Investor Presentaiton
Unaudited
Reconciliation of U.S. GAAP Net Revenue to Operating Revenue
($ in millions)
Net revenue U.S. GAAP Basis
Adjustments:
(Revenue) loss related to noncontrolling interests 1
(Gains) losses related to Lazard Fund Interests ("LFI") and other
similar arrangements
2
Interest Expense
3
Gain on repurchase of subordinated debt 4
MBA Lazard acquisition and Private Equity revenue adjustment
Distribution fees, reimbursable deal costs, bad debt expense and
other
6
Private Equity investment adjustment
8
Expenses associated with the business realignment
Losses associated with restructuring and closing of certain offices
9
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018 2019 2020
2021
Q3
9M
$1,301
$1,494 $1,918
$1,557 $1,531 $1,905 $1,830 $1,912 $1,985 $2,300 $2,354 $2,333 $2,644 $2,826 $2,587 $2,566
$717 $2,201
(2)
(5)
(5)
13
(7)
(16)
(17) (14) (15)
(15)
(16) (21) (16) (19) (23) (11)
(12)
(24)
3
(7)
(14)
(7)
4
(3) (23) 14
(32) (41)
1
(23)
59
82
102
105
94
90
86
80
78
62
50
48
50
54
75
75
19
56
(18)
13
(12)
(13)
133
(121)
(76)
(65)
(24)
(62)
12
4
0
24
Operating revenue
$1,358
$1,571
$2,015 $1,675 $1,618
$1,979
$1,884
$1,971
$2,034
$2,340 $2,380
$2,344
$2,655 $2,755 $2,546 $2,524
$702 $2,171
Operating Revenue is a non-GAAP measure which excludes:
1 Noncontrolling interests principally related to Edgewater and ESC Funds, and is a non-GAAP measure.
2 Changes in the fair value of investments held in connection with LFI and other similar deferred compensation arrangements for which a corresponding equal amount is excluded from compensation and benefits
expense.
3 Interest expense related to corporate financing activities because such expense is not considered to be a cost directly related to the revenue of our business. For year ended 2016, includes excess interest of $0.6
million due to the delay between the issuance of the 2027 notes and the settlement of the 2017 notes. For year ended 2015, includes excess interest expense of $2.7 million due to the delay between the issuance of
the 2025 senior notes and the settlement of the 2017 notes. For the year ended 2018, excess interest expense of $0.3 million due to the period of time between the issuance of 2028 notes and the settlement of 2020
notes. For the first quarter 2019, excess interest expense of $0.3 million due to the period of time between the issuance of the 2029 notes and the settlements of 2020 notes.
4 Gain related to the repurchase of the then outstanding subordinated promissory note due to the non-operating nature of such transaction.
5 For the year ended December 31, 2016, represents a gain relating to the Company's acquisition of MBA Lazard resulting from the increase in fair value of the Company's investment in the business. For the year
ended December 31, 2015, represents revenue relating to the Company's disposal of the Australian private equity business which was adjusted for the recognition of an obligation, which was previously recognized
for U.S. GAAP.
6 Represents certain distribution, introducer and management fees paid to third parties and reimbursable deal costs for which an equal amount is excluded from both non-GAAP operating revenue and non-
compensation expense, respectively, and excludes bad debt expense, which represents fees that are deemed uncollectible.
7 Represents write-down of private equity investment to potential transaction value.
8 Represents losses and expenses associated with the business realignment which includes employee reductions and closing of subscale office and investment strategies.
9 Represents losses related to the reclassification of currency translation adjustments to earnings from accumulated other comprehensive loss associated with restructuring and closing of certain of our offices.
LAZARD
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