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Lazard Ltd Reports Second-Quarter and First-Half 2022 Results

Financial Advisory operating revenue reflected high levels of activity globally

Asset Management fundamental investment style well‑positioned in current market environment

Returned $526 million in capital to shareholders, including the repurchase of 10.6 million shares year‑to‑date

Lazard Ltd (NYSE: LAZ) today reported operating revenue1 of $676 million for the quarter ended June 30, 2022. Net income, as adjusted2, was $96 million, or $0.92 per share (diluted) for the quarter. On a U.S. GAAP basis, second-quarter 2022 net income was $95 million, or $0.92 per share (diluted).

First-half 2022 net income, as adjusted, was $211 million, or $1.97 per share (diluted). On a U.S. GAAP basis, first-half 2022 net income was $209 million, or $1.97 per share (diluted).

“Our results demonstrate the resilience, diversification and discipline of our business model, and we are well-positioned for the current economic environment,” said Kenneth M. Jacobs, Chairman and Chief Executive Officer of Lazard. “We continue to invest for growth while remaining focused on delivering innovative client solutions, generating significant cash flow and returning capital to shareholders.”

($ in millions, except

 

Quarter Ended

 

 

Six Months Ended

per share data and AUM)

 

June 30,

 

 

June 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2022

 

2021

 

%'22-'21

 

 

2022

 

2021

 

%'22-'21

Net Income

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. GAAP

 

$95

 

$123

 

(22%)

 

 

$209

 

$210

 

(1%)

Per share, diluted

 

$0.92

 

$1.08

 

(15%)

 

 

$1.97

 

$1.83

 

8%

Adjusted2

 

$96

 

$146

 

(34%)

 

 

$211

 

$247

 

(15%)

Per share, diluted

 

$0.92

 

$1.28

 

(28%)

 

 

$1.97

 

$2.15

 

(8%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Revenue1

 

 

 

 

 

 

 

 

 

 

 

 

 

Total operating revenue

 

$676

 

$821

 

(18%)

 

 

$1,375

 

$1,469

 

(6%)

Financial Advisory

 

$407

 

$471

 

(14%)

 

 

$795

 

$788

 

1%

Asset Management

 

$266

 

$343

 

(23%)

 

 

$577

 

$671

 

(14%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AUM ($ in billions)

 

 

 

 

 

 

 

 

 

 

 

 

 

Period end

 

$217

 

$277

 

(22%)

 

 

 

 

 

 

 

Average

 

$230

 

$276

 

(17%)

 

 

$243

 

$269

 

(9%)

Note: Endnotes are on page 7 of this release. A reconciliation of adjusted GAAP to U.S. GAAP is on pages 14-15.

OPERATING REVENUE

Operating revenue1 was $676 million for the second quarter of 2022, and $1,375 million for the first half of 2022, 18% and 6% lower, respectively, from the comparable 2021 periods.

Financial Advisory

Our Financial Advisory results include M&A Advisory, Capital Advisory, Capital Raising, Restructuring, Shareholder Advisory, Sovereign Advisory, and other strategic advisory work for clients.

For the second quarter of 2022, Financial Advisory operating revenue was $407 million, 14% lower than the second quarter of 2021.

For the first half of 2022, Financial Advisory operating revenue was $795 million, 1% higher than the first half of 2021.

During and since the second quarter of 2022, Lazard has been engaged in significant and complex M&A transactions and other advisory assignments globally, including the following (clients are in italics): Vivendi's €3.6 billion tender offer for Lagardère; Resource REIT’s $3.7 billion sale to Blackstone Real Estate Income Trust; Oi's BRL 20.0 billion fiber assets carve-out to a BTG Pactual-led consortium; Ferro Corporation's $2.1 billion sale to Prince International; Tivity Health's $2.0 billion acquisition by Stone Point Capital; Sierra Oncology's $1.9 billion sale to GSK; Alpargatas’ strategic partnership and investment in Rothy's; Beeline’s investment from Stone Point Capital; and Q-Energy’s sale of its GW renewable platform to Verbund AG.

Lazard has one of the world’s preeminent restructuring practices. During and since the second quarter of 2022, we have been engaged in a broad range of visible and complex restructuring and debt advisory assignments for debtors or creditors, including roles involving: Alto Maipo S.P.A.; Andrade Gutierrez; Brazos Electric Power Cooperative; Corp Group Banking S.A.; GenapSys; Grupo GICSA; HEXO; Imagina Media Audiovisual; Nordic Aviation Capital; Rockall Energy; Stoneway Capital; and Vue Entertainment.

Our Capital and Shareholder Advisory practices remain active globally, advising on a broad range of public and private assignments. Our Sovereign Advisory practice continues to be active advising governments, sovereign and sub-sovereign entities across developed and emerging markets.

For a list of publicly announced Financial Advisory transactions on which Lazard advised in the second quarter of 2022, or continued to advise or completed since June 30, 2022, please visit our website at www.lazard.com/businesses/transactions.

Asset Management

In the text portion of this press release, we present our Asset Management results as 1) Management fees and other revenue, and 2) Incentive fees.

For the second quarter of 2022, Asset Management operating revenue was $266 million, 23% lower than the second quarter of 2021. For the first half of 2022, Asset Management operating revenue was $577 million, 14% lower than the first half of 2021.

For the second quarter of 2022, management fees and other revenue was $258 million, 16% lower than the second quarter of 2021, and 10% lower than the first quarter of 2022. For the first half of 2022, management fees and other revenue was $545 million, 10% lower than the first half of 2021.

Average assets under management (AUM) for the second quarter of 2022 was $230 billion, 17% lower than the second quarter of 2021, and 10% lower than the first quarter of 2022. Average AUM for the first half of 2022 was $243 billion, 9% lower than the first half of 2021.

AUM as of June 30, 2022, was $217 billion, down 14% from March 31, 2022, and down 22% from June 30, 2021. The sequential decrease from March 31, 2022 was driven by market depreciation of $23.2 billion, foreign exchange depreciation of $8.2 billion and net outflows of $4.6 billion.

For the second quarter of 2022, incentive fees were $7 million, compared to $34 million for the second quarter of 2021. For the first half of 2022, incentive fees were $33 million, compared to $67 million for the first half of 2021.

OPERATING EXPENSES

Compensation and Benefits

In managing compensation and benefits expense, we focus on annual awarded compensation (cash compensation and benefits plus deferred incentive compensation with respect to the applicable year, net of estimated future forfeitures and excluding charges), a non-GAAP measure. We believe annual awarded compensation reflects the actual annual compensation cost more accurately than the GAAP measure of compensation cost, which includes applicable-year cash compensation and the amortization of deferred incentive compensation principally attributable to previous years’ deferred compensation. We believe that by managing our business using awarded compensation with a consistent deferral policy, we can better manage our compensation costs, increase our flexibility in the future and build shareholder value over time.

For the second quarter of 2022, we accrued compensation and benefits expense at an adjusted compensation1 ratio of 58.5%, compared to the second-quarter 2021 ratio of 59.5%. This resulted in $395 million of compensation and benefits expense, compared to $489 million for the second quarter of 2021.

For the first half of 2022, adjusted compensation and benefits expense1 was $804 million, compared to $874 million for the first half of 2021.

We manage our compensation and benefits expense based on awarded compensation with a consistent deferral policy. We take a disciplined approach to compensation, and our goal is to maintain a compensation-to-operating revenue ratio over the cycle in the mid- to high-50s percentage range on both an awarded and adjusted basis, with consistent deferral policies.

Non-Compensation Expense

Adjusted non-compensation expense1 for the second quarter of 2022, was $131 million, 10% higher than the second quarter of 2021. The increase primarily reflects higher marketing and business development expenses and technology investments. The ratio of adjusted non-compensation expense to operating revenue for the second quarter of 2022 was 19.4%, compared to 14.5% for the second quarter of 2021.

Adjusted non-compensation expense1 for the first half of 2022 was $248 million, 12% higher than the first half of 2021. The ratio of adjusted non-compensation expense to operating revenue for the first half of 2022 was 18.0%, compared to 15.1% for the first half of 2021.

Our goal remains to achieve an adjusted non-compensation expense-to-operating revenue ratio over the cycle of 16% to 20%.

TAXES

The provision for taxes, on an adjusted basis1, was $34 million for the second quarter and $73 million for the first half of 2022. The effective tax rate on the same basis was 26.4% for the second quarter and 25.9% for the first half of 2022, compared to 25.2% and 26.7% for the respective 2021 periods.

CAPITAL MANAGEMENT AND BALANCE SHEET

Our primary capital management goals include managing debt and returning capital to shareholders through dividends and share repurchases.

In the second quarter of 2022, Lazard returned $246 million to shareholders, which included: $46 million in dividends; $199 million in share repurchases of our common stock; and $1 million in satisfaction of employee tax obligations in lieu of share issuances upon vesting of equity grants.

In the first half of 2022, Lazard returned $526 million to shareholders, which included: $93 million in dividends; $375 million in share repurchases of our common stock; and $58 million in satisfaction of employee tax obligations in lieu of share issuances upon vesting of equity grants.

During the first half of 2022, we repurchased 10.6 million shares, which included 5.9 million shares repurchased in the second quarter. On July 27, 2022, our Board of Directors authorized additional share repurchases of up to $500 million, which expires as of December 31, 2024, bringing our total outstanding share repurchase authorization to $559 million.

In addition, on July 27, 2022, our Board of Directors voted to increase the quarterly dividend on Lazard’s outstanding common stock by 6% to $0.50 per share. The dividend is payable on August 19, 2022, to stockholders of record on August 8, 2022.

Lazard’s financial position remains strong. As of June 30, 2022, our cash and cash equivalents were $907 million, and stockholders’ equity related to Lazard’s interests was $716 million.

CONFERENCE CALL

Lazard will host a conference call at 8:00 a.m. EDT on July 28, 2022, to discuss the company’s financial results for the second quarter and first half of 2022. The conference call can be accessed via a live audio webcast available through Lazard’s Investor Relations website at www.lazard.com, or by dialing 1 800-420-1271 (U.S. and Canada) or +1 785-424-1603 (outside of the U.S. and Canada), 15 minutes prior to the start of the call.

A replay of the conference call will be available by 10:00 a.m. EDT, July 28, 2022, via the Lazard Investor Relations website at www.lazard.com, or by dialing 1 (888) 215-1280 (U.S. and Canada) or +1 (402) 220-4937 (outside of the U.S. and Canada).

ABOUT LAZARD

Lazard, one of the world's preeminent financial advisory and asset management firms, operates from 41 cities across 26 countries in North, Central and South America, Europe, Asia and Australia. With origins dating to 1848, the firm provides advice on mergers and acquisitions, strategic matters, restructuring and capital structure, capital raising and corporate finance, as well as asset management services to corporations, partnerships, institutions, governments and individuals. For more information on Lazard, please visit www.lazard.com. Follow Lazard at @Lazard.

Cautionary Note Regarding Forward-Looking Statements:

This press release contains forward-looking statements. In some cases, you can identify these statements by forward-looking words such as “may”, “might”, “will”, “should”, “could”, “would”, “expect”, “plan”, “anticipate”, “believe”, “estimate”, “predict”, “potential”, “target,” “goal”, or “continue”, and the negative of these terms and other comparable terminology. These forward-looking statements, which are subject to known and unknown risks, uncertainties and assumptions about us, may include projections of our future financial performance based on our growth strategies, business plans and initiatives and anticipated trends in our business. These forward-looking statements, including with respect to the current COVID-19 pandemic, are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by these forward-looking statements.

These factors include, but are not limited to, those discussed in our Annual Report on Form 10-K under Item 1A “Risk Factors,” and also discussed from time to time in our reports on Forms 10-Q and 8-K, including the following:

  • A decline in general economic conditions or the global or regional financial markets;
  • A decline in our revenues, for example due to a decline in overall mergers and acquisitions (M&A) activity, our share of the M&A market or our assets under management (AUM);
  • Losses caused by financial or other problems experienced by third parties;
  • Losses due to unidentified or unanticipated risks;
  • A lack of liquidity, i.e., ready access to funds, for use in our businesses; and
  • Competitive pressure on our businesses and on our ability to retain and attract employees at current compensation levels.

Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Neither we nor any other person assumes responsibility for the accuracy or completeness of any of these forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. We are under no duty to update any of these forward-looking statements after the date of this release to conform our prior statements to actual results or revised expectations and we do not intend to do so.

Lazard Ltd is committed to providing timely and accurate information to the investing public, consistent with our legal and regulatory obligations. To that end, Lazard and its operating companies use their websites, Lazard’s Twitter account (twitter.com/Lazard) and other social media sites to convey information about their businesses, including the anticipated release of quarterly financial results, quarterly financial, statistical and business-related information, and the posting of updates of assets under management in various mutual funds, hedge funds and other investment products managed by Lazard Asset Management LLC and Lazard Frères Gestion SAS. Investors can link to Lazard and its operating company websites through www.lazard.com.

ENDNOTES

1 A non-U.S. GAAP measure. See attached financial schedules and related notes for a detailed explanation of adjustments to corresponding U.S. GAAP results. We believe that presenting our results on an adjusted basis, in addition to the U.S. GAAP results, is the most meaningful and useful way to compare our operating results across periods.

2 Second-quarter and first-half 2022 adjusted results1 exclude pre-tax charges of $0.9 million and $2.0 million, respectively, relating to office space reorganization. On a U.S. GAAP basis, these resulted in a net charge of $0.6 million, or $0.01 (diluted) per share, for the second quarter, and a net charge of $1.4 million, or $0.01 (diluted) per share, for the first half of 2022.

LAZ-EPE

LAZARD LTD

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

 

(U.S. GAAP)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

% Change From

 

 

June 30,

 

 

March 31,

 

 

June 30,

 

 

March 31,

 

 

June 30,

 

($ in thousands, except per share data)

2022

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

$

660,658

 

 

$

716,144

 

 

$

843,264

 

 

(8%)

 

 

(22%)

 

Interest expense

 

(21,112

)

 

 

(21,252

)

 

 

(20,127

)

 

 

 

 

 

 

 

 

Net revenue

 

639,546

 

 

 

694,892

 

 

 

823,137

 

 

(8%)

 

 

(22%)

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

363,830

 

 

 

396,841

 

 

 

514,918

 

 

(8%)

 

 

(29%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Occupancy and equipment

 

29,409

 

 

 

31,239

 

 

 

29,875

 

 

 

 

 

 

 

 

 

Marketing and business development

 

22,673

 

 

 

14,123

 

 

 

9,332

 

 

 

 

 

 

 

 

 

Technology and information services

 

42,067

 

 

 

37,931

 

 

 

35,774

 

 

 

 

 

 

 

 

 

Professional services

 

16,549

 

 

 

16,029

 

 

 

19,996

 

 

 

 

 

 

 

 

 

Fund administration and outsourced services

 

28,551

 

 

 

29,703

 

 

 

31,302

 

 

 

 

 

 

 

 

 

Amortization of intangible assets related to acquisitions

 

15

 

 

 

15

 

 

 

15

 

 

 

 

 

 

 

 

 

Other

 

10,614

 

 

 

9,283

 

 

 

15,664

 

 

 

 

 

 

 

 

 

Subtotal

 

149,878

 

 

 

138,323

 

 

 

141,958

 

 

8%

 

 

6%

 

Operating expenses

 

513,708

 

 

 

535,164

 

 

 

656,876

 

 

(4%)

 

 

(22%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

125,838

 

 

 

159,728

 

 

 

166,261

 

 

(21%)

 

 

(24%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

34,187

 

 

 

38,753

 

 

 

41,345

 

 

(12%)

 

 

(17%)

 

Net income

 

91,651

 

 

 

120,975

 

 

 

124,916

 

 

(24%)

 

 

(27%)

 

Net income (loss) attributable to noncontrolling interests

 

(3,829

)

 

 

7,099

 

 

 

1,738

 

 

 

 

 

 

 

 

 

Net income attributable to Lazard Ltd

$

95,480

 

 

$

113,876

 

 

$

123,178

 

 

(16%)

 

 

(22%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Attributable to Lazard Ltd Common Stockholders:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

98,660,173

 

 

 

102,547,277

 

 

 

106,746,654

 

 

(4%)

 

 

(8%)

 

Diluted

 

102,753,336

 

 

 

108,186,642

 

 

 

113,603,478

 

 

(5%)

 

 

(10%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

0.96

 

 

$

1.09

 

 

$

1.14

 

 

(12%)

 

 

(16%)

 

Diluted

$

0.92

$

1.05

$

1.08

(12%)

 

 

(15%)

LAZARD LTD

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

 

(U.S. GAAP)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended

 

 

June 30,

 

 

June 30,

 

 

 

 

 

($ in thousands, except per share data)

2022

 

 

2021

 

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

$

1,376,802

 

 

$

1,523,168

 

 

(10%)

 

Interest expense

 

(42,364

)

 

 

(39,924

)

 

 

 

 

Net revenue

 

1,334,438

 

 

 

1,483,244

 

 

(10%)

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

760,671

 

 

 

916,464

 

 

(17%)

 

 

 

 

 

 

 

 

 

 

 

 

 

Occupancy and equipment

 

60,648

 

 

 

64,623

 

 

 

 

 

Marketing and business development

 

36,796

 

 

 

15,983

 

 

 

 

 

Technology and information services

 

79,998

 

 

 

69,444

 

 

 

 

 

Professional services

 

32,578

 

 

 

34,944

 

 

 

 

 

Fund administration and outsourced services

 

58,254

 

 

 

60,581

 

 

 

 

 

Amortization of intangible assets related to acquisitions

 

30

 

 

 

30

 

 

 

 

 

Other

 

19,897

 

 

 

20,624

 

 

 

 

 

Subtotal

 

288,201

 

 

 

266,229

 

 

8%

 

Operating expenses

 

1,048,872

 

 

 

1,182,693

 

 

(11%)

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

285,566

 

 

 

300,551

 

 

(5%)

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

72,940

 

 

 

84,809

 

 

(14%)

 

Net income

 

212,626

 

 

 

215,742

 

 

(1%)

 

Net income attributable to noncontrolling interests

 

3,270

 

 

 

5,264

 

 

 

 

 

Net income attributable to Lazard Ltd

$

209,356

 

 

$

210,478

 

 

(1%)

 

 

 

 

 

 

 

 

 

 

 

 

 

Attributable to Lazard Ltd Common Stockholders:

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

Basic

 

100,603,724

 

 

 

107,019,107

 

 

(6%)

 

Diluted

 

105,469,988

 

 

 

114,712,885

 

 

(8%)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

 

 

 

 

Basic

$

2.05

 

 

$

1.94

 

 

6%

 

Diluted

$

1.97

 

 

$

1.83

 

 

8%

 

LAZARD LTD

UNAUDITED CONDENSED CONSOLIDATED

STATEMENT OF FINANCIAL CONDITION

(U.S. GAAP)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

 

December 31,

 

 

($ in thousands)

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

   

$

907,472

 

 

$

1,465,022

 

 

Deposits with banks and short-term investments

   

 

1,700,961

 

 

 

1,347,544

 

 

Restricted cash

   

 

617,057

 

 

 

617,448

 

 

Receivables

   

 

739,702

 

 

 

805,809

 

 

Investments

   

 

787,139

 

 

 

1,007,339

 

 

Property

   

 

231,502

 

 

 

250,005

 

 

Goodwill and other intangible assets

   

 

378,004

 

 

 

379,571

 

 

Operating lease right-of-use assets

   

 

435,450

 

 

 

466,054

 

 

Deferred tax assets

   

 

408,187

 

 

 

435,308

 

 

Other assets

   

 

506,322

 

 

 

373,081

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Assets

   

$

6,711,796

 

 

$

7,147,181

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS & STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

   

 

 

 

 

 

 

 

 

Deposits and other customer payables

   

$

1,831,825

 

 

$

1,442,701

 

 

Accrued compensation and benefits

   

 

494,464

 

 

 

972,303

 

 

Operating lease liabilities

   

 

520,025

 

 

 

552,522

 

 

Tax receivable agreement obligation

   

 

192,473

 

 

 

213,434

 

 

Senior debt

   

 

1,686,471

 

 

 

1,685,227

 

 

Other liabilities

   

 

583,871

 

 

 

628,030

 

 

Total liabilities

   

 

5,309,129

 

 

 

5,494,217

 

 

 

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

   

 

 

 

 

 

 

 

 

Redeemable noncontrolling interests

   

 

575,710

 

 

 

575,000

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' equity

   

 

 

 

 

 

 

 

 

Preferred stock, par value $.01 per share

   

 

-

 

 

 

-

 

 

Common stock, par value $.01 per share

   

 

1,128

 

 

 

1,128

 

 

Additional paid-in capital

   

 

71,918

 

 

 

144,729

 

 

Retained earnings

   

 

1,628,182

 

 

 

1,560,636

 

 

Accumulated other comprehensive loss, net of tax

   

 

(290,029

)

 

 

(223,847

)

 

Subtotal

   

 

1,411,199

 

 

 

1,482,646

 

 

Class A common stock held by subsidiaries, at cost

   

 

(695,537

)

 

 

(507,426

)

 

Total Lazard Ltd stockholders' equity

   

 

715,662

 

 

 

975,220

 

 

Noncontrolling interests

   

 

111,295

 

 

 

102,744

 

 

Total stockholders' equity

   

 

826,957

 

 

 

1,077,964

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities, redeemable noncontrolling interests and stockholders' equity

   

$

6,711,796

 

 

$

7,147,181

 

 

LAZARD LTD

 

SELECTED SUMMARY FINANCIAL INFORMATION (a)

 

(Non-GAAP - unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

% Change From

 

 

June 30,

 

 

March 31,

 

 

June 30,

 

 

March 31,

 

 

June 30,

 

($ in thousands, except per share data)

2022

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial Advisory

$

406,792

 

 

$

388,130

 

 

$

471,075

 

 

5%

 

 

(14%)

 

Asset Management

 

265,707

 

 

 

311,781

 

 

 

343,453

 

 

(15%)

 

 

(23%)

 

Corporate

 

3,412

 

 

 

(1,276

)

 

 

6,918

 

 

NM

 

 

(51%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating revenue (b)

$

675,911

 

 

$

698,635

 

 

$

821,446

 

 

(3%)

 

 

(18%)

 

 

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted compensation and benefits expense (c)

$

395,407

 

 

$

408,702

 

 

$

488,760

 

 

(3%)

 

 

(19%)

Ratio of adjusted compensation to operating revenue

58.5%

 

 

58.5%

 

 

59.5%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-compensation expense (d)

$

130,941

 

 

$

117,126

 

 

$

118,830

 

 

12%

 

 

10%

 

Ratio of non-compensation to operating revenue

19.4%

 

 

16.8%

 

 

14.5%

 

 

 

 

 

 

 

 

 

 

 

Earnings:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings from operations (e)

$

149,563

 

 

$

172,807

 

 

$

213,856

 

 

(13%)

 

 

(30%)

 

Operating margin (f)

22.1%

 

 

24.7%

 

 

26.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income (g)

$

96,108

 

 

$

114,692

 

 

$

145,798

 

 

(16%)

 

 

(34%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted adjusted net income per share

$

0.92

 

 

$

1.05

 

 

$

1.28

 

 

(12%)

 

 

(28%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted weighted average shares (h)

 

104,767,897

 

 

 

109,178,143

 

 

 

114,058,944

 

 

(4%)

 

 

(8%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Effective tax rate (i)

26.4%

 

 

25.4%

 

 

25.2%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

This presentation includes non-U.S. GAAP ("non-GAAP") measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for the corresponding U.S. GAAP measures, and should be read only in conjunction with our consolidated financial statements prepared in accordance with U.S. GAAP. For a detailed explanation of the adjustments made to the corresponding U.S. GAAP measures, see Reconciliation of U.S. GAAP to Selected Summary Financial Information and Notes to Financial Schedules.

 

LAZARD LTD

 

SELECTED SUMMARY FINANCIAL INFORMATION (a)

 

(Non-GAAP - unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended

 

 

June 30,

 

 

June 30,

 

 

 

 

 

($ in thousands, except per share data)

2022

 

 

2021

 

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial Advisory

$

794,922

 

 

$

788,375

 

 

1%

 

Asset Management

 

577,488

 

 

 

671,367

 

 

(14%)

 

Corporate

 

2,136

 

 

 

9,566

 

 

(78%)

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating revenue (b)

$

1,374,546

 

 

$

1,469,308

 

 

(6%)

 

 

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted compensation and benefits expense (c)

$

804,109

 

 

$

874,238

 

 

(8%)

 

Ratio of adjusted compensation to operating revenue

58.5%

 

 

59.5%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-compensation expense (d)

$

248,067

 

 

$

221,310

 

 

12%

 

Ratio of non-compensation to operating revenue

18.0%

 

 

15.1%

 

 

 

 

 

 

 

Earnings:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings from operations (e)

$

322,370

 

 

$

373,760

 

 

(14%)

 

Operating margin (f)

23.5%

 

 

25.4%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income (g)

$

210,800

 

 

$

247,019

 

 

(15%)

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted adjusted net income per share

$

1.97

 

 

$

2.15

 

 

(8%)

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted weighted average shares (h)

 

106,973,019

 

 

 

114,958,432

 

 

(7%)

 

 

 

 

 

 

 

 

 

 

 

 

 

Effective tax rate (i)

25.9%

 

 

26.7%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for the corresponding U.S. GAAP measures, and should be read only in conjunction with our consolidated financial statements prepared in accordance with U.S. GAAP. For a detailed explanation of the adjustments made to the corresponding U.S. GAAP measures, see Reconciliation of U.S. GAAP to Selected Summary Financial Information and Notes to Financial Schedules.

 

LAZARD LTD

 

ASSETS UNDER MANAGEMENT ("AUM")

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

($ in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of

 

 

Variance

 

 

June 30,

 

 

March 31,

 

 

December 31,

 

 

 

 

 

 

 

 

 

 

2022

 

 

2022

 

 

2021

 

 

Qtr to Qtr

 

 

YTD

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Emerging Markets

$

22,656

 

 

$

26,575

 

 

$

31,227

 

 

(14.7%)

 

 

(27.4%)

 

Global

 

48,742

 

 

 

55,810

 

 

 

59,516

 

 

(12.7%)

 

 

(18.1%)

 

Local

 

46,617

 

 

 

53,832

 

 

 

56,310

 

 

(13.4%)

 

 

(17.2%)

 

Multi-Regional

 

52,259

 

 

 

64,810

 

 

 

73,953

 

 

(19.4%)

 

 

(29.3%)

 

Total Equity

 

170,274

 

 

 

201,027

 

 

 

221,006

 

 

(15.3%)

 

 

(23.0%)

 

Fixed Income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Emerging Markets

 

9,948

 

 

 

11,997

 

 

 

12,231

 

 

(17.1%)

 

 

(18.7%)

 

Global

 

12,380

 

 

 

13,881

 

 

 

14,410

 

 

(10.8%)

 

 

(14.1%)

 

Local

 

5,302

 

 

 

5,652

 

 

 

6,022

 

 

(6.2%)

 

 

(12.0%)

 

Multi-Regional

 

12,299

 

 

 

13,454

 

 

 

13,623

 

 

(8.6%)

 

 

(9.7%)

 

Total Fixed Income

 

39,929

 

 

 

44,984

 

 

 

46,286

 

 

(11.2%)

 

 

(13.7%)

 

Alternative Investments

 

4,145

 

 

 

4,483

 

 

 

4,203

 

 

(7.5%)

 

 

(1.4%)

 

Private Equity

 

1,268

 

 

 

1,256

 

 

 

1,290

 

 

0.9%

 

 

(1.7%)

 

Cash Management

 

1,010

 

 

 

925

 

 

 

954

 

 

9.2%

 

 

5.9%

 

Total AUM

$

216,626

 

 

$

252,675

 

 

$

273,739

 

 

(14.3%)

 

 

(20.9%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

 

 

 

 

 

Six Months Ended June 30,

 

 

2022

 

 

2021

 

 

 

 

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AUM - Beginning of Period

$

252,675

 

 

$

264,852

 

 

 

 

 

 

$

273,739

 

 

$

258,642

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Flows

 

(4,649

)

 

 

(828

)

 

 

 

 

 

 

(11,174

)

 

 

(2,507

)

Market and foreign exchange

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

appreciation (depreciation)

 

(31,400

)

 

 

13,354

 

 

 

 

 

 

 

(45,939

)

 

 

21,243

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AUM - End of Period

$

216,626

 

 

$

277,378

 

 

 

 

 

 

$

216,626

 

 

$

277,378

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average AUM

$

230,162

 

 

$

275,851

 

 

 

 

 

 

$

243,263

 

 

$

268,657

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

% Change in average AUM

(16.6%)

 

 

 

 

 

 

 

 

 

 

(9.5%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Note: Average AUM generally represents the average of the monthly ending AUM balances for the period.

 

 

 

 

 

LAZARD LTD

 

RECONCILIATION OF U.S. GAAP TO SELECTED SUMMARY FINANCIAL INFORMATION (a)

 

(unaudited)

 

 

Three Months Ended

 

 

Six Months Ended

 

 

June 30,

 

 

March 31,

 

 

June 30,

 

 

June 30,

 

 

June 30,

 

($ in thousands, except per share data)

2022

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Revenue

 

Net revenue - U.S. GAAP Basis

$

639,546

 

 

$

694,892

 

 

$

823,137

 

 

$

1,334,438

 

 

$

1,483,244

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue related to noncontrolling interests (j)

 

(660

)

 

 

(10,795

)

 

 

(5,754

)

 

 

(11,455

)

 

 

(12,115

)

(Gains) losses related to Lazard Fund Interests ("LFI") and other similar arrangements

 

35,098

 

 

 

14,323

 

 

 

(16,491

)

 

 

49,421

 

 

 

(23,978

)

Distribution fees, reimbursable deal costs, bad debt expense and other (k)

 

(17,083

)

 

 

(18,822

)

 

 

(21,625

)

 

 

(35,905

)

 

 

(38,335

)

Losses associated with restructuring and closing of certain offices (l)

 

-

 

 

 

-

 

 

 

23,579

 

 

 

-

 

 

 

23,579

 

Interest expense

 

19,010

 

 

 

19,037

 

 

 

18,600

 

 

 

38,047

 

 

 

36,913

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating revenue, as adjusted (b)

$

675,911

 

 

$

698,635

 

 

$

821,446

 

 

$

1,374,546

 

 

$

1,469,308

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and Benefits Expense

 

Compensation and benefits expense - U.S. GAAP Basis

$

363,830

 

 

$

396,841

 

 

$

514,918

 

 

$

760,671

 

 

$

916,464

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Charges) credits pertaining to LFI and other similar arrangements

 

35,098

 

 

 

14,323

 

 

 

(16,491

)

 

 

49,421

 

 

 

(23,978

)

Expenses associated with restructuring and closing of certain offices (m)

 

-

 

 

 

-

 

 

 

(7,287

)

 

 

-

 

 

 

(13,910

)

Compensation related to noncontrolling interests (j)

 

(3,521

)

 

 

(2,462

)

 

 

(2,380

)

 

 

(5,983

)

 

 

(4,338

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits expense, as adjusted (c)

$

395,407

 

 

$

408,702

 

 

$

488,760

 

 

$

804,109

 

 

$

874,238

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-Compensation Expense

 

Non-compensation expense - Subtotal - U.S. GAAP Basis

$

149,878

 

 

$

138,323

 

 

$

141,958

 

 

$

288,201

 

 

$

266,229

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses related to office space reorganization (n)

 

(871

)

 

 

(1,124

)

 

 

(1,237

)

 

 

(1,995

)

 

 

(2,653

)

Distribution fees, reimbursable deal costs, bad debt expense and other (k)

 

(17,083

)

 

 

(18,822

)

 

 

(21,625

)

 

 

(35,905

)

 

 

(38,335

)

Amortization of intangible assets related to acquisitions

 

(15

)

 

 

(15

)

 

 

(15

)

 

 

(30

)

 

 

(30

)

Income (expenses) associated with restructuring and closing of certain offices (m)

 

-

 

 

 

-

 

 

 

1,586

 

 

 

-

 

 

 

(1,385

)

Non-compensation expense related to noncontrolling interests (j)

 

(968

)

 

 

(1,236

)

 

 

(1,837

)

 

 

(2,204

)

 

 

(2,516

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-compensation expense, as adjusted (d)

$

130,941

 

 

$

117,126

 

 

$

118,830

 

 

$

248,067

 

 

$

221,310

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-Tax Income and Earnings From Operations

 

Operating Income - U.S. GAAP Basis

$

125,838

 

 

$

159,728

 

 

$

166,261

 

 

$

285,566

 

 

$

300,551

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Losses associated with restructuring and closing of certain offices (l)

 

-

 

 

 

-

 

 

 

23,579

 

 

 

-

 

 

 

23,579

 

Expenses related to office space reorganization (n)

 

871

 

 

 

1,124

 

 

 

1,237

 

 

 

1,995

 

 

 

2,653

 

Expenses associated with restructuring and closing of certain offices (m)

 

-

 

 

 

-

 

 

 

5,701

 

 

 

-

 

 

 

15,295

 

Net income (loss) related to noncontrolling interests (j)

 

3,829

 

 

 

(7,099

)

 

 

(1,738

)

 

 

(3,270

)

 

 

(5,264

)

Pre-tax income, as adjusted

 

130,538

 

 

 

153,753

 

 

 

195,040

 

 

 

284,291

 

 

 

336,814

 

Interest expense

 

19,010

 

 

 

19,037

 

 

 

18,600

 

 

 

38,047

 

 

 

36,913

 

Amortization of intangible assets related to acquisitions and other

 

15

 

 

 

17

 

 

 

216

 

 

 

32

 

 

 

33

 

Earnings from operations, as adjusted (e)

$

149,563

 

 

$

172,807

 

 

$

213,856

 

 

$

322,370

 

 

$

373,760

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income attributable to Lazard Ltd

 

Net income attributable to Lazard Ltd - U.S. GAAP Basis

$

95,480

 

 

$

113,876

 

 

$

123,178

 

 

$

209,356

 

 

$

210,478

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Losses associated with restructuring and closing of certain offices (l)

 

-

 

 

 

-

 

 

 

23,579

 

 

 

-

 

 

 

23,579

 

Expenses related to office space reorganization (n)

 

871

 

 

 

1,124

 

 

 

1,237

 

 

 

1,995

 

 

 

2,653

 

Expenses associated with restructuring and closing of certain offices (m)

 

-

 

 

 

-

 

 

 

5,701

 

 

 

-

 

 

 

15,295

 

Tax benefit allocated to adjustments

 

(243

)

 

 

(308

)

 

 

(7,897

)

 

 

(551

)

 

 

(4,986

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income, as adjusted (g)

$

96,108

 

 

$

114,692

 

 

$

145,798

 

 

$

210,800

 

 

$

247,019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Weighted Average Shares Outstanding

 

Diluted Weighted Average Shares Outstanding - U.S. GAAP Basis

 

102,753,336

 

 

 

108,186,642

 

 

 

113,603,478

 

 

 

105,469,988

 

 

 

114,712,885

 

Adjustment: participating securities including profits interest participation rights

 

2,014,561

 

 

 

991,501

 

 

 

455,466

 

 

 

1,503,031

 

 

 

245,547

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Weighted Average Shares Outstanding, as adjusted (h)

 

104,767,897

 

 

 

109,178,143

 

 

 

114,058,944

 

 

 

106,973,019

 

 

 

114,958,432

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. GAAP Basis

$

0.92

 

 

$

1.05

 

 

$

1.08

 

 

$

1.97

 

 

$

1.83

 

Non-GAAP Basis, as adjusted

$

0.92

 

 

$

1.05

 

 

$

1.28

 

 

$

1.97

 

 

$

2.15

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for the corresponding U.S. GAAP measures, and should be read only in conjunction with our consolidated financial statements prepared in accordance with U.S. GAAP. For a detailed explanation of the adjustments made to the corresponding U.S. GAAP measures, see Notes to Financial Schedules.

 

 

 

See Notes to Financial Schedules

 

LAZARD LTD

 

RECONCILIATION OF NON-COMPENSATION U.S. GAAP TO ADJUSTED (a)

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

June 30,

 

 

March 31,

 

 

June 30,

 

 

June 30,

 

 

June 30,

 

($ in thousands)

2022

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-compensation expense - U.S. GAAP Basis:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Occupancy and equipment

$

29,409

 

 

$

31,239

 

 

$

29,875

 

 

$

60,648

 

 

$

64,623

 

Marketing and business development

 

22,673

 

 

 

14,123

 

 

 

9,332

 

 

 

36,796

 

 

 

15,983

 

Technology and information services

 

42,067

 

 

 

37,931

 

 

 

35,774

 

 

 

79,998

 

 

 

69,444

 

Professional services

 

16,549

 

 

 

16,029

 

 

 

19,996

 

 

 

32,578

 

 

 

34,944

 

Fund administration and outsourced services

 

28,551

 

 

 

29,703

 

 

 

31,302

 

 

 

58,254

 

 

 

60,581

 

Amortization of intangible assets related to acquisitions

 

15

 

 

 

15

 

 

 

15

 

 

 

30

 

 

 

30

 

Other

 

10,614

 

 

 

9,283

 

 

 

15,664

 

 

 

19,897

 

 

 

20,624

 

Non-compensation expense - Subtotal - U.S. GAAP Basis

$

149,878

 

 

$

138,323

 

 

$

141,958

 

 

$

288,201

 

 

$

266,229

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-compensation expense - Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Occupancy and equipment (j) (m) (n)

$

(932

)

 

$

(1,183

)

 

$

788

 

 

$

(2,115

)

 

$

(3,397

)

Marketing and business development (j) (k) (m)

 

(2,043

)

 

 

(1,225

)

 

 

(1,247

)

 

 

(3,268

)

 

 

(1,452

)

Technology and information services (j) (k) (m)

 

(61

)

 

 

(30

)

 

 

(88

)

 

 

(91

)

 

 

(102

)

Professional services (j) (k) (m) (n)

 

(403

)

 

 

(738

)

 

 

(2,054

)

 

 

(1,141

)

 

 

(3,515

)

Fund administration and outsourced services (j) (k)

 

(15,680

)

 

 

(16,512

)

 

 

(16,826

)

 

 

(32,192

)

 

 

(32,096

)

Amortization of intangible assets related to acquisitions

 

(15

)

 

 

(15

)

 

 

(15

)

 

 

(30

)

 

 

(30

)

Other (j) (k) (n)

 

197

 

 

 

(1,494

)

 

 

(3,686

)

 

 

(1,297

)

 

 

(4,327

)

Subtotal Non-compensation adjustments

$

(18,937

)

 

$

(21,197

)

 

$

(23,128

)

 

$

(40,134

)

 

$

(44,919

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-compensation expense, as adjusted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Occupancy and equipment

$

28,477

 

 

$

30,056

 

 

$

30,663

 

 

$

58,533

 

 

$

61,226

 

Marketing and business development

 

20,630

 

 

 

12,898

 

 

 

8,085

 

 

 

33,528

 

 

 

14,531

 

Technology and information services

 

42,006

 

 

 

37,901

 

 

 

35,686

 

 

 

79,907

 

 

 

69,342

 

Professional services

 

16,146

 

 

 

15,291

 

 

 

17,942

 

 

 

31,437

 

 

 

31,429

 

Fund administration and outsourced services

 

12,871

 

 

 

13,191

 

 

 

14,476

 

 

 

26,062

 

 

 

28,485

 

Amortization of intangible assets related to acquisitions

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Other

 

10,811

 

 

 

7,789

 

 

 

11,978

 

 

 

18,600

 

 

 

16,297

 

Non-compensation expense, as adjusted (d)

$

130,941

 

 

$

117,126

 

 

$

118,830

 

 

$

248,067

 

 

$

221,310

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for the corresponding U.S. GAAP measures, and should be read only in conjunction with our consolidated financial statements prepared in accordance with U.S. GAAP. For a detailed explanation of the adjustments made to the corresponding U.S. GAAP measures, see Notes to Financial Schedules.

 

 

 

See Notes to Financial Schedules

 

LAZARD LTD

 

 

 

 

 

 

 

Notes to Financial Schedules

 

 

 

 

 

 

 

(a)

Selected Summary Financial Information are non-GAAP measures. Lazard believes that presenting results and measures on an adjusted basis in conjunction with U.S. GAAP measures provides a meaningful and useful basis for comparison of its operating results across periods.

 

 

 

 

 

 

 

(b)

A non-GAAP measure which excludes (i) revenue related to noncontrolling interests (see (j) below), (ii) (gains) losses related to the changes in the fair value of investments held in connection with Lazard Fund Interests and other similar deferred compensation arrangements for which a corresponding equal amount is excluded from compensation & benefits expense, (iii) revenue related to distribution fees, reimbursable deal costs in accordance with the revenue recognition guidance, bad debt expense, and other (see (k) below), (iv) for the three and six month periods ended June 30, 2021, losses associated with restructuring and closing of certain offices (see (l) below), and (v) interest expense primarily related to corporate financing activities.

 

 

 

 

 

 

 

(c)

A non-GAAP measure which excludes (i) (charges) credits related to the changes in the fair value of the compensation liability recorded in connection with Lazard Fund Interests and other similar deferred compensation arrangements, (ii) for the three and six month periods ended June 30, 2021, expenses associated with restructuring and closing of certain offices (see (m) below), and (iii) compensation and benefits related to noncontrolling interests (see (j) below).

 

 

 

 

 

 

 

(d)

A non-GAAP measure which excludes (i) expenses related to office space reorganization (see (n) below), (ii) expenses related to distribution fees, reimbursable deal costs in accordance with the revenue recognition guidance, bad debt expense, and other (see (k) below), (iii) amortization of intangible assets related to acquisitions, (iv) for the three and six month periods ended June 30, 2021, income (expenses) associated with restructuring and closing of certain offices (see (m) below), and (v) expenses related to noncontrolling interests (see (j) below).

 

 

 

 

 

 

 

(e)

A non-GAAP measure which excludes (i) for the three and six month periods ended June 30, 2021, losses associated with restructuring and closing of certain offices (see (l) below), (ii) expenses related to office space reorganization (see (n) below), (iii) for the three and six month periods ended June 30, 2021, expenses associated with restructuring and closing of certain offices (see (m) below), (iv) net revenue and expenses related to noncontrolling interests (see (j) below), (v) interest expense primarily related to corporate financing activities, and (vi) amortization of intangible assets related to acquisitions.

 

 

 

 

 

 

 

(f)

Represents earnings from operations as a percentage of operating revenue, and is a non-GAAP measure.

 

 

 

 

 

 

 

(g)

A non-GAAP measure which excludes (i) for the three and six month periods ended June 30, 2021, losses associated with restructuring and closing of certain offices (see (l) below), (ii) expenses related to office space reorganization (see (n) below), and (iii) for the three and six month periods ended June 30, 2021, expenses associated with restructuring and closing of certain offices (see (m) below), net of tax benefits.

 

 

 

 

 

 

 

(h)

A non-GAAP measure which includes units of the long-term incentive compensation program consisting of profits interest participation rights, which are equity incentive awards that, subject to certain conditions, may be exchanged for shares of our common stock. Certain profits interest participation rights and other participating securities may be excluded from the computation of outstanding stock equivalents for U.S. GAAP net income per share.

 

 

 

 

 

 

 

(i)

Effective tax rate is a non-GAAP measure based upon the U.S. GAAP rate with adjustments for the tax applicable to the non-GAAP adjustments to operating income, generally based upon the effective marginal tax rate in the applicable jurisdiction of the adjustments. The computation is based on a quotient, the numerator of which is the provision for income taxes of $34,430, $39,061, and $49,242 for the three month periods ended June 30, 2022, March 31, 2022, and June 30, 2021, respectively, $73,491 and $89,795 for the six month periods ended June 30, 2022 and 2021 and the denominator of which is pre-tax income of $130,538, $153,753, and $195,040 for the three month periods ended June 30, 2022, March 31, 2022, and June 30, 2021, respectively, $284,291 and $336,814 for the six month periods ended June 30, 2022 and 2021.

 

 

 

 

 

 

 

(j)

Noncontrolling interests include revenue and expenses principally related to Edgewater, ESC Funds and a Special Purpose Acquisition Company.

 

 

 

 

 

 

 

(k)

Represents certain distribution, introducer and management fees paid to third parties and reimbursable deal costs for which an equal amount is excluded from both non-GAAP operating revenue and non-compensation expense, respectively, and excludes bad debt expense, which represents fees that are deemed uncollectible.

 

 

 

 

 

 

 

(l)

Represents losses related to the reclassification of currency translation adjustments to earnings from accumulated other comprehensive loss associated with restructuring and closing of certain of our offices.

 

 

 

 

 

 

 

(m)

Expenses associated with restructuring and closing of certain offices.

 

 

 

 

 

 

 

(n)

Represents building depreciation and other costs related to office space reorganization.

 

 

 

 

 

 

 

NM

Not meaningful

 

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