Lazard, Inc.

Previous wording

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 “2025,” “2024,” “third quarter,” “first nine months” or “the period” refer to, as the context requires, the three month and nine month periods ended September 30, 2025 and 2024.

Current wording

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, 2025 (the “Form 10-K”). All references to “2026,” “2025,” “first quarter” or “the period” refer to, as the context requires, the three month periods ended March 31, 2026 and 2025.

Previous wording

•changes in international trade policies and practices, including the implementation of tariffs, proposed further tariffs, and responses from other jurisdictions, the recent U.S. federal government shutdown, and the economic impacts, volatility and uncertainty resulting therefrom;

Current wording

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

Previous wording

•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”);

Current wording

•a decline in our revenues, for example due to a decline in overall M&A activity, our share of the M&A market or our assets under management (“AUM”);

Previous wording

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

Current wording

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

Previous wording

•future acquisitions or other strategic transactions, including the consideration to be paid and the timing of consummation;

Current wording

•future acquisitions or other strategic transactions, the proposed acquisition of Campbell Lutyens Holdings Limited (“Campbell Lutyens”) (including the consideration to be paid, the expected timing of consummation and the anticipated benefits to the transaction);

Previous wording

•changes in international trade policies and practices, including the implementation of tariffs, proposed further tariffs, and responses from other jurisdictions, the recent U.S. federal government shutdown, and the economic impacts, volatility and uncertainty resulting therefrom;

Current wording

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

Previous wording

Founded in 1848, Lazard is a global financial advisory and asset management firm, 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.

Current wording

Founded in 1848, Lazard is a global financial advisory and asset management firm, 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. We aim to deliver independent, differentiated advice and solutions grounded in contextual alpha—the broad insight and judgment needed to navigate macroeconomic, geopolitical, and other factors that we believe help leaders see beyond what the world sees today.

Previous wording

•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; and

Current wording

•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, strategic capital solutions, shareholder advisory, sovereign advisory, geopolitical advisory, restructuring and liability management, capital raising and placement, and other strategic matters; and

Previous wording

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.

Current wording

We also invest our own capital from time to time to seed our Asset Management strategies. In addition, we record selected other activities in our Corporate segment, including cash management, certain investments, deferred tax assets, outstanding indebtedness and certain contingent obligations.

Previous wording

Economic and global financial market conditions can materially affect our financial performance. As described above, our principal sources of revenue are derived from activities in our Financial Advisory and Asset Management business segments. 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 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.

Current wording

Economic and global financial market conditions can materially affect our financial performance. As described above, our principal sources of revenue are derived from activities in our Financial Advisory and Asset Management business segments. 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 or uncertain global economic and financial market conditions can create a challenging environment for M&A and capital-raising activity and may also pressure our Asset Management business. However, these conditions may generate increased opportunities for our restructuring business. Additionally, heightened equity market volatility can create compelling investment opportunities for Asset Management.

Previous wording

We operate in a competitive, global environment. Ongoing developments in international trade policies and practices, in addition to changing domestic governmental priorities, have increased uncertainty relative to prior years. We believe our broad set of capabilities and diversified business model position us well to meet evolving client needs in varying economic environments. Unpredictability and the potential for related impacts, however, could create or exacerbate market volatility, contribute to weakened economic and business conditions, and reduce our clients’ ability to finalize decision-making or execute on investment priorities.

Current wording

We operate in a competitive, global environment. Ongoing geopolitical uncertainty, developments in international trade policies and practices, along with shifting domestic governmental priorities, have increased uncertainty relative to prior years. We believe our broad set of capabilities, diversified business model, and the competitive advantage provided by Lazard’s contextual alpha—our ability to incorporate geopolitical, regulatory, and macroeconomic insight into our advice—position us well to meet evolving client needs across varying economic environments. Unpredictability and the potential for related impacts, however, could create or exacerbate market volatility, contribute to weakened economic and business conditions, and reduce our clients’ ability to finalize decision-making or execute on investment priorities.

Previous wording

Another measure of global restructuring activity is the number of corporate defaults, which decreased during the first nine months of 2025 as compared to the first nine months of 2024. The number of defaulting issuers was 91 in the first nine months of 2025, according to Moody’s Investors Service, Inc., as compared to 108 in the first nine months of 2024.

Current wording

Another measure of global restructuring activity is the number of corporate defaults, which decreased during the first quarter of 2026 as compared to the first quarter of 2025. The number of defaulting issuers was 27 in the first quarter of 2026, according to Moody’s Investors Service, Inc., as compared to 30 in the first quarter of 2025.

Previous wording

Lazard’s Asset Management segment principally includes LAM, LFG, Lazard Frères Banque SA (“LFB”) and the Edgewater Funds (“Edgewater”). Asset Management net revenue is derived from fees for investment management and advisory services provided to clients. As noted above, the main driver of Asset Management net revenue is the level and product mix of AUM, which is generally influenced by the performance of the global equity markets and, to a lesser extent, fixed income markets as well as Lazard’s investment performance, which impacts its ability to successfully attract and retain assets. As a result, fluctuations (including timing thereof) in financial markets and client asset inflows and outflows for any reason have a direct effect on Asset Management net revenue and operating income. Asset Management fees are generally based on the level of AUM measured daily, monthly or quarterly, and an increase or reduction in AUM, due to market price fluctuations, currency fluctuations, changes in product mix, or net client asset flows will result in a corresponding increase or decrease in management fees. Our investment advisory contracts are generally terminable at any time or on notice of 30 days or less. 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. Dollars, changes in the value of the U.S. Dollar relative to foreign currencies will impact the value of Lazard’s AUM and the overall amount of management fees generated by the AUM. Fees vary with the type of assets managed and the vehicle in which they are managed, with higher fees earned on equity assets and alternative investment funds, such as hedge funds and private equity funds, and lower fees earned on fixed income and cash management products.

Current wording

Lazard’s Asset Management segment principally includes LAM, LFG, Lazard Frères Banque SA (“LFB”) and the Edgewater Funds (“Edgewater”). On February 13, 2026, the Company completed the sale of a controlling stake in the Edgewater management vehicles, resulting in the deconsolidation of the related entities. Asset Management net revenue is derived from fees for investment management and advisory services provided to clients. As noted above, the main driver of Asset Management net revenue is the level and product mix of AUM, which is generally influenced by the performance of the global equity markets and, to a lesser extent, fixed income markets as well as Lazard’s investment performance, which impacts its ability to successfully attract and retain assets. As a result, fluctuations (including timing thereof) in financial markets and client asset inflows and outflows for any reason have a direct effect on Asset Management net revenue and operating income. Asset Management fees are generally based on the level of AUM measured daily, monthly or quarterly, and an increase or reduction in AUM, due to market price fluctuations, currency fluctuations, changes in product mix, or net client asset flows will result in a corresponding increase or decrease in management fees. Our investment advisory contracts are generally terminable at any time or on notice of 30 days or less. 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. Dollars, changes in the value of the U.S. Dollar relative to foreign currencies will impact the value of Lazard’s AUM and the overall amount of management fees generated by the AUM. Fees vary with the type of assets managed and the vehicle in which they are managed, with higher fees earned on equity assets and alternative investment funds, such as hedge funds and private equity funds, and lower fees earned on fixed income and cash management products.

Previous wording

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.

Current wording

Corporate segment net revenue consists primarily of interest and dividend income and interest expense, as well as gains and losses on investments held in connection with Lazard Fund Interests (“LFI”). In addition, in 2025, Corporate net revenue included investment gains and losses on the Company’s investments to seed strategies in our Asset Management business, net of hedging activities, which beginning in the first quarter of 2026 is reported in the Asset Management segment (comparable prior year information has not been recast because the impact was not material). 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 rates and the levels of cash, investments and indebtedness, among other factors.

Previous wording

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

Current wording

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, and other expenses. 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.

Previous wording

See “Critical Accounting Policies and Estimates—Income Taxes” below and Notes 16 and 18 of Notes to Condensed Consolidated Financial Statements for additional information regarding income taxes, our deferred tax assets and the tax receivable agreement obligation.

Current wording

See “Critical Accounting Policies and Estimates—Income Taxes” below and Notes 15 and 17 of Notes to Condensed Consolidated Financial Statements for additional information regarding income taxes, our deferred tax assets and the tax receivable agreement obligation.

Previous wording

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.

Current wording

Noncontrolling interests primarily consist of (i) consolidated VIE interests held by employees, and (ii) up to February 13, 2026, amounts related to Edgewater’s management vehicles that the Company was deemed to control but not own. See Notes 12 and 20 of Notes to Condensed Consolidated Financial Statements for information regarding the Company’s noncontrolling interests and consolidated VIEs and Note 1 of Notes to Condensed Consolidated Financial Statements for information regarding the sale and deconsolidation of Edgewater.

Previous wording

Lazard’s condensed consolidated financial statements are presented in U.S. Dollars. Many of our non-U.S. subsidiaries have a functional currency (i.e., the currency in which operational activities are primarily conducted) that is other than the U.S. Dollar, generally the currency of the country in which the subsidiaries are domiciled. 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. Adjustments that result from translating amounts from a subsidiary’s functional currency are reported as a component of stockholders’ equity. Foreign currency remeasurement gains and losses on transactions in non-functional currencies are included in the condensed consolidated statements of operations.

Current wording

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. Adjustments that result from translating amounts from a subsidiary’s functional currency are reported as a component of stockholders’ equity. Foreign currency remeasurement gains and losses on transactions in non-functional currencies are included in the condensed consolidated statements of operations.

Previous wording

(c)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 excluded for purposes of determining adjusted non-compensation expense.

Current wording

(c)Represents certain distribution, introducer and management fees paid to third parties, reimbursable deal costs and (provision) benefit for credit losses relating to fees and other receivables that are deemed uncollectible, for which an equal amount is excluded for purposes of determining adjusted non-compensation expense.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

(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.

Current wording

(b)Represents certain distribution, introducer and management fees paid to third parties, reimbursable deal costs and (provision) benefit 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.

Previous wording

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

Current wording

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

Previous wording

The Company reported net income attributable to Lazard of $71 million, as compared to net income attributable to Lazard of $108 million in the 2024 period.

Current wording

The Company reported net income attributable to Lazard of $101 million, as compared to net income attributable to Lazard of $60 million in the 2025 period.

Previous wording

Net revenue decreased $37 million, or 5%, with adjusted net revenue increasing $79 million, or 12%, as compared to the 2024 period. Fee revenue from investment banking and other advisory activities increased $60 million, or 16%, as compared to the 2024 period. Asset management fees, including incentive fees, increased $29 million, or 11%, as compared to the 2024 period. In the aggregate, interest income, other revenue and interest expense decreased $126 million as compared to the 2024 period primarily due to a gain on sale of an owned office building of $114 million in the 2024 period.

Current wording

Net revenue increased $109 million, or 17%, with adjusted net revenue increasing $30 million, or 5%, as compared to the 2025 period. Investment banking and other advisory fees decreased $3 million, or 1%, as compared to the 2025 period. Asset management fees, including incentive fees, increased $63 million, or 24%, as compared to the 2025 period. In the aggregate, interest income, other revenue and interest expense increased $49 million as compared to the 2025 period, primarily due to a non-cash gain of $78 million on the sale and deconsolidation of the Edgewater management vehicles in the 2026 period.

Previous wording

Adjusted compensation and benefits expense (which excludes certain items and which we believe allows for improved comparability between periods, as described above) was $475 million, an increase of $48 million, or 11%, as compared to $426 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.

Current wording

Adjusted compensation and benefits expense (which excludes certain items and which we believe allows for improved comparability between periods, as described above) was $471 million, an increase of $49 million, or 12%, as compared to $421 million in the 2025 period. The ratio of adjusted compensation and benefits expense to adjusted net revenue was 69.9% for the 2026 period, as compared to 65.5% for the 2025 period.

Previous wording

Non-compensation expense increased $35 million, or 7%, as compared to the 2024 period. Adjusted non-compensation expense increased $33 million, or 8%, as compared to the 2024 period. Such increases in non-compensation expense and adjusted non-compensation expense were primarily due to increased marketing and business development and technology and information services expenses. The ratio of adjusted non-compensation expense to adjusted net revenue was 21.2% for the 2025 period, as compared to 20.3% for the 2024 period.

Current wording

Non-compensation expense increased $12 million, or 7%, as compared to the 2025 period. Adjusted non-compensation expense increased $1 million, or 1%, as compared to the 2025 period. Such increases in non-compensation expense and adjusted non-compensation expense were primarily due to increased fund administration and outsourced services expenses. The ratio of adjusted non-compensation expense to adjusted net revenue was 22.1% for the 2026 period, as compared to 23.0% for the 2025 period.

Previous wording

The provision for income taxes reflects an effective tax rate of 18.9%, as compared to 25.4% 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.

Current wording

The benefit for income taxes reflects an effective tax rate of (12.3)%, as compared to (13.5)% for the 2025 period. The change in the effective tax rate principally relates to the impact of discrete tax benefits for share-based incentive compensation awards and changes in the geographic mix of earnings.

Previous wording

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.

Current wording

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 and therefore may not be reflective of the geography in which the clients are located.

Previous wording

Financial Advisory net revenue increased $56 million, or 15%, as compared to the 2024 period. Financial Advisory adjusted net revenue increased $53 million, or 14%, as compared to the 2024 period. The increases in Financial Advisory net revenue and adjusted net revenue are primarily attributable to an increase in the average fee for completed transactions as compared to the prior year.

Current wording

Financial Advisory net revenue decreased $8 million, or 2%, as compared to the 2025 period. Financial Advisory adjusted net revenue decreased $13 million, or 4%, as compared to the 2025 period. The decreases in Financial Advisory net revenue and adjusted net revenue were primarily attributable to the completion of fewer transactions as compared to the 2025 period.

Previous wording

Net revenue decreased $43 million, or 2%, with adjusted net revenue increasing $61 million, or 3%, as compared to the 2024 period. Fee revenue from investment banking and other advisory activities increased $51 million, or 4%, as compared to the 2024 period. Asset management fees, including incentive fees, increased $25 million, or 3%, as compared to the 2024 period. In the aggregate, interest income, other revenue and interest expense decreased $119 million, as compared to the 2024 period primarily due to a gain on sale of an owned office building of $114 million in the 2024 period.

Current wording

Adjusted non-compensation expense decreased $1 million, or 3%, as compared to the 2025 period.

Previous wording

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

Current wording

The following table shows the composition of AUM for the Asset Management segment (see Item 1, “Business—Principal Business Lines—Asset Management—Investment Strategies” in our Form 10-K):

Previous wording

Total AUM at September 30, 2025 was $265 billion, an increase of $39 billion, or 17%, as compared to total AUM of $226 billion at December 31, 2024 due to market and foreign exchange appreciation and net inflows. Average AUM for the third quarter of 2025 increased 5% as compared to the three month period ended September 30, 2024 and average AUM for the first nine months of 2025 decreased 2% as compared to the nine month period ended September 30, 2024.

Current wording

Total AUM at March 31, 2026 was $259 billion, an increase of $5 billion, or 2%, as compared to total AUM of $254 billion at December 31, 2025 primarily due to net inflows, partially offset by foreign exchange depreciation and the sale and deconsolidation of the Edgewater management vehicles. Average AUM for the first quarter of 2026 increased 15% as compared to the first quarter of 2025, and increased 2% as compared to the fourth quarter of 2025.

Previous wording

As of September 30, 2025, approximately 84% 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, compared to approximately 82% as of

Current wording

As of both March 31, 2026 and December 31, 2025, approximately 46% of our AUM was managed on behalf of institutional clients, including corporations, labor unions, pension funds, insurance companies, Endowments and Foundations (E&F)/Healthcare and also includes certain Family Office clients. As of March 31, 2026, approximately 45% of our AUM was managed on behalf of financial intermediary clients, including banks, mutual fund sponsors, sub-advisory relationships, broker-dealers, wealth platforms, registered investment advisors (RIAs), and other investors in pooled vehicles as compared to approximately 44% as of December 31, 2025. As of March 31, 2026, approximately 9% of our AUM was managed on behalf of individual client relationships, compared to approximately 10% as of December 31, 2025.

Previous wording

As of both September 30, 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. Dollar and increases in value as the U.S. Dollar weakens, with all other factors held constant.

Current wording

As of both March 31, 2026 and December 31, 2025, AUM with foreign currency exposure represented approximately 67% of our total AUM. AUM with foreign currency exposure generally declines in value with the strengthening of the U.S. Dollar and increases in value as the U.S. Dollar weakens, with all other factors held constant.

Previous wording

The following is a summary of changes in AUM by asset class for the three month and nine month periods ended September 30, 2025 and 2024:

Current wording

The following is a summary of changes in AUM by asset class for the three month periods ended March 31, 2026 and 2025:

Previous wording

For the three months ended September 30, 2025, net flows were primarily driven by the Global and Emerging Markets platforms.

Current wording

Net flows were primarily driven by the Global/International and Emerging Markets Equity platforms.

Previous wording

Average AUM for the three month and nine month periods ended September 30, 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.

Current wording

Average AUM for the three month periods ended March 31, 2026 and 2025 for each significant asset class is set forth below. Average AUM generally represents the average of the monthly ending AUM balances for the period.

Previous wording

Asset Management net revenue increased $33 million, or 11%, as compared to the 2024 period. Asset Management adjusted net revenue increased $23 million, or 8%, as compared to the 2024 period. Management fees and other revenue, on an adjusted basis, was $285 million, an increase of $17 million, or 6%, as compared to $269 million in the 2024 period. Incentive fees, on an adjusted basis, were $9 million, an increase of $6 million as compared to $3 million in the 2024 period.

Current wording

Asset Management net revenue, which included a non-cash gain of $78 million on the sale and deconsolidation of the Edgewater management vehicles in the first quarter of 2026, increased $122 million, or 42%, as compared to the 2025 period. Asset Management adjusted net revenue increased $44 million, or 17%, as compared to the 2025 period. Management fees, on an adjusted basis, were $296 million, an increase of $58 million, or 25%, as compared to $238 million in the 2025 period. Incentive fees, on an adjusted basis, were $11 million, an increase of $2 million as compared to

Previous wording

Adjusted non-compensation expense increased $18 million, or 11%, as compared to the 2024 period primarily due to continued investments in technology and increased marketing and business development expenses.

Current wording

Adjusted compensation and benefits expense increased $18 million, or 12%, as compared to the 2025 period primarily driven by increased adjusted net revenue.