Costco 2014 Annual Report Download - page 34

projected asset position is sufficient to meet our U.S. liquidity requirements and have no current plans to
repatriate for use in the U.S. cash and cash equivalents and short-term investments held by these non-
U.S. consolidated subsidiaries. Cash and cash equivalents and short-term investments held at these
subsidiaries and considered to be indefinitely reinvested totaled $1,809 at August 31, 2014.
Cash Flows from Operating Activities
Net cash provided by operating activities totaled $3,984 in 2014 compared to $3,437 in 2013. Our cash
flow provided by operations is primarily derived from net sales and membership fees. Our cash flow used
in operations generally consists of payments to our merchandise vendors, warehouse operating costs
including payroll and employee benefits, credit card processing fees, and utilities. Cash used in
operations also includes payments for income taxes.
Cash Flows from Investing Activities
Net cash used in investing activities totaled $2,093 in 2014 compared to $2,251 in 2013. Our cash flow
used in investing activities is primarily related to funding our warehouse expansion and remodeling
activities. Net cash flows from investing activities also includes purchases and maturities of short-term
investments.
Capital Expenditure Plans
We opened 30 new warehouses and one new depot in 2014 and plan to open up to 35 new warehouses
in 2015, including the relocation of four warehouses. 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, the modernization of our information systems, and working
capital. In 2014 we spent $1,993 on capital expenditures, and it is our current intention to spend
approximately $2,500 to $2,700 during fiscal 2015. These expenditures are expected to be financed with
cash to be provided from operations, existing cash and cash equivalents, and short-term investments.
There can be no assurance that current expectations will be realized and plans are subject to change
upon further review of our capital expenditure needs.
Cash Flows from Financing Activities
Net cash used in financing activities totaled $786 in 2014 compared to $44 provided by financing activities
in 2013. The primary uses of cash in 2014 were dividend payments, repurchases of common stock, and
payment of withholding taxes on stock-based awards. The net cash provided by financing activities in
2013 primarily resulted from the proceeds of the issuance of $3,500 in aggregate principal amount of
Senior Notes, which were used to fund a one-time special cash dividend of $3,049 in December 2012.
These cash flows did not recur in 2014.
Stock Repurchase Programs
During 2014 and 2013, we repurchased 2,915,000 and 357,000 shares of common stock, at an average
price of $114.45 and $96.41, totaling approximately $334 and $34, respectively. The remaining amount
available to be purchased under our approved plan was $2,721 at the end of 2014. Purchases are made
from time-to-time, as conditions warrant, in the open market or in block purchases and pursuant to plans
under SEC Rule 10b5-1. Repurchased shares are retired, in accordance with the Washington Business
Corporation Act.
Dividends
In April 2014, our Board of Directors increased our quarterly cash dividend from $0.31 to $0.355 per
share. Our cash dividends paid in 2014 totaled $1.33 per share, as compared to $8.17 per share in 2013,
which included a special cash dividend of $7.00 per share.
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