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. Merchandise costs in the third quarter and first
thirty-six weeks 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. 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, the chartering of container vessels and leasing of containers 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 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. 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
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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.

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 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 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 third
quarter of 2022 and 2021 relate to the 12-week fiscal quarters ended May 8,
2022, and May 9, 2021. References to the first thirty-six weeks of 2022 and 2021
relate to the 36 weeks ended May 8, 2022, and May 9, 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 of the third quarter of 2022 compared to 2021 include:

•Net sales increased 16% to $51,612, driven by an increase in comparable sales
of 15% and sales at 20 net new warehouses opened since the end of the third
quarter of 2021;
•Membership fee revenue increased 9% to $984, driven by new member sign-ups,
upgrades to Executive Membership, and an increase in our renewal rate;
•Gross margin percentage decreased 99 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 84 basis points, primarily
due to leveraging increased sales;
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•We incurred a one-time $77 pretax charge, primarily related to granting our
employees one additional day of vacation under the new employee agreement that
was effective March 14, 2022;
•Net income was $1,353, $3.04 per diluted share, compared to $1,220, $2.75 per
diluted share in 2021; and
•On April 13, 2022, our board declared a quarterly cash dividend of $0.90 per
share, which was paid on May 13, 2022.

COVID-19[feminine]

The COVID-19 pandemic continued to impact our business in the third 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 third quarter and
first thirty-six weeks of fiscal 2021, we paid $57 and $515 in incremental wages
related to COVID-19, which ceased in February 2021.

RESULTS OF OPERATIONS

Net sales

                                                        12 Weeks Ended                       36 Weeks Ended
                                                   May 8,            May 9,             May 8,             May 9,
                                                    2022              2021               2022               2021
Net Sales                                        $ 51,612          $ 44,376          $ 151,966          $ 130,611
Changes in net sales:
U.S                                                    18  %             19  %              17  %              16  %
Canada                                                 16  %             34  %              17  %              22  %
Other International                                     9  %             27  %              12  %              25  %
Total Company                                          16  %             22  %              16  %              18  %
Changes in comparable sales:
U.S                                                    17  %             18  %              16  %              15  %
Canada                                                 15  %             32  %              16  %              20  %
Other International                                     6  %             23  %               8  %              21  %
Total Company                                          15  %             21  %              15  %              16  %
Changes in comparable sales excluding the impact
of changes in foreign-currency and gasoline
prices:
U.S                                                    11  %             15  %              11  %              15  %
Canada                                                 13  %             17  %              11  %              15  %
Other International                                     9  %             13  %              10  %              16  %
Total Company                                          11  %             15  %              11  %              15  %


Net Sales

Net sales increased $7,236 or 16%, and $21,355 or 16% during the third quarter
and first thirty-six weeks of 2022. This improvement was attributable to an
increase in comparable sales of 15% in both the third quarter and first
thirty-six weeks of 2022, and sales at the 20 net new warehouses opened since
the end of the third quarter of 2021. While sales increased in all core
merchandise categories and 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
the comparable periods of 2021 and earlier this fiscal year.
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During the third quarter of 2022, higher gasoline prices positively impacted net
sales by $2,270, 511 basis points, compared to 2021, with a 42% increase in the
average price per gallon. The volume of gasoline sold increased approximately
24%, positively impacting net sales by $1,082, 244 basis points. Changes in
foreign currencies relative to the U.S. dollar negatively impacted net sales by
approximately $476, 107 basis points, compared to the third quarter of 2021,
primarily attributable to our Other International operations.

During the first thirty-six weeks of 2022, higher gasoline prices positively
impacted net sales by $5,829, 446 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 $2,701, 207 basis points.
Changes in foreign currencies relative to the U.S. dollar negatively impacted
net sales by approximately $379, 29 basis points, compared to the first
thirty-six weeks of 2021, primarily attributable to our Other International
operations, partially offset by our Canadian operations.

Comparable sales

Comparable sales increased 15% in both the third quarter and first thirty-six
weeks of 2022, and were positively impacted by increases in the average ticket
and shopping frequency, which includes the effects of inflation and changes in
foreign currency. E-commerce comparable sales increased 7% and 11% in the third
quarter and first thirty-six weeks of 2022.

Membership Fees
                                  12 Weeks Ended               36 Weeks Ended
                              May 8,         May 9,         May 8,        May 9,
                               2022           2021           2022          2021
Membership fees             $    984       $    901       $ 2,897       $ 2,643
Membership fees increase           9  %          11  %         10  %          9  %
Total paid members (000s)     64,400         60,600             -             -
Total cardholders (000s)     116,600        109,800             -             -


Membership fee revenues increased 9% and 10% in the third quarter and first
thirty-six weeks of 2022, driven by sign-ups and upgrades to Executive
Membership. At the end of the third 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                 36 Weeks Ended
                             May 8,         May 9,          May 8,          May 9,
                              2022           2021            2022            2021
Net sales                  $ 51,612       $ 44,376       $ 151,966       $ 130,611
Less merchandise costs       46,355         39,415         135,824         115,951
Gross margin               $  5,257       $  4,961       $  16,142       $  14,660
Gross margin percentage       10.19  %       11.18  %        10.62  %        11.22  %


Quarterly Results

Total gross margin percentage decreased 99 basis points compared to the third
quarter of 2021. Excluding the impact of gasoline price inflation on net sales,
gross margin percentage was 10.65%, a decrease of 53 basis points. This was
primarily due to a 46 basis-point decrease in core merchandise categories, due
to decreases in fresh foods and non-foods and 27 basis points due to a LIFO
charge for higher merchandise costs. Gross margin was positively impacted by 18
basis points related to our warehouse ancillary and other businesses,
predominantly gasoline, and three basis points due to 2% rewards. Gross margin
was negatively impacted by one basis point due to the net impact of a one-time
charge related to granting our employees one additional day of vacation under
the new employee agreement and the ceasing of incremental wages related to
COVID-19. We expect the LIFO charge in our fourth quarter of fiscal 2022 to be
substantially higher than the fourth quarter of fiscal 2021. Changes in foreign
currencies relative to the U.S. dollar negatively impacted gross margin by
approximately $51, compared to the third quarter of 2021.

The gross margin of core merchandise categories, when expressed as a percentage
of core merchandise sales (rather than total net sales), decreased 39 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. Our U.S.
segment performed similarly to the results above. Gross margin percentage in our
Canadian segment was negatively impacted due to decreases in core merchandise
categories and warehouse ancillary and other businesses. Gross margin percentage
in our Other International segment was negatively impacted due to decreases in
core merchandise categories, partially offset by warehouse ancillary and other
businesses. Our Other International segment was also negatively impacted due to
increased 2% rewards. All our segments benefited from the ceasing of incremental
wages related to COVID-19.

Year-to-date Results

Total gross margin percentage decreased 60 basis points compared to the first
thirty-six weeks of 2021. Excluding the impact of gasoline price inflation on
net sales, gross margin was 11.05%, a decrease of 17 basis points. This was
primarily due to a 38 basis-point decrease in core merchandise categories,
predominantly driven by decreases in fresh foods and foods and sundries, and 15
basis points due to a LIFO charge for higher merchandise costs. Warehouse
ancillary and other businesses positively impacted gross margin by 27 basis
points, predominantly gasoline. Gross margin was positively impacted by nine
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 vacation under the new employee agreement.
Changes in foreign currencies relative to the U.S. dollar negatively impacted
gross margin by approximately $43, compared to the first thirty-six weeks of
2021, attributable to our Other International operations, partially offset by
our Canadian operations.
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Core merchandise category gross margin, when expressed as a percentage of core merchandise sales (rather than total net sales), decreased by 28 basis points. The decline occurred in all categories, especially in fresh foods.

The segment gross margin percentage decreased in our U.S. and Canadian segment.
Gross margin decreased in core merchandise categories, partially offset by
warehouse ancillary and other businesses. Our U.S. segment was also negatively
impacted due to the LIFO charge. The 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               36 Weeks Ended
                                               May 8,        May 9,        May 8,         May 9,
                                                2022          2021          2022           2021
SG&A expenses                                $ 4,450       $ 4,199       $ 13,743       $ 12,870
SG&A expenses as a percentage of net sales      8.62  %       9.46  %        9.04  %        9.85  %


Quarterly Results

SG&A expenses as a percentage of net sales decreased 84 basis points. Excluding
the impact of gasoline price inflation the decrease was 44 basis points.
Warehouse operations and other businesses were lower by 35 basis points, largely
attributable to leveraging increased sales. This includes the impact of the
starting wage increase we instituted in October 2021, as well as eight weeks of
the increased wages and benefits that were effective on March 14, 2022. Central
operating costs were lower by 10 basis points, and stock compensation expense
was lower by one basis point. SG&A was negatively impacted by two basis points
due to the net impact of a one-time charge related to granting our employees one
additional day of vacation under the new employee agreement and the ceasing of
incremental wages related to COVID-19. Changes in foreign currencies relative to
the U.S. dollar positively impacted SG&A expenses by approximately $39, compared
to the third quarter of 2021.

Results since the beginning of the year

SG&A expenses as a percentage of net sales decreased 81 basis points compared to
the first thirty-six weeks of 2021. Excluding the impact of gasoline price
inflation the decrease was 45 basis points. Warehouse operations and other
businesses were lower by 18 basis points, largely attributable to leveraging
increased sales. This includes the impact of the starting wage increase we
instituted in October 2021 as well as eight weeks of the increased wages and
benefits that were effective on March 14, 2022. SG&A was positively impacted by
a net 18 basis points due to ceasing incremental wages related to COVID-19, a
write-off of certain information technology assets and a one-time charge related
to granting our employees one additional day of vacation under the new employee
agreement. Central operating costs were lower by eight basis points, and stock
compensation expense was lower by one basis point. Changes in foreign currencies
relative to the U.S. dollar positively impacted SG&A expenses by approximately
$37, compared to the third quarter of 2021, primarily attributable to our Other
International operations.

Interest Expense
                            12 Weeks Ended                  36 Weeks Ended
                          May 8,          May 9,          May 8,         May 9,
                           2022            2021            2022           2021
Interest expense     $     35            $    40      $    110          $  119

Interest expense relates primarily to senior notes. Interest expense decreased in the third quarter and first thirty-six weeks of 2022 due to the prepayment of 2.300% senior bonds on December 1, 2021.

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Interest income and other, net

                                                             12 Weeks Ended                            36 Weeks Ended
                                                       May 8,                May 9,               May 8,               May 9,
                                                        2022                  2021                 2022                 2021
Interest income                                   $       6               $       8          $      21              $      29
Foreign-currency transaction gains, net                  56                       6                 94                     13
Other, net                                                9                      13                 23                     33
Interest income and other, net                    $      71               $      27          $     138              $      75


Foreign-currency transaction gains, 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             36 Weeks Ended
                               May 8,       May 9,       May 8,        May 9,
                                2022         2021         2022          2021
Provision for income taxes   $   455       $ 417       $ 1,287       $ 1,004
Effective tax rate              24.9  %     25.2  %       24.2  %       22.9  %


The effective tax rate for the first thirty-six weeks of 2022 was impacted by
net discrete tax benefits of $114, which were 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 26.3% for the first
thirty-six weeks of 2022.

The effective tax rate for the first thirty-six weeks of 2021 was impacted by
net discrete tax benefits of $157, which was primarily related to the first
quarter. This included $75 of excess tax benefits related to stock compensation,
$70 related to the special cash dividend paid through the 401(k) plan, and $19
primarily 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 the first thirty-six weeks of 2021.

CASH AND CAPITAL RESOURCES

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

                                                 36 Weeks Ended
                                              May 8,       May 9,
                                               2022         2021

Net cash flow generated by operating activities $4,886 $6,018
Net cash used in investing activities (2,428) (2,380) Net cash used in financing activities (2,343) (5,769)


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 $11,831 and $12,175 at May 8, 2022, and
August 29, 2021. Of these balances, unsettled credit and debit card receivables
represented approximately $2,152 and $1,816 at May 8, 2022, and August 29, 2021.
These receivables generally settle within four days.

Significant contractual obligations arising in the normal course of business consist primarily 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 current and projected U.S. asset
position is sufficient to meet U.S. liquidity and capital requirements.

Cash flow from operating activities

Net cash provided by operating activities totaled $4,886 in the first thirty-six
weeks of 2022, compared to $6,018 in the first thirty-six weeks 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, earlier than usual purchasing in anticipation of
cost increases, payment terms with our suppliers, and the amount paid early to
obtain discounts from our suppliers.

Cash flow from investing activities

Net cash used in investing activities totaled $2,428 in the first thirty-six
weeks of 2022, compared to $2,380 in the first thirty-six weeks 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 thirty-six weeks of
2022, we spent $2,632 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 17 new warehouses, including
three relocations, in the first thirty-six weeks of 2022 and plan to open 10
additional new warehouses 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 flow from financing activities

Net cash used in financing activities totaled $2,343 in the first thirty-six
weeks of 2022, compared to $5,769 in the first thirty-six weeks of 2021. Cash
flow used in financing activities was primarily related to repayments of our
2.300% Senior Notes, the payment of dividends, withholding taxes on stock-based
awards, and repurchases of common stock. In the first thirty-six weeks of 2021,
cash flow used in financing was primarily due to the payment of a special
dividend.

Dividends

On April 13, 2022, our Board declared a quarterly cash dividend of $0.90 per
share payable to shareholders of record on April 29, 2022, which was paid on
May 13, 2022.
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Share Repurchase Program

During the first thirty-six weeks of 2022 and 2021, we repurchased 490,000 and
1,040,000 shares of common stock, at an average price per share of $523.61 and
$353.87, totaling approximately $257 and $368. These 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 May 8, 2022, we had borrowing capacity under these facilities of
$1,006. Our international operations maintain $522 of this capacity under bank
credit facilities, of which $182 is guaranteed by the Company. Short-term
borrowings outstanding under the bank credit facilities were immaterial at the
end of the third quarter of 2022 and at the end of 2021.

The Company has letter of credit facilities, for commercial and standby letters
of credit, totaling $225. The outstanding commitments under these facilities at
the end of the third quarter of 2022 totaled $198, most of which were standby
letters of credit that do not expire or have expiration dates within one year.
The bank credit facilities have various expiration dates, most 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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