NEW YORK -- (Business Wire)
Lazard Ltd (NYSE:LAZ):
Highlights
- Net income per share, as adjusted1, of
$0.85 (diluted) for the quarter ended September 30, 2016, compared to
$0.93 (diluted) for the 2015 third quarter2.
On a U.S. GAAP basis, net income per share of $0.85 (diluted) for the
2016 third quarter, compared to $2.99 (diluted) for the 2015 third
quarter, which included a significant benefit from the partial
extinguishment of our Tax Receivable Agreement obligation2.
Pre-tax income per share (diluted), as adjusted1,
flat from third-quarter 2015
- Record third-quarter operating revenue1 of
$611 million, up 3% from the third quarter of 2015. First nine-month
operating revenue of $1,659 million, down 7% from the 2015 period
- Financial Advisory operating revenue of $343 million for the third
quarter of 2016 and $896 million for the first nine months, up 4% and
down 6%, respectively, from 2015
- M&A and Other Advisory operating revenue of $282 million for the
third quarter of 2016 and $700 million for the first nine months, down
2% and 15%, respectively, from 2015. Restructuring operating revenue
of $51 million for the third quarter of 2016, compared to $26 million
for the 2015 period
- Asset Management operating revenue of $265 million for the third
quarter of 2016 and $755 million for the first nine months, up 1% and
down 8%, respectively, from 2015. Third-quarter management fees of
$252 million, up 6% from second-quarter 2016
- Record assets under management (AUM) of $205 billion as of
September 30, 2016, up 12% from September 30, 2015, and up 7% from
June 30, 2016. Net inflows of approximately $3 billion for
third-quarter 2016. Average AUM for the third quarter was $201 billion
- Return of capital to shareholders totaling $574 million in the
first nine months of 2016
|
($ in millions, except per share data and AUM) |
|
| Quarter Ended Sept. 30, |
|
| Nine Months Ended Sept. 30, |
| | | 2016 |
|
| 2015 |
|
| %’16-’15 | | | 2016 |
|
| 2015 |
|
| %’16-’15 |
Net Income | | | | | | | | | | | | | | | | | | |
U.S. GAAP
| | |
$
|
113
| | |
$
|
399
| | |
(72
|
)%
| | |
$
|
260
| | |
$
|
829
| | |
(69
|
)%
|
Per share, diluted
| | |
$
|
0.85
| | |
$
|
2.99
| | |
(72
|
)%
| | |
$
|
1.96
| | |
$
|
6.22
| | |
(68
|
)%
|
Adjusted1,2 | | |
$
|
113
| | |
$
|
124
| | |
(9
|
)%
| | |
$
|
260
| | |
$
|
357
| | |
(27
|
)%
|
Per share, diluted
| | |
$
|
0.85
| | |
$
|
0.93
| | |
(9
|
)%
| | |
$
|
1.96
| | |
$
|
2.68
| | |
(27
|
)%
|
Operating Revenue1 | | | | | | | | | | | | | | | | | | |
Total operating revenue
| | |
$
|
611
| | |
$
|
594
| | |
3
|
%
| | |
$
|
1,659
| | |
$
|
1,782
| | |
(7
|
)%
|
Financial Advisory
| | |
$
|
343
| | |
$
|
331
| | |
4
|
%
| | |
$
|
896
| | |
$
|
949
| | |
(6
|
)%
|
Asset Management
| | |
$
|
265
| | |
$
|
262
| | |
1
|
%
| | |
$
|
755
| | |
$
|
823
| | |
(8
|
)%
|
AUM ($ in billions) | | | | | | | | | | | | | | | | | | |
As of quarter end
| | |
$
|
205
| | |
$
|
183
| | |
12
|
%
| | | | | | | | | |
Average
| | |
$
|
201
| | |
$
|
192
| | |
5
|
%
| | |
$
|
193
| | |
$
|
198
| | |
(3
|
)%
|
|
Note: Endnotes are on page 12 of this release. A reconciliation to U.S.
GAAP is on page 19.
Lazard Ltd (NYSE:LAZ) today reported net income, as adjusted1,
of $113 million for the quarter ended September 30, 2016. Net income per
share, as adjusted1, was $0.85 (diluted) for the quarter,
compared to $0.93 (diluted) for the 2015 third quarter2. On a
U.S. GAAP basis, net income was $113 million for the 2016 third quarter,
or $0.85 (diluted) per share, compared to $2.99 (diluted) per
share for the 2015 third quarter, which included a significant benefit
from the partial extinguishment of our Tax Receivable Agreement
obligation2. Pre-tax income per share (diluted), as adjusted1,
was flat from the third quarter of 2015.
For the first nine months of 2016, net income was $260 million, or $1.96
per share (diluted), as adjusted1 and on a U.S. GAAP basis.
A reconciliation of our U.S. GAAP results to the adjusted results is
presented on page 19 of this press release.
“Lazard’s record third-quarter operating revenue reflects strong
performance across our businesses globally,” said Kenneth M. Jacobs,
Chairman and Chief Executive Officer of Lazard. “We remain focused on
serving clients, reinforcing our global franchise, and building
shareholder value.”
“In Financial Advisory, we continue to advise clients around the world
on large, complex and transformational transactions, and have expanded
our operations in the Americas,” said Mr. Jacobs. “Asset Management
achieved a record level of assets under management and strong net
inflows across our platforms.”
“We are maintaining our cost discipline even as we invest in the
business,” said Matthieu Bucaille, Chief Financial Officer of Lazard.
“Lazard continues to generate significant cash, and we have been
actively repurchasing Lazard shares.”
OPERATING REVENUE
Operating revenue1 was a third-quarter record of $611
million, up 3% from the record third quarter of 2015, and was $1,659
million for the first nine months of 2016, down 7% from the record first
nine months of 2015.
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 Capital Advisory).
Third Quarter
Financial Advisory operating revenue was $343 million for the third
quarter of 2016, 4% higher than the third quarter of 2015.
Strategic Advisory operating revenue was $292 million for the third
quarter of 2016, 4% lower than the third quarter of 2015.
Among the major M&A transactions that were completed during the third
quarter of 2016 were the following (clients are in italics): Dell’s $67
billion acquisition of EMC; Tyco’s $36 billion merger with
Johnson Controls; Delhaize’s €31 billion merger with Ahold; ARM
Holdings on the £24.3 billion recommended all-cash offer by SoftBank
Group; and Starwood Hotels & Resorts’ $14.9 billion sale to
Marriott.
During the third quarter of 2016, Lazard remained engaged in highly
visible, complex M&A transactions and other strategic advisory
assignments, including cross-border transactions, distressed asset
sales, capital structure and sovereign advisory, in the Americas,
Europe, Africa, Asia and Australia. Transactions on which we continued
to advise during or since the third quarter include: Dow Chemical’s
$130 billion merger of equals with DuPont; Anheuser-Busch InBev’s
$109 billion acquisition of SABMiller; Aetna’s $37 billion
acquisition of Humana; Deutsche Börse on its €27 billion proposed
merger with the London Stock Exchange; Sanofi andBoehringer
Ingelheim’s swap of businesses valued at €11.4 billion and €6.7 billion,
respectively; and Danone’s $12.5 billion acquisition of
WhiteWave.
In Capital Advisory, we continued to advise public and private clients
globally, including: Banca Monte dei Paschi di Siena’s disposal
of its bad loan portfolio for €9.1 billion and planned €5.0 billion
capital increase; Gilead Sciences’ $5.0 billion senior unsecured
notes offering; Nets, a portfolio company of Advent International
and Bain Capital, on its DKK 15.8 billion initial public offering; and Korian’s
€1.3 billion term loan refinancing.
Our Sovereign Advisory business remained active worldwide, including
assignments indeveloped and emerging markets globally.
Restructuring operating revenue was $51 million for the third quarter of
2016, compared to $26 million for the third quarter of 2015. The
increase primarily reflects a continued high level of activity in the
U.S. energy sector. During and since the third quarter of 2016 we have
been engaged in a broad range of restructuring and debt advisory
assignments, including: Linn Energy; Pacific Exploration &
Production; Stone Energy; SunEdison; and Takata.
Please see a more complete list of M&A transactions on which Lazard
advised in the third quarter, or continued to advise or completed since
September 30, 2016, as well as Capital Advisory, Sovereign Advisory and
Restructuring assignments, on pages 8-11 of this release.
First Nine Months
Financial Advisory operating revenue was $896 million for the first nine
months of 2016, 6% lower than the record first nine months of 2015.
Strategic Advisory operating revenue was $730 million, 16% lower than
the record first nine months of 2015, primarily driven by a 15% decrease
in M&A and Other Advisory revenue.
Restructuring operating revenue was $166 million for the first nine
months of 2016, compared to $75 million for the first nine months of
2015.
Asset Management
Third Quarter
Asset Management operating revenue was $265 million for the third
quarter of 2016, 1% higher than the third quarter of 2015.
Management fees were $252 million for the third quarter of 2016, 1%
higher than the third quarter of 2015, and 6% higher than the second
quarter of 2016. The sequential increase was primarily driven by an
increase in average assets under management (AUM). Incentive fees during
the period were $1 million, compared to $3 million for the third quarter
of 2015.
Average AUM for the third quarter of 2016 was $201 billion, 5% higher
than the third quarter of 2015, and 4% higher than the second quarter of
2016.
AUM as of September 30, 2016, was a record $205 billion, 12% higher than
AUM as of September 30, 2015. AUM increased 7% from June 30, 2016,
primarily driven by market appreciation and net inflows. Net inflows of
$2.8 billion were primarily driven by strategies in our Emerging Markets
Fixed Income, Local Equity and Multi-Regional Equity platforms.
First Nine Months
Asset Management operating revenue was $755 million for the first nine
months of 2016, 8% lower than the first nine months of 2015.
Management fees were $716 million for the first nine months of 2016, 6%
lower than the first nine months of 2015, reflecting lower average AUM
and a change in the mix of assets. Incentive fees were $4 million for
the first nine months of 2016, compared to $16 million for the first
nine months of 2015.
Average AUM for the first nine months of 2016 was $193 billion, 3% lower
than the first nine months of 2015. Net inflows were $2.9 billion for
the first nine months of 2016.
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 third quarter of 2016, we accrued compensation and benefits
expense1 at an adjusted compensation1 ratio of
56.5%. This resulted in $345 million of adjusted compensation and
benefits expense, compared to $331 million for the third quarter of
2015, a 4% increase.
For the first nine months of 2016, adjusted compensation and benefits
expense1 was $949 million, compared to $991 million for the
first nine months of 2015, a 4% decrease.
We manage our compensation and benefits expense based on awarded
compensation with a consistent deferral policy. Assuming that the
performance of both of our businesses, our hiring levels, and the
compensation environment are similar to 2015, we expect our 2016 awarded
compensation ratio to be in line with the 2015 awarded compensation
ratio.
We continue to maintain a disciplined approach to compensation, and our
goal is 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 basis, with consistent deferral policies.
Non-Compensation Expense
For the third quarter of 2016, adjusted non-compensation expense1,2
was $105 million, 2% higher than the third quarter of 2015. The ratio of
adjusted non-compensation expense to operating revenue for the third
quarter of 2016 was 17.2%, the same as the third quarter of 2015.
For the first nine months of 2016, adjusted non-compensation expense1,2
was $319 million, flat from the first nine months of 2015. The ratio of
adjusted non-compensation expense to operating revenue for the first
nine months of 2016 was 19.2%, compared to 17.9% for the first nine
months of 2015.
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 basis1,2, was $36
million for the third quarter and $96 million for the first nine months
of 2016. The effective tax rate on the same basis was 24.4% for the
third quarter and 27.0% for the first nine months of 2016, compared to
historically low rates of 16.9% and 17.7% for the respective 2015
periods.
CAPITAL MANAGEMENT AND BALANCE SHEET
Our primary capital management goals include managing debt and
returning capital to shareholders through dividends and share
repurchases.
For the third quarter of 2016, Lazard returned $83 million to
shareholders, which included: $47 million in dividends; $34 million in
share repurchases of our Class A common stock; and $2 million in
satisfaction of employee tax obligations in lieu of share issuances upon
vesting of equity grants.
For the first nine months of 2016, Lazard returned $574 million to
shareholders, which included: $289 million in dividends; $229 million in
share repurchases of our Class A common stock; and $56 million in
satisfaction of employee tax obligations in lieu of share issuances upon
vesting of equity grants.
Year to date, we have repurchased 7.4 million shares at an average price
of $34.47 per share. In line with our objectives, these repurchases have
more than offset the potential dilution from our 2015 year-end
equity-based compensation awards (net of estimated forfeitures and tax
withholding to be paid in cash in lieu of share issuances), which were
granted at an average price of $34.42 per share. As of today, our
remaining share repurchase authorization is $164 million.
On October 26, 2016, Lazard declared a quarterly dividend of $0.38 per
share on its outstanding common stock. The dividend is payable on
November 18, 2016, to stockholders of record on November 7, 2016.
Lazard’s financial position remains strong. As of September 30, 2016,
our cash and cash equivalents were $854 million, and stockholders’
equity related to Lazard’s interests was $1,243 million.
***
CONFERENCE CALL
Lazard will host a conference call at 8:00 a.m. EDT on October 27, 2016,
to discuss the company’s financial results for the third quarter and
first nine months of 2016. 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) 437-9366 (U.S. and Canada) or +1 (719) 325-2248
(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 on
October 27, 2016, 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 8628350.
***
ABOUT LAZARD
Lazard, one of the world's preeminent financial advisory and asset
management firms, operates from 42 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, 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 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.
***
FINANCIAL ADVISORY ASSIGNMENTS
Mergers and Acquisitions (Completed in the third
quarter of 2016)
Among the large, publicly announced M&A Advisory transactions or
assignments completed during the third quarter of 2016 on which Lazard
advised were the following:
- Dell’s $67.0 billion acquisition of EMC
- Tyco’s $36.0 billion merger with Johnson Controls
- Delhaize’s €31.0 billion merger with Ahold
- ARM Holdings on the £24.3 billion recommended all-cash offer by
SoftBank Group
- Starwood Hotels & Resorts’ $14.9 billion sale to Marriott
- Columbia Pipeline Group’s $13.0 billion sale to TransCanada
- Propertize’s sale to Lone Star and JP Morgan, including its
€4.9 billion commercial real estate financing portfolio
- SNI’s $4.5 billion joint venture with LafargeHolcim in Morocco
and French-speaking Sub-Saharan Africa
- VimpelCom in the $3.3 billion merger of Mobilink and Warid
Telecom
- Freudenberg’s acquisition of the remaining interest in
TrelleborgVibracoustic from Trelleborg, valuing TrelleborgVibracoustic
at €1.8 billion
- Hammerson’s €1.2 billion acquisition of a share of Dundrum Town
Centre and other retail assets
- Cinven and Canada Pension Plan Investment Board’s €1.2
billion acquisition of Hotelbeds
- Afferent Pharmaceuticals’ $1.3 billion sale to Merck
- Darty’s £914 million sale to Fnac
- L’Oréal’s $1.2 billion acquisition of IT Cosmetics
- Patricia Industries, a part of Investor AB, on its $640 million
acquisition of Laborie
- Electra Partners’ £435 million sale of Elian to Intertrust
- Atlas Copco’s €486 million acquisition of Oerlikon Leybold
Vacuum
- State Street’s $485 million acquisition of GE Asset Management
- Partners Group and CDPQ in the consortium acquisition of
Foncia
- Dentsu Aegis Network’s acquisition of a majority stake in Merkle
- Orange’s acquisition of selected Bharti Airtel subsidiaries in
Africa
- First State Investments’ acquisition of Coriance
- CFAO’s partnership with Wendel and FFC to develop a shopping
mall platform in Central and Western Africa
Mergers and Acquisitions (Announced)
Among the ongoing, large, publicly announced M&A transactions and
assignments on which Lazard advised during or since the 2016 third
quarter, or completed since September 30, 2016, are the following:
- Dow Chemical’s $130 billion merger of equals with DuPont
- Anheuser-Busch InBev’s $109 billion acquisition of SABMiller*
- Aetna’s $37.0 billion acquisition of Humana
- Deutsche Börse on its €27 billion proposed merger with the
London Stock Exchange
- Sanofi andBoehringer Ingelheim’s swap of businesses
valued at €11.4 billion and €6.7 billion, respectively
- Danone’s $12.5 billion acquisition of WhiteWave
- Anheuser-Busch InBev on the $12.0 billion divestiture of
SABMiller’s interest in MillerCoors, including ownership of the Miller
brand globally*
- ITC’s $11.3 billion sale to Fortis*
- United Arab Shipping Company’s $10.6 billion combination with
Hapag-Lloyd
- Banca Popolare di Milano’s €5.5 billion merger with Banco
Popolare
- Special Committee of Independent Directors of SolarCity on the
$6.0 billion acquisition of SolarCity by Tesla Motors
- Dynegy on the formation of a joint venture with Energy Capital
Partners for the $3.3 billion acquisition of ENGIE’s U.S. fossil
portfolio, and subsequent buyout of Energy Capital Partners’ interest
in the joint venture for $750 million
- Air Products’ $3.8 billion sale of its Performance Materials
Division to Evonik
- Anheuser-Busch InBev’s €2.6 billion divestiture of SABMiller
brands Peroni, Grolsch and Meantime to Asahi*
- Genworth Financial’s $2.7 billion sale to China Oceanwide
- Safran’s €2.4 billion sale of its Identity and Security
activities to Advent International
- TIAA’s $2.5 billion acquisition of EverBank
- Vedanta Limited’s $2.3 billion merger with Cairn India
- Freeport-McMoRan’s $2.15 billion sale of its Deepwater Gulf of
Mexico properties to Anadarko Petroleum
- gategroup Holding’s CHF 2.0 billion sale to HNA
- The Independent Directors ofSingapore Telecommunications
(“Singtel”) in Singtel’s S$2.5 billion acquisition of a 21% stake
in Intouch Holdings and a 7.4% stake in Bharti Telecom
- Xylem’s $1.7 billion acquisition of Sensus
- Anheuser-Busch InBev on the $1.6 billion divestiture of
SABMiller’s stake in China Resources Snow Breweries*
- BTG Pactual’s CHF 1.5 billion sale of BSI to EFG International
- Nirma Limited’s $1.4 billion acquisition of Lafarge India*
- BGP Holdings’ €1.1 billion sale of its German residential
platform and portfolio
- VocaLink on itssale to MasterCard for up to $1.2 billion
- Vinci on the consortium acquisition of a 60% stake in Aéroports
de Lyon, valuing Aéroports de Lyon at €1.0 billion
- Premier Farnell on the£868 million recommended offer by
Avnet*
- SVG Capital’s £807 million sale of its investment portfolio to
HarbourVest
- tronc on the $864 million offer by Gannett
- Dover’s $780 million acquisition of Wayne Fueling Systems
- Freeport-McMoRan’s $742 million sale of its onshore California
oil and gas properties to Sentinel Peak Resources
- Google’s $625 million acquisition of Apigee
- Haldex’s SEK 5.5 billion sale to Knorr-Bremse
- Van Gansewinkel’s €562 million merger with Shanks Group
- CHORUS Clean Energy’s €547 million combination with Capital
Stage*
- Unilever’s $575 million sale of its AdeS soy-based beverage
business to Coca-Cola FEMSA and The Coca-Cola Company
- Xerox’s separation into two publicly traded companies
- Air Products’ spin-off of its Electronic Materials Division as
Versum Materials*
- Värde Partners’ sale of NewDay to Cinven and CVC Capital
Partners
- Altice’s acquisition of Parilis
- Hoover Container Solutions’ merger with Ferguson Group and CHEP
Catalyst & Chemical Containers*
- Oaktree Capital Management’s sale of SGD Pharma to JIC*
- Clayton, Dubilier & Rice in the consortium acquisition of
BUT
- Anheuser-Busch InBev on Ambev’s exchange of certain businesses
in Latin America with SABMiller
*Transaction completed since September 30, 2016
Capital Advisory
Among the publicly announced Capital Advisory transactions or
assignments on which Lazard completed or advised during or since the
third quarter of 2016 were the following:
- Banca Monte dei Paschi di Siena’s disposal of its bad loan
portfolio for €9.1 billion and planned €5.0 billion capital increase
- Gilead Sciences’ $5.0 billion senior unsecured notes offering
- Nets, a portfolio company ofAdvent InternationalandBain Capital, on its DKK 15.8 billion initial public
offering
- Korian’s €1.3 billion term loan refinancing
- Albertsons’ $1.25 billion senior notes offering
- Advent International and Bain Capital on the £987
million secondary disposal of a stake in Worldpay
- EQT Partners on the SEK 3.6 billion secondary disposal of a
stake in Dometic
- Eurazeo on the €230 million secondary disposal of a stake in
Moncler
Sovereign Advisory
Among the publicly announced Sovereign Advisory assignments on which
Lazard advised during or since the third quarter of 2016, were the
following:
- The State of Alaska
- The Land of Carinthia (Austria)
- Southern Gas Corridor CJSC of Azerbaijan
- The Kingdom of Bahrain
- Alucam (The Republic of Cameroon)
- The Democratic Republic of the Congo
- The Republic of the Congo
- Refineria del Pacifico (The Republic of Ecuador)
- The Federal Democratic Republic of Ethiopia
- The Gabonese Republic
- Sotrader (joint venture between the government of Gabon and Olam
International)
- The Hellenic Republic
- The Republic of Mozambique
- The Central Bank of Nicaragua
- The Sultanate of Oman
- The Republic of Serbia
- Ukraine and certain sub-sovereign entities
- The Republic of Zimbabwe
Restructuring and Debt Advisory Assignments
Restructuring and debtor or creditor advisory assignments completed
during the third quarter of 2016 on which Lazard advised include: Toys
“R” Us on its public exchange offer; Energy Future Holdings;
Horsehead Holding; Primorsk; Sabine Oil & Gas; and Seventy
Seven Energy in connection with their Chapter 11 bankruptcy
restructurings; hibu on its restructuring; and Sirti on
its distressed sale to Pillarstone and restructuring transaction.
Notable Chapter 11 or similar bankruptcies, on which Lazard advised
debtors or creditors, or related parties, during or since the third
quarter of 2016, are the following: Breitburn Energy Partners; C&J
Energy Services; Goodrich Petroleum*; Linn Energy; Paragon Offshore;
Peabody Energy; and SunEdison.
Among other publicly announced restructuring and debt advisory
assignments on which Lazard advised debtors or creditors during or since
the third quarter of 2016, are the following:
- Abengoa – on its debt restructuring
- Edcon – advising term loan lenders on the company’s
restructuring
- Pacific Exploration & Production – on strategic
alternatives related to its capital structure
- Cobalt International Energy – on strategic alternatives
- Dynegy – with respect to the restructuring of a “ring-fenced”
subsidiary’s debt
- Premuda – on its debt restructuring
- Stone Energy – on strategic alternatives
- Takata –on strategic alternatives
*Assignment completed since September 30, 2016
***
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 Third-quarter and first nine months 2015 results were
affected by the following benefits and charges:
-
In the third quarter of 2015, we repurchased a portion of our
obligation relating to the Tax Receivable Agreement (TRA). On a U.S.
GAAP basis, the extinguishment of this obligation resulted in an
after-tax gain of approximately $259 million. Additionally, we
released $18 million of our valuation allowance related to deferred
tax assets. On a U.S. GAAP basis, these items resulted in a benefit of
$2.08 (diluted) per share in the quarter.
-
In the second quarter of 2015, we released $821 million of our
valuation allowance related to deferred tax assets and we recognized a
liability for our Tax Receivable Agreement (TRA) obligation. As a
result, the second quarter U.S. GAAP provision for income taxes
included a benefit of approximately $1.2 billion, which was
substantially offset by an accrual for our TRA obligation of
approximately $962 million. Additionally, revenue relating to the
Company’s disposal of the Australian private equity business was
adjusted by $12 million for the recognition of an obligation, which
was previously recognized for U.S. GAAP. On a U.S. GAAP basis, these
items resulted in a $245 million net benefit, or $1.85 (diluted) per
share in the quarter.
-
First-quarter 2015 results exclude a charge of $63 million relating to
a debt refinancing by Lazard Ltd’s subsidiary Lazard Group LLC, which
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”). The charge was comprised primarily of an extinguishment
loss of $60 million and other related costs.
LAZ-EPE
|
|
| |
|
| |
|
| |
|
| |
|
| |
LAZARD LTD |
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS |
(U.S. GAAP) |
| | | | | | | | | | | | | | |
|
| | | Three Months Ended | | | % Change From |
| | |
September 30,
| | |
June 30,
| | |
September 30,
| | |
June 30,
| | |
September 30,
|
($ in thousands, except per share data)
| | |
| 2016 |
| | |
| 2016 |
| | |
| 2015 |
| | | 2016 |
| | | 2015 |
|
| | | | | | | | | | | | | | |
|
Total revenue
| | |
$
|
621,102
| | | |
$
|
546,642
| | | |
$
|
585,316
| | | |
14
|
%
| | |
6
|
%
|
Interest expense
| | |
| ($12,194 | ) | | |
| (11,962 | ) | | |
| (11,798 | ) | | | | | | |
Net revenue
| | | |
608,908
| | | | |
534,680
| | | | |
573,518
| | | |
14
|
%
| | |
6
|
%
|
Operating expenses:
| | | | | | | | | | | | | | | |
Compensation and benefits
| | | |
353,756
| | | | |
308,310
| | | | |
319,565
| | | |
15
|
%
| | |
11
|
%
|
| | | | | | | | | | | | | | |
|
Occupancy and equipment
| | | |
26,973
| | | | |
27,163
| | | | |
26,278
| | | | | | | |
Marketing and business development
| | | |
16,927
| | | | |
23,877
| | | | |
18,244
| | | | | | | |
Technology and information services
| | | |
24,179
| | | | |
24,296
| | | | |
22,923
| | | | | | | |
Professional services
| | | |
10,870
| | | | |
11,245
| | | | |
10,758
| | | | | | | |
Fund administration and outsourced services
| | | |
17,097
| | | | |
15,895
| | | | |
14,367
| | | | | | | |
Amortization and other acquisition-related costs
| | | |
863
| | | | |
330
| | | | |
511
| | | | | | | |
Other
| | |
| 9,251 |
| | |
| 10,328 |
| | |
| 10,920 |
| | | | | | |
Subtotal
| | |
| 106,160 |
| | |
| 113,134 |
| | |
| 104,001 |
| | |
(6
|
%)
| | |
2
|
%
|
Benefit pursuant to tax receivable agreement
| | |
| - |
| | |
| - |
| | |
| (420,792 | ) | | | | | | |
Operating expenses
| | |
| 459,916 |
| | |
| 421,444 |
| | |
| 2,774 |
| | |
9
|
%
| | |
NM
| |
| | | | | | | | | | | | | | |
|
Operating income
| | | |
148,992
| | | | |
113,236
| | | | |
570,744
| | | |
32
|
%
| | |
(74
|
%)
|
| | | | | | | | | | | | | | |
|
Provision for income taxes
| | |
| 36,374 |
| | |
| 31,872 |
| | |
| 170,954 |
| | |
14
|
%
| | |
(79
|
%)
|
Net income
| | | |
112,618
| | | | |
81,364
| | | | |
399,790
| | | |
38
|
%
| | |
(72
|
%)
|
Net income attributable to noncontrolling interests
| | |
| 82 |
| | |
| 1,007 |
| | |
| 1,269 |
| | | | | | |
Net income attributable to Lazard Ltd
| | | $ | 112,536 |
| | | $ | 80,357 |
| | | $ | 398,521 |
| | |
40
|
%
| | |
(72
|
%)
|
| | | | | | | | | | | | | | |
|
Attributable to Lazard Ltd Common Stockholders: | | | | | | | | | | | | | | | |
Weighted average shares outstanding: | | | | | | | | | | | | | | | |
Basic
| | | |
124,408,884
| | | | |
125,461,948
| | | | |
125,925,006
| | | |
(1
|
%)
| | |
(1
|
%)
|
Diluted
| | | |
132,320,855
| | | | |
132,341,522
| | | | |
133,115,419
| | | |
(0
|
%)
| | |
(1
|
%)
|
| | | | | | | | | | | | | | |
|
Net income per share: | | | | | | | | | | | | | | | |
Basic
| | |
$
|
0.90
| | | |
$
|
0.64
| | | |
$
|
3.16
| | | |
41
|
%
| | |
(72
|
%)
|
Diluted
| | |
$
|
0.85
| | | |
$
|
0.61
| | | |
$
|
2.99
| | | |
39
|
%
| | |
(72
|
%)
|
| | | | | | | | | | | | | | |
|
|
LAZARD LTD |
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS |
(U.S. GAAP) |
|
|
| |
|
| |
|
| |
| | | Nine Months Ended |
| | |
September 30,
| | |
September 30,
| | | |
($ in thousands, except per share data)
| | | 2016 | | | 2015 | | | % Change |
| | | | | | | | |
|
Total revenue
| | |
$
|
1,677,860
| | | |
$
|
1,799,790
| | | |
(7
|
%)
|
Interest expense
| | |
| (36,054 | ) | | |
| (39,431 | ) | | | |
Net revenue
| | | |
1,641,806
| | | | |
1,760,359
| | | |
(7
|
%)
|
Operating expenses:
| | | | | | | | | |
Compensation and benefits
| | | |
959,276
| | | | |
984,786
| | | |
(3
|
%)
|
| | | | | | | | |
|
Occupancy and equipment
| | | |
81,143
| | | | |
80,889
| | | | |
Marketing and business development
| | | |
60,492
| | | | |
55,758
| | | | |
Technology and information services
| | | |
71,406
| | | | |
68,850
| | | | |
Professional services
| | | |
31,877
| | | | |
36,100
| | | | |
Fund administration and outsourced services
| | | |
46,427
| | | | |
48,008
| | | | |
Amortization and other acquisition-related costs
| | | |
1,837
| | | | |
3,401
| | | | |
Other
| | |
| 28,743 |
| | |
| 90,845 |
| | | |
Subtotal
| | |
| 321,925 |
| | |
| 383,851 |
| | |
(16
|
%)
|
Provision pursuant to tax receivable agreement
| | |
| - |
| | |
| 547,691 |
| | | |
Operating expenses
| | |
| 1,281,201 |
| | |
| 1,916,328 |
| | |
(33
|
%)
|
| | | | | | | | |
|
Operating income (loss)
| | | |
360,605
| | | | |
(155,969
|
)
| | |
NM
| |
| | | | | | | | |
|
Provision (benefit) for income taxes
| | |
| 95,900 |
| | |
| (993,560 | ) | | |
NM
| |
Net income
| | | |
264,705
| | | | |
837,591
| | | |
(68
|
%)
|
Net income attributable to noncontrolling interests
| | |
| 4,989 |
| | |
| 9,004 |
| | | |
Net income attributable to Lazard Ltd
| | | $ | 259,716 |
| | | $ | 828,587 |
| | |
(69
|
%)
|
| | | | | | | | |
|
Attributable to Lazard Ltd Common Stockholders: | | | | | | | | | |
Weighted average shares outstanding: | | | | | | | | | |
Basic
| | | |
125,303,758
| | | | |
125,264,447
| | | |
0
|
%
|
Diluted
| | | |
132,517,887
| | | | |
133,219,137
| | | |
(1
|
%)
|
| | | | | | | | |
|
Net income per share: | | | | | | | | | |
Basic
| | |
$
|
2.07
| | | |
$
|
6.61
| | | |
(69
|
%)
|
Diluted
| | |
$
|
1.96
| | | |
$
|
6.22
| | | |
(68
|
%)
|
| | | | | | | | |
|
|
LAZARD LTD |
UNAUDITED CONDENSED CONSOLIDATED |
STATEMENT OF FINANCIAL CONDITION |
(U.S. GAAP) |
| | |
|
| |
|
| |
| | | | |
September 30,
| | |
December 31,
|
($ in thousands)
| | | | |
|
2016
|
| | |
|
2015
|
|
| | | | | | | |
|
ASSETS |
| | | | | | | |
|
Cash and cash equivalents
| | | |
$
|
853,887
| | | |
$
|
1,132,083
| |
Deposits with banks and short-term investments
| | | |
534,865
| | | | |
389,861
| |
Cash deposited with clearing organizations and other segregated cash
| | | |
35,168
| | | | |
34,948
| |
Receivables
| | | | | |
537,695
| | | | |
497,213
| |
Investments
| | | | | |
462,758
| | | | |
541,911
| |
Goodwill and other intangible assets
| | | | |
353,850
| | | | |
326,976
| |
Deferred tax assets
| | | | | |
1,107,046
| | | | |
1,130,595
| |
Other assets
| | | | |
| 417,034 |
| | |
| 424,187 |
|
| | | | | | | |
|
Total Assets
| | | | | $ | 4,302,303 |
| | | $ | 4,477,774 |
|
| | | | | | | |
|
LIABILITIES & STOCKHOLDERS' EQUITY |
| | | | | | | |
|
Liabilities | | | | | | | | |
Deposits and other customer payables
| | | |
$
|
587,059
| | | |
$
|
506,665
| |
Accrued compensation and benefits
| | | | |
375,512
| | | | |
570,409
| |
Senior debt
| | | | | |
990,488
| | | | |
989,358
| |
Tax receivable agreement obligation
| | | | |
513,623
| | | | |
523,962
| |
Other liabilities
| | | | |
| 534,479 |
| | |
| 520,074 |
|
Total liabilities
| | | | | |
3,001,161
| | | | |
3,110,468
| |
| | | | | | | |
|
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
| | | | | |
623,512
| | | | |
600,034
| |
Retained earnings
| | | | | |
1,058,189
| | | | |
1,123,728
| |
Accumulated other comprehensive loss, net of tax
| | |
| (236,088 | ) | | |
| (234,356 | ) |
Subtotal
| | | | | |
1,446,911
| | | | |
1,490,704
| |
Class A common stock held by subsidiaries, at cost
| | |
| (203,736 | ) | | |
| (177,249 | ) |
Total Lazard Ltd stockholders' equity
| | | | |
1,243,175
| | | | |
1,313,455
| |
Noncontrolling interests
| | | | |
| 57,967 |
| | |
| 53,851 |
|
Total stockholders' equity
| | | | |
| 1,301,142 |
| | |
| 1,367,306 |
|
| | | | | | | |
|
Total liabilities and stockholders' equity
| | | | $ | 4,302,303 |
| | | $ | 4,477,774 |
|
| | | | | | | | | | |
|
|
LAZARD LTD |
SELECTED SUMMARY FINANCIAL INFORMATION (a) |
(Non-GAAP - unaudited) |
|
|
|
| Three Months Ended |
|
| % Change From |
| | |
September 30,
|
|
|
June 30,
|
|
|
September 30,
| | |
June 30,
|
|
|
September 30,
|
($ in thousands, except per share data)
| | |
| 2016 |
| | |
| 2016 |
| | |
| 2015 |
| | | 2016 |
| | | 2015 |
|
| | | | | | | | | | | | | | |
|
Revenues: | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
|
Financial Advisory | | | | | | | | | | | | | | | |
M&A and Other Advisory
| | |
$
|
281,649
| | | |
$
|
203,403
| | | |
$
|
288,109
| | | |
38
|
%
| | |
(2
|
%)
|
Capital Raising
| | |
| 10,569 |
| | |
| 11,299 |
| | |
| 16,932 |
| | |
(6
|
%)
| | |
(38
|
%)
|
Strategic Advisory
| | | |
292,218
| | | | |
214,702
| | | | |
305,041
| | | |
36
|
%
| | |
(4
|
%)
|
Restructuring
| | |
| 51,272 |
| | |
| 72,265 |
| | |
| 25,791 |
| | |
(29
|
%)
| | |
NM
| |
Total
| | | |
343,490
| | | | |
286,967
| | | | |
330,832
| | | |
20
|
%
| | |
4
|
%
|
| | | | | | | | | | | | | | |
|
Asset Management | | | | | | | | | | | | | | | |
Management fees
| | | |
251,851
| | | | |
238,067
| | | | |
248,143
| | | |
6
|
%
| | |
1
|
%
|
Incentive fees
| | | |
591
| | | | |
1,184
| | | | |
2,705
| | | |
(50
|
%)
| | |
(78
|
%)
|
Other
| | |
| 12,624 |
| | |
| 11,479 |
| | |
| 10,743 |
| | |
10
|
%
| | |
18
|
%
|
Total
| | | |
265,066
| | | | |
250,730
| | | | |
261,591
| | | |
6
|
%
| | |
1
|
%
|
| | | | | | | | | | | | | | |
|
Corporate | | |
| 2,212 |
| | |
| 4,610 |
| | |
| 1,844 |
| | |
(52
|
%)
| | |
20
|
%
|
| | | | | | | | | | | | | | |
|
Operating revenue (b) | | | $ | 610,768 |
| | | $ | 542,307 |
| | | $ | 594,267 |
| | |
13
|
%
| | |
3
|
%
|
|
Expenses: | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
|
Compensation and benefits expense (c) | | | $ | 345,084 |
| | | $ | 306,404 |
| | | $ | 330,554 |
| | |
13
|
%
| | |
4
|
%
|
Ratio of compensation to operating revenue | | | | 56.5 | % | | | | 56.5 | % | | | | 55.6 | % | | | | | | |
| | | | | | | | | | | | | | |
|
Non-compensation expense (d) | | | $ | 104,832 |
| | | $ | 112,167 |
| | | $ | 102,321 |
| | |
(7
|
%)
| | |
2
|
%
|
Ratio of non-compensation to operating revenue | | | | 17.2 | % | | | | 20.7 | % | | | | 17.2 | % | | | | | | |
|
Earnings: | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
|
Earnings from operations (e) | | | $ | 160,852 |
| | | $ | 123,736 |
| | | $ | 161,392 |
| | |
30
|
%
| | |
(0
|
%)
|
Operating margin (f) | | | | 26.3 | % | | | | 22.8 | % | | | | 27.2 | % | | | | | | |
| | | | | | | | | | | | | | |
|
Net income (g) | | | $ | 112,536 |
| | | $ | 80,357 |
| | | $ | 124,131 |
| | |
40
|
%
| | |
(9
|
%)
|
| | | | | | | | | | | | | | |
|
Diluted net income per share | | | $ | 0.85 |
| | | $ | 0.61 |
| | | $ | 0.93 |
| | |
39
|
%
| | |
(9
|
%)
|
| | | | | | | | | | | | | | |
|
Diluted weighted average shares
| | | |
132,320,855
| | | | |
132,341,522
| | | | |
133,115,419
| | | |
(0
|
%)
| | |
(1
|
%)
|
| | | | | | | | | | | | | | |
|
Effective tax rate (h) | | | | 24.4 | % | | | | 28.4 | % | | | | 16.9 | % | | | | | | |
| | | | | | | | | | | | | | |
|
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 |
SELECTED SUMMARY FINANCIAL INFORMATION (a) |
(Non-GAAP - unaudited) |
|
|
|
| Nine Months Ended September 30 |
| | | |
|
| |
|
| |
($ in thousands, except per share data)
| | |
| 2016 |
| | |
| 2015 |
| | | % Change |
|
| | | | | | | | |
|
Revenues: | | | | | | | | | |
| | | | | | | | |
|
Financial Advisory | | | | | | | | | |
M&A and Other Advisory
| | |
$
|
699,643
| | | |
$
|
822,063
| | | |
(15
|
%)
|
Capital Raising
| | |
| 30,741 |
| | |
| 51,809 |
| | |
(41
|
%)
|
Strategic Advisory
| | | |
730,384
| | | | |
873,872
| | | |
(16
|
%)
|
Restructuring
| | |
| 166,087 |
| | |
| 74,878 |
| | |
NM
| |
Total
| | | |
896,471
| | | | |
948,750
| | | |
(6
|
%)
|
| | | | | | | | |
|
Asset Management | | | | | | | | | |
Management fees
| | | |
716,368
| | | | |
758,631
| | | |
(6
|
%)
|
Incentive fees
| | | |
3,581
| | | | |
15,966
| | | |
(78
|
%)
|
Other
| | |
| 35,397 |
| | |
| 48,122 |
| | |
(26
|
%)
|
Total
| | |
| 755,346 |
| | |
| 822,719 |
| | |
(8
|
%)
|
| | | | | | | | |
|
Corporate | | |
| 7,324 |
| | |
| 10,385 |
| | |
(29
|
%)
|
| | | | | | | | |
|
Operating revenue (b) | | | $ | 1,659,141 |
| | | $ | 1,781,854 |
| | |
(7
|
%)
|
|
Expenses: | | | | | | | | | |
| | | | | | | | |
|
Compensation and benefits expense (c) | | | $ | 949,460 |
| | | $ | 991,132 |
| | |
(4
|
%)
|
Ratio of compensation to operating revenue | | | | 57.2 | % | | | | 55.6 | % | | | |
| | | | | | | | |
|
Non-compensation expense (d) | | | $ | 318,588 |
| | | $ | 318,347 |
| | |
0
|
%
|
Ratio of non-compensation to operating revenue | | | | 19.2 | % | | | | 17.9 | % | | | |
|
Earnings: | | | | | | | | | |
| | | | | | | | |
|
Earnings from operations (e) | | | $ | 391,093 |
| | | $ | 472,375 |
| | |
(17
|
%)
|
Operating margin (f) | | | | 23.6 | % | | | | 26.5 | % | | | |
| | | | | | | | |
|
Net income (g) | | | $ | 259,716 |
| | | $ | 357,425 |
| | |
(27
|
%)
|
| | | | | | | | |
|
Diluted net income per share | | | $ | 1.96 |
| | | $ | 2.68 |
| | |
(27
|
%)
|
| | | | | | | | |
|
Diluted weighted average shares
| | | |
132,517,887
| | | | |
133,219,137
| | | |
(1
|
%)
|
| | | | | | | | |
|
Effective tax rate (h) | | | | 27.0 | % | | | | 17.7 | % | | | |
| | | | | | | | | | | | |
|
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 |
ASSETS UNDER MANAGEMENT ("AUM") |
(unaudited) |
($ in millions) |
|
|
| |
|
| |
|
| |
|
| |
|
| |
| | | As of | | | Variance |
| | |
September 30,
| | |
June 30,
| | |
December 31,
| | | | | | |
| | |
| 2016 |
| | |
| 2016 |
| | |
| 2015 | | | Qtr to Qtr | | | YTD |
| | | | | | | | | | | | | | |
|
Equity: | | | | | | | | | | | | | | | |
Emerging Markets
| | |
$
|
43,624
| | | |
$
|
40,329
| | | |
$
|
36,203
| | | |
8.2
|
%
| | | |
20.5
|
%
|
Global
| | | |
32,021
| | | | |
30,483
| | | | |
31,407
| | | |
5.0
|
%
| | | |
2.0
|
%
|
Local
| | | |
34,415
| | | | |
31,767
| | | | |
31,354
| | | |
8.3
|
%
| | | |
9.8
|
%
|
Multi-Regional
| | |
| 57,272 |
| | |
| 53,993 |
| | |
| 52,531 | | | |
6.1
|
%
| | | |
9.0
|
%
|
Total Equity
| | | |
167,332
| | | | |
156,572
| | | | |
151,495
| | | |
6.9
|
%
| | | |
10.5
|
%
|
Fixed Income: | | | | | | | | | | | | | | | |
Emerging Markets
| | | |
17,112
| | | | |
14,414
| | | | |
14,378
| | | |
18.7
|
%
| | | |
19.0
|
%
|
Global
| | | |
4,660
| | | | |
4,302
| | | | |
4,132
| | | |
8.3
|
%
| | | |
12.8
|
%
|
Local
| | | |
4,067
| | | | |
3,967
| | | | |
3,899
| | | |
2.5
|
%
| | | |
4.3
|
%
|
Multi-Regional
| | |
| 8,120 |
| | |
| 7,894 |
| | |
| 7,978 | | | |
2.9
|
%
| | | |
1.8
|
%
|
Total Fixed Income
| | | |
33,959
| | | | |
30,577
| | | | |
30,387
| | | |
11.1
|
%
| | | |
11.8
|
%
|
Alternative Investments | | | |
2,823
| | | | |
3,290
| | | | |
3,297
| | | |
(14.2
|
%)
| | | |
(14.4
|
%)
|
Private Equity | | | |
950
| | | | |
933
| | | | |
858
| | | |
1.8
|
%
| | | |
10.7
|
%
|
Cash Management | | |
| 376 |
| | |
| 493 |
| | |
| 343 | | | |
(23.7
|
%)
| | | |
9.6
|
%
|
Total AUM
| | | $ | 205,440 |
| | | $ | 191,865 |
| | | $ | 186,380 | | | |
7.1
|
%
| | | |
10.2
|
%
|
| | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | |
|
| | | Three Months Ended September 30 | | | | | | Nine Months Ended September 30 |
| | |
| 2016 |
| | |
| 2015 |
| | | | | |
| 2016 |
| | |
| 2015 |
|
| | | | | | | | | | | | | | |
|
AUM - Beginning of Period
| | |
$
|
191,865
| | | |
$
|
203,086
| | | | | | |
$
|
186,380
| | | |
$
|
197,103
| |
| | | | | | | | | | | | | | |
|
Net Flows
| | | |
2,773
| | | | |
201
| | | | | | | |
2,865
| | | | |
2,790
| |
Market and foreign exchange
| | | | | | | | | | | | | | | |
appreciation (depreciation)
| | |
| 10,802 |
| | |
| (20,665 | ) | | | | | |
| 16,195 |
| | |
| (17,271 | ) |
| | | | | | | | | | | | | | |
|
AUM - End of Period
| | | $ | 205,440 |
| | | $ | 182,622 |
| | | | | | $ | 205,440 |
| | | $ | 182,622 |
|
| | | | | | | | | | | | | | |
|
Average AUM
| | | $ | 201,028 |
| | | $ | 192,026 |
| | | | | | $ | 192,989 |
| | | $ | 198,085 |
|
| | | | | | | | | | | | | | |
|
% Change in average AUM
| | |
| 4.7 | % | | | | | | | | |
| (2.6 | %) | | | |
| | | | | | | | | | | | | | |
|
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 | | | | | | Nine Months Ended |
| | |
September 30,
| | |
June 30,
| | |
September 30,
| | |
September 30,
| | |
September 30,
|
($ in thousands, except per share data)
| | | 2016 | | | 2016 | | | 2015 | | | 2016 | | | 2015 |
| | | | | | | | | | | | | | |
|
Operating Revenue |
Net revenue - U.S. GAAP Basis
| | |
$
|
608,908
| | | |
$
|
534,680
| | | |
$
|
573,518
| | | |
$
|
1,641,806
| | | |
$
|
1,760,359
| |
| | | | | | | | | | | | | | |
|
Adjustments:
| | | | | | | | | | | | | | | |
Revenue related to noncontrolling interests (i)
| | | |
(2,661
|
)
| | | |
(3,398
|
)
| | | |
(2,995
|
)
| | | |
(12,271
|
)
| | | |
(15,317
|
)
|
(Gains) losses related to Lazard Fund Interests ("LFI") and other
similar arrangements
| | | |
(6,909
|
)
| | | |
(312
|
)
| | | |
12,145
| | | | |
(4,707
|
)
| | | |
9,903
| |
Private Equity revenue adjustment (j)
| | | |
-
| | | | |
-
| | | | |
-
| | | | |
-
| | | | |
(12,203
|
)
|
Interest expense
| | |
| 11,430 |
| | |
| 11,337 |
| | |
| 11,599 |
| | |
| 34,313 |
| | |
| 39,112 |
|
| | | | | | | | | | | | | | |
|
Operating revenue, as adjusted (b)
| | | $ | 610,768 |
| | | $ | 542,307 |
| | | $ | 594,267 |
| | | $ | 1,659,141 |
| | | $ | 1,781,854 |
|
| | | | | | | | | | | | | | |
|
Compensation & Benefits Expense |
Compensation & benefits expense - U.S. GAAP Basis
| | |
$
|
353,756
| | | |
$
|
308,310
| | | |
$
|
319,565
| | | |
$
|
959,276
| | | |
$
|
984,786
| |
| | | | | | | | | | | | | | |
|
Adjustments:
| | | | | | | | | | | | | | | |
(Charges) credits pertaining to LFI and other similar arrangements
| | | |
(6,909
|
)
| | | |
(312
|
)
| | | |
12,145
| | | | |
(4,707
|
)
| | | |
9,903
| |
Compensation related to noncontrolling interests (i)
| | |
| (1,763 | ) | | |
| (1,594 | ) | | |
| (1,156 | ) | | |
| (5,109 | ) | | |
| (3,557 | ) |
| | | | | | | | | | | | | | |
|
Compensation & benefits expense, as adjusted (c)
| | | $ | 345,084 |
| | | $ | 306,404 |
| | | $ | 330,554 |
| | | $ | 949,460 |
| | | $ | 991,132 |
|
| | | | | | | | | | | | | | |
|
Non-Compensation Expense |
Non-compensation expense - Subtotal - U.S. GAAP Basis
| | |
$
|
106,160
| | | |
$
|
113,134
| | | |
$
|
104,001
| | | |
$
|
321,925
| | | |
$
|
383,851
| |
| | | | | | | | | | | | | | |
|
Adjustments:
| | | | | | | | | | | | | | | |
Charges pertaining to Senior Debt refinancing (k)
| | | |
-
| | | | |
-
| | | | |
-
| | | | |
-
| | | | |
(60,219
|
)
|
Expense related to partial extinguishment of TRA obligation (l)
| | | |
-
| | | | |
-
| | | | |
(759
|
)
| | | |
-
| | | | |
(759
|
)
|
Amortization and other acquisition-related costs
| | | |
(863
|
)
| | | |
(330
|
)
| | | |
(511
|
)
| | | |
(1,837
|
)
| | | |
(3,401
|
)
|
Non-compensation expense related to noncontrolling interests (i)
| | |
| (465 | ) | | |
| (637 | ) | | |
| (410 | ) | | |
| (1,500 | ) | | |
| (1,125 | ) |
| | | | | | | | | | | | | | |
|
Non-compensation expense, as adjusted (d)
| | | $ | 104,832 |
| | | $ | 112,167 |
| | | $ | 102,321 |
| | | $ | 318,588 |
| | | $ | 318,347 |
|
| | | | | | | | | | | | | | |
|
Pre-Tax Income and Earnings From Operations |
Operating Income (loss) - U.S. GAAP Basis
| | |
$
|
148,992
| | | |
$
|
113,236
| | | |
$
|
570,744
| | | |
$
|
360,605
| | | | |
($155,969
|
)
|
| | | | | | | | | | | | | | |
|
Adjustments:
| | | | | | | | | | | | | | | |
Gain on partial extinguishment of TRA obligation (l)
| | | |
-
| | | | |
-
| | | | |
(420,035
|
)
| | | |
-
| | | | |
(420,035
|
)
|
Accrual of tax receivable agreement obligation ("TRA")
| | | |
-
| | | | |
-
| | | | |
-
| | | | |
-
| | | | |
968,483
| |
Charges pertaining to Senior Debt refinancing (k)
| | | |
-
| | | | |
-
| | | | |
-
| | | | |
-
| | | | |
62,874
| |
Private Equity revenue adjustment (j)
| | | |
-
| | | | |
-
| | | | |
-
| | | | |
-
| | | | |
(12,203
|
)
|
Net income related to noncontrolling interests (i)
| | |
| (82 | ) | | |
| (1,007 | ) | | |
| (1,269 | ) | | |
| (4,989 | ) | | |
| (9,004 | ) |
Pre-tax income, as adjusted
| | | |
148,910
| | | | |
112,229
| | | | |
149,440
| | | | |
355,616
| | | | |
434,146
| |
Interest expense
| | | |
11,430
| | | | |
11,337
| | | | |
11,599
| | | | |
34,313
| | | | |
36,457
| |
Amortization and other acquisition-related costs (LAZ only)
| | |
| 512 |
| | |
| 170 |
| | |
| 353 |
| | |
| 1,164 |
| | |
| 1,772 |
|
Earnings from operations, as adjusted (e)
| | | $ | 160,852 |
| | | $ | 123,736 |
| | | $ | 161,392 |
| | | $ | 391,093 |
| | | $ | 472,375 |
|
| | | | | | | | | | | | | | |
|
Net Income attributable to Lazard Ltd |
Net income attributable to Lazard Ltd - U.S. GAAP Basis
| | |
$
|
112,536
| | | |
$
|
80,357
| | | |
$
|
398,521
| | | |
$
|
259,716
| | | |
$
|
828,587
| |
Adjustments:
| | | | | | | | | | | | | | | |
Gain on partial extinguishment of TRA obligation (net of tax) (l)
| | | |
-
| | | | |
-
| | | | |
(259,256
|
)
| | | |
-
| | | | |
(259,256
|
)
|
Charges pertaining to Senior Debt refinancing (k)
| | | |
-
| | | | |
-
| | | | |
-
| | | | |
-
| | | | |
62,874
| |
Private Equity revenue adjustment (j)
| | | |
-
| | | | |
-
| | | | |
-
| | | | |
-
| | | | |
(12,203
|
)
|
Recognition of deferred tax assets (net of TRA accrual) (m)
| | | |
-
| | | | |
-
| | | | |
(17,862
|
)
| | | |
-
| | | | |
(254,598
|
)
|
Tax expense (benefit) allocated to adjustments
| | |
| - |
| | |
| - |
| | |
| 2,728 |
| | |
| - |
| | |
| (7,979 | ) |
| | | | | | | | | | | | | | |
|
Net income, as adjusted (g)
| | | $ | 112,536 |
| | | $ | 80,357 |
| | | $ | 124,131 |
| | | $ | 259,716 |
| | | $ | 357,425 |
|
| | | | | | | | | | | | | | |
|
Diluted net income per share: | | | | | | | | | | | | | | | |
U.S. GAAP Basis
| | |
$
|
0.85
| | | |
$
|
0.61
| | | |
$
|
2.99
| | | |
$
|
1.96
| | | |
$
|
6.22
| |
Non-GAAP Basis, as adjusted
| | |
$
|
0.85
| | | |
$
|
0.61
| | | |
$
|
0.93
| | | |
$
|
1.96
| | | |
$
|
2.68
| |
| | | | | | | | | | | | | | |
|
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.
|
(b)
| |
A non-GAAP measure which excludes (i) revenue related to
non-controlling interests (see (i) 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) for the nine
month period ended September 30, 2015, private equity carried
interest reduction (see (j) below), (iv) interest expense primarily
related to corporate financing activities, and (v) for the nine
month period ended September 30, 2015, excess interest expense
pertaining to Senior Debt refinancing (see (k) below).
|
(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).
|
(d)
| |
A non-GAAP measure which excludes (i) for the nine month period
ended September 30, 2015, charges pertaining to Senior Debt
refinancing (see (k) below), (ii) amortization and other
acquisition-related costs, and (iii) expenses related to
noncontrolling interests (see (i) below), and (iv) for the three and
nine month periods ended September 30, 2015, expenses related to
partial extinguishment of TRA obligation (see (l) below).
|
(e)
| |
A non-GAAP measure which excludes (i) for the nine month period
ended September 30, 2015, a provision pursuant to the tax receivable
agreement ("TRA"), (ii) for the nine month period ended September
30, 2015, charges pertaining to Senior Debt refinancing (see (k)
below), (iii) for the nine month period ended September 30, 2015,
private equity carried interest reduction (see (j) below), (iv)
revenue and expenses related to noncontrolling interests (see (i)
below), (v) interest expense primarily related to corporate
financing activities, (vi) for the three and nine month periods
ended September 30, 2015, gain related to partial extinguishment of
TRA obligation (see (l) below, and (vii) amortization and other
acquisition-related costs (Lazard only).
|
(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 nine month period
ended September 30, 2015, charges pertaining to Senior Debt
refinancing, net of tax benefits (see (k) below), (ii) for the nine
month period ended September 30, 2015, the private equity carried
interest reductions (see (j) below), (iii) for the three and nine
month period ended September 30, 2015, a release of deferred tax
valuation allowance, net of the related provision for TRA (see (m)
below), and (iv) for the three and nine month periods ended
September 30, 2015, gain related to partial extinguishment of TRA
obligation (see (l) below).
|
(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 $36,374, $31,872, and $25,311 for
the three month periods ended September 30, 2016, June 30, 2016, and
September 30, 2015, respectively, $95,900 and $76,723 for the nine
month periods ended September 30, 2016 and 2015, respectively, and
the denominator of which is pre-tax income of $148,910, $112,229,
and $149,442 for the three month periods ended September 30, 2016,
June 30, 2016, and September 30, 2015, respectively, $355,616 and
$434,148 for the nine month periods ended September 30, 2016 and
2015, respectively. The numerator also excludes for the three and
nine month periods ended September 30, 2015, a release of deferred
tax valuation allowance (see (m) below).
|
(i)
| |
Noncontrolling interests include revenue and expenses principally
related to Edgewater, and is a non-GAAP measure.
|
(j)
| |
Revenue relating to the Company's disposal of the Australian private
equity business is adjusted for the recognition of an obligation,
which was previously recognized for U.S. GAAP.
|
(k)
| |
Represents charges related to the extinguishment of $450 million of
the Company's 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 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).
|
(l)
| |
In July of 2015 the Company extinguished approximately 47% of the
outstanding TRA obligation. Accordingly, for the three and nine
month periods ended September 30, 2015, the Company recorded a
pre-tax gain of $420 million and a related tax expense of $161
million.
|
(m)
| |
Represents the recognition of deferred tax assets of $1,199 million,
net of the accrual of $962 million for the tax receivable agreement.
|
NM
| |
Not meaningful
| |
View source version on businesswire.com: http://www.businesswire.com/news/home/20161027005782/en/
Contacts:
Lazard Ltd
Media:
Judi Frost Mackey, +1-212-632-1428
judi.mackey@lazard.com
or
Investors:
Armand
Sadoughi, +1-212-632-6358
armand.sadoughi@lazard.com
Source: Lazard Ltd
© 2024 Canjex Publishing Ltd. All rights reserved.