Lazard Ltd Reports Full-Year and Fourth-Quarter 2020 Results
Record quarterly operating revenue of $849 million
Record Financial Advisory quarterly operating revenue of $509 million
Record year-end assets under management of $259 billion
NEW YORK–(BUSINESS WIRE)–Lazard Ltd (NYSE: LAZ) today reported annual operating revenue1 of $2,524 million for the year ended December 31, 2020. Net income, as adjusted2, was $410 million, or $3.60 per share (diluted) for the year. On a U.S. GAAP basis, net income for the year was $402 million, or $3.54 per share (diluted).
For the fourth quarter of 2020, net income, as adjusted, was $192 million, or $1.66 per share (diluted), a quarterly record. On a U.S. GAAP basis, net income for the fourth quarter was $190 million, or $1.64 per share (diluted).
“Our record quarterly results capped a remarkable year for Lazard. Our people overcame one of the most challenging environments in modern history to serve our clients with outstanding financial advice and solutions,” said Kenneth M. Jacobs, Chairman and Chief Executive Officer of Lazard. “We enter 2021 with momentum across our businesses globally and growth opportunities in which we continue to invest.”
|
($ in millions, except |
Year Ended |
|
|
|
Quarter Ended |
|||||||||
|
2020 |
|
2019 |
|
%’20-’19 |
|
|
|
2020 |
|
2019 |
|
%’20-’19 |
||
|
Net Income (loss) |
|
|
|
|
||||||||||
|
US GAAP |
$402 |
$287 |
40% |
|
$190 |
$77 |
147% |
|||||||
|
Per share, diluted |
$3.54 |
$2.44 |
45% |
|
$1.64 |
$0.67 |
145% |
|||||||
|
Adjusted2 |
$410 |
$385 |
7% |
|
$192 |
$105 |
83% |
|||||||
|
Per share, diluted |
$3.60 |
$3.28 |
10% |
|
$1.66 |
$0.91 |
82% |
|||||||
|
Operating Revenue1 |
|
|
|
|
||||||||||
|
Total operating revenue |
$2,524 |
$2,546 |
(1)% |
|
$849 |
$708 |
20% |
|||||||
|
Financial Advisory |
$1,403 |
$1,357 |
3% |
|
$509 |
$395 |
29% |
|||||||
|
Asset Management |
$1,111 |
$1,159 |
(4)% |
|
$336 |
$301 |
12% |
|||||||
|
AUM ($ in billions) |
|
|
|
|
|
|
|
|||||||
|
Period End |
$259 |
$248 |
4% |
|
||||||||||
|
Average |
$225 |
$234 |
(4)% |
|
$246 |
$238 |
3% |
|||||||
|
Note: Endnotes are on page 6 of this release. A reconciliation to U.S. GAAP is on page 14-15. |
OPERATING REVENUE
Operating revenue1 was $2,524 million for 2020, 1% lower than 2019. Fourth-quarter 2020 operating revenue was $849 million, a quarterly record and 20% higher than the fourth quarter of 2019.
Financial Advisory
Our Financial Advisory results include M&A Advisory, Capital Advisory, Capital Raising, Restructuring, Shareholder Advisory, Sovereign Advisory, and other strategic advisory work for clients.
For the full year of 2020, Financial Advisory operating revenue was $1,403 million, 3% higher than 2019.
For the fourth quarter of 2020, Financial Advisory operating revenue was $509 million, a quarterly record and 29% higher than the fourth quarter of 2019.
During and since the fourth quarter of 2020, Lazard has been engaged in significant and complex M&A transactions and other advisory assignments globally, including the following (clients are in italics): Exor in the $28.6 billion merger of Fiat Chrysler Automobiles with Peugeot; Gilead’s $21 billion acquisition of Immunomedics; Teladoc Health’s $18.5 billion merger with Livongo; Special Committee of the Board of Taubman Centers in Taubman’s $9.4 billion sale to Simon Property Group; Stonepeak’s $8.1 billion acquisition of Astound Broadband from TPG; Telefonica’s partnership with Allianz to deploy fiber in Germany involving expected overall investment of €5 billion; AVEVA’s $5 billion acquisition of OSIsoft; Iliad’s $4.3 billion acquisition of Play; Engie’s €3.4 billion sale of a 29.9% stake in Suez to Veolia; MassMutual’s $3.4 billion sale of its retirement plan business to Empower Retirement; Macquarie Infrastructure Corporation’s $2.7 billion sale of IMTT to Riverstone Holdings; Aimmune’s $2.6 billion sale to Nestlé Health Science; Google’s $2.1 billion acquisition of Fitbit; Accor in its taking full ownership of sbe hotel brands; and Gardner-Gibson’s sale to ICP Building Solutions Group.
Lazard has one of the world’s preeminent restructuring practices, with a long track record of successfully advising businesses and governments. During and since the fourth quarter of 2020, we have been engaged in a broad range of highly visible and complex restructuring and debt advisory assignments for debtors or creditors, including roles involving: 24 Hour Fitness; Abengoa; Belk; Bourbon; California Resources Corporation; CorpGroup; Corsair; Diamond Offshore Drilling; Express; FTS International; Gavilan Resources; Hi-Crush; JCPenney; Libbey; NMC Health; Peabody; Premier Oil; Prisa; Seadrill Limited; Transocean; Ursa Piceance; and Valaris. Lazard was the global leader in completed restructurings for 2020 (Source: Refinitiv).
Our Capital and Shareholder Advisory practices remain active globally, advising on a broad range of public and private assignments. Our Sovereign Advisory practice continues to be active advising governments, sovereign and sub-sovereign entities across developed and emerging markets.
For a list of Lazard’s publicly announced Financial Advisory transactions, 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 2020, Asset Management operating revenue was $1,111 million, 4% lower than 2019. For the fourth quarter of 2020, Asset Management operating revenue was $336 million, 12% higher than the fourth quarter of 2019.
Management fees and other revenue was $1,053 million for full-year 2020, 7% lower than 2019. For the fourth quarter of 2020, management fees and other revenue was $284 million, 1% lower than the fourth quarter of 2019, and 10% higher than the third quarter of 2020.
Average assets under management (AUM) for full-year 2020 was $225 billion, 4% lower than 2019. Average AUM for the fourth quarter of 2020 was $246 billion, 3% higher than the fourth quarter of 2019, and 9% higher than the third quarter of 2020.
AUM as of December 31, 2020 was a year-end record of $259 billion, up 4% from December 31, 2019, and up 14% from September 30, 2020. The sequential increase from September 30, 2020 was driven by market appreciation of $25.4 billion and foreign exchange appreciation of $5.8 billion, partially offset by net outflows of $286 million.
For the full year of 2020, incentive fees were $58 million, compared to $21 million for 2019. For the fourth quarter of 2020, incentive fees were $52 million, compared to $14 million for the fourth quarter of 2019.
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). We believe annual awarded compensation reflects the actual annual compensation cost more accurately than the GAAP measure of compensation cost, which includes applicable-year cash compensation and the amortization of deferred incentive compensation principally attributable to previous years’ deferred compensation. We believe that by managing our business using awarded compensation with a consistent deferral policy, we can better manage our compensation costs, increase our flexibility in the future and build shareholder value over time.
Adjusted compensation and benefits expense1 for 2020 was $1,502 million, 3% higher than 2019, with a consistent deferral policy. The corresponding adjusted compensation ratio1 was 59.5% for 2020, compared to 57.5% for 2019.
Awarded compensation expense1 for 2020 was $1,510 million, 3% higher than 2019. The corresponding awarded compensation ratio1 was 59.8% for 2020, compared to 57.7% for 2019.
We take a disciplined approach to compensation, and our goal is to maintain a compensation-to-operating revenue ratio over the cycle in the mid- to high-50s percentage range on both an awarded and adjusted basis, with consistent deferral policies.
Non-Compensation Expense
Adjusted non-compensation expense1 for 2020 was $432 million, 13% lower than 2019. The ratio of non-compensation expense to operating revenue1 was 17.1% for 2020, compared to 19.6% for 2019.
Adjusted non-compensation expense1 for the fourth quarter of 2020 was $117 million, 10% lower than the fourth quarter of 2019. The ratio of non-compensation expense to operating revenue1 was 13.7% for the fourth quarter of 2020, compared to 18.3% for the fourth quarter of 2019.
Our goal remains to achieve an adjusted non-compensation expense-to-operating revenue ratio over the cycle of 16% to 20%.
TAXES
The provision for taxes, on an adjusted basis1, was $104 million for full-year 2020 and $24 million for the fourth quarter of 2020. The effective tax rate on the same basis was 20.2% for full-year 2020, compared to 24.1% for full-year 2019.
CAPITAL MANAGEMENT AND BALANCE SHEET
Our primary capital management goals include managing debt and returning capital to shareholders through dividends and share repurchases.
In 2020, Lazard returned $365 million to shareholders, which included: $197 million in dividends; $95 million in share repurchases of our Class A common stock; and $73 million in satisfaction of employee tax obligations in lieu of share issuances upon vesting of equity grants.
During 2020, we repurchased 2.9 million shares of our Class A common stock for an average price of $32.70 per share. As of January 1, 2021, our remaining share repurchase authorization was $300 million.
On February 4, 2021, Lazard declared a quarterly dividend of $0.47 per share on its outstanding common stock. The dividend is payable on March 2, 2021, to stockholders of record on February 19, 2021.
Lazard’s financial position remains strong. As of December 31, 2020, our cash and cash equivalents were $1,390 million, and stockholders’ equity related to Lazard’s interests was $912 million.
CONFERENCE CALL
Lazard will host a conference call at 8:00 a.m. EST on February 5, 2021, to discuss the company’s financial results for the full year and fourth quarter of 2020. 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 (888) 204-4368 (U.S. and Canada) or +1 (323) 794-2551 (outside of the U.S. and Canada), 15 minutes prior to the start of the call.
A replay of the conference call will be available by 10:00 a.m. EST on February 5, 2021, via the Lazard Investor Relations website, or by dialing 1 (888) 203-1112 (U.S. and Canada) or +1 (719) 457-0820 (outside of the U.S. and Canada). The replay access code is 5881308.
ABOUT LAZARD
Lazard, one of the world’s preeminent financial advisory and asset management firms, operates from more than 40 cities and 25 countries in North America, Europe, Asia, Australia, Central and South America. With origins dating to 1848, the firm provides advice on mergers and acquisitions, strategic matters, restructuring and capital structure, capital raising and corporate finance, as well as asset management services to corporations, partnerships, institutions, governments and individuals. For more information on Lazard, please visit www.lazard.com. Follow Lazard at @Lazard.
Cautionary Note Regarding Forward-Looking Statements:
This press release contains forward-looking statements. In some cases, you can identify these statements by forward-looking words such as “may”, “might”, “will”, “should”, “could”, “would”, “expect”, “plan”, “anticipate”, “believe”, “estimate”, “predict”, “potential”, “target,” “goal”, or “continue”, and the negative of these terms and other comparable terminology. These forward-looking statements, which are subject to known and unknown risks, uncertainties and assumptions about us, may include projections of our future financial performance based on our growth strategies, business plans and initiatives and anticipated trends in our business. These 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 U.S. GAAP results, is the most meaningful and useful way to compare our operating results across periods.
2 Fourth-quarter and full-year 2020 adjusted results1 exclude pre-tax charges of $4.2 million and $12.6 million, respectively, of costs relating to an office space reorganization and $0.4 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 charges resulted in a net charge of $2.6 million, or $0.02 (diluted) per share, for the fourth quarter, and a net charge of $7.8 million, or $0.07 (diluted) per share, for the full year of 2020.
LAZ-EPE
| LAZARD LTD | ||||||||||||
| UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS | ||||||||||||
| (U.S. GAAP) | ||||||||||||
|
Three Months Ended |
|
|
|
% Change From |
||||||||
|
December 31, |
|
September 30, |
|
December 31, |
|
|
|
September 30, |
|
December 31, |
||
| ($ in thousands, except per share data) |
2020 |
|
2020 |
|
2019 |
|
|
|
2020 |
|
2019 |
|
| Total revenue |
$898,326 |
$598,022 |
$743,406 |
50% |
|
21% |
||||||
| Interest expense |
(20,172) |
(20,344) |
(22,065) |
|
|
|
||||||
| Net revenue |
878,154 |
577,678 |
721,341 |
52% |
|
22% |
||||||
| Operating expenses: |
|
|
|
|||||||||
| Compensation and benefits |
524,736 |
354,625 |
427,308 |
48% |
|
23% |
||||||
|
|
|
|
||||||||||
| Occupancy and equipment |
33,592 |
31,318 |
34,045 |
|
|
|
||||||
| Marketing and business development |
8,161 |
7,562 |
30,947 |
|
|
|
||||||
| Technology and information services |
36,100 |
33,457 |
38,783 |
|
|
|
||||||
| Professional services |
20,330 |
14,701 |
23,386 |
|
|
|
||||||
| Fund administration and outsourced services |
26,431 |
26,196 |
28,201 |
|
|
|
||||||
| Amortization and other acquisition-related costs |
436 |
458 |
9,876 |
|
|
|
||||||
| Other |
11,308 |
4,681 |
10,321 |
|
|
|
||||||
| Subtotal |
136,358 |
118,373 |
175,559 |
15% |
|
(22%) |
||||||
| Benefit pursuant to tax receivable agreement |
(439) |
– |
(503) |
|
|
|
||||||
| Operating expenses |
660,655 |
472,998 |
602,364 |
40% |
|
10% |
||||||
|
|
|
|
||||||||||
| Operating income |
217,499 |
104,680 |
118,977 |
108% |
|
83% |
||||||
|
|
|
|
||||||||||
| Provision for income taxes |
22,729 |
28,165 |
39,446 |
(19%) |
|
(42%) |
||||||
| Net income |
194,770 |
76,515 |
79,531 |
155% |
|
145% |
||||||
| Net income attributable to noncontrolling interests |
4,881 |
1,423 |
2,554 |
|
|
|
||||||
| Net income attributable to Lazard Ltd |
$189,889 |
$75,092 |
$76,977 |
153% |
|
147% |
||||||
|
|
|
|
||||||||||
| Attributable to Lazard Ltd Common Stockholders: |
|
|
|
|||||||||
| Weighted average shares outstanding: |
|
|
|
|||||||||
| Basic |
107,316,315 |
107,168,615 |
107,548,260 |
0% |
|
(0%) |
||||||
| Diluted |
115,144,030 |
113,181,564 |
113,442,101 |
2% |
|
2% |
||||||
|
|
|
|
||||||||||
| Net income per share: |
|
|
|
|||||||||
| Basic |
$1.73 |
$0.69 |
$0.70 |
151% |
|
147% |
||||||
| Diluted |
$1.64 |
$0.66 |
$0.67 |
148% |
|
145% |
||||||
| LAZARD LTD | ||||||||
| UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS | ||||||||
| (U.S. GAAP) | ||||||||
| Year Ended | ||||||||
|
December 31, |
December 31, |
|
||||||
| ($ in thousands, except per share data) |
2020 |
2019 |
% Change |
|||||
|
|
||||||||
| Total revenue |
$2,646,769 |
$2,666,958 |
(1%) |
|||||
| Interest expense |
(80,631) |
(80,185) |
|
|||||
| Net revenue |
2,566,138 |
2,586,773 |
(1%) |
|||||
| Operating expenses: |
|
|||||||
| Compensation and benefits |
1,550,684 |
1,563,395 |
(1%) |
|||||
|
|
||||||||
| Occupancy and equipment |
127,682 |
123,149 |
|
|||||
| Marketing and business development |
42,426 |
115,033 |
|
|||||
| Technology and information services |
133,544 |
143,739 |
|
|||||
| Professional services |
66,304 |
71,852 |
|
|||||
| Fund administration and outsourced services |
103,070 |
114,049 |
|
|||||
| Amortization and other acquisition-related costs |
1,795 |
19,410 |
|
|||||
| Other |
38,931 |
43,951 |
|
|||||
| Subtotal |
513,752 |
631,183 |
(19%) |
|||||
| Benefit pursuant to tax receivable agreement |
(439) |
(503) |
|
|||||
| Operating expenses |
2,063,997 |
2,194,075 |
(6%) |
|||||
|
|
||||||||
| Operating income |
502,141 |
392,698 |
28% |
|||||
|
|
||||||||
| Provision for income taxes |
99,449 |
94,982 |
5% |
|||||
| Net income |
402,692 |
297,716 |
35% |
|||||
| Net income attributable to noncontrolling interests |
231 |
11,216 |
|
|||||
| Net income attributable to Lazard Ltd |
$402,461 |
$286,500 |
40% |
|||||
|
|
||||||||
| Attributable to Lazard Ltd Common Stockholders: |
|
|||||||
| Weighted average shares outstanding: |
|
|||||||
| Basic |
106,862,739 |
110,189,862 |
(3%) |
|||||
| Diluted |
113,483,380 |
116,079,806 |
(2%) |
|||||
|
|
||||||||
| Net income per share: |
|
|||||||
| Basic |
$3.69 |
$2.57 |
44% |
|||||
| Diluted |
$3.54 |
$2.44 |
45% |
|||||
| LAZARD LTD | ||||
| UNAUDITED CONDENSED CONSOLIDATED | ||||
| STATEMENT OF FINANCIAL CONDITION | ||||
| (U.S. GAAP) | ||||
|
December 31, |
|
December 31, |
||
| ($ in thousands) |
2020 |
|
2019 |
|
| ASSETS | ||||
| Cash and cash equivalents |
$1,389,876 |
$1,231,593 |
||
| Deposits with banks and short-term investments |
1,134,463 |
1,180,686 |
||
| Cash deposited with clearing organizations and other segregated cash |
44,488 |
43,280 |
||
| Receivables |
743,141 |
663,138 |
||
| Investments |
658,532 |
531,995 |
||
| Goodwill and other intangible assets |
384,071 |
373,594 |
||
| Operating lease right-of-use assets |
513,923 |
551,504 |
||
| Deferred tax assets |
538,448 |
586,750 |
||
| Other assets |
564,919 |
477,041 |
||
| Total Assets |
$5,971,861 |
$5,639,581 |
||
| LIABILITIES & STOCKHOLDERS’ EQUITY | ||||
| Liabilities | ||||
| Deposits and other customer payables |
$1,201,150 |
$1,246,200 |
||
| Accrued compensation and benefits |
734,544 |
602,777 |
||
| Operating lease liabilities |
606,963 |
644,345 |
||
| Tax receivable agreement obligation |
221,451 |
247,344 |
||
| Senior debt |
1,682,741 |
1,679,562 |
||
| Other liabilities |
525,579 |
537,779 |
||
| Total liabilities |
4,972,428 |
4,958,007 |
||
| Commitments and contingencies | ||||
| Stockholders’ equity | ||||
| Preferred stock, par value $.01 per share |
– |
– |
||
| Common stock, par value $.01 per share |
1,128 |
1,128 |
||
| Additional paid-in capital |
135,439 |
41,020 |
||
| Retained earnings |
1,295,386 |
1,193,570 |
||
| Accumulated other comprehensive loss, net of tax |
(238,368) |
(293,648) |
||
| Subtotal |
1,193,585 |
942,070 |
||
| Class A common stock held by subsidiaries, at cost |
(281,813) |
(332,079) |
||
| Total Lazard Ltd stockholders’ equity |
911,772 |
609,991 |
||
| Noncontrolling interests |
87,661 |
71,583 |
||
| Total stockholders’ equity |
999,433 |
681,574 |
||
| Total liabilities and stockholders’ equity |
$5,971,861 |
$5,639,581 |
||
| LAZARD LTD | ||||||||||||||
| SELECTED SUMMARY FINANCIAL INFORMATION (a) | ||||||||||||||
| (Non-GAAP – unaudited) | ||||||||||||||
|
Three Months Ended |
|
|
% Change From |
|||||||||||
|
December 31, |
|
September 30, |
|
December 31, |
|
|
September 30, |
|
December 31, |
|||||
| ($ in thousands, except per share data) |
2020 |
|
2020 |
|
2019 |
|
|
2020 |
|
2019 |
||||
| Revenues: | ||||||||||||||
| Financial Advisory |
$508,626 |
$306,977 |
$394,689 |
66% |
|
29% |
||||||||
| Asset Management |
336,152 |
261,047 |
301,046 |
29% |
|
12% |
||||||||
| Corporate |
3,990 |
1,023 |
12,275 |
290% |
|
(67%) |
||||||||
|
|
|
|
||||||||||||
| Operating revenue (b) |
$848,768 |
$569,047 |
$708,010 |
49% |
|
20% |
||||||||
|
|
|
|
||||||||||||
| Expenses: |
|
|
|
|||||||||||
|
|
|
|
||||||||||||
| Adjusted compensation and benefits expense (c) |
$497,260 |
$341,428 |
$407,106 |
46% |
|
22% |
||||||||
| Ratio of adjusted compensation to operating revenue |
58.6% |
60.0% |
57.5% |
|
|
|
||||||||
|
|
|
|
||||||||||||
| Non-compensation expense (d) |
$116,568 |
$103,081 |
$129,615 |
13% |
|
(10%) |
||||||||
| Ratio of non-compensation to operating revenue |
13.7% |
18.1% |
18.3% |
|
|
|
||||||||
|
|
|
|
||||||||||||
| Earnings: |
|
|
|
|||||||||||
|
|
|
|
||||||||||||
| Earnings from operations (e) |
$234,940 |
$124,538 |
$171,289 |
89% |
|
37% |
||||||||
| Operating margin (f) |
27.7% |
21.9% |
24.2% |
|
|
|
||||||||
|
|
|
|
||||||||||||
| Adjusted net income (g) |
$192,444 |
$76,102 |
$105,268 |
153% |
|
83% |
||||||||
|
|
|
|
||||||||||||
| Diluted adjusted net income per share |
$1.66 |
$0.67 |
$0.91 |
148% |
|
82% |
||||||||
|
|
|
|
||||||||||||
| Diluted weighted average shares (h) |
115,831,033 |
113,780,625 |
115,522,380 |
2% |
|
0% |
||||||||
| Effective tax rate (i) |
11.1% |
27.9% |
29.7% |
|||||||||||
| This presentation includes non-U.S. GAAP (“non-GAAP”) measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for the corresponding U.S. GAAP measures, and should be read only in conjunction with our consolidated financial statements prepared in accordance with U.S. GAAP. For a detailed explanation of the adjustments made to the corresponding U.S. GAAP measures, see Reconciliation of U.S. GAAP to Selected Summary Financial Information and Notes to Financial Schedules. |
| LAZARD LTD | ||||||||
| SELECTED SUMMARY FINANCIAL INFORMATION (a) | ||||||||
| (Non-GAAP – unaudited) | ||||||||
| Year Ended | ||||||||
|
December 31, |
|
December 31, |
|
|
|
|||
| ($ in thousands, except per share data) |
2020 |
|
2019 |
|
|
% Change |
||
| Revenues: | ||||||||
| Financial Advisory |
$1,403,282 |
$1,357,398 |
3% |
|||||
| Asset Management |
1,111,498 |
1,158,645 |
(4%) |
|||||
| Corporate |
8,760 |
29,919 |
(71%) |
|||||
|
|
||||||||
| Operating revenue (b) |
$2,523,540 |
$2,545,962 |
(1%) |
|||||
|
|
||||||||
| Expenses: |
|
|||||||
|
|
||||||||
| Adjusted compensation and benefits expense (c) |
$1,502,123 |
$1,463,928 |
3% |
|||||
| Ratio of adjusted compensation to operating revenue |
59.5% |
57.5% |
|
|||||
|
|
||||||||
| Non-compensation expense (d) |
$431,898 |
$498,551 |
(13%) |
|||||
| Ratio of non-compensation to operating revenue |
17.1% |
19.6% |
|
|||||
|
|
||||||||
| Earnings: |
|
|||||||
|
|
||||||||
| Earnings from operations (e) |
$589,519 |
$583,483 |
1% |
|||||
| Operating margin (f) |
23.4% |
22.9% |
|
|||||
|
|
||||||||
| Adjusted net income (g) |
$410,249 |
$384,811 |
7% |
|||||
|
|
||||||||
| Diluted adjusted net income per share |
$3.60 |
$3.28 |
10% |
|||||
|
|
||||||||
| Diluted weighted average shares (h) |
113,904,200 |
117,348,401 |
(3%) |
|||||
| Effective tax rate (i) |
20.2% |
24.1% |
||||||
| This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for the corresponding U.S. GAAP measures, and should be read only in conjunction with our consolidated financial statements prepared in accordance with U.S. GAAP. For a detailed explanation of the adjustments made to the corresponding U.S. GAAP measures, see Reconciliation of U.S. GAAP to Selected Summary Financial Information and Notes to Financial Schedules. |
| LAZARD LTD | ||||||||||||||||||
| COMPENSATION AND BENEFITS – ANALYSIS | ||||||||||||||||||
| (unaudited) | ||||||||||||||||||
| ($ in millions except share price) | ||||||||||||||||||
|
2013 |
2014 |
2015 |
2016 |
2017 |
2018 |
2019 |
2020 |
|||||||||||
| ADJUSTED U.S. GAAP BASIS (c) | ||||||||||||||||||
| Base salary |
$339.3 |
$354.0 |
$355.8 |
$372.7 |
$404.9 |
$431.9 |
$446.9 |
$455.0 |
||||||||||
| Benefits and other |
191.2 |
215.6 |
228.3 |
201.9 |
243.4 |
263.6 |
258.3 |
227.7 |
||||||||||
| Cash incentive compensation |
368.5 |
432.9 |
413.9 |
398.3 |
465.5 |
445.5 |
390.8 |
435.3 |
||||||||||
| Total cash compensation, benefits and other |
899.0 |
1,002.5 |
998.0 |
972.9 |
1,113.8 |
1,141.0 |
1,096.0 |
1,118.0 |
||||||||||
| Amortization of deferred incentive awards |
297.6 |
299.2 |
320.8 |
352.4 |
367.3 |
375.6 |
367.9 |
384.1 |
||||||||||
| Compensation and benefits – Adjusted U.S. GAAP basis (j) |
$1,196.6 |
$1,301.7 |
$1,318.8 |
$1,325.3 |
$1,481.1 |
$1,516.6 |
$1,463.9 |
$1,502.1 |
||||||||||
| % of Operating Revenue |
58.8% |
55.6% |
55.4% |
56.5% |
55.8% |
55.1% |
57.5% |
59.5% |
||||||||||
| AWARDED BASIS | ||||||||||||||||||
| Total cash compensation and benefits (per above) |
$899.0 |
$1,002.5 |
$998.0 |
$972.9 |
$1,113.8 |
$1,141.0 |
$1,096.0 |
$1,118.0 |
||||||||||
| Deferred year-end incentive awards |
291.0 |
325.2 |
336.1 |
342.4 |
351.0 |
377.8 |
361.3 |
364.4 |
||||||||||
| Compensation and benefits before sign-on and other | ||||||||||||||||||
| special deferred incentive awards |
1,190.0 |
1,327.7 |
1,334.1 |
1,315.3 |
1,464.8 |
1,518.8 |
1,457.3 |
1,482.4 |
||||||||||
| Sign-on and other special deferred incentive awards (k) |
22.1 |
14.2 |
26.4 |
29.9 |
36.2 |
45.7 |
37.6 |
54.9 |
||||||||||
| Total Compensation and benefits – Notional |
1,212.1 |
1,341.9 |
1,360.5 |
1,345.2 |
1,501.0 |
1,564.5 |
1,494.9 |
1,537.3 |
||||||||||
| Adjustment for actual/estimated forfeitures (l) |
(27.3) |
(25.4) |
(27.2) |
(27.9) |
(25.3) |
(27.5) |
(25.9) |
(27.3) |
||||||||||
| Compensation and benefits – Awarded (m) |
$1,184.8 |
$1,316.5 |
$1,333.3 |
$1,317.3 |
$1,475.7 |
$1,537.0 |
$1,469.0 |
$1,510.0 |
||||||||||
| % of Operating Revenue – Awarded Basis (m) |
58.2% |
56.3% |
56.0% |
56.2% |
55.6% |
55.8% |
57.7% |
59.8% |
||||||||||
| Memo: | ||||||||||||||||||
| Total value of deferred equity-based year end | ||||||||||||||||||
| incentive awards |
$180.9 |
$219.0 |
$267.7 |
$234.8 |
$216.4 |
$253.8 |
$165.5 |
TBD | ||||||||||
| Equity-based year end awards – share equivalents (‘000) |
4,146 |
4,329 |
7,778 |
5,395 |
3,850 |
6,735 |
3,858 |
TBD | ||||||||||
| Price at issuance |
$43.62 |
$50.60 |
$34.42 |
$43.43 |
$56.22 |
$37.69 |
$42.89 |
TBD | ||||||||||
| Deferred compensation awards ratio (n) |
24.5% |
24.5% |
25.2% |
26.0% |
24.0% |
24.9% |
24.8% |
24.6% |
||||||||||
| Operating revenue |
$2,034.3 |
$2,340.2 |
$2,380.1 |
$2,344.3 |
$2,654.5 |
$2,754.8 |
$2,546.0 |
$2,523.5 |
||||||||||
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