Cisco 2011 Annual Report Download - page 119
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The effects of the Company’s cash flow hedging instruments on other comprehensive income (OCI) and the
Consolidated Statements of Operations are summarized as follows (in millions):
GAINS (LOSSES) RECOGNIZED
IN OCI ON DERIVATIVES FOR
THE YEARS ENDED (EFFECTIVE PORTION)
GAINS (LOSSES) RECLASSIFIED FROM
AOCI INTO INCOME FOR
THE YEARS ENDED (EFFECTIVE PORTION)
Derivatives Designated as Cash Flow
Hedging Instruments
July 30,
2011
July 31,
2010
July 25,
2009 Line Item in Statements of Operations
July 30,
2011
July 31,
2010
July 25,
2009
Foreigncurrencyderivatives ....
$87 $ 33 $(116) Operating expenses ......... $89 $ (1) $ (95)
Cost of sales-service ........ 17 — (13)
Interest rate derivatives ....... —23 (42) Interest expense ............ 2——
Other derivatives ............ —— (2) Operating expenses ......... —— (2)
Total ..................
$87 $ 56 $(160) $108 $ (1) $(110)
During the years ended July 30, 2011, July 31, 2010, and July 25, 2009, the amounts recognized in earnings on
derivative instruments designated as cash flow hedges related to the ineffective portion were not material, and the
Company did not exclude any component of the changes in fair value of the derivative instruments from the
assessment of hedge effectiveness. As of July 30, 2011, the Company estimates that approximately $18 million
of net derivative gains related to its cash flow hedges included in AOCI will be reclassified into earnings within
the next 12 months.
The effect on the Consolidated Statements of Operations of derivative instruments designated as fair value
hedges and the underlying hedged items is summarized as follows (in millions):
GAINS (LOSSES) ON
DERIVATIVES
INSTRUMENTS FOR THE
YEARS ENDED
GAINS (LOSSES)
RELATED TO HEDGED
ITEMS FOR THE YEARS
ENDED
Derivatives Designated as Fair Value
Hedging Instruments
Line Item in Statements of
Operations
July 30,
2011
July 31,
2010
July 25,
2009
July 30,
2011
July 31,
2010
July 25,
2009
Equity derivatives ......... Other income (loss), net $— $3 $97 $— $ (3) $ (99)
Interest rate derivatives ..... Other income (loss), net —— (7) ——10
Interest rate derivatives ..... Interest expense 74 72 — (77) (77) —
Total ............... $74 $75 $90 $ (77) $ (80) $ (89)
The effect on the Consolidated Statements of Operations of derivative instruments not designated as hedges is
summarized as follows (in millions):
GAINS (LOSSES) FOR THE
YEARS ENDED
Derivatives Not Designated as Hedging Instruments Line Item in Statements of Operations
July 30,
2011
July 31,
2010
July 25,
2009
Foreign currency derivatives ............Other income (loss), net $264 $(100) $ 1
Total return swaps-deferred compensation . .
Operating expenses 33 18 (14)
Equity derivatives .....................Other income (loss), net 25 12 11
Total ........................... $322 $ (70) $ (2)
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