PROPERTY AND EQUIPMENT

3 Months Ended

Nov. 30, 2011

NOTE 3 - PROPERTY AND EQUIPMENT

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

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

	November 30, 2011			August 31, 2011
Land	$	78,859		$	84,912
Building and improvements		191,641			192,245
Fixtures and equipment		94,445			89,239
Construction in progress		9,205			18,655
Total property and equipment, recorded at historical cost		374,150			385,051
Less: accumulated depreciation		(101,153	)		(103,940	)
Property and equipment, net	$	272,997		$	281,111

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

The Company capitalized during the first three months of fiscal year 2012 and 2011 approximately $18,000 and $190,000, respectively, in interest expense. The total interest capitalized as of November 30 and August 31, 2011 was $4.9 million and $4.3 million, respectively. The $4.9 million reported as of November 30, 2011 included approximately $708,000 reclassified from construction in process to capitalized interest related to the construction of the Colombia warehouse club.