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NRG Energy Inc (NYSE:NRG)
Cash Flow from Investing
$-824 Mil (TTM As of Dec. 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 Dec. 2016, NRG Energy Inc spent $314 Mil on purchasing property, plant, equipment. It gained $0 Mil from selling property, plant, and equipment. It spent $191 Mil on purchasing business. It gained $0 Mil from selling business. It spent $184 Mil on purchasing investments. It gained $154 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 $32 Mil from other investing activities. In all, NRG Energy Inc spent $503 Mil on investment activities in financial market and operating subsidiaries for the three months ended in Dec. 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.

NRG Energy Inc's Cash Flow from Investing for the fiscal year that ended in Dec. 2016 is calculated as:

NRG Energy Inc's Cash Flow from Investing for the quarter that ended in Dec. 2016 is calculated as:

NRG Energy Inc Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2016 was -143 (Mar. 2016 ) + -326 (Jun. 2016 ) + 148 (Sep. 2016 ) + -503 (Dec. 2016 ) = $-824 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.

NRG Energy Inc's purchase of property, plant, equipment for the three months ended in Dec. 2016 was $-314 Mil. It means NRG Energy Inc spent $314 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.

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

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

NRG Energy Inc's purchase of business for the three months ended in Dec. 2016 was $-191 Mil. It means NRG Energy Inc spent $191 Mil on purchasing business.

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

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

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

NRG Energy Inc's purchase of investment for the three months ended in Dec. 2016 was $-184 Mil. It means NRG Energy Inc spent $184 Mil on purchasing investments.

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

NRG Energy Inc's sale of investment for the three months ended in Dec. 2016 was $154 Mil. It means NRG Energy Inc gained $154 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.

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

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

NRG Energy Inc's cash from other investing activities for the three months ended in Dec. 2016 was $32 Mil. It means NRG Energy Inc received $32 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.

NRG Energy Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
PurchaseOfPPE -481-899-812-740-2,329-3,397-1,987-909-1,283-1,244
SaleOfPPE 01400000000
PurchaseOfBusiness 00-427-1,006-377-81-494-2,936-31-209
SaleOfBusiness 00284009830000
PurchaseOfInvestment -49-700-311-364-472-461-514-722-1,024-585
SaleOfInvestment 2582279307385399488600631510
NetIntangiblesPurchaseAndSale 00-38-34-19-15-1600
CashFromDiscontinuedInvestingActivities 0000000000
CashFromOtherInvestingActivities 20133171214-235296-261,080222704
Cash Flow from Investing -327-672-954-1,623-3,047-2,262-2,528-2,903-1,485-824

NRG Energy Inc Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
PurchaseOfPPE -168-234-252-331-346-354-291-358-281-314
SaleOfPPE 0000000000
PurchaseOfBusiness -1,015-104-1-29-10-6-11-1-191
SaleOfBusiness 0000000000
PurchaseOfInvestment -200-160-237-470-150-167-204-76-121-184
SaleOfInvestment 1481162011571511221927589154
NetIntangiblesPurchaseAndSale 000000-53170
CashFromDiscontinuedInvestingActivities 0000000000
CashFromOtherInvestingActivities 304371983-261461714144532
Cash Flow from Investing -1,20555-270-590-372-253-143-326148-503
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