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TheStreet Open House

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

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CONFERENCE CALL

Lazard will host a conference call at 8:00 a.m. EST on Thursday, February 7, 2013, to discuss the company’s financial results for the fourth quarter and full year of 2012. The conference call can be accessed via a live audio webcast available through Lazard’s Investor Relations website at www.lazard.com, or by dialing 1 (888) 206-4835 (U.S. and Canada) or +1 (913) 312-1447 (outside of the U.S. and Canada), 15 minutes prior to the start of the call.

A replay of the conference call will be available by 10:00 a.m. EST February 7, 2013, through February 21, 2013, via the Lazard Investor Relations website, or by dialing 1 (888) 203-1112 (U.S. and Canada) or +1 (719) 457-0820 (outside of the U.S. and Canada). The replay access code is 4223141.

ABOUT LAZARD

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

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Cautionary Note Regarding Forward-Looking Statements

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

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

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

Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee the accuracy of our estimated targets, future results, level of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy or completeness of any of these forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. We are under no duty to update any of these forward-looking statements to conform our prior statements to actual results or revised expectations and we do not intend to do so.

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

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FINANCIAL ADVISORY ASSIGNMENTS

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

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

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

Mergers and Acquisitions (Announced)

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

  • Deutsche Telekom on the $32.8 billion combination of T-Mobile and MetroPCS
  • Microsoft in its role in Dell’s $24.4 billion going-private transaction
  • Anheuser-Busch InBev’s $20.1 billion acquisition of the remaining stake in Grupo Modelo it does not already own and Grupo Modelo’s related $1.9 billion sale of its 50% interest in Crown Imports to Constellation Brands
  • IntercontinentalExchange’s $8.2 billion acquisition of NYSE Euronext
  • Caisse des Dépôts’ €2.6 billion indirect acquisition of Silic from Groupama
  • Cerberus in Albertsons’ $3.6 billion acquisition of five grocery banners from SUPERVALU and tender offer for up to 30% of SUPERVALU’s outstanding public shares
  • Total’s €2.4 billion proposed sale of TIGF to a consortium
  • Ameristar Casinos’ $2.8 billion sale to Pinnacle Entertainment
  • Permian Mud Service (parent company of Champion Technologies and CorsiTech) in its $2.2 billion merger with Ecolab
  • PPG Industries on the $2.1 billion merger of its commodity chemicals business with Georgia Gulf
  • Athene Holding in its $1.6 billion acquisition of Aviva’s U.S. annuity and life insurance operations
  • The Special Committee of CNH Global on Fiat Industrial’s $1.7 billion acquisition of the remaining shares in CNH Global that it does not already own
  • CH Energy Group’s $1.5 billion sale to Fortis
  • Principal Financial Group’s $1.5 billion acquisition of Cuprum
  • LNR Property's $1.05 billion sale to Starwood Property Trust and Starwood Capital Group
  • EQT in the exchange of its natural gas distribution business with SteelRiver Infrastructure Partners for $720 million and the receipt of assets and other consideration
  • The Special Committee of CreXus Investment Corp. in the company’s sale to Annaly Capital Management for an implied valuation of $1.0 billion
  • Petra Foods’ $950 million sale of its cocoa ingredients business to Barry Callebaut
  • Sportingbet in its £485 million proposed sale to William Hill and GVC Holdings
  • Unilever in the $700 million sale of its Skippy peanut butter business to Hormel
  • Eastman Kodak’s $525 million sale of its digital imaging patents to a consortium
  • Qatar Holding on its approximately 12% stake in Xstrata in connection with the proposed merger with Glencore International
  • Caisse des Dépôts on the reorganization of Dexia
  • EADS on the reorganization of its governance and shareholding structure
  • Jereissati Group and Renosa in the merger of Norsa, Renosa and Guararapes
  • Scailex on the sale of an interest in Partner Communications to Saban Capital Group
  • Hera's merger with AcegasAps

Restructuring and Debt Advisory Assignments

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

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

  • Airlines: Allied Pilots Association with respect to American Airlines
  • Consumer/Food: Hostess Brands
  • Gaming, Entertainment and Hospitality: Indianapolis Downs, MSR Resorts
  • Power & Energy: A123 Systems
  • Professional/Financial Services: Ambac
  • Technology/Media/Telecom: Eastman Kodak, LightSquared

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

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

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ENDNOTES

1 A non-U.S. GAAP measure. See attached financial schedules and related notes for a detailed explanation of adjustments to corresponding U.S. GAAP results. We believe that presenting our results on an adjusted basis, in addition to the U.S. GAAP results, is the most meaningful and useful way to compare our operating results across periods.

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

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

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

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

LAZ-G

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