Cabela's 2012 Annual Report Download - page 120

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110
CABELA’S INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands Except Share and Per Share Amounts)
The components and amounts of total revenue for the Financial Services segment were as follows for the
years ended:
2012 2011 2010
Interest and fee income $ 301,699 $ 277,242 $ 271,651
Interest expense (54,092) (70,303) (86,494)
Provision for loan losses (42,760) (39,287) (66,814)
Net interest income, net of provision for loan losses 204,847 167,652 118,343
Non-interest income:
Interchange income 292,151 267,106 231,347
Other non-interest income 12,364 13,620 12,247
Total non-interest income 304,515 280,726 243,594
Less: Customer rewards costs (189,963) (156,632) (134,262)
Financial Services revenue $ 319,399 $ 291,746 $ 227,675
The Company’s products are principally marketed to individuals within the United States. Net sales
generated in other geographic markets, primarily Canada, have collectively been less than 3% of consolidated net
merchandise sales in each year. No single customer accounted for 10% or more of consolidated net sales. No single
product or service accounted for a significant percentage of the Company’s consolidated revenue.
The following table sets forth the percentage of our merchandise revenue contributed by major product
categories for our Retail and Direct segments and in total for the last three years.
Retail Direct Total
2012 2011 2010 2012 2011 2010 2012 2011 2010
Product Category:
Hunting Equipment 49.5% 45.7% 44.5% 37.1% 33.4% 33.7% 45.3% 41.1% 40.2%
General Outdoors 28.7 30.7 31.5 32.0 32.7 32.9 29.8 31.5 32.1
Clothing and Footwear 21.8 23.6 24.0 30.9 33.9 33.4 24.9 27.4 27.7
Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
25. FAIR VALUE MEASUREMENTS
Fair value represents the estimated price to sell an asset or transfer a liability in an orderly transaction
between market participants at the measurement date under current market conditions. In determining fair value
of financial instruments, the Company uses various methods, including discounted cash flow projections based
on available market interest rates and data, and management estimates of future cash payments. Judgment is
required in interpreting certain market data to develop the estimates of fair value and, accordingly, any changes in
assumptions or methods may affect the fair value estimates. Financial instrument assets and liabilities measured
and reported at fair value are classified and disclosed in one of the following categories:
• Level 1 – Quoted market prices in active markets for identical assets or liabilities.
• Level 2 – Observable inputs other than quoted market prices.
• Level 3 – Unobservable inputs corroborated by little, if any, market data.
Level 3 is comprised of financial instruments whose fair value is estimated based on internally developed
models or methodologies utilizing significant inputs that are primarily unobservable from objective sources. At
December 29, 2012, the Company’s financial instruments carried on our consolidated balance sheets subject to
fair value measurements consisted of economic development bonds and were classified as Level 3 for valuation
purposes. For 2012, 2011, and 2010, there were no transfers in or out of Levels 1, 2, or 3.