Costco 2001 Annual Report Download - page 24

Download and view the complete annual report

Please find page 24 of the 2001 Costco annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 44

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44

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 material inter-company
transactions between the Company and its subsidiaries have been eliminated in consolidation. Costco
primarily operates 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 September 2, 2001, Costco operated 365 warehouse clubs: 264 in the
United States; 60 in Canada; 11 in the United Kingdom; five in Korea; three in Taiwan; two in Japan; and
20 warehouses in Mexico with a joint venture partner.
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. The investment in
Costco Mexico is included in other assets and was $147,905 at September 2, 2001 and $92,523 at
September 3, 2000. The equity in earnings of Costco Mexico is included in interest income and other and
for fiscal 2001, 2000 and 1999, was $17,378, $10,592 and $5,978, respectively.
Fiscal Years
The Company reports on a 52/53-week fiscal year basis, which ends on the Sunday nearest
August 31st. Fiscal year 2001 was 52 weeks, fiscal year 2000 was 53 weeks and fiscal year 1999 was 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 2, 2001 and September 3, 2000, short-term investments consisted of the following:
2001 2000
Corporate notes and bonds ............................. $4,999 $38,331
Certificates of deposit ................................ — 9,667
Other ............................................ — 28
Total short-term investments ........................ $4,999 $48,026
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 significant at September 2, 2001 or
September 3, 2000. Realized gains and losses are included in interest income and were not significant in
fiscal 2001, 2000, and 1999. Short-term investments held by the Company at September 2, 2001, mature
between one and sixty days from the purchase date.
22