Costco 2013 Annual Report Download - page 39

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37
2012. A hypothetical 10% strengthening of the functional currency compared to the non-functional currency
exchange rates at September 1, 2013 and September 2, 2012, would have decreased the fair value of the
contracts by $45 and $28, respectively.
Commodity Price Risk
We are exposed to fluctuations in prices for energy that we consume, particularly electricity and natural gas,
which we seek to partially mitigate through fixed-price contracts for certain of our warehouses and other
facilities, primarily in the U.S. and Canada. We also enter into variable-priced contracts for some purchases
of electricity and natural gas, in addition to fuel for our gas stations, on an index basis. These contracts meet
the characteristics of derivative instruments, but generally qualify for the “normal purchases or normal sales”
exception under authoritative guidance and, thus, require no mark-to-market adjustment.
Other Information (amounts in whole dollars)
Disclosure pursuant to Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012 and
Section 13(r) of the Securities Exchange Act of 1934, as amended.
As reported in the Company’s prior quarterly report filed on Form 10-Q for the quarter ended May 12, 2013,
in the fourth quarter of 2013, the Company canceled a business membership at our Japan subsidiary in the
name of the Embassy of the Islamic Republic of Iran. The cancellation of this membership was initiated in
June 2013, although the members inadvertently were able to make purchases until August 2013. $1,032
in revenue and an estimated $13 in net profits were earned in the fourth quarter of 2013.