Costco 2000 Annual Report Download - page 27

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COSTCO WHOLESALE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(dollars in thousands, except per share data)
Note 1ÌSummary of SigniÑcant Accounting Policies (Continued)
In March 2000, the Financial Accounting Standards Board, or FASB, released FASB Interpretation
No. 44, ""Accounting for Certain Transactions involving Stock Compensation, an interpretation of APB
Opinion No. 25,'' which provides clariÑcation of Opinion No. 25 for certain issues, such as the determination
of who is an employee, the criteria for determining whether a plan qualiÑes as a non-compensatory plan, the
accounting consequence of various modiÑcations to the terms of a previously Ñxed stock option or award, and
the accounting for an exchange of stock compensation awards in a business combination. The Company
believes that its practices are in conformity with this guidance, and therefore Interpretation No. 44 will have
no impact on its Ñnancial statements.
ReclassiÑcations
Certain reclassiÑcations have been reÖected in the Ñnancial statements in order to conform prior years to
the current year presentation.
Use of Estimates
The preparation of Ñnancial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that aÅect the reported amounts of assets and
liabilities at the date of the Ñnancial statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could diÅer from those estimates.
Note 2ÌDebt
Bank Lines of Credit and Commercial Paper Programs
The Company has in place a $425,000 commercial paper program supported by a $425,000 bank credit
facility with a group of 11 banks, which expires in January 2001. At September 3, 2000, no amounts were
outstanding under the loan facility or the commercial paper program. On November 15, 2000, the bank facility
was increased to $500,000 of which $250,000 expires on November 14, 2001 and $250,000 expires on
November 15, 2005.
In addition, a wholly owned Canadian subsidiary has a $136,000 commercial paper program supported by
a $95,000 bank credit facility with three Canadian banks, which expires in March 2001. At September 3,
2000, no amounts were outstanding under the bank credit facility or the Canadian commercial paper program.
The Company has agreed to limit the combined amount outstanding under the U.S. and Canadian
commercial paper programs to the $520,000 combined amounts of the respective supporting bank credit
facilities.
Letters of Credit
The Company has separate letter of credit facilities (for commercial and standby letters of credit),
totaling approximately $372,000. The outstanding commitments under these facilities at September 3, 2000
totaled approximately $273,000, including approximately $28,000 in standby letters of credit.
26