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BHP Billiton Ltd (NYSE:BHP)
Cash Flow from Investing
$-7,245 Mil (TTM As of Dec. 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 Dec. 2016, BHP Billiton Ltd spent $2,435 Mil on purchasing property, plant, equipment. It gained $541 Mil from selling property, plant, and equipment. It spent $0 Mil on purchasing business. It gained $189 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 paid $217 Mil for other investing activities. In all, BHP Billiton Ltd spent $1,922 Mil on investment activities in financial market and operating subsidiaries for the six months ended in Dec. 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.

BHP Billiton Ltd's Cash Flow from Investing for the fiscal year that ended in Jun. 2016 is calculated as:

BHP Billiton Ltd's Cash Flow from Investing for the quarter that ended in Dec. 2016 is calculated as:

For company reported semi-annually, GuruFocus uses latest annual data as the TTM data. BHP Billiton Ltd Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2016 was $-7,245 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.

BHP Billiton Ltd's purchase of property, plant, equipment for the six months ended in Dec. 2016 was $-2,435 Mil. It means BHP Billiton Ltd spent $2,435 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.

BHP Billiton Ltd's sale of property, plant, equipment for the six months ended in Dec. 2016 was $541 Mil. It means BHP Billiton Ltd gained $541 Mil from selling property, plant, and equipment.

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

BHP Billiton Ltd's purchase of business for the six months ended in Dec. 2016 was $0 Mil. It means BHP Billiton Ltd spent $0 Mil on purchasing business.

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

BHP Billiton Ltd's sale of business for the six months ended in Dec. 2016 was $189 Mil. It means BHP Billiton Ltd gained $189 Mil from selling business.

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

BHP Billiton Ltd's purchase of investment for the six months ended in Dec. 2016 was $0 Mil. It means BHP Billiton Ltd spent $0 Mil on purchasing investments.

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

BHP Billiton Ltd's sale of investment for the six months ended in Dec. 2016 was $0 Mil. It means BHP Billiton 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.

BHP Billiton Ltd's net Intangibles purchase and sale for the six months ended in Dec. 2016 was $0 Mil. It means BHP Billiton 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.

BHP Billiton Ltd's cash from discontinued investing activities for the six months ended in Dec. 2016 was $0 Mil. It means BHP Billiton 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.

BHP Billiton Ltd's cash from other investing activities for the six months ended in Dec. 2016 was $-217 Mil. It means BHP Billiton Ltd paid $217 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 local exchange's currency.

BHP Billiton Ltd Annual Data

Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14Jun15Jun16
PurchaseOfPPE -7,934-8,908-10,735-9,626-11,406-19,486-21,399-15,512-12,093-7,281
SaleOfPPE 7743164132801462,2746674107
PurchaseOfBusiness 00-286-508-4,807-12,5560000
SaleOfBusiness 203781737606502812256166
PurchaseOfInvestment -739-320-40-152-238-554-539-1,237-860
SaleOfInvestment 98137963411801,92104450
NetIntangiblesPurchaseAndSale -18-16-141-85-211-219-380-192-900
CashFromDiscontinuedInvestingActivities 000000-1,105-700-1,0660
CashFromOtherInvestingActivities 0-78-126-15601780929-594-237
Cash Flow from Investing -8,313-9,064-11,051-9,985-16,464-32,485-18,726-15,834-13,154-7,245

BHP Billiton Ltd Semi-Annual Data

Jun12Dec12Jun13Dec13Jun14Dec14Jun15Dec15Jun16Dec16
PurchaseOfPPE -10,486-11,753-9,646-8,767-6,745-6,420-5,673-4,169-3,112-2,435
SaleOfPPE 75151,759412541337631541
PurchaseOfBusiness -7-4848-171700000
SaleOfBusiness 000628184251548118189
PurchaseOfInvestment -311-296-243-390-847-43-43000
SaleOfInvestment -921,70022100333112000
NetIntangiblesPurchaseAndSale -97-234-146-65-127-64-26000
CashFromDiscontinuedInvestingActivities 00000-415-651000
CashFromOtherInvestingActivities -532231-8341081210-5947-244-217
Cash Flow from Investing -11,518-9,885-8,841-8,462-7,372-6,317-6,837-4,038-3,207-1,922
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