Document and Entity Information
Document and Entity Information - shares | 8 Months Ended | |
May 13, 2018 | May 30, 2018 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | May 13, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | COST | |
Entity Registrant Name | COSTCO WHOLESALE CORP /NEW | |
Entity Central Index Key | 909,832 | |
Current Fiscal Year End Date | --09-02 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 438,541,544 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | May 13, 2018 | Sep. 03, 2017 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 5,877,000,000 | $ 4,546,000,000 |
Short-term investments | 1,167,000,000 | 1,233,000,000 |
Receivables, net | 1,593,000,000 | 1,432,000,000 |
Merchandise inventories | 10,626,000,000 | 9,834,000,000 |
Other current assets | 430,000,000 | 272,000,000 |
Total current assets | 19,693,000,000 | 17,317,000,000 |
PROPERTY AND EQUIPMENT | ||
Land | 6,093,000,000 | 5,690,000,000 |
Buildings and improvements | 15,786,000,000 | 15,127,000,000 |
Equipment and fixtures | 7,161,000,000 | 6,681,000,000 |
Construction in progress | 1,070,000,000 | 843,000,000 |
Gross property and equipment | 30,110,000,000 | 28,341,000,000 |
Less accumulated depreciation and amortization | (10,932,000,000) | (10,180,000,000) |
Net property and equipment | 19,178,000,000 | 18,161,000,000 |
OTHER ASSETS | 734,000,000 | 869,000,000 |
TOTAL ASSETS | 39,605,000,000 | 36,347,000,000 |
CURRENT LIABILITIES | ||
Accounts payable | 10,705,000,000 | 9,608,000,000 |
Accrued salaries and benefits | 2,697,000,000 | 2,703,000,000 |
Accrued member rewards | 1,041,000,000 | 961,000,000 |
Deferred membership fees | 1,679,000,000 | 1,498,000,000 |
Other current liabilities | 3,289,000,000 | 2,725,000,000 |
Total current liabilities | 19,411,000,000 | 17,495,000,000 |
LONG-TERM DEBT, excluding current portion | 6,492,000,000 | 6,573,000,000 |
OTHER LIABILITIES | 1,255,000,000 | 1,200,000,000 |
Total liabilities | 27,158,000,000 | 25,268,000,000 |
COMMITMENTS AND CONTINGENCIES | ||
EQUITY | ||
Preferred stock $.01 par value; 100,000,000 shares authorized; no shares issued and outstanding | 0 | 0 |
Common stock $.01 par value; 900,000,000 shares authorized; 438,602,000 and 437,204,000 shares issued and outstanding | 4,000,000 | 4,000,000 |
Additional paid-in capital | 6,001,000,000 | 5,800,000,000 |
Accumulated other comprehensive loss | (1,038,000,000) | (1,014,000,000) |
Retained earnings | 7,176,000,000 | 5,988,000,000 |
Total Costco stockholders' equity | 12,143,000,000 | 10,778,000,000 |
Noncontrolling interests | 304,000,000 | 301,000,000 |
Total equity | 12,447,000,000 | 11,079,000,000 |
TOTAL LIABILITIES AND EQUITY | $ 39,605,000,000 | $ 36,347,000,000 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | May 13, 2018 | Sep. 03, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 100,000,000 | 100,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 900,000,000 | 900,000,000 |
Common stock, shares issued | 438,602,000 | 437,204,000 |
Common stock, shares outstanding | 438,602,000 | 437,204,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements Of Income - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 8 Months Ended | ||
May 13, 2018 | May 07, 2017 | May 13, 2018 | May 07, 2017 | |
REVENUE | ||||
Net sales | $ 31,624 | $ 28,216 | $ 95,020 | $ 84,815 |
Membership fees | 737 | 644 | 2,145 | 1,910 |
Total revenue | 32,361 | 28,860 | 97,165 | 86,725 |
OPERATING EXPENSES | ||||
Merchandise costs | 28,131 | 24,970 | 84,481 | 75,185 |
Selling, general and administrative | 3,155 | 2,907 | 9,613 | 8,827 |
Preopening expenses | 8 | 15 | 37 | 52 |
Operating income | 1,067 | 968 | 3,034 | 2,661 |
OTHER INCOME (EXPENSE) | ||||
Interest expense | (37) | (21) | (111) | (81) |
Interest income and other, net | 41 | 18 | 70 | 40 |
INCOME BEFORE INCOME TAXES | 1,071 | 965 | 2,993 | 2,620 |
Provision for income taxes | 309 | 259 | 867 | 838 |
Net income including noncontrolling interests | 762 | 706 | 2,126 | 1,782 |
Net income attributable to noncontrolling interests | (12) | (6) | (35) | (22) |
NET INCOME ATTRIBUTABLE TO COSTCO | $ 750 | $ 700 | $ 2,091 | $ 1,760 |
NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO: | ||||
Basic (in dollars per share) | $ 1.71 | $ 1.59 | $ 4.77 | $ 4.01 |
Diluted (in dollars per share) | $ 1.70 | $ 1.59 | $ 4.74 | $ 3.99 |
Shares used in calculation (000's) | ||||
Basic (shares) | 438,740 | 438,817 | 438,576 | 438,650 |
Diluted (shares) | 441,715 | 441,056 | 441,383 | 440,745 |
CASH DIVIDENDS DECLARED PER COMMON SHARE | $ 0.57 | $ 7.50 | $ 1.57 | $ 8.40 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements Of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 8 Months Ended | ||
May 13, 2018 | May 07, 2017 | May 13, 2018 | May 07, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
NET INCOME INCLUDING NONCONTROLLING INTERESTS | $ 762 | $ 706 | $ 2,126 | $ 1,782 |
Foreign-currency translation adjustment and other, net | (149) | 21 | (22) | (210) |
Comprehensive income | 613 | 727 | 2,104 | 1,572 |
Less: Comprehensive income attributable to noncontrolling interests | 4 | 15 | 37 | 34 |
COMPREHENSIVE INCOME ATTRIBUTABLE TO COSTCO | $ 609 | $ 712 | $ 2,067 | $ 1,538 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements Of Cash Flows - USD ($) $ in Millions | 8 Months Ended | |
May 13, 2018 | May 07, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income including noncontrolling interests | $ 2,126 | $ 1,782 |
Adjustments to reconcile net income including noncontrolling interests to net cash provided by operating activities: | ||
Depreciation and amortization | 1,006 | 929 |
Stock-based compensation | 431 | 404 |
Other non-cash operating activities, net | (3) | (66) |
Deferred income taxes | (21) | 47 |
Changes in operating assets and liabilities: | ||
Merchandise inventories | (828) | (952) |
Accounts payable | 1,160 | 2,234 |
Other operating assets and liabilities, net | 349 | 514 |
Net cash provided by operating activities | 4,220 | 4,892 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchases of short-term investments | (679) | (901) |
Maturities and sales of short-term investments | 743 | 1,046 |
Additions to property and equipment | (1,913) | (1,723) |
Other investing activities, net | (3) | 28 |
Net cash used in investing activities | (1,852) | (1,550) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Change in bank checks outstanding | (23) | (243) |
Repayments of long-term debt | (58) | (1,100) |
Tax withholdings on stock-based awards | (217) | (202) |
Repurchases of common stock | (238) | (236) |
Cash dividend payments | (439) | (396) |
Other financing activities, net | (39) | 36 |
Net cash used in financing activities | (1,014) | (2,141) |
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | (23) | (42) |
Net change in cash and cash equivalents | 1,331 | 1,159 |
CASH AND CASH EQUIVALENTS BEGINNING OF YEAR | 4,546 | 3,379 |
CASH AND CASH EQUIVALENTS END OF PERIOD | 5,877 | 4,538 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Interest (reduced by $11 and $12 for interest capitalized in 2018 and 2017, respectively) | 81 | 99 |
Income taxes, net | 779 | 529 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES: | ||
Cash dividend declared, but not yet paid | $ 250 | $ 3,290 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements Of Cash Flows (Parenthetical) - USD ($) $ in Millions | 8 Months Ended | |
May 13, 2018 | May 07, 2017 | |
Statement of Cash Flows [Abstract] | ||
Interest capitalized | $ 11 | $ 12 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 8 Months Ended |
May 13, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Policies | Description of Business Costco Wholesale Corporation (Costco or the Company), a Washington corporation, and its subsidiaries operate membership warehouses and e-commerce websites based on the concept that offering its members low prices on a limited selection of nationally branded and private-label merchandise in a wide range of categories will produce high sales volumes and rapid inventory turnover. At May 13, 2018 , Costco operated 749 warehouses worldwide: 519 United States (U.S.) locations (in 44 states, Washington, D.C., and Puerto Rico), 98 Canada locations, 38 Mexico locations, 28 United Kingdom (U.K.) locations, 26 Japan locations, 14 Korea locations, 13 Taiwan locations, nine Australia locations, two Spain locations, one Iceland location, and one France location. The Company operates e-commerce websites in the U.S., Canada, Mexico, U.K., Korea, and Taiwan. Basis of Presentation The condensed consolidated financial statements include the accounts of Costco, its wholly-owned subsidiaries, and subsidiaries in which it has a controlling interest. The Company reports noncontrolling interests in consolidated entities as a component of equity separate from the Company’s equity. All material inter-company transactions between and among the Company and its consolidated subsidiaries have been eliminated in consolidation. The Company’s net income excludes income attributable to the noncontrolling interest in Taiwan. During the first quarter of 2018 , Costco purchased its former joint venture partner's remaining equity interest in its Korean operations. Unless otherwise noted, references to net income relate to net income attributable to Costco. These unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q for interim financial reporting pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). While these statements reflect all normal recurring adjustments that are, in the opinion of management, necessary for fair presentation of the results of the interim period, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles (U.S. GAAP) for complete financial statements. Therefore, the interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company's Annual Report filed on Form 10-K for the fiscal year ended September 3, 2017 . Fiscal Year End The Company operates on a 52/53 week fiscal year basis, with the fiscal year ending on the Sunday closest to August 31. Fiscal 2018 is a 52-week year ending on September 2, 2018 . References to the third quarters of 2018 and 2017 relate to the 12-week fiscal quarters ended May 13, 2018 , and May 7, 2017 , respectively. References to the first thirty-six weeks of 2018 and 2017 relate to the thirty-six weeks ended May 13, 2018 , and May 7, 2017 , respectively. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results and events could differ from those estimates and assumptions. Fair Value of Financial Instruments The Company accounts for certain assets and liabilities at fair value. The carrying value of the Company’s financial instruments, including cash and cash equivalents, receivables and accounts payable, approximate fair value due to their short-term nature or variable interest rates. See Notes 2, 3, and 4 for the carrying value and fair value of the Company’s investments, derivative instruments, and fixed-rate debt, respectively. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is estimated by applying a fair value hierarchy, which requires maximizing the use of observable inputs when measuring fair value. The three levels of inputs are: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3: Significant unobservable inputs that are not corroborated by market data. Current financial liabilities have fair values that approximate their carrying values. Long-term financial liabilities include the Company's long-term debt, which are recorded on the balance sheet at issuance price and adjusted for unamortized discounts or premiums and debt issuance costs, which are amortized to interest expense over the term of the loan. There have been no material changes to the valuation techniques utilized in the fair value measurement of assets and liabilities as disclosed in the Company's 2017 Form 10-K. Merchandise Inventories Merchandise inventories are stated at the lower of cost or market. U.S. merchandise inventories are valued by the cost method of accounting, using the last-in, first-out (LIFO) basis. The Company believes the LIFO method more fairly presents the results of operations by more closely matching current costs with current revenues. The Company records adjustments quarterly, if necessary, for the projected annual effect of inflation or deflation, and these estimates are adjusted at fiscal year-end, after actual inflation rates and inventory levels have been determined. Canadian and Other International merchandise inventories are predominantly valued using the cost and retail inventory methods, respectively, using the first-in, first-out (FIFO) basis. As of May 13, 2018 , and September 3, 2017 , U.S. merchandise inventories valued at LIFO approximated FIFO after considering the lower of cost or market principle. Derivatives The Company is exposed to foreign-currency exchange-rate fluctuations in the normal course of business. It manages these fluctuations, in part, through the use of forward foreign-exchange contracts, seeking to economically hedge the impact of fluctuations of foreign exchange on known future expenditures denominated in a non-functional foreign currency. The contracts relate primarily to U.S. dollar merchandise inventory expenditures made by the Company’s international subsidiaries, whose functional currency is not the U.S. dollar. These contracts do not qualify for derivative hedge accounting. The Company seeks to mitigate risk with the use of these contracts and does not intend to engage in speculative transactions. Some of these contracts contain credit-risk-related contingent features that require settlement of outstanding contracts upon certain triggering events. At May 13, 2018 , and September 3, 2017 , the aggregate fair value amounts of derivative instruments in a net liability position and the amount needed to settle the instruments immediately if the credit-risk-related contingent features were triggered were immaterial. The aggregate notional amounts of unsettled forward foreign-exchange contracts were $663 and $637 at May 13, 2018 , and September 3, 2017 , respectively. The Company seeks to manage counterparty risk associated with these contracts by limiting transactions to counterparties with which the Company has an established banking relationship. There can be no assurance that this practice is effective. The contracts are limited to less than one year in duration. See Note 3 for information on the fair value of unsettled forward foreign-exchange contracts as of May 13, 2018 , and September 3, 2017 . The unrealized gains or losses recognized in interest income and other, net in the accompanying condensed consolidated statements of income relating to the net changes in the fair value of unsettled forward foreign-exchange contracts was a net gain of $24 in the third quarter of 2018 and immaterial in the third quarter of 2017 . The net changes in fair value of unsettled forward foreign-exchange contracts during the first thirty-six weeks of 2018 and 2017 were immaterial . The Company is exposed to fluctuations in prices for the energy it consumes, particularly electricity and natural gas, which it seeks to partially mitigate through the use of fixed-price contracts for certain of its warehouses and other facilities, primarily in the U.S. and Canada. The Company also enters into variable-priced contracts on an index basis for some purchases of natural gas and fuel for its gas stations. These contracts meet the characteristics of derivative instruments, but generally qualify for the “normal purchases or normal sales” exception under authoritative guidance and require no mark-to-market adjustment. Foreign Currency The Company recognizes foreign-currency transaction gains and losses related to revaluing or settling monetary assets and liabilities denominated in currencies other than the functional currency in interest income and other, net in the accompanying condensed consolidated statements of income. Generally, these include the U.S. dollar cash and cash equivalents and the U.S. dollar payables of consolidated subsidiaries revalued to their functional currency. Also included are realized foreign-currency gains or losses from settlements of forward foreign-exchange contracts. The net changes related to these items were immaterial in the third quarter and first thirty-six weeks of 2018 and 2017 . Stock Repurchase Programs Repurchased shares of common stock are retired, in accordance with the Washington Business Corporation Act. The par value of repurchased shares is deducted from common stock and the excess repurchase price over par value is deducted by allocation to additional paid-in capital and retained earnings. The amount allocated to additional paid-in capital is the current value of additional paid-in capital per share outstanding and is applied to the number of shares repurchased. Any remaining amount is allocated to retained earnings. See Note 5 for additional information. Recent Accounting Pronouncements Adopted In March 2016, the Financial Accounting Standards Board (FASB) issued guidance intended to simplify accounting for share-based payment transactions. The guidance relates to income taxes, forfeitures, and minimum statutory tax withholding requirements. The new standard was effective for fiscal years and interim periods within those years beginning after December 15, 2016, with early adoption permitted. The Company adopted this guidance at the beginning of its first quarter of fiscal year 2018. As a result, in the first thirty-six weeks of 2018 the Company recognized an excess tax benefit of $33 as part of its income tax provision in the accompanying condensed consolidated statements of income. Previously these amounts were reflected in equity. Additionally, these amounts are now reflected as cash flows from operations instead of cash flows from financing activities in the consolidated statements of cash flows on a prospective basis. Adoption of this guidance did not have a material impact on the consolidated balance sheets, consolidated statements of cash flows, or related disclosures. Recent Accounting Pronouncements Not Yet Adopted In May 2014, the FASB issued guidance on the recognition of revenue from contracts with customers. The guidance converges the requirements for reporting revenue and requires disclosures sufficient to describe the nature, amount, timing, and uncertainty of revenue and cash flows. The new standard is effective for fiscal years and interim periods within those years beginning after December 15, 2017. The Company plans to adopt this guidance at the beginning of its first quarter of fiscal 2019, using the modified retrospective approach through a cumulative effect adjustment to retained earnings. The Company has substantially completed its assessment of the new standard and it does not believe the impacts to be material to the Company's consolidated financial statements. The Company continues to evaluate the disclosure requirements related to the new standard. In February 2016, the FASB issued guidance on leases, which will require recognition on the balance sheet for the rights and obligations created by leases with terms greater than twelve months. The standard is effective for fiscal years and interim periods within those years beginning after December 15, 2018, with early adoption permitted. The Company plans to adopt this guidance at the beginning of its first quarter of fiscal 2020. While the Company continues to evaluate this standard and the effect on related disclosures, the primary effect of adoption will be to require recording right-of-use assets and corresponding lease obligations for current operating leases. The adoption is expected to have a material impact on the Company's consolidated balance sheets, but not on the consolidated statements of income or consolidated statements of cash flows. |
Investments
Investments | 8 Months Ended |
May 13, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | The Company's investments were as follows: May 13, 2018: Cost Basis Unrealized Loss, Net Recorded Basis Available-for-sale: Government and agency securities $ 914 $ (17 ) $ 897 Held-to-maturity: Certificates of deposit 270 270 Total short-term investments $ 1,184 $ (17 ) $ 1,167 September 3, 2017: Cost Basis Unrealized Gains, Net Recorded Basis Available-for-sale: Government and agency securities $ 947 $ 0 $ 947 Mortgage-backed securities 1 0 1 Total available-for-sale 948 0 948 Held-to-maturity: Certificates of deposit 285 285 Total short-term investments $ 1,233 $ 0 $ 1,233 At May 13, 2018 , and September 3, 2017 , available-for-sale securities with continuous unrealized-loss positions were immaterial. There were no sales of available-for-sale securities during the third quarter of 2018 . Proceeds from sales of available-for-sale securities were $121 during the third quarter of 2017 . Proceeds from sales of available-for-sale securities were $39 and $187 during the first thirty-six weeks of 2018 and 2017 , respectively. Gross unrealized and realized gains or losses for the quarter and first thirty-six weeks of 2018 and 2017 were immaterial. The maturities of available-for-sale and held-to-maturity securities at May 13, 2018 , were as follows: Available-For-Sale Held-To-Maturity Cost Basis Fair Value Due in one year or less $ 207 $ 206 $ 270 Due after one year through five years 687 672 0 Due after five years 20 19 0 Total $ 914 $ 897 $ 270 |
Fair Value Measurement
Fair Value Measurement | 8 Months Ended |
May 13, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | Assets and Liabilities Measured at Fair Value on a Recurring Basis The tables below present information regarding financial assets and financial liabilities that are measured at fair value on a recurring basis and indicate the level within the hierarchy reflecting the valuation techniques utilized to determine fair value. May 13, 2018: Level 1 Level 2 Money market mutual funds (1) $ 8 $ 0 Investment in government and agency securities (2) 0 907 Forward foreign-exchange contracts, in asset position (3) 0 10 Forward foreign-exchange contracts, in (liability) position (3) 0 (3 ) Total $ 8 $ 914 September 3, 2017: Level 1 Level 2 Money market mutual funds (1) $ 7 $ 0 Investment in government and agency securities (2) 0 947 Investment in mortgage-backed securities 0 1 Forward foreign-exchange contracts, in asset position (3) 0 2 Forward foreign-exchange contracts, in (liability) position (3) 0 (8 ) Total $ 7 $ 942 _______________ (1) Included in cash and cash equivalents in the accompanying condensed consolidated balance sheets. (2) At May 13, 2018, $10 and $897 were included in cash and cash equivalents and short-term investments, respectively, in the accompanying condensed consolidated balance sheets. At September 3, 2017, there were no securities included in cash and cash equivalents and $947 included in short-term investments in the accompanying condensed consolidated balance sheets. (3) The asset and the liability values are included in other current assets and other current liabilities, respectively, in the accompanying condensed consolidated balance sheets. See Note 1 for additional information on derivative instruments. During and at the periods ended May 13, 2018 , and September 3, 2017 , the Company did not hold any Level 3 financial assets or liabilities that were measured at fair value on a recurring basis. There were no transfers in or out of Level 1 or 2 during the third quarter or first thirty-six weeks of 2018 or 2017 . Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis Assets and liabilities recognized and disclosed at fair value on a nonrecurring basis include items such as financial assets recorded at amortized cost and long-lived nonfinancial assets. These assets are measured at fair value if determined to be impaired. There were no fair value adjustments to these items during the third quarter or first thirty-six weeks of 2018 or 2017 . |
Debt
Debt | 8 Months Ended |
May 13, 2018 | |
Debt Disclosure [Abstract] | |
Debt | The carrying value of the Company’s long-term debt consisted of the following: May 13, 2018 September 3, 2017 1.70% Senior Notes due December 2019 $ 1,198 $ 1,198 1.75% Senior Notes due February 2020 499 498 2.15% Senior Notes due May 2021 995 994 2.25% Senior Notes due February 2022 498 497 2.30% Senior Notes due May 2022 794 793 2.75% Senior Notes due May 2024 992 991 3.00% Senior Notes due May 2027 986 986 Other long-term debt 649 702 Total long-term debt 6,611 6,659 Less current portion 119 86 Long-term debt, excluding current portion $ 6,492 $ 6,573 The estimated fair value of Senior Notes is valued using Level 2 inputs. Other long-term debt consists primarily of promissory notes and term loans issued by the Company's Japan subsidiary and are valued primarily using Level 3 inputs. The fair value of the Company's long-term debt, including the current portion, was approximately $6,493 and $6,753 at May 13, 2018 , and September 3, 2017 , respectively. |
Equity and Comprehensive Income
Equity and Comprehensive Income | 8 Months Ended |
May 13, 2018 | |
Equity [Abstract] | |
Equity and Comprehensive Income | Dividends The Company’s current quarterly dividend rate is $0.57 per share, compared to $0.50 per share in the third quarter of 2017 . On April 24, 2018 , the Board of Directors declared a quarterly cash dividend in the amount of $0.57 per share, which was paid on May 25, 2018 . Stock Repurchase Programs Stock repurchase activity during the third quarter and first thirty-six weeks of 2018 and 2017 is summarized below: Shares Repurchased (000's) Average Price per Share Total Cost Third quarter of 2018 290 $ 189.66 $ 55 First thirty-six weeks of 2018 1,337 $ 174.30 $ 233 Third quarter of 2017 266 $ 168.09 $ 45 First thirty-six of 2017 1,486 $ 156.51 $ 233 These amounts may differ from the stock repurchase balances in the accompanying condensed consolidated statements of cash flows due to changes in unsettled stock repurchases at the end of a quarter. The remaining amount available for stock repurchases under our approved plan, which expires in April 2019, was $2,516 at May 13, 2018 . Purchases are made from time-to-time, as conditions warrant, in the open market or in block purchases and pursuant to plans under SEC Rule 10b5-1. Components of Equity and Comprehensive Income The following tables show the changes in equity attributable to Costco and the noncontrolling interests of consolidated subsidiaries: Attributable to Costco Noncontrolling Interests Total Equity Equity at September 3, 2017 $ 10,778 $ 301 $ 11,079 Comprehensive income: Net income 2,091 35 2,126 Foreign-currency translation adjustment and other, net (24 ) 2 (22 ) Comprehensive income 2,067 37 2,104 Stock-based compensation 434 0 434 Release of vested restricted stock units (RSUs), including tax effects (217 ) 0 (217 ) Repurchases of common stock (233 ) 0 (233 ) Cash dividends declared and other (686 ) (34 ) (720 ) Equity at May 13, 2018 $ 12,143 $ 304 $ 12,447 Attributable to Costco Noncontrolling Interests Total Equity Equity at August 28, 2016 $ 12,079 $ 253 $ 12,332 Comprehensive income: Net income 1,760 22 1,782 Foreign-currency translation adjustment and other, net (222 ) 12 (210 ) Comprehensive income 1,538 34 1,572 Stock-based compensation 404 0 404 Release of vested RSUs, including tax effects (165 ) 0 (165 ) Repurchases of common stock (233 ) 0 (233 ) Cash dividends declared and other (3,725 ) 0 (3,725 ) Equity at May 7, 2017 $ 9,898 $ 287 $ 10,185 |
Stock-Based Compensation Plans
Stock-Based Compensation Plans | 8 Months Ended |
May 13, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation Plans | The Seventh Restated 2002 Stock Incentive Plan authorized the issuance of 23,500,000 shares ( 13,429,000 RSUs) of common stock for future grants in addition to the shares authorized under the previous plan. The Company issues new shares of common stock upon vesting of RSUs. Shares for vested RSUs are generally delivered to participants annually, net of shares withheld for statutory taxes. Summary of Restricted Stock Unit Activity At May 13, 2018 , 8,262,000 shares were available to be granted as RSUs and the following awards were outstanding: • 7,305,000 time-based RSUs that vest upon continued employment over specified periods of time; • 127,000 performance-based RSUs, granted to executive officers of the Company, for which the performance targets have been met. The awards vest upon continued employment over specified periods of time; and • 205,000 performance-based RSUs, granted to executive officers of the Company, subject to achievement of performance targets for fiscal 2018 , as determined by the Compensation Committee of the Board of Directors after the end of the fiscal year. These awards are included in the table below and the Company has recognized compensation expense for these awards as it is currently deemed probable that the targets will be achieved. The following table summarizes RSU transactions during the first thirty-six weeks of 2018 : Number of Units (in 000’s) Weighted-Average Grant Date Fair Value Outstanding at September 3, 2017 8,199 $ 128.15 Granted 3,722 156.19 Vested and delivered (4,080 ) 129.49 Forfeited (204 ) 138.42 Outstanding at May 13, 2018 7,637 $ 140.83 The remaining unrecognized compensation cost related to non-vested RSUs at May 13, 2018 , was $819 , and the weighted-average period over which this cost will be recognized is 1.7 years. Summary of Stock-Based Compensation The following table summarizes stock-based compensation expense and the related tax benefits under the Company’s plans: 12 Weeks Ended 36 Weeks Ended May 13, May 7, May 13, May 7, Stock-based compensation expense before income taxes $ 85 $ 82 $ 431 $ 404 Less recognized income tax benefit (1) (19 ) (26 ) (98 ) (132 ) Stock-based compensation expense, net of income taxes $ 66 $ 56 $ 333 $ 272 _______________ (1) For 2018, the tax benefit reflects the reduction in the U.S. federal statutory income tax rate from 35% to 21% . |
Income Taxes Income Taxes
Income Taxes Income Taxes | 8 Months Ended |
May 13, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | In December 2017, the Tax Cuts and Jobs Act (the “2017 Tax Act”) was signed into law. Except for certain provisions, the 2017 Tax Act is effective for tax years beginning on or after January 1, 2018. The Company is a fiscal-year taxpayer, so most provisions will become effective for fiscal 2019, including limitations on the Company’s ability to claim foreign tax credits, repeal of the domestic manufacturing deduction, and limitations on certain business deductions. Provisions with significant impacts that were effective starting in the second quarter of fiscal 2018 and throughout the remainder of fiscal 2018 include: a decrease in the U.S. federal income tax rate, remeasurement of certain net deferred tax liabilities, and a transition tax on deemed repatriation of certain foreign earnings. The decrease in the U.S. federal statutory income tax rate to 21% will result in a blended rate for the Company of 25.6% for fiscal 2018. During the first thirty-six weeks of 2018, the Company recognized net tax benefits of $131 related to the 2017 Tax Act, including the impact of lowering the U.S. federal corporate rate. This benefit also included discrete tax expense of $142 for the estimated tax on deemed repatriation of foreign earnings, and $43 for the reduction in foreign tax credits and other immaterial items, largely offset by a tax benefit of $160 for the provisional remeasurement of certain deferred tax liabilities. These items were predominantly recorded in the second quarter as provisional amounts to reflect the Company's current interpretations and estimates that it believes are reasonable. As the Company continues to evaluate the 2017 Tax Act and available data, it anticipates that adjustments may be made in future periods up to and including the first quarter of fiscal 2019. The determination of the Company’s provision for income taxes requires significant judgment, the use of estimates, and the interpretation and application of complex tax laws, all of which are subject to continuing review. |
Net Income per Common and Commo
Net Income per Common and Common Equivalent Share | 8 Months Ended |
May 13, 2018 | |
Earnings Per Share [Abstract] | |
Net Income Per Common and Common Equivalent Share | The following table shows the amounts used in computing net income per share and the weighted average number of shares of potentially dilutive common shares outstanding (shares in 000’s): 12 Weeks Ended 36 Weeks Ended May 13, May 7, May 13, May 7, Net income attributable to Costco $ 750 $ 700 $ 2,091 $ 1,760 Weighted average number of common shares used in basic net income per common share 438,740 438,817 438,576 438,650 RSUs and other 2,975 2,239 2,807 2,095 Weighted average number of common shares and dilutive potential of common stock used in diluted net income per share 441,715 441,056 441,383 440,745 |
Commitments and Contingencies
Commitments and Contingencies | 8 Months Ended |
May 13, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Legal Proceedings The Company is involved in a number of claims, proceedings and litigation arising from its business and property ownership. In accordance with applicable accounting guidance, the Company establishes an accrual for legal proceedings if and when those matters reach a stage where they present loss contingencies that are both probable and reasonably estimable. There may be exposure to loss in excess of any amounts accrued. The Company monitors those matters for developments that would affect the likelihood of a loss (taking into account where applicable indemnification arrangements concerning suppliers and insurers) and the accrued amount, if any, thereof, and adjusts the amount as appropriate. As of the date of this Report, the Company has recorded an immaterial accrual with respect to one matter described below, in addition to other immaterial accruals for matters not described below. If the loss contingency at issue is not both probable and reasonably estimable, the Company does not establish an accrual, but will continue to monitor the matter for developments that will make the loss contingency both probable and reasonably estimable. In each case, there is a reasonable possibility that a loss may be incurred, including a loss in excess of the applicable accrual. For matters where no accrual has been recorded, the possible loss or range of loss (including any loss in excess of the accrual) cannot, in the Company's view, be reasonably estimated because, among other things: (i) the remedies or penalties sought are indeterminate or unspecified; (ii) the legal and/or factual theories are not well developed; and/or (iii) the matters involve complex or novel legal theories or a large number of parties. The Company is a defendant in a class action alleging violation of California Wage Order 7-2001 for failing to provide seating to member service assistants who act as greeters and exit attendants in the Company’s California warehouses. Canela v. Costco Wholesale Corp., et al. (Case No. 5:13-cv-03598, N.D. Cal. filed July 1, 2013). The complaint seeks relief under the California Labor Code, including civil penalties and attorneys’ fees. The Company filed an answer denying the material allegations of the complaint. The plaintiff has since indicated that exit attendants are no longer a subject of the litigation. On November 23, 2016, the Company’s Canadian subsidiary received from the Ontario Ministry of Health and Long Term Care a request for an inspection and information concerning compliance with the anti-rebate provisions in the Ontario Drug Benefit Act and the Drug Interchangeability and Dispensing Fee Act. The Company is seeking to cooperate with the request. The Ministry has indicated it has reason to believe the Company received payments in violation of these laws. In December 2017, the United States Judicial Panel on Multidistrict Litigation ordered consolidated numerous cases filed against various defendants by counties, cities, hospitals, Native American tribes and third-party payors concerning the impacts of opioid abuse. In re National Prescription Opiate Litigation (MDL No. 2804) (N.D. Ohio). Included are federal court cases that name the Company, including actions filed by several counties and cities in Michigan, a city in New Jersey, and a third-party payor in Ohio. Similar cases that name the Company have been filed in state courts in New Jersey and Oklahoma. The Company is defending all of these matters. In November 2016 and September 2017, the Company received notices of violation from the Connecticut Department of Energy and Environmental Protection regarding hazardous waste practices at its Connecticut warehouses, primarily concerning unsalable pharmaceuticals. The Company is seeking to cooperate concerning the resolution of these notices. The Company does not believe that any pending claim, proceeding or litigation, either alone or in the aggregate, will have a material adverse effect on the Company’s financial position, results of operations or cash flows; however, it is possible that an unfavorable outcome of some or all of the matters, however unlikely, could result in a charge that might be material to the results of an individual fiscal quarter. |
Segment Reporting
Segment Reporting | 8 Months Ended |
May 13, 2018 | |
Segment Reporting [Abstract] | |
Segment Reporting | The Company and its subsidiaries are principally engaged in the operation of membership warehouses in the U.S., Canada, Mexico, U.K., Japan, Korea, Australia, Spain, Iceland and France and through a majority-owned subsidiary in Taiwan. Reportable segments are largely based on management’s organization of the operating segments for operational decisions and assessments of financial performance, which consider geographic locations. The material accounting policies of the segments are as described in the notes to the consolidated financial statements included in the Company's Annual Report filed on Form 10-K for the fiscal year ended September 3, 2017 , and Note 1 above. Inter-segment net sales and expenses have been eliminated in computing total revenue and operating income. Certain operating expenses, predominantly stock-based compensation, are incurred on behalf of the Company's Canadian and Other International Operations, but are included in the U.S. Operations because those costs are not allocated internally and generally come under the responsibility of the Company's U.S. management team. United States Operations Canadian Operations Other International Operations Total Twelve Weeks Ended May 13, 2018 Total revenue $ 23,475 $ 4,647 $ 4,239 $ 32,361 Operating income 682 210 175 1,067 Depreciation and amortization 242 31 54 327 Additions to property and equipment 468 42 75 585 Twelve Weeks Ended May 7, 2017 Total revenue $ 21,172 $ 4,069 $ 3,619 $ 28,860 Operating income 654 172 142 968 Depreciation and amortization 245 28 47 320 Additions to property and equipment 363 40 137 540 Thirty-six Weeks Ended May 13, 2018 Total revenue $ 69,975 $ 14,163 $ 13,027 $ 97,165 Operating income 1,818 652 564 3,034 Depreciation and amortization 756 94 156 1,006 Additions to property and equipment 1,323 156 434 1,913 Net property and equipment 12,924 1,829 4,425 19,178 Total assets 27,062 4,248 8,295 39,605 Thirty-six Weeks Ended May 7, 2017 Total revenue $ 63,313 $ 12,397 $ 11,015 $ 86,725 Operating income 1,680 543 438 2,661 Depreciation and amortization 712 81 136 929 Additions to property and equipment 1,147 206 370 1,723 Net property and equipment 12,139 1,612 3,784 17,535 Total assets 24,356 4,014 7,261 35,631 Year Ended September 3, 2017 Total revenue $ 93,889 $ 18,775 $ 16,361 $ 129,025 Operating income 2,644 841 626 4,111 Depreciation and amortization 1,044 124 202 1,370 Additions to property and equipment 1,714 277 511 2,502 Net property and equipment 12,339 1,820 4,002 18,161 Total assets 24,068 4,471 7,808 36,347 |
Summary of Significant Accoun18
Summary of Significant Accounting Policies (Policies) | 8 Months Ended |
May 13, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The condensed consolidated financial statements include the accounts of Costco, its wholly-owned subsidiaries, and subsidiaries in which it has a controlling interest. The Company reports noncontrolling interests in consolidated entities as a component of equity separate from the Company’s equity. All material inter-company transactions between and among the Company and its consolidated subsidiaries have been eliminated in consolidation. The Company’s net income excludes income attributable to the noncontrolling interest in Taiwan. During the first quarter of 2018 , Costco purchased its former joint venture partner's remaining equity interest in its Korean operations. Unless otherwise noted, references to net income relate to net income attributable to Costco. These unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q for interim financial reporting pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). While these statements reflect all normal recurring adjustments that are, in the opinion of management, necessary for fair presentation of the results of the interim period, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles (U.S. GAAP) for complete financial statements. Therefore, the interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company's Annual Report filed on Form 10-K for the fiscal year ended September 3, 2017 . |
Fiscal Year End | Fiscal Year End The Company operates on a 52/53 week fiscal year basis, with the fiscal year ending on the Sunday closest to August 31. Fiscal 2018 is a 52-week year ending on September 2, 2018 . References to the third quarters of 2018 and 2017 relate to the 12-week fiscal quarters ended May 13, 2018 , and May 7, 2017 , respectively. References to the first thirty-six weeks of 2018 and 2017 relate to the thirty-six weeks ended May 13, 2018 , and May 7, 2017 , respectively. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results and events could differ from those estimates and assumptions. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company accounts for certain assets and liabilities at fair value. The carrying value of the Company’s financial instruments, including cash and cash equivalents, receivables and accounts payable, approximate fair value due to their short-term nature or variable interest rates. See Notes 2, 3, and 4 for the carrying value and fair value of the Company’s investments, derivative instruments, and fixed-rate debt, respectively. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is estimated by applying a fair value hierarchy, which requires maximizing the use of observable inputs when measuring fair value. The three levels of inputs are: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3: Significant unobservable inputs that are not corroborated by market data. Current financial liabilities have fair values that approximate their carrying values. Long-term financial liabilities include the Company's long-term debt, which are recorded on the balance sheet at issuance price and adjusted for unamortized discounts or premiums and debt issuance costs, which are amortized to interest expense over the term of the loan. There have been no material changes to the valuation techniques utilized in the fair value measurement of assets and liabilities as disclosed in the Company's 2017 Form 10-K. |
Merchandise Inventories | Merchandise Inventories Merchandise inventories are stated at the lower of cost or market. U.S. merchandise inventories are valued by the cost method of accounting, using the last-in, first-out (LIFO) basis. The Company believes the LIFO method more fairly presents the results of operations by more closely matching current costs with current revenues. The Company records adjustments quarterly, if necessary, for the projected annual effect of inflation or deflation, and these estimates are adjusted at fiscal year-end, after actual inflation rates and inventory levels have been determined. Canadian and Other International merchandise inventories are predominantly valued using the cost and retail inventory methods, respectively, using the first-in, first-out (FIFO) basis. As of May 13, 2018 , and September 3, 2017 , U.S. merchandise inventories valued at LIFO approximated FIFO after considering the lower of cost or market principle. |
Derivatives | Derivatives The Company is exposed to foreign-currency exchange-rate fluctuations in the normal course of business. It manages these fluctuations, in part, through the use of forward foreign-exchange contracts, seeking to economically hedge the impact of fluctuations of foreign exchange on known future expenditures denominated in a non-functional foreign currency. The contracts relate primarily to U.S. dollar merchandise inventory expenditures made by the Company’s international subsidiaries, whose functional currency is not the U.S. dollar. These contracts do not qualify for derivative hedge accounting. The Company seeks to mitigate risk with the use of these contracts and does not intend to engage in speculative transactions. Some of these contracts contain credit-risk-related contingent features that require settlement of outstanding contracts upon certain triggering events. At May 13, 2018 , and September 3, 2017 , the aggregate fair value amounts of derivative instruments in a net liability position and the amount needed to settle the instruments immediately if the credit-risk-related contingent features were triggered were immaterial. The aggregate notional amounts of unsettled forward foreign-exchange contracts were $663 and $637 at May 13, 2018 , and September 3, 2017 , respectively. The Company seeks to manage counterparty risk associated with these contracts by limiting transactions to counterparties with which the Company has an established banking relationship. There can be no assurance that this practice is effective. The contracts are limited to less than one year in duration. See Note 3 for information on the fair value of unsettled forward foreign-exchange contracts as of May 13, 2018 , and September 3, 2017 . The unrealized gains or losses recognized in interest income and other, net in the accompanying condensed consolidated statements of income relating to the net changes in the fair value of unsettled forward foreign-exchange contracts was a net gain of $24 in the third quarter of 2018 and immaterial in the third quarter of 2017 . The net changes in fair value of unsettled forward foreign-exchange contracts during the first thirty-six weeks of 2018 and 2017 were immaterial . The Company is exposed to fluctuations in prices for the energy it consumes, particularly electricity and natural gas, which it seeks to partially mitigate through the use of fixed-price contracts for certain of its warehouses and other facilities, primarily in the U.S. and Canada. The Company also enters into variable-priced contracts on an index basis for some purchases of natural gas and fuel for its gas stations. These contracts meet the characteristics of derivative instruments, but generally qualify for the “normal purchases or normal sales” exception under authoritative guidance and require no mark-to-market adjustment. |
Foreign Currency | Foreign Currency The Company recognizes foreign-currency transaction gains and losses related to revaluing or settling monetary assets and liabilities denominated in currencies other than the functional currency in interest income and other, net in the accompanying condensed consolidated statements of income. Generally, these include the U.S. dollar cash and cash equivalents and the U.S. dollar payables of consolidated subsidiaries revalued to their functional currency. Also included are realized foreign-currency gains or losses from settlements of forward foreign-exchange contracts. The net changes related to these items were immaterial in the third quarter and first thirty-six weeks of 2018 and 2017 . |
Stock Repurchase Programs | Stock Repurchase Programs Repurchased shares of common stock are retired, in accordance with the Washington Business Corporation Act. The par value of repurchased shares is deducted from common stock and the excess repurchase price over par value is deducted by allocation to additional paid-in capital and retained earnings. The amount allocated to additional paid-in capital is the current value of additional paid-in capital per share outstanding and is applied to the number of shares repurchased. Any remaining amount is allocated to retained earnings. See Note 5 for additional information. |
Recent Accounting Pronouncements Adopted | Recent Accounting Pronouncements Adopted In March 2016, the Financial Accounting Standards Board (FASB) issued guidance intended to simplify accounting for share-based payment transactions. The guidance relates to income taxes, forfeitures, and minimum statutory tax withholding requirements. The new standard was effective for fiscal years and interim periods within those years beginning after December 15, 2016, with early adoption permitted. The Company adopted this guidance at the beginning of its first quarter of fiscal year 2018. As a result, in the first thirty-six weeks of 2018 the Company recognized an excess tax benefit of $33 as part of its income tax provision in the accompanying condensed consolidated statements of income. Previously these amounts were reflected in equity. Additionally, these amounts are now reflected as cash flows from operations instead of cash flows from financing activities in the consolidated statements of cash flows on a prospective basis. Adoption of this guidance did not have a material impact on the consolidated balance sheets, consolidated statements of cash flows, or related disclosures. |
Recent Accounting Pronouncements Not Yet Adopted | Recent Accounting Pronouncements Not Yet Adopted In May 2014, the FASB issued guidance on the recognition of revenue from contracts with customers. The guidance converges the requirements for reporting revenue and requires disclosures sufficient to describe the nature, amount, timing, and uncertainty of revenue and cash flows. The new standard is effective for fiscal years and interim periods within those years beginning after December 15, 2017. The Company plans to adopt this guidance at the beginning of its first quarter of fiscal 2019, using the modified retrospective approach through a cumulative effect adjustment to retained earnings. The Company has substantially completed its assessment of the new standard and it does not believe the impacts to be material to the Company's consolidated financial statements. The Company continues to evaluate the disclosure requirements related to the new standard. In February 2016, the FASB issued guidance on leases, which will require recognition on the balance sheet for the rights and obligations created by leases with terms greater than twelve months. The standard is effective for fiscal years and interim periods within those years beginning after December 15, 2018, with early adoption permitted. The Company plans to adopt this guidance at the beginning of its first quarter of fiscal 2020. While the Company continues to evaluate this standard and the effect on related disclosures, the primary effect of adoption will be to require recording right-of-use assets and corresponding lease obligations for current operating leases. The adoption is expected to have a material impact on the Company's consolidated balance sheets, but not on the consolidated statements of income or consolidated statements of cash flows. |
Investments (Tables)
Investments (Tables) | 8 Months Ended |
May 13, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Available-for-sale and Held-to-maturity Investments | The Company's investments were as follows: May 13, 2018: Cost Basis Unrealized Loss, Net Recorded Basis Available-for-sale: Government and agency securities $ 914 $ (17 ) $ 897 Held-to-maturity: Certificates of deposit 270 270 Total short-term investments $ 1,184 $ (17 ) $ 1,167 September 3, 2017: Cost Basis Unrealized Gains, Net Recorded Basis Available-for-sale: Government and agency securities $ 947 $ 0 $ 947 Mortgage-backed securities 1 0 1 Total available-for-sale 948 0 948 Held-to-maturity: Certificates of deposit 285 285 Total short-term investments $ 1,233 $ 0 $ 1,233 |
Maturities of Available-for-sale and Held-to-maturity Securities | The maturities of available-for-sale and held-to-maturity securities at May 13, 2018 , were as follows: Available-For-Sale Held-To-Maturity Cost Basis Fair Value Due in one year or less $ 207 $ 206 $ 270 Due after one year through five years 687 672 0 Due after five years 20 19 0 Total $ 914 $ 897 $ 270 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 8 Months Ended |
May 13, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Assets and Liabilities Measured on Recurring Basis | The tables below present information regarding financial assets and financial liabilities that are measured at fair value on a recurring basis and indicate the level within the hierarchy reflecting the valuation techniques utilized to determine fair value. May 13, 2018: Level 1 Level 2 Money market mutual funds (1) $ 8 $ 0 Investment in government and agency securities (2) 0 907 Forward foreign-exchange contracts, in asset position (3) 0 10 Forward foreign-exchange contracts, in (liability) position (3) 0 (3 ) Total $ 8 $ 914 September 3, 2017: Level 1 Level 2 Money market mutual funds (1) $ 7 $ 0 Investment in government and agency securities (2) 0 947 Investment in mortgage-backed securities 0 1 Forward foreign-exchange contracts, in asset position (3) 0 2 Forward foreign-exchange contracts, in (liability) position (3) 0 (8 ) Total $ 7 $ 942 _______________ (1) Included in cash and cash equivalents in the accompanying condensed consolidated balance sheets. (2) At May 13, 2018, $10 and $897 were included in cash and cash equivalents and short-term investments, respectively, in the accompanying condensed consolidated balance sheets. At September 3, 2017, there were no securities included in cash and cash equivalents and $947 included in short-term investments in the accompanying condensed consolidated balance sheets. (3) The asset and the liability values are included in other current assets and other current liabilities, respectively, in the accompanying condensed consolidated balance sheets. See Note 1 for additional information on derivative instruments. |
Debt (Tables)
Debt (Tables) | 8 Months Ended |
May 13, 2018 | |
Debt Disclosure [Abstract] | |
Carrying Value and Estimated Fair Value of Company's Long-term Debt | The carrying value of the Company’s long-term debt consisted of the following: May 13, 2018 September 3, 2017 1.70% Senior Notes due December 2019 $ 1,198 $ 1,198 1.75% Senior Notes due February 2020 499 498 2.15% Senior Notes due May 2021 995 994 2.25% Senior Notes due February 2022 498 497 2.30% Senior Notes due May 2022 794 793 2.75% Senior Notes due May 2024 992 991 3.00% Senior Notes due May 2027 986 986 Other long-term debt 649 702 Total long-term debt 6,611 6,659 Less current portion 119 86 Long-term debt, excluding current portion $ 6,492 $ 6,573 |
Equity and Comprehensive Inco22
Equity and Comprehensive Income (Tables) | 8 Months Ended |
May 13, 2018 | |
Equity [Abstract] | |
Stock Repurchased During Period | Stock repurchase activity during the third quarter and first thirty-six weeks of 2018 and 2017 is summarized below: Shares Repurchased (000's) Average Price per Share Total Cost Third quarter of 2018 290 $ 189.66 $ 55 First thirty-six weeks of 2018 1,337 $ 174.30 $ 233 Third quarter of 2017 266 $ 168.09 $ 45 First thirty-six of 2017 1,486 $ 156.51 $ 233 |
Components Of Equity And Comprehensive Income | The following tables show the changes in equity attributable to Costco and the noncontrolling interests of consolidated subsidiaries: Attributable to Costco Noncontrolling Interests Total Equity Equity at September 3, 2017 $ 10,778 $ 301 $ 11,079 Comprehensive income: Net income 2,091 35 2,126 Foreign-currency translation adjustment and other, net (24 ) 2 (22 ) Comprehensive income 2,067 37 2,104 Stock-based compensation 434 0 434 Release of vested restricted stock units (RSUs), including tax effects (217 ) 0 (217 ) Repurchases of common stock (233 ) 0 (233 ) Cash dividends declared and other (686 ) (34 ) (720 ) Equity at May 13, 2018 $ 12,143 $ 304 $ 12,447 Attributable to Costco Noncontrolling Interests Total Equity Equity at August 28, 2016 $ 12,079 $ 253 $ 12,332 Comprehensive income: Net income 1,760 22 1,782 Foreign-currency translation adjustment and other, net (222 ) 12 (210 ) Comprehensive income 1,538 34 1,572 Stock-based compensation 404 0 404 Release of vested RSUs, including tax effects (165 ) 0 (165 ) Repurchases of common stock (233 ) 0 (233 ) Cash dividends declared and other (3,725 ) 0 (3,725 ) Equity at May 7, 2017 $ 9,898 $ 287 $ 10,185 |
Stock-Based Compensation Plans
Stock-Based Compensation Plans (Tables) | 8 Months Ended |
May 13, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of RSU Transactions | The following table summarizes RSU transactions during the first thirty-six weeks of 2018 : Number of Units (in 000’s) Weighted-Average Grant Date Fair Value Outstanding at September 3, 2017 8,199 $ 128.15 Granted 3,722 156.19 Vested and delivered (4,080 ) 129.49 Forfeited (204 ) 138.42 Outstanding at May 13, 2018 7,637 $ 140.83 |
Summary of Stock-Based Compensation Expense and Related Tax Benefits | The following table summarizes stock-based compensation expense and the related tax benefits under the Company’s plans: 12 Weeks Ended 36 Weeks Ended May 13, May 7, May 13, May 7, Stock-based compensation expense before income taxes $ 85 $ 82 $ 431 $ 404 Less recognized income tax benefit (1) (19 ) (26 ) (98 ) (132 ) Stock-based compensation expense, net of income taxes $ 66 $ 56 $ 333 $ 272 _______________ (1) For 2018, the tax benefit reflects the reduction in the U.S. federal statutory income tax rate from 35% to 21% . |
Net Income per Common and Com24
Net Income per Common and Common Equivalent Share (Tables) | 8 Months Ended |
May 13, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table shows the amounts used in computing net income per share and the weighted average number of shares of potentially dilutive common shares outstanding (shares in 000’s): 12 Weeks Ended 36 Weeks Ended May 13, May 7, May 13, May 7, Net income attributable to Costco $ 750 $ 700 $ 2,091 $ 1,760 Weighted average number of common shares used in basic net income per common share 438,740 438,817 438,576 438,650 RSUs and other 2,975 2,239 2,807 2,095 Weighted average number of common shares and dilutive potential of common stock used in diluted net income per share 441,715 441,056 441,383 440,745 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 8 Months Ended |
May 13, 2018 | |
Segment Reporting [Abstract] | |
Segment Reporting Information, by Segment | Certain operating expenses, predominantly stock-based compensation, are incurred on behalf of the Company's Canadian and Other International Operations, but are included in the U.S. Operations because those costs are not allocated internally and generally come under the responsibility of the Company's U.S. management team. United States Operations Canadian Operations Other International Operations Total Twelve Weeks Ended May 13, 2018 Total revenue $ 23,475 $ 4,647 $ 4,239 $ 32,361 Operating income 682 210 175 1,067 Depreciation and amortization 242 31 54 327 Additions to property and equipment 468 42 75 585 Twelve Weeks Ended May 7, 2017 Total revenue $ 21,172 $ 4,069 $ 3,619 $ 28,860 Operating income 654 172 142 968 Depreciation and amortization 245 28 47 320 Additions to property and equipment 363 40 137 540 Thirty-six Weeks Ended May 13, 2018 Total revenue $ 69,975 $ 14,163 $ 13,027 $ 97,165 Operating income 1,818 652 564 3,034 Depreciation and amortization 756 94 156 1,006 Additions to property and equipment 1,323 156 434 1,913 Net property and equipment 12,924 1,829 4,425 19,178 Total assets 27,062 4,248 8,295 39,605 Thirty-six Weeks Ended May 7, 2017 Total revenue $ 63,313 $ 12,397 $ 11,015 $ 86,725 Operating income 1,680 543 438 2,661 Depreciation and amortization 712 81 136 929 Additions to property and equipment 1,147 206 370 1,723 Net property and equipment 12,139 1,612 3,784 17,535 Total assets 24,356 4,014 7,261 35,631 Year Ended September 3, 2017 Total revenue $ 93,889 $ 18,775 $ 16,361 $ 129,025 Operating income 2,644 841 626 4,111 Depreciation and amortization 1,044 124 202 1,370 Additions to property and equipment 1,714 277 511 2,502 Net property and equipment 12,339 1,820 4,002 18,161 Total assets 24,068 4,471 7,808 36,347 |
Summary of Significant Accoun26
Summary of Significant Accounting Policies - Additional Information (Detail) $ in Millions | 3 Months Ended | 8 Months Ended | |||
May 13, 2018USD ($)warehousestates | May 07, 2017USD ($) | May 13, 2018USD ($)warehousestates | May 07, 2017USD ($) | Sep. 03, 2017USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | |||||
Number of warehouses operated | 749 | 749 | |||
Gain (Loss) on Foreign Currency Derivative Instruments Not Designated as Hedging Instruments | $ | $ 24 | ||||
Income Tax Expense (Benefit) | $ | 309 | $ 259 | $ 867 | $ 838 | |
Accounting Standards Update 2016-09 [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Income Tax Expense (Benefit) | $ | (33) | ||||
Forward Foreign-exchange Contracts | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Notional amount of forward foreign-exchange derivative | $ | $ 663 | $ 663 | $ 637 | ||
UNITED STATES | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Number of warehouses operated | 519 | 519 | |||
Number of states in country | states | 44 | 44 | |||
CANADA | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Number of warehouses operated | 98 | 98 | |||
MEXICO | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Number of warehouses operated | 38 | 38 | |||
UNITED KINGDOM | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Number of warehouses operated | 28 | 28 | |||
JAPAN | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Number of warehouses operated | 26 | 26 | |||
KOREA | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Number of warehouses operated | 14 | 14 | |||
TAIWAN | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Number of warehouses operated | 13 | 13 | |||
AUSTRALIA | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Number of warehouses operated | 9 | 9 | |||
SPAIN | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Number of warehouses operated | 2 | 2 | |||
ICELAND | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Number of warehouses operated | 1 | 1 | |||
FRANCE | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Number of warehouses operated | 1 | 1 |
Investments - Available-for-sal
Investments - Available-for-sale and Held-to-maturity Investments (Detail) - USD ($) $ in Millions | 3 Months Ended | 8 Months Ended | ||
May 07, 2017 | May 13, 2018 | May 07, 2017 | Sep. 03, 2017 | |
Available-for-sale and Held-to-maturity [Line Items] | ||||
Available-for-sale, recorded basis | $ 897 | |||
Available-for-sale, cost basis, total | 914 | |||
Held-to-maturity, cost basis | 270 | |||
Total investments, recorded basis | 1,167 | $ 1,233 | ||
Proceeds from Sale of Available-for-sale Securities | $ 121 | 39 | $ 187 | |
Short-term Investments | ||||
Available-for-sale and Held-to-maturity [Line Items] | ||||
Unrealized gains/(loss), net | (17) | 0 | ||
Total investments, recorded basis | 1,167 | 1,233 | ||
Total investments, cost basis, total | 1,184 | 1,233 | ||
Available-for-sale Securities [Member] | Short-term Investments | ||||
Available-for-sale and Held-to-maturity [Line Items] | ||||
Available-for-sale, recorded basis | 897 | 948 | ||
Unrealized gains/(loss), net | (17) | 0 | ||
Available-for-sale, cost basis, total | 914 | 948 | ||
Available-for-sale Securities [Member] | Short-term Investments | Government and Agency Securities | ||||
Available-for-sale and Held-to-maturity [Line Items] | ||||
Available-for-sale, recorded basis | 897 | 947 | ||
Unrealized gains/(loss), net | (17) | 0 | ||
Available-for-sale, cost basis, total | 914 | 947 | ||
Available-for-sale Securities [Member] | Short-term Investments | Mortgaged-backed Securities | ||||
Available-for-sale and Held-to-maturity [Line Items] | ||||
Available-for-sale, recorded basis | 1 | |||
Unrealized gains/(loss), net | 0 | |||
Available-for-sale, cost basis, total | 1 | |||
Held-to-maturity Securities [Member] | Short-term Investments | ||||
Available-for-sale and Held-to-maturity [Line Items] | ||||
Held-to-maturity, recorded basis | 270 | 285 | ||
Held-to-maturity, cost basis | 270 | 285 | ||
Held-to-maturity Securities [Member] | Short-term Investments | Certificates of deposit | ||||
Available-for-sale and Held-to-maturity [Line Items] | ||||
Held-to-maturity, recorded basis | 270 | 285 | ||
Held-to-maturity, cost basis | $ 270 | $ 285 |
Investments - Maturities of Ava
Investments - Maturities of Available-for-sale and Held-to-maturity Securities (Details) $ in Millions | May 13, 2018USD ($) |
Available-for-sale, Cost Basis | |
Due in one year or less | $ 207 |
Due after one year through five years | 687 |
Due after five years | 20 |
Available-for-sale, cost basis, total | 914 |
Available-for-sale, Fair Value | |
Due in one year or less | 206 |
Due after one year through five years | 672 |
Due after five years | 19 |
Available-for-sale, recorded basis, total | 897 |
Held-to-maturity | |
Due in one year or less | 270 |
Due after one year through five years | 0 |
Due after five years | 0 |
Held-to-maturity, cost basis, total | $ 270 |
Fair Value Measurement - Fair V
Fair Value Measurement - Fair Value of Financial Assets and Financial Liabilities Measured on Recurring Basis (Details) - USD ($) $ in Millions | May 13, 2018 | Sep. 03, 2017 | May 07, 2017 | Aug. 28, 2016 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Cash and Cash Equivalents, at Carrying Value | $ 5,877 | $ 4,546 | $ 4,538 | $ 3,379 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Fair value of assets measured on recurring basis | 8 | 7 | |||
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Fair value of assets measured on recurring basis | 914 | 942 | |||
Money Market Funds | Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Fair value of assets measured on recurring basis | [1] | 8 | 7 | ||
Money Market Funds | Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Fair value of assets measured on recurring basis | [1] | 0 | 0 | ||
Government and Agency Securities | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Cash and Cash Equivalents, at Carrying Value | 10 | ||||
Fair value of assets measured on recurring basis | 897 | 947 | |||
Government and Agency Securities | Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Fair value of assets measured on recurring basis | [2] | 0 | 0 | ||
Government and Agency Securities | Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Fair value of assets measured on recurring basis | [2] | 907 | |||
Mortgaged-backed Securities | Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Fair value of assets measured on recurring basis | 0 | ||||
Mortgaged-backed Securities | Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Fair value of assets measured on recurring basis | 1 | ||||
Forward Foreign-exchange Contracts | Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Fair value of assets measured on recurring basis | [3] | 0 | 0 | ||
Fair value of liabilities measured on recurring basis | [3] | 0 | 0 | ||
Forward Foreign-exchange Contracts | Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Fair value of assets measured on recurring basis | [3] | 10 | 2 | ||
Fair value of liabilities measured on recurring basis | [3] | $ (3) | $ (8) | ||
[1] | Included in cash and cash equivalents in the accompanying condensed consolidated balance sheets. | ||||
[2] | At May 13, 2018, $10 and $897 were included in cash and cash equivalents and short-term investments, respectively, in the accompanying condensed consolidated balance sheets. At September 3, 2017, there were no securities included in cash and cash equivalents and $947 included in short-term investments in the accompanying condensed consolidated balance sheets. | ||||
[3] | The asset and the liability values are included in other current assets and other current liabilities, respectively, in the accompanying condensed consolidated balance sheets. See Note 1 for additional information on derivative instruments. |
Debt (Carrying Value and Estima
Debt (Carrying Value and Estimated Fair Value of Company's Long-term Debt) (Details) - USD ($) $ in Millions | 8 Months Ended | |
May 13, 2018 | Sep. 03, 2017 | |
Debt Instrument [Line Items] | ||
Total long-term debt, carrying value | $ 6,611 | $ 6,659 |
Less current portion, carrying value | 119 | 86 |
Long-term debt, excluding current portion | 6,492 | 6,573 |
Total long-term debt, fair value | $ 6,493 | 6,753 |
1.7% Senior Notes Due December 2019 | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate, stated percentage | 1.70% | |
Debt instrument, maturity date | Dec. 15, 2019 | |
Total long-term debt, carrying value | $ 1,198 | 1,198 |
1.75% Senior Notes Due February 2020 | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate, stated percentage | 1.75% | |
Debt instrument, maturity date | Feb. 15, 2020 | |
Total long-term debt, carrying value | $ 499 | 498 |
2.15% Senior Notes Due May 2021 | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate, stated percentage | 2.15% | |
Debt instrument, maturity date | May 18, 2021 | |
Total long-term debt, carrying value | $ 995 | 994 |
2.25% Senior Notes Due February 2022 | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate, stated percentage | 2.25% | |
Debt instrument, maturity date | Feb. 15, 2022 | |
Total long-term debt, carrying value | $ 498 | 497 |
2.30% Senior Notes Due May 2022 | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate, stated percentage | 2.30% | |
Debt instrument, maturity date | May 18, 2022 | |
Total long-term debt, carrying value | $ 794 | 793 |
2.75% Senior Notes Due May 2024 | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate, stated percentage | 2.75% | |
Debt instrument, maturity date | May 18, 2024 | |
Total long-term debt, carrying value | $ 992 | 991 |
3.00% Senior Notes Due May 2027 | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate, stated percentage | 3.00% | |
Debt instrument, maturity date | May 18, 2027 | |
Total long-term debt, carrying value | $ 986 | 986 |
Other Long-term Debt | ||
Debt Instrument [Line Items] | ||
Total long-term debt, carrying value | $ 649 | $ 702 |
Equity and Comprehensive Inco31
Equity and Comprehensive Income - Additional Information - Dividends (Detail) - $ / shares | 3 Months Ended | 8 Months Ended | ||
May 13, 2018 | May 07, 2017 | May 13, 2018 | May 07, 2017 | |
Dividends Payable [Line Items] | ||||
Dividends declared | $ 0.57 | $ 7.50 | $ 1.57 | $ 8.40 |
Dividend Rate | ||||
Dividends Payable [Line Items] | ||||
Dividends declared | $ 0.57 | $ 0.50 |
Equity and Comprehensive Inco32
Equity and Comprehensive Income (Stock Repurchased During Period) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 8 Months Ended | ||
May 13, 2018 | May 07, 2017 | May 13, 2018 | May 07, 2017 | |
Equity [Abstract] | ||||
Shares repurchased (000's) | 290 | 266 | 1,337 | 1,486 |
Average price per share | $ 189.66 | $ 168.09 | $ 174.30 | $ 156.51 |
Total cost | $ 55 | $ 45 | $ 233 | $ 233 |
Equity and Comprehensive Inco33
Equity and Comprehensive Income Equity and Comprehensive Income - Additional Information - Stock Repurchase Programs (Details) $ in Millions | May 13, 2018USD ($) |
Equity [Abstract] | |
Stock repurchase program, remaining authorized repurchase amount | $ 2,516 |
Changes in Equity Attributes to
Changes in Equity Attributes to Costco and the Noncontrolling Interests of Consolidated Subsidiaries (Details) - USD ($) $ in Millions | 3 Months Ended | 8 Months Ended | ||
May 13, 2018 | May 07, 2017 | May 13, 2018 | May 07, 2017 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Equity at beginning of period | $ 11,079 | $ 12,332 | ||
Comprehensive income: | ||||
Net income | $ 762 | $ 706 | 2,126 | 1,782 |
Foreign-currency translation adjustment and other, net | (149) | 21 | (22) | (210) |
COMPREHENSIVE INCOME ATTRIBUTABLE TO COSTCO | 609 | 712 | 2,067 | 1,538 |
Comprehensive income (loss), net of tax, attributable to noncontrolling interest | 4 | 15 | 37 | 34 |
Comprehensive income | 613 | 727 | 2,104 | 1,572 |
Stock-based compensation | 434 | 404 | ||
Release of vested restricted stock units (RSUs), including tax effects | (217) | (165) | ||
Repurchase of common stock | (55) | (45) | (233) | (233) |
Cash dividends declared and other | (720) | (3,725) | ||
Equity at end of period | 12,447 | 10,185 | 12,447 | 10,185 |
Attributable to Costco | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Equity at beginning of period | 10,778 | 12,079 | ||
Comprehensive income: | ||||
Net income | 2,091 | 1,760 | ||
Foreign-currency translation adjustment and other, net | (24) | (222) | ||
COMPREHENSIVE INCOME ATTRIBUTABLE TO COSTCO | 2,067 | 1,538 | ||
Stock-based compensation | 434 | 404 | ||
Release of vested restricted stock units (RSUs), including tax effects | (217) | (165) | ||
Repurchase of common stock | (233) | (233) | ||
Cash dividends declared and other | (686) | (3,725) | ||
Equity at end of period | 12,143 | 9,898 | 12,143 | 9,898 |
Noncontrolling Interests | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Equity at beginning of period | 301 | 253 | ||
Comprehensive income: | ||||
Net income | 35 | 22 | ||
Foreign-currency translation adjustment and other, net | 2 | 12 | ||
Comprehensive income (loss), net of tax, attributable to noncontrolling interest | 37 | 34 | ||
Cash dividends declared and other | (34) | 0 | ||
Equity at end of period | $ 304 | $ 287 | $ 304 | $ 287 |
Stock-Based Compensation Plan35
Stock-Based Compensation Plans - Additional Information (Detail) $ in Millions | 8 Months Ended |
May 13, 2018USD ($)shares | |
Seventh Restated 2002 Incentive Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Additional number of shares authorized | 23,500,000 |
Restricted Stock Units (RSUs) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Additional number of shares authorized | 13,429,000 |
Number of shares available to be granted as RSUs | 8,262,000 |
Time-based RSUs awards outstanding | 7,305,000 |
Performance-based RSUs awards outstanding | 127,000 |
Outstanding performance-based RSUs awards granted, subject to achievement of performance targets | 205,000 |
Unrecognized compensation cost | $ | $ 819 |
Weighted-average recognition period | 1 year 8 months 12 days |
Stock-Based Compensation Plan36
Stock-Based Compensation Plans - Summary of RSU Transactions (Details) shares in Thousands | 8 Months Ended |
May 13, 2018$ / sharesshares | |
Number of units | |
Outstanding at September 3, 2017 | shares | 8,199 |
Granted | shares | 3,722 |
Vested and delivered | shares | (4,080) |
Forfeited | shares | (204) |
Outstanding at May 13, 2018 | shares | 7,637 |
Weighted average grant date fair value | |
Outstanding at September 3, 2017 | $ / shares | $ 128.15 |
Granted | $ / shares | 156.19 |
Vested and delivered | $ / shares | 129.49 |
Forfeited | $ / shares | 138.42 |
Outstanding at May 13, 2018 | $ / shares | $ 140.83 |
Stock-Based Compensation Plan37
Stock-Based Compensation Plans - Summary of Stock-Based Compensation Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 4 Months Ended | 8 Months Ended | 12 Months Ended | ||||||
May 13, 2018 | May 07, 2017 | May 13, 2018 | Dec. 31, 2017 | May 13, 2018 | May 07, 2017 | Sep. 01, 2019 | Sep. 02, 2018 | |||
Stock-based compensation expense before income taxes | $ 85 | $ 82 | $ 431 | $ 404 | ||||||
Less recognized income tax benefit | (19) | [1] | (26) | (98) | [1] | (132) | ||||
Stock-based compensation expense, net of income taxes | $ 66 | $ 56 | $ 333 | $ 272 | ||||||
Scenario, Plan [Member] | ||||||||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 35.00% | 21.00% | 25.60% | ||||||
[1] | For 2018, the tax benefit reflects the reduction in the U.S. federal statutory income tax rate from 35% to 21%. |
Income Taxes Income Taxes (Deta
Income Taxes Income Taxes (Details) - USD ($) $ in Millions | 4 Months Ended | 8 Months Ended | 12 Months Ended | ||
May 13, 2018 | Dec. 31, 2017 | May 13, 2018 | Sep. 01, 2019 | Sep. 02, 2018 | |
Net Tax Expense (Benefit), 2017 Tax Act | $ (131) | ||||
Tax Expense on Deemed Repatriated Earnings | 142 | ||||
Reduction in Foreign Tax Credits and Other | 43 | ||||
Income Tax Expense (Benefit), Continuing Operations, Adjustment of Deferred Tax (Asset) Liability | $ (160) | ||||
Scenario, Plan [Member] | |||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 35.00% | 21.00% | 25.60% |
Net Income per Common and Com39
Net Income per Common and Common Equivalent Share - Schedule of Earnings per Share Effect on Net Income and Weighted Average Number of Dilutive Potential Common Stock (Details) - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 8 Months Ended | ||
May 13, 2018 | May 07, 2017 | May 13, 2018 | May 07, 2017 | |
Earnings Per Share [Abstract] | ||||
Net income available to common stockholders used in basic and diluted net income per common share | $ 750 | $ 700 | $ 2,091 | $ 1,760 |
Weighted average number of common shares used in basic net income per common share | 438,740 | 438,817 | 438,576 | 438,650 |
RSUs and other | 2,975 | 2,239 | 2,807 | 2,095 |
Weighted average number of common shares and dilutive potential of common stock used in diluted net income per share | 441,715 | 441,056 | 441,383 | 440,745 |
Segment Reporting Information b
Segment Reporting Information by Segment (Detail) - USD ($) $ in Millions | 3 Months Ended | 8 Months Ended | 12 Months Ended | ||
May 13, 2018 | May 07, 2017 | May 13, 2018 | May 07, 2017 | Sep. 03, 2017 | |
Segment Reporting Information [Line Items] | |||||
Total revenue | $ 32,361 | $ 28,860 | $ 97,165 | $ 86,725 | $ 129,025 |
Operating income | 1,067 | 968 | 3,034 | 2,661 | 4,111 |
Depreciation and amortization | 327 | 320 | 1,006 | 929 | 1,370 |
Additions to property and equipment | 585 | 540 | 1,913 | 1,723 | 2,502 |
Net property and equipment | 19,178 | 17,535 | 19,178 | 17,535 | 18,161 |
Total assets | 39,605 | 35,631 | 39,605 | 35,631 | 36,347 |
Operating Segments [Member] | UNITED STATES | |||||
Segment Reporting Information [Line Items] | |||||
Total revenue | 23,475 | 21,172 | 69,975 | 63,313 | 93,889 |
Operating income | 682 | 654 | 1,818 | 1,680 | 2,644 |
Depreciation and amortization | 242 | 245 | 756 | 712 | 1,044 |
Additions to property and equipment | 468 | 363 | 1,323 | 1,147 | 1,714 |
Net property and equipment | 12,924 | 12,139 | 12,924 | 12,139 | 12,339 |
Total assets | 27,062 | 24,356 | 27,062 | 24,356 | 24,068 |
Operating Segments [Member] | CANADA | |||||
Segment Reporting Information [Line Items] | |||||
Total revenue | 4,647 | 4,069 | 14,163 | 12,397 | 18,775 |
Operating income | 210 | 172 | 652 | 543 | 841 |
Depreciation and amortization | 31 | 28 | 94 | 81 | 124 |
Additions to property and equipment | 42 | 40 | 156 | 206 | 277 |
Net property and equipment | 1,829 | 1,612 | 1,829 | 1,612 | 1,820 |
Total assets | 4,248 | 4,014 | 4,248 | 4,014 | 4,471 |
Operating Segments [Member] | Other International Operations | |||||
Segment Reporting Information [Line Items] | |||||
Total revenue | 4,239 | 3,619 | 13,027 | 11,015 | 16,361 |
Operating income | 175 | 142 | 564 | 438 | 626 |
Depreciation and amortization | 54 | 47 | 156 | 136 | 202 |
Additions to property and equipment | 75 | 137 | 434 | 370 | 511 |
Net property and equipment | 4,425 | 3,784 | 4,425 | 3,784 | 4,002 |
Total assets | $ 8,295 | $ 7,261 | $ 8,295 | $ 7,261 | $ 7,808 |