Cabela's 2008 Annual Report Download - page 93

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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, 2008, we had total estimated cash commitments of approximately
$92,500 for 2009 and 2010 for projected retail store-related expenditures and the purchase of future economic
development bonds connected with the development, construction, and completion of new retail stores. This does not
include any amounts for contractual obligations associated with retail store locations where we are in the process of
certain negotiations.
Under various grant programs, state or local governments provide funding for certain costs associated with
developing and opening a new retail store. We generally receive grant funding in exchange for commitments, such as
assurance of agreed employment and wage levels at the retail store or that the retail store will remain open, made by
us to the state or local government providing the funding. The commitments typically phase out over approximately
five to 10 years. If we fail to maintain the commitments during the applicable period, the funds received may have
to be repaid or other adverse consequences may arise, which could affect our cash flows and profitability. As of
December 27, 2008, the total amount of grant funding subject to a specific contractual remedy was $11,322.
In April 2007, we began an open account document instructions program, which provides for our company-
issued letters of credit. At the end of 2008 and 2007, we had obligations to pay participating vendors $35,622 and
$6,399, respectively.
WFB enters into financial instruments with off balance sheet risk in the normal course of business through the
origination of unsecured credit card loans. Unsecured credit card accounts are commitments to extend credit and
totaled $12,886,000 and $11,635,000 at December 27, 2008, and December 29, 2007, respectively. These commitments
are in addition to any current outstanding balances of a cardholder. Unsecured credit card loans involve, to varying
degrees, elements of credit risk in excess of the amount recognized in the consolidated balance sheets. The principal
amounts of these instruments reflect WFB’s maximum related exposure. WFB has not experienced and does not
anticipate that all customers will exercise the entire available line of credit at any given point in time. WFB has the
right to reduce or cancel the available lines of credit at any time.
Litigation and Claims – We are party to various proceedings, lawsuits, disputes, and claims arising in the
ordinary course of our business. These actions include commercial, intellectual property, employment, and product
liability claims. Some of these actions involve complex factual and legal issues and are subject to uncertainties. We
cannot predict with assurance the outcome of the actions brought against us. Accordingly, adverse developments,
settlements, or resolutions may occur and negatively impact earnings in the quarter of such development, settlement,
or resolution. However, we do not believe that the outcome of any current action would have a material adverse effect
on our results of operations, cash flows, or financial position taken as a whole.
Self-Insurance – We are self-insured for health claims up to $300 per individual. We have established a liability
for health claims submitted and for those claims incurred prior to year end but not yet reported totaling $3,445 and
$3,929 at the end of 2008 and 2007, respectively.
We are also self-insured for workers’ compensation claims up to $500 per individual. We have established
a liability for workers’ compensation claims submitted and for those claims incurred prior to year end but not yet
reported totaling $4,198 and $4,326 at the end of 2008 and 2007, respectively.
Our liabilities for health and workers’ compensation claims incurred but not reported are based upon internally
developed calculations. These estimates are regularly evaluated for adequacy based on the most current information
available, including historical claim payments, expected trends, and industry factors.