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GlaxoSmithKline PLC (NYSE:GSK)
Cash Flow from Investing
$-1,052 Mil (TTM As of Mar. 2017)

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 Mar. 2017, GlaxoSmithKline PLC spent $321 Mil on purchasing property, plant, equipment. It gained $16 Mil from selling property, plant, and equipment. It spent $0 Mil on purchasing business. It gained $275 Mil from selling business. It spent $33 Mil on purchasing investments. It gained $7 Mil from selling investments. It paid $193 Mil for net Intangibles purchase and sale. It paid $0 Mil for discontinued investing activities. And it received $2 Mil from other investing activities. In all, GlaxoSmithKline PLC spent $246 Mil on investment activities in financial market and operating subsidiaries for the three months ended in Mar. 2017.


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.

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

Cash Flow from Investing(A: Dec. 2016 )
=Purchase of PPE+Sale of PPE+Purchase of Business
=-1926.34207241+122.347066167+21.2234706617
+Sale of Business+Purchase of Investment+Sale of Investment
+89.8876404494+-133.583021223+852.684144819
+Net Intangibles Purchase And Sale+Cash From Discontinued Investing+Cash From Other Investing
+-656.679151061+0+46.1922596754
=-1,584

GlaxoSmithKline PLC's Cash Flow from Investing for the quarter that ended in Mar. 2017 is calculated as:

GlaxoSmithKline PLC Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2017 was -360.795454545 (Jun. 2016 ) + -228.64651774 (Sep. 2016 ) + -217.228464419 (Dec. 2016 ) + -245.679012346 (Mar. 2017 ) = $-1,052 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.

GlaxoSmithKline PLC's purchase of property, plant, equipment for the three months ended in Mar. 2017 was $-321 Mil. It means GlaxoSmithKline PLC spent $321 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.

GlaxoSmithKline PLC's sale of property, plant, equipment for the three months ended in Mar. 2017 was $16 Mil. It means GlaxoSmithKline PLC gained $16 Mil from selling property, plant, and equipment.

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

GlaxoSmithKline PLC's purchase of business for the three months ended in Mar. 2017 was $0 Mil. It means GlaxoSmithKline PLC spent $0 Mil on purchasing business.

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

GlaxoSmithKline PLC's sale of business for the three months ended in Mar. 2017 was $275 Mil. It means GlaxoSmithKline PLC gained $275 Mil from selling business.

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

GlaxoSmithKline PLC's purchase of investment for the three months ended in Mar. 2017 was $-33 Mil. It means GlaxoSmithKline PLC spent $33 Mil on purchasing investments.

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

GlaxoSmithKline PLC's sale of investment for the three months ended in Mar. 2017 was $7 Mil. It means GlaxoSmithKline PLC gained $7 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.

GlaxoSmithKline PLC's net Intangibles purchase and sale for the three months ended in Mar. 2017 was $-193 Mil. It means GlaxoSmithKline PLC paid $193 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.

GlaxoSmithKline PLC's cash from discontinued investing activities for the three months ended in Mar. 2017 was $0 Mil. It means GlaxoSmithKline 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.

GlaxoSmithKline PLC's cash from other investing activities for the three months ended in Mar. 2017 was $2 Mil. It means GlaxoSmithKline PLC received $2 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.

GlaxoSmithKline PLC Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
PurchaseOfPPE -4,325-2,135-2,302-1,582-1,438-1,698-1,948-1,859-2,066-1,926
SaleOfPPE 8830781441561107561108122
PurchaseOfBusiness 0-675-4,532-552-411-3,611-405-158-4,79521
SaleOfBusiness 0000003,03435215,33890
PurchaseOfInvestment 0-143-297-530-173-530-231-144-147-134
SaleOfInvestment 9062237421,7634078003221,379853
NetIntangiblesPurchaseAndSale 0-685-161-772-262948-618-365-427-657
CashFromDiscontinuedInvestingActivities 0000000000
CashFromOtherInvestingActivities -1,9271,838463337190123151103-35346
Cash Flow from Investing -6,072-1,707-6,515-2,914-174-4,250859-1,6879,037-1,584

GlaxoSmithKline PLC Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
PurchaseOfPPE -648-366-421-508-799-412-459-435-749-321
SaleOfPPE 2321252142313010916
PurchaseOfBusiness -114000000000
SaleOfBusiness 015,030-45348-10-118311275
PurchaseOfInvestment -53-42-40-38-28-47-45-14-39-33
SaleOfInvestment 2801,22419115226203596137
NetIntangiblesPurchaseAndSale -153-179-226-172138-470-13179-205-193
CashFromDiscontinuedInvestingActivities 0000000000
CashFromOtherInvestingActivities 72-5,090-22-31-0-28570422
Cash Flow from Investing -59310,598-710-264-636-950-361-229-217-246
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