Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?

To: bambs who wrote (59484)	5/13/2002 4:40:22 PM
From: RetiredNow	Respond to of 77400

Hi Bambs, I don't think they have any left. They spent about $2 billion in Q3 buying the underlying properties that were part of their synthetic leases. Carter of Cisco stated that he wanted to get rid of the leases, because the investment community was questioning them. However, we'll have the definitive answer when the Q3 10Q comes out. Hope that helps in your analysis. From Q2 10Q: "Leases The Company has entered into several agreements to lease sites, both completed and under construction, with buildings totaling 8.8 million square feet of space in San Jose, California and surrounding areas; Boxborough, Massachusetts; Salem, New Hampshire; Richardson, Texas; and Research Triangle Park, North Carolina. These lease agreements also cover 297 acres of land at these sites. All of the leases have initial terms of five to seven years and options to renew for an additional three to five years, subject to certain conditions. At any time during the terms of these leases, the Company may, at its option, purchase the land or both land and buildings. The Company may purchase the buildings at approximately the amount expended by the lessors to construct the buildings. If the Company elects not to purchase the land or both land and buildings at the end of each of the leases, the Company has guaranteed a residual value of $1.6 billion at January 26, 2002. The lessors of the properties have committed to fund up to a maximum of $2.3 billion, subject to reductions based on certain conditions in the respective leases, with the portion of the committed amount actually used to be determined by the Company. Rent obligations for the buildings commenced on various dates and will expire at the same time as the land leases. As part of the above lease transactions, the Company restricted $1.2 billion of its investment securities as collateral for specified obligations of the lessors under the leases. These investment securities are restricted as to withdrawal. 16 -------------------------------------------------------------------------------- CISCO SYSTEMS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) The Company also leases office space in other U.S. locations, as well as locations in the Americas; Europe, the Middle East, and Africa ("EMEA"); Asia Pacific; and Japan. Future annual minimum lease payments under all noncancelable operating leases with an initial term in excess of one year as of January 26, 2002 are as follows (in millions): Fiscal Year: Amount ------------ ------- 2002 (remaining six months) $ 164 2003 317 2004 292 2005 250 2006 196 Thereafter 858 ------- Total $ 2,077 ======= "

To: bambs who wrote (59484)	5/13/2002 11:40:59 PM
From: Stock Farmer	Respond to of 77400

bambs - On Cisco & synthetic leases, I kind of agree with mindmeld. Looks like Cisco cleared off their synthetic leases. A huge expenditure for Capex showed up this quarter, and their restricted investments went to zero on the balance sheet. We'll know more or less for sure when the 10-Q comes out. Although one must be careful of drawing absolute conclusions from disclosure terms that parse like "primarily due to nothing up my sleeve". Based on the press release, they reported 1,761 M$ in CAPEX this quarter. In return they picked up 1,498 M$ in property, plant and equipment after obliterating 1,161 M$ in restricted assets for a net increase in assets of 337 M$. Depreciation counts for another 418 M$. I wonder where the other $1,006 went? Guess we wait for a few weeks for the 10-Q. John