Costco 2006 Annual Report Download - page 30

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Net cash provided by operating activities totaled $1.83 billion in fiscal 2006 compared to $1.78 billion in
fiscal 2005, an increase of $51 million. This increase is attributable to higher net income and an
increase in cash flow from operating assets and liabilities of $338 million, offset by an increase in net
merchandise inventories (merchandise inventory less accounts payable) of $388 million.
Net cash used in investing activities totaled $1.15 billion in fiscal 2006 compared to $2.05 billion in
fiscal 2005. The decrease relates primarily to a decrease in the net investment in short-term
investments of $1.16 billion, offset by an increase of $217 million in additions to property and
equipment related to warehouse expansion and remodel projects. The decrease in the net investment
in short-term investments was due primarily to our stock repurchase activity.
Net cash used in financing activities totaled $1.23 billion in fiscal 2006 compared to $519 million in
fiscal 2005. The increase of $715 million primarily resulted from the repurchase of common stock in
fiscal 2006, which used $1.44 billion of cash, compared to $413 million in fiscal 2005. In addition, $304
million was used in fiscal 2005 for the repayment of the 7
1
⁄
8
% Senior Notes.
Dividends
In April 2006, our quarterly cash dividend was increased from $0.115 to $0.13 per share. Our cash
dividends paid in fiscal 2006 totaled $0.49 per share. In fiscal 2005, we paid quarterly cash dividends
totaling $0.43 per share. Our current quarterly dividend rate is $0.13 per share or $0.52 per share on
an annualized basis.
Contractual Obligations
Our commitments at year end to make future payments under contractual obligations were as follows,
as of September 3, 2006:
Payments Due by Period
Contractual obligations Total Less than
1 year 1to3
years 4to5
years After
5 years
Long-term debt(1) ........ $ 523,391 $ 317,959 $ 57,358 $ 60,046 $ 88,028
Capital lease obligations
and other(1) .......... 20,928 8,152 4,666 2,034 6,076
Operating leases(2) ...... 1,647,683 130,259 237,373 200,052 1,079,999
Purchase obligations
(merchandise)(3) ...... 3,538,948 3,538,096 852 — —
Purchase obligations
(building, equipment,
services and other)(4) . . 385,650 350,721 29,563 5,366 —
Other(5) ................ 11,809 1,703 2,852 2,692 4,562
Total ............... $6,128,409 $4,346,890 $332,664 $270,190 $1,178,665
(1) Amounts include contractual interest payments.
(2) Operating lease obligations have been reduced by $162,120 to reflect sub-lease income.
(3) Includes open merchandise purchase orders.
(4) The amounts exclude minor outsourced services negotiated at the individual warehouse level that
are not significant and generally contain clauses allowing for cancellation without significant penalty.
(5) Consists of asset retirement and deferred compensation obligations.
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