COSTCO WHOLESALE CORP /NEWCOST

COSTCO WHOLESALE CORP /NEW Debt Disclosure

10-KFiled Oct 8, 20252 min read
Note 4—Debt
Short-Term Borrowings
The Company maintains various short-term bank credit facilities, with a borrowing capacity of $1,220 and $1,198, in 2025 and 2024. Short-term borrowings outstanding were immaterial at the end of 2025 and 2024.
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 2024, the Company’s Japan subsidiary issued four Guaranteed Senior Notes, totaling approximately $500, at fixed interest rates ranging from 1.400% to 2.120%. Interest is payable semi-annually, and maturity dates range from November 2033, to November 2043. In 2025, 2024, and 2023 the Japanese subsidiary repaid $103, $77, and $75 of its Guaranteed Senior Notes.
In 2024, the Company repaid the $1,000 outstanding principal balance on its 2.750% Senior Notes.
At the end of 2025 and 2024, the fair value of the Company's long-term debt, including the current portion, was approximately $5,370 and $5,412. The carrying value of long-term debt consisted of the following:
 20252024
3.000% Senior Notes due May 2027
$1,000 $1,000 
1.375% Senior Notes due June 2027
1,250 1,250 
1.600% Senior Notes due April 2030
1,750 1,750 
1.750% Senior Notes due April 2032
1,000 1,000 
Other long-term debt805 919 
Total long-term debt5,805 5,919 
Less unamortized debt discounts and issuance costs17 22 
Less current portion(1)
75 103 
Long-term debt, excluding current portion$5,713 $5,794 
_____________
(1)Net of unamortized debt discounts and issuance costs and included in other current liabilities in the accompanying consolidated balance sheets.
Maturities of long-term debt during the next five fiscal years and thereafter are as follows:
2026$75 
20272,250 
2028— 
2029148 
20301,750 
Thereafter
1,582 
Total
$5,805 

Historical Timeline

Fiscal YearFiled
2025Oct 8, 2025Showing above
2024Oct 9, 2024
2023Oct 11, 2023
2022Oct 5, 2022
2021Oct 6, 2021
2020Oct 7, 2020
2019Oct 11, 2019
2018Oct 26, 2018
2017Oct 18, 2017
2016Oct 12, 2016
2015Oct 14, 2015

About Debt Disclosures

Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.

Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.

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