Costco 2005 Annual Report Download - page 7

We remain committed to running our Company and living conscientiously by our Code of Ethics every day:
to obey the law; take care of our members; take care of our employees; respect our suppliers; and reward you, our
shareholders. You are our partners in business, and we appreciate the support and confidence that you have
placed in all of us. As Costco’s founders, we want you to know that our ongoing goal is to reward our share-
holders, and we personally join our fellow employees in striving for excellence day in and day out, in every as-
pect of our business. The results speak for themselves. Our stock has grown at a compounded annual rate of 17
percent a year over the past 10 years, and we increased our dividends to our shareholders by 15% in 2005—from
$.10 per quarter to $.115 per quarter—paying out $200 million in fiscal 2005. Additionally, over the past seven
months, we have repurchased approximately 16.7 million shares of Costco stock at an aggregate purchase price
of $772.6 million, or $46.37 per share. We believe this will have positive shareholder value implications, partic-
ularly given our strong cash and cash flow positions, which can more than accommodate our planned expansion
plans.
We are in business not for the short term, but for the long haul. Our strategy aims at expanding our oper-
ations and increasing our sales and profits over the succeeding years. As our partners, you can be certain that we
are committed to operating our Company with integrity and the highest standards of fiduciary responsibility. Our
cash flow is strong, and we added to our cash balances even after spending $1 billion in capital expenditures
(primarily for new warehouse and depot openings), retiring $300 million in debt, and buying back $413 million
worth of stock in fiscal 2005.
We are never satisfied with the status quo, and recognize that we have many opportunities for improvement.
We are constantly working toward improving our existing business, while creating new avenues to expand our
business for long-term growth and success. We look forward to seeing many of you, discussing our results for
fiscal 2005 and sharing our vision for the future of Costco, at our Annual Meeting of Shareholders on January 25,
2006 in Bellevue, Washington.
Finally, while we recognize that fiscal 2005 was a great year in so many ways for our Company, we must
also acknowledge that the past twelve months were filled with many tragedies and challenges throughout the
world. From the tsunami in Southeast Asia last December, to hurricanes Katrina, Rita and Wilma, to the
devastating earthquakes that hit Pakistan in October, we share in the grief that has befallen so many. In addition
to the Company’s scheduled fiscal 2005 charitable giving of nearly $14 million, an additional $2.4 million ($2
million in cash and over $400,000 in products such as water, wipes and diapers) was contributed to relief agen-
cies working on the front lines of these terrible tragedies. Further, we are most proud that an additional $11.7
million was collected at our warehouse registers, representing contributions from many of our members and em-
ployees. These contributions, together with so many more contributions from companies and individuals
throughout the world, should make us all be thankful for what we have and be hopeful that each and every con-
tribution can help those less fortunate.
Many thanks for your ongoing support and confidence, and best wishes for a wonderful Holiday Season and
a prosperous, happy and healthy New Year.
Warm Regards,
Jeff Brotman
Chairman of the Board
Jim Sinegal
President & CEO
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