Lazard Reports Fourth-Quarter and Full-Year 2023 Results
- None.
- None.
Insights
Examining Lazard Inc.'s financials presents a mixed picture. The increase in Q4 net revenue by 13% year-over-year alongside an 18% rise in Financial Advisory operating revenue signals a robust end to the year. However, the full-year perspective reveals a net loss of $75 million, a stark contrast to the previous year's significant net income. This discrepancy suggests that while Lazard has experienced a strong quarter, the overall annual performance has been affected by broader market conditions or internal challenges. The rise in AUM by 14% to $247 billion is noteworthy, indicating growth in the Asset Management segment, which could be attributed to market appreciation and new client inflows. However, the adjusted compensation ratio increase to 69.8% from 59.8% year-over-year raises concerns about cost management, especially when aiming to maintain it in the mid- to high-50s percentage range.
From a market dynamics perspective, Lazard's performance reflects the volatility and complexity of the current financial landscape. The significant engagements in M&A transactions indicate a competitive positioning within the sector, capturing high-value deals despite a challenging economic environment. The shift in the compensation and non-compensation expense ratios, however, merits attention. While an increase in compensation costs could be seen as an investment in talent to drive future growth, it also suggests a pressure on margins that may not be sustainable in the long term without a corresponding increase in revenue. Additionally, the increase in non-compensation expenses, primarily due to professional services and occupancy costs, could indicate strategic investments or potential inefficiencies that need to be addressed.
From a legal and structural standpoint, Lazard's conversion to a U.S. C-Corporation effective January 1, 2024, is a significant change. This move could streamline the company's tax structure and potentially attract a broader base of investors by simplifying the ownership model. The corporate restructuring might also reflect a strategic maneuver to optimize capital management in response to the evolving regulatory and tax environment. The effective tax rate reduction to 14.5% for the full year from 25.7% the previous year could be a result of this restructuring or other tax planning strategies, which would have a positive impact on net income, despite the reported net loss on a GAAP basis.
Annual net revenue was
“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) |
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|
|
|
|
|
|
|
|
|
|
|
|
|
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( |
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NM |
Per share, diluted |
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( |
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NM |
Adjusted2 |
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( |
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( |
Per share, diluted |
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( |
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( |
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Revenue |
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( |
Total operating revenue1 |
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|
( |
Financial Advisory |
|
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|
|
|
|
|
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( |
Asset Management |
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|
|
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( |
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AUM ($ in billions) |
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Period end |
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Average |
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|
Note: Endnotes are on page 5 of this release. A reconciliation of adjusted GAAP to
OPERATING REVENUE
Operating revenue was
Financial Advisory
For the fourth quarter of 2023, Financial Advisory operating revenue was
For the full year of 2023, Financial Advisory operating revenue was
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
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
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
For a list of publicly announced transactions please visit our website.
Asset Management
For the fourth quarter of 2023, Asset Management operating revenue was
For the fourth quarter of 2023, management fees and other revenue was
For the fourth quarter of 2023, incentive fees were
Average assets under management (AUM) for the fourth quarter of 2023 was
AUM as of December 31, 2023, was
OPERATING EXPENSES
Compensation and Benefits
For the fourth quarter of 2023, adjusted compensation and benefits expense1 was
For the full year of 2023, adjusted compensation and benefits expense was
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
The ratio of adjusted non-compensation expense to operating revenue was
Adjusted non-compensation expense1 for 2023 was
Our goal remains to maintain an adjusted non-compensation expense to operating revenue ratio between
TAXES
The provision for taxes, on an adjusted basis1 was
CORPORATE STRUCTURE
Effective January 1, 2024, Lazard completed its conversion to a
CAPITAL MANAGEMENT AND BALANCE SHEET
In the fourth quarter of 2023, Lazard returned
In 2023, Lazard returned
During 2023, we repurchased 2.8 million shares. As of December 31, 2023, our remaining share repurchase authorization was
On January 31, 2024, Lazard declared a quarterly dividend of
Lazard’s financial position remains strong. As of December 31, 2023, our cash and cash equivalents were
ENDNOTES
-
A non-
U.S. GAAP measure. See attached financial schedules and related notes for a detailed explanation of adjustments to correspondingU.S. GAAP results. We believe that presenting our results on an adjusted basis, in addition to theU.S. GAAP results, is the most meaningful and useful way to compare our operating results across periods. -
Fourth-quarter and full-year 2023 adjusted results1 exclude
$0.2 million $4.9 million $16.6 million $195.1 million $10.7 million $3.5 million $43.9 million $19.1 million $1.4 million $0.02 $150.5 million $1.69 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,
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,
ABOUT LAZARD
Founded in 1848, Lazard is one of the world's preeminent financial advisory and asset management firms, with operations in
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
|
|||||||||
|
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 |
|
|
|
|
|
|
|
|
|
Interest expense |
(19,742) |
|
(19,252) |
|
(19,471) |
|
|
|
|
Net revenue |
806,021 |
|
523,918 |
|
712,389 |
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
Compensation and benefits |
559,207 |
|
364,605 |
|
474,843 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
|
|
|
Benefit pursuant to tax receivable agreement |
(3,459) |
|
– |
|
(1,209) |
|
|
|
|
Operating expenses |
734,124 |
|
528,775 |
|
639,249 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss) |
71,897 |
|
(4,857) |
|
73,140 |
|
NM |
|
( |
|
|
|
|
|
|
|
|
|
|
Provision (benefit) for income taxes |
403 |
|
(11,631) |
|
16,075 |
|
NM |
|
NM |
Net income |
71,494 |
|
6,774 |
|
57,065 |
|
NM |
|
|
Net income (loss) attributable to noncontrolling interests |
7,927 |
|
(365) |
|
14,701 |
|
|
|
|
Net income attributable to Lazard Ltd |
|
|
|
|
|
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to Lazard Ltd Common Stockholders: |
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
Basic |
90,228,532 |
|
89,425,900 |
|
88,173,431 |
|
|
|
|
Diluted |
94,989,330 |
|
94,309,224 |
|
94,185,566 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share: |
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
|
|
NM |
|
|
Diluted |
|
|
|
|
|
|
NM |
|
|
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
|
|||||
|
Year Ended |
||||
|
December 31, |
|
December 31, |
|
|
($ in thousands, except per share data) |
2023 |
|
2022 |
|
% Change |
|
|
|
|
|
|
Total revenue |
|
|
|
|
( |
Interest expense |
(77,673) |
|
(81,522) |
|
|
Net revenue |
2,515,489 |
|
2,773,571 |
|
( |
Operating expenses: |
|
|
|
|
|
Compensation and benefits |
1,946,010 |
|
1,656,451 |
|
|
|
|
|
|
|
|
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 |
|
|
Benefit pursuant to tax receivable agreement |
(43,894) |
|
(1,209) |
|
|
Operating expenses |
2,595,446 |
|
2,256,723 |
|
|
|
|
|
|
|
|
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 |
( |
|
|
|
NM |
|
|
|
|
|
|
Attributable to Lazard Ltd Common Stockholders: |
|
|
|
|
|
Weighted average shares outstanding: |
|
|
|
|
|
Basic |
88,993,985 |
|
95,664,129 |
|
( |
Diluted |
88,993,985 |
|
100,997,674 |
|
( |
|
|
|
|
|
|
Net income (loss) per share: |
|
|
|
|
|
Basic |
( |
|
|
|
NM |
Diluted |
( |
|
|
|
NM |
CONDENSED CONSOLIDATED
|
|||
|
December 31, |
|
December 31, |
($ in thousands) |
2023 |
|
2022 |
|
|
|
|
ASSETS |
|||
|
|
|
|
Cash and cash equivalents |
|
|
|
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 |
|
|
|
|
|
|
|
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS & STOCKHOLDERS' EQUITY |
|||
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
Deposits and other customer payables |
|
|
|
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 |
– |
|
– |
Common stock, par value |
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 |
|
|
|
Note: "Property" includes
SELECTED SUMMARY FINANCIAL INFORMATION (a)
|
|||||||||
|
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 |
|
|
|
|
|
|
|
|
|
Asset Management |
273,694 |
|
262,162 |
|
258,618 |
|
|
|
|
Corporate |
9,898 |
|
8,014 |
|
8,507 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenue (b) |
|
|
|
|
|
|
|
|
|
|
|||||||||
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted compensation and benefits expense (c) |
|
|
|
|
|
|
|
|
|
Ratio of adjusted compensation to operating revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted non-compensation expenses (d) |
|
|
|
|
|
|
|
|
|
Ratio of adjusted non-compensation to operating revenue |
|
|
|
|
|
|
|
|
|
|
|||||||||
Earnings: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from operations (e) |
|
|
|
|
|
|
NM |
|
( |
Operating margin (f) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income (g) |
|
|
|
|
|
|
NM |
|
( |
|
|
|
|
|
|
|
|
|
|
Diluted adjusted net income per share |
|
|
|
|
|
|
NM |
|
( |
|
|
|
|
|
|
|
|
|
|
Diluted adjusted weighted average shares (h) |
99,154,021 |
|
98,282,239 |
|
97,222,787 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted effective tax rate (i) |
|
|
|
|
|
|
|
|
|
This presentation includes non-
SELECTED SUMMARY FINANCIAL INFORMATION (a)
|
|||||
|
Year Ended |
||||
|
December 31, |
|
December 31, |
|
|
($ in thousands, except per share data) |
2023 |
|
2022 |
|
% Change |
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
Financial Advisory |
|
|
|
|
( |
Asset Management |
1,067,559 |
|
1,098,665 |
|
( |
Corporate |
15,225 |
|
17,971 |
|
( |
|
|
|
|
|
|
Operating revenue (b) |
|
|
|
|
( |
|
|||||
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
Adjusted compensation and benefits expense (c) |
|
|
|
|
|
Ratio of adjusted compensation to operating revenue |
|
|
|
|
|
|
|
|
|
|
|
Adjusted non-compensation expenses (d) |
|
|
|
|
|
Ratio of adjusted non-compensation to operating revenue |
|
|
|
|
|
|
|||||
Earnings: |
|
|
|
|
|
|
|
|
|
|
|
Earnings from operations (e) |
|
|
|
|
( |
Operating margin (f) |
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income (g) |
|
|
|
|
( |
|
|
|
|
|
|
Diluted adjusted net income per share |
|
|
|
|
( |
|
|
|
|
|
|
Diluted adjusted weighted average shares (h) |
97,450,393 |
|
103,193,048 |
|
( |
|
|
|
|
|
|
Adjusted effective tax rate (i) |
|
|
25.7 % |
|
|
This presentation includes non-
COMPENSATION AND BENEFITS - ANALYSIS
|
||||||||||||||||
($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Adjusted |
|
2023 |
|
2022 |
|
2021 |
|
2020 |
|
2019 |
|
2018 |
|
2017 |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Base salary |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
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) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
% of Operating Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Memo: |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Operating revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
This presentation includes non-
ASSETS UNDER MANAGEMENT
|
|||||||||
($ in millions) |
As of |
|
Variance |
||||||
|
December 31, |
|
September 30, |
|
December 31, |
|
|
|
|
|
2023 |
|
2023 |
|
2022 |
|
Qtr to Qtr |
|
YTD |
|
|
|
|
|
|
|
|
|
|
Equity: |
|
|
|
|
|
|
|
|
|
Emerging Markets |
|
|
|
|
|
|
|
|
|
Global |
53,528 |
|
49,709 |
|
46,861 |
|
|
|
|
Local |
52,208 |
|
48,016 |
|
47,504 |
|
|
|
|
Multi-Regional |
59,114 |
|
53,417 |
|
51,473 |
|
|
|
|
Total Equity |
190,138 |
|
174,748 |
|
167,395 |
|
|
|
|
Fixed Income: |
|
|
|
|
|
|
|
|
|
Emerging Markets |
9,525 |
|
9,069 |
|
8,944 |
|
|
|
|
Global |
10,762 |
|
10,924 |
|
11,029 |
|
( |
|
( |
Local |
6,080 |
|
5,868 |
|
5,352 |
|
|
|
|
Multi-Regional |
21,740 |
|
19,317 |
|
18,061 |
|
|
|
|
Total Fixed Income |
48,107 |
|
45,178 |
|
43,386 |
|
|
|
|
Alternative Investments |
3,330 |
|
3,593 |
|
3,812 |
|
( |
|
( |
Other Alternative Investments |
2,799 |
|
2,799 |
|
– |
|
–% |
|
NM |
Private Equity |
1,623 |
|
1,298 |
|
1,038 |
|
|
|
|
Cash Management |
654 |
|
648 |
|
494 |
|
|
|
|
Total AUM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
|
|
Year Ended December 31, |
||||
|
2023 |
|
2022 |
|
|
|
2023 |
|
2022 |
|
|
|
|
|
|
|
|
|
|
AUM - Beginning of Period |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average AUM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% Change in average AUM |
10.7 % |
|
|
|
|
|
|
|
|
Note: Average AUM generally represents the average of the monthly ending AUM balances for the period.
RECONCILIATION OF |
|||||||||
|
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 - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and Benefits Expense |
|||||||||
Compensation and benefits expense - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Compensation Expense |
|||||||||
Non-compensation expenses - Subtotal - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-Tax Income and Earnings From Operations |
|||||||||
Operating Income (Loss) - |
|
|
( |
|
|
|
( |
|
|
|
|
|
|
|
|
|
|
|
|
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) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income attributable to Lazard Ltd |
|||||||||
Net income (loss) attributable to Lazard Ltd - |
|
|
|
|
|
|
( |
|
|
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) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Weighted Average Shares Outstanding |
|||||||||
Diluted Weighted Average Shares Outstanding - |
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: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
|
|
Non-GAAP Basis, as adjusted |
|
|
|
|
|
|
|
|
|
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
See Notes to Financial Schedules |
|||||||||
RECONCILIATION OF NON-COMPENSATION |
|||||||||
|
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 - |
|
|
|
|
|
|
|
|
|
Occupancy and equipment |
|
|
|
|
|
|
|
|
|
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 - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-compensation expense - Adjustments: |
|
|
|
|
|
|
|
|
|
Occupancy and equipment (m) (q) (s) |
( |
|
( |
|
( |
|
( |
|
( |
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 |
( |
|
( |
|
( |
|
( |
|
( |
|
|
|
|
|
|
|
|
|
|
Non-compensation expenses, as adjusted: |
|
|
|
|
|
|
|
|
|
Occupancy and equipment |
|
|
|
|
|
|
|
|
|
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) |
|
|
|
|
|
|
|
|
|
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
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 |
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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. |
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(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). |
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(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). |
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(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. |
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(f) |
Represents earnings from operations as a percentage of operating revenue, and is a non-GAAP measure. |
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(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. |
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(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 |
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(i) |
The adjusted effective tax rate is a non-GAAP measure based upon the |
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(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. |
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(k) |
A reconciliation of |
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|
Year Ended December 31, |
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|
($ in thousands) |
2023 |
|
2022 |
|
2021 |
|
2020 |
|
2019 |
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
Compensation & benefits expense - |
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Adjustments: |
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|
|
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|
|
|
|
|
|
|
|
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) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
Compensation & benefits expense, as adjusted |
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|
(l) |
For the twelve month period ended December 31, 2023, includes approximately |
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(m) |
Noncontrolling interests include revenue and expenses principally related to Edgewater, ESC Funds and a Special Purpose Acquisition Company. |
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(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. |
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(o) |
Represents certain asset impairment charges. |
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(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. |
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|
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|
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|
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|
(q) |
Represents expenses associated with cost-saving initiatives including closing certain offices over the course of 2023. |
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(r) |
Represents expenses associated with senior management transition reflecting the departure of certain executive officers. |
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(s) |
Represents building depreciation and other costs related to office space reorganization. |
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(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 |
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(u) |
Represents expenses and losses associated with a business realignment which included employee reductions and the closing of subscale offices and investment strategies. |
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NM |
Not meaningful |
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View source version on businesswire.com: https://www.businesswire.com/news/home/20240201686729/en/
Media Contact:
Shannon
+1 212 632 6880
shannon.houston@lazard.com
Investor Contact:
Alexandra Deignan
+1 212 632 6886
alexandra.deignan@lazard.com
Source: Lazard, Inc.
FAQ
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