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Cisco Reports First Quarter Earnings

SAN JOSE, CA -- (Marketwire) -- 11/13/12 -- Cisco (NASDAQ: CSCO)

  • Q1 Net Sales: $11.9 billion (increase of 6% year over year)

  • Q1 Net Income: $2.1 billion GAAP (increase of 18% year over year); $2.6 billion non-GAAP (increase of 11% year over year)

  • Q1 Earnings per Share: $0.39 GAAP (increase of 18% year over year); $0.48 non-GAAP (increase of 12% year over year)

Cisco, the worldwide leader in networking that transforms how people connect, communicate and collaborate, today reported its first quarter results for the period ended October 27, 2012. Cisco reported first quarter net sales of $11.9 billion, net income on a generally accepted accounting principles (GAAP) basis of $2.1 billion or $0.39 per share, and non-GAAP net income of $2.6 billion or $0.48 per share.

"We delivered record results this quarter -- with revenue growth of 6 percent and strong earnings per share growth -- demonstrating our vision and strategy are working," said John Chambers, chairman and chief executive officer, Cisco. "Our innovation engine, operational discipline and on-going evolution are enabling us to differentiate in the market."

Chambers continued, "Cisco is at the center of the major market transitions -- cloud, mobility, video -- and yet we believe the largest market transition lies ahead of us, as the Internet of Everything becomes a reality. Cisco has the unique ability to turn information that will flow across networks into new capabilities and richer experiences. The Internet of Everything will create unprecedented possibilities for businesses, individuals and countries, and Cisco is poised to lead and fully maximize the opportunities of this evolution."


                                GAAP Results

                                    Q1 2013         Q1 2012     Vs. Q1 2012
                                --------------  --------------  -----------
Net Sales                       $ 11.9 billion  $ 11.3 billion          5.5%
Net Income                      $  2.1 billion  $  1.8 billion         17.7%
Earnings per Share              $         0.39  $         0.33         18.2%


                              Non-GAAP Results

                                    Q1 2013         Q1 2012     Vs. Q1 2012
                                --------------  --------------  -----------
 Net Income                     $  2.6 billion  $  2.3 billion         10.6%
 Earnings per Share             $         0.48  $         0.43         11.6%

A reconciliation between net income on a GAAP basis and non-GAAP net income is provided in the table on page 5.

Cisco will discuss first quarter 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.

Cash and Cash Equivalents and Investments

  • Cash flows from operations were $2.5 billion for the first quarter of fiscal 2013, compared with $2.3 billion for the first quarter of fiscal 2012, and compared with $3.1 billion for the fourth quarter of fiscal 2012.
  • Cash and cash equivalents and investments were $45.0 billion at the end of the first quarter of fiscal 2013, compared with $48.7 billion at the end of the fourth quarter of fiscal 2012.

Dividends and Stock Repurchase Program

During the first quarter of fiscal 2013:

  • The combination of cash used for dividends and common stock repurchases under the stock repurchase program totaled approximately $1.0 billion.
  • Cisco paid a cash dividend of $0.14 per common share, or $744 million.
  • Cisco repurchased 15 million shares of common stock under the stock repurchase program at an average price of $16.44 per share for an aggregate purchase price of $253 million. As of October 27, 2012, Cisco had repurchased and retired 3.8 billion shares of Cisco common stock at an average price of $20.34 per share for an aggregate purchase price of approximately $76.4 billion since the inception of the stock repurchase program. The remaining authorized amount for stock repurchases under this program is approximately $5.6 billion with no termination date.

"Once again, we delivered strong financial performance with continued execution on our long-term strategy of growing profits faster than revenue and driving long-term value to our shareholders," stated Frank Calderoni, executive vice president and chief financial officer, Cisco. "We remain confident in our financial strategy and in our ability to consistently execute moving forward."

Select Global Business Highlights

  • Cisco announced the completion of its acquisition of NDS Group Ltd., a leading provider of video software and content security solutions that help service providers and media companies to securely deliver and monetize new video experiences.
  • Cisco and NBC Olympics provided a personalized, interactive, multiscreen Olympics experience at the 2012 London Olympic Games to select users at event venues and accommodations using Cisco® Videoscape™.
  • Cisco and Citrix announced a significant expansion of their successful desktop virtualization partnership into three strategic areas: cloud networking, cloud orchestration, and mobile workstyles.
  • Cisco and EMC announced further collaboration to help accelerate IT transformation by providing customers with choice and flexibility via "three paths to the cloud" -- custom-design infrastructure, validated reference architectures, and pre-integrated converged infrastructure.

Cisco Innovation

  • Cisco introduced an expanded and enhanced content delivery network portfolio, branded as the Cisco Videoscape Distribution Suite.
  • Cisco introduced a new wave of security solutions designed to fortify data centers against the threats they face in moving toward more consolidated and virtualized environments, while also helping businesses to take advantage of new cloud-based models.
  • Cisco announced new elastic core networking capabilities that help service providers to cost-effectively launch and scale revenue-generating services within minutes instead of months.
  • Cisco introduced a new Unified Access solution, a highly secure network infrastructure based on one policy source and one management solution for the entire network, to help organizations quickly respond to new business opportunities while managing rapidly changing network demands.
  • Cisco introduced a full suite of solutions for the SAP HANA platform built on the Cisco Unified Computing System™ allowing customers to experience benefits -- realtime data analytics and data warehousing -- in seconds instead of hours.
  • Cisco unveiled enhancements to its collaboration portfolio, delivered via public, private or hybrid cloud models.

Select Customer Announcements

  • Miami International Securities Exchange, LLC announced plans to offer a trading platform built on Cisco's ultra-low latency intelligent network infrastructure and designed from the ground up to address the highly secure, functional and high performance demands of the derivatives market.
  • Cisco and Manila Electric Company (Meralco), the Philippines' largest distributor of electrical power, announced a collaboration to provide reliable computing and networking infrastructure as a foundation for operations on a smart grid.
  • Cisco, Barcelona's City Council, and GDF SUEZ agreed to launch, and agreed on the criteria for the creation of, the City Protocol (the first certification system for smart cities) that can be put into practice by any city in the world.
  • SBB-Telemach Group, the largest pay-TV platform in southeast Europe providing television, Internet, and telephony services, selected the Cisco Videoscape-capable Personal DVB Set-Tops (PDS) Series and Cisco Integration Services to deliver next-generation television services.
  • Cisco and the United Nations (UN) Office for the Coordination of Humanitarian Affairs (OCHA) reached an agreement that will allow any United Nations organization to access Cisco's networking technology solutions for emergency communications assistance during UN disaster relief missions.
  • Barclays Center will feature Cisco's Connected Sports and Entertainment solutions -- Connected Stadium Wi-Fi and StadiumVision™ to deliver a next-generation fan experience and make this venue one of the most technologically advanced arenas in the world.
  • Cisco announced that it has been selected by NBN Co. to provide equipment for its national data connectivity network, which is part of the Australian National Broadband Network.
  • Itaú BBA will invest $2 million in technology to expand its Latin American businesses and has selected Cisco solutions for its IT environment, including servers, networking, increased access security and IP telephony systems.

Editor's Note:

  • Q1 2013 conference call to discuss Cisco's results along with its business outlook will be held at 1:30 p.m. Pacific Time, Tuesday, November 13, 2012. Conference call number is 888-848-6507 (United States) or 212-519-0847 (international).
  • Conference call replay will be available from 4:30 p.m. Pacific Time, November 13, 2012 to 4:30 p.m. Pacific Time, November 20, 2012 at 1-800-224-1051 (United States) or 1-402-220-3762 (international). The replay also will be available via webcast from November 13, 2012 through January 18, 2013 on the Cisco Investor Relations website at http://investor.cisco.com.
  • 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 13, 2012. 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://investor.cisco.com.

About Cisco

Cisco (NASDAQ: CSCO) is the worldwide leader in networking that transforms how people connect, communicate and collaborate. 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 (such as statements regarding our innovation engine and operational strategies, operational discipline and execution, the evolution of our industry, major market transitions and our position with respect to such transitions) 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, our customer markets and various geographic regions; global economic conditions and uncertainties in the geopolitical environment; overall information technology spending; the growth and evolution 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 and other customer markets; the return on our investments in certain priorities, including our foundational priorities, and in certain geographical locations; 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; our ability to achieve expected benefits of our partnerships; increased competition in our product and service markets, including the data center; 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, and governmental investigations; natural catastrophic events; a pandemic or epidemic; our ability to achieve the benefits anticipated from our investments in sales, engineering, service, marketing and manufacturing activities; our ability to recruit and retain key personnel; our ability to manage financial risk, and to manage expenses during economic downturns; risks related to the global nature of our operations, including our operations in emerging markets; currency fluctuations and other international factors; changes in provision for income taxes, including changes in tax laws and regulations or adverse outcomes resulting from examinations of our income tax returns; potential volatility in operating results; and other factors listed in Cisco's most recent report on Form 10-K filed on September 12, 2012. 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 report on Form 10-K as it may be amended from time to time. Cisco's results of operations for the three months ended October 27, 2012 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 net income, non-GAAP net income per share data and non-GAAP inventory turns.

These non-GAAP measures are not in accordance with, or an alternative for, measures prepared in accordance with generally accepted accounting principles and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. Cisco believes that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with Cisco's results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate Cisco's results of operations in conjunction with the corresponding GAAP measures.

Cisco believes that the presentation of non-GAAP net income and non-GAAP net income per share data, when shown in conjunction with the corresponding GAAP measures, provides useful information to investors and management regarding financial and business trends relating to its financial condition and results of operations. In addition, Cisco believes that the presentation of non-GAAP inventory turns provides useful information to investors and management regarding financial and business trends relating to inventory management based on the operating activities of the period presented.

For its internal budgeting process, Cisco's management uses financial statements that do not include, when applicable, share-based compensation expense, amortization of acquisition-related intangible assets, impact to cost of sales from purchase accounting adjustments to inventory, other acquisition-related costs, significant asset impairments and restructurings, the income tax effects of the foregoing, and significant tax matters. Cisco's management also uses the foregoing non-GAAP measures, in addition to the corresponding GAAP measures, in reviewing the financial results of Cisco. In prior periods, Cisco has excluded other items that it no longer excludes for purposes of its non-GAAP financial measures. From time to time in the future, there may be other items, such as significant gains or losses from contingencies that Cisco may exclude for purposes of its internal budgeting process and in reviewing its financial results.

For additional information on the items excluded by Cisco from one or more of its non-GAAP financial measures, refer to the Form 8-K regarding this release furnished today to the Securities and Exchange Commission.

Copyright © 2012 Cisco and/or its affiliates. All rights reserved. Cisco, the Cisco logo, Cisco UCS, Cisco Unified Computing System, StadiumVision, and Videoscape are trademarks or registered trademarks of Cisco and/or its affiliates in the U.S. and other countries. To view a list of Cisco trademarks, go to this URL: www.cisco.com/go/trademarks. Third party 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. This document is Cisco Public Information.


                   CONSOLIDATED STATEMENTS OF OPERATIONS
                  (In millions, except per-share amounts)
                                (Unaudited)

                                                      Three Months Ended
                                                   ------------------------
                                                   October 27,  October 29,
                                                       2012         2011
                                                   -----------  -----------
NET SALES:
  Product                                          $     9,297  $     8,952
  Service                                                2,579        2,304
                                                   -----------  -----------
    Total net sales                                     11,876       11,256
COST OF SALES:
  Product                                                3,748        3,563
  Service                                                  889          803
                                                   -----------  -----------
    Total cost of sales                                  4,637        4,366
                                                   -----------  -----------
GROSS MARGIN                                             7,239        6,890
OPERATING EXPENSES:
  Research and development                               1,431        1,375
  Sales and marketing                                    2,416        2,452
  General and administrative                               560          552
  Amortization of purchased intangible assets              122           99
  Restructuring and other charges                           59          202
                                                   -----------  -----------
    Total operating expenses                             4,588        4,680
                                                   -----------  -----------
OPERATING INCOME                                         2,651        2,210
  Interest income                                          161          164
  Interest expense                                        (148)        (148)
  Other income (loss), net                                 (33)          19
                                                   -----------  -----------
    Interest and other income (loss), net                  (20)          35
                                                   -----------  -----------
INCOME BEFORE PROVISION FOR INCOME TAXES                 2,631        2,245
Provision for income taxes                                 539          468
                                                   -----------  -----------
  NET INCOME                                       $     2,092  $     1,777
                                                   -----------  -----------

Net income per share:
Basic                                              $      0.39  $      0.33
                                                   -----------  -----------
Diluted                                            $      0.39  $      0.33
                                                   -----------  -----------

Shares used in per-share calculation:
Basic                                                    5,301        5,394
                                                   -----------  -----------
Diluted                                                  5,334        5,407
                                                   -----------  -----------

Cash dividends declared per common share           $      0.14  $      0.06
                                                   -----------  -----------


               RECONCILIATION OF GAAP TO NON-GAAP NET INCOME
                  (In millions, except per-share amounts)

                                                      Three Months Ended
                                                   ------------------------
                                                   October 27,  October 29,
                                                       2012         2011
                                                   -----------  -----------
GAAP net income                                    $     2,092  $     1,777

  Adjustments to cost of sales:
    Share-based compensation expense                        45           50
    Amortization of acquisition-related intangible
     assets                                                134           87
    Impact to cost of sales from purchase
     accounting adjustments to inventory                    24           --
    Significant asset impairments and
     restructurings                                         --           (5)
                                                   -----------  -----------

  Total adjustments to GAAP cost of sales                  203          132
                                                   -----------  -----------

  Adjustments to operating expenses:
    Share-based compensation expense                       264          291
    Amortization of acquisition-related intangible
     assets                                                122           99
    Other acquisition-related costs                         15            8
    Significant asset impairments and
     restructurings                                         59          202
                                                   -----------  -----------
  Total adjustments to GAAP operating expenses             460          600
                                                   -----------  -----------

  Total adjustments to GAAP income before
   provision for income taxes                              663          732
                                                   -----------  -----------

  Income tax effect                                       (186)        (187)
                                                   -----------  -----------

Non-GAAP net income                                $     2,569  $     2,322
                                                   -----------  -----------

Diluted net income per share:

GAAP                                               $      0.39  $      0.33
                                                   -----------  -----------

Non-GAAP                                           $      0.48  $      0.43
                                                   -----------  -----------


                    CONDENSED CONSOLIDATED BALANCE SHEETS
                                (In millions)
                                 (Unaudited)

                                                     October 27,   July 28,
                                                         2012        2012
                                                     ----------- -----------
ASSETS
Current assets:
  Cash and cash equivalents                          $     4,773 $     9,799
  Investments                                             40,227      38,917
  Accounts receivable, net of allowance for doubtful
   accounts of $224 at October 27, 2012 and $207 at
   July 28, 2012                                           3,942       4,369
  Inventories                                              1,709       1,663
  Financing receivables, net                               3,726       3,661
  Deferred tax assets                                      2,253       2,294
  Other current assets                                     1,277       1,230
                                                     ----------- -----------
  Total current assets                                    57,907      61,933
Property and equipment, net                                3,409       3,402
Financing receivables, net                                 3,695       3,585
Goodwill                                                  20,443      16,998
Purchased intangible assets, net                           3,449       1,959
Other assets                                               3,740       3,882
                                                     ----------- -----------
TOTAL ASSETS                                         $    92,643 $    91,759
                                                     ----------- -----------

LIABILITIES AND EQUITY
Current liabilities:
  Short-term debt                                    $        55 $        31
  Accounts payable                                           889         859
  Income taxes payable                                       200         276
  Accrued compensation                                     2,710       2,928
  Deferred revenue                                         8,721       8,852
  Other current liabilities                                4,539       4,785
                                                     ----------- -----------
  Total current liabilities                               17,114      17,731
Long-term debt                                            16,272      16,297
Income taxes payable                                       1,577       1,844
Deferred revenue                                           3,902       4,028
Other long-term liabilities                                1,077         558
                                                     ----------- -----------
Total liabilities                                         39,942      40,458
Total equity                                              52,701      51,301
                                                     ----------- -----------
TOTAL LIABILITIES AND EQUITY                         $    92,643 $    91,759
                                                     ----------- -----------


                   CONSOLIDATED STATEMENTS OF CASH FLOWS
                               (In millions)
                                (Unaudited)

                                                      Three Months Ended
                                                   ------------------------
                                                   October 27,  October 29,
                                                       2012         2011
                                                   -----------  -----------
Cash flows from operating activities:
  Net income                                       $     2,092  $     1,777
  Adjustments to reconcile net income to net cash
   provided by operating activities:
    Depreciation, amortization, and other                  612          621
    Share-based compensation expense                       306          341
    Provision for receivables                               29          (13)
    Deferred income taxes                                  135          109
    Excess tax benefits from share-based
     compensation                                          (15)         (21)
    Net losses (gains) on investments                       15          (13)
    Change in operating assets and liabilities,
     net of effects of acquisitions and
     divestitures:
      Accounts receivable                                  615          399
      Inventories                                           42         (168)
      Financing receivables                               (132)          (9)
      Other assets                                          99         (374)
      Accounts payable                                     (19)          36
      Income taxes, net                                   (372)         (38)
      Accrued compensation                                (359)        (548)
      Deferred revenue                                    (295)         232
      Other liabilities                                   (288)           2
                                                   -----------  -----------
        Net cash provided by operating activities        2,465        2,333
                                                   -----------  -----------

Cash flows from investing activities:
  Purchases of investments                              (8,213)     (11,770)
  Proceeds from sales of investments                     2,447        7,721
  Proceeds from maturities of investments                4,388        1,179
  Acquisition of property and equipment                   (265)        (265)
  Acquisition of businesses, net of cash and cash
   equivalents acquired                                 (4,912)         (38)
  Purchases of investments in privately held
   companies                                                (9)        (153)
  Return of investments in privately held
   companies                                                12           58
  Other                                                     22           77
                                                   -----------  -----------
        Net cash used in investing activities           (6,530)      (3,191)
                                                   -----------  -----------
Cash flows from financing activities:
  Issuances of common stock                                117          203
  Repurchases of stock - repurchase program               (183)      (1,744)
  Shares repurchased for tax withholdings on
   vesting of restricted stock units                      (203)        (137)
  Short-term borrowings, maturities less than 90
   days, net                                                23           --
  Excess tax benefits from share-based
   compensation                                             15           21
  Dividends paid                                          (744)        (322)
  Other                                                     14          (78)
                                                   -----------  -----------
        Net cash used in financing activities             (961)      (2,057)
                                                   -----------  -----------

Net decrease in cash and cash equivalents               (5,026)      (2,915)
Cash and cash equivalents, beginning of period           9,799        7,662
                                                   -----------  -----------

Cash and cash equivalents, end of period           $     4,773  $     4,747
                                                   -----------  -----------

Cash paid for:
Interest                                           $       221  $       220
Income taxes                                       $       776  $       398

Certain reclassifications have been made to prior period amounts to conform to the current period's presentation.

                      ADDITIONAL FINANCIAL INFORMATION
                               (In millions)
                                (Unaudited)

                                                   October 27,    July 28,
                                                       2012         2012
                                                   -----------  -----------
CASH AND CASH EQUIVALENTS AND INVESTMENTS
Cash and cash equivalents                          $     4,773  $     9,799
Fixed income securities                                 38,464       37,297
Publicly traded equity securities                        1,763        1,620
                                                   -----------  -----------
Total                                              $    45,000  $    48,716
                                                   -----------  -----------

INVENTORIES
Raw materials                                      $       101  $       127
Work in process                                             36           35
Finished goods:
  Distributor inventory and deferred cost of sales         671          630
  Manufactured finished goods                              615          597
                                                   -----------  -----------
Total finished goods                                     1,286        1,227
Service-related spares                                     237          213
Demonstration systems                                       49           61
                                                   -----------  -----------
Total                                              $     1,709  $     1,663
                                                   -----------  -----------

PROPERTY AND EQUIPMENT, NET
Land, buildings, and building & leasehold
 improvements                                      $     4,458  $     4,363
Computer equipment and related software                  1,491        1,469
Production, engineering, and other equipment             5,495        5,364
Operating lease assets                                     312          300
Furniture and fixtures                                     494          487
                                                   -----------  -----------
                                                        12,250       11,983
Less accumulated depreciation and amortization          (8,841)      (8,581)
                                                   -----------  -----------
Total                                              $     3,409  $     3,402
                                                   -----------  -----------

OTHER ASSETS
Deferred tax assets                                $     2,061  $     2,270
Investments in privately held companies                    830          858
Other                                                      849          754
                                                   -----------  -----------
Total                                              $     3,740  $     3,882
                                                   -----------  -----------

DEFERRED REVENUE
Service                                            $     8,753  $     9,173
Product:
  Unrecognized revenue on product shipments and
   other deferred revenue                                3,074        2,975
  Cash receipts related to unrecognized revenue
   from two-tier distributors                              796          732
                                                   -----------  -----------
Total product deferred revenue                           3,870        3,707
                                                   -----------  -----------
Total                                              $    12,623  $    12,880
                                                   -----------  -----------

Reported as:
Current                                            $     8,721  $     8,852
Noncurrent                                               3,902        4,028
                                                   -----------  -----------
Total                                              $    12,623  $    12,880
                                                   -----------  -----------


                 SUMMARY OF SHARE-BASED COMPENSATION EXPENSE
                                (In millions)

                                                       Three Months Ended
                                                    ------------------------
                                                    October 27,  October 29,
                                                        2012         2011
                                                    -----------  -----------
Cost of sales -- product                            $        10  $        13
Cost of sales -- service                                     35           37
                                                    -----------  -----------
Share-based compensation expense in cost of sales            45           50
                                                    -----------  -----------

Research and development                                     84          101
Sales and marketing                                         130          142
General and administrative                                   50           48
Restructuring and other charges                              (3)          --
                                                    -----------  -----------
Share-based compensation expense in operating
 expenses                                                   261          291
                                                    -----------  -----------
Total share-based compensation expense              $       306  $       341
                                                    -----------  -----------

The income tax benefit for share-based compensation expense was $79 million and $90 million for the three months ended October 27, 2012 and October 29, 2011, respectively.


                         ACCOUNTS RECEIVABLE AND DSO
                          (In millions, except DSO)


                                         -----------------------------------
                                         October 27,   July 28,  October 29,
                                             2012        2012        2011
                                         ----------- ----------- -----------

Accounts receivable                      $     3,942 $     4,369 $     4,300
Days sales outstanding in accounts
 receivable (DSO)                                 30          34          35


           INVENTORY TURNS AND RECONCILIATION OF GAAP TO NON-GAAP
                   COST OF SALES USED IN INVENTORY TURNS
              (In millions, except annualized inventory turns)

                                                Three Months Ended
                                      -------------------------------------
                                      October 27,    July 28,   October 29,
                                          2012         2012         2011
                                      -----------  -----------  -----------

Annualized inventory turns- GAAP             11.0         11.7         11.2
    Cost of sales adjustments                (0.5)        (0.4)        (0.3)
                                      -----------  -----------  -----------
Annualized inventory turns- non-GAAP         10.5         11.3         10.9

GAAP cost of sales                    $     4,637  $     4,605  $     4,366
  Cost of sales adjustments:
    Share-based compensation expense          (45)         (54)         (50)
    Amortization of acquisition-
     related intangible assets               (134)        (100)         (87)
    Impact to cost of sales from
     purchase accounting adjustments
     to inventory                             (24)          --           --
    Significant asset impairments and
     restructurings                            --            5            5
                                      -----------  -----------  -----------
Non-GAAP cost of sales                $     4,434  $     4,456  $     4,234
                                      -----------  -----------  -----------


                REPURCHASE OF COMMON STOCK AND DIVIDENDS PAID
                                (In millions)

                    October 27,  July 28,  April 28, January 28, October 29,
Three Months Ended      2012       2012       2012       2012        2011
                    ----------- ---------- --------- ----------- -----------
Repurchase of
 common stock under
 the stock
 repurchase program $       253 $    1,800 $     550 $       466 $     1,544
Dividends paid              744        425       432         322         322
                    ----------- ---------- --------- ----------- -----------
Total               $       997 $    2,225 $     982 $       788 $     1,866
                    ----------- ---------- --------- ----------- -----------

Press Contact:
Robyn Jenkins-Blum
Cisco
+1 (408) 853-9848
Email Contact

Investor Relations Contact:
Melissa Selcher
Cisco
+1 (408) 424-1335
Email Contact

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@ThingsExpo Stories
The Internet of Things is not new. Historically, smart businesses have used its basic concept of leveraging data to drive better decision making and have capitalized on those insights to realize additional revenue opportunities. So, what has changed to make the Internet of Things one of the hottest topics in tech? In his session at @ThingsExpo, Chris Gray, Director, Embedded and Internet of Things, discussed the underlying factors that are driving the economics of intelligent systems. Discover how hardware commoditization, the ubiquitous nature of connectivity, and the emergence of Big Data a...
"BSQUARE is in the business of selling software solutions for smart connected devices. It's obvious that IoT has moved from being a technology to being a fundamental part of business, and in the last 18 months people have said let's figure out how to do it and let's put some focus on it, " explained Dave Wagstaff, VP & Chief Architect, at BSQUARE Corporation, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
The major cloud platforms defy a simple, side-by-side analysis. Each of the major IaaS public-cloud platforms offers their own unique strengths and functionality. Options for on-site private cloud are diverse as well, and must be designed and deployed while taking existing legacy architecture and infrastructure into account. Then the reality is that most enterprises are embarking on a hybrid cloud strategy and programs. In this Power Panel at 15th Cloud Expo (http://www.CloudComputingExpo.com), moderated by Ashar Baig, Research Director, Cloud, at Gigaom Research, Nate Gordon, Director of T...
SYS-CON Events announced today that IDenticard will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. IDenticard™ is the security division of Brady Corp (NYSE: BRC), a $1.5 billion manufacturer of identification products. We have small-company values with the strength and stability of a major corporation. IDenticard offers local sales, support and service to our customers across the United States and Canada. Our partner network encompasses some 300 of the world's leading systems integrators and security s...
SYS-CON Events announced today that Windstream, a leading provider of advanced network and cloud communications, has been named “Silver Sponsor” of SYS-CON's 16th International Cloud Expo®, which will take place on June 9–11, 2015, at the Javits Center in New York, NY. Windstream (Nasdaq: WIN), a FORTUNE 500 and S&P 500 company, is a leading provider of advanced network communications, including cloud computing and managed services, to businesses nationwide. The company also offers broadband, phone and digital TV services to consumers primarily in rural areas.

ARMONK, N.Y., Nov. 20, 2014 /PRNewswire/ --  IBM (NYSE: IBM) today announced that it is bringing a greater level of control, security and flexibility to cloud-based application development and delivery with a single-tenant version of Bluemix, IBM's platform-as-a-service. The new platform enables developers to build ap...

The BPM world is going through some evolution or changes where traditional business process management solutions really have nowhere to go in terms of development of the road map. In this demo at 15th Cloud Expo, Kyle Hansen, Director of Professional Services at AgilePoint, shows AgilePoint’s unique approach to dealing with this market circumstance by developing a rapid application composition or development framework.
“In the past year we've seen a lot of stabilization of WebRTC. You can now use it in production with a far greater degree of certainty. A lot of the real developments in the past year have been in things like the data channel, which will enable a whole new type of application," explained Peter Dunkley, Technical Director at Acision, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
DevOps Summit 2015 New York, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that it is now accepting Keynote Proposals. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long development cycles that produce software that is obsolete at launch. DevOps may be disruptive, but it is essential.
"People are a lot more knowledgeable about APIs now. There are two types of people who work with APIs - IT people who want to use APIs for something internal and the product managers who want to do something outside APIs for people to connect to them," explained Roberto Medrano, Executive Vice President at SOA Software, in this SYS-CON.tv interview at Cloud Expo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Nigeria has the largest economy in Africa, at more than US$500 billion, and ranks 23rd in the world. A recent re-evaluation of Nigeria's true economic size doubled the previous estimate, and brought it well ahead of South Africa, which is a member (unlike Nigeria) of the G20 club for political as well as economic reasons. Nigeria's economy can be said to be quite diverse from one point of view, but heavily dependent on oil and gas at the same time. Oil and natural gas account for about 15% of Nigera's overall economy, but traditionally represent more than 90% of the country's exports and as...
The Internet of Things is a misnomer. That implies that everything is on the Internet, and that simply should not be - especially for things that are blurring the line between medical devices that stimulate like a pacemaker and quantified self-sensors like a pedometer or pulse tracker. The mesh of things that we manage must be segmented into zones of trust for sensing data, transmitting data, receiving command and control administrative changes, and peer-to-peer mesh messaging. In his session at @ThingsExpo, Ryan Bagnulo, Solution Architect / Software Engineer at SOA Software, focused on desi...
"At our booth we are showing how to provide trust in the Internet of Things. Trust is where everything starts to become secure and trustworthy. Now with the scaling of the Internet of Things it becomes an interesting question – I've heard numbers from 200 billion devices next year up to a trillion in the next 10 to 15 years," explained Johannes Lintzen, Vice President of Sales at Utimaco, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
"For over 25 years we have been working with a lot of enterprise customers and we have seen how companies create applications. And now that we have moved to cloud computing, mobile, social and the Internet of Things, we see that the market needs a new way of creating applications," stated Jesse Shiah, CEO, President and Co-Founder of AgilePoint Inc., in this SYS-CON.tv interview at 15th Cloud Expo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
SYS-CON Events announced today that Gridstore™, the leader in hyper-converged infrastructure purpose-built to optimize Microsoft workloads, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Gridstore™ is the leader in hyper-converged infrastructure purpose-built for Microsoft workloads and designed to accelerate applications in virtualized environments. Gridstore’s hyper-converged infrastructure is the industry’s first all flash version of HyperConverged Appliances that include both compute and storag...
Today’s enterprise is being driven by disruptive competitive and human capital requirements to provide enterprise application access through not only desktops, but also mobile devices. To retrofit existing programs across all these devices using traditional programming methods is very costly and time consuming – often prohibitively so. In his session at @ThingsExpo, Jesse Shiah, CEO, President, and Co-Founder of AgilePoint Inc., discussed how you can create applications that run on all mobile devices as well as laptops and desktops using a visual drag-and-drop application – and eForms-buildi...
We certainly live in interesting technological times. And no more interesting than the current competing IoT standards for connectivity. Various standards bodies, approaches, and ecosystems are vying for mindshare and positioning for a competitive edge. It is clear that when the dust settles, we will have new protocols, evolved protocols, that will change the way we interact with devices and infrastructure. We will also have evolved web protocols, like HTTP/2, that will be changing the very core of our infrastructures. At the same time, we have old approaches made new again like micro-services...
Code Halos - aka "digital fingerprints" - are the key organizing principle to understand a) how dumb things become smart and b) how to monetize this dynamic. In his session at @ThingsExpo, Robert Brown, AVP, Center for the Future of Work at Cognizant Technology Solutions, outlined research, analysis and recommendations from his recently published book on this phenomena on the way leading edge organizations like GE and Disney are unlocking the Internet of Things opportunity and what steps your organization should be taking to position itself for the next platform of digital competition.
The 3rd International Internet of @ThingsExpo, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that its Call for Papers is now open. The Internet of Things (IoT) is the biggest idea since the creation of the Worldwide Web more than 20 years ago.
As the Internet of Things unfolds, mobile and wearable devices are blurring the line between physical and digital, integrating ever more closely with our interests, our routines, our daily lives. Contextual computing and smart, sensor-equipped spaces bring the potential to walk through a world that recognizes us and responds accordingly. We become continuous transmitters and receivers of data. In his session at @ThingsExpo, Andrew Bolwell, Director of Innovation for HP's Printing and Personal Systems Group, discussed how key attributes of mobile technology – touch input, sensors, social, and ...