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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 | 4,488 | $ | 23,001 | $ | 70,885 | $ | 93,886 |
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1. | Basis of Presentation |
|
2. | Recent Accounting Pronouncements |
|
3. | Acquisitions and Divestitures |
Purchase Consideration | Net Liabilities Assumed | Purchased Intangible Assets | Goodwill | ||||||||||||
MaintenanceNet | $ | 105 | $ | (21 | ) | $ | 65 | $ | 61 | ||||||
OpenDNS | 545 | (9 | ) | 61 | 493 | ||||||||||
Other | 6 | (1 | ) | 4 | 3 | ||||||||||
Total | $ | 656 | $ | (31 | ) | $ | 130 | $ | 557 |
|
4. | Goodwill and Purchased Intangible Assets |
(a) | Goodwill |
Balance at | Balance at | ||||||||||||||
July 25, 2015 | Acquisitions | Other | October 24, 2015 | ||||||||||||
Americas | $ | 15,212 | $ | 361 | $ | (90 | ) | $ | 15,483 | ||||||
EMEA | 5,791 | 141 | (34 | ) | 5,898 | ||||||||||
APJC | 3,466 | 55 | (20 | ) | 3,501 | ||||||||||
Total | $ | 24,469 | $ | 557 | $ | (144 | ) | $ | 24,882 |
(b) | Purchased Intangible Assets |
FINITE LIVES | INDEFINITE LIVES | TOTAL | |||||||||||||||||||||||
TECHNOLOGY | CUSTOMER RELATIONSHIPS | OTHER | IPR&D | ||||||||||||||||||||||
Weighted- Average Useful Life (in Years) | Amount | Weighted- Average Useful Life (in Years) | Amount | Weighted- Average Useful Life (in Years) | Amount | Amount | Amount | ||||||||||||||||||
MaintenanceNet | 5.0 | $ | 50 | 5.0 | $ | 2 | 2.0 | $ | 2 | $ | 11 | $ | 65 | ||||||||||||
OpenDNS | 5.0 | 43 | 7.0 | 15 | 1.0 | 2 | 1 | $ | 61 | ||||||||||||||||
Other | 5.0 | 4 | 0.0 | — | 0.0 | — | — | $ | 4 | ||||||||||||||||
Total | $ | 97 | $ | 17 | $ | 4 | $ | 12 | $ | 130 |
October 24, 2015 | Gross | Accumulated Amortization | Net | |||||||||
Purchased intangible assets with finite lives: | ||||||||||||
Technology | $ | 3,454 | $ | (1,902 | ) | $ | 1,552 | |||||
Customer relationships | 1,716 | (1,036 | ) | 680 | ||||||||
Other | 58 | (27 | ) | 31 | ||||||||
Total purchased intangible assets with finite lives | 5,228 | (2,965 | ) | 2,263 | ||||||||
In-process research and development, with indefinite lives | 29 | — | 29 | |||||||||
Total | $ | 5,257 | $ | (2,965 | ) | $ | 2,292 |
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 |
Three Months Ended | |||||||
October 24, 2015 | October 25, 2014 | ||||||
Amortization of purchased intangible assets: | |||||||
Cost of sales | $ | 146 | $ | 189 | |||
Operating expenses | 69 | 71 | |||||
Total | $ | 215 | $ | 260 |
Fiscal Year | Amount | ||
2016 (remaining nine months) | $ | 574 | |
2017 | 619 | ||
2018 | 476 | ||
2019 | 379 | ||
2020 | 162 | ||
Thereafter | 53 | ||
Total | $ | 2,263 |
|
5. | Restructuring and Other Charges |
FISCAL 2014 PLAN | FISCAL 2015 PLAN | |||||||||||||||||||
Employee Severance | Other | Employee Severance | Other | Total | ||||||||||||||||
Liability as of July 25, 2015 | $ | 11 | $ | 14 | $ | 49 | $ | 15 | $ | 89 | ||||||||||
Charges | — | — | 125 | 17 | 142 | |||||||||||||||
Cash payments | (4 | ) | (1 | ) | (119 | ) | (5 | ) | (129 | ) | ||||||||||
Non-cash items | — | — | — | (16 | ) | (16 | ) | |||||||||||||
Liability as of October 24, 2015 | $ | 7 | $ | 13 | $ | 55 | $ | 11 | $ | 86 |
|
6. | Balance Sheet Details |
October 24, 2015 | July 25, 2015 | |||||||
Inventories: | ||||||||
Raw materials | $ | 107 | $ | 114 | ||||
Work in process | 1 | 2 | ||||||
Finished goods: | ||||||||
Distributor inventory and deferred cost of sales | 631 | 610 | ||||||
Manufactured finished goods | 464 | 593 | ||||||
Total finished goods | 1,095 | 1,203 | ||||||
Service-related spares | 240 | 258 | ||||||
Demonstration systems | 39 | 50 | ||||||
Total | $ | 1,482 | $ | 1,627 |
Property and equipment, net: | ||||||||
Gross property and equipment: | ||||||||
Land, buildings, and building and leasehold improvements | $ | 4,561 | $ | 4,495 | ||||
Computer equipment and related software | 1,276 | 1,310 | ||||||
Production, engineering, and other equipment | 5,742 | 5,753 | ||||||
Operating lease assets | 372 | 372 | ||||||
Furniture and fixtures | 502 | 497 | ||||||
Total gross property and equipment | 12,453 | 12,427 | ||||||
Less: accumulated depreciation and amortization | (9,107 | ) | (9,095 | ) | ||||
Total | $ | 3,346 | $ | 3,332 |
Other assets: | ||||||||
Deferred tax assets | $ | 1,583 | $ | 1,648 | ||||
Investments in privately held companies | 928 | 897 | ||||||
Other | 759 | 618 | ||||||
Total | $ | 3,270 | $ | 3,163 |
Deferred revenue: | ||||||||
Service | $ | 9,689 | $ | 9,757 | ||||
Product: | ||||||||
Unrecognized revenue on product shipments and other deferred revenue | 4,888 | 4,766 | ||||||
Cash receipts related to unrecognized revenue from two-tier distributors | 585 | 660 | ||||||
Total product deferred revenue | 5,473 | 5,426 | ||||||
Total | $ | 15,162 | $ | 15,183 | ||||
Reported as: | ||||||||
Current | $ | 9,821 | $ | 9,824 | ||||
Noncurrent | 5,341 | 5,359 | ||||||
Total | $ | 15,162 | $ | 15,183 |
|
7. | Financing Receivables and Operating Leases |
(a) | Financing Receivables |
October 24, 2015 | Lease Receivables | Loan Receivables | Financed Service Contracts and Other | Total | |||||||||||
Gross | $ | 3,317 | $ | 1,963 | $ | 3,598 | $ | 8,878 | |||||||
Residual value | 225 | — | — | 225 | |||||||||||
Unearned income | (182 | ) | — | — | (182 | ) | |||||||||
Allowance for credit loss | (255 | ) | (90 | ) | (33 | ) | (378 | ) | |||||||
Total, net | $ | 3,105 | $ | 1,873 | $ | 3,565 | $ | 8,543 | |||||||
Reported as: | |||||||||||||||
Current | $ | 1,447 | $ | 931 | $ | 2,128 | $ | 4,506 | |||||||
Noncurrent | 1,658 | 942 | 1,437 | 4,037 | |||||||||||
Total, net | $ | 3,105 | $ | 1,873 | $ | 3,565 | $ | 8,543 |
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 |
Fiscal Year | Amount | ||
2016 (remaining nine months) | $ | 1,307 | |
2017 | 1,079 | ||
2018 | 606 | ||
2019 | 254 | ||
2020 | 70 | ||
Thereafter | 1 | ||
Total | $ | 3,317 |
(b) | Credit Quality of Financing Receivables |
INTERNAL CREDIT RISK RATING | |||||||||||||||
October 24, 2015 | 1 to 4 | 5 to 6 | 7 and Higher | Total | |||||||||||
Lease receivables | $ | 1,670 | $ | 1,336 | $ | 129 | $ | 3,135 | |||||||
Loan receivables | 1,039 | 783 | 141 | 1,963 | |||||||||||
Financed service contracts and other | 2,111 | 1,437 | 50 | 3,598 | |||||||||||
Total | $ | 4,820 | $ | 3,556 | $ | 320 | $ | 8,696 |
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 |
DAYS PAST DUE (INCLUDES BILLED AND UNBILLED) | |||||||||||||||||||||||||||||||
October 24, 2015 | 31-60 | 61-90 | 91+ | Total Past Due | Current | Total | Nonaccrual Financing Receivables | Impaired Financing Receivables | |||||||||||||||||||||||
Lease receivables | $ | 100 | $ | 51 | $ | 176 | $ | 327 | $ | 2,808 | $ | 3,135 | $ | 83 | $ | 72 | |||||||||||||||
Loan receivables | 22 | 85 | 69 | 176 | 1,787 | 1,963 | 17 | 17 | |||||||||||||||||||||||
Financed service contracts and other | 152 | 50 | 249 | 451 | 3,147 | 3,598 | 26 | 6 | |||||||||||||||||||||||
Total | $ | 274 | $ | 186 | $ | 494 | $ | 954 | $ | 7,742 | $ | 8,696 | $ | 126 | $ | 95 |
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 |
(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 25, 2015 | $ | 259 | $ | 87 | $ | 36 | $ | 382 | |||||||
Provisions | — | 4 | — | 4 | |||||||||||
Recoveries (write-offs), net | (4 | ) | — | (3 | ) | (7 | ) | ||||||||
Foreign exchange and other | — | (1 | ) | — | (1 | ) | |||||||||
Allowance for credit loss as of October 24, 2015 | $ | 255 | $ | 90 | $ | 33 | $ | 378 | |||||||
Financing receivables as of October 24, 2015 (1) | $ | 3,360 | $ | 1,963 | $ | 3,598 | $ | 8,921 |
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 | 22 | (13 | ) | 19 | 28 | ||||||||||
Recoveries (write-offs), net | (4 | ) | 1 | — | (3 | ) | |||||||||
Foreign exchange and other | (3 | ) | (2 | ) | (1 | ) | (6 | ) | |||||||
Allowance for credit loss as of October 25, 2014 | $ | 248 | $ | 84 | $ | 36 | $ | 368 | |||||||
Financing receivables as of October 25, 2014 (1) | $ | 3,509 | $ | 1,744 | $ | 3,071 | $ | 8,324 |
(d) | Operating Leases |
October 24, 2015 | July 25, 2015 | ||||||
Operating lease assets | $ | 372 | $ | 372 | |||
Accumulated depreciation | (207 | ) | (205 | ) | |||
Operating lease assets, net | $ | 165 | $ | 167 |
|
8. | Investments |
(a) | Summary of Available-for-Sale Investments |
October 24, 2015 | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||
Fixed income securities: | |||||||||||||||
U.S. government securities | $ | 27,409 | $ | 63 | $ | (1 | ) | $ | 27,471 | ||||||
U.S. government agency securities | 3,606 | 11 | — | 3,617 | |||||||||||
Non-U.S. government and agency securities | 1,133 | 3 | — | 1,136 | |||||||||||
Corporate debt securities | 18,314 | 70 | (78 | ) | 18,306 | ||||||||||
U.S. agency mortgage-backed securities | 1,454 | 15 | — | 1,469 | |||||||||||
Total fixed income securities | 51,916 | 162 | (79 | ) | 51,999 | ||||||||||
Publicly traded equity securities | 1,094 | 268 | (12 | ) | 1,350 | ||||||||||
Total | $ | 53,010 | $ | 430 | $ | (91 | ) | $ | 53,349 |
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 |
(b) | Gains and Losses on Available-for-Sale Investments |
Three Months Ended | |||||||
October 24, 2015 | October 25, 2014 | ||||||
Gross realized gains | $ | 35 | $ | 21 | |||
Gross realized losses | (36 | ) | (14 | ) | |||
Total | $ | (1 | ) | $ | 7 |
Three Months Ended | |||||||
October 24, 2015 | October 25, 2014 | ||||||
Net losses on investments in publicly traded equity securities | $ | (9 | ) | $ | (4 | ) | |
Net gains on investments in fixed income securities | 8 | 11 | |||||
Total | $ | (1 | ) | $ | 7 |
UNREALIZED LOSSES LESS THAN 12 MONTHS | UNREALIZED LOSSES 12 MONTHS OR GREATER | TOTAL | |||||||||||||||||||||
October 24, 2015 | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | |||||||||||||||||
Fixed income securities: | |||||||||||||||||||||||
U.S. government securities | $ | 2,566 | $ | (1 | ) | $ | — | $ | — | $ | 2,566 | $ | (1 | ) | |||||||||
U.S. government agency securities | 80 | — | — | — | 80 | — | |||||||||||||||||
Non-U.S. government and agency securities | 57 | — | 10 | — | 67 | — | |||||||||||||||||
Corporate debt securities | 7,421 | (66 | ) | 1,048 | (12 | ) | 8,469 | (78 | ) | ||||||||||||||
U.S. agency mortgage-backed securities | 77 | — | — | — | 77 | — | |||||||||||||||||
Total fixed income securities | 10,201 | (67 | ) | 1,058 | (12 | ) | 11,259 | (79 | ) | ||||||||||||||
Publicly traded equity securities | 103 | (11 | ) | 2 | (1 | ) | 105 | (12 | ) | ||||||||||||||
Total | $ | 10,304 | $ | (78 | ) | $ | 1,060 | $ | (13 | ) | $ | 11,364 | $ | (91 | ) |
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 | ) |
(c) | Maturities of Fixed Income Securities |
Amortized Cost | Fair Value | ||||||
Less than 1 year | $ | 17,274 | $ | 17,276 | |||
Due in 1 to 2 years | 15,914 | 15,950 | |||||
Due in 2 to 5 years | 17,105 | 17,138 | |||||
Due after 5 years | 1,623 | 1,635 | |||||
Total | $ | 51,916 | $ | 51,999 |
(d) | Securities Lending |
(e) | Investments in Privately Held Companies |
October 24, 2015 | July 25, 2015 | ||||||
Equity method investments | $ | 619 | $ | 578 | |||
Cost method investments | 309 | 319 | |||||
Total | $ | 928 | $ | 897 |
|
9. | Fair Value |
(a) | Fair Value Hierarchy |
(b) | Assets and Liabilities Measured at Fair Value on a Recurring Basis |
OCTOBER 24, 2015 FAIR VALUE MEASUREMENTS | JULY 25, 2015 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 | $ | 4,317 | $ | — | $ | — | $ | 4,317 | $ | 5,336 | $ | — | $ | — | $ | 5,336 | |||||||||||||||
Corporate debt securities | — | 25 | — | 25 | — | 14 | — | 14 | |||||||||||||||||||||||
Available-for-sale investments: | |||||||||||||||||||||||||||||||
U.S. government securities | — | 27,471 | — | 27,471 | — | 29,939 | — | 29,939 | |||||||||||||||||||||||
U.S. government agency securities | — | 3,617 | — | 3,617 | — | 3,663 | — | 3,663 | |||||||||||||||||||||||
Non-U.S. government and agency securities | — | 1,136 | — | 1,136 | — | 1,128 | — | 1,128 | |||||||||||||||||||||||
Corporate debt securities | — | 18,306 | — | 18,306 | — | 15,783 | — | 15,783 | |||||||||||||||||||||||
U.S. agency mortgage-backed securities | — | 1,469 | — | 1,469 | — | 1,461 | — | 1,461 | |||||||||||||||||||||||
Publicly traded equity securities | 1,350 | — | — | 1,350 | 1,565 | — | — | 1,565 | |||||||||||||||||||||||
Derivative assets | — | 340 | 3 | 343 | — | 214 | 4 | 218 | |||||||||||||||||||||||
Total | $ | 5,667 | $ | 52,364 | $ | 3 | $ | 58,034 | $ | 6,901 | $ | 52,202 | $ | 4 | $ | 59,107 | |||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||
Derivative liabilities | $ | — | $ | 14 | $ | — | $ | 14 | $ | — | $ | 12 | $ | — | $ | 12 | |||||||||||||||
Total | $ | — | $ | 14 | $ | — | $ | 14 | $ | — | $ | 12 | $ | — | $ | 12 |
(c) | Assets Measured at Fair Value on a Nonrecurring Basis |
LOSSES FOR THE THREE MONTHS ENDED | |||||||
October 24, 2015 | October 25, 2014 | ||||||
Investments in privately held companies (impaired) | $ | (17 | ) | $ | (1 | ) |
(d) | Other Fair Value Disclosures |
|
10. | Borrowings |
(a) | Short-Term Debt |
October 24, 2015 | July 25, 2015 | ||||||||||||
Amount | Effective Rate | Amount | Effective Rate | ||||||||||
Current portion of long-term debt | $ | 3,025 | 3.09 | % | $ | 3,894 | 2.48 | % | |||||
Other short-term debt | 2 | 2.08 | % | 3 | 2.44 | % | |||||||
Total | $ | 3,027 | $ | 3,897 |
(b) | Long-Term Debt |
October 24, 2015 | July 25, 2015 | ||||||||||||
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% | ||||||
Three-month LIBOR plus 0.28% | March 3, 2017 | 1,000 | 0.68% | 1,000 | 0.63% | ||||||||
Three-month LIBOR plus 0.31% | June 15, 2018 | 900 | 0.71% | 900 | 0.65% | ||||||||
Three-month LIBOR plus 0.50% | March 1, 2019 | 500 | 0.88% | 500 | 0.84% | ||||||||
Fixed-rate notes: | |||||||||||||
5.50% | February 22, 2016 | 3,000 | 3.09% | 3,000 | 3.07% | ||||||||
1.10% | March 3, 2017 | 2,400 | 0.60% | 2,400 | 0.59% | ||||||||
3.15% | March 14, 2017 | 750 | 0.90% | 750 | 0.85% | ||||||||
1.65% | June 15, 2018 | 1,600 | 1.72% | 1,600 | 1.72% | ||||||||
4.95% | February 15, 2019 | 2,000 | 4.70% | 2,000 | 4.70% | ||||||||
2.125% | March 1, 2019 | 1,750 | 0.81% | 1,750 | 0.80% | ||||||||
4.45% | January 15, 2020 | 2,500 | 3.02% | 2,500 | 3.01% | ||||||||
2.45% | June 15, 2020 | 1,500 | 2.54% | 1,500 | 2.54% | ||||||||
2.90% | March 4, 2021 | 500 | 0.97% | 500 | 0.96% | ||||||||
3.00% | June 15, 2022 | 500 | 1.22% | 500 | 1.21% | ||||||||
3.625% | March 4, 2024 | 1,000 | 1.09% | 1,000 | 1.08% | ||||||||
3.50% | June 15, 2025 | 500 | 1.38% | 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% | ||||||||||
Total | 24,400 | 25,251 | |||||||||||
Unaccreted discount/issuance costs | (128 | ) | (131 | ) | |||||||||
Hedge accounting fair value adjustments | 347 | 231 | |||||||||||
Total | $ | 24,619 | $ | 25,351 | |||||||||
Reported as: | |||||||||||||
Current portion of long-term debt | $ | 3,025 | $ | 3,894 | |||||||||
Long-term debt | 21,594 | 21,457 | |||||||||||
Total | $ | 24,619 | $ | 25,351 |
Fiscal Year | Amount | ||
2016 (remaining nine months) | $ | 3,000 | |
2017 | 4,150 | ||
2018 | 2,500 | ||
2019 | 4,250 | ||
2020 | 4,000 | ||
Thereafter | 6,500 | ||
Total | $ | 24,400 |
(c) | Credit Facility |
|
11. | Derivative Instruments |
(a) | Summary of Derivative Instruments |
DERIVATIVE ASSETS | DERIVATIVE LIABILITIES | ||||||||||||||||||
Balance Sheet Line Item | October 24, 2015 | July 25, 2015 | Balance Sheet Line Item | October 24, 2015 | July 25, 2015 | ||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||||
Foreign currency derivatives | Other current assets | $ | 9 | $ | 10 | Other current liabilities | $ | 11 | $ | 11 | |||||||||
Interest rate derivatives | Other assets | 330 | 202 | Other long-term liabilities | — | — | |||||||||||||
Total | 339 | 212 | 11 | 11 | |||||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||||
Foreign currency derivatives | Other current assets | 1 | 2 | Other current liabilities | 3 | 1 | |||||||||||||
Equity derivatives | Other assets | 3 | 4 | Other long-term liabilities | — | — | |||||||||||||
Total | 4 | 6 | 3 | 1 | |||||||||||||||
Total | $ | 343 | $ | 218 | $ | 14 | $ | 12 |
GAINS (LOSSES) RECOGNIZED IN OCI ON DERIVATIVES FOR THE THREE MONTHS ENDED (EFFECTIVE PORTION) | GAINS (LOSSES) RECLASSIFIED FROM AOCI INTO INCOME FOR THE THREE MONTHS ENDED (EFFECTIVE PORTION) | |||||||||||||||||
October 24, 2015 | October 25, 2014 | Line Item in Statements of Operations | October 24, 2015 | October 25, 2014 | ||||||||||||||
Derivatives designated as cash flow hedging instruments: | ||||||||||||||||||
Foreign currency derivatives | $ | (4 | ) | $ | (56 | ) | Operating expenses | $ | (2 | ) | $ | (3 | ) | |||||
Cost of sales—service | (1 | ) | (1 | ) | ||||||||||||||
Total | $ | (4 | ) | $ | (56 | ) | $ | (3 | ) | $ | (4 | ) | ||||||
Derivatives designated as net investment hedging instruments: | ||||||||||||||||||
Foreign currency derivatives | $ | — | $ | 20 | Other income (loss), net | $ | — | $ | — |
GAINS (LOSSES) ON DERIVATIVE INSTRUMENTS FOR THE THREE MONTHS ENDED | GAINS (LOSSES) RELATED TO HEDGED ITEMS FOR THE THREE MONTHS ENDED | |||||||||||||||||
Derivatives Designated as Fair Value Hedging Instruments | Line Item in Statements of Operations | October 24, 2015 | October 25, 2014 | October 24, 2015 | October 25, 2014 | |||||||||||||
Equity derivatives | Other income (loss), net | $ | — | $ | 6 | $ | — | $ | (6 | ) | ||||||||
Interest rate derivatives | Interest expense | 127 | 73 | (125 | ) | (73 | ) | |||||||||||
Total | $ | 127 | $ | 79 | $ | (125 | ) | $ | (79 | ) |
GAINS (LOSSES) FOR THE THREE MONTHS ENDED | ||||||||||
Derivatives Not Designated as Hedging Instruments | Line Item in Statements of Operations | October 24, 2015 | October 25, 2014 | |||||||
Foreign currency derivatives | Other income (loss), net | $ | 4 | $ | (58 | ) | ||||
Total return swaps—deferred compensation | Operating expenses | (16 | ) | (13 | ) | |||||
Equity derivatives | Other income (loss), net | 10 | (4 | ) | ||||||
Total | $ | (2 | ) | $ | (75 | ) |
October 24, 2015 | July 25, 2015 | ||||||
Derivatives designated as hedging instruments: | |||||||
Foreign currency derivatives—cash flow hedges | $ | 1,083 | $ | 1,201 | |||
Interest rate derivatives | 11,400 | 11,400 | |||||
Net investment hedging instruments | 219 | 192 | |||||
Derivatives not designated as hedging instruments: | |||||||
Foreign currency derivatives | 2,244 | 2,023 | |||||
Total return swaps—deferred compensation | 473 | 462 | |||||
Total | $ | 15,419 | $ | 15,278 |
(b) | Offsetting of Derivative Instruments |
October 24, 2015 | |||||||||||||||||||||||
Gross Amounts Offset in the Consolidated Balance Sheets | Gross Amounts Not Offset in the Consolidated Balance Sheets, but with Legal Rights to Offset | ||||||||||||||||||||||
Gross Amounts Recognized | Gross Amounts Offset | Net Amounts Presented | Gross Derivative Amounts | Cash Collateral | Net Amount | ||||||||||||||||||
Derivatives assets | $ | 343 | $ | — | $ | 343 | $ | (14 | ) | $ | (225 | ) | $ | 104 | |||||||||
Derivatives liabilities | $ | 14 | $ | — | $ | 14 | $ | (14 | ) | $ | — | $ | — |
July 25, 2015 | |||||||||||||||||||||||
Gross Amounts Offset in the Consolidated Balance Sheets | Gross Amounts Not Offset in the Consolidated Balance Sheets, but with Legal Rights to Offset | ||||||||||||||||||||||
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 | ) | $ | — | $ | — |
(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 (remaining nine months) | $ | 266 | |
2017 | 263 | ||
2018 | 189 | ||
2019 | 105 | ||
2020 | 83 | ||
Thereafter | 189 | ||
Total | $ | 1,095 |
(b) | Purchase Commitments with Contract Manufacturers and Suppliers |
(c) | Other Commitments |
Three Months Ended | |||||||
October 24, 2015 | October 25, 2014 | ||||||
Compensation expense related to acquisitions | $ | 73 | $ | 98 |
(d) | Product Warranties |
Three Months Ended | |||||||
October 24, 2015 | October 25, 2014 | ||||||
Balance at beginning of period | $ | 449 | $ | 446 | |||
Provision for warranties issued | 150 | 143 | |||||
Payments | (166 | ) | (153 | ) | |||
Balance at end of period | $ | 433 | $ | 436 |
(e) | Financing and Other Guarantees |
October 24, 2015 | July 25, 2015 | ||||||
Maximum potential future payments relating to financing guarantees: | |||||||
Channel partner | $ | 250 | $ | 288 | |||
End user | 124 | 129 | |||||
Total | $ | 374 | $ | 417 | |||
Deferred revenue associated with financing guarantees: | |||||||
Channel partner | $ | (96 | ) | $ | (127 | ) | |
End user | (100 | ) | (107 | ) | |||
Total | $ | (196 | ) | $ | (234 | ) | |
Maximum potential future payments relating to financing guarantees, net of associated deferred revenue | $ | 178 | $ | 183 |
(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 |
Three Months Ended | |||||||
October 24, 2015 | October 25, 2014 | ||||||
Cost of sales—product | $ | 13 | $ | 11 | |||
Cost of sales—service | 38 | 37 | |||||
Share-based compensation expense in cost of sales | 51 | 48 | |||||
Research and development | 114 | 119 | |||||
Sales and marketing | 139 | 147 | |||||
General and administrative | 57 | 59 | |||||
Restructuring and other charges | 15 | (4 | ) | ||||
Share-based compensation expense in operating expenses | 325 | 321 | |||||
Total share-based compensation expense | $ | 376 | $ | 369 | |||
Income tax benefit for share-based compensation | $ | 95 | $ | 94 |
(d) | Share-Based Awards Available for Grant |
Share-Based Awards Available for Grant | ||
BALANCE AT JULY 26, 2014 | 310 | |
Restricted stock, stock units, and other share-based awards granted | (101 | ) |
Share-based awards canceled/forfeited/expired | 40 | |
Shares withheld for taxes and not issued | 27 | |
BALANCE AT JULY 25, 2015 | 276 | |
Restricted stock, stock units, and other share-based awards granted | (23 | ) |
Share-based awards canceled/forfeited/expired | 8 | |
Shares withheld for taxes and not issued | 22 | |
Other | 1 | |
BALANCE AT OCTOBER 24, 2015 | 284 |
(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 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 | ||||||||
Granted and assumed | 15 | 24.07 | ||||||||
Vested | (37 | ) | 20.24 | $ | 970 | |||||
Canceled/forfeited | (5 | ) | 22.10 | |||||||
UNVESTED BALANCE AT OCTOBER 24, 2015 | 116 | $ | 22.93 |
(f) | Stock Option Awards |
STOCK OPTIONS OUTSTANDING | ||||||
Number Outstanding | Weighted-Average Exercise Price per Share | |||||
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 | ||||
Assumed from acquisitions | 3 | 2.13 | ||||
Exercised | (17 | ) | 22.10 | |||
Canceled/forfeited/expired | (5 | ) | 30.15 | |||
BALANCE AT OCTOBER 24, 2015 | 84 | $ | 29.09 |
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 | 5 | 6.1 | $ | 3.88 | $ | 150 | 2 | $ | 5.14 | $ | 76 | |||||||||||||
$ 20.01 – 25.00 | 3 | 0.9 | 23.12 | 16 | 3 | 23.12 | 16 | |||||||||||||||||
$ 25.01 – 30.00 | 13 | 0.8 | 26.84 | 32 | 13 | 26.85 | 32 | |||||||||||||||||
$ 30.01 – 35.00 | 63 | 0.9 | 32.16 | — | 63 | 32.16 | — | |||||||||||||||||
Total | 84 | 1.2 | $ | 29.09 | $ | 198 | 81 | $ | 29.99 | $ | 124 |
(g) | Valuation of Employee Share-Based Awards |
RESTRICTED STOCK UNITS | PERFORMANCE RESTRICTED STOCK UNITS | ||||||||||||||
Three Months Ended | October 24, 2015 | October 25, 2014 | October 24, 2015 | October 25, 2014 | |||||||||||
Number of shares granted (in millions) | 9 | 9 | 4 | 6 | |||||||||||
Grant date fair value per share | $ | 24.02 | $ | 23.10 | $ | 24.61 | $ | 23.31 | |||||||
Weighted-average assumptions/inputs: | |||||||||||||||
Expected dividend yield | 3.2 | % | 3.0 | % | 3.2 | % | 3.0 | % | |||||||
Range of risk-free interest rates | 0.0% – 1.1% | 0.0% – 1.8% | 0.0% – 1.1% | 0.0% – 1.8% | |||||||||||
Range of expected volatilities for index | N/A | N/A | 15.3% – 54.3% | 15.1% – 70.0% |
|
15. | Comprehensive Income |
Net Unrealized Gains on Available-for-Sale Investments | Net Unrealized Losses Cash Flow Hedging Instruments | Cumulative Translation Adjustment and Actuarial Gains and Losses | Accumulated Other Comprehensive Income (Loss) | ||||||||||||
BALANCE AT JULY 25, 2015 | $ | 310 | $ | (16 | ) | $ | (233 | ) | $ | 61 | |||||
Other comprehensive income (loss) before reclassifications attributable to Cisco Systems, Inc. | (155 | ) | (4 | ) | (178 | ) | (337 | ) | |||||||
(Gains) losses reclassified out of AOCI | 1 | 3 | 1 | 5 | |||||||||||
Tax benefit (expense) | 56 | 2 | (39 | ) | 19 | ||||||||||
BALANCE AT OCTOBER 24, 2015 | $ | 212 | $ | (15 | ) | $ | (449 | ) | $ | (252 | ) |
Net Unrealized Gains on Available-for-Sale Investments | Net Unrealized Losses Cash Flow Hedging Instruments | Cumulative Translation Adjustment and Actuarial Gains and Losses | Accumulated Other Comprehensive Income (Loss) | ||||||||||||
BALANCE AT JULY 26, 2014 | $ | 424 | $ | (12 | ) | $ | 265 | $ | 677 | ||||||
Other comprehensive income (loss) before reclassifications attributable to Cisco Systems, Inc. | (36 | ) | (56 | ) | (161 | ) | (253 | ) | |||||||
(Gains) losses reclassified out of AOCI | (7 | ) | 4 | — | (3 | ) | |||||||||
Tax benefit (expense) | 16 | 3 | 11 | 30 | |||||||||||
BALANCE AT OCTOBER 25, 2014 | $ | 397 | $ | (61 | ) | $ | 115 | $ | 451 |
Three Months Ended | ||||||||||
October 24, 2015 | October 25, 2014 | |||||||||
Comprehensive Income Components | Income Before Taxes | Line Item in Statements of Operations | ||||||||
Net unrealized gains on available-for-sale investments | ||||||||||
$ | (1 | ) | $ | 7 | Other income (loss), net | |||||
Net unrealized losses on cash flow hedging instruments | ||||||||||
Foreign currency derivatives | (2 | ) | (3 | ) | Operating expenses | |||||
Foreign currency derivatives | (1 | ) | (1 | ) | Cost of sales—service | |||||
(3 | ) | (4 | ) | |||||||
Cumulative translation adjustment and actuarial gains and losses | ||||||||||
(1 | ) | — | Operating expenses | |||||||
Total amounts reclassified out of AOCI | $ | (5 | ) | $ | 3 |
|
16. | Income Taxes |
Three Months Ended | ||||||||
October 24, 2015 | October 25, 2014 | |||||||
Income before provision for income taxes | $ | 3,137 | $ | 2,360 | ||||
Provision for income taxes | $ | 707 | $ | 532 | ||||
Effective tax rate | 22.5 | % | 22.5 | % |
|
17. | Segment Information and Major Customers |
(a) | Revenue and Gross Margin by Segment |
Three Months Ended | |||||||
October 24, 2015 | October 25, 2014 | ||||||
Revenue: | |||||||
Americas | $ | 7,799 | $ | 7,501 | |||
EMEA | 3,087 | 3,002 | |||||
APJC | 1,796 | 1,742 | |||||
Total | $ | 12,682 | $ | 12,245 | |||
Gross margin: | |||||||
Americas | $ | 4,950 | $ | 4,810 | |||
EMEA | 1,982 | 1,915 | |||||
APJC | 1,078 | 1,025 | |||||
Segment total | 8,010 | 7,750 | |||||
Unallocated corporate items | (178 | ) | (417 | ) | |||
Total | $ | 7,832 | $ | 7,333 |
(b) | Revenue for Groups of Similar Products and Services |
Three Months Ended | |||||||
October 24, 2015 | October 25, 2014 | ||||||
Revenue: | |||||||
Switching | $ | 4,022 | $ | 3,846 | |||
NGN Routing | 1,793 | 1,949 | |||||
Collaboration | 1,115 | 950 | |||||
Data Center | 859 | 692 | |||||
Service Provider Video | 850 | 871 | |||||
Wireless | 645 | 605 | |||||
Security | 485 | 455 | |||||
Other | 75 | 67 | |||||
Product | 9,844 | 9,435 | |||||
Service | 2,838 | 2,810 | |||||
Total | $ | 12,682 | $ | 12,245 |
(c) | Additional Segment Information |
October 24, 2015 | July 25, 2015 | ||||||
Property and equipment, net: | |||||||
United States | $ | 2,727 | $ | 2,733 | |||
International | 619 | 599 | |||||
Total | $ | 3,346 | $ | 3,332 |
|
(a) | Fair Value Hierarchy |
|
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 | 4,488 | $ | 23,001 | $ | 70,885 | $ | 93,886 |
|
Purchase Consideration | Net Liabilities Assumed | Purchased Intangible Assets | Goodwill | ||||||||||||
MaintenanceNet | $ | 105 | $ | (21 | ) | $ | 65 | $ | 61 | ||||||
OpenDNS | 545 | (9 | ) | 61 | 493 | ||||||||||
Other | 6 | (1 | ) | 4 | 3 | ||||||||||
Total | $ | 656 | $ | (31 | ) | $ | 130 | $ | 557 |
|
Balance at | Balance at | ||||||||||||||
July 25, 2015 | Acquisitions | Other | October 24, 2015 | ||||||||||||
Americas | $ | 15,212 | $ | 361 | $ | (90 | ) | $ | 15,483 | ||||||
EMEA | 5,791 | 141 | (34 | ) | 5,898 | ||||||||||
APJC | 3,466 | 55 | (20 | ) | 3,501 | ||||||||||
Total | $ | 24,469 | $ | 557 | $ | (144 | ) | $ | 24,882 |
FINITE LIVES | INDEFINITE LIVES | TOTAL | |||||||||||||||||||||||
TECHNOLOGY | CUSTOMER RELATIONSHIPS | OTHER | IPR&D | ||||||||||||||||||||||
Weighted- Average Useful Life (in Years) | Amount | Weighted- Average Useful Life (in Years) | Amount | Weighted- Average Useful Life (in Years) | Amount | Amount | Amount | ||||||||||||||||||
MaintenanceNet | 5.0 | $ | 50 | 5.0 | $ | 2 | 2.0 | $ | 2 | $ | 11 | $ | 65 | ||||||||||||
OpenDNS | 5.0 | 43 | 7.0 | 15 | 1.0 | 2 | 1 | $ | 61 | ||||||||||||||||
Other | 5.0 | 4 | 0.0 | — | 0.0 | — | — | $ | 4 | ||||||||||||||||
Total | $ | 97 | $ | 17 | $ | 4 | $ | 12 | $ | 130 |
October 24, 2015 | Gross | Accumulated Amortization | Net | |||||||||
Purchased intangible assets with finite lives: | ||||||||||||
Technology | $ | 3,454 | $ | (1,902 | ) | $ | 1,552 | |||||
Customer relationships | 1,716 | (1,036 | ) | 680 | ||||||||
Other | 58 | (27 | ) | 31 | ||||||||
Total purchased intangible assets with finite lives | 5,228 | (2,965 | ) | 2,263 | ||||||||
In-process research and development, with indefinite lives | 29 | — | 29 | |||||||||
Total | $ | 5,257 | $ | (2,965 | ) | $ | 2,292 |
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 |
Three Months Ended | |||||||
October 24, 2015 | October 25, 2014 | ||||||
Amortization of purchased intangible assets: | |||||||
Cost of sales | $ | 146 | $ | 189 | |||
Operating expenses | 69 | 71 | |||||
Total | $ | 215 | $ | 260 |
Fiscal Year | Amount | ||
2016 (remaining nine months) | $ | 574 | |
2017 | 619 | ||
2018 | 476 | ||
2019 | 379 | ||
2020 | 162 | ||
Thereafter | 53 | ||
Total | $ | 2,263 |
|
FISCAL 2014 PLAN | FISCAL 2015 PLAN | |||||||||||||||||||
Employee Severance | Other | Employee Severance | Other | Total | ||||||||||||||||
Liability as of July 25, 2015 | $ | 11 | $ | 14 | $ | 49 | $ | 15 | $ | 89 | ||||||||||
Charges | — | — | 125 | 17 | 142 | |||||||||||||||
Cash payments | (4 | ) | (1 | ) | (119 | ) | (5 | ) | (129 | ) | ||||||||||
Non-cash items | — | — | — | (16 | ) | (16 | ) | |||||||||||||
Liability as of October 24, 2015 | $ | 7 | $ | 13 | $ | 55 | $ | 11 | $ | 86 |
|
October 24, 2015 | July 25, 2015 | |||||||
Inventories: | ||||||||
Raw materials | $ | 107 | $ | 114 | ||||
Work in process | 1 | 2 | ||||||
Finished goods: | ||||||||
Distributor inventory and deferred cost of sales | 631 | 610 | ||||||
Manufactured finished goods | 464 | 593 | ||||||
Total finished goods | 1,095 | 1,203 | ||||||
Service-related spares | 240 | 258 | ||||||
Demonstration systems | 39 | 50 | ||||||
Total | $ | 1,482 | $ | 1,627 |
Property and equipment, net: | ||||||||
Gross property and equipment: | ||||||||
Land, buildings, and building and leasehold improvements | $ | 4,561 | $ | 4,495 | ||||
Computer equipment and related software | 1,276 | 1,310 | ||||||
Production, engineering, and other equipment | 5,742 | 5,753 | ||||||
Operating lease assets | 372 | 372 | ||||||
Furniture and fixtures | 502 | 497 | ||||||
Total gross property and equipment | 12,453 | 12,427 | ||||||
Less: accumulated depreciation and amortization | (9,107 | ) | (9,095 | ) | ||||
Total | $ | 3,346 | $ | 3,332 |
Other assets: | ||||||||
Deferred tax assets | $ | 1,583 | $ | 1,648 | ||||
Investments in privately held companies | 928 | 897 | ||||||
Other | 759 | 618 | ||||||
Total | $ | 3,270 | $ | 3,163 |
Deferred revenue: | ||||||||
Service | $ | 9,689 | $ | 9,757 | ||||
Product: | ||||||||
Unrecognized revenue on product shipments and other deferred revenue | 4,888 | 4,766 | ||||||
Cash receipts related to unrecognized revenue from two-tier distributors | 585 | 660 | ||||||
Total product deferred revenue | 5,473 | 5,426 | ||||||
Total | $ | 15,162 | $ | 15,183 | ||||
Reported as: | ||||||||
Current | $ | 9,821 | $ | 9,824 | ||||
Noncurrent | 5,341 | 5,359 | ||||||
Total | $ | 15,162 | $ | 15,183 |
|
October 24, 2015 | Lease Receivables | Loan Receivables | Financed Service Contracts and Other | Total | |||||||||||
Gross | $ | 3,317 | $ | 1,963 | $ | 3,598 | $ | 8,878 | |||||||
Residual value | 225 | — | — | 225 | |||||||||||
Unearned income | (182 | ) | — | — | (182 | ) | |||||||||
Allowance for credit loss | (255 | ) | (90 | ) | (33 | ) | (378 | ) | |||||||
Total, net | $ | 3,105 | $ | 1,873 | $ | 3,565 | $ | 8,543 | |||||||
Reported as: | |||||||||||||||
Current | $ | 1,447 | $ | 931 | $ | 2,128 | $ | 4,506 | |||||||
Noncurrent | 1,658 | 942 | 1,437 | 4,037 | |||||||||||
Total, net | $ | 3,105 | $ | 1,873 | $ | 3,565 | $ | 8,543 |
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 |
Fiscal Year | Amount | ||
2016 (remaining nine months) | $ | 1,307 | |
2017 | 1,079 | ||
2018 | 606 | ||
2019 | 254 | ||
2020 | 70 | ||
Thereafter | 1 | ||
Total | $ | 3,317 |
INTERNAL CREDIT RISK RATING | |||||||||||||||
October 24, 2015 | 1 to 4 | 5 to 6 | 7 and Higher | Total | |||||||||||
Lease receivables | $ | 1,670 | $ | 1,336 | $ | 129 | $ | 3,135 | |||||||
Loan receivables | 1,039 | 783 | 141 | 1,963 | |||||||||||
Financed service contracts and other | 2,111 | 1,437 | 50 | 3,598 | |||||||||||
Total | $ | 4,820 | $ | 3,556 | $ | 320 | $ | 8,696 |
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 |
DAYS PAST DUE (INCLUDES BILLED AND UNBILLED) | |||||||||||||||||||||||||||||||
October 24, 2015 | 31-60 | 61-90 | 91+ | Total Past Due | Current | Total | Nonaccrual Financing Receivables | Impaired Financing Receivables | |||||||||||||||||||||||
Lease receivables | $ | 100 | $ | 51 | $ | 176 | $ | 327 | $ | 2,808 | $ | 3,135 | $ | 83 | $ | 72 | |||||||||||||||
Loan receivables | 22 | 85 | 69 | 176 | 1,787 | 1,963 | 17 | 17 | |||||||||||||||||||||||
Financed service contracts and other | 152 | 50 | 249 | 451 | 3,147 | 3,598 | 26 | 6 | |||||||||||||||||||||||
Total | $ | 274 | $ | 186 | $ | 494 | $ | 954 | $ | 7,742 | $ | 8,696 | $ | 126 | $ | 95 |
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 |
CREDIT LOSS ALLOWANCES | |||||||||||||||
Lease Receivables | Loan Receivables | Financed Service Contracts and Other | Total | ||||||||||||
Allowance for credit loss as of July 25, 2015 | $ | 259 | $ | 87 | $ | 36 | $ | 382 | |||||||
Provisions | — | 4 | — | 4 | |||||||||||
Recoveries (write-offs), net | (4 | ) | — | (3 | ) | (7 | ) | ||||||||
Foreign exchange and other | — | (1 | ) | — | (1 | ) | |||||||||
Allowance for credit loss as of October 24, 2015 | $ | 255 | $ | 90 | $ | 33 | $ | 378 | |||||||
Financing receivables as of October 24, 2015 (1) | $ | 3,360 | $ | 1,963 | $ | 3,598 | $ | 8,921 |
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 | 22 | (13 | ) | 19 | 28 | ||||||||||
Recoveries (write-offs), net | (4 | ) | 1 | — | (3 | ) | |||||||||
Foreign exchange and other | (3 | ) | (2 | ) | (1 | ) | (6 | ) | |||||||
Allowance for credit loss as of October 25, 2014 | $ | 248 | $ | 84 | $ | 36 | $ | 368 | |||||||
Financing receivables as of October 25, 2014 (1) | $ | 3,509 | $ | 1,744 | $ | 3,071 | $ | 8,324 |
October 24, 2015 | July 25, 2015 | ||||||
Operating lease assets | $ | 372 | $ | 372 | |||
Accumulated depreciation | (207 | ) | (205 | ) | |||
Operating lease assets, net | $ | 165 | $ | 167 |
|
October 24, 2015 | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||
Fixed income securities: | |||||||||||||||
U.S. government securities | $ | 27,409 | $ | 63 | $ | (1 | ) | $ | 27,471 | ||||||
U.S. government agency securities | 3,606 | 11 | — | 3,617 | |||||||||||
Non-U.S. government and agency securities | 1,133 | 3 | — | 1,136 | |||||||||||
Corporate debt securities | 18,314 | 70 | (78 | ) | 18,306 | ||||||||||
U.S. agency mortgage-backed securities | 1,454 | 15 | — | 1,469 | |||||||||||
Total fixed income securities | 51,916 | 162 | (79 | ) | 51,999 | ||||||||||
Publicly traded equity securities | 1,094 | 268 | (12 | ) | 1,350 | ||||||||||
Total | $ | 53,010 | $ | 430 | $ | (91 | ) | $ | 53,349 |
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 |
Three Months Ended | |||||||
October 24, 2015 | October 25, 2014 | ||||||
Gross realized gains | $ | 35 | $ | 21 | |||
Gross realized losses | (36 | ) | (14 | ) | |||
Total | $ | (1 | ) | $ | 7 |
Three Months Ended | |||||||
October 24, 2015 | October 25, 2014 | ||||||
Net losses on investments in publicly traded equity securities | $ | (9 | ) | $ | (4 | ) | |
Net gains on investments in fixed income securities | 8 | 11 | |||||
Total | $ | (1 | ) | $ | 7 |
UNREALIZED LOSSES LESS THAN 12 MONTHS | UNREALIZED LOSSES 12 MONTHS OR GREATER | TOTAL | |||||||||||||||||||||
October 24, 2015 | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | |||||||||||||||||
Fixed income securities: | |||||||||||||||||||||||
U.S. government securities | $ | 2,566 | $ | (1 | ) | $ | — | $ | — | $ | 2,566 | $ | (1 | ) | |||||||||
U.S. government agency securities | 80 | — | — | — | 80 | — | |||||||||||||||||
Non-U.S. government and agency securities | 57 | — | 10 | — | 67 | — | |||||||||||||||||
Corporate debt securities | 7,421 | (66 | ) | 1,048 | (12 | ) | 8,469 | (78 | ) | ||||||||||||||
U.S. agency mortgage-backed securities | 77 | — | — | — | 77 | — | |||||||||||||||||
Total fixed income securities | 10,201 | (67 | ) | 1,058 | (12 | ) | 11,259 | (79 | ) | ||||||||||||||
Publicly traded equity securities | 103 | (11 | ) | 2 | (1 | ) | 105 | (12 | ) | ||||||||||||||
Total | $ | 10,304 | $ | (78 | ) | $ | 1,060 | $ | (13 | ) | $ | 11,364 | $ | (91 | ) |
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 | ) |
Amortized Cost | Fair Value | ||||||
Less than 1 year | $ | 17,274 | $ | 17,276 | |||
Due in 1 to 2 years | 15,914 | 15,950 | |||||
Due in 2 to 5 years | 17,105 | 17,138 | |||||
Due after 5 years | 1,623 | 1,635 | |||||
Total | $ | 51,916 | $ | 51,999 |
October 24, 2015 | July 25, 2015 | ||||||
Equity method investments | $ | 619 | $ | 578 | |||
Cost method investments | 309 | 319 | |||||
Total | $ | 928 | $ | 897 |
|
OCTOBER 24, 2015 FAIR VALUE MEASUREMENTS | JULY 25, 2015 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 | $ | 4,317 | $ | — | $ | — | $ | 4,317 | $ | 5,336 | $ | — | $ | — | $ | 5,336 | |||||||||||||||
Corporate debt securities | — | 25 | — | 25 | — | 14 | — | 14 | |||||||||||||||||||||||
Available-for-sale investments: | |||||||||||||||||||||||||||||||
U.S. government securities | — | 27,471 | — | 27,471 | — | 29,939 | — | 29,939 | |||||||||||||||||||||||
U.S. government agency securities | — | 3,617 | — | 3,617 | — | 3,663 | — | 3,663 | |||||||||||||||||||||||
Non-U.S. government and agency securities | — | 1,136 | — | 1,136 | — | 1,128 | — | 1,128 | |||||||||||||||||||||||
Corporate debt securities | — | 18,306 | — | 18,306 | — | 15,783 | — | 15,783 | |||||||||||||||||||||||
U.S. agency mortgage-backed securities | — | 1,469 | — | 1,469 | — | 1,461 | — | 1,461 | |||||||||||||||||||||||
Publicly traded equity securities | 1,350 | — | — | 1,350 | 1,565 | — | — | 1,565 | |||||||||||||||||||||||
Derivative assets | — | 340 | 3 | 343 | — | 214 | 4 | 218 | |||||||||||||||||||||||
Total | $ | 5,667 | $ | 52,364 | $ | 3 | $ | 58,034 | $ | 6,901 | $ | 52,202 | $ | 4 | $ | 59,107 | |||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||
Derivative liabilities | $ | — | $ | 14 | $ | — | $ | 14 | $ | — | $ | 12 | $ | — | $ | 12 | |||||||||||||||
Total | $ | — | $ | 14 | $ | — | $ | 14 | $ | — | $ | 12 | $ | — | $ | 12 |
LOSSES FOR THE THREE MONTHS ENDED | |||||||
October 24, 2015 | October 25, 2014 | ||||||
Investments in privately held companies (impaired) | $ | (17 | ) | $ | (1 | ) |
|
October 24, 2015 | July 25, 2015 | ||||||||||||
Amount | Effective Rate | Amount | Effective Rate | ||||||||||
Current portion of long-term debt | $ | 3,025 | 3.09 | % | $ | 3,894 | 2.48 | % | |||||
Other short-term debt | 2 | 2.08 | % | 3 | 2.44 | % | |||||||
Total | $ | 3,027 | $ | 3,897 |
October 24, 2015 | July 25, 2015 | ||||||||||||
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% | ||||||
Three-month LIBOR plus 0.28% | March 3, 2017 | 1,000 | 0.68% | 1,000 | 0.63% | ||||||||
Three-month LIBOR plus 0.31% | June 15, 2018 | 900 | 0.71% | 900 | 0.65% | ||||||||
Three-month LIBOR plus 0.50% | March 1, 2019 | 500 | 0.88% | 500 | 0.84% | ||||||||
Fixed-rate notes: | |||||||||||||
5.50% | February 22, 2016 | 3,000 | 3.09% | 3,000 | 3.07% | ||||||||
1.10% | March 3, 2017 | 2,400 | 0.60% | 2,400 | 0.59% | ||||||||
3.15% | March 14, 2017 | 750 | 0.90% | 750 | 0.85% | ||||||||
1.65% | June 15, 2018 | 1,600 | 1.72% | 1,600 | 1.72% | ||||||||
4.95% | February 15, 2019 | 2,000 | 4.70% | 2,000 | 4.70% | ||||||||
2.125% | March 1, 2019 | 1,750 | 0.81% | 1,750 | 0.80% | ||||||||
4.45% | January 15, 2020 | 2,500 | 3.02% | 2,500 | 3.01% | ||||||||
2.45% | June 15, 2020 | 1,500 | 2.54% | 1,500 | 2.54% | ||||||||
2.90% | March 4, 2021 | 500 | 0.97% | 500 | 0.96% | ||||||||
3.00% | June 15, 2022 | 500 | 1.22% | 500 | 1.21% | ||||||||
3.625% | March 4, 2024 | 1,000 | 1.09% | 1,000 | 1.08% | ||||||||
3.50% | June 15, 2025 | 500 | 1.38% | 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% | ||||||||||
Total | 24,400 | 25,251 | |||||||||||
Unaccreted discount/issuance costs | (128 | ) | (131 | ) | |||||||||
Hedge accounting fair value adjustments | 347 | 231 | |||||||||||
Total | $ | 24,619 | $ | 25,351 | |||||||||
Reported as: | |||||||||||||
Current portion of long-term debt | $ | 3,025 | $ | 3,894 | |||||||||
Long-term debt | 21,594 | 21,457 | |||||||||||
Total | $ | 24,619 | $ | 25,351 |
Fiscal Year | Amount | ||
2016 (remaining nine months) | $ | 3,000 | |
2017 | 4,150 | ||
2018 | 2,500 | ||
2019 | 4,250 | ||
2020 | 4,000 | ||
Thereafter | 6,500 | ||
Total | $ | 24,400 |
|
DERIVATIVE ASSETS | DERIVATIVE LIABILITIES | ||||||||||||||||||
Balance Sheet Line Item | October 24, 2015 | July 25, 2015 | Balance Sheet Line Item | October 24, 2015 | July 25, 2015 | ||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||||
Foreign currency derivatives | Other current assets | $ | 9 | $ | 10 | Other current liabilities | $ | 11 | $ | 11 | |||||||||
Interest rate derivatives | Other assets | 330 | 202 | Other long-term liabilities | — | — | |||||||||||||
Total | 339 | 212 | 11 | 11 | |||||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||||
Foreign currency derivatives | Other current assets | 1 | 2 | Other current liabilities | 3 | 1 | |||||||||||||
Equity derivatives | Other assets | 3 | 4 | Other long-term liabilities | — | — | |||||||||||||
Total | 4 | 6 | 3 | 1 | |||||||||||||||
Total | $ | 343 | $ | 218 | $ | 14 | $ | 12 |
GAINS (LOSSES) RECOGNIZED IN OCI ON DERIVATIVES FOR THE THREE MONTHS ENDED (EFFECTIVE PORTION) | GAINS (LOSSES) RECLASSIFIED FROM AOCI INTO INCOME FOR THE THREE MONTHS ENDED (EFFECTIVE PORTION) | |||||||||||||||||
October 24, 2015 | October 25, 2014 | Line Item in Statements of Operations | October 24, 2015 | October 25, 2014 | ||||||||||||||
Derivatives designated as cash flow hedging instruments: | ||||||||||||||||||
Foreign currency derivatives | $ | (4 | ) | $ | (56 | ) | Operating expenses | $ | (2 | ) | $ | (3 | ) | |||||
Cost of sales—service | (1 | ) | (1 | ) | ||||||||||||||
Total | $ | (4 | ) | $ | (56 | ) | $ | (3 | ) | $ | (4 | ) | ||||||
Derivatives designated as net investment hedging instruments: | ||||||||||||||||||
Foreign currency derivatives | $ | — | $ | 20 | Other income (loss), net | $ | — | $ | — |
GAINS (LOSSES) ON DERIVATIVE INSTRUMENTS FOR THE THREE MONTHS ENDED | GAINS (LOSSES) RELATED TO HEDGED ITEMS FOR THE THREE MONTHS ENDED | |||||||||||||||||
Derivatives Designated as Fair Value Hedging Instruments | Line Item in Statements of Operations | October 24, 2015 | October 25, 2014 | October 24, 2015 | October 25, 2014 | |||||||||||||
Equity derivatives | Other income (loss), net | $ | — | $ | 6 | $ | — | $ | (6 | ) | ||||||||
Interest rate derivatives | Interest expense | 127 | 73 | (125 | ) | (73 | ) | |||||||||||
Total | $ | 127 | $ | 79 | $ | (125 | ) | $ | (79 | ) |
GAINS (LOSSES) FOR THE THREE MONTHS ENDED | ||||||||||
Derivatives Not Designated as Hedging Instruments | Line Item in Statements of Operations | October 24, 2015 | October 25, 2014 | |||||||
Foreign currency derivatives | Other income (loss), net | $ | 4 | $ | (58 | ) | ||||
Total return swaps—deferred compensation | Operating expenses | (16 | ) | (13 | ) | |||||
Equity derivatives | Other income (loss), net | 10 | (4 | ) | ||||||
Total | $ | (2 | ) | $ | (75 | ) |
October 24, 2015 | July 25, 2015 | ||||||
Derivatives designated as hedging instruments: | |||||||
Foreign currency derivatives—cash flow hedges | $ | 1,083 | $ | 1,201 | |||
Interest rate derivatives | 11,400 | 11,400 | |||||
Net investment hedging instruments | 219 | 192 | |||||
Derivatives not designated as hedging instruments: | |||||||
Foreign currency derivatives | 2,244 | 2,023 | |||||
Total return swaps—deferred compensation | 473 | 462 | |||||
Total | $ | 15,419 | $ | 15,278 |
October 24, 2015 | |||||||||||||||||||||||
Gross Amounts Offset in the Consolidated Balance Sheets | Gross Amounts Not Offset in the Consolidated Balance Sheets, but with Legal Rights to Offset | ||||||||||||||||||||||
Gross Amounts Recognized | Gross Amounts Offset | Net Amounts Presented | Gross Derivative Amounts | Cash Collateral | Net Amount | ||||||||||||||||||
Derivatives assets | $ | 343 | $ | — | $ | 343 | $ | (14 | ) | $ | (225 | ) | $ | 104 | |||||||||
Derivatives liabilities | $ | 14 | $ | — | $ | 14 | $ | (14 | ) | $ | — | $ | — |
July 25, 2015 | |||||||||||||||||||||||
Gross Amounts Offset in the Consolidated Balance Sheets | Gross Amounts Not Offset in the Consolidated Balance Sheets, but with Legal Rights to Offset | ||||||||||||||||||||||
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 | ) | $ | — | $ | — |
|
Fiscal Year | Amount | ||
2016 (remaining nine months) | $ | 266 | |
2017 | 263 | ||
2018 | 189 | ||
2019 | 105 | ||
2020 | 83 | ||
Thereafter | 189 | ||
Total | $ | 1,095 |
Three Months Ended | |||||||
October 24, 2015 | October 25, 2014 | ||||||
Compensation expense related to acquisitions | $ | 73 | $ | 98 |
Three Months Ended | |||||||
October 24, 2015 | October 25, 2014 | ||||||
Balance at beginning of period | $ | 449 | $ | 446 | |||
Provision for warranties issued | 150 | 143 | |||||
Payments | (166 | ) | (153 | ) | |||
Balance at end of period | $ | 433 | $ | 436 |
October 24, 2015 | July 25, 2015 | ||||||
Maximum potential future payments relating to financing guarantees: | |||||||
Channel partner | $ | 250 | $ | 288 | |||
End user | 124 | 129 | |||||
Total | $ | 374 | $ | 417 | |||
Deferred revenue associated with financing guarantees: | |||||||
Channel partner | $ | (96 | ) | $ | (127 | ) | |
End user | (100 | ) | (107 | ) | |||
Total | $ | (196 | ) | $ | (234 | ) | |
Maximum potential future payments relating to financing guarantees, net of associated deferred revenue | $ | 178 | $ | 183 |
|
Three Months Ended | |||||||
October 24, 2015 | October 25, 2014 | ||||||
Cost of sales—product | $ | 13 | $ | 11 | |||
Cost of sales—service | 38 | 37 | |||||
Share-based compensation expense in cost of sales | 51 | 48 | |||||
Research and development | 114 | 119 | |||||
Sales and marketing | 139 | 147 | |||||
General and administrative | 57 | 59 | |||||
Restructuring and other charges | 15 | (4 | ) | ||||
Share-based compensation expense in operating expenses | 325 | 321 | |||||
Total share-based compensation expense | $ | 376 | $ | 369 | |||
Income tax benefit for share-based compensation | $ | 95 | $ | 94 |
Share-Based Awards Available for Grant | ||
BALANCE AT JULY 26, 2014 | 310 | |
Restricted stock, stock units, and other share-based awards granted | (101 | ) |
Share-based awards canceled/forfeited/expired | 40 | |
Shares withheld for taxes and not issued | 27 | |
BALANCE AT JULY 25, 2015 | 276 | |
Restricted stock, stock units, and other share-based awards granted | (23 | ) |
Share-based awards canceled/forfeited/expired | 8 | |
Shares withheld for taxes and not issued | 22 | |
Other | 1 | |
BALANCE AT OCTOBER 24, 2015 | 284 |
Restricted Stock/ Stock Units | Weighted-Average Grant Date Fair Value per Share | Aggregate Fair Value | ||||||||
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 | ||||||||
Granted and assumed | 15 | 24.07 | ||||||||
Vested | (37 | ) | 20.24 | $ | 970 | |||||
Canceled/forfeited | (5 | ) | 22.10 | |||||||
UNVESTED BALANCE AT OCTOBER 24, 2015 | 116 | $ | 22.93 |
STOCK OPTIONS OUTSTANDING | ||||||
Number Outstanding | Weighted-Average Exercise Price per Share | |||||
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 | ||||
Assumed from acquisitions | 3 | 2.13 | ||||
Exercised | (17 | ) | 22.10 | |||
Canceled/forfeited/expired | (5 | ) | 30.15 | |||
BALANCE AT OCTOBER 24, 2015 | 84 | $ | 29.09 |
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 | 5 | 6.1 | $ | 3.88 | $ | 150 | 2 | $ | 5.14 | $ | 76 | |||||||||||||
$ 20.01 – 25.00 | 3 | 0.9 | 23.12 | 16 | 3 | 23.12 | 16 | |||||||||||||||||
$ 25.01 – 30.00 | 13 | 0.8 | 26.84 | 32 | 13 | 26.85 | 32 | |||||||||||||||||
$ 30.01 – 35.00 | 63 | 0.9 | 32.16 | — | 63 | 32.16 | — | |||||||||||||||||
Total | 84 | 1.2 | $ | 29.09 | $ | 198 | 81 | $ | 29.99 | $ | 124 |
RESTRICTED STOCK UNITS | PERFORMANCE RESTRICTED STOCK UNITS | ||||||||||||||
Three Months Ended | October 24, 2015 | October 25, 2014 | October 24, 2015 | October 25, 2014 | |||||||||||
Number of shares granted (in millions) | 9 | 9 | 4 | 6 | |||||||||||
Grant date fair value per share | $ | 24.02 | $ | 23.10 | $ | 24.61 | $ | 23.31 | |||||||
Weighted-average assumptions/inputs: | |||||||||||||||
Expected dividend yield | 3.2 | % | 3.0 | % | 3.2 | % | 3.0 | % | |||||||
Range of risk-free interest rates | 0.0% – 1.1% | 0.0% – 1.8% | 0.0% – 1.1% | 0.0% – 1.8% | |||||||||||
Range of expected volatilities for index | N/A | N/A | 15.3% – 54.3% | 15.1% – 70.0% |
|
Net Unrealized Gains on Available-for-Sale Investments | Net Unrealized Losses Cash Flow Hedging Instruments | Cumulative Translation Adjustment and Actuarial Gains and Losses | Accumulated Other Comprehensive Income (Loss) | ||||||||||||
BALANCE AT JULY 25, 2015 | $ | 310 | $ | (16 | ) | $ | (233 | ) | $ | 61 | |||||
Other comprehensive income (loss) before reclassifications attributable to Cisco Systems, Inc. | (155 | ) | (4 | ) | (178 | ) | (337 | ) | |||||||
(Gains) losses reclassified out of AOCI | 1 | 3 | 1 | 5 | |||||||||||
Tax benefit (expense) | 56 | 2 | (39 | ) | 19 | ||||||||||
BALANCE AT OCTOBER 24, 2015 | $ | 212 | $ | (15 | ) | $ | (449 | ) | $ | (252 | ) |
Net Unrealized Gains on Available-for-Sale Investments | Net Unrealized Losses Cash Flow Hedging Instruments | Cumulative Translation Adjustment and Actuarial Gains and Losses | Accumulated Other Comprehensive Income (Loss) | ||||||||||||
BALANCE AT JULY 26, 2014 | $ | 424 | $ | (12 | ) | $ | 265 | $ | 677 | ||||||
Other comprehensive income (loss) before reclassifications attributable to Cisco Systems, Inc. | (36 | ) | (56 | ) | (161 | ) | (253 | ) | |||||||
(Gains) losses reclassified out of AOCI | (7 | ) | 4 | — | (3 | ) | |||||||||
Tax benefit (expense) | 16 | 3 | 11 | 30 | |||||||||||
BALANCE AT OCTOBER 25, 2014 | $ | 397 | $ | (61 | ) | $ | 115 | $ | 451 |
Three Months Ended | ||||||||||
October 24, 2015 | October 25, 2014 | |||||||||
Comprehensive Income Components | Income Before Taxes | Line Item in Statements of Operations | ||||||||
Net unrealized gains on available-for-sale investments | ||||||||||
$ | (1 | ) | $ | 7 | Other income (loss), net | |||||
Net unrealized losses on cash flow hedging instruments | ||||||||||
Foreign currency derivatives | (2 | ) | (3 | ) | Operating expenses | |||||
Foreign currency derivatives | (1 | ) | (1 | ) | Cost of sales—service | |||||
(3 | ) | (4 | ) | |||||||
Cumulative translation adjustment and actuarial gains and losses | ||||||||||
(1 | ) | — | Operating expenses | |||||||
Total amounts reclassified out of AOCI | $ | (5 | ) | $ | 3 |
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Three Months Ended | ||||||||
October 24, 2015 | October 25, 2014 | |||||||
Income before provision for income taxes | $ | 3,137 | $ | 2,360 | ||||
Provision for income taxes | $ | 707 | $ | 532 | ||||
Effective tax rate | 22.5 | % | 22.5 | % |
|
Three Months Ended | |||||||
October 24, 2015 | October 25, 2014 | ||||||
Revenue: | |||||||
Americas | $ | 7,799 | $ | 7,501 | |||
EMEA | 3,087 | 3,002 | |||||
APJC | 1,796 | 1,742 | |||||
Total | $ | 12,682 | $ | 12,245 | |||
Gross margin: | |||||||
Americas | $ | 4,950 | $ | 4,810 | |||
EMEA | 1,982 | 1,915 | |||||
APJC | 1,078 | 1,025 | |||||
Segment total | 8,010 | 7,750 | |||||
Unallocated corporate items | (178 | ) | (417 | ) | |||
Total | $ | 7,832 | $ | 7,333 |
Three Months Ended | |||||||
October 24, 2015 | October 25, 2014 | ||||||
Revenue: | |||||||
Switching | $ | 4,022 | $ | 3,846 | |||
NGN Routing | 1,793 | 1,949 | |||||
Collaboration | 1,115 | 950 | |||||
Data Center | 859 | 692 | |||||
Service Provider Video | 850 | 871 | |||||
Wireless | 645 | 605 | |||||
Security | 485 | 455 | |||||
Other | 75 | 67 | |||||
Product | 9,844 | 9,435 | |||||
Service | 2,838 | 2,810 | |||||
Total | $ | 12,682 | $ | 12,245 |
October 24, 2015 | July 25, 2015 | ||||||
Property and equipment, net: | |||||||
United States | $ | 2,727 | $ | 2,733 | |||
International | 619 | 599 | |||||
Total | $ | 3,346 | $ | 3,332 |
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