need help with required 1-3.

appendix a at the bottom

AA 09-3 Global Analysis LO P3 Review Samsung's financial statements in Appendix A and identify its () total assets as of December 31, 2017, and December 31, 2016. and (b) operating profit for the year ended December 31, 2017 Required 1. Assume Samsung's target Income is 12% of average assets. Compute Samsung's residual income for 2017 using operating profit (in millions of Korean won). 2. Compute Samsung's return on investment (in percent) for 2017 using operating profit (Round your answers to 2 decimal places.) 3. Compute Apple's retum on investment fin percent) for fiscal 2017 using operating income (from Appendix A). (Round your answers to 2 decimal places.) 4. Using the answers for parts 2 and 3 which company (Samsung or Apple) had the higher return on investment? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Assume Samsung's target income is 12% of average assets. Compute Samsung's residual income for 2017 using operating profit (in millions of Korean Won) w me 1. Assume Samsung's target income is 12% of average assets. Compute Samsung's residual income for 2017 using operating profit (in millions of Korean won). 2. Compute Samsung's return on investment (in percent) for 2017 using operating profit. (Round your answers to 2 decimal places.) 3. Compute Apple's return on investment in percent) for fiscal 2017 using operating income (from Appendix A). (Round your answers to 2 decimal places.) 4. Using the answers for parts 2 and 3 which company (Samsung or Apple) had the higher return on investment? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required a Required 4 Assume Samsung's target income is 12% of average assets. Compute Samsung's residual income for 2017 using operating profit (in millions of Korean won). Samsung's residual income Required 2 > 1. Assume Samsung's target income is 12% of average assets. Compute Samsung's residual income for 2017 using operating profit (in millions of Korean won) 2. Compute Samsung's return on investment (in percent) for 2017 using operating profit. (Round your answers to 2 decimal places.) 3. Compute Apple's return on investment (in percent) for fiscal 2017 using operating income (from Appendix A) (Round your answers to 2 decimal places.) 4. Using the answers for parts 2 and 3. which company (Samsung or Apple) had the higher return on investment? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Compute Samsung's return on investment (in percent) for 2017 using operating profit. (Round your answers to 2 decimal places Samsung's return on investment (in percent) % 1. Assume Samsung's target income is 12% of average assets. Compute Samsung's residual income for 2017 using operating profit fin millions of Korean won). 2. Compute Samsung's return on investment (in percent) for 2017 using operating profit. (Round your answers to 2 decimal places.) 3. Compute Apple's return on investment (in percent) for fiscal 2017 using operating income (from Appendix A) (Round your answers to 2 decimal places.) 4. Using the answers for parts 2 and 3, which company (Samsung or Apple) had the higher return on investment? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Compute Apple's return on investment (in percent) for fiscal 2017 using operating income (from Appendix A). (Round your answers to 2 decimal placen.) Apple's return on investment (in percent) % September 24, 2016 $ Apple Inc. CONSOLIDATED BALANCE SHEETS (In millions, except number of shares which are reflected in thousands and par value) September 30, 2017 ASSETS Current assets Cash and cash equivalents 20,289 Short-term marketable securities 53,892 Accounts receivable, less allowances of $58 and 553, respectively 17,874 Inventories 4.855 Vendor non-trade receivables 17.799 Other current assets 13.936 Total current assets 128,645 Long-term marketable securities 194,714 Property, plant and equipment, na 33.783 Goodwill 5.712 Acquired intangible assets, net 2.298 Other non-current assets 10.162 Total assets S 375.319 20,484 46,671 15.754 2,132 13,545 8,283 106,869 170.430 27.010 5,414 3.206 8,757 321.686 LIABILITIES AND SHAREHOLDERS' EQUITY $ 49,049 25.744 7.548 11.99 6,90 Current liabilities Accounts payable Acchied expenses Deferred revenue Commercial paper Current portion of long-term dobu Total current Dermed reve, soncurrent Long-term chi Other non-currenties Totes Continents and genees 37,294 32.027 8.00 N.TOS 11.300 7.00 2000 75.422 TXINI 2XL St 100,814 2,836 97,207 40.415 241,272 DO 79,006 2.930 75.427 36,074 193,437 CONTACT US Total current liabilities Deferred revenue, non-current Long-term debt Other non-current liabilities Total linbilities Commitments and contingencies Shareholders' equity Common stock and additional paid-in capital, 50.00001 par value: 12,600,000 shares authorized: 5,126,201 and 5,336,166 shares issued and outstanding, respectively Retained earnings Accumulated other comprehensive income (loss) Total shareholders equity Total liabilities and shareholders equity 35,867 98,330 (150) 134,042 375,319 31.251 96,364 634 128.249 321.686 See accompanying Notes to Consolidated Financial Statements. September 26, 2015 s 233,715 140,089 93,626 Apple Inc. CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except number of shares which are reflected in thousands and per share amounts) Years ended September 30, 2017 September 24, 2016 Net sales $ 229,234 $ 215.639 Cost of sales 141,048 131,376 Gross margin 88,186 84,263 Operating expenses Research and development 11.581 10.045 Selling, general and administrative 15,261 14.194 26,842 24,239 Total operating expenses Operating income 61,344 60,024 Other income (expense), niet 2,745 1,348 Income before provision for income taxes 64.089 61.372 Provision for income taxes 15.738 15.685 Net income 48.351 45.687 8,067 14.329 22.306 711230 1.285 72.515 19.121 53,394 5 S 5 9.27 9.21 8,35 R3 9.28 9.22 Earnings per share Basic Diluted Shares used in computing carnings per share: Basic Diluted Oish dividends declared pet share 5.217.242 5.251.6092 240 3,470.820 550R 2 IN 3.733.21 5.793,000 10 S s See accompanying Notes to Consolidated Financial Statements September 26, 2015 Apple Inc. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in mo Years ended September 2012 September 24, 2016 Ner cond N153 Other compuchensive income Change in foreign traditionnels effects (2) Sectively 20 Apple Inc. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions) Years ended September 30, 2017 September 24, 2016 September 26, 2015 Net income $ 48,351 $ 45,687 S 53,394 Other comprehensive income (loss): Change in forcign currency translation, net of tax effects of S(77), 58 and 5201, respectively 224 75 Change in unrealized gains/losses on derivative instruments: Change in fair value of derivatives, net of tax benefit (expense) of $(478), 5(7) and (441), respectively 1,315 7 2.905 Adjustment for net (gains) fosses realized and included in net income. net of tax expense (bencfit) of $475, 5131 and 5630, respectively (1,477) (741) (3,497) Total change in unrealized pains/losses on derivative instruments, net of tax (162) (734) (592) Change in unrealized gainutosses on marketable securities: Change in fair value of marketable securities, net of tax benefit (expense) of $425, 5(863) and 5264, respectively (782) 1:582 (483) Adjustment for netgains) losses realized and included in net income, net of tax expense (benefit of 535, 5(31) and 5(32), respectively 56 59 Total change in unrealized gainvlouses on marketable securities, net of tax (46) 1.638 (424) Total other comprehensive income (los) (784) 979 (1.427) Total comprehensive income 47.567 51.907 (64) 46.666 See accompanying Notes to Consolidated Financial Statements. Apple Inc. CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (In millions, except number of shares which are reflected in thousands) Accumulated Other Common Stock and Comprehensive Total Additional Paid-In Capital Retained Income Shareholders Shares Amount Earnings (Loss) Equity Balances as of September 27, 2014 5.866,1615 23,313 $ 87,152 s 1.082 S 111.547 Net income 53,394 53,394 Other comprehensive income (los) (1.427) (1.427) Dividends and dividend equivalents declared (11.627) (11.627) Repurchase of common stock (325.032) (36,026) (36,026) Share-based compensation 3,586 3,586 Common stock issued, net of shares withheld for employee taxes 37.624 (231) (609) (840) Tax benefit from cquity awards, including transfer pricing adjustments 748 748 Balances as of September 26, 2015 5.578.753 27,4165 92.284 s (345) S 119.355 Net income 45,687 45.687 Other comprehensive income (los) 979 979 Dividends and dividend equivalents declared (12.188) 12.188) Repurchase of common stock (279,600 (29,000) (29.000 Share-based compensation 4.262 4.262 Common Mock issued, net of shares withheld for employee taxes 37,022 (806 (419) 1.225 Tax benefit from equity awards, including transfer pricing adjustments 379 379 Balances as of September 24, 2016 5.336.1665 31.251 5 96,364 s 634s 128.249 Net income 18,351 18.351 Other comprehensive income (los) (784) 678-61 Dividends and dividend equivalents declared (12.03) (12,803) Repurchase of common stock 246,046) 133.000 (3.7.00 Share-based compensation 4,909 1.900 Common Mickissaed, net of shares withheld for employees 20.531 (913) (581 0.94 Tax benefit from it and including (1,225) 379 634 $ (784) Common stock issued, net of shares withheld for employee taxes 37,022 (806) (419) Tax benefit from equity awards, including transfer pricing adjustments 379 Balances as of September 24, 2016 5,336,166 S 31,251 $ 96,364 Net income 48,351 Other comprehensive income (los) Dividends and dividend equivalents declared (12.803) Repurchase of common stock (246,496) (33,001) Share-based compensation 4,909 Common stock issued, net of shares withheld for employee taxes 36,531 (913) (581) Tax benefit from equity awards, including transfer pricing adjustments 620 Balances as of September 30, 2017 5,126,2015 35,867 S 983305 See accompanying Notes to Consolidated Financial Statements 128,249 48,351 (784) (12,803) (33,001) 4,909 (1.494) 620 134.047 (050) 5 September 26, 2015 $ 13,844 53,394 11.257 3,586 1.382 385 Apple Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) Years ended September 30, 2017 September 24, 2016 Cash and cash equivalents, beginning of the year S 20,484 21.120 Operating activities: Net income 48,351 45,687 Adjustments to reconcile net income to cash generated by operating activities: Depreciation and amortization 10,157 10,505 Share-based compensation expense 4,840 4,210 Deferred income tax expense 5.966 4.938 Other (166) 486 Changes in operating assets and liabilitics: Accounts receivable, net (2,093) 327 Inventories (2.723) 217 Vendor non-trade receivables (4.254) (50) Other current and non-current assets (5.318) 1.055 Accounts payable 9.618 1,837 Deferred revenue (626) (1.554) Other current and non-current liabilities (154) (2.033) Cash generated by operating activities 63,598 65,824 Investing activities Purchases of marketable securities (159-186) (142428) Proceeds from maturities of marketable securities 31.775 21.258 Proceeds from sales of marketable securities 94.564 90.536 Payments made in connection with business acquisitions, net (329) (297) Payments for acquisition of property, plant and equipment (12.451) (12.734) Payments for acquisition of intangible assets (344) (814) Puyments for strategic investments, net x395) 1.383 Other 220 (110) Cash used in investing activities 46,4003 (45.9773 Financing activities Proceeds from ince of common stock -555 95 417 (238) (3.735) (283) 5,001 1,042 9.058 81.266 (166-02) 14.538 107,447 (343) (11.247) (241) 426 56.274) 5 ON (241) (344) (395) 220 (46,446) (814) (1.388) (110) (45,977) (26) (56,274) 555 Payments for acquisition of intangible assets Payments for strategic investments, net Other Cash used in investing activities Financing activities: Proceeds from issuance of common stock Excess tax benefits from equity awards Payments for taxes related to net share settlement of equity awards Payments for dividends and dividend equivalents Repurchases of common stock Proceeds from issuance of term debt, net Repayments of term debt Change in commercial paper.net Cash used in financing activities Increase (decrease in cash and cash equivalents Cash and cash equivalents, end of the year 495 407 (1.570) (12.150) (29.722) 24.954 (2.500) (397) (20,183) (636) 20,484 543 749 (1.499) (11.561) (35,253) 27,114 622 (1.874) (12,769) (32.900) 28,662 (3.500) 3,852 (17.347) (195 20.289 2.191 (17.716) 7.276 21.120 S S S Supplemental cash flow disclosure Cash paid for income taxes, net Cash paid for interest $ 13.252 S $ 11.591 2092 10.444 11316 $ S $ 514 See accompanying Notes to Consolidated Financial Statements for general release to customers. In most instances, the Company's products are released soon after technological feasibility has been established and as a result software de- velopment costs were expensed as incurred. Advertising Costs Advertising costs are expensed as incurred and included in selling, general and administrative expenses. Other Income and Expense $ millions 2017 2015 Interest and dividend income S5.2015 3,999 $2.921 Interest expense 2.323 0.450) (733) Other expense, net KL133.195) (903) Total other income (expense), net S 2.745 S 1348 $1.285 The Company has conside with its third-party cellula tailers, value-added reselle and education, enterprise As of September 30. tomers that individually trade receivables, each o September 24, 2016, the represented 10% or more accounted for 10%. The ers accounted for 59% an September 30, 2017 and Allowance for Doubtful The Company records its based upon its assessme 2016 $9.2 billion during 2017, 2016 and 2015, respectively. was $1.2 billion in 2017. Gruss Net Carrying Accumulated Carrying Amount Amortization Amount S7.5075 Property, Plant and Equipment, Net (S millions) 2017 2016 Land and buildings $ 13,587 $ 10,185 Machinery, equipment and internal-wise software 54,210 44,543 Leasehold improvements 7.279 6,517 Gross property, plant and equipment 75,076 61,245 Accumulated depreciation and amortization (41,293) (34,235) Total property, plant and equipment, net 533.783 5 27010 (5.309) S 2,198 Smillions Definite-lived and amortizable acquired intangible assets Indefinite-lived and non-amortizable acquired intangible assets Total acquired intangible acts 100 $ 7.6075 100 (5,309) S 2,298 Long-Lived Assets Including Goodwill and Other Acquired Intangible Assets The Company reviews property, plant and equipment, in- ventory component prepayments and identifiable intangi bles, excluding goodwill and intangible assets with Fair Value Measurements The Company applies fair value accounting for all finan cial assets and liabilities and non-financial assets and li- abilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. The Company defines fair value as the price that would be re. that is available ement: The Company declared and paid cash dividends per share during the periods presented as follows: for identical assets uoted prices in ac ities, quoted prices es in inactive mar- or can be corrobo- abstantially the full 2017 2016 Dividends Amount Dividends Amount Per Share (in millions) Per Share (in millions) Fourth quarter $ 0.63 $ 3,252 S 0.57 $ 3,071 Third quarter 0.63 3,281 0.57 3,117 Second quarter 0.57 2,988 0.52 2.879 First quarter 0.57 3,042 0.52 2,898 Total cash dividends declared and paid $ 2.40 $ 12.563 s 2.18 S 11.965 Segment Information and Geographic Data ervable and typically mptions that market et or liability used to measure the A certain marketable noted prices in active Hities. The valuation lue of the Company's al instruments, all of credit ratings, were 5 or model-driven val ved from or corrobo Net sales by product (mil.) iPhone iPad Mac Services Other Products Total net sales 2017 $141.319 19.222 25.850 29.980 12.863 5229.234 2016 S136,700 20.628 22.831 24,348 11,132 S215.639 2015 S155.041 23.227 25,471 19,909 10.067 S233.715 2017 2016 2015 e accounting require asure eligible financial Ms at fair value. The alue option for any eli- S96.000 30.08 S86,613 $38.172 $93.861 5.11.186 Reportable segment (mil) Americas Net Sales Operating income Europe: Net Sales Operating income Cineater China Net Sales Operating income Japan Net sules Operatin income 55,938 S10.51 S49052 S 15.148 acation s in the Company's ac or 2017 and 2016. S 50.327 $ 16,527 $14.76 $17.032 318,192 $18.835 $ 58,715 5 23.00 2017 costs $ 3.702 4.3221 4.-154 2016 51780 1.163 3:585 $17.733 S.097 S 16.928 S1165 15.700 S 7,617 6:12 AM Other Products Total net sales 12,863 $229,234 11,132 $215.639 10,067 $233.715 2017 2016 2015 which have counterparties with high credit ratings, were valued based on quoted market prices or model-driven val- uations using significant inputs derived from or corrobo rated by observable market data. In accordance with the fair value accounting require. ments, companies may choose to measure eligible financial instruments and certain other items at fair value. The Company has not elected the fair value option for any eli- gible financial instruments. Accrued Warranty and Indemnification The following table shows changes in the Company's ac- crued warranties and related costs for 2017 and 2016: 596,600 $30,684 $ 86,613 $ 28,172 $ 93,864 5 31,186 $54.938 $16,514 $ 49,952 515,348 S 50,337 S 16.527 Reportable segment (mil) Americas Net sales Operating income Europe Net sales Operating income Greater China: Net sales Operating income Japan: Net sales Operating income Rest of Asia Pacific Net sales Operating income $14.764 S17032 $48.492 $18.835 $ 58,715 5 23,002 S millions 2017 Beginning accrued warranty and related costs $ 3.702 Cost of warranty claims (4.322) Accruals for product warranty 4.454 Ending accrued warranty and related costs $ 3,834 2016 $ 4.780 (4,663) 3.585 $ 3,702 $17.733 S 8.097 $ 16,928 $ 7.165 5 15.706 57.617 $15.199 $ 5,304 513,654 54.781 $ 15,098 S 5518 A reconciliation of the Company's segment operating in come to the Consolidated Statements of Operations for 2017 2016 and 2015 is as follows: Term Debt As of September 30, 2017, the Company had outstanding floating and fixed-rate notes with varying maturities for an aggregate principal amount of $104.0 billion (collectively the "Notes". The Notes are senior unsecured obligations and interest is payable in arrears. The Company recognized $2.2 billion, 51.4 billion and $722 million of interest expense on its term debt for 2017 2016 and 2015, respectively As of September 30, 2017 and September 24, 2016, the fair value of the Company's Notes, based on Level 2 inputs. was $106.1 billion and 581.7 billion, respectively, 2017 5 77,631 2016 S 74.301 2015 583,850 S millions Sement operating income Research and development expense Other corporate expenses et The operating income 11.5811 6.706 561114 10.45 (4.232) S00024 18.002 553) $21.210 Google Inc. (Alphabet Inc.)" CONSOLIDATED BALANCE SHEETS (In millions, except share and par value amounts which are reflected in thousands, and par value per share amounts) As of December 31, 2016 As of December 31, 2017 s 12,918 73.415 86,333 14.137 95 268 Assets Current assets Cash and cash equivalents Marketable securities Total cash cash equivalents, and marketable securities Accounts receivable, net of allowance of 5467 and 5674 Income taxes receivable, net Inventory Other current assets Total current assets Non-marketable investments Deferred income taxes Property and equipment, net Intangible assets.net Goodwill Other non-current assets Total assets Liabilities and Stockholders' Equity Current liabilities Accounts payable Accrued compensation and benefits Accrued expenses and other current liabilities Accrued revenue share Deferred revenue Income taxes payable net Total current abilities Long-term debe Defend venue ocurre Tincome tax payable, non-current Deferred income te Other lonelit 4.575 105.408 5,878 383 14.234 3,307 16.468 1.819 167,4197 10.715 91.156 101,871 18,336 369 749 2,983 124 308 7.813 680 42.383 2,692 16,747 2.672 197.295 S $ 2.041 3,076 144 2.92 1199 554 0756 015 3.137 4.581 10.177 3.975 1.12 881 BRAS 7.969 972 18 400 105 1,099 554 16,756 3,935 202 1,432 881 24,183 3,969 340 4,677 226 12,812 430 3,059 44,793 2,665 28,461 0 0 Deferred revenue Income taxes payable, net Total current liabilities Long-term debt Deferred revenue, non-current Income taxes payable, non-current Deferred income taxes Other long-term liabilities Total liabilities Commitments and contingencics Stockholders' equity: Convertible preferred stock. 50.001 par value per share, 100,000 shares authorized; no shares issued and outstanding Class A and Class B common stock, and Class C capital stock and additional paid-in capital, 50.001 par value per share: 15.000.000 shares authorized (Class A 9,000,000. Class B 3,000,000, Class C 3,000,000), 691.293 (Class A 296,992, Class B 47.437. Class C 346,864) and 694,783 (Class A 298.470. Class B 46.972. Class C 349 341) shares issued and outstanding Accumulated other comprehensive loss Retained earnings Total stockholders equity Total liabilities and stockholders equity "Google is part of Alphabet, but we loosely refer to Alphabet as "Google" because of its global familiarity and that Google provides 99% of Alphabet's $110.855 billion in revenues See accompanying notes 36,307 {2,402) 105.131 139,036 167-97 40,247 (992) 113.247 152.502 197.295 $ S Google Inc. (Alphabet Inc.) CONSOLIDATED STATEMENTS OF INCOME (In millions) 2015 2016 90,272 2017 110,855 74,989 $ Year Ended December 31 Revenues Costs and expenses Cost of revenues Rescarch and development Sales and marketing Ciencral and administrative European Commission fine Total costs and expenses Income from operations Other income (expense), nel Income before income taxes Provision for income taxes Net income Less. Adjustment Payment to Class C capital stockholders Net income available to all stockholders 28,164 12,282 9,047 6,136 0 55,629 19,360 291 19.651 3.303 16.348 522 15.826 35.138 13.948 10.485 6,985 0 66,556 23,716 434 45,583 16,625 12,893 6.872 2.736 84,709 26,146 1.047 27.193 14,531 12.662 0 12.062 24.150 4.672 198478 S s s S S 19.478 S "Google is part of Alphabet, but we loosely refer to Alphabet as "Google" because of its global familiarity and that Google provides 99% of Alphabet's $110.855 billion in revenues. See accompanying notes. Google Inc. (Alphabet Inc." CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME in millions) 2015 2016 19,478 2017 12.662 S 16.148 $ S 1.0629 (599) 1.543 Year Ended December 31 Net income Other comprehensive income closs: Change in foreign currency translation adjustment Available for sale investments Change in net unrcalived gains (losses) Le reclassification adjustment for net gains losses included net income 6715 205 (311 221 307 105 "Googlc is part of Alphabet, but we loosely refer to Alphabet as "Google" because of its global familiarity and that Google provides 99% of Alphabet's $110,855 billion in revenues. See accompanying notes 2016 19,478 2017 12,662 S (599) 1.543 Google Inc. (Alphabet Inc.)" CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions) Year Ended December 31 2015 Net income 16,348 S Other comprehensive income (oss): Change in foreign currency translation adjustment (1,067) Availablc-for-sale investments: Change in net unrealized gains (losses) (715) Less: reclassification adjustment for net (gains) losses included in net income 208 Net change (net of tax effect of $29, 50, and 50) (507) Cash flow hedges Change in net unrealized gains (losses) 676 Less: reclassification adjustment for net(gains) losses included in net income (1.003) Net change (net of tax effect of 115, 564, and $247) (327) Other comprehensive income doss) (1.901 Comprehensive income 14.447 (314) 221 193) 307 105 412 515 (351) 164 (528) 18.950 (638) 93 (545) 1.410 14.072 S S $ Google in part of Alphabet, but we loosely refer to Alphabet as "Google" because of its global familiarity and that Google provides 99% of Alphabet: $110.855 billion in revenues, See accompanying notex 0 0 0 Google Inc. (Alphabet Inc.)" CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (In millions, except share amounts which are reflected in thousands) Class A and Class B Common Stock, Class C Accumulated Capital Stock and Other Total Additional Paid-In Capital Comprehensive Retained Stockholders' Shares Amount Income (Loss) Earnings Equity Balance as of December 31, 2014 680,172 $ 28,767 S 27 75,066 $ 103,860 Common and capital stock issued 8,714 664 0 0 664 Stock-based compensation expense 0 5.151 0 5.151 Stock-based compensation tax benefits 0 815 0 0 815 Tax withholding related to vesting of restricted stock units 0 (2.779) 0 0 (2.779) Repurchases of capital stock (2,391) (111) 0 (1.669) (1.780) Adjustment Payment to Class C capital stockholders 853 475 (522) (47) Net income 0 0 0 16,348 16.348 Other comprehensive los 0 (1.901) 0 (1,901) Balance as of December 31, 2015 687.348 32.982 (1.874) 89.223 120.331 Cumulative effect of accounting change 0 180 0 (133) 47 Common and capital stock issued 9.106 298 0 298 Stock-based compensation expense 6,700 0 6.7080 Tax withholding reluted to Nesting of restricted stock units (3.397) 0 3.597) Repurchases of capital stock (5,161) (256) 0 3,4373 (3.693) Net Income D 19.478 19.47% Other comprehensive loss 0. 0 528 0 528) Balance as of December 31, 2016 091.293 36.207 (2.402 105.131 139.036 Cumulative effect of accounting change 0 0 (15) (15) Common and capital stock issued 8,632 212 0 212 Stock-based compensation experie 0 7,694 0 0 7,092 Tax withholding related to vesting of restricted stock units 0 (4,173) (4,173) Repurchases of capital stock 5,1621 3151 (4.331) 14.846) Sale of subsidy shtes 0 722 732 Net income 13.663 12.00 Ochet comprehensive loss 110 0 1.210 Balance as of December 31, 2017 697 10247 1993) 1.247 152.50 0 0 0 0 0 0 -- D 0 a 0 0 2016 2017 S 19.478 S 12,662 5,267 877 6,703 (38) 6,103 812 7,679 258 275 194 137 174 Google Inc. (Alphabet Inc.) CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) Year Ended December 31 2015 Operating activities Net income $ 16,348 Adjustments: Depreciation and impairment of property and equipment 4,132 Amortization and impairment of intangible assets 931 Stock-based compensation expense 5.203 Deferred income taxes (179) Loss on marketable and non-marketable investments, net 334 Other 212 Changes in assets and liabilities, net of effects of acquisitions Accounts receivable (2.094) Income taxes, net (179) Other assets (318) Accounts payable 203 Accrued expenses and other liabilities 1.597 Accrued revenue share 339 Deferred revenue 43 Net cash provided by operating activities 26,572 Investing activities Purchases of property and equipment 19.9502 Proceeds from disposals of property and equipment 35 Purchases of marketable securities 174.368) Maturities and sales of marketable securities 62.005 Purchases of non-marketable investments 21026) Maturities and sales of non-marketable investments 354 Cash collateral related to securities lending 50 Investments in reverse repurchase agreements 425 Acquisitions, niet of cash acquired and purchases of intangible assets 236 Proceeds from collection of noses receivable 0 Net casi used investing activities 12:21 Financing activities Net payments related to stock-based award activities 2.375 (2.578) 3.125 312 110 1515 593 223 36,036 3.768) 8.211 (2.164) 731 4,891 955 390 37.091 (TO 212) 240 184,509 66.893 109) (13.184) 99 (92.195) 73.959 (1.745) 513 GOOGLE 494 22 50 UN) 1271 19 0 B105 361 35 (74,368) 62,905 (2.326) 154 (350) 425 (236) 240 (84,509) 66,895 (1.109) 494 (2,428) 450 (986) 0 (31.165) 99 (92,195) 73.959 (1.745) 533 0 0 (287) 1.419 (31.401) 0 (23,711) Proceeds from disposals or property and equipment Purchases of marketable securities Maturities and sales of marketable securities Purchases of non-marketable investments Maturities and sales of non-marketable investments Cash collateral related to securities lending Investments in reverse repurchase agreements Acquisitions, net of cash acquired, and purchases of intangible assets Proceeds from collection of notes receivable Net cash used in investing activities Financing activities Net payments related to stock-based award activities Adjustment Payment to Class capital stockholders Repurchases of capital stock Proceeds from issuance of debt, net of cus Repayments of debt Proceeds from sale of subsidiary shares Net cash used in financing activities Effect of exchange rate changes on cash and cash equivalents Net decrease in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period 12,375) (47) (1.780) 13.705 (13,728) 0 (4.225) (434) (1 798) 18,947 16.549 (3,304) 0 (3.693) 8,729 (10.064) 0 (8,332) (170) (3.631) 16,549 52OTS (4,166) 0 (4.846) 4,291 (4.377) 800 (8.298) 405 (2.203) 12,918 10.215 5 S S 1.643 3 3.651 06 S $ 2.191 4 84 S Supplemental disclosures of cash flow information Cash paid for taxes, net of refunds Cash paid for interest, net of amounts capitalized "Google is part of Alphahet, but we loosely refer to Alphabet as Google" because of its global familiarity and that Google provides 99% of Alphabet's 5110X55 billion in revenues See companying notes December 31, 2016 KRW 32,111,442 52,432,411 3,638,460 24,279,211 3.521.197 1.439.938 3,502,083 18.353,503 1.315,653 835,806 141,429,704 6.804.276 Samsung Electronics Co., Ltd. and Subsidiaries CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (In millions of Korean won) December 31, 2017 Assets KRW Current assets Cash and cash equivalents. 30,545,130 Short-term financial instruments 49,447,696 Short-term available for sale financial assets 3,191,375 Trade receivables 27.695,995 Non-trade receivables 4,108,961 Advance payments 1.753.673 Prepaid expenses 3,835,219 Inventories 24.983,355 Other current assets 1.421060 Assets held for sale Total current assets 146,982,464 Non-current assets Long-term available for sale financial assets 7.752.180 Held-to-maturity financial assets 106.751 Investment in associates and joint ventures 6,802.351 Property, plant and equipment 111.665.618 Intangible assets 14,760483 Long-term prepaid expenses 3434.375 Net defined benefit assets 825.892 Deferred income taxes 5.061.687 Other non-current assets 4.100.259 Total assets 301.752,090 Liabilities and Equity Current liabilities Trade payables 9.012,007 Short-term borrowings 15.767619 Other payables 13.99 Advances received 120174 Withholdings 793.32 Accrued expertise 13.996.23 Income tax payable 2 Current portion of long-term liabilities 378 610 Provisions 194.820 Other current liabilities H03,139 Liabilities held force 5.837884 91.473,011 5.344,020 1.834.31 557.091 5.21.450 1.572,027 262,174.134 03.03 12.746.789 11.315,210 78 NS02 121527 7 41 31.1 33 Short-term borrowings 15,767,619 12,746,789 Other payables 13.899,633 11,525.910 Advances received 1,249,174 1,358,878 Withholdings 793,582 685,028 Accrued expenses 13.996,273 12,527,300 Income tax payable 7,408,348 2,837,353 Current portion of long-term liabilities 278,619 1,232,817 Provisions 4,294,820 4,597.417 Other current liabilities 403,139 351,176 Liabilities held-for-sale 356,388 Total current liabilities 67,175,114 54,704,095 Non-current liabilities Debentures 953,361 58.542 Long-term borrowings 1.814.446 1.244,238 Long-term other payables 2.043.729 3.317,054 Net defined benefit liabilities 389.922 173.656 Deferred income tax liabilities 11,710,781 7.293,514 Provisions 464.324 358,126 Other non-current liabilities 2,708,985 2,062,066 Total liabilities 87,260,662 69,211,291 Equity attributable to owners of the parent Preference shares 119.467 119.467 Ordinary shares 778,047 778 017 Share premium 4.403,893 4403,893 Retained carnings 215,811.200 193.086,317 Other components of equity (13.899,191) (11.934,586) Accumulated other comprehensive income attributable to assets held for sale (28,810) 207.213,416 186,124.328 Non-controlling interests 7.278,012 6.538.705 Total equity 214.491,428 192,963,033 Total liabilities and equity 301,752,090 262,174.324 The above consolidated statement of financial position should be read in conjunction with the accompanying notes Samsung Electronics Co., Ltd. and Subsidiaries CONSOLIDATED STATEMENTS OF PROFIT OR LOSS 2017 2016 KRW KRW For the year ended December 31 (In millions of Korean won) Revenue Cost of sales Gross profit Selling and administrative expenses Operating profit Other non-operating income Other non-operating expense Share of profit of associates and joint ventures Financial income Financial expense Profit before income tax Income tax expense Profit for the period Profit attributable to owners of the parent Profit attributable to non-controlling interests 239,575.376 129,290,661 110,284,715 56,639,677 53,645,038 3,010,657 1.419.648 201,442 9.737,391 8.978.913 56.195,967 14.009 220 42,186,747 201.866.745 120,277,715 81,589,030 52,348,358 29,240,672 3,238,261 2.463,814 19.501 11.385,645 10.706,613 30,713,652 7.987.560 22.726,092 411344.569 842.178 22.415,655 310,437 Earnings per share -Basic Diluted 299.868 299,868 157967 157.907 The above consolidated statement of financial position should be read in conjunction with the accompanying notes Samsung Electronics Co., Ltd. and Subsidiaries CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME 2017 For the year ended December 31 in millions of Koren 2016 KRW KRW Samsung Electronics Co., Ltd. and Subsidiaries CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the year ended December 31 2017 2016 (In millions of Korean won) KRW KRW Profit for the period 42,186,747 22,726,092 Other comprehensive income (loss) Items not to be reclassified to profit or loss subsequently Remeasurement of net defined benefit liabilities, net of tax 414,247 963,602 Shares of other comprehensive income (loss) of associates and joint ventures, net of tax (6.347) 50.438 Items to be reclassified to profit or loss subsequently Changes in value of available-for-sale financial assets, net of tax 511.207 (23.839) Share of other comprehensive income (los) of associates and joint ventures, niet of tax (49.256) (130.337) Foreign currency transtation, net of tax (6,334,987) 1.131,536 Gain (los) on valuation of derivatives (37.121) Other comprehensive income (loss) for the period, net of tax (5,502,257) 1,991,400 Total comprehensive income for the period 36,684,490 24,717,192 Comprehensive income attributable to: Owners of the parent 35,887,505 24, 310,814 Non-controlling interests 796,085 406,678 The above consolidated statement of financial position should be read in conjunction with the accompanying notes UNG Samsung Electronics Co., Ltd. and Subsidiaries CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY Accumulated other comprehensive Ince Equity attributable to attributable Non as beld- to owners controlling for-sale of the parent Interests Total 23,797 172,876,767 6,183,038 179,059,805 22.415,655 310,437 22,726,092 122,797) (111.509) 87.661 (23.839) 212 179.930) 1.160.216 35 (28,780) (79.999) 1,131,536 . 927.280 37.322 963,602 Other Preference Ordinary Share Retained Components In millions of Korean Won shares shares premium earning of equity Balance as at January 1, 2016 119,467 778,047 4.403,893 185,132,014 (17.580,451) Profit for the period 22.415633 Changes in value of available for sale financial asets, net of tax (87.706) Share of other comprehensive income (los) of sociates and joint ventures, net of tax (90,146) Foreign currency translation, net of tax 1.160.316 Reniasurement of it defined benefit liabilities, net of tax 926.280 Classified as held for sale 20.022 Total comprehensive income tous) 22.415,655 1.47.766 Dividends (3.061.361) Capital transaction under common control (37) Changes in consolidated entities Acquisition of treaty stock 17.207.93) Retirement of treasury sock (11.199.99 11.399.991 Others 6.0 Total transactions with owners (14,161.352)3.09.099 Halance at December 31, 2016 119,467 978.047 4.403.89 193.06.317 11:34,586) Profit for the 11.560 Changes in valo vable for sale det ofta NO Share other have income cated ola TILL 29.02) (52,607) I SEE 24,310,814 (3,061,161 137 406,678 24.717,492 165.161) 0.126.522 12.272 12.275 1.790 1.790 7,707.933 X7.207.9 GORE 121 (28,810 10,7632 186.124.228 . 51,011 VION1426) 3705 192.962,033 47 42.186247 1 -- - 1 1 Acquisition of treasury stock (7.707,938) 7.707,938) (7.707,938) Retirement of treasury stock (11.399,991) 11,399.991 Others 6,083 6,083 88 6,171 Total transactions with owners (14,461,352) 3,698,099 (10,763,253) (51,011) (10,814,264) Balance as at December 31, 2016 119,467 778,047 4,403,893 193,086,317 (11,934,586) (28,810) 186,434,328 6,538,705 192,963,033 Profit for the period 41.344.569 41.344.569 842,178 42,186,747 Changes in value of available for sale financial assets, net of tax 489,150 489.150 22.057 311.207 Share of other comprehensive income (los) of associates and joint ventures, net of tax (54,300) (54.300) (1,303) (55,603 Foreign currency translation, net of tax I (6,289.926) 28,810 (6,261,116) (73,871) (6.334.987) Remeasurement of net defined benefit liabilities, net of tax 406,323 406,323 7.924 414.247 Gain (los) on valuation of derivatives (37,121) (37,121) (37.121 Total comprehensive Income (low) 41,344.569 (5.185.874) 28,810 35,887,505 796,985 36,684,490 Dividends (6,747,123) (6.747.12.3) (61.277) (6.811.400) Capital transaction under common control (2.992) (2.992) 15.114 12,122 Changes in consolidated entities (2.699) (2.699 12.051) Acquisition of treasury stock (8.350.424) (R.350,424) (8.350.426) Retirement of treasury stock (11.872563) 11.872.363 Others 4.821 4821 837 5.658 Total transactions with owners (18,619,686) 3,521.269 (15.098,417) (57.678) (15,156,095) Balance as at December 31, 2017 119.467 778,047 4.403,893 215,811,200 (13.899,191) 207.213416 7.278,012 214,491,428 The above consolidated statement of financial position should be read in conjunction with the accompanying botes. TL II | 11111 111 LE (9.352) NG Samsung Electronics Co., Ltd. and Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS 2017 2016 KRW KRW 42,186,747 36,211,232 (10,620,547) 67.777.432 1.581.117 (542.715) 173,305 (6,827,098) 62,162,041 22,726,092 30,754,471 (1.180,953) 52.299,610 1,405,085 (443,838) 256,851 (6.132,061) 47,385,644 For the year ended December 31 (In millions of Korean won) Cash flows from operating activities Profit for the period Adjustments Changes in assets and liabilities arising from operating activities Cash generated from operations Interest received Interest paid Dividends received Income tax paid Net cash inflow from operating activities Cash flows from investing activities Net decreasc (increase) in short-term financial instruments Disposal of short-term available-for-sale financial assets Acquisition of short-term availabic-for-sale financial assets Disposal of long-term financial instruments Acquisition of long-term financial instruments Disposal of long-term available-for-sale financial assets Acquisition of long-term availahte-for-sale financial assets Acquisition of hold-to-maturity financial assets Disposal of investment in associates and joint ventures Acquisition of investment in associates and joint ventures Disposal of property, plant and equipment Acquisition of property, plant and equipment Disposal of intangible assets Acquisition of intangible assets Cadoutflow from business combinations Cash inflow from business transfers Others Net cash outflow from investing, Detivities 387.627 499,856 (6.780,610) 3,010,003 (2.129.551) 789,862 (1.741.547) 2.010.356 (1.998,148) 1.750.221 (1.079,355) 191.826 (358,497) (106,751) 355,926 (25,293) 308.54 42,792,234) 733 1983.7-40) (8.754.26) 1.218.34 2155 (49.185.216) 2.280.203 (84.306) 270,874 (24.142.973) 6.944 (1.047.668) 22.05 19.9.16 (29.638,675) 2470 Acquisition of property, plant and equipment (42,792,234) (24,142,973) Disposal of intangible assets 733 6,944 Acquisition of intangible assets (983,740) (1,047,668) Cash outflow from business combinations (8.754.268) (622,050) Cash inflow from business transfers 1,248,834 Others (28,455) 19.936 Net cash outflow from investing activities (49,385,216) (29,658,675) Cash flows from financing activities Net increase in short-term borrowings 2,730,676 1.351,037 Acquisition of treasury stock (8,350,424) (7.707.938) Proceeds from long-term borrowings and debentures 998,311 1,041,743 Repayment of long-term borrowings and debentures (1.140,803) (252,846) Dividends paid (6,804,297) (3.114.742) Net increase in non-controlling interests 5,670 13,232 Net cash outflow from financing netivities (12,560,867) (8,669,514) Effect of exchange rate changes on cash and cash equivalents (1,782,270) 417.243 Net (decrease) increase in cash and cash equivalents (1,566,312) 9,474,698 Cash and cash equivalents Beginning of the period 32,111,442 22.636,744 End of the period 30.545.130 32,111.442 The above consolidated statements of cash flows should be read in conjunction with the accompanying notes