Cabela's 2010 Annual Report Download - page 105

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95
CABELA’S INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands Except Share and Per Share Amounts)
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 $15,797,000 and $12,996,000 at January 1, 2011, and January 2, 2010, 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 – The Company is party to various proceedings, lawsuits, disputes, and claims
arising in the ordinary course of 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. The Company cannot predict with assurance the outcome of the actions brought against it.
Accordingly, adverse developments, settlements, or resolutions may occur and negatively impact earnings in the
applicable period. However, the Company does not believe that the outcome of any current action would have a
material adverse effect on its results of operations, cash flows, or financial position taken as a whole.
Self-Insurance – The Company is self-insured for health claims up to $300 per individual. The Company has
a liability set up for health claims submitted and for those claims incurred prior to year end but not yet reported
totaling $3,603 and $2,389 at the end of 2010 and 2009, respectively.
The Company is also self-insured for workers’ compensation claims up to $500 per individual. The Company
has a liability set up for workers’ compensation claims submitted and for those claims incurred prior to year end
but not yet reported totaling $4,001 and $3,874 at the end of 2010 and 2009, respectively.
The 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.
19. REGULATORY CAPITAL REQUIREMENTS
WFB is subject to various regulatory capital requirements administered by the FDIC and the Nebraska State
Department of Banking and Finance. Under capital adequacy guidelines and the regulatory framework for prompt
corrective action, WFB must meet specific capital guidelines that involve quantitative measures of WFB’s assets,
liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. WFB’s capital
amounts and classification are also subject to qualitative judgment by the regulators with respect to components,
risk weightings, and other factors.
The quantitative measures established by regulation to ensure capital adequacy require that WFB maintain
minimum amounts and ratios (defined in the regulations) as set forth in the following table. WFB exceeded the
minimum requirements for the well-capitalized category under the regulatory framework for prompt corrective
action for both periods presented.
As of December 31, 2010 and 2009, the most recent notification from the FDIC categorized WFB as well-
capitalized under the regulatory framework for prompt corrective action. To be categorized as well-capitalized
WFB must maintain certain amounts and ratios as set forth in the following table. There are no conditions or events
since that notification that management believes have changed the institution’s category.