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As Washington prepares to rethink the federal tax code and international trade law this year, Calcbench decided now might be a good time to examine where the revenues for large, global businesses in the S&P 500 come from.

Not surprisingly, the answer to that question is highly diverse. Some companies get almost all their revenue from international business; others get almost all their revenue from the U.S. market. Overall, however, international business accounted for a substantial portion of total 2015 revenues.

We started by identifying S&P 500 companies that clearly reported 2015 revenue by domestic and international revenue. (Not all companies do; more details on that soon.) We found 274 that fit our criteria.

Total 2015 revenue for that group was $5.96 trillion, and $2.38 trillion of that total—almost exactly 40 percent—came from overseas business. The remaining $3.58 trillion, give or take a few billion dollars, came from the U.S. market.

Within our population of 274 companies, seven had 85 percent or more of their revenue come from overseas sources:

Qualcomm 99.0%
Skyworks Solutions 97.9%
Lam Research Corp. 91.6%
Broadcom 88.9%
Qorvo 88.3%
Texas Instruments 87.6%
Nvidia Corp. 87.2%

At the other end of the scale, eight companies had less than 5 percent of their revenue from the overseas market:

Duke Energy4.6%
AT&T4.5%
Kinder Morgan4.2%
Host Hotels & Resorts4.1%
Cardinal Health3.9%
Williams Cos.1.5%
Martin Marietta Materials1.3%
Vulcan Materials0.3%

For all 274 companies, the median percentage of non-U.S. revenue was 42 percent. In dollar terms, the median overseas revenue was $3.29 billion.

Groups and Sub-Groups

Then we got fancy, and divided our population into quintiles of 55 companies each and ranked them by percentage of overseas revenue. We were curious: what’s the gap between companies that depend on foreign revenue a lot (those in the top quintile) and those that don’t (those in the bottom quintile)?

The pattern looks like this:

Avg. RevenuePct. Non-US.
1st Quintile$19,544,805,03710.8%
2nd Quintile$31,306,676,30928.3%
3rd Quintile$15,275,006,63641.2%
4th Quintile$24,306,984,16454.1%
5th Quintile$18,379,022,67370.5%

What’s interesting is that the first and fifth quintile are almost equal in total dollar revenue and average revenue per company—but they have radically different dependence on overseas markets.

Then we re-sorted the whole population by total annual revenue, and measured the average percentage of revenue from overseas sources for each quintile. We found this:

Avg. Revenue per Co.Pct. Non-US.
1st Quintile$1,633,796,00040.5%
2nd Quintile$3,095,489,96440.4%
3rd Quintile$5,513,719,83640.1%
4th Quintile$9,429,325,65546.7%
5th Quintile$45,461,123,03638.3%

In other words, no matter how large or small the business in question, you and your peer group depend quite a bit on overseas revenue—never a majority of your sales, but a large minority of them. So if the Trump Administration does force through a tariff regime, and that move triggers retaliatory tariffs by other nations, companies all over the S&P 500 could take quite a punch to the income statement.

Caveats

We should also add that lots of companies, both in the S&P 500 and outside it, do have foreign revenues but don’t disclose them as such. For example, some companies report some of their revenue by geographic markets, so we can identify U.S. revenue; but also report other lines of revenue by product rather than geography. How much of those other product revenues come from the United States alone? We can’t tell.

Other companies don’t disclose foreign revenue at all; they might report revenues by operating segment, for example. That’s perfectly permissible under SEC rules and Generally Accepted Accounting Principles, which only require that companies disclose operating segments that are discrete business units and the reporting make logical sense to investors. Usually that’s by geography, but not always.

In other words, you can do a whole lot more digging into Calcbench to identify more precise groups of filers and their dependence on foreign revenues. Be sure to read our previous posts on how to study segment reporting, as well as an example of how to find revenue and assets disclosed by specific countries (in this case, China).

Then strap yourself in, dive into our databases, and prepare for a wild ride in Washington this year.


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