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  "documentTitle": "WSP Global Inc. (WSP)",
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  "authorName": "Spruce Point Capital Management",
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  "sourceTypeLabel": "Short seller",
  "presentationDate": "2024-04-03 00:00:00",
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  "notes": "Uses a 'before-after' style logic to expose management's aggressive accounting.",
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      "text": "By reclassifying this as an operating expense and cash flow reduction, consistent with industry peers, we estimate WSP's adj. free cash flow conversion is 36% - 41%.",
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      "text": "free cash flow conversion: 36% - 41%",
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      "kind": "paragraph",
      "text": "We are not impressed with WSP's free cash flow. Management claimed it would exceed net earnings and blamed the recent shortfall on tax regulation changes. However, even despite this issue, we believe WSP generated free cash flow by materially pulling back on capital spending relative to its initial guidance. As previously referenced, WSP runs $196.6m of net interest expense (ex: interest on lease liabilities) through the financing section of its cash flow. By reclassifying this as an operating expense and cash flow reduction, consistent with industry peers, we estimate WSP's adj. free cash flow conversion is 36% - 41%.",
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      "kind": "quote",
      "text": "CEO: \"What makes WSP so unique in its ability to convert consistently higher net income into free cash flow.\" CFO: \"Cash management will continue to be a focus, and we expect that our free cash flow will annually exceed our net earnings.\"",
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      "kind": "quote",
      "text": "CEO: \"What makes WSP so unique in its ability to convert consistently higher net income into free cash flow.\" CFO: \"Cash management will continue to be a focus, and we expect that our free cash flow will annually exceed our net earnings.\" — CEO and CFO, Analyst Day, March '22",
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      "text": "Source: WSP financial results and Q4'23 earnings call; Spruce Point adjustments",
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      "text": "Spruce Point Adj. 2023 Free Cash Flow Conversion table",
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      "text": "WSP's 2023 Free Cash Flow Conversion Claim table",
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      "kind": "title",
      "text": "Free Cash Flow Conversion Even Worse Given Capex Deferrals",
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