Cabela's 2006 Annual Report Download - page 76

Download and view the complete annual report

Please find page 76 of the 2006 Cabela's annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 114

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114

72
CABELA’S INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands Except Share and Per Share Amounts)
assets and servicing liabilities: (1) the amortization method or (2) the fair value measurement method This statement
is effective as of the beginning of an entity’s first fiscal year that begins after September 15, 2006, or beginning in
fiscal 2007 for the Company. Management does not believe that the adoption of the provisions of this statement will
have a material effect on the Company’s financial position or results of operations.
In September 2006, the FASB issued FAS No. 157, Fair Value Measurements (“FAS 157”). This statement
enhances existing guidance for measuring and disclosing the fair value of assets and liabilities for more consistency
and comparability. FAS 157 provides a single definition of fair value, together with a framework for measuring it,
and requires expanded disclosures to provide information about the extent to which fair value is used to measure
assets and liabilities, the methods and assumptions used to measure fair value, and the effect of fair value measures
on earnings. FAS 157 is effective for financial statements issued in fiscal years beginning after November 15, 2007.
Management does not believe that the adoption of the provisions of this statement will have a material effect on the
Company’s financial position or results of operations.
2. SALE OF CREDIT CARD LOANS
WFB has established a trust for the purpose of routinely selling and securitizing credit card loans. WFB maintains
responsibility for servicing the securitized loans and receives a servicing fee based on the average outstanding loans
in the trust. Servicing fees are paid monthly and reflected as a component of other non-interest income in Financial
Services revenue. The trust issues commercial paper, long-term bonds or long-term notes. Variable bonds and notes
are priced at a benchmark rate plus a spread. Fixed rate notes are priced on a five-year swap rate plus a spread. WFB
retains rights to future cash flows arising after investors have received the return for which they are entitled and after
certain administrative costs of operating the trust. This portion of the retained interests is known as interest-only
strips and is subordinate to investor’s interests. The value of the interest-only strips is subject to credit, payment rate
and interest rate risks on the loans sold. The investors have no recourse to the assets of WFB for failure of debtors to
pay. However, as contractually required, WFB establishes certain cash accounts, known as cash reserve accounts, to
be used as collateral for the benefit of investors.
Credit card loans held for sale and credit card loans receivable consisted of the following at fiscal years
ended:
2006 2005
Composition of credit card loans held for sale and credit card loans receivable:
Loans serviced ................................................. $ 1,674,064 $ 1,340,820
Loans securitized and sold to outside investors . . . . . . . . . . . . . . . . . . . . . . . . (1,514,000 ) (1,247,000 )
Securitized loans with securities owned by WFB which are classified as
retained interests............................................. (4,922 ) (2,403 )
155,142 91,417
Less adjustments to market value and allowance for loan losses . . . . . . . . . . (2,459 ) (1,759 )
Total (including transferor’s interest of $122,824 and $68,736) . . . . . . . . . . . . . . $ 152,683 $ 89,658