Cabela's 2006 Annual Report Download - page 49

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Cash provided by operating activities totaled $72.6 million in fiscal 2005 compared to $46.7 million in fiscal
2004. This increase in cash over 2004 is partly attributable to an increase in accounts payable of $42.7 million. The
increase in accounts payable was primarily due to a difference in accrued payment for our third party processor of
$30.0 million at our bank. The increased activity on our credit cards and timing of the last day of the year being on a
Saturday resulted in the amount of the third party processor payable increase. Accrued costs related to our catalogs
also increased accounts payable by $5.9 million due to timing of production work on catalogs. Cash increased due
to the sale of interests in credit card loans in connection with securitization transactions in excess of cash used to
originate credit card loans by $22.3 million. Cash used for income taxes payable increased by $20.3 million. This
was partially offset by an increase in our deferred income tax balance. Sales of land held for sale increased our
cash by $8.4 million in fiscal 2005 compared to fiscal 2004. Accrued compensation and benefits increased by $7.5
million over 2004 attributed to increases in retail payroll and timing of when it was paid. In addition, gift certificates
and credit card reward points increased by $7.2 million over 2004. These increases were partially offset by increases
in uses of cash. Cash used for inventory increased by $33.4 million related to the stocking of four new destination
retail stores. Cash used for other current assets increased by $12.9 million primarily due to an increase in the prepaid
amount for Visa interchange funding and an increase in prepaid expenses of $11.5 million primarily related to the
timing of catalog production costs.
The following table highlights the growth of our destination retail stores and the activity of economic
development bonds related to the construction of these stores and related projects for the fiscal years ended:
2006 2005 2004
(Dollars in Thousands)
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (179,238) $(194,659 ) $ (52,568)
Purchases of marketable securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (23,397) $ (65,077 ) $ (74,492)
Proceeds from retirements and maturities of marketable securities . . . . . $ 54,065 $ 66,188 $ 4,959
Number of new destination retail stores opened during fiscal year . . . . . 4 4 1
Number of destination retail stores leased at end of fiscal year . . . . . . . . 1 None None
Cash used in investing activities increased $64.1 million in fiscal 2006 compared to fiscal 2005. The net
increase in cash used was primarily due to the purchases, net of maturities, of short-term investments of $124.3 million
during 2006 compared to 2005. Partially offsetting this increase were net decreases in the purchases of marketable
securities of $41.7 million and in capital expenditures of $15.4 million. The decrease in the purchases of marketable
securities is related to the timing on the opening of certain new destination retail stores and the incentives related
to those stores. In addition, we continue to monetize our economic development bonds for future retail destination
store expansion. In fiscal 2006, $53.0 million in bonds we owned related to our Wheeling, West Virginia retail store
and distribution center were retired in connection with a transaction whereby we took a subordinate position on the
remaining bonds we hold related to this location. These remaining bonds are classified on our consolidated balance
sheet as marketable securities with a value of approximately $42.9 million. We have received notification from the
bond trustee that it intends to retire the remainder of this issuance in 2007. We opened four retail destination stores
in both fiscal years 2006 and 2005. One of our retail stores that opened in 2006 is leased with funding coming from
economic development bonds or marketable securities. As of December 30, 2006, we had entered into material
commitments totaling approximately $195.0 million for fiscal 2007 and $97.0 million for fiscal 2008 primarily
for estimated capital expenditures and the purchase of future economic development bonds in connection with the
construction and development of new destination retail stores. This does not include any amounts for contractual
obligations associated with our Lacey, Washington; Hammond, Indiana; Adairsville, Georgia; and Montreal, Canada;
destination retail stores, which are in the process of negotiations. Certain contractual aspects of these locations are
still being negotiated and will be subject to customary conditions to closing. We expect the total cost of each of these
destination retail stores, including the cost of economic development bonds, to fall in the estimated range of $30 to
$50 million each. We expect to incur the majority of the costs for these locations in 2007 and 2008. In addition, we
are obligated to fund the remaining $1.8 million of economic development bonds and construction costs related to
the expansion of our distribution center in Wheeling, West Virginia. We are also committed to fund $3.6 million of
economic development bonds related to our fiscal 2005 stores. When the bonds are funded, we will be reimbursed
for the qualifying construction costs we have incurred.