Dell 2007 Annual Report Download - page 88

Table of Contents
DELL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
included in other current and non-current liabilities on Dell's Consolidated Statements of Financial Position, are presented in the
following tables:
Fiscal Year Ended
February 1, February 2, February 3,
2008 2007 2006
(in millions)
Deferred service revenue:
Deferred service revenue at beginning of year $ 4,221 $ 3,707 $ 2,904
Revenue deferred for new extended warranty and service contracts sold 3,646 3,135 2,830
Revenue recognized (2,607) (2,621) (2,027)
Deferred service revenue at end of year $ 5,260 $ 4,221 $ 3,707
Current portion $ 2,486 $ 2,032 $ 1,842
Non-current portion 2,774 2,189 1,865
Deferred service revenue at end of year $ 5,260 $ 4,221 $ 3,707
Fiscal Year Ended
February 1, February 2, February 3,
2008 2007 2006
(in millions)
Warranty liability:
Warranty liability at beginning of year $ 958 $ 951 $ 722
Costs accrued for new warranty contracts and changes in estimates for pre-existing warranties(a) 1,141 1,242 1,391
Service obligations honored (1,170) (1,235) (1,162)
Warranty liability at end of year $ 929 $ 958 $ 951
Current portion $ 690 $ 768 $ 714
Non-current portion 239 190 237
Warranty liability at end of year $ 929 $ 958 $ 951
(a) Changes in cost estimates related to pre-existing warranties are aggregated with accruals for new warranty contracts. Dell's warranty liability process does not
differentiate between estimates made for pre-existing warranties and new warranty obligations.
NOTE 10 — COMMITMENTS AND CONTINGENCIES
Lease Commitments — Dell leases property and equipment, manufacturing facilities, and office space under non-cancelable leases.
Certain of these leases obligate Dell to pay taxes, maintenance, and repair costs. At February 1, 2008, future minimum lease payments
under these non-cancelable leases are as follows: $92 million in Fiscal 2009; $73 million in Fiscal 2010; $65 million in Fiscal 2011;
$53 million in Fiscal 2012; $39 million in Fiscal 2013; and $165 million thereafter.
Rent expense under all leases totaled $118 million, $78 million, and $70 million for Fiscal 2008, 2007, and 2006 respectively.
Restricted Cash — Pursuant to an agreement between DFS and CIT, Dell is required to maintain escrow cash accounts that are held as
recourse reserves for credit losses, performance fee deposits related to Dell's private label credit card, and deferred servicing revenue.
Restricted cash in the amount of $294 million and $418 million is
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