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Lazard Ltd Reports Full-Year And Fourth-Quarter 2012 Results

Stocks in this article: LAZ

LAZARD LTD
SELECTED SUMMARY FINANCIAL INFORMATION (a)
(Non-GAAP - unaudited)
Three Months Ended   % Change From

 

December 31, 2012   September 30, 2012   December 31, 2011 September 30, 2012   December 31, 2011

($ in thousands, except per share data)

 
Revenues:
 
Financial Advisory
M&A and Other Advisory $233,517 $171,417 $167,099 36% 40%
Capital Raising 27,685 14,174 17,691 95% 56%
Strategic Advisory 261,202 185,591 184,790 41% 41%
Restructuring 48,095 34,382 75,704 40% (36%)
Total 309,297 219,973 260,494 41% 19%
 
Asset Management
Management fees 208,637 202,324 190,073 3% 10%
Incentive fees 26,755 10,606 5,373 NM NM
Other 9,815 7,397 8,960 33% 10%
Total 245,207 220,327 204,406 11% 20%
 
Corporate 19,143 2,911 3,807 NM NM
 
Operating revenue (b) $573,647 $443,211 $468,707 29% 22%
                   
Expenses:
 
Compensation and benefits expense (c) $341,766 $278,070 $337,007 23% 1%
Ratio of compensation to operating revenue 59.6% 62.7% 71.9%
 
Non-compensation expense (d) $114,908 $95,113 $108,674 21% 6%
Ratio of non-compensation to operating revenue 20.0% 21.5% 23.2%
                   
Earnings:
 
Earnings from operations (e) $116,973 $70,028 $23,026 67% NM
Operating margin (f) 20.4% 15.8% 4.9%
 
Net income (g) $81,627 $35,384 $1,431 NM NM
 
Diluted net income per share $0.61 $0.26 $0.01 NM NM
 
Diluted weighted average shares 133,855,611 135,380,036 135,721,618 (1%) (1%)
 
Effective tax rate (h) 15.1% 26.7% NM
 
This presentation includes non-U.S. GAAP ("non-GAAP") measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for the corresponding U.S. GAAP measures, and should be read only in conjunction with our consolidated financial statements prepared in accordance with U.S. GAAP. For a detailed explanation of the adjustments made to the corresponding U.S. GAAP measures, see Reconciliation of U.S. GAAP to Selected Summary Financial Information and Notes to Financial Schedules.

LAZARD LTD
SELECTED SUMMARY FINANCIAL INFORMATION (a)
(Non-GAAP - unaudited)
 
Year Ended December 31,
   
($ in thousands, except per share data) 2012 2011 % Change
 
Revenues:
 
Financial Advisory
M&A and Other Advisory $792,928 $700,539 13%
Capital Raising 73,403 93,888 (22%)
Strategic Advisory 866,331 794,427 9%
Restructuring 182,759 197,743 (8%)
Total 1,049,090 992,170 6%
 
Asset Management
Management fees 806,044 818,038 (1%)
Incentive fees 43,661 26,245 66%
Other 32,470 38,494 (16%)
Total 882,175 882,777 -
 
Corporate 39,551 8,922 NM
 
Operating revenue (b) $1,970,816 $1,883,869 5%
           
Expenses:
 
Compensation and benefits expense (c) $1,217,791 $1,168,229 4%
Ratio of compensation to operating revenue 61.8% 62.0%
 
Non-compensation expense (d) $421,023 $399,677 5%
Ratio of non-compensation to operating revenue 21.4% 21.2%
           
Earnings:
 
Earnings from operations (e) $332,002 $315,963 5%
Operating margin (f) 16.8% 16.8%
 
Net income (g) $194,907 $178,614 9%
 
Diluted net income per share $1.44 $1.31 10%
 
Diluted weighted average shares 135,116,690 137,629,525 (2%)
 
Effective tax rate (h) 21.3% 20.7%
 
This presentation includes non-U.S. GAAP ("non-GAAP") measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for the corresponding U.S. GAAP measures, and should be read only in conjunction with our consolidated financial statements prepared in accordance with U.S. GAAP. For a detailed explanation of the adjustments made to the corresponding U.S. GAAP measures, see Reconciliation of U.S. GAAP to Selected Summary Financial Information and Notes to Financial Schedules.

LAZARD LTD
COMPENSATION AND BENEFITS - ANALYSIS
(unaudited)
($ in millions except share price)
               
 
2006 2007 2008 2009 2010 2011 2012
                                   
ADJUSTED U.S. GAAP BASIS (c)
 
Base salary and benefits $397.8 $456.2 $467.7 $422.6 $452.9 $506.4 $515.8
Cash incentive compensation 470.6 562.1 224.7 404.6 472.8 372.4 367.2
Total cash compensation and benefits 868.4 1,018.3 692.4 827.2 925.7 878.8 883.0
Amortization of deferred incentive awards 23.0 104.8 238.3 333.4 240.5 289.4 334.8
Compensation and benefits - Adjusted U.S. GAAP basis (i) $891.4 $1,123.1 $930.7 $1,160.6 $1,166.2 $1,168.2 $1,217.8
 
% of Operating Revenue 56.7% 55.7% 55.6% 71.7% 58.9% 62.0% 61.8%
 
                                   
                                   
AWARDED BASIS
 
Total cash compensation and benefits (per above) $868.4 $1,018.3 $692.4 $827.2 $925.7 $878.8 $883.0
Deferred year-end incentive awards 203.9 336.7 351.7 239.3 292.7 282.4 272.4
Compensation and benefits - before special deferred
incentive awards 1,072.3 1,355.0 1,044.1 1,066.5 1,218.4 1,161.2 1,155.4
Sign-on and other special deferred incentive awards (j) 12.8 87.9 179.6 39.2 27.3 40.0 42.1
Year-end foreign exchange adjustment (k) 6.9 6.6 (9.7) 5.6 3.3 (4.6) 1.4
Total Compensation and benefits - Notional 1,092.0 1,449.5 1,214.0 1,111.3 1,249.0 1,196.6 1,198.9
Adjustment for actual/estimated forfeitures (l) (23.8) (35.2) (21.7) (17.1) (27.8) (28.0) (27.4)
Total Compensation and benefits - Awarded $1,068.2 $1,414.3 $1,192.3 $1,094.2 $1,221.2 $1,168.6 $1,171.5
 
% of Operating Revenue - Awarded Basis 68.0% 70.2% 71.2% 67.6% 61.7% 62.0% 59.4%
 
                                   
 
Memo:
Total value of deferred equity-based year end
incentive awards $198.9 $332.2 $202.3 $233.8 $261.4 $192.7 TBD
 
Equity-based year end awards - share equivalents ('000) 3,971 8,787 6,489 6,477 5,775 6,932 TBD
Price at issuance $50.08 $37.81 $31.17 $36.10 $45.26 $27.80 TBD
 
Deferred compensation awards ratio (m) 19.1% 23.8% 29.5% 21.9% 24.0% 24.2% 23.3%
 
Operating revenue $1,571.1 $2,014.8 $1,675.1 $1,617.6 $1,978.5 $1,883.9 $1,970.8
 
This presentation includes non-U.S. GAAP ("non-GAAP") measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable U.S. GAAP measures, and should be read only in conjunction with our consolidated financial statements prepared in accordance with U.S. GAAP. For a detailed explanation of the adjustments made to comparable U.S. GAAP measures, see Reconciliation of U.S. GAAP to Adjusted Statement of Operations and Notes to Financial Schedules.

LAZARD LTD
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(U.S. GAAP)
       
Three Months Ended % Change From
December 31, September 30, December 31, September 30, December 31,
($ in thousands, except per share data) 2012 2012 2011 2012 2011
 
Total revenue $580,857 $449,464 $473,109 29% 23%
Interest expense (20,164) (20,658) (21,331)
Net revenue 560,693 428,806 451,778 31% 24%
Operating expenses:
Compensation and benefits 445,602 283,818 338,934 57% 31%
 
Occupancy and equipment 32,854 25,680 30,668
Marketing and business development 25,888 19,096 29,577
Technology and information services 23,750 21,474 22,646
Professional services 12,859 8,514 13,929
Fund administration and outsourced services 12,090 13,179 12,016
Amortization of intangible assets related to acquisitions 2,187 2,494 7,019
Other 10,660 7,825 11,447
Subtotal 120,288 98,262 127,302 22% (6%)
Provision pursuant to tax receivable agreement - - 429
Operating expenses 565,890 382,080 466,665 48% 21%
 
Operating income (loss) (5,197) 46,726 (14,887) NM 65%
 
Provision (benefit) for income taxes (1,091) 13,053 (6,764) NM NM
Net income (loss) (4,106) 33,673 (8,123) NM 49%
Net income (loss) attributable to noncontrolling interests 1,259 372 (3,330)
Net income (loss) attributable to Lazard Ltd ($5,365) $33,301 ($4,793) NM (12%)
 
Attributable to Lazard Ltd Common Stockholders:
Weighted average shares outstanding:
Basic 114,747,744 115,603,351 119,369,997 (1%) (4%)
Diluted 114,747,744 135,380,036 119,369,997 (15%) (4%)
 
Net income (loss) per share:
Basic ($0.05) $0.29 ($0.04) NM (25%)
Diluted ($0.05) $0.26 ($0.04) NM (25%)

LAZARD LTD
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(U.S. GAAP)
     
Year Ended
December 31, December 31,
($ in thousands, except per share data) 2012 2011 % Change
 
Total revenue $1,994,013 $1,919,638 4%
Interest expense (81,565) (90,126)
Net revenue 1,912,448 1,829,512 5%
Operating expenses:
Compensation and benefits 1,351,129 1,168,945 16%
 
Occupancy and equipment 113,163 100,698
Marketing and business development 95,573 88,411
Technology and information services 86,892 83,212
Professional services 43,958 48,324
Fund administration and outsourced services 51,390 52,793
Amortization of intangible assets related to acquisitions 8,359 11,915
Other 38,099 39,286
Subtotal 437,434 424,639 3%
Provision pursuant to tax receivable agreement - 429
Operating expenses 1,788,563 1,594,013 12%
 
Operating income 123,885 235,499 (47%)
 
Provision for income taxes 31,100 44,940 (31%)
Net income 92,785 190,559 (51%)
Net income attributable to noncontrolling interests 8,476 15,642
Net income attributable to Lazard Ltd $84,309 $174,917 (52%)
 
Attributable to Lazard Ltd Common Stockholders:
Weighted average shares outstanding:
Basic 116,953,989 118,032,020 (1%)
Diluted 129,325,622 137,629,525 (6%)
 
Net income per share:
Basic $0.72 $1.48 (51%)
Diluted $0.65 $1.36 (52%)

LAZARD LTD
UNAUDITED CONDENSED CONSOLIDATED
STATEMENT OF FINANCIAL CONDITION
(U.S. GAAP)
 
December 31, December 31,
($ in thousands) 2012 2011
 

ASSETS

 
Cash and cash equivalents $850,190 $1,003,791
Deposits with banks 292,494 286,037
Cash deposited with clearing organizations and other segregated cash 65,232 75,506
Receivables 478,043 504,455
Investments 414,673 378,521
Goodwill and other intangible assets 392,822 393,099
Other assets 493,439 440,527
 
Total Assets $2,986,893 $3,081,936
 

LIABILITIES & STOCKHOLDERS' EQUITY

 
Liabilities
Deposits and other customer payables $269,763 $288,427
Accrued compensation and benefits 467,578 383,513
Senior debt 1,076,850 1,076,850
Other liabilities 521,162 466,290
Total liabilities 2,335,353 2,215,080
 
Commitments and contingencies
 
Stockholders' equity
Preferred stock, par value $.01 per share - -
Common stock, par value $.01 per share 1,282 1,230
Additional paid-in capital 846,050 659,013
Retained earnings 182,647 258,646
Accumulated other comprehensive loss, net of tax (110,541) (88,364)
919,438 830,525
Class A common stock held by subsidiaries, at cost (349,782) (104,382)
Total Lazard Ltd stockholders' equity 569,656 726,143
Noncontrolling interests 81,884 140,713
Total stockholders' equity 651,540 866,856
 
Total liabilities and stockholders' equity $2,986,893 $3,081,936

LAZARD LTD
ASSETS UNDER MANAGEMENT ("AUM")
(unaudited)
($ in millions)
       
As of Variance
December 31, September 30, December 31,
2012 2012 2011 Qtr to Qtr YTD
 
Equities $138,171 $132,231 $116,362 4.5% 18.7%
Fixed Income 22,718 21,905 17,750 3.7% 28.0%
Alternative Investments 4,600 4,753 5,349 (3.2%) (14.0%)
Private Equity 1,398 1,428 1,486 (2.1%) (5.9%)
Cash 173 94 92

84.0%

88.0%

Total AUM $167,060 $160,411 $141,039 4.1% 18.4%
 
 
 
Three Months Ended December 31, Year Ended December 31,
2012 2011 2012 2011
 
AUM - Beginning of Period $160,411 $135,812 $141,039 $155,337
 
Net Flows (47) (294) 2,741 (1,048)
Market and foreign exchange
appreciation (depreciation) 6,696 5,521 23,280 (13,250)
 
AUM - End of Period $167,060 $141,039 $167,060 $141,039
 
Average AUM $163,816 $140,136 $155,549 $152,072
 
% Change in average AUM 16.9% 2.3%
 
 
Note: Average AUM is generally based on an average of quarterly ending balances for the respective periods.

LAZARD LTD
RECONCILIATION OF U.S. GAAP TO SELECTED SUMMARY FINANCIAL INFORMATION (a)
(unaudited)
Three Months Ended Year Ended
December 31,   September 30,   December 31, December 31,   December 31,
($ in thousands, except per share data) 2012 2012 2011 2012 2011
 
Operating Revenue
Net revenue - U.S. GAAP Basis $560,693 $428,806 $451,778 $1,912,448 $1,829,512
 
Adjustments:
Gain on repurchase of subordinated debt - - - - (18,171)
Revenue related to noncontrolling interests (n) (3,963) (1,193) (2,351) (14,104) (16,696)
Loss (gain) related to Lazard Fund Interests ("LFI") and other similar arrangements (2,918) (4,728) (937) (7,557) 3,024
Interest expense 19,835 20,326 20,217 80,029 86,200
 
Operating revenue, as adjusted $573,647 $443,211 $468,707 $1,970,816 $1,883,869
 
Compensation & Benefits Expense
Compensation & benefits expense - U.S. GAAP Basis $445,602 $283,818 $338,934 $1,351,129 $1,168,945
 
Adjustments:
Charges pertaining to cost savings initiatives (Q4) (99,987) - - (99,987) -
Charges pertaining to staff reductions (Q1) - - - (21,754) -
(Charges) credits pertaining to LFI and other similar arrangements compensation liability (2,918) (4,728) (937) (7,557) 3,024
Compensation related to noncontrolling interests (n) (931) (1,020) (990) (4,040) (3,740)
 
Compensation & benefits expense, as adjusted $341,766 $278,070 $337,007 $1,217,791 $1,168,229
 
Non-Compensation Expense
Non-compensation expense - Subtotal - U.S. GAAP Basis $120,288 $98,262 $127,302 $437,434 $424,639
 
Adjustments:
Charges pertaining to cost savings initiatives (Q4) (2,589) - - (2,589) -
Charges pertaining to staff reductions (Q1) - - - (2,905) -
Write-off of Lazard Alternative Investment Holdings option prepayment - - (5,500) - (5,500)
Provision for onerous lease contract for UK facility - - (5,539) - (5,539)
Amortization of intangible assets related to acquisitions (2,187) (2,494) (7,019) (8,359) (11,915)
Non-compensation expense related to noncontrolling interests (n) (604) (655) (570) (2,558) (2,008)
 
Non-compensation expense, as adjusted $114,908 $95,113 $108,674 $421,023 $399,677
 
 
Earnings From Operations
Operating Income (loss) - U.S. GAAP Basis ($5,197) $46,726 ($14,887) $123,885 $235,499
 
Other adjustments:
Charges pertaining to cost savings initiatives (Q4) 102,576 - - 102,576 -
Charges pertaining to staff reductions (Q1) - - - 24,659 -
Gain on repurchase of subordinated debt - - - - (18,171)
Write-off of Lazard Alternative Investment Holdings option prepayment - - 5,500 - 5,500
Provision for onerous lease contract for UK facility - - 5,539 - 5,539
Revenue related to noncontrolling interests (n) (3,963) (1,193) (2,351) (14,104) (16,696)
Interest expense 19,835 20,326 20,217 80,029 86,200
Expenses related to noncontrolling interests (n) 1,535 1,675 1,560 6,598 5,748
Amortization of intangible assets related to acquisitions 2,187 2,494 7,019 8,359 11,915
Adjustment related to the provision pursuant to the tax receivable agreement ("TRA") - - 429 - 429
 
Earnings from operations, as adjusted $116,973 $70,028 $23,026 $332,002 $315,963
 
Net Income attributable to Lazard Ltd
Net income (loss) attributable to Lazard Ltd - U.S. GAAP Basis ($5,365) $33,301 ($4,793) $84,309 $174,917
Adjustments:
Charges pertaining to cost savings initiatives (Q4) 102,576 - - 102,576 -
Charges pertaining to staff reductions (Q1) - - - 24,659 -
Gain on repurchase of subordinated debt - - - - (18,171)
Write-off of Lazard Alternative Investment Holdings option prepayment - - 5,500 - 5,500
Provision for onerous lease contract for UK facility - - 5,539 - 5,539
Tax (benefits) allocated to adjustments (15,542) 140 (4,634) (21,108) -
Amount attributable to LAZ-MD Holdings (1,340) (49) (390) (2,449) 411
 
Adjustment for full exchange of exchangeable interests (o):
Tax adjustment for full exchange (200) 5 (190) (643) (1,135)
Amount attributable to LAZ-MD Holdings 1,498 1,987 399 7,563 11,553
 
Net income, as adjusted $81,627 $35,384 $1,431 $194,907 $178,614
 
Diluted net income (loss) per share:
U.S. GAAP Basis ($0.05) $0.26 ($0.04) $0.65 $1.36
Non-GAAP Basis, as adjusted $0.61 $0.26 $0.01 $1.44 $1.31
 
This presentation includes non-U.S. GAAP ("non-GAAP") measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable U.S. GAAP measures, and should be read only in conjunction with our consolidated financial statements prepared in accordance with U.S. GAAP. For a detailed explanation of the adjustments made to comparable U.S. GAAP measures, see Notes to Financial Schedules.

LAZARD LTD
           
Notes to Financial Schedules
 
(a) Selected Summary Financial Information are non-U.S. GAAP ("non-GAAP") measures. Lazard believes that presenting results and measures on an adjusted basis in conjunction with U.S. GAAP measures provides the most meaningful basis for comparison of its operating results across periods. (See Reconciliation of U.S. GAAP to Selected Summary Financial Information)
 
(b) A non-GAAP measure which excludes (i) gains/losses related to the changes in the fair value of investments held in connection with Lazard Fund Interests and other similar deferred compensation arrangements for which a corresponding equal amount is excluded from compensation & benefits expense, (ii) revenues related to non-controlling interests (see (n) below), (iii) interest expense primarily related to corporate financing activities, and (iv) for the twelve month period ended December 31, 2011, excludes the gain on repurchase of the Company's subordinated debt. (See Reconciliation of U.S. GAAP to Selected Summary Financial Information)
 
(c) A non-GAAP measure which excludes (i) charges/credits related to the changes in the fair value of the compensation liability recorded in connection with Lazard Fund Interests and other similar deferred compensation arrangements, (ii) compensation and benefits related to noncontrolling interests (see (n) below), (iii) for the three and twelve month periods ended December 31, 2012, charges pertaining to the implementation of cost-savings initiatives (see (g) below), and (iv) for the twelve month period ended December 31, 2012, certain first quarter charges pertaining to staff reductions (see (g) below). (See Reconciliation of U.S. GAAP to Selected Summary Financial Information)
 
(d) A non-GAAP measure which excludes (i) amortization of intangible assets related to acquisitions, (ii) expenses related to noncontrolling interests (see (n) below), (iii) for the three and twelve month periods ended December 31, 2012, charges pertaining to the implementation of cost-savings initiatives (see (g) below), and (iv) for the twelve month period ended December 31, 2012, certain first quarter charges pertaining to staff reductions (see (g) below). The three and twelve month periods for 2011 are also adjusted to exclude a provision for an onerous lease contract for the Company's leased facility in the U.K. and a charge related to the write-off of a partial prepayment of the Company's option to acquire the fund management activities of Lazard Alternative Investment Holdings. (See Reconciliation of U.S. GAAP to Selected Summary Financial Information)
 
(e) A non-GAAP measure which excludes (i) amortization of intangible assets related to acquisitions, (ii) interest expense primarily related to corporate financing activities, (iii) revenues and expenses related to noncontrolling interests (see (n) below), (iv) for the three and twelve month periods ended December 31, 2012, charges pertaining to the implementation of cost-savings initiatives (see (g) below), (v) for the twelve month period ended December 31, 2012, certain first quarter charges pertaining to staff reductions (see (g) below), (vi) for the twelve month period ended December 31, 2011, gain on repurchase of the Company's subordinated debt, (vii) for the three and twelve month periods for 2011 a provision for an onerous lease contract for the Company's leased facility in the U.K. and a charge related to the write-off of a partial prepayment of the Company's option to acquire the fund management activities of Lazard Alternative Investment Holdings, and (viii) for the three and twelve month periods ended December 31, 2011, a provision pursuant to the tax receivable agreement of $429. (See Reconciliation of U.S. GAAP to Selected Summary Financial Information)
 
(f) Represents earnings from operations as a percentage of operating revenue, and is a non-GAAP measure. (See Reconciliation of U.S. GAAP to Selected Summary Financial Information)
 
(g) A non-GAAP measure which is adjusted to reflect the full conversion of outstanding exchangeable interests held by members of LAZ-MD Holdings and excludes (i) for the three and twelve month periods ended December 31, 2012, charges pertaining to cost-savings initiatives including severance benefit payments, acceleration of unrecognized amortization of deferred incentive compensation previously granted to individuals terminated and other non-compensation related costs, net of applicable tax benefits, (ii) for the twelve month period ended December 31, 2012, certain first quarter charges pertaining to staff reductions including severance, benefit payments and acceleration of unrecognized amortization of deferred incentive compensation previously granted to individuals terminated, net of applicable tax benefits, (iii) for the twelve month period ended December 31, 2011, excludes gain on repurchase of the Company's subordinated debt, net of applicable tax, (iv) for the three and twelve month periods ended December 31, 2011, a provision for an onerous lease contract for the Company's leased facility in the U.K. and a charge related to the write-off of a partial prepayment of the Company's option to acquire the fund management activities of Lazard Alternative Investment Holdings. (See Reconciliation of U.S. GAAP to Selected Summary Financial Information)
 
(h) Effective tax rate is a non-GAAP measure which is computed based on a quotient, the numerator of which is the provision (benefit) for income taxes of $14,572, $12,908 and ($1,511) for the three month periods ended December 31, 2012, September 30, 2012 and December 31, 2011, respectively, and $52,772 and $46,504 for the twelve month periods ended December 31, 2012 and 2011, respectively, and the denominator of which is pre-tax income (loss) of $97,300, $46,726 and ($3,419) for the three month periods ended December 31, 2012, September 30, 2012 and December 31, 2011, respectively, and $251,041 and $228,796 for the twelve month periods ended December 31, 2012 and 2011, respectively, exclusive of net income (loss) attributable to noncontrolling interests of $1,101, ($1,566) and ($3,339) for the three month periods ended December 31, 2012, September 30, 2012 and December 31, 2011, respectively, and $3,362 and $3,678 for the twelve month periods ended December 31, 2012 and 2011, respectively.
 
(i) A reconciliation of U.S. GAAP compensation and benefits expense to compensation and benefits expense, as adjusted:
Year Ended December 31,
($ in thousands) 2006 2007 2008 2009 2010 2011 2012
 
Compensation & benefits expense - U.S. GAAP Basis $891,421 $1,123,068 $1,128,253 $1,309,240 $1,194,168 $1,168,945 $1,351,129
 
Adjustments:
Charges pertaining to cost savings initiatives (Q4) - - - - - - (99,987)
Charges pertaining to staff reductions (Q1) - - - - - - (21,754)
(Charges) credits pertaining to LFI and other similar arrangements comp. liability - - - - - 3,024 (7,557)
Acceleration of restricted stock unit vesting related to retirement policy change - - - - (24,860) - -
Acceleration of unamortized restricted stock units - - - (86,514) - - -
Acceleration of unamortized deferred cash awards - - - (60,512) - - -
LAM Equity Charge - - (197,550) - - - -
Compensation related to noncontrolling interests (n) - - - (1,657) (3,098) (3,740) (4,040)
 
Compensation & benefits expense, as adjusted $891,421 $1,123,068 $930,703 $1,160,557 $1,166,210 $1,168,229 $1,217,791
 
 
LAZARD LTD
Notes to Financial Schedules (continued)
 
(j) Special deferred incentive awards are granted outside the year end compensation process and include grants to new hires.
 
(k) Represents an adjustment to year end foreign exchange spot rate from full year average rate for year end incentive compensation awards.
 
(l) Under U.S. GAAP, an estimate is made for future forfeitures of the deferred portion of such awards. This estimate is based on both historical experience and future expectations. The result reflects the cost associated with awards that are expected to vest. This calculation is undertaken in order to present awarded compensation on a similar basis to GAAP compensation. Amounts for 2007-2009 represent actual forfeiture experience. The 2010-2012 amounts represent estimated forfeitures.
 
(m) Deferred compensation awards ratio is year end incentive awards excluding special incentive awards that are outside of the year-end compensation process such as sign-on and retention awards, divided by total awarded compensation.
 
(n) Noncontrolling interests include revenue and expenses principally related to Edgewater, and is a non-GAAP measure. (See Reconciliation of U.S. GAAP to Selected Summary Financial Information)
 
(o) Represents a reversal of noncontrolling interests related to LAZ-MD Holdings’ ownership of Lazard Group common membership interests and an adjustment for Lazard Ltd entity-level taxes to affect a full exchange of interests and excluding the adjustments noted in (g) above.
 
NM Not meaningful
 
TBD To be determined




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