847
EXHIBIT H.6  Costco: Taxes
$ million
Historical
Forecast
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
CV
EBITA
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
× Statutory tax rate1
37.4%
37.5%
37.9%
29.0%
24.6%
24.6%
24.6%
24.6%
24.6%
24.6%
24.6%
24.6%
24.6%
24.6%
24.6%
24.6%
Statutory taxes on EBITA
1,382
1,406
1,579
1,322
1,187
1,351
1,476
1,617
1,713
1,807
1,899
1,989
2,076
2,161
2,247
2,337
Foreign taxes, net2
(125)
(21)
(64)
32
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
Employee stock ownership plan (ESOP)2
(66)
(17)
(104)
(14)
(18)
(20)
(20)
(20)
(20)
(20)
(20)
(20)
(20)
(20)
(20)
(20)
Operating taxes
1,191
1,368
1,411
1,340
1,168
1,330
1,455
1,596
1,691
1,785
1,877
1,967
2,055
2,140
2,225
2,315
Operating taxes deferred3
(7)
(219)
82
115
(159)
(42)
(46)
(57)
(26)
(49)
(87)
(62)
(64)
(67)
(68)
(76)
Operating cash taxes
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
Tax rates, % of EBITA
Statutory tax rate1
37.4
37.5
37.9
29.0
24.6
24.6
24.6
24.6
24.6
24.6
24.6
24.6
24.6
24.6
24.6
24.6
Other operating taxes
(5.2)
(1.0)
(4.0)
0.4
(0.4)
(0.4)
(0.4)
(0.4)
(0.4)
(0.4)
(0.4)
(0.4)
(0.4)
(0.4)
(0.4)
(0.4)
Operating tax rate
32.2
36.5
33.8
29.4
24.2
24.2
24.2
24.2
24.2
24.2
24.2
24.2
24.2
24.2
24.2
24.2
% deferred
0.6
16.0
(5.8)
(8.6)
13.6
3.2
3.2
3.6
1.5
2.7
4.6
3.1
3.1
3.1
3.0
3.3
Operating cash tax rate4
32.0
30.7
35.8
32.0
20.9
23.4
23.5
23.4
23.9
23.6
23.2
23.6
23.6
23.6
23.6
23.6
1 Estimated by dividing federal plus state income taxes by earnings before taxes.
2 Reported in the tax reconciliation table presented in Exhibit H.4.
3 Computed as the decrease (increase) in operating deferred taxes, as reported in Exhibit H.9.
4 The operating cash tax rate equals the operating tax rate times one minus the percent of operating taxes deferred.

848
EXHIBIT H.7  Costco: Reorganized Deferred Taxes
$ million
As reported
Reorganized
2017
2018
2019
2017
2018
2019
Deferred-tax assets
Operating deferred-tax assets, net of liabilities
Equity compensation
109
72
74
Equity compensation
109
72
74
Deferred income/membership fees
167
136
180
Deferred income/membership fees
167
136
180
Foreign tax credit carryforward
—
—
65
Accrued liabilities and reserves
647
484
566
Accrued liabilities and reserves
647
484
566
Property and equipment
(747)
(478)
(677)
Other
18
—
—
Merchandise inventories
(252)
(175)
(187)
Total deferred-tax assets
941
692
885
Valuation allowance
—
—
(76)
Operating deferred-tax assets, net of liabilities
(76)
39
(120)
Valuation allowance
—
—
(76)
Total net deferred-tax assets
941
692
809
Nonoperating deferred-tax assets, net of liabilities
Other assets
18
—
—
Deferred-tax liabilities
Foreign-branch deferreds
—
—
(69)
Property and equipment
(747)
(478)
(677)
Other liabilities
—
(40)
(21)
Merchandise inventories
(252)
(175)
(187)
Nonoperating deferred-tax assets, net of liabilities
18
(40)
(90)
Foreign-branch deferreds
—
—
(69)
Other
—
(40)
(21)
Tax loss carryforwards
Total deferred-tax liabilities
(999)
(693)
(954)
Foreign tax credit carryforward
—
—
65
Deferred-tax assets, net of liabilities
(58)
(1)
(145)
Deferred-tax assets, net of liabilities
(58)
(1)
(145)