FORWARD-LOOKING STATEMENTS



Certain statements contained in this document constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995. For these purposes, forward-looking statements are statements that address
activities, events, conditions or developments that the Company expects or
anticipates may occur in the future and may relate to such matters as net sales
growth, changes in comparable sales, cannibalization of existing locations by
new openings, price or fee changes, earnings performance, earnings per share,
stock-based compensation expense, warehouse openings and closures, capital
spending, the effect of adopting certain accounting standards, future financial
reporting, financing, margins, return on invested capital, strategic direction,
expense controls, membership renewal rates, shopping frequency, litigation, and
the demand for our products and services. In some cases, forward-looking
statements can be identified because they contain words such as "anticipate,"
"believe," "continue," "could," "estimate," "expect," "intend," "likely," "may,"
"might," "plan," "potential," "predict," "project," "seek," "should," "target,"
"will," "would," or similar expressions and the negatives of those terms. Such
forward-looking statements involve risks and uncertainties that may cause actual
events, results, or performance to differ materially from those indicated by
such statements. These risks and uncertainties include, but are not limited to,
domestic and international economic conditions, including exchange rates,
inflation or deflation, the effects of competition and regulation, uncertainties
in the financial markets, consumer and small-business spending patterns and debt
levels, breaches of security or privacy of member or business information,
conditions affecting the acquisition, development, ownership or use of real
estate, capital spending, actions of vendors, rising costs associated with
employees (generally including health-care costs), energy and certain
commodities, geopolitical conditions (including tariffs and the Ukraine
conflict), the ability to maintain effective internal control over financial
reporting, regulatory and other impacts related to climate change, and COVID-19
related factors and challenges, including (among others) the duration of the
pandemic, the unknown long-term economic impact, reduced shopping due to
illness, travel restrictions or financial hardship, shifts in demand for
products, reduced workforces due to illness, quarantine, or government mandates,
temporary store closures or operational limitations due to government mandates,
or supply-chain disruptions, capacity constraints of third-party logistics
suppliers, and other risks identified from time to time in the Company's public
statements and reports filed with the Securities and Exchange Commission (SEC).
Forward-looking statements speak only as of the date they are made, and the
Company does not undertake to update these statements, except as required by
law.

OVERVIEW

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 condensed consolidated financial
statements and the accompanying Notes to Financial Statements (Part I, Item 1 of
this Form 10-Q), as well as our consolidated financial statements, the
accompanying Notes to Financial Statements, and the related 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.

We operate membership warehouses and e-commerce websites based on the concept
that offering our members low prices on a limited selection of
nationally-branded and private-label products in a wide range of categories will
produce high sales volumes and rapid inventory turnover. When combined with the
operating efficiencies achieved by volume purchasing, efficient distribution and
reduced handling of merchandise in no-frills, self-service warehouse facilities,
these volumes and turnover enable us to operate profitably at significantly
lower gross margins (net sales less merchandise costs) than most other
retailers. We generally sell inventory before we are required to pay for it,
even while taking advantage of early payment discounts.
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We believe that the most important driver of our profitability is increasing net
sales, particularly comparable sales growth. Net sales includes our core
merchandise categories (foods and sundries, non-foods, and fresh foods),
warehouse ancillary (includes 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); 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 certain of our selling,
general and administrative (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" on quality goods - consistently providing the
most competitive values. Our investments in merchandise pricing may include
reducing prices on merchandise to drive sales or meet competition and holding
prices steady despite cost increases instead of passing the increases on to our
members, all negatively impacting gross margin as a percentage of net sales
(gross margin percentage). We believe our gasoline business draws members, 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-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, the United
States and the United Kingdom, have created uncertainty with respect to how
tariffs will affect 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. Merchandise costs in the second quarter and first
half of 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. While
these potential impacts are uncertain, they could have an adverse impact on 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 operating floor space square footage growth is generally
higher in foreign markets, due to the smaller base in those markets, and we
expect that to continue. 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.
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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 our longer-term
objectives of reducing employee turnover and enhancing employee satisfaction
require 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 selling, general and administrative 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 9   to the condensed consolidated
financial statements included in Part I, Item 1, 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 references
to the differences between the foreign-exchange rates we use to convert the
financial results of our international operations from local currencies into
U.S. dollars for financial reporting purposes. 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 the
second quarter of 2022 and 2021 relate to the 12-week fiscal quarters ended
February 13, 2022, and February 14, 2021. References to the first half of 2022
and 2021 relate to the 24 weeks ended February 13, 2022, and February 14, 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 the second quarter of 2022 versus 2021 include:



•Net sales increased 16% to $50,937, driven by an increase in comparable sales
of 14% and sales at 25 net new warehouses opened since the end of the second
quarter of 2021;
•Membership fee revenue increased 10% to $967, driven by new member sign-ups,
upgrades to Executive Membership, and an increase in our renewal rate;
•Gross margin percentage decreased 32 basis points, driven primarily by our core
merchandise categories, partially offset by our warehouse ancillary and other
businesses, primarily gasoline;
•SG&A expenses as a percentage of net sales decreased 94 basis points, primarily
due to leveraging increased sales and ceasing of incremental wages related to
COVID-19;
•Net income was $1,299, $2.92 per diluted share, compared to $951, $2.14 per
diluted share in 2021;
•On January 20, 2022 our board declared a quarterly cash dividend of $0.79 per
share, which was paid on February 18, 2022; and
•Subsequent to the end of the quarter, in mid-March we will be increasing
various wages and benefits, consistent with the three-year cycle on which this
has been done historically. Most
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significant are increases of a minimum of fifty cents per hour for U.S. and
Canada wage scales. Certain other bonuses and benefits will be increasing for
many employees. The estimated incremental annualized pre-tax costs of these
increases, after considering our normal annual increases is approximately $275.
Further, an additional $85 will be recorded in the third fiscal quarter related
to a one-time true-up to accrued benefits, related to these wage and benefit
changes.

COVID-19

The COVID-19 pandemic continued to impact our business in the second quarter of
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 the second quarter and
first half of fiscal 2021, we paid $246 and $458 in incremental wages related to
COVID-19, which ceased in February 2021.

RESULTS OF OPERATIONS

Net Sales
                                                            12 Weeks Ended                              24 Weeks Ended
                                                  February 13,          February 14,          February 13,          February 14,
                                                      2022                  2021                  2022                  2021
Net Sales                                        $     50,937          $     43,888          $    100,354          $     86,235
Changes in net sales:
U.S                                                        17  %                 13  %                 17  %                 14  %
Canada                                                     17  %                 15  %                 18  %                 16  %
Other International                                        10  %                 25  %                 14  %                 24  %
Total Company                                              16  %                 15  %                 16  %                 16  %
Changes in comparable sales:
U.S                                                        16  %                 11  %                 15  %                 13  %
Canada                                                     16  %                 13  %                 17  %                 15  %
Other International                                         6  %                 22  %                 10  %                 20  %
Total Company                                              14  %                 13  %                 15  %                 14  %
Changes in comparable sales excluding the impact
of changes in foreign-currency and gasoline
prices:
U.S                                                        11  %                 13  %                 11  %                 15  %
Canada                                                     12  %                 11  %                 10  %                 14  %
Other International                                         9  %                 18  %                 10  %                 18  %
Total Company                                              11  %                 13  %                 11  %                 15  %


Net Sales

Net sales increased $7,049 or 16%, and $14,119 or 16% during the second quarter
and first half of 2022. This improvement was attributable to an increase in
comparable sales of 14% and 15% in the second quarter and first half of 2022,
and sales at the 25 net new warehouses opened since the end of the second
quarter of 2021. While sales in all core merchandise categories and warehouse
ancillary and other businesses increased, 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 the first quarter of
fiscal 2022.
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During the second quarter of 2022, higher gasoline prices positively impacted
net sales by $1,713, or 390 basis points, compared to 2021, with a 44% increase
in the average price per gallon. The volume of gasoline sold increased
approximately 25%, positively impacting net sales by $814, or 185 basis points.
Changes in foreign currencies relative to the U.S. dollar negatively impacted
net sales by approximately $281, or 64 basis points, compared to the second
quarter of 2021, primarily attributable to our Other International operations.

During the first half of 2022, higher gasoline prices positively impacted net
sales by $3,559, or 413 basis points, compared to 2021, with a 46% increase in
the average price per gallon. The volume of gasoline sold increased
approximately 26%, positively impacting net sales by $1,620, or 188 basis
points. Changes in foreign currencies relative to the U.S. dollar positively
impacted net sales by approximately $101, or 12 basis points, compared to the
first half of 2021, primarily attributable to our Canadian operations, partially
offset by our Other International operations.

Comparable Sales



Comparable sales increased 14% and 15% in the second quarter and first half of
2022, and were positively impacted by increases in shopping frequency and the
average ticket, which includes the effects of inflation and changes in foreign
currency. E-commerce comparable sales increased 13% in the second quarter and
first half of 2022.

Membership Fees
                                     12 Weeks Ended                      24 Weeks Ended
                             February 13,      February 14,      February 13,      February 14,
                                 2022              2021              2022              2021
Membership fees             $       967       $      881        $     1,913       $     1,742
Membership fees increase             10  %             8   %             10  %              8  %
Total paid members (000s)        63,400           59,700                  -                 -
Total cardholders (000s)        114,800          108,300                  -                 -


Membership fee revenues increased 10% in both the second quarter and first half
of 2022, driven by sign-ups and upgrades to Executive Membership. At the end of
the second quarter of 2022, our member renewal rates were 92% 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. Our membership counts include active
memberships as well as memberships that have not renewed within the 12 months
prior to the reporting date.
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Gross Margin
                                     12 Weeks Ended                        24 Weeks Ended
                            February 13,       February 14,       February 13,       February 14,
                                2022               2021               2022               2021
Net sales                  $     50,937       $     43,888       $    100,354       $     86,235
Less merchandise costs           45,517             39,078             89,469             76,536
Gross margin               $      5,420       $      4,810       $     10,885       $      9,699
Gross margin percentage           10.64  %           10.96  %           10.85  %           11.25  %


Quarterly Results

The gross margin of core merchandise categories, when expressed as a percentage
of core merchandise sales (rather than total net sales), decreased 28 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.

Total gross margin percentage decreased 32 basis points compared to the second
quarter of 2021. Excluding the impact of gasoline price inflation on net sales,
gross margin percentage was 11.01%, an increase of five basis points. This was
primarily due to a 49 basis-point increase in warehouse ancillary and other
businesses, predominantly gasoline. Gross margin was also positively impacted by
14 basis points due to decreased incremental wages related to COVID-19, which
ended February 28, 2021. Gross margin was negatively impacted due to a 43
basis-point decrease in all core merchandise categories, predominantly fresh
foods and foods and sundries, 14 basis points due to a LIFO charge for higher
merchandise costs, and one basis-point due to increased 2% rewards. Changes in
foreign currencies relative to the U.S. dollar negatively impacted gross margin
by approximately $31, compared to the second quarter of 2021, primarily
attributable to our Other International operations.

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. and Canadian segment,
due to warehouse ancillary and other businesses and ceasing of incremental wages
related to COVID-19, partially offset by core merchandise categories. Our U.S.
segment was also negatively impacted due to the LIFO charge. Gross margin
percentage decreased in our Other International segment due to decreases in core
merchandise categories and increased 2% rewards, partially offset by warehouse
ancillary and other businesses and ceasing of incremental wages related to
COVID-19.

Year-to-date Results



The gross margin of core merchandise categories, when expressed as a percentage
of core merchandise sales (rather than total net sales), decreased 23 basis
points. The decrease was primarily due to fresh foods, and foods and sundries,
partially offset by non-foods.

Total gross margin percentage decreased 40 basis points compared to the first
half of 2021. Excluding the impact of gasoline price inflation on net sales,
gross margin percentage was flat as compared to the first half of 2021.
Warehouse ancillary and other businesses, predominantly gasoline, increased 31
basis points. Gross margin was also positively impacted by 13 basis points due
to ceasing of incremental wages related to COVID-19. Gross margin was negatively
impacted due to a 34 basis-point decrease in core merchandise categories,
predominantly foods and sundries, and fresh foods. Gross margin was also
negatively impacted by nine basis points due to a LIFO charge for higher
merchandise costs and one basis-point due to increased 2% rewards.

The segment gross margin percentage increased in our U.S. segment and performed
similarly to the quarterly results above. Gross margin percentage decreased in
our Canadian segment, primarily due to decreases in core merchandise categories
partially offset by warehouse ancillary and other businesses.
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Gross margin percentage decreased in our Other International segment due to decreases in core merchandise categories and increased 2% rewards, partially offset by increases in warehouse ancillary and other businesses. All our segments benefited from the ceasing of incremental wages related to COVID-19.

Selling, General and Administrative Expenses


                                                       12 Weeks Ended                            24 Weeks Ended
                                              February 13,         February 14,         February 13,         February 14,
                                                  2022                 2021                 2022                 2021
SG&A expenses                                $     4,575          $     4,351          $     9,293          $     8,671
SG&A expenses as a percentage of net sales          8.98  %              9.92  %              9.26  %             10.06  %


Quarterly Results

SG&A expenses as a percentage of net sales decreased 94 basis points. Excluding
the impact of gasoline price inflation the decrease was 63 basis points. Ceasing
incremental COVID-19 wages reduced expenses by 42 basis points. Central
operating costs were lower by 10 basis points and warehouse operations and other
businesses were lower by nine basis points, largely attributable to leveraging
increased sales. Stock compensation expense was lower by two basis points.
Changes in foreign currencies relative to the U.S. dollar positively impacted
SG&A expenses by approximately $23, compared to the second quarter of 2021,
primarily attributable to our Other International operations.

Year-to-date Results



SG&A expenses as a percentage of net sales decreased 80 basis points compared to
the first half of 2021. Excluding the impact of gasoline price inflation the
decrease was 46 basis points. SG&A expenses were positively impacted by a net 28
basis points due to the ceasing of incremental wages related to COVID-19,
partially offset by a write-off of certain information technology assets.
Warehouse operations and other businesses were lower by 10 basis points, largely
attributable to payroll and benefits, primarily due to leveraging increased
sales. Central operating costs were lower by eight basis points. Stock
compensation expense was lower by one basis point. Pre-opening expenses were
higher by one basis point.

The first half of fiscal 2022 includes the permanent $1 increase for hourly
employees in our warehouses and distribution channels that began in March 2021,
and beginning in October 2021, the additional starting wage increase from $16
and $16.50 to $17 and $18.

Interest Expense
                               12 Weeks Ended                        24 Weeks Ended
                       February 13,       February 14,       February 13,       February 14,
                           2022               2021               2022               2021
Interest expense     $     36            $         40      $     75            $         79

Interest expense is primarily related to Senior Notes. Interest expense decreased in the second quarter and first half of 2022 due to early repayment of the 2.300% Senior Notes on December 1, 2021.


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Interest Income and Other, Net


                                                              12 Weeks Ended                                24 Weeks Ended
                                                    February 13,           February 14,           February 13,           February 14,
                                                        2022                   2021                   2022                   2021
Interest income                                   $       6               $         11          $      15               $         21
Foreign-currency transaction gains (losses), net         12                         (1)                38                          7
Other, net                                                7                          9                 14                         20
Interest income and other, net                    $      25               $         19          $      67               $         48


Interest income decreased in the second quarter and first half of 2022 due to
lower interest rates, partially offset by higher average cash and investment
balances. Foreign-currency transaction gains (losses), net include the
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
Item 8, Note 1 of our Annual Report on Form 10-K, for the fiscal year ended
August 29, 2021.

Provision for Income Taxes


                                      12 Weeks Ended                      24 Weeks Ended
                              February 13,      February 14,      February 13,      February 14,
                                  2022              2021              2022              2021

Provision for income taxes $ 481 $ 348 $ 832 $ 587 Effective tax rate

                  26.7  %          26.4   %

23.8 % 21.5 %




The effective tax rate for the first half of 2022 was impacted by net discrete
tax benefits of $91, which primarily related to the first quarter. This included
$91 of excess tax benefits related to stock compensation. Excluding discrete net
tax benefits, the tax rate was 26.4% for the first half of 2022.

The effective tax rate for the first half of 2021 was impacted by net discrete
tax benefits of $136, which was primarily related to the first quarter. This
included $75 of excess tax benefits related to stock compensation and $70
related to the special cash dividend paid through the 401(k) plan. Excluding net
discrete tax benefits, the tax rate was 26.4% for the first half of 2021.

LIQUIDITY AND CAPITAL RESOURCES



The following table summarizes our significant sources and uses of cash and cash
equivalents:

                                                       24 Weeks Ended
                                              February 13,       February 14,
                                                  2022               2021

Net cash provided by operating activities $ 3,659 $ 2,685 Net cash used in investing activities

               (1,393)

(1,037)


Net cash used in financing activities               (1,667)

(5,350)




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 $12,296 and $12,175 at February 13, 2022, and
August 29, 2021. Of these balances, unsettled credit and debit card receivables
represented approximately $1,993 and $1,816 at February 13, 2022, and August 29,
2021. These receivables generally settle within four days.

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.


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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 primarily relate 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. Management also believes that our U.S. current and projected asset
position is sufficient to meet U.S. liquidity and capital requirements.

Cash Flows from Operating Activities



Net cash provided by operating activities totaled $3,659 in the first half
of 2022, compared to $2,685 in the first half of 2021. Our cash flow provided by
operations is primarily derived 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 how fast inventory is sold,
the forward deployment of inventory to accelerate delivery times to our members,
payment terms with our suppliers, and the amount paid early to obtain discounts
from our suppliers.

Cash Flows from Investing Activities

Net cash used in investing activities totaled $1,393 in the first half of 2022, compared to $1,037 in the first half of 2021, and is primarily related to capital expenditures. Net cash from investing activities also includes purchases and maturities of short-term investments.

Capital Expenditure Plans



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 the first half of 2022, we spent
$1,778 on capital expenditures, and it is our current intention to spend
approximately $4,000 during fiscal year 2022. These expenditures are expected to
be financed with cash from operations, existing cash and cash equivalents, and
short-term investments. We opened 14 new warehouses, including one relocation,
in the first half of 2022 and plan to open 15 to 18 additional new warehouses,
including up to three relocations, in the remainder of fiscal 2022. There can be
no assurance that current expectations will be realized and plans are subject to
change upon changes in capital expenditure needs or the economic environment.

Cash Flows from Financing Activities

Net cash used in financing activities totaled $1,667 in the first half of 2022, compared to $5,350 in the first half of 2021. Cash flow used in financing activities was primarily related to repayments of our 2.300% Senior Notes, withholding taxes on stock-based awards, the payment of dividends, and repurchases of common stock. In the first half of 2021, cash flow used in financing was primarily due to the payment of a special dividend.

Dividends



On January 20, 2022, our Board declared a quarterly cash dividend of $0.79 per
share payable to shareholders of record on February 4, 2022, which was paid on
February 18, 2022.

Share Repurchase Program

During the first half of 2022 and 2021, we repurchased 236,000 and 521,000 shares of common stock, at an average price per share of $498.00 and $361.52, totaling approximately $118 and $189. These


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amounts may differ from the repurchase balances in the accompanying condensed
consolidated statements of cash flows due to changes in unsettled repurchases at
the end of a quarter. 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.

Bank Credit Facilities and Commercial Paper Programs



We maintain bank credit facilities for working capital and general corporate
purposes. At February 13, 2022, we had borrowing capacity under these facilities
of $1,034. Our international operations maintain $550 of the total borrowing
capacity under bank credit facilities, of which $195 is guaranteed by the
Company. Short-term borrowings outstanding under the bank credit facilities were
immaterial at the end of the second quarter of 2022, and at the end of 2021.

The Company has letter of credit facilities, for commercial and standby letters
of credit, totaling $229. The outstanding commitments under these facilities at
the end of the second quarter of 2022 totaled $201, most of which were standby
letters of credit which do not expire or have expiration dates within one year.
The bank credit facilities have various expiration dates, most of which are
within one year, and we generally intend to renew these facilities. The amount
of borrowings available at any time under our bank credit facilities is reduced
by the amount of standby and commercial letters of credit outstanding.

Critical Accounting Estimates



The preparation of our consolidated financial statements in accordance with U.S.
GAAP requires that we make estimates and judgments. We base these on historical
experience and on assumptions that we believe to be reasonable. Our critical
accounting policies are discussed in Part II, Item 7, "Management's Discussion
and Analysis of Financial Condition and Results of Operations" section of our
Annual Report on Form 10-K, for the fiscal year ended August 29, 2021. There
have been no material changes to the critical accounting policies previously
disclosed in that Report.

Recent Accounting Pronouncements



There have been no material changes in recently issued or adopted accounting
standards from those disclosed in our Annual Report on Form 10-K, for the fiscal
year ended August 29, 2021.

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