Cabela's annual report by Mikael McKay Thompson

ITS IN YOUR

NATURE Cabela’s 2014 Annual Report

Content

Cabela’s 2014 Annual Report

To Our Shareholders

Financial Highlights

Our History

Our Brands

Our Team

The Environment

Financial Information

28 Cabela’s 2014 Annual Report

III

To Our Shareholders 2

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COMMUTE TO WORK Cabela’s 2014 Annual Report

Dear Cabela’s Shareholders:

The year 2014 can most fittingly be characterized as a period of correction and recovery, following two years of extreme volatility. Not only did we weather the storm, but we exited 2014 strongly positioned to accelerate profitable growth. While we lost our dear friend and co-founder, Dick Cabela, on Feb. 17, 2014, it is evident the culture and core values he helped establish so many years ago are alive and well within each and every Outfitter. As we faced the most difficult comparisons in the history of our Company, we made significant progress in strengthening our position as the World’s Foremost Outfitter®. We successfully opened 14 new retail locations; our commitment to innovation continued as we launched three great new brands and a host of products unique to the outdoor industry; we continued development of our omni-channel model, introducing many new and exciting ways to communicate with our cherished customers; our distribution operations did a phenomenal job keeping pace

Cabela’s 2014 Annual Report

with our growth; and our Cabela’s CLUB® program continued strong growth in accounts and receivables while chargeoffs remained at record low levels. As we leave 2014, we are focused on many objectives to continue growing our Company. Our new stores continue to perform at high levels, which provides for excitement in the 13 new stores planned for 2015 and the many new locations we have identified for the years ahead. We will continue the expansion and improvement of our omni-channel model to further enhance our customers’ experiences. Our focus on improvement has been unwavering and includes continued growth of our outstanding loyalty program at Cabela’s CLUB; the initial implementation phase for our new price-optimization tool; utilization of our newly implemented net-SKU profitability tool; continued Outfitter development; and the opening of our new distribution center in Tooele, Utah.

Retail Expansion Update

Our new retail stores continued their strong performance in 2014 with our 18

next-generation stores open for the full year outperforming our 28 legacy stores by 43% on a sales-per-square-foot basis and by 59% on a profit-per-squarefoot basis. In 2014, we opened 14 new stores to thousands of customers waiting in line at each one. These new stores represented roughly one million square feet of retail growth for the year. Our new locations included Augusta, Georgia; Greenville, South Carolina; Anchorage, Alaska; Christiana, Delaware; Woodbury, Minnesota; Edmonton, Alberta, Canada; Missoula, Montana; Lubbock, Texas; Barrie, Ontario, Canada; Cheektowaga, New York; Acworth, Georgia; Nanaimo, British Columbia, Canada; Tualatin, Oregon; and Bowling Green, Kentucky. We have been hugely successful in our ability to export, nurture and constantly reinforce our great culture to thousands of Outfitters at our retail locations across the United States and Canada, and we could not be more excited for the opportunity to share our culture with the 13 new markets we will open in during 2015. These new locations include Fort Mill, South Carolina; Berlin,

Massachusetts; Garner, North Carolina; Sun Prairie, Wisconsin; Fort Oglethorpe, Georgia; Ammon, Idaho; Moncton, New Brunswick, Canada; Noblesville, Indiana; West Chester, Ohio; Oklahoma City, Oklahoma; Huntsville, Alabama; Bristol, Virginia; and Calgary, Alberta, Canada. Additionally, we have identified 11 new locations for 2016 and six new locations for 2017, with plans to open 12 to 14 new stores or approximately 900 thousand to onemillion square feet annually in each of the coming years.

create meaningful market awareness. This led us to the conclusion that we could compete with premium brands in the marketplace. In 2014, we took the opportunity to elevate three of our brands to be best-in-class premium brands with a focus on a sub-brand strategy in our Instinct™, Guidewear® and XPG® brands. While the premiumlevel brands we offer account for roughly 10% of our overall assortment, we felt compelled to offer customers premium products under the Cabela’s brand of which they have grown so fond.

The performance of these new stores and the response we have drawn from customers in each new market is a testament to the strength and quality of our brand, and we could not be more excited about the future growth opportunities for our business.

Our Instinct brand provides a premium assortment for the accomplished hunter who hungers for the next great hunt, always preparing his mind, body, soul and gear for each and every opportunity in the field. Our deep heritage in the hunting sports has provided us with the expert knowledge and experience required to develop this highly technical line of products.

Product Innovation

During the first 50 years of our existence, we built a variety of brands at Cabela’s®. In fact, as of several years ago, we had more than 200 brands trademarked. Many of these brands resonate deeply with our customers and

The XPG (Extreme Performance Gear) brand was designed for the ambitious adventurer who is determined to conquer the next

challenge and encourages others to face their challenges. Our XPG line offers premium products to outdoor enthusiasts who spend their time in the backcountry and have a need for fast, light and durable equipment to help them complete their outdoor quests. While our Guidewear brand has been part of our assortment for some time, we have elevated the quality, technical features and durability of this assortment. Our Guidewear products fulfill our customers’ needs for performance gear in extreme weather conditions, whether it be an ice-fishing adventure or enduring a rainstorm during a bass-fishing tournament. We believe our ability to offer these premium brands under the Cabela’s name has allowed us to provide our customers with the ultimate in outdoor gear no matter their objective. Omni-Channel Enhancements Throughout 2014, we continued to enhance our omnichannel model, providing our customers with the worldclass experience they expect, no matter how they prefer to interact

Cabela’s 2014 Annual Report

with us. We continued to make meaningful emotional connections with customers with our It’s In Your Nature® campaign through many media sources, including many of our new social media capabilities. Our DCEM (Digital Customer Experience and Marketing) program continues to grow after being implemented in 2013. We have grown operations in our Rocky Mountain foothills office to more than 70 Outfitters who focus on enhancing customer relationships through social media, digital marketing, mobile devices and email campaigns. The integration of our omni-channel fulfillment capabilities in 2013 continues to satisfy our customers’ needs at a world-class level and has been expanded to the majority of our retail locations. With the ability to fulfill direct-channel orders from our retail stores, we can give our customers access to our inventory assortment across the Company, rather than generating a negative online experience when we do not have a specific product in our distribution centers. In keeping pace with the evolution of technology, during

Cabela’s 2014 Annual Report

2014, we introduced several improvements to our cabelas. com website as well as to our cabelas.com mobile platform.

Distribution

In 2014, our distribution operations continued to perform at a worldclass level and were able to keep up with the expansion of more than one million retail square feet. This was all done while improving transportation costs as a percent of total merchandise sales by 50 basis points. In 2015, our new distribution center in Tooele, Utah, will provide capabilities to serve our customers’ needs at a level we have never before experienced. Through the development of this new facility, we have incorporated features that foster continuous improvement in our distribution capabilities by enhancing efficiency, integration of best-in-class processes, utilization of automation and capabilities that will allow vendors to more effectively work with our distribution network. We have grown operations in our Rocky Mountain foothills office to more than

70 Outfitters who focus on enhancing customer relationships.

Cabela’s CLUB

Throughout 2014, our Cabela’s CLUB Visa program continued to generate outstanding growth. Average active credit card accounts grew by 7.6% to 1.8 million accounts. Average balance per active credit card account grew 4.5%, and net charge-offs reached historically low levels, finishing the year at 1.69%. In 2014, our customers earned roughly $214 million in free merchandise through our CLUB rewards program. Our CLUB members are our very best customers. They shop with us more frequently and have a higher average spend, and we are extremely pleased with their willingness to place our card at the top of their wallet. The CLUB program growth continues to benefit from retail square footage expansion, and we could not be more excited about future growth opportunities.

but to thrive through the correction and strengthen the position of our Company to a higher level than we have ever been before. I have no doubt the accomplishments we have achieved over the past year and the groundwork we have laid for our future represent the beliefs and values Dick, Mary and Jim established so many years ago. We gained meaningful experience from the challenges we faced in 2014, and we are extremely excited for the opportunities ahead. All my best, Tommy Millner,

President and Chief Executive Officer

I am extremely proud of each and every Outfitter and their ability not only to endure this period of recovery

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Cabela’s 2014 Annual Report

FIVE STAR HOTEL

Financial Highlights Cabela’s 2014 Annual Report

$3,647,650

Gross Profit

$1,355,384

$1,565,581

$1,587,361

Operating Income Margin Net Income

$308,523 9.9%

43.5% $364,797 10.1%

43.5%

9.3%

$238,257

$207,059

$2.72

$3.32

$2.88

Diluted Weighted Average Shares Outstanding 7 1,709,873

71,778,543

71,877,856

Cash and Cash Equivalents

$288,750

$199,072

$142,758

Inventories

$552,575

$644,883

$760,293

Total Debt

$336,535

$331,065

$499,715

$1,375,979

$1,606,334

$1,817,510

Total Stockholders Equity Lease Adjusted Debt-To-Capitalization Ratio

23.9%

22.2%

27.3%

Return on Invested Capital

15.9%

16.1%

12.4%

GENERAL OUTDOORS 30% (1)

Operating Income

$3,596 $3,648 $2,811 $3,125

2013

(1)

Net Income

($ millions)

2012

EBITDA for 2001-2011 ($ in millions )

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Total Revenue

2011

($ in millions )

HUNTING EQUIPMENT 44%

$337,878

$195,275

Earnings per Diluted Share

CLOTHING AND FOOTWEAR 26%

Revenue for 2001-2011

$39 4 $462 $456

$3,596,410

43.4%

2011 Merchandising Mix

2014

$3,125,182

Operating Income

Cabela’s 2014 Annual Report

2013

Total Revenue

Gross Profit Margin

2012

$117 $138 $161 $199 $218 $223 $235 $278 $32 2

(Dollars in thousands, except per share data)

$3,648

Fiscal Year

$1,392 $1,556 $1,800 $2,064 $2,350 $2,557 $2,630 $2,663 $2,811 $3,12 5 $3,59 6

Financial Highlights

2014

(1)

ROIC

($ millions)

$244

$309

$365

$338

2011

2012

2013

2014

$151

$195

$238

$207

2011

2012

2013

2014

(4)

14.3% 15.9% 16.1% 12.4%

2011

2012

2013

Cabela’s 2014 Annual Report

2014 11

Our History 12

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UNSPOKEN FRIENDSHIP Cabela’s 2014 Annual Report

Few, if any, businesses today survive the kitchen-table dreams of their founders, especially in the outdoor industry where businesses come and go with the changing seasons. Yet, the leader in the outdoor equipment business has done just that - survived, grown and prospered from simple beginnings to become the largest mail-order, retail and Internet outdoor outfitter in the world. Cabela’s, the World’s Foremost Outfitter of hunting, fishing and outdoor gear, was born somewhat inadvertently in 1961 when Dick Cabela came up with a plan to sell fishing flies he purchased while at a furniture show in Chicago. Upon returning home to Chappell, Nebraska, Dick ran a classified ad in the Casper, Wyoming, newspaper reading: “12 hand-tied flies for $1.” It generated one response. In typical direct-mail style, each order was mailed out with a mimeographed catalog of outdoor items Dick and his wife, Mary, added to their product line. In the beginning, Dick and Mary ran the business from the kitchen table of their home in Chappell.

Cabela’s 2014 Annual Report

Jim and Dick CabelaBy 1964, continued success and growth demanded a bigger and better location. The operation was moved from their kitchen table to the basement of Dick and Jim’s father’s furniture store and then on to various buildings in Chappell. In 1969, Cabela’s was operating in a 50,000 square-foot vacant John Deere building in neighboring downtown Sidney, Nebraska. Initially, Dick and Mary were able to handle the growing business with the help of temporary typists hired for mail, label and catalog preparation. However, by the fall of 1962, they realized the demands of their new venture needed full-time attention. Dick urged his younger brother Jim to join the new company, which he did in 1963. Neither Dick, Mary nor Jim took any salary from the company in those early years. Instead, they invested in more mailings, new equipment and bigger facilities. Today, Cabela’s main world headquarters building along Interstate 80 in Sidney encompasses more than 250,000 square feet. The

foundation of the company is its world-famous catalog business. The company produces nearly 100 different catalogs per year, including specialty books focusing on such outdoor pursuits as archery, fly-fishing and boating, as well as massive Spring and Fall Master catalogs. Internationally known as a source of affordable, high-quality outdoor equipment, Cabela’s catalogs are shipped to all 50 states and 125 countries. With its Internet department growing by leaps and bounds, Cabela’s has seen tremendous online growth. Besides the thriving e-commerce side of www. cabelas.com, which went live in 1998, the web site features a continuously updated content site, community pages, company information and much more. Cabela’s retail division operates overwhelmingly popular stores throughout the U.S. As much wildlife museums and education centers as retail stores, Cabela’s showrooms provide a truly unique shopping experience. True destination stores, Cabela’s showrooms offer outdoor enthusiasts

and their family an educational and entertaining shopping experience. To provide support for their co-branded credit card, which was started in 1995, Cabela’s chartered the World’s Foremost Bank, N.A., in 2001. The bank provides customer service, risk management and payment processing exclusively for Cabela’s Visa cardholders. The Cabela’s Visa card allows consumers to earn points back from all their purchases, which they can apply toward their next purchase at Cabela’s. Cabela’s Outfitter Journal magazine, and award-winning television shows further enhance the company’s brand image and provide the public with entertaining and educational ways to experience what Cabela’s is about. These media outlets provide sportsmen and women the opportunity to learn what the outdoors has to offer through top-quality production and informative features from the nation’s most knowledgeable outdoor journalists and personalities. Yet another chapter in the company’s history began June 25, 2004, when

Cabela’s (CAB) made its debut on the New York Stock Exchange. Investors eager to acquire a piece of the World’s Legendary Outfitters® drove the stock’s value up 40% in the opening minutes of trading, making it one of the most successful Wall Street debuts in recent memory. Cabela’s success hasn’t gone unrecognized, as evidenced by the number of commendations and awards bestowed upon the company in recent years. In 2001, the Cabela’s Catalog was ranked as the fifth most popular catalog, behind such direct-mail giants as J.C. Penney and Sears, in a Consumer Shopping Survey administered by Catalog Age magazine. Other awards include: ShotBusiness magazine’s Retailer of the Year; Sporting Goods Business magazine Specialty Retailer of the Year; BizRate.com Circle of Excellence Award for outstanding web site performance over the holiday season.

Classics magazine’s prestigious Awards of Excellence. Dick, Mary and Jim Cabela are members of the Sporting Goods Industry Hall of Fame, and Dick Cabela is a member of the Direct Marketing Association Hall of Fame. Over the years Cabela’s has received numerous recognitions for its work with conservation organizations. In addition, Cabela’s employees were instrumental in naming the company one of the Top 100 Companies to Work For in Fortune magazine’s January 2000 issue. Despite the accolades and growth, Cabela’s continues to embrace the original philosophy that the customer is No. 1 - a philosophy instilled by company founders Jim and Dick Cabela. This dedication to the customer is just one of many reasons Cabela’s is what the family always knew it could be - a dream come true.

In 2006 Cabela’s web site was ranked No. 1 in the outdoor retailer industry and the company was named Company of the Year in Sporting

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PARALLEL PARKING

Cabela’s 2014 Annual Report

Our Brands Cabela’s 2014 Annual Report

Cabela’s is excited to have established brand partnerships with outstanding businesses and organizations that reflect our values, goals and way of life. Together we continue to provide exciting new products and programs that benefit our customers and members.

Ranger

the Official Boat of Cabela’s, is the nation’s largest manufacturer of premium fiberglass fishing boats. Ranger Boats continues its philosophy of “building legends, one at a time”. Click this link for a complete selection of Ranger Boats available at select Cabela’s Retail Stores.

Cabela’s 2014 Annual Report

Pepsi

N.Y.-based Pepsi-Cola North America (www.pepsi.com) is the refreshment beverage unit of PepsiCo Inc. in the United States and Canada. Its U.S. brands include Pepsi, Diet Pepsi, Pepsi ONE, Pepsi Twist, Diet Pepsi Twist, Pepsi Vanilla, Diet Pepsi Vanilla, Wild Cherry Pepsi, Mountain Dew, Diet Mountain Dew, Mountain Dew Code Red, Mountain Dew LiveWire, Sierra Mist, Sierra Mist Free, Mug, Tropicana Twister Soda, Aquafina, Aquafina FlavorSplash, Aquafina Sparkling, Quaker Milk Chillers, Dole single-serve juices, Tropicana Juice Drinks and SoBe. The company also makes and markets North America’s best-selling ready-to-drink iced teas and coffees, respectively, via joint ventures with Lipton and Starbucks.

The Hunting Retriever Club’s

primary purpose is for...the betterment of Hunting Retrievers as a whole and to influence the breeding and training of a better and finer Hunting Retriever; to provide hunters and Hunting Retrievers a series of actual Hunting tests in a controlled system and furnish an ongoing educational program for the Hunters, for their training, experience, and sporting competition. Further, it is the purpose of this Association to support and protect the inherent rights of its members to own, hunt, bear arms, to promote the breed and type of dog of their choice and promote complimentary conservation and management of game birds and wildlife species commonly pursued by the members of the Hunting Retriever Club, Inc.

GEICO

When you insure with GEICO, you have the financial strength of an A++ rated company behind you. Whether you need insurance for your ATV, RV, motorcycle, boat or auto, give GEICO a call 24/7, visitgeico.com or visit a local GEICO agent to see how much you can save. GEICO - Saving people money on more than just car insurance.

Cenex®

is the largest member-owned petroleum brand in North America, meeting the energy needs of homeowners, businesses and communities through Cenex branded convenience stores. When you’re on the road, there’s nothing like a friendly Cenex store to transform a long drive into an adventure. With over 1,400 locations in the U.S., it’s nice to know that your favorite snacks, quality fuel and welcome smiles are just around the corner. Earn 2% in Cabela’s CLUB points on every Cenex purchase - including fuels, snacks, beverages and anything else at Cenex retail locations! Cenex is a brand of CHS, a diversified global energy, grains and foods business and a Fortune 100 company.

Kampgrounds of America

is North America’s premiere system of family friendly campgrounds. Founded in Billings, Montana in 1962, KOA has grown to include 486 locations in the U.S. and Canada. KOA offers families a quality camping experience, whether that includes a quiet weekend with family and friends, or a stay jam-packed with fun activities for the entire family. Millions of camping families trust their vacations to the great people in the bright yellow KOA shirts each year. Come find out why.

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Our Team 20

Cabela’s 2014 Annual Report

MORNING VIEW Cabela’s 2014 Annual Report

DIVERSITY STATEMENT At Cabela’s, diversity is all of the aspects that combine to make an individual who they are. These include both the seen traits (such as race, gender, etc.) and the unseen traits (such as religion, etc.) that make each individual different from the next. Inclusion involves recognizing and appreciating these individual differences, embracing them and supporting the ability each has to make significant contributions to the greater good of the Cabela’s team. Cabela’s is committed to building a diverse and inclusive workplace with Outfitters of different backgrounds, perspectives, experiences and cultures.

Is it in Your Nature? •Our Outfitters are proud of where they work, and they’re proud to share it with others •Our customers, Outfitters, shareholders and the communities we serve recognize that an outstanding future lies ahead for our company •We value open, honest two-way communication At Cabela’s we value diverse experiences and the entrepreneurial spirit that has made Cabela’s the World’s Foremost Outfitter. We seek to create an inclusive workplace that embraces diverse backgrounds, life experiences and perspectives. Our mission to

passionately serve our customers unites us and inspires pride and ownership in everything we do. Working together we will realize our greatest potential as a company creating opportunity for our employees, delighting our customers and bringing value to our shareholders. “The biggest dream I have is a dream of diversity. It’s getting 15,000 people, and soon to be more, to understand that from difference — religious difference, racial difference, gender difference, every difference we can have — from difference comes strength, not weakness.”

Core Values Superior Customer Service

Our customers are our reason for being – the center of everything we do. We listen to our customers to provide personalized service that is focused on their needs. We consistently provide our customers with quality, innovation, and value in our products and services when, where, and how they want them.

Quality Products and Services

Cabela’s is committed to providing high-quality products and services at an exceptional value. Our focus on high quality guides us in all decisions we make. We build strong relationships with suppliers to

guarantee our customers receive the quality they deserve and expect.

Integrity and Honesty

Integrity and honesty are the soundness of our moral character. We believe in doing what is right even when no one is watching. Integrity and honesty are fundamental in how we deal with others and operate our business. Cabela’s insists on uncompromised integrity and honesty from everyone in all their duties.

Respect for Individuals

Cabela’s most valuable asset is its employees – all of whom make important contributions to our

Company. Cabela’s respects the uniqueness of every individual by honoring differences and placing value on diversity, all while maintaining a spirit of teamwork.

Excellence in Performance

Cabela’s strives for efficiency and excellence in performance in every aspect of our business. We provide a creative atmosphere in which employees are encouraged to be innovative and far thinking, while providing the expertise to meet the needs of our customers.

Tommy Millner, Chief Outfitter 2012 Annual Shareholder’s Meeting

Its in Our Nature! 22

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FAMILY TIME

Cabela’s 2014 Annual Report

The Environment Cabela’s 2014 Annual Report

Cabela’s is dedicated to preserving your way of life not because it is our business, but it is our way of life as well. Like Cabela’s, these organizations are dedicated to conserving the fish, game and wild places that are our heritage. From the bugle of a Rocky Mountain elk to a splashing trout, Cabela’s is proud to be associated with these fine conservation organizations.

Union veterans Col. William C. Church and Gen.

George Wingate formed the National Rifle Association in 1871. The primary goal of the association was to “promote and encourage rifle shooting on a scientific basis.” While widely recognized today as a major political force and as America’s foremost defender of Second Amendment rights, the NRA has, since its inception, been America’s premier firearms education organization.

NRA

is also the largest pro-hunting organization in the world. Through direct lobbying, hunter recruitment programs and grant funding for conservation projects, there is no single group doing more to defend our freedom to hunt than NRA. Committed to teaching young people the safe, responsible use of firearms since its beginning, NRA continues to expand that training through the Youth Hunter

Cabela’s 2014 Annual Report

Education Challenge (YHEC). YHEC is an advanced hunter education program that allows youngsters to build on the skills they learned in state- or provinciallevel hunter safety courses. YHEC now trains more than 50,000 young hunters every year--and NRA deeply appreciates the foresight of Cabela’s to include YHEC in the Add a Buck Program. By adding just one dollar, or multiples of whole dollars, to your Cabela’s checkout total, you can help NRA continue to develop competent, ethical hunters and maintain America’s passion for hunting.

Direct-Connect to Congress

The Congressional Sportsmen’s Foundation was created to provide advice, support and information to the Congressional Sportsmen’s Caucus. This gives CSF a unique niche in the U.S. Congress that is unparalleled by any other sportsmen’s organization, allowing us to serve as the sportsmen’s link to Congress. Formed to protect the interests of sportsmen, the

Congressional Sportsmen’s Caucus stands strong in support of hunting, fishing and conservation. More than half of the members of the United States Congress, representing nearly every state, are affiliated with the Caucus, providing an identified group of allies that can quickly be called into action.

The USA Shooting

a 501c3 non-profit corporation, was chartered by the United States Olympic Committee as the National Governing Body for the sport of shooting in April 1995. The organization implements and manages development programs and sanctions events at the local, state, regional, and national levels. Headquartered in Colorado Springs, Colorado, at the U.S. Olympic Training Center, USA Shooting has a fulltime staff dedicated to furthering the sport and supporting athletes and members of the organization. Partially funded by the U.S. Olympic

Committee, USA Shooting relies on donations from supporters of the Olympic Movement, membership dues, event fees and the corporate partners who take a strong interest in the development of the U.S. Shooting Team.

The American Sportfishing Association

is the sportfishing industry’s trade association, committed to looking out for the interests of the entire sportfishing community. We give the industry a unified voice speaking out when emerging laws and policies could significantly affect sportfishing business or sportfishing itself. We invest in longterm ventures to ensure the industry will remain strong and prosperous as well as safeguard and promote the economic and conservation values of sportfishing in America. ASA also represents the interests of America’s 60 million anglers who generate over $46 billion in retail sales with a $114 billion impact on the nation’s economy creating employment for over one million people. ASA fosters strong relationships with Members of Congress, conservation and recreation partners

and state and federal government leaders to ensure that sportfishing interests are well represented when policy decisions are made.

Quail Forever

is dedicated to the protection and enhancement of quail, pheasant and other upland wildlife through habitat improvement, public awareness, education and advocacy for sound land management policy.

Sportsmen for Fish & Wildlife

is a non-profit wildlife conservation organization of sportsmen that works with elected officials at all levels?from the community courthouse to the Whitehouse?to improve and protect quality hunting and fishing on our great public lands and waters. SFW members are active participants in wildlife conservation having successfully raised tens of millions of dollars for wildlife that now benefits multiple game species. Focusing on habitat protection, enhancement and acquisition, predator control, and reasonable management of hunters, SFW empowers local chapter members with the financial capability

to create change through partnerships and influence as they work with game and fish departments, Forest Service and BLM managers, and private landowners for the benefit of wildlife and sportsmen.

The Bass Federation

Mission: “Owned by those we serve, dedicated to the sport of fishing.” Since 1968, the independent state bass Federations have worked together to support the grassroots growth of fishing and the growth of the entire sport fishing/outdoors industry in their states. Simply put, The Bass Federation, Inc. (TBF) and our affiliated state Federation’s do not work for any one organization in particular, although we do have several longterm relationships and partnerships in the industry. other avenues to assist with conservation projects.

Cabela’s 2014 Annual Report

Financial Information 28

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DAILY ENTERTAINMENT Cabela’s 2014 Annual Report

Operat ions Data: Revenue: Merchandise sales Financial Services revenue Other revenue Total revenue Total cost of revenue Selling, distribution, and administrative expenses Impairment and restructuring charges Operating income I nterest expense, net Other non-operating income, net Income before provision for income taxes Provision for income taxes Net income Earnings per basic share Earnings per diluted share

Cabelaâ&#x20AC;&#x2122;s 2014 Annual Report

Fiscal Year (1) 2014 2013 2012 2011 2010 ( In Thousands Except Earnings per Share and Number of Stores) $

3,200,219 430,385 17,046 3,647,650 2,060,289

3,205,632 375,810 18,135 3,599,577 2,030,829

2,778,903 319,399 14,380 3,112,682 1,769,798

2,505,733 291,746 13,687 2,811,166 1,613,249

1,251,325 641 335,395 (21,842) 4,924 318,477 116,762 201,715 $

1,201,519 5,868 361,361 (21,854) 4,021 343,528 119,138 224,390 $

1,046,861 20,324 275,699 (20,123) 6,138 261,714 88,201 173,513 $

954,125 12,244 231,548 (24,427) 7,346 214,467 71,847 142,620 $

$ $

2.84 2.81

3.18 3.13

2.48 2.42

2.06 2.00

$ $

2,412,486 227,675 23,081 2,663,242 1,575,449 895,405 5,626 186,762 (27,442) 7,360 166,680 54,521 112,159

2014 Revenue: Retail D i re ct Total Financial Ser vices Other revenue Total revenue

Increase (Decrease)

2013

% Change

(Dollars in Thousands Except Earnings Per Diluted Share)

2,350,685 851,738 3,202,423 430,385 14,842 3,647,650

2,233,322 973,614 3,206,936 375,810 16,831 3,599,577

117,363 (121,876) (4,513) 54,575 (1,989) 48,073

5.3% (12.5) (0.1) 14.5 (11.8) 1.3

Operating income

335,395

361,361

(25,966)

(7.2)

Net income

201,715

224,390

(22,675)

(10.1)

Ear nings per diluted share

2.81

3.13

(0.32)

(10.2)

1.65 1.62

Cabelaâ&#x20AC;&#x2122;s 2014 Annual Report

Operations Review

Revenues

Our operating results expressed as a percentage of revenue were as follows for the years ended:

Revenue Cost of revenue (exclusive of depreciation and amortization) Gross prof it Selling, dist ribution, and administ rative expenses Impair ment and rest r uct uring charges Operating income Other income (expense): Interest expense, net Other income, net Total other income (expense), net Income before provision for income taxes Provision for income taxes Net income

Comparisons and analysis of our revenues are presented below for the years ended:

2014

2013

2012

100.00% 56.48 43.52 34.30 0.02 9.20

100.00% 56.42 43.58 33.38 0.16 10.04

100.00% 56.86 43.14 33.63 0.65 8.86

(0.60) 0.13 (0.47) 8.73 3.20 5.53%

(0.61) 0.11 (0.50) 9.54 3.31 6.23%

(0.65) 0.20 (0.45) 8.41 2.83 5.58%

2013 Retail D i re ct Financial Services Other

Cabela’s 2014 Annual Report

012%

(Dollars in Thousands)

2,233,322 62.0% $ 973,614 27.1 375,810 10.4 16,831 0.5 3,599,577 100.0% $

Increase (Decrease)

1,849,582 59.4% $ 383,740 930,943 29.9 42,671 319,399 10.3 56,411 12,758 0.4 4,073 3,112,682 100.0% $ 486,895

% Change 20.7% 4.6 17.7 31.9 15.6

Product Sales Mix – The following table sets forth the percentage of our merchandise revenue contributed by major product categories for our Retail and Direct segments and in total for the years ended:

Product Category: Hunting Equipment General Outdoors Clothing and Foot wear Total

Results of Operations - 2013 Compared to 2012

Retail 2013 2012

Direct 2013 2012

Total 2013 2012

51.0% 49.5% 41.2% 37.1% 48.0% 45.3% 26.8 28.7 29.1 32.0 27.5 29.8 22.2 21.8 29.7 30.9 24.5 24.9 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Cabela’s 2014 Annual Report

2013

2012

Increase (Decrease)

% Change

(Dollars in Thousands)

Interest and fee income Interest expense Provision for loan losses Net interest income, net of provision for loan losses Non-interest income: Interchange income Other non-interest income Total non-interest income Less: Customer rewards costs Financial Ser vices revenue

$ 343,353 $ 301,699 (63,831) (54,092) (43,223) (42,760) 236,299 204,847

$ 41,654 9,739 463 31,452

13.8% 18.0 1.1 15.4

344,979 292,151 7,530 12,364 352,509 304,515 (212,998) (189,963) $ 375,810 $ 319,399

52,828 (4,834) 47,994 23,035 $ 56,411

18.1 (39.1) 15.8 12.1 17.7

Operating Income Comparisons and analysis of operating income are presented below for the years ended: 2013

Cabelaâ&#x20AC;&#x2122;s 2014 Annual Report

Increase (Decrease)

% Change

(Dollars in Thousands)

Total operating income Total operating income as a percentage of total revenue

$ 361,361 $ 275,699 $ 10.0% 8.9%

85,662 1.1%

31.1%

Operating income by business segment: Retail D i re ct Financial Ser vices

$ 428,361 157,227 104,402

83,321 1,990 30,220

24.1 1.3 40.7

Operating income as a percentage of segment revenue: Retail D i re ct Financial Ser vices

2012

19.2% 16.1 27.8

$ 345,040 155,237 74,182 18.7% 16.7 23.2

0.5% (0.6) 4.6

Cabelaâ&#x20AC;&#x2122;s 2014 Annual Report

The following table shows the activity in our allowance for loan losses and charge-off activity for the years ended: 2014

2013

2012

Aging of Credit Cards Loans Outstanding The following table shows our credit card loans outstanding at the end of 2014 and 2013 segregated by the number of months passed since the accounts were opened.

(Dollars in Thousands)

Balance, begin ning of year Provision for loan losses

Charge-offs Recoveries Net charge-offs Balance, end of year

(76,868) 18,408 (58,460) $ 56,572

(72,959) 17,246 (55,713) $ 53,110

(68,834) 18,324 (50,510) 65,600

Net charge-offs on credit card loans Charge-offs of accrued interest and fees (recorded as a reduction in interest and fee income) Total net charge-offs including accrued interest and fees

$ (58,460)

$ (55,713)

(50,510)

(8,093) $ (66,553)

(7,439) $ (63,152)

(7,293) (57,803)

Net charge-offs, including accrued interest and fees, as a percentage of average credit card loans, including accr ued interest and fees

Cabela’s 2014 Annual Report

53,110 61,922

1.69%

65,600 43,223

180%

73,350 42,760

1.87%

Months Since Account Opened

2014 Loans Percentage Outstanding of Total

2013 Loans Percentage Outstanding of Total

(Dollars in Thousands)

6 months or less 7 – 12 months 13 – 24 months 25 – 36 months 37 – 48 months 49 – 60 months 61 – 72 months 73 – 84 months More than 84 months2 Total

186,550 167,531 410,728 361,750 342,103 282,882 294,044 295,573 ,130,9734 4,472,134

4.2% 3.7 9.2 8.1 7.6 6.3 6.6 6.6 7.7 100.0%

171,206 170,840 336,250 330,048 273,569 287,381 291,419 324,751 1,800,385 3,985,849

4.3% 4.3 8.4 8.3 6.9 7.2 7.3 8.1 45.2 100.0%

Cabela’s 2014 Annual Report

BOARD OF DIRECTORS James W. Cabela

Dennis Highby

Thomas L. Millner

Theodore M. Armstrong

Chairman Cabela’s Incorporated

Retired President and CEO Cabela’s Incorporated

President and CEO Cabela’s Incorporated

Retired CFO Angelica Corporation

John H. Edmondson

John Gottschalk

Reuben Mark

Michael R. McCarthy

Retired CEO West Marine, Inc.

Retired Chairman and CEO Omaha -H erald Company World

Retired Chairman and CEO Palmolive Colgate - Company

Chairman McCarthy Group, LLC

Donna M. Milrod

Beth M. Pritchard

James F. Wright

Chief Administrative Officer The Depository Trust & Clearing Corpo ration

Principal Sunrise Beauty Studio, LLC

Retired Chairman and CEO Tractor Supply Company

EXECUTIVE OFFICERS

Sean Baker

James W. Cabela

Thomas L. Millner

Chairman

President and Chief Executive Officer

Charles Baldwin

Ralph W. Castner

Michael Copeland

Executive Vice President and Chief Administrative Officer

Executive Vice President and Chief Financial Officer

Executive Vice President and Chief Operations Officer

Brian J. Linneman

Douglas R. Means

Scott K. Williams

Executive Vice President and Chief Merchandising Officer

Executive Vice President and Chief Supply Chain Officer

Executive Vice President and Chief Marketing and E-Commerce fficer O

Cabela’s 2014 Annual Report

Executive Vice President, and President and CEO of WFB