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HP Inc (NYSE:HPQ)
Cash Flow from Investing
$-923 Mil (TTM As of Jul. 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 Jul. 2016, HP Inc spent $81 Mil on purchasing property, plant, equipment. It gained $0 Mil from selling property, plant, and equipment. It spent $0 Mil on purchasing business. It gained $0 Mil from selling business. It spent $0 Mil on purchasing investments. It gained $121 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 $99 Mil from other investing activities. In all, HP Inc gained $139 Mil on investment activities in financial market and operating subsidiaries for the three months ended in Jul. 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.

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

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

HP Inc Cash Flow from Investing for the trailing twelve months (TTM) ended in Jul. 2016 was -807 (Oct. 2015 ) + -111 (Jan. 2016 ) + -144 (Apr. 2016 ) + 139 (Jul. 2016 ) = $-923 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.

HP Inc's purchase of property, plant, equipment for the three months ended in Jul. 2016 was $-81 Mil. It means HP Inc spent $81 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.

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

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

HP Inc's purchase of business for the three months ended in Jul. 2016 was $0 Mil. It means HP Inc spent $0 Mil on purchasing business.

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

HP Inc's sale of business for the three months ended in Jul. 2016 was $0 Mil. It means HP Inc gained $0 Mil from selling business.

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

HP Inc's purchase of investment for the three months ended in Jul. 2016 was $0 Mil. It means HP Inc spent $0 Mil on purchasing investments.

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

HP Inc's sale of investment for the three months ended in Jul. 2016 was $121 Mil. It means HP Inc gained $121 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.

HP Inc's net Intangibles purchase and sale for the three months ended in Jul. 2016 was $0 Mil. It means HP 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.

HP Inc's cash from discontinued investing activities for the three months ended in Jul. 2016 was $0 Mil. It means HP 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.

HP Inc's cash from other investing activities for the three months ended in Jul. 2016 was $99 Mil. It means HP Inc received $99 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.

HP Inc Annual Data

Oct07Oct08Oct09Oct10Oct11Oct12Oct13Oct14Oct15Oct16
PurchaseOfPPE -3,040-2,990-3,695-4,133-4,539-3,706-3,199-3,853-3,603-433
SaleOfPPE 5684254956029996176538434246
PurchaseOfBusiness 0-11,248-391-8,102-10,480-141-167-49-2,644-7
SaleOfBusiness 0001258987060475
PurchaseOfInvestment -282-178-160-51-96-972-1,243-1,086-259-126
SaleOfInvestment 425280171200686621,1531,347302133
NetIntangiblesPurchaseAndSale 0000000000
CashFromDiscontinuedInvestingActivities 0000000000
CashFromOtherInvestingActivities -6,79400000002460
Cash Flow from Investing -9,123-13,711-3,580-11,359-13,959-3,453-2,803-2,792-5,53448

HP Inc Quarterly Data

Jul14Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16
PurchaseOfPPE -1,060-956-947-779-916-961-120-86-81-146
SaleOfPPE 13214113081991140000
PurchaseOfBusiness 00-1-138-2,478-270000
SaleOfBusiness 0000000000
PurchaseOfInvestment -556-79-50-58-72-790000
SaleOfInvestment 6801233093123569312115
NetIntangiblesPurchaseAndSale 0000000000
CashFromDiscontinuedInvestingActivities 0000000000
CashFromOtherInvestingActivities 0-2300156900-6199295
Cash Flow from Investing -804-794-838-801-3,088-807-111-144139164
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