Cisco Capital Financing Partners Add $2 Billion of Short- Term Inventory Financing to Fuel Growth in Emerging Markets

Agreements with Third-Party Financiers to Benefit Cisco Channel Partners in the Middle East, Africa, Latin America, Russia and CIS, and Central and Eastern Europe

LONDON, England, and SAN JOSE, Calif., December 11, 2006 - As part of Cisco’s continued investment in emerging countries, Cisco® Capital has expanded its financing capabilities through agreements, announced today, with Citibank, GE Capital Solutions and Standard Chartered Bank. The three Cisco Capital financing partners have agreed to provide $2 billion of short-term inventory financing capacity on an annual basis to Cisco channel partners in the Middle East, Africa, Latin America, Russia and the Commonwealth of Independent States, and Central and Eastern Europe. This additional financing is enabled in part by the $500 million short-term growth capital fund Cisco announced last year. Cisco Capital also announced expanded coverage of its end-user leasing programs in emerging markets.

To address the needs of customers in emerging markets, especially small to medium-sized businesses (SMBs), Cisco has created an infrastructure to accelerate the adoption of Cisco technology in emerging markets. In the past 12 months, Cisco has added seven specialty distributors focused on expanding regional coverage in emerging markets, and increased its base of certified channel partners in the theatre by approximately 20 percent. In many of the emerging market regions, working capital is not readily available, and channel partners face long order-to-cash cycles due to a variety of factors, including isolated geography and government regulations. To help grow Cisco’s business in these regions, Cisco Capital has established strong relationships with its emerging market financing partners to help enable greater access to working capital, the lack of which has until today been a key constraint in achieving growth potential in these markets. Cisco Capital works closely with its financing partners to implement the channel financing and to support the channel partners throughout the entire order-to-cash cycle.

“The financing announced today provides the liquidity and working capital necessary to help our emerging market channel partners grow significantly, which is key to Cisco’s Emerging Markets strategy,” said David Rogan, president of Cisco Systems Capital Corporation. “Our financing partners provide both local presence and cross-border capabilities as well as an in-depth understanding of our Emerging Markets theatre. With nearly $10 billion in third-party inventory-financing capability today, Cisco Capital has created and implemented a global banking infrastructure, providing significant competitive advantage for Cisco with limited financial risk to the company.”

Cisco created the Emerging Markets theatre last year to address the specific local market requirements and unique needs of emerging countries. These regions are undergoing major transformation as they grow and diversify their economies, improve government efficiency, and educate their citizens. By focusing resources and investment in these regions now, Cisco intends to shape demand and accelerate growth for years to come.

“Although many countries in the emerging markets are undergoing major social and economic transformation by implementing the most advanced technology, the lack of capital remains a formidable barrier,” said Paul Mountford, president, Emerging Markets Theatre, Cisco. “The breadth of financing solutions offered by Cisco Capital and its financing partners puts Cisco technology within the reach of our channel partners and will bring clear benefits, to both the end customer and the people and businesses they affect.”

Cisco Capital has also expanded its end-user financing capabilities in emerging markets and now offers loan and leasing products to Cisco customers in 15 countries. Cisco Capital recently implemented leasing programs in South Africa, Russia, Brazil, Mexico and Colombia. Along with its regional finance partners, Cisco Capital plans to offer SMB financing capabilities in 14 new countries in FY07, including those in Central America and the Caribbean, plus Saudi Arabia, Turkey, Poland, Argentina and Chile. Cisco entered the commercial/SMB market with the introduction of Easy Lease, a leasing platform that provides competitive financing solutions to complement Cisco’s SMB growth initiatives. This program supplies Cisco channel partners with a valuable tool to capture leasing opportunities in the rapidly growing commercial/SMB market.

By utilizing Cisco Capital’s short-term growth capital through third-party financiers, Cisco can expand more rapidly and quickly help channel partners meet their inventory-financing and cash-flow needs in longer project payment cycles. In FY2006, more than 750 partners in 46 countries took advantage of extended terms financing.
About Cisco Capital

Cisco Systems Capital®, a wholly-owned subsidiary of Cisco Systems, Inc., specializes in financing networks by providing innovative, flexible financial programs to Cisco customers and channel partners worldwide. Cisco Capital offers attractive, flexible and short-term financing solutions that make it possible for customers to obtain higher credit lines and longer and more flexible terms that ultimately help them build stronger and healthier businesses. For more information, visit www.cisco.com/go/ciscocapitalpartners/us.
About Cisco Systems

Cisco, (NASDAQ: CSCO), is the worldwide leader in networking that transforms how people connect, communicate and collaborate. Information about Cisco can be found at http://www.cisco.com. For ongoing news, please go to http://newsroom.cisco.com.

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