Costco Wholesale (COST) 10-K risk factor changes: FY2022 vs FY2021

These Risk Factors should be carefully reviewed in conjunction with Management's Discussion and Analysis of Financial Condition and Results of Operations in [Item [removed: 7](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_46)] [added: 7](#i7f92822ddf844c24912627bf68509b56_46)] and our consolidated financial statements and related notes in Item 8 of this Report.

Our financial and operational performance is highly dependent on our U.S. and Canadian operations, which comprised [removed: 86%] [added: 87%] and [removed: 81%] [added: 85%] of net sales and operating income in [removed: 2021,] [added: 2022,] respectively.

Within the U.S., we are highly dependent on our California operations, which comprised 28% of U.S. net sales in [removed: 2021.][added: 2022.]

Our e-commerce [removed: business depends] [added: operations depend] heavily on third-party and in-house logistics providers and [removed: that business] is negatively affected when these providers are unable to provide services in a timely fashion.

Increased remote work [removed: due to the COVID-19 pandemic] has also increased the possible attack surfaces.

In addition, data we collect, store and process is subject to a variety of U.S. and international laws and regulations, such as the European Union's General Data Protection Regulation, California Consumer Privacy Act, Health Insurance Portability and Accountability Act, and other [removed: emerging] privacy and cybersecurity laws across the various states and around the globe, which may carry significant potential penalties for noncompliance.

We [removed: are also subject to] [added: must comply with] evolving payment card association and network operating rules, including data security rules, certification requirements and rules governing electronic funds transfers.

Our members are increasingly using mobile phones, tablets, computers, and other devices to shop and to interact with us through social [removed: media, particularly in the wake of COVID-19.][added: media.]

Our ability to control labor and benefit costs is subject to numerous internal and external factors, including the continuing impacts of the pandemic, regulatory changes, prevailing wage rates, [added: union relations] and healthcare and other insurance costs.

Additionally, actions in various countries, particularly [removed: China, the United States] [added: China] and the United [removed: Kingdom,] [added: States,] have [removed: raised the cost of many items and created uncertainty with respect to tariff impacts on] [added: affected] the costs of some of our merchandise.

General economic conditions can also be affected by events like the outbreak of [removed: war] [added: hostilities, including but not limited to the Ukraine conflict,] or acts of terrorism.

During [removed: 2021,] [added: 2022,] our international operations, including Canada, generated [removed: 28%] [added: 27%] and [removed: 36%] [added: 32%] of our net sales and operating income, respectively.

Natural disasters and extreme weather conditions, [added: including those impacted by climate change,] such as hurricanes, typhoons, floods, earthquakes, wildfires, droughts; acts of terrorism or violence, including active shooter situations; energy shortages; public health issues, including pandemics and quarantines, particularly in California or Washington state, where our centralized operating systems and administrative personnel are located, could negatively affect our operations and financial performance.

- The pace of recovery when the pandemic [removed: subsides.][added: subsides;]

We also sell a substantial amount of gasoline, the demand for which could be impacted by concerns about climate change and [removed: which face] increased [removed: regulation.][added: regulations.]

At the end of [removed: 2021,] [added: 2022,] we operated [removed: 251] [added: 260] warehouses outside of the U.S., and we plan to continue expanding our international operations.

[removed: These factors include political and economic conditions, regulatory constraints, currency regulations,] policy changes such as the withdrawal of the U.K. from the European Union, and other matters in any of the countries or regions in which we operate, now or in the future.

We are also subject to fee increases by these service providers.

Higher tariffs could adversely impact our results.

As the economy transitions to lower carbon intensity we cannot guarantee that we will make adequate investments or successfully implement strategies that will effectively achieve our climate-related goals, which could lead to negative perceptions among members and other stakeholders and result in reputational harm.

More stringent fuel economy standards and public policies aimed at increasing the adoption of zero-emission and alternative fuel vehicles and other regulations related to climate change will affect our future operations and may adversely impact our profitability, and require significant capital expenditures.

These factors include political and economic conditions, regulatory constraints, currency regulations,

While these potential impacts are uncertain, they could have an adverse impact on our results.

The pandemic has resulted in widespread and continuing impacts on the global economy and on our employees, members, suppliers and other people and entities with which we do business.

There is considerable uncertainty regarding the extent to which COVID-19 will continue to spread and the extent and duration of measures to try to contain the virus, such as travel bans and restrictions, quarantines, shelter-in-place orders, and business and government shutdowns.

The pandemic and any preventative or protective actions that governments or we may take may result in business disruption, reduced member traffic and reduced sales in certain merchandise categories, and increased operating expenses.

The pandemic is continuing to impact the global supply chain, with restrictions and limitations on business activities causing disruption and delay, which have strained certain domestic and international supply chains, and could continue to negatively affect the flow or availability of certain products.

Member demand for certain products has and may continue to fluctuate as the pandemic progresses and member

behaviors change, which may challenge our ability to anticipate and/or adjust inventory levels to meet that demand.

Similarly, increased demand for online purchases of products has impacted our fulfillment operations, resulting in delays in deliveries and lost sales from being out of stock for certain SKUs.

Failure to appropriately respond, or the perception of an inadequate response to evolving events around the pandemic, could cause reputational harm to our brand and subject us to lost sales, as well as claims from employees, members, suppliers, regulators or other parties.

Additionally, a future outbreak of confirmed cases of COVID-19 in our facilities could result in temporary or sustained workforce shortages or facility closures, which would negatively impact our business and results of operations.

Some jurisdictions have taken measures intended to expand the availability of workers compensation or to change the presumptions applicable to workers compensation measures.

These actions may increase our exposure to claims and increase our costs.

Our exposure to market risk for changes in interest rates relates primarily to our investment holdings that are diversified among various instruments considered to be cash equivalents, as defined in [Note [removed: 1](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_106)] [added: 1](#i7f92822ddf844c24912627bf68509b56_103)] to the consolidated financial statements included in Item 8 of this Report, as well as short-term investments in government and agency securities with effective maturities of generally three months to five years at the date of purchase.

A 100 basis point change in interest rates as of the end of [removed: 2021] [added: 2022] would have had an immaterial incremental change in fair market value.

As of the end of [removed: 2021,] [added: 2022,] long-term debt with fixed interest rates was [removed: $7,531.][added: $6,590.]

See [Note [removed: 5](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_124)] [added: 4](#i7f92822ddf844c24912627bf68509b56_121)] to the consolidated financial statements included in Item 8 of this Report for more information on our long-term debt.

The contracts are intended primarily to economically hedge exposure to U.S. dollar merchandise inventory expenditures made by our international [removed: subsidiaries whose functional currency is other than the U.S. dollar.][added: subsidiaries.]

For additional information related to the Company's forward foreign-exchange contracts, see [Notes [removed: 1](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_106)] [added: 1](#i7f92822ddf844c24912627bf68509b56_103)] and [removed: [4](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_121)] [added: [3](#i7f92822ddf844c24912627bf68509b56_118)] to the consolidated financial statements included in Item 8 of this Report.

A hypothetical 10% strengthening of the functional currency compared to the non-functional currency exchange rates at August [removed: 29, 2021,] [added: 28, 2022,] would have decreased the fair value of the contracts by [removed: $149] [added: $128] and resulted in an unrealized loss in the consolidated statements of income for the same amount.

We are principally engaged in the operation of membership warehouses in the United States (U.S.) and Puerto Rico, Canada, [added: Mexico, Japan,] United Kingdom (U.K.), [removed: Mexico, Japan,] Korea, [added: Taiwan,] Australia, Spain, France, [removed: Iceland,] China, and [removed: through a majority-owned subsidiary in Taiwan.][added: Iceland.]

Costco operated [added: 838,] 815, [removed: 795,] and [removed: 782] [added: 795] warehouses worldwide at August [added: 28, 2022, August] 29, 2021, [added: and] August 30, 2020, [removed: and September 1, 2019,] respectively.

References to [added: 2022,] 2021, [removed: 2020,] and [removed: 2019] [added: 2020] relate to the 52-week fiscal years ended August [added: 28, 2022, August] 29, 2021, [added: and] August 30, 2020, [removed: and September 1, 2019,] respectively.

We [removed: generally] [added: often] sell inventory before we are required to pay for it, even while taking advantage of early payment discounts.

[removed: commerce] [added: For our e-commerce] operations we ship merchandise through our depots, our logistics operations for big and bulky items, as well as through drop-ship and other delivery arrangements with our suppliers.

Because the hours of operation are shorter than [added: many] other retailers, and due to other efficiencies inherent in a warehouse-type operation, labor costs are lower relative to the volume of sales.

In general, with variations by country, our warehouses accept certain credit cards, including Costco co-branded cards, debit cards, cash and checks, [removed: co-brand cardholder rebates,] Executive member 2% reward [removed: certificates] [added: certificates, co-brand cardholder rebates,] and our proprietary stored-value card (shop card).

We average anywhere from [removed: 9,000] [added: 10,000] to 11,000 SKUs online, some of which are also available in our warehouses.

- Non-Foods [removed: (previously Hardlines and Softlines; including] [added: (including] major appliances, electronics, health and beauty aids, hardware, garden and patio, sporting goods, tires, toys and seasonal, office supplies, automotive care, postage, tickets, apparel, small appliances, furniture, domestics, housewares, special order kiosk, and jewelry)

We operated [removed: 636] [added: 668] gas stations at the end of [removed: 2021.][added: 2022.]

Net sales for our gasoline business [removed: represented] [added: increased to] approximately [removed: 9%] [added: 14%] of total net sales in [removed: 2021.][added: 2022.]

Net sales for e-commerce represented approximately 7% of total net sales in [removed: 2021.][added: 2022.]

This figure does not [removed: consider] [added: include] other services we offer online in certain countries such as business delivery, travel, same-day grocery, and various other services.

[added: Costco Travel offers vacation] packages, hotels, cruises, and other travel products exclusively for Costco members (offered in the U.S., Canada, and the U.K.).

When sources of supply become unavailable, we seek [removed: alternative sources.][added: alternatives.]

Certain financial information for our segments and geographic areas is included in [Note [removed: 12](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_154)] [added: 11](#i7f92822ddf844c24912627bf68509b56_145)] to the consolidated financial statements included in Item 8 of this Report.

Gold Star memberships are available to individuals; Business memberships are limited to businesses, including individuals with a business license, retail sales [removed: license] [added: license,] or comparable document.

Our annual fee for these memberships is $60 in [removed: our] [added: the] U.S. and [removed: Canadian operations and] varies in other countries.

Our member renewal rate was [removed: 91%] [added: 93%] in the U.S. and Canada and [removed: 89%] [added: 90%] worldwide at the end of [removed: 2021.][added: 2022.]

Our renewal [removed: rate] [added: rate, which excludes affiliates of Business members,] is a trailing calculation that captures renewals during the period seven to eighteen months prior to the reporting date.

| | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | |

| Gold Star | | | [removed: 50,200] [added: 54,000] | | | | | | [removed: 46,800] [added: 50,200] | | | | | | [removed: 42,900] [added: 46,800] | | |

| Business, including affiliates | | | [removed: 11,500] [added: 11,800] | | | | | | [removed: 11,300] [added: 11,500] | | | | | | [removed: 11,000] [added: 11,300] | | |

| Total paid members | | | [removed: 61,700] [added: 65,800] | | | | | | [removed: 58,100] [added: 61,700] | | | | | | [removed: 53,900] [added: 58,100] | | |

| Household cards | | | [removed: 49,900] [added: 53,100] | | | | | | [removed: 47,400] [added: 49,900] | | | | | | [removed: 44,600] [added: 47,400] | | |

| Total cardholders | | | [removed: 111,600] [added: 118,900] | | | | | | [removed: 105,500] [added: 111,600] | | | | | | [removed: 98,500] [added: 105,500] | | |

Paid cardholders (except affiliates) are eligible to upgrade to an Executive membership in the [removed: U.S. and Canada,] [added: U.S.,] for an additional annual fee of $60.

Executive memberships are also available in [added: Canada,] Mexico, the U.K., Japan, Korea, and Taiwan, for which the additional [removed: annual] fee varies.

Executive members earn a 2% reward on qualified purchases (generally up to a maximum reward of $1,000 per year), [removed: which can be redeemed only] [added: redeemable] at Costco warehouses.

This program also offers (except in Mexico and [removed: Korea),] [added: Korea)] access to additional savings and benefits on various business and consumer services, such as auto and home insurance, the Costco auto purchase program, and check printing.

Executive members totaled [removed: 25.6] [added: 29.1] million and represented [removed: 55%] [added: 57%] of paid members (excluding affiliates) in the U.S. and [removed: Canada] [added: Canada,] and [removed: 17%] [added: 22%] of paid members (excluding affiliates) in our Other International [removed: operations at the end of 2021.][added: operations.]

At the end of [removed: 2021,] [added: 2022,] we employed [removed: 288,000] [added: 304,000] employees worldwide.

The large majority (approximately 95%) is employed in our membership warehouses and distribution [removed: channels] [added: channels,] and [removed: approximately 17,000 employees] [added: less than 10%] are represented by unions.

| United States | | | [removed: 192,000] [added: 202,000] | | | | | | [removed: 181,000] [added: 192,000] | | | | | | [removed: 167,000] [added: 181,000] | | |

| Canada | | | [removed: 47,000] [added: 50,000] | | | | | | [removed: 46,000] [added: 47,000] | | | | | | [removed: 42,000] [added: 46,000] | | |

| Other International | | | [removed: 49,000] [added: 52,000] | | | | | | [removed: 46,000] [added: 49,000] | | | | | | [removed: 45,000] [added: 46,000] | | |

| Total employees | | | [removed: 288,000] [added: 304,000] | | | | | | [removed: 273,000] [added: 288,000] | | | | | | [removed: 254,000] [added: 273,000] | | |

In [removed: 2021,] [added: 2022,] in the U.S. that rate was [removed: above] [added: approximately] 90% for employees who have been with us for at least one year.

As the global effect of [removed: coronavirus (COVID-19)] [added: COVID-19] continues to evolve, we are closely monitoring the changing situation and complying with public health guidance.

Walmart, Target, Kroger, and Amazon are among our significant general merchandise retail competitors in the U.S. We also compete with other warehouse [removed: clubs] [added: clubs,] including Walmart’s Sam’s Club and BJ’s Wholesale [removed: Club, and many of the major metropolitan areas in the U.S. and certain of our Other International locations have multiple clubs.][added: Club.]

The sales penetration of Executive members represented approximately 71% of worldwide net sales in 2022.

*Employee Base*

| | | | 2022 | | | | | | 2021 | | | | | | 2020 | | |

*Growth and Engagement*

*Diversity, Equity and Inclusion*

In 2022, we appointed a new Chief Diversity and Inclusion Officer.

*Well Being*

In October 2021, we provided an increase of a minimum of $0.50 per hour for U.S. and Canada wage scales.

In March 2022, we provided certain compensation increases, including a $0.75 per hour increase to the top of the U.S. wage scales, increased the starting wage to $17.50, and granted our employees one additional day of paid time off.

In July 2022, we provided an additional increase to the top of the U.S. wage scales of $0.50 per hour.

Many of the major metropolitan areas in the U.S. and certain of our Other International locations have multiple competing clubs.

| John Sullivan | | | | | | Executive Vice President, General Counsel & Corporate Secretary. Mr. Sullivan has been General Counsel since 2016 and Corporate Secretary since 2010. | | | | | | 2021 | | | | | | 62 | | |

| Claudine E. Adamo | | | | | | Executive Vice President, Merchandising. Ms. Adamo was Senior Vice President, Non Foods, from 2018 to February 2022, and Vice President, Non Foods, from 2013 to 2018. | | | | | | 2022 | | | | | | 52 | | |

| Caton Frates | | | | | | Executive Vice President, Chief Operating Officer, Southwest Division. Mr. Frates was Senior Vice President, Los Angeles Division, from 2015 to May 2022. | | | | | | 2022 | | | | | | 54 | | |

| Pierre Riel | | | | | | Executive Vice President, Chief Operating Officer, International Division. Mr. Riel was Senior Vice President, Country Manager, Canada, from 2019 to March 2022, and Senior Vice President, Eastern Canada Region, from 2001 to 2019. | | | | | | 2022 | | | | | | 59 | | |

For our e-

Costco Travel offers vacation

The change did not impact 2019.

They generally shop more frequently and spend more than other members.

In 2021, we added training and communication for managers on topics of race, bias and equity, and greater visibility of our employee demographics.

In response to the COVID-19 pandemic and its associated challenges, we began providing premium pay to the majority of our hourly employees in March 2020 and continued for a full year through February 2021, at which time a portion of the premium was built permanently into our hourly wage scales in the U.S. In fall 2020, we also began offering employees additional paid time off to attend to child care and schooling needs through the 2021 school year.

| Joseph P. Portera | | | | | | Executive Vice President, Chief Operating Officer, Eastern and Canadian Divisions. Mr. Portera has held these positions since 1994 and has been the Chief Diversity Officer since 2010. | | | | | | 1994 | | | | | | 69 | | |

See discussion of Legal Proceedings in [Note [removed: 11](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_151)] [added: 10](#i7f92822ddf844c24912627bf68509b56_142)] to the consolidated financial statements included in Item 8 of this Report.

For the fiscal year ended August [removed: 29, 2021][added: 28, 2022]

| Common Stock, [removed: $.01] [added: $.005] Par Value | | | | | | COST | | | | | | The NASDAQ Global Select Market | | |

The aggregate market value of the voting stock held by non-affiliates of the registrant as of February [removed: 14, 2021] [added: 13, 2022] was [removed: $155,810,963,274.][added: $225,434,477,639.]

The number of shares outstanding of the registrant’s common stock as of September [removed: 28, 2021,] [added: 27, 2022,] was [removed: 441,823,811.][added: 442,604,145.]

Portions of the Company’s Proxy Statement for the Annual Meeting of Shareholders to be held on January [removed: 20, 2022,] [added: 19, 2023,] are incorporated by reference into [Part [removed: III](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_169)] [added: III](#i7f92822ddf844c24912627bf68509b56_157)] of this Form 10-K.

ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED AUGUST [removed: 29, 2021][added: 28, 2022]

| Item 1. | | | [removed: [Business](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_16)] [added: [Business](#i7f92822ddf844c24912627bf68509b56_16)] | | | [removed: [3](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_16)] [added: [3](#i7f92822ddf844c24912627bf68509b56_16)] | | |

| Item 1A. | | | [Risk [removed: Factors](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_19)] [added: Factors](#i7f92822ddf844c24912627bf68509b56_19)] | | | [removed: [9](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_19)] [added: [9](#i7f92822ddf844c24912627bf68509b56_19)] | | |

| Item 1B. | | | [Unresolved Staff [removed: Comments](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_22)] [added: Comments](#i7f92822ddf844c24912627bf68509b56_22)] | | | [removed: [19](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_22)] [added: [19](#i7f92822ddf844c24912627bf68509b56_22)] | | |

| Item 2. | | | [removed: [Properties](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_25)] [added: [Properties](#i7f92822ddf844c24912627bf68509b56_25)] | | | [removed: [19](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_25)] [added: [19](#i7f92822ddf844c24912627bf68509b56_25)] | | |

| Item 3. | | | [Legal [removed: Proceedings](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_28)] [added: Proceedings](#i7f92822ddf844c24912627bf68509b56_28)] | | | [removed: [19](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_28)] [added: [19](#i7f92822ddf844c24912627bf68509b56_28)] | | |

| Item 4. | | | [Mine Safety [removed: Disclosures](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_31)] [added: Disclosures](#i7f92822ddf844c24912627bf68509b56_31)] | | | [removed: [19](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_31)] [added: [19](#i7f92822ddf844c24912627bf68509b56_31)] | | |

| Item 5. | | | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_37)] [added: Securities](#i7f92822ddf844c24912627bf68509b56_37)] | | | [removed: [20](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_37)] [added: [20](#i7f92822ddf844c24912627bf68509b56_37)] | | |

| Item 6. | | | [removed: [Reserved](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_43)] [added: [Reserved](#i7f92822ddf844c24912627bf68509b56_43)] | | | [removed: [21](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_43)] [added: [21](#i7f92822ddf844c24912627bf68509b56_43)] | | |

| Item 7. | | | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_46)] [added: Operations](#i7f92822ddf844c24912627bf68509b56_46)] | | | [removed: [22](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_46)] [added: [22](#i7f92822ddf844c24912627bf68509b56_46)] | | |

| Item 7A. | | | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_73)] [added: Risk](#i7f92822ddf844c24912627bf68509b56_73)] | | | [removed: [31](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_73)] [added: [30](#i7f92822ddf844c24912627bf68509b56_73)] | | |

| Item 8. | | | [Financial Statements and Supplementary [removed: Data](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_76)] [added: Data](#i7f92822ddf844c24912627bf68509b56_76)] | | | [removed: [33](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_76)] [added: [32](#i7f92822ddf844c24912627bf68509b56_76)] | | |

| Item 9. | | | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_160)] [added: Disclosure](#i7f92822ddf844c24912627bf68509b56_148)] | | | [removed: [65](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_160)] [added: [64](#i7f92822ddf844c24912627bf68509b56_148)] | | |

| Item 9A. | | | [Controls and [removed: Procedures](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_163)] [added: Procedures](#i7f92822ddf844c24912627bf68509b56_151)] | | | [removed: [65](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_163)] [added: [64](#i7f92822ddf844c24912627bf68509b56_151)] | | |

| Item 9B. | | | [Other [removed: Information](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_166)] [added: Information](#i7f92822ddf844c24912627bf68509b56_154)] | | | [removed: [66](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_166)] [added: [65](#i7f92822ddf844c24912627bf68509b56_154)] | | |

| Item 10. | | | [Directors, Executive Officers and Corporate [removed: Governance](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_172)] [added: Governance](#i7f92822ddf844c24912627bf68509b56_160)] | | | [removed: [66](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_172)] [added: [65](#i7f92822ddf844c24912627bf68509b56_160)] | | |

| Item 11. | | | [Executive [removed: Compensation](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_175)] [added: Compensation](#i7f92822ddf844c24912627bf68509b56_163)] | | | [removed: [66](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_175)] [added: [65](#i7f92822ddf844c24912627bf68509b56_163)] | | |

| Item 12. | | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_178)] [added: Matters](#i7f92822ddf844c24912627bf68509b56_166)] | | | [removed: [66](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_178)] [added: [65](#i7f92822ddf844c24912627bf68509b56_166)] | | |

| Item 13. | | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_181)] [added: Independence](#i7f92822ddf844c24912627bf68509b56_169)] | | | [removed: [66](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_181)] [added: [65](#i7f92822ddf844c24912627bf68509b56_169)] | | |

| Item 14. | | | [Principal Accounting Fees and [removed: Services](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_184)] [added: Services](#i7f92822ddf844c24912627bf68509b56_172)] | | | [removed: [66](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_184)] [added: [65](#i7f92822ddf844c24912627bf68509b56_172)] | | |

| Item 15. | | | [Exhibits, Financial Statement [removed: Schedules](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_190)] [added: Schedules](#i7f92822ddf844c24912627bf68509b56_178)] | | | [removed: [66](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_190)] [added: [65](#i7f92822ddf844c24912627bf68509b56_178)] | | |

| Item 16. | | | [Form 10-K [removed: Summary](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_193)] [added: Summary](#i7f92822ddf844c24912627bf68509b56_181)] | | | [removed: [69](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_193)] [added: [68](#i7f92822ddf844c24912627bf68509b56_181)] | | |

Certain statements contained in this [removed: Report] [added: document] constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of [removed: 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.][added: 1995.]

[removed: They include] [added: For these purposes, forward-looking] statements [added: are statements] that address activities, events, conditions or developments that [removed: we expect] [added: the Company expects] or [removed: anticipate] [added: anticipates] may occur in the future and may relate to such matters as [added: net] sales growth, changes in comparable sales, cannibalization of existing locations by new openings, price or fee changes, earnings performance, earnings per share, stock-based compensation expense, warehouse openings and closures, capital spending, the effect of adopting certain accounting standards, future financial reporting, financing, margins, return on invested capital, strategic direction, expense controls, membership renewal rates, shopping frequency, litigation, and the demand for our products and services.

[removed: Forward-looking] [added: In some cases, forward-looking] statements [removed: may also] [added: can] be identified [removed: by the] [added: because they contain] words [added: such as] “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “likely,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” “would,” or similar expressions and the negatives of those terms.

Such forward-looking statements involve risks and uncertainties that may cause actual events, results, or performance to differ materially from those indicated by such statements, including, without limitation, the factors set forth in the section titled “[Item 1A-Risk [removed: Factors](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_19)”,] [added: Factors](#i7f92822ddf844c24912627bf68509b56_19)”,] and other factors noted in the section titled “[Item 7-Management's Discussion and Analysis of Financial Condition and Results of [removed: Operations](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_46)”] [added: Operations](#i7f92822ddf844c24912627bf68509b56_46)”] and in the consolidated financial statements and related notes in Item 8 of this Report.

| [PART I](#i7f92822ddf844c24912627bf68509b56_13) | | | | | | | | |

| [PART II](#i7f92822ddf844c24912627bf68509b56_34) | | | | | | | | |

| Item 9C. | | | [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](#i7f92822ddf844c24912627bf68509b56_1620) | | | [65](#i7f92822ddf844c24912627bf68509b56_1620) | | |

| [PART III](#i7f92822ddf844c24912627bf68509b56_157) | | | | | | | | |

| [PART IV](#i7f92822ddf844c24912627bf68509b56_175) | | | | | | | | |

| | | | [Signatures](#i7f92822ddf844c24912627bf68509b56_184) | | | [69](#i7f92822ddf844c24912627bf68509b56_184) | | |

| [PART I](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_13) | | | | | | | | |

| [PART II](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_34) | | | | | | | | |

| [PART III](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_169) | | | | | | | | |

| [PART IV](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_187) | | | | | | | | |

| | | | [Signatures](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_196) | | | [70](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_196) | | |

At August [removed: 29, 2021,] [added: 28, 2022,] we operated [removed: 815] [added: 838] membership warehouses:

| United States and Puerto Rico | | | [removed: 454] [added: 466] | | | | | | [removed: 110] [added: 112] | | | | | | [removed: 564] [added: 578] | | |

[removed: (1)121] [added: (1)126] of the [removed: 171] [added: 177] leases are land-only leases, where Costco owns the building.

At the end of [removed: 2021,] [added: 2022,] our warehouses contained approximately [removed: 118.9] [added: 122.5] million square feet of operating floor space: [removed: 83.2] [added: 85.4] million in the U.S.; [removed: 14.9] [added: 15.2] million in Canada; and [removed: 20.8] [added: 21.9] million in Other International.

Total square feet associated with distribution and logistics facilities were approximately [removed: 31.4] [added: 31.0] million.

| Canada | | | 90 | | | | | | 17 | | | | | | 107 | | |

| Other International | | | 105 | | | | | | 48 | | | | | | 153 | | |

| Total | | | 661 | | | | | | 177 | | | | | | 838 | | |

| Canada | | | 89 | | | | | | 16 | | | | | | 105 | | |

| Other International | | | 101 | | | | | | 45 | | | | | | 146 | | |

| Total | | | 644 | | | | | | 171 | | | | | | 815 | | |

Our common stock is traded on the NASDAQ Global Select Market under the symbol “COST.” On September [removed: 28, 2021,] [added: 27, 2022,] we had [removed: 9,958] [added: 10,279] stockholders of record.

The following table sets forth information on our common stock repurchase activity for the fourth quarter of [removed: 2021] [added: 2022] (dollars in millions, except per share data):

| Total fourth quarter | | | | | | | | | [removed: 318,000] [added: 373,000] | | | | | | $ | [removed: 398.76] [added: 495.49] | | | | | [removed: 318,000] [added: 373,000] | | | | | | | | |

The following graph compares the cumulative total shareholder return [removed: (stock price appreciation and the] [added: assuming] reinvestment of [removed: dividends)] [added: dividends] on an investment of $100 in Costco common stock, S&P 500 Index, and the S&P 500 Retail Index over the five years from [removed: August 28, 2016,] [added: September 3, 2017,] through August [removed: 29, 2021.][added: 28, 2022.]

[removed: ][added: ]

The following graph provides information concerning average sales per warehouse over a [removed: 10 year] [added: 10-year] period.

| 2021 | | | 20 | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: $] | [added: 140] | | [removed: $] [added: 158] | [removed: 140] | |

| 2020 | | | 13 | | | | | | | | | | | | | | | | | | | | | | | | [removed: | | |] $ | 132 | | 152 | | | [added: 184 | | |]

| 2019 | | | 20 | | | | | | | | | | | | | | | | | | | | | [removed: | | |] $ | 129 | | 138 | | | 172 | | | [added: 208 | | |]

| 2018 | | | 21 | | | | | | | | | | | | | | | | | | [removed: | | |] $ | 116 | | 119 | | | 141 | | | 172 | | | [added: 202 | | |]

| 2017 | | | 26 | | | | | | | | | | | | | | | [removed: | | |] $ | 121 | | 142 | | | 158 | | | 176 | | | 206 | | | [added: 237 | | |]

| 2016 | | | 29 | | | | | | | | | | | | [removed: | | |] $ | 87 | | 97 | | | 118 | | | 131 | | | 145 | | | 173 | | | [added: 204 | | |]

| 2015 | | | 23 | | | | | | | | | [removed: | | |] $ | 83 | | 85 | | | 94 | | | 112 | | | 122 | | | 136 | | | 163 | | | [added: 189 | | |]

| 2014 | | | 30 | | | | | | [removed: | | |] $ | 108 | | 109 | | | 115 | | | 125 | | | 140 | | | 144 | | | 155 | | | 182 | | | [added: 208 | | |]

| Totals | | | [removed: 815 | | | 155] [added: 838] | | | 160 | | | 164 | | | 162 | | | 159 | | | 163 | | | 176 | | | 182 | | | 192 | | | 217 | | | [added: 245 | | |]

| | | | | | | [removed: 2012 | | |] 2013 | | | 2014 | | | 2015 | | | 2016 | | | 2017 | | | 2018 | | | 2019 | | | 2020 | | | 2021 | | | [added: 2022 | | |]

| 2017 was a 53-week fiscal year [added: but it has been normalized for purposes of comparability] | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| May 9—June 5, 2022 | | | | | | | | | 98,000 | | | | | | $ | 463.77 | | | | | 98,000 | | | | | | $ | 2,947 | |

| June 6—July 3, 2022 | | | | | | | | | 98,000 | | | | | | 467.53 | | | | | | 98,000 | | | | | | 2,901 | | |

| July 4—July 31, 2022 | | | | | | | | | 89,000 | | | | | | 512.08 | | | | | | 89,000 | | | | | | 2,856 | | |

| August 1—August 28, 2022 | | | | | | | | | 88,000 | | | | | | 545.08 | | | | | | 88,000 | | | | | | 2,808 | | |

| 2022 | | | 23 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 150 | |

| 2013 & Before | | | 633 | | | $ | 160 | | 167 | | | 168 | | | 167 | | | 173 | | | 186 | | | 193 | | | 203 | | | 230 | | | 261 | | |

| May 10—June 6, 2021 | | | | | | | | | 102,000 | | | | | | $ | 381.50 | | | | | 102,000 | | | | | | $ | 3,338 | |

| June 7—July 4, 2021 | | | | | | | | | 108,000 | | | | | | 387.32 | | | | | | 108,000 | | | | | | 3,296 | | |

| July 5—August 1, 2021 | | | | | | | | | 63,000 | | | | | | 412.73 | | | | | | 63,000 | | | | | | 3,270 | | |

| August 2—August 29, 2021 | | | | | | | | | 45,000 | | | | | | 446.15 | | | | | | 45,000 | | | | | | 3,250 | | |

| 2013 | | | 26 | | | | | | $ | 99 | | 109 | | | 113 | | | 116 | | | 124 | | | 137 | | | 144 | | | 158 | | | 186 | | |

| 2012 & Before | | | 607 | | | $ | 155 | | 163 | | | 169 | | | 170 | | | 169 | | | 175 | | | 188 | | | 195 | | | 205 | | | 232 | | |

This section generally discusses the results of operations for [removed: 2021] [added: 2022] compared to [removed: 2020.][added: 2021.]

For discussion related to the results of operations and changes in financial condition for [removed: 2020] [added: 2021] compared to [removed: 2019] [added: 2020] refer to Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations in our fiscal year [removed: 2020] [added: 2021] Form 10-K, which was filed with the United States Securities and Exchange Commission (SEC) on October [removed: 7, 2020.][added: 6, 2021.]

We believe that the most important driver of our profitability is increasing net sales, particularly comparable [removed: sales growth.][added: sales.]

Net sales includes our core merchandise categories (foods and sundries, non-foods, and fresh foods), warehouse ancillary [removed: (includes gasoline,] [added: (gasoline,] pharmacy, optical, food court, hearing aids, and tire installation) and other businesses [removed: (includes e-commerce,] [added: (e-commerce,] business centers, travel and other).

We define comparable sales as net sales from warehouses open for more than one year, including remodels, relocations and expansions, and [removed: sales-related] [added: sales related] to e-commerce websites operating for more than one year.

Sales comparisons can also be particularly influenced by certain factors that are beyond our control: fluctuations in currency exchange rates (with respect to [removed: the consolidation of the results of] our international operations); [added: inflation] and changes in the cost of gasoline and associated competitive conditions.

The higher our comparable sales exclusive of these items, the more we can leverage [removed: certain of] our [removed: selling, general and administrative (SG&A)] [added: SG&A] expenses, reducing them as a percentage of sales and enhancing profitability.

While we cannot control or reliably predict general economic health or changes in competition, we believe that we have been successful historically in adapting our business to these changes, such as through adjustments to our pricing and merchandise mix, including increasing the penetration of our private-label [removed: items] [added: items,] and through online offerings.

We do not focus in the short-term on maximizing prices charged, but instead seek to maintain what we believe is a perception among our members of our “pricing authority” [removed: on quality goods] – consistently providing the most competitive values.

Our investments in merchandise pricing may include reducing prices on merchandise to drive sales or meet competition and holding prices steady despite cost increases instead of passing the increases on to our members, all negatively impacting gross margin [added: and gross margin] as a percentage of net sales (gross margin percentage).

We believe our gasoline business [removed: draws members,] [added: enhances traffic in our warehouses,] but it generally has a lower gross margin percentage relative to our non-gasoline business.

Rapidly changing gasoline prices may significantly impact our [removed: near-term net sales growth.][added: near-]

Additionally, actions in various countries, particularly [removed: China, the United States] [added: China] and the United [removed: Kingdom,] [added: States,] have [removed: created][added: affected the costs of some of our merchandise.]

[removed: Certain merchandise categories] [added: Merchandise costs in 2022] were impacted by inflation higher than what we have experienced in recent years.

Our rate of [removed: operating floor space] square footage growth is generally higher in foreign markets, due to the smaller base in those markets, and we expect that to continue.

Because our business operates on very low margins, modest changes in various items in the consolidated statements of income, particularly merchandise costs and [removed: selling, general and administrative] [added: SG&A] expenses, can have substantial impacts on net income.

Our operating model is generally the same across our U.S., Canadian, and Other International operating segments (see [Note [removed: 12](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_154)] [added: 11](#i7f92822ddf844c24912627bf68509b56_145)] to the consolidated financial statements included in Item 8 of this Report).

Certain operations in the Other International segment have relatively higher rates of square footage growth, lower wage and benefit costs as a percentage of sales, less or no direct membership warehouse competition, or lack [removed: an] e-commerce [removed: business.][added: or business delivery.]

In discussions of our consolidated operating results, we refer to the impact of changes in foreign currencies relative to the U.S. dollar, which are [removed: references to] the differences between the foreign-exchange rates we use to convert the financial results of our international operations from local currencies into U.S. [removed: dollars for financial reporting purposes.][added: dollars.]

References to [added: 2022,] 2021, [removed: 2020,] and [removed: 2019] [added: 2020] relate to the 52-week fiscal years ended August [added: 28, 2022, August] 29, 2021, [added: and] August 30, 2020, [removed: and September 1, 2019,] respectively.

Highlights for [added: 2022 versus] 2021 [removed: included:][added: include:]

- We opened [removed: 22] [added: 26] new warehouses, including [removed: 2] [added: 3] relocations: [removed: 12] [added: 14] net new in the U.S., [removed: 4] [added: 2] net new in our Canadian segment, and [removed: 4] [added: 7] new in our Other International segment, compared to [removed: 16] [added: 22] new warehouses, including [removed: 3] [added: 2] relocations in [removed: 2020;][added: 2021;]

- Net sales increased [removed: 18%] [added: 16%] to [removed: $192,052] [added: $222,730] driven by a [removed: 16%] [added: 14%] increase in comparable sales and sales at new warehouses opened in [removed: 2020] [added: 2021] and [removed: 2021;][added: 2022;]

[removed: -] Membership fee revenue increased 9% [removed: to $3,877,] [added: in 2022,] driven by [added: new member] sign-ups and upgrades to Executive [removed: membership;][added: membership.]

- Gross margin percentage decreased [removed: seven] [added: 65] basis points, driven primarily by [removed: a shift in sales penetration from] our core merchandise categories [removed: to our warehouse ancillary] and [removed: other businesses;][added: a LIFO charge for higher merchandise costs;]

- SG&A expenses as a percentage of net sales decreased [removed: 40] [added: 77] basis points, primarily due to leveraging increased sales and [removed: decreased] [added: ceasing of] incremental wages related to [removed: COVID-19;][added: COVID-19, despite additional wage and benefits increases;]

- The effective tax rate in [removed: 2021] [added: 2022] was [removed: 24.0%] [added: 24.6%] compared to [removed: 24.4%] [added: 24.0%] in [removed: 2020;][added: 2021;]

- Net income increased [removed: 25%] [added: 17%] to [removed: $5,007,] [added: $5,844,] or [removed: $11.27] [added: $13.14] per diluted share compared to [removed: $4,002,] [added: $5,007,] or [removed: $9.02] [added: $11.27] per diluted share in [removed: 2020;][added: 2021;]

COVID-related [added: and other] supply and logistics constraints have [added: continued to] adversely [removed: affected] [added: affect] some merchandise categories and are expected to do so for the foreseeable future.

[removed: We] [added: During 2021, we] paid $515 in incremental wages [removed: during 2021] related to [removed: COVID-19.][added: COVID-19, which ceased in February 2021.]

| | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | |

| Net Sales | | | $ | [removed: 192,052] [added: 222,730] | | | | | $ | [removed: 163,220] [added: 192,052] | | | | | $ | [removed: 149,351] [added: 163,220] | |

| U.S. | | | [removed: 16] [added: 17] | | % | | | | [removed: 9] [added: 16] | | % | | | | 9 | | % |

| Canada | | | [removed: 22] [added: 16] | | % | | | | [removed: 5] [added: 22] | | % | | | | [removed: 3] [added: 5] | | % |

| Other International | | | [removed: 23] [added: 10] | | % | | | | [removed: 13] [added: 23] | | % | | | | [removed: 5] [added: 13] | | % |

| Total Company | | | [removed: 18] [added: 16] | | % | | | | [removed: 9] [added: 18] | | % | | | | [removed: 8] [added: 9] | | % |

| U.S. | | | [removed: 15] [added: 16] | | % | | | | [removed: 8] [added: 15] | | % | | | | 8 | | % |

| Canada | | | [removed: 20] [added: 15] | | % | | | | [removed: 5] [added: 20] | | % | | | | [removed: 2] [added: 5] | | % |

| Other International | | | [removed: 19] [added: 7] | | % | | | | [removed: 9] [added: 19] | | % | | | | [removed: 2] [added: 9] | | % |

| Total Company | | | [removed: 16] [added: 14] | | % | | | | [removed: 8] [added: 16] | | % | | | | [removed: 6] [added: 8] | | % |

Those strategies can include, but are not limited to, working with our suppliers to share in absorbing cost increases, earlier-than-usual purchasing and in greater volumes, offering seasonal merchandise outside its season, as well as passing cost increases on to our members.

term net sales growth.

Higher tariffs could adversely impact our results.

E-commerce sales growth slowed in 2022 compared to 2021 and 2020.

- We incurred a one-time $77 pretax charge, primarily related to granting our employees one additional day of paid time off in March 2022;

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

- In April 2022, the Board of Directors approved an increase in the quarterly cash dividend from $0.79 to $0.90 per share.

The COVID-19 pandemic continued to impact our business during 2022, albeit to a lesser extent.

Net sales increased $30,678 or 16% during 2022.

Sales increased $15,830 in core merchandise categories and $14,848 in warehouse ancillary and other businesses.

The rate of increase was strongest in our gasoline, business centers, and travel businesses.

Sales continued to be impacted by inflation, higher than what we experienced in previous fiscal years.

E-commerce comparable sales increased 10% during 2022, including inflation.

| | | | 2022 | | | | | | 2021 | | | | | | 2020 | | |

Renewal rates continue to benefit from more members auto renewing and increased penetration of Executive members, who on average renew at a higher rate.

| | | | 2022 | | | | | | 2021 | | | | | | 2020 | | |

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

This was primarily due to a 33 basis-point decrease in core merchandise categories, predominantly driven by decreases in fresh foods and foods and sundries, and 19 basis points due to a LIFO charge for higher merchandise costs.

Gross margin was also negatively impacted by one basis point due to increased 2% rewards.

Warehouse ancillary and other businesses positively impacted gross margin by 29 basis points, predominantly gasoline, partially offset by e-commerce.

Gross margin was positively impacted by five basis points due to the net impact of ceasing incremental wages related to COVID-19 and the negative impact of a one-time charge related to granting our employees one additional day of paid time off.

All segments were negatively impacted due to decreases in core merchandise categories, partially offset by increases in warehouse ancillary and other businesses.

Gross margin in our U.S. segment was also negatively impacted by the LIFO charge.

Our Other International segment was negatively impacted by increased 2% rewards.

All segments benefited from the ceasing of incremental wages related to COVID-19.

| | | | 2022 | | | | | | 2021 | | | | | | 2020 | | |

| SG&A expenses | | | $ | 19,779 | | | | | $ | 18,537 | | | | | $ | 16,387 | |

This includes the impact of the starting wage increase we instituted in October 2021, as well the increased wages and benefits that were effective on March 14, 2022, and July 4, 2022.

SG&A expenses was benefited by a net of 16 basis points due to the positive impact of ceasing incremental wages related to COVID-19, partially offset by higher write-offs of certain information technology assets, and expenses related to granting our employees one additional day of paid time off.

| | | | 2022 | | | | | | 2021 | | | | | | 2020 | | |

Interest expense decreased in 2022 due to repayment of the 2.300% Senior Notes on December 1, 2021.

| | | | 2022 | | | | | | 2021 | | | | | | 2020 | | |

The increase in interest income in 2022 was primarily due to higher global interest rates.

| | | | 2022 | | | | | | 2021 | | | | | | 2020 | | |

The effective tax rate for 2022 was impacted by net discrete tax benefits of $130.

This included $94 of excess tax benefits related to stock compensation.

Excluding discrete net tax benefits, the tax rate was 26.2% for 2022.

The effective tax rate for 2021 was impacted by net discrete tax benefits of $163.

| | | | 2022 | | | | | | 2021 | | | | | | 2020 | | |

Changes in our net investment in merchandise inventories (the difference between merchandise inventories and accounts payable) is impacted by

In 2021, we combined the hardlines and softlines merchandise categories into non-foods.

This change did not have a material impact on the discussion of our results of operations.

uncertainty with respect to how tariffs will affect the costs of some of our merchandise.

While these potential impacts are uncertain, they could have an adverse impact on our results.

- We paid a special cash dividend of $10.00 per share in December 2020 and in April 2021, increased the quarterly cash dividend from $0.70 to $0.79 per share totaling $5,748.

During 2021, our sales mix began returning to pre-pandemic levels.

This included sales increases in non-foods and in many of our warehouse ancillary and other businesses, certain of which experienced closures or restrictions in 2020.

The incremental wage and benefit costs associated with COVID-19, which began on March 1, 2020 and ended on February 28, 2021, totaled approximately $825.

Effective March 1, 2021, we permanently increased wages for hourly and most salaried warehouse employees.

The estimated annualized pre-tax cost is approximately $400.

Additionally, in certain areas in the United States governments have mandated or are considering mandating extra pay for classes of employees that include our employees, which has and will result in higher costs.

| | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

_______________

(1)Excluding the impact of the revenue recognition standard for the year ended September 1, 2019.

Net sales increased $28,832 or 18% during 2021.

While sales in all core merchandise categories increased, sales were particularly strong in non-foods.

Sales increases were also strong in our warehouse ancillary and other businesses, predominantly e-commerce and gasoline.

There was an increase of 44% in e-commerce comparable sales in 2021, driven by an increase of 80% in the first half of the year.

This increase was due to a two basis point improvement in our core merchandise categories, predominantly non-foods, and in our warehouse ancillary and other businesses, largely e-commerce.

The comparison was also positively impacted by a three basis point reserve on inventory recorded in 2020 with no such reserve this year.

Gross margin percentage was negatively impacted three basis points due to increased 2% rewards and two basis points due to a LIFO charge for higher merchandise costs.

Our Canadian and Other International segments increased, primarily due to our warehouse ancillary and other businesses and certain of our core merchandise categories.

These increases were partially offset by increased 2% rewards.

| SG&A expenses | | | $ | 18,461 | | | | | $ | 16,332 | | | | | $ | 14,994 | |

Incremental wages as a result of COVID-19, which ended on February 28, 2021, were lower by eight basis points.

Stock compensation expense was lower by three basis points, and costs associated with the acquisition of Innovel were lower by one basis point.

These decreases were offset by an increase of five basis points related to a partial reversal of a product tax assessment in 2020, as well as an increase of four basis points related to a write-off of certain information technology assets in the fourth quarter of 2021 that are no longer expected to be utilized as part of the modernization of our information systems.

Preopening

| Preopening expenses | | | $ | 76 | | | | | $ | 55 | | | | | $ | 86 | |

| Warehouse openings, including relocations | | | | | | | | | | | | | | | | | |

| United States | | | 13 | | | | | | 9 | | | | | | 18 | | |

| Canada | | | 5 | | | | | | 4 | | | | | | 3 | | |

| Other International | | | 4 | | | | | | 3 | | | | | | 4 | | |

| Total warehouse openings, including relocations | | | 22 | | | | | | 16 | | | | | | 25 | | |

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.

Preopening expenses vary due to the number of warehouse and facility openings, the timing of the opening relative to our year-end, whether the warehouse is owned or leased, and whether the opening is in an existing, new or international market.

The decrease in interest income in 2021 was primarily due to lower interest rates in the U.S. and Canada, partially offset by higher average cash and investment balances.

During 2020, other, net was impacted by a $36 charge related to the repayment of certain Senior Notes.

In 2020, we acquired Innovel (Costco Wholesale Logistics) and a minority interest in Navitus.

We have audited the accompanying consolidated balance sheets of Costco Wholesale Corporation and subsidiaries (the Company) as of August [removed: 29, 2021] [added: 28, 2022,] and August [removed: 30, 2020,] [added: 29, 2021,] the related consolidated statements of income, comprehensive income, equity, and cash flows for [added: each of] the 52-week periods ended August [added: 28, 2022, August] 29, 2021, [added: and] August 30, [removed: 2020 and September 1, 2019,] [added: 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 [removed: 29, 2021] [added: 28, 2022,] and August [removed: 30, 2020,] [added: 29, 2021,] and the results of its operations and its cash flows for [added: each of] the 52-week periods ended August [added: 28, 2022, August] 29, 2021, [added: and] August 30, [removed: 2020 and September 1, 2019,] [added: 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 [removed: 29, 2021,] [added: 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 [removed: 5, 2021] [added: 4, 2022,] expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

As discussed in [Note [removed: 1](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_106)] [added: 1](#i7f92822ddf844c24912627bf68509b56_103)] to the consolidated financial statements, the Company estimates its self-insurance liabilities by considering historical claims experience, demographic factors, severity factors, and other actuarial assumptions.

The estimated self-insurance liabilities as of August [removed: 29, 2021] [added: 28, 2022,] were [removed: $1,257] [added: $1,364] million, a portion of which related to workers’ compensation self-insurance liabilities for the United States operations.

We have audited Costco Wholesale Corporation and subsidiaries*’* (the Company) internal control over financial reporting as of August [removed: 29, 2021,] [added: 28, 2022,] based on criteria established in *Internal Control – Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of August [removed: 29, 2021,] [added: 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 [removed: 29, 2021] [added: 28, 2022,] and August [removed: 30, 2020,] [added: 29, 2021,] the related consolidated statements of income, comprehensive income, equity, and cash flows for [added: each of] the 52-week periods ended August [added: 28, 2022, August] 29, 2021, [added: and] August 30, [removed: 2020 and September 1, 2019,] [added: 2020,] and the related notes (collectively, the consolidated financial statements), and our report dated October [removed: 5, 2021] [added: 4, 2022,] expressed an unqualified opinion on those consolidated financial statements.

| | | | 52 Weeks Ended | | | | | | [removed: 52 Weeks Ended] | | | | | | [removed: 52 Weeks Ended] | | |

| | | | August [removed: 29, 2021] [added: 28, 2022] | | | | | | August [removed: 30, 2020] [added: 29, 2021] | | | | | | [removed: September 1, 2019] [added: August 30, 2020] | | |

| Net sales | | | $ | [removed: 192,052] [added: 222,730] | | | | | $ | [removed: 163,220] [added: 192,052] | | | | | $ | [removed: 149,351] [added: 163,220] | |

| Membership fees | | | [removed: 3,877] [added: 4,224] | | | | | | [removed: 3,541] [added: 3,877] | | | | | | [removed: 3,352] [added: 3,541] | | |

| Total revenue | | | [removed: 195,929] [added: 226,954] | | | | | | [removed: 166,761] [added: 195,929] | | | | | | [removed: 152,703] [added: 166,761] | | |

| Merchandise costs | | | [removed: 170,684] [added: 199,382] | | | | | | [removed: 144,939] [added: 170,684] | | | | | | [removed: 132,886] [added: 144,939] | | |

| Selling, general and administrative | | | [removed: 18,461] [added: 19,779] | | | | | | [removed: 16,332] [added: 18,537] | | | | | | [removed: 14,994] [added: 16,387] | | |

| Operating income | | | [removed: 6,708] [added: 7,793] | | | | | | [removed: 5,435] [added: 6,708] | | | | | | [removed: 4,737] [added: 5,435] | | |

| Interest expense | | | [removed: (171)] [added: (158)] | | | | | | [removed: (160)] [added: (171)] | | | | | | [removed: (150)] [added: (160)] | | |

| Interest income and other, net | | | [removed: 143] [added: 205] | | | | | | [removed: 92] [added: 143] | | | | | | [removed: 178] [added: 92] | | |

| INCOME BEFORE INCOME TAXES | | | [removed: 6,680] [added: 7,840] | | | | | | [removed: 5,367] [added: 6,680] | | | | | | [removed: 4,765] [added: 5,367] | | |

| Provision for income taxes | | | [removed: 1,601] [added: 1,925] | | | | | | [removed: 1,308] [added: 1,601] | | | | | | [removed: 1,061] [added: 1,308] | | |

| Net income including noncontrolling interests | | | [removed: 5,079] [added: 5,915] | | | | | | [removed: 4,059] [added: 5,079] | | | | | | [removed: 3,704] [added: 4,059] | | |

| Net income attributable to noncontrolling interests | | | [removed: (72)] [added: (71)] | | | | | | [removed: (57)] [added: (72)] | | | | | | [removed: (45)] [added: (57)] | | |

| NET INCOME ATTRIBUTABLE TO COSTCO | | | $ | [removed: 5,007] [added: 5,844] | | | | | $ | [removed: 4,002] [added: 5,007] | | | | | $ | [removed: 3,659] [added: 4,002] | |

| Basic | | | $ | [removed: 11.30] [added: 13.17] | | | | | $ | [removed: 9.05] [added: 11.30] | | | | | $ | [removed: 8.32] [added: 9.05] | |

| Diluted | | | $ | [removed: 11.27] [added: 13.14] | | | | | $ | [removed: 9.02] [added: 11.27] | | | | | $ | [removed: 8.26] [added: 9.02] | |

| Basic | | | [removed: 443,089] [added: 443,651] | | | | | | [removed: 442,297] [added: 443,089] | | | | | | [removed: 439,755] [added: 442,297] | | |

| Diluted | | | [removed: 444,346] [added: 444,757] | | | | | | [removed: 443,901] [added: 444,346] | | | | | | [removed: 442,923] [added: 443,901] | | |

| NET INCOME INCLUDING NONCONTROLLING INTERESTS | | | $ | [removed: 5,079] [added: 5,915] | | | | | $ | [removed: 4,059] [added: 5,079] | | | | | $ | [removed: 3,704] [added: 4,059] | |

| Foreign-currency translation adjustment and other, net | | | [removed: 181] [added: (721)] | | | | | | [removed: 162] [added: 181] | | | | | | [removed: (245)] [added: 162] | | |

| Comprehensive income | | | [removed: 5,260] [added: 5,194] | | | | | | [removed: 4,221] [added: 5,260] | | | | | | [removed: 3,459] [added: 4,221] | | |

| Less: Comprehensive income attributable to noncontrolling interests | | | [removed: 93] [added: 36] | | | | | | [removed: 80] [added: 93] | | | | | | [removed: 37] [added: 80] | | |

| COMPREHENSIVE INCOME ATTRIBUTABLE TO COSTCO | | | $ | [removed: 5,167] [added: 5,158] | | | | | $ | [removed: 4,141] [added: 5,167] | | | | | $ | [removed: 3,422] [added: 4,141] | |

| | | | August [added: 28, 2022 | | | | | | August] 29, 2021 | | | | | | August 30, 2020 | | |

| Cash and cash equivalents | | | $ | [removed: 11,258] [added: 10,203] | | | | | $ | [removed: 12,277] [added: 11,258] | |

| Short-term investments | | | [removed: 917] [added: 846] | | | | | | [removed: 1,028] [added: 917] | | |

| Receivables, net | | | [removed: 1,803] [added: 2,241] | | | | | | [removed: 1,550] [added: 1,803] | | |

| Merchandise inventories | | | [removed: 14,215] [added: 17,907] | | | | | | [removed: 12,242] [added: 14,215] | | |

| Other current assets | | | [removed: 1,312] [added: 1,499] | | | | | | [removed: 1,023] [added: 1,312] | | |

| Total current assets | | | [removed: 29,505] [added: 32,696] | | | | | | [removed: 28,120] [added: 29,505] | | |

| Property and equipment, net | | | [removed: 23,492] [added: 24,646] | | | | | | [removed: 21,807] [added: 23,492] | | |

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

| | | | Page | | |

| | | | | | |

| [Reports of Independent Registered Public Accounting Firm](#i7f92822ddf844c24912627bf68509b56_79) | | | [33](#i7f92822ddf844c24912627bf68509b56_79) | | |

| [Consolidated Statements of Income](#i7f92822ddf844c24912627bf68509b56_82) | | | [36](#i7f92822ddf844c24912627bf68509b56_82) | | |

| [Consolidated Statements of Comprehensive Income](#i7f92822ddf844c24912627bf68509b56_85) | | | [37](#i7f92822ddf844c24912627bf68509b56_85) | | |

| [Consolidated Balance Sheets](#i7f92822ddf844c24912627bf68509b56_88) | | | [38](#i7f92822ddf844c24912627bf68509b56_88) | | |

| [Consolidated Statements of Equity](#i7f92822ddf844c24912627bf68509b56_94) | | | [39](#i7f92822ddf844c24912627bf68509b56_94) | | |

| [Consolidated Statements of Cash Flows](#i7f92822ddf844c24912627bf68509b56_97) | | | [40](#i7f92822ddf844c24912627bf68509b56_97) | | |

| [Notes to Consolidated Financial Statements](#i7f92822ddf844c24912627bf68509b56_100) | | | [41](#i7f92822ddf844c24912627bf68509b56_100) | | |

October 4, 2022

October 4, 2022

| | | | 52 Weeks Ended | | | | | | | | | | | | | | |

| | | | August 28, 2022 | | | | | | August 29, 2021 | | |

| Net income | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 5,844 | | | | | | 5,844 | | | | | | 71 | | | | | | 5,915 | | |

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

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

| Repurchases of common stock | | | (863) | | | | | | — | | | | | | (15) | | | | | | — | | | | | | (427) | | | | | | (442) | | | | | | — | | | | | | (442) | | |

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

| | | | 52 Weeks Ended | | | | | | | | | | | | | | |

| | | | August 28, 2022 | | | | | | August 29, 2021 | | | | | | August 30, 2020 | | |

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

| Acquisition of noncontrolling interest | | | (842) | | | | | | — | | | | | | — | | |

| Capital expenditures included in liabilities | | | $ | 156 | | | | | $ | 184 | | | | | $ | 204 | |

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.

*Reclassification*

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

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

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

| | | | 2022 | | | | | | 2021 | | |

An immaterial LIFO charge was recorded in 2021.

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

| | | | | | | | | | 39,932 | | | | | | 37,658 | | |

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

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

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

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

| Due after five years | | | 61 | | | | | | 60 | | | | | | — | | |

*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).

October 5, 2021

| Preopening expenses | | | 76 | | | | | | 55 | | | | | | 86 | | |

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| BALANCE AT SEPTEMBER 2, 2018 | | | 438,189 | | | | | | $ | 4 | | | | | $ | 6,107 | | | | | $ | (1,199) | | | | | $ | 7,887 | | | | | $ | 12,799 | | | | | $ | 304 | | | | | $ | 13,103 | |

| Net income | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 3,659 | | | | | | 3,659 | | | | | | 45 | | | | | | 3,704 | | |

| Repurchases of common stock | | | (1,097) | | | | | | — | | | | | | (16) | | | | | | — | | | | | | (231) | | | | | | (247) | | | | | | — | | | | | | (247) | | |

| Change in bank payments outstanding | | | 188 | | | | | | 137 | | | | | | 210 | | |

| Proceeds from short-term borrowings | | | 41 | | | | | | — | | | | | | — | | |

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

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

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.

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.

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.

| | | | | | | | | | 37,658 | | | | | | 34,703 | | |

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

| Acquisition | | | 934 | | | | | | — | | | | | | — | | | | | | 934 | | |

See [Note](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_112) [2](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_112).

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

Breakage is estimated based on redemption data.

*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.

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. segment.

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

| Total | | | $ | 375 | | | | | $ | 381 | | | | | $ | 536 | |

At August 30, 2020, $60 cash and cash equivalents and $448 short-term investments are included in the consolidated balance sheets.

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.

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 August [removed: 29, 2021] [added: 28, 2022,] and, based on their evaluation, have concluded that the disclosure controls and procedures were effective as of such date.

Under the supervision of and with the participation of our management, we assessed the effectiveness of our internal control over financial reporting as of August [removed: 29, 2021,] [added: 28, 2022,] 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 August [removed: 29, 2021.][added: 28, 2022.]

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 [removed: 2021] [added: 2022] that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART III

Not Applicable.

PART III

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 [removed: 1](#ie58daa2d8b3247c6bfd8c5ea0ae4a34e_16)] [added: 1](#i7f92822ddf844c24912627bf68509b56_16)] 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 [removed: 2022] [added: 2023] annual meeting of shareholders, which will be filed with the SEC within 120 days of the end of our fiscal year (“Proxy Statement”).

Our independent registered public accounting firm is KPMG LLP, Seattle, WA, Auditor Firm ID: 185.

| 3.1 | | | | | | [Articles of Incorporation as amended of Costco Wholesale [removed: Corporation](https://www.sec.gov/Archives/edgar/data/909832/000090983220000004/costex3110q21620.htm)] [added: Corporation](https://www.sec.gov/Archives/edgar/data/909832/000090983222000021/costex3110k082822.htm)] | | | | | | [added: x] | | | | | | [removed: 10-Q] | | | | | | [removed: 2/16/2020] | | | | | | [removed: 3/12/2020] | | |

| 3.2 | | | | | | [Bylaws as amended of Costco Wholesale Corporation](https://www.sec.gov/Archives/edgar/data/909832/000119312520018115/d880773dex32.htm) | | | | | | | | | | | | [removed: 8-K] [added: 10-Q] | | | | | | [added: 5/8/2022] | | | | | | [removed: 1/29/2020] [added: 6/2/2022] | | |

| 4.8 | | | | | | [Description of Common [removed: Stock](http://www.sec.gov/Archives/edgar/data/909832/000090983220000017/costex4810k083020.htm)] [added: Stock](https://www.sec.gov/Archives/edgar/data/909832/000090983222000021/costex4810k082822.htm)] | | | | | | [added: x] | | | | | | [removed: 10-K] | | | | | | [removed: 8/30/2020] | | | | | | [removed: 10/7/2020] | | |

| 10.4* | | | | | | [Fiscal [removed: 202](https://www.sec.gov/Archives/edgar/data/909832/000119312520270247/d41700dex101.htm)[1](https://www.sec.gov/Archives/edgar/data/909832/000119312520270247/d41700dex101.htm) [Executive] [added: 2022 Executive] Bonus [removed: Plan](https://www.sec.gov/Archives/edgar/data/909832/000119312520270247/d41700dex101.htm)] [added: Plan](https://www.sec.gov/Archives/edgar/data/0000909832/000119312521325451/d167405dex101.htm)] | | | | | | | | | | | | 8-K | | | | | | | | | | | | [removed: 10/15/2020] [added: 11/10/2021] | | |

| 10.5.3* | | | | | | [Extension of the Term of the Executive Employment [removed: Agreement](https://www.sec.gov/Archives/edgar/data/0000909832/000090983220000026/costex10210q112220.htm)[,](https://www.sec.gov/Archives/edgar/data/0000909832/000090983220000026/costex10210q112220.htm) [effective] [added: Agreement, effective] January 1, 2021, between W. Craig Jelinek and Costco Wholesale Corporation](https://www.sec.gov/Archives/edgar/data/0000909832/000090983220000026/costex10210q112220.htm) | | | | | | | | | | | | 10-Q | | | | | | 11/22/2020 | | | | | | 12/16/2020 | | |

| 21.1 | | | | | | [Subsidiaries of the [removed: Company](https://www.sec.gov/Archives/edgar/data/909832/000090983221000014/costex21110k082921.htm)] [added: Company](https://www.sec.gov/Archives/edgar/data/909832/000090983222000021/costex21110k082822.htm)] | | | | | | x | | | | | | | | | | | | | | | | | | | | |

| 23.1 | | | | | | [Consent of Independent Registered Public Accounting [removed: Firm](https://www.sec.gov/Archives/edgar/data/909832/000090983221000014/costex23110k082921.htm)] [added: Firm](https://www.sec.gov/Archives/edgar/data/909832/000090983222000021/costex23110k082822.htm)] | | | | | | x | | | | | | | | | | | | | | | | | | | | |

| 31.1 | | | | | | [Rule 13a – 14(a) [removed: Certifications](https://www.sec.gov/Archives/edgar/data/909832/000090983221000014/costex31110k082921.htm)] [added: Certifications](https://www.sec.gov/Archives/edgar/data/909832/000090983222000021/costex31110k082822.htm)] | | | | | | x | | | | | | | | | | | | | | | | | | | | |

| 32.1 | | | | | | [Section 1350 [removed: Certifications](https://www.sec.gov/Archives/edgar/data/909832/000090983221000014/costex32110k082921.htm)] [added: Certifications](https://www.sec.gov/Archives/edgar/data/909832/000090983222000021/costex32110k082822.htm)] | | | | | | x | | | | | | | | | | | | | | | | | | | | |

| 10.5.4* | | | | | | [Extension of the Term of the Executive Employment Agreement, effective January 1, 2022, between W. Craig Jelinek and Costco Wholesale Corporation](https://www.sec.gov/Archives/edgar/data/0000909832/000090983221000021/costex10210q112121.htm) | | | | | | | | | | | | 10-Q | | | | | | 11/22/2021 | | | | | | 12/22/2021 | | |

| 10.8.8 | | | | | | [Eighth Amendment to Citi, N.A. Co-Branded Credit Card Agreement](https://www.sec.gov/Archives/edgar/data/0000909832/000090983222000005/costex10110q21322.htm) | | | | | | | | | | | | 10-Q | | | | | | 2/13/2022 | | | | | | 3/10/2022 | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| 3.2.1 | | | | | | [Amendments to Sections 3.3, 3.4, and 3.6 of the Bylaws of Costco Wholesale Corporation (to be effective and first apply with respect to the Company's 2022 Annual Meeting of Shareholders)](https://www.sec.gov/Archives/edgar/data/909832/000119312520247153/d87006dex32.htm) | | | | | | | | | | | | 8-K | | | | | | | | | | | | 9/16/2020 | | |

| | | | | | | W. Craig Jelinek [removed: *President, Chief] [added: *Chief] Executive Officer and Director* | | | | | | | | | | | | Hamilton E. James *Chairman of the Board* | | |

| | | | | | | [removed: Susan L. Decker] [added: Kenneth D. Denman] *Director* | | | | | | | | | | | | [removed: Kenneth D. Denman] [added: Sally Jewell] *Director* | | |

| | | | | | | [removed: Sally Jewell] [added: Charles T. Munger] *Director* | | | | | | | | | | | | [removed: Charles T. Munger] [added: Jeffrey S. Raikes] *Director* | | |

| By | | | | | | /s/ [removed: MARY (MAGGIE) A. WILDEROTTER] [added: JOHN W. STANTON] | | | | | | [added: By] | | | | | | [added: /s/ MARY (MAGGIE) A. WILDEROTTER] | | |

| | | | | | | [removed: Mary (Maggie) A. Wilderotter] [added: John W. Stanton] *Director* | | | | | | | | | | | | [added: Mary (Maggie) A. Wilderotter *Director*] | | |

October 4, 2022

October 4, 2022

| By | | | | | | /s/ RON M. VACHRIS | | | | | | By | | | | | | /s/ SUSAN L. DECKER | | |

| | | | | | | Ron M. Vachris *President, Chief Operating Officer and Director* | | | | | | | | | | | | Susan L. Decker *Director* | | |

| By | | | | | | /s/ KENNETH D. DENMAN | | | | | | By | | | | | | /s/ SALLY JEWELL | | |

| By | | | | | | /s/ CHARLES T. MUNGER | | | | | | By | | | | | | /s/ JEFFREY S. RAIKES | | |

October 5, 2021

| By | | | | | | /s/ SUSAN L. DECKER | | | | | | By | | | | | | /s/ KENNETH D. DENMAN | | |

| By | | | | | | /s/ SALLY JEWELL | | | | | | By | | | | | | /s/ CHARLES T. MUNGER | | |

| By | | | | | | /s/ JEFFREY S. RAIKES | | | | | | By | | | | | | /s/ JOHN W. STANTON | | |

| | | | | | | Jeffrey S. Raikes *Director* | | | | | | | | | | | | John W. Stanton *Director* | | |