Costco 2014 Annual Report Download - page 35

Bank Credit Facilities and Commercial Paper Programs
We maintain bank credit facilities for working capital and general corporate purposes. At August 31, 2014,
we had borrowing capacity within these facilities of $451, of which $381 was maintained by our
international operations. Of the $381, $180 is guaranteed by the Company. There were no outstanding
short-term borrowings under the bank credit facilities at the end of 2014 and $36 outstanding at the end of
2013.
The Company has letter of credit facilities, for commercial and standby letters of credit, totaling $154. The
outstanding commitments under these facilities at the end of 2014 totaled $95, including $91 in standby
letters of credit with expiration dates within one year. The bank credit facilities have various expiration
dates, all within one year, and we generally 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 then outstanding.
Contractual Obligations
As of August 31, 2014, our commitments to make future payments under contractual obligations were as
follows:
Pa
y
ments Due b
y
Fiscal Year
Contractual obli
g
ations 2015
2016 to
2017
2018 to
2019 2020 and
thereafter Total
Purchase obligations (merchandise)(1) ..................
$ 5,671 $ 4 $
—
$ — $ 5,675
Long-term debt(2) ....................................................... 107 2,598 1,348
1,432 5,485
Operating leases (3) .................................................. 196 382 353
2,127 3,058
Purchase obligations (property, equipment,
services and other)(4) ............................................ 414 64 3
—
481
Capital lease obligations(2) ....................................... 17 32 34
327 410
Construction commitments ...................................... 240 —
—
— 240
Other(5) ........................................................................ —2916
58 103
Total ............................................................................. $6,645 $ 3,109 $1,754
$ 3,944 $15,452
_______________
(1) Includes only open merchandise purchase orders.
(2) Includes contractual interest payments.
(3) Operating lease obligations exclude amounts for common area maintenance, taxes, and insurance and have been reduced
by $149 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) Includes $55 in asset retirement obligations and $48 in deferred compensation obligations. The total amount excludes $54 of
non-current unrecognized tax contingencies and $25 of other obligations due to uncertainty regarding the timing of future
cash payments.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that in the opinion of management have had, or are
reasonably likely to have, a material current or future effect on our financial condition or consolidated
financial statements.
Critical Accounting Estimates
The preparation of our consolidated financial statements in accordance with U.S. generally accepted
accounting principles (U.S. GAAP) requires that we make estimates and judgments. We continue to
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