Cisco 2014 Annual Report Download - page 66

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Interest and Other Income (Loss), Net
Interest Income (Expense), Net The following table summarizes interest income and interest expense (in millions):
Years Ended July 26, 2014 July 27, 2013
Variance
in Dollars July 27, 2013 July 28, 2012
Variance
in Dollars
Interest income ............................. $ 691 $ 654 $37 $ 654 $ 650 $ 4
Interest expense ............................. (564) (583) 19 (583) (596) 13
Interest income (expense), net .............. $ 127 $ 71 $56 $ 71 $ 54 $17
Fiscal 2014 Compared with Fiscal 2013
Interest income increased in fiscal 2014 as compared with fiscal 2013 due to the increase in our portfolio of cash, cash
equivalents, and fixed income investments. The decrease in interest expense in fiscal 2014 as compared with the prior fiscal
year was primarily attributable to the favorable impact of incremental interest rate swaps entered into during fiscal 2014 and
the fourth quarter of fiscal 2013. This decrease was partially offset by additional interest expense due to the increase in long-
term debt in fiscal 2014.
Fiscal 2013 Compared with Fiscal 2012
Interest income increased slightly in fiscal 2013 as compared with prior fiscal year due primarily to increased interest income
earned on financing receivables, partially offset by lower interest income from our portfolio of cash, cash equivalents, and
fixed income investments as a result of lower average interest rates. The decrease in interest expense in fiscal 2013 as
compared with fiscal 2012 was attributable to the favorable impact of interest rate swaps and lower expense on our floating-
rate notes as the benchmark London InterBank Offered Rate (LIBOR) decreased.
Other Income (Loss), Net The components of other income (loss), net, are summarized as follows (in millions):
Years Ended July 26, 2014 July 27, 2013
Variance
in Dollars July 27, 2013 July 28, 2012
Variance
in Dollars
Gains (losses) on investments, net:
Publicly traded equity securities ........... $253 $ 17 $236 $ 17 $ 43 $(26)
Fixed income securities .................. 47 31 16 31 58 (27)
Total available-for-sale investments ........ 300 48 252 48 101 (53)
Privately held companies ................. (60) (57) (3) (57) (70) 13
Net gains (losses) on investments ...... 240 (9) 249 (9) 31 (40)
Other gains (losses), net ...................... 3(31) 34 (31) 9 (40)
Other income (loss), net .......... $243 $(40) $283 $(40) $ 40 $(80)
Fiscal 2014 Compared with Fiscal 2013
The increase in total net gains on available-for-sale investments in fiscal 2014 compared with fiscal 2013 was primarily
attributable to higher gains on publicly traded equity securities in the current period as a result of market conditions and the
timing of sales of these securities.
The change in net losses on investments in privately held companies for the fiscal 2014 as compared with fiscal 2013 was
primarily due to an increase of $40 million in our proportional share of losses from our VCE joint venture, partially offset by
higher realized gains from various investments in privately held companies.
The change in other gains (losses), net in fiscal 2014 as compared with fiscal 2013 was primarily due to higher gains on equity
derivative instruments and lower donation expenses, partially offset by unfavorable foreign exchange impacts in fiscal 2014.
Fiscal 2013 Compared with Fiscal 2012
The decrease in net gains on available-for-sale investments in fiscal 2013 compared with fiscal 2012 was attributable to lower
gains on fixed income and publicly traded equity securities in fiscal 2013 as a result of market conditions and the timing of
sales of these securities. For fiscal 2013 as compared with fiscal 2012, the change in net losses on investments in privately
held companies was primarily due to higher realized gains from various private investments, partially offset by an increase of
$23 million in our proportional share of losses from our VCE joint venture. The change in other gains (losses), net for fiscal
2013 as compared with fiscal 2012, was primarily due to an increase in donations and less favorable foreign exchange impacts
in fiscal 2013.
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