Costco 2000 Annual Report Download - page 22

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COSTCO WHOLESALE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share data)
Note 1ÌSummary of SigniÑcant Accounting Policies
Basis of Presentation
The consolidated Ñnancial 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 have been eliminated in consolidation. Costco Wholesale
Corporation primarily operates membership warehouses under the Costco Wholesale name.
Costco operates membership warehouses that oÅer 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 September 3, 2000, Costco operated 313 warehouse clubs: 237 in the United States;
59 in Canada; 10 in the United Kingdom; three in Korea; three in Taiwan; and one in Japan. As of
September 3, 2000, the Company also operated (through a 50%-owned joint venture) 18 warehouses in
Mexico.
The Company's investment in the Costco 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 Ñscal year basis, which ends on the Sunday nearest August 31st.
Fiscal year 2000 was 53 weeks and Ñscal years 1999 and 1998 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 September 3, 2000 and August 29, 1999, short-term investments consisted of the following:
2000 1999
Municipal securitiesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ Ì $ 97,966
Corporate notes and bonds ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 38,331 89,872
U.S. Treasury/Agency securities ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 43,699
CertiÑcates of deposit ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 9,667 24,841
Other ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 28 310
Total short-term investments ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $48,026 $256,688
The Company's short-term investments have been designated as being available-for-sale and, accord-
ingly, are reported at fair value. The fair market value of short term investments approximates their carrying
value and unrealized holding gains and losses were not signiÑcant at September 3, 2000 or August 29, 1999.
Realized gains and losses are included in interest income and were not signiÑcant in Ñscal 2000, 1999 and
1998. Short-term investments held by the Company at September 3, 2000, mature between one and sixty days
from the purchase date.
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