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Rite Aid Corp (NYSE:RAD)
Cash Flow from Investing
$-569 Mil (TTM As of May. 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 May. 2014, Rite Aid Corp spent $94 Mil on purchasing property, plant, equipment. It gained $0 Mil from selling property, plant, and equipment. It spent $65 Mil on purchasing business. It gained $0 Mil from selling business. It spent $0 Mil on purchasing investments. It gained $2 Mil from selling investments. It paid $20 Mil for net Intangibles purchase and sale. It paid $0 Mil for discontinued investing activities. And it received $0 Mil from other investing activities. In all, Rite Aid Corp spent $177 Mil on investment activities in financial market and operating subsidiaries for the three months ended in May. 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.

Rite Aid Corp's Cash Flow from Investing for the fiscal year that ended in Feb. 2014 is calculated as:

Rite Aid Corp's Cash Flow from Investing for the quarter that ended in May. 2014 is calculated as:

Rite Aid Corp Cash Flow from Investing for the trailing twelve months (TTM) ended in May. 2014 was -94.026 (Nov. 2013 ) + -78.084 (Feb. 2014 ) + -219.263 (Apr. 2014 ) + -177.361 (May. 2014 ) = $-569 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.

Rite Aid Corp's purchase of property, plant, equipment for the three months ended in May. 2014 was $-94 Mil. It means Rite Aid Corp spent $94 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.

Rite Aid Corp's sale of property, plant, equipment for the three months ended in May. 2014 was $0 Mil. It means Rite Aid Corp gained $0 Mil from selling property, plant, and equipment.

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

Rite Aid Corp's purchase of business for the three months ended in May. 2014 was $-65 Mil. It means Rite Aid Corp spent $65 Mil on purchasing business.

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

Rite Aid Corp's sale of business for the three months ended in May. 2014 was $0 Mil. It means Rite Aid Corp gained $0 Mil from selling business.

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

Rite Aid Corp's purchase of investment for the three months ended in May. 2014 was $0 Mil. It means Rite Aid Corp spent $0 Mil on purchasing investments.

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

Rite Aid Corp's sale of investment for the three months ended in May. 2014 was $2 Mil. It means Rite Aid Corp gained $2 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.

Rite Aid Corp's net Intangibles purchase and sale for the three months ended in May. 2014 was $-20 Mil. It means Rite Aid Corp paid $20 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.

Rite Aid Corp's cash from discontinued investing activities for the three months ended in May. 2014 was $0 Mil. It means Rite Aid Corp 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.

Rite Aid Corp's cash from other investing activities for the three months ended in May. 2014 was $0 Mil. It means Rite Aid Corp received $0 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.

Rite Aid Corp Annual Data

Feb05Feb06Feb07Feb08Feb09Feb10Feb11Feb12Feb13Feb14
PurchaseOfPPE -222-341-364-740-461-184-162-215-316-334
SaleOfPPE 926958000000
PurchaseOfBusiness 0000-000000
SaleOfBusiness 000016280664
PurchaseOfInvestment 0000000000
SaleOfInvestment 0000346530233028
NetIntangiblesPurchaseAndSale 0000-80-10-24-35-67-87
CashFromDiscontinuedInvestingActivities 0000000000
CashFromOtherInvestingActivities 948442-2,2520-00-0-024
Cash Flow from Investing -119-231-313-2,934-346-120-157-221-346-365

Rite Aid Corp Quarterly Data

Aug12Nov12Feb13May13Aug13Nov13Feb14Apr14May14Aug14
PurchaseOfPPE -70-85-83-81-90-84-79-115-94-99
SaleOfPPE 0000000000
PurchaseOfBusiness 0000000-70-65-4
SaleOfBusiness 4204000000
PurchaseOfInvestment 0000000000
SaleOfInvestment 512373414-824
NetIntangiblesPurchaseAndSale -11-26-21-12-24-29-23-17-20-20
CashFromDiscontinuedInvestingActivities 0000000000
CashFromOtherInvestingActivities -0-000-0159-90-0
Cash Flow from Investing -73-96-102-82-111-94-78-219-177-120
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