Cabela's 2009 Annual Report Download - page 99

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CABELA’S INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands Except Share and Per Share Amounts)
There were no amounts outstanding at January 2, 2010, under this credit agreement. At December 27, 2008,
the principal amount outstanding was $20,000. During 2009 and 2008, the average principal balance outstanding
on the line of credit was $85,437 and $178,617, respectively, and the weighted average interest rate was 1.71% and
3.82%, respectively. Letters of credit and standby letters of credit totaling $11,394 and $16,117, respectively, were
outstanding at the end of 2009 and 2008. The average outstanding amount of total letters of credit during 2009 and
2008 was $11,050 and $32,799, respectively.
During the term of the facility, we are required to pay a quarterly facility fee, which ranges from 0.10% to
0.25% of the average daily unused principal balance on the line of credit. Interest on advances on this credit facility
is determined at the greater of:
• the lead lender’s prime rate,
• the average rate on the federal funds rate in effect for the day plus one-half of one percent, or
• the Eurodollar rate of interest plus a margin, as defined.
The credit agreement requires that Cabela’s comply with certain financial and other customary covenants, including:
• a fixed charge coverage ratio (as defined) of no less than 1.50 to 1.00 as of the last day of any quarter;
• a cash flow leverage ratio (as defined) of no more than 3.00 to 1.00 as of the last day of any quarter; and
• a minimum tangible net worth standard (as defined).
The credit agreement includes a dividend provision limiting the amount that Cabela’s could pay to stockholders,
which at January 2, 2010, was not in excess of $84,770. The agreement also has a provision permitting acceleration
by the lenders in the event there is a change in control, as defined. In addition, the credit agreement contains cross
default provisions to other outstanding debt. In the event that we fail to comply with these covenants, a default is
triggered. In the event of default, all outstanding letters of credit and all principal and outstanding interest would
immediately become due and payable. We were in compliance with all financial debt covenants at January 2, 2010.
We also have an unsecured revolving credit agreement for $15,000 Canadian dollars (“CAD”) in conjunction
with the acquisition of the net assets of an outdoors specialty retailer located in Winnipeg, Manitoba. Interest is
variable, computed at rates as defined in the agreement, plus a margin, and payable monthly. At the end of 2009 and
2008, the principal amount outstanding under this credit agreement totaled $2,902 and $6,465, respectively, with
interest rates of 2.25% and 3.50%, respectively.
Advances made pursuant to the $350,000 credit agreement are classified as long-term debt. This agreement
does not contain limitations regarding the pay downs of revolving loans advanced; therefore, advances made pursuant
to this agreement are considered long-term in nature.
We also have financing agreements that allow certain boat and all-terrain vehicle merchandise vendors to
give us extended payment terms. The vendors are responsible for all interest payments, with certain exceptions, for
the financing period and the financing 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 payable,
was $3,510 and $5,162 at the end of 2009 and 2008, respectively.
11. SHORT-TERM BORROWINGS OF FINANCIAL SERVICES SUBSIDIARY
WFB had a $25,000 variable funding facility credit agreement that was secured by a participation interest in the
transferor’s interest of the Trust. On May 28, 2009, this credit agreement was terminated. There were no borrowings
under the credit agreement in 2009 and there was no amount outstanding at the end of December 2008. The weighted
average interest rate on the facility was 3.88% for 2008.