1.
Cisco Systems CSCO FY2016 (millions)
Product is 75% of Rev, and Americas are 60% of Rev. Assume these are constant,
and that U.S. has 85% of 'Americas' business: .75*.6*.85= .38. Cost of Product is 70M.
Assume 10% is labor. Cisco has a small additional income of $260M added to Ops.
Tariff-TaxNumbers:foreign 4 49247 18287 7 12920 2181 865 0.38 0.3 0.35 0.15 20
2.
Illumina (ILMN) 2015 (results in percent, %)
Assume factory is in China, and assume labor expense of 7% of Cost of Product Revenue
which is 22.1% of revenue: Total labor expense is 0.07*0.221 = 1.55% of revenue.
54% of revenue is from the U.S. So, assume this is the percentage of labor to be moved to the U.S.
Fed income tax was $106,062k, 4.77% of revenue. In this case, U.S. prices would need to rise
maybe 3% to recover lost income due to moving the factory to the U.S. even with a 15% Federal income tax rate.
Tariff-TaxNumbers:foreign 4 100 30.2 1.55 26.3 5.7 4.77 0.54 0.3 0.35 0.15 20
3.
Res Med RMD (millions)
Since labor rates are about the same in Australia and the U.S., Operations results are not dependant on labor in a move of production to the U.S.
Tariff-TaxNumbers:foreign 20 1838 722 36 439 87 24 0 0.1 0.35 0.15 20