Cisco Capital
Overview
Zeljko Spoljaric – Leasing Account Manager Hundriatics
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© 2006 Cisco Systems, Inc. All rights reserved.
Cisco Confidential
1
Cisco Capital Overview (CSC)
 100% owned captive finance company
 Incorporated in 1996
 200+ employees worldwide
 120+ employees in Europe & Emerging markets
 Local presence in UK/I, France, Germany, Netherlands,
Italy, Spain, Russia, Nordics, CEE
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CSC coverage - Europe
Subsidiary
Partner
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Classification of CSC-deals
 CSC co-operates with banks and leasing companies in
CEE in order to provide customers with competitive:
– Leasing solutions or
– Loan facility proposals.
 CSC-deal classifications:
- High touch deals: above $500K, needs individual approach
and CSC involvement, mainly large players, exceptionally
smaller deals as well that do not fit conditions of easy lease
program…
- Easy lease programs: up to $40-50K, daily CSC involvement
not needed (take it or leave it prg!!!), commercial and Mid market
customers
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The 5 basic plays of CSC lease
1. The basic finance lease
2. Cash flow management – flexible repayment
3. Operating lease – residual value - FMV
4. Sale and lease back
5. Technology migration
(6.) Loan with NWB
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1. Cash Flow Play (finance lease)
CUSTOMER BENEFITS
$1.2m Purchase
spend $400k
this year versus
$1.2m spread budget
versus
+
3 year lease
12 payments
Today
Year 1
Year 2
C
O
M
Year 3
[COM - cost of money]
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2. Flexible Repayment
CUSTOMER BENEFITS
$1.2m Purchase
$1.2m Purchase
improved cashflow
versus
match IT costs with
economic benefits
3 year lease
STEP payments
Today
Presentation_ID
Year 1
© 2006 Cisco Systems, Inc. All rights reserved.
Year 2
Cisco Confidential
+
C
O
M
Year 3
7
3. Operating Lease
CUSTOMER BENEFITS
$1.2m Purchase =
Capital Investment (“CAPEX”)
utilise all available budgets
to achieve business
value via IT
versus
improve financial ratios
( Return On Assets )
3 year Operating lease =
Operating Expense (OPEX”)
Today
Year 1
Year 2
+
C
O
M
Year 3
End of lease options:
- return of equipment to lessor
- lease extension
- purchase by the lessee for FMV (fair market value)
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4. Sale and Lease Back
“Legacy Kit”
$300k
Book Cost
(depreciates)/
Lease Cost
CUSTOMER BENEFITS
$1.2m Purchase
technology benefits today
without big unbudgeted
Year 1 costs.
versus
$300k
“Sale”
+
3 year lease
12 payments
CASH paid
From Capital
To Customer
Today
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Year 1
© 2006 Cisco Systems, Inc. All rights reserved.
Year 2
Cisco Confidential
+
C
O
C
M
O
M
this year’s impact of IT
transition are softened by
“sale” of legacy kit.
Year 3
9
5. Technology Refresh
CUSTOMER BENEFITS
$480k Sale
New AT Kit
RV
($1.2m Sale)
$960k funded
At month 18
6 payments made
= $480k
Today
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Year 1
better technology roadmap
and/ or better meet
changing business
needs during 3 years
without increase in
quarterly costs
Same Lease payments
Extended by
Another 6 Quarters
Year 2
© 2006 Cisco Systems, Inc. All rights reserved.
Year 3
Cisco Confidential
Year 4
+
C
O
M
refresh mix (%) can be
agreed up front
Year 5
10
Financed project opportunities
 Telecom service providers:
– Wireline investments: fixed line providers, voice or data related
developments
– Wireless investments: mobile operators, voice or data related
developments
– Cable TV projects
– Triple play (voice, internet, IPTV)
 Public sector:
– Voice or data development, LAN/WAN infrastructure of institutions,
universities
– Digital city projects
 Enterprise, commercial projects:
– Voice, data, LAN/WAN infrastructure
– Datacenters, outsourcing, etc..
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WORK-FLOW
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Structure
Sale and purchase
contract
or
partner
or
Customer
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Thank you for your time!
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