EXHIBIT 12.1
COSTCO COMPANIES, INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(DOLLARS IN THOUSANDS)
53 WEEKS
52 WEEKS ENDED ENDED 52 WEEKS ENDED
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AUGUST 31, SEPTEMBER 1, SEPTEMBER 3, AUGUST 28, AUGUST 29,
1997 1996 1995 1994 1993
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Earnings(1)...................................... $ 520,329(5) $ 423,477 $ 368,204 $ 203,555(3) $ 336,463
Less: Capitalized interest....................... (4,097) (5,612) (3,275) (7,170) (9,483)
Add: Interest on debt(2)......................... 80,378 83,690 71,186 57,642 55,599
Portion of rent under long-term operating
leases representative of an interest
factor....................................... 32,411 33,412 32,160 26,940 23,220
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Total earnings available for fixed charges....... $ 629,021 $ 534,967 $ 468,275 $ 280,967 $ 405,799
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Fixed Charges:
Interest on debt(2)............................ $ 80,378 $ 83,690 $ 71,186 $ 57,642 $ 55,599
Portion of rent under long-term operating
leases representative of an interest
factor....................................... 32,411 33,412 32,160 26,940 23,220
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Total fixed charges.............................. $ 112,789 $ 117,102 $ 103,346 $ 84,582 $ 78,819
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Ratio of earnings to fixed charges............... 5.6(6) 4.6 4.5 3.3(4) 5.2
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(1) Earnings represent income from continuing operations before provision for
income taxes.
(2) Includes amortization of debt expense and capitalized interest.
(3) Includes provision for merger and restructuring expenses of $120,000 pre-tax
($80,000 or $.36 per share after tax) related to the merger of The Price
Company and Costco Wholesale Corporation in October 1993. If such provision
for merger and restructuring expenses were excluded, income from continuing
operations before provision for income taxes for fiscal 1994 would have been
$323,555.
(4) If the $120,000 pre-tax provision for merger and restructuring expenses were
excluded, the ratio of earnings to fixed charges for fiscal 1994 would have
been 4.7.
(5) Includes the effect of adopting SFAS No. 121, a $65,000 pre-tax charge for
asset impairment. If such provision were excluded, income from continuing
operations before provision for income taxes for fiscal 1997 would have been
$585,329.
(6) If the $65,000 pre-tax provision for asset impairment were excluded, the
ratio of earnings to fixed charges would have been 6.2.