Costco 1999 Annual Report Download - page 23

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COSTCO WHOLESALE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share data)
Note 1—Summary of Significant Accounting Policies
Basis of Presentation
The consolidated financial statements include the accounts of Costco Wholesale Corporation, a
Washington corporation, and its subsidiaries (‘‘Costco’’ or the ‘‘Company’’). All inter-company transactions
between the Company and its subsidiaries, including The Price Company, have been eliminated in
consolidation. The Price Company and Costco Wholesale Corporation primarily operate membership
warehouses under the Costco Wholesale name.
Costco operates membership warehouses that offer very low prices on a limited selection of nationally
branded and selected private label products in a wide range of merchandise categories in no-frills, self-
service warehouse facilities. At August 29, 1999, Costco operated 292 warehouse clubs: 221 in the United
States; 58 in Canada; seven in the United Kingdom; three in Korea; two in Taiwan; and one in Japan. As of
August 29, 1999, the Company also operated (through a 50%-owned joint venture) 16 warehouses in
Mexico.
The Company’s investment in the Price Club Mexico joint venture and in other unconsolidated joint
ventures that are less than majority owned are accounted for under the equity method.
Fiscal Years
The Company reports on a 52/53-week fiscal year basis, which ends on the Sunday nearest
August 31st. Fiscal years 1999, 1998, and 1997 were 52 weeks.
Cash Equivalents
The Company considers all highly liquid investments with a maturity of three months or less at the
date of purchase to be cash equivalents.
Short-term Investments
At August 29, 1999 and August 30, 1998, short-term investments consisted of the following:
1999 1998
Municipal securities ................................ $ 97,966 $ —
Corporate notes and bonds ........................... 89,872 14,008
U.S. Treasury/Agency securities ........................ 43,699 32,566
Certificates of deposit ............................... 24,841 28,883
Other ........................................... 310 92
Total short-term investments ....................... $256,688 $75,549
The Company’s short-term investments have been designated as being available-for-sale. The fair
market value of short term investments approximates their carrying value and unrealized holding gains and
losses were not significant at August 29, 1999 or August 30, 1998. Realized gains and losses are included in
interest income and were not significant in fiscal 1999 or 1998.
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