Cisco 2015 Annual Report Download - page 40

Item 2. Properties
Our corporate headquarters are located at an owned site in San Jose, California, in the United States of America. The locations of
our headquarters by geographic segment are as follows:
Americas EMEA APJC
San Jose, California, USA Amsterdam, Netherlands Singapore
In addition to our headquarters site, we own additional sites in the United States, which include facilities in the surrounding areas
of San Jose, California; Research Triangle Park, North Carolina; Richardson, Texas; Lawrenceville, Georgia; and Boston,
Massachusetts. We also own land for expansion in some of these locations. In addition, we lease office space in many U.S.
locations.
Outside the United States our operations are conducted primarily in leased sites, such as our Globalisation Centre East campus in
Bangalore, India. Other significant sites (in addition to the two non-U.S. headquarters locations) are located in Belgium, Canada,
China, France, Germany, India, Israel, Japan, Poland and the United Kingdom.
We believe that our existing facilities, including both owned and leased, are in good condition and suitable for the conduct of our
business. For additional information regarding obligations under operating leases, see Note 12 to the Consolidated Financial
Statements.
Item 3. Legal Proceedings
Brazil Brazilian authorities have investigated our Brazilian subsidiary and certain of its current and former employees, as well
as a Brazilian importer of our products, and its affiliates and employees, relating to alleged evasion of import taxes and alleged
improper transactions involving the subsidiary and the importer. Brazilian tax authorities have assessed claims against our
Brazilian subsidiary based on a theory of joint liability with the Brazilian importer for import taxes, interest, and penalties. In
addition to claims asserted by the Brazilian federal tax authorities in prior fiscal years, tax authorities from the Brazilian state of
Sao Paulo have asserted similar claims on the same legal basis in prior fiscal years. In the first quarter of fiscal 2013, the
Brazilian federal tax authorities asserted an additional claim against our Brazilian subsidiary based on a theory of joint liability
with respect to an alleged underpayment of income taxes, social taxes, interest, and penalties by a Brazilian distributor.
The asserted claims by Brazilian federal tax authorities are for calendar years 2003 through 2008, and the asserted claims by the
tax authorities from the state of Sao Paulo are for calendar years 2005 through 2007. The total asserted claims by Brazilian state
and federal tax authorities aggregate to approximately $262 million for the alleged evasion of import and other taxes,
approximately $1.1 billion for interest, and approximately $1.2 billion for various penalties, all determined using an exchange
rate as of July 25, 2015. We have completed a thorough review of the matters and believe the asserted claims against our
Brazilian subsidiary are without merit, and we are defending the claims vigorously. While we believe there is no legal basis for
the alleged liability, due to the complexities and uncertainty surrounding the judicial process in Brazil and the nature of the claims
asserting joint liability with the importer, we are unable to determine the likelihood of an unfavorable outcome against our
Brazilian subsidiary and are unable to reasonably estimate a range of loss, if any. We do not expect a final judicial determination
for several years.
Russia and the Commonwealth of Independent States At the request of the U.S. Securities and Exchange Commission (SEC)and
the U.S. Department of Justice, we are conducting an investigation into allegations which we and those agencies received
regarding possible violations of the U.S. Foreign Corrupt Practices Act involving business activities of Cisco’s operations in
Russia and certain of the Commonwealth of Independent States, and by certain resellers of our products in those countries. We
take any such allegations very seriously and are fully cooperating with and sharing the results of our investigation with the SEC
and the Department of Justice. While the outcome of our investigation is currently not determinable, we do not expect that it will
have a material adverse effect on our consolidated financial position, results of operations, or cash flows. The countries that are
the subject of the investigation collectively comprise less than 2% of our revenues.
In addition, we are 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, we do not expect that the
ultimate costs to resolve these matters will have a material adverse effect on our consolidated financial position, results of
operations, or cash flows. For additional information regarding intellectual property litigation, see “Part I, Item 1A. Risk Factors-
We may be found to infringe on intellectual property rights of others” herein.
Item 4. Mine Safety Disclosures
Not applicable.
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