Cisco 2012 Annual Report Download - page 78

Deferred Revenue Related to Financing Receivables and Guarantees The majority of the deferred revenue in the
preceding table is related to financed service contracts. The majority of the revenue related to financed service
contracts, which primarily relates to technical support services, is deferred as the revenue related to financed
service contracts is recognized ratably over the period during which the related services are to be performed. A
portion of the revenue related to lease and loan receivables is also deferred and included in deferred product
revenue based on revenue recognition criteria not currently having been met.
Borrowings
Senior Notes The following table summarizes the principal amount of our senior notes (in millions):
July 28, 2012 July 30, 2011
Senior notes:
Floating-rate notes, due 2014 ........................ $ 1,250 $ 1,250
1.625% fixed-rate notes, due 2014 .................... 2,000 2,000
2.90% fixed-rate notes, due 2014 ..................... 500 500
5.50% fixed-rate notes, due 2016 ..................... 3,000 3,000
3.15% fixed-rate notes, due 2017 ..................... 750 750
4.95% fixed-rate notes, due 2019 ..................... 2,000 2,000
4.45% fixed-rate notes, due 2020 ..................... 2,500 2,500
5.90% fixed-rate notes, due 2039 ..................... 2,000 2,000
5.50% fixed-rate notes, due 2040 ..................... 2,000 2,000
Total ....................................... $16,000 $16,000
Interest is payable semiannually on each class of the senior fixed-rate notes, each of which is redeemable by us at
any time, subject to a make-whole premium. Interest is payable quarterly on the floating-rate notes. We were in
compliance with all debt covenants as of July 28, 2012.
Commercial Paper In fiscal 2011 we established a short-term debt financing program of up to $3.0 billion
through the issuance of commercial paper notes. As of July 28, 2012, we had no commercial paper outstanding
under this program. As of July 30, 2011, we had commercial paper notes of $500 million outstanding under this
program.
Other Notes and Borrowings Other notes and borrowings include notes and credit facilities with a number of
financial institutions that are available to certain of our foreign subsidiaries. The amount of borrowings
outstanding under these arrangements was $31 million and $88 million as of July 28, 2012 and July 30, 2011,
respectively.
Credit Facility On February 17, 2012, we terminated our then-existing credit facility and entered into a credit
agreement with certain institutional lenders that provides for a $3.0 billion unsecured revolving credit facility that
is scheduled to expire on February 17, 2017. Any advances under the credit agreement will accrue interest at
rates that are equal to, based on certain conditions, either (i) the higher of the Federal Funds rate plus 0.50%,
Bank of America’s “prime rate” as announced from time to time or one-month LIBOR plus 1.00%, or (ii) LIBOR
plus a margin that is based on our senior debt credit ratings as published by Standard & Poor’s Financial
Services, LLC and Moody’s Investors Service, Inc. The credit agreement requires that we comply with certain
covenants, including that we maintain an interest coverage ratio as defined in the agreement. As of July 28, 2012,
we were in compliance with the required interest coverage ratio and the other covenants and we had not
borrowed any funds under the credit facility.
We may also, upon the agreement of either the then-existing lenders or additional lenders not currently parties to
the agreement, increase the commitments under the credit facility by up to an additional $2.0 billion and/or
extend the expiration date of the credit facility up to February 17, 2019.
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