Please stand by, we're about to begin. Good morning and welcome to Lazard's Full Year and Fourth Quarter 2015 Earnings Conference Call. This call is being recorded. At this time, all participants are in a listen-only mode. Following the remarks, we will conduct a question-and-answer session. Instructions will be provided at that time. At this time, I'll now turn the call over to Judi Frost Mackey, Lazard's Director of Global Communications. Please go ahead.

Good morning and thank you for joining our conference call to review Lazard's results for the full year and fourth quarter of 2015. Hosting the call today are Kenneth Jacobs, Lazard's Chairman and Chief Executive Officer; and Matthieu Bucaille, Chief Financial Officer. A replay of this call will be available on the Lazard website beginning today by 10:00 AM Eastern Time. Today's call may contain forward-looking statements. These statements are based on our current expectations about future events and are subject to known and unknown risks, uncertainties and assumptions. These are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from those expressed or implied by the forward-looking statements. These factors include, but are not limited to, those discussed in Lazard's filings with the SEC, including our Annual Report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. Lazard assumes no responsibility for the accuracy or completeness of any of these forward-looking statements. Investors should not rely upon forward-looking statements as predictions of future events. Lazard is under no duty to update any of these forward-looking statements after the date on which they are made. Today's discussion may also include certain non-GAAP financial measures. A description of these non-GAAP financial measures and their reconciliation to the comparable GAAP measures are contained in our earnings release, which has been issued this morning. For today's call, we will focus on highlights of our performance. The details of our earnings can be found in our press release issued this morning and in our investor presentation, both of which are posted on our website at lazard.com. Following their remarks, Ken and Matthieu will be happy to answer your questions. I will now turn the call over to our Chairman and Chief…

Thank you, Ken. Lazard's 2015 diluted net income per share on an adjusted basis was $3.60, up 13% over 2014, and on a pre-tax basis up 9%. Full-year 2015 operating revenues of $2.38 billion increased 2% for the year on a reported basis and 8% on a constant currency basis. In the fourth quarter, operating revenue decreased 7% from last year's record quarter. Financial Advisory full year 2015 operating revenue increased 6%, driven primarily by M&A and Other Advisory which increased 9% for the year on a reported basis and 16% on a constant currency basis. This record annual level of Financial Advisory and M&A revenue were achieved despite a 5% decline in M&A operating revenue during the fourth quarter, which in part reflected a slowdown in announcements during the late summer. Asset Management full year 2015 operating revenue decreased 3% from 2014 primarily reflecting both lower management and incentive fees. Management fees decreased 2% for the year, reflecting the change in the mix of AUM and 3% sequentially from the third to the fourth quarter of 2016. Asset under management at year-end 2015 were $186 billion, up $3.8 billion from September 30th, reflecting quarterly market appreciation of $7.4 billion, partially offset by negative foreign exchange movements of $1.7 billion and net outflows of $1.9 billion. The quarterly outflows were driven primarily by one global strategy which we have discussed on previous calls. Excluding this strategy, asset management would have had fourth quarter net inflows of $1.4 billion. In 2015, we had broad based gross inflows of $41 billion close to our 2014 record, level and net inflows of $0.9 billion. For the full year, our emerging markets, equities and debt platforms had modest net outflows of $1.9 billion. As of January 29, 2016, AUM was approximately $179 billion, reflecting…

Thank you, Sir. We'll go first to Daniel Paris with Goldman Sachs. Daniel E. Paris - Goldman Sachs & Co.: Hey, good morning, guys. Obviously, a lot of focus on the Asset Management business in this type of market backdrop, so a couple from me on that. So it sounds like a lot of pressure on the flow side relates to the Global Thematic product. Can you give us a sense of the size at this point, and how quickly you think that might continue to outflow? Kenneth M. Jacobs - Chairman & Chief Executive Officer: Your supposition is right. A lot of the pressure is on the Global Thematics product. That has been the case for the last period of time, and I think we'll expect that to continue. We've done well just about everywhere else, so that's been the primary driver of the outflows.

And the size of the fund right now is approximately $8.5 billion. Daniel E. Paris - Goldman Sachs & Co.: Okay. That's helpful. Thank you. And obviously, a lot of investor attention on emerging market equities. Is there any – can you give us any color in terms of how much of your AUM in International and Global products are tied to EM, if we could think about it that way? And then maybe just bigger picture, how are you seeing institutional investors respond to the underperformance in EM? Are they putting more money to work, waiting to see what happens, or starting to kind of pull back? Kenneth M. Jacobs - Chairman & Chief Executive Officer: Okay. Let me get the bigger picture and then let Matthieu go through some of the detail. On the bigger picture, I think generally speaking, our emerging market franchises held up well in this environment. We've seen, over the course of last year, minimal outflows in the emerging market platform as a whole. I think it's a little less than $2 billion for the year. And then with regard to year-to-date, actually overall for Lazard we've seen inflows of about $700 million. With regard to institutions, we've seen some pull back in RFPs generally across the board for this year, which isn't a surprise given just the volatility in the markets. That's across-the-board for us. And obviously, there was a lot of damage done in the emerging markets given currency, given pull back in markets over the course of the last 24, 36 months or so. My guess is we've seen the pendulum swing pretty far. Perhaps it can go further, but a lot of the damage has been done already.

Right. And with respect to the side of our emerging market platforms, the equity emerging market platform at year-end was $36.2 billion, and the emerging market debt platform was $14.4 billion. Daniel E. Paris - Goldman Sachs & Co.: And is there any way to think about how much EM is in just kind of your broader global or international products? Kenneth M. Jacobs - Chairman & Chief Executive Officer: I think when you look at our global broader international products, you should think of them like most of the competitors and look at them. Daniel E. Paris - Goldman Sachs & Co.: Okay. Fair enough. Thanks guys.

And we'll go next to Brennan Hawken with UBS.

Good morning, guys. Kenneth M. Jacobs - Chairman & Chief Executive Officer: Good morning.

So hope that you could update us – and I know you gave some color in your prepared remarks, but maybe a bit more specifics on the current environment, how you see volatility in equity and credit markets impacting confidence among Boards and C-Suites and your clients. And also Europe, you have the chart on the European opportunity where you have the activities just getting to the market cap average. So are you implying that you think that there's going to be continued uplift on the European side? Kenneth M. Jacobs - Chairman & Chief Executive Officer: Okay. So I think what you're really getting at is sentiment or confidence, and then second part is what do we think about Europe for M&A activity going forward. On sentiment, there's no question that volatility tends to put a pause on activity in M&A for periods of time. And it's very highly volatile periods of time, people kind of tend to pause a little bit. We've seen that on many occasions post-crisis. And my guess is when we look back on this year, probably we'll see a little bit of pause because of this level of volatility assuming things calm down. Sentiments, in the end, is M&A for whatever reasons, better or worse, tends to be a pro cyclical type of event. People tend to do more M&A when they're feeling better about the environment going forward than the opposite. As long as CEOs, Boards stay constructive on the macro environment and you have this backdrop of disinflation and deflation, then we think that there should continue to be a pretty positive environment for M&A. But clearly, we need the period of volatility to diminish. With regard to Europe, generally speaking, Europe has lagged the U.S. in terms of activity and we've actually done very well ahead of that. Over the last several years or so, we've probably seen a pickup in our business greater than the market's picked up. And as you pointed out, there seems to be some lag also in terms of activity as a percent of market cap or GDP already are the factors that people use to analyze this, and that probably bodes well if volatility is reduced and people stay constructive on the macro environment for M&A activities continue to grow a bit in Europe.

Great. Thanks for that color. And then when we think about restructuring, I know you mentioned a lot of activity in your business there. How much of that was actually in revenue? I know that a lot of times with the restructuring, it's very back-end weighted, is a great deal of that still on the come? How active are your teams in restructuring? How big can this opportunity be in energy? Kenneth M. Jacobs - Chairman & Chief Executive Officer: Okay. So first, I think you're going to see the pickup in revenue and restructuring in 2016 wasn't much reflected in 2015, and it is concentrated in a couple of sectors. That's the oil and gas, commodities, natural resources arena. I don't think you're going to see the full restructuring cycle unless you start to see a turndown in the economy. Hopefully, what we're going to see is a constructive M&A environment with some pick up in restructuring, which would be kind of a nice combination for us.

Sure, without a doubt. Last one just capital allocation. How do you balance the special versus the buyback with the – particularly, given the valuation of Lazard shares? Thank you. Kenneth M. Jacobs - Chairman & Chief Executive Officer: Sure. So we've been pretty consistent about talking about this. This is a highly cash generative business, all our investments are expensed through the P&L in the form of compensation, especially when you look at the awarded. You can see it. And so when you're looking at net income, that's cash. And then the difference between our book tax rate and our cash tax rate, historically, has also allowed for additional cash as well into the business last year being the exception because of the lower statutory rates. But in any case, this business throws off an enormous amount of cash, and our goal is to return it as efficiently and as quickly to shareholders as we can. It also happens to be a business where you don't really know where you are exactly until the end of the year, given volatility. And so therefore, we tend to be a little bit conservative about delivering cash back to our shareholders until we know what we have, and then we want to do it as efficiently as possible. And so the special dividend turns out to be a very effective way to get cash back to shareholders quickly, and then they can make their own decisions as to what they want to do with that. That's something that we – it seems to be reasonably popular with our longer-term shareholders. In addition to that, we've been a steady purchaser of our shares. We have done that to, number one, offset any of the dilution associated with the share grants that are made in any given year. And we try to do it as close to the time that we issued the shares as possible so there's no discrepancy in terms of what we're issuing them at and what we're buying back the shares at, so that leads to buybacks. And then on top of that, we're opportunistic, and obviously, our share price where it is today is more attractive to buy the shares back opportunistically than a higher one.

Thanks for all of the color, Ken.

We'll go next to Devin Ryan with JMP Securities.

Hey. Thanks, good morning. Maybe first one here on just recruiting expectations. You had a nice year in 2015, head count was up. So as you're looking into 2016, how should we think about head count trends and related areas that you're looking to add producers? Kenneth M. Jacobs - Chairman & Chief Executive Officer: Okay. So look, one of the things we're very focused on is balance between growth and productivity. So I think we are highly disciplined about hiring and what we – we have a long experience with hiring at this place, and lateral hires, outside hires need to be considered very judiciously. That is, how many people are there in the outside world that will really work on the Lazard platform and really make a difference on this platform. We've done, I think, a very good job over a long period of time of promoting from within, both on the advisory side and the asset side. If you look at the leadership of the firm, you look at the senior producers of the firm, you look at the people that are coming up in the ranks, I think overwhelmingly you will see that most of them started or grew up here. And I think that's a real test of a firm over a long period of time and that's something that we're very focused on. That said, this environment may lend itself a little bit more than the last couple of years to opportunities outside, given the turmoil at some of the other firms. And we'll just keep an eye on that, but we're not dependent on it.

Got it. Okay. That's helpful. And then just with respect to the advisory business 2015, clearly characterized by just a lot of large deals, Lazard was involved in a number of them. Those are nice for the headlines but are a little bit lower-fee yielding. So do you feel like this dynamic is going to remain in place in 2016? And then more broadly, the middle markets business, how is that feeling right now? It doesn't seem like the recovery there has been as strong, but that might also suggest there's more room to go there as well. Kenneth M. Jacobs - Chairman & Chief Executive Officer: Well, look, the larger deals – not sure I'd agree with you on the lower-fee yielding. They tend to be very important to the franchise. They tend to be very helpful to us over the long run in terms of our ability to drive the franchise, and also from the standpoint of what it does to the operating revenue line as well. On middle market, yeah, I think there is – the middle market business overall not us but kind of call it the small-medium size deal or medium size deal market was not as robust. It's a larger market as a whole. That is, deals over $500 million and can grow as much as sort deals over $5 billion for the market as a whole, particularly in U.S. last year. There's probably some room for growth on that. But on the other hand, that market tends to be a little bit more sensitive to high-yield credit financing, so maybe balance there. I think in the end, the deal market, very hard to predict segment-by-segment. It really comes down to confidence levels and the other pieces I talked about valuation and financing availability.

Understood. Okay. Thanks. And then just lastly with respect to Asset Management. You guys aren't overly reliant on sovereign funds, but they have been a contributor, so would just love some color on what you're seeing from those clients right now and kind of drivers of net inflows or outflows. Thanks. Kenneth M. Jacobs - Chairman & Chief Executive Officer: Yeah. On the – yeah, look, we're not a big beneficiary of the big sovereign wealth funds and so we haven't felt as much of the pain as others have, I think, in terms of some of the outflows last year. And our traditional client base, sort of the big corporate, state, government pension funds globally, and it's a pretty stable universe. Obviously, the volatility in the markets is something everybody's watching carefully.

Got it. Okay. Thanks, guys. Kenneth M. Jacobs - Chairman & Chief Executive Officer: Thank you.

We go next to Joel Jeffrey with KBW. Joel Jeffrey - Keefe, Bruyette & Woods, Inc.: Hi, good morning, guys. Kenneth M. Jacobs - Chairman & Chief Executive Officer: Good morning.

How's it going? Joel Jeffrey - Keefe, Bruyette & Woods, Inc.: I appreciate some of the color you've given us on the AUM, particularly on the regional basis. But just wondering, given the fact that you do have a pretty big allocation of emerging markets, is it safe to assume that the majority of the strategies are focused on growth? And is there any way we can get a breakdown of growth versus value? Kenneth M. Jacobs - Chairman & Chief Executive Officer: Did you want to take this one?

Yeah. On the EM platform, it covers the whole spectrum. The largest strategies are actually value strategies. We have core, we have growth, we have multi-assets, we have small caps, so it's a pretty large platform. And the one other point I would like to sort of get across is our primary business is institutional. That's why we haven't sort of dealt with the flow that some of the retail funds have. And for institutions, this is a strategic allocation, runs in the tactical allocation. So what you're likely to see is as markets stabilize, more money come in than go out because people are underweights their strategic allocation at this point. Joel Jeffrey - Keefe, Bruyette & Woods, Inc.: Okay. But just in general, in terms of the equities portfolio, is there a way to categorize the percent that would be growth versus value?

It's mostly value. The baseline is relative value. I won't call it deep value, but relative value. Joel Jeffrey - Keefe, Bruyette & Woods, Inc.: Okay. And then as we think about the comp ratio going forward, is it still safe to think about sort of the early quarters of next year as being in line with last year's full year average? Kenneth M. Jacobs - Chairman & Chief Executive Officer: Yeah, I think that's the way we've approached it each year. We go into the next year thinking about it as how we ended the year for the beginning of the following year. That should continue. Joel Jeffrey - Keefe, Bruyette & Woods, Inc.: Thank you. Appreciate you taking my questions.

We'll go to Jim Mitchell with Buckingham Research.

Hey, good morning. Just a quick follow-up on the buyback. You did $173 million last year, you're up to $300 million in authorization over the next two years. But do you have the capacity or willingness you mentioned of being opportunistic to kind of accelerate that and – with your stock price here, or is it still kind of we have to wait and see where cash flow kind of ends up before getting more aggressive? Just trying to think through opportunity versus cash flow. Kenneth M. Jacobs - Chairman & Chief Executive Officer: Well, first part is we do share grants at the time – at or around the time of compensations, and we try to offset them pretty quickly so that it's going to – we can kind of prepared for that and have a point of view on that. So that's going to drive a fair amount of repurchase, earlier in the year is my guess. As to the remainder of the year, as the business evolves, we'll see the opportunity in the share price and we'll take a careful look at how the business is doing.

But – so in the first quarter, it's mostly focused on dilution offsetting, not trying to drive a net share count reduction? Kenneth M. Jacobs - Chairman & Chief Executive Officer: Yeah. I think that's a good way to think about it.

Okay. That's all I got. Thanks.

And our last question will come from Vincent Hung from Autonomous.

Hi good morning. Kenneth M. Jacobs - Chairman & Chief Executive Officer: Good morning.

Hello.

Can you talk a bit more about your restructuring capability. So how many MDs do you have there now versus how many you had in, let's say, 2009? And how much flexibility is there in moving the M&A back into the restructuring? Kenneth M. Jacobs - Chairman & Chief Executive Officer: So we never disclosed specifically, but I would say our capacity in M&A – our capacity in restructuring is not materially different from what it was in 2009. We have – I mean, I think what makes our franchise so special is the ability to really mix and match the best capabilities and industry groups with restructuring. And there's a very, very deep reservoir of restructuring talent in all of our strategic bankers here.

Great. Thanks a lot.

I'd like to turn the call back to our presenters for any additional or closing comments. Kenneth M. Jacobs - Chairman & Chief Executive Officer: Well, thank you. I guess that's it for this call.

Thank you very much.