-----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, DN7gxG0WZKQmkXnvd1o6azEUC3J3vfik6QYQZgFh59i0jOLC+br/SpiyxQWLeeUb zNUHVdIL3sIhff7e0MKEug== 0000912057-94-001233.txt : 19940404 0000912057-94-001233.hdr.sgml : 19940404 ACCESSION NUMBER: 0000912057-94-001233 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19931231 FILED AS OF DATE: 19940331 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PRICE/COSTCO INC CENTRAL INDEX KEY: 0000909832 STANDARD INDUSTRIAL CLASSIFICATION: 5331 IRS NUMBER: 330572969 STATE OF INCORPORATION: CA FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 11-K SEC ACT: 34 SEC FILE NUMBER: 000-20355 FILM NUMBER: 94519878 BUSINESS ADDRESS: STREET 1: 4649 MORENA BOULEVARD CITY: SAN DIEGO STATE: CA ZIP: 92117 BUSINESS PHONE: 6195815350 MAIL ADDRESS: STREET 1: 4241 JUTLAND DRIVE #300 CITY: SAN DIEGO STATE: CA ZIP: 92117 11-K 1 FORM 11-K 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 ended December 31, 1993 ------------------------- 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 0-20355 --------------------------------------------- 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)] 10809 - 120th Avenue NE Kirkland, WA 98033 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 COSTCO WHOLESALE EMPLOYEES' SAVINGS/RETIREMENT PLAN [401(k)] FINANCIAL STATEMENTS AS OF DECEMBER 31, 1993 AND 1992 TOGETHER WITH AUDITORS' REPORT 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, 1993 and 1992, and the related statements of changes in net assets available for plan benefits for the years then ended. These financial statements and the schedules referred to below are the responsibility of the Plan Administrator. Our responsibility is to express an opinion on these financial statements and schedules 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 Administrator, 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 plan benefits of the Costco Wholesale Corporation Employees' Savings/Retirement Plan [401(k)] as of December 31, 1993 and 1992, and the changes in its net assets available for plan benefits for the years then ended in conformity with generally accepted accounting principles. Our audits were made 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 purposes of complying with the Department of Labor Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974 and are not a required part of the basic financial statements. Such schedules have been subjected to the auditing procedures applied in the audit 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. Seattle, Washington, March 9, 1994 COSTCO WHOLESALE CORPORATION EMPLOYEES' SAVINGS/RETIREMENT PLAN [401(k)] STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS AS OF DECEMBER 31, 1993 AND 1992
Price/Costco Common Stock Fund Fixed Income Fund Growth Fund ------------------------ ------------------------ ---------------------- 1993 1992 1993 1992 1993 1992 ------------------------ ------------------------ ---------------------- CASH AND CASH EQUIVALENTS $ 289,980 $ 74,180 $ 241,302 $ 68,213 $1,340,011 $ 280,650 INVESTMENTS: Government securities - - - - 3,134,687 3,026,397 Common stock - - - - 7,037,164 5,806,315 Price/Costco common stock 19,857,761 17,977,047 Investment contracts - - 10,367,823 6,480,310 Mutual funds - - - - - - ACCRUED INTEREST - - 48,538 55,988 - - CONTRIBUTIONS RECEIVABLE 862 - 573 - 486 243 INTERFUND TRANSFERS AND OTHER (12,880) 22,478 118,812 (17,683) 99,434 (4,795) ----------- ----------- ----------- ---------- ---------- ---------- Net assets available for plan benefits $20,135,723 $18,073,705 $13,911,735 $9,613,225 $8,477,095 $6,082,413 ----------- ----------- ----------- ---------- ---------- ---------- ----------- ----------- ----------- ---------- ---------- ---------- Balanced Fund Total --------------------------- ------------------------- 1993 1992 1993 1992 --------------------------- ------------------------- CASH AND CASH EQUIVALENTS $ 251,393 - $ 2,122,686 $ 423,043 INVESTMENTS: Government securities - - 3,134,687 3,026,397 Common stock - - 7,037,164 5,806,315 Price/Costco common stock - - 19,857,761 17,977,047 Investment contracts - - 10,367,823 6,480,310 Mutual funds 1,922,754 - 1,922,754 - ACCRUED INTEREST - - 48,538 55,988 CONTRIBUTIONS RECEIVABLE 188 - 2,109 243 INTERFUND TRANSFERS AND OTHER (205,366) - - - ---------- ---------- ----------- ----------- Net assets available for $1,968,969 $ - $44,493,522 $33,769,343 plan benefits ---------- ---------- ----------- ----------- ---------- ---------- ----------- -----------
The accompanying notes are an integral part of these statements. COSTCO WHOLESALE CORPORATION EMPLOYEES' SAVINGS/RETIREMENT PLAN [401(k)] STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS FOR THE YEARS ENDED DECEMBER 31, 1993 AND 1992
Price/Costco Common Stock Fund Fixed Income Fund Growth Fund -------------------------- ------------------------- -------------------------- 1993 1992 1993 1992 1993 1992 ----------- ----------- ----------- ---------- ---------- ----------- NET INVESTMENT RESULTS: Unrealized appreciation (depreciation) of investments $(3,432,577) $(7,905,128) $ 83,114 $ (57,246) $ 372,687 $ 414,884 Realized losses on sale of investments (150,686) (129,775) - (1,408) (41,157) (84,686) Interest 1,800 4,661 196,544 201,460 - - Dividends 1,659 - 482,696 336,113 116,962 82,849 Investment management fees - - (64,156) (44,077) (44,625) (25,407) ----------- ----------- ----------- ---------- ---------- ---------- Total net investment results (3,579,804) (8,030,242) 698,198 434,842 403,867 387,640 ----------- ----------- ----------- ---------- ---------- ---------- CONTRIBUTIONS TO THE PLAN (Note 1): Employees 6,551,823 6,102,221 4,124,687 2,806,507 2,445,434 1,538,730 Employer 1,068,519 967,509 655,100 468,223 409,972 259,621 ----------- ----------- ----------- ---------- ---------- ---------- Total contributions 7,620,342 7,069,730 4,779,787 3,274,730 2,855,406 1,798,351 ----------- ----------- ----------- ---------- ---------- ---------- DISTRIBUTIONS TO PARTICIPANTS (1,183,117) (1,726,656) (893,362) (737,845) (466,330) (423,244) ----------- ----------- ----------- ---------- ---------- ---------- INTERFUND TRANSFERS (795,403) 2,002,766 (286,113) (1,529,588) (398,261) (473,178) ----------- ----------- ----------- ---------- ---------- ---------- Net increase (decrease) in net assets available for plan benefits 2,062,018 (684,402) 4,298,510 1,442,139 2,394,682 1,289,569 Net assets, beginning of year 18,073,705 18,758,107 9,613,225 8,171,086 6,082,413 4,792,844 ----------- ----------- ----------- ---------- ---------- ---------- Net assets, end of year $20,135,723 $18,073,705 $13,911,735 $9,613,225 $8,477,095 $6,082,413 ----------- ----------- ----------- ---------- ---------- ---------- ----------- ----------- ----------- ---------- ---------- ---------- Balanced Fund Total ------------------------- -------------------------- 1993 1992 1993 1992 ----------- ---------- ----------- ----------- NET INVESTMENT RESULTS: Unrealized appreciation (depreciation) of investments $ 29,036 $ - $(2,947,740) $(7,547,490) Realized losses on sale of investments - - (191,843) (215,869) Interest 58 - 198,402 206,121 Dividends 789 - 602,106 418,962 Investment management fees (50) - (108,831) (69,484) ---------- --------- ----------- ----------- Total net investment results 29,833 - (2,447,906) (7,207,760) ---------- --------- ----------- ----------- CONTRIBUTIONS TO THE PLAN (Note 1): Employees 426,834 - 13,548,778 10,447,458 Employer 60,721 - 2,194,312 1,695,353 ---------- --------- ----------- ----------- Total contributions 487,555 - 15,743,090 12,142,811 ---------- --------- ----------- ----------- DISTRIBUTIONS TO PARTICIPANTS (28,196) - (2,571,005) (2,887,745) ---------- --------- ----------- ----------- INTERFUND TRANSFERS 1,479,777 - - - ---------- --------- ----------- ----------- Net increase (decrease) in net assets available for plan benefits 1,968,969 - 10,724,179 2,047,306 Net assets, beginning of year - - 33,769,343 31,722,037 ---------- --------- ----------- ----------- Net assets, end of year $1,968,969 $ - $44,493,522 $33,769,343 ---------- --------- ----------- ----------- ---------- --------- ----------- -----------
The accompanying notes are an integral part of these statements. COSTCO WHOLESALE CORPORATION EMPLOYEES' SAVINGS/RETIREMENT PLAN [401(k)] NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1993 1. DESCRIPTION OF THE PLAN: The Costco Wholesale Corporation (the "Corporation") Employees' Savings/ Retirement Plan [401(k)] (the "Plan"), began on January 1, 1987. 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. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). Under the Plan, participants are able to contribute annually a maximum of 18% of their annual base compensation up to a specified amount which was $8,994 in calendar year 1993. 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 59-1/2. In addition, benefits may be distributed to a participant in the event of financial hardship. Employer contributions are fully vested after five years, according to the following schedule.
Years of Service Percentage Vested ---------------- ----------------- Under 3 0% 3 25% 4 50% 5 100%
All contributions to the Plan are invested at the direction of the participants in any of the following funds: the Price/Costco 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, 1993 was 6,647, 5,499, 3,977 and 1,480, respectively. The total number of participants in the Plan at December 31, 1993 was 7,313. The Price/Costco stock fund invests solely in Price/Costco common stock. On October 21, 1993, the shareholders of both The Price Company (Price) and Costco Wholesale Corporation approved an agreement that provided for the mergers of Price and Costco into Price/Costco, Inc. (Price/Costco). Pursuant to the Transaction, Price and Costco became subsidiaries of Price/Costco. Shareholders of Costco received one share of Price/Costco common 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 of U.S. Government Treasury or agency bonds and guaranteed investment contracts. - 2 - 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. 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. 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. Investments are valued using the closing price of the investments on the last day of business of the plan year. 3. UNREALIZED APPRECIATION (DEPRECIATION) IN PLAN INVESTMENTS: Unrealized appreciation (depreciation) and realized 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 Employee Retirement Income Security Act (ERISA) requirements. 4. FEDERAL INCOME TAXES: The Plan has received a favorable determination letter from the IRS under Section 401(a) and is exempt from taxes under Section 501(a). 5. PLAN TERMINATION: Although it has not expressed any intent to do so, the Corporation has the right under the Plan to discontinue its contributions at any time and to terminate the Plan, subject to the provisions of ERISA. In the event of plan termination or partial termination, participants will have a nonforfeitable interest in the vested portion of their account balance. 6. 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 were $71,444 and $189,906 as of December 31, 1993 and 1992, respectively. COSTCO WHOLESALE CORPORATION EMPLOYEES' SAVINGS/RETIREMENT PLAN [401(k)] EIN 91-1223280 ITEM 27a SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AS OF DECEMBER 31, 1993
Total Number of ------------------------ Shares/Units or Current Issuer/Description Principal Amount Cost Value - ------------------ ---------------- -------------------------- PRICE/COSTCO COMMON STOCK FUND Price/Costco Common Stock 1,031,572 $22,983,506 $19,857,761 ----------- ----------- Total Price/Costco Common Stock Fund 22,983,506 19,857,761 ----------- ----------- FIXED INCOME FUND Federal Home Loan Bank Due 01/25/94, 7.3% 50,000 50,537 50,141 Federal National Mortgage Assoc. Debentures, due 01/10/97, 7.6% 150,000 147,661 161,720 U.S. Treasury Notes: Due 09/30/94, 8.5% 25,000 25,742 25,899 Due 06/30/94, 8.5% 50,000 53,117 51,250 Due 04/30/96, 7.625% 250,000 251,890 267,735 Due 08/15/95, 8.5% 100,000 103,063 106,875 Due 10/15/98, 7.125% 300,000 318,185 324,564 Due 01/15/99, 6.375% 500,000 501,807 525,155 Due 12/31/96, 6.125% 175,000 174,903 182,929 Due 04/15/98, 7.875% 150,000 161,507 166,078 Due 05/31/97, 6.75% 215,000 276,549 228,371 Due 08/31/97, 5.625% 125,000 127,341 128,204 Due 08/31/94, 4.25% 125,000 126,624 125,586 Due 11/30/98, 6% 250,000 250,152 259,453 Due 02/28/98, 5.125% 100,000 100,438 100,438 Due 03/31/98, 5.125% 250,000 250,850 250,860 Due 05/15/95, 5.875% 175,000 179,429 179,429
Total Number of ------------------------ Shares/Units or Current Principal Amount Cost Value ---------------- ----------- ------------ FIXED INCOME FUND (Continued) INVESCO Retirement GIC Fund, 1993 annual yield 5.83% 10,367,823 10,367,823 10,367,823 ----------- ----------- Total Fixed Income Fund Investments 13,467,618 13,502,510 ----------- ----------- GROWTH FUND Common Stock: Adobe Systems 2,600 96,200 57,850 Aetna Life & Casualty 2,200 114,425 132,825 A H Belco Corp. 2,000 58,795 106,000 American Express Company 3,450 77,974 106,519 American Home Products Corp. 1,200 60,000 77,700 American International 900 55,641 78,975 American Power Conversion 2,400 39,694 57,000 Amgen 2,000 73,896 99,000 Arnolds Industries, Inc. 2,000 18,375 42,000 Autodesk 1,600 74,397 72,000 Banc One Corp Ohio 2,000 85,600 78,250 BankAmerica Corp 2,000 77,680 92,750 Bankers Trust NY Corp. 1,625 123,500 128,578 Boeing Co. 3,150 122,047 136,238 Brinker International 2,662 45,588 122,452 Brown-Forman Corp. Class B 1,000 70,875 87,250 Capital Cities/ABC, Inc. 120 54,442 74,340 Capital Holding 2,000 56,796 74,250 Charles Schwab Corp 3,450 56,300 111,694 Cisco Sys Inc. 1,400 71,975 90,475 Coastal Corp. 4,100 109,513 115,825 Digital Equipment Corp. 4,800 220,450 164,400 Dreyfus Corp. 2,675 103,844 120,375 Electronic Arts 2,500 85,150 75,000 Equifax Inc. 4,000 78,724 109,500
Total Number of -------------------------- Shares/Units or Current Principal Amount Cost Value ---------------- ------------ ------------- Federal Home Loan Mortgage 2,425 66,083 120,947 Federal National Mtg Assoc 1,100 58,238 86,350 First Financial Mgmt Corp 2,000 82,910 113,500 FMC Corp. 1,425 69,469 67,153 Ford Motor 1,150 30,170 74,175 Fruit of the Loom 2,800 110,011 67,550 Geico Corp. 1,300 37,495 66,788 General Electric 800 62,400 83,900 Genzyme Corp. 2,400 107,513 66,000 Great Lakes Chem 1,200 55,775 89,550 Guiness Plc 3,925 159,922 136,394 Hanson Plc 6,000 109,713 120,000 Hewlett Packard 900 54,312 71,100 Home Depot 1,900 36,017 75,050 Intel Corp. 1,400 41,675 86,800 Limited Inc. 3,300 74,752 56,100 Liz Claiborne 2,100 86,751 47,512 McClatchy Newspapers, Inc. 2,200 43,313 51,975 Merrill Lynch 2,200 49,788 92,400 Microsoft 1,150 64,700 92,719 Motorola Incorporated 1,000 45,958 92,250 National Service Ind. 3,200 81,325 82,000 Nestle S A Spnsd Adr 3,450 124,856 148,350 New York Times, Class A 6,100 144,959 160,125 Nike 1,700 85,838 78,625 Norwest Corp 3,300 87,450 80,437 Novell 3,000 52,243 62,250 Office Depot 3,750 54,488 126,094 Old Republic International Corp. 5,075 93,581 114,822 Paramount Communications 1,600 75,443 147,200 Philip Morris Companies 3,875 208,863 215,547 RJR Nabisco Holdings Corp. 39,100 270,906 249,263
Total Number of -------------------------- Shares/Units or Current Principal Amount Cost Value ---------------- -------------------------- Silicon Graphics 4,400 50,903 108,900 Staples Inc. 4,200 88,456 107,100 Stratus Computer 2,600 74,563 81,575 Stride Rite Corp 4,800 99,700 78,600 Student Loan Market Assn 1,700 91,550 76,287 Sun Microsystems 2,700 76,491 78,637 Sybase Inc. 2,200 74,454 92,400 Tecumseh Prods Co. Class A 1,800 68,175 83,250 Teledyne Inc. 3,750 73,125 97,500 Toys R Us Inc. 2,500 73,783 85,837 United Healthcare Corp 1,600 72,177 121,400 United Technologies Corp. 1,900 90,379 117,800 U S Healthcare Inc. 1,950 75,068 112,369 Waste Management 2,400 90,882 63,300 Walt Disney Company 2,300 84,911 98,037 ----------- ---------- Total Growth Fund 5,943,415 7,037,164 ----------- ----------- BALANCED FUND - ------------- Fidelity Advisor Series II - Income & Growth Fund 124,289 1,893,718 1,922,754 ----------- ----------- Total Balanced Fund 1,893,718 1,922,754 ----------- ----------- Total Investments $44,288,257 $42,320,189 ------------ ----------- ------------ -----------
COSTCO WHOLESALE CORPORATION EMPLOYEES' SAVINGS/RETIREMENT PLAN [401(k)] EIN 91-1223280 ITEM 27d SCHEDULE OF REPORTABLE TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 1993
-------------------Purchases-------------------------------------------Sales--------------------------- Number of Number of Total Number Shares/Units or Number Shares/Units or Total Sale Net Issuer/Description of Purchases Principal Amount Total of Sales Principal Amount Cost Price Gain (Loss) - ------------------ ------------- --------------- ----- -------- ---------------- ----- ----- --------- CATEGORY (iii) - SERIES OF TRANSACTIONS IN EXCESS OF 5 PERCENT OF PLAN ASSETS AT JANUARY 1, 1993 PRICE/COSTCO COMMON STOCK FUND Price/Costco Common Stock 52 365,272 6,795,427 4 61,466 $1,344,569 $1,214,906 $(129,663) FIXED FUND Invesco Retirement GIC Fund 31 4,169,800 4,169,800 13 659,206 659,206 659,206 - BALANCED FUND Fidelity Advisor Series II - Income and Growth Fund 13 124,289 1,893,718 - - - - -
There were no category (i), (ii) or (iv) reportable transactions during 1993. 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. /s/ Arthur Andersen Seattle, Washington, March 30, 1994 -----END PRIVACY-ENHANCED MESSAGE-----