Upgrade to SI Premium - Free Trial

Lazard Ltd Reports First-Quarter 2015 Results

April 23, 2015 7:00 AM

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

Highlights

($ in millions, except

per share data and AUM)

Quarter Ended

March 31,

2015

2014

%’15-’14

As Adjusted1,2

Operating revenue $581 $540 8%
Financial Advisory $302 $275 9%
Asset Management $271 $262 3%
Net income $103 $81 27%
Diluted net income per share $0.77 $0.61 26%

U.S. GAAP

Net income $56 $81 (31)%
Diluted net income per share $0.42 $0.61 (31)%

Assets Under Management

Ending AUM ($ in billions) $199 $189 5%
Average AUM ($ in billions) $198 $186 7%

Note: Endnotes are on page 12 of this release. A reconciliation of adjusted GAAP to U.S. GAAP is on page 17.

Lazard Ltd (NYSE: LAZ) today reported operating revenue1 of $581 million for the quarter ended March 31, 2015. Net income, as adjusted1, was $103 million, or $0.77 (diluted) per share for the quarter. These results exclude a pre-tax charge of $63 million relating to a debt refinancing2.

First quarter 2015 net income on a U.S. GAAP basis, including the pre-tax charge, was $56 million, or $0.42 (diluted) per share. A reconciliation of our U.S. GAAP results to the adjusted results is presented on page 17 of this press release.

“Our Financial Advisory and Asset Management businesses continue their strong performance,” said Kenneth M. Jacobs, Chairman and Chief Executive Officer of Lazard. “We are focused on serving clients, reinforcing our global franchise and building shareholder value.”

“Lazard’s increased market share of large, complex and cross-border transactions reflects the unrivaled scale and depth of our advisory expertise,” said Mr. Jacobs. “Asset Management’s growth in volatile market conditions underscores the quality of our investment platforms, people and pattern of long-term performance.”

“In the first quarter, we refinanced and repaid a portion of Lazard’s long-term debt, significantly reducing our interest costs,” said Matthieu Bucaille, Chief Financial Officer of Lazard. “Consistent with our capital management objectives, we have increased the quarterly dividend by 17%, the fifth increase in as many years.”

OPERATING REVENUE

Financial Advisory

In the text portion of this press release, we present our Financial Advisory results as Strategic Advisory and Restructuring. Strategic Advisory includes 1) M&A and Other Advisory (Other includes Capital Advisory and Sovereign Advisory) and 2) Capital Raising (includes Capital Markets Advisory and Private Fund Advisory).

Financial Advisory operating revenue was a first-quarter record of $302 million, 9% higher than the first quarter of 2014.

Strategic Advisory operating revenue was a first-quarter record of $278 million, 13% higher than the first quarter of 2014, driven by M&A and Other Advisory revenue of $261 million, also a first-quarter record and 9% higher than the first quarter of 2014.

During 2015, Lazard has remained engaged in highly visible, complex M&A transactions and other advisory assignments, including cross-border transactions, spin-offs, distressed asset sales, and capital and sovereign advisory, in the Americas, Europe, Australia, Africa and Asia.

Among the major M&A transactions that were completed during the first quarter of 2015 were the following (clients are in italics): GlaxoSmithKline on its three-part transaction with Novartis in consumer, oncology and vaccines; Klépierre’s €7.3 billion acquisition of Corio; Rockwood's $6.2 billion sale to Albemarle; LabCorp’s $6.2 billion acquisition of Covance; Shire’s $5.2 billion acquisition of NPS Pharmaceuticals; Philips’ $1.2 billion acquisition of Volcano; and Mitsubishi Heavy Industries’ establishment of a joint venture with Siemens.

Lazard advised or continues to advise on a number of large and complex transactions, including the following announced year to date: Heinz’s combination with Kraft Foods, valuing the new entity at $115 billion; RockTenn’s $21.0 billion merger with MeadWestvaco; Iberdrola in the $17.9 billion combination of Iberdrola USA and UIL; Pfizer’s $17.0 billion acquisition of Hospira; Toll Holdings’ A$8.0 billion sale to Japan Post; TNT Express on the €4.4 billion public offer by FedEx; Tenet Healthcare’s formation of a JV with United Surgical Partners and acquisition of Aspen Healthcare for a combined value of $4.3 billion; Canon’s ¥333.7 billion recommended offer for Axis; and Wood Mackenzie’s £1.9 billion sale to Verisk Analytics.

In Capital Advisory, we continued to provide advice regarding balance sheet issues to public and private clients globally, including: ENAIRE on the €4.3 billion IPO of AENA Aeropuertos; Merlin Entertainments on its £1.3 billion refinancing; EQT Partners and Goldman Sachs Merchant Banking Division on their secondary disposal of a $1.1 billion stake in ISS A/S; Action Holding B.V. on its €840 million debt refinancing; Cheniere Energy on its registered direct offering of $625 million of convertible notes; and Gruppo Coin, a BC Partners portfolio company, on the €446 million IPO of OVS.

Our Sovereign Advisory business remained active worldwide, including advising on new assignments for the Finance Ministries of Greece and Ukraine and The Arab Republic of Egypt.

Restructuring operating revenue was $23 million, compared to $30 million for first quarter of 2014. Restructuring revenue continues to be generally in line with the industry-wide low level of corporate restructuring activity. Lazard remains the leading advisor in global announced restructurings. (Source: Thomson Reuters)

During and since the first quarter of 2015 we have been engaged in many of the most highly visible and complex restructuring and debt advisory assignments, including advising on Chapter 11 or similar bankruptcies for RadioShack and Standard Register; Sorgenia on its debt restructuring; Target Canada on the disposition of its real estate assets; and Sabine Oil & Gas on strategic alternatives related to its capital structure.

Please see a more complete list of Strategic Advisory transactions on which Lazard advised in the first quarter, or continued to advise or completed since March 31, 2015, as well as Restructuring assignments, on pages 8-11 of this release.

Asset Management

Asset Management operating revenue was a first-quarter record of $271 million, 3% higher than the first quarter of 2014.

Management fees were a first-quarter record of $252 million, 5% higher than the first quarter of 2014, and 3% lower than the fourth quarter of 2014. The sequential decrease was primarily driven by changes in the mix of our assets under management (AUM).

Incentive fees during the period were $6 million, compared to $10 million for the first quarter of 2014.

Average AUM for the first quarter of 2015 was $198 billion, 7% higher than average AUM for the first quarter of 2014, and 1% higher than the fourth quarter of 2014. AUM as of March 31, 2015, was $199 billion, up 1% from December 31, 2014, driven by net inflows and market appreciation, partially offset by foreign exchange adjustments. The net inflows were $1.0 billion, driven by a broad range of equity and fixed-income strategies.

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.

For the first quarter of 2015, we accrued compensation expense at an adjusted GAAP compensation1 ratio of 55.6%, which is consistent with the full-year 2014 ratio, and compares to the first-quarter 2014 ratio of 58.8%.

We accrued adjusted GAAP compensation and benefits expense of $323 million for the first quarter of 2015, compared to $318 million for the first quarter of 2014.

Our goal remains to grow annual awarded compensation expense at a slower rate than revenue growth, and to achieve a compensation-to-operating revenue ratio over the cycle in the mid- to high-50s percentage range on both an awarded and adjusted GAAP basis, with consistent deferral policies.

Non-Compensation Expense

Adjusted non-compensation expense1, excluding the debt refinancing charge2, was $106 million for the first quarter of 2015, compared to $103 million for the first quarter of 2014.

The ratio of adjusted non-compensation expense to operating revenue was 18.3% for the first quarter of 2015, compared to 19.1% for the first quarter of 2014 and 18.8% for full-year 2014.

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 $34 million for the first quarter of 2015. The effective tax rate on the same basis was 25.0% for the first quarter of 2015, compared to 21.1% for the first quarter of 2014 and 19.5% for full-year 2014.

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 first quarter of 2015, Lazard returned $343 million to shareholders, which included: $158 million in dividends; $83 million in share repurchases of our Class A common stock; and $102 million in satisfaction of employee tax obligations in lieu of share issuances upon vesting of equity grants. As of March 31, 2015, we had repurchased 1.7 million shares at an average price of $49.46 per share.

In the first quarter of 2015, we refinanced a portion of Lazard Group LLC’s outstanding debt in order to reduce both our total annual interest expense and our total debt level2. As a result of the refinancing, we expect interest expense savings of approximately $14 million in 2015.

On April 22, 2015, our Board of Directors voted to increase the quarterly dividend on Lazard’s outstanding Class A common stock by 17%, to $0.35 per share. The dividend is payable on May 15, 2015, to stockholders of record on May 4, 2015.

Lazard’s financial position remains strong. As of March 31, 2015, our cash and cash equivalents were $606 million, and stockholders’ equity related to Lazard’s interests was $473 million.

***

CONFERENCE CALL

Lazard will host a conference call at 8:00 a.m. EDT on Thursday, April 23, 2015, to discuss the company’s financial results for the first quarter of 2015. 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) 516-2435 (U.S. and Canada) or +1 (719) 325-2133 (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. EDT, Thursday, April 23, 2015, 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 6183715.

ABOUT LAZARD

Lazard, one of the world's preeminent financial advisory and asset management firms, operates from 43 cities across 27 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.

***

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 are not historical facts but instead represent only our expectations regarding future results or events, many of which, by their nature, are inherently uncertain and outside of our control. Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. 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 disclosed from time to time in our reports on Forms 10-Q and 8-K, including the following:

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 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 hedge funds and mutual funds and other investment products managed by Lazard Asset Management LLC and its subsidiaries. Investors can link to Lazard and its operating company websites through www.lazard.com.

***

FINANCIAL ADVISORY ASSIGNMENTS

Mergers and Acquisitions (Completed in the first quarter of 2015)

Among the large, publicly announced M&A Advisory transactions or assignments completed during the first quarter of 2015 on which Lazard advised were the following:

Mergers and Acquisitions (Announced)

Among the ongoing, large, publicly announced M&A transactions and assignments on which Lazard advised during or since the 2015 first quarter, or completed since March 31, 2015, are the following:

* Transaction completed since March 31, 2015

Capital Advisory

Among the publicly announced Capital Advisory transactions or assignments on which Lazard completed or advised during or since the first quarter of 2015 were the following:

Sovereign Advisory

Among the publicly announced Sovereign Advisory assignments on which Lazard advised during or since the first quarter of 2015 were the following:

Restructuring and Debt Advisory Assignments

Restructuring and debtor or creditor advisory assignments completed during the first quarter of 2015 on which Lazard advised include: Liberty Tire Recycling in connection with its financial restructuring, Nautilus Holdings and Global Geophysical Services in connection with their Chapter 11 restructurings, and Sorgenia on its debt restructuring.

Notable Chapter 11 or similar bankruptcies on which Lazard advised debtors or creditors, or related parties, during or since the first quarter of 2015, are the following:

Among other publicly announced restructuring and debt advisory assignments on which Lazard has advised debtors or creditors during or since the first quarter of 2015, are the following:

* Assignment completed since March 31, 2015

***

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 During the first quarter, Lazard Ltd’s subsidiary Lazard Group LLC completed a refinancing of a substantial majority of the outstanding $548 million of 6.85% senior notes maturing on June 15, 2017 (the “2017 Notes”) by issuing a redemption notice for $450 million of the 2017 Notes and by issuing $400 million of 3.75% senior notes maturing in 2025. The charge of $63 million related to the debt refinancing is comprised primarily of an extinguishment loss of $60 million and other related costs.
3 In the first quarter of 2015, Lazard returned $343 million to shareholders, which included: $158 million in dividends; $83 million in share repurchases of our Class A common stock; and $102 million in satisfaction of employee tax obligations in lieu of share issuances upon vesting of equity grants.

LAZ-EPE

LAZARD LTD

SELECTED SUMMARY FINANCIAL INFORMATION (a)

(Non-GAAP - unaudited)

Three Months Ended % Change From
March 31, December 31, March 31, December 31, March 31,
($ in thousands, except per share data) 2015 2014 2014 2014 2014
Revenues:
Financial Advisory
M&A and Other Advisory $260,804 $297,160 $239,144 (12%) 9%
Capital Raising 17,584 30,511 6,216 (42%) NM
Strategic Advisory 278,388 327,671 245,360 (15%) 13%
Restructuring 23,146 31,709 30,136 (27%) (23%)
Total 301,534 359,380 275,496 (16%) 9%
Asset Management
Management fees 252,087 258,750 239,523 (3%) 5%
Incentive fees 6,283 13,913 10,378 (55%) (39%)
Other 12,707 11,094 12,400 15% 2%
Total 271,077 283,757 262,301 (4%) 3%
Corporate 8,345 2,664 2,427 NM NM
Operating revenue (b) $580,956 $645,801 $540,224 (10%) 8%
Expenses:
Compensation and benefits expense (c) $323,149 $304,956 $317,791 6% 2%
Ratio of compensation to operating revenue 55.6% 47.2% 58.8%
Non-compensation expense (d) $106,434 $116,816 $103,001 (9%) 3%
Ratio of non-compensation to operating revenue 18.3% 18.1% 19.1%
Earnings:
Earnings from operations (e) $151,373 $224,029 $119,432 (32%) 27%
Operating margin (f) 26.1% 34.7% 22.1%
Net income (g) $103,034 $172,361 $81,275 (40%) 27%
Diluted net income per share $0.77 $1.29 $0.61 (40%) 26%
Diluted weighted average shares 133,735,946 134,084,160 134,025,991 (0%) (0%)
Effective tax rate (h) 25.0% 17.3% 21.1%

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

LAZARD LTD
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(U.S. GAAP)
Three Months Ended % Change From
March 31, December 31, March 31, December 31,

March 31,

($ in thousands, except per share data) 2015 2014 2014 2014 2014
Total revenue $593,885 $649,336 $549,353 (9%) 8%
Interest expense (16,136 ) (15,396 ) (15,953 )
Net revenue 577,749 633,940 533,400 (9%) 8%
Operating expenses:
Compensation and benefits 328,502 307,505 321,565 7% 2%
Occupancy and equipment 27,339 25,471 28,312
Marketing and business development 19,190 28,775 19,233
Technology and information services 22,893 22,654 23,487
Professional services 11,459 13,648 7,591
Fund administration and outsourced services 16,148 16,967 15,454
Amortization of intangible assets related to acquisitions 1,033 441 1,220
Other 69,987 9,643 9,358
Subtotal 168,049 117,599 104,655 43% 61%
Provision (benefit) pursuant to tax receivable agreement 6,535 9,243 -
Operating expenses 503,086 434,347 426,220 16% 18%
Operating income 74,663 199,593 107,180 (63%) (30%)
Provision for income taxes 12,017 26,788 21,751 (55%) (45%)
Net income 62,646 172,805 85,429 (64%) (27%)
Net income attributable to noncontrolling interests 6,693 421 4,587
Net income attributable to Lazard Ltd $55,953 $172,384 $80,842 (68%) (31%)
Attributable to Lazard Ltd Common Stockholders:
Weighted average shares outstanding:
Basic 123,655,689 122,307,447 121,776,207 1% 2%
Diluted 133,735,946 134,084,160 134,025,991 (0%) (0%)
Net income per share:
Basic $0.45 $1.41 $0.66 (68%) (32%)
Diluted $0.42 $1.29 $0.61 (67%) (31%)
LAZARD LTD
UNAUDITED CONDENSED CONSOLIDATED
STATEMENT OF FINANCIAL CONDITION
(U.S. GAAP)

March 31,

December 31,
($ in thousands) 2015 2014

ASSETS

Cash and cash equivalents $ 606,336 $ 1,066,580
Deposits with banks and short-term investments 217,626 207,760
Cash deposited with clearing organizations and other segregated cash 46,700 43,290
Receivables 593,841 557,596
Investments 486,746 620,352
Goodwill and other intangible assets 335,966 347,438
Other assets 540,516 489,220
Total Assets $ 2,827,731 $ 3,332,236

LIABILITIES & STOCKHOLDERS' EQUITY

Liabilities
Deposits and other customer payables $ 377,511 $ 314,284
Accrued compensation and benefits 316,553 606,290
Senior debt 998,350 1,048,350
Other liabilities 598,012 593,255
Total liabilities 2,290,426 2,562,179
Commitments and contingencies
Stockholders' equity
Preferred stock, par value $.01 per share - -
Common stock, par value $.01 per share 1,298 1,298
Additional paid-in capital 509,383 702,800
Retained earnings 338,165 464,655
Accumulated other comprehensive loss, net of tax (233,494 ) (200,766 )
Subtotal 615,352 967,987
Class A common stock held by subsidiaries, at cost (142,269 ) (261,243 )
Total Lazard Ltd stockholders' equity 473,083 706,744
Noncontrolling interests 64,222 63,313
Total stockholders' equity 537,305 770,057
Total liabilities and stockholders' equity $ 2,827,731 $ 3,332,236
LAZARD LTD
ASSETS UNDER MANAGEMENT ("AUM")
(unaudited)
($ in millions)
As of Variance
March 31, December 31, March 31, 1Q 2015 vs.
2015 2014 2014 Qtr to Qtr 1Q 2014
Equity:
Emerging Markets $46,916 $48,459 $47,679 (3.2 %) (1.6 %)
Global 33,595 33,982 35,359 (1.1 %) (5.0 %)
Local 32,000 31,684 30,467 1.0 % 5.0 %
Multi-Regional 50,341 46,787 41,754 7.6 % 20.6 %
Total Equity 162,852 160,912 155,259 1.2 % 4.9 %
Fixed Income:
Emerging Markets 15,130 14,227 10,230 6.3 % 47.9 %
Global 3,895 3,771 3,437 3.3 % 13.3 %
Local 3,910 3,676 3,638 6.4 % 7.5 %
Multi-Regional 8,787 9,436 11,073 (6.9 %) (20.6 %)
Total Fixed Income 31,722 31,110 28,378 2.0 % 11.8 %
Alternative Investments 3,446 3,799 4,494 (9.3 %) (23.3 %)
Private Equity 1,057 1,091 1,156 (3.1 %) (8.6 %)
Cash Management 104 191 166 (45.5 %) (37.3 %)
Total AUM $199,181 $197,103 $189,453 1.1 % 5.1 %
Year Ended
Three Months Ended March 31, December 31,

2015

2014 2014
AUM - Beginning of Period $197,103 $186,924 $186,924
Net Flows 1,041 848 11,275

Market and foreign exchangeappreciation (depreciation)

1,037 1,681 (1,096 )
AUM - End of Period $199,181 $189,453 $197,103
Average AUM $198,406 $185,602 $196,037
% Change in average AUM 6.9 %
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
March 31, December 31, March 31,
($ in thousands, except per share data) 2015 2014 2014
Operating Revenue
Net revenue - U.S. GAAP Basis $ 577,749 $ 633,940 $ 533,400
Adjustments:
Revenue related to noncontrolling interests (i) (8,734 ) (2,146 ) (6,266 )
Gain related to Lazard Fund Interests ("LFI") and other similar arrangements (4,136 ) (1,322 ) (2,626 )
Interest expense 16,077 15,329 15,716
Operating revenue, as adjusted $ 580,956 $ 645,801 $ 540,224
Compensation & Benefits Expense
Compensation & benefits expense - U.S. GAAP Basis $ 328,502 $ 307,505 $ 321,565
Adjustments:
Charges pertaining to LFI and other similar arrangements (4,136 ) (1,322 ) (2,626 )
Compensation related to noncontrolling interests (i) (1,217 ) (1,227 ) (1,148 )
Compensation & benefits expense, as adjusted $ 323,149 $ 304,956 $ 317,791
Non-Compensation Expense
Non-compensation expense - Subtotal - U.S. GAAP Basis $ 168,049 $ 117,599 $ 104,655
Adjustments:
Charges pertaining to Senior Debt refinancing (j) (60,219 ) - -
Amortization of intangible assets related to acquisitions (1,033 ) (441 ) (1,220 )
Non-compensation expense related to noncontrolling interests (i) (363 ) (342 ) (434 )
Non-compensation expense, as adjusted $ 106,434 $ 116,816 $ 103,001
Earnings From Operations
Operating Income - U.S. GAAP Basis $ 74,663 $ 199,593 $ 107,180
Other adjustments:
Charges pertaining to Senior Debt refinancing (j) 62,874 - -
Revenue related to noncontrolling interests (i) (8,734 ) (2,146 ) (6,266 )
Interest expense 13,422 15,329 15,716
Expenses related to noncontrolling interests (i) 1,580 1,569 1,582
Amortization of intangible assets related to acquisitions 1,033 441 1,220
Adjustment related to the provision pursuant to the tax receivable agreement ("TRA") (h) 6,535 9,243 -
Earnings from operations, as adjusted $ 151,373 $ 224,029 $ 119,432
Net Income attributable to Lazard Ltd
Net income attributable to Lazard Ltd - U.S. GAAP Basis $ 55,953 $ 172,384 $ 80,842
Adjustments:
Charges pertaining to Senior Debt refinancing (j) 62,874 - -
Tax benefits allocated to adjustments (j) (15,793 ) - -
Adjustment for full exchange of exchangeable interests (k)
Tax adjustment for full exchange - (23 ) (34 )
Amount attributable to LAZ-MD Holdings - - 467
Net income, as adjusted $ 103,034 $ 172,361 $ 81,275
Diluted net income per share:
U.S. GAAP Basis $ 0.42 $ 1.29 $ 0.61
Non-GAAP Basis, as adjusted $ 0.77 $ 1.29 $ 0.61
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 comparable 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 comparable U.S. GAAP measures, see Notes to Financial Schedules.
LAZARD LTD
Notes to Financial Schedules
(a) Selected Summary Financial Information are non-U.S. GAAP ("non-GAAP") measures. Lazard believes that presenting results and measures on an adjusted basis in conjunction with U.S. GAAP measures provides the most meaningful basis for comparison of its operating results across periods. (See Reconciliation of U.S. GAAP to Selected Summary Financial Information)
(b) A non-GAAP measure which excludes (i) 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, (ii) revenue related to non-controlling interests (see (i) below), (iii) interest expense primarily related to corporate financing activities, and (iv) for the three month period ended March 31, 2015 excess interest expense pertaining to Senior Debt refinancing (see (j) below). (See Reconciliation of U.S. GAAP to Selected Summary Financial Information)
(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, and (ii) compensation and benefits related to noncontrolling interests (see (i) below). (See Reconciliation of U.S. GAAP to Selected Summary Financial Information)
(d) A non-GAAP measure which excludes (i) amortization of intangible assets related to acquisitions, (ii) expenses related to noncontrolling interests (see (i) below), and (iii) for the three month period ended March 31, 2015, charges pertaining to Senior Debt refinancing (see (j) below). (See Reconciliation of U.S. GAAP to Selected Summary Financial Information)
(e) A non-GAAP measure which excludes (i) amortization of intangible assets related to acquisitions, (ii) interest expense primarily related to corporate financing activities, (iii) revenue and expenses related to noncontrolling interests (see (i) below), (iv) for the three month periods ended March 31, 2015 and December 31, 2014, a provision pursuant to the tax receivable agreement ("TRA"), and (v) for the three month period ended March 31, 2015, charges pertaining to Senior Debt refinancing (see (j) below). (See Reconciliation of U.S. GAAP to Selected Summary Financial Information)
(f) Represents earnings from operations as a percentage of operating revenue, and is a non-GAAP measure. (See Reconciliation of U.S. GAAP to Selected Summary Financial Information)
(g) A non-GAAP measure which is adjusted to reflect the full conversion of outstanding exchangeable interests held by members of LAZ-MD Holdings for the three month periods ended December 31, 2014 and March 31, 2014, and for the period ended March 31, 2015, excludes charges pertaining to Senior Debt refinancing, net of tax benefits (see (j) below). (See Reconciliation of U.S. GAAP to Selected Summary Financial Information)
(h) Effective tax rate is a non-GAAP measure based upon the U.S. GAAP rate with adjustments for the tax applicable to the non-GAAP adjustments to operating income, generally based upon the effective marginal tax rate in the applicable jurisdiction of the adjustments. The computation is based on a quotient, the numerator of which is the provision for income taxes of $34,345, $36,053 and $21,785 for the three month periods ended March 31, 2015, December 31, 2014, and March 31, 2014, respectively, and the denominator of which is pre-tax income of $144,072, $208,837 and $107,180 for the three month periods ended March 31, 2015, December 31, 2014, and March 31, 2014, respectively, exclusive of net income attributable to noncontrolling interests of $6,693, $423 and $4,120 for the three month periods ended March 31, 2015, December 31, 2014, and March 31, 2014, respectively. Includes a provision pursuant to the tax receivable agreement ("TRA") (see (e) above).
(i) Noncontrolling interests include revenue and expenses principally related to Edgewater, and is a non-GAAP measure. (See Reconciliation of U.S. GAAP to Selected Summary Financial Information)
(j) Represents charges related to the extinguishment of $450 million of the 6.85% Senior Notes maturing in June 2017 and the issuance of $400 million of 3.75% notes maturing in February 2025. The charges include a pre-tax loss on the extinguishment of $60.2 million, applicable tax-related benefits of $15.8 million and excess interest expense of $2.7 million (due to the delay between the issuance of the 2025 notes and the settlement of the 2017 notes).
(k) Represents a reversal of noncontrolling interests related to LAZ-MD Holdings’ ownership of Lazard Group common membership interests and an adjustment for Lazard Ltd entity-level taxes to affect a full exchange of interests and excluding the adjustments noted in (g) above.
NM Not meaningful

Lazard Ltd

Media Contact:

Judi Frost Mackey, +1 212-632-1428

[email protected]

or

Investor Contact:

Armand Sadoughi, +1 212-632-6358

[email protected]

Source: Lazard Ltd

Categories

Press Releases

Next Articles