Agenda

1.

2. Agenda Growing Importance of ERM Cisco�s ERM Program Our ERM Process FY07 Plans Success Story

3. The Growing Influence of Risk Management

4. Primary Drivers for Implementing ERM*

5. Highest Priority ERM Objectives*

6. At Most Companies, ERM is Still a Work in Progress ERM efforts are still in their infancy at many companies and face many constraints Depending on the company, it takes three to five years to fully integrate and operationalize advanced risk practices The cost of developing and building an ERM framework is not insubstantial Many firms consider specific risks within certain business units, but they rarely examine risk strategies at the company-wide level

7. Cisco�s ERM Organization Led by Chris Kite, VP, Global Risk Management/Workplace Resources Dotted line reporting into the Board of Directors Virtual Multi-disciplined global team Corporate Executive Sponsors Randy Pond � COO Dennis Powell - CFO Meet Regularly with Executive Sponsors and Risk Review Group RRG = ICS, IT, Finance, HR & Supply Chain Report Quarterly to Audit Committee and Investment Committee

8. Risk

9. ERM at Cisco

10. Cisco Worldwide (end of Q3 FY�07) WW Headcount 56,127 employees*(35% Engineering, 32% Sales, 33% all others) San Jose Headcount: 20,021 employees* WW Portfolio: 17.96 million sf** 277 metros in 80 countries 419 buildings San Jose Portfolio: 48 buildings 6.0 millions sf ** FACTOIDS: For our �Net In-Service� portfolio, Globally we are in 80 Countries 277 Metros 306 Cities 341 Sites 419 Buildings Total Leased sq ft is 6,803,753 Total Owned sq ft is 11,157,067 (all space reported as "Net in Service�*) for a total of 17,960,820 In San Jose we are in 48 buildings Total Leased "Net in Service" sq ft is 232,233 Total Owned "Net in Service" sq ft is 5,969,174 Expansion space breaks down as follows: P&A: 410,000 Maxtor: 332,000 N. 1st (not approved): 116,000 (�Net-in-Service� SF includes all Cisco owned or leased space except for: space held in reserves, construction in progress, space leased to third parties, and land.) For our Total Portfolio which includes space held in reserves, construction in progress, space leased to third parties, and land, we are in the following: Global 81 countries 284 Metros 325 Cities 384 Sites 502 Properties (Buildings & Land Holdings) Total Portfolio Square Footage breaks down as follows. CIP 679,854 Land 11,441,822 Leased to 3rd Party 708,005 Net In-Service 17,960,820 Reserved 1,392,621 Unknown 103,591 Grand Total 32,286,713 San Jose 1 Metros 5 Cities (San Jose, Milpitas, Mountain View, Santa Clara, Sunnyvale) 1 Campus 7 Sites + 10 standalone leased buildings 54 Properties (Buildings & Land Holdings) Total Leased sq ft is 441,385 Total Owned sq ft is 9,358,174 Core R&D sites: CDO/Total PH (as of 3/31/2007) : San Jose: 9,176/20,140 Richardson (Dallas), TX: 592/1,219 RTP (Research Triangle Park), NC: 1,341/4,125 Boxborough (Boston), MA: 1,073/1,639 Tel Aviv, IS: 547/660 Bangalore, IN: 1,497/2,368 Shanghai, CH: 353/554 WPR Expense $181,408,358 down .24% vs prior qtr and up 7.95% vs Year ago Seat Capacity (1-1, Net In Service) 67,558 WPR Expense/PH $13,641 WPR Expense/Seat $11,333 WPR Expense/SqFt $42.63 SqFt/PH 320 SqFt/Seat 266 PH/Seat 0.83 Number of Active Projects: 403 Value of Active Projects: $772,680,847 FACTOIDS: For our �Net In-Service� portfolio, Globally we are in 80 Countries 277 Metros 306 Cities 341 Sites 419 Buildings Total Leased sq ft is 6,803,753 Total Owned sq ft is 11,157,067 (all space reported as "Net in Service�*) for a total of 17,960,820 In San Jose we are in 48 buildings Total Leased "Net in Service" sq ft is 232,233 Total Owned "Net in Service" sq ft is 5,969,174 Expansion space breaks down as follows: P&A: 410,000 Maxtor: 332,000 N. 1st (not approved): 116,000 (�Net-in-Service� SF includes all Cisco owned or leased space except for: space held in reserves, construction in progress, space leased to third parties, and land.) For our Total Portfolio which includes space held in reserves, construction in progress, space leased to third parties, and land, we are in the following: Global 81 countries 284 Metros 325 Cities 384 Sites 502 Properties (Buildings & Land Holdings) Total Portfolio Square Footage breaks down as follows. CIP 679,854 Land 11,441,822 Leased to 3rd Party 708,005 Net In-Service 17,960,820 Reserved 1,392,621 Unknown 103,591 Grand Total 32,286,713 San Jose 1 Metros 5 Cities (San Jose, Milpitas, Mountain View, Santa Clara, Sunnyvale) 1 Campus 7 Sites + 10 standalone leased buildings 54 Properties (Buildings & Land Holdings) Total Leased sq ft is 441,385 Total Owned sq ft is 9,358,174 Core R&D sites: CDO/Total PH (as of 3/31/2007) : San Jose: 9,176/20,140 Richardson (Dallas), TX: 592/1,219 RTP (Research Triangle Park), NC: 1,341/4,125 Boxborough (Boston), MA: 1,073/1,639 Tel Aviv, IS: 547/660 Bangalore, IN: 1,497/2,368 Shanghai, CH: 353/554 WPR Expense $181,408,358 down .24% vs prior qtr and up 7.95% vs Year ago Seat Capacity (1-1, Net In Service) 67,558 WPR Expense/PH $13,641 WPR Expense/Seat $11,333 WPR Expense/SqFt $42.63 SqFt/PH 320 SqFt/Seat 266 PH/Seat 0.83 Number of Active Projects: 403 Value of Active Projects: $772,680,847

11. Enterprise Risk Management

12. Cisco�s Integrated ERM Framework Integrate ERM in Corporate Compliance and Governance Activities Integrate key risk processes and systems Understand Cisco�s risk appetite Sustain a risk-based approach to improving and managing Corporate compliance and governance Use Risk Review Group to increase multi-disciplinary risk education, awareness and information sharing

13. Cisco�s ERM Process Determine priorities for ERM via Risk Review Group and Board Identify Executive Sponsor in area to be assessed Interview key executives in multiple functional areas re: their perceptions of key risks facing the company and their quantification of the probability, severity and current management effectiveness at managing the risk � the discussion is the most important aspect Consolidate interview results, identify key risks and report back to Executive Sponsor and collect feedback Share final report with Corporate Executive Sponsors and Audit Committee Facilitate discussions/workshops with risk owners wrt decisions re: identified key risks Track progress via Ops Reviews, Risk Review Group, Internal Audit Schedule and integrate with business planning

14. Assessment Criteria: Probability, Severity and Management Effectiveness

16. FY07 ERM Objectives Enhance understanding of risks affecting theatres & subsidiaries & the drivers of those risks Raise the level of ERM awareness & education within Cisco & externally Integrate risk management with existing processes � investment management, strategic planning & business development Continue to integrate risk management with line management processes

17. ERM Success Story ERM group invited to participate in workshops with the Emerging Markets Group to help executives understand the risks the company faced. Emerging Markets (EM) sales team asked ERM to help build risk into its decision-making models. As part of the overall go-to-market strategy, an Emerging Countries Council was put in place to govern doing business in these developing countries. Risk, specifically safety and security and ethics risks are quantified and discussed as part of the overall decision making process. Developed ten key quantifiable variables to help drive a more risk-informed decision-making process. Macroeconomic � credit, interest rates, foreign exchange, Political and Ethical � fraud and competitor, expropriation Operational � regulatory, complexity, health & safety Strategic � early mover advantage, marketplace (partners), brand reputation/IP The ultimate goal is to be able to allocate resources more effectively and to answer the question of in which countries should the company be devoting which resources.