What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2022-10-05 compared with 2021-10-06 · 157 added, 186 removed, 798 unchanged (30% of the section changed)

Item 8—Financial Statements and Supplementary Data

COSTCO WHOLESALE CORPORATION

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Reports of Independent Registered Public Accounting Firm

Consolidated Statements of Income

Consolidated Statements of Comprehensive Income

Consolidated Balance Sheets

Consolidated Statements of Equity

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

2 unchanged sentences

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Costco Wholesale Corporation and subsidiaries (the Company) as of August 29, 2021 and August 30, 2020, the related consolidated statements of income, comprehensive income, equity, and cash flows for the 52-week periods ended August 29, 2021, August 30, 2020 and September 1, 2019, and the related notes (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of August 29, 2021 and August 30, 2020, and the results of its operations and its cash flows for the 52-week periods ended August 29, 2021, August 30, 2020 and September 1, 2019, in conformity with U.S.

We have audited the accompanying consolidated balance sheets of Costco Wholesale Corporation and subsidiaries (the Company) as of August 28, 2022, and August 29, 2021, the related consolidated statements of income, comprehensive income, equity, and cash flows for each of the 52-week periods ended August 28, 2022, August 29, 2021, and August 30, 2020, and the related notes (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of August 28, 2022, and August 29, 2021, and the results of its operations and its cash flows for each of the 52-week periods ended August 28, 2022, August 29, 2021, and August 30, 2020, in conformity with U.S.

generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of August 28, 2022, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated October 4, 2022, expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Change in Accounting Principle

The Company changed its method of accounting for leases as of September 2, 2019, due to the adoption of Accounting Standards Update 2016-02 – Leases (ASC 842).

Basis for Opinion

34 unchanged sentences

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of August 28, 2022, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of August 29, 2021 and August 30, 2020, the related consolidated statements of income, comprehensive income, equity, and cash flows for the 52-week periods ended August 29, 2021, August 30, 2020 and September 1, 2019 , and the related notes (collectively, the consolidated financial statements), and our report dated October 5, 2021 expressed an unqualified opinion on those consolidated financial statements.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of August 28, 2022, and August 29, 2021, the related consolidated statements of income, comprehensive income, equity, and cash flows for each of the 52-week periods ended August 28, 2022, August 29, 2021, and August 30, 2020 , and the related notes (collectively, the consolidated financial statements), and our report dated October 4, 2022, expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

20 unchanged sentences

(amounts in millions, except per share data)

52 Weeks Ended 52 Weeks Ended 52 Weeks Ended

52 Weeks Ended

2022 August 29,

2020 September 1,

2021 August 30,

Net sales $ 222,730 $ 192,052 $ 163,220

4 unchanged sentences

Selling, general and administrative 19,779 18,537 16,387

Preopening expenses 76 55 86

Operating income 7,793 6,708 5,435

18 unchanged sentences

(amounts in millions)

52 Weeks Ended 52 Weeks Ended 52 Weeks Ended

52 Weeks Ended

2022 August 29,

2020 September 1,

2021 August 30,

NET INCOME INCLUDING NONCONTROLLING INTERESTS

75 unchanged sentences

— — — — ( 1,193 ) ( 1,193 ) — ( 1,193 )

BALANCE AT SEPTEMBER 1, 2019 439,625 4 6,417 ( 1,436 ) 10,258 15,243 341 15,584

BALANCE AT AUGUST 30, 2020 441,255 4 6,698 ( 1,297 ) 12,879 18,284 421 18,705

— — — — 5,007 5,007 72 5,079

16 unchanged sentences

1,702 — ( 363 ) — — ( 363 ) — ( 363 )

Dividend to noncontrolling interest — — — — — — ( 208 ) ( 208 )

Acquisition of noncontrolling interest — — ( 499 ) ( 6 ) — ( 505 ) ( 337 ) ( 842 )

Repurchases of common stock

( 863 ) — ( 15 ) — ( 427 ) ( 442 ) — ( 442 )

Cash dividends declared

— — — — ( 5,748 ) ( 5,748 ) — ( 5,748 )

Cash dividends declared and other — ( 2 ) 2 — ( 1,498 ) ( 1,498 ) — ( 1,498 )

BALANCE AT AUGUST 28, 2022 442,664 $ 2 $ 6,884 $ ( 1,829 ) $ 15,585 $ 20,642 $ 5 $ 20,647

3 unchanged sentences

(amounts in millions)

52 Weeks Ended 52 Weeks Ended 52 Weeks Ended

52 Weeks Ended

2022 August 29,

2020 September 1,

2021 August 30,

CASH FLOWS FROM OPERATING ACTIVITIES

7 unchanged sentences

Deferred income taxes

( 37 ) 59 104

Changes in operating assets and liabilities:

11 unchanged sentences

CASH FLOWS FROM FINANCING ACTIVITIES

Change in bank payments outstanding 188 137 210

Proceeds from short-term borrowings 41 — —

Proceeds from issuance of long-term debt — — 3,992

3 unchanged sentences

Cash dividend payments ( 1,498 ) ( 5,748 ) ( 1,479 )

Dividend to noncontrolling interest ( 208 ) — —

Acquisition of noncontrolling interest ( 842 ) — —

Other financing activities, net ( 133 ) 162 66

1 unchanged sentence

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS

( 249 ) 46 70

Net change in cash and cash equivalents ( 1,055 ) ( 1,019 ) 3,893

5 unchanged sentences

Income taxes, net $ 1,940 $ 1,527 $ 1,052

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

Cash dividend declared, but not yet paid $ — $ — $ 286

SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES:

Capital expenditures included in liabilities $ 156 $ 184 $ 204

The accompanying notes are an integral part of these consolidated financial statements.

6 unchanged sentences

At August 28, 2022, Costco operated 838 warehouses worldwide:

564 in the United States (U.S.) located in 46 states, Washington, D.C., and Puerto Rico, 105 in Canada, 39 in Mexico, 30 in Japan, 29 in the United Kingdom (U.K.), 16 in Korea, 14 in Taiwan, 12 in Australia, three in Spain, and one each in Iceland, France and China.

578 in the United States (U.S.) located in 46 states, Washington, D.C., and Puerto Rico, 107 in Canada, 40 in Mexico, 31 in Japan, 29 in the United Kingdom (U.K.), 17 in Korea, 14 in Taiwan, 13 in Australia, four in Spain, two each in France and China, and one in Iceland.

The Company operates e-commerce websites in the U.S., Canada, U.K., Mexico, Korea, Taiwan, Japan, and Australia.

3 unchanged sentences

All material inter-company transactions between and among the Company and its consolidated subsidiaries have been eliminated in consolidation.

The Company’s net income excludes income attributable to the noncontrolling interest in Taiwan.

During 2022, the Company paid a cash dividend of $ 208 and purchased the equity interest of its Taiwan operations from its former joint-venture partner for $ 842 , totaling $ 1,050 in the aggregate.

The remaining noncontrolling interest represents the portion of equity interests in a consolidated joint venture that is not 100% owned by the Company.

Unless otherwise noted, references to net income relate to net income attributable to Costco.

1 unchanged sentence

The Company operates on a 52/53-week fiscal year basis with the year ending on the Sunday closest to August 31.

References to 2021, 2020, and 2019 relate to the 52-week fiscal years ended August 29, 2021, August 30, 2020, and September 1, 2019, respectively.

References to 2022, 2021, and 2020 relate to the 52-week fiscal years ended August 28, 2022, August 29, 2021, and August 30, 2020, respectively.

Use of Estimates

2 unchanged sentences

GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

These estimates and assumptions take into account historical and forward-looking factors that the Company believes are reasonable, including but not limited to the potential impacts arising from the novel coronavirus (COVID-19) and related public and private sector policies and initiatives.

These estimates and assumptions take into account historical and forward-looking factors that the Company believes are reasonable.

Actual results could differ from those estimates and assumptions.

Reclassification

Reclassifications were made to our 2021 and 2020 consolidated statements of income and cash flows to conform with current year presentation.

Cash and Cash Equivalents

The Company considers as cash and cash equivalents all cash on deposit, highly liquid investments with a maturity of three months or less at the date of purchase, and proceeds due from credit and debit card transactions with settlement terms of up to four days.

Credit and debit card receivables were $ 1,816 and $ 1,636 at the end of 2021 and 2020, respectively.

Credit and debit card receivables were $ 2,010 and $ 1,816 at the end of 2022 and 2021.

The Company provides for the daily replenishment of major bank accounts as payments are presented.

Included in accounts payable at the end of 2021 and 2020, are $ 999 and $ 810 , respectively, representing the excess of outstanding payments over cash on deposit at the banks on which the payments were drawn.

Included in accounts payable at the end of 2022 and 2021, are $ 995 and $ 999 representing the excess of outstanding payments over cash on deposit at the banks on which the payments were drawn.

Short-Term Investments

30 unchanged sentences

Receivables, Net

Receivables consist primarily of vendor, reinsurance, credit card incentive, third-party pharmacy and other receivables.

Receivables consist primarily of vendor, credit card incentive, reinsurance, third-party pharmacy and other receivables.

Vendor receivables include discounts and volume rebates.

1 unchanged sentence

In certain circumstances, these receivables may be settled against the related payable to that vendor, in which case the receivables are presented on a net basis.

Credit card incentive receivables primarily represent amounts earned under the co-branded credit card arrangements in the U.S.

Reinsurance receivables are held by the Company’s wholly-owned captive insurance subsidiary and primarily represent amounts ceded through reinsurance arrangements gross of the amounts assumed under reinsurance, which are presented within other current liabilities in the consolidated balance sheets.

Credit card incentive receivables primarily represent amounts earned under the co-branded credit card arrangement in the U.S.

Third-party pharmacy receivables generally relate to amounts due from members’ insurers.

Other receivables primarily consist of amounts due from governmental entities, mostly tax-related items.

Receivables are recorded net of an allowance for credit losses which considers creditworthiness of vendors and third parties, historical experience and current economic trends.

Write-offs of receivables were immaterial in 2021, 2020, and 2019.

The valuation allowance related to receivables was not material to our consolidated financial statements at the end of 2022, 2021, and 2020.

Merchandise Inventories

8 unchanged sentences

The Company records an adjustment each quarter, if necessary, for the projected annual effect of inflation or deflation, and these estimates are adjusted to actual results determined at year-end, after actual inflation or deflation rates and inventory levels have been determined.

An immaterial charge was recorded to merchandise costs to increase the cumulative LIFO valuation on merchandise inventories at August 29, 2021.

As of August 30, 2020, U.S.

merchandise inventories valued at LIFO approximated first-in, first-out (FIFO) after considering the lower of cost or market principle.

Canadian and Other International merchandise inventories are predominantly valued using the cost and retail inventory methods, respectively, using the FIFO basis.

Due to inflation, a $ 438 charge was recorded during 2022 to merchandise costs to increase the cumulative LIFO valuation on merchandise inventories at August 28, 2022.

An immaterial LIFO charge was recorded in 2021.

Canadian and Other International merchandise inventories are predominantly valued using the cost and retail inventory methods, respectively, using the first-in, first-out (FIFO) basis.

The Company provides for estimated inventory losses between physical inventory counts using estimates based on experience.

8 unchanged sentences

To the extent that the assets become ready for their intended use, these costs are included in equipment and fixtures and amortized on a straight-line basis over their estimated useful lives.

In the fourth quarter of 2021, the Company recognized an $ 84 write-off of certain information technology assets, which was recorded in selling, general and administrative expenses, in the consolidated statements of income.

In 2022 and 2021, the Company recognized in SG&A expenses write-offs of $ 118 and $ 84 for certain information technology assets.

Repair and maintenance costs are expensed when incurred.

Expenditures for remodels, refurbishments and improvements that add to or change the way an asset functions or that extend the useful life are capitalized.

Expenditures for remodels, refurbishments and improvements that add to or change asset function or useful life are capitalized.

Assets removed during the remodel, refurbishment or improvement are retired.

4 unchanged sentences

Buildings and improvements 5 - 50 years

20,120 19,139

Equipment and fixtures 3 - 20 years

8 unchanged sentences

The Company estimates fair value by obtaining market appraisals from third party brokers or using other valuation techniques.

Impairment charges recognized in 2021 were immaterial.

There were no impairment charges recognized in 2022 or 2020.

The Company leases land and/or buildings at warehouses and certain other office and distribution facilities.

Impairment charges recognized in 2021 were immaterial.

The Company leases land, buildings, and/or equipment at warehouses and certain other office and distribution facilities.

Leases generally contain one or more of the following options, which the Company can exercise at the end of the initial term:

6 unchanged sentences

The Company determines at inception whether a contract is or contains a lease.

Non-lease components and the lease components to which they relate are accounted for together as a single lease component for all asset classes.

The Company initially records right-of-use (ROU) assets and lease obligations for its finance and operating leases based on the discounted future minimum lease payments over the term.

4 unchanged sentences

Impairment of ROU assets is evaluated in a similar manner as described in Property and Equipment, net above.

The Company's asset retirement obligations (ARO) primarily relate to leasehold improvements that at the end of a lease must be removed.

The Company's asset retirement obligations (ARO) primarily relate to leasehold improvements that must be removed at the end of a lease.

These obligations are generally recorded as a discounted liability, with an offsetting asset at the inception of the lease term, based upon the estimated fair value of the costs to remove the improvements.

10 unchanged sentences

The following table summarizes goodwill by reportable segment:

United States Operations Canadian Operations Other International Operations Total

Balance at September 1, 2019 $ 13 $ 27 $ 13 $ 53

Changes in currency translation — — 1 1

Acquisition 934 — — 934

United States Canada Other International Total

Balance at August 30, 2020 $ 947 $ 27 $ 14 $ 988

1 unchanged sentence

Balance at August 29, 2021 $ 953 $ 28 $ 15 $ 996

Changes in currency translation — ( 1 ) ( 2 ) ( 3 )

Balance at August 28, 2022 $ 953 $ 27 $ 13 $ 993

(1) Other consists of changes to the purchase price allocation.

10 unchanged sentences

The reinsurance agreement is one year in duration, and new agreements are entered into by each participant at their discretion at the commencement of the next calendar year.

The participant agreements and practices of the reinsurance program limit a participating members’ individual risk.

The participant agreements and practices of the reinsurance program are designed to limit a participating members’ individual risk.

Income statement adjustments related to the reinsurance program and related impacts to the consolidated balance sheets are recognized as information becomes known.

7 unchanged sentences

Some of these contracts contain credit-risk-related contingent features that require settlement of outstanding contracts upon certain triggering events.

There were no derivative instruments in a net liability position at the end of 2021 and for those in a net liability position at the end of 2020, the amount needed to settle the instruments immediately if the credit-risk-related contingent features were triggered was immaterial.

The aggregate fair value amounts of derivative instruments in a net liability position and the amount needed to settle the instruments immediately if the credit-risk-related contingent features were triggered were immaterial at the end of 2022.

There were no derivative instruments in a net liability position at the end of 2021.

The aggregate notional amounts of open, unsettled forward foreign-exchange contracts were $ 1,242 and $ 1,331 at the end of 2022 and 2021, respectively.

6 unchanged sentences

Foreign Currency

The functional currencies of the Company’s international subsidiaries are the local currency of the country in which the subsidiary is located.

The functional currencies of the Company’s international subsidiaries are their local currencies.

Assets and liabilities recorded in foreign currencies are translated at the exchange rate on the balance sheet date.

6 unchanged sentences

Also included are realized foreign-currency gains or losses from settlements of forward foreign-exchange contracts.

These items were immaterial in 2021, 2020, and 2019.

These items were $ 84 in 2022 and immaterial in 2021 and 2020.

Revenue Recognition

The Company adopted Accounting Standards Update (ASU) 2014-09 in 2019, which provided for changes in the recognition of revenue from contracts with customers.

The Company recognizes sales for the amount of consideration collected from the member, which includes gross shipping fees where applicable, and is net of sales taxes collected and remitted to government agencies and member returns.

2 unchanged sentences

The Company offers merchandise in the following core merchandise categories:

foods and sundries, non-foods (previously hardlines and softlines), and fresh foods.

foods and sundries, non-foods, and fresh foods.

The Company also provides expanded products and services through warehouse ancillary and other businesses.

5 unchanged sentences

The Company is the principal for the majority of its transactions and recognizes revenue on a gross basis.

The Company is the principal when it has control of the merchandise or service before it is transferred to the member, which generally is established when Costco is primarily responsible for merchandising decisions, maintains the relationship with the member, including assurance of member service and satisfaction, and has pricing discretion.

The Company is the principal when it has control of the merchandise or service before it is transferred to the member, which generally is established when Costco is primarily responsible for merchandising decisions, pricing discretion, and maintains the relationship with the member, including assurance of member service and satisfaction.

The Company accounts for membership fee revenue, net of refunds, on a deferred basis, ratably over the one-year membership period.

Deferred membership fees at the end of 2022 and 2021 were $ 2,174 and $ 2,042 , respectively.

In most countries, the Company's Executive members qualify for a 2% reward on qualified purchases, subject to an annual maximum value, which does not expire and can be redeemed only at Costco warehouses.

In most countries, the Company's Executive members qualify for a 2% reward on qualified purchases, subject to an annual maximum value, which does not expire and is redeemable at Costco warehouses.

The Company accounts for this reward as a reduction in sales, net of the estimated impact of non-redemptions (breakage), with the corresponding liability classified as accrued member rewards in the consolidated balance sheets.

8 unchanged sentences

members in June 2016.

The Company receives various forms of consideration, including a royalty on purchases made on the card outside of Costco, a portion of which, after giving rise to estimated breakage, is used to fund the rebate that cardholders receive.

The Company receives various forms of consideration from Citibank, including a royalty on purchases made on the card outside of Costco.

A portion of the royalty is used to fund the rebate that cardholders receive, after taking into consideration breakage, which is calculated based on rebate redemption data.

The rebates are issued in February and expire on December 31.

Breakage is estimated based on redemption data.

The Company also maintains co-branded credit card arrangements in Canada and certain other International subsidiaries.

Merchandise Costs

7 unchanged sentences

Selling, general and administrative expenses consist primarily of salaries, benefits and workers’ compensation costs for warehouse employees (other than fresh foods departments and certain ancillary businesses which are reflected in merchandise costs) as well as all regional and home office employees, including buying personnel.

Selling, general and administrative expenses also include substantially all building and equipment depreciation, stock compensation expense, credit and debit card processing fees, utilities, as well as other operating costs incurred to support warehouse and e-commerce website operations.

Selling, general and administrative expenses also include substantially all building and equipment depreciation, stock compensation expense, credit and debit card processing fees, utilities, preopening, as well as other operating costs incurred to support warehouse and e-commerce website operations.

Retirement Plans

3 unchanged sentences

In addition, the Company provides each eligible participant an annual discretionary contribution.

The Company also has a defined contribution plan for Canadian employees and contributes a percentage of each employee's wages.

The Company also has a defined contribution plan for employees in Canada and contributes a percentage of each employee's wages.

Certain subsidiaries in the Company's Other International operations have defined benefit and defined contribution plans, which are not material.

Amounts expensed under all plans were $ 748 , $ 676 , and $ 614 for 2021, 2020, and 2019, respectively, and are predominantly included in selling, general and administrative expenses in the consolidated statements of income.

Amounts expensed under all plans were $ 824 , $ 748 , and $ 676 for 2022, 2021, and 2020, and are predominantly included in SG&A expenses in the consolidated statements of income.

Stock-Based Compensation

RSUs granted to employees generally vest over five years and allow for quarterly vesting of the pro-rata number of stock-based awards that would vest on the next anniversary of the grant date in the event of retirement or voluntary termination.

Restricted Stock Units (RSUs) granted to employees generally vest over five years and allow for quarterly vesting of the pro-rata number of stock-based awards that would vest on the next anniversary of the grant date in the event of retirement or voluntary termination.

Actual forfeitures are recognized as they occur.

4 unchanged sentences

The fair value of RSUs is calculated as the market value of the common stock on the measurement date less the present value of the expected dividends forgone during the vesting period.

Stock-based compensation expense is predominantly included in selling, general and administrative expenses in the consolidated statements of income.

Stock-based compensation expense is predominantly included in SG&A expenses in the consolidated statements of income.

Certain stock-based compensation costs are capitalized or included in the cost of merchandise.

See Note 7 for additional information on the Company’s stock-based compensation plans.

Preopening Expenses

Preopening expenses include startup costs for new warehouses and relocations, developments in new international markets, new manufacturing and distribution facilities, and expansions at existing warehouses and corporate facilities and are expensed as incurred.

The Company accounts for income taxes using the asset and liability method.

15 unchanged sentences

See Note 6 for additional information.

Note 2—Acquisition of Innovel

On March 17, 2020, the Company acquired Innovel Solutions for $ 999 , using existing cash and cash equivalents.

Innovel (now known as Costco Wholesale Logistics or CWL) provides final-mile delivery, installation and white-glove capabilities for big and bulky products in the United States and Puerto Rico.

Its financial results have been included in the Company's consolidated financial statements from the date of acquisition.

The net purchase price of $ 999 has been allocated to the tangible and intangible assets of $ 294 and liabilities assumed of $ 235 , based on fair values on the acquisition date.

The remaining unallocated net purchase price of $ 940 was recorded as goodwill.

Goodwill represents the acquisition's benefits to the Company, which include the ability to serve more members and improve delivery times, enabling growth in certain segments of our U.S.

e-commerce operations.

The Company assigned this goodwill, which is deductible for tax purposes, to reporting units within the U.S.

Changes to the purchase price allocation originally recorded in 2020 were not material.

Note 2—Investments

1 unchanged sentence

Basis Unrealized

Gains, Net Recorded

Losses, Net Recorded

Available-for-sale:

11 unchanged sentences

Gross unrecognized holding gains and losses on available-for-sale securities were not material for the years ended August 28, 2022, and August 29, 2021.

At the end of 2021 and 2020, there were no available-for-sale securities in a continuous unrealized-loss position.

At those dates, there were no available-for-sale securities in a material continuous unrealized-loss position.

There were no sales of available-for-sale securities during 2022 or 2021.

4 unchanged sentences

Due after one year through five years 197 195 —

Due after five years 61 60 —

Total $ 534 $ 529 $ 317

6 unchanged sentences

Total $ 561 $ 408

(1) At August 29, 2021, $ 12 cash and cash equivalents and $ 381 short-term investments are included in the accompanying consolidated balance sheets.

(1) At August 29, 2021, $ 12 cash and cash equivalents and $ 381 short-term investments are included in the consolidated balance sheets.

5 unchanged sentences

These assets are measured at fair value if determined to be impaired.

Fair value adjustments to nonfinancial assets during 2021 were immaterial and there were no fair value adjustments to these items during 2020.

There were no fair value adjustments to nonfinancial assets during 2022 and in 2021 they were immaterial.

Short-Term Borrowings

1 unchanged sentence

Borrowings on these short-term facilities were immaterial during 2022 and 2021.

Short-term borrowings outstanding were $ 41 at the end of 2021.

There were no outstanding balances at the end of 2020.

Short-term borrowings outstanding were $ 88 and $ 41 at the end of 2022 and 2021.

Long-Term Debt

The Company's long-term debt consists primarily of Senior Notes, described below.

On December 1, 2021, the Company repaid, prior to maturity, the 2.300 % Senior Notes at a redemption price plus accrued interest as specified in the Notes' agreement.

The Company at its option may redeem the Senior Notes at any time, in whole or in part, at a redemption price plus accrued interest.

4 unchanged sentences

Other long-term debt consists of Guaranteed Senior Notes issued by the Company's Japanese subsidiary, valued using Level 3 inputs.

In June 2021, the Japanese subsidiary repaid approximately $ 94 of its Guaranteed Senior Notes.

In April 2020, the Company issued $ 4,000 in aggregate principal amount of Senior Notes as follows:

$ 1,250 of 1.375 % due June 2027;

$ 1,750 of 1.600 % due April 2030;

and $ 1,000 of 1.750 % due April 2032.

In May 2020, a portion of the proceeds from the issuance were used to repay, prior to maturity, the outstanding $ 1,000 and $ 500 principal balances and interest on the 2.150 % and 2.250 % Senior Notes, respectively.

The early redemption resulted in a $ 36 charge which was recorded in interest income and other, net in 2020.

At the end of 2022 and 2021, the fair value of the Company's long-term debt, including the current portion, was approximately $ 6,033 and $ 7,692 , respectively.

37 unchanged sentences

The components of lease expense, excluding short-term lease costs and sublease income (which were not material), were as follows:

2022 2021 2020

Operating lease costs (1)

$ 297 $ 296 $ 252

Finance lease costs:

5 unchanged sentences

(1) Included in selling, general and administrative expenses and merchandise costs in the consolidated statements of income.

(2) Included in interest expense in the consolidated statements of income.

(3) Included in selling, general and administrative expenses and merchandise costs in the consolidated statements of income.

(2) Included in interest expense and merchandise costs in the consolidated statements of income.

Supplemental cash flow information related to leases was as follows:

2022 2021 2020

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows — operating leases

$ 277 $ 282 $ 258

Operating cash flows — finance leases

Financing cash flows — finance leases

Leased assets obtained in exchange for operating lease liabilities 350 354

Leased assets obtained in exchange for finance lease liabilities 399 317

Operating lease assets obtained in exchange for new or modified leases 231 350 354

Financing lease assets obtained in exchange for new or modified leases 794 399 317

As of August 28, 2022, future minimum payments during the next five fiscal years and thereafter are as follows:

10 unchanged sentences

Cash dividends declared in 2022 totaled $ 3.38 per share, as compared to $ 12.98 per share in 2021.

Dividends in 2021 included a special dividend of $ 10.00 per share, resulting in an aggregate payment of approximately $ 4,430 .

Dividends in 2021 included a special dividend of $ 10.00 per share, aggregating approximately $ 4,430 .

The Company's current quarterly dividend rate is $ 0.90 per share.

12 unchanged sentences

The Company grants stock-based compensation, primarily to employees and non-employee directors.

Grants to all executive officers are generally performance-based.

Grants to executive officers are generally performance-based.

Through a series of shareholder approvals, there have been amended and restated plans and new provisions implemented by the Company.

4 unchanged sentences

Shares for vested RSUs are generally delivered to participants annually, net of shares withheld for taxes.

In conjunction with a special cash dividend paid in the second quarter of 2021, and in accordance with the plans, the number of shares subject to outstanding RSUs was increased on the dividend record date to preserve their value.

They were adjusted by multiplying the number of outstanding shares by a factor of 1.019 (rounded up to a whole share), representing the ratio of the Nasdaq closing price of $ 391.77 on November 30, 2020, which was the last trading day immediately prior to the ex-dividend date, to the Nasdaq opening price of $ 384.50 on the ex-dividend date, December 1, 2020.

The outstanding RSUs increased by approximately 94,000 .

The adjustment did not result in additional stock-based compensation expense, as the fair value of the awards did not change.

As further required by the plans, the maximum number of shares issuable was proportionally adjusted, which resulted in an additional 220,000 RSU shares available to be granted.

Summary of Restricted Stock Unit Activity

6 unchanged sentences

• 121,000 performance-based RSUs, of which 82,000 were granted to executive officers subject to the determination of the attainment of performance targets for 2022.

This determination occurred in September 2021, at which time at least 33% of the units vested, as a result of the long service of all executive officers.

This determination occurred in September 2022, at which time at least 33% of the units vested, as a result of the long service of all executive officers receiving performance-based RSUs.

The remaining awards vest upon continued employment over specified periods of time.

6 unchanged sentences

Forfeited ( 123 ) 332.84

Special cash dividend 94 N/A

Outstanding at the end of 2022 3,449 $ 338.41

26 unchanged sentences

Total provision for income taxes $ 1,925 $ 1,601 $ 1,308

Except for certain provisions, the Tax Cuts and Jobs Act (2017 Tax Act) was effective for tax years beginning on or after January 1, 2018.

Most provisions became effective for the Company for 2019, including limitations on the ability to claim foreign tax credits, repeal of the domestic manufacturing deduction, and limitations on certain business deductions.

Provisions with significant impacts that were effective starting in the second quarter of 2018 and throughout 2019 included:

federal income tax rate, remeasurement of certain net deferred tax liabilities, and a transition tax on deemed repatriation of certain foreign earnings.

The lower U.S.

tax rate of 21.0 % was effective for all of 2021, 2020, and 2019.

The reconciliation between the statutory tax rate and the effective rate for 2022, 2021, and 2020 is as follows:

4 unchanged sentences

Employee stock ownership plan (ESOP) ( 23 ) ( 0.3 ) ( 91 ) ( 1.3 ) ( 24 ) ( 0.5 )

2017 Tax Act — — — — ( 123 ) ( 2.6 )

Other ( 196 ) ( 2.5 ) ( 46 ) ( 0.7 ) ( 77 ) ( 1.4 )

Total $ 1,925 24.6 % $ 1,601 24.0 % $ 1,308 24.4 %

During 2019, the Company recognized net tax benefits of $ 123 related to the 2017 Tax Act.

This benefit included $ 105 related to U.S.

taxation of deemed foreign dividends, partially offset by losses of current year foreign tax credits.

The Company recognized total net tax benefits of $ 163 , $ 81 and $ 221 in 2021, 2020 and 2019, respectively.

These include benefits of $ 75 , $ 77 and $ 59 , respectively, related to the stock-based compensation accounting standard adopted in 2018, in addition to the impacts of the 2017 Tax Act noted above.

The Company recognized total net tax benefits of $ 130 , $ 163 and $ 81 in 2022, 2021 and 2020.

These include benefits of $ 94 , $ 75 and $ 77 , related to stock-based compensation.

During 2021, there was a net tax benefit of $ 70 related to the portion of the special dividend paid through our 401(k) plan.

14 unchanged sentences

Foreign branch deferreds ( 85 ) ( 92 )

Other — ( 40 )

Total deferred tax liabilities ( 1,979 ) ( 1,987 )

2 unchanged sentences

and deferred income tax liabilities of $ 724 and $ 754 , respectively, included in other long-term liabilities.

In 2021 and 2020, the Company had valuation allowances of $ 214 and $ 105 , respectively, primarily related to foreign tax credits that the Company believes will not be realized due to carry forward limitations.

In 2022 and 2021, the Company had valuation allowances of $ 313 and $ 214 , primarily related to foreign tax credits that the Company believes will not be realized due to carry forward limitations.

The foreign tax credit carry forwards are set to expire beginning in fiscal 2030.

The Company no longer considers fiscal year earnings of non-U.S.

consolidated subsidiaries after 2017 to be indefinitely reinvested (other than China) and has recorded the estimated incremental foreign withholding taxes (net of available foreign tax credits) and state income taxes payable assuming a hypothetical repatriation to the U.S.

The Company generally no longer considers fiscal year earnings of non-U.S.

consolidated subsidiaries after 2017 to be indefinitely reinvested (other than China and Taiwan) and has recorded the estimated incremental foreign withholding taxes (net of available foreign tax credits) and state income taxes payable assuming a hypothetical repatriation to the U.S.

The Company continues to consider undistributed earnings of certain non-U.S.

5 unchanged sentences

Gross decreases—tax positions in prior years ( 12 ) —

Gross decreases—settlements ( 12 ) —

Lapse of statute of limitations ( 6 ) ( 1 )

3 unchanged sentences

Because of the impact of deferred tax accounting, other than interest and penalties, the disallowance of these tax positions would not affect the annual effective tax rate but would accelerate the payment of cash to the taxing authority.

The total amount of such unrecognized tax benefits that if recognized would favorably affect the effective income tax rate in future periods is $ 30 and $ 28 at the end of 2021 and 2020, respectively.

The total amount of such unrecognized tax benefits that if recognized would favorably affect the effective income tax rate in future periods is $ 15 and $ 30 at the end of 2022 and 2021.

Accrued interest and penalties related to income tax matters are classified as a component of income tax expense.

10 unchanged sentences

In certain cases, the Company has received assessments from the authorities.

In the fourth quarter of 2020, the Company reached an agreement on a product tax audit resulting in a benefit of $ 84 .

The Company recorded a charge of $ 123 in 2019 regarding this matter.

Other possible losses or range of possible losses associated with these examinations are either immaterial or an estimate of the possible loss or range of loss cannot be made at this time.

Possible losses or range of possible losses associated with these matters are either immaterial or an estimate of the possible loss or range of loss cannot be made at this time.

If certain matters or a group of matters were to be decided adversely to the Company, it could result in a charge that might be material to the results of an individual fiscal quarter or year.

13 unchanged sentences

In accordance with applicable accounting guidance, the Company establishes an accrual for legal proceedings if and when those matters present loss contingencies that are both probable and reasonably estimable.

There may be exposure to loss in excess of any amounts accrued.

There may be exposure to loss in excess of amounts accrued.

The Company monitors those matters for developments that would affect the likelihood of a loss (taking into account where applicable indemnification arrangements concerning suppliers and insurers) and the accrued amount, if any, thereof, and adjusts the amount as appropriate.

As of the date of this Report, the Company has recorded immaterial accruals with respect to certain matters described below, in addition to other immaterial accruals for matters not described below.

The Company has recorded immaterial accruals with respect to certain matters described below, in addition to other immaterial accruals for matters not described below.

If the loss contingency at issue is not both probable and reasonably estimable, the Company does not establish an accrual, but will continue to monitor the matter for developments that will make the loss contingency both probable and reasonably estimable.

4 unchanged sentences

and/or (iii) the matters involve complex or novel legal theories or a large number of parties.

The Company is a defendant in an action commenced in August 2013 under the California Labor Code Private Attorneys General Act (PAGA) alleging violation of California Wage Order 7-2001 for failing to provide seating to employees who work at entrance and exit doors in California warehouses.

Costco Wholesale Corp., et al.

The Company is a defendant in an action commenced in July 2013 under the California Labor Code Private Attorneys General Act (PAGA) alleging violation of California Wage Order 7-2001 for failing to provide seating to employees who work at entrance and exit doors in California warehouses.

Costco Wholesale Corp.

2013-1-CV-248813;

2 unchanged sentences

The Company filed an answer denying the material allegations of the complaint.

A bench trial was held in June and July;

no decision has been issued.

In June 2022, a business center employee raised similar claims alleging failure to provide seating to employees who work at membership refund desks in California warehouses and business centers.

Costco Wholesale Corp.

Alameda Superior Court).

The complaint seeks relief under the California Labor Code, including civil penalties and attorneys' fees.

The Company filed an answer denying the material allegations of the complaint.

In December 2018, a depot employee raised similar claims, alleging that depot employees in California did not receive suitable seating or reasonably comfortable workplace temperature conditions.

3 unchanged sentences

The Company filed an answer denying the material allegations of the complaint.

In October 2019, the parties reached an agreement to settle for an immaterial amount the seating claims on a representative basis, which received court approval in February 2020.

The workplace temperature claims continue in litigation.

In January 2019, a former seasonal employee filed a class action, alleging failure to provide California seasonal employees meal and rest breaks, proper wage statements, and appropriate wages.

Costco Wholesale Corp.

19-CV-340438;

Santa Clara Superior Court).

The complaint seeks relief under the California Labor Code, including civil penalties and attorneys’ fees.

In October 2019, the parties reached an agreement on a class settlement for an immaterial amount, which received court approval in January 2021.

In October 2019, the parties settled for an immaterial amount the seating claims on a representative basis, which received court approval in

February 2020.

The parties settled the temperature claims for an immaterial amount in April 2022, and court approval was received in May 2022.

In March 2019, employees filed a class action against the Company alleging claims under California law for failure to pay overtime, to provide meal and rest periods and itemized wage statements, to timely pay wages due to terminating employees, to pay minimum wages, and for unfair business practices.

5 unchanged sentences

In January 2020, the plaintiffs dismissed their Labor Code claims without prejudice, and the court remanded the action to state court.

The remand was appealed;

the appeal is in abeyance due to a pending settlement for an immaterial amount that was agreed upon in February 2021.

The preliminary approval hearing of the settlement is scheduled for October 2021.

Settlement for an immaterial amount was agreed upon in February 2021.

Final court approval of the settlement was granted on May 3, 2022.

A proposed intervenor has appealed the denial of her motion to intervene.

In May 2019, an employee filed a class action against the Company alleging claims under California law for failure to pay overtime, to provide itemized wage statements, to timely pay wages due to terminating employees, to pay minimum wages, and for unfair business practices.

2 unchanged sentences

Relief is sought under the California Labor Code, including civil penalties and attorneys' fees.

The Company has moved for partial summary judgement, and the parties have filed competing motions regarding class certification.

In September 2021, the court granted Costco’s motion for partial summary judgment and denied class certification.

In August 2019, the plaintiff filed a companion case in state court seeking penalties under PAGA.

3 unchanged sentences

The state court action has been stayed pending resolution of the federal action.

In June 2019, an employee filed a class action against the Company alleging claims under California law for failure to pay overtime, to provide meal and rest periods, itemized wage statements, to timely pay wages due to terminating employees, to pay minimum wages, and for unfair business practices.

Costco Wholesale Corp .

3:19-cv-05624-EMC;

The Company filed an answer denying the material allegations of the complaint.

In June 2021, the plaintiff agreed to dismiss his claims for failure to provide meal and rest breaks and to pay minimum wages.

In July 2021, the parties reached an agreement settling for an immaterial amount the remaining claim and related derivative claims.

In April 2020, an employee, alleging underpayment of sick pay, filed a class and representative action against the Company, alleging claims under California law for failure to pay all wages at termination and for Labor Code penalties under PAGA.

In December 2020, a former employee filed suit against the Company asserting collective and class claims on behalf of non-exempt employees under the Fair Labor Standards Act and New York Labor Law for failure to pay for all hours worked, failure to pay certain non-exempt employees on a weekly basis, and failure to provide proper wage statements and notices.

The plaintiff also asserted individual retaliation claims.

Costco Wholesale Corp.

1:20-cv-06067;

The case was stayed due to the plaintiff's bankruptcy, and his individual claim was settled for an immaterial amount.

A request for dismissal of the class and representative action is pending.

In July 2020, an employee filed an action under PAGA on behalf of all California non-exempt employees alleging violations of California Labor Code provisions regarding meal and rest periods, minimum wage, overtime, wage statements, reimbursement of expenses, and payment of wages at termination.

Costco Wholesale Corporation (Case No.

37-2020-00023551-CU-OE-CTL;

San Diego County Superior Court).

In August 2020, the Company filed a motion to strike portions of the complaint, which was denied, and an answer has been filed denying the material allegations of the complaint.

In December 2020, a former employee filed suit against the Company asserting collective and class claims on behalf of non-exempt employees under the Fair Labor Standards Act and New York Labor Law for failure to pay for all hours worked on a weekly basis and failure to provide proper wage statements and notices.

The plaintiff also asserts individual retaliation claims.

An amended complaint was filed, and the Company denied the material allegations of the amended complaint.

Based on an agreement in principle concerning settlement of the matter, involving a proposed payment by the Company of an immaterial amount, the federal action has been dismissed.

In April 2022, Cappadora and a second plaintiff filed an action against the Company in New York state court asserting the same class claims asserted in the federal action under the New York Labor Law and seeking preliminary approval of the class settlement.

Cappadora and Sancho v.

Costco Wholesale Corp.

Nassau County Supreme Court).

In August 2021, a former employee filed a similar suit, asserting class claims on behalf of certain non-exempt employees under New York Labor Law for failure to pay on a weekly basis.

Costco Wholesale Corp.

2:21-cv-4814;

An amended complaint was filed, and the Company has denied the material allegations of the amended complaint.

In August 2021, a former employee filed a similar suit, asserting collective and class claims on behalf of non-exempt employees under the FLSA and New York law.

The Company answered the complaint on October 21, 2021, denying the material allegations.

In April 2022, a former employee filed a similar suit, asserting class claims on behalf of certain non-exempt employees under New York Labor Law, as well as under the Fair Labor Standards Act, for failure to pay on a weekly basis and failure to pay overtime.

Costco Wholesale Corp.

2:22-cv-02108;

The Company has not yet responded to the complaint.

In February 2021, a former employee filed a class action against the Company alleging violations of California Labor Code regarding payment of wages, meal and rest periods, wage statements, reimbursement of expenses, payment of final wages to terminated employees, and for unfair business practices.

5 unchanged sentences

In August 2021, the plaintiff filed a second amended complaint and filed a separate representative action under PAGA asserting the same Labor Code claims and seeking civil penalties and attorneys' fees.

The Company has filed an answer to the second amended class action complaint denying the material allegations.

The Company filed an answer to the second

amended class action complaint, denying the material allegations.

The Company also filed an answer to the PAGA representative action, denying the material allegations.

In July 2021, a former temporary staffing employee filed a class action against the Company and a staffing company alleging violations of the California Labor Code regarding payment of wages, meal and rest periods, wage statements, the timeliness of wages and final wages, and for unfair business practices.

2 unchanged sentences

San Joaquin Superior Court).

The Company has not yet responded to the complaint.

Beginning in December 2017, the United States Judicial Panel on Multidistrict Litigation has consolidated numerous cases concerning the impacts of opioid abuses filed against various defendants by counties, cities, hospitals, Native American tribes, third-party payors, and others.

The Company has moved to compel arbitration of the plaintiff's individual claims and to dismiss the class action complaint.

On September 7, 2021, the same former employee filed a separate representative action under PAGA asserting the same Labor Code violations and seeking civil penalties and attorneys' fees.

The case has been stayed pending the motion to compel in the related case.

In September 2021, an employee filed a class action against the Company alleging violations of the California Labor Code regarding the alleged failure to provide sick pay, failure to timely pay wages due at separation from employment, and for violations of California's unfair competition law.

De Benning v.

Costco Wholesale Corp.

34-2021-00309030-CU-OE-GDS;

Sacramento Superior Court).

The Company answered the complaint in January 2022, denying its material allegations.

In April 2022, a settlement for an immaterial amount was agreed upon, subject to court approval.

In March 2022, an employee filed a class action against the Company alleging violations of the California Labor Code regarding the failure to:

pay wages, provide meal and rest periods, provide accurate wage statements, timely pay final wages, and reimburse business expenses.

Costco Wholesale Corp.

Los Angeles Superior Court).

The Company filed an answer denying the material allegations.

In May 2022, an employee filed a PAGA-only representative action against the Company alleging claims under the California Labor Code regarding the payment of wages, meal and rest periods, the timeliness of wages and final wages, wage statements, accurate records and business expenses.

Costco Wholesale Corp.

Los Angeles Superior Court).

Beginning in December 2017, the United States Judicial Panel on Multidistrict Litigation consolidated numerous cases concerning the impacts of opioid abuses filed against various defendants by counties, cities, hospitals, Native American tribes, third-party payors, and others.

In re National Prescription Opiate Litigation (MDL No.

2 unchanged sentences

The Company is defending all of the pending matters.

The Company and its CEO and CFO were defendants in putative class actions brought on behalf of shareholders who acquired Company stock between June 6 and October 25, 2018.

Costco Wholesale Corp., et al.

The complaints alleged violations of the federal securities laws stemming from the Company’s disclosures concerning internal control over financial reporting.

A consolidated amended complaint was filed on April 16, 2019.

On November 26, 2019, the court entered an order dismissing the consolidated amended complaint and granting the plaintiffs leave to file a further amended complaint.

A further amended complaint was filed on March 9, which the court dismissed with prejudice on August 19, 2020.

On July 20, 2021, the Ninth Circuit affirmed the dismissal.

Members of the Board of Directors, one other individual, and the Company were defendants in a shareholder derivative action related to the internal controls and related disclosures identified in the putative class actions, alleging that the individual defendants breached their fiduciary duties.

Hamilton James, Susan Decker, Kenneth Denman, Richard Galanti, Craig Jelinek, Richard Libenson, John Meisenbach, Charles Munger, Jeffrey Raikes, John Stanton, Mary Agnes Wilderotter, and Costco Wholesale Corp.

Similar actions were filed in King County Superior Court on February 20, 2019, Elliott v.

19-2-04824-7), April 16, 2019, Brad Shuman, et ano.

Hamilton James, Susan Decker, Kenneth Denman, Richard Galanti, Craig Jelinek, John Meisenbach, Charles Munger, Jeffrey Raikes, John Stanton, Mary Agnes Wilderotter, and Costco Wholesale Corp.

19-2-10460-1), and June 12, 2019, Rahul Modi v.

Hamilton James, Susan Decker, Kenneth Denman, Richard Galanti, Craig Jelinek, John Meisenbach, Charles Munger, Jeffrey Raikes, John Stanton, Mary Agnes Wilderotter, and Costco Wholesale Corp.

19-2-15514-1).

In light of the dismissal in Johnson noted above, the plaintiffs in the derivative actions agreed voluntarily to dismiss their complaints.

On June 23, 2020, a putative class action was filed against the Company, the “Board of Directors,” the “Costco Benefits Committee” and others under the Employee Retirement Income Security Act, in the United States District Court for the Eastern District of Wisconsin.

Costco Wholesale, et al.

The class is alleged to be beneficiaries of the Costco 401(k) plan from June 23, 2014, and the claims are that the defendants breached their fiduciary duties in the operation and oversight of the plan.

The complaint seeks injunctive relief, damages, interest, costs, and attorneys' fees.

On September 11, 2020, the defendants filed a motion to dismiss the complaint, and on September 21 the plaintiffs filed an amended complaint, which the defendants have also moved to dismiss.

Members of the Board of Directors, six corporate officers and the Company are defendants in a shareholder derivative action related to chicken welfare and alleged breaches of fiduciary duties.

Smith, et ano.

Vachris, et al., Superior Court of the State of Washington, County of King, No, 22-2-08937-7SEA, (filed 6/14/22, as amended, 6/30/22);

The complaint seeks from the individual defendants damages, injunctive relief, costs, and attorneys' fees.

A motion to dismiss the amended complaint has been filed.

The Company does not believe that any pending claim, proceeding or litigation, either alone or in the aggregate, will have a material adverse effect on the Company’s financial position, results of operations or cash flows;

however, it is possible that an unfavorable outcome of some or all of the matters, however unlikely, could result in a charge that might be material to the results of an individual fiscal quarter or year.

it is possible that an unfavorable outcome of some or all of the matters, however unlikely, could result in a charge that might be material to the results of an individual fiscal quarter or year.

Note 11—Segment Reporting

The Company is principally engaged in the operation of membership warehouses through wholly owned subsidiaries in the U.S., Canada, Mexico, Japan, U.K., Korea, Australia, Spain, Iceland, France, and China and through a majority-owned subsidiary in Taiwan.

The Company is principally engaged in the operation of membership warehouses through wholly owned subsidiaries in the U.S., Canada, Mexico, Japan, U.K., Korea, Taiwan, Australia, Spain, France, China, and Iceland.

Reportable segments are largely based on management’s organization of the operating segments for operational decisions and assessments of financial performance, which considers geographic locations.

1 unchanged sentence

Inter-segment net sales and expenses have been eliminated in computing total revenue and operating income.

Certain operating expenses, predominantly stock-based compensation, incurred on behalf of the Company's Canadian and Other International operations, are included in the U.S.

operations because those costs generally come under the responsibility of U.S.

Effective for fiscal 2022, stock-based compensation was allocated to the segments in this reporting.

This change reflected a decision to evaluate the financial performance of the segments inclusive of this expense.

Operating income was restated in each of the segments for all prior periods to reflect this change.

The following table provides information for the Company's reportable segments:

United States

Operations Canadian

Operations Other

International

Operations Total

United States Canada Other

International Total

Total revenue $ 165,294 $ 31,675 $ 29,985 $ 226,954

18 unchanged sentences

The following table summarizes net sales by merchandise category;

sales from e-commerce websites and business centers have been allocated to their respective merchandise categories:

sales from e-commerce websites and business centers have been allocated to the applicable merchandise categories:

2022 2021 2020

9 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data