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Adobe Systems Inc (NAS:ADBE)
Cash Flow from Investing
$-1,261 Mil (TTM As of May. 2016)

Cash Flow from Investing covers the cash a company gains or spends from investment activities in financial market and operating subsidiaries. It also includes the cash the company used for property, plant and equipment (PPE).

For the three months ended in May. 2016, Adobe Systems Inc spent $54 Mil on purchasing property, plant, equipment. It gained $0 Mil from selling property, plant, and equipment. It spent $48 Mil on purchasing business. It gained $0 Mil from selling business. It spent $593 Mil on purchasing investments. It gained $443 Mil from selling investments. It paid $0 Mil for net Intangibles purchase and sale. It paid $0 Mil for discontinued investing activities. And it received $0 Mil from other investing activities. In all, Adobe Systems Inc spent $252 Mil on investment activities in financial market and operating subsidiaries for the three months ended in May. 2016.


Definition

Cash Flow from Investing covers the cash a company gains or spends from investment activities in financial market and operating subsidiaries. It also includes the cash the company used for property, plant and equipment (PPE).

If a company spends cash on property, plant and equipment (PPE), this will reduce their cash position. This is called Capital Expenditures (CPEX).

Likewise, if a company buys another company for cash, this will reduce their cash position.

Adobe Systems Inc's Cash Flow from Investing for the fiscal year that ended in Nov. 2015 is calculated as:

Adobe Systems Inc's Cash Flow from Investing for the quarter that ended in May. 2016 is calculated as:

Adobe Systems Inc Cash Flow from Investing for the trailing twelve months (TTM) ended in May. 2016 was -465.091 (Aug. 2015 ) + -285.987 (Nov. 2015 ) + -258.842 (Feb. 2016 ) + -251.505 (May. 2016 ) = $-1,261 Mil.

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.


Explanation

Cash flow from investing contains nine items:

1. Purchase Of Property, Plant, Equipment:
Purchase of PPE indicates the amount used to purchase property, plant, and equipment.

Adobe Systems Inc's purchase of property, plant, equipment for the three months ended in May. 2016 was $-54 Mil. It means Adobe Systems Inc spent $54 Mil on purchasing property, plant, equipment.

In the capital spending for property, plant and equipment (PPE), some part of spending may be from the expansion of business. The business needs more property, plant and equipment (PPE) as it grows. Another part may be from replacement of the property, plant and equipment (PPE) of existing business. For some companies, the cash spent on replacing of the property, plant and equipment (PPE) of the existing business will be close to the depreciation of property, plant and equipment (PPE) reported in the income statement.

In Warren Buffett’s definition of “Owner’s Earnings”, he deducts the estimate of the cost of replacing the property, plant and equipment (PPE) of the existing business from cash flow from operations. The cash spent on the new property, plant, and equipment is not deducted. The reason is because these are not costs of the existing business. In his 1986 letter to shareholders, Warren Buffett wrote this about owner earnings:

"These represent (a) reported earnings plus (b) depreciation, depletion, amortization, and certain other non-cash charges...less (c) the average annual amount of capitalized expenditures for plant and equipment, etc. that the business requires to fully maintain its long-term competitive position and its unit volume....Our owner-earnings equation does not yield the deceptively precise figures provided by GAAP, since (c) must be a guess - and one sometimes very difficult to make. Despite this problem, we consider the owner earnings figure, not the GAAP figure, to be the relevant item for valuation purposes...All of this points up the absurdity of the 'cash flow' numbers that are often set forth in Wall Street reports. These numbers routinely include (a) plus (b) - but do not subtract (c)."

2. Sale Of Property, Plant, Equipment:
Sale of PPE indicates the amount gained from selling property, plant, and equipment.

Adobe Systems Inc's sale of property, plant, equipment for the three months ended in May. 2016 was $0 Mil. It means Adobe Systems Inc gained $0 Mil from selling property, plant, and equipment.

3. Purchase Of Business:
Purchase of business indicates the amount used to purchase business.

Adobe Systems Inc's purchase of business for the three months ended in May. 2016 was $-48 Mil. It means Adobe Systems Inc spent $48 Mil on purchasing business.

4. Sale Of Business:
Sale of business indicates the amount gained from selling business.

Adobe Systems Inc's sale of business for the three months ended in May. 2016 was $0 Mil. It means Adobe Systems Inc gained $0 Mil from selling business.

5. Purchase Of Investment:
Purchase of Investments represents cash outflow on the purchase of investments in securities.

Adobe Systems Inc's purchase of investment for the three months ended in May. 2016 was $-593 Mil. It means Adobe Systems Inc spent $593 Mil on purchasing investments.

6. Sale Of Investment:
Sale of Investments represents cash inflow on the sale of investments in securities.

Adobe Systems Inc's sale of investment for the three months ended in May. 2016 was $443 Mil. It means Adobe Systems Inc gained $443 Mil from selling investments.

7. Net Intangibles Purchase And Sale:
Net Intangibles purchase and sale means the net cash inflow received by a company that comes from the purchase and sale of intangibles. It equals the cash received from sale of intangibles minus the cash spent on purchasing intangibles.

Adobe Systems Inc's net Intangibles purchase and sale for the three months ended in May. 2016 was $0 Mil. It means Adobe Systems Inc paid $0 Mil for net Intangibles purchase and sale.

8. Cash From Discontinued Investing Activities:
Cash from discontinued investing activities means the cash received by a company that comes from the discontinued investing activities.

Adobe Systems Inc's cash from discontinued investing activities for the three months ended in May. 2016 was $0 Mil. It means Adobe Systems Inc paid $0 Mil for discontinued investing activities.

9. Cash From Other Investing Activities:
Cash from other investing activities means the cash received by a company that comes from other investing activities.

Adobe Systems Inc's cash from other investing activities for the three months ended in May. 2016 was $0 Mil. It means Adobe Systems Inc received $0 Mil from other investing activities.


Related Terms

Cash Flow from Operations, Cash Flow from Financing, Cash Flow for Capital Expenditures, Purchase of PPE, Sale of PPE, Purchase of Business, Sale of Business, Purchase of Investment, Sale of Investment, Net Intangibles Purchase And Sale, Cash From Discontinued Investing, Cash From Other Investing


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Adobe Systems Inc Annual Data

Nov06Nov07Nov08Nov09Nov10Nov11Nov12Nov13Nov14Nov15
PurchaseOfPPE -83-132-112-120-170-210-271-188-148-185
SaleOfPPE 0000320024058
PurchaseOfBusiness 00-4-1,583-193-259-353-705-30-826
SaleOfBusiness 0000000000
PurchaseOfInvestment -1,620-2,694-2,506-1,337-2,629-1,927-1,806-2,126-2,032-2,088
SaleOfInvestment 1,4592,9862,3171,5391,7981,6391,5961,8171,7191,552
NetIntangiblesPurchaseAndSale 0000000000
CashFromDiscontinuedInvestingActivities 0000000000
CashFromOtherInvestingActivities 439-76032-0-0000
Cash Flow from Investing 19583-305-1,497-1,159-757-835-1,178-491-1,488

Adobe Systems Inc Quarterly Data

Feb14May14Aug14Nov14Feb15May15Aug15Nov15Feb16May16
PurchaseOfPPE -29-27-55-37-36-36-49-65-46-54
SaleOfPPE 0000000000
PurchaseOfBusiness 0000-800-6-2000-48
SaleOfBusiness 0000000000
PurchaseOfInvestment -382-521-522-607-335-362-748-642-586-593
SaleOfInvestment 317400407595472365352363374443
NetIntangiblesPurchaseAndSale 0000000000
CashFromDiscontinuedInvestingActivities 0000000000
CashFromOtherInvestingActivities 000-300-0-05800
Cash Flow from Investing -94-148-170-78-698-39-465-286-259-252
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