COSTCO WHOLESALE CORP /NEW 10-K

Item 9A—Controls and Procedures Evaluation of Disclosure Controls and Procedures Our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934, as amended) are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC and to ensure that information required to be disclosed is accumulated and communicated to management, including our principal executive and financial officers, to allow timely decisions regarding disclosure. The Chief Executive Officer and the Chief Financial Officer, with assistance from other members of management, have reviewed the effectiveness of our disclosure controls and procedures as of September 3, 2023, and, based on their evaluation, have concluded that the disclosure controls and procedures were effective as of such date. Management's Annual Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP and includes those policies and procedures that: (1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and the dispositions of our assets; (2) provide reasonable assurance that our transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that our receipts and expenditures are being made only in accordance with appropriate authorizations; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness for future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Under the supervision of and with the participation of our management, we assessed the effectiveness of our internal control over financial reporting as of September 3, 2023, using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control — Integrated Framework (2013). Based on its assessment, management has concluded that our internal control over financial reporting was effective as of September 3, 2023. The attestation of KPMG LLP, our independent registered public accounting firm, on the effectiveness of our internal control over financial reporting is included with the consolidated financial statements in Item 8 of this Report. Changes in Internal Control Over Financial Reporting There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f) of the Exchange Act) that occurred during the fourth quarter of 2023 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. 60 Table of Contents Item 9B—Other Information (amounts in whole dollars) Disclosure pursuant to Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012 and Section 13(r) of the Securities Exchange Act of 1934, as amended. During 2023 we had three individual cardholders under a business membership in the name of the Embassy of the Islamic Republic of Iran at our subsidiary in Mexico. Gross revenue during 2023 attributable to the membership was approximately $1,276, and our estimated profit on these transactions was approximately $100. The membership was canceled during the second quarter of 2023. The Company does not intend to continue these activities. During the fiscal quarter ended September 3, 2023, no director or officer of the Company adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement, as each term is defined in Item 408(a) of Regulation S-K. Item 9C—Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not Applicable. PART III Item 10—Directors, Executive Officers and Corporate Governance Information relating to the availability of our code of ethics for senior financial officers and a list of our executive officers appear in Part I, Item 1 of this Report. The information required by this Item concerning our directors and nominees for director is incorporated herein by reference to the sections entitled “Proposal 1: Election of Directors,” “Directors” and “Committees of the Board” in Costco’s Proxy Statement for its 2024 annual meeting of shareholders, which will be filed with the SEC within 120 days of the end of our fiscal year (“Proxy Statement”). Item 11—Executive Compensation The information required by this Item is incorporated herein by reference to the sections entitled “Compensation of Directors,” “Executive Compensation,” and “Compensation Discussion and Analysis” in Costco’s Proxy Statement. Item 12—Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The information required by this Item is incorporated herein by reference to the section entitled “Principal Shareholders” and “Equity Compensation Plan Information” in Costco’s Proxy Statement. Item 13—Certain Relationships and Related Transactions, and Director Independence The information required by this Item is incorporated herein by reference to the sections entitled “Proposal 1: Election of Directors,” “Directors,” “Committees of the Board,” “Shareholder Communications to the Board,” “Meeting Attendance,” “Report of the Compensation Committee of the Board of Directors,” “Certain Relationships and Transactions” and “Report of the Audit Committee” in Costco’s Proxy Statement. Item 14—Principal Accounting Fees and Services Our independent registered public accounting firm is KPMG LLP , Seattle, WA , Auditor Firm ID: 185 . The information required by this Item is incorporated herein by reference to the sections entitled “Independent Public Accountants” in Costco’s Proxy Statement. 61 Table of Contents PART IV Item 15—Exhibits, Financial Statement Schedules (a) Documents filed as part of this report are as follows: 1. Financial Statements: See the listing of Financial Statements included as a part of this Form 10-K in Item 8 of Part II. 2. Financial Statement Schedules: All schedules have been omitted because the required information is not present or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the consolidated financial statements, including the notes thereto. (b) Exhibits: The required exhibits are filed as part of this Annual Report on Form 10-K or are incorporated herein by reference. Incorporated by Reference Exhibit Number Exhibit Description Filed Herewith Form Period Ended Filing Date 3.1 Articles of Incorporation as amended of Costco Wholesale Corporation 10-K 8/28/2022 10/5/2022 3.2 Bylaws as amended of Costco Wholesale Corporation 8-K 8/10/2023 4.1 First Supplemental Indenture between Costco Wholesale Corporation and U.S. Bank National Association, as Trustee, dated as of March 20, 2002 (incorporated by reference to Exhibits 4.1 and 4.2 to the Company's Current Report on the Form 8-K filed on March 25, 2002) 8-K 3/25/2002 4.2 Form of 1.375% Senior Notes due June 20, 2027 8-K 4/17/2020 4.3 Form of 1.600% Senior Notes due April 20, 2030 8-K 4/17/2020 4.4 Form of 1.750% Senior Notes due April 20, 2032 8-K 4/17/2020 4.5 Form of 2.300% Senior Notes due May 18, 2022 8-K 5/16/2017 4.6 Form of 2.750% Senior Notes due May 18, 2024 8-K 5/16/2017 4.7 Form of 3.000% Senior Notes due May 18, 2027 8-K 5/16/2017 4.8 Description of Common Stock 10-K 8/28/2022 10/5/2022 10.1* Costco Wholesale Executive Health Plan 10-K 9/2/2012 10/19/2012 10.2* 2019 Incentive Plan DEF 14 12/17/2019 62 Table of Contents Incorporated by Reference Exhibit Number Exhibit Description Filed Herewith Form Period Ended Filing Date 10.3* Seventh Restated 2002 Stock Incentive Plan DEF 14A 12/19/2014 10.3.1* 2019 Stock Incentive Plan Restricted Stock Unit Award Agreement-Employee 10-Q 11/24/2019 12/23/2019 10.3.2* 2019 Stock Incentive Plan Restricted Stock Unit Award Agreement - Non-U.S. Employee 10-Q 11/24/2019 12/23/2019 10.3.3* 2019 Stock Incentive Plan Restricted Stock Unit Award Agreement-Non-Executive Director 10-Q 11/24/2019 12/23/2019 10.3.4* 2019 Stock Incentive Plan Letter Agreement for 2020 Performance-Based Restricted Stock Units-Executive 10-Q 11/24/2019 12/23/2019 10.4* Fiscal 2023 Executive Bonus Plan 8-K 11/9/2022 10.5* Executive Employment Agreement, effective January 1, 2017, between W. Craig Jelinek and Costco Wholesale Corporation 10-Q 11/20/2016 12/16/2016 10.5.1* Extension of the Term of the Executive Employment Agreement, effective January 1, 2019, between W. Craig Jelinek and Costco Wholesale Corporation 10-Q 11/25/2018 12/20/2018 10.5.2* Extension of the Term of the Executive Employment Agreement, effective January 1, 2020, between W. Craig Jelinek and Costco Wholesale Corporation 10-Q 11/24/2019 12/23/2019 10.5.3* Extension of the Term of the Executive Employment Agreement, effective January 1, 2021, between W. Craig Jelinek and Costco Wholesale Corporation 10-Q 11/22/2020 12/16/2020 10.5.4* Extension of the Term of the Executive Employment Agreement, effective January 1, 2022, between W. Craig Jelinek and Costco Wholesale Corporation 10-Q 11/21/2021 12/22/2021 10.5.5* Extension of the Term of the Executive Employment Agreement, effective January 1, 2023, between W. Craig Jelinek and Costco Wholesale Corporation 10-Q 11/20/2022 12/29/2022 63 Table of Contents Incorporated by Reference Exhibit Number Exhibit Description Filed Herewith Form Period Ended Filing Date 10.6 Form of Indemnification Agreement 14A 12/13/1999 10.7* Deferred Compensation Plan 10-K 9/1/2013 10/16/2013 10.8** Citibank, N.A. Co-Branded Credit Card Agreement 10-Q/A 5/10/2015 8/31/2015 10.8.1** First Amendment to Citi, N.A. Co-Branded Credit Card Agreement 10-Q 11/22/2015 12/17/2015 10.8.2** Second Amendment to Citi, N.A. Co-Branded Credit Card Agreement 10-Q 2/14/2016 3/9/2016 10.8.3** Third Amendment to Citi, N.A. Co-Branded Credit Card Agreement 10-K 8/28/2016 10/12/2016 10.8.4** Fourth Amendment to Citi, N.A. Co-Branded Credit Card Agreement 10-Q 2/18/2018 3/15/2018 10.8.5** Fifth Amendment to Citi, N.A. Co-Branded Credit Card Agreement 10-Q 2/17/2019 3/13/2019 10.8.6 # Sixth Amendment to Citi, N.A. Co-Branded Credit Card Agreement 10-K 9/1/2019 10/11/2019 10.8.7 Seventh Amendment to Citi, N.A. Co-Branded Credit Card Agreement 10-Q 2/14/2021 3/10/2021 10.8.8 Eighth Amendment to Citi, N.A. Co-Branded Credit Card Agreement 10-Q 2/13/2022 3/10/2022 10.8.9 Ninth Amendment to Citi, N.A. Co-Branded Credit Card Agreement 10-Q 11/20/2022 12/29/2022 10.8.10 Tenth Amendment to Citi, N.A. Co-Branded Credit Card Agreement 10-Q 11/20/2022 12/29/2022 10.8.11 Eleventh Amendment to Citi, N.A. Co-Branded Credit Card Agreement 10-Q 2/12/2023 3/9/2023 10.8.12 # Twelfth Amendment to Citi, N.A. Co-Branded Credit Card Agreement x 21.1 Subsidiaries of the Company x 23.1 Consent of Independent Registered Public Accounting Firm x 31.1 Rule 13a – 14(a) Certifications x 32.1 Section 1350 Certifications x 101.INS Inline XBRL Instance Document x 101.SCH Inline XBRL Taxonomy Extension Schema Document x 64 Table of Contents Incorporated by Reference Exhibit Number Exhibit Description Filed Herewith Form Period Ended Filing Date 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document x 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document x 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document x 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document x 104 Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) x _____________________ * Management contract, compensatory plan or arrangement. ** Portions of this exhibit have been omitted under a confidential treatment order issued by the Securities and Exchange Commission. # Certain information in this exhibit has been omitted because it is both (i) not material and (ii) customarily and actually treated by the registrant as private or confidential. (c) Financial Statement Schedules—None. Item 16—Form 10-K Summary None. 65 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. October 10, 2023 C OSTCO W HOLESALE C ORPORATION (Registrant) By /s/ R ICHARD A. G ALANTI Richard A. Galanti Executive Vice President, Chief Financial Officer and Director Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. October 10, 2023 By /s/ W. C RAIG J ELINEK By /s/ H AMILTON E. J AMES W. Craig Jelinek Chief Executive Officer and Director Hamilton E. James Chairman of the Board By /s/ R ICHARD A. G ALANTI By /s/ D ANIEL M. H INES Richard A. Galanti Executive Vice President, Chief Financial Officer and Director (Principal Financial Officer) Daniel M. Hines Senior Vice President and Corporate Controller (Principal Accounting Officer) By /s/ R ON M. V ACHRIS By /s/ S USAN L. D ECKER Ron M. Vachris President, Chief Operating Officer and Director Susan L. Decker Director By /s/ K ENNETH D. D ENMAN By /s/ S ALLY J EWELL Kenneth D. Denman Director Sally Jewell Director By /s/ C HARLES T. M UNGER By /s/ J EFFREY S. R AIKES Charles T. Munger Director Jeffrey S. Raikes Director By /s/ J OHN W. S TANTON By /s/ M ARY (M AGGIE) A. W ILDEROTTER John W. Stanton Director Mary (Maggie) A. Wilderotter Director 66