511			340,596
Selling, distribution and marketing expenses		155,007			148,995			325,346			276,158
Administrative and general expenses		82,684			70,870			153,764			151,038
Other operating (income) expense – net		(961	)		1,470			(4,279	)		10,994
Operating income (loss)		7,017			(4,231	)		62,382			8,156
Interest expense		5,433			4,434			9,745			8,810
Interest income		(73	)		(94	)		(193	)		(232	)
Other non-operating income – net		(4,025	)		(2,500	)		(5,398	)		(4,771	)
Income (loss) before income tax expense (benefit)		5,682			(6,071	)		58,228			4,349
Income tax expense (benefit)		10,903			(1,817	)		30,056			1,353
Net (loss) income	$	(5,221	)	$	(4,254	)	$	28,172		$	2,996

See notes to consolidated financial statements (unaudited).

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AMERICAN GREETINGS CORPORATION

CONSOLIDATED STATEMENT OF COMPREHENSIVE (LOSS) INCOME

(Thousands of dollars)

	(Unaudited)
	Three Months Ended						Six Months Ended
	August 30, 2013			August 24, 2012			August 30, 2013			August 24, 2012
Net (loss) income	$	(5,221	)	$	(4,254	)	$	28,172		$	2,996
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments		495			5,629			(1,660	)		(2,771	)
Pension and postretirement benefit adjustments		440			23			817			498
Unrealized loss on securities		(5	)		(1	)		(4	)		(1	)
Other comprehensive income (loss), net of tax		930			5,651			(847	)		(2,274	)
Comprehensive (loss) income	$	(4,291	)	$	1,397		$	27,325		$	722

See notes to consolidated financial statements (unaudited).

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AMERICAN GREETINGS CORPORATION

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

(Thousands of dollars)

	(Unaudited) August 30, 2013			(Note 1) February 28, 2013			(Unaudited) August 24, 2012
ASSETS
Current assets
Cash and cash equivalents	$	48,900		$	86,059		$	61,743
Trade accounts receivable, net		95,492			105,497			97,564
Inventories		292,158			242,447			275,978
Deferred and refundable income taxes		50,989			72,560			78,713
Prepaid expenses and other		141,810			155,343			134,114
Total current assets		629,349			661,906			648,112
Other assets		435,037			456,751			472,613
Deferred and refundable income taxes		89,079			92,354			120,103
Property, plant and equipment – at cost		847,205			821,759			773,709
Less accumulated depreciation		467,680			449,307			442,135
Property, plant and equipment – net		379,525			372,452			331,574
	$	1,532,990		$	1,583,463		$	1,572,402
LIABILITIES AND SHAREHOLDER’S EQUITY
Current liabilities
Debt due within one year	$	15,000		$	—		$	—
Accounts payable		122,874			119,777			135,247
Accrued liabilities		71,123			80,098			66,336
Accrued compensation and benefits		42,710			69,309			55,122
Income taxes payable		7,253			4,968			14,476
Deferred revenue		25,945			31,851			30,517
Other current liabilities		68,145			62,593			46,837
Total current liabilities		353,050			368,596			348,535
Long-term debt		563,480			286,381			280,181
Other liabilities		224,622			225,044			262,923
Deferred income taxes and noncurrent income taxes payable		21,912			21,565			22,008
Shareholders’ equity
Common shares – par value $.01 per share:
100 shares issued and outstanding		—			—			—
Common shares – Class A		—			29,088			29,887
Common shares – Class B		—			2,883			2,860
Capital in excess of par value		240,000			522,425			517,019
Treasury stock		—			(1,093,782	)		(1,078,922	)
Accumulated other comprehensive loss		(17,980	)		(17,133	)		(14,104	)
Retained earnings		147,906			1,238,396			1,202,015
Total shareholder’s equity		369,926			681,877			658,755
	$	1,532,990		$	1,583,463		$	1,572,402

See notes to consolidated financial statements (unaudited).

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AMERICAN GREETINGS CORPORATION

CONSOLIDATED STATEMENT OF CASH FLOWS

(Thousands of dollars)

	(Unaudited) Six Months Ended
	August 30, 2013			August 24, 2012
OPERATING ACTIVITIES:
Net income	$	28,172		$	2,996
Adjustments to reconcile net income to cash flows from operating activities:
Stock-based compensation		8,090			4,841
Net (gain) loss on disposal of fixed assets		(113	)		154
Depreciation and intangible assets amortization		26,230			23,310
Provision for doubtful accounts		176			17,567
Clinton Cards secured debt (recovery) impairment		(2,428	)		10,043
Deferred income taxes		10,630			(2,379	)
Gain related to Party City investment		(3,262	)		(3,152	)
Other non-cash charges		1,102			619
Changes in operating assets and liabilities, net of acquisitions:
Trade accounts receivable		9,491			(1,684	)
Inventories		(49,601	)		(51,668	)
Other current assets		16,053			(12,188	)
Receivable from parent		(13,983	)		—
Income taxes		17,644			(9,532	)
Deferred costs – net		24,403			34,422
Accounts payable and other liabilities		(39,718	)		35,854
Other – net		1,183			(323	)
Total Cash Flows From Operating Activities		34,069			48,880
INVESTING ACTIVITIES:
Property, plant and equipment additions		(31,977	)		(46,058	)
Cash payments for business acquisitions, net of cash acquired		—			621
Proceeds from sale of fixed assets		293			488
Purchase of Clinton Cards debt		—			(56,560	)
Proceeds from Clinton Cards administration		4,982			—
Proceeds related to Party City investment		12,105			—
Total Cash Flows From Investing Activities		(14,597	)		(101,509	)
FINANCING ACTIVITIES:
Proceeds from revolving lines of credit		205,036			176,350
Repayments on revolving lines of credit		(252,336	)		(121,350	)
Proceeds from term loan		339,250			—
Issuance, exercise or settlement of share-based payment awards		(4,487	)		(591	)
Tax benefit (deficiency) from share-based payment awards		279			(413	)
Contribution from parent		240,000			—
Purchase of treasury shares		—			(60,700	)
Payments to shareholders to effect merger		(568,303	)		—
Dividends to shareholders		(9,614	)		(10,440	)
Debt issuance costs		(6,545	)		—
Total Cash Flows From Financing Activities		(56,720	)		(17,144	)
EFFECT OF EXCHANGE RATE CHANGES ON CASH		89			(922	)
DECREASE IN CASH AND CASH EQUIVALENTS		(37,159	)		(70,695	)
Cash and Cash Equivalents at Beginning of Year		86,059			132,438
Cash and Cash Equivalents at End of Period	$	48,900		$	61,743

See notes to consolidated financial statements (unaudited).

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CONSOLIDATED STATEMENT OF SHAREHOLDER’S EQUITY

Six Month Period ended August 30, 2013

Thousands of dollars except per share amounts

															Accumulated
									Capital in						Other
	Common Shares								Excess of			Treasury			Comprehensive			Retained
	Common		Class A			Class B			Par Value			Stock			Loss			Earnings			Total
BALANCE MARCH 1, 2013	$	—	$	29,088		$	2,883		$	522,425		$	(1,093,782	)	$	(17,133	)	$	1,238,396		$	681,877
Net income		—		—			—			—			—			—			28,172			28,172
Other comprehensive loss		—		—			—			—			—			(847	)		—			(847	)
Cash dividends—$0.30 per share		—		—			—			—			—			—			(9,614	)		(9,614	)
Sale of shares under benefit plans, including tax benefits		—		223			28			560			342			—			(1,080	)		73
Contribution from parent		—		—			—			240,000			—			—			—			240,000
Payments to shareholders to effect merger		—		(29,305	)		(606	)		—			(538,392	)		—			—			(568,303	)
Cancellation of Family Shareholders shares		—		(5	)		(2,307	)		—			—			—			2,312			—
Stock compensation expense		—		—			—			4,125			—			—			—			4,125
Stock grants and other		—		(1	)		2			2			25			—			(5	)		23
Conversion of restricted stock and performance share programs to cash-settled/liability-based		—		—			—			(5,242	)		—			—			—			(5,242	)
Settlement of stock options		—		—			—			(3,933	)		—			—			—			(3,933	)
Settlement of non-executive director awards		—		—			—			(371	)		—			—			—			(371	)
Cancellation of Family Shareholders restricted stock and performance shares		—		—			—			3,966			—			—			—			3,966
Cancellation of treasury shares		—		—			—			(521,532	)		1,631,807			—			(1,110,275	)		—
BALANCE AUGUST 30, 2013	$	—	$	—		$	—		$	240,000		$	—		$	(17,980	)	$	147,906		$	369,926

See notes to consolidated financial statements (unaudited).

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AMERICAN GREETINGS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Three and Six Months Ended August 30, 2013 and August 24, 2012

Note 1 – Basis of Presentation

The accompanying unaudited consolidated financial statements of American Greetings Corporation and its subsidiaries (the “Corporation”) have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary to fairly present financial position, results of operations and cash flows for the periods have been included. On August 9, 2013, the Corporation completed a merger whereby the Corporation was acquired by Century Intermediate Holding Company, a company that was formed by the Chairman of the Board, the co-Chief Executive Officers of the Corporation and certain other members of the Weiss family and related entities. See Note 3 for further information. As a result of the merger, the Corporation’s equity is no longer publicly traded. As such, earnings per share information is not required, and therefore prior period earnings per share information is not included in this Form 10-Q.

The Corporation’s fiscal year ends on February 28 or 29. References to a particular year refer to the fiscal year ending in February of that year. For example, 2013 refers to the year ended February 28, 2013. The Corporation’s subsidiary, AG Retail Cards Limited, which operates the recently acquired retail stores in the United Kingdom (also referred to herein as “UK”), is consolidated on a one-month lag corresponding with its fiscal year-end of February 1 for 2014. See Note 4 for further information.

The Corporation’s first fiscal quarter begins each year on March 1. The Corporation’s fiscal quarters generally end on the last Friday of the month in which the fiscal quarter ends. In the current year, the first quarter ended on May 31, 2013 and consisted of 92 days. The prior year first quarter ended on May 25, 2012 and consisted of 86 days. This resulted in six additional selling days in the current year first quarter. This fiscal timing will not impact the full year results as the current year fourth quarter will consist of six less days compared to the prior year fourth quarter.

These interim financial statements should be read in conjunction with the Corporation’s financial statements and notes thereto included in its Annual Report on Form 10-K for the year ended February 28, 2013, from which the Consolidated Statement of Financial Position at February 28, 2013, presented herein, has been derived. Certain amounts in the prior year financial statements have been reclassified to conform to the 2014 presentation. These reclassifications had no material impact on financial position, earnings or cash flows.

The Corporation’s investments in less than majority-owned companies in which it has the ability to exercise significant influence over the operation and financial policies are accounted for using the equity method except when they qualify as variable interest entities (“VIE”) and the Corporation is the primary beneficiary, in which case, the investments are consolidated in accordance with Accounting Standards Codification (“ASC”) Topic 810 (“ASC 810”), “Consolidation.” Investments that do not meet the above criteria are accounted for under the cost method.

The Corporation holds an approximately 15% equity interest in Schurman Fine Papers (“Schurman”), which is a VIE as defined in ASC 810. Schurman owns and operates specialty card and gift retail stores in the United States and Canada. The stores are primarily located in malls and strip shopping centers. During the current period, the Corporation reassessed the variable interests in Schurman and determined that a third party holder of variable interests has the controlling financial interest in the VIE and thus, the third party, not the Corporation, is the primary beneficiary. In completing this assessment, the Corporation identified the activities that it considers most significant to the future economic success of the VIE and determined that it does not have the power to direct those activities. As such, Schurman is not consolidated in the Corporation’s results. The Corporation’s maximum exposure to loss as it relates to Schurman as of August 30, 2013 includes:

• the cost method investment in the equity of Schurman of $1.9 million;

• the limited guaranty (“Liquidity Guaranty”) of Schurman’s indebtedness of $10.0 million;

8

• normal course of business trade and other accounts receivable due from Schurman of $25.7 million, the balance of which fluctuates throughout the year due to the seasonal nature of the business; and

• the operating leases currently subleased to Schurman, the aggregate lease payments for the remaining life of which was $9.4 million, $11.8 million and $17.7 million as of August 30, 2013, February 28, 2013 and August 24, 2012, respectively.

The Corporation provides Schurman limited credit support through the provision of a Liquidity Guaranty in favor of the lenders under Schurman’s senior revolving credit facility (the “Senior Credit Facility”). Pursuant to the terms of the Liquidity Guaranty, the Corporation has guaranteed the repayment of up to $10.0 million of Schurman’s borrowings under the Senior Credit Facility to help ensure that Schurman has sufficient borrowing availability under this facility. The Liquidity Guaranty is required to be backed by a letter of credit for the term of the Liquidity Guaranty, which is currently anticipated to end in July 2016. The Corporation’s obligations under the Liquidity Guaranty generally may not be triggered unless Schurman’s lenders under its Senior Credit Facility have substantially completed the liquidation of the collateral under Schurman’s Senior Credit Facility, or 91 days after the liquidation is started, whichever is earlier, and will be limited to the deficiency, if any, between the amount owed and the amount collected in connection with the liquidation. There was no triggering event or liquidation of collateral as of August 30, 2013 requiring the use of the Liquidity Guaranty. The Corporation is not aware of any events or changes in circumstances that had occurred during the second quarter of 2014 that the Corporation believes are reasonably likely to have had a significant adverse effect on the carrying amount of the Schurman investment.

In addition, the Corporation held an $8.8 million investment in the common stock of Party City Holdings, Inc (“Party City”), which was accounted for under the cost method. On August 1, 2013, the Corporation received a cash distribution from Party City totaling $12.1 million, which was in part a return of capital that reduced the carrying amount of the investment to zero, the remainder of which is included in “Other non-operating (income) expense – net” on the Consolidated Statement of Operations. See Note 7 for further information.

Note 2 – Seasonal Nature of Business

A significant portion of the Corporation’s business is seasonal in nature. Therefore, the results of operations for interim periods are not necessarily indicative of the results for the fiscal year taken as a whole.

Note 3 – Merger

At a special meeting of the Corporation’s shareholders held on August 7, 2013, the shareholders voted to adopt the Agreement and Plan of Merger, as amended, dated March 29, 2013, among the Corporation, Century Intermediate Holding Company, a Delaware corporation (“Parent”), and Century Merger Company, an Ohio corporation and a wholly-owned subsidiary of Parent (“Merger Sub”), and the merger contemplated thereby (the “Merger”). On August 9, 2013, the Corporation completed the Merger. As a result of the Merger, the Corporation is now wholly owned by Parent, which is owned by Morry Weiss, the Chairman of the Board of the Corporation, Zev Weiss, a co-Chief Executive Officer of the Corporation, Jeff Weiss, a co-Chief Executive Officer of the Corporation, and certain other members of the Weiss family and related entities (“Family Shareholders”).

In connection with the Merger, common shares held by the shareholders of the Corporation, other than the Family Shareholders, were converted into the right to receive $19.00 per share in cash. Common shares held by the Family Shareholders were contributed to Parent as equity and thereafter cancelled for no consideration. As a result of the Merger, all formerly outstanding and treasury Class A and Class B common shares have been cancelled. As described in the Agreement and Plan of Merger, all stock based compensation plans of the Corporation were modified, settled or cancelled as a result of the Merger. All outstanding stock based compensation related to the Family Shareholders was cancelled without consideration. For employee stock based compensation, other than Family Shareholder employees, all outstanding stock options were or will be settled for cash and the performance share and restricted stock unit programs were converted into cash programs, with any performance shares and restricted stock units being converted to the right to receive $19.00 per share in the event that the performance share or restricted stock units are earned by the employee at a future date.

9

The Corporation incurred costs associated with the Merger which included transaction costs and incremental compensation expense related to the settlement of stock options and modification and cancellation of outstanding restricted stock units and performance shares. The charges incurred in the three and six months ended August 30, 2013 associated with the Merger that do not have comparative amounts in the prior year period are reflected on the Consolidated Statement of Operations as follows:

	Three Months Ended						Six Months Ended
	August 30, 2013						August 30, 2013
(In millions)	Incremental compensation expense		Transaction costs		Total		Incremental compensation expense		Transaction costs		Total
Administrative and general expenses	$	9.7	$	12.6	$	22.3	$	9.7	$	17.2	$	26.9

These charges are included in the Corporation’s Unallocated segment.

The Corporation will continue to apply its historical basis of accounting in its stand-alone financial statements after the Merger. This is based on the determination under Accounting Standards Codification Topic 805, “Business Combinations,” that Parent is the acquiring entity and the determination under SEC Staff Accounting Bulletin No. 54, codified as Topic 5J, “Push Down Basis of Accounting Required In Certain Limited Circumstances,” that while the push down of Parent’s basis in the Corporation is permissible, it is not required due to the existence of significant outstanding public debt securities of the Corporation before and after the Merger. In concluding that the outstanding public debt is significant, the Corporation considered both quantitative and qualitative factors, including both the book value and fair value of the outstanding public debt securities, as well as a number of provisions contained within the securities which impacted Parent’s ability to control their form of ownership of the Corporation.

In connection with the Merger, Parent issued $245 million of preferred stock. Parent may elect to either accrue or pay cash for dividends on the preferred stock. The preferred stock carries a cash dividend rate of LIBOR plus 11.5%. Prior to the payment of dividends by Parent, it is expected that the Corporation will provide Parent with the cash flow for Parent to pay dividends on the preferred stock. Assuming the dividends are paid regularly in cash, rather than accrued, the annual cash required to pay the dividend is expected to be approximately $29 million while the entire issuance of the preferred stock is outstanding.

Also in connection with the Merger, the Corporation paid approximately $14 million of stock issuance and transaction related expenses on behalf of Parent and recorded a receivable from Parent which is included in “Prepaid expenses and other” on the Consolidated Statement of Financial Position. Parent reimbursed this amount on October 1, 2013.

Note 4 – Acquisition

During the first quarter of 2013, the Corporation acquired all of the outstanding senior secured debt of Clinton Cards for $56.6 million (£35 million) through Lakeshore Lending Limited (“Lakeshore”), a wholly-owned subsidiary of the Corporation organized under the laws of the UK. Subsequently, on May 9, 2012, Clinton Cards was placed into administration, a procedure similar to Chapter 11 bankruptcy in the United States. Prior to entering into administration, Clinton Cards had approximately 750 stores and annual revenues of approximately $600 million across its two primary retail brands, Clinton Cards and Birthdays. The legacy Clinton Cards business had been an important customer to the Corporation’s international business for approximately forty years and was one of the Corporation’s largest customers.

As part of the administration process, the administrators (“Administrators”) of Clinton Cards and certain of its subsidiaries (the “Sellers”) conducted an auction of certain assets of the business of the Sellers that they believed constituted a viable ongoing business. Lakeshore bid $37.2 million (£23 million) for certain of these remaining assets. The bid took the form of a “credit bid,” where the Corporation used a portion of the outstanding senior secured debt owed to Lakeshore by Clinton Cards to pay the purchase price for the assets. The bid was accepted by the Administrators and on June 6, 2012 the Corporation entered into an agreement with the Sellers and the Administrators for the purchase of certain assets and the related business of the Sellers.

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Under the terms of the agreement, the Corporation originally expected to acquire approximately 400 stores from the Sellers, together with related inventory and overhead, as well as the Clinton Cards and related brands. As of August 30, 2013, the Corporation had completed 388 lease assignments. The number of stores that the Corporation is operating, including both lease assignments and new stores, is 401. The estimated future minimum rental payments for noncancelable operating leases related to the 401 acquired stores is approximately $390 million.

The stores and assets not acquired by the Corporation remain part of the administration process. It is anticipated that these remaining assets not purchased by the Corporation will be liquidated and the proceeds will be used to repay the creditors of the Sellers, including the Corporation. The Corporation will seek to recover the remaining senior secured debt claim held by it through the liquidation process. However, based on the estimated recovery information provided by the Administrators, the Corporation recorded an aggregate charge of $8.1 million in 2013 relating to the senior secured debt it acquired in the first quarter of the prior year. In the first half of 2014, based on updated estimated recovery information provided by the Administrators, the Corporation recorded adjustments to the charge resulting in first and second quarter gains of $2.0 million and $0.4 million, respectively. In the second quarter of 2014 the Corporation received a cash distribution from the Administrators of $5.0 million. The remaining balance of the senior secured debt is $8.2 million (£5.3 million) as of August 30, 2013 and is included in “Prepaid expenses and other” on the Consolidated Statement of Financial Position. The liquidation process was originally expected to take approximately twelve months from the closing of the transaction on June 6, 2012. The process is currently expected to be completed by December 31, 2013.

The prior year six-month period included charges of $37.2 million associated with the aforementioned acquisition and are reflected on the Consolidated Statement of Operations as follows:

(In millions)	Contract asset impairment		Bad debt expense		Legal and advisory fees		Impairment of debt purchased		Total
Net sales	$	4.0	$	—	$	—	$	—	$	4.0
Administrative and general expenses		—		17.2		6.0		—		23.2
Other operating (income) expense—net		—		—		—		10.0		10.0
	$	4.0	$	17.2	$	6.0	$	10.0	$	37.2

These charges are reflected in the Corporation’s reportable segments as follows:

(In millions)	Contract asset impairment		Bad debt expense		Legal and advisory fees		Impairment of debt purchased		Total
International Social Expression Products	$	4.0	$	17.2	$	—	$	—	$	21.2
Unallocated		—		—		6.0		10.0		16.0
	$	4.0	$	17.2	$	6.0	$	10.0	$	37.2

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The fair value of the consideration given has been allocated to the assets acquired and the liabilities assumed based upon their fair values at the date of acquisition. The following represents the final purchase price allocation:

Purchase price (in millions):
Credit bid	$	37.2
Effective settlement of pre-existing relationships with the legacy Clinton Cards business		6.4
Cash acquired		(0.6	)
	$	43.0
Allocation (in millions):
Inventory	$	5.5
Property, plant and equipment		18.4
Intangible assets		22.5
Current liabilities assumed		(3.4	)
	$	43.0

The financial results of this acquisition are included in the Corporation’s consolidated results from the date of acquisition. Pro forma results of operations have not been presented because the effect of this acquisition was not deemed material at the date of acquisition. The acquired business is included in the Corporation’s Retail Operations segment.

Note 5 – Recent Accounting Pronouncements

In July 2013, the FASB issued Accounting Standards Update (“ASU”) No. 2013-11 (“ASU 2013-11”), “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.” ASU 2013-11 requires an unrecognized tax benefit, or a portion of an unrecognized tax benefit, to be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except as follows. To the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date, the unrecognized tax benefit should be presented in the financial statements as a liability and not combined with deferred tax assets. ASU 2013-11 is effective for annual and interim periods beginning after December 15, 2014, with early adoption permitted. The Corporation does not expect that the adoption of this standard will have a material effect on its financial statements.

In February 2013, the FASB issued ASU No. 2013-02 (“ASU 2013-02”), “Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income.” ASU 2013-02 requires entities to disclose additional information about changes in other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income and the income statement line items affected. The provisions of this guidance are effective prospectively for annual and interim periods beginning after December 15, 2012. The Corporation adopted this standard on March 1, 2013. See Note 8 for further information.

In July 2012, the FASB issued ASU No. 2012-02 (“ASU 2012-02”), “Testing Indefinite-Lived Intangible Assets for Impairment.” ASU 2012-02 gives entities an option to first assess qualitative factors to determine whether the existence of events and circumstances indicate that it is more likely than not that an indefinite-lived intangible asset is impaired. If based on its qualitative assessment an entity concludes that it is more likely than not that the fair value of an indefinite-lived intangible asset is less than its carrying amount, quantitative impairment testing is required. However, if an entity concludes otherwise, quantitative impairment testing is not required. ASU 2012-02 is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. The Corporation adopted this standard on March 1, 2013. The adoption of this standard did not have a material effect on the Corporation’s financial statements.

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Note 6 – Royalty Revenue and Related Expenses

The Corporation has agreements for licensing the Care Bears and Strawberry Shortcake characters and other intellectual property. These license agreements provide for royalty revenue to the Corporation, which is recorded in “Other revenue” on the Consolidated Statement of Operations. These license agreements may include the receipt of upfront advances, which are recorded as deferred revenue and earned during the period of the agreement. Revenues and expenses associated with the servicing of these agreements, primarily relating to the licensing activities included in non-reportable segments, are summarized as follows:

	Three Months Ended				Six Months Ended
(In thousands)	August 30, 2013		August 24, 2012		August 30, 2013		August 24, 2012
Royalty revenue	$	6,412	$	7,133	$	12,918	$	10,862
Royalty expenses
Material, labor and other production costs	$	1,551	$	2,673	$	3,498	$	5,001
Selling, distribution and marketing expenses		1,936		2,723		3,184		3,379
Administrative and general expenses		441		441		901		863
	$	3,928	$	5,837	$	7,583	$	9,243

In addition to the expenses disclosed above, during the prior year first quarter, the Corporation incurred charges of $2.1 million associated with its licensing business. See Note 7 for further information.

Note 7 – Other Income and Expense

Other Operating (Income) Expense – Net

	Three Months Ended						Six Months Ended
(In thousands)	August 30, 2013			August 24, 2012			August 30, 2013			August 24, 2012
Clinton Cards secured debt (recovery) impairment	$	(428	)	$	2,249		$	(2,428	)	$	10,043
Termination of certain agency agreements		—			—			—			2,125
Loss (gain) on asset disposal		122			(2	)		(113	)		154
Miscellaneous		(655	)		(777	)		(1,738	)		(1,328	)
Other operating (income) expense – net	$	(961	)	$	1,470		$	(4,279	)	$	10,994

The Corporation recorded a loss of $2.2 million and $10.0 million in the three and six-month periods ended August 24, 2012, respectively, related to the senior secured debt of Clinton Cards. During the three and six-month periods ended August 30, 2013 the impairment of the secured debt of Clinton Cards was adjusted based on current estimated recovery information provided by the Administrators, resulting in a gain of $0.4 million and $2.4 million, respectively. See Note 4 for further information.

In May 2012, the Corporation recorded expenses totaling $2.1 million related to the termination of certain agency agreements associated with its licensing business.

Other Non-Operating Income – Net

	Three Months Ended						Six Months Ended
(In thousands)	August 30, 2013			August 24, 2012			August 30, 2013			August 24, 2012
Gain related to Party City investment	$	(3,262	)	$	(3,152	)	$	(3,262	)	$	(3,152	)
Foreign exchange (gain) loss		(360	)		1,060			(1,275	)		(396	)
Rental income		(402	)		(410	)		(886	)		(1,046	)
Miscellaneous		(1	)		2			25			(177	)
Other non-operating income – net	$	(4,025	)	$	(2,500	)	$	(5,398	)	$	(4,771	)

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During the three months ended August 30, 2013, the Corporation recognized a gain totaling $3.3 million related to a cash distribution from Party City. See Note 1 for further information. In August 2012, the Corporation recorded a gain totaling $3.2 million associated with the sale of a portion of its investment in Party City.

Note 8 – Accumulated Other Comprehensive Loss

The changes in accumulated other comprehensive income (loss) for the six months ended August 30, 2013 are as follows.

(In thousands)	Foreign Currency Translation Adjustments			Pensions and Other Postretirement Benefits			Unrealized Investment Gain			Total
Balance at February 28, 2013	$	12,594		$	(29,731	)	$	4		$	(17,133	)
Other comprehensive (loss) income before reclassifications		(1,660	)		154			(4	)		(1,510	)
Amounts reclassified from accumulated other comprehensive income (loss)		—			663			—			663
Net current period other comprehensive (loss) income		(1,660	)		817			(4	)		(847	)
Balance at August 30, 2013	$	10,934		$	(28,914	)	$	—		$	(17,980	)

The reclassifications out of accumulated other comprehensive income (loss) are as follows.

(In thousands)	Six Months Ended August 30, 2013			Classification on Consolidated Statement of Operations
Amortization of pension and other postretirement benefits items
Actuarial losses, net	$	(1,405	)	Administrative and general expenses
Prior service cost		548		Administrative and general expenses
		(857	)
Tax benefit		194		Income tax expense
Total, net of tax		(663	)
Total reclassifications	$	(663	)

Note 9 – Customer Allowances and Discounts

Trade accounts receivable is reported net of certain allowances and discounts. The most significant of these are as follows:

(In thousands)	August 30, 2013		February 28, 2013		August 24, 2012
Allowance for seasonal sales returns	$	17,612	$	24,574	$	24,127
Allowance for outdated products		12,230		11,156		11,785
Allowance for doubtful accounts		3,484		3,419		21,474
Allowance for marketing funds		27,451		28,610		29,459
Allowance for rebates		24,238		31,771		28,024
	$	85,015	$	99,530	$	114,869

Certain customer allowances and discounts are settled in cash. These accounts, primarily rebates, which are classified as “Accrued liabilities” on the Consolidated Statement of Financial Position, totaled $13.2 million, $13.5 million and $11.4 million as of August 30, 2013, February 28, 2013 and August 24, 2012, respectively.

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Note 10 – Inventories

(In thousands)	August 30, 2013		February 28, 2013		August 24, 2012
Raw materials	$	28,080	$	21,303	$	23,256
Work in process		12,021		6,683		13,116
Finished products		317,762		278,573		301,634
		357,863		306,559		338,006
Less LIFO reserve		84,639		84,166		82,939
		273,224		222,393		255,067
Display materials and factory supplies		18,934		20,054		20,911
	$	292,158	$	242,447	$	275,978

The valuation of inventory under the Last-In, First-Out (“LIFO”) method is made at the end of each fiscal year based on inventory levels and costs at that time. Accordingly, interim LIFO calculations, by necessity, are based on estimates of expected fiscal year-end inventory levels and costs, and are subject to final fiscal year-end LIFO inventory calculations.

Inventory held on location for retailers with scan-based trading arrangements, which is included in finished products, totaled $63.9 million, $59.7 million and $58.6 million as of August 30, 2013, February 28, 2013 and August 24, 2012, respectively.

Note 11 – Deferred Costs

Deferred costs and future payment commitments for retail supply agreements are included in the following financial statement captions:

(In thousands)	August 30, 2013			February 28, 2013			August 24, 2012
Prepaid expenses and other	$	84,368		$	93,873		$	79,145
Other assets		314,136			332,159			358,337
Deferred cost assets		398,504			426,032			437,482
Other current liabilities		(63,881	)		(61,282	)		(44,126	)
Other liabilities		(86,777	)		(92,153	)		(127,857	)
Deferred cost liabilities		(150,658	)		(153,435	)		(171,983	)
Net deferred costs	$	247,846		$	272,597		$	265,499

The Corporation maintains an allowance for deferred costs related to supply agreements of $6.5 million, $7.9 million and $8.4 million at August 30, 2013, February 28, 2013 and August 24, 2012, respectively. This allowance is included in “Other assets” in the Consolidated Statement of Financial Position.

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Note 12 – Debt

Debt due within one year totaled $15.0 million as of August 30, 2013, which represented the current maturity of the term loan. There was no debt due within one year as of February 28, 2013 and August 24, 2012.

Long-term debt and their related calendar year due dates as of August 30, 2013, February 28, 2013 and August 24, 2012, respectively, were as follows:

(In thousands)	August 30, 2013			February 28, 2013		August 24, 2012
Term loan, due 2019	$	350,000		$	—	$	—
7.375% senior notes, due 2021		225,000			225,000		225,000
Revolving credit facility, due 2017		—			61,200		55,000
Revolving credit facility, due 2018		13,900			—		—
6.10% senior notes, due 2028		181			181		181
		589,081			286,381		280,181
Current maturity of term loan		(15,000	)		—		—
Unamortized original issue discount		(10,601	)		—		—
	$	563,480		$	286,381	$	280,181

At August 30, 2013, the balances outstanding on the revolving credit facility and the term loan facility bear interest at a rate of approximately 3.2% and 4.0%, respectively. In addition to the balances outstanding on the aforementioned agreements, the Corporation also finances certain transactions with some of its vendors, which include a combination of various guaranties and letters of credit. At August 30, 2013, the Corporation had credit arrangements under a credit facility and an accounts receivable facility (as described below) to support the letters of credit in the amount of $129.1 million with $27.3 million of credit outstanding.

7.375% Senior Notes Due 2021

On November 30, 2011, the Corporation closed a public offering of $225.0 million aggregate principal amount of 7.375% senior notes due 2021 (the “2021 Senior Notes”). The net proceeds from this offering were used to finance other existing debt.

The 2021 Senior Notes will mature on December 1, 2021 and bear interest at a fixed rate of 7.375% per year. The 2021 Senior Notes constitute general unsecured senior obligations of the Corporation. The 2021 Senior Notes rank senior in right of payment to all future obligations of the Corporation that are, by their terms, expressly subordinated in right of payment to the 2021 Senior Notes and pari passu in right of payment with all existing and future unsecured obligations of the Corporation that are not so subordinated. The 2021 Senior Notes are effectively subordinated to secured indebtedness of the Corporation, including borrowings under its revolving credit facility described below, to the extent of the value of the assets securing such indebtedness. The 2021 Senior Notes also contain certain restrictive covenants that are customary for similar credit arrangements, including covenants that limit the Corporation’s ability to incur additional debt; declare or pay dividends; make distributions on or repurchase or redeem capital stock; make certain investments; enter into transactions with affiliates; grant or permit liens; sell assets; enter into sale and leaseback transactions; and consolidate, merge or sell all or substantially all of the Corporation’s assets. These restrictions are subject to customary baskets and financial covenant tests.

The total fair value of the Corporation’s publicly traded debt, which was considered a Level 1 valuation as it was based on quoted market prices, was $222.9 million (at a carrying value of $225.2 million), $233.6 million (at a carrying value of $225.2 million) and $247.1 million (at a carrying value of $225.2 million) at August 30, 2013, February 28, 2013 and August 24, 2012, respectively.

Credit Facility

In connection with the closing of the Merger, on August 9, 2013, the Corporation entered into a $600 million secured credit agreement (“Credit Agreement”), which provides for a $350 million term loan facility (“Term Loan Facility”) and a $250 million revolving credit facility (“Revolving Credit Facility”). The Term Loan Facility was fully drawn on August 9, 2013, the closing date (“Closing Date”) of the Merger. The Corporation issued the Term Loan Facility at a discount of $10.8 million. Installment payments will be made on the Term Loan Facility. The first payment of $10 million will be made by February 28, 2014. Thereafter, payments are scheduled to be made quarterly in the amount of $5 million.

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The Corporation may elect to increase the commitments under each of the Term Loan Facility and the Revolving Credit Facility (together referred to herein as the “Credit Facilities”) up to an aggregate amount of $150 million. The proceeds of the term loans and the revolving loans borrowed on the Closing Date were used to fund a portion of the Merger consideration and pay fees and expenses associated therewith. After the Closing Date, revolving loans borrowed under the Credit Agreement will be used for working capital and general corporate purposes.

The obligations under the Credit Agreement are guaranteed by the Corporation’s Parent and material domestic subsidiaries and secured by substantially all of the assets of the Corporation and the guarantors.

The interest rate per annum applicable to the loans under the Credit Facilities will be, at the Corporation’s election, equal to either (i) the base rate plus the applicable margin or (ii) the relevant adjusted Eurodollar rate for an interest period of one, two, three or six months, at the Corporation’s election, plus the applicable margin.

The Credit Agreement contains certain customary covenants, including covenants that limit the ability of the Corporation, its subsidiaries and the Parent to, among other things, incur or suffer to exist certain liens; make investments; enter into consolidations, mergers, acquisitions and sales of assets; incur or guarantee additional indebtedness; make distributions; enter into agreements that restrict the ability to incur liens or make distributions; and engage in transactions with affiliates. In addition, the Credit Agreement contains financial covenants that require the Corporation to maintain a total leverage ratio and interest coverage ratio in accordance with the limits set forth therein.

The Credit Agreement contains customary events of default including, without limitation, the representations and warranties made in or in connection with the loan documents entered into in connection with the Credit Agreement prove to have been untrue in any material respect when made, the failure to make required payments, the failure to comply with certain agreements or covenants, cross-defaults to certain other indebtedness in excess of specified amounts, certain events of bankruptcy and insolvency, the failure to pay certain judgments and a Change of Control (as defined therein). If such an event of default occurs, the lenders under the Credit Agreement would be entitled to take various actions, including the acceleration of amounts due thereunder and all actions permitted to be taken by a secured creditor.

Accounts Receivable Facility

The Corporation is also a party to an accounts receivable facility that provides funding of up to $50 million, under which there were no borrowings outstanding as of August 30, 2013, February 28, 2013 and August 24, 2012.

Under the terms of the accounts receivable facility, the Corporation sells accounts receivable to AGC Funding Corporation (a wholly-owned, consolidated subsidiary of the Corporation), which in turn sells undivided interests in eligible accounts receivable to third party financial institutions as part of a process that provides funding to the Corporation similar to a revolving credit facility.

On August 9, 2013, the Corporation amended its accounts receivable facility. The amendment modifies the accounts receivable facility by providing for a scheduled termination date that is 364 days following the date of the amendment, subject to two additional, consecutive 364-day terms with the consent of the parties thereto. The amendment also, among other things, permits the Merger and changes the definition of the base rate to equal the higher of the prime rate as announced by the applicable purchaser financial institution, and the federal funds rate plus 0.50%.

AGC Funding pays an annual facility fee of 80 basis points on the commitment of the accounts receivable securitization facility, together with customary administrative fees on letters of credit that have been issued and on outstanding amounts funded under the facility. Funding under the facility may be used for working capital, general corporate purposes and the issuance of letters of credit.

The accounts receivable facility contains representations, warranties, covenants and indemnities customary for facilities of this type, including the obligation of the Corporation to maintain the same consolidated leverage ratio as it is required to maintain under its Credit Agreement.

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The total fair value of the Corporation’s non-publicly traded debt, which was considered a Level 2 valuation as it was based on comparable privately traded debt prices, was $363.9 million (at a carrying value of $363.9 million), $61.2 million (at a carrying value of $61.2 million) and $55.0 million (at a carrying value of $55.0 million) at August 30, 2013, February 28, 2013 and August 24, 2012, respectively.

At August 30, 2013, the Corporation was in compliance with the financial covenants under its borrowing agreements.

Note 13 – Retirement Benefits

The components of periodic benefit cost for the Corporation’s defined benefit pension and postretirement benefit plans are as follows:

	Defined Benefit Pension
	Three Months Ended						Six months Ended
	August 30,			August 24,			August 30,			August 24,
(In thousands)	2013			2012			2013			2012
Service cost	$	320		$	333		$	640		$	667
Interest cost		1,736			1,839			3,478			3,683
Expected return on plan assets		(1,567	)		(1,609	)		(3,141	)		(3,222	)
Amortization of prior service cost		51			62			102			123
Amortization of actuarial loss		913			815			1,830			1,631
	$	1,453		$	1,440		$	2,909		$	2,882

	Postretirement Benefits
	Three Months Ended						Six months Ended
	August 30,			August 24,			August 30,			August 24,
(In thousands)	2013			2012			2013			2012
Service cost	$	137		$	212		$	275		$	425
Interest cost		612			800			1,225			1,600
Expected return on plan assets		(762	)		(840	)		(1,525	)		(1,680	)
Amortization of prior service credit		(325	)		(519	)		(650	)		(1,038	)
Amortization of actuarial gain		(212	)		—			(425	)		—
	$	(550	)	$	(347	)	$	(1,100	)	$	(693	)

The Corporation has a discretionary profit-sharing plan with a 401(k) provision covering most of its United States employees. The profit-sharing plan expense for the six months ended August 30, 2013 was $4.5 million, compared to $3.4 million in the prior year period. The Corporation also matches a portion of 401(k) employee contributions. The expenses recognized for the three and six month periods ended August 30, 2013 were $1.4 million and $2.7 million ($1.3 million and $2.6 million for the three and six month periods ended August 24, 2012), respectively. The profit-sharing plan and 401(k) matching expenses for the six month periods are estimates as actual contributions are determined after fiscal year-end.

At August 30, 2013, February 28, 2013 and August 24, 2012, the liability for postretirement benefits other than pensions was $17.6 million, $15.7 million and $27.7 million, respectively, and is included in “Other liabilities” on the Consolidated Statement of Financial Position. At August 30, 2013, February 28, 2013 and August 24, 2012, the long-term liability for pension benefits was $86.3 million, $81.4 million and $75.6 million, respectively, and is included in “Other liabilities” on the Consolidated Statement of Financial Position.

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Note 14 – Fair Value Measurements

Assets and liabilities measured at fair value are classified using the fair value hierarchy based upon the transparency of inputs as of the measurement date. The classification of fair value measurements within the hierarchy is based upon the lowest level of input that is significant to the measurement. The three levels are defined as follows:

• Level 1 – Valuation is based upon quoted prices (unadjusted) in active markets for identical assets or liabilities.

• Level 2 – Valuation is based upon quoted prices for similar assets and liabilities in active markets, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

• Level 3 – Valuation is based upon unobservable inputs that are significant to the fair value measurement.

The following table summarizes the financial assets measured at fair value as of August 30, 2013:

(In thousands)	August 30, 2013		Level 1		Level 2		Level 3
Assets measured on a recurring basis:
Deferred compensation plan assets	$	11,096	$	8,545	$	2,551	$	—

The following table summarizes the financial assets measured at fair value as of February 28, 2013:

(In thousands)	February 28, 2013		Level 1		Level 2		Level 3
Assets measured on a recurring basis:
Deferred compensation plan assets	$	10,636	$	9,175	$	1,461	$	—

The following table summarizes the financial assets measured at fair value as of August 24, 2012:

(In thousands)	August 24, 2012		Level 1		Level 2		Level 3
Assets measured on a recurring basis:
Deferred compensation plan assets	$	10,016	$	8,482	$	1,534	$	—

The deferred compensation plan includes investments in mutual funds and a money market fund. Assets held in mutual funds were recorded at fair value, which was considered a Level 1 valuation as it is based on each fund’s quoted market value per share in an active market. The money market fund was classified as Level 2 as substantially all of the fund’s investments were determined using amortized cost. Although the Corporation is under no obligation to fund employees’ nonqualified accounts, the fair value of the offsetting nonqualified deferred compensation liability is based on the fair value of the plan’s assets.

Note 15—Contingency

The Corporation is presently involved in various judicial, administrative, regulatory and arbitration proceedings concerning matters arising in the ordinary course of business, including but not limited to, employment, commercial disputes and other contractual matters, some of which are described below. These matters are inherently subject to many uncertainties regarding the possibility of a loss to the Corporation. These uncertainties will ultimately be resolved when one or more future events occur or fail to occur, confirming the incurrence of a liability or reduction of a liability. In accordance with ASC Topic 450, “Contingencies,” the Corporation accrues for these contingencies by a charge to income when it is both probable that one or more future events will occur confirming the fact of a loss and the amount of the loss can be reasonably estimated. Due to this uncertainty, the actual amount of any loss may ultimately prove to be larger or smaller than the amounts reflected in the Corporation’s Consolidated Financial Statements. Some of these proceedings are at preliminary stages and some of these cases seek an indeterminate amount of damages.

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Baker/Collier Litigation

American Greetings Corporation is a defendant in two putative class action lawsuits involving corporate-owned life insurance policies (the “Insurance Policies”): one filed in the Northern District of Ohio on January 11, 2012 by Theresa Baker as the personal representative of the estate of Richard Charles Wolfe (the “Baker Litigation”); and the other filed in the Northern District of Oklahoma on October 1, 2010 by Keith Collier as the personal representative of the estate of Ruthie Collier (the “Collier Litigation”).

In the Baker Litigation, the plaintiff claims that American Greetings Corporation (1) misappropriated its employees’ names and identities to benefit itself; (2) breached its fiduciary duty by using its employees’ identities and personal information to benefit itself; (3) unjustly enriched itself through the receipt of corporate-owned life insurance policy benefits, interest and investment returns; and (4) improperly received insurance policy benefits for the insurable interest in Mr. Wolfe’s life. The plaintiff seeks damages in the amount of all pecuniary benefits associated with the subject Insurance Policies, including investment returns, interest and life insurance policy benefits that American Greetings Corporation received from the deaths of the former employees whose estates form the putative class.

In the Collier Litigation, the plaintiff claims that American Greetings Corporation did not have an insurable interest when it obtained the subject Insurance Policies and wrongfully received the benefits from those policies. The plaintiff seeks damages in the amount of policy benefits received by American Greetings Corporation from the subject Insurance Policies, as well as attorney’s fees, costs and interest. On April 2, 2012, the plaintiff filed its First Amended Complaint, adding misappropriation of employee information and breach of fiduciary duty claims as well as seeking punitive damages. On April 20, 2012, American Greetings Corporation moved to transfer the Collier Litigation to the Northern District of Ohio, where the Baker Litigation is pending. On July 6, 2012, the Court granted American Greetings Corporation’s Motion to Transfer and transferred the case to the Northern District of Ohio, where the Baker Litigation is pending.

On May 22, 2013, the Court preliminarily approved a full and final settlement of all the claims of the Wolfe and Collier estates, as well as the classes they seek to represent. As a result of the preliminary approval, the Court consolidated the two cases and certified a single class that consists of the heirs or estates of the estates and heirs of all former American Greetings Corporation employees (i) who are deceased; (ii) who were not officers or directors of American Greetings Corporation; (iii) who were insured under one of the following corporate-owned life insurance plans: Provident Life & Accident 61153, Provident Life & Accident 61159, Mutual Benefit Life Insurance Company 111, Connecticut General ENX219, and Hartford Life Insurance Company 361; and (iv) for whom American Greetings Corporation has received a death benefit on or before the date on which the Court enters the Order of Preliminary Approval. Required notices to potential class members and to state attorney generals as required under the Class Action Fairness Act of 2005 were mailed on May 30, 2013. On September 20, 2013, the Court entered a final order approving the settlement in the amount of $12.5 million. This amount was accrued prior to the first quarter of 2014. One half of the settlement amount was deposited by American Greetings Corporation into a settlement fund account on September 27, 2013, and the remaining half of the settlement amount will be deposited by American Greetings Corporation into the same settlement fund account on or before December 19, 2013. The settlement fund will be distributed in its entirety to those members of the class who present valid claims, their counsel, and a settlement administration vendor.

Carter/Wolfe/LMPERS Litigation

On September 26, 2012, we announced that our Board of Directors received a non-binding proposal from Zev Weiss, the Corporation’s Chief Executive Officer, and Jeffrey Weiss, the Corporation’s President and Chief Operating Officer, on behalf of themselves and certain other members of the Weiss family and related parties to acquire all of the outstanding Class A common shares and Class B common shares of the Corporation not currently owned by them (the “Going Private Proposal”). On September 27, 2012, Dolores Carter, a purported shareholder, filed a putative shareholder derivative and class action lawsuit (the “Carter Action”) in the Court of Common Pleas in Cuyahoga County, Ohio (the “Cuyahoga County Court”), against American Greetings Corporation and all of the

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members of the Board of Directors. The Carter Action alleges, among other things, that the directors of the Corporation breached their fiduciary duties owed to shareholders in evaluating and pursuing the proposal. The Carter Action further alleges claims for aiding and abetting breaches of fiduciary duty. Among other things, the Carter Action seeks declaratory relief. Subsequently, six more lawsuits were filed in the Cuyahoga County Court purporting to advance substantially similar claims on behalf of American Greetings Corporation against the members of the Board of Directors and, in certain cases, additional direct claims against American Greetings Corporation. One lawsuit was voluntarily dismissed. The other lawsuits, which remain pending, were consolidated by Judge Richard J. McMonagle on December 6, 2012 (amended order dated December 18, 2012) as In re American Greetings Corp. Shareholder Litigation, Lead Case No. CV 12 792421 (the “State Court Action”). Lead plaintiffs and lead plaintiffs’ counsel also were appointed.

On April 30, 2013, lead plaintiffs’ counsel filed a Consolidated Class Action Complaint. The Consolidated Complaint brings a single class claim against the members of the Corporation’s Board of Directors for alleged breaches of fiduciary duty and aiding and abetting. The plaintiffs allege that the preliminary proxy statement on Schedule 14A filed with the Securities and Exchange Commission (“SEC”) on April 17, 2013 omits information necessary to permit the Corporation’s shareholders to determine if the Merger is in their best interest, that the controlling shareholders have abused their control of the Corporation, that the special committee appointed to oversee the transaction is not independent, and that the other members of the Board of Directors are also not independent. On June 13, 2013, defendants filed motions to dismiss the Consolidated Class Action Complaint based on plaintiffs’ failure to properly plead their claims as derivative actions, to exercise their statutory appraisal rights as the sole remedy for dissatisfaction with the proposed share price, and to overcome the business judgment rule with respect to their breach of fiduciary duty claims. The motions remain pending.

On July 16, 2013, the parties entered into a Memorandum of Understanding (“MOU”) agreeing in principle to settle the State Court Action on behalf of themselves and the putative settlement class, which includes all persons who owned any interest in the common stock of American Greetings Corporation (either of record or beneficially) at any time between and including September 26, 2012 and the effective date of the Merger. A Stipulation of Settlement subsequently was filed with the Cuyahoga County Court on August 8, 2013, and the Cuyahoga County Court preliminarily approved the settlement on August 15, 2013 (amended order dated September 4, 2013). The settlement provides for dismissal with prejudice of the State Court Action and a release of claims against defendants and released parties. As consideration to class members, the Corporation agreed to and did disclose additional information via a Form 8-K relating to the Merger, which was filed with the SEC on July 18, 2013. In addition, defendants acknowledge that the State Court Action contributed to the Weiss family shareholders’ decision to increase the Merger consideration from $18.20 per share to $19.00 per share. The settlement also contemplates the payment of attorneys’ fees and reimbursement of expenses to class counsel, which the Corporation expects will be fully paid by the Corporation’s insurer.

The settlement is conditioned upon, among other things, final certification of the settlement class and final approval of the proposed settlement by the Cuyahoga County Court. The Cuyahoga County Court has scheduled a hearing concerning, among other things, whether the settlement should be approved as fair, reasonable, adequate, and in the best interest of the settlement class for October 24, 2013. There can be no assurance that the Cuyahoga County Court will approve the settlement. If the settlement conditions are not met, the proposed settlement would become void.

On November 6, 2012, R. David Wolfe, a purported shareholder, filed a putative class action (the “Wolfe Action”) in the United States District Court for the Northern District of Ohio (the “Federal Court”) against certain members of the Weiss Family and the Irving I. Stone Oversight Trust, the Irving Stone Limited Liability Company, the Irving I. Stone Support Foundation, and the Irving I. Stone Foundation (“Stone Entities”) alleging breach of fiduciary duties in proposing and pursuing the proposal, as well as against American Greetings, seeking, among other things, declaratory relief. Shortly thereafter, on November 9, 2012, the Louisiana Municipal Police Employees’ Retirement System also filed a purported class action in the Federal Court (the “LMPERS Action”) asserting substantially similar claims against the same defendants and seeking substantially similar relief.

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On November 30, 2012, plaintiffs in the Wolfe and LMPERS Actions filed motions (1) to consolidate the Wolfe and LMPERS Actions, (2) for appointment as co-lead plaintiffs, (3) for appointment of co-lead counsel, and, in the Wolfe Action only, (4) for partial summary judgment. On December 14, 2012, the Corporation filed its oppositions to the motions (a) to consolidate the Wolfe and LMPERS Actions, (b) for appointment as co-lead plaintiffs, and (c) for appointment of co-lead counsel. On the same day, the Corporation also moved to dismiss both the Wolfe and LMPERS Actions. The Corporation answered both complaints on January 8, 2013, and on January 11, 2013, it filed its opposition to the motion for partial summary judgment. On February 14, 2013, the Federal Court dismissed both the Wolfe and LMPERS Actions for lack of subject matter jurisdiction. On March 15, 2013, plaintiffs in both the Wolfe and LMPERS Actions filed notices of appeal with the Sixth Circuit Court of Appeals. On April 18, 2013, plaintiff Wolfe moved to dismiss his appeal, which motion was granted on April 19, 2013. On May 8, 2013, plaintiff LMPERS’s moved to dismiss its appeal as well, which motion was granted.

Plaintiffs in the Wolfe and LMPERS Actions alleged, in part, that Article Seventh of the Corporation’s articles of incorporation prohibited the special committee from, among other things, evaluating the Merger. The Corporation considered these allegations and concluded that the Article is co-extensive with Ohio law and thus allows the Corporation to engage in any activity authorized by Ohio law. The Corporation also has consistently construed Article Seventh as permitting directors to approve a transaction so long as they are both disinterested and independent.

On April 17, 2013, R. David Wolfe filed a new derivative and putative class action (“Wolfe Action II”) in the Federal Court against the Corporation’s directors, certain members of the Weiss Family, and the Stone Entities, as well as the Corporation as a nominal defendant, challenging the Merger as financially and procedurally unfair to the Corporation and its minority shareholders. Mr. Wolfe subsequently filed an Amended Complaint on April 29, 2013. The Wolfe Action II seeks a declaratory judgment that Article Seventh precludes the Board of Directors and special committee from approving the Merger. In addition, the Wolfe Action II includes a derivative claim for breach of fiduciary duty against the Corporation’s directors for allegedly violating Article Seventh. Finally, the Wolfe Action II includes both a derivative and class action claim for breach of fiduciary duty against the Weiss Family defendants and the Stone Entities for allegedly seeking to acquire the minority shareholders’ interests at an unfair price. Defendants filed their Motions to Dismiss the Wolfe Action II amended Complaint on July 8, 2013. On August 1, 2013, the Federal Court granted the parties’ joint motion to defer briefings on defendants’ motions to dismiss and to stay the action pending resolution of the settlement of the State Court Action.

Management is unable to estimate a range of reasonably possible losses for these cases in which the damages have not been specified and (i) the proceedings are in the early stages, (ii) there is uncertainty as to the outcome of the pending appeals or motions, and/or (iii) there are significant factual issues to be resolved. However, for these cases, management does not believe, based on currently available information, that the outcomes of these proceedings will have a material adverse effect on the Corporation’s financial condition, though the outcomes could be material to the Corporation’s operating results for any particular period, depending, in part, upon the operating results for such period.

In addition to the foregoing, we are involved in various judicial, administrative, regulatory and arbitration proceedings concerning matters arising in the ordinary course of business operations, including, but not limited to, employment, commercial disputes and other contractual matters. We, however, do not believe that any of the other litigation in which we are currently engaged, either individually or in the aggregate, will have a material adverse effect on our business, consolidated financial position or results of operations.

Note 16 – Income Taxes

The Corporation’s provision for income taxes in interim periods is computed by applying its estimated annual effective tax rate against income (loss) before income tax expense (benefit) for the period. In addition, non-recurring or discrete items are recorded during the period in which they occur. The magnitude of the impact that discrete items have on the Corporation’s quarterly effective tax rate is dependent on the level of income in the period. The effective tax rate was 191.9% and 51.6% for the three and six months ended August 30, 2013, respectively, and 29.9% and 31.1% for the three and six months ended August 24, 2012, respectively. The higher than statutory rate in the current period is due primarily to the recording of an $8.0 million valuation allowance against certain net operating loss and foreign tax credit carryforwards which the Corporation believes will expire unused. The valuation allowance was recorded in accordance with Internal Revenue Code sections 382 and 383 due to the Merger as previously disclosed in Note 3. The lower than statutory rate for the prior period was due primarily to the release of reserves upon lapse of the applicable statutes.

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At February 28, 2013, the Corporation had unrecognized tax benefits of $21.7 million that, if recognized, would have a favorable effect on the Corporation’s income tax expense of $18.5 million. There were no significant changes to this amount during the first two quarters of 2014. It is reasonably possible that the Corporation’s unrecognized tax positions as of February 28, 2013 could decrease $3.1 million during the next twelve months due to anticipated settlements and resulting cash payments related to open years after 1996, which are currently under examination.

The Corporation recognizes interest and penalties accrued on unrecognized tax benefits and refundable income taxes as a component of income tax expense. During the six months ended August 30, 2013, the Corporation recognized net expense of $0.1 million for interest and penalties on unrecognized tax benefits and refundable income taxes. As of August 30, 2013, the total amount of gross accrued interest and penalties related to unrecognized tax benefits less refundable income taxes was a net payable of $4.6 million.

The Corporation is subject to examination by the Internal Revenue Service for tax years 2010 to the present and various U.S. state and local jurisdictions for tax years 1996 to the present. The Corporation is also subject to tax examination in various international tax jurisdictions including Australia, Canada, New Zealand and the United Kingdom for tax years 2006 to the present.

Note 17 – 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 and International Social Expression Products segments primarily design, manufacture and sell greeting cards and other related products through various channels of distribution with mass merchandising as the primary channel. At August 30, 2013, the Retail Operations segment operated 401 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, instant messaging services and electronic mobile devices. The Corporation’s non-reportable operating segments primarily include licensing activities and the design, manufacture and sale of display fixtures.

	Three Months Ended						Six Months Ended
(In thousands)	August 30, 2013			August 24, 2012			August 30, 2013			August 24, 2012
Total Revenue:
North American Social Expression Products	$	261,694		$	265,856		$	589,981		$	574,415
International Social Expression Products		63,372			74,834			134,173			137,514
Intersegment items		(8,737	)		(13,542	)		(19,829	)		(13,542	)
Net		54,635			61,292			114,344			123,972
Retail Operations		62,732			39,884			137,450			39,884
AG Interactive		14,504			15,777			29,204			31,273
Non-reportable segments		26,856			11,027			46,745			17,398
	$	420,421		$	393,836		$	917,724		$	786,942

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	Three Months Ended						Six Months Ended
(In thousands)	August 30, 2013			August 24, 2012			August 30, 2013			August 24, 2012
Segment Earnings (Loss):
North American Social Expression Products	$	35,045		$	20,440		$	101,392		$	76,658
International Social Expression Products		2,195			289			4,739			(22,268	)
Intersegment items		(1,511	)		(7,402	)		(3,725	)		(7,402	)
Net		684			(7,113	)		1,014			(29,670	)
Retail Operations		(8,984	)		(5,106	)		(12,436	)		(5,106	)
AG Interactive		3,165			4,609			6,478			8,382
Non-reportable segments		10,059			2,300			17,441			2,242
Unallocated
Interest expense		(5,433	)		(4,434	)		(9,745	)		(8,810	)
Profit-sharing plan expense		(484	)		(449	)		(4,465	)		(3,429	)
Stock-based compensation expense		(11,121	)		(2,972	)		(13,596	)		(4,841	)
Corporate overhead expense		(17,249	)		(13,346	)		(27,855	)		(31,077	)
		(34,287	)		(21,201	)		(55,661	)		(48,157	)
	$	5,682		$	(6,071	)	$	58,228		$	4,349

For the three and six month periods ended August 30, 2013, stock-based compensation in the table above includes non-cash stock-based compensation prior to the Merger and the impact of the settlement of stock options and the cancellation or modification of outstanding restricted stock units and performance shares concurrent with the Merger, a portion of which is non-cash. There is no stock-based compensation subsequent to the Merger as these plans were converted into cash compensation plans at the time of the Merger. See Note 3 for further information.

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

Refer to Note 4 for segment information related to certain prior year charges associated with activities and transactions in connection with the acquisition of Clinton Cards that do not have comparative amounts in the current year; and current year charges associated with the Merger that do not have comparative amounts in the prior year.

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 $2.9 million, $6.0 million and $4.5 million at August 30, 2013, February 28, 2013 and August 24, 2012, 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.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our unaudited consolidated financial statements. This discussion and analysis, and other statements made in this Report, contain forward-looking statements, see “Factors That May Affect Future Results” at the end of this discussion and analysis for a description of the uncertainties, risks and assumptions associated with these statements. Unless otherwise indicated or the context otherwise requires, the “Corporation,” “we,” “our,” “us” and “American Greetings” are used in this Report to refer to the businesses of American Greetings Corporation and its consolidated subsidiaries.

Overview

Merger

On September 26, 2012, we announced that our Board of Directors received a non-binding proposal from Zev Weiss, the Corporation’s then Chief Executive Officer, and Jeffrey Weiss, the Corporation’s then President and Chief Operating Officer, on behalf of themselves and certain other members of the Weiss family and related parties to acquire all of the outstanding Class A common shares and Class B common shares of the Corporation not currently owned by them (the “Going Private Proposal”). In connection with the Going Private Proposal, on March 29, 2013, we signed an agreement and plan of merger (as amended on July 3, 2013, the “Merger Agreement”), among the Corporation, Century Intermediate Holding Company, a Delaware corporation (“Parent”), and Century Merger Company, an Ohio corporation and a wholly-owned subsidiary of Parent (“Merger Sub”). At a special meeting of shareholders held on August 7, 2013, the shareholders of the Corporation voted to adopt the Merger Agreement as amended, and the merger contemplated thereby (the “Merger”). On August 9, 2013, the Corporation completed the Merger. As a result of the Merger, the Corporation is now wholly owned by Parent, which is indirectly owned by Morry Weiss, the Chairman of the Board of the Corporation, Zev Weiss, Jeffrey Weiss and certain other members of the Weiss family and related entities (the “Family Shareholders”). At the effective time of the Merger, each issued and outstanding share of the Corporation (other than shares owned by the Corporation, Parent (which at the effective time of the Merger included all shares previously held by the Family Shareholders) or Merger Sub) was converted into the right to receive $19.00 per share in cash. All other shares of the Corporation were cancelled without consideration.

Second Quarter Results of Operations

Net sales in the second quarter increased approximately $27 million or 7.0% compared to the prior year period. The increase was driven by the prior year second quarter acquisition of certain assets of Clinton Cards PLC (“Clinton Cards”) and an unusually large contract in the fixtures business. The increase in net sales due to Clinton Cards was approximately $28 million and the fixtures business added about $17 million. During the first quarter, our fixtures business obtained a contract to supply fixtures to a large consumer electronics company and this contract contributed approximately $26 million of net sales in the first half of 2014 and is now completed. The fixtures business is included in the Non-reportable section of our segment reporting.

Net of the items above, net sales decreased approximately $18 million or 4.7% compared to the prior year second quarter. This decrease is due to the unfavorable impact of foreign currency translation and lower sales of greeting cards, gift packaging products, party goods and other ancillary products.

Second quarter operating income was $7.0 million compared to a loss of $4.2 million in the prior year, an increase of $11.2 million. Current year operating income includes costs and fees associated with the Merger of approximately $22 million. The prior year quarter included approximately $4 million of expenses and fees related to the Clinton Cards transaction. The remaining improvement was due to the impact of the large fixture contract, and continued expense reductions throughout the organization including supply chain costs, marketing, product content costs, scrap and other cost savings initiatives compared to the prior year second quarter.

Due to our fiscal calendar cycle, the current year first half ended on August 30, 2013, compared to August 24, 2012 in the prior year. This equals six additional days, or 3.4% more selling days in the current year first half. This timing did not impact the second quarter results and will not impact the full year results, but will result in less selling days in the current year fourth quarter compared to the prior year fourth quarter. We estimate that the additional six days equates to approximately $16 million of net sales, primarily greeting cards.

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Results of Operations

Three months ended August 30, 2013 and August 24, 2012

Net loss was $5.2 million in the second quarter compared to net loss of $4.3 million in the prior year period.

Our results for the three months ended August 30, 2013 and August 24, 2012 are summarized below:

(Dollars in thousands)	2013			% Total Revenue			2012			% Total Revenue
Net sales	$	413,667			98.4	%	$	386,518			98.1	%
Other revenue		6,754			1.6	%		7,318			1.9	%
Total revenue		420,421			100.0	%		393,836			100.0	%
Material, labor and other production costs		176,674			42.0	%		176,732			44.9	%
Selling, distribution and marketing expenses		155,007			36.9	%		148,995			37.8	%
Administrative and general expenses		82,684			19.7	%		70,870			18.0	%
Other operating (income) expense – net		(961	)		(0.3	%)		1,470			0.4	%
Operating income (loss)		7,017			1.7	%		(4,231	)		(1.1	%)
Interest expense		5,433			1.3	%		4,434			1.1	%
Interest income		(73	)		(0.0	%)		(94	)		(0.0	%)
Other non-operating income – net		(4,025	)		(1.0	%)		(2,500	)		(0.6	%)
Income (loss) before income tax expense (benefit)		5,682			1.4	%		(6,071	)		(1.6	%)
Income tax expense (benefit)		10,903			2.6	%		(1,817	)		(0.5	%)
Net loss	$	(5,221	)		(1.2	%)	$	(4,254	)		(1.1	%)

For the three months ended August 30, 2013, consolidated net sales were $413.7 million, an increase of $27.2 million, or 7.0%, from $386.5 million in the prior year second quarter. The increase was primarily related to the purchase of Clinton Cards during the prior year second quarter. The current year second quarter includes a full quarter of sales through Clinton Cards retail stores while the prior year period includes sales for slightly less than two months. In total, net sales at Clinton Cards increased $28 million compared to the prior year second quarter. Also contributing to the increase in net sales were higher net sales in our fixtures business of approximately $17 million, as discussed in the overview section of this Form 10-Q, and the favorable impact of fewer scan-based trading (“SBT”) implementations during the quarter of approximately $2 million compared to the prior year period. These increases were partially offset by a decrease in greeting card sales of approximately $5 million, a decrease in gift packaging, party goods and other ancillary product sales of approximately $6 million and the unfavorable impact of foreign currency translation of approximately $9 million.

Other revenue, primarily royalty revenue from our Strawberry Shortcake and Care Bears properties, decreased $0.6 million during the three months ended August 30, 2013.

Wholesale Unit and Pricing Analysis for Greeting Cards

Unit and pricing comparatives (on a sales less returns basis), excluding intercompany eliminations, for the three months ended August 30, 2013 and August 24, 2012 are summarized below:

	Increase (Decrease) From the Prior Year
	Everyday Cards						Seasonal Cards						Total Greeting Cards
	2013			2012			2013			2012			2013			2012
Unit volume		(3.8	%)		0.6	%		(0.7	%)		17.6	%		(3.2	%)		3.5	%
Selling prices		2.3	%		0.9	%		(5.3	%)		(9.4	%)		0.8	%		(1.0	%)
Overall increase / (decrease)		(1.6	%)		1.5	%		(6.0	%)		6.5	%		(2.5	%)		2.4	%

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During the second quarter, combined everyday and seasonal greeting card sales less returns decreased 2.5% compared to the prior year quarter, including a decrease in unit volume of 3.2% partially offset by an increase in selling prices of 0.8%. The overall decrease was driven by unit decline from our everyday greeting cards in both our North American Social Expression Products and International Social Expression Products segments as well as unit decline from our seasonal greeting cards in our International Social Expression Products segment. The selling price increase was primarily driven by everyday greeting cards in our North American Social Expression Products segment.

Everyday card sales less returns for the second quarter decreased 1.6% due to unit decline of 3.8% partially offset by improvement in selling prices of 2.3%. The unit volume decline in the North American Social Expression Products segment was primarily driven by generally soft sales across all distribution channels and in the International Social Expression Products segment primarily due to lower sales to our Retail Operations segment. The selling price improvement was driven by our North American Social Expression Products segment.

Seasonal card sales less returns decreased 6.0% during the second quarter, including a 5.3% decline in selling prices and a decrease in unit volume of 0.7%. The decrease in selling prices was driven by year-over-year timing and mix of seasonal shipments and the continued shift in mix to a higher proportion of value cards in the period.

Expense Overview

Material, labor and other production costs (“MLOPC”) for the three months ended August 30, 2013 were $176.7 million, compared to $176.7 million in the prior year three months. As a percentage of total revenue, these costs were 42.0% in the current period compared to 44.9% for the three months ended August 24, 2012. The retail operations we purchased from Clinton Cards in the prior year second quarter caused an increase in MLOPC of approximately $10 million in the current period compared to the same period in the prior year. These increases were offset by lower product content costs, lower scrap expense and the favorable impact of foreign currency translation of approximately $4 million, $3 million and $2 million, respectively. In addition, the increase to MLOPC related to the impact of higher sales in the current year second quarter was more than offset by favorable product mix.

Selling, distribution and marketing (“SDM”) expenses for the three months ended August 30, 2013 were $155.0 million, increasing approximately $6 million from $149.0 million in the prior year second quarter. The increase was primarily driven by higher expenses of approximately $18 million within our Retail Operations segment due to the timing of the Clinton Cards acquisition in the prior year second quarter. The current year second quarter includes a full quarter of expenses related to the retail stores while the prior year period includes expenses for slightly less than two months. Partially offsetting these increases were lower supply chain costs of approximately $5 million, lower marketing and product management expenses of approximately $4 million and the favorable impact of foreign currency translation of approximately $3 million.

Administrative and general expenses were $82.7 million for the three months ended August 30, 2013, an increase of approximately $12 million from $70.9 million for the three months ended August 24, 2012. The increase was driven by costs and fees related to the Merger of approximately $22 million during the current year second quarter and higher expenses of approximately $2 million within our Retail Operations segment primarily due to the timing of the Clinton Cards acquisition in the prior year second quarter. These increases were partially offset by prior year transaction costs of approximately $4 million in connection with the Clinton Cards retail store acquisition that did not recur in the current year. In addition, legal expenses and costs related to our information technology systems refresh project decreased approximately $2 million and $1 million, respectively. Also partially offsetting the increases were general cost savings of approximately $5 million of which no items were individually significant.

Other operating (income) expense – net was $1.0 million of income for the three months ended August 30, 2013 compared to $1.5 million of expense for the prior year second quarter. In the current year second quarter, based on updated estimated recovery information provided in connection with the Clinton Cards bankruptcy administration, we recorded an adjustment to the Clinton Cards debt impairment resulting in a gain of $0.4 million. The prior year included an impairment of $2.2 million related to the senior secured debt of Clinton Cards that we acquired in the prior year first quarter.

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Other non-operating income – net for the three months ended August 30, 2013 was $4.0 million, increasing $1.5 million from $2.5 million in the prior year second quarter. The increase was driven primarily by a foreign exchange gain in the current year second quarter compared to a loss in the prior year period. In addition, both the current and prior year periods included a gain of approximately $3.3 million associated with the Corporation’s investment in Party City.

The Corporation’s effective tax rate was 191.9% and 29.9% for the three months ended August 30, 2013 and August 24, 2012, respectively. The higher than statutory rate in the current period is due primarily to the recording of an $8.0 million valuation allowance against certain net operating loss and foreign tax credit carryforwards which we believe will expire unused. The valuation allowance was recorded in accordance with Internal Revenue Code sections 382 and 383 due to the Merger. The lower than statutory rate for the prior period was due primarily to the release of reserves upon lapse of the applicable statutes.

Results of Operations

Six months ended August 30, 2013 and August 24, 2012

Net income was $28.2 million in the six months ended August 30, 2013 compared to $3.0 million in the prior year six months.

Our results for the six months ended August 30, 2013 and August 24, 2012 are summarized below:

(Dollars in thousands)	2013			% Total Revenue			2012			% Total Revenue
Net sales	$	904,212			98.5	%	$	775,771			98.6	%
Other revenue		13,512			1.5	%		11,171			1.4	%
Total revenue		917,724			100.0	%		786,942			100.0	%
Material, labor and other production costs		380,511			41.5	%		340,596			43.3	%
Selling, distribution and marketing expenses		325,346			35.5	%		276,158			35.1	%
Administrative and general expenses		153,764			16.8	%		151,038			19.2	%
Other operating (income) expense – net		(4,279	)		(0.6	%)		10,994			1.4	%
Operating income		62,382			6.8	%		8,156			1.0	%
Interest expense		9,745			1.1	%		8,810			1.1	%
Interest income		(193	)		(0.0	%)		(232	)		(0.0	%)
Other non-operating income – net		(5,398	)		(0.6	%)		(4,771	)		(0.6	%)
Income before income tax expense		58,228			6.3	%		4,349			0.5	%
Income tax expense		30,056			3.2	%		1,353			0.1	%
Net income	$	28,172			3.1	%	$	2,996			0.4	%

For the six months ended August 30, 2013, consolidated net sales were $904.2 million, up from $775.8 million in the prior year six months. This 16.6%, or $128.4 million, increase was primarily related to the purchase of Clinton Cards during the prior year second quarter. The current year period includes six months of sales through Clinton Cards retail stores while the prior year period includes sales for slightly less than two months. In total, net sales at Clinton Cards increased approximately $102 million compared to the prior year period. Also contributing to the increase in net sales were higher sales in our fixtures business of approximately $28 million, of which approximately $26 million was related to a large contract obtained in the current year first quarter, as mentioned in the overview section of this Form 10-Q. In addition, as discussed in the overview section, the six month period includes six additional selling days compared to the prior year period. We estimate that the additional six selling days improved net sales, primarily everyday greeting cards, approximately $16 million compared to the to the prior year. The remaining year over year improvement was due to higher sales of gift packaging products of approximately $1 million and the prior year impairment of deferred costs of approximately $4 million related to the supply agreement associated with Clinton Cards’ Birthdays stores. Partially offsetting these increases were reduced greeting cards sales of approximately $7 million, lower other ancillary product sales of approximately $4 million and the unfavorable impact of foreign currency translation of approximately $12 million.

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Other revenue, primarily royalty revenue from our Strawberry Shortcake and Care Bears properties, increased $2.3 million in the six months ended August 30, 2013 compared to the same period in the prior year.

Wholesale Unit and Pricing Analysis for Greeting Cards

Unit and pricing comparatives (on a sales less returns basis), excluding intercompany eliminations, for the six months ended August 30, 2013 and August 24, 2012 are summarized below:

	Increase (Decrease) From the Prior Year
	Everyday Cards						Seasonal Cards						Total Greeting Cards
	2013			2012			2013			2012			2013			2012
Unit volume		0.8	%		1.5	%		2.1	%		6.5	%		1.1	%		2.8	%
Selling prices		2.7	%		(1.0	%)		(0.2	%)		(0.6	%)		1.9	%		(0.8	%)
Overall increase / (decrease)		3.5	%		0.4	%		1.9	%		5.9	%		3.0	%		2.0	%

During the six months ended August 30, 2013, combined everyday and seasonal greeting card sales less returns increased 3.0% compared to the prior year six months. The overall increase was primarily driven by unit growth and increases in selling prices from our everyday greeting cards in both our North American Social Expression Products and International Social Expression Products segments and unit growth from our seasonal greeting cards in our North American Social Expression Products segment.

Everyday card sales less returns were up 3.5% compared to the prior year six months, as a result of improved unit volume of 0.8% and increases in selling prices of 2.7%. The unit volume increase was primarily a result of additional selling days in the current year six months. The selling price increase was a result of favorable product mix and general price increases outpacing the continued shift to a higher proportion of value cards.

Seasonal card sales less returns increased 1.9%, with unit volume increasing 2.1% and selling prices declining 0.2%. The increase in unit volume was attributable to our Mother’s Day and Graduation seasonal programs in our North American Social Expression Products segment.

Expense Overview

MLOPC for the six months ended August 30, 2013 were $380.5 million, an increase of approximately $40 million from $340.6 million for the comparable period in the prior year. As a percentage of total revenue, these costs were 41.5% in the current period compared to 43.3% for the six months ended August 24, 2012. The retail operations we purchased from Clinton Cards in the prior year second quarter caused a net increase in MLOPC of approximately $39 million compared to the prior year six month period. In addition, the combination of higher sales volume and higher scrap expense, partially offset by favorable product mix, caused an increase in MLOPC of approximately $7 million. These increases were partially offset by lower product content costs and the favorable impact of foreign currency translation of approximately $2 million and $4 million, respectively.

SDM expenses for the six months ended August 30, 2013 were $325.3 million, increasing approximately $49 million from $276.2 million for the comparable period in the prior year. The increase was primarily driven by higher expenses of approximately $63 million within our Retail Operations segment primarily due to the timing of the Clinton Cards acquisition in the prior year second quarter. The current year period includes six months of sales through Clinton Cards retail stores while the prior year period includes sales for slightly less than two months. This increase was partially offset by lower marketing and product management expenses of approximately $7 million, the majority of which related to Cardstore.com, decreased supply chain costs of approximately $2 million and the favorable impact of foreign currency translation of approximately $5 million.

Administrative and general expenses were $153.8 million for the six months ended August 30, 2013, an increase of approximately $3 million from $151.0 million in the prior year period. The increase was driven by costs and fees related to the Merger of approximately $27 million during the current year and higher expenses of approximately $8 million within our Retail Operations segment primarily

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due to the timing of the Clinton Cards acquisition in the prior year second quarter. These increases were partially offset by lower bad debt expense, whereby the prior year included approximately $17 million related to increased unsecured accounts receivable exposure as a result of Clinton Cards being placed into administration. In addition, the prior year included transaction costs in connection with the Clinton Cards retail store acquisition of approximately $6 million that did not recur in the current year. Also partially offsetting the increases were lower legal related expenses of approximately $5 million, a year-over-year decrease in costs related to our information technology systems refresh project of approximately $2 million and general cost savings, of which no items were individually significant, of approximately $2 million.

Other operating (income) expense – net was $4.3 million of income during the current year quarter compared to $11.0 million of expense in the prior year. The prior year six months included an expense of $2.1 million related to the termination of certain agency agreements associated with our licensing business. The prior year six months also included an impairment of $10.0 million related to the senior secured debt of Clinton Cards that we acquired in the prior year first quarter. In the current year six month period, based on updated estimated recovery information provided in connection with the Clinton Cards bankruptcy administration, we recorded an adjustment to the Clinton Cards debt impairment resulting in a gain of $2.4 million.

The Corporation’s effective tax rate was 51.6% and 31.1% for the six months ended August 30, 2013 and August 24, 2012, respectively. The higher than statutory rate in the current period is due primarily to the recording of an $8.0 million valuation allowance against certain net operating loss and foreign tax credit carryforwards which we believe will expire unused. The valuation allowance was recorded in accordance with Internal Revenue Code sections 382 and 383 due to the Merger.

Segment Information

Our operations are organized and managed according to a number of factors, including product categories, geographic locations and channels of distribution. Our North American Social Expression Products and International Social Expression Products segments primarily design, manufacture and sell greeting cards and other related products through various channels of distribution, with mass retailers as the primary channel. As permitted under Accounting Standards Codification (“ASC”) Topic 280 (“ASC 280”), “Segment Reporting,” certain operating segments have been aggregated into the International Social Expression Products segment. The aggregated operating divisions have similar economic characteristics, products, production processes, types of customers and distribution methods. At August 30, 2013, we were operating 401 card and gift retail stores in the United Kingdom (“UK”) through our Retail Operations segment. These stores sell products purchased from the International Social Expression Products segment as well as products purchased from other vendors. The AG Interactive segment 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.

Segment results are reported using actual foreign exchange rates for the periods presented. Refer to Note 17, “Business Segment Information,” to the Consolidated Financial Statements for further information and a reconciliation of total segment revenue to consolidated “Total revenue” and total segment earnings (loss) to consolidated “Income (loss) before income tax expense (benefit).”

North American Social Expression Products Segment

(Dollars in thousands)	Three Months Ended August				% Change			Six Months Ended August				% Change
	30, 2013		24, 2012					30, 2013		24, 2012
Total revenue	$	261,694	$	265,856		(1.6	%)	$	589,981	$	574,415		2.7	%
Segment earnings		35,045		20,440		71.5	%		101,392		76,658		32.3	%

Total revenue of our North American Social Expression Products segment decreased $4.1 million for the three months ended August 30, 2013 and increased $15.6 million for the six months ended August 30, 2013 compared to the prior year periods. The decrease during the current quarter was primarily driven by lower sales of greeting cards, lower sales of gift packaging and the unfavorable impact of foreign currency translation of approximately $3 million, $2 million and $1 million, respectively. The decrease in total revenue for the current quarter was partially offset by the favorable impact of fewer SBT implementations of $2 million compared to the prior year. The increase in total revenue for the six months ended August 30, 2013 was primarily driven by the additional six selling days compared to the prior year period and increased sales of gift packaging, party goods and other ancillary products of approximately $5 million. These increases were partially offset by lower greeting card sales and the unfavorable impact of foreign currency translation of approximately $2 million each.

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Segment earnings increased $14.6 million in the current three months compared to the three months ended August 24, 2012. The increase was primarily driven by lower product content, supply chain and scrap costs of approximately $5 million, $3 million and $2 million, respectively. Also contributing to the increased earnings were decreases in marketing and product management expenses of approximately $3 million, lower costs related to our information technology systems refresh project of approximately $1 million and lower administrative and general expenses of approximately $3 million. These favorable variances were partially offset by the impact of lower revenues in the current year quarter.

Segment earnings increased $24.7 million in the current six months compared to the prior year period. The increase was driven primarily by the impact of higher revenues, partially offset by unfavorable product mix and higher scrap expense. In addition, decreases in marketing and product management expenses of approximately $6 million, lower costs related to our information technology systems refresh project of approximately $2 million and lower administrative and general expenses of approximately $3 million were partially offset by higher technology maintenance costs of approximately $2 million.

International Social Expression Products Segment

(Dollars in thousands)	Three Months Ended August					%			Six Months Ended August					%
	30, 2013		24, 2012			Change			30, 2013		24, 2012			Change
Total revenue	$	54,635	$	61,292			(10.9	%)	$	114,344	$	123,972			(7.8	%)
Segment earnings (loss)		684		(7,113	)		—			1,014		(29,670	)		—

Total revenue of our International Social Expression Products segment decreased $6.7 million and $9.6 million for the three and six months ended August 30, 2013, respectively, compared to the prior year periods. The decreases were primarily due to lower sales of greetings cards of approximately $2 million and $4 million for the current year three and six month periods, respectively and lower sales of other ancillary products of approximately $2 million and $5 million for the current year three and six months, respectively, primarily due to the prior year disposition of a small non-card product line. Foreign currency translation had an unfavorable impact of approximately $3 million and $5 million for the current year three and six month periods, respectively. In addition, the prior year included an impairment of deferred costs of approximately $4 million related to the supply agreement associated with the Clinton Cards’ Birthdays stores that were closed as part of the Clinton Cards bankruptcy administration process that did not recur in the current year.

Segment earnings increased $7.8 million in the three months ended August 30, 2013, compared to the prior year period. The impact on earnings from decreased revenue was more than offset by favorable product mix and lower supply chain and scrap expenses. Also contributing to the increased earnings were decreases in administrative and general expenses of approximately $2 million and lower marketing and product management expenses of approximately $1 million.

Segment earnings increased $30.7 million in the six months ended August 30, 2013, compared to the six months ended August 24, 2012. The improvement in earnings was primarily driven by prior year costs of approximately $21 million related to Clinton Cards that do not have comparative amounts in the current year. In the first quarter of the prior year, Clinton Cards, a significant third-party customer at the time, was placed into administration. As a result, we incurred bad debt expense of approximately $17 million and an impairment of deferred costs related to the supply agreement associated with the Clinton Cards’ Birthdays stores of approximately $4 million. The impact on earnings from decreased revenue was more than offset by favorable product mix and lower supply chain expenses. Also contributing to the increased earnings were decreases in administrative and general expenses of approximately $3 million and lower marketing and product management expenses of approximately $2 million.

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Retail Operations Segment

(Dollars in thousands)	Three Months Ended August						%			Six Months Ended August						%
	30, 2013			24, 2012			Change			30, 2013			24, 2012			Change
Total revenue	$	62,732		$	39,884			57.3	%	$	137,450		$	39,884			244.6	%
Segment loss		(8,984	)		(5,106	)		(75.9	%)		(12,436	)		(5,106	)		(143.6	%)

In the prior year second quarter, we acquired retail stores in the UK that we are operating under the “Clintons” brand. As of August 30, 2013, we are operating 401 stores. As with many retail businesses, the Retail Operations segment’s business is extremely seasonal in nature. As such, the overall profitability of this segment is highly dependent on success during the December holiday season. Due to the timing of the Clinton Cards acquisition, the operating results of the Retail Operations segment for the three and six month periods ended August 24, 2012 included slightly less than two months of activity.

AG Interactive Segment

(Dollars in thousands)	Three Months Ended August				%			Six Months Ended August				%
	30, 2013		24, 2012		Change			30, 2013		24, 2012		Change
Total revenue	$	14,504	$	15,777		(8.1	%)	$	29,204	$	31,273		(6.6	%)
Segment earnings		3,165		4,609		(31.3	%)		6,478		8,382		(22.7	%)

Total revenue of our AG Interactive segment for the three months ended August 30, 2013 was $14.5 million compared to $15.8 million in the prior year second quarter. Total revenue of our AG Interactive segment for the six months ended August 30, 2013 was $29.2 million compared to $31.3 million in the prior year six months. These decreases in revenue were driven primarily by lower advertising revenue and lower subscription revenue related to the disposition of a minor photo sharing business in the prior fiscal year. At the end of the second quarter of fiscal 2014 and 2013, AG Interactive had approximately 3.7 million online paid subscriptions.

Segment earnings decreased $1.4 million and $1.9 million for the three and six months ended August 30, 2013 compared to the prior year periods primarily due to the impact of lower revenue.

Unallocated Items

Centrally incurred and managed costs are not allocated back to the operating segments. The unallocated items include interest expense for centrally incurred debt, domestic profit-sharing expense and stock-based compensation expense. Unallocated items also include costs associated with corporate operations such as the senior management, corporate finance, legal and insurance programs.

	Three Months Ended August						Six Months Ended August
(Dollars in thousands)	30, 2013			24, 2012			30, 2013			24, 2012
Interest expense	$	(5,433	)	$	(4,434	)	$	(9,745	)	$	(8,810	)
Profit-sharing plan expense		(484	)		(449	)		(4,465	)		(3,429	)
Stock-based compensation expense		(11,121	)		(2,972	)		(13,596	)		(4,841	)
Corporate overhead expense		(17,249	)		(13,346	)		(27,855	)		(31,077	)
Total Unallocated	$	(34,287	)	$	(21,201	)	$	(55,661	)	$	(48,157	)

In the prior year six months, corporate overhead expense included legal and advisory fees of $6.0 million related to the Clinton Cards transaction and an impairment of $10.0 million related to the senior secured debt of Clinton Cards. The current year six months included an adjustment to the Clinton Cards debt impairment, based on current estimated recovery information provided in connection with the Clinton Cards bankruptcy administration, which resulted in a gain of $2.4 million. For the three and six month periods ended August 30, 2013, stock-based compensation in the table above includes non-cash stock-based compensation prior to the Merger and the impact of the settlement of stock options and the cancellation or modification of outstanding restricted stock units and performance shares concurrent with the Merger, a portion of which is non-cash. There is no stock-based compensation subsequent to the Merger as these plans were converted into cash compensation plans at the time of the Merger. Refer to Note 3, “Merger,” to the Consolidated Financial Statements for further information.

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Liquidity and Capital Resources

The seasonal nature of our business precludes a useful comparison of the current period and the fiscal year-end financial statements; therefore, a Consolidated Statement of Financial Position as of August 24, 2012, has been included.

Operating Activities

Operating activities provided $34.1 million of cash during the six months ended August 30, 2013, compared to $48.9 million in the prior year period.

Accounts receivable provided $9.5 million of cash during the six months ended August 30, 2013, compared to using $1.7 million of cash during the prior year period. The year-over-year increase in cash flow of approximately $11 million occurred primarily within our Retail Operations and North American Social Expression Products segments. The North American Social Expression Products segment increase is due to the timing of collections from, or credits issued to, certain customers occurring in a different pattern in the current year period compared to the prior year period. In the prior year, accounts receivable in the Retail Operations segment was a use of cash due to amounts outstanding from the bankruptcy administrator related to retail cash receipts during the transition period. This was partially offset by a decrease in cash flow within our fixtures business which was driven by growth in accounts receivable related to higher sales levels compared to the prior year.

Inventory used $49.6 million of cash during the six months ended August 30, 2013, compared to $51.7 million in the prior year six months. Historically, the first half of our fiscal year is a period of inventory build, and thus a use of cash, in preparation for the fall and winter seasonal holidays.

Deferred costs—net generally represents payments under agreements with retailers net of the related amortization of those payments. During the six months ended August 30, 2013, amortization exceeded payments by $24.4 million. During the six months ended August 24, 2012, amortization exceeded payments by $34.4 million. See Note 11, “Deferred Costs,” to the Consolidated Financial Statements for further detail of deferred costs related to customer agreements.

Accounts payable and other liabilities used $39.7 million of cash during the six months ended August 30, 2013, compared to providing $35.9 million in the prior year period. About 70% of the year-over-year change in cash usage was related to the Clinton Cards acquisition and the timing of employee compensation payments, which was a result of the current year quarter ending on August 30, 2013 compared to the prior year quarter ending on August 24, 2012. In addition, accrued compensation increased in the current year as a result of our stock-based compensation plans converting to cash-settled plans as a consequence of the Merger. The remaining change was due to normal year-over-year timing of business transactions and related payments.

Investing Activities

Investing activities used $14.6 million of cash during the six months ended August 30, 2013, compared to $101.5 million in the prior year period. In the current year period, the cash usage was primarily driven by $32.0 million of cash paid for capital expenditures. The current year also included the receipt of a cash distribution of $12.1 million related to our investment in Party City.

During the prior year first quarter we paid $56.6 million of cash to acquire all of the outstanding senior secured debt of Clinton Cards. In addition, cash paid for capital expenditures was $46.1 million.

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Financing Activities

Financing activities used $56.7 million of cash during the current year six months, compared to $17.1 million during the prior year. The primary use of cash in the current year was in connection with activities related to the Merger. These activities included borrowings under our new credit agreement, net of repayments and debt issuance costs, which provided cash of $285.4 million, the contribution from Parent which provided cash of $240.0 million and payment of cash of $568.3 million to complete the Merger and cancel outstanding shares. In addition, prior to the Merger, we paid cash dividends of $9.6 million.

The prior year use of cash relates to share repurchases and dividend payments. We paid $60.7 million to repurchase approximately 4.1 million Class A common shares under our repurchase program. In addition, we paid cash dividends of $10.4 million. Partially offsetting these uses of cash were our borrowings under our credit agreement, which provided $55.0 million of cash during the prior year six months.

Credit Sources

In total, we had available sources of credit of approximately $650 million at August 30, 2013, which included a $350 million term loan facility, a $250 million revolving credit facility and a $50 million accounts receivable securitization facility, of which $258.8 million was unused as of August 30, 2013. Borrowings under the accounts receivable securitization facility are limited based on our eligible receivables outstanding. The term loan facility was fully drawn on August 9, 2013, the closing date of the Merger. At August 30, 2013, we had $13.9 million of borrowings outstanding under our credit facility and we had no borrowings outstanding under the accounts receivable securitization facility. We had, in the aggregate, $27.3 million outstanding under letters of credit, which reduced the total credit availability thereunder as of August 30, 2013.

For further information, refer to the discussion of our borrowing arrangements as disclosed in Note 12, “Debt,” to the Consolidated Financial Statements.

At August 30, 2013, we were in compliance with our financial covenants under the borrowing agreements described above.

Capital Deployment and Investments

In connection with the Merger, Parent issued $245 million of preferred stock. Parent may elect to either accrue or pay cash for dividends on the preferred stock. The preferred stock carries a cash dividend rate of LIBOR plus 11.5%. Prior to the payment of dividends by Parent, it is expected that we will provide Parent with the cash flow for Parent to pay dividends on the preferred stock. Assuming the dividends are paid regularly in cash, rather than accrued, the annual cash required to pay the dividend is expected to be approximately $29 million while the entire issuance of the preferred stock is outstanding.

Throughout fiscal 2014 and thereafter, we will continue to consider all options for capital deployment including growth options, acquisitions and other investments in third parties, expanding customer relationships, expenditures or investments related to our current product leadership initiatives or other future strategic initiatives, capital expenditures, the information technology systems refresh project, our new world headquarters project, paying down debt and, as appropriate, preserving cash. Our future operating cash flow and borrowing availability under our credit agreement and our accounts receivable securitization facility are expected to meet these and other currently anticipated funding requirements. The seasonal nature of our business results in peak working capital requirements that may be financed through short-term borrowings when cash on hand is insufficient.

Over roughly the next five or six years, we expect to allocate resources, including capital, to refresh our information technology systems by modernizing our systems, redesigning and deploying new processes, and evolving new organization structures, all of which are intended to drive efficiencies within the business and add new capabilities. Amounts that we spend could be material in any fiscal year and over the life of the project. The total amount spent through fiscal 2013 on this project was approximately $84 million. During the six months ended August 30, 2013, we spent approximately $17 million, including capital of approximately $15 million and expense of approximately $2 million, on these information technology systems. Including the amount that has already been spent, we currently expect to spend at least an aggregate of $150 million on these information technology systems over the life of the project, the majority of which we expect will be capital expenditures. We believe these investments are important to our business, help us drive further efficiencies and add new capabilities; however, there can be no assurance that we will not spend more or less than $150 million over the life of the project, or that we will achieve the anticipated efficiencies or any cost savings.

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During March 2011, we also announced that in fiscal 2012 we expected that we would begin to invest in the development of a world headquarters in the Northeast Ohio area. The state of Ohio has committed certain tax credits, loans and other incentives totaling up to $93.5 million to assist us in the development of a new headquarters in Ohio. We are required to make certain investments and meet other criteria to receive these incentives over time. Although the project to build a new world headquarters was put on hold in connection with the Going Private Proposal, now that the Merger has closed, we have begun discussions with the various stakeholders to resume the project. Based on preliminary estimates, the gross costs associated with a new world headquarters building, before any tax credit, loans or other incentives that we may receive, will be between approximately $150 million and $200 million over a number of years following our resumption of the project.

In connection with our acquisition of Clinton Cards, we originally expected to acquire approximately 400 stores from the Sellers, together with related inventory and overhead, as well as the Clinton Cards and related brands. As of August 30, 2013, we completed 388 lease assignments. The number of stores that the Corporation is operating, including both lease assignments and new stores, is 401. The estimated future minimum rental payments for noncancelable operating leases related to the 401 acquired stores is approximately $390 million. Refer to Note 4, “Acquisition,” to the Consolidated Financial Statements for further information.

Our future operating cash flow and borrowing availability under our credit agreement and our accounts receivable securitization facility are expected to meet currently anticipated funding requirements. The seasonal nature of our business results in peak working capital requirements that may be financed through short-term borrowings when cash on hand is insufficient.

Critical Accounting Policies

Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. Please refer to the discussion of our Critical Accounting Policies as disclosed in our Annual Report on Form 10-K for the year ended February 28, 2013.

Factors That May Affect Future Results

Certain statements in this report may constitute forward-looking statements within the meaning of the Federal securities laws. These statements can be identified by the fact that they do not relate strictly to historic or current facts. They use such words as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” and other words and terms of similar meaning in connection with any discussion of future operating or financial performance. These forward-looking statements are based on currently available information, but are subject to a variety of uncertainties, unknown risks and other factors concerning our operations and business environment, which are difficult to predict and may be beyond our control. Important factors that could cause actual results to differ materially from those suggested by these forward-looking statements, and that could adversely affect our future financial performance, include, but are not limited to, the following:

• a weak retail environment and general economic conditions;

• the loss of one or more retail customers and/or retail consolidations, acquisitions and bankruptcies, including the possibility of resulting adverse changes to retail contract terms;

• competitive terms of sale offered to customers, including costs and other terms associated with new and expanded customer relationships;

• the outcome of any legal proceedings that have been or may be instituted against the Corporation or others relating to the Merger Agreement;

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• the ability to successfully integrate Clinton Cards and achieve the anticipated revenue and operating profits;

• the ability of the bankruptcy administration to generate sufficient proceeds from the liquidation of the remaining Clinton Cards business to repay the remaining secured debt owed to us;

• the timing and impact of expenses incurred and investments made to support new retail or product strategies, as well as new product introductions and achieving the desired benefits from those investments;

• expenses we may incur relating to our world headquarters project;

• the timing of investments in, together with the ability to successfully implement or achieve the desired benefits and cost savings associated with, any information systems refresh we may implement;

• the timing and impact of converting customers to a scan-based trading model;

• the ability to achieve the desired benefits associated with our cost reduction efforts;

• Schurman Fine Papers’ ability to successfully operate its retail operations and satisfy its obligations to us;

• consumer demand for social expression products generally, shifts in consumer shopping behavior, and consumer acceptance of products as priced and marketed, including the success of new and expanded advertising and marketing efforts, such as our on-line efforts through Cardstore.com;

• the impact and availability of technology, including social media, on product sales;

• escalation in the cost of providing employee health care;

• the ability to comply with our debt covenants;

• fluctuations in the value of currencies in major areas where we operate, including the U.S. Dollar, Euro, UK Pound Sterling and Canadian Dollar; and

• the outcome of any legal claims known or unknown.

Risks pertaining specifically to AG Interactive include the viability of subscriptions as a revenue generator and the ability to adapt to rapidly changing social media.

The risks and uncertainties identified above are not the only risks we face. Additional risks and uncertainties not presently known to us or that we believe to be immaterial also may adversely affect us. Should any known or unknown risks or uncertainties develop into actual events, or underlying assumptions prove inaccurate, these developments could have material adverse effects on our business, financial condition and results of operations. For further information concerning the risks we face and issues that could materially affect our financial performance related to forward-looking statements, refer to our periodic filings with the Securities and Exchange Commission, including the “Risk Factors” section included in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended February 28, 2013 and included in Part II, Item  1A of our Quarterly Reports on Form 10-Q.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

For further information, refer to our Annual Report on Form 10-K for the year ended February 28, 2013. There were no material changes in market risk, specifically interest rate and foreign currency exposure, for us from February 28, 2013, the end of our preceding fiscal year, to August 30, 2013, the end of our most recent fiscal quarter.

Item 4. Controls and Procedures

American Greetings maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in its reports under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to the Corporation’s management, including its co-Chief Executive Officers and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

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American Greetings carries out a variety of on-going procedures, under the supervision and with the participation of the Corporation’s management, including its co-Chief Executive Officers and Chief Financial Officer, to evaluate the effectiveness of the design and operation of the Corporation’s disclosure controls and procedures. Based on the foregoing, the co-Chief Executive Officers and Chief Financial Officer of American Greetings concluded that the Corporation’s disclosure controls and procedures were effective as of the end of the period covered by this report.

There has been no change in the Corporation’s internal control over financial reporting during the Corporation’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Corporation’s internal control over financial reporting.

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings

Baker/Collier Litigation. American Greetings Corporation is a defendant in two putative class action lawsuits involving corporate-owned life insurance policies (the “Insurance Policies”): one filed in the Northern District of Ohio on January 11, 2012 by Theresa Baker as the personal representative of the estate of Richard Charles Wolfe (the “Baker Litigation”); and the other filed in the Northern District of Oklahoma on October 1, 2010 by Keith Collier as the personal representative of the estate of Ruthie Collier (the “Collier Litigation”).

In the Baker Litigation, the plaintiff claims that American Greetings Corporation (1) misappropriated its employees’ names and identities to benefit itself; (2) breached its fiduciary duty by using its employees’ identities and personal information to benefit itself; (3) unjustly enriched itself through the receipt of corporate-owned life insurance policy benefits, interest and investment returns; and (4) improperly received insurance policy benefits for the insurable interest in Mr. Wolfe’s life. The plaintiff seeks damages in the amount of all pecuniary benefits associated with the subject Insurance Policies, including investment returns, interest and life insurance policy benefits that American Greetings Corporation received from the deaths of the former employees whose estates form the putative class.

In the Collier Litigation, the plaintiff claims that American Greetings Corporation did not have an insurable interest when it obtained the subject Insurance Policies and wrongfully received the benefits from those policies. The plaintiff seeks damages in the amount of policy benefits received by American Greetings Corporation from the subject Insurance Policies, as well as attorney’s fees, costs and interest. On April 2, 2012, the plaintiff filed its First Amended Complaint, adding misappropriation of employee information and breach of fiduciary duty claims as well as seeking punitive damages. On April 20, 2012, American Greetings Corporation moved to transfer the Collier Litigation to the Northern District of Ohio, where the Baker Litigation is pending. On July 6, 2012, the Court granted American Greetings Corporation’s Motion to Transfer and transferred the case to the Northern District of Ohio, where the Baker Litigation is pending.

On May 22, 2013, the Court preliminarily approved a full and final settlement of all of the claims of the Wolfe and Collier estates, as well as the classes they seek to represent. As a result of the preliminary approval, the Court consolidated the two cases and certified a single class that consists of the heirs or estates of the estates and heirs of all former American Greetings Corporation employees (i) who are deceased; (ii) who were not officers or directors of American Greetings; (iii) who were insured under one of the following corporate-owned life insurance plans: Provident Life & Accident 61153, Provident Life & Accident 61159, Mutual Benefit Life Insurance Company 111, Connecticut General ENX219, and Hartford Life Insurance Company 361; and (iv) for whom American Greetings has received a death benefit on or before the date on which the Court enters the Order of Preliminary Approval. Required notices to potential class members and to state attorney generals as required under the Class Action Fairness Act of 2005 were mailed May 30, 2013. On September 20, 2013, the Court entered a final order approving the settlement in the amount of $12.5 million. One half of the settlement amount was deposited by American Greetings Corporation into a settlement fund account on September 27, 2013, and the remaining half of the settlement amount will be deposited by American Greetings Corporation into the same settlement fund account on or before December 19, 2013. The settlement fund will be distributed in its entirety to those members of the class who present valid claims, their counsel, and a settlement administration vendor.

Carter/Wolfe/LMPERS Litigation. On September 26, 2012, the Corporation announced that the Board of Directors had received the Going Private Proposal. On September 27, 2012, Dolores Carter, a purported shareholder, filed a putative shareholder derivative and class action lawsuit (the “Carter Action”) in the Court of Common Pleas in Cuyahoga County, Ohio (the “Cuyahoga County Court”), against American Greetings Corporation and all of the members of the Board of Directors. The Carter Action alleges, among other things, that the directors of the Corporation breached their fiduciary duties owed to shareholders in evaluating and pursuing the proposal. The Carter Action further alleges claims for aiding and abetting breaches of fiduciary duty. Among other things, the Carter Action seeks declaratory relief. Subsequently, six more lawsuits were filed in the Cuyahoga County Court purporting to advance substantially similar claims on behalf of American Greetings against the members of the Board of Directors and, in certain cases,

38

additional direct claims against American Greetings. One lawsuit was voluntarily dismissed. The other lawsuits, which remain pending, were consolidated by Judge Richard J. McMonagle on December 6, 2012 (amended order dated December 18, 2012) as In re American Greetings Corp. Shareholder Litigation, Lead Case No. CV 12 792421 (the “State Court Action”). Lead plaintiffs and lead plaintiffs’ counsel also were appointed.

On April 30, 2013, lead plaintiffs’ counsel filed a Consolidated Class Action Complaint. The Consolidated Complaint brings a single class claim against the members of the Corporation’s Board of Directors for alleged breaches of fiduciary duty and aiding and abetting. The plaintiffs allege that the preliminary proxy statement on Schedule 14A filed with the SEC on April 17, 2013 omits information necessary to permit the Corporation’s shareholders to determine if the Merger is in their best interest, that the controlling shareholders have abused their control of the Corporation, that the special committee appointed to oversee the transaction is not independent, and that the other members of the Board of Directors are also not independent. On June 13, 2013, defendants filed motions to dismiss the Consolidated Class Action Complaint based on plaintiffs’ failure to properly plead their claims as derivative actions, to exercise their statutory appraisal rights as the sole remedy for dissatisfaction with the proposed share price, and to overcome the business judgment rule with respect to their breach of fiduciary duty claims. The motions remain pending.

On July 16, 2013, the parties entered into a Memorandum of Understanding (“MOU”) agreeing in principle to settle the State Court Action on behalf of themselves and the putative settlement class, which includes all persons who owned any interest in the common stock of American Greetings Corporation (either of record or beneficially) at any time between and including September 26, 2012 and the effective date of the Merger. A Stipulation of Settlement subsequently was filed with the Cuyahoga County Court on August 8, 2013, and the Cuyahoga County Court preliminarily approved the settlement on August 15, 2013 (amended order dated September 4, 2013). The settlement provides for dismissal with prejudice of the State Court Action and a release of claims against defendants and released parties. As consideration to class members, the Corporation agreed to and did disclose additional information via a Form 8-K relating to the Merger, which was filed with the SEC on July 18, 2013. In addition, defendants acknowledge that the State Court Action contributed to the Weiss family Shareholders’ decision to increase the Merger consideration from $18.20 per share to $19.00 per share. The settlement also contemplates the payment of attorneys’ fees and reimbursement of expenses to class counsel, which the Corporation expects will be fully paid by the Corporation’s insurer.

The settlement is conditioned upon, among other things, final certification of the settlement class and final approval of the proposed settlement by the Cuyahoga County Court. The Cuyahoga County Court has scheduled a hearing concerning, among other things, whether the settlement should be approved as fair, reasonable, adequate, and in the best interest of the settlement class for October 24, 2013. There can be no assurance that the Cuyahoga County Court will approve the settlement. If the settlement conditions are not met, the proposed settlement would become void.

On November 6, 2012, R. David Wolfe, a purported shareholder, filed a putative class action (the “Wolfe Action”) in the United States District Court for the Northern District of Ohio (the “Federal Court”) against certain members of the Weiss Family and the Irving I. Stone Oversight Trust, the Irving Stone Limited Liability Company, the Irving I. Stone Support Foundation, and the Irving I. Stone Foundation (“Stone Entities”) alleging breach of fiduciary duties in proposing and pursuing the proposal, as well as against American Greetings, seeking, among other things, declaratory relief. Shortly thereafter, on November 9, 2012, the Louisiana Municipal Police Employees’ Retirement System also filed a purported class action in the Federal Court (the “LMPERS Action”) asserting substantially similar claims against the same defendants and seeking substantially similar relief.

On November 30, 2012, plaintiffs in the Wolfe and LMPERS Actions filed motions (1) to consolidate the Wolfe and LMPERS Actions, (2) for appointment as co-lead plaintiffs, (3) for appointment of co-lead counsel, and, in the Wolfe Action only, (4) for partial summary judgment. On December 14, 2012, the Corporation filed its oppositions to the motions (a) to consolidate the Wolfe and LMPERS Actions, (b) for appointment as co-lead plaintiffs, and (c) for appointment of co-lead counsel. On the same day, the Corporation also moved to dismiss both the Wolfe and LMPERS Actions. The Corporation answered both complaints on January 8, 2013, and on January 11, 2013, it filed its opposition to the motion for partial summary judgment. On February 14, 2013, the Federal Court dismissed both the Wolfe and LMPERS Actions for lack of subject matter jurisdiction. On March 15, 2013, plaintiffs in both

39

the Wolfe and LMPERS Actions filed notices of appeal with the Sixth Circuit Court of Appeals. On April 18, 2013, plaintiff Wolfe moved to dismiss his appeal, which motion was granted on April 19, 2013. On May 8, 2013, plaintiff LMPERS’ moved to dismiss its appeal as well, which motion was granted.

Plaintiffs in the Wolfe and LMPERS Actions alleged, in part, that Article Seventh of the Corporation’s articles of incorporation prohibited the special committee from, among other things, evaluating the merger. The Corporation considered these allegations and concluded that the Article is co-extensive with Ohio law and thus allows the Corporation to engage in any activity authorized by Ohio law. The Corporation also has consistently construed Article Seventh as permitting directors to approve a transaction so long as they are both disinterested and independent.

On April 17, 2013, R. David Wolfe filed a new derivative and putative class action (“Wolfe Action II”) in the Federal Court against the Corporation’s directors, certain members of the Weiss Family, and the Stone Entities, as well as the Corporation as a nominal defendant, challenging the Merger as financially and procedurally unfair to the Corporation and its minority shareholders. Mr. Wolfe subsequently filed an Amended Complaint on April 29, 2013. The Wolfe Action II seeks a declaratory judgment that Article Seventh precludes the Board of Directors and special committee from approving the Merger. In addition, the Wolfe Action II includes a derivative claim for breach of fiduciary duty against the Corporation’s directors for allegedly violating Article Seventh. Finally, the Wolfe Action II includes both a derivative and class action claim for breach of fiduciary duty against the Weiss Family defendants and the Stone Entities for allegedly seeking to acquire the minority shareholders’ interests at an unfair price. Defendants filed their Motions to Dismiss the Wolfe Action II Amended Complaint on July 8, 2013. On August 1, 2013, the Federal Court granted the parties’ joint motion to defer briefing on defendants’ motions to dismiss and to stay the action pending resolution of the settlement of the State Court Action.

Management does not believe, based on currently available information, that the outcomes of the proceedings described above will have a material adverse effect on the Corporation’s financial condition, though the outcomes could be material to the Corporation’s operating results for any particular period, depending, in part, upon the operating results for such period.

In addition to the foregoing, we are involved in various judicial, administrative, regulatory and arbitration proceedings concerning matters arising in the ordinary course of business operations, including, but not limited to, employment, commercial disputes and other contractual matters. We, however, do not believe that any of the other litigation in which we are currently engaged, either individually or in the aggregate, will have a material adverse effect on our business, consolidated financial position or results of operations.

Item 1A. Risk Factors

The information presented below updates and supplements the risk factors contained in our Annual Report on Form 10-K for the year ended February 28, 2013 and the Quarterly Report on Form 10-Q for the quarter ended May 31, 2013. The risks described herein and in such reports are not the only risks facing our Corporation. Additional risks and uncertainties, which we do not presently consider material or of which we are not currently aware, may also have an adverse impact on us.

We are indirectly owned and controlled by members of the Weiss family, and their interests as equity holders may conflict with the interests of holders of our debt.

We are indirectly owned and controlled by the Weiss family, some of whom are executive officers and directors of the Corporation and who have the ability to control our policy and operations. The interests of members of the Weiss family may not in all cases be aligned with interests of the holders of our debt. For example, if we encounter financial difficulties or are unable to pay our debts as they mature, the interests of our members of the Weiss family might conflict with the interests of holders of our debt. In addition, members of the Weiss family may have an interest in pursuing acquisitions, divestitures, financing or other transactions that, in their judgment, could enhance their equity investments, even though such transaction might involve heightened risks to holders of our debt.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

On July 24, 2012, American Greetings announced that its Board of Directors authorized a program to repurchase up to $75 million of its Class A common shares. There was no set expiration date for this program; however, purchases under this program were suspended due to the Going Private Proposal referred to in the overview section of this Form 10-Q. As a result of the closing of the Merger, on August 9, 2013, each share of common stock, par value $0.01, of Merger Sub was converted into and became one common share, par value $0.01, of the Corporation, and each issued and outstanding Class A common share and Class B common share of the Corporation (other than shares owned by the Corporation, Parent, Merger Sub and holders of common shares who properly demanded dissenters’ rights) was cancelled and converted into the right to receive $19.00, in cash, without interest and less any applicable withholding taxes. Accordingly, the only authorized and outstanding capital stock of the Corporation is 100 common shares, par value $0.01, all of which are held by Parent. With the completion of the Merger, the Corporation’s common stock is no longer traded on the New York Stock Exchange and the Corporation’s share repurchase program is no longer in effect.

Item 6. Exhibits

Exhibits required by Item 601 of Regulation S-K

Exhibit Number	Description
31 (a)	Certification of co-Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31 (b)	Certification of co-Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31 (c)	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	Certification of co-Chief Executive Officers and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	The following materials from the Corporation’s quarterly report on Form 10-Q for the quarter ended August 30, 2013, formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Statement of Operations for the quarters ended August 30, 2013, and August 24, 2012, (ii) Consolidated Statement of Comprehensive (Loss) Income for the quarters ended August 30, 2013, and August 24, 2012, (iii) Consolidated Statement of Financial Position at August 30, 2013, February 28, 2013 and August 24, 2012, (iv) Consolidated Statement of Cash Flows for the six months ended August 30, 2013, and August 24, 2012, (v) Consolidated Statement of Shareholder’s Equity and (vi) Notes to the Consolidated Financial Statements for the quarter ended August 30, 2013. In accordance with Rule 406T of Regulation S-T, the XBRL related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be part of any registration statement or other document filed under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

AMERICAN GREETINGS CORPORATION
	By:	/s/ Robert D. Tyler
		Robert D. Tyler     Corporate Controller and     Chief Accounting Officer *

October 9, 2013

* (Signing on behalf of Registrant as a duly authorized officer of the Registrant and signing as the chief accounting officer of the Registrant.)

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EX-31.(A)

Exhibit 31 (a)

Certification of Chief Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Zev Weiss, certify that:

1. I have reviewed this quarterly report on Form 10-Q of American Greetings Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of American Greetings Corporation as of, and for, the periods presented in this report;

4. American Greetings Corporation’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for American Greetings Corporation and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to American Greetings Corporation, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of American Greetings Corporation’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in American Greetings Corporation’s internal control over financial reporting that occurred during American Greetings Corporation’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, American Greetings Corporation’s internal control over financial reporting; and

5. American Greetings Corporation’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to American Greetings Corporation’s auditors and the audit committee of American Greetings Corporation’s board of directors:

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect American Greetings Corporation’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in American Greetings Corporation’s internal control over financial reporting.

October 9, 2013	/s/ Zev Weiss
	Zev Weiss
	Co-Chief Executive Officer
	(principal executive officer)

EX-31.(B)

Exhibit 31 (b)

Certification of Chief Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Jeffrey Weiss, certify that:

1. I have reviewed this quarterly report on Form 10-Q of American Greetings Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of American Greetings Corporation as of, and for, the periods presented in this report;

4. American Greetings Corporation’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for American Greetings Corporation and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to American Greetings Corporation, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of American Greetings Corporation’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in American Greetings Corporation’s internal control over financial reporting that occurred during American Greetings Corporation’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, American Greetings Corporation’s internal control over financial reporting; and

5. American Greetings Corporation’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to American Greetings Corporation’s auditors and the audit committee of American Greetings Corporation’s board of directors:

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect American Greetings Corporation’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in American Greetings Corporation’s internal control over financial reporting.

October 9, 2013	/s/ Jeffrey Weiss
	Jeffrey Weiss
	Co-Chief Executive Officer
	(principal executive officer)

EX-31.(C)

Exhibit 31 (c)

Certification of Chief Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Stephen J. Smith, certify that:

1. I have reviewed this quarterly report on Form 10-Q of American Greetings Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of American Greetings Corporation as of, and for, the periods presented in this report;

4. American Greetings Corporation’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for American Greetings Corporation and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to American Greetings Corporation, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of American Greetings Corporation’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in American Greetings Corporation’s internal control over financial reporting that occurred during American Greetings Corporation’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, American Greetings Corporation’s internal control over financial reporting; and

5. American Greetings Corporation’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to American Greetings Corporation’s auditors and the audit committee of American Greetings Corporation’s board of directors:

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect American Greetings Corporation’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in American Greetings Corporation’s internal control over financial reporting.

October 9, 2013	/s/ Stephen J. Smith
	Stephen J. Smith
	Senior Vice President and
	Chief Financial Officer (principal financial officer)

EX-32

Exhibit 32

Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with this quarterly report of American Greetings Corporation on Form 10-Q as filed with the Securities and Exchange Commission on the date therein specified (the “Report”), each of the undersigned certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of American Greetings Corporation.

October 9, 2013

/s/ Zev Weiss

Zev Weiss

Co-Chief Executive Officer (principal executive officer)

/s/ Jeffrey Weiss

Jeffrey Weiss

Co-Chief Executive Officer (principal executive officer)

/s/ Stephen J. Smith

Stephen J. Smith

Senior Vice President and

Chief Financial Officer (principal financial officer)

XML

Customer Allowances and Discounts

6 Months Ended

Aug. 30, 2013

Text Block [Abstract]

Customer Allowances and Discounts

Note 9 – Customer Allowances and Discounts

Trade accounts receivable is reported net of certain allowances and discounts. The most significant of these are as follows:

(In thousands)	August 30, 2013		February 28, 2013		August 24, 2012
Allowance for seasonal sales returns	$	17,612	$	24,574	$	24,127
Allowance for outdated products		12,230		11,156		11,785
Allowance for doubtful accounts		3,484		3,419		21,474
Allowance for marketing funds		27,451		28,610		29,459
Allowance for rebates		24,238		31,771		28,024
	$	85,015	$	99,530	$	114,869

Certain customer allowances and discounts are settled in cash. These accounts, primarily rebates, which are classified as “Accrued liabilities” on the Consolidated Statement of Financial Position, totaled $13.2 million, $13.5 million and $11.4 million as of August 30, 2013, February 28, 2013 and August 24, 2012, respectively.

XML

Customer Allowances and Discounts - Allowances and Discounts Trade Accounts Receivable (Detail) (USD $) In Thousands, unless otherwise specified	Aug. 30, 2013	Feb. 28, 2013	Aug. 24, 2012
Valuation and Qualifying Accounts Disclosure [Line Items]
Allowances and discounts on trade accounts receivables	$ 85,015	$ 99,530	$ 114,869
Allowance for Seasonal Sales Returns [Member]
Valuation and Qualifying Accounts Disclosure [Line Items]
Allowances and discounts on trade accounts receivables	17,612	24,574	24,127
Allowance for Outdated Products [Member]
Valuation and Qualifying Accounts Disclosure [Line Items]
Allowances and discounts on trade accounts receivables	12,230	11,156	11,785
Allowance for Doubtful Accounts [Member]
Valuation and Qualifying Accounts Disclosure [Line Items]
Allowances and discounts on trade accounts receivables	3,484	3,419	21,474
Allowance for Marketing Funds [Member]
Valuation and Qualifying Accounts Disclosure [Line Items]
Allowances and discounts on trade accounts receivables	27,451	28,610	29,459
Allowance for Rebates [Member]
Valuation and Qualifying Accounts Disclosure [Line Items]
Allowances and discounts on trade accounts receivables	$ 24,238	$ 31,771	$ 28,024

XML

Consolidated Statement of Financial Position (USD $) In Thousands, unless otherwise specified	Aug. 30, 2013	Feb. 28, 2013	Aug. 24, 2012
Current assets
Cash and cash equivalents	$ 48,900	$ 86,059	$ 61,743
Trade accounts receivable, net	95,492	105,497	97,564
Inventories	292,158	242,447	275,978
Deferred and refundable income taxes	50,989	72,560	78,713
Prepaid expenses and other	141,810	155,343	134,114
Total current assets	629,349	661,906	648,112
Other assets	435,037	456,751	472,613
Deferred and refundable income taxes	89,079	92,354	120,103
Property, plant and equipment - at cost	847,205	821,759	773,709
Less accumulated depreciation	467,680	449,307	442,135
Property, plant and equipment - net	379,525	372,452	331,574
Total assets	1,532,990	1,583,463	1,572,402
Current liabilities
Debt due within one year	15,000	0	0
Accounts payable	122,874	119,777	135,247
Accrued liabilities	71,123	80,098	66,336
Accrued compensation and benefits	42,710	69,309	55,122
Income taxes payable	7,253	4,968	14,476
Deferred revenue	25,945	31,851	30,517
Other current liabilities	68,145	62,593	46,837
Total current liabilities	353,050	368,596	348,535
Long-term debt	563,480	286,381	280,181
Other liabilities	224,622	225,044	262,923
Deferred income taxes and noncurrent income taxes payable	21,912	21,565	22,008
Shareholders' equity
Capital in excess of par value	240,000	522,425	517,019
Treasury stock		(1,093,782)	(1,078,922)
Accumulated other comprehensive loss	(17,980)	(17,133)	(14,104)
Retained earnings	147,906	1,238,396	1,202,015
Total shareholder's equity	369,926	681,877	658,755
Total liabilities and stockholders equity	1,532,990	1,583,463	1,572,402
Common Shares - Class A [Member]
Shareholders' equity
Common shares		29,088	29,887
Common Shares - Class B [Member]
Shareholders' equity
Common shares		$ 2,883	$ 2,860

XML

Seasonal Nature of Business

6 Months Ended

Aug. 30, 2013

Text Block [Abstract]

Seasonal Nature of Business

Note 2 – Seasonal Nature of Business

A significant portion of the Corporation’s business is seasonal in nature. Therefore, the results of operations for interim periods are not necessarily indicative of the results for the fiscal year taken as a whole.

XML

Income Taxes

6 Months Ended

Aug. 30, 2013

Income Tax Disclosure [Abstract]

Income Taxes

Note 16 – Income Taxes

The Corporation’s provision for income taxes in interim periods is computed by applying its estimated annual effective tax rate against income (loss) before income tax expense (benefit) for the period. In addition, non-recurring or discrete items are recorded during the period in which they occur. The magnitude of the impact that discrete items have on the Corporation’s quarterly effective tax rate is dependent on the level of income in the period. The effective tax rate was 191.9% and 51.6% for the three and six months ended August 30, 2013, respectively, and 29.9% and 31.1% for the three and six months ended August 24, 2012, respectively. The higher than statutory rate in the current period is due primarily to the recording of an $8.0 million valuation allowance against certain net operating loss and foreign tax credit carryforwards which the Corporation believes will expire unused. The valuation allowance was recorded in accordance with Internal Revenue Code sections 382 and 383 due to the Merger as previously disclosed in Note 3. The lower than statutory rate for the prior period was due primarily to the release of reserves upon lapse of the applicable statutes.

At February 28, 2013, the Corporation had unrecognized tax benefits of $21.7 million that, if recognized, would have a favorable effect on the Corporation’s income tax expense of $18.5 million. There were no significant changes to this amount during the first two quarters of 2014. It is reasonably possible that the Corporation’s unrecognized tax positions as of February 28, 2013 could decrease $3.1 million during the next twelve months due to anticipated settlements and resulting cash payments related to open years after 1996, which are currently under examination.

The Corporation recognizes interest and penalties accrued on unrecognized tax benefits and refundable income taxes as a component of income tax expense. During the six months ended August 30, 2013, the Corporation recognized net expense of $0.1 million for interest and penalties on unrecognized tax benefits and refundable income taxes. As of August 30, 2013, the total amount of gross accrued interest and penalties related to unrecognized tax benefits less refundable income taxes was a net payable of $4.6 million.

The Corporation is subject to examination by the Internal Revenue Service for tax years 2010 to the present and various U.S. state and local jurisdictions for tax years 1996 to the present. The Corporation is also subject to tax examination in various international tax jurisdictions including Australia, Canada, New Zealand and the United Kingdom for tax years 2006 to the present.

XML

Business Segment Information - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	Aug. 30, 2013	Feb. 28, 2013	Aug. 24, 2012
Segment Reporting Information [Line Items]
Severance accrual	$ 2.9	$ 6.0	$ 4.5
United Kingdom [Member]
Segment Reporting Information [Line Items]
Number of card and gift retail stores	401

XML

Inventories - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	Aug. 30, 2013	Feb. 28, 2013	Aug. 24, 2012
Inventory Disclosure [Abstract]
Inventory held on location for retailers with scan-based trading arrangements, which is included in finished products	$ 63.9	$ 59.7	$ 58.6

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Inventories

6 Months Ended

Aug. 30, 2013

Inventory Disclosure [Abstract]

Inventories

Note 10 – Inventories

(In thousands)	August 30, 2013		February 28, 2013		August 24, 2012
Raw materials	$	28,080	$	21,303	$	23,256
Work in process		12,021		6,683		13,116
Finished products		317,762		278,573		301,634
		357,863		306,559		338,006
Less LIFO reserve		84,639		84,166		82,939
		273,224		222,393		255,067
Display materials and factory supplies		18,934		20,054		20,911
	$	292,158	$	242,447	$	275,978

The valuation of inventory under the Last-In, First-Out (“LIFO”) method is made at the end of each fiscal year based on inventory levels and costs at that time. Accordingly, interim LIFO calculations, by necessity, are based on estimates of expected fiscal year-end inventory levels and costs, and are subject to final fiscal year-end LIFO inventory calculations.

Inventory held on location for retailers with scan-based trading arrangements, which is included in finished products, totaled $63.9 million, $59.7 million and $58.6 million as of August 30, 2013, February 28, 2013 and August 24, 2012, respectively.

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Other Income and Expense - Other Operating (Income) Expense - Net (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended		3 Months Ended	6 Months Ended
	Aug. 30, 2013	Aug. 24, 2012	Aug. 30, 2013	Aug. 24, 2012	May 25, 2012 AG Intellectual Properties [Member]	Aug. 24, 2012 AG Intellectual Properties [Member]
Other Income Expense [Line Items]
Clinton Cards secured debt (recovery) impairment	$ (428)	$ 2,249	$ (2,428)	$ 10,043
Termination of certain agency agreements					2,100	2,125
Loss (gain) on asset disposal	122	(2)	(113)	154
Miscellaneous	(655)	(777)	(1,738)	(1,328)
Other operating (income) expense - net	$ (961)	$ 1,470	$ (4,279)	$ 10,994

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Deferred Costs - Deferred Costs and Future Payment Commitments (Detail) (USD $) In Thousands, unless otherwise specified	Aug. 30, 2013	Feb. 28, 2013	Aug. 24, 2012
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract]
Prepaid expenses and other	$ 84,368	$ 93,873	$ 79,145
Other assets	314,136	332,159	358,337
Deferred cost assets	398,504	426,032	437,482
Other current liabilities	(63,881)	(61,282)	(44,126)
Other liabilities	(86,777)	(92,153)	(127,857)
Deferred cost liabilities	(150,658)	(153,435)	(171,983)
Net deferred costs	$ 247,846	$ 272,597	$ 265,499

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Business Segment Information (Tables)

6 Months Ended

Aug. 30, 2013

Segment Reporting [Abstract]

Schedule of Segment Reporting Information by Segment

	Three Months Ended						Six Months Ended
(In thousands)	August 30, 2013			August 24, 2012			August 30, 2013			August 24, 2012
Total Revenue:
North American Social Expression Products	$	261,694		$	265,856		$	589,981		$	574,415
International Social Expression Products		63,372			74,834			134,173			137,514
Intersegment items		(8,737	)		(13,542	)		(19,829	)		(13,542	)
Net		54,635			61,292			114,344			123,972
Retail Operations		62,732			39,884			137,450			39,884
AG Interactive		14,504			15,777			29,204			31,273
Non-reportable segments		26,856			11,027			46,745			17,398
	$	420,421		$	393,836		$	917,724		$	786,942

	Three Months Ended						Six Months Ended
(In thousands)	August 30, 2013			August 24, 2012			August 30, 2013			August 24, 2012
Segment Earnings (Loss):
North American Social Expression Products	$	35,045		$	20,440		$	101,392		$	76,658
International Social Expression Products		2,195			289			4,739			(22,268	)
Intersegment items		(1,511	)		(7,402	)		(3,725	)		(7,402	)
Net		684			(7,113	)		1,014			(29,670	)
Retail Operations		(8,984	)		(5,106	)		(12,436	)		(5,106	)
AG Interactive		3,165			4,609			6,478			8,382
Non-reportable segments		10,059			2,300			17,441			2,242
Unallocated
Interest expense		(5,433	)		(4,434	)		(9,745	)		(8,810	)
Profit-sharing plan expense		(484	)		(449	)		(4,465	)		(3,429	)
Stock-based compensation expense		(11,121	)		(2,972	)		(13,596	)		(4,841	)
Corporate overhead expense		(17,249	)		(13,346	)		(27,855	)		(31,077	)
		(34,287	)		(21,201	)		(55,661	)		(48,157	)
	$	5,682		$	(6,071	)	$	58,228		$	4,349

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Merger (Tables)

6 Months Ended

Aug. 30, 2013

Business Combinations [Abstract]

Charges Incurred Associated with Merger

The charges incurred in the three and six months ended August 30, 2013 associated with the Merger that do not have comparative amounts in the prior year period are reflected on the Consolidated Statement of Operations as follows:

	Three Months Ended						Six Months Ended
	August 30, 2013						August 30, 2013
(In millions)	Incremental compensation expense		Transaction costs		Total		Incremental compensation expense		Transaction costs		Total
Administrative and general expenses	$	9.7	$	12.6	$	22.3	$	9.7	$	17.2	$	26.9

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Merger (Policies)

6 Months Ended

Aug. 30, 2013

Accounting Changes And Error Corrections [Abstract]

Business Combinations

The Corporation will continue to apply its historical basis of accounting in its stand-alone financial statements after the Merger. This is based on the determination under Accounting Standards Codification Topic 805, “Business Combinations,” that Parent is the acquiring entity and the determination under SEC Staff Accounting Bulletin No. 54, codified as Topic 5J, “Push Down Basis of Accounting Required In Certain Limited Circumstances,” that while the push down of Parent’s basis in the Corporation is permissible, it is not required due to the existence of significant outstanding public debt securities of the Corporation before and after the Merger. In concluding that the outstanding public debt is significant, the Corporation considered both quantitative and qualitative factors, including both the book value and fair value of the outstanding public debt securities, as well as a number of provisions contained within the securities which impacted Parent’s ability to control their form of ownership of the Corporation.

Presentation of Unrecognized Tax Benefit

In July 2013, the FASB issued Accounting Standards Update (“ASU”) No. 2013-11 (“ASU 2013-11”), “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.” ASU 2013-11 requires an unrecognized tax benefit, or a portion of an unrecognized tax benefit, to be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except as follows. To the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date, the unrecognized tax benefit should be presented in the financial statements as a liability and not combined with deferred tax assets. ASU 2013-11 is effective for annual and interim periods beginning after December 15, 2014, with early adoption permitted. The Corporation does not expect that the adoption of this standard will have a material effect on its financial statements.

Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income

In February 2013, the FASB issued ASU No. 2013-02 (“ASU 2013-02”), “Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income.” ASU 2013-02 requires entities to disclose additional information about changes in other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income and the income statement line items affected. The provisions of this guidance are effective prospectively for annual and interim periods beginning after December 15, 2012. The Corporation adopted this standard on March 1, 2013. See Note 8 for further information.

Testing Indefinite-Lived Intangible Assets for Impairment

In July 2012, the FASB issued ASU No. 2012-02 (“ASU 2012-02”), “Testing Indefinite-Lived Intangible Assets for Impairment.” ASU 2012-02 gives entities an option to first assess qualitative factors to determine whether the existence of events and circumstances indicate that it is more likely than not that an indefinite-lived intangible asset is impaired. If based on its qualitative assessment an entity concludes that it is more likely than not that the fair value of an indefinite-lived intangible asset is less than its carrying amount, quantitative impairment testing is required. However, if an entity concludes otherwise, quantitative impairment testing is not required. ASU 2012-02 is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. The Corporation adopted this standard on March 1, 2013. The adoption of this standard did not have a material effect on the Corporation’s financial statements.

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Royalty Revenue and Related Expenses - Revenues and Expenses Associated with Servicing of Agreements (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Aug. 30, 2013	Aug. 24, 2012	Aug. 30, 2013	Aug. 24, 2012
Royalty expenses
Material, labor and other production costs	$ 176,674	$ 176,732	$ 380,511	$ 340,596
Selling, distribution and marketing expenses	155,007	148,995	325,346	276,158
Administrative and general expenses	82,684	70,870	153,764	151,038
AG Intellectual Properties [Member]
Segment Reporting Information [Line Items]
Royalty revenue	6,412	7,133	12,918	10,862
Royalty expenses
Material, labor and other production costs	1,551	2,673	3,498	5,001
Selling, distribution and marketing expenses	1,936	2,723	3,184	3,379
Administrative and general expenses	441	441	901	863
Expenses associated with royalty revenue, Total	$ 3,928	$ 5,837	$ 7,583	$ 9,243

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Deferred Costs (Tables)

6 Months Ended

Aug. 30, 2013

Text Block [Abstract]

Deferred Costs and Future Payment Commitments

Deferred costs and future payment commitments for retail supply agreements are included in the following financial statement captions:

(In thousands)	August 30, 2013			February 28, 2013			August 24, 2012
Prepaid expenses and other	$	84,368		$	93,873		$	79,145
Other assets		314,136			332,159			358,337
Deferred cost assets		398,504			426,032			437,482
Other current liabilities		(63,881	)		(61,282	)		(44,126	)
Other liabilities		(86,777	)		(92,153	)		(127,857	)
Deferred cost liabilities		(150,658	)		(153,435	)		(171,983	)
Net deferred costs	$	247,846		$	272,597		$	265,499

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Merger - Additional Information (Detail) (USD $)	6 Months Ended
	Aug. 30, 2013	Aug. 30, 2013 Parent Company [Member]	Oct. 01, 2013 Subsequent Event [Member]	Aug. 30, 2013 Preferred Stock [Member] Parent Company [Member]
Merger Agreement [Line Items]
Offer price to convert common shares held by the shareholders (except family shareholders) of the Corporation	$ 19.00
Consideration received by family shareholders	$ 0
Stock issued in connection with merger				245,000,000
Cash required to pay the dividend				29,000,000
Cash dividend rate variable		LIBOR plus 11.5%
Cash dividend rate		11.50%
Expenses related to stock issuance and transaction on behalf of Parent			$ 14,000,000

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Other Income and Expense - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended		1 Months Ended	3 Months Ended				6 Months Ended		12 Months Ended	3 Months Ended	6 Months Ended
	Aug. 30, 2013	Aug. 24, 2012	Aug. 30, 2013	Aug. 24, 2012	Aug. 31, 2012 Party City Holdings [Member]	Aug. 30, 2013 Party City Holdings [Member]	Aug. 30, 2013 Clinton Cards [Member]	May 31, 2013 Clinton Cards [Member]	Aug. 24, 2012 Clinton Cards [Member]	Aug. 30, 2013 Clinton Cards [Member]	Aug. 24, 2012 Clinton Cards [Member]	Feb. 28, 2013 Clinton Cards [Member]	May 25, 2012 AG Intellectual Properties [Member]	Aug. 24, 2012 AG Intellectual Properties [Member]
Other Income And Expense [Line Items]
Miscellaneous impairment related to senior secured debt	$ (428)	$ 2,249	$ (2,428)	$ 10,043			$ 400	$ 2,000	$ 2,200	$ 2,400	$ 10,000	$ 8,100
Contract termination													2,100	2,125
Gain on sale of Party City investment	$ 3,262	$ 3,152	$ 3,262	$ 3,152	$ 3,200	$ 3,300

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Accumulated Other Comprehensive Loss (Tables)

6 Months Ended

Aug. 30, 2013

Text Block [Abstract]

Changes in Accumulated Other Comprehensive Income (Loss)

The changes in accumulated other comprehensive income (loss) for the six months ended August 30, 2013 are as follows.

(In thousands)	Foreign Currency Translation Adjustments			Pensions and Other Postretirement Benefits			Unrealized Investment Gain			Total
Balance at February 28, 2013	$	12,594		$	(29,731	)	$	4		$	(17,133	)
Other comprehensive (loss) income before reclassifications		(1,660	)		154			(4	)		(1,510	)
Amounts reclassified from accumulated other comprehensive income (loss)		—			663			—			663
Net current period other comprehensive (loss) income		(1,660	)		817			(4	)		(847	)
Balance at August 30, 2013	$	10,934		$	(28,914	)	$	—		$	(17,980	)

Reclassifications Out of Accumulated Other Comprehensive Income (Loss)

The reclassifications out of accumulated other comprehensive income (loss) are as follows.

(In thousands)	Six Months Ended August 30, 2013			Classification on Consolidated Statement of Operations
Amortization of pension and other postretirement benefits items
Actuarial losses, net	$	(1,405	)	Administrative and general expenses
Prior service cost		548		Administrative and general expenses
		(857	)
Tax benefit		194		Income tax expense
Total, net of tax		(663	)
Total reclassifications	$	(663	)

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Fair Value Measurements - Assets Measured at Fair Value as of Measurement Date (Detail) (Fair Value, Measurements, Recurring [Member], Deferred Compensation Plan Assets [Member], USD $) In Thousands, unless otherwise specified	Aug. 30, 2013	Feb. 28, 2013	Aug. 24, 2012
Assets measured on a recurring and non-recurring basis:
Assets measured on a recurring basis	$ 11,096	$ 10,636	$ 10,016
Level 1 [Member]
Assets measured on a recurring and non-recurring basis:
Assets measured on a recurring basis	8,545	9,175	8,482
Level 2 [Member]
Assets measured on a recurring and non-recurring basis:
Assets measured on a recurring basis	2,551	1,461	1,534
Level 3 [Member]
Assets measured on a recurring and non-recurring basis:
Assets measured on a recurring basis

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Retirement Benefits - Additional Information (Detail) (USD $) In Millions, unless otherwise specified				6 Months Ended		3 Months Ended		6 Months Ended
	Aug. 30, 2013	Feb. 28, 2013	Aug. 24, 2012	Aug. 30, 2013 Profit-Sharing Plan [Member]	Aug. 24, 2012 Profit-Sharing Plan [Member]	Aug. 30, 2013 Defined Contribution Plans [Member] Domestic [Member]	Aug. 24, 2012 Defined Contribution Plans [Member] Domestic [Member]	Aug. 30, 2013 Defined Contribution Plans [Member] Domestic [Member]	Aug. 24, 2012 Defined Contribution Plans [Member] Domestic [Member]
Defined Benefit Plan Disclosure [Line Items]
Corporate contributions to the profit-sharing plan				$ 4.5	$ 3.4	$ 1.4	$ 1.3	$ 2.7	$ 2.6
Liability for postretirement benefits other than pensions	17.6	15.7	27.7
Long-term liability for pension benefits	$ 86.3	$ 81.4	$ 75.6

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Acquisition - Charges Incurred for Acquisition (Detail) (USD $)	3 Months Ended			6 Months Ended		12 Months Ended
	Aug. 30, 2013	May 31, 2013	Aug. 24, 2012	Aug. 30, 2013	Aug. 24, 2012	Feb. 28, 2013
Schedule Of Activities And Transactions Associated With Related Cost [Line Items]
Bad debt expense				$ 176,000	$ 17,567,000
Impairment of debt purchased	(428,000)		2,249,000	(2,428,000)	10,043,000
Clinton Cards [Member]
Schedule Of Activities And Transactions Associated With Related Cost [Line Items]
Contract asset impairment					4,000,000
Bad debt expense					17,200,000
Legal and advisory fees					6,000,000
Impairment of debt purchased	400,000	2,000,000	2,200,000	2,400,000	10,000,000	8,100,000
Total					37,200,000
Clinton Cards [Member] | Net Sales [Member]
Schedule Of Activities And Transactions Associated With Related Cost [Line Items]
Contract asset impairment					4,000,000
Total					4,000,000
Clinton Cards [Member] | Administrative and General Expenses [Member]
Schedule Of Activities And Transactions Associated With Related Cost [Line Items]
Bad debt expense					17,200,000
Legal and advisory fees					6,000,000
Total					23,200,000
Clinton Cards [Member] | Other Operating (Income) Expense - Net [Member]
Schedule Of Activities And Transactions Associated With Related Cost [Line Items]
Impairment of debt purchased					10,000,000
Total					$ 10,000,000

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Business Segment Information

6 Months Ended

Aug. 30, 2013

Segment Reporting [Abstract]

Business Segment Information

Note 17 – 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 and International Social Expression Products segments primarily design, manufacture and sell greeting cards and other related products through various channels of distribution with mass merchandising as the primary channel. At August 30, 2013, the Retail Operations segment operated 401 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, instant messaging services and electronic mobile devices. The Corporation’s non-reportable operating segments primarily include licensing activities and the design, manufacture and sale of display fixtures.

	Three Months Ended						Six Months Ended
(In thousands)	August 30, 2013			August 24, 2012			August 30, 2013			August 24, 2012
Total Revenue:
North American Social Expression Products	$	261,694		$	265,856		$	589,981		$	574,415
International Social Expression Products		63,372			74,834			134,173			137,514
Intersegment items		(8,737	)		(13,542	)		(19,829	)		(13,542	)
Net		54,635			61,292			114,344			123,972
Retail Operations		62,732			39,884			137,450			39,884
AG Interactive		14,504			15,777			29,204			31,273
Non-reportable segments		26,856			11,027			46,745			17,398
	$	420,421		$	393,836		$	917,724		$	786,942

	Three Months Ended						Six Months Ended
(In thousands)	August 30, 2013			August 24, 2012			August 30, 2013			August 24, 2012
Segment Earnings (Loss):
North American Social Expression Products	$	35,045		$	20,440		$	101,392		$	76,658
International Social Expression Products		2,195			289			4,739			(22,268	)
Intersegment items		(1,511	)		(7,402	)		(3,725	)		(7,402	)
Net		684			(7,113	)		1,014			(29,670	)
Retail Operations		(8,984	)		(5,106	)		(12,436	)		(5,106	)
AG Interactive		3,165			4,609			6,478			8,382
Non-reportable segments		10,059			2,300			17,441			2,242
Unallocated
Interest expense		(5,433	)		(4,434	)		(9,745	)		(8,810	)
Profit-sharing plan expense		(484	)		(449	)		(4,465	)		(3,429	)
Stock-based compensation expense		(11,121	)		(2,972	)		(13,596	)		(4,841	)
Corporate overhead expense		(17,249	)		(13,346	)		(27,855	)		(31,077	)
		(34,287	)		(21,201	)		(55,661	)		(48,157	)
	$	5,682		$	(6,071	)	$	58,228		$	4,349

For the three and six month periods ended August 30, 2013, stock-based compensation in the table above includes non-cash stock-based compensation prior to the Merger and the impact of the settlement of stock options and the cancellation or modification of outstanding restricted stock units and performance shares concurrent with the Merger, a portion of which is non-cash. There is no stock-based compensation subsequent to the Merger as these plans were converted into cash compensation plans at the time of the Merger. See Note 3 for further information.

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

Refer to Note 4 for segment information related to certain prior year charges associated with activities and transactions in connection with the acquisition of Clinton Cards that do not have comparative amounts in the current year; and current year charges associated with the Merger that do not have comparative amounts in the prior year.

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 $2.9 million, $6.0 million and $4.5 million at August 30, 2013, February 28, 2013 and August 24, 2012, 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.

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Consolidated Statement of Cash Flows (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Aug. 30, 2013	Aug. 24, 2012
OPERATING ACTIVITIES:
Net income	$ 28,172	$ 2,996
Adjustments to reconcile net income to cash flows from operating activities:
Stock-based compensation	8,090	4,841
Net (gain) loss on disposal of fixed assets	(113)	154
Depreciation and intangible assets amortization	26,230	23,310
Provision for doubtful accounts	176	17,567
Clinton Cards secured debt (recovery) impairment	(2,428)	10,043
Deferred income taxes	10,630	(2,379)
Gain related to Party City investment	(3,262)	(3,152)
Other non-cash charges	1,102	619
Changes in operating assets and liabilities, net of acquisitions:
Trade accounts receivable	9,491	(1,684)
Inventories	(49,601)	(51,668)
Other current assets	16,053	(12,188)
Receivable from parent	(13,983)
Income taxes	17,644	(9,532)
Deferred costs - net	24,403	34,422
Accounts payable and other liabilities	(39,718)	35,854
Other - net	1,183	(323)
Total Cash Flows From Operating Activities	34,069	48,880
INVESTING ACTIVITIES:
Property, plant and equipment additions	(31,977)	(46,058)
Cash payments for business acquisitions, net of cash acquired		621
Proceeds from sale of fixed assets	293	488
Purchase of Clinton Cards debt		(56,560)
Proceeds from Clinton Cards administration	4,982
Proceeds related to Party City investment	12,105
Total Cash Flows From Investing Activities	(14,597)	(101,509)
FINANCING ACTIVITIES:
Proceeds from revolving lines of credit	205,036	176,350
Repayments on revolving lines of credit	(252,336)	(121,350)
Proceeds from term loan	339,250
Issuance, exercise or settlement of share-based payment awards	(4,487)	(591)
Tax benefit (deficiency) from share-based payment awards	279	(413)
Contribution from parent	240,000
Purchase of treasury shares		(60,700)
Payments to shareholders to effect merger	(568,303)
Dividends to shareholders	(9,614)	(10,440)
Debt issuance costs	(6,545)
Total Cash Flows From Financing Activities	(56,720)	(17,144)
EFFECT OF EXCHANGE RATE CHANGES ON CASH	89	(922)
DECREASE IN CASH AND CASH EQUIVALENTS	(37,159)	(70,695)
Cash and Cash Equivalents at Beginning of Year	86,059	132,438
Cash and Cash Equivalents at End of Period	$ 48,900	$ 61,743

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Consolidated Statement of Shareholder's Equity (Parenthetical) (USD $)	6 Months Ended
	Aug. 30, 2013
Dividends declared per share	$ 0.30
Retained Earnings [Member]
Dividends declared per share	$ 0.30

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Merger

6 Months Ended

Aug. 30, 2013

Business Combinations [Abstract]

Merger

Note 3 – Merger

At a special meeting of the Corporation’s shareholders held on August 7, 2013, the shareholders voted to adopt the Agreement and Plan of Merger, as amended, dated March 29, 2013, among the Corporation, Century Intermediate Holding Company, a Delaware corporation (“Parent”), and Century Merger Company, an Ohio corporation and a wholly-owned subsidiary of Parent (“Merger Sub”), and the merger contemplated thereby (the “Merger”). On August 9, 2013, the Corporation completed the Merger. As a result of the Merger, the Corporation is now wholly owned by Parent, which is owned by Morry Weiss, the Chairman of the Board of the Corporation, Zev Weiss, a co-Chief Executive Officer of the Corporation, Jeff Weiss, a co-Chief Executive Officer of the Corporation, and certain other members of the Weiss family and related entities (“Family Shareholders”).

In connection with the Merger, common shares held by the shareholders of the Corporation, other than the Family Shareholders, were converted into the right to receive $19.00 per share in cash. Common shares held by the Family Shareholders were contributed to Parent as equity and thereafter cancelled for no consideration. As a result of the Merger, all formerly outstanding and treasury Class A and Class B common shares have been cancelled. As described in the Agreement and Plan of Merger, all stock based compensation plans of the Corporation were modified, settled or cancelled as a result of the Merger. All outstanding stock based compensation related to the Family Shareholders was cancelled without consideration. For employee stock based compensation, other than Family Shareholder employees, all outstanding stock options were or will be settled for cash and the performance share and restricted stock unit programs were converted into cash programs, with any performance shares and restricted stock units being converted to the right to receive $19.00 per share in the event that the performance share or restricted stock units are earned by the employee at a future date.

The Corporation incurred costs associated with the Merger which included transaction costs and incremental compensation expense related to the settlement of stock options and modification and cancellation of outstanding restricted stock units and performance shares. The charges incurred in the three and six months ended August 30, 2013 associated with the Merger that do not have comparative amounts in the prior year period are reflected on the Consolidated Statement of Operations as follows:

	Three Months Ended						Six Months Ended
	August 30, 2013						August 30, 2013
(In millions)	Incremental compensation expense		Transaction costs		Total		Incremental compensation expense		Transaction costs		Total
Administrative and general expenses	$	9.7	$	12.6	$	22.3	$	9.7	$	17.2	$	26.9

These charges are included in the Corporation’s Unallocated segment.

The Corporation will continue to apply its historical basis of accounting in its stand-alone financial statements after the Merger. This is based on the determination under Accounting Standards Codification Topic 805, “Business Combinations,” that Parent is the acquiring entity and the determination under SEC Staff Accounting Bulletin No. 54, codified as Topic 5J, “Push Down Basis of Accounting Required In Certain Limited Circumstances,” that while the push down of Parent’s basis in the Corporation is permissible, it is not required due to the existence of significant outstanding public debt securities of the Corporation before and after the Merger. In concluding that the outstanding public debt is significant, the Corporation considered both quantitative and qualitative factors, including both the book value and fair value of the outstanding public debt securities, as well as a number of provisions contained within the securities which impacted Parent’s ability to control their form of ownership of the Corporation.

In connection with the Merger, Parent issued $245 million of preferred stock. Parent may elect to either accrue or pay cash for dividends on the preferred stock. The preferred stock carries a cash dividend rate of LIBOR plus 11.5%. Prior to the payment of dividends by Parent, it is expected that the Corporation will provide Parent with the cash flow for Parent to pay dividends on the preferred stock. Assuming the dividends are paid regularly in cash, rather than accrued, the annual cash required to pay the dividend is expected to be approximately $29 million while the entire issuance of the preferred stock is outstanding.

Also in connection with the Merger, the Corporation paid approximately $14 million of stock issuance and transaction related expenses on behalf of Parent and recorded a receivable from Parent which is included in “Prepaid expenses and other” on the Consolidated Statement of Financial Position. Parent reimbursed this amount on October 1, 2013.

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Basis of Presentation

6 Months Ended

Aug. 30, 2013

Accounting Policies [Abstract]

Basis of Presentation

Note 1 – Basis of Presentation

The accompanying unaudited consolidated financial statements of American Greetings Corporation and its subsidiaries (the “Corporation”) have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary to fairly present financial position, results of operations and cash flows for the periods have been included. On August 9, 2013, the Corporation completed a merger whereby the Corporation was acquired by Century Intermediate Holding Company, a company that was formed by the Chairman of the Board, the co-Chief Executive Officers of the Corporation and certain other members of the Weiss family and related entities. See Note 3 for further information. As a result of the merger, the Corporation’s equity is no longer publicly traded. As such, earnings per share information is not required, and therefore prior period earnings per share information is not included in this Form 10-Q.

The Corporation’s fiscal year ends on February 28 or 29. References to a particular year refer to the fiscal year ending in February of that year. For example, 2013 refers to the year ended February 28, 2013. The Corporation’s subsidiary, AG Retail Cards Limited, which operates the recently acquired retail stores in the United Kingdom (also referred to herein as “UK”), is consolidated on a one-month lag corresponding with its fiscal year-end of February 1 for 2014. See Note 4 for further information.

The Corporation’s first fiscal quarter begins each year on March 1. The Corporation’s fiscal quarters generally end on the last Friday of the month in which the fiscal quarter ends. In the current year, the first quarter ended on May 31, 2013 and consisted of 92 days. The prior year first quarter ended on May 25, 2012 and consisted of 86 days. This resulted in six additional selling days in the current year first quarter. This fiscal timing will not impact the full year results as the current year fourth quarter will consist of six less days compared to the prior year fourth quarter.

These interim financial statements should be read in conjunction with the Corporation’s financial statements and notes thereto included in its Annual Report on Form 10-K for the year ended February 28, 2013, from which the Consolidated Statement of Financial Position at February 28, 2013, presented herein, has been derived. Certain amounts in the prior year financial statements have been reclassified to conform to the 2014 presentation. These reclassifications had no material impact on financial position, earnings or cash flows.

The Corporation’s investments in less than majority-owned companies in which it has the ability to exercise significant influence over the operation and financial policies are accounted for using the equity method except when they qualify as variable interest entities (“VIE”) and the Corporation is the primary beneficiary, in which case, the investments are consolidated in accordance with Accounting Standards Codification (“ASC”) Topic 810 (“ASC 810”), “Consolidation.” Investments that do not meet the above criteria are accounted for under the cost method.

The Corporation holds an approximately 15% equity interest in Schurman Fine Papers (“Schurman”), which is a VIE as defined in ASC 810. Schurman owns and operates specialty card and gift retail stores in the United States and Canada. The stores are primarily located in malls and strip shopping centers. During the current period, the Corporation reassessed the variable interests in Schurman and determined that a third party holder of variable interests has the controlling financial interest in the VIE and thus, the third party, not the Corporation, is the primary beneficiary. In completing this assessment, the Corporation identified the activities that it considers most significant to the future economic success of the VIE and determined that it does not have the power to direct those activities. As such, Schurman is not consolidated in the Corporation’s results. The Corporation’s maximum exposure to loss as it relates to Schurman as of August 30, 2013 includes:

• the cost method investment in the equity of Schurman of $1.9 million;

• the limited guaranty (“Liquidity Guaranty”) of Schurman’s indebtedness of $10.0 million;

• normal course of business trade and other accounts receivable due from Schurman of $25.7 million, the balance of which fluctuates throughout the year due to the seasonal nature of the business; and

• the operating leases currently subleased to Schurman, the aggregate lease payments for the remaining life of which was $9.4 million, $11.8 million and $17.7 million as of August 30, 2013, February 28, 2013 and August 24, 2012, respectively.

The Corporation provides Schurman limited credit support through the provision of a Liquidity Guaranty in favor of the lenders under Schurman’s senior revolving credit facility (the “Senior Credit Facility”). Pursuant to the terms of the Liquidity Guaranty, the Corporation has guaranteed the repayment of up to $10.0 million of Schurman’s borrowings under the Senior Credit Facility to help ensure that Schurman has sufficient borrowing availability under this facility. The Liquidity Guaranty is required to be backed by a letter of credit for the term of the Liquidity Guaranty, which is currently anticipated to end in July 2016. The Corporation’s obligations under the Liquidity Guaranty generally may not be triggered unless Schurman’s lenders under its Senior Credit Facility have substantially completed the liquidation of the collateral under Schurman’s Senior Credit Facility, or 91 days after the liquidation is started, whichever is earlier, and will be limited to the deficiency, if any, between the amount owed and the amount collected in connection with the liquidation. There was no triggering event or liquidation of collateral as of August 30, 2013 requiring the use of the Liquidity Guaranty. The Corporation is not aware of any events or changes in circumstances that had occurred during the second quarter of 2014 that the Corporation believes are reasonably likely to have had a significant adverse effect on the carrying amount of the Schurman investment.

In addition, the Corporation held an $8.8 million investment in the common stock of Party City Holdings, Inc (“Party City”), which was accounted for under the cost method. On August 1, 2013, the Corporation received a cash distribution from Party City totaling $12.1 million, which was in part a return of capital that reduced the carrying amount of the investment to zero, the remainder of which is included in “Other non-operating (income) expense – net” on the Consolidated Statement of Operations. See Note 7 for further information.

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Merger - Charges Incurred Associated with Merger (Detail) (USD $)	3 Months Ended		6 Months Ended
	Aug. 30, 2013	Aug. 24, 2012	Aug. 30, 2013	Aug. 24, 2012
Restructuring Cost and Reserve [Line Items]
Total	$ 82,684,000	$ 70,870,000	$ 153,764,000	$ 151,038,000
Merger [Member]
Restructuring Cost and Reserve [Line Items]
Total	22,300,000		26,900,000
Administrative and General Expenses [Member] | Merger [Member]
Restructuring Cost and Reserve [Line Items]
Incremental compensation expense	9,700,000		9,700,000
Transaction costs	$ 12,600,000		$ 17,200,000

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Acquisition (Tables)

6 Months Ended

Aug. 30, 2013

Business Combinations [Abstract]

Charges Incurred for Acquisition

The prior year six-month period included charges of $37.2 million associated with the aforementioned acquisition and are reflected on the Consolidated Statement of Operations as follows:  

(In millions)	Contract asset impairment		Bad debt expense		Legal and advisory fees		Impairment of debt purchased		Total
Net sales	$	4.0	$	—	$	—	$	—	$	4.0
Administrative and general expenses		—		17.2		6.0		—		23.2
Other operating (income) expense—net		—		—		—		10.0		10.0
	$	4.0	$	17.2	$	6.0	$	10.0	$	37.2

Charges Reflected in Reportable Segments

These charges are reflected in the Corporation’s reportable segments as follows:

(In millions)	Contract asset impairment		Bad debt expense		Legal and advisory fees		Impairment of debt purchased		Total
International Social Expression Products	$	4.0	$	17.2	$	—	$	—	$	21.2
Unallocated		—		—		6.0		10.0		16.0
	$	4.0	$	17.2	$	6.0	$	10.0	$	37.2

Purchase Price Allocation

The following represents the final purchase price allocation:

Purchase price (in millions):
Credit bid	$	37.2
Effective settlement of pre-existing relationships with the legacy Clinton Cards business		6.4
Cash acquired		(0.6	)
	$	43.0
Allocation (in millions):
Inventory	$	5.5
Property, plant and equipment		18.4
Intangible assets		22.5
Current liabilities assumed		(3.4	)
	$	43.0

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Customer Allowances and Discounts (Tables)

6 Months Ended

Aug. 30, 2013

Text Block [Abstract]

Allowances and Discounts Trade Accounts Receivable

Trade accounts receivable is reported net of certain allowances and discounts. The most significant of these are as follows:

(In thousands)	August 30, 2013		February 28, 2013		August 24, 2012
Allowance for seasonal sales returns	$	17,612	$	24,574	$	24,127
Allowance for outdated products		12,230		11,156		11,785
Allowance for doubtful accounts		3,484		3,419		21,474
Allowance for marketing funds		27,451		28,610		29,459
Allowance for rebates		24,238		31,771		28,024
	$	85,015	$	99,530	$	114,869

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Fair Value Measurements (Tables)

6 Months Ended

Aug. 30, 2013

Fair Value Disclosures [Abstract]

Assets Measured at Fair Value as of Measurement Date

The following table summarizes the financial assets measured at fair value as of August 30, 2013:

(In thousands)	August 30, 2013		Level 1		Level 2		Level 3
Assets measured on a recurring basis:
Deferred compensation plan assets	$	11,096	$	8,545	$	2,551	$	—

The following table summarizes the financial assets measured at fair value as of February 28, 2013:

(In thousands)	February 28, 2013		Level 1		Level 2		Level 3
Assets measured on a recurring basis:
Deferred compensation plan assets	$	10,636	$	9,175	$	1,461	$	—

The following table summarizes the financial assets measured at fair value as of August 24, 2012:

(In thousands)	August 24, 2012		Level 1		Level 2		Level 3
Assets measured on a recurring basis:
Deferred compensation plan assets	$	10,016	$	8,482	$	1,534	$	—

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Inventories - Schedule of Inventories (Detail) (USD $) In Thousands, unless otherwise specified	Aug. 30, 2013	Feb. 28, 2013	Aug. 24, 2012
Inventory Disclosure [Abstract]
Raw materials	$ 28,080	$ 21,303	$ 23,256
Work in process	12,021	6,683	13,116
Finished products	317,762	278,573	301,634
Gross inventory	357,863	306,559	338,006
Less LIFO reserve	84,639	84,166	82,939
Inventory net of last in first out reserve	273,224	222,393	255,067
Display materials and factory supplies	18,934	20,054	20,911
Net inventory	$ 292,158	$ 242,447	$ 275,978

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Other Income and Expense - Other Non-Operating Income - Net (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Aug. 30, 2013	Aug. 24, 2012	Aug. 30, 2013	Aug. 24, 2012
Income Statement [Abstract]
Gain related to Party City investment	$ (3,262)	$ (3,152)	$ (3,262)	$ (3,152)
Foreign exchange (gain) loss	(360)	1,060	(1,275)	(396)
Rental income	(402)	(410)	(886)	(1,046)
Miscellaneous	(1)	2	25	(177)
Other non-operating income - net	$ (4,025)	$ (2,500)	$ (5,398)	$ (4,771)

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Acquisition - Purchase Price Allocation (Detail) (Clinton Cards [Member], USD $) In Millions, unless otherwise specified	Aug. 30, 2013
Clinton Cards [Member]
Schedule Of Business Acquisitions Purchase Price Allocation [Line Items]
Credit bid	$ 37.2
Effective settlement of pre-existing relationships with the legacy Clinton Cards business	6.4
Cash acquired	(0.6)
Total purchase price	43.0
Inventory	5.5
Property, plant and equipment	18.4
Intangible assets	22.5
Current liabilities assumed	(3.4)
Total allocation	$ 43.0

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Consolidated Statement of Comprehensive (Loss) Income (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Aug. 30, 2013	Aug. 24, 2012	Aug. 30, 2013	Aug. 24, 2012
Statement Of Income And Comprehensive Income [Abstract]
Net (loss) income	$ (5,221)	$ (4,254)	$ 28,172	$ 2,996
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	495	5,629	(1,660)	(2,771)
Pension and postretirement benefit adjustments	440	23	817	498
Unrealized loss on securities	(5)	(1)	(4)	(1)
Other comprehensive income (loss), net of tax	930	5,651	(847)	(2,274)
Comprehensive (loss) income	$ (4,291)	$ 1,397	$ 27,325	$ 722

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Royalty Revenue and Related Expenses

6 Months Ended

Aug. 30, 2013

Text Block [Abstract]

Royalty Revenue and Related Expenses

Note 6 – Royalty Revenue and Related Expenses

The Corporation has agreements for licensing the Care Bears and Strawberry Shortcake characters and other intellectual property. These license agreements provide for royalty revenue to the Corporation, which is recorded in “Other revenue” on the Consolidated Statement of Operations. These license agreements may include the receipt of upfront advances, which are recorded as deferred revenue and earned during the period of the agreement. Revenues and expenses associated with the servicing of these agreements, primarily relating to the licensing activities included in non-reportable segments, are summarized as follows:

	Three Months Ended				Six Months Ended
(In thousands)	August 30, 2013		August 24, 2012		August 30, 2013		August 24, 2012
Royalty revenue	$	6,412	$	7,133	$	12,918	$	10,862
Royalty expenses
Material, labor and other production costs	$	1,551	$	2,673	$	3,498	$	5,001
Selling, distribution and marketing expenses		1,936		2,723		3,184		3,379
Administrative and general expenses		441		441		901		863
	$	3,928	$	5,837	$	7,583	$	9,243

In addition to the expenses disclosed above, during the prior year first quarter, the Corporation incurred charges of $2.1 million associated with its licensing business. See Note 7 for further information.

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Consolidated Statement of Financial Position (Parenthetical) (USD $)	Aug. 30, 2013
Statement Of Financial Position [Abstract]
Common shares, par value	$ 0.01
Common shares, issued	100
Common shares, outstanding	100

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Deferred Costs - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	Aug. 30, 2013	Feb. 28, 2013	Aug. 24, 2012
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract]
Allowance for deferred costs related to supply agreements	$ 6.5	$ 7.9	$ 8.4

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Consolidated Statement of Operations (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Aug. 30, 2013	Aug. 24, 2012	Aug. 30, 2013	Aug. 24, 2012
Income Statement [Abstract]
Net sales	$ 413,667	$ 386,518	$ 904,212	$ 775,771
Other revenue	6,754	7,318	13,512	11,171
Total revenue	420,421	393,836	917,724	786,942
Material, labor and other production costs	176,674	176,732	380,511	340,596
Selling, distribution and marketing expenses	155,007	148,995	325,346	276,158
Administrative and general expenses	82,684	70,870	153,764	151,038
Other operating (income) expense - net	(961)	1,470	(4,279)	10,994
Operating income (loss)	7,017	(4,231)	62,382	8,156
Interest expense	5,433	4,434	9,745	8,810
Interest income	(73)	(94)	(193)	(232)
Other non-operating income - net	(4,025)	(2,500)	(5,398)	(4,771)
Income (loss) before income tax expense (benefit)	5,682	(6,071)	58,228	4,349
Income tax expense (benefit)	10,903	(1,817)	30,056	1,353
Net (loss) income	$ (5,221)	$ (4,254)	$ 28,172	$ 2,996

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Accumulated Other Comprehensive Loss - Changes in Accumulated Other Comprehensive Income (Loss) (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Aug. 30, 2013	Aug. 24, 2012	Aug. 30, 2013	Aug. 24, 2012
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance			$ (17,133)
Other comprehensive (loss) income before reclassifications			(1,510)
Amounts reclassified from accumulated other comprehensive income (loss)			663
Other comprehensive income (loss), net of tax	930	5,651	(847)	(2,274)
Ending Balance	(17,980)	(14,104)	(17,980)	(14,104)
Foreign Currency Translation Adjustments [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance			12,594
Other comprehensive (loss) income before reclassifications			(1,660)
Other comprehensive income (loss), net of tax			(1,660)
Ending Balance	10,934		10,934
Pensions and Other Postretirement Benefits [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance			(29,731)
Other comprehensive (loss) income before reclassifications			154
Amounts reclassified from accumulated other comprehensive income (loss)			663
Other comprehensive income (loss), net of tax			817
Ending Balance	(28,914)		(28,914)
Unrealized Investment Gain [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance			4
Other comprehensive (loss) income before reclassifications			(4)
Other comprehensive income (loss), net of tax			$ (4)

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Royalty Revenue and Related Expenses (Tables)

6 Months Ended

Aug. 30, 2013

Text Block [Abstract]

Revenues and Expenses Associated with Servicing of Agreements

Revenues and expenses associated with the servicing of these agreements, primarily relating to the licensing activities included in non-reportable segments, are summarized as follows:

	Three Months Ended				Six Months Ended
(In thousands)	August 30, 2013		August 24, 2012		August 30, 2013		August 24, 2012
Royalty revenue	$	6,412	$	7,133	$	12,918	$	10,862
Royalty expenses
Material, labor and other production costs	$	1,551	$	2,673	$	3,498	$	5,001
Selling, distribution and marketing expenses		1,936		2,723		3,184		3,379
Administrative and general expenses		441		441		901		863
	$	3,928	$	5,837	$	7,583	$	9,243

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Contingency

6 Months Ended

Aug. 30, 2013

Commitments And Contingencies Disclosure [Abstract]

Contingency

Note 15—Contingency

The Corporation is presently involved in various judicial, administrative, regulatory and arbitration proceedings concerning matters arising in the ordinary course of business, including but not limited to, employment, commercial disputes and other contractual matters, some of which are described below. These matters are inherently subject to many uncertainties regarding the possibility of a loss to the Corporation. These uncertainties will ultimately be resolved when one or more future events occur or fail to occur, confirming the incurrence of a liability or reduction of a liability. In accordance with ASC Topic 450, “Contingencies,” the Corporation accrues for these contingencies by a charge to income when it is both probable that one or more future events will occur confirming the fact of a loss and the amount of the loss can be reasonably estimated. Due to this uncertainty, the actual amount of any loss may ultimately prove to be larger or smaller than the amounts reflected in the Corporation’s Consolidated Financial Statements. Some of these proceedings are at preliminary stages and some of these cases seek an indeterminate amount of damages.

Baker/Collier Litigation

American Greetings Corporation is a defendant in two putative class action lawsuits involving corporate-owned life insurance policies (the “Insurance Policies”): one filed in the Northern District of Ohio on January 11, 2012 by Theresa Baker as the personal representative of the estate of Richard Charles Wolfe (the “Baker Litigation”); and the other filed in the Northern District of Oklahoma on October 1, 2010 by Keith Collier as the personal representative of the estate of Ruthie Collier (the “Collier Litigation”).

In the Baker Litigation, the plaintiff claims that American Greetings Corporation (1) misappropriated its employees’ names and identities to benefit itself; (2) breached its fiduciary duty by using its employees’ identities and personal information to benefit itself; (3) unjustly enriched itself through the receipt of corporate-owned life insurance policy benefits, interest and investment returns; and (4) improperly received insurance policy benefits for the insurable interest in Mr. Wolfe’s life. The plaintiff seeks damages in the amount of all pecuniary benefits associated with the subject Insurance Policies, including investment returns, interest and life insurance policy benefits that American Greetings Corporation received from the deaths of the former employees whose estates form the putative class.

In the Collier Litigation, the plaintiff claims that American Greetings Corporation did not have an insurable interest when it obtained the subject Insurance Policies and wrongfully received the benefits from those policies. The plaintiff seeks damages in the amount of policy benefits received by American Greetings Corporation from the subject Insurance Policies, as well as attorney’s fees, costs and interest. On April 2, 2012, the plaintiff filed its First Amended Complaint, adding misappropriation of employee information and breach of fiduciary duty claims as well as seeking punitive damages. On April 20, 2012, American Greetings Corporation moved to transfer the Collier Litigation to the Northern District of Ohio, where the Baker Litigation is pending. On July 6, 2012, the Court granted American Greetings Corporation’s Motion to Transfer and transferred the case to the Northern District of Ohio, where the Baker Litigation is pending.

On May 22, 2013, the Court preliminarily approved a full and final settlement of all the claims of the Wolfe and Collier estates, as well as the classes they seek to represent. As a result of the preliminary approval, the Court consolidated the two cases and certified a single class that consists of the heirs or estates of the estates and heirs of all former American Greetings Corporation employees (i) who are deceased; (ii) who were not officers or directors of American Greetings Corporation; (iii) who were insured under one of the following corporate-owned life insurance plans: Provident Life & Accident 61153, Provident Life & Accident 61159, Mutual Benefit Life Insurance Company 111, Connecticut General ENX219, and Hartford Life Insurance Company 361; and (iv) for whom American Greetings Corporation has received a death benefit on or before the date on which the Court enters the Order of Preliminary Approval. Required notices to potential class members and to state attorney generals as required under the Class Action Fairness Act of 2005 were mailed on May 30, 2013. On September 20, 2013, the Court entered a final order approving the settlement in the amount of $12.5 million. This amount was accrued prior to the first quarter of 2014. One half of the settlement amount was deposited by American Greetings Corporation into a settlement fund account on September 27, 2013, and the remaining half of the settlement amount will be deposited by American Greetings Corporation into the same settlement fund account on or before December 19, 2013. The settlement fund will be distributed in its entirety to those members of the class who present valid claims, their counsel, and a settlement administration vendor.

Carter/Wolfe/LMPERS Litigation

On September 26, 2012, we announced that our Board of Directors received a non-binding proposal from Zev Weiss, the Corporation’s Chief Executive Officer, and Jeffrey Weiss, the Corporation’s President and Chief Operating Officer, on behalf of themselves and certain other members of the Weiss family and related parties to acquire all of the outstanding Class A common shares and Class B common shares of the Corporation not currently owned by them (the “Going Private Proposal”). On September 27, 2012, Dolores Carter, a purported shareholder, filed a putative shareholder derivative and class action lawsuit (the “Carter Action”) in the Court of Common Pleas in Cuyahoga County, Ohio (the “Cuyahoga County Court”), against American Greetings Corporation and all of the members of the Board of Directors. The Carter Action alleges, among other things, that the directors of the Corporation breached their fiduciary duties owed to shareholders in evaluating and pursuing the proposal. The Carter Action further alleges claims for aiding and abetting breaches of fiduciary duty. Among other things, the Carter Action seeks declaratory relief. Subsequently, six more lawsuits were filed in the Cuyahoga County Court purporting to advance substantially similar claims on behalf of American Greetings Corporation against the members of the Board of Directors and, in certain cases, additional direct claims against American Greetings Corporation. One lawsuit was voluntarily dismissed. The other lawsuits, which remain pending, were consolidated by Judge Richard J. McMonagle on December 6, 2012 (amended order dated December 18, 2012) as In re American Greetings Corp. Shareholder Litigation, Lead Case No. CV 12 792421 (the “State Court Action”). Lead plaintiffs and lead plaintiffs’ counsel also were appointed.

On April 30, 2013, lead plaintiffs’ counsel filed a Consolidated Class Action Complaint. The Consolidated Complaint brings a single class claim against the members of the Corporation’s Board of Directors for alleged breaches of fiduciary duty and aiding and abetting. The plaintiffs allege that the preliminary proxy statement on Schedule 14A filed with the Securities and Exchange Commission (“SEC”) on April 17, 2013 omits information necessary to permit the Corporation’s shareholders to determine if the Merger is in their best interest, that the controlling shareholders have abused their control of the Corporation, that the special committee appointed to oversee the transaction is not independent, and that the other members of the Board of Directors are also not independent. On June 13, 2013, defendants filed motions to dismiss the Consolidated Class Action Complaint based on plaintiffs’ failure to properly plead their claims as derivative actions, to exercise their statutory appraisal rights as the sole remedy for dissatisfaction with the proposed share price, and to overcome the business judgment rule with respect to their breach of fiduciary duty claims. The motions remain pending.

On July 16, 2013, the parties entered into a Memorandum of Understanding (“MOU”) agreeing in principle to settle the State Court Action on behalf of themselves and the putative settlement class, which includes all persons who owned any interest in the common stock of American Greetings Corporation (either of record or beneficially) at any time between and including September 26, 2012 and the effective date of the Merger. A Stipulation of Settlement subsequently was filed with the Cuyahoga County Court on August 8, 2013, and the Cuyahoga County Court preliminarily approved the settlement on August 15, 2013 (amended order dated September 4, 2013). The settlement provides for dismissal with prejudice of the State Court Action and a release of claims against defendants and released parties. As consideration to class members, the Corporation agreed to and did disclose additional information via a Form 8-K relating to the Merger, which was filed with the SEC on July 18, 2013. In addition, defendants acknowledge that the State Court Action contributed to the Weiss family shareholders’ decision to increase the Merger consideration from $18.20 per share to $19.00 per share. The settlement also contemplates the payment of attorneys’ fees and reimbursement of expenses to class counsel, which the Corporation expects will be fully paid by the Corporation’s insurer.

The settlement is conditioned upon, among other things, final certification of the settlement class and final approval of the proposed settlement by the Cuyahoga County Court. The Cuyahoga County Court has scheduled a hearing concerning, among other things, whether the settlement should be approved as fair, reasonable, adequate, and in the best interest of the settlement class for October 24, 2013. There can be no assurance that the Cuyahoga County Court will approve the settlement. If the settlement conditions are not met, the proposed settlement would become void.

On November 6, 2012, R. David Wolfe, a purported shareholder, filed a putative class action (the “Wolfe Action”) in the United States District Court for the Northern District of Ohio (the “Federal Court”) against certain members of the Weiss Family and the Irving I. Stone Oversight Trust, the Irving Stone Limited Liability Company, the Irving I. Stone Support Foundation, and the Irving I. Stone Foundation (“Stone Entities”) alleging breach of fiduciary duties in proposing and pursuing the proposal, as well as against American Greetings, seeking, among other things, declaratory relief. Shortly thereafter, on November 9, 2012, the Louisiana Municipal Police Employees’ Retirement System also filed a purported class action in the Federal Court (the “LMPERS Action”) asserting substantially similar claims against the same defendants and seeking substantially similar relief.

On November 30, 2012, plaintiffs in the Wolfe and LMPERS Actions filed motions (1) to consolidate the Wolfe and LMPERS Actions, (2) for appointment as co-lead plaintiffs, (3) for appointment of co-lead counsel, and, in the Wolfe Action only, (4) for partial summary judgment. On December 14, 2012, the Corporation filed its oppositions to the motions (a) to consolidate the Wolfe and LMPERS Actions, (b) for appointment as co-lead plaintiffs, and (c) for appointment of co-lead counsel. On the same day, the Corporation also moved to dismiss both the Wolfe and LMPERS Actions. The Corporation answered both complaints on January 8, 2013, and on January 11, 2013, it filed its opposition to the motion for partial summary judgment. On February 14, 2013, the Federal Court dismissed both the Wolfe and LMPERS Actions for lack of subject matter jurisdiction. On March 15, 2013, plaintiffs in both the Wolfe and LMPERS Actions filed notices of appeal with the Sixth Circuit Court of Appeals. On April 18, 2013, plaintiff Wolfe moved to dismiss his appeal, which motion was granted on April 19, 2013. On May 8, 2013, plaintiff LMPERS’s moved to dismiss its appeal as well, which motion was granted.

Plaintiffs in the Wolfe and LMPERS Actions alleged, in part, that Article Seventh of the Corporation’s articles of incorporation prohibited the special committee from, among other things, evaluating the Merger. The Corporation considered these allegations and concluded that the Article is co-extensive with Ohio law and thus allows the Corporation to engage in any activity authorized by Ohio law. The Corporation also has consistently construed Article Seventh as permitting directors to approve a transaction so long as they are both disinterested and independent.

On April 17, 2013, R. David Wolfe filed a new derivative and putative class action (“Wolfe Action II”) in the Federal Court against the Corporation’s directors, certain members of the Weiss Family, and the Stone Entities, as well as the Corporation as a nominal defendant, challenging the Merger as financially and procedurally unfair to the Corporation and its minority shareholders. Mr. Wolfe subsequently filed an Amended Complaint on April 29, 2013. The Wolfe Action II seeks a declaratory judgment that Article Seventh precludes the Board of Directors and special committee from approving the Merger. In addition, the Wolfe Action II includes a derivative claim for breach of fiduciary duty against the Corporation’s directors for allegedly violating Article Seventh. Finally, the Wolfe Action II includes both a derivative and class action claim for breach of fiduciary duty against the Weiss Family defendants and the Stone Entities for allegedly seeking to acquire the minority shareholders’ interests at an unfair price. Defendants filed their Motions to Dismiss the Wolfe Action II amended Complaint on July 8, 2013. On August 1, 2013, the Federal Court granted the parties’ joint motion to defer briefings on defendants’ motions to dismiss and to stay the action pending resolution of the settlement of the State Court Action.

Management is unable to estimate a range of reasonably possible losses for these cases in which the damages have not been specified and (i) the proceedings are in the early stages, (ii) there is uncertainty as to the outcome of the pending appeals or motions, and/or (iii) there are significant factual issues to be resolved. However, for these cases, management does not believe, based on currently available information, that the outcomes of these proceedings will have a material adverse effect on the Corporation’s financial condition, though the outcomes could be material to the Corporation’s operating results for any particular period, depending, in part, upon the operating results for such period.

In addition to the foregoing, we are involved in various judicial, administrative, regulatory and arbitration proceedings concerning matters arising in the ordinary course of business operations, including, but not limited to, employment, commercial disputes and other contractual matters. We, however, do not believe that any of the other litigation in which we are currently engaged, either individually or in the aggregate, will have a material adverse effect on our business, consolidated financial position or results of operations.

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Acquisition - Charges Reflected in Reportable Segments (Detail) (USD $)	3 Months Ended			6 Months Ended		12 Months Ended
	Aug. 30, 2013	May 31, 2013	Aug. 24, 2012	Aug. 30, 2013	Aug. 24, 2012	Feb. 28, 2013
Operating Statistics [Line Items ]
Bad debt expense				$ 176,000	$ 17,567,000
Impairment of debt purchased	(428,000)		2,249,000	(2,428,000)	10,043,000
Clinton Cards [Member]
Operating Statistics [Line Items ]
Contract asset impairment					4,000,000
Bad debt expense					17,200,000
Legal and advisory fees					6,000,000
Impairment of debt purchased	400,000	2,000,000	2,200,000	2,400,000	10,000,000	8,100,000
Total					37,200,000
Clinton Cards [Member] | International Social Expression Products [Member]
Operating Statistics [Line Items ]
Contract asset impairment					4,000,000
Bad debt expense					17,200,000
Total					21,200,000
Clinton Cards [Member] | Unallocated [Member]
Operating Statistics [Line Items ]
Legal and advisory fees					6,000,000
Impairment of debt purchased					10,000,000
Total					$ 16,000,000

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Customer Allowances and Discounts - Additional Information (Detail) (Allowance for Doubtful Accounts [Member], USD $) In Millions, unless otherwise specified	Aug. 30, 2013	Feb. 28, 2013	Aug. 24, 2012
Allowance for Doubtful Accounts [Member]
Valuation and Qualifying Accounts Disclosure [Line Items]
Trade allowances and discounts settled in cash	$ 13.2	$ 13.5	$ 11.4

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Contingency - Additional Information (Detail) (USD $) In Millions, except Per Share data, unless otherwise specified	6 Months Ended		1 Months Ended
	Aug. 30, 2013	Aug. 30, 2013 Baker and Collier Litigation [Member] Cases	Sep. 20, 2013 Baker and Collier Litigation [Member] Scenario, Forecast [Member]	Sep. 27, 2013 Baker and Collier Litigation [Member] Scenario, Forecast [Member]	Sep. 27, 2013 Baker and Collier Litigation [Member] Scenario, Forecast [Member] Future Settlement Payment [Member]
Litigation And Other Contingencies [Line Items]
Number of cases consolidated by court		2
Deposit into settlement fund to be distributed to members of class on Insurance Policies lawsuits			$ 12.5
Percentage of first settlement amount deposited into settlement fund				50.00%
Percentage of remaining settlement amount deposited into settlement fund					50.00%
Settlement date		September 20, 2013
Merger consideration before litigation settlement	$ 18.20
Merger consideration after litigation settlement	$ 19.00

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Basis of Presentation - Additional Information (Detail) (USD $)	6 Months Ended	1 Months Ended		6 Months Ended		6 Months Ended
	Aug. 30, 2013	Aug. 30, 2013 Party City Holdings [Member]	May 31, 2013 Party City Holdings [Member]	Aug. 30, 2013 Schurman [Member]	Aug. 30, 2013 Schurman [Member] Collectability Of Receivables [Member]	Aug. 30, 2013 Schurman [Member] Liquidity Guaranty [Member]	Aug. 30, 2013 Schurman [Member] Cost Method Investments [Member]	Aug. 30, 2013 Schurman [Member] Operating Leases Subleased to Schurman [Member]	Feb. 28, 2013 Schurman [Member] Operating Leases Subleased to Schurman [Member]	Aug. 24, 2012 Schurman [Member] Operating Leases Subleased to Schurman [Member]
Significant Accounting Policies [Line Items]
Equity interest holdings in Schurman Fine Papers				15.00%
Maximum exposure to loss, amount					$ 25,700,000	$ 10,000,000	$ 1,900,000	$ 9,400,000	$ 11,800,000	$ 17,700,000
Number of days after Schurman's lenders commence liquidation of collateral under Senior Credit Facility						91 days
End period of liquidity guaranty						2016-07
Investment in common stock		0	8,800,000
Cash distribution received	$ 12,105,000	$ 12,100,000

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Debt (Tables)

6 Months Ended

Aug. 30, 2013

Debt Disclosure [Abstract]

Long-Term Debt

Long-term debt and their related calendar year due dates as of August 30, 2013, February 28, 2013 and August 24, 2012, respectively, were as follows:

(In thousands)	August 30, 2013			February 28, 2013		August 24, 2012
Term loan, due 2019	$	350,000		$	—	$	—
7.375% senior notes, due 2021		225,000			225,000		225,000
Revolving credit facility, due 2017		—			61,200		55,000
Revolving credit facility, due 2018		13,900			—		—
6.10% senior notes, due 2028		181			181		181
		589,081			286,381		280,181
Current maturity of term loan		(15,000	)		—		—
Unamortized original issue discount		(10,601	)		—		—
	$	563,480		$	286,381	$	280,181

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Retirement Benefits (Tables)

6 Months Ended

Aug. 30, 2013

Compensation And Retirement Disclosure [Abstract]

Components of Periodic Benefit Cost for Corporation's Defined Benefit Pension and Postretirement Benefit Plans

The components of periodic benefit cost for the Corporation’s defined benefit pension and postretirement benefit plans are as follows: 

	Defined Benefit Pension
	Three Months Ended						Six months Ended
	August 30,			August 24,			August 30,			August 24,
(In thousands)	2013			2012			2013			2012
Service cost	$	320		$	333		$	640		$	667
Interest cost		1,736			1,839			3,478			3,683
Expected return on plan assets		(1,567	)		(1,609	)		(3,141	)		(3,222	)
Amortization of prior service cost		51			62			102			123
Amortization of actuarial loss		913			815			1,830			1,631
	$	1,453		$	1,440		$	2,909		$	2,882

	Postretirement Benefits
	Three Months Ended						Six months Ended
	August 30,			August 24,			August 30,			August 24,
(In thousands)	2013			2012			2013			2012
Service cost	$	137		$	212		$	275		$	425
Interest cost		612			800			1,225			1,600
Expected return on plan assets		(762	)		(840	)		(1,525	)		(1,680	)
Amortization of prior service credit		(325	)		(519	)		(650	)		(1,038	)
Amortization of actuarial gain		(212	)		—			(425	)		—
	$	(550	)	$	(347	)	$	(1,100	)	$	(693	)

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Recent Accounting Pronouncements

6 Months Ended

Aug. 30, 2013

Accounting Changes And Error Corrections [Abstract]

Recent Accounting Pronouncements

Note 5 – Recent Accounting Pronouncements

In July 2013, the FASB issued Accounting Standards Update (“ASU”) No. 2013-11 (“ASU 2013-11”), “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.” ASU 2013-11 requires an unrecognized tax benefit, or a portion of an unrecognized tax benefit, to be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except as follows. To the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date, the unrecognized tax benefit should be presented in the financial statements as a liability and not combined with deferred tax assets. ASU 2013-11 is effective for annual and interim periods beginning after December 15, 2014, with early adoption permitted. The Corporation does not expect that the adoption of this standard will have a material effect on its financial statements.

In February 2013, the FASB issued ASU No. 2013-02 (“ASU 2013-02”), “Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income.” ASU 2013-02 requires entities to disclose additional information about changes in other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income and the income statement line items affected. The provisions of this guidance are effective prospectively for annual and interim periods beginning after December 15, 2012. The Corporation adopted this standard on March 1, 2013. See Note 8 for further information.

In July 2012, the FASB issued ASU No. 2012-02 (“ASU 2012-02”), “Testing Indefinite-Lived Intangible Assets for Impairment.” ASU 2012-02 gives entities an option to first assess qualitative factors to determine whether the existence of events and circumstances indicate that it is more likely than not that an indefinite-lived intangible asset is impaired. If based on its qualitative assessment an entity concludes that it is more likely than not that the fair value of an indefinite-lived intangible asset is less than its carrying amount, quantitative impairment testing is required. However, if an entity concludes otherwise, quantitative impairment testing is not required. ASU 2012-02 is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. The Corporation adopted this standard on March 1, 2013. The adoption of this standard did not have a material effect on the Corporation’s financial statements.

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Retirement Benefits - Components of Periodic Benefit Cost for Corporation's Defined Benefit Pension and Postretirement Benefit Plans (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Aug. 30, 2013	Aug. 24, 2012	Aug. 30, 2013	Aug. 24, 2012
Defined Benefit Pension Plans [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 320	$ 333	$ 640	$ 667
Interest cost	1,736	1,839	3,478	3,683
Expected return on plan assets	(1,567)	(1,609)	(3,141)	(3,222)
Amortization of prior service cost (credit)	51	62	102	123
Amortization of actuarial loss (gain)	913	815	1,830	1,631
Defined benefit plan, net periodic benefit cost, total	1,453	1,440	2,909	2,882
Postretirement Benefits Plans [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	137	212	275	425
Interest cost	612	800	1,225	1,600
Expected return on plan assets	(762)	(840)	(1,525)	(1,680)
Amortization of prior service cost (credit)	(325)	(519)	(650)	(1,038)
Amortization of actuarial loss (gain)	(212)		(425)
Defined benefit plan, net periodic benefit cost, total	$ (550)	$ (347)	$ (1,100)	$ (693)

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Other Income and Expense (Tables)

6 Months Ended

Aug. 30, 2013

Other Income And Expenses [Abstract]

Other Operating (Income) Expense - Net

Other Operating (Income) Expense – Net

	Three Months Ended						Six Months Ended
(In thousands)	August 30, 2013			August 24, 2012			August 30, 2013			August 24, 2012
Clinton Cards secured debt (recovery) impairment	$	(428	)	$	2,249		$	(2,428	)	$	10,043
Termination of certain agency agreements		—			—			—			2,125
Loss (gain) on asset disposal		122			(2	)		(113	)		154
Miscellaneous		(655	)		(777	)		(1,738	)		(1,328	)
Other operating (income) expense – net	$	(961	)	$	1,470		$	(4,279	)	$	10,994

Other Non-Operating Income - Net

Other Non-Operating Income – Net

	Three Months Ended						Six Months Ended
(In thousands)	August 30, 2013			August 24, 2012			August 30, 2013			August 24, 2012
Gain related to Party City investment	$	(3,262	)	$	(3,152	)	$	(3,262	)	$	(3,152	)
Foreign exchange (gain) loss		(360	)		1,060			(1,275	)		(396	)
Rental income		(402	)		(410	)		(886	)		(1,046	)
Miscellaneous		(1	)		2			25			(177	)
Other non-operating income – net	$	(4,025	)	$	(2,500	)	$	(5,398	)	$	(4,771	)

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Acquisition - Additional Information (Detail)	3 Months Ended		6 Months Ended		3 Months Ended					6 Months Ended			12 Months Ended		6 Months Ended
	Aug. 30, 2013 USD ($)	Aug. 24, 2012 USD ($)	Aug. 30, 2013 USD ($)	Aug. 24, 2012 USD ($)	Aug. 30, 2013 Clinton Cards [Member] USD ($)	May 31, 2013 Clinton Cards [Member] USD ($)	Aug. 24, 2012 Clinton Cards [Member] USD ($)	May 25, 2012 Clinton Cards [Member] USD ($) Brand Store	May 25, 2012 Clinton Cards [Member] GBP (£) Store	Aug. 30, 2013 Clinton Cards [Member] USD ($)	Aug. 24, 2012 Clinton Cards [Member] USD ($) Store	Aug. 24, 2012 Clinton Cards [Member] GBP (£)	Feb. 28, 2013 Clinton Cards [Member] USD ($)	Aug. 30, 2013 Clinton Cards [Member] GBP (£)	Aug. 30, 2013 Clinton Cards [Member] Lease Agreements [Member] USD ($) Lease Store
Business Acquisition [Line Items]
Purchase of outstanding senior secured debt				$ (56,560,000)				$ 56,600,000	£ 35,000,000
Number of stores owned Clinton								750	750
Annual revenues Clinton								600,000,000
Liquidation process and negotiations period with landlords for stores to be acquired								2	2
Purchase of debt Clinton cards bid for assets											37,200,000	23,000,000
Number of stores purchased by Lakeshore from Clinton											400	400
Completed lease assignments															388
Number of stores including lease assignment and new stores															401
Additional future minimum lease payments if remaining store leases are successfully assigned															390,000,000
Clinton Cards secured debt recovery	(428,000)	2,249,000	(2,428,000)	10,043,000	400,000	2,000,000	2,200,000			2,400,000	10,000,000		8,100,000
Senior secured notes					8,200,000					8,200,000				5,300,000
Cash distribution from the administrators	$ 5,000,000		$ 4,982,000
Liquidation process and negotiations period with landlords for stores to be acquired										12 months

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Accumulated Other Comprehensive Loss

6 Months Ended

Aug. 30, 2013

Text Block [Abstract]

Accumulated Other Comprehensive Loss

Note 8 – Accumulated Other Comprehensive Loss

The changes in accumulated other comprehensive income (loss) for the six months ended August 30, 2013 are as follows.

(In thousands)	Foreign Currency Translation Adjustments			Pensions and Other Postretirement Benefits			Unrealized Investment Gain			Total
Balance at February 28, 2013	$	12,594		$	(29,731	)	$	4		$	(17,133	)
Other comprehensive (loss) income before reclassifications		(1,660	)		154			(4	)		(1,510	)
Amounts reclassified from accumulated other comprehensive income (loss)		—			663			—			663
Net current period other comprehensive (loss) income		(1,660	)		817			(4	)		(847	)
Balance at August 30, 2013	$	10,934		$	(28,914	)	$	—		$	(17,980	)

The reclassifications out of accumulated other comprehensive income (loss) are as follows.

(In thousands)	Six Months Ended August 30, 2013			Classification on Consolidated Statement of Operations
Amortization of pension and other postretirement benefits items
Actuarial losses, net	$	(1,405	)	Administrative and general expenses
Prior service cost		548		Administrative and general expenses
		(857	)
Tax benefit		194		Income tax expense
Total, net of tax		(663	)
Total reclassifications	$	(663	)

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Acquisition

6 Months Ended

Aug. 30, 2013

Business Combinations [Abstract]

Acquisition

Note 4 – Acquisition

During the first quarter of 2013, the Corporation acquired all of the outstanding senior secured debt of Clinton Cards for $56.6 million (£35 million) through Lakeshore Lending Limited (“Lakeshore”), a wholly-owned subsidiary of the Corporation organized under the laws of the UK. Subsequently, on May 9, 2012, Clinton Cards was placed into administration, a procedure similar to Chapter 11 bankruptcy in the United States. Prior to entering into administration, Clinton Cards had approximately 750 stores and annual revenues of approximately $600 million across its two primary retail brands, Clinton Cards and Birthdays. The legacy Clinton Cards business had been an important customer to the Corporation’s international business for approximately forty years and was one of the Corporation’s largest customers.

As part of the administration process, the administrators (“Administrators”) of Clinton Cards and certain of its subsidiaries (the “Sellers”) conducted an auction of certain assets of the business of the Sellers that they believed constituted a viable ongoing business. Lakeshore bid $37.2 million (£23 million) for certain of these remaining assets. The bid took the form of a “credit bid,” where the Corporation used a portion of the outstanding senior secured debt owed to Lakeshore by Clinton Cards to pay the purchase price for the assets. The bid was accepted by the Administrators and on June 6, 2012 the Corporation entered into an agreement with the Sellers and the Administrators for the purchase of certain assets and the related business of the Sellers.

Under the terms of the agreement, the Corporation originally expected to acquire approximately 400 stores from the Sellers, together with related inventory and overhead, as well as the Clinton Cards and related brands. As of August 30, 2013, the Corporation had completed 388 lease assignments. The number of stores that the Corporation is operating, including both lease assignments and new stores, is 401. The estimated future minimum rental payments for noncancelable operating leases related to the 401 acquired stores is approximately $390 million.

The stores and assets not acquired by the Corporation remain part of the administration process. It is anticipated that these remaining assets not purchased by the Corporation will be liquidated and the proceeds will be used to repay the creditors of the Sellers, including the Corporation. The Corporation will seek to recover the remaining senior secured debt claim held by it through the liquidation process. However, based on the estimated recovery information provided by the Administrators, the Corporation recorded an aggregate charge of $8.1 million in 2013 relating to the senior secured debt it acquired in the first quarter of the prior year. In the first half of 2014, based on updated estimated recovery information provided by the Administrators, the Corporation recorded adjustments to the charge resulting in first and second quarter gains of $2.0 million and $0.4 million, respectively. In the second quarter of 2014 the Corporation received a cash distribution from the Administrators of $5.0 million. The remaining balance of the senior secured debt is $8.2 million (£5.3 million) as of August 30, 2013 and is included in “Prepaid expenses and other” on the Consolidated Statement of Financial Position. The liquidation process was originally expected to take approximately twelve months from the closing of the transaction on June 6, 2012. The process is currently expected to be completed by December 31, 2013.

The prior year six-month period included charges of $37.2 million associated with the aforementioned acquisition and are reflected on the Consolidated Statement of Operations as follows:

(In millions)	Contract asset impairment		Bad debt expense		Legal and advisory fees		Impairment of debt purchased		Total
Net sales	$	4.0	$	—	$	—	$	—	$	4.0
Administrative and general expenses		—		17.2		6.0		—		23.2
Other operating (income) expense—net		—		—		—		10.0		10.0
	$	4.0	$	17.2	$	6.0	$	10.0	$	37.2

These charges are reflected in the Corporation’s reportable segments as follows:

(In millions)	Contract asset impairment		Bad debt expense		Legal and advisory fees		Impairment of debt purchased		Total
International Social Expression Products	$	4.0	$	17.2	$	—	$	—	$	21.2
Unallocated		—		—		6.0		10.0		16.0
	$	4.0	$	17.2	$	6.0	$	10.0	$	37.2

The fair value of the consideration given has been allocated to the assets acquired and the liabilities assumed based upon their fair values at the date of acquisition. The following represents the final purchase price allocation:

Purchase price (in millions):
Credit bid	$	37.2
Effective settlement of pre-existing relationships with the legacy Clinton Cards business		6.4
Cash acquired		(0.6	)
	$	43.0
Allocation (in millions):
Inventory	$	5.5
Property, plant and equipment		18.4
Intangible assets		22.5
Current liabilities assumed		(3.4	)
	$	43.0

The financial results of this acquisition are included in the Corporation’s consolidated results from the date of acquisition. Pro forma results of operations have not been presented because the effect of this acquisition was not deemed material at the date of acquisition. The acquired business is included in the Corporation’s Retail Operations segment.

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Consolidated Statement of Shareholder's Equity (USD $) In Thousands	Total	Common Shares [Member]	Common Shares - Class A [Member]	Common Shares - Class B [Member]	Capital in Excess of Par Value [Member]	Treasury Stock [Member]	Accumulated Other Comprehensive Loss [Member]	Retained Earnings [Member]
Beginning Balance at Feb. 28, 2013	$ 681,877		$ 29,088	$ 2,883	$ 522,425	$ (1,093,782)	$ (17,133)	$ 1,238,396
Net income	28,172							28,172
Other comprehensive loss	(847)						(847)
Cash dividends - $0.30 per share	(9,614)							(9,614)
Sale of shares under benefit plans, including tax benefits	73		223	28	560	342		(1,080)
Contribution from parent	240,000				240,000
Payments to shareholders to effect merger	(568,303)		(29,305)	(606)		(538,392)
Cancellation of Family Shareholders shares			(5)	(2,307)				2,312
Stock compensation expense	4,125				4,125
Stock grants and other	23		(1)	2	2	25		(5)
Conversion of restricted stock and performance share programs to cash-settled/liability-based	(5,242)				(5,242)
Settlement of stock options	(3,933)				(3,933)
Settlement of non-executive director awards	(371)				(371)
Cancellation of Family Shareholders restricted stock and performance shares	3,966				3,966
Cancellation of treasury shares					(521,532)	1,631,807		(1,110,275)
Ending Balance at Aug. 30, 2013	$ 369,926				$ 240,000		$ (17,980)	$ 147,906

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Accumulated Other Comprehensive Loss - Reclassifications Out of Accumulated Other Comprehensive Income (Loss) (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Aug. 30, 2013	Aug. 24, 2012	Aug. 30, 2013	Aug. 24, 2012
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Income (loss) before income tax expense (benefit)	$ 5,682	$ (6,071)	$ 58,228	$ 4,349
Tax benefit	(10,903)	1,817	(30,056)	(1,353)
Total reclassifications	(5,221)	(4,254)	28,172	2,996
Reclassification out of Accumulated Other Comprehensive Income (Loss) [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Total reclassifications			(663)
Reclassification out of Accumulated Other Comprehensive Income (Loss) [Member] | Pensions and Other Postretirement Benefits [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Actuarial losses, net			(1,405)
Prior service cost			548
Income (loss) before income tax expense (benefit)			(857)
Tax benefit			194
Total reclassifications			$ (663)

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Royalty Revenue and Related Expenses - Additional Information (Detail) (AG Intellectual Properties [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended
	May 25, 2012
AG Intellectual Properties [Member]
Segment Reporting Information [Line Items]
License charges	$ 2,100

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Inventories (Tables)

6 Months Ended

Aug. 30, 2013

Inventory Disclosure [Abstract]

Schedule of Inventories

(In thousands)	August 30, 2013		February 28, 2013		August 24, 2012
Raw materials	$	28,080	$	21,303	$	23,256
Work in process		12,021		6,683		13,116
Finished products		317,762		278,573		301,634
		357,863		306,559		338,006
Less LIFO reserve		84,639		84,166		82,939
		273,224		222,393		255,067
Display materials and factory supplies		18,934		20,054		20,911
	$	292,158	$	242,447	$	275,978

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Income Taxes - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Aug. 30, 2013	Aug. 24, 2012	Aug. 30, 2013	Aug. 24, 2012	Feb. 28, 2013
Income Tax Disclosure [Abstract]
Effective tax rate	191.90%	29.90%	51.60%	31.10%
Operating loss carryforwards, valuation allowance	$ 8.0		$ 8.0
Unrecognized tax benefits					21.7
Income tax expenses affected by unrecognized tax benefits if recognized					18.5
Decreased unrecognized tax benefit					3.1
Interest and penalties on unrecognized tax benefits and refundable income taxes			0.1
Accrued Interest and penalties on unrecognized tax benefit	$ 4.6		$ 4.6
Open tax years by major tax jurisdiction			The Corporation is subject to examination by the Internal Revenue Service for tax years 2010 to the present and various U.S. state and local jurisdictions for tax years 1996 to the present. The Corporation is also subject to tax examination in various international tax jurisdictions including Australia, Canada, New Zealand and the United Kingdom for tax years 2006 to the present.

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Debt - Additional Information (Detail) (USD $)	6 Months Ended					1 Months Ended	6 Months Ended		12 Months Ended				6 Months Ended		6 Months Ended
	Aug. 30, 2013	Aug. 09, 2013	Feb. 28, 2013	Aug. 24, 2012	Aug. 09, 2013 Credit Agreement [Member]	Aug. 09, 2013 Accounts Receivable Facility [Member]	Aug. 30, 2013 Accounts Receivable Facility [Member]	Aug. 24, 2012 Accounts Receivable Facility [Member]	Feb. 28, 2013 Accounts Receivable Facility [Member]	Aug. 30, 2013 Letters of Credit [Member]	Aug. 30, 2013 7.375% Senior Notes, Due 2021 [Member]	Nov. 30, 2011 7.375% Senior Notes, Due 2021 [Member]	Aug. 30, 2013 Revolving Credit Facility [Member]	Aug. 09, 2013 Revolving Credit Facility [Member]	Aug. 30, 2013 Term Loan Facility [Member]	Aug. 09, 2013 Term Loan Facility [Member]	Aug. 30, 2013 Publicly Traded [Member]	Feb. 28, 2013 Publicly Traded [Member]	Aug. 24, 2012 Publicly Traded [Member]	Aug. 30, 2013 Non Publicly Traded [Member]	Feb. 28, 2013 Non Publicly Traded [Member]	Aug. 24, 2012 Non Publicly Traded [Member]
Debt Disclosure [Line Items]
Debt due within one year	$ 15,000,000		$ 0	$ 0
Interest on line of credit facility borrowings													3.20%		4.00%
Current borrowing capacity					600,000,000					129,100,000				250,000,000		350,000,000
Balances outstanding under the revolving credit facility										27,300,000
Aggregate principal amount of senior notes												225,000,000
Interest rate of debt											7.375%	7.375%
Fair value of Corporations publicly and non-publicly traded debt																	222,900,000	233,600,000	247,100,000	363,900,000	61,200,000	55,000,000
Carrying value of Corporations traded debt	563,480,000		286,381,000	280,181,000													225,200,000	225,200,000	225,200,000	363,900,000	61,200,000	55,000,000
Installment payment	10,000,000
Scheduled payments	5,000,000
Loan Facility and the Revolving Credit Facility	150,000,000
Discount amount on term loan facility		10,800,000
Available financing of receivables purchase agreement							50,000,000
Balances outstanding under the amended and restated receivables purchase agreement							$ 0	$ 0	$ 0
Federal fund rate						0.50%
Annual facility fee						80.00%

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Deferred Costs

6 Months Ended

Aug. 30, 2013

Text Block [Abstract]

Deferred Costs

Note 11 – Deferred Costs

Deferred costs and future payment commitments for retail supply agreements are included in the following financial statement captions:

(In thousands)	August 30, 2013			February 28, 2013			August 24, 2012
Prepaid expenses and other	$	84,368		$	93,873		$	79,145
Other assets		314,136			332,159			358,337
Deferred cost assets		398,504			426,032			437,482
Other current liabilities		(63,881	)		(61,282	)		(44,126	)
Other liabilities		(86,777	)		(92,153	)		(127,857	)
Deferred cost liabilities		(150,658	)		(153,435	)		(171,983	)
Net deferred costs	$	247,846		$	272,597		$	265,499

The Corporation maintains an allowance for deferred costs related to supply agreements of $6.5 million, $7.9 million and $8.4 million at August 30, 2013, February 28, 2013 and August 24, 2012, respectively. This allowance is included in “Other assets” in the Consolidated Statement of Financial Position.

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Other Income and Expense

6 Months Ended

Aug. 30, 2013

Other Income And Expenses [Abstract]

Other Income and Expense

Note 7 – Other Income and Expense

Other Operating (Income) Expense – Net

	Three Months Ended						Six Months Ended
(In thousands)	August 30, 2013			August 24, 2012			August 30, 2013			August 24, 2012
Clinton Cards secured debt (recovery) impairment	$	(428	)	$	2,249		$	(2,428	)	$	10,043
Termination of certain agency agreements		—			—			—			2,125
Loss (gain) on asset disposal		122			(2	)		(113	)		154
Miscellaneous		(655	)		(777	)		(1,738	)		(1,328	)
Other operating (income) expense – net	$	(961	)	$	1,470		$	(4,279	)	$	10,994

The Corporation recorded a loss of $2.2 million and $10.0 million in the three and six-month periods ended August 24, 2012, respectively, related to the senior secured debt of Clinton Cards. During the three and six-month periods ended August 30, 2013 the impairment of the secured debt of Clinton Cards was adjusted based on current estimated recovery information provided by the Administrators, resulting in a gain of $0.4 million and $2.4 million, respectively. See Note 4 for further information.

In May 2012, the Corporation recorded expenses totaling $2.1 million related to the termination of certain agency agreements associated with its licensing business.

Other Non-Operating Income – Net

	Three Months Ended						Six Months Ended
(In thousands)	August 30, 2013			August 24, 2012			August 30, 2013			August 24, 2012
Gain related to Party City investment	$	(3,262	)	$	(3,152	)	$	(3,262	)	$	(3,152	)
Foreign exchange (gain) loss		(360	)		1,060			(1,275	)		(396	)
Rental income		(402	)		(410	)		(886	)		(1,046	)
Miscellaneous		(1	)		2			25			(177	)
Other non-operating income – net	$	(4,025	)	$	(2,500	)	$	(5,398	)	$	(4,771	)

During the three months ended August 30, 2013, the Corporation recognized a gain totaling $3.3 million related to a cash distribution from Party City. See Note 1 for further information. In August 2012, the Corporation recorded a gain totaling $3.2 million associated with the sale of a portion of its investment in Party City.

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Business Segment Information - Schedule of Segment Reporting Information by Segment (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Aug. 30, 2013	Aug. 24, 2012	Aug. 30, 2013	Aug. 24, 2012
Segment Reporting Information [Line Items]
Total Revenue	$ 420,421	$ 393,836	$ 917,724	$ 786,942
Segment Earnings (Loss) before Tax	5,682	(6,071)	58,228	4,349
Interest expense	(5,433)	(4,434)	(9,745)	(8,810)
Stock-based compensation expense			(8,090)	(4,841)
Operating Segments [Member] | North American Social Expression Products [Member]
Segment Reporting Information [Line Items]
Total Revenue	261,694	265,856	589,981	574,415
Segment Earnings (Loss) before Tax	35,045	20,440	101,392	76,658
Operating Segments [Member] | International Social Expression Products [Member]
Segment Reporting Information [Line Items]
Total Revenue	63,372	74,834	134,173	137,514
Segment Earnings (Loss) before Tax	2,195	289	4,739	(22,268)
Operating Segments [Member] | International Social Expression Products and Intersegment Items, Net [Member]
Segment Reporting Information [Line Items]
Total Revenue	54,635	61,292	114,344	123,972
Segment Earnings (Loss) before Tax	684	(7,113)	1,014	(29,670)
Operating Segments [Member] | Retail Operations [Member]
Segment Reporting Information [Line Items]
Total Revenue	62,732	39,884	137,450	39,884
Segment Earnings (Loss) before Tax	(8,984)	(5,106)	(12,436)	(5,106)
Operating Segments [Member] | AG Interactive [Member]
Segment Reporting Information [Line Items]
Total Revenue	14,504	15,777	29,204	31,273
Segment Earnings (Loss) before Tax	3,165	4,609	6,478	8,382
Operating Segments [Member] | Non-Reportable Segments [Member]
Segment Reporting Information [Line Items]
Total Revenue	26,856	11,027	46,745	17,398
Segment Earnings (Loss) before Tax	10,059	2,300	17,441	2,242
Intersegment Items [Member]
Segment Reporting Information [Line Items]
Total Revenue	(8,737)	(13,542)	(19,829)	(13,542)
Segment Earnings (Loss) before Tax	(1,511)	(7,402)	(3,725)	(7,402)
Unallocated [Member]
Segment Reporting Information [Line Items]
Interest expense	(5,433)	(4,434)	(9,745)	(8,810)
Profit-sharing plan expense	(484)	(449)	(4,465)	(3,429)
Stock-based compensation expense	(11,121)	(2,972)	(13,596)	(4,841)
Corporate overhead expense	(17,249)	(13,346)	(27,855)	(31,077)
Unallocated expense, total	$ (34,287)	$ (21,201)	$ (55,661)	$ (48,157)

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Fair Value Measurements

6 Months Ended

Aug. 30, 2013

Fair Value Disclosures [Abstract]

Fair Value Measurements

Note 14 – Fair Value Measurements

Assets and liabilities measured at fair value are classified using the fair value hierarchy based upon the transparency of inputs as of the measurement date. The classification of fair value measurements within the hierarchy is based upon the lowest level of input that is significant to the measurement. The three levels are defined as follows:

• Level 1 – Valuation is based upon quoted prices (unadjusted) in active markets for identical assets or liabilities.

• Level 2 – Valuation is based upon quoted prices for similar assets and liabilities in active markets, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

• Level 3 – Valuation is based upon unobservable inputs that are significant to the fair value measurement.

The following table summarizes the financial assets measured at fair value as of August 30, 2013:

(In thousands)	August 30, 2013		Level 1		Level 2		Level 3
Assets measured on a recurring basis:
Deferred compensation plan assets	$	11,096	$	8,545	$	2,551	$	—

The following table summarizes the financial assets measured at fair value as of February 28, 2013:

(In thousands)	February 28, 2013		Level 1		Level 2		Level 3
Assets measured on a recurring basis:
Deferred compensation plan assets	$	10,636	$	9,175	$	1,461	$	—

The following table summarizes the financial assets measured at fair value as of August 24, 2012:

(In thousands)	August 24, 2012		Level 1		Level 2		Level 3
Assets measured on a recurring basis:
Deferred compensation plan assets	$	10,016	$	8,482	$	1,534	$	—

The deferred compensation plan includes investments in mutual funds and a money market fund. Assets held in mutual funds were recorded at fair value, which was considered a Level 1 valuation as it is based on each fund’s quoted market value per share in an active market. The money market fund was classified as Level 2 as substantially all of the fund’s investments were determined using amortized cost. Although the Corporation is under no obligation to fund employees’ nonqualified accounts, the fair value of the offsetting nonqualified deferred compensation liability is based on the fair value of the plan’s assets.

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Debt

6 Months Ended

Aug. 30, 2013

Debt Disclosure [Abstract]

Debt

Note 12 – Debt

Debt due within one year totaled $15.0 million as of August 30, 2013, which represented the current maturity of the term loan. There was no debt due within one year as of February 28, 2013 and August 24, 2012.

Long-term debt and their related calendar year due dates as of August 30, 2013, February 28, 2013 and August 24, 2012, respectively, were as follows:

(In thousands)	August 30, 2013			February 28, 2013		August 24, 2012
Term loan, due 2019	$	350,000		$	—	$	—
7.375% senior notes, due 2021		225,000			225,000		225,000
Revolving credit facility, due 2017		—			61,200		55,000
Revolving credit facility, due 2018		13,900			—		—
6.10% senior notes, due 2028		181			181		181
		589,081			286,381		280,181
Current maturity of term loan		(15,000	)		—		—
Unamortized original issue discount		(10,601	)		—		—
	$	563,480		$	286,381	$	280,181

At August 30, 2013, the balances outstanding on the revolving credit facility and the term loan facility bear interest at a rate of approximately 3.2% and 4.0%, respectively. In addition to the balances outstanding on the aforementioned agreements, the Corporation also finances certain transactions with some of its vendors, which include a combination of various guaranties and letters of credit. At August 30, 2013, the Corporation had credit arrangements under a credit facility and an accounts receivable facility (as described below) to support the letters of credit in the amount of $129.1 million with $27.3 million of credit outstanding.

7.375% Senior Notes Due 2021

On November 30, 2011, the Corporation closed a public offering of $225.0 million aggregate principal amount of 7.375% senior notes due 2021 (the “2021 Senior Notes”). The net proceeds from this offering were used to finance other existing debt.

The 2021 Senior Notes will mature on December 1, 2021 and bear interest at a fixed rate of 7.375% per year. The 2021 Senior Notes constitute general unsecured senior obligations of the Corporation. The 2021 Senior Notes rank senior in right of payment to all future obligations of the Corporation that are, by their terms, expressly subordinated in right of payment to the 2021 Senior Notes and pari passu in right of payment with all existing and future unsecured obligations of the Corporation that are not so subordinated. The 2021 Senior Notes are effectively subordinated to secured indebtedness of the Corporation, including borrowings under its revolving credit facility described below, to the extent of the value of the assets securing such indebtedness. The 2021 Senior Notes also contain certain restrictive covenants that are customary for similar credit arrangements, including covenants that limit the Corporation’s ability to incur additional debt; declare or pay dividends; make distributions on or repurchase or redeem capital stock; make certain investments; enter into transactions with affiliates; grant or permit liens; sell assets; enter into sale and leaseback transactions; and consolidate, merge or sell all or substantially all of the Corporation’s assets. These restrictions are subject to customary baskets and financial covenant tests.

The total fair value of the Corporation’s publicly traded debt, which was considered a Level 1 valuation as it was based on quoted market prices, was $222.9 million (at a carrying value of $225.2 million), $233.6 million (at a carrying value of $225.2 million) and $247.1 million (at a carrying value of $225.2 million) at August 30, 2013, February 28, 2013 and August 24, 2012, respectively.

Credit Facility

In connection with the closing of the Merger, on August 9, 2013, the Corporation entered into a $600 million secured credit agreement (“Credit Agreement”), which provides for a $350 million term loan facility (“Term Loan Facility”) and a $250 million revolving credit facility (“Revolving Credit Facility”). The Term Loan Facility was fully drawn on August 9, 2013, the closing date (“Closing Date”) of the Merger. The Corporation issued the Term Loan Facility at a discount of $10.8 million. Installment payments will be made on the Term Loan Facility. The first payment of $10 million will be made by February 28, 2014. Thereafter, payments are scheduled to be made quarterly in the amount of $5 million. The Corporation may elect to increase the commitments under each of the Term Loan Facility and the Revolving Credit Facility (together referred to herein as the “Credit Facilities”) up to an aggregate amount of $150 million. The proceeds of the term loans and the revolving loans borrowed on the Closing Date were used to fund a portion of the Merger consideration and pay fees and expenses associated therewith. After the Closing Date, revolving loans borrowed under the Credit Agreement will be used for working capital and general corporate purposes.

The obligations under the Credit Agreement are guaranteed by the Corporation’s Parent and material domestic subsidiaries and secured by substantially all of the assets of the Corporation and the guarantors.

The interest rate per annum applicable to the loans under the Credit Facilities will be, at the Corporation’s election, equal to either (i) the base rate plus the applicable margin or (ii) the relevant adjusted Eurodollar rate for an interest period of one, two, three or six months, at the Corporation’s election, plus the applicable margin.

The Credit Agreement contains certain customary covenants, including covenants that limit the ability of the Corporation, its subsidiaries and the Parent to, among other things, incur or suffer to exist certain liens; make investments; enter into consolidations, mergers, acquisitions and sales of assets; incur or guarantee additional indebtedness; make distributions; enter into agreements that restrict the ability to incur liens or make distributions; and engage in transactions with affiliates. In addition, the Credit Agreement contains financial covenants that require the Corporation to maintain a total leverage ratio and interest coverage ratio in accordance with the limits set forth therein.

The Credit Agreement contains customary events of default including, without limitation, the representations and warranties made in or in connection with the loan documents entered into in connection with the Credit Agreement prove to have been untrue in any material respect when made, the failure to make required payments, the failure to comply with certain agreements or covenants, cross-defaults to certain other indebtedness in excess of specified amounts, certain events of bankruptcy and insolvency, the failure to pay certain judgments and a Change of Control (as defined therein). If such an event of default occurs, the lenders under the Credit Agreement would be entitled to take various actions, including the acceleration of amounts due thereunder and all actions permitted to be taken by a secured creditor.

Accounts Receivable Facility

The Corporation is also a party to an accounts receivable facility that provides funding of up to $50 million, under which there were no borrowings outstanding as of August 30, 2013, February 28, 2013 and August 24, 2012.

Under the terms of the accounts receivable facility, the Corporation sells accounts receivable to AGC Funding Corporation (a wholly-owned, consolidated subsidiary of the Corporation), which in turn sells undivided interests in eligible accounts receivable to third party financial institutions as part of a process that provides funding to the Corporation similar to a revolving credit facility.

On August 9, 2013, the Corporation amended its accounts receivable facility. The amendment modifies the accounts receivable facility by providing for a scheduled termination date that is 364 days following the date of the amendment, subject to two additional, consecutive 364-day terms with the consent of the parties thereto. The amendment also, among other things, permits the Merger and changes the definition of the base rate to equal the higher of the prime rate as announced by the applicable purchaser financial institution, and the federal funds rate plus 0.50%.

AGC Funding pays an annual facility fee of 80 basis points on the commitment of the accounts receivable securitization facility, together with customary administrative fees on letters of credit that have been issued and on outstanding amounts funded under the facility. Funding under the facility may be used for working capital, general corporate purposes and the issuance of letters of credit.

The accounts receivable facility contains representations, warranties, covenants and indemnities customary for facilities of this type, including the obligation of the Corporation to maintain the same consolidated leverage ratio as it is required to maintain under its Credit Agreement.

The total fair value of the Corporation’s non-publicly traded debt, which was considered a Level 2 valuation as it was based on comparable privately traded debt prices, was $363.9 million (at a carrying value of $363.9 million), $61.2 million (at a carrying value of $61.2 million) and $55.0 million (at a carrying value of $55.0 million) at August 30, 2013, February 28, 2013 and August 24, 2012, respectively.

At August 30, 2013, the Corporation was in compliance with the financial covenants under its borrowing agreements.

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Document and Entity Information	6 Months Ended
	Aug. 30, 2013	Oct. 01, 2013
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Aug. 30, 2013
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q2
Entity Registrant Name	AMERICAN GREETINGS CORP
Entity Central Index Key	0000005133
Current Fiscal Year End Date	--02-28
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		100

XML

Retirement Benefits

6 Months Ended

Aug. 30, 2013

Compensation And Retirement Disclosure [Abstract]

Retirement Benefits

Note 13 – Retirement Benefits

The components of periodic benefit cost for the Corporation’s defined benefit pension and postretirement benefit plans are as follows:  

	Defined Benefit Pension
	Three Months Ended						Six months Ended
	August 30,			August 24,			August 30,			August 24,
(In thousands)	2013			2012			2013			2012
Service cost	$	320		$	333		$	640		$	667
Interest cost		1,736			1,839			3,478			3,683
Expected return on plan assets		(1,567	)		(1,609	)		(3,141	)		(3,222	)
Amortization of prior service cost		51			62			102			123
Amortization of actuarial loss		913			815			1,830			1,631
	$	1,453		$	1,440		$	2,909		$	2,882

	Postretirement Benefits
	Three Months Ended						Six months Ended
	August 30,			August 24,			August 30,			August 24,
(In thousands)	2013			2012			2013			2012
Service cost	$	137		$	212		$	275		$	425
Interest cost		612			800			1,225			1,600
Expected return on plan assets		(762	)		(840	)		(1,525	)		(1,680	)
Amortization of prior service credit		(325	)		(519	)		(650	)		(1,038	)
Amortization of actuarial gain		(212	)		—			(425	)		—
	$	(550	)	$	(347	)	$	(1,100	)	$	(693	)

The Corporation has a discretionary profit-sharing plan with a 401(k) provision covering most of its United States employees. The profit-sharing plan expense for the six months ended August 30, 2013 was $4.5 million, compared to $3.4 million in the prior year period. The Corporation also matches a portion of 401(k) employee contributions. The expenses recognized for the three and six month periods ended August 30, 2013 were $1.4 million and $2.7 million ($1.3 million and $2.6 million for the three and six month periods ended August 24, 2012), respectively. The profit-sharing plan and 401(k) matching expenses for the six month periods are estimates as actual contributions are determined after fiscal year-end.

At August 30, 2013, February 28, 2013 and August 24, 2012, the liability for postretirement benefits other than pensions was $17.6 million, $15.7 million and $27.7 million, respectively, and is included in “Other liabilities” on the Consolidated Statement of Financial Position. At August 30, 2013, February 28, 2013 and August 24, 2012, the long-term liability for pension benefits was $86.3 million, $81.4 million and $75.6 million, respectively, and is included in “Other liabilities” on the Consolidated Statement of Financial Position.

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Debt - Long-Term Debt (Parenthetical) (Detail)	Aug. 30, 2013	Feb. 28, 2013	Aug. 24, 2012	Nov. 30, 2011
Term Loan [Member]
Debt Instrument [Line Items]
Long term debt due year	2019
7.375% Senior Notes, Due 2021 [Member]
Debt Instrument [Line Items]
Interest rate of debt	7.375%			7.375%
Long term debt due year	2021	2021	2021
Revolving Credit Facility, Due 2017 [Member]
Debt Instrument [Line Items]
Long term debt due year	2017	2017	2017
Revolving Credit Facility, Due 2018 [Member]
Debt Instrument [Line Items]
Long term debt due year	2018	2018	2018
6.10% senior notes, due 2028 [Member]
Debt Instrument [Line Items]
Interest rate of debt	6.10%
Long term debt due year	2028	2028	2028

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Debt - Long-Term Debt (Detail) (USD $) In Thousands, unless otherwise specified	Aug. 30, 2013	Feb. 28, 2013	Aug. 24, 2012
Debt Instrument [Line Items]
Long-term debt	$ 589,081	$ 286,381	$ 280,181
Current maturity of term loan	(15,000)
Long-term debt, Non current	563,480	286,381	280,181
Term Loan [Member]
Debt Instrument [Line Items]
Long-term debt	350,000
7.375% Senior Notes, Due 2021 [Member]
Debt Instrument [Line Items]
Long-term debt	225,000	225,000	225,000
Revolving Credit Facility, Due 2017 [Member]
Debt Instrument [Line Items]
Long-term debt		61,200	55,000
Revolving Credit Facility, Due 2018 [Member]
Debt Instrument [Line Items]
Long-term debt	13,900
6.10% senior notes, due 2028 [Member]
Debt Instrument [Line Items]
Long-term debt	181	181	181
Term Loan Facility [Member]
Debt Instrument [Line Items]
Unamortized original issue discount	$ (10,601)