851
EXHIBIT H.10  Costco: Income Statement Forecast Ratios
%
Historical
Forecast
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
CV
Forecast ratio
Revenue growth
3.2
2.2
8.7
9.7
7.9
9.5
6.8
6.5
6.0
5.6
5.2
4.8
4.5
4.2
4.0
4.0
% of prior-year revenues
Revenue split
Merchandise sales
97.8
97.8
97.8
97.8
97.8
97.8
97.8
97.8
97.8
97.8
97.8
97.8
97.8
97.8
97.8
97.8
% of revenues
Membership fees
2.2
2.2
2.2
2.2
2.2
2.2
2.2
2.2
2.2
2.2
2.2
2.2
2.2
2.2
2.2
2.2
% of revenues
Revenues
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
Operating expenses
Merchandise costs1
87.0
86.7
86.7
87.0
87.0
86.9
86.8
86.7
86.7
86.7
86.7
86.7
86.7
86.7
86.7
86.7
% of revenues
Selling, general, and administrative
8.9
9.1
9.0
8.8
8.8
8.8
8.8
8.8
8.8
8.8
8.8
8.8
8.8
8.8
8.8
8.8
% of revenues
Depreciation
7.6
8.1
8.0
7.9
7.6
7.6
7.6
7.6
7.6
7.6
7.6
7.6
7.6
7.6
7.6
7.6
% of net PP&E
Preopening expenses
<0.1
<0.1
<0.1
<0.1
<0.1
<0.1
<0.1
<0.1
<0.1
<0.1
<0.1
<0.1
<0.1
<0.1
<0.1
<0.1
% of revenues
Nonoperating items
Interest rate on debt2
3.5
3.6
2.6
3.1
3.8
3.8
3.8
3.8
3.8
3.8
3.8
3.8
3.8
3.8
3.8
3.8
% of total debt
Interest rate on leases
3.2
3.4
2.4
2.9
3.6
3.6
3.6
3.6
3.6
3.6
3.6
3.6
3.6
3.6
3.6
3.6
% of leases
Interest rate on excess cash
1.0
1.0
2.1
2.3
2.8
1.0
1.0
1.0
1.0
1.0
1.0
1.0
1.0
1.0
1.0
1.0
% of excess cash
Other income3
<0.1
<0.1
<0.1
<0.1
<0.1
—
—
—
—
—
—
—
—
—
—
—
% of revenues
1 Estimated as a percentage of total revenues to better understand components of operating margin. To compare with companies that do not charge for membership, exclude fees.
2 Interest expense forecast based on 10-year A-rated debt. The cost of debt is used to estimate cost of capital is based on the average long-run real rate plus expected inflation. For more on the cost of capital, see Chapter 15.
3 Other income consists primarily of foreign-currency transaction gains and set to 0 in forecast.

852
EXHIBIT H.11  Costco: Balance Sheet Forecast Ratios
Working capital in days; all other accounts in %
Historical
Forecast
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
Forecast Ratio
Working capital
Operating cash
20.2
14.5
16.3
18.7
22.6
7.3
7.3
7.3
7.3
7.3
7.3
7.3
7.3
7.3
7.3
Days in revenues
Receivables, net
3.8
3.8
4.1
4.3
3.7
3.7
3.7
3.7
3.7
3.7
3.7
3.7
3.7
3.7
3.7
Days in merchandise cost
Merchandise inventories
32.2
31.8
32.1
32.7
31.3
31.3
31.3
31.3
31.3
31.3
31.3
31.3
31.3
31.3
31.3
Days in revenues
Other current assets
0.7
0.8
0.8
0.8
2.7
2.7
2.7
2.7
2.7
2.7
2.7
2.7
2.7
2.7
2.7
Days in revenues
Accounts payable
32.5
27.0
31.3
33.3
32.1
32.1
32.1
32.1
32.1
32.1
32.1
32.1
32.1
32.1
32.1
Days in merchandise cost
Accrued salaries and benefits
7.8
8.1
7.6
7.7
7.6
7.6
7.6
7.6
7.6
7.6
7.6
7.6
7.6
7.6
7.6
Days in revenues
Accrued member rewards
2.6
2.7
2.7
2.7
2.8
2.8
2.8
2.8
2.8
2.8
2.8
2.8
2.8
2.8
2.8
Days in revenues
Deferred membership fees
4.0
4.2
4.2
4.2
4.1
4.1
4.1
4.1
4.1
4.1
4.1
4.1
4.1
4.1
4.1
Days in revenues
Other current liabilities
5.3
6.1
7.4
7.5
9.0
9.0
9.0
9.0
9.0
9.0
9.0
9.0
9.0
9.0
9.0
Days in revenues
Long-term assets and liabilities
Property, plant, and equipment
13.3
14.4
14.1
13.9
13.7
13.7
13.7
13.7
13.7
13.7
13.7
13.7
13.7
13.7
13.7
% of revenues
Capitalized operating leases
1.9
2.0
2.0
1.8
1.6
1.6
1.6
1.6
1.6
1.6
1.6
1.6
1.6
1.6
1.6
% of revenues
Other assets
0.5
0.6
0.5
0.4
0.4
0.4
0.4
0.4
0.4
0.4
0.4
0.4
0.4
0.4
0.4
% of revenues
Other liabilities
0.4
0.4
0.4
0.4
0.3
0.3
0.3
0.3
0.3
0.3
0.3
0.3
0.3
0.3
0.3
% of revenues
Debt and capital leases1
Current portion of long-term debt
19.9
19.9
1.2
1.3
23.5
13.2
13.2
12.0
10.7
12.3
14.1
12.6
12.5
12.4
12.4
% of total debt
Current portion of capital leases
0.2
0.2
0.1
0.1
0.4
0.2
0.2
0.2
0.2
0.2
0.2
0.2
0.2
0.2
0.2
% of total debt
Long-term debt
75.5
73.4
93.4
93.0
70.7
81.2
81.0
82.3
83.5
82.0
80.1
81.7
81.8
81.9
81.8
% of total debt
Capital leases
4.4
6.6
5.3
5.6
5.5
5.5
5.7
5.5
5.5
5.5
5.5
5.6
5.5
5.5
5.5
% of total debt
Debt and capital leases
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
Equity accounts2
Stock-based compensation
0.3
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
0.4
% of revenues
Stock options exercised
0.1
—
—
—
—
—
—
—
—
—
—
—
—
—
—
% of revenues
Release of vested restricted stock units
0.1
0.1
0.1
0.2
0.2
0.2
0.2
0.2
0.2
0.2
0.2
0.2
0.2
0.2
0.2
% of revenues
Dividends
120.5
31.7
147.3
29.9
28.9
64.4
64.4
64.4
64.4
64.4
64.4
64.4
64.4
64.4
64.4
% of net income
1 The sum of debt and debt equivalents, inclusive of leases, is forecast as a fixed percentage of projected enterprise value, using a target debt-to-value ratio. Total debt is split between debt and capital leases and between current and long-term, based 
on a 5-year historical average.
2 Excess cash is paid out over 5 years. Remaining cash flow is used to repurchase shares.