Cisco Systems Reports Second Quarter Earnings.Business Editors/High-Tech Writers SAN JOSE San Jose, city, United States San Jose (sănəzā`, săn hōzā`), city (1990 pop. 782,248), seat of Santa Clara co., W central Calif.; founded 1777, inc. 1850. , Calif.--(BUSINESS WIRE)--Feb. 4, 2003 Cisco Systems “Cisco” redirects here. For other uses, see Cisco (disambiguation). Cisco System,Inc. (NASDAQ: CSCO, HKSE: 4333 ) is an American multinational corporation with 54,000 employees and annual revenue of US $28.48 billion as of 2006. (Nasdaq:CSCO CSCO Cisco Systems Incorporated (stock symbol) CSCO Chief Supply Chain Officer ) -- Q2 Revenues: $4.7 Billion -- Q2 Operating Cash Flow: $1.36 Billion -- Q2 Earnings Per Share: $0.14 GAAP; $0.15 Pro Forma Cisco Systems, Inc., the worldwide leader in networking for the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the , today reported its second quarter results for the period ended January 25, 2003. Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the second quarter of fiscal 2003 were $4.7 billion, compared with $4.8 billion for the second quarter of fiscal 2002, a decrease of 2.1%, and compared with $4.8 billion for the first quarter of fiscal 2003. Net income for the second quarter of fiscal 2003, on a generally accepted accounting principle (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ) basis, was $991 million or $0.14 per share, compared with $660 million or $0.09 per share for the second quarter of fiscal 2002, and $618 million or $0.08 per share for the first quarter of fiscal 2003. Pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma net income for the second quarter of fiscal 2003 was $1.1 billion or $0.15 per share, compared with pro forma net income of $664 million or $0.09 per share for the second quarter of fiscal 2002, and compared with $1.0 billion or $0.14 per share for the first quarter of fiscal 2003. A reconciliation between net income on a GAAP basis and pro forma net income is provided in a table immediately following the Pro Forma Consolidated Statements of Operations. Net sales for the first six months of fiscal 2003 were $9.6 billion, compared with $9.3 billion for the first six months of fiscal 2002, an increase of 3.2%. Net income for the first six months of fiscal 2003, on a GAAP basis, was $1.6 billion or $0.22 per share, compared with $392 million or $0.05 per share for the first six months of fiscal 2002. Pro forma net income for the first six months of fiscal 2003 was $2.1 billion or $0.29 per share, compared with pro forma net income of $1.0 billion or $0.13 per share for the first six months of fiscal 2002. "In what is probably the most challenging environment the information technology industry has ever faced, we are very pleased with our results in posting one of the best pro forma quarters in our history and the best GAAP quarter in terms of net income and earnings per share," said John Chambers John Chambers could be any of the following people:
Chambers continued, "From a global CEO and government leader perspective, we remain in a `show- me' economy. What I've heard from these leaders is clear: As their business improves, their investment priorities will center on productivity. The Intelligent Information Network provides the enabling infrastructure to integrate the applications, business processes and technologies to drive these productivity gains." Operational Highlights -- Cash flows from operations were $1.36 billion for the second quarter of fiscal 2003, compared with $2.0 billion for the second quarter of fiscal 2002, and compared with $1.07 billion for the first quarter of fiscal 2003. -- Cash and cash equivalents and total investments were $21.2 billion at the end of the second quarter of fiscal 2003, compared with $21.5 billion at the end of fiscal year 2002, and compared with $21.2 billion at the end of the first quarter of fiscal 2003. -- During the second quarter of fiscal 2003, Cisco repurchased approximately $1.5 billion of common stock. The total amount of stock repurchases Stock repurchase A firm's repurchase of outstanding shares of its common stock. for the first six months of fiscal 2003 was $2.6 billion. -- Days sales outstanding In accountancy, Days Sales Outstanding is a company's average collection period. A low figure indicates that the company collects its outstanding receivables quickly. Typically it is looked at either quarterly or yearly (90 or 365 days). (DSO See CSO. ) in accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying at the end of the second quarter of fiscal 2003 were 21 days, consistent with the fourth quarter of fiscal 2002 and the first quarter of fiscal 2003. -- Inventory turns were 7.0 turns in the second quarter of fiscal 2003, consistent with the fourth quarter of fiscal 2002 and the first quarter of fiscal 2003. Business Highlights -- Cisco and SBC (1) (SBC Communications Inc., San Antonio, TX, www.sbc.com) A large, national telecommunications company that grew from a multitude of local and regional companies, including Southwestern Bell, Pacific Bell and Nevada Bell, into a single, unified brand by 2002. Communications Inc. forged forge 1 n. 1. A furnace or hearth where metals are heated or wrought; a smithy. 2. A workshop where pig iron is transformed into wrought iron. v. a strategic marketing and sales agreement focused on accelerating the delivery of a new class of managed business services. SBC also plans to use Cisco IP networking technology in its core network infrastructure to deliver emerging services. -- Cisco and Lucent announced that Lucent will integrate and resell re·sell tr.v. re·sold , re·sell·ing, re·sells 1. To sell again. 2. To sell (a product or service) to the public or to an end user, especially as an authorized dealer. select Cisco packet data and media gateway products as part of Lucent's product offering for the mobile service provider market. The non-exclusive agreement will allow Cisco mobile wireless networking See wireless network. products to reach a broader segment of the service provider market. -- Cisco completed the acquisition of Psionic Software, Inc. and announced its intent to acquire Okena, Inc., both in the network security market segment. -- Lufthansa Airlines began trials of on-board On board usually means to be traveling on some vehicle. For example, Baby On Board. Compare with overboard. Metaphorically, the term on-board is often used to refer to some piece of technology that is integrated in a moving vehicle, for example: Internet services for passengers, based on Cisco Aironet(R) 350 access points, a Cisco 3640 router router Portable electric power tool used in carpentry and furniture making that consists of an electric motor, a base, two handle knobs, and bits (cutting tools). A router can cut fancy edges for shelving, grooves for storm windows and weather stripping, circles and ovals , and Cisco Catalyst(R) 3548 XL switches. -- Cisco announced it will provide networking technology for China Unicom's core network backbone and a major Code Division Multiple Access (CDMA (Code Division Multiple Access) A method for transmitting simultaneous signals over a shared portion of the spectrum. The foremost application of CDMA is the digital cellular phone technology from QUALCOMM that operates in the 800 MHz band and 1.9 GHz PCS band. ) upgrade project for 15 Chinese cities and provinces. -- Cisco introduced several IP communications A general term for networks that use the IP protocol for voice (VoIP) and video traffic. See IP telephony. technologies and products, including new unified messaging Having access to e-mail, voice mail and faxes via a common computer application or by telephone. For example, unified messaging may send faxes and digitized voice mail to a mail server that turns them into e-mail attachments. and IP PBX (Internet Protocol Private Branch eXchange) A telephone switch that supports voice over IP (VoIP). IP PBXs convert IP phone calls into traditional circuit-switched TDM connections for the PSTN. applications, audio- audio- pref. 1. Hearing: audiology. 2. Sound: audiogenic. and videoconferencing A real time video session between two or more users or between two or more locations. Although the first videoconferencing was done with traditional analog TV and satellites, inhouse room systems became popular in the early 1980s after Compression Labs pioneered digitized video systems capabilities, and a lower-cost Internet Protocol See Internet and TCP/IP. (networking) Internet Protocol - (IP) The network layer for the TCP/IP protocol suite widely used on Ethernet networks, defined in STD 5, RFC 791. IP is a connectionless, best-effort packet switching protocol. (IP) telephone. Adoption of Cisco IP communications solutions continued to expand with new customers including Burger King Corporation, Crate and Barrel, NFL NFL abbr. National Football League NFL (US) n abbr (= National Football League) → Fußball-Nationalliga Films, and Roche. In addition, service providers FastWeb, Bredbandsbolaget, SingTel, ITXC (Internet Telephony Exchange Carrier Corporation, Princeton, NJ, www.itxc.com) The largest IP exchange carrier in the world. ITXC was acquired by wholesale telco provider Teleglobe Bermuda Ltd. in 2004 and then by Videsh Sanchar Nigam Ltd. , Equant E´quant n. 1. (Ptolemaic Astron.) A circle around whose circumference a planet or the center of ann epicycle was conceived to move uniformly; - called also eccentric equator ltname>. and Sprint plan to deliver IP-based voice, data, and video services to their business and residential customers based on Cisco technology. -- Cisco entered into a reseller An organization that sells hardware and software to the general public. Resellers purchase products from software publishers and hardware manufacturers. agreement with IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) , and HP announced its intent to enter into a reseller agreement, to distribute the Cisco MDS MDS, n See temporomandibular pain-dysfunction syndrome. MDS 1 Maternal deprivation syndrome, see there 2 Myelodysplastic syndrome, see there 9000 Series storage switches. -- Germany's Deutsches Forschungsnetz DFN, full name "Deutsches ForschungsNetz e.V." (German Research Net), is the German national research and education network (NREN), used for academic and research purposes. DFN has operated since 1984. (DFN DFN Definition DFN Deutsches Forschungsnetz DFN Digital Freedom Network DFN Deafness DFN Day for Night (cinematography) DFN Discrete Fracture Network (geology/geophysics) ), and SuperSINET, Japan's high-speed Research Network, began upgrading their high-capacity, sophisticated IP network to include Cisco 12000 Series routers. -- Cisco introduced the Cisco Catalyst 2950 Long-Reach Ethernet Ethernet Telecommunications networking protocol introduced by Xerox Corp. in 1979. It was developed as an inexpensive way of sending information quickly between office machines connected together in a single room or building, but it rapidly became a standard computer (LRE LRE Long-Reach Ethernet LRE Least Restrictive Environment LRE Law-Related Education LRE Long Range Ethernet (Cisco) LRE Launch and Recovery Element LRE Latest Revised Estimate LRE Lead Responsible Engineer LRE Low Bit-Rate Encoding ) Switch, offering small and medium- size enterprises and multi-tenant building customers enhanced network-wide intelligent Layer 3 and 4 services. -- Zhejiang Telecom, a subsidiary of China Telecom, plans to deploy Cisco Metro Ethernet A metropolitan area network (MAN) that uses a 10 Gigabit Ethernet (10GbE) backbone rather than SONET/SDH links. Ethernet offers a more economical alternative. In a Metro Ethernet network, multiprotocol label switching (MPLS) may be deployed to provide quality of service (QoS). Switching products in the Zhejiang province in eastern China to further expand the Zhejiang Telecom's province-wide backbone network A backbone network provides a path for the exchange of information between different LANs or subnetworks.[1] A backbone can tie together diverse networks in the same building, in different buildings in a campus environment, or over wide areas. . In addition, 51 Degrees deployed the United Kingdom's first Ethernet-based broadband broadband Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). connectivity service to live operational customers using the Cisco Metro Ethernet Switching solution based on Ethernet over MPLS (1) (MultiProtocol Lambda Switching) The earlier name for GMPLS. See GMPLS. (2) (MultiProtocol Label Switching) A standard from the IETF for including routing information in the packets of an IP network. . Editors Note: -- Q2 FY03 conference call to be held at 1:30 p.m. PT on Tuesday, February 4, 2003. Conference call number is 800-369-1988 (United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. ); 312-470-7224 (international). -- Conference call replay available from 4:30 p.m. PT on February 4, 2003 to February 11, 2003 at 800-685-9460 (United States); 402-220-0287 (international). -- Additional information regarding Cisco's financials and corresponding Webcast with visuals designed to guide participants through the call are also available at 1:30 p.m. PT. Prepared remarks will be available after completion of the call. The prepared remarks should be viewed solely in conjunction with the related conference call Webcast. The Webcast will include both the prepared remarks, as well as the question-and-answer session. Please visit our Website at http://www.cisco.com under "About Cisco" in the Investor Relations section. -- Additional information regarding Cisco's Q2 FY03 will be available at http://newsroom.cisco.com, including: -- Customer Highlights & Technology Innovation Fact Sheet -- Summary Q&A with Cisco CEO and CFO See Chief Financial Officer. -- Earnings call audio highlights About Cisco Systems Cisco Systems, Inc., (NASDAQ:CSCO) is the worldwide leader in networking for the Internet. News and information are available at www.cisco.com. This release contains projections and other forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. regarding future events and the future financial performance of Cisco that involve risks and uncertainties. Readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual future events or results. Readers are referred to the documents filed by Cisco with the SEC, specifically the most recent reports on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. , 10-Q and 8-K, each as it may be amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. from time to time, which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements. In addition to these risk factors, other factors that could cause actual results to differ materially include the following: business and economic conditions and growth trends in the networking industry in various geographic regions; global economic conditions; uncertainties in the geopolitical ge·o·pol·i·tics n. (used with a sing. verb) 1. The study of the relationship among politics and geography, demography, and economics, especially with respect to the foreign policy of a nation. 2. a. environment; overall information technology spending; the growth of the Internet and levels of capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. on Internet-based systems; variations in customer demand for products and services, including sales to the service provider market; the ability to successfully restructure existing businesses; the timing of orders and manufacturing lead times; changes in customer order patterns; insufficient, excess or obsolete inventory Obsolete Inventory Term that refers to inventory that is at the end of its product life cycle and has not seen any sales or usage for a set period of time usually determined by the industry. This type of inventory has to be written down and can cause large losses for a company. ; variations in sales channels, product costs, or mix of products sold; the ability to successfully reduce overhead and manage expenses; the ability to successfully acquire businesses and technologies and to successfully integrate and operate these acquired businesses and technologies; increased competition in the networking industry; dependence on the introduction and market acceptance of new product offerings and standards; rapid technological and market change; the trend towards sales of integrated network A network that supports both data and voice and/or different networking protocols. See converged network and new public network. solutions; manufacturing and sourcing risks; Internet infrastructure problems and government regulation of the Internet; international operations Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. ; the timing and amount of employer payroll tax Payroll Tax Tax an employer withholds and/or pays on behalf of their employees based on the wage or salary of the employee. In most countries, including the U.S., both state and federal authorities collect some form of payroll tax. to be paid on employees' gains on stock options exercised; litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. involving patents, intellectual property, antitrust Antitrust The antitrust laws apply to virtually all industries and to every level of business, including manufacturing, transportation, distribution, and marketing. They prohibit a variety of practices that restrain trade. , stockholder and other matters; possible disruption disruption /dis·rup·tion/ (dis-rup´shun) a morphologic defect resulting from the extrinsic breakdown of, or interference with, a developmental process. in commercial activities occasioned by terrorist activity and armed conflict, such as changes in logistics and security arrangements, and reduced end-user purchases relative to expectations; exposure to credit risks relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc certain customers and credit exposures in weakened weak·en tr. & intr.v. weak·ened, weak·en·ing, weak·ens To make or become weak or weaker. weak  en·er n. markets; the ability to recruit and retain key personnel; stock price
volatility; financial risk management; and potential volatility in
operating results, among others. The financial information contained in
this release should be read in conjunction with the consolidated
financial statements Consolidated Financial StatementsThe combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge and notes thereto there·to adv. 1. To that, this, or it. 2. Archaic In addition to that; furthermore. thereto Adverb Formal 1. to that or it 2. included in Cisco's most recent reports on Form 10-K and Form 10-Q Form 10-Q See 10-Q. , each as it may be amended from time to time. Cisco's results of operations for the three and six months ended January 25, 2003 are not necessarily indicative of Cisco's operating results for the full fiscal year or any future periods. Any projections in this release are based on limited information currently available to Cisco, which is subject to change. Although any such projections and the factors influencing them will likely change, Cisco will not necessarily update the information, since Cisco is only to provide guidance at certain points during the year. Actual events or results could differ materially and no reader of this release should assume later that the information provided today is still valid. Such information speaks only as of the date of this release. Cisco provides pro forma net income and pro forma net income per share data as additional information for its operating results. These measures are not in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with, or an alternative for, generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting and may be different from pro forma measures used by other companies. Copyright (C) 2003 Cisco Systems, Inc. All rights reserved. Aironet, Catalyst, Cisco, Cisco IOS Cisco IOS (originally Internetwork Operating System) is the software used on the vast majority of Cisco Systems routers and all current Cisco network switches. IOS is a package of routing, switching, internetworking and telecommunications functions tightly integrated with a , Cisco Systems and the Cisco Systems logo are registered trademarks or trademarks of Cisco Systems, Inc. and/or its affiliates in the U.S. and certain other countries. All other trademarks mentioned in this document or Web site are the property of their respective owners. The use of the word partner does not imply a partnership relationship between Cisco and any other company.
Cisco Systems, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per-share amounts)
(Unaudited)
Three Months Ended Six Months Ended
------------------ ----------------
Jan. 25, Jan. 26, Jan. 25, Jan. 26,
2003 2002 2003 2002
--------- --------- -------- --------
NET SALES:
Product $3,891 $4,022 $7,904 $7,678
Services 822 794 1,654 1,586
------- ------- ------- -------
Total net sales 4,713 4,816 9,558 9,264
------- ------- ------- -------
COST OF SALES:
Product 1,144 1,593 2,381 3,093
Services 252 253 502 509
------- ------- ------- -------
Total cost of sales 1,396 1,846 2,883 3,602
------- ------- ------- -------
GROSS MARGIN 3,317 2,970 6,675 5,662
OPERATING EXPENSES:
Research and development 798 822 1,587 1,697
Sales and marketing 972 1,064 2,065 2,150
General and administrative 172 146 323 296
Payroll tax on stock option
exercises - 3 - 6
Amortization of deferred stock-
based compensation 33 46 76 96
Amortization of purchased
intangible assets 78 136 192 282
In-process research and
development - - - 37
------- ------- ------- -------
Total operating expenses 2,053 2,217 4,243 4,564
------- ------- ------- -------
OPERATING INCOME 1,264 753 2,432 1,098
Loss on public equity
investments - - (412) (858)
Interest income 174 233 353 467
Other loss, net (51) (54) (114) (118)
------- ------- ------- -------
INCOME BEFORE PROVISION FOR
INCOME TAXES 1,387 932 2,259 589
Provision for income taxes 396 272 650 197
------- ------- ------- -------
NET INCOME $ 991 $ 660 $1,609 $ 392
======= ======= ======= =======
Net income per share--basic $ 0.14 $ 0.09 $ 0.22 $ 0.05
======= ======= ======= =======
Net income per share--diluted $ 0.14 $ 0.09 $ 0.22 $ 0.05
======= ======= ======= =======
Shares used in per-share
calculation--basic 7,187 7,311 7,217 7,309
======= ======= ======= =======
Shares used in per-share
calculation--diluted 7,286 7,496 7,307 7,480
======= ======= ======= =======
Cisco Systems, Inc.
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per-share amounts)
(Unaudited)
Three Months Ended Six Months Ended
------------------- -----------------
Jan. 25, Jan. 26, Jan. 25, Jan. 26,
2003 2002 2003 2002
--------- --------- --------- --------
NET SALES:
Product $3,891 $4,022 $7,904 $7,678
Services 822 794 1,654 1,586
------- ------- ------- -------
Total net sales 4,713 4,816 9,558 9,264
------- ------- ------- -------
COST OF SALES:
Product 1,144 1,788 2,381 3,578
Services 252 253 502 509
------- ------- ------- -------
Total cost of sales 1,396 2,041 2,883 4,087
------- ------- ------- -------
GROSS MARGIN 3,317 2,775 6,675 5,177
OPERATING EXPENSES:
Research and development 798 822 1,587 1,697
Sales and marketing 972 1,064 2,065 2,150
General and administrative 172 146 323 296
------- ------- ------- -------
Total operating expenses 1,942 2,032 3,975 4,143
------- ------- ------- -------
OPERATING INCOME 1,375 743 2,700 1,034
Interest income 174 233 353 467
Other loss, net (51) (54) (114) (118)
------- ------- ------- -------
INCOME BEFORE PROVISION FOR
INCOME TAXES 1,498 922 2,939 1,383
Provision for income taxes 419 258 822 387
------- ------- ------- -------
NET INCOME $1,079 $ 664 $2,117 $ 996
======= ======= ======= =======
Net income per share--basic $ 0.15 $ 0.09 $ 0.29 $ 0.14
======= ======= ======= =======
Net income per share--diluted $ 0.15 $ 0.09 $ 0.29 $ 0.13
======= ======= ======= =======
Shares used in per-share
calculation--basic 7,187 7,311 7,217 7,309
======= ======= ======= =======
Shares used in per-share
calculation--diluted 7,286 7,496 7,307 7,480
======= ======= ======= =======
A reconciliation between net income on a GAAP
basis and pro forma net income is as follows:
GAAP net income $ 991 $ 660 $1,609 $ 392
In-process research and
development - - - 37
Payroll tax on stock option
exercises - 3 - 6
Amortization of deferred stock-
based compensation 33 46 76 96
Amortization of purchased
intangible assets 78 136 192 282
Loss on public equity
investments - - 412 858
Excess inventory benefit - (195) - (485)
Income tax effect (23) 14 (172) (190)
------- ------- ------- -------
Pro forma net income $1,079 $ 664 $2,117 $ 996
======= ======= ======= =======
Cisco Systems, Inc.
CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)
Jan. 25, July 27,
2003 2002
--------- --------
ASSETS
Current assets:
Cash and cash equivalents $ 5,013 $ 9,484
Short-term investments 4,523 3,172
Accounts receivable, net of allowance for
doubtful accounts of $317 at January 25, 2003
and $335 at July 27, 2002 1,107 1,105
Inventories, net 775 880
Deferred tax assets 2,116 2,030
Lease receivables, net 175 239
Prepaid expenses and other current assets 580 523
-------- --------
Total current assets 14,289 17,433
Investments 11,661 8,800
Property and equipment, net 3,890 4,102
Goodwill 3,717 3,565
Purchased intangible assets, net 606 797
Lease receivables, net 42 39
Other assets 3,141 3,059
-------- --------
TOTAL ASSETS $37,346 $37,795
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 518 $ 470
Income taxes payable 773 579
Accrued compensation 1,251 1,365
Deferred revenue 2,920 3,143
Other accrued liabilities 2,280 2,496
Restructuring liabilities 322 322
-------- --------
Total current liabilities 8,064 8,375
Deferred revenue 817 749
-------- --------
Total liabilities 8,881 9,124
Minority interest 10 15
Shareholders' equity 28,455 28,656
-------- --------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $37,346 $37,795
======== ========
Cisco Systems, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
Six Months Ended
------------------
Jan. 25, Jan. 26,
2003 2002
--------- --------
Cash flows from operating activities:
Net income $1,609 $ 392
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 783 935
Provision for doubtful accounts 76 60
Provision for (benefit from) inventory 10 (3)
Deferred income taxes (103) (445)
Tax benefits from employee stock option plans 11 49
In-process research and development - 25
Net (gains) losses on investments and
provision for losses 509 1,014
Change in operating assets and liabilities:
Accounts receivable (78) 256
Inventories 98 570
Prepaid expenses and other current assets (55) 15
Accounts payable 48 (273)
Income taxes payable (79) 35
Accrued compensation (114) 356
Deferred revenue (155) 623
Other accrued liabilities (134) (110)
Restructuring liabilities - (108)
------- -------
Net cash provided by operating activities 2,426 3,391
------- -------
Cash flows from investing activities:
Purchases of short-term investments (4,312) (2,762)
Proceeds from sales and maturities of short-term
investments 3,877 3,173
Purchases of investments (8,356) (8,441)
Proceeds from sales and maturities of
investments 4,519 5,680
Purchases of restricted investments - (61)
Proceeds from sales and maturities of restricted
investments - 191
Acquisition of property and equipment (341) (482)
Acquisition of businesses, net of cash and cash
equivalents 2 14
Change in lease receivables, net 61 202
Purchases of investments in privately held
companies (88) (37)
Lease deposits - (73)
Purchase of minority interest of Cisco Systems,
K.K. (Japan) (59) (65)
Other 108 (43)
------- -------
Net cash used in investing activities (4,589) (2,704)
------- -------
Cash flows from financing activities:
Issuance of common stock 231 384
Repurchase of common stock (2,552) (601)
Other 13 (6)
------- -------
Net cash used in financing activities (2,308) (223)
------- -------
Net (decrease) increase in cash and cash
equivalents (4,471) 464
Cash and cash equivalents, beginning of period 9,484 4,873
------- -------
Cash and cash equivalents, end of period $5,013 $5,337
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