Cabela's 2005 Annual Report Download - page 96

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CABELA’S INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Dollar Amounts in Thousands Except Share and Per Share Amounts)
8. LONG-TERM DEBT AND CAPITAL LEASES
Principal amounts of long-term debt and capital leases consisted of the following at each fiscal year ended:
2005 2004
Unsecured 4.95% notes payable to various insurance companies, with principal
payable in five annual installments of $25,000 beginning September 5, 2005.
Interest payments are made semi-annually. ................................. $100,000 $125,000
Unsecured Senior Notes, interest rates from 8.79% to 9.19%, payable with interest and
principal due in monthly installments of $274 through January 1, 2007. Beginning
February 1, 2008 monthly principal of $81 are due through January 1, 2010 ....... 5,686 8,123
Capital lease obligation, implicit rate of 4%, payable in monthly installments of $42
through June 2034. .................................................... 8,495 8,639
Various notes payable due April 1, 2004 through October 15, 2014, interest rates from
4.0% to 8.0%, and total annual installments of approximately $790 .............. 5,645 6,390
Total long-term debt ................................................. 119,826 148,152
Less current maturities ................................................... (29,049) (28,327)
Long-term portion ................................................... $ 90,777 $119,825
Certain of the long-term debt agreements contain various covenants and restrictions such as the maintenance
of minimum debt coverage, net worth and financial ratios. The significant financial ratios and net worth
requirements in the long-term debt agreements are as follows:
• A limitation of funded debt to be less than 60% of consolidated total capitalization.
• Cash flow fixed charge coverage ratio (the ratio of the sum of consolidated EBITDA plus certain rental
expenses to the sum of consolidated cash interest expense plus certain rental expenses) of no less than
2.00 to 1.00 as of the last day of the any fiscal quarter.
• A minimum consolidated adjusted net worth of $150 million plus 25% of cumulative consolidated net
income beginning in 2002. Adjusted net worth is consolidated equity less equity in WFB, plus the LIFO
reserve and deferred income taxes.
In addition, the debt contains cross default provisions to other outstanding credit facilities. In the event the
Company fails to comply with these covenants and the failure to comply goes beyond 30 days, the Company will
trigger a default. In the event of default, the obligations shall automatically become immediately due and
payable. All principal and outstanding interest would immediately become due and payable.
The Company was in compliance with all covenants at each fiscal year end presented.
The Company entered into a lease agreement for a distribution facility in Wheeling, West Virginia. The
lease term is 30 years with monthly installments of $42 and contains a bargain purchase option at the end of the
lease term. The Company is accounting for this lease as a capital lease and has recorded the leased asset at the
present value of the future minimum lease payments using a 4% implicit rate. The leased asset was recorded at
$8,728 in fiscal 2004 and is being amortized on a straight-line basis over 30 years.
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