Cisco 2013 Annual Report Download - page 110

(b) Long-Term Debt
The following table summarizes the Company’s long-term debt (in millions, except percentages):
July 27, 2013 July 28, 2012
Amount Effective Rate Amount Effective Rate
Senior notes:
Floating-rate notes, due 2014 ...................... $ 1,250 0.62% $ 1,250 0.81%
1.625% fixed-rate notes, due 2014 .................. 2,000 0.64% 2,000 0.84%
2.90% fixed-rate notes, due 2014 ................... 500 3.11% 500 3.11%
5.50% fixed-rate notes, due 2016 ................... 3,000 3.07% 3,000 3.16%
3.15% fixed-rate notes, due 2017 ................... 750 0.84% 750 1.03%
4.95% fixed-rate notes, due 2019 ................... 2,000 4.70% 2,000 5.08%
4.45% fixed-rate notes, due 2020 ................... 2,500 4.15% 2,500 4.50%
5.90% fixed-rate notes, due 2039 ................... 2,000 6.11% 2,000 6.11%
5.50% fixed-rate notes, due 2040 ................... 2,000 5.67% 2,000 5.67%
Other long-term debt ................................. 21 1.46% 10 0.19%
Total ..................................... 16,021 16,010
Unaccreted discount ................................. (65) (70)
Hedge accounting fair value adjustments ................. 245 357
Total ..................................... $16,201 $16,297
Reported as:
Current portion of long-term debt ....................... $ 3,273 $—
Long-term debt ..................................... 12,928 16,297
Total ..................................... $16,201 $16,297
To achieve its interest rate risk management objectives, the Company has entered into interest rate swaps with an aggregate
notional amount of $5.25 billion designated as fair value hedges of certain of its fixed-rate senior notes. In effect, these swaps
convert the fixed interest rates of the fixed-rate notes to floating interest rates based on the London InterBank Offered Rate
(LIBOR). The gains and losses related to changes in the fair value of the interest rate swaps substantially offset changes in the
fair value of the hedged portion of the underlying debt that are attributable to the changes in market interest rates. See Note 11.
The effective rates for the fixed-rate debt include the interest on the notes, the accretion of the discount, and, if applicable,
adjustments related to hedging. Interest is payable semiannually on each class of the senior fixed-rate notes and payable
quarterly on the floating-rate notes. Each of the senior fixed-rate notes is redeemable by the Company at any time, subject to a
make-whole premium.
The senior notes rank at par with the commercial paper notes that may be issued in the future pursuant to the Company’s short-
term debt financing program, as discussed above under “(a) Short-Term Debt.” As of July 27, 2013, the Company was in
compliance with all debt covenants.
Future principal payments for long-term debt as of July 27, 2013 are summarized as follows (in millions):
Fiscal Year Amount
2014 ........................................................ $ 3,260
2015 ........................................................ 507
2016 ........................................................ 3,003
2017 ........................................................ 751
2018 ........................................................ —
Thereafter .................................................... 8,500
Total .................................................... $16,021
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