Burford Capital Ltd

Previous wording

The following discussion and analysis of our financial condition and results of operations is intended to convey management’s perspective with respect to our operating and financial performance for the three months ended March 31, 2026 and 2025. It should be read in conjunction with the unaudited condensed consolidated financial statements and the accompanying notes thereto contained elsewhere in this Form 10-Q and the audited consolidated financial statements and the accompanying notes thereto contained in the 2025 Form 10-K.

Current wording

The following discussion and analysis of our financial condition and results of operations is intended to convey management’s perspective with respect to our operating and financial performance for the three and six months ended June 30, 2026 and 2025. It should be read in conjunction with the unaudited condensed consolidated financial statements and the accompanying notes thereto contained elsewhere in this Form 10-Q and the audited consolidated financial statements and the accompanying notes thereto contained in the 2025 Form 10-K.

Previous wording

In addition, the following discussion and analysis contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed below. Factors that could cause or contribute to such differences include those identified below and those discussed under “Risk Factors” in this Form 10-Q and the 2025 Form 10-K.

Current wording

In addition, the following discussion and analysis contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed below. Factors that could cause or contribute to such differences include those identified below and those discussed under “Risk Factors” in this Form 10-Q, the 2025 Form 10-K and the Q126 Form 10-Q.

Previous wording

Our largest individual asset was our interest in the proceeds of claims brought by the Petersen and Eton Park entities against the Republic of Argentina and YPF S.A. that have been the subject of extensive disclosure in prior reports. On September 15, 2023, judgment was entered in favor of the plaintiffs resulting in a substantial increase in the balance sheet fair value of the YPF-related assets, and that value increased further in the year ended December 31, 2024 when the court ordered the turnover of certain YPF S.A.’s shares to plaintiffs. However, on March 27, 2026, that judgment was reversed on appeal (the “YPF Judgment Reversal”) and, as a result, the balance sheet fair value of the YPF-related assets has been significantly reduced. Further proceedings with respect to the YPF-related assets are ongoing in the US courts and the plaintiffs are also likely to pursue relief through international arbitration proceedings.

Current wording

Our largest individual asset was our interest in the proceeds of claims brought by the Petersen and Eton Park entities against the Republic of Argentina and YPF S.A. that have been the subject of extensive disclosure in prior reports. On September 15, 2023, judgment was entered in favor of the plaintiffs resulting in a substantial increase in the balance sheet fair value of the YPF-related assets, and that value increased further in the year ended December 31, 2024 when the court ordered the turnover of certain YPF S.A.’s shares to plaintiffs. However, the balance sheet fair value of the YPF-related assets has been significantly reduced as a result of the YPF Judgment Reversal. Further proceedings with respect to the YPF-related assets are ongoing in the US courts and the plaintiffs are also likely to pursue relief through international arbitration proceedings.

Previous wording

More broadly, economic conditions can have an impact on the volume and type of litigation that we may consider financing. For example, increased rates of corporate insolvencies can lead to opportunities to finance litigation relating to or arising out of insolvencies and bankruptcies; higher interest rates or other forms of economic stress can cause businesses to act illegally (such as to conspire to fix prices) leading to financeable claims; and pressure from shareholders and markets can lead to the commission of securities fraud and other similar acts, again resulting in financeable claims.

Current wording

More broadly, economic conditions can have an impact on the volume and type of litigation that we may consider financing. For example, increased rates of corporate insolvencies can lead to opportunities to finance litigation relating to or arising out of insolvencies and bankruptcies; higher interest rates or other forms of financial or economic stress can cause businesses to act illegally (such as to conspire to fix prices) leading to financeable claims; and pressure from shareholders and other market participants can lead to the commission of securities fraud and other similar acts, again resulting in financeable claims.

Previous wording

During the three months ended March 31, 2026, military action in the Middle East, geopolitical tensions and ongoing disruption to global trade drove significant volatility in global financial markets. We do not expect this volatility to have a significant impact on the performance of our legal finance portfolio or our financial results. More generally, tighter financial conditions and a weakening of gross domestic product would typically cause the incidence of corporate disputes and associated litigation to increase, although it is usual for this to occur with a lag.

Current wording

During the three and six months ended June 30, 2026, military action in the Middle East, geopolitical tensions and ongoing disruption to global trade drove significant volatility in global financial markets. We do not expect this volatility to have a significant impact on the performance of our legal finance portfolio or our financial results. More generally, tighter financial conditions and a weakening of gross domestic product would typically cause the incidence of corporate disputes and associated litigation to increase, although it is usual for any impact to occur with a lag.

Previous wording

Court systems and other forms of adjudication have returned to functionality in the aftermath of the Covid-19 pandemic. In general, courts have continued to work through the case backlog caused by the Covid-19 pandemic and, during the three months ended March 31, 2026, we have observed continuing portfolio activity. Nevertheless, some court systems continue to face backlogs, delaying adjudication. Inevitably, some of our matters (and thus our cash realizations from them) in jurisdictions impacted by court backlogs have been slowed by these dynamics, and we saw impact from that in our financial results for the year ended December 31, 2025 as extensions of expected duration reduced the fair value of certain assets. In some cases, we are protected on duration risk, because some of our assets have time-based terms that increase our absolute returns as time passes. We have not seen the discontinuance of any matters. Of our concluded matters since June 2021, we have observed a higher incidence of pre-adjudication settlements as a proportion of aggregate realizations in comparison to the period from our inception to June 2021. We do not yet know whether this is an effect of the Covid-19 pandemic or a lasting trend.

Current wording

Court systems and other forms of adjudication have returned to functionality in the aftermath of the Covid-19 pandemic. In general, courts have continued to work through the case backlog caused by the Covid-19 pandemic and, during the three and six months ended June 30, 2026, we have observed continuing portfolio activity. Nevertheless, some court systems continue to face backlogs, delaying adjudication. Inevitably, some of our matters (and thus our cash realizations from them) in jurisdictions impacted by court backlogs have been slowed by these dynamics, and we saw impact from that in our financial results for the year ended December 31, 2025 as extensions of expected duration reduced the fair value of certain assets. In some cases, we are protected on duration risk, because some of our assets have time-based terms that increase our absolute returns as time passes. We have not seen the discontinuance of any matters. Of our concluded matters since June 2021, we have observed a higher incidence of pre-adjudication settlements as a proportion of aggregate realizations in comparison to the period from our inception to June 2021. We do not yet know whether this is an effect of the Covid-19 pandemic or a lasting trend.

Previous wording

Set forth below is a discussion of our unaudited condensed consolidated results of operations for the three months ended March 31, 2026 and 2025 and our unaudited condensed consolidated financial condition as of March 31, 2026 and December 31, 2025, in each case, on a consolidated basis, unless otherwise noted.

Current wording

Set forth below is a discussion of our unaudited condensed consolidated results of operations for the three and six months ended June 30, 2026 and 2025 and our unaudited condensed consolidated financial condition as of June 30, 2026 and December 31, 2025, in each case, on a consolidated basis, unless otherwise noted.

Previous wording

In this section, any references to 2026 refer to the three months ended March 31, 2026, and any references to 2025 refer to the three months ended March 31, 2025.

Current wording

In this section, any references to 2026 refer to the three or six months ended June 30, 2026, as applicable, and any references to 2025 refer to the three or six months ended June 30, 2025, as applicable.

Previous wording

Total revenues decreased for the three months ended March 31, 2026, partially offset by a decrease in total operating expenses. The decrease in both total revenues and total operating expenses was primarily due to the YPF Judgment Reversal, which resulted in (i) with respect to total revenues, a capital provision loss, net of third-party interest, of $1.7 billion and (ii) with respect to total operating expenses, a decrease in long-term incentive compensation including accruals of $124.8 million and a decrease in case-related expenditures ineligible for inclusion in asset cost of $66.2 million. In addition, total revenues decreased, mainly due to a decrease in capital provision income, arising mostly from lower fair value adjustments, and total operating expenses decreased, mainly due to decreases in fair value driven compensation-related accruals, partially offset by an increase in case-related expenditures ineligible for inclusion in asset cost. The net result was $1.6 billion in net loss attributable to Burford Capital Limited shareholders for the three months ended March 31, 2026, as compared to net income of $30.9 million for the three months ended March 31, 2025.

Current wording

Total revenues decreased for the six months ended June 30, 2026, partially offset by a decrease in total operating expenses. The decrease in both total revenues and total operating expenses was primarily due to the YPF Judgment Reversal, which resulted in (i) with respect to total revenues, a capital provision loss, net of third-party interest, of $1.7 billion and (ii) with respect to total operating expenses, a decrease in long-term incentive compensation including accruals of $124.5 million and a decrease in case-related expenditures ineligible for inclusion in asset cost of $66.9 million. Furthermore, total revenues decreased due to a decrease in capital provision income arising mostly from lower fair value adjustments as described below, while the decrease in total operating expenses as described above was partially offset by an increase in other case-related expenditures ineligible for inclusion in asset cost and an increase in compensation and benefits costs. The net result was $1.6 billion in net loss attributable to Burford Capital Limited shareholders for the six months ended June 30, 2026 as compared to net income of $119.2 million for the six months ended June 30, 2025.

Previous wording

For the three months ended March 31, 2026, net realized gains were $32.2 million, comprising $49.2 million of gross realized gains, offset by gross realized losses of $17.0 million. For the three months ended March 31, 2025, net realized gains were $67.6 million, comprising $84.0 million of gross realized gains, offset by gross realized losses of $16.4 million. The decrease in net realized gains was due to fewer assets concluding in 2026 as compared to 2025, a variability which is characteristic of our business. Overall, net realized gains resulted from $101.3 million in realizations for the three months ended March 31, 2026 as compared to $288.8 million in realizations for the three months ended March 31, 2025, in light of the absence of a single large realization in the current period.

Current wording

For the three months ended June 30, 2026, net realized gains were $65.7 million, comprising $97.8 million of gross realized gains, offset by gross realized losses of $32.1 million. For the three months ended June 30, 2025, net realized gains were $40.3 million, comprising $53.1 million of gross realized gains, offset by gross realized losses of $12.8 million. The increase in net realized gains was due to higher individual favorable conclusions in 2026 as compared to 2025 with no single asset significantly impacting the result. Overall, net realized gains resulted from $149.0 million in realizations for the three months ended June 30, 2026 as compared to $90.1 million in realizations for the three months ended June 30, 2025.

Previous wording

Fair value adjustments during the period, net of previously recognized unrealized gains/(losses) transferred to realized gains/(losses), were affected by a number of factors, including changes in discount rate, duration and litigation risk premium, the reversal of previously recognized unrealized gains/(losses) upon conclusion of a matter and their transfer to realized gains/(losses) and actual performance of matters as they pass through milestones. All of those factors contributed to the net reduction in fair value of $2.5 billion for the three months ended March 31, 2026, of which $2.4 billion was attributable to the YPF-related assets, primarily due to the impact of the YPF Judgment Reversal.

Current wording

Fair value adjustments during the period, net of previously recognized unrealized gains/(losses) transferred to realized gains/(losses), were affected by a number of factors, including changes in discount rate, duration and litigation risk premium, the reversal of previously recognized unrealized gains/(losses) upon conclusion of a matter and their transfer to realized gains/(losses) and actual performance of matters as they pass through milestones. All of those factors contributed to the net reduction in fair value of $2.5 billion for the six months ended June 30, 2026, of which $2.4 billion was attributable to the YPF-related assets, primarily due to the impact of the YPF Judgment Reversal.

Previous wording

As part of our fair value methodology, we discount the expected future cash flows. If discount rates had remained unchanged from December 31, 2025, applying those same rates to the portfolio as of March 31, 2026, fair value would have been approximately $49.6 million higher than as reported. The weighted average discount rate across the portfolio increased to 6.6% as of March 31, 2026 from 6.1% as of December 31, 2025, and interest sensitivities of the portfolio to assumed basis point changes in interest rates at each period end are disclosed in note 11 (Fair value of assets and liabilities ) to our unaudited condensed consolidated financial statements contained in this Form 10-Q. Fair value is also impacted by changes in the adjusted risk premium, which was up at 47.8% as of March 31, 2026 from 31.1% as of December 31, 2025. Contributing to the higher risk premium during the period was the addition of newly acquired or originated capital provision assets (as capital provision assets generally have higher risk premiums at their outset) and the negative milestone for the YPF-related assets.

Current wording

As part of our fair value methodology, we discount the expected future cash flows. If discount rates had remained unchanged from December 31, 2025, applying those same rates to the portfolio at June 30, 2026, fair value would have been approximately $57.7 million higher than as reported. The weighted average discount rate across the portfolio increased to 6.7% as of June 30, 2026, from 6.1% as of December 31, 2025, and interest sensitivities of the portfolio to assumed basis point changes in rates at each period end are disclosed in note 11 (Fair value of assets and liabilities) to our unaudited condensed consolidated financial statements contained in this Form 10-Q. Fair value is also impacted by changes in the adjusted risk premium, which was up at 48.6% as of June 30, 2026, from 31.1% as of December 31, 2025. Contributing to the higher risk premium during the period was the addition of newly acquired or originated capital provision assets (as capital provision assets generally have higher risk premiums at their outset) and the negative milestone for the YPF-related assets.

Previous wording

Third-party interests in capital provision assets reduced capital provision loss by $0.8 billion for the three months ended March 31, 2026 as compared to a reduction of $20.8 million to capital provision income for the three months ended March 31, 2025, of which $0.8 billion was for the YPF-related assets for the three months ended March 31, 2026.

Current wording

Third-party interests in capital provision assets reduced capital provision loss by $0.8 billion for the six months ended June 30, 2026, as compared to a reduction of $64.1 million to capital provision income for the six months ended June 30, 2025, of which $0.8 billion was for the YPF-related assets for the six months ended June 30, 2026.

Previous wording

Total operating expenses decreased to a credit of $150.1 million for the three months ended March 31, 2026, primarily due to lower fair value driven compensation-related accruals and lower case-related expenditures ineligible for inclusion in asset cost.

Current wording

Total operating expenses decreased to a credit of $102.7 million for the six months ended June 30, 2026, primarily due to lower fair value driven compensation-related accruals and lower case-related expenditures ineligible for inclusion in asset cost.

Previous wording

Fair value driven compensation-related accruals decreased, primarily due to a $124.8 million credit to long-term incentive compensation including accruals as a result of the YPF Judgment Reversal.

Current wording

Fair value driven compensation-related accruals decreased for the six months ended June 30, 2026, primarily due to a $124.5 million credit to long-term incentive compensation including accruals as a result of the YPF Judgment Reversal.

Previous wording

These expenditures include costs associated with ongoing capital provision assets that are not eligible for inclusion in the fair value of those assets and are therefore expensed as incurred. Examples of the incurrence of such expenses include situations where we are effectively the claimant in a litigation matter due to the acquisition of assets or the assignment of a claim. As of March 31, 2026, we have deployed a cumulative $28.8 million of such costs in respect of capital provision assets that remain ongoing. The total expense for the three months ended March 31, 2026 was a credit of $42.7 million primarily as a result of the $66.2 million credit associated with the YPF Judgment Reversal related to accrued contingent fee arrangements associated with the EP Funds. The main offset to this credit is an increase in this line item in 2026 of $23.0 million relating to the correction of certain costs that had been previously included within capital provision assets but that did not meet the applicable criteria for inclusion in the fair value of those assets. The impact of this correction was not material to 2026 or any prior periods. Compared to 2025, there was $4.3 million of such expenditures. While we report these costs as expenses for accounting purposes, we treat them for purposes of return and performance metrics as part of the asset’s cost basis in the same way that we treat traditional legal finance arrangements.

Current wording

The decrease for the six months ended June 30, 2026 was primarily due to a $66.9 million credit associated with the YPF Judgment Reversal related to accrued contingent fee arrangements associated with the EP Funds, partially offset by an increase in other case costs. Such other case costs include $23.0 million relating to the correction of certain costs that had been previously included within capital provision assets but that did not meet the applicable criteria for inclusion in the fair value of those assets. The impact of this correction was not material to 2026 or any prior periods. While we report these costs as expenses for accounting purposes, we treat them for purposes of return and performance metrics as part of the asset’s cost basis in the same way that we treat traditional legal finance arrangements.

Previous wording

Case-related expenditures ineligible for inclusion in asset cost also include fees paid to third parties when we have sought our own legal advice or expert opinion with respect to matters related to a capital provision asset. These expenses are expected to fluctuate period-over-period and accounted for $0.3 million and $0.3 million of total case-related expenditures ineligible for inclusion in asset cost for the three months ended March 31, 2026 and 2025, respectively.

Current wording

Other case-related expenditures ineligible for inclusion in asset cost include fees paid to third parties when we have sought our own legal advice or expert opinion with respect to matters related to a capital provision asset. These expenses are expected to fluctuate period-over-period and accounted for $2.0 million and $1.4 million of total case-related expenditures ineligible for inclusion in asset cost for the three months ended June 30, 2026 and 2025, respectively, and $2.4 million and $1.7 million for the six months ended June 30, 2026 and 2025, respectively.

Previous wording

Finance costs increased 47% for the three months ended March 31, 2026, primarily due to higher interest expense related to the issuance of the 2033 Notes in July 2025 and the 2034 Notes in January 2026, partially offset by the repayment at scheduled maturity of the aggregate outstanding principal amount of the 6.125% bonds due 2025 in August 2025 and the early redemption of the aggregate outstanding principal amount of the 2026 Bonds in January 2026.

Current wording

Finance costs increased 46% and 46% for the three and six months ended June 30, 2026, respectively, primarily due to interest expense related to the issuance of the 2033 Notes in July 2025 and the 2034 Notes in January 2026, partially offset by the repayment at scheduled maturity of the aggregate outstanding principal amount of the 6.125% bonds due 2025 in August 2025 and the early redemption of the aggregate outstanding principal amount of the 2026 Bonds in January 2026.

Previous wording

Foreign currency transactions (gains)/losses and other expenses were losses of $15.6 million for the three months ended March 31, 2026. The period-over-period change was primarily driven by the realization, upon the redemption of the 2026 Bonds, of accumulated foreign currency losses previously recorded in other comprehensive income.

Current wording

Foreign currency transactions (gains)/losses and other expenses were losses of $15.3 million for the six months ended June 30, 2026. The period-over-period change was primarily driven by the realization during the three months ended March 31, 2026, upon the redemption of the 2026 Bonds, of accumulated foreign currency losses previously recorded in other comprehensive income.

Previous wording

Net income/(loss) attributable to non-controlling interests decreased for the three months ended March 31, 2026, reflecting non-controlling interests’ share of the decrease in capital provision income period-over-period. See “Capital provision income/(loss)” above for additional information with respect to the period-over-period change in the different components of capital provision income.

Current wording

Net income/(loss) attributable to non-controlling interests decreased 57% for the three months ended June 30, 2026, primarily reflecting non-controlling interests’ share of the decrease in capital provision income period-over-period. See “Capital provision income/(loss)” above for additional information with respect to the period-over-period change in the different components of capital provision income.

Previous wording

Cash and cash equivalents increased 24% and marketable securities decreased 42%, in each case, as of March 31, 2026. The net increase in cash and cash equivalents and marketable securities primarily reflects the issuance of the 2034 Notes, the proceeds received from capital provision assets and the impact from third-party net capital contributions, partially offset by (i) the redemption of the 2026 Bonds and (ii) the funding of capital provision assets.

Current wording

Cash and cash equivalents increased 23% and marketable securities decreased 44%, in each case, as of June 30, 2026. The net increase in cash and cash equivalents and marketable securities primarily reflects the issuance of the 2034 Notes and the proceeds received from capital provision assets, partially offset by (i) the redemption of the 2026 Bonds, (ii) the funding of capital provision assets and (iii) the impact from third-party net capital distributions.

Previous wording

Other assets increased 6% as of March 31, 2026, primarily due to the acquisitions of equity method and other investments and from higher receivables.

Current wording

Other assets increased 11% as of June 30, 2026, primarily due to tax prepayments and the acquisitions of equity method and other investments.

Previous wording

Due from settlement of capital provision assets increased 9% as of March 31, 2026, primarily due to the relative level of new realizations, offset by the collection of receivables, during the three months ended March 31, 2026. Of the $164.8 million of due from settlement of capital provision assets receivables outstanding as of December 31, 2025, 39% was collected in cash during 2026.

Current wording

Due from settlement of capital provision assets decreased 26% as of June 30, 2026, primarily due to the relative level of new realizations, offset by the collection of receivables, during the six months ended June 30, 2026. Of the $164.8 million of due from settlement of capital provision assets receivables outstanding as of December 31, 2025, 62% was collected in cash during 2026.

Previous wording

Capital provision assets decreased 44% as of March 31, 2026, primarily due to the YPF Judgment Reversal and the impact of realizations, partially offset by continued deployments into capital provision assets.

Current wording

Capital provision assets decreased 43% as of June 30, 2026, primarily due to the YPF Judgment Reversal and the impact of realizations, partially offset by continued deployments into capital provision assets.

Previous wording

The table below sets forth the fair value of capital provision assets, comprised of deployed cost and unrealized gains, for the YPF-related assets and other assets as of the dates indicated.

Current wording

The table below sets forth the fair value of capital provision assets, comprised of deployed cost and unrealized gains/(losses), for the YPF-related assets and other assets as of the dates indicated.

Previous wording

On a consolidated basis, the aggregate fair value of our capital provision assets was $3.1 billion, the aggregate deployed cost was $2.5 billion and the aggregate unrealized gains were $0.6 billion, in each case, as of March 31, 2026. The increase of $44.6 million in deployed cost resulted from deployments during 2026, offset by the return of capital from realizations. See “—Unaudited condensed consolidated statements of operations for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025—Revenues” above for additional information with respect to the change in unrealized gains, which was driven by this period’s fair value adjustment, net of previously recognized unrealized gains/(losses) transferred to realized gains/(losses).

Current wording

On a consolidated basis, the aggregate fair value of our capital provision assets was $3.2 billion, the aggregate deployed cost was $2.6 billion and the aggregate unrealized gains were $0.6 billion, in each case, as of June 30, 2026. The increase of $67.8 million in deployed cost resulted from deployments during 2026, offset by the return of capital from realizations. See “—Unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2026 as compared to the three and six months ended June 30, 2025—Revenues” above for additional information with respect to the change in unrealized gains, which was driven by this period’s fair value adjustment, net of previously recognized unrealized gains/(losses) transferred to realized gains/(losses).

Previous wording

Within total segments (Burford-only), the aggregate fair value of our capital provision assets was $2.2 billion, the aggregate deployed cost was $1.9 billion and the aggregate unrealized gains were $0.4 billion, in each case, as of March 31, 2026. The increase of $10.3 million in deployed cost resulted from deployments during 2026, offset by the return of capital from realizations. See “—Segments—Principal Finance segment—Gains from capital provision asset portfolio” for additional information with respect to the change in unrealized gains, which was driven by this period’s fair value adjustment, net of previously recognized unrealized gains/(losses) transferred to realized gains/(losses).

Current wording

Within total segments (Burford-only), the aggregate fair value of our capital provision assets was $2.3 billion, the aggregate deployed cost was $1.9 billion and the aggregate unrealized gains were $0.4 billion, in each case, as of June 30, 2026. The increase of $44.1 million in deployed cost resulted from deployments during 2026, offset by the return of capital from realizations. See “—Segments—Principal Finance segment—Gains from capital provision asset portfolio” for additional information with respect to the change in unrealized gains, which was driven by this period’s fair value adjustment, net of previously recognized unrealized gains/(losses) transferred to realized gains/(losses).

Previous wording

The determination of the fair value of the YPF-related assets is based on the same methodology that we use to value all our other capital provision assets. On a consolidated basis, the fair value of the YPF-related assets (both Petersen and Eton Park combined) was $150.1 million as of March 31, 2026. Our cost basis increased $3.8 million to $197.3 million and the unrealized gains decreased $2.4 billion to an unrealized loss of $47.2 million, during 2026. The increase in the cost basis was due to continued deployments, while the decrease in unrealized gains was driven by the impact of the YPF Judgment Reversal.

Current wording

The determination of the fair value of the YPF-related assets is based on the same methodology that we use to value all our other capital provision assets. On a consolidated basis, the fair value of the YPF-related assets (both Petersen and Eton Park combined) was $160.4 million as of June 30, 2026. During 2026, our cost basis increased $8.0 million to $201.6 million and the unrealized gains decreased $2.4 billion to an unrealized loss of $41.2 million. The increase in the cost basis was due to continued deployments, while the decrease in unrealized gains was driven by the impact of the YPF Judgment Reversal.

Previous wording

Within total segments (Burford-only), the fair value of the YPF-related assets (both Petersen and Eton Park combined) was $92.5 million as of March 31, 2026. Our cost basis increased $3.8 million to $121.4 million and the unrealized gains decreased $1.6 billion to an unrealized loss of $28.8 million, during 2026. The increase in the cost basis was due to continued deployments, while the decrease in unrealized gains was driven by the impact of the YPF Judgment Reversal.

Current wording

Within total segments (Burford-only), the fair value of the YPF-related assets (both Petersen and Eton Park combined) was $101.1 million as of June 30, 2026. During 2026, our cost basis increased $8.0 million to $125.6 million and the unrealized gains decreased $1.6 billion to an unrealized loss of $24.6 million. The increase in the cost basis was due to continued deployments, while the decrease in unrealized gains was driven by the impact of the YPF Judgment Reversal.

Previous wording

As of March 31, 2026 and December 31, 2025, approximately 63% of our legal finance undrawn commitments related to definitive commitments and approximately 37% related to discretionary commitments.

Current wording

As of each of June 30, 2026 and December 31, 2025, approximately 65% of our undrawn commitments related to definitive commitments and approximately 35% related to discretionary commitments.

Previous wording

As a result of the factors described above, income before income taxes decreased for the three months ended March 31, 2026.

Current wording

The decrease in capital provision income, mainly reflecting the reduction in YPF-related assets which contributed to the lower unrealized gain, was the main driver of the decrease in income before income taxes for the three months ended June 30, 2026 as compared to the three months ended June 30, 2025 on both consolidated and total segments (Burford-only) bases.

Previous wording

Total revenues and total operating expenses decreased, both primarily due to the YPF Judgment Reversal, which was the main driver of the decrease in income/(loss) before income taxes for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025 on both consolidated and total segments (Burford-only) bases. In addition, on both consolidated and total segments (Burford-only) bases, total revenues decreased, mainly due to a decrease in capital provision income, arising mostly from lower fair value adjustments, and total operating expenses decreased, mainly due to lower fair value driven compensation-related accruals, partially offset by an increase in case-related expenditures ineligible for inclusion in asset cost.

Current wording

Total revenues and total operating expenses decreased, both primarily due to the YPF Judgment Reversal, which was the main driver of the decrease in income/(loss) before income taxes for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025 on both consolidated and total segments (Burford-only) bases. In addition, on both consolidated and total segments (Burford-only) bases, revenues decreased due to a decrease in capital provision income arising mostly from lower fair value adjustments, as described below, and the decrease in operating expenses was partially offset by an increase in compensation and benefits costs and an increase in case-related expenditures ineligible for inclusion in asset cost.

Previous wording

New definitive commitments serve as one indicator of new business activity and reflect new contractual financing agreements, which are inflows to the portfolio or transfers of existing discretionary commitments. Discretionary commitments, which are also included in undrawn commitments as a component of the portfolio, are not included within new definitive commitments. When referring to new definitive commitments for our combined business segments, we use the term “group-wide”, as opposed to total segments (Burford-only) which we use for our financial results, due to the third-party nature of the capital in our asset management business. The table below sets forth the components of our group-wide new definitive commitments of capital provision assets by segment for periods indicated.

Current wording

New definitive commitments serve as one indicator of new business activity and reflect new contractual financing agreements, which are inflows to the portfolio or transfers of existing discretionary commitments. Discretionary commitments, which are also included in undrawn commitments as a component of the portfolio, are not included within new definitive commitments. When referring to new definitive commitments for our combined business segments, we use the term “group-wide” as opposed to the term “total segments (Burford-only)”, which we use for our financial results due to the third-party nature of the capital in our asset management business. The table below sets forth the components of our group-wide new definitive commitments of capital provision assets by segment for the periods indicated.

Previous wording

Total revenues decreased for the three months ended March 31, 2026, partially offset by a decrease in operating expenses. The decrease in both total revenues and operating expenses was primarily due to the YPF Judgment Reversal, which resulted in (i) with respect to total revenues, a capital provision loss, net of third-party interest, of $1.6 billion and (ii) with respect to operating expenses, a decrease in long-term incentive compensation including accruals of $124.8 million.

Current wording

Total revenues decreased for the six months ended June 30, 2026, partially offset by a decrease in total operating expenses. The decrease in both total revenues and total operating expenses was primarily due to the YPF Judgment Reversal, which resulted in (i) with respect to total revenues, a capital provision loss, net of third-party interest, of $1.6 billion and (ii) with respect to total operating expenses, a decrease in long-term incentive compensation including accruals of $124.5 million. Furthermore, total revenues decreased due to a decrease in capital provision income arising mostly from lower fair value adjustments, as described below, while the decrease in total operating expenses as described above was partially offset by an increase in case-related expenditures ineligible for inclusion in asset cost.

Previous wording

In addition, total revenues decreased, mainly due to a decrease in capital provision income, arising mostly from lower fair value adjustments, and total operating expenses decreased, mainly due to a decrease in fair value driven compensation-related accruals, mainly related to lower capital provision income in 2026 as compared to 2025. The decrease in total operating expenses was partially offset by an increase in case-related expenditures ineligible for inclusion in asset cost. Case-related expenditures ineligible for inclusion in asset cost include costs associated with ongoing capital provision assets that are not eligible for inclusion in the fair value of those assets and are therefore expensed as incurred. As of March 31, 2026, the Company has recognized a cumulative $23.8 million of such costs in respect of capital provision assets that remain ongoing. The increase in this line item in 2026 is mainly related to $17.8 million arising from the correction in 2026 of certain costs that had been previously included within capital provision assets but which did not meet the applicable criteria for inclusion in the fair value of those assets. The impact of this correction was not material to 2026 or any prior periods.

Current wording

Case-related expenditures ineligible for inclusion in asset cost include costs associated with ongoing capital provision assets that are not eligible for inclusion in the fair value of those assets and are therefore expensed as incurred. As of June 30, 2026, the Company has recognized a cumulative $29.3 million of such costs in respect of capital provision assets that remain ongoing.

Previous wording

Total other expenses increased 98% for the three months ended March 31, 2026, primarily due to higher interest expense related to the issuance of the 2033 Notes in July 2025 and the 2034 Notes in January 2026, partially offset by the repayment at scheduled maturity of the aggregate principal amount of the 6.125% bonds due 2025 in August 2025 and the early redemption of the 2026 Bonds in January 2026. In addition, the increase in other expenses was also primarily driven by the realization, upon the redemption of the 2026 Bonds, of accumulated foreign currency losses previously recorded in other comprehensive income.

Current wording

Total other expenses increased 75% for the six months ended June 30, 2026, primarily due to higher interest expense related to the issuance of the 2033 Notes in July 2025 and the 2034 Notes in January 2026, partially offset by the repayment at scheduled maturity of the aggregate principal amount of the 6.125% bonds due 2025 in August 2025 and the early redemption of the 2026 Bonds in January 2026. In addition, the increase in other expenses was also primarily driven by the realization during the three months ended March 31, 2026, upon the redemption of the 2026 Bonds, of accumulated foreign currency losses previously recorded in other comprehensive income.

Previous wording

Net realized gains on capital provision assets decreased 18% for the three months ended March 31, 2026, which were comprised of $39.9 million in gross realized gains, offset by $11.5 million in gross realized losses. For the three months ended March 31, 2025, net realized gains on capital provision assets were comprised of $46.4 million in gross realized gains, offset by $11.8 million in gross realized losses. The decrease in net realized gains was in large part due to lower case realizations relating to the Advantage Fund given the fund is in wind down during the three months ended March 31, 2026. As a percentage of average capital provision assets at cost during the three months ended March 31, 2026, gross realized losses represented 2.5% (annualized) as compared to 3.1% for the year ended December 31, 2025.

Current wording

Net realized gains on capital provision assets increased 31% for the three months ended June 30, 2026, which were comprised of $60.4 million in gross realized gains, offset by $25.5 million in gross realized losses. For the three months ended June 30, 2025, net realized gains on capital provision assets were comprised of $35.1 million in gross realized gains, offset by $8.5 million in gross realized losses. The increase in net realized gains was due to higher individual favorable conclusions in 2026 as compared to 2025 with no single asset significantly impacting the result. As a percentage of average capital provision assets at cost during the three months ended June 30, 2026, gross realized losses were 5.3% (annualized) as compared to 3.1% for the year ended December 31, 2025.

Previous wording

Net change in unrealized gains consist of fair value adjustments during the period, which may be offset by the transfer of unrealized gains/(losses) to realized gains/(losses) upon realization of an asset. Fair value adjustments, net of previously recognized unrealized gains/(losses) transferred to realized gains, on capital provision assets decreased for the three months ended March 31, 2026, with the YPF Judgment Reversal having the largest impact from an individual matter during the period.

Current wording

Unrealized gains consist of fair value adjustments during the period, which may be offset by the transfer of unrealized gains/(losses) to realized gains/(losses) upon realization of an asset. Fair value adjustments, net of previously recognized unrealized gains/(losses) transferred to realized gains/(losses), on capital provision assets decreased to $54.8 million for the three months ended June 30, 2026, with the reduction in YPF-related assets contributing to the lower unrealized gain value in 2026. In addition, the period-over-period change was also impacted by the relative movement in passage of time and discount rates.

Previous wording

See“—Unaudited condensed consolidated statements of operations for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025—Revenues—Capital provision income/(loss)” above for additional information with respect to the period-over-period change of fair value adjustment, net of previously recognized unrealized gains/(losses) transferred to realized gains/(losses).

Current wording

See“—Unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2026 as compared to the three and six months ended June 30, 2025—Revenues—Capital provision income/(loss)” above for additional information with respect to the year-over-year change of fair value adjustment, net of previously recognized unrealized gains/(losses) transferred to realized gains/(losses).

Previous wording

Unaudited condensed statements of operations for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025

Current wording

Unaudited condensed statements of financial condition as of June 30, 2026 as compared to December 31, 2025