Cisco 2007 Annual Report Download - page 11

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In the rst full scal year following the acquisition of Scientic Atlanta, the results of the acquisition
exceeded our expectations with greater market penetration, faster growth, and greater scale for
Scientic Atlanta products in international markets, and a stronger position for Cisco with service
providers worldwide.
We added approximately 11,600 employees on a net basis throughout the year. These additions drove
sales in video, Emerging Markets, and market expansion in the commercial customer segment. Even
with these headcount investments, net income grew approximately 31 percent on a year-over-year
basis to $7.3 billion in scal 2007, which made Cisco one of the most protable companies in the tech-
nology sector. Earnings per share on a fully diluted basis for scal 2007 were $1.17. Cisco generated
$10.1 billion of cash from operations.
We continued to reduce our outstanding shares in scal 2007 by repurchasing 297 million shares of
common stock. From the inception of the repurchase program in scal 2002 through the end of scal
2007, Cisco has repurchased 2.2 billion shares for an aggregate purchase price of $43.2 billion.
Our pursuit of operational excellence drives us to continually seek ways to improve and streamline our
business processes across our global operations. Fiscal 2007 marked the year in which we realized
greater operating efciencies as a result of completing our implementation of a new manufacturing
model: lean manufacturing. As a result of this initiative, Cisco achieved annualized inventory turns of
slightly above 10 in the fourth quarter of scal 2007. This is a signicant accomplishment given the size
and breadth of our product lines.
Our track record of revenue and earnings growth, strong cash-generating capability, and healthy
balance sheet enable us to reinvest in our business when we are presented with market or customer
opportunities. We believe this helps us to drive ongoing innovation and supports our growth initiatives.
Corporate Citizenship and Social Responsibility
While we’re proud of the nancial results we delivered in 2007, we are also very proud of our people,
our culture, and the way Cisco operates as a company. The fundamental value of our products rests
on our ability to seamlessly collaborate as an organization as well as provide access to information
and opportunities that help people improve the way they work, live, play, and learn. Our long-standing
commitment to corporate social responsibility extends from transforming global education to building
healthier, more productive communities, including our Green Initiative and commitments to global
sustainability.
We remain dedicated to education through the creation of innovative global learning initiatives. In fact,
this year marked the tenth anniversary of the Cisco Networking Academy,® a pioneering e-learning
program operating in approximately 165 countries worldwide with approximately 500,000 students.
Students acquire technical skills to enable their participation in a world that is increasingly driven by
technological initiatives, and in turn helps energize local economies. Through public and private sector
partnerships, our $40 million investment and involvement in the 21st Century Schools Initiative is rede-
ning the 21st century educational approach, and is rebuilding and improving entire communities.
We believe that solid business results and dedication to the environment go hand in hand. This past
year, Cisco established an EcoBoard to set an environmental strategy and oversee companywide
environmental programs. Cisco is committed to environmental responsibility in our business opera-
tions, products, and network architecture design. We believe that through the power of the network,
people are empowered to work, live, play, and learn in an environmentally sustainable way. This can
be accomplished through reduction in transportation-related emissions via collaborative tech-
nologies such as unied communications and TelePresence, and also through improvements in
workspace utilization and energy consumption.
14 Cisco Systems, Inc.