Financial Advisory record operating revenue year to date, driven by strength in Europe

Asset Management resilient performance amid challenging market and foreign exchange headwinds

Returned $812 million in capital to shareholders, including a record 17 million shares repurchased year to date

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."

($ in millions, except

 

 

Quarter Ended

 

 

Nine Months Ended

per share data and AUM)

 

 

September 30,

 

 

September 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2022

 

2021

 

%'22-'21

 

 

2022

 

2021

 

%'22-'21

Net Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. GAAP

 

 

$106

 

$107

 

(1%)

 

 

$315

 

$318

 

(1%)

Per share, diluted

 

 

$1.06

 

$0.94

 

13%

 

 

$3.03

 

$2.78

 

9%

Adjusted2

 

 

$106

 

$111

 

(4%)

 

 

$317

 

$358

 

(11%)

Per share, diluted

 

 

$1.05

 

$0.98

 

7%

 

 

$3.02

 

$3.13

 

(4%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Revenue1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total operating revenue

 

 

$724

 

$702

 

3%

 

 

$2,098

 

$2,171

 

(3%)

Financial Advisory

 

 

$454

 

$381

 

19%

 

 

$1,249

 

$1,170

 

7%

Asset Management

 

 

$263

 

$311

 

(15%)

 

 

$840

 

$982

 

(14%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AUM ($ in billions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Period end

 

 

$198

 

$273

 

(27%)

 

 

 

 

 

 

 

Average

 

 

$212

 

$278

 

(24%)

 

 

$233

 

$272

 

(14%)

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.

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.

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.

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.

***

CONFERENCE CALL

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).

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 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

 

LAZARD LTD

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

 

(U.S. GAAP)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

$

746,431

 

 

$

660,658

 

 

$

737,807

 

 

13%

 

 

1%

 

Interest expense

 

(19,687

)

 

 

(21,112

)

 

 

(20,378

)

 

 

 

 

 

 

Net revenue

 

726,744

 

 

 

639,546

 

 

 

717,429

 

 

14%

 

 

1%

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

420,937

 

 

 

363,830

 

 

 

419,627

 

 

16%

 

 

0%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Occupancy and equipment

 

30,696

 

 

 

29,409

 

 

 

31,015

 

 

 

 

 

 

 

Marketing and business development

 

19,633

 

 

 

22,673

 

 

 

9,922

 

 

 

 

 

 

 

Technology and information services

 

44,579

 

 

 

42,067

 

 

 

37,559

 

 

 

 

 

 

 

Professional services

 

15,665

 

 

 

16,549

 

 

 

16,698

 

 

 

 

 

 

 

Fund administration and outsourced services

 

27,110

 

 

 

28,551

 

 

 

34,137

 

 

 

 

 

 

 

Amortization of intangible assets related to acquisitions

 

15

 

 

 

15

 

 

 

15

 

 

 

 

 

 

 

Other

 

9,967

 

 

 

10,614

 

 

 

13,497

 

 

 

 

 

 

 

Subtotal

 

147,665

 

 

 

149,878

 

 

 

142,843

 

 

(1%)

 

 

3%

 

Operating expenses

 

568,602

 

 

 

513,708

 

 

 

562,470

 

 

11%

 

 

1%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

158,142

 

 

 

125,838

 

 

 

154,959

 

 

26%

 

 

2%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

35,350

 

 

 

34,187

 

 

 

39,446

 

 

3%

 

 

(10%)

 

Net income

 

122,792

 

 

 

91,651

 

 

 

115,513

 

 

34%

 

 

6%

 

Net income (loss) attributable to noncontrolling interests

 

16,995

 

 

 

(3,829

)

 

 

8,304

 

 

 

 

 

 

 

Net income attributable to Lazard Ltd

$

105,797

 

 

$

95,480

 

 

$

107,209

 

 

11%

 

 

(1%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Attributable to Lazard Ltd Common Stockholders:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

93,275,631

 

 

 

98,660,173

 

 

 

105,415,743

 

 

(5%)

 

 

(12%)

 

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%

 

 

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%

 

 

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

 

 

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.

 

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.

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.

 

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

 

 

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

 

 

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

 

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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