Costco 2011 Annual Report Download - page 35

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Management believes that our current cash position and operating cash flows will be sufficient to meet
our capital requirements for the foreseeable future. We have not provided for U.S. deferred taxes on
cumulative undistributed earnings of $2,646 and $1,972 at the end of 2011 and 2010, respectively, of
certain non-U.S. consolidated subsidiaries and other entities, including our 50% owned investment in
Mexico, as such earnings are deemed by us to be indefinitely reinvested. Cash and cash equivalents
and short-term investments held by these consolidated subsidiaries and other entities may not be
available to be used for certain financing activities such as the repayment of short-term debt or to
repurchase common stock. At August 28, 2011, cash and cash equivalent balances and short-term
investments of $1,828 were held by these non-U.S. consolidated subsidiaries and other entities.
Dividends
In April 2011, our Board of Directors increased our quarterly cash dividend from $0.205 to $0.24 per
share. Our quarterly cash dividends paid in 2011 totaled $0.89 per share, as compared to $0.77 per
share in 2010.
Contractual Obligations
As of August 28, 2011, our commitments to make future payments under contractual obligations were
as follows:
Payments Due by Fiscal Year
Contractual obligations 2012 2013 to 2014 2015 to 2016
2017 and
thereafter Total
Purchase obligations (merchandise)(1) . . . $5,879 $ — $ — $ — $ 5,879
Long-term debt(2) .................... 1,011 126 126 1,329 2,592
Operating leases(3) ................... 183 357 317 1,850 2,707
Purchase obligations (property,
equipment, services and other)(4) ..... 324 71 19 — 414
Construction commitments ............. 191 — — — 191
Capital lease obligations(2) ............. 13 26 26 311 376
Other(5) ............................ 5 4 2 32 43
Total ........................... $7,606 $584 $490 $3,522 $12,202
(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 $183 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 $31 in asset retirement obligations, $9 in deferred compensation obligations and $3 of
current unrecognized tax benefits relating to uncertain tax positions. The total amount excludes
$50 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, buildings, and equipment costs for new and
remodeled warehouses. To a lesser extent, capital is required for initial warehouse operations and
working capital. While there can be no assurance that current expectations will be realized and plans
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