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  "documentTitle": "Stryker Corp. (SYK)",
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  "authorName": "Ben Axler",
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  "sourceTypeLabel": "Short seller",
  "presentationDate": "2022-04-06 00:00:00",
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  "notes": "The slide uses a side-by-side comparison table to contrast company-reported FCF with Spruce Point's 'Reality' adjusted FCF.",
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      "kind": "callout",
      "text": "As we will illustrate, Stryker has materially missed its Capex estimates in what appears to be an attempt to defer spending. If we normalized Capex for this underspending, 2020 and 2021 FCF would be -$163m and -$125m lower",
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      "text": "Recall-related payments: have been recurring for almost 10 years and are management blunders related to Rejuvenate and ABG II Modular-Neck hip stems. Asset Sales: Are non-standard add-backs",
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      "text": "Adjusted Free Cash Flow: $2,624",
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      "text": "Spruce Point often observes that when companies come under stress, they start presenting \"Adjusted\" measures of Free Cash Flow. In 2020, Stryker presented its version of Adjusted Free Cash Flow (\"FCF\"). Spruce Point does not believe it's an accurate depiction of reality. We observe that Stryker adds-back product recall payments that have been recurring for almost a decade. Why should investors ignore these tangible costs? Furthermore, Stryker fails to classify stock repurchases related to employee compensation matters as an operational cost. We find that FCF declined in 2021. Overall, we believe FCF growth has not been impressive in relation to more than $8.5 billion in acquisition and integration spending from 2018-2021.",
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      "text": "Stryker's \"Non-GAAP\" Adjusted Free Cash Flow table",
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      "text": "Now Reporting \"Adjusted FCF\"",
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