Cisco Systems Reports Third Quarter Earnings.Business Editors 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)--May 7, 2002 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 Increased 26 Percent Quarter-over-Quarter; Pro Forma Net Income Increased 264 Percent Year-over-Year 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. , Inc., the worldwide leader in networking for the Internet, today reported its third quarter results for the period ending April 27, 2002. 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 third quarter of fiscal 2002 were $4.8 billion, compared to $4.7 billion in net sales for the third quarter of fiscal 2001, an increase of 2%, and compared to $4.8 billion for the second quarter of fiscal 2002. Net income on a 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 (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ) basis for the third quarter of fiscal 2002 was $729 million or $0.10 per share, compared with a net loss of $2.7 billion or $0.37 per share for the third quarter of fiscal 2001 and net income of $660 million or $0.09 per share for the second quarter of fiscal 2002. Pro forma net income, which excludes the effects of acquisition charges, 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. on employee stock option exercises, and certain nonrecurring items, was $838 million or $0.11 per share for the third quarter of fiscal 2002, compared with pro forma net income of $230 million or $0.03 per share for the third quarter of fiscal 2001 and $664 million or $0.09 per share for the second quarter of fiscal 2002. Net sales for the first nine months of fiscal 2002 were $14.1 billion, compared with $18.0 billion for the first nine months of fiscal 2001, a decrease of 22%. Net income on a GAAP basis for the first nine months of fiscal 2002 was $1.1 billion or $0.15 per share, compared with a net loss of $1.0 billion or $0.14 per share for the first nine months of fiscal 2001. Pro forma net income was $1.8 billion or $0.25 per share for the first nine months of fiscal 2002 compared with $2.9 billion or $0.39 per share for the same period of fiscal 2001. "We are very pleased with this quarter's performance, especially our year-to-year profit increase of 264% and quarter-to-quarter increase of 26%," said John Chambers John Chambers could be any of the following people:
Further commenting on Cisco's execution, Chambers added, "From an operational perspective, this quarter was a home run. Our strong results led to gross margins of 63.1%, cash flows of $1.6 billion and inventory turns of 7.5 times, which exceeded our goals. We continue to take market share from our top-ten competitors, with revenue growth of 2% year-over-year versus a drop of 43% for these competitors." Throughout the quarter, Cisco continued its emphasis on achieving profitable market-share gains, with a focus on growing ten percent faster than ten selected North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. competitors. Cisco's market-share momentum included leadership in key market segments such as all areas of routing, LAN switching
LAN switching is a form of packet switching used in local area networks. Switching technologies are crucial to network design, or to that minority of LANs that are used outside the home. , security, voice over IP, IP telephony The two-way transmission of voice over a packet-switched IP network, which is part of the TCP/IP protocol suite. The terms "IP telephony" and "voice over IP" (VoIP) are synonymous. , and enterprise wireless LANs A local area network that transmits over the air typically in the 2.4 GHz or 5 GHz unlicensed frequency band. It does not require line of sight between sender and receiver. Wireless base stations (access points) are wired to an Ethernet network and transmit a radio frequency over an area and virtual private networks (VPNs). Cisco also experienced growth in Layer 3 fixed and modular switching, where customers are transitioning wiring closets The central distribution or servicing point for cables in a network. See MDF and wire center. to more intelligent packet processing to enable quality of service (QoS) and higher levels of security. Cisco attributes these ongoing market-share gains to its continued focus on providing customers with networking technologies and solutions that increase both productivity and profitability, while delivering a solid return on investment. Enterprise Segment In the enterprise market, Cisco provides the framework for enterprise businesses to deploy networking solutions that help enable business resilience resilience (r  ·zilˑ·yens),n , increase employee productivity, and mitigate network security threats. Cisco enterprise customers continue to invest in core switching and routing platforms, as well as key networking technologies including IP telephony, security, and mobility. During the third quarter, Cisco introduced a new Layer 3 switching module for its Catalyst 4000 product line, which delivers a higher level of quality of service (QoS) and security. Cisco announced significant enhancements to and improved performance capabilities of its industry-leading 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 portfolio including the Cisco 7200, 7300, 7400, 7500 and 7600 series of midrange midrange Epidemiology The halfway point or midpoint in a set of observations; for most data, MR is calculated as the sum of the smallest observation and the largest observation, divided by 2; for age data, one is added to the numerator; a midrange is usually routers. Cisco also announced new advanced software capabilities for its industry-leading Cisco PIX History Cisco PIX (Private Internet EXchange) is a firewall originally conceived in March 1994 by John Mayes of Redwood City, California and coded by Brantley Coiles of Athens, Georgia. (R) firewall family with the Cisco PIX 506E and 515 platforms. In the enterprise voice market, Cisco added new features and functions to the Cisco IP Contact Center solution including new agent and supervisor desktops. New enterprise customers deploying Cisco's next-generation 10-Gigabit Ethernet solutions included Curtin University of Technology in Australia, Kyoto University Kyoto University (京都大学 Kyōto daigaku in Japan, and Arkansas State University Arkansas State University, at Jonesboro; coeducational; chartered 1909; named State Agricultural and Mechanical College, 1925–33. In 1933 the school became Arkansas State College, and in 1967 it achieved university status and adopted its present name. in the 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. . Cisco also announced new enterprise voice solution customers including Research Triangle Institute The Research Triangle Institute (RTI) is a non-profit research organization based in the Research Triangle Park (RTP) of North Carolina. RTI is the oldest tenant of this major research park, and the sister organization to the Research Triangle Foundation. (RTI RTI - Return from interrupt ) and the Village at Squaw Valley Squaw Valley, valley, NE Calif., in the Sierra Nevada Mts., NW of Lake Tahoe. A well-known ski and winter recreational resort, it was the site of the 1960 Winter Olympics. Ski lifts and trails are on Squaw Peak (8,960 ft/2,731 m high). , USA. New enterprise customers deploying Cisco security solutions included Lockwood Green and Centex Mortgage. Service Provider Segment Cisco service provider customers remain focused on decreasing operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. and increasing top line revenue through the convergence of disparate networks, services and operational support systems (OSS Oss (ôs), city (1994 pop. 62,141), North Brabant prov., S Netherlands; chartered 1399. It is a significant industrial center. Manufactures include meat products, chemicals, pharmaceuticals, electrical equipment, and metalware. ). During the quarter, Cisco continued to work with service providers to identify and market new business network services such as VPNs, metropolitan area access, and managed IP telephony and security. For example, Case Western Reserve University signed a multi-million dollar agreement with Sprint, which will use Cisco infrastructure, to build one of the fastest LANs in the world. New customers that selected Multiprotocol Label Switching (networking) Multiprotocol Label Switching - (MPLS) A packet switching protocol developed by the IETF. Initially developed to improve switching speed, other benefits are now seen as being more important. (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. ) solutions based on Cisco software and hardware technologies include more than 100 leading service providers such as Bell Canada Bell Canada Enterprises (TSX: BCE, NYSE: BCE), legally BCE Inc., is a major Canadian telecommunications company. Through its subsidiaries including Bell Canada, Bell Aliant, Northwestel, Télébec, and NorthernTel, it is the incumbent local exchange carrier for , BT Ignite, France Telecom, 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>. , Infonet Services, KDDI, Japan Telecom, and NTT NTT Nippon Telegraph and Telephone Corporation NTT New Technology Telescope NTT National Technology Transfer, Inc NTT Name That Tune (TV game show) NTT National Tree Trust NTT Number Theoretic Transform Communications. MPLS is key to enabling converged networking The integration of the telephone system with IP-based data networks. See softswitch. (networking) converged network - A single network that can carry voice, video and data. infrastructures for the delivery of new IP services. In addition, AT&T announced deployment of Cisco optical solutions for its nationwide intelligent optical network, further underscoring Cisco's leadership in the metro optical segment. Finally, Cisco experienced continued interest in its metro optical strategy with new deployments such as Grange Net in Australia, and Government of Alberta's SuperNet project and CANARIE CANARIE Canadian Network for the Advancement of Research Industry and Education CANARIE Canada Network for the Advancement of Research Industry and Education in Canada, which adopted the Cisco ONS ONS Office for National Statistics (UK) ONS One Night Stand ONS Onslaught (Unreal Tournament 2004) ONS Oncology Nursing Society ONS Object Naming Service ONS Offshore Northern Seas 15454 platform. During the quarter, Cisco enhanced its leadership in the service provider cable marketplace. The Cisco uBR10012 Cable Modem Termination System A cable modem termination system or CMTS is equipment typically found in a cable company's headend, or at cable company hubsite and is used to provide high speed data services, such as cable internet or Voice over IP, to cable subscribers. (CMTS (Cable Modem Termination System) A computerized device that enables cable modems to send and receive packets over the Internet. It inserts IP packets from the Internet into MPEG frames and transmits them to the cable modems via an RF signal. ) and uBR7246VXR VXR Vauxhall Racing Universal Broadband Router A device that provides access to the Internet for multiple computers. It typically includes a network switch with four or more Ethernet ports for wired connections to desktop and laptop computers. "Wireless" broadband routers include an 802.11g access point. received qualification for Data-Over-Cable Service Interface Specification (DOCSIS (Data Over Cable Service Interface Specification) A cable modem standard from the CableLabs research consortium (www.cablelabs.com), which provides equipment certification for interoperability. ) 1.1, making Cisco the only company currently with multiple Layer 3 DOCSIS 1.1 qualified CMTS systems. The Cisco uBR7246VXR is also the only CMTS currently included in the advanced interoperability The capability of two or more hardware devices or two or more software routines to work harmoniously together. For example, in an Ethernet network, display adapters, hubs, switches and routers from different vendors must conform to the Ethernet standard and interoperate with each other. test network, which consists of vendors with the most advanced implementations of PacketCable specifications and is used for system interoperability testing. Cisco also introduced new Session Initiation Protocol (protocol) Session Initiation Protocol - (SIP) A very simple text-based application-layer control protocol. It creates, modifies, and terminates sessions with one or more participants. Such sessions include Internet telephony and multimedia conferences. It is described in RFC 2543. (SIP)-enabled voice-over-IP solutions. Commercial Segment Cisco continued to meet the unique requirements of small and medium-sized business customers (SMBs) during the quarter with expanded programs to help educate and build demand for the value of networking technology and by delivering innovative new networking solutions including wireless access products, switches, and integrated communication systems. Cisco introduced 14 new access routers See edge router and remote access router. designed to extend network intelligence including security, availability, and QoS to the enterprise branch office and remote worker. Cisco also announced the Cisco Aironet(R) 1200 Series dual radio wireless LAN access point supporting both IEEE (Institute of Electrical and Electronics Engineers, New York, www.ieee.org) A membership organization that includes engineers, scientists and students in electronics and allied fields. 802.11b and the 5-GHz IEEE 802.11a radios as they become available. The Cisco Internet Business Roadmap initiative has been made available to thousands of resellers of Cisco products, helping them establish networking relevance for e-business applications. In addition, the Cisco Mobile Office initiative added several new customer venues offering high-speed access to their customers including Airpath Wireless (WLAN See wireless LAN. WLAN - wireless local area network at AirTran Airways AirTran Airways is a low-cost airline that is a Delaware corporation with headquarters in Orlando, Florida, USA and is a subsidiary of AirTran Holdings. AirTran operates over 750 daily flights throughout the eastern USA and the Midwest, including over 270 daily departures from boarding gates); Minneapolis/St. Paul Airport (WLAN throughout the Lindbergh Terminal), Gaylord Entertainment (high-speed access throughout its Gaylord Palms Resort and Convention Center in Kissimmee, St. Cloud, Florida St. Cloud is a city in Osceola County, Florida, United States. The population was 20,074 at the 2000 census. As of 2006, the population recorded by the U.S. Census Bureau is 24,249 [1]. St. ); and Lufthansa Airlines (enabling high-speed, Ethernet access to passenger seats on airplanes). "Today's announcement of an 8.6% productivity gain for the United States in the first quarter underscores our strong belief that our customers will invest in those technologies that deliver productivity results," continued John Chambers. "We've grown our productivity by 20 percent over the last four quarters, with about half of it coming from our use of Internet business solutions, and we believe that the Internet will be a prime factor in gains of 5 to 10% a year for companies and 3 to 5% a year for countries." Editors Note: -- Q3 conference call to be held at 1:45 p.m. PDT on Tuesday, May 7; conference call number is 800-779-9040 (domestic) and 712-257-3767 (international) -- For additional information regarding Cisco's financials and to participate in Cisco's conference call at 1:45 p.m. PDT, please visit our investor relations site at http://www.cisco.com/go/inves tors -- Conference call replay available from 5/7/02 at 4:30 p.m. through 5/14/02 at 800-876-4361 for domestic callers and 402-280-9920 for international callers. -- Additional information regarding Cisco's Q3 earnings is available at http://newsroom.cisco.com About Cisco Systems Cisco Systems, Inc., (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : CSCO CSCO Cisco Systems Incorporated (stock symbol) CSCO Chief Supply Chain Officer ) 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 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; 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 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 nine months ended April 27, 2002 are not necessarily indicative of Cisco's operating results for the full fiscal year or any future periods. 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 and may be different from pro forma measures used by other companies. 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 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 Nine Months Ended
--------------------- ---------------------
April 27, April 28, April 27, April 28,
2002 2001 2002 2001
-------- -------- -------- --------
NET SALES:
Product $ 3,993 $ 4,007 $ 11,671 $ 15,982
Service 829 721 2,415 2,013
-------- -------- -------- --------
Total net sales 4,822 4,728 14,086 17,995
-------- -------- -------- --------
COST OF SALES:
Product 1,515 4,131 4,608 8,563
Service 239 269 748 796
-------- -------- -------- --------
Total cost
of sales 1,754 4,400 5,356 9,359
-------- -------- -------- --------
GROSS MARGIN 3,068 328 8,730 8,636
OPERATING EXPENSES:
Research and
development 807 970 2,504 2,885
Sales and marketing 1,057 1,333 3,207 4,102
General and
administrative 163 191 459 578
Restructuring costs
and other special
charges -- 1,170 -- 1,170
Payroll tax on
stock option exercises 1 10 7 50
Amortization of deferred
stock-based compensation 37 70 133 106
Amortization of goodwill -- 181 -- 494
Amortization of purchased
intangible assets 129 95 411 263
In-process research
and development -- 109 37 855
-------- -------- -------- --------
Total operating
expenses 2,194 4,129 6,758 10,503
-------- -------- -------- --------
OPERATING
INCOME (LOSS) 874 (3,801) 1,972 (1,867)
Net gains (losses)
on investments -- -- (858) 190
Interest and other
income, net 150 236 499 741
-------- -------- -------- --------
INCOME (LOSS) BEFORE
PROVISION FOR
(BENEFIT FROM)
INCOME TAXES 1,024 (3,565) 1,613 (936)
Provision for
(benefit from)
income taxes 295 (872) 492 85
-------- -------- -------- --------
NET INCOME (LOSS) $ 729 $ (2,693) $ 1,121 $ (1,021)
======== ======== ======== ========
Net income (loss)
per share--basic $ 0.10 $ (0.37) $ 0.15 $ (0.14)
======== ======== ======== ========
Net income (loss)
per share--diluted (1) $ 0.10 $ (0.37) $ 0.15 $ (0.14)
======== ======== ======== ========
Shares used in
per-share
calculation--basic 7,306 7,251 7,310 7,170
======== ======== ======== ========
Shares used in
per-share
calculation--
diluted (1) 7,454 7,251 7,473 7,170
======== ======== ======== ========
Note 1: Diluted net loss per share for the three and nine months ended
April 28, 2001 is computed using the weighted-average number of common
shares outstanding during the period and excludes common-equivalent
shares, as their effect is anti-dilutive.
Cisco Systems, Inc.
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(See pro forma adjustments listed in table below)
(In millions, except per-share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
--------------------- ---------------------
April 27, April 28, April 27, April 28,
2002 2001 2002 2001
-------- -------- -------- --------
NET SALES:
Product $ 3,993 $ 4,007 $ 11,671 $ 15,982
Service 829 721 2,415 2,013
-------- -------- -------- --------
Total net sales 4,822 4,728 14,086 17,995
-------- -------- -------- --------
COST OF SALES:
Product 1,542 1,882 5,120 6,314
Service 239 269 748 796
-------- -------- -------- --------
Total cost
of sales 1,781 2,151 5,868 7,110
-------- -------- -------- --------
GROSS MARGIN 3,041 2,577 8,218 10,885
OPERATING EXPENSES:
Research and
development 807 970 2,504 2,885
Sales and marketing 1,057 1,333 3,207 4,102
General and
administrative 163 191 459 578
-------- -------- -------- --------
Total operating
expenses 2,027 2,494 6,170 7,565
-------- -------- -------- --------
OPERATING INCOME 1,014 83 2,048 3,320
Interest and other
income, net 150 236 499 741
-------- -------- -------- --------
INCOME BEFORE PROVISION
FOR INCOME TAXES 1,164 319 2,547 4,061
Provision for
income taxes 326 89 713 1,138
-------- -------- -------- --------
NET INCOME $ 838 $ 230 $ 1,834 $ 2,923
======== ======== ======== ========
Net income per
share--basic $ 0.11 $ 0.03 $ 0.25 $ 0.41
======== ======== ======== ========
Net income per
share--diluted $ 0.11 $ 0.03 $ 0.25 $ 0.39
======== ======== ======== ========
Shares used in
per-share
calculation--basic 7,306 7,251 7,310 7,170
======== ======== ======== ========
Shares used in
per-share
calculation--diluted 7,454 7,486 7,473 7,552
======== ======== ======== ========
The above pro forma
amounts have been
adjusted to exclude
the following items:
In-process research
and development $ -- $ 109 $ 37 $ 855
Payroll tax on
employee stock
option exercises 1 10 7 50
Amortization of
deferred stock-based
compensation 37 70 133 106
Amortization of goodwill -- 181 -- 494
Amortization of purchased
intangible assets 129 95 411 263
Net (gains) losses
on investments -- -- 858 (190)
Restructuring costs
and other special charges -- 1,170 -- 1,170
Excess inventory
(benefit) charge (27) 2,249 (512) 2,249
Income tax effect (31) (961) (221) (1,053)
-------- -------- -------- --------
$ 109 $ 2,923 $ 713 $ 3,944
======== ======== ======== ========
Cisco Systems, Inc.
CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)
April 27, July 28,
2002 2001
-------- --------
ASSETS
Current assets:
Cash and cash equivalents $ 6,493 $ 4,873
Short-term investments 2,478 2,034
Accounts receivable, net of allowance
for doubtful accounts of $346
at April 27, 2002 and $288 at
July 28, 2001 990 1,466
Inventories, net 869 1,684
Deferred tax assets 2,010 1,809
Lease receivables, net 272 405
Prepaid expenses and other
current assets 498 564
-------- --------
Total current assets 13,610 12,835
Investments 12,090 10,346
Restricted investments -- 1,264
Property and equipment, net 4,002 2,591
Goodwill 3,350 3,189
Purchased intangible assets, net 1,090 1,470
Lease receivables, net 42 253
Other assets 2,942 3,290
-------- --------
TOTAL ASSETS $ 37,126 $ 35,238
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 436 $ 644
Income taxes payable 292 241
Accrued compensation 1,266 1,058
Deferred revenue 3,122 2,470
Other accrued liabilities 2,523 2,553
Restructuring liabilities 341 386
-------- --------
Total current liabilities 7,980 7,352
Deferred revenue 711 744
-------- --------
Total liabilities 8,691 8,096
Minority interest 16 22
Shareholders' equity 28,419 27,120
-------- --------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 37,126 $ 35,238
======== ========
Cisco Systems, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
Nine Months Ended
-----------------------
April 27, April 28,
2002 2001
-------- --------
Cash flows from operating activities:
Net income (loss) $ 1,121 $ (1,021)
Adjustments to reconcile net
income (loss) to net cash provided
by operating activities:
Depreciation and amortization 1,353 1,615
Provision for doubtful accounts 91 123
Provision for inventory 109 2,697
Deferred income taxes (373) (1,431)
Tax benefits from employee
stock option plans 51 705
In-process research and development 25 739
Net (gains) losses on investments and
provision for losses 1,076 43
Restructuring costs and
other special charges -- 501
Change in operating assets
and liabilities:
Accounts receivable 385 197
Inventories 665 (1,730)
Prepaid expenses and other
current assets (20) (66)
Accounts payable (208) (85)
Income taxes payable 51 786
Accrued compensation 208 (108)
Deferred revenue 619 1,000
Other accrued liabilities (130) 74
Restructuring liabilities (45) 668
-------- --------
Net cash provided by
operating activities 4,978 4,707
-------- --------
Cash flows from investing activities:
Purchases of short-term investments (4,166) (2,870)
Proceeds from sales and maturities of
short-term investments 4,702 3,459
Purchases of investments (13,600) (14,613)
Proceeds from sales and
maturities of investments 10,658 12,732
Purchases of restricted investments (291) (758)
Proceeds from sales and maturities of
restricted investments 1,471 941
Acquisition of property and equipment (2,243) (1,814)
Acquisition of businesses, net of
cash and cash equivalents 14 (13)
Change in lease receivables, net 344 224
Purchases of investments in privately
held companies (52) (960)
Lease deposits 320 (320)
Purchase of minority interest of
Cisco Systems, K.K. (Japan) (91) (365)
Other 98 (573)
-------- --------
Net cash used in investing
activities (2,836) (4,930)
-------- --------
Cash flows from financing activities:
Issuance of common stock 431 1,106
Repurchase of common stock (952) --
Other (1) (15)
-------- --------
Net cash (used in) provided
by financing activities (522) 1,091
-------- --------
Net increase in cash and
cash equivalents 1,620 868
Cash and cash equivalents,
beginning of period 4,873 4,234
-------- --------
Cash and cash equivalents, end of period $ 6,493 $ 5,102
======== ========
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