Cabela's 2013 Annual Report Download - page 69

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Effective August 28, 2013, we entered into an unsecured $20 million CAD revolving credit facility for our
operations in Canada. This revolving credit facility replaced our $15 million CAD unsecured revolving credit
facility, which was terminated January 31, 2013. 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.
2012 versus 2011
Operating Activities – Cash from operating activities decreased $132 million in 2012 compared to 2011.
Inventories increased $58 million at December 29, 2012, to $553 million, compared to 2011, while inventories
decreased $14 million at December 31, 2011, compared to 2010, a net change of $72 million. The increase in
inventories in 2012 was primarily due to the addition of new retail stores. Comparing the respective periods,
there were increases of $96 million in income taxes and $22 million in net credit card loans originated at Cabela’s
through our Retail and Direct businesses. In 2012, we paid $137 million in income taxes compared to $45 million
in 2011. Offsetting these decreases in cash from operations comparing the respective periods were increases
of $30 million in accounts payable and accrued expenses, $31 million in cash generated from operations, and
$35 million in accounts receivable and prepaid expenses.
Investing Activities – Cash used in investing activities increased $80 million in 2012 compared to 2011.
Cash paid for property and equipment additions totaled $214 million in 2012 compared to $127 million in 2011. At
December 29, 2012, we estimated total capital expenditures for the development, construction, and completion of
retail stores to approximate $202 million through the next 12 months.
Financing Activities – Cash provided by financing activities increased $28 million in 2012 compared to
2011. This net change was primarily due to an increase in net borrowings on secured obligations of the Trust by
the Financial Services segment of $411 million. This increase was primarily offset by a decrease in time deposits,
which the Financial Services segment utilizes to fund its credit card operations, of $66 million in 2012, compared
to $470 million in 2011. At the end of 2012 and 2011, there were no amounts outstanding on our unsecured
revolving credit facilities. During 2012, we repurchased shares of our common stock for $29 million compared to
$20 million in 2011. We expect to repurchase our common stock in the future to offset future equity grants and to
fund any repurchases with cash from operations.
Economic Development Bonds and Grants
In the past, we have negotiated economic development arrangements relating to the construction of a number
of our new retail stores, including free land, monetary grants, and the recapture of incremental sales, property, or
other taxes through economic development bonds, with many local and state governments. Where appropriate, we
intend to continue to utilize economic development arrangements with state and local governments to offset some
of the construction costs and improve the return on investment of our new retail stores.
Economic Development Bonds – Economic development bonds are related to the Company’s government
economic assistance arrangements relating to the construction of new retail stores or retail development. State
or local governments may sell economic development bonds primarily to provide funding for the construction
and equipping of our retail stores. In the past, we have primarily been the sole purchaser of these bonds. While
purchasing these bonds involves an initial cash outlay by us in connection with a new store or property, some or all
of these costs can be recaptured through the repayments of the bonds. The payments of principal and interest on
the bonds are typically tied to sales, property, or lodging taxes generated from the store and, in some cases, from
businesses in the surrounding area, over periods which range between 15 and 30 years. Some of our bonds may be
repurchased for par value by the governmental entity prior to the maturity date of the bonds. The governmental
entity from which we purchase the bonds is not otherwise liable for repayment of principal and interest on the
bonds to the extent that the associated taxes are insufficient to pay the bonds. If sufficient tax revenue is not
generated by the subject properties, we will not receive scheduled payments and will be unable to realize the full
value of the bonds carried on our consolidated balance sheet. At December 28, 2013, and December 29, 2012,
economic development bonds totaled $79 million and $85 million, respectively.