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National Grid PLC (NYSE:NGG)
Cash Flow from Investing
$-2,228 Mil (TTM As of Sep. 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 Sep. 2014, National Grid PLC spent $2,068 Mil on purchasing property, plant, equipment. It gained $2 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 $0 Mil from selling investments. It paid $141 Mil for net Intangibles purchase and sale. It paid $0 Mil for discontinued investing activities. And it received $608 Mil from other investing activities. In all, National Grid PLC spent $1,600 Mil on investment activities in financial market and operating subsidiaries for the six months ended in Sep. 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.

National Grid PLC's Cash Flow from Investing for the fiscal year that ended in Mar. 2014 is calculated as:

National Grid PLC's Cash Flow from Investing for the quarter that ended in Sep. 2014 is calculated as:

For company reported semi-annually, GuruFocus uses latest annual data as the TTM data. National Grid PLC Cash Flow from Investing for the trailing twelve months (TTM) ended in Sep. 2014 was $-2,228 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.

National Grid PLC's purchase of property, plant, equipment for the six months ended in Sep. 2014 was $-2,068 Mil. It means National Grid PLC spent $2,068 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.

National Grid PLC's sale of property, plant, equipment for the six months ended in Sep. 2014 was $2 Mil. It means National Grid PLC gained $2 Mil from selling property, plant, and equipment.

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

National Grid PLC's purchase of business for the six months ended in Sep. 2014 was $0 Mil. It means National Grid PLC spent $0 Mil on purchasing business.

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

National Grid PLC's sale of business for the six months ended in Sep. 2014 was $0 Mil. It means National Grid PLC gained $0 Mil from selling business.

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

National Grid PLC's purchase of investment for the six months ended in Sep. 2014 was $0 Mil. It means National Grid PLC spent $0 Mil on purchasing investments.

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

National Grid PLC's sale of investment for the six months ended in Sep. 2014 was $0 Mil. It means National Grid PLC 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.

National Grid PLC's net Intangibles purchase and sale for the six months ended in Sep. 2014 was $-141 Mil. It means National Grid PLC paid $141 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.

National Grid PLC's cash from discontinued investing activities for the six months ended in Sep. 2014 was $0 Mil. It means National Grid PLC 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.

National Grid PLC's cash from other investing activities for the six months ended in Sep. 2014 was $608 Mil. It means National Grid PLC received $608 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.

National Grid PLC Annual Data

Mar05Mar06Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14
PurchaseOfPPE -2,395-3,092-4,344-5,608-4,569-4,612-4,841-5,035-4,922-4,931
SaleOfPPE 032425140234338497
PurchaseOfBusiness 00-535-6,935000000
SaleOfBusiness 0001090905842800
PurchaseOfInvestment 000-17,453-9,185-4,475-221-21-21-7
SaleOfInvestment 00017,4919,2245,578185842800
NetIntangiblesPurchaseAndSale 0-28-66-89-115-160-288-325-268-300
CashFromDiscontinuedInvestingActivities 09,965-2106,0401,54300000
CashFromOtherInvestingActivities -2,24753-3,39140812560-2,524381-4,7863,003
Cash Flow from Investing -4,6416,929-8,503-5,986-2,938-3,577-7,813-3,794-9,387-2,228

National Grid PLC Semi-Annual Data

Mar10Sep10Mar11Sep11Mar12Sep12Mar13Sep13Mar14Sep14
PurchaseOfPPE -2,425-2,329-2,440-2,325-5,035-2,650-2,398-2,370-2,466-2,068
SaleOfPPE 9162621363714602
PurchaseOfBusiness 0000000000
SaleOfBusiness 0330058400000
PurchaseOfInvestment -4,394-114-1030-10-2-200-70
SaleOfInvestment 00005842940000
NetIntangiblesPurchaseAndSale -106-122-162-126-325-174-103-50-248-141
CashFromDiscontinuedInvestingActivities 0000000000
CashFromOtherInvestingActivities 4,825-2,422-43528763-534-3,9972,544357608
Cash Flow from Investing -2,090-4,938-2,722-1,902-3,404-3,027-6,504130-2,363-1,600
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