Document_Entity_Information_Do
Document - Entity Information Document - Entity Information (USD $) | 6 Months Ended | |
Feb. 28, 2015 | Mar. 31, 2015 | |
Entity [Abstract] | ||
Entity Registrant Name | PRICESMART INC | |
Entity Central Index Key | 1041803 | |
Current Fiscal Year End Date | -23 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Public Float | $1,670,793,360 | |
Entity Common Stock, Shares Outstanding | 30,183,492 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q2 | |
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 28-Feb-15 |
CONSOLIDATED_BALANCE_SHEETS_Un
CONSOLIDATED BALANCE SHEETS (Unaudited) (USD $) | Feb. 28, 2015 | Aug. 31, 2014 |
In Thousands, unless otherwise specified | ||
Current Assets: | ||
Cash and cash equivalents | $119,243 | $137,098 |
Short-term restricted cash | 1,500 | 2,353 |
Receivables, net of allowance for doubtful accounts of $5 and $0 as of February 28, 2015 and August 31, 2014, respectively | 7,078 | 7,910 |
Merchandise inventories | 281,256 | 226,383 |
Deferred tax assets - current | 6,839 | 6,177 |
Prepaid Expense and Other Assets, Current (includes $0 and $495 as of February 28, 2015 and August 31, 2014 respectively, for the fair value of derivative instruments and $1,064 and $0 as of February 28, 2015 and August 31, 2014, respectively, for the fair value of foreign currency forward contracts) | 27,068 | 17,260 |
Total current assets | 442,984 | 397,181 |
Long-term restricted cash | 25,428 | 27,013 |
Property and equipment, net | 424,360 | 426,325 |
Goodwill | 36,069 | 36,108 |
Deferred tax assets - long term | 9,013 | 11,825 |
Other non-current assets (includes $6,996 and $1,095 as of February 28, 2015 and August 31, 2014, respectively, for the fair value of derivative instruments.) | 38,267 | 30,755 |
Investment in unconsolidated affiliates | 10,245 | 8,863 |
Total Assets | 986,366 | 938,070 |
Current Liabilities: | ||
Short-term borrowings | 4,470 | 0 |
Accounts payable | 233,266 | 223,559 |
Accrued salaries and benefits | 15,288 | 17,799 |
Deferred membership income | 21,992 | 17,932 |
Income taxes payable | 8,359 | 7,718 |
Other accrued expenses (includes $0 and $14 as of February 28, 2015 and August 31, 2014, respectively, for the fair value of foreign currency forward contracts) | 22,193 | 21,030 |
Dividends payable | 10,564 | 0 |
Long-term debt, current portion | 14,792 | 11,848 |
Deferred tax liability - current | 137 | 157 |
Total current liabilities | 331,061 | 300,043 |
Deferred tax liability - long-term | 2,432 | 2,290 |
Long-term portion of deferred rent | 6,107 | 5,591 |
Long-term income taxes payable, net of current portion | 1,562 | 1,918 |
Long-term debt, net of current portion | 90,328 | 79,591 |
Other long-term liabilities (includes $586 and $0 for the fair value of derivative instruments and $379 and $372 for the defined benefit plan as of February 28, 2015 and August 31, 2014, respectively) | 965 | 372 |
Total liabilities | 432,455 | 389,805 |
Equity: | ||
Common stock, $0.0001 par value, 45,000,000 shares authorized; 30,973,256 and 30,950,701 shares issued and 30,182,541 and 30,209,917 shares outstanding (net of treasury shares) as of February 28, 2015 and August 31, 2014, respectively | 3 | 3 |
Preferred stock $.0001 par value; 2,000,000 shares authorized; no shares issued and outstanding as of February 28, 2015 and August 31, 2014 | 0 | 0 |
Additional paid-in capital | 400,539 | 397,150 |
Tax benefit from stock-based compensation | 10,962 | 9,505 |
Accumulated other comprehensive loss | -68,399 | -49,286 |
Retained earnings | 239,967 | 215,613 |
Less: treasury stock at cost; 790,715 and 740,784 shares as of February 28, 2015 and August 31, 2014, respectively | -29,161 | -24,720 |
Total equity | 553,911 | 548,265 |
Total Liabilities and Equity | $986,366 | $938,070 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (Unaudited) (USD $) | Feb. 28, 2015 | Aug. 31, 2014 |
Current Assets: | ||
Receivables, allowance for doubtful accounts | $5,000 | $0 |
Prepaid expenses and other current assets, fair value of derivative instruments | 0 | 495,000 |
Prepaid expenses and other current assets, fair value of foreign currency forward contracts | 1,064,000 | 0 |
Other non-current assets, fair value of derivative instruments | 6,996,000 | 1,095,000 |
LIABILITIES AND EQUITY | ||
fair value of foreign currency forward contracts (other accrued expenses) | 0 | 14,000 |
Other long-term liabilities, fair value of derivative instruments | 586,000 | 0 |
defined benefit plan (other long-term liabilities) | $379,000 | $372,000 |
Equity: | ||
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, authorized (in shares) | 45,000,000 | 45,000,000 |
Common stock, issued (in shares) | 30,973,256 | 30,950,701 |
Common stock, outstanding (in shares) | 30,182,541 | 30,209,917 |
Preferred Stock, Par or Stated Value Per Share | $0.00 | $0.00 |
Preferred Stock, Shares Authorized | 2,000,000 | 2,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Treasury stock, shares (in shares) | 790,715 | 740,784 |
CONSOLIDATED_STATEMENTS_OF_INC
CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 |
Revenues: | ||||
Net warehouse club sales | $732,120 | $657,167 | $1,368,535 | $1,246,861 |
Export sales | 6,229 | 6,764 | 14,660 | 12,485 |
Membership income | 10,898 | 9,481 | 21,013 | 18,749 |
Other income | 1,049 | 962 | 2,109 | 1,880 |
Total revenues | 750,296 | 674,374 | 1,406,317 | 1,279,975 |
Cost of goods sold: | ||||
Net warehouse club | 625,876 | 561,652 | 1,164,904 | 1,065,939 |
Export | 5,934 | 6,423 | 13,961 | 11,864 |
Selling, general and administrative: | ||||
Warehouse club operations | 62,041 | 53,203 | 118,251 | 104,975 |
General and administrative | 14,117 | 13,277 | 27,467 | 24,461 |
Pre-opening expenses | 229 | 340 | 3,378 | 814 |
Loss/(gain) on disposal of assets | 391 | 104 | 363 | 188 |
Total operating expenses | 708,588 | 634,999 | 1,328,324 | 1,208,241 |
Operating income | 41,708 | 39,375 | 77,993 | 71,734 |
Other income (expense): | ||||
Interest income | 266 | 193 | 530 | 374 |
Interest expense | -1,970 | -886 | -3,144 | -1,924 |
Other income (expense), net | -1,659 | 712 | -4,291 | 1,023 |
Total other expense | -3,363 | 19 | -6,905 | -527 |
Income from continuing operations before provision for income taxes and loss of unconsolidated affiliates | 38,345 | 39,394 | 71,088 | 71,207 |
Provision for income taxes | -13,526 | -11,116 | -25,628 | -21,501 |
Income (loss) of unconsolidated affiliates | 16 | 0 | 22 | 4 |
Net income | $24,835 | $28,278 | $45,482 | $49,710 |
Net income per share available for distribution: | ||||
Basic net income per share from continuing operations (in dollars per share) | $0.82 | $0.93 | $1.50 | $1.64 |
Basic net income per share (in dollars per share) | $0.82 | $0.93 | $1.50 | $1.64 |
Diluted net income per share from continuing operations (in dollars per share) | $0.82 | $0.93 | $1.50 | $1.64 |
Diluted net income per share (in dollars per share) | $0.82 | $0.93 | $1.50 | $1.64 |
Shares used in per share computations: | ||||
Basic (in shares) | 29,827 | 29,724 | 29,809 | 29,707 |
Diluted (in shares) | 29,833 | 29,736 | 29,816 | 29,719 |
Dividends per share (in dollars per share) | $0.70 | $0.70 | $0.70 | $0.70 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 3 Months Ended | 6 Months Ended | ||||||
In Thousands, unless otherwise specified | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | ||||
Net income | $24,835 | $28,278 | $45,482 | $49,710 | ||||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax | -10,906 | [1] | -13,661 | [1] | -22,557 | [1] | -12,372 | [1] |
Net gain (loss) arising during period | -13 | 8 | -24 | 11 | ||||
Total defined pension plans | -13 | 8 | -24 | 11 | ||||
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Net of Tax | 1,225 | [2] | 1,065 | [2] | 3,468 | [2] | 922 | [2] |
Other Comprehensive Income (Loss), Net of Tax | -9,694 | -12,588 | -19,113 | -11,439 | ||||
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest | $15,141 | $15,690 | $26,369 | $38,271 | ||||
[1] | (1) Translation adjustments arising in translating the financial statements of a foreign entity have no effect on the income taxes of that foreign entity. They may, however, affect: (a) the amount, measured in the parent entity's reporting currency, of withholding taxes assessed on dividends paid to the parent entity and (b) the amount of taxes assessed on the parent entity by the government of its country. The Company has determined that the reinvestment of earnings of its foreign subsidiaries are indefinite because of the long-term nature of the Company's foreign investment plans. Therefore, deferred taxes are not provided for on translation adjustments related to non-remitted earnings of the Company's foreign subsidiaries. | |||||||
[2] | (2) See Note 9 - Derivative Instruments and Hedging Activities. |
CONSOLIDATED_STATEMENTS_OF_STO
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) (USD $) | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Tax benefit from stock-based compensation [Member] | Accumulated other comprehensive loss [Member] | Retained Earnings (Accumulated deficit) [Member] | Treasury Stock [Member] |
In Thousands, except Share data | |||||||
Balance at Aug. 31, 2013 | $481,049 | $3 | $390,581 | $8,016 | ($41,475) | $143,871 | ($19,947) |
Balance (in shares) at Aug. 31, 2013 | 30,924,000 | 690,000 | |||||
Purchase of treasury stock (in shares) | 48,000 | ||||||
Purchase of treasury stock | -4,548 | -4,548 | |||||
Issuance of treasury stock (in shares) | 0 | ||||||
Issuance of restricted stock (in shares) | 16,000 | ||||||
Forfeiture of restricted stock awards (in shares) | -1,000 | ||||||
Exercise of stock options (in shares) | 5,000 | ||||||
Proceeds from exercise of stock options | 118 | 118 | |||||
Stock-based compensation | 4,666 | 3,321 | 1,345 | ||||
Dividend paid to stockholders | -10,570 | -10,570 | |||||
Dividend payable to stockholders | -10,593 | -10,593 | |||||
Net income | 49,710 | 49,710 | |||||
Other Comprehensive Income (Loss) | -11,439 | -11,439 | |||||
Balance at Feb. 28, 2014 | 498,393 | 3 | 394,020 | 9,361 | -52,914 | 172,418 | -24,495 |
Balance (in shares) at Feb. 28, 2014 | 30,944,000 | 738,000 | |||||
Balance at Aug. 31, 2014 | 548,265 | 3 | 397,150 | 9,505 | -49,286 | 215,613 | -24,720 |
Balance (in shares) at Aug. 31, 2014 | 30,951,000 | 741,000 | |||||
Purchase of treasury stock (in shares) | 50,000 | ||||||
Purchase of treasury stock | -4,441 | -4,441 | |||||
Issuance of treasury stock (in shares) | 0 | ||||||
Issuance of restricted stock (in shares) | 20,000 | ||||||
Forfeiture of restricted stock awards (in shares) | 0 | ||||||
Exercise of stock options (in shares) | 3,000 | ||||||
Proceeds from exercise of stock options | 49 | 49 | |||||
Stock-based compensation | 4,797 | 3,340 | 1,457 | ||||
Dividend paid to stockholders | -10,564 | -10,564 | |||||
Dividend payable to stockholders | -10,564 | -10,564 | |||||
Net income | 45,482 | 45,482 | |||||
Other Comprehensive Income (Loss) | -19,113 | -19,113 | |||||
Balance at Feb. 28, 2015 | $553,911 | $3 | $400,539 | $10,962 | ($68,399) | $239,967 | ($29,161) |
Balance (in shares) at Feb. 28, 2015 | 30,974,000 | 791,000 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Feb. 28, 2015 | Feb. 28, 2014 |
Operating Activities: | ||
Net income | $45,482 | $49,710 |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Depreciation and amortization | 16,433 | 13,793 |
Allowance for doubtful accounts | 5 | 6 |
Loss on sale of property and equipment | 363 | 188 |
Deferred income taxes | 2,478 | 1,857 |
Excess Tax Benefit from Share-based Compensation, Operating Activities | 1,457 | 1,345 |
Equity in gains/(losses) of unconsolidated affiliates | -22 | -4 |
Stock-based compensation | 3,340 | 3,321 |
Change in operating assets and liabilities: | ||
Change in receivables, prepaid expenses and other current assets, accrued salaries and benefits, deferred membership income and other accruals | -7,836 | -12,839 |
Merchandise inventories | -54,873 | -19,058 |
Accounts payable | 8,031 | 81 |
Net cash provided by (used in) operating activities | 11,944 | 35,710 |
Investing Activities: | ||
Additions to property and equipment | -42,160 | -58,096 |
Deposits for land purchase option agreements | -348 | -850 |
Proceeds from disposal of property and equipment | 40 | 42 |
Capital contribution to joint ventures | -1,360 | -750 |
Net cash provided by (used in) continuing investing activities | -43,828 | -59,654 |
Financing Activities: | ||
Proceeds from bank borrowings | 41,447 | 0 |
Repayment of bank borrowings | -16,658 | -12,012 |
Cash dividend payments | -10,564 | -10,570 |
Release of (addition to) restricted cash | 2,920 | 8,000 |
Excess tax benefit on stock-based compensation | 1,457 | 1,345 |
Payments for Repurchase of Common Stock | 4,441 | 4,548 |
Proceeds from exercise of stock options | 49 | 118 |
Net cash provided by (used in) financing activities | 14,210 | -17,667 |
Effect of exchange rate changes on cash and cash equivalents | -181 | -4,926 |
Net increase (decrease) in cash and cash equivalents | -17,855 | -46,537 |
Cash and cash equivalents at beginning of year | 137,098 | 121,874 |
Cash and cash equivalents at end of year | 119,243 | 75,337 |
Cash paid during the period for: | ||
Interest, net of amounts capitalized | 2,755 | 1,893 |
Income taxes | 22,212 | 22,326 |
Supplemental disclosure of non-cash financing activities: | ||
Dividends declared but not paid | $10,564 | $10,593 |
COMPANY_OVERVIEW_AND_BASIS_OF_
COMPANY OVERVIEW AND BASIS OF PRESENTATION | 6 Months Ended | |||||||||
Feb. 28, 2015 | ||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||
COMPANY OVERVIEW AND BASIS OF PRESENTATION | COMPANY OVERVIEW AND BASIS OF PRESENTATION | |||||||||
PriceSmart, Inc.’s (“PriceSmart” or the “Company”) business consists primarily of international membership shopping warehouse clubs similar to, but smaller in size than, warehouse clubs in the United States. As of February 28, 2015, the Company had 36 consolidated warehouse clubs in operation in 12 countries and one U.S. territory (six in Costa Rica and Colombia; four in Panama and Trinidad; three in Guatemala, Honduras and the Dominican Republic; two in El Salvador; and one each in Aruba, Barbados, Jamaica, Nicaragua and the United States Virgin Islands), of which the Company owns 100% of the corresponding legal entities (see Note 2 - Summary of Significant Accounting Policies). During October 2013, the Company opened its sixth membership warehouse club in Costa Rica in La Union, Cartago, and in May 2014, the Company opened its third warehouse club in Honduras in Tegucigalpa, the Company's second in the capital city. In January 2014, the Company acquired land in Pereira, Colombia and in the city of Medellin, Colombia and leased land in the city of Bogota, Colombia. The Company built new warehouse clubs at these three sites, and opened the Bogota location in October 2014 and opened the other two sites in November 2014. Together with the three warehouse clubs that were operating prior to these openings in Colombia (one in Barranquilla and two in Cali), these three new clubs brought the number of PriceSmart warehouse clubs operating in Colombia to six. In September 2014, the Company acquired land in La Chorrera ("Costa Verde"), west of Panama City, Panama, on which the Company's fifth PriceSmart warehouse club in Panama is scheduled to open in the summer of 2015. The Company continues to explore other potential sites for future warehouse clubs in Central America, the Caribbean and Colombia. The warehouse club sales and membership sign-ups experienced with the opening of the warehouse clubs in Colombia have reinforced the Company's belief that there could be a market for additional PriceSmart warehouse clubs in other Colombian cities. | ||||||||||
Basis of Presentation - The interim consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q for interim financial reporting pursuant to the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). These interim consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2014 (the “2014 Form 10-K”). The interim consolidated financial statements include the accounts of PriceSmart, Inc., a Delaware corporation, and its subsidiaries. Inter-company transactions between the Company and its subsidiaries have been eliminated in consolidation. | ||||||||||
The Company has evaluated subsequent events through the date and time these financial statements were issued. | ||||||||||
Reclassifications to consolidated balance sheet recorded during fiscal year 2015 for fiscal year 2014 - Certain reclassifications to the consolidated balance sheet have been made to prior fiscal year amounts to conform to the presentation in the current fiscal year. These reclassifications relate to the presentation of certain income tax receivables (see note 2). The table below summarizes these reclassifications. | ||||||||||
August 31, 2014 balance sheet line item as previously reported | Amount reclassified Dr/(Cr) | August 31, 2014 balance sheet line item as currently reported | ||||||||
Prepaid expenses and other current assets | 22,570 | $ | (5,310 | ) | 17,260 | |||||
Other non-current assets | 27,593 | 3,162 | 30,755 | |||||||
Accounts payable | (225,761 | ) | 2,202 | (223,559 | ) | |||||
Income taxes payable | (7,664 | ) | (54 | ) | (7,718 | ) | ||||
Net amount of reclassifications | $ | — | ||||||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended | ||||||||||||||||
Feb. 28, 2015 | |||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |||||||||||||||||
Significant Accounting Policies [Text Block] | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||||||
Principles of Consolidation – The interim consolidated financial statements of the Company included herein include the assets, liabilities and results of operations of the Company’s wholly owned subsidiaries and the Company's investment in, and the Company's share of the income (loss) of, joint ventures recorded under the equity method. All significant inter-company accounts and transactions have been eliminated in consolidation. The interim consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the SEC, and reflect all adjustments (consisting of normal recurring adjustments) that are, in the opinion of management, necessary to fairly present the financial position, results of operations, and cash flows for the periods presented. The results for interim periods are not necessarily indicative of the results for the full year. As of February 28, 2015, all of the Company's subsidiaries were wholly owned. Additionally, the Company's ownership interest in real estate development joint ventures as of February 28, 2015 is listed below: | |||||||||||||||||
Real Estate Development Joint Ventures | Countries | Ownership | Basis of Presentation | ||||||||||||||
GolfPark Plaza, S.A. | Panama | 50 | % | Equity(1) | |||||||||||||
Price Plaza Alajuela PPA, S.A. | Costa Rica | 50 | % | Equity(1) | |||||||||||||
-1 | Joint venture interests are recorded as investment in unconsolidated affiliates on the consolidated balance sheets. | ||||||||||||||||
Use of Estimates – The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. | |||||||||||||||||
Variable Interest Entities – The Company reviews and determines at the start of each arrangement, or subsequently if a reconsideration event occurs, whether any of its investments in joint ventures are a Variable Interest Entity (“VIE”) and whether it must consolidate a VIE and/or disclose information about its involvement in a VIE. The Company has determined that the joint ventures for GolfPark Plaza (Panama) and Price Plaza Alajuela (Costa Rica) are VIEs. The Company has determined that it is not the primary beneficiary of the VIEs and, therefore, has accounted for these entities under the equity method. | |||||||||||||||||
Cash and Cash Equivalents – Cash and cash equivalents represent cash and short-term investments with maturities of three months or less when purchased and proceeds due from credit and debit card transactions, which are generally settled within a few days of the underlying transaction. | |||||||||||||||||
Restricted Cash – The changes in restricted cash are disclosed within the consolidated statement of cash flows based on the nature of the restriction. The following table summarizes the restricted cash reported by the Company (in thousands): | |||||||||||||||||
February 28, 2015 | August 31, 2014 | ||||||||||||||||
Short-term restricted cash: | |||||||||||||||||
Restricted cash for Honduras loan | $ | — | $ | 1,200 | |||||||||||||
Restricted cash for land purchase option agreements | 1,443 | 1,095 | |||||||||||||||
Other short-term restricted cash (1) | 57 | 58 | |||||||||||||||
Total short-term restricted cash | $ | 1,500 | $ | 2,353 | |||||||||||||
Long-term restricted cash: | |||||||||||||||||
Restricted cash for Honduras loan | $ | — | $ | 1,720 | |||||||||||||
Restricted cash for Colombia bank loans | 24,000 | 24,000 | |||||||||||||||
Other long-term restricted cash (1) | 1,428 | 1,293 | |||||||||||||||
Total long-term restricted cash | $ | 25,428 | $ | 27,013 | |||||||||||||
Total restricted cash | $ | 26,928 | $ | 29,366 | |||||||||||||
-1 | Other short-term and long-term restricted cash consists mainly of cash deposits held within banking institutions in compliance with federal regulatory requirements in Costa Rica and Panama. | ||||||||||||||||
Tax Receivables - The Company pays Value Added Tax (“VAT”) or similar taxes (“input VAT”), income taxes, and other taxes within the normal course of its business in most of the countries in which it operates related to the procurement of merchandise and/or services it acquires and/or on estimated sales and taxable income. The Company also collects VAT or similar taxes on behalf of the government (“output VAT”) for merchandise and/or services it sells. If the output VAT exceeds the input VAT, then the difference is remitted to the government, usually on a monthly basis. If the input VAT exceeds the output VAT, this creates a VAT receivable. In some countries where the Company operates, the governments have implemented additional collection procedures, such as requiring credit card processors to remit a portion of sales processed via credit card directly to the government as advance payments of VAT and/or income tax. In the case of VAT these procedures alter the natural offset of input and output VAT and generally leave the Company with a net VAT receivable, forcing the Company to process significant refund claims on a recurring basis. With respect to income taxes paid, if the estimated income taxes paid or withheld exceed the actual income tax due this creates an income tax receivable. The Company either requests a refund of these tax receivables or applies the balance to expected future tax payments. These refund or offset processes can take anywhere from several months to several years to complete. | |||||||||||||||||
In most countries where the Company operates, the tax refund process is defined and structured with regular refunds or offsets. However, in two countries the respective governments have alleged that there is no defined process in the law to allow them to refund VAT receivables. The Company together with its tax and legal advisers is currently appealing these interpretations in court and expects to prevail. In some of these countries, where there is recent favorable jurisprudence, the government has recently begun an audit to verify the amount of the respective VAT receivables as a required precursor to any refund. The balance of the VAT receivable in these countries was $6.3 million and $5.7 million as of February 28, 2015 and August 31, 2014, respectively. In another country in which we have warehouse clubs, beginning in fiscal year 2015, a new minimum income tax mechanism took effect, which requires the Company to pay taxes based on a factor of sales rather than income. This will likely result in the Company having to make income tax payments substantially in excess of those due based on taxable income. The current rules (which the Company has appealed) do not allow the Company to obtain a refund or offset this excess income tax against other taxes. Due to the timing of these rules, as of February 28, 2015, the Company currently has an outstanding income tax receivable of $178,000 in this country; and there were deferred tax assets of approximately $1.1 million outstanding as of that date. The Company has not placed any type of allowance on the recoverability of these tax receivables or deferred income taxes because the Company believes that it has a more likely than not chance to succeed in its appeal on the matter. | |||||||||||||||||
. | |||||||||||||||||
The Company's policy for classification and presentation of VAT receivables, income tax receivables and other tax receivables is as follows: | |||||||||||||||||
•Short-term VAT and Income tax receivables, recorded as Other current assets: This classification is used for any countries where the Company's subsidiary has generally demonstrated the ability to recover the VAT or income tax receivable within one year. The Company also classifies as short-term any approved refunds or credit notes to the extent that the Company expects to receive the refund or use the credit notes within one year. | |||||||||||||||||
•Long-term VAT and Income tax receivables, recorded as Other non-current assets: This classification is used for amounts not approved for refund or credit in countries where the Company's subsidiary has not demonstrated the ability to obtain refunds within one year and/or for amounts which are subject to outstanding disputes. An allowance is provided against VAT and income tax receivable balances in dispute when the Company does not expect to eventually prevail in its recovery. | |||||||||||||||||
The following table summarizes the VAT receivables reported by the Company (in thousands): | |||||||||||||||||
February 28, 2015 | 31-Aug-14 | ||||||||||||||||
Prepaid expenses and other current assets | $ | 8,013 | $ | 3,565 | |||||||||||||
Other non-current assets | 19,035 | 17,115 | |||||||||||||||
Total amount of VAT receivable reported | $ | 27,048 | $ | 20,680 | |||||||||||||
The following table summarizes the Income tax receivables reported by the Company (in thousands): | |||||||||||||||||
February 28, 2015 | 31-Aug-14 | ||||||||||||||||
Prepaid expenses and other current assets | $ | 2,803 | $ | 1,916 | |||||||||||||
Other non-current assets | 7,633 | 7,218 | |||||||||||||||
Total amount of income tax receivable reported | $ | 10,436 | $ | 9,134 | |||||||||||||
Lease Accounting – Certain of the Company's operating leases where the Company is the lessee (see Revenue Recognition Policy for lessor accounting) provide for minimum annual payments that increase over the expected life of the lease. The aggregate minimum annual payments are expensed on the straight-line basis beginning when the Company takes possession of the property and extending over the expected term of the related lease including renewal options when the exercise of the option is reasonably assured as an economic penalty may be incurred if the option is not exercised. The amount by which straight-line rent exceeds actual lease payment requirements in the early years of the leases is accrued as deferred rent and reduced in later years when the actual cash payment requirements exceed the straight-line expense. The Company also accounts in its straight-line computation for the effect of any “rental holidays” and lessor-paid tenant improvements. In addition to the minimum annual payments, in certain locations, the Company pays additional contingent rent based on a contractually stipulated percentage of sales. | |||||||||||||||||
Merchandise Inventories - Merchandise inventories, which include merchandise for resale, are valued at the lower of cost (average cost) or market. The Company provides for estimated inventory losses and obsolescence between physical inventory counts on the basis of a percentage of sales. The provision is adjusted periodically to reflect the trend of actual physical inventory count results, with physical inventories occurring primarily in the second and fourth fiscal quarters. In addition, the Company may be required to take markdowns below the carrying cost of certain inventory to expedite the sale of such merchandise. | |||||||||||||||||
Fair Value Measurements – The Company measures the fair value for all financial and nonfinancial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring or nonrecurring basis. The fair value of an asset is the price at which the asset could be sold in an orderly transaction between unrelated, knowledgeable and willing parties able to engage in the transaction. A liability’s fair value is defined as the amount that would be paid to transfer the liability to a new obliger in a transaction between such parties, not the amount that would be paid to settle the liability with the creditor. | |||||||||||||||||
The Company has established a three-tier fair value hierarchy, which prioritizes the inputs used in measuring and revaluing fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. The Company was not required to revalue any assets or liabilities utilizing Level 1 or Level 3 inputs at the balance sheet dates. The Company's Level 2 assets and liabilities revalued at the balance sheet dates, on a recurring basis, primarily included cash flow hedges (interest rate swaps and cross-currency interest rate swaps) and forward foreign exchange contracts. In addition, the Company utilizes Level 2 inputs in determining the fair value of long-term debt. The Company has elected not to revalue long-term debt because this debt will be settled at the carrying value and not at the fair market value. The Company did not make any significant transfers in and out of Level 1 and Level 2 fair value tiers during the periods reported on herein. | |||||||||||||||||
Non-financial assets and liabilities are revalued and recognized at fair value subsequent to initial recognition when there is evidence of impairment. For the periods reported, no impairment of such non-financial assets was recorded. | |||||||||||||||||
The disclosure of fair value of certain financial assets and liabilities recorded at cost is as follows: | |||||||||||||||||
Cash and cash equivalents: The carrying value approximates fair value due to the short maturity of these instruments. | |||||||||||||||||
Short-term restricted cash: The carrying value approximates fair value due to the short maturity of these instruments. | |||||||||||||||||
Long-term restricted cash: Long-term restricted cash primarily consists of auto renewable 3-12 month certificates of deposit, which are held as collateral on our long-term debt. The carrying value approximates fair value due to the short maturity of the underlying certificates of deposit. | |||||||||||||||||
Accounts receivable: The carrying value approximates fair value due to the short maturity of these accounts. | |||||||||||||||||
Short-term debt: The carrying value approximates fair value due to the short maturity of these instruments. | |||||||||||||||||
Long-term debt: The fair value of debt is generally measured using a discounted cash flow analysis based on current market interest rates for similar types of financial instruments. These inputs are not quoted prices in active markets but they are either directly or indirectly observable; therefore, they are classified as Level 2 inputs. The carrying value and fair value of the Company’s debt as of February 28, 2015 and August 31, 2014 is as follows (in thousands): | |||||||||||||||||
February 28, 2015 | August 31, 2014 | ||||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||||
Long-term debt, including current portion | $ | 105,120 | $ | 105,600 | $ | 91,439 | $ | 92,893 | |||||||||
Derivatives Instruments and Hedging Activities - The Company uses derivative financial instruments for hedging and non-trading purposes to manage its exposure to changes in interest and currency exchange rates. In using derivative financial instruments for the purpose of hedging the Company’s exposure to interest and currency exchange rate risks, the contractual terms of a hedged instrument closely mirror those of the hedged item, providing a high degree of risk reduction and correlation. Contracts that are effective at meeting the risk reduction and correlation criteria (effective hedge) are recorded using hedge accounting. If a derivative financial instrument is an effective hedge, changes in the fair value of the instrument will be offset in accumulated other comprehensive income (loss) until the hedged item completes its contractual term. If any portion of the hedge is deemed ineffective, the change in fair value of the hedged assets or liabilities will be immediately recognized in earnings during the period. Instruments that do not meet the criteria for hedge accounting, or contracts for which the Company has not elected hedge accounting, are valued at fair value with unrealized gains or losses reported in earnings during the period of the change. Valuation techniques utilized in the fair value measurement of assets and liabilities presented on the Company’s consolidated balance sheets were not changed from previous practice during the reporting period. The Company seeks to manage counterparty risk associated with these contracts by limiting transactions to counterparties with which the Company has an established banking relationship. There can be no assurance, however, that this practice effectively mitigates counterparty risk. | |||||||||||||||||
Cash Flow Instruments. The Company is a party to receive floating interest rate, pay fixed-rate interest rate swaps to hedge the interest rate risk of certain U.S. dollar denominated debt within its international subsidiaries. The swaps are designated as cash flow hedges of interest expense risk. These instruments are considered effective hedges and are recorded using hedge accounting. The Company is also a party to receive variable interest rate, pay fixed interest rate cross-currency interest rate swaps to hedge the interest rate and currency exposure associated with the expected payments of principal and interest of U.S. denominated debt within its international subsidiaries whose functional currency is other than the U.S dollar. The swaps are designated as cash flow hedges of the currency risk related to payments on the U.S. denominated debt. These instruments are also considered to be effective hedges and are recorded using hedge accounting. Under cash flow hedging, the effective portion of the fair value of the derivative, calculated as the net present value of the future cash flows, is deferred on the consolidated balance sheets in accumulated other comprehensive loss. If any portion of an interest rate swap is determined to be an ineffective hedge, the gains or losses from changes in fair value would be recorded directly in the consolidated statements of income. Amounts recorded in accumulated other comprehensive loss are released to earnings in the same period that the hedged transaction impacts consolidated earnings. See Note 9 - Derivative Instruments and Hedging Activities for information on the fair value of interest rate swaps and cross-currency interest rate swaps as of February 28, 2015 and August 31, 2014. | |||||||||||||||||
Fair Value Instruments. The Company is exposed to foreign-currency exchange rate fluctuations in the normal course of business. The Company is also exposed to foreign-currency exchange rate fluctuations on U.S. dollar denominated liabilities within its international subsidiaries whose functional currency is other than the U.S. dollar. The Company manages these fluctuations, in part, through the use of non-deliverable forward foreign-exchange contracts that are intended to offset changes in cash flow attributable to currency exchange movements. The contracts are intended primarily to economically address exposure to U.S. dollar merchandise inventory expenditures made by the Company’s international subsidiaries whose functional currency is other than the U.S. dollar. Currently, these contracts are treated for accounting purposes as fair value instruments and do not qualify for derivative hedge accounting, and as such the Company does not apply derivative hedge accounting to record these transactions. As a result, these contracts are valued at fair value with unrealized gains or losses reported in earnings during the period of the change. The Company seeks to mitigate foreign-currency exchange-rate risk with the use of these contracts and does not intend to engage in speculative transactions. These contracts do not contain any credit-risk-related contingent features and are limited to less than one year in duration. See Note 9 - Derivative Instruments and Hedging Activities for information on the fair value of open, unsettled forward foreign-exchange contracts as of February 28, 2015 and August 31, 2014. | |||||||||||||||||
The following tables summarize financial assets and liabilities measured and recorded at fair value on a recurring basis in the Company’s consolidated balance sheet as of February 28, 2015 and August 31, 2014 (in thousands) for derivatives that qualify for hedge accounting: | |||||||||||||||||
Assets and Liabilities as of February 28, 2015 | Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | Total | |||||||||||||
(Level 1) | (Level 2) | (Level 3) | |||||||||||||||
Other non-current assets - (Cross-currency interest rate swaps) | — | 6,996 | — | 6,996 | |||||||||||||
Other long-term liabilities – (Interest rate swaps) | — | (340 | ) | — | (340 | ) | |||||||||||
Other long-term liabilities – (Cross-currency interest rate swaps) | — | (246 | ) | — | (246 | ) | |||||||||||
Total | $ | — | $ | 6,410 | $ | — | $ | 6,410 | |||||||||
Assets and Liabilities as of August 31, 2014 | Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | Total | |||||||||||||
(Level 1) | (Level 2) | (Level 3) | |||||||||||||||
Prepaid expenses and other current assets (Cross-currency interest rate swaps) | $ | — | $ | 495 | $ | — | $ | 495 | |||||||||
Other non-current assets - (Cross-currency interest rate swaps) | — | 970 | — | 970 | |||||||||||||
Other non-current assets - (Interest rate swaps) | — | 125 | — | 125 | |||||||||||||
Total | $ | — | $ | 1,590 | $ | — | $ | 1,590 | |||||||||
The following tables summarize financial assets and liabilities measured and recorded at fair value on a recurring basis in the Company’s consolidated balance sheet as of February 28, 2015 and August 31, 2014 (in thousands) for derivatives that do not qualify for hedge accounting: | |||||||||||||||||
Assets and Liabilities as of February 28, 2015 | Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | Total | |||||||||||||
(Level 1) | (Level 2) | (Level 3) | |||||||||||||||
Prepaid expenses and other current assets (Foreign currency forward contracts) | $ | — | $ | 1,064 | $ | — | $ | 1,064 | |||||||||
Other accrued expenses (Foreign currency forward contracts) | — | — | — | — | |||||||||||||
Net fair value of derivatives designated as hedging instruments that do not qualify for hedge accounting | $ | — | $ | 1,064 | $ | — | $ | 1,064 | |||||||||
Assets and Liabilities as of August 31, 2014 | Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | Total | |||||||||||||
(Level 1) | (Level 2) | (Level 3) | |||||||||||||||
Prepaid expenses and other current assets (Foreign currency forward contracts) | $ | — | $ | — | $ | — | $ | — | |||||||||
Other accrued expenses (Foreign currency forward contracts) | — | (14 | ) | — | (14 | ) | |||||||||||
Net fair value of derivatives designated as hedging instruments that do not qualify for hedge accounting | $ | — | $ | (14 | ) | $ | — | $ | (14 | ) | |||||||
Goodwill – The table below presents goodwill resulting from certain business combinations as of February 28, 2015 and August 31, 2014 (in thousands). The change in goodwill is a result of foreign exchange translation losses. | |||||||||||||||||
February 28, 2015 | August 31, 2014 | Change | |||||||||||||||
Goodwill | $ | 36,069 | $ | 36,108 | $ | (39 | ) | ||||||||||
The Company reviews goodwill at the entity level for impairment. The Company first reviews qualitative factors for each reporting unit, in determining if an annual goodwill test is required. If the Company's review of qualitative factors indicates a requirement for a test of goodwill impairment, the Company then will assess whether the carrying amount of a reporting unit is greater than zero and exceeds its fair value established during the Company's prior test of goodwill impairment ("established fair value"). If the carrying amount of a reporting unit at the entity level is greater than zero and its established fair value exceeds its carrying amount, goodwill of the reporting unit is considered not impaired. If either the carrying amount of the reporting unit is not greater than zero or if the carrying amount of the entity exceeds its established fair value, the Company performs a second test to determine whether goodwill has been impaired and to calculate the amount of that impairment. | |||||||||||||||||
Revenue Recognition – The Company recognizes merchandise sales revenue when title passes to the customer. Membership income represents annual membership fees paid by the Company’s warehouse club members, which are recognized ratably over the 12-month term of the membership. Membership refunds are prorated based on the remaining term of the membership; accordingly, no refund reserve is required to be established for the periods presented. The Company recognizes and presents revenue-producing transactions on a net of value added/sales tax basis. | |||||||||||||||||
The Company began offering Platinum memberships in Costa Rica during fiscal year 2013, which provides members with a 2% rebate on most items, up to an annual maximum of $500.00. Platinum members can apply this rebate to future purchases at the warehouse club at the end of the annual membership period. The Company records this 2% rebate as a reduction of revenue at the time of the sales transaction. Accordingly, the Company has reduced warehouse sales and has accrued a liability within other accrued expenses. The rebate expires within six months of the membership renewal date. However, the Company has determined that in the absence of relevant historical experience, the Company is not able to make a reasonable estimate of rebate redemptions and accordingly has assumed a 100% redemption rate. The Company periodically reviews expired unused rebates outstanding, and the expired unused rebates are recognized as Revenues: Other income on the consolidated statements of income. | |||||||||||||||||
The Company recognizes gift certificate sales revenue when the certificates are redeemed. The outstanding gift certificates are reflected as other accrued expenses in the consolidated balance sheets. These gift certificates generally have a one-year stated expiration date from the date of issuance. However, the absence of a large volume of transactions for gift certificates impairs the Company's ability to make a reasonable estimate of the redemption levels for gift certificates. Therefore, the Company assumes a 100% redemption rate that is the equivalent of no breakage prior to expiration of the gift certificate. The Company periodically reviews unredeemed outstanding gift certificates, and the gift certificates that have expired are recognized as Revenues: Other income on the consolidated statements of income. | |||||||||||||||||
Operating leases, where the Company is the lessor, with lease payments that have fixed and determinable rent increases are recognized as revenue on a straight-line basis over the expected lease term. The Company also accounts in its straight-line computation for the effect of any "rental holidays." Contingent rental revenue is recognized as the contingent rent becomes due per the individual lease agreements. | |||||||||||||||||
Cost of Goods Sold – The Company includes the cost of merchandise, food service and bakery raw materials, and one hour photo supplies in cost of goods sold. The Company also includes in cost of goods sold the external and internal distribution and handling costs for supplying merchandise, raw materials and supplies to the warehouse clubs. External costs include inbound freight, duties, drayage, fees, insurance, and non-recoverable value-added tax related to inventory shrink, spoilage and damage. Internal costs include payroll and related costs, utilities, consumable supplies, repair and maintenance, rent expense, building and equipment depreciation at its distribution facilities and payroll and other direct costs for in-store demonstrations. | |||||||||||||||||
Vendor consideration consists primarily of volume rebates, time-limited product promotions, slotting fees, demonstration reimbursements and prompt payment discounts. Volume rebates that are not threshold-based are incorporated into the unit cost of merchandise reducing the inventory cost and cost of goods sold. Volume rebates that are threshold-based are recorded as a reduction to cost of good sold when the Company achieves established purchase levels that are confirmed by the vendor in writing or upon receipt of funds. On a quarterly basis, the Company calculates the amount of rebates recorded in cost of goods sold that relates to inventory on hand and this amount is reclassified as a reduction to inventory. Product promotions are generally linked to coupons that provide for reimbursement to the Company from vendor rebates for the product being promoted. Slotting fees are related to consideration received by the Company from vendors for preferential "end cap" placement of the vendor's products within the warehouse club. Demonstration reimbursements are related to consideration received by the Company from vendors for the in-store promotion of the vendors' products. The Company records the reduction in cost of goods sold on a transactional basis for these programs. Prompt payment discounts are taken in substantially all cases, and therefore, are applied directly to reduce the acquisition cost of the related inventory, with the resulting effect recorded to cost of goods sold when the inventory is sold. | |||||||||||||||||
Selling, General and Administrative – Selling, general and administrative costs are comprised primarily of expenses associated with warehouse operations. Warehouse operations include the operating costs of the Company's warehouse clubs, including all payroll and related costs, utilities, consumable supplies, repair and maintenance, rent expense, building and equipment depreciation, and bank and credit card processing fees. Also included in selling, general and administrative expenses are the payroll and related costs for the Company's U.S. and regional purchasing and management centers. | |||||||||||||||||
Pre-Opening Costs – The Company expenses pre-opening costs (the costs of start-up activities, including organization costs and rent) as incurred. | |||||||||||||||||
Asset Impairment Costs – The Company periodically evaluates its long-lived assets for indicators of impairment. Management's judgments are based on market and operational conditions at the time of the evaluation and can include management's best estimate of future business activity. These periodic evaluations could cause management to conclude that impairment factors exist, requiring an adjustment of these assets to their then-current fair value. Future business conditions and/or activity could differ materially from the projections made by management causing the need for additional impairment charges. | |||||||||||||||||
Contingencies and Litigation – The Company records and reserves for loss contingencies if (a) information available prior to issuance of the consolidated financial statements indicates that it is probable that an asset had been impaired or a liability had been incurred at the date of the consolidated financial statements and (b) the amount of loss can be reasonably estimated. If one or both criteria for accrual are not met, but there is at least a reasonable possibility that a loss will occur, the Company does not record and reserve for a loss contingency but describes the contingency within a note and provides detail, when possible, of the estimated potential loss or range of loss. If an estimate cannot be made, a statement to that effect is made. | |||||||||||||||||
Foreign Currency Translation – The assets and liabilities of the Company’s foreign operations are translated to U.S. dollars when the functional currency in the Company’s international subsidiaries is the local currency and not U.S. dollars. Assets and liabilities of these foreign subsidiaries are translated to U.S. dollars at the exchange rate on the balance sheet date, and revenue, costs and expenses are translated at average rates of exchange in effect during the period. The corresponding translation gains and losses are recorded as a component of accumulated other comprehensive income or loss. These adjustments will affect net income upon the sale or liquidation of the underlying investment. Monetary assets and liabilities denominated in currencies other than the functional currency of the respective entity (primarily U.S. dollars) are revalued to the functional currency using the exchange rate on the balance sheet date. These foreign exchange transaction gains (losses), including transactions recorded involving these monetary assets and liabilities, are recorded as Other income (expense) in the consolidated statements of income. The following table summarizes the amounts recorded for the three and six month period ending February 28, 2015 and 2014 (in thousands): | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
28-Feb-15 | 28-Feb-14 | 28-Feb-15 | 28-Feb-14 | ||||||||||||||
Currency gain (loss) | $ | (1,659 | ) | $ | 712 | $ | (4,291 | ) | $ | 1,023 | |||||||
Income Taxes –The Company accounts for income taxes using the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributed to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences and carry-forwards are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established when necessary to reduce deferred tax assets to amounts expected to be realized. | |||||||||||||||||
The Company and its subsidiaries are required to file federal and state income tax returns in the United States and various other tax returns in foreign jurisdictions. The preparation of these tax returns requires the Company to interpret the applicable tax laws and regulations in effect in such jurisdictions, which could affect the amount of tax paid by the Company. The Company, in consultation with its tax advisors, bases its tax returns on interpretations that are believed to be reasonable under the circumstances. The tax returns, however, are subject to routine reviews by the various federal, state and foreign taxing authorities in the jurisdictions in which the Company or one of its subsidiaries files tax returns. As part of these reviews, a taxing authority may disagree with respect to the income tax positions taken by the Company (“uncertain tax positions”) and, therefore, require the Company or one of its subsidiaries to pay additional taxes. | |||||||||||||||||
The Company accrues an amount for its estimate of probable additional income tax liability. In certain cases, the impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant tax authority. An uncertain income tax position will not be recognized if it has less than 50% likelihood of being sustained. This requires significant judgment, the use of estimates, and the interpretation and application of complex tax laws. When facts and circumstances change, the Company reassesses these probabilities and records any changes in the consolidated financial statements as appropriate. There were no material changes in the Company's uncertain income tax positions for the periods ended on February 28, 2015 and August 31, 2014. However, during the fiscal year 2014, the Company was required to make payments of $4.2 million to the governments in two countries with respect to various income tax cases that it is currently appealing, but in which the Company believes it will eventually prevail. These amounts have been recorded in the balance sheet as Other non-current assets, as the Company considers this a payment on account and expects to get a refund thereof upon eventually prevailing on these cases, but is unsure of the timing thereof. Furthermore, during the first quarter of fiscal year 2015, one of the Company’s subsidiaries received provisional assessments claiming $2.6 million of taxes, penalties and interest related to withholding taxes on certain charges for services rendered by the Company. In addition, this subsidiary received provisional assessments totaling $5.2 million for lack of deductibility of the underlying service charges due to the lack of withholding. Based on the Company's interpretation of local law, rulings and jurisprudence (including Supreme Court precedents with respect to the deductibility assessment), the Company expects to prevail in both instances and has not recorded a provision for these assessments. | |||||||||||||||||
The Company has not provided for U.S. deferred taxes on cumulative non-U.S. undistributed earnings as such earnings are deemed by the Company to be indefinitely reinvested. It is not practicable to determine the U.S. federal income tax liability that would be associated with such earnings because of the complexity of the computation. | |||||||||||||||||
The following tables present a reconciliation of the effective tax rate for the periods presented: | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
28-Feb-15 | 28-Feb-14 | 28-Feb-15 | 28-Feb-14 | ||||||||||||||
Federal tax provision at statutory rates | 35 | % | 35 | % | 35 | % | 35 | % | |||||||||
State taxes, net of federal benefit | 0.3 | 0.2 | 0.4 | 0.3 | |||||||||||||
Differences in foreign tax rates | (5.0 | ) | (5.3 | ) | (4.8 | ) | (4.8 | ) | |||||||||
Permanent items and other adjustments | 3.8 | (1.7 | ) | 3.5 | (0.2 | ) | |||||||||||
Increase (decrease) in foreign valuation allowance | 1.2 | — | 2 | (0.1 | ) | ||||||||||||
Provision for income taxes | 35.3 | % | 28.2 | % | 36.1 | % | 30.2 | % | |||||||||
The variance in the effective tax rate for the three-month period ended on February 28, 2015 compared to the same period of the prior year was primarily attributable to the unfavorable impact of 4.2% resulting from an increased taxable loss incurred in the Company’s Colombia subsidiary for which no tax benefit was recognized net of adjustment to valuation allowance and the non-recurrence of a favorable impact of 2.0% in the prior period from the tax effect of changes in foreign currency value. | |||||||||||||||||
The variance in the effective tax rate for the six month period ended February 28, 2015 compared to the prior year was primarily attributable to the unfavorable impact of 4.7% resulting from an increased taxable loss incurred in the Company’s Colombia subsidiary for which no tax benefit was recognized net of adjustment to valuation allowance and the non-recurrence of a favorable impact of 1.1% in the prior period from the tax effect of changes in foreign currency value. | |||||||||||||||||
Recent Accounting Pronouncements | |||||||||||||||||
FASB ASC 606 ASU 2014-09 - Revenue from contracts with customers. | |||||||||||||||||
In May 2014, the FASB issued amended guidance on contracts with customers to transfer goods or services or contracts for the transfer of nonfinancial assets, unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). The guidance requires an entity to recognize revenue on contracts with customers relating to the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance requires that an entity depict the consideration by applying the following steps: | |||||||||||||||||
Step 1: Identify the contract(s) with a customer. | |||||||||||||||||
Step 2: Identify the performance obligations in the contract. | |||||||||||||||||
Step 3: Determine the transaction price. | |||||||||||||||||
Step 4: Allocate the transaction price to the performance obligations in the contract. | |||||||||||||||||
Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation. | |||||||||||||||||
The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. This amendment is to be either retrospectively adopted to each prior reporting period presented or retrospectively with the cumulative effect of initially applying this ASU recognized at the date of initial application. Adoption of this guidance is not expected to have a material impact on the Company's consolidated financial statements. |
PROPERTY_AND_EQUIPMENT_NET
PROPERTY AND EQUIPMENT, NET | 6 Months Ended | |||||||||||||||
Feb. 28, 2015 | ||||||||||||||||
Property, Plant and Equipment [Abstract] | ||||||||||||||||
PROPERTY AND EQUIPMENT, NET | PROPERTY AND EQUIPMENT | |||||||||||||||
Property and equipment are stated at historical cost. The historical cost of acquiring an asset includes the costs incurred to bring it to the condition and location necessary for its intended use. 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 certain components of building improvements and buildings from 10 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): | ||||||||||||||||
February 28, 2015 | August 31, 2014 | |||||||||||||||
Land | $ | 126,658 | $ | 124,082 | ||||||||||||
Building and improvements | 274,401 | 244,485 | ||||||||||||||
Fixtures and equipment | 156,857 | 148,143 | ||||||||||||||
Construction in progress | 24,068 | 55,664 | ||||||||||||||
Total property and equipment, historical cost | 581,984 | 572,374 | ||||||||||||||
Less: accumulated depreciation | (157,624 | ) | (146,049 | ) | ||||||||||||
Property and equipment, net | $ | 424,360 | $ | 426,325 | ||||||||||||
Depreciation and amortization expense (in thousands): | ||||||||||||||||
Three Months Ended February 28, | Six Months Ended February 28, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Depreciation and amortization expense | $ | 8,636 | $ | 7,139 | $ | 16,433 | $ | 13,793 | ||||||||
The Company capitalizes interest on expenditures for qualifying assets over a period that covers the duration of the activities required to get the asset ready for its intended use, provided that expenditures for the asset have been made and interest cost is being incurred. Interest capitalization continues as long as those activities and the incurrence of interest cost continues. The amount capitalized in an accounting period is determined by applying the capitalization rate (average interest rate) to the average amount of accumulated expenditures for the qualifying asset during the period. The capitalization rates are based on the interest rates applicable to borrowings outstanding during the period. | ||||||||||||||||
Total interest capitalized (in thousands): | ||||||||||||||||
As of February 28, 2015 | As of August 31, 2014 | |||||||||||||||
Total interest capitalized | $ | 7,106 | $ | 6,542 | ||||||||||||
Total interest capitalized (in thousands): | ||||||||||||||||
Three Months Ended February 28, | Six Months Ended February 28, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Interest capitalized | $ | 147 | $ | 194 | $ | 763 | $ | 493 | ||||||||
The Company recorded within accounts payable and other accrued expenses approximately $100,000 and $1.6 million, respectively, as of February 28, 2015 and $2.9 million and $1.2 million, respectively, as of August 31, 2014 of liabilities related to the acquisition and/or construction of property and equipment. |
EARNINGS_PER_SHARE
EARNINGS PER SHARE | 6 Months Ended | |||||||||||||||
Feb. 28, 2015 | ||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||
EARNINGS PER SHARE | EARNINGS PER SHARE | |||||||||||||||
The Company presents basic and diluted net income per share using the two-class method. The two-class method is an earnings allocation formula that treats a participating security as having rights to earnings that otherwise would have been available to common stockholders and that determines basic net income per share for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings that would have been available to common stockholders. A participating security is defined as a security that may participate in undistributed earnings with common stock. The Company’s capital structure includes securities that participate with common stock on a one-for-one basis for distribution of dividends. These are the restricted stock awards authorized within the 2002 and 2013 Equity Participation Plans/Equity Incentive Awards Plan of the Company and restricted stock units authorized within the 2001, 2002 and 2013 Equity Participation Plans/Equity Incentive Awards Plan. The Company determines the diluted net income per share by using the more dilutive of the two class-method or the treasury stock method and by including the basic weighted average of outstanding stock options in the calculation of diluted net income per share under the two-class method and including all potential common shares assumed issued in the calculation of diluted net income per share under the treasury stock method. | ||||||||||||||||
The following table sets forth the computation of net income per share for the three and six months ended February 28, 2015 and 2014 (in thousands, except per share amounts): | ||||||||||||||||
Three Months Ended February 28, | Six Months Ended February 28, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Net income | $ | 24,835 | $ | 28,278 | $ | 45,482 | $ | 49,710 | ||||||||
Less: Allocation of income to unvested stockholders | (259 | ) | (504 | ) | (580 | ) | (932 | ) | ||||||||
Net earnings available to common stockholders | $ | 24,576 | $ | 27,774 | $ | 44,902 | $ | 48,778 | ||||||||
Basic weighted average shares outstanding | 29,827 | 29,724 | 29,809 | 29,707 | ||||||||||||
Add dilutive effect of stock options (two-class method) | 6 | 12 | 7 | 12 | ||||||||||||
Diluted average shares outstanding | 29,833 | 29,736 | 29,816 | 29,719 | ||||||||||||
Basic net income per share | $ | 0.82 | $ | 0.93 | $ | 1.5 | $ | 1.64 | ||||||||
Diluted net income per share | $ | 0.82 | $ | 0.93 | $ | 1.5 | $ | 1.64 | ||||||||
STOCKHOLDERS_EQUITY
STOCKHOLDERS EQUITY | 6 Months Ended | ||||||||||||||||||||||||
Feb. 28, 2015 | |||||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||
STOCKHOLDERS EQUITY | STOCKHOLDERS’ EQUITY | ||||||||||||||||||||||||
Dividends | |||||||||||||||||||||||||
The following table summarizes the dividends declared and paid during fiscal year 2015 and 2014. | |||||||||||||||||||||||||
First Payment | Second Payment | ||||||||||||||||||||||||
Declared | Amount | Record Date | Date Paid | Date Payable | Amount | Record Date | Date Paid | Date Payable | Amount | ||||||||||||||||
2/4/15 | $ | 0.7 | 2/13/15 | 2/27/15 | N/A | $ | 0.35 | 8/14/15 | N/A | 8/31/15 | $ | 0.35 | |||||||||||||
1/23/14 | $ | 0.7 | 2/14/14 | 2/28/14 | N/A | $ | 0.35 | 8/15/14 | 8/29/14 | N/A | $ | 0.35 | |||||||||||||
The Company anticipates the ongoing payment of semi-annual dividends in subsequent periods, although the actual declaration of future dividends, the amount of such dividends, and the establishment of record and payment dates is subject to final determination by the Board of Directors at its discretion after its review of the Company’s financial performance and anticipated capital requirements. | |||||||||||||||||||||||||
Comprehensive Income and Accumulated Other Comprehensive Loss | |||||||||||||||||||||||||
The following tables disclose the effects of each component of other comprehensive income (loss), net of tax (in thousands): | |||||||||||||||||||||||||
Six Months Ended February 28, 2015 | |||||||||||||||||||||||||
Foreign currency translation adjustments | Defined benefit pension plans | Derivative Instruments | Total | ||||||||||||||||||||||
Beginning balance, September 1, 2014 | $ | (50,410 | ) | $ | 113 | $ | 1,011 | $ | (49,286 | ) | |||||||||||||||
Other comprehensive income (loss) | (22,557 | ) | (24 | ) | 3,468 | (19,113 | ) | ||||||||||||||||||
Ending balance, February 28, 2015 | $ | (72,967 | ) | $ | 89 | $ | 4,479 | $ | (68,399 | ) | |||||||||||||||
Six Months Ended February 28, 2014 | |||||||||||||||||||||||||
Foreign currency translation adjustments | Defined benefit pension plans | Derivative Instruments | Total | ||||||||||||||||||||||
Beginning balance, September 1, 2013 | $ | (42,321 | ) | $ | (152 | ) | $ | 998 | $ | (41,475 | ) | ||||||||||||||
Other comprehensive income (loss) | (12,372 | ) | 11 | 922 | (11,439 | ) | |||||||||||||||||||
Ending balance, February 28, 2014 | $ | (54,693 | ) | $ | (141 | ) | $ | 1,920 | $ | (52,914 | ) | ||||||||||||||
Twelve Months Ended August 31, 2014 | |||||||||||||||||||||||||
Foreign currency translation adjustments | Defined benefit pension plans | Derivative Instruments | Total | ||||||||||||||||||||||
Beginning balance, September 1, 2013 | $ | (42,321 | ) | $ | (152 | ) | $ | 998 | $ | (41,475 | ) | ||||||||||||||
Other comprehensive income (loss) | (8,089 | ) | 260 | 101 | (7,728 | ) | |||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | — | 5 | (2) | (88 | ) | (1) (3) | (83 | ) | |||||||||||||||||
Ending balance, August 31, 2014 | $ | (50,410 | ) | $ | 113 | $ | 1,011 | $ | (49,286 | ) | |||||||||||||||
-1 | See Note 9 - Derivative Instruments and Hedging Activities. | ||||||||||||||||||||||||
-2 | Amounts reclassified from accumulated other comprehensive income (loss) related to the minimum pension liability are included in warehouse club operations in the Company's Consolidated Statements of Income. | ||||||||||||||||||||||||
-3 | Amounts reclassified from accumulated other comprehensive income (loss) for settlement of derivative instruments are included in other income (expense), net in the Company's Consolidated Statements of Income. | ||||||||||||||||||||||||
Retained Earnings Not Available for Distribution | |||||||||||||||||||||||||
The following table summarizes retained earnings designated as legal reserves of various subsidiaries which cannot be distributed as dividends to PriceSmart, Inc. according to applicable statutory regulations (in thousands): | |||||||||||||||||||||||||
February 28, 2015 | 31-Aug-14 | ||||||||||||||||||||||||
Retained earnings not available for distribution | $ | 4,916 | $ | 4,556 | |||||||||||||||||||||
STOCK_BASED_COMPENSATION
STOCK BASED COMPENSATION | 6 Months Ended | |||||||||||||||
Feb. 28, 2015 | ||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||
STOCK BASED COMPENSATION | STOCK BASED COMPENSATION | |||||||||||||||
The three types of equity awards offered by the Company are stock options (“options”), restricted stock awards (“RSAs”) and restricted stock units (“RSUs”). Compensation related to options is accounted for by applying the valuation technique based on the Black-Scholes model. Compensation related to RSAs and RSUs is based on the fair market value at the time of grant with the application of an estimated forfeiture rate. The Company recognizes the compensation cost related to these awards over the requisite service period as determined by the grant, amortized ratably or on a straight line basis over the life of the grant. The Company utilizes “modified grant-date accounting” for true-ups due to actual forfeitures at the vesting dates. The Company records the tax savings resulting from tax deductions in excess of expense for stock-based compensation as additional paid-in capital and the tax deficiency resulting from stock-based compensation in excess of the related tax deduction as a reduction in paid-in capital, based on the Tax Law Ordering method. In addition, the Company reflects the tax savings (deficiency) resulting from the taxation of stock-based compensation as a financing cash flow in its consolidated statement of cash flows, rather than as an operating cash flow. | ||||||||||||||||
RSAs have the same cash dividend and voting rights as other common stock and are considered to be currently issued and outstanding shares of common stock. Shares of common stock underlying RSUs are not issued nor outstanding until the RSUs vest and RSUs do not have the same dividend and voting rights as common stock. However, all outstanding RSUs have accompanying dividend equivalents, requiring payment to the employees and directors with unvested RSUs of amounts equal to the dividend they would have received had the shares of common stock underlying the RSUs been actually issued and outstanding. Payments of dividend equivalents to employees are recorded as compensation expense. | ||||||||||||||||
The Company adopted the 2013 Equity Incentive Award Plan (the "2013 Plan") for the benefit of its eligible employees, consultants and non-employee directors on January 22, 2013. The 2013 Plan provides for awards covering up to (1) 600,000 shares of common stock plus (2) the number of shares that remained available for issuance as of January 22, 2013 under three equity participation plans previously maintained by the Company. The number of shares reserved for issuance under the 2013 Plan increases during the term of the plan by the number of shares relating to awards outstanding under the 2013 Plan or any of the prior plans that expire, or are forfeited, terminated, canceled or repurchased, or are settled in cash in lieu of shares and decreases due to award releases or option exercises. As of October 31, 2014, no more than an aggregate of 1,332,540 shares of the Company’s common stock will be issued under the 2013 Plan. The following table summarizes the shares authorized and shares available for future grants: | ||||||||||||||||
Shares available to grant | ||||||||||||||||
Shares authorized for issuance as of October 31, 2014 (including shares originally authorized for issuance under the prior plans) | 28-Feb-15 | 31-Aug-14 | ||||||||||||||
2013 Plan | 888,353 | 854,864 | 821,124 | |||||||||||||
The following table summarizes the components of the stock-based compensation expense (in thousands), which are included in general and administrative expense and warehouse club operations in the consolidated statements of income: | ||||||||||||||||
Three Months Ended February 28, | Six Months Ended February 28, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Options granted to directors | $ | 9 | $ | 7 | $ | 37 | $ | 37 | ||||||||
Restricted stock awards | 1,454 | 1,634 | 2,703 | 2,783 | ||||||||||||
Restricted stock units | 321 | 250 | 600 | 501 | ||||||||||||
Stock-based compensation expense | $ | 1,784 | $ | 1,891 | $ | 3,340 | $ | 3,321 | ||||||||
The following table summarizes other information related to stock-based compensation: | ||||||||||||||||
February 28, | ||||||||||||||||
2015 | 2014 | |||||||||||||||
Remaining unrecognized compensation cost (in thousands) | $ | 18,045 | $ | 23,520 | ||||||||||||
Weighted average period of time over which this cost will be recognized (years) | 6 | 6 | ||||||||||||||
Excess tax benefit (deficiency) on stock-based compensation (in thousands) | $ | 1,457 | $ | 1,345 | ||||||||||||
The Company began issuing restricted stock awards in fiscal year 2006 and restricted stock units in fiscal year 2008. The restricted stock awards and units vest over a five to ten year period, and the unvested portion of the award is forfeited if the employee or non-employee director leaves the Company before the vesting period is completed. Restricted stock awards and units activity for the period was as follows: | ||||||||||||||||
Six Months Ended February 28, | ||||||||||||||||
2015 | 2014 | |||||||||||||||
Grants outstanding at beginning of period | 488,416 | 623,424 | ||||||||||||||
Granted | 16,911 | 8,316 | ||||||||||||||
Forfeited | (720 | ) | (1,732 | ) | ||||||||||||
Vested | (136,779 | ) | (135,371 | ) | ||||||||||||
Grants outstanding at end of period | 367,828 | 494,637 | ||||||||||||||
The following table summarizes the weighted average per share grant date fair value for restricted stock awards and units for the period: | ||||||||||||||||
Six Months Ended February 28, | ||||||||||||||||
Weighted Average Grant Date Fair Value | 2015 | 2014 | ||||||||||||||
Restricted stock awards and units granted | $ | 89.85 | $ | 112.37 | ||||||||||||
Restricted stock awards and units vested | $ | 44.21 | $ | 39.71 | ||||||||||||
Restricted stock awards and units forfeited | $ | 40.4 | $ | 49.37 | ||||||||||||
The following table summarizes the total fair market value of restricted stock awards and units vested for the period (in thousands): | ||||||||||||||||
Six Months Ended February 28, | ||||||||||||||||
2015 | 2013 | |||||||||||||||
Total fair market value of restricted stock awards and units vested | $ | 12,166 | $ | 12,749 | ||||||||||||
At the vesting dates of restricted stock awards, the Company repurchases shares at the prior day's closing price per share, with the funds used to pay the employees' minimum statutory tax withholding requirements. The Company expects to continue this practice going forward. The following table summarizes this activity during the period: | ||||||||||||||||
Six Months Ended February 28, | ||||||||||||||||
2015 | 2014 | |||||||||||||||
Shares repurchased | 49,931 | 48,291 | ||||||||||||||
Cost of repurchase of shares (in thousands) | $ | 4,441 | $ | 4,548 | ||||||||||||
The Company reissues treasury shares as part of its stock-based compensation programs. The following table summarizes the treasury shares reissued: | ||||||||||||||||
Six Months Ended February 28, | ||||||||||||||||
2015 | 2014 | |||||||||||||||
Reissued treasury shares | — | — | ||||||||||||||
The following table summarizes the stock options outstanding: | ||||||||||||||||
February 28, 2015 | August 31, 2014 | |||||||||||||||
Stock options outstanding | 20,000 | 23,000 | ||||||||||||||
Due to the substantial shift from the use of stock options to restricted stock awards and units, the Company believes stock option activity is no longer significant and that any further disclosure on options is not necessary. |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended | |||||
Feb. 28, 2015 | ||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES | |||||
Legal Proceedings | ||||||
From time to time, the Company and its subsidiaries are subject to legal proceedings, claims and litigation arising in the ordinary course of business and property ownership. The Company evaluates such matters on a case by case basis, and vigorously contests any such legal proceedings or claims which the Company believes are without merit. The Company establishes an accrual for legal proceedings if and when those matters reach a stage where they present loss contingencies that are both probable and reasonably estimable. In such cases, there may be a possible exposure to loss in excess of any amounts accrued. The Company monitors those matters for developments that would affect the likelihood of a loss and the accrued amount, if any, thereof, and adjusts the amount as appropriate. If the loss contingency at issue is not both probable and reasonably estimable, the Company does not establish an accrual, but will continue to monitor the matter for developments that will make the loss contingency both probable and reasonably estimable. If it is at least a reasonable possibility that a material loss will occur, the Company will provide disclosure regarding the contingency. The Company believes that the final disposition of the pending legal proceedings, claims and litigation will not have a material adverse effect on its financial position, results of operations or liquidity. It is possible, however, that the Company's future results of operations for a particular quarter or fiscal year could be impacted by changes in circumstances relating to such matters. | ||||||
Taxes | ||||||
The Company is required to file federal and state tax returns in the United States and various other tax returns in foreign jurisdictions. The preparation of these tax returns requires the Company to interpret the applicable tax laws and regulations in effect in such jurisdictions, which could affect the amount of tax paid by the Company. The Company, in consultation with its tax advisors, bases its tax returns on interpretations that are believed to be reasonable under the circumstances. The tax returns, however, are subject to routine reviews by the various taxing authorities in the jurisdictions in which the Company files its returns. As part of these reviews, a taxing authority may disagree with respect to the interpretations the Company used to calculate its tax liability and therefore require the Company to pay additional taxes. | ||||||
The Company accrues an amount for its estimate of probable additional income tax liability. In certain cases, the impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant tax authority. An uncertain income tax position will not be recognized if it has less than 50% likelihood of being sustained. | ||||||
In evaluating the exposure associated with various non-income tax filing positions, the Company accrues for probable and estimable exposures for non-income tax related tax contingencies. As of February 28, 2015 and August 31, 2014, the Company had recorded within other accrued expenses a total of $3.0 million and $3.1 million for various non-income tax related tax contingencies. | ||||||
While the Company believes the recorded liabilities are adequate, there are inherent limitations in projecting the outcome of litigation, in estimating probable additional income tax liability taking into account uncertain tax positions and in evaluating the probable additional tax associated with various non-income tax filing positions. As such, the Company is unable to make a reasonable estimate of the sensitivity to change of estimates affecting its recorded liabilities. As additional information becomes available, the Company assesses the potential liability and revises its estimates as appropriate. | ||||||
During fiscal year 2014, the Company was required to make tax payments with respect to various income tax cases that it is currently appealing, and during the first quarter of fiscal year 2015, the Company received provisional tax assessments with respect to deductibility and withholdings. These payments and assessments are discussed in further detail within Note 2, Income Taxes. | ||||||
Other Commitments | ||||||
The Company is committed under non-cancelable operating leases for the rental of facilities and land. Future minimum lease commitments for facilities under these leases with an initial term in excess of one year are as follows (in thousands): | ||||||
Years ended February 28, | ||||||
Open | ||||||
Locations(1) | ||||||
2016 | $ | 7,309 | ||||
2017 | 9,785 | |||||
2018 | 10,355 | |||||
2019 | 10,326 | |||||
2020 | 10,260 | |||||
Thereafter | 81,442 | |||||
Total | $ | 129,477 | ||||
-1 | Operating lease obligations have been reduced by approximately $372,000 to reflect sub-lease income. Certain obligations under leasing arrangements are collateralized by the underlying asset being leased. | |||||
The Company is also committed to non-cancelable construction services obligations for various warehouse club developments and expansions. As of February 28, 2015 the Company has approximately $4.5 million in contractual obligations for construction services not yet rendered. | ||||||
The Company has entered into land purchase option agreements that have not been recorded as commitments, for which the Company has recorded within the balance sheet approximately $1.6 million in restricted cash deposits and prepaid expenses. The land purchase option agreements can be canceled at the sole option of the Company. The Company does not have a time table of when or if it will exercise these land purchase options, due to the uncertainty related to the completion of the Company's due diligence review. The Company's due diligence review includes evaluations of the legal status of the property, the zoning and permitting issues related to acquiring approval for the construction and operation of a warehouse club and any other issues related to the property itself that could render the property unsuitable or limit the property's economic viability as a warehouse club site. If the purchase option agreements are all exercised, the cash use would be approximately $21.4 million. | ||||||
See Note 10 - Unconsolidated Affiliates for a description of additional capital contributions that may be required in connection with joint ventures to develop commercial centers adjacent to PriceSmart warehouse clubs in Panama and Costa Rica. | ||||||
The Company contracts for distribution center services in Mexico. The contract for this distribution center's services was renewed on December 31, 2015 for an additional three years, with the applicable fees and rates to be reviewed at the beginning of each calendar year. Future minimum service commitments related to this contract through the end of the contract term is approximately $414,000. |
DEBT
DEBT | 6 Months Ended | ||||||||||||||||||
Feb. 28, 2015 | |||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||
DEBT | DEBT | ||||||||||||||||||
Short-term borrowings consist of lines of credit which are secured by certain assets of the Company and its subsidiaries and in some cases are guaranteed by the Company as summarized below (in thousands): | |||||||||||||||||||
Facilities Used | |||||||||||||||||||
Total Amount of Facilities | Short-term Borrowings | Letters of Credit | Facilities Available | Weighted average interest rate | |||||||||||||||
February 28, 2015 | $ | 59,387 | $ | 4,470 | $ | 380 | $ | 54,537 | 5.86 | % | |||||||||
August 31, 2014 | $ | 61,869 | $ | — | $ | 436 | $ | 61,433 | N/A | ||||||||||
As of February 28, 2015, we had approximately $40.0 million of short-term facilities in the U.S. that require us to comply with certain quarterly financial covenants, which include debt service and leverage ratios. As of February 28, 2015 and August 31, 2014, we were in compliance with respect to these covenants. Each of the facilities expires annually and is normally renewed. | |||||||||||||||||||
The following table provides the changes in our long-term debt for the six months ended February 28, 2015: | |||||||||||||||||||
(Amounts in millions) | Current Portion of Long-term debt | Long-term debt | Total | ||||||||||||||||
Balances as of August 31, 2014 | $ | 11,848 | $ | 79,591 | $ | 91,439 | (1) | ||||||||||||
Proceeds from long-term debt incurred during the period: | |||||||||||||||||||
Panama subsidiary | 1,000 | 9,000 | 10,000 | ||||||||||||||||
Honduras subsidiary | 1,600 | 6,750 | 8,350 | ||||||||||||||||
Colombia subsidiary | 1,500 | 13,500 | 15,000 | ||||||||||||||||
Trinidad subsidiary | 907 | 2,720 | 3,627 | ||||||||||||||||
Repayments of long-term debt: | |||||||||||||||||||
Repayment of loan by Honduras subsidiary, originally entered into on January 12, 2012 with Scotiabank El Salvador, S.A. | (3,200 | ) | — | (3,200 | ) | ||||||||||||||
Partial repayment of loan by Honduras subsidiary, originally entered into on March 7, 2014 with Banco de America Central Honduras, S.A. | — | (5,000 | ) | (5,000 | ) | ||||||||||||||
Repayment of loan by Honduras subsidiary, originally entered into on March 6, 2010 with Banco del Pais, S.A. | (87 | ) | — | (87 | ) | ||||||||||||||
Repayment of loan by Trinidad subsidiary, originally entered into on August 26, 2008 with Royal Bank of Trinidad and Tobago, Ltd. | (900 | ) | (2,325 | ) | (3,225 | ) | |||||||||||||
Regularly scheduled loan payments | (579 | ) | (4,567 | ) | (5,146 | ) | |||||||||||||
Reclassifications of long-term debt | 2,850 | (2,850 | ) | — | |||||||||||||||
Translation adjustments on foreign-currency debt of subsidiaries whose functional currency is not the U.S. dollar (2) | (147 | ) | (6,491 | ) | (6,638 | ) | |||||||||||||
Balances as of February 28, 2015 | $ | 14,792 | $ | 90,328 | $ | 105,120 | (3) | ||||||||||||
(1) | The carrying amount cash assets assigned as collateral for this total was $24.6 million and the carrying amount on non-cash assets assigned as collateral for this total was $84.2 million. | ||||||||||||||||||
(2) | These foreign currency translation adjustments are recorded within Other comprehensive income. | ||||||||||||||||||
(3) | The carrying amount cash assets assigned as collateral for this total was $24.0 million and the carrying amount on non-cash assets assigned as collateral for this total was $103.5 million. | ||||||||||||||||||
As of February 28, 2015, the Company had approximately $78.3 million of long-term loans in Trinidad, Panama, El Salvador, Honduras and Colombia that require these subsidiaries to comply with certain annual or quarterly financial covenants, which include debt service and leverage ratios. As of February 28, 2015, we were in compliance with all covenants or amended covenants. | |||||||||||||||||||
As of August 31, 2014, we had approximately $62.5 million of long-term loans in Trinidad, Panama, El Salvador, Honduras and Colombia that require these subsidiaries to comply with certain annual or quarterly financial covenants, which include debt service and leverage ratios. As of August 31, 2014, we were in compliance with all covenants or amended covenants. | |||||||||||||||||||
Annual maturities of long-term debt are as follows (in thousands): | |||||||||||||||||||
Twelve months ended February 28, | Amount | ||||||||||||||||||
2016 | $ | 14,792 | |||||||||||||||||
2017 | 29,679 | ||||||||||||||||||
2018 | 12,626 | ||||||||||||||||||
2019 | 12,176 | ||||||||||||||||||
2020 | 32,021 | ||||||||||||||||||
Thereafter | 3,826 | ||||||||||||||||||
Total | $ | 105,120 | |||||||||||||||||
DERIVATIVE_INSTRUMENTS_AND_HED
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 6 Months Ended | |||||||||||||||||||||
Feb. 28, 2015 | ||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | |||||||||||||||||||||
The Company is exposed to certain risks relating to its ongoing business operations. One risk managed by the Company using derivative instruments is interest rate risk. To manage interest rate exposure, the Company enters into hedge transactions (interest rate swaps) using derivative financial instruments. The objective of entering into interest rate swaps is to eliminate the variability of cash flows in the LIBOR interest payments associated with variable-rate loans over the life of the loans. As changes in interest rates impact the future cash flow of interest payments, the hedges provide a synthetic offset to interest rate movements. | ||||||||||||||||||||||
In addition, the Company is exposed to foreign currency and interest rate cash flow exposure related to non-functional currency long-term debt of two of our wholly owned subsidiaries. To manage foreign currency and interest rate cash flow exposure, these subsidiaries enter into cross-currency interest rate swaps that convert their U.S. dollar denominated floating interest payments to functional currency fixed interest payments during the life of the hedging instrument. As changes in foreign exchange and interest rates impact the future cash flow of interest payments, the hedges are intended to offset changes in cash flows attributable to interest rate and foreign exchange movements. | ||||||||||||||||||||||
These derivative instruments (cash flow hedging instruments) are designated and qualify as cash flow hedges, with the effective portion of the gain or loss on the derivative reported as a component of other comprehensive income (loss) and reclassified into earnings in the same period or periods during which the hedged transaction is determined to be ineffective. There were no such amounts recorded for ineffectiveness for the periods reported herein related to the interest rate or cross-currency interest rate swaps of long-term debt. | ||||||||||||||||||||||
The Company is exposed to foreign-currency exchange-rate fluctuations in the normal course of business, particularly in the case of U.S. dollar denominated liabilities within its international subsidiaries whose functional currency is other than the U.S. dollar. The Company manages these fluctuations, in part, through the use of non-deliverable forward foreign-exchange contracts that are intended to offset changes in cash flow attributable to currency exchange movements. These contracts are intended primarily to economically address exposure to U.S. dollar merchandise inventory expenditures made by the Company’s international subsidiaries whose functional currency is other than the U.S. dollar. Currently, these contracts do not qualify for derivative hedge accounting. The Company seeks to mitigate foreign-currency exchange-rate risk with the use of these contracts and does not intend to engage in speculative transactions. These contracts do not contain any credit-risk-related contingent features. | ||||||||||||||||||||||
Cash Flow Hedges | ||||||||||||||||||||||
The Company formally documents the hedging relationships for its derivative instruments that qualify for hedge accounting. As of February 28, 2015, all of the Company’s interest rate swap and cross-currency interest rate swap derivative financial instruments are designated and qualify as cash flow hedges. The cross-currency interest rate swap agreements convert the Company's subsidiary's foreign currency United States dollar denominated floating interest payments on long-term debt to the functional currency fixed interest payments during the life of the hedging instrument. As changes in foreign exchange and interest rates impact the future cash flow of interest payments, the hedge is intended to offset changes in cash flows attributable to interest rate and foreign currency exchange movements. Various subsidiaries entered into interest rate swap agreements that fix the interest rate over the life of the underlying loans. These derivative financial instruments were also designated and qualified as cash flow hedges. | ||||||||||||||||||||||
The following table summarizes agreements for which the Company has recorded cash flow hedge accounting transactions during the six months ended February 28, 2015: | ||||||||||||||||||||||
Subsidiary | Date Entered into | Derivative Financial Counter-party | Derivative Financial Instruments | Initial | Bank US$ loan Held with | Floating Leg (swap counter-party) | Fixed Rate for PSMT Subsidiary | Settlement Dates | Effective Period of swap | |||||||||||||
US$ Notional Amount | ||||||||||||||||||||||
El Salvador | 16-Dec-14 | Bank of Nova Scotia ("Scotiabank") | Interest rate swap | $ | 4,000,000 | Bank of Nova Scotia | Variable rate 30-day Libor plus 3.5% | 4.78 | % | 29th day of each month beginning on December 29, 2014 | December 01, 2014 - August 29, 2019 | |||||||||||
Colombia | 10-Dec-14 | Citibank, N.A. ("Citi") | Cross currency interest rate swap | $ | 15,000,000 | Citibank, N.A. | Variable rate 3-month Libor plus 2.8% | 8.25 | % | 4th day of March, June, Sept, Dec. beginning on March 4, 2015 | December 4, 2014 - December 3, 2019 | |||||||||||
Panama | 9-Dec-14 | Bank of Nova Scotia ("Scotiabank") | Interest rate swap | $ | 10,000,000 | Bank of Nova Scotia | Variable rate 30-day Libor plus 3.5% | 5.159 | % | 28th day of each month beginning December 29, 2014 | November 28, 2014 - November 29, 2019 | |||||||||||
Honduras | 23-Oct-14 | Citibank, N.A. ("Citi") | Cross currency interest rate swap | $ | 5,000,000 | Citibank, N.A. | Variable rate 3-month Libor plus 3.5% | 11.6 | % | 22nd day of January, April, July, and October beginning on January 22, 2015 | October 22, 2014 - October 22, 2017 | |||||||||||
Panama | 1-Aug-14 | Bank of Nova Scotia ("Scotiabank") | Interest rate swap | $ | 5,000,000 | Bank of Nova Scotia | Variable rate 30-day Libor plus 3.5% | 4.89 | % | 21st day of each month beginning on September 22, 2014 | August 21, 2014 - August 21, 2019 | |||||||||||
Panama | 22-May-14 | Bank of Nova Scotia ("Scotiabank") | Interest rate swap | $ | 19,800,000 | Bank of Nova Scotia | Variable rate 30-day Libor plus 3.5% | 4.98 | % | 4th day of each month beginning on June 4, 2014 | May 5, 2014 - April 4, 2019 | |||||||||||
Panama | 22-May-14 | Bank of Nova Scotia ("Scotiabank") | Interest rate swap | $ | 3,970,000 | Bank of Nova Scotia | Variable rate 30-day Libor plus 3.5% | 4.98 | % | 4th day of each month beginning on June 4, 2014 | May 5, 2014 - April 4, 2019 | |||||||||||
Colombia | 11-Dec-12 | Bank of Nova Scotia ("Scotiabank") | Cross currency interest rate swap | $ | 8,000,000 | Bank of Nova Scotia | Variable rate 3-month Libor plus 0.7% | 4.79 | % | March, June, September and December, beginning on March 5, 2013 | December 5, 2012 - December 5, 2014 | |||||||||||
Colombia | 21-Feb-12 | Bank of Nova Scotia ("Scotiabank") | Cross currency interest rate swap | $ | 8,000,000 | Bank of Nova Scotia | Variable rate 3-month Libor plus 0.6% | 6.02 | % | February, May, August and November beginning on May 22, 2012 | February 21, 2012 - February 21, 2017 | |||||||||||
Colombia | 21-Oct-11 | Bank of Nova Scotia ("Scotiabank") | Cross currency interest rate swap | $ | 2,000,000 | Bank of Nova Scotia | Variable rate 3-month Libor plus 0.7% | 5.3 | % | January, April, July and October, beginning on October 29, 2011 | July 29, 2011 - April 1, 2016 | |||||||||||
Colombia | 21-Oct-11 | Bank of Nova Scotia ("Scotiabank") | Cross currency interest rate swap | $ | 6,000,000 | Bank of Nova Scotia | Variable rate 3-month Libor plus 0.7% | 5.45 | % | March, June, September and December, beginning on December 29, 2011 | September 29, 2011 - April 1, 2016 | |||||||||||
Colombia | 5-May-11 | Bank of Nova Scotia ("Scotiabank") | Cross currency interest rate swap | $ | 8,000,000 | Bank of Nova Scotia | Variable rate 3-month Libor plus 0.7% | 6.09 | % | January, April, July and October, beginning on July 5, 2011 | April 1, 2011 - April 1, 2016 | |||||||||||
For the three and six-month period ended February 28, 2015 and 2014, the Company included the gain or loss on the hedged items (that is, variable-rate borrowings) in the same line item—interest expense—as the offsetting gain or loss on the related interest rate swaps as follows (in thousands): | ||||||||||||||||||||||
Income Statement Classification | Interest expense | Cost of swaps (2) | Total | |||||||||||||||||||
on borrowings(1) | ||||||||||||||||||||||
Interest expense for the three months ended February 28, 2015 | $ | 584 | $ | 714 | $ | 1,298 | ||||||||||||||||
Interest expense for the three months ended February 28, 2014 | $ | 113 | $ | 334 | $ | 447 | ||||||||||||||||
Interest expense for the six months ended February 28, 2015 | $ | 933 | $ | 1,226 | $ | 2,159 | ||||||||||||||||
Interest expense for the six months ended February 28, 2014 | $ | 240 | $ | 764 | $ | 1,004 | ||||||||||||||||
(1) | This amount is representative of the interest expense recognized on the underlying hedged transactions. | |||||||||||||||||||||
(2) | This amount is representative of the interest expense recognized on the cross-currency interest rate swaps designated as cash flow hedging instruments. | |||||||||||||||||||||
The total notional balance of the Company’s pay-fixed/receive-variable interest rate swaps and cross-currency interest rate swaps was as follows (in thousands): | ||||||||||||||||||||||
Floating Rate Payer (Swap Counterparty) | 28-Feb-15 | 31-Aug-14 | ||||||||||||||||||||
Scotiabank | $ | 64,058 | $ | 60,200 | ||||||||||||||||||
Citibank N.A. | 19,750 | — | ||||||||||||||||||||
Total | $ | 83,808 | $ | 60,200 | ||||||||||||||||||
The following table summarizes the fair value of interest rate swap and cross-currency interest rate swap derivative instruments that qualify for derivative hedge accounting (in thousands, except footnote data): | ||||||||||||||||||||||
February 28, 2015 | August 31, 2014 | |||||||||||||||||||||
Derivatives designated as cash flow hedging instruments | Balance Sheet Account | Fair Value | Balance Sheet Account | Fair Value | ||||||||||||||||||
Cross-currency interest rate swaps(1) | Prepaid expenses and current assets | $ | — | Prepaid expenses and current assets | $ | 495 | ||||||||||||||||
Cross-currency interest rate swaps(1) | Other non-current assets | 6,996 | Other non-current assets | 970 | ||||||||||||||||||
Interest rate swaps(2) | Other non-current assets | — | Other non-current assets | 125 | ||||||||||||||||||
Interest rate swaps(2) | Other long-term liabilities | (340 | ) | Other long-term liabilities | — | |||||||||||||||||
Cross-currency interest rate swaps(3) | Other long-term liabilities | (246 | ) | Other long-term liabilities | — | |||||||||||||||||
Net fair value of derivatives designated as hedging instruments - assets (liability)(4) | $ | 6,410 | $ | 1,590 | ||||||||||||||||||
(1) | The effective portion of the cross-currency interest rate swaps for this subsidiary was recorded to Accumulated other comprehensive (income)/loss for $(4.9) million and $(917,000) net of tax as of February 28, 2015 and August 31, 2014, respectively. The Company has recorded a deferred tax liability amount with an offset to other comprehensive income - tax of $(2.1) million and $(548,000) as of February 28, 2015 and August 31, 2014, respectively, related to asset positions of cross-currency interest rate swaps. However, the equity effect of this deferred tax liability is offset by the full valuation allowance provided for the net deferred tax asset recorded for this subsidiary. | |||||||||||||||||||||
(2) | The effective portion of the interest rate swaps was recorded to Accumulated other comprehensive loss / (income) for $254,000 and $(94,000) net of tax as of February 28, 2015 and August 31, 2014, respectively. The Company has recorded a deferred tax asset / (liability) amount with an offset to other comprehensive income - tax of $86,000 and $(31,000) as of February 28, 2015 and August 31, 2014, respectively. | |||||||||||||||||||||
(3) | The effective portion of the cross-currency interest rate swaps for this subsidiary was recorded to Accumulated other comprehensive (income)/loss for $172,000 and $0 net of tax as of February 28, 2015 and August 31, 2014, respectively. The Company has recorded a deferred tax asset amount with an offset to other comprehensive income - tax of $74,000 and $0 as of February 28, 2015 and August 31, 2014, respectively. | |||||||||||||||||||||
(4) | Derivatives listed on the above table were designated as cash flow hedging instruments. | |||||||||||||||||||||
Fair Value Instruments | ||||||||||||||||||||||
The Company has entered into non-deliverable forward foreign-exchange contracts. These contracts are treated for accounting purposes as fair value contracts and do not qualify for derivative hedge accounting. The use of non-deliverable forward foreign-exchange contracts is intended to offset changes in cash flow attributable to currency exchange movements. These contracts are intended primarily to economically hedge exposure to U.S. dollar merchandise inventory expenditures made by the Company’s international subsidiaries whose functional currency is other than the U.S. dollar. The Company entered into non-deliverable forward foreign exchange contracts during the six months ended February 28, 2015. The open contracts as of February 28, 2015 are summarized below: | ||||||||||||||||||||||
Subsidiary | Dates entered into | Derivative Financial Counter-party | Derivative Financial Instrument | Notional Amount | Settlement Date | Effective Period of Forward | ||||||||||||||||
(in thousands) | ||||||||||||||||||||||
Colombia | January - February 2015 | Bank of Nova Scotia | Forward foreign exchange contracts | $ | 27,000 | March - April 2015 | January - April 2015 | |||||||||||||||
For the three and six-month periods ended February 28, 2015 and 2014, the Company included in its consolidated statements of income the forward derivative gain or (loss) on the non-deliverable forward foreign-exchange contracts as follows (in thousands): | ||||||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||||
Income Statement Classification | 28-Feb-15 | 28-Feb-14 | 28-Feb-15 | 28-Feb-14 | ||||||||||||||||||
Other income (expense), net | $ | 3,521 | $ | 62 | $ | 6,134 | $ | 185 | ||||||||||||||
The following table summarizes the fair value of foreign currency forward contracts that do not qualify for derivative hedge accounting (in thousands): | ||||||||||||||||||||||
February 28, 2015 | August 31, 2014 | |||||||||||||||||||||
Derivatives designated as fair value hedging instruments | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | ||||||||||||||||||
Foreign currency forward contracts | Prepaid expenses and other current assets | $ | 1,064 | Prepaid expenses and other current assets | $ | — | ||||||||||||||||
Foreign currency forward contracts | Other accrued expenses | — | Other accrued expenses | (14 | ) | |||||||||||||||||
Net fair value of derivatives designated as hedging instruments that do not qualify for hedge accounting | $ | 1,064 | $ | (14 | ) | |||||||||||||||||
UNCONSOLIDATED_AFFILIATES
UNCONSOLIDATED AFFILIATES | 6 Months Ended | |||||||||||||||||||||||||||
Feb. 28, 2015 | ||||||||||||||||||||||||||||
Unconsolidated Affiliates [Abstract] | ||||||||||||||||||||||||||||
UNCONSOLIDATED AFFILIATES | UNCONSOLIDATED AFFILIATES | |||||||||||||||||||||||||||
The Company determines whether any of the joint ventures in which it has made investments is a Variable Interest Entity (“VIE”) at the start of each new venture and if a reconsideration event has occurred. At this time, the Company also considers whether it must consolidate a VIE and/or disclose information about its involvement in a VIE. A reporting entity must consolidate a VIE if that reporting entity has a variable interest (or combination of variable interests) that will absorb a majority of the VIE's expected losses, receive a majority of the VIE's expected residual returns, or both. A reporting entity must consider the rights and obligations conveyed by its variable interests and the relationship of its variable interests with variable interests held by other parties to determine whether its variable interests will absorb a majority of a VIE's expected losses, receive a majority of the VIE's expected residual returns, or both. The reporting entity that consolidates a VIE is called the primary beneficiary of that VIE. | ||||||||||||||||||||||||||||
In 2008, the Company entered into real estate joint ventures to jointly own and operate separate commercial retail centers adjacent to warehouse clubs in Panama (Golf Park Plaza, S.A.) and Costa Rica (Plaza Alajuela, S.A.). Due to the initial nature of the joint ventures and the continued commitments for additional financing, the Company determined these joint ventures are VIEs. Since all rights and obligations are equally absorbed by both parties within each joint venture, the Company has determined that it is not the primary beneficiary of the VIEs and, therefore, has accounted for these entities under the equity method. Under the equity method, the Company's investments in unconsolidated affiliates are initially recorded as an investment in the stock of an investee at cost and are adjusted for the carrying amount of the investment to recognize the investor's share of the earnings or losses of the investee after the date of the initial investment. | ||||||||||||||||||||||||||||
On December 12, 2013, the Company entered into a lease agreement for approximately 17,976 square feet (1,670 square meters) of land with Golf Park Plaza, S.A. upon which the Company constructed its central offices in Panama. Construction of the offices was completed in October 2014. The lease term is for 15 years with three options to renew for five years each at the Company's discretion. The monthly lease expense is approximately $8,800. For the three and six months ended February 28, 2015, the Company recognized rent expense of $26,400 and $52,800, respectively, for this lease. | ||||||||||||||||||||||||||||
The table below summarizes the Company’s interest in these VIEs and the Company’s maximum exposure to loss as a result of its involvement with these VIEs as of February 28, 2015 (in thousands): | ||||||||||||||||||||||||||||
Entity | % Ownership | Initial Investment | Additional Investments | Company’s Variable | Commitment to Future Additional Investments (1) | Company’s | ||||||||||||||||||||||
Interest in Entity | Maximum | |||||||||||||||||||||||||||
Net Loss Inception to Date | Exposure | |||||||||||||||||||||||||||
to Loss in Entity(2) | ||||||||||||||||||||||||||||
GolfPark Plaza, S.A. | 50 | % | $ | 4,616 | $ | 2,283 | $ | (81 | ) | $ | 6,818 | $ | 217 | $ | 7,035 | |||||||||||||
Price Plaza Alajuela, S.A. | 50 | % | 2,193 | 1,236 | (2 | ) | 3,427 | 785 | 4,212 | |||||||||||||||||||
Total | $ | 6,809 | $ | 3,519 | $ | (83 | ) | $ | 10,245 | $ | 1,002 | $ | 11,247 | |||||||||||||||
(1) | The parties intend to seek alternate financing for the project, which could reduce the amount of investments each party would be required to provide. The parties may mutually agree on changes to the project, which could increase or decrease the amount of contributions each party is required to provide. | |||||||||||||||||||||||||||
(2) | The maximum exposure is determined by adding the Company’s variable interest in the entity and any explicit or implicit arrangements that could require the Company to provide additional financial support. | |||||||||||||||||||||||||||
The summarized financial information of the unconsolidated affiliates is as follows (in thousands): | ||||||||||||||||||||||||||||
February 28, 2015 | August 31, 2014 | |||||||||||||||||||||||||||
Current assets | $ | 1,246 | $ | 803 | ||||||||||||||||||||||||
Noncurrent assets | $ | 11,499 | $ | 8,900 | ||||||||||||||||||||||||
Current liabilities | $ | 1,418 | $ | 1,126 | ||||||||||||||||||||||||
Noncurrent liabilities | $ | 13 | $ | 13 | ||||||||||||||||||||||||
Three Months Ended February 28, | Six Months Ended February 28, | |||||||||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||||||||||||
Net income (loss) | $ | 15 | $ | — | $ | 27 | $ | 8 | ||||||||||||||||||||
SEGMENTS
SEGMENTS | 6 Months Ended | ||||||||||||||||||||||||
Feb. 28, 2015 | |||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||
SEGMENTS | SEGMENTS | ||||||||||||||||||||||||
The Company and its subsidiaries are principally engaged in the operation of membership shopping warehouse clubs in 13 countries/territories that are located in Latin America and the Caribbean. In addition, the Company operates distribution centers and corporate offices in the United States. The Company’s reportable segments are based on management’s organization of these locations into operating segments by general geographic location, which are used by management in setting up management lines of responsibility, providing support services, and making operational decisions and assessments of financial performance. | |||||||||||||||||||||||||
During the second quarter of fiscal year 2015, the Company added to its operating segments, the Colombia Operations, and desegregated the Colombia Operations from the Latin America Operations, renaming that segment Central America Operations. The Company has made this change as a result of the information that the Company's chief operating decision maker regularly reviews for purposes of allocating resources and assessing performance and the growing level of investment and sales activity in Colombia. Therefore, beginning in the second quarter of fiscal year 2015, the Company has reported its financial performance based on these new segments and has retrospectively adopted this change for the disclosure of financial information presented by segment. The Company’s operating segments are the United States, Central America, the Caribbean and Colombia. Additionally, certain inter-company charges are no longer allocated to the segments within this presentation and now appear as reconciling items to reflect the amount eliminated on consolidation of intersegment transactions. This presentation more closely reflects the information reviewed by the Company's chief operating decision maker. Segment amounts are presented after converting to U.S. dollars and consolidating eliminations. Certain revenues and operating costs included in the United States segment have not been allocated, in order to reflect the information reviewed by the Company's chief operating decision maker or it is impractical to do so. | |||||||||||||||||||||||||
The Company has made reclassifications to the consolidated balance sheet recorded during fiscal year 2015 (see Note 1 - Company Overview and Basis of Presentation) to the consolidated balance sheet for fiscal year 2014 to conform to the presentation in fiscal year 2015. These reclassifications did not impact net income. The following tables summarize the impact of these reclassifications to the amounts reported for each segment (in thousands): | |||||||||||||||||||||||||
United | Central | Caribbean | Colombia Operations | Total | |||||||||||||||||||||
States | American | Operations | |||||||||||||||||||||||
Operations | Operations | ||||||||||||||||||||||||
Six Month Period Ended February 28, 2014 | |||||||||||||||||||||||||
Long-lived assets (other than deferred tax assets) as previously reported | $ | 13,087 | $ | 257,053 | $ | 115,316 | $ | 87,295 | $ | 472,751 | |||||||||||||||
Reclassifications to long-lived assets | 65 | 965 | — | 767 | 1,797 | ||||||||||||||||||||
Long-lived assets (other than deferred tax assets) as currently reported | $ | 13,152 | $ | 258,018 | $ | 115,316 | $ | 88,062 | $ | 474,548 | |||||||||||||||
Total assets as previously reported | $ | 57,377 | $ | 436,252 | $ | 218,513 | $ | 122,174 | $ | 834,316 | |||||||||||||||
Reclassifications to total assets | — | 72 | — | — | 72 | ||||||||||||||||||||
Total assets as currently reported | $ | 57,377 | $ | 436,324 | $ | 218,513 | $ | 122,174 | $ | 834,388 | |||||||||||||||
As of August 31, 2014 | |||||||||||||||||||||||||
Long-lived assets (other than deferred tax assets) as previously reported | $ | 16,488 | $ | 265,950 | $ | 113,134 | $ | 130,330 | $ | 525,902 | |||||||||||||||
Reclassifications to long-lived assets | 96 | 2,096 | — | 970 | 3,162 | ||||||||||||||||||||
Long-lived assets (other than deferred tax assets) as currently reported | $ | 16,584 | $ | 268,046 | $ | 113,134 | $ | 131,300 | $ | 529,064 | |||||||||||||||
Total assets as previously reported | $ | 91,190 | $ | 457,325 | $ | 223,251 | $ | 168,452 | $ | 940,218 | |||||||||||||||
Reclassifications to total assets | (15 | ) | 70 | — | (2,203 | ) | (2,148 | ) | |||||||||||||||||
Total assets as currently reported | $ | 91,175 | $ | 457,395 | $ | 223,251 | $ | 166,249 | $ | 938,070 | |||||||||||||||
The following tables summarize by segment certain revenues, operating costs and balance sheet items (in thousands): | |||||||||||||||||||||||||
United | Central | Caribbean | Colombia Operations | Reconciling Items(1) | Total | ||||||||||||||||||||
States | American | Operations | |||||||||||||||||||||||
Operations | Operations | ||||||||||||||||||||||||
Three Month Period Ended February 28, 2015 | |||||||||||||||||||||||||
Revenue from external customers | $ | 6,235 | $ | 426,226 | $ | 220,225 | 97,610 | $ | 750,296 | ||||||||||||||||
Intersegment revenues | 259,611 | — | 1,507 | — | (261,118 | ) | — | ||||||||||||||||||
Depreciation and amortization | 545 | 3,698 | 2,451 | 1,942 | 8,636 | ||||||||||||||||||||
Operating income | 7,811 | 37,122 | 13,408 | (844 | ) | (15,789 | ) | 41,708 | |||||||||||||||||
Net income | 3,619 | 28,846 | 11,579 | (3,420 | ) | (15,789 | ) | 24,835 | |||||||||||||||||
Capital expenditures, net | 1,332 | 8,425 | 1,666 | 2,827 | 14,250 | ||||||||||||||||||||
Six Month Period Ended February 28, 2015 | |||||||||||||||||||||||||
Revenue from external customers | $ | 14,666 | $ | 809,390 | $ | 418,616 | $ | 163,645 | $ | — | $ | 1,406,317 | |||||||||||||
Intersegment revenues | 597,939 | — | 2,890 | — | (600,829 | ) | — | ||||||||||||||||||
Depreciation and amortization | 1,087 | 7,342 | 4,739 | 3,265 | — | 16,433 | |||||||||||||||||||
Operating income | 15,714 | 68,254 | 25,577 | (1,781 | ) | (29,771 | ) | 77,993 | |||||||||||||||||
Net income | 6,981 | 53,174 | 21,833 | (6,735 | ) | (29,771 | ) | 45,482 | |||||||||||||||||
Capital expenditures, net | (1,441 | ) | (2) | 23,231 | 4,862 | 17,218 | — | 43,870 | |||||||||||||||||
Long-lived assets (other than deferred tax assets) | 14,045 | 284,661 | 112,877 | 122,786 | — | 534,369 | |||||||||||||||||||
Goodwill | — | 31,381 | 4,688 | — | — | 36,069 | |||||||||||||||||||
Total assets | 62,021 | 492,395 | 241,096 | 190,854 | — | 986,366 | |||||||||||||||||||
Three Month Period Ended February 28, 2014 | |||||||||||||||||||||||||
Revenue from external customers | $ | 6,764 | $ | 403,087 | $ | 212,366 | 52,157 | $ | — | $ | 674,374 | ||||||||||||||
Intersegment revenues | 209,102 | — | 1,143 | — | (210,245 | ) | — | ||||||||||||||||||
Depreciation and amortization | 583 | 3,279 | 2,264 | 1,013 | — | 7,139 | |||||||||||||||||||
Operating income | 5,904 | 34,076 | 12,939 | 1,973 | (15,517 | ) | 39,375 | ||||||||||||||||||
Net income | 2,451 | 28,919 | 11,040 | 1,385 | (15,517 | ) | 28,278 | ||||||||||||||||||
Capital expenditures, net | 3,565 | 9,269 | 1,710 | 25,264 | — | 39,808 | |||||||||||||||||||
Six Month Period Ended February 28, 2014 | |||||||||||||||||||||||||
Revenue from external customers | $ | 12,485 | $ | 762,622 | $ | 404,426 | $ | 100,442 | $ | — | $ | 1,279,975 | |||||||||||||
Intersegment revenues | 514,694 | — | 2,619 | — | (517,313 | ) | — | ||||||||||||||||||
Depreciation and amortization | 1,155 | 6,107 | 4,483 | 2,048 | — | 13,793 | |||||||||||||||||||
Operating income | 12,853 | 61,163 | 22,397 | 3,473 | (28,152 | ) | 71,734 | ||||||||||||||||||
Net income | 5,517 | 50,810 | 19,340 | 2,195 | (28,152 | ) | 49,710 | ||||||||||||||||||
Capital expenditures, net | 3,139 | 22,922 | 5,663 | 26,372 | — | 58,096 | |||||||||||||||||||
Long-lived assets (other than deferred tax assets) | 13,152 | 258,018 | 115,316 | 88,062 | — | 474,548 | |||||||||||||||||||
Goodwill | — | 31,530 | 4,791 | — | — | 36,321 | |||||||||||||||||||
Total assets | 57,377 | 436,324 | 218,513 | 122,174 | — | 834,388 | |||||||||||||||||||
As of August 31, 2014 | |||||||||||||||||||||||||
Long-lived assets (other than deferred tax assets) | $ | 16,584 | $ | 268,046 | $ | 113,134 | $ | 131,300 | $ | — | $ | 529,064 | |||||||||||||
Goodwill | — | 31,383 | 4,725 | — | — | 36,108 | |||||||||||||||||||
Total assets | 91,175 | 457,395 | 223,251 | 166,249 | — | 938,070 | |||||||||||||||||||
(1) | The reconciling items reflect the amount eliminated on consolidation of intersegment transactions. | ||||||||||||||||||||||||
(2) | The decrease in capital expenditures is a result of the transfers of capital assets from this segment to other segments. |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Feb. 28, 2015 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS |
The Company has evaluated all events subsequent to the balance sheet date of February 28, 2015 through the date of issuance of these consolidated financial statements and have determined that, except as set forth below, there are no subsequent events that require disclosure. | |
Financing Transactions | |
On March 26, 2015, the Company's Honduras subsidiary paid down the outstanding principal balance of 179.3 million Lempiras, approximately US $8.2 million of the loan agreement entered into by the subsidiary on March 7, 2014 with Banco de America Central Honduras, S.A. The original agreement established a loan facility of 286.0 million Lempiras, approximately US$13.7 million. The interest rate was variable set a a minimum of 12.5% (12.75% at the time of pay-off). The loan term was for ten years with quarterly interest and principal payments, subject to a 24-month grace period on principal payments. The subsidiary has paid down this loan, and this loan facility has terminated. | |
On March 24, 2015, the Company's Honduras subsidiary entered into a loan agreement with Citibank, N.A. The agreement establishes a credit facility for $8.5 million with a variable interest rate of three-month LIBOR plus 3.25%. The loan term is for five years with quarterly interest and principal payments. This loan is secured by assets of the Company's Honduras subsidiary. The loan was funded at execution. | |
Cross-currency interest rate swap derivative transactions that qualify for derivative hedge accounting | |
On March 23, 2015, the Company's Honduras subsidiary entered into a cross-currency interest rate swap agreement with Citibank, N.A. for a notional amount of $8.5 million. The cross-currency interest rate swap agreement converts the Honduras subsidiary foreign currency United States dollar denominated principal and floating interest payments on the $8.5 million long-term quarterly amortizing debt with Citibank to functional currency principal and fixed interest payments during the life of the hedging instrument. As changes in foreign exchange and interest rates impact the future cash flow of principal and interest payments, the hedge is intended to offset changes in cash flows attributable to interest rate and foreign exchange movements. The hedged loan has a variable interest rate of three-month LIBOR plus 3.25%. Under the cross-currency interest rate swap agreement, the Company will receive variable U.S. dollar principal and interest based on the three-month LIBOR rate plus 3.25% on a quarterly amortizing notional amount of US $8.5 million and pay fixed interest of 10.75% on a quarterly amortizing notional amount of 185.6 million Honduran Lempiras for a term of approximately five years (effective date of March 24,2015 through March 20, 2020). The LIBOR reset dates for the hedged long-term debt and the cross-currency interest rate swap occur on the twenty fourth day of March, June, September, and December beginning on June 24, 2015. | |
Non-deliverable forward foreign-exchange contracts | |
The Company's Colombia subsidiary has entered into forward exchange contracts for approximately $8.0 million with settlement dates of April 2015. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended | ||||||||||||||||
Feb. 28, 2015 | |||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |||||||||||||||||
Principles of Consolidations | Principles of Consolidation – The interim consolidated financial statements of the Company included herein include the assets, liabilities and results of operations of the Company’s wholly owned subsidiaries and the Company's investment in, and the Company's share of the income (loss) of, joint ventures recorded under the equity method. All significant inter-company accounts and transactions have been eliminated in consolidation. The interim consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the SEC, and reflect all adjustments (consisting of normal recurring adjustments) that are, in the opinion of management, necessary to fairly present the financial position, results of operations, and cash flows for the periods presented. The results for interim periods are not necessarily indicative of the results for the full year. As of February 28, 2015, all of the Company's subsidiaries were wholly owned. Additionally, the Company's ownership interest in real estate development joint ventures as of February 28, 2015 is listed below: | ||||||||||||||||
Real Estate Development Joint Ventures | Countries | Ownership | Basis of Presentation | ||||||||||||||
GolfPark Plaza, S.A. | Panama | 50 | % | Equity(1) | |||||||||||||
Price Plaza Alajuela PPA, S.A. | Costa Rica | 50 | % | Equity(1) | |||||||||||||
-1 | Joint venture interests are recorded as investment in unconsolidated affiliates on the consolidated balance sheets. | ||||||||||||||||
Use of Estimates | Use of Estimates – The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. | ||||||||||||||||
Variable Interest Entities | Variable Interest Entities – The Company reviews and determines at the start of each arrangement, or subsequently if a reconsideration event occurs, whether any of its investments in joint ventures are a Variable Interest Entity (“VIE”) and whether it must consolidate a VIE and/or disclose information about its involvement in a VIE. The Company has determined that the joint ventures for GolfPark Plaza (Panama) and Price Plaza Alajuela (Costa Rica) are VIEs. The Company has determined that it is not the primary beneficiary of the VIEs and, therefore, has accounted for these entities under the equity method. | ||||||||||||||||
Cash and Cash Equivalents | Cash and Cash Equivalents – Cash and cash equivalents represent cash and short-term investments with maturities of three months or less when purchased and proceeds due from credit and debit card transactions, which are generally settled within a few days of the underlying transaction. | ||||||||||||||||
Restricted Cash | Restricted Cash – The changes in restricted cash are disclosed within the consolidated statement of cash flows based on the nature of the restriction. The following table summarizes the restricted cash reported by the Company (in thousands): | ||||||||||||||||
February 28, 2015 | August 31, 2014 | ||||||||||||||||
Short-term restricted cash: | |||||||||||||||||
Restricted cash for Honduras loan | $ | — | $ | 1,200 | |||||||||||||
Restricted cash for land purchase option agreements | 1,443 | 1,095 | |||||||||||||||
Other short-term restricted cash (1) | 57 | 58 | |||||||||||||||
Total short-term restricted cash | $ | 1,500 | $ | 2,353 | |||||||||||||
Long-term restricted cash: | |||||||||||||||||
Restricted cash for Honduras loan | $ | — | $ | 1,720 | |||||||||||||
Restricted cash for Colombia bank loans | 24,000 | 24,000 | |||||||||||||||
Other long-term restricted cash (1) | 1,428 | 1,293 | |||||||||||||||
Total long-term restricted cash | $ | 25,428 | $ | 27,013 | |||||||||||||
Total restricted cash | $ | 26,928 | $ | 29,366 | |||||||||||||
-1 | Other short-term and long-term restricted cash consists mainly of cash deposits held within banking institutions in compliance with federal regulatory requirements in Costa Rica and Panama. | ||||||||||||||||
Tax Receivable | Tax Receivables - The Company pays Value Added Tax (“VAT”) or similar taxes (“input VAT”), income taxes, and other taxes within the normal course of its business in most of the countries in which it operates related to the procurement of merchandise and/or services it acquires and/or on estimated sales and taxable income. The Company also collects VAT or similar taxes on behalf of the government (“output VAT”) for merchandise and/or services it sells. If the output VAT exceeds the input VAT, then the difference is remitted to the government, usually on a monthly basis. If the input VAT exceeds the output VAT, this creates a VAT receivable. In some countries where the Company operates, the governments have implemented additional collection procedures, such as requiring credit card processors to remit a portion of sales processed via credit card directly to the government as advance payments of VAT and/or income tax. In the case of VAT these procedures alter the natural offset of input and output VAT and generally leave the Company with a net VAT receivable, forcing the Company to process significant refund claims on a recurring basis. With respect to income taxes paid, if the estimated income taxes paid or withheld exceed the actual income tax due this creates an income tax receivable. The Company either requests a refund of these tax receivables or applies the balance to expected future tax payments. These refund or offset processes can take anywhere from several months to several years to complete. | ||||||||||||||||
In most countries where the Company operates, the tax refund process is defined and structured with regular refunds or offsets. However, in two countries the respective governments have alleged that there is no defined process in the law to allow them to refund VAT receivables. The Company together with its tax and legal advisers is currently appealing these interpretations in court and expects to prevail. In some of these countries, where there is recent favorable jurisprudence, the government has recently begun an audit to verify the amount of the respective VAT receivables as a required precursor to any refund. The balance of the VAT receivable in these countries was $6.3 million and $5.7 million as of February 28, 2015 and August 31, 2014, respectively. In another country in which we have warehouse clubs, beginning in fiscal year 2015, a new minimum income tax mechanism took effect, which requires the Company to pay taxes based on a factor of sales rather than income. This will likely result in the Company having to make income tax payments substantially in excess of those due based on taxable income. The current rules (which the Company has appealed) do not allow the Company to obtain a refund or offset this excess income tax against other taxes. Due to the timing of these rules, as of February 28, 2015, the Company currently has an outstanding income tax receivable of $178,000 in this country; and there were deferred tax assets of approximately $1.1 million outstanding as of that date. The Company has not placed any type of allowance on the recoverability of these tax receivables or deferred income taxes because the Company believes that it has a more likely than not chance to succeed in its appeal on the matter. | |||||||||||||||||
. | |||||||||||||||||
The Company's policy for classification and presentation of VAT receivables, income tax receivables and other tax receivables is as follows: | |||||||||||||||||
•Short-term VAT and Income tax receivables, recorded as Other current assets: This classification is used for any countries where the Company's subsidiary has generally demonstrated the ability to recover the VAT or income tax receivable within one year. The Company also classifies as short-term any approved refunds or credit notes to the extent that the Company expects to receive the refund or use the credit notes within one year. | |||||||||||||||||
•Long-term VAT and Income tax receivables, recorded as Other non-current assets: This classification is used for amounts not approved for refund or credit in countries where the Company's subsidiary has not demonstrated the ability to obtain refunds within one year and/or for amounts which are subject to outstanding disputes. An allowance is provided against VAT and income tax receivable balances in dispute when the Company does not expect to eventually prevail in its recovery. | |||||||||||||||||
The following table summarizes the VAT receivables reported by the Company (in thousands): | |||||||||||||||||
February 28, 2015 | 31-Aug-14 | ||||||||||||||||
Prepaid expenses and other current assets | $ | 8,013 | $ | 3,565 | |||||||||||||
Other non-current assets | 19,035 | 17,115 | |||||||||||||||
Total amount of VAT receivable reported | $ | 27,048 | $ | 20,680 | |||||||||||||
The following table summarizes the Income tax receivables reported by the Company (in thousands): | |||||||||||||||||
February 28, 2015 | 31-Aug-14 | ||||||||||||||||
Prepaid expenses and other current assets | $ | 2,803 | $ | 1,916 | |||||||||||||
Other non-current assets | 7,633 | 7,218 | |||||||||||||||
Total amount of income tax receivable reported | $ | 10,436 | $ | 9,134 | |||||||||||||
Lease, Policy | Lease Accounting – Certain of the Company's operating leases where the Company is the lessee (see Revenue Recognition Policy for lessor accounting) provide for minimum annual payments that increase over the expected life of the lease. The aggregate minimum annual payments are expensed on the straight-line basis beginning when the Company takes possession of the property and extending over the expected term of the related lease including renewal options when the exercise of the option is reasonably assured as an economic penalty may be incurred if the option is not exercised. The amount by which straight-line rent exceeds actual lease payment requirements in the early years of the leases is accrued as deferred rent and reduced in later years when the actual cash payment requirements exceed the straight-line expense. The Company also accounts in its straight-line computation for the effect of any “rental holidays” and lessor-paid tenant improvements. In addition to the minimum annual payments, in certain locations, the Company pays additional contingent rent based on a contractually stipulated percentage of sales. | ||||||||||||||||
Inventory, Policy | Merchandise Inventories - Merchandise inventories, which include merchandise for resale, are valued at the lower of cost (average cost) or market. The Company provides for estimated inventory losses and obsolescence between physical inventory counts on the basis of a percentage of sales. The provision is adjusted periodically to reflect the trend of actual physical inventory count results, with physical inventories occurring primarily in the second and fourth fiscal quarters. In addition, the Company may be required to take markdowns below the carrying cost of certain inventory to expedite the sale of such merchandise. | ||||||||||||||||
Fair Value Measurements | Fair Value Measurements – The Company measures the fair value for all financial and nonfinancial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring or nonrecurring basis. The fair value of an asset is the price at which the asset could be sold in an orderly transaction between unrelated, knowledgeable and willing parties able to engage in the transaction. A liability’s fair value is defined as the amount that would be paid to transfer the liability to a new obliger in a transaction between such parties, not the amount that would be paid to settle the liability with the creditor. | ||||||||||||||||
The Company has established a three-tier fair value hierarchy, which prioritizes the inputs used in measuring and revaluing fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. The Company was not required to revalue any assets or liabilities utilizing Level 1 or Level 3 inputs at the balance sheet dates. The Company's Level 2 assets and liabilities revalued at the balance sheet dates, on a recurring basis, primarily included cash flow hedges (interest rate swaps and cross-currency interest rate swaps) and forward foreign exchange contracts. In addition, the Company utilizes Level 2 inputs in determining the fair value of long-term debt. The Company has elected not to revalue long-term debt because this debt will be settled at the carrying value and not at the fair market value. The Company did not make any significant transfers in and out of Level 1 and Level 2 fair value tiers during the periods reported on herein. | |||||||||||||||||
Non-financial assets and liabilities are revalued and recognized at fair value subsequent to initial recognition when there is evidence of impairment. For the periods reported, no impairment of such non-financial assets was recorded. | |||||||||||||||||
The disclosure of fair value of certain financial assets and liabilities recorded at cost is as follows: | |||||||||||||||||
Cash and cash equivalents: The carrying value approximates fair value due to the short maturity of these instruments. | |||||||||||||||||
Short-term restricted cash: The carrying value approximates fair value due to the short maturity of these instruments. | |||||||||||||||||
Long-term restricted cash: Long-term restricted cash primarily consists of auto renewable 3-12 month certificates of deposit, which are held as collateral on our long-term debt. The carrying value approximates fair value due to the short maturity of the underlying certificates of deposit. | |||||||||||||||||
Accounts receivable: The carrying value approximates fair value due to the short maturity of these accounts. | |||||||||||||||||
Short-term debt: The carrying value approximates fair value due to the short maturity of these instruments. | |||||||||||||||||
Long-term debt: The fair value of debt is generally measured using a discounted cash flow analysis based on current market interest rates for similar types of financial instruments. These inputs are not quoted prices in active markets but they are either directly or indirectly observable; therefore, they are classified as Level 2 inputs. The carrying value and fair value of the Company’s debt as of February 28, 2015 and August 31, 2014 is as follows (in thousands): | |||||||||||||||||
February 28, 2015 | August 31, 2014 | ||||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||||
Long-term debt, including current portion | $ | 105,120 | $ | 105,600 | $ | 91,439 | $ | 92,893 | |||||||||
Derivative Instruments and Hedging Activities | Derivatives Instruments and Hedging Activities - The Company uses derivative financial instruments for hedging and non-trading purposes to manage its exposure to changes in interest and currency exchange rates. In using derivative financial instruments for the purpose of hedging the Company’s exposure to interest and currency exchange rate risks, the contractual terms of a hedged instrument closely mirror those of the hedged item, providing a high degree of risk reduction and correlation. Contracts that are effective at meeting the risk reduction and correlation criteria (effective hedge) are recorded using hedge accounting. If a derivative financial instrument is an effective hedge, changes in the fair value of the instrument will be offset in accumulated other comprehensive income (loss) until the hedged item completes its contractual term. If any portion of the hedge is deemed ineffective, the change in fair value of the hedged assets or liabilities will be immediately recognized in earnings during the period. Instruments that do not meet the criteria for hedge accounting, or contracts for which the Company has not elected hedge accounting, are valued at fair value with unrealized gains or losses reported in earnings during the period of the change. Valuation techniques utilized in the fair value measurement of assets and liabilities presented on the Company’s consolidated balance sheets were not changed from previous practice during the reporting period. The Company seeks to manage counterparty risk associated with these contracts by limiting transactions to counterparties with which the Company has an established banking relationship. There can be no assurance, however, that this practice effectively mitigates counterparty risk. | ||||||||||||||||
Cash Flow Instruments. The Company is a party to receive floating interest rate, pay fixed-rate interest rate swaps to hedge the interest rate risk of certain U.S. dollar denominated debt within its international subsidiaries. The swaps are designated as cash flow hedges of interest expense risk. These instruments are considered effective hedges and are recorded using hedge accounting. The Company is also a party to receive variable interest rate, pay fixed interest rate cross-currency interest rate swaps to hedge the interest rate and currency exposure associated with the expected payments of principal and interest of U.S. denominated debt within its international subsidiaries whose functional currency is other than the U.S dollar. The swaps are designated as cash flow hedges of the currency risk related to payments on the U.S. denominated debt. These instruments are also considered to be effective hedges and are recorded using hedge accounting. Under cash flow hedging, the effective portion of the fair value of the derivative, calculated as the net present value of the future cash flows, is deferred on the consolidated balance sheets in accumulated other comprehensive loss. If any portion of an interest rate swap is determined to be an ineffective hedge, the gains or losses from changes in fair value would be recorded directly in the consolidated statements of income. Amounts recorded in accumulated other comprehensive loss are released to earnings in the same period that the hedged transaction impacts consolidated earnings. See Note 9 - Derivative Instruments and Hedging Activities for information on the fair value of interest rate swaps and cross-currency interest rate swaps as of February 28, 2015 and August 31, 2014. | |||||||||||||||||
Fair Value Instruments. The Company is exposed to foreign-currency exchange rate fluctuations in the normal course of business. The Company is also exposed to foreign-currency exchange rate fluctuations on U.S. dollar denominated liabilities within its international subsidiaries whose functional currency is other than the U.S. dollar. The Company manages these fluctuations, in part, through the use of non-deliverable forward foreign-exchange contracts that are intended to offset changes in cash flow attributable to currency exchange movements. The contracts are intended primarily to economically address exposure to U.S. dollar merchandise inventory expenditures made by the Company’s international subsidiaries whose functional currency is other than the U.S. dollar. Currently, these contracts are treated for accounting purposes as fair value instruments and do not qualify for derivative hedge accounting, and as such the Company does not apply derivative hedge accounting to record these transactions. As a result, these contracts are valued at fair value with unrealized gains or losses reported in earnings during the period of the change. The Company seeks to mitigate foreign-currency exchange-rate risk with the use of these contracts and does not intend to engage in speculative transactions. These contracts do not contain any credit-risk-related contingent features and are limited to less than one year in duration. See Note 9 - Derivative Instruments and Hedging Activities for information on the fair value of open, unsettled forward foreign-exchange contracts as of February 28, 2015 and August 31, 2014. | |||||||||||||||||
The following tables summarize financial assets and liabilities measured and recorded at fair value on a recurring basis in the Company’s consolidated balance sheet as of February 28, 2015 and August 31, 2014 (in thousands) for derivatives that qualify for hedge accounting: | |||||||||||||||||
Assets and Liabilities as of February 28, 2015 | Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | Total | |||||||||||||
(Level 1) | (Level 2) | (Level 3) | |||||||||||||||
Other non-current assets - (Cross-currency interest rate swaps) | — | 6,996 | — | 6,996 | |||||||||||||
Other long-term liabilities – (Interest rate swaps) | — | (340 | ) | — | (340 | ) | |||||||||||
Other long-term liabilities – (Cross-currency interest rate swaps) | — | (246 | ) | — | (246 | ) | |||||||||||
Total | $ | — | $ | 6,410 | $ | — | $ | 6,410 | |||||||||
Assets and Liabilities as of August 31, 2014 | Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | Total | |||||||||||||
(Level 1) | (Level 2) | (Level 3) | |||||||||||||||
Prepaid expenses and other current assets (Cross-currency interest rate swaps) | $ | — | $ | 495 | $ | — | $ | 495 | |||||||||
Other non-current assets - (Cross-currency interest rate swaps) | — | 970 | — | 970 | |||||||||||||
Other non-current assets - (Interest rate swaps) | — | 125 | — | 125 | |||||||||||||
Total | $ | — | $ | 1,590 | $ | — | $ | 1,590 | |||||||||
The following tables summarize financial assets and liabilities measured and recorded at fair value on a recurring basis in the Company’s consolidated balance sheet as of February 28, 2015 and August 31, 2014 (in thousands) for derivatives that do not qualify for hedge accounting: | |||||||||||||||||
Assets and Liabilities as of February 28, 2015 | Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | Total | |||||||||||||
(Level 1) | (Level 2) | (Level 3) | |||||||||||||||
Prepaid expenses and other current assets (Foreign currency forward contracts) | $ | — | $ | 1,064 | $ | — | $ | 1,064 | |||||||||
Other accrued expenses (Foreign currency forward contracts) | — | — | — | — | |||||||||||||
Net fair value of derivatives designated as hedging instruments that do not qualify for hedge accounting | $ | — | $ | 1,064 | $ | — | $ | 1,064 | |||||||||
Assets and Liabilities as of August 31, 2014 | Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | Total | |||||||||||||
(Level 1) | (Level 2) | (Level 3) | |||||||||||||||
Prepaid expenses and other current assets (Foreign currency forward contracts) | $ | — | $ | — | $ | — | $ | — | |||||||||
Other accrued expenses (Foreign currency forward contracts) | — | (14 | ) | — | (14 | ) | |||||||||||
Net fair value of derivatives designated as hedging instruments that do not qualify for hedge accounting | $ | — | $ | (14 | ) | $ | — | $ | (14 | ) | |||||||
Goodwill | Goodwill – The table below presents goodwill resulting from certain business combinations as of February 28, 2015 and August 31, 2014 (in thousands). The change in goodwill is a result of foreign exchange translation losses. | ||||||||||||||||
February 28, 2015 | August 31, 2014 | Change | |||||||||||||||
Goodwill | $ | 36,069 | $ | 36,108 | $ | (39 | ) | ||||||||||
The Company reviews goodwill at the entity level for impairment. The Company first reviews qualitative factors for each reporting unit, in determining if an annual goodwill test is required. If the Company's review of qualitative factors indicates a requirement for a test of goodwill impairment, the Company then will assess whether the carrying amount of a reporting unit is greater than zero and exceeds its fair value established during the Company's prior test of goodwill impairment ("established fair value"). If the carrying amount of a reporting unit at the entity level is greater than zero and its established fair value exceeds its carrying amount, goodwill of the reporting unit is considered not impaired. If either the carrying amount of the reporting unit is not greater than zero or if the carrying amount of the entity exceeds its established fair value, the Company performs a second test to determine whether goodwill has been impaired and to calculate the amount of that impairment. | |||||||||||||||||
Revenue Recognition | Revenue Recognition – The Company recognizes merchandise sales revenue when title passes to the customer. Membership income represents annual membership fees paid by the Company’s warehouse club members, which are recognized ratably over the 12-month term of the membership. Membership refunds are prorated based on the remaining term of the membership; accordingly, no refund reserve is required to be established for the periods presented. The Company recognizes and presents revenue-producing transactions on a net of value added/sales tax basis. | ||||||||||||||||
The Company began offering Platinum memberships in Costa Rica during fiscal year 2013, which provides members with a 2% rebate on most items, up to an annual maximum of $500.00. Platinum members can apply this rebate to future purchases at the warehouse club at the end of the annual membership period. The Company records this 2% rebate as a reduction of revenue at the time of the sales transaction. Accordingly, the Company has reduced warehouse sales and has accrued a liability within other accrued expenses. The rebate expires within six months of the membership renewal date. However, the Company has determined that in the absence of relevant historical experience, the Company is not able to make a reasonable estimate of rebate redemptions and accordingly has assumed a 100% redemption rate. The Company periodically reviews expired unused rebates outstanding, and the expired unused rebates are recognized as Revenues: Other income on the consolidated statements of income. | |||||||||||||||||
The Company recognizes gift certificate sales revenue when the certificates are redeemed. The outstanding gift certificates are reflected as other accrued expenses in the consolidated balance sheets. These gift certificates generally have a one-year stated expiration date from the date of issuance. However, the absence of a large volume of transactions for gift certificates impairs the Company's ability to make a reasonable estimate of the redemption levels for gift certificates. Therefore, the Company assumes a 100% redemption rate that is the equivalent of no breakage prior to expiration of the gift certificate. The Company periodically reviews unredeemed outstanding gift certificates, and the gift certificates that have expired are recognized as Revenues: Other income on the consolidated statements of income. | |||||||||||||||||
Operating leases, where the Company is the lessor, with lease payments that have fixed and determinable rent increases are recognized as revenue on a straight-line basis over the expected lease term. The Company also accounts in its straight-line computation for the effect of any "rental holidays." Contingent rental revenue is recognized as the contingent rent becomes due per the individual lease agreements. | |||||||||||||||||
Cost of Goods Sold | Cost of Goods Sold – The Company includes the cost of merchandise, food service and bakery raw materials, and one hour photo supplies in cost of goods sold. The Company also includes in cost of goods sold the external and internal distribution and handling costs for supplying merchandise, raw materials and supplies to the warehouse clubs. External costs include inbound freight, duties, drayage, fees, insurance, and non-recoverable value-added tax related to inventory shrink, spoilage and damage. Internal costs include payroll and related costs, utilities, consumable supplies, repair and maintenance, rent expense, building and equipment depreciation at its distribution facilities and payroll and other direct costs for in-store demonstrations. | ||||||||||||||||
Vendor consideration consists primarily of volume rebates, time-limited product promotions, slotting fees, demonstration reimbursements and prompt payment discounts. Volume rebates that are not threshold-based are incorporated into the unit cost of merchandise reducing the inventory cost and cost of goods sold. Volume rebates that are threshold-based are recorded as a reduction to cost of good sold when the Company achieves established purchase levels that are confirmed by the vendor in writing or upon receipt of funds. On a quarterly basis, the Company calculates the amount of rebates recorded in cost of goods sold that relates to inventory on hand and this amount is reclassified as a reduction to inventory. Product promotions are generally linked to coupons that provide for reimbursement to the Company from vendor rebates for the product being promoted. Slotting fees are related to consideration received by the Company from vendors for preferential "end cap" placement of the vendor's products within the warehouse club. Demonstration reimbursements are related to consideration received by the Company from vendors for the in-store promotion of the vendors' products. The Company records the reduction in cost of goods sold on a transactional basis for these programs. Prompt payment discounts are taken in substantially all cases, and therefore, are applied directly to reduce the acquisition cost of the related inventory, with the resulting effect recorded to cost of goods sold when the inventory is sold. | |||||||||||||||||
Selling, General and Administrative | Selling, General and Administrative – Selling, general and administrative costs are comprised primarily of expenses associated with warehouse operations. Warehouse operations include the operating costs of the Company's warehouse clubs, including all payroll and related costs, utilities, consumable supplies, repair and maintenance, rent expense, building and equipment depreciation, and bank and credit card processing fees. Also included in selling, general and administrative expenses are the payroll and related costs for the Company's U.S. and regional purchasing and management centers. | ||||||||||||||||
Pre-Opening Costs | Pre-Opening Costs – The Company expenses pre-opening costs (the costs of start-up activities, including organization costs and rent) as incurred. | ||||||||||||||||
Asset Impairment Costs | Asset Impairment Costs – The Company periodically evaluates its long-lived assets for indicators of impairment. Management's judgments are based on market and operational conditions at the time of the evaluation and can include management's best estimate of future business activity. These periodic evaluations could cause management to conclude that impairment factors exist, requiring an adjustment of these assets to their then-current fair value. Future business conditions and/or activity could differ materially from the projections made by management causing the need for additional impairment charges. | ||||||||||||||||
Contingencies and Litigation | Contingencies and Litigation – The Company records and reserves for loss contingencies if (a) information available prior to issuance of the consolidated financial statements indicates that it is probable that an asset had been impaired or a liability had been incurred at the date of the consolidated financial statements and (b) the amount of loss can be reasonably estimated. If one or both criteria for accrual are not met, but there is at least a reasonable possibility that a loss will occur, the Company does not record and reserve for a loss contingency but describes the contingency within a note and provides detail, when possible, of the estimated potential loss or range of loss. If an estimate cannot be made, a statement to that effect is made. | ||||||||||||||||
Foreign Currency Transaction | Foreign Currency Translation – The assets and liabilities of the Company’s foreign operations are translated to U.S. dollars when the functional currency in the Company’s international subsidiaries is the local currency and not U.S. dollars. Assets and liabilities of these foreign subsidiaries are translated to U.S. dollars at the exchange rate on the balance sheet date, and revenue, costs and expenses are translated at average rates of exchange in effect during the period. The corresponding translation gains and losses are recorded as a component of accumulated other comprehensive income or loss. These adjustments will affect net income upon the sale or liquidation of the underlying investment. Monetary assets and liabilities denominated in currencies other than the functional currency of the respective entity (primarily U.S. dollars) are revalued to the functional currency using the exchange rate on the balance sheet date. These foreign exchange transaction gains (losses), including transactions recorded involving these monetary assets and liabilities, are recorded as Other income (expense) in the consolidated statements of income. The following table summarizes the amounts recorded for the three and six month period ending February 28, 2015 and 2014 (in thousands): | ||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
28-Feb-15 | 28-Feb-14 | 28-Feb-15 | 28-Feb-14 | ||||||||||||||
Currency gain (loss) | $ | (1,659 | ) | $ | 712 | $ | (4,291 | ) | $ | 1,023 | |||||||
Income Taxes | Income Taxes –The Company accounts for income taxes using the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributed to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences and carry-forwards are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established when necessary to reduce deferred tax assets to amounts expected to be realized. | ||||||||||||||||
The Company and its subsidiaries are required to file federal and state income tax returns in the United States and various other tax returns in foreign jurisdictions. The preparation of these tax returns requires the Company to interpret the applicable tax laws and regulations in effect in such jurisdictions, which could affect the amount of tax paid by the Company. The Company, in consultation with its tax advisors, bases its tax returns on interpretations that are believed to be reasonable under the circumstances. The tax returns, however, are subject to routine reviews by the various federal, state and foreign taxing authorities in the jurisdictions in which the Company or one of its subsidiaries files tax returns. As part of these reviews, a taxing authority may disagree with respect to the income tax positions taken by the Company (“uncertain tax positions”) and, therefore, require the Company or one of its subsidiaries to pay additional taxes. | |||||||||||||||||
The Company accrues an amount for its estimate of probable additional income tax liability. In certain cases, the impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant tax authority. An uncertain income tax position will not be recognized if it has less than 50% likelihood of being sustained. This requires significant judgment, the use of estimates, and the interpretation and application of complex tax laws. When facts and circumstances change, the Company reassesses these probabilities and records any changes in the consolidated financial statements as appropriate. There were no material changes in the Company's uncertain income tax positions for the periods ended on February 28, 2015 and August 31, 2014. However, during the fiscal year 2014, the Company was required to make payments of $4.2 million to the governments in two countries with respect to various income tax cases that it is currently appealing, but in which the Company believes it will eventually prevail. These amounts have been recorded in the balance sheet as Other non-current assets, as the Company considers this a payment on account and expects to get a refund thereof upon eventually prevailing on these cases, but is unsure of the timing thereof. Furthermore, during the first quarter of fiscal year 2015, one of the Company’s subsidiaries received provisional assessments claiming $2.6 million of taxes, penalties and interest related to withholding taxes on certain charges for services rendered by the Company. In addition, this subsidiary received provisional assessments totaling $5.2 million for lack of deductibility of the underlying service charges due to the lack of withholding. Based on the Company's interpretation of local law, rulings and jurisprudence (including Supreme Court precedents with respect to the deductibility assessment), the Company expects to prevail in both instances and has not recorded a provision for these assessments. | |||||||||||||||||
The Company has not provided for U.S. deferred taxes on cumulative non-U.S. undistributed earnings as such earnings are deemed by the Company to be indefinitely reinvested. It is not practicable to determine the U.S. federal income tax liability that would be associated with such earnings because of the complexity of the computation. | |||||||||||||||||
The following tables present a reconciliation of the effective tax rate for the periods presented: | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
28-Feb-15 | 28-Feb-14 | 28-Feb-15 | 28-Feb-14 | ||||||||||||||
Federal tax provision at statutory rates | 35 | % | 35 | % | 35 | % | 35 | % | |||||||||
State taxes, net of federal benefit | 0.3 | 0.2 | 0.4 | 0.3 | |||||||||||||
Differences in foreign tax rates | (5.0 | ) | (5.3 | ) | (4.8 | ) | (4.8 | ) | |||||||||
Permanent items and other adjustments | 3.8 | (1.7 | ) | 3.5 | (0.2 | ) | |||||||||||
Increase (decrease) in foreign valuation allowance | 1.2 | — | 2 | (0.1 | ) | ||||||||||||
Provision for income taxes | 35.3 | % | 28.2 | % | 36.1 | % | 30.2 | % | |||||||||
The variance in the effective tax rate for the three-month period ended on February 28, 2015 compared to the same period of the prior year was primarily attributable to the unfavorable impact of 4.2% resulting from an increased taxable loss incurred in the Company’s Colombia subsidiary for which no tax benefit was recognized net of adjustment to valuation allowance and the non-recurrence of a favorable impact of 2.0% in the prior period from the tax effect of changes in foreign currency value. | |||||||||||||||||
The variance in the effective tax rate for the six month period ended February 28, 2015 compared to the prior year was primarily attributable to the unfavorable impact of 4.7% resulting from an increased taxable loss incurred in the Company’s Colombia subsidiary for which no tax benefit was recognized net of adjustment to valuation allowance and the non-recurrence of a favorable impact of 1.1% in the prior period from the tax effect of changes in foreign currency value. | |||||||||||||||||
Recent Accounting Pronouncements | Recent Accounting Pronouncements | ||||||||||||||||
FASB ASC 606 ASU 2014-09 - Revenue from contracts with customers. | |||||||||||||||||
In May 2014, the FASB issued amended guidance on contracts with customers to transfer goods or services or contracts for the transfer of nonfinancial assets, unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). The guidance requires an entity to recognize revenue on contracts with customers relating to the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance requires that an entity depict the consideration by applying the following steps: | |||||||||||||||||
Step 1: Identify the contract(s) with a customer. | |||||||||||||||||
Step 2: Identify the performance obligations in the contract. | |||||||||||||||||
Step 3: Determine the transaction price. | |||||||||||||||||
Step 4: Allocate the transaction price to the performance obligations in the contract. | |||||||||||||||||
Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation. | |||||||||||||||||
The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. This amendment is to be either retrospectively adopted to each prior reporting period presented or retrospectively with the cumulative effect of initially applying this ASU recognized at the date of initial application. Adoption of this guidance is not expected to have a material impact on the Company's consolidated financial statements. |
COMPANY_OVERVIEW_AND_BASIS_OF_1
COMPANY OVERVIEW AND BASIS OF PRESENTATION (Tables) | 6 Months Ended | ||||||||||||||||||||
Feb. 28, 2015 | |||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||
Schedule of Error Corrections and Prior Period Adjustments | Reclassifications to consolidated balance sheet recorded during fiscal year 2015 for fiscal year 2014 - Certain reclassifications to the consolidated balance sheet have been made to prior fiscal year amounts to conform to the presentation in the current fiscal year. These reclassifications relate to the presentation of certain income tax receivables (see note 2). The table below summarizes these reclassifications. | ||||||||||||||||||||
August 31, 2014 balance sheet line item as previously reported | Amount reclassified Dr/(Cr) | August 31, 2014 balance sheet line item as currently reported | |||||||||||||||||||
Prepaid expenses and other current assets | 22,570 | $ | (5,310 | ) | 17,260 | ||||||||||||||||
Other non-current assets | 27,593 | 3,162 | 30,755 | ||||||||||||||||||
Accounts payable | (225,761 | ) | 2,202 | (223,559 | ) | ||||||||||||||||
Income taxes payable | (7,664 | ) | (54 | ) | (7,718 | ) | |||||||||||||||
Net amount of reclassifications | $ | — | |||||||||||||||||||
The following tables summarize the impact of these reclassifications to the amounts reported for each segment (in thousands): | |||||||||||||||||||||
United | Central | Caribbean | Colombia Operations | Total | |||||||||||||||||
States | American | Operations | |||||||||||||||||||
Operations | Operations | ||||||||||||||||||||
Six Month Period Ended February 28, 2014 | |||||||||||||||||||||
Long-lived assets (other than deferred tax assets) as previously reported | $ | 13,087 | $ | 257,053 | $ | 115,316 | $ | 87,295 | $ | 472,751 | |||||||||||
Reclassifications to long-lived assets | 65 | 965 | — | 767 | 1,797 | ||||||||||||||||
Long-lived assets (other than deferred tax assets) as currently reported | $ | 13,152 | $ | 258,018 | $ | 115,316 | $ | 88,062 | $ | 474,548 | |||||||||||
Total assets as previously reported | $ | 57,377 | $ | 436,252 | $ | 218,513 | $ | 122,174 | $ | 834,316 | |||||||||||
Reclassifications to total assets | — | 72 | — | — | 72 | ||||||||||||||||
Total assets as currently reported | $ | 57,377 | $ | 436,324 | $ | 218,513 | $ | 122,174 | $ | 834,388 | |||||||||||
As of August 31, 2014 | |||||||||||||||||||||
Long-lived assets (other than deferred tax assets) as previously reported | $ | 16,488 | $ | 265,950 | $ | 113,134 | $ | 130,330 | $ | 525,902 | |||||||||||
Reclassifications to long-lived assets | 96 | 2,096 | — | 970 | 3,162 | ||||||||||||||||
Long-lived assets (other than deferred tax assets) as currently reported | $ | 16,584 | $ | 268,046 | $ | 113,134 | $ | 131,300 | $ | 529,064 | |||||||||||
Total assets as previously reported | $ | 91,190 | $ | 457,325 | $ | 223,251 | $ | 168,452 | $ | 940,218 | |||||||||||
Reclassifications to total assets | (15 | ) | 70 | — | (2,203 | ) | (2,148 | ) | |||||||||||||
Total assets as currently reported | $ | 91,175 | $ | 457,395 | $ | 223,251 | $ | 166,249 | $ | 938,070 | |||||||||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended | ||||||||||||||||
Feb. 28, 2015 | |||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |||||||||||||||||
Equity Method Investments and Joint Ventures Disclosure [Text Block] | Additionally, the Company's ownership interest in real estate development joint ventures as of February 28, 2015 is listed below: | ||||||||||||||||
Real Estate Development Joint Ventures | Countries | Ownership | Basis of Presentation | ||||||||||||||
GolfPark Plaza, S.A. | Panama | 50 | % | Equity(1) | |||||||||||||
Price Plaza Alajuela PPA, S.A. | Costa Rica | 50 | % | Equity(1) | |||||||||||||
-1 | Joint venture interests are recorded as investment in unconsolidated affiliates on the consolidated balance sheets. | ||||||||||||||||
Schedule of Restricted Cash and Cash Equivalents [Table Text Block] | The following table summarizes the restricted cash reported by the Company (in thousands): | ||||||||||||||||
February 28, 2015 | August 31, 2014 | ||||||||||||||||
Short-term restricted cash: | |||||||||||||||||
Restricted cash for Honduras loan | $ | — | $ | 1,200 | |||||||||||||
Restricted cash for land purchase option agreements | 1,443 | 1,095 | |||||||||||||||
Other short-term restricted cash (1) | 57 | 58 | |||||||||||||||
Total short-term restricted cash | $ | 1,500 | $ | 2,353 | |||||||||||||
Long-term restricted cash: | |||||||||||||||||
Restricted cash for Honduras loan | $ | — | $ | 1,720 | |||||||||||||
Restricted cash for Colombia bank loans | 24,000 | 24,000 | |||||||||||||||
Other long-term restricted cash (1) | 1,428 | 1,293 | |||||||||||||||
Total long-term restricted cash | $ | 25,428 | $ | 27,013 | |||||||||||||
Total restricted cash | $ | 26,928 | $ | 29,366 | |||||||||||||
-1 | Other short-term and long-term restricted cash consists mainly of cash deposits held within banking institutions in compliance with federal regulatory requirements in Costa Rica and Panama. | ||||||||||||||||
VAT Receivables [Table Text Block] | The following table summarizes the VAT receivables reported by the Company (in thousands): | ||||||||||||||||
February 28, 2015 | 31-Aug-14 | ||||||||||||||||
Prepaid expenses and other current assets | $ | 8,013 | $ | 3,565 | |||||||||||||
Other non-current assets | 19,035 | 17,115 | |||||||||||||||
Total amount of VAT receivable reported | $ | 27,048 | $ | 20,680 | |||||||||||||
Income Tax Receivable [Table Text Block] | The following table summarizes the Income tax receivables reported by the Company (in thousands): | ||||||||||||||||
February 28, 2015 | 31-Aug-14 | ||||||||||||||||
Prepaid expenses and other current assets | $ | 2,803 | $ | 1,916 | |||||||||||||
Other non-current assets | 7,633 | 7,218 | |||||||||||||||
Total amount of income tax receivable reported | $ | 10,436 | $ | 9,134 | |||||||||||||
Fair Value, by Balance Sheet Grouping | The carrying value and fair value of the Company’s debt as of February 28, 2015 and August 31, 2014 is as follows (in thousands): | ||||||||||||||||
February 28, 2015 | August 31, 2014 | ||||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||||
Long-term debt, including current portion | $ | 105,120 | $ | 105,600 | $ | 91,439 | $ | 92,893 | |||||||||
Tabular disclosure of derivatives at fair value. [Table Text Block] | The following tables summarize financial assets and liabilities measured and recorded at fair value on a recurring basis in the Company’s consolidated balance sheet as of February 28, 2015 and August 31, 2014 (in thousands) for derivatives that qualify for hedge accounting: | ||||||||||||||||
Assets and Liabilities as of February 28, 2015 | Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | Total | |||||||||||||
(Level 1) | (Level 2) | (Level 3) | |||||||||||||||
Other non-current assets - (Cross-currency interest rate swaps) | — | 6,996 | — | 6,996 | |||||||||||||
Other long-term liabilities – (Interest rate swaps) | — | (340 | ) | — | (340 | ) | |||||||||||
Other long-term liabilities – (Cross-currency interest rate swaps) | — | (246 | ) | — | (246 | ) | |||||||||||
Total | $ | — | $ | 6,410 | $ | — | $ | 6,410 | |||||||||
Assets and Liabilities as of August 31, 2014 | Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | Total | |||||||||||||
(Level 1) | (Level 2) | (Level 3) | |||||||||||||||
Prepaid expenses and other current assets (Cross-currency interest rate swaps) | $ | — | $ | 495 | $ | — | $ | 495 | |||||||||
Other non-current assets - (Cross-currency interest rate swaps) | — | 970 | — | 970 | |||||||||||||
Other non-current assets - (Interest rate swaps) | — | 125 | — | 125 | |||||||||||||
Total | $ | — | $ | 1,590 | $ | — | $ | 1,590 | |||||||||
The following tables summarize financial assets and liabilities measured and recorded at fair value on a recurring basis in the Company’s consolidated balance sheet as of February 28, 2015 and August 31, 2014 (in thousands) for derivatives that do not qualify for hedge accounting: | |||||||||||||||||
Assets and Liabilities as of February 28, 2015 | Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | Total | |||||||||||||
(Level 1) | (Level 2) | (Level 3) | |||||||||||||||
Prepaid expenses and other current assets (Foreign currency forward contracts) | $ | — | $ | 1,064 | $ | — | $ | 1,064 | |||||||||
Other accrued expenses (Foreign currency forward contracts) | — | — | — | — | |||||||||||||
Net fair value of derivatives designated as hedging instruments that do not qualify for hedge accounting | $ | — | $ | 1,064 | $ | — | $ | 1,064 | |||||||||
Assets and Liabilities as of August 31, 2014 | Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | Total | |||||||||||||
(Level 1) | (Level 2) | (Level 3) | |||||||||||||||
Prepaid expenses and other current assets (Foreign currency forward contracts) | $ | — | $ | — | $ | — | $ | — | |||||||||
Other accrued expenses (Foreign currency forward contracts) | — | (14 | ) | — | (14 | ) | |||||||||||
Net fair value of derivatives designated as hedging instruments that do not qualify for hedge accounting | $ | — | $ | (14 | ) | $ | — | $ | (14 | ) | |||||||
Schedule of Goodwill [Table Text Block] | The table below presents goodwill resulting from certain business combinations as of February 28, 2015 and August 31, 2014 (in thousands). The change in goodwill is a result of foreign exchange translation losses. | ||||||||||||||||
February 28, 2015 | August 31, 2014 | Change | |||||||||||||||
Goodwill | $ | 36,069 | $ | 36,108 | $ | (39 | ) | ||||||||||
Translation of foreign currencies gains or losses [Table Text Block] | The following table summarizes the amounts recorded for the three and six month period ending February 28, 2015 and 2014 (in thousands): | ||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
28-Feb-15 | 28-Feb-14 | 28-Feb-15 | 28-Feb-14 | ||||||||||||||
Currency gain (loss) | $ | (1,659 | ) | $ | 712 | $ | (4,291 | ) | $ | 1,023 | |||||||
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | The following tables present a reconciliation of the effective tax rate for the periods presented: | ||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
28-Feb-15 | 28-Feb-14 | 28-Feb-15 | 28-Feb-14 | ||||||||||||||
Federal tax provision at statutory rates | 35 | % | 35 | % | 35 | % | 35 | % | |||||||||
State taxes, net of federal benefit | 0.3 | 0.2 | 0.4 | 0.3 | |||||||||||||
Differences in foreign tax rates | (5.0 | ) | (5.3 | ) | (4.8 | ) | (4.8 | ) | |||||||||
Permanent items and other adjustments | 3.8 | (1.7 | ) | 3.5 | (0.2 | ) | |||||||||||
Increase (decrease) in foreign valuation allowance | 1.2 | — | 2 | (0.1 | ) | ||||||||||||
Provision for income taxes | 35.3 | % | 28.2 | % | 36.1 | % | 30.2 | % |
PROPERTY_AND_EQUIPMENT_NET_Pro
PROPERTY AND EQUIPMENT, NET Property Plan and Equipment (Tables) | 6 Months Ended | |||||||||||||||
Feb. 28, 2015 | ||||||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||||||
Property, Plant and Equipment [Table Text Block] | Property and equipment consist of the following (in thousands): | |||||||||||||||
February 28, 2015 | August 31, 2014 | |||||||||||||||
Land | $ | 126,658 | $ | 124,082 | ||||||||||||
Building and improvements | 274,401 | 244,485 | ||||||||||||||
Fixtures and equipment | 156,857 | 148,143 | ||||||||||||||
Construction in progress | 24,068 | 55,664 | ||||||||||||||
Total property and equipment, historical cost | 581,984 | 572,374 | ||||||||||||||
Less: accumulated depreciation | (157,624 | ) | (146,049 | ) | ||||||||||||
Property and equipment, net | $ | 424,360 | $ | 426,325 | ||||||||||||
Total interest capitalized (in thousands): | ||||||||||||||||
As of February 28, 2015 | As of August 31, 2014 | |||||||||||||||
Total interest capitalized | $ | 7,106 | $ | 6,542 | ||||||||||||
Depreciation and amortization expense (in thousands): | ||||||||||||||||
Three Months Ended February 28, | Six Months Ended February 28, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Depreciation and amortization expense | $ | 8,636 | $ | 7,139 | $ | 16,433 | $ | 13,793 | ||||||||
Total interest capitalized (in thousands): | ||||||||||||||||
Three Months Ended February 28, | Six Months Ended February 28, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Interest capitalized | $ | 147 | $ | 194 | $ | 763 | $ | 493 | ||||||||
EARNINGS_PER_SHARE_Earnings_Pe
EARNINGS PER SHARE Earnings Per Share (Tables) | 6 Months Ended | |||||||||||||||
Feb. 28, 2015 | ||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | The following table sets forth the computation of net income per share for the three and six months ended February 28, 2015 and 2014 (in thousands, except per share amounts): | |||||||||||||||
Three Months Ended February 28, | Six Months Ended February 28, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Net income | $ | 24,835 | $ | 28,278 | $ | 45,482 | $ | 49,710 | ||||||||
Less: Allocation of income to unvested stockholders | (259 | ) | (504 | ) | (580 | ) | (932 | ) | ||||||||
Net earnings available to common stockholders | $ | 24,576 | $ | 27,774 | $ | 44,902 | $ | 48,778 | ||||||||
Basic weighted average shares outstanding | 29,827 | 29,724 | 29,809 | 29,707 | ||||||||||||
Add dilutive effect of stock options (two-class method) | 6 | 12 | 7 | 12 | ||||||||||||
Diluted average shares outstanding | 29,833 | 29,736 | 29,816 | 29,719 | ||||||||||||
Basic net income per share | $ | 0.82 | $ | 0.93 | $ | 1.5 | $ | 1.64 | ||||||||
Diluted net income per share | $ | 0.82 | $ | 0.93 | $ | 1.5 | $ | 1.64 | ||||||||
STOCKHOLDERS_EQUITY_Dividends_
STOCKHOLDERS EQUITY Dividends (Tables) | 6 Months Ended | ||||||||||||||||||||||||
Feb. 28, 2015 | |||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||
Schedule of Dividends Payable [Table Text Block] | The following table summarizes the dividends declared and paid during fiscal year 2015 and 2014. | ||||||||||||||||||||||||
First Payment | Second Payment | ||||||||||||||||||||||||
Declared | Amount | Record Date | Date Paid | Date Payable | Amount | Record Date | Date Paid | Date Payable | Amount | ||||||||||||||||
2/4/15 | $ | 0.7 | 2/13/15 | 2/27/15 | N/A | $ | 0.35 | 8/14/15 | N/A | 8/31/15 | $ | 0.35 | |||||||||||||
1/23/14 | $ | 0.7 | 2/14/14 | 2/28/14 | N/A | $ | 0.35 | 8/15/14 | 8/29/14 | N/A | $ | 0.35 | |||||||||||||
STOCKHOLDERS_EQUITY_Other_Comp
STOCKHOLDERS EQUITY Other Comprehensive Income or Loss (Tables) | 6 Months Ended | |||||||||||||||
Feb. 28, 2015 | ||||||||||||||||
Equity [Abstract] | ||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] | The following tables disclose the effects of each component of other comprehensive income (loss), net of tax (in thousands): | |||||||||||||||
Six Months Ended February 28, 2015 | ||||||||||||||||
Foreign currency translation adjustments | Defined benefit pension plans | Derivative Instruments | Total | |||||||||||||
Beginning balance, September 1, 2014 | $ | (50,410 | ) | $ | 113 | $ | 1,011 | $ | (49,286 | ) | ||||||
Other comprehensive income (loss) | (22,557 | ) | (24 | ) | 3,468 | (19,113 | ) | |||||||||
Ending balance, February 28, 2015 | $ | (72,967 | ) | $ | 89 | $ | 4,479 | $ | (68,399 | ) | ||||||
Six Months Ended February 28, 2014 | ||||||||||||||||
Foreign currency translation adjustments | Defined benefit pension plans | Derivative Instruments | Total | |||||||||||||
Beginning balance, September 1, 2013 | $ | (42,321 | ) | $ | (152 | ) | $ | 998 | $ | (41,475 | ) | |||||
Other comprehensive income (loss) | (12,372 | ) | 11 | 922 | (11,439 | ) | ||||||||||
Ending balance, February 28, 2014 | $ | (54,693 | ) | $ | (141 | ) | $ | 1,920 | $ | (52,914 | ) | |||||
Twelve Months Ended August 31, 2014 | ||||||||||||||||
Foreign currency translation adjustments | Defined benefit pension plans | Derivative Instruments | Total | |||||||||||||
Beginning balance, September 1, 2013 | $ | (42,321 | ) | $ | (152 | ) | $ | 998 | $ | (41,475 | ) | |||||
Other comprehensive income (loss) | (8,089 | ) | 260 | 101 | (7,728 | ) | ||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | — | 5 | (2) | (88 | ) | (1) (3) | (83 | ) | ||||||||
Ending balance, August 31, 2014 | $ | (50,410 | ) | $ | 113 | $ | 1,011 | $ | (49,286 | ) | ||||||
-1 | See Note 9 - Derivative Instruments and Hedging Activities. | |||||||||||||||
-2 | Amounts reclassified from accumulated other comprehensive income (loss) related to the minimum pension liability are included in warehouse club operations in the Company's Consolidated Statements of Income. | |||||||||||||||
-3 | Amounts reclassified from accumulated other comprehensive income (loss) for settlement of derivative instruments are included in other income (expense), net in the Company's Consolidated Statements of Income. | |||||||||||||||
STOCKHOLDERS_EQUITY_Retained_E
STOCKHOLDERS EQUITY Retained Earnings (Tables) | 6 Months Ended | |||||||
Feb. 28, 2015 | ||||||||
Equity [Abstract] | ||||||||
Retained earnings not available for distribution [Table Text Block] | The following table summarizes retained earnings designated as legal reserves of various subsidiaries which cannot be distributed as dividends to PriceSmart, Inc. according to applicable statutory regulations (in thousands): | |||||||
February 28, 2015 | 31-Aug-14 | |||||||
Retained earnings not available for distribution | $ | 4,916 | $ | 4,556 | ||||
STOCK_BASED_COMPENSATION_Discl
STOCK BASED COMPENSATION Disclosure of Compensation Related Costs, Shared-based Payments (Tables) | 6 Months Ended | |||||||||||||||
Feb. 28, 2015 | ||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||
Schedule of Share-based compensation, shares available for grant [Table Text Block] | The following table summarizes the shares authorized and shares available for future grants: | |||||||||||||||
Shares available to grant | ||||||||||||||||
Shares authorized for issuance as of October 31, 2014 (including shares originally authorized for issuance under the prior plans) | 28-Feb-15 | 31-Aug-14 | ||||||||||||||
2013 Plan | 888,353 | 854,864 | 821,124 | |||||||||||||
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Table Text Block] | The following table summarizes the components of the stock-based compensation expense (in thousands), which are included in general and administrative expense and warehouse club operations in the consolidated statements of income: | |||||||||||||||
Three Months Ended February 28, | Six Months Ended February 28, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Options granted to directors | $ | 9 | $ | 7 | $ | 37 | $ | 37 | ||||||||
Restricted stock awards | 1,454 | 1,634 | 2,703 | 2,783 | ||||||||||||
Restricted stock units | 321 | 250 | 600 | 501 | ||||||||||||
Stock-based compensation expense | $ | 1,784 | $ | 1,891 | $ | 3,340 | $ | 3,321 | ||||||||
Schedule of Share-based Payment Award, Valuation Assumptions [Table Text Block] | The following table summarizes other information related to stock-based compensation: | |||||||||||||||
February 28, | ||||||||||||||||
2015 | 2014 | |||||||||||||||
Remaining unrecognized compensation cost (in thousands) | $ | 18,045 | $ | 23,520 | ||||||||||||
Weighted average period of time over which this cost will be recognized (years) | 6 | 6 | ||||||||||||||
Excess tax benefit (deficiency) on stock-based compensation (in thousands) | $ | 1,457 | $ | 1,345 | ||||||||||||
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity [Table Text Block] | The Company began issuing restricted stock awards in fiscal year 2006 and restricted stock units in fiscal year 2008. The restricted stock awards and units vest over a five to ten year period, and the unvested portion of the award is forfeited if the employee or non-employee director leaves the Company before the vesting period is completed. Restricted stock awards and units activity for the period was as follows: | |||||||||||||||
Six Months Ended February 28, | ||||||||||||||||
2015 | 2014 | |||||||||||||||
Grants outstanding at beginning of period | 488,416 | 623,424 | ||||||||||||||
Granted | 16,911 | 8,316 | ||||||||||||||
Forfeited | (720 | ) | (1,732 | ) | ||||||||||||
Vested | (136,779 | ) | (135,371 | ) | ||||||||||||
Grants outstanding at end of period | 367,828 | 494,637 | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value [Table Text Block] | The following table summarizes the weighted average per share grant date fair value for restricted stock awards and units for the period: | |||||||||||||||
Six Months Ended February 28, | ||||||||||||||||
Weighted Average Grant Date Fair Value | 2015 | 2014 | ||||||||||||||
Restricted stock awards and units granted | $ | 89.85 | $ | 112.37 | ||||||||||||
Restricted stock awards and units vested | $ | 44.21 | $ | 39.71 | ||||||||||||
Restricted stock awards and units forfeited | $ | 40.4 | $ | 49.37 | ||||||||||||
Schedule of Share-based compensation, Fair Market Value for Restricted Stock [Table Text Block] [Table Text Block] | The following table summarizes the total fair market value of restricted stock awards and units vested for the period (in thousands): | |||||||||||||||
Six Months Ended February 28, | ||||||||||||||||
2015 | 2013 | |||||||||||||||
Total fair market value of restricted stock awards and units vested | $ | 12,166 | $ | 12,749 | ||||||||||||
Schedule of Share-based compensation, Shares repurchased [Table Text Block] | The following table summarizes this activity during the period: | |||||||||||||||
Six Months Ended February 28, | ||||||||||||||||
2015 | 2014 | |||||||||||||||
Shares repurchased | 49,931 | 48,291 | ||||||||||||||
Cost of repurchase of shares (in thousands) | $ | 4,441 | $ | 4,548 | ||||||||||||
Schedule of Share-based compensation, reissued treasury shares [Table Text Block] | The Company reissues treasury shares as part of its stock-based compensation programs. The following table summarizes the treasury shares reissued: | |||||||||||||||
Six Months Ended February 28, | ||||||||||||||||
2015 | 2014 | |||||||||||||||
Reissued treasury shares | — | — | ||||||||||||||
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | The following table summarizes the stock options outstanding: | |||||||||||||||
February 28, 2015 | August 31, 2014 | |||||||||||||||
Stock options outstanding | 20,000 | 23,000 | ||||||||||||||
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES Operating Leases (Tables) | 6 Months Ended | |||||
Feb. 28, 2015 | ||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||
Leases of Lessee Disclosure [Text Block] | ||||||
Years ended February 28, | ||||||
Open | ||||||
Locations(1) | ||||||
2016 | $ | 7,309 | ||||
2017 | 9,785 | |||||
2018 | 10,355 | |||||
2019 | 10,326 | |||||
2020 | 10,260 | |||||
Thereafter | 81,442 | |||||
Total | $ | 129,477 | ||||
-1 | Operating lease obligations have been reduced by approximately $372,000 to reflect sub-lease income. Certain obligations under leasing arrangements are collateralized by the underlying asset being leased. |
DEBT_Tables
DEBT (Tables) | 6 Months Ended | ||||||||||||||||||
Feb. 28, 2015 | |||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||
Schedule of short-term borrowings | Short-term borrowings consist of lines of credit which are secured by certain assets of the Company and its subsidiaries and in some cases are guaranteed by the Company as summarized below (in thousands): | ||||||||||||||||||
Facilities Used | |||||||||||||||||||
Total Amount of Facilities | Short-term Borrowings | Letters of Credit | Facilities Available | Weighted average interest rate | |||||||||||||||
February 28, 2015 | $ | 59,387 | $ | 4,470 | $ | 380 | $ | 54,537 | 5.86 | % | |||||||||
August 31, 2014 | $ | 61,869 | $ | — | $ | 436 | $ | 61,433 | N/A | ||||||||||
Schedule of Long-term Debt Instruments [Table Text Block] | The following table provides the changes in our long-term debt for the six months ended February 28, 2015: | ||||||||||||||||||
(Amounts in millions) | Current Portion of Long-term debt | Long-term debt | Total | ||||||||||||||||
Balances as of August 31, 2014 | $ | 11,848 | $ | 79,591 | $ | 91,439 | (1) | ||||||||||||
Proceeds from long-term debt incurred during the period: | |||||||||||||||||||
Panama subsidiary | 1,000 | 9,000 | 10,000 | ||||||||||||||||
Honduras subsidiary | 1,600 | 6,750 | 8,350 | ||||||||||||||||
Colombia subsidiary | 1,500 | 13,500 | 15,000 | ||||||||||||||||
Trinidad subsidiary | 907 | 2,720 | 3,627 | ||||||||||||||||
Repayments of long-term debt: | |||||||||||||||||||
Repayment of loan by Honduras subsidiary, originally entered into on January 12, 2012 with Scotiabank El Salvador, S.A. | (3,200 | ) | — | (3,200 | ) | ||||||||||||||
Partial repayment of loan by Honduras subsidiary, originally entered into on March 7, 2014 with Banco de America Central Honduras, S.A. | — | (5,000 | ) | (5,000 | ) | ||||||||||||||
Repayment of loan by Honduras subsidiary, originally entered into on March 6, 2010 with Banco del Pais, S.A. | (87 | ) | — | (87 | ) | ||||||||||||||
Repayment of loan by Trinidad subsidiary, originally entered into on August 26, 2008 with Royal Bank of Trinidad and Tobago, Ltd. | (900 | ) | (2,325 | ) | (3,225 | ) | |||||||||||||
Regularly scheduled loan payments | (579 | ) | (4,567 | ) | (5,146 | ) | |||||||||||||
Reclassifications of long-term debt | 2,850 | (2,850 | ) | — | |||||||||||||||
Translation adjustments on foreign-currency debt of subsidiaries whose functional currency is not the U.S. dollar (2) | (147 | ) | (6,491 | ) | (6,638 | ) | |||||||||||||
Balances as of February 28, 2015 | $ | 14,792 | $ | 90,328 | $ | 105,120 | (3) | ||||||||||||
(1) | The carrying amount cash assets assigned as collateral for this total was $24.6 million and the carrying amount on non-cash assets assigned as collateral for this total was $84.2 million. | ||||||||||||||||||
(2) | These foreign currency translation adjustments are recorded within Other comprehensive income. | ||||||||||||||||||
(3) | The carrying amount cash assets assigned as collateral for this total was $24.0 million and the carrying amount on non-cash assets assigned as collateral for this total was $103.5 million. | ||||||||||||||||||
Annual maturities of long-term debt | Annual maturities of long-term debt are as follows (in thousands): | ||||||||||||||||||
Twelve months ended February 28, | Amount | ||||||||||||||||||
2016 | $ | 14,792 | |||||||||||||||||
2017 | 29,679 | ||||||||||||||||||
2018 | 12,626 | ||||||||||||||||||
2019 | 12,176 | ||||||||||||||||||
2020 | 32,021 | ||||||||||||||||||
Thereafter | 3,826 | ||||||||||||||||||
Total | $ | 105,120 | |||||||||||||||||
DERIVATIVE_INSTRUMENTS_AND_HED1
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 6 Months Ended | |||||||||||||||||||||
Feb. 28, 2015 | ||||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||||
Schedule of Interest Rate Derivatives | The following table summarizes agreements for which the Company has recorded cash flow hedge accounting transactions during the six months ended February 28, 2015: | |||||||||||||||||||||
Subsidiary | Date Entered into | Derivative Financial Counter-party | Derivative Financial Instruments | Initial | Bank US$ loan Held with | Floating Leg (swap counter-party) | Fixed Rate for PSMT Subsidiary | Settlement Dates | Effective Period of swap | |||||||||||||
US$ Notional Amount | ||||||||||||||||||||||
El Salvador | 16-Dec-14 | Bank of Nova Scotia ("Scotiabank") | Interest rate swap | $ | 4,000,000 | Bank of Nova Scotia | Variable rate 30-day Libor plus 3.5% | 4.78 | % | 29th day of each month beginning on December 29, 2014 | December 01, 2014 - August 29, 2019 | |||||||||||
Colombia | 10-Dec-14 | Citibank, N.A. ("Citi") | Cross currency interest rate swap | $ | 15,000,000 | Citibank, N.A. | Variable rate 3-month Libor plus 2.8% | 8.25 | % | 4th day of March, June, Sept, Dec. beginning on March 4, 2015 | December 4, 2014 - December 3, 2019 | |||||||||||
Panama | 9-Dec-14 | Bank of Nova Scotia ("Scotiabank") | Interest rate swap | $ | 10,000,000 | Bank of Nova Scotia | Variable rate 30-day Libor plus 3.5% | 5.159 | % | 28th day of each month beginning December 29, 2014 | November 28, 2014 - November 29, 2019 | |||||||||||
Honduras | 23-Oct-14 | Citibank, N.A. ("Citi") | Cross currency interest rate swap | $ | 5,000,000 | Citibank, N.A. | Variable rate 3-month Libor plus 3.5% | 11.6 | % | 22nd day of January, April, July, and October beginning on January 22, 2015 | October 22, 2014 - October 22, 2017 | |||||||||||
Panama | 1-Aug-14 | Bank of Nova Scotia ("Scotiabank") | Interest rate swap | $ | 5,000,000 | Bank of Nova Scotia | Variable rate 30-day Libor plus 3.5% | 4.89 | % | 21st day of each month beginning on September 22, 2014 | August 21, 2014 - August 21, 2019 | |||||||||||
Panama | 22-May-14 | Bank of Nova Scotia ("Scotiabank") | Interest rate swap | $ | 19,800,000 | Bank of Nova Scotia | Variable rate 30-day Libor plus 3.5% | 4.98 | % | 4th day of each month beginning on June 4, 2014 | May 5, 2014 - April 4, 2019 | |||||||||||
Panama | 22-May-14 | Bank of Nova Scotia ("Scotiabank") | Interest rate swap | $ | 3,970,000 | Bank of Nova Scotia | Variable rate 30-day Libor plus 3.5% | 4.98 | % | 4th day of each month beginning on June 4, 2014 | May 5, 2014 - April 4, 2019 | |||||||||||
Colombia | 11-Dec-12 | Bank of Nova Scotia ("Scotiabank") | Cross currency interest rate swap | $ | 8,000,000 | Bank of Nova Scotia | Variable rate 3-month Libor plus 0.7% | 4.79 | % | March, June, September and December, beginning on March 5, 2013 | December 5, 2012 - December 5, 2014 | |||||||||||
Colombia | 21-Feb-12 | Bank of Nova Scotia ("Scotiabank") | Cross currency interest rate swap | $ | 8,000,000 | Bank of Nova Scotia | Variable rate 3-month Libor plus 0.6% | 6.02 | % | February, May, August and November beginning on May 22, 2012 | February 21, 2012 - February 21, 2017 | |||||||||||
Colombia | 21-Oct-11 | Bank of Nova Scotia ("Scotiabank") | Cross currency interest rate swap | $ | 2,000,000 | Bank of Nova Scotia | Variable rate 3-month Libor plus 0.7% | 5.3 | % | January, April, July and October, beginning on October 29, 2011 | July 29, 2011 - April 1, 2016 | |||||||||||
Colombia | 21-Oct-11 | Bank of Nova Scotia ("Scotiabank") | Cross currency interest rate swap | $ | 6,000,000 | Bank of Nova Scotia | Variable rate 3-month Libor plus 0.7% | 5.45 | % | March, June, September and December, beginning on December 29, 2011 | September 29, 2011 - April 1, 2016 | |||||||||||
Colombia | 5-May-11 | Bank of Nova Scotia ("Scotiabank") | Cross currency interest rate swap | $ | 8,000,000 | Bank of Nova Scotia | Variable rate 3-month Libor plus 0.7% | 6.09 | % | January, April, July and October, beginning on July 5, 2011 | April 1, 2011 - April 1, 2016 | |||||||||||
Interest Rate Swap | ||||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||||
Schedule of Notional Amounts of Outstanding Derivative Positions | The total notional balance of the Company’s pay-fixed/receive-variable interest rate swaps and cross-currency interest rate swaps was as follows (in thousands): | |||||||||||||||||||||
Floating Rate Payer (Swap Counterparty) | 28-Feb-15 | 31-Aug-14 | ||||||||||||||||||||
Scotiabank | $ | 64,058 | $ | 60,200 | ||||||||||||||||||
Citibank N.A. | 19,750 | — | ||||||||||||||||||||
Total | $ | 83,808 | $ | 60,200 | ||||||||||||||||||
Derivative Swaps [Member] | ||||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||||
Schedule of Cash Flow Hedging Instruments, Statements of Financial Performance and Financial Position, Location | For the three and six-month period ended February 28, 2015 and 2014, the Company included the gain or loss on the hedged items (that is, variable-rate borrowings) in the same line item—interest expense—as the offsetting gain or loss on the related interest rate swaps as follows (in thousands): | |||||||||||||||||||||
Income Statement Classification | Interest expense | Cost of swaps (2) | Total | |||||||||||||||||||
on borrowings(1) | ||||||||||||||||||||||
Interest expense for the three months ended February 28, 2015 | $ | 584 | $ | 714 | $ | 1,298 | ||||||||||||||||
Interest expense for the three months ended February 28, 2014 | $ | 113 | $ | 334 | $ | 447 | ||||||||||||||||
Interest expense for the six months ended February 28, 2015 | $ | 933 | $ | 1,226 | $ | 2,159 | ||||||||||||||||
Interest expense for the six months ended February 28, 2014 | $ | 240 | $ | 764 | $ | 1,004 | ||||||||||||||||
(1) | This amount is representative of the interest expense recognized on the underlying hedged transactions. | |||||||||||||||||||||
(2) | This amount is representative of the interest expense recognized on the cross-currency interest rate swaps designated as cash flow hedging instruments. | |||||||||||||||||||||
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The following table summarizes the fair value of interest rate swap and cross-currency interest rate swap derivative instruments that qualify for derivative hedge accounting (in thousands, except footnote data): | |||||||||||||||||||||
February 28, 2015 | August 31, 2014 | |||||||||||||||||||||
Derivatives designated as cash flow hedging instruments | Balance Sheet Account | Fair Value | Balance Sheet Account | Fair Value | ||||||||||||||||||
Cross-currency interest rate swaps(1) | Prepaid expenses and current assets | $ | — | Prepaid expenses and current assets | $ | 495 | ||||||||||||||||
Cross-currency interest rate swaps(1) | Other non-current assets | 6,996 | Other non-current assets | 970 | ||||||||||||||||||
Interest rate swaps(2) | Other non-current assets | — | Other non-current assets | 125 | ||||||||||||||||||
Interest rate swaps(2) | Other long-term liabilities | (340 | ) | Other long-term liabilities | — | |||||||||||||||||
Cross-currency interest rate swaps(3) | Other long-term liabilities | (246 | ) | Other long-term liabilities | — | |||||||||||||||||
Net fair value of derivatives designated as hedging instruments - assets (liability)(4) | $ | 6,410 | $ | 1,590 | ||||||||||||||||||
(1) | The effective portion of the cross-currency interest rate swaps for this subsidiary was recorded to Accumulated other comprehensive (income)/loss for $(4.9) million and $(917,000) net of tax as of February 28, 2015 and August 31, 2014, respectively. The Company has recorded a deferred tax liability amount with an offset to other comprehensive income - tax of $(2.1) million and $(548,000) as of February 28, 2015 and August 31, 2014, respectively, related to asset positions of cross-currency interest rate swaps. However, the equity effect of this deferred tax liability is offset by the full valuation allowance provided for the net deferred tax asset recorded for this subsidiary. | |||||||||||||||||||||
(2) | The effective portion of the interest rate swaps was recorded to Accumulated other comprehensive loss / (income) for $254,000 and $(94,000) net of tax as of February 28, 2015 and August 31, 2014, respectively. The Company has recorded a deferred tax asset / (liability) amount with an offset to other comprehensive income - tax of $86,000 and $(31,000) as of February 28, 2015 and August 31, 2014, respectively. | |||||||||||||||||||||
(3) | The effective portion of the cross-currency interest rate swaps for this subsidiary was recorded to Accumulated other comprehensive (income)/loss for $172,000 and $0 net of tax as of February 28, 2015 and August 31, 2014, respectively. The Company has recorded a deferred tax asset amount with an offset to other comprehensive income - tax of $74,000 and $0 as of February 28, 2015 and August 31, 2014, respectively. | |||||||||||||||||||||
(4) | Derivatives listed on the above table were designated as cash flow hedging instruments. | |||||||||||||||||||||
Foreign Exchange Contract | ||||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||||
Schedule of Cash Flow Hedging Instruments, Statements of Financial Performance and Financial Position, Location | For the three and six-month periods ended February 28, 2015 and 2014, the Company included in its consolidated statements of income the forward derivative gain or (loss) on the non-deliverable forward foreign-exchange contracts as follows (in thousands): | |||||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||||
Income Statement Classification | 28-Feb-15 | 28-Feb-14 | 28-Feb-15 | 28-Feb-14 | ||||||||||||||||||
Other income (expense), net | $ | 3,521 | $ | 62 | $ | 6,134 | $ | 185 | ||||||||||||||
Schedule of Notional Amounts of Outstanding Derivative Positions | The Company entered into non-deliverable forward foreign exchange contracts during the six months ended February 28, 2015. The open contracts as of February 28, 2015 are summarized below: | |||||||||||||||||||||
Subsidiary | Dates entered into | Derivative Financial Counter-party | Derivative Financial Instrument | Notional Amount | Settlement Date | Effective Period of Forward | ||||||||||||||||
(in thousands) | ||||||||||||||||||||||
Colombia | January - February 2015 | Bank of Nova Scotia | Forward foreign exchange contracts | $ | 27,000 | March - April 2015 | January - April 2015 | |||||||||||||||
UNCONSOLIDATED_AFFILIATES_Tabl
UNCONSOLIDATED AFFILIATES (Tables) | 6 Months Ended | |||||||||||||||||||||||||||
Feb. 28, 2015 | ||||||||||||||||||||||||||||
Unconsolidated Affiliates [Abstract] | ||||||||||||||||||||||||||||
Schedule of Variable Interest Entities Maximum Loss Exposure | The table below summarizes the Company’s interest in these VIEs and the Company’s maximum exposure to loss as a result of its involvement with these VIEs as of February 28, 2015 (in thousands): | |||||||||||||||||||||||||||
Entity | % Ownership | Initial Investment | Additional Investments | Company’s Variable | Commitment to Future Additional Investments (1) | Company’s | ||||||||||||||||||||||
Interest in Entity | Maximum | |||||||||||||||||||||||||||
Net Loss Inception to Date | Exposure | |||||||||||||||||||||||||||
to Loss in Entity(2) | ||||||||||||||||||||||||||||
GolfPark Plaza, S.A. | 50 | % | $ | 4,616 | $ | 2,283 | $ | (81 | ) | $ | 6,818 | $ | 217 | $ | 7,035 | |||||||||||||
Price Plaza Alajuela, S.A. | 50 | % | 2,193 | 1,236 | (2 | ) | 3,427 | 785 | 4,212 | |||||||||||||||||||
Total | $ | 6,809 | $ | 3,519 | $ | (83 | ) | $ | 10,245 | $ | 1,002 | $ | 11,247 | |||||||||||||||
Schedule of Variable Interest Entities Financial Information | The summarized financial information of the unconsolidated affiliates is as follows (in thousands): | |||||||||||||||||||||||||||
February 28, 2015 | August 31, 2014 | |||||||||||||||||||||||||||
Current assets | $ | 1,246 | $ | 803 | ||||||||||||||||||||||||
Noncurrent assets | $ | 11,499 | $ | 8,900 | ||||||||||||||||||||||||
Current liabilities | $ | 1,418 | $ | 1,126 | ||||||||||||||||||||||||
Noncurrent liabilities | $ | 13 | $ | 13 | ||||||||||||||||||||||||
Three Months Ended February 28, | Six Months Ended February 28, | |||||||||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||||||||||||
Net income (loss) | $ | 15 | $ | — | $ | 27 | $ | 8 | ||||||||||||||||||||
SEGMENTS_Tables
SEGMENTS (Tables) | 6 Months Ended | ||||||||||||||||||||||||
Feb. 28, 2015 | |||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||
Schedule of Error Corrections and Prior Period Adjustments [Table Text Block] | Reclassifications to consolidated balance sheet recorded during fiscal year 2015 for fiscal year 2014 - Certain reclassifications to the consolidated balance sheet have been made to prior fiscal year amounts to conform to the presentation in the current fiscal year. These reclassifications relate to the presentation of certain income tax receivables (see note 2). The table below summarizes these reclassifications. | ||||||||||||||||||||||||
August 31, 2014 balance sheet line item as previously reported | Amount reclassified Dr/(Cr) | August 31, 2014 balance sheet line item as currently reported | |||||||||||||||||||||||
Prepaid expenses and other current assets | 22,570 | $ | (5,310 | ) | 17,260 | ||||||||||||||||||||
Other non-current assets | 27,593 | 3,162 | 30,755 | ||||||||||||||||||||||
Accounts payable | (225,761 | ) | 2,202 | (223,559 | ) | ||||||||||||||||||||
Income taxes payable | (7,664 | ) | (54 | ) | (7,718 | ) | |||||||||||||||||||
Net amount of reclassifications | $ | — | |||||||||||||||||||||||
The following tables summarize the impact of these reclassifications to the amounts reported for each segment (in thousands): | |||||||||||||||||||||||||
United | Central | Caribbean | Colombia Operations | Total | |||||||||||||||||||||
States | American | Operations | |||||||||||||||||||||||
Operations | Operations | ||||||||||||||||||||||||
Six Month Period Ended February 28, 2014 | |||||||||||||||||||||||||
Long-lived assets (other than deferred tax assets) as previously reported | $ | 13,087 | $ | 257,053 | $ | 115,316 | $ | 87,295 | $ | 472,751 | |||||||||||||||
Reclassifications to long-lived assets | 65 | 965 | — | 767 | 1,797 | ||||||||||||||||||||
Long-lived assets (other than deferred tax assets) as currently reported | $ | 13,152 | $ | 258,018 | $ | 115,316 | $ | 88,062 | $ | 474,548 | |||||||||||||||
Total assets as previously reported | $ | 57,377 | $ | 436,252 | $ | 218,513 | $ | 122,174 | $ | 834,316 | |||||||||||||||
Reclassifications to total assets | — | 72 | — | — | 72 | ||||||||||||||||||||
Total assets as currently reported | $ | 57,377 | $ | 436,324 | $ | 218,513 | $ | 122,174 | $ | 834,388 | |||||||||||||||
As of August 31, 2014 | |||||||||||||||||||||||||
Long-lived assets (other than deferred tax assets) as previously reported | $ | 16,488 | $ | 265,950 | $ | 113,134 | $ | 130,330 | $ | 525,902 | |||||||||||||||
Reclassifications to long-lived assets | 96 | 2,096 | — | 970 | 3,162 | ||||||||||||||||||||
Long-lived assets (other than deferred tax assets) as currently reported | $ | 16,584 | $ | 268,046 | $ | 113,134 | $ | 131,300 | $ | 529,064 | |||||||||||||||
Total assets as previously reported | $ | 91,190 | $ | 457,325 | $ | 223,251 | $ | 168,452 | $ | 940,218 | |||||||||||||||
Reclassifications to total assets | (15 | ) | 70 | — | (2,203 | ) | (2,148 | ) | |||||||||||||||||
Total assets as currently reported | $ | 91,175 | $ | 457,395 | $ | 223,251 | $ | 166,249 | $ | 938,070 | |||||||||||||||
Schedule of Segment Reporting Information, by Segment [Table Text Block] | The following tables summarize by segment certain revenues, operating costs and balance sheet items (in thousands): | ||||||||||||||||||||||||
United | Central | Caribbean | Colombia Operations | Reconciling Items(1) | Total | ||||||||||||||||||||
States | American | Operations | |||||||||||||||||||||||
Operations | Operations | ||||||||||||||||||||||||
Three Month Period Ended February 28, 2015 | |||||||||||||||||||||||||
Revenue from external customers | $ | 6,235 | $ | 426,226 | $ | 220,225 | 97,610 | $ | 750,296 | ||||||||||||||||
Intersegment revenues | 259,611 | — | 1,507 | — | (261,118 | ) | — | ||||||||||||||||||
Depreciation and amortization | 545 | 3,698 | 2,451 | 1,942 | 8,636 | ||||||||||||||||||||
Operating income | 7,811 | 37,122 | 13,408 | (844 | ) | (15,789 | ) | 41,708 | |||||||||||||||||
Net income | 3,619 | 28,846 | 11,579 | (3,420 | ) | (15,789 | ) | 24,835 | |||||||||||||||||
Capital expenditures, net | 1,332 | 8,425 | 1,666 | 2,827 | 14,250 | ||||||||||||||||||||
Six Month Period Ended February 28, 2015 | |||||||||||||||||||||||||
Revenue from external customers | $ | 14,666 | $ | 809,390 | $ | 418,616 | $ | 163,645 | $ | — | $ | 1,406,317 | |||||||||||||
Intersegment revenues | 597,939 | — | 2,890 | — | (600,829 | ) | — | ||||||||||||||||||
Depreciation and amortization | 1,087 | 7,342 | 4,739 | 3,265 | — | 16,433 | |||||||||||||||||||
Operating income | 15,714 | 68,254 | 25,577 | (1,781 | ) | (29,771 | ) | 77,993 | |||||||||||||||||
Net income | 6,981 | 53,174 | 21,833 | (6,735 | ) | (29,771 | ) | 45,482 | |||||||||||||||||
Capital expenditures, net | (1,441 | ) | (2) | 23,231 | 4,862 | 17,218 | — | 43,870 | |||||||||||||||||
Long-lived assets (other than deferred tax assets) | 14,045 | 284,661 | 112,877 | 122,786 | — | 534,369 | |||||||||||||||||||
Goodwill | — | 31,381 | 4,688 | — | — | 36,069 | |||||||||||||||||||
Total assets | 62,021 | 492,395 | 241,096 | 190,854 | — | 986,366 | |||||||||||||||||||
Three Month Period Ended February 28, 2014 | |||||||||||||||||||||||||
Revenue from external customers | $ | 6,764 | $ | 403,087 | $ | 212,366 | 52,157 | $ | — | $ | 674,374 | ||||||||||||||
Intersegment revenues | 209,102 | — | 1,143 | — | (210,245 | ) | — | ||||||||||||||||||
Depreciation and amortization | 583 | 3,279 | 2,264 | 1,013 | — | 7,139 | |||||||||||||||||||
Operating income | 5,904 | 34,076 | 12,939 | 1,973 | (15,517 | ) | 39,375 | ||||||||||||||||||
Net income | 2,451 | 28,919 | 11,040 | 1,385 | (15,517 | ) | 28,278 | ||||||||||||||||||
Capital expenditures, net | 3,565 | 9,269 | 1,710 | 25,264 | — | 39,808 | |||||||||||||||||||
Six Month Period Ended February 28, 2014 | |||||||||||||||||||||||||
Revenue from external customers | $ | 12,485 | $ | 762,622 | $ | 404,426 | $ | 100,442 | $ | — | $ | 1,279,975 | |||||||||||||
Intersegment revenues | 514,694 | — | 2,619 | — | (517,313 | ) | — | ||||||||||||||||||
Depreciation and amortization | 1,155 | 6,107 | 4,483 | 2,048 | — | 13,793 | |||||||||||||||||||
Operating income | 12,853 | 61,163 | 22,397 | 3,473 | (28,152 | ) | 71,734 | ||||||||||||||||||
Net income | 5,517 | 50,810 | 19,340 | 2,195 | (28,152 | ) | 49,710 | ||||||||||||||||||
Capital expenditures, net | 3,139 | 22,922 | 5,663 | 26,372 | — | 58,096 | |||||||||||||||||||
Long-lived assets (other than deferred tax assets) | 13,152 | 258,018 | 115,316 | 88,062 | — | 474,548 | |||||||||||||||||||
Goodwill | — | 31,530 | 4,791 | — | — | 36,321 | |||||||||||||||||||
Total assets | 57,377 | 436,324 | 218,513 | 122,174 | — | 834,388 | |||||||||||||||||||
As of August 31, 2014 | |||||||||||||||||||||||||
Long-lived assets (other than deferred tax assets) | $ | 16,584 | $ | 268,046 | $ | 113,134 | $ | 131,300 | $ | — | $ | 529,064 | |||||||||||||
Goodwill | — | 31,383 | 4,725 | — | — | 36,108 | |||||||||||||||||||
Total assets | 91,175 | 457,395 | 223,251 | 166,249 | — | 938,070 | |||||||||||||||||||
(1) | The reconciling items reflect the amount eliminated on consolidation of intersegment transactions. | ||||||||||||||||||||||||
(2) | The decrease in capital expenditures is a result of the transfers of capital assets from this segment to other segments. |
COMPANY_OVERVIEW_AND_BASIS_OF_2
COMPANY OVERVIEW AND BASIS OF PRESENTATION (Details) | Feb. 28, 2015 |
Club | |
Company Overview [Line Items] | |
Number of stores | 36 |
Equity Method Investment, Ownership Percentage | 100.00% |
Foreign Countries | |
Company Overview [Line Items] | |
Number of countries | 12 |
COSTA RICA | |
Company Overview [Line Items] | |
Number of stores | 6 |
COLOMBIA | |
Company Overview [Line Items] | |
Number of stores | 6 |
PANAMA | |
Company Overview [Line Items] | |
Number of stores | 4 |
TRINIDAD AND TOBAGO | |
Company Overview [Line Items] | |
Number of stores | 4 |
Guatemala | |
Company Overview [Line Items] | |
Number of stores | 3 |
HONDURAS | |
Company Overview [Line Items] | |
Number of stores | 3 |
Dominican Republic | |
Company Overview [Line Items] | |
Number of stores | 3 |
EL SALVADOR | |
Company Overview [Line Items] | |
Number of stores | 2 |
Aruba | |
Company Overview [Line Items] | |
Number of stores | 1 |
Barbados | |
Company Overview [Line Items] | |
Number of stores | 1 |
Jamaica | |
Company Overview [Line Items] | |
Number of stores | 1 |
Nicaragua | |
Company Overview [Line Items] | |
Number of stores | 1 |
Domestic Territories | |
Company Overview [Line Items] | |
Number of countries | 1 |
United States Virgin Islands | |
Company Overview [Line Items] | |
Number of stores | 1 |
COMPANY_OVERVIEW_AND_BASIS_OF_3
COMPANY OVERVIEW AND BASIS OF PRESENTATION Reclassifications and Prior Period Adjusments (Details) (USD $) | Feb. 28, 2015 | Aug. 31, 2014 |
Prepaid Expense and Other Assets, Current | $27,068,000 | $17,260,000 |
Other Assets, Noncurrent | 38,267,000 | 30,755,000 |
Accounts Payable, Current | 233,266,000 | 223,559,000 |
Taxes Payable, Current | 8,359,000 | 7,718,000 |
Scenario, Previously Reported [Member] | ||
Prepaid Expense and Other Assets, Current | 22,570,000 | |
Other Assets, Noncurrent | 27,593,000 | |
Accounts Payable, Current | -225,761,000 | |
Taxes Payable, Current | -7,664,000 | |
Scenario, Reclass [Member] | ||
Prepaid Expense and Other Assets, Current | -5,310,000 | |
Other Assets, Noncurrent | 3,162,000 | |
Accounts Payable, Current | 2,202,000 | |
Taxes Payable, Current | -54,000 | |
Scenario, Actual [Member] | ||
Prepaid Expense and Other Assets, Current | 17,260,000 | |
Other Assets, Noncurrent | 30,755,000 | |
Accounts Payable, Current | -223,559,000 | |
Taxes Payable, Current | ($7,718,000) |
SUMMARY_OF_SIGNIFICANT_ACCOUNT3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation (Details) | Feb. 28, 2015 | |
Equity Method Investment, Ownership Percentage | 100.00% | |
GolfPark Plaza, S.A [Member] | PANAMA | ||
Equity Method Investment, Ownership Percentage | 50.00% | [1] |
Price Plaza Alajuela PPA, S.A [Member] | COSTA RICA | ||
Equity Method Investment, Ownership Percentage | 50.00% | [1] |
[1] | Joint venture interests are recorded as investment in unconsolidated affiliates on the consolidated balance sheets. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Restricted Cash (Details) (USD $) | Feb. 28, 2015 | Aug. 31, 2014 | ||
In Thousands, unless otherwise specified | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Restricted Cash and Cash Equivalents, Current | $1,500 | $2,353 | ||
Restricted Cash and Cash Equivalents, Noncurrent | 25,428 | 27,013 | ||
Restricted Cash and Cash Equivalents | 26,928 | 29,366 | ||
Federalregulatoryrequirements [Member] | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Restricted Cash and Cash Equivalents, Current | 57 | [1] | 58 | [1] |
Restricted Cash and Cash Equivalents, Noncurrent | 1,428 | [1] | 1,293 | [1] |
Land [Member] | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Restricted Cash and Cash Equivalents, Current | 1,443 | 1,095 | ||
Loans [Member] | Banco del Pais [Member] | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Restricted Cash and Cash Equivalents, Current | 0 | 1,200 | ||
Restricted Cash and Cash Equivalents, Noncurrent | 0 | 1,720 | ||
Loans [Member] | Citibank and Scotiabank [Member] | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Restricted Cash and Cash Equivalents, Noncurrent | $24,000 | $24,000 | ||
[1] | (1) Other short-term and long-term restricted cash consists mainly of cash deposits held within banking institutions in compliance with federal regulatory requirements in Costa Rica and Panama. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Tax Receivable (Details) (USD $) | Feb. 28, 2015 | Aug. 31, 2014 |
Value Added Tax Receivable, Current | $8,013,000 | $3,565,000 |
Value Added Tax Receivable, Noncurrent | 19,035,000 | 17,115,000 |
Value Added Tax Receivable | 27,048,000 | 20,680,000 |
Income Taxes Receivable, Current | 2,803,000 | 1,916,000 |
Income Taxes Receivable, Noncurrent | 7,633,000 | 7,218,000 |
Income Taxes Receivable | 10,436,000 | 9,134,000 |
UNKNOWN COUNTRY | ||
Value Added Tax Receivable | 6,300,000 | 5,700,000 |
Income Taxes Receivable | 178,000 | |
Deferred Tax Assets, Net | $1,100,000 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Balance Sheet Location, Fair Value (Details) (USD $) | Feb. 28, 2015 | Aug. 31, 2014 |
In Thousands, unless otherwise specified | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, including current portion | $105,600 | $92,893 |
Reported Value Measurement [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, including current portion | $105,120 | $91,439 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Fair Value Hierarchy (Details) (Fair Value, Measurements, Recurring [Member], USD $) | Feb. 28, 2015 | Aug. 31, 2014 | ||
In Thousands, unless otherwise specified | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative Assets (Liabilities), at Fair Value, Net | $6,410 | $1,590 | ||
Fair Value, Inputs, Level 1 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative Assets (Liabilities), at Fair Value, Net | 0 | 0 | ||
Fair Value, Inputs, Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative Assets (Liabilities), at Fair Value, Net | 6,410 | 1,590 | ||
Fair Value, Inputs, Level 3 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative Assets (Liabilities), at Fair Value, Net | 0 | 0 | ||
Cross Currency Interest Rate Contract [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative Asset, Current | 495 | |||
Derivative Asset, Noncurrent | 6,996 | 970 | ||
Derivative Liability, Noncurrent | -246 | |||
Cross Currency Interest Rate Contract [Member] | Fair Value, Inputs, Level 1 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative Asset, Current | 0 | |||
Derivative Asset, Noncurrent | 0 | 0 | ||
Derivative Liability, Noncurrent | 0 | |||
Cross Currency Interest Rate Contract [Member] | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative Asset, Current | 0 | [1] | 495 | [1] |
Derivative Asset, Noncurrent | 6,996 | [1] | 970 | [1] |
Derivative Liability, Noncurrent | -246 | [2] | ||
Cross Currency Interest Rate Contract [Member] | Fair Value, Inputs, Level 3 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative Asset, Current | 0 | |||
Derivative Asset, Noncurrent | 0 | 0 | ||
Derivative Liability, Noncurrent | 0 | |||
Interest Rate Swap [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative Asset, Noncurrent | 125 | |||
Derivative Liability, Noncurrent | -340 | |||
Interest Rate Swap [Member] | Fair Value, Inputs, Level 1 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative Asset, Noncurrent | 0 | |||
Derivative Liability, Noncurrent | 0 | |||
Interest Rate Swap [Member] | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative Asset, Noncurrent | 0 | [3] | 125 | [3] |
Derivative Liability, Noncurrent | -340 | [3] | 0 | [3] |
Interest Rate Swap [Member] | Fair Value, Inputs, Level 3 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative Asset, Noncurrent | 0 | |||
Derivative Liability, Noncurrent | 0 | |||
Forward Foreign Exchange Contracts [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative Asset, Current | 1,064 | 0 | ||
Derivative Liability, Current | 0 | -14 | ||
Derivative Assets (Liabilities), at Fair Value, Net | 1,064 | -14 | ||
Forward Foreign Exchange Contracts [Member] | Fair Value, Inputs, Level 1 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative Asset, Current | 0 | 0 | ||
Derivative Liability, Current | 0 | 0 | ||
Derivative Assets (Liabilities), at Fair Value, Net | 0 | 0 | ||
Forward Foreign Exchange Contracts [Member] | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative Asset, Current | 1,064 | 0 | ||
Derivative Liability, Current | 0 | -14 | ||
Derivative Assets (Liabilities), at Fair Value, Net | 1,064 | -14 | ||
Forward Foreign Exchange Contracts [Member] | Fair Value, Inputs, Level 3 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative Asset, Current | 0 | 0 | ||
Derivative Liability, Current | 0 | 0 | ||
Derivative Assets (Liabilities), at Fair Value, Net | $0 | $0 | ||
[1] | (1)B The effective portion of the cross-currency interest rate swaps for this subsidiary was recorded to Accumulated other comprehensive (income)/loss for $(4.9) million and $(917,000) net of tax as of FebruaryB 28, 2015 and AugustB 31, 2014, respectively. The Company has recorded a deferred tax liability amount with an offset to other comprehensive income - tax of $(2.1) million and $(548,000) as of FebruaryB 28, 2015 and AugustB 31, 2014, respectively, related to asset positions of cross-currency interest rate swaps. However, the equity effect of this deferred tax liability is offset by the full valuation allowance provided for the net deferred tax asset recorded for this subsidiary. | |||
[2] | (3)B The effective portion of the cross-currency interest rate swaps for this subsidiary was recorded to Accumulated other comprehensive (income)/loss for $172,000 and $0 net of tax as of FebruaryB 28, 2015 and AugustB 31, 2014, respectively.B The Company has recorded a deferred tax asset amount with an offset to other comprehensive income - tax of $74,000 and $0 as of FebruaryB 28, 2015 and AugustB 31, 2014, respectively. | |||
[3] | (2)B The effective portion of theB interest rate swapsB was recorded to Accumulated other comprehensive loss / (income) for $254,000 and $(94,000) net of tax as of FebruaryB 28, 2015 and AugustB 31, 2014, respectively. The Company has recorded a deferred tax asset / (liability) amount with an offset to other comprehensive income - tax of $86,000 and $(31,000) as of FebruaryB 28, 2015 and AugustB 31, 2014, respectively. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Goodwill (Details) (USD $) | 6 Months Ended | ||
In Thousands, unless otherwise specified | Feb. 28, 2015 | Aug. 31, 2014 | Feb. 28, 2014 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |||
Goodwill | $36,069 | $36,108 | $36,321 |
Goodwill, Translation Adjustments | ($39) |
SUMMARY_OF_SIGNIFICANT_ACCOUNT9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Revenue Recognition (Details) (USD $) | 6 Months Ended |
Feb. 28, 2015 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Platinum membership rebate | 2.00% |
Maximum Platinum Membership Rebate | $500 |
Recovered_Sheet1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Foreign Currency Translation (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 |
Accounting Policies [Line Items] | ||||
Other Nonoperating Income (Expense) | ($1,659) | $712 | ($4,291) | $1,023 |
Foreign Currency Gain (Loss) [Member] | ||||
Accounting Policies [Line Items] | ||||
Other Nonoperating Income (Expense) | ($1,659) | $712 | ($4,291) | $1,023 |
Recovered_Sheet2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Income Tax (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 |
Income Taxes [Line Items] | ||||
Federal tax provision at statutory rates | 35.00% | 35.00% | 35.00% | 35.00% |
State Taxes, net of Federal benefit | 0.30% | 0.20% | 0.40% | 0.30% |
Differences in foreign tax rates | -5.00% | -5.30% | -4.80% | -4.80% |
Permanent items and other adjustments | 3.80% | -1.70% | 3.50% | -0.20% |
Increase (decrease) in Foreign valuation allowance | 1.20% | 0.00% | 2.00% | -0.10% |
Provision for income taxes | 35.30% | 28.20% | 36.10% | 30.20% |
Payments under appeal [Member] | ||||
Income Taxes [Line Items] | ||||
Payments for Other Taxes | 4.2 | |||
Tax effect of foreign currency [Member] | ||||
Income Taxes [Line Items] | ||||
Effective income tax rate change | 2.00% | 1.10% | ||
Increased Taxable Loss in Colombia [Member] | ||||
Income Taxes [Line Items] | ||||
Effective income tax rate change | -4.20% | -4.70% | ||
Tax contingencies [Member] | ||||
Income Taxes [Line Items] | ||||
Provisional assessments | 5.2 | |||
Tax contingencies [Member] | Withholding taxes [Member] | ||||
Income Taxes [Line Items] | ||||
Provisional assessments | 2.6 |
PROPERTY_AND_EQUIPMENT_NET_Pro1
PROPERTY AND EQUIPMENT, NET Property Plant and Equipment (Details) (USD $) | 3 Months Ended | 6 Months Ended | |||
Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | Aug. 31, 2014 | |
Property, Plant and Equipment [Line Items] | |||||
Property, Plant and Equipment, Gross | $581,984,000 | $581,984,000 | $572,374,000 | ||
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | -157,624,000 | -157,624,000 | -146,049,000 | ||
Property, Plant and Equipment, Net | 424,360,000 | 424,360,000 | 426,325,000 | ||
Depreciation and amortization expense | 8,636,000 | 7,139,000 | 16,433,000 | 13,793,000 | |
Total interest capitalized | 7,106,000 | 7,106,000 | 6,542,000 | ||
Interest expense capitalized | 147,000 | 194,000 | 763,000 | 493,000 | |
Accounts Payable, Current | 233,266,000 | 233,266,000 | 223,559,000 | ||
Accrued Liabilities, Current | 22,193,000 | 22,193,000 | 21,030,000 | ||
Land [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, Plant and Equipment, Gross | 126,658,000 | 126,658,000 | 124,082,000 | ||
Building and Building Improvements [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, Plant and Equipment, Useful Life, Minimum | 10 years | ||||
Property, Plant and Equipment, Gross | 274,401,000 | 274,401,000 | 244,485,000 | ||
Furniture, Fixtures and Equipment [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, Plant and Equipment, Useful Life, Minimum | 3 years | ||||
Property, Plant and Equipment, Gross | 156,857,000 | 156,857,000 | 148,143,000 | ||
Construction in Progress [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, Plant and Equipment, Gross | 24,068,000 | 24,068,000 | 55,664,000 | ||
Accounts Payable, Current | 100,000 | 100,000 | 2,900,000 | ||
Accrued Liabilities, Current | $1,600,000 | $1,600,000 | $1,200,000 | ||
Maximum [Member] | Building and Building Improvements [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, Plant and Equipment, Useful Life, Minimum | 25 years | ||||
Maximum [Member] | Furniture, Fixtures and Equipment [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, Plant and Equipment, Useful Life, Minimum | 15 years |
EARNINGS_PER_SHARE_Details
EARNINGS PER SHARE (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 |
Earnings Per Share [Abstract] | ||||
Net income from continuing operations | $24,835 | $28,278 | $45,482 | $49,710 |
Less: Allocation of income to unvested stockholders | -259 | -504 | -580 | -932 |
Net earnings available to common stockholders | $24,576 | $27,774 | $44,902 | $48,778 |
Basic weighted average shares outstanding | 29,827 | 29,724 | 29,809 | 29,707 |
Add dilutive effect of stock options (two-class method) | 6 | 12 | 7 | 12 |
Diluted average shares outstanding | 29,833 | 29,736 | 29,816 | 29,719 |
Basic income per share from continuing operations | $0.82 | $0.93 | $1.50 | $1.64 |
Diluted income per share from continuing operations | $0.82 | $0.93 | $1.50 | $1.64 |
STOCKHOLDERS_EQUITY_Dividends_1
STOCKHOLDERS EQUITY Dividends (Details) (USD $) | 0 Months Ended | 3 Months Ended | 6 Months Ended | ||||
Feb. 04, 2015 | Jan. 23, 2014 | Feb. 28, 2015 | Aug. 31, 2014 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | |
Common Stock, Dividends, Per Share, Cash Paid | $0.35 | $0.35 | |||||
Common Stock, Dividends, Per Share, Declared | $0.70 | $0.70 | $0.70 | $0.70 | $0.70 | $0.70 | |
first of two dividend payments [Member] | |||||||
Common Stock, Dividends, Per Share, Cash Paid | $0.35 | ||||||
Second of 2 dividend payments [Member] | |||||||
common stock dividends, per share, payable | $0.35 |
STOCKHOLDERS_EQUITY_Other_Comp1
STOCKHOLDERS EQUITY Other Comprehensive Income (Details) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||
In Thousands, unless otherwise specified | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | Aug. 31, 2014 | Aug. 31, 2013 | |||||
Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Net of Tax | ($72,967) | ($54,693) | ($72,967) | ($54,693) | ($50,410) | ($42,321) | |||||
Accumulated Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Net of Tax | 89 | -141 | 89 | -141 | 113 | -152 | |||||
Accumulated Other Comprehensive Income (Loss), Cumulative Changes in Net Gain (Loss) from Cash Flow Hedges, Effect Net of Tax | 4,479 | 1,920 | 4,479 | 1,920 | 1,011 | 998 | |||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | -68,399 | -52,914 | -68,399 | -52,914 | -49,286 | -41,475 | |||||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax | -10,906 | [1] | -13,661 | [1] | -22,557 | [1] | -12,372 | [1] | -8,089 | ||
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Net Unamortized Gain (Loss) Arising During Period, Net of Tax | -24 | 11 | 260 | ||||||||
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Net of Tax | 3,468 | 922 | 101 | ||||||||
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | -19,113 | -11,439 | -7,728 | ||||||||
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Adjustment, Net of Tax | 5 | [2] | |||||||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Net of Tax | -88 | [3],[4] | |||||||||
Other Comprehensive Income (Loss), adjustments, net of tax | ($83) | ||||||||||
[1] | (1) Translation adjustments arising in translating the financial statements of a foreign entity have no effect on the income taxes of that foreign entity. They may, however, affect: (a) the amount, measured in the parent entity's reporting currency, of withholding taxes assessed on dividends paid to the parent entity and (b) the amount of taxes assessed on the parent entity by the government of its country. The Company has determined that the reinvestment of earnings of its foreign subsidiaries are indefinite because of the long-term nature of the Company's foreign investment plans. Therefore, deferred taxes are not provided for on translation adjustments related to non-remitted earnings of the Company's foreign subsidiaries. | ||||||||||
[2] | (2) Amounts reclassified from accumulated other comprehensive income (loss) related to the minimum pension liability are included in warehouse club operations in the Company's Consolidated Statements of Income. | ||||||||||
[3] | (1) See Note 9 - Derivative Instruments and Hedging Activities. | ||||||||||
[4] | (3) Amounts reclassified from accumulated other comprehensive income (loss) for settlement of derivative instruments are included in other income (expense), net in the Company's Consolidated Statements of Income. |
STOCKHOLDERS_EQUITY_Retained_E1
STOCKHOLDERS EQUITY Retained Earnings Appropriated (Details) (USD $) | Feb. 28, 2015 | Aug. 31, 2014 |
In Thousands, unless otherwise specified | ||
Retained Earnings Appropriated [Abstract] | ||
Retained Earnings, Appropriated | $4,916 | $4,556 |
STOCK_BASED_COMPENSATION_Sched
STOCK BASED COMPENSATION Schedule of shared based arrangement (Details) (USD $) | 3 Months Ended | 6 Months Ended | |||||
In Thousands, except Share data, unless otherwise specified | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | Aug. 31, 2014 | Aug. 31, 2013 | Oct. 31, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Common Stock, Shares Authorized | 45,000,000 | 45,000,000 | 45,000,000 | ||||
Options granted to directors | $9 | $7 | $37 | $37 | |||
Restricted stock awards | 1,454 | 1,634 | 2,703 | 2,783 | |||
Restricted stock units | 321 | 250 | 600 | 501 | |||
Stock-based compensation expense | 1,784 | 1,891 | 3,340 | 3,321 | |||
Remaining unrecognized compensation cost (in thousands) | 18,045 | 23,520 | 18,045 | 23,520 | |||
Weighted average period of time over which this cost will be recognized (years) | 6 years | 6 years | |||||
Excess tax benefit (deficiency) on stock-based compensation (in thousands) | 1,457 | 1,345 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 367,828 | 494,637 | 367,828 | 494,637 | 488,416 | 623,424 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 16,911 | 8,316 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period | -720 | -1,732 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | -136,779 | -135,371 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $89.85 | $112.37 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value | $44.21 | $39.71 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period, Weighted Average Grant Date Fair Value | $40.40 | $49.37 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Total Fair Value | 12,166 | 12,749 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Shares Purchased for Award | 49,931 | 48,291 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Shares Purchased for Award, Amount | $4,441 | $4,548 | |||||
Stock Issued During Period, Shares, Treasury Stock Reissued | 0 | 0 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 20,000 | 20,000 | 23,000 | ||||
2013 Equity Incentive Award Plan [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Common Stock, Shares Authorized | 1,332,540 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 600,000 | 888,353 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 854,864 | 854,864 | 821,124 |
COMMITMENTS_AND_CONTINGENCIES_1
COMMITMENTS AND CONTINGENCIES (Details) (USD $) | 6 Months Ended | ||
Feb. 28, 2015 | Aug. 31, 2014 | ||
Loss Contingencies [Line Items] | |||
Accrual for Taxes Other than Income Taxes, Current | $3,000,000 | $3,100,000 | |
Operating Leases, Future Minimum Payments Due, Next Twelve Months | 7,309,000 | [1] | |
Operating Leases, Future Minimum Payments, Due in Two Years | 9,785,000 | [1] | |
Operating Leases, Future Minimum Payments, Due in Three Years | 10,355,000 | [1] | |
Operating Leases, Future Minimum Payments, Due in Four Years | 10,326,000 | [1] | |
Operating Leases, Future Minimum Payments, Due in Five Years | 10,260,000 | [1] | |
Operating Leases, Future Minimum Payments, Due Thereafter | 81,442,000 | [1] | |
Operating Leases, Future Minimum Payments Due | 129,477,000 | [1] | |
Sub-Lease Income | 372,000 | ||
Contractual Obligation | 4,500,000 | ||
Land under Purchase Options, Recorded | 1,600,000 | ||
Land under Purchase Options, Not Recorded | 21,400,000 | ||
Distribution Center Services in Mexico [Member] | |||
Loss Contingencies [Line Items] | |||
Long-term Purchase Commitment, Time Period | 3 years | ||
Purchase Commitment, Remaining Minimum Amount Committed | $414,000 | ||
[1] | (1)Operating lease obligations have been reduced by approximately $372,000 to reflect sub-lease income. Certain obligations under leasing arrangements are collateralized by the underlying asset being leased. |
DEBT_Shortterm_Details
DEBT - Short-term (Details) (USD $) | Feb. 28, 2015 | Aug. 31, 2014 |
In Thousands, unless otherwise specified | ||
Line of Credit Facility [Line Items] | ||
Total Amount of Facilities | $59,387 | $61,869 |
Facilities Available | 54,537 | 61,433 |
Debt, Weighted Average Interest Rate | 5.86% | |
Short-term Borrowings | ||
Line of Credit Facility [Line Items] | ||
Line of Credit, Current | 4,470 | 0 |
Letters of Credit | ||
Line of Credit Facility [Line Items] | ||
Line of Credit, Current | 380 | 436 |
Complies with Financial convenants [Member] | ||
Line of Credit Facility [Line Items] | ||
Line of Credit, Current | $40,000 |
DEBT_Annual_Maturities_Details
DEBT - Annual Maturities (Details) (USD $) | Feb. 28, 2015 | Aug. 31, 2014 | ||
In Thousands, unless otherwise specified | ||||
Maturities of long-term debt | ||||
2016 | $14,792 | |||
2017 | 29,679 | |||
2018 | 12,626 | |||
2019 | 12,176 | |||
2020 | 32,021 | |||
Thereafter | 3,826 | |||
Long-term Debt | $105,120 | [1] | $91,439 | [2] |
[1] | (3) The carrying amount cash assets assigned as collateral for this total was $24.0 million and the carrying amount on non-cash assets assigned as collateral for this total was $103.5 million. | |||
[2] | (1)B The carrying amount cash assets assigned as collateral for this total was $24.6 million and the carrying amount on non-cash assets assigned as collateral for this total was $84.2 million. |
DEBT_Debt_Long_Term_Details
DEBT Debt - Long Term (Details) (USD $) | Feb. 28, 2015 | Aug. 31, 2014 | ||
Debt Instrument [Line Items] | ||||
Debt Instrument, Collateral, Cash | $24,000,000 | $24,600,000 | ||
Debt Instrument, Collateral, Non-Cash | 103,500,000 | 84,200,000 | ||
Long-term Debt, Current Maturities | 14,792,000 | 11,848,000 | ||
Long-term Debt, Excluding Current Maturities | 90,328,000 | 79,591,000 | ||
Long-term Debt | 105,120,000 | [1] | 91,439,000 | [2] |
Proceeds from long-term debt [Member] | COLOMBIA | ||||
Debt Instrument [Line Items] | ||||
Long-term Debt, Current Maturities | 1,500,000 | |||
Long-term Debt, Excluding Current Maturities | 13,500,000 | |||
Long-term Debt | 15,000,000 | |||
Proceeds from long-term debt [Member] | TRINIDAD AND TOBAGO | ||||
Debt Instrument [Line Items] | ||||
Long-term Debt, Current Maturities | 907,000 | |||
Long-term Debt, Excluding Current Maturities | 2,720,000 | |||
Long-term Debt | 3,627,000 | |||
Proceeds from long-term debt [Member] | HONDURAS | ||||
Debt Instrument [Line Items] | ||||
Long-term Debt, Current Maturities | 1,600,000 | |||
Long-term Debt, Excluding Current Maturities | 6,750,000 | |||
Long-term Debt | 8,350,000 | |||
Proceeds from long-term debt [Member] | PANAMA | ||||
Debt Instrument [Line Items] | ||||
Long-term Debt, Current Maturities | 1,000,000 | |||
Long-term Debt, Excluding Current Maturities | 9,000,000 | |||
Long-term Debt | 10,000,000 | |||
Repayments of long-term debt [Member] | TRINIDAD AND TOBAGO | ||||
Debt Instrument [Line Items] | ||||
Long-term Debt, Current Maturities | -900,000 | |||
Long-term Debt, Excluding Current Maturities | -2,325,000 | |||
Long-term Debt | -3,225,000 | |||
Repayments of long-term debt [Member] | HONDURAS | ||||
Debt Instrument [Line Items] | ||||
Long-term Debt, Current Maturities | -87,000 | |||
Long-term Debt, Excluding Current Maturities | 0 | |||
Long-term Debt | -87,000 | |||
Repayments of long-term debt [Member] | HONDURAS | Scotiabank [Member] | ||||
Debt Instrument [Line Items] | ||||
Long-term Debt, Current Maturities | -3,200,000 | |||
Long-term Debt, Excluding Current Maturities | 0 | |||
Long-term Debt | -3,200,000 | |||
Repayments of long-term debt [Member] | HONDURAS | Banco de America Central [Member] | ||||
Debt Instrument [Line Items] | ||||
Long-term Debt, Current Maturities | 0 | |||
Long-term Debt, Excluding Current Maturities | -5,000,000 | |||
Long-term Debt | -5,000,000 | |||
Regularly scheduled loan payments [Member] | ||||
Debt Instrument [Line Items] | ||||
Long-term Debt, Current Maturities | -579,000 | |||
Long-term Debt, Excluding Current Maturities | -4,567,000 | |||
Long-term Debt | -5,146,000 | |||
Reclassifications of long-term debt [Member] | ||||
Debt Instrument [Line Items] | ||||
Long-term Debt, Current Maturities | 2,850,000 | |||
Long-term Debt, Excluding Current Maturities | -2,850,000 | |||
Long-term Debt | 0 | |||
Other Comprehensive Income Location [Domain] | Reclassifications of long-term debt [Member] | ||||
Debt Instrument [Line Items] | ||||
Long-term Debt, Current Maturities | -147,000 | [3] | ||
Long-term Debt, Excluding Current Maturities | -6,491,000 | [3] | ||
Long-term Debt | -6,638,000 | [3] | ||
Complies with Financial convenants [Member] | Group of Subsidiaries [Member] | ||||
Debt Instrument [Line Items] | ||||
Long-term Debt | $78,300,000 | $62,500,000 | ||
[1] | (3) The carrying amount cash assets assigned as collateral for this total was $24.0 million and the carrying amount on non-cash assets assigned as collateral for this total was $103.5 million. | |||
[2] | (1)B The carrying amount cash assets assigned as collateral for this total was $24.6 million and the carrying amount on non-cash assets assigned as collateral for this total was $84.2 million. | |||
[3] | (2)B These foreign currency translation adjustments are recorded within Other comprehensive income. |
DERIVATIVE_INSTRUMENTS_AND_HED2
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES Derivative Instruments and Hedging Activities (Details) (USD $) | 6 Months Ended | 12 Months Ended | 3 Months Ended | 6 Months Ended | ||||||||||||||||
Feb. 28, 2015 | Aug. 31, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2014 | Dec. 16, 2014 | Dec. 10, 2014 | Dec. 09, 2014 | Oct. 23, 2014 | Aug. 01, 2014 | 22-May-14 | Dec. 11, 2012 | Feb. 21, 2012 | 5-May-11 | Oct. 21, 2011 | ||||||
Derivative [Line Items] | ||||||||||||||||||||
Derivative Liability, Notional Amount | $83,808,000 | $60,200,000 | $83,808,000 | |||||||||||||||||
Interest Rate Swap [Member] | ||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net | 254,000 | -94,000 | ||||||||||||||||||
Other Comprehensive Income (Loss), Tax | 86,000 | -31,000 | ||||||||||||||||||
Assets [Member] | Cross Currency Interest Rate Contract [Member] | ||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net | -4,900,000 | -917,000 | ||||||||||||||||||
deferred tax liability [Member] | Cross Currency Interest Rate Contract [Member] | ||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||
Other Comprehensive Income (Loss), Tax | -2,100,000 | -548,000 | ||||||||||||||||||
Liability [Member] | Cross Currency Interest Rate Contract [Member] | ||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net | 172,000 | 0 | ||||||||||||||||||
Deferred Tax Asset [Domain] | Cross Currency Interest Rate Contract [Member] | ||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||
Other Comprehensive Income (Loss), Tax | 74,000 | 0 | ||||||||||||||||||
El Salvador $4M Interest Rate Swap [Member] | ||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||
Derivative, Notional Amount | 4,000,000 | |||||||||||||||||||
Derivative, Fixed Interest Rate | 4.78% | |||||||||||||||||||
Colombia $15M Cross Currency Interest Rate Swap [Member] | ||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||
Derivative, Notional Amount | 15,000,000 | |||||||||||||||||||
Derivative, Fixed Interest Rate | 8.25% | |||||||||||||||||||
Panama $10M Interest Rate Swap [Member] | ||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||
Derivative, Notional Amount | 10,000,000 | |||||||||||||||||||
Derivative, Fixed Interest Rate | 5.16% | |||||||||||||||||||
Honduras $5M Cross Currency Interest Rate Swap [Member] [Member] | ||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||
Derivative, Notional Amount | 5,000,000 | |||||||||||||||||||
Derivative, Fixed Interest Rate | 11.60% | |||||||||||||||||||
Panama $5M Interest Rate Swap [Member] | ||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||
Derivative, Notional Amount | 5,000,000 | |||||||||||||||||||
Derivative, Fixed Interest Rate | 4.89% | |||||||||||||||||||
Panama $20M Interest Rate Swap [Member] | ||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||
Derivative, Notional Amount | 19,800,000 | |||||||||||||||||||
Derivative, Fixed Interest Rate | 4.98% | |||||||||||||||||||
Panama $4M Interest Rate Swap [Member] | ||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||
Derivative, Notional Amount | 3,970,000 | |||||||||||||||||||
Derivative, Fixed Interest Rate | 4.98% | |||||||||||||||||||
Colombia $8M Cross currency interest rate swap [Member] [Member] | ||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||
Derivative, Notional Amount | 8,000,000 | 8,000,000 | 8,000,000 | |||||||||||||||||
Derivative, Fixed Interest Rate | 4.79% | 6.02% | 6.09% | |||||||||||||||||
Colombia $6M Cross Currency Interest Rate Swap [Member] | ||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||
Derivative, Notional Amount | 6,000,000 | |||||||||||||||||||
Derivative, Fixed Interest Rate | 5.45% | |||||||||||||||||||
Colombia $2M Cross currency interest rate swap [Member] | ||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||
Derivative, Notional Amount | 2,000,000 | |||||||||||||||||||
Derivative, Fixed Interest Rate | 5.30% | |||||||||||||||||||
Derivative Swaps [Member] | ||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||
interest expense (variable) on borrowings for derivatives | 933,000 | [1] | 584,000 | [1] | 113,000 | [1] | 240,000 | [1] | ||||||||||||
Gain (Loss) on Derivative Instruments, Net, Pretax | 1,226,000 | [2] | 714,000 | [2] | 334,000 | [2] | 764,000 | [2] | ||||||||||||
interest expense (fixed) on borrowings of derivatives | 2,159,000 | 1,298,000 | 447,000 | 1,004,000 | ||||||||||||||||
Forward Foreign Exchange Contracts [Member] | ||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||
Gain (Loss) on Derivative Instruments, Net, Pretax | 6,134,000 | 3,521,000 | 62,000 | 185,000 | ||||||||||||||||
Fair Value, Measurements, Recurring [Member] | ||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||
Derivative Assets (Liabilities), at Fair Value, Net | 6,410,000 | 1,590,000 | 6,410,000 | |||||||||||||||||
Fair Value, Measurements, Recurring [Member] | Forward Foreign Exchange Contracts [Member] | ||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||
Derivative Asset, Current | 1,064,000 | 0 | 1,064,000 | |||||||||||||||||
Derivative Liability, Current | 0 | -14,000 | 0 | |||||||||||||||||
Derivative Assets (Liabilities), at Fair Value, Net | 1,064,000 | -14,000 | 1,064,000 | |||||||||||||||||
Fair Value, Measurements, Recurring [Member] | Cross Currency Interest Rate Contract [Member] | ||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||
Derivative Asset, Current | 495,000 | |||||||||||||||||||
Derivative Asset, Noncurrent | 6,996,000 | 970,000 | 6,996,000 | |||||||||||||||||
Derivative Liability, Noncurrent | -246,000 | -246,000 | ||||||||||||||||||
Fair Value, Measurements, Recurring [Member] | Interest Rate Swap [Member] | ||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||
Derivative Asset, Noncurrent | 125,000 | |||||||||||||||||||
Derivative Liability, Noncurrent | -340,000 | -340,000 | ||||||||||||||||||
Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | ||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||
Derivative Assets (Liabilities), at Fair Value, Net | 6,410,000 | 1,590,000 | 6,410,000 | |||||||||||||||||
Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | Forward Foreign Exchange Contracts [Member] | ||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||
Derivative Asset, Current | 1,064,000 | 0 | 1,064,000 | |||||||||||||||||
Derivative Liability, Current | 0 | -14,000 | 0 | |||||||||||||||||
Derivative Assets (Liabilities), at Fair Value, Net | 1,064,000 | -14,000 | 1,064,000 | |||||||||||||||||
Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | Cross Currency Interest Rate Contract [Member] | ||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||
Derivative Asset, Current | 0 | [3] | 495,000 | [3] | 0 | [3] | ||||||||||||||
Derivative Asset, Noncurrent | 6,996,000 | [3] | 970,000 | [3] | 6,996,000 | [3] | ||||||||||||||
Derivative Liability, Noncurrent | -246,000 | [4] | -246,000 | [4] | ||||||||||||||||
Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | Interest Rate Swap [Member] | ||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||
Derivative Asset, Noncurrent | 0 | [5] | 125,000 | [5] | 0 | [5] | ||||||||||||||
Derivative Liability, Noncurrent | -340,000 | [5] | 0 | [5] | -340,000 | [5] | ||||||||||||||
Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | Derivative Swaps [Member] | ||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||
Derivative Assets (Liabilities), at Fair Value, Net | 6,410,000 | [6] | 1,590,000 | [6] | 6,410,000 | [6] | ||||||||||||||
Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | Cross Currency Interest Rate Contract [Member] | ||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||
Derivative Liability, Noncurrent | 0 | [4] | ||||||||||||||||||
Scotiabank [Member] | ||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||
Derivative Liability, Notional Amount | 64,058,000 | 60,200,000 | 64,058,000 | |||||||||||||||||
Citibank [Member] | ||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||
Derivative Liability, Notional Amount | 19,750,000 | 0 | 19,750,000 | |||||||||||||||||
Bank of Nova Scotia [Member] | Forward Foreign Exchange Contracts [Member] | ||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||
Derivative, Notional Amount | $27,000,000 | $27,000,000 | ||||||||||||||||||
[1] | (1)B This amount is representative of the interest expense recognized on the underlying hedged transactions. | |||||||||||||||||||
[2] | (2)B This amount is representative of the interest expense recognized on the cross-currency interest rate swaps designated as cash flow hedging instruments. | |||||||||||||||||||
[3] | (1)B The effective portion of the cross-currency interest rate swaps for this subsidiary was recorded to Accumulated other comprehensive (income)/loss for $(4.9) million and $(917,000) net of tax as of FebruaryB 28, 2015 and AugustB 31, 2014, respectively. The Company has recorded a deferred tax liability amount with an offset to other comprehensive income - tax of $(2.1) million and $(548,000) as of FebruaryB 28, 2015 and AugustB 31, 2014, respectively, related to asset positions of cross-currency interest rate swaps. However, the equity effect of this deferred tax liability is offset by the full valuation allowance provided for the net deferred tax asset recorded for this subsidiary. | |||||||||||||||||||
[4] | (3)B The effective portion of the cross-currency interest rate swaps for this subsidiary was recorded to Accumulated other comprehensive (income)/loss for $172,000 and $0 net of tax as of FebruaryB 28, 2015 and AugustB 31, 2014, respectively.B The Company has recorded a deferred tax asset amount with an offset to other comprehensive income - tax of $74,000 and $0 as of FebruaryB 28, 2015 and AugustB 31, 2014, respectively. | |||||||||||||||||||
[5] | (2)B The effective portion of theB interest rate swapsB was recorded to Accumulated other comprehensive loss / (income) for $254,000 and $(94,000) net of tax as of FebruaryB 28, 2015 and AugustB 31, 2014, respectively. The Company has recorded a deferred tax asset / (liability) amount with an offset to other comprehensive income - tax of $86,000 and $(31,000) as of FebruaryB 28, 2015 and AugustB 31, 2014, respectively. | |||||||||||||||||||
[6] | (4)B DerivativesB listed on the above table were designated as cash flow hedging instruments. |
UNCONSOLIDATED_AFFILIATES_Deta
UNCONSOLIDATED AFFILIATES (Details) (PANAMA, USD $) | 3 Months Ended | 6 Months Ended |
Feb. 28, 2015 | Feb. 28, 2015 | |
sqft | ||
PANAMA | ||
Variable Interest Entity [Line Items] | ||
Square Footage of Leased Real Estate Property | 17,976 | |
Square Meters of Leased Real Estate Property | 1,670 | |
Operating Leases, Term | 15 years | |
Lessee Leasing Arrangements, Operating Leases, Renewal Term | 5 years | |
Operating Leases, Rent Expense | $8,800 | |
Operating Leases, Rent Expense, Net | $26,400 | $52,800 |
UNCONSOLIDATED_AFFILIATES_Maxi
UNCONSOLIDATED AFFILIATES - Maximum Exposure to Loss (Details) (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Feb. 28, 2015 | |
Maximum Loss Exposure | ||
Intial Investment | $6,809 | |
Additonal Contributions | 3,519 | |
Net Loss Inception to Date | -83 | |
Company's Variable Interest in Entity | 10,245 | |
Commitment to Future Additional Contributions | 1,002 | [1] |
Company's Maximum Exposure to Loss in Entity | 11,247 | [2] |
GolfPark Plaza, S.A | ||
Maximum Loss Exposure | ||
Ownership Percentage Interest in Joint Venture | 50.00% | |
Intial Investment | 4,616 | |
Additonal Contributions | 2,283 | |
Net Loss Inception to Date | -81 | |
Company's Variable Interest in Entity | 6,818 | |
Commitment to Future Additional Contributions | 217 | [1] |
Company's Maximum Exposure to Loss in Entity | 7,035 | [2] |
Price Plaza Alajuela, S.A. | ||
Maximum Loss Exposure | ||
Ownership Percentage Interest in Joint Venture | 50.00% | |
Intial Investment | 2,193 | |
Additonal Contributions | 1,236 | |
Net Loss Inception to Date | -2 | |
Company's Variable Interest in Entity | 3,427 | |
Commitment to Future Additional Contributions | 785 | [1] |
Company's Maximum Exposure to Loss in Entity | $4,212 | [2] |
[1] | (1)B The parties intend to seek alternate financing for the project, which could reduce the amount of investments each party would be required to provide. The parties may mutually agree on changes to the project, which could increase or decrease the amount of contributions each party is required to provide. | |
[2] | The maximum exposure is determined by adding the Companybs variable interest in the entity and any explicit or implicit arrangements that could require the Company to provide additional financial support. |
UNCONSOLIDATED_AFFILIATES_Fina
UNCONSOLIDATED AFFILIATES - Financial Information (Details) (USD $) | 3 Months Ended | 6 Months Ended | |||
In Thousands, unless otherwise specified | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | Aug. 31, 2014 |
Assets and Liabilities, Net | |||||
Current assets | $1,246 | $1,246 | $803 | ||
Noncurrent assets | 11,499 | 11,499 | 8,900 | ||
Current liabilities | 1,418 | 1,418 | 1,126 | ||
Noncurrent liabilities | 13 | 13 | 13 | ||
Net Income (Loss) | |||||
Net loss | $15 | $0 | $27 | $8 |
SEGMENTS_Details
SEGMENTS (Details) (USD $) | 3 Months Ended | 6 Months Ended | |||||||
In Thousands, unless otherwise specified | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | Aug. 31, 2014 | ||||
Country | Country | ||||||||
Segment Reporting Information [Line Items] | |||||||||
Number of countries and territories | 13 | 13 | |||||||
Segment Reporting Information | |||||||||
Revenue from external customers | $750,296 | $674,374 | $1,406,317 | $1,279,975 | |||||
Intersegment revenues | 0 | 0 | 0 | 0 | |||||
Depreciation and amortization | 8,636 | 7,139 | 16,433 | 13,793 | |||||
Operating income | 41,708 | 39,375 | 77,993 | 71,734 | |||||
Net income | 24,835 | 28,278 | 45,482 | 49,710 | |||||
Property, Plant and Equipment, Additions | 14,250 | 39,808 | 43,870 | 58,096 | |||||
Long-lived assets (other than deferred tax assets) | 534,369 | 474,548 | 534,369 | 474,548 | 529,064 | ||||
Goodwill | 36,069 | 36,321 | 36,069 | 36,321 | 36,108 | ||||
Identifiable assets | 986,366 | 834,388 | 986,366 | 834,388 | 938,070 | ||||
United States Operations | |||||||||
Segment Reporting Information | |||||||||
Revenue from external customers | 6,235 | 6,764 | 14,666 | 12,485 | |||||
Intersegment revenues | 259,611 | 209,102 | 597,939 | 514,694 | |||||
Depreciation and amortization | 545 | 583 | 1,087 | 1,155 | |||||
Operating income | 7,811 | 5,904 | 15,714 | 12,853 | |||||
Net income | 3,619 | 2,451 | 6,981 | 5,517 | |||||
Property, Plant and Equipment, Additions | 1,332 | 3,565 | -1,441 | [1] | 3,139 | ||||
Long-lived assets (other than deferred tax assets) | 14,045 | 13,152 | 14,045 | 13,152 | 16,584 | ||||
Goodwill | 0 | 0 | 0 | 0 | 0 | ||||
Identifiable assets | 62,021 | 57,377 | 62,021 | 57,377 | 91,175 | ||||
Central American Operations | |||||||||
Segment Reporting Information | |||||||||
Revenue from external customers | 426,226 | 403,087 | 809,390 | 762,622 | |||||
Intersegment revenues | 0 | 0 | 0 | 0 | |||||
Depreciation and amortization | 3,698 | 3,279 | 7,342 | 6,107 | |||||
Operating income | 37,122 | 34,076 | 68,254 | 61,163 | |||||
Net income | 28,846 | 28,919 | 53,174 | 50,810 | |||||
Property, Plant and Equipment, Additions | 8,425 | 9,269 | 23,231 | 22,922 | |||||
Long-lived assets (other than deferred tax assets) | 284,661 | 258,018 | 284,661 | 258,018 | 268,046 | ||||
Goodwill | 31,381 | 31,530 | 31,381 | 31,530 | 31,383 | ||||
Identifiable assets | 492,395 | 436,324 | 492,395 | 436,324 | 457,395 | ||||
Caribbean Operations | |||||||||
Segment Reporting Information | |||||||||
Revenue from external customers | 220,225 | 212,366 | 418,616 | 404,426 | |||||
Intersegment revenues | 1,507 | 1,143 | 2,890 | 2,619 | |||||
Depreciation and amortization | 2,451 | 2,264 | 4,739 | 4,483 | |||||
Operating income | 13,408 | 12,939 | 25,577 | 22,397 | |||||
Net income | 11,579 | 11,040 | 21,833 | 19,340 | |||||
Property, Plant and Equipment, Additions | 1,666 | 1,710 | 4,862 | 5,663 | |||||
Long-lived assets (other than deferred tax assets) | 112,877 | 115,316 | 112,877 | 115,316 | 113,134 | ||||
Goodwill | 4,688 | 4,791 | 4,688 | 4,791 | 4,725 | ||||
Identifiable assets | 241,096 | 218,513 | 241,096 | 218,513 | 223,251 | ||||
Colombia Operations [Member] | |||||||||
Segment Reporting Information | |||||||||
Revenue from external customers | 97,610 | 52,157 | 163,645 | 100,442 | |||||
Intersegment revenues | 0 | 0 | 0 | 0 | |||||
Depreciation and amortization | 1,942 | 1,013 | 3,265 | 2,048 | |||||
Operating income | -844 | 1,973 | -1,781 | 3,473 | |||||
Net income | -3,420 | 1,385 | -6,735 | 2,195 | |||||
Property, Plant and Equipment, Additions | 2,827 | 25,264 | 17,218 | 26,372 | |||||
Long-lived assets (other than deferred tax assets) | 122,786 | 88,062 | 122,786 | 88,062 | 131,300 | ||||
Goodwill | 0 | 0 | 0 | 0 | 0 | ||||
Identifiable assets | 190,854 | 122,174 | 190,854 | 122,174 | 166,249 | ||||
Reconciling Items | |||||||||
Segment Reporting Information | |||||||||
Revenue from external customers | 0 | [2] | 0 | ||||||
Intersegment revenues | -261,118 | [2] | -210,245 | [2] | -600,829 | [2] | -517,313 | [2] | |
Depreciation and amortization | 0 | [2] | |||||||
Operating income | -15,789 | [2] | -15,517 | [2] | -29,771 | [2] | -28,152 | ||
Net income | -15,789 | [2] | -15,517 | [2] | -29,771 | [2] | -28,152 | ||
Property, Plant and Equipment, Additions | 0 | [2] | |||||||
Long-lived assets (other than deferred tax assets) | 0 | 0 | 0 | 0 | 0 | ||||
Goodwill | 0 | 0 | 0 | 0 | 0 | ||||
Identifiable assets | 0 | 0 | 0 | 0 | 0 | ||||
Scenario, Previously Reported [Member] | |||||||||
Segment Reporting Information | |||||||||
Long-lived assets (other than deferred tax assets) | 472,751 | 472,751 | 525,902 | ||||||
Identifiable assets | 834,316 | 834,316 | 940,218 | ||||||
Scenario, Previously Reported [Member] | United States Operations | |||||||||
Segment Reporting Information | |||||||||
Long-lived assets (other than deferred tax assets) | 13,087 | 13,087 | 16,488 | ||||||
Identifiable assets | 57,377 | 57,377 | 91,190 | ||||||
Scenario, Previously Reported [Member] | Central American Operations | |||||||||
Segment Reporting Information | |||||||||
Long-lived assets (other than deferred tax assets) | 257,053 | 257,053 | 265,950 | ||||||
Identifiable assets | 436,252 | 436,252 | 457,325 | ||||||
Scenario, Previously Reported [Member] | Caribbean Operations | |||||||||
Segment Reporting Information | |||||||||
Long-lived assets (other than deferred tax assets) | 115,316 | 115,316 | 113,134 | ||||||
Scenario, Previously Reported [Member] | Colombia Operations [Member] | |||||||||
Segment Reporting Information | |||||||||
Long-lived assets (other than deferred tax assets) | 130,330 | 87,295 | 130,330 | 87,295 | |||||
Identifiable assets | 168,452 | 122,174 | 168,452 | 122,174 | |||||
Scenario, Reclass [Member] | |||||||||
Segment Reporting Information | |||||||||
Long-lived assets (other than deferred tax assets) | 1,797 | 1,797 | 3,162 | ||||||
Identifiable assets | 72 | 72 | -2,148 | ||||||
Scenario, Reclass [Member] | United States Operations | |||||||||
Segment Reporting Information | |||||||||
Long-lived assets (other than deferred tax assets) | 65 | 65 | 96 | ||||||
Identifiable assets | 0 | 0 | -15 | ||||||
Scenario, Reclass [Member] | Central American Operations | |||||||||
Segment Reporting Information | |||||||||
Long-lived assets (other than deferred tax assets) | 965 | 965 | 2,096 | ||||||
Identifiable assets | 72 | 72 | 70 | ||||||
Scenario, Reclass [Member] | Caribbean Operations | |||||||||
Segment Reporting Information | |||||||||
Long-lived assets (other than deferred tax assets) | 0 | 0 | 0 | ||||||
Identifiable assets | 0 | 0 | 0 | ||||||
Scenario, Reclass [Member] | Colombia Operations [Member] | |||||||||
Segment Reporting Information | |||||||||
Long-lived assets (other than deferred tax assets) | 970 | 767 | 970 | 767 | |||||
Identifiable assets | -2,203 | -2,203 | |||||||
Scenario, Actual [Member] | |||||||||
Segment Reporting Information | |||||||||
Long-lived assets (other than deferred tax assets) | 474,548 | 474,548 | 529,064 | ||||||
Identifiable assets | 834,388 | 834,388 | 938,070 | ||||||
Scenario, Actual [Member] | United States Operations | |||||||||
Segment Reporting Information | |||||||||
Long-lived assets (other than deferred tax assets) | 13,152 | 13,152 | 16,584 | ||||||
Identifiable assets | 57,377 | 57,377 | 91,175 | ||||||
Scenario, Actual [Member] | Central American Operations | |||||||||
Segment Reporting Information | |||||||||
Long-lived assets (other than deferred tax assets) | 258,018 | 258,018 | 268,046 | ||||||
Identifiable assets | 436,324 | 436,324 | 457,395 | ||||||
Scenario, Actual [Member] | Caribbean Operations | |||||||||
Segment Reporting Information | |||||||||
Long-lived assets (other than deferred tax assets) | 115,316 | 115,316 | 113,134 | ||||||
Identifiable assets | 218,513 | 218,513 | 223,251 | ||||||
Scenario, Actual [Member] | Colombia Operations [Member] | |||||||||
Segment Reporting Information | |||||||||
Long-lived assets (other than deferred tax assets) | 131,300 | 88,062 | 131,300 | 88,062 | |||||
Identifiable assets | $166,249 | $122,174 | $166,249 | $122,174 | |||||
[1] | (2)B The decrease in capital expenditures is a result of the transfers of capital assets from this segment to other segments. | ||||||||
[2] | (1)B The reconciling items reflect the amount eliminated on consolidation of intersegment transactions |
SUBSEQUENT_EVENTS_Details
SUBSEQUENT EVENTS (Details) (USD $) | 9 Months Ended |
31-May-15 | |
HONDURAS | Derivative Swaps [Member] | |
Subsequent Event [Line Items] | |
Line of Credit Facility, Interest Rate Description | P3M |
Debt Instrument, Basis Spread on Variable Rate | 3.25% |
Derivative, Notional Amount | $8,500,000 |
Derivative, Fixed Interest Rate | 10.75% |
Line of Credit Facility, Expiration Period | 5 years |
HONDURAS | Colombia, Pesos | Derivative Swaps [Member] | |
Subsequent Event [Line Items] | |
Derivative, Notional Amount | 185,600,000 |
COLOMBIA | Forward Foreign Exchange Contracts [Member] | |
Subsequent Event [Line Items] | |
Derivative, Notional Amount | 8,000,000 |
Banco de America Central [Member] | Loans [Member] | |
Subsequent Event [Line Items] | |
Repayments of Lines of Credit | 8,200,000 |
Line of Credit Facility, Maximum Borrowing Capacity | 13,700,000 |
Line of Credit Facility, Expiration Period | 10 years |
Grace Period for Loan Payments | P24M |
Banco de America Central [Member] | Colombia, Pesos | Loans [Member] | |
Subsequent Event [Line Items] | |
Repayments of Lines of Credit | 179,300,000 |
Line of Credit Facility, Maximum Borrowing Capacity | 286,000,000 |
Citibank [Member] | Loans [Member] | |
Subsequent Event [Line Items] | |
Line of Credit Facility, Maximum Borrowing Capacity | $8,500,000 |
Line of Credit Facility, Interest Rate Description | P3M |
Debt Instrument, Basis Spread on Variable Rate | 3.25% |
Line of Credit Facility, Expiration Period | 5 years |
Minimum [Member] | Banco de America Central [Member] | Loans [Member] | |
Subsequent Event [Line Items] | |
Line of Credit Facility, Interest Rate at Period End | 12.50% |
Maximum [Member] | Banco de America Central [Member] | Loans [Member] | |
Subsequent Event [Line Items] | |
Line of Credit Facility, Interest Rate at Period End | 12.75% |