According to Costco's Chief Financial Officer, Richard Galanti, "Historically, membership fee revenue was recognized using a 'monthly' convention starting from the month the membership payment was received. We are now recognizing membership fees using a 'daily' convention, based on the specific membership terms and timing of payments. The net cash flow effect to the Company is slightly positive, due to a reduction of current income taxes payable of approximately $20 million."
Net income for fiscal 2007 was $1.08 billion, or $2.37 per diluted share, compared to $1.10 billion, or $2.30 per diluted share, during fiscal year 2006. Excluding the adjustment to membership fee revenue, outlined above, as well as the following items recorded in the second and third quarters of fiscal 2007:
• a $95.3 million non-cash pre-tax charge ($48.1 million taken in the second quarter and $47.2 million taken in the third quarter) related to revisions to the reserve for estimated sales returns;
• a pre-tax charge of $47.3 million associated with reducing adverse income tax consequences to our employees arising from the review of stock options by a special committee of the Board of Directors; and
• a $10.1 million pre-tax benefit primarily to merchandise costs for an excise tax refund on prior merchandise sales of phone cards, net income for the 2007 fiscal year would have been $1.20 billion, or $2.63 per diluted share, representing a 14% increase in earnings per share over the prior fiscal year.
-Ltd..jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Thermore (Far East) Ltd.")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Telangana State Industrial Infrastructure Corporation Limited (TSllC Ltd)")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Taiwan Textile Federation (TTF)")
