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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 | 4,623 | $ | 24,180 | $ | 73,418 | $ | 97,598 |
|
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|
Purchase Consideration | Purchased Intangible Assets | Goodwill | |||||||||
CloudLock | $ | 249 | $ | 36 | $ | 213 | |||||
Others (two in total) | 9 | 5 | 4 | ||||||||
Total | $ | 258 | $ | 41 | $ | 217 |
|
(a) | Goodwill |
Balance at | Balance at | ||||||||||||||
July 30, 2016 | Acquisitions | Other | October 29, 2016 | ||||||||||||
Americas | $ | 16,529 | $ | 132 | $ | (13 | ) | $ | 16,648 | ||||||
EMEA | 6,269 | 62 | (4 | ) | 6,327 | ||||||||||
APJC | 3,827 | 23 | (2 | ) | 3,848 | ||||||||||
Total | $ | 26,625 | $ | 217 | $ | (19 | ) | $ | 26,823 |
(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 | ||||||||||||||||||
CloudLock | 6.0 | $ | 32 | 4.0 | $ | 3 | 1.5 | $ | 1 | $ | — | $ | 36 | ||||||||||||
Others (two in total) | 3.0 | 5 | 0.0 | — | 0.0 | — | — | 5 | |||||||||||||||||
Total | $ | 37 | $ | 3 | $ | 1 | $ | — | $ | 41 |
October 29, 2016 | Gross | Accumulated Amortization | Net | |||||||||
Purchased intangible assets with finite lives: | ||||||||||||
Technology | $ | 2,861 | $ | (1,334 | ) | $ | 1,527 | |||||
Customer relationships | 1,737 | (1,220 | ) | 517 | ||||||||
Other | 58 | (21 | ) | 37 | ||||||||
Total purchased intangible assets with finite lives | 4,656 | (2,575 | ) | 2,081 | ||||||||
In-process research and development, with indefinite lives | 216 | — | 216 | |||||||||
Total | $ | 4,872 | $ | (2,575 | ) | $ | 2,297 |
July 30, 2016 | Gross | Accumulated Amortization | Net | |||||||||
Purchased intangible assets with finite lives: | ||||||||||||
Technology | $ | 3,038 | $ | (1,391 | ) | $ | 1,647 | |||||
Customer relationships | 1,793 | (1,203 | ) | 590 | ||||||||
Other | 85 | (43 | ) | 42 | ||||||||
Total purchased intangible assets with finite lives | 4,916 | (2,637 | ) | 2,279 | ||||||||
In-process research and development, with indefinite lives | 222 | — | 222 | |||||||||
Total | $ | 5,138 | $ | (2,637 | ) | $ | 2,501 |
Three Months Ended | |||||||
October 29, 2016 | October 24, 2015 | ||||||
Amortization of purchased intangible assets: | |||||||
Cost of sales | $ | 129 | $ | 146 | |||
Operating expenses | |||||||
Amortization of purchased intangible assets | 78 | 69 | |||||
Restructuring and other charges | 38 | — | |||||
Total | $ | 245 | $ | 215 |
Fiscal Year | Amount | ||
2017 (remaining nine months) | $ | 524 | |
2018 | 579 | ||
2019 | 493 | ||
2020 | 281 | ||
2021 | 137 | ||
Thereafter | 67 | ||
Total | $ | 2,081 |
|
FISCAL 2015 AND PRIOR PLANS | FISCAL 2017 PLAN | |||||||||||||||||||
Employee Severance | Other | Employee Severance | Other | Total | ||||||||||||||||
Liability as of July 30, 2016 | $ | 21 | $ | 24 | $ | — | $ | — | $ | 45 | ||||||||||
Charges | — | — | 369 | 42 | 411 | |||||||||||||||
Cash payments | (12 | ) | — | (257 | ) | (1 | ) | (270 | ) | |||||||||||
Non-cash items | (4 | ) | (2 | ) | — | (41 | ) | (47 | ) | |||||||||||
Liability as of October 29, 2016 | $ | 5 | $ | 22 | $ | 112 | $ | — | $ | 139 |
FISCAL 2015 AND PRIOR PLANS | ||||||||||||
Employee Severance | Other | Total | ||||||||||
Liability as of July 25, 2015 | $ | 60 | $ | 29 | $ | 89 | ||||||
Charges | 125 | 17 | 142 | |||||||||
Cash payments | (123 | ) | (6 | ) | (129 | ) | ||||||
Non-cash items | — | (16 | ) | (16 | ) | |||||||
Liability as of October 24, 2015 | $ | 62 | $ | 24 | $ | 86 |
|
October 29, 2016 | July 30, 2016 | |||||||
Inventories: | ||||||||
Raw materials | $ | 111 | $ | 91 | ||||
Finished goods: | ||||||||
Distributor inventory and deferred cost of sales | 481 | 457 | ||||||
Manufactured finished goods | 328 | 415 | ||||||
Total finished goods | 809 | 872 | ||||||
Service-related spares | 237 | 236 | ||||||
Demonstration systems | 19 | 18 | ||||||
Total | $ | 1,176 | $ | 1,217 |
Property and equipment, net: | ||||||||
Gross property and equipment: | ||||||||
Land, buildings, and building and leasehold improvements | $ | 4,819 | $ | 4,778 | ||||
Computer equipment and related software | 1,292 | 1,288 | ||||||
Production, engineering, and other equipment | 5,708 | 5,658 | ||||||
Operating lease assets | 301 | 296 | ||||||
Furniture and fixtures | 548 | 543 | ||||||
Total gross property and equipment | 12,668 | 12,563 | ||||||
Less: accumulated depreciation and amortization | (9,169 | ) | (9,057 | ) | ||||
Total | $ | 3,499 | $ | 3,506 |
Deferred revenue: | ||||||||
Service | $ | 10,424 | $ | 10,621 | ||||
Product: | ||||||||
Deferred revenue related to recurring software and subscription businesses | 3,801 | 3,308 | ||||||
Deferred revenue related to two-tier distributors | 439 | 377 | ||||||
Other product deferred revenue | 2,287 | 2,166 | ||||||
Total product deferred revenue | 6,527 | 5,851 | ||||||
Total | $ | 16,951 | $ | 16,472 | ||||
Reported as: | ||||||||
Current | $ | 10,215 | $ | 10,155 | ||||
Noncurrent | 6,736 | 6,317 | ||||||
Total | $ | 16,951 | $ | 16,472 |
|
(a) | Financing Receivables |
October 29, 2016 | Lease Receivables | Loan Receivables | Financed Service Contracts and Other | Total | |||||||||||
Gross | $ | 3,202 | $ | 2,236 | $ | 4,239 | $ | 9,677 | |||||||
Residual value | 197 | — | — | 197 | |||||||||||
Unearned income | (163 | ) | — | — | (163 | ) | |||||||||
Allowance for credit loss | (227 | ) | (111 | ) | (48 | ) | (386 | ) | |||||||
Total, net | $ | 3,009 | $ | 2,125 | $ | 4,191 | $ | 9,325 | |||||||
Reported as: | |||||||||||||||
Current | $ | 1,504 | $ | 1,021 | $ | 2,016 | $ | 4,541 | |||||||
Noncurrent | 1,505 | 1,104 | 2,175 | 4,784 | |||||||||||
Total, net | $ | 3,009 | $ | 2,125 | $ | 4,191 | $ | 9,325 |
July 30, 2016 | Lease Receivables | Loan Receivables | Financed Service Contracts and Other | Total | |||||||||||
Gross | $ | 3,272 | $ | 2,135 | $ | 3,370 | $ | 8,777 | |||||||
Residual value | 202 | — | — | 202 | |||||||||||
Unearned income | (174 | ) | — | — | (174 | ) | |||||||||
Allowance for credit loss | (230 | ) | (97 | ) | (48 | ) | (375 | ) | |||||||
Total, net | $ | 3,070 | $ | 2,038 | $ | 3,322 | $ | 8,430 | |||||||
Reported as: | |||||||||||||||
Current | $ | 1,490 | $ | 988 | $ | 1,794 | $ | 4,272 | |||||||
Noncurrent | 1,580 | 1,050 | 1,528 | 4,158 | |||||||||||
Total, net | $ | 3,070 | $ | 2,038 | $ | 3,322 | $ | 8,430 |
Fiscal Year | Amount | ||
2017 (remaining nine months) | $ | 1,222 | |
2018 | 1,066 | ||
2019 | 587 | ||
2020 | 260 | ||
2021 | 65 | ||
Thereafter | 2 | ||
Total | $ | 3,202 |
(b) | Credit Quality of Financing Receivables |
INTERNAL CREDIT RISK RATING | |||||||||||||||
October 29, 2016 | 1 to 4 | 5 to 6 | 7 and Higher | Total | |||||||||||
Lease receivables | $ | 1,652 | $ | 1,293 | $ | 94 | $ | 3,039 | |||||||
Loan receivables | 1,081 | 976 | 179 | 2,236 | |||||||||||
Financed service contracts and other | 2,898 | 1,313 | 28 | 4,239 | |||||||||||
Total | $ | 5,631 | $ | 3,582 | $ | 301 | $ | 9,514 |
INTERNAL CREDIT RISK RATING | |||||||||||||||
July 30, 2016 | 1 to 4 | 5 to 6 | 7 and Higher | Total | |||||||||||
Lease receivables | $ | 1,703 | $ | 1,294 | $ | 101 | $ | 3,098 | |||||||
Loan receivables | 986 | 967 | 182 | 2,135 | |||||||||||
Financed service contracts and other | 2,077 | 1,271 | 22 | 3,370 | |||||||||||
Total | $ | 4,766 | $ | 3,532 | $ | 305 | $ | 8,603 |
DAYS PAST DUE (INCLUDES BILLED AND UNBILLED) | |||||||||||||||||||||||||||||||
October 29, 2016 | 31-60 | 61-90 | 91+ | Total Past Due | Current | Total | Nonaccrual Financing Receivables | Impaired Financing Receivables | |||||||||||||||||||||||
Lease receivables | $ | 86 | $ | 70 | $ | 249 | $ | 405 | $ | 2,634 | $ | 3,039 | $ | 55 | $ | 55 | |||||||||||||||
Loan receivables | 25 | 23 | 95 | 143 | 2,093 | 2,236 | 42 | 42 | |||||||||||||||||||||||
Financed service contracts and other | 317 | 338 | 367 | 1,022 | 3,217 | 4,239 | 29 | 9 | |||||||||||||||||||||||
Total | $ | 428 | $ | 431 | $ | 711 | $ | 1,570 | $ | 7,944 | $ | 9,514 | $ | 126 | $ | 106 |
DAYS PAST DUE (INCLUDES BILLED AND UNBILLED) | |||||||||||||||||||||||||||||||
July 30, 2016 | 31-60 | 61-90 | 91+ | Total Past Due | Current | Total | Nonaccrual Financing Receivables | Impaired Financing Receivables | |||||||||||||||||||||||
Lease receivables | $ | 111 | $ | 25 | $ | 251 | $ | 387 | $ | 2,711 | $ | 3,098 | $ | 60 | $ | 60 | |||||||||||||||
Loan receivables | 30 | 9 | 37 | 76 | 2,059 | 2,135 | 42 | 42 | |||||||||||||||||||||||
Financed service contracts and other | 213 | 152 | 565 | 930 | 2,440 | 3,370 | 30 | 10 | |||||||||||||||||||||||
Total | $ | 354 | $ | 186 | $ | 853 | $ | 1,393 | $ | 7,210 | $ | 8,603 | $ | 132 | $ | 112 |
(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 30, 2016 | $ | 230 | $ | 97 | $ | 48 | $ | 375 | |||||||
Provisions | (4 | ) | 12 | — | 8 | ||||||||||
Foreign exchange and other | 1 | 2 | — | 3 | |||||||||||
Allowance for credit loss as of October 29, 2016 | $ | 227 | $ | 111 | $ | 48 | $ | 386 |
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 |
(d) | Operating Leases |
October 29, 2016 | July 30, 2016 | ||||||
Operating lease assets | $ | 301 | $ | 296 | |||
Accumulated depreciation | (168 | ) | (161 | ) | |||
Operating lease assets, net | $ | 133 | $ | 135 |
Fiscal Year | Amount | ||
2017 (remaining nine months) | $ | 179 | |
2018 | 142 | ||
2019 | 53 | ||
2020 | 8 | ||
2021 | 4 | ||
Thereafter | 1 | ||
Total | $ | 387 |
|
(a) | Summary of Available-for-Sale Investments |
October 29, 2016 | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||
Fixed income securities: | |||||||||||||||
U.S. government securities | $ | 25,905 | $ | 24 | $ | (33 | ) | $ | 25,896 | ||||||
U.S. government agency securities | 2,619 | 4 | (1 | ) | 2,622 | ||||||||||
Non-U.S. government and agency securities | 1,104 | 1 | (1 | ) | 1,104 | ||||||||||
Corporate debt securities | 29,046 | 177 | (60 | ) | 29,163 | ||||||||||
U.S. agency mortgage-backed securities | 2,069 | 16 | (2 | ) | 2,083 | ||||||||||
Total fixed income securities | 60,743 | 222 | (97 | ) | 60,868 | ||||||||||
Publicly traded equity securities | 1,225 | 346 | (54 | ) | 1,517 | ||||||||||
Total (1) | $ | 61,968 | $ | 568 | $ | (151 | ) | $ | 62,385 |
July 30, 2016 | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||
Fixed income securities: | |||||||||||||||
U.S. government securities | $ | 26,473 | $ | 73 | $ | (2 | ) | $ | 26,544 | ||||||
U.S. government agency securities | 2,809 | 8 | — | 2,817 | |||||||||||
Non-U.S. government and agency securities | 1,096 | 4 | — | 1,100 | |||||||||||
Corporate debt securities | 24,044 | 263 | (15 | ) | 24,292 | ||||||||||
U.S. agency mortgage-backed securities | 1,846 | 22 | — | 1,868 | |||||||||||
Total fixed income securities | 56,268 | 370 | (17 | ) | 56,621 | ||||||||||
Publicly traded equity securities | 1,211 | 333 | (40 | ) | 1,504 | ||||||||||
Total (1) | $ | 57,479 | $ | 703 | $ | (57 | ) | $ | 58,125 |
(b) | Gains and Losses on Available-for-Sale Investments |
Three Months Ended | |||||||
October 29, 2016 | October 24, 2015 | ||||||
Gross realized gains | $ | 30 | $ | 35 | |||
Gross realized losses | (15 | ) | (36 | ) | |||
Total | $ | 15 | $ | (1 | ) |
Three Months Ended | |||||||
October 29, 2016 | October 24, 2015 | ||||||
Net gains/(losses) on investments in publicly traded equity securities | $ | 5 | $ | (9 | ) | ||
Net gains/(losses) on investments in fixed income securities | 10 | 8 | |||||
Total | $ | 15 | $ | (1 | ) |
UNREALIZED LOSSES LESS THAN 12 MONTHS | UNREALIZED LOSSES 12 MONTHS OR GREATER | TOTAL | |||||||||||||||||||||
October 29, 2016 | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | |||||||||||||||||
Fixed income securities: | |||||||||||||||||||||||
U.S. government securities | $ | 11,766 | $ | (33 | ) | $ | 100 | $ | — | $ | 11,866 | $ | (33 | ) | |||||||||
U.S. government agency securities | 596 | (1 | ) | — | — | 596 | (1 | ) | |||||||||||||||
Non-U.S. government and agency securities | 498 | (1 | ) | — | — | 498 | (1 | ) | |||||||||||||||
Corporate debt securities | 9,013 | (57 | ) | 572 | (3 | ) | 9,585 | (60 | ) | ||||||||||||||
U.S. agency mortgage-backed securities | 594 | (2 | ) | — | — | 594 | (2 | ) | |||||||||||||||
Total fixed income securities | 22,467 | (94 | ) | 672 | (3 | ) | 23,139 | (97 | ) | ||||||||||||||
Publicly traded equity securities | 291 | (53 | ) | 3 | (1 | ) | 294 | (54 | ) | ||||||||||||||
Total | $ | 22,758 | $ | (147 | ) | $ | 675 | $ | (4 | ) | $ | 23,433 | $ | (151 | ) |
UNREALIZED LOSSES LESS THAN 12 MONTHS | UNREALIZED LOSSES 12 MONTHS OR GREATER | TOTAL | |||||||||||||||||||||
July 30, 2016 | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | |||||||||||||||||
Fixed income securities: | |||||||||||||||||||||||
U.S. government securities | $ | 2,414 | $ | (2 | ) | $ | — | $ | — | $ | 2,414 | $ | (2 | ) | |||||||||
U.S. government agency securities | 144 | — | — | — | 144 | — | |||||||||||||||||
Non-U.S. government and agency securities | 61 | — | — | — | 61 | — | |||||||||||||||||
Corporate debt securities | 2,499 | (7 | ) | 1,208 | (8 | ) | 3,707 | (15 | ) | ||||||||||||||
U.S. agency mortgage-backed securities | 174 | — | — | — | 174 | — | |||||||||||||||||
Total fixed income securities | 5,292 | (9 | ) | 1,208 | (8 | ) | 6,500 | (17 | ) | ||||||||||||||
Publicly traded equity securities | 188 | (40 | ) | — | — | 188 | (40 | ) | |||||||||||||||
Total | $ | 5,480 | $ | (49 | ) | $ | 1,208 | $ | (8 | ) | $ | 6,688 | $ | (57 | ) |
(c) | Maturities of Fixed Income Securities |
Amortized Cost | Fair Value | ||||||
Less than 1 year | $ | 12,967 | $ | 12,977 | |||
Due in 1 to 2 years | 17,042 | 17,071 | |||||
Due in 2 to 5 years | 25,125 | 25,230 | |||||
Due after 5 years | 3,540 | 3,507 | |||||
Mortgage-backed securities with no single maturity | 2,069 | 2,083 | |||||
Total | $ | 60,743 | $ | 60,868 |
(d) | Securities Lending |
(e) | Investments in Privately Held Companies |
October 29, 2016 | July 30, 2016 | ||||||
Equity method investments | $ | 162 | $ | 174 | |||
Cost method investments | 829 | 829 | |||||
Total | $ | 991 | $ | 1,003 |
|
(a) | Fair Value Hierarchy |
(b) | Assets and Liabilities Measured at Fair Value on a Recurring Basis |
OCTOBER 29, 2016 FAIR VALUE MEASUREMENTS | JULY 30, 2016 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 | $ | 6,749 | $ | — | $ | — | $ | 6,749 | $ | 6,049 | $ | — | $ | — | $ | 6,049 | |||||||||||||||
Corporate debt securities | — | — | — | — | — | 43 | — | 43 | |||||||||||||||||||||||
Available-for-sale investments: | |||||||||||||||||||||||||||||||
U.S. government securities | — | 25,896 | — | 25,896 | — | 26,544 | — | 26,544 | |||||||||||||||||||||||
U.S. government agency securities | — | 2,622 | — | 2,622 | — | 2,817 | — | 2,817 | |||||||||||||||||||||||
Non-U.S. government and agency securities | — | 1,104 | — | 1,104 | — | 1,100 | — | 1,100 | |||||||||||||||||||||||
Corporate debt securities | — | 29,163 | — | 29,163 | — | 24,292 | — | 24,292 | |||||||||||||||||||||||
U.S. agency mortgage-backed securities | — | 2,083 | — | 2,083 | — | 1,868 | — | 1,868 | |||||||||||||||||||||||
Publicly traded equity securities | 1,517 | — | — | 1,517 | 1,504 | — | — | 1,504 | |||||||||||||||||||||||
Derivative assets | — | 292 | — | 292 | — | 384 | 1 | 385 | |||||||||||||||||||||||
Total | $ | 8,266 | $ | 61,160 | $ | — | $ | 69,426 | $ | 7,553 | $ | 57,048 | $ | 1 | $ | 64,602 | |||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||
Derivative liabilities | $ | — | $ | 85 | $ | — | $ | 85 | $ | — | $ | 54 | $ | — | $ | 54 | |||||||||||||||
Total | $ | — | $ | 85 | $ | — | $ | 85 | $ | — | $ | 54 | $ | — | $ | 54 |
(c) | Assets Measured at Fair Value on a Nonrecurring Basis |
TOTAL GAINS (LOSSES) FOR THE THREE MONTHS ENDED | |||||||
October 29, 2016 | October 24, 2015 | ||||||
Investments in privately held companies (impaired) | $ | (47 | ) | $ | (17 | ) | |
Purchased intangible assets (impaired) | (42 | ) | — | ||||
Total gains (losses) for nonrecurring measurements | $ | (89 | ) | $ | (17 | ) |
|
(a) | Short-Term Debt |
October 29, 2016 | July 30, 2016 | ||||||||||||
Amount | Effective Rate | Amount | Effective Rate | ||||||||||
Current portion of long-term debt | $ | 4,155 | 1.08 | % | $ | 4,159 | 0.97 | % | |||||
Other notes and borrowings | — | — | 1 | 2.08 | % | ||||||||
Total short-term debt | $ | 4,155 | $ | 4,160 |
(b) | Long-Term Debt |
October 29, 2016 | July 30, 2016 | ||||||||||||
Maturity Date | Amount | Effective Rate | Amount | Effective Rate | |||||||||
Senior notes: | |||||||||||||
Floating-rate notes: | |||||||||||||
Three-month LIBOR plus 0.28% | March 3, 2017 | $ | 1,000 | 1.18% | $ | 1,000 | 1.03% | ||||||
Three-month LIBOR plus 0.60% | February 21, 2018 | 1,000 | 1.48% | 1,000 | 1.32% | ||||||||
Three-month LIBOR plus 0.31% | June 15, 2018 | 900 | 1.23% | 900 | 1.03% | ||||||||
Three-month LIBOR plus 0.50% | March 1, 2019 | 500 | 1.40% | 500 | 1.23% | ||||||||
Three-month LIBOR plus 0.34% | September 20, 2019 | (1) | 500 | 1.24% | — | — | |||||||
Fixed-rate notes: | |||||||||||||
1.10% | March 3, 2017 | 2,400 | 0.93% | 2,400 | 0.87% | ||||||||
3.15% | March 14, 2017 | 750 | 1.42% | 750 | 1.22% | ||||||||
1.40% | February 28, 2018 | 1,250 | 1.47% | 1,250 | 1.47% | ||||||||
1.65% | June 15, 2018 | 1,600 | 1.72% | 1,600 | 1.72% | ||||||||
4.95% | February 15, 2019 | 2,000 | 4.78% | 2,000 | 4.76% | ||||||||
1.60% | February 28, 2019 | 1,000 | 1.67% | 1,000 | 1.67% | ||||||||
2.125% | March 1, 2019 | 1,750 | 1.14% | 1,750 | 1.08% | ||||||||
1.40% | September 20, 2019 | (1) | 1,500 | 1.48% | — | — | |||||||
4.45% | January 15, 2020 | 2,500 | 3.29% | 2,500 | 3.25% | ||||||||
2.45% | June 15, 2020 | 1,500 | 2.54% | 1,500 | 2.54% | ||||||||
2.20% | February 28, 2021 | 2,500 | 2.30% | 2,500 | 2.30% | ||||||||
2.90% | March 4, 2021 | 500 | 1.31% | 500 | 1.24% | ||||||||
1.85% | September 20, 2021 | (1) | 2,000 | 1.90% | — | — | |||||||
3.00% | June 15, 2022 | 500 | 1.56% | 500 | 1.51% | ||||||||
2.60% | February 28, 2023 | 500 | 2.68% | 500 | 2.68% | ||||||||
2.20% | September 20, 2023 | (1) | 750 | 2.27% | — | — | |||||||
3.625% | March 4, 2024 | 1,000 | 1.42% | 1,000 | 1.36% | ||||||||
3.50% | June 15, 2025 | 500 | 1.72% | 500 | 1.67% | ||||||||
2.95% | February 28, 2026 | 750 | 3.01% | 750 | 3.01% | ||||||||
2.50% | September 20, 2026 | (1) | 1,500 | 2.55% | — | — | |||||||
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% | ||||||||
Total | 34,650 | 28,400 | |||||||||||
Unaccreted discount/issuance costs | (150 | ) | (137 | ) | |||||||||
Hedge accounting fair value adjustments | 289 | 379 | |||||||||||
Total | $ | 34,789 | $ | 28,642 | |||||||||
Reported as: | |||||||||||||
Current portion of long-term debt | $ | 4,155 | $ | 4,159 | |||||||||
Long-term debt | 30,634 | 24,483 | |||||||||||
Total | $ | 34,789 | $ | 28,642 |
Fiscal Year | Amount | ||
2017 (remaining nine months) | $ | 4,150 | |
2018 | 4,750 | ||
2019 | 5,250 | ||
2020 | 6,000 | ||
2021 | 3,000 | ||
Thereafter | 11,500 | ||
Total | $ | 34,650 |
(c) | Credit Facility |
|
(a) | Summary of Derivative Instruments |
DERIVATIVE ASSETS | DERIVATIVE LIABILITIES | ||||||||||||||||||
Balance Sheet Line Item | October 29, 2016 | July 30, 2016 | Balance Sheet Line Item | October 29, 2016 | July 30, 2016 | ||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||||
Foreign currency derivatives | Other current assets | $ | 5 | $ | 7 | Other current liabilities | $ | 83 | $ | 53 | |||||||||
Interest rate derivatives | Other current assets | 6 | 11 | Other current liabilities | — | — | |||||||||||||
Interest rate derivatives | Other assets | 280 | 366 | Other long-term liabilities | — | — | |||||||||||||
Total | 291 | 384 | 83 | 53 | |||||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||||
Foreign currency derivatives | Other current assets | 1 | — | Other current liabilities | 2 | 1 | |||||||||||||
Equity derivatives/warrants | Other assets | — | 1 | Other long-term liabilities | — | — | |||||||||||||
Total | 1 | 1 | 2 | 1 | |||||||||||||||
Total | $ | 292 | $ | 385 | $ | 85 | $ | 54 |
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 29, 2016 | October 24, 2015 | Line Item in Statements of Operations | October 29, 2016 | October 24, 2015 | ||||||||||||||
Derivatives designated as cash flow hedging instruments: | ||||||||||||||||||
Foreign currency derivatives | $ | (46 | ) | $ | (4 | ) | Operating expenses | $ | (9 | ) | $ | (2 | ) | |||||
Cost of sales—service | (3 | ) | (1 | ) | ||||||||||||||
Total | $ | (46 | ) | $ | (4 | ) | $ | (12 | ) | $ | (3 | ) | ||||||
Derivatives designated as net investment hedging instruments: | ||||||||||||||||||
Foreign currency derivatives | $ | 9 | $ | — | 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 29, 2016 | October 24, 2015 | October 29, 2016 | October 24, 2015 | |||||||||||||
Interest rate derivatives | Interest expense | $ | (91 | ) | $ | 127 | $ | 90 | $ | (125 | ) |
GAINS (LOSSES) FOR THE THREE MONTHS ENDED | ||||||||||
Derivatives Not Designated as Hedging Instruments | Line Item in Statements of Operations | October 29, 2016 | October 24, 2015 | |||||||
Foreign currency derivatives | Other income (loss), net | $ | (16 | ) | $ | 4 | ||||
Total return swaps—deferred compensation | Operating expenses | (3 | ) | (16 | ) | |||||
Equity derivatives | Other income (loss), net | 1 | 10 | |||||||
Total | $ | (18 | ) | $ | (2 | ) |
October 29, 2016 | July 30, 2016 | ||||||
Derivatives designated as hedging instruments: | |||||||
Foreign currency derivatives—cash flow hedges | $ | 2,385 | $ | 2,683 | |||
Interest rate derivatives | 9,900 | 9,900 | |||||
Net investment hedging instruments | 290 | 298 | |||||
Derivatives not designated as hedging instruments: | |||||||
Foreign currency derivatives | 2,107 | 2,057 | |||||
Total return swaps—deferred compensation | 497 | 476 | |||||
Total | $ | 15,179 | $ | 15,414 |
(b) | Offsetting of Derivative Instruments |
October 29, 2016 | |||||||||||||||||||||||
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 | $ | 292 | $ | — | $ | 292 | $ | (30 | ) | $ | (242 | ) | $ | 20 | |||||||||
Derivatives liabilities | $ | 85 | $ | — | $ | 85 | $ | (30 | ) | $ | — | $ | 55 |
July 30, 2016 | |||||||||||||||||||||||
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 | $ | 385 | $ | — | $ | 385 | $ | (23 | ) | $ | (305 | ) | $ | 57 | |||||||||
Derivatives liabilities | $ | 54 | $ | — | $ | 54 | $ | (23 | ) | $ | — | $ | 31 |
(c) | Foreign Currency Exchange Risk |
(d) | Interest Rate Risk |
(e) | Equity Price Risk |
(f) | Hedge Effectiveness |
|
(a) | Operating Leases |
Fiscal Year | Amount | ||
2017 (remaining nine months) | $ | 280 | |
2018 | 292 | ||
2019 | 178 | ||
2020 | 128 | ||
2021 | 76 | ||
Thereafter | 162 | ||
Total | $ | 1,116 |
(b) | Purchase Commitments with Contract Manufacturers and Suppliers |
(c) | Other Commitments |
Three Months Ended | |||||||
October 29, 2016 | October 24, 2015 | ||||||
Compensation expense related to acquisitions | $ | 64 | $ | 73 |
(d) | Product Warranties |
Three Months Ended | |||||||
October 29, 2016 | October 24, 2015 | ||||||
Balance at beginning of period | $ | 414 | $ | 449 | |||
Provisions for warranty issued | 176 | 160 | |||||
Adjustments for pre-existing warranties | — | (10 | ) | ||||
Settlements | (177 | ) | (166 | ) | |||
Balance at end of period | $ | 413 | $ | 433 |
(e) | Financing and Other Guarantees |
October 29, 2016 | July 30, 2016 | ||||||
Maximum potential future payments relating to financing guarantees: | |||||||
Channel partner | $ | 248 | $ | 281 | |||
End user | 88 | 96 | |||||
Total | $ | 336 | $ | 377 | |||
Deferred revenue associated with financing guarantees: | |||||||
Channel partner | $ | (77 | ) | $ | (85 | ) | |
End user | (70 | ) | (76 | ) | |||
Total | $ | (147 | ) | $ | (161 | ) | |
Maximum potential future payments relating to financing guarantees, net of associated deferred revenue | $ | 189 | $ | 216 |
(f) | Supplier Component Remediation Liability |
(g) | Indemnifications |
(h) | Legal Proceedings |
|
(a) | Employee Stock Incentive Plans |
(b) | Employee Stock Purchase Plan |
(c) | Summary of Share-Based Compensation Expense |
Three Months Ended | |||||||
October 29, 2016 | October 24, 2015 | ||||||
Cost of sales—product | $ | 21 | $ | 13 | |||
Cost of sales—service | 33 | 38 | |||||
Share-based compensation expense in cost of sales | 54 | 51 | |||||
Research and development | 126 | 114 | |||||
Sales and marketing | 140 | 139 | |||||
General and administrative | 49 | 57 | |||||
Restructuring and other charges | 3 | 15 | |||||
Share-based compensation expense in operating expenses | 318 | 325 | |||||
Total share-based compensation expense | $ | 372 | $ | 376 | |||
Income tax benefit for share-based compensation | $ | 105 | $ | 95 |
(d) | Share-Based Awards Available for Grant |
Share-Based Awards Available for Grant | ||
BALANCE AT JULY 25, 2015 | 276 | |
Restricted stock, stock units, and other share-based awards granted | (96 | ) |
Share-based awards canceled/forfeited/expired | 30 | |
Shares withheld for taxes and not issued | 30 | |
Other | 2 | |
BALANCE AT JULY 30, 2016 | 242 | |
Restricted stock, stock units, and other share-based awards granted | (16 | ) |
Share-based awards canceled/forfeited/expired | 66 | |
Shares withheld for taxes and not issued | 19 | |
BALANCE AT OCTOBER 29, 2016 | 311 |
(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 25, 2015 | 143 | $ | 22.08 | |||||||
Granted and assumed | 70 | 25.69 | ||||||||
Vested | (54 | ) | 20.68 | $ | 1,428 | |||||
Canceled/forfeited | (14 | ) | 22.86 | |||||||
UNVESTED BALANCE AT JULY 30, 2016 | 145 | 24.26 | ||||||||
Granted and assumed | 11 | 28.85 | ||||||||
Vested | (36 | ) | 22.16 | $ | 1,120 | |||||
Canceled/forfeited | (7 | ) | 24.62 | |||||||
UNVESTED BALANCE AT OCTOBER 29, 2016 | 113 | $ | 25.36 |
(f) | Stock Option Awards |
STOCK OPTIONS OUTSTANDING | ||||||
Number Outstanding | Weighted-Average Exercise Price per Share | |||||
BALANCE AT JULY 25, 2015 | 103 | $ | 28.68 | |||
Assumed from acquisitions | 18 | 5.17 | ||||
Exercised | (32 | ) | 19.22 | |||
Canceled/forfeited/expired | (16 | ) | 30.01 | |||
BALANCE AT JULY 30, 2016 | 73 | 26.78 | ||||
Assumed from acquisitions | 1 | 1.59 | ||||
Exercised | (4 | ) | 19.92 | |||
Canceled/forfeited/expired | (55 | ) | 32.02 | |||
BALANCE AT OCTOBER 29, 2016 | 15 | $ | 9.10 |
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 | 12 | 6.6 | $ | 5.60 | $ | 316 | 5 | $ | 5.35 | $ | 127 | |||||||||||||
$ 20.01 – 25.00 | 1 | 0.3 | 23.37 | 3 | 1 | 23.37 | 3 | |||||||||||||||||
$ 25.01 – 30.00 | 2 | 0.4 | 26.64 | 8 | 2 | 26.64 | 8 | |||||||||||||||||
Total | 15 | 5.6 | $ | 9.10 | $ | 327 | 8 | $ | 12.43 | $ | 138 |
(g) | Valuation of Employee Share-Based Awards |
RESTRICTED STOCK UNITS | PERFORMANCE BASED RESTRICTED STOCK UNITS | ||||||||||||||
Three Months Ended | October 29, 2016 | October 24, 2015 | October 29, 2016 | October 24, 2015 | |||||||||||
Number of shares granted (in millions) | 7 | 9 | 3 | 4 | |||||||||||
Grant date fair value per share | $ | 28.55 | $ | 24.02 | $ | 29.62 | $ | 24.61 | |||||||
Weighted-average assumptions/inputs: | |||||||||||||||
Expected dividend yield | 3.3 | % | 3.2 | % | 3.3 | % | 3.2 | % | |||||||
Range of risk-free interest rates | 0.0% – 1.2% | 0.0% – 1.1% | 0.1% – 0.9% | 0.0% – 1.1% | |||||||||||
Range of expected volatilities for index | N/A | N/A | 16.7% – 46.8% | 15.3% – 54.3% |
|
Net Unrealized Gains (Losses) 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 (Loss) | ||||||||||||
BALANCE AT JULY 30, 2016 | $ | 413 | $ | (59 | ) | $ | (680 | ) | $ | (326 | ) | ||||
Other comprehensive income (loss) before reclassifications attributable to Cisco Systems, Inc. | (210 | ) | (46 | ) | (26 | ) | (282 | ) | |||||||
(Gains) losses reclassified out of AOCI | (15 | ) | 12 | — | (3 | ) | |||||||||
Tax benefit (expense) | 86 | 2 | (1 | ) | 87 | ||||||||||
BALANCE AT OCTOBER 29, 2016 | $ | 274 | $ | (91 | ) | $ | (707 | ) | $ | (524 | ) |
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 | ) |
Three Months Ended | |||||||||||
October 29, 2016 | October 24, 2015 | ||||||||||
Comprehensive Income Components | Income Before Taxes | Line Item in Statements of Operations | |||||||||
Net unrealized gains and losses on available-for-sale investments | |||||||||||
$ | 15 | $ | (1 | ) | Other income (loss), net | ||||||
Net unrealized gains and losses on cash flow hedging instruments | |||||||||||
Foreign currency derivatives | (9 | ) | (2 | ) | Operating expenses | ||||||
Foreign currency derivatives | (3 | ) | (1 | ) | Cost of sales—service | ||||||
(12 | ) | (3 | ) | ||||||||
Cumulative translation adjustment and actuarial gains and losses | |||||||||||
— | (1 | ) | Operating expenses | ||||||||
Total amounts reclassified out of AOCI | $ | 3 | $ | (5 | ) |
|
Three Months Ended | |||||||
October 29, 2016 | October 24, 2015 | ||||||
Income before provision for income taxes | $ | 2,953 | $ | 3,137 | |||
Provision for income taxes | $ | 631 | $ | 707 | |||
Effective tax rate | 21.4 | % | 22.5 | % |
|
(a) | Revenue and Gross Margin by Segment |
Three Months Ended | |||||||
October 29, 2016 | October 24, 2015 | ||||||
Revenue: | |||||||
Americas | $ | 7,443 | $ | 7,792 | |||
EMEA | 3,013 | 3,094 | |||||
APJC | 1,896 | 1,796 | |||||
Total | $ | 12,352 | $ | 12,682 | |||
Gross margin: | |||||||
Americas | $ | 4,833 | $ | 4,943 | |||
EMEA | 2,013 | 1,989 | |||||
APJC | 1,204 | 1,078 | |||||
Segment total | 8,050 | 8,010 | |||||
Unallocated corporate items | (166 | ) | (178 | ) | |||
Total | $ | 7,884 | $ | 7,832 |
(b) | Revenue for Groups of Similar Products and Services |
Three Months Ended | |||||||
October 29, 2016 | October 24, 2015 | ||||||
Revenue: | |||||||
Switching | $ | 3,716 | $ | 4,009 | |||
NGN Routing | 2,089 | 1,969 | |||||
Collaboration | 1,081 | 1,115 | |||||
Data Center | 834 | 859 | |||||
Wireless | 632 | 646 | |||||
Security | 540 | 485 | |||||
Service Provider Video(1) | 271 | 687 | |||||
Other | 139 | 74 | |||||
Product | 9,302 | 9,844 | |||||
Service | 3,050 | 2,838 | |||||
Total | $ | 12,352 | $ | 12,682 |
(c) | Additional Segment Information |
October 29, 2016 | July 30, 2016 | ||||||
Property and equipment, net: | |||||||
United States | $ | 2,847 | $ | 2,822 | |||
International | 652 | 684 | |||||
Total | $ | 3,499 | $ | 3,506 |
|
(a) | Fair Value Hierarchy |
(d) | Interest Rate Risk |
(e) | Equity Price Risk |
|
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 | 4,623 | $ | 24,180 | $ | 73,418 | $ | 97,598 |
|
Purchase Consideration | Purchased Intangible Assets | Goodwill | |||||||||
CloudLock | $ | 249 | $ | 36 | $ | 213 | |||||
Others (two in total) | 9 | 5 | 4 | ||||||||
Total | $ | 258 | $ | 41 | $ | 217 |
|
Balance at | Balance at | ||||||||||||||
July 30, 2016 | Acquisitions | Other | October 29, 2016 | ||||||||||||
Americas | $ | 16,529 | $ | 132 | $ | (13 | ) | $ | 16,648 | ||||||
EMEA | 6,269 | 62 | (4 | ) | 6,327 | ||||||||||
APJC | 3,827 | 23 | (2 | ) | 3,848 | ||||||||||
Total | $ | 26,625 | $ | 217 | $ | (19 | ) | $ | 26,823 |
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 | ||||||||||||||||||
CloudLock | 6.0 | $ | 32 | 4.0 | $ | 3 | 1.5 | $ | 1 | $ | — | $ | 36 | ||||||||||||
Others (two in total) | 3.0 | 5 | 0.0 | — | 0.0 | — | — | 5 | |||||||||||||||||
Total | $ | 37 | $ | 3 | $ | 1 | $ | — | $ | 41 |
October 29, 2016 | Gross | Accumulated Amortization | Net | |||||||||
Purchased intangible assets with finite lives: | ||||||||||||
Technology | $ | 2,861 | $ | (1,334 | ) | $ | 1,527 | |||||
Customer relationships | 1,737 | (1,220 | ) | 517 | ||||||||
Other | 58 | (21 | ) | 37 | ||||||||
Total purchased intangible assets with finite lives | 4,656 | (2,575 | ) | 2,081 | ||||||||
In-process research and development, with indefinite lives | 216 | — | 216 | |||||||||
Total | $ | 4,872 | $ | (2,575 | ) | $ | 2,297 |
July 30, 2016 | Gross | Accumulated Amortization | Net | |||||||||
Purchased intangible assets with finite lives: | ||||||||||||
Technology | $ | 3,038 | $ | (1,391 | ) | $ | 1,647 | |||||
Customer relationships | 1,793 | (1,203 | ) | 590 | ||||||||
Other | 85 | (43 | ) | 42 | ||||||||
Total purchased intangible assets with finite lives | 4,916 | (2,637 | ) | 2,279 | ||||||||
In-process research and development, with indefinite lives | 222 | — | 222 | |||||||||
Total | $ | 5,138 | $ | (2,637 | ) | $ | 2,501 |
Three Months Ended | |||||||
October 29, 2016 | October 24, 2015 | ||||||
Amortization of purchased intangible assets: | |||||||
Cost of sales | $ | 129 | $ | 146 | |||
Operating expenses | |||||||
Amortization of purchased intangible assets | 78 | 69 | |||||
Restructuring and other charges | 38 | — | |||||
Total | $ | 245 | $ | 215 |
Fiscal Year | Amount | ||
2017 (remaining nine months) | $ | 524 | |
2018 | 579 | ||
2019 | 493 | ||
2020 | 281 | ||
2021 | 137 | ||
Thereafter | 67 | ||
Total | $ | 2,081 |
|
FISCAL 2015 AND PRIOR PLANS | FISCAL 2017 PLAN | |||||||||||||||||||
Employee Severance | Other | Employee Severance | Other | Total | ||||||||||||||||
Liability as of July 30, 2016 | $ | 21 | $ | 24 | $ | — | $ | — | $ | 45 | ||||||||||
Charges | — | — | 369 | 42 | 411 | |||||||||||||||
Cash payments | (12 | ) | — | (257 | ) | (1 | ) | (270 | ) | |||||||||||
Non-cash items | (4 | ) | (2 | ) | — | (41 | ) | (47 | ) | |||||||||||
Liability as of October 29, 2016 | $ | 5 | $ | 22 | $ | 112 | $ | — | $ | 139 |
FISCAL 2015 AND PRIOR PLANS | ||||||||||||
Employee Severance | Other | Total | ||||||||||
Liability as of July 25, 2015 | $ | 60 | $ | 29 | $ | 89 | ||||||
Charges | 125 | 17 | 142 | |||||||||
Cash payments | (123 | ) | (6 | ) | (129 | ) | ||||||
Non-cash items | — | (16 | ) | (16 | ) | |||||||
Liability as of October 24, 2015 | $ | 62 | $ | 24 | $ | 86 |
|
October 29, 2016 | July 30, 2016 | |||||||
Inventories: | ||||||||
Raw materials | $ | 111 | $ | 91 | ||||
Finished goods: | ||||||||
Distributor inventory and deferred cost of sales | 481 | 457 | ||||||
Manufactured finished goods | 328 | 415 | ||||||
Total finished goods | 809 | 872 | ||||||
Service-related spares | 237 | 236 | ||||||
Demonstration systems | 19 | 18 | ||||||
Total | $ | 1,176 | $ | 1,217 |
Property and equipment, net: | ||||||||
Gross property and equipment: | ||||||||
Land, buildings, and building and leasehold improvements | $ | 4,819 | $ | 4,778 | ||||
Computer equipment and related software | 1,292 | 1,288 | ||||||
Production, engineering, and other equipment | 5,708 | 5,658 | ||||||
Operating lease assets | 301 | 296 | ||||||
Furniture and fixtures | 548 | 543 | ||||||
Total gross property and equipment | 12,668 | 12,563 | ||||||
Less: accumulated depreciation and amortization | (9,169 | ) | (9,057 | ) | ||||
Total | $ | 3,499 | $ | 3,506 |
Deferred revenue: | ||||||||
Service | $ | 10,424 | $ | 10,621 | ||||
Product: | ||||||||
Deferred revenue related to recurring software and subscription businesses | 3,801 | 3,308 | ||||||
Deferred revenue related to two-tier distributors | 439 | 377 | ||||||
Other product deferred revenue | 2,287 | 2,166 | ||||||
Total product deferred revenue | 6,527 | 5,851 | ||||||
Total | $ | 16,951 | $ | 16,472 | ||||
Reported as: | ||||||||
Current | $ | 10,215 | $ | 10,155 | ||||
Noncurrent | 6,736 | 6,317 | ||||||
Total | $ | 16,951 | $ | 16,472 |
|
October 29, 2016 | Lease Receivables | Loan Receivables | Financed Service Contracts and Other | Total | |||||||||||
Gross | $ | 3,202 | $ | 2,236 | $ | 4,239 | $ | 9,677 | |||||||
Residual value | 197 | — | — | 197 | |||||||||||
Unearned income | (163 | ) | — | — | (163 | ) | |||||||||
Allowance for credit loss | (227 | ) | (111 | ) | (48 | ) | (386 | ) | |||||||
Total, net | $ | 3,009 | $ | 2,125 | $ | 4,191 | $ | 9,325 | |||||||
Reported as: | |||||||||||||||
Current | $ | 1,504 | $ | 1,021 | $ | 2,016 | $ | 4,541 | |||||||
Noncurrent | 1,505 | 1,104 | 2,175 | 4,784 | |||||||||||
Total, net | $ | 3,009 | $ | 2,125 | $ | 4,191 | $ | 9,325 |
July 30, 2016 | Lease Receivables | Loan Receivables | Financed Service Contracts and Other | Total | |||||||||||
Gross | $ | 3,272 | $ | 2,135 | $ | 3,370 | $ | 8,777 | |||||||
Residual value | 202 | — | — | 202 | |||||||||||
Unearned income | (174 | ) | — | — | (174 | ) | |||||||||
Allowance for credit loss | (230 | ) | (97 | ) | (48 | ) | (375 | ) | |||||||
Total, net | $ | 3,070 | $ | 2,038 | $ | 3,322 | $ | 8,430 | |||||||
Reported as: | |||||||||||||||
Current | $ | 1,490 | $ | 988 | $ | 1,794 | $ | 4,272 | |||||||
Noncurrent | 1,580 | 1,050 | 1,528 | 4,158 | |||||||||||
Total, net | $ | 3,070 | $ | 2,038 | $ | 3,322 | $ | 8,430 |
Fiscal Year | Amount | ||
2017 (remaining nine months) | $ | 1,222 | |
2018 | 1,066 | ||
2019 | 587 | ||
2020 | 260 | ||
2021 | 65 | ||
Thereafter | 2 | ||
Total | $ | 3,202 |
INTERNAL CREDIT RISK RATING | |||||||||||||||
October 29, 2016 | 1 to 4 | 5 to 6 | 7 and Higher | Total | |||||||||||
Lease receivables | $ | 1,652 | $ | 1,293 | $ | 94 | $ | 3,039 | |||||||
Loan receivables | 1,081 | 976 | 179 | 2,236 | |||||||||||
Financed service contracts and other | 2,898 | 1,313 | 28 | 4,239 | |||||||||||
Total | $ | 5,631 | $ | 3,582 | $ | 301 | $ | 9,514 |
INTERNAL CREDIT RISK RATING | |||||||||||||||
July 30, 2016 | 1 to 4 | 5 to 6 | 7 and Higher | Total | |||||||||||
Lease receivables | $ | 1,703 | $ | 1,294 | $ | 101 | $ | 3,098 | |||||||
Loan receivables | 986 | 967 | 182 | 2,135 | |||||||||||
Financed service contracts and other | 2,077 | 1,271 | 22 | 3,370 | |||||||||||
Total | $ | 4,766 | $ | 3,532 | $ | 305 | $ | 8,603 |
DAYS PAST DUE (INCLUDES BILLED AND UNBILLED) | |||||||||||||||||||||||||||||||
October 29, 2016 | 31-60 | 61-90 | 91+ | Total Past Due | Current | Total | Nonaccrual Financing Receivables | Impaired Financing Receivables | |||||||||||||||||||||||
Lease receivables | $ | 86 | $ | 70 | $ | 249 | $ | 405 | $ | 2,634 | $ | 3,039 | $ | 55 | $ | 55 | |||||||||||||||
Loan receivables | 25 | 23 | 95 | 143 | 2,093 | 2,236 | 42 | 42 | |||||||||||||||||||||||
Financed service contracts and other | 317 | 338 | 367 | 1,022 | 3,217 | 4,239 | 29 | 9 | |||||||||||||||||||||||
Total | $ | 428 | $ | 431 | $ | 711 | $ | 1,570 | $ | 7,944 | $ | 9,514 | $ | 126 | $ | 106 |
DAYS PAST DUE (INCLUDES BILLED AND UNBILLED) | |||||||||||||||||||||||||||||||
July 30, 2016 | 31-60 | 61-90 | 91+ | Total Past Due | Current | Total | Nonaccrual Financing Receivables | Impaired Financing Receivables | |||||||||||||||||||||||
Lease receivables | $ | 111 | $ | 25 | $ | 251 | $ | 387 | $ | 2,711 | $ | 3,098 | $ | 60 | $ | 60 | |||||||||||||||
Loan receivables | 30 | 9 | 37 | 76 | 2,059 | 2,135 | 42 | 42 | |||||||||||||||||||||||
Financed service contracts and other | 213 | 152 | 565 | 930 | 2,440 | 3,370 | 30 | 10 | |||||||||||||||||||||||
Total | $ | 354 | $ | 186 | $ | 853 | $ | 1,393 | $ | 7,210 | $ | 8,603 | $ | 132 | $ | 112 |
CREDIT LOSS ALLOWANCES | |||||||||||||||
Lease Receivables | Loan Receivables | Financed Service Contracts and Other | Total | ||||||||||||
Allowance for credit loss as of July 30, 2016 | $ | 230 | $ | 97 | $ | 48 | $ | 375 | |||||||
Provisions | (4 | ) | 12 | — | 8 | ||||||||||
Foreign exchange and other | 1 | 2 | — | 3 | |||||||||||
Allowance for credit loss as of October 29, 2016 | $ | 227 | $ | 111 | $ | 48 | $ | 386 |
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 |
October 29, 2016 | July 30, 2016 | ||||||
Operating lease assets | $ | 301 | $ | 296 | |||
Accumulated depreciation | (168 | ) | (161 | ) | |||
Operating lease assets, net | $ | 133 | $ | 135 |
Fiscal Year | Amount | ||
2017 (remaining nine months) | $ | 179 | |
2018 | 142 | ||
2019 | 53 | ||
2020 | 8 | ||
2021 | 4 | ||
Thereafter | 1 | ||
Total | $ | 387 |
|
October 29, 2016 | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||
Fixed income securities: | |||||||||||||||
U.S. government securities | $ | 25,905 | $ | 24 | $ | (33 | ) | $ | 25,896 | ||||||
U.S. government agency securities | 2,619 | 4 | (1 | ) | 2,622 | ||||||||||
Non-U.S. government and agency securities | 1,104 | 1 | (1 | ) | 1,104 | ||||||||||
Corporate debt securities | 29,046 | 177 | (60 | ) | 29,163 | ||||||||||
U.S. agency mortgage-backed securities | 2,069 | 16 | (2 | ) | 2,083 | ||||||||||
Total fixed income securities | 60,743 | 222 | (97 | ) | 60,868 | ||||||||||
Publicly traded equity securities | 1,225 | 346 | (54 | ) | 1,517 | ||||||||||
Total (1) | $ | 61,968 | $ | 568 | $ | (151 | ) | $ | 62,385 |
July 30, 2016 | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||
Fixed income securities: | |||||||||||||||
U.S. government securities | $ | 26,473 | $ | 73 | $ | (2 | ) | $ | 26,544 | ||||||
U.S. government agency securities | 2,809 | 8 | — | 2,817 | |||||||||||
Non-U.S. government and agency securities | 1,096 | 4 | — | 1,100 | |||||||||||
Corporate debt securities | 24,044 | 263 | (15 | ) | 24,292 | ||||||||||
U.S. agency mortgage-backed securities | 1,846 | 22 | — | 1,868 | |||||||||||
Total fixed income securities | 56,268 | 370 | (17 | ) | 56,621 | ||||||||||
Publicly traded equity securities | 1,211 | 333 | (40 | ) | 1,504 | ||||||||||
Total (1) | $ | 57,479 | $ | 703 | $ | (57 | ) | $ | 58,125 |
Three Months Ended | |||||||
October 29, 2016 | October 24, 2015 | ||||||
Gross realized gains | $ | 30 | $ | 35 | |||
Gross realized losses | (15 | ) | (36 | ) | |||
Total | $ | 15 | $ | (1 | ) |
Three Months Ended | |||||||
October 29, 2016 | October 24, 2015 | ||||||
Net gains/(losses) on investments in publicly traded equity securities | $ | 5 | $ | (9 | ) | ||
Net gains/(losses) on investments in fixed income securities | 10 | 8 | |||||
Total | $ | 15 | $ | (1 | ) |
UNREALIZED LOSSES LESS THAN 12 MONTHS | UNREALIZED LOSSES 12 MONTHS OR GREATER | TOTAL | |||||||||||||||||||||
October 29, 2016 | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | |||||||||||||||||
Fixed income securities: | |||||||||||||||||||||||
U.S. government securities | $ | 11,766 | $ | (33 | ) | $ | 100 | $ | — | $ | 11,866 | $ | (33 | ) | |||||||||
U.S. government agency securities | 596 | (1 | ) | — | — | 596 | (1 | ) | |||||||||||||||
Non-U.S. government and agency securities | 498 | (1 | ) | — | — | 498 | (1 | ) | |||||||||||||||
Corporate debt securities | 9,013 | (57 | ) | 572 | (3 | ) | 9,585 | (60 | ) | ||||||||||||||
U.S. agency mortgage-backed securities | 594 | (2 | ) | — | — | 594 | (2 | ) | |||||||||||||||
Total fixed income securities | 22,467 | (94 | ) | 672 | (3 | ) | 23,139 | (97 | ) | ||||||||||||||
Publicly traded equity securities | 291 | (53 | ) | 3 | (1 | ) | 294 | (54 | ) | ||||||||||||||
Total | $ | 22,758 | $ | (147 | ) | $ | 675 | $ | (4 | ) | $ | 23,433 | $ | (151 | ) |
UNREALIZED LOSSES LESS THAN 12 MONTHS | UNREALIZED LOSSES 12 MONTHS OR GREATER | TOTAL | |||||||||||||||||||||
July 30, 2016 | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | |||||||||||||||||
Fixed income securities: | |||||||||||||||||||||||
U.S. government securities | $ | 2,414 | $ | (2 | ) | $ | — | $ | — | $ | 2,414 | $ | (2 | ) | |||||||||
U.S. government agency securities | 144 | — | — | — | 144 | — | |||||||||||||||||
Non-U.S. government and agency securities | 61 | — | — | — | 61 | — | |||||||||||||||||
Corporate debt securities | 2,499 | (7 | ) | 1,208 | (8 | ) | 3,707 | (15 | ) | ||||||||||||||
U.S. agency mortgage-backed securities | 174 | — | — | — | 174 | — | |||||||||||||||||
Total fixed income securities | 5,292 | (9 | ) | 1,208 | (8 | ) | 6,500 | (17 | ) | ||||||||||||||
Publicly traded equity securities | 188 | (40 | ) | — | — | 188 | (40 | ) | |||||||||||||||
Total | $ | 5,480 | $ | (49 | ) | $ | 1,208 | $ | (8 | ) | $ | 6,688 | $ | (57 | ) |
Amortized Cost | Fair Value | ||||||
Less than 1 year | $ | 12,967 | $ | 12,977 | |||
Due in 1 to 2 years | 17,042 | 17,071 | |||||
Due in 2 to 5 years | 25,125 | 25,230 | |||||
Due after 5 years | 3,540 | 3,507 | |||||
Mortgage-backed securities with no single maturity | 2,069 | 2,083 | |||||
Total | $ | 60,743 | $ | 60,868 |
October 29, 2016 | July 30, 2016 | ||||||
Equity method investments | $ | 162 | $ | 174 | |||
Cost method investments | 829 | 829 | |||||
Total | $ | 991 | $ | 1,003 |
|
OCTOBER 29, 2016 FAIR VALUE MEASUREMENTS | JULY 30, 2016 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 | $ | 6,749 | $ | — | $ | — | $ | 6,749 | $ | 6,049 | $ | — | $ | — | $ | 6,049 | |||||||||||||||
Corporate debt securities | — | — | — | — | — | 43 | — | 43 | |||||||||||||||||||||||
Available-for-sale investments: | |||||||||||||||||||||||||||||||
U.S. government securities | — | 25,896 | — | 25,896 | — | 26,544 | — | 26,544 | |||||||||||||||||||||||
U.S. government agency securities | — | 2,622 | — | 2,622 | — | 2,817 | — | 2,817 | |||||||||||||||||||||||
Non-U.S. government and agency securities | — | 1,104 | — | 1,104 | — | 1,100 | — | 1,100 | |||||||||||||||||||||||
Corporate debt securities | — | 29,163 | — | 29,163 | — | 24,292 | — | 24,292 | |||||||||||||||||||||||
U.S. agency mortgage-backed securities | — | 2,083 | — | 2,083 | — | 1,868 | — | 1,868 | |||||||||||||||||||||||
Publicly traded equity securities | 1,517 | — | — | 1,517 | 1,504 | — | — | 1,504 | |||||||||||||||||||||||
Derivative assets | — | 292 | — | 292 | — | 384 | 1 | 385 | |||||||||||||||||||||||
Total | $ | 8,266 | $ | 61,160 | $ | — | $ | 69,426 | $ | 7,553 | $ | 57,048 | $ | 1 | $ | 64,602 | |||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||
Derivative liabilities | $ | — | $ | 85 | $ | — | $ | 85 | $ | — | $ | 54 | $ | — | $ | 54 | |||||||||||||||
Total | $ | — | $ | 85 | $ | — | $ | 85 | $ | — | $ | 54 | $ | — | $ | 54 |
TOTAL GAINS (LOSSES) FOR THE THREE MONTHS ENDED | |||||||
October 29, 2016 | October 24, 2015 | ||||||
Investments in privately held companies (impaired) | $ | (47 | ) | $ | (17 | ) | |
Purchased intangible assets (impaired) | (42 | ) | — | ||||
Total gains (losses) for nonrecurring measurements | $ | (89 | ) | $ | (17 | ) |
|
October 29, 2016 | July 30, 2016 | ||||||||||||
Amount | Effective Rate | Amount | Effective Rate | ||||||||||
Current portion of long-term debt | $ | 4,155 | 1.08 | % | $ | 4,159 | 0.97 | % | |||||
Other notes and borrowings | — | — | 1 | 2.08 | % | ||||||||
Total short-term debt | $ | 4,155 | $ | 4,160 |
October 29, 2016 | July 30, 2016 | ||||||||||||
Maturity Date | Amount | Effective Rate | Amount | Effective Rate | |||||||||
Senior notes: | |||||||||||||
Floating-rate notes: | |||||||||||||
Three-month LIBOR plus 0.28% | March 3, 2017 | $ | 1,000 | 1.18% | $ | 1,000 | 1.03% | ||||||
Three-month LIBOR plus 0.60% | February 21, 2018 | 1,000 | 1.48% | 1,000 | 1.32% | ||||||||
Three-month LIBOR plus 0.31% | June 15, 2018 | 900 | 1.23% | 900 | 1.03% | ||||||||
Three-month LIBOR plus 0.50% | March 1, 2019 | 500 | 1.40% | 500 | 1.23% | ||||||||
Three-month LIBOR plus 0.34% | September 20, 2019 | (1) | 500 | 1.24% | — | — | |||||||
Fixed-rate notes: | |||||||||||||
1.10% | March 3, 2017 | 2,400 | 0.93% | 2,400 | 0.87% | ||||||||
3.15% | March 14, 2017 | 750 | 1.42% | 750 | 1.22% | ||||||||
1.40% | February 28, 2018 | 1,250 | 1.47% | 1,250 | 1.47% | ||||||||
1.65% | June 15, 2018 | 1,600 | 1.72% | 1,600 | 1.72% | ||||||||
4.95% | February 15, 2019 | 2,000 | 4.78% | 2,000 | 4.76% | ||||||||
1.60% | February 28, 2019 | 1,000 | 1.67% | 1,000 | 1.67% | ||||||||
2.125% | March 1, 2019 | 1,750 | 1.14% | 1,750 | 1.08% | ||||||||
1.40% | September 20, 2019 | (1) | 1,500 | 1.48% | — | — | |||||||
4.45% | January 15, 2020 | 2,500 | 3.29% | 2,500 | 3.25% | ||||||||
2.45% | June 15, 2020 | 1,500 | 2.54% | 1,500 | 2.54% | ||||||||
2.20% | February 28, 2021 | 2,500 | 2.30% | 2,500 | 2.30% | ||||||||
2.90% | March 4, 2021 | 500 | 1.31% | 500 | 1.24% | ||||||||
1.85% | September 20, 2021 | (1) | 2,000 | 1.90% | — | — | |||||||
3.00% | June 15, 2022 | 500 | 1.56% | 500 | 1.51% | ||||||||
2.60% | February 28, 2023 | 500 | 2.68% | 500 | 2.68% | ||||||||
2.20% | September 20, 2023 | (1) | 750 | 2.27% | — | — | |||||||
3.625% | March 4, 2024 | 1,000 | 1.42% | 1,000 | 1.36% | ||||||||
3.50% | June 15, 2025 | 500 | 1.72% | 500 | 1.67% | ||||||||
2.95% | February 28, 2026 | 750 | 3.01% | 750 | 3.01% | ||||||||
2.50% | September 20, 2026 | (1) | 1,500 | 2.55% | — | — | |||||||
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% | ||||||||
Total | 34,650 | 28,400 | |||||||||||
Unaccreted discount/issuance costs | (150 | ) | (137 | ) | |||||||||
Hedge accounting fair value adjustments | 289 | 379 | |||||||||||
Total | $ | 34,789 | $ | 28,642 | |||||||||
Reported as: | |||||||||||||
Current portion of long-term debt | $ | 4,155 | $ | 4,159 | |||||||||
Long-term debt | 30,634 | 24,483 | |||||||||||
Total | $ | 34,789 | $ | 28,642 |
Fiscal Year | Amount | ||
2017 (remaining nine months) | $ | 4,150 | |
2018 | 4,750 | ||
2019 | 5,250 | ||
2020 | 6,000 | ||
2021 | 3,000 | ||
Thereafter | 11,500 | ||
Total | $ | 34,650 |
|
DERIVATIVE ASSETS | DERIVATIVE LIABILITIES | ||||||||||||||||||
Balance Sheet Line Item | October 29, 2016 | July 30, 2016 | Balance Sheet Line Item | October 29, 2016 | July 30, 2016 | ||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||||
Foreign currency derivatives | Other current assets | $ | 5 | $ | 7 | Other current liabilities | $ | 83 | $ | 53 | |||||||||
Interest rate derivatives | Other current assets | 6 | 11 | Other current liabilities | — | — | |||||||||||||
Interest rate derivatives | Other assets | 280 | 366 | Other long-term liabilities | — | — | |||||||||||||
Total | 291 | 384 | 83 | 53 | |||||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||||
Foreign currency derivatives | Other current assets | 1 | — | Other current liabilities | 2 | 1 | |||||||||||||
Equity derivatives/warrants | Other assets | — | 1 | Other long-term liabilities | — | — | |||||||||||||
Total | 1 | 1 | 2 | 1 | |||||||||||||||
Total | $ | 292 | $ | 385 | $ | 85 | $ | 54 |
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 29, 2016 | October 24, 2015 | Line Item in Statements of Operations | October 29, 2016 | October 24, 2015 | ||||||||||||||
Derivatives designated as cash flow hedging instruments: | ||||||||||||||||||
Foreign currency derivatives | $ | (46 | ) | $ | (4 | ) | Operating expenses | $ | (9 | ) | $ | (2 | ) | |||||
Cost of sales—service | (3 | ) | (1 | ) | ||||||||||||||
Total | $ | (46 | ) | $ | (4 | ) | $ | (12 | ) | $ | (3 | ) | ||||||
Derivatives designated as net investment hedging instruments: | ||||||||||||||||||
Foreign currency derivatives | $ | 9 | $ | — | 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 29, 2016 | October 24, 2015 | October 29, 2016 | October 24, 2015 | |||||||||||||
Interest rate derivatives | Interest expense | $ | (91 | ) | $ | 127 | $ | 90 | $ | (125 | ) |
GAINS (LOSSES) FOR THE THREE MONTHS ENDED | ||||||||||
Derivatives Not Designated as Hedging Instruments | Line Item in Statements of Operations | October 29, 2016 | October 24, 2015 | |||||||
Foreign currency derivatives | Other income (loss), net | $ | (16 | ) | $ | 4 | ||||
Total return swaps—deferred compensation | Operating expenses | (3 | ) | (16 | ) | |||||
Equity derivatives | Other income (loss), net | 1 | 10 | |||||||
Total | $ | (18 | ) | $ | (2 | ) |
October 29, 2016 | July 30, 2016 | ||||||
Derivatives designated as hedging instruments: | |||||||
Foreign currency derivatives—cash flow hedges | $ | 2,385 | $ | 2,683 | |||
Interest rate derivatives | 9,900 | 9,900 | |||||
Net investment hedging instruments | 290 | 298 | |||||
Derivatives not designated as hedging instruments: | |||||||
Foreign currency derivatives | 2,107 | 2,057 | |||||
Total return swaps—deferred compensation | 497 | 476 | |||||
Total | $ | 15,179 | $ | 15,414 |
October 29, 2016 | |||||||||||||||||||||||
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 | $ | 292 | $ | — | $ | 292 | $ | (30 | ) | $ | (242 | ) | $ | 20 | |||||||||
Derivatives liabilities | $ | 85 | $ | — | $ | 85 | $ | (30 | ) | $ | — | $ | 55 |
July 30, 2016 | |||||||||||||||||||||||
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 | $ | 385 | $ | — | $ | 385 | $ | (23 | ) | $ | (305 | ) | $ | 57 | |||||||||
Derivatives liabilities | $ | 54 | $ | — | $ | 54 | $ | (23 | ) | $ | — | $ | 31 |
|
Fiscal Year | Amount | ||
2017 (remaining nine months) | $ | 280 | |
2018 | 292 | ||
2019 | 178 | ||
2020 | 128 | ||
2021 | 76 | ||
Thereafter | 162 | ||
Total | $ | 1,116 |
Three Months Ended | |||||||
October 29, 2016 | October 24, 2015 | ||||||
Compensation expense related to acquisitions | $ | 64 | $ | 73 |
Three Months Ended | |||||||
October 29, 2016 | October 24, 2015 | ||||||
Balance at beginning of period | $ | 414 | $ | 449 | |||
Provisions for warranty issued | 176 | 160 | |||||
Adjustments for pre-existing warranties | — | (10 | ) | ||||
Settlements | (177 | ) | (166 | ) | |||
Balance at end of period | $ | 413 | $ | 433 |
October 29, 2016 | July 30, 2016 | ||||||
Maximum potential future payments relating to financing guarantees: | |||||||
Channel partner | $ | 248 | $ | 281 | |||
End user | 88 | 96 | |||||
Total | $ | 336 | $ | 377 | |||
Deferred revenue associated with financing guarantees: | |||||||
Channel partner | $ | (77 | ) | $ | (85 | ) | |
End user | (70 | ) | (76 | ) | |||
Total | $ | (147 | ) | $ | (161 | ) | |
Maximum potential future payments relating to financing guarantees, net of associated deferred revenue | $ | 189 | $ | 216 |
|
Three Months Ended | |||||||
October 29, 2016 | October 24, 2015 | ||||||
Cost of sales—product | $ | 21 | $ | 13 | |||
Cost of sales—service | 33 | 38 | |||||
Share-based compensation expense in cost of sales | 54 | 51 | |||||
Research and development | 126 | 114 | |||||
Sales and marketing | 140 | 139 | |||||
General and administrative | 49 | 57 | |||||
Restructuring and other charges | 3 | 15 | |||||
Share-based compensation expense in operating expenses | 318 | 325 | |||||
Total share-based compensation expense | $ | 372 | $ | 376 | |||
Income tax benefit for share-based compensation | $ | 105 | $ | 95 |
Share-Based Awards Available for Grant | ||
BALANCE AT JULY 25, 2015 | 276 | |
Restricted stock, stock units, and other share-based awards granted | (96 | ) |
Share-based awards canceled/forfeited/expired | 30 | |
Shares withheld for taxes and not issued | 30 | |
Other | 2 | |
BALANCE AT JULY 30, 2016 | 242 | |
Restricted stock, stock units, and other share-based awards granted | (16 | ) |
Share-based awards canceled/forfeited/expired | 66 | |
Shares withheld for taxes and not issued | 19 | |
BALANCE AT OCTOBER 29, 2016 | 311 |
Restricted Stock/ Stock Units | Weighted-Average Grant Date Fair Value per Share | Aggregate Fair Value | ||||||||
UNVESTED BALANCE AT JULY 25, 2015 | 143 | $ | 22.08 | |||||||
Granted and assumed | 70 | 25.69 | ||||||||
Vested | (54 | ) | 20.68 | $ | 1,428 | |||||
Canceled/forfeited | (14 | ) | 22.86 | |||||||
UNVESTED BALANCE AT JULY 30, 2016 | 145 | 24.26 | ||||||||
Granted and assumed | 11 | 28.85 | ||||||||
Vested | (36 | ) | 22.16 | $ | 1,120 | |||||
Canceled/forfeited | (7 | ) | 24.62 | |||||||
UNVESTED BALANCE AT OCTOBER 29, 2016 | 113 | $ | 25.36 |
STOCK OPTIONS OUTSTANDING | ||||||
Number Outstanding | Weighted-Average Exercise Price per Share | |||||
BALANCE AT JULY 25, 2015 | 103 | $ | 28.68 | |||
Assumed from acquisitions | 18 | 5.17 | ||||
Exercised | (32 | ) | 19.22 | |||
Canceled/forfeited/expired | (16 | ) | 30.01 | |||
BALANCE AT JULY 30, 2016 | 73 | 26.78 | ||||
Assumed from acquisitions | 1 | 1.59 | ||||
Exercised | (4 | ) | 19.92 | |||
Canceled/forfeited/expired | (55 | ) | 32.02 | |||
BALANCE AT OCTOBER 29, 2016 | 15 | $ | 9.10 |
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 | 12 | 6.6 | $ | 5.60 | $ | 316 | 5 | $ | 5.35 | $ | 127 | |||||||||||||
$ 20.01 – 25.00 | 1 | 0.3 | 23.37 | 3 | 1 | 23.37 | 3 | |||||||||||||||||
$ 25.01 – 30.00 | 2 | 0.4 | 26.64 | 8 | 2 | 26.64 | 8 | |||||||||||||||||
Total | 15 | 5.6 | $ | 9.10 | $ | 327 | 8 | $ | 12.43 | $ | 138 |
RESTRICTED STOCK UNITS | PERFORMANCE BASED RESTRICTED STOCK UNITS | ||||||||||||||
Three Months Ended | October 29, 2016 | October 24, 2015 | October 29, 2016 | October 24, 2015 | |||||||||||
Number of shares granted (in millions) | 7 | 9 | 3 | 4 | |||||||||||
Grant date fair value per share | $ | 28.55 | $ | 24.02 | $ | 29.62 | $ | 24.61 | |||||||
Weighted-average assumptions/inputs: | |||||||||||||||
Expected dividend yield | 3.3 | % | 3.2 | % | 3.3 | % | 3.2 | % | |||||||
Range of risk-free interest rates | 0.0% – 1.2% | 0.0% – 1.1% | 0.1% – 0.9% | 0.0% – 1.1% | |||||||||||
Range of expected volatilities for index | N/A | N/A | 16.7% – 46.8% | 15.3% – 54.3% |
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Net Unrealized Gains (Losses) 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 (Loss) | ||||||||||||
BALANCE AT JULY 30, 2016 | $ | 413 | $ | (59 | ) | $ | (680 | ) | $ | (326 | ) | ||||
Other comprehensive income (loss) before reclassifications attributable to Cisco Systems, Inc. | (210 | ) | (46 | ) | (26 | ) | (282 | ) | |||||||
(Gains) losses reclassified out of AOCI | (15 | ) | 12 | — | (3 | ) | |||||||||
Tax benefit (expense) | 86 | 2 | (1 | ) | 87 | ||||||||||
BALANCE AT OCTOBER 29, 2016 | $ | 274 | $ | (91 | ) | $ | (707 | ) | $ | (524 | ) |
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 | ) |
Three Months Ended | |||||||||||
October 29, 2016 | October 24, 2015 | ||||||||||
Comprehensive Income Components | Income Before Taxes | Line Item in Statements of Operations | |||||||||
Net unrealized gains and losses on available-for-sale investments | |||||||||||
$ | 15 | $ | (1 | ) | Other income (loss), net | ||||||
Net unrealized gains and losses on cash flow hedging instruments | |||||||||||
Foreign currency derivatives | (9 | ) | (2 | ) | Operating expenses | ||||||
Foreign currency derivatives | (3 | ) | (1 | ) | Cost of sales—service | ||||||
(12 | ) | (3 | ) | ||||||||
Cumulative translation adjustment and actuarial gains and losses | |||||||||||
— | (1 | ) | Operating expenses | ||||||||
Total amounts reclassified out of AOCI | $ | 3 | $ | (5 | ) |
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Three Months Ended | |||||||
October 29, 2016 | October 24, 2015 | ||||||
Income before provision for income taxes | $ | 2,953 | $ | 3,137 | |||
Provision for income taxes | $ | 631 | $ | 707 | |||
Effective tax rate | 21.4 | % | 22.5 | % |
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Three Months Ended | |||||||
October 29, 2016 | October 24, 2015 | ||||||
Revenue: | |||||||
Americas | $ | 7,443 | $ | 7,792 | |||
EMEA | 3,013 | 3,094 | |||||
APJC | 1,896 | 1,796 | |||||
Total | $ | 12,352 | $ | 12,682 | |||
Gross margin: | |||||||
Americas | $ | 4,833 | $ | 4,943 | |||
EMEA | 2,013 | 1,989 | |||||
APJC | 1,204 | 1,078 | |||||
Segment total | 8,050 | 8,010 | |||||
Unallocated corporate items | (166 | ) | (178 | ) | |||
Total | $ | 7,884 | $ | 7,832 |
Three Months Ended | |||||||
October 29, 2016 | October 24, 2015 | ||||||
Revenue: | |||||||
Switching | $ | 3,716 | $ | 4,009 | |||
NGN Routing | 2,089 | 1,969 | |||||
Collaboration | 1,081 | 1,115 | |||||
Data Center | 834 | 859 | |||||
Wireless | 632 | 646 | |||||
Security | 540 | 485 | |||||
Service Provider Video(1) | 271 | 687 | |||||
Other | 139 | 74 | |||||
Product | 9,302 | 9,844 | |||||
Service | 3,050 | 2,838 | |||||
Total | $ | 12,352 | $ | 12,682 |
October 29, 2016 | July 30, 2016 | ||||||
Property and equipment, net: | |||||||
United States | $ | 2,847 | $ | 2,822 | |||
International | 652 | 684 | |||||
Total | $ | 3,499 | $ | 3,506 |
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