{ "docId": "019dd923-622c-750b-8b98-9727cc72301c", "docSlug": "778e2cbfbfaa", "documentTitle": "Amdocs Limited (DOX)", "authorId": "54_Spruce_Point_Capital", "authorName": "Ben Axler", "documentKindSlug": "activist-deck", "documentKindLabel": "Activist deck", "sourceTypeSlug": "short_seller", "sourceTypeLabel": "Short seller", "presentationDate": "2019-01-23 00:00:00", "orientation": "landscape", "aspectRatio": 1.3333334, "pageNumber": 62, "pageCount": 128, "prevPage": 61, "nextPage": 63, "slideType": "expose_contradiction", "function": "expose_contradiction", "density": "overcrowded", "nDataPoints": 2, "notes": "Uses a timeline/process flow to show the evolution of the company's narrative vs. actual financial reporting.", "elementsJson": [ "headline_text", "paragraph", "callout_box", "quote_block" ], "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b98-9727cc72301c/62", "deckHref": "/decks/019dd923-622c-750b-8b98-9727cc72301c", "deckJsonHref": "/decks/019dd923-622c-750b-8b98-9727cc72301c.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b98-9727cc72301c#slide-62", "components": [ { "bbox": { "h": 0.15, "w": 0.46, "x": 0.52, "y": 0.78 }, "kind": "callout", "text": "Q1 2018 p. 17: \"...the Company recorded a tax benefit of $23,099 related to the release of withholding and income tax reserves for pre-2018 unremitted earnings\"", "attrs": null, "subkind": "primary", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "09d38975-a5a9-40c7-8727-53a553406c6c", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.15, "w": 0.46, "x": 0.52, "y": 0.58 }, "kind": "callout", "text": "FY 2018 20-F page F-30 Dec 10, 2018: \"...the Company recorded a tax benefit of $28,795 related to the release of withholding and income tax reserves for unremitted earnings.\"", "attrs": null, "subkind": "primary", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "aae1183a-4fa6-416c-bbbc-0716168e8bb3", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.25, "w": 0.48, "x": 0.02, "y": 0.6 }, "kind": "callout", "text": "Q4 FY 2017 Earnings Call Nov 8, 2017: \"...our decision to build a new campus will be accretive to non-GAAP diluted earnings per share...\" - Tamar Rapaport-Dagim, CFO, Amdocs", "attrs": null, "subkind": "primary", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "d8a4e043-7928-41ba-949b-426717c0e5ce", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.15, "w": 0.54, "x": 0.23, "y": 0.34 }, "kind": "callout", "text": "Press Release Sept 13, 2017: \"Amdocs is currently evaluating various alternatives... The acquisition costs are not expected to have a material impact on Amdocs' cash position or operating results.\"", "attrs": null, "subkind": "primary", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "eee25a0b-8672-4561-a2c3-0da8b42b1849", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "callout", "text": "Spruce Point has never seen a company refer to the construction of office space as “accretive to EPS,” especially after first claiming the project would not have a material effect on operating results.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd953-0f1e-7015-9024-de6d0b1a38f0", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "metric", "text": "GAAP EPS: 12%", "attrs": null, "subkind": "primary", "toolName": "Quantification", "toolSlug": "quantification", "confidence": null, "componentId": "019dd953-0f1e-7015-9024-e537d809976e", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.15, "w": 0.96, "x": 0.02, "y": 0.16 }, "kind": "paragraph", "text": "Spruce Point has never seen a company refer to the construction of office space as “accretive to EPS,” especially after first claiming the project would not have a material effect on operating results. It then later buried details deep in its tax notes that it booked a $23.1m tax benefit (subsequently increased to $28.8m by year end) related to the funding decision for the new campus – allowing DOX to inflate FY 2018 GAAP EPS by nearly 12% by our estimate. We later examine DOX’s repeated patterns of net tax benefits to inflate GAAP EPS.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "6076d61b-f80f-4361-bfa2-c065d343206b", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "“Amdocs is currently evaluating various alternatives with respect to the future development and construction of the new campus, including structures for ownership or long-term lease arrangements. The acquisition costs are not expected to have a material impact on Amdocs' cash position or operating results.” — Press Release Sept 13, 2017; “This investment, if consummated, will be financed from internal cash resources. Moreover, we believe our decision to build a new campus will be accretive to non-GAAP diluted earnings per share over the long term and is a reflection of our confidence in the future success of Amdocs.” — Tamar Rapaport-Dagim, CFO, Amdocs; “During fiscal year 2018, as a result of funding decisions for the construction of the Company's new campus in Israel, see also Note 2, the Company recorded a tax benefit of $28,795 related to the release of withholding and income tax reserves for unremitted earnings.” — FY 2018 20-F page F-30 Dec 10, 2018", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd953-0f1e-7015-9024-e029756185cc", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.12, "w": 0.68, "x": 0.28, "y": 0.02 }, "kind": "title", "text": "A New HQ First Described As Having No Material Impact Only To Have A Material Accretive Impact To EPS? Creative Tax Planning At Work...", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "e16236cc-be68-46be-a93e-e2a3f04895da", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [ { "name": "ceo-quote-contradiction", "slug": null, "matchId": "12bd3f78-a08e-4503-9034-b61386a4c0f3", "evidence": "Contrasting CFO quote with subsequent financial filing disclosures.", "confidence": 0.9 } ], "arcBeats": [], "loops": [ { "to": 70, "from": 60, "name": "Hypothesis Test", "slug": "42-hypothesis-test", "bestFor": "Strategy validation, due diligence, research presentations", "matchId": "c60b7124-3faa-41ca-843c-f889942d0e7a", "evidence": "The deck presents a thorough analysis of Amdocs' financial performance and management practices to support the hypothesis", "position": 3, "objective": "Is the hypothesis of a 25-50% downside risk in DOX stock supported?", "structure": "The Hypothesis -> Test 1 (Supports/Refutes) -> Test 2 (Supports/Refutes) -> Conclusion (Validated/Pivoted)", "confidence": 0.8, "description": "State a hypothesis upfront, then systematically prove or disprove it with evidence" } ], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }