Cisco 2005 Annual Report Download - page 55

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58
The following table summarizes the maturities of the Company’s fixed income securities at July 30, 2005 (in millions):




    
    
    
    
   
Actual maturities may differ from the contractual maturities because borrowers have the right to call or prepay certain obligations.
8. Commitments and Contingencies
Operating Leases
The Company leases office space in several U.S. locations, as well as locations elsewhere in the Americas; Europe, the Middle East, and
Africa (EMEA); Asia Pacific; and Japan. Rent expense totaled $179 million, $191 million, and $196 million in fiscal 2005, 2004, and
2003, respectively. Future annual minimum lease payments under all noncancelable operating leases with an initial term in excess of
one year as of July 30, 2005 were as follows (in millions):
 
   
   
   
   
   
   
  
Purchase Commitments with Contract Manufacturers and Suppliers
The Company purchases components from a variety of suppliers and uses several contract manufacturers to provide manufacturing
services for its products. During the normal course of business, in order to manage manufacturing lead times and help assure
adequate component supply, the Company enters into agreements with contract manufacturers and suppliers that either allow
them to procure inventory based upon criteria as defined by the Company or that establish the parameters defining the Company’s
requirements. In certain instances, these agreements allow the Company the option to cancel, reschedule, and adjust the Company’s
requirements based on its business needs prior to firm orders being placed. Consequently, only a portion of the Company’s reported
purchase commitments arising from these agreements are firm, noncancelable, and unconditional commitments. As of July 30, 2005, the
Company had total purchase commitments for inventory of approximately $954 million, compared with $951 million as of July 31, 2004.
In addition to the above, the Company records a liability for firm, noncancelable, and unconditional purchase commitments for
quantities in excess of its future demand forecasts consistent with the Company’s allowance for inventory. As of July 30, 2005, the
liability for these firm, noncancelable, and unconditional purchase commitments was $107 million, compared with $141 million as
of July 31, 2004 and was included in other accrued liabilities.
Notes to Consolidated Financial Statements