Cisco 2007 Annual Report Download - page 75

78 Cisco Systems, Inc.
Notes to Consolidated Financial Statements
The Company refers to some of its products and technologies as advanced technologies. As of July 28, 2007, the Company had identified
the following advanced technologies for particular focus: application networking services, home networking, hosted small-business systems,
security, storage area networking, unified communications, video systems, and wireless technology. The Company continues to identify
additional advanced technologies for focus and investment in the future, and the Company’s investments in some previously identified
advanced technologies may be curtailed or eliminated depending on market developments. Beginning in the first quarter of fiscal 2007,
sales of optical networking products, which were previously included in the advanced technologies product category, are included in the
other product category, and prior year amounts have been reclassified in order to conform to the current year’s presentation.
The majority of the Company’s assets as of July 28, 2007 and July 29, 2006 were attributable to its U.S. operations. In fiscal 2007,
2006, and 2005, 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 28, 2007 July 29, 2006
Property and equipment, net:
United States $ 3,340 $ 3,082
International 553 358
Total $ 3,893 $ 3,440
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 28, 2007 July 29, 2006 July 30, 2005
Net income $ 7,333 $ 5,580 $ 5,741
Weighted-average shares—basic 6,055 6,158 6,487
Effect of dilutive potential common shares 210 114 125
Weighted-average shares—diluted 6,265 6,272 6,612
Net income per share—basic $ 1.21 $ 0.91 $ 0.88
Net income per share—diluted $ 1.17 $ 0.89 $ 0.87
Antidilutive employee stock options 533 1,014 847
14. Subsequent Event
On August 17, 2007, the Company entered into a credit agreement with certain institutional lenders which provides for a $3.0 billion
unsecured revolving credit facility that is scheduled to expire on August 17, 2012. Advances under the credit facility will accrue interest at
rates that are equal to either (i) the higher of the Federal Funds rate plus 0.50% or Bank of America’s “prime rate” as announced from time
to time, or (ii) LIBOR plus a margin that is based on the Company’s senior debt credit ratings as published by Standard & Poor’s Ratings
Services and Moody’s Investors Service, Inc. In addition, the credit agreement requires that the Company maintain an interest coverage ratio
as defined in the agreement. The Company may also, upon the agreement of either the then existing lenders or of additional lenders not
currently parties to the agreement, increase the commitments under the credit facility up to a total of $5.0 billion, and/or extend the expiration
date of the credit facility up to August 15, 2014. As of September 14, 2007, the Company had not borrowed any funds under the credit facility.