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General Electric Co (NYSE:GE)
Cash Flow from Investing
$-576 Mil (TTM As of Mar. 2014)

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 Mar. 2014, General Electric Co spent $3,361 Mil on purchasing property, plant, equipment. It gained $1,192 Mil from selling property, plant, and equipment. It spent $0 Mil on purchasing business. It gained $252 Mil from selling business. It spent $0 Mil on purchasing investments. It gained $0 Mil from selling investments. It paid $0 Mil for net Intangibles purchase and sale. It paid $90 Mil for discontinued investing activities. And it received $3,799 Mil from other investing activities. In all, General Electric Co gained $1,792 Mil on investment activities in financial market and operating subsidiaries for the three months ended in Mar. 2014.


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.

General Electric Co's Cash Flow from Investing for the fiscal year that ended in Dec. 2013 is calculated as:

General Electric Co's Cash Flow from Investing for the quarter that ended in Mar. 2014 is calculated as:

General Electric Co Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2014 was 5460 (Jun. 2013 ) + -4923 (Sep. 2013 ) + -2905 (Dec. 2013 ) + 1792 (Mar. 2014 ) = $-576 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.

General Electric Co's purchase of property, plant, equipment for the three months ended in Mar. 2014 was $-3,361 Mil. It means General Electric Co spent $3,361 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.

General Electric Co's sale of property, plant, equipment for the three months ended in Mar. 2014 was $1,192 Mil. It means General Electric Co gained $1,192 Mil from selling property, plant, and equipment.

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

General Electric Co's purchase of business for the three months ended in Mar. 2014 was $0 Mil. It means General Electric Co spent $0 Mil on purchasing business.

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

General Electric Co's sale of business for the three months ended in Mar. 2014 was $252 Mil. It means General Electric Co gained $252 Mil from selling business.

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

General Electric Co's purchase of investment for the three months ended in Mar. 2014 was $0 Mil. It means General Electric Co spent $0 Mil on purchasing investments.

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

General Electric Co's sale of investment for the three months ended in Mar. 2014 was $0 Mil. It means General Electric Co gained $0 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.

General Electric Co's net Intangibles purchase and sale for the three months ended in Mar. 2014 was $0 Mil. It means General Electric Co 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.

General Electric Co's cash from discontinued investing activities for the three months ended in Mar. 2014 was $-90 Mil. It means General Electric Co paid $90 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.

General Electric Co's cash from other investing activities for the three months ended in Mar. 2014 was $3,799 Mil. It means General Electric Co received $3,799 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.

General Electric Co Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
PurchaseOfPPE -12,936-13,762-15,788-17,803-16,010-8,634-9,800-12,650-15,119-13,458
SaleOfPPE 5,8396,0196,7958,45710,9756,4787,2085,8966,1845,883
PurchaseOfBusiness 00-11,573-17,215-28,110-7,842-1,212-11,20200
SaleOfBusiness 0012,89214,3204,9869,9783,06217,8273,8453,852
PurchaseOfInvestment 0000000000
SaleOfInvestment 00000000016,699
NetIntangiblesPurchaseAndSale 0000000000
CashFromDiscontinuedInvestingActivities -4,214-212-1,774-3,116-8761,551-1,354-714-288443
CashFromOtherInvestingActivities -27,112-27,144-43,199-54,147-6,36640,84734,53220,72516,68015,698
Cash Flow from Investing -38,423-35,099-52,647-69,504-35,40142,37832,43619,88211,30229,117

General Electric Co Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
PurchaseOfPPE -3,599-3,286-4,012-3,202-4,619-3,644-3,574-2,912-3,328-3,361
SaleOfPPE 1,2591,8198982,1191,3488291,7311,5591,7641,192
PurchaseOfBusiness -363000000000
SaleOfBusiness 61184334033,325272741882,751252
PurchaseOfInvestment 0000000000
SaleOfInvestment 0000016,6990000
NetIntangiblesPurchaseAndSale 0000000000
CashFromDiscontinuedInvestingActivities 7526-67-111-1368380-66346-90
CashFromOtherInvestingActivities -5186,6762,4678,688-1,15117,2466,482-3,592-4,4383,799
Cash Flow from Investing -2,5355,319-6817,897-1,23331,4855,460-4,923-2,9051,792
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