Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Sep. 01, 2013 | Oct. 09, 2013 | Feb. 17, 2013 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | FALSE | ||
Document Period End Date | 1-Sep-13 | ||
Document Fiscal Year Focus | 2013 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | COST | ||
Entity Registrant Name | COSTCO WHOLESALE CORP /NEW | ||
Entity Central Index Key | 909832 | ||
Current Fiscal Year End Date | 8 | ||
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 | 436,922,037 | ||
Entity Public Float | $44,218,428,626 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Sep. 01, 2013 | Sep. 02, 2012 |
In Millions, unless otherwise specified | ||
CURRENT ASSETS | ||
Cash and cash equivalents | $4,644 | $3,528 |
Short-term investments | 1,480 | 1,326 |
Receivables, net | 1,201 | 1,026 |
Merchandise inventories | 7,894 | 7,096 |
Deferred income taxes and other current assets | 621 | 550 |
Total current assets | 15,840 | 13,526 |
PROPERTY AND EQUIPMENT | ||
Land | 4,409 | 4,032 |
Buildings and improvements | 11,556 | 10,879 |
Equipment and fixtures | 4,472 | 4,261 |
Construction in progress | 585 | 374 |
Gross property and equipment | 21,022 | 19,546 |
Less accumulated depreciation and amortization | -7,141 | -6,585 |
Net property and equipment | 13,881 | 12,961 |
OTHER ASSETS | 562 | 653 |
TOTAL ASSETS | 30,283 | 27,140 |
CURRENT LIABILITIES | ||
Accounts payable | 7,872 | 7,303 |
Accrued salaries and benefits | 2,037 | 1,832 |
Accrued member rewards | 710 | 661 |
Accrued sales and other taxes | 382 | 397 |
Deferred membership fees | 1,167 | 1,101 |
Other current liabilities | 1,089 | 966 |
Total current liabilities | 13,257 | 12,260 |
LONG-TERM DEBT, excluding current portion | 4,998 | 1,381 |
DEFERRED INCOME TAXES AND OTHER LIABILITIES | 1,016 | 981 |
Total liabilities | 19,271 | 14,622 |
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; 436,839,000 and 432,350,000 shares issued and outstanding | 2 | 2 |
Additional paid-in capital | 4,670 | 4,369 |
Accumulated other comprehensive (loss) income | -122 | 156 |
Retained earnings | 6,283 | 7,834 |
Total Costco stockholders' equity | 10,833 | 12,361 |
Noncontrolling interests | 179 | 157 |
Total equity | 11,012 | 12,518 |
TOTAL LIABILITIES AND EQUITY | $30,283 | $27,140 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 01, 2013 | Sep. 02, 2012 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $0.01 | $0.01 |
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) | $0.01 | $0.01 |
Common stock, shares authorized | 900,000,000 | 900,000,000 |
Common stock, shares issued | 436,839,000 | 432,350,000 |
Common stock, shares outstanding | 436,839,000 | 432,350,000 |
Consolidated_Statements_Of_Inc
Consolidated Statements Of Income (USD $) | 3 Months Ended | 4 Months Ended | 12 Months Ended | ||||||||||||
In Millions, except Share data in Thousands, unless otherwise specified | 12-May-13 | Feb. 17, 2013 | Nov. 25, 2012 | 6-May-12 | Feb. 12, 2012 | Nov. 20, 2011 | Sep. 01, 2013 | Sep. 02, 2012 | Sep. 01, 2013 | Sep. 02, 2012 | Aug. 28, 2011 | ||||
REVENUE | |||||||||||||||
Net sales | $23,552 | $24,343 | $23,204 | $21,849 | $22,508 | $21,181 | $31,771 | $31,524 | $102,870 | $97,062 | $87,048 | ||||
Membership fees | 531 | 528 | 511 | 475 | 459 | 447 | 716 | 694 | 2,286 | 2,075 | 1,867 | ||||
Total revenue | 24,083 | 24,871 | 23,715 | 22,324 | 22,967 | 21,628 | 32,487 | 32,218 | 105,156 | 99,137 | 88,915 | ||||
OPERATING EXPENSES | |||||||||||||||
Merchandise costs | 21,038 | 21,766 | 20,726 | 19,543 | 20,139 | 18,931 | 28,418 | 28,210 | 91,948 | 86,823 | 77,739 | ||||
Selling, general and administrative | 2,313 | 2,361 | 2,332 | 2,152 | 2,178 | 2,144 | [1] | 3,098 | 3,044 | 10,104 | 9,518 | 8,691 | |||
Preopening expenses | 10 | 6 | 18 | 6 | 6 | 10 | 17 | 15 | 51 | 37 | 46 | ||||
Operating income | 722 | 738 | 639 | 623 | 644 | 543 | 954 | 949 | 3,053 | 2,759 | 2,439 | ||||
OTHER INCOME (EXPENSE) | |||||||||||||||
Interest expense | -25 | -25 | -13 | -19 | -27 | -27 | -36 | -22 | -99 | -95 | -116 | ||||
Interest income and other, net | 15 | 26 | 20 | 18 | 10 | 37 | 36 | 38 | 97 | 103 | 60 | ||||
INCOME BEFORE INCOME TAXES | 712 | 739 | 646 | 622 | 627 | 553 | 954 | 965 | 3,051 | 2,767 | 2,383 | ||||
Provision for income taxes | 248 | 185 | [2] | 225 | 217 | 215 | 225 | [3] | 332 | 343 | 990 | 1,000 | 841 | ||
Net income including noncontrolling interests | 464 | 554 | 421 | 405 | 412 | 328 | 622 | 622 | 2,061 | 1,767 | 1,542 | ||||
Net income attributable to noncontrolling interests | -5 | -7 | -5 | -19 | -18 | -8 | -5 | -13 | -22 | -58 | -80 | ||||
NET INCOME ATTRIBUTABLE TO COSTCO | $459 | $547 | $416 | $386 | $394 | $320 | $617 | $609 | $2,039 | $1,709 | $1,462 | ||||
NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO: | |||||||||||||||
Basic (in dollars per share) | $1.05 | $1.26 | $0.96 | $0.89 | $0.91 | $0.74 | $1.41 | $1.41 | $4.68 | $3.94 | $3.35 | ||||
Diluted (in dollars per share) | $1.04 | $1.24 | $0.95 | $0.88 | $0.90 | $0.73 | $1.40 | $1.39 | $4.63 | $3.89 | $3.30 | ||||
Shares used in calculation (000's) | |||||||||||||||
Basic (shares) | 436,488 | 435,975 | 433,423 | 433,791 | 434,535 | 434,222 | 436,752 | 432,437 | 435,741 | 433,620 | 436,119 | ||||
Diluted (shares) | 440,780 | 439,812 | 438,643 | 439,166 | 439,468 | 440,615 | 441,907 | 438,344 | 440,512 | 439,373 | 443,094 | ||||
CASH DIVIDENDS DECLARED PER COMMON SHARE | $0.31 | $7.28 | [4] | $0.28 | $0 | [5] | $0.24 | $0.24 | $0.31 | $0.55 | [6] | $8.17 | $1.03 | $0.89 | |
[1] | Includes a $17 charge to selling, general and administrative for contributions to an initiative reforming alcohol beverage laws in Washington State. | ||||||||||||||
[2] | Includes a $62 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. | ||||||||||||||
[3] | Includes a $24 charge relating to the settlement of an income tax audit in Mexico. | ||||||||||||||
[4] | Includes the special cash dividend of $7.00 per share paid in December 2012. | ||||||||||||||
[5] | On MayB 9, 2012, subsequent to the end of the third quarter of 2012, the Board of Directors declared a quarterly cash dividend of $0.275 per share. | ||||||||||||||
[6] | The quarterly dividend rate was $0.275 per share. |
Consolidated_Statements_Of_Com
Consolidated Statements Of Comprehensive Income (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Sep. 01, 2013 | Sep. 02, 2012 | Aug. 28, 2011 |
Statement of Comprehensive Income [Abstract] | |||
NET INCOME INCLUDING NONCONTROLLING INTERESTS | $2,061 | $1,767 | $1,542 |
Foreign-currency translation adjustment and other, net | -278 | -96 | 275 |
Comprehensive income | 1,783 | 1,671 | 1,817 |
Less: Comprehensive income attributable to noncontrolling interests | 22 | 24 | 104 |
COMPREHENSIVE INCOME ATTRIBUTABLE TO COSTCO | $1,761 | $1,647 | $1,713 |
Consolidated_Statements_of_Equ
Consolidated Statements of Equity (USD $) | Total | Total Costco Stockholders' Equity [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Income (Loss) | Retained Earnings [Member] | Noncontrolling Interests |
In Millions, except Share data, unless otherwise specified | |||||||
Equity at beginning of period at Aug. 29, 2010 | $10,930 | $10,829 | $2 | $4,115 | $122 | $6,590 | $101 |
Common stock at beginning of period (shares) at Aug. 29, 2010 | 433,510,000 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Initial consolidation of noncontrolling interest in Costco Mexico | 357 | 0 | 357 | ||||
Net income | 1,542 | 1,462 | 1,462 | 80 | |||
Foreign-currency translation adjustment and other, net | 275 | 251 | 251 | 24 | |||
Stock-based compensation | 207 | 207 | 207 | ||||
Stock options exercised, including tax effects (shares) | 7,245,000 | ||||||
Stock options exercised, including tax effects | 332 | 332 | 0 | 332 | |||
Release of vested RSUs, including tax effects (shares) | 2,385,000 | ||||||
Release of vested RSUs, including tax effects | -51 | -51 | 0 | -51 | |||
Conversion of convertible notes (shares) | 65,000 | ||||||
Conversion of convertible notes | 2 | 2 | 0 | 2 | |||
Repurchased of common stock (shares) | -8,939,000 | -8,939,000 | |||||
Repurchases of common stock | -641 | -641 | 0 | -89 | -552 | ||
Cash dividends declared | -389 | -389 | -389 | ||||
Investment by noncontrolling interest | 9 | 9 | |||||
Equity at end of period at Aug. 28, 2011 | 12,573 | 12,002 | 2 | 4,516 | 373 | 7,111 | 571 |
Common stock at end of period (shares) at Aug. 28, 2011 | 434,266,000 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 1,767 | 1,709 | 1,709 | 58 | |||
Foreign-currency translation adjustment and other, net | -96 | -62 | -62 | -34 | |||
Stock-based compensation | 241 | 241 | 241 | ||||
Stock options exercised, including tax effects (shares) | 2,756,000 | ||||||
Stock options exercised, including tax effects | 142 | 142 | 0 | 142 | |||
Release of vested RSUs, including tax effects (shares) | 2,554,000 | ||||||
Release of vested RSUs, including tax effects | -76 | -76 | 0 | -76 | |||
Conversion of convertible notes (shares) | 46,000 | ||||||
Conversion of convertible notes | 2 | 2 | 0 | 2 | |||
Repurchased of common stock (shares) | -7,272,000 | -7,272,000 | |||||
Repurchases of common stock | -617 | -617 | 0 | -77 | -540 | ||
Cash dividends declared | -446 | -446 | -446 | ||||
Distributions to noncontrolling interest | -183 | -183 | |||||
Purchase of noncontrolling interest in Costco Mexico | -789 | -534 | -379 | -155 | -255 | ||
Equity at end of period at Sep. 02, 2012 | 12,518 | 12,361 | 2 | 4,369 | 156 | 7,834 | 157 |
Common stock at end of period (shares) at Sep. 02, 2012 | 432,350,000 | 432,350,000 | |||||
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) | 1,435,000 | 1,435,000 | |||||
Stock options exercised, including tax effects | 75 | 75 | 0 | 75 | |||
Release of vested RSUs, including tax effects (shares) | 2,609,000 | ||||||
Release of vested RSUs, including tax effects | -85 | -85 | 0 | -85 | |||
Conversion of convertible notes (shares) | 802,000 | ||||||
Conversion of convertible notes | 30 | 30 | 0 | 30 | |||
Repurchased of common stock (shares) | -357,000 | -357,000 | |||||
Repurchases of common stock | -34 | -34 | 0 | -4 | -30 | ||
Cash dividends declared | -3,560 | -3,560 | -3,560 | ||||
Equity at end of period at Sep. 01, 2013 | $11,012 | $10,833 | $2 | $4,670 | ($122) | $6,283 | $179 |
Common stock at end of period (shares) at Sep. 01, 2013 | 436,839,000 | 436,839,000 |
Consolidated_Statements_Of_Cas
Consolidated Statements Of Cash Flows (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Sep. 01, 2013 | Sep. 02, 2012 | Aug. 28, 2011 |
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net income including noncontrolling interests | $2,061 | $1,767 | $1,542 |
Adjustments to reconcile net income including noncontrolling interests to net cash provided by operating activities: | |||
Depreciation and amortization | 946 | 908 | 855 |
Stock-based compensation | 285 | 241 | 207 |
Excess tax benefits on stock-based awards | -61 | -64 | -45 |
Other non-cash operating activities, net | -7 | 28 | 23 |
Deferred income taxes | 7 | -3 | 84 |
Changes in operating assets and liabilities, net of the initial consolidation of Costco Mexico at the beginning of fiscal 2011: | |||
Increase in merchandise inventories | -898 | -490 | -642 |
Increase in accounts payable | 718 | 338 | 804 |
Other operating assets and liabilities, net | 386 | 332 | 370 |
Net cash provided by operating activities | 3,437 | 3,057 | 3,198 |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Purchases of short-term investments | -2,572 | -2,048 | -3,276 |
Maturities of short-term investments | 2,141 | 1,821 | 2,614 |
Sales of investments | 244 | 482 | 602 |
Additions to property and equipment | -2,083 | -1,480 | -1,290 |
Increase resulting from initial consolidation of Costco Mexico | 0 | 0 | 165 |
Other investing activities, net | 19 | -11 | 5 |
Net cash used in investing activities | -2,251 | -1,236 | -1,180 |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Change in bank checks outstanding | -70 | 457 | -514 |
Repayments of short-term borrowings | -287 | -114 | -105 |
Proceeds from short-term borrowings | 326 | 114 | 79 |
Proceeds from issuance of long-term debt | 3,717 | 130 | 0 |
Repayments of long-term debt | 0 | -900 | 0 |
(Distribution to) investment by noncontrolling interests | -22 | -161 | 9 |
Proceeds from exercise of stock options | 52 | 109 | 285 |
Minimum tax withholdings on stock-based awards | -121 | -107 | -61 |
Excess tax benefits on stock-based awards | 61 | 64 | 45 |
Repurchases of common stock | -36 | -632 | -624 |
Cash dividend payments | -3,560 | -446 | -389 |
Purchase of noncontrolling interest in Costco Mexico | 0 | -789 | 0 |
Other financing activities, net | -16 | -6 | -2 |
Net cash provided by (used in) financing activities | 44 | -2,281 | -1,277 |
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | -114 | -21 | 54 |
Net increase (decrease) in cash and cash equivalents | 1,116 | -481 | 795 |
CASH AND CASH EQUIVALENTS BEGINNING OF YEAR | 3,528 | 4,009 | 3,214 |
CASH AND CASH EQUIVALENTS END OF PERIOD | 4,644 | 3,528 | 4,009 |
Cash paid during the first thirty-six weeks of year for: | |||
Interest (reduced by $12, $10 and $9 interest capitalized in 2013, 2012 and 2011, respectively) | 86 | 112 | 111 |
Income taxes | 1,001 | 956 | 742 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | |||
Increase in accrued property and equipment | 40 | 0 | 0 |
Property acquired under capital lease | 11 | 18 | 0 |
Unsettled repurchases of common stock | 0 | 2 | 17 |
Cash dividend declared, but not yet paid | 0 | 22 | 0 |
Common stock issued upon conversion of 3.5% Zero Coupon Convertible Subordinated Notes | $30 | $2 | $2 |
Consolidated_Statements_Of_Cas1
Consolidated Statements Of Cash Flows (Parenthetical) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Sep. 01, 2013 | Sep. 02, 2012 | Aug. 28, 2011 |
Statement of Cash Flows [Abstract] | |||
Interest, interest capitalized | $12 | $10 | $9 |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | |||||||||||
Sep. 01, 2013 | ||||||||||||
Accounting Policies [Abstract] | ||||||||||||
Summary of Significant Policies | 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 select private-label products in a wide range of merchandise categories will produce high sales volumes and rapid inventory turnover. At September 1, 2013, Costco operated 634 warehouses worldwide: 451 United States (U.S.) locations (in 41 U.S. states, Washington, D.C., and Puerto Rico), 85 Canadian locations, 33 Mexico locations, 25 United Kingdom (U.K.) locations, 18 Japan locations, 10 Taiwan locations, 9 Korea locations, and 3 Australia locations. The Company's online business operates websites in the U.S., Canada, and the U.K. | ||||||||||||
Basis of Presentation | ||||||||||||
The consolidated financial statements include the accounts of Costco Wholesale Corporation, its wholly-owned subsidiaries, subsidiaries in which it has a controlling interest, consolidated entities in which it has made equity investments, or has other interests through which it has majority-voting control or it exercises the right to direct the activities that most significantly impact the entity’s performance. 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 and other consolidated entities have been eliminated in consolidation. In July 2012, Costco purchased its former joint venture partner’s 50% equity interest in Costco Mexico. The Company’s net income excludes income attributable to noncontrolling interests in its operations in Mexico prior to the July 2012 acquisition of the 50% noncontrolling interest, Taiwan, and Korea. Subsequent to the acquisition date, 100% of Mexico’s operations are included in “net income attributable to Costco.” Unless otherwise noted, references to net income relate to net income attributable to Costco. | ||||||||||||
In 2011 and prior to the July 2012 acquisition of the 50% noncontrolling interest in Mexico, the financial position and results of Mexico’s operations were fully consolidated, and the joint venture partner’s share was included in “net income attributable to noncontrolling interests” due to the adoption of a new accounting standard. The initial consolidation of Mexico increased total assets, liabilities, and revenue by approximately 3%, with no impact on net income or net income per common share attributable to Costco. The Company’s equity method investment in Mexico as of August 29, 2010 was derecognized and the noncontrolling interest in Mexico totaling $357 was recognized as part of the initial consolidation of the joint venture on August 30, 2010 as shown in the accompanying consolidated statements of equity. | ||||||||||||
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 2013 relate to the 52-week fiscal year ended September 1, 2013. References to 2012 and 2011 relate to the 53-week and 52-week fiscal years ended September 2, 2012 and August 28, 2011, 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. | ||||||||||||
Reclassifications | ||||||||||||
Certain reclassifications have been made to prior fiscal year amounts or balances to conform to the presentation in the current fiscal year. These reclassifications did not have a material impact on the Company’s previously reported consolidated financial statements. | ||||||||||||
Cash and Cash Equivalents | ||||||||||||
The Company considers as cash and cash equivalents all 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 $1,254 and $1,161 at the end of 2013 and 2012, 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 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. The majority of the Company’s investments are in debt securities. | ||||||||||||
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 (an exit price) 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 “consensus pricing,” using market prices from a variety of industry-standard independent data providers or pricing that considers various assumptions, including time value, yield curve, volatility factors, credit spreads, default rates, loss severity, current market and contractual prices for the underlying instruments or debt, broker and dealer quotes, as well as other relevant economic measures. All are observable in the market or can be derived principally from or corroborated by observable market data, for which the Company typically receives independent external valuation information. | ||||||||||||
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. | ||||||||||||
The Company’s current financial liabilities have fair values that approximate their carrying values. The Company’s 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 2013 and 2012: | ||||||||||||
2013 | 2012 | |||||||||||
Vendor receivables | $ | 581 | $ | 545 | ||||||||
Reinsurance receivables | 238 | 226 | ||||||||||
Receivables from governmental entities | 228 | 87 | ||||||||||
Third-party pharmacy receivables | 102 | 104 | ||||||||||
Other receivables, net | 52 | 64 | ||||||||||
Receivables, net | $ | 1,201 | $ | 1,026 | ||||||||
Vendor receivables include payments from vendors in the form of volume rebates or other purchase discounts that are evidenced by signed agreements and 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. Vendor receivable 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. Other consideration received from vendors is generally recorded as a reduction of merchandise costs upon completion of contractual milestones, terms of the related agreement, or by another systematic approach. | ||||||||||||
Reinsurance receivables are held by the Company’s wholly-owned captive insurance subsidiary. The receivable 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 on the consolidated balance sheets. Receivables from governmental entities largely consist of tax-related items. Third-party pharmacy receivables generally relate to amounts due from members’ insurance companies for the amount above their co-pay, which is collected at the point-of-sale. | ||||||||||||
Receivables are recorded net of an allowance for doubtful accounts. Management determines the allowance for doubtful accounts based on historical experience and application of the specific identification method. Write-offs of receivables were immaterial for fiscal years 2013, 2012, and 2011. | ||||||||||||
Merchandise Inventories | ||||||||||||
Merchandise inventories consist of the following at the end of 2013 and 2012: | ||||||||||||
2013 | 2012 | |||||||||||
United States (primarily LIFO) | $ | 5,560 | $ | 4,967 | ||||||||
Foreign (FIFO) | 2,334 | 2,129 | ||||||||||
Merchandise inventories | $ | 7,894 | $ | 7,096 | ||||||||
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. 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. The Company believes the LIFO method more fairly presents the results of operations by more closely matching current costs with current revenues. 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, when actual inflation rates and inventory levels have been determined. | ||||||||||||
Due to net deflationary trends in 2013, a benefit of $27 was recorded to merchandise costs, to reduce the cumulative LIFO valuation on merchandise inventories. Due to net inflationary trends in 2012 and 2011, merchandise inventories valued at LIFO were lower than FIFO, resulting in a charge to merchandise costs of $21 and $87, respectively. At the end of 2013 and 2012, the cumulative impact of the LIFO valuation on merchandise inventories was $81 and $108, 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 the results of the actual physical inventory counts, which generally occur in the second and fourth fiscal quarters of the fiscal year. 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 separated 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. | ||||||||||||
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 of an asset are capitalized. Assets that were removed during the remodel, refurbishment or improvement are retired. Assets classified as held for sale were not material at the end of 2013 or 2012. | ||||||||||||
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 occur that 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 group’s net 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 other valuation techniques. Impairment charges, included in selling, general and administrative expenses on the consolidated statements of income, in 2013, 2012, and 2011 were immaterial. | ||||||||||||
The Company capitalizes certain computer software and software development costs incurred in connection with 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. | ||||||||||||
Other Assets | ||||||||||||
Other assets consist of the following at the end of 2013 and 2012: | ||||||||||||
2013 | 2012 | |||||||||||
Prepaid rents, lease costs, and long-term deposits | $ | 236 | $ | 230 | ||||||||
Receivables from governmental entities | 128 | 225 | ||||||||||
Cash surrender value of life insurance | 74 | 76 | ||||||||||
Goodwill, net | 63 | 66 | ||||||||||
Other | 61 | 56 | ||||||||||
Other Assets | $ | 562 | $ | 653 | ||||||||
Receivables from governmental entities largely consists of various tax-related items including amounts deposited with taxing authorities in connection with ongoing income tax audits and non-current deferred tax assets. The Company adjusts the carrying value of its employee life insurance contracts to the net cash surrender value at the end of each reporting period. Goodwill resulting from certain business combinations is reviewed for impairment in the fourth quarter of each fiscal year, or more frequently if circumstances dictate. No impairment of goodwill has been incurred to date. | ||||||||||||
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 2013 and 2012 are $493 and $565, 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 a wholly-owned captive insurance subsidiary and participation in a reinsurance pool, 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. As of the end of 2013 and 2012, these insurance liabilities were $727 and $688 in the aggregate, respectively, and were included in accounts payable, accrued salaries and benefits, and other current liabilities on 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 members. 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 member 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 2013 and 2012: | ||||||||||||
2013 | 2012 | |||||||||||
Insurance-related liabilities | $ | 346 | $ | 308 | ||||||||
Deferred sales | 204 | 159 | ||||||||||
Cash card liability | 159 | 133 | ||||||||||
Other current liabilities | 162 | 135 | ||||||||||
Sales return reserve | 95 | 86 | ||||||||||
Tax-related liabilities | 77 | 88 | ||||||||||
Vendor consideration liabilities | 46 | 57 | ||||||||||
Other current liabilities | $ | 1,089 | $ | 966 | ||||||||
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. Currently, 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 $458 and $284 at the end of 2013 and 2012, respectively. 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, however, that this practice effectively mitigates counterparty risk. 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 2013 and 2012. | ||||||||||||
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 were immaterial in 2013, 2012, and 2011. | ||||||||||||
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-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 some purchases of electricity and natural gas, in addition to fuel for its gas stations, on an index basis. 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 resulting from this process 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 all monetary assets and revaluing or settling monetary liabilities denominated in currencies other than the functional currency in interest income and other, net in the accompanying condensed 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. | ||||||||||||
Revenue Recognition | ||||||||||||
The Company generally recognizes sales, which include shipping fees where applicable, net of estimated 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 on 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, net of the estimated net realizable value of merchandise inventories to be returned and any estimated disposition costs. Amounts collected from members, which under common trade practices are referred to as sales 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 as commissions. 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 and related shipping fees are 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 as commissions earned, which is reflected in net sales. | ||||||||||||
The Company accounts for membership fee revenue, net of estimated refunds, on a deferred basis, whereby revenue is recognized ratably over the one-year membership period. The Company’s Executive Members qualify for a 2% reward (up to a maximum of $750 per year on qualified purchases), which can be redeemed 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 on 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 $970, $900, and $790 in 2013, 2012, and 2011, 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, utilities, and depreciation on production equipment in fresh foods and certain ancillary departments. | ||||||||||||
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 utilities, bank charges, rent and substantially all building and equipment depreciation, as well as other operating costs incurred to support warehouse operations. | ||||||||||||
Marketing and Promotional Expenses | ||||||||||||
Marketing and promotional costs are expensed as incurred and are included in selling, general and administrative expenses in the accompanying consolidated statements of income. | ||||||||||||
Stock-Based Compensation | ||||||||||||
Compensation expense for all stock-based awards granted is recognized using the straight-line method. The fair value of restricted stock units (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. | ||||||||||||
While options and RSUs granted to employees generally vest over five years, all grants 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 because the estimate is inconsequential in light of historical experience and considering the awards vest on a quarterly basis. The impact of actual forfeitures arising in the event of involuntary termination is recognized as actual forfeitures occur. Stock options have a ten-year term. Stock-based compensation expense is predominantly included in selling, general and administrative expenses on 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 2062, with the exception of one lease in the Company’s United Kingdom 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 exercised extension options, from the date the Company has control of the property. Certain leases provide for periodic rental increases based on price indices, and some of the leases provide for rents based on the greater of minimum guaranteed amounts or sales volume. | ||||||||||||
The Company has entered into capital leases for warehouse locations, expiring at various dates through 2040. Capital lease assets are included in 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. Interest on these obligations is included in interest expense. | ||||||||||||
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 capital asset at the inception of the lease term based upon the estimated fair market 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 capitalized ARO assets are depreciated using the same depreciation convention as the respective leasehold improvement assets and are included with buildings and improvements. Estimated ARO liabilities associated with these leases amounted to $50 and $44 at the end of 2013 and 2012, 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. | ||||||||||||
Interest Income and Other, Net | ||||||||||||
Interest income and other, net includes: | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Interest income | $ | 44 | $ | 49 | $ | 41 | ||||||
Foreign-currency transactions gains, net | 39 | 40 | 9 | |||||||||
Other, net | 14 | 14 | 10 | |||||||||
Interest income and other, net | $ | 97 | $ | 103 | $ | 60 | ||||||
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 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. When facts and circumstances change, the Company reassesses these probabilities and records any changes in the consolidated financial statements as appropriate. See Note 9 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 exercise and vesting to the participant of all potentially dilutive common shares outstanding using the treasury stock method for shares subject to stock options and restricted stock units 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 value is deducted from additional paid-in capital and retained earnings. See Note 6 for additional information. | ||||||||||||
Recently Adopted Accounting Pronouncements | ||||||||||||
In June 2011, the Financial Accounting Standards Board (FASB) issued guidance that eliminated the option to report other comprehensive income and its components in the statement of changes in equity. Instead, an entity is required to present either a continuous statement of net income and other comprehensive income or to present the information in two separate but consecutive statements. The new guidance must be applied retrospectively and was effective for fiscal years and interim periods within those years beginning after December 15, 2011. The Company adopted this guidance at the beginning of its first quarter of 2013. | ||||||||||||
In September 2011, the FASB issued guidance to amend the rules related to testing goodwill for impairment. The revised guidance allows an initial qualitative evaluation, based on the entity’s events and circumstances, to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The results of this qualitative assessment determine whether it is necessary to perform further impairment tests. The new guidance was effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. The Company adopted this guidance at the beginning of its first quarter of 2013. Adoption of this guidance had no impact on the consolidated financial statements. | ||||||||||||
Recent Accounting Pronouncements Not Yet Adopted | ||||||||||||
In February 2013, the FASB issued guidance related to reclassifications out of accumulated other comprehensive income. An entity will be required to disclose the net income line items impacted by significant reclassifications out of accumulated other comprehensive income if the item is reclassified in its entirety. For other amounts that are not required to be reclassified in their entirety to net income cross-references to other disclosures required under U.S. GAAP are required to provide additional detail about those amounts. The new guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2012. The Company plans to adopt this guidance at the beginning of its first quarter of fiscal year 2014. Adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements or disclosures. |
Investments
Investments | 12 Months Ended | |||||||||||
Sep. 01, 2013 | ||||||||||||
Investments, Debt and Equity Securities [Abstract] | ||||||||||||
Investments | Note 2—Investments | |||||||||||
The Company’s investments at the end of 2013 and 2012, were as follows: | ||||||||||||
2013:00:00 | Cost | Unrealized | Recorded | |||||||||
Basis | Gains, Net | Basis | ||||||||||
Available-for-sale: | ||||||||||||
Government and agency securities(1) | $ | 1,263 | $ | 0 | $ | 1,263 | ||||||
Corporate notes and bonds | 9 | 0 | 9 | |||||||||
Asset and mortgage-backed securities | 5 | 0 | 5 | |||||||||
Total available-for-sale | 1,277 | 0 | 1,277 | |||||||||
Held-to-maturity: | ||||||||||||
Certificates of deposit | 124 | 124 | ||||||||||
Bankers' acceptances | 79 | 79 | ||||||||||
Total held-to-maturity | 203 | 203 | ||||||||||
Total Short-Term Investments | $ | 1,480 | $ | 0 | $ | 1,480 | ||||||
_______________ | ||||||||||||
-1 | Includes U.S. and Canadian government and agency securities. | |||||||||||
2012:00:00 | Cost | Unrealized | Recorded | |||||||||
Basis | Gains, Net | Basis | ||||||||||
Available-for-sale: | ||||||||||||
U.S. government and agency securities | $ | 776 | $ | 6 | $ | 782 | ||||||
Corporate notes and bonds | 54 | 0 | 54 | |||||||||
FDIC-insured corporate bonds | 35 | 0 | 35 | |||||||||
Asset and mortgage-backed securities | 8 | 0 | 8 | |||||||||
Total available-for-sale | 873 | 6 | 879 | |||||||||
Held-to-maturity: | ||||||||||||
Certificates of deposit | 447 | 447 | ||||||||||
Total Short-Term Investments | $ | 1,320 | $ | 6 | $ | 1,326 | ||||||
Gross unrealized gains and losses on available-for-sale securities were not material in 2013. At the end of 2013, none of the Company's available-for-sale securities were in a continuous unrealized-loss position, nor were there any gross unrealized gains and losses on cash equivalents. At the end of 2012 and 2011, the Company’s available-for-sale securities that were in continuous unrealized-loss position and gross unrealized gains and losses on cash equivalents were not material. | ||||||||||||
The proceeds from sales of available-for-sale securities were $244, $482, and $602 during 2013, 2012, and 2011, respectively. Gross realized gains or losses from sales of available-for-sale securities were not material in 2013, 2012, and 2011. | ||||||||||||
The maturities of available-for-sale and held-to-maturity securities at the end of 2013, were as follows: | ||||||||||||
Available-For-Sale | Held-To-Maturity | |||||||||||
Cost Basis | Fair Value | |||||||||||
Due in one year or less | $ | 628 | $ | 628 | $ | 203 | ||||||
Due after one year through five years | 632 | 632 | 0 | |||||||||
Due after five years | 17 | 17 | 0 | |||||||||
$ | 1,277 | $ | 1,277 | $ | 203 | |||||||
Fair_Value_Measurement
Fair Value Measurement | 12 Months Ended | |||||||
Sep. 01, 2013 | ||||||||
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 2013 and 2012, 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. | ||||||||
2013:00:00 | Level 1 | Level 2 | ||||||
Money market mutual funds(1) | $ | 87 | $ | 0 | ||||
Investment in government and agency securities(2) | 0 | 1,263 | ||||||
Investment in corporate notes and bonds | 0 | 9 | ||||||
Investment in asset and mortgage-backed securities | 0 | 5 | ||||||
Forward foreign-exchange contracts, in asset position(3) | 0 | 3 | ||||||
Forward foreign-exchange contracts, in (liability) position(3) | 0 | (3 | ) | |||||
Total | $ | 87 | $ | 1,277 | ||||
2012:00:00 | Level 1 | Level 2 | ||||||
Money market mutual funds(1) | $ | 77 | $ | 0 | ||||
Investment in U.S. government and agency securities(2) | 0 | 794 | ||||||
Investment in corporate notes and bonds | 0 | 54 | ||||||
Investment in FDIC-insured corporate bonds | 0 | 35 | ||||||
Investment in asset and mortgage-backed securities | 0 | 8 | ||||||
Forward foreign-exchange contracts, in asset position(3) | 0 | 1 | ||||||
Forward foreign-exchange contracts, in (liability) position(3) | 0 | (3 | ) | |||||
Total | $ | 77 | $ | 889 | ||||
_______________ | ||||||||
-1 | Included in cash and cash equivalents in the accompanying consolidated balance sheets. | |||||||
-2 | There were no securities included in cash and cash equivalents and $1,263 included in short-term investments in the accompanying consolidated balance sheets at the end of 2013. $12 and $782 included in cash and cash equivalents and short-term investments, respectively, in the accompanying consolidated balance sheets at the end of 2012. | |||||||
-3 | 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. | |||||||
At the end of 2013, the Company did not hold any Level 3 financial assets and liabilities that were measured at fair value on a recurring basis. At the end of 2012, the Company's holdings of Level 3 financial assets and liabilities were immaterial. There were no financial assets and liabilities measured on a recurring basis using significant unobservable inputs (Level 3) during 2013, and they were immaterial during 2012. There were no transfers in or out of Level 1, 2, or 3 during 2013 and 2012. | ||||||||
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 2013 and 2012. 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 these nonfinancial assets and liabilities during 2013 and 2012 were immaterial. |
Debt
Debt | 12 Months Ended | |||||||||||||||
Sep. 01, 2013 | ||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||
Debt | Short-Term Borrowings | |||||||||||||||
The Company enters into various short-term bank credit facilities, totaling $700 and $438 in 2013 and 2012, respectively. At the end of 2013, $36 was outstanding under these credit facilities, with interest rates ranging from 0.10% to 4.31%, and is included within other current liabilities in the accompanying consolidated balance sheets. There were no outstanding borrowings at the end of 2012. | ||||||||||||||||
The weighted average borrowings, maximum borrowings, and weighted average interest rate under all short-term borrowing arrangements, were as follows for 2013 and 2012: | ||||||||||||||||
Category of Aggregate | Maximum Amount | Average Amount | Weighted Average | |||||||||||||
Short-term Borrowings | Outstanding | Outstanding | Interest Rate | |||||||||||||
During the Fiscal Year | During the Fiscal Year | During the Fiscal Year | ||||||||||||||
2013:00:00 | ||||||||||||||||
Bank borrowings: | ||||||||||||||||
Japan | $ | 157 | $ | 56 | 0.56 | % | ||||||||||
Bank overdraft facility: | ||||||||||||||||
United Kingdom | 14 | 4 | 1.5 | |||||||||||||
2012:00:00 | ||||||||||||||||
Bank borrowings: | ||||||||||||||||
Japan | $ | 83 | $ | 57 | 0.58 | % | ||||||||||
Bank overdraft facility: | ||||||||||||||||
United Kingdom | 3 | 0 | 1.5 | |||||||||||||
Long-Term Debt | ||||||||||||||||
In July 2013, the Company’s Japanese subsidiary entered into an approximately $102 three-year term loan (with a possible two year extension), bearing interest at 0.67%. Interest is payable semi-annually and principal is due on June 30, 2016. This debt is included in other long-term debt in the table below and is classified as a Level 2 measurement in the fair value hierarchy. | ||||||||||||||||
In May 2013, the Company's Japanese subsidiary issued approximately $102 of 1.05% promissory notes through a private placement. Interest is payable semi-annually, and principal is due in May 2023. These notes are included in other long-term debt in the table below and are classified as a Level 3 measurement in the fair value hierarchy. | ||||||||||||||||
In December 2012, the Company issued $3,500 in aggregate principle amount of Senior Notes (December 2012 Notes collectively) as follows: $1,200 of 0.65% Senior Notes due December 7, 2015 (0.65% Notes); $1,100 of 1.125% Senior Notes due December 15, 2017 (1.125% Notes); and $1,200 of 1.7% Senior Notes due December 15, 2019 (1.7% Notes). Interest is payable on the 0.65% Notes semi-annually on June 7 and December 7 of each year until its maturity date. On the 1.125% and 1.7% Notes, interest is due semi-annually on June 15 and December 15 of each year until its maturity date. 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 classified as a Level 2 measurement in the fair value hierarchy. | ||||||||||||||||
In October and December 2011, the Company’s Japanese subsidiary issued two series of 1.18% Yen-denominated promissory notes through a private placement. For both series, interest is payable semi-annually, and principal is due in October 2018. These notes are included in other long-term debt in the table below and are classified as a Level 3 measurement in the fair value hierarchy. | ||||||||||||||||
In June 2008, the Company’s Japanese subsidiary entered into a ten-year term loan with a variable rate of interest of Yen TIBOR (6-month) plus a 0.35% margin (0.68% and 0.78% at the end of 2013 and 2012, respectively) on the outstanding balance. Interest is payable semi-annually and principal is due in June 2018. This debt is included in other long-term debt in the table below and is classified as a Level 3 measurement in the fair value hierarchy. | ||||||||||||||||
In October 2007, the Company’s Japanese subsidiary issued promissory notes through a private placement, bearing interest at 2.695%. Interest is payable semi-annually, and principal is due in October 2017. These notes are included in other long-term debt in the table below and are classified as a Level 3 measurement in the fair value hierarchy. | ||||||||||||||||
In February 2007, the Company issued $1,100 of 5.5% Senior Notes due March 15, 2017 at a discount of $6 (the 2007 Senior Note). Interest is payable semi-annually on March 15 and September 15 of each year until its maturity date. The discount and issuance costs associated with the Senior Note is being amortized to interest expense over the term of the note. 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. This note is classified as a Level 2 measurement in the fair value hierarchy. | ||||||||||||||||
In August 1997, the Company sold $900 principal amount at maturity 3.5% Zero Coupon Convertible Subordinated Notes (Zero Coupon Notes) due in August 2017. The Zero Coupon Notes were priced with a yield to maturity of 3.5%, resulting in gross proceeds to the Company of $450. The remaining Zero Coupon Notes outstanding are convertible into a maximum of 30,000 shares of Costco Common Stock shares at an initial conversion price of $22.71. The Company, at its option, may redeem the Zero Coupon Notes (at the discounted issue price plus accrued interest to date of redemption). At the end of 2013, $899 in principal amount of Zero Coupon Notes had been converted by note holders into shares of Costco Common Stock. These notes are included in other long-term debt in the table below and are classified as a Level 2 measurement in the fair value hierarchy. | ||||||||||||||||
The carrying value and estimated fair value of the Company’s long-term debt at the end of 2013 and 2012 consisted of the following: | ||||||||||||||||
2013 | 2012 | |||||||||||||||
Carrying | Fair | Carrying | Fair | |||||||||||||
Value | Value | Value | Value | |||||||||||||
5.5% Senior Notes due March 2017 | $ | 1,098 | $ | 1,248 | $ | 1,097 | $ | 1,325 | ||||||||
0.65% Senior Notes due December 2015 | 1,199 | 1,200 | 0 | 0 | ||||||||||||
1.125% Senior Notes due December 2017 | 1,100 | 1,065 | 0 | 0 | ||||||||||||
1.7% Senior Notes due December 2019 | 1,198 | 1,157 | 0 | 0 | ||||||||||||
Other long-term debt | 403 | 412 | 285 | 338 | ||||||||||||
Total long-term debt | 4,998 | 5,082 | 1,382 | 1,663 | ||||||||||||
Less current portion | 0 | 0 | 1 | 1 | ||||||||||||
Long-term debt, excluding current portion | $ | 4,998 | $ | 5,082 | $ | 1,381 | $ | 1,662 | ||||||||
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. Substantially all of the Company's long-term debt is classified as Level 2. | ||||||||||||||||
Maturities of long-term debt during the next five fiscal years and thereafter are as follows: | ||||||||||||||||
2014 | $ | 0 | ||||||||||||||
2015 | 0 | |||||||||||||||
2016 | 1,301 | |||||||||||||||
2017 | 1,099 | |||||||||||||||
2018 | 1,196 | |||||||||||||||
Thereafter | 1,402 | |||||||||||||||
Total | $ | 4,998 | ||||||||||||||
Leases
Leases | 12 Months Ended | |||||||
Sep. 01, 2013 | ||||||||
Leases [Abstract] | ||||||||
Leases | Note 5—Leases | |||||||
Operating Leases | ||||||||
The aggregate rental expense for 2013, 2012 and 2011 was $225, $220, and $208, respectively. Sub-lease income, included in interest income and other, net, and contingent rents are not material. | ||||||||
Capital Leases | ||||||||
Gross assets recorded under capital leases were $201 and $187, at the end of 2013 and 2012, respectively. These assets are recorded net of accumulated amortization of $28 and $19 at the end of 2013 and 2012, respectively. | ||||||||
At the end of 2013, future minimum payments, net of sub-lease income of $150 for all years combined, under non-cancelable operating leases with terms of at least one year and capital leases were as follows: | ||||||||
Operating | Capital | |||||||
Leases | Leases | |||||||
2014 | $ | 189 | $ | 17 | ||||
2015 | 175 | 17 | ||||||
2016 | 167 | 16 | ||||||
2017 | 160 | 16 | ||||||
2018 | 153 | 16 | ||||||
Thereafter | 1,753 | 338 | ||||||
Total | $ | 2,597 | 420 | |||||
Less amount representing interest | (224 | ) | ||||||
Net present value of minimum lease payments | 196 | |||||||
Less current installments(1) | (4 | ) | ||||||
Long-term capital lease obligations less current installments(2) | $ | 192 | ||||||
_______________ | ||||||||
-1 | Included in other current liabilities. | |||||||
-2 | Included in deferred income taxes and other liabilities. |
Stockholders_Equity
Stockholders' Equity | 12 Months Ended | ||||||||||
Sep. 01, 2013 | |||||||||||
Stockholders' Equity Note [Abstract] | |||||||||||
Stockholders' Equity | Note 6—Stockholders’ Equity | ||||||||||
Dividends | |||||||||||
The Company’s current quarterly dividend rate is $0.31 per share. In December 2012, the Company paid a special cash dividend of $7.00 per share, totaling approximately $3,049. | |||||||||||
Stock Repurchase Programs | |||||||||||
The Company’s stock repurchase program is conducted under a $4,000 authorization by the Board of Directors approved in April 2011, which expires in April 2015. As of the end of 2013, the total amount repurchased under this plan was $945. The following table summarizes the Company’s stock repurchase activity: | |||||||||||
Shares | Average | Total Cost | |||||||||
Repurchased | Price per | ||||||||||
(000’s) | Share | ||||||||||
2013 | 357 | $ | 96.41 | $ | 34 | ||||||
2012 | 7,272 | 84.75 | 617 | ||||||||
2011 | 8,939 | 71.74 | 641 | ||||||||
These amounts 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. | |||||||||||
Accumulated Other Comprehensive (Loss) Income | |||||||||||
Accumulated other comprehensive (loss) income, net of tax where applicable, was $(122) and $156 at the end of 2013 and 2012, respectively, and was comprised primarily of unrealized foreign-currency translation adjustments. In 2012, as part of the acquisition of the noncontrolling interest in Mexico, the Company reclassified $155 of accumulated unrealized losses on foreign-currency translation adjustments to Costco’s accumulated other comprehensive income. This balance was previously included as a component of non-controlling interest. |
StockBased_Compensation_Plans
Stock-Based Compensation Plans | 12 Months Ended | ||||||||||||
Sep. 01, 2013 | |||||||||||||
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 under the Amended and Restated 2002 Stock Incentive Plan, amended as of January 2006 (Second Restated 2002 Plan), and predecessor plans until, effective in the fourth quarter of fiscal 2006, the Company began awarding restricted stock units (RSUs) under the Second Restated 2002 Plan in lieu of stock options. Through a series of shareholder approvals, there have been amended and restated plans and new provisions implemented by the Company. Under revisions in the Fourth Restated 2002 Plan in the fourth quarter of fiscal 2008, grants of RSUs are subject, upon certain terminations of employment, to quarterly vesting. Employees who attain certain years of service with the Company receive shares under accelerated vesting provisions on the annual vesting date rather than upon qualified retirement. The first grant impacted by these amendments occurred in the first quarter of fiscal 2009. Each share issued in respect of stock bonus or stock unit awards is counted as 1.75 shares toward the limit of shares made available under the Fourth Restated 2002 Plan. The Sixth Restated 2002 Plan (Sixth Plan), amended in the second quarter of fiscal 2012, is the Company’s only stock-based compensation plan with shares available for grant at the end of 2013. The Sixth Plan authorizes the issuance of 16,000,000 shares (9,143,000 RSUs) of common stock for future grants in addition to shares previously authorized. The Company issues new shares of common stock upon exercise of stock options and upon vesting of RSUs. Vested RSUs are generally delivered to participants annually, net of minimum statutory withholding taxes. | |||||||||||||
As required by the Company’s Sixth 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. The number of outstanding stock options and RSUs was increased by multiplying the number of outstanding shares by a factor of 1.0763, representing the ratio of the NASDAQ closing price of $105.95 on December 5, 2012, which was the last trading day immediately prior to the ex-dividend date, to the NASDAQ opening price of $98.44 on the ex-dividend date, December 6, 2012. The exercise prices of stock options were reduced by multiplying the prices by a factor of 0.9291, representing the ratio of the NASDAQ opening price on the ex-dividend date to the NASDAQ closing price on December 5. Approximately 2,905,000 stock options were adjusted, and approximately 9,676,000 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 Sixth Plan, the maximum number of shares issuable under the Sixth Plan was also proportionally adjusted, which resulted in an additional 1,362,000 shares (778,000 RSUs) available to be granted. | |||||||||||||
Summary of Stock Option Activity | |||||||||||||
All outstanding stock options were fully vested and exercisable at the end of 2013 and 2012. The following table summarizes stock option transactions during 2013: | |||||||||||||
Number Of | Weighted- | Weighted- | Aggregate | ||||||||||
Options | Average | Average | Intrinsic | ||||||||||
(in 000’s) | Exercise | Remaining | Value(1) | ||||||||||
Price | Contractual | ||||||||||||
Term | |||||||||||||
(in years) | |||||||||||||
Outstanding at the end of 2012 | 3,161 | $ | 40.9 | ||||||||||
Exercised | (1,435 | ) | 36.22 | ||||||||||
Special cash dividend | 221 | N/A | |||||||||||
Outstanding at the end of 2013 | 1,947 | $ | 39.7 | 1.38 | $ | 140 | |||||||
_______________ | |||||||||||||
-1 | The difference between the exercise price and market value of common stock at the end of 2013. | ||||||||||||
The following is a summary of stock options outstanding at the end of 2013: | |||||||||||||
Options Outstanding and Exercisable | |||||||||||||
Range of Prices(1) | Number of | Weighted- | Weighted- | ||||||||||
Options | Average | Average | |||||||||||
(in 000’s) | Remaining | Exercise | |||||||||||
Contractual | Price | ||||||||||||
Life | |||||||||||||
$34.71–$40.69 | 1,775 | 1.36 | $ | 39.39 | |||||||||
$42.73–$43.17 | 172 | 1.59 | 42.93 | ||||||||||
1,947 | 1.38 | $ | 39.7 | ||||||||||
_______________ | |||||||||||||
(1) Prices include the effect of the special cash dividend noted above. | |||||||||||||
The tax benefits realized, derived from the compensation deductions resulting from the option exercises, and intrinsic value related to total stock options exercised during 2013, 2012, and 2011 are provided in the following table: | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Actual tax benefit realized for stock options exercised | $ | 33 | $ | 50 | $ | 78 | |||||||
Intrinsic value of stock options exercised(1) | $ | 94 | $ | 137 | $ | 227 | |||||||
_______________ | |||||||||||||
(1) The difference between the exercise price and market value of common stock measured at each individual exercise date. | |||||||||||||
Summary of Restricted Stock Unit Activity | |||||||||||||
RSUs granted to employees and to non-employee directors generally vest over five years and three years, respectively; however, the Company provides 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. Recipients are not entitled to vote or receive dividends on non-vested and undelivered shares. At the end of 2013, 11,174,000 shares were available to be granted as RSUs under the Sixth Restated 2002 Plan. | |||||||||||||
The following awards were outstanding at the end of 2013: | |||||||||||||
• | 9,355,000 time-based RSUs that vest upon continued employment over specified periods of time; | ||||||||||||
• | 726,000 performance-based RSUs, of which 350,000 were granted to certain executive officers subject to the certification of the attainment of specified performance targets for 2013, which occurred in September 2013. These RSUs vest upon continued employment over specified periods of time. | ||||||||||||
The following table summarizes RSU transactions during 2013: | |||||||||||||
Number of | Weighted-Average | ||||||||||||
Units | Grant Date Fair | ||||||||||||
(in 000’s) | Value | ||||||||||||
Outstanding at the end of 2012 | 9,260 | $ | 66.14 | ||||||||||
Granted | 4,192 | 90.99 | |||||||||||
Vested and delivered | (3,872 | ) | 67.17 | ||||||||||
Forfeited | (231 | ) | 71.19 | ||||||||||
Special cash dividend | 732 | N/A | |||||||||||
Outstanding at the end of 2013 | 10,081 | $ | 72.52 | ||||||||||
The remaining unrecognized compensation cost related to non-vested RSUs at the end of 2013 was $504 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 2013 were approximately 3,100,000 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: | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Stock-based compensation expense before income taxes | $ | 285 | $ | 241 | $ | 207 | |||||||
Less recognized income tax benefit | (94 | ) | (79 | ) | (67 | ) | |||||||
Stock-based compensation expense, net of income taxes | $ | 191 | $ | 162 | $ | 140 | |||||||
Retirement_Plans
Retirement Plans | 12 Months Ended |
Sep. 01, 2013 | |
Compensation and Retirement Disclosure [Abstract] | |
Retirement Plans | Note 8—Retirement Plans |
The Company has a 401(k) Retirement Plan available to all U.S. employees who have completed 90 days of employment. For all U.S. employees, with the exception of California union employees, the plan allows pre-tax deferrals, which the Company matches (50% of the first one thousand dollars of employee contributions). In addition, the Company provides each eligible participant an annual discretionary contribution based on salary and years of service. | |
California union employees are allowed to make pre-tax deferrals into the 401(k) plan, which the Company matches (50% of the first five hundred dollars of employee contributions) and provides each eligible participant a contribution based on hours worked and years of service. | |
California union employees participate in a defined benefit plan sponsored by their union under a multi-employer plan, and the Company makes contributions to this plan based upon its union agreement. The Company’s contributions to this plan are not material to the Company’s consolidated financial statements. | |
The Company has a defined contribution plan for Canadian employees and contributes a percentage of each employee’s salary. Certain Other International operations have defined benefit and defined contribution plans that are not significant. Amounts expensed under all plans were $409, $382, and $345 for 2013, 2012, and 2011, respectively, and were included in selling, general and administrative expenses and merchandise costs in the accompanying consolidated statements of income. |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||||||||||||
Sep. 01, 2013 | |||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||
Income Taxes | Note 9—Income Taxes | ||||||||||||||||||||
Income before income taxes is comprised of the following: | |||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||
Domestic (including Puerto Rico) | $ | 2,070 | $ | 1,809 | $ | 1,526 | |||||||||||||||
Foreign | 981 | 958 | 857 | ||||||||||||||||||
Total | $ | 3,051 | $ | 2,767 | $ | 2,383 | |||||||||||||||
The provisions for income taxes for 2013, 2012, and 2011 are as follows: | |||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||
Federal: | |||||||||||||||||||||
Current | $ | 572 | $ | 591 | $ | 409 | |||||||||||||||
Deferred | 16 | 12 | 74 | ||||||||||||||||||
Total federal | 588 | 603 | 483 | ||||||||||||||||||
State: | |||||||||||||||||||||
Current | 109 | 100 | 78 | ||||||||||||||||||
Deferred | 4 | 2 | 14 | ||||||||||||||||||
Total state | 113 | 102 | 92 | ||||||||||||||||||
Foreign: | |||||||||||||||||||||
Current | 302 | 312 | 270 | ||||||||||||||||||
Deferred | (13 | ) | (17 | ) | (4 | ) | |||||||||||||||
Total foreign | 289 | 295 | 266 | ||||||||||||||||||
Total provision for income taxes | $ | 990 | $ | 1,000 | $ | 841 | |||||||||||||||
Tax benefits associated with the exercise of employee stock options and other employee stock programs were allocated to equity attributable to Costco in the amount of $59, $65, and $59, in 2013, 2012, and 2011, respectively. | |||||||||||||||||||||
The reconciliation between the statutory tax rate and the effective rate for 2013, 2012, and 2011 is as follows: | |||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||
Federal taxes at statutory rate | $ | 1,068 | 35 | % | $ | 969 | 35 | % | $ | 834 | 35 | % | |||||||||
State taxes, net | 66 | 2.1 | 59 | 2.1 | 55 | 2.4 | |||||||||||||||
Foreign taxes, net | (87 | ) | (2.8 | ) | (61 | ) | (2.2 | ) | (66 | ) | (2.8 | ) | |||||||||
Employee stock ownership plan (ESOP) | (65 | ) | (2.1 | ) | (7 | ) | (0.3 | ) | (6 | ) | (0.3 | ) | |||||||||
Other | 8 | 0.2 | 40 | 1.5 | 24 | 1 | |||||||||||||||
Total | $ | 990 | 32.4 | % | $ | 1,000 | 36.1 | % | $ | 841 | 35.3 | % | |||||||||
The Company’s provision for income taxes for 2013 was favorably impacted by a $62 nonrecurring tax benefit in connection with the special cash dividend of $7.00 per share paid by the Company to employees, who through the Company's 401(k) Retirement Plan owned 22,600,000 shares of Company stock through an ESOP. Dividends paid on these shares are deductible for U.S. income tax purposes. | |||||||||||||||||||||
The Company’s provision for income taxes for 2012 was adversely impacted by nonrecurring net tax expense of $25 relating primarily to the following items: the adverse impact of an audit of Costco Mexico by the Mexican tax authority; the tax effects of the cash dividend declared by Costco Mexico (included in Other in the table above); and the tax effects of nondeductible expenses for the Company’s contribution to an initiative reforming alcohol beverage laws in Washington State. | |||||||||||||||||||||
The components of the deferred tax assets (liabilities) are as follows: | |||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||
Equity compensation | $ | 80 | $ | 79 | |||||||||||||||||
Deferred income/membership fees | 130 | 148 | |||||||||||||||||||
Accrued liabilities and reserves | 530 | 461 | |||||||||||||||||||
Other | 42 | 55 | |||||||||||||||||||
Property and equipment | (558 | ) | (522 | ) | |||||||||||||||||
Merchandise inventories | (190 | ) | (182 | ) | |||||||||||||||||
Net deferred tax assets | $ | 34 | $ | 39 | |||||||||||||||||
The deferred tax accounts at the end of 2013 and 2012 include current deferred income tax assets of $422 and $393 respectively, included in deferred income taxes and other current assets; non-current deferred income tax assets of $62 and $58, respectively, included in other assets; and non-current deferred income tax liabilities of $450 and $412, respectively, included in deferred income taxes and other liabilities. | |||||||||||||||||||||
The Company has not provided for U.S. deferred taxes on cumulative undistributed earnings of $3,619 and $3,162 at the end of 2013 and 2012, respectively, of certain non-U.S. consolidated subsidiaries as such earnings are deemed by the Company to be indefinitely reinvested. 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 subsidiaries. | |||||||||||||||||||||
A reconciliation of the beginning and ending amount of gross unrecognized tax benefits for 2013 and 2012 is as follows: | |||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||
Gross unrecognized tax benefit at beginning of year | $ | 116 | $ | 106 | |||||||||||||||||
Gross increases—current year tax positions | 10 | 15 | |||||||||||||||||||
Gross increases—tax positions in prior years | 5 | 3 | |||||||||||||||||||
Gross decreases—tax positions in prior years | (13 | ) | (3 | ) | |||||||||||||||||
Settlements | (38 | ) | (3 | ) | |||||||||||||||||
Lapse of statute of limitations | 0 | (2 | ) | ||||||||||||||||||
Gross unrecognized tax benefit at end of year | $ | 80 | $ | 116 | |||||||||||||||||
Included in the balance at the end of 2013, are $36 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 total amount of such unrecognized tax benefits that, if recognized, would favorably affect the effective income tax rate in future periods is $46 and $36 at the end of 2013 and 2012, 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 2013 and 2012. Accrued interest and penalties were $11 and $16 at the end of 2013 and 2012, respectively. | |||||||||||||||||||||
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 twelve 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 2009 to present and in California for fiscal years 2004 to present. No other examinations are believed to be material. |
Net_Income_per_Common_and_Comm
Net Income per Common and Common Equivalent Share | 12 Months Ended | |||||||||||
Sep. 01, 2013 | ||||||||||||
Earnings Per Share [Abstract] | ||||||||||||
Net Income Per Common and Common Equivalent Share | Note 10—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): | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Net income available to common stockholders after assumed conversions of dilutive securities | $ | 2,039 | $ | 1,710 | $ | 1,463 | ||||||
Weighted average number of common shares used in basic net income per common share | 435,741 | 433,620 | 436,119 | |||||||||
RSUs and stock options | 4,552 | 4,906 | 6,063 | |||||||||
Conversion of convertible notes | 219 | 847 | 912 | |||||||||
Weighted average number of common shares and dilutive potential of common stock used in diluted net income per share | 440,512 | 439,373 | 443,094 | |||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended |
Sep. 01, 2013 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 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. In such cases, there may be a possible exposure to loss in excess of any amounts accrued. The Company monitors those matters for developments that would affect the likelihood of a loss and the accrued amount, if any, thereof, and adjusts the amount as appropriate. 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. As of the date of this report, the Company has not recorded an accrual with respect to any matter described below. 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 our 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: | |
A case brought as a class action on behalf of certain present and former female managers, in which plaintiffs allege denial of promotion based on gender in violation of Title VII of the Civil Rights Act of 1964 and California state law. Shirley “Rae” Ellis v. Costco Wholesale Corp., United States District Court (San Francisco), Case No. C-04-3341-MHP. Plaintiffs seek compensatory damages, punitive damages, injunctive relief, interest and attorneys’ fees. Class certification was granted by the district court on January 11, 2007. On September 16, 2011, the United States Court of Appeals for the Ninth Circuit reversed the order of class certification and remanded to the district court for further proceedings. On September 25, 2012, the district court certified a class of women in the United States denied promotion to warehouse general manager or assistant general manager since January 3, 2002. Currently the class is believed to be approximately 1,150 people. A trial has been set for March 2014. In October 2013 the parties reached an agreement in principle on a settlement, which is subject to the execution of definitive documentation and court approval. Any payments to class members would be contingent upon proof of liability in individual hearings. Payments under the settlement would be immaterial to the Company’s operations or financial position. | |
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 is subject to final approval by the court, the Company agreed, to the extent allowed by law, 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 million in attorneys’ fees, as well as an award of costs and payments to class representatives. The Company has opposed the motion. | |
On October 4, 2006, the Company received a grand jury subpoena from the United States Attorney’s Office for the Central District of California, seeking records relating to the Company’s receipt and handling of hazardous merchandise returned by Costco members and other records. The Company has entered into a tolling agreement with the United States Attorney’s Office. | |
The Environmental Protection Agency (EPA) issued an Information Request to the Company, dated November 1, 2007, regarding warehouses in the states of Arizona, California, Hawaii, and Nevada and relating to compliance with regulations concerning air-conditioning and refrigeration equipment. On March 4, 2009, the Company was advised by the Department of Justice that the Department was prepared to allege that the Company has committed at least nineteen violations of the leak-repair requirements of 40 C.F.R. § 82.156(i) and at least seventy-four violations of the recordkeeping requirements of 40 C.F.R. § 82.166(k), (m) at warehouses in these states. The Company has responded to these allegations, is engaged in communications with the Department about these and additional allegations, and has entered into tolling agreements. Substantial penalties may be levied for violations of the Clean Air Act. The Company is cooperating with this inquiry. | |
On October 7, 2009, the District Attorneys for San Diego, San Joaquin and Solano Counties filed a complaint, People of the State of California v. Costco Wholesale Corp., et al, No. 37-2009-00099912 (Superior Court for the County of San Diego), alleging on information and belief that the Company has violated and continues to violate provisions of the California Health and Safety Code and the Business and Professions Code through the use of certain spill clean-up materials at its gasoline stations. In July 2013, the matter was settled with, among other things, payment of an immaterial sum to the County of San Diego as partial reimbursement for costs incurred in the matter. | |
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. The State of Washington conducted such an examination on its own behalf and on February 4, 2011 issued an assessment. The Company filed suit to contest the assessment. In November 2012 the matter was settled for an amount that was immaterial and less than the amount of the assessment. | |
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. 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 | |||||||||||||||
Sep. 01, 2013 | ||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||
Segment Reporting | The Company and its subsidiaries are principally engaged in the operation of membership warehouses in the U.S., Canada, Mexico, the United Kingdom, Japan, and Australia 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 | Canadian | Other | Total | |||||||||||||
Operations | Operations | International | ||||||||||||||
Operations | ||||||||||||||||
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 | ||||||||||||
2012 | ||||||||||||||||
Total revenue | $ | 71,776 | $ | 15,717 | $ | 11,644 | $ | 99,137 | ||||||||
Operating income | 1,632 | 668 | 459 | 2,759 | ||||||||||||
Depreciation and amortization | 667 | 117 | 124 | 908 | ||||||||||||
Additions to property and equipment | 1,012 | 170 | 298 | 1,480 | ||||||||||||
Net property and equipment | 9,236 | 1,664 | 2,061 | 12,961 | ||||||||||||
Total assets | 18,401 | 4,237 | 4,502 | 27,140 | ||||||||||||
2011 | ||||||||||||||||
Total revenue | $ | 64,904 | $ | 14,020 | $ | 9,991 | $ | 88,915 | ||||||||
Operating income | 1,395 | 621 | 423 | 2,439 | ||||||||||||
Depreciation and amortization | 640 | 117 | 98 | 855 | ||||||||||||
Additions to property and equipment | 876 | 144 | 270 | 1,290 | ||||||||||||
Net property and equipment | 8,870 | 1,608 | 1,954 | 12,432 | ||||||||||||
Total assets | 18,558 | 3,741 | 4,462 | 26,761 | ||||||||||||
Quarterly_Financial_Data_Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended | ||||||||||||||||||||
Sep. 01, 2013 | |||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||
Quarterly Financial Data (Unaudited) | The two tables that follow reflect the unaudited quarterly results of operations for 2013 and 2012. | ||||||||||||||||||||
52 Weeks Ended September 1, 2013 | |||||||||||||||||||||
First | Second | Third | Fourth | Total | |||||||||||||||||
Quarter | Quarter | Quarter | Quarter | (52 Weeks) | |||||||||||||||||
(12 Weeks) | (12 Weeks) | (12 Weeks) | (16 Weeks) | ||||||||||||||||||
REVENUE | |||||||||||||||||||||
Net sales | $ | 23,204 | $ | 24,343 | $ | 23,552 | $ | 31,771 | $ | 102,870 | |||||||||||
Membership fees | 511 | 528 | 531 | 716 | 2,286 | ||||||||||||||||
Total revenue | 23,715 | 24,871 | 24,083 | 32,487 | 105,156 | ||||||||||||||||
OPERATING EXPENSES | |||||||||||||||||||||
Merchandise costs | 20,726 | 21,766 | 21,038 | 28,418 | 91,948 | ||||||||||||||||
Selling, general and administrative | 2,332 | 2,361 | 2,313 | 3,098 | 10,104 | ||||||||||||||||
Preopening expenses | 18 | 6 | 10 | 17 | 51 | ||||||||||||||||
Operating income | 639 | 738 | 722 | 954 | 3,053 | ||||||||||||||||
OTHER INCOME (EXPENSE) | |||||||||||||||||||||
Interest expense | (13 | ) | (25 | ) | (25 | ) | (36 | ) | (99 | ) | |||||||||||
Interest income and other, net | 20 | 26 | 15 | 36 | 97 | ||||||||||||||||
INCOME BEFORE INCOME TAXES | 646 | 739 | 712 | 954 | 3,051 | ||||||||||||||||
Provision for income taxes | 225 | 185 | (1) | 248 | 332 | 990 | |||||||||||||||
Net income including noncontrolling interests | 421 | 554 | 464 | 622 | 2,061 | ||||||||||||||||
Net income attributable to noncontrolling interests | (5 | ) | (7 | ) | (5 | ) | (5 | ) | (22 | ) | |||||||||||
NET INCOME ATTRIBUTABLE TO COSTCO | $ | 416 | $ | 547 | $ | 459 | $ | 617 | $ | 2,039 | |||||||||||
NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO: | |||||||||||||||||||||
Basic | $ | 0.96 | $ | 1.26 | $ | 1.05 | $ | 1.41 | $ | 4.68 | |||||||||||
Diluted | $ | 0.95 | $ | 1.24 | $ | 1.04 | $ | 1.4 | $ | 4.63 | |||||||||||
Shares used in calculation (000’s) | |||||||||||||||||||||
Basic | 433,423 | 435,975 | 436,488 | 436,752 | 435,741 | ||||||||||||||||
Diluted | 438,643 | 439,812 | 440,780 | 441,907 | 440,512 | ||||||||||||||||
CASH DIVIDENDS DECLARED PER COMMON SHARE | $ | 0.275 | $ | 7.275 | (2) | $ | 0.31 | $ | 0.31 | $ | 8.17 | ||||||||||
_______________ | |||||||||||||||||||||
-1 | Includes a $62 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 $7.00 per share paid in December 2012. | ||||||||||||||||||||
Note 13—Quarterly Financial Data (Unaudited) (Continued) | |||||||||||||||||||||
53 Weeks Ended September 2, 2012 | |||||||||||||||||||||
First | Second | Third | Fourth | Total | |||||||||||||||||
Quarter | Quarter | Quarter | Quarter | (53 Weeks) | |||||||||||||||||
(12 Weeks) | (12 Weeks) | (12 Weeks) | (17 Weeks) | ||||||||||||||||||
REVENUE | |||||||||||||||||||||
Net sales | $ | 21,181 | $ | 22,508 | $ | 21,849 | $ | 31,524 | $ | 97,062 | |||||||||||
Membership fees | 447 | 459 | 475 | 694 | 2,075 | ||||||||||||||||
Total revenue | 21,628 | 22,967 | 22,324 | 32,218 | 99,137 | ||||||||||||||||
OPERATING EXPENSES | |||||||||||||||||||||
Merchandise costs | 18,931 | 20,139 | 19,543 | 28,210 | 86,823 | ||||||||||||||||
Selling, general and administrative | 2,144 | (1) | 2,178 | 2,152 | 3,044 | 9,518 | |||||||||||||||
Preopening expenses | 10 | 6 | 6 | 15 | 37 | ||||||||||||||||
Operating income | 543 | 644 | 623 | 949 | 2,759 | ||||||||||||||||
OTHER INCOME (EXPENSE) | |||||||||||||||||||||
Interest expense | (27 | ) | (27 | ) | (19 | ) | (22 | ) | (95 | ) | |||||||||||
Interest income and other, net | 37 | 10 | 18 | 38 | 103 | ||||||||||||||||
INCOME BEFORE INCOME TAXES | 553 | 627 | 622 | 965 | 2,767 | ||||||||||||||||
Provision for income taxes | 225 | (2) | 215 | 217 | 343 | 1,000 | |||||||||||||||
Net income including noncontrolling interests | 328 | 412 | 405 | 622 | 1,767 | ||||||||||||||||
Net income attributable to noncontrolling interests | (8 | ) | (18 | ) | (19 | ) | (13 | ) | (58 | ) | |||||||||||
NET INCOME ATTRIBUTABLE TO COSTCO | $ | 320 | $ | 394 | $ | 386 | $ | 609 | $ | 1,709 | |||||||||||
NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO: | |||||||||||||||||||||
Basic | $ | 0.74 | $ | 0.91 | $ | 0.89 | $ | 1.41 | $ | 3.94 | |||||||||||
Diluted | $ | 0.73 | $ | 0.9 | $ | 0.88 | $ | 1.39 | $ | 3.89 | |||||||||||
Shares used in calculation (000’s) | |||||||||||||||||||||
Basic | 434,222 | 434,535 | 433,791 | 432,437 | 433,620 | ||||||||||||||||
Diluted | 440,615 | 439,468 | 439,166 | 438,344 | 439,373 | ||||||||||||||||
CASH DIVIDENDS DECLARED PER COMMON SHARE | $ | 0.24 | $ | 0.24 | $ | 0 | (3) | $ | 0.55 | (4 | ) | $ | 1.03 | ||||||||
_______________ | |||||||||||||||||||||
-1 | Includes a $17 charge to selling, general and administrative for contributions to an initiative reforming alcohol beverage laws in Washington State. | ||||||||||||||||||||
-2 | Includes a $24 charge relating to the settlement of an income tax audit in Mexico. | ||||||||||||||||||||
-3 | On May 9, 2012, subsequent to the end of the third quarter of 2012, the Board of Directors declared a quarterly cash dividend of $0.275 per share. | ||||||||||||||||||||
-4 | The quarterly dividend rate was $0.275 per share. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | |||||||||||
Sep. 01, 2013 | ||||||||||||
Accounting Policies [Abstract] | ||||||||||||
Basis of Presentation | Basis of Presentation | |||||||||||
The consolidated financial statements include the accounts of Costco Wholesale Corporation, its wholly-owned subsidiaries, subsidiaries in which it has a controlling interest, consolidated entities in which it has made equity investments, or has other interests through which it has majority-voting control or it exercises the right to direct the activities that most significantly impact the entity’s performance. 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 and other consolidated entities have been eliminated in consolidation. In July 2012, Costco purchased its former joint venture partner’s 50% equity interest in Costco Mexico. The Company’s net income excludes income attributable to noncontrolling interests in its operations in Mexico prior to the July 2012 acquisition of the 50% noncontrolling interest, Taiwan, and Korea. Subsequent to the acquisition date, 100% of Mexico’s operations are included in “net income attributable to Costco.” Unless otherwise noted, references to net income relate to net income attributable to Costco. | ||||||||||||
In 2011 and prior to the July 2012 acquisition of the 50% noncontrolling interest in Mexico, the financial position and results of Mexico’s operations were fully consolidated, and the joint venture partner’s share was included in “net income attributable to noncontrolling interests” due to the adoption of a new accounting standard. The initial consolidation of Mexico increased total assets, liabilities, and revenue by approximately 3%, with no impact on net income or net income per common share attributable to Costco. The Company’s equity method investment in Mexico as of August 29, 2010 was derecognized and the noncontrolling interest in Mexico totaling $357 was recognized as part of the initial consolidation of the joint venture on August 30, 2010 as shown in the accompanying consolidated statements of equity. | ||||||||||||
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 2013 relate to the 52-week fiscal year ended September 1, 2013. References to 2012 and 2011 relate to the 53-week and 52-week fiscal years ended September 2, 2012 and August 28, 2011, 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. | ||||||||||||
Reclassifications | Reclassifications | |||||||||||
Certain reclassifications have been made to prior fiscal year amounts or balances to conform to the presentation in the current fiscal year. These reclassifications did not have a material impact on the Company’s previously reported consolidated financial statements. | ||||||||||||
Cash and Cash Equivalents | Cash and Cash Equivalents | |||||||||||
The Company considers as cash and cash equivalents all 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 $1,254 and $1,161 at the end of 2013 and 2012, 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 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. The majority of the Company’s investments are in debt securities. | ||||||||||||
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 (an exit price) 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 “consensus pricing,” using market prices from a variety of industry-standard independent data providers or pricing that considers various assumptions, including time value, yield curve, volatility factors, credit spreads, default rates, loss severity, current market and contractual prices for the underlying instruments or debt, broker and dealer quotes, as well as other relevant economic measures. All are observable in the market or can be derived principally from or corroborated by observable market data, for which the Company typically receives independent external valuation information. | ||||||||||||
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. | ||||||||||||
The Company’s current financial liabilities have fair values that approximate their carrying values. The Company’s 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 2013 and 2012: | ||||||||||||
2013 | 2012 | |||||||||||
Vendor receivables | $ | 581 | $ | 545 | ||||||||
Reinsurance receivables | 238 | 226 | ||||||||||
Receivables from governmental entities | 228 | 87 | ||||||||||
Third-party pharmacy receivables | 102 | 104 | ||||||||||
Other receivables, net | 52 | 64 | ||||||||||
Receivables, net | $ | 1,201 | $ | 1,026 | ||||||||
Vendor receivables include payments from vendors in the form of volume rebates or other purchase discounts that are evidenced by signed agreements and 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. Vendor receivable 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. Other consideration received from vendors is generally recorded as a reduction of merchandise costs upon completion of contractual milestones, terms of the related agreement, or by another systematic approach. | ||||||||||||
Reinsurance receivables are held by the Company’s wholly-owned captive insurance subsidiary. The receivable 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 on the consolidated balance sheets. Receivables from governmental entities largely consist of tax-related items. Third-party pharmacy receivables generally relate to amounts due from members’ insurance companies for the amount above their co-pay, which is collected at the point-of-sale. | ||||||||||||
Receivables are recorded net of an allowance for doubtful accounts. Management determines the allowance for doubtful accounts based on historical experience and application of the specific identification method. Write-offs of receivables were immaterial for fiscal years 2013, 2012, and 2011. | ||||||||||||
Merchandise Inventories | Merchandise Inventories | |||||||||||
Merchandise inventories consist of the following at the end of 2013 and 2012: | ||||||||||||
2013 | 2012 | |||||||||||
United States (primarily LIFO) | $ | 5,560 | $ | 4,967 | ||||||||
Foreign (FIFO) | 2,334 | 2,129 | ||||||||||
Merchandise inventories | $ | 7,894 | $ | 7,096 | ||||||||
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. 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. The Company believes the LIFO method more fairly presents the results of operations by more closely matching current costs with current revenues. 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, when actual inflation rates and inventory levels have been determined. | ||||||||||||
Due to net deflationary trends in 2013, a benefit of $27 was recorded to merchandise costs, to reduce the cumulative LIFO valuation on merchandise inventories. Due to net inflationary trends in 2012 and 2011, merchandise inventories valued at LIFO were lower than FIFO, resulting in a charge to merchandise costs of $21 and $87, respectively. At the end of 2013 and 2012, the cumulative impact of the LIFO valuation on merchandise inventories was $81 and $108, 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 the results of the actual physical inventory counts, which generally occur in the second and fourth fiscal quarters of the fiscal year. 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 separated 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. | ||||||||||||
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 of an asset are capitalized. Assets that were removed during the remodel, refurbishment or improvement are retired. Assets classified as held for sale were not material at the end of 2013 or 2012. | ||||||||||||
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 occur that 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 group’s net 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 other valuation techniques. Impairment charges, included in selling, general and administrative expenses on the consolidated statements of income, in 2013, 2012, and 2011 were immaterial. | ||||||||||||
Software Costs | The Company capitalizes certain computer software and software development costs incurred in connection with 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. | |||||||||||
Other Assets | Other Assets | |||||||||||
Other assets consist of the following at the end of 2013 and 2012: | ||||||||||||
2013 | 2012 | |||||||||||
Prepaid rents, lease costs, and long-term deposits | $ | 236 | $ | 230 | ||||||||
Receivables from governmental entities | 128 | 225 | ||||||||||
Cash surrender value of life insurance | 74 | 76 | ||||||||||
Goodwill, net | 63 | 66 | ||||||||||
Other | 61 | 56 | ||||||||||
Other Assets | $ | 562 | $ | 653 | ||||||||
Receivables from governmental entities largely consists of various tax-related items including amounts deposited with taxing authorities in connection with ongoing income tax audits and non-current deferred tax assets. The Company adjusts the carrying value of its employee life insurance contracts to the net cash surrender value at the end of each reporting period. Goodwill resulting from certain business combinations is reviewed for impairment in the fourth quarter of each fiscal year, or more frequently if circumstances dictate. No impairment of goodwill has been incurred to date. | ||||||||||||
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 2013 and 2012 are $493 and $565, 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 a wholly-owned captive insurance subsidiary and participation in a reinsurance pool, 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. As of the end of 2013 and 2012, these insurance liabilities were $727 and $688 in the aggregate, respectively, and were included in accounts payable, accrued salaries and benefits, and other current liabilities on 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 members. 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 member 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 2013 and 2012: | ||||||||||||
2013 | 2012 | |||||||||||
Insurance-related liabilities | $ | 346 | $ | 308 | ||||||||
Deferred sales | 204 | 159 | ||||||||||
Cash card liability | 159 | 133 | ||||||||||
Other current liabilities | 162 | 135 | ||||||||||
Sales return reserve | 95 | 86 | ||||||||||
Tax-related liabilities | 77 | 88 | ||||||||||
Vendor consideration liabilities | 46 | 57 | ||||||||||
Other current liabilities | $ | 1,089 | $ | 966 | ||||||||
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. Currently, 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 $458 and $284 at the end of 2013 and 2012, respectively. 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, however, that this practice effectively mitigates counterparty risk. 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 2013 and 2012. | ||||||||||||
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 were immaterial in 2013, 2012, and 2011. | ||||||||||||
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-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 some purchases of electricity and natural gas, in addition to fuel for its gas stations, on an index basis. 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 resulting from this process 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 all monetary assets and revaluing or settling monetary liabilities denominated in currencies other than the functional currency in interest income and other, net in the accompanying condensed 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. | ||||||||||||
Revenue Recognition | Revenue Recognition | |||||||||||
The Company generally recognizes sales, which include shipping fees where applicable, net of estimated 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 on 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, net of the estimated net realizable value of merchandise inventories to be returned and any estimated disposition costs. Amounts collected from members, which under common trade practices are referred to as sales 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 as commissions. 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 and related shipping fees are 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 as commissions earned, which is reflected in net sales. | ||||||||||||
The Company accounts for membership fee revenue, net of estimated refunds, on a deferred basis, whereby revenue is recognized ratably over the one-year membership period. The Company’s Executive Members qualify for a 2% reward (up to a maximum of $750 per year on qualified purchases), which can be redeemed 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 on 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 $970, $900, and $790 in 2013, 2012, and 2011, 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, utilities, and depreciation on production equipment in fresh foods and certain ancillary departments. | ||||||||||||
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 utilities, bank charges, rent and substantially all building and equipment depreciation, as well as other operating costs incurred to support warehouse operations. | ||||||||||||
Marketing and Promotional Expenses | Marketing and Promotional Expenses | |||||||||||
Marketing and promotional costs are expensed as incurred and are included in selling, general and administrative expenses in the accompanying consolidated statements of income. | ||||||||||||
Stock-Based Compensation | Stock-Based Compensation | |||||||||||
Compensation expense for all stock-based awards granted is recognized using the straight-line method. The fair value of restricted stock units (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. | ||||||||||||
While options and RSUs granted to employees generally vest over five years, all grants 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 because the estimate is inconsequential in light of historical experience and considering the awards vest on a quarterly basis. The impact of actual forfeitures arising in the event of involuntary termination is recognized as actual forfeitures occur. Stock options have a ten-year term. Stock-based compensation expense is predominantly included in selling, general and administrative expenses on 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 2062, with the exception of one lease in the Company’s United Kingdom 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 exercised extension options, from the date the Company has control of the property. Certain leases provide for periodic rental increases based on price indices, and some of the leases provide for rents based on the greater of minimum guaranteed amounts or sales volume. | ||||||||||||
The Company has entered into capital leases for warehouse locations, expiring at various dates through 2040. Capital lease assets are included in 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. Interest on these obligations is included in interest expense. | ||||||||||||
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 capital asset at the inception of the lease term based upon the estimated fair market 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 capitalized ARO assets are depreciated using the same depreciation convention as the respective leasehold improvement assets and are included with buildings and improvements. Estimated ARO liabilities associated with these leases amounted to $50 and $44 at the end of 2013 and 2012, 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. | ||||||||||||
Interest Income and Other, Net | Interest Income and Other, Net | |||||||||||
Interest income and other, net includes: | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Interest income | $ | 44 | $ | 49 | $ | 41 | ||||||
Foreign-currency transactions gains, net | 39 | 40 | 9 | |||||||||
Other, net | 14 | 14 | 10 | |||||||||
Interest income and other, net | $ | 97 | $ | 103 | $ | 60 | ||||||
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 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. When facts and circumstances change, the Company reassesses these probabilities and records any changes in the consolidated financial statements as appropriate. See Note 9 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 exercise and vesting to the participant of all potentially dilutive common shares outstanding using the treasury stock method for shares subject to stock options and restricted stock units 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 value is deducted from additional paid-in capital and retained earnings. See Note 6 for additional information. | ||||||||||||
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements | |||||||||||
In June 2011, the Financial Accounting Standards Board (FASB) issued guidance that eliminated the option to report other comprehensive income and its components in the statement of changes in equity. Instead, an entity is required to present either a continuous statement of net income and other comprehensive income or to present the information in two separate but consecutive statements. The new guidance must be applied retrospectively and was effective for fiscal years and interim periods within those years beginning after December 15, 2011. The Company adopted this guidance at the beginning of its first quarter of 2013. | ||||||||||||
In September 2011, the FASB issued guidance to amend the rules related to testing goodwill for impairment. The revised guidance allows an initial qualitative evaluation, based on the entity’s events and circumstances, to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The results of this qualitative assessment determine whether it is necessary to perform further impairment tests. The new guidance was effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. The Company adopted this guidance at the beginning of its first quarter of 2013. Adoption of this guidance had no impact on the consolidated financial statements. | ||||||||||||
Recent Accounting Pronouncements Not Yet Adopted | Recent Accounting Pronouncements Not Yet Adopted | |||||||||||
In February 2013, the FASB issued guidance related to reclassifications out of accumulated other comprehensive income. An entity will be required to disclose the net income line items impacted by significant reclassifications out of accumulated other comprehensive income if the item is reclassified in its entirety. For other amounts that are not required to be reclassified in their entirety to net income cross-references to other disclosures required under U.S. GAAP are required to provide additional detail about those amounts. The new guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2012. The Company plans to adopt this guidance at the beginning of its first quarter of fiscal year 2014. Adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements or disclosures. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | |||||||||||
Sep. 01, 2013 | ||||||||||||
Accounting Policies [Abstract] | ||||||||||||
Schedule of Receivables, Net | Receivables consist of the following at the end of 2013 and 2012: | |||||||||||
2013 | 2012 | |||||||||||
Vendor receivables | $ | 581 | $ | 545 | ||||||||
Reinsurance receivables | 238 | 226 | ||||||||||
Receivables from governmental entities | 228 | 87 | ||||||||||
Third-party pharmacy receivables | 102 | 104 | ||||||||||
Other receivables, net | 52 | 64 | ||||||||||
Receivables, net | $ | 1,201 | $ | 1,026 | ||||||||
Schedule of Merchandise Inventories | Merchandise inventories consist of the following at the end of 2013 and 2012: | |||||||||||
2013 | 2012 | |||||||||||
United States (primarily LIFO) | $ | 5,560 | $ | 4,967 | ||||||||
Foreign (FIFO) | 2,334 | 2,129 | ||||||||||
Merchandise inventories | $ | 7,894 | $ | 7,096 | ||||||||
Schedule of Other Assets | Other assets consist of the following at the end of 2013 and 2012: | |||||||||||
2013 | 2012 | |||||||||||
Prepaid rents, lease costs, and long-term deposits | $ | 236 | $ | 230 | ||||||||
Receivables from governmental entities | 128 | 225 | ||||||||||
Cash surrender value of life insurance | 74 | 76 | ||||||||||
Goodwill, net | 63 | 66 | ||||||||||
Other | 61 | 56 | ||||||||||
Other Assets | $ | 562 | $ | 653 | ||||||||
Schedule of Other Current Liabilities | Other current liabilities consist of the following at the end of 2013 and 2012: | |||||||||||
2013 | 2012 | |||||||||||
Insurance-related liabilities | $ | 346 | $ | 308 | ||||||||
Deferred sales | 204 | 159 | ||||||||||
Cash card liability | 159 | 133 | ||||||||||
Other current liabilities | 162 | 135 | ||||||||||
Sales return reserve | 95 | 86 | ||||||||||
Tax-related liabilities | 77 | 88 | ||||||||||
Vendor consideration liabilities | 46 | 57 | ||||||||||
Other current liabilities | $ | 1,089 | $ | 966 | ||||||||
Schedule of Interest Income and Other, Net | Interest income and other, net includes: | |||||||||||
2013 | 2012 | 2011 | ||||||||||
Interest income | $ | 44 | $ | 49 | $ | 41 | ||||||
Foreign-currency transactions gains, net | 39 | 40 | 9 | |||||||||
Other, net | 14 | 14 | 10 | |||||||||
Interest income and other, net | $ | 97 | $ | 103 | $ | 60 | ||||||
Investments_Tables
Investments (Tables) | 12 Months Ended | |||||||||||
Sep. 01, 2013 | ||||||||||||
Investments, Debt and Equity Securities [Abstract] | ||||||||||||
Available for Sale and Held to Maturity Investments | The Company’s investments at the end of 2013 and 2012, were as follows: | |||||||||||
2013:00:00 | Cost | Unrealized | Recorded | |||||||||
Basis | Gains, Net | Basis | ||||||||||
Available-for-sale: | ||||||||||||
Government and agency securities(1) | $ | 1,263 | $ | 0 | $ | 1,263 | ||||||
Corporate notes and bonds | 9 | 0 | 9 | |||||||||
Asset and mortgage-backed securities | 5 | 0 | 5 | |||||||||
Total available-for-sale | 1,277 | 0 | 1,277 | |||||||||
Held-to-maturity: | ||||||||||||
Certificates of deposit | 124 | 124 | ||||||||||
Bankers' acceptances | 79 | 79 | ||||||||||
Total held-to-maturity | 203 | 203 | ||||||||||
Total Short-Term Investments | $ | 1,480 | $ | 0 | $ | 1,480 | ||||||
_______________ | ||||||||||||
-1 | Includes U.S. and Canadian government and agency securities. | |||||||||||
2012:00:00 | Cost | Unrealized | Recorded | |||||||||
Basis | Gains, Net | Basis | ||||||||||
Available-for-sale: | ||||||||||||
U.S. government and agency securities | $ | 776 | $ | 6 | $ | 782 | ||||||
Corporate notes and bonds | 54 | 0 | 54 | |||||||||
FDIC-insured corporate bonds | 35 | 0 | 35 | |||||||||
Asset and mortgage-backed securities | 8 | 0 | 8 | |||||||||
Total available-for-sale | 873 | 6 | 879 | |||||||||
Held-to-maturity: | ||||||||||||
Certificates of deposit | 447 | 447 | ||||||||||
Total Short-Term Investments | $ | 1,320 | $ | 6 | $ | 1,326 | ||||||
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 2013, were as follows: | |||||||||||
Available-For-Sale | Held-To-Maturity | |||||||||||
Cost Basis | Fair Value | |||||||||||
Due in one year or less | $ | 628 | $ | 628 | $ | 203 | ||||||
Due after one year through five years | 632 | 632 | 0 | |||||||||
Due after five years | 17 | 17 | 0 | |||||||||
$ | 1,277 | $ | 1,277 | $ | 203 | |||||||
Fair_Value_Measurement_Tables
Fair Value Measurement (Tables) | 12 Months Ended | |||||||
Sep. 01, 2013 | ||||||||
Fair Value Disclosures [Abstract] | ||||||||
Fair Value of Financial Assets and Liabilities Measured on Recurring Basis | The tables below present information at the end of 2013 and 2012, 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. | |||||||
2013:00:00 | Level 1 | Level 2 | ||||||
Money market mutual funds(1) | $ | 87 | $ | 0 | ||||
Investment in government and agency securities(2) | 0 | 1,263 | ||||||
Investment in corporate notes and bonds | 0 | 9 | ||||||
Investment in asset and mortgage-backed securities | 0 | 5 | ||||||
Forward foreign-exchange contracts, in asset position(3) | 0 | 3 | ||||||
Forward foreign-exchange contracts, in (liability) position(3) | 0 | (3 | ) | |||||
Total | $ | 87 | $ | 1,277 | ||||
2012:00:00 | Level 1 | Level 2 | ||||||
Money market mutual funds(1) | $ | 77 | $ | 0 | ||||
Investment in U.S. government and agency securities(2) | 0 | 794 | ||||||
Investment in corporate notes and bonds | 0 | 54 | ||||||
Investment in FDIC-insured corporate bonds | 0 | 35 | ||||||
Investment in asset and mortgage-backed securities | 0 | 8 | ||||||
Forward foreign-exchange contracts, in asset position(3) | 0 | 1 | ||||||
Forward foreign-exchange contracts, in (liability) position(3) | 0 | (3 | ) | |||||
Total | $ | 77 | $ | 889 | ||||
_______________ | ||||||||
-1 | Included in cash and cash equivalents in the accompanying consolidated balance sheets. | |||||||
-2 | There were no securities included in cash and cash equivalents and $1,263 included in short-term investments in the accompanying consolidated balance sheets at the end of 2013. $12 and $782 included in cash and cash equivalents and short-term investments, respectively, in the accompanying consolidated balance sheets at the end of 2012. | |||||||
-3 | 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 | |||||||||||||||
Sep. 01, 2013 | ||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||
Schedule of Short-term Debt [Table Text Block] | The weighted average borrowings, maximum borrowings, and weighted average interest rate under all short-term borrowing arrangements, were as follows for 2013 and 2012: | |||||||||||||||
Category of Aggregate | Maximum Amount | Average Amount | Weighted Average | |||||||||||||
Short-term Borrowings | Outstanding | Outstanding | Interest Rate | |||||||||||||
During the Fiscal Year | During the Fiscal Year | During the Fiscal Year | ||||||||||||||
2013:00:00 | ||||||||||||||||
Bank borrowings: | ||||||||||||||||
Japan | $ | 157 | $ | 56 | 0.56 | % | ||||||||||
Bank overdraft facility: | ||||||||||||||||
United Kingdom | 14 | 4 | 1.5 | |||||||||||||
2012:00:00 | ||||||||||||||||
Bank borrowings: | ||||||||||||||||
Japan | $ | 83 | $ | 57 | 0.58 | % | ||||||||||
Bank overdraft facility: | ||||||||||||||||
United Kingdom | 3 | 0 | 1.5 | |||||||||||||
Carrying Value and Estimated Fair Value of Company's Long-Term Debt | The carrying value and estimated fair value of the Company’s long-term debt at the end of 2013 and 2012 consisted of the following: | |||||||||||||||
2013 | 2012 | |||||||||||||||
Carrying | Fair | Carrying | Fair | |||||||||||||
Value | Value | Value | Value | |||||||||||||
5.5% Senior Notes due March 2017 | $ | 1,098 | $ | 1,248 | $ | 1,097 | $ | 1,325 | ||||||||
0.65% Senior Notes due December 2015 | 1,199 | 1,200 | 0 | 0 | ||||||||||||
1.125% Senior Notes due December 2017 | 1,100 | 1,065 | 0 | 0 | ||||||||||||
1.7% Senior Notes due December 2019 | 1,198 | 1,157 | 0 | 0 | ||||||||||||
Other long-term debt | 403 | 412 | 285 | 338 | ||||||||||||
Total long-term debt | 4,998 | 5,082 | 1,382 | 1,663 | ||||||||||||
Less current portion | 0 | 0 | 1 | 1 | ||||||||||||
Long-term debt, excluding current portion | $ | 4,998 | $ | 5,082 | $ | 1,381 | $ | 1,662 | ||||||||
Schedule of Maturities of Long-term Debt [Table Text Block] | Maturities of long-term debt during the next five fiscal years and thereafter are as follows: | |||||||||||||||
2014 | $ | 0 | ||||||||||||||
2015 | 0 | |||||||||||||||
2016 | 1,301 | |||||||||||||||
2017 | 1,099 | |||||||||||||||
2018 | 1,196 | |||||||||||||||
Thereafter | 1,402 | |||||||||||||||
Total | $ | 4,998 | ||||||||||||||
Leases_Tables
Leases (Tables) | 12 Months Ended | |||||||
Sep. 01, 2013 | ||||||||
Leases [Abstract] | ||||||||
Schedule Of Future Minimum Lease Payments For Capital And Operating Leases | At the end of 2013, future minimum payments, net of sub-lease income of $150 for all years combined, under non-cancelable operating leases with terms of at least one year and capital leases were as follows: | |||||||
Operating | Capital | |||||||
Leases | Leases | |||||||
2014 | $ | 189 | $ | 17 | ||||
2015 | 175 | 17 | ||||||
2016 | 167 | 16 | ||||||
2017 | 160 | 16 | ||||||
2018 | 153 | 16 | ||||||
Thereafter | 1,753 | 338 | ||||||
Total | $ | 2,597 | 420 | |||||
Less amount representing interest | (224 | ) | ||||||
Net present value of minimum lease payments | 196 | |||||||
Less current installments(1) | (4 | ) | ||||||
Long-term capital lease obligations less current installments(2) | $ | 192 | ||||||
_______________ | ||||||||
-1 | Included in other current liabilities. | |||||||
-2 | Included in deferred income taxes and other liabilities. |
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 12 Months Ended | ||||||||||
Sep. 01, 2013 | |||||||||||
Stockholders' Equity Note [Abstract] | |||||||||||
Stock Repurchased Activity | The following table summarizes the Company’s stock repurchase activity: | ||||||||||
Shares | Average | Total Cost | |||||||||
Repurchased | Price per | ||||||||||
(000’s) | Share | ||||||||||
2013 | 357 | $ | 96.41 | $ | 34 | ||||||
2012 | 7,272 | 84.75 | 617 | ||||||||
2011 | 8,939 | 71.74 | 641 | ||||||||
StockBased_Compensation_Plans_
Stock-Based Compensation Plans (Tables) | 12 Months Ended | ||||||||||||
Sep. 01, 2013 | |||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||
Summary of Stock Option Activity | The following table summarizes stock option transactions during 2013: | ||||||||||||
Number Of | Weighted- | Weighted- | Aggregate | ||||||||||
Options | Average | Average | Intrinsic | ||||||||||
(in 000’s) | Exercise | Remaining | Value(1) | ||||||||||
Price | Contractual | ||||||||||||
Term | |||||||||||||
(in years) | |||||||||||||
Outstanding at the end of 2012 | 3,161 | $ | 40.9 | ||||||||||
Exercised | (1,435 | ) | 36.22 | ||||||||||
Special cash dividend | 221 | N/A | |||||||||||
Outstanding at the end of 2013 | 1,947 | $ | 39.7 | 1.38 | $ | 140 | |||||||
_______________ | |||||||||||||
-1 | The difference between the exercise price and market value of common stock at the end of 2013. | ||||||||||||
Summary Of Stock Options Outstanding | The following is a summary of stock options outstanding at the end of 2013: | ||||||||||||
Options Outstanding and Exercisable | |||||||||||||
Range of Prices(1) | Number of | Weighted- | Weighted- | ||||||||||
Options | Average | Average | |||||||||||
(in 000’s) | Remaining | Exercise | |||||||||||
Contractual | Price | ||||||||||||
Life | |||||||||||||
$34.71–$40.69 | 1,775 | 1.36 | $ | 39.39 | |||||||||
$42.73–$43.17 | 172 | 1.59 | 42.93 | ||||||||||
1,947 | 1.38 | $ | 39.7 | ||||||||||
_______________ | |||||||||||||
(1) Prices include the effect of the special cash dividend noted above. | |||||||||||||
Tax Benefits Realized and Intrinsic Value Related to Total Stock Options Exercised | The tax benefits realized, derived from the compensation deductions resulting from the option exercises, and intrinsic value related to total stock options exercised during 2013, 2012, and 2011 are provided in the following table: | ||||||||||||
2013 | 2012 | 2011 | |||||||||||
Actual tax benefit realized for stock options exercised | $ | 33 | $ | 50 | $ | 78 | |||||||
Intrinsic value of stock options exercised(1) | $ | 94 | $ | 137 | $ | 227 | |||||||
_______________ | |||||||||||||
(1) The difference between the exercise price and market value of common stock measured at each individual exercise date | |||||||||||||
Summary of RSU Transactions | The following table summarizes RSU transactions during 2013: | ||||||||||||
Number of | Weighted-Average | ||||||||||||
Units | Grant Date Fair | ||||||||||||
(in 000’s) | Value | ||||||||||||
Outstanding at the end of 2012 | 9,260 | $ | 66.14 | ||||||||||
Granted | 4,192 | 90.99 | |||||||||||
Vested and delivered | (3,872 | ) | 67.17 | ||||||||||
Forfeited | (231 | ) | 71.19 | ||||||||||
Special cash dividend | 732 | N/A | |||||||||||
Outstanding at the end of 2013 | 10,081 | $ | 72.52 | ||||||||||
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: | ||||||||||||
2013 | 2012 | 2011 | |||||||||||
Stock-based compensation expense before income taxes | $ | 285 | $ | 241 | $ | 207 | |||||||
Less recognized income tax benefit | (94 | ) | (79 | ) | (67 | ) | |||||||
Stock-based compensation expense, net of income taxes | $ | 191 | $ | 162 | $ | 140 | |||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||||||||||
Sep. 01, 2013 | |||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||
Schedule of Income before Income Tax, Domestic and Foreign | Income before income taxes is comprised of the following: | ||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||
Domestic (including Puerto Rico) | $ | 2,070 | $ | 1,809 | $ | 1,526 | |||||||||||||||
Foreign | 981 | 958 | 857 | ||||||||||||||||||
Total | $ | 3,051 | $ | 2,767 | $ | 2,383 | |||||||||||||||
Schedule of Components of Income Tax Expense (Benefit) | The provisions for income taxes for 2013, 2012, and 2011 are as follows: | ||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||
Federal: | |||||||||||||||||||||
Current | $ | 572 | $ | 591 | $ | 409 | |||||||||||||||
Deferred | 16 | 12 | 74 | ||||||||||||||||||
Total federal | 588 | 603 | 483 | ||||||||||||||||||
State: | |||||||||||||||||||||
Current | 109 | 100 | 78 | ||||||||||||||||||
Deferred | 4 | 2 | 14 | ||||||||||||||||||
Total state | 113 | 102 | 92 | ||||||||||||||||||
Foreign: | |||||||||||||||||||||
Current | 302 | 312 | 270 | ||||||||||||||||||
Deferred | (13 | ) | (17 | ) | (4 | ) | |||||||||||||||
Total foreign | 289 | 295 | 266 | ||||||||||||||||||
Total provision for income taxes | $ | 990 | $ | 1,000 | $ | 841 | |||||||||||||||
Schedule of Effective Income Tax Rate Reconciliation | The reconciliation between the statutory tax rate and the effective rate for 2013, 2012, and 2011 is as follows: | ||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||
Federal taxes at statutory rate | $ | 1,068 | 35 | % | $ | 969 | 35 | % | $ | 834 | 35 | % | |||||||||
State taxes, net | 66 | 2.1 | 59 | 2.1 | 55 | 2.4 | |||||||||||||||
Foreign taxes, net | (87 | ) | (2.8 | ) | (61 | ) | (2.2 | ) | (66 | ) | (2.8 | ) | |||||||||
Employee stock ownership plan (ESOP) | (65 | ) | (2.1 | ) | (7 | ) | (0.3 | ) | (6 | ) | (0.3 | ) | |||||||||
Other | 8 | 0.2 | 40 | 1.5 | 24 | 1 | |||||||||||||||
Total | $ | 990 | 32.4 | % | $ | 1,000 | 36.1 | % | $ | 841 | 35.3 | % | |||||||||
Schedule of Deferred Tax Assets and Liabilities | The components of the deferred tax assets (liabilities) are as follows: | ||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||
Equity compensation | $ | 80 | $ | 79 | |||||||||||||||||
Deferred income/membership fees | 130 | 148 | |||||||||||||||||||
Accrued liabilities and reserves | 530 | 461 | |||||||||||||||||||
Other | 42 | 55 | |||||||||||||||||||
Property and equipment | (558 | ) | (522 | ) | |||||||||||||||||
Merchandise inventories | (190 | ) | (182 | ) | |||||||||||||||||
Net deferred tax assets | $ | 34 | $ | 39 | |||||||||||||||||
Schedule Of Gross Unrecognized Tax Benefits Table | A reconciliation of the beginning and ending amount of gross unrecognized tax benefits for 2013 and 2012 is as follows: | ||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||
Gross unrecognized tax benefit at beginning of year | $ | 116 | $ | 106 | |||||||||||||||||
Gross increases—current year tax positions | 10 | 15 | |||||||||||||||||||
Gross increases—tax positions in prior years | 5 | 3 | |||||||||||||||||||
Gross decreases—tax positions in prior years | (13 | ) | (3 | ) | |||||||||||||||||
Settlements | (38 | ) | (3 | ) | |||||||||||||||||
Lapse of statute of limitations | 0 | (2 | ) | ||||||||||||||||||
Gross unrecognized tax benefit at end of year | $ | 80 | $ | 116 | |||||||||||||||||
Net_Income_per_Common_and_Comm1
Net Income per Common and Common Equivalent Share (Tables) | 12 Months Ended | |||||||||||
Sep. 01, 2013 | ||||||||||||
Schedule of Earnings Per Share, Basic and Diluted [Abstract] | ||||||||||||
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | 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): | |||||||||||
2013 | 2012 | 2011 | ||||||||||
Net income available to common stockholders after assumed conversions of dilutive securities | $ | 2,039 | $ | 1,710 | $ | 1,463 | ||||||
Weighted average number of common shares used in basic net income per common share | 435,741 | 433,620 | 436,119 | |||||||||
RSUs and stock options | 4,552 | 4,906 | 6,063 | |||||||||
Conversion of convertible notes | 219 | 847 | 912 | |||||||||
Weighted average number of common shares and dilutive potential of common stock used in diluted net income per share | 440,512 | 439,373 | 443,094 | |||||||||
Segment_Reporting_Tables
Segment Reporting (Tables) | 12 Months Ended | |||||||||||||||
Sep. 01, 2013 | ||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||
Segment Reporting Information, by Segment | The Company and its subsidiaries are principally engaged in the operation of membership warehouses in the U.S., Canada, Mexico, the United Kingdom, Japan, and Australia 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 | Canadian | Other | Total | |||||||||||||
Operations | Operations | International | ||||||||||||||
Operations | ||||||||||||||||
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 | ||||||||||||
2012 | ||||||||||||||||
Total revenue | $ | 71,776 | $ | 15,717 | $ | 11,644 | $ | 99,137 | ||||||||
Operating income | 1,632 | 668 | 459 | 2,759 | ||||||||||||
Depreciation and amortization | 667 | 117 | 124 | 908 | ||||||||||||
Additions to property and equipment | 1,012 | 170 | 298 | 1,480 | ||||||||||||
Net property and equipment | 9,236 | 1,664 | 2,061 | 12,961 | ||||||||||||
Total assets | 18,401 | 4,237 | 4,502 | 27,140 | ||||||||||||
2011 | ||||||||||||||||
Total revenue | $ | 64,904 | $ | 14,020 | $ | 9,991 | $ | 88,915 | ||||||||
Operating income | 1,395 | 621 | 423 | 2,439 | ||||||||||||
Depreciation and amortization | 640 | 117 | 98 | 855 | ||||||||||||
Additions to property and equipment | 876 | 144 | 270 | 1,290 | ||||||||||||
Net property and equipment | 8,870 | 1,608 | 1,954 | 12,432 | ||||||||||||
Total assets | 18,558 | 3,741 | 4,462 | 26,761 | ||||||||||||
Quarterly_Financial_Data_Unaud1
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended | ||||||||||||||||||||
Sep. 01, 2013 | |||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||
Unaudited Quarterly Results of Operations | The two tables that follow reflect the unaudited quarterly results of operations for 2013 and 2012. | ||||||||||||||||||||
52 Weeks Ended September 1, 2013 | |||||||||||||||||||||
First | Second | Third | Fourth | Total | |||||||||||||||||
Quarter | Quarter | Quarter | Quarter | (52 Weeks) | |||||||||||||||||
(12 Weeks) | (12 Weeks) | (12 Weeks) | (16 Weeks) | ||||||||||||||||||
REVENUE | |||||||||||||||||||||
Net sales | $ | 23,204 | $ | 24,343 | $ | 23,552 | $ | 31,771 | $ | 102,870 | |||||||||||
Membership fees | 511 | 528 | 531 | 716 | 2,286 | ||||||||||||||||
Total revenue | 23,715 | 24,871 | 24,083 | 32,487 | 105,156 | ||||||||||||||||
OPERATING EXPENSES | |||||||||||||||||||||
Merchandise costs | 20,726 | 21,766 | 21,038 | 28,418 | 91,948 | ||||||||||||||||
Selling, general and administrative | 2,332 | 2,361 | 2,313 | 3,098 | 10,104 | ||||||||||||||||
Preopening expenses | 18 | 6 | 10 | 17 | 51 | ||||||||||||||||
Operating income | 639 | 738 | 722 | 954 | 3,053 | ||||||||||||||||
OTHER INCOME (EXPENSE) | |||||||||||||||||||||
Interest expense | (13 | ) | (25 | ) | (25 | ) | (36 | ) | (99 | ) | |||||||||||
Interest income and other, net | 20 | 26 | 15 | 36 | 97 | ||||||||||||||||
INCOME BEFORE INCOME TAXES | 646 | 739 | 712 | 954 | 3,051 | ||||||||||||||||
Provision for income taxes | 225 | 185 | (1) | 248 | 332 | 990 | |||||||||||||||
Net income including noncontrolling interests | 421 | 554 | 464 | 622 | 2,061 | ||||||||||||||||
Net income attributable to noncontrolling interests | (5 | ) | (7 | ) | (5 | ) | (5 | ) | (22 | ) | |||||||||||
NET INCOME ATTRIBUTABLE TO COSTCO | $ | 416 | $ | 547 | $ | 459 | $ | 617 | $ | 2,039 | |||||||||||
NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO: | |||||||||||||||||||||
Basic | $ | 0.96 | $ | 1.26 | $ | 1.05 | $ | 1.41 | $ | 4.68 | |||||||||||
Diluted | $ | 0.95 | $ | 1.24 | $ | 1.04 | $ | 1.4 | $ | 4.63 | |||||||||||
Shares used in calculation (000’s) | |||||||||||||||||||||
Basic | 433,423 | 435,975 | 436,488 | 436,752 | 435,741 | ||||||||||||||||
Diluted | 438,643 | 439,812 | 440,780 | 441,907 | 440,512 | ||||||||||||||||
CASH DIVIDENDS DECLARED PER COMMON SHARE | $ | 0.275 | $ | 7.275 | (2) | $ | 0.31 | $ | 0.31 | $ | 8.17 | ||||||||||
_______________ | |||||||||||||||||||||
-1 | Includes a $62 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 $7.00 per share paid in December 2012. | ||||||||||||||||||||
Note 13—Quarterly Financial Data (Unaudited) (Continued) | |||||||||||||||||||||
53 Weeks Ended September 2, 2012 | |||||||||||||||||||||
First | Second | Third | Fourth | Total | |||||||||||||||||
Quarter | Quarter | Quarter | Quarter | (53 Weeks) | |||||||||||||||||
(12 Weeks) | (12 Weeks) | (12 Weeks) | (17 Weeks) | ||||||||||||||||||
REVENUE | |||||||||||||||||||||
Net sales | $ | 21,181 | $ | 22,508 | $ | 21,849 | $ | 31,524 | $ | 97,062 | |||||||||||
Membership fees | 447 | 459 | 475 | 694 | 2,075 | ||||||||||||||||
Total revenue | 21,628 | 22,967 | 22,324 | 32,218 | 99,137 | ||||||||||||||||
OPERATING EXPENSES | |||||||||||||||||||||
Merchandise costs | 18,931 | 20,139 | 19,543 | 28,210 | 86,823 | ||||||||||||||||
Selling, general and administrative | 2,144 | (1) | 2,178 | 2,152 | 3,044 | 9,518 | |||||||||||||||
Preopening expenses | 10 | 6 | 6 | 15 | 37 | ||||||||||||||||
Operating income | 543 | 644 | 623 | 949 | 2,759 | ||||||||||||||||
OTHER INCOME (EXPENSE) | |||||||||||||||||||||
Interest expense | (27 | ) | (27 | ) | (19 | ) | (22 | ) | (95 | ) | |||||||||||
Interest income and other, net | 37 | 10 | 18 | 38 | 103 | ||||||||||||||||
INCOME BEFORE INCOME TAXES | 553 | 627 | 622 | 965 | 2,767 | ||||||||||||||||
Provision for income taxes | 225 | (2) | 215 | 217 | 343 | 1,000 | |||||||||||||||
Net income including noncontrolling interests | 328 | 412 | 405 | 622 | 1,767 | ||||||||||||||||
Net income attributable to noncontrolling interests | (8 | ) | (18 | ) | (19 | ) | (13 | ) | (58 | ) | |||||||||||
NET INCOME ATTRIBUTABLE TO COSTCO | $ | 320 | $ | 394 | $ | 386 | $ | 609 | $ | 1,709 | |||||||||||
NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO: | |||||||||||||||||||||
Basic | $ | 0.74 | $ | 0.91 | $ | 0.89 | $ | 1.41 | $ | 3.94 | |||||||||||
Diluted | $ | 0.73 | $ | 0.9 | $ | 0.88 | $ | 1.39 | $ | 3.89 | |||||||||||
Shares used in calculation (000’s) | |||||||||||||||||||||
Basic | 434,222 | 434,535 | 433,791 | 432,437 | 433,620 | ||||||||||||||||
Diluted | 440,615 | 439,468 | 439,166 | 438,344 | 439,373 | ||||||||||||||||
CASH DIVIDENDS DECLARED PER COMMON SHARE | $ | 0.24 | $ | 0.24 | $ | 0 | (3) | $ | 0.55 | (4 | ) | $ | 1.03 | ||||||||
_______________ | |||||||||||||||||||||
-1 | Includes a $17 charge to selling, general and administrative for contributions to an initiative reforming alcohol beverage laws in Washington State. | ||||||||||||||||||||
-2 | Includes a $24 charge relating to the settlement of an income tax audit in Mexico. | ||||||||||||||||||||
-3 | On May 9, 2012, subsequent to the end of the third quarter of 2012, the Board of Directors declared a quarterly cash dividend of $0.275 per share. | ||||||||||||||||||||
-4 | The quarterly dividend rate was $0.275 per share. |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) | 12 Months Ended | 1 Months Ended | 12 Months Ended | |||||||||||||||||
In Millions, unless otherwise specified | Sep. 01, 2013 | Sep. 02, 2012 | Aug. 28, 2011 | Sep. 01, 2013 | Sep. 02, 2012 | Jul. 31, 2012 | Sep. 01, 2013 | Sep. 01, 2013 | Sep. 01, 2013 | Sep. 01, 2013 | Sep. 01, 2013 | Sep. 01, 2013 | Sep. 01, 2013 | Sep. 01, 2013 | Sep. 01, 2013 | Sep. 01, 2013 | Sep. 01, 2013 | Sep. 01, 2013 | Sep. 01, 2013 | Sep. 01, 2013 |
warehouse | Forward Foreign Exchange Contracts | Forward Foreign Exchange Contracts | Costco Mexico | UNITED STATES | CANADA | MEXICO | UNITED KINGDOM | JAPAN | TAIWAN, PROVINCE OF CHINA | KOREA, REPUBLIC OF | AUSTRALIA | Building and Building Improvements [Member] | Building and Building Improvements [Member] | Furniture and Fixtures [Member] | Furniture and Fixtures [Member] | Software [Member] | Software [Member] | |||
warehouse | warehouse | warehouse | warehouse | warehouse | warehouse | warehouse | warehouse | Minimum [Member] | Maximum [Member] | Minimum [Member] | Maximum [Member] | Minimum [Member] | Maximum [Member] | |||||||
regions | ||||||||||||||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||||||||||||||
Asset Retirement Obligations, Noncurrent | $50 | $44 | ||||||||||||||||||
Maximum Reward Rebate Amount Per Customer Yearly | 2.00% | |||||||||||||||||||
Property, Plant and Equipment, Useful Life | 5 years | 50 years | 3 years | 20 years | 3 years | 7 years | ||||||||||||||
Payments To Acquire Minority Interest | 0 | 789 | 0 | |||||||||||||||||
Reduction In Sales | 970 | 900 | 790 | |||||||||||||||||
Accrued Insurance | 727 | 688 | ||||||||||||||||||
Outstanding Checks Unpresented For Payment | 493 | 565 | ||||||||||||||||||
Credit and Debit Card Receivables, at Carrying Value | 1,254 | 1,161 | ||||||||||||||||||
New Accounting Pronouncement or Change in Accounting Principle, Cumulative Effect of Change on Equity or Net Assets | 357 | |||||||||||||||||||
Number of warehouses operated | 634 | 451 | 85 | 33 | 25 | 18 | 10 | 9 | 3 | |||||||||||
Number of regions in country | 41 | |||||||||||||||||||
Purchase of equity interest | 50.00% | |||||||||||||||||||
Cumulative Impact To Consolidated Assets Liabilities And Equity From Adoption Of New Accounting Principle | 3.00% | |||||||||||||||||||
Inventory, LIFO Reserve, Period Charge | 27 | 21 | 87 | |||||||||||||||||
Inventory LIFO reserve cumulative impact | 81 | 108 | ||||||||||||||||||
Notional amount of forward foreign - exchange derivative | $458 | $284 |
Recovered_Sheet1
Summary Of Significant Accounting Policies (Receivables, Net) (Detail) (USD $) | Sep. 01, 2013 | Sep. 02, 2012 |
In Millions, unless otherwise specified | ||
Summary Of Significant Accounting Policies | ||
Vendor receivables | $581 | $545 |
Reinsurance receivables | 238 | 226 |
Third-party pharmacy receivables | 102 | 104 |
Receivables from governmental entities | 228 | 87 |
Other receivables | 52 | 64 |
Receivables, Net | $1,201 | $1,026 |
Recovered_Sheet2
Summary Of Significant Accounting Policies (Merchandise Inventories (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Sep. 01, 2013 | Sep. 02, 2012 | Aug. 28, 2011 |
Schedule of Inventory [Line Items] | |||
Inventory, LIFO Reserve, Period Charge | $27 | $21 | $87 |
Merchandise inventories | 7,894 | 7,096 | |
UNITED STATES | |||
Schedule of Inventory [Line Items] | |||
United States (primarily LIFO) | 5,560 | 4,967 | |
Foreign | |||
Schedule of Inventory [Line Items] | |||
Foreign (FIFO) | $2,334 | $2,129 |
Recovered_Sheet3
Summary Of Significant Accounting Policies (Other Assets) (Detail) (USD $) | Sep. 01, 2013 | Sep. 02, 2012 |
In Millions, unless otherwise specified | ||
Summary Of Significant Accounting Policies | ||
Prepaid rents, lease costs, and long-term deposits | $236 | $230 |
Receivables from governmental entities | 128 | 225 |
Cash surrender value of life insurance | 74 | 76 |
Goodwill, net | 63 | 66 |
Other | 61 | 56 |
Other Assets | $562 | $653 |
Recovered_Sheet4
Summary Of Significant Accounting Policies (Other Current Liabilities) (Detail) (USD $) | Sep. 01, 2013 | Sep. 02, 2012 |
In Millions, unless otherwise specified | ||
Summary Of Significant Accounting Policies | ||
Insurance-related liabilities | $346 | $308 |
Deferred sales | 204 | 159 |
Cash card liability | 159 | 133 |
Other current liabilities | 162 | 135 |
Tax-related liabilities | 77 | 88 |
Sales return reserve | 95 | 86 |
Vendor consideration liabilities | 46 | 57 |
Other Current Liabilities | $1,089 | $966 |
Summary_Of_Significant_Account4
Summary Of Significant Accounting Policies (Interest Income And Other, Net) (Detail) (USD $) | 3 Months Ended | 4 Months Ended | 12 Months Ended | ||||||||
In Millions, unless otherwise specified | 12-May-13 | Feb. 17, 2013 | Nov. 25, 2012 | 6-May-12 | Feb. 12, 2012 | Nov. 20, 2011 | Sep. 01, 2013 | Sep. 02, 2012 | Sep. 01, 2013 | Sep. 02, 2012 | Aug. 28, 2011 |
Summary Of Significant Accounting Policies | |||||||||||
Interest income, net | $44 | $49 | $41 | ||||||||
Foreign-currency transactions gains (losses), net | 39 | 40 | 9 | ||||||||
Earnings from affiliates and other, net | 14 | 14 | 10 | ||||||||
Interest Income and Other, Net | $15 | $26 | $20 | $18 | $10 | $37 | $36 | $38 | $97 | $103 | $60 |
Investments_Available_for_Sale
Investments - Available for Sale and Held to Maturity Investments (Detail) (USD $) | Sep. 01, 2013 | Sep. 02, 2012 | |
In Millions, unless otherwise specified | |||
Available For Sale And Held To Maturity [Line Items] | |||
Available-For-Sale, Cost Basis | $1,277 | ||
Available-for-sale, Recorded Basis, Total | 1,277 | ||
Held-to-maturity, cost basis | 203 | ||
Total investments, recorded basis | 1,480 | 1,326 | |
Short-term Investments | |||
Available For Sale And Held To Maturity [Line Items] | |||
Unrealized gains | 0 | 6 | |
Total investments, cost basis | 1,480 | 1,320 | |
Total investments, recorded basis | 1,480 | 1,326 | |
Short-term Investments | Available-for-sale Securities | |||
Available For Sale And Held To Maturity [Line Items] | |||
Available-For-Sale, Cost Basis | 1,277 | 873 | |
Unrealized gains | 0 | 6 | |
Available-for-sale, Recorded Basis, Total | 1,277 | 879 | |
Short-term Investments | Available-for-sale Securities | US Treasury and Government [Member] | |||
Available For Sale And Held To Maturity [Line Items] | |||
Available-For-Sale, Cost Basis | 776 | ||
Unrealized gains | 6 | ||
Available-for-sale, Recorded Basis, Total | 782 | ||
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 | 1,263 | [1] | |
Unrealized gains | 0 | [1] | |
Available-for-sale, Recorded Basis, Total | 1,263 | [1] | |
Short-term Investments | Available-for-sale Securities | Corporate notes and bonds | |||
Available For Sale And Held To Maturity [Line Items] | |||
Available-For-Sale, Cost Basis | 9 | 54 | |
Unrealized gains | 0 | 0 | |
Available-for-sale, Recorded Basis, Total | 9 | 54 | |
Short-term Investments | Available-for-sale Securities | FDIC-Insured corporate bonds | |||
Available For Sale And Held To Maturity [Line Items] | |||
Available-For-Sale, Cost Basis | 35 | ||
Unrealized gains | 0 | ||
Available-for-sale, Recorded Basis, Total | 35 | ||
Short-term Investments | Available-for-sale Securities | Asset and mortgage backed securities | |||
Available For Sale And Held To Maturity [Line Items] | |||
Available-For-Sale, Cost Basis | 5 | 8 | |
Unrealized gains | 0 | 0 | |
Available-for-sale, Recorded Basis, Total | 5 | 8 | |
Short-term Investments | Held-to-maturity Securities | |||
Available For Sale And Held To Maturity [Line Items] | |||
Held-to-maturity, cost basis | 203 | ||
Held-to-maturity, recorded basis | 203 | ||
Short-term Investments | Held-to-maturity Securities | Banker's Acceptances | |||
Available For Sale And Held To Maturity [Line Items] | |||
Held-to-maturity, cost basis | 79 | ||
Held-to-maturity, recorded basis | 79 | ||
Short-term Investments | Held-to-maturity Securities | Certificates of deposit | |||
Available For Sale And Held To Maturity [Line Items] | |||
Held-to-maturity, cost basis | 124 | 447 | |
Held-to-maturity, recorded basis | $124 | $447 | |
[1] | Includes U.S. and Canadian government and agency securities. |
Investments_Proceeds_from_Sale
Investments - Proceeds from Sales of Available for Sale Securities (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Sep. 01, 2013 | Sep. 02, 2012 | Aug. 28, 2011 |
Investments, Debt and Equity Securities [Abstract] | |||
Proceeds | $244 | $482 | $602 |
Investments_Maturities_of_Avai
Investments - Maturities of Available for Sale and Held to Maturity Securities (Details) (USD $) | Sep. 01, 2013 |
In Millions, unless otherwise specified | |
Available-For-Sale, Cost Basis | |
Due in one year or less | $628 |
Due after one year through five years | 632 |
Due after five years | 17 |
Available-For-Sale, Cost Basis, Total | 1,277 |
Available-For-Sale, Fair Value | |
Due in one year or less | 628 |
Due after one year through five years | 632 |
Due after five years | 17 |
Available-for-sale, Recorded Basis, Total | 1,277 |
Held-To-Maturity | |
Due in one year or less | 203 |
Due after one year through five years | 0 |
Due after five years | 0 |
Held-To-Maturity, Cost Basis, Total | $203 |
Fair_Value_Measurement_Fair_Va
Fair Value Measurement - Fair Value of Financial Assets and Financial Liabilities Measured on Recurring Basis (Details) (Fair Value, Measurements, Recurring [Member], USD $) | Sep. 01, 2013 | Sep. 02, 2012 | ||
In Millions, unless otherwise specified | ||||
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 | $1,277 | $889 | ||
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 | 87 | 77 | ||
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 | 0 | [1] | 0 | [1] |
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 | 87 | [1] | 77 | [1] |
US Treasury and Government [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 | 794 | [2] | ||
US Treasury and Government [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 | [2] | ||
Government and agency securities | 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 | 1,263 | [2] | ||
Government and agency securities | 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 | [2] | ||
Corporate notes and bonds | 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 | 9 | 54 | ||
Corporate notes and bonds | 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 | ||
FDIC-Insured corporate bonds | 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 | 35 | |||
FDIC-Insured corporate bonds | 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 | |||
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 | 8 | ||
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 | ||
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 | 3 | [3] | 1 | [3] |
Fair value of liabilities measured on recurring basis | -3 | [3] | -3 | [3] |
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 | 0 | [3] | 0 | [3] |
Fair value of liabilities measured on recurring basis | $0 | [3] | $0 | [3] |
[1] | Included in cash and cash equivalents in the accompanying consolidated balance sheets. | |||
[2] | There were no securities included in cash and cash equivalents and $1,263 included in short-term investments in the accompanying consolidated balance sheets at the end of 2013. $12 and $782 included in cash and cash equivalents and short-term investments, respectively, in the accompanying consolidated balance sheets at the end of 2012. | |||
[3] | 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. |
Fair_Value_Measurement_Fair_Va1
Fair Value Measurement - Fair Value of Financial Assets and Financial Liabilities Measured on Recurring Basis (Parenthetical) (Details) (USD $) | Sep. 01, 2013 | Sep. 02, 2012 | Aug. 28, 2011 | Aug. 29, 2010 |
In Millions, unless otherwise specified | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||||
Cash and cash equivalents | $4,644 | $3,528 | $4,009 | $3,214 |
Available-for-sale, Recorded Basis, Total | 1,277 | |||
US Treasury and Government [Member] | Fair Value, Measurements, Recurring [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||||
Cash and cash equivalents | 12 | |||
Available-for-sale, Recorded Basis, Total | $1,263 | $782 |
Debt_Carrying_Value_and_Estima
Debt (Carrying Value and Estimated Fair Value of Company's Long Term Debt) (Details) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Sep. 01, 2013 | Sep. 02, 2012 |
Debt Instrument [Line Items] | ||
Total long-term debt, carrying value | $4,998 | $1,382 |
Total long-term debt, fair value | 5,082 | 1,663 |
Less current portion, carrying value | 0 | 1 |
Less current portion, fair value | 0 | 1 |
Long-term debt, excluding current portion, carrying value | 4,998 | 1,381 |
Long-term debt, excluding current portion, fair value | 5,082 | 1,662 |
5.5% Senior Notes due March 2017 | ||
Debt Instrument [Line Items] | ||
Debt instrument, principal due date | 2017-03 | |
Debt instrument, stated interest rate (percent) | 5.50% | |
Total long-term debt, carrying value | 1,098 | 1,097 |
Total long-term debt, fair value | 1,248 | 1,325 |
0.65% Senior Notes due December 2015 | ||
Debt Instrument [Line Items] | ||
Debt instrument, principal due date | 2015-12 | |
Debt instrument, stated interest rate (percent) | 0.65% | |
Total long-term debt, carrying value | 1,199 | 0 |
Total long-term debt, fair value | 1,200 | 0 |
Senior Notes One Point One Two Five Percent Due December Fifteen Twenty Seventeen [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, principal due date | 2017-12 | |
Debt instrument, stated interest rate (percent) | 1.13% | |
Total long-term debt, carrying value | 1,100 | 0 |
Total long-term debt, fair value | 1,065 | 0 |
Senior Notes One Point Seven Percent Due December Twenty Nineteen [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, principal due date | 2019-12 | |
Debt instrument, stated interest rate (percent) | 1.70% | |
Total long-term debt, carrying value | 1,198 | 0 |
Total long-term debt, fair value | 1,157 | 0 |
Other Long Term Debt | ||
Debt Instrument [Line Items] | ||
Total long-term debt, carrying value | 403 | 285 |
Total long-term debt, fair value | $412 | $338 |
Senior Notes One Point Seven Percent Due December Twenty Nineteen [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Frequency of Periodic Payment | semi-annually on June 15 and December 15 | |
Senior Notes One Point One Two Five Percent Due December Fifteen Twenty Seventeen [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Frequency of Periodic Payment | semi-annually on June 15 and December 15 |
Debt_Schedule_Of_ShortTerm_Deb
Debt (Schedule Of Short-Term Debt) (Detail) (Details) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Sep. 01, 2013 | Sep. 02, 2012 |
JAPAN | ||
Short-term Debt [Line Items] | ||
Short-term Debt, Maximum Amount Outstanding During Period | $157 | $83 |
Short-term Debt, Average Outstanding Amount | 56 | 57 |
Short-term Debt, Weighted Average Interest Rate | 0.56% | 0.58% |
UNITED KINGDOM | ||
Short-term Debt [Line Items] | ||
Short-term Debt, Maximum Amount Outstanding During Period | 14 | 3 |
Short-term Debt, Average Outstanding Amount | 4 | 0 |
Short-term Debt, Weighted Average Interest Rate | 1.50% | 1.50% |
Short-term Debt [Member] | ||
Short-term Debt [Line Items] | ||
Line of Credit Facility, Current Borrowing Capacity | 700 | 438 |
Line of Credit Facility, Amount Outstanding | $36 | |
Short-term Debt [Member] | Minimum [Member] | ||
Short-term Debt [Line Items] | ||
Line of Credit Facility, Interest Rate During Period | 0.10% | |
Short-term Debt [Member] | Maximum [Member] | ||
Short-term Debt [Line Items] | ||
Line of Credit Facility, Interest Rate During Period | 4.31% |
Debt_Schedule_Of_LongTerm_Debt
Debt (Schedule Of Long-Term Debt Maturities) (Detail) (Details) (USD $) | Sep. 01, 2013 | Sep. 02, 2012 |
In Millions, unless otherwise specified | ||
Debt Disclosure [Abstract] | ||
2014 | $0 | |
2015 | 0 | |
2016 | 1,301 | |
2017 | 1,099 | |
2018 | 1,196 | |
Thereafter | 1,402 | |
Total long-term debt, carrying value | $4,998 | $1,382 |
Debt_Additional_Information_De
Debt (Additional Information) (Detail) (USD $) | Dec. 07, 2012 | Feb. 28, 2007 | Sep. 01, 2013 | Sep. 02, 2012 | Aug. 31, 1997 | Sep. 01, 2013 | Sep. 01, 2013 | Feb. 28, 2007 | Sep. 01, 2013 | Oct. 31, 2007 | Sep. 01, 2013 | Sep. 01, 2013 | Sep. 02, 2012 | Sep. 01, 2013 | Dec. 07, 2012 | Sep. 01, 2013 | Dec. 07, 2012 | Sep. 01, 2013 | Dec. 07, 2012 | Sep. 01, 2013 | 1-May-13 | Sep. 01, 2013 | Jul. 31, 2013 | Sep. 01, 2013 | Sep. 02, 2012 | Sep. 01, 2013 | Sep. 01, 2013 |
In Millions, except Share data, unless otherwise specified | Senior Notes [Member] | Senior Notes [Member] | Short-term Debt [Member] | Short-term Debt [Member] | Zero Coupon Notes 3 Point 5 Convertible Subordinated Notes [Member] | Zero Coupon Notes 3 Point 5 Convertible Subordinated Notes [Member] | Senior Notes 5 Point 5 Due March 2017 [Member] | Senior Notes 5 Point 5 Due March 2017 [Member] | Two Point Six Nine Five Promissory Notes Due October 2017 [Member] | Two Point Six Nine Five Promissory Notes Due October 2017 [Member] | Yen Tibor Plus Margin Term Loan Due June 2018 [Member] | Yen Tibor Plus Margin Term Loan Due June 2018 [Member] | Yen Tibor Plus Margin Term Loan Due June 2018 [Member] | 0.65% Senior Notes due December 2015 | 0.65% Senior Notes due December 2015 | Senior Notes One Point One Two Five Percent Due December Fifteen Twenty Seventeen [Member] | Senior Notes One Point One Two Five Percent Due December Fifteen Twenty Seventeen [Member] | Senior Notes One Point Seven Percent Due December Twenty Nineteen [Member] | Senior Notes One Point Seven Percent Due December Twenty Nineteen [Member] | Private Placement Notes One Point Zero Five Percent Due May Twenty Three [Member] [Member] | Private Placement Notes One Point Zero Five Percent Due May Twenty Three [Member] [Member] | 0.67% Term Loan Due 2016 [Member] | 0.67% Term Loan Due 2016 [Member] | Fixed Rate Note One Point One Eight Percent Due October Twenty Eighteen [Member] | Fixed Rate Note One Point One Eight Percent Due October Twenty Eighteen [Member] | Minimum [Member] | Maximum [Member] |
Short-term Debt [Member] | Short-term Debt [Member] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||
Line of Credit Facility, Current Borrowing Capacity | $700 | $438 | |||||||||||||||||||||||||
Line of Credit Facility, Amount Outstanding | 36 | ||||||||||||||||||||||||||
Line of Credit Facility, Interest Rate During Period | 0.10% | 4.31% | |||||||||||||||||||||||||
Senior note | 3,500 | 1,200 | 1,100 | 1,200 | |||||||||||||||||||||||
Senior note, interest rate | 0.65% | 1.13% | 1.70% | ||||||||||||||||||||||||
Debt Instrument, Maturity Date | 15-Mar-17 | 1-Oct-17 | 1-Jun-18 | 7-Dec-15 | 15-Dec-17 | 15-Dec-19 | 1-May-23 | 30-Jun-16 | 1-Oct-18 | ||||||||||||||||||
Debt Instrument, Face Amount | 900 | 1,100 | |||||||||||||||||||||||||
Debt Instrument, Frequency of Periodic Payment | Interest is payable semi-annually on March 15 and September 15 of each year until its maturity date. | Interest is payable semi-annually | Interest is payable semi-annually | semi-annually on June 7 and December 7 | semi-annually on June 15 and December 15 | semi-annually on June 15 and December 15 | Interest is payable semi-annually | Interest is payable semi-annually | interest is payable semi-annually | ||||||||||||||||||
Long-term Debt | 102 | 102 | |||||||||||||||||||||||||
Debt instrument, stated interest rate (percent) | 5.50% | 2.70% | 1.05% | 0.67% | 1.18% | ||||||||||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 0.35% | ||||||||||||||||||||||||||
Debt Instrument, Interest Rate at Period End | 0.68% | 0.68% | 0.78% | ||||||||||||||||||||||||
Debt Instrument, Unamortized Discount | 6 | ||||||||||||||||||||||||||
Redemption Price Company Option | 100.00% | 100.00% | |||||||||||||||||||||||||
Redemption Price Certain Events | 101.00% | 101.00% | |||||||||||||||||||||||||
Yield To Maturity Percentage | 3.50% | ||||||||||||||||||||||||||
Debt Conversion, Converted Instrument, Amount | 450 | ||||||||||||||||||||||||||
Debt Instrument, Convertible, Number of Equity Instruments | 30,000 | ||||||||||||||||||||||||||
Debt Instrument, Convertible, Conversion Price | $22.71 | ||||||||||||||||||||||||||
Amount Of Notes Converted | $899 |
Leases_Details
Leases (Details) (USD $) | Sep. 01, 2013 | |
In Millions, unless otherwise specified | ||
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||
2014 | $189 | |
2015 | 175 | |
2016 | 167 | |
2017 | 160 | |
2018 | 153 | |
Thereafter | 1,753 | |
Total | 2,597 | |
Capital Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||
2014 | 17 | |
2015 | 17 | |
2016 | 16 | |
2017 | 16 | |
2018 | 16 | |
Thereafter | 338 | |
Total | 420 | |
Less amount representing interest | -224 | |
Net present value of minimum lease payments | 196 | |
Less current installments | -4 | [1] |
Long-term capital lease obligations less current installments | $192 | [2] |
[1] | Included in other current liabilities. | |
[2] | Included in deferred income taxes and other liabilities. |
Leases_Additional_Information_
Leases - Additional Information (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Sep. 01, 2013 | Sep. 02, 2012 | Aug. 28, 2011 |
Leases [Abstract] | |||
Aggregate rental expense | $225 | $220 | $208 |
Gross assets under capital leases | 201 | 187 | |
Accumulated amortization | 28 | 19 | |
Sub-lease income | $150 |
Stockholders_Equity_Additional
Stockholders' Equity - Additional Information (Detail) (USD $) | 1 Months Ended | 4 Months Ended | 12 Months Ended | 29 Months Ended | |||||
In Millions, except Per Share data, unless otherwise specified | 9-May-12 | Sep. 01, 2013 | Sep. 02, 2012 | Sep. 01, 2013 | Sep. 02, 2012 | Aug. 28, 2011 | Sep. 01, 2013 | Dec. 18, 2012 | Nov. 28, 2012 |
Equity And Comprehensive Income [Line Items] | |||||||||
Dividends declared and paid | $0.28 | $0.31 | $0.28 | ||||||
Special Cash Dividend Declared And Paid Per Share | $7 | ||||||||
Payment Of Special Cash Dividend | $3,049 | ||||||||
Stock repurchase program, amount Authorized | 4,000 | ||||||||
Stock repurchased amount expiration date | Apr-15 | Apr-15 | Apr-15 | ||||||
Stock repurchase program, amount repurchased | 34 | 617 | 641 | 945 | |||||
Accumulated other comprehensive (loss) income | -122 | 156 | -122 | 156 | -122 | ||||
Reclassification of accumulated unrealized losses on foreign currency translation | 789 | ||||||||
Accumulated Other Comprehensive Income (Loss) | |||||||||
Equity And Comprehensive Income [Line Items] | |||||||||
Reclassification of accumulated unrealized losses on foreign currency translation | $155 |
Stockholders_Equity_Stock_Repu
Stockholders' Equity (Stock Repurchased During Period) (Detail) (USD $) | 12 Months Ended | 29 Months Ended | ||
In Millions, except Share data in Thousands, unless otherwise specified | Sep. 01, 2013 | Sep. 02, 2012 | Aug. 28, 2011 | Sep. 01, 2013 |
Stockholders' Equity Note [Abstract] | ||||
Shares Repurchased (000's) | 357 | 7,272 | 8,939 | |
Average Price per Share | $96.41 | $84.75 | $71.74 | |
Total Cost | $34 | $617 | $641 | $945 |
StockBased_Compensation_Plans_1
Stock-Based Compensation Plans - Additional Information (Detail) (USD $) | 12 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | |||||||
In Millions, except Share data, unless otherwise specified | Sep. 01, 2013 | Dec. 10, 2012 | Sep. 02, 2012 | Sep. 01, 2013 | Dec. 10, 2012 | Sep. 02, 2012 | Sep. 01, 2013 | Dec. 05, 2012 | Dec. 06, 2012 | Sep. 01, 2013 | Sep. 01, 2013 |
Restricted Stock Units (RSUs) | Restricted Stock Units (RSUs) | Restricted Stock Units (RSUs) | Fourth Restated 2002 Plan [Member] | Closing [Member] | Opening [Member] | Employees [Member] | 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 | 5 years | 3 years | |||||||||
Share Based Compensation Arrangement By Share Based Payment Number Of Years Of Service | 25 | ||||||||||
Portion of each share issued counted towards limit of shares available | 1.75 | ||||||||||
Additional number of shares authorized | 16,000,000 | 9,143,000 | |||||||||
Special Cash Dividend Shares Adjustment Ratio | 1.0763 | ||||||||||
Share Price | $105.95 | $98.44 | |||||||||
Special Cash Dividend Exercise Price Adjustment Ratio | 0.9291 | ||||||||||
Number of stock options outstanding | 1,947,000 | 2,905,000 | 3,161,000 | ||||||||
Number of RSUs outstanding | 9,676,000 | 10,081,000 | 9,260,000 | ||||||||
Time-based RSUs awards outstanding | 9,355,000 | ||||||||||
Number of shares available to be granted as RSUs | 11,174,000 | ||||||||||
Additional shares available to be granted | 1,362,000 | 778,000 | |||||||||
Performance-based RSUs awards outstanding | 726,000 | ||||||||||
Outstanding performance-based RSUs awards to be granted | 350,000 | ||||||||||
Unrecognized compensation cost | $504 | ||||||||||
Weighted-average recognition period | 1 year 8 months | ||||||||||
RSUs vested, but not yet delivered (shares) | 3,100,000 |
StockBased_Compensation_Plans_2
Stock-Based Compensation Plans - Summary of Stock Option Transactions (Details) (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Sep. 01, 2013 | Dec. 10, 2012 | |
Number of options | |||
Number of options outstanding at September 2, 2012 | 3,161,000 | 2,905,000 | |
Exercised | -1,435,000 | ||
Special cash dividend | 221,000 | ||
Number of options outstanding at September 1, 2013 | 1,947,000 | 2,905,000 | |
Weighted-average exercise price | |||
Weighted-average exercise price at September 2, 2012 | $40.90 | ||
Exercised | $36.22 | ||
Weighted-average exercise price at September 1, 2013 | $39.70 | ||
Weighted Average Remaining Contractual Term [Abstract] | |||
Weighted-average remaining contractual term (in years) | 1 year 4 months 17 days | ||
Aggregate intrinsic value | |||
Aggregate intrinsic value | $140 | [1] | |
[1] | The difference between the exercise price and market value of common stock at the end of 2013. |
StockBased_Compensation_Plans_3
Stock-Based Compensation Plans (Stock Options Outstanding) (Detail) (Details) (USD $) | 12 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Sep. 01, 2013 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Options Outstanding and Exercisable - Number of Options | 1,947 | |
Options Outstanding and Exercisable - Weighted Average Remaining Contractual Life | 1 year 4 months 17 days | |
Options Outstanding and Exercisable - Weighted Average Exercise Price | $39.70 | |
$34.71 - $40.69 [Member] | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Range of Prices, Lower limit | $34.71 | [1] |
Range of Prices, Upper limit | $40.69 | [1] |
Options Outstanding and Exercisable - Number of Options | 1,775 | |
Options Outstanding and Exercisable - Weighted Average Remaining Contractual Life | 1 year 4 months 9 days | |
Options Outstanding and Exercisable - Weighted Average Exercise Price | $39.39 | |
$42.73 - $43.17 [Member] | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Range of Prices, Lower limit | $42.73 | [1] |
Range of Prices, Upper limit | $43.17 | [1] |
Options Outstanding and Exercisable - Number of Options | 172 | |
Options Outstanding and Exercisable - Weighted Average Remaining Contractual Life | 1 year 7 months 2 days | |
Options Outstanding and Exercisable - Weighted Average Exercise Price | $42.93 | |
[1] | Prices include the effect of the special cash dividend noted above. |
StockBased_Compensation_Plans_4
Stock-Based Compensation Plans - Tax Benefits Realized and Intrinsic Value Related to Stock Options Exercised (Details) (USD $) | 12 Months Ended | |||||
In Millions, unless otherwise specified | Sep. 01, 2013 | Sep. 02, 2012 | Aug. 28, 2011 | |||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||
Actual tax benefit realized for stock options exercised | $33 | $50 | $78 | |||
Intrinsic value of stock options exercised | $94 | [1] | $137 | [1] | $227 | [1] |
[1] | The difference between the exercise price and market value of common stock measured at each individual exercise date |
StockBased_Compensation_Plans_5
Stock-Based Compensation Plans - Summary of RSU Transactions (Details) (USD $) | Dec. 10, 2012 | Sep. 01, 2013 |
Restricted Stock Units (RSUs) | ||
Number of units | ||
Outstanding at the end of 2012 | 9,676,000 | 9,260,000 |
Granted | 4,192,000 | |
Vested and delivered | -3,872,000 | |
Forfeited | -231,000 | |
Special cash dividend | 732,000 | |
Outstanding at the end of 2013 | 9,676,000 | 10,081,000 |
Weighted average grant date fair value | ||
Non-vested at September 2, 2012 | $66.14 | |
Granted | $90.99 | |
Vested and delivered | $67.17 | |
Forfeited | $71.19 | |
Non-vested at September 1, 2013 | $72.52 |
StockBased_Compensation_Plans_6
Stock-Based Compensation Plans - Summary of Stock-Based Compensation Expense (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Sep. 01, 2013 | Sep. 02, 2012 | Aug. 28, 2011 |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Total stock-based compensation expense before income taxes | $285 | $241 | $207 |
Less recognized income tax benefit | -94 | -79 | -67 |
Total stock-based compensation expense, net of income taxes | $191 | $162 | $140 |
Retirement_Plans_Additional_In
Retirement Plans - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Sep. 01, 2013 | Sep. 02, 2012 | Aug. 28, 2011 |
Day | |||
Retirement Plans [Line Items] | |||
Minimum number of days of employment to qualify for 401(k) retirement plan | 90 | ||
Amounts expensed under defined contribution and defined benefit plans | $409 | $382 | $345 |
US Employees Other Than California Union | |||
Retirement Plans [Line Items] | |||
Deferred pre-tax matching contribution rate of employee benefits | 50.00% | ||
California Union Employees | |||
Retirement Plans [Line Items] | |||
Deferred pre-tax matching contribution rate of employee benefits | 50.00% |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 12 Months Ended | |||
In Millions, except Share data, unless otherwise specified | Sep. 01, 2013 | Sep. 02, 2012 | Aug. 28, 2011 | Nov. 28, 2012 |
Income Tax Disclosure [Abstract] | ||||
Income Tax Benefits Allocated Directly To Equity | $59 | $65 | $59 | |
Nonrecurring Tax Expense Benefit | 62 | |||
Special Cash Dividend Declared And Paid Per Share | $7 | |||
Ownership of employee, shares | 22,600,000 | |||
Deferred Tax Assets, Net of Valuation Allowance, Current | 422 | 393 | ||
Deferred Tax Assets, Net of Valuation Allowance, Noncurrent | 62 | 58 | ||
Deferred Tax Liabilities, Net, Noncurrent | 450 | 412 | ||
Deferred Tax Liabilities, Undistributed Foreign Earnings | 3,619 | 3,162 | ||
Tax Positions Uncertain Timing Of Such Deductibility | 36 | |||
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | 46 | 36 | ||
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued | 11 | 16 | ||
Other Tax Expense (Benefit) | $25 |
Income_Taxes_Income_Before_Inc
Income Taxes (Income Before Income Taxes) (Detail) (Details) (USD $) | 3 Months Ended | 4 Months Ended | 12 Months Ended | ||||||||
In Millions, unless otherwise specified | 12-May-13 | Feb. 17, 2013 | Nov. 25, 2012 | 6-May-12 | Feb. 12, 2012 | Nov. 20, 2011 | Sep. 01, 2013 | Sep. 02, 2012 | Sep. 01, 2013 | Sep. 02, 2012 | Aug. 28, 2011 |
Income Tax Disclosure [Abstract] | |||||||||||
Domestic (including Puerto Rico) | $2,070 | $1,809 | $1,526 | ||||||||
Foreign | 981 | 958 | 857 | ||||||||
INCOME BEFORE INCOME TAXES | $712 | $739 | $646 | $622 | $627 | $553 | $954 | $965 | $3,051 | $2,767 | $2,383 |
Income_Taxes_Schedule_of_Forei
Income Taxes (Schedule of Foreign And Domestic Income Taxes) (Detail) (Details) (USD $) | 3 Months Ended | 4 Months Ended | 12 Months Ended | ||||||||||
In Millions, unless otherwise specified | 12-May-13 | Feb. 17, 2013 | Nov. 25, 2012 | 6-May-12 | Feb. 12, 2012 | Nov. 20, 2011 | Sep. 01, 2013 | Sep. 02, 2012 | Sep. 01, 2013 | Sep. 02, 2012 | Aug. 28, 2011 | ||
Federal [Abstract] | |||||||||||||
Current | $572 | $591 | $409 | ||||||||||
Deferred | 16 | 12 | 74 | ||||||||||
Total federal | 588 | 603 | 483 | ||||||||||
State [Abstract] | |||||||||||||
Current | 109 | 100 | 78 | ||||||||||
Deferred | 4 | 2 | 14 | ||||||||||
Total state | 113 | 102 | 92 | ||||||||||
Foreign [Abstract] | |||||||||||||
Current | 302 | 312 | 270 | ||||||||||
Deferred | -13 | -17 | -4 | ||||||||||
Total foreign | 289 | 295 | 266 | ||||||||||
Total provision for income taxes | $248 | $185 | [1] | $225 | $217 | $215 | $225 | [2] | $332 | $343 | $990 | $1,000 | $841 |
[1] | Includes a $62 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 a $24 charge relating to the settlement of an income tax audit in Mexico. |
Income_Taxes_Reconciliation_Be
Income Taxes (Reconciliation Between Statutory And Effective Rates) (Detail) (Details) (USD $) | 3 Months Ended | 4 Months Ended | 12 Months Ended | ||||||||||
In Millions, unless otherwise specified | 12-May-13 | Feb. 17, 2013 | Nov. 25, 2012 | 6-May-12 | Feb. 12, 2012 | Nov. 20, 2011 | Sep. 01, 2013 | Sep. 02, 2012 | Sep. 01, 2013 | Sep. 02, 2012 | Aug. 28, 2011 | ||
Income Tax Disclosure [Abstract] | |||||||||||||
Federal taxes at statutory rate | $1,068 | $969 | $834 | ||||||||||
Federal taxes at statutory rate (percent) | 35.00% | 35.00% | 35.00% | ||||||||||
State taxes, net | 66 | 59 | 55 | ||||||||||
State taxes, net (percent) | 2.10% | 2.10% | 2.40% | ||||||||||
Foreign taxes, net | -87 | -61 | -66 | ||||||||||
Foreign taxes, net (percent) | -2.80% | -2.20% | -2.80% | ||||||||||
Effective Income Tax Rate Reconciliation, Deduction, Employee Stock Ownership Plan Dividend, Amount | -65 | -7 | -6 | ||||||||||
Effective Income Tax Rate Reconciliation, Deduction, Employee Stock Ownership Plan Dividend, Percent | -2.10% | -0.30% | -0.30% | ||||||||||
Other | 8 | 40 | 24 | ||||||||||
Other (percent) | 0.20% | 1.50% | 1.00% | ||||||||||
Total provision for income taxes | $248 | $185 | [1] | $225 | $217 | $215 | $225 | [2] | $332 | $343 | $990 | $1,000 | $841 |
Total (percent) | 32.40% | 36.10% | 35.30% | ||||||||||
[1] | Includes a $62 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 a $24 charge relating to the settlement of an income tax audit in Mexico. |
Income_Taxes_Components_of_Def
Income Taxes (Components of Deferred Tax Assets And Liabilities) (Detail) (Details) (USD $) | Sep. 01, 2013 | Sep. 02, 2012 |
In Millions, unless otherwise specified | ||
Income Tax Disclosure [Abstract] | ||
Equity compensation | $80 | $79 |
Deferred income/membership fees | 130 | 148 |
Accrued liabilities and reserves | 530 | 461 |
Other | 42 | 55 |
Property and equipment | -558 | -522 |
Merchandise inventories | -190 | -182 |
Net deferred tax assets | $34 | $39 |
Income_Taxes_Gross_Unrecognize
Income Taxes (Gross Unrecognized Tax Benefits) (Detail) (Details) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Sep. 01, 2013 | Sep. 02, 2012 |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Gross unrecognized tax benefit at beginning of year | $116 | $106 |
Gross increasesbcurrent year tax positions | 10 | 15 |
Gross increasesbtax positions in prior years | 5 | 3 |
Gross decreasesbtax positions in prior years | -13 | -3 |
Settlements | -38 | -3 |
Lapse of statute of limitations | 0 | -2 |
Gross unrecognized tax benefit at end of year | $80 | $116 |
Net_Income_per_Common_and_Comm2
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 $) | 3 Months Ended | 4 Months Ended | 12 Months Ended | ||||||||
In Millions, except Share data in Thousands, unless otherwise specified | 12-May-13 | Feb. 17, 2013 | Nov. 25, 2012 | 6-May-12 | Feb. 12, 2012 | Nov. 20, 2011 | Sep. 01, 2013 | Sep. 02, 2012 | Sep. 01, 2013 | Sep. 02, 2012 | Aug. 28, 2011 |
Earnings Per Share [Abstract] | |||||||||||
Net income available to common stockholders after assumed conversion of dilutive securities | $2,039 | $1,710 | $1,463 | ||||||||
Weighted average number of common shares used in basic net income per common share | 436,488 | 435,975 | 433,423 | 433,791 | 434,535 | 434,222 | 436,752 | 432,437 | 435,741 | 433,620 | 436,119 |
RSUs and stock options | 4,552 | 4,906 | 6,063 | ||||||||
Conversion of convertible notes | 219 | 847 | 912 | ||||||||
Weighted average number of common shares and dilutive potential of common stock used in diluted net income per share | 440,780 | 439,812 | 438,643 | 439,166 | 439,468 | 440,615 | 441,907 | 438,344 | 440,512 | 439,373 | 443,094 |
Commitments_and_Contingencies_
Commitments and Contingencies - Additional Information (Detail) (USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Sep. 01, 2013 |
Commitments and Contingencies Disclosure [Abstract] | |
Damages sought | $10 |
Segment_Reporting_Information_
Segment Reporting Information by Segment (Detail) (USD $) | 3 Months Ended | 4 Months Ended | 12 Months Ended | ||||||||
In Millions, unless otherwise specified | 12-May-13 | Feb. 17, 2013 | Nov. 25, 2012 | 6-May-12 | Feb. 12, 2012 | Nov. 20, 2011 | Sep. 01, 2013 | Sep. 02, 2012 | Sep. 01, 2013 | Sep. 02, 2012 | Aug. 28, 2011 |
Segment Reporting Information [Line Items] | |||||||||||
Total revenue | $24,083 | $24,871 | $23,715 | $22,324 | $22,967 | $21,628 | $32,487 | $32,218 | $105,156 | $99,137 | $88,915 |
Operating income | 722 | 738 | 639 | 623 | 644 | 543 | 954 | 949 | 3,053 | 2,759 | 2,439 |
Depreciation and amortization | 946 | 908 | 855 | ||||||||
Additions to property and equipment | 2,083 | 1,480 | 1,290 | ||||||||
Net property and equipment | 13,881 | 12,961 | 13,881 | 12,961 | 12,432 | ||||||
Total assets | 30,283 | 27,140 | 30,283 | 27,140 | 26,761 | ||||||
United States Operations | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenue | 75,493 | 71,776 | 64,904 | ||||||||
Operating income | 1,810 | 1,632 | 1,395 | ||||||||
Depreciation and amortization | 696 | 667 | 640 | ||||||||
Additions to property and equipment | 1,090 | 1,012 | 876 | ||||||||
Net property and equipment | 9,652 | 9,236 | 9,652 | 9,236 | 8,870 | ||||||
Total assets | 20,608 | 18,401 | 20,608 | 18,401 | 18,558 | ||||||
Canadian Operations | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenue | 17,179 | 15,717 | 14,020 | ||||||||
Operating income | 756 | 668 | 621 | ||||||||
Depreciation and amortization | 123 | 117 | 117 | ||||||||
Additions to property and equipment | 186 | 170 | 144 | ||||||||
Net property and equipment | 1,621 | 1,664 | 1,621 | 1,664 | 1,608 | ||||||
Total assets | 4,529 | 4,237 | 4,529 | 4,237 | 3,741 | ||||||
Other International Operations | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenue | 12,484 | 11,644 | 9,991 | ||||||||
Operating income | 487 | 459 | 423 | ||||||||
Depreciation and amortization | 127 | 124 | 98 | ||||||||
Additions to property and equipment | 807 | 298 | 270 | ||||||||
Net property and equipment | 2,608 | 2,061 | 2,608 | 2,061 | 1,954 | ||||||
Total assets | $5,146 | $4,502 | $5,146 | $4,502 | $4,462 |
Quarterly_Financial_Data_Detai
Quarterly Financial Data (Detail) (USD $) | 3 Months Ended | 4 Months Ended | 12 Months Ended | |||||||||||||
In Millions, except Share data in Thousands, unless otherwise specified | 12-May-13 | Feb. 17, 2013 | Nov. 25, 2012 | 6-May-12 | Feb. 12, 2012 | Nov. 20, 2011 | Sep. 01, 2013 | Sep. 02, 2012 | Sep. 01, 2013 | Sep. 02, 2012 | Aug. 28, 2011 | Nov. 28, 2012 | ||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||
Nonrecurring Tax Expense Benefit | $62 | |||||||||||||||
Special Cash Dividend Declared And Paid Per Share | $7 | |||||||||||||||
REVENUE | ||||||||||||||||
Net sales | 23,552 | 24,343 | 23,204 | 21,849 | 22,508 | 21,181 | 31,771 | 31,524 | 102,870 | 97,062 | 87,048 | |||||
Membership fees | 531 | 528 | 511 | 475 | 459 | 447 | 716 | 694 | 2,286 | 2,075 | 1,867 | |||||
Total revenue | 24,083 | 24,871 | 23,715 | 22,324 | 22,967 | 21,628 | 32,487 | 32,218 | 105,156 | 99,137 | 88,915 | |||||
OPERATING EXPENSES | ||||||||||||||||
Merchandise costs | 21,038 | 21,766 | 20,726 | 19,543 | 20,139 | 18,931 | 28,418 | 28,210 | 91,948 | 86,823 | 77,739 | |||||
Selling, general and administrative | 2,313 | 2,361 | 2,332 | 2,152 | 2,178 | 2,144 | [1] | 3,098 | 3,044 | 10,104 | 9,518 | 8,691 | ||||
Preopening expenses | 10 | 6 | 18 | 6 | 6 | 10 | 17 | 15 | 51 | 37 | 46 | |||||
Operating income | 722 | 738 | 639 | 623 | 644 | 543 | 954 | 949 | 3,053 | 2,759 | 2,439 | |||||
OTHER INCOME (EXPENSE) | ||||||||||||||||
Interest expense | -25 | -25 | -13 | -19 | -27 | -27 | -36 | -22 | -99 | -95 | -116 | |||||
Interest income and other, net | 15 | 26 | 20 | 18 | 10 | 37 | 36 | 38 | 97 | 103 | 60 | |||||
INCOME BEFORE INCOME TAXES | 712 | 739 | 646 | 622 | 627 | 553 | 954 | 965 | 3,051 | 2,767 | 2,383 | |||||
Provision for income taxes | 248 | 185 | [2] | 225 | 217 | 215 | 225 | [3] | 332 | 343 | 990 | 1,000 | 841 | |||
Net income including noncontrolling interests | 464 | 554 | 421 | 405 | 412 | 328 | 622 | 622 | 2,061 | 1,767 | 1,542 | |||||
Net income attributable to noncontrolling interests | -5 | -7 | -5 | -19 | -18 | -8 | -5 | -13 | -22 | -58 | -80 | |||||
NET INCOME ATTRIBUTABLE TO COSTCO | $459 | $547 | $416 | $386 | $394 | $320 | $617 | $609 | $2,039 | $1,709 | $1,462 | |||||
NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO: | ||||||||||||||||
Basic | $1.05 | $1.26 | $0.96 | $0.89 | $0.91 | $0.74 | $1.41 | $1.41 | $4.68 | $3.94 | $3.35 | |||||
Diluted | $1.04 | $1.24 | $0.95 | $0.88 | $0.90 | $0.73 | $1.40 | $1.39 | $4.63 | $3.89 | $3.30 | |||||
Shares used in calculation (000's) | ||||||||||||||||
Basic (shares) | 436,488 | 435,975 | 433,423 | 433,791 | 434,535 | 434,222 | 436,752 | 432,437 | 435,741 | 433,620 | 436,119 | |||||
Diluted (shares) | 440,780 | 439,812 | 438,643 | 439,166 | 439,468 | 440,615 | 441,907 | 438,344 | 440,512 | 439,373 | 443,094 | |||||
CASH DIVIDENDS DECLARED PER COMMON SHARE | $0.31 | $7.28 | [4] | $0.28 | $0 | [5] | $0.24 | $0.24 | $0.31 | $0.55 | [6] | $8.17 | $1.03 | $0.89 | ||
[1] | Includes a $17 charge to selling, general and administrative for contributions to an initiative reforming alcohol beverage laws in Washington State. | |||||||||||||||
[2] | Includes a $62 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. | |||||||||||||||
[3] | Includes a $24 charge relating to the settlement of an income tax audit in Mexico. | |||||||||||||||
[4] | Includes the special cash dividend of $7.00 per share paid in December 2012. | |||||||||||||||
[5] | On MayB 9, 2012, subsequent to the end of the third quarter of 2012, the Board of Directors declared a quarterly cash dividend of $0.275 per share. | |||||||||||||||
[6] | The quarterly dividend rate was $0.275 per share. |
Quarterly_Financial_Data_Paren
Quarterly Financial Data (Parenthetical) (Detail) (USD $) | 1 Months Ended | 3 Months Ended | 4 Months Ended | 12 Months Ended | |||||||||
In Millions, except Per Share data, unless otherwise specified | 9-May-12 | 12-May-13 | Feb. 17, 2013 | Nov. 25, 2012 | 6-May-12 | Feb. 12, 2012 | Nov. 20, 2011 | Sep. 01, 2013 | Sep. 02, 2012 | Sep. 01, 2013 | Sep. 02, 2012 | Aug. 28, 2011 | |
Quarterly Financial Data [Line Items] | |||||||||||||
Selling, general and administrative | $2,313 | $2,361 | $2,332 | $2,152 | $2,178 | $2,144 | [1] | $3,098 | $3,044 | $10,104 | $9,518 | $8,691 | |
Settlement of income tax audit in Mexico | 24 | ||||||||||||
Dividend declared per share | $0.28 | $0.31 | $0.28 | ||||||||||
Increase to merchandise costs for LIFO inventory adjustment | 27 | 21 | 87 | ||||||||||
Washington State | |||||||||||||
Quarterly Financial Data [Line Items] | |||||||||||||
Selling, general and administrative | $17 | ||||||||||||
[1] | Includes a $17 charge to selling, general and administrative for contributions to an initiative reforming alcohol beverage laws in Washington State. |