Lazard Ltd Reports 2005 Full Year and Fourth Quarter Results; Pro Forma Net Income Per Share Increased 100% to $1.72 for the Full Year and 54% to $0.57 for the Fourth Quarter.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Lazard Lazard Ltd. (NYSE: LAZ) is the parent company of Lazard LLC, a New York-based, independent investment bank with approximately 2,200 employees in Europe, North America, Asia and Australia. Ltd (NYSE NYSE See: New York Stock Exchange :LAZ LAZ Balkan Bulgarian Airlines (ICAO code) LAZ Lazarett (German; field hospital) LAZ Lvovskiy Avtobusnyi Zavod (Lvov) LAZ Launch Azimuth ): Highlights --Achieved record annual operating revenues operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. (a) of $1,357.6 million, an increase of 22% over 2004 --Increased Mergers and Acquisitions ("M&A") revenues by 40% to $674.5 million for the full year 2005 and 9% to $183.0 million for the fourth quarter of 2005 --Grew assets under management Assets Under Management (AUM) is a term used by financial services companies in the mutual fund and money management or investment management business to gauge how much money they are managing. to a record $88.2 billion at year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. --Increased operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. (b) by 83% to pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma $248.9 million for the full year 2005 and 7% to $77.1 million for the fourth quarter of 2005 --Increased pro forma net income on a fully exchanged basis by 100% to $172.3 million or $1.72 per common share (diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. ) for the full year 2005 and 56% to $57.3 million or $0.57 per common share (diluted) for the fourth quarter of 2005 --Increased income from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the before exchange of outstanding exchangeable interests by 100% to pro forma $64.5 million or $1.72 per common share (diluted) for the full year 2005 and 58% to $21.7 million or $0.57 per common share (diluted) for the fourth quarter of 2005 --Authorized $100 million share repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. program over the next two years Lazard Ltd (NYSE: LAZ) today announced financial results for the full fiscal year and quarter ended December December: see month. 31, 2005. Pro forma net income, assuming full exchange of outstanding exchangeable interests, increased 100% to $172.3 million, or $1.72 per common share (diluted), from $86.3 million, or $0.86 per common share (diluted), for 2004. For the full year 2005, operating revenues(a) increased 22% to $1,357.6 million compared to $1,116.5 million for 2004, resulting from growth in both our Financial Advisory and Asset Management businesses. For the full year 2005 compared to 2004, M&A revenues increased 40%, Financial Restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). revenues increased 8%, Corporate Finance and Other revenues increased 12% and Asset Management revenues increased 12%. Pro forma operating income increased 83% to $248.9 million for the full year 2005 compared to $136.1 million for 2004. Income from continuing operations before exchange of outstanding exchangeable interests increased 100% to $64.5 million, or $1.72 per common share (diluted), compared to pro forma $32.3 million, or $0.86 per common share (diluted), for 2004. For the fourth quarter of 2005, pro forma net income, assuming full exchange of outstanding exchangeable interests, increased 56% to $57.3 million, or $0.57 per common share (diluted), from $36.6 million, or $0.37 per common share (diluted) for the fourth quarter of 2004. M&A revenues increased 9% compared to the fourth quarter of 2004. Financial Restructuring revenues decreased in the fourth quarter of 2005 compared to the fourth quarter of 2004, primarily due to the timing of completed transactions. Asset Management revenues increased 10% compared to the fourth quarter of 2004. Operating revenues for the fourth quarter of 2005 were slightly below the fourth quarter of 2004 at $387.7 million. Operating income increased 7% to $77.1 million for the fourth quarter of 2005 compared to pro forma $71.7 million for the fourth quarter of 2004. Income from continuing operations before exchange of outstanding exchangeable interests increased 58% to pro forma $21.7 million for the fourth quarter of 2005, or $0.57 per common share (diluted), compared to pro forma $13.7 million, or $0.37 per common share (diluted), for the fourth quarter of 2004. "By every measure, 2005 was an outstanding and historic year for Lazard," said Bruce Wasserstein Bruce Wasserstein (born December 25, 1947 in Brooklyn, New York)[1] is an American investment banker and businessman. He is a graduate of the University of Michigan, Harvard Business School, and Harvard Law School, and is currently the Chairman and CEO of Lazard LLC. , Chairman and Chief Executive Officer of Lazard Ltd. "We have delivered on our promises and remain dedicated to serving our clients and creating shareholder value." Steven Ste´ven n. 1. Voice; speech; language. Ye have as merry a steven As any angel hath that is in heaven. - Chaucer. 2. An outcry; a loud call; a clamor. To set steven to make an appointment. J. Golub, Lazard's Vice Chairman, noted, "This year's exceptional performance reflects strength across all areas of the firm. Following the successful completion of our IPO (Initial Public Offering) The first time a company offers shares of stock to the public. While not a computer term per se, many founders, employees and insiders of computer companies have found this acronym more exciting than any tech term they ever heard. in May 2005, we have demonstrated the vitality vi·tal·i·ty n. 1. The capacity to live, grow, or develop. 2. Physical or intellectual vigor; energy. of the Lazard franchise and the strength of our business model. We are well positioned to continue to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. the robust M&A and financial markets environment." Lazard believes that pro forma results assuming full exchange of outstanding exchangeable interests provide the most meaningful basis for comparison among present, historical and future periods. See sections "Historical Results" and "Basis of Historical and Pro Forma Information" later in this release for a discussion of Lazard's historical results and the basis of presentation for Lazard Ltd's historical and pro forma financial information. The Company's quarterly revenues and profits can fluctuate materially depending on the number and size of completed transactions on which it advised, as well as seasonality and other factors. Accordingly, the revenues and profits in any particular quarter may not be indicative indicative: see mood. of future results. As such, Lazard management believes that annual results are the most meaningful. Net Revenues Financial Advisory Lazard's Financial Advisory business encompasses general strategic and transaction-specific advice to public and private companies, governments and other parties, and includes Financial Restructuring as well as various corporate finance services. Some of our assignments and, therefore, related revenues, are not reflected in publicly available statistical information. These revenues are reflected in our financial statements. Financial Advisory revenues increased 32% to $864.8 million for the full year 2005 compared to $655.2 million for 2004, driven by strong M&A performance. For the fourth quarter of 2005, strength in M&A was offset by lower Financial Restructuring revenues in the quarter resulting in a 4% decrease in Financial Advisory revenues to $238.2 from $247.9 million for the fourth quarter of 2004. M&A M&A revenues increased 40% to $674.5 million and 9% to $183.0 million for the 2005 full year and the fourth quarter, respectively, compared to $481.7 million and $167.7 million for the corresponding 2004 periods, reflecting an increase in both our productivity and industry-wide completed mergers and acquisitions. Completed fourth quarter 2005 M&A transactions included the following transactions on which Lazard advised: --Mitsubishi Tokyo Tokyo (tō`kēō), city (1990 pop. 8,163,573), capital of Japan and of Tokyo prefecture, E central Honshu, at the head of Tokyo Bay. Financial in its $41.4 billion acquisition of UFJ UFJ United Financial of Japan (bank) UFJ Upper Flex Joint Holdings --Viacom on the $36.9 billion spin-off The situation that arises when a parent corporation organizes a subsidiary corporation, to which it transfers a portion of its assets in exchange for all of the subsidiary's capital stock, which is subsequently transferred to the parent corporation's shareholders. of its cable network business --WellChoice in its $6.6 billion merger with WellPoint Noun 1. wellpoint - a perforated tube driven into the ground to collect water from the surrounding area well point tube, tubing - conduit consisting of a long hollow object (usually cylindrical) used to hold and conduct objects or liquids or gases --Paxson Special Committee regarding Paxson's $2.4 billion strategic agreement with NBC Universal NBC Universal is a media and entertainment company formed in May 2004 by the combination of General Electric's NBC with Vivendi Universal Entertainment (part of the French Media Group, Vivendi SA). GE owns 80% of NBC Universal with the remaining 20% owned by Vivendi SA. --Hapag-Lloyd in TUI's EUR EUR In currencies, this is the abbreviation for the Euro. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 2.0 billion acquisition of CP Ships --Versatel Telecom in its EUR 1.1 billion sale to Tele2 and Apax --Telecom Italia in its EUR 1.1 billion sale of real estate properties to two joint ventures controlled by Morgan Stanley  To comply with Wikipedia's , the introduction of this article needs a complete rewrite. Real
Estate Funds and Cypress Grove Cypress Grove is an English singer and guitarist who has worked with Jeffrey Lee Pierce from The Gun Club .He is noted for his attacking vocal delivery and raw guitar sound. Both Nick Cave and Jack White from The White Stripes are said to be admirers. International--Tupperware on its $557 million acquisition of Sara Lee's direct selling Direct selling is the marketing of products or services to consumers through sales tactics including presentations, demonstrations, and phone calls. It is sometimes also considered to be a sale that does not utilize a "middle man" such as a retail outlets, distributors or brokers. operations --El Paso on the sale of certain South Louisiana Louisiana (ləwē'zēăn`ə, l  ē'–), state in the S central United States. It is bounded by Mississippi, with the Mississippi R. midstream mid·stream n. 1. The middle part of a stream. 2. The part of a course that is neither at the beginning nor at the end: the midstream of life. Noun 1. assets to Crosstex Energy for $486 million Among the pending M&A transactions announced since the third quarter and on which Lazard is advising are the following transactions: --SuperValu in the $17.4 billion acquisition by SuperValu SuperValu or Supervalu is a name used by grocery chains in multiple countries:
--Icahn Group in its analysis of various strategic alternatives to maximize In a graphical environment, to enlarge a window to the full size of the screen. See Win Maximize windows. the value of all Time Warner shareholders' interests --Consortium formed by Eiffage Eiffage (Euronext: FGR) is a french construction company. It was formed in 1992 by way of an amalgamation of a series of businesses: Fougerolle (founded 1844), Quillery (founded 1863), Beugnet (founded 1871) and La Societe Auxiliaire d' Enterprises Electriques et de Travaux Public, and Macquarie Macquarie, river, 590 mi (950 km) long, rising in the Blue Mts., E New South Wales, Australia, and flowing NW to the Darling River. It flows through an important sheep- and wheat-raising area. in its EUR 12.1 billion acquisition of Autoroutes Paris Rhin Rhone --Sprint Nextel (Nextel Communications, Inc., Reston, VA, www.nextel.com) A wireless communications carrier founded in New Jersey in 1987 as Fleet Call, a two-way radio service. Throughout the late 1980s and 1990s, the company acquired a large number of SMR (Specialized Mobile Radio) operators and turned in its $10.0 billion purchase of Nextel Partners --Abbott in its $4.6 billion acquisition from Boston Scientific The Boston Scientific Corporation (NYSE: BSX) (abbreviated BSC), is a worldwide developer, manufacturer and marketer of medical devices whose products are used in a range of interventional medical specialties, including interventional cardiology, peripheral interventions, of Guidant's vascular vascular /vas·cu·lar/ (vas´ku-ler) 1. pertaining to vessels, particularly blood vessels. 2. indicative of a copious blood supply. vas·cu·lar adj. business --American Bioscience bioscience /bio·sci·ence/ (-si´ens) the study of biology wherein all the applicable sciences (physics, chemistry, etc.) are applied. bi·o·sci·ence n. See life science. in its $4.1 billion merger with American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Pharmaceutical Partners --Texas Instruments in the $3.0 billion sale of its Sensors
--Disney in the $2.7 billion merger of ABC Radio ABC Radio is a broadcasting unit of Citadel Broadcasting Corporation.[1] ABC Radio was, from 1945 until 2007, the division of the American Broadcasting Company (ABC) focused on AM radio and FM radio broadcasting. , its radio unit, with Citadel Broadcasting
Citadel Broadcasting Corporation NYSE: CDL is a Las Vegas, Nevada based broadcast holding company. Investment house Forstmann Little & Company owns 27% of Citadel. --CDC Ixis, a member of the CGW CGW Computer Graphics World (magazine) CGW Computer Gaming World CGW Chicago Great Western CGW Corning Glass Works CGW Coated Groundwood (paper) CGW Communication Gateway consortium, in its EUR 1.6 billion sale of Technical SAS's real estate portfolio to Bail Investissement --Royal Bank of Scotland Bank of Scotland plc is a commercial and clearing bank, based in Edinburgh, Scotland. With a history dating to the 17th century, it is the oldest surviving bank in what is now the United Kingdom, and is the only commercial institution created by the Parliament of Scotland to Equity Finance in its GBP GBP In currencies, this is the abbreviation for the British Pound. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 700 million sale of Doncasters to Dubai International Capital Dubai International Capital (DIC) was established in October 2004 as the international investment arm of Dubai Holding. DIC, while focused on the private equity asset class, operates through three divisions:
--Pfizer in its $1.3 billion acquisition of the Sanofi-Aventis' worldwide rights to Exubera --iPayment Special Committee regarding the $800 million sale of the company to a management-led investor group --The Town & Country Trust in its sale Financial Restructuring Financial Restructuring revenues were $103.4 million for the full year 2005 compared to $96.1 million for 2004 and were $23.0 million for the 2005 fourth quarter compared to $43.6 million for the fourth quarter of 2004. The fourth quarter of 2004 was that year's strongest quarter for Financial Restructuring due to the timing of completed transactions. The third quarter of 2005, with $40.0 million of revenues, was the strongest quarter for Financial Restructuring in 2005. Completed fourth quarter 2005 Restructuring transactions included advising Intermet on strategic issues, creditor An individual to whom an obligation is owed because he or she has given something of value in exchange. One who may legally demand and receive money, either through the fulfillment of a contract or due to injury sustained as a result of another's Negligence negotiations and development of a plan of reorganization The process of carrying out, through agreements and legal proceedings, a business plan for winding up the affairs of, or foreclosing a mortgage upon, the property of a corporation that has become insolvent. in connection with its Chapter 11 bankruptcy bankruptcy, in law, settlement of the liabilities of a person or organization wholly or partially unable to meet financial obligations. The purposes are to distribute, through a court-appointed receiver, the bankrupt's assets equitably among creditors and, in most and Huffy on its Chapter 11 bankruptcy and the sale of non-core assets. Notable recently announced Restructuring assignments include our retention by the UAW (spelling) UAW - Misspelling of "IAW"? to advise in connection with Ford Motor Company's request for relief related to post-retirement health care obligations and in connection with Delphi's bankruptcy proceedings bankruptcy proceedings n. the bankruptcy procedure is: a) filing a petition (voluntary or involuntary) to declare a debtor person or business bankrupt, or, under Chapter 11 or 13, to allow reorganization or refinancing under a plan to meet the debts of the party , by SunCom SunCom is a wireless carrier that has operated in the southeastern United States since 1999 and in parts of the Caribbean since 2004. SunCom provides digital wireless communications services to more than 1,000,000 customers, employs more than 1,900 people and offers international, Wireless to assist with its $1.7 billion of indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. , and by the Official Unsecured Creditors Unsecured Creditor An individual or institution that lends money without obtaining specified assets as collateral. This poses a higher risk to the creditor because they have nothing to fall back on should the borrower default on the loan. A debenture holder is an unsecured creditor. Committee in the Calpine
adj. Of or relating to the Olympic Games. Olympic Adjective of the Olympic Games Adj. 1. Olympic - of or relating to the Olympic Games; "Olympic winners" 2. Airlines, and the Official Unsecured Creditors Committee in connection with Northwest For names and places containing the slightly longer word 'northwestern' (or variants), see . Northwest or north west is the ordinal direction halfway between north and west on a compass. It is the opposite of southeast. Airlines' Chapter 11 filing. Asset Management Asset Management net revenues increased 12% to $466.2 million and 10% to $139.5 million for the 2005 full year and fourth quarter of 2005, respectively, compared with $417.2 million and $127.2 million for the corresponding 2004 periods. Management fees increased 9% to $389.4 million and increased 6% to $98.4 million for the 2005 full year and fourth quarter, respectively, compared with $357.2 million and $92.8 million for the corresponding 2004 periods. The increases in the full year and fourth quarter 2005 periods compared to the corresponding 2004 periods were driven by growth in average assets under management. Average assets under management rose 7% in 2005 to $86.1 billion from $80.3 billion for 2004. Assets under management totaled $88.2 billion at the end of 2005, a record level, representing a 2% increase from the end of the 2004 due principally to market appreciation. While net outflows occurred for the 2005 annual period, the fourth quarter experienced modest net inflows. Incentive fees increased 63% to $44.6 million and 54% to $34.0 million for the full year and fourth quarter of 2005, respectively, compared with $27.4 million and $22.0 million for the corresponding 2004 periods. Expenses Compensation and Benefits The compensation and benefits expense to operating revenues ratio declined to 57.0% for 2005 full year from 57.5% for 2004 on a pro forma basis. Compensation and benefits expense increased 21% to pro forma $774.2 million for the full year 2005, compared with pro forma $642.0 million for 2004. This increase was modestly less than the annual increase in operating revenues of 22%. Compensation and benefits expense decreased 5% to $216.5 million for the fourth quarter of 2005, compared with pro forma $227.8 million for the corresponding 2004 period. Non-Compensation Non-compensation expenses, excluding the effects of the Tax Receivable Agreement(c) and one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. IPO-related costs, were $254.8 million or 18.8% of operating revenues for the full year 2005, compared with $260.9 million or 23.4% of operating revenues for 2004, and were $70.9 million or 18.3% of operating revenues for the fourth quarter of 2005 compared with $77.4 million or 19.5% of operating revenues for the corresponding prior year period. The decrease in the ratio is due to operating leverage Operating Leverage A measurement of the degree to which a firm or project relies on fixed rather than variable costs. Notes: The higher the degree of operating leverage, the greater the potential danger from forecasting risk. from higher operating revenues and various cost containment cost containment, n the features of a dental benefits program or of the administration of the program designed to reduce or eliminate certain charges to the plan. initiatives. Including the effects of the Tax Receivable Agreement, non-compensation expenses were $257.5 million or 19.0% of operating revenues for the full year 2005 (excluding one-time IPO-related costs). Provision for Income Taxes For the 2005 full year on a pro forma basis and for the fourth quarter of 2005, the provision for taxes was $52.2 million and $10.7 million, respectively, compared with a pro forma provision for taxes of $26.1 million and $13.3 million for the corresponding 2004 periods. The pro forma effective tax rates for the full years 2005 and 2004 were 21.0% and 19.2%, respectively. This increase in effective tax rate was due to an increase in non-U non-U adj. Chiefly British Not characteristic of the upper class, especially in language usage. [non- + U2. .S. income taxes allocable al·lo·ca·ble adj. Capable of being allocated. Adj. 1. allocable - capable of being distributed allocatable, apportionable distributive - serving to distribute or allot or disperse to the minority interest's share of Lazard Group's income. On a fully exchanged basis, the pro forma effective tax rates for each of the full years 2005 and 2004, including the effects of the Tax Receivable Agreement for the 2005 period, was 28%. Share Repurchase Authorization The right or permission to use a system resource; the process of granting access. See access control. The Board of Directors of Lazard Ltd has authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: the repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. of up to $100 million in aggregate cost of the company's common stock. The share repurchase program will be used primarily to offset shares to be issued under Lazard Ltd's 2005 Equity Incentive Plan. Purchases may be made in the open market or through privately negotiated transactions in 2006 and 2007. Pro Forma Non-GAAP Information The unaudited pro forma financial information is included for informational purposes only and does not purport To convey, imply, or profess; to have an appearance or effect. The purport of an instrument generally refers to its facial appearance or import, as distinguished from the tenor of an instrument, which means an exact copy or duplicate. PURPORT, pleading. to reflect the results of operations of Lazard Ltd that would have occurred had it operated as a separate, independent company during the periods presented. Actual results might have differed from pro forma results if Lazard Ltd had operated independently. The pro forma consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: financial information should not be relied upon as being indicative of Lazard Ltd's results of operations had the transactions contemplated in connection with the separation and recapitalization Recapitalization Restructuring a company's debt and equity mixture often with the aim of making a company's capital structure more stable. Notes: Companies often want to diversify their debt-to-equity ratio to improve liquidity. transactions, including the IPO and the additional financing transactions, been completed on the dates assumed. The pro forma financial information also does not project the results of operations for any future period. Pro forma amounts for operating income, net income and net income per share for the full year 2005, exclude one-time IPO-related professional fees and other costs incurred in the second quarter of $4.6 million, $3.3 million and 3 cents per fully diluted share, respectively. Historical Results Historical net income is reported as a historical partnership until the IPO on May 10, 2005 and for periods prior to the IPO does not include payments for services rendered by managing directors as compensation expense, a provision for U.S. federal income taxes and a charge for the minority interest relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the outstanding exchangeable interests. Such payments, tax provisions and minority interest expense are included in subsequent periods. Therefore, historical results for periods prior to the IPO on May 10, 2005 and subsequent to the IPO are not comparable. Notwithstanding such lack of comparability, historical income from continuing operations decreased 36% to $161.1 million for the 2005 full year from $252.0 million for 2004 and decreased by 81% to $23.9 million for the fourth quarter of 2005 from $126.4 million for the fourth quarter of 2004, reflecting these significant differences in reporting payments for services rendered by managing directors and in tax provisions and minority interest expense. On an historical basis, compensation and benefits increased 50% to $698.7 million, and 58% to $216.5 million for the full year and the fourth quarter of 2005, respectively, compared with $466.1 million and $136.9 million for the corresponding 2004 periods. As described above, historical compensation and benefits are not on a comparable basis between periods prior to the IPO and subsequent to the IPO. Prior to the IPO, payments for services rendered by all managing directors and by employee members of LAM were not included in compensation and benefits expense whereas for periods subsequent to the IPO they are included. On an historical basis, the provision for income taxes for the full year and fourth quarter of 2005 was $59.0 million and $8.5 million, respectively, compared with a tax provision of $28.3 million and $15.1 million for the corresponding periods in 2004. The increase in the provision in the full year 2005 period was due to increased profitability in locations that are subject to corporate income taxes, including a provision for U.S. federal income taxes for the period commencing May 10, 2005. Conference Call Bruce Wasserstein, Chairman and Chief Executive Officer, Steven Golub, Vice Chairman, and Michael Michael, archangel Michael (mī`kəl) [Heb.,=who is like God?], archangel prominent in Christian, Jewish, and Muslim traditions. In the Bible and early Jewish literature, Michael is one of the angels of God's presence. Castellano, Chief Financial Officer, will host a conference call today at 10:00 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy to discuss the company's 2005 full year and fourth quarter results. The conference call can be accessed via a live audio webcast available through the Investor Relations Investor relations The process by which the corporation communicates with its investors. website at www.lazard.com or by dialing 1-800-395-0708 (for the U.S. and Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of ) and 1-913-981-5560 (outside of the U.S. and Canada) 15 minutes prior to the start of the call. On-demand On-Demand refers to a service or feature which addresses the user's need for instant gratification and immediacy of use. In most cases the value proposition for an on-demand service is wrapped up in the fact that the user or consumer of the service avoids a significant up-front replay of the webcast will be available beginning at 1:00 p.m. EST P.M. also p.m. or p.m. abbr. post meridiem Usage Note: By definition, 12 a.m. today through February February: see month. 14, 2006, via the same website or by phone by dialing 1-888-203-1112 (for the U.S. and Canada) and 1-719-457-0820 (outside of the U.S. and Canada); the access code is 2943480. Additional financial, statistical and business-related information is included in a financial supplement. This earnings release, the financial supplement and selected transaction information is available today on our website at www.lazard.com. Lazard, one of the world's preeminent pre·em·i·nent or pre-em·i·nent adj. Superior to or notable above all others; outstanding. See Synonyms at dominant, noted. [Middle English, from Latin prae financial advisory and asset management firms This is a list of corporations that provide financial asset management.
 r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). , Asia, Australia Australia (ôstrāl`yə), smallest continent, between the Indian and Pacific oceans. With the island state of Tasmania to the south, the continent makes up the Commonwealth of Australia, a federal parliamentary state (2005 est. pop. and South America South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. . With origins
dating back to 1848, the firm provides services including mergers and
acquisitions advice, asset management, and restructuring advice to
corporations, partnerships, institutions, governments, and individuals.
For more information on Lazard, please visit www.lazard.com.Cautionary Note Regarding Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This press release contains "forward-looking statements." In some cases, you can identify these statements by forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. words such as "may", "might", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential" or "continue", and the negative of these terms and other comparable terminology The terminology used in the computer and telecommunications field adds tremendous confusion not only for the lay person, but for the technicians themselves. What many do not realize is that terms are made up by anybody and everybody in a nonchalant, casual manner without any regard or . These forward-looking statements are not historical facts but instead represent only our belief regarding future results, many of which, by their nature, are inherently uncertain and outside of our control. 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 Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. by these forward-looking statements. These factors include, but are not limited to, those discussed in our Registration Statement on Form S-1 (Commission file number 333-121407) under the caption "Risk Factors," including the following: --A decline in general economic conditions or the global financial markets; --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. Basis of Historical and Pro Forma Information In connection with the IPO on May 10, 2005, Lazard Ltd and its subsidiaries entered into a series of separation and recapitalization transactions, including the separation of its Capital Markets and Other activities from Lazard Group LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control , a Delaware Delaware, state, United States Delaware (dĕl`əwâr, –wər), one of the Middle Atlantic states of the United States, the country's second smallest state (after Rhode Island). limited liability company that holds Lazard Ltd's businesses. As a result of completing the IPO, Lazard Ltd has no material operating assets Operating Assets Another term for working capital. other than its indirect ownership of the common membership interests of Lazard Group and its managing member interest in Lazard Group. As of December 31, 2005, the Lazard Group common membership interests were held 37.6% by Lazard Ltd and 62.4% by LAZ-MD Holdings which are effectively exchangeable over time, on a one-for-one basis, for shares of Lazard Ltd common stock. LAZ-MD Holdings is a holding company owned by current and former managing directors of Lazard Group. Under generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. ("U.S. GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). "), Lazard's historical consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge reflect the historical results of operations of Lazard Group, including the separated businesses, until May 10, 2005, which was the effective date of the separation. The separated businesses are presented as discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. as required under U.S. GAAP. The historical financial statements do not reflect what the results of operations of Lazard Ltd or Lazard Group would have been had these companies operated as separate, independent public entities for the periods presented. In addition, the historical results of operations for periods prior to and subsequent to the IPO are not on a comparable basis. Specifically, for periods prior to the IPO the historical results of operations under U.S. GAAP do not give effect to the following matters: --Payments for services rendered by Lazard's managing directors, which, as a result of Lazard operating as a limited liability company, had been accounted for prior to the IPO as distributions from members' capital, or, in some cases, as minority interest, rather than as compensation and benefits expense, and --U.S. corporate federal income taxes, since Lazard has operated in the U.S. as a limited liability company that was treated as a partnership for U.S. federal income tax purposes. For periods subsequent to the IPO, the historical results of operations under U.S. GAAP include: --Payments for services rendered by managing directors within compensation and benefits expense, --Provision for U.S. federal income taxes, and --Allocation of profits to LAZ-MD Holdings' membership interests in Lazard Group as minority interest. The unaudited pro forma condensed con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. consolidated statements of income information contained in this press release present Lazard's historical financial information adjusted to reflect the separation and recapitalization transactions, including the IPO and the additional financing transactions, assuming they had been completed as of the beginning of each period presented. The adjustments also include: --Payments for services rendered by managing directors, --Income taxes Lazard expects to pay as a corporation, --Minority interest expense reflecting LAZ-MD Holdings' ownership of the Lazard Group common membership interests, and --Exclusion of one-time IPO-related costs.
(a) Operating revenues exclude interest expense relating to financing
activities which are included in net revenues and revenues
relating to the consolidation of LAM General Partnerships.
(b) Operating income is after interest expense and before income taxes
and minority interests.
(c) Entered into in May 2005 with LFCM Holdings.
LAZARD LTD
PRO FORMA OPERATING REVENUES
Three Months Ended December 31,
-------------------------------------
Increase /
2005 2004 (Decrease)
---------- ---------- ---------------
($ in thousands)
Financial Advisory
M&A $ 182,984 $ 167,653 $ 15,331 9%
Financial Restructuring 23,037 43,600 (20,563) (47%)
Corporate Finance and Other 32,180 36,696 (4,516) (12%)
---------- ---------- ----------
Total 238,201 247,949 (9,748) (4%)
Asset Management
Management Fees 98,366 92,802 5,564 6%
Incentive Fees 33,977 22,036 11,941 54%
Other Revenue 7,150 12,372 (5,222) (42%)
---------- ---------- ----------
Total 139,493 127,210 12,283 10%
Corporate (10,617) 1,781 (12,398) -
---------- ---------- ----------
Net Revenues 367,077 376,940 (9,863) (3%)
Less - LAM GP Related Revenue (32) - (32) -
Add - Non-LFB Interest Expense 20,670 19,236 1,434 -
---------- ---------- ----------
Operating Revenues $ 387,715 $ 396,176 $ (8,461) (2%)
========== ========== ==========
Year Ended December 31,
-------------------------------------
Increase /
2005 2004 (Decrease)
---------- ---------- ---------------
($ in thousands)
Financial Advisory
M&A $ 674,543 $ 481,726 $192,817 40%
Financial Restructuring 103,404 96,100 7,304 8%
Corporate Finance and Other 86,864 77,374 9,490 12%
---------- ---------- ----------
Total 864,811 655,200 209,611 32%
Asset Management
Management Fees 389,414 357,229 32,185 9%
Incentive Fees 44,627 27,354 17,273 63%
Other Revenue 32,147 32,583 (436) (1%)
---------- ---------- ----------
Total 466,188 417,166 49,022 12%
Corporate (50,522) (33,307) (17,215) -
---------- ---------- ----------
Net Revenues 1,280,477 1,039,059 241,418 23%
Less - LAM GP Related Revenue (2,784) - (2,784) -
Add - Non-LFB Interest Expense 79,942 77,479 2,463 -
---------- ---------- ----------
Operating Revenues $1,357,635 $1,116,538 $ 241,097 22%
========== ========== ==========
LAZARD LTD
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Pro Forma
---------------------------------------------------
Three Months Year
Ended December 31, Ended December 31,
------------------------- -------------------------
2005 2004 2005 2004
------------ ------------ ------------ ------------
($ in thousands, except per share data)
Total revenues $391,869 $400,613 $1,377,023 $1,134,381
LFB interest
expense (4,154) (4,437) (19,388) (17,843)
------------ ------------ ------------ ------------
Operating
revenues 387,715 396,176 1,357,635 1,116,538
LAM GP related
revenue 32 - 2,784 -
Other interest
expense (20,670) (19,236) (79,942) (77,479)
------------ ------------ ------------ ------------
Net revenues 367,077 376,940 1,280,477 1,039,059
Operating
expenses:
Compensation
and benefits 216,455 227,801 774,159 642,009
Premises and
occupancy
costs 18,053 19,706 68,566 74,102
Professional
fees 15,221 18,108 48,397 48,706
Travel and
entertainment 13,428 11,678 44,196 45,157
Provision
pursuant to
tax receivable
agreement 2,685 - 2,685 -
Other 24,151 27,900 93,618 92,977
------------ ------------ ------------ ------------
Operating expenses 289,993 305,193 1,031,621 902,951
------------ ------------ ------------ ------------
Operating income 77,084 71,747 248,856 136,108
Provision for
income taxes 10,733 13,323 52,178 26,115
------------ ------------ ------------ ------------
Income before
minority
interests 66,351 58,424 196,678 109,993
Minority interests
(excluding
LAZ-MD) (a) 182 17,525 9,622 14,242
Minority interests
(LAZ-MD only) 44,426 27,162 122,599 63,406
------------ ------------ ------------ ------------
Net income from
continuing
operations $21,743 $13,737 $64,457 $32,345
============ ============ ============ ============
Net income
assuming full
exchange of
exchangeable
interests $57,261 $36,630 $172,267 $86,253
============ ============ ============ ============
Weighted average
shares outstanding:
Basic 37,500,000 37,500,000 37,500,000 37,500,000
Diluted 99,770,394 100,000,000 37,539,208 100,000,000
Net income per
share:
Basic $0.58 $0.37 $1.72 $0.86
Diluted $0.57 $0.37 $1.72 $0.86
Weighted average
shares outstanding,
assuming full exchange
of exchangeable
interests:
Basic 99,618,749 100,000,000 99,835,275 100,000,000
Diluted 99,770,394 100,000,000 99,874,483 100,000,000
Net income per
share, assuming
full exchange of
exchangeable
interests:
Basic $0.57 $0.37 $1.73 $0.86
Diluted $0.57 $0.37 $1.72 $0.86
(a) Primarily includes (i) charges relating to our strategic alliance
in Italy of $786 and $4,141 in the three months ended December 31,
2005 and 2004, respectively, and $6,460 and $3,741 in the years ended
December 31, 2005 and 2004, respectively, and (ii) charges related to
the consolidation of LAM related GPs of $32 and $2,784 in the three
months and year ended December 31, 2005, respectively.
See Notes to Unaudited Pro Forma Condensed Consolidated Statements of
Income
LAZARD LTD
UNAUDITED HISTORICAL CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Historical net income is reported as a historical partnership until
the IPO on May 10, 2005 and does not include payments for services
rendered by managing directors as compensation expense and a provision
for U.S. federal income taxes. In addition, historical net income for
periods prior to the IPO do not include a charge for the minority
interest relating to the outstanding exchangeable interests. Such
payments, tax provisions and minority interest expense are included in
subsequent periods. Therefore, historical results for periods prior to
the IPO on May 10, 2005 and subsequent to the IPO are not comparable.
Historical
---------------------------------------------------
Three Months Year
Ended December 31, Ended December 31,
------------------------- -------------------------
2005 2004 2005 2004
------------ ------------ ------------ ------------
($ in thousands, except per share data)
Total revenues $391,869 $400,613 $1,377,023 $1,134,381
LFB interest
expense (4,154) (4,437) (19,388) (17,843)
------------ ------------ ------------ ------------
Operating
revenues 387,715 396,176 1,357,635 1,116,538
LAM GP related
revenue 32 - 2,784 -
Other interest
expense (20,670) (5,296) (58,977) (21,708)
------------ ------------ ------------ ------------
Net revenues 367,077 390,880 1,301,442 1,094,830
Operating
expenses:
Compensation
and benefits 216,455 136,948 698,683 466,064
Premises and
occupancy
costs 18,053 19,706 68,566 74,102
Professional
fees 15,221 18,108 51,332 48,706
Travel and
entertainment 13,428 11,678 44,196 45,157
Provision
pursuant to
tax receivable
agreement 2,685 - 2,685 -
Other 24,151 27,900 93,618 92,977
------------ ------------ ------------ ------------
Operating expenses 289,993 214,340 959,080 727,006
------------ ------------ ------------ ------------
Operating income 77,084 176,540 342,362 367,824
Provision for
income taxes 8,542 15,058 58,985 28,272
------------ ------------ ------------ ------------
Income before
minority
interests 68,542 161,482 283,377 339,552
Minority interests
(excluding
LAZ-MD) (a) 182 35,127 18,703 87,553
Minority interests
(LAZ-MD only) 44,426 - 103,612 -
------------ ------------ ------------ ------------
Income from
continuing
operations 23,934 126,355 161,062 251,999
Income (loss) from
discontinued
operations and
extraordinary
gain - (13,697) (17,576) (5,025)
------------ ------------ ------------ ------------
Net income $23,934 $112,658 $143,486 $246,974
============ ============ ============ ============
Weighted average
shares outstanding:
Basic 37,500,000 - 37,500,000 -
Diluted 37,651,645 - 37,561,138 -
Net income per
share from
continuing
operations (b):
Basic $0.64 - $1.45 -
Diluted $0.64 - $1.45 -
(a) Includes (i) charges relating to our strategic alliance in Italy
of $786 and $4,141 in the three months ended December 31, 2005 and
2004, respectively and $6,460 and $3,741 in the years ended December
31, 2005 and 2004, respectively, and (ii) charges related to the
consolidation of LAM related GPs of $32 and $2,784 in the three months
and year ended December 31, 2005, respectively, and (iii) payments for
services rendered by our managing directors and employee members of
LAM of $17,602 in the three months ended December 31, 2004 and $9,081
and $73,311 in the years ended December 31, 2005 and 2004,
respectively.
(b) Excludes net income allocable to members of Lazard Group of
$89,175, for the period January 1, 2005 through May 9, 2005.
See Notes to Unaudited Pro Forma Condensed Consolidated Statements of
Income
LAZARD LTD
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
Three Month Period Ended December 31, 2005
---------------------------------------------
Pro Forma as
Adjusted,
Pro Forma Prior to Full
Historical Adjustments Exchange
------------ ------------ ------------
($ in thousands, except per share data)
Total revenues $391,869 $- $391,869
LFB interest expense (4,154) - (4,154)
------------ ------------ ------------
Operating revenues 387,715 - 387,715
LAM GP related revenue 32 (a) - 32
Other interest expense (20,670)(b) - (20,670)
------------ ------------ ------------
Net revenues 367,077 - 367,077
Operating expenses:
Compensation and
benefits 216,455 - 216,455
Premises and occupancy
costs 18,053 - 18,053
Professional fees 15,221 - 15,221
Travel and
entertainment 13,428 - 13,428
Provision pursuant to
tax receivable
agreement 2,685 (p) - 2,685
Other 24,151 - 24,151
------------ ------------ ------------
Operating expenses 289,993 - 289,993
------------ ------------ ------------
Operating income (loss) 77,084 - 77,084
Provision for income
taxes 8,542 2,191 (f) 10,733
------------ ------------ ------------
Income (loss) before
minority interests 68,542 (2,191) 66,351
Minority interests
(excluding LAZ-MD) 182 - 182
Minority interests (LAZ-
MD only) 44,426 - 44,426
------------ ------------ ------------
Income from continuing
operations 23,934 (2,191) 21,743
Income (loss) from
discontinued operations - - -
------------ ------------ ------------
Net income $23,934 ($2,191) $21,743
============ ============ ============
Weighted average shares
outstanding:
Basic 37,500,000 (h)
Diluted 99,770,394 (h)
Net income per share:
Basic $0.58 (i)
Diluted $0.57 (i)
Three Month Period Ended
December 31, 2005
------------------------------
Pro Forma Pro Forma as
Adjustment Adjusted,
for Full After Full
Exchange Exchange
------------ ------------
($ in thousands, except per
share data)
Total revenues $- $391,869
LFB interest expense - (4,154)
------------ ------------
Operating revenues - 387,715
LAM GP related revenue - 32
Other interest expense - (20,670)
------------ ------------
Net revenues - 367,077
Operating expenses:
Compensation and benefits - 216,455
Premises and occupancy costs - 18,053
Professional fees - 15,221
Travel and entertainment - 13,428
Provision pursuant to tax receivable
agreement - 2,685
Other - 24,151
------------ ------------
Operating expenses - 289,993
------------ ------------
Operating income (loss) - 77,084
Provision for income taxes 8,908 (j) 19,641
------------ ------------
Income (loss) before minority interests (8,908) 57,443
Minority interests (excluding LAZ-MD) - 182
Minority interests (LAZ-MD only) (44,426)(k) -
------------ ------------
Income from continuing operations 35,518 57,261
Income (loss) from discontinued
operations - -
------------ ------------
Net income $35,518 $57,261
============ ============
Weighted average shares outstanding:
Basic 99,618,749 (l)
Diluted 99,770,394 (m)
Net income per share:
Basic $0.57 (n)
Diluted $0.57 (n)
See Notes to Unaudited Pro Forma Condensed Consolidated Statements of
Income
LAZARD LTD
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
Three Month Period Ended December 31, 2004
---------------------------------------------
Pro Forma as
Adjusted,
Pro Forma Prior to Full
Historical Adjustments Exchange
------------ ------------ ------------
($ in thousands, except per share data)
Total revenues $400,613 $- $400,613
LFB interest expense (4,437) - (4,437)
------------ ------------ ------------
Operating revenues 396,176 - 396,176
Other interest expense (5,296)(b) (13,940)(d) (19,236)
------------ ------------ ------------
Net revenues 390,880 (13,940) 376,940
Operating expenses:
Compensation and
benefits 136,948 90,853 (e) 227,801
Premises and occupancy
costs 19,706 - 19,706
Professional fees 18,108 - 18,108
Travel and
entertainment 11,678 - 11,678
Provision pursuant to
tax receivable
agreement - - -
Other 27,900 - 27,900
------------ ------------ ------------
Operating expenses 214,340 90,853 305,193
------------ ------------ ------------
Operating income (loss) 176,540 (104,793) 71,747
Provision for income
taxes 15,058 (1,735)(f) 13,323
------------ ------------ ------------
Income (loss) before
minority interests 161,482 (103,058) 58,424
Minority interests
(excluding LAZ-MD) 35,127 (17,602)(e) 17,525
Minority interests
(LAZ-MD only) - 27,162 (g) 27,162
------------ ------------ ------------
Income (loss) from
continuing operations 126,355 (112,618) 13,737
Income (loss) from
discontinued operations
and extraordinary gain (13,697) 13,697 (c) -
------------ ------------ ------------
Net income (loss) $112,658 ($98,921) $13,737
============ ============ ============
Weighted average shares
outstanding:
Basic 37,500,000 (h)
Diluted 100,000,000 (h)
Net income per share:
Basic $0.37 (i)
Diluted $0.37 (i)
Three Month Period Ended
December 31, 2004
------------------------------
Pro Forma Pro Forma as
Adjustment Adjusted,
for Full After Full
Exchange Exchange
------------ ------------
($ in thousands,
except per share data)
Total revenues $- $400,613
LFB interest expense - (4,437)
------------ ------------
Operating revenues - 396,176
Other interest expense - (19,236)
------------ ------------
Net revenues - 376,940
Operating expenses:
Compensation and benefits - 227,801
Premises and occupancy costs - 19,706
Professional fees - 18,108
Travel and entertainment - 11,678
Provision pursuant to tax receivable
agreement - -
Other - 27,900
------------ ------------
Operating expenses - 305,193
------------ ------------
Operating income (loss) - 71,747
Provision for income taxes 4,269 (j) 17,592
------------ ------------
Income (loss) before minority interests (4,269) 54,155
Minority interests (excluding LAZ-MD) - 17,525
Minority interests (LAZ-MD only) (27,162)(k) -
------------ ------------
Income (loss) from continuing operations 22,893 36,630
Income (loss) from discontinued
operations
and extraordinary gain - -
------------ ------------
Net income (loss) $22,893 $36,630
============ ============
Weighted average shares outstanding:
Basic 100,000,000 (l)
Diluted 100,000,000 (m)
Net income per share:
Basic $0.37 (n)
Diluted $0.37 (n)
See Notes to Unaudited Pro Forma Condensed Consolidated Statements of
Income
LAZARD LTD
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
Year Ended December 31, 2005
----------------------------------------------
Pro Forma as
Adjusted,
Pro Forma Prior to Full
Historical Adjustments Exchange
------------ ------------ ------------
($ in thousands, except per share data)
Total revenues $1,377,023 $- $1,377,023
LFB interest expense (19,388) - (19,388)
------------ ------------ ------------
Operating revenues 1,357,635 - 1,357,635
LAM GP related revenue 2,784 (a) - 2,784
Other interest expense (58,977)(b) (20,965)(d) (79,942)
------------ ------------ ------------
Net revenues 1,301,442 (20,965) 1,280,477
Operating expenses:
Compensation and
benefits 698,683 75,476 (e) 774,159
Premises and
occupancy costs 68,566 - 68,566
Professional fees 51,332 (2,935)(o) 48,397
Travel and
entertainment 44,196 - 44,196
Provision pursuant to
tax receivable
agreement 2,685 (p) - 2,685
Other 93,618 - 93,618
------------ ------------ ------------
Operating expenses 959,080 72,541 1,031,621
------------ ------------ ------------
Operating income (loss) 342,362 (93,506) 248,856
Provision for income
taxes 58,985 (6,807)(f) 52,178
------------ ------------ ------------
Income (loss) before
minority interests 283,377 (86,699) 196,678
Minority interests
(excluding LAZ-MD) 18,703 (9,081)(e) 9,622
Minority interests
(LAZ-MD only) 103,612 18,987 (g) 122,599
------------ ------------ ------------
Income (loss) from
continuing operations 161,062 (96,605) 64,457
Income (loss) from
discontinued operations (17,576) 17,576 (c) -
------------ ------------ ------------
Net income (loss) $143,486 ($79,029) $64,457
============ ============ ============
Weighted average shares
outstanding:
Basic 37,500,000 (h)
Diluted 37,539,208 (h)
Net income per share:
Basic $1.72 (i)
Diluted $1.72 (i)
Year Ended December 31, 2005
------------------------------
Pro Forma Pro Forma as
Adjustment Adjusted,
for Full After Full
Exchange Exchange
------------ ------------
($ in thousands, except per
share data)
Total revenues $- $1,377,023
LFB interest expense - (19,388)
------------ ------------
Operating revenues - 1,357,635
LAM GP related revenue - 2,784
Other interest expense - (79,942)
------------ ------------
Net revenues - 1,280,477
Operating expenses:
Compensation and benefits - 774,159
Premises and occupancy costs - 68,566
Professional fees - 48,397
Travel and entertainment - 44,196
Provision pursuant to tax receivable
agreement - 2,685
Other - 93,618
------------ ------------
Operating expenses - 1,031,621
------------ ------------
Operating income (loss) - 248,856
Provision for income taxes 14,789 (j) 66,967
------------ ------------
Income (loss) before minority interests (14,789) 181,889
Minority interests (excluding LAZ-MD) - 9,622
Minority interests (LAZ-MD only) (122,599)(k) -
------------ ------------
Income (loss) from continuing operations 107,810 172,267
Income (loss) from discontinued
operations - -
------------ ------------
Net income (loss) $107,810 $172,267
============ ============
Weighted average shares outstanding:
Basic 99,835,275 (l)
Diluted 99,874,483 (m)
Net income per share:
Basic $1.73 (n)
Diluted $1.72 (n)
See Notes to Unaudited Pro Forma Condensed Consolidated Statements of
Income
LAZARD LTD
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
Year Ended December 31, 2004
---------------------------------------------
Pro Forma as
Adjusted,
Prior to Full
Historical Other Exchange
------------ ------------ ------------
($ in thousands, except per share data)
Total revenues $1,134,381 $- $1,134,381
LFB interest expense (17,843) - (17,843)
------------ ------------ ------------
Operating revenues 1,116,538 - 1,116,538
Other interest expense (21,708)(b) (55,771)(d) (77,479)
------------ ------------ ------------
Net revenues 1,094,830 (55,771) 1,039,059
Operating expenses:
Compensation and
benefits 466,064 175,945 (e) 642,009
Premises and occupancy
costs 74,102 - 74,102
Professional fees 48,706 - 48,706
Travel and
entertainment 45,157 - 45,157
Provision pursuant to
tax receivable
agreement - - -
Other 92,977 - 92,977
------------ ------------ ------------
Operating expenses 727,006 175,945 902,951
------------ ------------ ------------
Operating income (loss) 367,824 (231,716) 136,108
Provision for income
taxes 28,272 (2,157)(f) 26,115
------------ ------------ ------------
Income (loss) before
minority interests 339,552 (229,559) 109,993
Minority interests
(excluding LAZ-MD) 87,553 (73,311)(e) 14,242
Minority interests
(LAZ-MD only) - 63,406 (g) 63,406
------------ ------------ ------------
Income (loss) from
continuing operations 251,999 (219,654) 32,345
Income (loss) from
discontinued operations
and extraordinary gain (5,025) 5,025 (c) -
------------ ------------ ------------
Net income (loss) $246,974 ($214,629) $32,345
============ ============ ============
Weighted average shares
outstanding:
Basic 37,500,000 (h)
Diluted 100,000,000 (h)
Net income per share:
Basic $0.86 (i)
Diluted $0.86 (i)
Year Ended December 31, 2004
------------------------------
Pro Forma Pro Forma as
Adjustment Adjusted,
for Full After Full
Exchange Exchange
------------ ------------
($ in thousands, except per
share data)
Total revenues $- $1,134,381
LFB interest expense - (17,843)
------------ ------------
Operating revenues - 1,116,538
Other interest expense - (77,479)
------------ ------------
Net revenues - 1,039,059
Operating expenses:
Compensation and benefits - 642,009
Premises and occupancy costs - 74,102
Professional fees - 48,706
Travel and entertainment - 45,157
Provision pursuant to tax receivable
agreement - -
Other - 92,977
------------ ------------
Operating expenses - 902,951
------------ ------------
Operating income (loss) - 136,108
Provision for income taxes 9,498 (j) 35,613
------------ ------------
Income (loss) before minority interests (9,498) 100,495
Minority interests (excluding LAZ-MD) - 14,242
Minority interests (LAZ-MD only) (63,406)(k) -
------------ ------------
Income (loss) from continuing operations 53,908 86,253
Income (loss) from discontinued
operations and extraordinary gain - -
------------ ------------
Net income (loss) $53,908 $86,253
============ ============
Weighted average shares outstanding:
Basic 100,000,000 (l)
Diluted 100,000,000 (m)
Net income per share:
Basic $0.86 (n)
Diluted $0.86 (n)
See Notes to Unaudited Pro Forma Condensed Consolidated Statements of
Income
LAZARD LTD
Notes to Unaudited Pro Forma Condensed Consolidated Statements of
Income
(a) LAM GP related revenue relates to interests in LAM general
partnerships held directly by various of our managing directors
which is also deducted in minority interests.
(b) For the year ended December 31, 2005 interest expense includes a
credit of $8,000, which represents accrued dividends on Lazard
Group's mandatorily redeemable preferred stock issued in March
2001 which was cancelled in connection with the redemption of
membership interests of historical partners. The three month
period and the year ended December 31, 2004 includes $2,000 and
$8,000 in accrued dividends relating to such mandatorily
redeemable preferred stock, respectively.
(c) Represents adjustments necessary to remove Lazard Group's
discontinued operations, and, when applicable, extraordinary gain,
related to the separated businesses.
(d) Represents (i) net incremental interest expense related to the
separation and recapitalization transactions, including the
financing transactions and the amortization of capitalized costs
associated with the financing transactions and (ii) for the year
ended December 31, 2005 only, exclusion of one-time IPO-related
costs of $1,661.
(e) The adjustment reflects payments for services rendered by our
employee members of LAM and managing directors, which prior to the
IPO were accounted for as either distributions from members'
capital or as minority interest expense. Following the completion
of the IPO, our policy is that our employee compensation and
benefits expense, including that payable to our managing
directors, will not exceed 57.5% of operating revenue each year
(although we retain the ability to change this policy in the
future). The adjustment for the 2004 periods also includes a
reduction to reflect the new compensation policy, as if it had
been in place during 2004. Without the latter adjustment, the full
year 2004 ratio would have been 73.5%. In 2005, the new
compensation arrangements were in effect and no similar adjustment
was necessary.
(f) Represents (i) a tax benefit related to the reclassification of
LAM minority interest, (ii) the net income tax impact associated
with the separation and recapitalization transactions and (iii) an
adjustment for Lazard Ltd entity-level taxes.
(g) Represents the adjustment for LAZ-MD Holdings' ownership of 62.5%
of the Lazard Group common membership interests outstanding
immediately after the IPO and 62.4% as of December 31, 2005.
(h) For basic net income per share, the weighted average shares
outstanding reflects the 37,500,000 shares of Class A common stock
outstanding immediately following the equity public offering. For
diluted net income per share, the three month period ended
December 31, 2005 includes incremental shares issuable from
non-vested stock unit awards and the LAZ-MD Holdings exchangeable
interests on an as-if-exchanged basis. The year ended December 31,
2005 includes incremental shares issuable from non-vested stock
unit awards and excludes the LAZ-MD Holdings exchangeable
interests on an as-if-exchanged basis, as they are not dilutive.
For diluted net income per share for the 2004 periods, the
weighted average shares outstanding reflects LAZ-MD Holdings
exchangeable interests on an as-if-exchanged basis. For all
periods, the shares issuable with respect to the exercise of the
purchase contracts associated with the equity security units
offered in the ESU offering and the IXIS ESU placement are not
included because, under the treasury stock method of accounting,
such securities are not currently dilutive.
(i) Calculated after considering the impact of all the pro forma
adjustments described above and based on the weighted average
basic and diluted shares outstanding, as applicable, as described
in note (h) above.
(j) Represents an adjustment for Lazard Ltd entity-level taxes to
effect a full exchange of LAZ-MD Holdings' ownership of Lazard
Group common membership interests, as of January 1, 2004.
(k) Represents a reversal of the minority interests related to LAZ-MD
Holdings' ownership of Lazard Group common membership interests to
effect a full exchange of interests as of January 1, 2004.
(l) For basic net income per share, as if the LAZ-MD Holdings
exchangeable interests were fully exchanged as of January 1, 2004,
and, with respect to the weighted average shares outstanding, (i)
for the three month period and year ended December 31, 2005,
reflects 99,618,749 and 99,835,275 shares of Class A Common Stock
outstanding, respectively, which includes the 100,000,000 Class A
Common Stock outstanding immediately following the equity public
offering, the IXIS private placement and recapitalization and the
LAZ-MD Holdings' membership interests in Lazard Group,
exchangeable on a one-for-one basis for Class A Common Stock, less
the impact of the repurchase of interests in LAZ-MD Holdings on
July 26, 2005 and (ii) for the three month period and year ended
December 31, 2004, reflects the 100,000,000 Class A Common Stock
outstanding mentioned above.
(m) For diluted net income per share, as if the LAZ-MD Holdings
exchangeable interests were fully exchanged as of January 1, 2004,
and, with respect to the weighted average shares outstanding, (i)
for the three month period and year ended December 31, 2005,
reflects 99,770,394 and 99,874,483 shares of Class A Common Stock
outstanding, respectively, which includes the 100,000,000 Class A
Common Stock outstanding immediately following the equity public
offering, the IXIS private placement and recapitalization and the
LAZ-MD Holdings' membership interests in Lazard Group,
exchangeable on a one-for-one basis for Class A Common Stock, plus
incremental shares issuable from non-vested stock unit awards less
the impact of the repurchase of interests in LAZ-MD Holdings on
July 26, 2005, respectively, and (ii) for the three month period
and year ended December 31, 2004, reflects the 100,000,000 Class A
Common Stock outstanding mentioned above.
(n) Calculated after considering the impact of all the pro forma
adjustments described above and based on the weighted average
basic and diluted shares outstanding, as applicable, as described
in notes (l) and (m) above.
(o) Represents exclusion of one-time IPO-related costs of $2,935 for
the year ended December 31, 2005 only.
(p) Represents estimated tax-related payments relating to the Tax
Receivable Agreement entered into in May 2005 with LFCM Holdings.
LAZARD LTD
UNAUDITED CONDENSED CONSOLIDATED
STATEMENT OF FINANCIAL CONDITION
AS OF DECEMBER 31, 2005
($ in thousands)
ASSETS
----------
Cash and cash equivalents $492,309
Cash and securities segregated for regulatory purposes 20,596
Securities owned - at fair value 272,176
Receivables 724,525
Other assets 400,691
------------
Total assets $1,910,297
============
LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIENCY)
---------------------------------------------------
Payables $521,505
Accrued compensation and benefits 345,490
Other liabilities 580,162
Senior notes:
Underlying equity security units 437,500
Others 584,582
Subordinated loans 200,000
------------
Total liabilities 2,669,239
Commitments and contingencies
Minority interest 111,729
STOCKHOLDERS' EQUITY (DEFICIENCY)
Common stock:
Class A, par value $ .01 per share 375
Class B, par value $ .01 per share
Additional paid-in capital (885,690)
Accumulated other comprehensive income (loss), net of tax (34,342)
Retained earnings 48,986
------------
Total stockholders' equity (deficiency) (870,671)
------------
Total liabilities and stockholders' equity (deficiency) $1,910,297
============
LAZARD LTD
RECONCILIATION OF PRO FORMA SHARES OUTSTANDING AND
NET INCOME FOR BASIC AND DILUTED E.P.S - - BEFORE FULL EXCHANGE
Three Month Period Ended December 31, 2005
----------------------------------------------
Weighted Net
Average Shares Net Income
Outstanding Income Per Share
-------------- -------------- --------------
($ in thousands, except per share data)
Amounts as reported for
basic net income per
share 37,500,000 $21,743 $0.58
==============
Amounts applicable to
LAZ-MD
exchangeable
interests:
Share of Lazard Group
income 44,426 (a)
Additional Corporate
tax (8,908)(b)
Shares issuable 62,118,749
Restricted stock units 151,645
-------------- --------------
Amounts as reported
for diluted net income
per share (c) 99,770,394 $57,261 $0.57
============== ============== ==============
Year Ended December 31, 2005
----------------------------------------------
Weighted Net
Average Shares Net Income
Outstanding Income Per Share
-------------- -------------- --------------
($ in thousands, except per share data)
Amounts as reported for
basic net income per
share 37,500,000 $64,457 $1.72
==============
Amounts applicable to
LAZ-MD exchangeable
interests:
Share of Lazard Group
income
Additional Corporate
tax
Shares issuable
Restricted stock units 39,208
-------------- --------------
Amounts as reported
for diluted net income
per share (c) 37,539,208 $64,457 $1.72
============== ============== ==============
Three Month Period Ended December 31, 2004
-----------------------------------------------
Weighted Net
Average Shares Net Income
Outstanding Income Per Share
-------------- -------------- --------------
($ in thousands, except per share data)
Amounts as reported
for basic net income
per share 37,500,000 $13,737 $0.37
==============
Amounts applicable to
LAZ-MD exchangeable
interests:
Share of Lazard
Group income 27,162 (a)
Additional Corporate
tax (4,269)(b)
Shares issuable 62,500,000
Restricted stock units -
-------------- --------------
Amounts as reported
for diluted net income
per share (c) 100,000,000 $36,630 $0.37
============== ============== ==============
Year Ended December 31, 2004
-----------------------------------------------
Weighted Net
Average Shares Net Income
Outstanding Income Per Share
-------------- -------------- --------------
($ in thousands, except per share data)
Amounts as reported
for basic net income
per share 37,500,000 $32,345 $0.86
==============
Amounts applicable to
LAZ-MD exchangeable
interests:
Share of Lazard
Group income 63,406 (a)
Additional Corporate
tax (9,498)(b)
Shares issuable 62,500,000
Restricted stock units
-------------- --------------
Amounts as reported
for diluted net income
per share (c) 100,000,000 $86,253 $0.86
============== ============== ==============
(a) Approximately 62.4% of the pro forma Lazard Group net income of
$71,246 for the three months ended December 31, 2005, and
approximately 62.5% of pro forma Lazard Group net income of
$43,460 and $101,450 for the three months and year ended December
31, 2004, respectively.
(b) Based on pro forma Lazard Group operating income of $79,820 for
the three month period ended December 31, 2005, and $71,747 and
$136,108 for the three months and year ended December 31, 2004,
respectively.
(c) The LAZ-MD exchangeable interests were antidilutive for the year
ended December 31, 2005, consequently the effect of their
conversion to shares of Class A Common Stock has been excluded
from diluted earnings per share during such period. The ESUs were
antidilutive for both the three month periods ended December 31,
2005 and 2004 and the years ended December 31, 2005 and 2004.
LAZARD LTD
RECONCILIATION OF PRO FORMA SHARES OUTSTANDING AND
NET INCOME FOR BASIC AND DILUTED E.P.S - - ASSUMING FULL EXCHANGE
AS OF JANUARY 1, 2004
Three Month Period Ended
December 31, 2005
--------------------------------------
Weighted
Average Net
Shares Net Income
Outstanding Income Per Share
------------ ------------ ------------
($ in thousands, except per share
data)
Amounts as reported for basic
net income per share 99,618,749 $57,261 $0.57
============
Restricted stock units 151,645
------------ ------------
Amounts as reported
for diluted net income per
share 99,770,394 $57,261 $0.57
============ ============ ============
Year Ended December 31, 2005
--------------------------------------
Weighted
Average Net
Shares Net Income
Outstanding Income Per Share
------------ ------------ ------------
($ in thousands, except per share
data)
Amounts as reported for basic
net income per share 99,835,275 $172,267 $1.73
============
Restricted stock units 39,208
------------ ------------
Amounts as reported
for diluted net income per
share 99,874,483 $172,267 $1.72
============ ============ ============
Three Month Period Ended
December 31, 2004
--------------------------------------
Weighted
Average Net
Shares Net Income
Outstanding Income Per Share
------------ ------------ ------------
($ in thousands, except per share
data)
Amounts as reported for basic
net income per share 100,000,000 $36,630 $0.37
============
Restricted stock units -
------------ ------------
Amounts as reported
for diluted net income per
share 100,000,000 $36,630 $0.37
============ ============ ============
Year Ended December 31, 2004
--------------------------------------
Weighted
Average Net
Shares Net Income
Outstanding Income Per Share
------------ ------------ ------------
($ in thousands, except per share
data)
Amounts as reported for basic
net income per share 100,000,000 $86,253 $0.86
============
Restricted stock units -
------------ ------------
Amounts as reported
for diluted net income per
share 100,000,000 $86,253 $0.86
============ ============ ============
LAZARD LTD
ASSETS UNDER MANAGEMENT ("AUM")
As of
------------------------------------------------------
Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
2005 2005 2005 2005 2004
---------- ---------- ---------- ---------- ----------
($ in millions)
Equities $70,896 $69,154 $66,077 $69,724 $69,745
Fixed Income 11,113 11,454 11,211 11,314 11,204
Alternative
Investments 3,394 3,204 3,054 2,921 2,800
Merchant Banking 826 801 801 523 551
Cash 2,005 1,979 1,869 1,775 2,135
---------- ---------- ---------- ---------- ----------
Total AUM $88,234 $86,592 $83,012 $86,257 $86,435
========== ========== ========== ========== ==========
Three Months Ended Year Ended
December 31, December 31,
--------------------- ---------------------
2005 2004 2005 2004
---------- ---------- ---------- ----------
($ in millions)
AUM - Beginning
of Period $86,592 $78,494 $86,435 $78,371
Net Flows 150 (1,626) (4,198) (3,489)
Market Appreciation 1,672 8,672 7,355 10,793
Foreign Currency
Adjustments (180) 895 (1,358) 760
---------- ---------- ---------- ----------
AUM - End of
Period $88,234 $86,435 $88,234 $86,435
========== ========== ========== ==========
Average AUM
(note) $87,413 $82,465 $86,106 $80,261
========== ========== ========== ==========
Note: Average AUM is based on an average of quarterly ending balances
for the respective periods
LAZARD LTD
SCHEDULE OF PRO FORMA INCOME TAX PROVISION
ALLOCATION OF OPERATING INCOME
----------------------------------
Three Months Year
Ended Ended
December 31, December 31,
----------------- -------------------
2005 2004 2005 2004
-------- -------- --------- ---------
($ in thousands)
Operating income:
Lazard Group $79,821 $71,747 $252,170 $136,108
Lazard Ltd (excluding
provision pursuant to tax
receivable agreement) (52) - (629) -
Lazard Ltd's provision
pursuant to tax receivable
agreement (2,685) - (2,685) -
-------- -------- --------- ---------
Total $77,084 $71,747 $248,856 $136,108
======== ======== ========= =========
Operating income allocable to Lazard Ltd
(excluding provision pursuant to tax receivable agreement):
Lazard Group (a) $30,047 $26,905 $94,789 $51,041
Lazard Ltd (100%) (52) - (629) -
-------- -------- --------- ---------
Total $29,995 $26,905 $94,160 $51,041
======== ======== ========= =========
Operating income allocable to
LAZ-MD Holdings:
Lazard Group (b) $49,774 $44,842 $157,381 $85,067
======== ======== ========= =========
PRO FORMA INCOME TAX PROVISION PRIOR TO FULL EXCHANGE
---------------------------------------------------------
Three Months Year
Ended Ended
December 31, December 31,
----------------- -------------------
2005 2004 2005 2004
-------- -------- --------- ---------
($ in thousands)
Lazard Ltd's entity level taxes
(28%) (c) $8,395 $6,597 $26,071 $13,355
Flow through provision for
Lazard Group income taxes
applicable to LAZ-MD Holdings'
ownership (b) - effective tax
rates of 10.5% and 15.0% for
the three month periods ended
December 31, 2005 and 2004,
respectively, and 18.3% and
15.0% for the years ended
December 31, 2005 and 2004,
respectively 5,023 6,726 28,792 12,760
Less: provision pursuant to tax
receivable agreement (2,685) - (2,685) -
-------- -------- --------- ---------
Total pro forma provision for
income taxes $10,733 $13,323 $52,178 $26,115
======== ======== ========= =========
Lazard Ltd consolidated
effective tax rate 13.9% 18.6% 21.0% 19.2%
======== ======== ========= =========
(a) Approximately 37.6% for the three months and year ended December
31, 2005, and approximately 37.5% in the three months and year
ended December 31, 2004.
(b) Approximately 62.4% for the three months and year ended December
31, 2005, and approximately 62.5% in the three months and year
ended December 31, 2004.
(c) Lazard Ltd's entity level taxes for the three months and year
ended December 31, 2005 is calculated at 28% of operating income
allocable to Lazard Ltd less Lazard Ltd's share of LAM GP related
revenues, which is $12 and $1,048, respectively.
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