Costco 2003 Annual Report Download - page 2

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THE COMPANY
Costco Wholesale Corporation (“Costco” or the “Company”) began operations in 1983 in Seattle, Wash-
ington. In October 1993, Costco merged with The Price Company, which had pioneered the membership ware-
house concept in 1976, to form Price/Costco, Inc., a Delaware corporation. In January 1997, after the spin-off of
most of its non-warehouse assets to Price Enterprises, Inc., the Company changed its name to Costco Companies,
Inc. On August 30, 1999, the Company reincorporated from Delaware to Washington and changed its name to
Costco Wholesale Corporation, which trades on the NASDAQ under the symbol “COST”.
Costco operates a chain of membership warehouses that sell high quality, nationally branded and selected
private label merchandise at low prices to businesses purchasing for commercial use, personal use, or resale, and
also to individuals who are members of selected employee groups. The Company’s business is based upon
achieving high sales volumes and rapid inventory turnover by offering a limited assortment of merchandise in a
wide variety of product categories at very competitive prices. As of December 2003, the Company operated a
chain of 430 warehouses in 36 states and Puerto Rico (318 locations), nine Canadian provinces (62 locations), the
United Kingdom (15 locations), Korea (five locations), Taiwan (three locations, through a 55%-owned sub-
sidiary) and Japan (four locations), as well as 23 warehouses in Mexico through a 50%-owned joint venture.
CONTENTS
Financial Highlights ...................................................................... 1
Letter to Shareholders ..................................................................... 2
Map of Warehouse Locations ............................................................... 6
Number of Warehouses/Ancillary Businesses .................................................. 8
Quarterly Results of Operations ............................................................. 9
Ten Year Operating and Financial Highlights .................................................. 10
Management’s Discussion and Analysis of Financial Condition and Results of Operations ............... 12
Certifications of CEO and CFO ............................................................. 21
Independent Auditors’ Report ............................................................... 23
Report of Independent Public Accountants ..................................................... 24
Consolidated Financial Statements ........................................................... 25
Notes to Consolidated Financial Statements .................................................... 29
Market for Costco Common Stock ........................................................... 45
Dividend Policy .......................................................................... 45
Directors and Officers ..................................................................... 46
Additional Information .................................................................... 49