Lazard Ltd Reports Full-Year and Fourth-Quarter 2022 Results

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

Financial Advisory annual operating revenue of $1.7 billion is second highest in firm’s history

Asset Management annual operating revenue of $1.1 billion and year-end assets under management of $216 billion

Returned $936 million in capital to shareholders, including repurchasing 20 million shares in 2022

Lazard Ltd (NYSE: LAZ) today reported annual operating revenue¹ of $2,769 million for the year ended December 31, 2022. Net income, as adjusted², was $384 million, or $3.73 per share (diluted) for the year. On a U.S. GAAP basis, net income for the year was $358 million, or $3.51 per share (diluted).

For the fourth quarter of 2022, net income, as adjusted, was $67 million, or $0.69 per share (diluted). On a U.S. GAAP basis, net income for the fourth quarter was $42 million, or $0.44 per share (diluted).

“Lazard's businesses proved resilient amid the challenging macroeconomic and capital markets environment in 2022," said Kenneth M. Jacobs, Chairman and Chief Executive Officer of Lazard. "We continued to make strategic investments, which strengthen and broaden our capabilities, and we are well-positioned to serve clients as they navigate 2023."

($ in millions, except	Year Ended			Quarter Ended
per share data and AUM)	December 31,			December 31,
	2022	2021	%'22-'21	2022	2021	%'22-'21
Net Income
U.S. GAAP	$358	$528	(32%)	$42	$210	(80%)
Per share, diluted	$3.51	$4.63	(24%)	$0.44	$1.86	(76%)
Adjusted^2	$384	$576	(33%)	$67	$217	(69%)
Per share, diluted	$3.73	$5.04	(26%)	$0.69	$1.92	(64%)
Operating Revenue^1
Total operating revenue	$2,769	$3,139	(12%)	$671	$968	(31%)
Financial Advisory	$1,652	$1,778	(7%)	$404	$608	(34%)
Asset Management	$1,099	$1,329	(17%)	$259	$347	(25%)
AUM ($ in billions)
Period end	$216	$274	(21%)
Average	$227	$272	(16%)	$211	$274	(23%)

Note: Endnotes are on page 7 of this release. A reconciliation of adjusted GAAP to U.S. GAAP is on pages 15-16.

OPERATING REVENUE

Operating revenue¹ was $2,769 million for 2022, 12% lower than 2021. Fourth-quarter 2022 operating revenue was $671 million, 31% lower than the fourth quarter of 2021.

Financial Advisory

Our Financial Advisory results include Strategic and M&A Advisory, Capital Markets Advisory, Shareholder Advisory, Restructuring and Capital Solutions, Sovereign Advisory, Geopolitical Advisory, Capital Raising and Placement, and other strategic advisory for clients.

For the full year of 2022, Financial Advisory operating revenue was $1,652 million, 7% lower than 2021.

For the fourth quarter of 2022, Financial Advisory operating revenue was $404 million, 34% lower than the fourth quarter of 2021.

During and since the fourth quarter of 2022, Lazard has been engaged in significant and complex M&A transactions and other strategic advisory assignments globally, including the following completed transactions (clients are in italics): Terminix's $7.5 billion sale to Rentokil Initial; Tenneco's $7.1 billion sale to funds of Apollo; WestRock’s $1.7 billion acquisition of remaining interests in Grupo Gondi; Bain Capital's acquisition of a 55% stake in House of HR; BC Partners’ acquisition of Havea; Celerion’s acquisition by H.I.G. Capital; OCS Group’s sale of its facilities services division to CD&R; Encap Investments on its sale of Jupiter Power to BlackRock; and Green Street’s sale of a majority interest in the company to TA Associates. Announced transactions include: Xylem’s $7.5 billion acquisition of Evoqua; InfraVia Capital's investment in Virgin Media O2’s fiber network along with joint venture partners Liberty Global and Telefonica, for a total investment of approximately $5.5 billion; Southwest Gas Holdings on its decision to spin-off Centuri; Southwest Gas Holdings on its announced sale of MountainWest Pipelines to Williams; and CAES Space Systems’ sale to Veritas Capital.

Lazard has one of the world’s preeminent restructuring and capital solutions practices. During and since the fourth quarter of 2022, we have been engaged in a broad range of visible and complex restructuring and debt advisory assignments, including debtor roles involving Bed Bath & Beyond, GenapSys, Trevi Finanziaria Industriale, and Vue Entertainment, and creditor and/or related party roles involving Andrade Gutierrez, Brazos Electric Power Cooperative, Endo Pharmaceuticals, Ruby Pipeline and Party City.

Our Capital Markets and Shareholder Advisory practices remain active globally, advising on a broad range of public and private assignments. Our Sovereign Advisory practice continues to be active advising governments, sovereign and sub-sovereign entities across developed and emerging markets.

For a list of publicly announced Financial Advisory transactions on which Lazard advised in the fourth quarter of 2022, or continued to advise or completed since December 31, 2022, please visit our website at www.lazard.com/businesses/transactions.

Asset Management

In the text portion of this press release, we present our Asset Management results as 1) Management fees and other revenue, and 2) Incentive fees.

For the full year of 2022, Asset Management operating revenue was $1,099 million, 17% lower than 2021. For the fourth quarter of 2022, Asset Management operating revenue was $259 million, 25% lower than the fourth quarter of 2021.

Management fees and other revenue was $1,031 million for full-year 2022, 15% lower than 2021. For the fourth quarter of 2022, management fees and other revenue was $245 million, 18% lower than the fourth quarter of 2021, and 2% higher than the third quarter of 2022.

For the full year of 2022, incentive fees were $67 million, compared to $120 million for 2021. For the fourth quarter of 2022, incentive fees were $13 million, compared to $46 million for the fourth quarter of 2021.

Average assets under management (AUM) for full-year 2022 was $227 billion, 16% lower than 2021. Average AUM for the fourth quarter of 2022 was $211 billion, 23% lower than the fourth quarter of 2021, and essentially flat compared to the third quarter of 2022.

AUM as of December 31, 2022 was $216 billion, down 21% from December 31, 2021, and 9% higher than September 30, 2022. The sequential change from September 30, 2022 was driven by market appreciation of $14.4 billion, foreign exchange appreciation of $7.7 billion and net outflows of $3.7 billion.

OPERATING EXPENSES

Compensation and Benefits

In managing compensation and benefits expense, we focus on annual awarded compensation (cash compensation and benefits plus deferred incentive compensation with respect to the applicable year, net of estimated future forfeitures and excluding charges), a non-GAAP measure. We believe annual awarded compensation reflects the actual annual compensation cost more accurately than the GAAP measure of compensation cost, which includes applicable-year cash compensation and the amortization of deferred incentive compensation principally attributable to previous years’ deferred compensation. We believe that by managing our business using awarded compensation while targeting a consistent deferral policy, we can better manage our compensation costs, increase our flexibility in the future and build shareholder value over time.

Adjusted compensation and benefits expense¹ for 2022 was $1,657 million, 10% lower than 2021. The corresponding adjusted compensation ratio¹ was 59.8% for 2022, compared to 58.5% for 2021.

Awarded compensation expense¹ for 2022 was $1,768 million, 4% lower than 2021. The corresponding awarded compensation ratio¹ was 63.8% for 2022, compared to 58.8% for 2021.

We take a disciplined approach to compensation, and our goal is to maintain a compensation-to-operating revenue ratio over the cycle in the mid- to high-50s percentage range on both an awarded and adjusted basis, while targeting a consistent deferral policy.

Non-Compensation Expense

Adjusted non-compensation expense¹ for 2022 was $518 million, 10% higher than 2021. The ratio of non-compensation expense to operating revenue was 18.7% for 2022, compared to 15.0% for 2021.

Adjusted non-compensation expense for the fourth quarter of 2022, was $142 million, 6% higher than the fourth quarter of 2021. The ratio of adjusted non-compensation expense to operating revenue was 21.1% for the fourth quarter of 2022, compared to 13.8% for the fourth quarter of 2021.

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

TAXES

The provision for taxes, on an adjusted basis¹, was $133 million for full-year 2022 and $24 million for the fourth quarter of 2022. The effective tax rate on the same basis was 25.7% for full-year 2022, compared to 23.9% for full-year 2021.

CAPITAL MANAGEMENT AND BALANCE SHEET

Our primary capital management goals include managing debt and returning capital to shareholders through dividends and share repurchases.

In 2022, Lazard returned $936 million to shareholders, which included: $182 million in dividends; $692 million in share repurchases of our common stock; and $62 million in satisfaction of employee tax obligations in lieu of share issuances upon vesting of equity grants.

During 2022, we repurchased a record 19.7 million shares. As of December 31, 2022, our remaining share repurchase authorization was $302 million.

On February 1, 2023, Lazard declared a quarterly dividend of $0.50 per share on its outstanding common stock. The dividend is payable on February 24, 2023, to stockholders of record on February 13, 2023.

Lazard’s financial position remains strong. As of December 31, 2022, our cash and cash equivalents were $1.2 billion. Stockholders’ equity related to Lazard’s interests was $556 million.

CONFERENCE CALL

Lazard will host a conference call at 8:00 a.m. ET on February 2, 2023, to discuss the company’s financial results for the full year and fourth quarter of 2022. 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 1 800-245-3047 (toll-free, U.S. and Canada) or [phone] (outside of the U.S. and Canada), 15 minutes prior to the start of the call. Conference ID: LAZQ422.

A replay of the conference call will be available by 10:00 a.m. ET, February 2, 2023, via the Lazard Investor Relations website at www.lazard.com, or by dialing 1 800-839-5637 (toll-free, U.S. and Canada) or [phone] (outside of the U.S. and Canada).

ABOUT LAZARD

Lazard, one of the world's preeminent financial advisory and asset management firms, operates from 43 cities across 26 countries in North and South America, Europe, Asia and Australia. Celebrating its 175^th year, the firm provides advice on mergers and acquisitions, capital markets and other strategic matters, restructuring and capital solutions, and asset management services to corporations, partnerships, institutions, governments and individuals. For more information on Lazard, please visit www.lazard.com. Follow Lazard at @Lazard.

Cautionary Note Regarding Forward-Looking Statements:

This press release contains forward-looking statements. In some cases, you can identify these statements by forward-looking words such as “may”, “might”, “will”, “should”, “could”, “would”, “expect”, “plan”, “anticipate”, “believe”, “estimate”, “predict”, “potential”, “target,” “goal”, or “continue”, and the negative of these terms and other comparable terminology. These forward-looking statements, which are subject to known and unknown risks, uncertainties and assumptions about us, may include projections of our future financial performance based on our growth strategies, business plans and initiatives and anticipated trends in our business. These 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.

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

Lazard Ltd is committed to providing timely and accurate information to the investing public, consistent with our legal and regulatory obligations. To that end, Lazard and its operating companies use their websites, Lazard’s Twitter account (twitter.com/Lazard) 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.

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 2022 adjusted results¹ exclude pre-tax charges of $0.8 million and $3.8 million, respectively, relating to office space reorganization, $33.0 million in the fourth quarter and full year relating to expenses associated with senior management transition, and $1.2 million in the fourth quarter and full year relating to the reduction of our Tax Receivable Agreement (TRA) obligation. On a U.S. GAAP basis, these resulted in a net charge of $24.8 million, or $0.26 (diluted) per share, for the fourth quarter, and a net charge of $26.9 million, or $0.27 (diluted) per share, for the full year of 2022.

LAZ-EPE

LAZARD LTD
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(U.S. GAAP)
	Three Months Ended									% Change From
	December 31,			September 30,			December 31,			September 30,	December 31,
($ in thousands, except per share data)	2022			2022			2021			2022	2021
Total revenue	$	731,860		$	746,431		$	1,012,841		(2%)	(28%)
Interest expense		(19,471	)		(19,687	)		(20,466	)
Net revenue		712,389			726,744			992,375		(2%)	(28%)
Operating expenses:
Compensation and benefits		474,843			420,937			559,768		13%	(15%)
Occupancy and equipment		30,907			30,696			32,402
Marketing and business development		26,674			19,633			16,850
Technology and information services		47,125			44,579			39,762
Professional services		21,292			15,665			26,060
Fund administration and outsourced services		24,614			27,110			35,784
Amortization of intangible assets related to acquisitions		15			15			15
Other		14,988			9,967			11,197
Subtotal		165,615			147,665			162,070		12%	2%
Provision (benefit) pursuant to tax receivable agreement		(1,209	)		-			2,199
Operating expenses		639,249			568,602			724,037		12%	(12%)
Operating income		73,140			158,142			268,338		(54%)	(73%)
Provision for income taxes		16,075			35,350			57,048		(55%)	(72%)
Net income		57,065			122,792			211,290		(54%)	(73%)
Net income (loss) attributable to noncontrolling interests		14,701			16,995			913
Net income attributable to Lazard Ltd	$	42,364		$	105,797		$	210,377		(60%)	(80%)
Attributable to Lazard Ltd Common Stockholders:
Weighted average shares outstanding:
Basic		88,173,431			93,275,631			104,689,273		(5%)	(16%)
Diluted		94,185,566			98,865,156			112,278,982		(5%)	(16%)
Net income per share:
Basic	$	0.47		$	1.11		$	1.97		(58%)	(76%)
Diluted	$	0.44		$	1.06		$	1.86		(58%)	(76%)

LAZARD LTD
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(U.S. GAAP)
	Year Ended
	December 31,			December 31,
($ in thousands, except per share data)	2022			2021			% Change
Total revenue	$	2,855,093		$	3,273,816		(13%)
Interest expense		(81,522	)		(80,768	)
Net revenue		2,773,571			3,193,048		(13%)
Operating expenses:
Compensation and benefits		1,656,451			1,895,859		(13%)
Occupancy and equipment		122,251			128,040
Marketing and business development		83,103			42,755
Technology and information services		171,702			146,765
Professional services		69,535			77,702
Fund administration and outsourced services		109,978			130,502
Amortization of intangible assets related to acquisitions		60			60
Other		44,852			45,318
Subtotal		601,481			571,142		5%
Provision (benefit) pursuant to tax receivable agreement		(1,209	)		2,199
Operating expenses		2,256,723			2,469,200		(9%)
Operating income		516,848			723,848		(29%)
Provision for income taxes		124,365			181,303		(31%)
Net income		392,483			542,545		(28%)
Net income attributable to noncontrolling interests		34,966			14,481
Net income attributable to Lazard Ltd	$	357,517		$	528,064		(32%)
Attributable to Lazard Ltd Common Stockholders:
Weighted average shares outstanding:
Basic		95,664,129			106,035,808		(10%)
Diluted		100,997,674			113,674,699		(11%)
Net income per share:
Basic	$	3.68		$	4.90		(25%)
Diluted	$	3.51		$	4.63		(24%)

LAZARD LTD
UNAUDITED CONDENSED CONSOLIDATED
STATEMENT OF FINANCIAL CONDITION
(U.S. GAAP)
	December 31,			December 31,
($ in thousands)	2022			2021
ASSETS
Cash and cash equivalents	$	1,234,773		$	1,465,022
Deposits with banks and short-term investments		779,246			1,347,544
Restricted cash		625,381			617,448
Receivables		652,758			805,809
Investments		698,977			1,007,339
Property		250,073			250,005
Goodwill and other intangible assets		377,330			379,571
Operating lease right-of-use assets		431,608			466,054
Deferred tax assets		407,657			435,308
Other assets		394,758			373,081
Total Assets	$	5,852,561		$	7,147,181
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS & STOCKHOLDERS' EQUITY
Liabilities
Deposits and other customer payables	$	921,834		$	1,442,701
Accrued compensation and benefits		735,576			972,303
Operating lease liabilities		513,688			552,522
Tax receivable agreement obligation		191,189			213,434
Senior debt		1,687,714			1,685,227
Other liabilities		543,690			628,030
Total liabilities		4,593,691			5,494,217
Commitments and contingencies
Redeemable noncontrolling interests		583,471			575,000
Stockholders' equity
Preferred stock, par value $.01 per share		-			-
Common stock, par value $.01 per share		1,128			1,128
Additional paid-in capital		167,890			144,729
Retained earnings		1,676,713			1,560,636
Accumulated other comprehensive loss, net of tax		(295,854	)		(223,847	)
Subtotal		1,549,877			1,482,646
Class A common stock held by subsidiaries, at cost		(993,414	)		(507,426	)
Total Lazard Ltd stockholders' equity		556,463			975,220
Noncontrolling interests		118,936			102,744
Total stockholders' equity		675,399			1,077,964
Total liabilities, redeemable noncontrolling interests and stockholders' equity	$	5,852,561		$	7,147,181

LAZARD LTD
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)	2022		2022		2021		2022	2021
Revenues:
Financial Advisory	$	403,836	$	453,664	$	608,178	(11%)	(34%)
Asset Management		258,618		262,559		346,607	(2%)	(25%)
Corporate		8,507		7,328		13,160	16%	(35%)
Operating revenue (b)	$	670,961	$	723,551	$	967,945	(7%)	(31%)
Expenses:
Adjusted compensation and benefits expense (c)	$	418,598	$	434,131	$	544,510	(4%)	(23%)
Ratio of adjusted compensation to operating revenue	62.4%		60.0%		56.3%
Non-compensation expense (d)	$	141,843	$	128,263	$	133,903	11%	6%
Ratio of non-compensation to operating revenue	21.1%		17.7%		13.8%
Earnings:
Earnings from operations (e)	$	110,520	$	161,157	$	289,532	(31%)	(62%)
Operating margin (f)	16.5%		22.3%		29.9%
Adjusted net income (g)	$	67,130	$	106,472	$	217,209	(37%)	(69%)
Diluted adjusted net income per share	$	0.69	$	1.05	$	1.92	(34%)	(64%)
Diluted weighted average shares (h)		97,222,787		101,603,367		113,294,302	(4%)	(14%)
Effective tax rate (i)	26.3%		25.1%		19.8%
This presentation includes non-U.S. GAAP ("non-GAAP") measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for the corresponding U.S. GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with U.S. GAAP. For a detailed explanation of the adjustments made to the corresponding U.S. GAAP measures, see Reconciliation of U.S. GAAP to Selected Summary Financial Information and Notes to Financial Schedules.

LAZARD LTD
SELECTED SUMMARY FINANCIAL INFORMATION (a)
(Non-GAAP - unaudited)
	Year Ended
	December 31,		December 31,
($ in thousands, except per share data)	2022		2021		% Change
Revenues:
Financial Advisory	$	1,652,422	$	1,777,848	(7%)
Asset Management		1,098,665		1,328,540	(17%)
Corporate		17,971		32,509	(45%)
Operating revenue (b)	$	2,769,058	$	3,138,897	(12%)
Expenses:
Adjusted compensation and benefits expense (c)	$	1,656,838	$	1,836,227	(10%)
Ratio of adjusted compensation to operating revenue	59.8%		58.5%
Non-compensation expense (d)	$	518,173	$	471,947	10%
Ratio of non-compensation to operating revenue	18.7%		15.0%
Earnings:
Earnings from operations (e)	$	594,047	$	830,723	(28%)
Operating margin (f)	21.5%		26.5%
Adjusted net income (g)	$	384,402	$	575,626	(33%)
Diluted adjusted net income per share	$	3.73	$	5.04	(26%)
Diluted weighted average shares (h)		103,193,048		114,248,065	(10%)
Effective tax rate (i)	25.7%		23.9%
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 Reconciliation of U.S. GAAP to Selected Summary Financial Information and Notes to Financial Schedules.

LAZARD LTD COMPENSATION AND BENEFITS – ANALYSIS (unaudited) ($ in millions except share price)
		2016	2017	2018	2019	2020	2021	2022
	ADJUSTED U.S. GAAP BASIS (c)
	Base salary	$372.7	$404.9	$431.9	$446.9	$455.0	$487.1	$535.0
	Benefits and other	201.9	243.4	263.6	258.3	227.7	286.5	293.0
	Cash incentive compensation	398.3	465.5	445.5	390.8	435.3	662.4	457.8
	Total cash compensation, benefits and other	972.9	1,113.8	1,141.0	1,096.0	1,118.0	1,436.0	1,285.8
	Amortization of deferred incentive awards	352.4	367.3	375.6	367.9	384.1	400.2	371.0
	Compensation and benefits - Adjusted U.S. GAAP basis (j)	$1,325.3	$1,481.1	$1,516.6	$1,463.9	$1,502.1	$1,836.2	$1,656.8
	% of Operating Revenue	56.5%	55.8%	55.1%	57.5%	59.5%	58.5%	59.8%

AWARDED BASIS
Total cash compensation and benefits (per above)	$972.9	$1,113.8	$1,141.0	$1,096.0	$1,118.0	$1,436.0	$1,285.8
Deferred year-end incentive awards	342.4	351.0	377.8	361.3	364.4	389.7	436.2
Compensation and benefits before sign-on and other
special deferred incentive awards	1,315.3	1,464.8	1,518.8	1,457.3	1,482.4	1,825.7	1,722.0
Sign-on and other special deferred incentive awards (k)	29.9	36.2	45.7	37.6	54.9	48.5	79.3
Total Compensation and benefits - Notional	1,345.2	1,501.0	1,564.5	1,494.9	1,537.3	1,874.2	1,801.3
Adjustment for actual/estimated forfeitures (l)	(27.9)	(25.3)	(27.5)	(25.9)	(27.3)	(28.5)	(33.5)
Compensation and benefits - Awarded (m)	$1,317.3	$1,475.7	$1,537.0	$1,469.0	$1,510.0	$1,845.7	$1,767.8
% of Operating Revenue - Awarded Basis (m)	56.2%	55.6%	55.8%	57.7%	59.8%	58.8%	63.8%

	Memo:
		Total value of deferred equity-based year end
		incentive awards	$234.8	$216.4	$253.8	$165.5	$172.4	$198.1	TBD
		Equity-based year end awards - share equivalents ('000)	5,395	3,850	6,735	3,858	3,988	6,012	TBD
		Price at issuance	$43.43	$56.22	$37.69	$42.89	$43.23	$32.95	TBD
		Deferred compensation awards ratio (n)	26.0%	24.0%	24.9%	24.8%	24.6%	21.3%	25.3%
		Operating revenue	$2,344.3	$2,654.5	$2,754.8	$2,546.0	$2,523.5	$3,138.9	$2,769.1
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 Reconciliation of U.S. GAAP to Selected Summary Financial Information and Notes to Financial Schedules.

LAZARD LTD
ASSETS UNDER MANAGEMENT ("AUM")
(unaudited)
($ in millions)
	As of								Variance
	December 31,			September 30,			December 31,
	2022			2022			2021		Qtr to Qtr			YTD
Equity:
Emerging Markets	$	21,557		$	20,378		$	31,227	5.8%			(31.0%)
Global		46,861			43,754			59,516	7.1%			(21.3%)
Local		47,504			43,589			56,310	9.0%			(15.6%)
Multi-Regional		51,473			45,988			73,953	11.9%			(30.4%)
Total Equity		167,395			153,709			221,006	8.9%			(24.3%)
Fixed Income:
Emerging Markets		8,944			9,288			12,231	(3.7%)			(26.9%)
Global		11,029			10,252			14,410	7.6%			(23.5%)
Local		5,352			4,986			6,022	7.3%			(11.1%)
Multi-Regional		18,061			13,786			13,623	31.0%			32.6%
Total Fixed Income		43,386			38,312			46,286	13.2%			(6.3%)
Alternative Investments		3,812			3,900			4,203	(2.3%)			(9.3%)
Private Equity		1,038			1,042			1,290	(0.4%)			(19.5%)
Cash Management		494			803			954	(38.5%)			(48.2%)
Total AUM	$	216,125		$	197,766		$	273,739	9.3%			(21.0%)
	Three Months Ended December 31,								Year Ended December 31,
	2022			2021					2022			2021
AUM - Beginning of Period	$	197,766		$	272,572				$	273,739		$	258,642
Net Flows		(3,735	)		(6,735	)				(16,915	)		(11,573	)
Market and foreign exchange
appreciation (depreciation)		22,094			7,902					(40,699	)		26,670
AUM - End of Period	$	216,125		$	273,739				$	216,125		$	273,739
Average AUM	$	211,243		$	273,514				$	227,444		$	272,051
% Change in average AUM	(22.8%)								(16.4%)
Note: Average AUM generally represents the average of the monthly ending AUM balances for the period.

LAZARD LTD
RECONCILIATION OF U.S. GAAP TO SELECTED SUMMARY FINANCIAL INFORMATION (a)
(unaudited)
	Three Months Ended									Year Ended
	December 31,			September 30,			December 31,			December 31,			December 31,
($ in thousands, except per share data)	2022			2022			2021			2022			2021
Operating Revenue
Net revenue - U.S. GAAP Basis	$	712,389		$	726,744		$	992,375		$	2,773,571		$	3,193,048
Adjustments:
Revenue related to noncontrolling interests (o)		(16,771	)		(20,847	)		(7,515	)		(49,073	)		(31,624	)
(Gains) losses related to Lazard Fund Interests ("LFI") and other similar arrangements		(21,340	)		16,180			(12,884	)		44,261			(35,494	)
Distribution fees, reimbursable deal costs, bad debt expense and other (p)		(22,736	)		(17,588	)		(22,842	)		(76,229	)		(85,053	)
Losses associated with restructuring and closing of certain offices (q)		-			-			15			-			23,645
Interest expense		19,419			19,062			18,796			76,528			74,375
Operating revenue, as adjusted (b)	$	670,961		$	723,551		$	967,945		$	2,769,058		$	3,138,897
Compensation and Benefits Expense
Compensation and benefits expense - U.S. GAAP Basis	$	474,843		$	420,937		$	559,768		$	1,656,451		$	1,895,859
Adjustments:
(Charges) credits pertaining to LFI and other similar arrangements		(21,340	)		16,180			(12,884	)		44,261			(35,494	)
Expenses associated with restructuring and closing of certain offices (r)		-			-			-			-			(14,922	)
Expenses associated with senior management transition (s)		(33,019	)		-			-			(33,019	)		-
Compensation related to noncontrolling interests (o)		(1,886	)		(2,986	)		(2,374	)		(10,855	)		(9,216	)
Compensation and benefits expense, as adjusted (c)	$	418,598		$	434,131		$	544,510		$	1,656,838		$	1,836,227
Non-Compensation Expense
Non-compensation expense - Subtotal - U.S. GAAP Basis	$	165,615		$	147,665		$	162,070		$	601,481		$	571,142
Adjustments:
Expenses related to office space reorganization (t)		(836	)		(933	)		(967	)		(3,764	)		(4,611	)
Distribution fees, reimbursable deal costs, bad debt expense and other (p)		(22,736	)		(17,588	)		(22,842	)		(76,229	)		(85,053	)
Amortization of intangible assets related to acquisitions		(15	)		(15	)		(15	)		(60	)		(60	)
Expenses associated with restructuring and closing of certain offices (r)		-			-			(115	)		-			(1,539	)
Non-compensation expense related to noncontrolling interests (o)		(185	)		(866	)		(4,228	)		(3,255	)		(7,932	)
Non-compensation expense, as adjusted (d)	$	141,843		$	128,263		$	133,903		$	518,173		$	471,947
Pre-Tax Income and Earnings From Operations
Operating Income - U.S. GAAP Basis	$	73,140		$	158,142		$	268,338		$	516,848		$	723,848
Adjustments:
Provision (benefit) pursuant to tax receivable agreement obligation		(1,209	)		-			2,199			(1,209	)		2,199
Losses associated with restructuring and closing of certain offices (q)		-			-			15			-			23,645
Expenses related to office space reorganization (t)		836			933			967			3,764			4,611
Expenses associated with restructuring and closing of certain offices (r)		-			-			115			-			16,461
Expenses associated with senior management transition (s)		33,019			-			-			33,019			-
Net income related to noncontrolling interests (o)		(14,701	)		(16,995	)		(913	)		(34,966	)		(14,481	)
Pre-tax income, as adjusted		91,085			142,080			270,721			517,456			756,283
Interest expense		19,419			19,062			18,796			76,528			74,375
Amortization of intangible assets related to acquisitions and other		16			15			15			63			65
Earnings from operations, as adjusted (e)	$	110,520		$	161,157		$	289,532		$	594,047		$	830,723
Net Income attributable to Lazard Ltd
Net income attributable to Lazard Ltd - U.S. GAAP Basis	$	42,364		$	105,797		$	210,377		$	357,517		$	528,064
Adjustments:
Provision (benefit) pursuant to tax receivable agreement obligation		(1,209	)		-			2,199			(1,209	)		2,199
Losses associated with restructuring and closing of certain offices (q)		-			-			15			-			23,645
Expenses related to office space reorganization (t)		836			933			967			3,764			4,611
Expenses associated with restructuring and closing of certain offices (r)		-			-			115			-			16,461
Expenses associated with senior management transition (s)		33,019			-			-			33,019			-
Tax expense (benefit) allocated to adjustments		(7,880	)		(258	)		3,536			(8,689	)		646
Net income, as adjusted (g)	$	67,130		$	106,472		$	217,209		$	384,402		$	575,626
Diluted Weighted Average Shares Outstanding
Diluted Weighted Average Shares Outstanding - U.S. GAAP Basis		94,185,566			98,865,156			112,278,982			100,997,674			113,674,699
Adjustment: participating securities including profits interest participation rights		3,037,221			2,738,211			1,015,320			2,195,374			573,366
Diluted Weighted Average Shares Outstanding, as adjusted (h)		97,222,787			101,603,367			113,294,302			103,193,048			114,248,065
Diluted net income per share:
U.S. GAAP Basis	$	0.44		$	1.06		$	1.86		$	3.51		$	4.63
Non-GAAP Basis, as adjusted	$	0.69		$	1.05		$	1.92		$	3.73		$	5.04
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

LAZARD LTD
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)	2022			2022			2021			2022			2021
Non-compensation expense - U.S. GAAP Basis:
Occupancy and equipment	$	30,907		$	30,696		$	32,402		$	122,251		$	128,040
Marketing and business development		26,674			19,633			16,850			83,103			42,755
Technology and information services		47,125			44,579			39,762			171,702			146,765
Professional services		21,292			15,665			26,060			69,535			77,702
Fund administration and outsourced services		24,614			27,110			35,784			109,978			130,502
Amortization of intangible assets related to acquisitions		15			15			15			60			60
Other		14,988			9,967			11,197			44,852			45,318
Non-compensation expense - Subtotal - U.S. GAAP Basis	$	165,615		$	147,665		$	162,070		$	601,481		$	571,142
Non-compensation expense - Adjustments:
Occupancy and equipment (o) (r) (t)	$	(828	)	$	(944	)	$	(892	)	$	(3,887	)	$	(5,395	)
Marketing and business development (o) (p) (r)		(3,656	)		(2,516	)		(1,425	)		(9,440	)		(4,138	)
Technology and information services (o) (p) (r)		(45	)		(23	)		4			(159	)		(170	)
Professional services (o) (p) (r) (t)		(618	)		(510	)		(3,888	)		(2,269	)		(8,546	)
Fund administration and outsourced services (o) (p)		(14,092	)		(14,362	)		(21,661	)		(60,646	)		(73,426	)
Amortization of intangible assets related to acquisitions		(15	)		(15	)		(15	)		(60	)		(60	)
Other (o) (p) (r) (t)		(4,518	)		(1,032	)		(290	)		(6,847	)		(7,460	)
Subtotal Non-compensation adjustments	$	(23,772	)	$	(19,402	)	$	(28,167	)	$	(83,308	)	$	(99,195	)
Non-compensation expense, as adjusted:
Occupancy and equipment	$	30,079		$	29,752		$	31,510		$	118,364		$	122,645
Marketing and business development		23,018			17,117			15,425			73,663			38,617
Technology and information services		47,080			44,556			39,766			171,543			146,595
Professional services		20,674			15,155			22,172			67,266			69,156
Fund administration and outsourced services		10,522			12,748			14,123			49,332			57,076
Amortization of intangible assets related to acquisitions		-			-			-			-			-
Other		10,470			8,935			10,907			38,005			37,858
Non-compensation expense, as adjusted (d)	$	141,843		$	128,263		$	133,903		$	518,173		$	471,947
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

LAZARD LTD
Notes to Financial Schedules
(a)	Selected Summary Financial Information are non-GAAP measures. 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 (o) 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 (p) below), (iv) for the three and twelve month periods ended December 31, 2021, losses associated with restructuring and closing of certain offices (see (q) below), and (v) 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 twelve month period ended December 31, 2021, expenses associated with restructuring and closing of certain offices (see (r) below), (iii) for the three and twelve month periods ended December 31, 2022, expenses associated with senior management transition (see (s) below), and (iv) compensation and benefits related to noncontrolling interests (see (o) below).
(d)	A non-GAAP measure which excludes (i) expenses related to office space reorganization (see (t) below), (ii) expenses related to distribution fees, reimbursable deal costs in accordance with the revenue recognition guidance, bad debt expense, and other (see (p) below), (iii) amortization of intangible assets related to acquisitions, (iv) for the three and twelve month periods ended December 31, 2021, expenses associated with restructuring and closing of certain offices (see (r) below), and (v) expenses related to noncontrolling interests (see (o) below).
(e)	A non-GAAP measure which excludes (i) for the three and twelve month periods ended December 31, 2022 and December 31, 2021, a provision (benefit) pursuant to our Tax Receivable Agreement obligation, (ii) for the three and twelve month periods ended December 31, 2021, losses associated with restructuring and closing of certain offices (see (q) below), (iii) expenses related to office space reorganization (see (t) below), (iv) for the three and twelve month periods ended December 31, 2021, expenses associated with restructuring and closing of certain offices (see (r) below), (v) for the three and twelve month periods ended December 31, 2022, expenses associated with senior management transition (see (s) below), (vi) net revenue and expenses related to noncontrolling interests (see (o) below), (vii) interest expense primarily related to corporate financing activities, and (viii) amortization of intangible assets related to acquisitions.
(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, 2022 and December 31, 2021, a provision (benefit) pursuant to our Tax Receivable Agreement obligation, (ii) for the three and twelve month periods ended December 31, 2021, losses associated with restructuring and closing of certain offices (see (q) below), (iii) expenses related to office space reorganization (see (t) below), (iv) for the three and twelve month periods ended December 31, 2021, expenses associated with restructuring and closing of certain offices (see (r) below), and (v) for the three and twelve month periods ended December 31, 2022, expenses associated with senior management transition (see (s) below), net of tax expense (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.
(i)	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 $23,955, $35,608, and $53,512 for the three month periods ended December 31, 2022, September 30, 2022, and December 31, 2021, respectively, $133,054 and $180,657 for the twelve month periods ended December 31, 2022 and 2021, respectively, and the denominator of which is pre-tax income of $91,085, $142,080, and $270,721 for the three month periods ended December 31, 2022, September 30, 2022 and December 31, 2021, respectively, $517,456 and $756,283 for the twelve month periods ended December 31, 2022 and 2021, respectively.
(j)	A reconciliation of U.S. GAAP compensation and benefits expense to compensation and benefits expense, as adjusted:

	Year Ended December 31,
($ in thousands)	2016			2017			2018			2019			2020			2021			2022
Compensation & benefits expense - U.S. GAAP Basis	$	1,340,543		$	1,512,873		$	1,514,735		$	1,563,395		$	1,550,684		$	1,895,859		$	1,656,451
Adjustments:
Expenses associated with restructuring and closing of certain offices (r)		-			-			-			-			-			(14,922	)		-
Charges associated with business realignment (u)		-			-			-			(56,635	)		-			-			-
Charges pertaining to ERP system implementation (v)		-			-			(1,190	)		-			-			-			-
(Charges) credits pertaining to LFI and other similar arrangements comp. liability		(3,318	)		(23,526	)		14,086			(31,657	)		(40,634	)		(35,494	)		44,261
Expenses associated with senior management transition (s)		-			-			-			-			-			-			(33,019	)
Compensation related to noncontrolling interests (o)		(11,900	)		(8,285	)		(10,999	)		(11,175	)		(7,927	)		(9,216	)		(10,855	)
Compensation & benefits expense, as adjusted	$	1,325,325		$	1,481,062		$	1,516,632		$	1,463,928		$	1,502,123		$	1,836,227		$	1,656,838

(k)	Special deferred incentive awards are granted outside the year end compensation process and include grants to new hires, retention awards, and performance units earned under PRSU grants.
(l)	Under U.S. GAAP, an estimate is made for future forfeitures of the deferred portion of such awards. This estimate is based on both historical experience and future expectations. The result reflects the cost associated with awards that are expected to vest. This calculation is undertaken in order to present awarded compensation on a similar basis to GAAP compensation. Amounts for all periods represent estimated forfeitures.
(m)	Awarded Compensation and Benefits was restated in 2017 to eliminate the year-end foreign exchange adjustment to better align awarded compensation with revenue. The impact of the change is not material.
(n)	Deferred compensation awards ratio is deferred year-end incentive awards, divided by total awarded compensation excluding sign-on and other special deferred incentive awards and actual/estimated forfeitures.
(o)	Noncontrolling interests include revenue and expenses principally related to Edgewater, ESC Funds and a Special Purpose Acquisition Company.
(p)	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 expense, respectively, and excludes bad debt expense, which represents fees that are deemed uncollectible.
(q)	Represents losses related to the reclassification of currency translation adjustments to earnings from accumulated other comprehensive loss associated with restructuring and closing of certain of our offices.
(r)	Expenses associated with restructuring and closing of certain offices.
(s)	Represents expenses associated with senior management transition reflecting the departure of certain executive officers
(t)	Represents building depreciation and other costs related to office space reorganization.
(u)	Represents expenses and losses associated with a business realignment which included employee reductions and the closing of subscale offices and investment strategies.
(v)	Represents expenses associated with Enterprise Resource Planning (ERP) system implementation.
TBD	To be determined