COSTCO WHOLESALE CORPORATION

CONSOLIDATED BALANCE SHEETS

(amounts in millions, except par value and share data)

COSTCO WHOLESALE CONSOLIDATED S OF INCOM (dollars in millions, excep 52 Weeks Ended August 30, 2015 REVENUE Net sales Membership fees Total revenue $113,666 2,533 116,199 OPERATING EXPENSES Merchandise costs Selling, general and administrative Preopening expenses Operating income 101,065 11,445 65 3,624 OTHER INCOME (EXPENSE) Interest expense Interest income and other, net INCOME BEFORE INCOME TAXES (124.00) 104 3,604 Provision for income taxes Net income including noncontrolling interests Net income attributable to noncontrolling interests NET INCOME ATTRIBUTABLE TO COSTCO NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO: Basic Diluted Shares used in calculation (000's) Basic Diluted CASH DIVIDENDS DECLARED PER COMMON SHARE 1,195 2,409 (32.00) $2,377 $5.41 $5.37 439,455 442,716 $6.51 Costco Wholesale Corporation (2015). Form 10-K 2015. Retrieved from SEC EDGAR website http://www.sec.gov/edgar.shtm Costco Wholesale Corporation (2012). Form 10-K 2012. Retrieved from SEC EDGAR website http://www.sec.gov/edgar.shtm COSTCO WHOLESALE CORPORATION CONSOLIDATED STATEMENTS OF INCOME (dollars in millions, except per share data) 52 Weeks Ended August 31, 2014 52 Weeks Ended September 1, 2013 52 Weeks Ended September 2, 2012 52 Weeks Ended August 28, 2011 $110,212 2,428 112,640 $102,870 2,286 105,156 $97,062 2,075 99,137 $87,048 1,867 88,915 98,458 10,899 63 3,220 91,948 10,104 51 3,053 86,823 9,518 37 2,759 77,739 8,691 46 2,439 (113.00) 90 3,197 (99.00) 97 3,051 (95.00) 103 2,767 (116.00) 60 2,383 1,109 2,088 (30.00) 990 2,061 (22.00) 1,000 1,767 (58.00) 841 1,542 (80.00) 2,058.00 $2,039 $1,709 $1,462 $4.69 $4.65 $4.68 $4.63 $3.94 $3.89 $3.35 $3.30 438,693 442,485 435,741 440,512 433,620 439,373 436,119 443,094 $1.33 $8.17 $1.03 $0.89 website http://www.sec.gov/edgar.shtml website http://www.sec.gov/edgar.shtml Restated Income Statem 52 Weeks Ended August 30, 2015 Gross Operating Revenue Cost of Goods Sold Gross Profit 116,199 99,938 16,261 Selling, general and administrative Preopening expenses 11,445 65 EBITA 4,751 Depreciation /Amortization Expenses 1,127 Net Operating Income (NOI) 3,624 Interest Income Earnings Before Interest & Taxes (EBIT) Interest Expense 104 3,728 124 Earnings Before Taxes (EBT) 3,604 Income Taxes related to Continuing Operations 1,195 Income from Continuing Operations 2,409 Net income attributable to noncontrolling interests Net Income 32 2,377 * explain preopening expenses * COGS in Costco's Consolidated Income Statement included depreciation/amortization expenses. These expenses w Restated Income Statement 52 Weeks Ended August 31, 2014 52 Weeks Ended September 1, 2013 52 Weeks Ended September 2, 2012 52 Weeks Ended August 28, 2011 112,640 97,429 15,211 105,156 91,002 14,154 99,137 85,915 13,222 88,915 76,884 12,031 10,899 63 10,104 51 9,518 37 8,691 46 4,249 3,999 3,667 3,294 1,029 946 908 855 3,220 3,053 2,759 2,439 90 97 103 60 3,310 3,150 2,862 2,499 113 99 95 116 3,197 3,051 2,767 2,383 1,109 990 1,000 841 2,088 2,061 1,767 1,542 30 22 58 80 2,058 2,039 1,709 1,462 /amortization expenses. These expenses were subtracted from cost of goods sold figures above to avoid being double counted. to avoid being double counted. COSTCO WHOLESALE CORPORATION CONSOLIDATED BALANCE SHEETS (amounts in millions, except par value and share data) August 30, 2015 August 31, 2014 Current Assets: Cash and cash equivalents Short-term investments Gross Accounts Receivable Allowance for Doublful Accounts Net receivables Merchandise inventories Deferred income taxes and other current assets Total Current Assets 4,801 1,618 1,227 (3) 1,224 8,908 748 17,299 5,738 1,577 1,152 (4) 1,148 8,456 669 17,588 Property, plant & equipment Land Buildings and improvements Equipment and fixtures Construction in progress Less accumulated depreciation and amortization Total PPE, net Other assets Total assets 4,961 12,618 5,274 811 (8,263) 15,401 740 33,440 4,716 12,522 4,845 592 (7,845) 14,830 606 33,024 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Accounts payable Current portion of long-term debt Accrued salaries and benefits Accrued member rewards Accrued sales and other taxes Accrued insurance Deferred membership fees Other current liabilities Total current liabilities 9,011 1,283 2,468 813 396 1,269 1,300 16,540 8,491 2,231 773 371 1,254 1,292 14,412 Long -Term Debt, excluding current portion Deferred Income Taxes and Other Liabilities Total liabilities 4,864 1,193 22,597 5,093 1,004 20,509 Shareholders' equity: Preferred stock $.005 par value; 100,000,000 shares authorized; no shares issued and outstanding - - Common stock $.005 par value; 900,000,000 shares authorized; 437,952,000 and 437,683,000 shares issued and outstanding Additional paid-in capital Accumulated other comprehensive loss Retained earnings Total Costco stockholders' equity Noncontrolling interests Total shareholders' equity Total liabilities and shareholders' equity 2 5,218 (1,121) 6,518 10,617 226 10,843 33,440 2 4,919 (76) 7,458 12,303 212 12,515 33,024 Notes: 1) Expanded Payables, PP&E, and liabilities 2) Included line for uncollectable accounts 3) Included adjustments to include Operating Leases in Current and Long-term liabilities and Assets TION ETS hare data) September 1, September 2, 2013 2012 August 28, 2011 4,644 1,480 1,206 (5) 1,201 7,894 621 15,840 3,528 1,326 1,029 (3) 1,026 7,096 550 13,526 4,009 1,604 967 (2) 965 6,638 490 13,706 4,409 11,556 4,472 585 (7,141) 13,881 562 30,283 4,032 10,879 4,261 374 (6,585) 12,961 653 27,140 3,819 10,278 4,002 269 (5,936) 12,432 623 26,761 7,872 2,037 710 382 346 1,167 743 13,257 7,303 1 1,832 661 397 308 965 793 12,260 6,544 900 1,758 602 335 276 938 697 12,050 4,998 1,016 19,271 1,381 981 14,622 1,253 885 14,188 - - ### 2 4,670 (122) 6,283 10,833 179 11,012 30,283 2 4,369 156 7,834 12,361 157 12,518 27,140 ### 4,516 373 7,111 12,002 571 12,573 26,761 September 1, September 2, August 28, 2013 2012 2011 CASH FLOWS FROM OPERATING ACTIVITIES Net income including noncontrolling interests $ 2,061 $ 1,767 $ 1,542 Depreciation and amortization 946 908 855 Stock-based compensation 285 241 207 Excess tax benefits on stock-based awards (61 (64 (45 ) (7 28 23 7 (3 84 (898 (490 (642 ) Increase in accounts payable 718 338 804 Other operating assets and liabilities, net 386 332 370 3,437 3,057 3,198 Purchases of short-term investments (2,572 (2,048 (3,276 ) Maturities of short-term investments 2,141 1,821 2,614 244 482 602 (2,083 (1,480 0 0 165 19 (11 5 (2,251 (1,236 (1,180 ) (70 457 (514 ) Repayments of short-term borrowings (287 (114 (105 ) Proceeds from short-term borrowings 326 114 79 3,717 130 0 0 (900 0 (22 (161 9 52 109 285 (121 (107 61 64 Adjustments to reconcile net income including noncontrolling interests to net cash provided by operating activities: Other non-cash operating activities, net Deferred income taxes Changes in operating assets and liabilities, net of the initial consolidation of Costco Mexico at the beginning of fiscal 2011: Increase in merchandise inventories Net cash provided by operating activities CASH FLOWS FROM INVESTING ACTIVITIES Sales of investments Additions to property and equipment Increase resulting from initial consolidation of Costco Mexico Other investing activities, net Net cash used in investing activities (1,290 ) CASH FLOWS FROM FINANCING ACTIVITIES Change in bank checks outstanding Proceeds from issuance of long-term debt Repayments of long-term debt (Distribution to) investment by noncontrolling interests Proceeds from exercise of stock options Minimum tax withholdings on stock-based awards Excess tax benefits on stock-based awards Repurchases of common stock Cash dividend payments Purchase of noncontrolling interest in Costco Mexico Other financing activities, net Net cash provided by (used in) financing activities EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS Net increase (decrease) in cash and cash equivalents CASH AND CASH EQUIVALENTS BEGINNING OF YEAR (61 ) 45 (36 (632 (624 ) (3,560 (446 (389 ) 0 (789 (16 (6 (2 ) 44 (2,281 (1,277 ) (114 (21 54 1,116 (481 795 3,528 4,009 3,214 0 CASH AND CASH EQUIVALENTS BEGINNING OF YEAR 3,528 4,009 3,214 $ 4,644 $ 3,528 $ 4,009 $ 86 $ 112 $ 111 $ 1,001 $ 956 $ 742 Increase in accrued property and equipment $ 40 $ $ Property acquired under capital leases $ 11 $ 18 $ 0 Unsettled repurchases of common stock $ 0$ 2$ 17 Distribution declared but not paid to noncontrolling interest $ 0$ 22 $ 0 Common stock issued upon conversion of 3.5% Zero Coupon Convertible Subordinated Notes $ 30 $ 2$ 2 CASH AND CASH EQUIVALENTS END OF YEAR SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the year for: Interest (reduced by $12, $10 and $9, interest capitalized in 2013, 2012 and 2011, respectively) Income taxes SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: The accompanying notes are an integral part of these consolidated financial statements. August 30, August 31, 2015 2014 CASH FLOWS FROM OPERATING ACTIVITIES Net income including noncontrolling interests $ 2,409 $ 2,088 $ Adjustments to reconcile net income including noncontrolling interests to net cash provided by operating activities: Depreciation and amortization 1,127 1,029 ### Stock-based compensation 394 327 ### Excess tax benefits on stock-based awards (86 ) (84 ) (5 ) 22 Other non-cash operating activities, net Deferred income taxes ( 7 (101 ) (63 ) (890 ) (563 ) Increase in accounts payable 880 529 ### Other operating assets and liabilities, net 557 699 ### 4,285 3,984 ### (1,501 ) (2,503 ) 1,434 2,406 (2,393 ) (1,993 ) (20 ) (3 ) (2,480 ) (2,093 ) Changes in operating assets and liabilities: Increase in merchandise inventories Net cash provided by operating activities CASH FLOWS FROM INVESTING ACTIVITIES Purchases of short-term investments Maturities and sales of short-term investments Additions to property and equipment Other investing activities, net Net cash used in investing activities ### CASH FLOWS FROM FINANCING ACTIVITIES ( 7 0 Change in bank checks outstanding (45 ) 96 Repayments of short-term borrowings (51 ) (103 ) Proceeds from short-term borrowings 51 68 ### 1,125 117 ### Proceeds from issuance of long-term debt Minimum tax withholdings on stock-based awards Excess tax benefits on stock-based awards Repurchases of common stock Cash dividend payments Other financing activities, net Net cash (used in) provided by financing activities (178 ) (164 ) 86 84 (481 ) (334 ) (2,865 ) (584 ) 34 34 (2,324 ) (786 ) EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS (418 ) (11 ) Net (decrease) increase in cash and cash equivalents (937 ) CASH AND CASH EQUIVALENTS BEGINNING OF YEAR 5,738 # # 1,094 ### 4,644 ### CASH AND CASH EQUIVALENTS END OF YEAR $ 4,801 $ 5,738 $ Interest (reduced by $14, $11 and $12, interest capitalized in 2015, $ 2014 and 2013, respectively) 117 $ 109 $ $ 1,186 $ 869 $ $ 109 $ 0 $ SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the year for: Income taxes, net SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: Property acquired under build-to-suit and capital leases