Cisco Systems (CSCO) CEO Chuck Robbins said that repatriation of foreign earnings is the most important part of the newly passed tax reform.
“We were very pleased to see tax reform get passed,” Robbins told Yahoo Finance’s Andy Serwer and Jen Rogers at the World Economic Forum in Davos. “It was impressive how rapidly it got passed, which provides some optimism for me on how soon we could potentially get past some of the other challenges that we face right now. But I think in the context for us, repatriation was the most important portion of it.”
Cisco has one of the biggest hoards of overseas cash. Of Cisco’s $70.5 billion in cash and marketable securities, about $67.5 billion, or 95.8% is held overseas, according to data compiled by Bloomberg.
Under the new tax law, companies with overseas cash will pay a 15.5% effective tax rate and an 8% effective tax rate on illiquid assets held overseas.
Cisco is scheduled to release its quarterly earnings in mid-February where management will discuss its plans of what it will do with its capital following tax reform.
“We’ll continue executing against our capital return strategy, we’ll continue looking at strategic M&A. We’re going to look at investments in R&D. We’re going to look at investments in our people. And there are lots of other things that we’re considering right now. And we’re going to probably talk more about that in a couple of weeks,” Robbins said.
Julia La Roche is a finance reporter at Yahoo Finance. Follow her on Twitter.