SecProbe.io

February 1, 2012
 Via E-mail

Richard A. Galanti  Executive Vice President, Chief Financial Officer Costco Wholesale Corporation 999 Lake Drive Issaquah, WA 98027
Re: Costco Wholesale Corporation
 Form 10-K for the Fiscal Year Ended August 28, 2011
Filed October 14, 2011 File No. 0-20355

Dear Mr. Galanti:
 We have reviewed your filing and have the following comments.  We have limited our
review to only your financial statements and re lated disclosures and do not intend to expand our
review to other portions of your documents.  In  some of our comments, we may ask you to
provide us with information so we may better understand your disclosure.
 Please respond to this letter within ten business days by amending your filing, by
providing the requested information, or by advi sing us when you will provide the requested
response.  If you do not believe our comments apply to your fact s and circumstances or do not
believe an amendment is appropriate, pl ease tell us why in your response.

After reviewing any amendment to your filing and the information you provide in
response to these comments, we ma y have additional comments.
            Form 10-K for the Fiscal Year Ended August 28, 2011

 Item 7—Management’s Discussion and Analysis  of Financial Condition and Results of
Operations, page 21
 General

1. Reference is made to Note 9 (Income Taxe s) on page 71 where you have generated 36%
of your pretax income from foreign operati ons in fiscal year 2011.  Further, pretax
income from foreign operations has grown at  a significantly higher rate during the past
three fiscal years as compared  to those of your domestic operations for the same period.
We note you reported segment financial inform ation based on geographic locations as
disclosed in Note 12.  As such, we believe you should provide separate  operating results’
discussions based on these segments rather th an solely on a consolidated basis so that

Richard A. Galanti Costco Wholesale Corporation  February 1, 2012 Page 2

 investors can better understa nd the performance of your bus inesses. Your separate
discussions should provide ma nagement insights into the factors/reasons behind the
changes in their historical ope rating results and how the factor s would affect their future
earnings by quantifying their impact to the ex tent material, if possible. Refer to the
guidance within Item 303 of Regul ation S-K and SEC Release No. 33-8350.
 Results of Operations, page 22

2. Please revise to analyze cost of merchandi se sales line item in your operating results’
discussion.  We note cost of sa les is a material component of your operating expenses and
a discussion and analysis of this  line item w ill provide investors with the information  to
better understand your results of operations as a whole.  Please pr ovide us your proposed
disclosure in the response.   Please also ensure that the proposed disclosure provides the
underlying reasons/drivers for any material changes.  For example, in addition to
quantifying the impacts resulting from cha nges in price and volume, please further
explain their underlying substantiv e reasons behind these changes.

Note 1 – Summary of Significan t Accounting Policies, page 48
 General

3. We note the increased significance of your fore ign operations.  Please explain to us in
reasonable detail how you considered whether th e transfer of net assets from the foreign
subsidiaries to the U.S. parent company wa s restricted to the extent that you should
provide “Schedule I – Condensed Financial In formation of Registrant” in your Form 10-
K.  Refer to Rules 5-04 and 12-04 of Regulation S-X.
Cash and Cash Equivalents, page 49

4. It appears from your disclosure on page 28 that  the cash held in your foreign consolidated
subsidiaries is significant and th at it may not be avai lable to be used  for certain financing
activities such as repayment of short term de bt or to repurchase common stock.  If so,
please disclose the cash amounts which are not freely transferable to the Parent in your
notes to the financial statements. We re fer you to Rule 5-02.1 of Regulation S-X.
 Derivatives, page 55

5. We note you enter into derivative contracts to  mitigate the cost of energy used for your
warehouses and other facilities, and you stat e you are applying the normal purchase and
normal sales exception and therefore you are not  recording mark-to-market adjustments
at each reporting period end.  Please provide  us your accounting analysis supporting the
election of the normal purchase and normal sa les exception for your derivative contracts
entered into to mitigate your warehouse energy costs.  Refer to ASC 815-10-15-27
through 29.

Richard A. Galanti Costco Wholesale Corporation  February 1, 2012 Page 3

Revenue Recognition, page 56

6. Refer to your disclosure regarding your cha nge in your membership renewal policy.  Tell
us and disclose what necessitated this change  and the impact it had on your consolidated
financial statements.  In this regard, tell us  in detail how you concl uded the change had an
immaterial  effect of deferring rec ognition of membership fees  paid by late-renewing
members.  Also, tell us and disclose th e percentage of late-renewing members and
quantify the estimated amounts i nvolved in your analysis.
 Note 9 – Income Taxes, page 71

7. Tell us how your statement that the foreign undistributed earnings are deemed by the
Company to be indefinitely reinvested comp lies with ASC 740-30-25-17. In this regard,
tell us if you have ever repatr iated foreign earnings in any of  the last three fiscal years.

Commitments and Contingencies, page 74
8. A large portion of your disclosu re is primarily related to describing the history of the
legal proceedings in various cases in whic h you are involved, incl uding the dates of
various motions, appeals, and hearings.  In addition, you state on page 79 that it is
possible that an unfavorable outcome could resu lt in a charge which could be material to
the results of an individual fiscal quarter and that “[e]xcept where indicated otherwise
above, a reasonable estimate of the possible loss  or range of loss cannot be made at this
time for the matters.”  We note no disclosure of reasonable possible loss or range of loss
in any of the matters described.  Therefor e, it is not clear whether you believe the
likelihood of an adverse outcome is other than  remote, nor is it clear how material or
potentially material the impact resulting from each of these matters could be on your
financial statements.  We believe your di sclosure should be enhanced by focusing on
describing the current status of the cases, in  plain English, rather than on the history of
legal proceedings.  Lastly, it is not determ inable from your disclosure if you have
recorded an accrual for one or more of th ese matters or if there are unrecognized
contingencies that could require  further disclosure regarding their aggregate reasonable
possible loss exposure in exce ss of accruals, if any.  Pleas e advise us and revise your
disclosure.  Refer to the di sclosure requirements set fort h by paragraphs 1-5 of FASB
ASC 450-20-50.

We urge all persons who are responsible for th e accuracy and adequacy of the disclosure
in the filing to be certain that the filing include s the information the Securities Exchange Act of
1934 and all applicable Exchange Act rules requir e.  Since the company and its management are
in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy
and adequacy of the disclosures they have made.

Richard A. Galanti Costco Wholesale Corporation  February 1, 2012 Page 4

  In responding to our comments, please provi de a written statement from the company
acknowledging that:
 the company is responsible for the adequacy an d accuracy of the disclo sure in the filing;

 staff comments or changes to disclosure in response to staff comments do not foreclose
the Commission from taking any action with respect to the filing; and

 the company may not assert staff comments as  a defense in any proceeding initiated by
the Commission or any person under the federa l securities laws of  the United States.

You may contact Robert Babul a, Staff Accountant, at ( 202) 551-3339 or me at (202) 551-
3377 if you have questions regarding our  comments or any other questions.

Sincerely,
    /s/ Andrew D. Mew
 Andrew D. Mew Accounting Branch Chief