Cisco 2014 Annual Report Download - page 100

Download and view the complete annual report

Please find page 100 of the 2014 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

7. Financing Receivables and Operating Leases
(a) Financing Receivables
Financing receivables primarily consist of lease receivables, loan receivables, and financed service contracts and other. Lease
receivables represent sales-type and direct-financing leases resulting from the sale of the Company’s and complementary
third-party products and are typically collateralized by a security interest in the underlying assets. Loan receivables represent
financing arrangements related to the sale of the Company’s products and services, which may include additional funding for
other costs associated with network installation and integration of the Company’s products and services. Lease receivables
consist of arrangements with terms of four years on average, while loan receivables generally have terms of up to three years.
The financed service contracts and other category includes financing receivables related to technical support and advanced
services, as well as receivables related to financing of certain indirect costs associated with leases. Revenue related to the
technical support services is typically deferred and included in deferred service revenue and is recognized ratably over the
period during which the related services are to be performed, which typically ranges from one to three years.
A summary of the Company’s financing receivables is presented as follows (in millions):
July 26, 2014
Lease
Receivables
Loan
Receivables
Financed Service
Contracts
and Other Total
Gross ............................................. $3,532 $1,683 $3,210 $8,425
Residual value ..................................... 233 — — 233
Unearned income .................................. (238) — — (238)
Allowance for credit loss ............................ (233) (98) (18) (349)
Total, net ................................. $3,294 $1,585 $3,192 $8,071
Reported as:
Current ....................................... $1,476 $ 728 $1,949 $4,153
Noncurrent .................................... 1,818 857 1,243 3,918
Total, net ................................. $3,294 $1,585 $3,192 $8,071
July 27, 2013
Lease
Receivables
Loan
Receivables
Financed Service
Contracts
and Other Total
Gross ............................................. $3,529 $1,649 $3,136 $8,314
Residual value ...................................... 251 — — 251
Unearned income ................................... (273) — — (273)
Allowance for credit loss ............................. (238) (86) (20) (344)
Total, net .................................. $3,269 $1,563 $3,116 $7,948
Reported as:
Current ....................................... $1,418 $ 898 $1,721 $4,037
Noncurrent .................................... 1,851 665 1,395 3,911
Total, net .................................. $3,269 $1,563 $3,116 $7,948
As of July 26, 2014 and July 27, 2013, the deferred service revenue related to the financed service contracts and other was
$1,843 million and $2,036 million, respectively.
Future minimum lease payments at July 26, 2014 are summarized as follows (in millions):
Fiscal Year Amount
2015 ......................................................... $1,608
2016 ......................................................... 1,049
2017 ......................................................... 590
2018 ......................................................... 227
2019 ......................................................... 58
Total ..................................................... $3,532
Actual cash collections may differ from the contractual maturities due to early customer buyouts, refinancings, or defaults.
92