Cabela's 2013 Annual Report Download - page 102

Download and view the complete annual report

Please find page 102 of the 2013 Cabela's annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 132

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132

92
CABELA’S INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands Except Share and Per Share Amounts)
in 2013 as depreciation expense. Therefore, the adjustment that reduced the deferred grant income of this retail
store property at December 28, 2013, resulted in an increase in depreciation expense of $4,931 in 2013, which was
included in impairment and restructuring charges in the consolidated statements of income. This impairment loss
was recorded to the Retail segment.
In 2013, we also recognized an impairment loss totaling $937 related to the store closure of our former
Winnipeg, Manitoba, Canada, retail site. The impairment loss of $937 included leasehold improvements write-offs
as well as lease cancellation and restoration costs. This impairment loss was recorded to the Retail segment ($820)
and the Corporate Overhead and Other segment ($117).
Local economic trends, government regulations, and other restrictions where we own properties may impact
management projections that could change undiscounted cash flows in future periods which could trigger possible
future write downs.
Other Property:
In 2004, the Company acquired property near Denver, Colorado (“the Colorado Property”) with the intent to
build a Cabela’s retail store at that location. The appraised value of the Colorado Property at that time was based
on the projected cash flows from the Company’s prospective retail store development. In the second quarter ended
June 2011, we made a decision not to locate a retail store on the Colorado Property, nor to further develop the
Colorado Property, but to dispose of it, and instead to build two retail stores in different locations in the greater
Denver area. We publicly announced this decision in July 2011. As a result, we classified the Colorado Property as
other property in the Corporate Overhead and Other segment. Shortly after we publicly announced that we would
not develop a retail store on the Colorado Property, we received a letter of intent from a developer offering to
purchase the property. The letter of intent provided evidence of the fair value of the Colorado Property, which, at
the time, resulted in an impairment loss of $3,348 that was recognized in the third quarter of 2011. The developer’s
purchase offer expired in 2012, and the Company continued to market the property for sale and sought an appraisal.
In January 2013, we received an appraisal report on the Colorado Property. This appraisal report concluded that
the carrying value of the Colorado Property was higher than the estimated fair value, resulting in an additional
impairment loss of $14,946, which was recognized in the fourth quarter of 2012. After the impairment loss was
recognized, the carrying value of the Colorado Property was $5,820 at the end of 2012. The 2013 appraisal was
based on the sales comparison approach to estimate the “as-is” fee simple market value of the subject property
(Level 2 inputs). The appraiser determined that the highest and best use of the Colorado Property was as raw land,
because the demographics, excess retail space, and the economy in the geographic area would no longer support a
value high enough to justify the cost of developing the property.
At December 2013 and 2012, we classified all of our unimproved land not used in our merchandising
business as “other property” and included the carrying value of $15,109 and $23,448 at the end of 2013 and 2012,
respectively, in other assets in the consolidated balance sheet. We intend to sell any of our remaining other property
as soon as any such sale could be economically feasible, and we continue to monitor such property for impairment.
In the fourth quarter of 2012, the Company also recognized an impairment loss on a second property on an
arms-length sales contract of adjoining land anticipated to close in mid-2013 (Level 2 inputs). Subsequently, this
tract of land was sold in December 2013. In 2011, we wrote down the carrying value of certain other properties
based on signed agreements for their sale. We recognized impairment losses totaling $17,694 and $4,617 in 2012
and 2011, respectively. There were no impairment losses related to other property in 2013.
Local economic trends, government regulations, and other restrictions where we own properties may impact
management projections that could change undiscounted cash flows in future periods which could trigger possible
future write downs.