PROPERTY AND EQUIPMENT, NET

12 Months Ended

Aug. 31, 2012

Property, Plant and Equipment [Abstract]

Property and equipment are stated at historical cost. Depreciation is computed on the straight-line basis over the estimated useful lives of the assets. The useful life of fixtures and equipment ranges from three to 15 years and that of buildings from ten to 25 years. Leasehold improvements are amortized over the shorter of the life of the improvement or the expected term of the lease. In some locations, leasehold improvements are amortized over a period longer than the initial lease term where management believes it is reasonably assured that the renewal option in the underlying lease will be exercised as an economic penalty may be incurred if the option is not exercised. The sale or purchase of property and equipment is recognized upon legal transfer of property. For property and equipment sales, if any long-term notes are carried by the Company as part of the sales terms, the sale is reflected at the net present value of current and future cash streams.

Property and equipment consist of the following (in thousands):



	August 31,
	2012			2011
Land	$	89,878		$	84,912
Building and improvements	198,967			192,245
Fixtures and equipment	103,263			89,239
Construction in progress	20,674			18,655
Total property and equipment, historical cost	412,782			385,051
Less: accumulated depreciation	(114,937		)	(103,940		)
Property and equipment, net	$	297,845		$	281,111

During fiscal year 2012, as a result of the merger of wholly owned subsidiaries under the common control of the Company and the correction of currency translation errors, the Company recorded during the first quarter of fiscal year 2012 a decrease in Property and equipment, net of approximately $8.9 million (see Note 1 - Company Overview and Basis of Presentation).

During fiscal year 2011, as a result of corrections related to the translation of foreign currencies, the Company recorded during the fourth quarter of fiscal year 2011 a decrease in Property and equipment, net of approximately $7.2 million (see Note 1 - Company Overview and Basis of Presentation).

Depreciation and amortization expense (in thousands):



	Years Ended August 31,
	2012		2011		2010
Depreciation and amortization expense	$	23,739	$	21,154	$	15,260

During fiscal year 2011, as a result of corrections related to the translation of foreign currencies, the Company recorded during the fourth quarter of fiscal year 2011 approximately $2.3 million of additional depreciation expense.

Summary of asset disposal activity for years ended 2012 and 2011(in thousands):



	Year ended August 31, 2012
Disposal Activity	Historical Cost		Accumulated Depreciation		Other Costs		Proceeds from disposal		Gain/(Loss) recognized
Disposal of assets no longer in use	4,700		4,250		—		138		(312		)
	$	4,700	$	4,250	$	—	$	138	$	(312	)



	Year ended August 31, 2011
Disposal Activity	Historical Cost		Accumulated Depreciation		Other Costs			Proceeds from disposal		Gain/(Loss) recognized
Sale of property in Panama ⁽¹⁾	$	8,717	$	2,748	$	(188	)	$	7,406	$	1,249
Disposal of assets no longer in use	9,248		8,580		—			182		(486		)
	$	17,965	$	11,328	$	(188	)	$	7,588	$	763

(1) On April 9, 2010, the Company relocated one of its three warehouse clubs in Panama City, Panama ("Los Pueblos") to the recently completed new warehouse club ("Brisas"). The Company leased the Los Pueblos site to Juan Diaz Properties, S.A./ Ace International Hardware Corporation (“ACE”) under a lease agreement with an option to purchase. ACE exercised its option to purchase the property, and on March 23, 2011, the Company’s Panama subsidiary entered into a land sale agreement with ACE. The sales price of the property was approximately $5.3 million. Additionally, on March 23, 2011, the Company’s Panama subsidiary entered into a land sale agreement with OD Panama S.A. (an affiliate of Office Depot, Mexico) for the sale of approximately 28,322 square feet of undeveloped land located adjacent to the Panama, Via Brasil location for approximately $2.1 million. Gonzalo Barrutieta, who has served as a member of the Company's board of directors since February 2008, is a board member of Office Depot, Mexico.

For fiscal year 2010, the Company recorded disposals of assets related to point of sale equipment and the replacement and upgrades of fixtures within the warehouse clubs.

The Company capitalized during the twelve months of fiscal years 2012 and 2011 approximately $250,000 and $876,000, respectively of interest expense. The total net interest capitalized and recorded within the consolidated balance sheets as of August 31, 2012 and 2011 was $4.7 million and $4.2 million, respectively.

- Definition

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

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