Cabela's 2014 Annual Report Download - page 49

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39
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:
2014 2013
Interest and fee income 10.2% 9.8%
Interest expense (1.6) (1.8)
Provision for loan losses (1.6) (1.2)
Interchange income 9.3 9.8
Other non-interest income 0.1 0.2
Customer rewards costs (5.5) (6.1)
Financial Services revenue 10.9% 10.7%
Our Cabela’s CLUB Visa credit card loyalty program allows customers to earn points whenever and wherever
they use their credit card, and then redeem earned points for products and services at our retail stores or through
our Direct business. The percentage of our merchandise sold to customers using the Cabela’s CLUB Visa credit
card approximated 30% for both 2014 and 2013. The dollar amounts related to points are accrued as earned by the
cardholder and recorded as a reduction in Financial Services revenue. The dollar amount of unredeemed credit card
points and loyalty points was $165 million at the end of 2014 compared to $146 million at the end of 2013.
Key statistics reflecting the performance of Cabela’s CLUB are shown in the following chart for the
years ended:
2014 2013
Increase
(Decrease) % Change
(Dollars in Thousands Except Average Balance per Account)
Average balance of credit card loans (1) $ 3,937,192 $ 3,500,536 $ 436,656 12.5%
Average number of active credit card accounts 1,817,012 1,688,843 128,169 7.6
Average balance per active credit card account (1) $ 2,167 $ 2,073 $ 94 4.5
Net charge-offs on credit card loans (1) $ 66,553 $ 63,152 $ 3,401 5.4
Net charge-offs as a percentage of average
credit card loans (1) 1.69% 1.80% (0.11)%
(1) Includes accrued interest and fees.
The average balance of credit card loans increased to $3.9 billion, or 12.5%, for 2014 compared to 2013 due
to increases in the number of active accounts and the average balance per account. We define an active credit card
account as any account with an outstanding debit or credit balance at the end of any respective month during the
past 12 months. The average number of active accounts increased to 1.8 million, or 7.6%, compared to 2013 due
to our successful marketing efforts in new account acquisitions. Net charge-offs as a percentage of average credit
card loans decreased to 1.69% for 2014, down 11 basis points compared to 2013, due to improvements in the quality
of our credit card portfolio evidenced by continued low delinquencies, an increase in recovery rates, and declining
loan balances in our restructured loan portfolio. See “Asset Quality of Cabela’s CLUB” in this report for additional
information on trends in delinquencies and non-accrual loans and analysis of our allowance for loan losses.
Other Revenue
Other revenue decreased $2 million in 2014 to $15 million compared to 2013 primarily due to a decrease in
real estate sales revenue in 2014 compared to 2013.