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Forest Laboratories Inc (NYSE:FRX)
Cash Flow from Investing
$-2,772 Mil (TTM As of Mar. 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 Mar. 2014, Forest Laboratories Inc spent $42 Mil on purchasing property, plant, equipment. It gained $0 Mil from selling property, plant, and equipment. It spent $2,900 Mil on purchasing business. It gained $0 Mil from selling business. It spent $383 Mil on purchasing investments. It gained $1,004 Mil from selling investments. It paid $231 Mil for net Intangibles purchase and sale. It paid $0 Mil for discontinued investing activities. And it paid $3 Mil for other investing activities. In all, Forest Laboratories Inc spent $2,555 Mil on investment activities in financial market and operating subsidiaries for the three months ended in Mar. 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.

Forest Laboratories Inc's Cash Flow from Investing for the fiscal year that ended in Mar. 2014 is calculated as:

Forest Laboratories Inc's Cash Flow from Investing for the quarter that ended in Mar. 2014 is calculated as:

Forest Laboratories Inc Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2014 was -93.081 (Jun. 2013 ) + -105.832 (Sep. 2013 ) + -17.784 (Dec. 2013 ) + -2555.401 (Mar. 2014 ) = $-2,772 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.

Forest Laboratories Inc's purchase of property, plant, equipment for the three months ended in Mar. 2014 was $-42 Mil. It means Forest Laboratories Inc spent $42 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.

Forest Laboratories Inc's sale of property, plant, equipment for the three months ended in Mar. 2014 was $0 Mil. It means Forest Laboratories Inc gained $0 Mil from selling property, plant, and equipment.

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

Forest Laboratories Inc's purchase of business for the three months ended in Mar. 2014 was $-2,900 Mil. It means Forest Laboratories Inc spent $2,900 Mil on purchasing business.

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

Forest Laboratories Inc's sale of business for the three months ended in Mar. 2014 was $0 Mil. It means Forest Laboratories Inc gained $0 Mil from selling business.

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

Forest Laboratories Inc's purchase of investment for the three months ended in Mar. 2014 was $-383 Mil. It means Forest Laboratories Inc spent $383 Mil on purchasing investments.

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

Forest Laboratories Inc's sale of investment for the three months ended in Mar. 2014 was $1,004 Mil. It means Forest Laboratories Inc gained $1,004 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.

Forest Laboratories Inc's net Intangibles purchase and sale for the three months ended in Mar. 2014 was $-231 Mil. It means Forest Laboratories Inc paid $231 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.

Forest Laboratories Inc's cash from discontinued investing activities for the three months ended in Mar. 2014 was $0 Mil. It means Forest Laboratories 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.

Forest Laboratories Inc's cash from other investing activities for the three months ended in Mar. 2014 was $-3 Mil. It means Forest Laboratories Inc paid $3 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.

Forest Laboratories Inc Annual Data

Mar05Mar06Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14
PurchaseOfPPE -89-56-30-35-41-32-38-81-64-118
SaleOfPPE 00000000014
PurchaseOfBusiness 0000000-1,2630-2,900
SaleOfBusiness 0000000000
PurchaseOfInvestment -1,113-827-2,560-3,142-2,236-2,638-2,942-2,026-3,476-1,295
SaleOfInvestment 9701,1012,0182,9842,1522,1412,9012,6972,9691,855
NetIntangiblesPurchaseAndSale 000-415-250-289-469-125-275
CashFromDiscontinuedInvestingActivities 0000000000
CashFromOtherInvestingActivities -200-00-0000-108-52
Cash Flow from Investing -252218-571-608-150-530-369-1,142-805-2,772

Forest Laboratories Inc Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
PurchaseOfPPE -13-31-19-19-13-14-15-35-26-42
SaleOfPPE 00000001400
PurchaseOfBusiness 000000000-2,900
SaleOfBusiness 0000000000
PurchaseOfInvestment -334-555-509-803-1,669-494-340-349-223-383
SaleOfInvestment 4705684776191,4314423162972381,004
NetIntangiblesPurchaseAndSale 1-4290-12500-12-330-231
CashFromDiscontinuedInvestingActivities 0000000000
CashFromOtherInvestingActivities -000-25-830-420-7-3
Cash Flow from Investing 124-446-51-354-334-65-93-106-18-2,555
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