Costco 2013 Annual Report Download - page 35

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Expansion Plans
Our primary requirement for capital is the financing of land, buildings, and equipment 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 are subject to change upon
further review, it is our current intention to spend approximately $2,300 to $2,500 during fiscal 2014 for real
estate, construction, remodeling, equipment for warehouses and related operations, and the modernization
of our information systems and related activities. 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. We plan to open 30 to 36 new warehouses in 2014. In 2013, we opened 26 new warehouses
and spent a total of $2,083 on capital expenditures.
Bank Credit Facilities and Commercial Paper Programs
As of September 1, 2013, we had total borrowing capacity within our bank credit facilities of $700, of which
$381 was maintained by our international operations. Of the $381 maintained by our international operations,
$183 is guaranteed by the Company. We maintain bank credit facilities for working capital and general
corporate purposes. There were $36 in outstanding short-term borrowings under the bank credit facilities at
the end of 2013 and none outstanding as of the end of 2012. The Company has letter of credit facilities, for
commercial and stand-by letters of credit, totaling $154. The outstanding commitments under these facilities
at the end of 2013 totaled $96, including $91 million in stand-by letters of credit with expiration dates within
one year. All of the bank credit facilities have various expiration dates, all within one year, and generally, we
intend to renew these facilities prior to their expiration. The amount of borrowings available at any time under
our bank credit facilities is reduced by the amount of standby and commercial letters of credit outstanding
at that time.
Financing Activities
In December 2012, we issued $3,500 in aggregate principal amount of Senior Notes as follows: $1,200 of
0.65% Senior Notes due December 7, 2015; $1,100 of 1.125% Senior Notes due December 15, 2017; and
$1,200 of 1.7% Senior Notes due December 15, 2019. The proceeds from the issuance of these Senior
Notes were used primarily to pay the special cash dividend on our common stock. The balance of
approximately $450 was used to invest in short-term investments. See Note 4 to the consolidated financial
statements included in this Report for additional information.
In July 2013, our Japanese subsidiary entered into an approximately $102 three-year term loan (with a
possible two year extension), bearing interest at 0.67%. Interest is payable semi-annually, and principal is
due on June 30, 2016.
In May 2013, our Japanese subsidiary issued approximately $102 of 1.05% promissory notes through a
private placement. Interest is payable semiannually, and principal is due in May 2023.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have had, or are reasonably likely to have, a material
current or future effect on our financial condition or consolidated financial statements.
Stock Repurchase Programs
In April 2011, our Board of Directors authorized a stock repurchase program in the amount of $4,000, expiring
in April 2015, bringing total authorizations by our Board of Directors since inception of the program in 2001
to $10,800. The authorization in April 2011 revoked previously authorized but unused amounts totaling $792.
During 2013 and 2012, we repurchased 357,000 and 7,272,000 shares of common stock, at an average
price of $96.41 and $84.75, totaling approximately $34 and $617, respectively. The remaining amount