Costco 2011 Annual Report Download - page 81

Except where indicated otherwise above, a reasonable estimate of the possible loss or range of loss
cannot be made at this time for the matters described. The Company does not believe that any
pending claim, proceeding or litigation, either alone or in the aggregate, will have a material adverse
effect on the Company’s financial position; however, it is possible that an unfavorable outcome of some
or all of the matters, however unlikely, could result in a charge that might be material to the results of
an individual fiscal quarter.
Note 12—Segment Reporting
The Company and its subsidiaries are principally engaged in the operation of membership warehouses
in the United States, Canada, the United Kingdom, Japan, Australia, through majority-owned
subsidiaries in Taiwan and Korea, and the Mexico joint venture. The Company’s reportable segments
are largely based on management’s organization of the operating segments for operational decisions
and assessments of financial performance, which considers geographic locations. As discussed in
Note 1, the Company began consolidating Mexico on August 30, 2010. For segment reporting, these
operations are included as a component of other international operations for the year ended August 28,
2011. Prior year amounts for Mexico are only included in total assets under United States operations in
the table below, representing the equity method investment in the joint venture, as it was previously
accounted for under the equity method and its operations were not consolidated. The material
accounting policies of the segments are the same as those described in Note 1. All material inter-
segment net sales and expenses have been eliminated in computing total revenue and operating
income.
United States
Operations
Canadian
Operations
Other
International
Operations Total
Year Ended August 28, 2011
Total revenue .......................... $64,904 $14,020 $9,991 $88,915
Operating income ....................... 1,395 621 423 2,439
Depreciation and amortization ............. 640 117 98 855
Capital expenditures, net ................. 876 144 270 1,290
Property and equipment, net .............. 8,870 1,608 1,954 12,432
Total assets ............................ 18,558 3,741 4,462 26,761
Year Ended August 29, 2010
Total revenue .......................... $59,624 $12,051 $6,271 $77,946
Operating income ....................... 1,310 547 220 2,077
Depreciation and amortization ............. 625 107 63 795
Capital expenditures, net ................. 804 162 89 1,055
Property and equipment, net .............. 8,709 1,474 1,131 11,314
Total assets ............................ 18,247 3,147 2,421 23,815
Year Ended August 30, 2009
Total revenue .......................... $56,548 $ 9,737 $5,137 $71,422
Operating income ....................... 1,273 354 150 1,777
Depreciation and amortization ............. 589 90 49 728
Capital expenditures, net ................. 904 135 211 1,250
Property and equipment, net .............. 8,415 1,394 1,091 10,900
Total assets ............................ 17,228 2,641 2,110 21,979
Certain home office operating expenses are incurred on behalf of the Company’s Canadian and Other
International Operations, but are included in the United States Operations above because those costs
are not allocated internally and generally come under the responsibility of the Company’s United States
management team.
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