Lazard Reports Fourth-Quarter and Full-Year 2023 Results

Lazard, Inc. (NYSE: LAZ) today reported net revenue of $806 million and operating revenue1 of $761 million for the quarter ended December 31, 2023. On a U.S. GAAP basis, fourth-quarter 2023 net income was $64 million or $0.65 per share, diluted. Net income, as adjusted2 was $65 million, or $0.66 per share, diluted, for the quarter.

Annual net revenue was $2,515 million and operating revenue was $2,440 million for the year ended December 31, 2023. On a U.S. GAAP basis, net loss for the year was $75 million, or $0.90 per share, diluted. Net income, as adjusted2, was $75 million, or $0.77 per share, diluted, for the year.

“Lazard’s fourth quarter results represent a strong finish to a challenging year, and we are pleased with our forward momentum as we execute our long-term growth strategy,” said Peter R. Orszag, Chief Executive Officer, Lazard. “We are increasingly winning new client mandates across our business, and we are well positioned to serve clients as they consider economic opportunities and geopolitical risks in the years ahead.”

($ in millions, except

Quarter Ended

 

Year Ended

per share data and AUM)

December 31,

 

December 31,

 

2023

 

2022

 

%'23-'22

 

2023

 

2022

 

%'23-'22

Net Income (Loss)

 

 

 

 

 

 

 

 

 

 

 

U.S. GAAP

$64

 

$42

 

50%

 

($75)

 

$358

 

NM

Per share, diluted

$0.65

 

$0.44

 

48%

 

($0.90)

 

$3.51

 

NM

Adjusted2

$65

 

$67

 

(3%)

 

$75

 

$384

 

(80%)

Per share, diluted

$0.66

 

$0.69

 

(4%)

 

$0.77

 

$3.73

 

(79%)

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

U.S. GAAP - Net Revenue

$806

 

$712

 

13%

 

$2,515

 

$2,774

 

(9%)

Total operating revenue1

$761

 

$671

 

13%

 

$2,440

 

$2,769

 

(12%)

Financial Advisory

$477

 

$404

 

18%

 

$1,357

 

$1,652

 

(18%)

Asset Management

$274

 

$259

 

6%

 

$1,068

 

$1,099

 

(3%)

 

 

 

 

 

 

 

 

 

 

 

 

AUM ($ in billions)

 

 

 

 

 

 

 

 

 

 

 

Period end

$247

 

$216

 

14%

 

 

 

 

 

 

Average

$234

 

$211

 

11%

 

$233

 

$227

 

2%

Note: Endnotes are on page 5 of this release. A reconciliation of adjusted GAAP to U.S. GAAP is on pages 14-15.

OPERATING REVENUE

Operating revenue was $761 million for the fourth quarter of 2023, 13% higher than the fourth quarter of 2022, and $2,440 million for 2023, 12% lower than 2022.

Financial Advisory

For the fourth quarter of 2023, Financial Advisory operating revenue was $477 million, 18% higher than the fourth quarter of 2022.

For the full year of 2023, Financial Advisory operating revenue was $1,357 million, 18% lower than 2022.

During and since the fourth quarter of 2023, Lazard has been engaged in significant and complex M&A transactions globally, including the following (clients are in italics): Lincoln Financial Group’s $28 billion reinsurance transaction with Fortitude Re; Newmont’s $19.15 billion acquisition of Newcrest; Iliad’s €14.9 billion proposed merger between Iliad Italia and Vodafone Italia; ImmunoGen’s $10.1 billion sale to AbbVie; Abcam’s $5.7 billion acquisition by Danaher; Sanofi’s $2.4 billion acquisition of Inhibrx; iSource’s $2.15 billion sale of a minority equity interest in NIPSCO to Blackstone Infrastructure Partners; RPT’s $2 billion acquisition by Kimco Realty; Elecnor Group’s €1.8 billion sale of its Spanish based renewables business Enerfin to Statkraf; The Restaurant Group plc’s £701 million acquisition by Apollo Global Management; Ajinomoto Group’s $545 million acquisition of Forge Biologics; Energy Exemplar’s acquisition by Blackstone and Vista Equity Partners; Renault Group’s partnership agreement with Nissan and Western Digital Corporation’s separation of HDD and Flash businesses, creating two independent public companies.

Lazard's preeminent restructuring and liability management practices have been engaged in a broad range of complex restructuring and debt advisory assignments, including company roles involving Air Methods, Enviva, Inversiones Latin America Power and Tele Columbus and creditor and/or related party roles involving AFE, Endo Pharmaceuticals, Hilding Anders, Lumen Technologies, Orpea, SVB Financial Group and Telegraph Media Group.

Our capital advisory and solutions practices remain active and engaged in assignments, including Ceva Santé Animale's €2.4 billion refinancing, McLaren Group’s £1.7 billion recapitalization, Pollen Street Capital’s closing of its €1 billion multi-asset continuation fund, Lecta Limited’s €550 million refinancing and new capital raise and GOJO Industries’ $500 million capital solution from Silver Point.

Our sovereign advisory practice continues to be active in advising governments and sovereign entities across developed and emerging markets including assignments for the governments of Greece and Mozambique.

For a list of publicly announced transactions please visit our website.

Asset Management

For the fourth quarter of 2023, Asset Management operating revenue was $274 million, 6% higher than the fourth quarter of 2022. For the full year of 2023, Asset Management operating revenue was $1,068 million, 3% lower than 2022.

For the fourth quarter of 2023, management fees and other revenue was $258 million, 5% higher than the fourth quarter of 2022, and 1% lower than the third quarter of 2023. Management fees and other revenue was $1,038 million for full-year 2023, 1% higher than 2022.

For the fourth quarter of 2023, incentive fees were $16 million, compared to $13 million for the fourth quarter of 2022. For the full year of 2023, incentive fees were $30 million, compared to $67 million for 2022.

Average assets under management (AUM) for the fourth quarter of 2023 was $234 billion, 11% higher than the fourth quarter of 2022, and 1% lower than the third quarter of 2023. Average assets under management for full-year 2023 was $233 billion, 2% higher than 2022.

AUM as of December 31, 2023, was $247 billion, 14% higher than December 31, 2022, and 8% higher than September 30, 2023. The sequential change from September 30, 2023 was driven by market and foreign exchange appreciation of $16.9 billion and $5.0 billion, respectively, offset by net outflows of $3.6 billion.

OPERATING EXPENSES

Compensation and Benefits

For the fourth quarter of 2023, adjusted compensation and benefits expense1 was $516 million, compared to $419 million for the fourth quarter of 2022. The adjusted compensation ratio for the fourth quarter of 2023 was 67.8%, compared to the fourth-quarter 2022 ratio of 62.4%.

For the full year of 2023, adjusted compensation and benefits expense was $1,703 million, 3% higher than 2022. The corresponding adjusted compensation ratio was 69.8%, compared to 59.8% for 2022.

We focus on a ratio of adjusted compensation-to-operating revenue to manage costs, balancing a view of current market conditions alongside our objective to drive long-term shareholder value. Our goal remains to maintain a compensation-to-operating revenue ratio over the cycle in the mid- to high-50s percentage range on an adjusted basis, while targeting a consistent deferral policy.

Non-Compensation Expense

For the fourth quarter of 2023, adjusted non-compensation expense1 was $148 million, 4% higher than the fourth quarter of 2022, primarily reflecting increased occupancy costs and professional services expenses.

The ratio of adjusted non-compensation expense to operating revenue was 19.5% for the fourth quarter of 2023, compared to 21.1% for the fourth quarter of 2022.

Adjusted non-compensation expense1 for 2023 was $572 million, 10% higher than 2022, primarily reflecting increased professional services expenses and occupancy costs. The ratio of non-compensation expense to operating revenue was 23.4% for 2023, compared to 18.7% for 2022.

Our goal remains to maintain an adjusted non-compensation expense to operating revenue ratio between 16% to 20% over the cycle.

TAXES

The provision for taxes, on an adjusted basis1 was $12 million for the fourth quarter and $13 million for full-year 2023. The effective tax rate on the same basis was 16.0% for the fourth quarter of 2023, compared to 26.3% for the fourth quarter of 2022 and 14.5% for full-year 2023 compared to 25.7% for full-year 2022.

CORPORATE STRUCTURE

Effective January 1, 2024, Lazard completed its conversion to a U.S. C-Corporation and changed its name from Lazard Ltd to Lazard, Inc.

CAPITAL MANAGEMENT AND BALANCE SHEET

In the fourth quarter of 2023, Lazard returned $44 million to shareholders, which included: $43.7 million in dividends and $0.6 million in satisfaction of employee tax obligations in lieu of share issuances upon vesting of equity grants.

In 2023, Lazard returned $330 million to shareholders, which included: $173 million in dividends; $102 million in repurchases of our common stock; and $55 million in satisfaction of employee tax obligations in lieu of share issuances upon vesting of equity grants.

During 2023, we repurchased 2.8 million shares. As of December 31, 2023, our remaining share repurchase authorization was $200 million.

On January 31, 2024, Lazard declared a quarterly dividend of $0.50 per share on its outstanding common stock. The dividend is payable on February 23, 2024, to stockholders of record on February 12, 2024.

Lazard’s financial position remains strong. As of December 31, 2023, our cash and cash equivalents were $971 million.

ENDNOTES

  1. A non-U.S. GAAP measure. See attached financial schedules and related notes for a detailed explanation of adjustments to corresponding U.S. GAAP results. We believe that presenting our results on an adjusted basis, in addition to the U.S. GAAP results, is the most meaningful and useful way to compare our operating results across periods.
  2. Fourth-quarter and full-year 2023 adjusted results1 exclude $0.2 million and $4.9 million, respectively, relating to losses associated with cost-saving initiatives, pre-tax charges of $16.6 million and $195.1 million, respectively, relating to expenses associated with cost-saving initiatives, full-year pre-tax charges of $10.7 million relating to expenses associated with senior management transition, $3.5 million and $43.9 million in the fourth quarter and full year relating to a benefit pursuant to tax receivable agreement obligation (“TRA”), and $19.1 million for the full year relating to certain asset impairment charges. Including the effect of taxes, these resulted in a net charge of $1.4 million, or $0.02, per share, diluted, for the fourth quarter, and a net charge of $150.5 million, or $1.69, per share, diluted, for the full year of 2023, on a U.S. GAAP basis.

CONFERENCE CALL

Lazard will host a conference call at 8:00 a.m. ET on February 1, 2024, to discuss the company’s financial results for the fourth quarter and full year of 2023. The conference call can be accessed via a live audio webcast available through Lazard’s Investor Relations website at www.lazard.com, or by dialing 1 800-579-2543 (toll-free, U.S. and Canada) or +1 203-518-9765 (outside of the U.S. and Canada), 15 minutes prior to the start of the call. Conference ID: LAZQ423.

A replay of the conference call will be available by 10:00 a.m. ET, February 1, 2024, via the Lazard Investor Relations website at www.lazard.com, or by dialing +1 800-938-2241 (toll-free, U.S. and Canada) or +1 402-220-1121 (outside of the U.S. and Canada).

ABOUT LAZARD

Founded in 1848, Lazard is one of the world's preeminent financial advisory and asset management firms, with operations in North and South America, Europe, the Middle East, Asia, and Australia. Lazard provides advice on mergers and acquisitions, capital markets and capital solutions, restructuring and liability management, geopolitics, and other strategic matters, as well as asset management and investment solutions to institutions, corporations, governments, partnerships, family offices, and high net worth individuals. For more information, please visit www.lazard.com.

Cautionary Note Regarding Forward-Looking Statements:

This press release contains forward-looking statements. In some cases, you can identify these statements by forward-looking words such as “may,” “might,” “will,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “target,” “goal,” or “continue,” and the negative of these terms and other comparable terminology. These forward-looking statements, which are subject to known and unknown risks, uncertainties and assumptions about us, may include projections of our future financial performance based on our strategies, business plans and initiatives and anticipated trends in our business. These forward-looking statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by these forward-looking statements.

These factors include, but are not limited to, those discussed in our Annual Report on Form 10-K under Item 1A “Risk Factors,” and also discussed from time to time in our reports on Forms 10-Q and 8-K, including the following:

  • A decline in general economic conditions or the global or regional financial markets;
  • A decline in our revenues, for example due to a decline in overall mergers and acquisitions (M&A) activity, our share of the M&A market or our assets under management (AUM);
  • Losses caused by financial or other problems experienced by third parties;
  • Losses due to unidentified or unanticipated risks;
  • A lack of liquidity, i.e., ready access to funds, for use in our businesses; and
  • Competitive pressure on our businesses and on our ability to retain and attract employees at current compensation levels
  • In the event of a change or adverse interpretation of relevant income tax law, regulation or treaty, or a failure to qualify for treaty benefits, or in the event tax authorities challenge our tax computations or classifications.

Although we believe the statements reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance, achievements or events. Neither we nor any other person assumes responsibility for the accuracy or completeness of any of these forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. We are under no duty to update any of these forward-looking statements after the date of this release to conform our prior statements to actual results or revised expectations and we do not intend to do so.

Lazard, Inc. is committed to providing timely and accurate information to the investing public, consistent with our legal and regulatory obligations. To that end, Lazard and its operating companies use their websites, and other social media sites to convey information about their businesses, including the anticipated release of quarterly financial results, quarterly financial, statistical and business-related information, and the posting of updates of assets under management in various mutual funds, hedge funds and other investment products managed by Lazard Asset Management LLC and Lazard Frères Gestion SAS. Investors can link to Lazard and its operating company websites through www.lazard.com.

***

LAZ-EPE

 

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(U.S. GAAP - unaudited)

 
 

 

Three Months Ended

 

% Change From

 

December 31,

 

September 30,

 

December 31,

 

September 30,

 

December 31,

($ in thousands, except per share data)

2023

 

2023

 

2022

 

2023

 

2022

 

 

 

 

 

 

 

 

 

 

Total revenue

$825,763

 

$543,170

 

$731,860

 

52%

 

13%

Interest expense

(19,742)

 

(19,252)

 

(19,471)

 

 

 

 

Net revenue

806,021

 

523,918

 

712,389

 

54%

 

13%

Operating expenses:

 

 

 

 

 

 

 

 

 

Compensation and benefits

559,207

 

364,605

 

474,843

 

53%

 

18%

 

 

 

 

 

 

 

 

 

 

Occupancy and equipment

33,436

 

33,108

 

30,907

 

 

 

 

Marketing and business development

27,259

 

20,754

 

26,674

 

 

 

 

Technology and information services

47,363

 

46,897

 

47,125

 

 

 

 

Professional services

23,129

 

20,451

 

21,292

 

 

 

 

Fund administration and outsourced services

27,450

 

27,884

 

24,614

 

 

 

 

Amortization and other acquisition-related costs

95

 

96

 

15

 

 

 

 

Other

19,644

 

14,980

 

14,988

 

 

 

 

Non-compensation expenses - Subtotal

178,376

 

164,170

 

165,615

 

9%

 

8%

Benefit pursuant to tax receivable agreement

(3,459)

 

 

(1,209)

 

 

 

 

Operating expenses

734,124

 

528,775

 

639,249

 

39%

 

15%

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

71,897

 

(4,857)

 

73,140

 

NM

 

(2%)

 

 

 

 

 

 

 

 

 

 

Provision (benefit) for income taxes

403

 

(11,631)

 

16,075

 

NM

 

NM

Net income

71,494

 

6,774

 

57,065

 

NM

 

25%

Net income (loss) attributable to noncontrolling interests

7,927

 

(365)

 

14,701

 

 

 

 

Net income attributable to Lazard Ltd

$63,567

 

$7,139

 

$42,364

 

NM

 

50%

 

 

 

 

 

 

 

 

 

 

Attributable to Lazard Ltd Common Stockholders:

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

90,228,532

 

89,425,900

 

88,173,431

 

1%

 

2%

Diluted

94,989,330

 

94,309,224

 

94,185,566

 

1%

 

1%

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share:

 

 

 

 

 

 

 

 

 

Basic

$0.69

 

$0.07

 

$0.47

 

NM

 

47%

Diluted

$0.65

 

$0.06

 

$0.44

 

NM

 

48%

 

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(U.S. GAAP - unaudited)

 
 

 

Year Ended

 

December 31,

 

December 31,

 

 

($ in thousands, except per share data)

2023

 

2022

 

% Change

 

 

 

 

 

 

Total revenue

$2,593,162

 

$2,855,093

 

(9%)

Interest expense

(77,673)

 

(81,522)

 

 

Net revenue

2,515,489

 

2,773,571

 

(9%)

Operating expenses:

 

 

 

 

 

Compensation and benefits

1,946,010

 

1,656,451

 

17%

 

 

 

 

 

 

Occupancy and equipment

131,117

 

122,251

 

 

Marketing and business development

99,357

 

83,103

 

 

Technology and information services

189,670

 

171,702

 

 

Professional services

89,308

 

69,535

 

 

Fund administration and outsourced services

110,878

 

109,978

 

 

Amortization and other acquisition-related costs

334

 

60

 

 

Other

72,666

 

44,852

 

 

Non-compensation expenses - Subtotal

693,330

 

601,481

 

15%

Benefit pursuant to tax receivable agreement

(43,894)

 

(1,209)

 

 

Operating expenses

2,595,446

 

2,256,723

 

15%

 

 

 

 

 

 

Operating income (loss)

(79,957)

 

516,848

 

NM

 

 

 

 

 

 

Provision (benefit) for income taxes

(22,650)

 

124,365

 

NM

Net income (loss)

(57,307)

 

392,483

 

NM

Net income attributable to noncontrolling interests

18,172

 

34,966

 

 

Net income (loss) attributable to Lazard Ltd

($75,479)

 

$357,517

 

NM

 

 

 

 

 

 

Attributable to Lazard Ltd Common Stockholders:

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

Basic

88,993,985

 

95,664,129

 

(7%)

Diluted

88,993,985

 

100,997,674

 

(12%)

 

 

 

 

 

 

Net income (loss) per share:

 

 

 

 

 

Basic

($0.90)

 

$3.68

 

NM

Diluted

($0.90)

 

$3.51

 

NM

 

CONDENSED CONSOLIDATED

STATEMENT OF FINANCIAL CONDITION

(U.S. GAAP - unaudited)

 
 

 

December 31,

 

December 31,

($ in thousands)

2023

 

2022

 

 

 

 

ASSETS

 

 

 

 

Cash and cash equivalents

$971,316

 

$1,234,773

Deposits with banks and short-term investments

219,576

 

779,246

Restricted cash

34,091

 

625,381

Receivables

762,319

 

652,758

Investments

701,964

 

698,977

Property

232,516

 

250,073

Goodwill and other intangible assets

394,928

 

377,330

Operating lease right-of-use assets

407,213

 

431,608

Deferred tax assets

497,340

 

407,657

Other assets

414,518

 

394,758

 

 

 

 

Total Assets

$4,635,781

 

$5,852,561

 

 

 

 

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS & STOCKHOLDERS' EQUITY

 

 

 

 

Liabilities

 

 

 

 

 

 

 

Deposits and other customer payables

$443,262

 

$921,834

Accrued compensation and benefits

781,375

 

735,576

Operating lease liabilities

485,191

 

513,688

Tax receivable agreement obligation

115,087

 

191,189

Senior debt

1,690,200

 

1,687,714

Other liabilities

550,804

 

543,690

Total liabilities

4,065,919

 

4,593,691

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

Redeemable noncontrolling interests

87,675

 

583,471

 

 

 

 

Stockholders' equity

 

 

 

 

 

 

 

Preferred stock, par value $.01 per share

 

Common stock, par value $.01 per share

1,128

 

1,128

Additional paid-in capital

247,204

 

167,890

Retained earnings

1,402,636

 

1,676,713

Accumulated other comprehensive loss, net of tax

(289,950)

 

(295,854)

Subtotal

1,361,018

 

1,549,877

Class A common stock held by subsidiaries, at cost

(937,259)

 

(993,414)

Total Lazard Ltd stockholders' equity

423,759

 

556,463

Noncontrolling interests

58,428

 

118,936

Total stockholders' equity

482,187

 

675,399

 

 

 

 

Total liabilities, redeemable noncontrolling interests and stockholders' equity

$4,635,781

 

$5,852,561

Note: "Property" includes $73 million of property held for sale at December 31, 2023.

 

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)

2023

 

2023

 

2022

 

2023

 

2022

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial Advisory

$477,366

 

$261,441

 

$403,836

 

83%

 

18%

Asset Management

273,694

 

262,162

 

258,618

 

4%

 

6%

Corporate

9,898

 

8,014

 

8,507

 

24%

 

16%

 

 

 

 

 

 

 

 

 

 

Operating revenue (b)

$760,958

 

$531,617

 

$670,961

 

43%

 

13%

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted compensation and benefits expense (c)

$515,724

 

$363,626

 

$418,598

 

42%

 

23%

Ratio of adjusted compensation to operating revenue

67.8%

 

68.4%

 

62.4%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted non-compensation expenses (d)

$148,119

 

$137,450

 

$141,843

 

8%

 

4%

Ratio of adjusted non-compensation to operating revenue

19.5%

 

25.9%

 

21.1%

 

 

 

 

 

Earnings:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings from operations (e)

$97,115

 

$30,541

 

$110,520

 

NM

 

(12%)

Operating margin (f)

12.8%

 

5.7%

 

16.5%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income (g)

$65,011

 

$10,268

 

$67,130

 

NM

 

(3%)

 

 

 

 

 

 

 

 

 

 

Diluted adjusted net income per share

$0.66

 

$0.10

 

$0.69

 

NM

 

(4%)

 

 

 

 

 

 

 

 

 

 

Diluted adjusted weighted average shares (h)

99,154,021

 

98,282,239

 

97,222,787

 

1%

 

2%

 

 

 

 

 

 

 

 

 

 

Adjusted effective tax rate (i)

16.0%

 

8.4%

 

26.3%

 

 

 

 

 

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.

 

SELECTED SUMMARY FINANCIAL INFORMATION (a)

(Non-GAAP - unaudited)

 
 

 

Year Ended

 

December 31,

 

December 31,

 

 

($ in thousands, except per share data)

2023

 

2022

 

% Change

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

Financial Advisory

$1,356,835

 

$1,652,422

 

(18%)

Asset Management

1,067,559

 

1,098,665

 

(3%)

Corporate

15,225

 

17,971

 

(15%)

 

 

 

 

 

 

Operating revenue (b)

$2,439,619

 

$2,769,058

 

(12%)

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

Adjusted compensation and benefits expense (c)

$1,702,537

 

$1,656,838

 

3%

Ratio of adjusted compensation to operating revenue

69.8%

 

59.8%

 

 

 

 

 

 

 

 

Adjusted non-compensation expenses (d)

$571,504

 

$518,173

 

10%

Ratio of adjusted non-compensation to operating revenue

23.4%

 

18.7%

 

 

 

Earnings:

 

 

 

 

 

 

 

 

 

 

 

Earnings from operations (e)

$165,578

 

$594,047

 

(72%)

Operating margin (f)

6.8%

 

21.5%

 

 

 

 

 

 

 

 

Adjusted net income (g)

$75,023

 

$384,402

 

(80%)

 

 

 

 

 

 

Diluted adjusted net income per share

$0.77

 

$3.73

 

(79%)

 

 

 

 

 

 

Diluted adjusted weighted average shares (h)

97,450,393

 

103,193,048

 

(6%)

 

 

 

 

 

 

Adjusted effective tax rate (i)

14.5%

 

25.7 %

 

 

 

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.

 

COMPENSATION AND BENEFITS - ANALYSIS

(Non-GAAP - unaudited)

 
 

($ in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted U.S. GAAP Basis (c)

 

2023

 

2022

 

2021

 

2020

 

2019

 

2018

 

2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Base salary

$558

 

$535

 

$487

 

$455

 

$447

 

$432

 

$405

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Benefits and other

291

 

293

 

287

 

228

 

258

 

264

 

243

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current cash incentive compensation (j)

365

 

458

 

662

 

435

 

391

 

446

 

466

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total cash compensation, benefits and other

1,213

 

1,286

 

1,436

 

1,118

 

1,096

 

1,141

 

1,114

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of deferred incentive awards

489

 

371

 

400

 

384

 

368

 

376

 

367

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted compensation and benefits expense (k)

$1,703

 

$1,657

 

$1,836

 

$1,502

 

$1,464

 

$1,517

 

$1,481

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

% of Operating Revenue

69.8%

 

59.8%

 

58.5%

 

59.5%

 

57.5%

 

55.1%

 

55.8%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Memo:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating revenue

 

$2,440

 

$2,769

 

$3,139

 

$2,524

 

$2,546

 

$2,755

 

$2,655

 

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.

 

ASSETS UNDER MANAGEMENT

(unaudited)

 
 

($ in millions)

As of

 

Variance

 

December 31,

 

September 30,

 

December 31,

 

 

 

 

 

2023

 

2023

 

2022

 

Qtr to Qtr

 

YTD

 

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

 

 

 

Emerging Markets

$25,288

 

$23,606

 

$21,557

 

7.1%

 

17.3%

Global

53,528

 

49,709

 

46,861

 

7.7%

 

14.2%

Local

52,208

 

48,016

 

47,504

 

8.7%

 

9.9%

Multi-Regional

59,114

 

53,417

 

51,473

 

10.7%

 

14.8%

Total Equity

190,138

 

174,748

 

167,395

 

8.8%

 

13.6%

Fixed Income:

 

 

 

 

 

 

 

 

 

Emerging Markets

9,525

 

9,069

 

8,944

 

5.0%

 

6.5%

Global

10,762

 

10,924

 

11,029

 

(1.5%)

 

(2.4%)

Local

6,080

 

5,868

 

5,352

 

3.6%

 

13.6%

Multi-Regional

21,740

 

19,317

 

18,061

 

12.5%

 

20.4%

Total Fixed Income

48,107

 

45,178

 

43,386

 

6.5%

 

10.9%

Alternative Investments

3,330

 

3,593

 

3,812

 

(7.3%)

 

(12.6%)

Other Alternative Investments

2,799

 

2,799

 

 

–%

 

NM

Private Equity

1,623

 

1,298

 

1,038

 

25.0%

 

56.4%

Cash Management

654

 

648

 

494

 

0.9%

 

32.4%

Total AUM

$246,651

 

$228,264

 

$216,125

 

8.1%

 

14.1%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended December 31,

 

 

 

Year Ended December 31,

 

2023

 

2022

 

 

 

2023

 

2022

 

 

 

 

 

 

 

 

 

 

AUM - Beginning of Period

$228,264

 

$197,766

 

 

 

$216,125

 

$273,739

 

 

 

 

 

 

 

 

 

 

Net Flows (l)

(3,550)

 

(3,735)

 

 

 

(3,542)

 

(16,915)

Market and foreign exchange

 

 

 

 

 

 

 

 

 

appreciation (depreciation)

21,937

 

22,094

 

 

 

34,068

 

(40,699)

 

 

 

 

 

 

 

 

 

 

AUM - End of Period

$246,651

 

$216,125

 

 

 

$246,651

 

$216,125

 

 

 

 

 

 

 

 

 

 

Average AUM

$233,949

 

$211,243

 

 

 

$233,098

 

$227,444

 

 

 

 

 

 

 

 

 

 

% Change in average AUM

10.7 %

 

 

 

 

 

2.5%

 

 

 

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

 

RECONCILIATION OF U.S. GAAP TO SELECTED SUMMARY FINANCIAL INFORMATION (a)

(unaudited)

 
 

 

Three Months Ended

 

Year Ended

 

December 31,

 

September 30,

 

December 31,

 

December 31,

 

December 31,

($ in thousands, except per share data)

2023

 

2023

 

2022

 

2023

 

2022

 

 

 

 

 

 

 

 

 

 

Operating Revenue

Net revenue - U.S. GAAP Basis

$806,021

 

$523,918

 

$712,389

 

$2,515,489

 

$2,773,571

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

Revenue related to noncontrolling interests (m)

(10,235)

 

(2,895)

 

(16,771)

 

(30,190)

 

(49,073)

(Gains) losses related to Lazard Fund Interests ("LFI") and other similar arrangements

(25,933)

 

10,598

 

(21,340)

 

(41,463)

 

44,261

Distribution fees, reimbursable deal costs, bad debt expense and other (n)

(28,782)

 

(23,880)

 

(22,736)

 

(105,681)

 

(76,229)

Asset impairment charges (o)

 

 

 

19,129

 

Losses associated with cost-saving initiatives (p)

231

 

4,647

 

 

4,878

 

Interest expense

19,656

 

19,229

 

19,419

 

77,457

 

76,528

 

 

 

 

 

 

 

 

 

 

Operating revenue, as adjusted (b)

$760,958

 

$531,617

 

$670,961

 

$2,439,619

 

$2,769,058

 

 

 

 

 

 

 

 

 

 

Compensation and Benefits Expense

Compensation and benefits expense - U.S. GAAP Basis

$559,207

 

$364,605

 

$474,843

 

$1,946,010

 

$1,656,451

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

(Charges) credits pertaining to LFI and other similar arrangements

(25,933)

 

10,598

 

(21,340)

 

(41,463)

 

44,261

Expenses associated with cost-saving initiatives (q)

(15,814)

 

(8,941)

 

 

(182,103)

 

Expenses associated with senior management transition (r)

 

 

(33,019)

 

(10,674)

 

(33,019)

Compensation related to noncontrolling interests (m)

(1,736)

 

(2,636)

 

(1,886)

 

(9,233)

 

(10,855)

 

 

 

 

 

 

 

 

 

 

Compensation and benefits expense, as adjusted (c)

$515,724

 

$363,626

 

$418,598

 

$1,702,537

 

$1,656,838

 

 

 

 

 

 

 

 

 

 

Non-Compensation Expense

Non-compensation expenses - Subtotal - U.S. GAAP Basis

$178,376

 

$164,170

 

$165,615

 

$693,330

 

$601,481

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

Expenses associated with cost-saving initiatives (q)

(807)

 

(2,119)

 

 

(13,023)

 

Expenses related to office space reorganization (s)

 

 

(836)

 

 

(3,764)

Distribution fees, reimbursable deal costs, bad debt expense and other (n)

(28,782)

 

(23,880)

 

(22,736)

 

(105,681)

 

(76,229)

Amortization and other acquisition-related costs

(95)

 

(96)

 

(15)

 

(334)

 

(60)

Non-compensation expense related to noncontrolling interests (m)

(573)

 

(625)

 

(185)

 

(2,788)

 

(3,255)

 

 

 

 

 

 

 

 

 

 

Adjusted non-compensation expenses (d)

$148,119

 

$137,450

 

$141,843

 

$571,504

 

$518,173

 

 

 

 

 

 

 

 

 

 

Pre-Tax Income and Earnings From Operations

Operating Income (Loss) - U.S. GAAP Basis

$71,897

 

($4,857)

 

$73,140

 

($79,957)

 

$516,848

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

Benefit pursuant to tax receivable agreement obligation ("TRA") (t)

(3,459)

 

 

(1,209)

 

(43,894)

 

(1,209)

Asset impairment charges (o)

 

 

 

19,129

 

Losses associated with cost-saving initiatives (p)

231

 

4,647

 

 

4,878

 

Expenses associated with cost-saving initiatives (q)

16,621

 

11,060

 

 

195,126

 

Expenses associated with senior management transition (r)

 

 

33,019

 

10,674

 

33,019

Expenses related to office space reorganization (s)

 

 

836

 

 

3,764

Net (income) loss related to noncontrolling interests (m)

(7,927)

 

364

 

(14,701)

 

(18,173)

 

(34,966)

Pre-tax income, as adjusted

77,363

 

11,214

 

91,085

 

87,783

 

517,456

Interest expense

19,656

 

19,229

 

19,419

 

77,457

 

76,528

Amortization and other acquisition-related costs

96

 

98

 

16

 

338

 

63

Earnings from operations, as adjusted (e)

$97,115

 

$30,541

 

$110,520

 

$165,578

 

$594,047

 

 

 

 

 

 

 

 

 

 

Net Income attributable to Lazard Ltd

Net income (loss) attributable to Lazard Ltd - U.S. GAAP Basis

$63,567

 

$7,139

 

$42,364

 

($75,479)

 

$357,517

Adjustments:

 

 

 

 

 

 

 

 

 

Benefit pursuant to tax receivable agreement obligation ("TRA") (t)

(3,459)

 

 

(1,209)

 

(43,894)

 

(1,209)

Asset impairment charges (o)

 

 

 

19,129

 

Losses associated with cost-saving initiatives (p)

231

 

4,647

 

 

4,878

 

Expenses associated with cost-saving initiatives (q)

16,621

 

11,060

 

 

195,126

 

Expenses associated with senior management transition (r)

 

 

33,019

 

10,674

 

33,019

Expenses related to office space reorganization (s)

 

 

836

 

 

3,764

Tax benefit allocated to adjustments

(11,949)

 

(12,578)

 

(7,880)

 

(35,411)

 

(8,689)

 

 

 

 

 

 

 

 

 

 

Net income, as adjusted (g)

$65,011

 

$10,268

 

$67,130

 

$75,023

 

$384,402

 

 

 

 

 

 

 

 

 

 

Diluted Weighted Average Shares Outstanding

Diluted Weighted Average Shares Outstanding - U.S. GAAP Basis

94,989,330

 

94,309,224

 

94,185,566

 

88,993,985

 

100,997,674

Adjustment: participating securities including profits interest participation rights and other

4,164,691

 

3,973,015

 

3,037,221

 

8,456,408

 

2,195,374

 

 

 

 

 

 

 

 

 

 

Diluted Adjusted Weighted Average Shares Outstanding (h)

99,154,021

 

98,282,239

 

97,222,787

 

97,450,393

 

103,193,048

 

 

 

 

 

 

 

 

 

 

Diluted net income (loss) per share:

 

 

 

 

 

 

 

 

 

U.S. GAAP Basis

$0.65

 

$0.06

 

$0.44

 

($0.90)

 

$3.51

Non-GAAP Basis, as adjusted

$0.66

 

$0.10

 

$0.69

 

$0.77

 

$3.73

 

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

 

See Notes to Financial Schedules

 

RECONCILIATION OF NON-COMPENSATION U.S. GAAP TO ADJUSTED (a)

(unaudited)

 
 

 

Three Months Ended

 

Year Ended

 

December 31,

 

September 30,

 

December 31,

 

December 31,

 

December 31,

($ in thousands)

2023

 

2023

 

2022

 

2023

 

2022

 

 

 

 

 

 

 

 

 

 

Non-compensation expenses - U.S. GAAP Basis:

 

 

 

 

 

 

 

 

 

Occupancy and equipment

$33,436

 

$33,108

 

$30,907

 

$131,117

 

$122,251

Marketing and business development

27,259

 

20,754

 

26,674

 

99,357

 

83,103

Technology and information services

47,363

 

46,897

 

47,125

 

189,670

 

171,702

Professional services

23,129

 

20,451

 

21,292

 

89,308

 

69,535

Fund administration and outsourced services

27,450

 

27,884

 

24,614

 

110,878

 

109,978

Amortization and other acquisition-related costs

95

 

96

 

15

 

334

 

60

Other

19,644

 

14,980

 

14,988

 

72,666

 

44,852

Non-compensation expenses - Subtotal - U.S. GAAP Basis

$178,376

 

$164,170

 

$165,615

 

$693,330

 

$601,481

 

 

 

 

 

 

 

 

 

 

Non-compensation expense - Adjustments:

 

 

 

 

 

 

 

 

 

Occupancy and equipment (m) (q) (s)

($197)

 

($762)

 

($828)

 

($1,898)

 

($3,887)

Marketing and business development (m) (n) (q)

(3,748)

 

(3,659)

 

(3,656)

 

(15,299)

 

(9,440)

Technology and information services (m) (n) (q)

(149)

 

(612)

 

(45)

 

(8,270)

 

(159)

Professional services (m) (n) (q) (s)

(1,306)

 

(1,711)

 

(618)

 

(6,408)

 

(2,269)

Fund administration and outsourced services (m) (n)

(16,546)

 

(16,432)

 

(14,092)

 

(65,239)

 

(60,646)

Amortization and other acquisition-related costs

(95)

 

(96)

 

(15)

 

(334)

 

(60)

Other (m) (n) (q) (s)

(8,216)

 

(3,448)

 

(4,518)

 

(24,378)

 

(6,847)

Subtotal Non-compensation adjustments

($30,257)

 

($26,720)

 

($23,772)

 

($121,826)

 

($83,308)

 

 

 

 

 

 

 

 

 

 

Non-compensation expenses, as adjusted:

 

 

 

 

 

 

 

 

 

Occupancy and equipment

$33,239

 

$32,346

 

$30,079

 

$129,219

 

$118,364

Marketing and business development

23,511

 

17,095

 

23,018

 

84,058

 

73,663

Technology and information services

47,214

 

46,285

 

47,080

 

181,400

 

171,543

Professional services

21,823

 

18,740

 

20,674

 

82,900

 

67,266

Fund administration and outsourced services

10,904

 

11,452

 

10,522

 

45,639

 

49,332

Amortization and other acquisition-related costs

 

 

 

 

Other

11,428

 

11,532

 

10,470

 

48,288

 

38,005

Adjusted non-compensation expenses (d)

$148,119

 

$137,450

 

$141,843

 

$571,504

 

$518,173

 

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

 

See Notes to Financial Schedules

 
 

 

Notes to Financial Schedules

(a)

Selected Summary Financial Information is prepared on a non-GAAP basis. Lazard believes that presenting results and measures on an adjusted basis in conjunction with U.S. GAAP measures provides a meaningful and useful basis for comparison of its operating results across periods.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(b)

A non-GAAP measure which excludes (i) revenue related to non-controlling interests (see (m) below), (ii) (gains) losses related to the changes in the fair value of investments held in connection with Lazard Fund Interests and other similar deferred compensation arrangements for which a corresponding equal amount is excluded from compensation & benefits expense, (iii) revenue related to distribution fees, reimbursable deal costs in accordance with the revenue recognition guidance, bad debt expense, and other (see (n) below), (iv) for the twelve month period ended December 31, 2023, asset impairment charges, (see (o) below), (v) for the three and twelve month periods ended December 31, 2023 and for the three month period ended September 30, 2023, losses associated with cost-saving initiatives (see (p) below), and (vi) interest expense primarily related to corporate financing activities.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(c)

A non-GAAP measure which excludes (i) (charges) credits related to the changes in the fair value of the compensation liability recorded in connection with Lazard Fund Interests and other similar deferred compensation arrangements, (ii) for the three and twelve month periods ended December 31, 2023 and for the three month period ended September 30, 2023, expenses associated with cost-saving initiatives (see (q) below), (iii) for the twelve month period ended December 31, 2023 and the three and twelve month periods ended December 31, 2022, expenses associated with senior management transition (see (r) below), and (iv) compensation and benefits related to noncontrolling interests (see (m) below).

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(d)

A non-GAAP measure which excludes (i) for the three and twelve month periods ended December 31, 2023 and for the three month period ended September 30, 2023, expenses associated with cost-saving initiatives (see (q) below), (ii) for the three and twelve month periods ended December 31, 2022, expenses related to office space reorganization (see (s) below), (iii) expenses related to distribution fees, reimbursable deal costs in accordance with the revenue recognition guidance, bad debt expense, and other (see (n) below), (iv) amortization and other acquisition-related costs, and (v) expenses related to noncontrolling interests (see (m) below).

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(e)

A non-GAAP measure which excludes (i) for the three and twelve month periods ended December 31, 2023 and December 31, 2022, a benefit pursuant to tax receivable agreement obligation ("TRA") (see (t) below), (ii) for the twelve month period ended December 31, 2023, asset impairment charges (see (o) below), (iii) for the three and twelve month periods ended December 31, 2023 and for the three month period ended September 30, 2023, losses and expenses associated with cost-saving initiatives (see (p) and (q) below), (iv) for the twelve month period ended December 31, 2023 and for the three and twelve month periods ended December 31, 2022, expenses associated with senior management transition (see (r) below), (v) for the three and twelve month periods ended December 31, 2022, expenses related to office space reorganization (see (s) below), (vi) net revenue and expenses related to noncontrolling interests (see (m) below), (vii) interest expense primarily related to corporate financing activities, and (viii) amortization and other acquisition-related costs.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(f)

Represents earnings from operations as a percentage of operating revenue, and is a non-GAAP measure.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(g)

A non-GAAP measure which excludes (i) for the three and twelve month periods ended December 31, 2023 and December 31, 2022, a benefit pursuant to tax receivable agreement obligation (see (t) below), (ii) for the twelve month period ended December 31, 2023, asset impairment charges (see (o) below), (iii) for the three and twelve month periods ended December 31, 2023 and for the three month period ended September 30, 2023, losses and expenses associated with cost-saving initiatives (see (p) and (q) below), (iv) for the twelve month period ended December 31, 2023 and for the three and twelve month periods ended December 31, 2022, expenses associated with senior management transition (see (r) below), and (v) for the three and twelve month periods ended December 31, 2022, expenses related to office space reorganization (see (s) below), net of tax benefits.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(h)

A non-GAAP measure which includes units of the long-term incentive compensation program consisting of profits interest participation rights, which are equity incentive awards that, subject to certain conditions, may be exchanged for shares of our common stock. Certain profits interest participation rights and other participating securities may be excluded from the computation of outstanding stock equivalents for U.S. GAAP net income per share. In addition, for the period ended December 31, 2023, includes the dilutive effect of weighted average number of incremental shares of common stock issuable from share-based incentive compensation.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(i)

The adjusted effective tax rate is a non-GAAP measure based upon the U.S. GAAP rate with adjustments for the tax applicable to the non-GAAP adjustments to operating income, 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 $12,352, $946, and $23,955 for the three month periods ended December 31, 2023, September 30, 2023, and December 31, 2022, respectively, $12,760 and $133,054 for the twelve month periods ended December 31, 2023 and 2022 and the denominator of which is pre-tax income of $77,363, $11,214, and $91,085 for the three month periods ended December 31, 2023, September 30, 2023, and December 31, 2022, respectively, $87,783 and $517,456 for the twelve month periods ended December 31, 2023 and 2022.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(j)

Current cash incentive compensation is composed of cash bonuses for a given year which are paid early in the following year, and for which no future service is required.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(k)

A reconciliation of U.S. GAAP compensation and benefits expense to compensation and benefits expense, as adjusted:

 

 

 

 

Year Ended December 31,

 

($ in thousands)

2023

 

2022

 

2021

 

2020

 

2019

 

2018

 

2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation & benefits expense - U.S. GAAP Basis

$ 1,946,010

 

$ 1,656,451

 

$ 1,895,859

 

$ 1,550,684

 

$ 1,563,395

 

$ 1,514,735

 

$ 1,512,873

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses associated with restructuring and closing of certain offices

 

 

(14,922)

 

 

 

 

 

Charges associated with business realignment (u)

 

 

 

 

(56,635)

 

 

 

Charges pertaining to ERP system implementation

 

 

 

 

 

(1,190)

 

 

(Charges) credits pertaining to LFI and other similar arrangements comp. liability

(41,463)

 

44,261

 

(35,494)

 

(40,634)

 

(31,657)

 

14,086

 

(23,526)

 

Expenses associated with cost-saving initiatives (q)

(182,103)

 

 

 

 

 

 

 

Expenses associated with senior management transition (r)

(10,674)

 

(33,019)

 

 

 

 

 

 

Compensation related to noncontrolling interests (m)

(9,233)

 

(10,855)

 

(9,216)

 

(7,927)

 

(11,175)

 

(10,999)

 

(8,285)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation & benefits expense, as adjusted

$1,702,537

 

$1,656,838

 

$1,836,227

 

$1,502,123

 

$1,463,928

 

$1,516,632

 

$1,481,062

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(l)

For the twelve month period ended December 31, 2023, includes approximately $3.9 billion of net flows related to a wealth management acquisition.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(m)

Noncontrolling interests include revenue and expenses principally related to Edgewater, ESC Funds and a Special Purpose Acquisition Company.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(n)

Represents certain distribution, introducer and management fees paid to third parties and reimbursable deal costs for which an equal amount is excluded from both non-GAAP operating revenue and non-compensation expenses, respectively, and excludes bad debt expense, which represents fees and other receivables that are deemed uncollectible.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(o)

Represents certain asset impairment charges.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(p)

Represents losses associated with the closing of certain offices as part of the cost-saving initiatives including the reclassification of currency translation adjustments to earnings from accumulated other comprehensive loss and transactions related to foreign currency exchange.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(q)

Represents expenses associated with cost-saving initiatives including closing certain offices over the course of 2023.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(r)

Represents expenses associated with senior management transition reflecting the departure of certain executive officers.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(s)

Represents building depreciation and other costs related to office space reorganization.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(t)

Pursuant to the periodic revaluation of the TRA liability and the assumptions reflected in the estimate, the revaluation had the effect of reducing the estimated liability under the TRA. As a result, the Company recorded a “benefit pursuant to tax receivable agreement” of $3,459 for the three month period ended December 31, 2023, $43,894 for the twelve month period ended December 31, 2023 and $1,209 for the three and twelve month periods ended December 31, 2022.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(u)

Represents expenses and losses associated with a business realignment which included employee reductions and the closing of subscale offices and investment strategies.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NM

Not meaningful

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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