Business Wire | Oct 29, 2020 06:49AM EDT

Lazard Ltd Reports Third-quarter and Nine-month 2020 Results

Oct. 29, 2020

NEW YORK--(BUSINESS WIRE)--Oct. 29, 2020--Lazard Ltd (NYSE: LAZ) today reported operating revenue1 of $569 million for the quarter ended September 30, 2020. Net income, as adjusted2, was $76 million, or $0.67 per share (diluted) for the quarter. On a U.S. GAAP basis, third-quarter 2020 net income was $75 million, or $0.66 per share (diluted).

For the first nine months of 2020, net income, as adjusted, was $218 million, or $1.92 per share (diluted). On a U.S. GAAP basis, net income for the first nine months was $213 million, or $1.88 per share (diluted).

"We are performing well in a volatile environment, with momentum across our businesses," said Kenneth M. Jacobs, Chairman and Chief Executive Officer of Lazard. "Our services are in demand around the world as our clients seek expert advice and solutions in a period of unprecedented change."

($ in millions, except Quarter Ended Nine Months Endedper share data and AUM) Sept. 30, Sept. 30,

2020 2019 %'20-'19 2020 2019 %'20-'19

Net Income

US GAAP $75 $47 61% $213 $210 1%

Per share, diluted $0.66 $0.40 65% $1.88 $1.77 6%

Adjusted^2 $76 $88 (14)% $218 $280 (22)%

Per share, diluted $0.67 $0.76 (12)% $1.92 $2.37 (19)%

Operating Revenue^1

Total operating revenue $569 $588 (3)% $1,675 $1,838 (9)%

Financial Advisory $307 $304 1% $895 $963 (7)%

Asset Management $261 $283 (8)% $775 $858 (10)%

AUM ($ in billions)

Period End $228 $231 (1)%

Average $226 $234 (3)% $219 $233 (6)%

Note: Endnotes are on page 6 of this release. A reconciliation of U.S. GAAP to adjusted GAAP is on pages 13-14.

OPERATING REVENUE

Operating revenue1 was $569 million for the third quarter of 2020, and $1,675 million for the first nine months of 2020, down 3% and 9% from the respective 2019 periods.

Financial Advisory

Our Financial Advisory results include M&A Advisory, Capital Advisory, Capital Raising, Restructuring, Shareholder Advisory, Sovereign Advisory, and other strategic advisory work for clients.

For the third quarter of 2020, Financial Advisory operating revenue was $307 million, 1% higher than the third quarter of 2019. These results reflected increasing M&A and Restructuring activity.

For the first nine months of 2020, Financial Advisory operating revenue was $895 million, 7% lower than the first nine months of 2019.

During and since the third quarter of 2020, Lazard has been engaged in significant and complex M&A transactions and other advisory assignments globally, including the following (clients are in italics): Altice Europe in the $45.1 billion take-private offer by Patrick Drahi; Gilead's $21 billion acquisition of Immunomedics; Teladoc Health's $18.5 billion merger with Livongo; AVEVA's $5 billion acquisition of OSIsoft; El Paso Electric's $4.3 billion sale to Infrastructure Investments Fund; Iliad's $4.3 billion acquisition of Play; ENGIE's (euro)3.4 billion sale of a 29.9% stake in Suez to Veolia; MassMutual's $3.4 billion sale of its retirement plan business to Empower Retirement; Aimmune's $2.6 billion sale to Nestl Health Science; ServiceMaster's $1.6 billion sale of its ServiceMaster Brands franchise business to Roark Capital; Siemens on the spin-off of Siemens Energy; and IBM on the separation of its Managed Infrastructure Services unit.

Lazard has one of the world's preeminent restructuring practices, with a long track record of successfully advising businesses and governments. During and since the third quarter of 2020, we have been engaged in a broad range of highly visible and complex restructuring and debt advisory assignments for debtors or creditors, including roles involving: 24 Hour Fitness; Abengoa; Diamond Offshore Drilling; FTS International; Gavilan Resources; Hi-Crush; J.C. Penney; J.Crew; Libbey; Neiman Marcus; NMC Health; Premier Oil; Pyxus International; Salt Creek Midstream; Seadrill Limited; Technicolor; Transocean; Ursa Piceance; and Valaris. Lazard was the global leader in completed restructurings for the first nine months of 2020 (Source: Refinitiv).

Our Capital and Shareholder Advisory practices remain active globally, advising on a broad range of public and private assignments. Our Sovereign Advisory practice continues to be active advising governments, sovereign and sub-sovereign entities across developed and emerging markets.

For a list of Lazard's publicly announced Financial Advisory transactions, please visit our website at www.lazard.com/businesses/transactions.

Asset Management

In the text portion of this press release, we present our Asset Management results as 1) Management fees and other revenue, and 2) Incentive fees.

For the third quarter of 2020, Asset Management operating revenue was $261 million, 8% lower than the third quarter of 2019. For the first nine months of 2020, Asset Management operating revenue was $775 million, 10% lower than the first nine months of 2019.

For the third quarter of 2020, management fees and other revenue was $258 million, 8% lower than the third quarter of 2019, and 5% higher than the second quarter of 2020. For the first nine months of 2020, management fees and other revenue was $770 million, 9% lower than the first nine months of 2019.

Average assets under management (AUM) for the third quarter of 2020 was $226 billion, 3% lower than the third quarter of 2019, and 8% higher than the second quarter of 2020. Average AUM for the first nine months of 2020 was $219 billion, 6% lower than the first nine months of 2019.

AUM as of September 30, 2020, was $228 billion, down 1% from September 30, 2019, and up 6% from June 30, 2020. The sequential increase was driven primarily by market appreciation of $9.5 billion and foreign exchange appreciation of $3.7 billion, offset by net outflows of $0.2 billion.

For the third quarter of 2020, incentive fees were $3 million, compared to $1 million for the third quarter of 2019. For the first nine months of 2020, incentive fees were $6 million, compared to $7 million for the first nine months of 2019.

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.

For the third quarter of 2020, we accrued adjusted compensation and benefits expense1 at an adjusted compensation1 ratio of 60%. This resulted in $341 million of adjusted compensation and benefits expense, compared to $338 million for the third quarter of 2019.

For the first nine months of 2020, adjusted compensation and benefits expensewas $1,005 million, compared to $1,057 million for the first nine months of 2019.

We manage our compensation and benefits expense based on awarded compensation with a consistent deferral policy. We take a disciplined approach to compensation, and our goal is to maintain a compensation-to-operating revenue ratio over the cycle in the mid- to high-50s percentage range on both an awarded and adjusted basis, with consistent deferral policies.

Non-Compensation Expense

Adjusted non-compensation expense1 for the third quarter of 2020 was $103 million, 18% lower than the third quarter of 2019. The ratio of adjusted non-compensation expense to operating revenue1 for the third quarter of 2020 was 18.1%, compared to 21.3% for the third quarter of 2019.

Adjusted non-compensation expense for the first nine months of 2020 was $315 million, 15% lower than the first nine months of 2019. The ratio of adjusted non-compensation expense to operating revenue for the first nine months of 2020 was 18.8%, compared to 20.1% for the first nine months of 2019.

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 basis1, was $29 million for the third quarter of 2020 and $80 million for the first nine months of 2020. The effective tax rate on the same basis was 27.9% for the third quarter and 26.9% for the first nine months of 2020, compared to 16.6% and 21.7% for the respective 2019 periods.

CAPITAL MANAGEMENT AND BALANCE SHEET

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

For the third quarter of 2020, Lazard returned $50 million to shareholders, which included: $49 million in dividends and $1 million in satisfaction of employee tax obligations in lieu of share issuances upon vesting of equity grants.

For the first nine months of 2020, Lazard returned $314 million to shareholders, which included: $147 million in dividends; $95 million in share repurchases of our Class A common stock; and $72 million in satisfaction of employee tax obligations in lieu of share issuances upon vesting of equity grants.

During the first nine months of 2020, we repurchased 2.9 million shares at an average price of $32.70 per share. As of September 30, 2020, our remaining share repurchase authorization is $306 million.

On October 28, 2020, Lazard declared a quarterly dividend of $0.47 per share on its outstanding common stock. The dividend is payable on November 20, 2020, to stockholders of record on November 9, 2020.

Lazard's financial position remains strong. As of September 30, 2020, our cash and cash equivalents were $1,110 million. Stockholders' equity related to Lazard's interests was $694 million.

COVID-19 ENVIRONMENT UPDATE

During the third quarter of 2020, the COVID-19 pandemic continued to have a negative impact on economic activity around the world. Governments and central banks have taken extraordinary measures to support local economies and capital markets, but the macroeconomic outlook remains uncertain while significant health risks persist.

Lazard's offices around the world have continued to operate in the context of applicable local regulations and guidelines regarding business activity, and in the third quarter, the majority of our people worked remotely, employing virtual and secure cloud-based systems.

While the global M&A market strengthened in the third quarter, we continue to expect a challenging business environment in the near term due to elevated uncertainty and capital markets volatility. We believe that our strong financial position, the diversity of our business, and our consistent focus on cost discipline will enable us to weather the economic downturn.

CONFERENCE CALL

Lazard will host a conference call at 8:00 a.m. EDT on October 29, 2020, to discuss the company's financial results for the third quarter and first nine months of 2020. 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 (800) 289-0438 (toll-free, U.S. and Canada) or +1 (323) 794-2423 (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. EDT on October 29, 2020, via the Lazard Investor Relations website, www.lazard.com, or by dialing 1 (888) 203-1112 (toll-free, U.S. and Canada) or +1 (719) 457-0820 (outside of the U.S. and Canada). The replay access code is: 8159566.

ABOUT LAZARD

Lazard, one of the world's preeminent financial advisory and asset management firms, operates from more than 40 cities across 25 countries in North America, Europe, Asia, Australia, Central and South America. With origins dating 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. Follow Lazard at @Lazard.

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", "could", "would", "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, which are subject to known and unknown risks, uncertainties and assumptions about us, may include projections of our future financial performance based on our growth strategies, business plans and initiatives and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. 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 discussed 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 or regional financial markets; * A decline in our revenues, for example due to a decline in overall mergers and acquisitions (M&A) activity, our share of the M&A market or our assets under management (AUM); * 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 and attract employees at current compensation levels.

Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. 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 after the date of this release 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, Lazard's Twitter account (twitter.com/Lazard) and other social media sites 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 mutual funds, hedge funds and other investment products managed by Lazard Asset Management LLC and Lazard Frres Gestion SAS. Investors can link to Lazard and its operating company websites through www.lazard.com.

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 U.S. GAAP results, is the most meaningful and useful way to compare our operating results across periods.

2 Third-quarter and first-nine-months 2020 adjusted results1 exclude pre-tax charges of $2.3 million and $8.5 million, respectively, of costs relating to an office space reorganization. On a U.S. GAAP basis, these resulted in a net charge of $1 million, or $0.01 (diluted) per share, for the third quarter, and a net charge of $5.2 million, or $0.05 (diluted) per share, for the first nine months of 2020.

LAZ-EPE

Note: Endnotes are on page 6 of this release. A reconciliation of U.S. GAAP toadjusted GAAP is on pages 13-14.

OPERATING REVENUE

Operating revenue1 was $569 million for the third quarter of 2020, and $1,675 million for the first nine months of 2020, down 3% and 9% from the respective 2019 periods.

Financial Advisory

Our Financial Advisory results include M&A Advisory, Capital Advisory, Capital Raising, Restructuring, Shareholder Advisory, Sovereign Advisory, and other strategic advisory work for clients.

For the third quarter of 2020, Financial Advisory operating revenue was $307 million, 1% higher than the third quarter of 2019. These results reflected increasing M&A and Restructuring activity.

For the first nine months of 2020, Financial Advisory operating revenue was $895 million, 7% lower than the first nine months of 2019.

During and since the third quarter of 2020, Lazard has been engaged in significant and complex M&A transactions and other advisory assignments globally, including the following (clients are in italics): Altice Europe in the $45.1 billion take-private offer by Patrick Drahi; Gilead's $21 billion acquisition of Immunomedics; Teladoc Health's $18.5 billion merger with Livongo; AVEVA's $5 billion acquisition of OSIsoft; El Paso Electric's $4.3 billion sale to Infrastructure Investments Fund; Iliad's $4.3 billion acquisition of Play; ENGIE's (euro)3.4 billion sale of a 29.9% stake in Suez to Veolia; MassMutual's $3.4 billion sale of its retirement plan business to Empower Retirement; Aimmune's $2.6 billion sale to Nestl Health Science; ServiceMaster's $1.6 billion sale of its ServiceMaster Brands franchise business to Roark Capital; Siemens on the spin-off of Siemens Energy; and IBM on the separation of its Managed Infrastructure Services unit.

Lazard has one of the world's preeminent restructuring practices, with a long track record of successfully advising businesses and governments. During and since the third quarter of 2020, we have been engaged in a broad range of highly visible and complex restructuring and debt advisory assignments for debtors or creditors, including roles involving: 24 Hour Fitness; Abengoa; Diamond Offshore Drilling; FTS International; Gavilan Resources; Hi-Crush; J.C. Penney; J.Crew; Libbey; Neiman Marcus; NMC Health; Premier Oil; Pyxus International; Salt Creek Midstream; Seadrill Limited; Technicolor; Transocean; Ursa Piceance; and Valaris. Lazard was the global leader in completed restructurings for the first nine months of 2020 (Source: Refinitiv).

Our Capital and Shareholder Advisory practices remain active globally, advising on a broad range of public and private assignments. Our Sovereign Advisory practice continues to be active advising governments, sovereign and sub-sovereign entities across developed and emerging markets.

For a list of Lazard's publicly announced Financial Advisory transactions, please visit our website at www.lazard.com/businesses/transactions.

Asset Management

In the text portion of this press release, we present our Asset Management results as 1) Management fees and other revenue, and 2) Incentive fees.

For the third quarter of 2020, Asset Management operating revenue was $261 million, 8% lower than the third quarter of 2019. For the first nine months of 2020, Asset Management operating revenue was $775 million, 10% lower than the first nine months of 2019.

For the third quarter of 2020, management fees and other revenue was $258 million, 8% lower than the third quarter of 2019, and 5% higher than the second quarter of 2020. For the first nine months of 2020, management fees and other revenue was $770 million, 9% lower than the first nine months of 2019.

Average assets under management (AUM) for the third quarter of 2020 was $226 billion, 3% lower than the third quarter of 2019, and 8% higher than the second quarter of 2020. Average AUM for the first nine months of 2020 was $219 billion, 6% lower than the first nine months of 2019.

AUM as of September 30, 2020, was $228 billion, down 1% from September 30, 2019, and up 6% from June 30, 2020. The sequential increase was driven primarily by market appreciation of $9.5 billion and foreign exchange appreciation of $3.7 billion, offset by net outflows of $0.2 billion.

For the third quarter of 2020, incentive fees were $3 million, compared to $1 million for the third quarter of 2019. For the first nine months of 2020, incentive fees were $6 million, compared to $7 million for the first nine months of 2019.

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.

For the third quarter of 2020, we accrued adjusted compensation and benefits expense1 at an adjusted compensation1 ratio of 60%. This resulted in $341 million of adjusted compensation and benefits expense, compared to $338 million for the third quarter of 2019.

For the first nine months of 2020, adjusted compensation and benefits expensewas $1,005 million, compared to $1,057 million for the first nine months of 2019.

We manage our compensation and benefits expense based on awarded compensation with a consistent deferral policy. We take a disciplined approach to compensation, and our goal is to maintain a compensation-to-operating revenue ratio over the cycle in the mid- to high-50s percentage range on both an awarded and adjusted basis, with consistent deferral policies.

Non-Compensation Expense

Adjusted non-compensation expense1 for the third quarter of 2020 was $103 million, 18% lower than the third quarter of 2019. The ratio of adjusted non-compensation expense to operating revenue1 for the third quarter of 2020 was 18.1%, compared to 21.3% for the third quarter of 2019.

Adjusted non-compensation expense for the first nine months of 2020 was $315 million, 15% lower than the first nine months of 2019. The ratio of adjusted non-compensation expense to operating revenue for the first nine months of 2020 was 18.8%, compared to 20.1% for the first nine months of 2019.

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 basis1, was $29 million for the third quarter of 2020 and $80 million for the first nine months of 2020. The effective tax rate on the same basis was 27.9% for the third quarter and 26.9% for the first nine months of 2020, compared to 16.6% and 21.7% for the respective 2019 periods.

CAPITAL MANAGEMENT AND BALANCE SHEET

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

For the third quarter of 2020, Lazard returned $50 million to shareholders, which included: $49 million in dividends and $1 million in satisfaction of employee tax obligations in lieu of share issuances upon vesting of equity grants.

For the first nine months of 2020, Lazard returned $314 million to shareholders, which included: $147 million in dividends; $95 million in share repurchases of our Class A common stock; and $72 million in satisfaction of employee tax obligations in lieu of share issuances upon vesting of equity grants.

During the first nine months of 2020, we repurchased 2.9 million shares at an average price of $32.70 per share. As of September 30, 2020, our remaining share repurchase authorization is $306 million.

On October 28, 2020, Lazard declared a quarterly dividend of $0.47 per share on its outstanding common stock. The dividend is payable on November 20, 2020, to stockholders of record on November 9, 2020.

Lazard's financial position remains strong. As of September 30, 2020, our cash and cash equivalents were $1,110 million. Stockholders' equity related to Lazard's interests was $694 million.

COVID-19 ENVIRONMENT UPDATE

During the third quarter of 2020, the COVID-19 pandemic continued to have a negative impact on economic activity around the world. Governments and central banks have taken extraordinary measures to support local economies and capital markets, but the macroeconomic outlook remains uncertain while significant health risks persist.

Lazard's offices around the world have continued to operate in the context of applicable local regulations and guidelines regarding business activity, and in the third quarter, the majority of our people worked remotely, employing virtual and secure cloud-based systems.

While the global M&A market strengthened in the third quarter, we continue to expect a challenging business environment in the near term due to elevated uncertainty and capital markets volatility. We believe that our strong financial position, the diversity of our business, and our consistent focus on cost discipline will enable us to weather the economic downturn.

CONFERENCE CALL

Lazard will host a conference call at 8:00 a.m. EDT on October 29, 2020, to discuss the company's financial results for the third quarter and first nine months of 2020. 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 (800) 289-0438 (toll-free, U.S. and Canada) or +1 (323) 794-2423 (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. EDT on October 29, 2020, via the Lazard Investor Relations website, www.lazard.com, or by dialing 1 (888) 203-1112 (toll-free, U.S. and Canada) or +1 (719) 457-0820 (outside of the U.S. and Canada). The replay access code is: 8159566.

ABOUT LAZARD

Lazard, one of the world's preeminent financial advisory and asset management firms, operates from more than 40 cities across 25 countries in North America, Europe, Asia, Australia, Central and South America. With origins dating 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. Follow Lazard at @Lazard.

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", "could", "would", "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, which are subject to known and unknown risks, uncertainties and assumptions about us, may include projections of our future financial performance based on our growth strategies, business plans and initiatives and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. 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 discussed 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 or regional financial markets; * A decline in our revenues, for example due to a decline in overall mergers and acquisitions (M&A) activity, our share of the M&A market or our assets under management (AUM); * 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 and attract employees at current compensation levels.

Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. 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 after the date of this release 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, Lazard's Twitter account (twitter.com/Lazard) and other social media sites 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 mutual funds, hedge funds and other investment products managed by Lazard Asset Management LLC and Lazard Frres Gestion SAS. Investors can link to Lazard and its operating company websites through www.lazard.com.

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 U.S. GAAP results, is the most meaningful and useful way to compare our operating results across periods.

2 Third-quarter and first-nine-months 2020 adjusted results1 exclude pre-tax charges of $2.3 million and $8.5 million, respectively, of costs relating to an office space reorganization. On a U.S. GAAP basis, these resulted in a net charge of $1 million, or $0.01 (diluted) per share, for the third quarter, and a net charge of $5.2 million, or $0.05 (diluted) per share, for the first nine months of 2020.

LAZ-EPE

LAZARD LTDUNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS(U.S. GAAP) Three Months Ended % Change From

September June 30, September June September 30, 30, 30, 30,

($ in thousands, 2020 2020 2019 2020 2019except per sharedata) Total revenue $598,022 $592,264 $611,073 1% (2%)

Interest expense (20,344) (19,972) (20,005)

Net revenue 577,678 572,292 591,068 1% (2%)

Operating expenses:

Compensation and 354,625 351,568 391,363 1% (9%)benefits

Occupancy and 31,318 30,574 29,856 equipmentMarketing and 7,562 6,517 27,318 businessdevelopmentTechnology and 33,457 32,629 34,076 informationservicesProfessional 14,701 16,728 15,105 servicesFund administration 26,196 24,053 28,425 and outsourcedservicesAmortization andother 458 455 1,022 acquisition-relatedcostsOther 4,681 13,903 11,530

Subtotal 118,373 124,859 147,332 (5%) (20%)

Operating expenses 472,998 476,427 538,695 (1%) (12%)



Operating income 104,680 95,865 52,373 9% NM



Provision for 28,165 22,789 4,177 24% NMincome taxesNet income 76,515 73,076 48,196 5% 59%

Net income (loss)attributable to 1,423 (382) 1,492 noncontrollinginterestsNet income $75,092 $73,458 $46,704 2% 61%attributable toLazard Ltd

Attributable to Lazard Ltd CommonStockholders:Weighted average shares outstanding:Basic 107,168,615 106,662,064 109,285,727 0% (2%)

Diluted 113,181,564 111,487,749 113,881,690 2% (1%)



Net income per share:Basic $0.69 $0.68 $0.42 1% 64%

Diluted $0.66 $0.66 $0.40 0% 65%

LAZARD LTDUNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS(U.S. GAAP)Nine Months Ended

September 30,

September 30,

($ in thousands, except per share data)2020

2019

% Change

Total revenue$1,748,443

$1,923,552

(9%)

Interest expense(60,459)

(58,120)

Net revenue1,687,984

1,865,432

(10%)

Operating expenses:Compensation and benefits1,025,948

1,136,087

(10%)

Occupancy and equipment94,090

89,104

Marketing and business development34,265

84,086

Technology and information services97,444

104,956

Professional services45,974

48,466

Fund administration and outsourced services76,639

85,848

Amortization and other acquisition-related costs1,359

9,534

Other27,623

33,630

Subtotal377,394

455,624

(17%)

Operating expenses1,403,342

1,591,711

(12%)

Operating income284,642

273,721

4%

Provision for income taxes76,720

55,536

38%

Net income207,922

218,185

(5%)

Net income (loss) attributable to noncontrolling interests(4,650)

8,662

Net income attributable to Lazard Ltd$212,572

$209,523

1%

Attributable to Lazard Ltd Common Stockholders:Weighted average shares outstanding:Basic106,711,547

111,070,395

(4%)

Diluted112,929,830

116,959,041

(3%)

Net income per share:Basic$1.96

$1.87

5%

Diluted$1.88

$1.77

6%

LAZARD LTDUNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS(U.S. GAAP) Nine Months Ended

September September 30, 30,

2020 2019 %($ in thousands, except per share data) Change

Total revenue $1,748,443 $1,923,552 (9%)

Interest expense (60,459) (58,120)

Net revenue 1,687,984 1,865,432 (10%)

Operating expenses:

Compensation and benefits 1,025,948 1,136,087 (10%)



Occupancy and equipment 94,090 89,104

Marketing and business development 34,265 84,086

Technology and information services 97,444 104,956

Professional services 45,974 48,466

Fund administration and outsourced 76,639 85,848 servicesAmortization and other acquisition-related 1,359 9,534 costsOther 27,623 33,630

Subtotal 377,394 455,624 (17%)

Operating expenses 1,403,342 1,591,711 (12%)



Operating income 284,642 273,721 4%



Provision for income taxes 76,720 55,536 38%

Net income 207,922 218,185 (5%)

Net income (loss) attributable to (4,650) 8,662 noncontrolling interestsNet income attributable to Lazard Ltd $212,572 $209,523 1%



Attributable to Lazard Ltd Common Stockholders:Weighted average shares outstanding:

Basic 106,711,547 111,070,395 (4%)

Diluted 112,929,830 116,959,041 (3%)



Net income per share:

Basic $1.96 $1.87 5%

Diluted $1.88 $1.77 6%

LAZARD LTDUNAUDITED CONDENSED CONSOLIDATEDSTATEMENT OF FINANCIAL CONDITION(U.S. GAAP)September 30,

December 31,

($ in thousands)2020

2019

ASSETSCash and cash equivalents$1,109,745

$1,231,593

Deposits with banks and short-term investments1,193,717

1,180,686

Cash deposited with clearing organizations and other segregated cash41,260

43,280

Receivables575,098

663,138

Investments535,245

531,995

Goodwill and other intangible assets373,841

373,594

Operating lease right-of-use assets517,583

551,504

Deferred tax assets557,120

586,750

Other assets563,388

477,041

Total Assets$5,466,997

$5,639,581

LIABILITIES & STOCKHOLDERS' EQUITYLiabilitiesDeposits and other customer payables$1,244,562

$1,246,200

Accrued compensation and benefits451,180

602,777

Operating lease liabilities609,850

644,345

Tax receivable agreement obligation221,890

247,344

Senior debt1,681,487

1,679,562

Other liabilities479,330

537,779

Total liabilities4,688,299

4,958,007

Commitments and contingenciesStockholders' equityPreferred stock, par value $.01 per share-

-

Common stock, par value $.01 per share1,128

1,128

Additional paid-in capital95,143

41,020

Retained earnings1,160,310

1,193,570

Accumulated other comprehensive loss, net of tax(279,785)

(293,648)

Subtotal976,796

942,070

Class A common stock held by subsidiaries, at cost(282,983)

(332,079)

Total Lazard Ltd stockholders' equity693,813

609,991

Noncontrolling interests84,885

71,583

Total stockholders' equity778,698

681,574

Total liabilities and stockholders' equity$5,466,997

$5,639,581

LAZARD LTDUNAUDITED CONDENSED CONSOLIDATEDSTATEMENT OF FINANCIAL CONDITION(U.S. GAAP) September December 30, 31,

($ in thousands) 2020 2019

ASSETS Cash and cash equivalents $1,109,745 $1,231,593

Deposits with banks and short-term investments 1,193,717 1,180,686

Cash deposited with clearing organizations and other 41,260 43,280segregated cashReceivables 575,098 663,138

Investments 535,245 531,995

Goodwill and other intangible assets 373,841 373,594

Operating lease right-of-use assets 517,583 551,504

Deferred tax assets 557,120 586,750

Other assets 563,388 477,041

Total Assets $5,466,997 $5,639,581

LIABILITIES & STOCKHOLDERS' EQUITY LiabilitiesDeposits and other customer payables $1,244,562 $1,246,200

Accrued compensation and benefits 451,180 602,777

Operating lease liabilities 609,850 644,345

Tax receivable agreement obligation 221,890 247,344

Senior debt 1,681,487 1,679,562

Other liabilities 479,330 537,779

Total liabilities 4,688,299 4,958,007

Commitments and contingencies Stockholders' equityPreferred stock, par value $.01 per share - -

Common stock, par value $.01 per share 1,128 1,128

Additional paid-in capital 95,143 41,020

Retained earnings 1,160,310 1,193,570

Accumulated other comprehensive loss, net of tax (279,785) (293,648)

Subtotal 976,796 942,070

Class A common stock held by subsidiaries, at cost (282,983) (332,079)

Total Lazard Ltd stockholders' equity 693,813 609,991

Noncontrolling interests 84,885 71,583

Total stockholders' equity 778,698 681,574

Total liabilities and stockholders' equity $5,466,997 $5,639,581

LAZARD LTDSELECTED SUMMARY FINANCIAL INFORMATION (a)(Non-GAAP - unaudited)Three Months Ended

% Change From

September 30,

June 30,

September 30,

June 30,

September 30,

($ in thousands, except per share data)2020

2020

2019

2020

2019

Revenues:Financial Advisory$306,977

$292,906

$303,901

5%

1%

Asset Management261,047

245,346

282,596

6%

(8%)

Corporate1,023

4,662

1,765

(78%)

(42%)

Operating revenue (b)$569,047

$542,914

$588,262

5%

(3%)

Expenses:Adjusted compensation and benefits expense (c)$341,428

$325,749

$338,250

5%

1%

Ratio of adjusted compensation to operating revenue60.0%

60.0%

57.5%

Non-compensation expense (d)$103,081

$99,617

$125,185

3%

(18%)

Ratio of non-compensation to operating revenue18.1%

18.3%

21.3%

Earnings:Earnings from operations (e)$124,538

$117,548

$124,827

6%

0%

Operating margin (f)21.9%

21.7%

21.2%

Adjusted net income (g)$76,102

$75,151

$88,260

1%

(14%)

Diluted adjusted net income per share$0.67

$0.67

$0.76

0%

(12%)

Diluted weighted average shares (h)113,780,625

111,845,101

115,513,679

2%

(2%)

Effective tax rate (i)27.9%

23.9%

16.6%

LAZARD LTDSELECTED SUMMARY FINANCIAL INFORMATION (a)(Non-GAAP - unaudited)

Three Months Ended % Change From

September June 30, September June September 30, 30, 30, 30,

($ in thousands, 2020 2020 2019 2020 2019except per sharedata) Revenues: Financial $306,977 $292,906 $303,901 5% 1%AdvisoryAsset Management 261,047 245,346 282,596 6% (8%)

Corporate 1,023 4,662 1,765 (78%) (42%)



Operating $569,047 $542,914 $588,262 5% (3%)revenue (b)

Expenses:



Adjustedcompensation and $341,428 $325,749 $338,250 5% 1%benefits expense(c)Ratio ofadjusted 60.0% 60.0% 57.5% compensation tooperatingrevenue

Non-compensation $103,081 $99,617 $125,185 3% (18%)expense (d)Ratio ofnon-compensation 18.1% 18.3% 21.3% to operatingrevenue

Earnings:



Earnings from $124,538 $117,548 $124,827 6% 0%operations (e)Operating margin 21.9% 21.7% 21.2% (f)

Adjusted net $76,102 $75,151 $88,260 1% (14%)income (g)

Diluted adjusted $0.67 $0.67 $0.76 0% (12%)net income pershare

Diluted weighted 113,780,625 111,845,101 115,513,679 2% (2%)average shares(h) Effective tax 27.9% 23.9% 16.6%rate (i)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.This presentation includes non-U.S. GAAP ("non-GAAP") measures. Our non-GAAPmeasures are not meant to be considered in isolation or as a substitute forthe corresponding U.S. GAAP measures, and should be read only in conjunctionwith our consolidated financial statements prepared in accordance with U.S.GAAP. For a detailed explanation of the adjustments made to thecorresponding U.S. GAAP measures, see Reconciliation of U.S. GAAP toSelected Summary Financial Information and Notes to Financial Schedules.LAZARD LTDSELECTED SUMMARY FINANCIAL INFORMATION (a)(Non-GAAP - unaudited)Nine Months Ended

September 30,

September 30,

($ in thousands, except per share data)2020

2019

% Change

Revenues:Financial Advisory$894,656

$962,709

(7%)

Asset Management775,346

857,599

(10%)

Corporate4,770

17,644

(73%)

Operating revenue (b)$1,674,772

$1,837,952

(9%)

Expenses:Adjusted compensation and benefits expense (c)$1,004,863

$1,056,822

(5%)

Ratio of adjusted compensation to operating revenue60.0%

57.5%

Non-compensation expense (d)$315,330

$368,936

(15%)

Ratio of non-compensation to operating revenue18.8%

20.1%

Earnings:Earnings from operations (e)$354,579

$412,194

(14%)

Operating margin (f)21.2%

22.4%

Adjusted net income (g)$217,805

$279,543

(22%)

Diluted adjusted net income per share$1.92

$2.37

(19%)

Diluted weighted average shares (h)113,261,923

117,957,075

(4%)

Effective tax rate (i)26.9%

21.7%

LAZARD LTDSELECTED SUMMARY FINANCIAL INFORMATION (a)(Non-GAAP - unaudited)

Nine Months Ended

September September 30, 30,

2020 2019 %($ in thousands, except per share data) Change

Revenues: Financial Advisory $894,656 $962,709 (7%)

Asset Management 775,346 857,599 (10%)

Corporate 4,770 17,644 (73%)



Operating revenue (b) $1,674,772 $1,837,952 (9%)



Expenses:



Adjusted compensation and benefits expense $1,004,863 $1,056,822 (5%)(c)Ratio of adjusted compensation to 60.0% 57.5% operating revenue

Non-compensation expense (d) $315,330 $368,936 (15%)

Ratio of non-compensation to operating 18.8% 20.1% revenue

Earnings:



Earnings from operations (e) $354,579 $412,194 (14%)

Operating margin (f) 21.2% 22.4%



Adjusted net income (g) $217,805 $279,543 (22%)



Diluted adjusted net income per share $1.92 $2.37 (19%)



Diluted weighted average shares (h) 113,261,923 117,957,075 (4%)

Effective tax rate (i) 26.9% 21.7%

This presentation includes 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.This presentation includes non-GAAP measures. Our non-GAAP measures are notmeant to be considered in isolation or as a substitute for the correspondingU.S. GAAP measures, and should be read only in conjunction with ourconsolidated financial statements prepared in accordance with U.S. GAAP. For adetailed explanation of the adjustments made to the corresponding U.S. GAAPmeasures, see Reconciliation of U.S. GAAP to Selected Summary FinancialInformation and Notes to Financial Schedules.LAZARD LTDASSETS UNDER MANAGEMENT ("AUM")(unaudited)($ in millions)As of

Variance

September 30,

June 30,

December 31,

2020

2020

2019

Qtr to Qtr

YTD

Equity:Emerging Markets$29,942

$28,937

$40,612

3.5%

(26.3%)

Global48,382

45,178

49,759

7.1%

(2.8%)

Local43,559

43,477

48,985

0.2%

(11.1%)

Multi-Regional61,872

55,923

66,185

10.6%

(6.5%)

Total Equity183,755

173,515

205,541

5.9%

(10.6%)

Fixed Income:Emerging Markets12,743

12,412

14,387

2.7%

(11.4%)

Global9,948

9,883

9,233

0.7%

7.7%

Local5,554

5,436

5,450

2.2%

1.9%

Multi-Regional11,252

9,153

9,193

22.9%

22.4%

Total Fixed Income39,497

36,884

38,263

7.1%

3.2%

Alternative Investments2,283

2,028

2,149

12.6%

6.2%

Private Equity1,396

1,412

1,385

(1.1%)

0.8%

Cash Management821

865

901

(5.1%)

(8.9%)

Total AUM$227,752

$214,704

$248,239

6.1%

(8.3%)

Three Months Ended September 30

Nine Months Ended September 30,

2020

2019

2020

2019

AUM - Beginning of Period$214,704

$237,466

$248,239

$214,734

Net Flows(201)

(4,385)

(11,082)

(9,593)

Market and foreign exchange appreciation (depreciation)13,249

(2,207)

(9,405)

25,733

AUM - End of Period$227,752

$230,874

$227,752

$230,874

Average AUM$226,046

$233,878

$218,652

$232,885

% Change in average AUM(3.3%)

(6.1%)

Note: Average AUM generally represents the average of the monthly ending AUM balances for the period.LAZARD LTDASSETS UNDER MANAGEMENT ("AUM")(unaudited)

($ in millions) As of Variance

September June 30, December 30, 31,

2020 2020 2019 Qtr to YTD Qtr

Equity:Emerging Markets $29,942 $28,937 $40,612 3.5% (26.3%)

Global 48,382 45,178 49,759 7.1% (2.8%)

Local 43,559 43,477 48,985 0.2% (11.1%)

Multi-Regional 61,872 55,923 66,185 10.6% (6.5%)

Total Equity 183,755 173,515 205,541 5.9% (10.6%)

Fixed Income:

Emerging Markets 12,743 12,412 14,387 2.7% (11.4%)

Global 9,948 9,883 9,233 0.7% 7.7%

Local 5,554 5,436 5,450 2.2% 1.9%

Multi-Regional 11,252 9,153 9,193 22.9% 22.4%

Total Fixed Income 39,497 36,884 38,263 7.1% 3.2%

Alternative Investments 2,283 2,028 2,149 12.6% 6.2%

Private Equity 1,396 1,412 1,385 (1.1%) 0.8%

Cash Management 821 865 901 (5.1%) (8.9%)

Total AUM $227,752 $214,704 $248,239 6.1% (8.3%)

Three Months Ended Nine Months Ended September 30 September 30,

2020 2019 2020 2019

AUM - Beginning of $214,704 $237,466 $248,239 $214,734Period Net Flows (201) (4,385) (11,082) (9,593)

Market and foreign 13,249 (2,207) (9,405) 25,733exchange appreciation(depreciation) AUM - End of Period $227,752 $230,874 $227,752 $230,874

Average AUM $226,046 $233,878 $218,652 $232,885

% Change in average AUM (3.3%) (6.1%)

Note: Average AUM generally represents the average of the monthly ending AUMbalances for the period.LAZARD LTDRECONCILIATION OF U.S. GAAP TO SELECTED SUMMARY FINANCIAL INFORMATION (a)(unaudited)Three Months Ended

Nine Months Ended

September 30,

June 30,

September 30,

September 30,

September 30,

($ in thousands, except per share data)2020

2020

2019

2020

2019

Operating RevenueNet revenue - U.S. GAAP Basis$577,678

$572,292

$591,068

$1,687,984

$1,865,432

Adjustments:Revenue related to noncontrolling interests (j)(4,042)

(2,173)

(4,164)

(3,443)

(18,254)

Gains related to Lazard Fund Interests ("LFI") and other similar arrangements(11,261)

(23,803)

(1,764)

(15,427)

(22,118)

Distribution fees, reimbursable deal costs and bad debt expense (k)(12,016)

(21,936)

(15,413)

(50,336)

(53,102)

Private Equity investment adjustment (l)-

-

-

-

11,948

Interest expense18,688

18,534

18,535

55,994

54,046

Operating revenue, as adjusted (b)$569,047

$542,914

$588,262

$1,674,772

$1,837,952

Compensation and Benefits ExpenseCompensation and benefits expense - U.S. GAAP Basis$354,625

$351,568

$391,363

$1,025,948

$1,136,087

Adjustments:Expenses associated with business realignment (m)-

-

(49,119)

-

(49,119)

Charges pertaining to LFI and other similar arrangements(11,261)

(23,803)

(1,764)

(15,427)

(22,118)

Compensation related to noncontrolling interests (j)(1,936)

(2,016)

(2,230)

(5,658)

(8,028)

Compensation and benefits expense, as adjusted (c)$341,428

$325,749

$338,250

$1,004,863

$1,056,822

Non-Compensation ExpenseNon-compensation expense - Subtotal - U.S. GAAP Basis$118,373

$124,859

$147,332

$377,394

$455,624

Adjustments:Expenses associated with business realignment (m)-

-

(1,810)

-

(1,810)

Expenses associated with ERP system implementation (n)-

-

(2,362)

-

(13,193)

Expenses related to office space reorganization (o)(2,311)

(2,487)

(1,143)

(8,462)

(1,143)

Distribution fees, reimbursable deal costs and bad debt expense (k)(12,016)

(21,936)

(15,413)

(50,336)

(53,102)

Amortization and other acquisition-related costs (p)(458)

(455)

(1,022)

(1,359)

(9,534)

Charges pertaining to Senior Debt refinancing (q)-

-

-

-

(6,505)

Non-compensation expense related to noncontrolling interests (j)(507)

(364)

(397)

(1,907)

(1,401)

Non-compensation expense, as adjusted (d)$103,081

$99,617

$125,185

$315,330

$368,936

Pre-Tax Income and Earnings From OperationsOperating Income - U.S. GAAP Basis$104,680

$95,865

$52,373

$284,642

$273,721

Adjustments:Expenses associated with business realignment (m)-

-

51,454

-

51,454

Expenses associated with ERP system implementation (n)-

-

2,362

-

13,193

Expenses related to office space reorganization (o)2,311

2,487

1,143

8,462

1,143

Acquisition-related costs (benefits) (p)-

-

(74)

-

7,577

Private Equity investment adjustment (l)-

-

-

-

11,948

Charges pertaining to Senior Debt refinancing (q)-

-

-

-

6,805

Net (income) loss related to noncontrolling interests (j)(1,423)

382

(1,492)

4,650

(8,662)

Pre-tax income, as adjusted105,568

98,734

105,766

297,754

357,179

Interest expense18,688

18,534

18,535

55,994

53,746

Amortization (LAZ only)282

280

526

831

1,269

Earnings from operations, as adjusted (e)$124,538

$117,548

$124,827

$354,579

$412,194

Net Income attributable to Lazard LtdNet income attributable to Lazard Ltd - U.S. GAAP Basis$75,092

$73,458

$46,704

$212,572

$209,523

Adjustments:Expenses associated with business realignment (m)-

-

51,454

-

51,454

Expenses associated with ERP system implementation (n)-

-

2,362

-

13,193

Expenses related to office space reorganization (o)2,311

2,487

1,143

8,462

1,143

Acquisition-related costs (benefits) (p)-

-

(74)

-

7,577

Private Equity investment adjustment (l)-

-

-

-

11,948

Charges pertaining to Senior Debt refinancing (q)-

-

-

-

6,805

Tax benefit allocated to adjustments(1,301)

(794)

(13,329)

(3,229)

(22,100)

Net income, as adjusted (g)$76,102

$75,151

$88,260

$217,805

$279,543

Diluted Weighted Average Shares OutstandingDiluted Weighted Average Shares Outstanding - U.S. GAAP Basis113,181,564

111,487,749

113,881,690

112,929,830

116,959,041

Adjustment: participating securities including profits interest participation rights599,061

357,352

1,631,989

332,093

998,034

Diluted Weighted Average Shares Outstanding, as adjusted (h)113,780,625

111,845,101

115,513,679

113,261,923

117,957,075

Diluted net income per share:U.S. GAAP Basis$0.66

$0.66

$0.40

$1.88

$1.77

Non-GAAP Basis, as adjusted$0.67

$0.67

$0.76

$1.92

$2.37

LAZARD LTDRECONCILIATION OF U.S. GAAP TO SELECTED SUMMARY FINANCIAL INFORMATION (a)(unaudited) Three Months Ended Nine Months Ended

September June 30, September September September 30, 30, 30, 30,

($ in thousands, 2020 2020 2019 2020 2019except per share data) Operating RevenueNet revenue - U.S. $577,678 $572,292 $591,068 $1,687,984 $1,865,432GAAP Basis Adjustments: Revenue related to (4,042) (2,173) (4,164) (3,443) (18,254)noncontrolling interests (j)Gains related toLazard Fund (11,261) (23,803) (1,764) (15,427) (22,118)Interests ("LFI") and other similararrangementsDistribution fees,reimbursable deal (12,016) (21,936) (15,413) (50,336) (53,102)costs and bad debtexpense (k)Private Equity - - - - 11,948investment adjustment (l)Interest expense 18,688 18,534 18,535 55,994 54,046

Operating revenue, $569,047 $542,914 $588,262 $1,674,772 $1,837,952as adjusted (b) Compensation and Benefits ExpenseCompensation and $354,625 $351,568 $391,363 $1,025,948 $1,136,087benefits expense - U.S. GAAP Basis Adjustments: Expenses associated - - (49,119) - (49,119)with business realignment (m)Charges pertainingto LFI and other (11,261) (23,803) (1,764) (15,427) (22,118)similararrangementsCompensationrelated to (1,936) (2,016) (2,230) (5,658) (8,028)noncontrollinginterests (j) Compensation and $341,428 $325,749 $338,250 $1,004,863 $1,056,822benefits expense, as adjusted (c) Non-Compensation ExpenseNon-compensation $118,373 $124,859 $147,332 $377,394 $455,624expense - Subtotal - U.S. GAAP Basis Adjustments: Expenses associated - - (1,810) - (1,810)with business realignment (m)Expenses associated - - (2,362) - (13,193)with ERP system implementation (n)Expenses related to (2,311) (2,487) (1,143) (8,462) (1,143)office space reorganization (o)Distribution fees,reimbursable deal (12,016) (21,936) (15,413) (50,336) (53,102)costs and bad debtexpense (k)Amortization andother (458) (455) (1,022) (1,359) (9,534)acquisition-relatedcosts (p)Charges pertaining - - - - (6,505)to Senior Debt refinancing (q)Non-compensationexpense related to (507) (364) (397) (1,907) (1,401)noncontrollinginterests (j) Non-compensation $103,081 $99,617 $125,185 $315,330 $368,936expense, as adjusted (d) Pre-Tax Income and Earnings From OperationsOperating Income - $104,680 $95,865 $52,373 $284,642 $273,721U.S. GAAP Basis Adjustments: Expenses associated - - 51,454 - 51,454with business realignment (m)Expenses associated - - 2,362 - 13,193with ERP system implementation (n)Expenses related to 2,311 2,487 1,143 8,462 1,143office space reorganization (o)Acquisition-related - - (74) - 7,577costs (benefits) (p)Private Equity - - - - 11,948investment adjustment (l)Charges pertaining - - - - 6,805to Senior Debt refinancing (q)Net (income) lossrelated to (1,423) 382 (1,492) 4,650 (8,662)noncontrollinginterests (j)Pre-tax income, as 105,568 98,734 105,766 297,754 357,179adjustedInterest expense 18,688 18,534 18,535 55,994 53,746

Amortization (LAZ 282 280 526 831 1,269only)Earnings from $124,538 $117,548 $124,827 $354,579 $412,194operations, as adjusted (e) Net Income attributable to Lazard LtdNet incomeattributable to $75,092 $73,458 $46,704 $212,572 $209,523Lazard Ltd - U.S.GAAP BasisAdjustments: Expenses associated - - 51,454 - 51,454with business realignment (m)Expenses associated - - 2,362 - 13,193with ERP system implementation (n)Expenses related to 2,311 2,487 1,143 8,462 1,143office space reorganization (o)Acquisition-related - - (74) - 7,577costs (benefits) (p)Private Equity - - - - 11,948investment adjustment (l)Charges pertaining - - - - 6,805to Senior Debt refinancing (q)Tax benefit (1,301) (794) (13,329) (3,229) (22,100)allocated to adjustments Net income, as $76,102 $75,151 $88,260 $217,805 $279,543adjusted (g) Diluted Weighted Average Shares OutstandingDiluted WeightedAverage Shares 113,181,564 111,487,749 113,881,690 112,929,830 116,959,041Outstanding - U.S.GAAP BasisAdjustment:participatingsecurities 599,061 357,352 1,631,989 332,093 998,034including profits interestparticipationrights Diluted WeightedAverage Shares 113,780,625 111,845,101 115,513,679 113,261,923 117,957,075Outstanding, asadjusted (h) Diluted net income per share:U.S. GAAP Basis $0.66 $0.66 $0.40 $1.88 $1.77

Non-GAAP Basis, as $0.67 $0.67 $0.76 $1.92 $2.37adjusted This presentation includes 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.

See Notes to Financial Schedules

This presentation includes non-GAAP measures. Our non-GAAP measures are notmeant to be considered in isolation or as a substitute for comparable U.S. GAAPmeasures, and should be read only in conjunction with our consolidatedfinancial statements prepared in accordance with U.S. GAAP. For a detailedexplanation of the adjustments made to comparable U.S. GAAP measures, see Notesto Financial Schedules.



See Notes to Financial Schedules

LAZARD LTD

RECONCILIATION OF NON-COMPENSATION U.S. GAAP TO ADJUSTED (a)(unaudited)Three Months Ended

Nine Months Ended

September 30,

June 30,

September 30,

September 30,

September 30,

($ in thousands)2020

2020

2019

2020

2019

Non-compensation expense - U.S. GAAP Basis:Occupancy and equipment$31,318

$30,574

$29,856

$94,090

$89,104

Marketing and business development7,562

6,517

27,318

34,265

84,086

Technology and information services33,457

32,629

34,076

97,444

104,956

Professional services14,701

16,728

15,105

45,974

48,466

Fund administration and outsourced services26,196

24,053

28,425

76,639

85,848

Amortization and other acquisition-related costs458

455

1,022

1,359

9,534

Other4,681

13,903

11,530

27,623

33,630

Non-compensation expense - Subtotal - U.S. GAAP Basis$118,373

$124,859

$147,332

$377,394

$455,624

Non-compensation expense - Adjustments:Occupancy and equipment (j) (o)($2,278)

($2,448)

($1,195)

($8,459)

($1,253)

Marketing and business development (j) (k) (m) (n)(185)

(755)

(3,005)

(3,631)

(12,902)

Technology and information services (j) (k) (n)(169)

(167)

(2,396)

(771)

(13,099)

Professional services (j) (k) (n) (o)(2,269)

(1,658)

(1,392)

(5,705)

(4,847)

Fund administration and outsourced services (j) (k)(13,593)

(10,129)

(13,329)

(35,842)

(41,787)

Amortization and other acquisition-related costs (m) (p)(458)

(455)

(1,022)

(1,359)

(9,534)

Other (j) (k) (m) (n) (q)3,660

(9,630)

192

(6,297)

(3,266)

Subtotal Non-compensation adjustments($15,292)

($25,242)

($22,147)

($62,064)

($86,688)

Non-compensation expense, as adjusted:Occupancy and equipment$29,040

$28,126

$28,661

$85,631

$87,851

Marketing and business development7,377

5,762

24,313

30,634

71,184

Technology and information services33,288

32,462

31,680

96,673

91,857

Professional services12,432

15,070

13,713

40,269

43,619

Fund administration and outsourced services12,603

13,924

15,096

40,797

44,061

Amortization and other acquisition-related costs-

-

-

-

-

Other8,341

4,273

11,722

21,326

30,364

Non-compensation expense, as adjusted (d)$103,081

$99,617

$125,185

$315,330

$368,936

LAZARD LTD

RECONCILIATION OF NON-COMPENSATION U.S. GAAP TO ADJUSTED (a)(unaudited) Three Months Ended Nine Months Ended

September June 30, September September September 30, 30, 30, 30,

($ in thousands) 2020 2020 2019 2020 2019

Non-compensationexpense - U.S. GAAP Basis:Occupancy and $31,318 $30,574 $29,856 $94,090 $89,104equipmentMarketing and 7,562 6,517 27,318 34,265 84,086business developmentTechnology and 33,457 32,629 34,076 97,444 104,956information servicesProfessional 14,701 16,728 15,105 45,974 48,466servicesFund administration 26,196 24,053 28,425 76,639 85,848and outsourced servicesAmortization andother 458 455 1,022 1,359 9,534acquisition-relatedcostsOther 4,681 13,903 11,530 27,623 33,630

Non-compensation $118,373 $124,859 $147,332 $377,394 $455,624expense - Subtotal - U.S. GAAP Basis Non-compensationexpense - Adjustments:Occupancy and ($2,278) ($2,448) ($1,195) ($8,459) ($1,253)equipment (j) (o)Marketing andbusiness (185) (755) (3,005) (3,631) (12,902)development (j) (k)(m) (n)Technology andinformation (169) (167) (2,396) (771) (13,099)services (j) (k)(n)Professional (2,269) (1,658) (1,392) (5,705) (4,847)services (j) (k) (n) (o)Fund administration (13,593) (10,129) (13,329) (35,842) (41,787)and outsourced services (j) (k)Amortization andother (458) (455) (1,022) (1,359) (9,534)acquisition-relatedcosts (m) (p)Other (j) (k) (m) 3,660 (9,630) 192 (6,297) (3,266)(n) (q)Subtotal ($15,292) ($25,242) ($22,147) ($62,064) ($86,688)Non-compensation adjustments Non-compensationexpense, as adjusted:Occupancy and $29,040 $28,126 $28,661 $85,631 $87,851equipmentMarketing and 7,377 5,762 24,313 30,634 71,184business developmentTechnology and 33,288 32,462 31,680 96,673 91,857information servicesProfessional 12,432 15,070 13,713 40,269 43,619servicesFund administration 12,603 13,924 15,096 40,797 44,061and outsourced servicesAmortization andother - - - - -acquisition-relatedcostsOther 8,341 4,273 11,722 21,326 30,364

Non-compensation $103,081 $99,617 $125,185 $315,330 $368,936expense, as adjusted (d) This presentation includes 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.

See Notes to Financial Schedules

This presentation includes non-GAAP measures. Our non-GAAP measures are notmeant to be considered in isolation or as a substitute for comparable U.S. GAAPmeasures, and should be read only in conjunction with our consolidatedfinancial statements prepared in accordance with U.S. GAAP. For a detailedexplanation of the adjustments made to comparable U.S. GAAP measures, see Notesto Financial Schedules.

See Notes to Financial Schedules

LAZARD LTD

Notes to Financial Schedules

(a)

Selected Summary Financial Information are non-GAAP measures. Lazard believes that presenting results and measures on an adjusted basis in conjunction with U.S. GAAP measures provides a meaningful and useful basis for comparison of its operating results across periods.(b)

A non-GAAP measure which excludes (i) revenue related to noncontrolling interests (see (j) below), (ii) gains 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, (iii) revenue related to distribution fees and reimbursable deal costs in accordance with the revenue recognition guidance and bad debt expense (see (k) below), (iv) for the nine month period ended September 30, 2019, private equity investment adjustment (see (l) below), (v) interest expense primarily related to corporate financing activities, and (vi) for the nine month period ended September 30, 2019, excess interest expense pertaining to Senior Debt refinancing (see (q) below).(c)

A non-GAAP measure which excludes (i) for the three and nine month periods ended September 30, 2019, expenses associated with business realignment plan (see (m) below), (ii) charges 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, and (iii) compensation and benefits related to noncontrolling interests (see (j) below).(d)

A non-GAAP measure which excludes (i) for the three and nine month periods ended September 30, 2019, expenses associated with business realignment plan (see (m) below), (ii) for the three and nine month periods ended September 30, 2019, expenses associated with ERP system implementation (see (n) below), (iii) expenses related to office space reorganization (see (o) below), (iv) expenses related to distribution fees and reimbursable deal costs in accordance with the revenue recognition guidance and bad debt expense (see (k) below), (v) amortization and other acquisition-related costs (see (p) below), (vi) for the nine month period ended September 30, 2019, charges pertaining to Senior Debt refinancing (see (q) below), and (vii) expenses related to noncontrolling interests (see (j) below).(e)

A non-GAAP measure which excludes (i) for the three and nine month periods ended September 30, 2019, expenses associated with business realignment plan (see (m) below), (ii) for the three and nine month periods ended September 30, 2019, expenses associated with ERP system implementation (see (n) below), (iii) expenses related to office space reorganization (see (o) below), (iv) amortization and for the three and nine month periods ended September 30, 2019, other acquisition-related costs (benefits) (see (p) below), (v) for the nine month period ended September 30, 2019, private equity investment adjustment (see (l) below), (vi) for the nine month period ended September 30, 2019, charges pertaining to Senior Debt refinancing (see (q) below), (vii) net revenue and expenses related to noncontrolling interests (see (j) below), and (viii) interest expense primarily related to corporate financing activities.(f)

Represents earnings from operations as a percentage of operating revenue, and is a non-GAAP measure.(g)

A non-GAAP measure which excludes (i) for the three and nine month periods ended September 30, 2019, expenses associated with business realignment plan (see (m) below), (ii) for the three and nine month periods ended September 30, 2019, expenses associated with ERP system implementation (see (n) below), (iii) expenses related to office space reorganization (see (o) below), (iv) for the three and nine month periods ended September 30, 2019, acquisition-related costs (benefits) (see (p) below), (v) for the nine month period ended September 30, 2019, private equity investment adjustment, (see (l) below), and (vi) for the nine month period ended September 30, 2019, charges pertaining to Senior Debt refinancing (see (q) below), net of tax benefits.(h)

A non-GAAP measure which includes units of the long-term incentive compensation program consisting of profits interest participation rights, which are equity incentive awards that, subject to certain conditions, may be exchanged for shares of our common stock. Certain profits interest participation rights and other participating securities may be excluded from the computation of outstanding stock equivalents for U.S. GAAP net income per share.(i)

Effective tax rate is a non-GAAP measure based upon the U.S. GAAP rate with adjustments for the tax applicable to the non-GAAP adjustments to operating income, generally based upon the effective marginal tax rate in the applicable jurisdiction of the adjustments. The computation is based on a quotient, the numerator of which is the provision for income taxes of $29,466, $23,583, and $17,507 for the three month periods ended September 30, 2020, June 30, 2020, and September 30, 2019, respectively, $79,949 and $77,637 for the nine month periods ended September 30, 2020 and 2019 and the denominator of which is pre-tax income of $105,568, $98,734, and $105,766 for the three month periods ended September 30, 2020, June 30, 2020, and September 30, 2019, respectively, $297,754 and $357,179 for the nine month periods ended September 30, 2020 and 2019.(j)

Noncontrolling interests include revenue and expenses related to Edgewater and ESC funds.(k)

Represents certain distribution fees and reimbursable deal costs paid to third parties for which an equal amount is excluded from both non-GAAP operating revenue and non-compensation expense, respectively, and excludes bad debt expense, which represents fees that are deemed uncollectible.(l)

Represents write-down of private equity investment to potential transaction value.(m)

Represents expenses associated with a business realignment which included employee reductions and the closing of subscale offices and investment strategies. (n)

Represents expenses associated with Enterprise Resource Planning (ERP) system implementation.(o)

Represents incremental rent expense related to office space reorganization.(p)

Primarily represents the change in fair value of the contingent consideration associated with certain business acquisitions.(q)

The company incurred charges related to the extinguishment of the remaining 4.25% Senior Notes maturing in November 2020. $168 million of the 2020 Notes were redeemed in March 2019 and the remaining $82 million have been redeemed in April 2019. The charges include a pre-tax loss on the extinguishment of $6.5 million and excess interest expense of $0.3 million (due to the period of time between the issuance of the 2029 notes and the settlement of the 2020 notes).NM

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CONTACT: Media Contact: Judi Frost Mackey +1 212 632 1428 judi.mackey@lazard.com Investor Contact: Alexandra Deignan +1 212 632 6886 alexandra.deignan@lazard.com