Burford Capital Ltd

Preview of changes to financial reporting framework

Burford has always focused on providing disclosure that represents what shareholders actually own, which is reflected in the “Burford-only” basis of financial reporting. “Burford-only” reporting removes the impact of private fund entities that must be consolidated under accounting standards, even though economic ownership resides with a third party.

Beginning with the upcoming reporting for 4Q24 and FY24 financial results, the Burford-only disclosure will be enhanced with a more prominent use of segment reporting through two reportable segments: (i) “Principal Finance” (which captures the financial impact of the legal finance portfolio funded by Burford’s balance sheet) and (ii) “Asset Management and Other Services” (which captures fee income from Burford’s private funds funded by third-party capital and income earned from other service-related operations). Under US reporting standards, the use of segment reporting allows for more efficient and helpful disclosure on the key metrics that illuminate how Burford generates shareholder value in each segment.

The sum of Burford’s two reportable segments will be referred to as “Total Segments” in certain disclosures, which is consistent with and identical to reporting on an aggregate “Burford-only” basis.

The Principal Finance segment reporting will be further simplified by discontinuing the use of the labels “capital provision-direct” or “core portfolio” (which described direct funding of legal finance assets by Burford’s balance sheet) and “capital provision-indirect” (which described indirect funding of legal finance assets through commitments made by Burford’s balance sheet to private funds). Performance track record measures such as return on invested capital (ROIC) and internal rate of return (IRR) will be entirely consistent with prior reporting and reflect direct funding by the balance sheet (formerly referred to as “capital provision-direct” or “core portfolio”), excluding the impact of any balance sheet commitments to private funds.