Costco 1999 Annual Report Download - page 2

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THE COMPANY
Costco Wholesale Corporation (‘‘Costco’’ or the ‘‘Company’’) began operations in 1983 in Seattle,
Washington. In October 1993, Costco merged with The Price Company, which had pioneered the
membership warehouse concept in 1976, to form Price/Costco, Inc., a Delaware corporation. In Janu-
ary 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’’.
Costco operates a chain of membership warehouses that sell high quality, nationally branded and
selected private label merchandise at low prices to businesses purchasing for commercial use, personal use,
or resale, and also to individuals who are members of selected employee groups. The Company’s business
is based upon achieving high sales volumes and rapid inventory turnover by offering a limited assortment
of merchandise in a wide variety of product categories at very competitive prices. As of December 1999,
the Company operated a chain of 302 warehouses in 27 states (230 locations), nine Canadian provinces (59
locations), the United Kingdom (seven locations, through a 60%-owned subsidiary), Korea (three loca-
tions), Taiwan (two locations, through a 55%-owned subsidiary) and Japan (one location). The Company
also operates 17 warehouses in Mexico through a 50% joint venture partner.
CONTENTS
Financial Highlights .......................................................... 1
Letter to Shareholders ........................................................ 2
Map of Warehouse Locations ................................................... 4
Number of Warehouses/Ancillary Businesses ........................................ 6
Quarterly Results of Operations ................................................. 7
Ten Year Operating and Financial Highlights ....................................... 8
Management’s Discussion and Analysis of Financial Condition and Results of Operations ....... 10
Report of Management ....................................................... 16
Report of Independent Public Accountants ......................................... 16
Consolidated Financial Statements ............................................... 17
Notes to Consolidated Financial Statements ........................................ 21
Market for Costco Common Stock ............................................... 34
Dividend Policy ............................................................. 34
Directors and Officers ........................................................ 35
Additional Information ....................................................... 37