844
EXHIBIT H.3  Costco: Statement of Shareholders’ Equity
$ million
Historical
Forecast
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
Equity, beginning of year
12,303
10,617
12,079
10,778
12,799
15,243
14,854
14,425
14,018
13,615
13,161
13,916
14,652
15,340
15,975
Net income
2,377
2,350
2,679
3,134
3,659
3,888
4,233
4,638
4,903
5,163
5,418
5,675
5,925
6,167
6,409
Foreign-currency translation adjustment
(1,045)
22
85
(185)
(237)
—
—
—
—
—
—
—
—
—
—
Comprehensive income
1,332
2,372
2,764
2,949
3,422
3,888
4,233
4,638
4,903
5,163
5,418
5,675
5,925
6,167
6,409
Stock-based compensation
394
459
518
547
598
655
699
744
789
833
877
919
961
1,001
1,041
Stock options exercised
69
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Release of vested restricted stock units
(122)
(146)
(165)
(217)
(272)
(298)
(318)
(339)
(359)
(379)
(399)
(418)
(437)
(455)
(473)
Repurchases of common stock
(494)
(477)
(473)
(322)
(247)
(2,128)
(2,315)
(2,463)
(2,577)
(2,744)
(1,649)
(1,782)
(1,942)
(2,104)
(2,236)
Cash dividends declared
(2,865)
(746)
(3,945)
(936)
(1,057)
(2,505)
(2,728)
(2,989)
(3,160)
(3,327)
(3,491)
(3,657)
(3,818)
(3,974)
(4,130)
Equity, end of year
10,617
12,079
10,778
12,799
15,243
14,854
14,425
14,018
13,615
13,161
13,916
14,652
15,340
15,975
16,585
 

Appendix H  845
EXHIBIT H.4  Costco: Tax Reconciliation Table
$ million
2015
2016
2017
2018
2019
Federal taxes at statutory rate
1,262
1,267
1,414
1,136
1,001
State taxes, net
85
91
116
154
171
Foreign taxes, net
(125)
(21)
(64)
32
(1)
Employee stock ownership plan (ESOP)
(66)
(17)
(104)
(14)
(18)
2017 Tax Act
—
—
—
19
(123)
Other
39
(77)
(37)
(64)
31
U.S. and foreign tax expense (benefit)
1,195
1,243
1,325
1,263
1,061
Tax rates1
Federal income tax rate, %
35.0
35.0
35.0
25.6
21.0
State income tax rate, %
2.4
2.5
2.9
3.5
3.6
Statutory tax rate, %
37.4
37.5
37.9
29.0
24.6
1 To determine each tax rate, divide each tax amount by earnings before taxes. Earnings before taxes are reported in Exhibit H.1.
Source: Reported in Costco’s annual report, note 8: Income Taxes.

846
EXHIBIT H.5  Costco: NOPAT and Its Reconciliation to Net Income
$ million
Historical
Forecast
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
CV
Revenues
116,199
118,719
129,025
141,576
152,703
167,241
178,549
190,099
201,536
212,811
223,884
234,718
245,281
255,546
265,768
276,399
Merchandise costs
(101,065)
(102,901)
(111,882)
(123,152)
(132,886)
(145,370)
(155,021)
(164,859)
(174,777)
(184,555)
(194,158)
(203,553)
(212,713)
(221,616)
(230,481)
(239,700)
Selling and general
(10,318)
(10,813)
(11,580)
(12,439)
(13,502)
(14,787)
(15,787)
(16,809)
(17,820)
(18,817)
(19,796)
(20,754)
(21,688)
(22,595)
(23,499)
(24,439)
Depreciation
(1,127)
(1,255)
(1,370)
(1,437)
(1,492)
(1,584)
(1,734)
(1,852)
(1,971)
(2,090)
(2,207)
(2,322)
(2,434)
(2,544)
(2,650)
(2,756)
Preopening expenses
(65)
(78)
(82)
(68)
(86)
(94)
(101)
(107)
(114)
(120)
(126)
(132)
(138)
(144)
(150)
(156)
EBITA, unadjusted1
3,624
3,672
4,111
4,480
4,737
5,406
5,906
6,473
6,854
7,229
7,597
7,957
8,307
8,647
8,988
9,348
Operating lease interest2
73
75
57
74
91
88
96
103
109
116
122
129
135
141
147
153
EBITA, adjusted
3,697
3,747
4,168
4,554
4,828
5,493
6,002
6,576
6,963
7,345
7,719
8,085
8,442
8,788
9,135
9,500
Operating cash taxes3
(1,184)
(1,149)
(1,493)
(1,455)
(1,009)
(1,287)
(1,409)
(1,538)
(1,665)
(1,736)
(1,790)
(1,905)
(1,990)
(2,073)
(2,157)
(2,239)
NOPAT
2,513
2,598
2,675
3,098
3,818
4,206
4,593
5,037
5,298
5,609
5,929
6,180
6,451
6,715
6,978
7,262
Reconciliation to net income
Net income, consolidated
2,409
2,376
2,714
3,179
3,704
3,937
4,286
4,694
4,962
5,226
5,484
5,744
5,997
6,242
6,488
6,746
Operating taxes deferred3
7
219
(82)
(115)
159
42
46
57
26
49
87
62
64
67
68
76
Adjusted net income
2,416
2,595
2,632
3,064
3,863
3,979
4,332
4,751
4,988
5,275
5,570
5,806
6,062
6,309
6,556
6,823
Interest expense
124
133
134
159
150
277
302
315
327
340
354
368
382
397
413
429
Operating lease interest2
73
75
57
74
91
88
96
103
109
116
122
129
135
141
147
153
Interest income
(50)
(41)
(50)
(75)
(126)
(64)
(51)
(38)
(26)
(13)
—
—
—
—
—
—
Other income4
(54)
(39)
(12)
(46)
(52)
—
—
—
—
—
—
—
—
—
—
—
Taxes related to 
nonoperating accounts5
(35)
(48)
(49)
(32)
(15)
(74)
(85)
(93)
(101)
(109)
(117)
(122)
(127)
(132)
(138)
(143)
Other nonoperating taxes3
39
(77)
(37)
(45)
(92)
—
0
0
(0)
(0)
(0)
(0)
—
—
—
—
NOPAT
2,513
2,598
2,675
3,098
3,818
4,206
4,593
5,037
5,298
5,609
5,929
6,180
6,451
6,715
6,978
7,262
1 Earnings before interest, taxes, and amortization.
2 Estimated by multiplying beginning-of-year capitalized operating leases by the interest rate on 10-year AA-rated debt. Capitalized operating leases are reported in Exhibit H.8. Interest rates are reported in Exhibit H.10.
3 Operating cash taxes and other nonoperating taxes are detailed in Exhibit H.6.
4 Other income consists primarily of foreign-currency transaction gains and is treated as nonoperating for simplicity of exposition.
5 Estimated by multiplying the statutory tax rate by the sum of interest and operating lease interest expense, less the sum of interest and other income. The statutory tax rate is reported in Exhibit H.6.