Cabela's 2005 Annual Report Download - page 87

CABELA’S INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Dollar Amounts in Thousands Except Share and Per Share Amounts)
income statement for derivatives that do not qualify for hedge accounting. For derivatives designated as a hedge
and used to hedge an anticipated transaction, changes in the fair value of the derivatives are deferred in the
balance sheet within accumulated other comprehensive income to the extent the hedge is effective in mitigating
the exposure to the related anticipated transaction. Any ineffectiveness associated with the hedge is recognized
immediately in the income statement. Amounts deferred within accumulated other comprehensive income (loss)
are recognized in the income statement in the same period during which the hedged transaction affects earnings.
Comprehensive Income—Comprehensive income consists of net income, derivative adjustments and
unrealized gains and losses on available-for-sale securities, net of related income taxes.
Earnings Per Share—Basic earnings per share (“EPS”) is computed by dividing net income by the
weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is
computed by dividing net income by the sum of the weighted average number of shares outstanding plus all
additional common shares that would have been outstanding if potentially dilutive common share equivalents had
been issued.
Reclassifications—Certain reclassifications have been made to prior year financial statements and the notes
to conform to the current year presentation. The Company has reclassified a portion of the retained interests
related to its Financial Services business from investing activities to operating activities in the statement of cash
flows. These changes did not impact the total net (decrease) increase in cash. There were no covenant
calculations affected by this change in the presentation of the Company’s cash flow statement line items. The
amounts were deemed to be immaterial to the Company’s financial statements.
Supplemental Cash Flow Information—The following table sets forth non-cash financing and investing
activities and other cash flow information.
Fiscal Year Ended
2005 2004 2003
Non-cash financing and investing activities:
Contribution of assets in exchange for investment in Great Wolf
Lodge, LLC .............................................. $ — $ 3,400 $ —
Contribution of land .......................................... $ — $ 6,038 $ —
Capital lease obligation ....................................... $ — $ 8,728 $ —
Unpaid purchases of property and equipment included in accounts
payable (1) ............................................... $ 8,498 $ — $ —
Other cash flow information:
Interest paid, net of amounts capitalized .......................... $14,597 $11,360 $11,086
Income taxes ................................................ $38,354 $24,026 $21,453
(1) Amounts reported as unpaid purchases are recorded as purchases of property, plant and equipment in the
statement of cash flows in the period they are paid.
Recently Issued Accounting Pronouncements—On December 16, 2004, the FASB issued “Statement
No. 123 (revised 2004), Share-Based Payment” (“Statement 123R”). Statement 123R requires the Company to
recognize compensation expense for stock options and discounts under employee stock purchase plans granted to
employees based on the estimated fair value of the equity instrument at the time of the grant. Currently the
Company discloses the pro forma net income and earnings per share as if the Company applied the fair value
recognition provisions of Statement 123 as amended by Statement 148. The requirements of Statement 123R are
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