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Red Hat Inc  (NYSE:RHT) Cash Flow from Investing: $-212 Mil (TTM As of Aug. 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 Aug. 2017, Red Hat Inc spent $26 Mil on purchasing property, plant, equipment. It gained $0 Mil from selling property, plant, and equipment. It spent $84 Mil on purchasing business. It gained $0 Mil from selling business. It spent $110 Mil on purchasing investments. It gained $105 Mil from selling investments. It paid $8Mil for net Intangibles purchase and sale. And it paid $0 Mil for other investing activities. In all, Red Hat Inc spent $122 Mil on investment activities in financial market and operating subsidiaries for the three months ended in Aug. 2017.


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

* Premium members only.

Red Hat Inc Annual Data

Feb08 Feb09 Feb10 Feb11 Feb12 Feb13 Feb14 Feb15 Feb16 Feb17
Cash Flow from Investing Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -389.05 -108.26 -325.00 -512.11 -110.13

Red Hat Inc Quarterly Data

Nov12 Feb13 May13 Aug13 Nov13 Feb14 May14 Aug14 Nov14 Feb15 May15 Aug15 Nov15 Feb16 May16 Aug16 Nov16 Feb17 May17 Aug17
Cash Flow from Investing Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -33.24 -24.05 -14.79 -50.83 -121.97

Calculation

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.

Red Hat Inc's Cash Flow from Investing for the fiscal year that ended in Feb. 2017 is calculated as:

Red Hat Inc's Cash Flow from Investing for the quarter that ended in Aug. 2017 is calculated as:


Cash Flow from Investing for the trailing twelve months (TTM) ended in Aug. 2017 was -24.052 (Nov. 2016 ) + -14.788 (Feb. 2017 ) + -50.833 (May. 2017 ) + -121.972 (Aug. 2017 ) = $-212 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.

Red Hat Inc's purchase of property, plant, equipment for the three months ended in Aug. 2017 was $-26 Mil. It means Red Hat Inc spent $26 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.

Red Hat Inc's sale of property, plant, equipment for the three months ended in Aug. 2017 was $0 Mil. It means Red Hat Inc gained $0 Mil from selling property, plant, and equipment.

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

Red Hat Inc's purchase of business for the three months ended in Aug. 2017 was $-84 Mil. It means Red Hat Inc spent $84 Mil on purchasing business.

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

Red Hat Inc's sale of business for the three months ended in Aug. 2017 was $0 Mil. It means Red Hat Inc gained $0 Mil from selling business.

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

Red Hat Inc's purchase of investment for the three months ended in Aug. 2017 was $-110 Mil. It means Red Hat Inc spent {stock_data.stock.currency_symbol}}110 Mil on purchasing investments.

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

Red Hat Inc's sale of investment for the three months ended in Aug. 2017 was $105 Mil. It means Red Hat Inc gained $105 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.

Red Hat Inc's net Intangibles purchase and sale for the three months ended in Aug. 2017 was $-8 Mil. It means Red Hat Inc paid $8 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.

Red Hat Inc's cash from discontinued investing activities for the three months ended in Aug. 2017 was 0 Mil. It means Red Hat 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.

Red Hat Inc's cash from other investing activities for the three months ended in Aug. 2017 was $-0 Mil. It means Red Hat Inc paid $0 Mil for other investing activities.


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