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Shares of Common Stock | Common Stock and Additional Paid-In Capital | Retained Earnings | Total Cisco Shareholders’ Equity | |||||||||||
Repurchases of common stock under the repurchase program | 4,443 | $ | 22,615 | $ | 70,064 | $ | 92,679 |
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1. | Basis of Presentation |
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2. | Summary of Significant Accounting Policies |
Asset Category | Period | |
Buildings | 25 years | |
Building improvements | 10 years | |
Leasehold improvements | Shorter of remaining lease term or up to 10 years | |
Computer equipment and related software | 30 to 36 months | |
Production, engineering, and other equipment | Up to 5 years | |
Operating lease assets | Based on lease term | |
Furniture and fixtures | 5 years |
▪ | Revenue recognition |
▪ | Allowances for accounts receivable, sales returns, and financing receivables |
▪ | Inventory valuation and liability for purchase commitments with contract manufacturers and suppliers |
▪ | Loss contingencies and product warranties |
▪ | Fair value measurements and other-than-temporary impairments |
▪ | Goodwill and purchased intangible asset impairments |
▪ | Income taxes |
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3. | Acquisitions and Divestitures |
(a) | Acquisition Summary |
Fiscal 2015 | Purchase Consideration | Net Liabilities Assumed | Purchased Intangible Assets | Goodwill | |||||||||||
Metacloud | $ | 149 | $ | (7 | ) | $ | 29 | $ | 127 | ||||||
All others (five in total) | 185 | (13 | ) | 70 | 128 | ||||||||||
Total acquisitions | $ | 334 | $ | (20 | ) | $ | 99 | $ | 255 |
Fiscal 2014 | Purchase Consideration | Net Tangible Assets Acquired (Liabilities Assumed) | Purchased Intangible Assets | Goodwill | |||||||||||
Composite Software | $ | 160 | $ | (10 | ) | $ | 75 | $ | 95 | ||||||
Sourcefire | 2,449 | 81 | 577 | 1,791 | |||||||||||
WhipTail | 351 | (34 | ) | 105 | 280 | ||||||||||
Tail-f | 167 | (7 | ) | 61 | 113 | ||||||||||
All others (four in total) | 54 | (5 | ) | 20 | 39 | ||||||||||
Total acquisitions | $ | 3,181 | $ | 25 | $ | 838 | $ | 2,318 |
Fiscal 2013 | Purchase Consideration | Net Liabilities Assumed | Purchased Intangible Assets | Goodwill | |||||||||||
NDS | $ | 5,005 | $ | (185 | ) | $ | 1,746 | $ | 3,444 | ||||||
Meraki | 974 | (59 | ) | 289 | 744 | ||||||||||
Intucell | 360 | (23 | ) | 106 | 277 | ||||||||||
Ubiquisys | 280 | (30 | ) | 123 | 187 | ||||||||||
All others (nine in total) | 363 | (25 | ) | 127 | 261 | ||||||||||
Total acquisitions | $ | 6,982 | $ | (322 | ) | $ | 2,391 | $ | 4,913 |
(b) | Pending Acquisitions and Divestitures |
(c) | Other Acquisition and Divestiture Information |
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4. | Goodwill and Purchased Intangible Assets |
(a) | Goodwill |
Balance at July 26, 2014 | Acquisitions | Other | Balance at July 25, 2015 | ||||||||||||
Americas | $ | 15,080 | $ | 145 | $ | (13 | ) | $ | 15,212 | ||||||
EMEA | 5,715 | 84 | (8 | ) | 5,791 | ||||||||||
APJC | 3,444 | 26 | (4 | ) | 3,466 | ||||||||||
Total | $ | 24,239 | $ | 255 | $ | (25 | ) | $ | 24,469 |
Balance at July 27, 2013 | Acquisitions | Other | Balance at July 26, 2014 | ||||||||||||
Americas | $ | 13,800 | $ | 1,275 | $ | 5 | $ | 15,080 | |||||||
EMEA | 5,037 | 681 | (3 | ) | 5,715 | ||||||||||
APJC | 3,082 | 362 | — | 3,444 | |||||||||||
Total | $ | 21,919 | $ | 2,318 | $ | 2 | $ | 24,239 |
(b) | Purchased Intangible Assets |
FINITE LIVES | INDEFINITE LIVES | TOTAL | |||||||||||||||||||||||
TECHNOLOGY | CUSTOMER RELATIONSHIPS | OTHER | IPR&D | ||||||||||||||||||||||
Fiscal 2015 | Weighted- Average Useful Life (in Years) | Amount | Weighted- Average Useful Life (in Years) | Amount | Weighted- Average Useful Life (in Years) | Amount | Amount | Amount | |||||||||||||||||
Metacloud | 3.0 | $ | 24 | 5.0 | $ | 3 | 0.0 | $ | — | $ | 2 | $ | 29 | ||||||||||||
All others (five in total) | 4.7 | 48 | 7.8 | 12 | 5.8 | 6 | 4 | 70 | |||||||||||||||||
Total | $ | 72 | $ | 15 | $ | 6 | $ | 6 | $ | 99 |
FINITE LIVES | INDEFINITE LIVES | TOTAL | |||||||||||||||||||||||
TECHNOLOGY | CUSTOMER RELATIONSHIPS | OTHER | IPR&D | ||||||||||||||||||||||
Fiscal 2014 | Weighted- Average Useful Life (in Years) | Amount | Weighted- Average Useful Life (in Years) | Amount | Weighted- Average Useful Life (in Years) | Amount | Amount | Amount | |||||||||||||||||
Composite Software | 6.0 | $ | 60 | 3.9 | $ | 14 | 0.0 | $ | — | $ | 1 | $ | 75 | ||||||||||||
Sourcefire | 7.0 | 400 | 5.0 | 129 | 3.0 | 26 | 22 | 577 | |||||||||||||||||
WhipTail | 5.0 | 63 | 5.0 | 1 | 2.7 | 3 | 38 | 105 | |||||||||||||||||
Tail-f | 7.0 | 55 | 6.8 | 6 | 0.0 | — | — | 61 | |||||||||||||||||
All others (four in total) | 3.6 | 18 | 4.0 | 2 | 0.0 | — | — | 20 | |||||||||||||||||
Total | $ | 596 | $ | 152 | $ | 29 | $ | 61 | $ | 838 |
July 25, 2015 | Gross | Accumulated Amortization | Net | |||||||||
Purchased intangible assets with finite lives: | ||||||||||||
Technology | $ | 3,418 | $ | (1,818 | ) | $ | 1,600 | |||||
Customer relationships | 1,699 | (971 | ) | 728 | ||||||||
Other | 55 | (24 | ) | 31 | ||||||||
Total purchased intangible assets with finite lives | 5,172 | (2,813 | ) | 2,359 | ||||||||
In-process research and development, with indefinite lives | 17 | — | 17 | |||||||||
Total | $ | 5,189 | $ | (2,813 | ) | $ | 2,376 |
July 26, 2014 | Gross | Accumulated Amortization | Net | |||||||||
Purchased intangible assets with finite lives: | ||||||||||||
Technology | $ | 4,100 | $ | (1,976 | ) | $ | 2,124 | |||||
Customer relationships | 1,706 | (720 | ) | 986 | ||||||||
Other | 51 | (13 | ) | 38 | ||||||||
Total purchased intangible assets with finite lives | 5,857 | (2,709 | ) | 3,148 | ||||||||
In-process research and development, with indefinite lives | 132 | — | 132 | |||||||||
Total | $ | 5,989 | $ | (2,709 | ) | $ | 3,280 |
Years Ended | July 25, 2015 | July 26, 2014 | July 27, 2013 | |||||||||
Amortization of purchased intangible assets: | ||||||||||||
Cost of sales | $ | 814 | $ | 742 | $ | 606 | ||||||
Operating expenses | 359 | 275 | 395 | |||||||||
Total | $ | 1,173 | $ | 1,017 | $ | 1,001 |
Fiscal Year | Amount | ||
2016 | $ | 770 | |
2017 | 596 | ||
2018 | 453 | ||
2019 | 357 | ||
2020 | 140 | ||
Thereafter | 43 | ||
Total | $ | 2,359 |
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5. | Restructuring and Other Charges |
FISCAL 2014 AND FISCAL 2011 PLANS | FISCAL 2015 PLAN | |||||||||||||||||||
Employee Severance | Other | Employee Severance | Other | Total | ||||||||||||||||
Liability as of July 28, 2012 | $ | 83 | $ | 27 | $ | — | $ | — | $ | 110 | ||||||||||
Charges | 111 | (6 | ) | — | — | 105 | ||||||||||||||
Cash payments | (173 | ) | (11 | ) | — | — | (184 | ) | ||||||||||||
Non-cash items | — | (3 | ) | — | — | (3 | ) | |||||||||||||
Liability as of July 27, 2013 | 21 | 7 | — | — | 28 | |||||||||||||||
Charges | 366 | 52 | — | — | 418 | |||||||||||||||
Cash payments | (345 | ) | (7 | ) | — | — | (352 | ) | ||||||||||||
Non-cash items | (2 | ) | (23 | ) | — | — | (25 | ) | ||||||||||||
Liability as of July 26, 2014 | 40 | 29 | — | — | 69 | |||||||||||||||
Charges | — | — | 464 | 20 | 484 | |||||||||||||||
Cash payments | (29 | ) | (14 | ) | (413 | ) | (3 | ) | (459 | ) | ||||||||||
Non-cash items | — | (1 | ) | (2 | ) | (2 | ) | (5 | ) | |||||||||||
Liability as of July 25, 2015 | $ | 11 | $ | 14 | $ | 49 | $ | 15 | $ | 89 |
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6. | Balance Sheet Details |
July 25, 2015 | July 26, 2014 | |||||||
Inventories: | ||||||||
Raw materials | $ | 114 | $ | 77 | ||||
Work in process | 2 | 5 | ||||||
Finished goods: | ||||||||
Distributor inventory and deferred cost of sales | 610 | 595 | ||||||
Manufactured finished goods | 593 | 606 | ||||||
Total finished goods | 1,203 | 1,201 | ||||||
Service-related spares | 258 | 273 | ||||||
Demonstration systems | 50 | 35 | ||||||
Total | $ | 1,627 | $ | 1,591 |
Property and equipment, net: | ||||||||
Gross property and equipment: | ||||||||
Land, buildings, and building and leasehold improvements | $ | 4,495 | $ | 4,468 | ||||
Computer equipment and related software | 1,310 | 1,425 | ||||||
Production, engineering, and other equipment | 5,753 | 5,756 | ||||||
Operating lease assets | 372 | 362 | ||||||
Furniture and fixtures | 497 | 509 | ||||||
Total gross property and equipment | 12,427 | 12,520 | ||||||
Less: accumulated depreciation and amortization | (9,095 | ) | (9,268 | ) | ||||
Total | $ | 3,332 | $ | 3,252 |
Other assets: | ||||||||
Deferred tax assets | $ | 1,648 | $ | 1,700 | ||||
Investments in privately held companies | 897 | 899 | ||||||
Other | 618 | 668 | ||||||
Total | $ | 3,163 | $ | 3,267 |
Deferred revenue: | ||||||||
Service | $ | 9,757 | $ | 9,640 | ||||
Product: | ||||||||
Unrecognized revenue on product shipments and other deferred revenue | 4,766 | 3,924 | ||||||
Cash receipts related to unrecognized revenue from two-tier distributors | 660 | 578 | ||||||
Total product deferred revenue | 5,426 | 4,502 | ||||||
Total | $ | 15,183 | $ | 14,142 | ||||
Reported as: | ||||||||
Current | $ | 9,824 | $ | 9,478 | ||||
Noncurrent | 5,359 | 4,664 | ||||||
Total | $ | 15,183 | $ | 14,142 |
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7. | Financing Receivables and Operating Leases |
(a) | Financing Receivables |
July 25, 2015 | Lease Receivables | Loan Receivables | Financed Service Contracts and Other | Total | |||||||||||
Gross | $ | 3,361 | $ | 1,763 | $ | 3,573 | $ | 8,697 | |||||||
Residual value | 224 | — | — | 224 | |||||||||||
Unearned income | (190 | ) | — | — | (190 | ) | |||||||||
Allowance for credit loss | (259 | ) | (87 | ) | (36 | ) | (382 | ) | |||||||
Total, net | $ | 3,136 | $ | 1,676 | $ | 3,537 | $ | 8,349 | |||||||
Reported as: | |||||||||||||||
Current | $ | 1,468 | $ | 856 | $ | 2,167 | $ | 4,491 | |||||||
Noncurrent | 1,668 | 820 | 1,370 | 3,858 | |||||||||||
Total, net | $ | 3,136 | $ | 1,676 | $ | 3,537 | $ | 8,349 |
July 26, 2014 | Lease Receivables | Loan Receivables | Financed Service Contracts and Other | Total | |||||||||||
Gross | $ | 3,532 | $ | 1,683 | $ | 3,210 | $ | 8,425 | |||||||
Residual value | 233 | — | — | 233 | |||||||||||
Unearned income | (238 | ) | — | — | (238 | ) | |||||||||
Allowance for credit loss | (233 | ) | (98 | ) | (18 | ) | (349 | ) | |||||||
Total, net | $ | 3,294 | $ | 1,585 | $ | 3,192 | $ | 8,071 | |||||||
Reported as: | |||||||||||||||
Current | $ | 1,476 | $ | 728 | $ | 1,949 | $ | 4,153 | |||||||
Noncurrent | 1,818 | 857 | 1,243 | 3,918 | |||||||||||
Total, net | $ | 3,294 | $ | 1,585 | $ | 3,192 | $ | 8,071 |
Fiscal Year | Amount | ||
2016 | $ | 1,613 | |
2017 | 999 | ||
2018 | 503 | ||
2019 | 202 | ||
2020 | 44 | ||
Total | $ | 3,361 |
(b) | Credit Quality of Financing Receivables |
INTERNAL CREDIT RISK RATING | |||||||||||||||
July 25, 2015 | 1 to 4 | 5 to 6 | 7 and Higher | Total | |||||||||||
Lease receivables | $ | 1,688 | $ | 1,342 | $ | 141 | $ | 3,171 | |||||||
Loan receivables | 788 | 823 | 152 | 1,763 | |||||||||||
Financed service contracts and other | 2,133 | 1,389 | 51 | 3,573 | |||||||||||
Total | $ | 4,609 | $ | 3,554 | $ | 344 | $ | 8,507 |
INTERNAL CREDIT RISK RATING | |||||||||||||||
July 26, 2014 | 1 to 4 | 5 to 6 | 7 and Higher | Total | |||||||||||
Lease receivables | $ | 1,615 | $ | 1,538 | $ | 141 | $ | 3,294 | |||||||
Loan receivables | 953 | 593 | 137 | 1,683 | |||||||||||
Financed service contracts and other | 1,744 | 1,367 | 99 | 3,210 | |||||||||||
Total | $ | 4,312 | $ | 3,498 | $ | 377 | $ | 8,187 |
DAYS PAST DUE (INCLUDES BILLED AND UNBILLED) | |||||||||||||||||||||||||||||||
July 25, 2015 | 31 - 60 | 61 - 90 | 91+ | Total Past Due | Current | Total | Nonaccrual Financing Receivables | Impaired Financing Receivables | |||||||||||||||||||||||
Lease receivables | $ | 90 | $ | 27 | $ | 185 | $ | 302 | $ | 2,869 | $ | 3,171 | $ | 73 | $ | 73 | |||||||||||||||
Loan receivables | 21 | 3 | 25 | 49 | 1,714 | 1,763 | 32 | 32 | |||||||||||||||||||||||
Financed service contracts and other | 396 | 152 | 414 | 962 | 2,611 | 3,573 | 29 | 9 | |||||||||||||||||||||||
Total | $ | 507 | $ | 182 | $ | 624 | $ | 1,313 | $ | 7,194 | $ | 8,507 | $ | 134 | $ | 114 |
DAYS PAST DUE (INCLUDES BILLED AND UNBILLED) | |||||||||||||||||||||||||||||||
July 26, 2014 | 31 - 60 | 61 - 90 | 91+ | Total Past Due | Current | Total | Nonaccrual Financing Receivables | Impaired Financing Receivables | |||||||||||||||||||||||
Lease receivables | $ | 63 | $ | 46 | $ | 202 | $ | 311 | $ | 2,983 | $ | 3,294 | $ | 48 | $ | 41 | |||||||||||||||
Loan receivables | 3 | 21 | 27 | 51 | 1,632 | 1,683 | 19 | 19 | |||||||||||||||||||||||
Financed service contracts and other | 268 | 230 | 220 | 718 | 2,492 | 3,210 | 12 | 9 | |||||||||||||||||||||||
Total | $ | 334 | $ | 297 | $ | 449 | $ | 1,080 | $ | 7,107 | $ | 8,187 | $ | 79 | $ | 69 |
(c) | Allowance for Credit Loss Rollforward |
CREDIT LOSS ALLOWANCES | |||||||||||||||
Lease Receivables | Loan Receivables | Financed Service Contracts and Other | Total | ||||||||||||
Allowance for credit loss as of July 26, 2014 | $ | 233 | $ | 98 | $ | 18 | $ | 349 | |||||||
Provisions | 45 | (8 | ) | 20 | 57 | ||||||||||
Recoveries (write-offs), net | (7 | ) | 1 | (1 | ) | (7 | ) | ||||||||
Foreign exchange and other | (12 | ) | (4 | ) | (1 | ) | (17 | ) | |||||||
Allowance for credit loss as of July 25, 2015 | $ | 259 | $ | 87 | $ | 36 | $ | 382 | |||||||
Financing receivables as of July 25, 2015 (1) | $ | 3,395 | $ | 1,763 | $ | 3,573 | $ | 8,731 |
CREDIT LOSS ALLOWANCES | |||||||||||||||
Lease Receivables | Loan Receivables | Financed Service Contracts and Other | Total | ||||||||||||
Allowance for credit loss as of July 27, 2013 | $ | 238 | $ | 86 | $ | 20 | $ | 344 | |||||||
Provisions | 4 | 9 | 1 | 14 | |||||||||||
Recoveries (write-offs), net | (11 | ) | 5 | (3 | ) | (9 | ) | ||||||||
Foreign exchange and other | 2 | (2 | ) | — | — | ||||||||||
Allowance for credit loss as of July 26, 2014 | $ | 233 | $ | 98 | $ | 18 | $ | 349 | |||||||
Financing receivables as of July 26, 2014 (1) | $ | 3,527 | $ | 1,683 | $ | 3,210 | $ | 8,420 |
CREDIT LOSS ALLOWANCES | |||||||||||||||
Lease Receivables | Loan Receivables | Financed Service Contracts and Other | Total | ||||||||||||
Allowance for credit loss as of July 28, 2012 | $ | 247 | $ | 122 | $ | 11 | $ | 380 | |||||||
Provisions | 21 | (20 | ) | 10 | 11 | ||||||||||
Recoveries (write-offs), net | (30 | ) | (15 | ) | (1 | ) | (46 | ) | |||||||
Foreign exchange and other | — | (1 | ) | — | (1 | ) | |||||||||
Allowance for credit loss as of July 27, 2013 | $ | 238 | $ | 86 | $ | 20 | $ | 344 | |||||||
Financing receivables as of July 27, 2013 (1) | $ | 3,507 | $ | 1,649 | $ | 3,136 | $ | 8,292 |
(d) | Operating Leases |
July 25, 2015 | July 26, 2014 | ||||||
Operating lease assets | $ | 372 | $ | 362 | |||
Accumulated depreciation | (205 | ) | (202 | ) | |||
Operating lease assets, net | $ | 167 | $ | 160 |
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8. | Investments |
(a) | Summary of Available-for-Sale Investments |
July 25, 2015 | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||
Fixed income securities: | |||||||||||||||
U.S. government securities | $ | 29,904 | $ | 41 | $ | (6 | ) | $ | 29,939 | ||||||
U.S. government agency securities | 3,662 | 2 | (1 | ) | 3,663 | ||||||||||
Non-U.S. government and agency securities | 1,128 | 1 | (1 | ) | 1,128 | ||||||||||
Corporate debt securities | 15,802 | 34 | (53 | ) | 15,783 | ||||||||||
U.S. agency mortgage-backed securities | 1,456 | 8 | (3 | ) | 1,461 | ||||||||||
Total fixed income securities | 51,952 | 86 | (64 | ) | 51,974 | ||||||||||
Publicly traded equity securities | 1,092 | 480 | (7 | ) | 1,565 | ||||||||||
Total | $ | 53,044 | $ | 566 | $ | (71 | ) | $ | 53,539 | ||||||
July 26, 2014 | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||
Fixed income securities: | |||||||||||||||
U.S. government securities | $ | 31,717 | $ | 29 | $ | (12 | ) | $ | 31,734 | ||||||
U.S. government agency securities | 1,062 | 1 | — | 1,063 | |||||||||||
Non-U.S. government and agency securities | 860 | 2 | (1 | ) | 861 | ||||||||||
Corporate debt securities | 9,092 | 74 | (7 | ) | 9,159 | ||||||||||
U.S. agency mortgage-backed securities | 574 | 5 | — | 579 | |||||||||||
Total fixed income securities | 43,305 | 111 | (20 | ) | 43,396 | ||||||||||
Publicly traded equity securities | 1,314 | 648 | (10 | ) | 1,952 | ||||||||||
Total | $ | 44,619 | $ | 759 | $ | (30 | ) | $ | 45,348 |
(b) | Gains and Losses on Available-for-Sale Investments |
Years Ended | July 25, 2015 | July 26, 2014 | July 27, 2013 | ||||||||
Gross realized gains | $ | 221 | $ | 341 | $ | 264 | |||||
Gross realized losses | (64 | ) | (41 | ) | (216 | ) | |||||
Total | $ | 157 | $ | 300 | $ | 48 |
Years Ended | July 25, 2015 | July 26, 2014 | July 27, 2013 | ||||||||
Net gains on investments in publicly traded equity securities | $ | 116 | $ | 253 | $ | 17 | |||||
Net gains on investments in fixed income securities | 41 | 47 | 31 | ||||||||
Total | $ | 157 | $ | 300 | $ | 48 |
UNREALIZED LOSSES LESS THAN 12 MONTHS | UNREALIZED LOSSES 12 MONTHS OR GREATER | TOTAL | |||||||||||||||||||||
July 25, 2015 | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | |||||||||||||||||
Fixed income securities: | |||||||||||||||||||||||
U.S. government securities | $ | 6,412 | $ | (6 | ) | $ | — | $ | — | $ | 6,412 | $ | (6 | ) | |||||||||
U.S. government agency securities | 1,433 | (1 | ) | — | — | 1,433 | (1 | ) | |||||||||||||||
Non-U.S. government and agency securities | 515 | (1 | ) | 4 | — | 519 | (1 | ) | |||||||||||||||
Corporate debt securities | 9,552 | (49 | ) | 312 | (4 | ) | 9,864 | (53 | ) | ||||||||||||||
U.S. agency mortgage-backed securities | 579 | (3 | ) | — | — | 579 | (3 | ) | |||||||||||||||
Total fixed income securities | 18,491 | (60 | ) | 316 | (4 | ) | 18,807 | (64 | ) | ||||||||||||||
Publicly traded equity securities | 108 | (7 | ) | 2 | — | 110 | (7 | ) | |||||||||||||||
Total | $ | 18,599 | $ | (67 | ) | $ | 318 | $ | (4 | ) | $ | 18,917 | $ | (71 | ) |
UNREALIZED LOSSES LESS THAN 12 MONTHS | UNREALIZED LOSSES 12 MONTHS OR GREATER | TOTAL | |||||||||||||||||||||
July 26, 2014 | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | |||||||||||||||||
Fixed income securities: | |||||||||||||||||||||||
U.S. government securities | $ | 7,676 | $ | (12 | ) | $ | 45 | $ | — | $ | 7,721 | $ | (12 | ) | |||||||||
Non-U.S. government and agency securities | 361 | (1 | ) | 22 | — | 383 | (1 | ) | |||||||||||||||
Corporate debt securities | 1,875 | (3 | ) | 491 | (4 | ) | 2,366 | (7 | ) | ||||||||||||||
Total fixed income securities | 9,912 | (16 | ) | 558 | (4 | ) | 10,470 | (20 | ) | ||||||||||||||
Publicly traded equity securities | 132 | (10 | ) | — | — | 132 | (10 | ) | |||||||||||||||
Total | $ | 10,044 | $ | (26 | ) | $ | 558 | $ | (4 | ) | $ | 10,602 | $ | (30 | ) |
(c) | Maturities of Fixed Income Securities |
Amortized Cost | Fair Value | ||||||
Less than 1 year | $ | 16,534 | $ | 16,540 | |||
Due in 1 to 2 years | 15,264 | 15,279 | |||||
Due in 2 to 5 years | 18,501 | 18,499 | |||||
Due after 5 years | 1,653 | 1,656 | |||||
Total | $ | 51,952 | $ | 51,974 |
(d) | Securities Lending |
(e) | Investments in Privately Held Companies |
July 25, 2015 | July 26, 2014 | ||||||
Equity method investments | $ | 578 | $ | 630 | |||
Cost method investments | 319 | 269 | |||||
Total | $ | 897 | $ | 899 |
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9. | Fair Value |
(a) | Assets and Liabilities Measured at Fair Value on a Recurring Basis |
JULY 25, 2015 | JULY 26, 2014 | ||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS | ||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total Balance | Level 1 | Level 2 | Level 3 | Total Balance | ||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||
Cash equivalents: | |||||||||||||||||||||||||||||||
Money market funds | $ | 5,336 | $ | — | $ | — | $ | 5,336 | $ | 4,935 | $ | — | $ | — | $ | 4,935 | |||||||||||||||
Corporate debt securities | — | 14 | — | 14 | — | — | — | — | |||||||||||||||||||||||
Available-for-sale investments: | |||||||||||||||||||||||||||||||
U.S. government securities | — | 29,939 | — | 29,939 | — | 31,734 | — | 31,734 | |||||||||||||||||||||||
U.S. government agency securities | — | 3,663 | — | 3,663 | — | 1,063 | — | 1,063 | |||||||||||||||||||||||
Non-U.S. government and agency securities | — | 1,128 | — | 1,128 | — | 861 | — | 861 | |||||||||||||||||||||||
Corporate debt securities | — | 15,783 | — | 15,783 | — | 9,159 | — | 9,159 | |||||||||||||||||||||||
U.S. agency mortgage-backed securities | — | 1,461 | — | 1,461 | — | 579 | — | 579 | |||||||||||||||||||||||
Publicly traded equity securities | 1,565 | — | — | 1,565 | 1,952 | — | — | 1,952 | |||||||||||||||||||||||
Derivative assets | — | 214 | 4 | 218 | — | 158 | 2 | 160 | |||||||||||||||||||||||
Total | $ | 6,901 | $ | 52,202 | $ | 4 | $ | 59,107 | $ | 6,887 | $ | 43,554 | $ | 2 | $ | 50,443 | |||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||
Derivative liabilities | $ | — | $ | 12 | $ | — | $ | 12 | $ | — | $ | 67 | $ | — | $ | 67 | |||||||||||||||
Total | $ | — | $ | 12 | $ | — | $ | 12 | $ | — | $ | 67 | $ | — | $ | 67 |
(b) | Assets Measured at Fair Value on a Nonrecurring Basis |
TOTAL GAINS (LOSSES) FOR THE YEARS ENDED | |||||||||||
July 25, 2015 | July 26, 2014 | July 27, 2013 | |||||||||
Investments in privately held companies (impaired) | $ | (38 | ) | $ | (21 | ) | $ | (31 | ) | ||
Purchased intangible assets (impaired) | (175 | ) | — | — | |||||||
Property held for sale—land and buildings | — | — | (1 | ) | |||||||
Gains (losses) on assets no longer held at end of fiscal year | (8 | ) | (2 | ) | 75 | ||||||
Total gains (losses) for nonrecurring measurements | $ | (221 | ) | $ | (23 | ) | $ | 43 |
(c) | Other Fair Value Disclosures |
|
10. | Borrowings |
(a) | Short-Term Debt |
July 25, 2015 | July 26, 2014 | ||||||||||||
Amount | Effective Rate | Amount | Effective Rate | ||||||||||
Current portion of long-term debt | $ | 3,894 | 2.48 | % | $ | 500 | 3.11 | % | |||||
Other notes and borrowings | 3 | 2.44 | % | 8 | 2.67 | % | |||||||
Total short-term debt | $ | 3,897 | $ | 508 |
(b) | Long-Term Debt |
July 25, 2015 | July 26, 2014 | ||||||||||||
Maturity Date | Amount | Effective Rate | Amount | Effective Rate | |||||||||
Senior notes: | |||||||||||||
Floating-rate notes: | |||||||||||||
Three-month LIBOR plus 0.05% | September 3, 2015 | $ | 850 | 0.43% | $ | 850 | 0.35% | ||||||
Three-month LIBOR plus 0.28% | March 3, 2017 | 1,000 | 0.63% | 1,000 | 0.56% | ||||||||
Three-month LIBOR plus 0.31% | June 15, 2018 | (1) | 900 | 0.65% | — | — | |||||||
Three-month LIBOR plus 0.50% | March 1, 2019 | 500 | 0.84% | 500 | 0.78% | ||||||||
Fixed-rate notes: | |||||||||||||
2.90% | November 17, 2014 | — | — | 500 | 3.11% | ||||||||
5.50% | February 22, 2016 | 3,000 | 3.07% | 3,000 | 3.04% | ||||||||
1.10% | March 3, 2017 | 2,400 | 0.59% | 2,400 | 0.56% | ||||||||
3.15% | March 14, 2017 | 750 | 0.85% | 750 | 0.79% | ||||||||
1.65% | June 15, 2018 | (1) | 1,600 | 1.72% | — | — | |||||||
4.95% | February 15, 2019 | 2,000 | 4.70% | 2,000 | 4.69% | ||||||||
2.125% | March 1, 2019 | 1,750 | 0.80% | 1,750 | 0.77% | ||||||||
4.45% | January 15, 2020 | 2,500 | 3.01% | 2,500 | 2.98% | ||||||||
2.45% | June 15, 2020 | (1) | 1,500 | 2.54% | — | — | |||||||
2.90% | March 4, 2021 | 500 | 0.96% | 500 | 0.93% | ||||||||
3.00% | June 15, 2022 | (1) | 500 | 1.21% | — | — | |||||||
3.625% | March 4, 2024 | 1,000 | 1.08% | 1,000 | 1.05% | ||||||||
3.50% | June 15, 2025 | (1) | 500 | 1.37% | — | — | |||||||
5.90% | February 15, 2039 | 2,000 | 6.11% | 2,000 | 6.11% | ||||||||
5.50% | January 15, 2040 | 2,000 | 5.67% | 2,000 | 5.67% | ||||||||
Other long-term debt | 1 | 2.08% | 4 | 2.39% | |||||||||
Total | 25,251 | 20,754 | |||||||||||
Unaccreted discount/issuance costs | (131 | ) | (127 | ) | |||||||||
Hedge accounting fair value adjustments | 231 | 210 | |||||||||||
Total | $ | 25,351 | $ | 20,837 | |||||||||
Reported as: | |||||||||||||
Current portion of long-term debt | $ | 3,894 | $ | 500 | |||||||||
Long-term debt | 21,457 | 20,337 | |||||||||||
Total | $ | 25,351 | $ | 20,837 |
Fiscal Year | Amount | ||
2016 | $ | 3,850 | |
2017 | 4,151 | ||
2018 | 2,500 | ||
2019 | 4,250 | ||
2020 | 4,000 | ||
Thereafter | 6,500 | ||
Total | $ | 25,251 |
(c) | Credit Facility |
|
11. | Derivative Instruments |
(a) | Summary of Derivative Instruments |
DERIVATIVE ASSETS | DERIVATIVE LIABILITIES | ||||||||||||||||||
Balance Sheet Line Item | July 25, 2015 | July 26, 2014 | Balance Sheet Line Item | July 25, 2015 | July 26, 2014 | ||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||||
Foreign currency derivatives | Other current assets | $ | 10 | $ | 7 | Other current liabilities | $ | 11 | $ | 6 | |||||||||
Interest rate derivatives | Other assets | 202 | 148 | Other long-term liabilities | — | 3 | |||||||||||||
Equity derivatives | Other current assets | — | — | Other current liabilities | — | 56 | |||||||||||||
Total | 212 | 155 | 11 | 65 | |||||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||||
Foreign currency derivatives | Other current assets | 2 | 3 | Other current liabilities | 1 | 2 | |||||||||||||
Equity derivatives | Other assets | 4 | 2 | Other long-term liabilities | — | — | |||||||||||||
Total | 6 | 5 | 1 | 2 | |||||||||||||||
Total | $ | 218 | $ | 160 | $ | 12 | $ | 67 |
GAINS (LOSSES) RECOGNIZED IN OCI ON DERIVATIVES FOR THE YEARS ENDED (EFFECTIVE PORTION) | GAINS (LOSSES) RECLASSIFIED FROM AOCI INTO INCOME FOR THE YEARS ENDED (EFFECTIVE PORTION) | |||||||||||||||||||||||||
July 25, 2015 | July 26, 2014 | July 27, 2013 | Line Item in Statements of Operations | July 25, 2015 | July 26, 2014 | July 27, 2013 | ||||||||||||||||||||
Derivatives designated as cash flow hedging instruments: | ||||||||||||||||||||||||||
Foreign currency derivatives | $ | (159 | ) | $ | 48 | $ | 73 | Operating expenses | $ | (121 | ) | $ | 55 | $ | 10 | |||||||||||
Cost of sales—service | (33 | ) | 13 | 2 | ||||||||||||||||||||||
Total | $ | (159 | ) | $ | 48 | $ | 73 | Total | $ | (154 | ) | $ | 68 | $ | 12 | |||||||||||
Derivatives designated as net investment hedging instruments: | ||||||||||||||||||||||||||
Foreign currency derivatives | $ | 42 | $ | (15 | ) | $ | (1 | ) | Other income (loss), net | $ | — | $ | — | $ | — |
GAINS (LOSSES) ON DERIVATIVE INSTRUMENTS FOR THE YEARS ENDED | GAINS (LOSSES) RELATED TO HEDGED ITEMS FOR THE YEARS ENDED | |||||||||||||||||||||||||
Derivatives Designated as Fair Value Hedging Instruments | Line Item in Statements of Operations | July 25, 2015 | July 26, 2014 | July 27, 2013 | July 25, 2015 | July 26, 2014 | July 27, 2013 | |||||||||||||||||||
Equity derivatives | Other income (loss), net | $ | 56 | $ | (72 | ) | $ | (155 | ) | $ | (56 | ) | $ | 72 | $ | 155 | ||||||||||
Interest rate derivatives | Interest expense | 54 | (2 | ) | (78 | ) | (57 | ) | — | 78 | ||||||||||||||||
Total | $ | 110 | $ | (74 | ) | $ | (233 | ) | $ | (113 | ) | $ | 72 | $ | 233 |
GAINS (LOSSES) FOR THE YEARS ENDED | ||||||||||||||
Derivatives Not Designated as Hedging Instruments | Line Item in Statements of Operations | July 25, 2015 | July 26, 2014 | July 27, 2013 | ||||||||||
Foreign currency derivatives | Other income (loss), net | $ | (173 | ) | $ | 23 | $ | (74 | ) | |||||
Total return swaps—deferred compensation | Operating expenses | 19 | 47 | 61 | ||||||||||
Equity derivatives | Other income (loss), net | 27 | 34 | — | ||||||||||
Total | $ | (127 | ) | $ | 104 | $ | (13 | ) |
July 25, 2015 | July 26, 2014 | ||||||
Derivatives designated as hedging instruments: | |||||||
Foreign currency derivatives—cash flow hedges | $ | 1,201 | $ | 1,618 | |||
Interest rate derivatives | 11,400 | 10,400 | |||||
Net investment hedging instruments | 192 | 345 | |||||
Equity derivatives | — | 238 | |||||
Derivatives not designated as hedging instruments: | |||||||
Foreign currency derivatives | 2,023 | 2,528 | |||||
Total return swaps—deferred compensation | 462 | 428 | |||||
Total | $ | 15,278 | $ | 15,557 |
(b) | Offsetting of Derivative Instruments |
GROSS AMOUNTS OFFSET IN THE CONSOLIDATED BALANCE SHEET | GROSS AMOUNTS NOT OFFSET IN THE CONSOLIDATED BALANCE SHEET BUT WITH LEGAL RIGHTS TO OFFSET | ||||||||||||||||||||||
July 25, 2015 | Gross Amounts Recognized | Gross Amounts Offset | Net Amounts Presented | Gross Derivative Amounts | Cash Collateral | Net Amount | |||||||||||||||||
Derivatives assets | $ | 218 | $ | — | $ | 218 | $ | (12 | ) | $ | (124 | ) | $ | 82 | |||||||||
Derivatives liabilities | $ | 12 | $ | — | $ | 12 | $ | (12 | ) | $ | — | $ | — |
GROSS AMOUNTS OFFSET IN THE CONSOLIDATED BALANCE SHEET | GROSS AMOUNTS NOT OFFSET IN THE CONSOLIDATED BALANCE SHEET BUT WITH LEGAL RIGHTS TO OFFSET | ||||||||||||||||||||||
July 26, 2014 | Gross Amounts Recognized | Gross Amounts Offset | Net Amounts Presented | Gross Derivative Amounts | Cash Collateral | Net Amount | |||||||||||||||||
Derivatives assets | $ | 160 | $ | — | $ | 160 | $ | (39 | ) | $ | (60 | ) | $ | 61 | |||||||||
Derivatives liabilities | $ | 67 | $ | — | $ | 67 | $ | (39 | ) | $ | (1 | ) | $ | 27 |
(c) | Foreign Currency Exchange Risk |
(d) | Interest Rate Risk |
(e) | Equity Price Risk |
(f) | Hedge Effectiveness |
(g) | Collateral and Credit-Risk-Related Contingent Features |
|
12. | Commitments and Contingencies |
(a) | Operating Leases |
Fiscal Year | Amount | ||
2016 | $ | 346 | |
2017 | 254 | ||
2018 | 181 | ||
2019 | 99 | ||
2020 | 79 | ||
Thereafter | 183 | ||
Total | $ | 1,142 |
(b) | Purchase Commitments with Contract Manufacturers and Suppliers |
(c) | Other Commitments |
July 25, 2015 | July 26, 2014 | July 27, 2013 | |||||||||
Compensation expense related to acquisitions | $ | 334 | $ | 607 | $ | 123 |
(d) | Product Warranties |
July 25, 2015 | July 26, 2014 | July 27, 2013 | |||||||||
Balance at beginning of fiscal year | $ | 446 | $ | 402 | $ | 373 | |||||
Provision for warranties issued | 696 | 704 | 649 | ||||||||
Payments | (693 | ) | (660 | ) | (620 | ) | |||||
Balance at end of fiscal year | $ | 449 | $ | 446 | $ | 402 |
(e) | Financing and Other Guarantees |
July 25, 2015 | July 26, 2014 | ||||||
Maximum potential future payments relating to financing guarantees: | |||||||
Channel partner | $ | 288 | $ | 263 | |||
End user | 129 | 202 | |||||
Total | $ | 417 | $ | 465 | |||
Deferred revenue associated with financing guarantees: | |||||||
Channel partner | $ | (127 | ) | $ | (127 | ) | |
End user | (107 | ) | (166 | ) | |||
Total | $ | (234 | ) | $ | (293 | ) | |
Maximum potential future payments relating to financing guarantees, net of associated deferred revenue | $ | 183 | $ | 172 |
(f) | Supplier Component Remediation Liability |
(g) | Indemnifications |
(h) | Legal Proceedings |
|
14. | Employee Benefit Plans |
(a) | Employee Stock Incentive Plans |
(b) | Employee Stock Purchase Plan |
(c) | Summary of Share-Based Compensation Expense |
Years Ended | July 25, 2015 | July 26, 2014 | July 27, 2013 | ||||||||
Cost of sales—product | $ | 50 | $ | 45 | $ | 40 | |||||
Cost of sales—service | 157 | 150 | 138 | ||||||||
Share-based compensation expense in cost of sales | 207 | 195 | 178 | ||||||||
Research and development | 448 | 411 | 286 | ||||||||
Sales and marketing | 559 | 549 | 484 | ||||||||
General and administrative | 228 | 198 | 175 | ||||||||
Restructuring and other charges | (2 | ) | (5 | ) | (3 | ) | |||||
Share-based compensation expense in operating expenses | 1,233 | 1,153 | 942 | ||||||||
Total share-based compensation expense | $ | 1,440 | $ | 1,348 | $ | 1,120 | |||||
Income tax benefit for share-based compensation | $ | 373 | $ | 324 | $ | 285 |
(d) | Share-Based Awards Available for Grant |
Years Ended | July 25, 2015 | July 26, 2014 | July 27, 2013 | |||||
Balance at beginning of fiscal year | 310 | 228 | 218 | |||||
Restricted stock, stock units, and other share-based awards granted | (101 | ) | (98 | ) | (102 | ) | ||
Share-based awards canceled/forfeited/expired | 40 | 36 | 115 | |||||
Additional shares reserved | — | 135 | — | |||||
Shares withheld for taxes and not issued | 27 | 6 | — | |||||
Other | — | 3 | (3 | ) | ||||
Balance at end of fiscal year | 276 | 310 | 228 |
(e) | Restricted Stock and Stock Unit Awards |
Restricted Stock/ Stock Units | Weighted-Average Grant Date Fair Value per Share | Aggregate Fair Value | ||||||||
UNVESTED BALANCE AT JULY 28, 2012 | 128 | $ | 19.46 | |||||||
Granted and assumed | 72 | 18.52 | ||||||||
Vested | (46 | ) | 20.17 | $ | 932 | |||||
Canceled/forfeited | (11 | ) | 18.91 | |||||||
UNVESTED BALANCE AT JULY 27, 2013 | 143 | 18.80 | ||||||||
Granted and assumed | 72 | 20.85 | ||||||||
Vested | (53 | ) | 19.55 | $ | 1,229 | |||||
Canceled/forfeited | (13 | ) | 18.61 | |||||||
UNVESTED BALANCE AT JULY 26, 2014 | 149 | 19.54 | ||||||||
Granted and assumed | 67 | 25.29 | ||||||||
Vested | (57 | ) | 19.82 | $ | 1,517 | |||||
Canceled/forfeited | (16 | ) | 20.17 | |||||||
UNVESTED BALANCE AT JULY 25, 2015 | 143 | $ | 22.08 |
(f) | Stock Option Awards |
STOCK OPTIONS OUTSTANDING | ||||||
Number Outstanding | Weighted-Average Exercise Price per Share | |||||
BALANCE AT JULY 28, 2012 | 520 | $ | 22.68 | |||
Assumed from acquisitions | 10 | 0.77 | ||||
Exercised | (154 | ) | 18.51 | |||
Canceled/forfeited/expired | (100 | ) | 22.18 | |||
BALANCE AT JULY 27, 2013 | 276 | 24.44 | ||||
Assumed from acquisitions | 6 | 3.60 | ||||
Exercised | (78 | ) | 18.30 | |||
Canceled/forfeited/expired | (17 | ) | 27.53 | |||
BALANCE AT JULY 26, 2014 | 187 | 26.03 | ||||
Assumed from acquisitions | 1 | 2.60 | ||||
Exercised | (71 | ) | 21.15 | |||
Canceled/forfeited/expired | (14 | ) | 29.68 | |||
BALANCE AT JULY 25, 2015 | 103 | $ | 28.68 |
STOCK OPTIONS OUTSTANDING | STOCK OPTIONS EXERCISABLE | |||||||||||||||||||||||
Range of Exercise Prices | Number Outstanding | Weighted- Average Remaining Contractual Life (in Years) | Weighted- Average Exercise Price per Share | Aggregate Intrinsic Value | Number Exercisable | Weighted- Average Exercise Price per Share | Aggregate Intrinsic Value | |||||||||||||||||
$ 0.01 – 20.00 | 4 | 5.0 | $ | 4.96 | $ | 97 | 3 | $ | 6.15 | $ | 63 | |||||||||||||
$ 20.01 – 25.00 | 19 | 0.3 | 23.03 | 101 | 19 | 23.03 | 101 | |||||||||||||||||
$ 25.01 – 30.00 | 14 | 1.0 | 26.83 | 24 | 14 | 26.82 | 24 | |||||||||||||||||
$ 30.01 – 35.00 | 66 | 1.1 | 32.16 | — | 66 | 32.16 | — | |||||||||||||||||
Total | 103 | 1.1 | $ | 28.68 | $ | 222 | 102 | $ | 29.02 | $ | 188 |
(g) | Valuation of Employee Share-Based Awards |
RESTRICTED STOCK UNITS | |||||||||||
Years Ended | July 25, 2015 | July 26, 2014 | July 27, 2013 | ||||||||
Number of shares granted (in millions) | 55 | 56 | 64 | ||||||||
Grant date fair value per share | $ | 25.30 | $ | 20.61 | $ | 18.39 | |||||
Weighted-average assumptions/inputs: | |||||||||||
Expected dividend yield | 2.9 | % | 3.1 | % | 3.0 | % | |||||
Range of risk-free interest rates | 0.0% – 1.8% | 0.0% – 1.7% | 0.0% – 1.1% |
PERFORMANCE RESTRICTED STOCK UNITS | |||||||||||
Years Ended | July 25, 2015 | July 26, 2014 | July 27, 2013 | ||||||||
Number of shares granted (in millions) | 11 | 7 | 4 | ||||||||
Grant date fair value per share | $ | 24.85 | $ | 21.90 | $ | 19.73 | |||||
Weighted-average assumptions/inputs: | |||||||||||
Expected dividend yield | 3.0 | % | 3.0 | % | 2.9 | % | |||||
Range of risk-free interest rates | 0.0% – 1.8% | 0.0% – 1.7% | 0.1% – 0.7% | ||||||||
Range of expected volatilities for index | 14.3% – 70.0% | 14.2% – 70.5% | 18.3% – 78.3% |
EMPLOYEE STOCK PURCHASE RIGHTS | |||||||||||
Years Ended | July 25, 2015 | July 26, 2014 | July 27, 2013 | ||||||||
Weighted-average assumptions: | |||||||||||
Expected volatility | 26.0 | % | 25.1 | % | 28.7 | % | |||||
Risk-free interest rate | 0.3 | % | 0.1 | % | 0.4 | % | |||||
Expected dividend | 2.8 | % | 2.8 | % | 1.5 | % | |||||
Expected life (in years) | 1.8 | 0.8 | 1.8 | ||||||||
Weighted-average estimated grant date fair value per share | $ | 6.54 | $ | 5.54 | $ | 4.68 |
(h) | Employee 401(k) Plans |
(i) | Deferred Compensation Plans |
|
15. | Comprehensive Income |
Net Unrealized Gains on Available-for-Sale Investments | Net Unrealized Gains (Losses) Cash Flow Hedging Instruments | Cumulative Translation Adjustment and Actuarial Gains and Losses | Accumulated Other Comprehensive Income | ||||||||||||
BALANCE AT JULY 28, 2012 | $ | 409 | $ | (53 | ) | $ | 305 | $ | 661 | ||||||
Other comprehensive income (loss) before reclassifications attributable to Cisco Systems, Inc. | 3 | 74 | (83 | ) | (6 | ) | |||||||||
(Gains) losses reclassified out of AOCI | (48 | ) | (12 | ) | — | (60 | ) | ||||||||
Tax benefit (expense) | 15 | (1 | ) | (1 | ) | 13 | |||||||||
BALANCE AT JULY 27, 2013 | 379 | 8 | 221 | 608 | |||||||||||
Other comprehensive income (loss) before reclassifications attributable to Cisco Systems, Inc. | 380 | 48 | 49 | 477 | |||||||||||
(Gains) losses reclassified out of AOCI | (300 | ) | (68 | ) | — | (368 | ) | ||||||||
Tax benefit (expense) | (35 | ) | — | (5 | ) | (40 | ) | ||||||||
BALANCE AT JULY 26, 2014 | 424 | (12 | ) | 265 | 677 | ||||||||||
Other comprehensive income (loss) before reclassifications attributable to Cisco Systems, Inc. | (28 | ) | (159 | ) | (563 | ) | (750 | ) | |||||||
(Gains) losses reclassified out of AOCI | (157 | ) | 154 | 2 | (1 | ) | |||||||||
Tax benefit (expense) | 71 | 1 | 63 | 135 | |||||||||||
BALANCE AT JULY 25, 2015 | $ | 310 | $ | (16 | ) | $ | (233 | ) | $ | 61 |
July 25, 2015 | July 26, 2014 | July 27, 2013 | ||||||||||||
Comprehensive Income Components | Income Before Taxes | Line Item in Statements of Operations | ||||||||||||
Net unrealized gains on available-for-sale investments | ||||||||||||||
$ | 157 | $ | 300 | $ | 48 | Other income (loss), net | ||||||||
Net unrealized gains and losses on cash flow hedging instruments | ||||||||||||||
Foreign currency derivatives | (121 | ) | 55 | 10 | Operating expenses | |||||||||
Foreign currency derivatives | (33 | ) | 13 | 2 | Cost of sales—service | |||||||||
(154 | ) | 68 | 12 | |||||||||||
Cumulative translation adjustment and actuarial gains and losses | ||||||||||||||
(2 | ) | — | — | Operating expenses | ||||||||||
Total amounts reclassified out of AOCI | $ | 1 | $ | 368 | $ | 60 |
|
16. | Income Taxes |
(a) | Provision for Income Taxes |
Years Ended | July 25, 2015 | July 26, 2014 | July 27, 2013 | ||||||||
Federal: | |||||||||||
Current | $ | 1,583 | $ | 1,672 | $ | 601 | |||||
Deferred | 43 | (383 | ) | 152 | |||||||
1,626 | 1,289 | 753 | |||||||||
State: | |||||||||||
Current | 130 | 176 | 81 | ||||||||
Deferred | (20 | ) | (64 | ) | 48 | ||||||
110 | 112 | 129 | |||||||||
Foreign: | |||||||||||
Current | 530 | 692 | 599 | ||||||||
Deferred | (46 | ) | (231 | ) | (237 | ) | |||||
484 | 461 | 362 | |||||||||
Total | $ | 2,220 | $ | 1,862 | $ | 1,244 |
Years Ended | July 25, 2015 | July 26, 2014 | July 27, 2013 | ||||||||
United States | $ | 3,570 | $ | 2,734 | $ | 3,716 | |||||
International | 7,631 | 6,981 | 7,511 | ||||||||
Total | $ | 11,201 | $ | 9,715 | $ | 11,227 |
Years Ended | July 25, 2015 | July 26, 2014 | July 27, 2013 | |||||
Federal statutory rate | 35.0 | % | 35.0 | % | 35.0 | % | ||
Effect of: | ||||||||
State taxes, net of federal tax benefit | 0.8 | 0.5 | 0.8 | |||||
Foreign income at other than U.S. rates | (15.2 | ) | (16.4 | ) | (16.4 | ) | ||
Tax credits | (1.2 | ) | (0.7 | ) | (1.6 | ) | ||
Domestic manufacturing deduction | (0.7 | ) | (0.9 | ) | (1.0 | ) | ||
Nondeductible compensation | 2.0 | 3.3 | 1.3 | |||||
Tax audit settlement | — | — | (7.1 | ) | ||||
Other, net | (0.9 | ) | (1.6 | ) | 0.1 | |||
Total | 19.8 | % | 19.2 | % | 11.1 | % |
Years Ended | July 25, 2015 | July 26, 2014 | July 27, 2013 | ||||||||
Beginning balance | $ | 1,938 | $ | 1,775 | $ | 2,819 | |||||
Additions based on tax positions related to the current year | 276 | 262 | 138 | ||||||||
Additions for tax positions of prior years | 137 | 64 | 187 | ||||||||
Reductions for tax positions of prior years | (30 | ) | (13 | ) | (1,027 | ) | |||||
Settlements | (165 | ) | (17 | ) | (199 | ) | |||||
Lapse of statute of limitations | (127 | ) | (133 | ) | (143 | ) | |||||
Ending balance | $ | 2,029 | $ | 1,938 | $ | 1,775 |
(b) | Deferred Tax Assets and Liabilities |
July 25, 2015 | July 26, 2014 | ||||||
Deferred tax assets—current | $ | 2,915 | $ | 2,808 | |||
Deferred tax liabilities—current | (212 | ) | (134 | ) | |||
Deferred tax assets—noncurrent | 1,648 | 1,700 | |||||
Deferred tax liabilities—noncurrent | (246 | ) | (369 | ) | |||
Total net deferred tax assets | $ | 4,105 | $ | 4,005 |
July 25, 2015 | July 26, 2014 | ||||||
ASSETS | |||||||
Allowance for doubtful accounts and returns | $ | 417 | $ | 464 | |||
Sales-type and direct-financing leases | 266 | 231 | |||||
Inventory write-downs and capitalization | 345 | 307 | |||||
Investment provisions | 112 | 212 | |||||
IPR&D, goodwill, and purchased intangible assets | 134 | 135 | |||||
Deferred revenue | 1,795 | 1,689 | |||||
Credits and net operating loss carryforwards | 746 | 796 | |||||
Share-based compensation expense | 520 | 661 | |||||
Accrued compensation | 467 | 496 | |||||
Other | 670 | 676 | |||||
Gross deferred tax assets | 5,472 | 5,667 | |||||
Valuation allowance | (84 | ) | (114 | ) | |||
Total deferred tax assets | 5,388 | 5,553 | |||||
LIABILITIES | |||||||
Purchased intangible assets | (950 | ) | (1,229 | ) | |||
Depreciation | (143 | ) | (48 | ) | |||
Unrealized gains on investments | (175 | ) | (245 | ) | |||
Other | (15 | ) | (26 | ) | |||
Total deferred tax liabilities | (1,283 | ) | (1,548 | ) | |||
Total net deferred tax assets | $ | 4,105 | $ | 4,005 |
|
17. | Segment Information and Major Customers |
(a) | Revenue and Gross Margin by Segment |
Years Ended | July 25, 2015 | July 26, 2014 | July 27, 2013 | ||||||||
Revenue: | |||||||||||
Americas | $ | 29,655 | $ | 27,781 | $ | 28,639 | |||||
EMEA | 12,322 | 12,006 | 12,210 | ||||||||
APJC | 7,184 | 7,355 | 7,758 | ||||||||
Total | $ | 49,161 | $ | 47,142 | $ | 48,607 | |||||
Gross margin: | |||||||||||
Americas | $ | 18,670 | $ | 17,379 | $ | 17,887 | |||||
EMEA | 7,705 | 7,700 | 7,876 | ||||||||
APJC | 4,307 | 4,252 | 4,637 | ||||||||
Segment total | 30,682 | 29,331 | 30,400 | ||||||||
Unallocated corporate items | (1,001 | ) | (1,562 | ) | (960 | ) | |||||
Total | $ | 29,681 | $ | 27,769 | $ | 29,440 |
(b) | Revenue for Groups of Similar Products and Services |
Years Ended | July 25, 2015 | July 26, 2014 | July 27, 2013 | ||||||||
Revenue: | |||||||||||
Switching | $ | 14,741 | $ | 14,001 | $ | 14,711 | |||||
NGN Routing | 7,704 | 7,609 | 8,168 | ||||||||
Collaboration | 4,000 | 3,815 | 4,057 | ||||||||
Service Provider Video | 3,555 | 3,969 | 4,855 | ||||||||
Data Center | 3,220 | 2,640 | 2,074 | ||||||||
Wireless | 2,542 | 2,293 | 2,257 | ||||||||
Security | 1,747 | 1,566 | 1,348 | ||||||||
Other | 241 | 279 | 559 | ||||||||
Product | 37,750 | 36,172 | 38,029 | ||||||||
Service | 11,411 | 10,970 | 10,578 | ||||||||
Total | $ | 49,161 | $ | 47,142 | $ | 48,607 |
(c) | Additional Segment Information |
July 25, 2015 | July 26, 2014 | July 27, 2013 | |||||||||
Property and equipment, net: | |||||||||||
United States | $ | 2,733 | $ | 2,697 | $ | 2,780 | |||||
International | 599 | 555 | 542 | ||||||||
Total | $ | 3,332 | $ | 3,252 | $ | 3,322 |
|
Allowances For | |||||||
Financing Receivables | Accounts Receivable | ||||||
Year ended July 27, 2013: | |||||||
Balance at beginning of fiscal year | $ | 380 | $ | 207 | |||
Provisions | 11 | 33 | |||||
(Write-offs) recoveries, net | (46 | ) | (12 | ) | |||
Foreign exchange and other | (1 | ) | — | ||||
Balance at end of fiscal year | $ | 344 | $ | 228 | |||
Year ended July 26, 2014: | |||||||
Balance at beginning of fiscal year | $ | 344 | $ | 228 | |||
Provisions | 14 | 65 | |||||
(Write-offs) recoveries, net | (9 | ) | (28 | ) | |||
Balance at end of fiscal year | $ | 349 | $ | 265 | |||
Year ended July 25, 2015: | |||||||
Balance at beginning of fiscal year | $ | 349 | $ | 265 | |||
Provisions | 57 | 77 | |||||
(Write-offs) recoveries, net | (7 | ) | (40 | ) | |||
Foreign exchange and other | (17 | ) | — | ||||
Balance at end of fiscal year | $ | 382 | $ | 302 |
|
Asset Category | Period | |
Buildings | 25 years | |
Building improvements | 10 years | |
Leasehold improvements | Shorter of remaining lease term or up to 10 years | |
Computer equipment and related software | 30 to 36 months | |
Production, engineering, and other equipment | Up to 5 years | |
Operating lease assets | Based on lease term | |
Furniture and fixtures | 5 years |
▪ | Revenue recognition |
▪ | Allowances for accounts receivable, sales returns, and financing receivables |
▪ | Inventory valuation and liability for purchase commitments with contract manufacturers and suppliers |
▪ | Loss contingencies and product warranties |
▪ | Fair value measurements and other-than-temporary impairments |
▪ | Goodwill and purchased intangible asset impairments |
▪ | Income taxes |
|
Shares of Common Stock | Common Stock and Additional Paid-In Capital | Retained Earnings | Total Cisco Shareholders’ Equity | |||||||||||
Repurchases of common stock under the repurchase program | 4,443 | $ | 22,615 | $ | 70,064 | $ | 92,679 |
|
Asset Category | Period | |
Buildings | 25 years | |
Building improvements | 10 years | |
Leasehold improvements | Shorter of remaining lease term or up to 10 years | |
Computer equipment and related software | 30 to 36 months | |
Production, engineering, and other equipment | Up to 5 years | |
Operating lease assets | Based on lease term | |
Furniture and fixtures | 5 years |
|
Fiscal 2014 | Purchase Consideration | Net Tangible Assets Acquired (Liabilities Assumed) | Purchased Intangible Assets | Goodwill | |||||||||||
Composite Software | $ | 160 | $ | (10 | ) | $ | 75 | $ | 95 | ||||||
Sourcefire | 2,449 | 81 | 577 | 1,791 | |||||||||||
WhipTail | 351 | (34 | ) | 105 | 280 | ||||||||||
Tail-f | 167 | (7 | ) | 61 | 113 | ||||||||||
All others (four in total) | 54 | (5 | ) | 20 | 39 | ||||||||||
Total acquisitions | $ | 3,181 | $ | 25 | $ | 838 | $ | 2,318 |
Fiscal 2013 | Purchase Consideration | Net Liabilities Assumed | Purchased Intangible Assets | Goodwill | |||||||||||
NDS | $ | 5,005 | $ | (185 | ) | $ | 1,746 | $ | 3,444 | ||||||
Meraki | 974 | (59 | ) | 289 | 744 | ||||||||||
Intucell | 360 | (23 | ) | 106 | 277 | ||||||||||
Ubiquisys | 280 | (30 | ) | 123 | 187 | ||||||||||
All others (nine in total) | 363 | (25 | ) | 127 | 261 | ||||||||||
Total acquisitions | $ | 6,982 | $ | (322 | ) | $ | 2,391 | $ | 4,913 |
Fiscal 2015 | Purchase Consideration | Net Liabilities Assumed | Purchased Intangible Assets | Goodwill | |||||||||||
Metacloud | $ | 149 | $ | (7 | ) | $ | 29 | $ | 127 | ||||||
All others (five in total) | 185 | (13 | ) | 70 | 128 | ||||||||||
Total acquisitions | $ | 334 | $ | (20 | ) | $ | 99 | $ | 255 |
|
Balance at July 26, 2014 | Acquisitions | Other | Balance at July 25, 2015 | ||||||||||||
Americas | $ | 15,080 | $ | 145 | $ | (13 | ) | $ | 15,212 | ||||||
EMEA | 5,715 | 84 | (8 | ) | 5,791 | ||||||||||
APJC | 3,444 | 26 | (4 | ) | 3,466 | ||||||||||
Total | $ | 24,239 | $ | 255 | $ | (25 | ) | $ | 24,469 |
Balance at July 27, 2013 | Acquisitions | Other | Balance at July 26, 2014 | ||||||||||||
Americas | $ | 13,800 | $ | 1,275 | $ | 5 | $ | 15,080 | |||||||
EMEA | 5,037 | 681 | (3 | ) | 5,715 | ||||||||||
APJC | 3,082 | 362 | — | 3,444 | |||||||||||
Total | $ | 21,919 | $ | 2,318 | $ | 2 | $ | 24,239 |
FINITE LIVES | INDEFINITE LIVES | TOTAL | |||||||||||||||||||||||
TECHNOLOGY | CUSTOMER RELATIONSHIPS | OTHER | IPR&D | ||||||||||||||||||||||
Fiscal 2015 | Weighted- Average Useful Life (in Years) | Amount | Weighted- Average Useful Life (in Years) | Amount | Weighted- Average Useful Life (in Years) | Amount | Amount | Amount | |||||||||||||||||
Metacloud | 3.0 | $ | 24 | 5.0 | $ | 3 | 0.0 | $ | — | $ | 2 | $ | 29 | ||||||||||||
All others (five in total) | 4.7 | 48 | 7.8 | 12 | 5.8 | 6 | 4 | 70 | |||||||||||||||||
Total | $ | 72 | $ | 15 | $ | 6 | $ | 6 | $ | 99 |
FINITE LIVES | INDEFINITE LIVES | TOTAL | |||||||||||||||||||||||
TECHNOLOGY | CUSTOMER RELATIONSHIPS | OTHER | IPR&D | ||||||||||||||||||||||
Fiscal 2014 | Weighted- Average Useful Life (in Years) | Amount | Weighted- Average Useful Life (in Years) | Amount | Weighted- Average Useful Life (in Years) | Amount | Amount | Amount | |||||||||||||||||
Composite Software | 6.0 | $ | 60 | 3.9 | $ | 14 | 0.0 | $ | — | $ | 1 | $ | 75 | ||||||||||||
Sourcefire | 7.0 | 400 | 5.0 | 129 | 3.0 | 26 | 22 | 577 | |||||||||||||||||
WhipTail | 5.0 | 63 | 5.0 | 1 | 2.7 | 3 | 38 | 105 | |||||||||||||||||
Tail-f | 7.0 | 55 | 6.8 | 6 | 0.0 | — | — | 61 | |||||||||||||||||
All others (four in total) | 3.6 | 18 | 4.0 | 2 | 0.0 | — | — | 20 | |||||||||||||||||
Total | $ | 596 | $ | 152 | $ | 29 | $ | 61 | $ | 838 |
July 25, 2015 | Gross | Accumulated Amortization | Net | |||||||||
Purchased intangible assets with finite lives: | ||||||||||||
Technology | $ | 3,418 | $ | (1,818 | ) | $ | 1,600 | |||||
Customer relationships | 1,699 | (971 | ) | 728 | ||||||||
Other | 55 | (24 | ) | 31 | ||||||||
Total purchased intangible assets with finite lives | 5,172 | (2,813 | ) | 2,359 | ||||||||
In-process research and development, with indefinite lives | 17 | — | 17 | |||||||||
Total | $ | 5,189 | $ | (2,813 | ) | $ | 2,376 |
July 26, 2014 | Gross | Accumulated Amortization | Net | |||||||||
Purchased intangible assets with finite lives: | ||||||||||||
Technology | $ | 4,100 | $ | (1,976 | ) | $ | 2,124 | |||||
Customer relationships | 1,706 | (720 | ) | 986 | ||||||||
Other | 51 | (13 | ) | 38 | ||||||||
Total purchased intangible assets with finite lives | 5,857 | (2,709 | ) | 3,148 | ||||||||
In-process research and development, with indefinite lives | 132 | — | 132 | |||||||||
Total | $ | 5,989 | $ | (2,709 | ) | $ | 3,280 |
Years Ended | July 25, 2015 | July 26, 2014 | July 27, 2013 | |||||||||
Amortization of purchased intangible assets: | ||||||||||||
Cost of sales | $ | 814 | $ | 742 | $ | 606 | ||||||
Operating expenses | 359 | 275 | 395 | |||||||||
Total | $ | 1,173 | $ | 1,017 | $ | 1,001 |
Fiscal Year | Amount | ||
2016 | $ | 770 | |
2017 | 596 | ||
2018 | 453 | ||
2019 | 357 | ||
2020 | 140 | ||
Thereafter | 43 | ||
Total | $ | 2,359 |
|
FISCAL 2014 AND FISCAL 2011 PLANS | FISCAL 2015 PLAN | |||||||||||||||||||
Employee Severance | Other | Employee Severance | Other | Total | ||||||||||||||||
Liability as of July 28, 2012 | $ | 83 | $ | 27 | $ | — | $ | — | $ | 110 | ||||||||||
Charges | 111 | (6 | ) | — | — | 105 | ||||||||||||||
Cash payments | (173 | ) | (11 | ) | — | — | (184 | ) | ||||||||||||
Non-cash items | — | (3 | ) | — | — | (3 | ) | |||||||||||||
Liability as of July 27, 2013 | 21 | 7 | — | — | 28 | |||||||||||||||
Charges | 366 | 52 | — | — | 418 | |||||||||||||||
Cash payments | (345 | ) | (7 | ) | — | — | (352 | ) | ||||||||||||
Non-cash items | (2 | ) | (23 | ) | — | — | (25 | ) | ||||||||||||
Liability as of July 26, 2014 | 40 | 29 | — | — | 69 | |||||||||||||||
Charges | — | — | 464 | 20 | 484 | |||||||||||||||
Cash payments | (29 | ) | (14 | ) | (413 | ) | (3 | ) | (459 | ) | ||||||||||
Non-cash items | — | (1 | ) | (2 | ) | (2 | ) | (5 | ) | |||||||||||
Liability as of July 25, 2015 | $ | 11 | $ | 14 | $ | 49 | $ | 15 | $ | 89 |
|
July 25, 2015 | July 26, 2014 | |||||||
Inventories: | ||||||||
Raw materials | $ | 114 | $ | 77 | ||||
Work in process | 2 | 5 | ||||||
Finished goods: | ||||||||
Distributor inventory and deferred cost of sales | 610 | 595 | ||||||
Manufactured finished goods | 593 | 606 | ||||||
Total finished goods | 1,203 | 1,201 | ||||||
Service-related spares | 258 | 273 | ||||||
Demonstration systems | 50 | 35 | ||||||
Total | $ | 1,627 | $ | 1,591 |
Property and equipment, net: | ||||||||
Gross property and equipment: | ||||||||
Land, buildings, and building and leasehold improvements | $ | 4,495 | $ | 4,468 | ||||
Computer equipment and related software | 1,310 | 1,425 | ||||||
Production, engineering, and other equipment | 5,753 | 5,756 | ||||||
Operating lease assets | 372 | 362 | ||||||
Furniture and fixtures | 497 | 509 | ||||||
Total gross property and equipment | 12,427 | 12,520 | ||||||
Less: accumulated depreciation and amortization | (9,095 | ) | (9,268 | ) | ||||
Total | $ | 3,332 | $ | 3,252 |
Other assets: | ||||||||
Deferred tax assets | $ | 1,648 | $ | 1,700 | ||||
Investments in privately held companies | 897 | 899 | ||||||
Other | 618 | 668 | ||||||
Total | $ | 3,163 | $ | 3,267 |
Deferred revenue: | ||||||||
Service | $ | 9,757 | $ | 9,640 | ||||
Product: | ||||||||
Unrecognized revenue on product shipments and other deferred revenue | 4,766 | 3,924 | ||||||
Cash receipts related to unrecognized revenue from two-tier distributors | 660 | 578 | ||||||
Total product deferred revenue | 5,426 | 4,502 | ||||||
Total | $ | 15,183 | $ | 14,142 | ||||
Reported as: | ||||||||
Current | $ | 9,824 | $ | 9,478 | ||||
Noncurrent | 5,359 | 4,664 | ||||||
Total | $ | 15,183 | $ | 14,142 |
|
July 25, 2015 | Lease Receivables | Loan Receivables | Financed Service Contracts and Other | Total | |||||||||||
Gross | $ | 3,361 | $ | 1,763 | $ | 3,573 | $ | 8,697 | |||||||
Residual value | 224 | — | — | 224 | |||||||||||
Unearned income | (190 | ) | — | — | (190 | ) | |||||||||
Allowance for credit loss | (259 | ) | (87 | ) | (36 | ) | (382 | ) | |||||||
Total, net | $ | 3,136 | $ | 1,676 | $ | 3,537 | $ | 8,349 | |||||||
Reported as: | |||||||||||||||
Current | $ | 1,468 | $ | 856 | $ | 2,167 | $ | 4,491 | |||||||
Noncurrent | 1,668 | 820 | 1,370 | 3,858 | |||||||||||
Total, net | $ | 3,136 | $ | 1,676 | $ | 3,537 | $ | 8,349 |
July 26, 2014 | Lease Receivables | Loan Receivables | Financed Service Contracts and Other | Total | |||||||||||
Gross | $ | 3,532 | $ | 1,683 | $ | 3,210 | $ | 8,425 | |||||||
Residual value | 233 | — | — | 233 | |||||||||||
Unearned income | (238 | ) | — | — | (238 | ) | |||||||||
Allowance for credit loss | (233 | ) | (98 | ) | (18 | ) | (349 | ) | |||||||
Total, net | $ | 3,294 | $ | 1,585 | $ | 3,192 | $ | 8,071 | |||||||
Reported as: | |||||||||||||||
Current | $ | 1,476 | $ | 728 | $ | 1,949 | $ | 4,153 | |||||||
Noncurrent | 1,818 | 857 | 1,243 | 3,918 | |||||||||||
Total, net | $ | 3,294 | $ | 1,585 | $ | 3,192 | $ | 8,071 |
Fiscal Year | Amount | ||
2016 | $ | 1,613 | |
2017 | 999 | ||
2018 | 503 | ||
2019 | 202 | ||
2020 | 44 | ||
Total | $ | 3,361 |
INTERNAL CREDIT RISK RATING | |||||||||||||||
July 25, 2015 | 1 to 4 | 5 to 6 | 7 and Higher | Total | |||||||||||
Lease receivables | $ | 1,688 | $ | 1,342 | $ | 141 | $ | 3,171 | |||||||
Loan receivables | 788 | 823 | 152 | 1,763 | |||||||||||
Financed service contracts and other | 2,133 | 1,389 | 51 | 3,573 | |||||||||||
Total | $ | 4,609 | $ | 3,554 | $ | 344 | $ | 8,507 |
INTERNAL CREDIT RISK RATING | |||||||||||||||
July 26, 2014 | 1 to 4 | 5 to 6 | 7 and Higher | Total | |||||||||||
Lease receivables | $ | 1,615 | $ | 1,538 | $ | 141 | $ | 3,294 | |||||||
Loan receivables | 953 | 593 | 137 | 1,683 | |||||||||||
Financed service contracts and other | 1,744 | 1,367 | 99 | 3,210 | |||||||||||
Total | $ | 4,312 | $ | 3,498 | $ | 377 | $ | 8,187 |
DAYS PAST DUE (INCLUDES BILLED AND UNBILLED) | |||||||||||||||||||||||||||||||
July 25, 2015 | 31 - 60 | 61 - 90 | 91+ | Total Past Due | Current | Total | Nonaccrual Financing Receivables | Impaired Financing Receivables | |||||||||||||||||||||||
Lease receivables | $ | 90 | $ | 27 | $ | 185 | $ | 302 | $ | 2,869 | $ | 3,171 | $ | 73 | $ | 73 | |||||||||||||||
Loan receivables | 21 | 3 | 25 | 49 | 1,714 | 1,763 | 32 | 32 | |||||||||||||||||||||||
Financed service contracts and other | 396 | 152 | 414 | 962 | 2,611 | 3,573 | 29 | 9 | |||||||||||||||||||||||
Total | $ | 507 | $ | 182 | $ | 624 | $ | 1,313 | $ | 7,194 | $ | 8,507 | $ | 134 | $ | 114 |
DAYS PAST DUE (INCLUDES BILLED AND UNBILLED) | |||||||||||||||||||||||||||||||
July 26, 2014 | 31 - 60 | 61 - 90 | 91+ | Total Past Due | Current | Total | Nonaccrual Financing Receivables | Impaired Financing Receivables | |||||||||||||||||||||||
Lease receivables | $ | 63 | $ | 46 | $ | 202 | $ | 311 | $ | 2,983 | $ | 3,294 | $ | 48 | $ | 41 | |||||||||||||||
Loan receivables | 3 | 21 | 27 | 51 | 1,632 | 1,683 | 19 | 19 | |||||||||||||||||||||||
Financed service contracts and other | 268 | 230 | 220 | 718 | 2,492 | 3,210 | 12 | 9 | |||||||||||||||||||||||
Total | $ | 334 | $ | 297 | $ | 449 | $ | 1,080 | $ | 7,107 | $ | 8,187 | $ | 79 | $ | 69 |
CREDIT LOSS ALLOWANCES | |||||||||||||||
Lease Receivables | Loan Receivables | Financed Service Contracts and Other | Total | ||||||||||||
Allowance for credit loss as of July 26, 2014 | $ | 233 | $ | 98 | $ | 18 | $ | 349 | |||||||
Provisions | 45 | (8 | ) | 20 | 57 | ||||||||||
Recoveries (write-offs), net | (7 | ) | 1 | (1 | ) | (7 | ) | ||||||||
Foreign exchange and other | (12 | ) | (4 | ) | (1 | ) | (17 | ) | |||||||
Allowance for credit loss as of July 25, 2015 | $ | 259 | $ | 87 | $ | 36 | $ | 382 | |||||||
Financing receivables as of July 25, 2015 (1) | $ | 3,395 | $ | 1,763 | $ | 3,573 | $ | 8,731 |
CREDIT LOSS ALLOWANCES | |||||||||||||||
Lease Receivables | Loan Receivables | Financed Service Contracts and Other | Total | ||||||||||||
Allowance for credit loss as of July 27, 2013 | $ | 238 | $ | 86 | $ | 20 | $ | 344 | |||||||
Provisions | 4 | 9 | 1 | 14 | |||||||||||
Recoveries (write-offs), net | (11 | ) | 5 | (3 | ) | (9 | ) | ||||||||
Foreign exchange and other | 2 | (2 | ) | — | — | ||||||||||
Allowance for credit loss as of July 26, 2014 | $ | 233 | $ | 98 | $ | 18 | $ | 349 | |||||||
Financing receivables as of July 26, 2014 (1) | $ | 3,527 | $ | 1,683 | $ | 3,210 | $ | 8,420 |
CREDIT LOSS ALLOWANCES | |||||||||||||||
Lease Receivables | Loan Receivables | Financed Service Contracts and Other | Total | ||||||||||||
Allowance for credit loss as of July 28, 2012 | $ | 247 | $ | 122 | $ | 11 | $ | 380 | |||||||
Provisions | 21 | (20 | ) | 10 | 11 | ||||||||||
Recoveries (write-offs), net | (30 | ) | (15 | ) | (1 | ) | (46 | ) | |||||||
Foreign exchange and other | — | (1 | ) | — | (1 | ) | |||||||||
Allowance for credit loss as of July 27, 2013 | $ | 238 | $ | 86 | $ | 20 | $ | 344 | |||||||
Financing receivables as of July 27, 2013 (1) | $ | 3,507 | $ | 1,649 | $ | 3,136 | $ | 8,292 |
July 25, 2015 | July 26, 2014 | ||||||
Operating lease assets | $ | 372 | $ | 362 | |||
Accumulated depreciation | (205 | ) | (202 | ) | |||
Operating lease assets, net | $ | 167 | $ | 160 |
|
July 25, 2015 | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||
Fixed income securities: | |||||||||||||||
U.S. government securities | $ | 29,904 | $ | 41 | $ | (6 | ) | $ | 29,939 | ||||||
U.S. government agency securities | 3,662 | 2 | (1 | ) | 3,663 | ||||||||||
Non-U.S. government and agency securities | 1,128 | 1 | (1 | ) | 1,128 | ||||||||||
Corporate debt securities | 15,802 | 34 | (53 | ) | 15,783 | ||||||||||
U.S. agency mortgage-backed securities | 1,456 | 8 | (3 | ) | 1,461 | ||||||||||
Total fixed income securities | 51,952 | 86 | (64 | ) | 51,974 | ||||||||||
Publicly traded equity securities | 1,092 | 480 | (7 | ) | 1,565 | ||||||||||
Total | $ | 53,044 | $ | 566 | $ | (71 | ) | $ | 53,539 | ||||||
July 26, 2014 | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||
Fixed income securities: | |||||||||||||||
U.S. government securities | $ | 31,717 | $ | 29 | $ | (12 | ) | $ | 31,734 | ||||||
U.S. government agency securities | 1,062 | 1 | — | 1,063 | |||||||||||
Non-U.S. government and agency securities | 860 | 2 | (1 | ) | 861 | ||||||||||
Corporate debt securities | 9,092 | 74 | (7 | ) | 9,159 | ||||||||||
U.S. agency mortgage-backed securities | 574 | 5 | — | 579 | |||||||||||
Total fixed income securities | 43,305 | 111 | (20 | ) | 43,396 | ||||||||||
Publicly traded equity securities | 1,314 | 648 | (10 | ) | 1,952 | ||||||||||
Total | $ | 44,619 | $ | 759 | $ | (30 | ) | $ | 45,348 |
Years Ended | July 25, 2015 | July 26, 2014 | July 27, 2013 | ||||||||
Gross realized gains | $ | 221 | $ | 341 | $ | 264 | |||||
Gross realized losses | (64 | ) | (41 | ) | (216 | ) | |||||
Total | $ | 157 | $ | 300 | $ | 48 |
Years Ended | July 25, 2015 | July 26, 2014 | July 27, 2013 | ||||||||
Net gains on investments in publicly traded equity securities | $ | 116 | $ | 253 | $ | 17 | |||||
Net gains on investments in fixed income securities | 41 | 47 | 31 | ||||||||
Total | $ | 157 | $ | 300 | $ | 48 |
UNREALIZED LOSSES LESS THAN 12 MONTHS | UNREALIZED LOSSES 12 MONTHS OR GREATER | TOTAL | |||||||||||||||||||||
July 25, 2015 | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | |||||||||||||||||
Fixed income securities: | |||||||||||||||||||||||
U.S. government securities | $ | 6,412 | $ | (6 | ) | $ | — | $ | — | $ | 6,412 | $ | (6 | ) | |||||||||
U.S. government agency securities | 1,433 | (1 | ) | — | — | 1,433 | (1 | ) | |||||||||||||||
Non-U.S. government and agency securities | 515 | (1 | ) | 4 | — | 519 | (1 | ) | |||||||||||||||
Corporate debt securities | 9,552 | (49 | ) | 312 | (4 | ) | 9,864 | (53 | ) | ||||||||||||||
U.S. agency mortgage-backed securities | 579 | (3 | ) | — | — | 579 | (3 | ) | |||||||||||||||
Total fixed income securities | 18,491 | (60 | ) | 316 | (4 | ) | 18,807 | (64 | ) | ||||||||||||||
Publicly traded equity securities | 108 | (7 | ) | 2 | — | 110 | (7 | ) | |||||||||||||||
Total | $ | 18,599 | $ | (67 | ) | $ | 318 | $ | (4 | ) | $ | 18,917 | $ | (71 | ) |
UNREALIZED LOSSES LESS THAN 12 MONTHS | UNREALIZED LOSSES 12 MONTHS OR GREATER | TOTAL | |||||||||||||||||||||
July 26, 2014 | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | |||||||||||||||||
Fixed income securities: | |||||||||||||||||||||||
U.S. government securities | $ | 7,676 | $ | (12 | ) | $ | 45 | $ | — | $ | 7,721 | $ | (12 | ) | |||||||||
Non-U.S. government and agency securities | 361 | (1 | ) | 22 | — | 383 | (1 | ) | |||||||||||||||
Corporate debt securities | 1,875 | (3 | ) | 491 | (4 | ) | 2,366 | (7 | ) | ||||||||||||||
Total fixed income securities | 9,912 | (16 | ) | 558 | (4 | ) | 10,470 | (20 | ) | ||||||||||||||
Publicly traded equity securities | 132 | (10 | ) | — | — | 132 | (10 | ) | |||||||||||||||
Total | $ | 10,044 | $ | (26 | ) | $ | 558 | $ | (4 | ) | $ | 10,602 | $ | (30 | ) |
Amortized Cost | Fair Value | ||||||
Less than 1 year | $ | 16,534 | $ | 16,540 | |||
Due in 1 to 2 years | 15,264 | 15,279 | |||||
Due in 2 to 5 years | 18,501 | 18,499 | |||||
Due after 5 years | 1,653 | 1,656 | |||||
Total | $ | 51,952 | $ | 51,974 |
July 25, 2015 | July 26, 2014 | ||||||
Equity method investments | $ | 578 | $ | 630 | |||
Cost method investments | 319 | 269 | |||||
Total | $ | 897 | $ | 899 |
|
JULY 25, 2015 | JULY 26, 2014 | ||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS | ||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total Balance | Level 1 | Level 2 | Level 3 | Total Balance | ||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||
Cash equivalents: | |||||||||||||||||||||||||||||||
Money market funds | $ | 5,336 | $ | — | $ | — | $ | 5,336 | $ | 4,935 | $ | — | $ | — | $ | 4,935 | |||||||||||||||
Corporate debt securities | — | 14 | — | 14 | — | — | — | — | |||||||||||||||||||||||
Available-for-sale investments: | |||||||||||||||||||||||||||||||
U.S. government securities | — | 29,939 | — | 29,939 | — | 31,734 | — | 31,734 | |||||||||||||||||||||||
U.S. government agency securities | — | 3,663 | — | 3,663 | — | 1,063 | — | 1,063 | |||||||||||||||||||||||
Non-U.S. government and agency securities | — | 1,128 | — | 1,128 | — | 861 | — | 861 | |||||||||||||||||||||||
Corporate debt securities | — | 15,783 | — | 15,783 | — | 9,159 | — | 9,159 | |||||||||||||||||||||||
U.S. agency mortgage-backed securities | — | 1,461 | — | 1,461 | — | 579 | — | 579 | |||||||||||||||||||||||
Publicly traded equity securities | 1,565 | — | — | 1,565 | 1,952 | — | — | 1,952 | |||||||||||||||||||||||
Derivative assets | — | 214 | 4 | 218 | — | 158 | 2 | 160 | |||||||||||||||||||||||
Total | $ | 6,901 | $ | 52,202 | $ | 4 | $ | 59,107 | $ | 6,887 | $ | 43,554 | $ | 2 | $ | 50,443 | |||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||
Derivative liabilities | $ | — | $ | 12 | $ | — | $ | 12 | $ | — | $ | 67 | $ | — | $ | 67 | |||||||||||||||
Total | $ | — | $ | 12 | $ | — | $ | 12 | $ | — | $ | 67 | $ | — | $ | 67 |
TOTAL GAINS (LOSSES) FOR THE YEARS ENDED | |||||||||||
July 25, 2015 | July 26, 2014 | July 27, 2013 | |||||||||
Investments in privately held companies (impaired) | $ | (38 | ) | $ | (21 | ) | $ | (31 | ) | ||
Purchased intangible assets (impaired) | (175 | ) | — | — | |||||||
Property held for sale—land and buildings | — | — | (1 | ) | |||||||
Gains (losses) on assets no longer held at end of fiscal year | (8 | ) | (2 | ) | 75 | ||||||
Total gains (losses) for nonrecurring measurements | $ | (221 | ) | $ | (23 | ) | $ | 43 |
|
July 25, 2015 | July 26, 2014 | ||||||||||||
Amount | Effective Rate | Amount | Effective Rate | ||||||||||
Current portion of long-term debt | $ | 3,894 | 2.48 | % | $ | 500 | 3.11 | % | |||||
Other notes and borrowings | 3 | 2.44 | % | 8 | 2.67 | % | |||||||
Total short-term debt | $ | 3,897 | $ | 508 |
July 25, 2015 | July 26, 2014 | ||||||||||||
Maturity Date | Amount | Effective Rate | Amount | Effective Rate | |||||||||
Senior notes: | |||||||||||||
Floating-rate notes: | |||||||||||||
Three-month LIBOR plus 0.05% | September 3, 2015 | $ | 850 | 0.43% | $ | 850 | 0.35% | ||||||
Three-month LIBOR plus 0.28% | March 3, 2017 | 1,000 | 0.63% | 1,000 | 0.56% | ||||||||
Three-month LIBOR plus 0.31% | June 15, 2018 | (1) | 900 | 0.65% | — | — | |||||||
Three-month LIBOR plus 0.50% | March 1, 2019 | 500 | 0.84% | 500 | 0.78% | ||||||||
Fixed-rate notes: | |||||||||||||
2.90% | November 17, 2014 | — | — | 500 | 3.11% | ||||||||
5.50% | February 22, 2016 | 3,000 | 3.07% | 3,000 | 3.04% | ||||||||
1.10% | March 3, 2017 | 2,400 | 0.59% | 2,400 | 0.56% | ||||||||
3.15% | March 14, 2017 | 750 | 0.85% | 750 | 0.79% | ||||||||
1.65% | June 15, 2018 | (1) | 1,600 | 1.72% | — | — | |||||||
4.95% | February 15, 2019 | 2,000 | 4.70% | 2,000 | 4.69% | ||||||||
2.125% | March 1, 2019 | 1,750 | 0.80% | 1,750 | 0.77% | ||||||||
4.45% | January 15, 2020 | 2,500 | 3.01% | 2,500 | 2.98% | ||||||||
2.45% | June 15, 2020 | (1) | 1,500 | 2.54% | — | — | |||||||
2.90% | March 4, 2021 | 500 | 0.96% | 500 | 0.93% | ||||||||
3.00% | June 15, 2022 | (1) | 500 | 1.21% | — | — | |||||||
3.625% | March 4, 2024 | 1,000 | 1.08% | 1,000 | 1.05% | ||||||||
3.50% | June 15, 2025 | (1) | 500 | 1.37% | — | — | |||||||
5.90% | February 15, 2039 | 2,000 | 6.11% | 2,000 | 6.11% | ||||||||
5.50% | January 15, 2040 | 2,000 | 5.67% | 2,000 | 5.67% | ||||||||
Other long-term debt | 1 | 2.08% | 4 | 2.39% | |||||||||
Total | 25,251 | 20,754 | |||||||||||
Unaccreted discount/issuance costs | (131 | ) | (127 | ) | |||||||||
Hedge accounting fair value adjustments | 231 | 210 | |||||||||||
Total | $ | 25,351 | $ | 20,837 | |||||||||
Reported as: | |||||||||||||
Current portion of long-term debt | $ | 3,894 | $ | 500 | |||||||||
Long-term debt | 21,457 | 20,337 | |||||||||||
Total | $ | 25,351 | $ | 20,837 |
Fiscal Year | Amount | ||
2016 | $ | 3,850 | |
2017 | 4,151 | ||
2018 | 2,500 | ||
2019 | 4,250 | ||
2020 | 4,000 | ||
Thereafter | 6,500 | ||
Total | $ | 25,251 |
|
DERIVATIVE ASSETS | DERIVATIVE LIABILITIES | ||||||||||||||||||
Balance Sheet Line Item | July 25, 2015 | July 26, 2014 | Balance Sheet Line Item | July 25, 2015 | July 26, 2014 | ||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||||
Foreign currency derivatives | Other current assets | $ | 10 | $ | 7 | Other current liabilities | $ | 11 | $ | 6 | |||||||||
Interest rate derivatives | Other assets | 202 | 148 | Other long-term liabilities | — | 3 | |||||||||||||
Equity derivatives | Other current assets | — | — | Other current liabilities | — | 56 | |||||||||||||
Total | 212 | 155 | 11 | 65 | |||||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||||
Foreign currency derivatives | Other current assets | 2 | 3 | Other current liabilities | 1 | 2 | |||||||||||||
Equity derivatives | Other assets | 4 | 2 | Other long-term liabilities | — | — | |||||||||||||
Total | 6 | 5 | 1 | 2 | |||||||||||||||
Total | $ | 218 | $ | 160 | $ | 12 | $ | 67 |
GAINS (LOSSES) RECOGNIZED IN OCI ON DERIVATIVES FOR THE YEARS ENDED (EFFECTIVE PORTION) | GAINS (LOSSES) RECLASSIFIED FROM AOCI INTO INCOME FOR THE YEARS ENDED (EFFECTIVE PORTION) | |||||||||||||||||||||||||
July 25, 2015 | July 26, 2014 | July 27, 2013 | Line Item in Statements of Operations | July 25, 2015 | July 26, 2014 | July 27, 2013 | ||||||||||||||||||||
Derivatives designated as cash flow hedging instruments: | ||||||||||||||||||||||||||
Foreign currency derivatives | $ | (159 | ) | $ | 48 | $ | 73 | Operating expenses | $ | (121 | ) | $ | 55 | $ | 10 | |||||||||||
Cost of sales—service | (33 | ) | 13 | 2 | ||||||||||||||||||||||
Total | $ | (159 | ) | $ | 48 | $ | 73 | Total | $ | (154 | ) | $ | 68 | $ | 12 | |||||||||||
Derivatives designated as net investment hedging instruments: | ||||||||||||||||||||||||||
Foreign currency derivatives | $ | 42 | $ | (15 | ) | $ | (1 | ) | Other income (loss), net | $ | — | $ | — | $ | — |
GAINS (LOSSES) ON DERIVATIVE INSTRUMENTS FOR THE YEARS ENDED | GAINS (LOSSES) RELATED TO HEDGED ITEMS FOR THE YEARS ENDED | |||||||||||||||||||||||||
Derivatives Designated as Fair Value Hedging Instruments | Line Item in Statements of Operations | July 25, 2015 | July 26, 2014 | July 27, 2013 | July 25, 2015 | July 26, 2014 | July 27, 2013 | |||||||||||||||||||
Equity derivatives | Other income (loss), net | $ | 56 | $ | (72 | ) | $ | (155 | ) | $ | (56 | ) | $ | 72 | $ | 155 | ||||||||||
Interest rate derivatives | Interest expense | 54 | (2 | ) | (78 | ) | (57 | ) | — | 78 | ||||||||||||||||
Total | $ | 110 | $ | (74 | ) | $ | (233 | ) | $ | (113 | ) | $ | 72 | $ | 233 |
GAINS (LOSSES) FOR THE YEARS ENDED | ||||||||||||||
Derivatives Not Designated as Hedging Instruments | Line Item in Statements of Operations | July 25, 2015 | July 26, 2014 | July 27, 2013 | ||||||||||
Foreign currency derivatives | Other income (loss), net | $ | (173 | ) | $ | 23 | $ | (74 | ) | |||||
Total return swaps—deferred compensation | Operating expenses | 19 | 47 | 61 | ||||||||||
Equity derivatives | Other income (loss), net | 27 | 34 | — | ||||||||||
Total | $ | (127 | ) | $ | 104 | $ | (13 | ) |
July 25, 2015 | July 26, 2014 | ||||||
Derivatives designated as hedging instruments: | |||||||
Foreign currency derivatives—cash flow hedges | $ | 1,201 | $ | 1,618 | |||
Interest rate derivatives | 11,400 | 10,400 | |||||
Net investment hedging instruments | 192 | 345 | |||||
Equity derivatives | — | 238 | |||||
Derivatives not designated as hedging instruments: | |||||||
Foreign currency derivatives | 2,023 | 2,528 | |||||
Total return swaps—deferred compensation | 462 | 428 | |||||
Total | $ | 15,278 | $ | 15,557 |
GROSS AMOUNTS OFFSET IN THE CONSOLIDATED BALANCE SHEET | GROSS AMOUNTS NOT OFFSET IN THE CONSOLIDATED BALANCE SHEET BUT WITH LEGAL RIGHTS TO OFFSET | ||||||||||||||||||||||
July 25, 2015 | Gross Amounts Recognized | Gross Amounts Offset | Net Amounts Presented | Gross Derivative Amounts | Cash Collateral | Net Amount | |||||||||||||||||
Derivatives assets | $ | 218 | $ | — | $ | 218 | $ | (12 | ) | $ | (124 | ) | $ | 82 | |||||||||
Derivatives liabilities | $ | 12 | $ | — | $ | 12 | $ | (12 | ) | $ | — | $ | — |
GROSS AMOUNTS OFFSET IN THE CONSOLIDATED BALANCE SHEET | GROSS AMOUNTS NOT OFFSET IN THE CONSOLIDATED BALANCE SHEET BUT WITH LEGAL RIGHTS TO OFFSET | ||||||||||||||||||||||
July 26, 2014 | Gross Amounts Recognized | Gross Amounts Offset | Net Amounts Presented | Gross Derivative Amounts | Cash Collateral | Net Amount | |||||||||||||||||
Derivatives assets | $ | 160 | $ | — | $ | 160 | $ | (39 | ) | $ | (60 | ) | $ | 61 | |||||||||
Derivatives liabilities | $ | 67 | $ | — | $ | 67 | $ | (39 | ) | $ | (1 | ) | $ | 27 |
|
Fiscal Year | Amount | ||
2016 | $ | 346 | |
2017 | 254 | ||
2018 | 181 | ||
2019 | 99 | ||
2020 | 79 | ||
Thereafter | 183 | ||
Total | $ | 1,142 |
July 25, 2015 | July 26, 2014 | July 27, 2013 | |||||||||
Compensation expense related to acquisitions | $ | 334 | $ | 607 | $ | 123 |
July 25, 2015 | July 26, 2014 | July 27, 2013 | |||||||||
Balance at beginning of fiscal year | $ | 446 | $ | 402 | $ | 373 | |||||
Provision for warranties issued | 696 | 704 | 649 | ||||||||
Payments | (693 | ) | (660 | ) | (620 | ) | |||||
Balance at end of fiscal year | $ | 449 | $ | 446 | $ | 402 |
July 25, 2015 | July 26, 2014 | ||||||
Maximum potential future payments relating to financing guarantees: | |||||||
Channel partner | $ | 288 | $ | 263 | |||
End user | 129 | 202 | |||||
Total | $ | 417 | $ | 465 | |||
Deferred revenue associated with financing guarantees: | |||||||
Channel partner | $ | (127 | ) | $ | (127 | ) | |
End user | (107 | ) | (166 | ) | |||
Total | $ | (234 | ) | $ | (293 | ) | |
Maximum potential future payments relating to financing guarantees, net of associated deferred revenue | $ | 183 | $ | 172 |
|
Years Ended | July 25, 2015 | July 26, 2014 | July 27, 2013 | ||||||||
Cost of sales—product | $ | 50 | $ | 45 | $ | 40 | |||||
Cost of sales—service | 157 | 150 | 138 | ||||||||
Share-based compensation expense in cost of sales | 207 | 195 | 178 | ||||||||
Research and development | 448 | 411 | 286 | ||||||||
Sales and marketing | 559 | 549 | 484 | ||||||||
General and administrative | 228 | 198 | 175 | ||||||||
Restructuring and other charges | (2 | ) | (5 | ) | (3 | ) | |||||
Share-based compensation expense in operating expenses | 1,233 | 1,153 | 942 | ||||||||
Total share-based compensation expense | $ | 1,440 | $ | 1,348 | $ | 1,120 | |||||
Income tax benefit for share-based compensation | $ | 373 | $ | 324 | $ | 285 |
Years Ended | July 25, 2015 | July 26, 2014 | July 27, 2013 | |||||
Balance at beginning of fiscal year | 310 | 228 | 218 | |||||
Restricted stock, stock units, and other share-based awards granted | (101 | ) | (98 | ) | (102 | ) | ||
Share-based awards canceled/forfeited/expired | 40 | 36 | 115 | |||||
Additional shares reserved | — | 135 | — | |||||
Shares withheld for taxes and not issued | 27 | 6 | — | |||||
Other | — | 3 | (3 | ) | ||||
Balance at end of fiscal year | 276 | 310 | 228 |
Restricted Stock/ Stock Units | Weighted-Average Grant Date Fair Value per Share | Aggregate Fair Value | ||||||||
UNVESTED BALANCE AT JULY 28, 2012 | 128 | $ | 19.46 | |||||||
Granted and assumed | 72 | 18.52 | ||||||||
Vested | (46 | ) | 20.17 | $ | 932 | |||||
Canceled/forfeited | (11 | ) | 18.91 | |||||||
UNVESTED BALANCE AT JULY 27, 2013 | 143 | 18.80 | ||||||||
Granted and assumed | 72 | 20.85 | ||||||||
Vested | (53 | ) | 19.55 | $ | 1,229 | |||||
Canceled/forfeited | (13 | ) | 18.61 | |||||||
UNVESTED BALANCE AT JULY 26, 2014 | 149 | 19.54 | ||||||||
Granted and assumed | 67 | 25.29 | ||||||||
Vested | (57 | ) | 19.82 | $ | 1,517 | |||||
Canceled/forfeited | (16 | ) | 20.17 | |||||||
UNVESTED BALANCE AT JULY 25, 2015 | 143 | $ | 22.08 |
STOCK OPTIONS OUTSTANDING | ||||||
Number Outstanding | Weighted-Average Exercise Price per Share | |||||
BALANCE AT JULY 28, 2012 | 520 | $ | 22.68 | |||
Assumed from acquisitions | 10 | 0.77 | ||||
Exercised | (154 | ) | 18.51 | |||
Canceled/forfeited/expired | (100 | ) | 22.18 | |||
BALANCE AT JULY 27, 2013 | 276 | 24.44 | ||||
Assumed from acquisitions | 6 | 3.60 | ||||
Exercised | (78 | ) | 18.30 | |||
Canceled/forfeited/expired | (17 | ) | 27.53 | |||
BALANCE AT JULY 26, 2014 | 187 | 26.03 | ||||
Assumed from acquisitions | 1 | 2.60 | ||||
Exercised | (71 | ) | 21.15 | |||
Canceled/forfeited/expired | (14 | ) | 29.68 | |||
BALANCE AT JULY 25, 2015 | 103 | $ | 28.68 |
STOCK OPTIONS OUTSTANDING | STOCK OPTIONS EXERCISABLE | |||||||||||||||||||||||
Range of Exercise Prices | Number Outstanding | Weighted- Average Remaining Contractual Life (in Years) | Weighted- Average Exercise Price per Share | Aggregate Intrinsic Value | Number Exercisable | Weighted- Average Exercise Price per Share | Aggregate Intrinsic Value | |||||||||||||||||
$ 0.01 – 20.00 | 4 | 5.0 | $ | 4.96 | $ | 97 | 3 | $ | 6.15 | $ | 63 | |||||||||||||
$ 20.01 – 25.00 | 19 | 0.3 | 23.03 | 101 | 19 | 23.03 | 101 | |||||||||||||||||
$ 25.01 – 30.00 | 14 | 1.0 | 26.83 | 24 | 14 | 26.82 | 24 | |||||||||||||||||
$ 30.01 – 35.00 | 66 | 1.1 | 32.16 | — | 66 | 32.16 | — | |||||||||||||||||
Total | 103 | 1.1 | $ | 28.68 | $ | 222 | 102 | $ | 29.02 | $ | 188 |
RESTRICTED STOCK UNITS | |||||||||||
Years Ended | July 25, 2015 | July 26, 2014 | July 27, 2013 | ||||||||
Number of shares granted (in millions) | 55 | 56 | 64 | ||||||||
Grant date fair value per share | $ | 25.30 | $ | 20.61 | $ | 18.39 | |||||
Weighted-average assumptions/inputs: | |||||||||||
Expected dividend yield | 2.9 | % | 3.1 | % | 3.0 | % | |||||
Range of risk-free interest rates | 0.0% – 1.8% | 0.0% – 1.7% | 0.0% – 1.1% |
PERFORMANCE RESTRICTED STOCK UNITS | |||||||||||
Years Ended | July 25, 2015 | July 26, 2014 | July 27, 2013 | ||||||||
Number of shares granted (in millions) | 11 | 7 | 4 | ||||||||
Grant date fair value per share | $ | 24.85 | $ | 21.90 | $ | 19.73 | |||||
Weighted-average assumptions/inputs: | |||||||||||
Expected dividend yield | 3.0 | % | 3.0 | % | 2.9 | % | |||||
Range of risk-free interest rates | 0.0% – 1.8% | 0.0% – 1.7% | 0.1% – 0.7% | ||||||||
Range of expected volatilities for index | 14.3% – 70.0% | 14.2% – 70.5% | 18.3% – 78.3% |
EMPLOYEE STOCK PURCHASE RIGHTS | |||||||||||
Years Ended | July 25, 2015 | July 26, 2014 | July 27, 2013 | ||||||||
Weighted-average assumptions: | |||||||||||
Expected volatility | 26.0 | % | 25.1 | % | 28.7 | % | |||||
Risk-free interest rate | 0.3 | % | 0.1 | % | 0.4 | % | |||||
Expected dividend | 2.8 | % | 2.8 | % | 1.5 | % | |||||
Expected life (in years) | 1.8 | 0.8 | 1.8 | ||||||||
Weighted-average estimated grant date fair value per share | $ | 6.54 | $ | 5.54 | $ | 4.68 |
|
Net Unrealized Gains on Available-for-Sale Investments | Net Unrealized Gains (Losses) Cash Flow Hedging Instruments | Cumulative Translation Adjustment and Actuarial Gains and Losses | Accumulated Other Comprehensive Income | ||||||||||||
BALANCE AT JULY 28, 2012 | $ | 409 | $ | (53 | ) | $ | 305 | $ | 661 | ||||||
Other comprehensive income (loss) before reclassifications attributable to Cisco Systems, Inc. | 3 | 74 | (83 | ) | (6 | ) | |||||||||
(Gains) losses reclassified out of AOCI | (48 | ) | (12 | ) | — | (60 | ) | ||||||||
Tax benefit (expense) | 15 | (1 | ) | (1 | ) | 13 | |||||||||
BALANCE AT JULY 27, 2013 | 379 | 8 | 221 | 608 | |||||||||||
Other comprehensive income (loss) before reclassifications attributable to Cisco Systems, Inc. | 380 | 48 | 49 | 477 | |||||||||||
(Gains) losses reclassified out of AOCI | (300 | ) | (68 | ) | — | (368 | ) | ||||||||
Tax benefit (expense) | (35 | ) | — | (5 | ) | (40 | ) | ||||||||
BALANCE AT JULY 26, 2014 | 424 | (12 | ) | 265 | 677 | ||||||||||
Other comprehensive income (loss) before reclassifications attributable to Cisco Systems, Inc. | (28 | ) | (159 | ) | (563 | ) | (750 | ) | |||||||
(Gains) losses reclassified out of AOCI | (157 | ) | 154 | 2 | (1 | ) | |||||||||
Tax benefit (expense) | 71 | 1 | 63 | 135 | |||||||||||
BALANCE AT JULY 25, 2015 | $ | 310 | $ | (16 | ) | $ | (233 | ) | $ | 61 |
July 25, 2015 | July 26, 2014 | July 27, 2013 | ||||||||||||
Comprehensive Income Components | Income Before Taxes | Line Item in Statements of Operations | ||||||||||||
Net unrealized gains on available-for-sale investments | ||||||||||||||
$ | 157 | $ | 300 | $ | 48 | Other income (loss), net | ||||||||
Net unrealized gains and losses on cash flow hedging instruments | ||||||||||||||
Foreign currency derivatives | (121 | ) | 55 | 10 | Operating expenses | |||||||||
Foreign currency derivatives | (33 | ) | 13 | 2 | Cost of sales—service | |||||||||
(154 | ) | 68 | 12 | |||||||||||
Cumulative translation adjustment and actuarial gains and losses | ||||||||||||||
(2 | ) | — | — | Operating expenses | ||||||||||
Total amounts reclassified out of AOCI | $ | 1 | $ | 368 | $ | 60 |
|
Years Ended | July 25, 2015 | July 26, 2014 | July 27, 2013 | ||||||||
Federal: | |||||||||||
Current | $ | 1,583 | $ | 1,672 | $ | 601 | |||||
Deferred | 43 | (383 | ) | 152 | |||||||
1,626 | 1,289 | 753 | |||||||||
State: | |||||||||||
Current | 130 | 176 | 81 | ||||||||
Deferred | (20 | ) | (64 | ) | 48 | ||||||
110 | 112 | 129 | |||||||||
Foreign: | |||||||||||
Current | 530 | 692 | 599 | ||||||||
Deferred | (46 | ) | (231 | ) | (237 | ) | |||||
484 | 461 | 362 | |||||||||
Total | $ | 2,220 | $ | 1,862 | $ | 1,244 |
Years Ended | July 25, 2015 | July 26, 2014 | July 27, 2013 | ||||||||
United States | $ | 3,570 | $ | 2,734 | $ | 3,716 | |||||
International | 7,631 | 6,981 | 7,511 | ||||||||
Total | $ | 11,201 | $ | 9,715 | $ | 11,227 |
Years Ended | July 25, 2015 | July 26, 2014 | July 27, 2013 | |||||
Federal statutory rate | 35.0 | % | 35.0 | % | 35.0 | % | ||
Effect of: | ||||||||
State taxes, net of federal tax benefit | 0.8 | 0.5 | 0.8 | |||||
Foreign income at other than U.S. rates | (15.2 | ) | (16.4 | ) | (16.4 | ) | ||
Tax credits | (1.2 | ) | (0.7 | ) | (1.6 | ) | ||
Domestic manufacturing deduction | (0.7 | ) | (0.9 | ) | (1.0 | ) | ||
Nondeductible compensation | 2.0 | 3.3 | 1.3 | |||||
Tax audit settlement | — | — | (7.1 | ) | ||||
Other, net | (0.9 | ) | (1.6 | ) | 0.1 | |||
Total | 19.8 | % | 19.2 | % | 11.1 | % |
Years Ended | July 25, 2015 | July 26, 2014 | July 27, 2013 | ||||||||
Beginning balance | $ | 1,938 | $ | 1,775 | $ | 2,819 | |||||
Additions based on tax positions related to the current year | 276 | 262 | 138 | ||||||||
Additions for tax positions of prior years | 137 | 64 | 187 | ||||||||
Reductions for tax positions of prior years | (30 | ) | (13 | ) | (1,027 | ) | |||||
Settlements | (165 | ) | (17 | ) | (199 | ) | |||||
Lapse of statute of limitations | (127 | ) | (133 | ) | (143 | ) | |||||
Ending balance | $ | 2,029 | $ | 1,938 | $ | 1,775 |
July 25, 2015 | July 26, 2014 | ||||||
Deferred tax assets—current | $ | 2,915 | $ | 2,808 | |||
Deferred tax liabilities—current | (212 | ) | (134 | ) | |||
Deferred tax assets—noncurrent | 1,648 | 1,700 | |||||
Deferred tax liabilities—noncurrent | (246 | ) | (369 | ) | |||
Total net deferred tax assets | $ | 4,105 | $ | 4,005 |
July 25, 2015 | July 26, 2014 | ||||||
ASSETS | |||||||
Allowance for doubtful accounts and returns | $ | 417 | $ | 464 | |||
Sales-type and direct-financing leases | 266 | 231 | |||||
Inventory write-downs and capitalization | 345 | 307 | |||||
Investment provisions | 112 | 212 | |||||
IPR&D, goodwill, and purchased intangible assets | 134 | 135 | |||||
Deferred revenue | 1,795 | 1,689 | |||||
Credits and net operating loss carryforwards | 746 | 796 | |||||
Share-based compensation expense | 520 | 661 | |||||
Accrued compensation | 467 | 496 | |||||
Other | 670 | 676 | |||||
Gross deferred tax assets | 5,472 | 5,667 | |||||
Valuation allowance | (84 | ) | (114 | ) | |||
Total deferred tax assets | 5,388 | 5,553 | |||||
LIABILITIES | |||||||
Purchased intangible assets | (950 | ) | (1,229 | ) | |||
Depreciation | (143 | ) | (48 | ) | |||
Unrealized gains on investments | (175 | ) | (245 | ) | |||
Other | (15 | ) | (26 | ) | |||
Total deferred tax liabilities | (1,283 | ) | (1,548 | ) | |||
Total net deferred tax assets | $ | 4,105 | $ | 4,005 |
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Years Ended | July 25, 2015 | July 26, 2014 | July 27, 2013 | ||||||||
Revenue: | |||||||||||
Americas | $ | 29,655 | $ | 27,781 | $ | 28,639 | |||||
EMEA | 12,322 | 12,006 | 12,210 | ||||||||
APJC | 7,184 | 7,355 | 7,758 | ||||||||
Total | $ | 49,161 | $ | 47,142 | $ | 48,607 | |||||
Gross margin: | |||||||||||
Americas | $ | 18,670 | $ | 17,379 | $ | 17,887 | |||||
EMEA | 7,705 | 7,700 | 7,876 | ||||||||
APJC | 4,307 | 4,252 | 4,637 | ||||||||
Segment total | 30,682 | 29,331 | 30,400 | ||||||||
Unallocated corporate items | (1,001 | ) | (1,562 | ) | (960 | ) | |||||
Total | $ | 29,681 | $ | 27,769 | $ | 29,440 |
Years Ended | July 25, 2015 | July 26, 2014 | July 27, 2013 | ||||||||
Revenue: | |||||||||||
Switching | $ | 14,741 | $ | 14,001 | $ | 14,711 | |||||
NGN Routing | 7,704 | 7,609 | 8,168 | ||||||||
Collaboration | 4,000 | 3,815 | 4,057 | ||||||||
Service Provider Video | 3,555 | 3,969 | 4,855 | ||||||||
Data Center | 3,220 | 2,640 | 2,074 | ||||||||
Wireless | 2,542 | 2,293 | 2,257 | ||||||||
Security | 1,747 | 1,566 | 1,348 | ||||||||
Other | 241 | 279 | 559 | ||||||||
Product | 37,750 | 36,172 | 38,029 | ||||||||
Service | 11,411 | 10,970 | 10,578 | ||||||||
Total | $ | 49,161 | $ | 47,142 | $ | 48,607 |
July 25, 2015 | July 26, 2014 | July 27, 2013 | |||||||||
Property and equipment, net: | |||||||||||
United States | $ | 2,733 | $ | 2,697 | $ | 2,780 | |||||
International | 599 | 555 | 542 | ||||||||
Total | $ | 3,332 | $ | 3,252 | $ | 3,322 |
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Allowances For | |||||||
Financing Receivables | Accounts Receivable | ||||||
Year ended July 27, 2013: | |||||||
Balance at beginning of fiscal year | $ | 380 | $ | 207 | |||
Provisions | 11 | 33 | |||||
(Write-offs) recoveries, net | (46 | ) | (12 | ) | |||
Foreign exchange and other | (1 | ) | — | ||||
Balance at end of fiscal year | $ | 344 | $ | 228 | |||
Year ended July 26, 2014: | |||||||
Balance at beginning of fiscal year | $ | 344 | $ | 228 | |||
Provisions | 14 | 65 | |||||
(Write-offs) recoveries, net | (9 | ) | (28 | ) | |||
Balance at end of fiscal year | $ | 349 | $ | 265 | |||
Year ended July 25, 2015: | |||||||
Balance at beginning of fiscal year | $ | 349 | $ | 265 | |||
Provisions | 57 | 77 | |||||
(Write-offs) recoveries, net | (7 | ) | (40 | ) | |||
Foreign exchange and other | (17 | ) | — | ||||
Balance at end of fiscal year | $ | 382 | $ | 302 |
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