COST Financial_Report

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Unformatted text preview: 3Dtop> <p style=3D'TEXT-INDENT: -1em </td> <td va lign=3Dbottom></td> <td va lign=3Dbottom><font style=3D'FONT-FAMILY: ARIAL' siz e=3D2>$</font></td> <td va lign=3Dbottom a lign=3Dright><font style=3D'FONT-FAMILY: ARIAL' siz e=3D2>9 6 5</font></td> <td va lign=3Dbottom nowra p=3Dnowra p></td> <td va lign=3Dbottom></td> <td va lign=3Dbottom><font style=3D'FONT-FAMILY: ARIAL' siz e=3D2>$</font></td> <td va lign=3Dbottom a lign=3Dright><font style=3D'FONT-FAMILY: ARIAL' siz e=3D2>9 38</font></td> <td va lign=3Dbottom nowra p=3Dnowra p></td> </tr> <tr style=3D'FONT-SIZ E: 1px'> <td va lign=3Dbottom></td> <td va lign=3Dbottom></td> <td va lign=3Dbottom> <p style=3D'BORDER-TOP: #000000 3px double'></p> </td> <td va lign=3Dbottom> <p style=3D'BORDER-TOP: #000000 3px double'></p> </td> <td></td> <td va lign=3Dbottom></td> <td va lign=3Dbottom> <p style=3D'BORDER-TOP: #000000 3px double'></p> </td> <td va lign=3Dbottom> <p style=3D'BORDER-TOP: #000000 3px double'></p> </td> <td></td> </tr> <!-- End Ta ble Body --></ta ble> <p style=3D'MARGIN-TOP: 18px Obliga tions</i></font></p> <p style=3D'MARGIN-TOP: 6 px <font style=3D'FONT-FAMILY: ARIAL' siz e=3D2>The Compa ny&#x2019 retirement obliga tions (ARO) a re rela ted to lea sehold improvements tha t a t the end of a lea se must be removed in order to comply with the lea se a greement. These obliga tions a re recorded a s a lia bility with a n offsetting ca pita l a sset a t the inception of the lea se term ba sed upon the estima ted fa ir ma rket va lue of the costs to remove the lea sehold improvements. These lia bilities, included in deferred income ta xes a nd other lia bilities, a re a ccreted over time to the projected future va lue of the obliga tion using the Compa ny&#x2019 incrementa l borrowing ra te. The ca pita liz ed ARO a ssets a re deprecia ted using the sa me deprecia tion convention a s the respective lea sehold improvement a ssets a nd a re included with buildings a nd improvements.</font></p> <p style=3D'MARGIN-TOP: 18px <p style=3D'MARGIN-TOP: 6 px <font style=3D'FONT-FAMILY: ARIAL' siz e=3D2>The Compa ny is exposed to foreign-currency excha nge-ra te fluctua tions in the norma l course of business. The Compa ny ma na ges these fluctua tions, in pa rt, through the use of forwa rd foreign-excha nge contra cts, seeking to economica lly hedge the impa ct of fluctua tions of foreign excha nge on known future expenditures denomina ted in a non-functiona l foreign-currency. The contra cts a re intended prima rily to economica lly hedge exposure to U.S. dolla r mercha ndise inventory expenditures ma de by the Compa ny&#x2019 subsidia ries, whose functiona l currency is not the U.S. dolla r. Currently, these contra cts do not qua lify for deriva tive hedge a ccounting. The Compa ny seeks to mitiga te risk with the use of these contra cts a nd does not intend to enga ge in specula tive tra nsa ctions. These contra cts do not conta in a ny credit-risk-rela ted contingent fea tures. The a ggrega te notiona l a mounts of open, unsettled forwa rd foreign-excha nge contra cts were $...
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This document was uploaded on 04/07/2014.

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