Callouts & quotes from 398+ activist slides

"Legacy expedited LTL operational and financial results have continued to worsen with balance sheet concerns intensifying, as evidenced by two amendments to the Company's credit agreements for the debt issued in conjunction with the Omni acquisition."

"Spruce Point believes that current market data services fail to account for significant cash liabilities tied to unpaid taxes, product recalls, and unfunded employee compensation plans. We believe debt is $3.4 billion more than data services report."

"After fully funding all major CapEx projects, pension liabilities and deal fees, Timken’s separated businesses have additional debt capacity of over $1B to reach average peer capital structures, providing an ample liquidity cushion for each business"

"“...InternationalCo would be forced to assume all of Hess' existing debt and therefore restrict InternationalCo's financial flexibility, future growth rate, and ability to return cash to shareholders.” — Hess Presentation to Shareholders March 2013"

"Target’s board decided not to transfer credit risk in a credit card transaction, despite Pershing Square’s repeated requests. In 2008, Target’s credit card operating profits fell 65% predominantly due to increased credit risk and bad debt expense"

"We do not like the fact that insiders have been selling into share buybacks while the Company levers itself up with short-term debt to support those repurchases. It appears that the execs are levering up the business in part to enrich themselves."

"We note that the date of the debt acquisitions disclosed here (March 21, 2021) differs from the date provided in the holdcos' own filings (December 29, 2020), likely because the debt and equity purchases were a two-part, coordinated transaction."

"“We note that, if the court could somehow be certain a debtor would complete his plan, the prime rate would be adequate to compensate any secured creditors forced to accept cram down loans” — Opinion of Justice Stevens, Till v. SCS Credit Corp."

"By factoring in the U.K. pension debt, we estimate Saputo's true Net Debt / EBITDA leverage to be 3.5x. Looked at another way, with over $4.5 billion in net debt, each manufacturing facility is indebted $68m and every employee by almost $240k."

"Bunge’s “Contractual Obligations” disclosure in the notes to the financial statements shows a troubling development that over the past four years, short-term debt and other commitments and obligations have been its fastest growing categories."

"Assuming a 19.9% IPO of TIP REIT at a 15% IPO discount, the IPO would generate roughly $5.1bn in gross proceeds. After frictional costs and expenses, IPO proceeds of $3.0bn will be paid to retire Target debt and $1.6bn will remain at TIP REIT"

"“So, somebody, and it may be Hannon, which owns a non-controlling interest as well, put in $141 million. And Vivint took $340 million back. There must have been a lot of cash, either that or they borrowed more debt.” — Former HASI Executive A"

"In our opinion, GFL is showing investors an inaccurate measure of its leverage. Per its own IPO Prospectus, its lenders evaluate it on a "Net Funded Debt" measure, and not "Total Gross Debt" as depicted in its recent earnings press release."

"This implies that each company received debt financing ranging from approximately $10 million to $60 million. The only problem is that these companies appear to be empty boxes that would never receive loans remotely approaching this range."

"The Transaction allows for meaningful debt paydown by 2011E of $7.8bn. Of this amount, $4.4bn comes from selling the remaining 53% interest in credit card receivables and $3.2bn from free cash flow after operating and investing activities"

"When combining this convertible preferred equity issuance with the previously completed convertible debt financing, in downside scenarios, the Board has now created $845 million in liabilities in exchange for raising unnecessary capital."

"With ~$11bn of debt maturities coming due by 2012, we note that Simon has meaningful liquidity risk. We believe that Simon’s current valuation reflects a downward adjustment for liquidity risk and the likelihood of future equity dilution"

"Adopt an improved equity compensation and incentive scheme based on clear and transparent KPIs that are disclosed to investors (e.g. ROE, ROIC, operating profit, operating profit margin, debt to EBITDA and/or total shareholder return)"

"Cashpooling: The Company maintains a current account with BV Inversiones, S.L. to manage the group's treasury. These debts accrue market interest based on Euribor. — Bureau Veritas Inspected Y Testing, S.L.U. Financial Statement 2021"

"We looked at 150 bankruptcies over the past decade to see if we could find any other examples of public companies entering bankruptcy with (i) positive cash flow before debt maturities and (ii) asset values in excess of liabilities."

"Spruce Point believes that FND has a hidden form of debt within its Supply Chain Finance program. We observed that it modified disclosure language to reference amounts owed to financial intermediaries from amounts due to suppliers."

"Management plans to use all free cash flow after dividends to repurchase stock and will increase leverage to 1.8x Lease Adjusted Net Debt / EBITDAR from 1.6x. We estimate share repurchases will be ~$10bn to $13bn from 2012 to 2015"

"A review of large REITs indicates that these businesses support investment grade ratings with a debt to enterprise value of 36% on average, as compared to Pro Forma McDonald's which would have a debt to enterprise value of 25%."

"Note: All sell-side analysts who do a NAV calculation either separate out Sales Finance in their EV-to-Equity bridge, or follow a P/E approach whereby net debt does not feature in the analysis(2) — Elliott Investment Management"

"In light of GGP’s highly diversified, high quality portfolio, in a reorganization where the unsecured debt converts to equity, the court may deem the Prime rate plus 0% to be a sufficient rate of interest on GGP’s secured debt"

"Pro forma TWC, as shown in Exhibit 3.43, is expected to have total debt of approximately $15.8 billion as of January 1, 2006 or 3.6x net debt/2005E OIBDA (with covenants allowing for maximum leverage of 5.0x total debt/OIBDA)."

"We believe S&P's methodology significantly understates the amount. Our proportional lease adjusted debt calculation as of FY 2014 is €15.6 billion. We estimate that the LTM lease adjusted debt has blown out to €17.7 billion."

"To keep perpetuating its growth story, USCR is growing more and more dependent on larger acquisitions and leverage to fuel its growth. What’s scary is that its current Net Debt / Adj EBITDA of 3.8x exceeds pre-crisis levels."

"The quick headlines are $3 billion of segment operating income by 2020, and free cash flow generation of up to $5 billion for shareholder return programs and debt repayment. — Richard Kramer, CEO of Goodyear (September 2016)"

"The current stock price is so dislocated that the Company should immediately start using a portion of its cash flow to repurchase shares (e.g., 50% with the other 50% for debt paydown) until it reaches its leverage target."

"With cash levels well below what BUR had previously characterized as a “strong” cash position, poor cash realizations, and escalating funding obligations, it is no coincidence that BUR aims to raise even more debt in 2020."

"“Other overhead costs include all other overhead and depreciation expenses such as IT expenses, limited warranty, travel, insurance, bad debt, title and registration and other administrative expenses.” — CVNA FY 2017 10-K"

"A plan that sets GGP’s secured debt and unsecured debt to Prime + 0.75% and Prime + 1.50%, respectively, would allow for substantial deleveraging and further increase the probability of a highly successful reorganization"

"We have significant concerns that Axon raised $234m in June 2018, when its balance sheet had $96m of cash, no debt, and it was projecting accelerated revenue growth of 18-20% with healthy earnings projected at over $30m."

"RILY agreed to purchase $1 million in shares at $0.75 cents in an ATM offering underwritten by ... RILY itself. Also, 15% of the ATM proceeds go to repay GREE’s debt to RILY, adding to the circularity of the transaction."

"Economic theory posits that as a firm's weighted average cost of capital rises, the firm's valuation should decline. In a perplexing case, we observe that Stryker's bond holders are selling, driving up its cost of debt."

"We continue to target a long-term leverage of approximately 2.25 times net debt to adjusted EBITDA. From time to time, we may deviate from our long-term leverage target to pursue strategic opportunities. — Capital Mgmt."

"The plain meaning is that it is selling the asset, maintains a subordinated security interest, and as "Debtor", its property remains subject to a lien, suggesting its interest in the asset was never fully extinguished."

"We are not able to name the senior debt provider due to confidentiality terms in our agreement. Moreover, we would likely not name the partner absent those terms due to the factors described above. — Carvana Management"

"“by all relevant debt indicators, the U.S. fiscal scenario will soon approximate the economic scenario for countries on the verge of a sovereign debt default.” — American Enterprise Institute for Public Policy Research"

"We estimate that, assuming management has tolerance for conservative leverage, Amdocs has sufficient debt capacity to grow sales by 2.9% annually over three years via acquisitions even if it records 0% organic growth."

"If the Company had sold midstream before recent market volatility, it could be sitting on net cash proceeds of ~$30 billion (70% current market capitalization) that could be used for debt paydown and stock repurchases"

"If the Company had sold midstream before recent market volatility, it could be sitting on net cash proceeds of ~$30 billion (70% current market capitalization) that could be used for debt paydown and stock repurchases"

"Vivion has booked €958.4 million of net fair value gains on its properties. Presumably the larger asset base enables Vivion to take on more debt – particularly given that it touts its “Net LTV” of 36.0% as of H1 2022."

"“Based on secondary market trading, if Simon were to issue debt today, an issuance of five year unsecured debt could potentially be completed at a cost of 5% or less” — Credit Suisse Equity Research, December 4, 2009"

"A “fair and equitable” plan only entitles creditors to recover 100% of the amount of their claims. When a debtor’s asset value exceeds the amount of its liabilities, equity holders are entitled to the residual value"

"We will vote AGAINST these three directors, who supported the disastrous acquisition of Omni in August 2023, leading to an approximately 80% decline in equity value and the accumulation of extremely burdensome debt."

"Spruce Point believes the Tangible Equity Units (TEUs) should be bifurcated between their debt and equity components. The instruments can be separated by the holders, and settled at any time at the holder's option."

"Going into the current economic correction, BR has limited cash flow available for debt reduction given its growing commitment to paying its dividend - now costing nearly $340 million per year ($2.90/share a year)."

"WTRG's debt has exploded to over $6.8 billion, and it has raised more than $10 billion of total capital. Investment banks make plenty of fees from companies such as WTRG that are highly dependent on raising money."

"As we demonstrate, YT appears to have lied about not owning any direct or indirect ownership of Blitz, because some of the shares in Blitz were used to pay off YT's debt to a large creditor during the bankruptcy."

"Credit ratings depend on a number of qualitative and quantitative factors; however, in general Moody’s recommends retailers stay below 3.5x Adjusted Debt / EBITDAR to achieve an investment grade rating. — Moody's"

"Assuming that Olam requires a minimum of S$100 million in cash on hand to continue operating, we believe that Olam may have to raise or refinance S$4.6 billion in debt in the next twelve months to stay solvent."

"TFS claims that the issue of risk is mitigated through the assumption that the value of the plantations (which TFS can reclaim in the event of default) is allegedly greater than the cash value of the debts."

"Stryker's allowance for bad debts, a contra account to accounts receivables, has been steadily growing and is now above 5% of gross receivables - notably larger than close peers Zimmer Biomet and Medtronic"

"All LOIs received included both cash and non-cash consideration, none of which were sufficient to satisfy the Company’s indebtedness to DSMF, as Interim Lender and Senior Secured Lender. — PwC's 2nd Report"

"We Believe There Is A High Probability Of A Credit Ratings Downgrade Which Is Forcing The Company To Sell Assets And Reevaluate Capital Allocation - Required Debt Reduction Of ~C$1,600m vs. FCF Of ~C$200m"

"As shown below, changing the Company's cost of capital by borrowing at today's ultra-low interest rates and using debt proceeds to repurchase ADT's stock results in a significant increase in equity value"

"HHH will be a well-capitalized company with access to equity and debt capital and excess free cash flow from HHC, which will be reinvested in high-return, controlling investments in operating businesses"

"Our balance sheet has never been stronger or more liquid. As at the end of December 2014, our debt to capitalizations was at a historic low of 38%. Also we carried $5.2bn of liquidity headroom. — Noble"