Table: Reading Cisco's Notes
Cisco's options outstanding rose from 876 million to 1.06 billion over three years. Its annual grants also increased, from 245 million to 320 million.
"Options Outstanding" (left side) tells you that almost a half billion options have strike prices below Cisco's current $17 stock price. "Options Exercisable" reveals that 354 million of these options can be exercised now.
Cisco's official bottom line showed a loss of $1.014 billion of the year ended July 28, 2001, but the loss would have been $2.705 billion. The difference is the cost of the options.
Cisco figures the expected volatility of its stock fell from 40.2% to 34.8% over the past two years. This improves the pro forma earnings in Table 3.