Cisco 2012 Annual Report Download - page 126

consolidated in the Northern District of California. Plaintiffs in both the federal and state derivative actions
allege that the Board allowed certain officers to make allegedly false and misleading statements. The complaint
includes claims for violation of the federal securities laws, breach of fiduciary duties, waste of corporate assets,
unjust enrichment, and violations of the California Corporations Code. The complaint seeks compensatory
damages, disgorgement, and other relief.
In addition, the Company is subject to legal proceedings, claims, and litigation arising in the ordinary course of
business, including intellectual property litigation. While the outcome of these matters is currently not
determinable, the Company does not expect that the ultimate costs to resolve these matters will have a material
adverse effect on its consolidated financial position, results of operations, or cash flows.
13. Shareholders’ Equity
(a) Stock Repurchase Program
In September 2001, the Company’s Board of Directors authorized a stock repurchase program. As of July 28,
2012, the Company’s Board of Directors had authorized an aggregate repurchase of up to $82 billion of common
stock under this program, and the remaining authorized repurchase amount was $5.9 billion with no termination
date. A summary of the stock repurchase activity under the stock repurchase program, reported based on the trade
date, is summarized as follows (in millions, except per-share amounts):
Shares
Repurchased
Weighted-
Average Price
per Share
Amount
Repurchased
Cumulative balance at July 31, 2010 .............................. 3,127 $20.78 $64,982
Repurchase of common stock under the stock repurchase program ...... 351 19.36 6,791
Cumulative balance at July 30, 2011 ............................ 3,478 $20.64 $71,773
Repurchase of common stock under the stock repurchase program .. 262 16.64 4,360
Cumulative balance at July 28, 2012 ............................ 3,740 $20.36 $76,133
The purchase price for the shares of the Company’s stock repurchased is reflected as a reduction to shareholders’
equity. The Company is required to allocate the purchase price of the repurchased shares as (i) a reduction to
retained earnings and (ii) a reduction of common stock and additional paid-in capital. Issuance of common stock
and the tax benefit related to employee stock incentive plans are recorded as an increase to common stock and
additional paid-in capital.
(b) Cash Dividends on Shares of Common Stock
During fiscal 2012, the Company paid cash dividends of $0.28 per common share, or $1.5 billion, on the
Company’s outstanding common stock. During fiscal 2011, the Company paid cash dividends of $0.12 per
common share, or $658 million, on the Company’s outstanding common stock.
On August 14, 2012, the Company’s Board of Directors declared a quarterly dividend of $0.14 per common
share to be paid on October 24, 2012 to all shareholders of record as of the close of business on October 4, 2012.
Any future dividends will be subject to the approval of the Company’s Board of Directors.
(c) Other Repurchases of Common Stock
For the years ended July 28, 2012 and July 30, 2011, the Company repurchased approximately 12 million and
10 million shares, or $200 million and $183 million, of common stock, respectively, in settlement of employee
tax withholding obligations due upon the vesting of restricted stock or stock units.
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