Homer: If I recall correctly, severance packages are paid out over time (with an upfront chunk to help with shorterm expenses), but they are charged in the quarter that they are incured, much like stock options.
First and second quarter is where they need the most money, but that money does not have to be MADE in that quarter.Originally Posted by sxminvestor
What homer is saying is that Sirius XM had 400 million in cash and another 250 mil in credit facilities. After Q3 (homer is predicting cash burn of 100 mil), they will still have 300 million in cash, and their available credit facilities. If they are FCF positive for Q4 (which I strongly believe they will be), this ADDS to that number. That way in March when they need the money, they will have WELL OVER 300 million in cash, because the FCF from Q4 will be added to that 300 million.
The main question that homer and everyone else has is how much cash will they have vs how much will they be burning through in Q1 and Q2, and will they need to hold on to that cash for expenses or be able to pay off the rest of the debt with cash.
In addition to the 1 billion in debt, they also have their satellite payment and launch coming up soon that will need to be insured and paid for... but thats what they have the Lorel facility for. That should cover the large majority of it, if not all of the remaining payments.