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Pfizer Inc (NYSE:PFE)
Cash Flow from Investing
$-2,980 Mil (TTM As of Sep. 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 six months ended in Sep. 2016, Pfizer Inc spent $432 Mil on purchasing property, plant, equipment. It gained $0 Mil from selling property, plant, and equipment. It spent $13,063 Mil on purchasing business. It gained $0 Mil from selling business. It spent $8,071 Mil on purchasing investments. It gained $10,416 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 $6,769 Mil from other investing activities. In all, Pfizer Inc spent $4,381 Mil on investment activities in financial market and operating subsidiaries for the six months ended in Sep. 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.

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

Pfizer Inc's Cash Flow from Investing for the quarter that ended in Sep. 2016 is calculated as:

For company reported semi-annually, GuruFocus uses latest annual data as the TTM data. Pfizer Inc Cash Flow from Investing for the trailing twelve months (TTM) ended in Sep. 2016 was $-2,980 Mil.

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's 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.

Pfizer Inc's purchase of property, plant, equipment for the six months ended in Sep. 2016 was $-432 Mil. It means Pfizer Inc spent $432 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.

Pfizer Inc's sale of property, plant, equipment for the six months ended in Sep. 2016 was $0 Mil. It means Pfizer Inc gained $0 Mil from selling property, plant, and equipment.

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

Pfizer Inc's purchase of business for the six months ended in Sep. 2016 was $-13,063 Mil. It means Pfizer Inc spent $13,063 Mil on purchasing business.

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

Pfizer Inc's sale of business for the six months ended in Sep. 2016 was $0 Mil. It means Pfizer Inc gained $0 Mil from selling business.

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

Pfizer Inc's purchase of investment for the six months ended in Sep. 2016 was $-8,071 Mil. It means Pfizer Inc spent $8,071 Mil on purchasing investments.

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

Pfizer Inc's sale of investment for the six months ended in Sep. 2016 was $10,416 Mil. It means Pfizer Inc gained $10,416 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.

Pfizer Inc's net Intangibles purchase and sale for the six months ended in Sep. 2016 was $0 Mil. It means Pfizer 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.

Pfizer Inc's cash from discontinued investing activities for the six months ended in Sep. 2016 was $0 Mil. It means Pfizer 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.

Pfizer Inc's cash from other investing activities for the six months ended in Sep. 2016 was $6,769 Mil. It means Pfizer Inc received $6,769 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 local exchange's currency.

Pfizer Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
PurchaseOfPPE -2,203-1,991-1,701-1,205-1,513-1,660-1,327-1,206-1,199-1,397
SaleOfPPE 3000000000
PurchaseOfBusiness 00-1,184-43,123-273-3,282-1,050-15-195-16,466
SaleOfBusiness 000002,37611,850000
PurchaseOfInvestment -11,522-27,061-45,062-42,219-15,210-23,067-35,163-53,781-61,672-38,123
SaleOfInvestment 21,00430,46036,80554,64316,38616,32330,29248,68253,51946,993
NetIntangiblesPurchaseAndSale 00000-222-92-259-384-99
CashFromDiscontinuedInvestingActivities 0000000000
CashFromOtherInvestingActivities -2,181-613-1,69363211811,3751,644-3,9654,2776,112
Cash Flow from Investing 5,101795-12,835-31,272-4921,8436,154-10,544-5,654-2,980

Pfizer Inc Semi-Annual Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
PurchaseOfPPE -278-275-354-239-258-289-611-301-401-432
SaleOfPPE 0000000000
PurchaseOfBusiness 0-1950-678-1-15,643-144-110-4,506-13,063
SaleOfBusiness 0000000000
PurchaseOfInvestment -15,879-19,140-16,124-10,696-10,755-6,195-10,477-4,797-7,073-8,071
SaleOfInvestment 14,71913,77815,99912,63911,13514,3708,8499,0648,12010,416
NetIntangiblesPurchaseAndSale -50-286-42-7-5-36-510-960
CashFromDiscontinuedInvestingActivities 0000000000
CashFromOtherInvestingActivities -193,583-9935,573-2,2212,550210499-7226,769
Cash Flow from Investing -1,507-2,535-1,5146,592-2,105-5,243-2,2244,355-4,678-4,381
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