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2008 Annual Report 49
Consolidated Statements of Cash Flows
(in millions)
Years Ended July 26, 2008 July 28, 2007 July 29, 2006
Cash flows from operating activities:
Net income $ 8,052 $ 7,333 $ 5,580
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 1,744 1,413 1,293
Employee share-based compensation expense 1,025 931 1,050
Share-based compensation expense related to acquisitions and investments 87 34 87
Provision for doubtful accounts 34 6 24
Deferred income taxes (772) (622) (343)
Excess tax benefits from share-based compensation (413) (918) (432)
In-process research and development 3 81 91
Net gains and impairment charges on investments (103) (210) (124)
Other — — 31
Change in operating assets and liabilities, net of effects of acquisitions:
Accounts receivable 171 (597) (913)
Inventories 104 61 121
Lease receivables, net (488) (156) (171)
Accounts payable 62 (107) (43)
Income taxes payable and receivable 178 1,104 743
Accrued compensation 351 479 150
Deferred revenue 1,812 1,293 575
Other assets (361) (452) (300)
Other liabilities 603 431 480
Net cash provided by operating activities 12,089 10,104 7,899
Cash flows from investing activities:
Purchases of investments (22,399) (20,532) (21,732)
Proceeds from sales and maturities of investments 19,990 17,368 18,480
Acquisition of property and equipment (1,268) (1,251) (772)
Acquisition of businesses, net of cash and cash equivalents acquired (398) (3,684) (5,399)
Change in investments in privately held companies (101) (92) (186)
Purchase of minority interest of Cisco Systems, K.K. (Japan) — — (25)
Other (17) (151) (10)
Net cash used in investing activities (4,193) (8,342) (9,644)
Cash flows from financing activities:
Issuance of common stock 3,117 5,306 1,682
Repurchase of common stock (10,441) (7,681) (8,295)
Issuance of debt — — 6,481
Proceeds from the termination of interest rate swaps 432 — —
Excess tax benefits from share-based compensation 413 918 432
Other 46 126 —
Net cash (used in) provided by financing activities (6,433) (1,331) 300
Net increase (decrease) in cash and cash equivalents 1,463 431 (1,445)
Cash and cash equivalents, beginning of fiscal year 3,728 3,297 4,742
Cash and cash equivalents, end of fiscal year $ 5,191 $ 3,728 $ 3,297
See Notes to Consolidated Financial Statements.