cisco-annual-report-2021

Restructuring and Other Charges
The following table presents restructuring and other charges (in millions):
Years Ended July 31, 2021 July 25, 2020 July 27, 2019
Restructuring and other charges included in operating expenses . . . . . . . . . . . . $ 886 $ 481 $ 322
In the first quarter of fiscal 2021, we initiated a restructuring plan, which included a voluntary early retirement program, in
order to realign the organization and enable further investment in key priority areas. The total pretax charges are estimated to be
approximately $900 million. In connection with this restructuring plan, we incurred charges of $881 million during fiscal 2021.
We substantially completed the Fiscal 2021 Plan in fiscal 2021 and do not expect any remaining charges related to this plan to
be material. We estimate the Fiscal 2021 Plan will generate cost savings of approximately $1.0 billion on an annualized basis.
We incurred total restructuring and other charges of $886 million in fiscal 2021. We incurred charges of $881 million related to
the restructuring plan initiated during fiscal 2021 and the remainder of which was related to the restructuring plan announced
during fiscal 2020.
Operating Income
The following table presents our operating income and our operating income as a percentage of revenue (in millions, except
percentages):
Years Ended July 31, 2021 July 25, 2020 July 27, 2019
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 12,833 $ 13,620 $ 14,219
Operating income as a percentage of revenue . . . . . . . . . . . . . . . . . . . . . . . . . 25.8% 27.6% 27.4%
Operating income decreased by 6%, and as a percentage of revenue operating income decreased by 1.8 percentage points. These
changes resulted primarily from: higher restructuring and other charges and a gross margin percentage decrease (driven by
pricing erosion, partially offset by productivity improvements and product mix), partially offset by a revenue increase.
Interest and Other Income (Loss), Net
Interest Income (Expense), Net The following table summarizes interest income and interest expense (in millions):
Years Ended 2021 vs. 2020
July 31, 2021 July 25, 2020 July 27, 2019
Variance
in Dollars
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 618 $ 920 $ 1,308 $ (302)
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (434) (585) (859) 151
Interest income (expense), net . . . . . . . . . . . . . . . . . . . . $ 184 $ 335 $ 449 $ (151)
Interest income decreased driven by lower interest rates and lower average balances of cash and available-for-sale debt
investments. The decrease in interest expense was driven by a lower average debt balance and the impact of lower effective
interest rates.
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