Costco 2004 Annual Report Download - page 21

continue its review of expansion plans in its international operations, including the United Kingdom and Asia,
along with other international markets. At present, the Company is planning to open two additional warehouses
in the U.K and one additional warehouse in both the Taiwan and Japan markets during fiscal 2005. Costco and its
Mexico-based joint venture partner, Controladora Comercial Mexicana, each own a 50% interest in Costco Mex-
ico. Costco Mexico plans to open two to three new warehouse clubs during fiscal 2005.
Additional Equity Investments in Subsidiary
On October 3, 2003, the Company acquired from Carrefour Nederland B.V. its 20% equity interest in
Costco Wholesale UK Limited for cash of $95,153, bringing Costco’s ownership in Costco Wholesale UK Lim-
ited to 100%.
Bank Credit Facilities and Commercial Paper Programs (all amounts stated in thousands of US dollars)
The Company has a $500,000 commercial paper program supported by a $300,000 bank credit facility with
a group of ten banks, of which $150,000 expired on November 9, 2004 and $150,000 expires on November 15,
2005. At August 29, 2004, no amounts were outstanding under the commercial paper program and no amounts
were outstanding under the credit facility. The Company presently does not plan to renew the $150,000 portion
of the credit facility that expired on November 9, 2004.
A wholly-owned Canadian subsidiary has a $152,000 commercial paper program supported by a $46,000
bank credit facility with a Canadian bank, that is guaranteed by the Company and expires in March 2005. At
August 29, 2004, 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 combined amounts of the supporting bank credit facilities, which are $346,000 at
August 29, 2004, decreased to $196,000 on November 9, 2004.
The Company’s wholly-owned Japanese subsidiary has a short-term $27,400 bank line of credit that origi-
nally expired in November 2004. Subsequent to the Company’s fiscal year end, the bank line of credit was ex-
tended through February 10, 2005. At August 29, 2004, no amounts were outstanding under the line of credit.
The Company’s Korean subsidiary has a short-term $10,400 bank line of credit, which expires in January
2005. At August 29, 2004, no amounts were outstanding under the line of credit.
The Company’s wholly-owned UK subsidiary has a $108,000 bank revolving credit facility expiring in Feb-
ruary 2007 and a $63,000 bank overdraft facility renewable on a yearly basis in March. At August 29, 2004,
$21,595 was outstanding under the revolving credit facility with an applicable interest rate of 5.285% 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 $338,000. The outstanding commitments under these facilities at August 29, 2004 totaled approximately
$166,800, including approximately $52,900 in standby letters of credit.
Financing Activities
The Company’s 7
1
⁄ 8 % Senior Notes of $304,350 at August 29, 2004 are due on June 15, 2005. The Com-
pany plans to repay the 7
1
⁄ 8 % Senior Notes from its cash and cash equivalents and short-term investment balan-
ces, which totaled $3,129,882 at August 29, 2004.
In April 2003, the Company’s wholly-owned Japanese subsidiary issued promissory notes bearing interest at
0.92% in the aggregate amount of approximately $36,576, through a private placement. Interest is payable semi-
annually and principal is due on April 26, 2010.
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