Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Aug. 30, 2015 | Oct. 05, 2015 | Feb. 15, 2015 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Aug. 30, 2015 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | COST | ||
Entity Registrant Name | COSTCO WHOLESALE CORP /NEW | ||
Entity Central Index Key | 909,832 | ||
Current Fiscal Year End Date | --08-30 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 437,406,636 | ||
Entity Public Float | $ 64,213,793,359 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Aug. 30, 2015 | Aug. 31, 2014 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 4,801 | $ 5,738 |
Short-term investments | 1,618 | 1,577 |
Receivables, net | 1,224 | 1,148 |
Merchandise inventories | 8,908 | 8,456 |
Deferred income taxes and other current assets | 748 | 669 |
Total current assets | 17,299 | 17,588 |
PROPERTY AND EQUIPMENT | ||
Land | 4,961 | 4,716 |
Buildings and improvements | 12,618 | 12,522 |
Equipment and fixtures | 5,274 | 4,845 |
Construction in progress | 811 | 592 |
Gross property and equipment | 23,664 | 22,675 |
Less accumulated depreciation and amortization | (8,263) | (7,845) |
Net property and equipment | 15,401 | 14,830 |
OTHER ASSETS | 740 | 606 |
TOTAL ASSETS | 33,440 | 33,024 |
CURRENT LIABILITIES | ||
Accounts payable | 9,011 | 8,491 |
Current portion long-term debt | 1,283 | 0 |
Accrued salaries and benefits | 2,468 | 2,231 |
Accrued member rewards | 813 | 773 |
Deferred membership fees | 1,269 | 1,254 |
Other current liabilities | 1,696 | 1,663 |
Total current liabilities | 16,540 | 14,412 |
LONG-TERM DEBT, excluding current portion | 4,864 | 5,093 |
DEFERRED INCOME TAXES AND OTHER LIABILITIES | 1,193 | 1,004 |
Total liabilities | $ 22,597 | $ 20,509 |
COMMITMENTS AND CONTINGENCIES | ||
EQUITY | ||
Preferred stock $.005 par value; 100,000,000 shares authorized; no shares issued and outstanding | $ 0 | $ 0 |
Common stock $.005 par value; 900,000,000 shares authorized; 437,952,000 and 437,683,000 shares issued and outstanding | 2 | 2 |
Additional paid-in capital | 5,218 | 4,919 |
Accumulated other comprehensive loss | (1,121) | (76) |
Retained earnings | 6,518 | 7,458 |
Total Costco stockholders' equity | 10,617 | 12,303 |
Noncontrolling interests | 226 | 212 |
Total equity | 10,843 | 12,515 |
TOTAL LIABILITIES AND EQUITY | $ 33,440 | $ 33,024 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Aug. 30, 2015 | Aug. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.005 | $ 0.005 |
Preferred stock, shares authorized | 100,000,000 | 100,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.005 | $ 0.005 |
Common stock, shares authorized | 900,000,000 | 900,000,000 |
Common stock, shares issued | 437,952,000 | 437,683,000 |
Common stock, shares outstanding | 437,952,000 | 437,683,000 |
Consolidated Statements Of Inco
Consolidated Statements Of Income - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 4 Months Ended | 12 Months Ended | |||||||||
May. 10, 2015 | Feb. 15, 2015 | Nov. 23, 2014 | May. 11, 2014 | Feb. 16, 2014 | Nov. 24, 2013 | Aug. 30, 2015 | Aug. 31, 2014 | Aug. 30, 2015 | Aug. 31, 2014 | Sep. 01, 2013 | ||
REVENUE | ||||||||||||
Net sales | $ 25,517 | $ 26,872 | $ 26,284 | $ 25,233 | $ 25,756 | $ 24,468 | $ 34,993 | $ 34,755 | $ 113,666 | $ 110,212 | $ 102,870 | |
Membership fees | 584 | 582 | 582 | 561 | 550 | 549 | 785 | 768 | 2,533 | 2,428 | 2,286 | |
Total revenue | 26,101 | 27,454 | 26,866 | 25,794 | 26,306 | 25,017 | 35,778 | 35,523 | 116,199 | 112,640 | 105,156 | |
OPERATING EXPENSES | ||||||||||||
Merchandise costs | 22,687 | 23,897 | 23,385 | 22,554 | 23,043 | 21,824 | 31,096 | 31,037 | 101,065 | 98,458 | 91,948 | |
Selling, general and administrative | 2,579 | 2,671 | 2,696 | 2,487 | 2,531 | 2,501 | 3,499 | 3,380 | 11,445 | 10,899 | 10,104 | |
Preopening expenses | 14 | 9 | 15 | 16 | 8 | 24 | 27 | 15 | 65 | 63 | 51 | |
Operating income | 821 | 877 | 770 | 737 | 724 | 668 | 1,156 | 1,091 | 3,624 | 3,220 | 3,053 | |
OTHER INCOME (EXPENSE) | ||||||||||||
Interest expense | (31) | (27) | (26) | (25) | (26) | (27) | (40) | (35) | (124) | (113) | (99) | |
Interest income and other, net | 9 | 20 | 35 | 12 | 30 | 18 | 40 | 30 | 104 | 90 | 97 | |
INCOME BEFORE INCOME TAXES | 799 | 870 | 779 | 724 | 728 | 659 | 1,156 | 1,086 | 3,604 | 3,197 | 3,051 | |
Provision for income taxes | 280 | 263 | [1] | 274 | 245 | 255 | 228 | 378 | 381 | 1,195 | 1,109 | 990 |
Net income including noncontrolling interests | 519 | 607 | 505 | 479 | 473 | 431 | 778 | 705 | 2,409 | 2,088 | 2,061 | |
Net income attributable to noncontrolling interests | (3) | (9) | (9) | (6) | (10) | (6) | (11) | (8) | (32) | (30) | (22) | |
NET INCOME ATTRIBUTABLE TO COSTCO | $ 516 | $ 598 | $ 496 | $ 473 | $ 463 | $ 425 | $ 767 | $ 697 | $ 2,377 | $ 2,058 | $ 2,039 | |
NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO: | ||||||||||||
Basic (in dollars per share) | $ 1.17 | $ 1.36 | $ 1.13 | $ 1.08 | $ 1.05 | $ 0.97 | $ 1.75 | $ 1.59 | $ 5.41 | $ 4.69 | $ 4.68 | |
Diluted (in dollars per share) | $ 1.17 | $ 1.35 | $ 1.12 | $ 1.07 | $ 1.05 | $ 0.96 | $ 1.73 | $ 1.58 | $ 5.37 | $ 4.65 | $ 4.63 | |
Shares used in calculation (000's) | ||||||||||||
Basic (shares) | 440,070 | 440,384 | 438,760 | 439,446 | 439,776 | 437,970 | 438,835 | 437,875 | 439,455 | 438,693 | 435,741 | |
Diluted (shares) | 443,132 | 442,896 | 442,210 | 442,720 | 442,829 | 442,420 | 442,404 | 441,887 | 442,716 | 442,485 | 440,512 | |
CASH DIVIDENDS DECLARED PER COMMON SHARE | $ 0.40 | $ 5.355 | [2] | $ 0.355 | $ 0.355 | $ 0.31 | $ 0.31 | $ 0.40 | $ 0.355 | $ 6.51 | $ 1.33 | $ 8.17 |
[1] | Includes a $57 tax benefit recorded in the second quarter in connection with the special cash dividend paid to employees through the Company's 401(k) Retirement Plan. | |||||||||||
[2] | Includes the special cash dividend of $5.00 per share paid in February 2015. |
Consolidated Statements Of Comp
Consolidated Statements Of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Aug. 30, 2015 | Aug. 31, 2014 | Sep. 01, 2013 | |
Statement of Comprehensive Income [Abstract] | |||
NET INCOME INCLUDING NONCONTROLLING INTERESTS | $ 2,409 | $ 2,088 | $ 2,061 |
Foreign-currency translation adjustment and other, net | (1,063) | 49 | (278) |
Comprehensive income | 1,346 | 2,137 | 1,783 |
Less: Comprehensive income attributable to noncontrolling interests | 14 | 33 | 22 |
COMPREHENSIVE INCOME ATTRIBUTABLE TO COSTCO | $ 1,332 | $ 2,104 | $ 1,761 |
Consolidated Statements of Equi
Consolidated Statements of Equity - USD ($) shares in Thousands, $ in Millions | Total | Total Costco Stockholders' Equity | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Noncontrolling Interests |
Common stock at beginning of period (shares) at Sep. 02, 2012 | 432,350 | ||||||
Equity at beginning of period at Sep. 02, 2012 | $ 12,518 | $ 12,361 | $ 2 | $ 4,369 | $ 156 | $ 7,834 | $ 157 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 2,061 | 2,039 | 2,039 | 22 | |||
Foreign-currency translation adjustment and other, net | (278) | (278) | (278) | 0 | |||
Stock-based compensation | 285 | 285 | 285 | ||||
Stock options exercised, including tax effects (shares) | 1,435 | ||||||
Stock options exercised, including tax effects | 75 | 75 | $ 0 | 75 | |||
Release of vested RSUs, including tax effects (shares) | 2,609 | ||||||
Release of vested RSUs, including tax effects | (85) | (85) | $ 0 | (85) | |||
Conversion of convertible notes (shares) | 802 | ||||||
Conversion of convertible notes | $ 30 | 30 | $ 0 | 30 | |||
Repurchases of common stock (shares) | (357) | (357) | |||||
Repurchases of common stock | $ (34) | (34) | $ 0 | (4) | (30) | ||
Cash dividends declared | (3,560) | (3,560) | (3,560) | ||||
Common stock at end of period (shares) at Sep. 01, 2013 | 436,839 | ||||||
Equity at end of period at Sep. 01, 2013 | 11,012 | 10,833 | $ 2 | 4,670 | (122) | 6,283 | 179 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 2,088 | 2,058 | 2,058 | 30 | |||
Foreign-currency translation adjustment and other, net | 49 | 46 | 46 | 3 | |||
Stock-based compensation | 327 | 327 | 327 | ||||
Stock options exercised, including tax effects (shares) | 971 | ||||||
Stock options exercised, including tax effects | 58 | 58 | $ 0 | 58 | |||
Release of vested RSUs, including tax effects (shares) | 2,770 | ||||||
Release of vested RSUs, including tax effects | (102) | (102) | $ 0 | (102) | |||
Conversion of convertible notes (shares) | 18 | ||||||
Conversion of convertible notes | $ 1 | 1 | $ 0 | 1 | |||
Repurchases of common stock (shares) | (2,915) | (2,915) | |||||
Repurchases of common stock | $ (334) | (334) | $ 0 | (35) | (299) | ||
Cash dividends declared | $ (584) | (584) | (584) | ||||
Common stock at end of period (shares) at Aug. 31, 2014 | 437,683 | 437,683 | |||||
Equity at end of period at Aug. 31, 2014 | $ 12,515 | 12,303 | $ 2 | 4,919 | (76) | 7,458 | 212 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 2,409 | 2,377 | 2,377 | 32 | |||
Foreign-currency translation adjustment and other, net | (1,063) | (1,045) | (1,045) | (18) | |||
Stock-based compensation | 394 | 394 | 394 | ||||
Stock options exercised, including tax effects (shares) | 989 | ||||||
Stock options exercised, including tax effects | 69 | 69 | $ 0 | 69 | |||
Release of vested RSUs, including tax effects (shares) | 2,736 | ||||||
Release of vested RSUs, including tax effects | $ (122) | (122) | $ 0 | (122) | |||
Repurchases of common stock (shares) | (3,456) | (3,456) | |||||
Repurchases of common stock | $ (494) | (494) | $ 0 | (42) | (452) | ||
Cash dividends declared | $ (2,865) | (2,865) | (2,865) | ||||
Common stock at end of period (shares) at Aug. 30, 2015 | 437,952 | 437,952 | |||||
Equity at end of period at Aug. 30, 2015 | $ 10,843 | $ 10,617 | $ 2 | $ 5,218 | $ (1,121) | $ 6,518 | $ 226 |
Consolidated Statements Of Cash
Consolidated Statements Of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Aug. 30, 2015 | Aug. 31, 2014 | Sep. 01, 2013 | |
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net income including noncontrolling interests | $ 2,409 | $ 2,088 | $ 2,061 |
Adjustments to reconcile net income including noncontrolling interests to net cash provided by operating activities: | |||
Depreciation and amortization | 1,127 | 1,029 | 946 |
Stock-based compensation | 394 | 327 | 285 |
Excess tax benefits on stock-based awards | (86) | (84) | (61) |
Other non-cash operating activities, net | (5) | 22 | (7) |
Deferred income taxes | (101) | (63) | 7 |
Changes in operating assets and liabilities: | |||
Increase in merchandise inventories | (890) | (563) | (898) |
Increase in accounts payable | 880 | 529 | 718 |
Other operating assets and liabilities, net | 557 | 699 | 386 |
Net cash provided by operating activities | 4,285 | 3,984 | 3,437 |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Purchases of short-term investments | (1,501) | (2,503) | (2,572) |
Maturities and sales of short-term investments | 1,434 | 2,406 | 2,385 |
Additions to property and equipment | (2,393) | (1,993) | (2,083) |
Other investing activities, net | (20) | (3) | 19 |
Net cash used in investing activities | (2,480) | (2,093) | (2,251) |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Change in bank checks outstanding | (45) | 96 | (70) |
Repayments of short-term borrowings | (51) | (103) | (287) |
Proceeds from short-term borrowings | 51 | 68 | 326 |
Proceeds from issuance of long-term debt | 1,125 | 117 | 3,717 |
Minimum tax withholdings on stock-based awards | (178) | (164) | (121) |
Excess tax benefits on stock-based awards | 86 | 84 | 61 |
Repurchases of common stock | (481) | (334) | (36) |
Cash dividend payments | (2,865) | (584) | (3,560) |
Other financing activities, net | 34 | 34 | 14 |
Net cash (used in) provided by financing activities | (2,324) | (786) | 44 |
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | (418) | (11) | (114) |
Net (decrease) increase in cash and cash equivalents | (937) | 1,094 | 1,116 |
CASH AND CASH EQUIVALENTS BEGINNING OF YEAR | 5,738 | 4,644 | 3,528 |
CASH AND CASH EQUIVALENTS END OF YEAR | 4,801 | 5,738 | 4,644 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | |||
Interest (reduced by $14, $11 and $12, interest capitalized in 2015, 2014 and 2013, respectively) | 117 | 109 | 86 |
Income taxes, net | 1,186 | 869 | 1,001 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | |||
Property acquired under build-to-suit and capital leases | $ 109 | $ 0 | $ 11 |
Consolidated Statements Of Cas8
Consolidated Statements Of Cash Flows (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Aug. 30, 2015 | Aug. 31, 2014 | Sep. 01, 2013 | |
Statement of Cash Flows [Abstract] | |||
Interest, interest capitalized | $ 14 | $ 11 | $ 12 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Aug. 30, 2015 | |
Accounting Policies [Abstract] | |
Summary of Significant Policies | Note 1—Summary of Significant Accounting Policies Description of Business Costco Wholesale Corporation (Costco or the Company), a Washington corporation, and its subsidiaries operate membership warehouses based on the concept that offering members low prices on a limited selection of nationally branded and private-label products in a wide range of merchandise categories will produce high sales volumes and rapid inventory turnover. At August 30, 2015 , Costco operated 686 warehouses worldwide: 480 United States (U.S.) locations (in 43 U.S. states, Washington, D.C., and Puerto Rico), 89 Canada locations, 36 Mexico locations, 27 United Kingdom (U.K.) locations, 23 Japan locations, 12 Korea locations, 11 Taiwan locations, 7 Australia locations, and 1 Spain location. The Company's online business operates websites in the U.S., Canada, U.K., and Mexico. Basis of Presentation The consolidated financial statements include the accounts of Costco Wholesale Corporation, its wholly-owned subsidiaries, and subsidiaries in which it has a controlling interest. The Company reports noncontrolling interests in consolidated entities as a component of equity separate from the Company’s equity. All material inter-company transactions between and among the Company and its consolidated subsidiaries have been eliminated in consolidation. The Company’s net income excludes income attributable to noncontrolling interests in its operations in Taiwan and Korea. Unless otherwise noted, references to net income relate to net income attributable to Costco. Fiscal Year End The Company operates on a 52/53 week fiscal year basis with the fiscal year ending on the Sunday closest to August 31. References to 2015 , 2014 , and 2013 relate to the 52 -week fiscal years ended August 30, 2015 , August 31, 2014 , and September 1, 2013 , respectively. Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles (U.S. GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and assumptions. Cash and Cash Equivalents The Company considers as cash and cash equivalents all cash on deposit, highly liquid investments with a maturity of three months or less at the date of purchase, and proceeds due from credit and debit card transactions with settlement terms of up to one week. Credit and debit card receivables were $ 1,243 and $ 1,383 at the end of 2015 and 2014 , respectively. Short-Term Investments In general, short-term investments have a maturity at the date of purchase of three months to five years. Investments with maturities beyond five years may be classified, based on the Company’s determination, as short-term based on their highly liquid nature and because they represent the investment of cash that is available for current operations. Short-term investments classified as available-for-sale are recorded at fair value using the specific identification method with the unrealized gains and losses reflected in accumulated other comprehensive income (loss) until realized. Realized gains and losses from the sale of available-for-sale securities, if any, are determined on a specific identification basis and are recorded in interest income and other, net in the consolidated statements of income. Short-term investments classified as held-to-maturity are financial instruments that the Company has the intent and ability to hold to maturity and are reported net of any related amortization and are not remeasured to fair value on a recurring basis. The Company periodically evaluates unrealized losses in its investment securities for other-than-temporary impairment, using both qualitative and quantitative criteria. In the event a security is deemed to be other-than-temporarily impaired, the Company recognizes the credit loss component in interest income and other, net in the consolidated statements of income. Fair Value of Financial Instruments The Company accounts for certain assets and liabilities at fair value. The carrying value of the Company’s financial instruments, including cash and cash equivalents, receivables and accounts payable, approximate fair value due to their short-term nature or variable interest rates. See Notes 2, 3, and 4 for the carrying value and fair value of the Company’s investments, derivative instruments, and fixed-rate debt, respectively. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is estimated by applying a fair value hierarchy, which requires maximizing the use of observable inputs when measuring fair value. The three levels of inputs are: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3: Significant unobservable inputs that are not corroborated by market data. The Company’s valuation techniques used to measure the fair value of money market mutual funds are based on quoted market prices, such as quoted net asset values published by the fund as supported in an active market. Valuation methodologies used to measure the fair value of all other non-derivative financial instruments are based on independent external valuation information. The pricing process uses data from a variety of independent external valuation information providers, including trades, bid price or spread, two-sided markets, quotes, benchmark curves including but not limited to treasury benchmarks and Libor and swap curves, discount rates, and market data feeds. All are observable in the market or can be derived principally from or corroborated by observable market data. The Company reports transfers in and out of Levels 1, 2, and 3, as applicable, using the fair value of the individual securities as of the beginning of the reporting period in which the transfer(s) occurred. Current financial liabilities have fair values that approximate their carrying values. Long-term financial liabilities consist of long-term debt, which is recorded on the balance sheet at issuance price and adjusted for any applicable unamortized discounts or premiums. Receivables, Net Receivables consist of the following at the end of 2015 and 2014 : 2015 2014 Vendor receivables $ 729 $ 704 Reinsurance receivables 273 253 Third-party pharmacy receivables 103 87 Other receivables, net 119 104 Receivables, net $ 1,224 $ 1,148 Vendor receivables include volume rebates or other purchase discounts. Balances are generally presented on a gross basis, separate from any related payable due. In certain circumstances, these receivables may be settled against the related payable to that vendor. Reinsurance receivables are held by the Company’s wholly-owned captive insurance subsidiary. The balance primarily represents amounts ceded through reinsurance arrangements and are reflected on a gross basis, separate from the amounts assumed under reinsurance, which are presented on a gross basis within other current liabilities in the consolidated balance sheets. Third-party pharmacy receivables generally relate to amounts due from members’ insurance companies. Other receivables primarily consist of amounts due from governmental entities, mostly tax-related items. Receivables are recorded net of an allowance for doubtful accounts. The allowance is based on historical experience and application of the specific identification method. Write-offs of receivables were immaterial for fiscal years 2015 , 2014 , and 2013 . Merchandise Inventories Merchandise inventories consist of the following at the end of 2015 and 2014 : 2015 2014 United States $ 6,427 $ 5,952 Foreign 2,481 2,504 Merchandise inventories $ 8,908 $ 8,456 Merchandise inventories are valued at the lower of cost or market, as determined primarily by the retail inventory method, and are stated using the last-in, first-out (LIFO) method for substantially all U.S. merchandise inventories. The Company records an adjustment each quarter, if necessary, for the projected annual effect of inflation or deflation, and these estimates are adjusted to actual results determined at year-end, after actual inflation rates and inventory levels for the year have been determined. The Company believes the LIFO method more fairly presents the results of operations by more closely matching current costs with current revenues. Merchandise inventories for all foreign operations are primarily valued by the retail inventory method and are stated using the first-in, first-out (FIFO) method. Due to net deflationary trends, a benefit of $27 was recorded to merchandise costs in both 2015 and 2013 . Due to net inflationary trends in 2014, a charge of $28 was recorded to merchandise costs to increase the cumulative LIFO valuation on merchandise inventories. At the end of 2015 and 2014 , the cumulative impact of the LIFO valuation on merchandise inventories was $ 82 and $ 109 , respectively. The Company provides for estimated inventory losses between physical inventory counts as a percentage of net sales, using estimates based on the Company’s experience. The provision is adjusted periodically to reflect actual physical inventory counts, which generally occur in the second and fourth fiscal quarters. Inventory cost, where appropriate, is reduced by estimates of vendor rebates when earned or as the Company progresses towards earning those rebates, provided that they are probable and reasonably estimable. Property and Equipment Property and equipment are stated at cost. In general, new building additions are classified into components, each with its own estimated useful life, generally five to fifty years for buildings and improvements and three to twenty years for equipment and fixtures. Depreciation and amortization expense is computed using the straight-line method over estimated useful lives or the lease term, if shorter. Leasehold improvements made after the beginning of the initial lease term are depreciated over the shorter of the estimated useful life of the asset or the remaining term of the initial lease plus any renewals that are reasonably assured at the date the leasehold improvements are made. The Company capitalizes certain computer software and software development costs incurred in developing or obtaining computer software for internal use. These costs are included in equipment and fixtures and amortized on a straight-line basis over the estimated useful lives of the software, generally three to seven years. Repair and maintenance costs are expensed when incurred. Expenditures for remodels, refurbishments and improvements that add to or change the way an asset functions or that extend the useful life are capitalized. Assets that were removed during the remodel, refurbishment or improvement are retired. Assets classified as held-for-sale at the end of 2015 and 2014 were immaterial. The Company evaluates long-lived assets for impairment on an annual basis, when relocating or closing a facility, or when events or changes in circumstances may indicate the carrying amount of the asset group, generally an individual warehouse, may not be fully recoverable. For asset groups held and used, including warehouses to be relocated, the carrying value of the asset group is considered recoverable when the estimated future undiscounted cash flows generated from the use and eventual disposition of the asset group exceed the respective carrying value. In the event that the carrying value is not considered recoverable, an impairment loss would be recognized for the asset group to be held and used equal to the excess of the carrying value above the estimated fair value of the asset group. For asset groups classified as held-for-sale (disposal group), the carrying value is compared to the disposal group’s fair value less costs to sell. The Company estimates fair value by obtaining market appraisals from third party brokers or using other valuation techniques. Impairment charges, included in selling, general and administrative expenses in the consolidated statements of income, in 2015 , 2014 , and 2013 were immaterial. Accounts Payable The Company’s banking system provides for the daily replenishment of major bank accounts as checks are presented. Included in accounts payable at the end of 2015 and 2014 are $ 538 and $ 588 , respectively, representing the excess of outstanding checks over cash on deposit at the banks on which the checks were drawn. Insurance/Self-Insurance Liabilities The Company uses a combination of insurance and self-insurance mechanisms, including for certain risks a wholly-owned captive insurance subsidiary and participation in a reinsurance program, to provide for potential liabilities for workers’ compensation, general liability, property damage, directors’ and officers’ liability, vehicle liability, and employee health care benefits. Liabilities associated with the risks that are retained by the Company are not discounted and are estimated, in part, by considering historical claims experience, demographic factors, severity factors, and other actuarial assumptions. The estimated accruals for these liabilities could be significantly affected if future occurrences and claims differ from these assumptions and historical trends. At the end of 2015 and 2014 , these insurance liabilities were $ 993 and $ 815 in the aggregate, respectively, and were included in accrued salaries and benefits and other current liabilities in the consolidated balance sheets, classified based on their nature. The Company’s wholly-owned captive insurance subsidiary (the captive) receives direct premiums, which are netted against the Company’s premium costs in selling, general and administrative expenses, in the consolidated statements of income. The captive participates in a reinsurance program that includes other third-party participants. The reinsurance agreement is one year in duration, and new agreements are entered into by each participant at their discretion at the commencement of the next calendar year. The participant agreements and practices of the reinsurance program limit any participating members’ individual risk. Income statement adjustments related to the reinsurance program and related impacts to the consolidated balance sheets are recognized as information becomes known. In the event the Company leaves the reinsurance program, the Company is not relieved of its primary obligation to the policyholders for activity prior to the termination of the annual agreement. Other Current Liabilities Other current liabilities consist of the following at the end of 2015 and 2014 : 2015 2014 Accrued sales, income, and other taxes $ 491 $ 578 Insurance-related liabilities 396 371 Deferred sales 299 250 Cash card liability 201 173 Returns reserve 124 122 Other 185 169 Other current liabilities $ 1,696 $ 1,663 Derivatives The Company is exposed to foreign-currency exchange-rate fluctuations in the normal course of business. It manages these fluctuations, in part, through the use of forward foreign-exchange contracts, seeking to economically hedge the impact of fluctuations of foreign exchange on known future expenditures denominated in a non-functional foreign-currency. The contracts relate primarily to U.S. dollar merchandise inventory expenditures made by the Company’s international subsidiaries, whose functional currency is not the U.S. dollar. These contracts do not qualify for derivative hedge accounting. The Company seeks to mitigate risk with the use of these contracts and does not intend to engage in speculative transactions. These contracts do not contain any credit-risk-related contingent features. The aggregate notional amounts of open, unsettled forward foreign-exchange contracts were $ 889 and $ 585 at the end of 2015 and 2014 , respectively. While the Company seeks to manage counterparty risk associated with these contracts by limiting transactions to counterparties with which the Company has an established banking relationship, there can be no assurance that this practice is effective. The contracts are limited to less than one year in duration. See Note 3 for information on the fair value of unsettled forward foreign-exchange contracts at the end of 2015 and 2014 . The unrealized gains or losses recognized in interest income and other, net in the accompanying consolidated statements of income relating to the net changes in the fair value of unsettled forward foreign-exchange contracts was a net gain of $12 for 2015 , and immaterial for 2014 and 2013 . The Company is exposed to fluctuations in prices for the energy it consumes, particularly electricity and natural gas, which it seeks to partially mitigate through the use of fixed- and variable-price contracts for certain of its warehouses and other facilities, primarily in the U.S. and Canada. The Company also enters into variable-priced contracts for purchases of fuel for its gas stations. These contracts meet the characteristics of derivative instruments, but generally qualify for the “normal purchases or normal sales” exception under authoritative guidance and thus require no mark-to-market adjustment. Foreign Currency The functional currencies of the Company’s international subsidiaries are the local currency of the country in which the subsidiary is located. Assets and liabilities recorded in foreign currencies are translated at the exchange rate on the balance sheet date. Translation adjustments are recorded in accumulated other comprehensive income (loss). Revenues and expenses of the Company’s consolidated foreign operations are translated at average exchange rates prevailing during the year. The Company recognizes foreign-currency transaction gains and losses related to revaluing or settling monetary assets and liabilities denominated in currencies other than the functional currency in interest income and other, net in the accompanying consolidated statements of income. Generally, this includes the U.S. dollar cash and cash equivalents and the U.S. dollar payables of consolidated subsidiaries to their functional currency. Also included are realized foreign-currency gains or losses from settlements of forward foreign-exchange contracts. These items resulted in net gains of $35 , $25 , and $37 for 2015, 2014, and 2013, respectively. Revenue Recognition The Company generally recognizes sales, which include shipping fees where applicable, net of returns, at the time the member takes possession of merchandise or receives services. When the Company collects payments from customers prior to the transfer of ownership of merchandise or the performance of services, the amounts received are generally recorded as deferred sales, included in other current liabilities in the consolidated balance sheets, until the sale or service is completed. The Company reserves for estimated sales returns based on historical trends in merchandise returns and reduces sales and merchandise costs accordingly. The sales returns reserve is based on an estimate of the net realizable value of merchandise inventories to be returned. Amounts collected from members for sales or value added taxes are recorded on a net basis. The Company evaluates whether it is appropriate to record the gross amount of merchandise sales and related costs or the net amount earned. Generally, when Costco is the primary obligor, is subject to inventory risk, has latitude in establishing prices and selecting suppliers, can influence product or service specifications, or has several but not all of these indicators, revenue is recorded on a gross basis. If the Company is not the primary obligor and does not possess other indicators of gross reporting as noted above, it records the net amounts earned, which is reflected in net sales. The Company records related shipping fees on a gross basis. The Company accounts for membership fee revenue, net of refunds, on a deferred basis, ratably over the one-year membership period. The Company's Executive members qualify for a 2% reward on qualified purchases (up to a maximum reward of approximately $ 750 per year), which can be redeemed only at Costco warehouses. The Company accounts for this reward as a reduction in sales. The sales reduction and corresponding liability (classified as accrued member rewards in the consolidated balance sheets) are computed after giving effect to the estimated impact of non-redemptions based on historical data. The net reduction in sales was $ 1,128 , $ 1,051 , and $ 970 in 2015 , 2014 , and 2013 , respectively. Merchandise Costs Merchandise costs consist of the purchase price of inventory sold, inbound and outbound shipping charges and all costs related to the Company’s depot operations, including freight from depots to selling warehouses, and are reduced by vendor consideration. Merchandise costs also include salaries, benefits, depreciation, and utilities on production equipment in fresh foods and certain ancillary departments. Vendor Consideration The Company has agreements with vendors to receive funds for volume rebates, certain ongoing programs, and other vendor consideration. Volume rebates or other purchase discounts are evidenced by signed agreements that are reflected in the carrying value of the inventory when earned or as the Company progresses towards earning the rebate or discount, and as a component of merchandise costs as the merchandise is sold. Other vendor consideration is generally recorded as a reduction of merchandise costs upon completion of contractual milestones, terms of the related agreement, or by another systematic approach. Selling, General and Administrative Expenses Selling, general and administrative expenses consist primarily of salaries, benefits and workers’ compensation costs for warehouse employees, other than fresh foods departments and certain ancillary businesses, as well as all regional and home office employees, including buying personnel. Selling, general and administrative expenses also include substantially all building and equipment depreciation, bank charges, utilities, and stock-based compensation expense as well as other operating costs incurred to support warehouse operations. Retirement Plans The Company's 401(k) Retirement Plan is available to all U.S. employees who have completed 90 days of employment. The plan allows pre-tax deferrals, a portion of which the Company matches. In addition, the Company provides each eligible participant an annual discretionary contribution. The Company also has a defined contribution plan for Canadian employees and contributes a percentage of each employee's salary. Certain subsidiaries in the Company's Other International operations have defined benefit and defined contribution plans that are not material. Amounts expensed under all plans were $454 , $436 , and $409 for 2015 , 2014 , and 2013 , respectively, and are included in selling, general and administrative expenses and merchandise costs in the accompanying consolidated statements of income. Stock-Based Compensation Restricted stock units (RSUs) granted to employees generally vest over five years and allow for quarterly vesting of the pro-rata number of stock-based awards that would vest on the next anniversary of the grant date in the event of retirement or voluntary termination. The Company does not reduce stock-based compensation for an estimate of forfeitures, which are inconsequential in light of historical experience and considering the awards vest on a quarterly basis. Actual forfeitures are recognized as they occur. Compensation expense for all stock-based awards granted is predominantly recognized using the straight-line method over the requisite service period for the entire award. The terms of the Company’s stock-based awards for employees and non-employee directors provide for accelerated vesting of a portion of outstanding shares based on reaching certain cumulative years of service with the Company. Compensation expense for the accelerated shares is recognized upon achievement of the long service term. The cumulative amount of compensation cost recognized at any point in time equals at least the portion of the grant-date fair value of the award that is vested at that date. The fair value of RSUs is calculated as the market value of the common stock on the measurement date less the present value of the expected dividends forgone during the vesting period. Stock-based compensation expense is predominantly included in selling, general and administrative expenses in the consolidated statements of income. See Note 7 for additional information on the Company’s stock-based compensation plans. Leases The Company leases land and/or buildings at warehouses and certain other office and distribution facilities, primarily under operating leases. Operating leases expire at various dates through 2064 , with the exception of one lease in the Company’s U.K. subsidiary, which expires in 2151 . These leases generally contain one or more of the following options, which the Company can exercise at the end of the initial lease term: (a) renewal of the lease for a defined number of years at the then-fair market rental rate or rate stipulated in the lease agreement; (b) purchase of the property at the then-fair market value; or (c) right of first refusal in the event of a third-party purchase offer. The Company accounts for its lease expense with free rent periods and step-rent provisions on a straight-line basis over the original term of the lease and any extension options that the Company more likely than not expects to exercise, from the date the Company has control of the property. Certain leases provide for periodic rental increases based on price indices, or the greater of minimum guaranteed amounts or sales volume. The Company has capital leases for certain warehouse locations, expiring at various dates through 2040 . Capital lease assets are included in land, buildings, and improvements in the accompanying consolidated balance sheets. Amortization expense on capital lease assets is recorded as depreciation expense and is predominately included in selling, general and administrative expenses. Capital lease liabilities are recorded at the lesser of the estimated fair market value of the leased property or the net present value of the aggregate future minimum lease payments and are included in other current liabilities and deferred income taxes and other liabilities in the accompanying consolidated balance sheets. Interest on these obligations is included in interest expense in the consolidated statements of income. The Company records an asset and related financing obligation for the estimated construction costs under build-to-suit lease arrangements where it is considered the owner for accounting purposes, to the extent the Company is involved in the construction of the building or structural improvements or has construction risk prior to commencement of a lease. Upon occupancy, the Company assesses whether these arrangements qualify for sales recognition under the sale-leaseback accounting guidance. If the Company continues to be the deemed owner, it accounts for the arrangement as a financing lease. The Company’s asset retirement obligations (ARO) are primarily related to leasehold improvements that at the end of a lease must be removed in order to comply with the lease agreement. These obligations are recorded as a liability with an offsetting asset at the inception of the lease term based upon the estimated fair value of the costs to remove the leasehold improvements. These liabilities are accreted over time to the projected future value of the obligation using the Company’s incremental borrowing rate. The ARO assets are depreciated using the same depreciation method as the respective leasehold improvement assets and are included with buildings and improvements. Estimated ARO liabilities associated with these leases amounted to $ 54 and $ 55 at the end of 2015 and 2014 , respectively, and are included in deferred income taxes and other liabilities in the accompanying consolidated balance sheets. Preopening Expenses Preopening expenses related to new warehouses, new regional offices and other startup operations are expensed as incurred. Income Taxes The Company accounts for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributed to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credits and loss carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences and carry-forwards are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established when necessary to reduce deferred tax assets to amounts that are more likely than not expected to be realized. The determination of the Company’s provision for income taxes requires significant judgment, the use of estimates, and the interpretation and application of complex tax laws. Significant judgment is required in assessing the timing and amounts of deductible and taxable items and the probability of sustaining uncertain tax positions. The benefits of uncertain tax positions are recorded in the Company’s consolidated financial statements only after determining a more-likely-than-not probability that the uncertain tax positions will withstand challenge, if any, from tax authorities. Additionally, certain of our cumulative foreign undistributed earnings are considered indefinitely reinvested. These earnings would be subject to U.S. income tax if we changed our position and could result in a U.S. tax liability. When facts and circumstances change, the Company reassesses these probabilities and records any changes in the consolidated financial statements as appropriate. See Note 8 for additional information. Net Income per Common Share Attributable to Costco The computation of basic net income per share uses the weighted average number of shares that were outstanding during the period. The computation of diluted net income per share uses the weighted average number of shares in the basic net income per share calculation plus the number of common shares that would be issued assuming vesting of all potentially dilutive common shares outstanding using the treasury stock method for shares subject to RSUs and the “if converted” method for the convertible note securities. Stock Repurchase Programs Repurchased shares of common stock are retired, in accordance with the Washington Business Corporation Act. The par value of repurchased shares is deducted from common stock and the excess repurchase price over par is deducted by allocation to both additional paid-in capital and retained earnings. The amount allocated to additional paid-in capital is calculated as the current value of additional paid-in capital per share outstanding and is applied to the number of shares repurchased. Any remaining amount is allocated to retained earnings. See Note 6 for additional information. Recent Accounting Pronouncements Not Yet Adopted In April 2014, the Financial Accounting Standards Board (FASB) issued guidance that changed the criteria for reporting discontinued operations, as well as requiring new disclosures regarding discontinued operations and disposals that do not qualify for discontinued operations reporting. This guidance is effective for fiscal years beginning after December 15, 2014, with early adoption permitted for disposals that have not been reported in financial statements previously issued. The Company will adopt this guidance at the beginning of fiscal year 2016. Adoption is not expected to have a material impact on the Company’s consolidated financial statements or disclosures. In May 2014, the FASB issued new guidance on the recognition of revenue from contracts with customers. The guidance converges the requirements for reporting revenue in addition to requiring disclosures sufficient to describe the nature, amount, timing, and uncertainty of revenue and cash flows arising from these contracts. |
Investments
Investments | 12 Months Ended |
Aug. 30, 2015 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Note 2—Investments The Company’s investments at the end of 2015 and 2014 were as follows: 2015: Cost Basis Unrealized Gains, Net Recorded Basis Available-for-sale: Government and agency securities $ 1,394 $ 4 $ 1,398 Asset and mortgage-backed securities 5 0 5 Total available-for-sale 1,399 4 1,403 Held-to-maturity: Certificates of deposit 215 215 Total short-term investments $ 1,614 $ 4 $ 1,618 2014: Cost Basis Unrealized Gains, Net Recorded Basis Available-for-sale: Government and agency securities $ 1,404 $ 1 $ 1,405 Asset and mortgage-backed securities 4 0 4 Total available-for-sale 1,408 1 1,409 Held-to-maturity: Certificates of deposit 155 155 Bankers' acceptances 13 13 Total held-to-maturity 168 168 Total short-term investments $ 1,576 $ 1 $ 1,577 Gross unrealized gains and losses on available-for-sale securities were not material in 2015 , 2014 , and 2013 . At the end of 2015 and 2014 , the Company's available-for-sale securities that were in a continuous unrealized-loss position were not material, and at the end of 2013 , the Company had none. There were no gross unrealized gains and losses on cash equivalents at the end of 2015 , 2014 , or 2013 . The proceeds from sales of available-for-sale securities were $246 , $116 , and $244 during 2015 , 2014 , and 2013 , respectively. Gross realized gains or losses from sales of available-for-sale securities were not material in 2015 , 2014 , and 2013 . The maturities of available-for-sale and held-to-maturity securities at the end of 2015 , were as follows: Available-For-Sale Held-To-Maturity Cost Basis Fair Value Due in one year or less $ 300 $ 301 $ 215 Due after one year through five years 1,061 1,064 0 Due after five years 38 38 0 Total $ 1,399 $ 1,403 $ 215 |
Fair Value Measurement
Fair Value Measurement | 12 Months Ended |
Aug. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | Note 3—Fair Value Measurement Assets and Liabilities Measured at Fair Value on a Recurring Basis The tables below present information at the end of 2015 and 2014 , respectively, regarding the Company’s financial assets and financial liabilities that are measured at fair value on a recurring basis and indicate the level within the fair value hierarchy reflecting the valuation techniques utilized to determine such fair value. 2015: Level 1 Level 2 Money market mutual funds (1) $ 306 $ 0 Investment in government and agency securities 0 1,398 Investment in asset and mortgage-backed securities 0 5 Forward foreign-exchange contracts, in asset position (2) 0 16 Forward foreign-exchange contracts, in (liability) position (2) 0 (4 ) Total $ 306 $ 1,415 2014: Level 1 Level 2 Money market mutual funds (1) $ 312 $ 0 Investment in government and agency securities 0 1,405 Investment in asset and mortgage-backed securities 0 4 Forward foreign-exchange contracts, in asset position (2) 0 3 Forward foreign-exchange contracts, in (liability) position (2) 0 (3 ) Total $ 312 $ 1,409 _______________ (1) Included in cash and cash equivalents in the accompanying consolidated balance sheets. (2) The asset and the liability values are included in deferred income taxes and other current assets and other current liabilities, respectively, in the accompanying consolidated balance sheets. See Note 1 for additional information on derivative instruments. During and at the end of both 2015 and 2014 , the Company did not hold any Level 3 financial assets and liabilities that were measured at fair value on a recurring basis. There were no transfers in or out of Level 1, 2, or 3 during 2015 and 2014 . Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis Financial assets measured at fair value on a nonrecurring basis include held-to-maturity investments that are carried at amortized cost and are not remeasured to fair value on a recurring basis. There were no fair value adjustments to these financial assets during 2015 and 2014 . See Note 4 for discussion on the fair value of long-term debt. Nonfinancial assets measured at fair value on a nonrecurring basis include items such as long-lived assets that are measured at fair value resulting from an impairment, if deemed necessary. Fair value adjustments to nonfinancial assets during 2015 and 2014 were immaterial. |
Debt
Debt | 12 Months Ended |
Aug. 30, 2015 | |
Debt Disclosure [Abstract] | |
Debt | Note 4—Debt Short-Term Borrowings The Company enters into various short-term bank credit facilities, totaling $407 and $451 in 2015 and 2014 , respectively. At the end of 2015 and 2014 , there were no outstanding borrowings under these credit facilities. In 2015 , the maximum and average amounts outstanding during the fiscal year under all short-term borrowing arrangements were immaterial. In 2014 , maximum and average amounts outstanding for Japan bank borrowings were $93 and $67 , respectively, and had a weighted average interest rate of 0.55% during the fiscal year. The maximum and average amounts outstanding for the U.K. bank overdraft facility during 2014 were $18 and $7 , respectively, and had a weighted average interest rate of 1.54% during the fiscal year. Long-Term Debt On February 17, 2015, the Company issued $1,000 in aggregate principal amount of Senior Notes (February 2015 Notes), as follows: $500 of 1.75% Senior Notes due February 15, 2020 ; and $500 of 2.25% Senior Notes due February 15, 2022 . Interest is due semi-annually on February 15 and August 15; the first payment was made on August 15, 2015 . The Company, at its option, may redeem the February 2015 Notes at any time, in whole or in part, at the redemption price plus accrued and unpaid interest to the date of redemption. The redemption price is equal to the greater of 100% of the principal amount of the notes to be redeemed or the sum of the present value of the remaining scheduled payments of principal and interest to maturity. The Company will be required to offer to purchase the February 2015 Notes, at a price of 101% of the principal amount plus accrued and unpaid interest to the date of repurchase, upon certain events as defined by the terms of the February 2015 Notes. The discount and issuance costs associated with the February 2015 Notes are being amortized to interest expense over the term of the notes, which are valued using Level 2 inputs. In December 2012, the Company issued $3,500 in aggregate principal amount of Senior Notes (December 2012 Notes) as follows: $1,200 of 0.65% Senior Notes due December 7, 2015 ; $1,100 of 1.125% Senior Notes due December 15, 2017 ; and $1,200 of 1.7% Senior Notes due December 15, 2019 . Interest is payable semi-annually . The Company, at its option, may redeem the December 2012 Notes at any time, in whole or in part, at a redemption price plus accrued interest. The redemption price is equal to the greater of 100% of the principal amount of the December 2012 Notes to be redeemed or the sum of the present value of the remaining scheduled payments of principal and interest to maturity. Additionally, the Company will be required to make an offer to purchase the December 2012 Notes at a price of 101% of the principal amount plus accrued and unpaid interest to the date of repurchase, upon certain events as defined by the terms of the December 2012 Notes. The discount and issuance costs associated with the December 2012 Notes are being amortized to interest expense over the terms of the notes. The December 2012 Notes are valued using Level 2 inputs. In February 2007, the Company issued $1,100 of 5.5% Senior Notes due March 15, 2017 (2007 Senior Note). Interest is payable semi-annually . The Company, at its option, may redeem the 2007 Senior Note at any time, in whole or in part, at a redemption price plus accrued interest. The redemption price is equal to the greater of 100% of the principal amount of the 2007 Senior Note to be redeemed or the sum of the present value of the remaining scheduled payments of principal and interest to maturity. Additionally, the Company will be required to make an offer to purchase the 2007 Senior Note at a price of 101% of the principal amount plus accrued and unpaid interest to the date of repurchase, upon certain events as defined by the terms of the 2007 Senior Note. The discount and issuance costs associated with the 2007 Senior Note are being amortized to interest expense over the term of the note. This note is valued using Level 2 inputs. Other long-term debt consisted primarily of promissory notes and term loans issued by the Company's Japanese subsidiary. These notes and term loans are valued primarily using Level 3 inputs. In May 2015, the Company's Japanese subsidiary issued approximately $125 of 0.79% promissory notes through a private placement, which are included in other long-term debt in the table below. Interest is payable semi-annually , and principal is due in May 2025 . These notes are valued using Level 3 inputs. The estimated fair value of the Company's debt was based primarily on reported market values, recently completed market transactions, and estimates based upon interest rates, maturities, and credit. The carrying value and estimated fair value at the end of 2015 and 2014 consisted of the following: 2015 2014 Carrying Value Fair Value Carrying Value Fair Value 0.65% Senior Notes due December 2015 $ 1,200 $ 1,201 $ 1,199 $ 1,203 5.5% Senior Notes due March 2017 1,099 1,171 1,099 1,223 1.125% Senior Notes due December 2017 1,100 1,097 1,100 1,095 1.7% Senior Notes due December 2019 1,198 1,186 1,198 1,186 1.75% Senior Notes due February 2020 500 494 0 0 2.25% Senior Notes due February 2022 499 484 0 0 Other long-term debt 551 555 497 510 Total long-term debt 6,147 6,188 5,093 5,217 Less current portion 1,283 1,284 0 0 Long-term debt, excluding current portion $ 4,864 $ 4,904 $ 5,093 $ 5,217 Maturities of long-term debt during the next five fiscal years and thereafter are as follows: 2016 $ 1,283 2017 1,100 2018 1,178 2019 83 2020 1,698 Thereafter 805 Total $ 6,147 |
Leases
Leases | 12 Months Ended |
Aug. 30, 2015 | |
Leases [Abstract] | |
Leases | Note 5—Leases Operating Leases The aggregate rental expense for 2015 , 2014 , and 2013 was $ 252 , $ 230 , and $ 225 , respectively. Sub-lease income, included in interest income and other, net in the accompanying consolidated statements of income, and contingent rents were not material in 2015, 2014, and 2013, respectively. Capital and Build-to-Suit Leases Gross assets recorded under capital and build-to-suit leases were $ 300 and $ 200 at the end of 2015 and 2014 , respectively. These assets are recorded net of accumulated amortization of $ 42 and $ 35 at the end of 2015 and 2014 , respectively. At the end of 2015 , future minimum payments, net of sub-lease income of $ 131 for all years combined, under non-cancelable operating leases with terms of at least one year and capital leases were as follows: Operating Leases Capital Leases (3) 2016 $ 187 $ 24 2017 183 24 2018 176 24 2019 166 23 2020 155 24 Thereafter 2,097 452 Total $ 2,964 571 Less amount representing interest (275 ) Net present value of minimum lease payments 296 Less current installments (1) (10 ) Long-term capital lease obligations less current installments (2) $ 286 _______________ (1) Included in other current liabilities in the accompanying consolidated balance sheets. (2) Included in deferred income taxes and other liabilities in the accompanying consolidated balance sheets. (3) Includes build-to-suit lease obligations. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Aug. 30, 2015 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Note 6—Stockholders’ Equity Dividends The Company’s current quarterly dividend rate is $0.40 per share. In February 2015, the Company paid a special cash dividend of $5.00 per share, totaling approximately $2,201 . Stock Repurchase Programs The Company’s stock repurchase program is conducted under a $4,000 authorization by the Board of Directors approved on April 17, 2015 , which expires April 17, 2019 . This authorization revoked previously authorized but unused amounts, totaling $2,528 . As of the end of 2015, the total amount repurchased on the new authorization was $301 . The following table summarizes the Company’s stock repurchase activity: Shares Repurchased (000’s) Average Price per Share Total Cost 2015 3,456 $ 142.87 $ 494 2014 2,915 114.45 334 2013 357 96.41 34 These amounts may differ from the stock repurchase balances in the accompanying consolidated statements of cash flows due to changes in unsettled stock repurchases at the end of each fiscal year. |
Stock-Based Compensation Plans
Stock-Based Compensation Plans | 12 Months Ended |
Aug. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation Plans | Note 7—Stock-Based Compensation Plans The Company grants stock-based compensation to employees and non-employee directors. Stock option awards were granted until the fourth quarter of fiscal 2006, when the Company began awarding RSUs. Beginning in 2009, RSU grants to all executive officers have been performance-based. Through a series of shareholder approvals, there have been amended and restated plans and new provisions implemented by the Company. RSUs held by employees and non-employee directors are subject to quarterly vesting upon certain terminations of employment or service. Employees who attain certain years of service with the Company receive shares under accelerated vesting provisions on the annual vesting date rather than upon retirement. The Seventh Restated 2002 Stock Incentive Plan (Seventh Plan), amended in the second quarter of fiscal 2015, is the Company’s only stock-based compensation plan with shares available for grant at the end of 2015 . Each share issued in respect of stock awards is counted as 1.75 shares toward the limit of shares made available under the Seventh Plan. The Seventh Plan authorized the issuance of 23,500,000 shares ( 13,429,000 RSUs) of common stock for future grants in addition to the shares authorized under the previous plan. The Company issues new shares of common stock upon exercise of stock options and upon vesting of RSUs. Shares for vested RSUs are generally delivered to participants annually, net of shares equal to the minimum statutory withholding taxes. As required by the Company's Seventh Plan, in conjunction with the special cash dividend discussed in Note 6, adjustments were made to awards outstanding on the dividend record date to preserve their value following the dividend, as follows: (i) the number of shares subject to outstanding RSUs was increased; and (ii) the exercise prices of outstanding stock options were reduced and the number of shares subject to such options was increased. Approximately 410,000 stock options were adjusted, and approximately 8,956,000 RSUs were adjusted. These adjustments did not result in additional stock-based compensation expense, as the fair value of the outstanding awards did not change. As further required by the Seventh Plan, the maximum number of shares issuable under the Seventh Plan was proportionally adjusted, which resulted in an additional 750,000 RSU shares available to be granted. Summary of Restricted Stock Unit Activity RSUs granted to employees and to non-employee directors generally vest over five years and three years, respectively. Additionally, the terms of the RSUs, including performance-based awards, provide for accelerated vesting for employees and non-employee directors who have attained 25 or more years and five or more years of service with the Company, respectively, and provide for vesting upon certain terminations of employment or service. Recipients are not entitled to vote or receive dividends on non-vested and undelivered shares. At the end of 2015 , 18,308,000 shares were available to be granted as RSUs under the Seventh Plan. The following awards were outstanding at the end of 2015 : • 8,698,000 time-based RSUs that vest upon continued employment over specified periods of time; • 535,000 performance-based RSUs, of which 281,000 were granted to executive officers subject to the certification of the attainment of specified performance targets for 2015 . This certification occurred in September 2015, at which time a portion vested as a result of the long service of all executive officers. The awards vest upon continued employment over specified periods of time. The following table summarizes RSU transactions during 2015 : Number of Units (in 000’s) Weighted-Average Grant Date Fair Value Outstanding at the end of 2014 9,117 $ 86.92 Granted 4,017 125.68 Vested and delivered (4,103 ) 87.33 Forfeited (174 ) 102.09 Special cash dividend 376 N/A Outstanding at the end of 2015 9,233 $ 99.72 The weighted-average grant date fair value of RSUs granted during 2015 , 2014 , and 2013 was $125.68 , $113.64 , and $90.99 , respectively. The remaining unrecognized compensation cost related to non-vested RSUs at the end of 2015 was $ 640 and the weighted-average period of time over which this cost will be recognized is 1.7 years. Included in the outstanding balance at the end of 2015 were approximately 2,811,000 RSUs vested but not yet delivered. Summary of Stock-Based Compensation The following table summarizes stock-based compensation expense and the related tax benefits under the Company’s plans: 2015 2014 2013 Stock-based compensation expense before income taxes $ 394 $ 327 $ 285 Less recognized income tax benefit (131 ) (109 ) (94 ) Stock-based compensation expense, net of income taxes $ 263 $ 218 $ 191 |
Income Taxes
Income Taxes | 12 Months Ended |
Aug. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 8—Income Taxes Income before income taxes is comprised of the following: 2015 2014 2013 Domestic (including Puerto Rico) $ 2,574 $ 2,145 $ 2,070 Foreign 1,030 1,052 981 Total $ 3,604 $ 3,197 $ 3,051 The provisions for income taxes for 2015 , 2014 , and 2013 are as follows: 2015 2014 2013 Federal: Current $ 766 $ 696 $ 572 Deferred (12 ) (105 ) 16 Total federal 754 591 588 State: Current 131 107 109 Deferred 1 (3 ) 4 Total state 132 104 113 Foreign: Current 399 369 302 Deferred (90 ) 45 (13 ) Total foreign 309 414 289 Total provision for income taxes $ 1,195 $ 1,109 $ 990 Tax benefits associated with the exercise of employee stock programs were allocated to equity attributable to Costco in the amount of $ 86 , $ 84 , and $ 59 , in 2015 , 2014 , and 2013 , respectively. The reconciliation between the statutory tax rate and the effective rate for 2015 , 2014 , and 2013 is as follows: 2015 2014 2013 Federal taxes at statutory rate $ 1,262 35.0 % $ 1,119 35.0 % $ 1,068 35.0 % State taxes, net 85 2.3 66 2.1 66 2.1 Foreign taxes, net (125 ) (3.5 ) (85 ) (2.7 ) (87 ) (2.8 ) Employee stock ownership plan (ESOP) (66 ) (1.8 ) (11 ) (0.3 ) (65 ) (2.1 ) Other 39 1.2 20 0.6 8 0.2 Total $ 1,195 33.2 % $ 1,109 34.7 % $ 990 32.4 % The Company’s provision for income taxes for 2015 and 2013 was favorably impacted by a $57 and $62 tax benefit in connection with the special cash dividend of $5.00 and $7.00 per share, respectively. These dividends were paid by the Company to employees, who through the Company's 401(k) Retirement Plan owned 29,000,000 and 22,600,000 shares of Company stock through an ESOP in 2015 and 2013, respectively. Dividends paid on these shares are deductible for U.S. income tax purposes. There was no similar special cash dividend in 2014. The components of the deferred tax assets (liabilities) are as follows: 2015 2014 Equity compensation $ 90 $ 85 Deferred income/membership fees 90 98 Accrued liabilities and reserves 641 607 Other 107 19 Property and equipment (560 ) (529 ) Merchandise inventories (200 ) (193 ) Net deferred tax assets $ 168 $ 87 The deferred tax accounts at the end of 2015 and 2014 include current deferred income tax assets of $521 and $448 respectively, included in deferred income taxes and other current assets; non-current deferred income tax assets of $109 and $68 , respectively, included in other assets; and non-current deferred income tax liabilities of $462 and $429 , respectively, included in deferred income taxes and other liabilities. Included in non-current deferred tax assets for 2015 are $33 of foreign tax credits which expire in 2025. The Company has not provided for U.S. deferred taxes on cumulative undistributed earnings of certain non-U.S. consolidated subsidiaries because its subsidiaries have invested or will invest the undistributed earnings indefinitely, or the earnings if repatriated would not result in a deferred tax liability. This includes the remaining undistributed earnings of the Canadian operations that the Company maintains are indefinitely reinvested, or could be repatriated without resulting in a deferred tax liability. Deferred taxes are recorded for earnings of foreign operations when it is determined that such earnings are no longer indefinitely reinvested. During 2015, the Company repatriated a portion of the earnings in the Canadian operations that, in 2014, the Company determined were no longer considered indefinitely reinvested. In the fourth quarter of 2015, the Company changed its position regarding an additional portion of the undistributed earnings of the Canadian operations, which are no longer considered indefinitely reinvested. Current exchange rates compared to historical rates when these earnings were generated resulted in an immaterial U.S. benefit, which was recorded at the end of 2015. The Company has not provided for U.S. deferred taxes on cumulative undistributed earnings of $2,845 and $3,619 at the end of 2015 and 2014 , respectively, of certain non-U.S. consolidated subsidiaries as such earnings are deemed by the Company to be indefinitely reinvested or the earnings if repatriated would not result in a deferred tax liability. Because of the availability of U.S. foreign tax credits and complexity of the computation, it is not practicable to determine the U.S. federal income tax liability that would be associated with such earnings if such earnings were not deemed to be indefinitely reinvested. The Company believes that its U.S. current and projected asset position is sufficient to meet its U.S. liquidity requirements and has no current plans to repatriate for use in the U.S. the cash and cash equivalents and short-term investments held by these non-U.S. subsidiaries whose earnings are considered indefinitely reinvested. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits for 2015 and 2014 is as follows: 2015 2014 Gross unrecognized tax benefit at beginning of year $ 75 $ 80 Gross increases—current year tax positions 26 9 Gross increases—tax positions in prior years 63 10 Gross decreases—tax positions in prior years (1 ) (11 ) Settlements (3 ) (11 ) Lapse of statute of limitations (2 ) (2 ) Gross unrecognized tax benefit at end of year $ 158 $ 75 Included in the balance at the end of 2015 and 2014 , are $50 and $38 , respectively, of tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. Because of the impact of deferred tax accounting, other than interest and penalties, the disallowance of these tax positions would not affect the annual effective tax rate but would accelerate the payment of cash to the taxing authority to an earlier period. The Company has recorded an offsetting long-term asset of $48 for amounts included in the balance at the end of 2015. Offsetting long-term assets were not material at the end of 2014. The total amount of such unrecognized tax benefits that, if recognized, would favorably affect the effective income tax rate in future periods is $98 and $47 at the end of 2015 and 2014 , respectively. Accrued interest and penalties related to income tax matters are classified as a component of income tax expense. Interest and penalties recognized by the Company were not material in 2015 and 2014 . Accrued interest and penalties were not material at the end of 2015 and 2014 . The Company is currently under audit by several taxing jurisdictions in the United States and in several foreign countries. Some audits may conclude in the next 12 months and the unrecognized tax benefits we have recorded in relation to the audits may differ from actual settlement amounts. It is not practical to estimate the effect, if any, of any amount of such change during the next 12 months to previously recorded uncertain tax positions in connection with the audits. The Company does not anticipate that there will be a material increase or decrease in the total amount of unrecognized tax benefits in the next 12 months. The Company files income tax returns in the United States, various state and local jurisdictions, in Canada and in several other foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state or local examination for years before fiscal 2007. The Company is currently subject to examination in Canada for fiscal years 2011 to present and in California for fiscal years 2007 to present. No other examinations are believed to be material. |
Net Income per Common and Commo
Net Income per Common and Common Equivalent Share | 12 Months Ended |
Aug. 30, 2015 | |
Earnings Per Share [Abstract] | |
Net Income Per Common and Common Equivalent Share | Note 9—Net Income per Common and Common Equivalent Share The following table shows the amounts used in computing net income per share and the effect on net income and the weighted average number of shares of potentially dilutive common shares outstanding (shares in 000’s): 2015 2014 2013 Net income available to common stockholders after assumed conversions of dilutive securities $ 2,377 $ 2,058 $ 2,039 Weighted average number of common shares used in basic net income per common share 439,455 438,693 435,741 RSUs 3,249 3,771 4,552 Conversion of convertible notes 12 21 219 Weighted average number of common shares and dilutive potential of common stock used in diluted net income per share 442,716 442,485 440,512 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Aug. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 10—Commitments and Contingencies Legal Proceedings The Company is involved in a number of claims, proceedings and litigation arising from its business and property ownership. In accordance with applicable accounting guidance, the Company establishes an accrual for legal proceedings if and when those matters reach a stage where they present loss contingencies that are both probable and reasonably estimable. There may be exposure to loss in excess of any amounts accrued. The Company monitors those matters for developments that would affect the likelihood of a loss (taking into account where applicable indemnification arrangements concerning suppliers and insurers) and the accrued amount, if any, thereof, and adjusts the amount as appropriate. As of the date of this report, the Company has not recorded an accrual with respect to any matter described below. If the loss contingency at issue is not both probable and reasonably estimable, the Company does not establish an accrual, but will continue to monitor the matter for developments that will make the loss contingency both probable and reasonably estimable. In each case, there is a reasonable possibility that a loss may be incurred, including a loss in excess of the applicable accrual. For matters where no accrual has been recorded, the possible loss or range of loss (including any loss in excess of the accrual) cannot in our view be reasonably estimated because, among other things: (i) the remedies or penalties sought are indeterminate or unspecified; (ii) the legal and/or factual theories are not well developed; and/or (iii) the matters involve complex or novel legal theories or a large number of parties. The Company is a defendant in the following matters, among others: Numerous putative class actions have been brought around the United States against motor fuel retailers, including the Company, alleging that they have been overcharging consumers by selling gasoline or diesel that is warmer than 60 degrees without adjusting the volume sold to compensate for heat-related expansion or disclosing the effect of such expansion on the energy equivalent received by the consumer. The Company is named in the following actions: Raphael Sagalyn, et al., v. Chevron USA, Inc., et al., Case No. 07-430 (D. Md.); Phyllis Lerner, et al., v. Costco Wholesale Corporation, et al., Case No. 07-1216 (C.D. Cal.); Linda A. Williams, et al., v. BP Corporation North America, Inc., et al., Case No. 07-179 (M.D. Ala.); James Graham, et al. v. Chevron USA, Inc., et al., Civil Action No. 07-193 (E.D. Va.); Betty A. Delgado, et al., v. Allsups, Convenience Stores, Inc., et al., Case No. 07-202 (D.N.M.); Gary Kohut, et al. v. Chevron USA, Inc., et al., Case No. 07-285 (D. Nev.); Mark Rushing, et al., v. Alon USA, Inc., et al., Case No. 06-7621 (N.D. Cal.); James Vanderbilt, et al., v. BP Corporation North America, Inc., et al., Case No. 06-1052 (W.D. Mo.); Zachary Wilson, et al., v. Ampride, Inc., et al., Case No. 06-2582 (D.Kan.); Diane Foster, et al., v. BP North America Petroleum, Inc., et al., Case No. 07-02059 (W.D. Tenn.); Mara Redstone, et al., v. Chevron USA, Inc., et al., Case No. 07-20751 (S.D. Fla.); Fred Aguirre, et al. v. BP West Coast Products LLC, et al., Case No. 07-1534 (N.D. Cal.); J.C. Wash, et al., v. Chevron USA, Inc., et al.; Case No. 4:07cv37 (E.D. Mo.); Jonathan Charles Conlin, et al., v. Chevron USA, Inc., et al.; Case No. 07 0317 (M.D. Tenn.); William Barker, et al. v. Chevron USA, Inc., et al.; Case No. 07-cv-00293 (D.N.M.); Melissa J. Couch, et al. v. BP Products North America, Inc., et al., Case No. 07cv291 (E.D. Tex.); S. Garrett Cook, Jr., et al., v. Hess Corporation, et al., Case No. 07cv750 (M.D. Ala.); Jeff Jenkins, et al. v. Amoco Oil Company, et al., Case No. 07-cv-00661 (D. Utah); and Mark Wyatt, et al., v. B. P. America Corp., et al., Case No. 07-1754 (S.D. Cal.). On June 18, 2007, the Judicial Panel on Multidistrict Litigation assigned the action, entitled In re Motor Fuel Temperature Sales Practices Litigation, MDL Docket No 1840, to Judge Kathryn Vratil in the United States District Court for the District of Kansas. On April 12, 2009, the Company agreed to settle the actions in which it is named as a defendant. Under the settlement, which was subject to final approval by the court, the Company agreed, to the extent allowed by law and subject to other terms and conditions in the agreement, to install over five years from the effective date of the settlement temperature-correcting dispensers in the States of Alabama, Arizona, California, Florida, Georgia, Kentucky, Nevada, New Mexico, North Carolina, South Carolina, Tennessee, Texas, Utah, and Virginia. Other than payments to class representatives, the settlement does not provide for cash payments to class members. On September 22, 2011, the court preliminarily approved a revised settlement, which did not materially alter the terms. On April 24, 2012, the court granted final approval of the revised settlement. A class member who objected has filed a notice of appeal from the order approving the settlement. Plaintiffs have moved for an award of $10 in attorneys’ fees, as well as an award of costs and payments to class representatives. The Company has opposed the motion. On March 20, 2014, the Company filed a notice invoking a “most favored nation” provision under the settlement, under which it seeks to adopt provisions in later settlements with certain other defendants, an invocation that class counsel opposed. The motion was denied on January 23, 2015. Final judgment was entered on September 22, 2015, and the Company intends to appeal. The Company has received notices from most states stating that they have appointed an agent to conduct an examination of the books and records of the Company to determine whether it has complied with state unclaimed property laws. In addition to seeking the turnover of unclaimed property subject to escheat laws, the states may seek interest, penalties, costs of examinations, and other relief. Certain states have separately also made requests for payment by the Company concerning a specific type of property, some of which have been paid in immaterial amounts. The Company has received from the Drug Enforcement Administration subpoenas and administrative inspection warrants concerning the Company's fulfillment of prescriptions related to controlled substances and related practices. Offices of the United States Attorney in various districts have communicated to the Company their belief that the Company has committed civil regulatory violations concerning these subjects. The Company is seeking to cooperate with these processes. The Company does not believe that any pending claim, proceeding or litigation, either alone or in the aggregate, will have a material adverse effect on the Company’s financial position; however, it is possible that an unfavorable outcome of some or all of the matters, however unlikely, could result in a charge that might be material to the results of an individual fiscal quarter. |
Segment Reporting
Segment Reporting | 12 Months Ended |
Aug. 30, 2015 | |
Segment Reporting [Abstract] | |
Segment Reporting | Note 11—Segment Reporting The Company and its subsidiaries are principally engaged in the operation of membership warehouses in the U.S., Canada, Mexico, U.K., Japan, Australia, and Spain and through majority-owned subsidiaries in Taiwan and Korea. The Company’s reportable segments are largely based on management’s organization of the operating segments for operational decisions and assessments of financial performance, which considers geographic locations. The material accounting policies of the segments are the same as described in Note 1. All material inter-segment net sales and expenses have been eliminated in computing total revenue and operating income. Certain operating expenses, predominantly stock-based compensation, are incurred on behalf of the Company's Canadian and Other International operations, but are included in the U.S. operations because those costs are not allocated internally and generally come under the responsibility of the Company's U.S. management team. United States Operations Canadian Operations Other International Operations Total 2015 Total revenue $ 84,351 $ 17,341 $ 14,507 $ 116,199 Operating income 2,308 771 545 3,624 Depreciation and amortization 848 119 160 1,127 Additions to property and equipment 1,574 148 671 2,393 Net property and equipment 10,815 1,381 3,205 15,401 Total assets 23,397 3,608 6,435 33,440 2014 Total revenue $ 80,477 $ 17,943 $ 14,220 $ 112,640 Operating income 1,880 796 544 3,220 Depreciation and amortization 755 124 150 1,029 Additions to property and equipment 1,245 204 544 1,993 Net property and equipment 10,132 1,662 3,036 14,830 Total assets 21,929 4,892 6,203 33,024 2013 Total revenue $ 75,493 $ 17,179 $ 12,484 $ 105,156 Operating income 1,810 756 487 3,053 Depreciation and amortization 696 123 127 946 Additions to property and equipment 1,090 186 807 2,083 Net property and equipment 9,652 1,621 2,608 13,881 Total assets 20,608 4,529 5,146 30,283 The following table summarizes the percentage of net sales by major item category: 2015 2014 2013 Foods 22 % 22 % 21 % Sundries 21 % 21 % 22 % Hardlines 16 % 16 % 16 % Fresh Foods 14 % 13 % 13 % Softlines 11 % 11 % 11 % Ancillary and Other 16 % 17 % 17 % |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
Aug. 30, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data (Unaudited) | Note 12—Quarterly Financial Data (Unaudited) The two tables that follow reflect the unaudited quarterly results of operations for 2015 and 2014 . 52 Weeks Ended August 30, 2015 First Quarter (12 Weeks) Second Quarter (12 Weeks) Third Quarter (12 Weeks) Fourth Quarter (16 Weeks) Total (52 Weeks) REVENUE Net sales $ 26,284 $ 26,872 $ 25,517 $ 34,993 $ 113,666 Membership fees 582 582 584 785 2,533 Total revenue 26,866 27,454 26,101 35,778 116,199 OPERATING EXPENSES Merchandise costs 23,385 23,897 22,687 31,096 101,065 Selling, general and administrative 2,696 2,671 2,579 3,499 11,445 Preopening expenses 15 9 14 27 65 Operating income 770 877 821 1,156 3,624 OTHER INCOME (EXPENSE) Interest expense (26 ) (27 ) (31 ) (40 ) (124 ) Interest income and other, net 35 20 9 40 104 INCOME BEFORE INCOME TAXES 779 870 799 1,156 3,604 Provision for income taxes 274 263 (1) 280 378 1,195 Net income including noncontrolling interests 505 607 519 778 2,409 Net income attributable to noncontrolling interests (9 ) (9 ) (3 ) (11 ) (32 ) NET INCOME ATTRIBUTABLE TO COSTCO $ 496 $ 598 $ 516 $ 767 $ 2,377 NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO: Basic $ 1.13 $ 1.36 $ 1.17 $ 1.75 $ 5.41 Diluted $ 1.12 $ 1.35 $ 1.17 $ 1.73 $ 5.37 Shares used in calculation (000’s) Basic 438,760 440,384 440,070 438,835 439,455 Diluted 442,210 442,896 443,132 442,404 442,716 CASH DIVIDENDS DECLARED PER COMMON SHARE $ 0.355 $ 5.355 (2) $ 0.40 $ 0.40 $ 6.51 _______________ (1) Includes a $57 tax benefit recorded in the second quarter in connection with the special cash dividend paid to employees through the Company's 401(k) Retirement Plan. (2) Includes the special cash dividend of $5.00 per share paid in February 2015. 52 Weeks Ended August 31, 2014 First Quarter (12 Weeks) Second Quarter (12 Weeks) Third Quarter (12 Weeks) Fourth Quarter (16 Weeks) Total REVENUE Net sales $ 24,468 $ 25,756 $ 25,233 $ 34,755 $ 110,212 Membership fees 549 550 561 768 2,428 Total revenue 25,017 26,306 25,794 35,523 112,640 OPERATING EXPENSES Merchandise costs 21,824 23,043 22,554 31,037 98,458 Selling, general and administrative 2,501 2,531 2,487 3,380 10,899 Preopening expenses 24 8 16 15 63 Operating income 668 724 737 1,091 3,220 OTHER INCOME (EXPENSE) Interest expense (27 ) (26 ) (25 ) (35 ) (113 ) Interest income and other, net 18 30 12 30 90 INCOME BEFORE INCOME TAXES 659 728 724 1,086 3,197 Provision for income taxes 228 255 245 381 1,109 Net income including noncontrolling interests 431 473 479 705 2,088 Net income attributable to noncontrolling interests (6 ) (10 ) (6 ) (8 ) (30 ) NET INCOME ATTRIBUTABLE TO COSTCO $ 425 $ 463 $ 473 $ 697 $ 2,058 NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO: Basic $ 0.97 $ 1.05 $ 1.08 $ 1.59 $ 4.69 Diluted $ 0.96 $ 1.05 $ 1.07 $ 1.58 $ 4.65 Shares used in calculation (000’s) Basic 437,970 439,776 439,446 437,875 438,693 Diluted 442,420 442,829 442,720 441,887 442,485 CASH DIVIDENDS DECLARED PER COMMON SHARE $ 0.31 $ 0.31 $ 0.355 $ 0.355 $ 1.33 |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Aug. 30, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated financial statements include the accounts of Costco Wholesale Corporation, its wholly-owned subsidiaries, and subsidiaries in which it has a controlling interest. The Company reports noncontrolling interests in consolidated entities as a component of equity separate from the Company’s equity. All material inter-company transactions between and among the Company and its consolidated subsidiaries have been eliminated in consolidation. The Company’s net income excludes income attributable to noncontrolling interests in its operations in Taiwan and Korea. Unless otherwise noted, references to net income relate to net income attributable to Costco. |
Fiscal Year End | Fiscal Year End The Company operates on a 52/53 week fiscal year basis with the fiscal year ending on the Sunday closest to August 31. References to 2015 , 2014 , and 2013 relate to the 52 -week fiscal years ended August 30, 2015 , August 31, 2014 , and September 1, 2013 , respectively. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles (U.S. GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and assumptions. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers as cash and cash equivalents all cash on deposit, highly liquid investments with a maturity of three months or less at the date of purchase, and proceeds due from credit and debit card transactions with settlement terms of up to one week. Credit and debit card receivables were $ 1,243 and $ 1,383 at the end of 2015 and 2014 , respectively. |
Short-Term Investments | Short-Term Investments In general, short-term investments have a maturity at the date of purchase of three months to five years. Investments with maturities beyond five years may be classified, based on the Company’s determination, as short-term based on their highly liquid nature and because they represent the investment of cash that is available for current operations. Short-term investments classified as available-for-sale are recorded at fair value using the specific identification method with the unrealized gains and losses reflected in accumulated other comprehensive income (loss) until realized. Realized gains and losses from the sale of available-for-sale securities, if any, are determined on a specific identification basis and are recorded in interest income and other, net in the consolidated statements of income. Short-term investments classified as held-to-maturity are financial instruments that the Company has the intent and ability to hold to maturity and are reported net of any related amortization and are not remeasured to fair value on a recurring basis. The Company periodically evaluates unrealized losses in its investment securities for other-than-temporary impairment, using both qualitative and quantitative criteria. In the event a security is deemed to be other-than-temporarily impaired, the Company recognizes the credit loss component in interest income and other, net in the consolidated statements of income. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company accounts for certain assets and liabilities at fair value. The carrying value of the Company’s financial instruments, including cash and cash equivalents, receivables and accounts payable, approximate fair value due to their short-term nature or variable interest rates. See Notes 2, 3, and 4 for the carrying value and fair value of the Company’s investments, derivative instruments, and fixed-rate debt, respectively. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is estimated by applying a fair value hierarchy, which requires maximizing the use of observable inputs when measuring fair value. The three levels of inputs are: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3: Significant unobservable inputs that are not corroborated by market data. The Company’s valuation techniques used to measure the fair value of money market mutual funds are based on quoted market prices, such as quoted net asset values published by the fund as supported in an active market. Valuation methodologies used to measure the fair value of all other non-derivative financial instruments are based on independent external valuation information. The pricing process uses data from a variety of independent external valuation information providers, including trades, bid price or spread, two-sided markets, quotes, benchmark curves including but not limited to treasury benchmarks and Libor and swap curves, discount rates, and market data feeds. All are observable in the market or can be derived principally from or corroborated by observable market data. The Company reports transfers in and out of Levels 1, 2, and 3, as applicable, using the fair value of the individual securities as of the beginning of the reporting period in which the transfer(s) occurred. Current financial liabilities have fair values that approximate their carrying values. Long-term financial liabilities consist of long-term debt, which is recorded on the balance sheet at issuance price and adjusted for any applicable unamortized discounts or premiums. |
Receivables, Net | Receivables, Net Receivables consist of the following at the end of 2015 and 2014 : 2015 2014 Vendor receivables $ 729 $ 704 Reinsurance receivables 273 253 Third-party pharmacy receivables 103 87 Other receivables, net 119 104 Receivables, net $ 1,224 $ 1,148 Vendor receivables include volume rebates or other purchase discounts. Balances are generally presented on a gross basis, separate from any related payable due. In certain circumstances, these receivables may be settled against the related payable to that vendor. Reinsurance receivables are held by the Company’s wholly-owned captive insurance subsidiary. The balance primarily represents amounts ceded through reinsurance arrangements and are reflected on a gross basis, separate from the amounts assumed under reinsurance, which are presented on a gross basis within other current liabilities in the consolidated balance sheets. Third-party pharmacy receivables generally relate to amounts due from members’ insurance companies. Other receivables primarily consist of amounts due from governmental entities, mostly tax-related items. Receivables are recorded net of an allowance for doubtful accounts. The allowance is based on historical experience and application of the specific identification method. Write-offs of receivables were immaterial for fiscal years 2015 , 2014 , and 2013 . |
Merchandise Inventories | Merchandise Inventories Merchandise inventories consist of the following at the end of 2015 and 2014 : 2015 2014 United States $ 6,427 $ 5,952 Foreign 2,481 2,504 Merchandise inventories $ 8,908 $ 8,456 Merchandise inventories are valued at the lower of cost or market, as determined primarily by the retail inventory method, and are stated using the last-in, first-out (LIFO) method for substantially all U.S. merchandise inventories. The Company records an adjustment each quarter, if necessary, for the projected annual effect of inflation or deflation, and these estimates are adjusted to actual results determined at year-end, after actual inflation rates and inventory levels for the year have been determined. The Company believes the LIFO method more fairly presents the results of operations by more closely matching current costs with current revenues. Merchandise inventories for all foreign operations are primarily valued by the retail inventory method and are stated using the first-in, first-out (FIFO) method. Due to net deflationary trends, a benefit of $27 was recorded to merchandise costs in both 2015 and 2013 . Due to net inflationary trends in 2014, a charge of $28 was recorded to merchandise costs to increase the cumulative LIFO valuation on merchandise inventories. At the end of 2015 and 2014 , the cumulative impact of the LIFO valuation on merchandise inventories was $ 82 and $ 109 , respectively. The Company provides for estimated inventory losses between physical inventory counts as a percentage of net sales, using estimates based on the Company’s experience. The provision is adjusted periodically to reflect actual physical inventory counts, which generally occur in the second and fourth fiscal quarters. Inventory cost, where appropriate, is reduced by estimates of vendor rebates when earned or as the Company progresses towards earning those rebates, provided that they are probable and reasonably estimable. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost. In general, new building additions are classified into components, each with its own estimated useful life, generally five to fifty years for buildings and improvements and three to twenty years for equipment and fixtures. Depreciation and amortization expense is computed using the straight-line method over estimated useful lives or the lease term, if shorter. Leasehold improvements made after the beginning of the initial lease term are depreciated over the shorter of the estimated useful life of the asset or the remaining term of the initial lease plus any renewals that are reasonably assured at the date the leasehold improvements are made. The Company capitalizes certain computer software and software development costs incurred in developing or obtaining computer software for internal use. These costs are included in equipment and fixtures and amortized on a straight-line basis over the estimated useful lives of the software, generally three to seven years. Repair and maintenance costs are expensed when incurred. Expenditures for remodels, refurbishments and improvements that add to or change the way an asset functions or that extend the useful life are capitalized. Assets that were removed during the remodel, refurbishment or improvement are retired. Assets classified as held-for-sale at the end of 2015 and 2014 were immaterial. The Company evaluates long-lived assets for impairment on an annual basis, when relocating or closing a facility, or when events or changes in circumstances may indicate the carrying amount of the asset group, generally an individual warehouse, may not be fully recoverable. For asset groups held and used, including warehouses to be relocated, the carrying value of the asset group is considered recoverable when the estimated future undiscounted cash flows generated from the use and eventual disposition of the asset group exceed the respective carrying value. In the event that the carrying value is not considered recoverable, an impairment loss would be recognized for the asset group to be held and used equal to the excess of the carrying value above the estimated fair value of the asset group. For asset groups classified as held-for-sale (disposal group), the carrying value is compared to the disposal group’s fair value less costs to sell. The Company estimates fair value by obtaining market appraisals from third party brokers or using other valuation techniques. Impairment charges, included in selling, general and administrative expenses in the consolidated statements of income, in 2015 , 2014 , and 2013 were immaterial. |
Accounts Payable | Accounts Payable The Company’s banking system provides for the daily replenishment of major bank accounts as checks are presented. Included in accounts payable at the end of 2015 and 2014 are $ 538 and $ 588 , respectively, representing the excess of outstanding checks over cash on deposit at the banks on which the checks were drawn. |
Insurance / Self-Insurance Liabilities | Insurance/Self-Insurance Liabilities The Company uses a combination of insurance and self-insurance mechanisms, including for certain risks a wholly-owned captive insurance subsidiary and participation in a reinsurance program, to provide for potential liabilities for workers’ compensation, general liability, property damage, directors’ and officers’ liability, vehicle liability, and employee health care benefits. Liabilities associated with the risks that are retained by the Company are not discounted and are estimated, in part, by considering historical claims experience, demographic factors, severity factors, and other actuarial assumptions. The estimated accruals for these liabilities could be significantly affected if future occurrences and claims differ from these assumptions and historical trends. At the end of 2015 and 2014 , these insurance liabilities were $ 993 and $ 815 in the aggregate, respectively, and were included in accrued salaries and benefits and other current liabilities in the consolidated balance sheets, classified based on their nature. The Company’s wholly-owned captive insurance subsidiary (the captive) receives direct premiums, which are netted against the Company’s premium costs in selling, general and administrative expenses, in the consolidated statements of income. The captive participates in a reinsurance program that includes other third-party participants. The reinsurance agreement is one year in duration, and new agreements are entered into by each participant at their discretion at the commencement of the next calendar year. The participant agreements and practices of the reinsurance program limit any participating members’ individual risk. Income statement adjustments related to the reinsurance program and related impacts to the consolidated balance sheets are recognized as information becomes known. In the event the Company leaves the reinsurance program, the Company is not relieved of its primary obligation to the policyholders for activity prior to the termination of the annual agreement. |
Other Current Liabilities | Other Current Liabilities Other current liabilities consist of the following at the end of 2015 and 2014 : 2015 2014 Accrued sales, income, and other taxes $ 491 $ 578 Insurance-related liabilities 396 371 Deferred sales 299 250 Cash card liability 201 173 Returns reserve 124 122 Other 185 169 Other current liabilities $ 1,696 $ 1,663 |
Derivatives | Derivatives The Company is exposed to foreign-currency exchange-rate fluctuations in the normal course of business. It manages these fluctuations, in part, through the use of forward foreign-exchange contracts, seeking to economically hedge the impact of fluctuations of foreign exchange on known future expenditures denominated in a non-functional foreign-currency. The contracts relate primarily to U.S. dollar merchandise inventory expenditures made by the Company’s international subsidiaries, whose functional currency is not the U.S. dollar. These contracts do not qualify for derivative hedge accounting. The Company seeks to mitigate risk with the use of these contracts and does not intend to engage in speculative transactions. These contracts do not contain any credit-risk-related contingent features. The aggregate notional amounts of open, unsettled forward foreign-exchange contracts were $ 889 and $ 585 at the end of 2015 and 2014 , respectively. While the Company seeks to manage counterparty risk associated with these contracts by limiting transactions to counterparties with which the Company has an established banking relationship, there can be no assurance that this practice is effective. The contracts are limited to less than one year in duration. See Note 3 for information on the fair value of unsettled forward foreign-exchange contracts at the end of 2015 and 2014 . The unrealized gains or losses recognized in interest income and other, net in the accompanying consolidated statements of income relating to the net changes in the fair value of unsettled forward foreign-exchange contracts was a net gain of $12 for 2015 , and immaterial for 2014 and 2013 . The Company is exposed to fluctuations in prices for the energy it consumes, particularly electricity and natural gas, which it seeks to partially mitigate through the use of fixed- and variable-price contracts for certain of its warehouses and other facilities, primarily in the U.S. and Canada. The Company also enters into variable-priced contracts for purchases of fuel for its gas stations. These contracts meet the characteristics of derivative instruments, but generally qualify for the “normal purchases or normal sales” exception under authoritative guidance and thus require no mark-to-market adjustment. |
Foreign Currency | Foreign Currency The functional currencies of the Company’s international subsidiaries are the local currency of the country in which the subsidiary is located. Assets and liabilities recorded in foreign currencies are translated at the exchange rate on the balance sheet date. Translation adjustments are recorded in accumulated other comprehensive income (loss). Revenues and expenses of the Company’s consolidated foreign operations are translated at average exchange rates prevailing during the year. The Company recognizes foreign-currency transaction gains and losses related to revaluing or settling monetary assets and liabilities denominated in currencies other than the functional currency in interest income and other, net in the accompanying consolidated statements of income. Generally, this includes the U.S. dollar cash and cash equivalents and the U.S. dollar payables of consolidated subsidiaries to their functional currency. Also included are realized foreign-currency gains or losses from settlements of forward foreign-exchange contracts. These items resulted in net gains of $35 , $25 , and $37 for 2015, 2014, and 2013, respectively. |
Revenue Recognition | Revenue Recognition The Company generally recognizes sales, which include shipping fees where applicable, net of returns, at the time the member takes possession of merchandise or receives services. When the Company collects payments from customers prior to the transfer of ownership of merchandise or the performance of services, the amounts received are generally recorded as deferred sales, included in other current liabilities in the consolidated balance sheets, until the sale or service is completed. The Company reserves for estimated sales returns based on historical trends in merchandise returns and reduces sales and merchandise costs accordingly. The sales returns reserve is based on an estimate of the net realizable value of merchandise inventories to be returned. Amounts collected from members for sales or value added taxes are recorded on a net basis. The Company evaluates whether it is appropriate to record the gross amount of merchandise sales and related costs or the net amount earned. Generally, when Costco is the primary obligor, is subject to inventory risk, has latitude in establishing prices and selecting suppliers, can influence product or service specifications, or has several but not all of these indicators, revenue is recorded on a gross basis. If the Company is not the primary obligor and does not possess other indicators of gross reporting as noted above, it records the net amounts earned, which is reflected in net sales. The Company records related shipping fees on a gross basis. The Company accounts for membership fee revenue, net of refunds, on a deferred basis, ratably over the one-year membership period. The Company's Executive members qualify for a 2% reward on qualified purchases (up to a maximum reward of approximately $ 750 per year), which can be redeemed only at Costco warehouses. The Company accounts for this reward as a reduction in sales. The sales reduction and corresponding liability (classified as accrued member rewards in the consolidated balance sheets) are computed after giving effect to the estimated impact of non-redemptions based on historical data. The net reduction in sales was $ 1,128 , $ 1,051 , and $ 970 in 2015 , 2014 , and 2013 , respectively. |
Merchandise Costs | Merchandise Costs Merchandise costs consist of the purchase price of inventory sold, inbound and outbound shipping charges and all costs related to the Company’s depot operations, including freight from depots to selling warehouses, and are reduced by vendor consideration. Merchandise costs also include salaries, benefits, depreciation, and utilities on production equipment in fresh foods and certain ancillary departments. |
Vendor Consideration | Vendor Consideration The Company has agreements with vendors to receive funds for volume rebates, certain ongoing programs, and other vendor consideration. Volume rebates or other purchase discounts are evidenced by signed agreements that are reflected in the carrying value of the inventory when earned or as the Company progresses towards earning the rebate or discount, and as a component of merchandise costs as the merchandise is sold. Other vendor consideration is generally recorded as a reduction of merchandise costs upon completion of contractual milestones, terms of the related agreement, or by another systematic approach. |
Selling, General and Administrative Expenses | Selling, General and Administrative Expenses Selling, general and administrative expenses consist primarily of salaries, benefits and workers’ compensation costs for warehouse employees, other than fresh foods departments and certain ancillary businesses, as well as all regional and home office employees, including buying personnel. Selling, general and administrative expenses also include substantially all building and equipment depreciation, bank charges, utilities, and stock-based compensation expense as well as other operating costs incurred to support warehouse operations. |
Retirement Plans | Retirement Plans The Company's 401(k) Retirement Plan is available to all U.S. employees who have completed 90 days of employment. The plan allows pre-tax deferrals, a portion of which the Company matches. In addition, the Company provides each eligible participant an annual discretionary contribution. The Company also has a defined contribution plan for Canadian employees and contributes a percentage of each employee's salary. Certain subsidiaries in the Company's Other International operations have defined benefit and defined contribution plans that are not material. Amounts expensed under all plans were $454 , $436 , and $409 for 2015 , 2014 , and 2013 , respectively, and are included in selling, general and administrative expenses and merchandise costs in the accompanying consolidated statements of income. |
Stock-Based Compensation | Stock-Based Compensation Restricted stock units (RSUs) granted to employees generally vest over five years and allow for quarterly vesting of the pro-rata number of stock-based awards that would vest on the next anniversary of the grant date in the event of retirement or voluntary termination. The Company does not reduce stock-based compensation for an estimate of forfeitures, which are inconsequential in light of historical experience and considering the awards vest on a quarterly basis. Actual forfeitures are recognized as they occur. Compensation expense for all stock-based awards granted is predominantly recognized using the straight-line method over the requisite service period for the entire award. The terms of the Company’s stock-based awards for employees and non-employee directors provide for accelerated vesting of a portion of outstanding shares based on reaching certain cumulative years of service with the Company. Compensation expense for the accelerated shares is recognized upon achievement of the long service term. The cumulative amount of compensation cost recognized at any point in time equals at least the portion of the grant-date fair value of the award that is vested at that date. The fair value of RSUs is calculated as the market value of the common stock on the measurement date less the present value of the expected dividends forgone during the vesting period. Stock-based compensation expense is predominantly included in selling, general and administrative expenses in the consolidated statements of income. See Note 7 for additional information on the Company’s stock-based compensation plans. |
Leases | Leases The Company leases land and/or buildings at warehouses and certain other office and distribution facilities, primarily under operating leases. Operating leases expire at various dates through 2064 , with the exception of one lease in the Company’s U.K. subsidiary, which expires in 2151 . These leases generally contain one or more of the following options, which the Company can exercise at the end of the initial lease term: (a) renewal of the lease for a defined number of years at the then-fair market rental rate or rate stipulated in the lease agreement; (b) purchase of the property at the then-fair market value; or (c) right of first refusal in the event of a third-party purchase offer. The Company accounts for its lease expense with free rent periods and step-rent provisions on a straight-line basis over the original term of the lease and any extension options that the Company more likely than not expects to exercise, from the date the Company has control of the property. Certain leases provide for periodic rental increases based on price indices, or the greater of minimum guaranteed amounts or sales volume. The Company has capital leases for certain warehouse locations, expiring at various dates through 2040 . Capital lease assets are included in land, buildings, and improvements in the accompanying consolidated balance sheets. Amortization expense on capital lease assets is recorded as depreciation expense and is predominately included in selling, general and administrative expenses. Capital lease liabilities are recorded at the lesser of the estimated fair market value of the leased property or the net present value of the aggregate future minimum lease payments and are included in other current liabilities and deferred income taxes and other liabilities in the accompanying consolidated balance sheets. Interest on these obligations is included in interest expense in the consolidated statements of income. The Company records an asset and related financing obligation for the estimated construction costs under build-to-suit lease arrangements where it is considered the owner for accounting purposes, to the extent the Company is involved in the construction of the building or structural improvements or has construction risk prior to commencement of a lease. Upon occupancy, the Company assesses whether these arrangements qualify for sales recognition under the sale-leaseback accounting guidance. If the Company continues to be the deemed owner, it accounts for the arrangement as a financing lease. The Company’s asset retirement obligations (ARO) are primarily related to leasehold improvements that at the end of a lease must be removed in order to comply with the lease agreement. These obligations are recorded as a liability with an offsetting asset at the inception of the lease term based upon the estimated fair value of the costs to remove the leasehold improvements. These liabilities are accreted over time to the projected future value of the obligation using the Company’s incremental borrowing rate. The ARO assets are depreciated using the same depreciation method as the respective leasehold improvement assets and are included with buildings and improvements. Estimated ARO liabilities associated with these leases amounted to $ 54 and $ 55 at the end of 2015 and 2014 , respectively, and are included in deferred income taxes and other liabilities in the accompanying consolidated balance sheets. |
Preopening Expenses | Preopening Expenses Preopening expenses related to new warehouses, new regional offices and other startup operations are expensed as incurred. |
Income Taxes | Income Taxes The Company accounts for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributed to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credits and loss carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences and carry-forwards are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established when necessary to reduce deferred tax assets to amounts that are more likely than not expected to be realized. The determination of the Company’s provision for income taxes requires significant judgment, the use of estimates, and the interpretation and application of complex tax laws. Significant judgment is required in assessing the timing and amounts of deductible and taxable items and the probability of sustaining uncertain tax positions. The benefits of uncertain tax positions are recorded in the Company’s consolidated financial statements only after determining a more-likely-than-not probability that the uncertain tax positions will withstand challenge, if any, from tax authorities. Additionally, certain of our cumulative foreign undistributed earnings are considered indefinitely reinvested. These earnings would be subject to U.S. income tax if we changed our position and could result in a U.S. tax liability. When facts and circumstances change, the Company reassesses these probabilities and records any changes in the consolidated financial statements as appropriate. See Note 8 for additional information. |
Net Income per Common Share Attributable to Costco | Net Income per Common Share Attributable to Costco The computation of basic net income per share uses the weighted average number of shares that were outstanding during the period. The computation of diluted net income per share uses the weighted average number of shares in the basic net income per share calculation plus the number of common shares that would be issued assuming vesting of all potentially dilutive common shares outstanding using the treasury stock method for shares subject to RSUs and the “if converted” method for the convertible note securities. |
Stock Repurchase Programs | Stock Repurchase Programs Repurchased shares of common stock are retired, in accordance with the Washington Business Corporation Act. The par value of repurchased shares is deducted from common stock and the excess repurchase price over par is deducted by allocation to both additional paid-in capital and retained earnings. The amount allocated to additional paid-in capital is calculated as the current value of additional paid-in capital per share outstanding and is applied to the number of shares repurchased. Any remaining amount is allocated to retained earnings. See Note 6 for additional information. |
Recent Accounting Pronouncements Not Yet Adopted | Recent Accounting Pronouncements Not Yet Adopted In April 2014, the Financial Accounting Standards Board (FASB) issued guidance that changed the criteria for reporting discontinued operations, as well as requiring new disclosures regarding discontinued operations and disposals that do not qualify for discontinued operations reporting. This guidance is effective for fiscal years beginning after December 15, 2014, with early adoption permitted for disposals that have not been reported in financial statements previously issued. The Company will adopt this guidance at the beginning of fiscal year 2016. Adoption is not expected to have a material impact on the Company’s consolidated financial statements or disclosures. In May 2014, the FASB issued new guidance on the recognition of revenue from contracts with customers. The guidance converges the requirements for reporting revenue in addition to requiring disclosures sufficient to describe the nature, amount, timing, and uncertainty of revenue and cash flows arising from these contracts. Companies can transition to the standard either retrospectively or as a cumulative effect adjustment as of the date of adoption. The new standard is effective for fiscal years and interim periods within those years beginning after December 15, 2017. The Company plans to adopt this guidance at the beginning of its first quarter of fiscal year 2019. The Company is evaluating the impact of this standard on its consolidated financial statements and disclosures. |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Aug. 30, 2015 | |
Accounting Policies [Abstract] | |
Schedule of Receivables, Net | Receivables consist of the following at the end of 2015 and 2014 : 2015 2014 Vendor receivables $ 729 $ 704 Reinsurance receivables 273 253 Third-party pharmacy receivables 103 87 Other receivables, net 119 104 Receivables, net $ 1,224 $ 1,148 |
Schedule of Merchandise Inventories | Merchandise inventories consist of the following at the end of 2015 and 2014 : 2015 2014 United States $ 6,427 $ 5,952 Foreign 2,481 2,504 Merchandise inventories $ 8,908 $ 8,456 |
Schedule of Other Current Liabilities | Other current liabilities consist of the following at the end of 2015 and 2014 : 2015 2014 Accrued sales, income, and other taxes $ 491 $ 578 Insurance-related liabilities 396 371 Deferred sales 299 250 Cash card liability 201 173 Returns reserve 124 122 Other 185 169 Other current liabilities $ 1,696 $ 1,663 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Aug. 30, 2015 | |
Investments, Debt and Equity Securities [Abstract] | |
Available for Sale and Held to Maturity Investments | The Company’s investments at the end of 2015 and 2014 were as follows: 2015: Cost Basis Unrealized Gains, Net Recorded Basis Available-for-sale: Government and agency securities $ 1,394 $ 4 $ 1,398 Asset and mortgage-backed securities 5 0 5 Total available-for-sale 1,399 4 1,403 Held-to-maturity: Certificates of deposit 215 215 Total short-term investments $ 1,614 $ 4 $ 1,618 2014: Cost Basis Unrealized Gains, Net Recorded Basis Available-for-sale: Government and agency securities $ 1,404 $ 1 $ 1,405 Asset and mortgage-backed securities 4 0 4 Total available-for-sale 1,408 1 1,409 Held-to-maturity: Certificates of deposit 155 155 Bankers' acceptances 13 13 Total held-to-maturity 168 168 Total short-term investments $ 1,576 $ 1 $ 1,577 |
Maturities of Available for Sale and Held to Maturity Securities | The maturities of available-for-sale and held-to-maturity securities at the end of 2015 , were as follows: Available-For-Sale Held-To-Maturity Cost Basis Fair Value Due in one year or less $ 300 $ 301 $ 215 Due after one year through five years 1,061 1,064 0 Due after five years 38 38 0 Total $ 1,399 $ 1,403 $ 215 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 12 Months Ended |
Aug. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Assets and Liabilities Measured on Recurring Basis | The tables below present information at the end of 2015 and 2014 , respectively, regarding the Company’s financial assets and financial liabilities that are measured at fair value on a recurring basis and indicate the level within the fair value hierarchy reflecting the valuation techniques utilized to determine such fair value. 2015: Level 1 Level 2 Money market mutual funds (1) $ 306 $ 0 Investment in government and agency securities 0 1,398 Investment in asset and mortgage-backed securities 0 5 Forward foreign-exchange contracts, in asset position (2) 0 16 Forward foreign-exchange contracts, in (liability) position (2) 0 (4 ) Total $ 306 $ 1,415 2014: Level 1 Level 2 Money market mutual funds (1) $ 312 $ 0 Investment in government and agency securities 0 1,405 Investment in asset and mortgage-backed securities 0 4 Forward foreign-exchange contracts, in asset position (2) 0 3 Forward foreign-exchange contracts, in (liability) position (2) 0 (3 ) Total $ 312 $ 1,409 _______________ (1) Included in cash and cash equivalents in the accompanying consolidated balance sheets. (2) The asset and the liability values are included in deferred income taxes and other current assets and other current liabilities, respectively, in the accompanying consolidated balance sheets. See Note 1 for additional information on derivative instruments. |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Aug. 30, 2015 | |
Debt Disclosure [Abstract] | |
Carrying Value and Estimated Fair Value of Company's Long-Term Debt | The carrying value and estimated fair value at the end of 2015 and 2014 consisted of the following: 2015 2014 Carrying Value Fair Value Carrying Value Fair Value 0.65% Senior Notes due December 2015 $ 1,200 $ 1,201 $ 1,199 $ 1,203 5.5% Senior Notes due March 2017 1,099 1,171 1,099 1,223 1.125% Senior Notes due December 2017 1,100 1,097 1,100 1,095 1.7% Senior Notes due December 2019 1,198 1,186 1,198 1,186 1.75% Senior Notes due February 2020 500 494 0 0 2.25% Senior Notes due February 2022 499 484 0 0 Other long-term debt 551 555 497 510 Total long-term debt 6,147 6,188 5,093 5,217 Less current portion 1,283 1,284 0 0 Long-term debt, excluding current portion $ 4,864 $ 4,904 $ 5,093 $ 5,217 |
Schedule of Maturities of Long-term Debt | Maturities of long-term debt during the next five fiscal years and thereafter are as follows: 2016 $ 1,283 2017 1,100 2018 1,178 2019 83 2020 1,698 Thereafter 805 Total $ 6,147 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Aug. 30, 2015 | |
Leases [Abstract] | |
Schedule Of Future Minimum Lease Payments For Capital And Operating Leases | At the end of 2015 , future minimum payments, net of sub-lease income of $ 131 for all years combined, under non-cancelable operating leases with terms of at least one year and capital leases were as follows: Operating Leases Capital Leases (3) 2016 $ 187 $ 24 2017 183 24 2018 176 24 2019 166 23 2020 155 24 Thereafter 2,097 452 Total $ 2,964 571 Less amount representing interest (275 ) Net present value of minimum lease payments 296 Less current installments (1) (10 ) Long-term capital lease obligations less current installments (2) $ 286 _______________ (1) Included in other current liabilities in the accompanying consolidated balance sheets. (2) Included in deferred income taxes and other liabilities in the accompanying consolidated balance sheets. (3) Includes build-to-suit lease obligations. |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Aug. 30, 2015 | |
Stockholders' Equity Note [Abstract] | |
Stock Repurchased Activity | The following table summarizes the Company’s stock repurchase activity: Shares Repurchased (000’s) Average Price per Share Total Cost 2015 3,456 $ 142.87 $ 494 2014 2,915 114.45 334 2013 357 96.41 34 |
Stock-Based Compensation Plans
Stock-Based Compensation Plans (Tables) | 12 Months Ended |
Aug. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of RSU Transactions | The following table summarizes RSU transactions during 2015 : Number of Units (in 000’s) Weighted-Average Grant Date Fair Value Outstanding at the end of 2014 9,117 $ 86.92 Granted 4,017 125.68 Vested and delivered (4,103 ) 87.33 Forfeited (174 ) 102.09 Special cash dividend 376 N/A Outstanding at the end of 2015 9,233 $ 99.72 |
Summary of Stock-Based Compensation Expense and Related Tax Benefits | The following table summarizes stock-based compensation expense and the related tax benefits under the Company’s plans: 2015 2014 2013 Stock-based compensation expense before income taxes $ 394 $ 327 $ 285 Less recognized income tax benefit (131 ) (109 ) (94 ) Stock-based compensation expense, net of income taxes $ 263 $ 218 $ 191 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Aug. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax, Domestic and Foreign | Income before income taxes is comprised of the following: 2015 2014 2013 Domestic (including Puerto Rico) $ 2,574 $ 2,145 $ 2,070 Foreign 1,030 1,052 981 Total $ 3,604 $ 3,197 $ 3,051 |
Schedule of Components of Income Tax Expense (Benefit) | The provisions for income taxes for 2015 , 2014 , and 2013 are as follows: 2015 2014 2013 Federal: Current $ 766 $ 696 $ 572 Deferred (12 ) (105 ) 16 Total federal 754 591 588 State: Current 131 107 109 Deferred 1 (3 ) 4 Total state 132 104 113 Foreign: Current 399 369 302 Deferred (90 ) 45 (13 ) Total foreign 309 414 289 Total provision for income taxes $ 1,195 $ 1,109 $ 990 |
Schedule of Effective Income Tax Rate Reconciliation | The reconciliation between the statutory tax rate and the effective rate for 2015 , 2014 , and 2013 is as follows: 2015 2014 2013 Federal taxes at statutory rate $ 1,262 35.0 % $ 1,119 35.0 % $ 1,068 35.0 % State taxes, net 85 2.3 66 2.1 66 2.1 Foreign taxes, net (125 ) (3.5 ) (85 ) (2.7 ) (87 ) (2.8 ) Employee stock ownership plan (ESOP) (66 ) (1.8 ) (11 ) (0.3 ) (65 ) (2.1 ) Other 39 1.2 20 0.6 8 0.2 Total $ 1,195 33.2 % $ 1,109 34.7 % $ 990 32.4 % |
Schedule of Deferred Tax Assets and Liabilities | The components of the deferred tax assets (liabilities) are as follows: 2015 2014 Equity compensation $ 90 $ 85 Deferred income/membership fees 90 98 Accrued liabilities and reserves 641 607 Other 107 19 Property and equipment (560 ) (529 ) Merchandise inventories (200 ) (193 ) Net deferred tax assets $ 168 $ 87 |
Schedule Of Gross Unrecognized Tax Benefits Table | A reconciliation of the beginning and ending amount of gross unrecognized tax benefits for 2015 and 2014 is as follows: 2015 2014 Gross unrecognized tax benefit at beginning of year $ 75 $ 80 Gross increases—current year tax positions 26 9 Gross increases—tax positions in prior years 63 10 Gross decreases—tax positions in prior years (1 ) (11 ) Settlements (3 ) (11 ) Lapse of statute of limitations (2 ) (2 ) Gross unrecognized tax benefit at end of year $ 158 $ 75 |
Net Income per Common and Com30
Net Income per Common and Common Equivalent Share Net Income per Common and Common Equivalent Share (Tables) | 12 Months Ended |
Aug. 30, 2015 | |
Schedule of Earnings Per Share, Basic and Diluted [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table shows the amounts used in computing net income per share and the effect on net income and the weighted average number of shares of potentially dilutive common shares outstanding (shares in 000’s): 2015 2014 2013 Net income available to common stockholders after assumed conversions of dilutive securities $ 2,377 $ 2,058 $ 2,039 Weighted average number of common shares used in basic net income per common share 439,455 438,693 435,741 RSUs 3,249 3,771 4,552 Conversion of convertible notes 12 21 219 Weighted average number of common shares and dilutive potential of common stock used in diluted net income per share 442,716 442,485 440,512 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Aug. 30, 2015 | |
Segment Reporting [Abstract] | |
Segment Reporting Information, by Segment | Certain operating expenses, predominantly stock-based compensation, are incurred on behalf of the Company's Canadian and Other International operations, but are included in the U.S. operations because those costs are not allocated internally and generally come under the responsibility of the Company's U.S. management team. United States Operations Canadian Operations Other International Operations Total 2015 Total revenue $ 84,351 $ 17,341 $ 14,507 $ 116,199 Operating income 2,308 771 545 3,624 Depreciation and amortization 848 119 160 1,127 Additions to property and equipment 1,574 148 671 2,393 Net property and equipment 10,815 1,381 3,205 15,401 Total assets 23,397 3,608 6,435 33,440 2014 Total revenue $ 80,477 $ 17,943 $ 14,220 $ 112,640 Operating income 1,880 796 544 3,220 Depreciation and amortization 755 124 150 1,029 Additions to property and equipment 1,245 204 544 1,993 Net property and equipment 10,132 1,662 3,036 14,830 Total assets 21,929 4,892 6,203 33,024 2013 Total revenue $ 75,493 $ 17,179 $ 12,484 $ 105,156 Operating income 1,810 756 487 3,053 Depreciation and amortization 696 123 127 946 Additions to property and equipment 1,090 186 807 2,083 Net property and equipment 9,652 1,621 2,608 13,881 Total assets 20,608 4,529 5,146 30,283 |
Revenue from External Customers by Products and Services | The following table summarizes the percentage of net sales by major item category: 2015 2014 2013 Foods 22 % 22 % 21 % Sundries 21 % 21 % 22 % Hardlines 16 % 16 % 16 % Fresh Foods 14 % 13 % 13 % Softlines 11 % 11 % 11 % Ancillary and Other 16 % 17 % 17 % |
Quarterly Financial Data (Una32
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Aug. 30, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Unaudited Quarterly Results of Operations | The two tables that follow reflect the unaudited quarterly results of operations for 2015 and 2014 . 52 Weeks Ended August 30, 2015 First Quarter (12 Weeks) Second Quarter (12 Weeks) Third Quarter (12 Weeks) Fourth Quarter (16 Weeks) Total (52 Weeks) REVENUE Net sales $ 26,284 $ 26,872 $ 25,517 $ 34,993 $ 113,666 Membership fees 582 582 584 785 2,533 Total revenue 26,866 27,454 26,101 35,778 116,199 OPERATING EXPENSES Merchandise costs 23,385 23,897 22,687 31,096 101,065 Selling, general and administrative 2,696 2,671 2,579 3,499 11,445 Preopening expenses 15 9 14 27 65 Operating income 770 877 821 1,156 3,624 OTHER INCOME (EXPENSE) Interest expense (26 ) (27 ) (31 ) (40 ) (124 ) Interest income and other, net 35 20 9 40 104 INCOME BEFORE INCOME TAXES 779 870 799 1,156 3,604 Provision for income taxes 274 263 (1) 280 378 1,195 Net income including noncontrolling interests 505 607 519 778 2,409 Net income attributable to noncontrolling interests (9 ) (9 ) (3 ) (11 ) (32 ) NET INCOME ATTRIBUTABLE TO COSTCO $ 496 $ 598 $ 516 $ 767 $ 2,377 NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO: Basic $ 1.13 $ 1.36 $ 1.17 $ 1.75 $ 5.41 Diluted $ 1.12 $ 1.35 $ 1.17 $ 1.73 $ 5.37 Shares used in calculation (000’s) Basic 438,760 440,384 440,070 438,835 439,455 Diluted 442,210 442,896 443,132 442,404 442,716 CASH DIVIDENDS DECLARED PER COMMON SHARE $ 0.355 $ 5.355 (2) $ 0.40 $ 0.40 $ 6.51 _______________ (1) Includes a $57 tax benefit recorded in the second quarter in connection with the special cash dividend paid to employees through the Company's 401(k) Retirement Plan. (2) Includes the special cash dividend of $5.00 per share paid in February 2015. 52 Weeks Ended August 31, 2014 First Quarter (12 Weeks) Second Quarter (12 Weeks) Third Quarter (12 Weeks) Fourth Quarter (16 Weeks) Total REVENUE Net sales $ 24,468 $ 25,756 $ 25,233 $ 34,755 $ 110,212 Membership fees 549 550 561 768 2,428 Total revenue 25,017 26,306 25,794 35,523 112,640 OPERATING EXPENSES Merchandise costs 21,824 23,043 22,554 31,037 98,458 Selling, general and administrative 2,501 2,531 2,487 3,380 10,899 Preopening expenses 24 8 16 15 63 Operating income 668 724 737 1,091 3,220 OTHER INCOME (EXPENSE) Interest expense (27 ) (26 ) (25 ) (35 ) (113 ) Interest income and other, net 18 30 12 30 90 INCOME BEFORE INCOME TAXES 659 728 724 1,086 3,197 Provision for income taxes 228 255 245 381 1,109 Net income including noncontrolling interests 431 473 479 705 2,088 Net income attributable to noncontrolling interests (6 ) (10 ) (6 ) (8 ) (30 ) NET INCOME ATTRIBUTABLE TO COSTCO $ 425 $ 463 $ 473 $ 697 $ 2,058 NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO: Basic $ 0.97 $ 1.05 $ 1.08 $ 1.59 $ 4.69 Diluted $ 0.96 $ 1.05 $ 1.07 $ 1.58 $ 4.65 Shares used in calculation (000’s) Basic 437,970 439,776 439,446 437,875 438,693 Diluted 442,420 442,829 442,720 441,887 442,485 CASH DIVIDENDS DECLARED PER COMMON SHARE $ 0.31 $ 0.31 $ 0.355 $ 0.355 $ 1.33 |
Summary of Significant Accoun33
Summary of Significant Accounting Policies - Additional Information (Detail) | 12 Months Ended | ||
Aug. 30, 2015USD ($)warehousestates | Aug. 31, 2014USD ($) | Sep. 01, 2013USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | |||
Number of warehouses operated | warehouse | 686 | ||
Credit and debit card receivables, at carrying value | $ 1,243,000,000 | $ 1,383,000,000 | |
Inventory, LIFO reserve, period charge (benefit) | (27,000,000) | 28,000,000 | $ (27,000,000) |
Inventory LIFO reserve cumulative impact | 82,000,000 | 109,000,000 | |
Outstanding checks unpresented for payment | 538,000,000 | 588,000,000 | |
Accrued insurance | 993,000,000 | 815,000,000 | |
Gain (loss) on foreign currency derivative instruments not designated as hedging instruments | 12,000,000 | ||
Foreign currency transaction gain (loss), before tax | $ 35,000,000 | 25,000,000 | 37,000,000 |
Maximum reward rebate percentage per customer yearly | 2.00% | ||
Maximum reward rebate amount per customer yearly | $ 750 | ||
Reduction in sales | $ 1,128,000,000 | 1,051,000,000 | 970,000,000 |
Minimum number of days of employment to qualify for retirement plan | 90 days | ||
Defined contribution plan, cost recognized | $ 454,000,000 | 436,000,000 | $ 409,000,000 |
Asset retirement obligations, noncurrent | 54,000,000 | 55,000,000 | |
Forward foreign exchange contracts | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Notional amount of forward foreign - exchange derivative | $ 889,000,000 | $ 585,000,000 | |
UNITED STATES | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Number of warehouses operated | warehouse | 480 | ||
Number of states in country | states | 43 | ||
CANADA | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Number of warehouses operated | warehouse | 89 | ||
MEXICO | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Number of warehouses operated | warehouse | 36 | ||
UNITED KINGDOM | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Number of warehouses operated | warehouse | 27 | ||
JAPAN | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Number of warehouses operated | warehouse | 23 | ||
KOREA, REPUBLIC OF | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Number of warehouses operated | warehouse | 12 | ||
TAIWAN, PROVINCE OF CHINA | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Number of warehouses operated | warehouse | 11 | ||
AUSTRALIA | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Number of warehouses operated | warehouse | 7 | ||
SPAIN | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Number of warehouses operated | warehouse | 1 | ||
Building and Building Improvements [Member] | Minimum [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Property, plant and equipment, useful life | 5 years | ||
Building and Building Improvements [Member] | Maximum [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Property, plant and equipment, useful life | 50 years | ||
Furniture and Fixtures [Member] | Minimum [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Property, plant and equipment, useful life | 3 years | ||
Furniture and Fixtures [Member] | Maximum [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Property, plant and equipment, useful life | 20 years | ||
Software [Member] | Minimum [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Property, plant and equipment, useful life | 3 years | ||
Software [Member] | Maximum [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Property, plant and equipment, useful life | 7 years | ||
Employees [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Share-based compensation arrangement by share-based payment award, award vesting period | 5 years |
Summary Of Significant Accoun34
Summary Of Significant Accounting Policies (Receivables, Net) (Detail) - USD ($) $ in Millions | Aug. 30, 2015 | Aug. 31, 2014 |
Disclosure Summary Of Significant Accounting Policies Receivables Net [Abstract] | ||
Vendor receivables | $ 729 | $ 704 |
Reinsurance receivables | 273 | 253 |
Third-party pharmacy receivables | 103 | 87 |
Other receivables, net | 119 | 104 |
Receivables, Net | $ 1,224 | $ 1,148 |
Summary Of Significant Accoun35
Summary Of Significant Accounting Policies (Merchandise Inventories (Detail) - USD ($) $ in Millions | Aug. 30, 2015 | Aug. 31, 2014 |
Schedule of Inventory [Line Items] | ||
Merchandise inventories | $ 8,908 | $ 8,456 |
UNITED STATES | ||
Schedule of Inventory [Line Items] | ||
United States | 6,427 | 5,952 |
Foreign | ||
Schedule of Inventory [Line Items] | ||
Foreign | $ 2,481 | $ 2,504 |
Summary Of Significant Accoun36
Summary Of Significant Accounting Policies (Other Current Liabilities) (Detail) - USD ($) $ in Millions | Aug. 30, 2015 | Aug. 31, 2014 |
Disclosure Summary Of Significant Accounting Policies Other Current Liabilities [Abstract] | ||
Accrued sales, income, and other taxes | $ 491 | $ 578 |
Insurance-related liabilities | 396 | 371 |
Deferred sales | 299 | 250 |
Cash card liability | 201 | 173 |
Returns reserve | 124 | 122 |
Other | 185 | 169 |
Other Current Liabilities | $ 1,696 | $ 1,663 |
Investments - Available for Sal
Investments - Available for Sale and Held to Maturity Investments (Detail) - USD ($) $ in Millions | Aug. 30, 2015 | Aug. 31, 2014 |
Available For Sale And Held To Maturity [Line Items] | ||
Available-for-sale, cost basis, total | $ 1,399 | |
Available-for-sale, recorded basis | 1,403 | |
Held-to-maturity, cost basis | 215 | |
Total investments, recorded basis | 1,618 | $ 1,577 |
Short-term Investments | ||
Available For Sale And Held To Maturity [Line Items] | ||
Unrealized gains | 4 | 1 |
Total investments, cost basis | 1,614 | 1,576 |
Total investments, recorded basis | 1,618 | 1,577 |
Short-term Investments | Available-for-sale Securities | ||
Available For Sale And Held To Maturity [Line Items] | ||
Available-for-sale, cost basis, total | 1,399 | 1,408 |
Unrealized gains | 4 | 1 |
Available-for-sale, recorded basis | 1,403 | 1,409 |
Short-term Investments | Available-for-sale Securities | Government and agency securities | ||
Available For Sale And Held To Maturity [Line Items] | ||
Available-for-sale, cost basis, total | 1,394 | 1,404 |
Unrealized gains | 4 | 1 |
Available-for-sale, recorded basis | 1,398 | 1,405 |
Short-term Investments | Available-for-sale Securities | Asset-backed securities | ||
Available For Sale And Held To Maturity [Line Items] | ||
Available-for-sale, cost basis, total | 5 | 4 |
Unrealized gains | 0 | 0 |
Available-for-sale, recorded basis | 5 | 4 |
Short-term Investments | Held-to-maturity Securities | ||
Available For Sale And Held To Maturity [Line Items] | ||
Held-to-maturity, cost basis | 168 | |
Held-to-maturity, recorded basis | 168 | |
Short-term Investments | Held-to-maturity Securities | Certificates of deposit | ||
Available For Sale And Held To Maturity [Line Items] | ||
Held-to-maturity, cost basis | 215 | 155 |
Held-to-maturity, recorded basis | $ 215 | 155 |
Short-term Investments | Held-to-maturity Securities | Banker's acceptances | ||
Available For Sale And Held To Maturity [Line Items] | ||
Held-to-maturity, cost basis | 13 | |
Held-to-maturity, recorded basis | $ 13 |
Investments - Proceeds from Sal
Investments - Proceeds from Sales of Available for Sale Securities (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Aug. 30, 2015 | Aug. 31, 2014 | Sep. 01, 2013 | |
Investments, Debt and Equity Securities [Abstract] | |||
Proceeds | $ 246 | $ 116 | $ 244 |
Investments - Maturities of Ava
Investments - Maturities of Available for Sale and Held to Maturity Securities (Details) $ in Millions | Aug. 30, 2015USD ($) |
Available-For-Sale, Cost Basis | |
Due in one year or less | $ 300 |
Due after one year through five years | 1,061 |
Due after five years | 38 |
Available-for-sale, cost basis, total | 1,399 |
Available-For-Sale, Fair Value | |
Due in one year or less | 301 |
Due after one year through five years | 1,064 |
Due after five years | 38 |
Available-for-sale, recorded basis, total | 1,403 |
Held-To-Maturity | |
Due in one year or less | 215 |
Due after one year through five years | 0 |
Due after five years | 0 |
Held-to-maturity, cost basis, total | $ 215 |
Fair Value Measurement - Fair V
Fair Value Measurement - Fair Value of Financial Assets and Financial Liabilities Measured on Recurring Basis (Details) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Millions | Aug. 30, 2015 | Aug. 31, 2014 | |
Fair Value, Inputs, Level 1 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||
Fair value of assets measured on recurring basis | $ 306 | $ 312 | |
Fair Value, Inputs, Level 2 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||
Fair value of assets measured on recurring basis | 1,415 | 1,409 | |
Money Market Funds [Member] | Fair Value, Inputs, Level 1 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||
Fair value of assets measured on recurring basis | [1] | 306 | 312 |
Money Market Funds [Member] | Fair Value, Inputs, Level 2 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||
Fair value of assets measured on recurring basis | [1] | 0 | 0 |
Government and Agency Securities [Member] | Fair Value, Inputs, Level 1 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||
Fair value of assets measured on recurring basis | 0 | 0 | |
Government and Agency Securities [Member] | Fair Value, Inputs, Level 2 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||
Fair value of assets measured on recurring basis | 1,398 | 1,405 | |
Asset-backed Securities [Member] | Fair Value, Inputs, Level 1 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||
Fair value of assets measured on recurring basis | 0 | 0 | |
Asset-backed Securities [Member] | Fair Value, Inputs, Level 2 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||
Fair value of assets measured on recurring basis | 5 | 4 | |
Foreign Exchange Forward [Member] | Fair Value, Inputs, Level 1 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||
Fair value of assets measured on recurring basis | [2] | 0 | 0 |
Fair value of liabilities measured on recurring basis | [2] | 0 | 0 |
Foreign Exchange Forward [Member] | Fair Value, Inputs, Level 2 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||
Fair value of assets measured on recurring basis | [2] | 16 | 3 |
Fair value of liabilities measured on recurring basis | [2] | $ (4) | $ (3) |
[1] | Included in cash and cash equivalents in the accompanying consolidated balance sheets. | ||
[2] | The asset and the liability values are included in deferred income taxes and other current assets and other current liabilities, respectively, in the accompanying consolidated balance sheets. See Note 1 for additional information on derivative instruments. |
Debt (Carrying Value and Estima
Debt (Carrying Value and Estimated Fair Value of Company's Long Term Debt) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Aug. 30, 2015 | Aug. 31, 2014 | |
Debt Instrument [Line Items] | ||
Total long-term debt, carrying value | $ 6,147 | $ 5,093 |
Less current portion, carrying value | 1,283 | 0 |
Long-term debt, excluding current portion, carrying value | 4,864 | 5,093 |
Total long-term debt, fair value | 6,188 | 5,217 |
Less current portion, fair value | 1,284 | 0 |
Long-term debt, excluding current portion, fair value | $ 4,904 | 5,217 |
0.65% Senior Notes due December 2015 | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate, stated percentage | 0.65% | |
Debt instrument, maturity date | Dec. 7, 2015 | |
Total long-term debt, carrying value | $ 1,200 | 1,199 |
Total long-term debt, fair value | $ 1,201 | 1,203 |
5.5% Senior Notes due March 2017 | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate, stated percentage | 5.50% | |
Debt instrument, maturity date | Mar. 15, 2017 | |
Total long-term debt, carrying value | $ 1,099 | 1,099 |
Total long-term debt, fair value | $ 1,171 | 1,223 |
1.125% Senior Notes due December 2017 | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate, stated percentage | 1.125% | |
Debt instrument, maturity date | Dec. 15, 2017 | |
Total long-term debt, carrying value | $ 1,100 | 1,100 |
Total long-term debt, fair value | $ 1,097 | 1,095 |
1.7% Senior Notes due December 2019 | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate, stated percentage | 1.70% | |
Debt instrument, maturity date | Dec. 15, 2019 | |
Total long-term debt, carrying value | $ 1,198 | 1,198 |
Total long-term debt, fair value | $ 1,186 | 1,186 |
1.75% Senior Notes due February 2020 | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate, stated percentage | 1.75% | |
Debt instrument, maturity date | Feb. 15, 2020 | |
Total long-term debt, carrying value | $ 500 | 0 |
Total long-term debt, fair value | $ 494 | 0 |
2.25% Senior Notes due February 2022 | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate, stated percentage | 2.25% | |
Debt instrument, maturity date | Feb. 15, 2022 | |
Total long-term debt, carrying value | $ 499 | 0 |
Total long-term debt, fair value | 484 | 0 |
Other Long Term Debt | ||
Debt Instrument [Line Items] | ||
Total long-term debt, carrying value | 551 | 497 |
Total long-term debt, fair value | $ 555 | $ 510 |
Debt (Schedule Of Short-Term De
Debt (Schedule Of Short-Term Debt) (Detail) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Aug. 31, 2014 | Aug. 30, 2015 | |
Short-term Debt [Line Items] | ||
Line of credit facility, current borrowing capacity | $ 451 | $ 407 |
JAPAN | ||
Short-term Debt [Line Items] | ||
Short-term debt, maximum amount outstanding during period | 93 | |
Short-term debt, average outstanding amount | $ 67 | |
Short-term debt, weighted average interest rate | 0.55% | |
UNITED KINGDOM | ||
Short-term Debt [Line Items] | ||
Short-term debt, maximum amount outstanding during period | $ 18 | |
Short-term debt, average outstanding amount | $ 7 | |
Short-term debt, weighted average interest rate | 1.54% |
Debt (Schedule Of Long-Term Deb
Debt (Schedule Of Long-Term Debt Maturities) (Detail) (Details) - USD ($) $ in Millions | Aug. 30, 2015 | Aug. 31, 2014 |
Debt Disclosure [Abstract] | ||
2,016 | $ 1,283 | |
2,017 | 1,100 | |
2,018 | 1,178 | |
2,019 | 83 | |
2,020 | 1,698 | |
Thereafter | 805 | |
Total long-term debt, carrying value | $ 6,147 | $ 5,093 |
Debt (Additional Information) (
Debt (Additional Information) (Detail) - USD ($) $ in Millions | 12 Months Ended | ||||
Aug. 30, 2015 | May. 21, 2015 | Feb. 17, 2015 | Dec. 07, 2012 | Feb. 28, 2007 | |
5.5% Senior Notes due March 2017 | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, face amount | $ 1,100 | ||||
Debt instrument, interest rate, stated percentage | 5.50% | ||||
Debt instrument, maturity date | Mar. 15, 2017 | ||||
Debt instrument, frequency of periodic payment | Interest is payable semi-annually | ||||
Redemption price company option | 100.00% | ||||
Redemption price certain events | 101.00% | ||||
Senior Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, face amount | $ 1,000 | $ 3,500 | |||
Redemption price company option | 100.00% | 100.00% | |||
Redemption price certain events | 101.00% | 101.00% | |||
0.65% Senior Notes due December 2015 | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, face amount | $ 1,200 | ||||
Debt instrument, interest rate, stated percentage | 0.65% | ||||
Debt instrument, maturity date | Dec. 7, 2015 | ||||
Debt instrument, frequency of periodic payment | Interest is payable semi-annually | ||||
1.125% Senior Notes due December 2017 | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, face amount | $ 1,100 | ||||
Debt instrument, interest rate, stated percentage | 1.125% | ||||
Debt instrument, maturity date | Dec. 15, 2017 | ||||
Debt instrument, frequency of periodic payment | Interest is payable semi-annually | ||||
1.7% Senior Notes due December 2019 | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, face amount | $ 1,200 | ||||
Debt instrument, interest rate, stated percentage | 1.70% | ||||
Debt instrument, maturity date | Dec. 15, 2019 | ||||
Debt instrument, frequency of periodic payment | Interest is payable semi-annually | ||||
1.75% Senior Notes due February 2020 | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, face amount | $ 500 | ||||
Debt instrument, interest rate, stated percentage | 1.75% | ||||
Debt instrument, maturity date | Feb. 15, 2020 | ||||
Debt instrument, frequency of periodic payment | Interest is due semi-annually on February 15 and August 15; the first payment was made on August 15, 2015 | ||||
2.25% Senior Notes due February 2022 | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, face amount | $ 500 | ||||
Debt instrument, interest rate, stated percentage | 2.25% | ||||
Debt instrument, maturity date | Feb. 15, 2022 | ||||
Debt instrument, frequency of periodic payment | Interest is due semi-annually on February 15 and August 15; the first payment was made on August 15, 2015 | ||||
0.79% Private Placement Notes due May 2025 | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, face amount | $ 125 | ||||
Debt instrument, interest rate, stated percentage | 0.79% | ||||
Debt instrument, maturity date | May 31, 2025 | ||||
Debt instrument, frequency of periodic payment | Interest is payable semi-annually |
Leases (Details)
Leases (Details) $ in Millions | Aug. 30, 2015USD ($) | |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||
2,016 | $ 187 | |
2,017 | 183 | |
2,018 | 176 | |
2,019 | 166 | |
2,020 | 155 | |
Thereafter | 2,097 | |
Total | 2,964 | |
Capital Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||
2,016 | 24 | [1] |
2,017 | 24 | [1] |
2,018 | 24 | [1] |
2,019 | 23 | [1] |
2,020 | 24 | [1] |
Thereafter | 452 | [1] |
Total | 571 | [1] |
Less amount representing interest | (275) | [1] |
Net present value of minimum lease payments | 296 | [1] |
Less current installments | (10) | [1],[2] |
Long-term capital lease obligations less current installments | $ 286 | [1],[3] |
[1] | Includes build-to-suit lease obligations. | |
[2] | Included in other current liabilities in the accompanying consolidated balance sheets. | |
[3] | Included in deferred income taxes and other liabilities in the accompanying consolidated balance sheets. |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Aug. 30, 2015 | Aug. 31, 2014 | Sep. 01, 2013 | |
Leases [Abstract] | |||
Aggregate rental expense | $ 252 | $ 230 | $ 225 |
Gross assets under capital leases | 300 | 200 | |
Accumulated amortization | 42 | $ 35 | |
Sub-lease income | $ 131 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - USD ($) | 3 Months Ended | 4 Months Ended | 12 Months Ended | ||||||||||
May. 10, 2015 | Feb. 15, 2015 | [1] | Nov. 23, 2014 | May. 11, 2014 | Feb. 16, 2014 | Nov. 24, 2013 | Aug. 30, 2015 | Aug. 31, 2014 | Aug. 30, 2015 | Aug. 31, 2014 | Sep. 01, 2013 | Apr. 17, 2015 | |
Equity And Comprehensive Income [Line Items] | |||||||||||||
Dividends declared | $ 0.40 | $ 5.355 | $ 0.355 | $ 0.355 | $ 0.31 | $ 0.31 | $ 0.40 | $ 0.355 | $ 6.51 | $ 1.33 | $ 8.17 | ||
Payment of dividends | $ 2,865,000,000 | $ 584,000,000 | $ 3,560,000,000 | ||||||||||
Stock repurchase program, authorized amount | $ 4,000,000,000 | ||||||||||||
Previously authorized but unused share repurchase amounts revoked | $ 2,528,000,000 | ||||||||||||
Stock repurchased during period, value | $ 494,000,000 | $ 334,000,000 | $ 34,000,000 | ||||||||||
Special Dividend [Member] | |||||||||||||
Equity And Comprehensive Income [Line Items] | |||||||||||||
Dividends paid per share | $ 5 | $ 7 | |||||||||||
Payment of dividends | $ 2,201,000,000 | ||||||||||||
April 2015 Stock Repurchase Program [Member] | |||||||||||||
Equity And Comprehensive Income [Line Items] | |||||||||||||
Stock repurchased during period, value | $ 301,000,000 | ||||||||||||
[1] | Includes the special cash dividend of $5.00 per share paid in February 2015. |
Stockholders' Equity (Stock Rep
Stockholders' Equity (Stock Repurchased During Period) (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | ||
Aug. 30, 2015 | Aug. 31, 2014 | Sep. 01, 2013 | |
Stockholders' Equity Note [Abstract] | |||
Shares repurchased (000's) | 3,456 | 2,915 | 357 |
Average price per share | $ 142.87 | $ 114.45 | $ 96.41 |
Total cost | $ 494 | $ 334 | $ 34 |
Stock-Based Compensation Plan49
Stock-Based Compensation Plans - Additional Information (Detail) $ / shares in Units, $ in Millions | 12 Months Ended | |||
Aug. 30, 2015USD ($)shares$ / shares | Aug. 31, 2014$ / sharesshares | Sep. 01, 2013$ / shares | Feb. 09, 2015shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of stock options outstanding | 410,000 | |||
Number of RSUs outstanding | 9,233,000 | 9,117,000 | 8,956,000 | |
Weighted-average grant date fair value | $ / shares | $ 125.68 | |||
Restricted Stock Units (RSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Additional number of shares authorized | 13,429,000 | |||
Additional shares available to be granted | 750,000 | |||
Number of shares available to be granted as RSUs | 18,308,000 | |||
Time-based RSUs awards outstanding | 8,698,000 | |||
Performance-based RSUs awards outstanding | 535,000 | |||
Outstanding performance-based RSUs awards to be granted | 281,000 | |||
Weighted-average grant date fair value | $ / shares | $ 125.68 | $ 113.64 | $ 90.99 | |
Unrecognized compensation cost | $ | $ 640 | |||
Weighted-average recognition period | 1 year 8 months | |||
RSUs vested, but not yet delivered (shares) | 2,811,000 | |||
Seventh Restated 2002 Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Portion of each share issued counted towards limit of shares available | 1.75 | |||
Additional number of shares authorized | 23,500,000 | |||
Employees [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation arrangement by share-based payment award, award vesting period | 5 years | |||
Share-based compensation arrangement by share-based payment number of years of service | 25 years | |||
Non Employee Directors [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation arrangement by share-based payment award, award vesting period | 3 years | |||
Share-based compensation arrangement by share-based payment number of years of service | 5 years |
Stock-Based Compensation Plan50
Stock-Based Compensation Plans - Summary of RSU Transactions (Details) shares in Thousands | 12 Months Ended |
Aug. 30, 2015$ / sharesshares | |
Number of units | |
Outstanding at the end of 2014 | 9,117 |
Granted | 4,017 |
Vested and delivered | (4,103) |
Forfeited | (174) |
Special cash dividend | 376 |
Outstanding at the end of 2015 | 9,233 |
Weighted average grant date fair value | |
Outstanding at the end of 2014 | $ / shares | $ 86.92 |
Granted | $ / shares | 125.68 |
Vested and delivered | $ / shares | 87.33 |
Forfeited | $ / shares | 102.09 |
Outstanding at the end of 2015 | $ / shares | $ 99.72 |
Stock-Based Compensation Plan51
Stock-Based Compensation Plans - Summary of Stock-Based Compensation Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Aug. 30, 2015 | Aug. 31, 2014 | Sep. 01, 2013 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Total stock-based compensation expense before income taxes | $ 394 | $ 327 | $ 285 |
Less recognized income tax benefit | (131) | (109) | (94) |
Total stock-based compensation expense, net of income taxes | $ 263 | $ 218 | $ 191 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Aug. 30, 2015 | Aug. 31, 2014 | Sep. 01, 2013 | |
Income Taxes [Line Items] | |||
Income tax benefits allocated directly to equity | $ 86 | $ 84 | $ 59 |
Deferred tax assets, net of valuation allowance, current | 521 | 448 | |
Deferred tax assets, net of valuation allowance, noncurrent | 109 | 68 | |
Deferred tax liabilities, net, noncurrent | 462 | 429 | |
Deferred tax assets, tax credit carryforwards, foreign | 33 | ||
Deferred tax liabilities, undistributed foreign earnings | 2,845 | 3,619 | |
Tax positions uncertain timing of such deductibility | 50 | 38 | |
Unrecognized tax positions in other assets | 48 | ||
Unrecognized tax benefits that would impact effective tax rate | 98 | $ 47 | |
Special Dividend [Member] | |||
Income Taxes [Line Items] | |||
Effective income tax rate reconciliation, deduction, dividends, amount | $ 57 | $ 62 | |
Dividends paid per share | $ 5 | $ 7 | |
Employee stock ownership plan (ESOP), shares in ESOP | 29 | 22.6 |
Income Taxes (Income Before Inc
Income Taxes (Income Before Income Taxes) (Detail) (Details) - USD ($) $ in Millions | 3 Months Ended | 4 Months Ended | 12 Months Ended | ||||||||
May. 10, 2015 | Feb. 15, 2015 | Nov. 23, 2014 | May. 11, 2014 | Feb. 16, 2014 | Nov. 24, 2013 | Aug. 30, 2015 | Aug. 31, 2014 | Aug. 30, 2015 | Aug. 31, 2014 | Sep. 01, 2013 | |
Income Tax Disclosure [Abstract] | |||||||||||
Domestic (including Puerto Rico) | $ 2,574 | $ 2,145 | $ 2,070 | ||||||||
Foreign | 1,030 | 1,052 | 981 | ||||||||
INCOME BEFORE INCOME TAXES | $ 799 | $ 870 | $ 779 | $ 724 | $ 728 | $ 659 | $ 1,156 | $ 1,086 | $ 3,604 | $ 3,197 | $ 3,051 |
Income Taxes (Schedule of Forei
Income Taxes (Schedule of Foreign And Domestic Income Taxes) (Detail) (Details) - USD ($) $ in Millions | 3 Months Ended | 4 Months Ended | 12 Months Ended | |||||||||
May. 10, 2015 | Feb. 15, 2015 | [1] | Nov. 23, 2014 | May. 11, 2014 | Feb. 16, 2014 | Nov. 24, 2013 | Aug. 30, 2015 | Aug. 31, 2014 | Aug. 30, 2015 | Aug. 31, 2014 | Sep. 01, 2013 | |
Federal [Abstract] | ||||||||||||
Current | $ 766 | $ 696 | $ 572 | |||||||||
Deferred | (12) | (105) | 16 | |||||||||
Total federal | 754 | 591 | 588 | |||||||||
State [Abstract] | ||||||||||||
Current | 131 | 107 | 109 | |||||||||
Deferred | 1 | (3) | 4 | |||||||||
Total state | 132 | 104 | 113 | |||||||||
Foreign [Abstract] | ||||||||||||
Current | 399 | 369 | 302 | |||||||||
Deferred | (90) | 45 | (13) | |||||||||
Total foreign | 309 | 414 | 289 | |||||||||
Total provision for income taxes | $ 280 | $ 263 | $ 274 | $ 245 | $ 255 | $ 228 | $ 378 | $ 381 | $ 1,195 | $ 1,109 | $ 990 | |
[1] | Includes a $57 tax benefit recorded in the second quarter in connection with the special cash dividend paid to employees through the Company's 401(k) Retirement Plan. |
Income Taxes (Reconciliation Be
Income Taxes (Reconciliation Between Statutory And Effective Rates) (Detail) (Details) - USD ($) $ in Millions | 3 Months Ended | 4 Months Ended | 12 Months Ended | |||||||||
May. 10, 2015 | Feb. 15, 2015 | [1] | Nov. 23, 2014 | May. 11, 2014 | Feb. 16, 2014 | Nov. 24, 2013 | Aug. 30, 2015 | Aug. 31, 2014 | Aug. 30, 2015 | Aug. 31, 2014 | Sep. 01, 2013 | |
Income Tax Disclosure [Abstract] | ||||||||||||
Federal taxes at statutory rate | $ 1,262 | $ 1,119 | $ 1,068 | |||||||||
Federal taxes at statutory rate (percent) | 35.00% | 35.00% | 35.00% | |||||||||
State taxes, net | $ 85 | $ 66 | $ 66 | |||||||||
State taxes, net (percent) | 2.30% | 2.10% | 2.10% | |||||||||
Foreign taxes, net | $ (125) | $ (85) | $ (87) | |||||||||
Foreign taxes, net (percent) | (3.50%) | (2.70%) | (2.80%) | |||||||||
Effective income tax rate reconciliation, deduction, employee stock ownership plan dividend, amount | $ (66) | $ (11) | $ (65) | |||||||||
Effective income tax rate reconciliation, deduction, employee stock ownership plan dividend, percent | (1.80%) | (0.30%) | (2.10%) | |||||||||
Other | $ 39 | $ 20 | $ 8 | |||||||||
Other (percent) | 1.20% | 0.60% | 0.20% | |||||||||
Total provision for income taxes | $ 280 | $ 263 | $ 274 | $ 245 | $ 255 | $ 228 | $ 378 | $ 381 | $ 1,195 | $ 1,109 | $ 990 | |
Total (percent) | 33.20% | 34.70% | 32.40% | |||||||||
[1] | Includes a $57 tax benefit recorded in the second quarter in connection with the special cash dividend paid to employees through the Company's 401(k) Retirement Plan. |
Income Taxes (Components of Def
Income Taxes (Components of Deferred Tax Assets And Liabilities) (Detail) (Details) - USD ($) $ in Millions | Aug. 30, 2015 | Aug. 31, 2014 |
Income Tax Disclosure [Abstract] | ||
Equity compensation | $ 90 | $ 85 |
Deferred income/membership fees | 90 | 98 |
Accrued liabilities and reserves | 641 | 607 |
Other | 107 | 19 |
Property and equipment | (560) | (529) |
Merchandise inventories | (200) | (193) |
Net deferred tax assets | $ 168 | $ 87 |
Income Taxes (Gross Unrecognize
Income Taxes (Gross Unrecognized Tax Benefits) (Detail) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Aug. 30, 2015 | Aug. 31, 2014 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Gross unrecognized tax benefit at beginning of year | $ 75 | $ 80 |
Gross increases—current year tax positions | 26 | 9 |
Gross increases—tax positions in prior years | 63 | 10 |
Gross decreases—tax positions in prior years | (1) | (11) |
Settlements | (3) | (11) |
Lapse of statute of limitations | (2) | (2) |
Gross unrecognized tax benefit at end of year | $ 158 | $ 75 |
Net Income per Common and Com58
Net Income per Common and Common Equivalent Share - Schedule of Earnings per Share Effect on Net Income and Weighted Averegae Number of Dilutive Potential Common Stock (Details) - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 4 Months Ended | 12 Months Ended | ||||||||
May. 10, 2015 | Feb. 15, 2015 | Nov. 23, 2014 | May. 11, 2014 | Feb. 16, 2014 | Nov. 24, 2013 | Aug. 30, 2015 | Aug. 31, 2014 | Aug. 30, 2015 | Aug. 31, 2014 | Sep. 01, 2013 | |
Earnings Per Share [Abstract] | |||||||||||
Net income available to common stockholders after assumed conversion of dilutive securities | $ 2,377 | $ 2,058 | $ 2,039 | ||||||||
Weighted average number of common shares used in basic net income per common share | 440,070 | 440,384 | 438,760 | 439,446 | 439,776 | 437,970 | 438,835 | 437,875 | 439,455 | 438,693 | 435,741 |
RSUs | 3,249 | 3,771 | 4,552 | ||||||||
Conversion of convertible notes | 12 | 21 | 219 | ||||||||
Weighted average number of common shares and dilutive potential of common stock used in diluted net income per share | 443,132 | 442,896 | 442,210 | 442,720 | 442,829 | 442,420 | 442,404 | 441,887 | 442,716 | 442,485 | 440,512 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) $ in Millions | 12 Months Ended |
Aug. 30, 2015USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Damages sought | $ 10 |
Segment Reporting Information b
Segment Reporting Information by Segment (Detail) - USD ($) $ in Millions | 3 Months Ended | 4 Months Ended | 12 Months Ended | ||||||||
May. 10, 2015 | Feb. 15, 2015 | Nov. 23, 2014 | May. 11, 2014 | Feb. 16, 2014 | Nov. 24, 2013 | Aug. 30, 2015 | Aug. 31, 2014 | Aug. 30, 2015 | Aug. 31, 2014 | Sep. 01, 2013 | |
Segment Reporting Information [Line Items] | |||||||||||
Total revenue | $ 26,101 | $ 27,454 | $ 26,866 | $ 25,794 | $ 26,306 | $ 25,017 | $ 35,778 | $ 35,523 | $ 116,199 | $ 112,640 | $ 105,156 |
Operating income | $ 821 | $ 877 | $ 770 | $ 737 | $ 724 | $ 668 | 1,156 | 1,091 | 3,624 | 3,220 | 3,053 |
Depreciation and amortization | 1,127 | 1,029 | 946 | ||||||||
Additions to property and equipment | 2,393 | 1,993 | 2,083 | ||||||||
Net property and equipment | 15,401 | 14,830 | 15,401 | 14,830 | 13,881 | ||||||
Total assets | 33,440 | 33,024 | 33,440 | 33,024 | 30,283 | ||||||
Operating Segments [Member] | United States Operations | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenue | 84,351 | 80,477 | 75,493 | ||||||||
Operating income | 2,308 | 1,880 | 1,810 | ||||||||
Depreciation and amortization | 848 | 755 | 696 | ||||||||
Additions to property and equipment | 1,574 | 1,245 | 1,090 | ||||||||
Net property and equipment | 10,815 | 10,132 | 10,815 | 10,132 | 9,652 | ||||||
Total assets | 23,397 | 21,929 | 23,397 | 21,929 | 20,608 | ||||||
Operating Segments [Member] | Canadian Operations | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenue | 17,341 | 17,943 | 17,179 | ||||||||
Operating income | 771 | 796 | 756 | ||||||||
Depreciation and amortization | 119 | 124 | 123 | ||||||||
Additions to property and equipment | 148 | 204 | 186 | ||||||||
Net property and equipment | 1,381 | 1,662 | 1,381 | 1,662 | 1,621 | ||||||
Total assets | 3,608 | 4,892 | 3,608 | 4,892 | 4,529 | ||||||
Operating Segments [Member] | Other International Operations | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenue | 14,507 | 14,220 | 12,484 | ||||||||
Operating income | 545 | 544 | 487 | ||||||||
Depreciation and amortization | 160 | 150 | 127 | ||||||||
Additions to property and equipment | 671 | 544 | 807 | ||||||||
Net property and equipment | 3,205 | 3,036 | 3,205 | 3,036 | 2,608 | ||||||
Total assets | $ 6,435 | $ 6,203 | $ 6,435 | $ 6,203 | $ 5,146 |
Segment Reporting Information61
Segment Reporting Information by Item Category (Detail) | 12 Months Ended | ||
Aug. 30, 2015 | Aug. 31, 2014 | Sep. 01, 2013 | |
Foods | |||
Revenue from External Customer [Line Items] | |||
Percentage of net sales | 22.00% | 22.00% | 21.00% |
Sundries | |||
Revenue from External Customer [Line Items] | |||
Percentage of net sales | 21.00% | 21.00% | 22.00% |
Hardlines | |||
Revenue from External Customer [Line Items] | |||
Percentage of net sales | 16.00% | 16.00% | 16.00% |
Fresh Foods | |||
Revenue from External Customer [Line Items] | |||
Percentage of net sales | 14.00% | 13.00% | 13.00% |
Softlines | |||
Revenue from External Customer [Line Items] | |||
Percentage of net sales | 11.00% | 11.00% | 11.00% |
Ancillary and Other | |||
Revenue from External Customer [Line Items] | |||
Percentage of net sales | 16.00% | 17.00% | 17.00% |
Quarterly Financial Data (Detai
Quarterly Financial Data (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 4 Months Ended | 12 Months Ended | |||||||||
May. 10, 2015 | Feb. 15, 2015 | Nov. 23, 2014 | May. 11, 2014 | Feb. 16, 2014 | Nov. 24, 2013 | Aug. 30, 2015 | Aug. 31, 2014 | Aug. 30, 2015 | Aug. 31, 2014 | Sep. 01, 2013 | ||
REVENUE | ||||||||||||
Net sales | $ 25,517 | $ 26,872 | $ 26,284 | $ 25,233 | $ 25,756 | $ 24,468 | $ 34,993 | $ 34,755 | $ 113,666 | $ 110,212 | $ 102,870 | |
Membership fees | 584 | 582 | 582 | 561 | 550 | 549 | 785 | 768 | 2,533 | 2,428 | 2,286 | |
Total revenue | 26,101 | 27,454 | 26,866 | 25,794 | 26,306 | 25,017 | 35,778 | 35,523 | 116,199 | 112,640 | 105,156 | |
OPERATING EXPENSES | ||||||||||||
Merchandise costs | 22,687 | 23,897 | 23,385 | 22,554 | 23,043 | 21,824 | 31,096 | 31,037 | 101,065 | 98,458 | 91,948 | |
Selling, general and administrative | 2,579 | 2,671 | 2,696 | 2,487 | 2,531 | 2,501 | 3,499 | 3,380 | 11,445 | 10,899 | 10,104 | |
Preopening expenses | 14 | 9 | 15 | 16 | 8 | 24 | 27 | 15 | 65 | 63 | 51 | |
Operating income | 821 | 877 | 770 | 737 | 724 | 668 | 1,156 | 1,091 | 3,624 | 3,220 | 3,053 | |
OTHER INCOME (EXPENSE) | ||||||||||||
Interest expense | (31) | (27) | (26) | (25) | (26) | (27) | (40) | (35) | (124) | (113) | (99) | |
Interest income and other, net | 9 | 20 | 35 | 12 | 30 | 18 | 40 | 30 | 104 | 90 | 97 | |
INCOME BEFORE INCOME TAXES | 799 | 870 | 779 | 724 | 728 | 659 | 1,156 | 1,086 | 3,604 | 3,197 | 3,051 | |
Provision for income taxes | 280 | 263 | [1] | 274 | 245 | 255 | 228 | 378 | 381 | 1,195 | 1,109 | 990 |
Net income including noncontrolling interests | 519 | 607 | 505 | 479 | 473 | 431 | 778 | 705 | 2,409 | 2,088 | 2,061 | |
Net income attributable to noncontrolling interests | (3) | (9) | (9) | (6) | (10) | (6) | (11) | (8) | (32) | (30) | (22) | |
NET INCOME ATTRIBUTABLE TO COSTCO | $ 516 | $ 598 | $ 496 | $ 473 | $ 463 | $ 425 | $ 767 | $ 697 | $ 2,377 | $ 2,058 | $ 2,039 | |
NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO: | ||||||||||||
Basic | $ 1.17 | $ 1.36 | $ 1.13 | $ 1.08 | $ 1.05 | $ 0.97 | $ 1.75 | $ 1.59 | $ 5.41 | $ 4.69 | $ 4.68 | |
Diluted | $ 1.17 | $ 1.35 | $ 1.12 | $ 1.07 | $ 1.05 | $ 0.96 | $ 1.73 | $ 1.58 | $ 5.37 | $ 4.65 | $ 4.63 | |
Shares used in calculation (000's) | ||||||||||||
Basic (shares) | 440,070 | 440,384 | 438,760 | 439,446 | 439,776 | 437,970 | 438,835 | 437,875 | 439,455 | 438,693 | 435,741 | |
Diluted (shares) | 443,132 | 442,896 | 442,210 | 442,720 | 442,829 | 442,420 | 442,404 | 441,887 | 442,716 | 442,485 | 440,512 | |
CASH DIVIDENDS DECLARED PER COMMON SHARE | $ 0.40 | $ 5.355 | [2] | $ 0.355 | $ 0.355 | $ 0.31 | $ 0.31 | $ 0.40 | $ 0.355 | $ 6.51 | $ 1.33 | $ 8.17 |
Special Dividend [Member] | ||||||||||||
Quarterly Financial Data [Line Items] | ||||||||||||
Effective income tax rate reconciliation, deduction, dividends, amount | $ 57 | $ 62 | ||||||||||
Dividends paid per share | $ 5 | $ 7 | ||||||||||
[1] | Includes a $57 tax benefit recorded in the second quarter in connection with the special cash dividend paid to employees through the Company's 401(k) Retirement Plan. | |||||||||||
[2] | Includes the special cash dividend of $5.00 per share paid in February 2015. |