Record operating revenue for the second
quarter and first half of 2021
Record Financial Advisory second quarter
with high levels of activity globally
Record Asset Management quarter with average
AUM at new high of $276 billion
Lazard Ltd (NYSE: LAZ) today reported operating revenue1 of $821
million for the quarter ended June 30, 2021. Net income, as
adjusted2, was $146 million, or $1.28 per share (diluted) for the
quarter. On a U.S. GAAP basis, second-quarter 2021 net income was
$123 million, or $1.08 per share (diluted).
First-half 2021 net income, as adjusted, was $247 million, or
$2.15 per share (diluted). On a U.S. GAAP basis, first-half 2021
net income was $210 million, or $1.83 per share (diluted).
“Lazard had record second-quarter and first-half operating
revenue,” said Kenneth M. Jacobs, Chairman and Chief Executive
Officer of Lazard. “We are benefitting from investments in our
people and technology, our global platform and strong macroeconomic
trends, leading to unprecedented activity levels in our
businesses.”
($ in millions, except per share data and
AUM)
Quarter Ended June 30,
Six Months Ended June
30,
2021
2020
%’21-20
2021
2020
%’21-20
Net
Income
U.S. GAAP
$123
$73
68%
$210
$137
53%
Per share, diluted
$1.08
$0.66
64%
$1.83
$1.22
50%
Adjusted2
$146
$75
94%
$247
$142
74%
Per share, diluted
$1.28
$0.67
91%
$2.15
$1.25
72%
Operating
Revenue1
Total operating revenue
$821
$543
51%
$1,469
$1,106
33%
Financial Advisory
$471
$293
61%
$788
$588
34%
Asset Management
$343
$245
40%
$671
$514
31%
AUM ($ in
billions)
Period End
$277
$215
29%
Average
$276
$208
32%
$269
$215
25%
Note: Endnotes are on page 6 of this release. A reconciliation
of adjusted GAAP to U.S. GAAP is on pages 13-14.
OPERATING REVENUE
Operating revenue1 was $821 million for the second quarter of
2021, and $1,469 million for the first half of 2021, both record
levels, up 51% and 33% respectively from the comparable 2020
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 2021, Financial Advisory operating
revenue was a record $471 million, 61% higher than the second
quarter of 2020.
For the first half of 2021, Financial Advisory operating revenue
was $788 million, 34% higher than the first half of 2020.
During and since the second quarter of 2021, 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 distribution of 60% of Universal Music Group
shares, valued at €19.8 billion and listing of UMG on Euronext
Amsterdam, with a total combined equity value of €33 billion;
Canada Development Investment Corporation in providing CAD 5.9
billion in financial assistance to Air Canada; Macquarie
Infrastructure Corporation’s $4.5 billion sale of Atlantic Aviation
to KKR; Prudential Financial’s $3.6 billion sale of its
full-service retirement business to Empower Retirement; Allstate’s
$2.8 billion sale of Allstate Life Insurance to Blackstone;
Charterhouse Capital Partners in Mirion Technologies’ combination
with GS Acquisition Holdings Corp II, valuing Mirion at $2.6
billion; Danone’s €1.6 billion sale of its stake in Mengniu; The
Special Committee of the Board of Tribune Publishing in its $630
million sale to Alden Global Capital; IBM’s acquisition of
Turbonomic; DTE Energy on the spin-off of its Midstream business;
Accor in the combination with Ennismore; and Pete & Gerry’s
Organics in its sale of a majority stake to Butterfly Equity.
Lazard has one of the world’s preeminent restructuring
practices, with a long track record of successfully advising
businesses and governments. During and since the second quarter of
2021, we have been engaged in a broad range of highly visible and
complex restructuring and debt advisory assignments for debtors or
creditors, including roles involving: Abengoa; AccorInvest; Assured
Guaranty in connection with Puerto Rico’s restructuring; Brazos
Electric Power Cooperative; Cinepolis; Corp Group Banking S.A.;
Diamond Offshore Drilling; Garrett Motion; Groupo GICSA; Intelsat
S.A.; NMC Health; Seadrill Limited; Stoneway Capital; and
Valaris.
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 2021, or continued
to advise or completed since June 30, 2021, 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 2021, Asset Management operating
revenue was a record $343 million, 40% higher than the second
quarter of 2020. For the first half of 2021, Asset Management
operating revenue was a record $671 million, 31% higher than the
first half of 2020.
For the second quarter of 2021, management fees and other
revenue was a record $309 million, 26% higher than the second
quarter of 2020, and 5% higher than the first quarter of 2021. For
the first half of 2021, management fees and other revenue was $604
million, 18% higher than the first half of 2020.
Average assets under management (AUM) for the second quarter of
2021 was a record $276 billion, 32% higher than the second quarter
of 2020, and 6% higher than the first quarter of 2021. Average AUM
for the first half of 2021 was $269 billion, 25% higher than the
first half of 2020.
AUM as of June 30, 2021, was $277 billion, a quarter-end record,
up 29% from June 30, 2020, and up 5% from March 31, 2021. The
sequential increase from March 31, 2021 was primarily driven by
market appreciation of $12 billion and foreign exchange
appreciation of $1.2 billion, partially offset by net outflows of
$0.8 billion.
For the second quarter of 2021, incentive fees were $34 million,
compared to $1 million for the second quarter of 2020. For the
first half of 2021, incentive fees were $67 million, compared to $2
million for the first half of 2020.
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 is an
appropriate measure to assess actual annual compensation cost when
also presented with 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 2021, we accrued compensation and
benefits expense1 at an adjusted compensation1 ratio of 59.5%,
compared to the second-quarter 2020 ratio of 60.0%. This resulted
in $489 million of adjusted compensation and benefits expense,
compared to $326 million for the second quarter of 2020.
For the first half of 2021, adjusted compensation and benefits
expense1 was $874 million, compared to $663 million for the first
half of 2020.
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
2021 was $119 million, 19% higher than the second quarter of 2020.
The increase primarily reflects higher marketing and business
development expenses, including travel and technology investments.
The ratio of adjusted non-compensation expense to operating revenue
for the second quarter of 2021 was 14.5%, compared to 18.3% for the
second quarter of 2020.
Adjusted non-compensation expense1 for the first half of 2021
was $221 million, 4% higher than the first half of 2020. The ratio
of adjusted non-compensation expense to operating revenue for the
first half of 2021 was 15.1%, compared to 19.2% for the first half
of 2020.
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 $49 million
for the second quarter and $90 million for the first half of 2021.
The effective tax rate on the same basis was 25.2% for the second
quarter and 26.7% for the first half of 2021, compared to 23.9% and
26.3% for the respective 2020 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 2021, Lazard returned $161 million to
shareholders, which included: $50 million in dividends; $111
million in share repurchases of our Class A 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 2021, Lazard returned $398 million to
shareholders, which included: $99 million in dividends; $234
million in share repurchases of our Class A common stock; and $66
million in satisfaction of employee tax obligations in lieu of
share issuances upon vesting of equity grants.
During the first half of 2021, we repurchased 5.3 million shares
at an average price of $43.86 per share, which included 2.4 million
shares repurchased in the second quarter at an average price of
$45.72 per share. As of June 30, 2021, our remaining share
repurchase authorization was $366 million.
On July 29, 2021, Lazard declared a quarterly dividend of $0.47
per share on its outstanding common stock. The dividend is payable
on August 20, 2021, to stockholders of record on August 9,
2021.
Lazard’s financial position remains strong. As of June 30, 2021,
our cash and cash equivalents were $980 million, and stockholders’
equity related to Lazard’s interests was $827 million.
***
CONFERENCE CALL
Lazard will host a conference call at 8:00 a.m. EDT on July 30,
2021, to discuss the company’s financial results for the second
quarter and first half of 2021. 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 (888) 204-4368 (U.S. and Canada) or +1 (323)
794-2423 (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 on July 30, 2021, via the Lazard Investor Relations website, or
by dialing 1 (888) 203-1112 (U.S. and Canada) or +1 (719) 457-0820
(outside of the U.S. and Canada). The replay access code is
5906953.
ABOUT LAZARD
Lazard, one of the world's preeminent financial advisory and
asset management firms, operates from 41 cities across 26 countries
in North America, Europe, Asia, Australia, Central and South
America. 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 statements 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 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 a meaningful and useful basis to compare our operating results
across periods.
2 Second-quarter and first-half 2021 adjusted results1 exclude
losses of $23.6 million associated with restructuring and closing
of certain offices; pre-tax charges of $1.2 million and $2.7
million, respectively, relating to office space reorganization; and
$5.7 million and $15.3 million, respectively, relating to expenses
associated with restructuring and closing of certain offices. On a
U.S. GAAP basis, these resulted in a net charge of $22.6 million,
or $0.20 (diluted) per share, for the second quarter, and a net
charge of $36.5 million, or $0.32 (diluted) per share, for the
first half of 2021.
LAZ-EPE
LAZARD LTD UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF
OPERATIONS (U.S. GAAP)
Three Months Ended
% Change From
June 30, March 31, June 30,
March 31,
June 30,
($ in thousands, except per share data)
2021
2021
2020
2021
2020
Total revenue
$843,264
$679,904
$592,264
24%
42%
Interest expense
(20,127)
(19,797)
(19,972)
Net revenue
823,137
660,107
572,292
25%
44%
Operating expenses:
Compensation and benefits
514,918
401,546
351,568
28%
46%
Occupancy and equipment
29,875
34,748
30,574
Marketing and business development
9,332
6,651
6,517
Technology and information services
35,774
33,670
32,629
Professional services
19,996
14,948
16,728
Fund administration and outsourced services
31,302
29,279
24,053
Amortization of intangible assets related to acquisitions
15
15
455
Other
15,664
4,960
13,903
Subtotal
141,958
124,271
124,859
14%
14%
Operating expenses
656,876
525,817
476,427
25%
38%
Operating income
166,261
134,290
95,865
24%
73%
Provision for income taxes
41,345
43,464
22,789
(5%)
81%
Net income
124,916
90,826
73,076
38%
71%
Net income (loss) attributable to noncontrolling interests
1,738
3,526
(382)
Net income attributable to Lazard Ltd
$123,178
$87,300
$73,458
41%
68%
Attributable to Lazard Ltd Common Stockholders:
Weighted average shares outstanding:
Basic
106,746,654
107,291,560
106,662,064
(1%)
0%
Diluted
113,603,478
115,822,294
111,487,749
(2%)
2%
Net income per share:
Basic
$1.14
$0.80
$0.68
43%
68%
Diluted
$1.08
$0.75
$0.66
44%
64%
LAZARD LTD UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF
OPERATIONS (U.S. GAAP) Six Months Ended
June 30, June 30,
($ in thousands, except per share data)
2021
2020
% Change
Total revenue
$1,523,168
$1,150,421
32%
Interest expense
(39,924)
(40,115)
Net revenue
1,483,244
1,110,306
34%
Operating expenses:
Compensation and benefits
916,464
671,323
37%
Occupancy and equipment
64,623
62,772
Marketing and business development
15,983
26,703
Technology and information services
69,444
63,987
Professional services
34,944
31,273
Fund administration and outsourced services
60,581
50,443
Amortization of intangible assets related to acquisitions
30
901
Other
20,624
22,942
Subtotal
266,229
259,021
3%
Operating expenses
1,182,693
930,344
27%
Operating income
300,551
179,962
67%
Provision for income taxes
84,809
48,555
75%
Net income
215,742
131,407
64%
Net income (loss) attributable to noncontrolling interests
5,264
(6,073)
Net income attributable to Lazard Ltd
$210,478
$137,480
53%
Attributable to Lazard Ltd Common Stockholders:
Weighted average shares outstanding:
Basic
107,019,107
106,483,013
1%
Diluted
114,712,885
112,803,964
2%
Net income per share:
Basic
$1.94
$1.27
53%
Diluted
$1.83
$1.22
50%
LAZARD LTD UNAUDITED CONDENSED CONSOLIDATED
STATEMENT OF FINANCIAL CONDITION (U.S. GAAP)
June 30, December 31, ($ in thousands)
2021
2020
ASSETS Cash and
cash equivalents
$979,899
$1,389,876
Deposits with banks and short-term investments
1,111,347
1,134,463
Restricted cash
614,291
44,488
Receivables
818,800
743,141
Investments
867,707
658,532
Goodwill and other intangible assets
380,867
384,071
Operating lease right-of-use assets
479,238
513,923
Deferred tax assets
492,364
538,448
Other assets
662,287
564,919
Total Assets
$6,406,800
$5,971,861
LIABILITIES, REDEEMABLE
NONCONTROLLING INTERESTS & STOCKHOLDERS' EQUITY
Liabilities Deposits and other customer payables
$1,228,248
$1,201,150
Accrued compensation and benefits
644,777
734,544
Operating lease liabilities
567,726
606,963
Tax receivable agreement obligation
211,236
221,451
Senior debt
1,683,984
1,682,741
Other liabilities
563,974
525,579
Total liabilities
4,899,945
4,972,428
Commitments and contingencies Redeemable
noncontrolling interests
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
58,000
135,439
Retained earnings
1,348,121
1,295,386
Accumulated other comprehensive loss, net of tax
(226,648)
(238,368)
Subtotal
1,180,601
1,193,585
Class A common stock held by subsidiaries, at cost
(353,718)
(281,813)
Total Lazard Ltd stockholders' equity
826,883
911,772
Noncontrolling interests
104,972
87,661
Total stockholders' equity
931,855
999,433
Total liabilities, redeemable noncontrolling interests and
stockholders' equity
$6,406,800
$5,971,861
LAZARD LTD SELECTED SUMMARY FINANCIAL INFORMATION (a)
(Non-GAAP - unaudited) Three Months Ended
% Change From
June 30, March 31, June 30,
March 31,
June 30,
($ in thousands, except per share data)
2021
2021
2020
2021
2020
Revenues:
Financial Advisory
$471,075
$317,300
$292,906
48%
61%
Asset Management
343,453
327,914
245,346
5%
40%
Corporate
6,918
2,648
4,662
161%
48%
Operating revenue (b)
$821,446
$647,862
$542,914
27%
51%
Expenses:
Adjusted compensation and benefits expense (c)
$488,760
$385,478
$325,749
27%
50%
Ratio of adjusted compensation to operating revenue
59.5%
59.5%
60.0%
Non-compensation expense (d)
$118,830
$102,480
$99,617
16%
19%
Ratio of non-compensation to operating revenue
14.5%
15.8%
18.3%
Earnings:
Earnings from operations (e)
$213,856
$159,904
$117,548
34%
82%
Operating margin (f)
26.0%
24.7%
21.7%
Adjusted net income (g)
$145,798
$101,221
$75,151
44%
94%
Diluted adjusted net income per share
$1.28
$0.87
$0.67
47%
91%
Diluted weighted average shares (h)
114,058,944
115,857,922
111,845,101
(2%)
2%
Effective tax rate (i)
25.2%
28.6%
23.9%
This presentation includes non-U.S. GAAP ("non-GAAP") measures. Our
non-GAAP measures are not meant to be considered in isolation or as
a substitute for the corresponding U.S. GAAP measures, and should
be read only in conjunction with our consolidated financial
statements prepared in accordance with U.S. GAAP. For a detailed
explanation of the adjustments made to the corresponding U.S. GAAP
measures, see Reconciliation of U.S. GAAP to Selected Summary
Financial Information and Notes to Financial Schedules.
LAZARD
LTD SELECTED SUMMARY FINANCIAL INFORMATION (a)
(Non-GAAP - unaudited) Six Months Ended June 30, June 30,
($ in thousands, except per share data)
2021
2020
% Change
Revenues:
Financial Advisory
$788,375
$587,679
34%
Asset Management
671,367
514,299
31%
Corporate
9,566
3,747
155%
Operating revenue (b)
$1,469,308
$1,105,725
33%
Expenses:
Adjusted compensation and benefits expense (c)
$874,238
$663,435
32%
Ratio of adjusted compensation to operating revenue
59.5%
60.0%
Non-compensation expense (d)
$221,310
$212,249
4%
Ratio of non-compensation to operating revenue
15.1%
19.2%
Earnings:
Earnings from operations (e)
$373,760
$230,041
62%
Operating margin (f)
25.4%
20.8%
Adjusted net income (g)
$247,019
$141,703
74%
Diluted adjusted net income per share
$2.15
$1.25
72%
Diluted weighted average shares (h)
114,958,432
113,002,572
2%
Effective tax rate (i)
26.7%
26.3%
This presentation includes non-GAAP measures. Our non-GAAP measures
are not meant to be considered in isolation or as a substitute for
the corresponding U.S. GAAP measures, and should be read only in
conjunction with our consolidated financial statements prepared in
accordance with U.S. GAAP. For a detailed explanation of the
adjustments made to the corresponding U.S. GAAP measures, see
Reconciliation of U.S. GAAP to Selected Summary Financial
Information and Notes to Financial Schedules.
LAZARD LTD
ASSETS UNDER MANAGEMENT ("AUM") (unaudited) ($ in
millions)
As of
Variance
June 30, March 31, December 31,
2021
2021
2020
Qtr to Qtr
YTD
Equity:
Emerging Markets
$32,363
$32,700
$33,254
(1.0%)
(2.7%)
Global
61,874
58,560
56,246
5.7%
10.0%
Local
53,917
51,246
48,672
5.2%
10.8%
Multi-Regional
76,405
72,953
71,560
4.7%
6.8%
Total Equity
224,559
215,459
209,732
4.2%
7.1%
Fixed Income:
Emerging Markets
13,213
12,708
13,651
4.0%
(3.2%)
Global
14,617
14,177
11,962
3.1%
22.2%
Local
5,788
5,556
5,600
4.2%
3.4%
Multi-Regional
13,532
11,808
12,571
14.6%
7.6%
Total Fixed Income
47,150
44,249
43,784
6.6%
7.7%
Alternative Investments
3,529
3,141
2,748
12.4%
28.4%
Private Equity
1,343
1,324
1,420
1.4%
(5.4%)
Cash Management
797
679
958
17.4%
(16.8%)
Total AUM
$277,378
$264,852
$258,642
4.7%
7.2%
Three Months Ended June 30, Six Months Ended
June 30,
2021
2020
2021
2020
AUM - Beginning of Period
$264,852
$193,048
$258,642
$248,239
Net Flows
(828)
(5,968)
(2,507)
(10,881)
Market and foreign exchange appreciation (depreciation)
13,354
27,624
21,243
(22,654)
AUM - End of Period
$277,378
$214,704
$277,378
$214,704
Average AUM
$275,851
$208,454
$268,657
$215,008
% Change in average AUM
32.3%
25.0%
Note: Average AUM generally represents the average of
the monthly ending AUM balances for the period.
LAZARD LTD
RECONCILIATION OF U.S. GAAP TO SELECTED SUMMARY FINANCIAL
INFORMATION (a) (unaudited) Three Months Ended Six
Months Ended June 30, March 31, June 30, June 30, June 30, ($ in
thousands, except per share data)
2021
2021
2020
2021
2020
Operating Revenue Net revenue - U.S. GAAP Basis
$823,137
$660,107
$572,292
$1,483,244
$1,110,306
Adjustments: (Revenue) loss related to noncontrolling
interests (j)
(5,754)
(6,361)
(2,173)
(12,115)
599
Gains related to Lazard Fund Interests ("LFI") and other similar
arrangements
(16,491)
(7,487)
(23,803)
(23,978)
(4,166)
Distribution fees, reimbursable deal costs, bad debt expense and
other (k)
(21,625)
(16,710)
(21,936)
(38,335)
(38,320)
Losses associated with restructuring and closing of certain offices
(l)
23,579
-
-
23,579
-
Interest expense
18,600
18,313
18,534
36,913
37,306
Operating revenue, as adjusted (b)
$821,446
$647,862
$542,914
$1,469,308
$1,105,725
Compensation and Benefits Expense Compensation and
benefits expense - U.S. GAAP Basis
$514,918
$401,546
$351,568
$916,464
$671,323
Adjustments: Charges pertaining to LFI and other similar
arrangements
(16,491)
(7,487)
(23,803)
(23,978)
(4,166)
Expenses associated with restructuring and closing of certain
offices (m)
(7,287)
(6,623)
-
(13,910)
-
Compensation related to noncontrolling interests (j)
(2,380)
(1,958)
(2,016)
(4,338)
(3,722)
Compensation and benefits expense, as adjusted (c)
$488,760
$385,478
$325,749
$874,238
$663,435
Non-Compensation Expense Non-compensation expense -
Subtotal - U.S. GAAP Basis
$141,958
$124,271
$124,859
$266,229
$259,021
Adjustments: Expenses related to office space reorganization
(n)
(1,237)
(1,416)
(2,487)
(2,653)
(6,151)
Distribution fees, reimbursable deal costs, bad debt expense and
other (k)
(21,625)
(16,710)
(21,936)
(38,335)
(38,320)
Amortization of intangible assets related to acquisitions
(15)
(15)
(455)
(30)
(901)
Income (expenses) associated with restructuring and closing of
certain offices (m)
1,586
(2,971)
-
(1,385)
-
Non-compensation expense related to noncontrolling interests (j)
(1,837)
(679)
(364)
(2,516)
(1,400)
Non-compensation expense, as adjusted (d)
$118,830
$102,480
$99,617
$221,310
$212,249
Pre-Tax Income and Earnings From Operations Operating
Income - U.S. GAAP Basis
$166,261
$134,290
$95,865
$300,551
$179,962
Adjustments: Losses associated with restructuring and
closing of certain offices (l)
23,579
-
-
23,579
-
Expenses related to office space reorganization (n)
1,237
1,416
2,487
2,653
6,151
Expenses associated with restructuring and closing of certain
offices (m)
5,701
9,594
-
15,295
-
Net (income) loss related to noncontrolling interests (j)
(1,738)
(3,526)
382
(5,264)
6,073
Pre-tax income, as adjusted
195,040
141,774
98,734
336,814
192,186
Interest expense
18,600
18,313
18,534
36,913
37,306
Amortization of intangible assets related to acquisitions and other
216
(183)
280
33
549
Earnings from operations, as adjusted (e)
$213,856
$159,904
$117,548
$373,760
$230,041
Net Income attributable to Lazard Ltd Net
income attributable to Lazard Ltd - U.S. GAAP Basis
$123,178
$87,300
$73,458
$210,478
$137,480
Adjustments: Losses associated with restructuring and closing of
certain offices (l)
23,579
-
-
23,579
-
Expenses related to office space reorganization (n)
1,237
1,416
2,487
2,653
6,151
Expenses associated with restructuring and closing of certain
offices (m)
5,701
9,594
-
15,295
-
Tax expense (benefit) allocated to adjustments
(7,897)
2,911
(794)
(4,986)
(1,928)
Net income, as adjusted (g)
$145,798
$101,221
$75,151
$247,019
$141,703
Diluted Weighted Average Shares Outstanding Diluted
Weighted Average Shares Outstanding - U.S. GAAP Basis
113,603,478
115,822,294
111,487,749
114,712,885
112,803,964
Adjustment: participating securities including profits interest
participation rights
455,466
35,628
357,352
245,547
198,609
Diluted Weighted Average Shares Outstanding, as adjusted (h)
114,058,944
115,857,922
111,845,101
114,958,432
113,002,572
Diluted net income per share: U.S. GAAP Basis
$1.08
$0.75
$0.66
$1.83
$1.22
Non-GAAP Basis, as adjusted
$1.28
$0.87
$0.67
$2.15
$1.25
This presentation includes non-GAAP measures. Our
non-GAAP measures are not meant to be considered in isolation or as
a substitute for comparable U.S. GAAP measures, and should be read
only in conjunction with our consolidated financial statements
prepared in accordance with U.S. GAAP. For a detailed explanation
of the adjustments made to comparable U.S. GAAP measures, see Notes
to Financial Schedules.
See Notes to Financial
Schedules LAZARD LTD RECONCILIATION OF
NON-COMPENSATION U.S. GAAP TO ADJUSTED (a) (unaudited)
Three Months Ended Six Months Ended June 30, March 31, June 30,
June 30, June 30, ($ in thousands)
2021
2021
2020
2021
2020
Non-compensation expense - U.S. GAAP Basis: Occupancy and
equipment
$29,875
$34,748
$30,574
$64,623
$62,772
Marketing and business development
9,332
6,651
6,517
15,983
26,703
Technology and information services
35,774
33,670
32,629
69,444
63,987
Professional services
19,996
14,948
16,728
34,944
31,273
Fund administration and outsourced services
31,302
29,279
24,053
60,581
50,443
Amortization of intangible assets related to acquisitions
15
15
455
30
901
Other
15,664
4,960
13,903
20,624
22,942
Non-compensation expense - Subtotal - U.S. GAAP Basis
$141,958
$124,271
$124,859
$266,229
$259,021
Non-compensation expense - Adjustments: Occupancy and
equipment (j) (m) (n)
$788
($4,185)
($2,448)
($3,397)
($6,181)
Marketing and business development (j) (k) (m)
(1,247)
(205)
(755)
(1,452)
(3,446)
Technology and information services (j) (k) (m)
(88)
(14)
(167)
(102)
(602)
Professional services (j) (k) (m) (n)
(2,054)
(1,461)
(1,658)
(3,515)
(3,436)
Fund administration and outsourced services (j) (k)
(16,826)
(15,270)
(10,129)
(32,096)
(22,249)
Amortization of intangible assets related to acquisitions
(15)
(15)
(455)
(30)
(901)
Other (j) (k) (n)
(3,686)
(641)
(9,630)
(4,327)
(9,957)
Subtotal Non-compensation adjustments
($23,128)
($21,791)
($25,242)
($44,919)
($46,772)
Non-compensation expense, as adjusted: Occupancy and
equipment
$30,663
$30,563
$28,126
$61,226
$56,591
Marketing and business development
8,085
6,446
5,762
14,531
23,257
Technology and information services
35,686
33,656
32,462
69,342
63,385
Professional services
17,942
13,487
15,070
31,429
27,837
Fund administration and outsourced services
14,476
14,009
13,924
28,485
28,194
Amortization of intangible assets related to acquisitions
-
-
-
-
-
Other
11,978
4,319
4,273
16,297
12,985
Non-compensation expense, as adjusted (d)
$118,830
$102,480
$99,617
$221,310
$212,249
This presentation includes non-GAAP
measures. Our non-GAAP measures are not meant to be considered in
isolation or as a substitute for comparable 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 comparable 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) loss related to noncontrolling
interests (see (j) below), (ii) gains 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
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 and for the three
month period ended March 31, 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 and for the three month period ended March 31,
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 and for the three month period
ended March 31, 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), and
(iv) interest expense primarily related to corporate financing
activities. (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 and for the three
month period ended March 31, 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 $49,242, $40,553, and $23,583 for the three month
periods ended June 30, 2021, March 31, 2021, and June 30, 2020,
respectively, $89,795 and $50,483 for the six month periods ended
June 30, 2021 and 2020 and the denominator of which is pre-tax
income of $195,040, $141,774 and $98,734 for the three month
periods ended June 30, 2021, March 31, 2021, and June 30, 2020,
respectively, $336,814 and $192,186 for the six month periods ended
June 30, 2021 and 2020. (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 incremental rent expense, building depreciation,
impairment losses, and legal fees related to office space
reorganization.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210730005152/en/
Media: Judi Frost Mackey +1 212 632 1428
judi.mackey@lazard.com
Investors: Alexandra Deignan +1 212 632 6886
alexandra.deignan@lazard.com
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