Cabela's 2013 Annual Report Download - page 65

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We have a $415 million revolving credit facility that expires on November 2, 2016, and permits the issuance
of letters of credit up to $100 million and swing line loans up to $20 million. This credit facility may be increased
to $500 million subject to certain terms and conditions. Advances under the credit facility will be used for the
Company’s general business purposes, including working capital support.
Our unsecured $415 million revolving credit facility and unsecured senior notes contain certain financial
covenants, including the maintenance of minimum debt coverage, a fixed charge coverage ratio, a leverage ratio,
and a minimum consolidated net worth standard. 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 28, 2013, and December 29, 2012, 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.
Effective August 28, 2013, we entered into an unsecured $20 million Canadian (“CAD”) revolving credit
facility for our operations in Canada. Borrowings are payable on demand with interest payable monthly. The credit
facility permits the issuance of letters of credit up to $10 million CAD in the aggregate, which reduce the overall
credit limit available under the credit facility.
We announced on February 14, 2013, that we intended to repurchase up to 750,000 shares of our outstanding
common stock in open market transactions through February 2014 pursuant to our share repurchase program.
During 2013, we repurchased 181,179 shares of our common stock, which included 163,740 shares purchased for
$10 million, as well as 17,439 shares withheld to offset tax withholding obligations upon the vesting and release
of certain restricted shares. On February 13, 2014, we announced our intent to repurchase up to 650,000 shares
of our common stock in open market transactions through February 2015. This share repurchase program does
not obligate us to repurchase any outstanding shares of our common stock, and the program may be limited or
terminated at any time. There is no guarantee as to the exact number of shares that we will repurchase.
Financial Services Segment – The primary cash requirements of the Financial Services segment relate to
the financing of credit card loans. These cash requirements will increase if our credit card originations increase
or if our cardholders’ balances or spending increase. The Financial Services segment sources operating funds
in the ordinary course of business through various financing activities, which include funding obtained from
securitization transactions, obtaining brokered and non-brokered certificates of deposit, borrowing under its
federal funds purchase agreements, and generating cash from operations. During 2013, the Financial Services
segment issued $395 million in certificates of deposit, early renewed its $300 million variable funding facility
and extended the commitment for an additional two years, and completed term securitizations of $385 million
and $350 million that will mature in February 2023 and August 2018, respectively. We believe that these liquidity
sources are sufficient to fund the Financial Services segment’s foreseeable cash requirements and near-term
growth plans.
WFB is prohibited by regulations from lending money to Cabela’s or other affiliates. WFB is subject to
capital requirements imposed by Nebraska banking law and the Visa U.S.A., Inc. membership rules, and its
ability to pay dividends is also limited by Nebraska and Federal banking law. If there are any disruptions in the
credit markets, the Financial Services segment, like many other financial institutions, may increase its funding
from certificates of deposit which may result in increased competition in the deposits market with fewer funds
available or at unattractive rates. Our ability to issue certificates of deposit is reliant on our current regulatory
capital levels. WFB is classified as a “well-capitalized” bank, the highest category under the regulatory framework
for prompt corrective action. If WFB were to be classified as an “adequately-capitalized” bank, which is the
next level category down from “well-capitalized,” we would be required to obtain a waiver from the FDIC in
order to continue to issue certificates of deposit. We will invest additional capital in the Financial Services
segment, if necessary, in order for WFB to continue to meet the minimum requirements for the “well-capitalized”
classification under the regulatory framework for prompt corrective action. In addition to the non-brokered
certificates of deposit market to fund growth and maturing securitizations, we have access to the brokered
certificates of deposit market through multiple financial institutions for liquidity and funding purposes.