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TE Connectivity Ltd (NYSE:TEL)
Cash Flow from Investing
$-1,581 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 three months ended in Sep. 2016, TE Connectivity Ltd spent $208 Mil on purchasing property, plant, equipment. It gained $5 Mil from selling property, plant, and equipment. It spent $342 Mil on purchasing business. It gained $0 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 $0 Mil for discontinued investing activities. And it received $21 Mil from other investing activities. In all, TE Connectivity Ltd spent $524 Mil on investment activities in financial market and operating subsidiaries for the three 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.

TE Connectivity Ltd's Cash Flow from Investing for the fiscal year that ended in Sep. 2016 is calculated as:

TE Connectivity Ltd's Cash Flow from Investing for the quarter that ended in Sep. 2016 is calculated as:

TE Connectivity Ltd Cash Flow from Investing for the trailing twelve months (TTM) ended in Sep. 2016 was -121 (Dec. 2015 ) + 136 (Mar. 2016 ) + -1072 (Jun. 2016 ) + -524 (Sep. 2016 ) = $-1,581 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.

TE Connectivity Ltd's purchase of property, plant, equipment for the three months ended in Sep. 2016 was $-208 Mil. It means TE Connectivity Ltd spent $208 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.

TE Connectivity Ltd's sale of property, plant, equipment for the three months ended in Sep. 2016 was $5 Mil. It means TE Connectivity Ltd gained $5 Mil from selling property, plant, and equipment.

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

TE Connectivity Ltd's purchase of business for the three months ended in Sep. 2016 was $-342 Mil. It means TE Connectivity Ltd spent $342 Mil on purchasing business.

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

TE Connectivity Ltd's sale of business for the three months ended in Sep. 2016 was $0 Mil. It means TE Connectivity Ltd gained $0 Mil from selling business.

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

TE Connectivity Ltd's purchase of investment for the three months ended in Sep. 2016 was $0 Mil. It means TE Connectivity Ltd spent $0 Mil on purchasing investments.

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

TE Connectivity Ltd's sale of investment for the three months ended in Sep. 2016 was $0 Mil. It means TE Connectivity 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.

TE Connectivity Ltd's net Intangibles purchase and sale for the three months ended in Sep. 2016 was $0 Mil. It means TE Connectivity 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.

TE Connectivity Ltd's cash from discontinued investing activities for the three months ended in Sep. 2016 was $0 Mil. It means TE Connectivity 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.

TE Connectivity Ltd's cash from other investing activities for the three months ended in Sep. 2016 was $21 Mil. It means TE Connectivity Ltd received $21 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.

TE Connectivity Ltd Annual Data

Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14Sep15Sep16
PurchaseOfPPE -892-619-328-385-581-533-581-635-600-628
SaleOfPPE 72421316652322129178
PurchaseOfBusiness 000-93-731-1,384-6-522-1,725-1,336
SaleOfBusiness 00171500030333
PurchaseOfInvestment 0000000000
SaleOfInvestment 000115500000
NetIntangiblesPurchaseAndSale 00006800000
CashFromDiscontinuedInvestingActivities -4-15-30-18-1-17-37-250
CashFromOtherInvestingActivities -7041,4876924-138537-132,96942
Cash Flow from Investing -1,528895391-442-1,043-1,510-545-1,075636-1,581

TE Connectivity Ltd Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
PurchaseOfPPE -164-190-135-156-134-175-139-131-150-208
SaleOfPPE 410451471025
PurchaseOfBusiness 00-1,511-218310-6-988-342
SaleOfBusiness 0000000000
PurchaseOfInvestment 0000000000
SaleOfInvestment 0000000000
NetIntangiblesPurchaseAndSale 0000000000
CashFromDiscontinuedInvestingActivities 00-7-7-8-30000
CashFromOtherInvestingActivities -13-518-3102,971172736421
Cash Flow from Investing -173-604-1,651-379-1352,801-121136-1,072-524
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