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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549 
_____________________________________
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 29, 2022
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
          
For the transition period from              to             
Commission file number 001-39940 
_____________________________________
csco-20221029_g1.jpg
CISCO SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
Delaware 77-0059951
(State or other jurisdiction of
incorporation or organization)
 (I.R.S. Employer
Identification Number)
170 West Tasman Drive
San Jose, California 95134
(Address of principal executive office and zip code)
(408) 526-4000
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and formal fiscal year, if changed since last report.)
_____________________________________ 
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.001 per shareCSCOThe Nasdaq Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes    No    
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes     No    
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer 
Non-accelerated filerSmaller reporting company 
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes  No 
Number of shares of the registrant’s common stock outstanding as of November 17, 2022: 4,108,103,063
____________________________________ 
1

Cisco Systems, Inc.
Form 10-Q for the Quarter Ended October 29, 2022
INDEX
Page
Part I
Item 1.
Item 2.
Item 3.
Item 4.
Part II.
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.

2

PART I. FINANCIAL INFORMATION 
Item 1.Financial Statements (Unaudited)
CISCO SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
(in millions, except par value)
(Unaudited)
October 29, 2022July 30, 2022
ASSETS
Current assets:
Cash and cash equivalents$7,292 $7,079 
Investments12,492 12,188 
Accounts receivable, net of allowance of $88 at October 29, 2022 and $83 at July 30, 2022
5,439 6,622 
Inventories2,664 2,568 
Financing receivables, net3,683 3,905 
Other current assets4,571 4,355 
Total current assets36,141 36,717 
Property and equipment, net1,972 1,997 
Financing receivables, net3,618 4,009 
Goodwill38,160 38,304 
Purchased intangible assets, net2,360 2,569 
Deferred tax assets4,891 4,449 
Other assets5,912 5,957 
TOTAL ASSETS$93,054 $94,002 
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt$1,249 $1,099 
Accounts payable2,316 2,281 
Income taxes payable890 961 
Accrued compensation2,907 3,316 
Deferred revenue12,578 12,784 
Other current liabilities4,956 5,199 
Total current liabilities24,896 25,640 
Long-term debt7,629 8,416 
Income taxes payable7,835 7,725 
Deferred revenue10,441 10,480 
Other long-term liabilities1,981 1,968 
Total liabilities52,782 54,229 
Commitments and contingencies (Note 14)
Equity:
Cisco stockholders’ equity:
Preferred stock, $0.001 par value: 5 shares authorized; none issued and outstanding
  
Common stock and additional paid-in capital, $0.001 par value: 20,000 shares authorized; 4,103 and 4,110 shares issued and outstanding at October 29, 2022 and July 30, 2022, respectively
42,984 42,714 
Accumulated deficit(594)(1,319)
Accumulated other comprehensive loss(2,118)(1,622)
Total equity40,272 39,773 
TOTAL LIABILITIES AND EQUITY$93,054 $94,002 
See Notes to Consolidated Financial Statements.
3

CISCO SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per-share amounts)
(Unaudited) 
Three Months Ended
October 29, 2022October 30, 2021
REVENUE:
Product$10,245 $9,529 
Service3,387 3,371 
Total revenue13,632 12,900 
COST OF SALES:
Product4,179 3,673 
Service1,107 1,174 
Total cost of sales5,286 4,847 
GROSS MARGIN8,346 8,053 
OPERATING EXPENSES:
Research and development1,781 1,714 
Sales and marketing2,391 2,261 
General and administrative565 551 
Amortization of purchased intangible assets71 84 
Restructuring and other charges(2)5 
Total operating expenses4,806 4,615 
OPERATING INCOME3,540 3,438 
Interest income169 121 
Interest expense(100)(89)
Other income (loss), net(134)187 
Interest and other income (loss), net(65)219 
INCOME BEFORE PROVISION FOR INCOME TAXES3,475 3,657 
Provision for income taxes805 677 
NET INCOME$2,670 $2,980 
Net income per share:
Basic$0.65 $0.71 
Diluted$0.65 $0.70 
Shares used in per-share calculation:
Basic4,108 4,218 
Diluted4,116 4,243 
See Notes to Consolidated Financial Statements.
4

CISCO SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions)
(Unaudited)
Three Months Ended
October 29, 2022October 30, 2021
Net income$2,670 $2,980 
Available-for-sale investments:
Change in net unrealized gains and losses, net of tax benefit (expense) of $78 and $28 for the first quarter of fiscal 2023 and 2022, respectively
(251)(83)
Net (gains) losses reclassified into earnings, net of tax (benefit) expense of $(1) and $2 for the first quarter of fiscal 2023 and 2022, respectively
5 (4)
(246)(87)
Cash flow hedging instruments:
Change in unrealized gains and losses, net of tax benefit (expense) of $(8) and $(1) for the first quarter of fiscal 2023 and 2022, respectively
24 7 
Net (gains) losses reclassified into earnings, net of tax (benefit) expense of $5 and $0 for the first quarter of fiscal 2023 and 2022, respectively
(14)(1)
10 6 
Net change in cumulative translation adjustment and actuarial gains and losses net of tax benefit (expense) of $22 and $9 for the first quarter of fiscal 2023 and 2022, respectively
(260)25 
Other comprehensive income (loss)(496)(56)
Comprehensive income$2,174 $2,924 
See Notes to Consolidated Financial Statements.


5

CISCO SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(Unaudited)
Three Months Ended
October 29, 2022October 30, 2021
Cash flows from operating activities:
Net income$2,670 $2,980 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization, and other415 533 
Share-based compensation expense496 453 
Provision (benefit) for receivables7 1 
Deferred income taxes(366)(98)
(Gains) losses on divestitures, investments and other, net131 (211)
Change in operating assets and liabilities, net of effects of acquisitions and divestitures:
Accounts receivable1,119 427 
Inventories(108)(275)
Financing receivables556 672 
Other assets(316)(170)
Accounts payable42 (93)
Income taxes, net20 17 
Accrued compensation(384)(585)
Deferred revenue(78)(95)
Other liabilities(242)(129)
Net cash provided by operating activities3,962 3,427 
Cash flows from investing activities:
Purchases of investments(1,943)(2,951)
Proceeds from sales of investments407 580 
Proceeds from maturities of investments971 1,856 
Acquisitions, net of cash and cash equivalents acquired and divestitures (336)
Purchases of investments in privately held companies(48)(101)
Return of investments in privately held companies10 53 
Acquisition of property and equipment(176)(122)
Proceeds from sales of property and equipment 1 
Other(20) 
Net cash used in investing activities(799)(1,020)
Cash flows from financing activities:
Repurchases of common stockrepurchase program
(556)(273)
Shares repurchased for tax withholdings on vesting of restricted stock units(108)(133)
Short-term borrowings, original maturities of 90 days or less, net(602) 
Repayments of debt (2,000)
Dividends paid(1,560)(1,561)
Other(29)(3)
Net cash used in financing activities(2,855)(3,970)
Effect of foreign currency exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents(95) 
Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents213 (1,563)
Cash, cash equivalents, restricted cash and restricted cash equivalents, beginning of period8,579 9,942 
Cash, cash equivalents, restricted cash and restricted cash equivalents, end of period$8,792 $8,379 
Supplemental cash flow information:
Cash paid for interest$114 $124 
Cash paid for income taxes, net$1,150 $758 


See Notes to Consolidated Financial Statements.
6

CISCO SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF EQUITY
(in millions, except per-share amounts)
(Unaudited)
Three Months Ended October 29, 2022Shares of
Common
Stock
Common Stock
and
Additional
Paid-In Capital
Accumulated DeficitAccumulated
Other
Comprehensive Loss
Total
Equity
Balance at July 30, 20224,110 $42,714 $(1,319)$(1,622)$39,773 
Net income2,670 2,670 
Other comprehensive loss(496)(496)
Issuance of common stock7 — — 
Repurchase of common stock(12)(118)(384)(502)
Shares repurchased for tax withholdings on vesting of restricted stock units(2)(108)(108)
Cash dividends declared ($0.38 per common share)
(1,560)(1,560)
Share-based compensation496 496 
Other— (1)(1)
Balance at October 29, 20224,103$42,984 $(594)$(2,118)$40,272 

Three Months Ended October 30, 2021Shares of
Common
Stock
Common Stock
and
Additional
Paid-In Capital
Retained Earnings (Accumulated Deficit)Accumulated
Other
Comprehensive Loss
Total
Equity
Balance at July 31, 20214,217 $42,346 $(654)$(417)$41,275 
Net income2,980 2,980 
Other comprehensive loss(56)(56)
Issuance of common stock7 — — 
Repurchase of common stock(5)(46)(210)(256)
Shares repurchased for tax withholdings on vesting of restricted stock units(2)(133)(133)
Cash dividends declared ($0.37 per common share)
(1,561)(1,561)
Share-based compensation453 453 
Other1 (2)(1)
Balance at October 30, 20214,217$42,621 $553 $(473)$42,701 










7

CISCO SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1.Organization and Basis of Presentation
The fiscal year for Cisco Systems, Inc. (the “Company,” “Cisco,” “we,” “us,” or “our”) is the 52 or 53 weeks ending on the last Saturday in July. Fiscal 2023 and fiscal 2022 are each 52-week fiscal years. The Consolidated Financial Statements include our accounts and those of our subsidiaries. All intercompany accounts and transactions have been eliminated. We conduct business globally and are primarily managed on a geographic basis in the following three geographic segments: the Americas; Europe, Middle East, and Africa (EMEA); and Asia Pacific, Japan, and China (APJC).
We have prepared the accompanying financial data as of October 29, 2022 and for the first quarter of fiscal 2023 and 2022, without audit, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States (GAAP) have been condensed or omitted pursuant to such rules and regulations. The July 30, 2022 Consolidated Balance Sheet was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States. However, we believe that the disclosures are adequate to make the information presented not misleading. These Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended July 30, 2022.
In the opinion of management, all normal recurring adjustments necessary to state fairly the consolidated balance sheet as of October 29, 2022, the results of operations, the statements of comprehensive income, the statements of cash flows and the statements of equity for the first quarter of fiscal 2023 and 2022, as applicable, have been made. The results of operations for the first quarter of fiscal 2023 are not necessarily indicative of the operating results for the full fiscal year or any future periods.
Our consolidated financial statements include our accounts and investments consolidated under the variable interest and voting models. The noncontrolling interests attributed to these investments are not presented as a separate component in the equity section of the Consolidated Balance Sheets as these amounts are not material for any of the fiscal periods presented. The share of earnings attributable to the noncontrolling interests are not presented separately in the Consolidated Statements of Operations as these amounts are not material for any of the fiscal periods presented.
Certain reclassifications have been made to the amounts in prior periods in order to conform to the current period’s presentation. We have evaluated subsequent events through the date that the financial statements were issued.

2.Recent Accounting Pronouncements
(a)Recent Accounting Standards or Updates Not Yet Effective
Reference Rate Reform In March 2020, the FASB issued an accounting standard update and subsequent amendments that provide optional expedients and exceptions to the current guidance on contract modification and hedging relationships to ease the financial reporting burden of the expected market transition from the London InterBank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. This accounting standard update was effective upon issuance and may be applied prospectively through December 31, 2022. We do not expect this accounting standard update will have a material impact on our Consolidated Financial Statements.

3.Revenue
We enter into contracts with customers that can include various combinations of products and services which are generally distinct and accounted for as separate performance obligations. As a result, our contracts may contain multiple performance obligations. We determine whether arrangements are distinct based on whether the customer can benefit from the product or service on its own or together with other resources that are readily available and whether our commitment to transfer the product or service to the customer is separately identifiable from other obligations in the contract. We classify our hardware, perpetual software licenses, and software-as-a-service (SaaS) as distinct performance obligations. Term software licenses represent multiple obligations, which include software licenses and software maintenance. In transactions where we deliver hardware or software, we are typically the principal and we record revenue and costs of goods sold on a gross basis. We refer to our term software licenses, security software licenses, SaaS, and associated service arrangements as subscription offers.
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CISCO SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)

We recognize revenue upon transfer of control of promised goods or services in a contract with a customer in an amount that reflects the consideration we expect to receive in exchange for those products or services. Transfer of control occurs once the customer has the contractual right to use the product, generally upon shipment, electronic delivery (or when the software is available for download by the customer), or once title and risk of loss has transferred to the customer. Transfer of control can also occur over time for software maintenance and services as the customer receives the benefit over the contract term. Our hardware and perpetual software licenses are distinct performance obligations where revenue is recognized upfront upon transfer of control. Term software licenses include multiple performance obligations where the term licenses are recognized upfront upon transfer of control, with the associated software maintenance revenue recognized ratably over the contract term as services and software updates are provided. SaaS arrangements do not include the right for the customer to take possession of the software during the term, and therefore have one distinct performance obligation which is satisfied over time with revenue recognized ratably over the contract term as the customer consumes the services. On our product sales, we record consideration from shipping and handling on a gross basis within net product sales. We record our revenue net of any associated sales taxes.
An allowance for future sales returns is established based on historical trends in product return rates. The allowance for future sales returns as of October 29, 2022 and July 30, 2022 was $47 million and $43 million, respectively, and was recorded as a reduction of our accounts receivable and revenue.
Significant Judgments
Revenue is allocated among these performance obligations in a manner that reflects the consideration that we expect to be entitled to for the promised goods or services based on standalone selling prices (SSP). SSP is estimated for each distinct performance obligation and judgment may be required in their determination. The best evidence of SSP is the observable price of a product or service when we sell the goods separately in similar circumstances and to similar customers. In instances where SSP is not directly observable, we determine SSP using information that may include market conditions and other observable inputs.
We assess relevant contractual terms in our customer contracts to determine the transaction price. We apply judgment in identifying contractual terms and determining the transaction price as we may be required to estimate variable consideration when determining the amount of revenue to recognize. Variable consideration includes potential contractual penalties and various rebate, cooperative marketing and other incentive programs that we offer to our distributors, channel partners and customers. When determining the amount of revenue to recognize, we estimate the expected usage of these programs, applying the expected value or most likely estimate and update the estimate at each reporting period as actual utilization becomes available. We also consider the customers’ right of return in determining the transaction price, where applicable.
We assess certain software licenses, such as for security software, that contain critical updates or upgrades which customers can download throughout the contract term. Without these updates or upgrades, the functionality of the software would diminish over a relatively short time period. These updates or upgrades provide the customer the full functionality of the purchased security software licenses and are required to maintain the security license’s utility as the risks and threats in the environment are rapidly changing. In these circumstances, the revenue from these software arrangements is recognized as a single performance obligation satisfied over the contract term.
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CISCO SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)


(a)Disaggregation of Revenue
We disaggregate our revenue into groups of similar products and services that depict the nature, amount, and timing of revenue and cash flows for our various offerings. The sales cycle, contractual obligations, customer requirements, and go-to-market strategies differ for each of our product categories, resulting in different economic risk profiles for each category. The following table presents this disaggregation of revenue (in millions):
Three Months Ended
October 29,
2022
October 30,
2021
Product revenue:
Secure, Agile Networks$6,684 $5,968 
Internet for the Future1,310 1,373 
Collaboration1,086 1,109 
End-to-End Security971 895 
Optimized Application Experiences193 181 
Other Products2 3 
Total Product10,245 9,529 
Services3,387 3,371 
Total$13,632 $12,900 
Amounts may not sum due to rounding. We have made certain reclassifications to the product revenue amounts for prior period to conform to the current year presentation.
Secure, Agile Networks consists of our core networking technologies of switching, enterprise routing, wireless, and compute products. These technologies consist of both hardware and software offerings, including software licenses and SaaS, that help our customers build networks, automate, orchestrate, integrate, and digitize data. Our hardware and perpetual software in this category are distinct performance obligations where revenue is recognized upfront upon transfer of control. Term software licenses are multiple performance obligations where the term license is recognized upfront upon transfer of control with the associated software maintenance revenue recognized ratably over the contract term. SaaS arrangements in this category have one distinct performance obligation which is satisfied over time with revenue recognized ratably over the contract term.
Internet for the Future consists of our routed optical networking, 5G, silicon, and optics solutions. These products consist primarily of both hardware and software offerings, including software licenses and SaaS. Our hardware and perpetual software in this category are distinct performance obligations where revenue is recognized upfront upon transfer of control. Term software licenses are multiple performance obligations where the term license is recognized upfront upon transfer of control with the associated software maintenance revenue recognized ratably over the contract term. SaaS arrangements in this category have one distinct performance obligation which is satisfied over time with revenue recognized ratably over the contract term.
Collaboration consists of our Meetings, Collaboration Devices, Calling, Contact Center and Communication Platform as a Service (CPaaS) offerings. These products consist primarily of software offerings, including software licenses and SaaS, as well as hardware. Our perpetual software and hardware in this category are distinct performance obligations where revenue is recognized upfront upon transfer of control. Term software licenses are multiple performance obligations where the term license is recognized upfront upon transfer of control with the associated software maintenance revenue recognized ratably over the contract term. SaaS arrangements in this category have one distinct performance obligation which is satisfied over time with revenue recognized ratably over the contract term.
End-to-End Security consists of our Network Security, Cloud Security, Security Endpoints, Unified Threat Management and Zero Trust offerings. These products consist of both hardware and software offerings, including software licenses and SaaS. Updates and upgrades for the term software licenses are critical for our software to perform its intended commercial purpose because of the continuous need for our software to secure our customers’ network environments against frequent threats. Therefore, security software licenses are generally represented by a single distinct performance obligation with revenue recognized ratably over the contract term. Our hardware and perpetual software in this category are distinct performance obligations where revenue is recognized upfront upon transfer of control. SaaS arrangements in this category have one distinct performance obligation which is satisfied over time with revenue recognized ratably over the contract term.
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CISCO SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)

Optimized Application Experiences consists of our full stack observability and cloud-native platform offerings. These products consist primarily of software offerings, including software licenses and SaaS. Our perpetual software in this category are distinct performance obligations where revenue is recognized upfront upon transfer of control. Term software licenses are multiple performance obligations where the term license is recognized upfront upon transfer of control with the associated software maintenance revenue recognized ratably over the contract term. SaaS arrangements in this category have one distinct performance obligation which is satisfied over time with revenue recognized ratably over the contract term.
In addition to our product offerings, we provide a broad range of service and support options for our customers, including technical support services and advanced services. Technical support services represent the majority of these offerings which are distinct performance obligations that are satisfied over time with revenue recognized ratably over the contract term. Advanced services are distinct performance obligations that are satisfied over time with revenue recognized as services are delivered.
The sales arrangements as discussed above are typically made pursuant to customer purchase orders based on master purchase or partner agreements. Cash is received based on our standard payment terms which is typically 30 days. We provide financing arrangements to customers for all of our hardware, software and service offerings. Refer to Note 9 for additional information. For these arrangements, cash is typically received over time.
(b)Contract Balances
Accounts Receivable
Accounts receivable, net was $5.4 billion as of October 29, 2022 compared to $6.6 billion as of July 30, 2022, as reported on the Consolidated Balance Sheets.
The allowances for credit loss for our accounts receivable are summarized as follows (in millions):
Three Months Ended
October 29, 2022October 30, 2021
Allowance for credit loss at beginning of period$83 $109 
Provisions (benefits)11 19 
Recoveries (write-offs), net(6)(14)
Allowance for credit loss at end of period$88 $114 
Contract Assets and Liabilities
Gross contract assets by our internal risk ratings are summarized as follows (in millions):
October 29,
2022
July 30,
2022
1 to 4$356 $414 
5 to 6898 814 
7 and Higher87 158 
Total$1,341 $1,386 
Contract assets consist of unbilled receivables and are recorded when revenue is recognized in advance of scheduled billings to our customers. These amounts are primarily related to software and service arrangements where transfer of control has occurred but we have not yet invoiced. Our contract assets for these unbilled receivables, net of allowances, was $1.3 billion as of each of October 29, 2022 and July 30, 2022, and were included in other current assets and other assets.
Contract liabilities consist of deferred revenue. Deferred revenue was $23.0 billion as of October 29, 2022 compared to $23.3 billion as of July 30, 2022. We recognized approximately $4.4 billion of revenue during the first quarter of fiscal 2023 that was included in the deferred revenue balance at July 30, 2022.
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CISCO SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)

(c)Capitalized Contract Acquisition Costs
We capitalize direct and incremental costs incurred to acquire contracts, primarily sales commissions, for which the associated revenue is expected to be recognized in future periods. We incur these costs in connection with both initial contracts and renewals. These costs are initially deferred and typically amortized over the term of the customer contract which corresponds to the period of benefit. Deferred sales commissions were $1.1 billion and $1.0 billion as of October 29, 2022 and July 30, 2022, respectively, and were included in other current assets and other assets. The amortization expense associated with these costs was $176 million and $170 million for the first quarter of fiscal 2023 and 2022, respectively, and was included in sales and marketing expenses.


4.Acquisitions and Divestitures
Total transaction costs related to acquisition and divestiture activities were $2 million and $19 million for the first quarter of fiscal 2023 and 2022, respectively. These transaction costs were expensed as incurred in general and administrative expenses (“G&A”) in the Consolidated Statements of Operations.

5.Goodwill and Purchased Intangible Assets
(a)Goodwill
The following table presents the goodwill allocated to our reportable segments as of October 29, 2022 and during the first quarter of fiscal 2023 (in millions):
Balance at July 30, 2022Foreign Currency Translation and OtherBalance at October 29, 2022
Americas$23,882 $(90)$23,792 
EMEA9,062 (34)9,028 
APJC5,360 (20)5,340 
Total$38,304 $(144)$38,160 
(b)Purchased Intangible Assets
The following tables present details of our purchased intangible assets (in millions): 
October 29, 2022GrossAccumulated AmortizationNet
Purchased intangible assets with finite lives:
Technology$2,642 $(1,250)$1,392 
Customer relationships1,332 (819)513 
Other40 (15)25 
Total purchased intangible assets with finite lives4,014 (2,084)1,930 
In-process research and development, with indefinite lives430 — 430 
       Total$4,444 $(2,084)$2,360 
July 30, 2022GrossAccumulated AmortizationNet
Purchased intangible assets with finite lives:
Technology$2,631 $(1,102)$1,529 
Customer relationships1,354 (769)585 
Other41 (16)25 
Total purchased intangible assets with finite lives4,026 (1,887)2,139 
In-process research and development, with indefinite lives430 — 430 
       Total$4,456 $(1,887)$2,569 
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CISCO SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)

Purchased intangible assets include intangible assets acquired through acquisitions as well as through direct purchases or licenses.
The following table presents the amortization of purchased intangible assets, including impairment charges (in millions):
Three Months Ended
October 29, 2022October 30, 2021
Amortization of purchased intangible assets:
Cost of sales$158 $202 
Operating expenses71 84 
Total$229 $286 
The estimated future amortization expense of purchased intangible assets with finite lives as of October 29, 2022 is as follows (in millions):
Fiscal YearAmount
2023 (remaining nine months)$677 
2024$777 
2025$406 
2026$65 
2027$5 

6.Restructuring and Other Charges
In the second quarter of fiscal 2023, we announced a restructuring plan (the “Fiscal 2023 Plan”), in order to rebalance the organization and enable further investment in key priority areas. This rebalancing will include talent movement options and restructuring. Additionally, we will optimize our real estate portfolio, aligned to the broader hybrid work strategy. The total pretax charges are estimated to be approximately $600 million and is expected to impact approximately 5% of our global workforce. These aggregate pretax charges will be primarily cash-based and will consist of severance and other one-time termination benefits, real estate-related charges, and other costs. We expect the plan to be substantially completed by the end of the first quarter of fiscal 2024.
The following tables summarize the activities related to the restructuring and other charges (in millions):
FISCAL 2020 AND PRIOR PLANSFISCAL 2021 PLAN
Employee
Severance
OtherEmployee
Severance
OtherTotal
Liability as of July 30, 2022$ $3 $2 $4 $9 
Charges   (2)(2)
Cash payments  (1) (1)
Liability as of October 29, 2022$ $3 $1 $2 $6 
FISCAL 2020 AND PRIOR PLANSFISCAL 2021 PLAN
Employee
Severance
OtherEmployee SeveranceOtherTotal
Liability as of July 31, 2021$ $10 $16 $8 $34 
Charges (1)4 2 5 
Cash payments (1)(8) (9)
Non-cash items   (4)(4)
Liability as of October 30, 2021$ $8 $12 $6 $26 

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CISCO SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)

7.Balance Sheet and Other Details
The following tables provide details of selected balance sheet and other items (in millions):
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents
October 29,
2022
July 30,
2022
Cash and cash equivalents$7,292 $7,079 
Restricted cash and restricted cash equivalents included in other assets1,500 1,500 
Total$8,792 $8,579 
Our restricted cash equivalents are funds primarily related to contractual obligations with suppliers.
Inventories
October 29,
2022
July 30,
2022
Raw materials$1,458 $1,601 
Work in process165 150 
Finished goods:
Deferred cost of sales79 86 
Manufactured finished goods850 631 
Total finished goods929 717 
Service-related spares99 90 
Demonstration systems13 10 
Total$2,664 $2,568 

Property and Equipment, Net
October 29,
2022
July 30,
2022
Gross property and equipment:
Land, buildings, and building and leasehold improvements$4,193 $4,219 
Computer equipment and related software751 779 
Production, engineering, and other equipment4,588 4,647 
Operating lease assets161 185 
Furniture, fixtures and other334 335 
Total gross property and equipment10,027 10,165 
Less: accumulated depreciation and amortization
(8,055)(8,168)
Total$1,972 $1,997 
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CISCO SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)

Remaining Performance Obligations (RPO)
October 29,
2022
July 30,
2022
Product$14,013 $14,090 
Service16,897 17,449 
Total$30,910 $31,539 
Short-term RPO$16,380 $16,936 
Long-term RPO14,530 14,603 
Total$30,910 $31,539 
Amount to be recognized as revenue over the next 12 months
53 %54 %
Deferred revenue$23,019 $23,264 
Unbilled contract revenue7,891 8,275 
Total$30,910 $31,539 
Unbilled contract revenue represents noncancelable contracts for which we have not invoiced, have an obligation to perform, and revenue has not yet been recognized in the financial statements.
Deferred Revenue
October 29,
2022
July 30,
2022
Product$10,404 $10,427 
Service12,615 12,837 
Total$23,019 $23,264 
Reported as:
Current$12,578 $12,784 
Noncurrent10,441 10,480 
Total$23,019 $23,264 
Transition Tax Payable
Our income tax payable associated with the one-time U.S. transition tax on accumulated earnings for foreign subsidiaries as a result of the Tax Cuts and Jobs Act is as follows (in millions):
October 29,
2022
July 30,
2022
Current$727 $727 
Noncurrent5,456 5,456 
Total$6,183 $6,183 

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CISCO SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)

8.Leases
(a)Lessee Arrangements
The following table presents our operating lease balances (in millions):
Balance Sheet Line ItemOctober 29, 2022July 30, 2022
Operating lease right-of-use assetsOther assets$929 $1,003 
Operating lease liabilitiesOther current liabilities$308 $322 
Operating lease liabilitiesOther long-term liabilities667 724 
Total operating lease liabilities$975 $1,046 
The components of our lease expenses were as follows (in millions):
Three Months Ended
October 29, 2022October 30, 2021
Operating lease expense$96 $95 
Short-term lease expense17