Letter to the Editor in Barron's

Following is my (extensively edited!) letter in the 9/20/10 Barron's:

The Sept. 6 Follow-Up article on the French drug company Sanofi's proposal to buy Genzyme ("How Not to Spend $18.5 Billion") quoted Sanofi CEO Chris Viehbacher as saying, "I personally don't believe that buybacks add any shareholder value." Apparently, Viehbacher has looked at the stock prices of Sanofi and other drug companies after buybacks and has decided that repurchases "don't work" because the stocks didn't climb afterward. But this ignores other factors that also affect share value and investor return, including anticipated changes in free cash flow, total debt, dividends and acquisitions. The net change in all of these factors–not just buybacks–will eventually be reflected in the stock price.

Found: McDonald's $700 Million in Buybacks

A reader emailed me in August about the "missing" $700 million in buybacks in McDonald's 2006 GAAP Cash Flow statement that I referenced on page 130 of my book. I have just found the $700 million. It is on page 35 of the 2006 annual report on the McDonald's website in the Cash Flow section. A footnote explains the $3.7 billion in buybacks referenced in the CEO's letter to shareholders includes $743.6 million for 18.6 million shares acquired in the 2006 Chipotle exchange.
The $743.6 million number is not in the $2959.4 million buyback number in the GAAP Cash Flow on page 42.
Why not?
I don't know.
The difference between the $2959.4 million number and the $3.7
billion number (sorry about the million/billions) is $759.6 million - "only"
$16.5 million off the $743.6 million.
Where is the $16.5 million?
I don't know.
If you know, please send me an email and I will post it here.
Thank you.