{"id":485030,"date":"2021-04-30T06:52:15","date_gmt":"2021-04-30T10:52:15","guid":{"rendered":"https:\/\/www.marketnewsdesk.com\/index.php\/lazard-ltd-reports-first-quarter-2021-results\/"},"modified":"2021-04-30T06:52:15","modified_gmt":"2021-04-30T10:52:15","slug":"lazard-ltd-reports-first-quarter-2021-results","status":"publish","type":"post","link":"https:\/\/www.marketnewsdesk.com\/index.php\/lazard-ltd-reports-first-quarter-2021-results\/","title":{"rendered":"Lazard Ltd Reports First-Quarter 2021 Results"},"content":{"rendered":"

<\/p>\n

Lazard Ltd Reports First-Quarter 2021 Results<\/b><\/p>\n

Operating revenue up 15% with strong momentum <\/b>across our businesses<\/b><\/p>\n

Record quarter-end <\/b>assets under management of $265 billion<\/b><\/p>\n

Returned $237 million of capital to shareholders <\/b>in first quarter<\/b><\/p>\n

NEW YORK–(BUSINESS WIRE<\/a>)–
\nLazard Ltd (NYSE: LAZ) today reported operating revenue1<\/sup> of $648 million for the quarter ended March 31, 2021. Net income, as adjusted2<\/sup>, was $101 million, or $0.87 per share (diluted) for the quarter.\n<\/p>\n

\nFirst-quarter 2021 net income on a U.S. GAAP basis was $87 million, or $0.75 per share (diluted).\n<\/p>\n

\n\u201cWe are well positioned for the year ahead with record assets under management and high levels of activity across Financial Advisory in a strengthening macroeconomic environment,\u201d said Kenneth M. Jacobs, Chairman and Chief Executive Officer of Lazard. \u201cAs the rollout of COVID-19 vaccines expands, and fiscal and monetary stimulus take effect, confidence is growing among business leaders and investors globally.\u201d\n<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n

\n\u00a0\n<\/p>\n<\/td>\n

\n<\/tr>\n
\n

\n($ in millions, except per share data and AUM)\n<\/p>\n<\/td>\n

\n\n

Quarter Ended March 31,<\/b><\/p>\n<\/td>\n<\/tr>\n

\n\n\n

2021<\/span><\/b><\/p>\n<\/td>\n

\n

\n\u00a0\n<\/p>\n<\/td>\n

\n

2020<\/span><\/b><\/p>\n<\/td>\n

\n

\n\u00a0\n<\/p>\n<\/td>\n

\n

%\u201921-\u201920<\/span><\/b><\/p>\n<\/td>\n<\/tr>\n

\n

Net Income<\/span><\/b><\/p>\n<\/td>\n

\n\n\n\n\n<\/tr>\n
\n

\nU.S. GAAP\n<\/p>\n<\/td>\n

\n\n

\n$87\n<\/p>\n<\/td>\n

\n\n

\n$64\n<\/p>\n<\/td>\n

\n\n

\n36%\n<\/p>\n<\/td>\n<\/tr>\n

\n

\nPer share, diluted\n<\/p>\n<\/td>\n

\n\n

\n$0.75\n<\/p>\n<\/td>\n

\n\n

\n$0.56\n<\/p>\n<\/td>\n

\n\n

\n34%\n<\/p>\n<\/td>\n<\/tr>\n

\n

\nAdjusted2<\/sup><\/p>\n<\/td>\n

\n\n

\n$101\n<\/p>\n<\/td>\n

\n\n

\n$67\n<\/p>\n<\/td>\n

\n\n

\n52%\n<\/p>\n<\/td>\n<\/tr>\n

\n

\nPer share, diluted\n<\/p>\n<\/td>\n

\n\n

\n$0.87\n<\/p>\n<\/td>\n

\n\n

\n$0.58\n<\/p>\n<\/td>\n

\n\n

\n50%\n<\/p>\n<\/td>\n<\/tr>\n

\n

Operating Revenue<\/span><\/b>1<\/sup><\/p>\n<\/td>\n

\n\n\n\n\n<\/tr>\n
\n

\nTotal operating revenue\n<\/p>\n<\/td>\n

\n\n

\n$648\n<\/p>\n<\/td>\n

\n\n

\n$563\n<\/p>\n<\/td>\n

\n\n

\n15%\n<\/p>\n<\/td>\n<\/tr>\n

\n

\nFinancial Advisory\n<\/p>\n<\/td>\n

\n\n

\n$317\n<\/p>\n<\/td>\n

\n\n

\n$295\n<\/p>\n<\/td>\n

\n\n

\n8%\n<\/p>\n<\/td>\n<\/tr>\n

\n

\nAsset Management\n<\/p>\n<\/td>\n

\n\n

\n$328\n<\/p>\n<\/td>\n

\n\n

\n$269\n<\/p>\n<\/td>\n

\n\n

\n22%\n<\/p>\n<\/td>\n<\/tr>\n

\n

AUM ($ in billions)<\/span><\/b><\/p>\n<\/td>\n

\n\n

\n\u00a0\n<\/p>\n<\/td>\n

\n\n

\n\u00a0\n<\/p>\n<\/td>\n

\n\n

\n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n

\n

\nPeriod End\n<\/p>\n<\/td>\n

\n\n

\n$265\n<\/p>\n<\/td>\n

\n\n

\n$193\n<\/p>\n<\/td>\n

\n\n

\n37%\n<\/p>\n<\/td>\n<\/tr>\n

\n

\nAverage\n<\/p>\n<\/td>\n

\n\n

\n$261\n<\/p>\n<\/td>\n

\n\n

\n$222\n<\/p>\n<\/td>\n

\n\n

\n18%\n<\/p>\n<\/td>\n<\/tr>\n<\/table>\n

\nNote: Endnotes are on page 6 of this release. A reconciliation of adjusted GAAP to U.S. GAAP is on pages 11-12.\n<\/p>\n

OPERATING REVENUE<\/b><\/p>\n

\nOperating revenue was $648 million for the quarter ended March 31, 2021, 15% higher than the first quarter of 2020.\n<\/p>\n

Financial Advisory<\/span><\/b><\/p>\n

Our Financial Advisory results include M&A Advisory, Capital Advisory, Capital Raising, Restructuring, Shareholder Advisory, Sovereign Advisory, and other strategic advisory work for clients.<\/i><\/p>\n

\nFinancial Advisory operating revenue was $317 million for the first quarter of 2021, 8% higher than the first quarter of 2020.\n<\/p>\n

\nDuring and since the first quarter of 2021, Lazard has been engaged in significant and complex M&A transactions and other advisory assignments globally, including the following (clients are in italics): The Special Committee of the Board of Brookfield Property Partners<\/i> in Brookfield Asset Management\u2019s acquisition of 100% of BPY units, valuing BPY at $71.8 billion; The Special Committee of the Board of VMware<\/i> in Dell\u2019s $52.5 billion spin-off of its 81% equity stake in the company and VMware\u2019s payment of a special cash dividend; Altice Europe<\/i> in the $48.5 billion take-private offer by Patrick Drahi, and its $6.3 billion sale of its French towers to Cellnex; The Special Committee of the Board of Athene<\/i> in Athene\u2019s $11 billion merger with Apollo; Stonepeak\u2019s <\/i>$8.1 billion acquisition of Astound Broadband from TPG; M&T Bank\u2019s<\/i> $7.6 billion acquisition of People\u2019s United Financial; Kimco Realty<\/i> in its $5.9 billion merger with Weingarten Realty Investors; G4S<\/i> on the \u00a33.8 billion recommended cash offer from Allied Universal; Natixis <\/i>in the\u20ac3.7 billion acquisition of the remaining 29.3% stake in the company by BPCE; Goodyear Tire & Rubber\u2019s<\/i> $2.5 billion acquisition of Cooper Tire & Rubber; Servier\u2019s<\/i> $2.0 billion acquisition of Agios Pharmaceuticals\u2019 oncology business; and Five Prime Therapeutics\u2019 <\/i>$1.9 billion sale to Amgen.<\/i><\/p>\n

\nLazard has one of the world\u2019s preeminent restructuring practices, with a long track record of successfully advising businesses and governments. During and since the first quarter of 2021, we have been engaged in a broad range of highly visible and complex restructuring and debt advisory assignments for debtors or creditors, including roles involving: Abengoa; AccorInvest; Assured Guaranty in connection with Puerto Rico\u2019s restructuring; Belk; Cinepolis; CorpGroup; Debenhams; Diamond Offshore Drilling; Europcar; Express; Garrett Motion; NMC Health; Peabody; Premier Oil; Seadrill Limited; Ursa Piceance; and Valaris.\n<\/p>\n

\nOur Capital 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.\n<\/p>\n

For a list of publicly announced Financial Advisory transactions on which Lazard advised in the first quarter of 2021, or continued to advise or completed since March 31, 2021, please visit our website at www.lazard.com\/businesses\/transactions<\/a>.<\/i><\/p>\n

Asset Management<\/span><\/b><\/p>\n

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.<\/i><\/p>\n

\nAsset Management operating revenue was $328 million for the first quarter of 2021, 22% higher than the first quarter of 2020.\n<\/p>\n

\nManagement fees and other revenue was $295 million, 10% higher than the first quarter of 2020, and 4% higher than the fourth quarter of 2020.\n<\/p>\n

\nAverage AUM for the first quarter of 2021 was $261 billion, 18% higher than the first quarter of 2020, and 6% higher than the fourth quarter of 2020.\n<\/p>\n

\nAUM as of March 31, 2021, was $265 billion, up 2% from December 31, 2020, and up 37% from March 31, 2020. The sequential increase from December 31, 2020 was driven by market appreciation of $12.5 billion, partially offset by foreign exchange depreciation of $4.6 billion and net outflows of $1.7 billion.\n<\/p>\n

\nIncentive fees during the period were $33 million, compared to $2 million for the first quarter of 2020.\n<\/p>\n

OPERATING EXPENSES<\/b><\/p>\n

Compensation and Benefits<\/span><\/b><\/p>\n

In managing compensation and benefits expense, we focus on annual awarded compensation (cash compensation and benefits plus deferred incentive compensation with respect to the applicable year, net of estimated future forfeitures and excluding charges). We believe annual awarded compensation reflects the actual annual compensation cost more accurately than the GAAP measure of compensation cost, which includes applicable-year cash compensation and the amortization of deferred incentive compensation principally attributable to previous years\u2019 deferred compensation. We believe that by managing our business using awarded compensation with a consistent deferral policy, we can better manage our compensation costs, increase our flexibility in the future and build shareholder value over time. <\/i><\/p>\n

\nFor the first quarter of 2021, we accrued adjusted compensation and benefits expense1 <\/sup>at an adjusted compensation ratio of 59.5%, compared to the first-quarter 2020 ratio of 60.0%. This resulted in $385 million of compensation and benefits expense, compared to $338 million for the first quarter of 2020.\n<\/p>\n

\nWe manage our compensation and benefits expense based on awarded compensation with a consistent deferral policy. 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, with consistent deferral policies.<\/i><\/p>\n

Non-Compensation Expense<\/span><\/b><\/p>\n

\nFor the first quarter of 2021, adjusted non-compensation expense1<\/sup> was $102 million, 9% lower than the first quarter of 2020, primarily reflecting lower travel and business development expenses.\n<\/p>\n

\nThe ratio of adjusted non-compensation expense to operating revenue was 15.8% for the first quarter of 2021, compared to 20.0% for the first quarter of 2020.\n<\/p>\n

\nOur goal remains to achieve an adjusted non-compensation expense-to-operating revenue ratio over the cycle of 16% to 20%.\n<\/p>\n

TAXES<\/b><\/p>\n

\nThe provision for taxes, on an adjusted basis1<\/sup>, was $41 million for the first quarter of 2021. The effective tax rate, on an adjusted basis, was 28.6% for the first quarter of 2021, compared to 28.8% for the first quarter of 2020 and 20.2% for the full year of 2020.\n<\/p>\n

CAPITAL MANAGEMENT AND BALANCE SHEET <\/b><\/p>\n

Our primary capital management goals include managing debt and returning capital to shareholders through dividends and share repurchases. <\/i><\/p>\n

\nIn the first quarter of 2021, Lazard returned $237 million to shareholders, which included: $49 million in dividends; $123 million in share repurchases of our common stock; and $65 million in satisfaction of employee tax obligations in lieu of share issuances upon vesting of equity grants.\n<\/p>\n

\nAs of March 31, 2021, we have repurchased 2.9 million shares of our common stock at an average price of $42.30 per share.\n<\/p>\n

\nOn April 29, 2021, our Board of Directors authorized additional share repurchases of up to $300 million, which expires as of December 31, 2022, bringing our total outstanding share repurchase authorization to $439 million.\n<\/p>\n

\nOn April 29, 2021, Lazard declared a quarterly dividend of $0.47 per share on its outstanding common stock. The dividend is payable on May 21, 2021, to stockholders of record on May 10, 2021.\n<\/p>\n

\nLazard\u2019s financial position remains strong. As of March 31, 2021, our cash and cash equivalents were $975 million, and stockholders\u2019 equity related to Lazard\u2019s interests was $765 million.\n<\/p>\n

\n***\n<\/p>\n

CONFERENCE CALL<\/b><\/p>\n

\nLazard will host a conference call at 8:00 a.m. EDT on Friday, April 30, 2021, to discuss the company\u2019s financial results for the first quarter of 2021. The conference call can be accessed via a live audio webcast available through Lazard\u2019s Investor Relations website at www.lazard.com<\/a>, or by dialing 1 (800) 458-4121 (U.S. and Canada) or +1 (323) 794-2093 (outside of the U.S. and Canada), 15 minutes prior to the start of the call.\n<\/p>\n

\nA replay of the conference call will be available by 10:00 a.m. EDT, Friday, April 30, 2021, via the Lazard Investor Relations website at www.lazard.com<\/a>, or by dialing 1 (888) 203-1112 (U.S. and Canada) or +1 (719) 457-0820 (outside of the U.S. and Canada). The replay access code is 6389433.\n<\/p>\n

ABOUT LAZARD<\/b><\/p>\n

\nLazard, one of the world’s preeminent financial advisory and asset management firms, operates from more than 40 cities across 25 countries in North America, Europe, Asia, Australia, Central and South America. With origins dating to 1848, the firm provides advice on mergers and acquisitions, strategic matters, restructuring and capital structure, capital raising and corporate finance, as well as asset management services to corporations, partnerships, institutions, governments and individuals. For more information on Lazard, please visit www.lazard.com<\/a>. Follow Lazard at @Lazard.\n<\/p>\n

\n***\n<\/p>\n

Cautionary Note Regarding Forward-Looking Statements: <\/i><\/p>\n

This press release contains forward-looking statements. In some cases, you can identify these statements by forward-looking words such as \u201cmay\u201d, \u201cmight\u201d, \u201cwill\u201d, \u201cshould\u201d, \u201ccould\u201d, \u201cwould\u201d, \u201cexpect\u201d, \u201cplan\u201d, \u201canticipate\u201d, \u201cbelieve\u201d, \u201cestimate\u201d, \u201cpredict\u201d, \u201cpotential\u201d, \u201ctarget,\u201d \u201cgoal\u201d, or \u201ccontinue\u201d, 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, including with respect to the current COVID-19 pandemic, 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.<\/i><\/p>\n

These factors include, but are not limited to, those discussed in our Annual Report on Form 10-K under Item 1A \u201cRisk Factors,\u201d and also discussed from time to time in our reports on Forms 10-Q and 8-K, including the following:<\/i><\/p>\n