Cisco 2015 Annual Report Download - page 69

Download and view the complete annual report

Please find page 69 of the 2015 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 140

  • 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
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140

accordance with U.S. generally accepted accounting principles and should not be regarded in isolation or as an alternative for net
income provided by operating activities or any other measure calculated in accordance with such principles, and other companies
may calculate free cash flow in a different manner than we do.
The following table summarizes the dividends paid and stock repurchases (in millions, except per-share amounts):
DIVIDENDS STOCK REPURCHASE PROGRAM TOTAL
Years Ended Per Share Amount Shares
Weighted-Average
Price per Share Amount Amount
July 25, 2015 ............ $ 0.80 $ 4,086 155 $ 27.22 $ 4,234 $ 8,320
July 26, 2014 ............. $ 0.72 $ 3,758 420 $ 22.71 $ 9,539 $ 13,297
July 27, 2013 ............. $ 0.62 $ 3,310 128 $ 21.63 $ 2,773 $ 6,083
Any future dividends will be subject to the approval of our Board of Directors.
Accounts Receivable, Net The following table summarizes our accounts receivable, net (in millions), and DSO:
July 25, 2015 July 26, 2014
Increase
(Decrease)
Accounts receivable, net ..................................................... $ 5,344 $ 5,157 $ 187
DSO......................................................................... 38 38 —
Our accounts receivable net, as of July 25, 2015 increased by approximately 4% compared with the end of fiscal 2014. Our DSO
as of July 25, 2015 was flat compared with the end of fiscal 2014, as factors that drive DSO such as shipment linearity and
collections were similar for the periods presented.
Inventory Supply Chain The following table summarizes our inventories and purchase commitments with contract manufacturers
and suppliers (in millions, except annualized inventory turns):
July 25, 2015 July 26, 2014
Increase
(Decrease)
Inventories .................................................................. $ 1,627 $ 1,591 $ 36
Annualized inventory turns .................................................. 12.1 12.7 (0.6)
Purchase commitments with contract manufacturers and suppliers ............ $ 4,078 $ 4,169 $ (91)
Inventory as of July 25, 2015 increased by 2% from our inventory balance at the end of fiscal 2014, and for the same period
purchase commitments with contract manufacturers and suppliers decreased by approximately 2%. On a combined basis,
inventories and purchase commitments with contract manufacturers and suppliers decreased by 1% compared with the end of
fiscal 2014. We believe our inventory and purchase commitments levels are in line with our current demand forecasts.
Our finished goods consist of distributor inventory and deferred cost of sales and manufactured finished goods. Distributor
inventory and deferred cost of sales are related to unrecognized revenue on shipments to distributors and retail partners as well as
shipments to customers. Manufactured finished goods consist primarily of build-to-order and build-to-stock products.
We purchase components from a variety of suppliers and use several contract manufacturers to provide manufacturing services
for our products. During the normal course of business, in order to manage manufacturing lead times and help ensure adequate
component supply, we enter into agreements with contract manufacturers and suppliers that allow them to procure inventory
based upon criteria as defined by us or that establish the parameters defining our requirements and our commitment to securing
manufacturing capacity. A significant portion of our reported purchase commitments arising from these agreements are firm,
noncancelable, and unconditional commitments. In certain instances, these agreements allow us the option to cancel, reschedule,
and adjust our requirements based on our business needs prior to firm orders being placed. Our purchase commitments are for
short-term product manufacturing requirements as well as for commitments to suppliers to secure manufacturing capacity.
Inventory and supply chain management remain areas of focus as we balance the need to maintain supply chain flexibility to help
ensure competitive lead times with the risk of inventory obsolescence because of rapidly changing technology and customer
requirements. We believe the amount of our inventory and purchase commitments is appropriate for our revenue levels.
61