Cisco 2013 Annual Report Download - page 104

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CREDIT LOSS ALLOWANCES
Lease
Receivables
Loan
Receivables
Financed Service
Contracts and Other Total
Allowance for credit loss as of July 31, 2010 ........................ $ 207 $ 73 $ 21 $ 301
Provisions ................................................... 31 43 8 82
Write-offs, net of recoveries ..................................... (13) (18) (2) (33)
Foreign exchange and other ..................................... 12 5 — 17
Allowance for credit loss as of July 30, 2011 ........................ $ 237 $ 103 $ 27 $ 367
Gross receivables as of July 30, 2011, net of unearned income .......... $2,861 $1,468 $2,637 $6,966
(d) Financing Guarantees
In the ordinary course of business, the Company provides financing guarantees for various third-party financing arrangements
extended to channel partners and end-user customers. Payments under these financing guarantee arrangements were not
material for the periods presented.
Channel Partner Financing Guarantees The Company facilitates arrangements for third-party financing extended to channel
partners, consisting of revolving short-term financing, generally with payment terms ranging from 60 to 90 days. These
financing arrangements facilitate the working capital requirements of the channel partners, and, in some cases, the Company
guarantees a portion of these arrangements. The volume of channel partner financing was $23.8 billion, $21.3 billion, and
$18.2 billion for fiscal 2013, 2012, and 2011, respectively. The balance of the channel partner financing subject to guarantees
was $1.4 billion and $1.2 billion as of July 27, 2013 and July 28, 2012, respectively.
End-User Financing Guarantees The Company also provides financing guarantees for third-party financing arrangements
extended to end-user customers related to leases and loans, which typically have terms of up to three years. The volume of
financing provided by third parties for leases and loans as to which the Company had provided guarantees was $185 million
for fiscal 2013, $227 million for fiscal 2012, and $247 million for fiscal 2011.
Financing Guarantee Summary The aggregate amounts of financing guarantees outstanding at July 27, 2013 and July 28, 2012,
representing the total maximum potential future payments under financing arrangements with third parties along with the
related deferred revenue, are summarized in the following table (in millions):
July 27, 2013 July 28, 2012
Maximum potential future payments relating to financing guarantees:
Channel partner ............................................................... $ 438 $ 277
End user ..................................................................... 237 232
Total .................................................................... $ 675 $ 509
Deferred revenue associated with financing guarantees:
Channel partner ............................................................... $(225) $(193)
End user ..................................................................... (191) (200)
Total .................................................................... $(416) $(393)
Maximum potential future payments relating to financing guarantees, net of associated deferred
revenue ........................................................................ $ 259 $ 116
96