Cabela's 2006 Annual Report Download - page 81

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CABELA’S INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands Except Share and Per Share Amounts)
The Company is party to inventory financing agreements that allow certain vendors providing boat and all
terrain vehicle merchandise to give the Company extended payment terms. The vendors are responsible for all interest
payments for the financing period and the financing company holds a security interest in the specific inventory held
by the Company. The Company’s revolving credit facility limits this security interest to $20,000. The Company
records this merchandise in inventory with an offsetting liability in accounts payable in the consolidated balance
sheet. The loans and payments are reflected in the financing lines of credit in the Company’s consolidated cash flow
statements. The extended payment terms to the vendor do not exceed one year. The outstanding liability was $9,829
and $1,443 at the end of fiscal 2006 and 2005, respectively.
WFB has an unsecured federal funds purchase agreement with a financial institution. All federal funds
transactions are on a daily origination and return basis. Daily interest charges are determined based on mutual
agreement by the parties. The maximum amount that can be borrowed is $25,000. There were no amounts outstanding
as of December 30, 2006, and December 31, 2005.
WFB also has an unsecured federal funds purchase agreement with another financial institution. The maximum
amount that can be borrowed is $60,000. The interest rate for the purchase agreement is based on the current federal
funds rate. At December 30, 2006, there was $6,491 outstanding at 5.75%. There were no amounts outstanding as
of December 31, 2005.
7. LONG-TERM DEBT AND CAPITAL LEASES
Long-term debt and capital leases consisted of the following at the fiscal years ended:
2006 2005
Unsecured senior notes; payable to various insurance companies; principal payable in
annual installments of $25,000 through September 5, 2009; interest payable semi-
annually at 4.95%...................................................... $ 75,000 $100,000
Unsecured notes payable to various insurance companies; balloon principal payable in
full February 27, 2016; interest payable semi-annually at 5.99% . . . . . . . . . . . . . . . . . 215,000 —
Unsecured senior notes; interest rates from 8.0% to 9.19%; payable with interest and
principal due in monthly installments of $274 through January 1, 2007; beginning
February 1, 2007 monthly principal of $81 due through January 1, 2010 . . . . . . . . . . 2,791 5,686
Capital lease obligation; implicit rate of 5.9% (2006) and 4.0% (2005); payable in
monthly installments of $83 ($42 for 2005) through June 2036 . . . . . . . . . . . . . . . . . . 13,948 8,495
Various notes payable due through October 15, 2014; interest rates from 4.0% to 8.0%;
total annual installments of approximately $790 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,643 5,645
Total long-term debt................................................. 311,382 119,826
Less current maturities .................................................... (26,803) (29,049)
Long-term portion................................................... $284,579 $ 90,777
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, as defined, of no less than 2.00 to 1.00 as of the last day of the any
fiscal quarter; and
• a minimum consolidated adjusted net worth as defined.