SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (Date of earliest
event reported): November 4, 2009
CISCO SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation)
|(Commission File Number)
||(IRS Employer Identification No.)|
|170 West Tasman Drive, San Jose, California
|(Address of principal executive offices)
(Registrants telephone number, including area code)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the
||Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
||Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
||Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
||Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
||Results of Operations and Financial Condition. |
On November 4, 2009, Cisco Systems, Inc. (the Registrant) reported its results of operations for its fiscal first quarter 2010 ended October 24, 2009. A copy of the press release
issued by the Registrant concerning the foregoing results is furnished herewith as Exhibit 99.1. In addition, the transcript of a video of the Registrants Chief Financial Officer discussing first quarter results is furnished herewith as
The information contained herein and in the accompanying exhibits shall not be incorporated by reference into
any filing of the Registrant, whether made before or after the date hereof, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference to such filing. The information in this report,
including the exhibits hereto, shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2) of the
Securities Act of 1933, as amended.
The attached exhibits include non-GAAP net income, non-GAAP net income per share data,
non-GAAP shares used in net income per share calculation and non-GAAP inventory turns.
These non-GAAP measures are not in
accordance with, or an alternative for, 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. The Registrant believes that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with the Registrants results of operations as determined in accordance with GAAP and that these
measures should only be used to evaluate the Registrants results of operations in conjunction with the corresponding GAAP measures.
The Registrant believes that the presentation of non-GAAP net income, non-GAAP net income per share data and non-GAAP shares used in net income per share calculation, 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, the Registrant 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, the Registrants management uses financial statements that do not include, when applicable,
share-based compensation expense, amortization of acquisition-related intangible assets, other acquisition-related costs, enhanced early retirement benefits, the income tax effects of the foregoing, significant effects of retroactive tax
legislation, and significant transfer pricing adjustments related to share-based compensation. The Registrants management also uses the foregoing non-GAAP measures, in addition to the corresponding GAAP measures, in reviewing the financial
results of the Registrant. In prior periods, the Registrant has excluded other items that it no longer excludes for purposes of its non-GAAP financial measures; for example, effective in the third quarter of fiscal 2009, the Registrant no longer
excludes payroll tax on stock option exercises, and effective in fiscal 2010 Cisco no longer excludes in-process research and development as it is no longer expensed as a result of new accounting guidance. From time to time in the future, there may
be other items that the Registrant may exclude for purposes of its internal budgeting process and in reviewing the financial results of the Registrant.
As described above, the Registrant excludes the following items from one or more of its
non-GAAP measures when applicable:
Share-based compensation expense. These expenses consist primarily of
expenses for employee stock options, employee stock purchase rights, employee restricted stock and employee restricted stock units, including such expenses associated with acquisitions. The Registrant excludes share-based compensation expenses from
its non-GAAP measures primarily because they are non-cash expenses that the Registrant does not believe are reflective of ongoing operating results. Further, the Registrant believes that it is useful to investors to understand the impact of
share-based compensation to its results of operations.
Amortization of acquisition-related intangible assets.
The Registrant incurs amortization of intangible assets (which may include impairment charges from the write-downs of purchased intangible assets) in connection with acquisitions. The Registrant excludes these items because these expenses are
not reflective of ongoing operating results in the period incurred. These amounts arise from the Registrants prior acquisitions and have no direct correlation to the operation of the Registrants business.
Other acquisition-related costs. In connection with its business combinations, the Registrant incurs compensation expenses, as
well as professional fees and other direct expenses such as restructuring activities related to the acquired company. In addition, from time to time the Registrant enters into foreign currency transactions related to pending acquisitions, and may
incur gains or losses on such transactions. The Registrant excludes such compensation expense, fees, other direct expenses, and gains and losses, as they are primarily related to acquisitions and have no direct correlation to the operation of the
Enhanced early retirement benefits. The Registrant excluded expenses related to an
enhanced early retirement program, in the fourth quarter of fiscal 2009. The Registrant excludes these expenses because the Registrant does not believe they are reflective of ongoing business and operating results.
Income tax effects of the foregoing. This amount is used to present each of the amounts described above on an after-tax basis
consistent with the presentation of non-GAAP net income.
Significant effects of retroactive tax legislation. The
Registrant is subject to changes in tax legislation which have retroactive effects. The Registrant excludes such significant effects of retroactive tax legislation because this item is unrelated to the Registrants current ongoing business and
Significant transfer pricing adjustments related to share-based compensation. During the
Registrants fourth quarter of fiscal 2009, the U.S. Court of Appeals for the Ninth Circuit overturned a 2005 U.S. Tax Court ruling. The decision changes the tax treatment of share-based compensation expenses for the purpose of determining
intangible development costs under a companys research and development cost sharing arrangement. While Cisco was not a named party to the case, the decision resulted in a change in Ciscos tax benefits recognized in its financial
statements. The Registrant excluded a related tax charge because it was unrelated to its current ongoing business and operating results.
From time to time in the future, there may be other items that the Registrant may exclude if it believes that doing so is consistent with the goal of providing useful information to investors and
The Registrant will incur share-based compensation expense, amortization of acquisition-related intangible
assets, and other acquisition-related costs, in future periods. The Registrant may be subject to significant effects of retroactive tax legislation to the extent that any such legislation becomes effective retroactively in future periods. Enhanced
early retirement benefit expenses are an unusual occurrence. The Registrant could experience significant transfer pricing adjustments related to share-based compensation to the extent that any court rulings or other guidance impacts this area in
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
||CISCO SYSTEMS, INC.|
|Dated: November 4, 2009
/s/ Frank A. Calderoni
||Frank A. Calderoni|
||Executive Vice President and Chief Financial Officer|
Description of Document
||Press Release of Registrant, dated November 4, 2009, reporting the results of operations for the Registrants fiscal first quarter ended October 24,
||Transcript of video of the Registrants Chief Financial Officer discussing the results of operations for the Registrants fiscal first quarter ended October 24, 2009.