Lazard Ltd Reports Full-Year and Fourth-Quarter 2008 Results

Business Wire, Feb 4, 2009

Highlights

* Financial Advisory operating revenue of $1.02 billion for the full year and $252.4 million for the fourth quarter of 2008 vs. $1.24 billion and $393.1 million for the respective 2007 periods

* M&A and Strategic Advisory operating revenue of $814.7 million for the full year and $192.7 million for the fourth quarter of 2008 vs. $969.4 million and $313.6 million for the respective 2007 periods

* Restructuring operating revenue of $119.3 million for the full year and $47.1 million for the fourth quarter of 2008 vs. $127.2 million and $32.3 million for the respective 2007 periods

* Asset Management operating revenue of $628.7 million for the full year and $125.4 million for the fourth quarter of 2008 vs. $717.3 million and $231.2 million for the respective 2007 periods

* Net income per share (diluted and excluding the third-quarter 2008, after-tax, LAM equity charge((a))) on a fully exchanged basis((b) )of $1.72 for the full year of 2008, excluding provisions during the third quarter for losses from counterparty defaults,((c) )or $1.65 including the provisions, vs. $2.77 per share for the full year of 2007

* Net income per share (diluted) on a fully exchanged basis of $0.50 for the fourth quarter of 2008 vs. $1.04 per share (diluted) for the 2007 fourth quarter

NEW YORK -- Lazard Ltd (NYSE: LAZ) today announced financial results for the full year and fourth quarter ended December 31, 2008. Net income on a fully exchanged basis, excluding the third-quarter 2008, after-tax, LAM equity charge(a), was $205.9 million or $1.72 per share (diluted), for the full year of 2008, excluding provisions during the third quarter for losses from counterparty defaults of $12.4 million ($9.5 million after-tax), or $0.07 per share (diluted), relating primarily to the bankruptcy filing of one of our prime brokers, compared to $322.7 million, or $2.77 per share (diluted), for the full year of 2007. Net income on a fully exchanged basis, was $196.4 million, or $1.65 per share (diluted), for the full year of 2008, excluding the third-quarter 2008, after-tax, LAM equity chargebut including the provisions during the third quarter of 2008 for losses from counterparty defaults.

Net income on a fully exchanged basis was $61.2 million, or $0.50 per share (diluted) for the fourth quarter of 2008, compared to $122.6 million for the 2007 fourth quarter, or $1.04 per share (diluted).

Lazard believes that results assuming full exchange of outstanding exchangeable interests provide the most meaningful basis for comparison among present, historical and future periods.

On a U.S. GAAP basis, which is before exchange of exchangeable interests and includes the third-quarter, after-tax, LAM equity charge and the provisions for counterparty defaults, net income was $3.1 million, or $0.06 per share (diluted) for the full year of 2008, compared to net income of $155.0 million or $2.79 per share (diluted) for the full year of 2007. The U.S. GAAP basis net income was $38.0 million, or $0.50 per share (diluted), for the fourth quarter of 2008, compared to net income of $59.1 million or $1.04 per share (diluted) for the fourth quarter of 2007.

Comments

"This environment is a time of opportunity for Lazard, although this has been a tumultuous year for investment banking," said Bruce Wasserstein, Chairman and Chief Executive Officer of Lazard. "I am pleased that Lazard performed well relative to the industry, due to our differentiated intellectual capital approach. In addition to our M&A activities, we have an increasingly important restructuring and capital structure advisory practice. The impact of market depreciation reduced assets under management but our Asset Management business had positive net inflows and offered many superior investment strategies for the year."

"Our strategy is to take the long view and focus on our client relationships as we have for over 160 years. We will reinforce our areas of strength, invest in areas of growth, develop new products, contain costs and maintain liquidity, in order to take advantage of future opportunities," said Mr. Wasserstein. "We intend to continue to hire key professionals on a selected basis and to redeploy Lazard employees into areas where we see potential for growth: restructuring, financial institutions advisory and other sectors, and selected areas in Asset Management. We also are continuing to broaden the products we offer clients in such areas as debt advisory and capital structure advisory."

"During the past year, new hires included a European-based Vice Chairman of Lazard International specializing in healthcare and global financial transactions; UK-based managing directors in the financial institutions group; a European managing director specializing in mining and metals; European debt advisory professionals in France, Germany and the UK; key hires in the U.S. in restructuring, the aerospace & defense sector and the Lazard Middle Market business; as well as the return of our global head of power, utilities and infrastructure," said Mr. Wasserstein.