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The Scotts Miracle Gro Co (NYSE:SMG)
Cash Flow from Investing
$-436 Mil (TTM As of Jun. 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 Jun. 2016, The Scotts Miracle Gro Co spent $11 Mil on purchasing property, plant, equipment. It gained $2 Mil from selling property, plant, and equipment. It spent $184 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 $0 Mil for net Intangibles purchase and sale. It paid $0 Mil for discontinued investing activities. And it received $176 Mil from other investing activities. In all, The Scotts Miracle Gro Co spent $17 Mil on investment activities in financial market and operating subsidiaries for the three months ended in Jun. 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.

The Scotts Miracle Gro Co's Cash Flow from Investing for the fiscal year that ended in Sep. 2015 is calculated as:

The Scotts Miracle Gro Co's Cash Flow from Investing for the quarter that ended in Jun. 2016 is calculated as:

The Scotts Miracle Gro Co Cash Flow from Investing for the trailing twelve months (TTM) ended in Jun. 2016 was -321.4 (Sep. 2015 ) + -16.8 (Dec. 2015 ) + -81.4 (Mar. 2016 ) + -16.6 (Jun. 2016 ) = $-436 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.

The Scotts Miracle Gro Co's purchase of property, plant, equipment for the three months ended in Jun. 2016 was $-11 Mil. It means The Scotts Miracle Gro Co spent $11 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.

The Scotts Miracle Gro Co's sale of property, plant, equipment for the three months ended in Jun. 2016 was $2 Mil. It means The Scotts Miracle Gro Co gained $2 Mil from selling property, plant, and equipment.

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

The Scotts Miracle Gro Co's purchase of business for the three months ended in Jun. 2016 was $-184 Mil. It means The Scotts Miracle Gro Co spent $184 Mil on purchasing business.

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

The Scotts Miracle Gro Co's sale of business for the three months ended in Jun. 2016 was $0 Mil. It means The Scotts Miracle Gro Co gained $0 Mil from selling business.

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

The Scotts Miracle Gro Co's purchase of investment for the three months ended in Jun. 2016 was $0 Mil. It means The Scotts Miracle Gro Co spent $0 Mil on purchasing investments.

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

The Scotts Miracle Gro Co's sale of investment for the three months ended in Jun. 2016 was $0 Mil. It means The Scotts Miracle Gro Co 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.

The Scotts Miracle Gro Co's net Intangibles purchase and sale for the three months ended in Jun. 2016 was $0 Mil. It means The Scotts Miracle Gro Co 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.

The Scotts Miracle Gro Co's cash from discontinued investing activities for the three months ended in Jun. 2016 was $0 Mil. It means The Scotts Miracle Gro Co 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.

The Scotts Miracle Gro Co's cash from other investing activities for the three months ended in Jun. 2016 was $176 Mil. It means The Scotts Miracle Gro Co received $176 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.

The Scotts Miracle Gro Co Annual Data

Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14Sep15
PurchaseOfPPE -57-54-60-75-83-73-69-60-88-362
SaleOfPPE 11112501446
PurchaseOfBusiness 000-90-8-7-8-114-180
SaleOfBusiness 000002540070
PurchaseOfInvestment 0000000-500
SaleOfInvestment 0000000000
NetIntangiblesPurchaseAndSale 0000000000
CashFromDiscontinuedInvestingActivities 0000000000
CashFromOtherInvestingActivities -118-19000-2005350
Cash Flow from Investing -174-72-59-83-59154-76-64-156-536

The Scotts Miracle Gro Co Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
PurchaseOfPPE -10-16-19-15-14-13-321-16-8-11
SaleOfPPE 0000500002
PurchaseOfBusiness 000-11-39-129-1-1-1-184
SaleOfBusiness 0000000000
PurchaseOfInvestment 00007400000
SaleOfInvestment 0000000000
NetIntangiblesPurchaseAndSale 0000000000
CashFromDiscontinuedInvestingActivities 0000000000
CashFromOtherInvestingActivities 43-15-0-74000-72176
Cash Flow from Investing -6-12-35-26-48-142-321-17-81-17
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