Cabela's 2004 Annual Report Download - page 76

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decrease of $3.2 million on the pre-tax income of our Financial Services segment, which could have a
material eÅect on our operating results.
Merchandising Interest Rate Risk
Two of our economic development bond agreements are priced at a variable interest rate. One is tied
to the LIBOR rate and one is tied to the prime rate. In 2004, changes in these rates decreased our interest
income by approximately $0.1 million. We do not think these interest rate changes will have a material
impact on our operations.
The interest payable on our line of credit is based on variable interest rates and therefore aÅected by
changes in market interest rates. If interest rates on existing variable rate debt rose 1%, our results from
operations and cash Öows would not be materially aÅected.
Foreign Currency Risk
We purchase a signiÑcant amount of inventory from vendors outside of the U.S. in transactions that
are primarily U.S. dollar transactions. A small percentage of our international purchase transactions are in
currencies other than the U.S. dollar. Any currency risks related to these transactions are immaterial to us.
A decline in the relative value of the U.S. dollar to other foreign currencies could, however, lead to
increased merchandise costs.
64