2011 Annual Report The Lazard model is simple and powerful. Our model is built on Financial In Asset Management, we are Advisory and Asset Management— a world-class firm with strong what we consider the two most performance and growth. We are attractive businesses in financial leaders in emerging markets and services. global equities. We provide clients with global and local investment We compete on equal footing with solutions that we export and import firms many times our size, without around the world. the inherent risks and conflicts that come with the use of capital. We aim to drive shareholder returns through quality revenue growth, In Financial Advisory, we are investing smartly in hiring and long-standing leaders in M&A and expansion, focusing on realizing strategic advice. We offer clients operating leverage, and returning extraordinary depth and experience cash to shareholders. in our understanding of capital structure and capital markets. We are leaders in restructuring and in advising governments around the world. And our Capital Structure Advisory business is a powerful complement to our strategic advice. Financial Highlights ($mm, except per share data) 2011 2010 2009 Net Revenue $1,830 $1,905 $1,531 Operating Revenue1,3 1,884 1,979 1,618 Adjusted Net Income2,3 179 281 11 Adjusted Net Income Per Share—Diluted2,3 $1.31 $2.06 $0.09 OPERATING REVENUE1,3 ($mm) 2011 NET REVENUE BY BUSINESS4 2,500 Financial Asset Advisory Management $2,015 $1,979 2,000 $1,884 $1,675 $1,618 53% 47% 1,500 2011 NET REVENUE BY GEOGRAPHY 1,000 59% 33% United Europe States 500 8% Rest of World 0 2007 2008 2009 2010 2011 STOCK PERFORMANCE5 Lazard Ltd S&P Financial Index S&P 500 Index $200 150 100 50 0 30 Dec 2005 29 Dec 2006 31 Dec 2007 31 Dec 2008 31 Dec 2009 31 Dec 2010 30 Dec 2011 1 Excludes revenues related to non-controlling interests, interest expense 3 A non-U.S. GAAP measure. Lazard believes that presenting our results on an related to financing activities and for 2011, a gain on the repurchase of the adjusted basis, in addition to the U.S. GAAP results, is the most meaningful and Company’s subordinated debt and gains/losses related to changes in the fair useful way to compare results across periods. Non-U.S. GAAP measures are not value of investments held in connection with Lazard Fund Interests for which a meant to be considered in isolation or as a substitute for comparable U.S. GAAP corresponding equal amount is excluded from compensation and benefits expense. measures, and should be read only in conjunction with our financial statements 2 Adjusted to reflect the full conversion of outstanding exchangeable interests prepared in accordance with U.S. GAAP. A reconciliation of the U.S. GAAP results held by members of LAZ-MD Holdings. For 2011, excludes a charge related to to the adjusted results is presented on Schedule A in this Annual Report. the writeoff of a partial prepayment of the Company’s option to acquire the fund 4 Excludes Corporate, which includes investment income from long-term management activities of Lazard Alternative Investment Holdings, a provision investments, net interest income generated by Lazard Frères Banque SA, interest related to the Company’s leased facility in the U.K., and a gain on the repurchase income related to cash and interest expense related to outstanding borrowings. of the Company’s subordinated debt. For 2010, excludes the restructuring 5 The Stock Performance graph compares the performance of an investment in charge and accelerated amortization of share-based incentive awards relating our Class A common stock from December 30, 2005, through December 30, 2011, to a change in retirement policy. For 2009, excludes the restructuring charge, with the S&P 500 Index and the S&P Financial Index. The graph assumes $100 accelerated vesting of previously awarded cash incentive awards and accelerated was invested at the close of business on December 30, 2005 in each of our Class amortization of share-based incentive awards previously granted to our former A common stock, the S&P 500 and the S&P Financial Index. It also assumes Chairman and Chief Executive Officer. that dividends were reinvested on the date of payment without payment of any commissions. The performance shown in the graph represents past performance and should not be considered an indication of future performance. 2011 Financial Information and Form 10-K This page intentionally left blank. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) È ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2011 OR ‘ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to 001-32492 (Commission File Number) LAZARD LTD (Exact name of registrant as specified in its charter) Bermuda 98-0437848 (State or Other Jurisdiction of Incorporation (I.R.S. Employer Identification No.) or Organization) Clarendon House 2 Church Street Hamilton HM11, Bermuda (Address of principal executive offices) Registrant’s telephone number: (441) 295-1422 Securities Registered Pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registered Class A Common Stock, par value $0.01 per share New York Stock Exchange Securities Registered Pursuant to Section 12(g) of the Act: None Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes È No ‘ Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ‘ No È Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes È No ‘ Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes È No ‘ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ‘ Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer È Accelerated filer ‘ Non-accelerated filer ‘ Smaller reporting company ‘ Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ‘ No È The aggregate market value of the common stock held by non-affiliates of the Registrant as of June 30, 2011 was approximately $4,282,293,322. As of January 31, 2012, there were 123,009,311 shares of the Registrant’s Class A common stock (including 3,492,017 shares held by subsidiaries) and one share of the registrant’s Class B common stock outstanding. DOCUMENTS INCORPORATED BY REFERENCE Portions of the Registrant’s proxy statement for its 2012 annual general meeting of shareholders are incorporated by reference in this Form 10-K in response to Part III Items 10, 11, 12, 13 and 14. This page intentionally left blank. LAZARD LTD ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2011 INDEX Page Form 10-K Item Number No. PART I Item 1. Business ................................................................. 1 Executive Officers of the Registrant ........................................... 14 Item 1A. Risk Factors .............................................................. 15 Item 1B. Unresolved Staff Comments .................................................. 32 Item 2. Properties ................................................................ 32 Item 3. Legal Proceedings .......................................................... 33 Item 4. Mine Safety Disclosures ..................................................... 33 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities ................................................ 34 Item 6. Selected Financial Data ..................................................... 35 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations ................................................................ 37 Item 7A. Quantitative and Qualitative Disclosures About Market Risk ........................ 70 Item 8. Financial Statements and Supplementary Data ................................... 71 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure ................................................................ 135 Item 9A. Controls and Procedures ..................................................... 135 Item 9B. Other Information .........................................................