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Herbalife Ltd (NYSE:HLF)
Cash Flow from Investing
$-211 Mil (TTM As of Sep. 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 Sep. 2014, Herbalife Ltd spent $34 Mil on purchasing property, plant, equipment. It gained $0 Mil from selling property, plant, and equipment. It spent $0 Mil on purchasing business. It gained $0 Mil from selling business. It spent $4 Mil on purchasing investments. It gained $0 Mil from selling investments. It paid $0 Mil for net Intangibles purchase and sale. It paid $0 Mil for discontinued investing activities. And it paid $0 Mil for other investing activities. In all, Herbalife Ltd spent $39 Mil on investment activities in financial market and operating subsidiaries for the three months ended in Sep. 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.

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

Herbalife Ltd's Cash Flow from Investing for the quarter that ended in Sep. 2014 is calculated as:

Herbalife Ltd Cash Flow from Investing for the trailing twelve months (TTM) ended in Sep. 2014 was -59.161 (Dec. 2013 ) + -61.739 (Mar. 2014 ) + -51.32 (Jun. 2014 ) + -38.706 (Sep. 2014 ) = $-211 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.

Herbalife Ltd's purchase of property, plant, equipment for the three months ended in Sep. 2014 was $-34 Mil. It means Herbalife Ltd spent $34 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.

Herbalife Ltd's sale of property, plant, equipment for the three months ended in Sep. 2014 was $0 Mil. It means Herbalife Ltd gained $0 Mil from selling property, plant, and equipment.

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

Herbalife Ltd's purchase of business for the three months ended in Sep. 2014 was $0 Mil. It means Herbalife Ltd spent $0 Mil on purchasing business.

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

Herbalife Ltd's sale of business for the three months ended in Sep. 2014 was $0 Mil. It means Herbalife Ltd gained $0 Mil from selling business.

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

Herbalife Ltd's purchase of investment for the three months ended in Sep. 2014 was $-4 Mil. It means Herbalife Ltd spent $4 Mil on purchasing investments.

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

Herbalife Ltd's sale of investment for the three months ended in Sep. 2014 was $0 Mil. It means Herbalife Ltd 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.

Herbalife Ltd's net Intangibles purchase and sale for the three months ended in Sep. 2014 was $0 Mil. It means Herbalife Ltd 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.

Herbalife Ltd's cash from discontinued investing activities for the three months ended in Sep. 2014 was $0 Mil. It means Herbalife Ltd 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.

Herbalife Ltd's cash from other investing activities for the three months ended in Sep. 2014 was $-0 Mil. It means Herbalife Ltd paid $0 Mil for 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.

Herbalife Ltd Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
PurchaseOfPPE -23-32-62-42-89-60-68-90-122-147
SaleOfPPE 0000000000
PurchaseOfBusiness 00000-100000
SaleOfBusiness 0000000000
PurchaseOfInvestment 00000-2-100-4
SaleOfInvestment 0000000000
NetIntangiblesPurchaseAndSale 0000000000
CashFromDiscontinuedInvestingActivities 0000000000
CashFromOtherInvestingActivities 14-1-4-24-00-2-4-0
Cash Flow from Investing -9-33-67-43-85-71-69-92-125-151

Herbalife Ltd Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
PurchaseOfPPE -15-20-62-25-31-36-55-59-47-34
SaleOfPPE 0000000000
PurchaseOfBusiness 0000000000
SaleOfBusiness 0000000000
PurchaseOfInvestment 000000-4-3-4-4
SaleOfInvestment 0000000000
NetIntangiblesPurchaseAndSale 0000000000
CashFromDiscontinuedInvestingActivities 0000000000
CashFromOtherInvestingActivities -0-1-0000000-0
Cash Flow from Investing -15-20-63-25-31-36-59-62-51-39
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