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  "documentTitle": "Canadian Tire Corporation (CTC.A)",
  "authorId": "54_Spruce_Point_Capital",
  "authorName": "Spruce Point Capital Management",
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  "sourceTypeLabel": "Short seller",
  "presentationDate": "2019-12-05 00:00:00",
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  "notes": "Uses a waterfall-style logic to calculate cash flow available for debt paydown and compares it to required paydown to reach target leverage.",
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      "kind": "callout",
      "text": "7.5+ years Required to delever based on LTM FCF and assuming no return of capital to investors. We believe CTC will not be able to reduce its leverage by the end of 2020 without selling assets",
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      "kind": "callout",
      "text": "Our analysis shows, CTC does not have the required free cash flow to maintain its current level capital returns and reduce its leverage",
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      "text": "Adj. Net Debt/Adj. EBITDAR Leverage: 3.45x",
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      "text": "We believe it will be difficult for CTC to reduce its leverage to the level necessary to maintain its current credit ratings. Equity investors and sell-side analysts are accustomed to a combination of share buybacks and dividend payments.",
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      "kind": "source-note",
      "text": "1) Reported in cash flow from financing due to IFRS 16... 2) Net debt adjusted... 3) Reflects Q4'18 rent... Source: Company financials, Spruce Point analysis",
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      "text": "Significant Risk Of Credit Downgrade",
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      "evidence": "chart/waterfall: Poor Allocation of Capital: C$28m of Value Destroyed Since 2018",
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