Cabela's 2006 Annual Report Download - page 56

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The preceding table 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.
Other Commercial Commitments
2007 2008 2009 2010 2011 Thereafter Total
(In Thousands)
Revolving line of credit(1). . . . . . . . . . . . . . . . $ — — — — — — $ —
Revolving line of credit for boat
and ATV inventory(2) . . . . . . . . . . . . . . . . 9,829 — — — — — 9,829
Bank – federal funds(3) . . . . . . . . . . . . . . . . . . 6,491 — — — — — 6,491
Letters of credit . . . . . . . . . . . . . . . . . . . . . . . . 41,257 — — — — — 41,257
Standby letters of credit. . . . . . . . . . . . . . . . . . 13,325 — — — — — 13,325
Total .............................. $70,902 — — — — — $70,902
(1) Our credit agreement allows for maximum borrowings of $325.0 million including lender letters of credit
and standby letters of credit. As of fiscal year end 2006, the total amount available for borrowing under this
revolving line of credit, including lender letters of credit and standby letters of credit, was $270.4 million.
(2) The line of credit for boat and ATV financing is limited by the aforementioned $325.0 million revolving line of
credit to $20.0 million of secured collateral.
(3) The maximum amount that can be borrowed on the federal funds agreements is $85.0 million.
Off-Balance Sheet Arrangements
Operating Leases. We lease various items of office equipment and buildings. Rent expense for these operating
leases is recorded in selling, general and administrative expenses of the consolidated statements of income. Future
obligations are shown in the preceding contractual obligations table.
Credit Card Limits. The bank bears off-balance sheet risk in the normal course of its business. One form of
this risk is through the bank’s commitment to extend credit to cardholders up to the maximum amount of their credit
limits. The aggregate of such potential funding requirements totaled $9.5 billion as of December 30, 2006 and $7.5
billion as of December 31, 2005, which amounts were in addition to existing balances cardholders had at such dates.
These funding obligations are not included on our consolidated balance sheet. While the bank has not experienced,
and does not anticipate that it will experience, a significant draw down of unfunded credit lines by customers, a
significant draw down would create a cash need at the bank which likely could not be met by our available cash and
funding sources. The bank has the right to reduce or cancel these available lines of credit at any time.
Securitizations. As previously described under “-Securitization of Credit Card Loans,” all of the bank’s
securitization transactions have been accounted for as sales transactions and the credit card loans relating to those
pools of assets are not reflected in our consolidated balance sheet.
Bank Dividend Limitations and Minimum Capital Requirements
The ability of the bank to pay dividends to us is limited. Such dividends, which would only be made at the
discretion of our board of directors and the bank’s board of directors, may be limited by a variety of factors, such
as regulatory capital requirements, dividend restriction statutes, broad enforcement powers possessed by regulatory
agencies and requirements imposed by membership in Visa. Under the Nebraska Banking Act, dividends may only
be paid out of “net profits on hand,” which the Nebraska Banking Act defines as the remainder of all earnings from
current operations plus actual recoveries on loans and investments and other assets, after deducting from the total
thereof all current operating expenses, losses and bad debts, accrued dividends on preferred stock, if any, and federal
and state taxes for the present and two immediately preceding calendar years.