{
  "docId": "019dd923-622c-750b-8b97-079dea278909",
  "docSlug": "2d9ed566f5e8",
  "documentTitle": "Burford Capital (BUR)",
  "authorId": "51_Muddy_Waters",
  "authorName": "Carson Block",
  "documentKindSlug": "research-note",
  "documentKindLabel": "Research note",
  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2020-05-12 00:00:00",
  "orientation": "portrait",
  "aspectRatio": 0.77272725,
  "pageNumber": 3,
  "pageCount": 10,
  "prevPage": 2,
  "nextPage": 4,
  "slideType": "expose_contradiction",
  "function": "expose_contradiction",
  "density": "dense",
  "nDataPoints": 1,
  "notes": "The slide uses a 'lipstick on the pig' metaphor to describe accounting changes. It highlights a specific -11.8% YoY drop in cash receipts that was masked by definition changes.",
  "elementsJson": [
    "headline_text",
    "process_diagram",
    "paragraph",
    "footnote"
  ],
  "metadataConfidence": 0.95,
  "imagePath": null,
  "slideHref": "/slides/019dd923-622c-750b-8b97-079dea278909/3",
  "deckHref": "/decks/019dd923-622c-750b-8b97-079dea278909",
  "deckJsonHref": "/decks/019dd923-622c-750b-8b97-079dea278909.json",
  "deckAnchorHref": "/decks/019dd923-622c-750b-8b97-079dea278909#slide-3",
  "components": [
    {
      "bbox": null,
      "kind": "callout",
      "text": "The 2019 changes put lipstick on the pig by appearing to pad cash flows and Direct segment recoveries.",
      "attrs": null,
      "subkind": null,
      "toolName": "Visual emphasis",
      "toolSlug": "visual-emphasis",
      "confidence": null,
      "componentId": "019dd952-f5d0-745c-bebd-c9ef06ab3756",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.35,
        "w": 0.8,
        "x": 0.1,
        "y": 0.15
      },
      "kind": "diagram",
      "text": "Flow diagram showing reclassification of financial line items from 2017 to 2019",
      "attrs": null,
      "subkind": "process",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "da98b45e-75a8-4b6c-a418-45e33cee185b",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.02,
        "w": 0.6,
        "x": 0.2,
        "y": 0.49
      },
      "kind": "legend",
      "text": "Related cash flows were added to deployments and realizations at the Burford-only level",
      "attrs": null,
      "subkind": null,
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "e0fe0bc0-c542-4730-b78e-36c36890e96c",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": null,
      "kind": "metric",
      "text": "cash receipts: -11.8%",
      "attrs": null,
      "subkind": "primary",
      "toolName": "Quantification",
      "toolSlug": "quantification",
      "confidence": null,
      "componentId": "019dd952-f5d0-745c-bebd-ce18e865af56",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.05,
        "w": 0.8,
        "x": 0.1,
        "y": 0.54
      },
      "kind": "paragraph",
      "text": "The 2019 changes put lipstick on the pig by appearing to pad cash flows and Direct segment recoveries. (This is the first year Burford has added cash from hedging / margin to cash receipts.)",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "a46c14c4-4f2f-417a-99a8-0fed4f1697e5",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.15,
        "w": 0.8,
        "x": 0.1,
        "y": 0.64
      },
      "kind": "paragraph",
      "text": "Burford tried to spin its awful 2019 by focusing on “cash receipts”, presumably because it was one of the few operating metrics that did not decline YoY. However, Burford changed the definition of cash receipts in 2019 in order to manipulate the metric higher.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "d360ed87-2885-471d-8dd4-9ff0b53816b8",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.02,
        "w": 0.2,
        "x": 0.1,
        "y": 0.92
      },
      "kind": "source-note",
      "text": "BUR 2019 Annual Report, p. 32",
      "attrs": {
        "numbered": true
      },
      "subkind": null,
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "758baf1d-54ad-4ea8-b9bd-b51868dbb7e8",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.02,
        "w": 0.5,
        "x": 0.25,
        "y": 0.1
      },
      "kind": "title",
      "text": "Burford's Changing Classifications Continue to Enable Deception",
      "attrs": null,
      "subkind": "headline",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "96ae8014-a2bd-4d1c-995a-e9200ac7a922",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.02,
        "w": 0.6,
        "x": 0.1,
        "y": 0.61
      },
      "kind": "title",
      "text": "Changing Definition Masks a Significant Drop in Cash Receipts",
      "attrs": null,
      "subkind": "headline",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "98aa8afd-64a2-4537-8e79-8a8c0e544f15",
      "frameworkName": null,
      "frameworkSlug": null
    }
  ],
  "metrics": [],
  "tools": [],
  "frameworks": [
    {
      "name": "fraud-exposure",
      "slug": null,
      "matchId": "18e7631c-5dbf-4c84-b461-4b06eee52843",
      "evidence": "The slide explicitly maps accounting reclassifications to a narrative of management deception.",
      "confidence": 0.9
    }
  ],
  "arcBeats": [],
  "loops": [
    {
      "to": 4,
      "from": 2,
      "name": "Analogy",
      "slug": "08-analogy",
      "bestFor": "Complex concepts, new markets, technical explanations for non-experts",
      "matchId": "da9a67f9-61c2-4cd2-a45b-061879620a21",
      "evidence": "Slides 2-4 expose contradictions in classifications.",
      "position": 0,
      "objective": "To highlight inconsistencies in Burford's financial classifications",
      "structure": "The Familiar Domain -> Key Parallel -> Applied to Our Situation -> Insight",
      "confidence": 0.6,
      "description": "Explain the unfamiliar through a well-understood parallel domain"
    }
  ],
  "imagePathAlt": null,
  "thumbSrc": null,
  "thumbSrcAlt": null,
  "locked": true
}