Cabela's 2006 Annual Report Download - page 77

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73
CABELA’S INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands Except Share and Per Share Amounts)
Delinquent loans in the managed credit card loan portfolio
at fiscal year end:
30-89 days.................................................. $ 9,589 $ 6,856
90 days or more and still accruing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,095 $ 2,176
Total net charge-offs on the managed credit card loans
portfolio for fiscal year ended . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 25,199 $ 23,602
Annual average credit card loans:
Managed credit card loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,357,671 $ 1,095,580
Securitized credit card loans including seller’s interest . . . . . . . . . . . . . . . . . $ 1,325,149 $ 1,074,765
Total net charge-offs as a percentage of annual average
managed credit card loans ........................................ 1.86% 2.15%
Retained Interests:
Retained interests in securitized loans consisted of the following at the fiscal years ended:
2006 2005
Cash reserve account ........................................................ $ 9,638 $16,495
Interest-only strips .......................................................... 24,473 15,567
Class B securities ........................................................... 4,922 2,403
$39,033 $34,465
Key Assumptions:
The following are the key economic assumptions used by management to estimate the fair value of the interest-
only strips resulting from the securitization of credit card loans for the fiscal years ended:
2006 2005
Weighted average payment rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33.05% to 35.27% 35.91% to 37.37%
Weighted average life in years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.542 to 0.625 0.542
Weighted average expected credit losses . . . . . . . . . . . . . . . . . . . . . . . . 2.59% to 2.96% 3.07% to 3.66%
Servicing fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.25% to 2.00% 1.25% to 2.00%
Discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.37% to 11.39% 9.71% to 12.22%
Weighted average interest rate paid to investors . . . . . . . . . . . . . . . . . . 5.46% to 5.62% 4.21% to 5.07%
Sensitivity Analysis:
The key economic assumptions used by management and the sensitivity of the current fair value of retained
interests of $39,033 at fiscal 2006 to immediate 10% and 20% adverse changes in those assumptions are as follows:
Assumption
Impact on Fair Value of
an Adverse Change of
10% 20%
Weighted average payment rates . . . . . . . . . . . . . . . . . . . . . . . . . . 33.05% $(1,242 ) $(2,373 )
Weighted average expected credit losses . . . . . . . . . . . . . . . . . . . . 2.67% $ (858 ) $(1,716 )
Discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.37% and 10.37% $ (325 ) $ (644 )
Weighted average interest paid to investors . . . . . . . . . . . . . . . . . . 5.46% $ (854 ) $(1,709 )