Cisco 2014 Annual Report Download - page 109

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(b) Long-Term Debt
The following table summarizes the Company’s long-term debt (in millions, except percentages):
July 26, 2014 July 27, 2013
Maturity Date Amount Effective Rate Amount Effective Rate
Senior notes:
Floating-rate notes:
Three-month LIBOR plus 0.25% ..... March 14, 2014 $— — $ 1,250 0.62%
Three-month LIBOR plus 0.05% ..... September 3, 2015 (1) 850 0.35% ——
Three-month LIBOR plus 0.28% ..... March 3, 2017 (1) 1,000 0.56% ——
Three-month LIBOR plus 0.50% ..... March 1, 2019 (1) 500 0.78% ——
Fixed-rate notes:
1.625% ......................... March 14, 2014 —— 2,000 0.64%
2.90% .......................... November 17, 2014 500 3.11% 500 3.11%
5.50% .......................... February 22, 2016 3,000 3.04% 3,000 3.07%
1.10% .......................... March 3, 2017 (1) 2,400 0.56% ——
3.15% .......................... March 14, 2017 750 0.79% 750 0.84%
4.95% .......................... February 15, 2019 2,000 4.69% 2,000 4.70%
2.125% ......................... March 1, 2019 (1) 1,750 0.77% ——
4.45% .......................... January 15, 2020 2,500 2.98% 2,500 4.15%
2.90% .......................... March 4, 2021 (1) 500 0.93% ——
3.625% ......................... March 4, 2024 (1) 1,000 1.05% ——
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%
Other long-term debt ................... 4 2.39% 21 1.46%
Total ....................... 20,754 16,021
Unaccreted discount ................... (63) (65)
Hedge accounting fair value adjustments . . . 210 245
Total ....................... $20,901 $16,201
Reported as:
Current portion of long-term debt ........ $ 500 $ 3,273
Long-term debt ....................... 20,401 12,928
Total ....................... $20,901 $16,201
(1) In March 2014, the Company issued senior notes for an aggregate principal amount of $8.0 billion.
To achieve its interest rate risk management objectives, the Company entered into interest rate swaps with an aggregate
notional amount of $10.4 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. For
additional information, 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 26, 2014, the Company was in
compliance with all debt covenants.
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