Lazard Ltd Reports Second-Quarter and First-Half 2023 Results

Lazard Ltd (NYSE: LAZ) today reported operating revenue¹ of $620 million for the quarter ended June 30, 2023. Net income, as adjusted², was $23 million, or $0.24 per share, diluted, for the quarter. On a U.S. GAAP basis, second-quarter 2023 net loss was $124 million, or $1.41 per share, diluted.

First-half 2023 net loss, as adjusted, was $0.3 million. On a U.S. GAAP Basis, first-half 2023 net loss was $146 million, or $1.68 per share, diluted.

"Lazard’s diversified global business model has proven resilient during the continued challenging market conditions in the second quarter," said Kenneth M. Jacobs, Chairman and Chief Executive Officer of Lazard. "Our Asset Management business is well-positioned, and we believe the M&A market is stabilizing and conditions are set for the beginning of a rebound."

($ in millions, except		Quarter Ended							Six Months Ended
per share data and AUM)		June 30,							June 30,
		2023		2022		%'23-'22			2023		2022		%'23-'22
Net Income (Loss)
U.S. GAAP		($124)		$95		NM			($146)		$209		NM
Per share, diluted		($1.41)		$0.92		NM			($1.68)		$1.97		NM
Adjusted2		$23		$96		(76%)			$–		$211		NM
Per share, diluted		$0.24		$0.92		(74%)			$–		$1.97		NM
Operating Revenue1
Total operating revenue		$620		$676		(8%)			$1,147		$1,375		(17%)
Financial Advisory		$344		$407		(15%)			$618		$795		(22%)
Asset Management		$267		$266		1%			$532		$577		(8%)
AUM ($ in billions)
Period end		$239		$217		10%
Average		$235		$230		2%			$231		$243		(5%)

Note: Endnotes are on page 5 of this release. A reconciliation of adjusted GAAP to U.S. GAAP is on pages 13-14.

OPERATING REVENUE

Operating revenue was $620 million for the second quarter of 2023, and $1,147 million for the first half of 2023, 8% and 17% lower, respectively, from the comparable 2022 periods.

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, and other strategic advisory matters and Capital Raising and Placement.

For the second quarter of 2023, Financial Advisory operating revenue was $344 million, 15% lower than the second quarter of 2022.

For the first half of 2023, Financial Advisory operating revenue was $618 million, 22% lower than the first half of 2022.

During and since the second quarter of 2023, Lazard has been engaged in significant and complex M&A transactions and other strategic advisory assignments globally, including the following (clients are in italics): Lincoln Financial Group’s $28 billion reinsurance transaction with Fortitude Re; Newmont’s $19 billion acquisition of Newcrest; EDF in the implementation of the squeeze-out procedure for the shares and OCEANEs of EDF following the simplified tender offer launched by the French State, valued at €9.7 billion; CVS Health's $10.6 billion acquisition of Oak Street Health; NEOM Green Hydrogen Company’s completion of an $8.4 billion financing for the world’s largest carbon-free green hydrogen plant; Xylem's $7.5 billion acquisition of Evoqua; Affiliate of Lone Star Funds’ €5.2 billion sale of MBCC Group to Sika; NiSource’s $2.4 billion agreement to sell a minority equity interest in NIPSCO to Blackstone Infrastructure Partners; Madison Dearborn Partners' closing of its $2.2 billion continuation fund; Mars' $1.45 billion acquisition of Heska; Insight Partners’ closing of its $1.3 billion continuation fund; Oakley Capital on the closing of its over €1 billion continuation fund for IU Group; Agrofert’s €810 million acquisition of Borealis' nitrogen business; IFF’s $900 million sale of its Savory Solutions Group to PAI Partners; Allen & Overy LLP’s combination with Shearman & Sterling; and Braya Renewable Fuel’s preferred equity investment from Energy Capital Partners.

Lazard has one of the world’s preeminent restructuring and capital solutions practices. During and since the second quarter of 2023, we have been engaged in a broad range of visible and complex restructuring and debt advisory assignments, including debtor roles involving Bed Bath & Beyond, IKKS, Latécoère, Naftogaz, National CineMedia, SiO2 Medical Products and Vroon, and creditor and/or related party roles involving Ansaldo Energia, Endo Pharmaceuticals, Orpea, Party City, SVB Financial Group, Technicolor Creative Studio and Venator.

Our Capital Advisory practice remains active globally, advising on a broad range of public and private assignments. Our Sovereign Advisory practice continues to be active advising governments, sovereign and sub-sovereign entities across developed and emerging markets.

For a list of publicly announced Financial Advisory transactions on which Lazard advised in the second quarter of 2023, or continued to advise or completed since June 30, 2023, please visit our website at www.lazard.com/financial-advisory/transactions/.

Asset Management

In the text portion of this press release, we present our Asset Management results as 1) Management fees and other revenue, and 2) Incentive fees.

For the second quarter of 2023, Asset Management operating revenue was $267 million, 1% higher than the second quarter of 2022. For the first half of 2023, Asset Management operating revenue was $532 million, 8% lower than the first half of 2022.

For the second quarter of 2023, management fees and other revenue was $261 million, 1% higher than the second quarter of 2022, and 1% higher than the first quarter of 2023. For the first half of 2023, management fees and other revenue was $520 million, 5% lower than the first half of 2022.

Average assets under management (AUM) for the second quarter of 2023 was $235 billion, 2% higher than the second quarter of 2022, and 4% higher than the first quarter of 2023. Average AUM for the first half of 2023 was $231 billion, 5% lower than the first half of 2022.

AUM as of June 30, 2023, was $239 billion, 3% higher than March 31, 2023, and 10% higher than June 30, 2022. The sequential change from March 31, 2023 was driven by market appreciation of $8.8 billion, offset by foreign exchange depreciation of $0.6 billion and net outflows of $1.0 billion.

For the second quarter of 2023, incentive fees were $6 million, compared to $7 million for the second quarter of 2022. For the first half of 2023, incentive fees were $11 million, compared to $33 million for the first half of 2022.

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.

For the second quarter of 2023, adjusted compensation and benefits expense¹ was $424 million, compared to $395 million for the second quarter of 2022. The adjusted compensation ratio for the second quarter of 2023 was 68.4%, compared to the second-quarter 2022 ratio of 58.5%.

For the first half of 2023, adjusted compensation and benefits expense was $823 million, compared to $804 million for the first half of 2022.

Our goal remains 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

For the second quarter of 2023, adjusted non-compensation expense¹ was $144 million, 10% higher than the second quarter of 2022, primarily reflecting increased occupancy costs, as well as higher travel and business development and professional services expenses.

The ratio of adjusted non-compensation expense to operating revenue was 23.2% for the second quarter of 2023, compared to 19.4% for the second quarter of 2022.

Adjusted non-compensation expense for the first half of 2023 was $286 million, 15% higher than the first half of 2022. The ratio of adjusted non-compensation expense to operating revenue for the first half of 2023 was 24.9%, compared to 18.0% for the first half of 2022.

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 $10 million for the second quarter and a benefit of $0.5 million for the first half of 2023. The effective tax rate on the same basis was 31.2% for the second quarter of 2023 and 67.8% for the first half of 2023, compared to 26.4% and 25.9% for the respective 2022 periods.

CAPITAL MANAGEMENT AND BALANCE SHEET

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

In the second quarter of 2023, Lazard returned $47 million to shareholders, which included: $43 million in dividends and $4 million in satisfaction of employee tax obligations in lieu of share issuances upon vesting of equity grants.

In the first half of 2023, Lazard returned $234 million to shareholders, which included: $86 million in dividends; $99 million in share repurchases of our common stock; and $49 million in satisfaction of employee tax obligations in lieu of share issuances upon vesting of equity grants.

During the first half of 2023, we repurchased 2.7 million shares. As of June 30, 2023, our remaining share repurchase authorization was $203 million.

On July 26, 2023, Lazard declared a quarterly dividend of $0.50 per share on its outstanding common stock. The dividend is payable on August 18, 2023, to stockholders of record on August 7, 2023.

Lazard’s financial position remains strong. As of June 30, 2023, our cash and cash equivalents were $698 million. Stockholders’ equity related to Lazard’s interests was $360 million.

ENDNOTES

1		A non-U.S. GAAP measure. See attached financial schedules and related notes for a detailed explanation of adjustments to corresponding U.S. GAAP results. We believe that presenting our results on an adjusted basis, in addition to the U.S. GAAP results, is the most meaningful and useful way to compare our operating results across periods.
2		Second-quarter and first-half 2023 adjusted results1 exclude pre-tax charges of $146.7 million and $167.4 million, respectively, relating to expenses associated with cost-saving initiatives; first-half pre-tax charges of $10.7 million relating to expenses associated with senior management transition, a benefit pursuant to tax receivable agreement obligation (“TRA”) of $40.4 million, and $19.1 million relating to certain asset impairment charges. On a U.S. GAAP basis, these resulted in a net charge of $146.7 million, or $1.65, per share, diluted, for the second quarter, and a net charge of $145.9 million, or $1.66, per share, diluted, for the first half of 2023.

CONFERENCE CALL

Lazard will host a conference call at 8:00 a.m. ET on July 27, 2023, to discuss the company’s financial results for the second quarter of 2023 and first half of 2023. 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 [phone] (outside of the U.S. and Canada), 15 minutes prior to the start of the call. Conference ID: LAZQ223.

A replay of the conference call will be available by 10:00 a.m. ET, July 27, 2023, via the Lazard Investor Relations website at www.lazard.com, or by dialing [phone] (toll-free, U.S. and Canada) or [phone] (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 175^th 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 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 statements 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.

***

LAZ-EPE

LAZARD LTD UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (U.S. GAAP)
		Three Months Ended										% Change From
		June 30,			March 31,			June 30,				March 31,		June 30,
($ in thousands, except per share data)		2023			2023			2022				2023		2022
Total revenue		$662,318			$561,911			$660,658				18%		–%
Interest expense		(19,204	)		(19,475	)		(21,112	)
Net revenue		643,114			542,436			639,546				19%		1%
Operating expenses:
Compensation and benefits		572,231			449,967			363,830				27%		57%
Occupancy and equipment		32,800			31,773			29,409
Marketing and business development		28,582			22,762			22,673
Technology and information services		51,370			44,040			42,067
Professional services		21,402			24,326			16,549
Fund administration and outsourced services		28,968			26,576			28,551
Amortization and other acquisition-related costs		95			48			15
Other		17,739			20,303			10,614
Subtotal		180,956			169,828			149,878				7%		21%
Benefit pursuant to tax receivable agreement		–			(40,435	)		–
Operating expenses		753,187			579,360			513,708				30%		47%
Operating income (loss)		(110,073	)		(36,924	)		125,838				NM		NM
Provision (benefit) for income taxes		10,303			(21,725	)		34,187				NM		(70%)
Net income (loss)		(120,376	)		(15,199	)		91,651				NM		NM
Net income (loss) attributable to noncontrolling interests		3,637			6,973			(3,829	)
Net income (loss) attributable to Lazard Ltd		($124,013	)		($22,172	)		$95,480				NM		NM
Attributable to Lazard Ltd Common Stockholders:
Weighted average shares outstanding:
Basic		88,729,654			87,591,852			98,660,173				1%		(10%)
Diluted		88,729,654			87,591,852			102,753,336				1%		(14%)
Net income (loss) per share:
Basic		($1.41	)		($0.27	)		$0.96				NM		NM
Diluted		($1.41	)		($0.27	)		$0.92				NM		NM

LAZARD LTD UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (U.S. GAAP)
		Six Months Ended
		June 30,			June 30,
($ in thousands, except per share data)		2023			2022				% Change
Total revenue		$1,224,229			$1,376,802				(11%)
Interest expense		(38,679	)		(42,364	)
Net revenue		1,185,550			1,334,438				(11%)
Operating expenses:
Compensation and benefits		1,022,198			760,671				34%
Occupancy and equipment		64,573			60,648
Marketing and business development		51,344			36,796
Technology and information services		95,410			79,998
Professional services		45,728			32,578
Fund administration and outsourced services		55,544			58,254
Amortization of intangible assets related to acquisitions		143			30
Other		38,042			19,897
Subtotal		350,784			288,201				22%
Benefit pursuant to tax receivable agreement		(40,435	)		—
Operating expenses		1,332,547			1,048,872				27%
Operating income (loss)		(146,997	)		285,566				NM
Provision (benefit) for income taxes		(11,422	)		72,940				NM
Net income (loss)		(135,575	)		212,626				NM
Net income attributable to noncontrolling interests		10,610			3,270
Net income (loss) attributable to Lazard Ltd		($146,185	)		$209,356				NM
Attributable to Lazard Ltd Common Stockholders:
Weighted average shares outstanding:
Basic		88,160,753			100,603,724				(12%)
Diluted		88,160,753			105,469,988				(16%)
Net income (loss) per share:
Basic		($1.68	)		$2.05				NM
Diluted		($1.68	)		$1.97				NM

LAZARD LTD UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL CONDITION (U.S. GAAP)
		June 30,				December 31,
($ in thousands)		2023				2022
ASSETS
Cash and cash equivalents		$697,756				$1,234,773
Deposits with banks and short-term investments		446,777				779,246
Restricted cash		35,368				625,381
Receivables		674,558				652,758
Investments		690,199				698,977
Property		236,717				250,073
Goodwill and other intangible assets		394,682				377,330
Operating lease right-of-use assets		426,427				431,608
Deferred tax assets		524,053				407,657
Other assets		476,400				394,758
Total Assets		$4,602,937				$5,852,561
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS & STOCKHOLDERS' EQUITY
Liabilities
Deposits and other customer payables		$587,838				$921,834
Accrued compensation and benefits		601,689				735,576
Operating lease liabilities		507,157				513,688
Tax receivable agreement obligation		118,546				191,189
Senior debt		1,688,957				1,687,714
Other liabilities		599,282				543,690
Total liabilities		4,103,469				4,593,691
Commitments and contingencies
Redeemable noncontrolling interests		83,583				583,471
Stockholders' equity
Preferred stock, par value $.01 per share		–				–
Common stock, par value $.01 per share		1,128				1,128
Additional paid-in capital		167,622				167,890
Retained earnings		1,431,181				1,676,713
Accumulated other comprehensive loss, net of tax		(281,886	)			(295,854	)
Subtotal		1,318,045				1,549,877
Class A common stock held by subsidiaries, at cost		(958,067	)			(993,414	)
Total Lazard Ltd stockholders' equity		359,978				556,463
Noncontrolling interests		55,907				118,936
Total stockholders' equity		415,885				675,399
Total liabilities, redeemable noncontrolling interests and stockholders' equity		$4,602,937				$5,852,561

LAZARD LTD SELECTED SUMMARY FINANCIAL INFORMATION (a) (Non-GAAP - unaudited)
		Three Months Ended										% Change From
		June 30,			March 31,			June 30,				March 31,		June 30,
($ in thousands, except per share data)		2023			2023			2022				2023		2022
Revenues:
Financial Advisory		$344,167			$273,861			$406,792				26%		(15%)
Asset Management		267,058			264,645			265,707				1%		1%
Corporate		8,801			(11,488	)		3,412				NM		NM
Operating revenue (b)		$620,026			$527,018			$675,911				18%		(8%)
Expenses:
Adjusted compensation and benefits expense (c)		$424,097			$399,090			$395,407				6%		7%
Ratio of adjusted compensation to operating revenue		68.4	%		75.7	%		58.5	%
Non-compensation expense (d)		$143,677			$142,258			$130,941				1%		10%
Ratio of non-compensation to operating revenue		23.2	%		27.0	%		19.4	%
Earnings:
Earnings (loss) from operations (e)		$52,252			($14,330	)		$149,563				NM		(65%)
Operating margin (f)		8.4	%		(2.7	%)		22.1	%
Adjusted net income (loss) (g)		$22,692			($22,948	)		$96,108				NM		(76%)
Diluted adjusted net income (loss) per share		$0.24			($0.26	)		$0.92				NM		(74%)
Diluted weighted average shares (h)		95,620,902			87,591,852			104,767,897				9%		(9%)
Effective tax rate (i)		31.2	%		32.1	%		26.4	%

This presentation includes non-U.S. GAAP ("non-GAAP") measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for the corresponding U.S. GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with U.S. GAAP. For a detailed explanation of the adjustments made to the corresponding U.S. GAAP measures, see Reconciliation of U.S. GAAP to Selected Summary Financial Information and Notes to Financial Schedules.

LAZARD LTD SELECTED SUMMARY FINANCIAL INFORMATION (a) (Non-GAAP - unaudited)
		Six Months Ended
		June 30,			June 30,
($ in thousands, except per share data)		2023			2022				% Change
Revenues:
Financial Advisory		$618,028			$794,922				(22%)
Asset Management		531,703			577,488				(8%)
Corporate		(2,687	)		2,136				NM
Operating revenue (b)		$1,147,044			$1,374,546				(17%)
Expenses:
Adjusted compensation and benefits expense (c)		$823,187			$804,109				2%
Ratio of adjusted compensation to operating revenue		71.8	%		58.5	%
Non-compensation expense (d)		$285,935			$248,067				15%
Ratio of non-compensation to operating revenue		24.9	%		18.0	%
Earnings:
Earnings from operations (e)		$37,922			$322,370				(88%)
Operating margin (f)		3.3	%		23.5	%
Adjusted net income (loss) (g)		($256	)		$210,800				NM
Diluted adjusted net income per share		$–			$1.97				NM
Diluted weighted average shares (h)		88,160,753			106,973,019				(18%)
Effective tax rate (i)		67.8	%		25.9	%

This presentation includes non-U.S. GAAP ("non-GAAP") measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for the corresponding U.S. GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with U.S. GAAP. For a detailed explanation of the adjustments made to the corresponding U.S. GAAP measures, see Reconciliation of U.S. GAAP to Selected Summary Financial Information and Notes to Financial Schedules.

LAZARD LTD ASSETS UNDER MANAGEMENT ("AUM") (unaudited)
($ in millions)
		As of									Variance
		June 30,			March 31,			December 31,
		2023			2023			2022			Qtr to Qtr			YTD
Equity:
Emerging Markets		$24,554			$23,692			$21,557			3.6%			13.9%
Global		51,602			49,797			46,861			3.6%			10.1%
Local		51,223			49,887			47,504			2.7%			7.8%
Multi-Regional		57,346			55,252			51,473			3.8%			11.4%
Total Equity		184,725			178,628			167,395			3.4%			10.4%
Fixed Income:
Emerging Markets		9,196			9,164			8,944			0.3%			2.8%
Global		11,347			11,322			11,029			0.2%			2.9%
Local		6,008			6,002			5,352			0.1%			12.3%
Multi-Regional		19,300			18,973			18,061			1.7%			6.9%
Total Fixed Income		45,851			45,461			43,386			0.9%			5.7%
Alternative Investments		3,959			4,111			3,812			(3.7%)			3.9%
Other Alternative Investments		2,713			2,479			—			9.4%			NM
Private Equity		1,387			821			1,038			68.9%			33.6%
Cash Management		705			640			494			10.2%			42.7%
Total AUM		$239,340			$232,140			$216,125			3.1%			10.7%
		Three Months Ended June 30,									Six Months Ended June 30,
		2023			2022						2023			2022
AUM - Beginning of Period		$232,140			$252,675						$216,125			$273,739
Net Flows (j)		(997	)		(4,649	)					2,002			(11,174	)
Market and foreign exchange appreciation (depreciation)		8,197			(31,400	)					21,213			(45,939	)
AUM - End of Period		$239,340			$216,626						$239,340			$216,626
Average AUM		$235,352			$230,162						$231,110			$243,263
% Change in average AUM		2.3	%								(5.0	%)

Note: Average AUM generally represents the average of the monthly ending AUM balances for the period.

LAZARD LTD RECONCILIATION OF U.S. GAAP TO SELECTED SUMMARY FINANCIAL INFORMATION (a) (unaudited)
		Three Months Ended										Six Months Ended
		June 30,			March 31,			June 30,				June 30,			June 30,
($ in thousands, except per share data)		2023			2023			2022				2023			2022
Operating Revenue
Net revenue - U.S. GAAP Basis		$643,114			$542,436			$639,546				$1,185,550			$1,334,438
Adjustments:
Revenue related to noncontrolling interests (k)		(6,237	)		(10,823	)		(660	)			(17,060	)		(11,455	)
(Gains) losses related to Lazard Fund Interests ("LFI") and other similar arrangements		(9,675	)		(16,453	)		35,098				(26,128	)		49,421
Distribution fees, reimbursable deal costs, bad debt expense and other (l)		(26,338	)		(26,681	)		(17,083	)			(53,019	)		(35,905	)
Asset impairment charges (m)		—			19,129			—				19,129			—
Interest expense		19,162			19,410			19,010				38,572			38,047
Operating revenue, as adjusted (b)		$620,026			$527,018			$675,911				$1,147,044			$1,374,546
Compensation and Benefits Expense
Compensation and benefits expense - U.S. GAAP Basis		$572,231			$449,967			$363,830				$1,022,198			$760,671
Adjustments:
(Charges) credits pertaining to LFI and other similar arrangements		(9,675	)		(16,453	)		35,098				(26,128	)		49,421
Expenses associated with cost-saving initiatives (n)		(136,608	)		(20,740	)		—				(157,348	)		—
Expenses associated with senior management transition (o)		—			(10,674	)		—				(10,674	)		—
Compensation related to noncontrolling interests (k)		(1,851	)		(3,010	)		(3,521	)			(4,861	)		(5,983	)
Compensation and benefits expense, as adjusted (c)		$424,097			$399,090			$395,407				$823,187			$804,109
Non-Compensation Expense
Non-compensation expense - Subtotal - U.S. GAAP Basis		$180,956			$169,828			$149,878				$350,784			$288,201
Adjustments:
Expenses associated with cost-saving initiatives (n)		(10,097	)		—			—				(10,097	)		—
Expenses related to office space reorganization (p)		—			—			(871	)			—			(1,995	)
Distribution fees, reimbursable deal costs, bad debt expense and other (l)		(26,338	)		(26,681	)		(17,083	)			(53,019	)		(35,905	)
Amortization and other acquisition-related costs		(95	)		(48	)		(15	)			(143	)		(30	)
Non-compensation expense related to noncontrolling interests (k)		(749	)		(841	)		(968	)			(1,590	)		(2,204	)
Non-compensation expense, as adjusted (d)		$143,677			$142,258			$130,941				$285,935			$248,067
Pre-Tax Income and Earnings From Operations
Operating Income (Loss) - U.S. GAAP Basis		($110,073	)		($36,924	)		$125,838				($146,997	)		$285,566
Adjustments:
Benefit pursuant to tax receivable agreement obligation ("TRA") (q)		—			(40,435	)		—				(40,435	)		—
Asset impairment charges (m)		—			19,129			—				19,129			—
Expenses associated with cost-saving initiatives (n)		146,705			20,740			—				167,445			—
Expenses associated with senior management transition (o)		—			10,674			—				10,674			—
Expenses related to office space reorganization (p)		—			—			871				—			1,995
Net income (loss) related to noncontrolling interests (k)		(3,637	)		(6,973	)		3,829				(10,610	)		(3,270	)
Pre-tax income (loss), as adjusted		32,995			(33,789	)		130,538				(794	)		284,291
Interest expense		19,162			19,410			19,010				38,572			38,047
Amortization and other acquisition-related costs		95			49			15				144			32
Earnings (loss) from operations, as adjusted (e)		$52,252			($14,330	)		$149,563				$37,922			$322,370
Net Income attributable to Lazard Ltd
Net income (loss) attributable to Lazard Ltd - U.S. GAAP Basis		($124,013	)		($22,172	)		$95,480				($146,185	)		$209,356
Adjustments:
Benefit pursuant to tax receivable agreement obligation ("TRA") (q)		—			(40,435	)		—				(40,435	)		—
Asset impairment charges (m)		—			19,129			—				19,129			—
Expenses associated with cost-saving initiatives (n)		146,705			20,740			—				167,445			—
Expenses associated with senior management transition (o)		—			10,674			—				10,674			—
Expenses related to office space reorganization (p)		—			—			871				—			1,995
Tax benefit allocated to adjustments		—			(10,884	)		(243	)			(10,884	)		(551	)
Net income (loss), as adjusted (g)		$22,692			($22,948	)		$96,108				($256	)		$210,800
Diluted Weighted Average Shares Outstanding
Diluted Weighted Average Shares Outstanding - U.S. GAAP Basis		88,729,654			87,591,852			102,753,336				88,160,753			105,469,988
Adjustment: participating securities including profits interest participation rights and other		6,891,248			—			2,014,561				—			1,503,031
Diluted Weighted Average Shares Outstanding, as adjusted (h)		95,620,902			87,591,852			104,767,897				88,160,753			106,973,019
Diluted net income (loss) per share:
U.S. GAAP Basis		($1.41	)		($0.27	)		$0.92				($1.68	)		$1.97
Non-GAAP Basis, as adjusted		$0.24			($0.26	)		$0.92				$–			$1.97

This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for the corresponding U.S. GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with U.S. GAAP. For a detailed explanation of the adjustments made to the corresponding U.S. GAAP measures, see Notes to Financial Schedules.

See Notes to Financial Schedules

LAZARD LTD RECONCILIATION OF NON-COMPENSATION U.S. GAAP TO ADJUSTED (a) (unaudited)
		Three Months Ended										Six Months Ended
		June 30,			March 31,			June 30,				June 30,			June 30,
($ in thousands)		2023			2023			2022				2023			2022
Non-compensation expense - U.S. GAAP Basis:
Occupancy and equipment		$32,800			$31,773			$29,409				$64,573			$60,648
Marketing and business development		28,582			22,762			22,673				51,344			36,796
Technology and information services		51,370			44,040			42,067				95,410			79,998
Professional services		21,402			24,326			16,549				45,728			32,578
Fund administration and outsourced services		28,968			26,576			28,551				55,544			58,254
Amortization and other acquisition-related costs		95			48			15				143			30
Other		17,739			20,303			10,614				38,042			19,897
Non-compensation expense - Subtotal - U.S. GAAP Basis		$180,956			$169,828			$149,878				$350,784			$288,201
Non-compensation expense - Adjustments:
Occupancy and equipment (k) (n) (p)		($878	)		($61	)		($932	)			($939	)		($2,115	)
Marketing and business development (k) (l) (n)		(5,164	)		(2,728	)		(2,043	)			(7,892	)		(3,268	)
Technology and information services (k) (l) (n)		(7,436	)		(73	)		(61	)			(7,509	)		(91	)
Professional services (k) (l) (n) (p)		(1,989	)		(1,402	)		(403	)			(3,391	)		(1,141	)
Fund administration and outsourced services (k) (l)		(17,282	)		(14,979	)		(15,680	)			(32,261	)		(32,192	)
Amortization and other acquisition-related costs		(95	)		(48	)		(15	)			(143	)		(30	)
Other (k) (l) (n) (p)		(4,435	)		(8,279	)		197				(12,714	)		(1,297	)
Subtotal Non-compensation adjustments		($37,279	)		($27,570	)		($18,937	)			($64,849	)		($40,134	)
Non-compensation expense, as adjusted:
Occupancy and equipment		$31,922			$31,712			$28,477				$63,634			$58,533
Marketing and business development		23,418			20,034			20,630				43,452			33,528
Technology and information services		43,934			43,967			42,006				87,901			79,907
Professional services		19,413			22,924			16,146				42,337			31,437
Fund administration and outsourced services		11,686			11,597			12,871				23,283			26,062
Amortization and other acquisition-related costs		—			—			—				—			—
Other		13,304			12,024			10,811				25,328			18,600
Non-compensation expense, as adjusted (d)		$143,677			$142,258			$130,941				$285,935			$248,067

This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for the corresponding U.S. GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with U.S. GAAP. For a detailed explanation of the adjustments made to the corresponding U.S. GAAP measures, see Notes to Financial Schedules.

See Notes to Financial Schedules

LAZARD LTD
Notes to Financial Schedules
(a)		Selected Summary Financial Information are non-GAAP measures. Lazard believes that presenting results and measures on an adjusted basis in conjunction with U.S. GAAP measures provides a meaningful and useful basis for comparison of its operating results across periods.
(b)		A non-GAAP measure which excludes (i) revenue related to noncontrolling interests (see (k) 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 (l) below), (iv) for the six month period ended June 30, 2023 and for the three month period ended March 31, 2023, asset impairment charges (see (m) below), and (v) interest expense primarily related to corporate financing activities.
(c)		A non-GAAP measure which excludes (i) (charges) credits related to the changes in the fair value of the compensation liability recorded in connection with Lazard Fund Interests and other similar deferred compensation arrangements, (ii) for the three and six month periods ended June 30, 2023 and for the three month period ended March 31, 2023, expenses associated with cost-saving initiatives (see (n) below), (iii) for the six month period ended June 30, 2023 and for the three month period ended March 31, 2023, expenses associated with senior management transition (see (o) below), and (iv) compensation and benefits related to noncontrolling interests (see (k) below).
(d)		A non-GAAP measure which excludes (i) for the three and six month periods ended June 30, 2023, expenses associated with cost-saving initiatives, (ii) for the three and six month periods ended June 30, 2022, expenses related to office space reorganization (see (p) below), (iii) expenses related to distribution fees, reimbursable deal costs in accordance with the revenue recognition guidance, bad debt expense, and other (see (l) below), (iv) amortization and other acquisition-related costs, and (v) expenses related to noncontrolling interests (see (k) below).
(e)		A non-GAAP measure which excludes (i) for the six month period ended June 30, 2023 and for the three month period ended March 31, 2023, a benefit pursuant to tax receivable agreement obligation ("TRA") (see (q) below), (ii) for the six month period ended June 30, 2023 and for the three month period ended March 31, 2023, asset impairment charges (see (m) below), (iii) for the three and six month period ended June 30, 2023 and for the three month period ended March 31, 2023, expenses associated with cost-saving initiatives (see (n) below), (iv) for the six month period ended June 30, 2023 and for the three month period ended March 31, 2023, expenses associated with senior management transition (see (o) below), (v) for the three month and six month periods ended June 30, 2022, expenses related to office space reorganization (see (p) below), (vi) net revenue and expenses related to noncontrolling interests (see (k) below), (vii) interest expense primarily related to corporate financing activities, and (viii) amortization and other acquisition-related costs.
(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 six month period ended June 30, 2023 and for the three month period ended March 31, 2023, a benefit pursuant to tax receivable agreement obligation ("TRA") (see (q) below), (ii) for the six month period ended June 30, 2023 and for the three month period ended March 31, 2023, asset impairment charges (see (m) below), (iii) for the three and six month periods ended June 30, 2023 and for the three month period ended March 31, 2023, expenses associated with cost-saving initiatives (see (n) below), (iv) for the six month period ended June 30, 2023 and for the three month period ended March 31, 2023, expenses associated with senior management transition (see (o) below), and (v) for the three and six month periods ended June 30, 2022, expenses related to office space reorganization (see (p) 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 period ended June 30, 2023, includes dilutive effect of weighted average number of incremental shares of common stock issuable from share-based incentive compensation.
(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 (benefit) for income taxes of $10,303, ($10,841), and $34,430 for the three month periods ended June 30, 2023, March 31, 2023, and June 30, 2022, respectively, ($538) and $73,491 for the six month periods ended June 30, 2023 and 2022 and the denominator of which is pre-tax income (loss) of $32,995, ($33,789), and $130,538 for the three month periods ended June 30, 2023, March 31, 2023, and June 30, 2022, respectively, ($794) and $284,291 for the six month periods ended June 30, 2023 and 2022.
(j)		For the six month period ended June 30, 2023, includes approximately $3.9 billion of net flows related to a wealth management acquisition.
(k)		Noncontrolling interests include revenue and expenses principally related to Edgewater, ESC Funds and a Special Purpose Acquisition Company.
(l)		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 and other receivables that are deemed uncollectible.
(m)		Represents certain asset impairment charges.
(n)		Represents expenses associated with cost-saving initiatives including closing certain offices over the course of 2023.
(o)		Represents expenses associated with senior management transition reflecting the departure of certain executive officers.
(p)		Represents building depreciation and other costs related to office space reorganization.
(q)		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 $40,435 for the six month period ended June 30, 2023.
NM		Not meaningful

 

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The Lazard Registered (A) Stock at the time of publication of the news with a fall of -0,99 % to 36,00EUR on NYSE stock exchange (27. Juli 2023, 02:04 Uhr).