CostcoAnnualReportFY2005

CostcoAnnualReportFY2005 - Annual Report 2005 Y EAR ENDED...

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Y E A R E N D E D A U G U S T 2 8 , 2 0 0 5 A n n u a l R e p o r t 2 0 0 5 2 0 0 5 A n n u a l R e p o r t 2 0 0 5
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THE COMPANY Costco Wholesale Corporation (“Costco” or the “Company”) began operations in 1983 in Seattle, Wash- ington. In October 1993, Costco merged with The Price Company, which had pioneered the membership ware- house concept in 1976, to form Price/Costco, Inc., a Delaware corporation. In January 1997, after the spin-off of most of its non-warehouse assets to Price Enterprises, Inc., the Company changed its name to Costco Companies, Inc. On August 30, 1999, the Company reincorporated from Delaware to Washington and changed its name to Costco Wholesale Corporation, which trades on the NASDAQ under the symbol “COST”. As of December 2005, the Company operated a chain of 471 warehouses in 37 states and Puerto Rico (346 locations), nine Canadian provinces (66 locations), the United Kingdom (17 locations), Korea (five locations), Taiwan (four locations, through a 50%-owned subsidiary) and Japan (five locations), as well as 28 warehouses in Mexico through a 50%-owned joint venture. CONTENTS Financial Highlights . ..................................................................... 1 Letter to Shareholders . .................................................................... 2 Map of Warehouse Locations . .............................................................. 6 BusinessOverview . ...................................................................... 8 Number of Warehouses/Ancillary Businesses . ................................................. 11 Market for Costco Common Stock . .......................................................... 12 Dividend Policy. ......................................................................... 13 Ten Year Operating and Financial Highlights . 14 Management’s Discussion and Analysis of Financial Condition and Results of Operations. .............. 16 Management’s Report on the Financial Statements . ............................................. 30 Management’s Annual Report on Internal Control over Financial Reporting . ......................... Certifications of CEO and CFO . ............................................................ 32 Report of Independent Registered Public Accounting Firm. ....................................... 34 Consolidated Financial Statements . 36 Notes to Consolidated Financial Statements. ................................................... 40 Directors and Officers. 62 Additional Information . ................................................................... 65
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Warehouses in Operation At Fiscal Year End Number of Warehouses 450 425 2001 2002 2004 400 375 345 397 (443 at 12/31/05) 350 0 2005 417 433 2003 374 Net Sales Fiscal Year $ Millions 2001 2002 2004 2005 34,137 37,993 38,000 36,000 42,000 40,000 44,000 46,000 48,000 50,000 52,000 2003 41,693 47,146 51,862 34,000 0 Net Income Fiscal Year 2001 2002 2004 1,100 0 1,000 1,050 850 900 950 600 800 650 700 750 602 721 2005 882 1,063 2003 700 Comparable Sales Growth Fiscal Year Percent Increase 2001 2002 2004 2005 10% 0% 2% 4% 6% 8% 10% 12% 7% 2003 5% 6% 4% Average Sales Per Warehouse * (Sales In Millions) Fiscal Year *First year sales annualized. 112 106 86 77 65 $57 $101 108 99 77 72 $57 $101 98 85 $65 58 $94 90 70 $50 $87 84 $56 $83 $77 $77 Totals 249 1996 & Before 1997 10 1998 17 1999 15 2000 21 2001 32 2002 29 2003 24 2004 20 16 2005 Whses* Opened # of Year 117 113 97 82 77 63 $58 $103 121 115 105 86 85 72 62 $105 $67 132 124 120 91 98 84 77 $115 79 $72 2005 138 131 99 107 127 94 88 91 81 $63 Selling, General and Administrative Expenses Fiscal Year Percent of Net Sales 2001 2002 2003 0 10.0% 9.75% 9.50% 9.25% 9.41% 9.17% 2004 9.83% 2005 9.75% 9.73% 9.0% Fiscal Year 2001 2002 2004 4.636 4.358 4.2 4.4 4.6 4.8 5.0 5.2 0 2005 4.810 5.050 2003 4.476 Business Members Fiscal Year Millions 2001 2002 2004 12.737 14.984 0 14 16 13 15 18 17 2005 15.018 16.233 2003 14.597 Gold Star Members Membership 12 FINANCIAL HIGHLIGHTS 1 2004 2002 2003 2001 1999 2000 1998 1996 1997 $120
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December 14, 2005 Dear Costco Shareholders, Costco has now completed 22 years in business, and we are proud to have achieved several milestones dur- ing this past fiscal year. Our sales exceeded $50 billion ($51.9 billion in fiscal 2005), and our net profit topped the $1 billion mark ($1.063 billion), both historical records for our Company. Our comparable sales, sales for
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This note was uploaded on 11/22/2011 for the course BUS 401 taught by Professor Terrywilson during the Spring '11 term at Solano Community College.

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CostcoAnnualReportFY2005 - Annual Report 2005 Y EAR ENDED...

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