Burford Capital Limited (NYSE:BUR) Q3 2023 Earnings Conference Call November 9, 2023 10:00 AM ET Christopher Bogart - Chief Executive Officer Jonathan Molot - Chief Investment Officer Alexander Bowers - Berenberg Matthew Howlett - B. Riley Operator I would now like to pass the conference over to your host Christopher Bogart, CEO of Burford Capital to begin. So, Chris, please go ahead. Thanks very much, and hello, everybody. Thank you for joining us today. As usual, with me are Jon Molot, Burford's Chief Inv ...

Company Participants Conference Call Participants Burford Capital Limited (NYSE:BUR) Q2 2023 Earnings Conference Call September 13, 2023 10:00 AM ET Jordan Licht - CFO Julian Roberts - Jefferies Michael Cohen - MDC Financial Research Operator I would now like to turn the call over to Chris Bogart, CEO to begin. Chris, please go ahead whenever you are ready. Thanks very much, and hello, everybody. Thank you for taking a little bit of time to join us today. As usual, I'm joined on the call by Jon Molot, Burfo ...

Table of Contents Page As previously disclosed in the annual report on Form 20-F for the year ended December 31, 2022 (the "2022 Annual Report") filed with the US Securities and Exchange Commission (the "SEC") on May 16, 2023, following comments from and engagement with the staff of the SEC, we have, in consultation with our independent auditor Ernst & Young LLP, revised our approach to fair value accounting for our capital provision assets in consideration of Accounting Standards Codification ("ASC") Topic ...

Operator Thank you, Chris. Good morning, good afternoon to everyone on the call. A little bit of housekeeping since this is our first time sharing quarterly results. So, I want to make sure everyone understands the comparative periods. Jon Molot And that's going to vary over time. So overall, while the headline total of operating expenses might appear to be significantly higher, adjusting for some of the less routine items and particularly strong unrealized gains, this quarter is in line with how we anticip ...

17 Burford Capital Quarterly Report March 2023 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ($ IN THOUSANDS, EXCEPT SHARE DATA) (UNAUDITED) | --- | --- | --- | --- | --- | --- | --- | |----------------------------------------------------------------------------------------------------------------------------------------|---------------------|------------------------------------|------------------|----------------------------------------|----------------------------------------------------|------ ...

Burford Capital Limited (NYSE:BUR) Q4 2022 Earnings Conference Call May 16, 2023 8:30 AM ET Company Participants Christopher Bogart - CEO & Director Jon Molot - Chief Investment Officer Jordan Licht - Chief Financial Officer Conference Call Participants James Hamilton - Numis Securities Limited David Chiaverini - Wedbush Securities Operator Hello. And welcome to Burford Capital’s 2022 Annual Financial Results. My name is Harry and I’ll be your operator. [Operator Instructions] It is now my pleasure to hand ...

• Historically, fair value has been based on deployed cost and the occurrence of observable events (case milestones or transactions) in the underlying litigation matter Expected inflows Discount rate and expected duration Burford has over time augmented its lawyer-driven investment process with AI-powered enhancements, including in our probabilistic modeling - Constructive dialogue between Burford, the SEC staff and our external auditors resulted in a revised approach to fair value accounting for legal fina ...

Capital Provision Assets - The company's capital provision assets are reported at fair value, with YPF-related assets accounting for 32%, 39%, and 45% of total capital provision assets at December 31, 2022, 2021, and 2020, respectively[460] - The carrying value of YPF-related assets was $1.2 billion with $1.1 billion of unrealized gains at December 31, 2022, 2021, and 2020[460] - Capital provision assets increased to $3.74 billion at the end of 2022, up from $3.12 billion in 2021, driven by deployments of $727.3 million and realizations of $426.7 million[231] - Unrealized fair value of capital provision assets reached $1.69 billion at the end of 2022, compared to $1.52 billion in 2021[231] - Legal finance assets involving claims against entities with Russian connections totaled $127.2 million (3% of total capital provision assets) at December 31, 2022, up from $102.6 million in 2021[482] - The company updated its valuation policy for capital provision assets in 2022, affecting the reported amounts of assets and liabilities[472] - Realized gains on capital provision assets were $161.7 million in 2022, compared to $153.6 million in 2021[232] - Total capital provision assets increased to $3,716,811 thousand in 2022, driven by deployments and income for the period[467] - The aggregate carrying value of capital provision assets on a consolidated basis was $3.7 billion at December 31, 2022, up from $3.1 billion in 2021[617] - Fair value adjustments on the portfolio of capital provision assets, excluding YPF-related assets, were $518.5 million (21% of carrying value) at December 31, 2022, compared to $350.0 million (19%) in 2021[617] - Total capital provision-direct assets on a consolidated basis were $4.12 billion in 2022, with a carrying value of $2.63 billion[613] - The carrying value of YPF-related assets (Petersen and Eton Park combined) was $1.2 billion at December 31, 2022, 2021, and 2020 on a consolidated basis[623] - On a Burford-only basis, the carrying value of YPF-related assets increased slightly to $823.0 million at December 31, 2022, compared to $820.8 million in 2021 and $813.2 million in 2020[623] - The estimated impact of the Ruling on the fair value of YPF-related capital provision assets at March 31, 2023, is an approximate increase of $285 million on a consolidated basis, with $100 million relating to third-party interests and $185 million on a Burford-only basis[623] - Realized gains on the capital provision-direct portfolio increased by 16% to $158.9 million for the year ended December 31, 2022, compared to $137.2 million in 2021[627] - On a Burford-only basis, realized gains on the capital provision-direct portfolio increased by 4% to $133.3 million for the year ended December 31, 2022, compared to $128.4 million in 2021[627] - Consolidated undrawn commitments were $1.9 billion at December 31, 2022, compared to $1.7 billion in 2021 and $1.6 billion in 2020[631] - Burford-only undrawn commitments were $1.3 billion at December 31, 2022, primarily attributable to the capital provision-direct portfolio, compared to $1.1 billion in 2021[631] - Fair value adjustments, net of previously recognized unrealized gains, increased to $167.2 million for the year ended December 31, 2022, compared to $53.5 million in 2021 on a consolidated basis[628] - On a Burford-only basis, fair value adjustments increased to $74.0 million for the year ended December 31, 2022, compared to $29.7 million in 2021[628] - Capital provision-direct income was $206.2 million for the year ended December 31, 2022, compared to $153.4 million in 2021 and $280.9 million in 2020 on a Burford-only basis[624] Debt and Financial Liabilities - The company's total debt was $1,147,083, $1,071,626, and $646,083 at December 31, 2022, 2021, and 2020, respectively[243] - Debt interest expense was $74,116, $56,454, $37,814, and $37,528 for the years ended December 31, 2022, 2021, 2020, and 2019, respectively[471] - Financial liabilities for third-party interests in capital provision assets increased slightly to $425,205 thousand in 2022[467] - Issued $360.0 million aggregate principal amount of the 2030 Notes in April 2022[575] - Weighted average maturity of outstanding debt securities was 4.9 years as of December 31, 2022, compared to 2.4 years for concluded capital provision-direct assets[575] - Consolidated net debt to consolidated tangible assets ratio was 25% at December 31, 2022, up from 19% in 2021 and 11% in 2020[575] - Total assets of $3.6 billion, third-party indebtedness of $1.3 billion, and total revenues of $245.4 million for the year ended December 31, 2022[575] - Finance costs rose 32% to $77.4 million in 2022 from $58.6 million in 2021, mainly due to higher outstanding debt from new bond issuances[537] - Finance costs increased 50% to $58.6 million in 2021 compared to $39.0 million in 2020, driven by higher outstanding indebtedness[550] Revenue and Income - Total revenues increased by 47% primarily driven by a 64% increase in capital provision income to $319.1 million in 2022 compared to $194.6 million in 2021[484] - Net income attributable to Burford Capital Limited shareholders was $30.5 million in 2022, compared to a loss of $28.8 million in 2021[484] - Asset management income decreased by 37% to $9.1 million in 2022 due to lower management fees as BAIF's investment period ended in April 2022[486] - Insurance income decreased to a loss of $1.4 million in 2022 compared to income of $5.1 million in 2021, reflecting a decline in legacy insurance business revenues[486] - Services income decreased by 42% to $0.7 million in 2022 as the company transitioned to a contingent risk model[486] - Marketable securities and bank interest decreased to a loss of $7.7 million in 2022 due to volatility in debt markets and unrealized losses of $9.7 million[486] - Total revenues increased by $101.9 million (47%) to $319.2 million in 2022 compared to $217.3 million in 2021, driven by a $124.6 million increase in capital provision income[514] - Operating income grew by $126.4 million (184%) to $195.0 million in 2022 from $68.6 million in 2021[514] - Net income attributable to shareholders improved by $59.3 million, from a loss of $28.8 million in 2021 to a profit of $30.5 million in 2022[514] - Capital provision income increased by $124.6 million (64%) to $319.1 million in 2022, with fair value adjustments contributing $169.1 million compared to $45.8 million in 2021[515] - Capital provision income decreased 38% to $194.6 million in 2021 compared to $314.9 million in 2020, primarily due to lower realized gains[541] - Insurance income increased 189% to $5.1 million in 2021 compared to $1.8 million in 2020, reflecting strong performance in the after the event business[544] - Marketable securities income and bank interest increased 391% to $1.9 million in 2021 compared to $0.4 million in 2020, driven by higher interest income[545] - Total revenues decreased by 38.7% to $327.9 million in 2020 compared to $534.5 million in 2019[554] - Capital provision income declined by 45.7% to $314.9 million in 2020 from $579.8 million in 2019[554] - Services income decreased 62% to $0.8 million in 2020 compared to $2.1 million in 2019[586] Operating Expenses - Operating expenses decreased by 16% to $124.3 million in 2022, primarily due to a 24% reduction in compensation and benefits to $86.3 million[486][487] - The company's total operating expenses decreased by $24.5 million (16%) to $124.3 million in 2022, primarily due to lower legacy asset recovery incentive compensation[514] - Operating expenses increased 25% to $148.7 million in 2021 compared to $119.1 million in 2020, primarily due to higher compensation and benefits[546] - Operating expenses decreased by 14% to $119.1 million in 2020 compared to $138.1 million in 2019[558] - Case-related expenditures ineligible for inclusion in asset cost increased 56% to $8.2 million in 2022 compared to $5.3 million in 2021[517] - Compensation and benefits increased 48% to $113.0 million in 2021 compared to $76.2 million in 2020, reflecting legacy asset recovery incentive compensation[547] - Compensation and benefits decreased 18% to $76.2 million for the year ended December 31, 2020, compared to $93.1 million in 2019[587] - Case-related expenditures ineligible for inclusion in asset cost decreased by 57% to $4.8 million in 2020 from $11.2 million in 2019[559] - Equity and listing related operating expenses increased by 351% to $7.9 million in 2020 from $1.8 million in 2019[559] Risks and Challenges - The company has commitments that exceed available funds, which could impact its ability to meet obligations and damage business relationships[455] - The company faces competition in the asset management business, which could affect its ability to raise funds and grow the business[436] - Negative publicity about the legal finance industry or the company could adversely affect its reputation and business[436] - The company's international operations are subject to risks such as political instability, economic conditions, and regulatory differences[465] - The SEC proposed new rules in 2022 that could significantly impact the company's asset management business if enacted[468] - COVID-19 pandemic caused delays in court operations, resulting in lower cash proceeds from litigation resolutions and extended litigation timelines[439] - Litigants facing financial difficulties or insolvency may delay or reduce expected realizations, impacting the company's ability to recycle capital[439] - ESG considerations and stakeholder scrutiny could lead to reputational harm, increased costs, and potential liabilities, impacting the company's financial position[439] - The company does not engage in currency hedging, exposing it to foreign exchange rate fluctuations, particularly with pound sterling-denominated securities[442] Cash Flow and Liquidity - Cash receipts increased 17% to $328.0 million in 2022 compared to $281.5 million in 2021, primarily due to increased proceeds from capital provision-direct assets[580] - Cash and cash equivalents decreased to $180.3 million in 2021 from $322.1 million in 2020, while marketable securities increased to $175.3 million from $16.6 million[563] - Net cash used in operating activities was $466.1 million in 2022, compared to $585.4 million in 2021, reflecting lower deployments and higher net income[571] - Net cash provided by financing activities was $399.1 million in 2022, down from $444.8 million in 2021, due to lower debt issuance and higher third-party capital contributions[571] - Cash and cash equivalents were $107.7 million at December 31, 2022, down from $180.3 million at December 31, 2021[591] - Due from settlement of capital provision assets increased to $116.6 million at December 31, 2022, compared to $86.3 million at December 31, 2021[591] - Net cash used in operating activities decreased by $119.26 million to $466.10 million in 2022 compared to $585.36 million in 2021[601] - Cash and cash equivalents decreased to $107.66 million in 2022 from $180.26 million in 2021, while marketable securities decreased to $136.36 million from $175.34 million[606] - Cash receipts (non-GAAP financial measure) were $327.99 million in 2022, up from $281.47 million in 2021[642] Investments and Fair Value - BOF-C and a "sidecar" fund, both with a single sovereign wealth fund investor, represented approximately 25% and 28% of AUM at December 31, 2022 and 2021, respectively[436] - The Group's debt securities are classified as Level 1 within the fair value hierarchy, with outstanding indebtedness held at amortized cost in the consolidated financial statements[499] - The Group has elected the fair value option for certain equity method investments, marketable securities, and financial liabilities relating to third-party interests in capital provision assets[501] - Sensitivity analysis for Level 3 valuations includes a weighted average discount rate of 5.8% for single capital provision assets and 12.9% for portfolios with equity risk[503] - The Group provides revolving credit facilities to certain private funds for capital calls, which are entirely discretionary[504] - The company purchased 468,000 ordinary shares on the open market in May 2022 at an average price of £6.33 ($8.01) per share, resulting in a $3.7 million increase in the treasury balance[506] - LTIP awards granted during 2022 had a weighted average grant date fair value of $12.2 million, $16.6 million, and $7.1 million for 2022, 2021, and 2020 respectively[507] - The company's Unrestricted Subsidiaries had total assets of $506.4 million and $43.9 million in total revenues for the year ended December 31, 2021[607] Taxes and Provisions - Provision for income taxes increased 19% to $11.6 million in 2022 compared to $9.7 million in 2021, driven by higher taxable income in the United States[538] - Provision for income taxes decreased 26% to $23.5 million for the year ended December 31, 2020, compared to $31.9 million in 2019[591] - One adverse insurance claim was reported in 2022, with no outstanding loss reserves at the end of the year[237] Foreign Exchange and Currency - Foreign currency transaction losses increased 40% to $7.7 million in 2022 compared to $5.5 million in 2021, primarily due to US dollar strength against pound sterling[519] - Foreign currency transactions gains increased to $10.7 million for the year ended December 31, 2020, compared to $2.0 million in 2019[590] Goodwill and Intangible Assets - The Group's goodwill primarily relates to the acquisition of BCIM Holdings LLC in December 2016, with no evidence of goodwill impairment at December 31, 2022, 2021, and 2020[500] - Amortization expense for the intangible asset related to BCIM Holdings LLC was $8.7 million and $9.5 million for the years ended December 31, 2020, and 2019, respectively[500] Portfolio and Asset Management - The consolidated portfolio increased to $5.5 billion in 2022 from $4.6 billion in 2021, with the Group-wide portfolio reaching $6.1 billion in 2022[582] - Burford-only portfolio proceeds from capital provision-direct assets increased to $295.64 million in 2022 from $231.41 million in 2021[642] - Burford-only portfolio of capital provision assets increased by 15% to $3.9 billion at December 31, 2022, compared to $3.4 billion at December 31, 2021[584] - Capital provision segment generated income before income taxes of $57.8 million on a Burford-only basis[569] - Maximum exposure to loss decreased to $20,515 thousand in 2022 from $23,148 thousand in 2021[476] - Net income attributable to non-controlling interests increased 207% to $67.0 million for the year ended December 31, 2022, compared to $21.8 million for the year ended December 31, 2021[491] - Loss on debt extinguishment decreased 47% to $0.9 million for the year ended December 31, 2022, compared to $1.6 million for the year ended December 31, 2021[489] - Net income attributable to non-controlling interests increased 59% to $21.8 million in 2021 compared to $13.7 million in 2020, reflecting higher fair value of assets[553]

Under the auditing standards promulgated by the Public Company Accounting Oversight Board, a restatement of financial statements is by definition evidence of a material weakness in internal controls. As a result, Burford has no alternative but to conclude that, due to the material weaknesses in Burford's internal control over financial reporting, Burford's internal control over financial reporting and Burford's disclosure controls and procedures were not effective at each of December 31, 2022 and 2021. The ...

Burford Capital Limited (NYSE:BUR) Q2 2022 Earnings Conference Call August 9, 2022 10:00 AM ET Company Participants Christopher Bogart - Chief Executive Officer Jonathan Molot - Chief Investment Officer Kenneth Brause - Chief Financial Officer Conference Call Participants David Chiaverini - Wedbush Securities Julian Roberts - Jefferies Andrew Shepherd-Barron - Peel Hunt LLP James Hamilton - Numis Securities Limited Christopher Bogart Thanks very much, and hello, everybody. Thank you for taking some time in ...