Key questions and answers from the third quarter earnings call conducted by Cisco Systems Inc. (CSCO: chart) on May 6, 2008.

Inder Singh (Lehman Brothers): How are you managing your expense line in light of, the environment that you are seeing now?

John Chambers: We are going to be aggressive in expenses. We get no benefit from currency in terms of our top line, the revenue growth. When many of our peers have got as much as 6%, or7% or 8% of their growth out of a currency, we did not.

But we did unfortunately get about 3% of our growth, on the expense side from the currencies where we pay our salaries in local currency. We are going to however continue to be aggressive while staying with financial models, the 36% to 37% and staying within our gross margin guidance.

Ehud Gelblum (JPMorgan): How are you going to reaccelerate growth in some of the areas?

John Chambers: Asia-Pacific is accelerating and so the investments that we are making in certain emerging countries in Asia-Pacific were very solid and we saw that results for Asia-Pacific is back growing comfortably.

In terms of the emerging markets, they are always going to be lumpy but overtime, will continue to grow at twice the growth rate of our core markets if you will. If you look in terms of the growth on the network, the video growth how seriously other are going to evolve etcetera, you will have to spin in those areas.

The two areas that let us into the slowdown, which were the financial services and the manufacturing sector actually had their best growth in mid teens. And, now you are seeing in the area such as transportation and hospitality slow a little bit more.

Scott Coleman (Morgan Stanley): What does the pipeline look like going into the fourth quarter?

Frank Calderoni: The pipeline looks very solid. The key is your close rate, just is as good as normal where it is going to takes you a little bit longer to get the closest. Our peers now at the industry are getting the growth, they are getting the growth in services. They are getting the growth in data center consolidation.

They are getting the growth into new technologies. So we just made a series of initial product announcements in the data center. And doing that in partnership with some of our large players in the data center as well, and stay tuned in terms of how that is a successful course over the next 12 to 18 months.

So that's kind of how I'd put all together if you put together the various pieces in terms of our growth opportunities, some of the trade-offs and what we are seeing him.

Dawood (UBS): Regarding your commercial business, your SMB business, it has been coming down in terms of growth rate over the last three quarters. Can you comment on that?

John Chambers: It was 18% on a total global basis. What we are also doing is breaking the commercial business into two segments what we call medium, commercial and small commercial.

So, you will see us beginning next quarter to focus on small as a separate market than regular commercial and we are clearly making that one of our $10 billion type of opportunities in terms of our accounts show on that but we are starting from the low base with low market share.

Commercial tends to be a market if your customers business is good, they spend, and if their business is not as good they do not spend. So it will react different into the various theatres based on where you were. In Asia Pacific commercial grew at 30% because their economies are doing well and at the emerging markets grew at 20%, because the economies are also doing well.

And commercial and European markets it grew in the about 27% and again you see good balance. It was challenging in the US in terms of the commercial business only growing 13%.

We have got to continue to be active and to continue to be both effective in bringing new products to market, developing new channels especially in the small market and continuing to be acquisitive in this market as well.

Mark Sue (RBC Capital Markets): Can you give us your thoughts on the duration of the spending costs in the US, and if you think the situation still looks short lived and contained?

John Chambers: Our views have not changed dramatically since early February when we shared with you, we thought that the US would see some bumps here that would last two to three quarters the most likely scenario and by the end of the calendar year most likely scenario was that it will be turning back up.