Financial Advisory operating revenue
reflected high levels of activity globally
Asset Management fundamental investment
style well‑positioned in current market environment
Returned $526 million in capital to
shareholders, including the repurchase of 10.6 million shares
year‑to‑date
Lazard Ltd (NYSE: LAZ) today reported operating revenue1 of $676
million for the quarter ended June 30, 2022. Net income, as
adjusted2, was $96 million, or $0.92 per share (diluted) for the
quarter. On a U.S. GAAP basis, second-quarter 2022 net income was
$95 million, or $0.92 per share (diluted).
First-half 2022 net income, as adjusted, was $211 million, or
$1.97 per share (diluted). On a U.S. GAAP basis, first-half 2022
net income was $209 million, or $1.97 per share (diluted).
“Our results demonstrate the resilience, diversification and
discipline of our business model, and we are well-positioned for
the current economic environment,” said Kenneth M. Jacobs, Chairman
and Chief Executive Officer of Lazard. “We continue to invest for
growth while remaining focused on delivering innovative client
solutions, generating significant cash flow and returning capital
to shareholders.”
($ in millions, except
Quarter Ended
Six Months Ended
per share data and AUM)
June 30,
June 30,
2022
2021
%'22-'21
2022
2021
%'22-'21
Net
Income
U.S. GAAP
$95
$123
(22%)
$209
$210
(1%)
Per share, diluted
$0.92
$1.08
(15%)
$1.97
$1.83
8%
Adjusted2
$96
$146
(34%)
$211
$247
(15%)
Per share, diluted
$0.92
$1.28
(28%)
$1.97
$2.15
(8%)
Operating
Revenue1
Total operating revenue
$676
$821
(18%)
$1,375
$1,469
(6%)
Financial Advisory
$407
$471
(14%)
$795
$788
1%
Asset Management
$266
$343
(23%)
$577
$671
(14%)
AUM ($ in
billions)
Period end
$217
$277
(22%)
Average
$230
$276
(17%)
$243
$269
(9%)
Note: Endnotes are on page 7 of this release. A reconciliation
of adjusted GAAP to U.S. GAAP is on pages 14-15.
OPERATING REVENUE
Operating revenue1 was $676 million for the second quarter of
2022, and $1,375 million for the first half of 2022, 18% and 6%
lower, respectively, from the comparable 2021 periods.
Financial Advisory
Our Financial Advisory results include M&A Advisory, Capital
Advisory, Capital Raising, Restructuring, Shareholder Advisory,
Sovereign Advisory, and other strategic advisory work for
clients.
For the second quarter of 2022, Financial Advisory operating
revenue was $407 million, 14% lower than the second quarter of
2021.
For the first half of 2022, Financial Advisory operating revenue
was $795 million, 1% higher than the first half of 2021.
During and since the second quarter of 2022, Lazard has been
engaged in significant and complex M&A transactions and other
advisory assignments globally, including the following (clients are
in italics): Vivendi's €3.6 billion tender offer for Lagardère;
Resource REIT’s $3.7 billion sale to Blackstone Real Estate Income
Trust; Oi's BRL 20.0 billion fiber assets carve-out to a BTG
Pactual-led consortium; Ferro Corporation's $2.1 billion sale to
Prince International; Tivity Health's $2.0 billion acquisition by
Stone Point Capital; Sierra Oncology's $1.9 billion sale to GSK;
Alpargatas’ strategic partnership and investment in Rothy's;
Beeline’s investment from Stone Point Capital; and Q-Energy’s sale
of its GW renewable platform to Verbund AG.
Lazard has one of the world’s preeminent restructuring
practices. During and since the second quarter of 2022, we have
been engaged in a broad range of visible and complex restructuring
and debt advisory assignments for debtors or creditors, including
roles involving: Alto Maipo S.P.A.; Andrade Gutierrez; Brazos
Electric Power Cooperative; Corp Group Banking S.A.; GenapSys;
Grupo GICSA; HEXO; Imagina Media Audiovisual; Nordic Aviation
Capital; Rockall Energy; Stoneway Capital; and Vue
Entertainment.
Our Capital and Shareholder Advisory practices remain active
globally, advising on a broad range of public and private
assignments. Our Sovereign Advisory practice continues to be active
advising governments, sovereign and sub-sovereign entities across
developed and emerging markets.
For a list of publicly announced Financial Advisory transactions
on which Lazard advised in the second quarter of 2022, or continued
to advise or completed since June 30, 2022, please visit our
website at www.lazard.com/businesses/transactions.
Asset Management
In the text portion of this press release, we present our Asset
Management results as 1) Management fees and other revenue, and 2)
Incentive fees.
For the second quarter of 2022, Asset Management operating
revenue was $266 million, 23% lower than the second quarter of
2021. For the first half of 2022, Asset Management operating
revenue was $577 million, 14% lower than the first half of
2021.
For the second quarter of 2022, management fees and other
revenue was $258 million, 16% lower than the second quarter of
2021, and 10% lower than the first quarter of 2022. For the first
half of 2022, management fees and other revenue was $545 million,
10% lower than the first half of 2021.
Average assets under management (AUM) for the second quarter of
2022 was $230 billion, 17% lower than the second quarter of 2021,
and 10% lower than the first quarter of 2022. Average AUM for the
first half of 2022 was $243 billion, 9% lower than the first half
of 2021.
AUM as of June 30, 2022, was $217 billion, down 14% from March
31, 2022, and down 22% from June 30, 2021. The sequential decrease
from March 31, 2022 was driven by market depreciation of $23.2
billion, foreign exchange depreciation of $8.2 billion and net
outflows of $4.6 billion.
For the second quarter of 2022, incentive fees were $7 million,
compared to $34 million for the second quarter of 2021. For the
first half of 2022, incentive fees were $33 million, compared to
$67 million for the first half of 2021.
OPERATING EXPENSES
Compensation and
Benefits
In managing compensation and benefits expense, we focus on
annual awarded compensation (cash compensation and benefits plus
deferred incentive compensation with respect to the applicable
year, net of estimated future forfeitures and excluding charges), a
non-GAAP measure. We believe annual awarded compensation reflects
the actual annual compensation cost more accurately than the GAAP
measure of compensation cost, which includes applicable-year cash
compensation and the amortization of deferred incentive
compensation principally attributable to previous years’ deferred
compensation. We believe that by managing our business using
awarded compensation with a consistent deferral policy, we can
better manage our compensation costs, increase our flexibility in
the future and build shareholder value over time.
For the second quarter of 2022, we accrued compensation and
benefits expense at an adjusted compensation1 ratio of 58.5%,
compared to the second-quarter 2021 ratio of 59.5%. This resulted
in $395 million of compensation and benefits expense, compared to
$489 million for the second quarter of 2021.
For the first half of 2022, adjusted compensation and benefits
expense1 was $804 million, compared to $874 million for the first
half of 2021.
We manage our compensation and benefits expense based on awarded
compensation with a consistent deferral policy. We take a
disciplined approach to compensation, and our goal is to maintain a
compensation-to-operating revenue ratio over the cycle in the mid-
to high-50s percentage range on both an awarded and adjusted basis,
with consistent deferral policies.
Non-Compensation Expense
Adjusted non-compensation expense1 for the second quarter of
2022, was $131 million, 10% higher than the second quarter of 2021.
The increase primarily reflects higher marketing and business
development expenses and technology investments. The ratio of
adjusted non-compensation expense to operating revenue for the
second quarter of 2022 was 19.4%, compared to 14.5% for the second
quarter of 2021.
Adjusted non-compensation expense1 for the first half of 2022
was $248 million, 12% higher than the first half of 2021. The ratio
of adjusted non-compensation expense to operating revenue for the
first half of 2022 was 18.0%, compared to 15.1% for the first half
of 2021.
Our goal remains to achieve an adjusted non-compensation
expense-to-operating revenue ratio over the cycle of 16% to
20%.
TAXES
The provision for taxes, on an adjusted basis1, was $34 million
for the second quarter and $73 million for the first half of 2022.
The effective tax rate on the same basis was 26.4% for the second
quarter and 25.9% for the first half of 2022, compared to 25.2% and
26.7% for the respective 2021 periods.
CAPITAL MANAGEMENT AND BALANCE SHEET
Our primary capital management goals include managing debt and
returning capital to shareholders through dividends and share
repurchases.
In the second quarter of 2022, Lazard returned $246 million to
shareholders, which included: $46 million in dividends; $199
million in share repurchases of our common stock; and $1 million in
satisfaction of employee tax obligations in lieu of share issuances
upon vesting of equity grants.
In the first half of 2022, Lazard returned $526 million to
shareholders, which included: $93 million in dividends; $375
million in share repurchases of our common stock; and $58 million
in satisfaction of employee tax obligations in lieu of share
issuances upon vesting of equity grants.
During the first half of 2022, we repurchased 10.6 million
shares, which included 5.9 million shares repurchased in the second
quarter. On July 27, 2022, our Board of Directors authorized
additional share repurchases of up to $500 million, which expires
as of December 31, 2024, bringing our total outstanding share
repurchase authorization to $559 million.
In addition, on July 27, 2022, our Board of Directors voted to
increase the quarterly dividend on Lazard’s outstanding common
stock by 6% to $0.50 per share. The dividend is payable on August
19, 2022, to stockholders of record on August 8, 2022.
Lazard’s financial position remains strong. As of June 30, 2022,
our cash and cash equivalents were $907 million, and stockholders’
equity related to Lazard’s interests was $716 million.
CONFERENCE CALL
Lazard will host a conference call at 8:00 a.m. EDT on July 28,
2022, to discuss the company’s financial results for the second
quarter and first half of 2022. The conference call can be accessed
via a live audio webcast available through Lazard’s Investor
Relations website at www.lazard.com,
or by dialing 1 800-420-1271 (U.S. and Canada) or +1 785-424-1603
(outside of the U.S. and Canada), 15 minutes prior to the start of
the call.
A replay of the conference call will be available by 10:00 a.m.
EDT, July 28, 2022, via the Lazard Investor Relations website at
www.lazard.com, or by dialing 1 (888) 215-1280 (U.S. and Canada) or
+1 (402) 220-4937 (outside of the U.S. and Canada).
ABOUT LAZARD
Lazard, one of the world's preeminent financial advisory and
asset management firms, operates from 41 cities across 26 countries
in North, Central and South America, Europe, Asia and Australia.
With origins dating to 1848, the firm provides advice on mergers
and acquisitions, strategic matters, restructuring and capital
structure, capital raising and corporate finance, as well as asset
management services to corporations, partnerships, institutions,
governments and individuals. For more information on Lazard, please
visit www.lazard.com. Follow Lazard at @Lazard.
Cautionary Note Regarding Forward-Looking Statements:
This press release contains forward-looking statements. In some
cases, you can identify these statements by forward-looking words
such as “may”, “might”, “will”, “should”, “could”, “would”,
“expect”, “plan”, “anticipate”, “believe”, “estimate”, “predict”,
“potential”, “target,” “goal”, or “continue”, and the negative of
these terms and other comparable terminology. These forward-looking
statements, which are subject to known and unknown risks,
uncertainties and assumptions about us, may include projections of
our future financial performance based on our growth strategies,
business plans and initiatives and anticipated trends in our
business. These forward-looking statements, including with respect
to the current COVID-19 pandemic, are only predictions based on our
current expectations and projections about future events. There are
important factors that could cause our actual results, level of
activity, performance or achievements to differ materially from the
results, level of activity, performance or achievements expressed
or implied by these forward-looking statements.
These factors include, but are not limited to, those discussed
in our Annual Report on Form 10-K under Item 1A “Risk Factors,” and
also discussed from time to time in our reports on Forms 10-Q and
8-K, including the following:
- A decline in general economic conditions or the global or
regional financial markets;
- A decline in our revenues, for example due to a decline in
overall mergers and acquisitions (M&A) activity, our share of
the M&A market or our assets under management (AUM);
- Losses caused by financial or other problems experienced by
third parties;
- Losses due to unidentified or unanticipated risks;
- A lack of liquidity, i.e., ready access to funds, for use in
our businesses; and
- Competitive pressure on our businesses and on our ability to
retain and attract employees at current compensation levels.
Although we believe the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee
future results, level of activity, performance or achievements.
Neither we nor any other person assumes responsibility for the
accuracy or completeness of any of these forward-looking
statements. You should not rely upon forward-looking statements as
predictions of future events. We are under no duty to update any of
these forward-looking statements after the date of this release to
conform our prior statements to actual results or revised
expectations and we do not intend to do so.
Lazard Ltd is committed to providing timely and accurate
information to the investing public, consistent with our legal and
regulatory obligations. To that end, Lazard and its operating
companies use their websites, Lazard’s Twitter account
(twitter.com/Lazard) and other social media sites to convey
information about their businesses, including the anticipated
release of quarterly financial results, quarterly financial,
statistical and business-related information, and the posting of
updates of assets under management in various mutual funds, hedge
funds and other investment products managed by Lazard Asset
Management LLC and Lazard Frères Gestion SAS. Investors can link to
Lazard and its operating company websites through
www.lazard.com.
ENDNOTES
1 A non-U.S. GAAP measure. See attached financial schedules and
related notes for a detailed explanation of adjustments to
corresponding U.S. GAAP results. We believe that presenting our
results on an adjusted basis, in addition to the U.S. GAAP results,
is the most meaningful and useful way to compare our operating
results across periods.
2 Second-quarter and first-half 2022 adjusted results1 exclude
pre-tax charges of $0.9 million and $2.0 million, respectively,
relating to office space reorganization. On a U.S. GAAP basis,
these resulted in a net charge of $0.6 million, or $0.01 (diluted)
per share, for the second quarter, and a net charge of $1.4
million, or $0.01 (diluted) per share, for the first half of
2022.
LAZ-EPE
LAZARD LTD
UNAUDITED CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS
(U.S. GAAP)
Three Months Ended
% Change From
June 30,
March 31,
June 30,
March 31,
June 30,
($ in thousands, except per share
data)
2022
2022
2021
2022
2021
Total revenue
$
660,658
$
716,144
$
843,264
(8%)
(22%)
Interest expense
(21,112
)
(21,252
)
(20,127
)
Net revenue
639,546
694,892
823,137
(8%)
(22%)
Operating expenses:
Compensation and benefits
363,830
396,841
514,918
(8%)
(29%)
Occupancy and equipment
29,409
31,239
29,875
Marketing and business development
22,673
14,123
9,332
Technology and information services
42,067
37,931
35,774
Professional services
16,549
16,029
19,996
Fund administration and outsourced
services
28,551
29,703
31,302
Amortization of intangible assets related
to acquisitions
15
15
15
Other
10,614
9,283
15,664
Subtotal
149,878
138,323
141,958
8%
6%
Operating expenses
513,708
535,164
656,876
(4%)
(22%)
Operating income
125,838
159,728
166,261
(21%)
(24%)
Provision for income taxes
34,187
38,753
41,345
(12%)
(17%)
Net income
91,651
120,975
124,916
(24%)
(27%)
Net income (loss) attributable to
noncontrolling interests
(3,829
)
7,099
1,738
Net income attributable to Lazard Ltd
$
95,480
$
113,876
$
123,178
(16%)
(22%)
Attributable to Lazard Ltd Common
Stockholders:
Weighted average shares
outstanding:
Basic
98,660,173
102,547,277
106,746,654
(4%)
(8%)
Diluted
102,753,336
108,186,642
113,603,478
(5%)
(10%)
Net income per share:
Basic
$
0.96
$
1.09
$
1.14
(12%)
(16%)
Diluted
$
0.92
$
1.05
$
1.08
(12%)
(15%)
LAZARD LTD
UNAUDITED CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS
(U.S. GAAP)
Six Months Ended
June 30,
June 30,
($ in thousands, except per share
data)
2022
2021
% Change
Total revenue
$
1,376,802
$
1,523,168
(10%)
Interest expense
(42,364
)
(39,924
)
Net revenue
1,334,438
1,483,244
(10%)
Operating expenses:
Compensation and benefits
760,671
916,464
(17%)
Occupancy and equipment
60,648
64,623
Marketing and business development
36,796
15,983
Technology and information services
79,998
69,444
Professional services
32,578
34,944
Fund administration and outsourced
services
58,254
60,581
Amortization of intangible assets related
to acquisitions
30
30
Other
19,897
20,624
Subtotal
288,201
266,229
8%
Operating expenses
1,048,872
1,182,693
(11%)
Operating income
285,566
300,551
(5%)
Provision for income taxes
72,940
84,809
(14%)
Net income
212,626
215,742
(1%)
Net income attributable to noncontrolling
interests
3,270
5,264
Net income attributable to Lazard Ltd
$
209,356
$
210,478
(1%)
Attributable to Lazard Ltd Common
Stockholders:
Weighted average shares
outstanding:
Basic
100,603,724
107,019,107
(6%)
Diluted
105,469,988
114,712,885
(8%)
Net income per share:
Basic
$
2.05
$
1.94
6%
Diluted
$
1.97
$
1.83
8%
LAZARD LTD
UNAUDITED CONDENSED
CONSOLIDATED
STATEMENT OF FINANCIAL
CONDITION
(U.S. GAAP)
June 30,
December 31,
($ in thousands)
2022
2021
ASSETS
Cash and cash equivalents
$
907,472
$
1,465,022
Deposits with banks and short-term
investments
1,700,961
1,347,544
Restricted cash
617,057
617,448
Receivables
739,702
805,809
Investments
787,139
1,007,339
Property
231,502
250,005
Goodwill and other intangible assets
378,004
379,571
Operating lease right-of-use assets
435,450
466,054
Deferred tax assets
408,187
435,308
Other assets
506,322
373,081
Total Assets
$
6,711,796
$
7,147,181
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS &
STOCKHOLDERS' EQUITY
Liabilities
Deposits and other customer payables
$
1,831,825
$
1,442,701
Accrued compensation and benefits
494,464
972,303
Operating lease liabilities
520,025
552,522
Tax receivable agreement obligation
192,473
213,434
Senior debt
1,686,471
1,685,227
Other liabilities
583,871
628,030
Total liabilities
5,309,129
5,494,217
Commitments and contingencies
Redeemable noncontrolling interests
575,710
575,000
Stockholders' equity
Preferred stock, par value $.01 per
share
-
-
Common stock, par value $.01 per share
1,128
1,128
Additional paid-in capital
71,918
144,729
Retained earnings
1,628,182
1,560,636
Accumulated other comprehensive loss, net
of tax
(290,029
)
(223,847
)
Subtotal
1,411,199
1,482,646
Class A common stock held by subsidiaries,
at cost
(695,537
)
(507,426
)
Total Lazard Ltd stockholders' equity
715,662
975,220
Noncontrolling interests
111,295
102,744
Total stockholders' equity
826,957
1,077,964
Total liabilities, redeemable
noncontrolling interests and stockholders' equity
$
6,711,796
$
7,147,181
LAZARD LTD
SELECTED SUMMARY FINANCIAL
INFORMATION (a)
(Non-GAAP - unaudited)
Three Months Ended
% Change From
June 30,
March 31,
June 30,
March 31,
June 30,
($ in thousands, except per share
data)
2022
2022
2021
2022
2021
Revenues:
Financial Advisory
$
406,792
$
388,130
$
471,075
5%
(14%)
Asset Management
265,707
311,781
343,453
(15%)
(23%)
Corporate
3,412
(1,276
)
6,918
NM
(51%)
Operating revenue (b)
$
675,911
$
698,635
$
821,446
(3%)
(18%)
Expenses:
Adjusted compensation and benefits
expense (c)
$
395,407
$
408,702
$
488,760
(3%)
(19%)
Ratio of adjusted compensation to
operating revenue
58.5%
58.5%
59.5%
Non-compensation expense (d)
$
130,941
$
117,126
$
118,830
12%
10%
Ratio of non-compensation to operating
revenue
19.4%
16.8%
14.5%
Earnings:
Earnings from operations (e)
$
149,563
$
172,807
$
213,856
(13%)
(30%)
Operating margin (f)
22.1%
24.7%
26.0%
Adjusted net income (g)
$
96,108
$
114,692
$
145,798
(16%)
(34%)
Diluted adjusted net income per
share
$
0.92
$
1.05
$
1.28
(12%)
(28%)
Diluted weighted average shares (h)
104,767,897
109,178,143
114,058,944
(4%)
(8%)
Effective tax rate (i)
26.4%
25.4%
25.2%
This presentation includes non-U.S. GAAP
("non-GAAP") measures. Our non-GAAP measures are not meant to be
considered in isolation or as a substitute for the corresponding
U.S. GAAP measures, and should be read only in conjunction with our
consolidated financial statements prepared in accordance with U.S.
GAAP. For a detailed explanation of the adjustments made to the
corresponding U.S. GAAP measures, see Reconciliation of U.S. GAAP
to Selected Summary Financial Information and Notes to Financial
Schedules.
LAZARD LTD
SELECTED SUMMARY FINANCIAL
INFORMATION (a)
(Non-GAAP - unaudited)
Six Months Ended
June 30,
June 30,
($ in thousands, except per share
data)
2022
2021
% Change
Revenues:
Financial Advisory
$
794,922
$
788,375
1%
Asset Management
577,488
671,367
(14%)
Corporate
2,136
9,566
(78%)
Operating revenue (b)
$
1,374,546
$
1,469,308
(6%)
Expenses:
Adjusted compensation and benefits
expense (c)
$
804,109
$
874,238
(8%)
Ratio of adjusted compensation to
operating revenue
58.5%
59.5%
Non-compensation expense (d)
$
248,067
$
221,310
12%
Ratio of non-compensation to operating
revenue
18.0%
15.1%
Earnings:
Earnings from operations (e)
$
322,370
$
373,760
(14%)
Operating margin (f)
23.5%
25.4%
Adjusted net income (g)
$
210,800
$
247,019
(15%)
Diluted adjusted net income per
share
$
1.97
$
2.15
(8%)
Diluted weighted average shares (h)
106,973,019
114,958,432
(7%)
Effective tax rate (i)
25.9%
26.7%
This presentation includes non-GAAP
measures. Our non-GAAP measures are not meant to be considered in
isolation or as a substitute for the corresponding U.S. GAAP
measures, and should be read only in conjunction with our
consolidated financial statements prepared in accordance with U.S.
GAAP. For a detailed explanation of the adjustments made to the
corresponding U.S. GAAP measures, see Reconciliation of U.S. GAAP
to Selected Summary Financial Information and Notes to Financial
Schedules.
LAZARD LTD
ASSETS UNDER MANAGEMENT
("AUM")
(unaudited)
($ in millions)
As of
Variance
June 30,
March 31,
December 31,
2022
2022
2021
Qtr to Qtr
YTD
Equity:
Emerging Markets
$
22,656
$
26,575
$
31,227
(14.7%)
(27.4%)
Global
48,742
55,810
59,516
(12.7%)
(18.1%)
Local
46,617
53,832
56,310
(13.4%)
(17.2%)
Multi-Regional
52,259
64,810
73,953
(19.4%)
(29.3%)
Total Equity
170,274
201,027
221,006
(15.3%)
(23.0%)
Fixed Income:
Emerging Markets
9,948
11,997
12,231
(17.1%)
(18.7%)
Global
12,380
13,881
14,410
(10.8%)
(14.1%)
Local
5,302
5,652
6,022
(6.2%)
(12.0%)
Multi-Regional
12,299
13,454
13,623
(8.6%)
(9.7%)
Total Fixed Income
39,929
44,984
46,286
(11.2%)
(13.7%)
Alternative Investments
4,145
4,483
4,203
(7.5%)
(1.4%)
Private Equity
1,268
1,256
1,290
0.9%
(1.7%)
Cash Management
1,010
925
954
9.2%
5.9%
Total AUM
$
216,626
$
252,675
$
273,739
(14.3%)
(20.9%)
Three Months Ended June 30,
Six Months Ended June 30,
2022
2021
2022
2021
AUM - Beginning of Period
$
252,675
$
264,852
$
273,739
$
258,642
Net Flows
(4,649
)
(828
)
(11,174
)
(2,507
)
Market and foreign exchange
appreciation (depreciation)
(31,400
)
13,354
(45,939
)
21,243
AUM - End of Period
$
216,626
$
277,378
$
216,626
$
277,378
Average AUM
$
230,162
$
275,851
$
243,263
$
268,657
% Change in average AUM
(16.6%)
(9.5%)
Note: Average AUM generally represents the
average of the monthly ending AUM balances for the period.
LAZARD LTD
RECONCILIATION OF U.S. GAAP TO
SELECTED SUMMARY FINANCIAL INFORMATION (a)
(unaudited)
Three Months Ended
Six Months Ended
June 30,
March 31,
June 30,
June 30,
June 30,
($ in thousands, except per share
data)
2022
2022
2021
2022
2021
Operating Revenue
Net revenue - U.S. GAAP Basis
$
639,546
$
694,892
$
823,137
$
1,334,438
$
1,483,244
Adjustments:
Revenue related to noncontrolling
interests (j)
(660
)
(10,795
)
(5,754
)
(11,455
)
(12,115
)
(Gains) losses related to Lazard Fund
Interests ("LFI") and other similar arrangements
35,098
14,323
(16,491
)
49,421
(23,978
)
Distribution fees, reimbursable deal
costs, bad debt expense and other (k)
(17,083
)
(18,822
)
(21,625
)
(35,905
)
(38,335
)
Losses associated with restructuring and
closing of certain offices (l)
-
-
23,579
-
23,579
Interest expense
19,010
19,037
18,600
38,047
36,913
Operating revenue, as adjusted (b)
$
675,911
$
698,635
$
821,446
$
1,374,546
$
1,469,308
Compensation and Benefits
Expense
Compensation and benefits expense - U.S.
GAAP Basis
$
363,830
$
396,841
$
514,918
$
760,671
$
916,464
Adjustments:
(Charges) credits pertaining to LFI and
other similar arrangements
35,098
14,323
(16,491
)
49,421
(23,978
)
Expenses associated with restructuring and
closing of certain offices (m)
-
-
(7,287
)
-
(13,910
)
Compensation related to noncontrolling
interests (j)
(3,521
)
(2,462
)
(2,380
)
(5,983
)
(4,338
)
Compensation and benefits expense, as
adjusted (c)
$
395,407
$
408,702
$
488,760
$
804,109
$
874,238
Non-Compensation
Expense
Non-compensation expense - Subtotal - U.S.
GAAP Basis
$
149,878
$
138,323
$
141,958
$
288,201
$
266,229
Adjustments:
Expenses related to office space
reorganization (n)
(871
)
(1,124
)
(1,237
)
(1,995
)
(2,653
)
Distribution fees, reimbursable deal
costs, bad debt expense and other (k)
(17,083
)
(18,822
)
(21,625
)
(35,905
)
(38,335
)
Amortization of intangible assets related
to acquisitions
(15
)
(15
)
(15
)
(30
)
(30
)
Income (expenses) associated with
restructuring and closing of certain offices (m)
-
-
1,586
-
(1,385
)
Non-compensation expense related to
noncontrolling interests (j)
(968
)
(1,236
)
(1,837
)
(2,204
)
(2,516
)
Non-compensation expense, as adjusted
(d)
$
130,941
$
117,126
$
118,830
$
248,067
$
221,310
Pre-Tax Income and Earnings
From Operations
Operating Income - U.S. GAAP Basis
$
125,838
$
159,728
$
166,261
$
285,566
$
300,551
Adjustments:
Losses associated with restructuring and
closing of certain offices (l)
-
-
23,579
-
23,579
Expenses related to office space
reorganization (n)
871
1,124
1,237
1,995
2,653
Expenses associated with restructuring and
closing of certain offices (m)
-
-
5,701
-
15,295
Net income (loss) related to
noncontrolling interests (j)
3,829
(7,099
)
(1,738
)
(3,270
)
(5,264
)
Pre-tax income, as adjusted
130,538
153,753
195,040
284,291
336,814
Interest expense
19,010
19,037
18,600
38,047
36,913
Amortization of intangible assets related
to acquisitions and other
15
17
216
32
33
Earnings from operations, as adjusted
(e)
$
149,563
$
172,807
$
213,856
$
322,370
$
373,760
Net Income attributable to
Lazard Ltd
Net income attributable to Lazard Ltd -
U.S. GAAP Basis
$
95,480
$
113,876
$
123,178
$
209,356
$
210,478
Adjustments:
Losses associated with restructuring and
closing of certain offices (l)
-
-
23,579
-
23,579
Expenses related to office space
reorganization (n)
871
1,124
1,237
1,995
2,653
Expenses associated with restructuring and
closing of certain offices (m)
-
-
5,701
-
15,295
Tax benefit allocated to adjustments
(243
)
(308
)
(7,897
)
(551
)
(4,986
)
Net income, as adjusted (g)
$
96,108
$
114,692
$
145,798
$
210,800
$
247,019
Diluted Weighted Average
Shares Outstanding
Diluted Weighted Average Shares
Outstanding - U.S. GAAP Basis
102,753,336
108,186,642
113,603,478
105,469,988
114,712,885
Adjustment: participating securities
including profits interest participation rights
2,014,561
991,501
455,466
1,503,031
245,547
Diluted Weighted Average Shares
Outstanding, as adjusted (h)
104,767,897
109,178,143
114,058,944
106,973,019
114,958,432
Diluted net income per share:
U.S. GAAP Basis
$
0.92
$
1.05
$
1.08
$
1.97
$
1.83
Non-GAAP Basis, as adjusted
$
0.92
$
1.05
$
1.28
$
1.97
$
2.15
This presentation includes non-GAAP
measures. Our non-GAAP measures are not meant to be considered in
isolation or as a substitute for the corresponding U.S. GAAP
measures, and should be read only in conjunction with our
consolidated financial statements prepared in accordance with U.S.
GAAP. For a detailed explanation of the adjustments made to the
corresponding U.S. GAAP measures, see Notes to Financial
Schedules.
See Notes to Financial
Schedules
LAZARD LTD
RECONCILIATION OF
NON-COMPENSATION U.S. GAAP TO ADJUSTED (a)
(unaudited)
Three Months Ended
Six Months Ended
June 30,
March 31,
June 30,
June 30,
June 30,
($ in thousands)
2022
2022
2021
2022
2021
Non-compensation expense - U.S. GAAP
Basis:
Occupancy and equipment
$
29,409
$
31,239
$
29,875
$
60,648
$
64,623
Marketing and business development
22,673
14,123
9,332
36,796
15,983
Technology and information services
42,067
37,931
35,774
79,998
69,444
Professional services
16,549
16,029
19,996
32,578
34,944
Fund administration and outsourced
services
28,551
29,703
31,302
58,254
60,581
Amortization of intangible assets related
to acquisitions
15
15
15
30
30
Other
10,614
9,283
15,664
19,897
20,624
Non-compensation expense - Subtotal - U.S.
GAAP Basis
$
149,878
$
138,323
$
141,958
$
288,201
$
266,229
Non-compensation expense -
Adjustments:
Occupancy and equipment (j) (m) (n)
$
(932
)
$
(1,183
)
$
788
$
(2,115
)
$
(3,397
)
Marketing and business development (j) (k)
(m)
(2,043
)
(1,225
)
(1,247
)
(3,268
)
(1,452
)
Technology and information services (j)
(k) (m)
(61
)
(30
)
(88
)
(91
)
(102
)
Professional services (j) (k) (m) (n)
(403
)
(738
)
(2,054
)
(1,141
)
(3,515
)
Fund administration and outsourced
services (j) (k)
(15,680
)
(16,512
)
(16,826
)
(32,192
)
(32,096
)
Amortization of intangible assets related
to acquisitions
(15
)
(15
)
(15
)
(30
)
(30
)
Other (j) (k) (n)
197
(1,494
)
(3,686
)
(1,297
)
(4,327
)
Subtotal Non-compensation adjustments
$
(18,937
)
$
(21,197
)
$
(23,128
)
$
(40,134
)
$
(44,919
)
Non-compensation expense, as adjusted:
Occupancy and equipment
$
28,477
$
30,056
$
30,663
$
58,533
$
61,226
Marketing and business development
20,630
12,898
8,085
33,528
14,531
Technology and information services
42,006
37,901
35,686
79,907
69,342
Professional services
16,146
15,291
17,942
31,437
31,429
Fund administration and outsourced
services
12,871
13,191
14,476
26,062
28,485
Amortization of intangible assets related
to acquisitions
-
-
-
-
-
Other
10,811
7,789
11,978
18,600
16,297
Non-compensation expense, as adjusted
(d)
$
130,941
$
117,126
$
118,830
$
248,067
$
221,310
This presentation includes non-GAAP
measures. Our non-GAAP measures are not meant to be considered in
isolation or as a substitute for the corresponding U.S. GAAP
measures, and should be read only in conjunction with our
consolidated financial statements prepared in accordance with U.S.
GAAP. For a detailed explanation of the adjustments made to the
corresponding U.S. GAAP measures, see Notes to Financial
Schedules.
See Notes to Financial
Schedules
LAZARD LTD
Notes to Financial
Schedules
(a)
Selected Summary Financial Information are
non-GAAP measures. Lazard believes that presenting results and
measures on an adjusted basis in conjunction with U.S. GAAP
measures provides a meaningful and useful basis for comparison of
its operating results across periods.
(b)
A non-GAAP measure which excludes (i)
revenue related to noncontrolling interests (see (j) below), (ii)
(gains) losses related to the changes in the fair value of
investments held in connection with Lazard Fund Interests and other
similar deferred compensation arrangements for which a
corresponding equal amount is excluded from compensation &
benefits expense, (iii) revenue related to distribution fees,
reimbursable deal costs in accordance with the revenue recognition
guidance, bad debt expense, and other (see (k) below), (iv) for the
three and six month periods ended June 30, 2021, losses associated
with restructuring and closing of certain offices (see (l) below),
and (v) interest expense primarily related to corporate financing
activities.
(c)
A non-GAAP measure which excludes (i)
(charges) credits related to the changes in the fair value of the
compensation liability recorded in connection with Lazard Fund
Interests and other similar deferred compensation arrangements,
(ii) for the three and six month periods ended June 30, 2021,
expenses associated with restructuring and closing of certain
offices (see (m) below), and (iii) compensation and benefits
related to noncontrolling interests (see (j) below).
(d)
A non-GAAP measure which excludes (i)
expenses related to office space reorganization (see (n) below),
(ii) expenses related to distribution fees, reimbursable deal costs
in accordance with the revenue recognition guidance, bad debt
expense, and other (see (k) below), (iii) amortization of
intangible assets related to acquisitions, (iv) for the three and
six month periods ended June 30, 2021, income (expenses) associated
with restructuring and closing of certain offices (see (m) below),
and (v) expenses related to noncontrolling interests (see (j)
below).
(e)
A non-GAAP measure which excludes (i) for
the three and six month periods ended June 30, 2021, losses
associated with restructuring and closing of certain offices (see
(l) below), (ii) expenses related to office space reorganization
(see (n) below), (iii) for the three and six month periods ended
June 30, 2021, expenses associated with restructuring and closing
of certain offices (see (m) below), (iv) net revenue and expenses
related to noncontrolling interests (see (j) below), (v) interest
expense primarily related to corporate financing activities, and
(vi) amortization of intangible assets related to acquisitions.
(f)
Represents earnings from operations as a
percentage of operating revenue, and is a non-GAAP measure.
(g)
A non-GAAP measure which excludes (i) for
the three and six month periods ended June 30, 2021, losses
associated with restructuring and closing of certain offices (see
(l) below), (ii) expenses related to office space reorganization
(see (n) below), and (iii) for the three and six month periods
ended June 30, 2021, expenses associated with restructuring and
closing of certain offices (see (m) below), net of tax
benefits.
(h)
A non-GAAP measure which includes units of
the long-term incentive compensation program consisting of profits
interest participation rights, which are equity incentive awards
that, subject to certain conditions, may be exchanged for shares of
our common stock. Certain profits interest participation rights and
other participating securities may be excluded from the computation
of outstanding stock equivalents for U.S. GAAP net income per
share.
(i)
Effective tax rate is a non-GAAP measure
based upon the U.S. GAAP rate with adjustments for the tax
applicable to the non-GAAP adjustments to operating income,
generally based upon the effective marginal tax rate in the
applicable jurisdiction of the adjustments. The computation is
based on a quotient, the numerator of which is the provision for
income taxes of $34,430, $39,061, and $49,242 for the three month
periods ended June 30, 2022, March 31, 2022, and June 30, 2021,
respectively, $73,491 and $89,795 for the six month periods ended
June 30, 2022 and 2021 and the denominator of which is pre-tax
income of $130,538, $153,753, and $195,040 for the three month
periods ended June 30, 2022, March 31, 2022, and June 30, 2021,
respectively, $284,291 and $336,814 for the six month periods ended
June 30, 2022 and 2021.
(j)
Noncontrolling interests include revenue
and expenses principally related to Edgewater, ESC Funds and a
Special Purpose Acquisition Company.
(k)
Represents certain distribution,
introducer and management fees paid to third parties and
reimbursable deal costs for which an equal amount is excluded from
both non-GAAP operating revenue and non-compensation expense,
respectively, and excludes bad debt expense, which represents fees
that are deemed uncollectible.
(l)
Represents losses related to the
reclassification of currency translation adjustments to earnings
from accumulated other comprehensive loss associated with
restructuring and closing of certain of our offices.
(m)
Expenses associated with restructuring and
closing of certain offices.
(n)
Represents building depreciation and other
costs related to office space reorganization.
NM
Not meaningful
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220728005296/en/
Media Contact: Judi Frost Mackey +1 212 632 1428
judi.mackey@lazard.com Investor Contact: Alexandra Deignan +1 212
632 6886 alexandra.deignan@lazard.com
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