Lazard Ltd Reports First-Half and Second-Quarter 2008 Results

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– Net Income Per Share (diluted), on a fully exchanged basis, of $0.71 for first-half and $0.54 for second-quarter 2008 – Highlights Core operating business revenue(a) increased 9% to a first-half record of $848.7 million and increased 15% to a second-quarter record of $467.8 million Financial Advisory operating revenue increased 7% to a first-half record of $501.4 million and increased 18% to a second-quarter record of $289.0 million M&A operating revenue increased 9% to $391.1 million in the first half of 2008 and increased 37% to a second-quarter record of $225.1 million Asset Management operating revenue increased 13% to a first-half record of $347.3 million and increased 11% to a second-quarter record of $178.8 million; assets under management (AUM) of $134.1 billion at the end of the second quarter of 2008 included net inflows of $2.6 billion during the quarter Corporate revenue was $26.2 million in the second quarter of 2008 Operating revenue(b) increased 1% to a first-half record of $835.2 million and increased 12% to a second-quarter record of $494.0 million Net income on a fully-exchanged basis(c) decreased 31% to $80.5 million, or $0.71 per share (diluted), for the first half of the year and increased 5% to $64.6 million, or $0.54 per share (diluted), for the second quarter of 2008

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Reconciliation of US GAAP to Full Exchange Results

NEW YORK (Business Wire EON) July 30, 2008 -- Lazard Ltd (NYSE: LAZ) today announced financial results for the first half and quarter ended June 30, 2008. Net income on a fully exchanged basis was $80.5 million, or $0.71 per share (diluted), for the first half of 2008, compared to $116.5 million, or $1.00 per share (diluted), for the first half of 2007. Net income on a fully exchanged basis was $64.6 million, or $0.54 per share (diluted) for the second quarter of 2008, compared to $61.5 million, or $0.53 per share (diluted) for the second quarter of 2007.

Core operating business revenue increased 9% to a first-half record of $848.7 million, compared to $776.2 million for the first half of 2007, reflecting continued solid performance in Lazard's core operating businesses of Financial Advisory and Asset Management. Financial Advisory operating revenue, which includes M&A and Strategic Advisory, Restructuring and Corporate Finance, increased 7% to a first-half record of $501.4 million, compared to $467.6 million for the first half of 2007. Asset Management operating revenue increased 13% to a first half record of $347.3 million, compared to $308.6 million in the first half of 2007.

Operating revenue was a first-half record of $835.2 million, compared to $827.7 million for the first half of 2007. Operating income(d) was $105.8 million for the first half of 2008, compared to $167.4 million for the first half of 2007, with the decrease primarily attributable to higher interest expense, facilities costs, business development expenses and continued investment in our businesses, offset by a modest increase in operating revenue.

Core operating business revenue increased 15% to a second-quarter record of $467.8 million, compared to $406.7 million in the second quarter of 2007, reflecting continued solid performance in Lazard's core operating businesses of Financial Advisory and Asset Management. Financial Advisory operating revenue increased 18% to a second-quarter record of $289.0 million, compared to $245.0 million for the second quarter of 2007. Asset Management operating revenue increased 11% to a second-quarter record of $178.8 million, compared to $161.6 million in the second quarter of 2007.

Operating revenue increased 12% to a second-quarter record of $494.0 million for the second quarter of 2008, compared to $439.5 million for the second quarter of 2007. Operating revenue for the second quarter of 2008 includes Corporate revenue of $26.2 million, compared to $32.9 million for the second quarter of 2007. Operating income(d) was $87.7 million for the second quarter of 2008, compared to $89.2 million for the second quarter of 2007, with the decrease primarily attributable to higher interest expense, facilities costs, business development expenses and continued investment in our businesses, offset by the increase in operating revenue.

Lazard believes that results assuming full exchange of outstanding exchangeable interests provide the most meaningful basis for comparison among present, historical and future periods.

"We are pleased with the performance of our business in these turbulent times. Our core operating business of Financial Advisory and Asset Management achieved strong results, despite the ongoing softening of the markets," said Bruce Wasserstein, Chairman and Chief Executive Officer of Lazard.

"Although the outlook for market activity for the remainder of the year remains unclear, we are confident of the vitality of our firm and that our intellectual capital business model should continue to succeed," said Mr. Wasserstein. "We also are focused on the long term. We continue to invest in our business, while providing our clients with strong, experienced teams of top talent, who are sought after by both strategic buyers and sellers, as well as asset management clients in this uncertain environment."

"The volatile environment heightens the need for our experience, diversity and global breadth to meet and overcome the challenges for our clients," said Steven J. Golub, Vice Chairman of Lazard. "We continue to serve as independent, strategic advisors on many precedent-setting, cross-border and exceedingly complex transactions, including serving as lead advisor to InBev in its $52 billion acquisition of Anheuser-Busch, the largest cash M&A transaction in history; Gaz de France's €44.6 billion merger with Suez, forming a world energy leader in gas and electricity; the Haas Family Trusts in the $18.8 billion sale of Rohm and Haas to Dow Chemical, one of the largest chemical transactions; the independent directors of KKR Private Equity Investors in its combination with KKR; The Royal Bank of Scotland Group's $7.0 billion sale of Angel Trains to a consortium of global infrastructure investment funds led by Babcock & Brown; and APP Pharmaceuticals' $5.6 billion sale to Fresenius, strengthening the combined German-American entity's leadership in injectable hospital based markets; as well as restructuring assignments around the world from Tropicana Entertainment in Las Vegas to Centro Properties in Australia."

"Our Asset Management business has continued to do well and is providing a wider range of investment solutions for our clients," said Mr. Golub. "We also are continuing to expand our Asset Management business both by geography and by product."

"Although this year's record first-half and second-quarter revenues are stronger than the same periods in 2007, the second half of the year remains uncertain because the markets remain unpredictable," said Michael J. Castellano, Chief Financial Officer of Lazard. "We expect that Financial Advisory revenue and income will continue to fluctuate from quarter to quarter and that quarterly patterns may differ from year to year. This is why it is always best to measure our results on an annual basis, particularly in this uncertain market."

The Company's quarterly revenue and profits can fluctuate materially depending on the number, size and timing of completed transactions on which it advised, as well as seasonality and other factors. Accordingly, the revenue and profits in any particular quarter may not be indicative of future results. As such, Lazard management believes that annual results are the most meaningful.

Operating Revenue

Core Operating Business

Lazard's core operating business includes our Financial Advisory and Asset Management businesses. Operating revenue for our core operating business increased 9% to a first-half record of $848.7 million for the first half of 2008 and grew 15% to a second-quarter record of $467.8 million for the second quarter of 2008. This included increases of 7% and 18% in first-half and second-quarter 2008 Financial Advisory revenue, and increases of 13% and 11% in Asset Management revenue for the respective 2008 periods.

Financial Advisory

Lazard's Financial Advisory business encompasses general strategic and transaction-specific advice to public and private companies, governments and other parties, and includes Financial Restructuring as well as various corporate finance services. Some of our assignments and, therefore, related revenue are not reflected in publicly available statistical information. Restructuring assignments normally are executed over a six- to eighteen-month period.

Financial Advisory operating revenue increased 7% to a first-half record of $501.4 million for the first half of 2008 and increased 18% to a second-quarter record of $289.0 million for the second quarter of 2008, compared to $467.6 million and $245.0 million for the respective 2007 periods.

M&A and Strategic Advisory

M&A and Strategic Advisory operating revenue increased 9% to $391.1 million for the first half of 2008, compared to $360.4 million for the first half of 2007, and increased 37% to a second-quarter record of $225.1 million for the second quarter of 2008, compared to $164.3 million for the second quarter of 2007.

Among the completed transactions in the second quarter of 2008 on which Lazard advised, were the following:

Trane's $10.1 billion sale to Ingersoll-Rand Resolution plc's £5.0 billion sale to Pearl Group Zinifex's A$6.2 billion merger with Oxiana Louis Dreyfus' €2.1 billion sale of its 29% stake in Neuf Cegetel to SFR Quanex' $1.7 billion merger with Gerdau and spin-off of its building products business to shareholders Bear Stearns' $1.4 billion sale to JPMorgan Chase Cookson's £626 million acquisition of Foseco H&R Block's $1.1 billion sale of Option One mortgage loan servicing business to WL Ross Sodexo's $845 million public tender offer to repurchase shares representing 7.8% of its capital Alfa Corp.'s Special Committee in its $840 million privatization IBM's SEK 5.2 billion acquisition of Telelogic Trico Marine Service's $810 million acquisition of DeepOcean Eiffage S.A. in its defense against an approach by Sacyr Among the pending, announced M&A transactions on which Lazard advised in the second quarter or continued to advise since June 30, 2008, are:

BHP Billiton's $147.4 billion offer for Rio Tinto Gaz de France's €44.6 billion merger with Suez InBev's $52.0 billion acquisition of Anheuser-Busch Haas Family Trusts in Rohm and Haas' $18.8 billion sale to Dow Chemical Independent directors of KKR Private Equity Investors, L.P. in its combination with KKR The Royal Bank of Scotland Group's $7.0 billion sale of Angel Trains to a consortium led by Babcock & Brown International Paper's $6.0 billion acquisition of Weyerhaeuser's packaging business APP Pharmaceuticals' $5.6 billion sale to Fresenius Corn Products' $4.8 billion sale to Bunge ENI's €2.7 billion acquisition of Suez's 57.243% stake in Distrigas Banque Populaire's €2.1 billion acquisition of seven French regional banks from HSBC France Geodis' $2.5 billion sale to SNCF Participations Criteria Caixa's €1.5 billion acquisition of a 20% stake in GFInbursa Meinl Bank's €1.3 billion sale of right to manage Meinl European Land and new investment in Meinl European Land by Gazit Globe and Citi Property Investors TM International's INR72.9 billion acquisition of a 14.99% stake in Idea Cellular, and Idea Cellular's subsequent merger with Spice Communications Century Aluminum's $1.7 billion unwinding of primary aluminum financial forward sales contracts Penn National Gaming on raising $1.25 billion in new capital principally from private equity funds affiliated with Fortress and Centerbridge Partners ING in its $900 million acquisition of CitiStreet Polaris Acquisition Corp.'s $700 million acquisition of Hughes Telematics GrainCorp's A$592 million scrip takeover offer for Ridley Corporation Capgemini's €255 million acquisition of Getronics PinkRoccade Business Application Services Church & Dwight's $380 million acquisition of Del Pharmaceuticals from Coty Financial Restructuring

Financial Restructuring operating revenue was $48.2 million for the first half of 2008, compared to $38.7 million for the first half of 2007, and was $32.7 million for the second quarter of 2008, compared to $29.1 million for the second quarter of 2007.

Notable Restructuring assignments completed in the second quarter of 2008 include advising Plastech Engineered Products in connection with its Chapter 11 bankruptcy and asset sales; Movie Gallery on strategic issues, creditor negotiations and development of a plan of reorganization in connection with its emergence from bankruptcy; IAP Worldwide Services in connection with the out-of-court restructuring of its bank debt; and Weston Presidio with regards to its interest in Tekni-Plex.

We continue our work on a number of other Restructuring assignments both in and out-of-court in the second quarter 2008, including:

Chapter 11 restructuring advisory assignments:

Tropicana Casino & Resorts Technical Olympic USA (TOUSA) Wellman Inc. LandSource Communities Development LLC UAW in connection with Delphi's bankruptcy Other restructuring advisory assignments:

Centro Properties Limited Tarragon Corporation WCI Communities Inc UAW in implementing its VEBA settlements with GM, Ford and Chrysler Vertis Inc. Journal Register Company BLB Management Services Inmobiliaria Colonial Corporate Finance and Other

Corporate Finance and Other operating revenue decreased to $62.1 million for the first half of 2008 compared to $68.6 million for the first half of 2007, and decreased to $31.2 million for the second quarter of 2008, compared to $51.6 million for the second quarter of 2007. These results were due to a decline during the second quarter in the value of fund closings by our Private Fund Advisory Group and public offerings advised by our Equity Capital Markets Group. Our Equity Capital Markets transaction assignments in the second quarter of 2008 included advising Eurotunnel, Equitable Resources and Renesola on their follow-on capital raising transactions. In addition, the equity capital markets group also advised Endo Pharmaceuticals, Energy Conversion Devices and LDK Solar on their recent convertible securities offerings.

Our Alternative Capital Finance Group also has served as placement agent on a number of Private Investment in Public Equity transactions (PIPEs) and Registered Direct Offerings (RDs). Notable assignments during the second quarter included PIPEs for Trico Marine and China Cablecom and RDs for Dendreon Corporation and Pacific Ethanol.

Asset Management

Asset Management operating revenue increased 13% to a first-half record of $347.3 million and 11% to a second-quarter record of $178.8 million for the first half and second quarter of 2008, respectively, compared with $308.6 million and $161.6 million for the corresponding 2007 periods.

Management fees increased 15% to a first-half record of $315.1 million and 10% to a second-quarter record of $157.1 million for the first half and second quarter of 2008, respectively, compared with $272.9 million and $142.2 million for the corresponding 2007 periods. Average assets under management rose 11% for the first half of 2008 to $136.6 billion from $123.5 billion for the first half of 2007. Assets under management at the end of the second quarter of 2008 were $134.1 billion, representing a 5% decrease from the level of assets under management at year-end 2007, as $4.3 billion of net inflows were offset by market depreciation of $12.6 billion over the 2008 six-month period. With net inflows in the second quarter of $2.6 billion, Lazard has now achieved net inflows in nine of the last eleven quarters.

Incentive fees were $8.4 million for the first half and second quarter of 2008, compared with $10.8 million and $5.8 million for the comparable 2007 periods. Incentive fees are recorded on the measurement date, which for most of our funds that are subject to incentive fees falls in the fourth quarter.

Corporate

Corporate operating revenue was a negative $13.4 million in the first half of 2008, compared to income of $51.5 million in the first half of 2007, as the 2008 revenue was adversely impacted by mark-downs and losses reported in the first quarter of 2008. Corporate operating revenue was $26.2 million in the second quarter of 2008, compared to $32.9 million in the second quarter of 2007, as the 2007 revenue included a gain of $9.3 million representing our interest in the net proceeds from the sale by LFCM Holdings of a portion of its interest in Panmure Gordon & Co. plc. The improvement in the second quarter Corporate operating revenue, compared to the first quarter of 2008, was primarily due to reducing the volatility of our portfolio of debt securities to more closely align it with our long-term hold strategy.

Expenses

Compensation and Benefits

The ratio of compensation and benefits expense to operating revenue was 56.7% for the first halves and second quarters of both 2008 and 2007. Compensation and benefits expense increased 1% to $473.6 million and 12% to $280.0 million for the first half and second quarter of 2008, respectively, compared to $469.1 million and $249.0 million for the first half and second quarter of 2007, respectively, consistent with the increase in operating revenue compared to the same periods in 2007.

Non-Compensation

Non-compensation expenses were $196.1 million and $99.6 million for the first half and second quarter of 2008, respectively, compared to $154.0 million and $83.2 million for the comparable 2007 periods. The ratio of non-compensation expenses to operating revenue was 23.0% and 19.7% in the first half and second quarter of 2008, compared to 18.6% and 18.9% in the respective 2007 periods. The ratios for the 2008 periods exclude the effect of amortization of intangibles related to acquisitions completed in the second half of 2007.

Factors contributing to the increases include (i) the impact of new offices, acquisitions made in the second half of 2007 and other investments in our businesses, (ii) increased business development expenses for travel, market related data and AUM growth, and (iii) the continued impact of the weakened U.S. Dollar. In addition, the first halves of 2008 and 2007 expenses include a provision of $4.8 million and $4.0 million, respectively, for costs related to leases on abandoned space. The 2008 provision was recorded in the first quarter and the 2007 provision was recorded in the second quarter.

The percentage of non-compensation expenses to operating revenue can vary from quarter to quarter due to quarterly fluctuation in revenues, among other things. Accordingly, the results in a particular quarter may not be indicative of future results. Lazard management believes that annual results are the most meaningful basis for comparison.

Provision for Income Taxes

The provision for income taxes on a fully exchanged basis was $26.8 million for the first half of 2008, compared to $45.3 million for the first half of 2007, and was $21.5 million for the second quarter of 2008, compared to $23.9 million for the second quarter of 2007. The effective tax rate for the first half and second quarter of 2008 was 25%, compared to 28% for the corresponding 2007 periods, exclusive of LAM general partnership interest-related revenue.

On a U.S. GAAP basis, the provision for income taxes was $23.0 million and $18.1 million for the first half and second quarter of 2008, respectively, compared with a provision for income taxes of $37.4 million and $20.3 million in the corresponding 2007 periods. The effective tax rate was 21.7% and 20.6% for the respective periods in 2008, compared to 22.3% and 22.8% in the corresponding 2007 periods.

Minority Interest

Minority interest, assuming full exchange of minority interests, amounted to a negative $1.6 million in the 2008 first half, compared to a positive $5.6 million in the first half of 2007, and a positive $1.6 in the second quarter of 2008 compared to a positive $3.7 million in the second quarter of 2007. Minority interest was included in net revenues and is attributable to various LAM-related general partnership interests held by our managing directors.

Minority interest expense on a US GAAP basis also includes the minority interest attributable to the exchangeable interests held by LAZ-MD Holdings LLC (LAZ-MD).

Capital and Other Matters

At June 30, 2008, Lazard reported total stockholders' equity of $352.8 million. Equity, on a fully exchanged basis(e), was $526.4 million. During the second quarter of 2008, Lazard repurchased 1.245 million shares of Class A common stock for an aggregate cost of $46.0 million. Lazard's remaining share repurchase authorization at June 30, 2008 was $243.1 million.

On May 15, 2008, Lazard settled the Forward Purchase Contracts underlying the Equity Security Units (ESUs) for $437.5 million in cash and issued 14.6 million shares of Class A common stock. Also on May 15, 2008, Lazard Group settled the remarketing of its $437.5 million in Senior Notes underlying our ESUs by repurchasing the remarketed notes for $438.6 million.

Strategic Business Developments

During the second quarter of 2008, and in the past month, Lazard continued to invest in both its Financial Advisory and Asset Management businesses. The investments support the firm's five-year strategy to create growth opportunities.

In our Financial Advisory business we added new senior advisory talent to our aerospace & defense sectors and the Lazard Middle Market business in the U.S. We also continued to strengthen our cross-border and debt advisory expertise with key hires in Europe. In Asset Management we continued our geographic expansion, entering the Middle East with plans to open a new office in Bahrain. We also opened an office in Hong Kong. In addition, we continued to seed new strategies in our traditional and alternatives businesses. Non-GAAP Information

Lazard discloses certain non-GAAP financial information, which management believes provides the most meaningful basis for comparison among present, historical and future periods. The following are non-GAAP measures used in the accompanying financial information:

Net income assuming full exchange of exchangeable interests (or fully exchanged basis) Operating revenue Minority interest assuming full exchange of exchangeable interests Equity on a fully exchanged basis Additional financial, statistical and business-related information is included in a financial supplement. This earnings release, the financial supplement and selected transaction information will be available today on our website at http://www.lazard.com.

Lazard, one of the world's preeminent financial advisory and asset management firms, operates from 40 cities across 23 countries in North America, Europe, Asia, Australia, Central and South America. With origins dating back to 1848, the firm provides advice on mergers and acquisitions, restructuring and capital raising, as well as asset management services to corporations, partnerships, institutions, governments, and individuals. For more information on Lazard, please visit http://www.lazard.com.

Conference Call

Bruce Wasserstein, Chairman and Chief Executive Officer, Steven Golub, Vice Chairman, and Michael Castellano, Chief Financial Officer, will host a conference call today at 10am EDT to discuss the company's financial results for the first half and second quarter of 2008. The conference call can be accessed via a live audio web cast available through Lazard's Investor Relations website at http://www.lazard.com, or by dialing 1 (877) 718-5099 (U.S. and Canada) or +1 (719) 325-4775 (outside of the U.S. and Canada), 15 minutes prior to the start of the conference call.

A replay of the web cast will be available beginning at 1:00 p.m. EDT on July 30, 2008 through August 6, 2008, via the Lazard website, or by dialing 1 (888) 203-1112 (for the U.S. and Canada) or +1 (719) 457-0820 (outside of the U.S. and Canada); the access code is 6047402.

Cautionary Note Regarding Forward-Looking Statements

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

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

A decline in general economic conditions or the global financial markets; Losses caused by financial or other problems experienced by third parties; Losses due to unidentified or unanticipated risks; A lack of liquidity, i.e., ready access to funds, for use in our businesses; and Competitive pressure. Lazard Ltd is committed to providing timely and accurate information to the investing public, consistent with our legal and regulatory obligations. To that end, Lazard and its operating companies use their websites to convey information about their businesses, including the anticipated release of quarterly financial results, quarterly financial, statistical and business-related information, and the posting of updates of assets under management in various hedge funds and mutual funds and other investment products managed by Lazard Asset Management LLC and its subsidiaries. Monthly updates of these funds will be posted to the Lazard Asset Management website (http://www.lazardnet.com) on the third business day following the end of each month. Investors can link to Lazard and its operating company websites through http://www.lazard.com.

(a) Core operating business revenue includes the results of Financial Advisory and Asset Management businesses, and excludes the results of all investments in Corporate.

(b) Operating revenue excludes interest expense relating to financing activities and revenue/(loss) relating to the consolidation of General Partnerships, each of which are included in net revenue.

(c) Refers to the full conversion of all outstanding exchangeable interests held by the members of LAZ-MD Holdings and is a non-GAAP measure.

(d) Operating income is after interest expense and before income taxes and minority interests.

(e) Refers to the full conversion of all outstanding exchangeable interests held by the members of LAZ-MD Holdings and is a non-GAAP measure

LAZARD LTD OPERATING REVENUE (unaudited)   Three Months Ended June 30,   Six Months Ended June 30,     Increase /     Increase / 2008 2007 (Decrease) 2008 2007 (Decrease) ($ in thousands) Financial Advisory     M&A and Strategic Advisory $225,108 $164,318 $60,790 37 % $391,092 $360,386 $30,706 9 % Financial Restructuring 32,666 29,073 3,593 12 % 48,204 38,693 9,511 25 % Corporate Finance and Other 31,220   51,619   (20,399 ) (40 %) 62,126   68,554   (6,428 ) (9 %) Total 288,994 245,010 43,984 18 % 501,422 467,633 33,789 7 %   Asset Management Management Fees 157,108 142,230 14,878 10 % 315,117 272,869 42,248 15 % Incentive Fees 8,429 5,752 2,677 47 % 8,429 10,758 (2,329 ) (22 %) Other Revenue 13,289   13,666   (377 ) (3 %) 23,713   24,938   (1,225 ) (5 %) Total 178,826   161,648   17,178   11 % 347,259   308,565   38,694   13 %   Core Operating Business Revenue (a) 467,820 406,658 61,162 15 % 848,681 776,198 72,483 9 %   Corporate 26,219   32,868   (6,649 ) (20 %) (13,439 ) 51,525   (64,964 ) NM   Operating Revenue (b) 494,039 439,526 54,513 12 % 835,242 827,723 7,519 1 %   LAM GP Related Revenue/(Loss) 1,643 3,724 (2,081 ) - (1,610 ) 5,555 (7,165 ) - Other Interest Expense (28,294 ) (21,890 ) (6,404 ) - (58,165 ) (42,720 ) (15,445 ) -   Net Revenue $467,388   $421,360   $46,028   11 % $775,467   $790,558   $(15,091 ) (2 %)   (a) Core operating business revenue includes the results of Financial Advisory and Asset Management businesses and excludes the results of all investments in Corporate.   (b) Operating revenue excludes interest expense relating to financing activities and revenue/(loss) relating to the consolidation of LAM General Partnerships, each of which are included in net revenue.   NM - Not meaningful LAZARD LTD UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME           Three Months Ended Six Months Ended Ended June 30, Ended June 30, 2008 2007 % Change 2008 2007 % Change ($ in thousands, except per share data)   Total revenue (a) $504,002 $447,178 13 % $854,106 $845,790 1 % LFB interest expense (9,963 ) (7,652 ) (18,864 ) (18,067 ) Operating revenue 494,039 439,526 12 % 835,242 827,723 1 % LAM GP related revenue/(loss) 1,643 3,724 (1,610 ) 5,555 Other interest expense (28,294 ) (21,890 ) (58,165 ) (42,720 ) Net revenue 467,388 421,360 11 % 775,467 790,558 (2 %) Operating expenses: Compensation and benefits 280,021 249,046 12 % 473,582 469,084 1 %   Occupancy and equipment 22,277 24,285 51,771 43,974 Marketing and business development 25,220 16,964 45,684 33,366 Technology and information services 17,089 14,161 33,330 26,767 Professional services 16,237 13,711 29,504 22,529 Fund administration and outsourced services 6,573 4,459 13,143 8,968 Amortization of intangible assets (b) 2,525 - 3,745 - Other 9,708   9,571   18,948   18,439   Total non-compensation expense 99,629   83,151   20 % 196,125   154,043   27 % Operating expenses 379,650   332,197   14 % 669,707   623,127   7 %   Operating income 87,738 89,163 (2 %) 105,760 167,431 (37 %)   Provision for income taxes 18,110   20,313   (11 %) 22,950   37,374   (39 %) Income before minority interest in net income 69,628 68,850 1 % 82,810 130,057 (36 %) Minority interest in net income (excluding LAZ-MD) 1,644 3,725 (1,609 ) 5,558 Minority interest in net income (LAZ-MD only) 33,667   35,829   42,303   68,849   Net income $34,317   $29,296   17 % $42,116   $55,650   (24 %)   Net income assuming full exchange of exchangeable interests (c) $64,570   $61,515   5 % $80,526   $116,548   (31 %)   Weighted average shares outstanding (d): Basic 56,416,850 51,439,125 10 % 53,198,522 51,439,097 3 % Diluted 126,711,796 62,737,737 NM 113,713,062 90,477,035 26 % Net income per share: Basic $0.61 $0.57 7 % $0.80 $1.08 (26 %) Diluted $0.54 $0.52 4 % $0.70 $0.98 (29 %)                         Supplemental Information:   Weighted average shares outstanding, assuming full exchange of exchangeable interests (d): Basic 110,463,868 107,512,179 3 % 107,883,427 107,524,848 0 % Diluted 126,711,796 118,810,791 7 % 118,554,347 118,513,562 0 % Net income per share - assuming full exchange of exchangeable interests: Basic $0.58 $0.57 2 % $0.75 $1.08 (31 %) Diluted $0.54 $0.53 2 % $0.71 $1.00 (29 %)   Ratio of compensation to operating revenue 56.7 % 56.7 % 56.7 % 56.7 % Ratio of non-compensation to operating revenue 20.2 % 18.9 % 23.5 % 18.6 % Ratio of non-compensation to operating revenue as adjusted (e) 19.7 % 18.9 % 23.0 % 18.6 %                           (a) Excluding LAM General Partnership related revenue   (b) For the three and six month periods ended June 30, 2008, includes amortization of intangible assets resulting from the acquisition of Goldsmith Agio Helms & Lynner, LLC ("GAHL") and Carnegie, Wylie & Company ("CWC").   (c) Represents a reversal of the minority interests related to LAZ-MD Holdings' ownership of Lazard Group common membership interests net of an adjustment for Lazard Ltd entity-level taxes to effect a full exchange of interests as of January 1, 2007 (see "Reconciliation of US GAAP to Full Exchange Results").   (d) See "Reconciliation of Shares Outstanding and Basic & Diluted Net Income Per Share".   (e) For the three and six month periods ended June 30, 2008, excludes the amortization of intangible assets.   NM - Not meaningful LAZARD LTD SELECTED QUARTERLY OPERATING RESULTS (unaudited) Three Months Ended                 June 30, Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31, Sept. 30, June 30, 2008 2008 2007 2007 2007 2007 2006 2006 2006 ($ in thousands, except per share data) Financial Advisory M&A and Strategic Advisory $225,108 $165,984 $313,622 $295,401 $164,318 $196,068 $247,483 $153,215 $197,856 Financial Restructuring 32,666 15,538 32,321 56,161 29,073 9,620 20,423 15,562 21,047 Corporate Finance and Other 31,220 30,906   47,190   28,255 51,619 16,935 34,260 18,291 43,149 Total 288,994 212,428 393,133 379,817 245,010 222,623 302,166 187,068 262,052   Asset Management Management Fees 157,108 158,009 165,432 157,424 142,230 130,639 121,589 112,726 112,203 Incentive Fees 8,429 - 48,959 7,315 5,752 5,006 42,009 3,423 7,456 Other Revenue 13,289 10,424   16,782   12,798 13,666 11,272 10,961 8,720 10,159 Total 178,826 168,433   231,173   177,537 161,648 146,917 174,559 124,869 129,818   Core operating business revenue (a) 467,820 380,861 624,306 557,354 406,658 369,540 476,725 311,937 391,870   Corporate 26,219 (39,658 ) (6,710 ) 12,164 32,868 18,657 14,774 5,668 18,970   Operating revenue (b) $494,039 $341,203   $617,596   $569,518 $439,526 $388,197 $491,499 $317,605 $410,840   Operating income (c) $87,738 $18,022   $132,278   $118,586 $89,163 $78,268 $115,207 $49,193 $84,693   Net income $34,317 $7,799   $59,125   $40,267 $29,296 $26,354 $36,596 $13,158 $23,545   Net income per share Basic $0.61 $0.16 $1.17 $0.79 $0.57 $0.51 $0.88 $0.35 $0.63 Diluted $0.54 $0.14 $1.04 $0.73 $0.52 $0.47 $0.78 $0.34 $0.59                                     Supplemental Information:   Net income assuming full exchange of exchangeable interests $64,570 $15,956   $122,577   $83,565 $61,515 $55,033 $85,817 $34,983 $62,939   Net income per share - assuming full exchange of exchangeable interests Basic $0.58 $0.15 $1.16 $0.78 $0.57 $0.51 $0.84 $0.35 $0.63 Diluted $0.54 $0.14 $1.04 $0.73 $0.53 $0.47 $0.78 $0.34 $0.60 Assets Under Management ($ millions) $134,139 $134,193 $141,413 $142,084 $135,350 $124,852 $110,437 $99,334 $93,901   (a) Core operating business revenue includes the results of Financial Advisory and Asset Management businesses and excludes the results of all investments in Corporate.   (b) Operating revenue excludes interest expense relating to financing activities and revenue/(loss) relating to the consolidation of LAM General Partnerships, each of which are included in net revenue.   (c) Operating income is after interest expense and before income taxes and minority interests. LAZARD LTD UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL CONDITION ($ in thousands)     June 30,   December 31, 2008 2007 ASSETS

Cash and cash equivalents $758,664 $1,055,844 Cash segregated for regulatory purposes or deposited with clearing organizations 16,993 24,585 Receivables 1,310,856 1,097,178 Investments* Debt 432,973 585,433 Equity 204,688 333,796 Other 260,874   169,612   898,535 1,088,841   Goodwill and other intangible assets 201,972 187,909 Other assets 445,291   386,056     Total assets $3,632,311   $3,840,413     LIABILITIES & STOCKHOLDERS' EQUITY

Liabilities Deposits and other customer payables $1,095,801 $858,733 Accrued compensation and benefits 109,649 498,058 Other liabilities 553,405 623,008 Senior notes: Underlying equity security units - 437,500 Others 1,150,000 1,150,000 Subordinated loans 150,000   150,000   Total liabilities 3,058,855 3,717,299   Commitments and contingencies Minority interest ** 220,627 52,775   Stockholders' equity Preferred stock, par value $.01 per share: Series A - - Series B - - Common stock, par value $.01 per share: Class A 687 517 Class B - - Additional paid-in capital 251,748 (161,924 ) Accumulated other comprehensive income, net of tax 41,047 52,491 Retained earnings 277,111   248,551   570,593 139,635 Less: Class A common stock held by a subsidiary, at cost (217,764 ) (69,296 ) Total stockholders' equity 352,829   70,339     Total liabilities, minority interest and stockholders' equity $3,632,311   $3,840,413     * Principally at fair value, with the exception of $76,054 and $755 of investments accounted for under the equity method at June 30, 2008 and December 31, 2007, respectively.   ** Includes $173,541 and $nil attributable to exchangeable interests held by members of LAZ-MD Holdings at June 30, 2008 and December 31, 2007, respectively. LAZARD LTD RECONCILIATION OF SHARES OUTSTANDING AND BASIC & DILUTED NET INCOME PER SHARE         BEFORE FULL EXCHANGE

  Three Months Ended June 30, Six Months Ended June 30, 2008 2007 2008 2007 ($ in thousands, except per share data) Basic Numerator: Net income $34,317 $29,296 $42,116 $55,650 Add (deduct) - net income associated with Class A common shares issuable on a non-contingent basis (a) 308 - 397 - Basic net income $34,625 $29,296 $42,513 $55,650 Denominator: Weighted average shares outstanding (a) 56,416,850 51,439,125 53,198,522 51,439,097   Basic net income per share

$0.61 $0.57 $0.80 $1.08   Diluted Numerator: Basic net income $34,625 $29,296 $42,513 $55,650 Add (deduct) - dilutive effect of adjustments to income for: Interest expense on convertible debt, net of tax (b) 1,785 469 - 930 Minority interest in net income resulting from assumed share issuances (see incremental issuable shares in the denominator calculation below) and Ltd level income tax effect

  31,554 3,061 37,527 32,156 Diluted net income $67,964 $32,826 $80,040 $88,736 Denominator: Weighted average shares outstanding 56,416,850 51,439,125 53,198,522 51,439,097 Add - dilutive effect of incremental issuable shares: Restricted stock units 5,005,928 2,600,936 4,240,368 2,310,190 Equity security units (c) 7,051,000 6,066,106 - 6,046,954 Convertible notes (c) 2,631,570 2,631,570 - 2,631,570 Series A and Series B convertible preferred stock (d) 1,559,430 - 1,589,267 - Exchangeable interests (e) 54,047,018 - 54,684,905 28,049,224 Diluted weighted average shares outstanding 126,711,796 62,737,737 113,713,062 90,477,035   Diluted net income per share

$0.54 $0.52 $0.70 $0.98   (a) For the three and six month periods ended June 30, 2008, includes 1,185,282 weighted average shares, related to the Class A common stock that are issuable on a non-contingent basis with respect to the acquisition of GAHL.   (b) For the three month period ended June 30, 2008, includes interest expense, net of tax related to the equity security units and convertible notes. For the three and six month periods ended June 30, 2007, includes interest expense, net of tax, related to the convertible notes.   (c) For the six month period ended June 30, 2008, the shares assumed issued from equity security units and convertible notes were not dilutive.   (d) For the three and six month periods ended June 30, 2008, includes 12,155 shares of Series A convertible preferred stock and 277 shares of Series B convertible preferred stock that will be convertible into Class A common stock on a non-contingent basis with respect to the acquisition of CWC. The rate of conversion into Class A common stock will be dependant, in part, on the future value of the Class A common stock and currency exchange rates, therefore, the shares are excluded from the basic net income per share calculation but included in the diluted net income per share calculation.   (e) For the three month period ended June 30, 2007, the LAZ-MD exchangeable interests were antidilutive. LAZARD LTD RECONCILIATION OF SHARES OUTSTANDING AND BASIC & DILUTED NET INCOME PER SHARE         ASSUMING FULL EXCHANGE OF EXCHANGEABLE INTERESTS AS OF JANUARY 1, 2007

  Three Months Ended June 30, Six Months Ended June 30, 2008 2007 2008 2007 ($ in thousands, except per share data) Basic Numerator: Net income $64,570   $61,515   $80,526   $116,548   Denominator: Weighted average shares outstanding (a) 110,463,868   107,512,179   107,883,427   107,524,848     Basic net income per share

$0.58   $0.57   $0.75   $1.08     Diluted Numerator: Net income $64,570 $61,515 $80,526 $116,548 Add dilutive effect of adjustments to income for: Interest expense on convertible debt, net of tax (b) 3,396   887   3,396   1,764   Diluted net income $67,966   $62,402   $83,922   $118,312     Denominator: Weighted average shares outstanding 110,463,868 107,512,179 107,883,427 107,524,848 Add - dilutive effect of incremental issuable shares: Restricted stock units 5,005,928 2,600,936 4,240,368 2,310,190 Equity security units 7,051,000 6,066,106 3,525,500 6,046,954 Convertible notes 2,631,570 2,631,570 1,315,785 2,631,570 Series A and Series B convertible preferred stock (c) 1,559,430   -   1,589,267   -   Diluted weighted average shares outstanding 126,711,796   118,810,791   118,554,347   118,513,562     Diluted net income per share $0.54   $0.53   $0.71   $1.00     (a) For the three and six month periods ended June 30, 2008, includes 1,185,282 weighted average shares, related to the Class A common stock that are issuable on a non-contingent basis with respect to the acquisition of GAHL.   (b) For the three and six month periods ended June 30, 2008, includes interest expense, net of tax related to the equity security units and convertible notes. For the three and six month periods ended June 30, 2007, includes interest expense, net of tax, related to the convertible notes.   (c) For the three and six month periods ended June 30, 2008, includes 12,155 shares of Series A convertible preferred stock and 277 shares of Series B convertible preferred stock that will be convertible into Class A common stock on a non-contingent basis with respect to the acquisition of CWC. The rate of conversion into Class A common stock will be dependant, in part, on the future value of the Class A common stock and currency exchange rates, therefore, the shares are excluded from the basic net income per share calculation but included in the diluted net income per share calculation.   RECONCILIATION OF US GAAP TO FULL EXCHANGE RESULTS

  Three Months Ended June 30, Six Months Ended June 30, 2008 2007 2008 2007 ($ in thousands) Net income - US GAAP $34,317 $29,296 $42,116 $55,650 Provision for income taxes (d) (3,414 ) (3,610 ) (3,893 ) (7,951 ) Minority interest in net income (LAZ-MD only) (e) 33,667   35,829   42,303   68,849   Net income assuming full exchange of exchangeable interests $64,570   $61,515   $80,526   $116,548     (d) Represents an adjustment to the Lazard Ltd tax provision to effect a full exchange of LAZ-MD Holdings' ownership of Lazard Group common membership interests at an effective rate on operating income less LAM GP related revenue of 25.0% for the three and six month periods ended June 30, 2008 and 28.0% for the three and six month periods ended June 30, 2007 respectively.   (e) Represents a reversal of the minority interests related to LAZ-MD Holdings' ownership of Lazard Group common membership interests to effect a full exchange of interests as of January 1, 2007. LAZARD LTD ASSETS UNDER MANAGEMENT ("AUM")         As of Variance June 30, March 31, December 31, 2008 2008 2007 Qtr to Qtr YTD ($ in millions) Equities $109,250 $110,018 $119,276 (0.7 %) (8.4 %) Fixed Income 14,630 15,398 14,233 (5.0 %) 2.8 % Alternative Investments 4,420 3,941 3,577 12.2 % 23.6 % Private Equity 1,661 1,547 1,401 7.4 % 18.6 % Cash 4,178   3,289 2,926 27.0 % 42.8 % Total AUM $134,139   $134,193 $141,413 (0.0 %) (5.1 %)   Three Months Ended June 30, Six Months Ended June 30, 2008 2007 2008 2007 ($ in millions) ($ in millions) AUM - Beginning of Period $134,193 $124,852 $141,413 $110,437   Net Flows 2,550 2,627 4,265 14,191

Market Appreciation / (Depreciation) (2,567 ) 7,680 (12,572 ) 10,388 Foreign Currency Adjustments (37 ) 191 1,033   334     AUM - End of Period $134,139   $135,350 $134,139   $135,350     Average AUM * $134,166   $130,101 $136,582   $123,547     % Change in average AUM 3.1 % 10.6 %   * Average AUM is based on an average of quarterly ending balances for the respective periods. LAZARD LTD SCHEDULE OF INCOME TAX PROVISION       Three Months Six Months Ended Ended June 30, Ended June 30,   2008 2007 2008 2007 Lazard Ltd Consolidated Effective Tax Rate

($ in thousands)   Operating Income Lazard Group Allocable to LAZ-MD Holdings (weighted average ownership of 46.8% and 47.6% for the three and six month periods ended June 30, 2008 and 52.1% for the three and six month periods ended June 30, 2007, respectively)   $41,217 $46,691 $50,413 $87,477   Allocable to Lazard Ltd (weighted average ownership of 53.2% and 52.4% for the three and six month periods ended June 30, 2008 and 47.9% for the three and six month periods end June 30, 2007, respectively)   46,933   42,939   55,534   80,421   Total Lazard Group operating income 88,150 89,630 105,947 167,898 Lazard Ltd and its wholly owned subsidiaries (412 ) (467 ) (187 ) (467 ) Total Lazard Ltd consolidated operating income $87,738   $89,163   $105,760   $167,431     Provision for income taxes Lazard Group (effective tax rates of 15.9% and 17.4% for the three and six month periods ended June 30, 2008 and 19.1% and 18.0% for the three and six month periods ended June 30, 2007, respectively)     Allocable to LAZ-MD Holdings $6,669 $8,920 $8,910 $15,732 Allocable to Lazard Ltd 7,386   8,205   9,482   14,464   Total Lazard Group provision for income taxes 14,055 17,125 18,392 30,196 Tax adjustment for Lazard Ltd entity-level (a) 4,055   3,188   4,558   7,178   Lazard Ltd consolidated provision for income taxes $18,110   $20,313   $22,950   $37,374     Lazard Ltd consolidated effective tax rate 20.6 % 22.8 % 21.7 % 22.3 %   Lazard Ltd Fully Exchanged Tax Rate

  Operating Income Lazard Ltd consolidated operating income 87,738 89,163 105,760 167,431 Adjustments for LAM GP related loss/(revenue) (1,643 ) (3,724 ) 1,610   (5,555 ) Operating income excluding LAM GP related revenue $86,095   $85,439   $107,370   $161,876     Provision for income taxes Lazard Ltd consolidated provision for income taxes $18,110 $20,313 $22,950 $37,374 Tax adjustment for full exchange (b) 3,414   3,610   3,893   7,951   Total fully exchanged provision for income taxes $21,524   $23,923   $26,843   $45,325     Lazard Ltd fully exchanged tax rate 25.0 % 28.0 % 25.0 % 28.0 %   (a) Represents an adjustment to the Lazard Ltd tax provision for the three and six month periods ended June 30, 2008 from $7,386 to $11,441 and $9,482 to $14,040 and for the three and six month periods ended June 30, 2007 from $8,205 to $11,393 and from $14,464 to $21,642 to reflect an effective rate on operating income less LAM GP related revenue of 25.0% for the three month period ended June 30, 2008 and 28.0% for the three month period June 30, 2007 respectively.   (b) Represents an adjustment to the Lazard Ltd tax provision to effect a full exchange of LAZ-MD Holdings' ownership of Lazard Group common membership interests at an effective rate on operating income less LAM GP related revenue of 25.0% for the three month and six month periods ended June 30, 2008 and 28.0% for the three and six month periods ended June 30, 2007 respectively. LAZ-G

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Judi Frost Mackey
Lazard Ltd
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