{
  "docId": "019dd923-622c-750b-8b97-886527a52ded",
  "docSlug": "9cbfb570a09e",
  "documentTitle": "Fairfax Financial Holdings Ltd. (FFH)",
  "authorId": "51_Muddy_Waters",
  "authorName": "Carson C. Block",
  "documentKindSlug": "research-note",
  "documentKindLabel": "Research note",
  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2024-02-15 00:00:00",
  "orientation": "portrait",
  "aspectRatio": 0.77272725,
  "pageNumber": 3,
  "pageCount": 5,
  "prevPage": 2,
  "nextPage": 4,
  "slideType": "expose_contradiction",
  "function": "expose_contradiction",
  "density": "dense",
  "nDataPoints": 18,
  "notes": "The slide highlights a potential accounting or disclosure discrepancy regarding the $335.4 million difference in expected vs. reported cash proceeds.",
  "elementsJson": [
    "paragraph",
    "numbered_list",
    "data_table",
    "footnote"
  ],
  "metadataConfidence": 0.95,
  "imagePath": null,
  "slideHref": "/slides/019dd923-622c-750b-8b97-886527a52ded/3",
  "deckHref": "/decks/019dd923-622c-750b-8b97-886527a52ded",
  "deckJsonHref": "/decks/019dd923-622c-750b-8b97-886527a52ded.json",
  "deckAnchorHref": "/decks/019dd923-622c-750b-8b97-886527a52ded#slide-3",
  "components": [
    {
      "bbox": null,
      "kind": "callout",
      "text": "Did that difference go to OMERS, which was the 40% shareholder? If so, why?",
      "attrs": null,
      "subkind": null,
      "toolName": "Visual emphasis",
      "toolSlug": "visual-emphasis",
      "confidence": null,
      "componentId": "019dd953-203e-77ad-a6b3-a9edebba85fd",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": null,
      "kind": "metric",
      "text": "cash consideration: $335.4 million",
      "attrs": null,
      "subkind": "primary",
      "toolName": "Quantification",
      "toolSlug": "quantification",
      "confidence": null,
      "componentId": "019dd953-203e-77ad-a6b3-adf7aaab9a58",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.15,
        "w": 0.66,
        "x": 0.17,
        "y": 0.09
      },
      "kind": "paragraph",
      "text": "The pro rata discrepancy grows to $335.4 million when looking at the cash consideration that CVC reported paying. a. Why does it seem that Fairfax received total consideration of $101.7 million less for its stake in RiverStone than an amount equal to 60% of the cash consideration CVC reported paying? b. Why does it seem that Fairfax received $335.4 million less cash for its stake in RiverStone than an amount equal to 60% of the cash consideration CVC reported paying?",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "38f02b2a-2b99-4350-b4f9-cf034c7eee65",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.12,
        "w": 0.66,
        "x": 0.17,
        "y": 0.26
      },
      "kind": "paragraph",
      "text": "CVC acquired RiverStone from OMERS and Fairfax in August 2021 through a subsidiary of Gatland Holdings Jersey Ltd. (“Gatland”). Gatland’s accounts show that it paid cash of $1.329 billion for RiverStone (see below). Based on its 60% ownership, Fairfax should have received $797.4 million cash; however, it reports only receiving $695.7 million, only $462 million of which was cash ($200 million was non-voting shares plus a $35.8 million pension asset). Did that difference go to OMERS, which was the 40% shareholder? If so, why?",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "873afb18-c95f-41a2-87f3-ff362ea342de",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.05,
        "w": 0.66,
        "x": 0.17,
        "y": 0.79
      },
      "kind": "paragraph",
      "text": "Investors benefit from this clarification as it pertains to the machinations of Fairfax’s disposal transaction structures and possibly even to the accuracy of Fairfax’s accounts.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "93108c0a-7cd8-417d-a1b0-54170a93fc81",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.05,
        "w": 0.35,
        "x": 0.17,
        "y": 0.9
      },
      "kind": "source-note",
      "text": "3 Gatland 2021 AR, p. 50. 4 Fairfax Financial Holdings 6-K Q3 2021, Pg. 3.",
      "attrs": null,
      "subkind": null,
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "9b44bda7-fe5f-45b4-b072-1c9de421bc2c",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.35,
        "w": 0.54,
        "x": 0.23,
        "y": 0.4
      },
      "kind": "table",
      "text": "Gatland Holdings Jersey Limited table showing Book Value of Net Assets, Fair Value Adjustments, and Adjusted Net Assets for various asset/liability categories.",
      "attrs": null,
      "subkind": "data",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "34cb4050-f3a2-4e18-acdf-2af03f3f27ce",
      "frameworkName": null,
      "frameworkSlug": null
    }
  ],
  "metrics": [],
  "tools": [],
  "frameworks": [],
  "arcBeats": [
    {
      "to": 3,
      "from": 3,
      "beatId": "1e0cbf51-bfad-4d16-9029-d1a2f80415d0",
      "arcName": "Problem-Agitate-Solution",
      "arcSlug": "problem-agitate-solution",
      "beatName": "Agitate",
      "beatSlug": "problem-agitate-solution-agitate-make-it-worse",
      "evidence": "The expose contradiction slides highlight specific discrepancies",
      "position": 1,
      "confidence": 0.8,
      "parentBeatName": "Development",
      "parentBeatSlug": "development"
    }
  ],
  "loops": [
    {
      "to": 3,
      "from": 3,
      "name": "Aha Moment",
      "slug": "03-aha-moment",
      "bestFor": "Data-heavy sections, research findings, analytical arguments",
      "matchId": "8a2bb074-250b-4448-9415-61f29926cc85",
      "evidence": "The slide presents a specific contradiction",
      "position": 0,
      "objective": "What is the reason for the $335.4 million discrepancy?",
      "structure": "The Problem/Question -> What the Data Shows -> The Insight",
      "confidence": 0.8,
      "description": "Establish a tension, present data, then deliver the insight that changes everything"
    }
  ],
  "imagePathAlt": null,
  "thumbSrc": null,
  "thumbSrcAlt": null,
  "locked": true
}