Costco 2008 Annual Report Download - page 37

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Contractual Obligations
Our commitments at year end to make future payments under contractual obligations were as follows,
as of August 31, 2008 (amounts in thousands):
Payments Due by Year
Contractual obligations 2009 2010 to 2011 2012 to 2013
2014 and
thereafter Total
Purchase obligations
(merchandise)(1) ......... $4,163,530 $ 1,693 $ — $ — $4,165,223
Long-term debt(2) .......... 110,735 285,140 1,072,608 1,505,387 2,973,870
Operating leases(3) ........ 139,916 277,885 247,634 1,438,390 2,103,825
Purchase obligations
(property, equipment,
services and other)(4) ..... 211,311 44,406 1,206 — 256,923
Construction
Commitments ........... 289,730 — — — 289,730
Capital lease obligations
and other(2) ............. 6,243 6,483 495 5,655 18,876
Other(5) .................. 15,723 4,406 2,405 6,113 28,647
Total ................. $4,937,188 $620,013 $1,324,348 $2,955,545 $9,837,094
(1) Includes open merchandise purchase orders.
(2) Includes contractual interest payments.
(3) Operating lease obligations exclude amounts commonly referred to as common area
maintenance, taxes and insurance and have been reduced by $149,468 to reflect sub-lease
income.
(4) The amounts exclude certain services negotiated at the individual warehouse or regional level that
are not significant and generally contain clauses allowing for cancellation without significant
penalty.
(5) Consists of asset retirement and deferred compensation obligations and includes $13,175 of
current unrecognized tax benefits relating to uncertain tax positions, but excludes $39,699 of
noncurrent unrecognized tax benefits due to uncertainty regarding the timing of future cash
payments.
Expansion Plans
Our primary requirement for capital is the financing of land, building and equipment costs for new and
remodeled warehouses. Capital is also required for initial warehouse operations and working capital.
While there can be no assurance that current expectations will be realized and plans are subject to
change upon further review, it is our current intention to spend approximately $1.7 billion during fiscal
2009 for real estate, construction, remodeling and equipment for warehouses and related operations.
These expenditures are expected to be financed with a combination of cash provided from operations
and existing cash and cash equivalents and short-term investments.
Plans for the United States and Canada during 2009 are to open approximately 24 to 28 new
warehouses, inclusive of one to three relocations of existing warehouses to larger and better-located
facilities. We expect to continue our review of expansion plans in our international operations, including
the United Kingdom and Asia, along with other international markets.
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