Exhibit 99.1
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per-share amounts)
(Unaudited)
Three Months Ended | |||||||
October 24, 2009 | October 25, 2008 | ||||||
NET SALES:(1) | |||||||
Product | $ | 7,200 | $ | 8,635 | |||
Service | 1,821 | 1,696 | |||||
Total net sales | 9,021 | 10,331 | |||||
COST OF SALES: | |||||||
Product | 2,486 | 2,981 | |||||
Service | 647 | 669 | |||||
Total cost of sales | 3,133 | 3,650 | |||||
GROSS MARGIN | 5,888 | 6,681 | |||||
OPERATING EXPENSES: | |||||||
Research and development | 1,224 | 1,406 | |||||
Sales and marketing | 1,995 | 2,283 | |||||
General and administrative | 440 | 395 | |||||
Amortization of purchased intangible assets | 105 | 112 | |||||
In-process research and development | — | 3 | |||||
Total operating expenses | 3,764 | 4,199 | |||||
OPERATING INCOME | 2,124 | 2,482 | |||||
Interest income, net | 54 | 195 | |||||
Other income (loss), net | 61 | (72 | ) | ||||
Interest and other income, net | 115 | 123 | |||||
INCOME BEFORE PROVISION FOR INCOME TAXES | 2,239 | 2,605 | |||||
Provision for income taxes | 452 | 404 | |||||
NET INCOME | $ | 1,787 | $ | 2,201 | |||
Net income per share: | |||||||
Basic | $ | 0.31 | $ | 0.37 | |||
Diluted | $ | 0.30 | $ | 0.37 | |||
Shares used in per-share calculation: | |||||||
Basic | 5,767 | 5,881 | |||||
Diluted | 5,871 | 5,972 | |||||
(1) | In October 2009, the Financial Accounting Standards Board issued new accounting guidance related to revenue recognition. Cisco elected to adopt this accounting guidance early on a prospective basis for transactions originating or materially modified in the first quarter of fiscal 2010. Net sales for the three months ended October 24, 2009 were approximately $50 million higher than the net sales that would have been recorded under the previous accounting guidance. |
CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)
October 24, 2009 | July 25, 2009 | |||||
ASSETS | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | 4,774 | $ | 5,718 | ||
Investments | 30,591 | 29,283 | ||||
Accounts receivable, net of allowance for doubtful accounts of $216 at October 24, 2009 and July 25, 2009 | 3,159 | 3,177 | ||||
Inventories | 1,089 | 1,074 | ||||
Deferred tax assets | 2,205 | 2,320 | ||||
Other current assets | 2,879 | 2,605 | ||||
Total current assets | 44,697 | 44,177 | ||||
Property and equipment, net | 3,976 | 4,043 | ||||
Goodwill | 12,942 | 12,925 | ||||
Purchased intangible assets, net | 1,552 | 1,702 | ||||
Other assets | 5,513 | 5,281 | ||||
TOTAL ASSETS | $ | 68,680 | $ | 68,128 | ||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||
Current liabilities: | ||||||
Accounts payable | $ | 729 | $ | 675 | ||
Income taxes payable | 97 | 166 | ||||
Accrued compensation | 2,263 | 2,535 | ||||
Deferred revenue | 6,397 | 6,438 | ||||
Other current liabilities | 3,676 | 3,841 | ||||
Total current liabilities | 13,162 | 13,655 | ||||
Long-term debt | 10,273 | 10,295 | ||||
Income taxes payable | 1,755 | 2,007 | ||||
Deferred revenue | 2,874 | 2,955 | ||||
Other long-term liabilities | 590 | 539 | ||||
Total liabilities | 28,654 | 29,451 | ||||
Shareholders’ equity | 40,026 | 38,677 | ||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 68,680 | $ | 68,128 | ||
Certain reclassifications have been made to prior period amounts to conform to the current period’s presentation.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
Three Months Ended | ||||||||
October 24, 2009 | October 25, 2008 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 1,787 | $ | 2,201 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation, amortization, and other noncash items | 429 | 393 | ||||||
Share-based compensation expense | 321 | 304 | ||||||
Provision for doubtful accounts | 4 | 17 | ||||||
Deferred income taxes | 93 | 26 | ||||||
Excess tax benefits from share-based compensation | (21 | ) | (17 | ) | ||||
In-process research and development | — | 3 | ||||||
Net (gains) losses on investments | (47 | ) | 70 | |||||
Change in operating assets and liabilities, net of effects of acquisitions: | ||||||||
Accounts receivable | 38 | 453 | ||||||
Inventories | (8 | ) | 8 | |||||
Lease receivables, net | (100 | ) | (65 | ) | ||||
Accounts payable | 52 | (35 | ) | |||||
Income taxes payable | (291 | ) | (83 | ) | ||||
Accrued compensation | (313 | ) | (197 | ) | ||||
Deferred revenue | (160 | ) | (2 | ) | ||||
Other assets | (186 | ) | (405 | ) | ||||
Other liabilities | (110 | ) | 47 | |||||
Net cash provided by operating activities | 1,488 | 2,718 | ||||||
Cash flows from investing activities: | ||||||||
Purchases of investments | (9,537 | ) | (12,461 | ) | ||||
Proceeds from sales of investments | 2,769 | 6,833 | ||||||
Proceeds from maturities of investments | 5,664 | 3,509 | ||||||
Acquisition of property and equipment | (160 | ) | (361 | ) | ||||
Acquisition of businesses, net of cash and cash equivalents acquired | — | (288 | ) | |||||
Change in investments in privately held companies | (32 | ) | (11 | ) | ||||
Other | 43 | (60 | ) | |||||
Net cash used in investing activities | (1,253 | ) | (2,839 | ) | ||||
Cash flows from financing activities: | ||||||||
Issuance of common stock | 634 | 224 | ||||||
Repurchase of common stock | (1,869 | ) | (1,002 | ) | ||||
Excess tax benefits from share-based compensation | 21 | 17 | ||||||
Other | 35 | (112 | ) | |||||
Net cash used in financing activities | (1,179 | ) | (873 | ) | ||||
Net decrease in cash and cash equivalents | (944 | ) | (994 | ) | ||||
Cash and cash equivalents, beginning of period | 5,718 | 5,191 | ||||||
Cash and cash equivalents, end of period | $ | 4,774 | $ | 4,197 | ||||
Certain reclassifications have been made to prior period amounts to conform to the current period’s presentation.