-----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, S84AGV2W57wF/DIWVl80GZKklcztikXHjnl6NS1YhOGagH+/lsnmmCfyJ7FacEKi hI2F4VsO+5RTVFz5nzEl1g== /in/edgar/work/20000627/0000912057-00-029789/0000912057-00-029789.txt : 20000920 0000912057-00-029789.hdr.sgml : 20000920 ACCESSION NUMBER: 0000912057-00-029789 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19991231 FILED AS OF DATE: 20000627 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COSTCO WHOLESALE CORP /NEW CENTRAL INDEX KEY: 0000909832 STANDARD INDUSTRIAL CLASSIFICATION: [5331 ] IRS NUMBER: 330572969 STATE OF INCORPORATION: WA FISCAL YEAR END: 0830 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 333-04355 FILM NUMBER: 661090 BUSINESS ADDRESS: STREET 1: 999 LAKE DRIVE CITY: ISSAQUAH STATE: WA ZIP: 98027- BUSINESS PHONE: (206)-313- MAIL ADDRESS: STREET 1: 999 LAKE DRIVE CITY: ISSAQUAD STATE: WA ZIP: 98027 FORMER COMPANY: FORMER CONFORMED NAME: COSTCO COMPANIES INC DATE OF NAME CHANGE: 19970401 FORMER COMPANY: FORMER CONFORMED NAME: PRICE/COSTCO INC DATE OF NAME CHANGE: 19930728 11-K 1 a11-k.txt FORM 11-K [COSTCO WHOLESALE LOGO] 401(k) RETIREMENT PLAN EIN 33-0572969 PIN 002 FINANCIAL STATEMENTS AND SCHEDULE AS OF DECEMBER 31, 1999 AND 1998 TOGETHER WITH AUDITORS' REPORT COSTCO 401(k) RETIREMENT PLAN FINANCIAL STATEMENTS AND SCHEDULE DECEMBER 31, 1999 AND 1998 INDEX REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS FINANCIAL STATEMENTS Statements of Net Assets Available for Plan Benefits as of December 31, 1999 and 1998 Statement of Changes in Net Assets Available for Plan Benefits for the Year Ended December 31, 1999 NOTES TO FINANCIAL STATEMENTS AND SCHEDULE SUPPLEMENTAL INFORMATION Schedule I - Schedule of Assets Held for Investment Purposes as of December 31, 1999 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Benefits Committee of the Costco 401(k) Retirement Plan: We have audited the accompanying statements of net assets available for plan benefits of the Costco 401(k) Retirement Plan as of December 31, 1999 and 1998, and the related statement of changes in net assets available for plan benefits for the year ended December 31, 1999. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. 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 plan benefits of the Plan as of December 31, 1999 and 1998, and the changes in its net assets available for plan benefits for the year ended December 31, 1999, in conformity with accounting principles generally accepted in the United States. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets held for investment purposes is presented for purposes of additional analysis and is not a required part of the basic financial statements but is 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 supplemental schedule has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ Arthur Andersen LLP Seattle, Washington April 20, 2000 COSTCO 401(k) RETIREMENT PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS AS OF DECEMBER 31, 1999 AND 1998
1999 1998 ------------ ------------ ASSETS: Investments at fair value-- Shares of registered investment company funds: Cash and cash equivalents $ 217,840 $ 1,823,970 Equity Income Fund 94,708,446 95,093,047 Spectrum Income Fund 53,948,751 61,028,642 Spectrum Growth Fund 109,518,397 90,026,664 New Horizons Fund 18,667,199 11,453,941 Mid-Cap Growth Fund 41,157,400 23,007,181 Equity Index Fund 20,122,982 -- International Stock Fund 3,104,443 -- Common commingled trust fund: Stable Value Fund 97,058,613 81,510,109 Costco Wholesale Corporation Common Stock 345,724,304 229,630,607 Participant loans 34,411,486 24,430,556 ------------ ------------ Total investments 818,639,861 618,004,717 Contributions receivable-- Employer 51,112,854 44,117,444 ------------ ------------ NET ASSETS AVAILABLE FOR PLAN BENEFITS $869,752,715 $662,122,161 ============ ============
The accompanying notes and schedule are an integral part of these statements. COSTCO 401(k) RETIREMENT PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS FOR THE YEAR ENDED DECEMBER 31, 1999
NET INVESTMENT INCOME: Net appreciation in fair value of investments-- Shares of registered investment company funds $ 10,087,636 Common stock 65,054,014 Interest 2,865,524 Dividends 34,281,391 ------------ Total net investment income 112,288,565 CONTRIBUTIONS TO THE PLAN: Employee 61,013,712 Employer 62,817,297 ------------ Total contributions 123,831,009 DISTRIBUTIONS TO PARTICIPANTS: In-service withdrawals (2,625,984) Terminations (25,863,036) ------------ Total distributions (28,489,020) NET INCREASE IN NET ASSETS AVAILABLE FOR PLAN BENEFITS 207,630,554 NET ASSETS AVAILABLE FOR PLAN BENEFITS, beginning of year 662,122,161 ------------ NET ASSETS AVAILABLE FOR PLAN BENEFITS, end of year $869,752,715 ============
The accompanying notes and schedule are an integral part of this statement. COSTCO 401(k) RETIREMENT PLAN NOTES TO FINANCIAL STATEMENTS AND SCHEDULE DECEMBER 31, 1999 1. PLAN DESCRIPTION: The following description of the Costco 401(k) Retirement Plan (the Plan) provides only general information. Participants should refer to the plan document for a more complete description of the Plan's provisions. The Plan is a defined contribution plan subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). Participants in the Plan are employees of Costco Wholesale Corporation (the "Company"), including The Price Company, a wholly owned subsidiary. ELIGIBILITY The Plan covers certain employees over the age of 18 who have completed one year of service containing a minimum of 1,000 hours worked. The employees enter the Plan on the entry date following the fulfillment of these requirements. The Price Company employees covered by a collective bargaining agreement in the State of California are not eligible for participation in this Plan. 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). Participants may also contribute amounts representing distributions from other qualified benefit or contribution plans (known as "rollover" contributions). The Company matches 50% of the employee's contribution, up to a maximum employer matching contribution of $500 per year. The Company may also, 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 and was approved for the year ended December 31, 1999. PARTICIPANT ACCOUNTS Each participant's account is credited with his or her contributions, employer matching and discretionary contributions, and an allocation of plan earnings based on the daily valuation of investments. Allocations are based on participant account balances as defined by the Plan. The benefit to which a participant is entitled is the benefit that can be provided from the participant's vested account. VESTING Participants are immediately vested in their contributions and any qualified non-elective contributions, plus actual earnings thereon. Vesting in the employer matching and discretionary contributions is based on years of 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 FORFEITURES During 1999, forfeitures of $500,000 were used to reduce the employer contributions to the Plan. Forfeitures can be restored to a participant's account if the participant is re-employed by the Company prior to the expiration of five consecutive breaks in service and repays the full dollar amount distributed because of the termination within five years of the reemployment date. As of December 31, 1999 and 1998, forfeitures of approximately $892,000 and $645,000, respectively, 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 into any of the nine investment options consisting of seven registered investment company funds, a common commingled trust fund and Company stock, as listed on the statements of net assets available for plan benefits. T. Rowe Price is the trustee for all investments, serves as investment manager for all registered investment company and common commingled trust funds and provides recordkeeping of all participant accounts. Funds may be temporarily invested in a cash account. Participants may change their investment options and transfer amounts between funds daily. DISTRIBUTIONS Upon termination of employment or death, the vested interest in a participant's account is payable 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. PARTICIPANT LOANS A participant may borrow the lesser of $50,000 or 45% of his or her vested account balance, calculated using participant pre-tax, rollover, Company matching and Company discretionary contribution amounts. However, only the participant pre-tax, rollover and Company matching amounts are eligible to borrow against, with a minimum loan of $1,000. Loans are payable through payroll deductions over a period ranging up to 180 months, depending on the purpose of the loan. The interest rate is determined by the plan administrator based on Bank of America prime rate on the last day of the calendar quarter. The rates at December 31, 1999 ranged from 8.75% to 10.50%, depending on the type of loan. The loans have various maturity dates, through 2014. PLAN ADMINISTRATOR The Plan is administered by the Benefits 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 netted against net investment income. 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 and common commingled trust funds and Costco Wholesale Corporation 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 in fair value of investments includes the change in the fair value of assets from one period to the next, and realized gains and losses, and is computed using the moving average method. PAYMENT OF BENEFITS Benefits are recorded when paid. ADOPTION OF SOP The Accounting Standards Executive Committee issued Statement of Position 99-3, "Accounting for and Reporting of Certain Defined Contribution Plan Investments and Other Disclosure Matters" (SOP), which eliminates the requirement for a defined contribution plan to disclose participant-directed investment programs. The 1998 financial statement has been reclassified to eliminate the participant-directed fund investment program disclosures. 3. 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. 4. TAX STATUS: The IRS has informed the Company, by a letter dated November 30, 1998, that the Plan is designed in accordance with applicable sections of the Internal Revenue Code. The Plan has been amended subsequent to receiving a 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 IRS. SCHEDULE I COSTCO 401(k) RETIREMENT PLAN EIN: 33-0572969 PIN: 002 SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AS OF DECEMBER 31, 1999
Identity of Party Involved/ Description of Investments Current Value - ------------------------------------------------------------- -------------------- *T. Rowe Price: Cash and cash equivalents $ 217,840 Equity Income Fund 94,708,446 Spectrum Income Fund 53,948,751 Spectrum Growth Fund 109,518,397 New Horizons Fund 18,667,199 Mid-Cap Growth Fund 41,157,400 Equity Index Fund 20,122,982 International Stock Fund 3,104,443 Stable Value Fund 97,058,613 *Costco Wholesale Corporation Common Stock 345,724,304 *Participant loans, with interest rates of 8.75% to 10.50% maturing through 2014 34,411,486 ------------ $818,639,861 ============
*Represents a party in interest. The accompanying notes are an integral part of this schedule. EX-23.1 2 ex-23_1.txt EXHIBIT 23.1 [ARTHUR ANDERSEN LETTERHEAD] CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation of our reports included in this Form 11-K, into the Company's previously filed Registration Statement File No. 333-21093 on Form S-8. /s/ Arthur Andersen LLP Seattle, Washington June 23, 2000 -----END PRIVACY-ENHANCED MESSAGE-----