Costco 2003 Annual Report Download - page 7

this to create a significant labor savings for the Company. We are also increasing efficiencies at the front-end of
our warehouses in order to help offset the costs of additional front-end personnel that were recently added to
improve member service at check-out. While the current economic climate is still tumultuous, we believe Costco
is well-positioned to gain tighter control of expenses and continue profitable operations and successful growth
while increasing market share.
Regarding the important issues of corporate governance and regulatory requirements, you should know that
we are fully compliant with all aspects of the new, expanded standards: we have added two, new independent
members to our Board of Directors (see below); the Audit Committee of the Board has been reconfigured to
comply with the independence requirements of all the various regulatory agencies; and we have, without ex-
ception, complied with all standards required by the Sarbanes-Oxley Act of 2002 and other corporate governance
standards. And while many of these new regulatory requirements are extensive and expensive to implement, they
are consistent with the basic tenets of honesty and integrity—corporately and individually—on which we built
this Company over the last 20 years.
This past year we welcomed to our Board of Directors two outstanding individuals with careers in both pub-
lic and private service: Daniel J. Evans and William H. Gates, II. Mr. Evans is Chairman of Daniel J. Evans
Associates, a consulting firm, and was previously a United States Senator and three-term Governor of the State of
Washington. Mr. Gates is the CEO and Co-Chair of the Bill and Melinda Gates Foundation, and was previously a
senior partner with the law firm of Preston Gates and Ellis. We are fortunate to have them on our team.
We have set the standard of excellence for our industry, and our financial position is strong. As mentioned
earlier in this letter, we are led by the most talented and creative management team in the business; and our em-
ployees, 103,000 in all, are dedicated, disciplined and hard-working. All of us are thoroughly committed to doing
the very best that we can for our members, our suppliers, our communities and, of course, our shareholders.
Finally, we would like to thank our employees for their outstanding efforts this past year, and our share-
holders for their continued confidence and support. Together, let us celebrate Costco’s 2003 achievements: re-
cord sales and profits; a loyal and growing membership base; expanded operations in both new and in-fill
markets; new cost-savings initiatives; great merchandising; and a strengthened balance sheet. We believe all of
these factors help to position Costco for long-term growth and success, including increased profitability and
shareholder value. We are excited about Costco’s future, and look forward to sharing our vision with you at our
Annual Meeting of Shareholders on January 29, 2004, in Bellevue, Washington. We send good wishes to you and
yours for a happy, healthy Holiday Season and a New Year filled with peace and success.
Cordially,
Jeff Brotman
Chairman of the Board
Jim Sinegal
President & CEO
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