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Non-Tech : Costco, slow but sure? -- Ignore unavailable to you. Want to Upgrade?

To: Mel Fox who wrote (879)	3/31/1999 2:03:00 PM
From: Curbstone	Read Replies (2) \| Respond to of 1147

*News* S&P Raises Costco Companies Ratings March 31, 1999 01:23 PM (Press release provided by Standard & Poor's) NEW YORK, March 31 - Standard & Poor's today placed its ratings on Costco Companies Inc. on CreditWatch with positive implications (see list below). The CreditWatch placement is based on Costco's better-than-expected operating and financial performance. Year-to-date results are up over a strong 1997 and 1998, with operating income 13% higher in the first half 1999 over the prior year period. The lease-adjusted operating margin rose to 4.3% in fiscal 1998 from 3.4% three years earlier. Costco's improved performance is due to comparable sales increases of 9% for the first half of fiscal 1999, following two years of high single digit comparable sales growth, increased sales of higher-margined goods, and more efficient distribution. Financial ratios have improved considerably with return on capital of over 20% last year from 15% in 1995, and pretax interest coverage of 9.2 times (x), from 4.4x in 1995 and 1996. The company's financial policy is now more moderate with leverage of 31%, from a previously aggressive stance several years ago when capital spending was beyond internally generated funds. Standard & Poor's review will focus on the sustainability of Costco's progress and ability to continue forward momentum. Another important consideration is the company's commitment to maintaining conservative financial leverage, Standard & Poor's said. RATINGS PLACED ON CREDITWATCH WITH POSITIVE IMPLICATIONS Rating Costco Companies Inc. Corporate credit rating A-/A-2 Senior unsecured debt A- Subordinated debt BBB+ Commercial paper A-2 Price/Costco Canada Inc. Commercial paper* A-2 *Guaranteed by Costco Companies Inc. REUTERS