Costco 2005 Annual Report Download - page 2

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THE COMPANY
Costco Wholesale Corporation (“Costco” or the “Company”) began operations in 1983 in Seattle, Wash-
ington. In October 1993, Costco merged with The Price Company, which had pioneered the membership ware-
house concept in 1976, to form Price/Costco, Inc., a Delaware corporation. In January 1997, after the spin-off of
most of its non-warehouse assets to Price Enterprises, Inc., the Company changed its name to Costco Companies,
Inc. On August 30, 1999, the Company reincorporated from Delaware to Washington and changed its name to
Costco Wholesale Corporation, which trades on the NASDAQ under the symbol “COST”.
As of December 2005, the Company operated a chain of 471 warehouses in 37 states and Puerto Rico (346
locations), nine Canadian provinces (66 locations), the United Kingdom (17 locations), Korea (five locations),
Taiwan (four locations, through a 50%-owned subsidiary) and Japan (five locations), as well as 28 warehouses in
Mexico through a 50%-owned joint venture.
CONTENTS
Financial Highlights ...................................................................... 1
Letter to Shareholders ..................................................................... 2
Map of Warehouse Locations ............................................................... 6
BusinessOverview ....................................................................... 8
Number of Warehouses/Ancillary Businesses .................................................. 11
Market for Costco Common Stock ........................................................... 12
Dividend Policy .......................................................................... 13
Ten Year Operating and Financial Highlights .................................................. 14
Management’s Discussion and Analysis of Financial Condition and Results of Operations ............... 16
Management’s Report on the Financial Statements .............................................. 30
Management’s Annual Report on Internal Control over Financial Reporting .......................... 30
Certifications of CEO and CFO ............................................................. 32
Report of Independent Registered Public Accounting Firm ........................................ 34
Consolidated Financial Statements ........................................................... 36
Notes to Consolidated Financial Statements .................................................... 40
Directors and Officers ..................................................................... 62
Additional Information .................................................................... 65