Costco 2003 Annual Report Download - page 44

Download and view the complete annual report

Please find page 44 of the 2003 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 52

  • 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
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share data) (Continued)
Note 6—Retirement Plans
The Company has a 401(k) Retirement Plan that is available to all U.S. employees who have completed 90
days of employment. For all US employees, with the exception of California union employees, the plan allows
pre-tax deferral against which the Company matches 50% of the first one thousand dollars of employee con-
tributions. In addition, the Company will provide each eligible participant a contribution based on salary and
years of service.
California union employees participate in a defined benefit plan sponsored by their union. The Company
makes contributions based upon its union agreement. For all the California union employees, the Company spon-
sored 401(k) plan currently allows pre-tax deferral against which the Company matches 50% of the first four
hundred dollars of employee contributions. The Company has a defined contribution plan for Canadian and
United Kingdom employees and contributes a percentage of each employee’s salary.
Amounts expensed under these plans were $149,392, $127,189, and $108,256 for fiscal 2003, 2002 and
2001, respectively. The Company has defined contribution 401(k) and retirement plans only, and thus has no li-
ability for post-retirement benefit obligations under the SFAS No. 106 “Employer’s Accounting for Post-
retirement Benefits Other than Pensions.”
Note 7—Income Taxes
The provisions for income taxes for fiscal 2003, 2002 and 2001 are as follows:
2003 2002 2001
Federal:
Current .............................................. $295,323 $331,455 $285,460
Deferred ............................................. 35,150 5,263 1,102
Total federal ........................................ 330,473 336,718 286,562
State:
Current .............................................. 58,739 48,256 55,484
Deferred ............................................. (470) 4,269 (415)
Total state .......................................... 58,269 52,525 55,069
Foreign:
Current .............................................. 9,634 46,197 19,161
Deferred ............................................. 38,857 2,761 40,600
Total foreign ........................................ 48,491 48,958 59,761
Total provision for income taxes ............................ $437,233 $438,201 $401,392
In the fourth quarter of fiscal 2003 and 2002 the Company adjusted the annual effective tax rate used in cal-
culating the tax provision from 38.5% to 37.75%, and from 40% to 38.5%, respectively, resulting in the reduction
in the income tax provision in the fourth quarter of $5,873 and $11,315, respectively.
42