Burford Capital Ltd Q2 FY2022 Earnings Call

Thanks very much, and hello, everybody. Thank you for taking some time in what is almost the middle of August to talk about Burford and our interim results. As usual, I'm joined by Jon Molot, the Chief Investment Officer; and Ken Brause, the Chief Financial Officer. The three of us will take turns going through our slides with you. We promised to do that somewhat more briskly than we did in our annual results call, and then we'll be happy to take any of your questions. Before we jump into the meat of the slides, I'm also happy to report in addition to our earnings an announcement that we also made today about a new appointment to our Board. As all of you know, we have been engaged in an overall refresh of the Board. This is the last new appointment that we're making. So this will be the fifth new director that we've appointed in the last two years. And this is a particularly exciting appointment as Dr. Rukia Baruti, who is an experienced arbitration practitioner and the Secretary-General of the African Arbitration Association. So not only is Dr. Baruti a very experienced and knowledgeable lawyer and arbitration specialist, this represents not only another woman, but a racially diverse candidate to our Board. This is big news in the legal sector. For example, this is already the breaking news story, the top new story on Global Arbitration Review today, which is the leading arbitration publication out there. So in terms of Burford's corporate presence, she's a great addition to the Board as a Non-executive Director. This appointment has made some waves in the legal community that we serve. Now moving to our results and turning to Slide 3. Fundamentally, we're going to talk about two key issues as we always do. The new business that we create ultimately sets the business up for future profitability and then the progress of that business through the pipeline, through the investment process and ultimately, the creation of cash gains from it. On the new business side of the ledger, we were very pleased with the first half. We actually struck a new record for commitments on a Burford-only basis. As a reminder, Burford-only commitments are the number that we watch most closely because those are the commitments that will ultimately drive the largest volume of shareholder profit. We provide statistics for our overall level of activity, which includes the work that we do in some of our lower-returning funds, for example, just as a measure of what the whole business is up to. But in terms of the things that are ultimately really going to drive future profit for shareholders, that Burford-only activity is the most significant. So hitting a new record in new business, even while the legal industry is still recovering from the pandemic and figuring out how to work in a new way, made us very happy. It wasn't just a first-half record. It's also the fact that we've been able to keep up that new business at a strong pace throughout the pandemic, writing quite a lot of that new business. A part of the dynamic here, as some of you will recall, is that we tweaked our arrangement with our sovereign wealth fund partner so that now the Burford balance sheet is taking 75% of new deals instead of the prior 50%. That is driving the ability to retain more of those high-potential profit deals for the balance sheet. The other thing that we saw with great excitement is that court activity really did start to resume during the period. Our consolidated income from doing litigation finance, our core business grew 31% period-over-period. That, of course, flowed all the way through the income statement. But what that really represents for us is a sign of life in courts that in many instances have been somewhat more abound and affected by their ability to hold, especially in-person trials during the pandemic. We're very pleased with that. We're not anywhere close to being all the way back. There are still meaningful backlogs in courts. They vary widely by geography. In the text of the interim report, we gave just one example of how great that can be. In the Eastern District of New York, which is the federal court district that serves Brooklyn and other parts of New York City, except Manhattan, you're still at about a 55-month wait to get a case from filing to trial, whereas in the northern district of Florida, that delay has really fallen sharply down to not much more than a year. We look forward to continuing to see some increased velocity in the portfolio as court activity does resume generally. The other things I'd note, just on the P&L side, in addition to the activity that we saw in the first half, we've also seen some post-June 30 activity. One of our larger matters had a level of activity that was effectively a partial resolution of some of what we're invested in there. Even though none of this is in our June 30 numbers, we would expect all things remaining equal to generate more than $50 million in consolidated profit during the second half from that portfolio activity. We have a meaningful discussion in our interim report about some, like many other companies, some noncash items that affected our bottom line profitability for us, a combination of noncash charges and foreign exchange, some interest rate impact, again, noncash and unrealized, and some tax peculiarities. Those together reduced our bottom line net income by about $25 million. We have this unusual split of foreign exchange where we actually had negative foreign exchange activity in the top of the P&L, above the net income line, and then had quite positive foreign exchange activity because of our sterling debt in the bottom part of the P&L, below net income, hitting just comprehensive income. If that bottom line stuff had been above the line, that would have added another $35 million to net income. There was quite a bit of foreign exchange activity, again, all of which is noncash. In other developments, we've raised $1 billion of external capital this year between a combination of the new debt offering and two new funds that we closed. On both the fund side and our balance sheet, we have meaningful liquidity available. The simple and somewhat unfortunate reality perhaps for the world at large is that economic distress tends to yield a lot of litigation, insolvency, and other litigation, and we're going to, we believe, start to see the impacts of increased interest rates and the decline in government stimulus. Turning to Slide 4, this captures graphically the point that I was making earlier. Looking at the left, this is the total portfolio that we have. That's been growing even during a pandemic; we've got about a five-year 20% CAGR there. The thing that I think is particularly notable is the graph on the right. Even though we've been able to grow the business significantly, more than doubling the portfolio in size from 2017, we've been able to do so while maintaining those consistent returns that we've been very proud to deliver. Turning to Slide 5, this is just a graphic visualization of what I described earlier on the left with record new commitments for the Burford-only balance sheet. On the right, you see the cash deployment. Those are down a little bit. That shaded area is because we did a deal towards the end of June, a large law firm deal that still has a couple of closing conditions left to satisfy before we actually put the cash out the door. It will be that deployment, presuming those closing conditions are satisfied soon. I often, as you know, talk about Slide 6 and 7 together, and I'm not going to spend much time on them. We use these slides repeatedly to show what's going on in our business. I'd just highlight that when we talk about the returns we've been able to generate and our track record of generating high and asymmetric returns, we're now doing that off of almost $2 billion of cash recoveries. This evidence indicates that this is an ongoing and repeatable model and we are now demonstrating a very significant and long-term track record. I would just emphasize that all the numbers we provide are cash-based, there's no accounting for value in any of these. That's almost $2 billion of cash that we brought back in the door with the kinds of returns that you see there and continuing asymmetric distribution in the portfolio that Slide 7 indicates. With that, I'll turn you over to Jon Molot and go to Slide 8.

Thanks, Chris, and thanks to you all for spending time with us today. On Slide 8, we talk about the timing and process of YPF matters. I won't talk about substance as is our practice. If you're a lawyer or you have lawyers working with you, I'd encourage you to just read the brief. The substance is clear if you can wade through them because the defendants threw in a lot, but I think it is clear. The timing, discovery is complete as of the end of March. That meant we went through fact discovery, expert reports, expert depositions. Summary judgment motions were filed in April, but both sides, that is, defendants filed a motion asking the judge to enter judgment for the defendant without holding a trial. Plaintiffs filed a motion asking the judge to enter judgment for the plaintiffs without holding a trial. Responses were filed to those motions in May and then reply briefs were filed at the end of June, and that is complete now. The timing of when the judge will resolve them is up to the judge. She has been attentive and responsible in managing the case, and she will presumably schedule oral argument. Basically, she has the option. She could grant summary judgment in full. If she grants summary judgment in full for the plaintiffs, although there will be a right to appeal, the defendants, if they do not post a bond or obtain a stay of execution will be subject to enforcement proceedings. Plaintiffs will be able to begin enforcement following the entry of a final judgment, absent one of those things. If the judge enters summary judgment for the defendants, there'll be a right to appeal and it is de novo review. That is, the district court decides matters as a matter of law without considering facts or resolving factual disputes. Therefore, the appeals court reviews that de novo, which is again, without any deference to the lower court. The court could decide instead to deny summary judgment in full and hold the trial or to resolve some issues at summary judgment and hold the trial on the remaining issues. If there is a trial, the parties have stipulated that the trial shall happen 115 days after the issuance of the summary judgment decision. That's pretty much the timing of the YPF matters. Turning to Slide 9 to give a little more granularity on what Chris described before about the rest of our portfolio; you can see in those red bars what percentage of each vintage of our investments has resolved. Not surprisingly, the older earlier vintages have had a much larger percentage resolve, and the younger vintages, the more recent ones, have had a smaller percentage of their cases resolved. If you look at the black bars, this echoes what Chris talked about, the explosive growth that we enjoyed some years ago and the pace we've been able to continue to put out capital. The more recent vintages that happened to have a smaller percentage resolved also are larger than the earlier vintages. It stands to reason that in the coming years, we will expect resolutions from vintages that are larger and have more outstanding. The business has grown, and the resolutions will grow as time goes on. The weighted average life of our concluded portfolio by realization has remained relatively steady over the past few years, but we'll talk a bit more about delay. If you turn to Slide 10, Chris did talk about. We're very pleased that the pace of case progress is starting to increase. The courts are working very hard to catch up. There still is the issue of criminal trials having to come first, and there are backlogs from before. Remember, whereas the rest of the world always wants to move forward and not have the legacy of COVID hold them back, defendants always have an incentive to delay matters. To the extent that they can use backlogs or COVID or something as an excuse, they will use it, but courts have been much better about moving things along. None of these delays have impacted the merits, none of our cases have lost because of it. No point has given up a case; they've just affected the duration. Sometimes the extension of timing can enhance our returns, our deals may be structured to increase our percentage or our multiple as time goes on. Meanwhile, the fact there are economic challenges and disruptions associated with COVID or with the withdrawal of government subsidies in the aftermath of COVID, potentially leads to opportunity for us because people don't litigate when things are stable and going well and growing; they litigate when something goes badly. A combination of insolvencies or disappointed expectations in deals or bad corporate conduct leads to litigation. That litigation often needs financing, particularly in times of hardship. We're poised right now with a very large portfolio of recent vintages that we've been able to continue to put out. Other than that blip in the first half of 2020 when the world shut down and we slowed down, we've continued to commit and deploy capital throughout the period. We have these vintages, and they're poised to move forward as the courts continue to reopen and move along. We see plenty of opportunity to put out new capital. We've worked on geographic expansion and expanding our product offering. It’s a very good time at Burford, would be my feeling. With that qualitative discussion of the business, I'll then turn it over to Ken to go over the numbers.

Thanks, Jon. Yes, I will now walk through our first half financial results. Good morning, and good afternoon to everybody. Just before I get started, I want to make it clear that all the figures I'm going to discuss are on a Burford-only basis unless I state otherwise. I am on Slide 11, where we have some key financial metrics. Starting with the income statement, revenue was strong. Capital provision income rose 11%. That was primarily driven by growth in net unrealized gains, which represented 71% of total capital provision income and indicates the increase in court activity. Asset management income rose, I'm going to provide more detail on that topic shortly. Operating expenses declined from the first half of last year, which included $34 million primarily related to the conclusion of an asset recovery matter. These all contributed to a meaningful improvement in operating income, which was $27 million compared to a small loss in the first half of last year. Despite that strong revenue and expense performance, we had a few other items that went the other way. For one, finance cost increased primarily as a result of having a full reporting period with the debt that was issued in April of last year as well as running with temporarily higher debt balances this half, given the timing between our new issue in April of this year and the repayment of the debt that was due this month and repaid in May. It may seem like an anomaly, but although we reported a pretax loss for the period, we reported income tax expense of $8 million as we maintain a full valuation allowance on the deferred tax asset related to disallowed interest expense for U.S. tax purposes. Our cash taxes paid in the period, though, were less than $1 million. We're a global business, and while we do our best to minimize the economic impact of currency fluctuations, the strengthening U.S. dollar negatively impacted our bottom line as it did for many other global companies, but had a benefit in comprehensive income. Our pretax income included noncash foreign exchange costs of $10 million; $7 million within capital provision income that generally reflects investments in currencies other than U.S. dollar or sterling, and the rest in other expense representing cross-currency transactional items. Those above-the-line costs, however, were offset by a $35 million benefit from foreign exchange translation and other comprehensive income, which is largely related to our sterling-denominated debt. The rise in interest rates resulted in unrealized losses on our portfolio of marketable securities through which we manage our excess liquidity. Putting it all together, we reported a first-half net loss attributable to Burford Capital Limited shareholders of $21.5 million or $0.10 per diluted share, both of which improved from last year. The balance sheet remains strong with an increase in capital provision assets and ample liquidity to support future growth. Despite the reported loss, tangible book value per share rose slightly from year-end to $6.48. Moving to asset management, which is on Slide 12, we continue to have success as an asset manager, both in terms of capital raising and income. We closed two funds in the first half, the $360 million Burford Advantage Fund, which focuses on pre-settlement matters, and the $350 million Burford Alternative Income Fund II or BAIF II, which is the successor to our previous post-settlement funds. We also extended to the end of next year the investment period for BOF-C, our pre-settlement strategy arrangement with our sovereign wealth fund partner. That agreement also shifted the asset allocation from an even split to one in which we allocate 75% to our balance sheet, thereby increasing our portion of these highest returning assets. Asset management income for the period increased 45% to $17 million, up from $12 million in the first half of last year. This increase was primarily driven by growth in income from BOF-C as the core litigation finance assets in that fund continue to season. Management fees declined slightly from the prior year period; we continue to earn these fees from BAIF and BOF, but since BOF is now past its investment period, our management fee rate on that fund has declined, and we recognized performance fee income of $2 million from BAIF, of which we had none in the first half of '21. Performance fees are somewhat variable period-to-period and reflect both the specific fee arrangement as well as the stage of the fund. Moving to Slide 13 to discuss expenses, total operating expenses in the first half declined from the prior year period primarily due to the large asset recovery charge last year. Most other operating expense categories were straightforward and largely unchanged, with only a notable modest increase in case-related expenditures that were ineligible for inclusion in asset costs. These costs represent case expenses outside our entitlement, and we continue to see improvement from an operating efficiency perspective. Operating expenses as a percentage of group-wide portfolio continued to decrease and are now less than 2% on an annualized basis. Slide 14 presents some information about our debt. We actively manage our liabilities, maintaining our long-held view that while our business should have some leverage, it’s prudent to maintain it at a relatively low level. I’d also mention that all of our debt is fixed-rate, and our maturities are well-laddered with our next debt maturity not until October of 2024. We issued $360 million of senior notes that have an 8-year maturity and a coupon of 6 and 7/8% in April, just before the fixed-income markets became particularly challenging. We're pleased to have an oversubscribed deal that enabled us to both upsize it and to price it at a spread meaningfully tighter than the debt we issued last year. We used a portion of those proceeds to redeem the remaining GBP 62 million or about USD 80 million of bonds that were maturing this month. We reduced interest costs and negative carry but did report a small loss on debt extinguishment, reflecting the modest premium paid for the redemption. That 2020 bond proved to be very attractive for us with an effective cost of less than 3%. We now have just under $1.3 billion in debt outstanding with a weighted average coupon of 6.2% and a weighted average life of 5.4 years. Our net debt to tangible asset ratio of 21% remains well below the 50% covenant level in our U.K. bonds. For our U.S. bond covenant, which is total debt to tangible equity, we are currently at 0.9x, also well below the incurrence test levels of between 1.5x and 2x depending upon the type of incurrence. Wrapping up on Slide 15 with liquidity, our liquidity position increased to $430 million at June 30, up from $315 million at year-end, consisting of just over $300 million of cash and equivalents with the remainder in marketable securities. The increase in liquidity was predominantly due to net proceeds from debt transactions I just mentioned, offset by deployments that were in excess of realizations in the half. We are positioned well to continue to deploy against new opportunities, including for the large commitment we made right at the end of the period Chris addressed. The yield on the marketable securities portfolio is now about 3.7%, putting us in a position to earn attractive returns on this excess liquidity. With that, I'll turn it back to Chris for some concluding remarks.

Great. Thanks very much, Ken. Turning to Slide 16, it sums up the points we made. We're very pleased with our new business activity continuing during the pandemic. Jon and I have both said we're excited to see the forward progress happening in the courts as they work to clear their pandemic backlogs and get things back to working as normal. We are excited about what lies ahead. With that, we're happy to take your questions, which can happen both verbally on the phone lines and also by submitting through the chat function in the webcast. While we wait for the operator to organize the phone lines, I'll take a couple of questions that have already arrived from the webcast. To begin, this is from who asks the court systems you use must have a huge backlog of cases and there must be some pressure to deal with these. Are there ways of speeding up the court handling of cases, and would such measures impact either positively or negatively on your in-force portfolio? Before I turn it to Jon for his thoughts on that, I would just say that what we're seeing is a real diversity of approaches to deal with these issues that are really all over the map. You saw an example in a case we talked about at the end of last year, where we had a case that still would have needed to wait a long time to get a trial date. The judge was sensitive to the fact the case was already old and had been running for a long time. She put quite a lot of pressure on the parties to go into mediation, which ultimately produced a settlement in the case long before it would have been up for its trial slot. I see judges paying attention to their dockets like that. Jon, anything?

The only thing I’d say is there are judges who don’t want to tolerate the defendant using an excuse of something COVID-related in order to slow things down. The main thing from our end is to make sure that our counterparty clients and law firms have a plaintiffs’ mindset where they are the claimants, meaning that when defendants ask for extensions and delays and postponements, you need to oppose those and keep things moving. Most of our team and the lawyers we work with understand that, and that's how we push it along. It’s sort of case-by-case rather than a macro level through our very active team.

It sounds like we might be ready with the phone questions, or perhaps it's not. Mark Lauber asks, so far as you are able, would you comment on the fact that both sides and Petersen have requested summary judgment? Are you seeing any signs of a rush to enforcement by U.S. beneficiaries of judgments against Argentina in advance of a ruling in Petersen, which might reduce the ability to collect in the Petersen case? The answer to the second question is no, we're not seeing that at all. As to the first question, there is nothing that I can really comment on with respect to both sides seeking summary judgment. Petersen, these cases are not jury cases. The distinction between what the judge does and what the jury does doesn’t exist here. Therefore, the distinction between some engagement and trial is considerably less significant. What summary judgment is for, whether you’re a plaintiff or a defendant, is to resolve as many issues as you can before you need to go to trial. It’s not surprising at all, and it has always been expected that both sides would seek summary judgment. Jon, anything?

I would only add to that, the facts of this case are not in dispute or complicated. Everybody knows what the operative document said. Everybody knows what the conduct was. It's just the legal consequences that people are fighting over. It makes sense that the battle over that would be fought before the judge as a matter of law rather than having a trial on the facts. We’ll see if the judge may decide that the trial is needed, but it’s not a surprise at all, as Chris said, that both sides move for summary judgment.

So we'll see if the third time is the charm with respect to the phone lines. Operator, we now have a question from David Chiaverini of Wedbush Securities.

The first one relates to the new commitment. It was great to see the record new commitment level. Would you say that the top of the funnel is expanding in this environment and could lead to more profitable matters given your ability to be more selective?

We've discussed the concept of the funnel extensively over the years and have aimed to reshape it somewhat. Currently, we attract a large number of opportunities at the top, but only a small fraction progresses to the bottom. While this selectivity can be seen as positive, it presents two challenges. Firstly, sorting through the high volume at the top requires significant effort and expense. Secondly, it means we decline many potential clients with whom we would like to build long-term relationships. Interestingly, despite how counterintuitive it sounds, we've devoted a lot of time to narrowing the funnel. We strive to educate the market on what constitutes a viable litigation finance case. Many of the matters we ultimately don't pursue aren't necessarily lacking in quality or merits; rather, it's often due to their economic factors, such as expected outcomes, settlement values, and the realistic amounts courts may award that we can collect. We frequently find those amounts to be much lower than the initial expectations of the parties involved. There just isn't enough margin to balance legal fees with our returns while ensuring a favorable outcome for clients. Our focus is on achieving quality and scale instead of simply increasing volume.

I would just add one positive thing: I think the quality of our counterparties is very important, and that probably is a positive development. Meaning, today, there are companies and law firms that some years ago would not have looked for our financing or needed our financing that are now calling us for financing. That is the most significant expansion of the top of the funnel despite my agreement with everything Chris said. That’s a positive dynamic that addresses your question.

I have a question on the agreement with the sovereign wealth fund. How Burford is now retaining 75% versus the 50% previously? I’m curious as to what the motivation was. Was it the sovereign wealth fund that wanted Burford to take on more risk, or did Burford see these opportunities as being highly profitable and wanted to share more of the economics with yourselves?

Yes, it's the latter. It was a Burford-initiated change to the arrangement. What motivated us was our incremental balance sheet capital we can now access; it was a desire to maximize returns for equity shareholders. The sovereign wealth fund had a large pool of capital that was significantly committed at this point, but it had a gap because of the COVID slowdown between commitments and deployments. By reducing the sharing mechanism to 25%, we basically got some more diversity into what's left of that portfolio and extended its life a little bit. That was the thinking behind that.

Last one for me. Jon, you mentioned the weighted average life remaining kind of steady. Can you remind us what your expectation is for weighted average life on the portfolio going forward? Is it three to four years? Just an update on that.

I don't think we have projected how changes in weighted average life will shift. I just don’t think that's something we put out.

Yes, that’s right, and it’s sort of hard because the dynamics go in both directions. On one hand, you’d expect to see a lengthening in weighted average lives because of the pandemic. On the other hand, we’re having big things resolved fairly quickly. The combination of speed and size will probably drive down the weighted average life a little bit. It’s sort of a mixed bag at the moment, and as Jon said, we don’t have a forward-looking projection for it.

I have two questions, if that's okay. The first one is, are you allowed to tell us the total number of individual matters in the Burford-only capital vision direct portfolio? And the second one is, are you able to tell us any characteristics of the 20 cases that saw fair value gains in the period?

The total number of individual matters, I’m not sure if we publish that statistic. We do publish the number of individual matters with respect to our large positions. If you take the large matters as potentially illustrative, you're obviously going to see a multiple of individual matters compared to what we call assets. But if you look at that, let’s call it 200 assets in the Burford-only portfolio, I’m unsure how many individual claims they amount to, but there are hundreds in now. As for the characteristics of the cases that did have some fair value change, in the six-month period, 20 matters passed through a milestone triggering a change in carrying value based on court activity. That’s an entirely formulaic approach. It’s not sentiment or judgment, but a data-driven formula we use. That’s going to be all over the map as the short answer. Things that trigger a change typically happen when there is court action, such as a case going past summary judgment. We have a footnote to the financials showing the individual points in cases that cause valuation changes, and we display what percentage of the portfolio, and what percentage of the fair value changes are represented by each of those stages.

A couple of questions, maybe three. The first one, if I may, is on the Petersen case and the oral arguments. That seems to have been a recent addition to the timeline. Can you say more about when? What is the norm? If the defendant is trying to postpone everything, will they appeal to oral arguments? How long might that take? Can you talk a little bit more about that?

Yes, sure. Different courts have different approaches to when they schedule oral argument. Some will say once I have the briefs and read them, I'd like to hear from the parties, while others may want to analyze their opinion more first. The timing of oral arguments doesn’t reflect the pace of work by the court. Defendants can't appeal the oral argument; they can only appeal the final judgment from the court. They could postpone scheduling and can ask for conflicts, but if the court directs them to show up, they must comply.

Is there any sort of industry statistics that demonstrate the case conclusions are accelerating, and is there any reason you shouldn't be in line with industry norms?

There’s a lot of statistical data regarding activity levels in the U.S. federal courts. That was the source of the timing I quoted earlier for time to trial in New York and in Florida. You can see how many cases are being filed, how long it takes to resolve them, and compare the rate of activity. The challenge is that while this is instructive, it does not reflect the kinds of large dollar complex commercial litigation we finance. The statistics don't exist easily for state courts or arbitration proceedings, so there is no clear picture to compare our throughput with that of the industry. Anecdotally, we know jury trials have resumed in courts, and that is significant as they were not happening previously.

Can you give any ideas from the existing portfolio about a normalized rate of cash proceeds you could expect?

No, and we’ve talked extensively about that in the past. We showed and Jon, at our Investor Day, made a long presentation unveiling the internal modeling we do. While we have a good track record modeling outcomes, we can't accurately model or project duration due to too many variables in the mix. It’s not something we can do with reliability that we would be comfortable doing publicly. The nature of our business is unpredictable, and that unpredictability allows us to generate the returns we can.

Regarding the $50 million profit you expect in the second half, how does that fit in relation to your $2.2 billion expected realizations?

Not sure I’m entirely following your question other than to say it’s part of it, but I suspect you’re asking something more thoughtful than that.

What I’m asking is whether it’s greater or lesser than the expected value of that case you provided.

We have not gone and sliced our modeling work publicly by individual cases. But it’s fair to say we are pleasantly surprised by the combination of speed and size.

Of the 20 valued up, is there any difference in that portfolio related to the uplift? Is there likely to be any expectation of the valuation uplift being any different from historical averages?

Jon can comment, but generally yes. We publish data showing the average time to conclusion after fair value changes. We don’t believe that will change dramatically. Jon?

We’ve provided disclosures showing matters that have gone through the process leading to realizations where fair value changes occurred. Many fair-value adjustments happen later in the lifecycle closer to the end, but not all; we find a clear correlation. We try to make it a straightforward process, defining changes that correlate with specific motions. Everything is fairly routine, and we believe that the 20 matters are consistent with many more that have resolved before.

In summary, we’re excited about bringing this long-running case to an end. We became involved in this matter in 2015. That’s the year we filed this case in federal court in the U.S. After a seven-year slog, it’s exciting to be close to the finish line, and we will see what happens next in that case. So after a long wait, we hope there will be news in this case before too long.

Thank you.