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Lorillard Inc (NYSE:LO)
Cash Flow from Operations
$1,467 Mil (TTM As of Mar. 2015)

Cash flow from operations refers to the cash brought in through a company’'s normal business operations. It is the cash flow before any investment or financing activities. It is the cash version of net income.

For the three months ended in Mar. 2015, Lorillard Inc's Net Income From Continuing Operations was $275 Mil. Its DDA was $17 Mil. Its Change In Working Capital was $536 Mil. Its cash flow from deferred tax was $4 Mil. Its Cash Flow from Discontinued Operations was $0 Mil. Its Stock Based Compensation was $4 Mil. And its Cash Flow from Others was $5 Mil. In all, Lorillard Inc's Cash Flow from Operations for the three months ended in Mar. 2015 was $841 Mil.


Definition

Cash flow from operations refers to the cash brought in through a company’'s normal business operations. It is the cash flow before any investment or financing activities. It is the cash version of net income.

Lorillard Inc's Cash Flow from Operations for the fiscal year that ended in Dec. 2014 is calculated as:

Lorillard Inc's Cash Flow from Operations for the quarter that ended in Mar. 2015 is

Lorillard Inc Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2015 was -628 (Jun. 2014 ) + 635 (Sep. 2014 ) + 619 (Dec. 2014 ) + 841 (Mar. 2015 ) = $1,467 Mil.

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.


Explanation

Cash flow from operations contains six items:

1. Net Income From Continuing Operations:
Net Income From Continuing Operations indicates the net income that a firm brings in from ongoing business activities. These activities are expected to continue into the next reporting period. It excludes extraordinary items, income from the cumulative effects of accounting changes, non-recurring items, income from tax loss carry forward, and preferred dividends.

Lorillard Inc's net income from continuing operations for the three months ended in Mar. 2015 was $275 Mil.

2. Depreciation, Depletion and Amortization:
Depreciation is a present expense that accounts for the past cost of an asset that is now providing benefits.
Depletion and amortization are synonyms for depreciation.
Generally:
• The term “depreciation” is used when discussing man made tangible assets
• The term “depletion” is used when discussing natural tangible assets
• The term “amortization” is used when discussing intangible assets

Lorillard Inc's depreciation, depletion and amortization for the three months ended in Mar. 2015 was $17 Mil.

3. Change In Working Capital:
Working Capital is a measure of a company's short term liquidity or its ability to cover short term liabilities. It is defined as the difference between a company's current assets and current liabilities. Changes in Working Capital is reported in the cash flow statement since it is one of the major ways in which net income can differ from operating cash flow.

Lorillard Inc's change in working capital for the three months ended in Mar. 2015 was $536 Mil. It means Lorillard Inc's working capital increased by $536 Mil from Dec. 2014 to Mar. 2015 .

4. Deferred Tax:
It is the cash flow generated from deferred tax.

Lorillard Inc's cash flow from deferred tax for the three months ended in Mar. 2015 was $4 Mil.

5. Cash Flow from Discontinued Operations:
Cash received by a company that comes from the sale of part of business.

Lorillard Inc's cash flow from discontinued operations for the three months ended in Mar. 2015 was $0 Mil.

6. Stock Based Compensation:
It is a way corporations use stock options to reward employees. It provides executives and employees the opportunity to share in the growth of the company and, if structured properly, can align their interests with the interests of the company's shareholders and investors, without burning the company's cash on hand.

Lorillard Inc's stock based compensation for the three months ended in Mar. 2015 was $4 Mil.

7. Cash Flow from Others:
These are cash differences caused by the change of inventory, accounts payable, accounts receivable etc. For instance, if a company pays its suppliers slower, its cash position will build up faster. If a company receives payments from its customers slower, its account receivables will rise, and its cash position will grow more slowly (or even shrink).

Lorillard Inc's cash flow from others for the three months ended in Mar. 2015 was $5 Mil.


Related Terms

Net Income From Continuing Operations, Depreciation, Depletion and Amortization, Change In Working Capital, Cash Flow from Discontinued Operations, Stock Based Compensation, Cash Flow from Others, Cash Flow from Investing


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Lorillard Inc Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
NetIncomeFromContinuingOperations 7068268988879481,0291,1161,0991,1801,187
CF_DDA 41211832323537395072
ChangeInWorkingCapital 83-2460-353224733733
CF_DeferredTax 11-20-6272-91-15-11-4227
Cash Flow from Disc. Op. 0000000000
Stock Based Compensation 00035816201820
Cash Flow from Others -21-25-32-118-4-18-10-21-10
Cash Flow from Operations 8207788829801,0371,0911,1831,1701,1921,329

Lorillard Inc Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
NetIncomeFromContinuingOperations 309328312258282271300289327275
CF_DDA 9111210171918191617
ChangeInWorkingCapital 209362-838290193409-942331235536
CF_DeferredTax 00-3003-7-6374
Cash Flow from Disc. Op. 0000000000
Stock Based Compensation 6455454564
Cash Flow from Others -4-6-5-10-39-4-1-3-25
Cash Flow from Operations 529699-517553457703-628635619841
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