Cisco 2008 Annual Report Download - page 58

Download and view the complete annual report

Please find page 58 of the 2008 Cisco annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 81

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81

2008 Annual Report 63
Notes to Consolidated Financial Statements
6. Financing Receivables and Guarantees
(a) Lease Receivables
Lease receivables represent sales-type and direct-financing leases resulting from the sale of the Company’s and complementary third-
party products. These lease arrangements typically have terms from two to three years and are generally collateralized by a security
interest in the underlying assets. The net lease receivables are summarized as follows (in millions):
July 26, 2008 July 28, 2007
Gross lease receivables $ 1,730 $ 1,140
Unearned income and other allowances (314) (212)
Lease receivables, net $ 1,416 $ 928
Reported as:
Current $ 554 $ 389
Noncurrent 862 539
Lease receivables, net $ 1,416 $ 928
Contractual maturities of the gross lease receivables at July 26, 2008 were $655 million in fiscal 2009, $514 million in fiscal 2010,
$328 million in fiscal 2011, $160 million in fiscal 2012, and $73 million in fiscal 2013 and thereafter. Actual cash collections may differ from
the contractual maturities due to early customer buyouts, refinancings, or defaults.
(b) Financed Service Contracts
Financed service contracts are summarized as follows (in millions):
July 26, 2008 July 28, 2007
Financed service contracts—current $ 730 $ 476
Financed service contracts—noncurrent 588 377
Financed service contracts $ 1,318 $ 853
The revenue related to financed service contracts, which primarily relates to technical support services, is deferred and included in
deferred service revenue. The revenue is recognized ratably over the period during which the related services are to be performed, which
is typically from one to three years.
(c) Loan Receivables
Loan receivables are summarized as follows (in millions):
July 26, 2008 July 28, 2007
Gross loan receivables $ 607 $ 513
Allowances (128) (243)
Loan receivables, net $ 479 $ 270
Reported as:
Current $ 263 $ 198
Noncurrent 216 72
Loan receivables, net $ 479 $ 270
A portion of the revenue related to loan receivables is deferred and included in deferred product revenue based on revenue recognition criteria.