Costco 1999 Annual Report Download - page 25

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COSTCO WHOLESALE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(dollars in thousands, except per share data)
Note 1—Summary of Significant Accounting Policies (Continued)
Net Income Per Common and Common Equivalent Share
In the second quarter of fiscal 1998, the Company adopted the Financial Accounting Standards Board
(FASB) Statement No. 128, ‘‘Earnings per Share’’ (SFAS No. 128). SFAS No. 128 established new
standards for computing and presenting earnings per share (EPS) for entities with publicly held common
stock.
The following data show the amounts used in computing earnings per share and the effect on income
and the weighted average number of shares of dilutive potential common stock.
52 Weeks Ended
August 29, 1999 August 30, 1998 August 31, 1997
Net income available to common
stockholders used in basic EPS .... $397,298 $459,842 $312,197
Interest on convertible bonds, net of
tax......................... 9,640 9,529 17,325
Net income available to common
stockholders after assumed
conversions of dilutive securities . . . $406,938 $469,371 $329,522
Weighted average number of
common shares used in basic EPS . . 219,626 215,506 207,379
Stock options ................... 5,946 5,960 4,001
Conversion of convertible bonds ..... 9,988 10,219 13,288
Weighted number of common shares
and dilutive potential common
stock used in diluted EPS ........ 235,560 231,685 224,668
In November, 1998, the Company’s Board of Directors authorized a stock repurchase program of up
to $500,000 of Costco Common Stock over the next three years. The Company expects to repurchase
shares from time to time in the open market or in private transactions as market conditions warrant. The
Company expects to fund stock purchases from cash and short-term investments on hand, as well as from
future operating cash flows. The repurchased shares would constitute authorized but unissued shares and
would be used for general corporate purposes including stock option grants under stock option programs.
As of August 29, 1999, the Company had not repurchased any stock under the program.
Preopening Expenses
Preopening expenses related to new warehouses, major remodels/expansions, regional offices and
other startup operations are expensed as incurred.
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