Cabela's 2013 Annual Report Download - page 73

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63
(4) Our purchase obligations relate primarily to purchases of inventory, shipping, and other goods and services
in the ordinary course of business under binding purchase orders or contracts. The amount of purchase
obligations shown is based on assumptions regarding the legal enforceability against us of purchase orders or
contracts we had outstanding at the end of 2013. Under different assumptions regarding our rights to cancel
our purchase orders or contracts, or different assumptions regarding the enforceability of the purchase orders
or contracts under applicable laws, the amount of purchase obligations shown in the preceding table would
be less.
(5) Amounts for unrecognized tax benefits are not reflected in years 2014 through 2018 since the ultimate
amount and timing of any future cash settlements cannot be predicted with reasonable certainty.
The following table provides summary information concerning other commercial commitments at
December 28, 2013:
(In Thousands)
Letters of credit (1) $ 12,149
Standby letters of credit (1) 5,229
Revolving line of credit for boat and ATV inventory (2) 1,573
Cabela’s issued letters of credit 48,409
Bank – federal funds (3) -
Secured variable funding obligations of the Trust (4) 50,000
Total $ 117,360
(1) Our credit agreement allows for maximum borrowings of $415 million including lender letters of credit and
standby letters of credit. At December 28, 2013, the total amount of borrowings under this revolving line of
credit was $20 million, which consisted of lender letters of credit and standby letters of credit. Our credit
agreement for operations in Canada is for $20 million CAD, of which all was available for borrowing at
December 28, 2013.
(2) The line of credit for boat and all-terrain vehicles financing is limited by the aforementioned $415 million
revolving line of credit to $100 million of secured collateral.
(3) The maximum amount that can be borrowed on the federal funds agreements is $85 million.
(4) The maximum amount that can be borrowed from third party investors on the variable funding facilities is
$875 million.
Off-Balance Sheet Arrangements
Operating Leases – We lease various items of office equipment and buildings. Rent expense for these
operating leases is recorded in selling, distribution, and administrative expenses in the consolidated statements of
income. Future obligations are shown in the preceding contractual obligations table.
Credit Card Limits – The Financial Services segment bears off-balance sheet risk in the normal course of
its business. One form of this risk is through the Financial Services segment’s commitment to extend credit to
cardholders up to the maximum amount of their credit limits. The aggregate of such potential funding requirements
totaled $25 billion above existing balances at the end of 2013. These funding obligations are not included in our
consolidated balance sheet. While the Financial Services segment has not experienced, and does not anticipate that
it will experience, a significant draw down of unfunded credit lines by its cardholders, such an event would create
a cash need at the Financial Services segment which likely could not be met by our available cash and funding
sources. The Financial Services segment has the right to reduce or cancel these available lines of credit at any time.