Lazard (LAZ) risk factors, FY2024 10-K

Risks Related to Economic and Current Conditions Impacting Us and our Business

1. 01Consequences of geopolitical conditions, military conflicts, wars and acts of terrorism could adversely affect our business, financial condition and results of operations
2. 02Fluctuations in foreign currency exchange rates have in the past, and could again in the future, reduce our stockholders’ equity and net income or negatively impact the portfolios of our Asset Management clients and may affect the levels of our AUM
3. 03Our results of operations may be affected by fluctuations in the fair value of positions held in our investment portfolios
4. 04Our business, financial condition and results of operations could be materially adversely affected by pandemics
5. 05Our failure to deal appropriately with actual, potential or perceived conflicts of interest could damage our reputation and materially adversely affect our business

Risks Related to Our Business and Operations

1. 06Due 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
2. 07Our 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
3. 08If we are unable to successfully identify, hire and retain productive individuals, we may not be able to implement our growth strategy successfully
4. 09The financial services industry, and all of the businesses in which we operate, are intensely competitive
5. 10Competitive pressure could adversely affect our ability to attract new or retain existing clients, make successful investments, retain our people or maintain AUM, any of which would adversely affect our results of operations and financial condition
6. 11If the number of debt defaults, bankruptcies or other factors affecting demand for our Restructuring services declines, our Restructuring revenue would suffer
7. 12Certain of our services are dependent on the availability of private capital for deployment in illiquid asset classes
8. 13Potential underwriting or deal manager activities or advisory roles on capital raises or exchange transactions may expose us to risk
9. 14Our 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
10. 15We 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
11. 16Because many of our Asset Management clients can remove the assets we manage on short notice, we may experience unexpected declines in revenue and profitability
12. 17Our Asset Management business relies on non-affiliated third-party service providers
13. 18Certain 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
14. 19We may pursue new business lines, acquisitions, dispositions, reorganizations, joint ventures, cooperation agreements or other strategic alternatives that may result in additional risks and uncertainties in our business and could present unforeseen obstacles or costs
15. 20An 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
16. 21The soundness of third parties, including our clients, as well as financial, governmental and other institutions, could adversely affect us
17. 22We are subject to reputational risks that could harm our business
18. 23Our international operations are subject to certain risks, which may affect revenue
19. 24Other operational risks may disrupt our businesses, result in regulatory action against us or limit our growth
20. 25otherwise, could materially adversely affect our business. Although back-up systems are in place, our back-up procedures and capabilities in the event of a failure or interruption may not be adequate

Risks Related to Legal or Regulatory Factors and Taxation

1. 26Extensive 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
2. 27The 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
3. 28Expectations and regulations relating to ESG considerations expose us to potential liabilities, increased costs, reputational harm, and other adverse effects on our business
4. 29Employee 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
5. 30A 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
6. 31Failure to maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act could materially adversely affect our business
7. 32Changes in relevant tax laws or rates, changes in regulations, treaties or the interpretation of these items or changes in the jurisdictional mix of our earnings could negatively impact our effective tax rate
8. 33Tax authorities may challenge our tax computations and classifications, our transfer pricing methods and our application of related policies and methods
9. 34Anti-takeover provisions in our organizational documents and Delaware law could delay or prevent a change in control

Risks Relating to Our Capital Structure

1. 35Lazard, Inc. is a holding company and, accordingly, depends upon distributions from Lazard Group to pay dividends and taxes and other expenses
2. 36Lazard 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
3. 37SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS