Cabela's 2012 Annual Report Download - page 104

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CABELA’S INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands Except Share and Per Share Amounts)
and standby letters of credit totaling $22,143 and $14,692, respectively, were outstanding at the end of 2012
and 2011. The daily average outstanding amount of total letters of credit during 2012 and 2011 was $15,418 and
$11,578, respectively.
During the term of the facility, the Company is required to pay a quarterly commitment fee, which ranges
from 0.15% to 0.30% of the average daily unused principal balance on the line of credit. Interest on advances
on this credit facility is equal to the alternate base rate, as defined, plus the applicable margin, as defined. The
applicable margin is the percentage rate that is applicable at such time with respect to advances as set forth in the
pricing schedule, a stratified interest rate schedule based on the Company’s leverage ratio, as defined. The alternate
base rate is equal to the highest of:
• the lead lender’s prime rate,
• the sum of the federal funds rate in effect for the day plus one-half of one percent, and
• the Eurocurrency rate, as defined, plus 1.50%.
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 2.00 to 1 as of the last day of any fiscal quarter
for the most recently ended four fiscal quarters (as defined);
• a leverage ratio (as defined) of no more than 3.00 to 1 as of the last day of any fiscal quarter; and
• a minimum consolidated net worth standard (as defined).
In addition, our unsecured senior notes contain various covenants and restrictions that are usual and
customary for transactions of this type. Also, the debt agreements contain cross default provisions to other
outstanding credit facilities. In the event that we failed to comply with these covenants, a default would trigger
and all principal and outstanding interest would immediately be due and payable. At December 29, 2012 and
December 31, 2011, we were in compliance with all financial covenants under our credit agreements and unsecured
notes. We anticipate that we will continue to be in compliance with all financial covenants under our credit
agreements and unsecured notes through at least the next 12 months.
At December 29, 2012, the Company was in compliance with the financial covenant requirements of its
$415,000 credit agreement with a fixed charge coverage ratio of 9.67 to 1, a leverage ratio of 0.92 to 1, and a
consolidated net worth that was $332,843 in excess of the minimum.
The credit agreement includes a dividend provision limiting the amount that Cabela’s could pay to
stockholders, which at December 29, 2012, was not in excess of $180,529. 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 the Company fails 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. The Company was in compliance
with all financial debt covenants at December 29, 2012, and December 31, 2011.
The Company also had a credit agreement for its operations in Canada providing for a $15,000 Canadian
(“CAD”) unsecured revolving credit facility through June 30, 2013. This credit agreement was terminated
January 31, 2013. There were no amounts outstanding at December 29, 2012, or December 31, 2011.
Advances made pursuant to the $415,000 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 prior
to November 2, 2015, pursuant to this agreement are considered long-term in nature.