Cisco 2004 Annual Report Download - page 62

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The majority of the Company’s assets as of July 31, 2004 and July 26, 2003 were attributable to its U.S. operations. In fiscal 2004,
2003, and 2002, no single customer accounted for 10% or more of the Company’s net sales.
Property and equipment information is based on the physical location of the assets. The following table presents property and
equipment information for geographic areas (in millions):
July 31, 2004 July 26, 2003 July 27, 2002
Property and equipment, net:
United States $ 2,919 $ 3,186 $ 3,555
International 371 457 547
Total $ 3,290 $ 3,643 $ 4,102
13. NET INCOME PER SHARE
The following table presents the calculation of basic and diluted net income per share (in millions, except per-share amounts):
Years Ended July 31, 2004 July 26, 2003 July 27, 2002
Income before cumulative effect of accounting change $ 4,968 $ 3,578 $ 1,893
Cumulative effect of accounting change, net of tax (567) ——
Net income $ 4,401 $ 3,578 $ 1,893
Weighted-average shares—basic 6,840 7,124 7,301
Effect of dilutive potential common shares 217 99 146
Weighted-average shares—diluted 7,057 7,223 7,447
Income per share before cumulative effect of accounting change:
Basic $0.73 $0.50 $0.26
Diluted $ 0.70 $ 0.50 $ 0.25
Per-share amount of cumulative effect of accounting change:
Basic $ 0.09 $— $—
Diluted $0.08 $ — $ —
Net income per share:
Basic $ 0.64 $ 0.50 $ 0.26
Diluted $0.62 $0.50 $0.25
Dilutive potential common shares consist of employee stock options and restricted common stock. Employee stock options to purchase
approximately 469 million, 838 million, and 712 million shares in fiscal 2004, 2003, and 2002, respectively, were outstanding, but
were not included in the computation of diluted earnings per share because the exercise price of the stock options was greater than
the average share price of the common shares, and, therefore, the effect would have been antidilutive.
14. PENDING BUSINESS COMBINATIONS
As of July 31, 2004, the Company announced a definitive agreement to acquire the intellectual property and select other assets, and
the hiring of a majority of the engineering team, from privately held Procket Networks, Inc. The Company also announced definitive
agreements to acquire privately held Actona Technologies, Inc. and Parc Technologies, Ltd. The aggregate announced purchase price
for these acquisitions was approximately $180 million in cash. These acquisitions closed in the first quarter of fiscal 2005.
In addition, as of July 31, 2004, the Company has made an investment in BCN Systems, Inc. (“BCN”). The Company has the
right, but not the obligation, to acquire the portion of BCN it does not own, with such purchase dependent upon the Company’s sole
determination as to whether certain technical conditions have been met. The aggregate total purchase value of BCN could range from
approximately $45 million to approximately $195 million depending upon the achievement of certain milestones including those
which would be determinable only after closing.
2004 ANNUAL REPORT 65