Lazard Ltd Reports Full-Year and Fourth-Quarter 2011 Results

Highlights

• Net income per share, as adjusted¹, was $1.31 (diluted) for the year ended December 31, 2011, and $0.01 per share (diluted) for the fourth quarter.
• Quarterly dividend to increase 25% to $0.20 per share in April 2012, following 28% increase in 2011.
• Net income primarily reflected a decline in Financial Advisory revenue in the 2011 fourth quarter and the fact that we maintained control on compensation deferrals.
• Financial Advisory operating revenue was $992 million for 2011, 11% lower than 2010. Fourth-quarter Financial Advisory operating revenue increased 3% from the third quarter but declined 26% from the strong fourth quarter of 2010.
• Asset Management achieved record full-year operating revenue of $883 million for 2011, 6% higher than 2010. Management fees reached a record high of $818 million, 14% higher than 2010. These positive results primarily reflect an 11% increase in 2011 average AUM and favorable changes in the asset mix.
• Firm wide, 2011 discretionary bonuses were reduced by approximately 20%. Awarded compensation² decreased in line with revenue decline, despite significant investment in new hires in both of our businesses.
• During 2011, we repurchased $206 million of shares of Lazard common stock and retired $150 million of convertible subordinated debt.

Lazard Ltd (NYSE: LAZ):

¹ A non-U.S. GAAP measure. See attached financial schedules and related notes for a detailed explanation of adjustments to comparable 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 Awarded compensation is defined as cash compensation and benefits plus deferred incentive compensation in respect to the applicable year, net of estimated forfeitures, and is a non-GAAP measure.

Lazard Ltd (NYSE: LAZ) today reported operating revenue¹ of $1,884 million for the year ended December 31, 2011. Net income, as adjusted¹, was $179 million, or $1.31 per share (diluted), for the full year. Fourth quarter operating revenue¹ was $469 million. Net income, as adjusted¹ was $1.4 million, or $0.01 per share (diluted), for the fourth quarter of 2011.

Net income on a U.S. GAAP basis was $175 million, or $1.36 per share (diluted), for the full year of 2011 and was a loss of $5 million, or $0.04 per share, for the fourth quarter of 2011.

"The financial markets were difficult in 2011, and Lazard had a challenging fourth quarter, yet our franchise is better positioned today than ever before, with significant operating leverage in both our businesses, as macroeconomic conditions improve," said Kenneth M. Jacobs, Chairman and Chief Executive of Lazard. "We enter 2012 with a broad and deep platform, the best people, and an unrivaled network of relationships with corporations, governments and investing institutions around the world."

"We achieved record revenue through the third quarter of 2011 but in the fourth quarter we experienced a decline in Financial Advisory revenue and a slowdown in Asset Management, primarily caused by lower performance fees," said Mr. Jacobs. "The decline in revenues, combined with our discipline on compensation deferrals, led to a drop in our earnings in the fourth quarter."

"As the leading global independent advisor, our strategic advisory business is poised to benefit from current market trends," said Mr. Jacobs. "Multinational corporations have limited opportunities for organic growth in the developed world. Yet they have strong balance sheets, record amounts of cash, and financing is available. Emerging market champions are also looking for opportunities in the developed world. As a result, we expect to see more cross-border deals."

"Asset Management achieved record full-year operating revenue, primarily driven by a 14% increase in management fees. Our investment platforms have shown strong relative performance," said Mr. Jacobs. "The outlook for Asset Management is excellent. Building from a position of strength, we are adding new capabilities and extending our franchise across a broad spectrum."

"We reduced awarded compensation despite the significant investment in new hires in both of our businesses during the year," said Matthieu Bucaille, Chief Financial Officer of Lazard. "To accomplish this, we significantly reduced discretionary bonuses. Additionally, we maintained discipline on deferrals, which we believe will build shareholder value by driving down future compensation costs and increasing our flexibility to recruit and retain employees."

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, Capital Markets, Private Funds and Other Advisory businesses.

Full Year

Financial Advisory operating revenue was $992 million for 2011, 11% lower than 2010, but with consecutive quarterly growth over the course of the year.

During 2011, we reinforced our Financial Advisory franchise in developed markets, building in growth areas such as Capital Structure and Debt Advisory, and Sovereign Advisory. We bolstered industry sectors with senior hires in Financial Institutions, Consumer and Chemicals. We continued to expand in developing markets, including China and Latin America.

Strategic Advisory operating revenue, including M&A, Sovereign, Capital Markets, Private Funds and Other Advisory businesses, was $794 million for 2011, 4% lower than 2010. The lower revenues for 2011 are primarily due to a general slowdown of activity, particularly in the fourth quarter.

Restructuring operating revenue was $198 million for 2011, 33% lower than 2010, reflecting the continuing cyclical decline of the industry-wide restructuring business for the year. Lazard was ranked number one in U.S. completed and announced restructurings in 2011 and number one in worldwide announced restructurings by value.*

During 2011, 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 advised on three of the ten largest M&A transactions announced in 2011*, including: Medco Health Solutions in its $29 billion merger with Express Scripts; Progress Energy's $26 billion merger with Duke Energy; and Google's $12.5 billion acquisition of Motorola Mobility. Recently announced M&A transactions or assignments include: Caisse des Depots' €2.6 billion indirect acquisition of Silic from Groupama; Skandia Liv's SEK 22.5 billion acquisition of Skandia AB; and European Goldfields' C$2.5 billion sale to Eldorado Gold.

Please see a more complete list of announced M&A transactions on page ten of this release.

Our Sovereign Advisory business was active with assignments that included advising the government of Greece, Kazakh-owned BTA Bank, and the U.S. Treasury with respect to General Motors.

* Source: Thomson Reuters

We have also been involved in many of the most notable recent restructurings, such as Nortel Networks, including the$4.5 billion sale of its patent portfolio, Eastman Kodak, the creditors of Hostess Brands, and the Allied Pilots Association regarding American Airlines' Chapter 11 bankruptcy proceedings.

Fourth Quarter

Financial Advisory operating revenue was $260 million for the fourth quarter of 2011, 26% lower than the fourth quarter of 2010.

Strategic Advisory operating revenue, including M&A, Sovereign, Capital Markets, Private Funds and Other Advisory businesses, was $185 million for the fourth quarter of 2011, a 39% decrease compared to its strong performance in the fourth quarter of 2010, primarily reflecting the general slowdown of activity during the 2011 fourth quarter.

Restructuring operating revenue was $76 million for the fourth quarter of 2011, 58% higher than the fourth quarter of 2010. The increase reflects the uneven timing of closings, including sales of certain large distressed assets in the 2011 fourth quarter.

Among the major M&A transactions or assignments that were completed during the fourth quarter of 2011 were the following: Skype's $8.5 billion sale to Microsoft; The Johnson Family in the$4.3 billion sale of Diversey to Sealed Air; ITT's separation into three independent, publicly traded companies; and The Board of Pharmaceutical Product Development in its $3.9 billion sale to The Carlyle Group and Hellman & Friedman.

Please see a more complete list of M&A transactions that closed in the fourth quarter of 2011 on page nine of this release.

Asset Management

Full Year

Asset Management operating revenue achieved a full-year record of $883 million for 2011, 6% higher than 2010.

In 2011, we continued to expand our existing Asset Management platform organically. In addition, we also launched new strategies in emerging markets, global equities, real estate and fixed income.

Management fees were a full-year record of $818 million for 2011, 14% higher than 2010. The increase in management fees primarily reflected a higher level of average assets under management and favorable changes in our asset mix. Incentive fees were $26 million for 2011, 70% lower than 2010, in difficult market conditions.

As of December 31, 2011, assets under management were $141 billion, and 2011 average assets under management were $152 billion, 11% above 2010. Asset Management had net outflows of $1.0 billion in 2011. As of January 31, 2012, assets under management were approximately $150 billion.

At the end of 2011, we had more than 20 strategies with over $1.5 billion in assets under management. Our client mix remained broadly diversified by investment strategy and geography, with 53% of clients in North America, 32% in Europe, and 15% in the Asia-Pacific region.

Fourth Quarter

Asset Management operating revenue was $204 million for the fourth quarter of 2011, 6% lower than the third quarter of 2011, and 20% lower than the fourth quarter of 2010. Management fees were $190 million, 5% lower than in the third quarter of 2011, and 6% lower than the fourth quarter of 2010. Incentive fees were $5 million, compared to $44 million in the fourth quarter of 2010, primarily reflecting the decline in performance fees in our alternative investments.

Average assets under management in the fourth quarter of 2011 were $140 billion, 6% lower than the third quarter of 2011. Net outflows for the quarter were $0.3 billion, but Asset Management continued to attract additional funding in the fourth quarter from a diverse group of institutions.

OPERATING EXPENSES

Compensation and Benefits

In managing compensation expense, we focus on awarded compensation (cash compensation and benefits plus deferred incentive compensation with respect to the applicable year). We believe 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 managing our business using awarded compensation with a disciplined deferral policy will lower future compensation costs, increase our flexibility in the future and build shareholder value over time.

Adjusted GAAP compensation and benefits expense¹ for the full year of 2011 was $1,168 million compared to full-year 2010 expense of $1,166 million, on the same basis. When including the special charge¹ in 2010, compensation and benefits expense was $1,191 million. The 2011 deferred compensation award ratio remained at 23.5%, a similar level to recent years.

The ratio of adjusted GAAP compensation expense¹ to operating revenue was 62.0% for the full year of 2011, compared to 58.9% in 2010 on the same basis, and 60.2%, when including the special charge. The 2011 compensation ratio was primarily impacted by the decline in revenues in the fourth quarter, maintaining discipline on current-year deferrals and an increase in amortization of prior years' deferred compensation. Included in the 2011 compensation expense is amortization of deferrals of $70 million relating to 2007 and 2008 grants.

Firm wide, 2011 discretionary bonuses were reduced by approximately 20%. Our 2011 awarded compensation² ratio was 61.7%, flat vs. our 2010 ratio of 61.5%. Overall awarded compensation² decreased from $1,217 million in 2010 to $1,163 million in 2011, in line with the 5% decline of our operating revenues.

Over the course of the year, we made significant investments in both of our businesses. These investments are reflected in our awarded compensation² expense. In aggregate, our 2011 awarded compensation² not only reflects the impact of our revenue decline but also the investments made over the course of the year.

During the first quarter of 2012, we expect to incur expenses of approximately $25 -30 million, associated with the year-end process.

Our goal remains to grow annual awarded compensation expense at a slower rate than revenue growth. We are committed to achieving a compensation-to-revenue ratio over the cycle in the mid- to high-50s percentage range on both an awarded and adjusted GAAP basis¹ with discipline on deferrals.

Please see additional information relating to the trend of Lazard's compensation on page 13 of this release.

Non-Compensation Expense

Non-compensation expense¹ was $400 million for 2011, 9% higher than the 2010 non-compensation expense of $368 million. The increase was attributable primarily to: i) costs associated with investments in our business, initiated in the first half of the year, such as technology, occupancy-related costs, and recruitment, ii) higher activity levels, primarily in Asset Management, and iii) the weakening of the U.S. dollar versus foreign currencies on average during the year. The non-compensation expense¹ ratio for 2011 was 21%, compared to 19% in 2010.

TAXES

The provision for taxes, on an adjusted basis¹, was $47 million for 2011, compared to $70 million for 2010. The effective tax rate on the same basis for the full year of 2011 was 21%, compared to 20% in 2010.

CAPITAL MANAGEMENT AND BALANCE SHEET

Our primary capital management goals include returning excess cash to shareholders through share repurchases and dividends, managing debt and limiting the amount of capital employed in our business.

In April 2012, we plan to increase the quarterly dividend by 25%, to $0.20 per share. In April 2011, Lazard increased the quarterly dividend on its outstanding Class A common stock by 28% to $0.16 per share.

During the year, we repurchased approximately 6.2 million shares of our Class A common stock and exchangeable interests, for approximately $206 million. These repurchases more than offset the potential dilution of equity awards that were granted in February 2011 at a weighted average price of $45 per share. Our remaining share repurchase authorization, which expires December 31, 2013, was $212 million as of December 31, 2011.

In July 2011, we repurchased $150 million of subordinated notes at a discount. The benefit of the discount is not reflected in Lazard's net income per share, on an as adjusted basis¹. The repurchase was funded from available cash on hand.

Lazard's financial position remains strong and low risk with approximately $1.0 billion in cash and cash equivalents at December 31, 2011, the majority of which is invested in U.S. Government and agency money market funds. Total stockholders' equity related to Lazard's interests was $726 million.

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.

CONFERENCE CALL

Kenneth M. Jacobs, Chairman and Chief Executive Officer, and Matthieu Bucaille, Chief Financial Officer, will host a conference call today at 8:00 am EST to discuss the company's financial results for the fourth quarter and full year of 2011. The conference call can be accessed via a live audio web cast available through Lazard's Investor Relations website at www.lazard.com, or by dialing 1 (877) 852-6583 (U.S. and Canada) or +1 (719) 325-4926 (outside of the U.S. and Canada), 10 minutes prior to the start of the conference call.

A replay of the conference call will be available beginning today at 11:00 a.m. EST, through February 21, 2012, via the Lazard Investor Relations website, or by dialing 1 (888) 203-1112 (for the U.S. and Canada) or +1 (719) 457-0820 (outside of the U.S. and Canada). The replay access code is 4948230.

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. 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 TRANSACTIONS AND ADVISORY ASSIGNMENTS

Mergers and Acquisitions (Completed in the fourth quarter of 2011)

Among the large, publicly announced M&A Advisory transactions or assignments completed during the fourth quarter of 2011 on which Lazard advised were the following:

• Skype's $8.5 billion sale to Microsoft
• The Johnson Family in the$4.3 billion sale of Diversey to Sealed Air
• The Board of Directors of Pharmaceutical Product Development in its$3.9 billion sale to The Carlyle Group and Hellman & Friedman
• The Royal Bank of Scotland Group's structured sale of a £1.4 billion UK commercial real estate loan portfolio to Blackstone
• Etex Group's €1 billion acquisition of Lafarge's plasterboard business in Europe and Latin America
• Blackstone Real Estate Partners' $1.1 billion acquisition of suburban office properties from Duke Realty
• Fluxys G's €922 million acquisition of Eni's interests in TENP and Transitgas pipelines
• Miraca's $725 million acquisition of Caris Life Sciences' anatomic pathology business
• The Special Committee of the Board of Directors of Harbin Electric in its$722 millionsale to Tech Full Electric Company
• Eurazeo's €418 million investment for a 45% stake in Moncler
• ITT's separation into three independent, publicly traded companies
• BASF's joint venture with INEOS to create Styrolution
• Multi-Chem's sale to Halliburton
• Consolidated Precision Products' sale to Warburg Pincus
• L'Oreal's acquisition of Pacific Bioscience Laboratories
• HgCapital's sale of Mondo Minerals to Advent International

Mergers and Acquisitions (Announced)

Among the ongoing, large, publicly announced M&A transactions and assignments on which Lazard advised in the 2011 fourth quarter, continued to advise, or completed since December 31, 2011, are the following:

• Medco Health Solutions in its $29 billion merger with Express Scripts
• Progress Energy's $26 billion merger with Duke Energy
• Northeast Utilities' $17.5 billion merger with NSTAR
• Google's $12.5 billion acquisition of Motorola Mobility
• Caisse des Depots' €2.6 billion acquisition of Silic from Groupama and €300 million investment in a Groupama subsidiary
• Skandia Liv's SEK 22.5 billion acquisition of Skandia AB from Old Mutual
• The Special Committee of Independent Directors of the Board of Delphi FinancialGroup in its $2.7 billion sale to Tokio Marine
• European Goldfields' C$2.5 billion sale to Eldorado Gold
• France Telecom-Orange's €1.6 billion sale of Orange Switzerland to Apax Partners
• Special Committee of the Board of Directors of 99 Cents Only Stores in its $1.6 billion sale to Ares Management, Canada Pension Plan Investment Board and Gold/Schiffer Family
• Wind Telecom's $1.5 billion demerger of OTMT
• Gloucester Coal in theA$2.1 billion merger proposal made by Yanzhou Coal and Yancoal Australia
• Sberbank's $1 billion acquisition of Troika Dialog
• The Independent Non-Executive Directors of Eurasian Natural Resources Corporation on the related party transaction to acquire 75% of Shubarkol Komir JSC for a purchase price of up to $650 million
• European Goldfields' $600 million senior secured loan facility with warrants with Qatar Holding and $150 million unsecured loan notes with warrants offered to existing shareholders
• Central Vermont Public Service's $702 million sale to Gaz Métro
• Tyco's plan to separate into three independent, publicly traded companies
• Caisse des Depots on the reorganization of Dexia
• Edison in its negotiations with EDF and A2A regarding the disposal of Edipower and the restructuring of its shareholdings
• Azur Pharma's merger with Jazz Pharmaceuticals

Restructuring and Debt Advisory Assignments

Restructuring and debt advisory assignments completed during the fourth quarter of 2011 on which Lazard advised include in-court Chapter 11 bankruptcies for Caribe Media, Local Insight Media, Innkeepers USA Trust and Premier Trailer Leasing, OPTI Canada in connection with its CCAA proceedings and its $2.1 billion sale to CNOOC Limited, as well as Graceway Pharmaceuticals in connection with its Section 363 asset sale, Centro Properties Group on the restructuring of its Australian assets, Energy Alloys in connection with the restructuring of its capital structure, Westgate Resorts on its debt restructuring and related transactions, and Sacyr Vallehermoso on the refinancing of its Repsol margin loan of €4.9 billion, including the €2.6 billion divestiture of its stake in Repsol YPF to Repsol.

Notable Chapter 11 bankruptcies, on which Lazard advised debtors, creditors, or related parties, during or since the fourth quarter of 2011, are:

• Airlines: Allied Pilots Association with respect to American Airlines
• Consumer/Food: The Great Atlantic & Pacific Tea Co. (A&P), Hostess Brands
• Gaming, Entertainment and Hospitality: Indianapolis Downs, MSR Resorts, the Los Angeles Dodgers
• Shipping: General Maritime
• Paper and Packaging: New Page Corporation,White Birch Paper Company
• Power & Energy: Dynegy
• Professional/Financial Services: Ambac, Lehman Brothers (including the approximately $1.4 billion monetization of its equity interests in Neuberger Berman Group)
• Technology/Media/Telecom: Eastman Kodak, Nortel Networks (including the $4.5 billion sale of its patent portfolio to a consortium completed in the 2011 fourth quarter), Tribune Company

Among other publicly announced restructuring and debt advisory assignments on which Lazard has advised debtors, creditors, or related parties, during or since the fourth quarter of 2011, are:

• AfriSam – advising the senior secured noteholders on the company's debt restructuring
• Belvédère – advising the FRN noteholder committee
• Eagle Holdings on the restructuring of its Gemini real estate assets
• Eircom – advising the majority shareholder on the company's debt restructuring
• Empresas La Polar on its debt restructuring activities
• National Association of Letter Carriers in connection with the USPS's restructuring efforts
• Quiznos on its debt restructuring activities
• Seat Pagine Gialle – advising the committee of junior noteholders on the company's restructuring
• Spanish Broadcasting on the refinancing of its debt
• TBS International on its debt restructuring activities

LAZ-G

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.

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.

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.

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.

Contacts:

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