Our goal remains to grow annual awarded compensation expense at a slower rate than revenue growth, and to achieve a compensation-to-revenue ratio over the cycle in the mid- to high-50s percentage range on both an awarded and adjusted GAAP basis 1 with discipline on deferrals.
For the second quarter of 2012, non-compensation expense 1 was $106 million, on an adjusted basis 1, essentially unchanged compared to the first quarter of 2012, and 6% higher than the second quarter of 2011. Non-compensation expense was primarily impacted by increases in occupancy costs. Non-compensation costs other than occupancy, in aggregate, were essentially unchanged in the second quarter of 2012 compared to the prior-year period. The ratio of non-compensation expense to operating revenue was 23% in the quarter, compared to 20% in the second quarter of 2011.
For the first half of 2012, non-compensation expense 1 was $211 million, on an adjusted basis 1, 10% higher than the first half of 2011. This excludes non-compensation expenses related to the 2012 first-quarter charge associated with staff reductions. The increase in non-compensation expense was primarily impacted by higher occupancy costs and deal-related third-party fees. The ratio of non-compensation expense to operating revenue was 22%, compared to 20% in the first half of 2011.TAXES The provision for taxes, on an adjusted basis 1, was $10 million for the second quarter and $25 million for the first half of 2012. The effective tax rate on the same basis was 22.9% for the second quarter and 24.5% for the first half of 2012, compared to 21.4% and 20.2% for the respective 2011 periods. CAPITAL MANAGEMENT AND BALANCE SHEET Our primary capital management goals include reducing excess cash, managing debt, and increasing returns to shareholders through dividends and share repurchases. As of July 26, 2012 (year to date), we have returned $243 million to Lazard shareholders primarily through payments of dividends and share repurchases.
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