Costco 2003 Annual Report Download - page 39

Note 1—Summary of Significant Accounting Policies (Continued)
tion of the consensus will result in a change in the timing for the recognition of some vendor allowances for cer-
tain agreements entered into subsequent to December 31, 2002.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the
United States requires management to make estimates and assumptions that affect the reported amounts of assets
and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
Note 2—Comprehensive Income
Comprehensive income is net income, plus certain other items that are recorded directly to stockholders’
equity. Comprehensive income was $800,745 for fiscal 2003 and $715,868 for fiscal 2002. Foreign currency
translation adjustments are the predominant components applied to net income to calculate the Company’s com-
prehensive income.
Note 3—Debt
Bank Lines of Credit and Commercial Paper Programs
The Company has in place a $500,000 commercial paper program supported by a $300,000 bank credit fa-
cility with a group of 10 banks, of which $150,000 expires on November 9, 2004 and $150,000 expires on No-
vember 15, 2005. At August 31, 2003, no amounts were outstanding under the commercial paper program and no
amounts were outstanding under the credit facility.
In addition, a wholly owned Canadian subsidiary has a $144,000 commercial paper program supported by a
$43,000 bank credit facility with a Canadian bank, which expires in March 2004. At August 31, 2003, no
amounts were outstanding under the Canadian commercial paper program or the bank credit facility.
The Company has agreed to limit the combined amount outstanding under the U.S. and Canadian commer-
cial paper programs to the $343,000 combined amounts of the respective supporting bank credit facilities.
The Company’s wholly-owned Japanese subsidiary has a short-term ¥3 billion ($25,782) bank line of credit,
which expires in November 2004. At August 31, 2003, no amounts were outstanding under the line of credit.
The Company’s UK subsidiary has a £60 million ($94,842) bank revolving credit facility and a £20 million
($31,614) bank overdraft facility, both expiring in February 2007. At August 31, 2003, $47,421 was outstanding
under the revolving credit facility with an applicable interest rate of 4.413% and no amounts were outstanding
under the bank overdraft facility.
Letters of Credit
The Company has letter of credit facilities (for commercial and standby letters of credit), totaling approx-
imately $369,000. The outstanding commitments under these facilities at August 31, 2003 totaled approximately
$125,000, including approximately $44,000 in standby letters of credit.
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