{
  "docId": "019dd923-622b-71dc-a6dc-022165a95b3b",
  "docSlug": "b11f53a9759d",
  "documentTitle": "ADT Corporation (ADT)",
  "authorId": "11_Corvex",
  "authorName": "Keith Meister",
  "documentKindSlug": "conference-presentation",
  "documentKindLabel": "Conference presentation",
  "sourceTypeSlug": "activist_investor",
  "sourceTypeLabel": "Activist investor",
  "presentationDate": "2012-10-24 00:00:00",
  "orientation": "portrait",
  "aspectRatio": 0.70665085,
  "pageNumber": 25,
  "pageCount": 50,
  "prevPage": 24,
  "nextPage": 26,
  "slideType": "thesis_headline",
  "function": "analyze_data",
  "density": "overcrowded",
  "nDataPoints": 35,
  "notes": "The slide uses a table to demonstrate the discrepancy between coupon rates and current market yields to support the argument for debt-equity optimization.",
  "elementsJson": [
    "headline_text",
    "bullet_list",
    "data_table",
    "footnote"
  ],
  "metadataConfidence": 1,
  "imagePath": null,
  "slideHref": "/slides/019dd923-622b-71dc-a6dc-022165a95b3b/25",
  "deckHref": "/decks/019dd923-622b-71dc-a6dc-022165a95b3b",
  "deckJsonHref": "/decks/019dd923-622b-71dc-a6dc-022165a95b3b.json",
  "deckAnchorHref": "/decks/019dd923-622b-71dc-a6dc-022165a95b3b#slide-25",
  "components": [
    {
      "bbox": null,
      "kind": "callout",
      "text": "By funding itself with 80% equity, we estimate the Company loses approximately $105 million annually or $286,540 per day of shareholders' money",
      "attrs": null,
      "subkind": null,
      "toolName": "Visual emphasis",
      "toolSlug": "visual-emphasis",
      "confidence": null,
      "componentId": "019dd953-25b5-768c-bb36-049a076eb605",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.08,
        "w": 0.6,
        "x": 0.239,
        "y": 0.405
      },
      "kind": "list",
      "text": "By funding itself with 80% equity, we estimate the Company loses approximately $105 million annually or $286,540 per day of shareholders' money(1)",
      "attrs": null,
      "subkind": "bullet",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "43e2a11c-3720-4217-b728-1cc6bcb0e68d",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.15,
        "w": 0.6,
        "x": 0.239,
        "y": 0.22
      },
      "kind": "list",
      "text": "We believe it is irresponsible for ADT not to capitalize on its current cost of funding. ADT's debt trades well above par only 3 months after issuance; 4.875% notes recently traded above 110. 5 year debt now yields only 1.7% pre-tax.",
      "attrs": null,
      "subkind": "bullet",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "e82cbeb6-0618-4148-a732-88f1f042a9d5",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": null,
      "kind": "metric",
      "text": "cost of capital: $286,540",
      "attrs": null,
      "subkind": "primary",
      "toolName": "Quantification",
      "toolSlug": "quantification",
      "confidence": null,
      "componentId": "019dd953-25b5-768c-bb36-080640babdfe",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.05,
        "w": 0.5,
        "x": 0.239,
        "y": 0.66
      },
      "kind": "source-note",
      "text": "(1) As compared to 3.0x leverage, with 4.5% pre-tax cost of debt, 35.0% long-term tax rate, and 7.0% equity cost of capital. (2) Note: Recent prices per Bloomberg (10/19/12).",
      "attrs": null,
      "subkind": null,
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "3f29d4cf-46d5-4f19-b306-7ee9e3cd5cce",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.12,
        "w": 0.6,
        "x": 0.239,
        "y": 0.515
      },
      "kind": "table",
      "text": "Table showing debt instruments, balances, coupons, market prices, yields, and tax-adjusted metrics.",
      "attrs": null,
      "subkind": "data",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "99804e63-87c3-469f-a7e1-1c99c3497ee8",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.03,
        "w": 0.35,
        "x": 0.239,
        "y": 0.165
      },
      "kind": "title",
      "text": "Significant Cost of Capital Arbitrage",
      "attrs": null,
      "subkind": "headline",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "4be82ede-dd43-45d0-86ea-694d42753dd0",
      "frameworkName": null,
      "frameworkSlug": null
    }
  ],
  "metrics": [],
  "tools": [
    {
      "name": "Table data",
      "slug": "table-data",
      "agent": null,
      "layer": "slide",
      "matchId": "1f739ed8-b864-4716-bfae-3c86316ca635",
      "evidence": "Table showing debt instruments, balances, coupons, market prices, yields, and tax-adjusted metrics.",
      "confidence": 0.9
    }
  ],
  "frameworks": [
    {
      "name": "capital-allocation-framework",
      "slug": null,
      "matchId": "ebba1b0a-ba5b-4a59-bce1-9a50a76e08f8",
      "evidence": "The slide explicitly discusses the cost of capital arbitrage and the inefficiency of the current debt-to-equity funding mix.",
      "confidence": 0.9
    }
  ],
  "arcBeats": [],
  "loops": [
    {
      "to": 25,
      "from": 5,
      "name": "Cost Of Inaction",
      "slug": "27-cost-of-inaction",
      "bestFor": "Urgent budget requests, compliance, risk mitigation",
      "matchId": "8ceff48f-9a91-4ff1-b01a-14f8b1bf3058",
      "evidence": "Slides 5 and 25 discuss the inefficiencies of the current capital structure and the benefits of optimization.",
      "position": 0,
      "objective": "Highlight the cost of maintaining the current capital structure and the benefits of change.",
      "structure": "The Status Quo -> The Hidden Costs Accumulating -> The Future State of Inaction -> The Tipping Point",
      "confidence": 0.7,
      "description": "Quantify what happens if the audience does nothing"
    }
  ],
  "imagePathAlt": null,
  "thumbSrc": null,
  "thumbSrcAlt": null,
  "locked": true
}