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BHP Billiton Ltd (NYSE:BHP)
Cash Flow from Investing
$-15,834 Mil (TTM As of Jun. 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 six months ended in Jun. 2014, BHP Billiton Ltd spent $7,520 Mil on purchasing property, plant, equipment. It gained $73 Mil from selling property, plant, and equipment. It spent $-17 Mil on purchasing business. It gained $184 Mil from selling business. It spent $847 Mil on purchasing investments. It gained $0 Mil from selling investments. It paid $127 Mil for net Intangibles purchase and sale. It paid $0 Mil for discontinued investing activities. And it received $848 Mil from other investing activities. In all, BHP Billiton Ltd spent $7,372 Mil on investment activities in financial market and operating subsidiaries for the six months ended in Jun. 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.

BHP Billiton Ltd's Cash Flow from Investing for the fiscal year that ended in Jun. 2014 is calculated as:

BHP Billiton Ltd's Cash Flow from Investing for the quarter that ended in Jun. 2014 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 Jun. 2014 was $-15,834 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.

BHP Billiton Ltd's purchase of property, plant, equipment for the six months ended in Jun. 2014 was $-7,520 Mil. It means BHP Billiton Ltd spent $7,520 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 Jun. 2014 was $73 Mil. It means BHP Billiton Ltd gained $73 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 Jun. 2014 was $17 Mil. It means BHP Billiton Ltd spent $-17 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 Jun. 2014 was $184 Mil. It means BHP Billiton Ltd gained $184 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 Jun. 2014 was $-847 Mil. It means BHP Billiton Ltd spent $847 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 Jun. 2014 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 Jun. 2014 was $-127 Mil. It means BHP Billiton Ltd paid $127 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 Jun. 2014 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 Jun. 2014 was $848 Mil. It means BHP Billiton Ltd received $848 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.

BHP Billiton Ltd Annual Data

Jun05Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14
PurchaseOfPPE -3,981-6,647-7,934-8,908-10,735-9,626-11,406-19,235-22,547-16,287
SaleOfPPE 1531037743164132801592,338114
PurchaseOfBusiness 0000-286-508-4,807-12,55600
SaleOfBusiness 0844203781737606502812
PurchaseOfInvestment -42-596-739-320-40-152-238-341-559-1,237
SaleOfInvestment 22715398599634001,7000
NetIntangiblesPurchaseAndSale 00-18-16-141-85-211-220-400-192
CashFromDiscontinuedInvestingActivities 0000000000
CashFromOtherInvestingActivities -5,523000-126-156118151240956
Cash Flow from Investing -9,166-6,143-8,313-9,064-11,051-9,985-16,464-32,036-18,726-15,834

BHP Billiton Ltd Semi-Annual Data

Dec09Jun10Dec10Jun11Dec11Jun12Dec12Jun13Dec13Jun14
PurchaseOfPPE -5,045-4,581-5,167-6,239-7,903-11,332-11,753-10,794-8,767-7,520
SaleOfPPE 345-2132456139205151,8234173
PurchaseOfBusiness 000-4,807-12,549-7-4848-1717
SaleOfBusiness 37339000000628184
PurchaseOfInvestment -103-49-65-173-243-98-296-263-390-847
SaleOfInvestment 30400001,700000
NetIntangiblesPurchaseAndSale -39-46-81-130-122-98-234-166-65-127
CashFromDiscontinuedInvestingActivities 0000000000
CashFromOtherInvestingActivities -160-504-5123-289446231511108848
Cash Flow from Investing -4,935-5,050-5,294-11,170-20,967-11,069-9,885-8,841-8,462-7,372
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