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Tesco PLC (OTCPK:TSCDY)
Cash Flow from Investing
$-879 Mil (TTM As of Aug. 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 six months ended in Aug. 2016, Tesco PLC spent $637 Mil on purchasing property, plant, equipment. It gained $313 Mil from selling property, plant, and equipment. It spent $16 Mil on purchasing business. It gained $277 Mil from selling business. It spent $1,271 Mil on purchasing investments. It gained $206 Mil from selling investments. It paid $100 Mil for net Intangibles purchase and sale. It paid $0 Mil for discontinued investing activities. And it received $47 Mil from other investing activities. In all, Tesco PLC spent $1,181 Mil on investment activities in financial market and operating subsidiaries for the six months ended in Aug. 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.

Tesco PLC's Cash Flow from Investing for the fiscal year that ended in Feb. 2016 is calculated as:

Tesco PLC's Cash Flow from Investing for the quarter that ended in Aug. 2016 is calculated as:

Cash Flow from Investing(Q: Aug. 2016 )
=Purchase of PPE+Sale of PPE+Purchase of Business
=-636.959370904+313.237221494+-15.7273918742
+Sale of Business+Purchase of Investment+Sale of Investment
+276.539973788+-1271.29750983+205.766710354
+Net Intangibles Purchase And Sale+Cash From Discontinued Investing+Cash From Other Investing
+-99.6068152031+0+47.1821756225
=-1,181

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. 2016 was $-879 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.

Tesco PLC's purchase of property, plant, equipment for the six months ended in Aug. 2016 was $-637 Mil. It means Tesco PLC spent $637 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. 2016 was $313 Mil. It means Tesco PLC gained $313 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. 2016 was $-16 Mil. It means Tesco PLC spent $16 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. 2016 was $277 Mil. It means Tesco PLC gained $277 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. 2016 was $-1,271 Mil. It means Tesco PLC spent $1,271 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. 2016 was $206 Mil. It means Tesco PLC gained $206 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. 2016 was $-100 Mil. It means Tesco PLC paid $100 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. 2016 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. 2016 was $47 Mil. It means Tesco PLC received $47 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.

Tesco PLC Annual Data

Feb07Feb08Feb09Feb10Feb11Feb12Feb13Feb14Feb15Feb16
PurchaseOfPPE -5,933-7,073-6,792-4,716-5,727-5,330-4,054-4,121-3,051-1,244
SaleOfPPE 1,5862,0751,4342,8503,0791,8032,091944374500
PurchaseOfBusiness -733-452-1,883-108-424-180-356-41-959-574
SaleOfBusiness 124000003910104,899
PurchaseOfInvestment 00000-1,2120-1,2620-4,281
SaleOfInvestment 0000001,11607220
NetIntangiblesPurchaseAndSale 00000-528-570-649-505-239
CashFromDiscontinuedInvestingActivities 0000000000
CashFromOtherInvestingActivities 363-354-1,380-959744191,30330332761
Cash Flow from Investing -4,594-5,804-8,620-2,933-2,998-5,028-430-4,725-3,090-879

Tesco PLC Semi-Annual Data

Feb12Aug12Feb13Aug13Feb14Aug14Feb15Aug15Feb16Aug16
PurchaseOfPPE -2,509-2,219-1,870-1,803-2,195-1,713-1,477-674-626-637
SaleOfPPE 9041,237873140795155232229290313
PurchaseOfBusiness 47-212-147-8448-1,007-34-156-431-16
SaleOfBusiness -177107-6700002014,714277
PurchaseOfInvestment 26400-276-967-1,7311,59000-1,271
SaleOfInvestment -1,65969243500006280206
NetIntangiblesPurchaseAndSale -254-335-240-262-369-245-279-125-124-100
CashFromDiscontinuedInvestingActivities 0000000000
CashFromOtherInvestingActivities 3401971,11024514218587934-4,82747
Cash Flow from Investing -3,044-53394-2,040-2,546-4,356911137-1,004-1,181
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