Cisco 2014 Annual Report Download - page 112

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July 26, 2014 July 27, 2013
Derivatives designated as hedging instruments:
Foreign currency derivatives—cash flow hedges ..................................... $ 1,618 $ 1,885
Interest rate derivatives ......................................................... 10,400 5,250
Net investment hedging instruments ............................................... 345 662
Equity derivatives ............................................................. 238 1,098
Derivatives not designated as hedging instruments:
Foreign currency derivatives ..................................................... 2,528 3,739
Total return swaps—deferred compensation ......................................... 428 358
Total .................................................................... $15,557 $12,992
(b) Offsetting of Derivative Instruments
The Company presents its derivative instruments at gross fair values in the Consolidated Balance Sheets. However, the
Company’s master netting and other similar arrangements with the respective counterparties allow for net settlement under
certain conditions, which are designed to reduce credit risk by permitting net settlement with the same counterparty. To further
limit credit risk, the Company also enters into collateral security arrangements related to certain derivative instruments
whereby cash is posted as collateral between the counterparties based on the fair market value of the derivative instrument.
Information related to these offsetting arrangements is summarized as follows (in millions):
OFFSETTING OF DERIVATIVE ASSETS
Gross Amounts Offset in Consolidated Balance
Sheets
Gross Amounts Not Offset in the Consolidated
Balance Sheets, but with Legal Rights to Offset
July 26, 2014
Gross Amount
of Recognized
Assets
Gross Amounts
Offset in
Consolidated
Balance Sheets
Net Amount
Presented on
Consolidated
Balance Sheets
Gross Derivative
Amounts with
Legal Rights to
Offset
Cash Collateral
Received Net Amount
Derivatives ...................... $160 $ — $160 $(39) $(60) $61
OFFSETTING OF DERIVATIVE LIABILITIES
Gross Amounts Offset in Consolidated Balance
Sheets
Gross Amounts Not Offset in the Consolidated
Balance Sheets, but with Legal Rights to Offset
July 26, 2014
Gross Amount
of Recognized
Liabilities
Gross Amounts
Offset in
Consolidated
Balance Sheets
Net Amount
Presented on
Consolidated
Balance Sheets
Gross Derivative
Amounts with
Legal Rights to
Offset
Cash Collateral
Pledged Net Amount
Derivatives ...................... $67 $ — $67 $(39) $(1) $27
OFFSETTING OF DERIVATIVE ASSETS
Gross Amounts Offset in Consolidated Balance
Sheets
Gross Amounts Not Offset in the Consolidated
Balance Sheets, but with Legal Rights to Offset
July 27, 2013
Gross Amount
of Recognized
Assets
Gross Amounts
Offset in
Consolidated
Balance Sheets
Net Amount
Presented on
Consolidated
Balance Sheets
Gross Derivative
Amounts with
Legal Rights to
Offset
Cash Collateral
Received Net Amount
Derivatives ...................... $182 $ — $182 $(120) $ — $62
OFFSETTING OF DERIVATIVE LIABILITIES
Gross Amounts Offset in Consolidated Balance
Sheets
Gross Amounts Not Offset in the Consolidated
Balance Sheets, but with Legal Rights to Offset
July 27, 2013
Gross Amount
of Recognized
Liabilities
Gross Amounts
Offset in
Consolidated
Balance Sheets
Net Amount
Presented on
Consolidated
Balance Sheets
Gross Derivative
Amounts with
Legal Rights to
Offset
Cash Collateral
Pledged Net Amount
Derivatives ...................... $171 $ — $171 $(120) $ — $51
104