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  "documentTitle": "Canadian Tire Corporation (CTC.A)",
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  "authorName": "Spruce Point Capital Management",
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      "kind": "callout",
      "text": "By not restating earnings, EPS growth will appear faster over the next period",
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      "text": "Spruce Point estimates the change resulted in an ~18c – 21c positive quarterly impact to EPS for Q2 – Q4 2018 based on the mid-point of company guidance",
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      "text": "Has CTC's asset base really changed?",
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      "text": "In Q1 2018, CTC changed its depreciation accounting method and took a one-time charge for accelerated depreciation. This resulted in a one-time loss for Q1 but offered a benefit to EPS for the following quarters. Sell-side analysts added back the one-time expense in Q1 but overlooked the benefit to EPS for the remainder of the year.",
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      "text": "2017 Company MD&A (page 41) 11.1.1 Change in Accounting Estimates The following represents forward-looking information and users are cautioned that actual results may vary. Based on an analysis of the Company's assets which was completed in Q1 2018, the Company believes that the straight-line method of depreciation better reflects the pattern of consumption of the economic benefits of its assets. As a result, the Company intends to change its depreciation method to straight-line for all of its depreciable assets that were previously depreciated using the declining balance method. This change will be considered a change in accounting estimate in accordance with IFRS and as such will be accounted for prospectively. It is expected that the change in estimation methodology will result in a one-time charge (due to accelerated depreciation) in Q1 2018 of between $15 million to $20 million. In addition, under the straight-line methodology the Company expects that the ratio measuring its annual depreciation expense as a percent of consolidated revenue will decrease by approximately 40 to 50 bps. The ratio may also vary due to among other items, the timing and type of assets coming in and out of service and fluctuations to capital expenditures and revenue.",
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      "text": "Depreciation Method Change Positively Impacted Reported Earnings In Future Quarters",
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