- Q1 Net Sales: $6.5 billion (9.7% increase year over year)
- Q1 Net Income: $1.3 billion GAAP (includes a first time stock-based compensation expense of $228 million, net of tax) compared with $1.1 billion for Q1 FY'05, including pro forma stock-based compensation expense; $1.6 billion non-GAAP (pro forma) compared with $1.5 billion for Q1 FY'05
- Q1 Earnings Per Share: $0.20 GAAP (includes a first time stock-based compensation expense of $0.04 ) compared with $0.17 for Q1 FY'05, including pro forma stock-based compensation expense; $0.25 non-GAAP (pro forma) compared with $0.21 for Q1 FY'05
SAN JOSE, Calif. - November 9, 2005 - Cisco Systems, Inc., the worldwide leader in networking for the Internet, today reported its first quarter results for the period ended October 29, 2005.
Net sales for the first quarter of fiscal 2006 were $6.5 billion, compared with $6.0 billion for the first quarter of fiscal 2005, an increase of 9.7 percent, and compared with $6.6 billion for the fourth quarter of fiscal 2005, a decrease of 0.5 percent.
Net income for the first quarter of fiscal 2006, on a generally accepted accounting principles (GAAP) basis, was $1.3 billion or $0.20 per share which includes stock-based compensation expense of $228 million, net of tax, or $0.04 per share, due to the implementation of SFAS 123(R). Net income prior to fiscal 2006 did not include stock-based compensation expense. Including the pro forma stock-based compensation expense previously disclosed in Cisco's financial statements footnotes, net income for the first quarter of fiscal 2005 would have been $1.1 billion or $0.17 per share and net income for the fourth quarter of fiscal 2005 would have been $1.3 billion or $0.20 per share. Please refer to the table on page 8 for a quarter-to-quarter comparison of net income including the effect of stock-based compensation expense. Net income on a GAAP basis, which does not include the effect of stock-based compensation expense, for the first quarter of fiscal 2005 was $1.4 billion or $0.21 per share and for the fourth quarter of fiscal 2005 was $1.5 billion or $0.24 per share.
Non-GAAP (pro forma) net income for the first quarter of fiscal 2006 was $1.6 billion or $0.25 per share, compared with $1.5 billion or $0.21 per share for the first quarter of fiscal 2005, and compared with $1.6 billion or $0.25 per share for the fourth quarter of fiscal 2005. A reconciliation between net income on a GAAP basis and non-GAAP (pro forma) net income is provided in a table on page 8.
During the first quarter of fiscal 2006, Cisco completed the acquisitions of KiSS Technology A/S, Nemo Systems, Inc. and Sheer Networks, Inc.
"Q1 was a solid quarter for Cisco, with balanced execution across most of our geographies, market segments and product categories," said John Chambers, president and CEO, Cisco Systems, Inc. "We are especially pleased with the improving business momentum in the U.S. and Asia Pacific, the strength of our product families and the accelerated growth of the commercial marketplace, which has become our fastest growing customer segment."
Chambers continued, "Cisco's long-term product architecture strategy is taking hold. We are seeing an increased trend toward customers choosing integrated networking solutions that combine our core products with advanced technologies. By coupling routing and switching with our advanced technologies such as security, enterprise IP communications and wireless, Cisco's architectural approach is allowing customers to more effectively scale their IT operations. Going forward, we will continue to foster a culture of innovation, incorporating internal development, acquisitions and partnerships to anticipate the evolving needs of customers and extend our core competitive advantage."
Cisco will discuss first quarter 2006 results and business outlook on a conference call and Webcast at 1:30 p.m. Pacific Time today. Call information and related charts are available at http://investor.cisco.com.
Financial Highlights
- Cash flows from operations were $1.4 billion for the first quarter of fiscal 2006, compared with $1.5 billion for the first quarter of fiscal 2005, and compared with $2.4 billion for the fourth quarter of fiscal 2005.
- Cash and cash equivalents and investments were $13.5 billion at the end of the first quarter of fiscal 2006, compared with $16.1 billion at the end of the fourth quarter of fiscal 2005.
- During the first quarter of fiscal 2006, Cisco repurchased 194 million shares of common stock at an average price of $18.03 per share for an aggregate purchase price of $3.5 billion. As of October 29, 2005, Cisco had repurchased and retired 1.7 billion shares of Cisco common stock at an average price of $18.14 per share for an aggregate purchase price of approximately $30.7 billion since the inception of the stock repurchase program.
- Days sales outstanding (DSO) in accounts receivable at the end of the first quarter of fiscal 2006 were 33 days, compared with 31 days at the end of the fourth quarter of fiscal 2005.
- Inventory turns on a GAAP basis were 6.5 in the first quarter of fiscal 2006, compared with 6.6 in the fourth quarter of fiscal 2005. Non-GAAP (pro forma) inventory turns were 6.4 in the first quarter of fiscal 2006.
"Our performance this quarter demonstrated once again that our focus and execution on long-term financial priorities translates to sustained profitable growth and a strong competitive advantage," said Dennis Powell, chief financial officer, Cisco Systems. "Non-GAAP (pro forma) quarterly earnings per share of $0.25, net income of $1.6 billion, and 68.5 percent product gross margins are all strong indicators of the momentum we're achieving in our business, while we continue to ramp resources for continued execution throughout the fiscal year."
Business Highlights
- Intel Corporation and Cisco expanded their existing alliance in an effort to enhance wireless LAN reliability, deliver higher-quality services and allow businesses to use computers and the network as a combined defense against security threats.
- MCI, Inc. is expanding its managed IP Communications offerings to the business market with the launch of Managed IP PBX, which is based on Cisco technology and includes the Cisco CallManager product suite.
- SOFTBANK BB Corporation expanded its Cisco IP Next-Generation Network (IP NGN) architecture with the Cisco Carrier Routing System (CRS-1) and Cisco Catalyst® 6500 Series switches to enable nationwide expansion of advanced video services, including broadband program broadcasting and video on demand (VoD).
- Linksys, a division of Cisco Systems, and Skype teamed to launch a new cordless handset designed to enable users to place Skype Internet phone calls while sitting at home or at the office.
- Cisco introduced the company's newest emerging technology, the Cisco Internet Protocol Interoperability and Collaboration System (IPICS), designed to integrate disparate push-to-talk radio systems with other communication resources such as voice, video and data devices.
- Cisco announced a $40 million commitment in a multiphase, three-year education "21S Initiative" in the Gulf Coast region, which will begin in Mississippi, for reconstructing and improving schools.
- Cisco announced its investment initiative plans for India, totaling up to US$1.1 billion. This announcement highlights the growing importance of the Indian market in the global economy.
- Cisco reached a major milestone in the IP Communications market with the sale of its 6-millionth Internet Protocol (IP) phone worldwide.
- Cisco introduced the Cisco Business Communications Solution, specifically designed for small to medium businesses (SMBs) and mid-market companies through voice and switching products.
- Underscoring its focus on social responsibility, Cisco won the prestigious State Department Award for Corporate Excellence (ACE) for its education program in Jordan designed to teach young people information-technology skills. It also issued its first-ever Corporate Social Responsibility (CSR) report, a summary of the company's responsible business practices and social investment programs for fiscal years 2004 and 2005.
Editor's Note:
- Q1 FY'06 conference call to discuss Cisco's results along with its outlook for Q2 FY'06 to be held at 1:30 p.m. Pacific Time, Wednesday, November 9, 2005. Conference call number is 888-848-6507 (United States); 212-519-0847 (international).
- Conference call replay will be available from 4:30 p.m. Pacific Time, November 9, 2005 to 4:30 p.m. Pacific Time, November 16, 2005 at 866-357-4205 (United States); 203-369-0122 (international). The replay is also available from November 9, 2005 through January 20, 2006 on the Cisco Investor Relations Website at http://www.cisco.com/go/investors.
- Additional information regarding Cisco's financials as well as a Webcast of the conference call with visuals designed to guide participants through the call will be available at 1:30 p.m. Pacific Time, November 9, 2005. Text of the conference call's prepared remarks will be available within 24 hours of completion of the call. The Webcast will include both the prepared remarks and the question-and-answer session. This information, along with GAAP reconciliation information, will be available on the Cisco Investor Relations Website at http://www.cisco.com/go/investors.
- A Q&A with Cisco's CEO and CFO on Q1 FY'06 results will be available at http://newsroom.cisco.com.
About Cisco Systems
Cisco Systems, Inc. (NASDAQ: CSCO) is the worldwide leader in networking for the Internet. Information about Cisco can be found at http://www.cisco.com. For ongoing news, please go to http://newsroom.cisco.com.
This release may be deemed to contain forward-looking statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, among other things, statements 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 due to a variety of factors, including: business and economic conditions and growth trends in the networking industry and in various geographic regions; global economic conditions and uncertainties in the geopolitical environment; overall information technology spending; the growth of the Internet and levels of capital spending on Internet-based systems; variations in customer demand for products and services, including sales to the service provider market; the timing of orders and manufacturing and customer lead times; changes in customer order patterns or customer mix; insufficient, excess or obsolete inventory; variability of component costs; variations in sales channels, product costs or mix of products sold; our 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; manufacturing and sourcing risks; product defects and returns; litigation involving patents, intellectual property, antitrust, shareholder and other matters; natural catastrophic events; achievement of the benefits anticipated from our investments in sales and engineering activities; our ability to recruit and retain key personnel; our ability to manage financial risk; currency fluctuations and other international factors; potential volatility in operating results and other factors listed in Cisco's most recent reports on Form 10-K, 10-Q and 8-K. The financial information contained in this release should be read in conjunction with the consolidated financial statements and notes thereto included in Cisco's most recent reports on Form 10-K and Form 10-Q, each as it may be amended from time to time. Cisco's results of operations for the three months ended October 29, 2005 are not necessarily indicative of Cisco's operating results for 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 will only provide guidance at certain points during the year. Such information speaks only as of the date of this release.
This release includes non-GAAP (pro forma) net income, non-GAAP (pro forma) net income per share data, non-GAAP (pro forma) inventory turns, non-GAAP (pro forma) gross margin, and other non-GAAP line items from the Consolidated Statements of Operations, including cost of sales information, gross margin, operating expenses (including research and development, sales and marketing, and general and administrative expenses), other income (loss), net, and provision for income taxes. These measures are not in accordance with, or an alternative for, generally accepted accounting principles and may be different from non-GAAP (pro forma) measures used by other companies. Cisco believes that the presentation of non-GAAP (pro forma) net income, non-GAAP (pro forma) net income per share data, non-GAAP (pro forma) inventory turns and non-GAAP (pro forma) gross margin, when shown in conjunction with the corresponding GAAP measures, provides useful information to management and investors regarding financial and business trends relating to its financial condition and results of operations. Cisco further believes that where the adjustments used in calculating non-GAAP (pro forma) net income and non-GAAP (pro forma) net income per share are based on specific, identified charges that impact different line items in the statements of operations (including cost of sales, research and development, sales and marketing, and general and administrative expense), that it is useful to investors to know how these specific line items in the statements of operations are affected by these adjustments. In particular, as Cisco begins to apply SFAS 123(R), it believes that it is useful to investors to understand how the expenses associated with the application of SFAS 123(R) are reflected on its statements of operations. For its internal budgets, Cisco's management uses financial statements that do not include stock-based compensation expense, payroll tax on stock option exercises, in-process research and development, compensation expense related to acquisitions and investments, amortization of purchased intangible assets, gain (loss) on publicly traded equity securities and the income tax effects of the foregoing on cost of sales, research and development, sales and marketing and general and administrative expenses, as applicable. Cisco's management also uses the foregoing non-GAAP measures, in addition to the corresponding GAAP measures, in reviewing the financial results of Cisco.
Copyright© 2005 Cisco Systems, Inc. All rights reserved. Cisco, Cisco Systems, the Cisco Systems logo, Catalyst and Linksys 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 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 | |||
| October 29, 2005 | October 30, 2004 | ||
| NET SALES: | |||
| Product | $ 5,491 | $ 5,033 | |
| Service | 1,059 | 938 | |
| Total net sales | 6,550 | 5,971 | |
| COST OF SALES: | |||
| Product (includes stock-based compensation expense under SFAS 123(R) of $19 for Q1 FY'06; $0 for Q1 FY'05) | 1,751 | 1,646 | |
| Service (includes stock-based compensation expense under SFAS 123(R) of $34 for Q1 FY'06; $0 for Q1 FY'05) | 389 | 310 | |
| Total cost of sales (includes stock-based compensation expense under SFAS 123(R) of $53 for Q1 FY'06; $0 for Q1 FY'05) | 2,140 | 1,956 | |
| GROSS MARGIN | 4,410 | 4,015 | |
| OPERATING EXPENSES: | |||
| Research and development (includes stock-based compensation expense under SFAS 123(R) of $103 for Q1 FY'06; $0 for Q1 FY'05) | 996 | 805 | |
| Sales and marketing (includes stock-based compensation expense under SFAS 123(R) of $127 for Q1 FY'06; $0 for Q1 FY'05) | 1,453 | 1,120 | |
| General and administrative (includes stock-based compensation expense under SFAS 123(R) of $34 for Q1 FY'06; $0 for Q1 FY'05) | 278 | 230 | |
| Amortization of purchased intangible assets | 59 | 60 | |
| In-process research and development | 2 | 12 | |
| Total operating expenses (includes stock-based compensation expense under SFAS 123(R) of $264 for Q1 FY'06; $0 for Q1 FY'05) | 2,788 | 2,227 | |
| OPERATING INCOME | 1,622 | 1,788 | |
| Interest income | 154 | 130 | |
| Other income (loss), net | (17 ) | 40 | |
| Interest and other income (loss), net | 137 | 170 | |
| INCOME BEFORE PROVISION FOR INCOME TAXES | 1,759 | 1,958 | |
| Provision for income taxes (includes tax benefit for stock based compensation expense under SFAS 123(R) of $89 for Q1 FY'06: $0 for Q1 FY'05) | 498 | 562 | |
| NET INCOME (see note below) | $ 1,261 | $ 1,396 | |
| Net income per share (see note below): | |||
| Basic | $ 0.20 | $ 0.21 | |
| Diluted | $ 0.20 | $ 0.21 | |
| Shares used in per-share calculation: | |||
| Basic | 6,245 | 6,635 | |
| Diluted | 6,340 | 6,773 | |
| Note: Net income for Q1 FY'06 includes stock-based compensation expense of $228, net of tax, due to the implementation of SFAS 123(R). Net income for the first quarter of fiscal 2005 did not include stock-based compensation expense under SFAS 123. The table below reflects net income and diluted net income per share for the first quarter of fiscal 2006 compared with first quarter of fiscal 2005 including the pro forma stock-based compensation expense as follows: | |||
|
Three Months Ended
|
|||
|
October 29, 2005
|
October 30, 2004
|
||
| Net income - as reported for Q1 FY'05 | $ 1,396 | ||
| Stock-based compensation expense, net of tax - as reported for Q1 FY'05 | $ (276) | ||
| Net income, including the effect of stock-based compensation expense | $ 1,261 | $ 1,120 | |
| Diluted net income per share - as reported for Q1 FY'05 | $ 0.21 | ||
| Stock-based compensation expense, net of tax, per share - as reported for Q1 FY'05 | $ (0.04) | ||
| Diluted net income per share, including the effect of stock-based compensation expense | $ 0.20 | $ 0.17 | |
Cisco Systems, Inc.
| NON-GAAP (PRO FORMA) CONSOLIDATED STATEMENTS OF OPERATIONS |
(Unaudited)
| Three Months Ended | |||
| October 29, 2005 |
October 30, 2004 | ||
| NET SALES: | |||
| Product | $ 5,491 | $ 5,033 | |
| Service | 1,059 | 938 | |
| Total net sales | 6,550 | 5,971 | |
| COST OF SALES: | |||
| Product (a) | 1,732 | 1,646 | |
| Service (a) | 355 | 310 | |
| Total cost of sales (a) | 2,087 | 1,956 | |
| GROSS MARGIN (a) | 4,463 | 4,015 | |
| OPERATING EXPENSES: | |||
| Research and development (a) - (c) | 859 | 787 | |
| Sales and marketing (a) - (c) | 1,320 | 1,102 | |
| General and administrative (a) - (c) | 242 | 225 | |
| Total operating expenses (a) - (e) | 2,421 | 2,114 | |
| OPERATING INCOME (a) - (e) | 2,042 | 1,901 | |
| Interest income | 154 | 130 | |
| Other income (loss), net (f) | (17) | (13 ) | |
| Interest and other income (loss), net (f) | 137 | 117 | |
| INCOME BEFORE PROVISION FOR INCOME TAXES (a) - (f) | 2,179 | 2,018 | |
| Provision for income taxes (g) | 610 | 565 | |
| NET INCOME (a) - (g) | $ 1,569 | $ 1,453 | |
| Net income per share: | |||
| Basic (a) - (g) | $ 0.25 | $ 0.22 | |
| Diluted (a) - (g) | $ 0.25 | $ 0.21 | |
| Shares used in per-share calculation: | |||
| Basic | 6,245 | 6,635 | |
| Diluted | 6,340 | 6,773 | |
| Note: A reconciliation between net income on a GAAP basis and non-GAAP (pro forma) net income including items (a) - (g) is provided in the RECONCILIATION OF GAAP to NON-GAAP (PRO FORMA) NET INCOME table that follows. | |||
Cisco Systems, Inc.
|
RECONCILIATION OF GAAP to NON-GAAP (PRO FORMA) NET INCOME
|
| Q1 FY'06 | Q4 FY'05 | Q3 FY'05 | Q2 FY'05 |
Q1 FY'05 | |
| GAAP net income | $ 1,261 | $ 1,540 | $ 1,405 | $ 1,400 | $ 1,396 |
| (a) Stock-based compensation expense under SFAS 123 (R) (*) | 317 | - | - | - | - |
| (b) Payroll tax on stock option exercises (*) | 2 | 5 | 3 | 3 | 1 |
| (c) Compensation expense related to acquisitions and investments (*) | 40 | 39 | 47 | 39 | 40 |
| (d) In-process research and development | 2 | 6 | 6 | 2 | 12 |
| (e) Amortization of purchased intangible assets | 59 | 56 | 54 | 57 | 60 |
| (f) (Gain) loss on publicly traded equity securities | - | - | - | - | (53) |
| (g) Income tax effect | (112) | (20) | (19) | (19) | (3) |
| Non-GAAP (pro forma) net income | $ 1,569 | $ 1,626 | $ 1,496 | $ 1,482 | $ 1,453 |
Cisco Systems, Inc.
|
QUARTER-TO-QUARTER COMPARISON OF NET INCOME INCLUDING THE EFFECT OF STOCK-BASED COMPENSATION EXPENSE UNDER SFAS 123(R) and SFAS 123 |
| Q1 FY'06 | Q4 FY'05 | Q3 FY'05 | Q2 FY'05 |
Q1 FY'05 | |
| Net income -- as reported for prior periods (1) | N/A | $ 1,540 | $ 1,405 | $ 1,400 | $ 1,396 |
| Stock-based compensation expense | $ (317) | (363) | (377) | (428) | (460) |
| Tax benefit | $ 89 | 88 | 151 | 171 | 184 |
| Stock-based compensation expense, net of tax (2) | $ (228) | (275) | (226) | (257) | (276) |
| Net income, including the effect of stock-based compensation expense (3) | $ 1,261 | $ 1,265 | $ 1,179 | $ 1,143 | $ 1,120 |
| Diluted net income per share - as reported for prior periods (1) | N/A | $ 0.24 | $ 0.21 | $ 0.21 | $ 0.21 |
| Stock-based compensation expense, net of tax, per share (2) | $ (0.04) | (0.04) | (0.03) | (0.04) | (0.04) |
| Diluted net income per share, including the effect of stock-based compensation expense (3) | $ 0.20 | $ 0.20 | $ 0.18 | $ 0.17 | $ 0.17 |
(1) Net income and net income per share prior to fiscal 2006 did not include stock-based compensation expense under SFAS 123.
(2) Stock-based compensation expense and stock-based compensation expense per share prior to fiscal 2006 is calculated based on SFAS 123 as previously disclosed in Cisco's financial statements footnotes.
(3) Net income and net income per share prior to fiscal 2006 represents pro forma information based on SFAS 123 as previously disclosed in Cisco's financial statements footnotes.
|
CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
| October 29, 2005 |
July 30, 2005 |
|
| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | $ 1,704 | $ 4,742 |
| Investments | 11,786 | 11,313 |
| Accounts receivable, net of allowance for doubtful accounts of $173 at October 29, 2005 and $162 at July 30, 2005 | 2,342 | 2,216 |
| Inventories | 1,318 | 1,297 |
| Deferred tax assets | 1,410 | 1,475 |
| Prepaid expenses and other current assets | 1,193 | 967 |
| Total current assets | 19,753 | 22,010 |
| Property and equipment, net | 3,335 | 3,320 |
| Goodwill | 5,412 | 5,295 |
| Purchased intangible assets, net | 548 | 549 |
| Other assets | 2,707 | 2,709 |
| TOTAL ASSETS | $ 31,755 | |
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||
| Current liabilities: | ||
| Accounts payable | $ 721 | $ 735 |
| Income taxes payable | 1,462 | 1,511 |
| Accrued compensation | 1,193 | 1,317 |
| Deferred revenue | 3,716 | 3,854 |
| Other accrued liabilites | 2,144 | 2,094 |
| Total current liabilities | 9,236 | 9,511 |
| Deferred revenue | 1,078 | 1,188 |
| Total liabilities | 10,314 | 10,699 |
| Minority interest | 4 | 10 |
| Shareholders' equity | 21,437 | 23,174 |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
$ 31,755 | $ 33,883 |
| Note: Long-term investments and the related deferred taxes on unrealized gains and losses on investments as of July 30, 2005 have been reclassified to current assets in order to conform to the current period's presentation. | ||
Cisco Systems, Inc.
| CONSOLIDATED STATEMENTS OF CASH FLOWS |
(In millions)
(Unaudited)
| Three Months Ended | ||
| October 29, 2005 | October 30, 2004 | |
| Cash flows from operating activities: | ||
| Net income | $ 1,261 | $ 1,396 |
| Adjustments to reconcile net income to net cash provided by operating activities: | ||
| Depreciation and amortization | 258 | 251 |
| Stock-based compensation due to the implementation of SFAS 123 (R) | 317 | - |
| Stock-based compensation related to acquisitions and investments | 28 | 40 |
| Provision for doubtful accounts | 11 | - |
| Provision for inventory | 47 | 62 |
| Deferred income taxes | 125 | 74 |
| Tax benefits from employee stock option plans | - | 48 |
| Excess tax benefits from stock-based compensation | (40) | - |
| In-process research and development | 2 | 12 |
| Net (gains) losses and impairment charges on investments | 11 | (44) |
| Change in operating assets and liabilities, net of effects of acquisitions: | ||
| Accounts receivable | (135) | 37 |
| Inventories | (65) | (63) |
| Prepaid expenses and other current assets | (41) | (10) |
| Lease receivables, net | (26) | (52) |
| Accounts payable | (14) | 16 |
| Income taxes payable | 4 | 188 |
| Accrued compensation | (124) | (283) |
| Deferred revenue | (249) | (241) |
| Other accrued liabilities | 32 | 28 |
| Net cash provided by operating activities | 1,402 | 1,459 |
| Cash flows from investing activities: | ||
| Purchases of investments | (7,973) | (5,172) |
| Proceeds from sales and maturities of investments | 7,335 | 6,537 |
| Acquisition of property and equipment | (215) | (159) |
| Acquisition of businesses, net of cash and cash equivalents | (122) | (229) |
| Change in investments in privately held companies | (18) | (48) |
| Purchase of minority interest of Cisco Systems, K.K. (Japan) | (25) | - |
| Other | (105) | 70 |
| Net cash (used in) provided by investing activities | (1,123) | 999 |
| Cash flows from financing activities: | ||
| Issuance of common stock | 136 | 96 |
| Repurchase of common stock | (3,500) | (3,001) |
| Excess tax benefits from stock-based compensation | 40 | - |
| Other | 7 | 34 |
| Net cash used in financing activities | (3,317) | (2,871) |
| Net decrease in cash and cash equivalents | (3,038) | (413) |
| Cash and cash equivalents, beginning of period | 4,742 | 3,722 |
| Cash and cash equivalents, end of period | $ 1,704 | $ 3,309 |
| Note: Net income for Q1 FY'06 includes stock-based compensation expense of $228, net of tax, due to the implementation of SFAS 123(R). Net income for Q1 FY'05 did not include stock-based compensation expense under SFAS 123. Certain reclassifications have been made to prior period balances in order to conform to the current period's presentation. |
||
Cisco Systems, Inc.
| ADDITIONAL FINANCIAL INFORMATION |
(In millions)
(Unaudited)
| October 29, 2005 | July 30, 2005 |
|
| CASH AND CASH EQUIVALENTS AND INVESTMENTS | ||
| Cash and cash equivalents | $ 1,704 | $ 4,742 |
| Fixed income securities | 10,922 | 10,372 |
| Publicly traded equity securities | 864 | 941 |
| Total | $ 13,490 | $ 16,055 |
| INVENTORIES | ||
| Raw materials | $ 98 | $ 82 |
| Work in process | 426 | 431 |
| Finished goods: | ||
|
Distributor inventory and deferred cost of sales
|
411 | 385 |
|
Manufacturing finished goods
|
171 | 184 |
| Total finished goods | 582 | 569 |
| Service-related spares | 172 | 180 |
| Demonstration systems | 40 | 35 |
| Total | $ 1,318 | $ 1,297 |
| PROPERTY AND EQUIPMENT, NET | ||
| Land, buildings, and leasehold improvements | $ 3,524 | $ 3,492 |
| Computer equipment and related software | 1,289 | 1,244 |
| Production, engineering, and other equipment | 3,241 | 3,095 |
| Operating lease assets | 127 | 136 |
| Furniture and fixtures | 357 | 355 |
| 8,538 | 8,322 | |
| Less, accumulated depreciation and amortization | (5,203) | (5,002) |
| Total | $ 3,335 | $ 3,320 |
| LEASE RECEIVABLES, NET (a) | ||
| Current | 261 | 248 |
| Noncurrent | 366 | 353 |
| Total | $ 627 | $ 601 |
| OTHER ASSETS | ||
| Deferred tax assets | $ 1,294 | $ 1,308 |
| Investments in privately held companies | 433 | 421 |
| Income tax receivable | 277 | 277 |
| Lease receivables, net | 366 | 353 |
| Other | 337 | 350 |
| Total | $ 2,707 | $ 2,709 |
| DEFERRED REVENUE | ||
| Service | $ 3,471 | $ 3,618 |
| Product | 1,323 | 1,424 |
| Total | $ 4,794 | $ 5,042 |
| Reported as: | ||
| Current | 3,716 | 3,854 |
| Noncurrent | 1,078 | 1,188 |
| Total | $ 4,794 | $ 5,042 |
| Notes: (a) The current portion of lease receivables, net, is recorded in prepaid expenses and other current assets, and the noncurrent portion is recorded in other assets in the Consolidated Balance Sheets. (b) Certain reclassifications have been made to prior period balances in order to conform to the current period's presentation. |
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