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Costco Wholesale Corporation Reports First Quarter Fiscal Year 2014 Operating Results

ISSAQUAH, WA -- (Marketwired) -- 12/11/13 -- Costco Wholesale Corporation ("Costco" or the "Company") (NASDAQ: COST) announced today its operating results for the first quarter (twelve weeks) of fiscal 2014, ended November 24, 2013.

Net sales for the quarter increased five percent, to $24.47 billion from $23.20 billion during the first quarter last year. Comparable sales for the first quarter of fiscal 2014 were as follows:

12 Weeks
U.S.
3%
International 1%
Total Company 3%

Comparable sales for the twelve-week period, excluding negative impacts from gasoline price deflation and foreign exchange, were as follows:

12 Weeks
U.S.
4%
International 6%
Total Company 5%

Net income for the quarter was $425 million, or $.96 per diluted share, compared to $416 million, or $.95 per diluted share, last year.

Costco currently operates 648 warehouses, including 461 in the United States and Puerto Rico, 87 in Canada, 33 in Mexico, 25 in the United Kingdom, 18 in Japan, 10 in Taiwan, nine in Korea and five in Australia. Costco also operates electronic commerce web sites in the U.S., Canada, the United Kingdom and Mexico.

A conference call to discuss these fiscal 2014 first quarter operating results is scheduled for 8:00 a.m. (PT) today, December 11, 2013, and is available via a webcast on www.costco.com (click on Investor Relations and "Play webcast").

Certain statements contained in this document constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. For these purposes, forward-looking statements are statements that address activities, events, conditions or developments that the Company expects or anticipates may occur in the future. Such forward-looking statements involve risks and uncertainties that may cause actual events, results or performance to differ materially from those indicated by such statements. These risks and uncertainties include, but are not limited to, domestic and international economic conditions, including exchange rates, the effects of competition and regulation, uncertainties in the financial markets, consumer and small business spending patterns and debt levels, conditions affecting the acquisition, development, ownership or use of real estate, amounts expected to be spent on expansion plans, actions of vendors, rising costs associated with employees (including health care costs), energy, and certain commodities, geopolitical conditions and other risks identified from time to time in the Company's public statements and reports filed with the Securities and Exchange Commission.

COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(dollars in millions, except per share data)
(unaudited)
12 Weeks Ended
November 24,
2013
November 25,
2012
REVENUE
Net sales $ 24,468 $ 23,204
Membership fees 549 511
Total revenue 25,017 23,715
OPERATING EXPENSES
Merchandise costs 21,824 20,726
Selling, general and administrative 2,501 2,332
Preopening expenses 24 18
Operating income 668 639
OTHER INCOME (EXPENSE)
Interest expense (27 ) (13 )
Interest income and other, net 18 20
INCOME BEFORE INCOME TAXES 659 646
Provision for income taxes 228 225
Net income including noncontrolling interests 431 421
Net income attributable to noncontrolling interests (6 ) (5 )
NET INCOME ATTRIBUTABLE TO COSTCO $ 425 $ 416
NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO:
Basic $ 0.97 $ 0.96
Diluted $ 0.96 $ 0.95
Shares used in calculation (000's)
Basic 437,970 433,423
Diluted 442,420 438,643
CASH DIVIDENDS DECLARED PER COMMON SHARE $ 0.31 $ 0.275
COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in millions)
(unaudited)
Subject to Reclassifications
November 24,
2013
September 1,
2013
ASSETS
Cash and cash equivalents $ 4,699 $ 4,644
Short-term investments 1,740 1,480
Receivables, net 1,145 1,201
Merchandise inventories 9,337 7,894
Deferred income taxes and other current assets 552 621
Total current assets 17,473 15,840
Property and equipment, net 14,254 13,881
Other assets 592 562
TOTAL ASSETS $ 32,319 $ 30,283
LIABILITIES AND EQUITY
Accounts payable $ 9,199 $ 7,872
Accrued salaries and benefits 2,070 2,037
Other current liabilities 2,424 2,181
Deferred membership fees 1,240 1,167
Total current liabilities 14,933 13,257
Long-term debt, excluding current portion 4,987 4,998
Deferred income taxes and other liabilities 990 1,016
Total liabilities 20,910 19,271
Total Costco stockholders' equity 11,221 10,833
Noncontrolling interests 188 179
Total equity 11,409 11,012
TOTAL LIABILITIES AND EQUITY $ 32,319 $ 30,283

CONTACTS:
Costco Wholesale Corporation
Richard Galanti
425/313-8203
Bob Nelson
425/313-8255
Jeff Elliott
425/313-8264

Source: Costco