Cabela's 2008 Annual Report Download

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2008 ANNUAL REPORT
Letter To Shareholders Form 10–K

Table of contents

  • Page 1
    2008 ANNUAL REPORT Letter To Shareholders Form 10-K

  • Page 2
    ... our World's Foremost Outfitter. growing number of retail stores and our wellestablished direct business, we offer a wide and distinctive selection of high-quality outdoor products at competitive prices while providing superior customer service. We also issue the Cabela's CLUB® Visa credit card...

  • Page 3
    ... visited e-commerce website in the sporting goods industry. In 2008, Cabela's had more than twice the traffic of our next closest competitor. In fact, of the largest retail websites in the United States, Cabela's ranks in the Top 40 in annual sales regardless of industry. In our retail stores, our...

  • Page 4
    ... and look forward to further improvement in 2009. World's Foremost Bank continued to add new cardholders. In 2008, the average number of active accounts increased 15.5% to 1.14 million average active accounts. The Cabela's CLUB Visa loyalty program provides us a significant strategic advantage over...

  • Page 5
    ..., strong brand and superior customer service are a competitive advantage unmatched by anyone in our industry and will serve us well for many years to come. In closing, I would like you to know this will be my last correspondence to you as Cabela's President and Chief Executive Officer. I am sure you...

  • Page 6
    ... New York Stock Exchange. For the purposes of this disclosure only, the registrant has assumed that its directors and executive officers and the beneficial owners of 5% or more of its voting common stock as of June 27, 2008, are affiliates of the registrant. Indicate the number of shares outstanding...

  • Page 7
    ... into new markets; market saturation due to new retail store openings; the rate of growth of general and administrative expenses associated with building a strengthened corporate infrastructure to support our growth initiatives; increasing competition in the outdoor segment of the sporting goods...

  • Page 8
    ... 14. Directors, Executive Officers and Corporate Governance Executive Compensation Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Certain Relationships and Related Transactions, and Director Independence Principal Accounting Fees and Services PART IV...

  • Page 9
    ... our growing number of retail stores, and our well-established direct business, we believe we offer the widest and most distinctive selection of high-quality outdoor products at competitive prices, while providing superior customer service. We also issue the Cabela's CLUB Visa® credit card, which...

  • Page 10
    ...offering home decorating items; and Wild Wings, offering wildlife prints and other collectibles. Financial Services Business Through our wholly-owned subsidiary, World's Foremost Bank, we issue and manage the Cabela's CLUB Visa card and related customer loyalty rewards program. We believe the Cabela...

  • Page 11
    ... customers. This card is marketed throughout our catalogs and our Internet site. Our customers can apply for the Cabela's CLUB Visa card at our retail stores and website through our instant credit process and, if approved, receive reward points available for use on merchandise purchases the same day...

  • Page 12
    ... of new catalog titles, and the development and marketing of new products. We have taken advantage of web-based technologies such as targeted promotional e-mails, on-line shopping engines, and Internet affiliate programs to increase sales. We also are improving our customer relationship management...

  • Page 13
    ... to access and use our retail store, catalog, and Internet channels. For example, our in-store pick-up program allows customers to order products through our catalogs and Internet site and have them delivered to the retail store of their choice without incurring shipping costs, increasing foot...

  • Page 14
    ...centers located in Sidney, Nebraska; Prairie du Chien, Wisconsin; and Wheeling, West Virginia. These distribution centers comprise nearly 3.0 million square feet of warehouse space for our retail store replenishment and Direct business activities. We ship merchandise to our Direct business customers...

  • Page 15
    ... "-The customer service enhancements we implemented at our retail stores caused our Direct business to establish nexus in the states where our retail stores are located, which caused our Direct business to pay additional income and sales taxes and may have an adverse effect on the profitability and...

  • Page 16
    ... we electronically file such material with or furnish it to the Securities and Exchange Commission ("SEC"). Our SEC reports can be accessed through the investor relations section of our website. The information on our website, whether currently posted or in the future, is not part of this or any...

  • Page 17
    ... as The Sports Authority, Dick's Sporting Goods, and Big 5 Sporting Goods; • retailers that currently compete with us through retail businesses that may enter the direct business; • mass merchandisers, warehouse clubs, discount stores, and department stores, such as Wal-Mart and Target; and...

  • Page 18
    ... new stores in locations with high concentrations of our Direct business customers. As a result of this competition, we may need to spend more on advertising and promotion. Some of our mass merchandising competitors, such as Wal-Mart, do not currently compete in many of the product lines we offer...

  • Page 19
    ... of profitability in our Retail business, particularly as we expand into markets now served by other large-format sporting goods retailers and mass merchandisers. In particular, new retail stores typically generate lower operating margins because pre-opening costs are fully expensed in the year of...

  • Page 20
    ... our Direct business; • failures to properly design, print, and mail our catalogs in a timely manner; • failures to introduce new catalog titles; • failures to timely fill customer orders; • changes in consumer preferences, willingness to purchase goods through catalogs or the Internet...

  • Page 21
    ... our distribution centers to our retail stores; • telephone companies to provide telephone service to our in-house customer care centers; • communications providers to provide our Internet users with access to our website and a website hosting service provider to host and manage our website...

  • Page 22
    ... success depends on hiring, training, managing, and retaining quality managers, sales associates, and employees in our retail stores and customer care centers. Our corporate headquarters, distribution centers, return center, and some of our retail stores are located in sparsely populated rural areas...

  • Page 23
    ... at our distribution centers or return facility could cause us to lose merchandise and be unable to effectively deliver to our direct customers and retail stores. We currently rely on distribution centers in Sidney, Nebraska; Prairie du Chien, Wisconsin; and Wheeling, West Virginia, to handle...

  • Page 24
    ... and profitability. We often purchase economic development bonds issued by state or local governmental entities in connection with the development of our retail stores. The proceeds of these bonds are then used to fund the construction and equipping of new retail stores and related infrastructure...

  • Page 25
    ... time-consuming, result in costly litigation, cause product delays, or require us to enter into royalty or licensing agreements. As a result, any such claim could have an adverse effect on our operating results. Risks Related to Our Financial Services Business We may experience limited availability...

  • Page 26
    ... participating preferred stock investment. The volatility and disruption of the capital and credit markets as well as downgrades of the ratings on the outstanding notes issued by our Financial Services business' securitization trust may negatively impact our ability to access financing. While...

  • Page 27
    ... make payments to us due to current economic conditions and limited access to other credit sources; • inability to manage credit risk and keep credit models up to date with current consumer credit trends; • lack of growth of potential new customers generated by our Retail and Direct businesses...

  • Page 28
    ...Services business. If the rate of interest we pay on borrowings increases more (or more rapidly) than the rate of interest we earn on loans, our net interest income, and therefore our earnings, could fall. Our earnings could also be adversely affected if the rates on our credit card account balances...

  • Page 29
    ...interest rate we pay on our borrowings and the fees we earn from these accounts may change and our profitability may be adversely affected. Credit card industry litigation could adversely impact the amount of revenue generated by our Financial Services business. Our Financial Services business faces...

  • Page 30
    ... facility. The following table provides information regarding the general location, use, and approximate size of our principal non-retail properties: Property Corporate Headquarters Administrative Offices and Customer Care Center Distribution Center Distribution Center Distribution Center Retail...

  • Page 31
    ... United States retail stores used in our Retail segment: Location Kearney, Nebraska Sidney, Nebraska Owatonna, Minnesota Prairie Du Chien, Wisconsin East Grand Forks, Minnesota Dundee, Michigan Mitchell, South Dakota Kansas City, Kansas Hamburg, Pennsylvania Wheeling, West Virginia Fort Worth, Texas...

  • Page 32
    ... persons who hold our common stock in nominee or "street name" accounts through brokers or banks. The following table sets forth, for the fiscal quarters indicated, the high and low sales prices per share of our common stock as reported on the NYSE: 2008 High First Quarter Second Quarter Third...

  • Page 33
    ... our common stock and do not anticipate paying any cash dividends on our common stock in the foreseeable future. In addition, our revolving credit facility and our senior notes limit our ability to pay dividends to our stockholders. Equity Compensation Plans For information on securities authorized...

  • Page 34
    ... per share Selected Balance Sheet Data: Cash and cash equivalents (2) Working capital (2) Total assets Total debt Total stockholders' equity Other Data: Depreciation and amortization Property and equipment additions including accrued amounts Purchases of economic development bonds 2007 Fiscal Year...

  • Page 35
    ...of our Retail and Direct business segments. Our Retail business segment is comprised of 29 stores, 28 located in the United States and one in Canada. Our Direct business segment is comprised of our catalog mail order business and our highly acclaimed Internet website. Our Financial Services business...

  • Page 36
    ... retail store square footage by 200,000 square feet bringing our total retail square footage to 4.3 million square feet at the end of 2008. Customer Service Enhancements - We offered our customers integrated opportunities to access and use our retail store, catalog, and Internet channels, including...

  • Page 37
    ... gross margins in each of our sales channels; and • improve inventory management by actively managing inventory levels and product deliveries through technologies and by reducing unproductive inventory. Retail Store Efficiencies - For 2009, our primary objective is to enhance our retail store...

  • Page 38
    ... attracting new cardholders through lower cost marketing efforts with our Retail and Direct businesses. By continuing our conservative underwriting and account management standards and practices, we are controlling costs in our Financial Services segment through active management of our credit card...

  • Page 39
    ... revenue contributed by each, are presented in the following table for our Retail and Direct businesses and in total for the years ended: Retail 2008 2007 Hunting Equipment Fishing and Marine Camping Clothing and Footwear Gifts and Furnishings Total 41.6% 15.3 12.9 25.2 5.0 100.0% 38.7% 15.6 12.9 27...

  • Page 40
    ...website. The net decrease in Direct revenue for 2008 compared to 2007 was due to decreases in the fishing and marine and the clothing and footwear general product categories, partially offset by increases in camping, hunting equipment, and gifts and furnishings. The number of active Direct customers...

  • Page 41
    ..., and account growth. Customer rewards costs increased $10 million from continued growth in the Cabela's CLUB Visa card usage by our customers. Managed credit card loans of the Financial Services business segment include both credit card loans receivable we own and securitized credit card loans in...

  • Page 42
    ...-GAAP basis for the years ended: 2008 Interest income Interchange income, net of customer rewards costs Other fee income Interest expense Provision for loan losses Other Managed Financial Services revenue $ 202,877 75,827 37,806 (89,862) (64,003) (3,674) $ 158,971 $ 2007 (Dollars in Thousands) 2006...

  • Page 43
    ... use their credit card, and then redeem earned points for products and services at our retail stores or through our Direct business. The percentage of our merchandise sales that were made on the Cabela's CLUB card was 27.5% for 2008 compared to 26.3% for 2007. The dollar amounts related to points...

  • Page 44
    ... our retail stores, Internet website, distribution centers, product procurement, and overhead costs, including: advertising and marketing, catalog costs, employee compensation and benefits, occupancy costs, information systems processing, and depreciation and amortization. Selling, distribution, and...

  • Page 45
    ... in selling, distribution, and administrative expenses in our Direct segment where projected discounted cash flows were less than the fair value of the reporting unit. In addition, we evaluated the recoverability of our available-for-sale economic development bonds being actively marketed and...

  • Page 46
    ... to support this store expansion. Operating income also includes income of $8.7 million from gift instrument breakage previously described. The Financial Services segment incurs a marketing fee paid to the Retail and Direct business segments. This marketing fee is included in selling, distribution...

  • Page 47
    ...: Direct Retail Financial Services Other Total revenue New store sales Comparable store sales Average sales per square foot Gross Profit Gross Profit as a percentage of revenue Merchandising gross margin Merchandising gross margin as a percentage of merchandising revenue Selling, distribution and...

  • Page 48
    ... information system costs of $2 million specifically related to our website. Financial Services: • Increases in advertising and promotional costs of $1 million due to increases in new account acquisition costs, increases in Visa charges driven by increases in credit card transactions, and account...

  • Page 49
    ... of new retail stores in 2007 and 2006, 2) sales increases for our Direct business, and 3) the profitability of our Financial Services business segment. The Financial Services segment incurs a marketing fee paid to the Retail and Direct business segments. This marketing fee is included in selling...

  • Page 50
    ... to result in a charge-off and less likely to be closed. The following table shows our managed credit card loans outstanding at the end of 2008 and 2007 segregated by the number of months passed since the accounts were opened. 2008 Loans Percentage Outstanding of Total $ 121,603 151,201 330,973 278...

  • Page 51
    ... of our merchandising business relate to capital for new retail stores, purchases of inventory, investments in our management information systems and infrastructure, purchases of economic development bonds related to the construction of new retail stores, and general working capital needs. We...

  • Page 52
    ... the terms of our credit facility. Financial Services Business Segment (World's Foremost Bank or "WFB") - The primary cash requirements of WFB relate to the financing of credit card loans. These cash requirements will increase if our credit card originations increase or if our cardholders' balances...

  • Page 53
    ... in inventory in 2008 compared to 2007, as the accounts payable and accrued expenses balances decreased $108 million at the end of 2008 compared to 2007. The net change in the liability for gift instruments and credit card reward points was a decrease of $39 million over 2007 from increased sales of...

  • Page 54
    ... and related projects, for the years ended: 2008 Property and equipment additions Purchases of economic development bonds Acquisition of outdoor equipment retailer, net of cash acquired Total Proceeds from retirements and maturities of economic development bonds Number of new retail stores opened or...

  • Page 55
    ... senior notes. We used the proceeds from this offering for new retail store expansion, including property and equipment additions, purchase of economic development bonds, and general corporate purposes. Our $430 million credit agreement requires that Cabela's comply with certain financial and other...

  • Page 56
    ...in 2006) used to support our retail store expansion. Grants and Economic Development Bonds In the past, we have negotiated economic development arrangements relating to the construction of a number of our new retail stores, including free land, monetary grants, and the recapture of incremental sales...

  • Page 57
    ... there is no independent market data for valuation of these types of bonds. If sufficient tax revenue is not generated by the subject properties, we will not receive scheduled payments and will be unable to realize the full value of the bonds carried on our consolidated balance sheet. As of December...

  • Page 58
    ... or other closed-end loan account, the terms of a credit card account permit a customer to borrow additional amounts and to repay each month an amount the customer chooses, subject to a monthly minimum payment requirement. The credit card account remains open after repayment of the balance and the...

  • Page 59
    ... tables provide summary information concerning our future contractual obligations at the end of 2008. 2009 Long-term debt (1) $ Interest payments (2) Capital lease obligations Operating leases Time deposits by maturity Obligations under new store and expansion arrangements (3) Purchase obligations...

  • Page 60
    ... and commitments associated with retail store locations where we are in the process of certain negotiations. (4) Our purchase obligations relate primarily to purchases of inventory, shipping, and other goods and services in the ordinary course of business under binding purchase orders or contracts...

  • Page 61
    ... design, prepress/production, paper, printing, postal, and mailing costs. Deferred catalog costs are amortized over their expected period of future benefit or twelve months, whichever is shorter, based upon sales forecasts developed using historical sales for similar catalog offerings. Deferred...

  • Page 62
    ...on property and/or sales tax collections derived from our operations, and potentially other businesses, some of which may be in the development stage. Had our fair value estimates been lower by 10% as of the end of 2008, the value of economic development bonds reflected in our consolidated financial...

  • Page 63
    ... Interest Entities. Currently, the transfers of our bank subsidiary's credit card receivables in securitization transactions qualify for sale accounting treatment. The trusts used in our bank subsidiary's securitizations are not consolidated with us for financial reporting purposes because the...

  • Page 64
    ... the mix of our credit card account balances at the years ended: 2008 As a percentage of total balances outstanding: Balances carrying interest rate based upon the the national prime lending rate Balances carrying an interest rate of 9.99% Balances carrying an interest rate of 0.00% Balances not...

  • Page 65
    ... is charged if the account is paid in full within 20 days of the billing cycle, which represent 30.7% of total balances outstanding. Credit card balances with a zero percentage interest rate have increased over prior years due to an increase in promotional merchandise offers. Some of the zero...

  • Page 66
    ... STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS Page REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM CONSOLIDATED FINANCIAL STATEMENTS: Consolidated Statements of Income Consolidated Balance Sheets Consolidated Statements of Cash Flows Consolidated Statements of Stockholders' Equity...

  • Page 67
    ... ACCOUNTING FIRM To the Board of Directors and Stockholders of Cabela's Incorporated and Subsidiaries Sidney, Nebraska We have audited the accompanying consolidated balance sheets of Cabela's Incorporated and Subsidiaries (the "Company") as of December 27, 2008 and December 29, 2007, and the related...

  • Page 68
    ... OF INCOME (Dollars in Thousands Except Earnings Per Share) 2008 Revenue: Merchandise sales Financial services revenue Other revenue Total revenue Cost of revenue: Merchandise costs Cost of other revenue Total cost of revenue (exclusive of depreciation and amortization) Selling, distribution, and...

  • Page 69
    ... doubtful accounts of $556 and $1,851 Credit card loans, net of allowances of $1,507 and $1,197 Inventories Prepaid expenses and other current assets Total current assets Property and equipment, net Land held for sale or development Retained interests in securitized loans Economic development bonds...

  • Page 70
    ... assets Land held for sale or development Accounts payable and accrued expenses Gift certificates, and credit card and loyalty rewards programs Other long-term liabilities Income taxes payable Net cash derived from operating activities CASH FLOWS FROM INVESTING ACTIVITIES: Property and equipment...

  • Page 71
    ... Stock based compensation Employee stock purchase plan issuances Exercise of employee stock options Tax benefit on employee stock option exercises BALANCE, end of 2006 Cumulative effect adjustment to adopt FIN 48 Comprehensive income: Net income Unrealized loss on economic development bonds, net...

  • Page 72
    ...Share and Per Share Amounts) 1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Business - Cabela's Incorporated is a retailer of hunting, fishing, and outdoor gear, offering products through retail stores, the Internet, and regular and special catalog mailings. Cabela...

  • Page 73
    ... lower of cost or market. Net unrealized losses, if any, are recognized in income through a valuation allowance. Although WFB continues to service the underlying credit card accounts and maintains the customer relationships, these securitization transactions are treated as sales and the securitized...

  • Page 74
    ... $7,058, and $4,546 for 2008, 2007, and 2006, respectively. Store Pre-opening Expenses - Non-capital costs associated with the opening of new stores are expensed as incurred. Leases - We lease certain retail locations, distribution centers, office space, equipment and land. Assets held under capital...

  • Page 75
    ... through sales and/or property taxes generated by the retail store and/or within a designated development area. Cash and land grants are recognized as deferred grant income as a reduction to the costs, or recognized fair value in the case of land grants, of the associated property and equipment...

  • Page 76
    ...-to-maturity and available-for-sale economic development bonds below cost that are deemed to be other than temporary are reflected in earnings. Credit Card and Loyalty Rewards Programs - Cabela's CLUB Visa cardholders receive Cabela's points based on the dollar amounts of transactions through WFB...

  • Page 77
    ... are discounted using current market rates offered for similar products for purposes of estimating fair value. The estimated fair value of credit card loans is based on the present value of future expected cash flows using assumptions for credit losses, payment rates, and discount rates commensurate...

  • Page 78
    ... of this statement will have a material effect on our financial position or results of operations. In February 2008, the FASB issued FSP FAS 140-3, Accounting for Transfers of Financial Assets and Repurchase Financing Transactions. The objective of this FSP is to provide implementation guidance on...

  • Page 79
    ... Interest Entities. Currently, the transfers of our bank subsidiary's credit card receivables in securitization transactions qualify for sale accounting treatment. The trusts used in our bank subsidiary's securitizations are not consolidated with us for financial reporting purposes because the...

  • Page 80
    ... The credit card loans receivable equal to the investor interest is removed from the consolidated financial statements. As contractually required, WFB establishes certain cash accounts, to be used as collateral for the benefit of investors. As of 2008 and 2007, the balances in the cash accounts with...

  • Page 81
    ...$229,900 notional swap agreement in connection with the Series 2008-I securitization in order to manage interest rate exposure. The exposure is related to changes in cash flows from funding credit card loans, which include a high percentage of accounts that do not incur monthly finance charges based...

  • Page 82
    ... card loans, including securitized loans: 2008 Credit card loans held for sale (including transferor's interest of $143,411 and $166,700) Credit card loans receivable, net of allowances of $1,507 and $1,197 Total Composition of credit card loans at year end: Loans serviced Loans securitized and sold...

  • Page 83
    ... economic assumptions used to estimate the fair value of the retained interests resulting from the securitization of credit card loans for the years ended: 2008 Weighted average payment rates Weighted average life in years Weighted average expected credit losses Servicing fee Discount rate Weighted...

  • Page 84
    ... value of future expected cash flows, using assumptions for credit losses, payment rates, and discount rates commensurate with the risks involved. This valuation does not include the value that relates to estimated cash flows generated from new loans over the life of the cardholder relationship...

  • Page 85
    ... STATEMENTS (Dollars in Thousands Except Share and Per Share Amounts) 6. ECONOMIC DEVELOPMENT BONDS Economic development bonds consisted of the following at the years ended: 2008 Gross Gross Unrealized Unrealized Gains Losses 35 $ (9,951) $ Cost Classified as: Available-for-sale Fair Value 112...

  • Page 86
    ... other assets (current and long-term) consisted of the following at the years ended: 2008 Prepaid expenses and other current assets: Deferred catalog costs Interest and notes receivable Financial Services - Visa interchange funding Financial Services accrued interest and other receivables Other $ 31...

  • Page 87
    ... and $137,191 at the end of 2008 and 2007, respectively. For purposes of estimating fair value, time deposits are pooled in homogeneous groups and the future cash flows of those groups are discounted using current market rates offered for similar products. At the end of 2008 and 2007, the carrying...

  • Page 88
    ...company holds a security interest in the specific inventory held Cabela's. We record this merchandise in inventory. Our revolving credit facility limits this security interest to $50,000. The extended payment terms to the vendor do not exceed one year. The outstanding liability, included in accounts...

  • Page 89
    CABELA'S INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in Thousands Except Share and Per Share Amounts) 13. LONG-TERM DEBT AND CAPITAL LEASES Long-term debt, including revolving credit facilities and capital leases, consisted of the following at the years ended...

  • Page 90
    ... FINANCIAL STATEMENTS (Dollars in Thousands Except Share and Per Share Amounts) We have a lease agreement for our distribution facility in Wheeling, West Virginia. The lease term is through June 2036. The monthly installments are $83 and the lease contains a bargain purchase option at the end...

  • Page 91
    ... Allowance for doubtful accounts Economic development bonds Other Deferred tax liabilities: Prepaid expenses Property and equipment Inventories Retained interests in securitized loans Other Valuation allowance Net deferred tax liability Less current deferred income taxes Long-term deferred income...

  • Page 92
    ...classified as other long-term liabilities in the consolidated balance sheet, is as follows for the years ended: 2008 Unrecognized tax benefits, beginning of year Decreases on items related to prior periods Increases from current period items Unrecognized tax benefits, end of year $ 2,000 (134) 1,210...

  • Page 93
    CABELA'S INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in Thousands Except Share and Per Share Amounts) We have entered into real estate purchase, construction, and/or economic development agreements for various new retail store site locations. At December 27, ...

  • Page 94
    ...Capitalized Well-Capitalized Amount Ratio Amount Ratio $ 56,102 28,051 16,568 8.00 % 4.0 4.0 $ 70,127 42,076 20,710 10.0% 6.0 5.0 In December 2008, WFB received $25,000 from Cabela's in exchange for 250,000 shares of WFB convertible participating preferred stock. If management elected to covert the...

  • Page 95
    ... value of options in the years presented was estimated using the Black-Scholes model with the following weighted average assumptions: 2008 Risk-free interest rate based on U.S. Treasury yield curve in effect at the grant date Dividend yield Expected volatility Weighted average expected life based...

  • Page 96
    CABELA'S INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in Thousands Except Share and Per Share Amounts) The following table provides information relating to our equity share-based payment awards at December 27, 2008: Weighted Average Remaining Contractual Life (...

  • Page 97
    ... new shares in the future. 401(k) Savings Plan - All employees are eligible to defer up to 80% of their wages to Cabela's 401(k) savings plan, subject to certain limitations. Through 2008, the Company matched 100% of eligible employee deferrals up to 6% of eligible wages. Total expense for employer...

  • Page 98
    ... in the earnings per share calculations for the years ended: 2008 Weighted average number of shares: Common shares - basic Effect of incremental dilutive securities: Stock options and employee stock purchase plan shares Common shares - diluted Options outstanding considered anti-dilutive 66...

  • Page 99
    ... our retail stores; the Direct segment sells products through direct mail catalogs and e-commerce websites (Cabelas.com and complementary websites); and the Financial Services segment issues co-branded credit cards. For the Retail segment, operating costs primarily consist of labor, advertising...

  • Page 100
    CABELA'S INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in Thousands Except Share and Per Share Amounts) infrastructure and related information systems, corporate cash and cash equivalents, economic development bonds, prepaid expenses, deferred income taxes, and ...

  • Page 101
    ... date. In determining fair value, we use various methods including discounted cash flow projections based on available market interest rates and management estimates of future cash payments. Financial instrument assets and liabilities measured and reported at fair value are classified and disclosed...

  • Page 102
    ... approximates fair value. Fair values of economic development bonds ("bonds") are estimated using discounted cash flow projections based on available market interest rates and management estimates including the estimated amounts and timing of expected future tax payments to be received by the...

  • Page 103
    ...and available-for-sale economic development bonds below cost that are deemed to be other than temporary are reflected in earnings. The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, gift certificates (including credit card and loyalty rewards programs), accrued...

  • Page 104
    ... to allow timely decisions regarding required disclosure. In connection with this annual report on Form 10-K, our Chief Executive Officer and Chief Financial Officer evaluated, with the participation of our management, the effectiveness of our disclosure controls and procedures as of the end of the...

  • Page 105
    ... accordance with accounting principles generally accepted in the United States of America. With the participation of our Chief Executive Officer and our Chief Financial Officer, management evaluated the effectiveness of our internal control over financial reporting as of December 27, 2008, based on...

  • Page 106
    ..., in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements and financial statement schedule as of and for the year ended December 27, 2008 of the Company and our report dated February 24, 2009 expressed an unqualified...

  • Page 107
    ... website, whether currently posted or posted in the future, is not part of this document or the documents incorporated by reference in this document. On June 12, 2008, we filed with the NYSE the Annual CEO Certification regarding the company's compliance with the NYSE's Corporate Governance listing...

  • Page 108
    ...filed as part of this report: 1. Financial Statements: • Report of Independent Registered Public Accounting Firm • Consolidated Statements of Income -Years ended December 27, 2008, December 29, 2007, and December 30, 2006 • Consolidated Balance Sheets - December 27, 2008, and December 29, 2007...

  • Page 109
    ...No. 333-113835)* Cabela's Incorporated 2004 Stock Plan (as amended and restated effective May 14, 2008) (incorporated by reference from Exhibit 10.2 of our Current Report on Form 8-K, filed on May 19, 2008, File No. 001-32227)* Form of 2004 Stock Plan Employee Stock Option Agreement (incorporated by...

  • Page 110
    ... our Current Report on Form 8-K, filed on June 4, 2008, File No. 001-32227)* 2004 Employee Stock Purchase Plan (incorporated by reference from Exhibit 10.14 of our Registration Statement on Form S-1, filed on March 23, 2004, Registration No. 333-113835)* Second Amended and Restated Credit Agreement...

  • Page 111
    ..., and Charles Baldwin) (incorporated by reference from Exhibit 10.1 of our Current Report on Form 8-K, filed on June 4, 2008, File No. 001-32227)* Form of Proprietary Matters Agreement - World's Foremost Bank (executed by Ralph W. Castner and Joseph M. Friebe) (incorporated by reference from Exhibit...

  • Page 112
    ... W. Cabela * Theodore M. Armstrong * John H. Edmondson * John Gottschalk * Reuben Mark * Michael R. McCarthy Title President, Chief Executive Officer, and Director (Principal Executive Officer) Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer...

  • Page 113
    ... financial information; and Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. b. Date: February 25, 2009 /s/ Dennis Highby Dennis Highby President and Chief Executive Officer...

  • Page 114
    ... information; and Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. b. Date: February 25, 2009 /s/ Ralph W. Castner Ralph W. Castner Vice President and Chief Financial Officer...

  • Page 115
    ... of 1934 as amended; and the information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the registrant. Dated: February 25, 2009 /s/ Dennis Highby Dennis Highby President and Chief Executive Officer /s/ Ralph W. Castner Ralph...

  • Page 116
    ... of World's Foremost Bank John Gottschalk Chairman Omaha World-Herald Company Joseph M. Friebe Vice President, and President and Chief Executive Officer of World's Foremost Bank Charles Baldwin Corporate Information Corporate Headquarters Cabela's Incorporated One Cabela Drive Sidney, Nebraska...

  • Page 117
    Cabela's Inc. One Cabela Drive c a be l a s . c o m Sidne y, NE 69160 NY S E:C AB 308. 254. 5505