Cabela's 2010 Annual Report Download - page 111

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101
CABELA’S INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands Except Share and Per Share Amounts)
24. SEGMENT REPORTING
The Company has three reportable segments: Retail, Direct, and Financial Services. The Retail segment sells
products and services through the Company’s retail stores. The Direct segment sells products through e-commerce
websites (Cabelas.com and complementary websites) and direct mail catalogs. The Financial Services segment
issues co-branded credit cards. For the Retail segment, operating costs consist primarily of labor, advertising,
depreciation, and occupancy costs of retail stores. For the Direct segment, operating costs consist primarily of
catalog costs, e-commerce advertising costs, and order processing costs. For the Financial Services segment,
operating costs consist primarily of advertising and promotion, marketing fees, third party services for processing
credit card transactions, salaries, and other general and administrative costs. The expenses incurred by WFB in
connection with the matters cited by the FDIC referred to in Note 18 were reflected in a reduced marketing fee paid
by the Financial Services segment to the Direct and Retail segments pursuant to contractual arrangement.
Revenues included in Corporate Overhead and Other are primarily made up of land sales, amounts received
from outfitter services, real estate rental income, and fees earned through the Company’s travel business and
other complementary business services. Corporate Overhead and Other expenses include unallocated shared-
service costs, operations of various ancillary subsidiaries such as real estate development and travel, and segment
eliminations. Unallocated shared-service costs include receiving, distribution, and storage costs of inventory,
merchandising, and quality assurance costs, as well as corporate headquarters occupancy costs.
Segment assets are those directly used in or clearly allocable to an operating segment’s operations. For the
Retail segment, assets primarily include inventory in the retail stores, land, buildings, fixtures, and leasehold
improvements. For the Direct segment, assets primarily include deferred catalog costs and fixed assets. At the
end of 2010 and 2009, goodwill totaling $3,519 and $3,336, respectively, was included in the assets of the Retail
segment. The change in the carrying value of goodwill from 2009 is due to foreign currency adjustments. For
the Financial Services segment, assets include cash, credit card loans, retained interests, receivables, fixtures,
and other assets. Cash and cash equivalents of WFB were $81,904 and $371,409 at the end of 2010 and 2009,
respectively. Assets for the Corporate Overhead and Other segment include corporate headquarters and facilities,
merchandise distribution inventory, shared technology infrastructure and related information systems, corporate
cash and cash equivalents, economic development bonds, prepaid expenses, deferred income taxes, and other
corporate long-lived assets. Depreciation, amortization, and property and equipment expenditures are recognized
in each respective segment. The accounting policies of the segments, where applicable, are the same as those
described in the summary of significant accounting policies in the Company’s notes to consolidated financial
statements. Intercompany revenue between segments was eliminated in consolidation.