Cabela's 2011 Annual Report Download - page 116

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106
CABELA’S INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands Except Share and Per Share Amounts)
The Company evaluated the recoverability of certain property, equipment, and other assets in 2010 and
recognized write-downs totaling $3,792. The Company also recognized impairment charges totaling $1,834
in 2010, as land held for sale with a total net carrying amount of $9,054 was written down to its fair value of
$7,220. In 2009, property and equipment, land held for sale, goodwill, and other intangibles with a net carrying
amount totaling $136,572 were written down to their fair value of $76,345. These write-downs resulted in a total
impairment charge of $11,309 and $60,227 reflected in earnings in 2011 and 2010, respectively.
The carrying amounts of cash and cash equivalents, accounts receivable, restricted cash, accounts payable,
gift instruments (including credit card and loyalty rewards programs), accrued expenses, and income taxes payable
included in the consolidated balance sheets approximate fair value given the short-term nature of these financial
instruments. The secured variable funding obligations of the Trust, which include variable rates of interest that
adjust daily, can fluctuate daily based on the short-term operational needs of WFB with advances and pay downs
at par value. Therefore, the carrying value of the secured variable funding obligations of the Trust approximates
fair value. Credit card loans are originated with variable rates of interest that adjust with changing market interest
rates. Thus, the carrying value of the credit card loans less the allowance for loan losses approximates fair value.
This valuation does not include the value that relates to estimated cash flows generated from new loans over the
life of the cardholder relationship. Accordingly, the aggregate fair value of the credit card loans does not represent
the underlying value of the established cardholder relationship. The estimated fair value for held to maturity
securities are based on prices obtained from independent brokers which are estimated using pricing models that
incorporate market data. Time deposits are pooled in homogeneous groups, and the future cash flows of those
groups are 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 for similar types of debt of
comparable mat urity.
The following table provides the estimated fair values of financial instruments not carried at fair value at the
years ended:
2011 2010
Carrying
Value
Estimated
Fair Value
Carrying
Value
Estimated
Fair Value
Financial Assets:
Credit card loans, net $ 3,094,163 $ 3,094,163 $ 2,709,312 $ 2,709,312
Financial Liabilities:
Time deposits 982,313 1,023,766 512,751 545,461
Secured long-term obligations of the Trust 1,402,500 1,374,507 1,590,900 1,577,779
Long-term debt 344,922 343,757 345,152 340,939