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LEASES | 12 Months Ended
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Aug. 31, 2017
LEASES [Abstract] |
LEASES | NOTE 11 – LEASES ﻿ The Company is committed under non-cancelable operating leases for the rental of facilities and land. These leases expire or become subject to renewal between December 31, 2017 and January 29, 2044. As of August 31, 2017, the Company’s warehouse clubs occupied a total of approximately 2,925,7 31 square feet of which 522,131 square feet were on leased property. The following is a summary of the warehouse clubs and Company facilities located on leased property: ﻿ ﻿
﻿ |  |  |  |  |  |  |  |  |  |
﻿ |  |  |  |  |  |  |  |  |  |
﻿ |  |  |  |  |  | Approximate |  |  |  | Remaining
﻿ |  |  |  |  |  | Square |  | Current Lease |  | Option(s)
﻿Location |  | Facility Type |  | Date Opened |  | Footage |  | Expiration Date |  | to Extend
﻿Salitre, Colombia |  | Warehouse Club |  | October 29, 2014 |  | 98,566 |  | January 29, 2044 |  | 20 years
﻿Via Brazil, Panama |  | Warehouse Club |  | December 4, 1997 |  | 68,696 |  | October 31, 2026 |  | 10 years
﻿Miraflores, Guatemala |  | Warehouse Club |  | April 8, 1999 |  | 68,977 |  | December 31, 2020 |  | 5 years
﻿Pradera, Guatemala |  | Warehouse Club |  | May 29, 2001 |  | 48,438 |  | May 28, 2021 |  | none
﻿Tegucigalpa, Honduras |  | Warehouse Club |  | May 31, 2000 |  | 64,735 |  | May 30, 2020 |  | none
﻿Oranjestad, Aruba |  | Warehouse Club |  | March 23, 2001 |  | 64,627 |  | March 23, 2021 |  | 10 years
﻿Port of Spain, Trinidad |  | Warehouse Club |  | December 5, 2001 |  | 54,046 |  | July 5, 2031 |  | none
﻿St. Thomas, U.S.V.I. |  | Warehouse Club |  | May 4, 2001 |  | 54,046 |  | February 28, 2020 |  | 10 years
﻿Barbados |  | Storage Facility |  | December 1, 2012 |  | 12,517 |  | November 30, 2025 |  | 3 years
﻿Chaguanas, Trinidad |  | Employee Parking |  | May 1, 2009 |  | 4,944 |  | April 30, 2024 |  | none
﻿Chaguanas, Trinidad |  | Container Parking |  | April 1, 2010 |  | 65,340 |  | March 31, 2025 |  | none
﻿Jamaica |  | Storage and Distribution Facility |  | September 1, 2012 |  | 17,000 |  | July 14, 2019 |  | 2 years
﻿Santo Domingo, Dominican Republic |  | Central Offices |  | June 1, 2010 |  | 2,002 |  | January 14, 2021 |  | 5 years
﻿Bogota, Colombia |  | Central Offices |  | October 21, 2010 |  | 9,707 |  | December 31, 2017 |  | none
﻿San Diego, CA (1) |  | Corporate Headquarters |  | April 1, 2004 |  | 45,826 |  | May 31, 2026 |  | 5 years
﻿Miami, FL(2) |  | Dry Distribution Facility |  | March 1, 2008 |  | 206,041 |  | July 31, 2021 |  | none
﻿Miami, FL |  | Cold Distribution Facility |  | August 1, 2016 |  | 100,295 |  | December 31, 2027 |  | none
﻿Panama |  | Central Offices |  | November 4, 2014 |  | 17,975 |  | December 12, 2028 |  | 15 years
﻿Costa Rica |  | Storage and Distribution Facility |  | January 28, 2013 |  | 37,674 |  | January 27, 2019 |  | 3 years
﻿Costa Rica (3) |  | Distribution Facility and Parking Lot |  | March 26, 2018 |  | 233,794 |  | March 25, 2038 |  | 10 years
﻿Panama |  | Distribution Facility |  | August 14, 2017 |  | 4,874 |  | August 13, 2020 |  | 2 years
﻿Trinidad(4) |  | Storage and Distribution Facility |  | August 18, 2014 |  | 17,110 |  | August 17, 2017 |  | none
﻿
| (1) |  | On October 31, 2016, the contract to sub-lease 2,799 square feet of space to a third party expired. The Company has since occupied all 2,799 square feet of space as an expansion to its Corporate Headquarters and included the additional square feet in the table above.
| (2) |  | In January 2017, the Company purchased a distribution center in Medley, Miami-Dade County, Florida. The Company transferred its Miami dry distribution center activities that were previously in the leased facility to the new facility during the third quarter of fiscal year 2017. Some portions of the vacated space were subleased (and subsequently returned to the landlord) while the remainder remains available for sublease.
| (3) |  | In June 2017, the Company executed a contract to acquire 233,794 square feet of space for a regional distribution center and parking lot. Delivery date is expected to be March 26, 2018 and June 26, 2018, respectively.
| (4) |  | Although the Company’s lease agreement for the Trinidad storage and distribution facility expired on August 17, 2017, the Company continues to occupy the space as an agreement for a one-year renewal has been reached with the landlord, pending execution of the contract. The Company has also included this one-year lease as part of the minimum lease commitments.
The following table summarizes the components of rental expense charged for operating leases of open locations for fiscal years 2017, 2016 and 2015 (in thousands): ﻿ ﻿
﻿ |  |  |  |  |  |  |  |  |
﻿ |  |  |  |  |  |  |  |  |
﻿ |  | Years Ended August 31,
﻿ |  | 2017 |  | 2016 |  | 2015
﻿Minimum rental payments |  | $ | 11,223 |  | $ | 9,986 |  | $ | 10,074
﻿Deferred rent accruals |  |  | (80) |  |  | 1,363 |  |  | 1,355
﻿Total straight line rent expense |  |  | 11,143 |  |  | 11,349 |  |  | 11,429
﻿Contingent rental payments |  |  | 3,320 |  |  | 3,208 |  |  | 3,137
﻿Common area maintenance expense |  |  | 1,174 |  |  | 1,369 |  |  | 1,321
﻿Rental expense |  | $ | 15,637 |  | $ | 15,926 |  | $ | 15,887
﻿ Future minimum lease commitments for facilities under these leases with an initial term in excess of one year are as follows (in thousands): ﻿ ﻿
﻿ |  |  |  |
﻿ |  |  |  |
﻿ |  | Leased |
﻿Years Ended August 31, |  | Locations(1) |
﻿2018 |  | $ | 11,596 |
﻿2019 |  |  | 11,715 |
﻿2020 |  |  | 11,093 |
﻿2021 |  |  | 9,615 |
﻿2022 |  |  | 8,894 |
﻿Thereafter |  |  | 116,066 |
﻿Total |  | $ | 168,979 | (2)(3)
﻿
| (1) |  | Operating lease obligations have been reduced by approximately $928,000 to reflect sub-lease income. Certain obligations under leasing arrangements are collateralized by the underlying asset being leased.
| (2) |  | As of August 31, 2016, total future minimum lease commitments were $120.9 million. The increase during fiscal year 2017 is primarily related to the extension of an existing lease within the Company’s Guatemala subsidiary for its Pradera location. The subsidiary signed an extension on November 25, 2016, extending the lease termination date from May 31, 2021 to November 30, 2043. The lease extension included the real property at this location currently used by the Company and added additional square footage in the same shopping center to the lease. This has effectively provided the Company with possession of substantially all of the real property available at that location. The Company plans to expand and upgrade the current warehouse club and parking areas and to improve access into and out from the location.
| (3) |  | Future minimum lease payments include $3.2 million of lease payment obligations for the prior leased Miami distribution center. For the purposes of calculating the minimum lease payments, no reduction was considered for the potential sub-lease income the Company could receive during the remaining lease term. This potential sub-lease income was considered, however, for the purposes of calculating the exit obligation of $57,000 recorded on the balance sheet as of August 31, 2017. Projected income for any executed sub-leases would be used to reduce the amount reported as minimum lease payments.
﻿ ﻿ The following table summarizes the components of rental income recorded for operating leases for fiscal years 2017, 2016 and 2015 (in thousands): ﻿ ﻿
﻿ |  |  |  |  |  |  |  |  |
﻿ |  |  |  |  |  |  |  |  |
﻿ |  | Years Ended August 31,
﻿ |  | 2017 |  | 2016 |  | 2015
﻿Minimum rental receipts |  | $ | 2,654 |  | $ | 2,735 |  | $ | 2,873
﻿Deferred rent accruals |  |  | (17) |  |  | 56 |  |  | 47
﻿Total straight line rent income |  |  | 2,637 |  |  | 2,791 |  |  | 2,920
﻿Contingent rental receipts |  |  | 121 |  |  | 112 |  |  | 86
﻿Common maintenance area income |  |  | 141 |  |  | 151 |  |  | 148
﻿Rental income |  | $ | 2,899 |  | $ | 3,054 |  | $ | 3,154
﻿ The Company is the landlord for rental of land and/or building space for properties it owns. The following is a schedule of future minimum rental income on non-cancelable operating leases with an initial term in excess of one year from owned property as of August 31, 2017 (in thousands): ﻿ ﻿
﻿ |  |  |
﻿ |  |  |
﻿Years Ended August 31, |  | Amount
﻿2018 |  | $ | 2,427
﻿2019 |  |  | 2,103
﻿2020 |  |  | 1,835
﻿2021 |  |  | 1,562
﻿2022 |  |  | 941
﻿Thereafter |  |  | 4,407
﻿Total |  | $ | 13,275
﻿

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- Definition The entire disclosure for lessee entity's leasing arrangements including, but not limited to, all of the following: (a.) The basis on which contingent rental payments are determined, (b.) The existence and terms of renewal or purchase options and escalation clauses, (c.) Restrictions imposed by lease agreements, such as those concerning dividends, additional debt, and further leasing. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=77888251 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 840 -URI http://asc.fasb.org/topic&trid=2208923 + Details
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