Costco Wholesale Corporation: 10-K Risk Factor Changes

The following table shows the amounts used in computing net income per share and the weighted average number of shares of basic and of potentially dilutive common shares outstanding (shares in 000’s): 202320222021Net income attributable to Costco$6,292 $5,844 $5,007 Weighted average basic shares443,854 443,651 443,089 RSUs598 1,106 1,257 Weighted average diluted shares444,452 444,757 444,346 Net income attributable to Costco Weighted average basic shares Weighted average diluted shares

The following table shows the amounts used in computing net income per share and the weighted average number of shares of basic and of potentially dilutive common shares outstanding (shares in 000’s): 202220212020Net income attributable to Costco$5,844 $5,007 $4,002 Weighted average basic shares443,651 443,089 442,297 RSUs1,106 1,257 1,604 Weighted average diluted shares444,757 444,346 443,901 Net income attributable to Costco Weighted average basic shares Weighted average diluted shares

Assets and Liabilities Measured at Fair Value on a Recurring Basis The table below presents information regarding the Company’s 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 such fair value. Level 220232022Investment in government and agency securities$633 $529 Forward foreign-exchange contracts, in asset position(1)18 34 Forward foreign-exchange contracts, in (liability) position(1)(7)(2)Total$644 $561 Forward foreign-exchange contracts, in asset position(1) Forward foreign-exchange contracts, in (liability) position(1) ____________ (1)The asset and the liability values are included in other current assets and other current liabilities, respectively, in the consolidated balance sheets. At September 3, 2023, and August 28, 2022, the Company did not hold any Level 1 or 3 financial assets or liabilities that were measured at fair value on a recurring basis. There were no transfers between levels during 2023 or 2022. 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 measured at amortized cost and long-lived nonfinancial assets. These assets are measured at fair value if determined to be impaired. Please see Note 1 for additional information. 48 48 48 Table of Contents Table of Contents

Assets and Liabilities Measured at Fair Value on a Recurring Basis The table below presents information regarding the Company’s 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 such fair value. Level 220222021Investment in government and agency securities(1)$529 $393 Forward foreign-exchange contracts, in asset position(2)34 17 Forward foreign-exchange contracts, in (liability) position(2)(2)(2)Total$561 $408 Investment in government and agency securities(1) Forward foreign-exchange contracts, in asset position(2) Forward foreign-exchange contracts, in (liability) position(2) ____________ (1)At August 29, 2021, $12 cash and cash equivalents and $381 short-term investments are included in the consolidated balance sheets. (2)The asset and the liability values are included in other current assets and other current liabilities, respectively, in the consolidated balance sheets. At August 28, 2022, and August 29, 2021, the Company did not hold any Level 1 or 3 financial assets or liabilities that were measured at fair value on a recurring basis. There were no transfers between levels during 2022 or 2021. 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 measured 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 nonfinancial assets during 2022 and in 2021 they were immaterial.

The following graph compares the cumulative total shareholder return assuming reinvestment of dividends on an investment of $100 in Costco common stock, S&P 500 Index, S&P Retail Select Index, and the previously selected S&P 500 Retail Index over the five years from September 2, 2018, through September 3, 2023. The S&P Retail Select Index will prospectively replace in the graph the S&P 500 Retail Index to show a broader representation of industry performance and a broader index of peers. The following graph provides information concerning average sales per warehouse over a 10-year period. Average Sales Per Warehouse*(Sales In Millions)Year Opened# of Whses202323$151 202223$150 158 202120$140 158 172 202013$132 152 184 193 201920$129 138 172 208 216 201821$116 119 141 172 202 214 201726$121 142 158 176 206 237 247 201629$87 97 118 131 145 173 204 212 201523$83 85 94 112 122 136 163 189 199 2014 & Before663$164 165 165 170 184 191 201 228 259 268 Totals861$164 $162 $159 $163 $176 $182 $192 $217 $245 $252 2014201520162017201820192020202120222023Fiscal Year*First year sales annualized.2017 and 2023 were 53-week fiscal years but have been normalized for purposes of comparability Item 6—Reserved 19 19 19 Table of Contents Table of Contents Item 7—Management's Discussion and Analysis of Financial Conditions and Results of Operations (amounts in millions, except per share, share, membership fee, and warehouse count data) The following Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to promote understanding of the results of operations and financial condition. MD&A is provided as a supplement to, and should be read in conjunction with, our consolidated financial statements and the accompanying Notes to Financial Statements (Part II, Item 8 of this Form 10-K). This section generally discusses the results of operations for 2023 compared to 2022. For discussion related to the results of operations and changes in financial condition for 2022 compared to 2021 refer to Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations in our fiscal year 2022 Form 10-K, which was filed with the United States Securities and Exchange Commission (SEC) on October 5, 2022. Overview We believe that the most important driver of our profitability is increasing net sales, particularly comparable sales. Net sales includes our core merchandise categories (foods and sundries, non-foods, and fresh foods), warehouse ancillary (gasoline, pharmacy, optical, food court, hearing aids, and tire installation) and other businesses (e-commerce, business centers, travel and other). Comparable sales is defined as net sales from warehouses open for more than one year, including remodels, relocations and expansions, and sales related to e-commerce websites operating for more than one year. The measure is intended as supplemental information and is not a substitute for net sales presented in accordance with U.S. generally accepted accounting principles (U.S. GAAP). Comparable sales growth is achieved through increasing shopping frequency from new and existing members and the amount they spend on each visit (average ticket). Sales comparisons can also be particularly influenced by certain factors that are beyond our control: fluctuations in currency exchange rates (with respect to our international operations); inflation or deflation and changes in the cost of gasoline and associated competitive conditions. The higher our comparable sales exclusive of these items, the more we can leverage our SG&A expenses, reducing them as a percentage of sales and enhancing profitability. Generating comparable sales growth is foremost a question of making available to our members the right merchandise at the right prices, a skill that we believe we have repeatedly demonstrated over the long-term. Another substantial factor in net sales growth is the health of the economies in which we do business, including the effects of inflation or deflation, especially the United States. Net sales growth and gross margins are also impacted by our competition, which is vigorous and widespread, across a wide range of global, national and regional wholesalers and retailers, including those with e-commerce operations. While we cannot control or reliably predict general economic health or changes in competition, we believe that we have been successful historically in adapting our business to these changes, such as through adjustments to our pricing and merchandise mix, including increasing the penetration of our private-label items, and through online offerings. Our philosophy is to provide our members with quality goods and services at competitive prices. We do not focus in the short-term on maximizing prices charged, but instead seek to maintain what we believe is a perception among our members of our “pricing authority” – consistently providing the most competitive values. Merchandise costs in 2023 continued to be impacted by inflation, however at a lower rate than what we experienced in 2022. The impact to our net sales and gross margin is influenced in part by our merchandising and pricing strategies in response to cost increases. Those strategies can include, but are not limited to, working with our suppliers to share in absorbing cost increases, earlier-than-usual purchasing and in greater volumes, as well as passing cost increases on to our members. Our investments in merchandise pricing may include reducing prices on merchandise to drive sales or meet competition and holding prices steady despite cost increases instead of passing the increases on to our members, all negatively impacting gross margin and gross margin as a percentage of net sales (gross margin percentage). 20 20 20 Table of Contents Table of Contents We believe our gasoline business enhances traffic in our warehouses, but it generally has a lower gross margin percentage and lower SG&A expense, relative to our non-gasoline businesses. A higher penetration of gasoline sales will generally lower our gross margin percentage. Rapidly changing gasoline prices may significantly impact our near-term net sales growth. Generally, rising gasoline prices benefit net sales growth which, given the higher sales base, negatively impacts our gross margin percentage but decreases our SG&A expenses as a percentage of net sales. A decline in gasoline prices has the inverse effect. Government actions in various countries relating to tariffs, particularly China and the United States, have affected the costs of some of our merchandise. The degree of our exposure is dependent on (among other things) the type of goods, rates imposed, and timing of the tariffs. Higher tariffs could adversely impact our results. We also achieve net sales growth by opening new warehouses. As our warehouse base grows, available and desirable sites become more difficult to secure, and square footage growth becomes a comparatively less substantial component of growth. The negative aspects of such growth, however, including lower initial operating profitability relative to existing warehouses and cannibalization of sales at existing warehouses when openings occur in existing markets, are continuing to decline in significance as they relate to the results of our total operations. Our rate of square footage growth is generally higher in foreign markets, due to the smaller base in those markets, and we expect that to continue. Our e-commerce business, domestically and internationally, generally has a lower gross margin percentage than our warehouse operations. The membership format is an integral part of our business and has a significant effect on our profitability. This format is designed to reinforce member loyalty and provide continuing fee revenue. The extent to which we achieve growth in our membership base, increase the penetration of our Executive members, and sustain high renewal rates materially influences our profitability. Our paid-membership growth rate may be adversely impacted when warehouse openings occur in existing markets as compared to new markets. Our financial performance depends heavily on controlling costs. While we believe that we have achieved successes in this area, some significant costs are partially outside our control, particularly health care and utility expenses. With respect to the compensation of our employees, our philosophy is not to seek to minimize their wages and benefits. Rather, we believe that achieving our longer-term objectives of reducing employee turnover and enhancing employee satisfaction requires maintaining compensation levels that are better than the industry average for much of our workforce. This may cause us, for example, to absorb costs that other employers might seek to pass through to their workforces. Because our business operates on very low margins, modest changes in various items in the consolidated statements of income, particularly merchandise costs and SG&A expenses, can have substantial impacts on net income. Our operating model is generally the same across our U.S., Canadian, and Other International operating segments (see Note 11 to the consolidated financial statements included in Item 8 of this Report). Certain operations in the Other International segment have relatively higher rates of square footage growth, lower wage and benefit costs as a percentage of sales, less or no direct membership warehouse competition, or lack e-commerce or business delivery. In discussions of our consolidated operating results, we refer to the impact of changes in foreign currencies relative to the U.S. dollar, which are differences between the foreign-exchange rates we use to convert the financial results of our international operations from local currencies into U.S. dollars. This impact of foreign-exchange rate changes is calculated based on the difference between the current and prior period's currency exchange rates. The impact of changes in gasoline prices on net sales is calculated based on the difference between the current and prior period's average price per gallon sold. Results expressed excluding the impacts of foreign exchange and gasoline prices should be reviewed in conjunction with results reported in accordance with U.S. GAAP. 21 21 21 Table of Contents Table of Contents Our fiscal year ends on the Sunday closest to August 31. References to 2023 relate to the 53-week fiscal year ended September 3, 2023. References to 2022 and 2021 relate to the 52-week fiscal years ended August 28, 2022, and August 29, 2021. Certain percentages presented are calculated using actual results prior to rounding. Unless otherwise noted, references to net income relate to net income attributable to Costco. Highlights for 2023 versus 2022 include: •We opened 26 new warehouses, including three relocations: 13 net new in the U.S. and 10 new in our Other International segment. We opened the same number of new warehouses, including relocations, in 2022; •Net sales increased 7% to $237,710, driven by a 3% increase in comparable sales, sales at new warehouses opened in 2022 and 2023, and the benefit of one additional week of sales in 2023; •Membership fee revenue increased 8% to $4,580, driven by new member sign-ups, upgrades to Executive membership, and one additional week of membership fees in 2023; •Gross margin percentage increased nine basis points, driven primarily by a smaller LIFO charge in 2023 compared to 2022 and our core merchandise categories. This was partially offset by charges of $391, predominantly related to the discontinuation of our charter shipping activities; •SG&A expenses as a percentage of net sales increased 20 basis points, due to increased costs in warehouse operations and other businesses, primarily wage increases effective in March and July 2022, and March 2023, as well as lower sales growth; •The effective tax rate in 2023 was 25.9%, compared to 24.6% in 2022; •Net income increased 8% to $6,292, or $14.16 per diluted share compared to $5,844, or $13.14 per diluted share in 2022; •In January 2023, the Board of Directors authorized a new share repurchase program in the amount of $4,000; and •In April 2023, the Board of Directors approved a 13% increase in the quarterly cash dividend. 22 22 22 Table of Contents Table of Contents

The following graph compares the cumulative total shareholder return assuming reinvestment of dividends on an investment of $100 in Costco common stock, S&P 500 Index, and the S&P 500 Retail Index over the five years from September 3, 2017, through August 28, 2022. The following graph provides information concerning average sales per warehouse over a 10-year period. Average Sales Per Warehouse*(Sales In Millions)Year Opened# of Whses202223$150 202120$140 158 202013$132 152 184 201920$129 138 172 208 201821$116 119 141 172 202 201726$121 142 158 176 206 237 201629$87 97 118 131 145 173 204 201523$83 85 94 112 122 136 163 189 201430$108 109 115 125 140 144 155 182 208 2013 & Before633$160 167 168 167 173 186 193 203 230 261 Totals838160 164 162 159 163 176 182 192 217 245 2013201420152016201720182019202020212022Fiscal Year*First year sales annualized.2017 was a 53-week fiscal year but it has been normalized for purposes of comparability Item 6—Reserved 21 21 21 Table of Contents Table of Contents Item 7—Management's Discussion and Analysis of Financial Conditions and Results of Operations (amounts in millions, except per share, share, membership fee, and warehouse count data) The following Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to promote understanding of the results of operations and financial condition. MD&A is provided as a supplement to, and should be read in conjunction with, our consolidated financial statements and the accompanying Notes to Financial Statements (Part II, Item 8 of this Form 10-K). This section generally discusses the results of operations for 2022 compared to 2021. For discussion related to the results of operations and changes in financial condition for 2021 compared to 2020 refer to Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations in our fiscal year 2021 Form 10-K, which was filed with the United States Securities and Exchange Commission (SEC) on October 6, 2021. Overview We believe that the most important driver of our profitability is increasing net sales, particularly comparable sales. Net sales includes our core merchandise categories (foods and sundries, non-foods, and fresh foods), warehouse ancillary (gasoline, pharmacy, optical, food court, hearing aids, and tire installation) and other businesses (e-commerce, business centers, travel and other). We define comparable sales as net sales from warehouses open for more than one year, including remodels, relocations and expansions, and sales related to e-commerce websites operating for more than one year. Comparable sales growth is achieved through increasing shopping frequency from new and existing members and the amount they spend on each visit (average ticket). Sales comparisons can also be particularly influenced by certain factors that are beyond our control: fluctuations in currency exchange rates (with respect to our international operations); inflation and changes in the cost of gasoline and associated competitive conditions. The higher our comparable sales exclusive of these items, the more we can leverage our SG&A expenses, reducing them as a percentage of sales and enhancing profitability. Generating comparable sales growth is foremost a question of making available to our members the right merchandise at the right prices, a skill that we believe we have repeatedly demonstrated over the long-term. Another substantial factor in net sales growth is the health of the economies in which we do business, including the effects of inflation or deflation, especially the United States. Net sales growth and gross margins are also impacted by our competition, which is vigorous and widespread, across a wide range of global, national and regional wholesalers and retailers, including those with e-commerce operations. While we cannot control or reliably predict general economic health or changes in competition, we believe that we have been successful historically in adapting our business to these changes, such as through adjustments to our pricing and merchandise mix, including increasing the penetration of our private-label items, and through online offerings. Our philosophy is to provide our members with quality goods and services at competitive prices. We do not focus in the short-term on maximizing prices charged, but instead seek to maintain what we believe is a perception among our members of our “pricing authority” – consistently providing the most competitive values. Merchandise costs in 2022 were impacted by inflation higher than what we have experienced in recent years. The impact to our net sales and gross margin is influenced in part by our merchandising and pricing strategies in response to cost increases. Those strategies can include, but are not limited to, working with our suppliers to share in absorbing cost increases, earlier-than-usual purchasing and in greater volumes, offering seasonal merchandise outside its season, as well as passing cost increases on to our members. Our investments in merchandise pricing may include reducing prices on merchandise to drive sales or meet competition and holding prices steady despite cost increases instead of passing the increases on to our members, all negatively impacting gross margin and gross margin as a percentage of net sales (gross margin percentage). We believe our gasoline business enhances traffic in our warehouses, but it generally has a lower gross margin percentage relative to our non-gasoline business. It also has lower SG&A expenses as a percent of net sales compared to our non-gasoline business. A higher penetration of gasoline sales will generally lower our gross margin percentage. Rapidly changing gasoline prices may significantly impact our near- 22 22 22 Table of Contents Table of Contents term net sales growth. Generally, rising gasoline prices benefit net sales growth which, given the higher sales base, negatively impacts our gross margin percentage but decreases our SG&A expenses as a percentage of net sales. A decline in gasoline prices has the inverse effect. Additionally, actions in various countries, particularly China and the United States, have affected the costs of some of our merchandise. The degree of our exposure is dependent on (among other things) the type of goods, rates imposed, and timing of the tariffs. Higher tariffs could adversely impact our results. We also achieve net sales growth by opening new warehouses. As our warehouse base grows, available and desirable sites become more difficult to secure, and square footage growth becomes a comparatively less substantial component of growth. The negative aspects of such growth, however, including lower initial operating profitability relative to existing warehouses and cannibalization of sales at existing warehouses when openings occur in existing markets, are continuing to decline in significance as they relate to the results of our total operations. Our rate of square footage growth is generally higher in foreign markets, due to the smaller base in those markets, and we expect that to continue. Our e-commerce business growth, domestically and internationally, has also increased our sales but it generally has a lower gross margin percentage relative to our warehouse operations. E-commerce sales growth slowed in 2022 compared to 2021 and 2020. The membership format is an integral part of our business and has a significant effect on our profitability. This format is designed to reinforce member loyalty and provide continuing fee revenue. The extent to which we achieve growth in our membership base, increase the penetration of our Executive members, and sustain high renewal rates materially influences our profitability. Our paid membership growth rate may be adversely impacted when warehouse openings occur in existing markets as compared to new markets. Our financial performance depends heavily on controlling costs. While we believe that we have achieved successes in this area, some significant costs are partially outside our control, particularly health care and utility expenses. With respect to the compensation of our employees, our philosophy is not to seek to minimize their wages and benefits. Rather, we believe that achieving our longer-term objectives of reducing employee turnover and enhancing employee satisfaction requires maintaining compensation levels that are better than the industry average for much of our workforce. This may cause us, for example, to absorb costs that other employers might seek to pass through to their workforces. Because our business operates on very low margins, modest changes in various items in the consolidated statements of income, particularly merchandise costs and SG&A expenses, can have substantial impacts on net income. Our operating model is generally the same across our U.S., Canadian, and Other International operating segments (see Note 11 to the consolidated financial statements included in Item 8 of this Report). Certain operations in the Other International segment have relatively higher rates of square footage growth, lower wage and benefit costs as a percentage of sales, less or no direct membership warehouse competition, or lack e-commerce or business delivery. In discussions of our consolidated operating results, we refer to the impact of changes in foreign currencies relative to the U.S. dollar, which are the differences between the foreign-exchange rates we use to convert the financial results of our international operations from local currencies into U.S. dollars. This impact of foreign-exchange rate changes is calculated based on the difference between the current period's currency exchange rates and that of the comparable prior period. The impact of changes in gasoline prices on net sales is calculated based on the difference between the current period's average price per gallon sold and that of the comparable prior period. Our fiscal year ends on the Sunday closest to August 31. References to 2022, 2021, and 2020 relate to the 52-week fiscal years ended August 28, 2022, August 29, 2021, and August 30, 2020, respectively. Certain percentages presented are calculated using actual results prior to rounding. Unless otherwise noted, references to net income relate to net income attributable to Costco. 23 23 23 Table of Contents Table of Contents Highlights for 2022 versus 2021 include: •We opened 26 new warehouses, including 3 relocations: 14 net new in the U.S., 2 net new in our Canadian segment, and 7 new in our Other International segment, compared to 22 new warehouses, including 2 relocations in 2021; •Net sales increased 16% to $222,730 driven by a 14% increase in comparable sales and sales at new warehouses opened in 2021 and 2022; •Membership fee revenue increased 9% to $4,224, driven by new member sign-ups, upgrades to Executive membership, and an increase in our renewal rate; •Gross margin percentage decreased 65 basis points, driven primarily by our core merchandise categories and a LIFO charge for higher merchandise costs; •SG&A expenses as a percentage of net sales decreased 77 basis points, primarily due to leveraging increased sales and ceasing of incremental wages related to COVID-19, despite additional wage and benefits increases; •We incurred a one-time $77 pretax charge, primarily related to granting our employees one additional day of paid time off in March 2022; •The effective tax rate in 2022 was 24.6% compared to 24.0% in 2021; •Net income increased 17% to $5,844, or $13.14 per diluted share compared to $5,007, or $11.27 per diluted share in 2021; •In June 2022, the Company paid a cash dividend of $208 and purchased the remaining equity interest of its Taiwan operations from its former joint-venture partner for $842, totaling $1,050 in the aggregate; and •In April 2022, the Board of Directors approved an increase in the quarterly cash dividend from $0.79 to $0.90 per share. COVID-19 The COVID-19 pandemic continued to impact our business during 2022, albeit to a lesser extent. COVID-related and other supply and logistics constraints have continued to adversely affect some merchandise categories and are expected to do so for the foreseeable future. During 2021, we paid $515 in incremental wages related to COVID-19, which ceased in February 2021. 24 24 24 Table of Contents Table of Contents

The following table summarizes our significant sources and uses of cash and cash equivalents: 202320222021Net cash provided by operating activities$11,068 $7,392 $8,958 Net cash used in investing activities(4,972)(3,915)(3,535)Net cash used in financing activities(2,614)(4,283)(6,488) 25 25 25 Table of Contents Table of Contents Our primary sources of liquidity are cash flows from operations, cash and cash equivalents, and short-term investments. Cash and cash equivalents and short-term investments were $15,234 and $11,049 at September 3, 2023, and August 28, 2022. Of these balances, unsettled credit and debit card receivables represented $2,282 and $2,010. These receivables generally settle within four days. Changes in foreign exchange rates impacted cash and cash equivalents positively by $15 and $46 in 2023 and 2021, and negatively by $249 in 2022. Material contractual obligations arising in the normal course of business primarily consist of purchase obligations, long-term debt and related interest payments, leases, and construction and land purchase obligations. See Notes 4 and 5 to the consolidated financial statements included in Item 8 of this Report for amounts outstanding on September 3, 2023, related to debt and leases. Purchase obligations consist of contracts primarily related to merchandise, equipment, and third-party services, the majority of which are due in the next 12 months. Construction and land-purchase obligations consist of contracts primarily related to the development and opening of new and relocated warehouses, the majority of which (other than leases) are due in the next 12 months. Management believes that our cash and investment position and operating cash flows, with capacity under existing and available credit agreements, will be sufficient to meet our liquidity and capital requirements for the foreseeable future. We believe that our U.S. current and projected asset position is sufficient to meet our U.S. liquidity requirements.

The following table summarizes our significant sources and uses of cash and cash equivalents: 202220212020Net cash provided by operating activities$7,392 $8,958 $8,861 Net cash used in investing activities(3,915)(3,535)(3,891)Net cash used in financing activities(4,283)(6,488)(1,147) Our primary sources of liquidity are cash flows generated from our operations, cash and cash equivalents, and short-term investments. Cash and cash equivalents and short-term investments were $11,049 and $12,175 at the end of 2022 and 2021, respectively. Of these balances, unsettled credit and debit card receivables represented approximately $2,010 and $1,816 at the end of 2022 and 2021. These receivables generally settle within four days. Changes in foreign exchange rates impacted cash and cash equivalents negatively by $249 in 2022, and positively by $46 and $70 in 2021 and 2020. Material contractual obligations arising in the normal course of business primarily consist of purchase obligations, long-term debt and related interest payments, leases, and construction and land purchase obligations. See Notes 4 and 5 to the consolidated financial statements included in Item 8 of this Report for amounts outstanding on August 28, 2022, related to debt and leases. Purchase obligations consist of contracts primarily related to merchandise, equipment, and third-party services, the majority of which are due in the next 12 months. Construction and land purchase obligations consist of contracts primarily related to the development and opening of new and relocated warehouses, the majority of which (other than leases) are due in the next 12 months. Management believes that our cash and investment position and operating cash flows with capacity under existing and available credit agreements will be sufficient to meet our liquidity and capital requirements for the foreseeable future. We believe that our U.S. current and projected asset position is sufficient to meet our U.S. liquidity requirements.

Net cash used in investing activities totaled $4,972 in 2023, compared to $3,915 in 2022, and is primarily related to capital expenditures. Net cash flows from investing activities also includes purchases and maturities of short-term investments. Capital Expenditures Our primary requirements for capital are acquiring land, buildings, and equipment for new and remodeled warehouses. Capital is also required for information systems, manufacturing and distribution facilities, initial warehouse operations, and working capital. In 2023, we spent $4,323 on capital expenditures, and it is our current intention to spend approximately $4,400 to $4,600 during fiscal 2024. These expenditures are expected to be financed with cash from operations, existing cash and cash equivalents, and short-term investments. We opened 26 new warehouses, including three relocations, in 2023, and plan to open up to 28 additional new warehouses, including one relocation, in 2024. There can be no assurance that current expectations will be realized, and plans are subject to change upon further review of our capital expenditure needs and the economic environment.

Net cash used in investing activities totaled $3,915 in 2022, compared to $3,535 in 2021, and is primarily related to capital expenditures. Net cash flows from investing activities also includes purchases and maturities of short-term investments. Capital Expenditures Our primary requirements for capital are acquiring land, buildings, and equipment for new and remodeled warehouses. Capital is also required for information systems, manufacturing and distribution facilities, initial warehouse operations, and working capital. In 2022, we spent $3,891 on capital expenditures, and it is our current intention to spend approximately $3,800 to $4,000 during fiscal 2023. These expenditures are expected to be financed with cash from operations, existing cash and cash equivalents, and short-term investments. We opened 26 new warehouses, including three relocations, in 2022, and plan to open approximately up to 29 additional new warehouses, including four relocations, in 2023. There can be no assurance that current expectations will be realized, and plans are subject to change upon further review of our capital expenditure needs or based on the economic environment.

Common StockAdditionalPaid-inCapitalAccumulatedOtherComprehensiveIncome (Loss)RetainedEarningsTotal CostcoStockholders’EquityNoncontrollingInterestsTotalEquity Shares (000’s)AmountBALANCE AT AUGUST 30, 2020441,255 $4 $6,698 $(1,297)$12,879 $18,284 $421 $18,705 Net income— — — — 5,007 5,007 72 5,079 Foreign-currency translation adjustment and other, net— — — 160 — 160 21 181 Stock-based compensation— — 668 — — 668 — 668 Release of vested restricted stock units (RSUs), including tax effects1,928 — (312)— — (312)— (312)Repurchases of common stock(1,358)— (23)— (472)(495)— (495)Cash dividends declared— — — — (5,748)(5,748)— (5,748)BALANCE AT AUGUST 29, 2021441,825 4 7,031 (1,137)11,666 17,564 514 18,078 Net income— — — — 5,844 5,844 71 5,915 Foreign-currency translation adjustment and other, net— — — (686)— (686)(35)(721)Stock-based compensation— — 728 — — 728 — 728 Release of vested RSUs, including tax effects1,702 — (363)— — (363)— (363)Dividend to noncontrolling interest— — — — — — (208)(208)Acquisition of noncontrolling interest— — (499)(6)— (505)(337)(842)Repurchases of common stock(863)— (15)— (427)(442)— (442)Cash dividends declared and other— (2)2 — (1,498)(1,498)— (1,498)BALANCE AT AUGUST 28, 2022442,664 2 6,884 (1,829)15,585 20,642 5 20,647 Net income— — — — 6,292 6,292 — 6,292 Foreign-currency translation adjustment and other, net— — — 24 — 24 — 24 Stock-based compensation— — 778 — — 778 — 778 Release of vested RSUs, including tax effects1,470 — (303)— — (303)— (303)Repurchases of common stock(1,341)— (24)— (653)(677)— (677)Cash dividends declared and other— — 5 — (1,703)(1,698)(5)(1,703)BALANCE AT SEPTEMBER 3, 2023442,793 $2 $7,340 $(1,805)$19,521 $25,058 $— $25,058 Net income Foreign-currency translation adjustment and other, net Stock-based compensation Release of vested restricted stock units (RSUs), including tax effects Repurchases of common stock Net income Foreign-currency translation adjustment and other, net Stock-based compensation Release of vested RSUs, including tax effects Repurchases of common stock Net income Foreign-currency translation adjustment and other, net Stock-based compensation Release of vested RSUs, including tax effects Repurchases of common stock The accompanying notes are an integral part of these consolidated financial statements.37 The accompanying notes are an integral part of these consolidated financial statements.37 The accompanying notes are an integral part of these consolidated financial statements. 37 Table of Contents Table of Contents

Common StockAdditionalPaid-inCapitalAccumulatedOtherComprehensiveIncome (Loss)RetainedEarningsTotal CostcoStockholders’EquityNoncontrollingInterestsTotalEquity Shares (000’s)AmountBALANCE AT SEPTEMBER 1, 2019439,625 $4 $6,417 $(1,436)$10,258 $15,243 $341 $15,584 Net income— — — — 4,002 4,002 57 4,059 Foreign-currency translation adjustment and other, net— — — 139 — 139 23 162 Stock-based compensation— — 621 — — 621 — 621 Release of vested restricted stock units (RSUs), including tax effects2,273 — (330)— — (330)— (330)Repurchases of common stock(643)— (10)— (188)(198)— (198)Cash dividends declared and other— — — — (1,193)(1,193)— (1,193)BALANCE AT AUGUST 30, 2020441,255 4 6,698 (1,297)12,879 18,284 421 18,705 Net income— — — — 5,007 5,007 72 5,079 Foreign-currency translation adjustment and other, net— — — 160 — 160 21 181 Stock-based compensation— — 668 — — 668 — 668 Release of vested RSUs, including tax effects1,928 — (312)— — (312)— (312)Repurchases of common stock(1,358)— (23)— (472)(495)— (495)Cash dividends declared— — — — (5,748)(5,748)— (5,748)BALANCE AT AUGUST 29, 2021441,825 4 7,031 (1,137)11,666 17,564 514 18,078 Net income— — — — 5,844 5,844 71 5,915 Foreign-currency translation adjustment and other, net— — — (686)— (686)(35)(721)Stock-based compensation— — 728 — — 728 — 728 Release of vested RSUs, including tax effects1,702 — (363)— — (363)— (363)Dividend to noncontrolling interest— — — — — — (208)(208)Acquisition of noncontrolling interest— — (499)(6)— (505)(337)(842)Repurchases of common stock(863)— (15)— (427)(442)— (442)Cash dividends declared and other— (2)2 — (1,498)(1,498)— (1,498)BALANCE AT AUGUST 28, 2022442,664 $2 $6,884 $(1,829)$15,585 $20,642 $5 $20,647 Net income Foreign-currency translation adjustment and other, net Stock-based compensation Release of vested restricted stock units (RSUs), including tax effects Repurchases of common stock Cash dividends declared and other Net income Foreign-currency translation adjustment and other, net Stock-based compensation Release of vested RSUs, including tax effects Repurchases of common stock Net income Foreign-currency translation adjustment and other, net Stock-based compensation Release of vested RSUs, including tax effects Repurchases of common stock The accompanying notes are an integral part of these consolidated financial statements.39 The accompanying notes are an integral part of these consolidated financial statements.39 The accompanying notes are an integral part of these consolidated financial statements. 39 Table of Contents Table of Contents

Short-Term Borrowings The Company maintains various short-term bank credit facilities, with a borrowing capacity of $1,234 and $1,257, in 2023 and 2022. Short-term borrowings outstanding were immaterial at the end of 2023 and 2022. Long-Term Debt The Company's long-term debt consists primarily of Senior Notes, described below. The Company at its option may redeem the Senior Notes at any time, in whole or in part, at a redemption price plus accrued interest. The redemption price is equal to the greater of 100% of the principal amount or the sum of the present value of the remaining scheduled payments of principal and interest to maturity. Additionally, upon certain events, a holder has the right to require a repurchase at a price of 101% of the principal amount plus accrued and unpaid interest. Interest on all outstanding long-term debt is payable semi-annually. The estimated fair value of Senior Notes is valued using Level 2 inputs. Other long-term debt consists of Guaranteed Senior Notes issued by the Company's Japanese subsidiary, valued using Level 3 inputs. In May 2023, the Japanese subsidiary repaid $75 of its Guaranteed Senior Notes. At the end of 2023 and 2022, the fair value of the Company's long-term debt, including the current portion, was approximately $5,738 and $6,033. The carrying value of long-term debt consisted of the following: 202320222.750% Senior Notes due May 2024$1,000 $1,000 3.000% Senior Notes due May 20271,000 1,000 1.375% Senior Notes due June 20271,250 1,250 1.600% Senior Notes due April 20301,750 1,750 1.750% Senior Notes due April 20321,000 1,000 Other long-term debt484 590 Total long-term debt6,484 6,590 Less unamortized debt discounts and issuance costs26 33 Less current portion(1)1,081 73 Long-term debt, excluding current portion$5,377 $6,484 2.750% Senior Notes due May 2024 3.000% Senior Notes due May 2027 1.375% Senior Notes due June 2027 1.600% Senior Notes due April 2030 1.750% Senior Notes due April 2032 Less current portion(1) _______________ (1)Net of unamortized debt discounts and issuance costs. Maturities of long-term debt during the next five fiscal years and thereafter are as follows: 2024$1,081 2025103 202676 20272,250 2028— Thereafter2,974 Total$6,484 Thereafter Total 49 49 49 Table of Contents Table of Contents

Short-Term Borrowings The Company maintains various short-term bank credit facilities, with a borrowing capacity of $1,257 and $1,050, in 2022 and 2021, respectively. Borrowings on these short-term facilities were immaterial during 2022 and 2021. Short-term borrowings outstanding were $88 and $41 at the end of 2022 and 2021. Long-Term Debt The Company's long-term debt consists primarily of Senior Notes, described below. On December 1, 2021, the Company repaid, prior to maturity, the 2.300% Senior Notes at a redemption price plus accrued interest as specified in the Notes' agreement. The Company at its option may redeem the Senior Notes at any time, in whole or in part, at a redemption price plus accrued interest. The redemption price is equal to the greater of 100% of the principal amount or the sum of the present value of the remaining scheduled payments of principal and interest to maturity. Additionally, upon certain events, the holder has the right to require the Company to purchase this security at a price of 101% of the principal amount plus accrued and unpaid interest to the date of the event. Interest on all outstanding long-term debt is payable semi-annually. The estimated fair value of Senior Notes is valued using Level 2 inputs. Other long-term debt consists of Guaranteed Senior Notes issued by the Company's Japanese subsidiary, valued using Level 3 inputs. 51 51 51 Table of Contents Table of Contents At the end of 2022 and 2021, the fair value of the Company's long-term debt, including the current portion, was approximately $6,033 and $7,692, respectively. The carrying value of long-term debt consisted of the following: 202220212.300% Senior Notes due May 2022$— $800 2.750% Senior Notes due May 20241,000 1,000 3.000% Senior Notes due May 20271,000 1,000 1.375% Senior Notes due June 20271,250 1,250 1.600% Senior Notes due April 20301,750 1,750 1.750% Senior Notes due April 20321,000 1,000 Other long-term debt590 731 Total long-term debt6,590 7,531 Less unamortized debt discounts and issuance costs33 40 Less current portion(1)73 799 Long-term debt, excluding current portion$6,484 $6,692 2.300% Senior Notes due May 2022 2.750% Senior Notes due May 2024 3.000% Senior Notes due May 2027 1.375% Senior Notes due June 2027 1.600% Senior Notes due April 2030 1.750% Senior Notes due April 2032 Less current portion(1) _______________ (1)Net of unamortized debt discounts and issuance costs. Maturities of long-term debt during the next five fiscal years and thereafter are as follows: 2023$73 20241,088 2025110 202681 20272,250 Thereafter2,988 Total$6,590 Thereafter Total 52 52 52 Table of Contents Table of Contents

Natural disasters and extreme weather conditions, including those impacted by climate change, such as hurricanes, typhoons, floods, earthquakes, wildfires, droughts; acts of terrorism or violence, including active shooter situations; and energy shortages; particularly in California or Washington state, where our centralized operating systems and administrative personnel are located, could negatively affect our operations and financial performance. Such events could result in physical damage to our properties, limitations on store operating hours, less frequent visits by members to physical locations, the temporary closure of warehouses, depots, manufacturing or home office facilities, the temporary lack of an adequate work force, disruptions to our IT systems, the temporary or long-term disruption in the supply of products from some local or overseas suppliers, the temporary disruption in the transport of goods to or from overseas, delays in the delivery of goods to our warehouses or depots, and the temporary reduction in the availability of products in our warehouses. These events could also reduce demand for our products or make it difficult or impossible to procure products. We may be required to suspend operations in some or all of our locations, which could have a material adverse effect on our business, financial condition and results of operations.

Natural disasters and extreme weather conditions, including those impacted by climate change, such as hurricanes, typhoons, floods, earthquakes, wildfires, droughts; acts of terrorism or violence, including active shooter situations; energy shortages; public health issues, including pandemics and quarantines, particularly in California or Washington state, where our centralized operating systems and administrative personnel are located, could negatively affect our operations and financial performance. Such events could result in physical damage to our properties, limitations on store operating hours, less frequent visits by members to physical locations, the temporary closure of warehouses, depots, manufacturing or home office facilities, the temporary lack of an adequate work force, disruptions to our IT systems, the temporary or long-term disruption in the supply of products from some local or overseas suppliers, the temporary disruption in the transport of goods to or from overseas, delays in the delivery of goods to our warehouses or depots, and the temporary reduction in the availability of products in our warehouses. Public health issues, whether occurring in the U.S. or abroad, could disrupt our operations, disrupt the operations of suppliers or members, or have an adverse impact on consumer spending and confidence levels. These events could also reduce demand for our products or make it difficult or impossible to procure products. We may be required to suspend operations in some or all of our locations, which could have a material adverse effect on our business, financial condition and results of operations.

Net cash provided by operating activities totaled $11,068 in 2023, compared to $7,392 in 2022. Our cash flow provided by operations is primarily from net sales and membership fees. Cash flow used in operations generally consists of payments to merchandise suppliers, warehouse operating costs, including payroll and employee benefits, utilities, and credit and debit card processing fees. Cash used in operations also includes payments for income taxes. Changes in our net investment in merchandise inventories (the difference between merchandise inventories and accounts payable) is impacted by several factors, including inventory levels and turnover, the forward deployment of inventory to accelerate delivery times, payment terms with suppliers, and early payments to obtain discounts.

Net cash provided by operating activities totaled $7,392 in 2022, compared to $8,958 in 2021. Our cash flow provided by operations is primarily from net sales and membership fees. Cash flow used in operations generally consists of payments to merchandise suppliers, warehouse operating costs, including payroll and employee benefits, utilities, and credit and debit card processing fees. Cash used in operations also includes payments for income taxes. Changes in our net investment in merchandise inventories (the difference between merchandise inventories and accounts payable) is impacted by 28 28 28 Table of Contents Table of Contents several factors, including how fast inventory is sold, the forward deployment of inventory to accelerate delivery times, payment terms with our suppliers, and early payments to obtain discounts from suppliers.

Income Taxes Income before income taxes is comprised of the following: 202320222021Domestic$6,264 $5,759 $4,931 Foreign2,223 2,081 1,749 Total$8,487 $7,840 $6,680 The provisions for income taxes are as follows: 202320222021Federal:Current$1,056 $798 $718 Deferred33 (35)84 Total federal1,089 763 802 State:Current374 333 265 Deferred10 (5)11 Total state384 328 276 Foreign:Current732 851 557 Deferred(10)(17)(34)Total foreign722 834 523 Total provision for income taxes$2,195 $1,925 $1,601 The reconciliation between the statutory tax rate and the effective rate for 2023, 2022, and 2021 is as follows: 202320222021Federal taxes at statutory rate$1,782 21.0 %$1,646 21.0 %$1,403 21.0 %State taxes, net302 3.6 267 3.4 243 3.6 Foreign taxes, net160 1.9 231 3.0 92 1.4 Employee stock ownership plan (ESOP)(25)(0.3)(23)(0.3)(91)(1.3)Other(24)(0.3)(196)(2.5)(46)(0.7)Total$2,195 25.9 %$1,925 24.6 %$1,601 24.0 % The Company recognized total net tax benefits of $62, $130 and $163 in 2023, 2022 and 2021. These include benefits of $54, $94 and $75, related to stock-based compensation. During 2021, there was a net tax benefit of $70 related to the portion of the special dividend paid through the Company's 401(k) plan. 53 53 53 Table of Contents Table of Contents The components of the deferred tax assets (liabilities) are as follows: 20232022Deferred tax assets:Equity compensation$89 $84 Deferred income/membership fees309 302 Foreign tax credit carry forward250 201 Operating lease liabilities678 727 Accrued liabilities and reserves761 694 Other20 5 Total deferred tax assets2,107 2,013 Valuation allowance(422)(313)Total net deferred tax assets1,685 1,700 Deferred tax liabilities:Property and equipment(867)(962)Merchandise inventories(380)(231)Operating lease right-of-use assets(655)(701)Foreign branch deferreds(87)(85)Total deferred tax liabilities(1,989)(1,979) Net deferred tax liabilities$(304)$(279) The deferred tax accounts at the end of 2023 and 2022 include deferred income tax assets of $491 and $445, included in other long-term assets; and deferred income tax liabilities of $795 and $724, included in other long-term liabilities. In 2023 and 2022, the Company had valuation allowances of $422 and $313, primarily related to foreign tax credits that the Company believes will not be realized due to carry forward limitations. The foreign tax credit carry forwards are set to expire beginning in fiscal 2030. The Company generally no longer considers fiscal year earnings of non-U.S. consolidated subsidiaries after 2017 to be indefinitely reinvested (other than China and Taiwan) and has recorded the estimated incremental foreign withholding taxes (net of available foreign tax credits) and state income taxes payable assuming a hypothetical repatriation to the U.S. The Company considers undistributed earnings of certain non-U.S. consolidated subsidiaries, which totaled $3,225, to be indefinitely reinvested and has not provided for withholding or state taxes. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits for 2023 and 2022 is as follows: 20232022Gross unrecognized tax benefit at beginning of year$16 $33 Gross increases—current year tax positions1 1 Gross increases—tax positions in prior years11 12 Gross decreases—tax positions in prior years(11)(12)Gross decreases—settlements— (12)Lapse of statute of limitations(1)(6)Gross unrecognized tax benefit at end of year$16 $16 54 54 54 Table of Contents Table of Contents The gross unrecognized tax benefit includes tax positions for which the ultimate deductibility is highly certain but there is uncertainty about the timing of such deductibility. At the end of 2023 and 2022, these amounts were immaterial. Because of the impact of deferred tax accounting, other than interest and penalties, the disallowance of these tax positions would not affect the annual effective tax rate but would accelerate the payment of cash to the taxing authority. The total amount of such unrecognized tax benefits that if recognized would favorably affect the effective income tax rate in future periods is $14 and $15 at the end of 2023 and 2022. Accrued interest and penalties related to income tax matters are classified as a component of income tax expense. Accrued interest and penalties recognized during 2023 and 2022, and accrued at the end of each respective period were not material. The Company is currently under audit by several jurisdictions in the United States and abroad. Some audits may conclude in the next 12 months, and the unrecognized tax benefits recorded in relation to the audits may differ from actual settlement amounts. It is not practical to estimate the effect, if any, of any amount of such change during the next 12 months to previously recorded uncertain tax positions in connection with the audits. The Company does not anticipate that there will be a material increase or decrease in the total amount of unrecognized tax benefits in the next 12 months. The Company files income tax returns in the United States, various state and local jurisdictions, in Canada, and in several other foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state or local examination for years before fiscal 2018. The Company is currently subject to examination in California for fiscal years 2013 to present. Other Taxes The Company is subject to multiple examinations for value added, sales-based, payroll, product, import or other non-income taxes in various jurisdictions. In certain cases, the Company has received assessments from the authorities. Possible losses or range of possible losses associated with these matters are either immaterial or an estimate of the possible loss or range of loss cannot be made at this time. If certain matters or a group of matters were to be decided adversely to the Company, it could result in a charge that might be material to the results of an individual fiscal quarter or year.

Income Taxes Income before income taxes is comprised of the following: 202220212020Domestic$5,759 $4,931 $4,204 Foreign2,081 1,749 1,163 Total$7,840 $6,680 $5,367 The provisions for income taxes are as follows: 202220212020Federal:Current$798 $718 $616 Deferred(35)84 77 Total federal763 802 693 State:Current333 265 230 Deferred(5)11 8 Total state328 276 238 Foreign:Current851 557 372 Deferred(17)(34)5 Total foreign834 523 377 Total provision for income taxes$1,925 $1,601 $1,308 The reconciliation between the statutory tax rate and the effective rate for 2022, 2021, and 2020 is as follows: 202220212020Federal taxes at statutory rate$1,646 21.0 %$1,403 21.0 %$1,127 21.0 %State taxes, net267 3.4 243 3.6 190 3.6 Foreign taxes, net231 3.0 92 1.4 92 1.7 Employee stock ownership plan (ESOP)(23)(0.3)(91)(1.3)(24)(0.5)Other(196)(2.5)(46)(0.7)(77)(1.4)Total$1,925 24.6 %$1,601 24.0 %$1,308 24.4 % The Company recognized total net tax benefits of $130, $163 and $81 in 2022, 2021 and 2020. These include benefits of $94, $75 and $77, related to stock-based compensation. During 2021, there was a net tax benefit of $70 related to the portion of the special dividend paid through our 401(k) plan. 57 57 57 Table of Contents Table of Contents The components of the deferred tax assets (liabilities) are as follows: 20222021Deferred tax assets:Equity compensation$84 $72 Deferred income/membership fees302 161 Foreign tax credit carry forward201 146 Operating lease liabilities727 769 Accrued liabilities and reserves694 681 Other5 62 Total deferred tax assets2,013 1,891 Valuation allowance(313)(214)Total net deferred tax assets1,700 1,677 Deferred tax liabilities:Property and equipment(962)(935)Merchandise inventories(231)(216)Operating lease right-of-use assets(701)(744)Foreign branch deferreds(85)(92)Total deferred tax liabilities(1,979)(1,987) Net deferred tax liabilities$(279)$(310) The deferred tax accounts at the end of 2022 and 2021 include deferred income tax assets of $445 and $444, respectively, included in other long-term assets; and deferred income tax liabilities of $724 and $754, respectively, included in other long-term liabilities. In 2022 and 2021, the Company had valuation allowances of $313 and $214, primarily related to foreign tax credits that the Company believes will not be realized due to carry forward limitations. The foreign tax credit carry forwards are set to expire beginning in fiscal 2030. The Company generally no longer considers fiscal year earnings of non-U.S. consolidated subsidiaries after 2017 to be indefinitely reinvested (other than China and Taiwan) and has recorded the estimated incremental foreign withholding taxes (net of available foreign tax credits) and state income taxes payable assuming a hypothetical repatriation to the U.S. The Company continues to consider undistributed earnings of certain non-U.S. consolidated subsidiaries, which totaled $2,779, to be indefinitely reinvested and has not provided for withholding or state taxes. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits for 2022 and 2021 is as follows: 20222021Gross unrecognized tax benefit at beginning of year$33 $30 Gross increases—current year tax positions1 2 Gross increases—tax positions in prior years12 2 Gross decreases—tax positions in prior years(12)— Gross decreases—settlements(12)— Lapse of statute of limitations(6)(1)Gross unrecognized tax benefit at end of year$16 $33 58 58 58 Table of Contents Table of Contents The gross unrecognized tax benefit includes tax positions for which the ultimate deductibility is highly certain but there is uncertainty about the timing of such deductibility. At the end of 2022 and 2021, these amounts were immaterial. Because of the impact of deferred tax accounting, other than interest and penalties, the disallowance of these tax positions would not affect the annual effective tax rate but would accelerate the payment of cash to the taxing authority. The total amount of such unrecognized tax benefits that if recognized would favorably affect the effective income tax rate in future periods is $15 and $30 at the end of 2022 and 2021. Accrued interest and penalties related to income tax matters are classified as a component of income tax expense. Accrued interest and penalties recognized during 2022 and 2021, and accrued at the end of each respective period were not material. The Company is currently under audit by several jurisdictions in the United States and abroad. Some audits may conclude in the next 12 months, and the unrecognized tax benefits recorded in relation to the audits may differ from actual settlement amounts. It is not practical to estimate the effect, if any, of any amount of such change during the next 12 months to previously recorded uncertain tax positions in connection with the audits. The Company does not anticipate that there will be a material increase or decrease in the total amount of unrecognized tax benefits in the next 12 months. The Company files income tax returns in the United States, various state and local jurisdictions, in Canada, and in several other foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state or local examination for years before fiscal 2018. The Company is currently subject to examination in California for fiscal years 2013 to present. Other Taxes The Company is subject to multiple examinations for value added, sales-based, payroll, product, import or other non-income taxes in various jurisdictions. In certain cases, the Company has received assessments from the authorities. Possible losses or range of possible losses associated with these matters are either immaterial or an estimate of the possible loss or range of loss cannot be made at this time. If certain matters or a group of matters were to be decided adversely to the Company, it could result in a charge that might be material to the results of an individual fiscal quarter or year. 59 59 59 Table of Contents Table of Contents

_______________ (1)132 of the 184 leases are land-only leases, where Costco owns the building. At the end of 2023, our warehouses contained approximately 126.3 million square feet of operating floor space: 87.6 million in the U.S.; 15.3 million in Canada; and 23.4 million in Other International. Total square feet associated with distribution and logistics facilities were approximately 33.1 million. Additionally, we operate various processing, packaging, manufacturing and other facilities to support our business, which includes the production of certain private-label items. Item 3—Legal Proceedings See discussion of Legal Proceedings in Note 10 to the consolidated financial statements included in Item 8 of this Report. Item 4—Mine Safety Disclosures Not applicable. PART II Item 5—Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

_______________ (1)126 of the 177 leases are land-only leases, where Costco owns the building. At the end of 2022, our warehouses contained approximately 122.5 million square feet of operating floor space: 85.4 million in the U.S.; 15.2 million in Canada; and 21.9 million in Other International. Total square feet associated with distribution and logistics facilities were approximately 31.0 million. Additionally, we operate various processing, packaging, manufacturing and other facilities to support our business, which includes the production of certain private-label items. Item 3—Legal Proceedings See discussion of Legal Proceedings in Note 10 to the consolidated financial statements included in Item 8 of this Report. Item 4—Mine Safety Disclosures Not applicable. 19 19 19 Table of Contents Table of Contents PART II Item 5—Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

The tables below present information regarding the Company's lease assets and liabilities. 20232022AssetsOperating lease right-of-use assets$2,713 $2,774 Finance lease assets(1)1,325 1,620 Total lease assets$4,038 $4,394 LiabilitiesCurrentOperating lease liabilities(2)$220 $239 Finance lease liabilities(2)129 245 Long-termOperating lease liabilities2,426 2,482 Finance lease liabilities(3)1,303 1,383 Total lease liabilities$4,078 $4,349 Finance lease assets(1) 1,325 1,620 Operating lease liabilities(2) 220 239 Finance lease liabilities(2) 129 245 Finance lease liabilities(3) 1,303 1,383 _______________ (1)Included in other long-term assets in the consolidated balance sheets. (2)Included in other current liabilities in the consolidated balance sheets. (3)Included in other long-term liabilities in the consolidated balance sheets. 20232022Weighted-average remaining lease term (years)Operating leases2020Finance leases2417Weighted-average discount rateOperating leases2.47 %2.26 %Finance leases4.47 %3.97 % Operating leases Finance leases Operating leases Finance leases The components of lease expense, excluding short-term lease costs and sublease income (which were not material), were as follows: 202320222021Operating lease costs(1)$309 $297 $296 Finance lease costs:Amortization of lease assets(1)169 128 50 Interest on lease liabilities(2)54 45 37 Variable lease costs(1)160 157 151 Total lease costs$692 $627 $534 Operating lease costs(1) Amortization of lease assets(1) Interest on lease liabilities(2) Variable lease costs(1) _______________ (1)Included in selling, general and administrative expenses and merchandise costs in the consolidated statements of income. (2)Included in interest expense and merchandise costs in the consolidated statements of income. 50 50 50 Table of Contents Table of Contents Supplemental cash flow information related to leases was as follows: 202320222021Cash paid for amounts included in the measurement of lease liabilities:Operating cash flows — operating leases$287 $277 $282 Operating cash flows — finance leases54 45 37 Financing cash flows — finance leases291 176 67 Operating lease assets obtained in exchange for new or modified leases202 231 350 Financing lease assets obtained in exchange for new or modified leases100 794 399 Operating cash flows — operating leases Operating cash flows — finance leases Financing cash flows — finance leases As of September 3, 2023, future minimum payments during the next five fiscal years and thereafter are as follows: Operating Leases(1)Finance Leases2024$277 $180 2025230 175 2026226 100 2027206 91 2028191 92 Thereafter2,271 1,579 Total(2)3,401 2,217 Less amount representing interest755 785 Present value of lease liabilities$2,646 $1,432

The tables below present information regarding the Company's lease assets and liabilities. 20222021AssetsOperating lease right-of-use assets$2,774 $2,890 Finance lease assets(1)1,620 1,000 Total lease assets$4,394 $3,890 LiabilitiesCurrentOperating lease liabilities(2)$239 $222 Finance lease liabilities(2)245 72 Long-termOperating lease liabilities2,482 2,642 Finance lease liabilities(3)1,383 980 Total lease liabilities$4,349 $3,916 Finance lease assets(1) 1,620 1,000 Operating lease liabilities(2) 239 222 Finance lease liabilities(2) 245 72 Finance lease liabilities(3) 1,383 980 _______________ (1)Included in other long-term assets in the consolidated balance sheets. (2)Included in other current liabilities in the consolidated balance sheets. (3)Included in other long-term liabilities in the consolidated balance sheets. 20222021Weighted-average remaining lease term (years)Operating leases2021Finance leases1722Weighted-average discount rateOperating leases2.26 %2.16 %Finance leases3.97 %4.91 % Operating leases Finance leases Operating leases Finance leases The components of lease expense, excluding short-term lease costs and sublease income (which were not material), were as follows: 202220212020Operating lease costs(1)$297 $296 $252 Finance lease costs:Amortization of lease assets(1)128 50 31 Interest on lease liabilities(2)45 37 33 Variable lease costs(1)157 151 87 Total lease costs$627 $534 $403 Operating lease costs(1) Amortization of lease assets(1) Interest on lease liabilities(2) Variable lease costs(1) _______________ (1)Included in selling, general and administrative expenses and merchandise costs in the consolidated statements of income. (2)Included in interest expense and merchandise costs in the consolidated statements of income. 53 53 53 Table of Contents Table of Contents Supplemental cash flow information related to leases was as follows: 202220212020Cash paid for amounts included in the measurement of lease liabilities:Operating cash flows — operating leases$277 $282 $258 Operating cash flows — finance leases45 37 33 Financing cash flows — finance leases176 67 49 Operating lease assets obtained in exchange for new or modified leases231 350 354 Financing lease assets obtained in exchange for new or modified leases794 399 317 Operating cash flows — operating leases Operating cash flows — finance leases Financing cash flows — finance leases As of August 28, 2022, future minimum payments during the next five fiscal years and thereafter are as follows: Operating Leases(1)Finance Leases2023$277 $288 2024256 253 2025210 280 2026207 119 2027186 88 Thereafter2,332 1,191 Total(2)3,468 2,219 Less amount representing interest747 591 Present value of lease liabilities$2,721 $1,628

Interest The accompanying notes are an integral part of these consolidated financial statements.38 The accompanying notes are an integral part of these consolidated financial statements.38 The accompanying notes are an integral part of these consolidated financial statements. 38 Table of Contents Table of Contents

Interest The accompanying notes are an integral part of these consolidated financial statements.40 The accompanying notes are an integral part of these consolidated financial statements.40 The accompanying notes are an integral part of these consolidated financial statements. 40 Table of Contents Table of Contents

The accompanying notes are an integral part of these consolidated financial statements.34 The accompanying notes are an integral part of these consolidated financial statements.34 The accompanying notes are an integral part of these consolidated financial statements. 34 Table of Contents Table of Contents

The accompanying notes are an integral part of these consolidated financial statements.36 The accompanying notes are an integral part of these consolidated financial statements.36 The accompanying notes are an integral part of these consolidated financial statements. 36 Table of Contents Table of Contents

202320222021Provision for income taxes$2,195 $1,925 $1,601 Effective tax rate25.9 %24.6 %24.0 % The effective tax rate for 2023 was impacted by net discrete tax benefits of $62, primarily due to excess tax benefits related to stock compensation. Excluding discrete net tax benefits, the tax rate was 26.6%. The effective tax rate for 2022 was impacted by net discrete tax benefits of $130, primarily due to excess tax benefits related to stock compensation. Excluding discrete net tax benefits, the tax rate was 26.2%.

202220212020Provision for income taxes$1,925 $1,601 $1,308 Effective tax rate24.6 %24.0 %24.4 % The effective tax rate for 2022 was impacted by net discrete tax benefits of $130. This included $94 of excess tax benefits related to stock compensation. Excluding discrete net tax benefits, the tax rate was 26.2% for 2022. The effective tax rate for 2021 was impacted by net discrete tax benefits of $163. This included $75 of excess tax benefits related to stock compensation, $70 related to the special cash dividend paid through our 401(k) plan, and $19 related to a reduction in the valuation allowance against certain deferred tax assets. Excluding net discrete tax benefits, the tax rate was 26.4% for 2021.

_______________ (1)The repurchase program is conducted under a $4,000 authorization approved by our Board of Directors in January 2023, which expires in January 2027. This authorization revoked previously authorized but unused amounts, totaling $2,568. 18 18 18 Table of Contents Table of Contents

_______________ (1)The repurchase program is conducted under a $4,000 authorization approved by our Board of Directors in April 2019, which expires in April 2023. 20 20 20 Table of Contents Table of Contents

The accompanying notes are an integral part of these consolidated financial statements.35 The accompanying notes are an integral part of these consolidated financial statements.35 The accompanying notes are an integral part of these consolidated financial statements. 35 Table of Contents Table of Contents

The accompanying notes are an integral part of these consolidated financial statements.37 The accompanying notes are an integral part of these consolidated financial statements.37 The accompanying notes are an integral part of these consolidated financial statements. 37 Table of Contents Table of Contents

The Company’s investments were as follows: 2023:CostBasisUnrealizedLosses, NetRecordedBasisAvailable-for-sale:Government and agency securities$650 $(17)$633 Held-to-maturity:Certificates of deposit901 — 901 Total short-term investments$1,551 $(17)$1,534 47 47 47 Table of Contents Table of Contents 2022:CostBasisUnrealizedLosses, NetRecordedBasisAvailable-for-sale:Government and agency securities$534 $(5)$529 Held-to-maturity:Certificates of deposit317 — 317 Total short-term investments$851 $(5)$846 Gross unrecognized holding gains and losses on available-for-sale securities were not material for the years ended September 3, 2023, and August 28, 2022. At those dates, there were no available-for-sale securities in a material continuous unrealized-loss position. There were no sales of available-for-sale securities during 2023 or 2022. The maturities of available-for-sale and held-to-maturity securities at the end of 2023 are as follows: Available-For-SaleHeld-To-Maturity Cost BasisFair ValueDue in one year or less$111 $110 $901 Due after one year through five years337 330 — Due after five years202193— Total$650 $633 $901

The Company’s investments were as follows: 2022:CostBasisUnrealizedLosses, NetRecordedBasisAvailable-for-sale:Government and agency securities$534 $(5)$529 Held-to-maturity:Certificates of deposit317 — 317 Total short-term investments$851 $(5)$846 2021:CostBasisUnrealizedGains, NetRecordedBasisAvailable-for-sale:Government and agency securities$375 $6 $381 Held-to-maturity:Certificates of deposit536 — 536 Total short-term investments$911 $6 $917 Gross unrecognized holding gains and losses on available-for-sale securities were not material for the years ended August 28, 2022, and August 29, 2021. At those dates, there were no available-for-sale securities in a material continuous unrealized-loss position. There were no sales of available-for-sale securities during 2022 or 2021. The maturities of available-for-sale and held-to-maturity securities at the end of 2022 are as follows: Available-For-SaleHeld-To-Maturity Cost BasisFair ValueDue in one year or less$276 $274 $317 Due after one year through five years197 195 — Due after five years6160— Total$534 $529 $317 50 50 50 Table of Contents Table of Contents

202320222021Interest income$470 $61 $41 Foreign-currency transaction gains, net29 106 56 Other, net34 38 46 Interest income and other, net$533 $205 $143 The increase in interest income in 2023 was due to higher global interest rates and higher average cash and investment balances. Foreign-currency transaction gains, net include revaluation or settlement of monetary assets and liabilities by our Canadian and Other International operations and mark-to-market adjustments for forward foreign-exchange contracts. See Derivatives and Foreign Currency sections in Note 1 to the consolidated financial statements included in Item 8 of this Report.

202220212020Interest income$61 $41 $89 Foreign-currency transaction gains, net106 56 7 Other, net38 46 (4)Interest income and other, net$205 $143 $92 The increase in interest income in 2022 was primarily due to higher global interest rates. Foreign-currency transaction gains, net, include revaluation or settlement of monetary assets and liabilities by our Canadian and Other International operations and mark-to-market adjustments for forward foreign-exchange contracts. See Derivatives and Foreign Currency sections in Note 1 to the consolidated financial statements included in Item 8 of this Report. 27 27 27 Table of Contents Table of Contents

The 2019 Incentive Plan authorized the issuance of 17,500,000 shares (10,000,000 RSUs) of common stock for future grants, plus the remaining shares that were available for grant and the future forfeited shares from grants under the previous plan, up to a maximum aggregate of 27,800,000 shares (15,885,000 RSUs). 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 taxes. Summary of Restricted Stock Unit Activity At the end of 2023, 8,747,000 shares were available to be granted as RSUs, and the following awards were outstanding: •2,869,000 time-based RSUs, which vest upon continued employment or service over specified periods of time; and •176,000 performance-based RSUs, of which 135,000 were granted to executive officers subject to the determination of the attainment of performance targets for 2023. This determination occurred in September 2023, at which time at least 33% of the units vested, as a result of the long service of all executive officers, with the exception of one executive officer who has less than 25 years of service. The remaining awards vest upon continued employment over specified periods of time. Please refer to Note 1 for accelerated vesting requirements. The following table summarizes RSU transactions during 2023: Number ofUnits(in 000’s)Weighted-AverageGrant Date FairValueOutstanding at the end of 20223,449 $338.41 Granted1,814 471.47 Vested and delivered(2,102)352.53 Forfeited(116)398.31 Outstanding at the end of 20233,045 $405.63 The weighted-average grant date fair value of RSUs granted was $471.47, $476.06, and $369.15 in 2023, 2022, and 2021. The remaining unrecognized compensation cost related to non-vested RSUs at the end of 2023 was $790 and the weighted-average period of time over which this cost will be recognized is 1.6 years. Included in the outstanding balance at the end of 2023 were approximately 1,050,000 RSUs vested but not yet delivered. Summary of Stock-Based Compensation The following table summarizes stock-based compensation expense and the related tax benefits: 202320222021Stock-based compensation expense$774 $724 $665 Less recognized income tax benefit 163 154 140 Stock-based compensation expense, net$611 $570 $525 Less recognized income tax benefit 52 52 52 Table of Contents Table of Contents

The Company grants stock-based compensation, primarily to employees and non-employee directors. Grants to executive officers are generally performance-based. Through a series of shareholder approvals, there have been amended and restated plans and new provisions implemented by the Company. RSUs are subject to quarterly vesting upon retirement or voluntary termination. Employees who attain at least 25 years of service with the Company receive shares under accelerated vesting provisions on the annual vesting date. The 2019 Incentive Plan authorized the issuance of 17,500,000 shares (10,000,000 RSUs) of common stock for future grants, plus the remaining shares that were available for grant and the future forfeited shares from grants under the previous plan, up to a maximum aggregate of 27,800,000 shares (15,885,000 RSUs). 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 taxes. Summary of Restricted Stock Unit Activity RSUs granted to employees and to non-employee directors generally vest over five and three years, respectively. Additionally, the terms of the RSUs, including performance-based awards, provide for accelerated vesting for employees and non-employee directors who have attained 25 or more and five or more years of service with the Company, respectively. Recipients are not entitled to vote or receive dividends on unvested and undelivered shares. At the end of 2022, 10,445,000 shares were available to be granted as RSUs under the 2019 Incentive Plan. five three five 55 55 55 Table of Contents Table of Contents The following awards were outstanding at the end of 2022: •3,328,000 time-based RSUs, which vest upon continued employment or service over specified periods of time; and •121,000 performance-based RSUs, of which 82,000 were granted to executive officers subject to the determination of the attainment of performance targets for 2022. This determination occurred in September 2022, at which time at least 33% of the units vested, as a result of the long service of all executive officers receiving performance-based RSUs. The remaining awards vest upon continued employment over specified periods of time. The following table summarizes RSU transactions during 2022: Number ofUnits(in 000’s)Weighted-AverageGrant Date FairValueOutstanding at the end of 20214,349 $257.88 Granted1,679 476.06 Vested and delivered(2,456)290.18 Forfeited(123)332.84 Outstanding at the end of 20223,449 $338.41 The weighted-average grant date fair value of RSUs granted was $476.06, $369.15, and $294.08 in 2022, 2021, and 2020, respectively. The remaining unrecognized compensation cost related to non-vested RSUs at the end of 2022 was $758 and the weighted-average period of time over which this cost will be recognized is 1.6 years. Included in the outstanding balance at the end of 2022 were approximately 1,210,000 RSUs vested but not yet delivered. Summary of Stock-Based Compensation The following table summarizes stock-based compensation expense and the related tax benefits: 202220212020Stock-based compensation expense$724 $665 $619 Less recognized income tax benefit 154 140 128 Stock-based compensation expense, net$570 $525 $491 Less recognized income tax benefit 56 56 56 Table of Contents Table of Contents

Total(2) 1,628 _______________ (1)Operating lease payments have not been reduced by future sublease income of $83. (2)Excludes $660 of lease payments for leases that have been signed but not commenced. 54 54 54 Table of Contents Table of Contents

Net cash used in financing activities totaled $2,614 in 2023, compared to $4,283 in 2022. Cash flows used in financing activities primarily related to the payment of dividends, repurchases of common stock, and withholding taxes on stock-based awards. In 2022, cash flow used in financing activities included 26 26 26 Table of Contents Table of Contents payments to our former joint-venture partner for a dividend and the purchase of their equity interest in Taiwan, totaling $1,050 in the aggregate, and repayments of our 2.300% Senior Notes. Stock Repurchase Programs On January 19, 2023, the Board of Directors authorized a new share repurchase program in the amount of $4,000, which expires in January 2027. During 2023 and 2022, we repurchased 1,341,000 and 863,000 shares of common stock, at average prices of $504.68 and $511.46, totaling approximately $677 and $442. These amounts may differ from the accompanying consolidated statements of cash flows due to changes in unsettled repurchases at the end of each fiscal year. Purchases are made from time to time, as conditions warrant, in the open market or in block purchases, pursuant to plans under SEC Rule 10b5-1. Repurchased shares are retired, in accordance with the Washington Business Corporation Act. The remaining amount available to be purchased under our approved plan was $3,563 at the end of 2023. Dividends Cash dividends declared in 2023 totaled $3.84 per share, as compared to $3.38 per share in 2022. In April 2023, the Board of Directors increased our quarterly cash dividend from $0.90 to $1.02 per share.

Net cash used in financing activities totaled $4,283 in 2022, compared to $6,488 in 2021. Cash flows used in financing activities primarily related to the payment of dividends, payments to our former joint-venture partner for a dividend and the purchase of their equity interest in Taiwan, totaling $1,050 in the aggregate, repayments of our 2.300% Senior Notes, repurchases of common stock, and withholding taxes on stock awards. Stock Repurchase Programs During 2022 and 2021, we repurchased 863,000 and 1,358,000 shares of common stock, at average prices of $511.46 and $364.39, respectively, totaling approximately $442 and $495, respectively. These amounts may differ from the stock repurchase balances in the accompanying consolidated statements of cash flows due to changes in unsettled stock repurchases at the end of each fiscal year. 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. Repurchased shares are retired, in accordance with the Washington Business Corporation Act. The remaining amount available to be purchased under our approved plan was $2,808 at the end of 2022. Dividends Cash dividends declared in 2022 totaled $3.38 per share, as compared to $12.98 per share in 2021. Dividends in 2021 included a special dividend of $10.00 per share, aggregating approximately $4,430. In April 2022, the Board of Directors increased our quarterly cash dividend from $0.79 to $0.90 per share.

PageReports of Independent Registered Public Accounting Firm31Consolidated Statements of Income34Consolidated Statements of Comprehensive Income35Consolidated Balance Sheets36Consolidated Statements of Equity37Consolidated Statements of Cash Flows38Notes to Consolidated Financial Statements39 Reports of Independent Registered Public Accounting Firm 31 Consolidated Statements of Income 34 Consolidated Statements of Comprehensive Income 35 Consolidated Balance Sheets 36 Consolidated Statements of Equity 37 Consolidated Statements of Cash Flows 38 Notes to Consolidated Financial Statements 39 30 30 30 Table of Contents Table of Contents

PageReports of Independent Registered Public Accounting Firm33Consolidated Statements of Income36Consolidated Statements of Comprehensive Income37Consolidated Balance Sheets38Consolidated Statements of Equity39Consolidated Statements of Cash Flows40Notes to Consolidated Financial Statements41 Reports of Independent Registered Public Accounting Firm 33 Consolidated Statements of Income 36 Consolidated Statements of Comprehensive Income 37 Consolidated Balance Sheets 38 Consolidated Statements of Equity 39 Consolidated Statements of Cash Flows 40 Notes to Consolidated Financial Statements 41 32 32 32 Table of Contents Table of Contents

202320222021Membership fees$4,580$4,224$3,877Membership fees increase8 %9 %9 % 23 23 23 Table of Contents Table of Contents Membership fee revenue increased 8% in 2023, driven by new member sign-ups, upgrades to Executive membership, and the benefit of an additional week. Changes in foreign currencies relative to the U.S. dollar negatively impacted membership fees by $76 compared to 2022. At the end of 2023, our member renewal rates were 92.7% in the U.S. and Canada and 90.4% worldwide. More members auto renewing and higher penetration of Executive members benefit renewal rates. Our renewal rate, which excludes affiliates of Business members, is a trailing calculation that captures renewals during the period seven to eighteen months prior to the reporting date. We account for membership fee revenue on a deferred basis, recognized ratably over the one-year membership period.

202220212020Membership fees$4,224$3,877$3,541Membership fees increase9 %9 %6 % Membership fee revenue increased 9% in 2022, driven by new member sign-ups and upgrades to Executive membership. Changes in foreign currencies relative to the U.S. dollar negatively impacted membership fees by $42, compared to 2021. At the end of 2022, our member renewal rates were 93% in the U.S. and Canada and 90% worldwide. Renewal rates continue to benefit from more members auto renewing and increased penetration of Executive members, who on average renew at a higher rate. Our renewal rate, which excludes affiliates of Business members, is a trailing calculation that captures renewals during the period seven to eighteen months prior to the reporting date. We account for membership fee revenue on a deferred basis, recognized ratably over the one-year membership period.

Dividends Cash dividends declared in 2023 totaled $3.84 per share, as compared to $3.38 in 2022. The Company's current quarterly dividend rate is $1.02 per share. Stock Repurchase Programs The Company's stock repurchase program is conducted under a $4,000 authorization by the Board of Directors, which expires in January 2027. As of the end of 2023, the remaining amount available under the authorization was $3,563. The following table summarizes the Company’s stock repurchase activity: SharesRepurchased(000’s)AveragePrice perShareTotal Cost20231,341 $504.68 $677 2022863 511.46 442 20211,358 364.39 495 These amounts may differ from repurchases of common stock in the consolidated statements of cash flows due to changes in unsettled stock repurchases at the end of each fiscal year. Purchases are made 51 51 51 Table of Contents Table of Contents from time to time, as conditions warrant, in the open market or in block purchases and pursuant to plans under SEC Rule 10b5-1.

Dividends Cash dividends declared in 2022 totaled $3.38 per share, as compared to $12.98 per share in 2021. Dividends in 2021 included a special dividend of $10.00 per share, aggregating approximately $4,430. The Company's current quarterly dividend rate is $0.90 per share. Stock Repurchase Programs The Company's stock repurchase program is conducted under a $4,000 authorization by the Board of Directors, which expires in April 2023. As of the end of 2022, the remaining amount available under the approved plan was $2,808. The following table summarizes the Company’s stock repurchase activity: SharesRepurchased(000’s)AveragePrice perShareTotal Cost2022863 $511.46 $442 20211,358 364.39 495 2020643 308.45 198 These amounts may differ from repurchases of common stock in the consolidated statements of cash flows due to changes in unsettled stock repurchases at the end of each fiscal year. 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.

The Company is principally engaged in the operation of membership warehouses through wholly owned subsidiaries in the U.S., Canada, Mexico, Japan, the U.K., Korea, Australia, Taiwan, China, Spain, France, Iceland, New Zealand, and Sweden. Reportable segments are largely based on management’s organization of the operating segments for operational decisions and assessments of financial performance, which considers geographic locations. The material accounting policies of the segments are as described in Note 1. Inter-segment net sales and expenses have been eliminated in computing total revenue and operating income. The following table provides information for the Company's reportable segments: United StatesCanadaOtherInternationalTotal2023Total revenue$176,630 $33,056 $32,604 $242,290 Operating income5,392 1,448 1,274 8,114 Depreciation and amortization1,599 183 295 2,077 Additions to property and equipment3,288 281 754 4,323 Property and equipment, net18,760 2,443 5,481 26,684 Total assets49,189 6,420 13,385 68,994 2022Total revenue$165,294 $31,675 $29,985 $226,954 Operating income5,268 1,346 1,179 7,793 Depreciation and amortization1,436 180 284 1,900 Additions to property and equipment2,795 388 708 3,891 Property and equipment, net17,205 2,459 4,982 24,646 Total assets44,904 6,558 12,704 64,166 2021Total revenue$141,398 $27,298 $27,233 $195,929 Operating income4,470 1,093 1,145 6,708 Depreciation and amortization1,339 177 265 1,781 Additions to property and equipment2,612 272 704 3,588 Property and equipment, net15,993 2,317 5,182 23,492 Total assets39,589 5,962 13,717 59,268 Disaggregated Revenue The following table summarizes net sales by merchandise category; sales from e-commerce websites and business centers have been allocated to the applicable merchandise categories: 202320222021Foods and Sundries$96,175 $85,629 $77,277 Non-Foods60,865 61,100 55,966 Fresh Foods31,977 29,527 27,183 Warehouse Ancillary and Other Businesses48,693 46,474 31,626 Total net sales$237,710 $222,730 $192,052 Foods and Sundries Non-Foods Fresh Foods Warehouse Ancillary and Other Businesses Total net sales 59 59 59 Table of Contents Table of Contents Item 9—Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None. Item 9A—Controls and Procedures

The Company is principally engaged in the operation of membership warehouses through wholly owned subsidiaries in the U.S., Canada, Mexico, Japan, U.K., Korea, Taiwan, Australia, Spain, France, China, and Iceland. Reportable segments are largely based on management’s organization of the operating segments for operational decisions and assessments of financial performance, which considers geographic locations. The material accounting policies of the segments are as described in Note 1. Inter-segment net sales and expenses have been eliminated in computing total revenue and operating income. Effective for fiscal 2022, stock-based compensation was allocated to the segments in this reporting. This change reflected a decision to evaluate the financial performance of the segments inclusive of this expense. Operating income was restated in each of the segments for all prior periods to reflect this change. The following table provides information for the Company's reportable segments: United StatesCanadaOtherInternationalTotal2022Total revenue$165,294 $31,675 $29,985 $226,954 Operating income5,268 1,346 1,179 7,793 Depreciation and amortization1,436 180 284 1,900 Additions to property and equipment2,795 388 708 3,891 Property and equipment, net17,205 2,459 4,982 24,646 Total assets44,904 6,558 12,704 64,166 2021Total revenue$141,398 $27,298 $27,233 $195,929 Operating income4,470 1,093 1,145 6,708 Depreciation and amortization1,339 177 265 1,781 Additions to property and equipment2,612 272 704 3,588 Property and equipment, net15,993 2,317 5,182 23,492 Total assets39,589 5,962 13,717 59,268 2020Total revenue$122,142 $22,434 $22,185 $166,761 Operating income3,822 778 835 5,435 Depreciation and amortization1,248 155 242 1,645 Additions to property and equipment2,060 258 492 2,810 Property and equipment, net14,916 2,172 4,719 21,807 Total assets38,366 5,270 11,920 55,556 Disaggregated Revenue The following table summarizes net sales by merchandise category; sales from e-commerce websites and business centers have been allocated to the applicable merchandise categories: 202220212020Foods and Sundries$85,629 $77,277 $68,659 Non-Foods61,100 55,966 44,807 Fresh Foods29,527 27,183 23,204 Warehouse Ancillary and Other Businesses46,474 31,626 26,550 Total net sales$222,730 $192,052 $163,220 Foods and Sundries Non-Foods Fresh Foods Warehouse Ancillary and Other Businesses Total net sales 63 63 63 Table of Contents Table of Contents Item 9—Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None. Item 9A—Controls and Procedures

53 Weeks Ended52 Weeks Ended52 Weeks EndedSeptember 3,2023August 28,2022August 29,2021CASH FLOWS FROM OPERATING ACTIVITIESNet income including noncontrolling interests$6,292 $5,915 $5,079 Adjustments to reconcile net income including noncontrolling interests to net cash provided by operating activities:Depreciation and amortization2,077 1,900 1,781 Non-cash lease expense412 377 286 Stock-based compensation774 724 665 Impairment of assets and other non-cash operating activities, net495 39 144 Changes in operating assets and liabilities:Merchandise inventories1,228 (4,003)(1,892)Accounts payable(382)1,891 1,838 Other operating assets and liabilities, net172 549 1,057 Net cash provided by operating activities11,068 7,392 8,958 CASH FLOWS FROM INVESTING ACTIVITIESPurchases of short-term investments(1,622)(1,121)(1,331)Maturities and sales of short-term investments937 1,145 1,446 Additions to property and equipment(4,323)(3,891)(3,588)Other investing activities, net36 (48)(62)Net cash used in investing activities(4,972)(3,915)(3,535)CASH FLOWS FROM FINANCING ACTIVITIESRepayments of short-term borrowings(935)(6)— Proceeds from short-term borrowings917 53 41 Repayments of long-term debt(75)(800)(94)Tax withholdings on stock-based awards(303)(363)(312)Repurchases of common stock(676)(439)(496)Cash dividend payments(1,251)(1,498)(5,748)Financing lease payments(291)(176)(67)Dividend to noncontrolling interest— (208)— Acquisition of noncontrolling interest— (842)— Other financing activities, net— (4)188 Net cash used in financing activities(2,614)(4,283)(6,488)EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS15 (249)46 Net change in cash and cash equivalents3,497 (1,055)(1,019)CASH AND CASH EQUIVALENTS BEGINNING OF YEAR10,203 11,258 12,277 CASH AND CASH EQUIVALENTS END OF YEAR$13,700 $10,203 $11,258 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:Cash paid during the year for:Interest$125 $145 $149 Income taxes, net$2,234 $1,940 $1,527 SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES:Cash dividend declared, but not yet paid$452 $— $— Capital expenditures included in liabilities$170 $156 $184 Adjustments to reconcile net income including noncontrolling interests to net cash provided by operating activities: Depreciation and amortization Non-cash lease expense Stock-based compensation Changes in operating assets and liabilities:

52 Weeks EndedAugust 28,2022August 29,2021August 30,2020CASH FLOWS FROM OPERATING ACTIVITIESNet income including noncontrolling interests$5,915 $5,079 $4,059 Adjustments to reconcile net income including noncontrolling interests to net cash provided by operating activities:Depreciation and amortization1,900 1,781 1,645 Non-cash lease expense377 286 194 Stock-based compensation724 665 619 Other non-cash operating activities, net76 85 42 Deferred income taxes(37)59 104 Changes in operating assets and liabilities:Merchandise inventories(4,003)(1,892)(791)Accounts payable1,891 1,838 2,261 Other operating assets and liabilities, net549 1,057 728 Net cash provided by operating activities7,392 8,958 8,861 CASH FLOWS FROM INVESTING ACTIVITIESPurchases of short-term investments(1,121)(1,331)(1,626)Maturities and sales of short-term investments1,145 1,446 1,678 Additions to property and equipment(3,891)(3,588)(2,810)Acquisitions— — (1,163)Other investing activities, net(48)(62)30 Net cash used in investing activities(3,915)(3,535)(3,891)CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issuance of long-term debt— — 3,992 Repayments of long-term debt(800)(94)(3,200)Tax withholdings on stock-based awards(363)(312)(330)Repurchases of common stock(439)(496)(196)Cash dividend payments(1,498)(5,748)(1,479)Dividend to noncontrolling interest(208)— — Acquisition of noncontrolling interest(842)— — Other financing activities, net(133)162 66 Net cash used in financing activities(4,283)(6,488)(1,147)EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS(249)46 70 Net change in cash and cash equivalents(1,055)(1,019)3,893 CASH AND CASH EQUIVALENTS BEGINNING OF YEAR11,258 12,277 8,384 CASH AND CASH EQUIVALENTS END OF YEAR$10,203 $11,258 $12,277 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:Cash paid during the year for:Interest$145 $149 $124 Income taxes, net$1,940 $1,527 $1,052 SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES:Capital expenditures included in liabilities$156 $184 $204 Adjustments to reconcile net income including noncontrolling interests to net cash provided by operating activities: Depreciation and amortization Non-cash lease expense Stock-based compensation Other non-cash operating activities, net Deferred income taxes Changes in operating assets and liabilities:

202220212020Interest expense$158 $171 $160 Interest expense primarily relates to Senior Notes and financing leases. Interest expense decreased in 2022 due to repayment of the 2.300% Senior Notes on December 1, 2021. For more information on our debt arrangements, refer to the consolidated financial statements included in Item 8 of this Report.

September 3,2023August 28,2022ASSETSCURRENT ASSETSCash and cash equivalents$13,700 $10,203 Short-term investments1,534 846 Receivables, net2,285 2,241 Merchandise inventories16,651 17,907 Other current assets1,709 1,499 Total current assets35,879 32,696 OTHER ASSETSProperty and equipment, net26,684 24,646 Operating lease right-of-use assets2,713 2,774 Other long-term assets3,718 4,050 TOTAL ASSETS$68,994 $64,166 LIABILITIES AND EQUITYCURRENT LIABILITIESAccounts payable$17,483 $17,848 Accrued salaries and benefits4,278 4,381 Accrued member rewards2,150 1,911 Deferred membership fees2,337 2,174 Current portion of long-term debt1,081 73 Other current liabilities6,254 5,611 Total current liabilities33,583 31,998 OTHER LIABILITIESLong-term debt, excluding current portion5,377 6,484 Long-term operating lease liabilities2,426 2,482 Other long-term liabilities2,550 2,555 TOTAL LIABILITIES43,936 43,519 COMMITMENTS AND CONTINGENCIESEQUITYPreferred stock $0.005 par value; 100,000,000 shares authorized; no shares issued and outstanding— — Common stock $0.005 par value; 900,000,000 shares authorized; 442,793,000 and 442,664,000 shares issued and outstanding2 2 Additional paid-in capital7,340 6,884 Accumulated other comprehensive loss(1,805)(1,829)Retained earnings19,521 15,585 Total Costco stockholders’ equity25,058 20,642 Noncontrolling interests— 5 TOTAL EQUITY25,058 20,647 TOTAL LIABILITIES AND EQUITY$68,994 $64,166 Preferred stock $0.005 par value; 100,000,000 shares authorized; no shares issued and outstanding Common stock $0.005 par value; 900,000,000 shares authorized; 442,793,000 and 442,664,000 shares issued and outstanding The accompanying notes are an integral part of these consolidated financial statements.36 The accompanying notes are an integral part of these consolidated financial statements.36 The accompanying notes are an integral part of these consolidated financial statements. 36 Table of Contents Table of Contents

August 28,2022August 29,2021ASSETSCURRENT ASSETSCash and cash equivalents$10,203 $11,258 Short-term investments846 917 Receivables, net2,241 1,803 Merchandise inventories17,907 14,215 Other current assets1,499 1,312 Total current assets32,696 29,505 OTHER ASSETSProperty and equipment, net24,646 23,492 Operating lease right-of-use assets2,774 2,890 Other long-term assets4,050 3,381 TOTAL ASSETS$64,166 $59,268 LIABILITIES AND EQUITYCURRENT LIABILITIESAccounts payable$17,848 $16,278 Accrued salaries and benefits4,381 4,090 Accrued member rewards1,911 1,671 Deferred membership fees2,174 2,042 Current portion of long-term debt73 799 Other current liabilities5,611 4,561 Total current liabilities31,998 29,441 OTHER LIABILITIESLong-term debt, excluding current portion6,484 6,692 Long-term operating lease liabilities2,482 2,642 Other long-term liabilities2,555 2,415 TOTAL LIABILITIES43,519 41,190 COMMITMENTS AND CONTINGENCIESEQUITYPreferred stock $0.005 par value; 100,000,000 shares authorized; no shares issued and outstanding— — Common stock $0.005 par value; 900,000,000 shares authorized; 442,664,000 and 441,825,000 shares issued and outstanding2 4 Additional paid-in capital6,884 7,031 Accumulated other comprehensive loss(1,829)(1,137)Retained earnings15,585 11,666 Total Costco stockholders’ equity20,642 17,564 Noncontrolling interests5 514 TOTAL EQUITY20,647 18,078 TOTAL LIABILITIES AND EQUITY$64,166 $59,268 Preferred stock $0.005 par value; 100,000,000 shares authorized; no shares issued and outstanding Common stock $0.005 par value; 900,000,000 shares authorized; 442,664,000 and 441,825,000 shares issued and outstanding The accompanying notes are an integral part of these consolidated financial statements.38 The accompanying notes are an integral part of these consolidated financial statements.38 The accompanying notes are an integral part of these consolidated financial statements. 38 Table of Contents Table of Contents

202320222021Net sales$237,710$222,730$192,052Less merchandise costs212,586199,382170,684Gross margin$25,124$23,348$21,368Gross margin percentage10.57 %10.48 %11.13 % Gross margin percentage increased nine basis points compared to 2022. Excluding the impact of gasoline price deflation on net sales, gross margin was 10.50%, an increase of two basis points. This two basis point increase was positively impacted by: 18 basis points due to a smaller LIFO charge in 2023 compared to 2022, and seven basis points due to core merchandise categories, predominantly foods and sundries. These were offset by: 16 basis points due to the downsizing and then discontinuation of our charter shipping activities; four basis points due to increased 2% rewards; and three basis points due to warehouse ancillary and other businesses, predominantly e-commerce, partially offset by gasoline and business centers. Changes in foreign currencies relative to the U.S. dollar negatively impacted gross margin by approximately $349, compared to 2022, attributable to our Canadian and Other International Operations. The gross margin in core merchandise categories, when expressed as a percentage of core merchandise sales (rather than total net sales), increased two basis points, driven by foods and sundries and non-foods, partially offset by fresh foods. This measure eliminates the impact of changes in sales penetration and gross margins from our warehouse ancillary and other businesses. Gross margin on a segment basis, when expressed as a percentage of the segment's own sales and excluding the impact of changes in gasoline prices on net sales (segment gross margin percentage), increased in our U.S. segment, due to a smaller LIFO charge and increases in core merchandise categories, primarily foods and sundries, partially offset by the charges related to the discontinuation of our charter shipping activities discussed above and warehouse ancillary and other businesses. Gross margin percentage increased in our Canada segment, attributable to increases in core merchandise categories and warehouse ancillary and other businesses. Our Other International gross margin percentage decreased, largely due to decreases in core merchandise categories, partially offset by warehouse ancillary and other businesses. All segments were negatively impacted by increased 2% rewards.

202220212020Net sales$222,730$192,052$163,220Less merchandise costs199,382170,684144,939Gross margin$23,348$21,368$18,281Gross margin percentage10.48 %11.13 %11.20 % Total gross margin percentage decreased 65 basis points compared to 2021. Excluding the impact of gasoline price inflation on net sales, gross margin was 10.94%, a decrease of 19 basis points. This was primarily due to a 33 basis-point decrease in core merchandise categories, predominantly driven by decreases in fresh foods and foods and sundries, and 19 basis points due to a LIFO charge for higher merchandise costs. Gross margin was also negatively impacted by one basis point due to increased 2% rewards. Warehouse ancillary and other businesses positively impacted gross margin by 29 basis points, predominantly gasoline, partially offset by e-commerce. Gross margin was positively impacted by five basis points due to the net impact of ceasing incremental wages related to COVID-19 and the negative impact of a one-time charge related to granting our employees one additional day of paid time off. Changes in foreign currencies relative to the U.S. dollar negatively impacted gross margin by approximately $176, compared to 2021, primarily attributable to our Other International Operations. The gross margin in core merchandise categories, when expressed as a percentage of core merchandise sales (rather than total net sales), decreased 27 basis points. The decrease was across all categories, most significantly in fresh foods. This measure eliminates the impact of changes in sales penetration and gross margins from our warehouse ancillary and other businesses. Gross margin on a segment basis, when expressed as a percentage of the segment's own sales and excluding the impact of changes in gasoline prices on net sales (segment gross margin percentage), decreased across all segments. All segments were negatively impacted due to decreases in core merchandise categories, partially offset by increases in warehouse ancillary and other businesses. Gross margin in our U.S. segment was also negatively impacted by the LIFO charge. Our Other International segment was negatively impacted by increased 2% rewards. All segments benefited from the ceasing of incremental wages related to COVID-19. 26 26 26 Table of Contents Table of Contents

The following table sets forth information on our common stock repurchase activity for the fourth quarter of 2023 (dollars in millions, except per share data): PeriodTotal Number of Shares PurchasedAverage Price Paid per ShareTotal Number of Shares Purchased as Part of Publicly Announced Program(1)Maximum Dollar Value of Shares that May Yet be Purchased under the ProgramMay 8—June 4, 2023107,000 $498.28 107,000 $3,740 June 5—July 2, 2023102,000 523.05 102,000 3,687 July 3—July 30, 202397,000 548.20 97,000 3,634 July 31—September 3, 2023127,000 550.58 127,000 3,563 Total fourth quarter433,000 $530.67 433,000

The following table sets forth information on our common stock repurchase activity for the fourth quarter of 2022 (dollars in millions, except per share data): PeriodTotal Number of Shares PurchasedAverage Price Paid per ShareTotal Number of Shares Purchased as Part of Publicly Announced Program(1)Maximum Dollar Value of Shares that May Yet be Purchased under the ProgramMay 9—June 5, 202298,000 $463.77 98,000 $2,947 June 6—July 3, 202298,000 467.53 98,000 2,901 July 4—July 31, 202289,000 512.08 89,000 2,856 August 1—August 28, 202288,000 545.08 88,000 2,808 Total fourth quarter373,000 $495.49 373,000

Net Sales 202320222021Net Sales$237,710$222,730$192,052Changes in net sales:U.S.7 %17 %16 %Canada4 %16 %22 %Other International9 %10 %23 %Total Company7 %16 %18 %Changes in comparable sales:U.S.3 %16 %15 %Canada2 %15 %20 %Other International3 %7 %19 %Total Company3 %14 %16 %E-commerce(6)%10 %44 %Changes in comparable sales excluding the impact of changes in foreign-currency and gasoline prices:U.S.4 %10 %14 %Canada8 %12 %12 %Other International8 %10 %13 %Total Company5 %11 %13 %E-commerce(5)%10 %43 % Net Sales Changes in net sales: Changes in comparable sales: Changes in comparable sales excluding the impact of changes in foreign-currency and gasoline prices: Net Sales Net sales increased $14,980 or 7% during 2023. The improvement was attributable to an increase in comparable sales of 3%, sales at new warehouses opened in 2022 and 2023, and one additional week of sales in 2023. Sales increased $12,761, or 7% in core merchandise categories, led by foods and sundries and fresh foods; while non-foods decreased. Sales increased $2,219, or 5% in warehouse ancillary and other businesses, led by pharmacy, food court, and travel. During 2023, changes in foreign currencies relative to the U.S. dollar negatively impacted net sales by approximately $3,484, 156 basis points, compared to 2022, attributable to our Canadian and Other International operations. The volume of gasoline sold increased approximately 7%, positively impacting net sales by $2,148, or 96 basis points. Lower gasoline prices negatively impacted net sales by $1,592, or 71 basis points, compared to 2022, with a 6% decrease in the average price per gallon. Comparable Sales Comparable sales increased 3% during 2023 and were positively impacted by increases in shopping frequency, partially offset by a decrease in average ticket.

Net Sales 202220212020Net Sales$222,730$192,052 $163,220Increases in net sales:U.S.17 %16 %9 %Canada16 %22 %5 %Other International10 %23 %13 %Total Company16 %18 %9 %Increases in comparable sales:U.S.16 %15 %8 %Canada15 %20 %5 %Other International7 %19 %9 %Total Company14 %16 %8 %Increases in comparable sales excluding the impact of changes in foreign currency and gasoline prices:U.S.10 %14 %9 %Canada12 %12 %7 %Other International10 %13 %11 %Total Company11 %13 %9 % Net Sales Increases in net sales: Increases in comparable sales: Increases in comparable sales excluding the impact of changes in foreign currency and gasoline prices: Net Sales Net sales increased $30,678 or 16% during 2022. The improvement was attributable to an increase in comparable sales of 14%, and sales at new warehouses opened in 2021 and 2022. Sales increased $15,830 in core merchandise categories and $14,848 in warehouse ancillary and other businesses. The rate of increase was strongest in our gasoline, business centers, and travel businesses. Sales continued to be impacted by inflation, higher than what we experienced in previous fiscal years. During 2022, higher gasoline prices positively impacted net sales by $9,230, 481 basis points, compared to 2021, with a 42% increase in the average price per gallon. The volume of gasoline sold increased approximately 22%, positively impacting net sales by $3,847, 200 basis points. Changes in foreign currencies relative to the U.S. dollar negatively impacted net sales by approximately $1,762, 92 basis points, compared to 2021, attributable primarily to our Other International operations. Comparable Sales Comparable sales increased 14% during 2022 and were positively impacted by increases in shopping frequency and average ticket, which includes the effects of inflation and changes in foreign currency. E-commerce comparable sales increased 10% during 2022, including inflation. 25 25 25 Table of Contents Table of Contents

53 Weeks Ended52 Weeks Ended52 Weeks EndedSeptember 3,2023August 28,2022August 29,2021REVENUENet sales$237,710 $222,730 $192,052 Membership fees4,580 4,224 3,877 Total revenue242,290 226,954 195,929 OPERATING EXPENSESMerchandise costs212,586 199,382 170,684 Selling, general and administrative21,590 19,779 18,537 Operating income8,114 7,793 6,708 OTHER INCOME (EXPENSE)Interest expense(160)(158)(171)Interest income and other, net533 205 143 INCOME BEFORE INCOME TAXES8,487 7,840 6,680 Provision for income taxes2,195 1,925 1,601 Net income including noncontrolling interests6,292 5,915 5,079 Net income attributable to noncontrolling interests— (71)(72)NET INCOME ATTRIBUTABLE TO COSTCO$6,292 $5,844 $5,007 NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO:Basic$14.18 $13.17 $11.30 Diluted$14.16 $13.14 $11.27 Shares used in calculation (000’s)Basic443,854 443,651 443,089 Diluted444,452 444,757 444,346 Net income attributable to noncontrolling interests

52 Weeks EndedAugust 28,2022August 29,2021August 30,2020REVENUENet sales$222,730 $192,052 $163,220 Membership fees4,224 3,877 3,541 Total revenue226,954 195,929 166,761 OPERATING EXPENSESMerchandise costs199,382 170,684 144,939 Selling, general and administrative19,779 18,537 16,387 Operating income7,793 6,708 5,435 OTHER INCOME (EXPENSE)Interest expense(158)(171)(160)Interest income and other, net205 143 92 INCOME BEFORE INCOME TAXES7,840 6,680 5,367 Provision for income taxes1,925 1,601 1,308 Net income including noncontrolling interests5,915 5,079 4,059 Net income attributable to noncontrolling interests(71)(72)(57)NET INCOME ATTRIBUTABLE TO COSTCO$5,844 $5,007 $4,002 NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO:Basic$13.17 $11.30 $9.05 Diluted$13.14 $11.27 $9.02 Shares used in calculation (000’s)Basic443,651 443,089 442,297 Diluted444,757 444,346 443,901 Net income attributable to noncontrolling interests

The emergence, severity, magnitude and duration of global or regional health crises are uncertain and difficult to predict. A pandemic, such as COVID-19, could affect certain business operations, demand for our products and services, in-stock positions, costs of doing business, availability of labor, access to inventory, supply chain operations, our ability to predict future performance, exposure to litigation, and our financial performance, among other things. Other factors and uncertainties include, but are not limited to: •The severity and duration of pandemics; •Evolving macroeconomic factors, including general economic uncertainty, unemployment rates, and recessionary pressures; •Changes in labor markets affecting us and our suppliers; •Unknown consequences on our business performance and initiatives stemming from the substantial investment of time and other resources to the pandemic response; •The pace of post-pandemic recovery; •The long-term impact of the pandemic on our business, including consumer behaviors; and •Disruption and volatility within the financial and credit markets.

The continuing impacts of the COVID-19 pandemic are highly unpredictable and volatile and are affecting certain business operations, demand for our products and services, in-stock positions, costs of doing business, availability of labor, access to inventory, supply chain operations, our ability to predict future performance, exposure to litigation, and our financial performance, among other things. 15 15 15 Table of Contents Table of Contents Other factors and uncertainties include, but are not limited to: •The severity and duration of the pandemic, including future mutations or related variants of the virus in areas in which we operate; •Evolving macroeconomic factors, including general economic uncertainty, unemployment rates, and recessionary pressures; •Changes in labor markets affecting us and our suppliers; •Unknown consequences on our business performance and initiatives stemming from the substantial investment of time and other resources to the pandemic response; •The pace of recovery when the pandemic subsides; •The long-term impact of the pandemic on our business, including consumer behaviors; and •Disruption and volatility within the financial and credit markets. To the extent that COVID-19 continues to adversely affect the U.S. and global economy, our business, results of operations, cash flows, or financial condition, it may also heighten other risks described in this section, including but not limited to those related to consumer behavior and expectations, competition, brand reputation, implementation of strategic initiatives, cybersecurity threats, payment-related risks, technology systems disruption, supply chain disruptions, labor availability and cost, litigation, operational risk as a result of remote work arrangements and regulatory requirements.

202320222021SG&A expenses$21,590$19,779$18,537SG&A expenses as a percentage of net sales9.08 %8.88 %9.65 % 24 24 24 Table of Contents Table of Contents SG&A expenses as a percentage of net sales increased 20 basis points compared to 2022. SG&A expenses as a percentage of net sales excluding the impact of gasoline price deflation was 9.02%, an increase of 14 basis points. The comparison to last year was negatively impacted by 16 basis points in warehouse operations and other businesses, largely driven by wage increases effective in March and July 2022, and March 2023, as well as lower sales growth. Central operating costs were also higher by six basis points. SG&A was positively impacted by eight basis points due to the prior year's write-off of information technology assets and a charge related to granting our employees additional vacation. Changes in foreign currencies relative to the U.S. dollar decreased SG&A expenses by approximately $281 compared to 2022, attributable to our Canadian and Other International Operations.

202220212020SG&A expenses$19,779$18,537$16,387SG&A expenses as a percentage of net sales8.88 %9.65 %10.04 % SG&A expenses as a percentage of net sales decreased 77 basis points compared to 2021. SG&A expenses as a percentage of net sales excluding the impact of gasoline price inflation was 9.26%, a decrease of 39 basis points. Warehouse operations and other businesses were lower by 17 basis points, largely attributable to leveraging increased sales. This includes the impact of the starting wage increase we instituted in October 2021, as well the increased wages and benefits that were effective on March 14, 2022, and July 4, 2022. SG&A expenses was benefited by a net of 16 basis points due to the positive impact of ceasing incremental wages related to COVID-19, partially offset by higher write-offs of certain information technology assets, and expenses related to granting our employees one additional day of paid time off. Central operating costs were lower by five basis points, and stock compensation expense was lower by one basis point. Changes in foreign currencies relative to the U.S. dollar decreased SG&A expenses by approximately $148, compared to 2021, primarily attributable to our Other International operations.

At August 28, 2022, we operated 838 membership warehouses: Own Landand BuildingLease Landand/orBuilding(1)TotalUnited States and Puerto Rico466 112 578 Canada90 17 107 Other International105 48 153 Total661 177 838 Lease Land and/or

53 Weeks Ended52 Weeks Ended52 Weeks Ended September 3,2023August 28,2022August 29,2021NET INCOME INCLUDING NONCONTROLLING INTERESTS$6,292 $5,915 $5,079 Foreign-currency translation adjustment and other, net24 (721)181 Comprehensive income6,316 5,194 5,260 Less: Comprehensive income attributable to noncontrolling interests— 36 93 COMPREHENSIVE INCOME ATTRIBUTABLE TO COSTCO$6,316 $5,158 $5,167

52 Weeks Ended August 28,2022August 29,2021August 30,2020NET INCOME INCLUDING NONCONTROLLING INTERESTS$5,915 $5,079 $4,059 Foreign-currency translation adjustment and other, net(721)181 162 Comprehensive income5,194 5,260 4,221 Less: Comprehensive income attributable to noncontrolling interests36 93 80 COMPREHENSIVE INCOME ATTRIBUTABLE TO COSTCO$5,158 $5,167 $4,141