2. Compute the payables period and cash cycle for these two companies in 2015. Which company is more efficient at collecting the cash from a sale? Boeing Payable Turnover COGS Average Payable Payable Period Bombardier Payable Turnover COGS Average Payable Payable Period Cash Cycle Cash Cycle The Boeing Company and Subsidiaries Consolidated Statements of Operations (Dollars in millions, except per share data) Years ended December 31, Sales of products Sales of services Total revenues 2015 $85,255 10,859 96,114 2014 $80,688 10,074 90,762 2013 $76,792 9,831 86,623 Cost of products Cost of services Boeing Capital interest expense Total costs and expenses Income from operating investments, net General and administrative expense Research and development expense, net (Loss)/gain on dispositions, net Earnings from operations Other (loss)/income, net Interest and debt expense Earnings before income taxes Income tax expense Net earnings from continuing operations Net loss on disposal of discontinued operations, net of taxes of $0, $0, $0 Net earnings (73,446) (8,578) (64) (82,088) 14,026 274 (3,525) (3,331) (1) 7,443 (13) (275) 7,155 (1,979) 5,176 (68,551) (65,640) (8,132) (7,553) (69) (75) (76,752) (73,268) 14,010 13,355 287 214 (3,767) (3,956) (3,047) (3,071) (10) 20 7,473 6,562 (3) 56 (333) (386) 7,137 6,232 (1,691) (1,646) 5,446 4,586 (1) $4,585 $5,176 $5,446 Basic earnings per share $7.52 $7.47 $6.03 $7.38 $5.96 Diluted earnings per share $7.44 See Notes to the Consolidated Financial Statements on pages 54 - 109. The Boeing Company and Subsidiaries Consolidated Statements of Comprehensive Income 2014 $5,446 2013 $4,585 (97) (64) (137) (75) 7 (17) (92) (130) (4,612) 6,143 (Dollars in millions) Years ended December 31, 2015 Net earnings $5,176 Other comprehensive income/(loss), net of tax: Currency translation adjustments (92) Unrealized gains on certain investments, net of tax of ($5). $0 and $0 8 Unrealized (lossgain on derivative instruments: Unrealized (loss) arising during period, net of tax of $77, $77, and $42 (140) Reclassification adjustment for loss/(gain) included in net earnings, net of tax of ($43), ($4), and $9 79 Total unrealized loss on derivative instruments, net of tax (61) Defined benefit pension plans & other postretirement benefits: Net actuarial gain/(loss) arising during the period, net of tax of $402, $2,588, and ($3,437) (732) Amortization of actuarial losses included in net periodic pension cost, net of tax of ($570), ($367), and ($849) 1,038 Settlements and curtailments included in net income, net of tax of ($27), ($101), and ($33) 51 Pension and postretirement benefit(cost) related to our equity method investments, net of tax ($2), $15, and ($13) 3 Amortization of prior service cost included in net periodic pension cost, 'net of tax of ($22), ($12), and ($6) Prior service cost arising during the period, net of tax of ($496), $3, and $41 902 Total defined benefit pension plans & other postretirement benefits, net of tax 1,300 Other comprehensive incomel(loss), net of tax 1,155 Comprehensive (lossWincome related to noncontrolling interests (3) Comprehensive income, net of tax $6,328 See Notes to the Consolidated Financial Statements on pages 54 - 109. 661 1,516 180 59 (27) 24 38 21 10 (5) (74) (3,782) (4,009) 10 $1,447 7,678 7,522 9 $12,116 The Boeing Company and Subsidiaries Consolidated Statements of Financial Position 2015 2014 (Dollars in millions, except per share data) December 31, Assets Cash and cash equivalents Short-term and other investments Accounts receivable, net Current portion of customer financing, net Inventories, net of advances and progress billings Total current assets Customer financing, net Property, plant and equipment, net Goodwill Acquired intangible assets, net Deferred income taxes Investments Other assets, net of accumulated amortization of $451 and $479 Total assets Liabilities and equity Accounts payable Accrued liabilities Advances and billings in excess of related costs Short-term debt and current portion of long-term debt Total current liabilities $11,302 750 8,713 212 47,257 68,234 3,358 12,076 5,126 2,657 265 1,284 1,408 $94,408 $11,733 1,359 7,729 190 46,756 67,767 3,371 11,007 5,119 2,869 317 1,154 1,317 $92,921 $10,800 14,014 24,364 1,234 50,412 $10,667 13,462 23,175 929 48,233 BOMBARDIER INC. CONSOLIDATED STATEMENTS OF INCOME For the fiscal years ended December 31 (in millions of U.S. dollars, except per share amounts) Notes 17 2015 $ 18,172 16,199 1,973 1,213 355 (149) 7 35 8 9 - Revenues Cost of sales Gross margin SG&A R&D Share of income of joint ventures and associates Other expense Special items EBIT Financing expense Financing income EBT Income taxes Net loss Attributable to Equity holders of Bombardier Inc. NCI 2014 $ 20,111 17,534 2,577 1,358 347 (89) 38 1,489 (566) 249 (75) (740) 506 $ (1,246) 10 10 5,392 (4,838) 418 (70) (5,186) 154 (5,340) 12 $ $ (5,347) 7 $ (5,340) $ (1,260) 14 $ (1.246) 13 $ EPS (in dollars) Basic and diluted The notes are an integral part of these consolidated financial statements. (2.58) $ (0.74) BOMBARDIER INC. CONSOLIDATED STATEMENTS OF FINANCIAL POSITION As at (in millions of U.S. dollars) December 31 2015 December 31 2014 January 1 2014 Notes $ $ $ 15 16 17 18 19 Assets Cash and cash equivalents Trade and other receivables Inventories Other financial assets Other assets Current assets PP&E Aerospace program tooling Goodwill Deferred income taxes Investments in joint ventures and associates Other financial assets Other assets Non-current assets 20 21 21 2,720 1,473 6,978 450 484 12,105 2,061 3,975 1,978 761 356 870 797 10,798 22,903 2,489 1,538 7,970 530 592 13,119 2,092 6,823 2,127 875 294 1,328 956 14,495 27,614 3,397 1,492 8,234 637 626 14,386 2,066 6,606 2,381 1,231 318 1,568 807 14,977 29,363 12 18 19 $ $ 23 $ 4,216 990 4,089 881 24 17 25 26 Liabilities Trade and other payables Provisions Advances and progress billings in excess of long-term contract inventories Advances on aerospace programs Other financial liabilities Other liabilities Current liabilities Provisions Advances on aerospace programs Long-term debt Retirement benefits Other financial liabilities Other liabilities Non-current liabilities 24 4,040 1,108 1,408 2,002 991 2,274 11,823 918 1,534 8,908 2,159 619 996 15,134 26,957 1,698 3,339 1,010 2,182 13,435 562 1,608 7,627 2,629 602 1,096 14,124 27,559 2,352 3,228 1,009 2,227 13,786 584 1,688 6,988 2,161 717 990 13,128 26,914 27 22 25 26 Equity (deficit) Attributable to equity holders of Bombardier Inc. Attributable to NCI (4,067) 13 (4,054) 22,903 42 13 55 27,614 2,426 23 2,449 29,363 $ $ BOMBARDIER INC. CONSOLIDATED STATEMENTS OF CASH FLOWS For the fiscal years ended December 31 (in millions of U.S. dollars) Notes 2015 2014 $ (5,340) $ (1,246) 4,300 20, 21 9, 20, 21 12 8 35 29 9 (3) (149) 417 1,266 354 (3) (89) 2 43 101 2 847 :sts 30 (1,879) (1,982) 18 Operating activities Net loss Non-cash items Amortization Impairment charges on PP&E and intangible assets Deferred income taxes Gains on disposals of PP&E and intangible assets Share of income of joint ventures and associates Share-based expense Loss on repurchase of long-term debt Dividends received from joint ventures and associates Net change in non-cash balances Cash flows from operating activities Investing activities Additions to PP&E and intangible assets Proceeds from disposals of PP&E and intangible assets Proceeds from investment in financing structure Additions to AFS investments in securities Proceeds from disposal of AFS investments in securities Net proceeds from disposal of a business) Other Cash flows from investing activities Financing activities Net proceeds from issuance of long-term debt Repayments of long-term debt Dividends paid Purchase of Class B shares held in trust under the RSU plan Net proceeds from issuance of shares Other Cash flows from financing activities Effect of exchange rates on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year Supplemental information Cash paid for Interest 150 (64) 54 (53) 53 25 (12) (1,734) (17) (1,956) 27 27 1,820 (1,334) (182) 28 2,218 (831) (19) (9) 822 (132) 2,049 (104) 231 2,489 2,720 66 370 (169) (908) 3,397 2,489 $ $ 427 TA 354 BOMBARDIER INC. CONSOLIDATED STATEMENTS OF INCOME For the fiscal years ended December 31 (in millions of U.S. dollars, except per share amounts) Notes 17 2015 $ 18,172 16,199 1,973 1,213 355 (149) 7 35 8 9 - Revenues Cost of sales Gross margin SG&A R&D Share of income of joint ventures and associates Other expense Special items EBIT Financing expense Financing income EBT Income taxes Net loss Attributable to Equity holders of Bombardier Inc. NCI 2014 $ 20,111 17,534 2,577 1,358 347 (89) 38 1,489 (566) 249 (75) (740) 506 $ (1,246) 10 10 5,392 (4,838) 418 (70) (5,186) 154 (5,340) 12 $ $ (5,347) 7 $ (5,340) $ (1,260) 14 $ (1.246) 13 $ EPS (in dollars) Basic and diluted The notes are an integral part of these consolidated financial statements. (2.58) $ (0.74) 2. Compute the payables period and cash cycle for these two companies in 2015. Which company is more efficient at collecting the cash from a sale? Boeing Payable Turnover COGS Average Payable Payable Period Bombardier Payable Turnover COGS Average Payable Payable Period Cash Cycle Cash Cycle The Boeing Company and Subsidiaries Consolidated Statements of Operations (Dollars in millions, except per share data) Years ended December 31, Sales of products Sales of services Total revenues 2015 $85,255 10,859 96,114 2014 $80,688 10,074 90,762 2013 $76,792 9,831 86,623 Cost of products Cost of services Boeing Capital interest expense Total costs and expenses Income from operating investments, net General and administrative expense Research and development expense, net (Loss)/gain on dispositions, net Earnings from operations Other (loss)/income, net Interest and debt expense Earnings before income taxes Income tax expense Net earnings from continuing operations Net loss on disposal of discontinued operations, net of taxes of $0, $0, $0 Net earnings (73,446) (8,578) (64) (82,088) 14,026 274 (3,525) (3,331) (1) 7,443 (13) (275) 7,155 (1,979) 5,176 (68,551) (65,640) (8,132) (7,553) (69) (75) (76,752) (73,268) 14,010 13,355 287 214 (3,767) (3,956) (3,047) (3,071) (10) 20 7,473 6,562 (3) 56 (333) (386) 7,137 6,232 (1,691) (1,646) 5,446 4,586 (1) $4,585 $5,176 $5,446 Basic earnings per share $7.52 $7.47 $6.03 $7.38 $5.96 Diluted earnings per share $7.44 See Notes to the Consolidated Financial Statements on pages 54 - 109. The Boeing Company and Subsidiaries Consolidated Statements of Comprehensive Income 2014 $5,446 2013 $4,585 (97) (64) (137) (75) 7 (17) (92) (130) (4,612) 6,143 (Dollars in millions) Years ended December 31, 2015 Net earnings $5,176 Other comprehensive income/(loss), net of tax: Currency translation adjustments (92) Unrealized gains on certain investments, net of tax of ($5). $0 and $0 8 Unrealized (lossgain on derivative instruments: Unrealized (loss) arising during period, net of tax of $77, $77, and $42 (140) Reclassification adjustment for loss/(gain) included in net earnings, net of tax of ($43), ($4), and $9 79 Total unrealized loss on derivative instruments, net of tax (61) Defined benefit pension plans & other postretirement benefits: Net actuarial gain/(loss) arising during the period, net of tax of $402, $2,588, and ($3,437) (732) Amortization of actuarial losses included in net periodic pension cost, net of tax of ($570), ($367), and ($849) 1,038 Settlements and curtailments included in net income, net of tax of ($27), ($101), and ($33) 51 Pension and postretirement benefit(cost) related to our equity method investments, net of tax ($2), $15, and ($13) 3 Amortization of prior service cost included in net periodic pension cost, 'net of tax of ($22), ($12), and ($6) Prior service cost arising during the period, net of tax of ($496), $3, and $41 902 Total defined benefit pension plans & other postretirement benefits, net of tax 1,300 Other comprehensive incomel(loss), net of tax 1,155 Comprehensive (lossWincome related to noncontrolling interests (3) Comprehensive income, net of tax $6,328 See Notes to the Consolidated Financial Statements on pages 54 - 109. 661 1,516 180 59 (27) 24 38 21 10 (5) (74) (3,782) (4,009) 10 $1,447 7,678 7,522 9 $12,116 The Boeing Company and Subsidiaries Consolidated Statements of Financial Position 2015 2014 (Dollars in millions, except per share data) December 31, Assets Cash and cash equivalents Short-term and other investments Accounts receivable, net Current portion of customer financing, net Inventories, net of advances and progress billings Total current assets Customer financing, net Property, plant and equipment, net Goodwill Acquired intangible assets, net Deferred income taxes Investments Other assets, net of accumulated amortization of $451 and $479 Total assets Liabilities and equity Accounts payable Accrued liabilities Advances and billings in excess of related costs Short-term debt and current portion of long-term debt Total current liabilities $11,302 750 8,713 212 47,257 68,234 3,358 12,076 5,126 2,657 265 1,284 1,408 $94,408 $11,733 1,359 7,729 190 46,756 67,767 3,371 11,007 5,119 2,869 317 1,154 1,317 $92,921 $10,800 14,014 24,364 1,234 50,412 $10,667 13,462 23,175 929 48,233 BOMBARDIER INC. CONSOLIDATED STATEMENTS OF INCOME For the fiscal years ended December 31 (in millions of U.S. dollars, except per share amounts) Notes 17 2015 $ 18,172 16,199 1,973 1,213 355 (149) 7 35 8 9 - Revenues Cost of sales Gross margin SG&A R&D Share of income of joint ventures and associates Other expense Special items EBIT Financing expense Financing income EBT Income taxes Net loss Attributable to Equity holders of Bombardier Inc. NCI 2014 $ 20,111 17,534 2,577 1,358 347 (89) 38 1,489 (566) 249 (75) (740) 506 $ (1,246) 10 10 5,392 (4,838) 418 (70) (5,186) 154 (5,340) 12 $ $ (5,347) 7 $ (5,340) $ (1,260) 14 $ (1.246) 13 $ EPS (in dollars) Basic and diluted The notes are an integral part of these consolidated financial statements. (2.58) $ (0.74) BOMBARDIER INC. CONSOLIDATED STATEMENTS OF FINANCIAL POSITION As at (in millions of U.S. dollars) December 31 2015 December 31 2014 January 1 2014 Notes $ $ $ 15 16 17 18 19 Assets Cash and cash equivalents Trade and other receivables Inventories Other financial assets Other assets Current assets PP&E Aerospace program tooling Goodwill Deferred income taxes Investments in joint ventures and associates Other financial assets Other assets Non-current assets 20 21 21 2,720 1,473 6,978 450 484 12,105 2,061 3,975 1,978 761 356 870 797 10,798 22,903 2,489 1,538 7,970 530 592 13,119 2,092 6,823 2,127 875 294 1,328 956 14,495 27,614 3,397 1,492 8,234 637 626 14,386 2,066 6,606 2,381 1,231 318 1,568 807 14,977 29,363 12 18 19 $ $ 23 $ 4,216 990 4,089 881 24 17 25 26 Liabilities Trade and other payables Provisions Advances and progress billings in excess of long-term contract inventories Advances on aerospace programs Other financial liabilities Other liabilities Current liabilities Provisions Advances on aerospace programs Long-term debt Retirement benefits Other financial liabilities Other liabilities Non-current liabilities 24 4,040 1,108 1,408 2,002 991 2,274 11,823 918 1,534 8,908 2,159 619 996 15,134 26,957 1,698 3,339 1,010 2,182 13,435 562 1,608 7,627 2,629 602 1,096 14,124 27,559 2,352 3,228 1,009 2,227 13,786 584 1,688 6,988 2,161 717 990 13,128 26,914 27 22 25 26 Equity (deficit) Attributable to equity holders of Bombardier Inc. Attributable to NCI (4,067) 13 (4,054) 22,903 42 13 55 27,614 2,426 23 2,449 29,363 $ $ BOMBARDIER INC. CONSOLIDATED STATEMENTS OF CASH FLOWS For the fiscal years ended December 31 (in millions of U.S. dollars) Notes 2015 2014 $ (5,340) $ (1,246) 4,300 20, 21 9, 20, 21 12 8 35 29 9 (3) (149) 417 1,266 354 (3) (89) 2 43 101 2 847 :sts 30 (1,879) (1,982) 18 Operating activities Net loss Non-cash items Amortization Impairment charges on PP&E and intangible assets Deferred income taxes Gains on disposals of PP&E and intangible assets Share of income of joint ventures and associates Share-based expense Loss on repurchase of long-term debt Dividends received from joint ventures and associates Net change in non-cash balances Cash flows from operating activities Investing activities Additions to PP&E and intangible assets Proceeds from disposals of PP&E and intangible assets Proceeds from investment in financing structure Additions to AFS investments in securities Proceeds from disposal of AFS investments in securities Net proceeds from disposal of a business) Other Cash flows from investing activities Financing activities Net proceeds from issuance of long-term debt Repayments of long-term debt Dividends paid Purchase of Class B shares held in trust under the RSU plan Net proceeds from issuance of shares Other Cash flows from financing activities Effect of exchange rates on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year Supplemental information Cash paid for Interest 150 (64) 54 (53) 53 25 (12) (1,734) (17) (1,956) 27 27 1,820 (1,334) (182) 28 2,218 (831) (19) (9) 822 (132) 2,049 (104) 231 2,489 2,720 66 370 (169) (908) 3,397 2,489 $ $ 427 TA 354 BOMBARDIER INC. CONSOLIDATED STATEMENTS OF INCOME For the fiscal years ended December 31 (in millions of U.S. dollars, except per share amounts) Notes 17 2015 $ 18,172 16,199 1,973 1,213 355 (149) 7 35 8 9 - Revenues Cost of sales Gross margin SG&A R&D Share of income of joint ventures and associates Other expense Special items EBIT Financing expense Financing income EBT Income taxes Net loss Attributable to Equity holders of Bombardier Inc. NCI 2014 $ 20,111 17,534 2,577 1,358 347 (89) 38 1,489 (566) 249 (75) (740) 506 $ (1,246) 10 10 5,392 (4,838) 418 (70) (5,186) 154 (5,340) 12 $ $ (5,347) 7 $ (5,340) $ (1,260) 14 $ (1.246) 13 $ EPS (in dollars) Basic and diluted The notes are an integral part of these consolidated financial statements. (2.58) $ (0.74)