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WellPoint Inc (NYSE:WLP)
Cash Flow from Investing
$-1,698 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, WellPoint Inc spent $136 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 $0 Mil from selling business. It spent $2,586 Mil on purchasing investments. It gained $2,560 Mil from selling investments. It paid $0 Mil for net Intangibles purchase and sale. It paid $0 Mil for discontinued investing activities. And it paid $622 Mil for other investing activities. In all, WellPoint Inc spent $783 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.

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

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

WellPoint Inc Cash Flow from Investing for the trailing twelve months (TTM) ended in Jun. 2014 was -23.4 (Sep. 2013 ) + -147.6 (Dec. 2013 ) + -744.3 (Mar. 2014 ) + -783 (Jun. 2014 ) = $-1,698 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.

WellPoint Inc's purchase of property, plant, equipment for the three months ended in Jun. 2014 was $-136 Mil. It means WellPoint Inc spent $136 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.

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

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

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

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

WellPoint Inc's sale of business for the three months ended in Jun. 2014 was $0 Mil. It means WellPoint Inc gained $0 Mil from selling business.

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

WellPoint Inc's purchase of investment for the three months ended in Jun. 2014 was $-2,586 Mil. It means WellPoint Inc spent $2,586 Mil on purchasing investments.

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

WellPoint Inc's sale of investment for the three months ended in Jun. 2014 was $2,560 Mil. It means WellPoint Inc gained $2,560 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.

WellPoint Inc's net Intangibles purchase and sale for the three months ended in Jun. 2014 was $0 Mil. It means WellPoint Inc 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.

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

WellPoint Inc's cash from other investing activities for the three months ended in Jun. 2014 was $-622 Mil. It means WellPoint Inc paid $622 Mil for 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.

WellPoint Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
PurchaseOfPPE -137-162-194-322-346-378-451-520-545-647
SaleOfPPE 91065713014039
PurchaseOfBusiness -2,240-2,590-25-299-198-66-0-600-4,5970
SaleOfBusiness 000054,6720000
PurchaseOfInvestment -7,249-21,988-13,633-10,004-7,164-7,555-11,010-12,478-15,637-14,886
SaleOfInvestment 7,2274,48013,3039,8007,9806,22910,76912,65415,91613,663
NetIntangiblesPurchaseAndSale 0000000000
CashFromDiscontinuedInvestingActivities 0000000000
CashFromOtherInvestingActivities 1615,82986-2325100-580-2311-404
Cash Flow from Investing -2,374-4,420-457-7696163,003-1,272-942-4,552-2,234

WellPoint Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
PurchaseOfPPE -124-102-149-170-108-142-159-238-136-136
SaleOfPPE 0-2000003900
PurchaseOfBusiness -1-904-87-3,605003,605000
SaleOfBusiness 000000007400
PurchaseOfInvestment -3,388-4,174-4,646-3,429-4,193-2,944-5,140-2,610-3,395-2,586
SaleOfInvestment 3,3773,2433,4995,7973,1182,3155,4422,7882,4012,560
NetIntangiblesPurchaseAndSale 0000000000
CashFromDiscontinuedInvestingActivities 0000000000
CashFromOtherInvestingActivities 156-4865140-13-97-3,772-127-355-622
Cash Flow from Investing 20-1,987-1,318-1,267-1,196-868-23-148-744-783
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