What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-05-01 compared with 2024-11-01 · 257 added, 372 removed, 573 unchanged (52% of the section changed)

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The following discussion should be read in conjunction with Lazard’s condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q (the “Form 10-Q”), as well as Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) included in our Annual Report on Form 10-K for the year ended December 31, 2024 (the “Form 10-K”).

All references to “2024,” “2023,” “third quarter,” “first nine months” or “the period” refer to, as the context requires, the three month and nine month periods ended September 30, 2024 and 2023.

All references to “2025,” “2024,” “ first quarter” or “the period” refer to, as the context requires, the three month periods ended March 31, 2025 and 2024.

Forward-Looking Statements and Certain Factors that May Affect Our Business

Management has included in Parts I and II of this Form 10-Q, including in its MD&A, statements that 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,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “target,” “goal,” or “continue,” and the negative of these terms and other comparable terminology.

In some cases, forward-looking statements can be identified by the use of forward-looking terminology such as “may,” “might,” “will,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “target,” “goal,” “pipeline,” 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.

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• adverse general economic conditions or adverse conditions in global or regional financial markets;

• changes in international trade policies and practices, including the implementation of tariffs, proposed further tariffs, and responses from other jurisdictions, and the economic impacts, volatility and uncertainty resulting therefrom;

• 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”);

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Forward-looking statements include, but are not limited to, statements about:

• financial goals, including ratios of compensation and benefits expense to adjusted net revenue;

• financial goals, including ratios of adjusted compensation and benefits expense to adjusted net revenue;

• ability to deploy surplus cash through dividends, share repurchases and debt repurchases;

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• recruitment and retention of our managing directors and employees;

• potential levels of compensation expense, including adjusted compensation and benefits expense, and non-compensation expense;

• potential levels of expense, including adjusted compensation and benefits expense, and adjusted non-compensation expense;

• potential operating performance, achievements, productivity improvements, efficiency and cost reduction efforts;

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• likelihood of success and impact of litigation;

• ability to realize the anticipated benefits of Lazard’s conversion to a U.S.

C-Corporation (the “ Conversion”) and impact on the trading price of our stock;

• expected tax rates, including effective tax rates;

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• changes in foreign currency exchange rates;

• expectations with respect to the economy, the securities markets, the market for mergers, acquisitions, restructuring and other financial advisory activity, the market for asset management activity and other macroeconomic, regional and industry trends;

• the expected timing and levels of funding of awarded institutional mandates;

• the pipeline in M&A, restructuring and other financial advisory transactions;

• expectations with respect to the economy, the securities markets, the market for mergers, acquisitions, restructuring, private credit and other financial advisory activity, the market for asset management activity and other macroeconomic, regional and industry trends;

• effects of competition on our business;

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Business Summary

Lazard, one of the world’s preeminent financial advisory and asset management firms, operates in North and South America, Europe, the Middle East, Asia and Australia.

With origins dating to 1848, we have long specialized in crafting solutions to the complex financial and strategic challenges of a diverse set of clients around the world, including corporations, governments, institutions, partnerships, family offices and individuals.

Our primary business purpose is to serve our clients.

Our deep roots in business centers around the world form a global network of relationships with key decision-makers in corporations, governments and investing institutions.

Founded in 1848, Lazard is one of the world’s preeminent financial advisory and asset management firms, with operations in North and South America, Europe, the Middle East, Asia, and Australia.

Lazard provides advice on mergers and acquisitions, capital markets and capital solutions, restructuring and liability management, geopolitics, and other

strategic matters, as well as asset management and investment solutions to institutions, corporations, governments, partnerships, family offices, and high net worth individuals.

Our mission is to provide trusted, independent financial advice and investment solutions to our clients, backed by the intellectual capital of our firm.

During our more than 175-year history, we have built a global network of relationships with key decision makers in business, government and investing institutions.

This network is both a competitive strength and a powerful resource for Lazard and our clients.

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We operate in cyclical businesses across multiple geographies, industries and asset classes.

In recent years, we have deepened our sector expertise and enhanced our specialized insights in geopolitical advisory, private equity and

capital solutions in our financial advisory business and we have invested in our global investment and distribution platform in our asset management business to further drive performance.

Companies, government bodies and investors seek independent advice with a geographic perspective, deep understanding of capital structure, informed research and knowledge of global, regional and local economic conditions.

We believe that our business model as an independent advisor will continue to create opportunities for us to attract new clients and key personnel.

In recent years, we have deepened our sector expertise, enhanced our specialized insights in geopolitical advisory, and increased connectivity to private capital in our financial advisory business.

In addition, we have invested in our global investment and distribution platform in our asset management business to further drive performance.

Business and government leaders and global investors seek trusted advisors, and we believe that our business model as an independent advisor will continue to create opportunities for us to attract new clients and key personnel.

Our principal sources of revenue are derived from activities in the following business segments:

• Financial Advisory, which offers corporate, partnership, institutional, government, sovereign and individual clients across the globe a wide array of financial advisory services regarding strategic and M&A advisory, capital markets advisory, shareholder advisory, restructuring and liability management, sovereign advisory, geopolitical advisory, and other strategic advisory matters and capital raising and placement, and

• Asset Management, which offers a broad range of global investment solutions and investment and wealth management services in equity and fixed income strategies, asset allocation strategies, alternative investments and private equity funds to corporations, public funds, sovereign entities, endowments and foundations, labor funds, financial intermediaries and private clients.

In addition, we record selected other activities in our Corporate segment, including the management of cash, investments, deferred tax assets, outstanding indebtedness and certain contingent obligations.

• Financial Advisory, which offers corporate, partnership, institutional, government, sovereign and individual clients across the globe a wide array of financial advisory services including M&A advisory, capital markets advisory, shareholder advisory, sovereign advisory, geopolitical advisory, restructuring and liability management, capital raising and placement, and other strategic matters;

In addition, we record selected other activities in our Corporate segment, including cash management, investments, deferred tax assets, outstanding indebtedness and certain contingent obligations.

We also invest our own capital from time to time, generally alongside capital of qualified institutional and individual investors in alternative investments or private equity investments, and make investments to seed our Asset Management strategies.

Our consolidated net revenue was derived from the following segments:

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Financial Advisory 47 % 51 % 55 % 53 %

Asset Management 38 54 39 50

Corporate 15 (5) 6 (3)

Total 100 % 100 % 100 % 100 %

See “Business Segments” below for discussion of the adjusted operating results of our Financial Advisory, Asset Management and Corporate segments.

Business Environment and Outlook

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Our Financial Advisory revenues are primarily dependent on the successful completion of merger, acquisition, sale, restructuring, capital raising or similar transactions, and our Asset Management revenues are primarily driven by the levels of AUM.

Weak global economic and financial market conditions can result in a challenging business environment for M&A and capital-raising activity as well as our Asset Management business, but may provide opportunities for our restructuring business.

Despite geopolitical uncertainty, there are ongoing economic and market improvements relevant to our Financial Advisory and Asset Management businesses.

As inflation continues to moderate, Central Banks have begun to lower interest rates.

M&A activity continues to rebound, and financing conditions are favorable.

The third quarter ended on a strong note for equity and bond markets with U.S.

equity markets posting all-time closing highs.

Our outlook with respect to our Financial Advisory and Asset Management businesses is described below.

• Financial Advisory—M&A announcements for deals greater than $500 million are up year-over-year with 2023 being at their lowest levels in a decade.

We remained actively engaged with our clients.

The global scale and breadth of our Financial Advisory business, with particular strength in both the U.S.

and Europe, enables us to advise on a wide range of strategic and restructuring transactions across a variety of industries.

Throughout 2024, we continue to see increased M&A activity occurring alongside greater restructuring and liability management activity based upon upcoming debt maturities.

In addition, we continue to invest in our Financial Advisory business by selectively hiring talented senior professionals in an effort to enhance our

capabilities and sector expertise in M&A, capital structure, restructuring, and public and private capital markets.

• Asset Management—Given our diversified, actively managed investment platform and our ability to provide investment solutions for a global mix of clients, we believe we are positioned to benefit from opportunities across the asset management industry.

We are continually developing new investment strategies that extend our existing platforms and assessing potential product acquisitions or other inorganic growth opportunities.

We operate in a very competitive and rapidly changing environment.

Weak or uncertain global economic and financial market conditions can result in a challenging business environment for M&A and capital-raising activity as well as our Asset Management business, but such conditions may provide opportunities for our restructuring business.

We operate in a very competitive and global environment.

Recent changes to international trade policies and practices have resulted in a period of heightened uncertainty and market volatility.

For example, in April 2025, the U.S.

government introduced tariffs on trading partners globally, including China which responded with retaliatory tariffs.

The potential for geopolitical impacts could further exacerbate market volatility and contribute to weakened economic conditions.

We believe our broad set of capabilities and diversified business model positions us well to meet evolving client needs in varying economic environments.

However, unpredictability due to rapidly changing international trade policies and market volatility could reduce our clients’ ability to finalize decision-making or execute on investment priorities.

New risks and uncertainties emerge continuously, and it is not possible for our management to predict all risks and uncertainties, nor can we assess the impact of all potentially applicable factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

See Item 1A, “Risk Factors” in our Form 10-K.

Furthermore, net income and revenue in any period may not be indicative of full-year results or the results of any other period and may vary significantly from year to year and quarter to quarter.

Furthermore, net income and revenue in any period may not be

indicative of full-year results or the results of any other period and may vary significantly from year to year and quarter to quarter.

Overall, we continue to focus on the development of our business, including the generation of revenue growth, earnings growth and shareholder returns, the evaluation of potential growth opportunities, the investment in new technology to support the development of existing and new business opportunities, the evaluation of other strategic alternatives, the prudent management of our costs and expenses, the efficient use of our assets and the return of capital to our shareholders.

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Three Months Ended

September 30, Nine Months Ended

September 30,

Incr / (Decr)

($ in billions)

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Dealogic as of October 2, 2024.

Another measure of global restructuring activity is the number of corporate defaults, which decreased during the first nine months of 2024 as compared to the first nine months of 2023.

The number of defaulting issuers was 107 in the first nine months of 2024 according to Moody’s Investors Service, Inc., as compared to 127 in the first nine months of 2023.

Net revenue trends in Financial Advisory are generally correlated to the level of completed industry-wide M&A transactions and restructuring transactions occurring subsequent to corporate debt defaults, respectively.

Dealogic as of April 2, 2025.

Another measure of global restructuring activity is the number of corporate defaults, which decreased during the first quarter of 2025 as compared to the first quarter of 2024.

The number of defaulting issuers was 27 in the first quarter of 2025, according to Moody’s Investors Service, Inc., as compared to 38 in the first quarter of 2024.

However, deviations from this relationship can occur in any given year for a number of reasons.

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Asset Management

The percentage change in major equity market indices at September 30, 2024, as compared to such indices at June 30, 2024, December 31, 2023 and at September 30, 2023, is shown in the table below:

Percentage Changes September 30, 2024 vs.

June 30, 2024 December 31, 2023 September 30, 2023

The percentage change in major equity market indices at March 31, 2025, as compared to such indices at December 31, 2024 and at March 31, 2024 is shown in the table below:

Percentage Changes March 31, 2025 vs.

December 31, 2024 March 31, 2024

MSCI World Index (2) % 7 %

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Bankruptcy proceedings may require court approval of our fees.

The capital markets advisory team advises both public and private issuers on the raising of capital, while the private capital advisory team provides fundraising and secondary advisory services for private equity, private credit, real estate and real assets-focused investment firms.

We also advise on both public and private debt and structured equity transactions, while the private capital advisory team provides fundraising and secondary advisory services for private equity, private credit, real estate and real assets-focused investment firms.

Additionally, Lazard earns fees from providing strategic advice to clients, which may include shareholder advisory, geopolitical advisory and other strategic advisory matters, with such fees not being dependent on the completion of a transaction.

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Institutional and individual clients, and firms with which we have strategic alliances, can terminate their relationship with us, reduce the aggregate amount of AUM or shift their funds to other types of accounts with different rate structures for a number of reasons, including investment performance, changes in prevailing interest rates and financial market performance.

Moreover, it is possible that awarded institutional mandates may not be funded in

the amounts and at the times initially anticipated, or at all.

In addition, as Lazard’s AUM includes significant amounts of assets that are denominated in currencies other than U.S.

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For hedge funds, incentive fees are calculated based on a specified percentage of a fund’s net appreciation, in some cases in excess of established benchmarks or thresholds.

The Company records incentive fees on traditional products and hedge funds at the end of the relevant performance measurement period, when potential uncertainties regarding the ultimate realizable amounts have been determined.

The incentive fee measurement period is generally an annual period (unless an account terminates or redemption occurs during the year).

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As a result, the Company recognizes incentive fees earned on our private equity funds only when it is probable that a clawback will not occur.

Corporate segment net revenue consists primarily of investment gains and losses on the Company’s investments to seed strategies in our Asset Management business, net of hedging activities, and principal investments in private equity funds, as well as gains and losses on investments held in connection with Lazard Fund Interests (“LFI”) and interest income and interest expense.

Corporate segment net revenue consists primarily of interest income and interest expense, investment gains and losses on the Company’s investments to seed strategies in our Asset Management business, net of hedging activities, and principal investments in private equity funds, as well as gains and losses on investments held in connection with Lazard Fund Interests (“LFI”).

Corporate net revenue can fluctuate due to changes in the fair value of debt and equity securities, as well as due to changes in interest and currency exchange rates and the levels of cash, investments and indebtedness.

Corporate segment total assets represented 53% of Lazard’s consolidated total assets as of September 30, 2024, which are attributable to cash and cash equivalents, investments in debt and equity securities, interests in alternative investment, debt, equity and private equity funds and deferred tax assets.

We use “adjusted net revenue”, a non-GAAP measure, for comparison of revenues between periods.

For the reconciliations and calculations with respect to “adjusted net revenue” and related ratios to “adjusted net revenue,” see the table under “Consolidated Results of Operations” below.

Operating Expenses

The majority of Lazard’s operating expenses relate to compensation and benefits for managing directors and employees.

Our compensation and benefits expense includes (i) salaries and benefits, (ii) amortization of the relevant portion of previously granted deferred incentive compensation awards, including (a) share-based incentive compensation under Lazard’s 2018 Incentive Compensation Plan, as amended (the “2018 Plan”) and (b) LFI and other similar deferred compensation arrangements (see Note 13 of Notes to Condensed Consolidated Financial Statements), (iii) a provision for discretionary or guaranteed cash bonuses and profit pools and (iv) when applicable, severance payments and cash retention awards.

Our compensation and benefits expense includes (i) salaries and benefits, (ii) amortization of the relevant portion of previously granted deferred incentive compensation awards, including (a) share-based incentive compensation under Lazard’s 2018 Incentive Compensation Plan, as amended (the “2018 Plan”) and (b) LFI and other similar deferred compensation arrangements, (iii) a provision for discretionary or guaranteed cash bonuses and profit pools and (iv) when applicable, severance payments and cash retention awards.

Compensation expense in any given period is dependent on many factors, including general economic and market conditions, our actual and forecasted operating and financial performance, staffing levels, estimated forfeiture rates, competitive pay conditions and the nature of revenues earned, as well as the mix between current and deferred compensation.

See Note 13 of Notes to Condensed Consolidated Financial Statements.

We use “adjusted compensation and benefits expense” and the ratio of “adjusted compensation and benefits expense” to “adjusted net revenue,” both non-GAAP measures, for comparison of compensation and benefits expense between periods.

For the reconciliations and calculations with respect to “adjusted compensation and benefits expense” and related ratios to “adjusted net revenue,” see the table under “Consolidated Results of Operations” below.

For the reconciliations and calculations with respect to “adjusted compensation and benefits expense” and related ratios to “adjusted net revenue,” see the table under “Condensed Consolidated Results of Operations” below.

Compensation and benefits expense is the largest component of our operating expenses.

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We focus on a ratio of adjusted compensation and benefits expense to adjusted net revenue to manage costs, balancing a view of current conditions in the market for talent alongside our objective to drive long-term shareholder value.

Our goal remains to deliver a ratio of adjusted compensation and benefits expense to adjusted net revenue over the cycle in the mid-to high-50s percentage range, while targeting a consistent deferral policy.

While we have implemented policies and initiatives that we believe will assist us in delivering ratios within this range, there can be no guarantee that we will be able to deliver or maintain such ratios, or that our policies or initiatives will not change, in the future.

Our practice is to pay our employees competitively to foster retention and motivate performance and, in doing so, we look to the market for talent and other factors, which are typically correlated with industry revenues, but may vary year by year.

Our practice is to pay our employees competitively to foster retention and motivate performance and, in doing so, we look to the market for talent

and other factors, which are typically correlated with industry revenues, but may vary year by year.

At the same time, the amount of compensation we award in a particular year is, in part, deferred and amortized over the successive years.

competition for professionals, changes in the macroeconomic environment or the financial markets generally, lower adjusted net revenue resulting from, for example, a decrease in M&A activity, our share of the M&A market or our AUM levels, changes in the mix of revenues from our businesses, investments in our businesses or various other factors could prevent us from achieving this goal.

Our operating expenses also include “non-compensation expense”, which includes costs for occupancy and equipment, marketing and business development, technology and information services, professional services, fund administration and outsourced services, amortization and other acquisition-related costs and other expenses.

Increased competition for professionals, changes in the macroeconomic environment or the financial markets generally, lower adjusted net revenue resulting from, for example, a decrease in M&A activity, our share of the M&A market or our AUM levels, changes in the mix of revenues from our businesses, investments in our businesses or various other factors could prevent us from achieving this goal.

Our occupancy costs represent a significant portion of our aggregate operating expenses and are subject to change from time to time, particularly as leases for real property expire and are renewed or replaced with new, long-term leases for the same or other real property.

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For calculations with respect to “adjusted non-compensation expense”, see the table under “Consolidated Results of Operations” below.

Our operating expenses also include our “benefit pursuant to tax receivable agreement”.

Cost-Saving Initiatives

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Provision for Income Taxes

On January 1, 2024, we completed our Conversion from an exempted company incorporated under the laws of Bermuda named Lazard Ltd to a U.S C-Corporation named Lazard, Inc.

Following the Conversion, all of our operating income will be subject to U.S.

federal corporate income taxes, which we anticipate will increase our effective tax rate.

is subject to U.S.

federal income taxes on all of its operating income and, through its subsidiaries, is also subject to state and local taxes on its income apportioned to various state and local jurisdictions.

Lazard Group operates principally through subsidiary corporations including through those domiciled outside the U.S.

federal income taxes on all of its income and, through its subsidiaries, is also subject to state and local taxes on its income apportioned to various state and local jurisdictions.

Lazard Group LLC operates principally through subsidiary corporations including through those domiciled outside the U.S.

that are subject to local income taxes in foreign jurisdictions.

In addition, Lazard Group is subject to Unincorporated Business Tax (“UBT”) attributable to its operations apportioned to New York City.

In addition, Lazard Group LLC is subject to Unincorporated Business Tax (“UBT”) attributable to its operations apportioned to New York City.

Additionally, the Organization for Economic Cooperation and Development (the “OECD”) reached agreement among various countries, including the EU member states, to establish a 15% minimum tax on certain multinational companies, commonly called “Pillar Two”.

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Net Income Attributable to Noncontrolling Interests

Noncontrolling interests primarily consist of (i) amounts related to Edgewater’s management vehicles that the Company is deemed to control but not own, (ii) profits interest participation rights, (iii) consolidated VIE interests held by employees and (iv) Lazard Growth Acquisition Corp.

I (“LGAC”) interests.

Noncontrolling interests primarily consist of (i) amounts related to Edgewater’s management vehicles that the Company is deemed to control but not own, (ii) profits interest participation rights and (iii) consolidated VIE interests held by employees.

See Notes 12 and 21 of Notes to Condensed Consolidated Financial Statements for information regarding the Company’s noncontrolling interests and consolidated VIEs.

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Dollar, generally the currency of the country in which the subsidiaries are domiciled.

Such subsidiaries’

assets and liabilities are translated into U.S.

Such subsidiaries’ assets and liabilities are translated into U.S.

Dollars using exchange rates as of the respective balance sheet date, while revenue and expenses are translated at average exchange rates during the respective periods based on the daily closing exchange rates.

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Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

($ in thousands)

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Non-compensation 163,146 159,368

Benefit pursuant to tax receivable agreement – – – (40,435)

Total operating expenses 593,416 710,192

Operating Income (Loss) 161,187 (4,857) 279,388 (151,854)

Operating Income 54,635 54,561

Provision (benefit) for income taxes (7,354) 14,337

Net Income (Loss) 116,135 6,774 208,412 (128,801)

Less - Net Income (Loss) Attributable to

Net Income 61,989 40,224

Less - Net Income Attributable to

Noncontrolling Interests 1,614 4,469

Net Income (Loss) Attributable to Lazard $ 107,938 $ 7,139 $ 193,602 $ (139,046)

Operating Income (Loss), as a % of net revenue 20.5 % (0.9) % 12.5 % (8.9) %

Net Income Attributable to Lazard $ 60,375 $ 35,755

Operating Income, as a % of net revenue 8.4 % 7.1 %

The tables below describe the components of adjusted net revenue, adjusted compensation and benefits expense, adjusted non-compensation expense, adjusted operating income and related key ratios, which are non-GAAP measures used by the Company to manage its business.

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Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

($ in thousands)

Adjusted Net Revenue:

Net revenue $ 784,866 $ 523,918 $ 2,234,968 $ 1,709,468

Revenue related to noncontrolling interests (a) (11,113) (2,895) (23,136) (19,955)

(Gains) losses related to Lazard Fund Interests

("LFI") and other similar arrangements (b) (16,732) 10,598 (24,904) (15,530)

Distribution fees, reimbursable deal costs,

provision for credit losses and other (c) (19,310) (23,880) (61,847) (76,899)

Net revenue - U.S.

GAAP basis $ 648,051 $ 764,753

Revenue related to noncontrolling interests and similar arrangements (a) (6,011) (7,103)

Gains related to LFI and other similar arrangements (b) (5,243) (9,373)

Distribution fees, reimbursable deal costs, provision for credit losses and other (c)

(14,581) (22,949)

Interest expense (d) 20,969 20,650

Asset impairment charges – – – 19,129

Losses associated with cost-saving initiatives (e) – 587

Gain on sale of property (f) (114,271) – (114,271) –

Adjusted net revenue (g) $ 645,914 $ 531,617 $ 2,077,121 $ 1,678,661

Adjusted net revenue (f) $ 643,185 $ 746,565

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(a) Revenue or loss related to the consolidation of noncontrolling interests is excluded from adjusted net revenue because the Company has no economic interest in such amount.

(a) Revenue related to the consolidation of noncontrolling interests and similar arrangements are excluded from adjusted net revenue because the Company has no economic interest in such amounts.

(b) Represents 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.

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(d) Interest expense (excluding interest expense incurred by LFB) is added back in determining adjusted net revenue because such expense relates to corporate financing activities and is not considered to be a cost directly related to the revenue of our business.

(e) Represents losses associated with the closing of certain offices as part of the cost-saving initiatives, including the reclassification of currency translation adjustments to earnings from accumulated other comprehensive loss and transactions related to foreign currency exchange.

(f) Represents gain on sale of an owned office building.

(g) Adjusted net revenue is a non-GAAP measure.

(e) Represents the reclassification of currency translation adjustments to earnings from accumulated other comprehensive loss in the three month period ended March 31, 2024.

(f) Adjusted net revenue is a non-GAAP measure.

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

($ in thousands)

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Total compensation and benefits expense $ 430,270 $ 550,824

Compensation and benefits expense related to

noncontrolling interests (a) (2,249) (2,636) (6,254) (7,497)

(Charges) credits pertaining to LFI and other similar

arrangements (b) (16,732) 10,598 (24,904) (15,530)

Compensation and benefits expense related to noncontrolling interests and similar arrangements (a) (3,741) (2,108)

Charges pertaining to LFI and other similar arrangements (b) (5,243) (9,373)

Expenses associated with cost-saving initiatives – (46,610)

Expenses associated with sale of property (c) (20,121) – (20,121) –

Expenses associated with senior management

transition (d) – – – (10,674)

Adjusted compensation and benefits expense (e) $ 426,303 $ 363,626 $ 1,370,900 $ 1,186,813

Adjusted compensation and benefits expense, as a %

of adjusted net revenue 66.0 % 68.4 % 66.0 % 70.7 %

Adjusted compensation and benefits expense (c) $ 421,286 $ 492,733

Adjusted compensation and benefits expense, as a % of adjusted net revenue (c) 65.5 % 66.0 %

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(a) Expenses related to the consolidation of noncontrolling interests are excluded because the Company has no economic interest in such amounts.

(a) Expenses related to the consolidation of noncontrolling interests and similar arrangements are excluded because the Company has no economic interest in such amounts.

(b) Represents changes in the fair value of the compensation liability recorded in connection with LFI and other similar deferred incentive compensation awards, for which a corresponding equal amount is excluded from adjusted net revenue.

(d) Represents expenses associated with senior management transition reflecting the departure of certain executive officers.

(e) Adjusted compensation and benefits expense is a non-GAAP measure.

(c) Adjusted compensation and benefits expense and adjusted compensation and benefits expense, as a percentage of adjusted net revenue are non-GAAP measures.

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

($ in thousands)

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Non-compensation expense related to noncontrolling

interests (a) (672) (625) (2,079) (2,215)

interests and similar arrangements (a) (657) (526)

Distribution fees, reimbursable deal costs, provision

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Adjusted non-compensation expense, as a % of

adjusted net revenue 21.4 % 25.9 % 20.3 % 25.2 %

adjusted net revenue (c) 23.0 % 18.0 %

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(a) Expenses related to the consolidation of noncontrolling interests are excluded because the Company has no economic interest in such amounts.

(a) Expenses related to the consolidation of noncontrolling interests and similar arrangements are excluded because the Company has no economic interest in such amounts.

(b) Represents certain distribution, introducer and management fees paid to third parties, reimbursable deal costs and provision for credit losses relating to fees and other receivables that are deemed uncollectible for which an equal amount is included for purposes of determining adjusted net revenue.

(c) Adjusted non-compensation expense and adjusted non-compensation expense, as a percentage of adjusted net revenue are non-GAAP measures.

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

($ in thousands)

Adjusted Operating Income:

Operating income (loss) $ 161,187 $ (4,857) $ 279,388 $ (151,854)

Operating income (loss) related to noncontrolling

interests (8,192) 366 (14,803) (10,243)

Operating income $ 54,635 $ 54,561

Operating income related to noncontrolling

interests and similar arrangements (1,613) (4,469)

Interest expense 20,969 20,650

Amortization and other acquisition-related costs 26 68

Asset impairment charges – – – 19,129

Losses associated with cost-saving initiatives – 587

Expenses associated with cost-saving initiatives – 48,142

Gain on sale of property (114,271) – (114,271) –

Expenses associated with sale of property 20,121 – 20,121 –

Expenses associated with senior management

transition – – – 10,674

Benefit pursuant to tax receivable agreement

obligation ("TRA") (a) – – – (40,435)

Adjusted operating income (b) $ 81,372 $ 30,541 $ 285,077 $ 68,463

Adjusted operating income (a) $ 74,017 $ 119,539

Adjusted operating income, as a % of adjusted net

revenue 12.6 % 5.7 % 13.7 % 4.1 %

revenue (a) 11.5 % 16.0 %

____________________________________

(a) Pursuant to the periodic revaluation of the TRA liability and the assumptions reflected in the estimate, the revaluation had the effect of reducing the estimated liability under the TRA.

(b) Adjusted operating income is a non-GAAP measure.

(a) Adjusted operating income and adjusted operating income, as a percentage of adjusted net revenue are non-GAAP measures.

Headcount information is set forth below:

September 30, 2024 December 31, 2023 September 30, 2023

March 31, 2025 December 31, 2024 March 31, 2024

Managing Directors:

12 unchanged sentences

Lazard management believes that annual results are the most meaningful basis for comparison among present, historical and future periods.

Three Months Ended September 30, 2024 versus September 30, 2023

Three Months Ended March 31, 2025 versus March 31, 2024

The Company reported net income attributable to Lazard of $60 million, as compared to net income attributable to Lazard of $36 million in the 2024 period.

Net revenue increased $261 million, or 50%, with adjusted net revenue increasing $114 million, or 21%, as compared to the 2023 period.

Fee revenue from investment banking and other advisory activities increased $101 million, or 38%, as compared to the 2023 period.

Asset management fees, including incentive fees, increased $13 million, or 5%, as compared to the 2023 period.

In the aggregate, interest income, other revenue and interest expense increased $147 million as compared to the 2023 period, the majority of which is recorded in the Corporate segment.

Compensation and benefits expense increased $101 million, or 28%, as compared to the 2023 period.

Adjusted compensation and benefits expense (which excludes certain items and which we believe allows for improved comparability between periods, as described above) was $426 million, an increase of $63 million, or 17%, as compared to $364 million in the 2023 period.

Net revenue decreased $117 million, or 15%, with adjusted net revenue decreasing $103 million, or 14%, as compared to the 2024 period.

Fee revenue from investment banking and other advisory activities decreased $93 million, or 20%, as compared to the 2024 period.

Asset management fees, including incentive fees, decreased $12 million, or 4%, as compared to the 2024 period.

In the aggregate, interest income, other revenue and interest expense decreased $12 million as compared to the 2024 period.

Compensation and benefits expense decreased $121 million, or 22%, as compared to the 2024 period which included $47 million associated with the cost-saving initiatives.

Adjusted compensation and benefits expense (which excludes certain items and which we believe allows for improved comparability between periods, as described above) was $421 million, a decrease of $71 million, or 15%, as compared to $493 million in the 2024 period.

The ratio of adjusted compensation and benefits expense to adjusted net revenue was 65.5% for the 2025 period, as compared to 66.0% for the 2024 period.

Non-compensation expense decreased $6 million, or 4%, as compared to the 2023 period.

Non-compensation expense increased $4 million, or 2%, as compared to the 2024 period.

Adjusted non-compensation expense increased $14 million, or 10%, as compared to the 2024 period.

The ratio of adjusted non-compensation expense to adjusted net revenue was 21.4% for the 2024 period, as compared to 25.9% for the 2023 period.

The Company reported operating income of $161 million, as compared to an operating loss of $5 million in the 2023 period.

Adjusted operating income increased $51 million, or 166%, as compared to the 2023 period, and, as a percentage of adjusted net revenue, was 12.6% for the 2024 period, as compared to 5.7% in the 2023 period.

The provision for income taxes reflects an effective tax rate of 28.0%, as compared to 239.5% for the 2023 period.

The change in the effective tax rate principally relates to changes in the geographic mix of earnings inclusive of losses without tax benefits in 2023 and the impact of discrete items.

Net income attributable to noncontrolling interests increased $9 million as compared to the 2023 period.

Nine Months Ended September 30, 2024 versus September 30, 2023

The Company reported net income attributable to Lazard of $194 million, as compared to net loss attributable to Lazard of $139 million in the 2023 period.

Net revenue increased $526 million, or 31%, with adjusted net revenue increasing $398 million, or 24%, as compared to the 2023 period.

Fee revenue from investment banking and other advisory activities increased $335 million, or 38%, as compared to the 2023 period.

Asset management fees, including incentive fees, increased $25 million, or 3%, as compared to the 2023 period.

In the aggregate, interest income, other revenue and interest expense increased $165 million, as compared to the 2023 period, the majority of which is recorded in the Corporate segment.

Compensation and benefits expense, which included $47 million associated with the cost-saving initiatives in the 2024 period, increased $82 million, or 6%, as compared to the 2023 period which included $166 million associated with the cost-saving initiatives.

Adjusted compensation and benefits expense (which excludes certain items and which we believe allows for improved comparability between periods, as described above) was $1,371 million, an increase of $184 million, or 16%, as

compared to $1,187 million in the 2023 period.

The ratio of adjusted compensation and benefits expense to adjusted net revenue was 66.0% for the 2024 period, as compared to 70.7% for the 2023 period.

Non-compensation expense decreased $28 million, or 5%, as compared to the 2023 period which included $12 million associated with the cost-saving initiatives.

Adjusted non-compensation expense decreased $2 million, or 1%, as compared to the 2023 period.

Such increases in non-compensation expense and adjusted non-compensation expense were primarily due to increased occupancy and equipment and marketing and business development expenses.

The ratio of adjusted non-compensation expense to adjusted net revenue was 23.0% for the 2025 period, as compared to 18.0% for the 2024 period.

The Company reported operating income of $279 million, as compared to an operating loss of $152 million in the 2023 period.

Adjusted operating income increased $217 million as compared to the 2023 period, and, as a percentage of adjusted net revenue, was 13.7% for the 2024 period, as compared to 4.1% in the 2023 period.

The provision for income taxes reflects an effective tax rate of 25.4%, as compared to 15.2% for the 2023 period.

The change in the effective tax rate principally relates to changes in the geographic mix of earnings inclusive of losses without tax benefits in 2023 and the impact of discrete items including a favorable court decision in a longstanding tax matter during the second quarter of 2024.

Net income attributable to noncontrolling interests increased $5 million, or 45% as compared to the 2023 period.

Operating income remained substantially the same as compared to the 2024 period.

Adjusted operating income decreased $46 million, or 38%, as compared to the 2024 period, and as a percentage of adjusted net revenue was 11.5% for the 2025 period, as compared to 16.0% in the 2024 period.

The provision (benefit) for income taxes reflects an effective tax rate of (13.5)%, as compared to 26.3% for the 2024 period.

The change in the effective tax rate principally relates to increases in discrete benefits for share-based incentive compensation and changes in the geographic mix of earnings.

Net income attributable to noncontrolling interests decreased $3 million as compared to the 2024 period.

For additional discussion of the drivers of our adjusted operating results for the period, see “Business Segments” below.

Business Segments

The following is a discussion of net revenue and operating income (loss) for the Company’s segments:

The following is a discussion of net revenue, adjusted net revenue, adjusted compensation and benefits expense, adjusted non-compensation expense, and adjusted operating income (loss) for the Company’s segments:

Financial Advisory, Asset Management and Corporate.

Adjusted compensation and benefits expense and adjusted non-compensation expense include costs directly incurred by each segment, with certain adjustments.

Adjusted net revenue, adjusted operating income, and adjusted operating income as a percentage of adjusted net revenue, are non-GAAP measures in the tables below.

The Company previously disclosed each segment’s operating results on a U.S.

In the applicable tables below, the comparable prior year information has been recast to reflect the updated measures used by management.

See Note 20 of Notes to Condensed Consolidated Financial Statements for further information regarding segments.

Financial Advisory

The following table summarizes the reported operating results attributable to the Financial Advisory segment:

The following table summarizes the adjusted operating results attributable to the Financial Advisory segment:

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

($ in thousands)

Net Revenue $ 370,917 $ 266,048 $ 1,235,732 $ 896,099

Operating Expenses (a) 333,961 295,609 1,132,793 1,063,789

Operating Income (Loss) $ 36,956 $ (29,561) $ 102,939 $ (167,690)

Operating Income (Loss), as a % of net revenue 10.0 % (11.1) % 8.3 % (18.7) %

Net revenue - U.S.

GAAP basis $ 367,359 $ 453,507

Reimbursable deal costs, (provision) benefit for credit losses and other 2,181 (7,501)

Interest expense 3 41

Losses associated with cost-saving initiatives – 587

Total adjustments (a) 2,184 (6,873)

Adjusted net revenue (b) 369,543 446,634

Adjusted compensation and benefits expense 239,968 302,080

Adjusted non-compensation expense 52,561 47,865

Adjusted operating income (b) $ 77,014 $ 96,689

Adjusted operating income, as a % of adjusted net revenue (b) 20.8 % 21.6 %

_______________________________________

(a) See Note 15 of Notes to Condensed Consolidated Financial Statements for information regarding cost-saving initiatives.

(a) Total adjustments equal the “other segment items” in Note 20 of Notes to Condensed Consolidated Financial Statements.

See “Consolidated Results of Operations” above for further information on the adjustments.

(b) Adjusted net revenue, adjusted operating income, and adjusted operating income as a percentage of adjusted net revenue are non-GAAP measures.

Certain Lazard fee and transaction statistics for the Financial Advisory segment are set forth below:

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Lazard Statistics:

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________________________________________

Dealogic as of October 2, 2024.

The geographical distribution of Financial Advisory net revenue is set forth below in percentage terms and is based on the Lazard offices that generate Financial Advisory net revenue, which are located in the Americas (primarily in the U.S.), EMEA (primarily in the U.K., France, Germany, Italy and Spain) and the Asia Pacific region and therefore may not be reflective of the geography in which the clients are located.

Dealogic as of April 2, 2025.

The geographical distribution of Financial Advisory adjusted net revenue is set forth below in percentage terms and is based on the Lazard offices that generate Financial Advisory adjusted net revenue, which are located in the Americas (primarily in the U.S.), EMEA (primarily in the U.K., France, Germany, Italy and Spain) and the Asia Pacific region and therefore may not be reflective of the geography in which the clients are located.

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Americas 66 % 63 %

EMEA 41 39 39 43

Asia Pacific 1 –

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The Company’s managing directors and many of its professionals have significant experience, and many of them are able to use this experience to advise on a combination of M&A, restructuring and other strategic advisory matters, depending on clients’ needs.

This adaptability enables Lazard to more effectively deploy its professionals to best advantage based on the often counter-cyclical nature of restructuring as compared to our M&A business.

This adaptability enables Lazard to more effectively deploy its professionals based on the often counter-cyclical nature of restructuring as compared to our M&A business.

While Lazard measures revenue by practice area, Lazard does not separately measure the costs or profitability of M&A services as compared to restructuring or other services.

Accordingly, Lazard measures performance in its Financial Advisory segment based on overall segment adjusted net revenue and operating income margins.

Accordingly, Lazard measures performance in its Financial Advisory segment based on overall segment adjusted net revenue and adjusted operating income margins.

Financial Advisory Results of Operations

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Lazard management believes that annual results are the most meaningful basis for comparison among present, historical and future periods.

Three Months Ended September 30, 2024 versus September 30, 2023

Financial Advisory net revenue increased $105 million, or 39%, as compared to the 2023 period, primarily driven by an increased number of completed M&A transactions with values greater than $500 million as compared to the 2023 period.

Operating expenses increased $38 million, or 13%, as compared to the 2023 period primarily due to an increase in compensation and benefits expense associated with increased adjusted net revenue.

Financial Advisory operating income was $37 million as compared to an operating loss of $30 million in the 2023 period and, as a percentage of net revenue, was 10.0%, as compared to (11.1)% in the 2023 period.

Nine Months Ended September 30, 2024 versus September 30, 2023

Financial Advisory net revenue increased $340 million, or 38%, as compared to the 2023 period .

The increase in Financial Advisory net revenue was primarily driven by an increased number of completed M&A transactions with values greater than $500 million as compared to the 2023 period.

Operating expenses increased $69 million, or 6%, as compared to the 2023 period primarily due to increased compensation and benefits expense associated with increased adjusted net revenue.

In addition, operating expenses in the 2024 and 2023 periods include $33 million and $92 million, respectively, associated with the cost-saving initiatives.

Financial Advisory operating income was $103 million as compared to an operating loss of $168 million in the 2023 period and, as a percentage of net revenue, was 8.3%, as compared to (18.7)% in the 2023 period.

Three Months Ended March 31, 2025 versus March 31, 2024

Financial Advisory net revenue decreased $86 million, or 19%, as compared to the 2024 period.

Financial Advisory adjusted net revenue decreased $77 million, or 17%, as compared to the 2024 period.

The decrease in Financial Advisory net revenue and adjusted net revenue was primarily driven by a lower number of transactions with fees above $10 million compared to the same period in 2024 and a decreased number of completed M&A transactions with values greater than $500 million as compared to the 2024 period.

Adjusted compensation and benefits expense decreased $62 million, or 21%, as compared to the 2024 period, primarily driven by decreased adjusted net revenue.

Adjusted non-compensation and benefits expense increased $5 million, or 10%, as compared to the 2024 period, primarily due to increased occupancy and equipment and marketing and business development expenses.

Adjusted operating income was $77 million, a decrease of $20 million, or 20%, as compared to adjusted operating income of $97 million in the 2024 period and, as a percentage of adjusted net revenue, was 20.8%, as compared to 21.6% in the 2024 period.

Asset Management

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AUM primarily consists of debt and equity instruments, which have a value that is readily available based on either prices quoted on a recognized exchange or prices provided by external pricing services.

Prices of equity and debt securities and other instruments that comprise our AUM are provided by well-recognized, independent, third-party vendors.

Such third-party vendors rely on prices provided by external pricing services which are obtained from recognized exchanges or markets, or, for certain fixed income securities, from evaluated bids or other similarly sourced price.

Prices of equity and debt securities and other instruments that comprise our AUM are provided by independent, third-party vendors.

Either directly, or through our third-party vendors, we perform a variety of regular due diligence procedures on our pricing service providers.

The following table shows the composition of AUM for the Asset Management segment (see Item 1, “Business—Principal Business Lines—Asset Management—Investment Strategies”):

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

($ in millions)

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Total AUM $ 227,427 $ 226,321

Total AUM at September 30, 2024 was $248 billion, an increase of $1 billion as compared to total AUM of $247 billion at December 31, 2023 due to market appreciation, partially offset by net outflows.

Average AUM for the three month period ended September 30, 2024 increased 4% as compared to the three month period ended September 30, 2023 and increased 6% as compared to the nine month period ended September 30, 2023.

As of September 30, 2024, approximately 83% of our AUM was managed on behalf of institutional and intermediary clients, including corporations, labor unions, public pension funds, insurance companies and banks, and through sub-advisory relationships, mutual fund sponsors, broker-dealers and registered advisors, compared to 85% as of December 31, 2023.

As of September 30, 2024, approximately 17% of our AUM was managed on behalf of individual client relationships, compared to approximately 15% as of December 31, 2023.

As of September 30, 2024, AUM with foreign currency exposure represented approximately 62% of our total AUM as compared to 64% at December 31, 2023.

Total AUM at March 31, 2025 was $227 billion, an increase of $1 billion as compared to total AUM of $226 billion at December 31, 2024 due to market and foreign exchange appreciation, partially offset by net outflows.

Average AUM for the first quarter of 2025 decreased 7% as compared to the first quarter of 2024 and decreased 1% as compared to the fourth quarter of 2024.

As of both March 31, 2025 and December 31, 2024, approximately 82% of our AUM was managed on behalf of institutional and intermediary clients, including corporations, labor unions, pension funds, insurance companies and banks, and through sub-advisory relationships, mutual fund sponsors, broker-dealers and registered advisors.

As of both March 31, 2025 and December 31, 2024, approximately 18% of our AUM was managed on behalf of individual client relationships.

As of both March 31, 2025 and December 31, 2024, AUM with foreign currency exposure represented approximately 62% of our total AUM.

AUM with foreign currency exposure generally declines in value with the strengthening of the U.S.

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Dollar weakens, with all other factors held constant.

The following is a summary of changes in AUM by asset class for the three month and nine month periods ended September 30, 2024 and 2023:

Three Months Ended September 30, 2024

Balance Inflows Outflows Net

Flows Market Value

Appreciation/

(Depreciation) Foreign

Appreciation/

(Depreciation) AUM

($ in millions)

Equity $ 190,426 $ 5,971 $ (16,857) $ (10,886) $ 7,651 $ 4,341 $ 191,532

Fixed Income 46,111 1,876 (3,240) (1,364) 1,662 1,524 47,933

Other 8,133 970 (1,099) (129) 69 119 8,192

Total $ 244,670 $ 8,817 $ (21,196) $ (12,379) $ 9,382 $ 5,984 $ 247,657

Net flows were primarily driven by outflows across the Global, Local and Multi-Regional platforms within the Equity asset class.

Nine Months Ended September 30, 2024

Balance Inflows Outflows Net

Flows Market Value

Appreciation/

(Depreciation) Foreign

Appreciation/

(Depreciation) AUM

($ in millions)

Equity $ 190,138 $ 16,547 $ (40,012) $ (23,465) $ 24,413 $ 446 $ 191,532

Fixed Income 48,107 5,752 (7,211) (1,459) 1,054 231 47,933

Other 8,406 1,565 (2,249) (684) 418 52 8,192

Total $ 246,651 $ 23,864 $ (49,472) $ (25,608) $ 25,885 $ 729 $ 247,657

Net flows were primarily driven by outflows across all platforms within the Equity asset class.

Three Months Ended September 30, 2023

The following is a summary of changes in AUM by asset class for the three month periods ended March 31, 2025 and 2024:

Three Months Ended March 31, 2025

Balance Inflows Outflows Net

9 unchanged sentences

Total $ 226,321 $ 11,257 $ (14,916) $ (3,659) $ 825 $ 3,940 $ 227,427

Nine Months Ended September 30, 2023

Net flows were primarily driven by outflows in the Multi-Regional Equity platform and the Emerging Markets Fixed Income platform.

Three Months Ended March 31, 2024

Balance Inflows Outflows Net

9 unchanged sentences

Total $ 246,651 $ 6,084 $ (12,714) $ (6,630) $ 13,971 $ (3,560) $ 250,432

Inflows include approximately $3.9 billion related to a wealth management acquisition.

Average AUM for the three month and nine month periods ended September 30, 2024 and 2023 for each significant asset class is set forth below.

Average AUM for the three month periods ended March 31, 2025 and 2024 for each significant asset class is set forth below.

Average AUM generally represents the average of the monthly ending AUM balances for the period.

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

($ in millions)

7 unchanged sentences

Total Average AUM $ 230,787 $ 246,950

The following table summarizes the reported operating results attributable to the Asset Management segment:

The following table summarizes the adjusted operating results attributable to the Asset Management segment:

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

($ in thousands)

Net Revenue $ 293,878 $ 284,855 $ 874,841 $ 857,212

Operating Expenses (a) 251,981 232,011 749,066 749,281

Operating Income $ 41,897 $ 52,844 $ 125,775 $ 107,931

Operating Income, as a % of net revenue 14.3 % 18.6 % 14.4 % 12.6 %

Net revenue - U.S.

GAAP basis $ 288,100 $ 295,476

Revenue related to noncontrolling interests and similar arrangements (6,850) (4,097)

Distribution fees and other (16,762) (15,448)

Interest expense 6 3

Total adjustments (a) (23,606) (19,542)

Adjusted net revenue (b) 264,494 275,934

Adjusted compensation and benefits expense 142,827 150,698

Adjusted non-compensation expense 59,211 55,575

Adjusted operating income (b) $ 62,456 $ 69,661

Adjusted operating income, as a % of adjusted net revenue (b) 23.6 % 25.2 %

_______________________________________

(a) See Note 15 of Notes to Condensed Consolidated Financial Statements for information regarding cost-saving initiatives.

The geographical distribution of Asset Management net revenue is set forth below in percentage terms, and is based on the Lazard offices that manage and distribute the respective AUM amounts.

(a) Total adjustments equal the “other segment items” in Note 20 of Notes to Condensed Consolidated Financial Statements.

See “Consolidated Results of Operations” above for further information on the adjustments.

(b) Adjusted net revenue, adjusted operating income, and adjusted operating income as a percentage of adjusted net revenue are non-GAAP measures.

The geographical distribution of Asset Management adjusted net revenue is set forth below in percentage terms, and is based on the Lazard offices that manage and distribute the respective AUM amounts.

Such geographical distribution may not be reflective of the geography of the investment products or clients.

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Americas 41 % 42 %

EMEA 46 46 46 45

Asia Pacific 14 14

3 unchanged sentences

Lazard management believes that annual results are the most meaningful basis for comparison among present, historical and future periods.

Three Months Ended September 30, 2024 versus September 30, 2023

Asset Management net revenue increased $9 million, or 3%, as compared to the 2023 period.

Management fees and other revenue was $289 million, an increase of $6 million, or 2%, as compared to $283 million in the 2023 period.

Incentive fees were $5 million, an increase of $3 million as compared to $2 million in the 2023 period.

Operating expenses increased $20 million, or 9%, as compared to the 2023 period.

Asset Management operating income was $42 million, a decrease of $11 million, or 21%, as compared to operating income of $53 million in the 2023 period and, as a percentage of net revenue, was 14.3%, as compared to 18.6% in the 2023 period.

Nine Months Ended September 30, 2024 versus September 30, 2023

Asset Management net revenue increased $18 million, or 2%, as compared to the 2023 period.

Management fees and other revenue was $857 million, an increase of $14 million, or 2%, as compared to $844 million in the 2023 period.

Incentive fees were $18 million, an increase of $4 million as compared to $14 million in the 2023 period.

Operating expenses, which included $12 million associated with the cost-saving initiatives in the 2024 period, remained substantially the same as compared to the 2023 period which included $53 million associated with the cost-saving initiatives.

Asset Management operating income was $126 million, an increase of $18 million, or 17%, as compared to operating income of $108 million in the 2023 period and, as a percentage of net revenue, was 14.4%, as compared to 12.6% in the 2023 period.

The following table summarizes the reported operating results attributable to the Corporate segment:

Three Months Ended March 31, 2025 versus March 31, 2024

Asset Management net revenue decreased $7 million, or 2%, as compared to the 2024 period.

Asset Management adjusted net revenue decreased $11 million, or 4%, as compared to the 2024 period.

Management fees and other revenue, on an adjusted basis, was $256 million, a decrease of $12 million, or 5%, as compared to $268 million in the 2024 period.

Incentive fees, on an adjusted basis, were $9 million, an increase of $1 million as compared to $8 million in the 2024 period.

Adjusted compensation and benefits expense decreased $8 million, or 5%, as compared to the 2024 period.

Adjusted non-compensation expense increased $4 million, or 7%, as compared to the 2024 period.

Asset Management adjusted operating income was $62 million, a decrease of $7 million, or 10%, as compared to adjusted operating income of $70 million in the 2024 period and as a percentage of adjusted net revenue, was 23.6%, as compared to 25.2% in the 2024 period.

The following table summarizes the reported adjusted operating results attributable to the Corporate segment:

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

($ in thousands)

Interest income $ 10,035 $ 4,921 $ 24,564 $ 15,566

Net revenue (loss) - U.S.

GAAP basis $ (7,408) $ 15,770

(Revenue) loss related to noncontrolling interests and similar arrangements 839 (3,006)

Gains related to LFI and other similar arrangements (5,243) (9,373)

Interest expense 20,960 20,606

Net Interest Expense (12,506) (14,205) (41,260) (42,107)

Other Revenue (Loss) 132,577 (12,780) 165,655 (1,736)

Net Revenue (Loss) 120,071 (26,985) 124,395 (43,843)

Benefit pursuant to tax receivable agreement – – – (40,435)

Other operating expenses (a) 37,737 1,155 73,721 88,687

Operating Expenses 37,737 1,155 73,721 48,252

Operating Income (Loss) $ 82,334 $ (28,140) $ 50,674 $ (92,095)

Total adjustments (a) 16,556 8,227

Adjusted net revenue (b) 9,148 23,997

Adjusted compensation and benefits expense 38,491 39,955

Adjusted non-compensation expense 36,110 30,853

Adjusted operating loss (b) $ (65,453) $ (46,811)

_________________________________

(a) See Note 15 of Notes to Condensed Consolidated Financial Statements for information regarding cost-saving initiatives.

(a) Total adjustments equal the “other segment items” in Note 20 of Notes to Condensed Consolidated Financial Statements.

See “Consolidated Results of Operations” above for further information on the adjustments.

(b) Adjusted net revenue and adjusted operating loss are non-GAAP measures.

Corporate Results of Operations

Corporate operating results in any particular quarter or period may not be indicative of future results and may fluctuate based on a variety of factors.

Corporate’s quarterly results in any particular quarter or period may not be indicative of future results and may fluctuate based on a variety of factors.

Lazard management believes that annual results are the most meaningful basis for comparison among present, historical and future periods.

Three Months Ended September 30, 2024 versus September 30, 2023

Net interest expense decreased $2 million, or 12%, as compared to the 2023 period.

Other revenue increased $145 million as compared to the 2023 period primarily due to a gain on sale of property of $114 million in the 2024 period.

Additionally, there were gains in the 2024 period as compared to losses in the 2023 period attributable to investments held in connection with LFI.

Operating expenses increased $37 million as compared to the 2023 period primarily due to expenses associated with sale of property of $20 million in the 2024 period.

Additionally, there were charges in the 2024 period as compared to credits in the 2023 period pertaining to LFI.

Nine Months Ended September 30, 2024 versus September 30, 2023

Net interest expense decreased $1 million, or 2%, as compared to the 2023 period.

Other revenue increased $167 million as compared to the 2023 period primarily due to a gain on sale of property of $114 million in the 2024 period as compared to losses from the impairment of equity method investments and the liquidation of LGAC in the 2023 period which did not recur.

Operating expenses excluding the benefit pursuant to TRA, decreased $15 million, or 17%, as compared to the 2023 period reflecting $33 million associated with the cost-saving initiatives in the 2023 period.

Results also reflect an increase in expenses associated with sale of property of $20 million in the 2024 period.

Three Months Ended March 31, 2025 versus March 31, 2024

Corporate net revenue decreased $23 million as compared to the 2024 period, primarily due to lower investment gains in the 2025 period as compared to the 2024 period, including investments held in connection with LFI.

Corporate adjusted net revenue decreased $15 million, as compared to the 2024 period, primarily due to lower investment gains in the 2025 period as compared to the 2024 period.

Adjusted compensation and benefits expense, including centrally managed costs, decreased $1 million, or 4%, as compared to the 2024 period.

Adjusted non-compensation expense, including centrally managed costs, increased $5 million, or 17%, as compared to the 2024 period.

The Company’s cash flows are influenced primarily by the timing of the receipt of Financial Advisory and Asset Management fees, the timing of distributions to shareholders, payments of incentive compensation to managing directors and employees and purchases of common stock.

4 unchanged sentences

Summary of Cash Flows:

Nine Months Ended

September 30,

Three Months Ended

($ in millions)

1 unchanged sentence

Operating activities:

Net income (loss) $ 208 $ (129)

Net income $ 62 $ 40

Adjustments to reconcile net income to net cash provided by operating activities (a) 97 134

Other operating activities (b) (376) (264)

Net cash provided by (used in) operating activities 380 (177)

Net cash used in operating activities (217) (90)

Investing activities (23) (7)

1 unchanged sentence

Effect of exchange rate changes 30 (22)

Net Increase (Decrease) in Cash and Cash Equivalents and Restricted Cash 289 (1,632)

Net Decrease in Cash and Cash Equivalents and Restricted Cash (401) (20)

Cash and Cash Equivalents and Restricted Cash (d):

2 unchanged sentences

________________________________________

(a) Consists primarily of amortization of deferred expenses and share-based incentive compensation, noncash lease expenses, depreciation and amortization of property, gain on sale of property and deferred tax provision (benefit).

(a) Consists primarily of amortization of deferred expenses and share-based incentive compensation, noncash lease expenses, depreciation and amortization of property and deferred tax provision (benefit).

(b) Includes net changes in operating assets and liabilities.

(c) Consists primarily of purchases of shares of common stock, tax withholdings related to the settlement of vested RSUs and vested PRSUs, common stock dividends, changes in customer deposits, distributions to noncontrolling interest holders, activity related to borrowings (including in 2024, the issuance of the 2031 Notes and the partial redemption of the 2025 Notes), distributions to redeemable noncontrolling interests associated with LGAC's redemption of all its outstanding Class A ordinary shares in 2023.

(d) Consists of cash and cash equivalents, deposits with banks and short-term investments and restricted cash.

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While cash flow from Asset Management activities is relatively stable, in the case of Financial Advisory, fee receipts are generally dependent upon the successful completion of client transactions, the occurrence and timing of which is irregular and not subject to Lazard’s control.

In the third quarter of 2024, the Company completed the sale of an owned office building for gross proceeds of approximately $194 million, subject to payment of taxes and other expenses.

The resulting net proceeds will be used for general corporate purposes.

Liquidity is significantly impacted by cash payments for incentive compensation, a significant portion of which are made during the first three months of the year.

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We also make payments during the year on behalf of certain managing directors for their estimated taxes, which serve to reduce their respective incentive compensation payments.

Additionally, we made payments through the third quarter of 2024 relating to severance and other employee termination costs associated with the cost-saving initiatives.

(See Note 15 of Notes to Condensed Consolidated Financial Statements).

Additionally, we made payments through 2024 relating to severance and other employee termination costs associated with cost-saving initiatives.

Also See “Senior Debt” below for senior debt refinancing in the first quarter of 2024.

Liquidity is also affected by the level of LFB customer-related demand deposits, primarily from clients and funds managed by LFG.

To the extent that such deposits rise or fall, and assuming unchanged asset allocation, this has a corresponding impact on liquidity held at LFB, with the majority of such amounts generally being recorded in “deposits with banks and short-term investments”.

with banks and short-term investments”.

LFB is subject to, and in compliance with, regulatory liquidity coverage ratios and liquidity levels are monitored on a daily basis.

We regularly monitor our liquidity position, including cash levels, lease obligations, investments, credit lines, principal investment commitments, interest and principal payments on debt, capital expenditures, dividend payments, purchases of shares of common stock, compensation and matters relating to liquidity and to compliance with regulatory net capital requirements.

At September 30, 2024, Lazard had approximately $1,166 million of cash and cash equivalents, including approximately $599 million held at Lazard’s operations outside the U.S.

At March 31, 2025, Lazard had approximately $909 million of cash and cash equivalents, including approximately $494 million held at Lazard’s operations outside the U.S.

Lazard provides for income taxes on substantially all of its foreign earnings and we expect that no material amount of additional taxes would be recognized upon receipt of dividends or distributions of such earnings from our foreign operations.

As of September 30, 2024, the Company’s remaining lease obligations were $21 million for 2024 (October 1 through December 31), $144 million from 2025 through 2026, $143 million from 2027 through 2028 and $332 million from 2029 through 2039.

As of September 30, 2024, Lazard had approximately $210 million in unused lines of credit available to it, including a $200 million, five-year, senior revolving credit facility under the Second Amended and Restated Credit Agreement.

In April 2025, we made additional investments of approximately $90 million to seed our Asset Management strategies in connection with the launch of actively managed ETFs.

As of March 31, 2025, the Company’s remaining lease obligations were $60 million for 2025 (April 1 through December 31), $145 million from 2026 through 2027, $141 million from 2028 through 2029 and $261 million from 2030 through 2039.

As of March 31, 2025, Lazard had approximately $209 million in unused lines of credit available to it, including a $200 million, five-year, senior revolving credit facility under the Second Amended and Restated Credit Agreement, among Lazard Group LLC, the Banks from time to time party thereto and Citibank, N.A., as Administrative Agent (as amended from time to time, the “Second Amended and Restated Credit Agreement”).

The Second Amended and Restated Credit Agreement contains customary terms and conditions, including limitations on consolidations, mergers, indebtedness and certain payments, as well as financial condition covenants relating to leverage and interest coverage ratios.

Lazard Group’s obligations under the Second Amended and Restated Credit Agreement may be accelerated upon customary events of default, including non-payment of principal or interest, breaches of covenants, cross-defaults to other material debt, a change in control and specified bankruptcy events.

Borrowings under

the Second Amended and Restated Credit Agreement generally will bear interest at adjusted term SOFR plus an applicable margin for specific interest periods determined based on Lazard Group’s highest credit rating from an internationally recognized credit agency.

The Second Amended and Restated Credit Agreement includes financial covenants that require that Lazard Group not permit (i) its Consolidated Leverage Ratio (as defined in the Second Amended and Restated Credit Agreement) for the 12-month period ending on the last day of any fiscal quarter to be greater than 3.25 to 1.00, provided that the Consolidated Leverage Ratio may be greater than 3.25 to 1.00 for four (consecutive or nonconsecutive) quarters so long as it is not greater than 3.50 to 1.00 on the last day of any such quarter, or (ii) its Consolidated Interest Coverage Ratio (as defined in the Second Amended and Restated Credit Agreement) for the 12-month period ending on the last day of any fiscal quarter to be less than 3.00 to 1.00.

No amounts were outstanding under the Second Amended and Restated Credit Agreement as of September 30, 2024.

Borrowings under the Second Amended and Restated Credit Agreement generally will bear interest at adjusted term SOFR plus an applicable margin for specific interest periods determined based on Lazard Group’s highest credit rating from an internationally recognized credit agency.

The Second Amended and Restated Credit Agreement includes financial covenants that require that Lazard Group LLC not permit (i) its Consolidated Leverage Ratio (as defined in the Second Amended and Restated Credit Agreement) for the 12-month period ending on the last day of any fiscal quarter to be greater than 3.25 to 1.00, provided that the Consolidated Leverage Ratio may be greater than 3.25 to 1.00 for four (consecutive or nonconsecutive) quarters so long as it is not greater than 3.50 to 1.00 on the last day of any such quarter, or (ii) its Consolidated Interest Coverage Ratio (as defined in the Second Amended and Restated Credit Agreement) for the 12-month period ending on the last day of any fiscal quarter to be less than 3.00 to 1.00.

No amounts were outstanding under the Second Amended and Restated Credit Agreement as of March 31, 2025.

In addition, the Second Amended and Restated Credit Agreement contains certain other covenants (none of which relate to financial condition), events of default and other customary provisions.

At September 30, 2024, the Company was in compliance with all financial and nonfinancial provisions.

At March 31, 2025, the Company was in compliance with all financial and nonfinancial provisions.

Lazard’s annual cash flow generated from operations historically has been sufficient to enable it to meet its annual obligations.

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See also Notes 11, 13, 14, 16, 18 and 19 of Notes to Condensed Consolidated Financial Statements regarding information in connection with commitments, incentive plans, employee benefit plans, income taxes, tax receivable agreement obligations and regulatory requirements, respectively.

The table below sets forth our corporate indebtedness as of September 30, 2024 and December 31, 2023.

The table below sets forth our corporate indebtedness as of March 31, 2025 and December 31, 2024.

The agreements with respect to this indebtedness are discussed in more detail in our condensed consolidated financial statements and related notes included elsewhere in this Form 10-Q and in our Form 10-K.

Outstanding as of

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Senior Debt Annual Interest Rate Principal Unamortized

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Senior Notes 6.00 % 400.0 3.9 396.1 400.0 4.1 395.9

Lazard Group 2031

Senior Notes 6.00 % 400.0 3.7 396.3 – – –

$ 1,700.0 $ 12.1 $ 1,687.9 $ 1,700.0 $ 13.0 $ 1,687.0

In the first quarter of 2024, Lazard Group issued $400 million of 6.0% senior notes due March 2031 to refinance the upcoming maturity of our 2025 Notes.

We used part of the net proceeds to purchase in a tender offer $236 million of the 2025 Notes ($164 million remains outstanding).

We invested the net proceeds in U.S.

Treasury securities which are included in cash and cash equivalents and investments on the condensed consolidated statements of financial condition as of September 30, 2024.

On October 30, 2024, the Company announced that it will redeem all of the issued and outstanding 2025 Notes on December 12, 2024.

The indenture and supplemental indentures relating to Lazard Group’s senior notes contain certain covenants (none of which relate to financial condition), events of default and other customary provisions.

At September 30, 2024, the Company was in compliance with all of these provisions.

The indenture and supplemental indentures relating to Lazard Group LLC’s senior notes contain certain covenants (none of which relate to financial condition), events of default and other customary provisions.

At March 31, 2025, the Company was in compliance with all of these provisions.

We may, to the extent required and subject to restrictions contained in our financing arrangements, use other financing sources, which may cause us to be subject to additional restrictions or covenants.

Guarantor Information

has provided an unconditional and irrevocable guarantee for the repayment of the Lazard Group 2027 Notes, 2028 Notes, 2029 Notes and 2031 Notes (collectively, the “Lazard Group Senior Notes”), and has amended the Second Amended and Restated Credit Agreement, to provide an unconditional and irrevocable guarantee for Lazard Group's obligations under the Second Amended and Restated Credit Agreement.

See Note 10 of Notes to Condensed Consolidated Financial Statements for additional information regarding senior debt.

As permitted under Rule 13-01 of Regulation S-X, Lazard, Inc.

has excluded summarized financial information for Lazard Group because the combined assets, liabilities and results of operations of Lazard Group for the period were not materially different than the corresponding amounts in Lazard, Inc.’s condensed consolidated financial statements presented herein and management believes such summarized financial information would be repetitive and would not provide incremental value to investors.

Stockholders’ Equity

At September 30, 2024, total stockholders’ equity was $680 million, as compared to $482 million at December 31, 2023, including $624 million and $424 million attributable to Lazard, Inc.

At March 31, 2025, total stockholders’ equity was $649 million, as compared to $685 million at December 31, 2024, including $603 million and $636 million attributable to Lazard, Inc.

on the respective dates.

The net activity in stockholders’ equity during the nine month period ended September 30, 2024 is reflected in the table below (in millions of dollars):

The net activity in stockholders’ equity during the three month period ended March 31, 2025 is reflected in the table below (in millions of dollars):

Stockholders’ Equity - January 1, 2025 $ 685

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Other - net (11)

Stockholders’ Equity - September 30, 2024 $ 680

Stockholders’ Equity - March 31, 2025 $ 649

________________________________________

(a) Excludes net income associated with redeemable noncontrolling interests of $9 million in 2024.

(a) Excludes net loss associated with redeemable noncontrolling interests of $1 million in 2025.

(b) The tax withholding portion of share-based compensation is settled in cash, not shares.

See the Consolidated Financial Statements—Consolidated Statements of Changes in Stockholders’ Equity and Redeemable Noncontrolling Interests for further detail.

See the Consolidated Financial Statements—Condensed Consolidated Statements of Changes in Stockholders’ Equity and Redeemable Noncontrolling Interests for further detail.

The Board of Directors of Lazard has issued a series of authorizations to repurchase common stock, which help offset the dilutive effect of our share-based incentive compensation plans.

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Purchases with respect to such program are set forth in the table below:

Nine Months Ended September 30:

Three Months Ended March 31:

Shares Purchased Average

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2025 773,955 $ 46.73

As of September 30, 2024, a total of $356 million of share repurchase authorization remained available under Lazard, Inc.’s share repurchase program, of which $156 million will expire on December 31, 2024 and $200 million will expire on December 31, 2026.

During the nine month period ended September 30, 2024, Lazard, Inc.

As of March 31, 2025, a total of $164 million of share repurchase authorization remained available under Lazard, Inc.’s share repurchase program which will expire on December 31, 2026.

During the three month period ended March 31, 2025, Lazard, Inc.

had in place trading plans under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), pursuant to which it effected stock repurchases in the open market.

On October 30, 2024, the Board of Directors of Lazard declared a quarterly dividend of $0.50 per share on our common stock.

The dividend is payable on November 15, 2024 to stockholders of record on November 8, 2024.

On April 24, 2025, the Board of Directors of Lazard declared a quarterly dividend of $0.50 per share on our common stock.

The dividend is payable on May 16, 2025 to stockholders of record on May 5, 2025.

See Notes 12 and 13 of Notes to Condensed Consolidated Financial Statements for additional information regarding Lazard’s stockholders’ equity and incentive plans, respectively.

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We actively monitor our regulatory capital base.

Our principal subsidiaries are subject to regulatory requirements in their respective jurisdictions to ensure their general financial soundness and liquidity, which require, among other things, that we comply with rules regarding certain minimum capital requirements.

Our principal subsidiaries are subject to regulatory requirements in their respective jurisdictions to ensure their general financial soundness and liquidity, which require, among other things,

that we comply with rules regarding certain minimum capital requirements.

These regulatory requirements may restrict the flow of funds to and from affiliates.

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The allowance for credit losses involves judgment including the incorporation of historical loss experience and assessment of risk characteristics of our clients.

The charge-off rate based on historical credit loss experience was an average annual rate estimated using the most recent two years of charge-off data.

The charge-off rate based on historical credit loss experience is an average annual rate estimated using the most recent two years of charge-off data.

When assessing risk characteristics of individual clients, we considered the macroeconomic environment in the local market, our collection experience and recent communication with the client, as well as any potential future engagement with the client.

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Annual discretionary compensation represents a significant portion of our annual compensation and benefits expense.

We allocate the estimated amount of such annual discretionary compensation to interim periods in proportion to the amount of adjusted net revenue earned in such periods based on an estimated annual ratio of adjusted compensation and benefits expense to adjusted net revenue.

We allocate the estimated amount of such annual discretionary compensation to interim periods by segment in proportion to the amount of adjusted net revenue earned in such periods based on an estimated annual ratio of adjusted compensation and benefits expense to adjusted net revenue.

See “Financial Statement Overview—Operating Expenses” for more information on our periodic compensation and benefits expense.

As part of the process of preparing our consolidated financial statements, we estimate our income taxes for each of our tax-paying entities in its respective jurisdiction.

In addition to estimating actual current tax liabilities for these jurisdictions, we also must account for the tax effects of differences between the financial reporting and tax reporting of items, such as basis adjustments, compensation and benefits expense, and depreciation and amortization.

In addition to estimating actual current tax liabilities for these jurisdictions, we also must account for the tax effects of differences between the financial reporting and tax reporting of

items, such as basis adjustments, compensation and benefits expense, and depreciation and amortization.

Differences which are temporary in nature result in deferred tax assets and liabilities.

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Certain of our tax-paying entities have individually experienced losses on a cumulative three year basis or have tax attributes that may expire unused.

In addition, some of our tax-paying entities have recorded a valuation allowance on substantially all of their deferred tax assets due to the combined effect of operating losses in certain subsidiaries of these entities as well as foreign taxes that together substantially offset any U.S.

tax liability.

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The amount of the TRA liability is an undiscounted amount based upon current tax laws and the structure of the Company and various assumptions regarding potential future operating profitability.

The assumptions reflected in the estimate involve significant judgment, and if our structure or actual income are different than our assumptions, we could be required to accelerate payments under the TRA.

As such, the actual amount and timing of payments under the TRA could differ materially from our estimates.

The assumptions reflected in the estimate involve significant judgment, and as such, the actual amount and timing of payments under the TRA could differ materially from our estimates.

See Note 18 of Notes to Condensed Consolidated Financial Statements for additional information regarding the TRA.

Goodwill has an indefinite life and is tested for impairment annually, as of November 1, or more frequently if circumstances indicate impairment may have occurred.

Goodwill has an indefinite life and is tested for impairment annually, as of October 1, or more frequently if circumstances indicate impairment may have occurred.

The Company performs a qualitative assessment about whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount in lieu of actually calculating the fair value of the reporting unit.

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To the extent material, we consolidate seed and LFI investment entities in which we own a controlling financial interest, and we would deconsolidate any such entity when we no longer have a controlling financial interest in such entity.

Seed investments held in entities in which the Company maintained a controlling financial interest were $115 million in ten entities as of September 30, 2024, as compared to $114 million in eleven entities as of December 31, 2023.

LFI investments held in entities in which the Company maintained a controlling financial interest were $98 million in nine entities as of September 30, 2024, as compared to $144 million in nine entities as of December 31, 2023.

As of September 30, 2024 and December 31, 2023, the Company did not consolidate any seed investment entities or LFI investment entities, with the exception of the consolidation of certain LFI funds (see Note 21 of Notes to Condensed Consolidated Financial Statements).

Seed investments held in entities in which the Company maintained a controlling financial interest were $110 million in twelve entities as of March 31, 2025, as compared to $111 million in ten entities as of December 31, 2024.

LFI investments held in entities in which the Company maintained a controlling financial interest were $54 million in nine entities as of March 31, 2025, as compared to $93 million in nine entities as of December 31, 2024.

As of March 31, 2025 and December 31, 2024, the Company did not consolidate any seed investment entities or LFI investment entities, with the exception of the consolidation of certain LFI funds (see Note 21 of Notes to Condensed Consolidated Financial Statements).

As such, seed investments and substantially all of LFI investments included in “investments” on the condensed consolidated statements of financial condition represented the Company’s economic interest in the seed and LFI investments.

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Data relating to investments is set forth below:

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

($ in thousands)

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Private equity 7,368 7,570

Treasury securities 49,673 –

Fixed income and other 2,362 2,266

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_______________________

(a) At September 30, 2024 and December 31, 2023, seed investments in directly owned equity securities were invested as follows:

September 30, 2024 December 31, 2023

(a) At March 31, 2025 and December 31, 2024, seed investments in directly owned equity securities were invested as follows:

March 31, 2025 December 31, 2024

Percentage invested in:

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Risk exposures may change as a result of ongoing portfolio activities and changing market conditions, among other things.

Equity Market Price Risk—At September 30, 2024 and December 31, 2023, the Company’s exposure to equity market price risk in its investment portfolio, which primarily relates to investments in equity securities, equity funds and hedge funds, was approximately $163 million and $150 million, respectively.

Equity Market Price Risk—At March 31, 2025 and December 31, 2024, the Company’s exposure to equity market price risk in its investment portfolio, which primarily relates to investments in equity securities, equity funds and hedge funds, was approximately $148 million and $164 million, respectively.

The Company hedges market exposure arising from a significant portion of our equity investment portfolios by entering into total return swaps.

The Company estimates that a hypothetical 10% adverse change in market prices would not result in a net change in the carrying value of such investments as of September 30, 2024 and would result in a net increase of approximately $0.2 million as of December 31, 2023, in the carrying value of such investments, including the effect of the hedging transactions.

Interest Rate and Credit Spread Risk—At September 30, 2024 and December 31, 2023, the Company’s exposure to interest rate and credit spread risk in its investment portfolio related to investments in debt securities or funds which invest primarily in debt securities was $70 million and $18 million, respectively.

The Company estimates that a hypothetical 10% adverse change in market prices would result in a net decrease of approximately $1.7 million and $0.9 million as of March 31, 2025 and December 31, 2024, respectively, in the carrying value of such investments, including the effect of the hedging transactions.

Interest Rate and Credit Spread Risk—At March 31, 2025 and December 31, 2024, the Company’s exposure to interest rate and credit spread risk in its investment portfolio related to investments in debt securities or funds which invest primarily in debt securities was $23 million and $24 million, respectively.

The Company hedges market exposure arising from a portion of our debt investment portfolios by entering into total return swaps.

The Company estimates that a hypothetical 100 basis point adverse change in interest rates or credit spreads would result in a net decrease of approximately $0.3 million as of September 30, 2024 and would not result in a net change in the carrying value of such investments as of December 31, 2023, including the effect of the hedging transactions.

Foreign Exchange Rate Risk—At September 30, 2024 and December 31, 2023, the Company’s exposure to foreign exchange rate risk in its investment portfolio, which primarily relates to investments in foreign currency denominated equity and debt securities and, at December 31, 2023, private equity investments, was $66 million and $69 million, respectively.

The Company estimates that a hypothetical 100 basis point adverse change in interest rates or credit spreads would result in a net decrease of approximately $0.8 million as of March 31, 2025 and a net increase of approximately $0.6 million in the carrying value of such investments as of December 31, 2024, including the effect of the hedging transactions.

Foreign Exchange Rate Risk—At March 31, 2025 and December 31, 2024, the Company’s exposure to foreign exchange rate risk in its investment portfolio, which primarily relates to investments in foreign currency denominated equity and debt securities and private equity investments was $83 million and $65 million, respectively.

A significant portion of the Company’s foreign currency exposure related to our equity and debt investment portfolios is hedged through the aforementioned total return swaps.

The Company estimates that a 10% adverse change in foreign exchange rates versus the U.S.

Dollar would result in a net decrease of approximately $1.6 million and $2.0 million in the carrying value of such investments as of September 30, 2024 and December 31, 2023, respectively, including the effect of the hedging transactions.

Dollar would result in a net decrease of approximately $4.1 million and $2.0 million in the carrying value of such investments as of March 31, 2025 and December 31, 2024, respectively, including the effect of the hedging transactions.

Private Equity—The Company invests in private equity primarily as a part of its co-investment activities and in connection with certain legacy businesses.

At September 30, 2024 and December 31, 2023, the Company’s exposure to changes in fair value of such investments was approximately $27 million and $30 million, respectively.

The Company estimates that a hypothetical 10% adverse change in fair value would result in a decrease of approximately $2.7 million and $3.0 million in the carrying value of such investments as of September 30, 2024 and December 31, 2023, respectively.

At both March 31, 2025 and December 31, 2024, the Company’s exposure to changes in fair value of such investments was approximately $24 million.

The Company estimates that a hypothetical 10% adverse change in fair value would result in a decrease of approximately $2.4 million in the carrying value of such investments as of both March 31, 2025 and December 31, 2024.

For additional information regarding risks associated with our investments, see Item 1A, “Risk Factors—Other Business Risks—Our results of operations may be affected by fluctuations in the fair value of positions held in our investment portfolios” in our Form 10-K.

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We maintain an allowance for credit losses to provide coverage for expected losses from our receivables.

At September 30, 2024, total receivables amounted to $682 million, net of an allowance for credit losses of $27 million.

At March 31, 2025, total receivables amounted to $683 million, net of an allowance for credit losses of $26 million.

As of that date, Financial Advisory and Asset Management fees, and customers and other receivables comprised 78% and 22% of total receivables, respectively.

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LFG and LFB offer wealth management and banking services to high net worth individuals and families.

At September 30, 2024 and December 31, 2023, customers and other receivables included $93 million and $86 million, respectively, of such LFB loans which are fully collateralized and monitored for counterparty creditworthiness, with such collateral having a fair value in excess of the carrying amount of the loans.

At March 31, 2025 and December 31, 2024, customers and other receivables included $96 million and $83 million, respectively, of such LFB loans which are fully collateralized and monitored for counterparty creditworthiness, with such collateral having a fair value in excess of the carrying amount of the loans.

Therefore, there was no allowance for credit losses required at those dates related to such receivables.

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In entering into derivative agreements, the Company is subject to counterparty risk.

Net derivative assets amounted to $2 million and $3 million at September 30, 2024 and December 31, 2023, respectively, and net derivative liabilities, excluding the derivative liability arising from the Company’s obligation pertaining to LFI and other similar deferred compensation arrangements amounted to $8 million and $3 million at September 30, 2024 and December 31, 2023, respectively.

Net derivative assets amounted to $1 million and $4 million at March 31, 2025 and December 31, 2024, respectively, and net derivative liabilities, excluding the derivative liability arising from the Company’s obligation pertaining to LFI and other similar deferred compensation arrangements amounted to $0.4 million and $3 million at March 31, 2025 and December 31, 2024, respectively.

The Company also records derivative liabilities relating to its obligations pertaining to LFI awards and other similar deferred compensation arrangements, the fair value of which is based on the value of the underlying investments, adjusted for estimated forfeitures.

Changes in the fair value of the derivative liabilities are equally offset by the changes in the fair value of investments which are expected to be delivered upon settlement of LFI awards.

Derivative liabilities relating to LFI amounted to $285 million and $365 million at September 30, 2024 and December 31, 2023, respectively.

Derivative liabilities relating to LFI amounted to $172 million and $271 million at March 31, 2025 and December 31, 2024, respectively.

Risks Related to Cash and Cash Equivalents and Corporate Indebtedness

A significant portion of the Company’s indebtedness has fixed interest rates, while its cash and cash equivalents generally have market interest rates.

Based on account balances as of September 30, 2024, Lazard estimates that its annual operating income relating to cash and cash equivalents would increase by approximately $12 million in the event interest rates were to increase by 1% and decrease by approximately $12 million if rates were to decrease by 1%.

As of September 30, 2024, the Company’s cash and cash equivalents totaled approximately $1,166 million.

A significant portion of the Company’s indebtedness has fixed interest rates, while its cash and cash equivalents typically bear interest at market interest rates.

Based on account balances as of March 31, 2025, Lazard estimates that its annual operating income relating to cash and cash equivalents would increase by approximately $9 million in the event interest rates were to increase by 1% and decrease by approximately $9 million if rates were to decrease by 1%.

As of March 31, 2025, the Company’s cash and cash equivalents totaled approximately $909 million.

Substantially all of the Company’s cash and cash equivalents were invested in (i) highly liquid institutional money market

funds (a significant majority of which were invested solely in U.S.

Government or agency money market funds), (ii) in short-term interest bearing and non-interest bearing accounts at a number of leading banks throughout the world, (iii) in short-term certificates of deposit from such banks and (iv) short-term U.S.

Treasury securities.

Government or agency money market funds), (ii) in short-term interest bearing and non-interest bearing accounts at a number of leading banks throughout the world and (iii) in short-term certificates of deposit from such banks.

Cash and cash equivalents are continuously monitored.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis