♪ juliette: coming up on "bloomberg best," the stories that shaped the week in business around the world. news fromrom -- big some big banks, it it is a big week for earning reports. >> this is down 50%, now, that business is over 40% of earnings, that should only increase from here. juliette: another shutdown showdown gripped washington as budget deadlines loom. chew over fresh data from china. >> it feels like they have the economy on president trump. juliette: apple prepares to bring home overseas cash and announces plans to spread it around. >> this is 20,000 jobs. that is quite good news from a

political perspective. juliette: and a new bloomberg report shines on clean energy investment. >> china is far and away the world leader in terms of the most amount of capital being deployed and the most of the equipment. >> by 2040, about 53% of new car sales globally will be electric. juliette: buckle up, for conversations from the north american international auto show. >> it is a milestone for our future plans, but there is more to come. >> our growth is coming from a degree of buoyancy from the markets but this is market share growth. >> they can have the option of delegating tasks to that vehicle that their grandfather never expected, including never crashing. juliette: it is all ahead on "bloomberg best." ♪ ♪ juliette: hello and welcome. i am juliette saly. this is "bloomberg best," your weekly review of the most important business, news,

analysis, and interviews from bloomberg television around the world. u.s. markets were closed on monday but the week began with a startling corporate headline from the u.k. mark: the once mighty u.k. construction giant carillion has collapsed. the company had government forracts and filed liquidation after failing to get a government bailout. carillion has $2 billion in debt. share prices have collapsed in the last year. it is not nice to play the blame game, but let's play it. who is to blame? lionel: exactly right. the blame game is happening right now. i think you have both sides deserving blame, the government for presiding over a very competitive, too fragmented contracting and procurement market where price, the bottom line, is everything. and not enough attention is paid to the health of these companies

and the other part of the blame will be to carillion itself for too aggressively bidding for contracts with the incentive to get the executive and the board on growth, and it should be for aggressive growth. mark: and should the government have awarded them further contracts in the wake of the year where we saw three profit warnings and the share price plunge? what kind of message does that send? lionel: it is a concerning one because it suggests they did not know the full picture of the health of carillion. or they did know and were hoping to put in the right contingency plan in place. i think there is a problem if the government doesn't know the full health of one of the biggest contractors and the supply chain to do with it. vonnie: citigroup is at its highest in nearly a decade after revealing plans to shower investors with profits. the bank is sticking with its multiyear plan to pay out at least $60 billion to shareholders. that is even after it's larger than forecast charge of nearly $2 billion.

that is to adjust to the new u.s. tax structure. michael: turning to tax reform, we believe it will greatly benefit citi shareholders. the charge we are taking relates mostly to the reduction of our deferred tax assets value as a result of a lower tax rate, the implementation of a territorial tax system, and the tax on deemed repatriation. vonnie: to a larger extent, this charge was a gift to citigroup. it allows them to bestow also things on the shareholders. alison: i think the key thing is with regard to the charge and capital return, they made this clear in early december, we will have a huge charge, but it will not stop us from that $60 billion capital return which is the plan over three years so they did make that announcement before we got the final bill. with the final bill, the charge was $22 billion. that was related to repatriation. i think the key thing that we learned today or the one thing

that is better than expected is results in the card unit. we do get a little better than expected so credit coming in line with expectations and growth, pretty strong. jonathan: bank earnings continue to roll out this morning. bank of america reports bond and equity trading that beat analysts but goldman sachs saw its worst bond trading in a decade. this is down a massive 50%. what happened? alison: keep in mind that they had a very strong year. third quarter stronger than other banks. i think expectations were down. but still a disappointing number. it is important for goldman because they are more from that business than other banks but on the bullish side of things, investment banking, gain shares in businesses that are growing and doing better and controlling costs, so showing they are in businesses that are very transactional driven, equity training. to the extent that they can keep

helpfuliable, that is to the bottom line. charles: bank of america tends to not have a big swing that other banks might have. what they're trying to do is create quarters of predictability rather than swings from one quarter to the other. that is what they're laying out now, the sequential quarters of steady earnings. the bottom line number looks good, the top line number was a small miss in terms of revenue. but what was surprising is how strong the capital markets revenues were. they will probably have one of the best investment banking quarters of any of the big banks. francine: china's economy has had its first full-year acceleration since 2010. gdp growth picked up 2.69% . meanwhile, industrial production estimates, but retail figures came in bit softer than expected. tom: no big surprise, it is noteworthy given that the economists at the beginning of 2017 saying that they expect to

see a moderate slowdown in growth. that has not happened. it is noteworthy given the expansion in credits starting to slow in china and you have a very focused tackling in terms of the regulatory environment on financial risks. >> it feels like they have the economy on somewhat of a sweet spot. it is on cruise control and they are not willing to step back anytime soon. a big part of what is happening in china is actually the global story. the economy is recovering and is driving demand for exports out of town and escorts are a net contributor growth last year. things are looking good, inflation is relatively subdued. currency is stable. growth is on track. jonathan: morgan stanley topping estimates with brokerage profits setting a new high for a fourth straight quarter. alison: all good. the one area they missed was fixed income trading. i would say if investors would go to dictate area for them to invest, that would be the one .

and still in line with their annual target so morgan stanley is executing on plan. they are coming and within that 9% to the 11% range and that is the key i think investors are one. really going to focus on how much help we're getting from the market and where we go from here. devin: we are seeing the morgan stanley power of their diversification and the strategic decision they made to really push forward in wealth management, and that business is over 40% of earnings and that should only increase from here. so you are seeing the diversification and offense. this is a quarter where we knew that the fixed income backdrop would be difficult. and they still had a good result because of management is a much bigger driver today. so i do think that they are executing and it is the strategic push toward wealth management. vonnie: congressional lawmakers face the midnight deadline to avert a partial shutdown of the u.s. government. this, as the house passed the measure that would keep government up and running through february 16. senate democrats say they are holding out for a provision that

would protect the status of young undocumented immigrants. marty: there is tremendous pressure on chuck schumer to not give in on the daca deal. and there are republicans, republican senators are throwing up their hands. lindsey graham says i will not vote for a short-term c.r. we have to stop running our government this way. so there is no clear path for 60 votes in the senate at this point. dir. mulvaney: we don't want this. we do not want a shutdown. but if mr. schumer insists on it, he is in a position to force this on the american people. sen. durbin: i hope the president will join us. if he will, we can solve this problem. if he stands on the sidelines, we cannot. >> just as a spending bill faces an uphill battle in the senate, we have learned chuck schumer is headed to the white house for a meeting at the president's request. kevin: all morning long, i have been speaking with senior aides to lawmakers in both parties who

suggest that this is going to come down to the wire and the idea of having a short-term deal, a mini deal, if you will, that would just keep the government open for a couple more days may not be what the administration is ultimately hoping for. particularly with the president's travel plans to davos less than a week away. sen. schumer: we had a long and detailed meeting. we discussed all the major outstanding issues. we made some progress but we still had a good number of disagreements. discussions will continue. juliette: still ahead, much more company news, including a deal that will take nestlé out of the u.s. candy business. plus, an exclusive conversation with chairman bill mcnabb. bill: the passive investing has provided the everyday investor better returns in a risk-controlled way. juliette: and more of the week's top business stories, bitcoin takes another dizzying dip. edward: even if you're one of

the most bullish bitcoin investors, you cannot look at the event of this week and not feel a chill. juliette: this is bloomberg. ♪

♪ juliette: this is "bloomberg best." i am juliette saly. let's continue our global tour of the top business headlines. in canada, with the rate decision from the nation's central bank. julie: the bank of canada raising its overnight interest rate to 1.25%. it says it sees the need for accommodation to keep inflation on target here. banks in canada were forecasting 3% gdp growth in 2017, 2.2% growth in 2018, 1.6% in 2019. slowing, obviously. the bank of canada expecting inflation in that nation to remain near 2% through mr. 2019. poloz: we are operating at about our potential.

of course, inflation is about at target. arguably, if you took that as a snapshot, interest rates should be higher. and any model would say that. i think what we need to bear in mind is the experience that we have been through has actually depressed potential output. and in every expansion, we get to this stage of the cycle and firms say now it is time to invest. capacity begins to go up faster than what we have in our model. it happens every time, and we think this time it could be a bigger effect than usual. because it has been such a long, slow cycle. we have to at least entertain the possibility, because to the extent that it occurs, this is a higher level of gdp forever. but if you are worried about inflation risk and so on, first of all, you have a tendency to nip that process in the bud. and we are being very careful not to do that.

mark: u.k. officials are expressing concern about the rise of the euro over the last year. the vice leader saying i am concerned about sudden movements that don't reflect changes in fundamentals. look at fundamentals, inflation declined slightly in december. he is one of several officials that say a stronger euro may harm ecb efforts to get inflation to the goal of just shy of 2%. >> at the moment, there's not concerned that the euro is too strong or rising too fast. but it could happen in the future, if we carry on these paces, inflation doesn't show much signs of underlying strength in particular. headline inflation is down because of oil. there will be increased concerns on the dovish wing of the governing council who are already nervous about unwinding stimulus potentially too fast. shery: bad news for bitcoin, falling as much as 20% today, that amidst the surge of crypto crackdowns. the slide echoes a broader

january selloff with the digital asset down over 35% this month. why is it coin down again? is it the jitters of more regulation? camila: yes, that is a main driver for the bitcoin slump. remember it got to as high as , 20,000 last year and it went as low as 11,200 this morning. it is now back up again around 13,000. but it is a big slump and the main driver has been regulatory concern. the latest is that south korea's finance minister says showing -- shutting down cryptocurrency exchanges is an option. there are also reports from china that they are escalating the crackdown. that is weighing on the markets. shery: bitcoin tumbled below $10,000, bringing its loss to almost 50% from the record set only a month ago. the latest plunge brings more trauma to a digital coin market that has lost more than $300 billion in value since january 13. edward: even if you are the most bullish of bitcoin investors, you can't look at the event of this week and not feel a chill

about what is happening. i think where you start to get into everything is going to be ok is when you look at the blockchain story and how you continue to see a lot of adoption and research and development into the underlying database technology in bitcoin . and you look at the fact that bitcoin is still up 11x from where it was today. -- from where it was a year ago today. it has a history of volatility like this. sure, the stakes are higher now but there has to be a lot of fear out there and also a lot of deep breaths about it being ok. betty: trade tension between the u.s. and china. they surface again with trump calling china's leader to tell him that the growing deficit is not sustainable. china is bracing for more trump backlash on trade? tom: they certainly are aware that the rhetoric is being ramped up again in washington. it ebbed and flowed in 2017.

administration officials suggesting that they're going to be taking a tougher line. and of course they are aware , that president trump has failed to reduce the deficit with china. they will not have missed that the u.s. is taking a tougher line on these deals. whether that is the deal for moneygram or at&t being blocked. all of those things are being weighed by officials here. the chinese are being very clear saying if tariffs are imposed, they will retaliate, and therein lies the risk. harry: indonesia and the stock exchange was evacuated earlier today after the floor of the building's level one in tower two collapsed. officials said that several people had been hurt. what is the latest there? >> we just got confirmation from

the police that the incident was not due to any bombs or attacks, basically the floor on top of , the main lobby of tower two was collapsed. but the reason for the incident is unknown until now. manus: obviously, trading was interrupted at that juncture. that has been restated. give us a sense of the kind of impact. harry: it happened during the lunch break, so we do not see any disruptions in the trading . earlier, they said they planned to the second session by an hour, but they did not back up the decision so trading has resumed in david: san francisco fed president john williams is said to be in the running to be vice-chairman. this puts him beside lord lindsay and mohamed el-erian, they are all three phd economists.

that is one thing they have in common. how alike are they and how different? michael: they are very much alike probably in their monetary policy views, except the political side of it. mohamed el-erian obviously is a big thinker, comes from the wall street background. larry lindsey, a longtime republican, would bring the more supply side view of the economy, maybe it would be a bit more dovish. john williams is straight down the center in that he has been a member of the fed since basically 1994, the detour to the council of economic advisers, and has voted along with the chair all of the time, he has been a member of the open market committee. you probably would not see much difference with him. where williams might make a difference is with long-term strategy because he has been arguing that the fed needs to take another look at the 2% inflation target and maybe do inflation targeting instead. francine: oil slipping as the international agency became the latest to warn of a a jump in production in the united states. the group said that u.s. oil

output is set for explosive growth this year. there could be a further collapse in venezuela production. when you look at what they are saying, they are basically saying that u.s. oil output will increase because the price of oil is increasing. there is nothing really new. will: what is new is that people expect u.s. shale to accelerate much faster than they thought. all this new supply should be bearish for oil. but there are a couple of other things to factor into the equation. one thing they pointed out on the other side of the equation in today's report is the precipitous decline in venezuela production. it lost something like 300,000 barrels a day last year. the other thing is -- will opec hold its line? so far, it has been very disciplined about sticking to cuts. but if prices stay and climb, we will hear more and more voices saying that opec should ease its policy stance. ♪

♪ juliette: welcome back to "bloomberg best." i am juliette saly. bloomberg new energy finance has released its 2017 report on clean energy investment trends. this is based on its world-leading database of projects and deals. the analysis tracks global investment in renewable energy and energy smart technologies in the past year, as well as the outlook for the future. we discussed the report in detail this week on bloomberg television. julia: the world is going greener, spending on green energy last year was up from 2016, but it did not manage to top the 2015 peak. that is according to a new report from bloomberg's new energy finance team. what were the key drivers? ethan: the biggest driver and headline of course this year was china where we saw an unbelievable volume of new solar build, about 53 gigawatts of new solar capacity added in all kinds of places. china is far and away the world leader in terms of the most

amount of capital being deployed in the most amount of new equipment being deployed as well in support of new energy. -- in support of clean energy. again, it was a year where china led the pack and it was everybody else that came a distant second, including the united states. in the united states, we saw about $57 billion of investment compared to $130 billion in china. julia: if we look at the key countries cutting back you have , pinpointed the u.k., germany, japan. to what extent do think united states could suffer as we push through into 2018 as a result of the president's decision over the paris accord? ethan: the paris accord in terms of the symbolism of the u.s. pulling out certainly sends a negative sign to the rest of the world about the u.s.'s commitment on these issues, however, if you look at where the rubber meets the road in terms of the economics of renewals, tax credit and other things, the market was generally fine in the u.s. we logged about $57 billion worth of investment.

that is more or less where we have been for the last several years. alix: in 2017, bloomberg estimates that sales will be close to 1.5 in 2018 and china, million dollars leading the way. angus: china is the most dynamic market at the moment, and we think it will continue in 2018. it has a lot of government muscle behind it. they want to establish china as the main manufacturing base for electric vehicles and the batteries that go in them. we have seen the same thing happen where chinese policy has pushed the adoption there. they have subsidies in china. those will continue for a while. they may be scaled back later in 2018. but at the moment, it is the biggest market, but places like europe are also important, and

the u.s.. we are predicting that by 2040, about 53% of new car sales globally will be electric. juliette: straight ahead, we will revisit some of the week's most compelling conversations. vanguard chairman bill mcnabb shares his thoughts on opportunities in china. and carmakers gather at the north american international auto show. find out how they view the road ahead for the industry and for their companies. bill: the coal industry was not -- was built around the notion of nafta, and i think we have to be very careful with how much we tinker with it. juliette: this is bloomberg. ♪ we use our phones and computers the same way these days.

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near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver. in all ♪ >> what does the u.k. have to do in for its banks to retain will access to the single market? >> well, i think the whole situation, in a way, is dramatized excessively. >> you think over-dramatization is hindering? >> oh, yes. over-dramatization is never good. we would have to de-dramatize and look at things as they are. what have we seen the last 18 months? lots of players in financial services that are only based in london do need to have a subsidiary, they need to have substance in the u.k. single market, because they will lose automatic general access. everybody realizes that now. when i talked to you 18 months ago here in china, that question

was still open in many people's minds, that the u.k. could eventually have a cake and eat it. everybody realizes this is not possible. juliette: that was pierre gramegna. that was at the asia financial forum in hong kong. in detroit this week, executives from automobile companies around the world gathered at the north american international auto show. bloomberg's david westin spoke with several of the industry's top leaders, starting with jim hackett. david: can you give any sort of timeline on when you will hit a tipping point for av and ev? when will that come? three years, five years, longer? jim: i quote bill gates who said you really overestimate the arrival and underestimate the impact. i really believe that. i think the impact is once-in-a-lifetime history. bill and i talked when i took this job, it was the most important thing in the last 80

years that the ford motor company has to address, which is the integration of this capability in the design of vehicles, coupled with a smarter world. this is what we said at ces, that it didn't seem like the kind of thing that would come from an auto manufacturer, but the nature of edge computing or internet of things is evolving so fast that the vehicles have to couple with them in ways to do something like this. you know, you waste more fuel in trying to find a parking spot than you do sitting in a traffic jam? well, there is no reason for that. if the vehicle is smart enough and the parking spot can ping it's available. in that world, there is no need for a city meter maid, because the intelligence can meter out parking fees, and the vehicle can pay for it without the customer having to do anything. reporter: for a child born this

year, 2018, would they have to learn to drive in 2034? jim: i think a child born today, and 16 years later, i think they will have the perfect option. they can drive, because it would be a world where the passion for these vehicles never ends, but they can have the option of delegating tasks to that vehicle that their grandfather never expected, including never crashing. >> we have to talk about nafta. we have a big negotiation coming up later this month. >> right. >> you have talked to the president in the past. have you talked to the president to get a sense of where we are with nafta? >> i haven't. >> do you have a sense whether there is a real danger to pull out of nafta? >> well, to do something that drastic would not be something we would support. nafta could be modernized. we could get some currency into -- we couldrency get some currency certainty into nafta.

but nafta has been in place for a while and has served the industry well. reporter: how badly would it hurt ford motor company? bill our industry was really : built around nafta. so it depends what you mean, too. there is a continuum here, there is a complete blowup and then there's a modernization, something we would not be opposed to. but again, this whole industry was built around the notion of nafta, and i think we have to be very careful with how much we tinker with it. >> volkswagen has had some difficulty in recent years. you are coming back. how much of that in 2015 was driven by the atlas s.u.v.? >> we believe it was a key model for us. it is probably the most american car we have ever built, designed in the united states. seen by month, we have tremendous growth in the attraction of that car coming into the showroom. we are proud of the achievements

we have with atlas. we had a strong opportunity in 2018 because the car really fits well on the streets of america. it is a car that is perfectly blending with the american culture, but it has all the ingredients that people love about volkswagen. they love the details, high technology in the car, sort of beautiful execution, and the reaction of the customers is extremely positive. so atlas, i think, is just the milestone for our future plans, but there is more to come. atlas is just the first shot. reporter: how big could this get for cadillac in china? you are what, 175,000 vehicles? johan: we will probably do over 200,000 this year. i think when we roll out our new product portfolio, which will drive a lot of growth domestically in the u.s., we should continue to see an acceleration in sales. but we have performed well in other markets besides china as well. export markets grew by over 10% last year. and in conjunction with robust

u.s. performance on financial side with transaction prices continuing to grow, 2017 was a bumpy year for cadillac, the second highest in terms of sales in the history of the brand. well for 2018 and beyond. reporter: so that pace of growth in china is quite remarkable, projection of over 200,000. where is it coming from? is that a larger market or are you taking it from other people? in particular, i will ask about buick because i think buick has been your main brand in china, going back to the last emperor. johan: for general motors, buick is the lead around and one of the largest in the chinese market overall. but there's obviously a very clear stratification and differentiation between cadillac for different customers. it's a different customer, and our growth is coming from a degree of buoyancy from the market, but there is market share growth. we are taking it from other competitors. juliette: another exclusive interview this week took place in beijing, where bloomberg's

tom mackenzie sat down with bill mcnabb. they began by discussing his company's prospects in china, as the nation opens its financial system. -- financial sector. bill: there is a lot of opportunity for what i would call low-cost investing. there is still a lot of very high-class product in the asian market. and whether it is passive or low cost active, you could make a case for both. so it is likely you will see us doing both over time. tom: the likes of fidelity are starting to push back and lowering their fees, becoming more competitive. what changes are you seeing in the fund management industry? bill: so i think for the first time, there is widespread belief that price actually matters. and there's a couple things driving that. one is certainly our success, blackrock's success in the etf space. people aren't coming to us just because we are lower cost, they are coming because the net return to the investor is better, and that is the whole driver of the cost argument.

and i think people have awakened to this, the data are overwhelming. you just can't charge -- if you are an active fund and you charge 100 basis points, you have very little, very low probability of outperforming in the long run. money management has been a very lucrative profession for asset managers, and it is going to get less lucrative. i don't know what to say about that except people have to reinvest themselves and get smarter about how they actually run money. tom: there are skeptics out there that say this huge embrace of passive investing poses a significant risk to the markets. how do you defend against that? bill: the data just don't support it. what passive investing has provided the everyday investor is better returns in a risk -controlled way. if you think about it, it is a zero sum game at the end of the day. it all has to add up to the market. so the only difference in returns is cost. i think the cost differential is really the only thing that is

driving the growth of indexing, and that was not always the case and is not the case in every market. there are markets where there is a big retail presence, where the retail investor owns a huge part of the equity market overall. some of the asian markets, certainly. active managers will do really well in those markets, in particular if they are low-cost, because it is not a zero-sum game. the source of alpha, if you will, will come from irrational retail investors. i would also say to the skeptics back because index providers are long-term in nature and long-term in outlook, it is much better for the economy and much better for corporate governance. i actually think it reduces the risk in the system rather than increases it. ♪

♪ juliette: you are watching "bloomberg best." i'm juliette saly. let's return to our roundup of the week's top business stories with a focus on company news. general electric entered the new year with a new c.e.o. and new hope for a turnaround, but this week was rough for ge. vonnie: shares of general electric are falling today after the company said it would take a $6.2 billion charge in the fourth quarter because of lingering problems with its insurance business. in a statement, the g.e. c.e.o. said, "at a time when we are moving forward as a company, a charge of this magnitude from a legacy insurance portfolio in runoff for more than a decade is deeply disappointing." brooke: there has been increasing concern among analysts about ge capital, because even after they significantly reduced the size of the business in this is still 2015, a behemoth. one estimate from an analyst puts it as a top 20 u.s. bank, with over $140 billion in assets. i mean, this is huge, and very

opaque in nature. we don't totally know everything in here, as evidenced by the extent of the charge they are taking in this insurance business. and there could still be more to come with different pieces of ge capital in terms of liability. not all of this is john flannery's fault, obviously, he has only been in this job since august. but in the time he has been there, we have had the bad news in october, the bad news in november, and if you are an investor you have to be saying, when is it going to end in terms of nasty surprises? emily: apple will return hundreds of billions of dollars in overseas cash to the united states. in a statement out wednesday, the company says it will pay $38 billion in repatriation tax. apple also plans on investing tens of billions in domestic jobs, manufacturing, and data centers in the coming years and give employees a $2500 bonus. that is after the new tax law. alex: 20,000 jobs is quite good news from a political

perspective. but given they have 84,000 employees already, that's quite a big bump. the thing that is interesting is if you really look at the numbers, the big number they want everybody to talk about is $350 billion in the u.s. over the next five years. the odds are they were going to spend most of that money already. the new money is $38 million for the tax bill and $30 billion spent on the u.s. if you subtract that from the $252 billion they have offshore, they still have a huge pile of cash, and that is what shareholders will be excited about in terms of buybacks and dividends. haidi: workers at one of apple's largest chinese suppliers have made allegations of harsh factory conditions. the main manufacturer of the iphone's distinctive brushed metal casings is now under fire over claims made to bloomberg news and a chinese labor watchdog. the company has now responded, saying it does meet apple's code for suppliers. but tell me about some of the details of the allegations and what we have learned. edwin: china labor watch, an

advocacy group, is making allegations about 14 separate violations of either apple's code of conduct or local law. they kind of run the gamut from labor violations such as forcing workers to pay for their own uniforms or equipment to certain environmental-type violations. although, as you mentioned, the company is denying it violates any sort of code of conduct or requirements. yvonne: the world's number two maker of construction and mining equipment says sales of diggers in china nearly doubled last year. turnaround in chinese demand has helped drag their stock to a -- helped drive their stock to a record high. a similar picture to what we heard from the likes of caterpillar in the u.s., a lot has to do with china. brian: absolutely, and it is not just komatsu in japan. it is also companies like hitachi construction.

they are all benefiting from these twin engines of growth. one is the infrastructure investment in highways and bridges. china has just entered the last half of its latest five-year plan, so there's a lot of push to get the projects done. the full run in commodities has been a big story last year and we expect it to continue this year. it has been a big driver of growth for all of the heavy equipment makers. manus: let's talk a little bit more about asml. they have had their first quarter sales that trailed estimates. europe's largest semiconductor equipment maker said its first-quarter revenue came in at 2.2 billion euros. the company also named a new chief financial officer. wolfgang: we just finished an absolute record year. we did over $9 billion in revenue, which is 33% up from

the prior year, and earnings topped $2 billion, which is 44% up over the prior year. we have a very, very positive outlook going into 2018. we will see significant growth in both revenue and in earnings. we have such strong demand that we pulled over $400 million in into the last quarter, therefore the revenue guidance for the first quarter is slightly lower. but if you take the two quarters combined, it is significantly better than what the street expected. shery: nestlé will sell its u.s. confectionery business to italian nutella maker ferrero. for about $2.8 billion. we were sort of expecting it. we have confirmation, what is the deal about? nabila: this is really about the shift away from unhealthy snacks. nestle wanted to get out of this business. they had been veering away from

chocolate and sugary sweets. they are now the leader in merc's consumer unit. they are trying to shift themselves away from that. the relatively new nestlé ceo, this is his biggest divestment to date as he repositions the sweets. away from for ferrero, this is about buying into the u.s. market, but nutella, as much as i love it, is not that huge in the u.s. so they need to diversify it here. francine: airbus closed 2017 on a high. the european playmaker announced this morning it booked a record number of contracts for 1000 jet -- 1109 jet lines, 52% more than 2016. john: it is in many ways a record for us. but in nine of the last 10 years, we outsold our competitor in seattle. it is more a continuation of a trend, i would like to say, but it was a very good year, and it was back end loaded. this industry is going through a

very good time, 7% growth in the world airlines. you've got about $35 billion in profits being forecast, airport congestion, high load factors. it means more airplanes and bigger airplanes. francine: emirates has ordered 36 airbus a380s. worth $16 billion. do we have any idea how much they are paying? guy: no way is he paying $16 billion, he had a massive discount. john leahy wanted to get it done before he left. he's handing over the job next week. and b, they want to keep the program alive. so tim clark is in the driver's seat. vonnie: amazon announcing they have narrowed the field of cities for the proposed new headquarters to 20. contenders include new york, boston, chicago, miami, austin,

texas -- any surprises here? paul: one of the ones that was interesting was raleigh, north carolina. it is in that research, triangle park area, sunbelt, growth city surrounded by a lot of universities. duke, n.c. state, but the question is do they have a big enough airport? but that is one of the interesting ones that is outside some of the bigger markets. i think a lot of observers are looking for something on the east coast to balance the pacific northwest of seattle, but there is a lot of interest in all the cities, and we will see over the next several months those cities put their best foot forward to make themselves stand out. yvonne: uber has completed its deal with softbank, triggering a series of governance reforms. the japanese conglomerate is now uber's top shareholder. tell us more about the changes expected at uber now that the deal is done. pavel: the biggest impact will come in the form of an expanded

board, which will be increased to about 17 seats. that is quite a lot of people by any company's standards. softbank will have two of those seats, strengthening the company's influence on decision-making going forward. another big difference is that the deal eliminates this two-tier voting structure for shares that heavily favored early backers as well as early employees. it also will put an end to a lot of internal strife that has handicapped the company, specifically ending a lawsuit by benchmark capital, one of their biggest backers against travis kalanick. ♪

♪ >> if you take a look at the bloomberg and the various business lines of merck, you

have got vaccines in blue, animal health in orange, and pharmaceuticals in white. overall, what you are looking at is tepid, if any, growth for the various revenue lines, particularly when you put them all together. juliette: there are about 30,000 functions on the bloomberg, and we always enjoy showing you our favorites on bloomberg television. maybe they will become your favorites. here's another function you will find useful, quic . it will take you to quick takes, where you can get fast insight and important context into timely topics. here is a quick take from this week. >> used to be when a colleague emailed you to say they are working from home, you might not have envisioned the most productive day. maybe he was doing some personal chores. maybe he had a bit too much to drink. maybe he was just slacking off. >> uh, what's your dad's job again? >> but telecommuting is legit. currently, over 60% of u.s. companies provide the option,

and it is often promoted as an extra perk to attract and retain talent, allowing companies to consider candidates in different cities or countries. but are remote workers productive workers? here's the situation. even as telecommuting rapidly expands as an option offered by u.s. businesses, a number of early adopters are beginning to second-guess the concept. when discussions on telecommuting began in the 1970's, the focus was less on productivity than it was on pollution. it was suggested that reducing the need to commute might curb the environmental damage caused by cars. in 1990, an amendment to the clean air act required companies with over 100 people in severely polluted areas to limit vehicular commuting. telecommuting didn't take off until the internet, especially as companies noticed unimportant ancillary benefit, dwindling real estate costs. between 1995 and 2005, ibm, an early adopter of telework,

reduced its physical space by 78 million square feet, which created at least $200 million in annual savings. but as more and more companies offered employees telecommuting benefits, some of the earliest pioneers have become skeptical. after 20 consecutive quarters of falling revenue, ibm calculated that its remote workers performed better in close proximity to colleagues. in 2017, thousands of remote ibm employees received an ultimatum -- move near an office or lose your job. best buy, once lauded for its innovative approach to flex scheduling, scaled-back in 2013, as did yahoo!. so why the change of heart? well, here's the argument. a survey conducted found that only 38% of companies in the world group employees by job types. the growing trend is to group employees with various functions into teams. critics of remote work argue this structure requires a level of collaboration that simply cannot be attained without face-to-face interaction. some bosses also suspect that workers abuse remote benefits.

on the other hand, studies show employees who telecommute are happier. they're also more productive, though that might be true for only certain types of workers. the most widely cited study was looking at call-center employees, whose jobs require little teamwork. some advocates argue that telecommuting could narrow the gender pay gap by allowing mothers to balance childcare with work duties. one study found that a spouse working from home is given more chores. so while certain aspects of telecommuting can be attractive for workers and businesses, just like anything else in life, everything in moderation. a review of studies concluded that the most successful arrangement involves at least some face time in an office. juliette: that was just one of the many quick takes you can find on the bloomberg. you can also find them at bloomberg.com, along with all the latest business news and analysis, 24 hours a day. that will be all for "bloomberg best" this week. thanks for watching. i'm juliette saly.

this is bloomberg. ♪

david: at one point, your father left your mother. ginni: it was sudden, and my mother found herself with four kids, no money. david: let's talk about ibm for a moment. ginni: we are the champions for business. david: when you are meeting with president trump or other presidents, do you see that ceos are willing to say, mr. president, that is not a good idea? ginni: my experience is people are respectfully honest and give their opinions. david: do you feel a certain responsibility? ginni: women do need role models. we are still a small minority that run these companies. david: in the stay fit category. ginni: i do box with a person.