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Medtronic Inc (NYSE:MDT)
Cash Flow from Investing
$-2,934 Mil (TTM As of Jul. 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 Jul. 2014, Medtronic Inc spent $109 Mil on purchasing property, plant, equipment. It gained $0 Mil from selling property, plant, and equipment. It spent $146 Mil on purchasing business. It gained $0 Mil from selling business. It spent $1,600 Mil on purchasing investments. It gained $1,853 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 $4 Mil for other investing activities. In all, Medtronic Inc spent $6 Mil on investment activities in financial market and operating subsidiaries for the three months ended in Jul. 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.

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

Medtronic Inc's Cash Flow from Investing for the quarter that ended in Jul. 2014 is calculated as:

Medtronic Inc Cash Flow from Investing for the trailing twelve months (TTM) ended in Jul. 2014 was -1186 (Oct. 2013 ) + -1217 (Jan. 2014 ) + -525 (Apr. 2014 ) + -6 (Jul. 2014 ) = $-2,934 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.

Medtronic Inc's purchase of property, plant, equipment for the three months ended in Jul. 2014 was $-109 Mil. It means Medtronic Inc spent $109 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.

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

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

Medtronic Inc's purchase of business for the three months ended in Jul. 2014 was $-146 Mil. It means Medtronic Inc spent $146 Mil on purchasing business.

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

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

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

Medtronic Inc's purchase of investment for the three months ended in Jul. 2014 was $-1,600 Mil. It means Medtronic Inc spent $1,600 Mil on purchasing investments.

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

Medtronic Inc's sale of investment for the three months ended in Jul. 2014 was $1,853 Mil. It means Medtronic Inc gained $1,853 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.

Medtronic Inc's net Intangibles purchase and sale for the three months ended in Jul. 2014 was $0 Mil. It means Medtronic 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.

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

Medtronic Inc's cash from other investing activities for the three months ended in Jul. 2014 was $-4 Mil. It means Medtronic Inc paid $4 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.

Medtronic Inc Annual Data

Apr05Apr06Apr07Apr08Apr09Apr10Apr11Apr12Apr13Apr14
PurchaseOfPPE -452-1,244-694-513-498-573-501-484-457-396
SaleOfPPE 0000000000
PurchaseOfBusiness 000-4,221-1,624-350-1,332-556-820-385
SaleOfBusiness 000000038600
PurchaseOfInvestment -1,805-8,065-11,837-6,433-2,960-7,478-9,043-9,704-12,321-10,895
SaleOfInvestment 8086,62710,8948,5572,8453,7919,3187,71710,5118,111
NetIntangiblesPurchaseAndSale 000-93-165-62-47-1500
CashFromDiscontinuedInvestingActivities 0000000000
CashFromOtherInvestingActivities -154-185-64-87-338-87-129-6-14-29
Cash Flow from Investing -1,603-2,867-1,701-2,790-2,740-4,759-1,734-2,662-3,101-3,594

Medtronic Inc Quarterly Data

Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14
PurchaseOfPPE -110-103-108-125-121-78-118-95-105-109
SaleOfPPE 0000000000
PurchaseOfBusiness 0-230-7970-17-1930-385-146
SaleOfBusiness 386000000000
PurchaseOfInvestment -3,990-2,740-3,902-2,875-2,804-2,757-2,962-2,273-2,903-1,600
SaleOfInvestment 3,2221,8954,0602,2082,3482,1952,0961,3152,5051,853
NetIntangiblesPurchaseAndSale -6000000000
CashFromDiscontinuedInvestingActivities 0000000000
CashFromOtherInvestingActivities 17-5-12-10-9-9-164363-4
Cash Flow from Investing -481-97649-1,587-587-666-1,186-1,217-525-6
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