a Fortune 500 company

*Costcowholesale

Amanda McIntoshTiffany CeragoliRyan DavisAaron Broadsworth

*The Start-Up

The humble beginnings of a massive enterprise

Jim Sinegal and

Jeffrey Brotman opened their first Costco

location in 1976 with personal savings and credit cards

* The Founders of Costco

*The Original Business Plan

*Concentrate in northwest United States

*12 warehouse locations*Profits of $80 million from each location

*457 locations serving 43 U.S. states and Puerto Rico

*Locations in 7 other countries

*Net sales of $87 billion in 2011*Current Costco

Locations

*Costco Philosophy

*a happier employee leads to a better work environment which is what makes the company more profitable.

*A Good Business

The benefits of being employed with Costco

*Benefits made available to all

employees

*Health Care*Dental Care*Pharmacy Program*Vision Program*401(k) Plan*Dependent Care Plan*Health Care

Reimbursement Account

*Care Network*Short Term Disability*Long Term Disability*Life Insurance*Employee Stock

Purchase Plan*Long Term Care

Insurance

*Additional Benefits•Hourly workers on average are paid $20.89•Compared to Walmart's average hourly wage: $12.67•Employees receive company matching 401 (k) plan•Every 400 hours worked a pay raise is implemented

Implications & Impact

*ACA & Costco

*Costco CEO Jim Sinegal on the Affordable Care

Act

*“It's a rich plan…We think it's good business.”

*Changes in Deductible Cost

Choice Plus Individual

Choice Plus Family

Freedom of Choice Individual

Freedom of Choice Family

$0 $500 $1,000 $1,500 $2,000 $2,500

Annual Deductible 2011Annual Deductible 2012

* As of 2013, for the first time in the company’s history, all preventative care done in

network will be 100% covered.

No Cost Services

Services*Wellness Exams*Mammograms*Immunizations*Health Screenings*Sterilization

Medications*Aspirin*Vitamins*Smoking cessation

*Contraceptives*Fluoride

*Medical Benefits included as of 2013

*Keeping Customers Happy

Expanding the business to meet the needs of consumers

*Membership Types

• 2% Annual Reward

• Up to $750/year

• Highest Level Member

Over 50 million worldwide!

• Up to 6 cardholders

• For business products & services

• For individuals & households

• Good at 590+ locations and Online!

*Renewal Rate Growth* Overall memberships continue to increase quarterly* Executive members makeup one-third of the customer base and two-thirds of the revenue!* New incentives offered to entice exec. Members hence increasing revenue growth* Focus on private-label

*Focus on the Base

Maintain exponential customer-base growth with key focus on:1. Limitless connectivity thru Mobile Apps & Virtual

Magazine - Industry trends suggest online growth likely to drive Costco online sales to over $370 by 2017

2. Focus on Private-label goods which offer competitive prices & comparable quality to the national brands – these brands account for 20% -30% of overall merchandise

*SuccessA summary of profits and income

*19% increase over last quarter

*$459 million in sales last reported quarter in 2013

*Continual Increase in Profits

*Compared income flow vs. outflow