Note 10—Subsequent Events

On November 28, 2012, the Board of Directors declared a special cash dividend on Costco common stock of $7.00 per share, which was paid on December 18, 2012, to shareholders of record as of the close of business on December 10, 2012 (the special cash dividend). The aggregate amount of payment made in connection with the special cash dividend was approximately $3,049.

Employees of Costco, through the Company’s 401(k) Retirement Plan, own approximately 22,600,000 shares of Company stock, which are held through an Employee Stock Ownership Plan. As dividends paid on these shares are deductible for U.S. income tax purposes, the Company will recognize a discrete income tax benefit during the second quarter of fiscal 2013 of approximately $62 in connection with the special cash dividend.

As required by the Company’s Sixth Restated 2002 Plan, adjustments were made to equity awards outstanding on the dividend record date to preserve the value of such awards as a result of the special cash dividend, as follows: (i) the number of shares subject to outstanding restricted stock units was proportionately increased and (ii) the exercise prices of outstanding non-qualified stock options were proportionately reduced and the number of shares subject to such options was proportionately increased. There will be no impact to the Company’s stock compensation expense as a result of these adjustments.

Additionally, on December 7, 2012, the Company issued $3,500 in aggregate principal amount of Senior Notes as follows:

The proceeds from the issuance of these Senior Notes were used primarily to pay the special cash dividend. The balance of approximately $450 will be used for general corporate purposes.