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2000, an increase of 60%. Pro forma net income was $2.69 billion or $0.36 per share for the first six months of fiscal 2001,
compared with pro forma net income of $1.71 billion or $0.23 per share for the first six months of fiscal 2000, increases of
57% and 57%, respectively.

Actual net income for the first six months of fiscal 2001 was $1.67 billion or $0.22 per share, compared with $1.23 billion or
$0.17 per share for the first six months of fiscal 2000.

``We remain confident about the market opportunity ahead of us over the next three to five years. This confidence is based on
the continued impact of the Internet on productivity, and just how much more work needs to be done before every company is
an e-company and a majority of the world's countries are e-countries,'' said John Chambers, President and CEO of Cisco
Systems. ``It is the productivity and standard-of-living opportunities, combined with business inflection points, that are driving
our continued confidence in our breakaway opportunity, if we execute well.''

Cisco continues to advance its end-to-end Internet solutions for each of its key markets.

In the service provider marketplace, Cisco advanced its leadership and expertise in IP services and end-to-end solutions,
accelerating service provider adoption of data services that drive new revenue opportunities. Building on Cisco's leadership in
the IP+Optical market, the company introduced the newest of its industry-leading, high-performance router line, the Cisco
12410 and Cisco 12416 Internet Routers with a line-rate 10-Gbps OC-192 line card. Cisco also introduced the Cisco ONS
15327 Optical Metro Edge Router. Cisco was chosen to build out optical networks for GNG Networks, Telecom New
Zealand, Crosswave Communications, and Bell South, among others. In the voice market, several new Cisco customers are
deploying voice-over-IP (VoIP) services, including China Unicom, which, when complete, will have the world's largest VoIP
network. Building on Cisco's existing wireless technology, Cisco announced its intent to acquire ExiO Communications, Inc. In
broadband, Cisco introduced the Cisco WT-2750 Multipoint Broadband Wireless System, enabling service providers to
deploy services in areas where cable or digital subscriber line (DSL) are not available or cost-effective. Cisco also introduced
the next-generation cable platform, the Cisco uBR10012.

In the enterprise market, Cisco expanded the reach of its intelligent end-to-end IP solutions through Cisco AVVID
(Architecture for Voice, Video and Integrated Data), which provides a technical framework for e-business. In converged voice
and video markets, Cisco introduced nine new products, including a midrange IP phone and an IP conference station and a
suite of applications that deliver on the promise of Cisco AVVID IP telephony. Cisco has also demonstrated the agility and
scalability of its IP telephony solution with the successful implementation of 20,000 IP phones on the Cisco campuses and a
commercial deployment of more than 8,000 IP phones across 200 locations throughout New Zealand. Cisco also won a
contract through EDS to reconfigure Dow Chemical's network architecture, basing it on Cisco AVVID. The deal includes over
40,000 IP telephones. Cisco continues to work on other large deployments at leading organizations such as Ariba Inc., City of
Dallas, First Union Bank, Florida International University, and the U.S. Census Bureau. Cisco also announced the acquisition
of Active Voice Corporation, a leading provider of IP-based unified messaging solutions for the enterprise.

In the commercial space, Cisco continued its commitment to helping small and medium-sized businesses achieve their full
potential through use of the Internet. Cisco launched the Cisco Internet Mobile Office Initiative that provides mobile business
professionals with secure, high-speed network access to their corporate resources and network from public facilities. Cisco
announced the Cisco Aironet® 350 Series, the first wireless networking family offering enterprise-level security, performance,
and manageability. Cisco collaborated with Microsoft, the largest Cisco wireless LAN deployment to date, on this
standards-based, enterprise-class security architecture for wireless LANs. The University of North Carolina at Chapel Hill is
using the Cisco Aironet 340 Solution to provide students with high-speed wireless access to the Internet all over campus.
Expanding Cisco's leadership in next-generation wireless networking, the company announced during the quarter and
subsequently completed the acquisition of Radiata, Inc., a leading supplier of next-generation chipsets for high-speed wireless
networks. And, in support of its Cisco AVVID initiatives, the company began shipping the Cisco ICS 7750 family of fully
integrated, IP-based telephony solutions in January.

``While we remain cautious about the implications of a brief pause in the current 10-year expansion of the U.S. economy, we
believe that Cisco has never been better positioned to help our customers solve their two most important business issues:
Increasing productivity and creating new sources of revenue,'' concluded Chambers.

Cisco will be discussing its second quarter results, along with its outlook for the third quarter and the remainder of fiscal year
2001, on a conference call today, beginning at 1:45 p.m. PST. A Webcast of the conference call will be available to all
interested parties on the Cisco Web site at www.cisco.com under the ``Investor Relations'' section


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