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74 Cisco Systems, Inc.
Notes to Consolidated Financial Statements
Defined Benefit Plans Assumed from Scientific-Atlanta
Upon completion of the acquisition of Scientific-Atlanta, the Company assumed certain defined benefit plans related to employee pensions.
Scientific-Atlanta had a defined benefit pension plan covering substantially all of its domestic employees, defined benefit pension plans
covering certain international employees, a restoration retirement plan for certain domestic employees, and supplemental executive
retirement plans for certain key officers, (collectively, the “Pension Plans”).
The fair value of the liabilities of these plans was determined at the July 28, 2007 and July 29, 2006 measurement dates. The fair value
determination of the liabilities reflects the Company’s intent to integrate the Scientific-Atlanta employee benefit programs with those of the
Company. As a result, no additional benefits will be accrued under the Pension Plans after February 2008.
On July 28, 2007, the Company adopted SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement
Plans, an amendment of FASB Statements No. 87, 88, 106 and 132(R).” The adoption of this statement did not have a material impact on the
Company’s Consolidated Financial Statements.
The following table sets forth projected benefit obligations, plan assets, and amounts recorded in current and long-term liabilities
under the Pension Plans (in millions):
July 28, 2007 July 29, 2006
Projected benefit obligations $ 234 $ 214
Fair value of plan assets (125) (95)
Accrued benefit liability $ 109 $ 119
The accumulated benefit obligations under the Pension Plans were $225 million and $199 million as of July 28, 2007 and July 29, 2006,
respectively.
11. Income Taxes
The provision for income taxes consists of the following (in millions):
Years Ended July 28, 2007 July 29, 2006 July 30, 2005
Federal:
Current $ 1,979 $ 1,877 $ 1,340
Deferred (554) (292) 497
1,425 1,585 1,837
State:
Current 344 215 496
Deferred (68) (20) (292)
276 195 204
Foreign:
Current 427 304 404
Deferred — (31) (150)
427 273 254
Total $ 2,128 $ 2,053 $ 2,295