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New words:
abate, affirmative, Alexandra, approach, benchmark, called, Chairman, commonly, conversion, Cooperation, court, cybersecurity, decade, decision, defense, disaggregated, East, enforceable, estate, EU, foster, full, fundraising, good, intermediary, interpretation, lowest, maker, maturity, mind, motivate, multinational, OECD, patience, Pillar, PIPR, prospective, prospectively, reconciliation, refinance, refinancing, repayment, retrospectively, sale, scope, secondary, short, showing, Soto, standard, tender, top, transparency, unchanged, upcoming, view
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acquired, add, affiliate, agreed, amortize, arose, ASC, assignment, awarded, canceled, Codification, conducting, confidentiality, contractually, decreasing, deduct, delivery, divided, dormant, earlier, earn, enter, entitled, exercisable, expired, forego, formula, hire, hold, inconsequential, involving, Latin, lending, linked, listed, loan, modified, necessarily, obligated, original, originally, outsourcing, participate, payout, PRPU, realize, reserve, restrictive, sought, space, specifically, sponsored, subsequently, subset, testing, thirteen, training, travel, underwriter, unfunded, unpaid, website
Financial report summary
?Competition
Credit Suisse • Citigroup • Goldman Sachs • Morgan Stanley • Invesco • Credit Suisse • Ubs • Credit Suisse • Greenhill & Co • Houlihan Lokey Inc - Ordinary SharesRisks
- Difficult market conditions can adversely affect our business in many ways, including by reducing the volume of transactions involving our Financial Advisory business and reducing the value or performance of the
- assets we manage in our Asset Management business, which, in each case, could materially reduce our revenue or income and adversely affect our financial position.
- Fluctuations in foreign currency exchange rates could reduce our members’ equity and net income or negatively impact the portfolios of our Asset Management clients and may affect the levels of our AUM.
- Our results of operations may be affected by fluctuations in the fair value of positions held in our investment portfolios.
- Our business, financial condition and results of operations could be materially adversely affected by pandemics.
- Due to the nature of our business, financial results could differ significantly from period to period, which may make it difficult for us to achieve steady earnings growth on a quarterly basis.
- Our ability to retain and attract managing directors and other key professional employees, including maintaining compensation levels at an appropriate level, is critical to the success of our business and failure to do so may materially adversely affect our results of operations and financial position.
- The financial services industry, and all of the businesses in which we compete, are intensely competitive.
- A substantial portion of our revenue is derived from Financial Advisory fees, which are not long-term contracted sources of revenue and are subject to intense competition, and declines in our Financial Advisory engagements could have a material adverse effect on our business, financial condition and results of operations.
- If the number of debt defaults, bankruptcies or other factors affecting demand for our Restructuring services declines, our Restructuring revenue could suffer.
- Certain of our services are dependent on the availability of private capital for deployment in illiquid asset classes.
- Potential underwriting or deal manager activities or advisory roles on capital raises or exchange transactions may expose us to risk.
- Our investment style in our Asset Management business, including the mix of asset classes and investment strategies comprising our AUM, may underperform or generate less demand than other investment approaches, which may result in significant client or asset departures or a reduction in AUM.
- We could lose clients and suffer a decline in our Asset Management revenue and earnings if the investments we choose in our Asset Management business perform poorly, regardless of overall trends in the prices of securities.
- Because many of our Asset Management clients can remove the assets we manage on short notice, we may experience unexpected declines in revenue and profitability.
- Access to clients through intermediaries and consultants is important to our Asset Management business, and reductions in referrals from such intermediaries or consultants or poor reviews of our products or our organization by such intermediaries or consultants could materially reduce our revenue and impair our ability to attract new clients.
- Our Asset Management business relies on non-affiliated third-party service providers.
- Certain of our investments are in relatively high-risk, illiquid assets, and we may lose some or all of the principal amount of these investments or fail to realize any profits from these investments for a considerable period of time.
- We may pursue new business lines, acquisitions, joint ventures, cooperation agreements or other growth or geographic expansion strategies that may result in additional risks and uncertainties in our business and could present unforeseen integration obstacles or costs.
- An inability to access the debt and equity capital markets as a result of our debt obligations, credit ratings or other factors could impair our liquidity, increase our borrowing costs or otherwise adversely affect our financial position or results of operations.
- The soundness of third parties, including our clients, as well as financial, governmental and other institutions, could adversely affect us.
- Other operational risks may disrupt our businesses, result in regulatory action against us or limit our growth.
- Extensive regulation of our businesses limits our activities and results in ongoing exposure to the potential for significant penalties, including fines or limitations on our ability to conduct our businesses.
- The financial services industry faces substantial litigation and regulatory risks, and we may face damage to our professional reputation and legal liability if our services are not regarded as satisfactory or if conflicts of interest should arise.
- Expectations relating to ESG considerations expose us to potential liabilities, increased costs, reputational harm, and other adverse effects on our business.
- Employee misconduct, which is difficult to detect and deter, could harm us by impairing our ability to attract and retain clients and subjecting us to significant legal liability and reputational harm.
- A failure in or breach of our information systems or infrastructure, or those of third parties with which we do business, including as a result of cybersecurity incidents or threats, could disrupt our businesses, lead to reputational harm and legal liability or otherwise impact our ability to operate our business.
- Failure to maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act could materially adversely affect our business.
- Uncertainty regarding the outcome of future arrangements between the European Union and the U. K. may adversely affect our business.
- Changes in relevant tax laws, regulations or treaties or an adverse interpretation of these items could negatively impact our effective tax rate.
- Tax authorities may challenge our tax computations and classifications, our transfer pricing methods and our application of related policies and methods.
- Risks Relating to Our Capital Structure
- Lazard Group is a holding company and therefore depends on its subsidiaries to make distributions to Lazard Group to enable it to service its obligations under its indebtedness.
Management Discussion
- The Company reported net income attributable to Lazard Group of $36 million, as compared to net loss attributable to Lazard Group of $14 million in the 2023 period.
- Net revenue increased $224 million, or 41%, with adjusted net revenue increasing $221 million, or 42%, as compared to the 2023 period. Fee revenue from investment banking and other advisory activities increased $177 million, or 64%, as compared to the 2023 period. Asset management fees, including incentive fees, increased $15 million, or 6%, as compared to the 2023 period. In the aggregate, interest income, other revenue and interest expense increased $32 million as compared to the 2023 period, the majority of which is recorded in the Corporate segment.
- Compensation and benefits expense increased $103 million, or 23%, as compared to the 2023 period.