LAZ 8-K
Lazard, Inc. (LAZ)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
(Exact name of registrant as specified in its charter)
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Registrant’s Telephone Number, Including Area Code:
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02Results of Operations and Financial Condition.
On October 27, 2022, Lazard Ltd (the “Company”) issued a press release announcing financial results for its third quarter ended September 30, 2022. A copy of the Company’s press release containing this information is being furnished as Exhibit 99.1 to this Report on Form 8-K and is incorporated herein by reference.
The information furnished pursuant to this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933 or the Exchange Act.
Item 9.01Financial Statements and Exhibits.
(d) Exhibits. The following exhibits are filed or furnished as part of this Report on Form 8-K:
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Exhibit Number |
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Description |
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99.1 |
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104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report on Form 8-K to be signed on its behalf by the undersigned hereunto duly authorized.
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LAZARD LTD (Registrant) |
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By: |
/s/ Scott D. Hoffman |
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Name: |
Scott D. Hoffman |
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Title: |
Chief Administrative Officer and General Counsel |
Dated: October 27, 2022
Exhibit 99.1
LAZARD LTD REPORTS
THIRD-QUARTER AND NINE-MONTH 2022 RESULTS
NEW YORK, October 27, 2022 – Lazard Ltd (NYSE: LAZ) today reported operating revenue1 of $724 million for the quarter ended September 30, 2022. Net income, as adjusted2, was $106 million, or $1.05 per share (diluted) for the quarter. On a U.S. GAAP basis, third-quarter 2022 net income was $106 million, or $1.06 per share (diluted).
For the first nine months of 2022, net income, as adjusted, was $317 million, or $3.02 per share (diluted). On a U.S. GAAP basis, net income for the first nine months was $315 million, or $3.03 per share (diluted).
“Our record third-quarter revenue reflects the strength of our diversified business model and our commitment to providing innovative client solutions during challenging market conditions,” said Kenneth M. Jacobs, Chairman and Chief Executive Officer of Lazard. “We remain focused on helping our clients navigate the uncertainty of the global macroenvironment, while we continue to invest in our business through the cycle, exercise cost discipline and deliver long-term value for shareholders."
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($ in millions, except |
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Quarter Ended |
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Nine Months Ended |
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per share data and AUM) |
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September 30, |
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September 30, |
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2022 |
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2021 |
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%'22-'21 |
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2022 |
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2021 |
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%'22-'21 |
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Net Income |
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U.S. GAAP |
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$106 |
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$107 |
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(1%) |
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$315 |
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$318 |
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(1%) |
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Per share, diluted |
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$1.06 |
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$0.94 |
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13% |
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$3.03 |
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$2.78 |
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9% |
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Adjusted2 |
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$106 |
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$111 |
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(4%) |
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$317 |
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$358 |
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(11%) |
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Per share, diluted |
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$1.05 |
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$0.98 |
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7% |
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$3.02 |
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$3.13 |
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(4%) |
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Operating Revenue1 |
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Total operating revenue |
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$724 |
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$702 |
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3% |
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$2,098 |
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$2,171 |
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(3%) |
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Financial Advisory |
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$454 |
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$381 |
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19% |
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$1,249 |
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$1,170 |
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7% |
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Asset Management |
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$263 |
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$311 |
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(15%) |
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$840 |
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$982 |
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(14%) |
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AUM ($ in billions) |
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Period end |
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$198 |
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$273 |
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(27%) |
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Average |
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$212 |
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$278 |
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(24%) |
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$233 |
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$272 |
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(14%) |
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Media Contact: Judi Frost Mackey |
+1 212 632 1428 |
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Investor Contact: Alexandra Deignan |
+1 212 632 6886 |
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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 a third-quarter record $724 million for the third quarter of 2022, up 3% from the third quarter of 2021, and $2,098 million for the first nine months of 2022, down 3% from the first nine months of 2021.
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 third quarter of 2022, Financial Advisory operating revenue was a third-quarter record $454 million, 19% higher than the third quarter of 2021.
For the first nine months of 2022, Financial Advisory operating revenue was a record $1,249 million, an increase of 7% from the first nine months of 2021.
During and since the third quarter of 2022, Lazard has been engaged in significant and complex M&A transactions and other strategic advisory assignments globally, including the following (clients are in italics): Intel’s joint $30 billion investment with Brookfield in U.S.-based chip factories; Orange’s combination with Masmovil in Spain, for a combined value of €18.6 billion; AVEVA Group’s $11.6 billion recommended offer from Schneider Electric; Continental Grain (CGC) and its subsidiary Wayne Farms, in CGC’s and Cargill's $4.5 billion acquisition of Sanderson Farms; Bungie’s $3.6 billion sale to Sony Interactive Entertainment; Saint-Gobain’s $2.3 billion acquisition of GCP Applied Technologies; Rolls-Royce's €1.7 billion sale of ITP Aero to a Bain Capital-led consortium; Brewin Dolphins’ £1.6 billion sale to Royal Bank of Canada; Obagi’s $1.2 billion combination with Waldencast and Milk Makeup; Infrastructure & Energy Alternatives’ $1.1 billion sale to MasTec; Aqua Finance’s majority sale to Athene and Apollo at a valuation of approximately $1 billion; Investindustrial’s $950 million acquisition of a significant portion of TreeHouse Food’s Meal Preparation business; Institut Mérieux's partnership with and investment of €833 million in the company by Exor; Germany’s Federal Ministry for Economic Affairs and Climate Action on the Federal Republic of Germany’s acquisition of a 99% stake in Uniper; KIRKBI’s acquisition of BrainPOP; and Kofax's sale to Clearlake Capital Group and TA Associates.
Lazard has one of the world’s preeminent restructuring practices. During and since the third 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: Bed Bath & Beyond; Brazos Electric Power Cooperative; Corp Group Banking S.A.; Endo; GenapSys and Rockall Energy.
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.
2
For a list of publicly announced Financial Advisory transactions on which Lazard advised in the third quarter of 2022, or continued to advise or completed since September 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 third quarter of 2022, Asset Management operating revenue was $263 million, 15% lower than the third quarter of 2021. For the first nine months of 2022, Asset Management operating revenue was $840 million, 14% lower than the first nine months of 2021.
For the third quarter of 2022, management fees and other revenue was $241 million, 20% lower than the third quarter of 2021, and 7% lower than the second quarter of 2022. For the first nine months of 2022, management fees and other revenue was $786 million, 13% lower than the first nine months of 2021.
Average assets under management (AUM) for the third quarter of 2022 was $212 billion, 24% lower than the third quarter of 2021, and 8% lower than the second quarter of 2022. Average AUM for the first nine months of 2022 was $233 billion, 14% lower than the first nine months of 2021.
AUM as of September 30, 2022, was $198 billion, down 9% from June 30, 2022, and down 27% from September 30, 2021. The sequential decrease from June 30, 2022 was driven by market depreciation of $10.3 billion, foreign exchange depreciation of $6.6 billion and net outflows of $2.0 billion.
For the third quarter of 2022, incentive fees were $22 million, compared to $7 million for the third quarter of 2021. For the first nine months of 2022, incentive fees were $54 million, compared to $75 million for the first nine months 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.
3
For the third quarter of 2022, we accrued compensation and benefits expense at an adjusted compensation1 ratio of 60.0%, compared to the third-quarter 2021 ratio of 59.5%. This resulted in $434 million of compensation and benefits expense, compared to $417 million for the third quarter of 2021.
For the first nine months of 2022, adjusted compensation and benefits expense was $1,238 million, compared to $1,292 million for the first nine months 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 third quarter of 2022, was $128 million, 10% higher than the third 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 third quarter of 2022 was 17.7%, compared to 16.6% for the third quarter of 2021.
Adjusted non-compensation expense for the first nine months of 2022 was $376 million, 11% higher than the first nine months of 2021. The adjusted non-compensation ratio1 for the first nine months of 2022 was 17.9%, compared to 15.6% for the first nine months of 2021.
Our goal remains to maintain 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 $36 million for the third quarter and $109 million for the first nine months of 2022. The effective tax rate on the same basis was 25.1% for the third quarter and 25.6% for the first nine months of 2022, compared to 25.1% and 26.2% 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 third quarter of 2022, Lazard returned $286 million to shareholders, which included: $46 million in dividends; $237 million in share repurchases of our common stock; and $3 million in satisfaction of employee tax obligations in lieu of share issuances upon vesting of equity grants.
4
In the first nine months of 2022, Lazard returned $812 million to shareholders, which included: $139 million in dividends; $612 million in share repurchases of our common stock; and $61 million in satisfaction of employee tax obligations in lieu of share issuances upon vesting of equity grants.
During the first nine months of 2022, we repurchased a record 17.2 million shares, which included 6.7 million shares repurchased in the third quarter. As of September 30, 2022, our remaining share repurchase authorization was $382 million.
On October 26, 2022, Lazard declared a quarterly dividend of $0.50 per share on its outstanding common stock. The dividend is payable on November 18, 2022, to stockholders of record on November 7, 2022.
Lazard’s financial position remains strong. As of September 30, 2022, our cash and cash equivalents were $1 billion. Stockholders’ equity related to Lazard’s interests was $561 million.
***
Lazard will host a conference call at 8:00 a.m. EDT on October 27, 2022, to discuss the company’s financial results for the third quarter and first nine months 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 1 866-831-8711 (toll-free, U.S. and Canada) or +1 203-518-9865 (outside of the U.S. and Canada), 15 minutes prior to the start of the call. Conference ID: 69483
A replay of the conference call will be available by 10:00 a.m. EDT, October 27, 2022, via the Lazard Investor Relations website at www.lazard.com, or by dialing 1 800-839-5676 (toll-free, U.S. and Canada) or +1 402-220-2565 (outside of the U.S. and Canada).
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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:
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A decline in general economic conditions or the global or regional financial markets; |
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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); |
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Losses caused by financial or other problems experienced by third parties; |
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Losses due to unidentified or unanticipated risks; |
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A lack of liquidity, i.e., ready access to funds, for use in our businesses; and |
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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.
***
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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 Third-quarter and first-nine-months 2022 adjusted results1 exclude pre-tax charges of $0.9 million and $2.9 million, respectively, relating to office space reorganization. On a U.S. GAAP basis, these resulted in a net charge of $0.7 million, or $0.01 (diluted) per share, for the third quarter, and a net charge of $2.1 million, or $0.02 (diluted) per share, for the first nine months of 2022.
LAZ-EPE
###
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LAZARD LTD |
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UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS |
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(U.S. GAAP) |
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Three Months Ended |
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% Change From |
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September 30, |
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June 30, |
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September 30, |
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June 30, |
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September 30, |
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($ in thousands, except per share data) |
2022 |
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2022 |
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2021 |
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2022 |
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2021 |
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Total revenue |
$ |
746,431 |
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$ |
660,658 |
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$ |
737,807 |
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13% |
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1% |
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Interest expense |
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(19,687 |
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(21,112 |
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(20,378 |
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Net revenue |
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726,744 |
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639,546 |
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717,429 |
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14% |
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1% |
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Operating expenses: |
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Compensation and benefits |
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420,937 |
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363,830 |
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419,627 |
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16% |
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0% |
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Occupancy and equipment |
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30,696 |
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29,409 |
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31,015 |
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Marketing and business development |
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19,633 |
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22,673 |
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9,922 |
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Technology and information services |
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44,579 |
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42,067 |
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37,559 |
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Professional services |
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15,665 |
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16,549 |
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16,698 |
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Fund administration and outsourced services |
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27,110 |
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28,551 |
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34,137 |
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Amortization of intangible assets related to acquisitions |
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15 |
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15 |
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15 |
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Other |
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9,967 |
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10,614 |
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13,497 |
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Subtotal |
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147,665 |
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149,878 |
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142,843 |
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(1%) |
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3% |
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Operating expenses |
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568,602 |
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513,708 |
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562,470 |
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11% |
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1% |
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Operating income |
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158,142 |
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125,838 |
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154,959 |
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26% |
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2% |
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Provision for income taxes |
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35,350 |
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34,187 |
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39,446 |
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3% |
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(10%) |
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Net income |
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122,792 |
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91,651 |
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115,513 |
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34% |
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6% |
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Net income (loss) attributable to noncontrolling interests |
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16,995 |
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(3,829 |
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8,304 |
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Net income attributable to Lazard Ltd |
$ |
105,797 |
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$ |
95,480 |
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$ |
107,209 |
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11% |
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(1%) |
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Attributable to Lazard Ltd Common Stockholders: |
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Weighted average shares outstanding: |
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Basic |
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93,275,631 |
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98,660,173 |
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105,415,743 |
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(5%) |
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(12%) |
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Diluted |
|
98,865,156 |
|
|
|
102,753,336 |
|
|
|
112,994,037 |
|
|
(4%) |
|
|
(13%) |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
1.11 |
|
|
$ |
0.96 |
|
|
$ |
1.00 |
|
|
16% |
|
|
11% |
|
||
|
Diluted |
$ |
1.06 |
|
|
$ |
0.92 |
|
|
$ |
0.94 |
|
|
15% |
|
|
13% |
|
||
8
|
LAZARD LTD |
|
||||||||||
|
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS |
|
||||||||||
|
(U.S. GAAP) |
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
|||||||||
|
|
September 30, |
|
|
September 30, |
|
|
|
|
|
||
|
($ in thousands, except per share data) |
2022 |
|
|
2021 |
|
|
% Change |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue |
$ |
2,123,233 |
|
|
$ |
2,260,975 |
|
|
(6%) |
|
|
|
Interest expense |
|
(62,051 |
) |
|
|
(60,302 |
) |
|
|
|
|
|
Net revenue |
|
2,061,182 |
|
|
|
2,200,673 |
|
|
(6%) |
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and benefits |
|
1,181,608 |
|
|
|
1,336,091 |
|
|
(12%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy and equipment |
|
91,344 |
|
|
|
95,638 |
|
|
|
|
|
|
Marketing and business development |
|
56,429 |
|
|
|
25,905 |
|
|
|
|
|
|
Technology and information services |
|
124,577 |
|
|
|
107,003 |
|
|
|
|
|
|
Professional services |
|
48,243 |
|
|
|
51,642 |
|
|
|
|
|
|
Fund administration and outsourced services |
|
85,364 |
|
|
|
94,718 |
|
|
|
|
|
|
Amortization of intangible assets related to acquisitions |
|
45 |
|
|
|
45 |
|
|
|
|
|
|
Other |
|
29,864 |
|
|
|
34,121 |
|
|
|
|
|
|
Subtotal |
|
435,866 |
|
|
|
409,072 |
|
|
7% |
|
|
|
Operating expenses |
|
1,617,474 |
|
|
|
1,745,163 |
|
|
(7%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
443,708 |
|
|
|
455,510 |
|
|
(3%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes |
|
108,290 |
|
|
|
124,255 |
|
|
(13%) |
|
|
|
Net income |
|
335,418 |
|
|
|
331,255 |
|
|
1% |
|
|
|
Net income attributable to noncontrolling interests |
|
20,265 |
|
|
|
13,568 |
|
|
|
|
|
|
Net income attributable to Lazard Ltd |
$ |
315,153 |
|
|
$ |
317,687 |
|
|
(1%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to Lazard Ltd Common Stockholders: |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
98,161,027 |
|
|
|
106,484,652 |
|
|
(8%) |
|
|
|
Diluted |
|
103,268,378 |
|
|
|
114,139,936 |
|
|
(10%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
3.16 |
|
|
$ |
2.94 |
|
|
7% |
|
|
|
Diluted |
$ |
3.03 |
|
|
$ |
2.78 |
|
|
9% |
|
|
9
|
LAZARD LTD |
|||||||||||
|
UNAUDITED CONDENSED CONSOLIDATED |
|||||||||||
|
STATEMENT OF FINANCIAL CONDITION |
|||||||||||
|
(U.S. GAAP) |
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
|
December 31, |
|
|
|
||
|
($ in thousands) |
|
|
2022 |
|
|
2021 |
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS |
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
1,000,102 |
|
|
$ |
1,465,022 |
|
|
|
||
|
Deposits with banks and short-term investments |
|
1,341,514 |
|
|
|
1,347,544 |
|
|
|
||
|
Restricted cash |
|
621,099 |
|
|
|
617,448 |
|
|
|
||
|
Receivables |
|
740,395 |
|
|
|
805,809 |
|
|
|
||
|
Investments |
|
638,960 |
|
|
|
1,007,339 |
|
|
|
||
|
Property |
|
218,551 |
|
|
|
250,005 |
|
|
|
||
|
Goodwill and other intangible assets |
|
375,889 |
|
|
|
379,571 |
|
|
|
||
|
Operating lease right-of-use assets |
|
420,013 |
|
|
|
466,054 |
|
|
|
||
|
Deferred tax assets |
|
390,543 |
|
|
|
435,308 |
|
|
|
||
|
Other assets |
|
460,859 |
|
|
|
373,081 |
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets |
$ |
6,207,925 |
|
|
$ |
7,147,181 |
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS & STOCKHOLDERS' EQUITY |
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
||
|
Deposits and other customer payables |
$ |
1,499,812 |
|
|
$ |
1,442,701 |
|
|
|
||
|
Accrued compensation and benefits |
|
531,496 |
|
|
|
972,303 |
|
|
|
||
|
Operating lease liabilities |
|
502,206 |
|
|
|
552,522 |
|
|
|
||
|
Tax receivable agreement obligation |
|
192,399 |
|
|
|
213,434 |
|
|
|
||
|
Senior debt |
|
1,687,092 |
|
|
|
1,685,227 |
|
|
|
||
|
Other liabilities |
|
539,101 |
|
|
|
628,030 |
|
|
|
||
|
Total liabilities |
|
4,952,106 |
|
|
|
5,494,217 |
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
||
|
Redeemable noncontrolling interests |
|
578,495 |
|
|
|
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 |
|
126,746 |
|
|
|
144,729 |
|
|
|
||
|
Retained earnings |
|
1,682,398 |
|
|
|
1,560,636 |
|
|
|
||
|
Accumulated other comprehensive loss, net of tax |
|
(334,382 |
) |
|
|
(223,847 |
) |
|
|
||
|
Subtotal |
|
1,475,890 |
|
|
|
1,482,646 |
|
|
|
||
|
Class A common stock held by subsidiaries, at cost |
|
(915,254 |
) |
|
|
(507,426 |
) |
|
|
||
|
Total Lazard Ltd stockholders' equity |
|
560,636 |
|
|
|
975,220 |
|
|
|
||
|
Noncontrolling interests |
|
116,688 |
|
|
|
102,744 |
|
|
|
||
|
Total stockholders' equity |
|
677,324 |
|
|
|
1,077,964 |
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities, redeemable noncontrolling interests and stockholders' equity |
$ |
6,207,925 |
|
|
$ |
7,147,181 |
|
|
|
||
10
|
LAZARD LTD |
|
||||||||||||||||||
|
SELECTED SUMMARY FINANCIAL INFORMATION (a) |
|
||||||||||||||||||
|
(Non-GAAP - unaudited) |
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
% Change From |
|
||||||||||||||
|
|
September 30, |
|
|
June 30, |
|
|
September 30, |
|
|
June 30, |
|
|
September 30, |
|
|||||
|
($ in thousands, except per share data) |
2022 |
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Advisory |
$ |
453,664 |
|
|
$ |
406,792 |
|
|
$ |
381,295 |
|
|
12% |
|
|
19% |
|
||
|
Asset Management |
|
262,559 |
|
|
|
265,707 |
|
|
|
310,566 |
|
|
(1%) |
|
|
(15%) |
|
||
|
Corporate |
|
7,328 |
|
|
|
3,412 |
|
|
|
9,783 |
|
|
NM |
|
|
(25%) |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenue (b) |
$ |
723,551 |
|
|
$ |
675,911 |
|
|
$ |
701,644 |
|
|
7% |
|
|
3% |
|
||
|
|
|
||||||||||||||||||
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted compensation and benefits expense (c) |
$ |
434,131 |
|
|
$ |
395,407 |
|
|
$ |
417,479 |
|
|
10% |
|
|
4% |
|
||
|
Ratio of adjusted compensation to operating revenue |
60.0% |
|
|
58.5% |
|
|
59.5% |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-compensation expense (d) |
$ |
128,263 |
|
|
$ |
130,941 |
|
|
$ |
116,734 |
|
|
(2%) |
|
|
10% |
|
||
|
Ratio of non-compensation to operating revenue |
17.7% |
|
|
19.4% |
|
|
16.6% |
|
|
|
|
|
|
|
|
|
|||
|
|
|
||||||||||||||||||
|
Earnings: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from operations (e) |
$ |
161,157 |
|
|
$ |
149,563 |
|
|
$ |
167,431 |
|
|
8% |
|
|
(4%) |
|
||
|
Operating margin (f) |
22.3% |
|
|
22.1% |
|
|
23.9% |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income (g) |
$ |
106,472 |
|
|
$ |
96,108 |
|
|
$ |
111,398 |
|
|
11% |
|
|
(4%) |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted adjusted net income per share |
$ |
1.05 |
|
|
$ |
0.92 |
|
|
$ |
0.98 |
|
|
14% |
|
|
7% |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average shares (h) |
|
101,603,367 |
|
|
|
104,767,897 |
|
|
|
113,781,092 |
|
|
(3%) |
|
|
(11%) |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax rate (i) |
25.1% |
|
|
26.4% |
|
|
25.1% |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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. |
|
||||||||||||||||||
11
|
LAZARD LTD |
|
||||||||||
|
SELECTED SUMMARY FINANCIAL INFORMATION (a) |
|
||||||||||
|
(Non-GAAP - unaudited) |
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
|||||||||
|
|
September 30, |
|
|
September 30, |
|
|
|
|
|
||
|
($ in thousands, except per share data) |
2022 |
|
|
2021 |
|
|
% Change |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Advisory |
$ |
1,248,586 |
|
|
$ |
1,169,670 |
|
|
7% |
|
|
|
Asset Management |
|
840,047 |
|
|
|
981,933 |
|
|
(14%) |
|
|
|
Corporate |
|
9,464 |
|
|
|
19,349 |
|
|
(51%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenue (b) |
$ |
2,098,097 |
|
|
$ |
2,170,952 |
|
|
(3%) |
|
|
|
|
|
||||||||||
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted compensation and benefits expense (c) |
$ |
1,238,240 |
|
|
$ |
1,291,717 |
|
|
(4%) |
|
|
|
Ratio of adjusted compensation to operating revenue |
59.0% |
|
|
59.5% |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-compensation expense (d) |
$ |
376,330 |
|
|
$ |
338,044 |
|
|
11% |
|
|
|
Ratio of non-compensation to operating revenue |
17.9% |
|
|
15.6% |
|
|
|
|
|
||
|
|
|
||||||||||
|
Earnings: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from operations (e) |
$ |
483,527 |
|
|
$ |
541,191 |
|
|
(11%) |
|
|
|
Operating margin (f) |
23.1% |
|
|
24.9% |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income (g) |
$ |
317,272 |
|
|
$ |
358,417 |
|
|
(11%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted adjusted net income per share |
$ |
3.02 |
|
|
$ |
3.13 |
|
|
(4%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average shares (h) |
|
105,183,136 |
|
|
|
114,565,986 |
|
|
(8%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax rate (i) |
25.6% |
|
|
26.2% |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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. |
|
||||||||||
12
|
LAZARD LTD |
|
||||||||||||||||||
|
ASSETS UNDER MANAGEMENT ("AUM") |
|
||||||||||||||||||
|
(unaudited) |
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in millions) |
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of |
|
|
Variance |
|
||||||||||||||
|
|
September 30, |
|
|
June 30, |
|
|
December 31, |
|
|
|
|
|
|
|
|
|
|||
|
|
2022 |
|
|
2022 |
|
|
2021 |
|
|
Qtr to Qtr |
|
|
YTD |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Emerging Markets |
$ |
20,378 |
|
|
$ |
22,656 |
|
|
$ |
31,227 |
|
|
(10.1%) |
|
|
(34.7%) |
|
||
|
Global |
|
43,754 |
|
|
|
48,742 |
|
|
|
59,516 |
|
|
(10.2%) |
|
|
(26.5%) |
|
||
|
Local |
|
43,589 |
|
|
|
46,617 |
|
|
|
56,310 |
|
|
(6.5%) |
|
|
(22.6%) |
|
||
|
Multi-Regional |
|
45,988 |
|
|
|
52,259 |
|
|
|
73,953 |
|
|
(12.0%) |
|
|
(37.8%) |
|
||
|
Total Equity |
|
153,709 |
|
|
|
170,274 |
|
|
|
221,006 |
|
|
(9.7%) |
|
|
(30.5%) |
|
||
|
Fixed Income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Emerging Markets |
|
9,288 |
|
|
|
9,948 |
|
|
|
12,231 |
|
|
(6.6%) |
|
|
(24.1%) |
|
||
|
Global |
|
10,252 |
|
|
|
12,380 |
|
|
|
14,410 |
|
|
(17.2%) |
|
|
(28.9%) |
|
||
|
Local |
|
4,986 |
|
|
|
5,302 |
|
|
|
6,022 |
|
|
(6.0%) |
|
|
(17.2%) |
|
||
|
Multi-Regional |
|
13,786 |
|
|
|
12,299 |
|
|
|
13,623 |
|
|
12.1% |
|
|
1.2% |
|
||
|
Total Fixed Income |
|
38,312 |
|
|
|
39,929 |
|
|
|
46,286 |
|
|
(4.0%) |
|
|
(17.2%) |
|
||
|
Alternative Investments |
|
3,900 |
|
|
|
4,145 |
|
|
|
4,203 |
|
|
(5.9%) |
|
|
(7.2%) |
|
||
|
Private Equity |
|
1,042 |
|
|
|
1,268 |
|
|
|
1,290 |
|
|
(17.8%) |
|
|
(19.2%) |
|
||
|
Cash Management |
|
803 |
|
|
|
1,010 |
|
|
|
954 |
|
|
(20.5%) |
|
|
(15.8%) |
|
||
|
Total AUM |
$ |
197,766 |
|
|
$ |
216,626 |
|
|
$ |
273,739 |
|
|
(8.7%) |
|
|
(27.8%) |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
|
|
|
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
2022 |
|
|
2021 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AUM - Beginning of Period |
$ |
216,626 |
|
|
$ |
277,378 |
|
|
|
|
|
|
$ |
273,739 |
|
|
$ |
258,642 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Flows |
|
(2,006 |
) |
|
|
(2,331 |
) |
|
|
|
|
|
|
(13,180 |
) |
|
|
(4,838 |
) |
|
Market and foreign exchange |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
appreciation (depreciation) |
|
(16,854 |
) |
|
|
(2,475 |
) |
|
|
|
|
|
|
(62,793 |
) |
|
|
18,768 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AUM - End of Period |
$ |
197,766 |
|
|
$ |
272,572 |
|
|
|
|
|
|
$ |
197,766 |
|
|
$ |
272,572 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average AUM |
$ |
212,259 |
|
|
$ |
277,941 |
|
|
|
|
|
|
$ |
232,839 |
|
|
$ |
271,761 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% Change in average AUM |
(23.6%) |
|
|
|
|
|
|
|
|
|
|
(14.3%) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Average AUM generally represents the average of the monthly ending AUM balances for the period. |
|
|
|
|
|
||||||||||||||
13
|
LAZARD LTD |
|
||||||||||||||||||
|
RECONCILIATION OF U.S. GAAP TO SELECTED SUMMARY FINANCIAL INFORMATION (a) |
|
||||||||||||||||||
|
(unaudited) |
|
||||||||||||||||||
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||||||
|
|
September 30, |
|
|
June 30, |
|
|
September 30, |
|
|
September 30, |
|
|
September 30, |
|
|||||
|
($ in thousands, except per share data) |
2022 |
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Revenue |
|
||||||||||||||||||
|
Net revenue - U.S. GAAP Basis |
$ |
726,744 |
|
|
$ |
639,546 |
|
|
$ |
717,429 |
|
|
$ |
2,061,182 |
|
|
$ |
2,200,673 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue related to noncontrolling interests (j) |
|
(20,847 |
) |
|
|
(660 |
) |
|
|
(11,994 |
) |
|
|
(32,302 |
) |
|
|
(24,109 |
) |
|
(Gains) losses related to Lazard Fund Interests ("LFI") and other similar arrangements |
|
16,180 |
|
|
|
35,098 |
|
|
|
1,368 |
|
|
|
65,601 |
|
|
|
(22,610 |
) |
|
Distribution fees, reimbursable deal costs, bad debt expense and other (k) |
|
(17,588 |
) |
|
|
(17,083 |
) |
|
|
(23,876 |
) |
|
|
(53,493 |
) |
|
|
(62,211 |
) |
|
Losses associated with restructuring and closing of certain offices (l) |
|
- |
|
|
|
- |
|
|
|
51 |
|
|
|
- |
|
|
|
23,630 |
|
|
Interest expense |
|
19,062 |
|
|
|
19,010 |
|
|
|
18,666 |
|
|
|
57,109 |
|
|
|
55,579 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenue, as adjusted (b) |
$ |
723,551 |
|
|
$ |
675,911 |
|
|
$ |
701,644 |
|
|
$ |
2,098,097 |
|
|
$ |
2,170,952 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and Benefits Expense |
|
||||||||||||||||||
|
Compensation and benefits expense - U.S. GAAP Basis |
$ |
420,937 |
|
|
$ |
363,830 |
|
|
$ |
419,627 |
|
|
$ |
1,181,608 |
|
|
$ |
1,336,091 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Charges) credits pertaining to LFI and other similar arrangements |
|
16,180 |
|
|
|
35,098 |
|
|
|
1,368 |
|
|
|
65,601 |
|
|
|
(22,610 |
) |
|
Expenses associated with restructuring and closing of certain offices (m) |
|
- |
|
|
|
- |
|
|
|
(1,012 |
) |
|
|
- |
|
|
|
(14,922 |
) |
|
Compensation related to noncontrolling interests (j) |
|
(2,986 |
) |
|
|
(3,521 |
) |
|
|
(2,504 |
) |
|
|
(8,969 |
) |
|
|
(6,842 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and benefits expense, as adjusted (c) |
$ |
434,131 |
|
|
$ |
395,407 |
|
|
$ |
417,479 |
|
|
$ |
1,238,240 |
|
|
$ |
1,291,717 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Compensation Expense |
|
||||||||||||||||||
|
Non-compensation expense - Subtotal - U.S. GAAP Basis |
$ |
147,665 |
|
|
$ |
149,878 |
|
|
$ |
142,843 |
|
|
$ |
435,866 |
|
|
$ |
409,072 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses related to office space reorganization (n) |
|
(933 |
) |
|
|
(871 |
) |
|
|
(991 |
) |
|
|
(2,928 |
) |
|
|
(3,644 |
) |
|
Distribution fees, reimbursable deal costs, bad debt expense and other (k) |
|
(17,588 |
) |
|
|
(17,083 |
) |
|
|
(23,876 |
) |
|
|
(53,493 |
) |
|
|
(62,211 |
) |
|
Amortization of intangible assets related to acquisitions |
|
(15 |
) |
|
|
(15 |
) |
|
|
(15 |
) |
|
|
(45 |
) |
|
|
(45 |
) |
|
Expenses associated with restructuring and closing of certain offices (m) |
|
- |
|
|
|
- |
|
|
|
(39 |
) |
|
|
- |
|
|
|
(1,424 |
) |
|
Non-compensation expense related to noncontrolling interests (j) |
|
(866 |
) |
|
|
(968 |
) |
|
|
(1,188 |
) |
|
|
(3,070 |
) |
|
|
(3,704 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-compensation expense, as adjusted (d) |
$ |
128,263 |
|
|
$ |
130,941 |
|
|
$ |
116,734 |
|
|
$ |
376,330 |
|
|
$ |
338,044 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-Tax Income and Earnings From Operations |
|
||||||||||||||||||
|
Operating Income - U.S. GAAP Basis |
$ |
158,142 |
|
|
$ |
125,838 |
|
|
$ |
154,959 |
|
|
$ |
443,708 |
|
|
$ |
455,510 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Losses associated with restructuring and closing of certain offices (l) |
|
- |
|
|
|
- |
|
|
|
51 |
|
|
|
- |
|
|
|
23,630 |
|
|
Expenses related to office space reorganization (n) |
|
933 |
|
|
|
871 |
|
|
|
991 |
|
|
|
2,928 |
|
|
|
3,644 |
|
|
Expenses associated with restructuring and closing of certain offices (m) |
|
- |
|
|
|
- |
|
|
|
1,051 |
|
|
|
- |
|
|
|
16,346 |
|
|
Net (income) loss related to noncontrolling interests (j) |
|
(16,995 |
) |
|
|
3,829 |
|
|
|
(8,304 |
) |
|
|
(20,265 |
) |
|
|
(13,568 |
) |
|
Pre-tax income, as adjusted |
|
142,080 |
|
|
|
130,538 |
|
|
|
148,748 |
|
|
|
426,371 |
|
|
|
485,562 |
|
|
Interest expense |
|
19,062 |
|
|
|
19,010 |
|
|
|
18,666 |
|
|
|
57,109 |
|
|
|
55,579 |
|
|
Amortization of intangible assets related to acquisitions and other |
|
15 |
|
|
|
15 |
|
|
|
17 |
|
|
|
47 |
|
|
|
50 |
|
|
Earnings from operations, as adjusted (e) |
$ |
161,157 |
|
|
$ |
149,563 |
|
|
$ |
167,431 |
|
|
$ |
483,527 |
|
|
$ |
541,191 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income attributable to Lazard Ltd |
|
||||||||||||||||||
|
Net income attributable to Lazard Ltd - U.S. GAAP Basis |
$ |
105,797 |
|
|
$ |
95,480 |
|
|
$ |
107,209 |
|
|
$ |
315,153 |
|
|
$ |
317,687 |
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Losses associated with restructuring and closing of certain offices (l) |
|
- |
|
|
|
- |
|
|
|
51 |
|
|
|
- |
|
|
|
23,630 |
|
|
Expenses related to office space reorganization (n) |
|
933 |
|
|
|
871 |
|
|
|
991 |
|
|
|
2,928 |
|
|
|
3,644 |
|
|
Expenses associated with restructuring and closing of certain offices (m) |
|
- |
|
|
|
- |
|
|
|
1,051 |
|
|
|
- |
|
|
|
16,346 |
|
|
Tax expense (benefit) allocated to adjustments |
|
(258 |
) |
|
|
(243 |
) |
|
|
2,096 |
|
|
|
(809 |
) |
|
|
(2,890 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income, as adjusted (g) |
$ |
106,472 |
|
|
$ |
96,108 |
|
|
$ |
111,398 |
|
|
$ |
317,272 |
|
|
$ |
358,417 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Weighted Average Shares Outstanding |
|
||||||||||||||||||
|
Diluted Weighted Average Shares Outstanding - U.S. GAAP Basis |
|
98,865,156 |
|
|
|
102,753,336 |
|
|
|
112,994,037 |
|
|
|
103,268,378 |
|
|
|
114,139,936 |
|
|
Adjustment: participating securities including profits interest participation rights |
|
2,738,211 |
|
|
|
2,014,561 |
|
|
|
787,055 |
|
|
|
1,914,758 |
|
|
|
426,050 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Weighted Average Shares Outstanding, as adjusted (h) |
|
101,603,367 |
|
|
|
104,767,897 |
|
|
|
113,781,092 |
|
|
|
105,183,136 |
|
|
|
114,565,986 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. GAAP Basis |
$ |
1.06 |
|
|
$ |
0.92 |
|
|
$ |
0.94 |
|
|
$ |
3.03 |
|
|
$ |
2.78 |
|
|
Non-GAAP Basis, as adjusted |
$ |
1.05 |
|
|
$ |
0.92 |
|
|
$ |
0.98 |
|
|
$ |
3.02 |
|
|
$ |
3.13 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
||||||||||||||||||
14
|
LAZARD LTD |
|
||||||||||||||||||
|
RECONCILIATION OF NON-COMPENSATION U.S. GAAP TO ADJUSTED (a) |
|
||||||||||||||||||
|
(unaudited) |
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||||||
|
|
September 30, |
|
|
June 30, |
|
|
September 30, |
|
|
September 30, |
|
|
September 30, |
|
|||||
|
($ in thousands) |
2022 |
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Non-compensation expense - U.S. GAAP Basis: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy and equipment |
$ |
30,696 |
|
|
$ |
29,409 |
|
|
$ |
31,015 |
|
|
$ |
91,344 |
|
|
$ |
95,638 |
|
|
Marketing and business development |
|
19,633 |
|
|
|
22,673 |
|
|
|
9,922 |
|
|
|
56,429 |
|
|
|
25,905 |
|
|
Technology and information services |
|
44,579 |
|
|
|
42,067 |
|
|
|
37,559 |
|
|
|
124,577 |
|
|
|
107,003 |
|
|
Professional services |
|
15,665 |
|
|
|
16,549 |
|
|
|
16,698 |
|
|
|
48,243 |
|
|
|
51,642 |
|
|
Fund administration and outsourced services |
|
27,110 |
|
|
|
28,551 |
|
|
|
34,137 |
|
|
|
85,364 |
|
|
|
94,718 |
|
|
Amortization of intangible assets related to acquisitions |
|
15 |
|
|
|
15 |
|
|
|
15 |
|
|
|
45 |
|
|
|
45 |
|
|
Other |
|
9,967 |
|
|
|
10,614 |
|
|
|
13,497 |
|
|
|
29,864 |
|
|
|
34,121 |
|
|
Non-compensation expense - Subtotal - U.S. GAAP Basis |
$ |
147,665 |
|
|
$ |
149,878 |
|
|
$ |
142,843 |
|
|
$ |
435,866 |
|
|
$ |
409,072 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-compensation expense - Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy and equipment (j) (m) (n) |
$ |
(944 |
) |
|
$ |
(932 |
) |
|
$ |
(1,106 |
) |
|
$ |
(3,059 |
) |
|
$ |
(4,503 |
) |
|
Marketing and business development (j) (k) (m) |
|
(2,516 |
) |
|
|
(2,043 |
) |
|
|
(1,261 |
) |
|
|
(5,784 |
) |
|
|
(2,713 |
) |
|
Technology and information services (j) (k) (m) |
|
(23 |
) |
|
|
(61 |
) |
|
|
(72 |
) |
|
|
(114 |
) |
|
|
(174 |
) |
|
Professional services (j) (k) (m) (n) |
|
(510 |
) |
|
|
(403 |
) |
|
|
(1,143 |
) |
|
|
(1,651 |
) |
|
|
(4,658 |
) |
|
Fund administration and outsourced services (j) (k) |
|
(14,362 |
) |
|
|
(15,680 |
) |
|
|
(19,669 |
) |
|
|
(46,554 |
) |
|
|
(51,765 |
) |
|
Amortization of intangible assets related to acquisitions |
|
(15 |
) |
|
|
(15 |
) |
|
|
(15 |
) |
|
|
(45 |
) |
|
|
(45 |
) |
|
Other (j) (k) (m) (n) |
|
(1,032 |
) |
|
|
197 |
|
|
|
(2,843 |
) |
|
|
(2,329 |
) |
|
|
(7,170 |
) |
|
Subtotal Non-compensation adjustments |
$ |
(19,402 |
) |
|
$ |
(18,937 |
) |
|
$ |
(26,109 |
) |
|
$ |
(59,536 |
) |
|
$ |
(71,028 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-compensation expense, as adjusted: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy and equipment |
$ |
29,752 |
|
|
$ |
28,477 |
|
|
$ |
29,909 |
|
|
$ |
88,285 |
|
|
$ |
91,135 |
|
|
Marketing and business development |
|
17,117 |
|
|
|
20,630 |
|
|
|
8,661 |
|
|
|
50,645 |
|
|
|
23,192 |
|
|
Technology and information services |
|
44,556 |
|
|
|
42,006 |
|
|
|
37,487 |
|
|
|
124,463 |
|
|
|
106,829 |
|
|
Professional services |
|
15,155 |
|
|
|
16,146 |
|
|
|
15,555 |
|
|
|
46,592 |
|
|
|
46,984 |
|
|
Fund administration and outsourced services |
|
12,748 |
|
|
|
12,871 |
|
|
|
14,468 |
|
|
|
38,810 |
|
|
|
42,953 |
|
|
Amortization of intangible assets related to acquisitions |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Other |
|
8,935 |
|
|
|
10,811 |
|
|
|
10,654 |
|
|
|
27,535 |
|
|
|
26,951 |
|
|
Non-compensation expense, as adjusted (d) |
$ |
128,263 |
|
|
$ |
130,941 |
|
|
$ |
116,734 |
|
|
$ |
376,330 |
|
|
$ |
338,044 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
||||||||||||||||||
15
|
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 nine month periods ended September 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 nine month periods ended September 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 nine month periods ended September 30, 2021, 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 nine month periods ended September 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 nine month periods ended September 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 nine month periods ended September 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 nine month periods ended September 30, 2021, expenses associated with restructuring and closing of certain offices (see (m) below), net of tax expense (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 $35,608, $34,430, and $37,350 for the three month periods ended September 30, 2022, June 30, 2022, and September 30, 2021, respectively, $109,099 and $127,145 for the nine month periods ended September 30, 2022 and 2021 and the denominator of which is pre-tax income of $142,080, $130,538, and $148,748 for the three month periods ended September 30, 2022, June 30, 2022, and September 30, 2021, respectively, $426,371 and $485,562 for the nine month periods ended September 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 |
|||||
16