cisco-annual-report-2021
CISCO SYSTEMS, INC.Consolidated Statements of Equity(in millions, except per-share amounts)Shares ofCommonStockCommon StockandAdditionalPaid-In CapitalRetainedEarnings(AccumulatedDeficit)AccumulatedOtherComprehensiveIncome (Loss)Total EquityBALANCE AT JULY 28, 2018 4,614 $ 42,820 $ 1,233 $ (849) $ 43,204Net income 11,621 11,621Other comprehensive income (loss) 225 225Issuance of common stock 71 640 640Repurchase of common stock (418) (3,902) (16,675) (20,577)Shares repurchased for tax withholdings on vesting of restrictedstock units (17) (862) (862)Cash dividends declared ($136 per common share) (5,979) (5,979)Effect of adoption of accounting standards 3,897 (168) 3,729Share-based compensation 1,570 1,570BALANCE AT JULY 27, 2019 4,250 $ 40,266 $ (5,903) $ (792) $ 33,571Net income 11,214 11,214Other comprehensive income (loss) 273 273Issuance of common stock 61 655 655Repurchase of common stock (59) (561) (2,058) (2,619)Shares repurchased for tax withholdings on vesting of restrictedstock units (15) (727) (727)Cash dividends declared ($142 per common share) (6,016) (6,016)Share-based compensation 1,569 1,569BALANCE AT JULY 25, 2020 4,237 $ 41,202 $ (2,763) $ (519) $ 37,920Net income 10,591 10,591Other comprehensive income (loss) 102 102Issuance of common stock 58 643 643Repurchase of common stock (64) (625) (2,277) (2,902)Shares repurchased for tax withholdings on vesting ofrestricted stock units (14) (636) (636)Cash dividends declared ($1.46 per common share) (6,166) (6,166)Effect of adoption of accounting standard (38) (38)Share-based compensation 1,761 1,761Other 1 (1) —BALANCE AT JULY 31, 2021 4,217 $ 42,346 $ (654) $ (417) $ 41,275See Notes to Consolidated Financial Statements60
1. Basis of PresentationCISCO SYSTEMS, INC.Notes to Consolidated Financial StatementsThe fiscal year for Cisco Systems, Inc. (the “Company,” “Cisco,” “we,” “us,” or “our”) is the 52 or 53 weeks ending on thelast Saturday in July. Fiscal 2021 was a 53-week fiscal year, and each of fiscal 2020 and fiscal 2019 were 52-week fiscal years.The Consolidated Financial Statements include our accounts and those of our subsidiaries. All intercompany accounts andtransactions have been eliminated. We conduct business globally and are primarily managed on a geographic basis in thefollowing three geographic segments: the Americas; Europe, Middle East, and Africa (EMEA); and Asia Pacific, Japan, andChina (APJC).At our annual meeting of shareholders held on December 10, 2020, shareholders voted to approve changing our state ofincorporation from California to Delaware. The reincorporation became effective January 25, 2021.Our consolidated financial statements include our accounts and entities consolidated under the variable interest and votingmodels. The noncontrolling interests attributed to these investments, if any, are presented as a separate component from ourequity in the equity section of the Consolidated Balance Sheets. The share of earnings attributable to the noncontrollinginterests are not presented separately in the Consolidated Statements of Operations as these amounts are not material for any ofthe fiscal periods presented.Certain reclassifications have been made to the amounts for prior years in order to conform to the current year’s presentation.We have evaluated subsequent events through the date that the financial statements were issued.2. Summary of Significant Accounting Policies(a) Cash and Cash Equivalents We consider all highly liquid investments purchased with an original or remaining maturityof three months or less at the date of purchase to be cash equivalents. Cash and cash equivalents are maintained with variousfinancial institutions.(b) Available-for-Sale Debt Investments We classify our investments in fixed income securities as available-for-sale debtinvestments. Our available-for-sale debt investments primarily consist of U.S. government, U.S. government agency, corporatedebt, and U.S. agency mortgage-backed securities. These available-for-sale debt investments are primarily held in the custodyof a major financial institution. A specific identification method is used to determine the cost basis of available-for-sale debtinvestments sold. These investments are recorded in the Consolidated Balance Sheets at fair value. Unrealized gains and losseson these investments are included as a separate component of accumulated other comprehensive income (AOCI), net of tax. Weclassify our investments as current based on the nature of the investments and their availability for use in current operations.(c) Equity Instruments Our equity investments are accounted for as follows:▪▪▪Marketable equity securities have readily determinable fair value (RDFV) that are measured and recorded at fair valuethrough income.Non-marketable equity securities do not have RDFV and are measured using a measurement alternative recorded at costless any impairment, plus or minus changes resulting from qualifying observable price changes. For certain of thesesecurities, we have elected to apply the net asset value (NAV) practical expedient. The NAV is the estimated fair valueof these investments.Equity method investments are securities we do not control, but are able to exert significant influence over the investee.These investments are measured at cost less any impairment, plus or minus our share of equity method investeeincome or loss.(d) Impairments of Investments For our available-for-sale debt securities in an unrealized loss position, we determine whethera credit loss exists. In this assessment, among other factors, we consider the extent to which the fair value is less than theamortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to thesecurity. If factors indicate a credit loss exists, an allowance for credit loss is recorded to other income (loss), net, limited by theamount that the fair value is less than the amortized cost basis. The amount of fair value change relating to all other factors willbe recognized in other comprehensive income (OCI).We hold non-marketable equity and other investments (“privately held investments”) which are included in other assets inthe Consolidated Balance Sheets. We monitor these investments for impairments and make reductions in carrying values ifwe determine that an impairment charge is required based primarily on the financial condition and near-term prospects ofthese companies.61
- Page 29 and 30: Research and DevelopmentWe regularl
- Page 31 and 32: Inclusion & DiversityInclusion and
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- Page 47 and 48: Risks Related to Ownership of Our S
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- Page 111 and 112: being exercised or settled, then th
- Page 113 and 114: (f) Employee 401(k) PlansWe sponsor
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CISCO SYSTEMS, INC.
Consolidated Statements of Equity
(in millions, except per-share amounts)
Shares of
Common
Stock
Common Stock
and
Additional
Paid-In Capital
Retained
Earnings
(Accumulated
Deficit)
Accumulated
Other
Comprehensive
Income (Loss)
Total Equity
BALANCE AT JULY 28, 2018 4,614 $ 42,820 $ 1,233 $ (849) $ 43,204
Net income 11,621 11,621
Other comprehensive income (loss) 225 225
Issuance of common stock 71 640 640
Repurchase of common stock (418) (3,902) (16,675) (20,577)
Shares repurchased for tax withholdings on vesting of restricted
stock units (17) (862) (862)
Cash dividends declared ($136 per common share) (5,979) (5,979)
Effect of adoption of accounting standards 3,897 (168) 3,729
Share-based compensation 1,570 1,570
BALANCE AT JULY 27, 2019 4,250 $ 40,266 $ (5,903) $ (792) $ 33,571
Net income 11,214 11,214
Other comprehensive income (loss) 273 273
Issuance of common stock 61 655 655
Repurchase of common stock (59) (561) (2,058) (2,619)
Shares repurchased for tax withholdings on vesting of restricted
stock units (15) (727) (727)
Cash dividends declared ($142 per common share) (6,016) (6,016)
Share-based compensation 1,569 1,569
BALANCE AT JULY 25, 2020 4,237 $ 41,202 $ (2,763) $ (519) $ 37,920
Net income 10,591 10,591
Other comprehensive income (loss) 102 102
Issuance of common stock 58 643 643
Repurchase of common stock (64) (625) (2,277) (2,902)
Shares repurchased for tax withholdings on vesting of
restricted stock units (14) (636) (636)
Cash dividends declared ($1.46 per common share) (6,166) (6,166)
Effect of adoption of accounting standard (38) (38)
Share-based compensation 1,761 1,761
Other 1 (1) —
BALANCE AT JULY 31, 2021 4,217 $ 42,346 $ (654) $ (417) $ 41,275
See Notes to Consolidated Financial Statements
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