February 6, 2002

Cisco Systems, Inc. today announced that an internal communication from a Cisco executive characterizing Cisco's Q2 FY 2002 financial results in positive terms was prematurely and inadvertently distributed to a large number of Cisco employees after the close of market on February 5. The following Q&A addresses questions regarding this statement.

Q: Cisco put out a brief press release about Q2 results earlier than expected. Why?
A: Cisco communicates our quarterly results to many people. The first general communication is usually the public press release we put out after the market closes on our announcement date that includes complete financial results - which we then discuss further in our regular conference call. We also communicate with employees in a less formal way after we have publicly released the information. Yesterday, some of the information that we intended to share with employees after the public release was released to some employees prematurely. To ensure full and fair disclosure of information that had been so broadly distributed internally, we issued a public release this morning - before our regularly scheduled earnings conference call - which included only the financial information that was prematurely released to some employees. This morning's release did not include other information about our quarter that was not in the communication prematurely sent to some employees. The full public press release and conference call will occur as originally scheduled.

Q: What was the information in the communication that was prematurely released to some employees and that needed to be disclosed?
A: There were two basic pieces of information that were in the internal communication related to the Q2 financials. First, the prematurely released employee communication said that Cisco's booked orders for products only (i.e. not including services) in the quarter were $3.9 billion versus an internal goal of $3.75 billion. Second, the prematurely released employee communication also characterized the quarterly results in positive terms. This employee communication did not include specific information about revenues or earnings or other company financial results for the quarter.

Q: Why not just release the complete financials this morning?
A: The press release and conference call, taken together, are the best way to ensure broad and consistent dissemination of Cisco's complete financial results.

Q. Who received this information and how did this happen?
A: The document was a draft script of a video that a Cisco executive planned to deliver to his worldwide organization later in the week. The communication was inadvertently sent to a group of employees rather than to a single intended recipient.

Q. Are you making public the whole script, or only the portions related to Q2 results? Why?
A: We made public the portions that related to Q2 results so as to be sure that there was full and fair disclosure of that information. The script includes internal information not related to earnings and therefore won't be released.

Q: Your release this morning noted that your reported results exceed the current consensus estimates of earnings per share and revenues for the second quarter of our fiscal year. How much better than expected will Cisco perform?
A: Results of our quarter will be announced in our quarterly earnings press release and quarterly conference call that begins after the market closes.