Cisco 2015 Annual Report Download - page 111

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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 25,
2015
July 26,
2014
July 27,
2013
Foreign currency derivatives ........................ Other income (loss), net $ (173) $ 23 $ (74)
Total return swaps—deferred compensation ........ Operating expenses 19 47 61
Equity derivatives .................................. Other income (loss), net 27 34 —
Total .......................................... $ (127) $ 104 $ (13)
The notional amounts of the Company’s outstanding derivatives are summarized as follows (in millions):
July 25, 2015 July 26, 2014
Derivatives designated as hedging instruments:
Foreign currency derivatives—cash flow hedges ........................................ $ 1,201 $ 1,618
Interest rate derivatives ................................................................. 11,400 10,400
Net investment hedging instruments ..................................................... 192 345
Equity derivatives ...................................................................... —238
Derivatives not designated as hedging instruments:
Foreign currency derivatives ............................................................ 2,023 2,528
Total return swaps—deferred compensation ............................................. 462 428
Total ................................................................................. $ 15,278 $ 15,557
(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):
GROSS AMOUNTS OFFSET IN THE
CONSOLIDATED BALANCE SHEET
GROSS AMOUNTS NOT OFFSET IN THE
CONSOLIDATED BALANCE SHEET
BUT WITH LEGAL RIGHTS TO OFFSET
July 25, 2015
Gross Amounts
Recognized
Gross Amounts
Offset
Net Amounts
Presented
Gross Derivative
Amounts Cash Collateral Net Amount
Derivatives assets .................. $ 218 $ — $ 218 $ (12) $ (124) $ 82
Derivatives liabilities .............. $ 12 $ — $ 12 $ (12) $ — $ —
GROSS AMOUNTS OFFSET IN THE
CONSOLIDATED BALANCE SHEET
GROSS AMOUNTS NOT OFFSET IN THE
CONSOLIDATED BALANCE SHEET
BUT WITH LEGAL RIGHTS TO OFFSET
July 26, 2014
Gross Amounts
Recognized
Gross Amounts
Offset
Net Amounts
Presented
Gross Derivative
Amounts Cash Collateral Net Amount
Derivatives assets ...................$ 160 $ — $ 160 $ (39) $ (60) $ 61
Derivatives liabilities ...............$ 67 $ — $ 67 $ (39) $ (1) $ 27
103