Cabela's 2012 Annual Report Download - page 45

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We will focus on these areas to achieve our new vision:
• Intensify Customer Loyalty. We will deepen our customer relationships, aggressively serve current and
developing market segments, and increase our innovation in Cabela’s products and services.
• Grow Profitably and Sustainably. Through sustaining and adapting our culture, we will continuously
seek ways to improve profitability and increase revenue in all business segments.
• Enhance Technology Capability. We will implement a strategic technology road map, streamline our
systems, and accelerate customer-facing technologies.
• Simplify Our Business. As we focus on our priorities, we will align our goals to foster collaboration
and streamline cross-functional processes.
• Improve Marketing Effectiveness. We will optimize all marketing channels and expand our digital and
e-commerce capabilities while continuing to strengthen the Cabela’s brand.
Current Business Environment
Worldwide Credit Markets and Macroeconomic Environment – We believe that general improvements in
the United States economy helped lead to a lower level of delinquencies and a decrease in charge-offs comparing
2012 to 2011. We expect our charge-off and delinquency levels to remain below industry standards. The Financial
Services segment continues to monitor developments in the securitization and certificates of deposit markets
to ensure adequate access to liquidity. On November 2, 2011, we entered into a new five-year credit agreement
providing for a $415 million revolving credit facility that replaced our $350 million credit facility set to expire
June 30, 2012. Advances under the credit facility will be used for the Company’s general business purposes,
including working capital support.
Developments in Legislation and Regulation – In late 2012 and into 2013, there has been significant
discussion regarding potential gun control legislation, primarily aimed at modern sporting rifles, certain
semiautomatic pistols, and high capacity magazines. For example, in January 2013, the State of New York enacted
legislation that expanded the state’s existing prohibition on the sale of certain firearms and prohibited the sale
of magazines that hold more than seven rounds. In January 2013, legislation was introduced in the United States
Senate that would, if enacted, prohibit the sale of certain modern sporting rifles, certain semiautomatic pistols,
and magazines that hold more than 10 rounds. We do not expect the recently enacted New York legislation to have
a significant impact on our business. Any new federal legislation that prohibits the sale of certain modern sporting
rifles, semiautomatic pistols, or ammunition could negatively impact our hunting equipment sales. Our mix of
modern sporting rifles, semiautomatic pistols, and ammunition, most likely to be impacted by any legislative
changes, is a small percentage of our total hunting equipment sales. We expect demand for firearms, ammunition,
and accessories to remain strong as gun control continues to be a legislative focus.
On June 7, 2012, the FDIC and the other federal banking agencies announced they are seeking comment
on proposed rules that would revise and replace the agencies’ current capital rules. Among other things, the
proposed rules would revise the agencies’ prompt corrective action framework by introducing a common equity
tier 1 capital requirement and a higher minimum tier 1 capital requirement. In addition, the proposed rules include
a supplementary leverage ratio for depository institutions subject to the advanced approaches capital rules. It
is not clear how the final rules will differ from the proposed rules, if at all, or the impact of the final rules on
WFB and its ability to comply with a new common equity tier 1 capital requirement and a higher minimum tier 1
capital requirement.
The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Reform Act”) was signed into law in
July 2010 and has made extensive changes to the laws regulating financial services firms and credit rating agencies
and requires significant rule-making. In addition, the Reform Act along with the Credit Card Accountability
Responsibility and Disclosure Act of 2009 (the “CARD Act”) mandated multiple studies which could result in
additional legislative or regulatory action.