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  "docSlug": "0a3a22290f60",
  "documentTitle": "GFL Environmental Inc. (GFL)",
  "authorId": "54_Spruce_Point_Capital",
  "authorName": "Spruce Point Capital Management",
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  "sourceTypeLabel": "Short seller",
  "presentationDate": "2020-08-18 00:00:00",
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  "notes": "The slide uses a red box to highlight the adjusted FCF discrepancy.",
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      "kind": "callout",
      "text": "It's Hard To Rely On GFL's Free Cash Flow Forecasts When Tangible Evidence That Both Operating Cash Flow And Capex Are Misstated",
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      "text": "Since Jan 1, 2019 GFL has spent over C$1.8bn on acquisitions and OCF has barely increased while FCF has worsened. Granted there is a COVID-19 impact in H1 2020, but with so much money spent on acquisitions, Spruce Point is surprised there is no FCF growth.",
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      "text": "Free Cash Flow: -59.5%",
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      "text": "We have shown that both GFL's operating cash flow and capital expenditures do not reconcile. As a result, we believe its free cash flow is also misstated. We believe true H1 2020 free cash flow burn was ~60% worse than reported by GFL.",
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      "kind": "quote",
      "text": "\"When you think about how cash flow and leverage should play out over the balance of the year, we should incur an additional $140 million to $150 million of CAPEX and approximately $140 million, $145 million of cash interest costs in the second half of the year. If you layer on the conservative assumption of working capital, ending the year as cash flow neutral, you get to a free cash flow number of somewhere between $275 million and $300 million for the back half of the year, depending on your views of where we end up in terms of EBITDA.\"",
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      "text": "\"When you think about how cash flow and leverage should play out over the balance of the year, we should incur an additional $140 million to $150 million of CAPEX and approximately $140 million, $145 million of cash interest costs in the second half of the year. If you layer on the conservative assumption of working capital, ending the year as cash flow neutral, you get to a free cash flow number of somewhere between $275 million and $300 million for the back half of the year, depending on your views of where we end up in terms of EBITDA.\" — GFL Management",
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      "kind": "source-note",
      "text": "Source: GFL and Spruce Point Analysis. Note: Spruce Point Adjusted capex uses the “additions” from the PP&E footnotes",
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      "kind": "table",
      "text": "Comparison table of GFL vs Spruce Point adjusted cash flow for 2019 and 2020",
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      "kind": "title",
      "text": "GFL's \"Free Cash Flow\" vs. Spruce Point Reality",
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      "evidence": "The deck presents various concerns with GFL Environmental's financials, including revenue control issues and aggressive EBITDA presentation.",
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