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Coca-Cola Co (NYSE:KO)
Cash Flow from Investing
$-308 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, Coca-Cola Co spent $442 Mil on purchasing property, plant, equipment. It gained $18 Mil from selling property, plant, and equipment. It spent $337 Mil on purchasing business. It gained $1,430 Mil from selling business. It spent $3,551 Mil on purchasing investments. It gained $4,176 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 $255 Mil for other investing activities. In all, Coca-Cola Co gained $1,039 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.

Coca-Cola Co's Cash Flow from Investing for the fiscal year that ended in Dec. 2016 is calculated as:

Coca-Cola Co's Cash Flow from Investing for the quarter that ended in Mar. 2017 is calculated as:

Coca-Cola Co Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2017 was -1285 (Jun. 2016 ) + -396 (Sep. 2016 ) + 334 (Dec. 2016 ) + 1039 (Mar. 2017 ) = $-308 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.

Coca-Cola Co's purchase of property, plant, equipment for the three months ended in Mar. 2017 was $-442 Mil. It means Coca-Cola Co spent $442 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.

Coca-Cola Co's sale of property, plant, equipment for the three months ended in Mar. 2017 was $18 Mil. It means Coca-Cola Co gained $18 Mil from selling property, plant, and equipment.

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

Coca-Cola Co's purchase of business for the three months ended in Mar. 2017 was $-337 Mil. It means Coca-Cola Co spent $337 Mil on purchasing business.

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

Coca-Cola Co's sale of business for the three months ended in Mar. 2017 was $1,430 Mil. It means Coca-Cola Co gained $1,430 Mil from selling business.

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

Coca-Cola Co's purchase of investment for the three months ended in Mar. 2017 was $-3,551 Mil. It means Coca-Cola Co spent $3,551 Mil on purchasing investments.

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

Coca-Cola Co's sale of investment for the three months ended in Mar. 2017 was $4,176 Mil. It means Coca-Cola Co gained $4,176 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.

Coca-Cola Co's net Intangibles purchase and sale for the three months ended in Mar. 2017 was $0 Mil. It means Coca-Cola Co 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.

Coca-Cola Co's cash from discontinued investing activities for the three months ended in Mar. 2017 was $0 Mil. It means Coca-Cola Co 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.

Coca-Cola Co's cash from other investing activities for the three months ended in Mar. 2017 was $-255 Mil. It means Coca-Cola Co paid $255 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 local exchange's currency.

Coca-Cola Co Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
PurchaseOfPPE -1,648-1,968-1,993-2,215-2,920-2,780-2,550-2,406-2,553-2,262
SaleOfPPE 23912910413410114311122385150
PurchaseOfBusiness -5,653-759-300-2,511-971-1,486-353-389-2,491-838
SaleOfBusiness 448479240972398208721485651,035
PurchaseOfInvestment -105-244-2,200-7,222-4,798-14,824-14,782-17,800-15,831-15,499
SaleOfInvestment 448004,0325,8117,79112,79112,98614,07916,624
NetIntangiblesPurchaseAndSale 0000000000
CashFromDiscontinuedInvestingActivities 0000000000
CashFromOtherInvestingActivities -448002,405-145-268-303-268-40-209
Cash Flow from Investing -6,719-2,363-4,149-4,405-2,524-11,404-4,214-7,506-6,186-999

Coca-Cola Co Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
PurchaseOfPPE -788-516-598-556-883-536-549-476-701-442
SaleOfPPE 73211217352912515818
PurchaseOfBusiness -46-603-1,681-205-2-688-35-44-71-337
SaleOfBusiness 7522918431492911293252901,430
PurchaseOfInvestment -3,702-4,003-2,978-5,025-3,825-4,763-4,282-3,688-2,766-3,551
SaleOfInvestment 3,4283,7462,5704,0873,6766,0103,5083,6923,4144,176
NetIntangiblesPurchaseAndSale 0000000000
CashFromDiscontinuedInvestingActivities 0000000000
CashFromOtherInvestingActivities 12314-45322775-68-256110-255
Cash Flow from Investing -948-812-2,944-1,657-773348-1,285-3963341,039
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