Cabela's 2013 Annual Report Download - page 91

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81
CABELA’S INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands Except Share and Per Share Amounts)
types of debt of comparable maturity. The estimated fair value of long-term debt (level 2) is based on future cash
flows associated with each type of debt discounted using current borrowing rates for similar types of debt of
comparable maturity.
Comprehensive Income – Comprehensive income consists of net income, foreign currency translation
adjustments, cash flow hedges, and unrealized gains and losses on available-for-sale economic development bonds,
net of related income taxes.
Foreign Currency Translation – Assets and liabilities of Cabela’s Canadian operations are translated into
United States dollars at currency exchange rates in effect at the end of a reporting period. Gains and losses from
translation into United States dollars are included in accumulated other comprehensive income (loss) in our
consolidated balance sheets. Revenues and expenses are translated at average monthly currency exchange rates.
Earnings Per Share – Basic earnings per share is computed by dividing net income by the weighted average
number of shares of common stock outstanding during the period. Diluted earnings per share is computed by
dividing net income by the sum of the weighted average number of shares outstanding plus all additional common
shares that would have been outstanding if potentially dilutive common share equivalents had been issued.
2. ACCOUNTING PRONOUNCEMENTS
Effective February 5, 2013, the Financial Accounting Standards Board issued ASU No. 2013-02, Reporting
of Amounts Reclassified Out of Accumulated Other Comprehensive Income, which adds additional disclosure
requirements relating to the reclassification of items out of accumulated other comprehensive income. This ASU
was effective for the first quarter of 2013 for the Company. During 2013, this pronouncement did not have a
material impact on the Company’s condensed consolidated financial statements or disclosures.
On September 13, 2013, the U. S. Treasury and Internal Revenue Service issued final Tangible Property
Regulations (“TPR”) under Internal Revenue Code (“IRC”) Section 162 and IRC Section 263(a). The regulations
are not effective until tax years beginning on or after January 1, 2014; however, certain portions may require a
tax method change on a retroactive basis, thus requiring an IRC Section 481(a) adjustment related to fixed and
real asset deferred taxes. The accounting guidance under Accounting Standards Codification 740 - Income Taxes,
treats the release of these regulations as a change in tax law as of the date of issuance and require the Company
to determine whether there will be an impact on its consolidated financial statements for the fiscal year ended
December 28, 2013. Any such impact of the final tangible property regulations would affect temporary deferred
taxes only and result in a consolidated balance sheet reclassification between current and deferred taxes. We
have analyzed the expected impact of the TPR on the Company as of December 28, 2013, and concluded that the
expected impact is minimal. We will continue to prospectively monitor the impact of any future changes to the
TPR on the Company.
3. CABELA’S MASTER CREDIT CARD TRUST
The Financial Services segment utilizes the Trust for the purpose of routinely securitizing credit card
loans and issuing beneficial interest to investors. The Trust issues variable funding facilities and long-term notes
(collectively referred to herein as “secured obligations of the Trust”), each of which has an undivided interest in the
assets of the Trust. The Financial Services segment must retain a minimum 20 day average of 5% of the loans in
the securitization trust which ranks pari passu with the investors’ interests in the Trust. In addition, the Financial
Services segment owns notes issued by the Trust from some of the securitizations, which in some cases may be
subordinated to other notes issued. The consolidated assets of the Trust are subject to credit, payment, and interest