Cisco 2013 Annual Report Download - page 73

Borrowings
Senior Notes The following table summarizes the principal amount of our senior notes (in millions):
July 27, 2013 July 28, 2012
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 27, 2013.
Other Debt Other debt includes secured borrowings associated with customer financing arrangements, notes and credit
facilities with a number of financial institutions that are available to certain of our foreign subsidiaries, and notes related to our
investment in Insieme Networks, Inc. (“Insieme”). The amount of borrowings outstanding under these arrangements was $31
million and $41 million as of July 27, 2013 and July 28, 2012, respectively.
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 27, 2013 and July 28, 2012 we had no commercial paper outstanding under
this program.
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 27, 2013, 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.
Deferred Revenue The following table presents the breakdown of deferred revenue (in millions):
July 27, 2013 July 28, 2012
Increase
(Decrease)
Service .............................................. $ 9,403 $ 9,173 $230
Product .............................................. 4,020 3,707 313
Total ........................................ $13,423 $12,880 $543
Reported as:
Current .......................................... $ 9,262 $ 8,852 $410
Noncurrent ....................................... 4,161 4,028 133
Total ........................................ $13,423 $12,880 $543
The increase in deferred service revenue in fiscal 2013 reflects the impact of new contract initiations and renewals, partially
reduced by the ongoing amortization of deferred service revenue. The increase in deferred product revenue was primarily due
to increased deferrals related to subscription revenue arrangements.
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