- Record first-quarter firm-wide adjusted net revenue
- Record first-quarter Financial Advisory adjusted net
revenue
- Asset Management quarter end AUM increased 8%
year-over-year
Lazard, Inc. (NYSE: LAZ) today reported net revenue of $765
million and adjusted net revenue1 of $747 million for the quarter
ended March 31, 2024. On a U.S. GAAP basis, first-quarter 2024 net
income was $36 million or $0.35 per share, diluted. Adjusted net
income2 was $67 million, or $0.66 per share, diluted, for the
quarter.
“Lazard’s record first-quarter revenue reflects an improving
M&A environment and reinforces our outlook for a productive
year ahead, as we continue to make strides in executing our
long-term strategic plan,” said Peter R. Orszag, Chief Executive
Officer, Lazard. “This quarter’s strong results also reflect our
ability to deliver diversified asset management solutions for our
clients while evolving the business into newer areas of
opportunity. With increasing momentum across the firm, we remain
focused on serving clients, winning new business, and delivering
long-term value for our shareholders.”
(Selected results, $ in millions,
Quarter Ended
except per share data and AUM)
March 31,
U.S. GAAP
Financial Measures
2024
2023
%'24-'23
Net Revenue
$765
$542
41%
Financial Advisory
$454
$278
63%
Asset Management
$295
$284
4%
Net Income (Loss)
$36
($22)
NM
Per share, diluted
$0.35
($0.27)
NM
Adjusted
Financial Measures1, 2
Net Revenue
$747
$527
42%
Financial Advisory
$447
$274
63%
Asset Management
$276
$265
4%
Net Income (Loss)
$67
($23)
NM
Per share, diluted
$0.66
($0.26)
NM
Assets Under
Management ($ in billions)
Ending AUM
$250
$232
8%
Average AUM
$247
$227
9%
Note: Endnotes are on page 4 of this release. Reconciliations of
U.S. GAAP to Adjusted results are shown on pages 10-12.
NET REVENUE
Financial Advisory
Financial Advisory net revenue and adjusted net revenue1 were
$454 million and $447 million, respectively, for the first quarter
of 2024, both 63% higher than the first quarter of 2023.
During and since the first quarter of 2024, Lazard has been
engaged in significant and complex M&A transactions globally,
including the following (clients are in italics): Orange on the
combination of its and Masmovil’s operations in Spain, with a
combined enterprise value of €18.6 billion; ImmunoGen’s $10.1
billion acquisition by AbbVie; CymaBay Therapeutic’s $4.3 billion
acquisition by Gilead; Vitesco Technologies' €3.0 billion merger
agreement with Schaeffler; Saint-Gobain's AUD 4.5 billion agreement
to acquire CSR Limited in Australia; LXi’s £1.8 billion merger with
LondonMetric; Hotel Chocolat's £570 million acquisition by a
subsidiary of Mars, Inc.; Blue Stream Fiber’s investment from Sixth
Street Partners; IBM’s sale of The Weather Company assets to
Francisco Partners; Pagero on the company's SEK 8.1 billion sale to
Thomson Reuters; Officine Maccaferri's sale to Ambienta SGR;
QuattroR's acquisition of a 50% controlling stake in Massimo
Zanetti Beverage Group and Terra-Gen on the announced sale of a 50%
stake in the company held by Energy Capital Partners to Masdar.
Lazard's preeminent restructuring and liability management
practices have been engaged in a broad range of complex
restructuring and debt advisory assignments, including company
roles involving Enviva, Inversiones Latin America Power and Tele
Columbus and creditor and/or related party roles involving AFE,
Avison Young, Endo Pharmaceuticals, Hilding Anders, JOANN, Loparex,
Lumen Technologies, Orpea, Rite Aid and SVB Financial Group.
Our capital advisory and solutions practices remain active and
engaged in assignments, including Wynnchurch Capital on the closing
of its $3.5 billion Fund VI, Rubicon Founders on the closing of its
~$1.2 billion second healthcare fund, McCarthy Capital on the
closing of its $870 million private equity fund and Sodexo in
connection with the €3.8 billion listing of Pluxee on Euronext
Paris following its spin-off from the company. Our sovereign
advisory practice continues to be active in advising governments
and sovereign entities across developed and emerging markets.
For a list of publicly announced transactions please visit our
website.
Asset Management
Asset Management net revenue and adjusted net revenue1 were $295
million and $276 million, respectively, for the first quarter of
2024, both 4% higher than the first quarter of 2023.
Management fees and other revenue, on an adjusted basis1, were
$268 million, 3% and 4% higher, respectively, than the first
quarter of 2023 and fourth quarter of 2023.
Incentive fees, on an adjusted basis1 during the period were $8
million, compared to $5 million for the first quarter of 2023.
Average assets under management (AUM) for the first quarter of
2024 were $247 billion, 9% higher than the first quarter of 2023,
and 6% higher than the fourth quarter of 2023.
AUM as of March 31, 2024, was $250 billion, 2% higher than
December 31, 2023 and 8% higher than March 31, 2023. The sequential
change from December 31, 2023 was driven by market appreciation of
$14.0 billion, foreign exchange depreciation of $3.6 billion and
net outflows of $6.6 billion.
OPERATING EXPENSES
Compensation and
Benefits
For the first quarter of 2024, compensation and benefits expense
on a U.S. GAAP and adjusted basis1 were $551 million and $493
million, respectively, compared to $450 million and $399 million,
respectively, for the first quarter of 2023. The adjusted
compensation ratio3 for the first quarter of 2024 was 66.0%,
compared to the first-quarter 2023 ratio of 75.7%.
We focus on the adjusted compensation ratio to manage costs,
balancing a view of current conditions in the market for talent
alongside our objective to drive long-term shareholder value. Our
goal remains to deliver an adjusted compensation ratio over the
cycle in the mid- to high-50s percentage range, while targeting a
consistent deferral policy.
Non-Compensation
Expenses
For the first quarter of 2024, non-compensation expenses on a
U.S. GAAP and adjusted basis1 were $159 million and $134 million,
both 6% lower than the first quarter of 2023, primarily reflecting
lower professional services and other expenses.
The adjusted non-compensation ratio4 was 18.0% for the first
quarter of 2024, compared to 27.0% for the first quarter of
2023.
Our goal remains to deliver an adjusted non-compensation ratio
between 16% to 20% over the cycle.
TAXES
The provisions for income taxes, on a U.S. GAAP and adjusted
basis1 were $14 million and $32 million, respectively, for the
first quarter of 2024. The effective tax rate on an adjusted basis1
was 32.6% for the first quarter of 2024, compared to 32.1% for the
first quarter of 2023.
CAPITAL MANAGEMENT AND BALANCE SHEET
In the first quarter of 2024, we issued $400 million of 6.0%
Senior Notes due March 2031 to refinance the upcoming maturity of
our 2025 Senior Notes.
In the first quarter of 2024, Lazard returned $121 million to
shareholders, which included: $44 million in dividends; $22 million
in share repurchases of our common stock; and $56 million in
satisfaction of employee tax obligations in lieu of share issuances
upon vesting of equity grants.
In the first quarter of 2024, we repurchased 0.6 million shares
at an average price of $38.97. As of March 31, 2024, our remaining
share repurchase authorization was $178 million.
On April 24, 2024, Lazard declared a quarterly dividend of $0.50
per share on its outstanding common stock. The dividend is payable
on May 17, 2024, to stockholders of record on May 6, 2024.
Lazard’s financial position remains strong. As of March 31,
2024, our cash and cash equivalents were $923 million.
ENDNOTES
Beginning in the first quarter of 2024, Lazard has updated the
names of certain non-U.S. GAAP ("non-GAAP") measures and metrics.
The nomenclature change did not result in any change to the
components of our non-GAAP measures and metrics compared to prior
periods. Reconciliations of U.S. GAAP to Adjusted results are shown
on pages 10-12.
- A non-GAAP measure. 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. See attached financial schedules and related notes for a
detailed explanation of adjustments to corresponding U.S. GAAP
results. We believe that presenting our results on an adjusted
basis, in addition to the U.S. GAAP results, is a meaningful and
useful way to compare our operating results across periods.
- First-quarter 2024 adjusted results1 exclude pre-tax charges of
$48.7 million relating to expenses associated with cost-saving
initiatives. Including the effect of taxes, these resulted in a net
charge of $30.9 million, or $0.31, per share, diluted, for the
first quarter of 2024.
- The adjusted compensation ratio is based on a calculation where
the numerator is adjusted compensation and benefits expense and the
denominator is adjusted net revenue.
- The adjusted non-compensation ratio is based on a calculation
where the numerator is adjusted non-compensation expense and the
denominator is adjusted net revenue.
CONFERENCE CALL
Lazard will host a conference call at 8:00 a.m. ET on April 25,
2024, to discuss the company’s financial results for the first
quarter of 2024. 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 1 800-343-4136 (toll-free, U.S.
and Canada) or +1 203-518-9843 (outside of the U.S. and Canada), 15
minutes prior to the start of the call. Conference ID: LAZQ124.
A replay of the conference call will be available by 10:00 a.m.
ET, April 25, 2024, via the Lazard Investor Relations website at
www.lazard.com, or by dialing +1 800-753-9197 (toll-free, U.S. and
Canada) or +1 402-220-0689 (outside of the U.S. and Canada).
ABOUT LAZARD
Founded in 1848, Lazard is one of the world's preeminent
financial advisory and asset management firms, with operations in
North and South America, Europe, the Middle East, Asia, and
Australia. Lazard provides advice on mergers and acquisitions,
capital markets and capital solutions, restructuring and liability
management, geopolitics, and other strategic matters, as well as
asset management and investment solutions to institutions,
corporations, governments, partnerships, family offices, and high
net worth individuals. For more information, please visit
www.lazard.com.
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 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
- In the event of a change or adverse interpretation of relevant
income tax law, regulation or treaty, or a failure to qualify for
treaty benefits, or in the event tax authorities challenge our tax
computations or classifications.
Although we believe the statements reflected in the
forward-looking statements are reasonable, we cannot guarantee
future results, level of activity, performance, achievements or
events. 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, Inc. 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, 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.
***
LAZ-EPE
CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
(U.S. GAAP -
unaudited)
Three Months Ended
% Change From
March 31,
December 31,
March 31,
December 31,
March 31,
($ in thousands, except per share
data)
2024
2023
2023
2023
2023
Total revenue
$785,481
$825,763
$561,911
(5%)
40%
Interest expense
(20,728)
(19,742)
(19,475)
Net revenue
764,753
806,021
542,436
(5%)
41%
Operating expenses:
Compensation and benefits
550,824
559,207
449,967
(1%)
22%
Occupancy and equipment
32,857
33,436
31,773
Marketing and business development
23,599
27,259
22,762
Technology and information services
44,917
47,363
44,040
Professional services
19,880
23,129
24,326
Fund administration and outsourced
services
26,140
27,450
26,576
Amortization and other acquisition-related
costs
68
95
48
Other
11,907
19,644
20,303
Non-compensation expenses
159,368
178,376
169,828
(11%)
(6%)
Benefit pursuant to tax receivable
agreement
–
(3,459)
(40,435)
Operating expenses
710,192
734,124
579,360
(3%)
23%
Operating income (loss)
54,561
71,897
(36,924)
(24%)
NM
Provision (benefit) for income taxes
14,337
403
(21,725)
NM
NM
Net income (loss)
40,224
71,494
(15,199)
(44%)
NM
Net income attributable to noncontrolling
interests
4,469
7,927
6,973
Net income (loss) attributable to Lazard,
Inc.
$35,755
$63,567
($22,172)
(44%)
NM
Attributable to Lazard, Inc. Common
Stockholders:
Weighted average shares
outstanding:
Basic
91,260,465
90,228,532
87,591,852
1%
4%
Diluted
99,351,769
94,989,330
87,591,852
5%
13%
Net income (loss) per share:
Basic
$0.38
$0.69
($0.27)
(45%)
NM
Diluted
$0.35
$0.65
($0.27)
(46%)
NM
Note: For the three month periods ended March 31, 2024, December
31, 2023 and March 31, 2023, Financial Advisory net revenue was
$453,507, $489,258 and $277,574, respectively; Asset Management net
revenue was $295,476, $294,284 and $284,044, respectively;
Corporate net revenue (loss) was $15,770, $22,479 and ($19,182),
respectively.
CONDENSED CONSOLIDATED
STATEMENT OF FINANCIAL
CONDITION
(U.S. GAAP -
unaudited)
March 31,
December 31,
($ in thousands)
2024
2023
ASSETS
Cash and cash equivalents
$923,247
$971,316
Deposits with banks and short-term
investments
247,847
219,576
Restricted cash
33,558
34,091
Receivables
750,483
762,319
Investments
620,615
701,964
Property
227,539
232,516
Goodwill and other intangible assets
394,113
394,928
Operating lease right-of-use assets
389,884
407,213
Deferred tax assets
506,171
497,340
Other assets
493,513
414,518
Total Assets
$4,586,970
$4,635,781
LIABILITIES, REDEEMABLE
NONCONTROLLING INTERESTS & STOCKHOLDERS' EQUITY
Liabilities
Deposits and other customer payables
$536,343
$443,262
Accrued compensation and benefits
495,923
781,375
Operating lease liabilities
467,351
485,191
Tax receivable agreement obligation
115,001
115,087
Senior debt
1,851,444
1,690,200
Other liabilities
583,902
550,804
Total liabilities
4,049,964
4,065,919
Commitments and contingencies
Redeemable noncontrolling interests
88,475
87,675
Stockholders' equity
Preferred stock, par value $.01 per
share
–
–
Common stock, par value $.01 per share
1,128
1,128
Additional paid-in capital
134,573
247,204
Retained earnings
1,384,829
1,402,636
Accumulated other comprehensive loss, net
of tax
(303,995)
(289,950)
Subtotal
1,216,535
1,361,018
Class A common stock held by subsidiaries,
at cost
(823,821)
(937,259)
Total Lazard, Inc. stockholders'
equity
392,714
423,759
Noncontrolling interests
55,817
58,428
Total stockholders' equity
448,531
482,187
Total liabilities, redeemable
noncontrolling interests and stockholders' equity
$4,586,970
$4,635,781
Note: "Property" includes $71 million and $73 million of
property held for sale at March 31, 2024 and December 31, 2023,
respectively.
SELECTED SUMMARY FINANCIAL
INFORMATION (a)
(Adjusted Basis - Non-GAAP -
unaudited)
Three Months Ended
% Change From
March 31,
December 31,
March 31,
December 31,
March 31,
($ in thousands, except per share
data)
2024
2023
2023
2023
2023
Net Revenue:
Financial Advisory
$446,634
$477,366
$273,861
(6%)
63%
Asset Management
275,934
273,694
264,645
1%
4%
Corporate
23,997
9,898
(11,488)
142%
NM
Adjusted net revenue (b)
$746,565
$760,958
$527,018
(2%)
42%
Expenses:
Adjusted compensation and benefits expense
(c)
$492,733
$515,724
$399,090
(4%)
23%
Adjusted compensation ratio
66.0%
67.8%
75.7%
Adjusted non-compensation expenses (d)
$134,293
$148,119
$142,258
(9%)
(6%)
Adjusted non-compensation ratio
18.0%
19.5%
27.0%
Earnings:
Adjusted operating income (loss) (e)
$119,539
$97,115
($14,330)
23%
NM
Adjusted operating margin (f)
16.0%
12.8%
(2.7%)
Adjusted net income (loss) (g)
$66,606
$65,011
($22,948)
2%
NM
Adjusted diluted net income (loss) per
share
$0.66
$0.66
($0.26)
–%
NM
Adjusted diluted weighted average shares
(h)
101,532,219
99,154,021
87,591,852
2%
16%
Adjusted effective tax rate (i)
32.6%
16.0%
32.1%
This presentation includes non-GAAP measures. Our non-GAAP
measures are not meant to be considered in isolation or as a
substitute for the corresponding U.S. GAAP measures and should be
read only in conjunction with our consolidated financial statements
prepared in accordance with U.S. GAAP. For a detailed explanation
of the adjustments made to the corresponding U.S. GAAP measures,
see Reconciliation of U.S. GAAP to Selected Summary Financial
Information and Notes to Financial Schedules.
ASSETS UNDER
MANAGEMENT
(unaudited)
($ in millions)
As of
% Change From
March 31,
December 31,
March 31,
December 31,
March 31,
2024
2023
2023
2023
2023
Equity:
Emerging Markets
$24,779
$25,288
$23,692
(2.0%)
4.6%
Global
55,544
53,528
49,797
3.8%
11.5%
Local
54,841
52,208
49,887
5.0%
9.9%
Multi-Regional
60,089
59,114
55,252
1.6%
8.8%
Total Equity
195,253
190,138
178,628
2.7%
9.3%
Fixed Income:
Emerging Markets
9,080
9,525
9,164
(4.7%)
(0.9%)
Global
10,664
10,762
11,322
(0.9%)
(5.8%)
Local
6,378
6,080
6,002
4.9%
6.3%
Multi-Regional
21,098
21,740
18,973
(3.0%)
11.2%
Total Fixed Income
47,220
48,107
45,461
(1.8%)
3.9%
Alternative Investments
3,201
3,330
4,111
(3.9%)
(22.1%)
Other Alternative Investments
2,643
2,799
2,479
(5.6%)
6.6%
Private Equity
1,486
1,623
821
(8.4%)
81.0%
Cash Management
629
654
640
(3.8%)
(1.7%)
Total AUM
$250,432
$246,651
$232,140
1.5%
7.9%
Three Months Ended
% Change From
March 31,
December 31,
March 31,
December 31,
March 31,
2024
2023
2023
2023
2023
AUM - Beginning of Period
$246,651
$228,264
$216,125
Net Flows
(6,630)
(3,550)
2,999
Market and foreign exchange
appreciation
10,411
21,937
13,016
AUM - End of Period
$250,432
$246,651
$232,140
Average AUM
$246,950
$233,949
$226,849
5.6%
8.9%
Note: Average AUM generally represents the average of the
monthly ending AUM balances for the period.
RECONCILIATION OF U.S. GAAP TO
ADJUSTED RESULTS (a)
(unaudited)
Three Months Ended
March 31,
December 31,
March 31,
($ in thousands, except per share
data)
2024
2023
2023
Net Revenue
Financial Advisory net revenue - U.S. GAAP
Basis
$453,507
$489,258
$277,574
Adjustments:
(Gains) losses associated with cost-saving
initiatives (j)
587
(340)
–
Reimbursable deal costs, bad debt expense
and other (k)
(7,501)
(11,581)
(3,781)
Interest expense
41
29
68
Adjusted Financial Advisory net
revenue
$446,634
$477,366
$273,861
Asset Management net revenue - U.S. GAAP
Basis
$295,476
$294,284
$284,044
Adjustments:
Revenue related to noncontrolling
interests (l)
(4,097)
(3,392)
(4,002)
Distribution fees and other (k)
(15,448)
(17,201)
(15,400)
Interest expense
3
3
3
Adjusted Asset Management net revenue
$275,934
$273,694
$264,645
Corporate net revenue (loss) - U.S. GAAP
Basis
$15,770
$22,479
($19,182)
Adjustments:
Revenue related to noncontrolling
interests (l)
(3,006)
(6,843)
(6,821)
Gains related to Lazard Fund Interests
("LFI") and other similar arrangements
(9,373)
(25,933)
(16,453)
Bad debt expense (k)
–
–
(7,500)
Asset impairment charges
–
–
19,129
Losses associated with cost-saving
initiatives (j)
–
571
–
Interest expense
20,606
19,624
19,339
Adjusted Corporate net revenue (loss)
$23,997
$9,898
($11,488)
Net revenue - U.S. GAAP Basis
$764,753
$806,021
$542,436
Adjustments:
Revenue related to noncontrolling
interests (l)
(7,103)
(10,235)
(10,823)
Gains related to Lazard Fund Interests
("LFI") and other similar arrangements
(9,373)
(25,933)
(16,453)
Distribution fees, reimbursable deal
costs, bad debt expense and other (k)
(22,949)
(28,782)
(26,681)
Asset impairment charges
–
–
19,129
Losses associated with cost-saving
initiatives (j)
587
231
–
Interest expense
20,650
19,656
19,410
Adjusted net revenue (b)
$746,565
$760,958
$527,018
This presentation includes non-GAAP measures. Our non-GAAP
measures are not meant to be considered in isolation or as a
substitute for the corresponding U.S. GAAP measures and should be
read only in conjunction with our consolidated financial statements
prepared in accordance with U.S. GAAP. For a detailed explanation
of the adjustments made to the corresponding U.S. GAAP measures,
see Notes to Financial Schedules.
See Notes to Financial
Schedules
RECONCILIATION OF U.S. GAAP TO
ADJUSTED RESULTS (a)
(unaudited)
Three Months Ended
March 31,
December 31,
March 31,
($ in thousands, except per share
data)
2024
2023
2023
Compensation and Benefits
Expense
Compensation and benefits expense - U.S.
GAAP Basis
$550,824
$559,207
$449,967
Adjustments:
Charges pertaining to LFI and other
similar arrangements
(9,373)
(25,933)
(16,453)
Expenses associated with cost-saving
initiatives (m)
(46,610)
(15,814)
(20,740)
Expenses associated with senior management
transition (n)
–
–
(10,674)
Compensation related to noncontrolling
interests (l)
(2,108)
(1,736)
(3,010)
Adjusted compensation and benefits expense
(c)
$492,733
$515,724
$399,090
Non-Compensation
Expense
Non-compensation expenses - U.S. GAAP
Basis
$159,368
$178,376
$169,828
Adjustments:
Expenses associated with cost-saving
initiatives (m)
(1,532)
(807)
–
Distribution fees, reimbursable deal
costs, bad debt expense and other (k)
(22,949)
(28,782)
(26,681)
Amortization and other acquisition-related
costs
(68)
(95)
(48)
Non-compensation expense related to
noncontrolling interests (l)
(526)
(573)
(841)
Adjusted non-compensation expenses (d)
$134,293
$148,119
$142,258
Operating Income
(Loss)
Operating income (loss) - U.S. GAAP
Basis
$54,561
$71,897
($36,924)
Adjustments:
Benefit pursuant to tax receivable
agreement obligation ("TRA") (o)
–
(3,459)
(40,435)
Asset impairment charges
–
–
19,129
Losses associated with cost-saving
initiatives (j)
587
231
–
Expenses associated with cost-saving
initiatives (m)
48,142
16,621
20,740
Expenses associated with senior management
transition (n)
–
–
10,674
Net income related to noncontrolling
interests (l)
(4,469)
(7,927)
(6,973)
Interest expense
20,650
19,656
19,410
Amortization and other acquisition-related
costs
68
96
49
Adjusted operating income (loss) (e)
$119,539
$97,115
($14,330)
Provision for Income
Taxes
Provision (benefit) for income taxes -
U.S. GAAP Basis
$14,337
$403
($21,725)
Adjustments:
Tax effect of adjustments
17,878
11,949
10,884
Adjusted provision (benefit) for income
taxes
$32,215
$12,352
($10,841)
Net Income attributable to
Lazard, Inc.
Net income (loss) attributable to Lazard,
Inc. - U.S. GAAP Basis
$35,755
$63,567
($22,172)
Adjustments:
Benefit pursuant to tax receivable
agreement obligation ("TRA") (o)
–
(3,459)
(40,435)
Asset impairment charges
–
–
19,129
Losses associated with cost-saving
initiatives (j)
587
231
–
Expenses associated with cost-saving
initiatives (m)
48,142
16,621
20,740
Expenses associated with senior management
transition (n)
–
–
10,674
Tax effect of adjustments
(17,878)
(11,949)
(10,884)
Adjusted net income (loss) (g)
$66,606
$65,011
($22,948)
Diluted Weighted Average
Shares Outstanding
Diluted Weighted Average Shares
Outstanding - U.S. GAAP Basis
99,351,769
94,989,330
87,591,852
Adjustment: participating securities
including profits interest participation rights and other
2,180,450
4,164,691
–
Adjusted Diluted Weighted Average Shares
Outstanding (h)
101,532,219
99,154,021
87,591,852
Diluted net income (loss) per
share:
U.S. GAAP Basis
$0.35
$0.65
($0.27)
Adjusted Basis
$0.66
$0.66
($0.26)
This presentation includes non-GAAP measures. Our non-GAAP
measures are not meant to be considered in isolation or as a
substitute for the corresponding U.S. GAAP measures and should be
read only in conjunction with our consolidated financial statements
prepared in accordance with U.S. GAAP. For a detailed explanation
of the adjustments made to the corresponding U.S. GAAP measures,
see Notes to Financial Schedules.
See Notes to Financial
Schedules
RECONCILIATION OF
NON-COMPENSATION U.S. GAAP TO ADJUSTED (a)
(unaudited)
Three Months Ended
March 31,
December 31,
March 31,
($ in thousands)
2024
2023
2023
Non-compensation expenses - U.S. GAAP
Basis:
Occupancy and equipment
$32,857
$33,436
$31,773
Marketing and business development
23,599
27,259
22,762
Technology and information services
44,917
47,363
44,040
Professional services
19,880
23,129
24,326
Fund administration and outsourced
services
26,140
27,450
26,576
Amortization and other acquisition-related
costs
68
95
48
Other
11,907
19,644
20,303
Non-compensation expenses - U.S. GAAP
Basis
$159,368
$178,376
$169,828
Non-compensation expense -
Adjustments:
Occupancy and equipment (l) (m)
($1,573)
($197)
($61)
Marketing and business development (k)
(l)
(2,079)
(3,748)
(2,728)
Technology and information services (k)
(l) (m)
(35)
(149)
(73)
Professional services (k) (l) (m)
(873)
(1,306)
(1,402)
Fund administration and outsourced
services (k) (l)
(15,035)
(16,546)
(14,979)
Amortization and other acquisition-related
costs
(68)
(95)
(48)
Other (k) (l) (m)
(5,412)
(8,216)
(8,279)
Subtotal non-compensation adjustments
($25,075)
($30,257)
($27,570)
Adjusted non-compensation expenses:
Occupancy and equipment
$31,284
$33,239
$31,712
Marketing and business development
21,520
23,511
20,034
Technology and information services
44,882
47,214
43,967
Professional services
19,007
21,823
22,924
Fund administration and outsourced
services
11,105
10,904
11,597
Amortization and other acquisition-related
costs
–
–
–
Other
6,495
11,428
12,024
Adjusted non-compensation expenses (d)
$134,293
$148,119
$142,258
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, Inc.
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. Beginning in the first
quarter of 2024, Lazard has updated the names of certain non-GAAP
measures and metrics. The nomenclature change did not result in any
change to the components of our non-GAAP measures and metrics
compared to prior periods.
(b)
A non-GAAP measure which excludes (i)
revenue related to non-controlling interests (see (l) below), (ii)
gains related to the changes in the fair value of investments held
in connection with Lazard Fund Interests and other similar deferred
compensation arrangements for which a corresponding equal amount is
excluded from compensation & benefits expense, (iii) revenue
related to distribution fees, reimbursable deal costs in accordance
with the revenue recognition guidance, bad debt expense, and other
(see (k) below), (iv) for the three month period ended March 31,
2023, asset impairment charges, (v) for the three month periods
ended March 31, 2024 and December 31, 2023, losses associated with
cost-saving initiatives (see (j) below), and (vi) interest expense
primarily related to corporate financing activities.
(c)
A non-GAAP measure which excludes (i)
charges related to the changes in the fair value of the
compensation liability recorded in connection with Lazard Fund
Interests and other similar deferred compensation arrangements,
(ii) expenses associated with cost-saving initiatives (see (m)
below), (iii) for the three month period ended March 31, 2023,
expenses associated with senior management transition (see (n)
below), and (iv) compensation and benefits related to
noncontrolling interests (see (l) below).
(d)
A non-GAAP measure which excludes (i) for
the three month periods ended March 31, 2024 and December 31, 2023,
expenses associated with cost-saving initiatives (see (m) 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 and other
acquisition-related costs, and (iv) expenses related to
noncontrolling interests (see (l) below).
(e)
A non-GAAP measure which excludes (i) for
the three month periods ended December 31, 2023 and March 31, 2023,
a benefit pursuant to tax receivable agreement obligation ("TRA")
(see (o) below), (ii) for the three month period ended December 31,
2023, asset impairment charges, (iii) for the three month periods
ended March 31, 2024 and December 31, 2023, losses associated with
cost-saving initiatives (see (j) below), (iv) expenses associated
with cost-saving initiatives (see (m) below), (v) for the three
month period ended December 31, 2023, expenses associated with
senior management transition (see (n) below), (vi) net revenue and
expenses related to noncontrolling interests (see (l) below), (vii)
interest expense primarily related to corporate financing
activities, and (viii) amortization and other acquisition-related
costs.
(f)
A non-GAAP measure which represents
adjusted operating income as a percentage of adjusted net
revenue.
(g)
A non-GAAP measure which excludes (i) for
the three month periods ended December 31, 2023 and March 31, 2023,
a benefit pursuant to tax receivable agreement obligation (see (o)
below), (ii) for the three month period ended December 31, 2023,
asset impairment charges, (iii) for the three periods ended March
31, 2024 and December 31, 2023, losses associated with cost-saving
initiatives (see (j) below), (iv) expenses associated with
cost-saving initiatives (see (m) below), and (v) for the three
month period ended December 31, 2023, expenses associated with
senior management transition (see (n) below), net of tax
benefits.
(h)
A non-GAAP measure which includes units of
the long-term incentive compensation program consisting of profits
interest participation rights, which are equity incentive awards
that, subject to certain conditions, may be exchanged for shares of
our common stock. Certain profits interest participation rights and
other participating securities may be excluded from the computation
of outstanding stock equivalents for U.S. GAAP net income per
share. In addition, for the three month periods ended March 31,
2024 and December 31, 2023, includes dilutive effect of weighted
average number of incremental shares of common stock issuable from
share-based incentive compensation.
(i)
Adjusted 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 (loss),
generally based upon the effective marginal tax rate in the
applicable jurisdiction of the adjustments. The calculation is
based on a ratio where the numerator is the adjusted provision
(benefit) for income taxes of $32,215, $12,352, and ($10,841) for
the three month periods ended March 31, 2024, December 31, 2023,
and March 31, 2023, respectively, and the denominator is adjusted
operating income (loss) less interest expense and amortization and
other acquisition-related costs of $98,820, $77,363, and ($33,789)
for the three month periods ended March 31, 2024, December 31,
2023, and March 31, 2023, respectively.
(j)
Represents losses associated with the
closing of certain offices as part of the cost-saving initiatives
including the reclassification of currency translation adjustments
to earnings from accumulated other comprehensive loss and
transactions related to foreign currency exchange.
(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 adjusted net revenue and adjusted non-compensation expense,
respectively, and excludes bad debt expense, which represents fees
and other receivables that are deemed uncollectible.
(l)
Noncontrolling interests include revenue
and expenses principally related to Edgewater, ESC Funds and a
Special Purpose Acquisition Company.
(m)
Represents expenses associated with
cost-saving initiatives including closing certain offices.
(n)
Represents expenses associated with senior
management transition reflecting the departure of certain executive
officers.
(o)
Pursuant to the periodic revaluation of
the TRA liability and the assumptions reflected in the estimate,
the revaluation had the effect of reducing the estimated liability
under the TRA. As a result, the Company recorded a “benefit
pursuant to tax receivable agreement” of $3,459 for the three month
period ended December 31, 2023 and $40,435 for the three month
period ended March 31, 2023.
NM
Not meaningful
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version on businesswire.com: https://www.businesswire.com/news/home/20240425191838/en/
Media: Shannon Houston +1 212 632 6880
shannon.houston@lazard.com Investor: Alexandra Deignan +1 212 632
6886 alexandra.deignan@lazard.com
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