Lazard Ltd Reports Third-Quarter and Nine-Month 2012 Results

  Lazard Ltd Reports Third-Quarter and Nine-Month 2012 Results

Business Wire

NEW YORK -- October 25, 2012

Lazard Ltd (NYSE: LAZ):

                                  Highlights

  *Net income per share, as adjusted^1, was $0.26 (diluted), for the quarter
    ended September 30, 2012, compared to $0.39 for the 2011 third quarter
  *Nine-month operating revenue of $1,397 million, 1% below record prior-year
    period; third-quarter operating revenue of $443 million, down 5% from
    prior-year period
  *Financial Advisory nine-month operating revenue of $740 million, up 1%
    from prior-year period; M&A and Strategic Advisory nine-month operating
    revenue up 5% while completed transactions in the global M&A market
    declined 26%^2. Financial Advisory third-quarter operating revenue down
    13% from prior-year period
  *Asset Management third-quarter operating revenue of $220 million, up 7%
    from second quarter of 2012, and up 2% from prior-year period
  *Assets under management (AUM) of $160 billion, up 8% from June 30, 2012
    and up 18% from September 30, 2011; average AUM of $157 billion in the
    third quarter of 2012
  *Net inflows of $1.8 billion in the third quarter of 2012
  *Return of capital to shareholders totaling $432 million^3 year to date,
    including $200 million in surplus cash^4 one year ahead of target
  *Cost saving initiatives to result in approximately $125 million in annual
    savings from our existing expense base. Implementation expenses of $110
    million to $130 million, expected to be incurred primarily in the fourth
    quarter of 2012


($ in millions, except
                        Quarter Ended             Nine Months Ended
per share data and       September 30,              September 30,
AUM)
                         2012   2011   %’12-’11   2012    2011    %’12-’11
As Adjusted^1
Operating revenue        $443    $467    (5)%       $1,397   $1,415   (1)%
Financial Advisory       $220    $254    (13)%      $740     $732     1%
Asset Management         $220    $217    2%         $637     $678     (6)%
Net income               $35     $53     (33)%      $113     $177     (36)%
Diluted net income per   $0.26   $0.39   (33)%      $0.84    $1.30    (35)%
share
                                                                      
U.S. GAAP
Net income               $33     $63     (47)%      $90      $180     (50)%
Diluted net income per   $0.26   $0.49   (47)%      $0.70    $1.39    (50)%
share
                                                                      
Supplemental Data
Quarter-end AUM  ($ in   $160    $136    18%
billions)
Average AUM  ($ in      $157   $149   5%        $153    $153    0%
billions)

Lazard Ltd (NYSE: LAZ) today reported operating revenue^1 of $443 million for
the quarter ended September 30, 2012. Net income, as adjusted^1, was $35
million, or $0.26 per share (diluted).

First nine-month 2012 operating revenue^1 was $1,397 million. Net income, as
adjusted^1, was $113 million, or $0.84 per share (diluted).

Third-quarter 2012 net income on a U.S. GAAP basis was $33 million, or $0.26
per share (diluted). First nine-month 2012 net income on a U.S. GAAP basis was
$90 million, or $0.70 per share (diluted). A reconciliation of our U.S. GAAP
results to the adjusted results is presented on page 18 of this press release.

“Clients value Lazard’s independent advice, global reach and innovative
solutions,” said Kenneth M. Jacobs, Chairman and Chief Executive Officer of
Lazard. “In Financial Advisory, our mergers and acquisitions revenue is up for
the year in a period of reduced market activity. In Asset Management, our
globally diversified mix of clients and investment platforms is a powerful
contributor to growth.”

“We are focused on revenue growth, cost discipline and effective use of
capital to build shareholder value,” said Mr. Jacobs. “The firm is better
positioned than it has ever been and we are freeing up resources so we can
reach our targets, retain and attract the best people, and make investments
for long-term growth.”

“We are making progress toward our operating margin target of 25% in 2014,”
said Matthieu Bucaille, Chief Financial Officer of Lazard. “We have achieved
our goal of returning $200 million in excess cash to shareholders earlier than
our year-end 2013 target.”

“We are implementing cost saving initiatives to reduce the firm’s expense base
and enhance our operating leverage. These include streamlining our support
functions and eliminating investments in areas of low return. We expect these
initiatives to result in approximately $125 million in annual savings from our
existing cost base, with related implementation expenses primarily in the
fourth quarter of this year,” said Mr. Bucaille. “We believe these initiatives
will improve profitability with minimal impact on Lazard’s revenue growth.”

OPERATING REVENUE

Financial Advisory

In the text portion of this press release, we present our Financial Advisory
results as Strategic Advisory and Restructuring. Strategic Advisory includes
M&A, Sovereign and Government Advisory, Capital Markets, Lazard Middle Market,
Private Funds and Other Advisory businesses.

Third Quarter

Financial Advisory operating revenue was $220 million, 13% lower than the
third quarter of 2011, reflective of lower market activity levels.

Strategic Advisory operating revenue was $186 million, 14% lower than the
third quarter of 2011, primarily due to fewer closings of large transactions.

Restructuring operating revenue was $34 million, 10% lower than the third
quarter of 2011, in line with the low level of corporate restructuring
activity.

During the quarter, we remained engaged in highly visible, complex M&A
transactions and other advisory assignments, including cross-border
transactions, spin-offs, distressed asset sales, and government advisory in
the Americas, Europe and Asia.

Lazard is advising on four of the ten largest global M&A transactions
announced year-to-date (clients are in italics): Deutsche Telekom on the $32.8
billion combination of T-Mobile and MetroPCS; Anheuser-Busch InBev’s $20.1
billion acquisition of the remaining stake in Grupo Modelo it does not already
own; Walgreens’ $6.7 billion acquisition of a 45% stake in Alliance Boots; and
Qatar Holding on its stake in Xstrata in connection with the proposed merger
with Glencore.

Among the major M&A transactions or assignments that were completed during the
third quarter of 2012 were the following: Progress Energy in its $32 billion
merger with Duke Energy; the combination of Tyco’s Flow Control business with
Pentair in a $10 billion all-stock merger; and GlaxoSmithKline’s $3.0 billion
acquisition of Human Genome Sciences.

Our Sovereign and Government Advisory businesses are active in worldwide
assignments, particularly in Europe and Africa.

We are involved in many of the most notable recent restructurings, such as
Financial Guaranty Insurance Company (FGIC) as  advisor to Weil, Gotshal &
Manges in its capacity as counsel to the New York Liquidation Bureau; Cemex in
connection with its refinancing; and TORM, as advisor to the senior lenders on
the company's debt restructuring.

Please see a more complete list of Strategic Advisory transactions that were
completed in the third quarter of 2012, as well as Restructuring assignments,
on pages 9 - 10 of this release.

First Nine Months

Financial Advisory operating revenue was $740 million, 1% higher than the
first nine months of 2011.

Strategic Advisory operating revenue was $605 million, 1% lower than the first
nine months of 2011. This included a 5% increase in M&A revenue compared to
the prior-year period.

Restructuring operating revenue was $135 million, 10% higher than the first
nine months of 2011, reflecting the closings of several large assignments,
primarily during the first quarter of 2012.

Asset Management

Third Quarter

Asset Management operating revenue was $220 million in the third quarter of
2012, 7% higher than the second quarter of 2012 and 2% higher than the third
quarter of 2011. Net inflows were $1.8 billion in the third quarter.

Management fees during the period totaled $202 million, reflecting a 4%
increase compared to the second quarter of 2012 and a 1% increase compared to
the prior-year period. The sequential increase was driven primarily by growth
in assets under management (AUM).

Incentive fees during the period totaled $11 million, a $7 million increase
from the second quarter of 2012 and a 13% increase compared to the prior-year
period.

AUM was $160 billion as of September 30, 2012. AUM was up 8% from June 30,
2012, primarily reflecting market appreciation, foreign exchange adjustments
and net inflows. Average AUM in the third quarter was $157 billion.

We are winning significant new mandates in all our major platforms from
clients around the world. A sample of these new mandates is reflected in our
investor presentation on our website. In the third quarter, Lazard Asset
Management continued to expand its global footprint with the opening of an
office in Zurich.

First Nine Months

Asset Management operating revenue was $637 million in the first nine months
of 2012, 6% lower than the first nine months of 2011.

Management fees were $597 million in the first nine months of 2012, 5% lower
than the first nine months of 2011, primarily reflecting a shift in product
mix. Average AUM for the first nine months of 2012 was $153 billion, unchanged
compared to the first nine months of 2011. Net inflows were $3 billion for the
first nine months of 2012.

OPERATING EXPENSES

Compensation and Benefits

In managing compensation and benefits expense, we focus on annual awarded
compensation (cash compensation and benefits plus deferred incentive
compensation with respect to the applicable year, net of estimated future
forfeitures). We believe annual awarded compensation reflects the actual
annual compensation cost more accurately than the GAAP measure of compensation
cost, which measures applicable-year cash compensation and the amortization of
deferred incentive compensation principally attributable to previous years’
deferrals. We believe that by managing our business using awarded compensation
with a consistent deferral policy, we can better manage our compensation
costs, increase our flexibility in the future and build shareholder value over
time.

For the third quarter of 2012, adjusted compensation and benefits expense^1,
including related accruals, was $278 million. The corresponding adjusted GAAP
compensation ratio was 62.7% for the quarter, compared to 62.0% for the
full-year 2011, and 59.3% during the third quarter in 2011.

For the first nine months of 2012, adjusted compensation and benefits
expense^1, including related accruals, was $876 million. This excludes the
2012 first-quarter charge related to staff reductions. The corresponding
adjusted GAAP compensation ratio was 62.7%, compared to 62.0% for the
full-year 2011, and 58.7% for the first nine months of 2011.

Adjusted GAAP compensation ratios include, among other items, amortization
expense related to 2008 deferred compensation, which had a comparatively
longer, four-year vesting period. For the first nine months of 2012, we
expensed approximately $32 million related to the 2008 grants, or 2.3% of
first-nine-month 2012 operating revenue.

As of September 30, the amortization expense for the full year of 2012 is
expected to be approximately $339 million versus $289 million for the full
year of 2011.

The third-quarter 2012 adjusted GAAP compensation ratio assumes, based on
current market conditions, that the full-year awarded compensation ratio will
be approximately 60%, compared to 62% for the full year of 2011.

Our goal remains to grow annual awarded compensation expense at a slower rate
than revenue growth, and to achieve a compensation-to-revenue ratio over the
cycle in the mid- to high-50s percentage range on both an awarded and adjusted
GAAP basis^1, with discipline on deferrals.

Non-Compensation Expense

For the third quarter of 2012, non-compensation expense was $95 million, on an
adjusted basis^1, 4% lower than the third quarter of 2011. The reduction in
non-compensation expense was primarily driven by lower professional fees, as
well as lower business development expenses, when compared to the prior-year
period. The ratio of non-compensation expense to operating revenue was 21.5%
in the quarter, compared to 21.1% in the third quarter of 2011

For the first nine months of 2012, non-compensation expense was $306 million,
on an adjusted basis^1, 5% higher than the first nine months of 2011. The
increase in non-compensation expense was primarily due to higher occupancy
costs and deal-related third-party fees partially offset by lower professional
fees. The ratio of non-compensation expense to operating revenue was 21.9%,
compared to 20.6% for the first nine months of 2011.

Our goal remains to achieve a non-compensation expense-to-revenue ratio over
the cycle of 16% to 20%.

TAXES

The provision for taxes, on an adjusted basis^1, was $13 million for the third
quarter and $38 million for the first nine months of 2012. The effective tax
rate on such adjusted basis was 26.7% for the third quarter and 25.2% for the
first nine months of 2012, compared to 23.8% and 21.3% for the respective 2011
periods.

CAPITAL MANAGEMENT AND BALANCE SHEET

Our primary capital management goals include reducing excess cash, managing
debt, and increasing returns to shareholders through dividends and share
repurchases.

Lazard has returned $432 million^3 to shareholders, year to date. This
includes returning $200 million of surplus cash^4 to shareholders in advance
of our year-end 2013 target.

We have paid $70 million to our shareholders for dividends declared in
January, April and July; have repurchased, as of October 24, 2012, 11.6
million shares of our Class A common stock for $321 million, at an average
price of $27.61 per share; and have satisfied employee tax obligations of $41
million in cash in lieu of share issuance upon vesting of equity grants. As
announced earlier, approximately 4.5 million of these shares, repurchased at a
cost of $120 million, served to directly offset the potential dilution from
our 2011 year-end equity-based compensation awards, net of estimated
forfeitures and tax withholding to be paid in cash by the Company in lieu of
share issuances.

On October 24, 2012, Lazard declared a quarterly dividend of $0.20 per share
on its outstanding Class A common stock.

On October 24, 2012, Lazard’s Board of Directors authorized an additional
share repurchase of up to $200 million, which expires December 31, 2014, and
brings the share repurchase authorization as of October 24, 2012 to $217
million.

Lazard’s financial position remains strong and low risk with approximately
$833 million in cash and cash equivalents at September 30, 2012, the majority
of which is invested in U.S. Government and agency money market funds. As of
September 30, 2012, total stockholders’ equity related to Lazard’s interests
is $714 million.

COST SAVING INITIATIVES

In Lazard’s Shareholder Letter released in April this year, the firm set
financial targets, including an operating margin (based on GAAP and awarded
compensation) of at least 25% in 2014 at current activity levels. We stated
that to achieve this goal we would take measures to reduce the firm’s expense
base, and that these measures would result in implementation expenses.

Lazard’s senior leadership has taken a collective view of the firm’s strategy
that includes investments for long-term growth, as well as legacy costs that
can be eliminated. Cost saving initiatives will address: streamlining
corporate structure and consolidating support functions; realigning the firm’s
investments into areas with potential for the greatest long-term return; and
creating greater flexibility to retain and attract the best people and invest
in new growth areas. We expect these initiatives to result in improved
profitability with minimal impact on Lazard’s revenue growth.

Our objective is for the majority of these initiatives to be completed during
the fourth quarter of 2012, and to result in approximately $125 million in
annual savings from our existing cost base. We anticipate at least two-thirds
of these savings will be realized in 2013, with the full impact realized in
2014. Approximately $85 million relates to compensation expenses associated
with reduced staffing, and approximately $40 million to non-compensation
expense. Associated implementation expenses are estimated to range between
$110 million and $130 million and to be primarily compensation-related. A
significant majority of these expenses should occur in the fourth quarter of
2012 and the remainder in the first half of 2013. Approximately 75% of the
implementation expenses are expected to be paid in cash.

                                     ***

CONFERENCE CALL

Lazard will host a conference call at 8:00 a.m. EDT on Thursday, October 25,
2012, to discuss the company’s financial results for the third quarter and
first nine months of 2012. The conference call can be accessed via a live
audio webcast available through Lazard’s Investor Relations website at
www.lazard.com, or by dialing 1 (877) 419-6593 (U.S. and Canada) or +1 (719)
325-4752 (outside of the U.S. and Canada), 15 minutes prior to the start of
the call.

A replay of the conference call will be available beginning October 25, 2012,
at 11:00 a.m. EDT, through November 8, 2012, via the Lazard Investor Relations
website, or by dialing 1 (888) 203-1112 (U.S. and Canada) or +1 (719) 457-0820
(outside of the U.S. and Canada). The replay access code is 8019543.

ABOUT LAZARD

Lazard, one of the world's preeminent financial advisory and asset management
firms, operates from 42 cities across 27 countries in North America, Europe,
Asia, Australia, Central and South America. With origins dating back to 1848,
the firm provides advice on mergers and acquisitions, strategic matters,
restructuring and capital structure, capital raising and corporate finance, as
well as asset management services to corporations, partnerships, institutions,
governments and individuals. For more information on Lazard, please visit
www.lazard.com.

                                     ***

Cautionary Note Regarding Forward-Looking Statements

This press release contains “forward-looking statements.” In some cases, you
can identify these statements by forward-looking words such as “may”, “might”,
“will”, “should”, “expect”, “plan”, “anticipate”, “believe”, “estimate”,
“predict”, “potential” or “continue”, and the negative of these terms and
other comparable terminology. These forward-looking statements are not
historical facts but instead represent only our belief regarding future
results, many of which, by their nature, are inherently uncertain and outside
of our control. Although we believe the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee the accuracy of
our estimated targets, future results, level of activity, performance or
achievements. There are important factors that could cause our actual results,
level of activity, performance or achievements to differ materially from the
results, level of activity, performance or achievements expressed or implied
by these forward-looking statements.

These factors include, but are not limited to, those discussed in our Annual
Report on Form 10-K under Item 1A “Risk Factors,” and also disclosed from time
to time in our reports on Forms 10-Q and 8-K including the following:

  *A decline in general economic conditions or the global financial markets;
  *Losses caused by financial or other problems experienced by third parties;
  *Losses due to unidentified or unanticipated risks;
  *A lack of liquidity, i.e., ready access to funds, for use in our
    businesses; and
  *Competitive pressure.

Lazard Ltd is committed to providing timely and accurate information to the
investing public, consistent with our legal and regulatory obligations. To
that end, Lazard and its operating companies use their websites to convey
information about their businesses, including the anticipated release of
quarterly financial results, quarterly financial, statistical and
business-related information, and the posting of updates of assets under
management in various hedge funds and mutual funds and other investment
products managed by Lazard Asset Management LLC and its subsidiaries. Monthly
updates of these funds will be posted to the Lazard Asset Management website
(www.lazardnet.com) on the third business day following the end of each month.
Investors can link to Lazard and its operating company websites through
www.lazard.com.

                                     ***

                   LlSTS OF FINANCIAL ADVISORY ASSIGNMENTS

Mergers and Acquisitions (Completed in the third quarter of 2012)

Among the large, publicly announced M&A Advisory transactions or assignments
completed during the third quarter of 2012 on which Lazard advised were the
following:

  *Progress Energy’s $32 billion merger with Duke Energy
  *Tyco’s combination of its Flow Control business with Pentair in a $10
    billion all-stock merger
  *Walgreens’ $6.7 billion acquisition of a 45% stake in Alliance Boots
  *GlaxoSmithKline’s $3.0 billion acquisition of Human Genome Sciences
  *Nexus Energy’s restructuring of its interest in the Crux joint venture,
    valuing Nexus Energy’s pro forma stake at A$638 million
  *Gryson shareholders in the €475 million sale of the company to Japan
    Tobacco
  *St Barbara Limited’s A$556 million acquisition of Allied Gold
  *Montagu Private Equity’s €430 million acquisition of St Hubert
  *Tyco's separation into three independent, publicly traded companies
  *Edison in the restructuring of its shareholdings
  *Audi’s acquisition of Ducati
  *Lion Capital’s acquisition of Alain Afflelou
  *Carrefour’s sale of its 50% stake in Carrefour Marinopoulos to
    Marinopoulos Group

Mergers and Acquisitions (Announced)

Among the ongoing, large, publicly announced M&A transactions and assignments
on which Lazard advised in the 2012 third quarter, continued to advise, or
completed since September 30, 2012, are the following:

  *Deutsche Telekom on the $32.8 billion combination of T-Mobile and MetroPCS
  *Anheuser-Busch InBev’s $20.1 billion acquisition of the remaining stake in
    Grupo Modelo it does not already own and Grupo Modelo’s related $1.9
    billion sale of its 50% interest in Crown Imports to Constellation Brands
  *The Supervisory Board of TNT Express in the €5.2 billion sale to United
    Parcel Service
  *Caisse des Dépôts’ €2.6 billion indirect acquisition of Silic from
    Groupama
  *Carrefour in the  €2.0 billion sale of its business in Colombia to
    Cencosud
  *Hertz’s $2.3 billion acquisition of Dollar Thrifty
  *Permian Mud Service (parent company of Champion Technologies and
    CorsiTech) in its $2.2 billion merger with Ecolab
  *PPG on the $2.1 billion merger of its commodity chemicals business with
    Georgia Gulf
  *CH Energy Group’s $1.5 billion sale to Fortis
  *Principal Financial Group’s $1.5 billion acquisition of Cuprum
  *HiSoft Technology’s $875  million  merger of equals with VanceInfo
    Technologies
  *Rockwood’s C$724 million acquisition of Talison Lithium
  *Qatar Holding on its approximately 12% stake in Xstrata in connection with
    the proposed merger with Glencore
  *Caisse des Dépôts on the reorganization of Dexia
  *Piraeus Bank in its acquisition of (i) selected Agricultural Bank of
    Greece (ATEbank) assets and liabilities and (ii) Société Générale’s 99.1%
    stake in Geniki Bank
  *Hera's merger with AcegasAps

Restructuring and Debt Advisory Assignments

Restructuring and debtor or creditor advisory assignments completed during the
third quarter of 2012 on which Lazard advised include: White Birch Paper
Company in connection with their U.S. and Canadian bankruptcies; Cementos
Portland Valderrivas on its debt refinancing; Cemex in connection with its
refinancing; Grupo Nefinsa on its debt refinancing; Grupo Uralita on its debt
refinancing; Limoni on its debt restructuring; Lohr Industrie on its debt
restructuring and sale of its Translohr division to Alstom and the Fonds
Stratégique d'Investissement; the committee of Lighthouse bondholders of Seat
Pagine Gialle on the company’s restructuring; and, a consortium of derivative
counterparties to Vestia on the unwinding of the company's derivative
portfolio.

Notable Chapter 11 bankruptcies on which Lazard advised debtors or creditors,
or related parties, during or since the third quarter of 2012, are:

  *Airlines: Allied Pilots Association with respect to American Airlines
  *Consumer/Food: Hostess Brands
  *Gaming, Entertainment and Hospitality: Indianapolis Downs, MSR Resorts
  *Paper and Packaging: NewPage Corporation
  *Power & Energy: A123 Systems, LSP Energy
  *Professional/Financial Services: Ambac
  *Technology/Media/Telecom: Eastman Kodak, LightSquared, Nortel Networks,
    Tribune Company

Among other publicly announced restructuring and debt advisory assignments on
which Lazard has advised debtors or creditors during or since the third
quarter of 2012, are:

  *Belvédère – advising the FRN noteholder committee
  *Empresas La Polar on its debt restructuring activities
  *Financial Guaranty Insurance Company (FGIC) – advisor to Weil, Gotshal &
    Manges in its capacity as counsel to the New York Liquidation Bureau
  *National Association of Letter Carriers in connection with the USPS’s
    restructuring efforts
  *PMI – advisor to the receiver of PMI on certain asset dispositions
  *Praktiker on the funding of its strategic and operational restructuring
    program
  *TORM - advisor to the senior lenders on the company's debt restructuring

                                     ***

ENDNOTES

^1 A non-U.S. GAAP measure. See attached financial schedules and related notes
for a detailed explanation of adjustments to corresponding U.S. GAAP results.
We believe that presenting our results on an adjusted basis, in addition to
the U.S. GAAP results, is the most meaningful and useful way to compare our
operating results across periods. These results exclude the charge of $25
million in the first quarter of 2012, related to staff reductions and an $18
million pre-tax gain on the repurchase of our subordinated debt in the third
quarter of 2011.

^2 Global M&A completed transaction volume for the nine months ended September
30, 2012, as compared to the nine months ended September 30, 2011. Source:
Thomson Financial.

^3 We have paid $70 million to our shareholders for dividends declared in
January, April and July; have repurchased, as of October 24, 2012, 11.6
million shares of our Class A common stock for $321 million, at an average
price of $27.61 per share; and have satisfied employee tax obligations of $41
million in cash in lieu of share issuance upon vesting of equity grants. As
announced earlier, approximately 4.5 million of these shares, repurchased at a
cost of $120 million, served to directly offset the potential dilution from
our 2011 year-end equity-based compensation awards, net of estimated
forfeitures and tax withholding to be paid in cash by the Company in lieu of
share issuances.

^4 Surplus cash is defined as that which is not needed for regulatory, tax and
related purposes of the business, or which is reserved for accrued
compensation.

LAZ-G


LAZARD LTD
SELECTED SUMMARY FINANCIAL INFORMATION (a)
(Non-GAAP - unaudited)

                  Three Months Ended                       % Change From
($ in thousands,   September     June 30,      September     June    September
except per share   30,          2012         30,           30,    30,
data)              2012                        2011          2012    2011
                                                                     
Revenues:
                                                                     
Financial
Advisory
M&A and
strategic          $171,417      $195,383      $199,120      (12%)   (14%)
advisory
Capital markets    14,174        17,174        16,350        (17%)   (13%)
& other advisory
Strategic          185,591       212,557       215,470       (13%)   (14%)
advisory
Restructuring      34,382        30,067        38,149        14%     (10%)
Total              219,973       242,624       253,619       (9%)    (13%)
                                                                     
Asset Management
Management fees    202,324       195,223       199,980       4%      1%
Incentive fees     10,606        3,704         9,395         186%    13%
Other revenue      7,397         7,622         7,321         (3%)    1%
Total              220,327       206,549       216,696       7%      2%
                                                                     
Corporate          2,911         6,036         (3,777)       (52%)   NM
                                                                     
Operating          $443,211      $455,209      $466,538      (3%)    (5%)
revenue (b)

Expenses:
                                                                     
Compensation and
benefits expense   $278,070      $285,238      $276,656      (3%)    1%
(c)
Ratio of
compensation to    62.7%         62.7%         59.3%
operating
revenue
                                                                     
Non-compensation   $95,113       $105,767      $98,653       (10%)   (4%)
expense (d)
Ratio of
non-compensation   21.5%         23.2%         21.1%
to operating
revenue

Earnings:
                                                                     
Earnings from      $70,028       $64,204       $91,229       9%      (23%)
operations (e)
Operating margin   15.8%         14.1%         19.6%
(f)
                                                                     
Net income (g)     $35,384       $33,084       $52,865       7%      (33%)
                                                                     
Diluted net        $0.26         $0.25         $0.39         4%      (33%)
income per share
                                                                     
Diluted weighted   135,380,036   134,636,935   136,857,956   1%      (1%)
average shares
                                                                     
Effective tax      26.7%         22.9%         23.8%
rate (h)

This presentation includes non-U.S. GAAP ("non-GAAP") measures. Our non-GAAP
measures are not meant to be considered in isolation or as a substitute for
the corresponding U.S. GAAP measures, and should be read only in conjunction
with our consolidated financial statements prepared in accordance with U.S.
GAAP. For a detailed explanation of the adjustments made to the corresponding
U.S. GAAP measures, see Reconciliation of U.S. GAAP to Selected Summary
Financial Information and Notes to Financial Schedules.


LAZARD LTD
SELECTED SUMMARY FINANCIAL INFORMATION (a)
(Non-GAAP - unaudited)
                                        
                                          Nine Months Ended September 30,
                                                                   
($ in thousands, except per share data)   2012          2011          % Change
                                                                      
Revenues:
                                                                      
Financial Advisory
M&A and strategic advisory                $559,411      $533,440      5%
Capital markets & other advisory          45,718        76,197        (40%)
Strategic advisory                        605,129       609,637       (1%)
Restructuring                             134,664       122,039       10%
Total                                     739,793       731,676       1%
                                                                      
Asset Management
Management fees                           597,407       627,965       (5%)
Incentive fees                            16,906        20,872        (19%)
Other revenue                             22,655        29,534        (23%)
Total                                     636,968       678,371       (6%)
                                                                      
Corporate                                 20,408        5,115         NM
                                                                      
Operating revenue (b)                     $1,397,169    $1,415,162    (1%)

Expenses:
                                                                      
Compensation and benefits expense (c)     $876,024      $831,223      5%
Ratio of compensation to operating        62.7%         58.7%
revenue
                                                                      
Non-compensation expense (d)              $306,115      $291,003      5%
Ratio of non-compensation to operating    21.9%         20.6%
revenue

Earnings:
                                                                      
Earnings from operations (e)              $215,030      $292,936      (27%)
Operating margin (f)                      15.4%         20.7%
                                                                      
Net income (g)                            $113,280      $177,183      (36%)
                                                                      
Diluted net income per share              $0.84         $1.30         (35%)
                                                                      
Diluted weighted average shares           135,537,050   138,265,494   (2%)
                                                                      
Effective tax rate (h)                    25.2%         21.3%

This presentation includes non-U.S. GAAP ("non-GAAP") measures. Our non-GAAP
measures are not meant to be considered in isolation or as a substitute for
the corresponding U.S. GAAP measures, and should be read only in conjunction
with our consolidated financial statements prepared in accordance with U.S.
GAAP. For a detailed explanation of the adjustments made to the corresponding
U.S. GAAP measures, see Reconciliation of U.S. GAAP to Selected Summary
Financial Information and Notes to Financial Schedules.


LAZARD LTD
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(U.S. GAAP)
                                                              
                 Three Months Ended                          % Change From
($ in            September                   September       June    September
thousands,       30,           June 30,      30,             30,     30,
except per       2012          2012          2011            2012    2011
share data)
                                                                     
Total revenue    $449,464      $457,231      $484,583        (2%)    (7%)
Interest         (20,658)      (20,321)      (22,164)
expense
Net revenue      428,806       436,910       462,419         (2%)    (7%)
Operating
expenses:
Compensation     283,818       283,392       273,532         0%      4%
and benefits
                                                                     
Occupancy and    25,680        28,347        24,345
equipment
Marketing and
business         19,096        22,322        19,844
development
Technology and
information      21,474        21,275        20,417
services
Professional     8,514         13,274        11,434
services
Fund
administration   13,179        12,670        14,019
and outsourced
services
Amortization
of intangible
assets related   2,494         2,560         1,716
to
acquisitions
Other            7,825         8,537         9,374
Subtotal         98,262        108,985       101,149         (10%)   (3%)
Operating        382,080       392,377       374,681         (3%)    2%
expenses
                                                                     
Operating        46,726        44,533        87,738          5%      (47%)
income
                                                                     
Provision for    13,053        10,371        20,605          26%     (37%)
income taxes
Net income       33,673        34,162        67,133          (1%)    (50%)
Net income
attributable
to               372           3,341         4,434
noncontrolling
interests
Net income
attributable     $33,301       $30,821       $62,699         8%      (47%)
to Lazard Ltd
                                                                     
Attributable
to Lazard Ltd
Common
Stockholders:
Weighted
average shares
outstanding:
Basic            115,603,351   118,235,320   118,315,944     (2%)    (2%)
Diluted          135,380,036   134,636,935   136,857,956     1%      (1%)
                                                                     
Net income per
share:
Basic            $0.29         $0.26         $0.53           12%     (45%)
Diluted          $0.26         $0.24         $0.49           8%      (47%)


LAZARD LTD
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(U.S. GAAP)
                                                                 
                                    Nine Months Ended
($ in thousands, except per share   September 30,   September 30,     % Change
data)                               2012            2011
                                                                      
Total revenue                       $1,413,156      $1,446,529        (2%)
Interest expense                    (61,401)        (68,795)
Net revenue                         1,351,755       1,377,734         (2%)
Operating expenses:
Compensation and benefits           905,527         830,011           9%
                                                                      
Occupancy and equipment             80,309          70,030
Marketing and business              69,685          58,834
development
Technology and information          63,142          60,566
services
Professional services               31,099          34,395
Fund administration and             39,300          40,777
outsourced services
Amortization of intangible assets   6,172           4,896
related to acquisitions
Other                               27,439          27,839
Subtotal                            317,146         297,337           7%
Operating expenses                  1,222,673       1,127,348         8%
                                                                      
Operating income                    129,082         250,386           (48%)
                                                                      
Provision for income taxes          32,191          51,704            (38%)
Net income                          96,891          198,682           (51%)
Net income attributable to          7,217           18,972
noncontrolling interests
Net income attributable to Lazard   $89,674         $179,710          (50%)
Ltd
                                                                      
Attributable to Lazard Ltd Common
Stockholders:
Weighted average shares
outstanding:
Basic                               117,689,404     117,586,028       0%
Diluted                             135,537,050     138,265,494       (2%)
                                                                      
Net income per share:
Basic                               $0.76           $1.53             (50%)
Diluted                             $0.70           $1.39             (50%)


LAZARD LTD
UNAUDITED CONDENSED CONSOLIDATED
STATEMENT OF FINANCIAL CONDITION
(U.S. GAAP)
                                                             
($ in thousands)                                  September 30,   December 31,
                                                  2012            2011
                                                                  
ASSETS
                                                                  
Cash and cash equivalents                         $832,940        $1,003,791
Deposits with banks                               266,680         286,037
Cash deposited with clearing organizations        61,863          75,506
and other segregated cash
Receivables                                       484,311         504,455
Investments                                       439,435         378,521
Goodwill and other intangible assets              395,442         393,099
Other assets                                      514,275         440,527
                                                                  
Total Assets                                      $2,994,946      $3,081,936
                                                                  
LIABILITIES & STOCKHOLDERS' EQUITY
                                                                  
Liabilities
Deposits and other customer payables              $262,206        $288,427
Accrued compensation and benefits                 301,174         383,513
Senior debt                                       1,076,850       1,076,850
Other liabilities                                 520,890         466,290
Total liabilities                                 2,161,120       2,215,080
                                                                  
Commitments and contingencies
                                                                  
Stockholders' equity
Preferred stock, par value $.01 per share         -               -
Common stock, par value $.01 per share            1,232           1,230
Additional paid-in capital                        750,647         659,013
Retained earnings                                 270,245         258,646
Accumulated other comprehensive loss, net         (81,408)        (88,364)
of tax
                                                  940,716         830,525
Class A common stock held by subsidiaries,        (226,889)       (104,382)
at cost
Total Lazard Ltd stockholders' equity             713,827         726,143
Noncontrolling interests                          119,999         140,713
Total stockholders' equity                        833,826         866,856
                                                                  
Total liabilities and stockholders' equity        $2,994,946      $3,081,936

LAZARD LTD
ASSETS UNDER MANAGEMENT ("AUM")
(unaudited)
                                                               
                   As of                                  Variance
                   September    June 30,    December      Qtr to
                   30,          2012        31,           Qtr         YTD
                   2012                     2011
                                                                      
Equities           $132,231     $122,159    $116,362      8.2%        13.6%
Fixed Income       21,905       19,936      17,750        9.9%        23.4%
Alternative        4,753        4,774       5,349         (0.4%)      (11.1%)
Investments
Private Equity     1,428        1,441       1,486         (0.9%)      (3.9%)
Cash               94           129         92            (27.1%)     2.2%
Total AUM          $160,411     $148,439    $141,039      8.1%        13.7%
                                                                      
                                                                      
                                                                      
                   Three Months Ended                     Nine Months Ended
                   September30,                          September30,
                   2012         2011                      2012        2011
                   ($ in millions)                        ($ in millions)
AUM - Beginning    $148,439     $161,597                  $141,039    $155,337
of Period
                                                                      
Net Flows          1,813        (1,122)                   2,788       (754)
Market and
foreign exchange
appreciation       10,159       (24,663)                  16,584      (18,771)
(depreciation)
                                                                      
AUM - End of       $160,411     $135,812                  $160,411    $135,812
Period
                                                                      
Average AUM        $156,620     $148,705                  $152,744    $153,299
                                                                      
% Change in        5.3%                                   (0.4%)
average AUM

Note: Average AUM is generally based on an average of quarterly ending
balances for the respective periods.


LAZARD LTD
RECONCILIATION OF U.S. GAAP TO SELECTED SUMMARY FINANCIAL INFORMATION (a)
(unaudited)

                   Three Months Ended                 Nine Months Ended
                     September   June 30,   September     September    September
                     30,        2012      30,           30,         30,
                     2012                   2011          2012         2011
                                                                       
Operating Revenue
Net revenue -        $428,806    $436,910   $462,419      $1,351,755   $1,377,734
U.S. GAAP Basis
                                                                       
Adjustments:
Gain on
repurchase of        -           -          (18,171)      -            (18,171)
subordinated
debt
Revenue related
to                   (1,193)     (4,509)    (3,057)       (10,141)     (14,345)
noncontrolling
interests (i)
Loss (gain)
related to
Lazard Fund
Interests            (4,728)     2,856      3,961         (4,639)      3,961
("LFI") and
other similar
arrangements
Interest expense     20,326      19,952     21,386        60,194       65,983
                                                                       
Operating
revenue, as          $443,211    $455,209   $466,538      $1,397,169   $1,415,162
adjusted
                                                                       
Compensation & Benefits Expense
Compensation &
benefits expense     $283,818    $283,392   $273,532      $905,527     $830,011
- U.S. GAAP
Basis
                                                                       
Adjustments:
Charges
pertaining to        -           -          -             (21,754)     -
staff reductions
(Charges)
credits
pertaining to
LFI and other        (4,728)     2,856      3,961         (4,639)      3,961
similar
arrangements
compensation
liability
Compensation
related to           (1,020)     (1,010)    (837)         (3,110)      (2,749)
noncontrolling
interests (i)
                                                                       
Compensation &
benefits             $278,070    $285,238   $276,656      $876,024     $831,223
expense, as
adjusted
                                                                       
Non-Compensation Expense
Non-compensation
expense -            $98,262     $108,985   $101,149      $317,146     $297,337
Subtotal - U.S.
GAAP Basis
                                                                       
Adjustments:
Charges
pertaining to        -           -          -             (2,905)      -
staff reductions
Amortization of
intangible           (2,494)     (2,560)    (1,716)       (6,172)      (4,896)
assets related
to acquisitions
Non-compensation
expense related
to                   (655)       (658)      (780)         (1,954)      (1,438)
noncontrolling
interests (i)
                                                                       
Non-compensation
expense, as          $95,113     $105,767   $98,653       $306,115     $291,003
adjusted
                                                                       
Earnings From Operations
Operating Income
- U.S. GAAP          $46,726     $44,533    $87,738       $129,082     $250,386
Basis
                                                                       
Other
adjustments:
Gain on
repurchase of        -           -          (18,171)      -            (18,171)
subordinated
debt
Revenue related
to                   (1,193)     (4,509)    (3,057)       (10,141)     (14,345)
noncontrolling
interests (i)
Interest expense     20,326      19,952     21,386        60,194       65,983
Charges
pertaining to        -           -          -             24,659       -
staff reductions
Expenses related
to                   1,675       1,668      1,617         5,064        4,187
noncontrolling
interests (i)
Amortization of
intangible           2,494       2,560      1,716         6,172        4,896
assets related
to acquisitions
                                                                       
Earnings from
operations, as       $70,028     $64,204    $91,229       $215,030     $292,936
adjusted
                                                                       
Net Income attributable to Lazard Ltd
Net income
attributable to      $33,301     $30,821    $62,699       $89,674      $179,710
Lazard Ltd -
U.S. GAAP Basis
Adjustments:
Gain on
repurchase of        -           -          (18,171)      -            (18,171)
subordinated
debt
Charges
pertaining to        -           -          -             24,659       -
staff reductions
Tax (benefits)
allocated to         140         543        4,634         (5,566)      4,634
adjustments
Amount
attributable to      (49)        (15)       801           (1,109)      801
LAZ-MD Holdings
                                                                       
Adjustment for
full exchange of
exchangeable
interests (j):
Tax adjustment
for full             5           27         (506)         (443)        (945)
exchange
Amount
attributable to      1,987       1,708      3,408         6,065        11,154
LAZ-MD Holdings
                                                                       
Net income, as       $35,384     $33,084    $52,865       $113,280     $177,183
adjusted
                                                                       
Diluted net
income per
share:
U.S. GAAP Basis      $0.26       $0.24      $0.49         $0.70        $1.39
Non-GAAP Basis,      $0.26       $0.25      $0.39         $0.84        $1.30
as adjusted

This presentation includes non-U.S. GAAP ("non-GAAP") measures. Our non-GAAP
measures are not meant to be considered in isolation or as a substitute for
comparable U.S. GAAP measures, and should be read only in conjunction with our
consolidated financial statements prepared in accordance with U.S. GAAP. For a
detailed explanation of the adjustments made to comparable U.S. GAAP measures,
see Notes to Financial Schedules.


LAZARD LTD

Notes to Financial Schedules
    
    Selected Summary Financial Information are non-U.S. GAAP ("non-GAAP")
    measures. Lazard believes that presenting results and measures on an
(a) adjusted basis in conjunction with U.S. GAAP measures provides the most
    meaningful basis for comparison of its operating results across periods.
    (See Reconciliation of U.S. GAAP to Selected Summary Financial
    Information)
    
    Excludes (i) gains/losses related to the changes in the fair value of
    investments held in connection with Lazard Fund Interests and other
    similar deferred compensation arrangements for which a corresponding equal
    amount is excluded from compensation & benefits expense, (ii) revenues
(b) related to non-controlling interests (see (i) below), (iii) interest
    expense primarily related to corporate financing activities, and (iv) for
    the three and nine month periods ended September 30, 2011, excludes the
    gain on repurchase of the Company's subordinated debt, and is a non-GAAP
    measure. (See Reconciliation of U.S. GAAP to Selected Summary Financial
    Information)
    
    Excludes (i) charges/credits related to the changes in the fair value of
    the compensation liability recorded in connection with Lazard Fund
    Interests and other similar deferred compensation arrangements, (ii)
(c) compensation and benefits related to noncontrolling interests (see (i)
    below), and (iii) for the nine month period ended September 30, 2012,
    charges pertaining to staff reductions (see (g) below), and is a non-GAAP
    measure. (See Reconciliation of U.S. GAAP to Selected Summary Financial
    Information)
    
    Excludes (i) amortization of intangible assets related to acquisitions,
    (ii) expenses related to noncontrolling interests (see (i) below), and
(d) (iii) for the nine month period ended September 30, 2012, charges
    pertaining to staff reductions (see (g) below), and is a non-GAAP measure.
    (See Reconciliation of U.S. GAAP to Selected Summary Financial
    Information)
    
    Excludes (i) amortization of intangible assets related to acquisitions,
    (ii) interest expense primarily related to corporate financing activities,
    (iii) revenues and expenses related to noncontrolling interests (see (i)
(e) below), (iv) for the nine month period ended September 30, 2012, charges
    pertaining to staff reductions (see (g) below), and (v) for the three and
    nine month periods ended September 30, 2011, gain on repurchase of the
    Company's subordinated debt, and is a non-GAAP measure. (See
    Reconciliation of U.S. GAAP to Selected Summary Financial Information)
    
    Represents earnings from operations as a percentage of operating revenue,
(f) and is a non-GAAP measure. (See Reconciliation of U.S. GAAP to Selected
    Summary Financial Information)
    
    Adjusted to reflect the full conversion of outstanding exchangeable
    interests held by members of LAZ-MD Holdings. For the nine month period
    ended September 30, 2012, excludes certain charges pertaining to staff
    reductions including severance, benefit payments and acceleration of
(g) unrecognized amortization of deferred incentive compensation previously
    granted to individuals terminated, net of applicable tax benefits and for
    the three and nine month periods ended September 30, 2011, excludes gain
    on repurchase of the Company's subordinated debt, net of applicable tax.
    (See Reconciliation of U.S. GAAP to Selected Summary Financial
    Information)
    
    Effective tax rate is computed based on a quotient, the numerator of which
    is the provision for income taxes of $12,908, $9,801 and $16,477 for the
    three month periods ended September 30, 2012, June 30, 2012 and September
    30, 2011, respectively, and $38,200 and $48,015 for the nine month periods
    ended September 30, 2012 and 2011, respectively, and the denominator of
    which is pre-tax income of $46,726, $44,533 and $69,567 for the three
(h) month periods ended September 30, 2012, June 30, 2012 and September 30,
    2011, respectively, and $153,741 and $232,215 for the nine month periods
    ended September 30, 2012 and 2011, respectively, exclusive of net income
    (loss) attributable to noncontrolling interests of ($1,566), $1,647 and
    $225 for the three month periods ended September 30, 2012, June 30, 2012
    and September 30, 2011, respectively, and $2,261 and $7,017 for the nine
    month periods ended September 30, 2012 and 2011, respectively.
    
    Noncontrolling interests include revenue and expenses principally related
(i) to Edgewater, and is a non-GAAP measure. (See Reconciliation of U.S. GAAP
    to Selected Summary Financial Information)
    
    Represents a reversal of noncontrolling interests related to LAZ-MD
    Holdings’ ownership of Lazard Group common membership interests and an
(j) adjustment for Lazard Ltd entity-level taxes to affect a full exchange of
    interests and excluding the 2012 charges pertaining to staff reductions
    noted in (g) above.
    
NM  Not meaningful

Contact:

Lazard Ltd
Media Contact:
Judi Frost Mackey, +1 212 632 1428
judi.mackey@lazard.com
or
Investor Contact:
Kathryn Harmon, +1 212 632 6637
kathryn.harmon@lazard.com
 
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