#1LAZARD Investor Presentation February 2021#2Safe Harbor This presentation contains certain statements, estimates and forecasts with respect to future performance and events. These statements, estimates and forecasts are "forward-looking statements." In some cases, forward-looking statements can be identified by the use of forward- looking terminology such as "may," "might," "will," "would,” “should,” “could,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict," "potential," "target," "goal" or "continue" or the negatives thereof or variations thereon or similar terminology. All statements other than statements of historical fact included in this presentation are forward-looking statements and are based on various underlying assumptions and expectations and are subject to known and unknown risks and uncertainties, and may include projections of our future financial performance based on our growth strategies, business plans and anticipated trends in our business. These forward-looking statements, including with respect to the current COVID-19 pandemic, 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, targets, goals or achievements expressed or implied in the 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 quarterly reports on Form 10-Q and current reports on Form 8-K, including the following: (a) a decline in general economic conditions or the global or regional financial markets, (b) 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"), (c) losses caused by financial or other problems experienced by third parties, (d) losses due to unidentified or unanticipated risks, (e) a lack of liquidity, i.e., ready access to funds, for use in our businesses, and (f) competitive pressure on our businesses and on our ability to retain and attract employees at current compensation levels. As a result, there can be no assurance that the forward-looking statements included in this presentation will prove to be accurate or correct. 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 to conform our prior statements to actual results or revised expectations and we do not intend to do so. This presentation uses non-GAAP measures for (a) operating revenue, (b) compensation and benefits expense, as adjusted, (c) compensation and benefits expense, awarded basis (d) non-compensation expense, as adjusted (e) earnings from operations, (f) pre-tax income, as adjusted, (g) pre-tax income per share, as adjusted (h) earnings from operations, awarded basis (i) operating margin, as adjusted (j) operating margin, awarded basis (k) net income, as adjusted, (I) net income per share, as adjusted, (m) awarded EPS and (n) free cash flow. Such 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. We believe that certain non-GAAP measures provide a meaningful and useful basis for assessing our operating results and comparisons between present, historical and future periods. See the attached appendices and related notes for a detailed explanation of applicable adjustments to corresponding U.S. GAAP measures. Unless otherwise indicated, all information in this presentation relates to Lazard Ltd and its direct and indirect subsidiaries on a consolidated basis as of December 31, 2020. LAZARD 1#3Our Firm Lazard's mission is to provide trusted financial advice and investment solutions to our clients. We have built a global network of relationships with key decision makers in business, government and investing institutions. We operate as a local firm in local markets and serve clients with our multinational resources and global perspective. Global Offices 40 Cities | Countries 25 FOUNDED NYSE LISTED 1848 2005 NEW YORK LONDON PARIS AMSTERDAM BUENOS AIRES CHARLOTTE CHICAGO HONG KONG HOUSTON LOS ANGELES MONTREAL NANTES MINNEAPOLIS SÃO PAULO SEOUL SINGAPORE BEIJING BOGOTÁ BORDEAUX BOSTON BRUSSELS DUBAI DUBLIN FRANKFURT GENEVA HAMBURG MEXICO CITY MILAN LYON MADRID MELBOURNE PANAMA CITY RIYADH SAN FRANCISCO SANTIAGO STOCKHOLM SYDNEY TOKYO TORONTO ZÜRICH 170+ Years Serving Clients LAZARD $2.52bn FY Operating Revenue As of December 31, 2020 $259bn ~3,100 Assets Under Management Employees 2#4Leadership and Diversification Anticipating and meeting the evolving needs of clients Asset Management • Locally established teams with global perspective • Investment platforms across asset classes Investment Strategies Multi- Regional Equities $72B and regions Emerging • Investment-led Markets manager; ~35% of Equities staff are investment $33B professionals Local Equities Serving a primarily institutional client base globally $49B Global Advisory Services Equities M&A $56B LAZARD Restructuring Sovereign Advisory Equity & Debt Advisory Private Capital Fixed Income Advisory Shareholder $44B Advisory Financial Advisory Global platform built over decades of commitment to local markets • Built-out advisory teams across sectors Unrivaled network of senior-level advisory bankers • Serving business and government globally LAZARD As of December 31, 2020 3#5Long-term Investment Thesis Lazard is a uniquely diversified, global financial advisory and investment manager with an established track record of performance Distinctive culture and people provide a sustainable foundation through macroeconomic cycles, market and industry evolution Seasoned expertise and innovative insights attract clients across the spectrum of industries and geographies Premier brand established in the world's developed and emerging markets, providing both stability and growth for our franchise LAZARD Demonstrated cost discipline and consistent focus on long-term value creation Two businesses, independent and complementary, provide diversified access to deep markets with independent demand dynamics LAZARD Strong capital structure and cash flow generation enables annual capital returns through dividends and share repurchases 4#6Our Purpose is Serving Clients Culture is central to delivering for our clients and our long-term success "We aim to provide a unique perspective with unparalleled execution" Clients first - Our success is derived from an ability to provide preeminent advice Deliver excellence - Insight, innovation and integrity underpins all that we do Global integration - Leveraging our partnership across continents and cultures LAZARD Diversity and collaboration - Derive our best ideas from a wealth of perspectives and experience - Destination for top talent – Investment and development of people, our most valuable asset Technology-driven - Agile and adaptive resources, investments in infrastructure and innovative applications 5#7Investor Highlights The Lazard Difference Investment Highlights Financial Strategy LAZARD CO 6#8The Lazard Difference A firm built across centuries, structured around the needs of our clients LAZARD Premier Brand Forward Thinking Quality of People 7#9Premier Brand Lazard is known globally for excellence, discretion, integrity and results. 11 One of the most influential financial institutions in the world" THE TIMES OF LONDON 11 Lazard's top-tier brand allows it to punch above its weight class" BARRON'S A formidable reputation in the world's boardrooms" FINANCIAL NEWS Showing bigger Wall Street rivals the power of simplicity" BREAKINGVIEWS 11 Success built on its bankers' discretion and its long-term relationships with clients" The Economist Lazard can tackle the most seemingly insurmountable crises" EUROMONEY One of the world's most influential investment banks" DER SPIEGEL LAZARD "The bank stands apart in the landscape of finance" Les Echos 8#10Quality of People Unique assemblage of experience, expertise, interests and characteristics 80+ Nationalities 25+ Average years of experience (MDs) 14 Average years of tenure (MDS) As of December 31, 2020 LAZARD Management Valuation Public Policy Research Resourceful Capital Raising Discreet Data Science Strategy Technology Leadership Medicine Fine Arts Investing Iconoclastic Family Asset Allocation Accounting Collaborative Education Professional LAZARD Sports Risk Management Mathematics Courageous Community Intellectual Government Negotiating Foreign Affairs Curious Engineering Governance Law ESG Science Thoughtful Taxation Analytical Industry Corporate Finance Philanthropy Creative Journalism Capital Markets Experience Expertise Interests Characteristics 9#11Forward Thinking Culture of innovation PIONEERING LEGACY CONTINUING INNOVATION 19th century • Private Banking Foreign Exchange LAZARD 20th century EVOLUTION 21st century . M&A Restructuring • International Equity . Sovereign Advisory Capital Structure Advisory Structured Credit Advisory Emerging Markets Equity • Capital Raising Advisory • Global Equity Private Fundraising • Emerging Markets Debt • Middle Market Advisory • Concentrated Strategies Shareholder Advisory Quantitative Strategies Secondary Fund Placement Discounted Assets Strategy • Dynamic Portfolio Solutions • ESG & Sustainable Investment Data Analytics 10#12Technology Driven We are well-positioned for the hybrid work environment Remote collaboration Infrastructure & Analytics Optimizing workflow connectivity Real-time engagement through productivity platforms: Webex, Jabber, Slack and Symphony 品 Virtual network access • Secure remote-access Enhanced cyber-security Customer-centric solutions Global information ecosystem • • Live, interactive town halls Lazard IQ knowledge center Tech academy training High-power processing Portfolio evaluation and execution, compliance and risk management Business continuity planning Critical function capabilities 母 Enterprise finance / risk Centralized global platform Data privacy • Multi-factor authentication Secure and single-source Transaction execution • Data room due diligence Trade processing • Digitization and personalization 360 portfolio view Specialized solutions CLOUD BASED DATA PLATFORM Technology architecture built to support firm-wide data and analytics initiatives in a global and scalable enterprise model LAZARD 11#13Proven Stability The Lazard Difference Investment Highlights • • Proven Stability High Performance Significant Opportunities for Growth Financial Strategy LAZARD 12#14Strong Operating Revenue Generation Significant scale provides stable platform through cycle $ in millions $3,000 2,750 2,500 2,250 $2,015 2,000 $2,755 $2,655 $2,546 $2,524 $2,340 $2,380 $2,344 $2,034 $1,979 $1,971 $1,884 1,506 1,388 1,357 1,750 $1,675 1,403 $1,618 1,207 1,280 $1,571 1,301 1,500 981 $1,358 1,121 992 1,049 1,241 1,250 1,024 990 1,000 973 865 750 1,240 1,242 1,120 500 1,024 1,083 1,159 1,031 1,111 835 883 882 717 250 548 629 596 464 2005 2006 2007 2008 LAZARD 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Asset Management Financial Advisory Corporate 13#15Lower Revenue Volatility than Peers Unique combination of stable businesses minimizes volatility over time 0.13 OPERATING REVENUE VOLATILITY (2010-2020)1 0.11 0.18 LAZARD 2 2 Bulge Bracket Traditional AM LAZARD 0.34 Independent FA² 0.50 2 Alt. AM Peer samples do not include firms that no longer exist, which, if included, could have resulted in higher volatility. Source: IMF WEO Database, FactSet, company filings. 1 2 Volatility for each firm calculated as one standard deviation of annual revenue over the period divided by average revenue. Bulge Bracket includes Bank of America, Citi, Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan, Morgan Stanley and UBS. Traditional Asset Management includes Alliance Bernstein, Blackrock, Eaton Vance, Franklin Resources, Invesco and T. Rowe Price. Independent Financial Advisory includes Evercore, Greenhill, Moelis and PJT. Alternative Asset Management includes Apollo, Blackstone, KKR and Sculptor Capital Management. 14#16Stable Asset Management Business Assets Under Management provides stability to long-term revenue generation Average AUM¹ ($ in billions) $250 200 150 $131 $123 $104 $97 100 50 50 $241 $234 $227 $225 $196 $196 $195 $174 $152 $156 $137 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 LAZARD 1 Average Assets under management as of December 31 each year 15#17High Performance The Lazard Difference Investment Highlights • • Proven Stability High Performance Significant Opportunities for Growth Financial Strategy LAZARD 16#18High Performance Performance across businesses leads to strong results $2.52bn FY operating revenue 2020 $849mn Record quarterly operating revenue Q4 2020 $259bn Record year-end assets. under management Q4 2020 $365mn FY return of capital to shareholders 2020 $509mn Record Financial Advisory quarterly operating revenue Q4 2020 $336mn Asset Management operating revenue Q4 2020 LAZARD As of December 31, 2020 17#19Increasing Market Share Market share has grown significantly since Lazard's IPO FINANCIAL ADVISORY MARKET SHARE1 ACTIVE AUM MARKET SHARE2 Lazard Rank 9th 7.0% +25% 6th 8.7% 0.25% +64% 0.41% 2005 2020 2005 2020 3 Source: Company filings, BCG reports. 1 Calculated as a percentage of the top ten financial advisory firms by revenue LAZARD 2 3 Active AUM estimated based on annual BCG asset management reports and excludes alternatives Global assets under management estimated based on 2019 assets 18#20Financial Advisory Performance Significant growth in earnings from operations Operating Revenue ($ in millions) $1,600 1,400 1,200 1,000 800 600 400 200 Earnings from Operations, Awarded Basis ($ in millions) $500 $1,403 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 | Financial Advisory Operating Revenue LAZARD Earnings from Operations, Awarded Basis 19 400 300 200 100#21Asset Management Performance Doubling of AUM since financial crisis and stable fees drive earnings AUM1 ($ in billions) Earnings from Operations, Awarded Basis ($ in millions) $250 200 150 100 50 50 2005 2006 2007 2008 2009 2010 AUM Avg. Fees 45 (bps) 46 46 45 48 LAZARD 1 52 52 $259 $600 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Earnings from Operations, Awarded Basis 54 ....4 53 52 42 52 53 53 Assets under management as of December 31 each year 50 51 49 47 45 20 500 400 300 200 100#22Significant Opportunities for Growth The Lazard Difference Investment Highlights Proven Stability High Performance Significant Opportunities for Growth Financial Strategy LAZARD 21#23Growth Framework Stable foundation and high performance create multiple growth opportunities • • Inorganic growth Addition of independent teams Acquisitions Ongoing investments LAZARD • Selective hiring • Seeding new strategies • Technology infrastructure Organic growth . • Investment platform extensions New advisory services. 22#24Investing in Financial Advisory Growth Increasing our total addressable market by scaling the franchise Minneapolis Chicago 2016 Acquired banking boutique to serve growing Canadian business 2006-2017 Built inbound and outbound M&A advisory team in China Toronto 2013-2017 Expanded presence in US Midwest 2017 Opened Mexico office Mexico Bogota Panama City 2012 Fully integrated Brazilian advisory operations Santiago Sao Paulo Buenos Aires 2016 Fully integrated Latin American operations ex-Brazil and Mexico Source: Dealogic, Capital IQ LAZARD 1 234 2012-2014 Expanded coverage in Africa Beijing Tokyo Hong Kong 2016-2017 Reinforced dedicated advisory team in Japan REGION # OF COMPANIES > $1BN (BY MARKET CAP) 1 # OF M&A DEALS > $1BN (2012-2020) 2 US Midwest 135 354 Canada 209 174 Latin America 3 293 173 Japan 711 163 China 2,070 2744 France 132 176 Compared to Germany 174 197 United Kingdom 255 325 Companies with market cap > $1bn as of December 31, 2020 Based on announcement date between January 1, 2012 and December 31, 2020. Number based on target nationality 23 Latin America includes Argentina, Brazil, Chile, Colombia, Mexico, Panama and Peru Inbound and outbound transactions only#25Asset Management Team Additions Integral part of successful growth strategy 2010 EM Core Equity 2005 • Japanese Equity EM Debt . Korean Equity LAZARD 2015 • European Long/Short Equity 2014 . Middle East/ North Africa Equity 2007 • Rathmore Convertible Arbitrage . Quantitative Equity 2016 2018 • International Equity Value 2020 • • Bottom Billion Coherence Long/ Short Credit Digital Health Commodities 2019 • Labs (XAI) US Systematic Equity 24#26Financial Advisory Diversity of Revenues Sophisticated, local financial expertise, paired with global execution capabilities LAZARD Shareholder Restructuring Advisory Advisory • Activism Chapter 11 • Governance · Investor analytics Out-of-court restructuring • Recapitalization Liability/liquidity management Asset divestiture Mergers & Acquisition Advisory Public/private valuation • Industry specialization Cross-border Special committee Mega, large, mid, Public & Private Capital Sovereign Advisory Advisory Equity Debt Public to private equity Fundraising and capital solutions small capitalization • Structured Liability/liquidity management Bond negotiation Capital adequacy LAZARD finance 25#27Ability to Innovate, Scale Investment Strategies New strategies represent more than half of our total AUM NEW STRATEGIES1 AS % OF TOTAL AUM 5% 5% 58% 54% 50% 49% 45% 46% 40% 35% 30% 28% 23% 19% 20% 15% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Note: Data excludes Lazard Frères Gestion LAZARD 1 Includes strategies with less than $1 billion AUM as of December 31, 2005 and strategies launched after December 31, 2005 26#28Investment Strategies Scaled in Recent Years Demonstrated ability to seed new portfolios and scale quickly Strategy/Platform Inception Current AUM ($B) Quantitative Equity Platform 2008 >$21 International Strategic Equity 2001 ~$20 Global Listed Infrastructure 2005 ~$15 Scaled Strategies Emerging Markets Debt Platform 2010 ~$14 US Equity Concentrated 2003 >$8 Convertibles Platform 2007 >$8 Global Robotics 2015 >$7 Product Focus Global & US Sustainable Equity New Opportunities for Growth Global & International Quality Growth US Equity Focus Thematic Equity European Fixed Income Credit Capital Fi Alternative Investments LAZARD As of December 31, 2020 Dynamic Portfolio Solutions 27#29Sustainable Investing Framework Complex global issues create secular opportunities for active investment Delivering a unique approach to sustainable investment Continuous innovation Connected intelligence Impactful ownership New ESG-oriented product launches: Global Sustainable US Sustainable Minerva Gender Diversity LAZARD ➤ Integrated research Bespoke, fundamental analysis is vital to identify and value material ESG issues Global platform and sector experts leverage diversity of perspectives within and across teams ➤ Sustainable alpha Sector and company-specific insights. • Active engagement • Differentiated investment views ➤ Organic growth • Innovative and niche product offerings ⚫ Trusted partner with established performance 28#30Financial Strategy The Lazard Difference Investor Highlights Financial Strategy LAZARD 29#31Discipline on Costs Consistency in compensation and non-compensation expenses while increasing investment 80% 72% Target ranges¹ established in 2012 Comp: Mid to high-50s percentage range Non-comp: 16% to 20% 70% 70% 68% 67% 62% 62% 59.4% 60% 58.2% 56.3% 56.0% 56.2% 55.6% 55.8% 57.7% 59.8% 50% 40% 30% 22% 21% 21% 21.4% 20.1% 19.6% 19% 18.8% 18.2% 18.5% 17.4% 17.6% 17.1% 20% 17% 17% 10% 0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 ■Compensation Ratio Non-Compensation Ratio Note: Compensation ratio calculated based on awarded compensation; non-compensation ratio calculated based on non-compensation expense, as adjusted LAZARD 1 Target ranges over the cycle for awarded compensation and non-compensation, as adjusted 30#32Focus on Operating Margins Increased revenues and cost management has resulted in significant impact on operating margin, awarded basis LAZARD 12.7% 20.4% 25.1% 2005-2009 Average 2010-2014 Average 2015-2020 Average 31#33Operating Margin Growth Operating margin, awarded basis increased in both businesses since 2005 FINANCIAL ADVISORY 21% 19% 28% 28% ASSET MANAGEMENT 41% 38% '05-'09 Average '10-'14 Average '15-'20 Average '05-'09 Average '10-'14 Average '15-'20 Average LAZARD Segment results exclude expenses not directly associated with the businesses. See the "Reconciliation of U.S. GAAP Operating Income to Earnings from Operations, Awarded Basis" slides for additional information regarding overhead allocations. 32#34Capital Management Strategy Commitment to shareholder value creation Goals Gradually increase common dividend over time Repurchase shares to offset dilution from year-end share-based compensation Retain appropriate cash balance to support operations, accruals consistent with our business, and regulatory requirements Disciplined approach to identifying and executing on growth and investment opportunities Return capital to shareholders annually in the form of additional share repurchases and/or extra cash dividends LAZARD Note: Subject to other uses of capital 33#35Strong Balance Sheet and Liquidity Disciplined leverage profile and consistent access to capital markets provides flexible balance sheet to navigate varying market environments Balanced Debt Profile with Long-term Maturities Strong liquidity profile • Current cash and cash equivalents -$1,390 million • Undrawn credit facility - $200 million ($ in millions) $200 $1,390 $500 $500 $400 $300 Investment grade capital structure • Senior Notes - $1.7 billion • Nearest maturity ~4 years • No financial covenants Weighted average coupon ~4.13% 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 I Cash & cash equivalents Undrawn revolver I Senior Notes Investment Grade Credit Ratings Fitch BBB+ Stable S&P BBB+ Stable Moody's Baa3 Negative LAZARD As of December 31, 2020 34#36Significant Cash Generation Significant capital return to shareholders in addition to offsetting dilution from stock-based compensation $ in millions $1,200 $1,023 $1,000 $268 $850 $800 $692 $716 $253 $584 $600 $261 $273 $396 $416 $424 $227 $400 $341 $365 $95 $102 $236 $206 $66 $151 $146 $154 $168 $122 $55 $200 -$29 $72 $59 $146 $169 $186 $195 $206 $200 $197 $91 $- 2013 2014 2015 2016 2017 2018 2019 2020 $269 $428 $480 $410 $501 $539 $385 $410 ■Dividends ■Special dividends Shares repurchased Shares repurchased to offset dilution Net income, as adjusted LAZARD As of December 31 for each year 1 Estimated based on annual amortization expense for share-based incentive plans within the Company's annual consolidated statements of operations 35#37Strong Capital Returns to Shareholders. Balancing dividend growth and share repurchases through the cycle Annual Dividends¹ $1.30 $1.20 $1.20 $0.50 $1.00 $1.88 $1.88 $1.76 $1.64 $1.52 $1.40 $0.25 $1.20 $1.05 2013 2014 2015 2016 ■ Dividends 1 LAZARD 23 Share Repurchases² (Shares in millions) 3.5 4.1 3.4 8.6 7.0 12.2 13.7 2.9 3 Diluted Weighted Average Shares Outstanding ³ 135.4 134.1 133.3 132.9 132.7 126.8 115.5 115.8 2017 2018 2019 2020 Special Dividends 2013 2014 2015 2016 2017 2018 2019 2020 Annual dividend values are calculated with respect to fiscal year performance and paid following the announcement of quarterly results Share repurchases for the full year and year to date as of December 31, 2020 Fourth quarter ending diluted weighted average shares outstanding as of December 31 each year 36#38LAZARD Supplemental Financial Information#39Corporate Structure & Tax Reform Considerations Corporate Structure Investor Diversification Impact of 2017 Tax Reform - Bermuda corporation with common stock traded on the NYSE Corporate governance structure consistent with U.S. peers and files annual proxy statement • Files 10-Ks and 10-Qs with SEC, including IRS Employer Identification Number Partnership structure for U.S. tax purposes K-1 issuer for dividends - no Unrelated Business Taxable Income (UBTI) or Effectively Connected Income (ECI) No separate state filing requirements, appropriate for tax-exempt investors Foreign investors only subject to withholding tax on U.S. portion of dividends Broadly diversified investor base includes key indexes, mutual funds and global institutions Included in Russell and CRSP market capitalization weighted indexes, and Dow Jones U.S. Select Dividend Index Approximately 18% of Lazard holders identified as index investors, compared to generally de minimis for publicly traded partnerships Float approximately 97% held by a broad range of active and passive institutional investors Representing approximately 230 mutual funds and 80 ETFs US tax reform provisions (2017) suggest conversion to a U.S. C-corporation would result in a significantly higher tax rate - - Recent analysis indicates a conversion under the new tax law could add approximately 10 percentage points to our steady-state effective tax rate Net operating losses (NOLs) restrict our ability to use foreign tax credits and to access the new special deduction for foreign earnings, resulting in double taxation for non-U.S. earnings LAZARD - Expansion of categories of foreign income to be taxed would result in increased tax payments 38#40Unaudited U.S. GAAP Selected Financial Information ($ in millions) 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Net revenue $1,301 % Growth 15% $1,494 $1,918 28% $1,557 (19%) (2%) $1,531 $1,905 24% $1,830 (4%) $1,912 $1,985 5% 4% $2,300 $2,354 16% 2% $2,333 (1%) $2,644 13% $2,826 7% $2,587 $2,566 (8%) (1%) Operating Expenses: Compensation and benefits 699 891 1,123 1,128 1,309 1.194 1,169 1,351 1,279 1,314 1,320 1,341 1,513 1,515 1,563 1,551 1 Non-Compensation 260 275 376 404 404 468 425 437 490 467 1,051 475 306 631 631 514 Operating Income (loss) $342 $328 $419 $25 ($182) $243 $236 $124 $216 $519 ($17) $517 $825 $681 $393 $502 % of Net revenue 26% 22% 22% 2% (12%) 13% 13% 6% 11% 23% (1%) 22% 31% 24% 15% 20% LAZARD 1 Includes provision (benefit) pursuant to tax receivable agreement. For additional detail, see "Reconciliation of U.S. GAAP Non-Compensation Expense to Non-Compensation, As Adjusted" on page 42. 39#41Unaudited Reconciliation of U.S. GAAP Net Revenue to Operating Revenue ($ in millions) Net revenue U.S. GAAP Basis Adjustments: (Revenue) loss related to noncontrolling interests 1 (Gains) losses related to Lazard Fund Interests ("LFI") and other similar arrangements 2 3 Interest Expense Gain on repurchase of subordinated debt 4 MBA Lazard acquisition and Private Equity revenue adjustment Distribution fees, reimbursable deal costs and bad debt expense Private Equity investment adjustment 7 Expenses associated with the business realignment 8 6 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 $1,301 $1,494 $1,918 $1,557 $1,531 $1,905 $1,830 $1,912 $1,985 $2,300 $2,354 $2,333 $2,644 $2,826 $2,587 $2,566 (2) (5) (5) 13 (7) (16) (17) (14) (15) (15) (16) (21) (16) (19) (23) (11) 3 (7) (14) (7) 4 (3) (23) 14 (32) (41) 59 82 102 105 94 90 86 80 78 62 50 50 48 50 50 54 54 75 75 75 (18) '1 (12) (13) Operating revenue $1,358 $1,571 $2,015 $1,675 $1,618 $1,979 $1,884 $1,971 $2,034 $2,340 $2,380 $2,344 Operating Revenue is a non-GAAP measure which excludes: 1 Noncontrolling interests principally related to Edgewater and ESC Funds, and is a non-GAAP measure. (121) (76) (65) 12 4 $2,655 $2,755 $2,546 $2,524 2 Changes in the fair value of investments held in connection with LFI and other similar deferred compensation arrangements for which a corresponding equal amount is excluded from compensation and benefits expense. 3 Interest expense related to corporate financing activities because such expense is not considered to be a cost directly related to the revenue of our business. For year ended 2016, includes excess interest of $0.6 million due to the delay between the issuance of the 2027 notes and the settlement of the 2017 notes. For year ended 2015, includes excess interest expense of $2.7 million due to the delay between the issuance of the 2025 senior notes and the settlement of the 2017 notes. For the year ended 2018, excess interest expense of $0.3 million due to the period of time between the issuance of 2028 notes and the settlement of 2020 notes. For the first quarter 2019, excess interest expense of $0.3 million due to the period of time between the issuance of the 2029 notes and the settlements of 2020 notes. 4 Gain related to the repurchase of the then outstanding subordinated promissory note due to the non-operating nature of such transaction. 5 For the year ended December 31, 2016, represents a gain relating to the Company's acquisition of MBA Lazard resulting from the increase in fair value of the Company's investment in the business. For the year ended December 31, 2015, represents revenue relating to the Company's disposal of the Australian private equity business which was adjusted for the recognition of an obligation, which was previously recognized for U.S. GAAP. 6 Represents certain distribution fees and reimbursable deal costs paid to third parties for which an equal amount is excluded from both non-GAAP revenue and non-compensation expensive, respectively, and excludes bad debt expense, which represents fees that are deemed uncollectible. 7 Represents write-down of private equity investment to potential transaction value. 8 Represents losses and expenses associated with the business realignment which includes employee reductions and closing of subscale office and investment strategies. LAZARD 40#42Unaudited Reconciliation of U.S. GAAP Compensation to Adjusted/Awarded Compensation ($ in millions) 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Compensation and benefits expense - U.S. GAAP basis $699 $891 $1,123 $1,128 $1,309 $1,194 $1,169 $1,351 $1,279 $1,314 $1,320 $1,341 $1,513 $1,515 $1,563 $1,551 Adjustments: Charges pertaining to staff reductions 2005 adjustment 23 LAM Equity Charge' 2009 and 2010 adjustments 6 Compensation related to noncontrolling interests 5 (Charges)/Credits pertaining to LFI and other similar arrangements Expenses associated with the business realignment Charges pertaining to cost saving initiatives 2 31 75 (197) (147) (4) 3 33 (14) བྱེÊ (5) 4 (8) (8) (11) (11) (24) 14 (32) (41) (57) ខ្លួន (100) (52) (22) 27 Expenses associated with ERP system implentation Private Equity incentive compensation 4 (12) Compensation and benefits expense, as adjusted 774 891 1,123 931 1,160 1,166 1,168 1,218 1,197 1,302 1,319 1,325 Amortization of deferred incentive awards (23) (105) (238) (333) (241) (289) (335) (298) (299) (321) (352) 8 Total cash compensation and benefits 774 868 1,018 693 827 925 879 883 899 1,003 998 973 1,481 1,517 1,464 1,502 (367) (376) (368) (384) 1,114 1,141 1,096 1,118 9 Deferred year-end incentive awards Sign-on and other special deferred incentive awards 116 204 337 352 239 293 282 272 291 325 336 342 351 378 361 364 10 13 88 180 39 27 40 42 22 14 26 30 36 46 38 55 Adjustment for actual/estimated forfeitures 11 (14) (24) (35) (23) (16) (27) (28) (27) (27) (25) (27) (28) (25) (28) (26) (27) Compensation and benefits expense - Awarded basis $876 $1,061 $1,408 $1,202 $1,089 $1,218 $1,173 $1,170 $1,185 $1,317 $1,333 $1,317 $1,476 $1,537 $1,469 $1,510 % of Operating revenue - Awarded basis 65% 68% 70% 72% 67% 62% 62% 59% 58% 56% 56% 56% 56% 56% 58% 60% Memo: Operating Revenue $1,358 $1,571 $2,015 $1,675 $1,618 $1,979 $1,884 $1,971 $2,034 $2,340 $2,380 $2,344 $2,655 $2,755 $2,546 $2,524 LAZARD See endnotes for information regarding non-GAAP adjustments. 41#43Unaudited Reconciliation of U.S. GAAP Non-Compensation Expense to Non-Compensation, As Adjusted ($ in millions) Non-Compensation expense U.S. GAAP basis Adjustments: IPO related costs ("TRA") 15 24 Amortization and other acquisition-related costs (benefits) Provision for counterparty defaults 7 14 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 $260 $275 $376 $404 $404 $468 $425 $437 $490 $467 $1,051 $475 $306 $631 $631 $514 LAM Equity Charge Restructuring charges 17 Non-compensation related to noncontrolling interests 5 Write-off of Lazard Alternative Investment Holdings option prepayment Provision for a lease contract for U.K. facility Expenses associated with the business realignment Charges pertaining to cost saving initiatives 16 16 31 Charges pertaining to staff reductions 2 Charges pertaining to Senior Debt refinancing 13 Loss (gain) on partial extinguishment of TRA obligation Expenses associated with ERP system implementation Expenses related to office space reorganization Expenses associated with Lazard Foundation 29 22 27 12 Distribution fees, reimbursable deal costs, and bad debt expense 28 Non-compensation expense, as adjusted % of Operating revenue Memo: Operating Revenue LAZARD (3) (6) (17) (17) (21) -5 1 22 (5) ཆེ,,རྒྱས (2) (18) (548) (8) (12) (8) (10) (6) (6) (36) (63) (87) (2) 205 (2) (2) G (2) (2) .. 203 (10) 166 ล (19) (2) (2) (2) (7) 33 13) (54) (13) (54) (60) (1) (3) (7) .. (25) (27) (11) (2) (10) (121) སྐྱེ་བྱེ་བུ (17) (13) (76) (65) $257 $269 $338 $368 $337 $368 $400 $421 $409 $441 $434 $434 $461 $484 $499 $432 19% 17% 17% 22% 21% 19% 21% 21% 20% 19% 18% 19% 17% 18% 20% 17% $1,358 $1,571 $2,015 $1,675 $1,618 $1,979 $1,884 $1,971 $2,034 $2,340 $2,380 $2,344 $2,655 $2,755 $2,546 $2,524 See endnotes for information regarding non-GAAP adjustments. 42#44Unaudited Reconciliation of U.S. GAAP Net Income to Net Income, As Adjusted ($ in millions, except per share values) Net income attributable to Lazard Ltd - U.S. GAAP Basis Adjustments: 2012 2013 2014 2015 2016 2017 2018 2019 2020 $84 $160 $427 $986 $388 $254 $527 $287 $402 Charges pertaining to staff reductions Charges pertaining to cost saving initiatives Expenses associated with the business realignment Amount attributable to LAZ-MD Holdings Tax (benefit) allocated to adjustments Private Equity incentive compensation 4 2 1 103 31 8ཤྩ 25 65 18 18 Charges pertaining to Senior Debt refinancing 13 Gain on partial extinguishment of TRA obligation (net of tax) Recognition of deferred tax assets (net of TRA accrual) MBA Lazard acquisition and Private Equity revenue adjustment Valuation Allowance for changed tax laws 26 Acquisition-related (benefits)/costs 22 21 20 25 Reduction of deferred tax assets (net of TRA reduction) Reduction of tax receivable agreement obligation 15 15 27 12 29 30 Expenses associated with ERP system implementation Expenses related to office space reorganization Expenses associated with Lazard Foundation Private Equity investment adjustment Adjustment for full exchange of exchangable interests 19. Tax adjustment for full exchange Amount attributable to LAZ-MD Holdings Net Income, as adjusted Weighted average shares outstanding: U.S. GAAP, diluted As adjusted, diluted Diluted Net Income per share: U.S. GAAP Basis As adjusted 68 (2) (1) (21) (23) (15) (13) (10) (27) (4) 12 54 63 4 7 (259) (294) (12) (13) 12 34 7 (19) 17 217 (6) 25 29 17 11 2 10 'G' (1) (0) 13 12 (1) 7 2 1 $195 $269 $428 $480 $410 $501 $539 $385 $410 129,326 133,737 133,813 133,245 135,117 133,737 133,813 133,245 132,634 132,634 132,480 129,768 116,080 113,483 132,480 129,768 117,348 113,904 $0.65 $1.21 $3.20 $7.40 $2.92 $1.91 $4.06 $2.44 $3.54 $1.44 $2.01 $3.20 $3.60 $3.09 $3.78 $4.16 $3.28 $3.60 LAZARD See endnotes for information regarding non-GAAP adjustments. 43#45Earnings from Operations - As Adjusted/Awarded ($ in millions) 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 As Adjusted Operating Revenue $1,358 $1,571 $2,015 $1,675 $1,618 $1,979 $1,884 $1,971 $2,034 $2,340 $2,380 $2,344 $2,655 $2,755 $2,546 $2,524 Compensation and benefits 774 891 1,123 931 1,160 1,166 1,168 1,218 1,197 1,302 1,319 1,325 1,481 1,517 1,464 1,502 Non-Compensation expense 257 269 338 368 337 368 400 421 409 441 434 434 461 484 499 432 Earnings from Operations $327 $411 $554 $376 $121 $445 $316 $332 $428 $597 $627 $585 $713 $754 $583 $590 Operating Margin, As Adjusted 24% 26% 27% 22% 7% 22% 17% 17% 21% 26% 26% 25% 27% 27% 23% 23% Adjusted EPS $1.72 $2.24 $2.77 $1.65 $0.09 $2.06 $1.31 $1.44 $2.01 $3.20 $3.60 $3.09 $3.78 $4.16 $3.28 $3.60 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Awarded Operating Revenue $1,358 $1,571 $2,015 $1,675 $1,618 $1,979 Compensation and benefits 876 1,061 1,408 1,202 1,089 1,218 $1,884 1,173 $1,971 $2,034 $2,340 $2,380 $2,344 $2,655 1,170 1,185 1,317 1,333 1,317 1,476 $2,755 $2,546 $2,524 1,537 1,469 1,510 Non-Compensation expense 257 269 338 368 337 368 400 421 409 441 434 434 461 484 499 432 Earnings from Operations $224 $241 $269 $105 $192 $393 $311 $380 $440 $582 $613 $593 $718 $734 $578 $582 Operating Margin, Awarded Basis 16% 15% 13% 6% 12% 20% 17% 19% 22% 25% 26% 25% 27% 27% 23% 23% LAZARD 44#46Non-GAAP - Unaudited Supplemental Segment Information ($ in millions) 2016 2017 Financial Advisory 2018 Asset Management 2019 2020 2016 2017 2018 2019 2020 2016 2017 Corporate 2018 2019 2020 Operating Revenue % Growth $1,301 $1,388 $1,506 $1,357 $1,403 $1,031 $1,240 $1,242 $1,159 2% 7% 9% (10%) 3% (5%) 20% 0% $1,111 (7%) (4%) $2,344 $2,655 (2%) 13% $2,755 $2,546 $2,524 4% (8%) (1%) Compensation and benefits, Awarded basis $755 $830 $881 $837 $856 $454 $521 $524 $498 $514 $108 $125 $132 $134 $140 % of Operating Revenue 58% 60% 58% 62% 61% 44% 42% 42% 43% 46% 5% 5% 5% 5% 6% Non-Compensation expense % of Operating Revenue $166 $180 $180 $188 $144 $170 $181 $188 $186 $175 $98 $100 $116 $125 $113 13% 13% 12% 14% 10% 16% 15% 15% 16% 16% 4% 4% 4% 5% 4% Earnings from Operations, Awarded basis $380 $378 $445 $332 $403 $407 $538 $530 $475 $423 Operating Margin, Awarded basis 29% 27% 30% 24% 29% 40% 43% 43% 41% 38% 1 LAZARD 2 Segment results exclude expenses not directly associated with the businesses. See the "Reconciliation of U.S. GAAP Operating Income to Earnings from Operations, Awarded Basis" for additional information regarding overhead allocations on pages 46-48. Awarded compensation and non-compensation amounts recorded in the Corporate segment are measured as a percentage of total Lazard operating revenue. 45#47Unaudited Reconciliation of U.S. GAAP Operating Income to Earnings from Operations, Awarded Basis ($ in millions) Net Revenue - U.S. GAAP Basis Adjustments (a); Revenue related to noncontrolling interests 5 (Gain) loss related to LFI and other similar arrangements Interest expense MBA Lazard acquisition and Private Equity revenue adjustment Losses associated with the business realignment Private Equity investment adjustment 30 Distribution fees, reimbursable deal costs and bad debt expense Operating revenue 28 Operating Income (loss) - U.S. GAAP Basis Adjustments: Sum of Adjustments - Revenue - U.S. GAAP vs. Operating revenue (from above) Sum of Adjustments - Compensation and benefits expense, as adjusted to awarded basis (b, c) Charges (credits) pertaining to LFI and other similar arrangements 3 Operating expenses related to noncontrolling interests Charges pertaining to Senior Debt refinancing 13 Amortization and other acquisition-related costs" Provision (benefit) pursuant to the tax receivable agreement 15 Loss (gain) on partial extinguishment of TRA obligation 22 Expenses related to office space reorganization 12 Expenses associated with the business realignment Distribution fees, reimbursable deal costs and bad debt expense Expenses associated with Lazard Foundation 29 31 28 Expenses associated with ERP system Implementation Corporate support group allocations to business segments Total adjustments 27 (c) Earnings from Operations, Awarded basis. Operating Margin, Awarded basis Financial Advisory 2016 2017 2018 2019 2020 2016 2017 Asset Management 2018 Corporate Total 2019 2020 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 $1,301 $1,388 $1,556 $1,374 $1,421 $1,052 $1,256 $1,332 $1,237 $1,167 ($20) $1 ($61) ($25) ($22) $2,333 $2,644 $2,826 $2,587 $2,566 (21) (16) (19) (23) (8) (0) (3) (21) (16) (19) (23) (11) (3) (23) 14 (32) (41) (3) (23) 14 (32) (41) 48 50 54 75 74 (13) 48 (13) 50 54 75 74 4 12 12 $1,301 $1,388 (49) $1,506 (20) $1,357 (17) $1,403 (72) (56) (48) (0) (121) (76) (65) $1,031 $1,240 $1,242 $1,159 $1,111 $12 $27 $7 $30 $9 $2,344 $2,655 $2,755 $2,546 $2,524 $284 $244 $357 $148 $290 $281 $445 $420 $350 $306 ($48) $136 ($96) ($105) ($94) $517 $825 $681 $393 $502 (49) (16) (17) (21) (16) (89) (79) (56) 32 27 68 55 31 11 (15) 6 (24) (11) (24) 19 (1) 7 3 10 4 (3) 3 6 8 4 23 (14) 32 41 4 14 10 13 13 10 0 14 6 3 (19) 17 32 32 36 22 50 20 17 17 72 56 48 (203) (6) 0 11 4 8 =॰%༅, ཅོ (72) (40) (20) (5) (14) 32 13 13 7 6 9 (19) 17 (203) (6) 1 11 2 4 - 65 122 76 སྦྱེ@¥༅ ,,, ༠。,༔ (42) (8) 41 10 0 13 65 10 10 12 16 9 107 108 114 125 137 82 288 12 13 8 1 2 25 29 17 88 96 106 105 (189) (194) (210) (231) (241) 2 96 135 88 184 113 126 93 111 125 117 (146) (335) (144) (124) (150) 76 (107) 53 185 80 $380 $378 $445 $332 $403 $407 $538 $530 $475 $423 ($194) ($199) ($240) ($229) ($244) $593 $718 $735 $578 $582 29% 27% 30% 24% 29% 40% 43% 43% 41% 38% nm nm nm nm nm 25% 27% 27% 23% 23% LAZARD Notes: (a) See "Reconciliation of U.S. GAAP Net Revenue to Operating Revenue" on page 40. (b) See "Reconciliation of U.S. GAAP Compensation to Adjusted/Awarded Compensation" on page 41. (c) Operating margins for Financial Advisory and Asset Management reflect a reallocation of expenses from Corporate to the business segments. For all numerical footnotes, see endnotes for information regarding non-GAAP adjustments. 46#48Unaudited Reconciliation of U.S. GAAP Operating Income to Earnings from Operations, Awarded Basis ($ in millions) Net Revenue U.S. GAAP Basis Adjustments (a): Interest expense Operating revenue Financial Advisory 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 $865 $973 $1,240 $1,023 $987 $1,120 $992 $1,049 $981 $1,207 $1,280 1 1 4 1 $865 $973 $1,241 $1,024 $991 $1,121 $992 $1,049 $981 $1,207 $1,280 $276 $251 $319 $226 ($12) $169 $62 ($9) $21 $229 $274 Operating Income - U.S. GAAP Basis Adjustments: 1 Sum of Adjustments - Revenue - U.S. GAAP vs. Operating revenue (from above) Sum of Adjustments - Compensation and benefits expense, as adjusted to awarded basis (b, c) Charges pertaining to cost saving initiatives 1 1 4 1 (57) (128) (191) (175) 84 (13) 17 2010 adjustments 6 20 Amortization and other acquisition-related costs 2005 Adjustments 23 14 Corporate support group allocations to business segments Total adjustments Earnings from Operations, Awarded basis Operating Margin, Awarded basis (c) 22 80 36 18 (5) (14) 77 48 (63) 71 72 83 96 93 97 96 102 95 99 102 (49) (56) (85) (74) 181 105 113 215 161 94 88 $227 $195 $234 $152 $169 $274 $175 $206 $182 $323 $362 26% 20% 19% 15% 17% 24% 18% 20% 19% 27% 28% LAZARD Notes: (a) See "Reconciliation of U.S. GAAP Net Revenue to Operating Revenue" on page 40. (b) See "Reconciliation of U.S. GAAP Compensation to Adjusted/Awarded Compensation" on page 41. (c) Operating margins for Financial Advisory and Asset Management reflect a reallocation of expenses from Corporate to the business segments. For all numerical footnotes, see endnotes for information regarding non-GAAP adjustments. 47#49Unaudited Reconciliation of U.S. GAAP Operating Income to Earnings from Operations, Awarded Basis ($ in millions) Net Revenue U.S. GAAP Basis Adjustments (a): Revenue related to noncontrolling interests 5 Interest expense MBA Lazard acquisition and Private Equity revenue adjustment Operating revenue 2005 2006 2007 2008 2009 Asset Management 2010 2011 2012 2013 2014 2015 $466 $553 $725 $615 $602 $850 $897 $896 $1,039 $1,135 $1,111 (2) (5) (8) 13 (7) (15) (14) (14) (15) (15) (16) 1 1 1 (12) $464 $549 $717 $629 $596 $835 $883 $882 $1,024 $1,120 $1,083 $116 $135 $185 ($63) $97 $265 $268 $237 $335 $385 $374 Operating Income - U.S. GAAP Basis Adjustments: Sum of Adjustments - Revenue - U.S. GAAP vs. Operating revenue (from above) (2) (4) (8) 14 (6) (15) (14) (14) (15) (15) (28) 1 Sum of Adjustments - Compensation and benefits expense, as adjusted to awarded basis (b, c) Charges pertaining to cost saving initiatives (31) (20) (54) (24) 17 (34) (20) 4 (15) (8) (4) 13 Private Equity incentive compensation" 4 12 7 2010 adjustments Operating expenses related to noncontrolling interests5 Amortization and other acquisition-related costs 14 LAM Equity Charge 2005 Adjustments 23 7 Corporate support group allocations to business segments Total adjustments Earnings from Operations, Awarded basis Operating Margin, Awarded basis 2 1 5 199 358 6 6 6 6 7 12 8 10 7 (11) (c) 47 51 55 64 58 62 67 74 78 81 82 3 27 (7) 254 76 29 51 91 76 71 64 $119 $162 $178 $191 $173 $294 $319 $328 $411 $456 $438 26% 30% 25% 30% 29% 35% 36% 37% 40% 41% 40% LAZARD Notes: (a) See "Reconciliation of U.S. GAAP Net Revenue to Operating Revenue" on page 40. (b) See "Reconciliation of U.S. GAAP Compensation to Adjusted/Awarded Compensation" on page 41. (c) Operating margins for Financial Advisory and Asset Management reflect a reallocation of expenses from Corporate to the business segments. For all numerical footnotes, see endnotes for information regarding non-GAAP adjustments. 48#50Estimated Future Amortization of Historical Deferrals¹ ($ in millions) 2019A 2020A 2021E 2022E 2023E 2015 Grants 8 2016 Grants 53 6 2017 Grants 96 56 14 2018 Grants 191 93 78 10 2019 Grants 18 198 105 75 10 2020 Grants 29 211 110 75 2021 Grants TBD TBD TBD Other 2 2 TBD TBD TBD Total $368 $384 TBD TBD TBD LAZARD 1 In accordance with U.S. GAAP, an estimate is made for future forfeitures of deferred compensation awards. The result reflects the cost associated with awards that are expected to vest. Amortization of deferrals beyond 2020 not shown. 49#511 Endnotes related to non-GAAP adjustments 2 3 4 For the years ended December 31, 2013 and 2012, represents charges pertaining to cost saving initiatives including severance and benefit payments, acceleration of unrecognized amortization of deferred incentive compensation previously granted to individuals terminated, settlement of certain contractual obligations, occupancy cost reduction and other non-compensation related costs, and for purposes of net income, net of applicable tax benefits. For the year ended December 31, 2012 represents charges pertaining to staff reductions including severance and benefit payments, acceleration of unrecognized amortization of deferred incentive compensation previously granted to individuals terminated, and other non-compensation related costs, and for purposes of net income, net of applicable tax benefits. Represents changes in the fair value of the compensation liability recorded in connection with Lazard Fund Interests ("LFI") and other similar deferred incentive compensation arrangements for which a corresponding equal amount is excluded from operating revenue. Represents an adjustment to match the timing of the recognition of carried interest revenue subject to clawback to the recognition of the related incentive compensation expense, which is not aligned under U.S. GAAP. Such adjustment will reduce compensation expense prior to the recording of revenue and increase compensation expense in periods when revenue is recognized, generally at the end of the life of a fund. 5 Amounts related to the consolidation of noncontrolling interests which are excluded because the Company has no economic interest in such amounts. 6 7 8 9 For the year ended December 31, 2009, represents expenses in connection with the acceleration of unamortized restricted stock units granted to our former Chairman and Chief Executive Officer and the accelerated vesting of deferred cash awards previously granted; for the year ended December 31, 2010, represents expenses related to the accelerated vesting of restricted stock units in connection with the Company's change in retirement policy. For the year ended December 31, 2008 excludes (i) compensation and benefits and non-compensation charges in connection with the Company's repurchase of all outstanding Lazard Asset Management ("LAM") Equity units held by certain current and former MDs and employees of LAM and (ii) a provision for losses from counterparty defaults related to the bankruptcy filing of one of our prime brokers. Includes base salaries and benefits of $705, $696 million, $648 million, $575 million, $584 million, $570 million, $530 million, $516 million, $507 million, $453 million, $422 million, $468 million, $456 million, $398 million and $380 million for 2019, 2018, 2017, 2016, 2015, 2014, 2013, 2012, 2011, 2010, 2009, 2008, 2007, 2006 and 2005, respectively, and cash incentive compensation of $391, $446, $466 million, $398 million, $414 million, $433 million, $369 million, $367 million, $372 million, $473 million, $405 million, $225 million, $562 million, $470 million and $394 million, for the respective years. Grant date fair value of deferred incentive compensation awards granted applicable to the relevant year-end compensation process (i.e. grant date fair value of deferred incentive awards granted in 2019, 2018, 2017, 2016, 2015, 2014, 2013, 2012, 2011, 2010, 2009, 2008, 2007 and 2006 related to the 2018, 2017, 2016, 2015, 2014, 2013, 2012, 2011, 2010, 2009, 2008, 2007, 2006 and 2005 year-end compensation processes, respectively). 10 Represents special deferred incentive awards that are granted outside the year-end compensation process, and includes grants to new hires, retention awards and performance units earned under PRSU grants. 11 12 Under U.S. GAAP, an estimate is made for future forfeitures of the deferred portion of such awards. This estimate is based on both historical experience and future expectations. The result reflects the cost associated with awards that are expected to vest. This calculation is undertaken in order to present awarded compensation on a similar basis to GAAP compensation. Amounts for 2012-2015 represent actual forfeiture experience. The 2016-2019 amounts represent estimated forfeitures. Represents incremental rent expense, building depreciation, impairment losses, legal fees and lease abandonment costs related to office space reorganization and an onerous lease provision. LAZARD 50#52Endnotes related to non-GAAP adjustments (continued) 13 For the year ended December 31, 2013, represents charges related to the refinancing of the Company's 7.125% Senior Notes maturing on May 15, 2015 and the issuance of $500 million of 4.25% Senior Notes maturing on November 14, 2020. The charges include a pre-tax loss on the extinguishment of $54.1 million. For the period ended March 31, 2015, represents charges related to the extinguishment of $450 million of the 6.85% Senior Notes maturing in June 2017 and the issuance of $400 million of 3.75% notes maturing in February 2025. The charges include a pre-tax loss on extinguishment of $60.2 million and excess interest expense of $2.7 million (due to delay between the issuance of the 2025 notes and the settlement of the 2017 notes). For the period ended December 31, 2016, represents charges related to the extinguishment of $98 million of the Company's 6.85% Senior Notes maturing in June 2017 and the issuance of $300 million of 3.625% notes maturing in March 2027. The charges include a pre-tax loss on the extinguishment of $3.1 million and excess interest expense of $0.6 million (due to the delay between the issuance of the 2027 notes and the settlement of 2017 notes). For the period ended December 31, 2018, represents charges related to the extinguishment of $250 million of the Company's 4.25% Senior Notes maturing in November 2020 and the issuance of $500 million of 4.50% notes maturing in September 2028. 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 2028 notes and the settlement of 2020 notes). For the period ended March 31, 2019, represents charges related to the extinguishment of $168 million of the Company's 4.25% Senior Notes maturing in November 2020 and the issuance of $500 million of 4.375% notes maturing in March 2029. 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 2020 notes). 14 Represents amortization of intangibles, and for 2016, 2017, 2018 and 2019, primarily relates to the change in fair value of the contingent consideration associated with certain business acquisitions. 15 Represents amounts the Company may be required to pay LTBP Trust under the Tax Receivable Agreement based on the expected utilization of deferred tax assets that are subject to the TRA. For the year ended December 31, 2017, as a result of the 2017 US Tax Cuts and Jobs Act, the Company incurred a charge of approximately $420 million primarily relating to the reduction in certain deferred tax assets, with an offsetting benefit of approximately $203 million relating to the reduction in our Tax Receivable Agreement obligation. For the year ended December 31, 2018, represents tax rate adjustment associated with the 2017 US Tax Cuts and Jobs Act. 16 Represents (i) a charge related to the write-off of a partial prepayment of the Company's option to acquire the fund management activities of Lazard Alternative Investment Holdings and (ii) a provision for a lease contract for the Company's leased facility in the U.K. 17 18 19 20 For the years ended December 31, 2009 and 2010, represents severance and benefit payments, acceleration of unrecognized amortization of deferred incentive compensation previously granted to individuals terminated and other charges in connection with the reduction and realignment of staff. Represents the tax benefit applicable to adjustments described above and for the years ended December 31, 2012 and 2013, the portion of adjustments described above attributable to LAZ-MD Holdings. Represents a reversal of noncontrolling interests related to LAZ-MD Holdings ownership of Lazard Group common membership interests and an adjustment for Lazard Ltd entity-level taxes to effect a full exchange of interests. For the year ended December 31, 2016 represents a gain relating to the Company's acquisition of MBA Lazard resulting from the increase in fair value of the Company's investment in the business. For the year ended December 31, 2015 represents revenue relating to the Company's disposal of the Australian private equity business adjusted for the recognition of an obligation, which was previously recognized for U.S. GAAP. LAZARD 51#53Endnotes related to non-GAAP adjustments (continued) 21. For the nine month period ended December 31, 2015, represents the recognition of deferred tax assets of $1,217 million, net of accrual of $962 million for the tax receivable agreement. For the three month period ended December 31, 2015, represents the recognition of deferred tax assets of $39 million relating to the release of additional valuation allowance 22. In July of 2015 the Company extinguished approximately 47% of the outstanding TRA obligation. Accordingly, for the three month period ended December 31, 2015 and the twelve month period ended December 31, 2015, the Company recorded a pre-tax gain of $420 million and a related tax expense of $161 million. 23. Reflects payments for services rendered by our employee members of LAM and managing directors, which prior to the IPO were accounted for as either distributions from members' capital or as minority interest expense. 24. Represents the exclusion of one-time IPO-related costs. 25. Primarily relates to the change in fair value of the contingent consideration associated with certain business acquisitions. 26. Represents valuation allowance associated with a change in NYC UBT tax laws. 27. Represents expenses associated with Enterprise Resource Planning (ERP) system implementation. 28. 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. 29. Represents expenses associated with the Lazard Foundation unconditional commitment. 30. Represents write-down of private equity investment to potential transaction value. 31. Represents losses and expenses associated with the business realignment which includes employee reductions and closing of subscale office and investment strategies. LAZARD 52