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Cisco Capital Overview May 2009. Demos Stogiannidis Enterprise Finance Manager Cisco Capital Dubai Ltd (Regulated by the DFSA). Agenda. Cisco Capital Overview Cisco Capital Value-add Typical Finance Frame Agreements Q&A . Who is Cisco Capital? .

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cisco capital overview may 2009
Cisco Capital Overview May 2009

Demos Stogiannidis

Enterprise Finance Manager

Cisco Capital Dubai Ltd (Regulated by the DFSA)

agenda
Agenda
  • Cisco Capital Overview
  • Cisco Capital Value-add
  • Typical Finance Frame Agreements
  • Q&A
who is cisco capital
Who is Cisco Capital?
  • Wholly-owned Cisco subsidiary created in 1996 to:

Leverage Cisco’s financial strength to help provide end-to-end financing for Cisco’s products and services

Eliminate barriers to acquiring Cisco products and services

Maximize customer’s cash flows and profitability

Provide direct customer contact

  • 10% of all Cisco Sales financed by Capital
  • Alignment with technology innovation
  • Global market presence - 88 countries
  • Our focus - enabling our customers’ success
cisco capital strategy
Cisco Capital Strategy

To profitably support the acquisition and deployment of Cisco’s technology solution with creative, flexible, market enhancing financing

technology financing

Financing means you can choose to make purchases over a designated time frame, rather than making a large upfront cash investment

Most technology equipment and service can be financed.

There are business and technology benefits to this acquisition strategy.

Financing options primarily include loans and leases

Technology Financing
who is financing
Organizations vary widely from small sole proprietorships and partnerships to Fortune 100 corporations and government entities.

Transactions range from a few thousand dollars worth of equipment to multi-million dollar facilities and communications systems.

Who is Financing?
organizations that leverage
ORGANIZATIONS THAT LEVERAGE

Ministry of Health

Japan

why do organizations finance
Why do Organizations Finance?

Flexibility:

whether its budget or technology

To accommodate different technology and budget needs, cash flow patterns and streams of income.

However, organizations of all sizes can agree on three main reasons for choosing finance:

Practicality:

organizations benefit from the use of technology and not the ownership

Cost effectiveness:

helping customers achieve better ROI and minimise unexpected costs and risks

benefits of financing for it decision makers and directors

Renew technology to match business requirements

    • Ability to satisfy your needs now
  • Remove budgetary constraints
    • Flexible payment terms e.g. deferred
  • Maximise available budget
    • Additional projects can be considered
  • Protect against technology obsolescence
    • “Refresh” solution with minimal business impact
  • Usage without the risks of ownership
    • Protection from depreciating IT investments

Financing provides IT

with flexibility and peace of mind

Benefits of Financing for IT Decision Makers and Directors
benefits of financing for finance decision makers government agencies

Effective cost / benefit management

Avoids significant IT investment spikes

Budget stability / planning

Costs fixed for contract duration

Conserve budgets and preservation of cash

Saves / enables alternative use of budget or liquid assets

Key financial performance indicators improved

Such as return on assets

Potential tax advantages

Finance revenue costs can reduce tax burden

It is the use of equipment that

generates profits, not ownership

Benefits of Financingfor Finance Decision Makers & Government Agencies
loan extended payment benefits
Loan (Extended Payment) Benefits
  • Retain ownership upon purchase
  • Addresses budget limitations
  • Frees up capital for day to day business
  • Payments can be structured to match deployment and economic benefit
  • No transaction Fees
  • No early Repayment penalties
cisco capital part of cisco s whole offer

Cisco Capital Financing

Cisco Services

3rd Party Equipment

Cisco Network Platform

Cisco CapitalPart of Cisco’s Whole Offer
cisco capital versus generic financing organisations
Long term business initiatives directly aligned with customer and Cisco initiatives.Cisco Capital versusGeneric Financing Organisations

Other finance

organisations

Cisco Capital

Primary focus not lease/ loan profitability.

We take real product risk through aggressive residual values.

Technology experience no one else could offer. Ability to create true lifecycle models.

the golden rule

Appreciates

Depreciates

buy it

finance it

The Golden Rule

It is the use of equipment that generates profits, not ownership

example of typical credit facility
Example of Typical Credit Facility

Multi-million dollar Credit Facility

Tenor: 3 years

Grace period: 6 months

Interest rates: very competitive, below market rates

Repayment Structure: Quarterly or monthly in arrears

Finance up to 33% non-Cisco, non-competitive equipment and services.

Sign Commercial Term Sheet outlining major T&C to cover all the immediate and future needs of Government and Ministries in terms of Cisco equipment and services

Sign Master Lease and Loan Agreement

Specific quotations are submitted for individual Projects including Interest Rate (loan) or Repayment Schedule (lease) for review and approval and subsequent drawdown based on the MLA

Quotations Pricing validity is 30/90 days and subject to final Credit, Pricing and Legal approval

typical cisco capital loan scenario

Payment - WS

Hold & Release Authority

Invoice - WS

Payment - Margin

Copy –Invoice Retail

Product

Invoice & Payment - Finance

Customer Credit Check

Loan Documents

Invoice -Retail

PO

PO

Typical Cisco Capital Loan Scenario

CSC finances End-User who orders from Reseller

.

Cisco-BV

End-User

Reseller

CSC

cisco capital continued strategic significance
Cisco Capital – Continued Strategic Significance

“We have $29.5B in cash, and we are using Cisco Capital on a global basis in a conservative fashion to help our customers in this country and around the world . . .”

February 5, 2009 – CNBC Interview

the smarter way to acquire your technology solution
The smarter way to acquire your technology solution

Finance with Cisco Capitaland benefit from:

Finance your Cisco solutionand benefit from:

Cash flow conservationSpread costs over time, preserve credit and avoid the need for cash investment

Business focusRemove the burden of equipment ownership and disposal

One solution, predictable payments Combine hardware, software and services into one financial framework.

Lower costsTake advantage of competitive rates and residual values which reduce total cost of ownership

Equipment lifecycle management Gain from flexible upgrade,and migration options and easy equipment disposal

Maximum flexibilityChoose payment terms, lengths and End of Lease options including return or outright purchase.

Find out how Cisco Capital can help you maximise the benefits of your financing solution, visit our website:

www.cisco.com/go/ciscofinanced_europe

More Cisco expertise.More flexible financing.

*Usual Cisco Terms and Conditions apply, subject to credit approval, not available in all countries.