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Lazard Ltd Reports Full-Year and Fourth-Quarter 2012 Results



  Lazard Ltd Reports Full-Year and Fourth-Quarter 2012 Results

Business Wire

NEW YORK -- February 7, 2013

Lazard Ltd (NYSE: LAZ):

                                  Highlights

  * Net income per share, as adjusted^1, of $1.44 (diluted) for the year ended
    December 31, 2012, and $0.61 (diluted) for the 2012 fourth quarter,
    excluding charges in both periods^2; compared to $1.31 (diluted) and $0.01
    (diluted) for the respective 2011 periods
  * Operating revenue^1 of $1,971 million for 2012, up 5% from full-year 2011;
    fourth-quarter 2012 operating revenue of $574 million, up 22% from
    prior-year period
  * Financial Advisory operating revenue of $1,049 million for 2012, up 6%
    from full-year 2011; Financial Advisory fourth-quarter 2012 operating
    revenue of $309 million, up 19% from prior-year period
  * M&A and Other Advisory operating revenue of $793 million for 2012, up 13%
    from full-year 2011; M&A and Other Advisory fourth-quarter 2012 operating
    revenue of $234 million, up 40% from prior-year period
  * Asset Management operating revenue of $882 million for 2012, effectively
    matching the record full-year 2011 period; fourth-quarter 2012 operating
    revenue of $245 million, up 20% from prior-year period and up 11% from
    third-quarter 2012
  * Assets under management as of December 31, 2012, a record $167 billion, up
    18% from year-end 2011 and up 4% from September 30, 2012. Net inflows of
    $2.7 billion for full-year 2012; net outflows of $47 million for
    fourth-quarter 2012
  * Implementation of recently announced cost saving initiatives on plan, with
    related fourth-quarter 2012 charge of $103 million
  * Return of capital to shareholders totaling $540 million^3 in 2012

($ in
millions,
except       Year Ended
                                              Fourth Quarter
per share    December 31,
data and
AUM)
             2012       2011       %’12-’11   2012        2011        %’12’-11
As
Adjusted^1
Operating    $1,971     $1,884     5%         $574        $469        22%
revenue
Financial    $1,049     $992       6%         $309        $260        19%
Advisory
Asset        $882       $883       -          $245        $204        20%
Management
Net          $195       $179       9%         $82         $1          n/m^*
income^2
Diluted
net income   $1.44      $1.31      10%        $0.61       $0.01       n/m^*
per
share^2
U.S. GAAP
Net income   $84        $175       (52)%      $(5)        $(5)        -
Diluted
net income   $0.65      $1.36      (52)%      $(0.05)     $(0.04)     (25)%
per share
Assets
Under
Management
Ending AUM
($ in        $167       $141       18%
billions)
Average
AUM  ($ in   $156       $152       2%         $164        $140        17%
billions)
^*not
meaningful

Lazard Ltd (NYSE: LAZ) today reported operating revenue^1 of $1,971 million
for the year ended December 31, 2012. Net income, as adjusted^1, was $195
million, or $1.44 per share (diluted) for the full year. These results exclude
pre-tax charges of $103 million relating to the implementation of recently
announced cost saving initiatives in the fourth quarter of 2012 and $25
million relating to staff reductions in the first quarter of 2012.

Fourth-quarter 2012 operating revenue was $574 million. Net income, as
adjusted, was $82 million, or $0.61 per share (diluted) for the fourth quarter
of 2012. These results exclude pre-tax charges of $103 million relating to
recently announced cost saving initiatives in the fourth quarter.

Full-year 2012 net income on a U.S. GAAP basis was $84 million, or $0.65 per
share (diluted). Fourth-quarter 2012 net loss on a U.S. GAAP basis was $5
million, or $(0.05) per share. A reconciliation of our U.S. GAAP results to
the adjusted results is presented on page 20 of this press release.

“Lazard’s 2012 results underscore the strength and resilience of our business
model,” said Kenneth M. Jacobs, Chairman and Chief Executive Officer of
Lazard. “Operating revenue is near record levels, reflecting the increasing
diversification of our global franchise and our ability to anticipate the
evolving needs of our clients.”

“As we reinforce the breadth and depth of our client services around the
world, we are building shareholder value by enhancing our profitability and
increasing our operating leverage. Lazard is well positioned for growth as the
macro environment improves,” said Mr. Jacobs.

“The implementation of cost saving initiatives we announced in October is on
track,” said Matthieu Bucaille, Chief Financial Officer of Lazard. “We are
making progress toward our financial goals set in April 2012, which include an
operating margin of 25% in 2014, based on 2012 activity levels.”

“In 2012, we returned $540 million in capital to shareholders, about 16% of
Lazard’s year-end market capitalization,” said Mr. Bucaille. “This was a
strong year for returning capital to shareholders as we achieved our goal of
returning $200 million in surplus cash while paying a special dividend and
accelerating the year’s final quarterly dividend. Going forward, we remain
committed to offsetting potential share dilution from equity-related
compensation, and it is our plan to continue to deploy future excess cash
toward dividends, share repurchases and debt repurchases.”

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
1) M&A and Other Advisory (Other includes Capital Structure Advisory and
Sovereign Advisory) and 2) Capital Raising (includes Capital Markets Advisory
and Private Fund Advisory).

Full Year

Financial Advisory operating revenue was $1,049 million in the full year of
2012, 6% higher than 2011, reflecting an increase in Strategic Advisory
operating revenue, offset by a decrease in Restructuring operating revenue.

Strategic Advisory operating revenue was $866 million, 9% higher than 2011,
driven by a 13% increase in M&A and Other Advisory revenue compared to the
prior-year period.

Restructuring operating revenue was $183 million, 8% lower than 2011,
generally in line with the industry-wide low level of corporate restructuring
activity. Lazard was the leader in global completed and announced
restructurings in 2012.^*

During 2012, Lazard remained engaged in highly visible, complex M&A
transactions and other advisory assignments, including cross-border
transactions, spin-offs, distressed asset sales, capital structure and
sovereign advisory, in the Americas, Europe and Asia.

Lazard advised on several of the largest global M&A transactions announced in
2012, including (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; GDF Suez/Electrabel in the $12.6 billion acquisition of the 30% stake it
did not already own in International Power; and Qatar Holding on its stake in
Xstrata in connection with the proposed merger with Glencore International.

Our Sovereign Advisory business remained active in worldwide assignments,
including: advising the government of Greece on the completion of its
successful bond exchange, the largest in history; acting as financial agent to
the U.S. Department of Treasury with respect to General Motors and Ally
Financial; and advising the Kazakhstan Sovereign Wealth Fund-owned BTA Bank
JSC on its restructuring and recapitalization plan.

During 2012 we were involved in many of the most notable recent
restructurings, including: Lehman Brothers; the Allied Pilots Association with
respect to American Airlines; Eastman Kodak; Hostess Brands; and Tribune
Company.

Please see a more complete list of M&A and Restructuring assignments on which
Lazard advised on pages 9-11 of this release.

^* Source: Thomson Reuters

Fourth Quarter

Financial Advisory operating revenue was $309 million in the fourth quarter of
2012, 19% higher than the fourth quarter of 2011.

Strategic Advisory operating revenue was $261 million, 41% higher than the
fourth quarter of 2011. This included a 40% increase in M&A and Other Advisory
revenue compared to the prior-year period, due in part to a higher level of
closings prior to year-end.

Restructuring operating revenue was $48 million, 36% lower than the strong
fourth quarter of 2011.

Please see a list of M&A and Restructuring assignments on which Lazard advised
in the 2012 fourth quarter, or continued to advise, or completed since
December 31, 2012, on pages 9-11 of this release.

Asset Management

Full Year

Asset Management operating revenue was $882 million in the full year of 2012,
essentially matching the record full-year 2011 period. Net inflows were $2.7
billion for the year. Despite volatile equity markets, Asset Management has
achieved net inflows in five of the past six years.

Assets under management (AUM) were a record $167 billion as of December 31,
2012, up 18% from December 31, 2011, reflecting market appreciation and net
inflows. AUM as of December 31, 2012, was up 4% from September 30, 2012.
Average AUM of $156 billion in 2012 was 2% higher than average AUM in 2011.

Management fees were $806 million in 2012, 1% lower than 2011, reflecting the
2% increase in average AUM, a change in the mix of our AUM, and foreign
exchange fluctuations.

Incentive fees during the period totaled $44 million, 66% higher than 2011,
reflecting the performance of certain traditional and alternative strategies.

In 2012, we continued to invest in our Asset Management business, extending
our investment platforms with new strategies. In addition, Lazard Asset
Management opened an office in Zurich, increasing our distribution and
investment capabilities.

We continued to win significant new mandates in most of our major platforms
from clients around the world. A sample of these new mandates is reflected in
the investor presentation on our website.

Fourth Quarter

Asset Management operating revenue was $245 million in the fourth quarter of
2012, a 20% increase over the prior-year period and 11% higher than the third
quarter of 2012. Net outflows were $47 million in the fourth quarter of 2012.

Average AUM for the fourth quarter of 2012 was $164 billion, 17% higher than
the prior-year period and 5% higher than the third quarter of 2012.

Management fees were $209 million in the fourth quarter of 2012, 10% higher
than the prior-year period and 3% higher than the third quarter of 2012. The
sequential increase is generally consistent with the increase in average AUM.

Incentive fees were $27 million in the fourth quarter of 2012, compared to $5
million in the prior-year period, primarily reflecting the performance of
alternative strategies, as well as certain traditional strategies.

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 and excluding charges). We believe annual awarded compensation
reflects the actual annual compensation cost more accurately than the GAAP
measure of compensation cost, which includes applicable-year cash compensation
and the amortization of deferred incentive compensation principally
attributable to previous years’ deferred compensation. 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.

Adjusted GAAP compensation and benefits expense^1 for full-year 2012 was
$1,218 million, which excludes related 2012 charges^2, compared to $1,168
million for 2011. The corresponding adjusted GAAP compensation ratio was 61.8%
for the year, compared to 62.0% for 2011.

The 2012 adjusted GAAP compensation ratio includes, among other items,
amortization expense related to 2008 deferred compensation, which had a
comparatively longer, four-year vesting period. For full-year 2012, we
expensed approximately $40 million related to the 2008 grants, or 2% of 2012
operating revenue.

Our 2012 awarded compensation ratio was 59.4%, compared to our 2011 awarded
compensation ratio of 62.0%. Awarded compensation expense for 2012 was $1,171
million, essentially unchanged from 2011, even as operating revenue rose 5%.

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

Non-Compensation Expense

Adjusted non-compensation expense^1 for full-year 2012 was $421 million,
excluding related 2012 charges^2, 5% higher than 2011. In 2012,
non-compensation expense was negatively impacted by higher occupancy costs and
transaction-related third-party fees, partly offset by lower professional
fees. The ratio of adjusted non-compensation expense to operating revenue for
2012 was 21.4%, essentially unchanged compared to 2011.

Adjusted non-compensation expense for the fourth quarter of 2012, excluding
related 2012 charges, was $115 million, 6% higher than the prior-year period.
The ratio of adjusted non-compensation expense to operating revenue for
fourth-quarter 2012 was 20.0%, compared to 23.2% for fourth-quarter 2011.

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

TAXES

The provision for taxes, on an adjusted basis^1, was $53 million for full-year
2012 and $15 million for the fourth quarter of 2012. The effective tax rate on
such adjusted basis was 21.3% for full-year 2012, compared to 20.7% for
full-year 2011.

CAPITAL MANAGEMENT AND BALANCE SHEET

Our primary capital management goals include managing debt and returning
capital to shareholders through dividends and share repurchases.

In 2012, we achieved our objective of returning $200 million of surplus cash^4
to shareholders, in advance of our year-end 2013 target.

For the full-year 2012, Lazard returned $540 million to shareholders, which
included $140 million in dividends, $355 million in share repurchases and $45
million in satisfaction of employee tax obligations in lieu of share issuances
upon vesting of equity grants. The $140 million of dividends included $23
million in a fourth-quarter special dividend of $0.20 per share on outstanding
Class A common stock and $23 million in acceleration of the fourth-quarter
dividend of $0.20 per share on outstanding Class A common stock, which
ordinarily would have been payable in February 2013.

In the fourth quarter of 2012, we repurchased 4.6 million shares of our Class
A common stock for $132 million, at an average price of $28.76 per share. This
brought total share repurchases in full-year 2012 to $355 million, at an
average price of $27.66 per share.

Lazard’s financial position remains strong. Our cash and cash equivalents at
December 31, 2012, were $850 million, the majority of which were invested in
U.S. Government and agency money market funds. As of December 31, 2012, total
stockholders’ equity related to Lazard’s interests was $570 million.

COST SAVING INITIATIVES

In Lazard’s third-quarter 2012 earnings release, the firm announced cost
saving initiatives expected to result in approximately $125 million in annual
savings from our existing cost base.

The cost saving initiatives are intended to improve the firm’s profitability
with minimal impact on revenue growth. Approximately $85 million relates to
compensation expenses associated with reduced staffing, and approximately $40
million to non-compensation expense. The cost saving initiatives include:
streamlining our 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.

Associated implementation expenses are expected to range between $110 million
and $130 million and to be primarily compensation-related. The implementation
of these initiatives proceeded according to plan during the fourth quarter of
2012, and associated expenses were $103 million in the quarter, with the
remainder expected to occur in the first half of 2013. Approximately 75% of
the implementation expenses are expected to be paid in cash.

Lazard continues to make progress toward the financial goals announced in
April 2012. As of December 31, 2012, we have achieved:

  * An awarded compensation-to-operating revenue ratio^1 of 59.4%, down from
    62.0% for 2011
  * An adjusted non-compensation expense-to-operating revenue ratio^1 of
    21.4%, approximately even with 2011.
  * An operating margin based on awarded compensation^5 of 19.2%, up from
    16.8% for 2011. We are making progress toward our operating margin target
    of 25% in 2014 based on 2012 activity levels
  * Return of capital to shareholders totaling $540 million^3, including $200
    million in surplus cash^4 one year ahead of target

We believe our financial discipline is increasing the firm’s operating
leverage, putting Lazard in a strong position to benefit from potential
revenue growth.

                                     ***

CONFERENCE CALL

Lazard will host a conference call at 8:00 a.m. EST on Thursday, February 7,
2013, to discuss the company’s financial results for the fourth quarter and
full year 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 (888) 206-4835 (U.S. and Canada) or +1 (913)
312-1447 (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 by 10:00 a.m. EST February
7, 2013, through February 21, 2013, 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 4223141.

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”, “target”, “goal” 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. 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 on our businesses and on our ability to retain our
    employees.

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.
Moreover, neither we nor any other person assumes responsibility for the
accuracy or completeness of any of these forward-looking statements. You
should not rely upon forward-looking statements as predictions of future
events. We are under no duty to update any of these forward-looking statements
to conform our prior statements to actual results or revised expectations and
we do not intend to do so.

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.
Investors can link to Lazard and its operating company websites through
www.lazard.com.

                                     ***

                        FINANCIAL ADVISORY ASSIGNMENTS

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

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

  * Carrefour in the  €2.0 billion sale of its business in Colombia to
    Cencosud
  * Hertz’s $2.3 billion acquisition of Dollar Thrifty
  * ANF Immobilier’s €786 million sale of a real estate portfolio to a
    consortium led by Foncière des Murs and to funds managed by Grosvenor
  * OPNET Technologies’ $1.0 billion sale to Riverbed
  * HiSoft Technology’s $750  million  merger of equals with VanceInfo
    Technologies to form Pactera Technology International
  * Independent Non-Executive Directors of ENRC in the company’s $550 million
    acquisition of the remaining 49.5% of Camrose Resources not already owned
    by ENRC
  * BHP Billiton’s $430 million sale of its Yeelirrie uranium deposit to
    Cameco
  * Trimble Navigation’s $335 million acquisition of TMW Systems
  * Piraeus Bank in its acquisition of Société Générale’s 99.1% stake in
    Geniki Bank
  * Oriental Trading Company’s sale to Berkshire Hathaway
  * Magnablend’s sale to Univar
  * ArrMaz Custom Chemicals on its sale to Golden Gate Capital
  * L’Oréal’s acquisition of Urban Decay
  * Synchronous Aerospace Group’s sale to Precision Castparts
  * The Rock Creek Group on the sale of a minority interest to Wells Fargo
    Asset Management
  * HOCHTIEF’s sale of a 45% interest in the Vespucio Norte Express toll 
    highway to a consortium led by Brookfield

Mergers and Acquisitions (Announced)

Among the ongoing, large, publicly announced M&A transactions and assignments
on which Lazard advised in the 2012 fourth quarter, or continued to advise, or
completed since December 31, 2012, are the following:

  * Deutsche Telekom on the $32.8 billion combination of T-Mobile and MetroPCS
  * Microsoft in its role in Dell’s $24.4 billion going-private transaction
  * 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
  * IntercontinentalExchange’s $8.2 billion acquisition of NYSE Euronext
  * Caisse des Dépôts’ €2.6 billion indirect acquisition of Silic from
    Groupama
  * Cerberus in Albertsons’ $3.6 billion acquisition of five grocery banners
    from SUPERVALU and tender offer for up to 30% of SUPERVALU’s outstanding
    public shares
  * Total’s €2.4 billion proposed sale of TIGF to a consortium
  * Ameristar Casinos’ $2.8 billion  sale to Pinnacle Entertainment
  * Permian Mud Service (parent company of Champion Technologies and
    CorsiTech) in its $2.2 billion merger with Ecolab
  * PPG Industries on the $2.1 billion merger of its commodity chemicals
    business with Georgia Gulf
  * Athene Holding in its $1.6 billion acquisition of Aviva’s U.S. annuity and
    life insurance operations
  * The Special Committee of CNH Global on Fiat Industrial’s $1.7 billion
    acquisition of the remaining shares in CNH Global that it does not already
    own
  * CH Energy Group’s $1.5 billion sale to Fortis
  * Principal Financial Group’s $1.5 billion acquisition of Cuprum
  * LNR Property's $1.05 billion sale to Starwood Property Trust and Starwood
    Capital Group
  * EQT in the exchange of its natural gas distribution business with
    SteelRiver Infrastructure Partners for $720 million and the receipt of
    assets and other consideration
  * The Special Committee of CreXus Investment Corp. in the company’s sale to
    Annaly Capital Management for an implied valuation of $1.0 billion
  * Petra Foods’ $950 million sale of its cocoa ingredients business to Barry
    Callebaut
  * Sportingbet in its £485 million proposed sale to William Hill and GVC
    Holdings
  * Unilever in the $700 million sale of its Skippy peanut butter business to
    Hormel
  * Eastman Kodak’s $525 million sale of its digital imaging patents to a
    consortium
  * Qatar Holding on its approximately 12% stake in Xstrata in connection with
    the proposed merger with Glencore International
  * Caisse des Dépôts on the reorganization of Dexia
  * EADS on the reorganization of its governance and shareholding structure
  * Jereissati Group and Renosa in the merger of Norsa, Renosa and Guararapes
  * Scailex on the sale of an interest in Partner Communications to Saban
    Capital Group
  * Hera's merger with AcegasAps

Restructuring and Debt Advisory Assignments

Restructuring and debtor or creditor advisory assignments completed during the
fourth quarter of 2012 on which Lazard advised include: Tribune Company,
NewPage Corporation and LSP Energy in connection with their Chapter 11
filings; Crest Nicholson on its refinancing; EurotaxGlass’s on its debt
restructuring; GoldenTree and other investors on the capital injection and
ownership structure simplification of BAWAG P.S.K.; Imagina Media Audiovisual
on its debt refinancing; Praktiker on the funding of its strategic and
operational restructuring program; and the senior lenders to TORM on the
company’s debt restructuring.

Notable Chapter 11 bankruptcies on which Lazard advised debtors or creditors,
or related parties, during or since the fourth 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
  * Power & Energy: A123 Systems
  * Professional/Financial Services: Ambac
  * Technology/Media/Telecom: Eastman Kodak, LightSquared

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

  * Belvédère – advising the FRN noteholder committee
  * Financial Guaranty Insurance Company (FGIC) – advisor to Weil, Gotshal &
    Manges in its capacity as counsel to the New York Liquidation Bureau
  * Mediannuaire Holding – advising the working group of first and second lien
    lenders in connection with the company’s debt restructuring
  * Munshaat – on its debt restructuring
  * National Association of Letter Carriers – in connection with the USPS’s
    restructuring efforts
  * PMI – advisor to the receiver of PMI on certain asset dispositions

                                     ***

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.

^2 2012 results exclude pre-tax charges of $25 million in the first quarter
related to staff reductions and $103 million in the fourth quarter related to
the implementation of cost saving initiatives. These include non-compensation
charges of $3 million in the first quarter and $3 million in the fourth
quarter of 2012. Comparisons to full-year 2011 also exclude an $18 million
pre-tax gain on the repurchase of our subordinated debt in 2011, and pre-tax
charges aggregating $11 million related to the write-off of an option
prepayment and a provision for a lease contract for our UK offices.

^3 In 2012 we: (i) paid $140 million to our shareholders in dividends, which
included both a special dividend and an accelerated dividend; (ii) repurchased
12.8 million shares of our Class A common stock for $355 million, at an
average price of $27.66 per share; and (iii) satisfied employee tax
obligations of $45 million in cash in lieu of share issuance upon vesting of
equity grants. Approximately 4.5 million shares of our share repurchases, at a
cost of $120 million, served to directly offset the expected potential
dilution upon vesting from our 2011 year-end equity-based compensation awards.

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

^5 Operating margin based on awarded compensation is defined as operating
revenue ($1,971 million in 2012), minus awarded compensation expense ($1,171
million in 2012), minus adjusted non-compensation expense ($421 million in
2012), divided by operating revenue.

LAZ-G

LAZARD LTD
SELECTED SUMMARY FINANCIAL INFORMATION (a)
(Non-GAAP - unaudited)
                 Three Months Ended                        % Change From
                 December      September     December      September   December
($ in thousands, 31,           30,           31,           30,         31,
except per share 2012          2012          2011          2012        2011
data)
                                                                        
Revenues:
                                                                        
Financial
Advisory
M&A and Other    $233,517      $171,417      $167,099      36%         40%
Advisory
Capital Raising  27,685        14,174        17,691        95%         56%
Strategic        261,202       185,591       184,790       41%         41%
Advisory
Restructuring    48,095        34,382        75,704        40%         (36%)
Total            309,297       219,973       260,494       41%         19%
                                                                        
Asset Management
Management fees  208,637       202,324       190,073       3%          10%
Incentive fees   26,755        10,606        5,373         NM          NM
Other            9,815         7,397         8,960         33%         10%
Total            245,207       220,327       204,406       11%         20%
                                                                        
Corporate        19,143        2,911         3,807         NM          NM
                                                                        
Operating        $573,647      $443,211      $468,707      29%         22%
revenue (b)
                                                                        
Expenses:
                                                                        
Compensation and
benefits expense $341,766      $278,070      $337,007      23%         1%
(c)
Ratio of
compensation to  59.6%         62.7%         71.9%
operating
revenue
                                                                        
Non-compensation $114,908      $95,113       $108,674      21%         6%
expense (d)
Ratio of
non-compensation 20.0%         21.5%         23.2%
to operating
revenue
                                                                        
Earnings:
                                                                        
Earnings from    $116,973      $70,028       $23,026       67%         NM
operations (e)
Operating margin 20.4%         15.8%         4.9%
(f)
                                                                        
Net income (g)   $81,627       $35,384       $1,431        NM          NM
                                                                        
Diluted net      $0.61         $0.26         $0.01         NM          NM
income per share
                                                                        
Diluted weighted 133,855,611   135,380,036   135,721,618   (1%)        (1%)
average shares
                                                                        
Effective tax    15.1%         26.7%         NM
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)
                            
                           Year Ended December 31,
                                                               
($ in thousands, except    2012                2011                % Change
per share data)
                                                                    
Revenues:
                                                                    
Financial Advisory
M&A and Other Advisory     $792,928            $700,539            13%
Capital Raising            73,403              93,888              (22%)
Strategic Advisory         866,331             794,427             9%
Restructuring              182,759             197,743             (8%)
Total                      1,049,090           992,170             6%
                                                                    
Asset Management
Management fees            806,044             818,038             (1%)
Incentive fees             43,661              26,245              66%
Other                      32,470              38,494              (16%)
Total                      882,175             882,777             -
                                                                    
Corporate                  39,551              8,922               NM
                                                                    
Operating revenue (b)      $1,970,816          $1,883,869          5%
                                                                    
Expenses:
                                                                    
Compensation and benefits  $1,217,791          $1,168,229          4%
expense (c)
Ratio of compensation to   61.8%               62.0%
operating revenue
                                                                    
Non-compensation expense   $421,023            $399,677            5%
(d)
Ratio of non-compensation  21.4%               21.2%
to operating revenue
                                                                    
Earnings:
                                                                    
Earnings from operations   $332,002            $315,963            5%
(e)
Operating margin (f)       16.8%               16.8%
                                                                    
Net income (g)             $194,907            $178,614            9%
                                                                    
Diluted net income per     $1.44               $1.31               10%
share
                                                                    
Diluted weighted average   135,116,690         137,629,525         (2%)
shares
                                                                    
Effective tax rate (h)     21.3%               20.7%
                                                                    
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
COMPENSATION AND BENEFITS - ANALYSIS
(unaudited)
($ in millions except share price)
                                                                                    
                                                                                      
                   2006       2007       2008       2009       2010       2011       2012
                                                                                      
ADJUSTED U.S. GAAP BASIS (c)
                                                                                      
Base salary and    $397.8     $456.2     $467.7     $422.6     $452.9     $506.4     $515.8
benefits
Cash incentive     470.6      562.1      224.7      404.6      472.8      372.4      367.2
compensation
Total cash
compensation and   868.4      1,018.3    692.4      827.2      925.7      878.8      883.0
benefits
Amortization of
deferred           23.0       104.8      238.3      333.4      240.5      289.4      334.8
incentive awards
Compensation and
benefits -         $891.4     $1,123.1   $930.7     $1,160.6   $1,166.2   $1,168.2   $1,217.8
Adjusted U.S. GAAP
basis (i)
                                                                                      
% of Operating     56.7%      55.7%      55.6%      71.7%      58.9%      62.0%      61.8%
Revenue
                                                                                      
                                                                                      
                                                                                      
AWARDED BASIS
                                                                                      
Total cash
compensation and   $868.4     $1,018.3   $692.4     $827.2     $925.7     $878.8     $883.0
benefits (per
above)
Deferred
year-end           203.9      336.7      351.7      239.3      292.7      282.4      272.4
incentive awards
Compensation and
benefits -
before special
deferred
incentive awards   1,072.3    1,355.0    1,044.1    1,066.5    1,218.4    1,161.2    1,155.4
Sign-on and other
special deferred   12.8       87.9       179.6      39.2       27.3       40.0       42.1
incentive awards
(j)
Year-end foreign
exchange           6.9        6.6        (9.7)      5.6        3.3        (4.6)      1.4
adjustment (k)
Total
Compensation and   1,092.0    1,449.5    1,214.0    1,111.3    1,249.0    1,196.6    1,198.9
benefits -
Notional
Adjustment for
actual/estimated   (23.8)     (35.2)     (21.7)     (17.1)     (27.8)     (28.0)     (27.4)
forfeitures (l)
Total
Compensation and   $1,068.2   $1,414.3   $1,192.3   $1,094.2   $1,221.2   $1,168.6   $1,171.5
benefits -
Awarded
                                                                                      
% of Operating
Revenue -          68.0%      70.2%      71.2%      67.6%      61.7%      62.0%      59.4%
Awarded Basis
                                                                                      
                                                                                      
                                                                                      
Memo:
    Total value
    of deferred
    equity-based
    year end
    incentive      $198.9     $332.2     $202.3     $233.8     $261.4     $192.7     TBD
    awards
                                                                                      
    Equity-based
    year end
    awards - share 3,971      8,787      6,489      6,477      5,775      6,932      TBD
    equivalents
    ('000)
    Price at       $50.08     $37.81     $31.17     $36.10     $45.26     $27.80     TBD
    issuance
                                                                                      
    Deferred
    compensation   19.1%      23.8%      29.5%      21.9%      24.0%      24.2%      23.3%
    awards ratio
    (m)
                                                                                      
    Operating      $1,571.1   $2,014.8   $1,675.1   $1,617.6   $1,978.5   $1,883.9   $1,970.8
    revenue
                                                                                      
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 Reconciliation of U.S. GAAP to Adjusted Statement of Operations and
Notes to Financial Schedules.

LAZARD LTD
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(U.S. GAAP)
                                                                     
                Three Months Ended                        % Change From
                December      September     December      September   December
                31,           30,           31,           30,         31,
($ in
thousands,      2012          2012          2011          2012        2011
except per
share data)
                                                                       
Total revenue   $580,857      $449,464      $473,109      29%         23%
Interest        (20,164)      (20,658)      (21,331)
expense
Net revenue     560,693       428,806       451,778       31%         24%
Operating
expenses:
Compensation    445,602       283,818       338,934       57%         31%
and benefits
                                                                       
Occupancy and   32,854        25,680        30,668
equipment
Marketing and
business        25,888        19,096        29,577
development
Technology and
information     23,750        21,474        22,646
services
Professional    12,859        8,514         13,929
services
Fund
administration  12,090        13,179        12,016
and outsourced
services
Amortization of
intangible      2,187         2,494         7,019
assets related
to acquisitions
Other           10,660        7,825         11,447
Subtotal        120,288       98,262        127,302       22%         (6%)
Provision
pursuant to tax -             -             429
receivable
agreement
Operating       565,890       382,080       466,665       48%         21%
expenses
                                                                       
Operating       (5,197)       46,726        (14,887)      NM          65%
income (loss)
                                                                       
Provision
(benefit) for   (1,091)       13,053        (6,764)       NM          NM
income taxes
Net income      (4,106)       33,673        (8,123)       NM          49%
(loss)
Net income
(loss)
attributable to 1,259         372           (3,330)
noncontrolling
interests
Net income
(loss)          ($5,365)      $33,301       ($4,793)      NM          (12%)
attributable to
Lazard Ltd
                                                                       
Attributable to
Lazard Ltd
Common
Stockholders:
Weighted
average shares
outstanding:
Basic           114,747,744   115,603,351   119,369,997   (1%)        (4%)
Diluted         114,747,744   135,380,036   119,369,997   (15%)       (4%)
                                                                       
Net income
(loss) per
share:
Basic           ($0.05)       $0.29         ($0.04)       NM          (25%)
Diluted         ($0.05)       $0.26         ($0.04)       NM          (25%)

LAZARD LTD
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(U.S. GAAP)
                                                                     
                                        Year Ended
                                        December 31,   December 31,
($ in thousands, except per share       2012           2011           % Change
data)
                                                                       
Total revenue                           $1,994,013     $1,919,638     4%
Interest expense                        (81,565)       (90,126)
Net revenue                             1,912,448      1,829,512      5%
Operating expenses:
Compensation and benefits               1,351,129      1,168,945      16%
                                                                       
Occupancy and equipment                 113,163        100,698
Marketing and business development      95,573         88,411
Technology and information services     86,892         83,212
Professional services                   43,958         48,324
Fund administration and outsourced      51,390         52,793
services
Amortization of intangible assets       8,359          11,915
related to acquisitions
Other                                   38,099         39,286
Subtotal                                437,434        424,639        3%
Provision pursuant to tax receivable    -              429
agreement
Operating expenses                      1,788,563      1,594,013      12%
                                                                       
Operating income                        123,885        235,499        (47%)
                                                                       
Provision for income taxes              31,100         44,940         (31%)
Net income                              92,785         190,559        (51%)
Net income attributable to              8,476          15,642
noncontrolling interests
Net income attributable to Lazard Ltd   $84,309        $174,917       (52%)
                                                                       
Attributable to Lazard Ltd Common
Stockholders:
Weighted average shares outstanding:
Basic                                   116,953,989    118,032,020    (1%)
Diluted                                 129,325,622    137,629,525    (6%)
                                                                       
Net income per share:
Basic                                   $0.72          $1.48          (51%)
Diluted                                 $0.65          $1.36          (52%)

LAZARD LTD
UNAUDITED CONDENSED CONSOLIDATED
STATEMENT OF FINANCIAL CONDITION
(U.S. GAAP)
                                                                 
                                                   December 31,   December 31,
($ in thousands)                                   2012           2011
                                                                   
ASSETS
                                                                   
Cash and cash equivalents                          $850,190       $1,003,791
Deposits with banks                                292,494        286,037
Cash deposited with clearing organizations and     65,232         75,506
other segregated cash
Receivables                                        478,043        504,455
Investments                                        414,673        378,521
Goodwill and other intangible assets               392,822        393,099
Other assets                                       493,439        440,527
                                                                   
Total Assets                                       $2,986,893     $3,081,936
                                                                   
LIABILITIES & STOCKHOLDERS' EQUITY
                                                                   
Liabilities
Deposits and other customer payables               $269,763       $288,427
Accrued compensation and benefits                  467,578        383,513
Senior debt                                        1,076,850      1,076,850
Other liabilities                                  521,162        466,290
Total liabilities                                  2,335,353      2,215,080
                                                                   
Commitments and contingencies
                                                                   
Stockholders' equity
Preferred stock, par value $.01 per share          -              -
Common stock, par value $.01 per share             1,282          1,230
Additional paid-in capital                         846,050        659,013
Retained earnings                                  182,647        258,646
Accumulated other comprehensive loss, net of tax   (110,541)      (88,364)
                                                   919,438        830,525
Class A common stock held by subsidiaries, at cost (349,782)      (104,382)
Total Lazard Ltd stockholders' equity              569,656        726,143
Noncontrolling interests                           81,884         140,713
Total stockholders' equity                         651,540        866,856
                                                                   
Total liabilities and stockholders' equity         $2,986,893     $3,081,936

LAZARD LTD
ASSETS UNDER MANAGEMENT ("AUM")
(unaudited)
($ in millions)
                                                                    
                  As of                                  Variance
                  December     September    December
                  31,          30,          31,
                  2012         2012         2011         Qtr to       YTD
                                                         Qtr
                                                                       
Equities          $138,171     $132,231     $116,362     4.5%         18.7%
Fixed Income      22,718       21,905       17,750       3.7%         28.0%
Alternative       4,600        4,753        5,349        (3.2%)       (14.0%)
Investments
Private Equity    1,398        1,428        1,486        (2.1%)       (5.9%)
Cash              173          94           92           84.0%        88.0%
Total AUM         $167,060     $160,411     $141,039     4.1%         18.4%
                                                                       
                                                                       
                                                                       
                  Three Months Ended                     Year Ended December
                  December 31,                           31,
                  2012         2011                      2012         2011
                                                                       
AUM - Beginning   $160,411     $135,812                  $141,039     $155,337
of Period
                                                                       
Net Flows         (47)         (294)                     2,741        (1,048)
Market and
foreign exchange
appreciation      6,696        5,521                     23,280       (13,250)
(depreciation)
                                                                       
AUM - End of      $167,060     $141,039                  $167,060     $141,039
Period
                                                                       
Average AUM       $163,816     $140,136                  $155,549     $152,072
                                                                       
% Change in       16.9%                                  2.3%
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                 Year Ended
                  December    September   December   December     December
                  31,         30,         31,        31,          31,
($ in thousands,
except per share  2012        2012        2011       2012         2011
data)
                                                                              
Operating Revenue
Net revenue -     $560,693    $428,806    $451,778   $1,912,448   $1,829,512
U.S. GAAP Basis
                                                                              
Adjustments:
Gain on
repurchase of     -           -           -          -            (18,171)
subordinated debt
Revenue related
to noncontrolling (3,963)     (1,193)     (2,351)    (14,104)     (16,696)
interests (n)
Loss (gain)
related to Lazard
Fund Interests    (2,918)     (4,728)     (937)      (7,557)      3,024
("LFI") and other
similar
arrangements
Interest expense  19,835      20,326      20,217     80,029       86,200
                                                                              
Operating
revenue, as       $573,647    $443,211    $468,707   $1,970,816   $1,883,869
adjusted
                                                                              
Compensation & Benefits Expense
Compensation &
benefits expense  $445,602    $283,818    $338,934   $1,351,129   $1,168,945
- U.S. GAAP Basis
                                                                              
Adjustments:
Charges
pertaining to     (99,987)    -           -          (99,987)     -
cost savings
initiatives (Q4)
Charges
pertaining to     -           -           -          (21,754)     -
staff reductions
(Q1)
(Charges) credits
pertaining to LFI
and other similar (2,918)     (4,728)     (937)      (7,557)      3,024
arrangements
compensation
liability
Compensation
related to        (931)       (1,020)     (990)      (4,040)      (3,740)
noncontrolling
interests (n)
                                                                              
Compensation &
benefits expense, $341,766    $278,070    $337,007   $1,217,791   $1,168,229
as adjusted
                                                                              
Non-Compensation Expense
Non-compensation
expense -         $120,288    $98,262     $127,302   $437,434     $424,639
Subtotal - U.S.
GAAP Basis
                                                                              
Adjustments:
Charges
pertaining to     (2,589)     -           -          (2,589)      -
cost savings
initiatives (Q4)
Charges
pertaining to     -           -           -          (2,905)      -
staff reductions
(Q1)
Write-off of
Lazard
Alternative       -           -           (5,500)    -            (5,500)
Investment
Holdings option
prepayment
Provision for
onerous lease     -           -           (5,539)    -            (5,539)
contract for UK
facility
Amortization of
intangible assets (2,187)     (2,494)     (7,019)    (8,359)      (11,915)
related to
acquisitions
Non-compensation
expense related   (604)       (655)       (570)      (2,558)      (2,008)
to noncontrolling
interests (n)
                                                                              
Non-compensation
expense, as       $114,908    $95,113     $108,674   $421,023     $399,677
adjusted
                                                                              
                                                                              
Earnings From Operations
Operating Income
(loss) - U.S.     ($5,197)    $46,726     ($14,887)  $123,885     $235,499
GAAP Basis
                                                                              
Other
adjustments:
Charges
pertaining to     102,576     -           -          102,576      -
cost savings
initiatives (Q4)
Charges
pertaining to     -           -           -          24,659       -
staff reductions
(Q1)
Gain on
repurchase of     -           -           -          -            (18,171)
subordinated debt
Write-off of
Lazard
Alternative       -           -           5,500      -            5,500
Investment
Holdings option
prepayment
Provision for
onerous lease     -           -           5,539      -            5,539
contract for UK
facility
Revenue related
to noncontrolling (3,963)     (1,193)     (2,351)    (14,104)     (16,696)
interests (n)
Interest expense  19,835      20,326      20,217     80,029       86,200
Expenses related
to noncontrolling 1,535       1,675       1,560      6,598        5,748
interests (n)
Amortization of
intangible assets 2,187       2,494       7,019      8,359        11,915
related to
acquisitions
Adjustment
related to the
provision         -           -           429        -            429
pursuant to the
tax receivable
agreement ("TRA")
                                                                              
Earnings from
operations, as    $116,973    $70,028     $23,026    $332,002     $315,963
adjusted
                                                                              
Net Income attributable to Lazard Ltd
Net income (loss)
attributable to   ($5,365)    $33,301     ($4,793)   $84,309      $174,917
Lazard Ltd - U.S.
GAAP Basis
Adjustments:
Charges
pertaining to     102,576     -           -          102,576      -
cost savings
initiatives (Q4)
Charges
pertaining to     -           -           -          24,659       -
staff reductions
(Q1)
Gain on
repurchase of     -           -           -          -            (18,171)
subordinated debt
Write-off of
Lazard
Alternative       -           -           5,500      -            5,500
Investment
Holdings option
prepayment
Provision for
onerous lease     -           -           5,539      -            5,539
contract for UK
facility
Tax (benefits)
allocated to      (15,542)    140         (4,634)    (21,108)     -
adjustments
Amount
attributable to   (1,340)     (49)        (390)      (2,449)      411
LAZ-MD Holdings
                                                                              
Adjustment for
full exchange of
exchangeable
interests (o):
Tax adjustment    (200)       5           (190)      (643)        (1,135)
for full exchange
Amount
attributable to   1,498       1,987       399        7,563        11,553
LAZ-MD Holdings
                                                                              
Net income, as    $81,627     $35,384     $1,431     $194,907     $178,614
adjusted
                                                                              
Diluted net
income (loss) per
share:
U.S. GAAP Basis   ($0.05)     $0.26       ($0.04)    $0.65        $1.36
Non-GAAP Basis,   $0.61       $0.26       $0.01      $1.44        $1.31
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
(a) presenting results and measures on an 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)
                                                                                                           
    A non-GAAP measure which 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,
(b) (ii) revenues related to non-controlling interests (see (n) below), (iii) interest expense primarily
    related to corporate financing activities, and (iv) for the twelve month period ended December 31,
    2011, excludes the gain on repurchase of the Company's subordinated debt. (See Reconciliation of U.S.
    GAAP to Selected Summary Financial Information)
                                                                                                           
    A non-GAAP measure which 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) compensation and benefits related to noncontrolling interests (see
(c) (n) below), (iii) for the three and twelve month periods ended December 31, 2012, charges pertaining
    to the implementation of cost-savings initiatives (see (g) below), and (iv) for the twelve month
    period ended December 31, 2012, certain first quarter charges pertaining to staff reductions (see (g)
    below). (See Reconciliation of U.S. GAAP to Selected Summary Financial Information)
                                                                                                           
    A non-GAAP measure which excludes (i) amortization of intangible assets related to acquisitions, (ii)
    expenses related to noncontrolling interests (see (n) below), (iii) for the three and twelve month
    periods ended December 31, 2012, charges pertaining to the implementation of cost-savings initiatives
    (see (g) below), and (iv) for the twelve month period ended December 31, 2012, certain first quarter
(d) charges pertaining to staff reductions (see (g) below). The three and twelve month periods for 2011
    are also adjusted to exclude a provision for an onerous lease contract for the Company's leased
    facility in the U.K. and a charge related to the write-off of a partial prepayment of the Company's
    option to acquire the fund management activities of Lazard Alternative Investment Holdings. (See
    Reconciliation of U.S. GAAP to Selected Summary Financial Information)
                                                                                                           
    A non-GAAP measure which 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 (n) below), (iv) for the three and twelve month periods
    ended December 31, 2012, charges pertaining to the implementation of cost-savings initiatives (see
    (g) below), (v) for the twelve month period ended December 31, 2012, certain first quarter charges
(e) pertaining to staff reductions (see (g) below), (vi) for the twelve month period ended December 31,
    2011, gain on repurchase of the Company's subordinated debt, (vii) for the three and twelve month
    periods for 2011 a provision for an onerous lease contract for the Company's leased facility in the
    U.K. and a charge related to the write-off of a partial prepayment of the Company's option to acquire
    the fund management activities of Lazard Alternative Investment Holdings, and (viii) for the three
    and twelve month periods ended December 31, 2011, a provision pursuant to the tax receivable
    agreement of $429. (See Reconciliation of U.S. GAAP to Selected Summary Financial Information)
                                                                                                           
(f) Represents earnings from operations as a percentage of operating revenue, and is a non-GAAP measure.
    (See Reconciliation of U.S. GAAP to Selected Summary Financial Information)
                                                                                                           
    A non-GAAP measure which is adjusted to reflect the full conversion of outstanding exchangeable
    interests held by members of LAZ-MD Holdings and excludes (i) for the three and twelve month periods
    ended December 31, 2012, charges pertaining to cost-savings initiatives including severance benefit
    payments, acceleration of unrecognized amortization of deferred incentive compensation previously
    granted to individuals terminated and other non-compensation related costs, net of applicable tax
    benefits, (ii) for the twelve month period ended December 31, 2012, certain first quarter charges
(g) pertaining to staff reductions including severance, benefit payments and acceleration of unrecognized
    amortization of deferred incentive compensation previously granted to individuals terminated, net of
    applicable tax benefits, (iii) for the twelve month period ended December 31, 2011, excludes gain on
    repurchase of the Company's subordinated debt, net of applicable tax, (iv) for the three and twelve
    month periods ended December 31, 2011, a provision for an onerous lease contract for the Company's
    leased facility in the U.K. and a charge related to the write-off of a partial prepayment of the
    Company's option to acquire the fund management activities of Lazard Alternative Investment Holdings.
    (See Reconciliation of U.S. GAAP to Selected Summary Financial Information)
                                                                                                           
    Effective tax rate is a non-GAAP measure which is computed based on a quotient, the numerator of
    which is the provision (benefit) for income taxes of $14,572, $12,908 and ($1,511) for the three
    month periods ended December 31, 2012, September 30, 2012 and December 31, 2011, respectively, and
    $52,772 and $46,504 for the twelve month periods ended December 31, 2012 and 2011, respectively, and
    the denominator of which is pre-tax income (loss) of $97,300, $46,726 and ($3,419) for the three
(h) month periods ended December 31, 2012, September 30, 2012 and December 31, 2011, respectively, and
    $251,041 and $228,796 for the twelve month periods ended December 31, 2012 and 2011, respectively,
    exclusive of net income (loss) attributable to noncontrolling interests of $1,101, ($1,566) and
    ($3,339) for the three month periods ended December 31, 2012, September 30, 2012 and December 31,
    2011, respectively, and $3,362 and $3,678 for the twelve month periods ended December 31, 2012 and
    2011, respectively.
                                                                                                           
(i) A reconciliation of U.S. GAAP compensation and benefits expense to compensation and benefits expense,
    as adjusted:
                   Year Ended December 31,
    ($ in          2006       2007         2008         2009         2010         2011         2012
    thousands)
                                                                                                           
    Compensation &
    benefits       $891,421   $1,123,068   $1,128,253   $1,309,240   $1,194,168   $1,168,945   $1,351,129
    expense - U.S.
    GAAP Basis
                                                                                                           
    Adjustments:
    Charges
    pertaining to
    cost savings   -          -            -            -            -            -            (99,987)
    initiatives
    (Q4)
    Charges
    pertaining to
    staff          -          -            -            -            -            -            (21,754)
    reductions
    (Q1)
    (Charges)
    credits
    pertaining to
    LFI and other  -          -            -            -            -            3,024        (7,557)
    similar
    arrangements
    comp.
    liability
    Acceleration
    of restricted
    stock unit
    vesting        -          -            -            -            (24,860)     -            -
    related to
    retirement
    policy change
    Acceleration
    of unamortized -          -            -            (86,514)     -            -            -
    restricted
    stock units
    Acceleration
    of unamortized -          -            -            (60,512)     -            -            -
    deferred cash
    awards
    LAM Equity     -          -            (197,550)    -            -            -            -
    Charge
    Compensation
    related to     -          -            -            (1,657)      (3,098)      (3,740)      (4,040)
    noncontrolling
    interests (n)
                                                                                                           
    Compensation &
    benefits       $891,421   $1,123,068   $930,703     $1,160,557   $1,166,210   $1,168,229   $1,217,791
    expense, as
    adjusted
                                                                                                           
                                                                                                           
LAZARD LTD
Notes to Financial Schedules (continued)
                                                                                                           
(j) Special deferred incentive awards are granted outside the year end compensation process and include
    grants to new hires.
                                                                                                           
(k) Represents an adjustment to year end foreign exchange spot rate from full year average rate for year
    end incentive compensation awards.
                                                                                                           
    Under U.S. GAAP, an estimate is made for future forfeitures of the deferred portion of such awards.
    This estimate is based on both historical experience and future expectations. The result reflects the
(l) cost associated with awards that are expected to vest. This calculation is undertaken in order to
    present awarded compensation on a similar basis to GAAP compensation. Amounts for 2007-2009 represent
    actual forfeiture experience. The 2010-2012 amounts represent estimated forfeitures.
                                                                                                           
    Deferred compensation awards ratio is year end incentive awards excluding special incentive awards
(m) that are outside of the year-end compensation process such as sign-on and retention awards, divided
    by total awarded compensation.
                                                                                                           
(n) Noncontrolling interests include revenue and expenses principally related 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
(o) Group common membership interests and an adjustment for Lazard Ltd entity-level taxes to affect a
    full exchange of interests and excluding the adjustments noted in (g) above.
                                                                                                           
NM  Not meaningful
                                                                                                           
TBD To be
    determined

Contact:

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