Costco 2005 Annual Report Download - page 25

Additional Equity Investments in Subsidiaries and Joint Ventures
On June 30, 2005, the Company acquired the remaining 4% interest in CWC Travel Inc for $3,961, bringing
Costco’s ownership in this entity to 100%. In addition, during fiscal 2005 the Company contributed an additional
$15,000 to its investment in Costco Mexico (a 50%-owned joint venture), which did not impact its percentage
ownership of this entity as the joint venture partner contributed a like amount. 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 Limited 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 $150,000 bank credit facility
($300,000 at August 29, 2004) with a group of nine banks, which expires on November 15, 2005, and is not ex-
pected to be renewed. At August 28, 2005 and August 29, 2004, no amounts were outstanding under the
commercial paper program and no amounts were outstanding under the credit facility. Applicable interest rates
on the credit facility at August 28, 2005 and August 29, 2004, were 3.92% and 1.90%, respectively.
A wholly-owned Canadian subsidiary has a $167,000 commercial paper program ($152,000 at August 29,
2004) supported by a $50,000 bank credit facility ($46,000 at August 29, 2004) with a Canadian bank, which is
guaranteed by the Company and expires in March 2006. At August 28, 2005 and August 29, 2004, no amounts
were outstanding under the Canadian commercial paper program or the bank credit facility. Applicable interest
rates on the credit facility at August 28, 2005 and August 29, 2004, were 4.25% and 3.75%, respectively. At
August 28, 2005, standby letters of credit totaling $23,000 issued under the bank credit facility left $27,000
available for commercial paper support. At August 29, 2004, standby letters of credit totaling $21,000 issued
under the bank credit facility left $25,000 available for commercial paper support.
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 $177,000 at
August 28, 2005, decreasing to $27,000 on November 15, 2005. At August 29, 2004, the combined amount of
supporting bank credit facilities was $325,000.
The Company’s wholly-owned Japanese subsidiary has a short-term $13,694 bank line of credit that expires
in February 2006. At August 28, 2005 and August 29, 2004, $5,477 and $0, respectively, were borrowed under
the line of credit, and $3,652 and $2,576, respectively, were used to support standby letters of credit. A second
$13,694 bank line of credit was entered into in February 2005 that expires in February 2006. At August 28, 2005,
$9,129 was borrowed under the second facility; this bank line was not in place at August 29, 2004. Applicable
interest rates on the credit facilities at both August 28, 2005 and August 29, 2004, were .84%.
The Company’s Korean subsidiary has a short-term $11,665 bank line of credit, which expires in January
2006. At August 28, 2005 and August 29, 2004, no amounts were borrowed under the line of credit and $1,668
and $0, respectively, were used to support standby letters of credit. Applicable interest rates on the credit facility
at August 28, 2005 and August 29, 2004, were 4.51% and 4.52%, respectively.
The Company’s Taiwan subsidiary has a $7,439 bank revolving credit facility that expires in January 2006.
At August 28, 2005 and August 29, 2004, no amounts were borrowed under the credit facility and $2,495 and
$1,165, respectively, were used to support standby letters of credit. A second $15,499 bank revolving credit fa-
cility is in place, which expires in July 2006. At August 28, 2005 and August 29, 2004, no amounts were bor-
rowed under the second credit facility and $790 and $738, respectively were used to support standby letters of
credit. Applicable interest rates on the credit facilities at August 28, 2005 and August 29, 2004, were 3.75% and
3.50%, respectively.
The Company’s wholly-owned United Kingdom subsidiary has a $108,408 bank revolving credit facility
expiring in February 2007 and a $63,238 bank overdraft facility renewable on a yearly basis in March 2006. At
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