Equity and Comprehensive Income

9 Months Ended

May 08, 2011

Note 5—Equity and Comprehensive Income

Dividends

In the third quarter of 2011, the Board of Directors approved an increase in the quarterly cash dividend rate from $0.205 to $0.24 per share.

Stock Repurchase Programs

The Company's stock repurchase activity during the third quarter and first thirty-six weeks of 2011 and 2010 is summarized in the following table:


	Shares Repurchased (000's)		Average Price per Share		Total Cost
Third quarter of 2011		1,393	$	73.25	$	102
First thirty-six weeks of 2011		5,144		67.40		347

Third quarter of 2010		1,925	$	59.56	$	114
First thirty-six weeks of 2010		2,175		59.48		129

On April 26, 2011, the Board of Directors authorized a new share repurchase program in the amount of $4,000, expiring April 26, 2015. This authorization revoked previously authorized but unused amounts, totaling $792. The amounts in the table above may differ from the stock repurchase balances in the condensed consolidated statements of cash flows to the extent that repurchases had not settled at the end of the quarter. The remaining amount available for stock repurchases under the approved plan was approximately $4,000 at May 8, 2011. Purchases are made from time-to-time as conditions warrant in the open market or in block purchases, and pursuant to share repurchase plans under SEC Rule 10b5-1. Repurchased shares are retired.

Components of Equity and Comprehensive Income

The accumulated other comprehensive income consists of foreign currency translation adjustments and unrealized gains and losses on investments and their related tax effects.

The following tables show the changes in equity attributable to Costco and the noncontrolling interests of consolidated entities in which the Company has control, but not total ownership interest:


	Attributable to Costco			Noncontrolling Interests		Total Equity
Equity at August 29, 2010	$	10,829		$	101	$	10,930
Initial consolidation of noncontrolling interest in Costco Mexico		0			357		357
Comprehensive income:
Foreign currency translation adjustment and other		362			62		424
Net income		984			58		1,042

Total comprehensive income		1,346			120		1,466
Stock options exercised and vesting of restricted stock units (RSUs), including tax effects		265			0		265
Conversion of convertible notes		2			0		2
Repurchases of common stock		(347	)		0		(347	)
Stock-based compensation		152			0		152
Cash dividends		(284	)		0		(284	)

Equity at May 8, 2011	$	11,963		$	578	$	12,541


	Attributable to Costco			Noncontrolling Interests		Total Equity
Equity at August 30, 2009	$	10,024		$	80	$	10,104
Comprehensive income:
Foreign currency translation adjustment and other		40			3		43
Unrealized gain on short term investments, net of tax		1			0		1
Net income		871			15		886

Total comprehensive income		912			18		930
Stock options exercised and vesting of RSUs, including tax effects		176			0		176
Conversion of convertible notes		1			0		1
Repurchases of common stock		(129	)		0		(129	)
Stock-based compensation		139			0		139
Cash dividends		(249	)		0		(249	)

Equity at May 9, 2010	$	10,874		$	98	$	10,972

The following table shows components of total comprehensive income for the third quarter of 2011 and 2010:


	12 Weeks Ended
	May 8, 2011		May 9, 2010
Net income including noncontrolling interests	$	341	$	311
Unrealized gain on short-term investments, net of tax		3		0
Foreign currency translation adjustment and other		161		7

Comprehensive income		505		318
Less comprehensive income attributable to noncontrolling interests		37		6

Comprehensive income attributable to Costco	$	468	$	312

- Definition

Disclosures related to accounts comprising shareholders' equity, including other comprehensive income. Includes: (1) balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings; (2) accumulated balance for each classification of other comprehensive income and total amount of comprehensive income; (3) amount and nature of changes in separate accounts, including the number of shares authorized and outstanding, number of shares issued upon exercise and conversion, and for other comprehensive income, the adjustments for reclassifications to net income; (4) rights and privileges of each class of stock authorized; (5) basis of treasury stock, if other than cost, and amounts paid and accounting treatment for treasury stock purchased significantly in excess of market; (6) dividends paid or payable per share and in the aggregate for each class of stock for each period presented; (7) dividend restrictions and accumulated preferred dividends in arrears (in aggregate and per share amount); (8) retained earnings appropriations or restrictions, such as dividend restrictions; (9) impact of change in accounting principle, initial adoption of new accounting principle and correction of an error in previously issued financial statements; (10) shares held in trust for Employee Stock Ownership Plan (ESOP); (11) deferred compensation related to issuance of capital stock; (12) note received for issuance of stock; (13) unamortized discount on shares; (14) description, terms and number of warrants or rights outstanding; (15) shares under subscription and subscription receivables; effective date of new retained earnings after quasi-reorganization and deficit eliminated by quasi-reorganization and, for a period of at least ten years after the effective date, the point in time from which the new retained dates; and (16) retroactive effective of subsequent change in capital structure.

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