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  "documentTitle": "Borders Group, Inc. (BGP)",
  "authorId": "01_Pershing_Square",
  "authorName": "William Ackman",
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  "presentationDate": "2006-11-09 00:00:00",
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  "notes": "The slide uses a specific valuation adjustment to demonstrate that P/E ratios are misleading for this industry.",
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      "kind": "callout",
      "text": "Reported earnings for Book Retailers understates true cash flow",
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      "text": "Book retailers depreciate store assets over initial lease term ~ typically 10-15 years. Maintenance capital requirements are lower than depreciation expense. Fixed assets (book shelves) last longer than lease terms. Maintenance costs typically limited to paint and carpeting.",
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      "text": "Maintenance FCF: $123",
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      "text": "Maintenance FCF = NI + D&A – Maintenance Capex",
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      "text": "Based on Pershing estimates. Assumes a $21 stock price for BGP.",
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      "text": "Borders Group ($ in mm) 2006E; D&A $130; Maintenance Capex 50; Difference 80; Net Income $43; Maintenance FCF (after-tax) $123; Price to Earnings 27.2x; Price to Maint FCF (after-tax) 9.4x",
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