-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, TesmxLBnriqp6LbzoDwUrQc6lStEi+lN9P5DWNF4+drZzAWUKqgi+bJ5dZAUTxAt JVn/QvDg5ddokHfm2KGD4g== 0000912057-95-005089.txt : 199507030000912057-95-005089.hdr.sgml : 19950703 ACCESSION NUMBER: 0000912057-95-005089 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19941231 FILED AS OF DATE: 19950630 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: COSTCO WHOLESALE CORP CENTRAL INDEX KEY: 0000734198 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-VARIETY STORES [5331] IRS NUMBER: 911223280 STATE OF INCORPORATION: WA FISCAL YEAR END: 0902 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-14116 FILM NUMBER: 95551500 BUSINESS ADDRESS: STREET 1: 10809 120TH AVE N E CITY: KIRKLAND STATE: WA ZIP: 98033 BUSINESS PHONE: 2068288100 MAIL ADDRESS: STREET 1: PO BOX 97077 CITY: KIRKLAND STATE: WA ZIP: 98083-9777 11-K 1 EXHIBIT 11K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 11-K (Mark One) [x] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] For the fiscal year end December 31, 1994 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the transition period from _____________ to ______________ Commission file number 33-12250 --------------------------------------- A. Full title of the plan and the address of the plan, if different from that of the issuer named below: Costco Wholesale Corporation Employees' Savings/Retirement Plan [401(k)] B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: Price/Costco, Inc. 10809 - 120th Avenue NE Kirkland, WA 98033 SIGNATURES THE PLAN. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. Costco Wholesale Corporation Employees' Savings/Retirement Plan [401(k)] Date June 30, 1995 /s/ Richard Galanti --------------------------- ----------------------------------- Richard Galanti Executive Vice President Chief Financial Officer COSTCO WHOLESALE CORPORATION EMPLOYEES' SAVINGS/RETIREMENT PLAN [401(K)] EIN: 91-1223280 PIN: 001 FINANCIAL STATEMENTS AND SCHEDULES AS OF DECEMBER 31, 1994 AND 1993 TOGETHER WITH AUDITORS' REPORT COSTCO WHOLESALE CORPORATION EMPLOYEES' SAVINGS/RETIREMENT PLAN [401(k)] INDEX DECEMBER 31, 1994 AND 1993 Page Report of Independent Public Accountants 1 Statements of Net Assets Available for Plan Benefits with Fund Information 3 Statement of Changes in Net Assets Available for Plan Benefits with Fund Information 4 Notes to Financial Statements 5 Schedule I - Schedule of Assets Held for Investment Purposes 8 Schedule II - Schedule of Reportable Transactions 9 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Administrative Committee of the Costco Wholesale Corporation Employees' Savings/Retirement Plan [401(k)]: We have audited the accompanying statements of net assets available for plan benefits of the Costco Wholesale Corporation Employees' Savings/Retirement Plan [401(k)] as of December 31, 1994 and 1993, and the related statements of changes in net assets available for plan benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the Plan's management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Costco Wholesale Corporation Employees' Savings/Retirement Plan [401(k)] as of December 31, 1994 and 1993, and the changes in net assets available for benefits for the years then ended in conformity with generally accepted accounting principles. -1- Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of assets held for investment purposes and reportable transactions are presented for the purposes of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The fund information in the statement of net assets available for benefits and the statement of changes in net assets available for benefits is presented for purposes of additional analysis rather than to present the net assets available for plan benefits and changes in net assets available for plan benefits of each fund. The supplemental schedules and fund information have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. Aurthur Anderson LLP Seattle, Washington, May 1, 1995 -2- COSTCO WHOLESALE CORPORATION EMPLOYEES' SAVINGS/RETIREMENT PLAN [401(k)] STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION FOR THE YEARS ENDED DECEMBER 31, 1994 AND 1993
PriceCostco Common Stock Fund Fixed Income Fund Growth Fund ---------------------------- ------------------------------ ------------- 1994 1993 1994 1993 1994 ----------- ----------- ----------- ----------- ----------- NET INVESTMENT RESULTS: Unrealized appreciation (depreciation) of investments, net $(7,709,511) $(3,432,577) $ - $ 83,114 $ - Realized losses on sale of investments (50,391) (150,686) (246,171) - (103,967) Interest 1,990 1,800 159,666 196,544 58,068 Dividends 2,438 1,659 711,234 482,696 130,751 Investment management fees - - (85,809) (64,156) (59,773) ----------- ----------- ----------- ----------- ----------- Total net investment results (7,755,474) (3,579,804) 538,920 698,198 25,079 ----------- ----------- ----------- ----------- ----------- CONTRIBUTIONS TO THE PLAN: Employees 6,453,731 6,551,823 4,821,061 4,124,687 3,057,462 Employer 1,157,966 1,068,519 828,813 655,100 524,975 ----------- ----------- ----------- ----------- ----------- Total contributions 7,611,697 7,620,342 5,649,874 4,779,787 3,582,437 ----------- ----------- ----------- ----------- ----------- DISTRIBUTIONS TO PARTICIPANTS (1,492,191) (1,183,117) (1,356,799) (893,362) (763,017) ----------- ----------- ----------- ----------- ----------- INTERFUND TRANSFERS (535,916) (795,403) 465,626 (286,113) (166,664) ----------- ----------- ----------- ----------- ----------- Net increase (decrease) in net assets available for plan benefits (2,171,884) 2,062,018 5,297,621 4,298,510 2,677,835 Net assets, beginning of year 20,135,723 18,073,705 13,911,735 9,613,225 8,477,095 ----------- ----------- ----------- ----------- ----------- Net assets, end of year $17,963,839 $20,135,723 $19,209,356 $13,911,735 $11,154,930 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Growth Fund Balanced Fund Total ---------- ---------------------------- ---------------------------- 1993 1994 1993 1994 1993 ---------- ---------- ---------- ----------- ------------ NET INVESTMENT RESULTS: Unrealized appreciation (depreciation) of investments, net $ 372,687 $ - $ 29,036 $(7,709,511) $(2,947,740) Realized losses on sale of investments (41,157) (240,238) - (640,767) (191,843) Interest - - 58 219,724 198,402 Dividends 116,962 76,769 789 921,192 602,106 Investment management fees (44,625) 50 (50) (145,532) (108,831) ---------- ---------- --------- ----------- ----------- Total net investment results 403,867 (163,419) 29,833 (7,354,894) (2,447,906) ---------- ---------- --------- ----------- ----------- CONTRIBUTIONS TO THE PLAN: Employees 2,445,434 2,182,029 426,834 16,514,283 13,548,778 Employer 409,972 335,935 60,721 2,847,689 2,194,312 ---------- ---------- --------- ----------- ----------- Total contributions 2,855,406 2,517,964 487,555 19,361,972 15,743,090 ---------- ---------- --------- ----------- ----------- DISTRIBUTIONS TO PARTICIPANTS (466,330) (228,445) (28,196) (3,840,452) (2,571,005) ---------- ---------- --------- ----------- ----------- INTERFUND TRANSFERS (398,261) 236,954 1,479,777 - - ---------- ---------- --------- ----------- ----------- Net increase (decrease) in net assets available for plan benefits 2,394,682 2,363,054 1,968,969 8,166,626 10,724,179 Net assets, beginning of year 6,082,413 1,968,969 - 44,493,522 33,769,343 ---------- ---------- ---------- ----------- ----------- Net assets, end of year $8,477,095 $4,332,023 $1,968,969 $52,660,148 $44,493,522 ---------- ---------- ---------- ----------- ----------- ---------- ---------- ---------- ----------- -----------
The accompanying notes are an integral part of these statements. 3 COSTCO WHOLESALE CORPORATION EMPLOYEES' SAVINGS/RETIREMENT PLAN [401(k)] STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION AS OF DECEMBER 31, 1994 AND 1993
PriceCostco Common Stock Fund Fixed Income Fund Growth Fund ---------------------------- ------------------------------ ------------- 1994 1993 1994 1993 1994 ----------- ----------- ----------- ----------- ----------- CASH AND CASH EQUIVALENTS $ 217,302 $ 289,980 $ 4,989,895 $ 241,302 $11,154,545 INVESTMENTS: Government securities - - - 3,134,687 - Common stock - - - - - PriceCostco common stock 17,746,334 19,857,761 - - - Investment contracts - - 14,219,457 10,367,823 - Mutual funds - - - - - ACCRUED INTEREST - - - 48,538 - CONTRIBUTIONS RECEIVABLE 203 862 4 573 385 INTERFUND TRANSFERS AND OTHER - (12,880) - 118,812 - ----------- ----------- ----------- ----------- ----------- Net assets available for plan benefits $17,963,839 $20,135,723 $19,209,356 $13,911,735 $11,154,930 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Growth Fund Balanced Fund Total --------------- ---------------------------- ----------------------------- 1993 1994 1993 1994 1993 ---------- ---------- ---------- ----------- ----------- CASH AND CASH EQUIVALENTS $1,340,011 $4,331,735 $ 251,393 $20,693,477 $ 2,122,686 INVESTMENTS: Government securities - - - - 3,134,687 Common stock 7,037,164 - - - 7,037,164 PriceCostco common stock - - - 17,746,334 19,857,761 Investment contracts - - - 14,219,457 10,367,823 Mutual funds - - 1,922,754 - 1,922,754 ACCRUED INTEREST - - - - 48,538 CONTRIBUTIONS RECEIVABLE 486 288 188 880 2,109 INTERFUND TRANSFERS AND OTHER 99,434 - (205,366) - - ---------- ---------- ---------- ----------- ----------- Net assets available for plan benefits $8,477,095 $4,332,023 $1,968,969 $52,660,148 $44,493,522 ---------- ---------- ---------- ----------- ----------- ---------- ---------- ---------- ----------- -----------
The accompanying notes are an integral part of these statements. 4 COSTCO WHOLESALE CORPORATION EMPLOYEES' SAVINGS/RETIREMENT PLAN [401(k)] NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1994 1. DESCRIPTION OF THE PLAN: The Costco Wholesale Corporation (the Corporation) Employees' Savings/ Retirement Plan [401(k)] (the Plan), began on January 1, 1987. The following description of the Plan is provided for general information purposes only. For more complete information refer to the summary plan description. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). On January 1, 1995, the Plan assets were merged into the PriceCostco Employees' Saving/Retirement Plan [401(k)] (the New Plan). Participants of the Plan were automatically enrolled in the New Plan. ELIGIBILITY Employees of the Corporation are eligible to participate in the Plan if they have been employed by the Corporation for a minimum of 12 months, and are at least 18 years of age. CONTRIBUTIONS Under the Plan, participants are able to contribute annually a maximum of 18% of their annual base compensation up to a specified amount, under the Internal Revenue Code, which was $9,240 in calendar year 1994. The Corporation will contribute out of its current or accumulated net profits an additional amount equal to $.10 for every $1.00 the participant elects to defer. After the participant reaches his or her five-year anniversary of service, the Corporation will match $.25 for every $1.00 contributed. Maximum participant deferrals are 16% of base salary when the Corporation's 25% match is applicable. Employee contributions shall be at all times 100% vested and will be paid upon termination of employment, death or attainment of age 65. In addition, benefits may be distributed to a participant in the event of financial hardship. Employer contributions are fully vested after five years based on years of continuous service, according to the following schedule. Years of Service Percentage Vested ---------------- ----------------- Under 3 0% 3 25% 4 50% 5 100% -5- All contributions to the Plan are invested at the direction of the participants in any of the following funds: the PriceCostco Common Stock Fund, the Fixed Income Fund, the Growth Fund and the Balanced Fund. The number of active participants in each fund at December 31, 1994 was 6,932, 6,061, 4,641 and 2,541, respectively. The total number of participants in the Plan at December 31, 1994 was 7,338. FUND DESCRIPTIONS The PriceCostco stock fund invests solely in PriceCostco common stock. On October 21, 1993, the shareholders of both The Price Company (Price) and Costco Wholesale Corporation (Costco) approved an agreement that provided for the mergers of Price and Costco into Price/Costco, Inc. (PriceCostco). Pursuant to the Transaction, Price and Costco became subsidiaries of PriceCostco. Shareholders of Costco received one share of PriceCostco stock for each share of Costco. The fixed fund is designed to provide a secure principal and stable current income. The funds are invested in U.S. Government Treasury or agency bonds and guaranteed investment contracts. The growth fund is designed to provide capital appreciation, with a secondary objective of providing current income. The funds are invested in U.S. common stocks. The balanced fund is designed to mix current income with capital appreciation. The funds are invested in a diverse portfolio of stocks and fixed-income securities. FORFEITURES In the event of employee termination other than by reason of retirement, death or disability, nonvested employer contributions are forfeited and the employer contribution is reduced by the amount forfeited. PARTICIPANT ACCOUNTS Individual accounts are maintained for each of the Plan's participants to reflect the participant's share of the Plan's income, the employer's contributions and the particpant's contributions. Allocations are based on participant account balances as defined. ADMINISTRATIVE FEES All administrative and custodial fees of the Plan are paid by the Corporation. All investment management and transaction fees directly related to the plan investments are shown as a reduction of net investment results. 2. SIGNIFICANT ACCOUNTING POLICIES: The financial statements are presented on the accrual basis of accounting. Interest income is recorded as earned. Dividend income is recorded on the ex- dividend date. -6- Investments in marketable securities are valued using the closing price of the investments on the last day of business of the plan year. Cash equivalents are stated at cost which approximates market value. 3. UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS: Unrealized appreciation (depreciation) and realized gain (losses) have been determined by the market value of an investment at the beginning of the plan year or its acquisition cost if acquired during the plan year, consistent with ERISA requirements. 4. FEDERAL INCOME TAXES: The Plan has received a favorable determination letter, dated December 1, 1988,from the Internal Revenue Service (IRS) under Section 401(a) and is exempt from taxes under Section 501(a). The Plan has been amended since receiving the determination letter. The Plan administrator and the Plan's counsel believe that the Plan is currently designed and is being operated in compliance with the applicable requirements of the Code. Therefore, they believe that the Plan was qualified and the related trust was tax-exempt through the year ended December 31, 1994. 5. BENEFITS PAYABLE: The Plan classifies all benefits owed to vested, terminated participants as a component of net assets available for plan benefits rather than as a liability. These amounts are recorded as a liability in the Plan's Form 5500 and were $107,869 and $71,444 as of December 31, 1994 and 1993, respectively. -7- SCHEDULE I COSTCO WHOLESALE CORPORATION EMPLOYEES' SAVINGS/RETIREMENT PLAN [401(k)] EIN 91-1223280 PIN 001 ITEM 27a SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AS OF DECEMBER 31, 1994
Total Number of ------------------------ Shares/Units or Current Issuer/Description Principal Amount Cost Value - ------------------ ---------------- ----------- ----------- PRICECOSTCO COMMON STOCK FUND - ----------------------------- PriceCostco Common Stock 1,378,356 $28,689,016 $17,746,334 FIXED INCOME FUND - ----------------- INVESCO Retirement GIC Fund, 1994 annual yield 5.86% 14,219,457 $14,219,457 $14,219,457
The accompanying notes to the financial statements are an integral part of this schedule. -8- SCHEDULE II COSTCO WHOLESALE CORPORATION EMPLOYEES' SAVINGS/RETIREMENT PLAN [401(k)] EIN 91-1223280 PIN 001 Item 27d SCHEDULE OF REPORTABLE TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 1994
-------------------------Purchases--------------------- Number of Number Shares/Units or Issuer/Description of Purchases Principal Amount Total - ------------------ ------------ ---------------- ----------- Category (i) - Single transactions in excess of 5 percent of plan assets at January 1, 1994 - ------------------------------------------------------------------------------------------- Balanced Fund - ------------- Fidelity Advisor Series II - Income and Growth Fund - - $ - Category (iii) - Series of transactions in excess of 5 percent of plan assets at January 1, 1994 - ------------------------------------------------------------------------------------------------ *PriceCostco Common Stock Fund ----------------------------- PriceCostco Common Stock 51 387,669 6,260,636 Fixed Income Fund ----------------- Invesco Retirement GIC Fund 26 3,217,674 3,217,674 Balanced Fund - ------------- Fidelity Advisor Series II - Income and Growth Fund 27 180,955 2,707,509
----------------------------------------Sales---------------------------------------- Number of Total Number Shares/Units or Total Sale Net of Sales Principal Amount Cost Price Gain (Loss) -------- ---------------- ---------- ---------- ----------- Category (i) - Single transactions in excess of 5 percent of plan assets at January 1, 1994 - ------------------------------------------------------------------------------------------- Balanced Fund - -------------- Fidelity Advisor Series II - Income and Growth Fund 1 $ 291,085 $4,383,209 $4,179,978 $ (203,231) Category (iii) - Series of transactions in excess of 5 percent of plan assets at January 1, 1994 - ------------------------------------------------------------------------------------------------ *PriceCostco Common Stock Fund - ------------------------------ PriceCostco Common Stock 6 34,625 554,000 555,126 1,126 Fixed Income Fund ----------------- Invesco Retirement GIC Fund 12 67,248 67,248 67,248 - Balanced Fund - ------------- Fidelity Advisor Series II - Income and Growth Fund 3 310,535 4,676,090 4,465,082 (211,008)
There were no category (ii) or (iv) reportable transactions during 1994. *Represents a party in interest for the year ended December 31, 1994 The accompanying notes to the financial statements are an integral part of this schedule. EX-23 2 EXHIBIT 23 EXHIBIT 23 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation of our report included in this Form 11-K, into Price/Costco, Inc.'s previously filed Registration Statement File No. 33-50799. Aurthur Anderson LLP Seattle, Washington, June 28, 1995 -10- -----END PRIVACY-ENHANCED MESSAGE-----