{
  "docId": "019dd923-622c-750b-8b98-d4565c313b68",
  "docSlug": "207d3ac66ddd",
  "documentTitle": "Canadian Tire Corporation (CTC.A)",
  "authorId": "54_Spruce_Point_Capital",
  "authorName": "Spruce Point Capital Management",
  "documentKindSlug": "activist-deck",
  "documentKindLabel": "Activist deck",
  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2019-12-05 00:00:00",
  "orientation": "landscape",
  "aspectRatio": 1.3333334,
  "pageNumber": 70,
  "pageCount": 108,
  "prevPage": 69,
  "nextPage": 71,
  "slideType": "expose_contradiction",
  "function": "expose_contradiction",
  "density": "overcrowded",
  "nDataPoints": 6,
  "notes": "Uses CEO/CFO quotes to highlight hypocrisy regarding capital allocation.",
  "elementsJson": [
    "headline_text",
    "paragraph",
    "quote_block",
    "headshot",
    "bar_chart_vertical",
    "callout_box"
  ],
  "metadataConfidence": 1,
  "imagePath": null,
  "slideHref": "/slides/019dd923-622c-750b-8b98-d4565c313b68/70",
  "deckHref": "/decks/019dd923-622c-750b-8b98-d4565c313b68",
  "deckJsonHref": "/decks/019dd923-622c-750b-8b98-d4565c313b68.json",
  "deckAnchorHref": "/decks/019dd923-622c-750b-8b98-d4565c313b68#slide-70",
  "components": [
    {
      "bbox": null,
      "kind": "callout",
      "text": "Management has stated its investment grade rating is a top priority and above capital return. Yet, CTC has continued to buyback shares while its leverage remains above the level required to prevent a credit downgrade",
      "attrs": null,
      "subkind": null,
      "toolName": "Visual emphasis",
      "toolSlug": "visual-emphasis",
      "confidence": null,
      "componentId": "019dd952-ee3b-7248-a1a3-dba7575da4a0",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.25,
        "w": 0.42,
        "x": 0.56,
        "y": 0.33
      },
      "kind": "chart",
      "text": "Decrease in Capital Stock",
      "attrs": null,
      "subkind": "bar-vertical",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "692a38cb-9a40-4586-b790-6afc5ed43e55",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.3,
        "w": 0.42,
        "x": 0.56,
        "y": 0.65
      },
      "kind": "chart",
      "text": "Poor Allocation of Capital: C$28m of Value Destroyed Since 2018",
      "attrs": null,
      "subkind": "waterfall",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "eecf913c-7ab4-4203-b217-aa48272066ba",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.12,
        "w": 0.39,
        "x": 0.15,
        "y": 0.86
      },
      "kind": "framework",
      "text": "Management has stated its investment grade rating is a top priority and above capital return. Yet, CTC has continued to buyback shares while its leverage remains above the level required to prevent a credit downgrade",
      "attrs": null,
      "subkind": "instance",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "f1389f04-46bb-40e9-bf67-d0bd84f9a27a",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": null,
      "kind": "metric",
      "text": "Value Destroyed: C$28m",
      "attrs": null,
      "subkind": "primary",
      "toolName": "Quantification",
      "toolSlug": "quantification",
      "confidence": null,
      "componentId": "019dd952-ee3b-7248-a1a3-e178ca54a3bf",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.12,
        "w": 0.96,
        "x": 0.02,
        "y": 0.17
      },
      "kind": "paragraph",
      "text": "Management has not followed its own capital allocation objectives by repurchasing shares instead of using cash to reduce leverage. We believe CTC will struggle to maintain its current credit rating if it continues to execute its announced C$350m share repurchase program. Since 2018, CTC has been a poor allocator of capital by destroying C$21m of value through buybacks. Over the past two quarters, while CTC was at 2-year lows, CTC essentially stopped its repurchase program, potentially to preserve cash.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "218aad21-6e75-4de6-8ab2-b8d6e3fb7a8b",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.25,
        "w": 0.53,
        "x": 0.02,
        "y": 0.335
      },
      "kind": "quote",
      "text": "I've only come up with five meaningful ways we can use our cash. First, we can invest in our current businesses. Second, we can use our cash to pay down debt and we have. However, we intend to maintain our investment grade credit rating...",
      "attrs": null,
      "subkind": "testimonial",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "4ee7d198-f03d-4ddc-8a2a-5ee8a987c5e3",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": null,
      "kind": "quote",
      "text": "\"I've only come up with five meaningful ways we can use our cash. First, we can invest in our current businesses. Second, we can use our cash to pay down debt and we have. However, we intend to maintain our investment grade credit rating, which we're already good shape on, and our debt is in great shape as well.\" — Stephen Wetmore, CEO, 2014 Investor Day",
      "attrs": null,
      "subkind": null,
      "toolName": "Authority citation",
      "toolSlug": "authority-citation",
      "confidence": null,
      "componentId": "019dd952-ee3b-7248-a1a3-df7c6eeb7413",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.08,
        "w": 0.65,
        "x": 0.305,
        "y": 0.02
      },
      "kind": "title",
      "text": "Not Following Its Own Objectives Has Led To Poor Allocation Of Capital",
      "attrs": null,
      "subkind": "headline",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "91b5a635-7da0-4e77-9654-21fb33b71cf6",
      "frameworkName": null,
      "frameworkSlug": null
    }
  ],
  "metrics": [],
  "tools": [
    {
      "name": "Waterfall chart",
      "slug": "waterfall-chart",
      "agent": null,
      "layer": "slide",
      "matchId": "3006e96f-236f-458d-b124-54aaebb44575",
      "evidence": "chart/waterfall: Poor Allocation of Capital: C$28m of Value Destroyed Since 2018",
      "confidence": 0.7
    }
  ],
  "frameworks": [
    {
      "name": "ceo-quote-contradiction",
      "slug": null,
      "matchId": "75877899-3676-4548-a1df-14447accf996",
      "evidence": "Contrasts CEO/CFO quotes with actual financial performance and capital allocation decisions.",
      "confidence": 1
    }
  ],
  "arcBeats": [],
  "loops": [
    {
      "to": 73,
      "from": 64,
      "name": "Cost Of Inaction",
      "slug": "27-cost-of-inaction",
      "bestFor": "Urgent budget requests, compliance, risk mitigation",
      "matchId": "571d2017-29bc-4989-a48f-ab0612dfd6a4",
      "evidence": "The document highlights the risks of Canadian Tire's business model and the potential consequences of inaction.",
      "position": 0,
      "objective": "Highlight the risks of Canadian Tire's overleveraged and debt-fueled business model",
      "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
}