Lazard Ltd Reports 2006 First Half and Second Quarter Results.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 ): --Record Financial Advisory and Asset Management Revenue for Each Period --Operating Income Up 72% for First Half and 49% for Second Quarter --Fully Exchanged Net Income Per Share of $1.11 for First Half and $0.60 for Second Quarter Highlights --Increased operating revenue operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. (a) by 28% to a record $762.0 million for the first half of 2006 and 24% to a record $410.8 million for the second quarter of 2006 --Increased Financial Advisory revenue by 31% to a record $484.2 million for the first half of 2006 and 24% to a record $262.1 million for the second quarter of 2006 --Increased Asset Management revenue by 15% to a record $249.0 million for the first half of 2006 and 19% to a record $129.8 million for the second quarter of 2006 --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 72% to $162.8 million for the first half of 2006 and 49% to $84.7 million for the second quarter of 2006 --Increased 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 net income on a fully exchanged basis by 82% to $115.4 million or $1.11 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 first half of 2006, and by 97% to $62.9 million or $0.60 per common share (diluted) for the second quarter of 2006 --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 82% to $43.2 million or $1.10 per common share (diluted) for the first half of 2006, and by 97% to $23.5 million or $0.59 per common share (diluted) for the second quarter of 2006 Lazard Ltd (NYSE: LAZ) today announced financial results for the first six months and second quarter ended June June: see month. 30, 2006. Pro forma net income, assuming full exchange of outstanding exchangeable interests, increased 82% to $115.4 million for the first six months of 2006, or $1.11 per common share (diluted), from $63.3 million, or $0.63 per common share (diluted), for the first six months of 2005. For the first six months of 2006, operating revenue(a) increased 28% to $762.0 million compared to $595.7 million for the first six months of 2005, resulting from growth in both Financial Advisory and Asset Management businesses. For the first six months of 2006 compared to the first six months of 2005, Financial Advisory revenue increased 31% and Asset Management revenue increased 15%. Operating income increased 72% to $162.8 million for the first six months of 2006, including a gain of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $5.3 million from the termination The point where a line, channel or circuit ends. See SCSI termination and hybrid. of our joint venture relationship in Italy Italy (ĭt`əlē), Ital. Italia, officially Italian Republic, republic (2005 est. pop. 58,103,000), 116,303 sq mi (301,225 sq km), S Europe. , compared to pro forma $94.5 million for the comparable 2005 period. Net income before exchange of outstanding exchangeable interests increased 82% to $43.2 million, or $1.10 per common share (diluted), compared to pro forma income from continuing operations of $23.7 million, or $0.63 per common share (diluted), for the first six months of 2005. For the second quarter of 2006, pro forma net income, assuming full exchange of outstanding exchangeable interests, increased 97% to $62.9 million, or $0.60 per common share (diluted), from $32.0 million, or $0.32 per common share (diluted) for the second quarter of 2005. Financial Advisory revenue increased 24% compared to the second quarter of 2005 and increased 18% compared to the first quarter of 2006. Asset Management revenue increased 19% compared to the second quarter of 2005. Operating revenue for the second quarter of 2006 increased 24% to $410.8 million compared to $330.1 million for the second quarter of 2005. Operating income increased 49% to $84.7 million for the second quarter of 2006, including a gain of approximately $5.3 million from the termination of our joint venture relationship in Italy, compared to pro forma $57.0 million for the second quarter of 2005. Net income before exchange of outstanding exchangeable interests increased 97% to $23.5 million for the second quarter of 2006, or $0.59 per common share (diluted), compared to pro forma income from continuing operations of $12.0 million, or $0.32 per common share (diluted), for the second quarter of 2005. "Lazard's strong results reflect our leadership position in Financial Advisory, as we continue to advise on some of the most complex and important transactions. Our results also show the steady progress of our Asset Management business, as we continue to win new mandates mandates, system of trusteeships established by Article 22 of the Covenant of the League of Nations for the administration of former Turkish territories and of former German colonies. with expanded product offerings," 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 are focused on creating value for our shareholders. Our approach is to apply intellectual rigor rigor /rig·or/ (rig´er) [L.] chill; rigidity. rigor mor´tis the stiffening of a dead body accompanying depletion of adenosine triphosphate in the muscle fibers. and creativity to all parts of our business." "We are pleased to report another strong quarter and record financial performance year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. ," noted 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. "Lazard's success is a result of continued demand for world-class world-class adj. 1. Ranking among the foremost in the world; of an international standard of excellence; of the highest order: a world-class figure skater. 2. , independent advice, our retention and attraction attraction /at·trac·tion/ (ah-trak´shun) 1. the force, act, or process that draws one body toward another. 2. of top talent, momentum in our Asset Management business and our continued focus on 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. . We believe we continue to be positioned for long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. growth." 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 revenue and profits can fluctuate materially depending on the number, size and timing of completed transactions on which it advised, as well as seasonality and other factors. Accordingly, the revenue 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. (a) Operating revenue excludes interest expense relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc financing activities and revenue relating to the consolidation of LAM General Partnerships, each of which are included in net revenue. (b) Operating income is after interest expense and before income taxes and minority interests. Net Revenue 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 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). as well as various corporate finance services. Some of our assignments and, therefore, related revenue, are not reflected in publicly available statistical information. This revenue is reflected in our financial statements. Financial Advisory revenue increased 31% to $484.2 million for the first six months of 2006, a record level for the period, compared to $369.1 million for the first six months of 2005. For the second quarter of 2006, Financial Advisory revenue increased 24% to $262.1 million, also a record level for the period, compared to $211.7 million for the second quarter of 2005. These increases were driven by continued strong M&A performance as well as significant growth in revenue for Corporate Finance and Other. M&A M&A revenue increased 29% to $391.8 million and 9% to $197.9 million for the first six months and second quarter of 2006, respectively, compared to $304.3 million and $182.0 million for the corresponding 2005 periods, reflecting both the continued increase in our productivity and strength in the overall mergers and acquisitions market environment. The first six months of 2006 represents our best first half performance ever. The second quarter of 2006 represents our best quarterly performance in M&A revenue since the fourth quarter of 2000. Completed M&A transactions in the second quarter of 2006 included the following transactions on which Lazard advised: --SuperValu in the $17.4 billion acquisition of Albertson's by SuperValu SuperValu or Supervalu is a name used by grocery chains in multiple countries:
--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 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. 12.1 billion acquisition of Autoroutes Paris Rhin Rhone --Duke Energy in its $14.1 billion merger with Cinergy Cinergy Corp. was an energy company based in Cincinnati, Ohio. Cinergy was created on October 24, 1994, from the merger of the Cincinnati Gas & Electric Company (CG&E) with PSI Energy and later included Union Light, Heat & Power (ULH&P) as well. --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 --Jefferson-Pilot in its $7.5 billion merger with Lincoln Lincoln, city and district, England Lincoln, city (1991 pop. 79,980) and district, Lincolnshire, E England, in the Parts of Kesteven, on the Witham River. Financial --Nippon Sheet Glass's 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. 3.4 billion acquisition of Pilkington --Abbott in its $4.6 billion acquisition 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 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, --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 --Education Management's $3.1 billion sale to Providence Equity Partners Providence Equity Partners is a private equity firm headquartered in Providence, Rhode Island that focuses on investments in media and telecommunications. It is one of the largest private investment firms specializing in equity investments in media and communications companies. and Goldman Sachs The Goldman Sachs Group, Inc., or simply Goldman Sachs (NYSE: GS) is one of the world's largest global investment banks. Goldman Sachs was founded in 1869, and is headquartered in the Lower Manhattan area of New York City at 85 Broad Street. Capital Partners --Texas Instruments in the $3.0 billion sale of its Sensors
--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 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:
--WENDEL Investissement's $1.0 billion acquisition of the Deutsch Deutsch is the German language word for German (adjective). Deutsche are Germans, while [ein] Deutscher is [a] German. Deutsch, and its various forms, may refer to:
Among the pending M&A transactions announced on which Lazard is advising are: --Gaz de France's EUR 37.8 billion merger with Suez Suez (s  ĕz`), city (1996 pop. 417,610), NE Egypt, at the northern end of the Gulf of Suez and at the southern terminus of the Suez Canal. --Abertis Infraestructuras' EUR 22.9 billion merger of equals with Autostrade --Pfizer's $16.6 billion sale of its Consumer Healthcare business to Johnson & Johnson --Cerberus' $14.0 billion consortium acquisition of a controlling stake in GMAC GMAC General Motors Acceptance Corporation GMAC Graduate Management Admission Council GMAC Give Me A Call GMAC Genetic Manipulation Advisory Committee GMAC Genetic Modification Advisory Committee (Singapore) GMAC Give Me A Chance --Fisher Scientific's $12.8 billion merger with Thermo Electron Thermo Electron Corporation (TMO (NYSE)) (incorporated 1956) is a major provider of analytical instruments and services for a variety of domains. Thermo has revenues of over $2 billion, and employs 11,000 people in 30 countries. --KeySpan's $11.8 billion sale to National Grid national grid Noun Brit & NZ 1. a network of high-voltage power lines linking major electric power stations 2. the arrangement of vertical and horizontal lines on an ordnance survey map --Canadian Pension Plan Investment Board in the $8.9 billion sale of Trizec Properties and Trizec 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 to Brookfield Properties Brookfield Properties Corporation TSX: BPO NYSE: BPO is a Toronto-based North American commercial real estate company. Brookfield Asset Management owns 50% of its outstanding common shares. and Blackstone Blackstone, river, c.50 mi (80 km) long, rising near Worcester, Mass., and flowing SE to Narragansett Bay at Providence, R.I. The river's clean water was a major factor in the early development of the area's textile industry. --Siemens' EUR 4.2 billion acquisition of Bayer's diagnostic division --Resolution Life's GBP 1.8 billion proposed merger with Britannic Bri·tan·nic adj. British. Britannic Adjective of Britain; British: Her Britannic Majesty Adj. 1. Group --Aviva's $2.9 billion acquisition of AmerUs Group --International Paper's $1.4 billion sale of its coated and super calendered cal·en·der n. A machine in which paper or cloth is made smooth and glossy by being pressed through rollers. tr.v. cal·en·dered, cal·en·der·ing, cal·en·ders papers business to CMP CMP (cytidine monophosphate): see cytosine. (1) (CMP Media LLC, Manhasset, NY, www.cmp.com) Part of United Business Media, CMP is a leading integrated media company that offers a wide variety of publications and services in the information Holdings LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control , an affiliate Affiliate Relationship between two companies when one company owns substantial interest, but less than a majority of the voting stock of another company, or when two companies are both subsidiaries of a third company. See: Subsidiaries, parent company. of Apollo Management Apollo Management L.P. is a private equity L.P. firm, founded in 1990 by Leon Black (Apollo Advisors). Based in New York, it also has offices in Los Angeles and London. It has invested over $16 billion in companies inside and outside the of the United States. L.P. --Uniland's EUR 1.1 billion sale to Cementos Portland Portland, town, England Portland, town (1991 pop. 12,945), Dorset, S England. It is on the Isle of Portland, a small rocky peninsula. Portland stone has been used in St. Paul's Cathedral and other important London buildings. Lobsters and crabs are harvested. Valderrivas --Camfin's EUR 1.0 billion joint venture with Gaz de France Gaz de France (GDF) is a French company which produces, transports and sells natural gas around the world and especially in France which is its main market, but also Belgium, the United Kingdom, Germany and other European countries. for the sale of natural gas in Italy --Caisse d'Epargne in the 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. of its partnership with Caisse Caisse, a French word, may refer to:
Financial Restructuring Financial Restructuring revenue was $34.6 million for the first six months of 2006, compared to $40.4 million for the first six months of 2005, and was $21.0 million for the 2006 second quarter, compared to $16.3 million for the second quarter of 2005. Global restructuring activity has been declining, with the global corporate default rate remaining near all-time all-time adj. Exceeding all others up to the present time: an all-time speed skating record. all-time Adjective Informal low levels. Recently completed Restructuring assignments include O'Sullivan
O'Sullivan is an Irish surname, associated with the southwestern part of Ireland, especially the counties of Cork and Kerry, which due to emigration is also common in Australia, North America and The UK. Industries and Kaiser Aluminum Kaiser Aluminum (NASDAQ: KALU) is an American aluminum producer. The company was founded in 1946 by American industrialist Henry J. Kaiser. Kaiser entered the aluminum business by purchasing two government-owned aluminum facilities in Washington state. Corporation. We are continuing our work on a number of other Restructuring assignments, including those involving Eurotunnel Eurotunnel plc (in the UK) and Eurotunnel SA (in France) make up the Eurotunnel Group, founded in August 1986, which manages and operates the Channel Tunnel between the UK and France. , Olympic O·lym·pic 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, 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, Eagle Family Foods, Collins & Aikman Aikman is a surname, and may refer to
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, 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 Creditors Committee and the UAW (spelling) UAW - Misspelling of "IAW"? in connection with Delphi's 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 with regard to alternatives for restructuring Ford Motor Company's post-retirement healthcare obligations. Corporate Finance and Other Corporate Finance and Other revenue was $57.7 million for the first six months of 2006, compared to $24.4 million for the first six months of 2005, and was $43.1 million for the 2006 second quarter compared to $13.4 million for the second quarter of 2005. These increases were primarily driven by our Private Fund Advisory Group, which advised on a number of large fund closings in the second quarter of 2006. Asset Management Asset Management revenue increased 15% to $249.0 million and 19% to $129.8 for the first six months and second quarter of 2006, respectively, both record levels, compared with $215.9 million and $108.9 million for the corresponding 2005 periods. Management fees increased 12% to $216.0 million and 16% to $112.2 million for the first six months and second quarter of 2006, respectively, compared with $192.8 million and $97.0 million for the corresponding 2005 periods. The second quarter of 2006 represents our highest quarterly management fees ever. Average 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. rose 12% for the second quarter of 2006 to $94.5 billion from $84.6 billion for the second quarter of 2005. Assets under management at the end of the second quarter of 2006 were $93.9 billion, representing a 6% increase over the level of assets under management 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. 2005, due principally to market appreciation. Assets under management at the end of the second quarter of 2006 declined from the first quarter 2006 record level, largely due to the timing of inflows and outflows, resulting in a net outflow of $1.6 billion in the second quarter. We continue to attract assets in global and regional products. Incentive fees were $13.9 million and $7.5 million for the first six months and second quarter of 2006, respectively, compared with $7.9 million and $3.1 million for the comparable 2005 periods, reflecting improved performance in certain funds that provide for such incentive fees with a measurement date in the respective periods. Expenses Compensation and Benefits The ratio of compensation and benefits expense to operating revenue measured 57.0% for the first six months and second quarter of 2006, compared to pro forma 57.5% for the comparable 2005 periods. Compensation and benefits expense increased 27% to $434.3 million and 23% to $234.1 million for the first six months and second quarter of 2006, respectively, compared with pro forma $342.5 million and $189.8 million for the respective 2005 periods, reflecting increases in operating revenue. Non-Compensation Non-compensation expenses were $126.1 million or 16.5% of operating revenue and $68.1 million or 16.6% of operating revenue for the first six months and second quarter of 2006, respectively, compared to pro forma $119.5 million or 20.1% of operating revenue and pro forma $63.6 or 19.3% of operating revenue for the comparable 2005 periods. The decrease in the ratio reflects 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 revenue and cost containment initiatives offset by increases in professional fees principally due to consulting fees related to legal and outsourced Outsourced is a modern day comedy of cross-cultural conflict and romance, directed by John Jeffcoat, released in 2007. Synopsis Todd Anderson (Josh Hamilton) spends his days managing a customer call center for American Novelty Products in Seattle, until his job, services, as well as costs to comply with Sarbanes-Oxley. Provision for Income Taxes The provision for income taxes was $34.7 million and $18.7 million for the first six months and second quarter of 2006, respectively, compared with a pro forma provision for income taxes of $24.3 million and $16.8 million for the corresponding 2005 periods. The effective tax rates for the first six months and second quarter of 2006 were 21.3% and 22.1%, respectively, compared to pro forma 25.7% and 29.5% for the corresponding 2005 periods. On a fully exchanged basis, the effective tax rate for the first six months and second quarter of 2006 and 2005 was 28% in each period. Minority Interest Minority interest was a $2.5 million expense and a $2.7 million benefit for the first six months and second quarter of 2006, respectively, representing elimination of the revenue from LAM general partnership interests held by certain of our managing directors which is reported in net revenue. In the corresponding 2005 periods, minority interest was a pro forma $4.7 million expense and a pro forma $9.0 million expense, respectively, and related primarily to our strategic alliance in Italy, which was terminated ter·mi·nate v. ter·mi·nat·ed, ter·mi·nat·ing, ter·mi·nates v.tr. 1. To bring to an end or halt: on May 15, 2006, and for which there were no comparable amounts in 2006. As a result of the termination of our joint venture relationship in Italy, we recorded a gain of $13.7 million, excluding transaction and other costs, which is included in Corporate revenue in the three- and six-month periods ended June 30, 2006. This gain increased operating income by approximately $5.3 million in both periods. Share Repurchases 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. Lazard repurchased 115,000 shares of its Class A common stock at an average price of $36.34 for a total cost of $4.2 million during the second quarter, pursuant to the share repurchase program of up to $100 million in aggregate cost of the company's common stock in 2006 and 2007. This program is intended to be used primarily to offset shares to be issued under Lazard Ltd's 2005 Equity Incentive Plan. Pro Forma Non-GAAP Information The unaudited pro forma financial information for the first six months and second quarter of 2005 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 (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. and the additional financing transactions, been completed on the date assumed. The pro forma financial information also does not project the results of operations for any future periods. The pro forma information on a fully exchanged basis is included since Lazard believes it provides the most meaningful basis for comparison among present, historical and future periods. Historical Results Historical net income is reported as a historical partnership until Lazard Ltd's 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, incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. interest expense relating to the financing transactions in connection with the IPO and recapitalization, a provision for U.S. federal income taxes and 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. Notwithstanding such lack of comparability, net income decreased 63% to $43.2 million and decreased 38% to $23.5 million for the first six months and second quarter of 2006, respectively, from historical income from continuing operations of $118.1 million and $37.9 million for the corresponding 2005 periods, reflecting these significant differences in reporting payments for services rendered by managing directors, interest expense and in tax provisions and minority interest expense. On an historical basis, compensation and benefits increased 63% to $434.3 million and 45% to $234.1 million for the first six months and second quarter of 2006, respectively, compared with $267.0 million and $161.1 million for the corresponding 2005 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. On an historical basis, the provision for income taxes for the first six months and second quarter of 2006 was $34.7 million and $18.7 million, respectively, compared with a tax provision of $33.3 million and $25.5 million for the corresponding 2005 periods. 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 10am EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT to discuss the company's financial results for the first half and second quarter of 2006. The conference call can be accessed via a live audio webcast available through Lazard's Investor Relations Investor relations The process by which the corporation communicates with its investors. website at www.lazard.com or by dialing (877) 502-9276 (for the U.S. and Canada) and +1 (913) 981-5591 (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 1pm EDT today through August 9, 2006, via the same website or by phone by dialing (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 4037022. Additional financial, statistical and business-related information is included in a financial supplement. This earnings release, the financial supplement and selected transaction information will be 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 advice on mergers and
acquisitions, restructuring and capital raising, as well as asset
management services 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 Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December December: see month. 31, 2005 under Item 1A "Risk Factors," and also disclosed dis·close tr.v. dis·closed, dis·clos·ing, dis·clos·es 1. To expose to view, as by removing a cover; uncover. 2. To make known (something heretofore kept secret). from time to time in reports on Forms 10-Q and 8-K 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. Lazard Ltd is committed to providing timely and accurate information to the investing public, consistent with our legal and regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. obligations. To that end, Lazard and its operating companies operating company A business that engages in transactions with outsiders. use their websites to convey convey v. to transfer title (official ownership) to real property (or an interest in real property) from one (grantor) to another (grantee) by a written deed (or an equivalent document such as a judgment of distribution which conveys real property from an estate). information about their businesses, including the anticipated release of quarterly financial results, quarterly financial, statistical and business-related information, and the posting of updates of assets under management in various hedge funds hedge fund, in finance, a highly speculative, largely unregulated investment device. Originating in the 1950s, the funds "hedge" by offsetting "short" positions (borrowing a security and then selling it at a higher price before repaying the lender) against "long" and mutual funds and other investment products managed by Lazard Asset Management LLC and its subsidiaries. Monthly updates of these funds will be posted to the Lazard Asset Management website (www.lazardnet.com) on the third business day following the end of each month. Investors can link to Lazard and its operating company websites through www.lazard.com. 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, 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 June 30, 2006, the Lazard Group common membership interests were held 37.7% by Lazard Ltd and 62.3% 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 for the period prior to the IPO 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 period prior to the IPO. 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, --Incremental interest expense relating to the financing transactions in connection with the IPO and recapitalization, --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 January January: see month. 1, 2005. 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 one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. IPO-related costs.
LAZARD LTD
OPERATING REVENUE
Three Months Ended June 30,
--------------------------------------
Pro Forma Increase/
2006 2005 (Decrease)
---------- ----------- -----------
($ in thousands)
Financial Advisory
M&A $197,856 $182,007 $15,849 9%
Financial Restructuring 21,047 16,263 4,784 29%
Corporate Finance and Other 43,149 13,381 29,768 222%
---------- ----------- -----------
Total 262,052 211,651 50,401 24%
Asset Management
Management Fees 112,203 97,033 15,170 16%
Incentive Fees 7,456 3,112 4,344 140%
Other Revenue 10,159 8,767 1,392 16%
---------- ----------- -----------
Total 129,818 108,912 20,906 19%
Corporate 18,970 9,568 9,402 -
---------- ----------- -----------
Operating Revenue 410,840 330,131 80,709 24%
LAM GP Related Revenue/(Loss) (2,722) - (2,722) -
Other Interest Expense (21,210) (19,790) (1,420) -
---------- ----------- -----------
Net Revenue $386,908 $310,341 $76,567 25%
========== =========== ==========
Six Months Ended June 30,
--------------------------------------
Pro Forma Increase/
2006 2005 (Decrease)
---------- ----------- -----------
($ in thousands)
Financial Advisory
M&A $391,839 $304,318 $87,521 29%
Financial Restructuring 34,640 40,411 (5,771) (14%)
Corporate Finance and Other 57,722 24,417 33,305 136%
---------- ----------- -----------
Total 484,201 369,146 115,055 31%
Asset Management
Management Fees 216,008 192,779 23,229 12%
Incentive Fees 13,939 7,933 6,006 76%
Other Revenue 19,089 15,154 3,935 26%
---------- ----------- -----------
Total 249,036 215,866 33,170 15%
Corporate 28,726 10,648 18,078 -
---------- ----------- -----------
Operating Revenue 761,963 595,660 166,303 28%
LAM GP Related Revenue/(Loss) 2,537 - 2,537 -
Other Interest Expense (41,334) (39,163) (2,171) -
---------- ----------- -----------
Net Revenue $723,166 $556,497 $166,669 30%
========== =========== ==========
LAZARD LTD
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended Six Months Ended
Ended June 30, Ended June 30,
------------------------ ------------------------
Pro Forma Pro Forma
2006 2005 2006 2005
----------- ------------ ----------- ------------
($ in thousands, except per share data)
Total revenue (a) $416,014 $336,398 $771,012 $606,405
LFB interest expense (5,174) (6,267) (9,049) (10,745)
----------- ------------ ----------- ------------
Operating revenue 410,840 330,131 761,963 595,660
LAM GP related
revenue (2,722) - 2,537 -
Other interest
expense (21,210) (19,790) (41,334) (39,163)
----------- ------------ ----------- ------------
Net revenue 386,908 310,341 723,166 556,497
Operating expenses:
Compensation and
benefits 234,148 189,826 434,287 342,505
Premises and
occupancy costs 17,545 17,477 34,136 33,860
Professional fees 20,527 11,802 35,404 20,660
Travel and
entertainment 11,065 11,130 19,952 20,105
Other 18,930 23,151 36,578 44,884
----------- ------------ ----------- ------------
Operating expenses 302,215 253,386 560,357 462,014
----------- ------------ ----------- ------------
Operating income from
continuing
operations 84,693 56,955 162,809 94,483
Provision for income
taxes 18,734 16,810 34,674 24,268
----------- ------------ ----------- ------------
Income before
minority interest in
net income 65,959 40,145 128,135 70,215
Minority interest in
net income
(excluding LAZ-MD)
(b) (2,722) 8,986 2,540 4,712
Minority interest in
net income (LAZ-MD
only) 45,136 19,192 82,364 41,800
=========== ============ =========== ============
Income from
continuing
operations $23,545 $11,967 $43,231 $23,703
=========== ============ =========== ============
Income from continuing
operations assuming
full exchange of
exchangeable
interests $62,939 $32,023 $115,393 $63,317
=========== ============ =========== ============
Weighted average
shares outstanding:
Basic 37,480,751 37,500,000 37,491,820 37,500,000
Diluted 43,980,216 100,000,000 42,511,380 100,000,000
Net income per share
- income from
continuing
operations:
Basic $0.63 $0.32 $1.15 $0.63
Diluted $0.59 $0.32 $1.10 $0.63
Pro forma weighted
average shares
outstanding, assuming
full exchange of
exchangeable
interests:
Basic 99,579,199 100,000,000 99,600,419 100,000,000
Diluted 106,078,664 100,000,000 104,619,979 100,000,000
Pro forma net income
per share - income
from continuing
operations, assuming
full exchange of
exchangeable
interests:
Basic $0.63 $0.32 $1.16 $0.63
Diluted $0.60 $0.32 $1.11 $0.63
See Notes to Unaudited Condensed Consolidated Statements of Income
LAZARD LTD
UNAUDITED HISTORICAL CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Historical net income is reported as a historical partnership until
the IPO on May 10, 2005 and does not include payments for services
rendered by managing directors as compensation expense and a
provision for U.S. federal income taxes. In addition, historical net
income for periods prior to the IPO do not include a charge for the
minority interest in net income relating to the outstanding
exchangeable interests. Such payments, tax provisions and minority
interest in net income are included in subsequent periods. Therefore,
historical results for periods prior to the IPO on May 10, 2005 and
subsequent to the IPO are not comparable.
Three Months Ended Six Months Ended
Ended June 30, Ended June 30,
--------------------------- -----------------------
2006 2005 2006 2005
--------------- ----------- ----------- -----------
($ in thousands, except per share data)
Total revenue (a) $416,014 $336,398 $771,012 $606,405
LFB interest
expense (5,174) (6,267) (9,049) (10,745)
--------------- ----------- ----------- -----------
Operating
revenue 410,840 330,131 761,963 595,660
LAM GP related
revenue (2,722) - 2,537 -
Other interest
expense (21,210) (12,768) (41,334) (18,198)
--------------- ----------- ----------- -----------
Net revenue 386,908 317,363 723,166 577,462
Operating
expenses:
Compensation
and benefits 234,148 161,148 434,287 267,029
Premises and
occupancy
costs 17,545 17,477 34,136 33,860
Professional
fees 20,527 14,737 35,404 23,595
Travel and
entertainment 11,065 11,130 19,952 20,105
Other 18,930 23,151 36,578 44,884
--------------- ----------- ----------- -----------
Operating
expenses 302,215 227,643 560,357 389,473
--------------- ----------- ----------- -----------
Operating income
from continuing
operations 84,693 89,720 162,809 187,989
Provision for
income taxes 18,734 25,463 34,674 33,266
--------------- ----------- ----------- -----------
Income before
minority
interest in net
income 65,959 64,257 128,135 154,723
Minority interest
in net income
(excluding LAZ-
MD) (b) (2,722) 3,533 2,540 13,793
Minority interest
in net income
(LAZ-MD only) 45,136 22,813 82,364 22,813
--------------- ----------- ----------- -----------
Income from
continuing
operations 23,545 37,911 43,231 118,117
Loss from
discontinued
operations (net
of income taxes) - (10,318) - (17,168)
--------------- ----------- ----------- -----------
Net Income $23,545 $27,593 $43,231 $100,949
=============== =========== =========== ===========
Weighted average
shares
outstanding:
Basic 37,480,751 37,500,000 37,491,820 37,500,000
Diluted 43,980,216 100,000,000 42,511,380 100,000,000
Net income per
share from
continuing
operations:
Basic $0.63 0.30 $1.15 0.30
Diluted $0.59 0.30 $1.10 0.30
(a) Excluding LAM GP related revenue.
(b) Primarily includes (i) credits related to the consolidation of
LAM related GPs of $2,722 in the three months and charges of
$2,537 in the six months ended June 30 2006, respectively, (ii)
charges relating to our strategic alliance in Italy of $8,709 and
$4,352 in the three months and six months ended June 30, 2005,
respectively, and (iii) credits and charges for services rendered
by our managing directors and employee members of LAM including a
$5,453 credit in the three months and a $9,081 charge in the six
months ended June 30, 2005.
See Notes to Unaudited Condensed Consolidated Statements of Income
LAZARD LTD
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF INCOME
Three Month Period Ended June 30, 2006
--------------------------------------------
Pro Forma Pro Forma
Adjustment as Adjusted,
for Full After Full
Historical Exchange Exchange
----------- ----------- -------------
($ in thousands, except per share data)
Total revenue * $416,014 $- $416,014
LFB interest expense (5,174) - (5,174)
----------- ----------- -------------
Operating revenue 410,840 - 410,840
LAM GP related revenue (2,722)(a) - (2,722)
Other interest expense (21,210) - (21,210)
----------- ----------- -------------
Net revenue 386,908 - 386,908
Operating expenses:
Compensation and
benefits 234,148 - 234,148
Premises and occupancy
costs 17,545 - 17,545
Professional fees 20,527 - 20,527
Travel and
entertainment 11,065 - 11,065
Other 18,930 - 18,930
----------- ----------- -------------
Operating expenses 302,215 - 302,215
----------- ----------- -------------
Operating income from
continuing operations 84,693 - 84,693
Provision for income taxes 18,734 5,742 (k) 24,476
----------- ----------- -------------
Income before minority
interest in net income 65,959 (5,742) 60,217
Minority interest in net
income (excluding LAZ-MD) (2,722) - (2,722)
Minority interest in net
income (LAZ-MD only) 45,136 (45,136)(l) -
----------- ----------- -------------
Net income $23,545 $39,394 $62,939
=========== =========== =============
* Excluding LAM GP related revenue
Weighted average shares
outstanding:
Basic 37,480,751 (h) 99,579,199 (m)
Diluted 43,980,216 (i) 106,078,664 (n)
Net income per share:
Basic $0.63 (j) $0.63 (o)
Diluted $0.59 (j) $0.60 (o)
See Notes to Unaudited Condensed Consolidated Statements of Income
LAZARD LTD
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
Three Month Period Ended June 30, 2005
--------------------------------------------
Pro Forma
as
Adjusted,
Prior to
Pro Forma Full
Historical Adjustments Exchange
----------- ------------ ------------
($ in thousands, except per share data)
Total revenue $336,398 $- $336,398
LFB interest expense (6,267) - (6,267)
----------- ------------ ------------
Operating revenue 330,131 - 330,131
Other interest expense (12,768)(b) (7,022)(c) (19,790)
----------- ------------ ------------
Net revenue 317,363 (7,022) 310,341
Operating expenses:
Compensation and
benefits 161,148 28,678 (d) 189,826
Premises and occupancy
costs 17,477 - 17,477
Professional fees 14,737 (2,935)(e) 11,802
Travel and
entertainment 11,130 - 11,130
Other 23,151 - 23,151
----------- ------------ ------------
Operating expenses 227,643 25,743 253,386
----------- ------------ ------------
Operating income from
continuing operations 89,720 (32,765) 56,955
Provision for income taxes 25,463 (8,653)(f) 16,810
----------- ------------ ------------
Income before minority
interest in net income 64,257 (24,112) 40,145
Minority interest in net
income (excluding LAZ-MD) 3,533 5,453 (d) 8,986
Minority interest in net
income (LAZ-MD only) 22,813 (3,621)(g) 19,192
----------- ------------ ------------
Income from continuing
operations $37,911 ($25,944) $11,967
=========== ============ ============
Weighted average shares
outstanding:
Basic 37,500,000 (h)
Diluted 100,000,000 (i)
Net income per share:
Basic $0.32 (j)
Diluted $0.32 (j)
Three Month Period Ended
June 30, 2005
------------------------------
Pro Forma Pro Forma
Adjustment as
for Adjusted,
Full After Full
Exchange Exchange
----------- ------------
($ in thousands, except per
share data)
Total revenue $- $336,398
LFB interest expense - (6,267)
----------- ------------
Operating revenue - 330,131
Other interest expense - (19,790)
----------- ------------
Net revenue - 310,341
Operating expenses:
Compensation and benefits - 189,826
Premises and occupancy costs - 17,477
Professional fees - 11,802
Travel and entertainment - 11,130
Other - 23,151
----------- ------------
Operating expenses - 253,386
----------- ------------
Operating income from continuing
operations - 56,955
Provision for income taxes (864)(k) 15,946
----------- ------------
Income before minority interest in
net income 864 41,009
Minority interest in net income
(excluding LAZ-MD) - 8,986
Minority interest in net income (LAZ-
MD only) (19,192)(l) -
----------- ------------
Income from continuing operations $20,056 $32,023
=========== ============
Weighted average shares outstanding:
Basic 100,000,000 (m)
Diluted 100,000,000 (n)
Net income per share:
Basic $0.32 (o)
Diluted $0.32 (o)
See Notes to Unaudited Condensed Consolidated Statements of Income
LAZARD LTD
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF INCOME
Six Month Period Ended June 30, 2006
-------------------------------------------
Pro Forma Pro Forma
Adjustment as
for Adjusted,
Full After Full
Historical Exchange Exchange
----------- ----------- ------------
($ in thousands, except per share data)
Total revenue* $771,012 $- $771,012
LFB interest expense (9,049) - (9,049)
----------- ----------- ------------
Operating revenue 761,963 - 761,963
LAM GP related revenue 2,537 (a) - 2,537
Other interest expense (41,334) - (41,334)
----------- ----------- ------------
Net revenue 723,166 - 723,166
Operating expenses:
Compensation and
benefits 434,287 - 434,287
Premises and occupancy
costs 34,136 - 34,136
Professional fees 35,404 - 35,404
Travel and entertainment 19,952 - 19,952
Other 36,578 - 36,578
----------- ----------- ------------
Operating expenses 560,357 - 560,357
----------- ----------- ------------
Operating income from
continuing operations 162,809 - 162,809
Provision for income taxes 34,674 10,202 (k) 44,876
----------- ----------- ------------
Income before minority
interest in net income 128,135 (10,202) 117,933
Minority interest in net
income (excluding LAZ-MD) 2,540 - 2,540
Minority interest in net (l)
income (LAZ-MD only) 82,364 (82,364) -
----------- ----------- ------------
Net income $43,231 $72,162 $115,393
=========== =========== ============
* Excluding LAM GP related revenue
Weighted average shares
outstanding:
Basic 37,491,820 (h) 99,600,419 (m)
Diluted 42,511,380 (i) 104,619,979 (n)
Net income per share:
Basic $1.15 (j) $1.16 (o)
Diluted $1.10 (j) $1.11 (o)
See Notes to Unaudited Condensed Consolidated Statements of Income
LAZARD LTD
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
Six Month Period Ended June 30, 2005
-----------------------------------------
Pro Forma
as
Adjusted,
Prior to
Pro Forma Full
Historical Adjustments Exchange
----------- ------------ ------------
($ in thousands, except per share data)
Total revenue $606,405 $- $606,405
LFB interest expense (10,745) - (10,745)
----------- ------------ ------------
Operating revenue 595,660 - 595,660
Other interest expense (18,198)(b) (20,965)(c) (39,163)
----------- ------------ ------------
Net revenue 577,462 (20,965) 556,497
Operating expenses:
Compensation and (d)
benefits 267,029 75,476 342,505
Premises and occupancy
costs 33,860 - 33,860
Professional fees 23,595 (2,935)(e) 20,660
Travel and
entertainment 20,105 - 20,105
Other 44,884 - 44,884
----------- ------------ ------------
Operating expenses 389,473 72,541 462,014
----------- ------------ ------------
Operating income from
continuing operations 187,989 (93,506) 94,483
Provision for income taxes 33,266 (8,998)(f) 24,268
----------- ------------ ------------
Income before minority
interest in net income 154,723 (84,508) 70,215
Minority interest in net (d)
income (excluding LAZ-MD) 13,793 (9,081) 4,712
Minority interest in net (g)
income (LAZ-MD only) 22,813 18,987 41,800
----------- ------------ ------------
Income from continuing
operations $118,117 ($94,414) $23,703
=========== ============ ============
Weighted average shares
outstanding:
Basic 37,500,000 (h)
Diluted 100,000,000 (i)
Net income per share:
Basic $0.63 (j)
Diluted $0.63 (j)
See Notes to Unaudited Condensed Consolidated Statements of Income
Six Month Period Ended June
30, 2005
-----------------------------
Pro Forma Pro Forma
Adjustment as
for Adjusted,
Full After Full
Exchange Exchange
----------- ------------
($ in thousands, except per
share data)
Total revenue $- $606,405
LFB interest expense - (10,745)
----------- ------------
Operating revenue - 595,660
Other interest expense - (39,163)
----------- ------------
Net revenue - 556,497
Operating expenses:
Compensation and benefits - 342,505
Premises and occupancy costs - 33,860
Professional fees - 20,660
Travel and entertainment - 20,105
Other - 44,884
----------- ------------
Operating expenses - 462,014
----------- ------------
Operating income from continuing
operations - 94,483
Provision for income taxes 2,186 (k) 26,454
----------- ------------
Income before minority interest in net
income (2,186) 68,029
Minority interest in net income
(excluding LAZ-MD) - 4,712
Minority interest in net income (LAZ-
MD only) (41,800)(l) -
----------- ------------
Income from continuing operations $39,614 $63,317
=========== ============
Weighted average shares outstanding:
Basic 100,000,000 (m)
Diluted 100,000,000 (n)
Net income per share:
Basic $0.63 (o)
Diluted $0.63 (o)
See Notes to Unaudited Condensed Consolidated Statements of Income
LAZARD LTD
Notes to Unaudited 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) Interest expense includes credits of $10,000 and $8,000 for the
three and six month periods ended June 30, 2005, respectively,
which represents accrued dividends relating to Lazard Group's
mandatorily redeemable preferred stock which were cancelled in
connection with the redemption of membership interests of
historical partners.
(c) Reflects net incremental interest expense related to the May 2005
separation and recapitalization transactions, including the
financing transactions, the amortization of capitalized costs
associated with the financing transactions, and one-time IPO-
related costs.
(d) 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).
(e) Represents the exclusion of one-time IPO-related costs.
(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 the
Lazard Group common membership interests.
(h) For basic net income per share, the weighted average shares
outstanding represents primarily the 37,500,000 shares of Class A
common stock outstanding immediately following the equity public
offering less, for the three and six month periods ended June 30,
2006, the repurchase of 115,000 shares of Class A common stock
between June 13, 2006 and June 14, 2006.
(i) For diluted net income per share, the three and six month periods
ended June 30, 2006 includes, (i) incremental shares issuable
from non-vested stock unit awards, (ii) the Class A common stock
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, and (iii) the Class A common
stock issuable with respect to the convertible promissory note of
Lazard Group held by Banca Intesa S.p.A. The LAZ-MD Holdings
exchangeable interests on an as-if-exchanged basis have been
excluded, because, under the as-if-exchanged method of
accounting, such securities are not dilutive.
For diluted net income per share for the three and six month
periods ended June 30, 2005, the weighted average shares
outstanding includes LAZ-MD Holdings exchangeable interests on an
as-if-exchanged basis and excludes the Class A common stock
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 because, under the treasury
stock method of accounting, such securities are not dilutive.
(j) 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 (h) and (i) above.
(k) 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, 2005.
(l) 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, 2005.
(m) For basic net income per share, as if the LAZ-MD Holdings
exchangeable interests were fully exchanged as of January 1,
2005, the weighted average shares outstanding includes shares of
Class A Common Stock as referenced in note (h) above, LAZ-MD
Holdings' exchangeable interests which are exchangeable on a one-
for-one basis for Class A Common Stock less, for the three and
six month periods ended June 30, 2006, the impact of the
repurchase of interests in LAZ-MD Holdings on July 26, 2005.
(n) For diluted net income per share, as if the LAZ-MD Holdings
exchangeable interests were fully exchanged as of January 1,
2005, the weighted average shares outstanding includes shares of
Class A Common Stock as referenced in note (i) above, LAZ-MD
Holdings' exchangeable interests which are exchangeable on a one-
for-one basis for Class A Common Stock less, for the three and
six month periods ended June 30, 2006, the impact of the
repurchase of interests in LAZ-MD Holdings on July 26, 2005.
(o) 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 (m) and (n) above.
LAZARD LTD
UNAUDITED CONDENSED CONSOLIDATED
STATEMENT OF FINANCIAL CONDITION
AS OF JUNE 30, 2006
($ in thousands)
ASSETS
----------
Cash and cash equivalents $442,355
Cash and securities segregated for regulatory purposes 15,601
Securities owned - at fair value 405,050
Receivables 859,261
Other assets 387,251
---------------
Total assets $2,109,518
===============
LIABILITIES & STOCKHOLDERS' DEFICIENCY
----------------------------------------
Depositors and other customer payables $812,006
Accrued compensation and benefits 235,417
Other liabilities 475,485
Senior notes:
Underlying equity security units 437,500
Others 651,611
Subordinated loans 200,000
---------------
Total liabilities 2,812,019
Commitments and contingencies
Minority interest 42,584
STOCKHOLDERS' DEFICIENCY
Common stock:
Class A, par value $ .01 per share 375
Class B, par value $ .01 per share
Additional paid-in capital (818,536)
Accumulated other comprehensive income (loss), net of
tax (7,738)
Retained earnings 84,993
---------------
(740,906)
Less: Class A common stock held in treasury, at cost (4,179)
---------------
Total stockholders' deficiency (745,085)
---------------
Total liabilities and stockholders' deficiency $2,109,518
===============
LAZARD LTD
RECONCILIATION OF SHARES OUTSTANDING AND NET INCOME FOR BASIC &
DILUTED E.P.S.
BEFORE FULL EXCHANGE
------------------------
Three Month Period Ended
June 30, 2006
-------------------------------
Net
Weighted Income
Average Net Per
Shares Income Share
Outstanding (a) (a)
----------- -------- -------
($ in thousands, except per
share data)
Amounts as reported for basic
net income per share 37,480,751 $23,545 $0.63
=======
Amounts applicable to LAZ-MD
exchangeable interests:
Share of Lazard Group net income
Additional Corporate tax
Shares issuable
Equity security units 4,222,816 1,603(d)
Restricted stock units 917,479 330(d)
Convertible notes 1,359,170 666(e)
----------- --------
Amounts as reported for
diluted net income per share (f) 43,980,216 $26,144 $0.59
=========== ======== =======
Pro Forma
Three Month Period Ended
June 30, 2005
------------------------------
Net
Weighted Income
Average Net Per
Shares Income Share
Outstanding (a) (a)
----------- -------- -------
($ in thousands, except per
share data)
Amounts as reported for basic
net income per share 37,500,000 $11,967 $0.32
=======
Amounts applicable to LAZ-MD
exchangeable interests:
Share of Lazard Group net income 19,192(b)
Additional Corporate tax 864(c)
Shares issuable 62,500,000
Equity security units
Restricted stock units
Convertible notes
----------- --------
Amounts as reported for
diluted net income per share(f) 100,000,000 $32,023 $0.32
=========== ======== =======
Six Month Period Ended
June 30, 2006
---------------------------------
Net
Weighted Income
Average Net Per
Shares Income Share
Outstanding (a) (a)
----------- -------- -------
($ in thousands, except per
share data)
Amounts as reported for basic
net income per share 37,491,820 $43,231 $1.15
=======
Amounts applicable to LAZ-MD
exchangeable interests:
Share of Lazard Group net income
Additional Corporate tax
Shares issuable
Equity security units 3,612,945 2,562(d)
Restricted stock units 727,030 496(d)
Convertible notes 679,585 666(e)
----------- --------
Amounts as reported for
diluted net income per share (f) 42,511,380 $46,955 $1.10
=========== ======== ======
Pro Forma
Six Month Period Ended
June 30, 2005
-------------------------------
Net
Weighted Income
Average Net Per
Shares Income Share
Outstanding (a) (a)
----------- -------- -------
($ in thousands, except per
share data)
Amounts as reported for basic
net income per share 37,500,000 $23,703 $0.63
=======
Amounts applicable to LAZ-MD
exchangeable interests:
Share of Lazard Group net income 41,800 (b)
Additional Corporate tax (2,186)(c)
Shares issuable 62,500,000
Equity security units
Restricted stock units
Convertible notes ----------- --------
Amounts as reported for
diluted net income per share (f) 100,000,000 $63,317 $0.63
=========== ======== =======
(a) For the three and six month period ended June 30, 2005, net
income excludes loss from discontinued operations.
(b) Approximately 62.5% of the pro forma Lazard Group net income
of $30,708 and $66,881 for the three and six months ended June 30,
2005, respectively.
(c) Based on pro forma Lazard Group operating income of $57,045
and $94,573 for the three and six months ended June 30, 2005,
respectively.
(d) Change in Lazard Group net income allocable to Lazard Ltd
resulting from the assumed issuance of incremental shares.
(e) Change in Lazard Group net income allocable to Lazard Ltd of
$480 resulting from the assumed issuance of incremental shares and
a reduction of interest expense, net of taxes of $186 for the
three month and six month periods ended June 30, 2006,
respectively.
(f) The LAZ-MD exchangeable interests were antidilutive for the
three and six months ended June 30, 2006, consequently the effect
of their conversion to shares of Class A Common Stock has been
excluded from diluted earnings per share during such period. The
ESUs were antidilutive for the three month and six month periods
ended June 30, 2005.
LAZARD LTD
RECONCILIATION OF SHARES OUTSTANDING AND NET INCOME FOR BASIC &
DILUTED E.P.S.
ASSUMING PRO FORMA FULL EXCHANGE AS OF JANUARY 1, 2005
------------------------------------------------------
Three Month Period Ended
June 30, 2006
------------------------------------
Weighted
Average Net
Shares Net Income
Outstanding Income Per Share
------------- --------- ---------
($ in thousands, except per share data)
Amounts as reported for basic
net income per share 99,579,199 $62,939 $0.63
=========
Equity security units 4,222,816
Restricted stock units 917,479
Convertible notes 1,359,170 458 (b)
------------- ---------
Amounts as reported for
diluted net income per share (c) 106,078,664 $63,397 $0.60
============= ========= =========
Pro Forma
Three Month Period Ended
June 30, 2005
------------------------------------
Weighted Net
Average Income
Shares Net Per
Outstanding Income(a) Share(a)
------------- --------- ---------
($ in thousands, except per share data)
Amounts as reported for basic
net income per share 100,000,000 $32,023 $0.32
=========
Equity security units
Restricted stock units
Convertible notes
------------- ---------
Amounts as reported for
diluted net income per share (c) 100,000,000 $32,023 $0.32
============= ========= =========
Six Month Period Ended June 30, 2006
------------------------------------
Weighted
Average Net
Shares Net Income
Outstanding Income Per Share
------------- --------- ---------
($ in thousands, except per share data)
Amounts as reported for basic
net income per share 99,600,419 $115,393 $1.16
=========
Equity security units 3,612,945
Restricted stock units 727,030
Convertible notes 679,585 458 (b)
------------- ---------
Amounts as reported for
diluted net income per share (c) 104,619,979 $115,851 $1.11
============= ========= =========
Pro Forma
Six Month Period Ended June 30, 2005
------------------------------------
Weighted Net
Average Income
Shares Net Per
Outstanding Income(a) Share(a)
------------- --------- ---------
($ in thousands, except per share data)
Amounts as reported for basic
net income per share 100,000,000 $63,317 $0.63
=========
Equity security units
Restricted stock units
Convertible notes
------------- ---------
Amounts as reported for
diluted net income per share (c) 100,000,000 $63,317 $0.63
============= ========= =========
(a) For the three and six month period ended June 30, 2005, net income
excludes loss from discontinued operations.
(b) Reduction of interest expense, net of taxes related to the
issuance of the convertiblenotes.
(c) The ESUs were antidilutive for the three month and six month
periods ended June 30, 2005.
LAZARD LTD
ASSETS UNDER MANAGEMENT ("AUM")
As of
----------------------------------------------
June March December September June
30, 2006 31, 2006 31, 2005 30, 2005 30, 2005
--------- -------- -------- --------- --------
($ in millions)
Equities $76,591 $77,997 $70,896 $69,154 $66,077
Fixed Income 11,029 10,884 11,113 11,454 11,211
Alternative Investments 3,718 3,515 3,394 3,204 3,054
Merchant Banking 821 796 826 801 801
Cash 1,742 1,941 2,005 1,979 1,869
--------- -------- -------- --------- --------
Total AUM $93,901 $95,133 $88,234 $86,592 $83,012
========= ======== ======== ========= ========
Three Months Ended Six Months Ended
June 30, June 30,
------------------ -------------------
2006 2005 2006 2005
--------- -------- ---------- --------
($ in millions) ($ in millions)
AUM - Beginning of
Period $95,133 $86,257 $88,234 $86,435
Net Flows (1,573) (2,943) (710) (2,577)
Market Appreciation (212) 357 5,545 290
Foreign Currency
Adjustments 553 (659) 832 (1,136)
--------- -------- ---------- --------
AUM - End of Period $93,901 $83,012 $93,901 $83,012
========= ======== ========== ========
Average AUM * $94,517 $84,634 $92,423 $85,235
========= ======== ========== ========
* Average AUM is based on an average of quarterly ending balances for
the respective periods
LAZARD LTD
SCHEDULE OF PRO FORMA INCOME TAX PROVISION
ALLOCATION OF OPERATING INCOME
------------------------------
Three Months Six Months Ended
Ended June 30, Ended June 30,
------------------ ------------------
Pro Pro
Forma Forma
2006 2005 2006 2005
--------- -------- --------- --------
($ in thousands)
Operating income:
Lazard Group $85,042 $57,045 $163,292 $94,573
Lazard Ltd (349) (90) (483) (90)
--------- -------- --------- --------
Total $84,693 $56,955 $162,809 $94,483
========= ======== ========= ========
Operating income allocable to
Lazard Ltd:
Lazard Group (a) $32,009 $21,392 $61,466 $35,465
Lazard Ltd (100%) (349) (90) (483) (90)
--------- -------- --------- --------
Total $31,660 $21,302 $60,983 $35,375
========= ======== ========= ========
Operating income allocable to
LAZ-MD Holdings:
Lazard Group (b) $53,033 $35,653 $101,826 $59,108
========= ======== ==================
PRO FORMA INCOME TAX PROVISION PRIOR TO FULL EXCHANGE
-----------------------------------------------------
Three Months Six Months Ended
Ended June 30, Ended June 30,
------------------ ------------------
2006 2005 2006 2005
--------- -------- --------- --------
($ in thousands)
Lazard Ltd's entity level
taxes (c) $9,153 $5,965 $16,809 $9,905
Flow through provision for
Lazard Group income taxes
applicable to LAZ-MD Holdings'
ownership (b) - effective tax
rates of 18.1% and 30.4%* for
the three month periods ended
June 30, 2006 and 2005 and
17.5% and 24.3% for the six
month periods ended June 30,
2006 and 2005, respectively 9,581 10,845 17,865 14,363
--------- -------- --------- --------
Total pro forma provision for
income taxes $18,734 $16,810 $34,674 $24,268
========= ======== ========= ========
Lazard Ltd consolidated
effective tax rate 22.1% 29.5% 21.3% 25.7%
========= ======== ========= ========
* Effective tax rate of 30.4% for the three months ended June 30, 2005
is due to increasing the estimated pro forma Lazard Group tax rate for
2005 from 15% estimated at the end of March 2005 to 24.3% estimated at
the end of June 2005.
(a) Approximately 37.7% for the three and six months ended June 30,
2006 and 37.5% for the three and six months ended June 30, 2005,
respectively.
(b) Approximately 62.3% for the three and six months ended June 30,
2006 and 62.5% for the three and six months ended June 30, 2005,
respectively.
(c) Lazard Ltd entity level taxes of 28.0% of operating income for the
three and six months ended June 30, 2006 less Lazard Ltd's share
of LAM GP related revenues which were a net loss of $1,029 for the
three months and a gain of $951 for the six months ended June 30,
2006, respectively. Lazard Ltd entity level taxes of 28.0% of
operating income for the three and six months ended June 30, 2005.
No LAM GP related revenues for the three and six month periods
ended June 30, 2005.
|
|
Printer friendly
Cite/link
Email
Feedback
Reader Opinion