-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, C2iINt1JN9Lfr1R6sIcs3diqUxdObU7vx7VEmKro6oHllOLQHwocVy0mWTbAXtLd rSMuNrWHmVNQi/TsegVImQ== 0000912057-96-013468.txt : 19960701 0000912057-96-013468.hdr.sgml : 19960701 ACCESSION NUMBER: 0000912057-96-013468 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960628 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: PRICE/COSTCO INC CENTRAL INDEX KEY: 0000909832 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-VARIETY STORES [5331] IRS NUMBER: 330572969 STATE OF INCORPORATION: CA FISCAL YEAR END: 0830 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-20355 FILM NUMBER: 96588639 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 11-K SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20459 FORM 11-K [X] ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED) FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995 [ ] TRANSITION REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ______ TO ______ COMMISSION FILE NUMBER 1-5858 PRICE/COSTCO, INC. 401(k) RETIREMENT PLAN ------------------------------ PRICE/COSTCO, INC. 999 LAKE DRIVE ISSAQUAH, WASHINGTON 98027 ------------------------------- CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference of our report dated June 24, 1996, on the financial statements of the Price/Costco 401(k) Retirement plan included in the annual report on Form 11-K for the year ended December 31, 1995, into the Company's previously filed Registration Statement File Number 33-50799 on Form S-8. Arthur Andersen LLP Seattle, Washington June 27, 1996 PRICE/COSTCO, INC. 401(K) RETIREMENT PLAN STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS AS OF DECEMBER 31, 1995
PARTICIPANT DIRECTED ----------------------------------------------------------------------------------- Cash Stable Equity Spectrum Spectrum PriceCostco and Cash Value Income Income Growth Common Equivalents Fund Fund Fund Fund Stock Total ----------- ----------- ----------- ----------- ----------- ----------- ------------ ASSETS: Investments at fair value- Cash and cash equivalents $61,343 $ - $ - $ - $ - $ - $ 61,343 Registered investment company funds - 28,521,752 28,041,414 70,144,239 27,867,707 - 154,575,112 PriceCostco common stock- 1,748,012 shares held - - - - - 26,657,187 26,657,187 ------- ----------- ----------- ----------- ----------- ----------- ------------ Total investments 61,343 28,521,752 28,041,414 70,144,239 27,867,707 26,657,187 181,293,642 ------- ----------- ----------- ----------- ----------- ----------- ------------ CONTRIBUTIONS RECEIVABLE: Employer - 11,986,840 5,152,781 1,213,126 4,903,496 5,001,593 28,257,836 Employee - 220,781 221,796 63,279 213,188 193,592 912,636 ------- ----------- ----------- ----------- ----------- ----------- ------------ Total receivables - 12,207,621 5,374,577 1,276,405 5,116,684 5,195,185 29,170,472 ------- ----------- ----------- ----------- ----------- ----------- ------------ LIABILITIES: Excess contributions payable to participants - (18,458) (20,056) (3,266) (22,626) (23,521) (87,927) ------- ----------- ----------- ----------- ----------- ----------- ----------- NET ASSETS AVAILABLE FOR PLAN BENEFITS $61,343 $40,710,915 $33,395,935 $71,417,378 $32,961,765 $31,828,851 $210,376,187 ======= =========== =========== =========== =========== =========== ============
The accompanying notes and schedules are an integral part of this statement. PRICE/COSTCO INC. 401(K) RETIREMENT PLAN STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS AS OF DECEMBER 31, 1994
PARTICIPANT DIRECTED ---------------------------------------------------------------------- Stable Ginnie Equity Capital Spectrum Value Mae Income Appreciation Growth Fund Fund Fund Fund Fund Total ----------- ---------- ---------- ------------ ---------- ----------- ASSETS: Investments at fair value- Registered investment company funds $ 2,313,450 $3,214,961 $5,008,665 $4,015,387 $3,130,675 $17,683,138 Contributions receivable- Employee 28,435 - 108,000 - 83,990 220,425 Employer 14,006 - 54,882 - 41,368 110,256 ---------- ---------- ---------- ---------- ---------- ----------- Total receivables 42,441 - 162,882 - 125,358 330,681 ---------- ---------- ---------- ---------- ---------- ----------- Net assets available for plan benefits $2,355,891 $3,214,961 $5,171,547 $4,015,387 $3,256,033 $18,013,819 ========== ========== ========== ========== ========== ===========
The accompanying notes and schedules are an integral part of this statement. PRICE/COSTCO, INC. 401(K) RETIREMENT PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS FOR THE YEAR ENDING DECEMBER 31, 1995
PARTICIPANT DIRECTED ------------------------------------------------------------------------------------------- Cash and Capital Cash Stable Equity Spectrum Spectrum PriceCostco Ginnie Apprecia- Equiva- Value Income Income Growth Common Mae tion lents Fund Fund Fund Fund Stock Fund Fund Total ------- ----------- ----------- ----------- ----------- ----------- ---------- ---------- ------------ NET INVESTMENT RESULTS: Net appreciation (depreciation) in fair value of assets $ - $ - $ 4,248,798 $ 7,717,503 $ 3,527,570 $ 3,321,258 $ (10,862) $ 9,956 $ 18,814,223 Interest - 1,510,345 - - - - 669 - 1,511,014 Dividends - - 1,410,134 5,085,118 1,882,549 721 - - 8,378,522 ------- ----------- ----------- ----------- ----------- ----------- ---------- ---------- ------------ Total net investment results - 1,510,345 5,658,932 12,802,621 5,410,119 3,321,979 (10,193) 9,956 28,703,759 ------- ----------- ----------- ----------- ----------- ----------- ---------- ---------- ------------ CONTRIBUTIONS TO THE PLAN: Employee - 5,938,704 5,555,505 1,475,066 4,972,707 5,356,987 - - 23,298,969 Employer - 13,530,325 6,328,814 1,332,393 5,944,595 6,128,888 - - 33,265,015 Rollovers - 62,465 32,865 30,896 66,370 16,788 - - 209,384 ------- ----------- ----------- ----------- ----------- ----------- ---------- ---------- ------------ Total contributions - 19,531,494 11,917,184 2,838,355 10,983,672 11,502,663 - - 56,773,368 ------- ----------- ----------- ----------- ----------- ----------- ---------- ---------- ------------ DISTRIBUTIONS TO PARTICIPANTS: Hardship withdrawals - (1,136,757) (447,734) (154,273) (539,941) (923,313) - - (3,202,018) Terminations - (982,822) (868,973) (4,610,409) (590,547) (372,155) - - (7,424,906) Excess contributions - (18,458) (20,056) (3,266) (22,626) (23,521) - - (87,927) ------- ----------- ----------- ----------- ----------- ----------- ---------- ---------- ------------ Total distributions - (2,138,037) (1,336,763) (4,767,948) (1,153,114) (1,318,989) - - (10,714,851) ------- ----------- ----------- ----------- ----------- ----------- ---------- ---------- ------------ INTERFUND TRANSFERS 61,343 523,773 8,156,117 (5,925,886) 3,585,351 375,968 (3,047,615) (3,729,051) - TRANSFERS FROM PRIOR PLANS - 19,050,678 4,257,624 66,608,652 11,103,672 17,947,230 - - 118,967,856 TRANSFERS TO PRICE ENTERPRISE, INC. PLAN - (123,229) (428,706) (138,416) (223,968) - (157,153) (296,292) (1,367,764) NET INCREASE (DECREASE) IN NET ASSETS AVAILABLE FOR PLAN BENEFITS 61,343 38,355,024 28,224,388 71,417,378 29,705,732 31,828,851 (3,214,961) (4,015,387) 192,362,368 NET ASSETS AVAILABLE FOR PLAN BENEFITS, beginning of year - 2,355,891 5,171,547 - 3,256,033 - 3,214,961 4,015,387 18,013,819 ------- ----------- ----------- ----------- ----------- ----------- ---------- ---------- ------------ NET ASSETS AVAILABLE FOR PLAN BENEFITS, end of year $61,343 $40,710,915 $33,395,935 $71,417,378 $32,961,765 $31,828,851 $ - $ - $210,376,187 ======= =========== =========== =========== =========== =========== ========== ========== ============
The accompanying notes and schedules are an integral part of this statement. PRICE/COSTCO, INC. 401(K) RETIREMENT PLAN EIN: 33-0572969 PIN 002 ITEM 27D "SCHEDULE OF REPORTABLE TRANSACTIONS" FOR THE YEAR ENDED DECEMBER 31, 1995
Category (i) - Single transactions in excess of 5 percent of plan assets at January 1, 1995 - ------------------------------------------------------------------------------------------- Number of Shares/Units or Total Purchase or Description of Assets Principal Amount Sale Price Cost of Asset Gain or (loss) - ------------------------ ------------------------- ----------------- ------------- -------------- Stable Value Fund Purchase 21,419,968 $21,419,968 $21,419,968 $ - Sale 2,313,450 2,313,450 2,313,450 - Equity Income Fund - Purchase 481,859 7,723,617 7,723,617 - Spectrum Income Fund - Purchase 6,988,609 70,553,682 70,533,682 - Spectrum Growth Fund - Purchase 989,975 10,952,437 10,952,437 - PriceCostco Common Stock Purchase 1,391,645 26,731,890 26,731,890 - Ginnie Mae Fund - Sale 362,045 3,204,099 3,449,014 (244,915) Capital Appreciation Fund Sale 331,850 4,025,343 4,081,722 (56,379)
The accompanying notes are an integral part of this schedule. PRICE/COSTCO, INC. 401(K) RETIREMENT PLAN EIN: 33-0572969 PIN 002 ITEM 27D "SCHEDULE OF REPORTABLE TRANSACTIONS" FOR THE YEAR ENDED DECEMBER 31, 1995
Category (iii) - Series of transactions in excess of 5% of plan assets at January 1, 1995 - ----------------------------------------------------------------------------------------- Description of Assets Number of Purchases Number of Sales Purchase Price Selling Price Gain or (loss) - ------------------------- ------------------- --------------- -------------- ------------- -------------- Stable Value Fund 94 111 $31,398,556 $ 5,293,538 $ - Equity Income Fund 160 48 19,690,178 904,994 124,208 Spectrum Income Fund 45 156 75,466,607 13,039,872 916,256 Spectrum Growth Fund 157 50 21,968,759 763,541 102,392 PriceCostco Common Stock 97 93 34,035,160 1,915,292 (337,213)
The accompanying notes are an integral part of this schedule. PRICE COSTCO 401(K) RETIREMENT PLAN EIN 33-0572969 PIN 002 FINANCIAL STATEMENTS AND SCHEDULES DECEMBER 31, 1995 AND 1994 TOGETHER WITH AUDITORS' REPORT PRICE/COSTCO, INC. 401(K) RETIREMENT PLAN FINANCIAL STATEMENTS AND SCHEDULES DECEMBER 31, 1995 AND 1994 INDEX REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS FINANCIAL STATEMENTS Statements of Net Assets Available for Plan Benefits Statement of Changes in Net Assets Available for Plan Benefits NOTES TO FINANCIAL STATEMENTS AND SCHEDULES SUPPLEMENTAL INFORMATION Schedule I, Item 27a - Schedule of Assets Held for Investment Purposes as of December 31, 1995 Schedule II, Item 27d - Schedule of Reportable Transactions for the Year Ended December 31, 1995 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Benefit Committee of the Price/Costco, Inc. 401(K) Retirement Plan: We have audited the accompanying statements of net assets available for plan benefits of PriceCostco 401(K) Retirement Plan as of December 31, 1995 and 1994, and the related statement of changes in net assets available for plan benefits for the year ended December 31, 1995. 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 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 Plan as of December 31, 1995 and 1994, and the changes in its net assets available for benefits for the year ended December 31, 1995, in conformity with generally accepted accounting principles. 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 purposes of complying with the Department of Labor's 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. The fund information in the statements of net assets available for plan benefits and the statement of changes in net assets available for plan benefits are presented for the purpose 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. Arthur Andersen LLP Seattle, Washington, June 24, 1996 PRICE/COSTCO INC. 401(K) RETIREMENT PLAN NOTES TO FINANCIAL STATEMENTS AND SCHEDULES DECEMBER 31, 1995 1. PLAN DESCRIPTION: The following description of the Price/Costco Inc. (the Company or PriceCostco) 401(k) Retirement Plan (the Plan) provides only general information, reflecting amendments effective as of January 1, 1995. Participants should refer to the Plan agreement for a more complete description of the Plan's provisions. The Price Company and Costco Wholesale Corporation are wholly owned subsidiaries of the Company. GENERAL The Plan is a defined contribution plan subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). Prior to January 1, 1995, the Plan was named the Price Company 401(k) Plan, and eligible participants included certain employees of the Price Company. Effective January 1, 1995, the Plan was amended and renamed the PriceCostco 401(k) Retirement Plan, and participation was expanded to include all participants formerly covered by The Costco Wholesale Corporation Employees' 401(k) Retirement Plan and The Price Company Profit Sharing Plan (the Combining Plans). Effective March 15, 1995 assets totaling $118,967,856 were transferred to the Plan from the Combining Plans. Effective January 3, 1995, assets totaling $1,367,764 were transferred from the Plan into the Price Enterprises, Inc. 401(K) Plan. Price Enterprises, Inc. was a wholly owned subsidiary of the Company that was spun off from the Company as of December 21, 1994. ELIGIBILITY The Plan covers certain employees of Costco Wholesale Corporation and The Price Company, who have completed at least 1,000 hours of service within one year, based on their date of hire and are age 18 or older. Price Club employees covered by a collective bargaining agreement in the State of California are not eligible for participation. CONTRIBUTIONS Each year, participants may contribute from 1% to 15% of their compensation before income taxes, subject to certain limitations set by the Internal Revenue Service (IRS). Excess contributions returned to participants represented contributions made in excess of IRS limitations. Participants may also contribute amounts representing distributions from other qualified benefit or contribution plans (known as "rollover" contributions). The Company contributes 50% of the first $1,000 of compensation that a participant contributes to the Plan. The Company may, at its discretion, make a qualified nonelective contribution. In addition, for each plan year, the Company may contribute a discretionary amount to the account of each participant who is employed by the Company on the last day of the plan year. The discretionary contribution may range from 3% to 10% of compensation based on years of service. All contributions are made to the Plan in cash. PARTICIPANT ACCOUNTS Each participant's account is credited with the salary deferral amount, employer matching and discretionary contributions, and any qualified non-elective contributions. All contributions to the participant's account are reflected in units of each investment fund selected or shares of Company stock. The net investment results and any expenses charged to the Plan determine the value of the units of each investment fund and the value of the shares of Company stock. VESTING Participants are immediately vested in their contributions and any qualified nonelective contributions, plus actual earnings thereon. Vesting in the employer matching and discretionary contributions is based on years of continuous service, according to the following schedule: Years of Service Percentage Vested ---------------- ----------------- Less than 2 0% 2-3 10% 3-4 25% 4-5 50% 5 or more 100% Benefits earned by participants under the Combining Plans remained vested under this Plan, at least to the extent that the interest of the participant was vested under the Combining Plans. FORFEITURES During 1995, forfeitures of approximately $1,035,000 were used to reduce the employer contributions to the Plan. Forfeitures can be restored to a participant's account if the participant is reemployed by the Company prior to the expiration of five consecutive years of break in service and repays the full dollar amount distributed on account of the termination within five years of the reemployment date. As of December 31, 1995, forfeitures of approximately $185,000 had not been used to reduce employer contributions. These forfeitures will be used to offset future employer contributions. INVESTMENT OPTIONS Upon enrollment in the Plan, a participant may direct contributions in any of the five investment options listed below. T. Rowe Price trustees all assets and provides recordkeeping of all participant accounts. T. Rowe Price Stable Value Fund - Funds are invested primarily in high- quality insurance company and bank-issued investment contracts. Spectrum Income Fund - Funds are invested in a managed mix of funds including four domestic bond funds, an international bond fund, a money market fund and an income-oriented stock fund. Equity Income Fund - Funds are invested in common stocks of established companies that pay above-average dividends and have prospects of future dividend increases. Spectrum Growth Fund - Funds are invested in a managed mix of funds, including five U.S. stock funds, an international stock fund and a money market fund. PriceCostco Stock Fund - Funds are invested in common stock of PriceCostco. Participants may change their investment options daily. Effective January 3, 1995, participants' account balances in the Ginnie Mae Fund and the Capital Appreciation Fund were transferred to the Spectrum Income Fund and Equity Income Fund, respectively. PAYMENT OF BENEFITS Upon termination of employment, death or total disability, the vested interest in a participant's account is distributed in a lump sum. Participants may apply for a distribution of all or a portion of the vested interest at any time after attainment of age 59 1/2. Participants are also eligible to make hardship withdrawals from their salary deferral contributions in the event of certain financial hardships. Following a hardship withdrawal, participants are not allowed to contribute to the Plan for a one-year period. PLAN ADMINISTRATOR The Plan is administered by the Benefits Committee (the Committee), which is appointed by the Board of Directors of the Company. ADMINISTRATIVE EXPENSES All administrative and custodial fees of the Plan are paid by the Company. 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: BASIS OF ACCOUNTING The financial statements of the Plan are prepared under the accrual method of accounting. USE OF ESTIMATES The preparation of financial statements requires the use of estimates. Actual results could differ from those estimates. INVESTMENT VALUATION AND INCOME RECOGNITION Investments are stated at fair value. Registered investment company funds and PriceCostco common stock are valued using the closing price of the investments on the last day of business of the plan year. Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex- dividend date. Net appreciation (depreciation) in fair value of assets represents the change in the fair value of assets and is computed using the moving average method. PAYMENT OF BENEFITS Benefits are recorded when paid. Excess contributions represent contributions, to be returned to participants, exceeding certain IRS limitations. 3. RELATED PARTY TRANSACTIONS: Certain plan investments are shares of mutual funds managed by T. Rowe Price. T. Rowe Price is also the trustee/custodian, as defined by the Plan. 4. PLAN TERMINATION: Although it has not expressed any intent to do so, the Company 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, participants will become 100% vested in their accounts. 5. TAX STATUS: The Internal Revenue Service has informed the Company, by a letter dated January 12, 1996, that an application for determination concerning the qualification of the Plan has been received. 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 Internal Revenue Service. Therefore, they believe that the Plan was qualified and the related trust was tax-exempt through the year ended December 31, 1995. PRICE/COSTCO INC. 401(K) RETIREMENT PLAN EIN: 33-0572969 PIN: 002 ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AS OF DECEMBER 31, 1995 Identity of Party Involved/ Number of Description of Investments Shares Cost Current Value - -------------------------- --------- ------------ ------------- Cash and cash equivalents - $ 61,343 $ 61,343 T. Rowe Price: Stable Value Fund 28,521,750 28,521,752 28,521,752 Equity Income Fund 1,401,370 24,065,478 28,041,414 Spectrum Income Fund 6,240,591 63,407,089 70,144,239 Spectrum Growth Fund 2,065,805 24,610,027 27,867,707 PriceCostco Common Stock 1,748,012 31,736,914 26,657,187 ------------ ------------ $172,402,603 $181,293,642 ============ ============ The accompanying notes are an integral part of this schedule. -----END PRIVACY-ENHANCED MESSAGE-----