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Table of Contents


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended May 10, 2020
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 0-20355
Costco Wholesale Corporation
(Exact name of registrant as specified in its charter)
Washington 91-1223280
(State or other jurisdiction of
incorporation or organization)
 (I.R.S. Employer Identification No.)
999 Lake Drive, Issaquah, WA 98027
(Address of principal executive offices) (Zip Code)
(Registrant’s telephone number, including area code): (425313-8100

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbol(s)Name of each exchange on which registered
Common Stock, $.01 Par ValueCOSTThe NASDAQ Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes   No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes    No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes    No 

The number of shares outstanding of the issuer's common stock as of May 27, 2020 was 441,523,711.


Table of Contents


COSTCO WHOLESALE CORPORATION
INDEX TO FORM 10-Q 
  Page
PART I
Item 1.
Item 2.
Item 3.
Item 4.
PART II
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.

2

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PART I—FINANCIAL INFORMATION
Item 1—Financial Statements
COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(amounts in millions, except per share data) (unaudited)
 
12 Weeks Ended36 Weeks Ended
May 10,
2020
May 12,
2019
May 10,
2020
May 12,
2019
REVENUE
Net sales$36,451  $33,964  $110,943  $102,903  
Membership fees815  776  2,435  2,302  
Total revenue37,266  34,740  113,378  105,205  
OPERATING EXPENSES
Merchandise costs32,249  30,233  98,538  91,576  
Selling, general and administrative3,830  3,371  11,305  10,310  
Preopening expenses8  14  29  45  
Operating income1,179  1,122  3,506  3,274  
OTHER INCOME (EXPENSE)
Interest expense(37) (35) (109) (105) 
Interest income and other, net21  36  101  104  
INCOME BEFORE INCOME TAXES1,163  1,123  3,498  3,273  
Provision for income taxes311  207  843  679  
Net income including noncontrolling interests
852  916  2,655  2,594  
Net income attributable to noncontrolling interests
(14) (10) (42) (32) 
NET INCOME ATTRIBUTABLE TO COSTCO$838  $906  $2,613  $2,562  
NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO:
Basic$1.90  $2.06  $5.91  $5.83  
Diluted$1.89  $2.05  $5.89  $5.79  
Shares used in calculation (000s):
Basic442,322  439,859  442,054  439,767  
Diluted443,855  442,642  443,754  442,565  

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

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COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(amounts in millions) (unaudited)
 
 12 Weeks Ended36 Weeks Ended
 May 10,
2020
May 12,
2019
May 10,
2020
May 12,
2019
NET INCOME INCLUDING NONCONTROLLING INTERESTS
$852  $916  $2,655  $2,594  
Foreign-currency translation adjustment and other, net
(396) (42) (224) (124) 
Comprehensive income456  874  2,431  2,470  
Less: Comprehensive income attributable to noncontrolling interests
16  9  60  30  
COMPREHENSIVE INCOME ATTRIBUTABLE TO COSTCO
$440  $865  $2,371  $2,440  

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

Table of Contents


COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in millions, except par value and share data) (unaudited)


May 10,
2020
September 1,
2019
ASSETS
CURRENT ASSETS
Cash and cash equivalents$10,826  $8,384  
Short-term investments948  1,060  
Receivables, net1,507  1,535  
Merchandise inventories11,010  11,395  
Other current assets963  1,111  
Total current assets25,254  23,485  
PROPERTY AND EQUIPMENT
Land6,684  6,417  
Buildings and improvements17,800  17,136  
Equipment and fixtures8,549  7,801  
Construction in progress1,073  1,272  
Accumulated depreciation and amortization(12,579) (11,736) 
Net property and equipment21,527  20,890  
OTHER ASSETS
Operating lease right-of-use assets2,749  0  
Other long-term assets2,202  1,025  
TOTAL ASSETS$51,732  $45,400  
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable$10,813  $11,679  
Accrued salaries and benefits3,246  3,176  
Accrued member rewards1,331  1,180  
Deferred membership fees1,832  1,711  
Current portion of long-term debt1,497  1,699  
Other current liabilities4,060  3,792  
Total current liabilities22,779  23,237  
OTHER LIABILITIES
Long-term debt, excluding current portion7,598  5,124  
Long-term operating lease liabilities2,535  0  
Other long-term liabilities1,617  1,455  
TOTAL LIABILITIES34,529  29,816  
COMMITMENTS AND CONTINGENCIES
EQUITY
Preferred stock $0.01 par value; 100,000,000 shares authorized; no shares issued and outstanding0  0  
Common stock $0.01 par value; 900,000,000 shares authorized; 441,523,000 and 439,625,000 shares issued and outstanding4  4  
Additional paid-in capital6,593  6,417  
Accumulated other comprehensive loss(1,678) (1,436) 
Retained earnings11,883  10,258  
Total Costco stockholders’ equity16,802  15,243  
Noncontrolling interests401  341  
TOTAL EQUITY17,203  15,584  
TOTAL LIABILITIES AND EQUITY$51,732  $45,400  

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

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COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(amounts in millions) (unaudited)
12 Weeks Ended May 10, 2020
 Common StockAdditional
Paid-in
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Retained
Earnings
Total Costco
Stockholders’
Equity
Noncontrolling
Interests
Total
Equity
 Shares (000s)Amount
BALANCE AT FEBRUARY 16, 2020441,622  $4  $6,506  $(1,280) $11,384  $16,614  $385  $16,999  
Net income
—  —  —  —  838  838  14  852  
Foreign-currency translation adjustment and other, net
—  —  —  (398) —  (398) 2  (396) 
Stock-based compensation
—  —  90  —  —  90  —  90  
Release of vested restricted stock units (RSUs), including tax effects
7  —  (1) —  —  (1) —  (1) 
Repurchases of common stock
(106) —  (2) —  (29) (31) —  (31) 
Cash dividend declared
—  —  —  —  (310) (310) —  (310) 
BALANCE AT MAY 10, 2020441,523  $4  $6,593  $(1,678) $11,883  $16,802  $401  $17,203  


12 Weeks Ended May 12, 2019
 Common StockAdditional
Paid-in
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Retained
Earnings
Total Costco
Stockholders’
Equity
Noncontrolling
Interests
Total
Equity
 Shares (000s)Amount
BALANCE AT FEBRUARY 17, 2019439,989  $4  $6,218  $(1,280) $8,916  $13,858  $325  $14,183  
Net income
—  —  —  —  906  906  10  916  
Foreign-currency translation adjustment and other, net
—  —  —  (41) —  (41) (1) (42) 
Stock-based compensation
—  —  93  —  —  93  —  93  
Release of vested RSUs, including tax effects
14  —  (1) —  —  (1) —  (1) 
Repurchases of common stock
(192) —  (3) —  (41) (44) —  (44) 
Cash dividend declared and other
—  —  —  —  (285) (285) —  (285) 
BALANCE AT MAY 12, 2019439,811  $4  $6,307  $(1,321) $9,496  $14,486  $334  $14,820  




The accompanying notes are an integral part of these condensed consolidated financial statements.

6

Table of Contents


COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(amounts in millions) (unaudited)
36 Weeks Ended May 10, 2020
 Common StockAdditional
Paid-in
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Retained
Earnings
Total Costco
Stockholders’
Equity
Noncontrolling
Interests
Total
Equity
 Shares (000s)Amount
BALANCE AT SEPTEMBER 1, 2019439,625  $4  $6,417  $(1,436) $10,258  $15,243  $341  $15,584  
Net income
—  —  —  —  2,613  2,613  42  2,655  
Foreign-currency translation adjustment and other, net
—  —  —  (242) —  (242) 18  (224) 
Stock-based compensation
—  —  510  —  —  510  —  510  
Release of vested restricted stock units (RSUs), including tax effects
2,266  —  (328) —  —  (328) —  (328) 
Repurchases of common stock
(368) —  (6) —  (104) (110) —  (110) 
Cash dividend declared
—  —  —  —  (884) (884) —  (884) 
BALANCE AT MAY 10, 2020441,523  $4  $6,593  $(1,678) $11,883  $16,802  $401  $17,203  
36 Weeks Ended May 12, 2019
 Common StockAdditional
Paid-in
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Retained
Earnings
Total Costco
Stockholders’
Equity
Noncontrolling
Interests
Total
Equity
 Shares (000s)Amount
BALANCE AT SEPTEMBER 2, 2018438,189  $4  $6,107  $(1,199) $7,887  $12,799  $304  $13,103  
Net income
—  —  —  —  2,562  2,562  32  2,594  
Foreign-currency translation adjustment and other, net
—  —  —  (122) —  (122) (2) (124) 
Stock-based compensation
—  —  484  —  —  484  —  484  
Release of vested RSUs, including tax effects
2,525  —  (271) —  —  (271) —  (271) 
Repurchases of common stock
(903) —  (13) —  (182) (195) —  (195) 
Cash dividend declared and other
—  —  —  —  (771) (771) —  (771) 
BALANCE AT MAY 12, 2019439,811  $4  $6,307  $(1,321) $9,496  $14,486  $334  $14,820  

The accompanying notes are an integral part of these condensed consolidated financial statements.

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COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in millions) (unaudited)
36 Weeks Ended
May 10,
2020
May 12,
2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net income including noncontrolling interests$2,655  $2,594  
Adjustments to reconcile net income including noncontrolling interests to net cash provided by operating activities:
Depreciation and amortization1,140  1,019  
Non-cash lease expense116  0  
Stock-based compensation508  482  
Other non-cash operating activities, net(23) 10  
Deferred income taxes(5) (33) 
Changes in operating assets and liabilities:
Merchandise inventories265  (409) 
Accounts payable(571) 0  
Other operating assets and liabilities, net534  400  
Net cash provided by operating activities4,619  4,063  
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of short-term investments(1,034) (753) 
Maturities and sales of short-term investments1,149  800  
Additions to property and equipment(1,958) (1,989) 
Acquisitions(1,133)   
Other investing activities, net26  (3) 
Net cash used in investing activities(2,950) (1,945) 
CASH FLOWS FROM FINANCING ACTIVITIES
Change in bank payments outstanding(145) 166  
Proceeds from issuance of long-term debt3,992    
Repayments of long-term debt(1,700) (89) 
Tax withholdings on stock-based awards(328) (271) 
Repurchases of common stock(111) (195) 
Cash dividend payments(860) (752) 
Other financing activities, net(77) (5) 
Net cash provided by (used in) financing activities771  (1,146) 
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
2  (14) 
Net change in cash and cash equivalents2,442  958  
CASH AND CASH EQUIVALENTS BEGINNING OF YEAR8,384  6,055  
CASH AND CASH EQUIVALENTS END OF PERIOD$10,826  $7,013  
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the first thirty-six weeks of the year for:
Interest
$71  $72  
Income taxes, net$458  $780  
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES:
 Cash dividend declared, but not yet paid
$310  $285  

The accompanying notes are an integral part of these condensed consolidated financial statements.

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COSTCO WHOLESALE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(amounts in millions, except share, per share, and warehouse count data)
(unaudited)
Note 1—Summary of Significant Accounting Policies
Description of Business
Costco Wholesale Corporation (Costco or the Company), a Washington corporation, and its subsidiaries operate membership warehouses based on the concept that offering members low prices on a limited selection of nationally branded and private-label products in a wide range of merchandise categories will produce high sales volumes and rapid inventory turnover. For the period ended May 10, 2020, Costco operated 787 warehouses worldwide: 547 in the United States (U.S.) located in 45 states, Washington, D.C., and Puerto Rico, 100 in Canada, 39 in Mexico, 29 in the United Kingdom (U.K.), 26 in Japan, 16 in Korea, 13 in Taiwan, 12 in Australia, two in Spain, and one each in Iceland, France and China. The Company operates e-commerce websites in the U.S., Canada, Mexico, U.K., Korea, Taiwan, Japan, and Australia.
Basis of Presentation
The condensed consolidated financial statements include the accounts of Costco, its wholly owned subsidiaries, and subsidiaries in which it has a controlling interest. The Company reports noncontrolling interests in consolidated entities as a component of equity separate from the Company’s equity. All material intercompany transactions between and among the Company and its consolidated subsidiaries have been eliminated in consolidation. In February 2020, the Company acquired a 35% interest in Navitus Health Solutions (Navitus), a pharmacy benefit manager, and is accounted for as an equity-method investment and included in the Company's earnings. The Company’s net income excludes income attributable to the noncontrolling interest in Taiwan. Unless otherwise noted, references to net income relate to net income attributable to Costco.
These unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q for interim financial reporting pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). While these statements reflect all normal recurring adjustments that are, in the opinion of management, necessary for fair presentation of the results of the interim period, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles (U.S. GAAP) for complete financial statements. Therefore, the interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company's Annual Report filed on Form 10-K for the fiscal year ended September 1, 2019.
Fiscal Year End
The Company operates on a 52/53 week fiscal year basis, with the fiscal year ending on the Sunday closest to August 31. Fiscal 2020 is a 52-week year ending on August 30, 2020. References to the third quarter of 2020 and 2019 relate to the 12-week fiscal quarters ended May 10, 2020, and May 12, 2019, respectively. References to the first thirty-six weeks of 2020 and 2019 relate to the 36 weeks ended May 10, 2020, and May 12, 2019, respectively.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates and assumptions take into account historical and forward looking factors that the Company believes are reasonable, including but not limited
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to the potential impacts arising from the novel coronavirus (COVID-19) and public and private sector policies and initiatives aimed at reducing its transmission. As the extent and duration of these impacts remain unclear, the Company's estimates and assumptions may evolve as conditions change. Actual results could differ from those estimates and assumptions.
Leases
The Company leases land and/or buildings at warehouses and certain other office and distribution facilities. Leases generally contain one or more of the following options, which the Company can exercise at the end of the initial term: (a) renew the lease for a defined number of years at the then-fair market rental rate or rate stipulated in the lease agreement; (b) purchase the property at the then-fair market value; or (c) a right of first refusal in the event of a third-party offer.
Some leases include free-rent periods and step-rent provisions, which are recognized on a straight-line basis over the original term of the lease and any extension options that the Company is reasonably certain to exercise from the date the Company has control of the property. Certain leases provide for periodic rent increases based on price indices or the greater of minimum guaranteed amounts or sales volume. Our leases do not contain any material residual value guarantees or material restrictive covenants.
The Company determines at inception whether a contract is or contains a lease. The Company initially records right-of-use (ROU) assets and lease obligations for its finance and operating leases based on the discounted future minimum lease payments over the term. As the rate implicit in the Company’s leases is not easily determinable, the present value of the sum of the lease payments is calculated by using the Company’s incremental borrowing rate. The rate is determined using a portfolio approach based on the rate of interest the Company would pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term. The Company uses quoted interest rates from financial institutions to derive the incremental borrowing rate. The lease term is defined as the noncancelable period of the lease plus any options to extend when it is reasonably certain that the Company will exercise the option.
Goodwill and Acquired Intangible Assets
Goodwill represents the excess of acquisition cost over the fair value of the net assets acquired and is not subject to amortization. The Company reviews goodwill annually in the fourth quarter for impairment or if circumstances indicate its carrying value may exceed the fair value. This evaluation is performed at the reporting unit level. If a qualitative assessment indicates that it is more likely than not that the fair value is less than its carrying value, a quantitative analysis is completed using either the income or market approach. The income approach estimates fair value based on expected discounted future cash flows, while the market approach uses comparable public companies and transactions to develop metrics to be applied to historical and expected future operating results.
Goodwill is included in other long-term assets in the condensed consolidated balance sheets. The following table summarizes goodwill by reportable segment during the first thirty-six weeks of 2020:
United States OperationsCanadian OperationsOther International OperationsTotal
Balance as of September 1, 2019$13  $27  $13  $53  
Changes in currency translation  (1)   (1) 
Acquisition935      935  
Balance as of May 10, 2020$948  $26  $13  $987  
Definite-lived intangible assets are included in other long-term assets on the consolidated balance sheets and are amortized on a straight-line basis over their estimated lives, which approximates the pattern of expected economic benefit.
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Recent Accounting Pronouncements Adopted
In February 2016, the Financial Accounting Standards Board (FASB) issued ASU 2016-02 - Leases (ASC 842), which required recognition on the balance sheet for the rights and obligations created by leases with terms greater than 12 months. The Company adopted ASC 842 using the modified retrospective transition method and elected to use the effective date of September 2, 2019, as the date of initial application. Consequently, the comparative periods presented continue to be in accordance with ASC 840, Leases, previously in effect.
The Company elected the package of practical expedients permitted under the transition guidance, allowing the Company to carry forward conclusions related to: (a) whether expired or existing contracts contain leases; (b) lease classification; and (c) initial direct costs for existing leases. The Company has elected not to record operating lease right-of-use assets or lease liabilities associated with leases with durations of 12 months or less. Lastly, the Company elected the practical expedient allowing aggregation of non-lease components with related lease components when evaluating the accounting treatment for all classes of underlying assets.
Adoption of the new standard resulted in an initial increase to assets and liabilities of $2,632 related to recognition of operating lease right-of-use assets and operating lease obligations as of September 2, 2019. Other line item impacts in the Company's condensed consolidated balance sheet were not material. The standard did not materially impact the condensed consolidated statements of income and cash flows. For more information on the Company's lease arrangements refer to Note 6.
Note 2—Acquisition of Innovel
On March 17, 2020, the Company acquired Innovel Solutions for $998 using existing cash and cash equivalents. Cash paid during the third quarter excludes a portion of the purchase price that will be paid upon the final settlement of certain holdbacks and provisional amounts, discussed below. Innovel provides final mile delivery, complete installation and white-glove capabilities for big and bulky products across the United States and Puerto Rico. Its financial results have been included in the Company's consolidated financial statements from the date of acquisition. Innovel's results of operations were not material to the Company's consolidated results during the current quarter.
At May 10, 2020, the initial accounting for the acquisition was incomplete pending determination of: the final purchase price, working capital adjustments, the fair value of intangible assets, property and equipment, operating lease right-of-use assets, operating lease liabilities, and other assumed obligations. The net purchase price of $998 was initially allocated to the tangible and intangible assets of $255 and liabilities assumed of $192, based on their preliminary fair values on the acquisition date. The remaining unallocated net purchase price of $935 was recorded as goodwill. Goodwill represents the acquisition's benefits to the Company, which include the ability to serve more members and improve delivery times, enabling growth in certain segments of our U.S. e-commerce operations. The Company assigned this goodwill, which is deductible for tax purposes, to reporting units within the U.S. segment. As additional information becomes available, the provisional fair value estimates will be refined.

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Note 3—Investments
The Company's investments were as follows:
May 10, 2020:Cost
Basis
Unrealized
Gains, Net
Recorded
Basis
Available-for-sale:
Government and agency securities$464  $14  $478  
Held-to-maturity:
Certificates of deposit470  470  
Total short-term investments$934  $14  $948  

September 1, 2019:Cost
Basis
Unrealized
Gains, Net
Recorded
Basis
Available-for-sale:
Government and agency securities$716  $6  $722  
Held-to-maturity:
Certificates of deposit338  338  
Total short-term investments$1,054  $6  $1,060  
Gross unrecognized holding gains and losses on available-for-sale securities were not material for the periods ended May 10, 2020, and September 1, 2019. At May 10, 2020, there were no available-for-sale securities in a continuous unrealized-loss position. At September 1, 2019, available-for-sale securities that were in a continuous unrealized-loss position were not material. There were no sales of available-for-sale securities during the first thirty-six weeks of 2020 or 2019.
The maturities of available-for-sale and held-to-maturity securities at May 10, 2020, are as follows:
 Available-For-SaleHeld-To-Maturity
 Cost BasisFair Value
Due in one year or less$169  $170  $470  
Due after one year through five years295  308  0  
Total$464  $478  $470  

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Note 4—Fair Value Measurement
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The table below presents information regarding financial assets and liabilities that are measured at fair value on a recurring basis and indicate the level within the fair value hierarchy reflecting the valuation techniques utilized to determine fair value.
Level 2
May 10,
2020
September 1,
2019
Investment in government and agency securities(1)
$478  $766  
Forward foreign-exchange contracts, in asset position(2)
9  15  
Forward foreign-exchange contracts, in (liability) position(2)
(8) (4) 
Total$479  $777  
 
 _______________
(1)At May 10, 2020, $478 short-term investments are included in the accompanying condensed consolidated balance sheets. At September 1, 2019, $44 cash and cash equivalents and $722 short-term investments are included in the accompanying condensed consolidated balance sheets.
(2)The asset and liability values are included in other current assets and other current liabilities, respectively, in the accompanying condensed consolidated balance sheets.
At May 10, 2020, and September 1, 2019, 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 the first thirty-six weeks of 2020 or 2019.
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 these items during the first thirty-six weeks of 2020 or 2019.
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Note 5—Debt
The carrying value of the Company’s long-term debt consisted of the following:
May 10,
2020
September 1,
2019
1.700% Senior Notes due December 2019$0  $1,200  
1.750% Senior Notes due February 20200  500  
2.150% Senior Notes due May 20211,000  1,000  
2.250% Senior Notes due February 2022500  500  
2.300% Senior Notes due May 2022800  800  
2.750% Senior Notes due May 20241,000  1,000