But because of lease expirations, the building's operating cash next year is projected at only $25 million, they said.

The ratio of net operating cash flows to short-term debt registered a positive number, as compared to 9MFY11's -0.15, but was still a dismal 0.01.

That is because the cost of option-related buybacks is not tallied in companies' operating cash flows, where investors go to figure free cash flow.

("The more debt a company has, the more operating cash flow it has to have to be as attractive," he said.)

While earnings fell 61 percent, they and the operating cash for the quarter were much better than many analysts had expected.

Mr. Semel said the company's core advertising business and its operating cash flows grew well, and he was unconcerned about quarterly variations.

In such a case, the company may be deriving additional operating cash by issuing shares or raising additional debt finance.

He added, "We have also assumed that the Treasury's end-of-quarter operating cash balance will drop by $2 billion, to $30 billion, on June 28."

At $40.62, the stock is selling at less than four times this year's expected operating cash flow of $11.50 a share, he said.

Additional operating cash was derived in 1968 through the sale of Kelvinator Appliance, once one of the firm's core operating units.