Cisco 2009 Annual Report Download - page 54

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Notes to Consolidated Financial Statements
5. Balance Sheet Details and Other Information
(a) Balance Sheet Details
The following tables provide details of selected balance sheet items (in millions):
July 25, 2009 July 26, 2008
Inventories:
Raw materials $ 165 $ 111
Work in process 33 53
Finished goods:
Distributor inventory and deferred cost of sales 382 452
Manufactured finished goods 310 381
Total finished goods 692 833
Service-related spares 151 191
Demonstration systems 33 47
Total $ 1,074 $ 1,235
Property and equipment, net:
Land, buildings, building improvements, and leasehold improvements $ 4,618 $ 4,445
Computer equipment and related software 1,823 1,770
Production, engineering, and other equipment 5,075 4,839
Operating lease assets 227 209
Furniture and fixtures 465 439
12,208 11,702
Less accumulated depreciation and amortization (8,165) (7,551)
Total $ 4,043 $ 4,151
Other assets:
Deferred tax assets $ 2,122 $ 1,770
Investments in privately held companies 709 706
Lease receivables, net 966 862
Financed service contracts 676 588
Loan receivables 537 216
Other 271 261
Total $ 5,281 $ 4,403
Deferred revenue:
Service $ 6,496 $ 6,133
Product:
Unrecognized revenue on product shipments and other deferred revenue 2,490 2,152
Cash receipts related to unrecognized revenue from two-tier distributors 407 575
Total product deferred revenue 2,897 2,727
Total $ 9,393 $ 8,860
Reported as:
Current $ 6,438 $ 6,197
Noncurrent 2,955 2,663
Total $ 9,393 $ 8,860
(b) Enhanced Early Retirement Program and Limited Workforce Reduction Actions
During the second half of fiscal 2009, the Company implemented an enhanced early retirement program, a voluntary program that was
offered to eligible employees. In connection with the enhanced early retirement program, the Company incurred a charge of $138 million
($28 million in cost of sales and $110 million in operating expenses) during fiscal 2009. In addition, during the second half of fiscal 2009, the
Company incurred approximately $125 million of severance charges ($25 million in cost of sales and $100 million in operating expenses) in
connection with limited workforce reduction actions that impacted just over 2,000 employees. As of July 25, 2009, the remaining liability for
the enhanced early retirement program and the limited workforce reduction actions was $186 million and was recorded in accrued
compensation. The remaining liability is expected to be paid primarily in the first quarter of fiscal 2010.
52 Cisco Systems, Inc.