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STMicroelectronics NV (NYSE:STM)
Cash Flow from Investing
$-829 Mil (TTM As of Jun. 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 Jun. 2014, STMicroelectronics NV spent $481 Mil on purchasing property, plant, equipment. It gained $0 Mil from selling property, plant, and equipment. It spent $0 Mil on purchasing business. It gained $19 Mil from selling business. It spent $59 Mil on purchasing investments. It gained $57 Mil from selling investments. It paid $479 Mil for net Intangibles purchase and sale. It paid $0 Mil for discontinued investing activities. And it received $532 Mil from other investing activities. In all, STMicroelectronics NV spent $411 Mil on investment activities in financial market and operating subsidiaries for the three months ended in Jun. 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.

STMicroelectronics NV's Cash Flow from Investing for the fiscal year that ended in Dec. 2013 is calculated as:

STMicroelectronics NV's Cash Flow from Investing for the quarter that ended in Jun. 2014 is calculated as:

STMicroelectronics NV Cash Flow from Investing for the trailing twelve months (TTM) ended in Jun. 2014 was 0 (Sep. 2013 ) + -379 (Dec. 2013 ) + -39 (Mar. 2014 ) + -411 (Jun. 2014 ) = $-829 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.

STMicroelectronics NV's purchase of property, plant, equipment for the three months ended in Jun. 2014 was $-481 Mil. It means STMicroelectronics NV spent $481 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.

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

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

STMicroelectronics NV's purchase of business for the three months ended in Jun. 2014 was $0 Mil. It means STMicroelectronics NV spent $0 Mil on purchasing business.

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

STMicroelectronics NV's sale of business for the three months ended in Jun. 2014 was $19 Mil. It means STMicroelectronics NV gained $19 Mil from selling business.

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

STMicroelectronics NV's purchase of investment for the three months ended in Jun. 2014 was $-59 Mil. It means STMicroelectronics NV spent $59 Mil on purchasing investments.

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

STMicroelectronics NV's sale of investment for the three months ended in Jun. 2014 was $57 Mil. It means STMicroelectronics NV gained $57 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.

STMicroelectronics NV's net Intangibles purchase and sale for the three months ended in Jun. 2014 was $-479 Mil. It means STMicroelectronics NV paid $479 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.

STMicroelectronics NV's cash from discontinued investing activities for the three months ended in Jun. 2014 was $0 Mil. It means STMicroelectronics NV 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.

STMicroelectronics NV's cash from other investing activities for the three months ended in Jun. 2014 was $532 Mil. It means STMicroelectronics NV received $532 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.

STMicroelectronics NV Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
PurchaseOfPPE -2,050-1,441-1,619-1,348-983-451-1,063-1,284-492-543
SaleOfPPE 0000000000
PurchaseOfBusiness 0000-1,694-18-11-100-15
SaleOfBusiness 000001,15500092
PurchaseOfInvestment 00-1,363-708-91-1,868-1,274-447-4500
SaleOfInvestment 006603513511,4721,5381,436630184
NetIntangiblesPurchaseAndSale 0000003426-86-79
CashFromDiscontinuedInvestingActivities 0000000000
CashFromOtherInvestingActivities -84-87-431-3200250-82-18
Cash Flow from Investing -2,134-1,528-2,753-1,737-2,417290-526-287-396-379

STMicroelectronics NV Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
PurchaseOfPPE -129-80-203-80-111-1220-543-114-481
SaleOfPPE 0000000000
PurchaseOfBusiness 00-11000-1500
SaleOfBusiness 0000000921919
PurchaseOfInvestment 0-1500-3000-13000-59
SaleOfInvestment 265402530050001845757
NetIntangiblesPurchaseAndSale -23-12-24-27-14-4500-79-10-479
CashFromDiscontinuedInvestingActivities 0000000000
CashFromOtherInvestingActivities 030-1-64390-189532
Cash Flow from Investing 113-199-203-107-81-1460-379-39-411
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