Costco 2005 Annual Report Download - page 57

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share data) (Continued)
Note 6—Retirement Plans
The Company has a 401(k) Retirement Plan that is available to all U.S. employees who have completed 90
days of employment. For all U.S. employees, with the exception of California union employees, the plan allows
pre-tax deferral against which the Company matches 50% of the first one thousand dollars of employee con-
tributions. In addition, the Company will provide each eligible participant a contribution based on salary and
years of service.
California union employees participate in a defined benefit plan sponsored by their union. The Company
makes contributions based upon its union agreement. For all the California union employees, the Company spon-
sored 401(k) plan currently allows pre-tax deferral against which the Company matches 50% of the first five
hundred dollars of employee contributions. In addition, the Company will provide each eligible participant a con-
tribution based on hours worked and years of service. The Company has a defined contribution plan for Canadian
and United Kingdom employees and contributes a percentage of each employee’s salary. The Company complies
with government requirements related to retirement benefits for other international operations and accrues ex-
penses based on a percentage of each employee’s salary as appropriate.
Amounts expensed under these plans were $191,651, $169,664 and $149,392 for fiscal 2005, 2004 and
2003, respectively. The Company has defined contribution 401(k) and retirement plans only, and thus has no li-
ability for post-retirement benefit obligations under SFAS No. 106 “Employer’s Accounting for Post-retirement
Benefits Other than Pensions.”
Note 7—Income Taxes
Income before income taxes are comprised of the following:
2005 2004 2003
Domestic (including Puerto Rico) ....................... $1,225,741 $1,194,548 $1,024,045
Foreign ........................................... 323,221 206,076 134,188
Total ......................................... $1,548,962 $1,400,624 $1,158,233
The provisions for income taxes for fiscal 2005, 2004 and 2003 are as follows:
2005 2004 2003
Federal:
Current .......................................... $306,527 $ 238,136 $284,828
Deferred ......................................... (48,070) 116,390 35,150
Total federal ................................... 258,457 354,526 319,978
State:
Current .......................................... 75,063 49,852 56,886
Deferred ......................................... (14,699) 20,479 (470)
Total state ..................................... 60,364 70,331 56,416
Foreign:
Current .......................................... 123,969 171,006 9,634
Deferred ......................................... (1,866) (100,344) 38,857
Total foreign ................................... 122,103 70,662 48,491
Tax benefits allocated to contributed capital .............. 44,946 22,712 12,348
Total provision for income taxes ........................ $485,870 $ 518,231 $437,233
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