How Is Sirius XM Spending Its Cash?

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Sirius XM

Sirius XM is raising substantial debt mainly for the purpose of share repurchases. The company’s outstanding share count is in the order of 5 billion and its stock has been somewhat stable over the past few years. In order to provide some returns to its stock holders and lower its outstanding share count, Sirius is making significant stock  repurchases. However, since its cash flow from operations aren’t much compared to the amount of repurchases, the company is financing this through debt. Over the past three years, Sirius has raised close to $7.3 billion in debt and it has repaid just $3.7 billion. During the same time, the company has returned $6.2 billion to shareholders. With Sirius XM’s debt now at $6.1 billion, it may not look to raise further debt, at least not more than it can pay. The company’s cash flow from operations was comparatively low at $500 million last year. However, we expect it to jump significantly going forward, which should place it in a good position to pay off debt.

corrected sirius xm cash flow

Have more questions about Sirius XM? See the links below:

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Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Sirius XM
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