Cabela's 2013 Annual Report Download - page 48

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38
We continue to focus on smaller, more specialized catalogs, and we have reduced the number of pages
mailed and decreased total circulation, leading to continued reductions in catalog related costs. Mostly offsetting
the reductions in catalog related costs were increases in website and mobile platform related expenses due to our
expanded use of digital marketing channels and enhancements to our website.
2013 2012 Increase
(Decrease) % Change
Percentage increase year over year in our website visitors 25.8% 18.3%
Pages of paper circulation (in millions) 13,165 17,433 (4,268) (24.5)%
Number of separate titles circulated 127 108 19
Financial Services Revenue – The following table sets forth the components of our Financial Services
revenue for the years ended:
2013 2012 Increase
(Decrease) % Change
(Dollars in Thousands)
Interest and fee income $ 343,353 $ 301,699 $ 41,654 13.8%
Interest expense (63,831) (54,092) 9,739 18.0
Provision for loan losses (43,223) (42,760) 463 1.1
Net interest income, net of provision for loan losses 236,299 204,847 31,452 15.4
Non-interest income:
Interchange income 344,979 292,151 52,828 18.1
Other non-interest income 7,530 12,364 (4,834) (39.1)
Total non-interest income 352,509 304,515 47,994 15.8
Less: Customer rewards costs (212,998) (189,963) 23,035 12.1
Financial Services revenue $ 375,810 $ 319,399 $ 56,411 17.7
Financial Services revenue increased $56 million, or 17.7%, in 2013 compared to 2012. The increase in
interest and fee income of $42 million was due to an increase in credit card loans. The increase in interest expense
of $10 million was due to the issuances of securitization and certificates of deposit in 2013, which were used to
fund growth. The increases in interchange income of $53 million and customer rewards costs of $23 million were
primarily due to an increase in credit card purchases. Also impacting interchange income was a $12.5 million
accrual in 2012 for the estimated liability for the Visa settlement compared to a $3.2 million reduction of the
estimated liability in 2013. The decrease in other non-interest income was a result of the discontinuance of our
payment assurance program in the third quarter of 2012, partially offset by approximately $3 million of identity
theft program income recognized in 2013.
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:
2013 2012
Interest and fee income 9.8% 9.7%
Interest expense (1.8) (1.7)
Provision for loan losses (1.2) (1.4)
Interchange income 9.8 9.4
Other non-interest income 0.2 0.4
Customer rewards costs (6.1) (6.1)
Financial Services revenue 10.7% 10.3%