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LETTER TO SHAREHOLDERS | FORM 10-K

Table of contents

  • Page 1
    LETTER TO SHAREHOLDERS | FORM 10 -K

  • Page 2
    ...'s Foremost ® Through our growing Outfitter. number of retail stores ano our well-establisheo oirect business, we offer a wioe ano oistinctive selection of high-quality outooor prooucts at competitive prices while provioing superior customer service. We also issue the Cabela's CLUB® Visa creoit...

  • Page 3
    ... stores opened since 2009 and the 600 basis point improvement in overall Retail segment profitability in the last four years. We also enjoyed improvement in our Cabela's CLUB Visa program. Average active accounts increased 7.5%, and Financial Services revenue as a percentage of average total credit...

  • Page 4
    ...a focus of our Company over the last three years. In 2011, we increased training at the Outfitter level to nearly 500,000 hours or approximately two weeks per Outfitter. Additionally, we began a Manager in Training program for new hires. This program places a general store manager candidate in one...

  • Page 5
    ... Scott Williams as our new Executive Vice President and Chief Marketing and E-Commerce Officer. It has been great to have Pat remain as an advisor, and he has added huge value in his new role. Other changes have occurred in other disciplines of the business to promote high potential candidates and...

  • Page 6
    ... Outfitters in each one of our retail stores, as well as our customer service employees in our call centers. I already discussed our increase in Outfitter training allowing our Outfitters to better understand their job and the technologies of the products we sell so that they can truly...

  • Page 7
    ... measures presented in this Annual Report. Management believes these non-GAAP financial results provide useful supplemental information to investors regarding the underlying business trends and performance of the Company's ongoing operations and are useful for period-over-period comparisons of such...

  • Page 8
    ... FINANCIAL MEASURES Fiscal Year Ended Fiscal Year Ended January 2, 2010 December 27, 2008 GAAP Basis Excluded Non-GAAP GAAP Basis Excluded Non-GAAP as Reported Amounts as Adjusted as Reported Amounts as Adjusted (Dollars in Thousands Except Earnings Per Share) Total revenue (1) Total cost of revenue...

  • Page 9
    ...). Total capital is calculated by adding current maturities of long-term debt, deferred compensation, operating leases capitalized at eight times next year's annual minimum lease payments, and total stockholders' equity to long-term debt (excluding all debt of World's Foremost Bank ("WFB")) and then...

  • Page 10
    This page is intentionally left blank.

  • Page 11
    ... charter) Delaware (State or other jurisdiction of incorporation or organization) One Cabela Drive, Sidney, Nebraska (Address of principal executive offices) 20-0486586 (I.R.S. Employer Identification Number) 69160 (Zip Code) CABELA'S INCORPORATED Registrant's telephone number, including area code...

  • Page 12
    ...changes in the capital and credit markets or the availability of capital and credit; • our ability to successfully execute our multi-channel strategy; • increasing competition in the outdoor sporting goods industry and for credit card products and reward programs; • the cost of our products...

  • Page 13
    ... Supplementary Data Changes in and Disagreements With Accountants on Accounting and Financial Disclosure Controls and Procedures Other Information PART III Directors, Executive Officers and Corporate Governance Executive Compensation Security Ownership of Certain Beneficial Owners and Management and...

  • Page 14
    ... 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 15
    ... We have announced plans to open five next-generation stores in 2012: Wichita, Kansas; Tulalip, Washington; Rogers, Arkansas; Charleston, West Virginia; and Saskatoon, Saskatchewan, Canada; and an Outpost store in Union Gap, Washington, increasing our retail square footage approximately 10%. Looking...

  • Page 16
    ... channels, including retail stores, inbound telemarketing, catalogs, and the Internet. Our customers can apply for the Cabela's CLUB Visa credit card at our retail stores and website through our instant credit process and, if approved, receive reward points available for use on merchandise purchases...

  • Page 17
    ... by each of the five product categories for our Retail and Direct businesses and in total for the last three years. Product Category Hunting Equipment Clothing and Footwear Fishing and Marine Camping Gifts and Furnishings Total 2011 45.7% 23.6 13.9 8.2 8.6 Retail 2010 44.5% 24.0 14.2 8.5 8.8 2009...

  • Page 18
    ...consists of distributing over 130 million catalogs annually in order to attract customers to our Retail and Direct businesses. We have also established our website to market our products to customers and potential customers who shop via the Internet. We use both our catalogs and our website to cross...

  • Page 19
    ...our customer support, product information, and service operations. Distribution and Fulfillment We operate distribution centers located in Sidney, Nebraska; Prairie du Chien, Wisconsin; Wheeling, West Virginia; and Winnipeg, Manitoba. These distribution centers comprise over 3 million square feet of...

  • Page 20
    ... eliminate the exception from the definition of "bank" under the BHCA for credit card banks, such as WFB. However, as directed by the Reform Act, the United States Government Accountability Office released a report on January 20, 2012, that examines the potential implications of eliminating certain...

  • Page 21
    ...information provided to prospective customers, and the timeliness of shipments and refunds. In addition, the FTC has established guidelines for advertising and labeling many of the products we sell. Intellectual Property Cabela's®, Cabela's CLUB®, Cabelas.com®, World's Foremost Outfitter®, World...

  • Page 22
    ...to use our marks in the United States or elsewhere. We have no franchises or other concessions which are material to our operations. Available Information Our website address is www.cabelas.com. We make available on our website our annual reports on Form 10-K, quarterly reports on Form 10-Q, current...

  • Page 23
    ... 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 24
    ... Our Retail, Direct, and Financial Services businesses are dependent upon the integrity, security, and consistent operations of our information technology systems. We rely heavily on our information technology systems to manage and replenish inventory, to take customer orders, to deliver products to...

  • Page 25
    ... of our Direct business. As the number of our retail stores increases, our stores will become more highly concentrated in the geographic regions we serve. As a result, the number of customers and related revenue at individual stores may decline and the average amount of sales per square foot at our...

  • Page 26
    ... customers; • increases in United States Postal Service rates, paper costs, and printing costs resulting in higher catalog production costs and lower profits for our Direct business; • failures to properly design, print, and mail our catalogs in a timely manner; • failures to introduce new...

  • Page 27
    ... securing an alternative source for the terminated vendor's products or services. In addition, if the cost of fuel rises, the cost to deliver merchandise to the customers of our Direct business and from our distribution centers to our retail stores may rise which could have a material adverse impact...

  • Page 28
    ...expansion strategy may be delayed and our revenue growth may suffer. Our 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...

  • Page 29
    ... distribution centers or expand the size of our existing distribution centers to support our growing number of retail stores. If we are unable to find suitable locations for new distribution centers or to timely integrate new or expanded distribution centers into our inventory control process...

  • Page 30
    ... relating to the collecting and sharing of non-public customer information; and • United States customs laws and regulations pertaining to proper item classification, quotas, payment of duties and tariffs, and maintenance of documentation and internal control programs which relate to importing...

  • Page 31
    ... to make payments to us due to 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; 21

  • Page 32
    ... run an increasingly complex and highly-regulated business; and • the credit card industry is highly competitive with increased use of advertising, target marketing, reward programs, and pricing competition in interest rates and cardholder fees as both traditional and new credit card issuers seek...

  • Page 33
    ...cardholders' account balances, and pay interest on the certificates of deposit and borrowings we use to fund those loans. Changes in these two interest rates affect the value of the assets and liabilities of our Financial Services business. If the rate of interest we pay on borrowings increases more...

  • Page 34
    ...At the end of 2011, in addition to our retail stores listed below, we also operated our corporate headquarters, administrative offices, four distribution centers, a merchandise return center, and five customer care centers. The following table provides information regarding the general location, use...

  • Page 35
    ...retail stores used in our Retail segment: Location United States: 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 36
    ... 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 New York Stock Exchange: High First Quarter Second Quarter Third Quarter Fourth Quarter 2011 Low High 2010 Low $ 31.19 28.91 28.70 26.73 $ 21.59...

  • Page 37
    ... activity for each of the three fiscal months in the fiscal quarter ended December 31, 2011: Maximum Number Total Number of of Shares That May Total Shares Purchased Yet be Purchased Number of Average as Part of Publicly Under Publicly Shares Price Paid Announced Plans Announced Plans Purchased...

  • Page 38
    ... Graph The following stock performance graph and table show Cabela's cumulative total shareholder return on a semi-annual basis for the five fiscal years ended December 31, 2011. The graph and table also show the cumulative total returns of the Standard and Poor's ("S&P") 500 Retailing Index and the...

  • Page 39
    ... million at years ended 2011, 2010, 2009, 2008, and 2007, respectively. Our ability to use this cash for non-banking operations, including its use as working capital for our Retail or Direct businesses, or for retail store expansion, is limited by regulatory restrictions. Amounts for 2011 and 2010...

  • Page 40
    ... 32 stores located in the United States and two in Canada with total retail square footage of 4.7 million square feet at the end of 2011. Our Direct business segment is comprised of our highly acclaimed Internet website which is supplemented by our catalog distributions as a selling and marketing...

  • Page 41
    ... use our retail store, Internet, and catalog channels. Our in-store pick-up program allows customers to order products through our catalogs, Internet site, and store kiosks and have them delivered to the retail store of their choice without incurring shipping costs, thereby helping to increase foot...

  • Page 42
    ... the balance that allows us to deliver the best possible selection of products and expected level of customer service in each store while managing labor, advertising, and other store costs. We have improved our retail store merchandising processes, information technology systems, and distribution...

  • Page 43
    ... new cardholders through our Retail and Direct businesses and increase the amount of merchandise or services customers purchase with their CLUB Visa cards while maintaining the profitability of World's Foremost Bank ("WFB") and preserving customer loyalty by creating marketing plans, promoting...

  • Page 44
    ...and delinquency levels to remain below industry standards. Our Financial Services business continues to monitor developments in the securitization and certificates of deposit markets to ensure we have adequate access to liquidity. On November 2, 2011, we entered into a new five-year credit agreement...

  • Page 45
    ... demand, repurchase, and replacement information through the periodic filing of a new form with the SEC. One of these rules, Rule 17g-7 under the Securities Exchange Act of 1934, as amended, requires rating agencies to disclose in any report accompanying a credit rating for an asset-backed security...

  • Page 46
    ... losses, and customer rewards costs from our credit card operations. Other revenue sources include amounts received from our outfitter services, real estate rental income and land sales, fees earned through our travel business, and other complementary business services. 2011 Retail Direct Financial...

  • Page 47
    ... and footwear, fishing and marine, and camping categories. Internet sales increased in 2011 compared to 2010. Visitors to our websites increased 4.5% during 2011 as we continued to focus our efforts on utilizing Direct marketing programs to increase traffic to our website and social media networks...

  • Page 48
    ...million and customer rewards costs of $22 million was due to an increase in credit card purchases. The following table sets forth the components of our Financial Services revenue as a percentage of average credit card loans, including any accrued interest and fees, for the years ended: 2011 Interest...

  • Page 49
    ... and wherever they 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 sold to customers using the Cabela's CLUB Visa credit card approximated 29% for 2011. The dollar amounts related to...

  • Page 50
    ... to our retail stores, Internet website, distribution centers, product procurement, Financial Services business segment, and overhead costs, including: advertising and marketing, catalog costs, employee compensation and benefits, occupancy costs, information systems processing, and depreciation...

  • Page 51
    ... our new and existing retail stores. • An increase of $5 million in advertising and promotional costs relating to new store openings. Direct Business Segment: • An increase of $22 million in marketing fees received from the Financial Services segment. • A decrease of $3 million in employee...

  • Page 52
    ... excludes costs associated with operating expenses of distribution centers, procurement activities, and other corporate overhead costs. 2011 Total operating income Total operating income as a percentage of total revenue Operating income by business segment: Retail Direct Financial Services Operating...

  • Page 53
    ... Direct business segment and higher consolidated operating expenses. Selling, distribution, and administrative expenses increased in 2011 compared to 2010 due to increases in comparable and new store costs and related support areas, pre-opening costs, and costs related to our customer relationship...

  • Page 54
    ... Sales Mix - The following chart sets forth the percentage of revenue contributed by each of the five product categories for our Retail and Direct businesses and in total for the years ended: Retail 2010 2009 Hunting Equipment Clothing and Footwear Fishing and Marine Camping Gifts and Furnishings...

  • Page 55
    ... Direct marketing programs to increase traffic to our website. Visitors to our Internet site increased 5.8% during 2010. Our hunting equipment and clothing and footwear categories were the largest dollar volume contributor to our Direct revenue for 2010. The number of active Direct customers...

  • Page 56
    ...of our credit card portfolio as of the end of 2010 compared to 2009, evidenced by lower delinquencies and delinquency roll-rates comparing the respective periods. Customer rewards costs increased $15 million due to the increase in purchases. Compared to 2009, the number of average active accounts in...

  • Page 57
    ... the performance of our Financial Services business are shown in the following chart for the years ended: 2010 Average balance of managed credit card loans Average number of active credit card accounts Average balance per active credit card account Net charge-offs on managed loans, including accrued...

  • Page 58
    ... million primarily due to the opening of our Grand Junction, Colorado, retail store. Direct Business Segment: • An increase in marketing fees of $17 million received from the Financial Services segment. • A decrease in catalog and Internet related marketing costs of $9 million compared to 2009...

  • Page 59
    ... the number of active credit card accounts and credit card transactions. Corporate Overhead, Distribution Centers, and Other: • An increase of $6 million in employee compensation and benefits. • An increase of $5 million in contract labor due to costs relating to gift instruments sold through...

  • Page 60
    ...was included in selling, distribution, and administrative expenses as an expense for the Financial Services segment and as a credit to expense for the Retail and Direct business segments. The marketing fee paid by the Financial Services segment to these two business segments increased $38 million in...

  • Page 61
    ...to our current year assessment of uncertain tax positions reflected on prior year tax returns. Bank Asset Quality Delinquencies and Non-Accrual We consider the entire balance of an account, including any accrued interest and fees, delinquent if the minimum payment is not received by the payment due...

  • Page 62
    ... off activity for the years ended: 2011 Balance, beginning of year Change in allowance for loan losses upon consolidation of the Trust Provision for loan losses Charge-offs Recoveries Net charge-offs Balance, end of year Net charge-offs on securitized credit card loans Net charge-offs on credit card...

  • Page 63
    ...Account Opened 6 months or less 7 - 12 months 13 - 24 months 25 - 36 months 37 - 48 months 49 - 60 months 61 - 72 months 73 - 84 months More than 84 months Total (Dollars in Thousands) $ $ Liquidity and Capital Resources Overview Our Retail and Direct business segments and our Financial Services...

  • Page 64
    ... 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 65
    ... Services business to lose an important source of capital. The Reform Act, which was signed into law in July 2010, will also affect a number of significant changes relating to assetbacked securities, including additional oversight and regulation of credit rating agencies and additional reporting...

  • Page 66
    .... Inventory decreased $14 million in 2011, to a balance of $495 million, compared to an increase of $69 million in 2010, or to a balance of $509 million. WFB paid cash out on a net basis of $17 million for credit card loans originated at Cabela's through our Retail and Direct businesses. Accounts...

  • Page 67
    ..., for the years ended: 2011 Property and equipment additions Proceeds from retirements and maturities of economic development bonds Number of new retail stores opened during the year Number of retail stores at the end of the year Retail square footage at the end of the year $ (Dollars in Thousands...

  • Page 68
    ... 2011. Inventory increased $69 million in 2010, to a balance of $509 million, compared to a decrease of $78 million in 2009, or to a balance of $440 million. WFB paid cash out on a net basis of $49 million for credit card loans originated at Cabela's through our Retail and Direct businesses. Current...

  • Page 69
    ... period, generally a three-month average, would trigger an early amortization event. Such an event could result in WFB incurring losses related to its retained interests. In addition, if WFB's retained interest in the loans falls below the 5% minimum 20 day average and WFB fails to add new accounts...

  • Page 70
    ... increase our financing costs and potentially limit our ability to grow the business of WFB. Unfavorable conditions in the asset-backed securities markets generally, including the unavailability of commercial bank liquidity support or credit enhancements, could have a similar effect. During 2011...

  • Page 71
    ... obligations associated with retail store locations where we are in the process of certain negotiations. 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 72
    ... to reduce or cancel these available lines of credit at any time. Critical Accounting Policies and Use of Estimates Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America which requires management to make...

  • Page 73
    ..., had management's estimate of net losses over the next 12 months been different by 10% at the end of 2011, WFB's allowance for loan losses and provision for loan losses would have changed by approximately $8 million. Credit card loans that have been modified through a fixed payment plan or placed...

  • Page 74
    ... more transparency of the allowance for loan losses and credit quality of financing receivables. The disclosures relating to information as of the end of a reporting period and to activity occurring during the reporting period are presented in Note 5. Effective April 5, 2011, the FASB issued ASU No...

  • Page 75
    ... mix of our credit card account balances as a percentage of total balances outstanding at the years ended: 2011 Balances carrying an interest rate based upon various interest rate indices Balances carrying an interest rate of 9.99% Balances carrying a promotional interest rate of 0.00% Balances not...

  • Page 76
    ... our Financial Services segment over the next twelve months. Merchandising Business Interest Rate Risk The interest payable on our line of credit is based on variable interest rates and therefore affected by changes in market interest rates. If interest rates on existing variable rate debt increased...

  • Page 77
    ITEM 8. FINANCIAL 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 ...

  • Page 78
    ... and Servicing, which resulted in the consolidation of the Cabela's Master Credit Card Trust and related entities. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company's internal control over financial reporting as...

  • Page 79
    ... OF INCOME (Dollars in Thousands Except Earnings Per Share) 2011 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 80
    ..., net Land held for sale or development Economic development bonds Deferred income taxes Other assets Total assets LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT Accounts payable, including unpresented checks of $19,124 and $27,227 Gift instruments, and credit card and loyalty rewards programs Accrued...

  • Page 81
    ..., net: Accounts receivable Change in credit card loans originated from internal operations, net Inventories Prepaid expenses and other current assets Land held for sale or development Accounts payable and accrued expenses Gift certificates, and credit card and loyalty rewards programs Other long...

  • Page 82
    ... compensation Employee stock purchase plan issuances Exercise of employee stock options Tax benefit on employee stock option exercises BALANCE, end of 2009 Effect of adopting ASC Topics 810 and 860, net of tax Comprehensive income: Net income Unrealized loss on economic development bonds, net of...

  • Page 83
    ... 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's operates 34 retail stores, 32 located in 23 states and two located in Canada. World's Foremost Bank...

  • Page 84
    ... with credit card approvals, are deferred in other current assets and are amortized on a straight-line basis over 12 months. Other account solicitation costs, including printing, list processing costs, telemarketing and postage, are expensed as solicitation occurs. Allowance for Loan Losses - The...

  • Page 85
    ...501, and $1,602 for 2011, 2010, and 2009, respectively. Store Pre-opening Expenses - Non-capital costs associated with the opening of new stores are expensed as incurred. Leases - The Company leases certain retail locations, distribution centers, office space, equipment and land. Assets held under...

  • Page 86
    ... from the sale of land from development activities are recognized in other revenue and the corresponding costs of land sold are recognized in costs of other revenue. Government Economic Assistance - When Cabela's constructs a new retail store or retail development, the Company may receive economic...

  • Page 87
    ... in the fair value of 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...

  • Page 88
    ... FINANCIAL STATEMENTS (Dollars in Thousands Except Share and Per Share Amounts) Fair Value of Financial Instruments - The carrying amount of cash and cash equivalents, accounts receivable, restricted cash, accounts payable, gift certificates (including credit card loyalty rewards programs), accrued...

  • Page 89
    ... at the lower of cost or market. Net unrealized losses, if any, were recognized in income through a valuation allowance. Although WFB continued to service the underlying credit card accounts and maintained the customer relationships, these securitization transactions were treated as sales and the...

  • Page 90
    ...the present value of future expected cash flows using discount rates commensurate with the risks involved. Fair value changes in the interest-only strips and cash reserve accounts were recorded in securitization income included in Financial Services revenue. 4. CABELA'S MASTER CREDIT CARD TRUST WFB...

  • Page 91
    ... period, generally a three-month average, would trigger an early amortization event. Such an event could result in WFB incurring losses related to its retained interests. In addition, if WFB's retained interest in the loans falls below the 5% minimum 20 day average and WFB fails to add new accounts...

  • Page 92
    ...SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in Thousands Except Share and Per Share Amounts) Allowance for Loan Losses: The following table reflects the activity in the allowance for loan losses by segment for the years ended: 2011 Restructured Credit Card Loans $ 38,900 38,900...

  • Page 93
    CABELA'S INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in Thousands Except Share and Per Share Amounts) The table below provides information on non-accrual, past due, and restructured credit card loans by class by using the respective fourth quarter FICO score at...

  • Page 94
    CABELA'S INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in Thousands Except Share and Per Share Amounts) 6. PROPERTY AND EQUIPMENT Property and equipment consisted of the following at the years ended: Depreciable Life in Years Land and improvements Buildings and ...

  • Page 95
    ... other current assets: Deferred catalog costs Interest and notes receivable Financial Services - Visa interchange funding Financial Services - accrued interest and other receivables Other Other assets: Goodwill Intangible assets, net Financial Services - deferred financing and new account costs Long...

  • Page 96
    CABELA'S INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in Thousands Except Share and Per Share Amounts) 10. OTHER LONG-TERM LIABILITIES Other long-term liabilities consisted of the following at the years ended: 2011 Deferred rent expense and tenant allowances ...

  • Page 97
    ... Offered Rate, or commercial paper rate, plus a spread, which ranges from 0.50% to 0.85%. The variable rate notes provide for a fee ranging from 0.25% to 0.40% on the unused portion of the facilities. During the year ended December 31, 2011, and January 1, 2011, the daily average balance outstanding...

  • Page 98
    ... life of approximately five years and a contractual maturity of approximately eight years. These securitization transactions were used to refinance asset-backed notes issued by the Trust that matured in 2011 and to fund growth in restricted credit card loans. WFB has unsecured federal funds purchase...

  • Page 99
    ...inventory held by the Company. Cabela's revolving credit facility limits this security interest to $100,000. The extended payment terms to the vendor do not exceed one year. The outstanding liability, included in accounts payable, was $524 and $537 at the end of 2011 and 2010, respectively. 14. LONG...

  • Page 100
    .... The Company accounted for this lease as a capital lease and recorded the additional leased asset at the present value of the future minimum lease payments using a 5.9% implicit rate. The additional leased asset was recorded at $5,649 and is being amortized on a straight-line basis over 30 years...

  • Page 101
    ... of property (including existing store locations and future retail store sites), equipment, land held for sale, economic development bonds, goodwill, and other intangible assets. In accordance with accounting guidance on asset valuations, the Company recognized impairment losses totaling $11,309...

  • Page 102
    CABELA'S INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in Thousands Except Share and Per Share Amounts) 16. INTEREST (EXPENSE) INCOME, NET Interest expense, net of interest income, consisted of the following for years ended: 2011 Interest expense Capitalized ...

  • Page 103
    ... Deferred revenue Reserve for returns Accrued expenses Gift certificates liability Allowance for loans losses and doubtful accounts Economic development bonds Loyalty rewards programs Other Deferred tax liabilities: Prepaid expenses Property and equipment Inventories Credit card loan fee deferral...

  • Page 104
    ... is a schedule of future minimum rental payments under operating leases at December 31, 2011: For the fiscal years ending: 2012 2013 2014 2015 2016 Thereafter $ 10,746 11,022 9,473 8,841 8,579 121,524 $ 170,185 The Company has lease agreements for certain retail store locations. Certain leases...

  • Page 105
    ... obligations associated with retail store locations where the Company is 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. The Company generally receives grant...

  • Page 106
    ... (Dollars in Thousands Except Share and Per Share Amounts) 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...

  • Page 107
    ... volatility 46% 45 to 46% 45 to 46% Weighted average expected life (in years) 5.0 5.0 5.0 Weighted average grant date fair value of options granted $ 11.30 $ 7.02 $ 7.94 Employee Stock Plans - The Cabela's Incorporated 2004 Stock Plan ("the 2004 Plan") provides for the granting of non-qualified...

  • Page 108
    ... provides information relating to the Company's equity share-based payment awards at December 31, 2011: Weighted Average Exercise Price $ 17.75 6.58 13.92 6.36 Weighted Average Fair Value $ 7.66 13.50 9.82 13.54 Weighted Average Remaining Contractual Life (in Years) 3.68 6.26 4.58 6.25 Number of...

  • Page 109
    ...granted nonqualified stock options and nonvested stock units to Cabela's President and Chief Executive Officer pursuant to an employment inducement award exemption under the New York Stock Exchange. The Company granted 111,720 nonqualified stock options at an exercise price of $8.68 per share. These...

  • Page 110
    ... Company's current or future equity compensation plans. The shares are repurchased from time to time in open market transactions or privately negotiated transactions at the Company's discretion, subject to market conditions, customary blackout periods, and other factors. The share repurchase program...

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    ... stock units, and employee stock purchase plans Common shares - diluted Stock options outstanding and nonvested stock units issued considered anti-dilutive excluded from calculation 23. SUPPLEMENTAL CASH FLOW INFORMATION The following table sets forth non-cash financing and investing activities...

  • Page 112
    ... promotion, marketing fees, third party services for processing credit card transactions, salaries, and other general and administrative costs. Revenues included in Corporate Overhead and Other are primarily made up of amounts received from outfitter services, real estate rental income, land sales...

  • Page 113
    ... $ 291,746 $ 291,746 $ Corporate Overhead and Other $ Fiscal Year 2011 Merchandise sales Non-merchandise revenue: Financial Services Other Total revenue Operating income (loss) As a percentage of revenue Depreciation and amortization Assets Property and equipment additions including accrued amounts...

  • Page 114
    ... Company's merchandise revenue contributed by each of the five product categories for our Retail and Direct businesses and in total for the years presented: Product Category Hunting Equipment Clothing and Footwear Fishing and Marine Camping Gifts and Furnishings Total 25. 2011 Retail 2010 2009 2011...

  • Page 115
    ... and equipment, land held for sale, goodwill and intangibles on an annual basis or more frequently if indicators of impairment exist using significant unobservable inputs. This evaluation included existing store locations and future retail store sites. In 2011, the Company recognized impairment...

  • Page 116
    ...discounted using current market rates offered for similar products for purposes of estimating fair value. The estimated fair value of secured long-term obligations of the Trust and long-term debt is based on future cash flows associated with each type of debt discounted using current borrowing rates...

  • Page 117
    ...'s third and fourth quarters than in the first and second quarters due to holiday buying patterns and hunting and fishing season openings across the United States. The Company's quarterly operating results may fluctuate significantly as a result of these events and a variety of other factors, and...

  • Page 118
    ... for credit card loan losses (1) Year Ended January 2, 2010: Allowance for doubtful accounts Allowance for credit card loan losses (1) Beginning Charged to of Year Costs and Balance Expenses $ 3,416 $ 90,900 1,364 $ 1,374 556 $ 1,507 Charged to Other Accounts Net ChargeOffs End of Year Balance...

  • Page 119
    ... as of the end of the period covered by this report. Based on management's evaluation, our Chief Executive Officer and Chief Financial Officer each concluded that our disclosure controls and procedures were effective as of December 31, 2011. Management's Report on Internal Control Over Financial...

  • Page 120
    ... INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Cabela's Incorporated and Subsidiaries Sidney, Nebraska We have audited the internal control over financial reporting of Cabela's Incorporated and Subsidiaries (the "Company") as of December 31, 2011, based...

  • Page 121
    ... the SEC's requirements for a "code of ethics," and apply to all of our directors, officers, and employees. Our Business Code of Conduct and Ethics is posted on our website at www.cabelas.com. We intend to satisfy the disclosure requirements under Item 5.05 of Form 8-K regarding certain amendments...

  • Page 122
    ...: • Report of Independent Registered Public Accounting Firm • Consolidated Statements of Income - Years ended December 31, 2011, January 1, 2011, and January 2, 2010 • Consolidated Balance Sheets - December 31, 2011, and January 1, 2011 • Consolidated Statements of Cash Flows - Years ended...

  • Page 123
    ... Annual Report on Form 10-K, filed on March 1, 2010, File No. 001-32227)* Form of 1997 Employee Stock Option Agreement (incorporated by reference from Exhibit 10.10 of our Registration Statement on Form S-1, filed on March 23, 2004, Registration No. 333-113835)* Cabela's Incorporated 2004 Stock Plan...

  • Page 124
    ... Ohio County Development Authority and Cabela's Wholesale, Inc. (incorporated by reference from Exhibit 10.29 of our Annual Report on Form 10-K, filed on March 1, 2006, File No. 001-32227) Cabela's Incorporated Performance Bonus Plan (incorporated by reference from Exhibit 10 of our Current Report...

  • Page 125
    ... and Restated Management Change of Control Severance Agreement (World's Foremost Bank) (incorporated by reference from Exhibit 10.3 of our Current Report on Form 8-K, filed on December 17, 2009, File No. 001-32227)* Executive Employment Agreement dated June 9, 2011, between Cabela's Incorporated and...

  • Page 126
    ... Extension Definition Linkbase Document + Indicates management contract or compensatory plan or arrangement required to be filed as exhibits pursuant to Item 15(b) of this report. As provided in Rule 406T of Regulation S-T, these interactive data files are furnished and not filed for purposes of...

  • Page 127
    ... 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. CABELA'S INCORPORATED Dated: February 22, 2012 By: /s/ Thomas L. Millner Thomas L. Millner President and Chief Executive Officer Pursuant to the requirements of the Securities...

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    ... Executive Vice President and Chief Marketing and E-Commerce Officer Corporate Information Corporate Headquarters Cabela's Incorporated One Cabela Drive Sidney, Nebraska 69160 Telephone: (308) 254-5505 Transfer Agent & Registrar Wells Fargo Shareowner Services P.O. Box 64874 St. Paul, Minnesota...

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