Costco 2004 Annual Report Download - page 7

This year saw a realignment of some of our executive officers. Franz Lazarus, Executive Vice President of
International Operations and a senior executive with the Company since its inception, recently retired. We appre-
ciate the many contributions Franz has made over the years to the success of the Company, and we will certainly
miss him. Replacing Franz are Jim Murphy, formerly Senior Vice President of our United Kingdom operations,
who has assumed leadership of our International Division, and Richard Chavez, formerly Senior Vice President
of our Asia operations, who is now head of our Manufacturing and Other Businesses Division.
Dick DiCerchio, Senior Executive Vice President, COO, Merchandising, has assumed leadership over all
Costco warehouse operations in the United States and around the world. Craig Jelinek, previously Executive Vice
President, COO, Northern Division and Midwest Region Operations, is now responsible for all Costco Merchan-
dising. Doug Schutt, who had been Senior Vice President of E-commerce and Special Order Merchandise, was
promoted to Executive Vice President, COO, Northern Division and Midwest Region; and Tom Walker, Senior
Vice President of Construction and Distribution, was also promoted to Executive Vice President. Ginnie Roeglin,
Senior Vice President, was promoted to head up our important E-commerce business. All of these changes work
to strengthen our management team.
In October of this year, we were pleased to add Susan Decker to our Board of Directors. Ms. Decker is the
Chief Financial Officer and Executive Vice President of Finance and Administration for Yahoo! Inc. Her breadth
of experience—including 12 years in equity research and 4 years at Yahoo! Inc.—will be an asset to our Com-
pany, and we are fortunate and delighted to have her with Costco.
Costco remains the dominant membership warehouse club operator in the world, setting the standard for
excellence and leading the industry in sales increases. Our momentum is strong in terms of both sales and earn-
ings, and we stand on a firm financial base. We are committed to growth, both domestically and abroad; and we
have the strong, cohesive organization and talented management staff necessary to successfully do so.
We’d like to thank our management team and our employees, all 110,000 of them, for their exceptional per-
formance this past year. Their energy, dedication and ongoing efforts to continually exceed the expectations of
our members, our suppliers and our communities ensure that as a company we are all doing our best for you, our
shareholders.
The mettle of a great company is measured by its long-term performance, the quality of its organization, the
integrity of its people and the attention paid to all of its stakeholders; as well as its ability to creatively rise above
adversity. Together, we can be proud that Costco exemplifies such strengths, and that they can be seen in our
2004 achievements: record sales and profits, new cost-savings initiatives and reduced SG&A, expanded oper-
ations, creative merchandising, a loyal and growing membership base, a strengthened balance sheet, and a re-
spected business reputation.
We assure you that our management team is not complacent, and despite our successes of this past year, we
know there is plenty of work left to be done. Costco has hundreds of opportunities to improve. In the future our
Company can do much more to delight our customers; to be a better employer; to make the communities we
serve proud; and, as a result, provide greater rewards for our shareholders. These goals remain our constant fo-
cus.
Costco is poised for more long-term growth and success—success that you will share as we continue to in-
crease our profitability and shareholder value. We look forward to discussing our plans for Costco’s future with
you at our Annual Meeting of Shareholders on January 27, 2005, in Bellevue, Washington.
Thank you for your continued confidence and support. We wish you and yours a most joyous Holiday Sea-
son and a New Year abundant in success, good health and happiness.
Cordially,
Jeff Brotman
Chairman of the Board
Jim Sinegal
President & CEO
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