-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, V/KqyDK74uQFgWCETiAb6i8EkpE02DvJJK/0V61hAi9vtIYuXGQ0ghzSwzan+n1/ 8nCaeDJ7f0fffaf9oyKM8Q== 0000912057-97-022253.txt : 19970630 0000912057-97-022253.hdr.sgml : 19970630 ACCESSION NUMBER: 0000912057-97-022253 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970627 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: COSTCO COMPANIES INC CENTRAL INDEX KEY: 0000909832 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-VARIETY STORES [5331] IRS NUMBER: 330572969 STATE OF INCORPORATION: CA FISCAL YEAR END: 0830 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 333-04355 FILM NUMBER: 97631833 BUSINESS ADDRESS: STREET 1: 999 LAKE DRIVE CITY: ISSAQUAH STATE: WA ZIP: 98027- BUSINESS PHONE: (206)-313-8100 MAIL ADDRESS: STREET 1: 999 LAKE DRIVE CITY: ISSAQUAD STATE: WA ZIP: 98027 FORMER COMPANY: FORMER CONFORMED NAME: PRICE/COSTCO INC DATE OF NAME CHANGE: 19930728 11-K 1 FORM 11K - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------------- FORM 11-K -------------------- [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1996 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______ Commission file number 333-21093 PRICECOSTCO 401(k) PLAN FOR CALIFORNIA UNION EMPLOYEES -------------- PRICE/COSTCO, INC. 999 LAKE DRIVE ISSAQUAH, WASHINGTON 98027 (425) 313-8100 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- PRICECOSTCO 401(k) PLAN FOR CALIFORNIA UNION EMPLOYEES EIN 33-0572969 PIN 004 FINANCIAL STATEMENTS AND SCHEDULES AS OF DECEMBER 31, 1996 AND 1995 TOGETHER WITH AUDITORS' REPORT PRICECOSTCO 401(k) PLAN FOR CALIFORNIA UNION EMPLOYEES FINANCIAL STATEMENTS AND SCHEDULES DECEMBER 31, 1996 AND 1995 INDEX REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS FINANCIAL STATEMENTS Statements of Net Assets Available for Plan Benefits as of December 31, 1996 and 1995 Statement of Changes in Net Assets Available for Plan Benefits for the Year Ended December 31, 1996 NOTES TO FINANCIAL STATEMENTS AND SCHEDULES SUPPLEMENTAL INFORMATION Schedule I, Item 27a - Schedule of Assets Held for Investment Purposes as of December 31, 1996 Schedule II, Item 27d - Schedule of Reportable Transactions for the Year Ended December 31, 1996 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Benefits Committee of the Costco 401(k) Plan for California Union Employees: We have audited the accompanying statements of net assets available for plan benefits of PriceCostco 401(k) Plan for California Union Employees as of December 31, 1996 and 1995, and the related statement of changes in net assets available for plan benefits for the year ended December 31, 1996. These financial statements and the schedules referred to below are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements and schedules based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 1996 and 1995, and the changes in its net assets available for benefits for the year ended December 31, 1996, in conformity with generally accepted accounting principles. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of assets held for investment purposes and reportable transactions are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The fund information in the statements of net assets available for plan benefits and the statement of changes in net assets available for plan benefits is presented for purposes of additional analysis rather than to present the net assets available for plan benefits and changes in net assets available for plan benefits of each fund. The supplemental schedules and fund information have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ Arthur Andersen, LLP Seattle, Washington, May 16, 1997 PRICECOSTCO 401(k) PLAN FOR CALIFORNIA UNION EMPLOYEES STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS AS OF DECEMBER 31, 1996
Participant Directed ----------------------------------------------------------------------- Stable Equity Spectrum Spectrum New Value Income Income Growth Horizons Fund Fund Fund Fund Fund ---------- ---------- ---------- ---------- ---------- ASSETS: Investments at fair value- Registered investment company funds $792,097 $1,200,730 $676,998 $1,812,599 $ - Price/Costco common stock - 18,510 shares held - - - - - -------- ---------- -------- ---------- ---- Total investments 792,097 1,200,730 676,998 1,812,599 - -------- ---------- -------- ---------- ---- Contributions receivable- Employee 21,367 30,204 17,208 44,122 430 Employer 98 194 118 205 44 -------- ---------- -------- ---------- ---- Total receivables 21,465 30,398 17,326 44,327 474 -------- ---------- -------- ---------- ---- NET ASSETS AVAILABLE FOR PLAN BENEFITS $813,562 $1,231,128 $694,324 $1,856,926 $474 -------- ---------- -------- ---------- ---- -------- ---------- -------- ---------- ---- Participant Directed -------------------------- Mid Cap Price/Costco Growth Common Stock Stock Total ---------- ----------- ---------- ASSETS: Investments at fair value- Registered investment company funds $ - $ - $4,482,424 Price/Costco common stock - 18,510 shares held - 465,074 465,074 ---- -------- ---------- Total investments - 465,074 4,947,498 ---- -------- ---------- Contributions receivable- Employee 433 10,866 124,630 Employer 27 153 839 ---- -------- ---------- Total receivables 460 11,019 125,469 ---- -------- ---------- NET ASSETS AVAILABLE FOR PLAN BENEFITS $460 $476,093 $5,072,967 ---- -------- ---------- ---- -------- ----------
The accompanying notes and schedules are an integral part of this statement. PRICECOSTCO 401(k) PLAN FOR CALIFORNIA UNION EMPLOYEES STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS AS OF DECEMBER 31, 1995
Participant Directed ------------------------------------------------------------------------ Stable Equity Spectrum Spectrum Price/Costco Value Income Income Growth Common Fund Fund Fund Fund Stock Total ---------- ---------- ---------- --------- ---------- ---------- ASSETS: Investments at fair value- Registered investment company funds $219,879 $328,293 $215,608 $495,216 $ - $1,258,996 Price/Costco common stock - 5,864 shares held - - - - 89,424 89,424 -------- -------- -------- -------- ------- ---------- Total investments 219,879 328,293 215,608 495,216 89,424 1,348,420 -------- -------- -------- -------- ------- ---------- Contributions receivable- Employee 15,854 22,236 15,209 33,893 6,753 93,945 Employer 584 647 326 840 126 2,523 -------- -------- -------- -------- ------- ---------- Total receivables 16,438 22,883 15,535 34,733 6,879 96,468 -------- -------- -------- -------- ------- ---------- NET ASSETS AVAILABLE FOR PLAN BENEFITS $236,317 $351,176 $231,143 $529,949 $96,303 $1,444,888 -------- -------- -------- -------- ------- ---------- -------- -------- -------- -------- ------- ----------
The accompanying notes and schedules are an integral part of this statement. PRICECOSTCO 401(k) PLAN FOR CALIFORNIA UNION EMPLOYEES STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS FOR THE YEAR ENDED DECEMBER 31, 1996
Participant Directed ---------------------------------------------------------------------- Stable Equity Spectrum Spectrum New Value Income Income Growth Horizons Fund Fund Fund Fund Fund ---------- ---------- ---------- --------- ---------- NET INVESTMENT RESULTS: Net appreciation (depreciation) in fair value of assets $ - $ 81,835 $ 512 $ 88,791 $ - Interest 28,463 - 37,980 - - Dividends - 65,076 - 125,973 - -------- ---------- -------- ---------- ---- Total net investment results 28,463 146,911 38,492 214,764 - -------- ---------- -------- ---------- ---- CONTRIBUTIONS TO THE PLAN: Employer 54,373 58,344 37,888 91,452 44 Employee 502,964 698,058 426,179 1,044,015 430 -------- ---------- -------- ---------- ---- Total contributions 557,337 756,402 464,067 1,135,467 474 -------- ---------- -------- ---------- ---- DISTRIBUTIONS TO PARTICIPANTS: Hardship withdrawals (6,522) (5,852) (4,996) (12,202) - Terminations (8,510) (23,656) (11,373) (23,169) - -------- ---------- -------- ---------- ---- Total distributions (15,032) (29,508) (16,369) (35,371) - -------- ---------- -------- ---------- ---- INTERFUND TRANSFERS 6,477 6,147 (23,009) 12,117 - -------- ---------- -------- ---------- ---- NET INCREASE IN NET ASSETS AVAILABLE FOR PLAN BENEFITS 577,245 879,952 463,181 1,326,977 474 NET ASSETS AVAILABLE FOR PLAN BENEFITS, beginning of year 236,317 351,176 231,143 529,949 - -------- ---------- -------- ---------- ---- NET ASSETS AVAILABLE FOR PLAN BENEFITS, end of year $813,562 $1,231,128 $694,324 $1,856,926 $474 -------- ---------- -------- ---------- ---- -------- ---------- -------- ---------- ---- Participant Directed -------------------------- Mid Cap Price/Costco Growth Common Stock Stock Total ---------- ----------- ---------- NET INVESTMENT RESULTS: Net appreciation (depreciation) in fair value of assets $ - $126,744 $ 297,882 Interest - - 66,443 Dividends - - 191,049 ---- -------- ---------- Total net investment results - 126,744 555,374 ---- -------- ---------- CONTRIBUTIONS TO THE PLAN: Employer 27 22,825 264,953 Employee 433 240,046 2,912,125 ---- -------- ---------- Total contributions 460 262,871 3,177,078 ---- -------- ---------- DISTRIBUTIONS TO PARTICIPANTS: Hardship withdrawals - (3,409) (32,981) Terminations - (4,684) (71,392) ---- -------- ---------- Total distributions - (8,093) (104,373) ---- -------- ---------- INTERFUND TRANSFERS - (1,732) - ---- -------- ---------- NET INCREASE IN NET ASSETS AVAILABLE FOR PLAN BENEFITS 460 379,790 3,628,079 NET ASSETS AVAILABLE FOR PLAN BENEFITS, beginning of year - 96,303 1,444,888 ---- -------- ---------- NET ASSETS AVAILABLE FOR PLAN BENEFITS, end of year $460 $476,093 $5,072,967 ---- -------- ---------- ---- -------- ----------
The accompanying notes and schedules are an integral part of this statement. PRICECOSTCO 401(k) PLAN FOR CALIFORNIA UNION EMPLOYEES NOTES TO FINANCIAL STATEMENTS AND SCHEDULES DECEMBER 31, 1996 AND 1995 1. PLAN DESCRIPTION: The following description of the PriceCostco 401(k) Plan for California Union Employees (the Plan) provides only general information. Participants should refer to the plan agreement for a more complete description of the Plan's provisions. The Price Company and Costco Wholesale Corporation are wholly-owned subsidiaries of Price/Costco, Inc. (collectively, the Company). Effective January 29, 1997, Price/Costco, Inc. was renamed Costco Companies, Inc. Effective January 1, 1997, the Plan was renamed Costco 401(k) Plan for California Union Employees. The Plan is a defined contribution plan subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). ELIGIBILITY The Plan covers all employees covered by the collective bargaining agreement, between The Price Company and The International Brotherhood of Teamsters in the State of California, who have completed at least 1,000 hours of service within one year, based on their date of hire, and who are age 18 or older. CONTRIBUTIONS Each year, participants may contribute from 1% to 15% of their compensation before income taxes, subject to certain limitations set by the Internal Revenue Service (IRS). Participants may also contribute amounts representing distributions from other qualified benefit or contribution plans (known as "rollover" contributions). The Company matches 50% of the employee's contributions, up to the first $250 of participant contributions to the Plan. PARTICIPANT ACCOUNTS Each participant's account is credited with his or her contribution, employer matching contributions and an allocation of plan earnings. Allocations are based on participant account balances as defined. The benefit to which a participant is entitled is the benefit that can be provided from his or her vested account. - 2 - VESTING Participants are immediately vested in their contributions, plus actual earnings thereon. Vesting in the employer matching contributions is based on years of continuous service, according to the following schedule: Years of Service Percentage Vested ---------------- ----------------- Less than 2 0% 2-3 10 3-4 25 4-5 50 5 or more 100 FORFEITURES During 1996, forfeitures of approximately $3,300 were used to reduce the employer contributions to the Plan. Forfeitures can be restored to a participant's account if the participant is reemployed by the Company prior to the expiration of five consecutive years of break in service and repays the full dollar amount distributed due to the termination within five years of the reemployment date. As of December 31, 1996, forfeitures of approximately $6,700 had not been used to reduce employer contributions. These forfeitures will be used to offset future employer contributions. INVESTMENT OPTIONS Upon enrollment in the Plan, a participant may direct contributions into any of the five investment options listed below. T. Rowe Price is the trustee of all investments, serves as investment manager for all funds and provides record keeping of all participant accounts. Stable Value Fund - Funds are invested primarily in high-quality insurance company and bank-issued investment contracts. Equity Income Fund - Funds are invested in common stocks of established companies that pay above-average dividends and have prospects of future dividend increases. Spectrum Income Fund - Funds are invested in a managed mix of funds including four domestic bond funds, an international bond fund, a money market fund and an income-oriented stock fund. Spectrum Growth Fund - Funds are invested in a managed mix of funds, including five U.S. stock funds, an international stock fund and a money market fund. Price/Costco Common Stock - Funds are invested in common stock of Price/Costco. Effective January 1, 1997, two new funds were added to the investment options listed above. These new funds are the New Horizons Fund and the Mid-Cap Growth Fund. Participants may change their investment options daily. - 3 - UNIT ACCOUNTING All contributions to a participant's account and the participant's account balance are reflected in units of each fund selected or shares of Company stock. As of December 31, 1996 and 1995, units held by the Plan were as follows: Units/shares Units/shares held at held at Description of Asset December 31, 1996 December 31, 1995 -------------------- ----------------- ----------------- Price/Costco Common Stock 18,510 5,864 Stable Value Fund 792,097 219,879 Equity Income Fund 53,273 16,406 Spectrum Income Fund 60,446 19,182 Spectrum Growth Fund 119,802 36,707 DISTRIBUTIONS Upon termination of employment, death or total disability, the vested interest in a participant's account is distributed in a lump sum. Participants may apply for a distribution of all or a portion of the vested interest at any time after attainment of age 59-1/2. Participants are also eligible to make hardship withdrawals from their salary deferral contributions in the event of certain financial hardships. Following a hardship withdrawal, participants are not allowed to contribute to the Plan for a one-year period. PLAN ADMINISTRATOR The Plan is administered by the Benefits Committee (the Committee), which is appointed by the Board of Directors of the Company. ADMINISTRATIVE EXPENSES All administrative and custodial fees of the Plan are paid by the Company. All investment management and transaction fees directly related to the plan investments are shown as a reduction of net investment results. 2. SIGNIFICANT ACCOUNTING POLICIES: BASIS OF ACCOUNTING The financial statements of the Plan are prepared under the accrual method of accounting. USE OF ESTIMATES The preparation of financial statements requires the use of estimates. Actual results could differ from those estimates. INVESTMENT VALUATION AND INCOME RECOGNITION Investments are stated at fair value. Registered investment company funds and Price/Costco common stock are valued using the closing price of the investments on the last day of business of the plan year. - 4 - Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. Net appreciation (depreciation) in fair value of assets includes the change in the fair value of assets from one period to the next, and realized gains and losses, and is computed using the moving average method. PAYMENT OF BENEFITS Benefits are recorded when paid. 3. PLAN TERMINATION: Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of plan termination, participants will become 100% vested in their accounts. 4. TAX STATUS: The IRS has informed the Company, in a letter dated November 29, 1996, that the Plan is designed in accordance with applicable sections of the Internal Revenue Code. The Plan Administrator and the Plan's counsel believe that the Plan is currently designed and is being operated in compliance with the applicable requirements of the IRS. SCHEDULE I PRICECOSTCO 401(k) PLAN FOR CALIFORNIA UNION EMPLOYEES EIN: 33-0572969 PIN: 004 ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AS OF DECEMBER 31, 1996 Identity of Party Involved/ Description of Investments Cost Current Value - --------------------------- ----------- ------------- *T. Rowe Price: Stable Value Fund $ 792,097 $ 792,097 Equity Income Fund 1,104,547 1,200,730 Spectrum Income Fund 670,268 676,998 Spectrum Growth Fund 1,725,826 1,812,599 *Price/Costco Common Stock 350,400 465,074 ---------- ---------- $4,643,138 $4,947,498 ---------- ---------- ---------- ---------- *Represents a party in interest. The accompanying notes are an integral part of this schedule. SCHEDULE II PRICECOSTCO 401(k) PLAN FOR CALIFORNIA UNION EMPLOYEES ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 1996
Purchases Sales --------------------------- ------------------------------------------------------ Number of Purchase Number of Sale Cost of Gain/ Descriptions of Assets Transactions Price Transactions Price Asset Loss - ---------------------- ------------ ---------- ------------- --------- --------- --------- Category (i) - Single transactions in excess of 5% of Plan assets at beginning of year. Spectrum Growth Fund 1 $ 125,973 - - - - Category (iii) - Series of transactions in excess of 5% of Plan assets at beginning of year. Price/Costco Company Stock 61 282,512 36 $36,233 $31,775 $4,458 Stable Value Fund 61 602,352 50 33,317 33,317 - Equity Income Fund 89 829,910 38 42,549 39,317 3,232 Spectrum Income Fund 61 496,117 46 36,962 36,750 212 Spectrum Growth Fund 84 1,270,159 42 45,166 42,485 2,681
There were no category (ii) or (iv) transactions. The accompanying notes are an integral part of this schedule. EX-99.1 2 EXHIBIT 99.1 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation of our reports included in this Form 11-K, into the Company's previously filed Registration Statement File No. 333-21093. /s/ Arthur Andersen, LLP Seattle, Washington, June 25, 1997 -----END PRIVACY-ENHANCED MESSAGE-----