Cabela's 2006 Annual Report Download - page 92

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CABELA’S INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands Except Share and Per Share Amounts)
Upon any voluntary or involuntary liquidation, dissolution or winding up of the Company’s affairs, the holders
of Class B non-voting common stock are entitled to share ratably with the holders of Class A common stock in all
assets remaining after payment to creditors and subject to prior distribution rights of any shares of preferred stock
that the Company may issue in the future. All of the outstanding shares of Class B non-voting common stock are
fully paid and non-assessable.
Retained Earnings - The most significant restrictions on the payment of dividends are the covenants contained
in the Company’s revolving credit agreement and unsecured senior notes purchase agreements. Nebraska banking
laws also govern the amount of dividends that WFB can pay to the Company. The Company has unrestricted
retained earnings of $99,471 available for dividends.
Shelf Registration - On September 2, 2005, the Company filed a Form S-3 Registration Statement to register
6,252,768 shares of common stock. The shares of common stock being offered in the registration statement by selling
stockholders are issuable upon conversion of 6,252,768 shares of non-voting Class B common stock. The Company
will not receive any of the proceeds from the sale of shares of common stock in this offering. The timing and amount
of any sale are within the sole discretion of the selling stockholders. At December 30, 2006, there were 3,986,868
shares of common stock available to be issued upon conversion of shares of non-voting Class B common stock.
Other Comprehensive Income (Loss) - The components of other comprehensive income (loss) and related tax
effects are as follows for the fiscal years ended:
2006 2005 2004
Changes in net unrealized holding gains (losses) on marketable
securities, net of tax (benefit) of $300, $(1,415) and $1,186 . . . . . . . . . . . . $ 500 $(2,561) $2,154
Less adjustment for net (gains) losses on marketable securities included in net
income, net of tax (benefit) of $113, $13 and $(30). . . . . . . . . . . . . . . . . . . . (189) (23) 53
311 (2,584) 2,207
Changes in net unrealized holding gains (losses) on derivatives designated as
cash flow hedges, net of tax (benefit) of $29, $(145) and $49 . . . . . . . . . . . 48 (260) 91
Less adjustment for reclassification of derivatives included in net income, net
of tax (benefit) of $10, $(57) and $162 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (18) 102 (296)
30 (158) (205)
$ 341 $(2,742) $2,002
The components of accumulated other comprehensive income (loss), net of related taxes, are as follows for the
fiscal years ended:
2006 2005
Accumulated net unrealized holding gains (losses) on available-for-sale securities . . . . . . . . . . . $ 292 $ (19)
Accumulated net unrealized holding gains (losses) on derivatives . . . . . . . . . . . . . . . . . . . . . . . . . 23 (7)
Total accumulated other comprehensive income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 315 $ (26)
16. RELATED PARTY TRANSACTIONS
On January 1, 2005, the Company entered into an employee lease agreement with an affiliate of the Company’s
Chairman of the Board where the affiliate leases the services of certain Company employees. This lease agreement
was terminated on December 31, 2006. The Company also had a one-year employee and office space lease agreement
with the Company’s Chairman that terminated on December 31, 2004, pursuant to which he leased the services of
certain Company employees and associated office space. Total reimbursements for these expenses were $335, $297
and $221 for fiscal 2006, 2005 and 2004, respectively. The Company also bought products from an affiliate of the
Company’s Chairman of the Board in fiscal 2006 and 2005. These purchases were at arms-length rates and were not
material.