Share Repurchase

maybe the buyback was made with borrowed funds? so the interest costs or ammoritsation of discount or premium over the life of the bond can effect income statement.

I agree with you, it’s solely a balance sheet transaction as it doesn’t affect a company’s revenue or profit.

When a company buys back stock, it first reduces its cash account on the asset side of the balance sheet by the amount of the buyback. Say a company repurchases 100,000 shares for $50 each. The company would subtract $5 million from its cash balance. In the equity section, the company increases the “treasury stock” account by $5 million. Treasury stock represents money paid out to reacquire stock; it is a “contra equity” account that offsets contributed capital, so increasing treasury stock $5 million has the effect of reducing net contributed capital $5 million. The balance sheet is back in balance.

I may be wrong but maybe it deals with EPS? Obviously a lower share count will boost EPS. 

A share repurchase reduces future dividend payments, if they were paid in the first place. That’s a possibility.

Hmm…interesting. It’d hit Statement of Stockholders Equity. Not sure about income statement.  

It would effect your income statement. Think about it, how do you buy something? You either pay cash or use credit. both of these things have some kind of interest rate involved and last time I checked interest expense/gain is on the income statement