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Tesco PLC (OTCPK:TSCDY)
Cash Flow from Investing
$-419 Mil (TTM As of Aug. 2013)

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 Aug. 2013, Tesco PLC spent $1,849 Mil on purchasing property, plant, equipment. It gained $143 Mil from selling property, plant, and equipment. It spent $86 Mil on purchasing business. It gained $0 Mil from selling business. It spent $283 Mil on purchasing investments. It gained $0 Mil from selling investments. It paid $269 Mil for net Intangibles purchase and sale. It paid $0 Mil for discontinued investing activities. And it received $251 Mil from other investing activities. In all, Tesco PLC spent $2,092 Mil on investment activities in financial market and operating subsidiaries for the six months ended in Aug. 2013.


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.

Tesco PLC's Cash Flow from Investing for the fiscal year that ended in Feb. 2013 is calculated as:

Tesco PLC's Cash Flow from Investing for the quarter that ended in Aug. 2013 is calculated as:

For company reported semi-annually, GuruFocus uses latest annual data as the TTM data. Tesco PLC Cash Flow from Investing for the trailing twelve months (TTM) ended in Aug. 2013 was $-419 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.

Tesco PLC's purchase of property, plant, equipment for the six months ended in Aug. 2013 was $-1,849 Mil. It means Tesco PLC spent $1,849 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.

Tesco PLC's sale of property, plant, equipment for the six months ended in Aug. 2013 was $143 Mil. It means Tesco PLC gained $143 Mil from selling property, plant, and equipment.

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

Tesco PLC's purchase of business for the six months ended in Aug. 2013 was $-86 Mil. It means Tesco PLC spent $86 Mil on purchasing business.

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

Tesco PLC's sale of business for the six months ended in Aug. 2013 was $0 Mil. It means Tesco PLC gained $0 Mil from selling business.

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

Tesco PLC's purchase of investment for the six months ended in Aug. 2013 was $-283 Mil. It means Tesco PLC spent $283 Mil on purchasing investments.

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

Tesco PLC's sale of investment for the six months ended in Aug. 2013 was $0 Mil. It means Tesco 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.

Tesco PLC's net Intangibles purchase and sale for the six months ended in Aug. 2013 was $-269 Mil. It means Tesco PLC paid $269 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.

Tesco PLC's cash from discontinued investing activities for the six months ended in Aug. 2013 was $0 Mil. It means Tesco 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.

Tesco PLC's cash from other investing activities for the six months ended in Aug. 2013 was $251 Mil. It means Tesco PLC received $251 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.

Tesco PLC Annual Data

Feb04Feb05Feb06Feb07Feb08Feb09Feb10Feb11Feb12Feb13
PurchaseOfPPE -4,086-4,389-4,712-5,887-7,200-6,667-4,545-5,737-5,339-3,950
SaleOfPPE 1131,5681,1591,5742,1121,4082,7473,0841,8052,038
PurchaseOfBusiness -496-444-154-728-460-1,848-104-425-180-347
SaleOfBusiness 010012300000103
PurchaseOfInvestment -102-290-590000-1,103-1,2140
SaleOfInvestment 00000001,16202,152
NetIntangiblesPurchaseAndSale 00000000-528-555
CashFromDiscontinuedInvestingActivities 0000000000
CashFromOtherInvestingActivities -299686342360-360-1,354-92516419140
Cash Flow from Investing -4,870-2,859-3,424-4,558-5,908-8,462-2,827-3,003-5,036-419

Tesco PLC Semi-Annual Data

Feb09Aug09Feb10Aug10Feb11Aug11Feb12Aug12Feb13Aug13
PurchaseOfPPE -2,992-2,692-2,060-3,101-2,525-2,817-2,513-2,276-1,822-1,849
SaleOfPPE 4421,2511,5921,9341,0818979051,269851143
PurchaseOfBusiness -1,76915-117-159-260-22747-218-143-86
SaleOfBusiness 00000177-17711000
PurchaseOfInvestment 000-2,027995-1,47326400-283
SaleOfInvestment 0002,131-1,0451,656-1,6617101,4890
NetIntangiblesPurchaseAndSale 00000-273-255-344-234-269
CashFromDiscontinuedInvestingActivities 0000000000
CashFromOtherInvestingActivities -1,683494-1,381186-17679340202-48251
Cash Flow from Investing -6,001-931-1,967-1,036-1,931-1,981-3,049-54792-2,092
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