Lazard Ltd Reports Full-Year and Fourth-Quarter 2022 Results

NEW YORK--()--Lazard Ltd (NYSE: LAZ)

Financial Advisory annual
operating revenue of
$1.7 billion is second
highest in firm’s history

Asset Management annual
operating revenue of
$1.1 billion and year-end
assets under management
of $216 billion

Returned $936 million
in capital to shareholders,
including repurchasing
20 million shares in 2022

Lazard Ltd (NYSE: LAZ) today reported annual operating revenue1 of $2,769 million for the year ended December 31, 2022. Net income, as adjusted2, was $384 million, or $3.73 per share (diluted) for the year. On a U.S. GAAP basis, net income for the year was $358 million, or $3.51 per share (diluted).

For the fourth quarter of 2022, net income, as adjusted, was $67 million, or $0.69 per share (diluted). On a U.S. GAAP basis, net income for the fourth quarter was $42 million, or $0.44 per share (diluted).

“Lazard's businesses proved resilient amid the challenging macroeconomic and capital markets environment in 2022," said Kenneth M. Jacobs, Chairman and Chief Executive Officer of Lazard. "We continued to make strategic investments, which strengthen and broaden our capabilities, and we are well-positioned to serve clients as they navigate 2023."

($ in millions, except

Year Ended

 

 

Quarter Ended

 

per share data and AUM)

December 31,

 

 

December 31,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2022

 

2021

 

%'22-'21

 

 

2022

 

2021

 

%'22-'21

 

Net Income

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. GAAP

$358

 

$528

 

(32%)

 

 

$42

 

$210

 

(80%)

 

Per share, diluted

$3.51

 

$4.63

 

(24%)

 

 

$0.44

 

$1.86

 

(76%)

 

Adjusted2

$384

 

$576

 

(33%)

 

 

$67

 

$217

 

(69%)

 

Per share, diluted

$3.73

 

$5.04

 

(26%)

 

 

$0.69

 

$1.92

 

(64%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Revenue1

 

 

 

 

 

 

 

 

 

 

 

 

 

Total operating revenue

$2,769

 

$3,139

 

(12%)

 

 

$671

 

$968

 

(31%)

 

Financial Advisory

$1,652

 

$1,778

 

(7%)

 

 

$404

 

$608

 

(34%)

 

Asset Management

$1,099

 

$1,329

 

(17%)

 

 

$259

 

$347

 

(25%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AUM ($ in billions)

 

 

 

 

 

 

 

 

 

 

 

 

 

Period end

$216

 

$274

 

(21%)

 

 

 

 

 

 

 

 

Average

$227

 

$272

 

(16%)

 

 

$211

 

$274

 

(23%)

 

Note: Endnotes are on page 7 of this release. A reconciliation of adjusted GAAP to U.S. GAAP is on pages 15-16.

OPERATING REVENUE

Operating revenue1 was $2,769 million for 2022, 12% lower than 2021. Fourth-quarter 2022 operating revenue was $671 million, 31% lower than the fourth quarter of 2021.

Financial Advisory

Our Financial Advisory results include Strategic and M&A Advisory, Capital Markets Advisory, Shareholder Advisory, Restructuring and Capital Solutions, Sovereign Advisory, Geopolitical Advisory, Capital Raising and Placement, and other strategic advisory for clients.

For the full year of 2022, Financial Advisory operating revenue was $1,652 million, 7% lower than 2021.

For the fourth quarter of 2022, Financial Advisory operating revenue was $404 million, 34% lower than the fourth quarter of 2021.

During and since the fourth quarter of 2022, Lazard has been engaged in significant and complex M&A transactions and other strategic advisory assignments globally, including the following completed transactions (clients are in italics): Terminix's $7.5 billion sale to Rentokil Initial; Tenneco's $7.1 billion sale to funds of Apollo; WestRock’s $1.7 billion acquisition of remaining interests in Grupo Gondi; Bain Capital's acquisition of a 55% stake in House of HR; BC Partners’ acquisition of Havea; Celerion’s acquisition by H.I.G. Capital; OCS Group’s sale of its facilities services division to CD&R; Encap Investments on its sale of Jupiter Power to BlackRock; and Green Street’s sale of a majority interest in the company to TA Associates. Announced transactions include: Xylem’s $7.5 billion acquisition of Evoqua; InfraVia Capital's investment in Virgin Media O2’s fiber network along with joint venture partners Liberty Global and Telefonica, for a total investment of approximately $5.5 billion; Southwest Gas Holdings on its decision to spin-off Centuri; Southwest Gas Holdings on its announced sale of MountainWest Pipelines to Williams; and CAES Space Systems’ sale to Veritas Capital.

Lazard has one of the world’s preeminent restructuring and capital solutions practices. During and since the fourth quarter of 2022, we have been engaged in a broad range of visible and complex restructuring and debt advisory assignments, including debtor roles involving Bed Bath & Beyond, GenapSys, Trevi Finanziaria Industriale, and Vue Entertainment, and creditor and/or related party roles involving Andrade Gutierrez, Brazos Electric Power Cooperative, Endo Pharmaceuticals, Ruby Pipeline and Party City.

Our Capital Markets 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 fourth quarter of 2022, or continued to advise or completed since December 31, 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 full year of 2022, Asset Management operating revenue was $1,099 million, 17% lower than 2021. For the fourth quarter of 2022, Asset Management operating revenue was $259 million, 25% lower than the fourth quarter of 2021.

Management fees and other revenue was $1,031 million for full-year 2022, 15% lower than 2021. For the fourth quarter of 2022, management fees and other revenue was $245 million, 18% lower than the fourth quarter of 2021, and 2% higher than the third quarter of 2022.

For the full year of 2022, incentive fees were $67 million, compared to $120 million for 2021. For the fourth quarter of 2022, incentive fees were $13 million, compared to $46 million for the fourth quarter of 2021.

Average assets under management (AUM) for full-year 2022 was $227 billion, 16% lower than 2021. Average AUM for the fourth quarter of 2022 was $211 billion, 23% lower than the fourth quarter of 2021, and essentially flat compared to the third quarter of 2022.

AUM as of December 31, 2022 was $216 billion, down 21% from December 31, 2021, and 9% higher than September 30, 2022. The sequential change from September 30, 2022 was driven by market appreciation of $14.4 billion, foreign exchange appreciation of $7.7 billion and net outflows of $3.7 billion.

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 while targeting a consistent deferral policy, we can better manage our compensation costs, increase our flexibility in the future and build shareholder value over time.

Adjusted compensation and benefits expense1 for 2022 was $1,657 million, 10% lower than 2021. The corresponding adjusted compensation ratio1 was 59.8% for 2022, compared to 58.5% for 2021.

Awarded compensation expense1 for 2022 was $1,768 million, 4% lower than 2021. The corresponding awarded compensation ratio1 was 63.8% for 2022, compared to 58.8% for 2021.

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, while targeting a consistent deferral policy.

Non-Compensation Expense

Adjusted non-compensation expense1 for 2022 was $518 million, 10% higher than 2021. The ratio of non-compensation expense to operating revenue was 18.7% for 2022, compared to 15.0% for 2021.

Adjusted non-compensation expense for the fourth quarter of 2022, was $142 million, 6% higher than the fourth quarter of 2021. The ratio of adjusted non-compensation expense to operating revenue was 21.1% for the fourth quarter of 2022, compared to 13.8% for the fourth quarter 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 $133 million for full-year 2022 and $24 million for the fourth quarter of 2022. The effective tax rate on the same basis was 25.7% for full-year 2022, compared to 23.9% for full-year 2021.

CAPITAL MANAGEMENT AND BALANCE SHEET

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

In 2022, Lazard returned $936 million to shareholders, which included: $182 million in dividends; $692 million in share repurchases of our common stock; and $62 million in satisfaction of employee tax obligations in lieu of share issuances upon vesting of equity grants.

During 2022, we repurchased a record 19.7 million shares. As of December 31, 2022, our remaining share repurchase authorization was $302 million.

On February 1, 2023, Lazard declared a quarterly dividend of $0.50 per share on its outstanding common stock. The dividend is payable on February 24, 2023, to stockholders of record on February 13, 2023.

Lazard’s financial position remains strong. As of December 31, 2022, our cash and cash equivalents were $1.2 billion. Stockholders’ equity related to Lazard’s interests was $556 million.

CONFERENCE CALL

Lazard will host a conference call at 8:00 a.m. ET on February 2, 2023, to discuss the company’s financial results for the full year and fourth quarter 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 1 800-245-3047 (toll-free, U.S. and Canada) or +1 203-518-9765 (outside of the U.S. and Canada), 15 minutes prior to the start of the call. Conference ID: LAZQ422.

A replay of the conference call will be available by 10:00 a.m. ET, February 2, 2023, via the Lazard Investor Relations website at www.lazard.com, or by dialing 1 800-839-5637 (toll-free, U.S. and Canada) or +1 402-220-2562 (outside of the U.S. and Canada).

ABOUT LAZARD

Lazard, one of the world's preeminent financial advisory and asset management firms, operates from 43 cities across 26 countries in North and South America, Europe, Asia and Australia. Celebrating its 175th year, the firm provides advice on mergers and acquisitions, capital markets and other strategic matters, restructuring and capital solutions, and 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 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 Fourth-quarter and full-year 2022 adjusted results1 exclude pre-tax charges of $0.8 million and $3.8 million, respectively, relating to office space reorganization, $33.0 million in the fourth quarter and full year relating to expenses associated with senior management transition, and $1.2 million in the fourth quarter and full year relating to the reduction of our Tax Receivable Agreement (TRA) obligation. On a U.S. GAAP basis, these resulted in a net charge of $24.8 million, or $0.26 (diluted) per share, for the fourth quarter, and a net charge of $26.9 million, or $0.27 (diluted) per share, for the full year of 2022.

LAZ-EPE

LAZARD LTD

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

 

(U.S. GAAP)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

% Change From

 

 

December 31,

 

 

September 30,

 

 

December 31,

 

 

September 30,

 

 

December 31,

 

($ in thousands, except per share data)

2022

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

$

731,860

 

 

$

746,431

 

 

$

1,012,841

 

 

(2%)

 

 

(28%)

 

Interest expense

 

(19,471

)

 

 

(19,687

)

 

 

(20,466

)

 

 

 

 

 

 

Net revenue

 

712,389

 

 

 

726,744

 

 

 

992,375

 

 

(2%)

 

 

(28%)

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

474,843

 

 

 

420,937

 

 

 

559,768

 

 

13%

 

 

(15%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Occupancy and equipment

 

30,907

 

 

 

30,696

 

 

 

32,402

 

 

 

 

 

 

 

Marketing and business development

 

26,674

 

 

 

19,633

 

 

 

16,850

 

 

 

 

 

 

 

Technology and information services

 

47,125

 

 

 

44,579

 

 

 

39,762

 

 

 

 

 

 

 

Professional services

 

21,292

 

 

 

15,665

 

 

 

26,060

 

 

 

 

 

 

 

Fund administration and outsourced services

 

24,614

 

 

 

27,110

 

 

 

35,784

 

 

 

 

 

 

 

Amortization of intangible assets related to acquisitions

 

15

 

 

 

15

 

 

 

15

 

 

 

 

 

 

 

Other

 

14,988

 

 

 

9,967

 

 

 

11,197

 

 

 

 

 

 

 

Subtotal

 

165,615

 

 

 

147,665

 

 

 

162,070

 

 

12%

 

 

2%

 

Provision (benefit) pursuant to tax receivable agreement

 

(1,209

)

 

 

-

 

 

 

2,199

 

 

 

 

 

 

 

Operating expenses

 

639,249

 

 

 

568,602

 

 

 

724,037

 

 

12%

 

 

(12%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

73,140

 

 

 

158,142

 

 

 

268,338

 

 

(54%)

 

 

(73%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

16,075

 

 

 

35,350

 

 

 

57,048

 

 

(55%)

 

 

(72%)

 

Net income

 

57,065

 

 

 

122,792

 

 

 

211,290

 

 

(54%)

 

 

(73%)

 

Net income (loss) attributable to noncontrolling interests

 

14,701

 

 

 

16,995

 

 

 

913

 

 

 

 

 

 

 

Net income attributable to Lazard Ltd

$

42,364

 

 

$

105,797

 

 

$

210,377

 

 

(60%)

 

 

(80%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Attributable to Lazard Ltd Common Stockholders:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

88,173,431

 

 

 

93,275,631

 

 

 

104,689,273

 

 

(5%)

 

 

(16%)

 

Diluted

 

94,185,566

 

 

 

98,865,156

 

 

 

112,278,982

 

 

(5%)

 

 

(16%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

0.47

 

 

$

1.11

 

 

$

1.97

 

 

(58%)

 

 

(76%)

 

Diluted

$

0.44

 

 

$

1.06

 

 

$

1.86

 

 

(58%)

 

 

(76%)

 

 
 

LAZARD LTD

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

 

(U.S. GAAP)

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended

 

 

December 31,

 

 

December 31,

 

 

 

 

($ in thousands, except per share data)

2022

 

 

2021

 

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

$

2,855,093

 

 

$

3,273,816

 

 

(13%)

 

Interest expense

 

(81,522

)

 

 

(80,768

)

 

 

 

Net revenue

 

2,773,571

 

 

 

3,193,048

 

 

(13%)

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

1,656,451

 

 

 

1,895,859

 

 

(13%)

 

 

 

 

 

 

 

 

 

 

 

 

Occupancy and equipment

 

122,251

 

 

 

128,040

 

 

 

 

Marketing and business development

 

83,103

 

 

 

42,755

 

 

 

 

Technology and information services

 

171,702

 

 

 

146,765

 

 

 

 

Professional services

 

69,535

 

 

 

77,702

 

 

 

 

Fund administration and outsourced services

 

109,978

 

 

 

130,502

 

 

 

 

Amortization of intangible assets related to acquisitions

 

60

 

 

 

60

 

 

 

 

Other

 

44,852

 

 

 

45,318

 

 

 

 

Subtotal

 

601,481

 

 

 

571,142

 

 

5%

 

Provision (benefit) pursuant to tax receivable agreement

 

(1,209

)

 

 

2,199

 

 

 

 

Operating expenses

 

2,256,723

 

 

 

2,469,200

 

 

(9%)

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

516,848

 

 

 

723,848

 

 

(29%)

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

124,365

 

 

 

181,303

 

 

(31%)

 

Net income

 

392,483

 

 

 

542,545

 

 

(28%)

 

Net income attributable to noncontrolling interests

 

34,966

 

 

 

14,481

 

 

 

 

Net income attributable to Lazard Ltd

$

357,517

 

 

$

528,064

 

 

(32%)

 

 

 

 

 

 

 

 

 

 

 

 

Attributable to Lazard Ltd Common Stockholders:

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

Basic

 

95,664,129

 

 

 

106,035,808

 

 

(10%)

 

Diluted

 

100,997,674

 

 

 

113,674,699

 

 

(11%)

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

 

 

 

Basic

$

3.68

 

 

$

4.90

 

 

(25%)

 

Diluted

$

3.51

 

 

$

4.63

 

 

(24%)

 

 

LAZARD LTD

UNAUDITED CONDENSED CONSOLIDATED

STATEMENT OF FINANCIAL CONDITION

(U.S. GAAP)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

December 31,

 

 

 

($ in thousands)

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

1,234,773

 

 

$

1,465,022

 

 

 

Deposits with banks and short-term investments

 

779,246

 

 

 

1,347,544

 

 

 

Restricted cash

 

625,381

 

 

 

617,448

 

 

 

Receivables

 

652,758

 

 

 

805,809

 

 

 

Investments

 

698,977

 

 

 

1,007,339

 

 

 

Property

 

250,073

 

 

 

250,005

 

 

 

Goodwill and other intangible assets

 

377,330

 

 

 

379,571

 

 

 

Operating lease right-of-use assets

 

431,608

 

 

 

466,054

 

 

 

Deferred tax assets

 

407,657

 

 

 

435,308

 

 

 

Other assets

 

394,758

 

 

 

373,081

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Assets

$

5,852,561

 

 

$

7,147,181

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS & STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

Deposits and other customer payables

$

921,834

 

 

$

1,442,701

 

 

 

Accrued compensation and benefits

 

735,576

 

 

 

972,303

 

 

 

Operating lease liabilities

 

513,688

 

 

 

552,522

 

 

 

Tax receivable agreement obligation

 

191,189

 

 

 

213,434

 

 

 

Senior debt

 

1,687,714

 

 

 

1,685,227

 

 

 

Other liabilities

 

543,690

 

 

 

628,030

 

 

 

Total liabilities

 

4,593,691

 

 

 

5,494,217

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

Redeemable noncontrolling interests

 

583,471

 

 

 

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

 

167,890

 

 

 

144,729

 

 

 

Retained earnings

 

1,676,713

 

 

 

1,560,636

 

 

 

Accumulated other comprehensive loss, net of tax

 

(295,854

)

 

 

(223,847

)

 

 

Subtotal

 

1,549,877

 

 

 

1,482,646

 

 

 

Class A common stock held by subsidiaries, at cost

 

(993,414

)

 

 

(507,426

)

 

 

Total Lazard Ltd stockholders' equity

 

556,463

 

 

 

975,220

 

 

 

Noncontrolling interests

 

118,936

 

 

 

102,744

 

 

 

Total stockholders' equity

 

675,399

 

 

 

1,077,964

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities, redeemable noncontrolling interests and stockholders' equity

$

5,852,561

 

 

$

7,147,181

 

 

 

 
 

LAZARD LTD

 

SELECTED SUMMARY FINANCIAL INFORMATION (a)

 

(Non-GAAP - unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

% Change From

 

 

December 31,

 

 

September 30,

 

 

December 31,

 

 

September 30,

 

 

December 31,

 

($ in thousands, except per share data)

2022

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial Advisory

$

403,836

 

 

$

453,664

 

 

$

608,178

 

 

(11%)

 

 

(34%)

 

Asset Management

 

258,618

 

 

 

262,559

 

 

 

346,607

 

 

(2%)

 

 

(25%)

 

Corporate

 

8,507

 

 

 

7,328

 

 

 

13,160

 

 

16%

 

 

(35%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating revenue (b)

$

670,961

 

 

$

723,551

 

 

$

967,945

 

 

(7%)

 

 

(31%)

 

 

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted compensation and benefits expense (c)

$

418,598

 

 

$

434,131

 

 

$

544,510

 

 

(4%)

 

 

(23%)

 

Ratio of adjusted compensation to operating revenue

62.4%

 

 

60.0%

 

 

56.3%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-compensation expense (d)

$

141,843

 

 

$

128,263

 

 

$

133,903

 

 

11%

 

 

6%

 

Ratio of non-compensation to operating revenue

21.1%

 

 

17.7%

 

 

13.8%

 

 

 

 

 

 

 

 

 

 

 

Earnings:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings from operations (e)

$

110,520

 

 

$

161,157

 

 

$

289,532

 

 

(31%)

 

 

(62%)

 

Operating margin (f)

16.5%

 

 

22.3%

 

 

29.9%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income (g)

$

67,130

 

 

$

106,472

 

 

$

217,209

 

 

(37%)

 

 

(69%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted adjusted net income per share

$

0.69

 

 

$

1.05

 

 

$

1.92

 

 

(34%)

 

 

(64%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted weighted average shares (h)

 

97,222,787

 

 

 

101,603,367

 

 

 

113,294,302

 

 

(4%)

 

 

(14%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Effective tax rate (i)

26.3%

 

 

25.1%

 

 

19.8%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended

 

 

December 31,

 

 

December 31,

 

 

 

 

 

($ in thousands, except per share data)

2022

 

 

2021

 

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial Advisory

$

1,652,422

 

 

$

1,777,848

 

 

(7%)

 

Asset Management

 

1,098,665

 

 

 

1,328,540

 

 

(17%)

 

Corporate

 

17,971

 

 

 

32,509

 

 

(45%)

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating revenue (b)

$

2,769,058

 

 

$

3,138,897

 

 

(12%)

 

 

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted compensation and benefits expense (c)

$

1,656,838

 

 

$

1,836,227

 

 

(10%)

 

Ratio of adjusted compensation to operating revenue

59.8%

 

 

58.5%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-compensation expense (d)

$

518,173

 

 

$

471,947

 

 

10%

 

Ratio of non-compensation to operating revenue

18.7%

 

 

15.0%

 

 

 

 

 

 

 

Earnings:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings from operations (e)

$

594,047

 

 

$

830,723

 

 

(28%)

 

Operating margin (f)

21.5%

 

 

26.5%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income (g)

$

384,402

 

 

$

575,626

 

 

(33%)

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted adjusted net income per share

$

3.73

 

 

$

5.04

 

 

(26%)

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted weighted average shares (h)

 

103,193,048

 

 

 

114,248,065

 

 

(10%)

 

 

 

 

 

 

 

 

 

 

 

 

 

Effective tax rate (i)

25.7%

 

 

23.9%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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
COMPENSATION AND BENEFITS – ANALYSIS
(unaudited)
($ in millions except share price)

 

 

 

 

 

 

 

 

2016

 

2017

 

2018

 

2019

 

2020

 

2021

 

2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ADJUSTED U.S. GAAP BASIS (c)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Base salary

 

$372.7

 

$404.9

 

$431.9

 

$446.9

 

$455.0

 

$487.1

 

$535.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Benefits and other

 

201.9

 

243.4

 

263.6

 

258.3

 

227.7

 

286.5

 

293.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash incentive compensation

 

398.3

 

465.5

 

445.5

 

390.8

 

435.3

 

662.4

 

457.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total cash compensation, benefits and other

 

972.9

 

1,113.8

 

1,141.0

 

1,096.0

 

1,118.0

 

1,436.0

 

1,285.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of deferred incentive awards

 

352.4

 

367.3

 

375.6

 

367.9

 

384.1

 

400.2

 

371.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits - Adjusted U.S. GAAP basis (j)

 

$1,325.3

 

$1,481.1

 

$1,516.6

 

$1,463.9

 

$1,502.1

 

$1,836.2

 

$1,656.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

% of Operating Revenue

 

56.5%

 

55.8%

 

55.1%

 

57.5%

 

59.5%

 

58.5%

 

59.8%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AWARDED BASIS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total cash compensation and benefits (per above)

 

$972.9

 

$1,113.8

 

$1,141.0

 

$1,096.0

 

$1,118.0

 

$1,436.0

 

$1,285.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deferred year-end incentive awards

 

342.4

 

351.0

 

377.8

 

361.3

 

364.4

 

389.7

 

436.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits before sign-on and other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

special deferred incentive awards

 

1,315.3

 

1,464.8

 

1,518.8

 

1,457.3

 

1,482.4

 

1,825.7

 

1,722.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sign-on and other special deferred incentive awards (k)

 

29.9

 

36.2

 

45.7

 

37.6

 

54.9

 

48.5

 

79.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Compensation and benefits - Notional

 

1,345.2

 

1,501.0

 

1,564.5

 

1,494.9

 

1,537.3

 

1,874.2

 

1,801.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustment for actual/estimated forfeitures (l)

 

(27.9)

 

(25.3)

 

(27.5)

 

(25.9)

 

(27.3)

 

(28.5)

 

(33.5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits - Awarded (m)

 

$1,317.3

 

$1,475.7

 

$1,537.0

 

$1,469.0

 

$1,510.0

 

$1,845.7

 

$1,767.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

% of Operating Revenue - Awarded Basis (m)

 

56.2%

 

55.6%

 

55.8%

 

57.7%

 

59.8%

 

58.8%

 

63.8%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Memo:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total value of deferred equity-based year end

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

incentive awards

 

$234.8

 

$216.4

 

$253.8

 

$165.5

 

$172.4

 

$198.1

 

TBD

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity-based year end awards - share equivalents ('000)

 

5,395

 

3,850

 

6,735

 

3,858

 

3,988

 

6,012

 

TBD

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Price at issuance

 

$43.43

 

$56.22

 

$37.69

 

$42.89

 

$43.23

 

$32.95

 

TBD

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deferred compensation awards ratio (n)

 

26.0%

 

24.0%

 

24.9%

 

24.8%

 

24.6%

 

21.3%

 

25.3%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating revenue

 

$2,344.3

 

$2,654.5

 

$2,754.8

 

$2,546.0

 

$2,523.5

 

$3,138.9

 

$2,769.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

December 31,

 

 

September 30,

 

 

December 31,

 

 

 

 

 

 

 

 

 

 

2022

 

 

2022

 

 

2021

 

 

Qtr to Qtr

 

 

YTD

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Emerging Markets

$

21,557

 

 

$

20,378

 

 

$

31,227

 

 

5.8%

 

 

(31.0%)

 

Global

 

46,861

 

 

 

43,754

 

 

 

59,516

 

 

7.1%

 

 

(21.3%)

 

Local

 

47,504

 

 

 

43,589

 

 

 

56,310

 

 

9.0%

 

 

(15.6%)

 

Multi-Regional

 

51,473

 

 

 

45,988

 

 

 

73,953

 

 

11.9%

 

 

(30.4%)

 

Total Equity

 

167,395

 

 

 

153,709

 

 

 

221,006

 

 

8.9%

 

 

(24.3%)

 

Fixed Income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Emerging Markets

 

8,944

 

 

 

9,288

 

 

 

12,231

 

 

(3.7%)

 

 

(26.9%)

 

Global

 

11,029

 

 

 

10,252

 

 

 

14,410

 

 

7.6%

 

 

(23.5%)

 

Local

 

5,352

 

 

 

4,986

 

 

 

6,022

 

 

7.3%

 

 

(11.1%)

 

Multi-Regional

 

18,061

 

 

 

13,786

 

 

 

13,623

 

 

31.0%

 

 

32.6%

 

Total Fixed Income

 

43,386

 

 

 

38,312

 

 

 

46,286

 

 

13.2%

 

 

(6.3%)

 

Alternative Investments

 

3,812

 

 

 

3,900

 

 

 

4,203

 

 

(2.3%)

 

 

(9.3%)

 

Private Equity

 

1,038

 

 

 

1,042

 

 

 

1,290

 

 

(0.4%)

 

 

(19.5%)

 

Cash Management

 

494

 

 

 

803

 

 

 

954

 

 

(38.5%)

 

 

(48.2%)

 

Total AUM

$

216,125

 

 

$

197,766

 

 

$

273,739

 

 

9.3%

 

 

(21.0%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended December 31,

 

 

 

 

 

 

Year Ended December 31,

 

 

2022

 

 

2021

 

 

 

 

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AUM - Beginning of Period

$

197,766

 

 

$

272,572

 

 

 

 

 

 

$

273,739

 

 

$

258,642

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Flows

 

(3,735

)

 

 

(6,735

)

 

 

 

 

 

 

(16,915

)

 

 

(11,573

)

Market and foreign exchange

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

appreciation (depreciation)

 

22,094

 

 

 

7,902

 

 

 

 

 

 

 

(40,699

)

 

 

26,670

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AUM - End of Period

$

216,125

 

 

$

273,739

 

 

 

 

 

 

$

216,125

 

 

$

273,739

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average AUM

$

211,243

 

 

$

273,514

 

 

 

 

 

 

$

227,444

 

 

$

272,051

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

% Change in average AUM

(22.8%)

 

 

 

 

 

 

 

 

 

 

(16.4%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

Year Ended

 

 

December 31,

 

 

September 30,

 

 

December 31,

 

 

December 31,

 

 

December 31,

 

($ in thousands, except per share data)

2022

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Revenue

 

Net revenue - U.S. GAAP Basis

$

712,389

 

 

$

726,744

 

 

$

992,375

 

 

$

2,773,571

 

 

$

3,193,048

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue related to noncontrolling interests (o)

 

(16,771

)

 

 

(20,847

)

 

 

(7,515

)

 

 

(49,073

)

 

 

(31,624

)

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

 

(21,340

)

 

 

16,180

 

 

 

(12,884

)

 

 

44,261

 

 

 

(35,494

)

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

 

(22,736

)

 

 

(17,588

)

 

 

(22,842

)

 

 

(76,229

)

 

 

(85,053

)

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

 

-

 

 

 

-

 

 

 

15

 

 

 

-

 

 

 

23,645

 

Interest expense

 

19,419

 

 

 

19,062

 

 

 

18,796

 

 

 

76,528

 

 

 

74,375

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating revenue, as adjusted (b)

$

670,961

 

 

$

723,551

 

 

$

967,945

 

 

$

2,769,058

 

 

$

3,138,897

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and Benefits Expense

 

Compensation and benefits expense - U.S. GAAP Basis

$

474,843

 

 

$

420,937

 

 

$

559,768

 

 

$

1,656,451

 

 

$

1,895,859

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Charges) credits pertaining to LFI and other similar arrangements

 

(21,340

)

 

 

16,180

 

 

 

(12,884

)

 

 

44,261

 

 

 

(35,494

)

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

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(14,922

)

Expenses associated with senior management transition (s)

 

(33,019

)

 

 

-

 

 

 

-

 

 

 

(33,019

)

 

 

-

 

Compensation related to noncontrolling interests (o)

 

(1,886

)

 

 

(2,986

)

 

 

(2,374

)

 

 

(10,855

)

 

 

(9,216

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits expense, as adjusted (c)

$

418,598

 

 

$

434,131

 

 

$

544,510

 

 

$

1,656,838

 

 

$

1,836,227

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-Compensation Expense

 

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

$

165,615

 

 

$

147,665

 

 

$

162,070

 

 

$

601,481

 

 

$

571,142

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses related to office space reorganization (t)

 

(836

)

 

 

(933

)

 

 

(967

)

 

 

(3,764

)

 

 

(4,611

)

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

 

(22,736

)

 

 

(17,588

)

 

 

(22,842

)

 

 

(76,229

)

 

 

(85,053

)

Amortization of intangible assets related to acquisitions

 

(15

)

 

 

(15

)

 

 

(15

)

 

 

(60

)

 

 

(60

)

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

 

-

 

 

 

-

 

 

 

(115

)

 

 

-

 

 

 

(1,539

)

Non-compensation expense related to noncontrolling interests (o)

 

(185

)

 

 

(866

)

 

 

(4,228

)

 

 

(3,255

)

 

 

(7,932

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-compensation expense, as adjusted (d)

$

141,843

 

 

$

128,263

 

 

$

133,903

 

 

$

518,173

 

 

$

471,947

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-Tax Income and Earnings From Operations

 

Operating Income - U.S. GAAP Basis

$

73,140

 

 

$

158,142

 

 

$

268,338

 

 

$

516,848

 

 

$

723,848

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision (benefit) pursuant to tax receivable agreement obligation

 

(1,209

)

 

 

-

 

 

 

2,199

 

 

 

(1,209

)

 

 

2,199

 

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

 

-

 

 

 

-

 

 

 

15

 

 

 

-

 

 

 

23,645

 

Expenses related to office space reorganization (t)

 

836

 

 

 

933

 

 

 

967

 

 

 

3,764

 

 

 

4,611

 

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

 

-

 

 

 

-

 

 

 

115

 

 

 

-

 

 

 

16,461

 

Expenses associated with senior management transition (s)

 

33,019

 

 

 

-

 

 

 

-

 

 

 

33,019

 

 

 

-

 

Net income related to noncontrolling interests (o)

 

(14,701

)

 

 

(16,995

)

 

 

(913

)

 

 

(34,966

)

 

 

(14,481

)

Pre-tax income, as adjusted

 

91,085

 

 

 

142,080

 

 

 

270,721

 

 

 

517,456

 

 

 

756,283

 

Interest expense

 

19,419

 

 

 

19,062

 

 

 

18,796

 

 

 

76,528

 

 

 

74,375

 

Amortization of intangible assets related to acquisitions and other

 

16

 

 

 

15

 

 

 

15

 

 

 

63

 

 

 

65

 

Earnings from operations, as adjusted (e)

$

110,520

 

 

$

161,157

 

 

$

289,532

 

 

$

594,047

 

 

$

830,723

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income attributable to Lazard Ltd

 

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

$

42,364

 

 

$

105,797

 

 

$

210,377

 

 

$

357,517

 

 

$

528,064

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision (benefit) pursuant to tax receivable agreement obligation

 

(1,209

)

 

 

-

 

 

 

2,199

 

 

 

(1,209

)

 

 

2,199

 

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

 

-

 

 

 

-

 

 

 

15

 

 

 

-

 

 

 

23,645

 

Expenses related to office space reorganization (t)

 

836

 

 

 

933

 

 

 

967

 

 

 

3,764

 

 

 

4,611

 

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

 

-

 

 

 

-

 

 

 

115

 

 

 

-

 

 

 

16,461

 

Expenses associated with senior management transition (s)

 

33,019

 

 

 

-

 

 

 

-

 

 

 

33,019

 

 

 

-

 

Tax expense (benefit) allocated to adjustments

 

(7,880

)

 

 

(258

)

 

 

3,536

 

 

 

(8,689

)

 

 

646

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income, as adjusted (g)

$

67,130

 

 

$

106,472

 

 

$

217,209

 

 

$

384,402

 

 

$

575,626

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Weighted Average Shares Outstanding

 

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

 

94,185,566

 

 

 

98,865,156

 

 

 

112,278,982

 

 

 

100,997,674

 

 

 

113,674,699

 

Adjustment: participating securities including profits interest participation rights

 

3,037,221

 

 

 

2,738,211

 

 

 

1,015,320

 

 

 

2,195,374

 

 

 

573,366

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Weighted Average Shares Outstanding, as adjusted (h)

 

97,222,787

 

 

 

101,603,367

 

 

 

113,294,302

 

 

 

103,193,048

 

 

 

114,248,065

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. GAAP Basis

$

0.44

 

 

$

1.06

 

 

$

1.86

 

 

$

3.51

 

 

$

4.63

 

Non-GAAP Basis, as adjusted

$

0.69

 

 

$

1.05

 

 

$

1.92

 

 

$

3.73

 

 

$

5.04

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

Year Ended

 

 

December 31,

 

 

September 30,

 

 

December 31,

 

 

December 31,

 

 

December 31,

 

($ in thousands)

2022

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Occupancy and equipment

$

30,907

 

 

$

30,696

 

 

$

32,402

 

 

$

122,251

 

 

$

128,040

 

Marketing and business development

 

26,674

 

 

 

19,633

 

 

 

16,850

 

 

 

83,103

 

 

 

42,755

 

Technology and information services

 

47,125

 

 

 

44,579

 

 

 

39,762

 

 

 

171,702

 

 

 

146,765

 

Professional services

 

21,292

 

 

 

15,665

 

 

 

26,060

 

 

 

69,535

 

 

 

77,702

 

Fund administration and outsourced services

 

24,614

 

 

 

27,110

 

 

 

35,784

 

 

 

109,978

 

 

 

130,502

 

Amortization of intangible assets related to acquisitions

 

15

 

 

 

15

 

 

 

15

 

 

 

60

 

 

 

60

 

Other

 

14,988

 

 

 

9,967

 

 

 

11,197

 

 

 

44,852

 

 

 

45,318

 

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

$

165,615

 

 

$

147,665

 

 

$

162,070

 

 

$

601,481

 

 

$

571,142

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-compensation expense - Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Occupancy and equipment (o) (r) (t)

$

(828

)

 

$

(944

)

 

$

(892

)

 

$

(3,887

)

 

$

(5,395

)

Marketing and business development (o) (p) (r)

 

(3,656

)

 

 

(2,516

)

 

 

(1,425

)

 

 

(9,440

)

 

 

(4,138

)

Technology and information services (o) (p) (r)

 

(45

)

 

 

(23

)

 

 

4

 

 

 

(159

)

 

 

(170

)

Professional services (o) (p) (r) (t)

 

(618

)

 

 

(510

)

 

 

(3,888

)

 

 

(2,269

)

 

 

(8,546

)

Fund administration and outsourced services (o) (p)

 

(14,092

)

 

 

(14,362

)

 

 

(21,661

)

 

 

(60,646

)

 

 

(73,426

)

Amortization of intangible assets related to acquisitions

 

(15

)

 

 

(15

)

 

 

(15

)

 

 

(60

)

 

 

(60

)

Other (o) (p) (r) (t)

 

(4,518

)

 

 

(1,032

)

 

 

(290

)

 

 

(6,847

)

 

 

(7,460

)

Subtotal Non-compensation adjustments

$

(23,772

)

 

$

(19,402

)

 

$

(28,167

)

 

$

(83,308

)

 

$

(99,195

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-compensation expense, as adjusted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Occupancy and equipment

$

30,079

 

 

$

29,752

 

 

$

31,510

 

 

$

118,364

 

 

$

122,645

 

Marketing and business development

 

23,018

 

 

 

17,117

 

 

 

15,425

 

 

 

73,663

 

 

 

38,617

 

Technology and information services

 

47,080

 

 

 

44,556

 

 

 

39,766

 

 

 

171,543

 

 

 

146,595

 

Professional services

 

20,674

 

 

 

15,155

 

 

 

22,172

 

 

 

67,266

 

 

 

69,156

 

Fund administration and outsourced services

 

10,522

 

 

 

12,748

 

 

 

14,123

 

 

 

49,332

 

 

 

57,076

 

Amortization of intangible assets related to acquisitions

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Other

 

10,470

 

 

 

8,935

 

 

 

10,907

 

 

 

38,005

 

 

 

37,858

 

Non-compensation expense, as adjusted (d)

$

141,843

 

 

$

128,263

 

 

$

133,903

 

 

$

518,173

 

 

$

471,947

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 non-controlling interests (see (o) 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 (p) below), (iv) for the three and twelve month periods ended December 31, 2021, losses associated with restructuring and closing of certain offices (see (q) 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 twelve month period ended December 31, 2021, expenses associated with restructuring and closing of certain offices (see (r) below), (iii) for the three and twelve month periods ended December 31, 2022, expenses associated with senior management transition (see (s) below), and (iv) compensation and benefits related to noncontrolling interests (see (o) below).

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(d)

A non-GAAP measure which excludes (i) expenses related to office space reorganization (see (t) below), (ii) expenses related to distribution fees, reimbursable deal costs in accordance with the revenue recognition guidance, bad debt expense, and other (see (p) below), (iii) amortization of intangible assets related to acquisitions, (iv) for the three and twelve month periods ended December 31, 2021, expenses associated with restructuring and closing of certain offices (see (r) below), and (v) expenses related to noncontrolling interests (see (o) below).

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(e)

A non-GAAP measure which excludes (i) for the three and twelve month periods ended December 31, 2022 and December 31, 2021, a provision (benefit) pursuant to our Tax Receivable Agreement obligation, (ii) for the three and twelve month periods ended December 31, 2021, losses associated with restructuring and closing of certain offices (see (q) below), (iii) expenses related to office space reorganization (see (t) below), (iv) for the three and twelve month periods ended December 31, 2021, expenses associated with restructuring and closing of certain offices (see (r) below), (v) for the three and twelve month periods ended December 31, 2022, expenses associated with senior management transition (see (s) below), (vi) net revenue and expenses related to noncontrolling interests (see (o) below), (vii) interest expense primarily related to corporate financing activities, and (viii) 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 twelve month periods ended December 31, 2022 and December 31, 2021, a provision (benefit) pursuant to our Tax Receivable Agreement obligation, (ii) for the three and twelve month periods ended December 31, 2021, losses associated with restructuring and closing of certain offices (see (q) below), (iii) expenses related to office space reorganization (see (t) below), (iv) for the three and twelve month periods ended December 31, 2021, expenses associated with restructuring and closing of certain offices (see (r) below), and (v) for the three and twelve month periods ended December 31, 2022, expenses associated with senior management transition (see (s) 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 $23,955, $35,608, and $53,512 for the three month periods ended December 31, 2022, September 30, 2022, and December 31, 2021, respectively, $133,054 and $180,657 for the twelve month periods ended December 31, 2022 and 2021, respectively, and the denominator of which is pre-tax income of $91,085, $142,080, and $270,721 for the three month periods ended December 31, 2022, September 30, 2022 and December 31, 2021, respectively, $517,456 and $756,283 for the twelve month periods ended December 31, 2022 and 2021, respectively.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(j)

A reconciliation of U.S. GAAP compensation and benefits expense to compensation and benefits expense, as adjusted:

 

 

 

 

Year Ended December 31,

 

 

($ in thousands)

2016

 

 

2017

 

 

2018

 

 

2019

 

 

2020

 

 

2021

 

 

2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation & benefits expense - U.S. GAAP Basis

$

1,340,543

 

 

$

1,512,873

 

 

$

1,514,735

 

 

$

1,563,395

 

 

$

1,550,684

 

 

$

1,895,859

 

 

$

1,656,451

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(14,922

)

 

 

-

 

 

Charges associated with business realignment (u)

 

-

 

 

 

-

 

 

 

-

 

 

 

(56,635

)

 

 

-

 

 

 

-

 

 

 

-

 

 

Charges pertaining to ERP system implementation (v)

 

-

 

 

 

-

 

 

 

(1,190

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

(Charges) credits pertaining to LFI and other similar arrangements comp. liability

 

(3,318

)

 

 

(23,526

)

 

 

14,086

 

 

 

(31,657

)

 

 

(40,634

)

 

 

(35,494

)

 

 

44,261

 

 

Expenses associated with senior management transition (s)

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(33,019

)

 

Compensation related to noncontrolling interests (o)

 

(11,900

)

 

 

(8,285

)

 

 

(10,999

)

 

 

(11,175

)

 

 

(7,927

)

 

 

(9,216

)

 

 

(10,855

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation & benefits expense, as adjusted

$

1,325,325

 

 

$

1,481,062

 

 

$

1,516,632

 

 

$

1,463,928

 

 

$

1,502,123

 

 

$

1,836,227

 

 

$

1,656,838

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(k)

Special deferred incentive awards are granted outside the year end compensation process and include grants to new hires, retention awards, and performance units earned under PRSU grants.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(l)

Under U.S. GAAP, an estimate is made for future forfeitures of the deferred portion of such awards. This estimate is based on both historical experience and future expectations. The result reflects the cost associated with awards that are expected to vest. This calculation is undertaken in order to present awarded compensation on a similar basis to GAAP compensation. Amounts for all periods represent estimated forfeitures.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(m)

Awarded Compensation and Benefits was restated in 2017 to eliminate the year-end foreign exchange adjustment to better align awarded compensation with revenue. The impact of the change is not material.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(n)

Deferred compensation awards ratio is deferred year-end incentive awards, divided by total awarded compensation excluding sign-on and other special deferred incentive awards and actual/estimated forfeitures.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(o)

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(p)

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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(q)

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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(r)

Expenses associated with restructuring and closing of certain offices.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(s)

Represents expenses associated with senior management transition reflecting the departure of certain executive officers

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(t)

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(u)

Represents expenses and losses associated with a business realignment which included employee reductions and the closing of subscale offices and investment strategies.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(v)

Represents expenses associated with Enterprise Resource Planning (ERP) system implementation.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TBD

To be determined

 

Contacts

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

Contacts

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