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.”

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

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

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.

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.

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.

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

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.