Financial Statements (Unaudited)
−Removed: Condensed Consolidated Statements of Financial Condition as of June 30, 2023 and December 31, 2022
−Removed: Condensed Consolidated Statements of Operations for the three month and six month periods ended June 30, 2023 and 2022
−Removed: Condensed Consolidated Statements of Comprehensive Income for the three month and six month periods ended June 30, 2023 and 2022
−Removed: Condensed Consolidated Statements of Cash Flows for the six month periods ended June 30, 2023 and 2022
−Removed: Condensed Consolidated Statements of Changes in Stockholders’ Equity and Redeemable Noncontrolling Interests for the three month and six month periods ended June 30, 2023 and 2022
+Added: Condensed Consolidated Statements of Financial Condition as of September 30, 2023 and December 31, 2022
+Added: Condensed Consolidated Statements of Operations for the three month and nine month periods ended September 30, 2023 and 2022
+Added: Condensed Consolidated Statements of Comprehensive Income for the three month and nine month periods ended September 30, 2023 and 2022
+Added: Condensed Consolidated Statements of Cash Flows for the nine month periods ended September 30, 2023 and 2022
+Added: Condensed Consolidated Statements of Changes in Stockholders’ Equity and Redeemable Noncontrolling Interests for the three month and nine month periods ended September 30, 2023 and 2022
Notes to Condensed Consolidated Financial Statements
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
−Removed: JUNE 30, 2023 AND DECEMBER 31, 2022
+Added: SEPTEMBER 30, 2023 AND DECEMBER 31, 2022
(dollars in thousands, except for per share data)
+Added: September 30,
2023 December 31,
3 unchanged sentences
Receivables (net of allowance for credit losses of $ 21,081 and $ 17,738
−Removed: at June 30, 2023 and December 31, 2022, respectively):
+Added: at September 30, 2023 and December 31, 2022, respectively):
Fees 505,976 491,861
2 unchanged sentences
Investments 657,880 698,977
−Removed: Property (net of accumulated amortization and depreciation of $ 403,947 and $ 395,109 at June 30, 2023 and December 31, 2022, respectively)
+Added: Property (net of accumulated amortization and depreciation of $ 405,811 and $ 395,109 at September 30, 2023 and December 31, 2022, respectively)
229,626 250,073
1 unchanged sentence
Goodwill and other intangible assets (net of accumulated amortization
−Removed: of $ 70,200 and $ 70,118 at June 30, 2023 and December 31, 2022, respectively)
+Added: of $ 70,184 and $ 70,118 at September 30, 2023 and December 31, 2022, respectively)
394,094 377,330
4 unchanged sentences
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
−Removed: JUNE 30, 2023 AND DECEMBER 31, 2022
+Added: SEPTEMBER 30, 2023 AND DECEMBER 31, 2022
(dollars in thousands, except for per share data)
+Added: September 30,
2023 December 31,
17 unchanged sentences
Class A, par value $ 0.01 per share ( 500,000,000 shares authorized;
−Removed: 112,766,091 shares issued at June 30, 2023 and December 31, 2022, including shares held by subsidiaries as indicated below)
+Added: 112,766,091 shares issued at September 30, 2023 and December 31, 2022, including shares held by subsidiaries as indicated below)
Additional paid-in-capital 202,617 167,890
2 unchanged sentences
1,299,194 1,549,877
−Removed: Class A common stock held by subsidiaries, at cost ( 25,896,701 and 26,814,213 shares at June 30, 2023 and December 31, 2022, respectively)
+Added: Class A common stock held by subsidiaries, at cost ( 25,356,940 and 26,814,213
+Added: shares at September 30, 2023 and December 31, 2022, respectively)
( 937,876 ) ( 993,414 )
6 unchanged sentences
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
−Removed: FOR THE THREE MONTH AND SIX MONTH PERIODS ENDED JUNE 30, 2023 AND 2022
+Added: FOR THE THREE MONTH AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2023 AND 2022
(dollars in thousands, except for per share data)
Three Months Ended
−Removed: June 30, Six Months Ended
+Added: September 30, Nine Months Ended
+Added: September 30,
2023 2022 2023 2022
31 unchanged sentences
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
−Removed: FOR THE THREE MONTH AND SIX MONTH PERIODS ENDED JUNE 30, 2023 AND 2022
+Added: FOR THE THREE MONTH AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2023 AND 2022
(dollars in thousands)
Three Months Ended
−Removed: June 30, Six Months Ended
+Added: September 30, Nine Months Ended
+Added: September 30,
2023 2022 2023 2022
5 unchanged sentences
Employee benefit plans:
−Removed: Actuarial gain (loss) (net of tax expense (benefit) of
+Added: Actuarial gain (loss) (net of tax expense of
$ 1,195 and $ 1,832 for the three months ended
−Removed: June 30, 2023 and 2022, respectively, and $( 1,074 ) and $ 2,604 for the six months ended June 30, 2023 and 2022, respectively)
+Added: September 30, 2023 and 2022, respectively, and $ 121 and $ 4,436 for the nine months ended September 30, 2023 and 2022, respectively)
5,054 8,786 ( 332 ) 20,512
1 unchanged sentence
tax expense of $ 374 and $ 233 for the three months
−Removed: ended June 30, 2023 and 2022, respectively, and $ 761 and $ 515 for the six months ended June 30, 2023 and 2022, respectively)
+Added: ended September 30, 2023 and 2022, respectively, and $ 1,135 and $ 748 for the nine months ended September 30, 2023 and 2022, respectively)
1,580 1,162 3,916 2,816
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX ( 11,172 ) ( 44,353 ) 2,795 ( 110,536 )
−Removed: 1,069 ( 52,403 ) 13,967 ( 66,183 )
COMPREHENSIVE INCOME (LOSS) ( 4,398 ) 78,439 ( 126,006 ) 224,882
3 unchanged sentences
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
−Removed: FOR THE SIX MONTH PERIODS ENDED JUNE 30, 2023 AND 2022
+Added: FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2023 AND 2022
(dollars in thousands)
−Removed: Six Months Ended
+Added: Nine Months Ended
+Added: September 30,
CASH FLOWS FROM OPERATING ACTIVITIES:
21 unchanged sentences
Acquisition of business, net of cash acquired ( 10,516 ) -
+Added: Other investing activities - ( 7,500 )
Net cash used in investing activities ( 29,669 ) ( 32,214 )
17 unchanged sentences
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH— January 1 2,639,400 3,430,014
−Removed: CASH AND CASH EQUIVALENTS AND RESTRICTED CASH—June 30 $ 1,179,901 $ 3,225,490
+Added: CASH AND CASH EQUIVALENTS AND RESTRICTED CASH—September 30 $ 1,006,775 $ 2,962,715
See notes to condensed consolidated financial statements.
−Removed: RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH WITHIN THE CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION:
+Added: RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH WITHIN
+Added: THE CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION:
+Added: September 30,
2023 December 31,
5 unchanged sentences
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY AND REDEEMABLE NONCONTROLLING INTERESTS
−Removed: FOR THE THREE MONTH PERIOD ENDED JUNE 30, 2023
+Added: FOR THE THREE MONTH PERIOD ENDED SEPTEMBER 30, 2023
(dollars in thousands)
13 unchanged sentences
Shares $ Shares $
−Removed: Balance - April 1, 2023 112,766,091 $ 1,128 $ 94,312 $ 1,604,650 $ ( 282,957 ) 26,100,898 $ ( 965,707 ) $ 451,426 $ 56,983 $ 508,409 $ 89,472
+Added: Balance - July 1, 2023 112,766,091 $ 1,128 $ 167,622 $ 1,431,181 $ ( 281,886 ) 25,896,701 $ ( 958,067 ) $ 359,978 $ 55,907 $ 415,885 $ 83,583
Comprehensive income (loss):
8 unchanged sentences
( 28,196 ) ( 624,796 ) 23,145 ( 5,051 ) - ( 5,051 )
−Removed: Distributions to noncontrolling interests, net - ( 1,889 ) ( 1,889 )
+Added: Contributions from noncontrolling interests,
LFI Consolidated Funds - - - 1,449
−Removed: Other ( 581 ) 5,240 ( 149 ) ( 730 ) - ( 730 )
−Removed: Balance - June 30, 2023 112,766,091 $ 1,128 $ 167,622 $ 1,431,181 $ ( 281,886 ) 25,896,701 $ ( 958,067 ) $ 359,978 $ 55,907 $ 415,885 $ 83,583
+Added: Balance - September 30, 2023 112,766,091 $ 1,128 $ 202,617 $ 1,388,508 $ ( 293,059 ) 25,356,940 $ ( 937,876 ) $ 361,318 $ 58,243 $ 419,561 $ 81,781
See notes to condensed consolidated financial statements.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY AND REDEEMABLE NONCONTROLLING INTERESTS
−Removed: FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2023
+Added: FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 2023
(dollars in thousands)
16 unchanged sentences
Net income (loss) ( 139,046 ) ( 139,046 ) 4,696 ( 134,350 ) 5,549
−Removed: Other comprehensive income (loss) - net of tax 13,968 13,968 ( 1 ) 13,967
+Added: Other comprehensive income - net of tax 2,795 2,795 - 2,795
Amortization of share-based incentive compensation 204,641 204,641 4,989 209,630
20 unchanged sentences
Other ( 581 ) 5,240 ( 149 ) ( 730 ) ( 17 ) ( 747 )
−Removed: Balance - June 30, 2023 112,766,091 $ 1,128 $ 167,622 $ 1,431,181 $ ( 281,886 ) 25,896,701 $ ( 958,067 ) $ 359,978 $ 55,907 $ 415,885 $ 83,583
+Added: Balance - September 30, 2023 112,766,091 $ 1,128 $ 202,617 $ 1,388,508 $ ( 293,059 ) 25,356,940 $ ( 937,876 ) $ 361,318 $ 58,243 $ 419,561 $ 81,781
See notes to condensed consolidated financial statements.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY AND REDEEMABLE NONCONTROLLING INTERESTS
−Removed: FOR THE THREE MONTH PERIOD ENDED JUNE 30, 2022
+Added: FOR THE THREE MONTH PERIOD ENDED SEPTEMBER 30, 2022
(dollars in thousands)
13 unchanged sentences
Shares $ Shares $
−Removed: Balance - April 1, 2022 112,766,091 $ 1,128 $ - $ 1,583,005 $ ( 237,626 ) 12,371,148 $ ( 496,681 ) $ 849,826 $ 119,802 $ 969,628 $ 575,000
+Added: Balance - July 1, 2022 112,766,091 $ 1,128 $ 71,918 $ 1,628,182 $ ( 290,029 ) 18,240,059 $ ( 695,537 ) $ 715,662 $ 111,295 $ 826,957 $ 575,710
Comprehensive income (loss):
−Removed: Net income (loss) 95,480 95,480 ( 6,675 ) 88,805 2,846
+Added: Net income 105,797 105,797 13,253 119,050 3,742
Other comprehensive loss - net of tax ( 44,353 ) ( 44,353 ) - ( 44,353 )
11 unchanged sentences
Change in redemption value of redeemable noncontrolling interests 670 670 287 957 ( 957 )
−Removed: Balance - June 30, 2022 112,766,091 $ 1,128 $ 71,918 $ 1,628,182 $ ( 290,029 ) 18,240,059 $ ( 695,537 ) $ 715,662 $ 111,295 $ 826,957 $ 575,710
+Added: Other ( 1,538 ) 7,661 ( 240 ) ( 1,778 ) ( 241 ) ( 2,019 )
+Added: Balance - September 30, 2022 112,766,091 $ 1,128 $ 126,746 $ 1,682,398 $ ( 334,382 ) 24,434,236 $ ( 915,254 ) $ 560,636 $ 116,688 $ 677,324 $ 578,495
See notes to condensed consolidated financial statements.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY AND REDEEMABLE NONCONTROLLING INTERESTS
−Removed: FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2022
+Added: FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 2022
(dollars in thousands)
15 unchanged sentences
Comprehensive income (loss):
−Removed: Net income (loss) 209,356 209,356 ( 2,236 ) 207,120 5,506
+Added: Net income 315,153 315,153 11,017 326,170 9,248
Other comprehensive loss - net of tax ( 110,535 ) ( 110,535 ) ( 1 ) ( 110,536 )
9 unchanged sentences
Change in redemption value of redeemable noncontrolling interests 4,027 4,027 1,726 5,753 ( 5,753 )
−Removed: Balance - June 30, 2022 112,766,091 $ 1,128 $ 71,918 $ 1,628,182 $ ( 290,029 ) 18,240,059 $ ( 695,537 ) $ 715,662 $ 111,295 $ 826,957 $ 575,710
+Added: Other ( 1,538 ) 7,661 ( 240 ) ( 1,778 ) ( 241 ) ( 2,019 )
+Added: Balance - September 30, 2022 112,766,091 $ 1,128 $ 126,746 $ 1,682,398 $ ( 334,382 ) 24,434,236 $ ( 915,254 ) $ 560,636 $ 116,688 $ 677,324 $ 578,495
See notes to condensed consolidated financial statements.
4 unchanged sentences
We serve a diverse set of clients around the world, including corporations, governments, institutions, partnerships and individuals.
−Removed: Lazard Ltd indirectly held 100 % of all outstanding Lazard Group common membership interests as of June 30, 2023 and December 31, 2022.
+Added: Lazard Ltd indirectly held 100 % of all outstanding Lazard Group common membership interests as of September 30, 2023 and December 31, 2022.
Lazard Ltd, through its control of the managing members of Lazard Group, controls Lazard Group, which as of December 31, 2022 was governed by an Amended and Restated Operating Agreement dated as of February 4, 2019.
1 unchanged sentence
Lazard Ltd’s primary operating asset is its indirect ownership of the common membership interests of, and managing member interests in, Lazard Group, whose principal operating activities are included in two business segments:
−Removed: • Financial Advisory, which offers corporate, partnership, institutional, government, sovereign and individual clients across the globe a wide array of financial advisory services regarding strategic and mergers and acquisitions (“M&A”) advisory, capital markets advisory, shareholder advisory, restructuring and capital solutions, sovereign advisory, geopolitical advisory, and other strategic advisory matters and capital raising and placement, and
+Added: • Financial Advisory, which offers corporate, partnership, institutional, government, sovereign and individual clients across the globe a wide array of financial advisory services regarding strategic and mergers and acquisitions (“M&A”) advisory, capital markets advisory, shareholder advisory, restructuring and liability management, sovereign advisory, geopolitical advisory, and other strategic advisory matters and capital raising and placement, and
• Asset Management, which offers a broad range of global investment solutions and investment and wealth management services in equity and fixed income strategies, asset allocation strategies, alternative investments and private equity funds to corporations, public funds, sovereign entities, endowments and foundations, labor funds, financial intermediaries and private clients.
13 unchanged sentences
Although these estimates are based on management’s knowledge of current events and actions that Lazard may undertake in the future, actual results may differ materially from the estimates.
−Removed: The consolidated results of operations for the three month and six month periods ended June 30, 2023 are not indicative of the results to be expected for any future interim or annual period.
+Added: The consolidated results of operations for the three month and nine month periods ended September 30, 2023 are not indicative of the results to be expected for any future interim or annual period.
The condensed consolidated financial statements include Lazard Ltd and its subsidiaries including Lazard Group and Lazard Group’s principal operating subsidiaries:
28 unchanged sentences
On February 23, 2023, LGAC redeemed all of its outstanding publicly held Class A ordinary shares as a result of LGAC not consummating a Business Combination within the time period required by its amended and restated memorandum and articles of association resulting in the distribution of $ 585,891 of the cash held in the trust account to the LGAC shareholders.
−Removed: The Company recognized $ 17,929 of losses on the liquidation of LGAC in “revenue-other” on the condensed consolidated statement of operations for the six month period ended June 30, 2023.
+Added: The Company recognized $ 17,929 of losses on the liquidation of LGAC in “revenue-other” on the condensed consolidated statement of operations for the nine month period ended September 30, 2023.
In addition, the $ 20,125 of non-cash deferred underwriting fees noted above was no longer probable of being incurred and therefore was reversed from other liabilities to additional paid-in-capital.
3 unchanged sentences
Three Months Ended
−Removed: June 30, Six Months Ended
+Added: September 30, Nine Months Ended
+Added: September 30,
2023 2022 2023 2022
5 unchanged sentences
___________________________________
−Removed: (a) Financial Advisory is comprised of a wide array of financial advisory services regarding M&A advisory, capital markets advisory, shareholder advisory, restructuring and capital solutions, sovereign advisory, geopolitical advisory, and other strategic advisory and capital raising and placement work for clients.
+Added: (a) Financial Advisory is comprised of a wide array of financial advisory services regarding M&A advisory, capital markets advisory, shareholder advisory, restructuring and liability management, sovereign advisory, geopolitical advisory, and other strategic advisory and capital raising and placement work for clients.
The benefits of these advisory services are generally transferred to the Company’s clients over time, and consideration for these advisory services typically includes transaction completion, transaction announcement and retainer fees.
23 unchanged sentences
Where applicable, receivables are stated net of an estimated allowance for credit losses determined in accordance with the current expected credit losses (“CECL”) model, for general credit risk of the overall portfolio and for specific accounts deemed uncollectible, which may include situations where a fee is in dispute.
−Removed: Of the Company’s fee receivables at June 30, 2023 and December 31, 2022, $ 103,434 and $ 97,964 , respectively, represented financing receivables for our Private Capital Advisory fees.
−Removed: At June 30, 2023 and December 31, 2022, customers and other receivables included $ 111,592 and $ 128,890 , respectively, of customer loans, which are fully collateralized and monitored for counterparty creditworthiness, with such collateral having a fair value in excess of the carrying amount of the loans as of both June 30, 2023 and December 31, 2022.
−Removed: The aggregate carrying amount of other fees and customers and other receivables was $ 459,532 and $ 425,904 at June 30, 2023 and December 31, 2022, respectively.
−Removed: Activity in the allowance for credit losses for the three month and six month periods ended June 30, 2023 and 2022 was as follows:
+Added: Of the Company’s fee receivables at September 30, 2023 and December 31, 2022, $ 115,379 and $ 97,964 , respectively, represented financing receivables for our Private Capital Advisory fees.
+Added: At September 30, 2023 and December 31, 2022, customers and other receivables included $ 89,753 and $ 128,890 , respectively, of customer loans, which are fully collateralized and monitored for counterparty creditworthiness, with such collateral having a fair value in excess of the carrying amount of the loans as of both September 30, 2023 and December 31, 2022.
+Added: The aggregate carrying amount of other fees and customers and other receivables was $ 427,001 and $ 425,904 at September 30, 2023 and December 31, 2022, respectively.
+Added: Activity in the allowance for credit losses for the three month and nine month periods ended September 30, 2023 and 2022 was as follows:
Three Months Ended
−Removed: June 30, Six Months Ended
+Added: September 30, Nine Months Ended
+Added: September 30,
2023 2022 2023 2022
Beginning Balance $ 27,095 $ 30,271 $ 17,738 $ 33,957
−Removed: Bad debt expense (credit), net of reversals 3,194 ( 1,061 ) 11,019 ( 542 )
+Added: Bad debt expense, net of reversals 2,268 566 13,287 24
Charge-offs, foreign currency translation and other adjustments ( 8,282 ) ( 15,517 ) ( 9,944 ) ( 18,661 )
4 unchanged sentences
The allowance for credit losses is substantially all related to M&A and Restructuring fee receivables and other receivables.
−Removed: The Company’s investments and securities sold, not yet purchased, consist of the following at June 30, 2023 and December 31, 2022:
+Added: The Company’s investments consist of the following at September 30, 2023 and December 31, 2022:
+Added: September 30,
2023 December 31,
9 unchanged sentences
Total investments $ 657,880 $ 698,977
−Removed: Securities sold, not yet purchased, at fair value
−Removed: (included in “other liabilities”)
___________________________________
−Removed: ___________________________________
−Removed: (a) Interests in alternative investment funds, debt funds and equity funds include investments, including those held by LFI Consolidated Funds (see Note 20), with fair values of $ 27,181 , $ 167,889 and $ 288,098 , respectively, at June 30, 2023 and $ 24,137 , $ 142,632 and $ 266,528 , respectively, at December 31, 2022, held in order to satisfy the Company’s obligation upon vesting of previously granted Lazard Fund Interests (“LFI”) and other similar deferred compensation arrangements.
+Added: (a) Interests in alternative investment funds, debt funds and equity funds include investments, including those held by LFI Consolidated Funds (see Note 20), with fair values of $ 27,145 , $ 168,624 and $ 262,223 , respectively, at September 30, 2023 and $ 24,137 , $ 142,632 and $ 266,528 , respectively, at December 31, 2022, held in order to satisfy the Company’s obligation upon vesting of previously granted Lazard Fund Interests (“LFI”) and other similar deferred compensation arrangements.
LFI represent grants by the Company to eligible employees of interests in a number of Lazard-managed funds, subject to service-based vesting conditions (see Notes 6 and 12).
1 unchanged sentence
Treasury securities with original maturities at time of purchase of greater than three months and less than one year .
−Removed: Equities primarily consist of seed investments invested in marketable equity securities of large-, mid- and small-cap domestic, international and global companies held within separately managed accounts related to our Asset Management business.
+Added: Equities primarily consist of investments in marketable equity securities of large-, mid- and small-cap domestic, international and global companies held within separately managed accounts to seed strategies and funds in our Asset Management business.
Alternative investment funds primarily consist of interests in various Lazard-managed hedge funds, funds of funds and mutual funds.
−Removed: Such amounts primarily consist of seed investments in funds related to our Asset Management business and amounts related to LFI discussed above.
−Removed: Debt funds primarily consist of seed investments in funds related to our Asset Management business that invest in debt securities, amounts related to LFI discussed above and an investment in a Lazard-managed debt fund.
−Removed: Equity funds primarily consist of seed investments in funds related to our Asset Management business that invest in equity securities, and amounts related to LFI discussed above.
+Added: Such amounts primarily consist of investments in funds to seed strategies and funds in our Asset Management business and amounts related to LFI discussed above.
+Added: Debt funds primarily consist of investments in funds to seed strategies and funds in our Asset Management business that invest in debt securities, amounts related to LFI discussed above and an investment in a Lazard-managed debt fund.
+Added: Equity funds primarily consist of investments in funds to seed strategies and funds in our Asset Management business that invest in equity securities, and amounts related to LFI discussed above.
Private equity investments include those owned by Lazard and those consolidated but not owned by Lazard.
4 unchanged sentences
(dollars in thousands, except for per share data, unless otherwise noted)
−Removed: investments in established private companies and (iii) a seed investment in a fund related to our Asset Management business that invests in sustainable private infrastructure opportunities.
+Added: investments in established private companies and (iii) a seed investment in a fund that invests in sustainable private infrastructure opportunities.
Private equity investments consolidated but not owned by Lazard relate to the economic interests that are owned by the management team and other investors in the Edgewater Funds (“Edgewater”).
Equity method investments represent certain partnership interests accounted for under the equity method of accounting.
−Removed: During the three month and six month periods ended June 30, 2023 and 2022, the Company reported in “revenue-other” on its condensed consolidated statements of operations net unrealized investment gains and losses pertaining to equity securities and trading debt securities still held as of the reporting date as follows:
+Added: During the three month and nine month periods ended September 30, 2023 and 2022, the Company reported in “revenue-other” on its condensed consolidated statements of operations net unrealized investment gains and losses pertaining to equity securities and trading debt securities still held as of the reporting date as follows:
Three Months Ended
−Removed: June 30, Six Months Ended
+Added: September 30, Nine Months Ended
+Added: September 30,
2023 2022 2023 2022
7 unchanged sentences
Items included in Level 3 include securities or other financial assets whose trading volume and level of activity have significantly decreased when compared with normal market activity and there is no longer sufficient frequency or volume to provide pricing information on an ongoing basis.
−Removed: The fair value of debt is classified as Level 1 when the fair values are based on unadjusted quoted prices in active markets.
+Added: The fair value of debt is classified as Level 1 when the fair values are based on unadjusted quoted prices in active markets, or Level 2 when based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.
The fair value of equities is classified as Level 1 or Level 3 as follows:
1 unchanged sentence
equity interests in private companies are generally classified as Level 3.
−Removed: The fair value of investments in alternative investment funds, debt funds and equity funds is classified as Level 1 when the fair values are based on the publicly reported closing price for the fund.
+Added: The fair value of investments in alternative investment funds, debt funds and equity funds is classified as Level 1 when the fair values are based on the publicly reported closing price for the fund, or Level 2 when based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.
The fair value of investments in certain private equity funds is classified as Level 3 for (i) certain investments that are valued based on the potential transaction value and (ii) when the acquisition price is considered the best measure of fair value.
16 unchanged sentences
The Company’s investments valued at NAV as a practical expedient in (i) alternative investment funds, debt funds and equity funds are redeemable in the near term, and (ii) private equity funds are not redeemable in the near term as a result of redemption restrictions.
−Removed: The following tables present, as of June 30, 2023 and December 31, 2022, the classification of (i) investments and certain other assets and liabilities measured at fair value on a recurring basis within the fair value hierarchy and (ii) investments measured at NAV or its equivalent as a practical expedient:
−Removed: June 30, 2023
+Added: The following tables present, as of September 30, 2023 and December 31, 2022, the classification of (i) investments and certain other assets and liabilities measured at fair value on a recurring basis within the fair value hierarchy and (ii) investments measured at NAV or its equivalent as a practical expedient:
+Added: September 30, 2023
Level 1 Level 2 Level 3 NAV Total
25 unchanged sentences
Total $ 4,766 $ 327,045 $ - $ - $ 331,811
−Removed: The following tables provide a summary of changes in fair value of the Company’s Level 3 assets and liabilities for the three month and six month periods ended June 30, 2023 and 2022:
−Removed: Three Months Ended June 30, 2023
+Added: The following tables provide a summary of changes in fair value of the Company’s Level 3 assets and liabilities for the three month and nine month periods ended September 30, 2023 and 2022:
+Added: Three Months Ended September 30, 2023
Net Unrealized/
1 unchanged sentence
Issuances Sales/
−Removed: Transfers (b) Foreign
+Added: Settlements Foreign
Adjustments Ending
6 unchanged sentences
(dollars in thousands, except for per share data, unless otherwise noted)
−Removed: Six Months Ended June 30, 2023
+Added: Nine Months Ended September 30, 2023
Balance Net Unrealized/
8 unchanged sentences
Total Level 3 liabilities $ - $ 194 $ 7,754 $ ( 1,445 ) $ - $ 6,503
−Removed: Three Months Ended June 30, 2022
+Added: Three Months Ended September 30, 2022
Balance Net Unrealized/
6 unchanged sentences
Total Level 3 assets $ 798 $ 28 $ - $ - $ ( 57 ) $ 769
−Removed: Six Months Ended June 30, 2022
+Added: Nine Months Ended September 30, 2022
Balance Net Unrealized/
7 unchanged sentences
__________________________________
−Removed: (a) Earnings recorded in “other revenue” for investments in Level 3 assets for the three month and six month periods ended June 30, 2023 and 2022 include net unrealized gains of $ 13 , $ 14 , $ 0 and $ 7 , respectively.
−Removed: Unrealized losses of $ 80 and $ 113 were recorded in “amortization and other acquisition-related costs” for the contingent consideration liability for the three month and six month periods ended June 30, 2023.
−Removed: (b) Transfers out of Level 3 private equity funds in the three month period ended June 30, 2023 reflect investments valued at NAV as of June 30, 2023.
+Added: (a) Earnings recorded in “other revenue” for investments in Level 3 assets for the three month and nine month periods ended September 30, 2023 and 2022 include net unrealized gains (losses) of $( 76 ), $( 62 ), $ 28 and $ 35 , respectively.
+Added: Unrealized losses of $ 81 and $ 194 were recorded in “amortization and other acquisition-related costs” for the contingent consideration liability for the three month and nine month periods ended September 30, 2023.
+Added: (b) Transfers out of Level 3 private equity funds in the nine month period ended September 30, 2023 reflect investments valued at NAV as of September 30, 2023.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(dollars in thousands, except for per share data, unless otherwise noted)
−Removed: (c) For the six month period ended June 30, 2023, acquisitions represent the initial recognition of the contingent consideration liability (noncash transaction), and settlements represent aggregate cash and noncash settlement of contingent consideration after the acquisition date.
−Removed: There were no other transfers into or out of Level 3 within the fair value hierarchy during the three month and six month periods ended June 30, 2023 and 2022.
−Removed: The following tables present, at June 30, 2023 and December 31, 2022, certain investments that are valued using NAV or its equivalent as a practical expedient in determining fair value:
−Removed: June 30, 2023
+Added: (c) For the nine month period ended September 30, 2023, acquisitions represent the initial recognition of the contingent consideration liability (noncash transaction), and settlements represent aggregate cash and noncash settlement of contingent consideration after the acquisition date.
+Added: There were no other transfers into or out of Level 3 within the fair value hierarchy during the three month and nine month periods ended September 30, 2023 and 2022.
+Added: The following tables present, at September 30, 2023 and December 31, 2022, certain investments that are valued using NAV or its equivalent as a practical expedient in determining fair value:
+Added: September 30, 2023
Investments Redeemable
41 unchanged sentences
(f) Distributions from each fund will be received as the underlying investments of the funds are liquidated.
−Removed: Investment Capital Funding Commitments —At June 30, 2023, the Company’s maximum unfunded commitments for capital contributions to investment funds primarily arose from commitments to EGCP III, which amounted to $ 5,028 .
+Added: Investment Capital Funding Commitments —At September 30, 2023, the Company’s maximum unfunded commitments for capital contributions to investment funds primarily arose from commitments to EGCP III, which amounted to $ 5,028 .
The investment period for EGCP III ended on October 12, 2016, after which point the Company’s obligation to fund capital contributions for new investments in EGCP III expired.
The Company remains obligated until October 12, 2023 (or any earlier liquidation of EGCP III) to make capital contributions necessary to fund follow-on investments and to pay for fund expenses.
−Removed: The tables below present the fair value of the Company’s derivative instruments reported within “other assets” and “other liabilities” and the fair value of the Company’s derivative liabilities relating to its obligations pertaining to LFI and other similar deferred compensation arrangements reported within “accrued compensation and benefits” (see Note 12) on the accompanying condensed consolidated statements of financial condition as of June 30, 2023 and December 31, 2022.
+Added: The tables below present the fair value of the Company’s derivative instruments reported within “other assets” and “other liabilities” and the fair value of the Company’s derivative liabilities relating to its obligations pertaining to LFI and other similar deferred compensation arrangements reported within “accrued compensation and benefits” (see Note 12) on the accompanying condensed consolidated statements of financial condition as of September 30, 2023 and December 31, 2022.
Notional amounts provide an indication of the volume of the Company's derivative activity.
3 unchanged sentences
These amounts mitigate counterparty credit risk associated with the Company’s derivative instruments, but are not eligible for net presentation on the condensed consolidated statements of financial condition.
−Removed: June 30, 2023
+Added: September 30, 2023
Derivative Assets Derivative Liabilities
34 unchanged sentences
Where this is the case, the total amount reported is limited to the net derivative assets and net derivative liabilities balances with that counterparty.
−Removed: Net gains (losses) with respect to derivative instruments (included in “revenue-other”) and the Company’s derivative liabilities relating to its obligations pertaining to LFI and other similar deferred compensation arrangements (included in “compensation and benefits” expense) as reflected on the accompanying condensed consolidated statements of operations for the three month and six month periods ended June 30, 2023 and 2022, were as follows:
+Added: Net gains (losses) with respect to derivative instruments (included in “revenue-other”) and the Company’s derivative liabilities relating to its obligations pertaining to LFI and other similar deferred compensation arrangements (included in “compensation and benefits” expense) as reflected on the accompanying condensed consolidated statements of operations for the three month and nine month periods ended September 30, 2023 and 2022, were as follows:
Three Months Ended
−Removed: June 30, Six Months Ended
+Added: September 30, Nine Months Ended
+Added: September 30,
2023 2022 2023 2022
8 unchanged sentences
PROPERTY, NET
−Removed: At June 30, 2023 and December 31, 2022, property consisted of the following:
−Removed: Life in Years June 30,
+Added: At September 30, 2023 and December 31, 2022, property consisted of the following:
+Added: Life in Years September 30,
2023 December 31,
9 unchanged sentences
GOODWILL AND OTHER INTANGIBLE ASSETS
−Removed: The components of goodwill and other intangible assets at June 30, 2023 and December 31, 2022 are presented below:
+Added: The components of goodwill and other intangible assets at September 30, 2023 and December 31, 2022 are presented below:
+Added: September 30,
2023 December 31,
2 unchanged sentences
$ 394,094 $ 377,330
−Removed: At June 30, 2023 and December 31, 2022, goodwill of $ 313,375 and $ 312,699 , respectively, was attributable to the Company’s Financial Advisory segment and, goodwill of $ 81,247 and $ 64,541 , respectively, was attributable to the Company’s Asset Management segment.
−Removed: Changes in the carrying amount of goodwill for the six month periods ended June 30, 2023 and 2022 are as follows:
−Removed: Six Months Ended
+Added: At September 30, 2023 and December 31, 2022, goodwill of $ 312,779 and $ 312,699 , respectively, was attributable to the Company’s Financial Advisory segment and, goodwill of $ 81,270 and $ 64,541 , respectively, was attributable to the Company’s Asset Management segment.
+Added: Changes in the carrying amount of goodwill for the nine month periods ended September 30, 2023 and 2022 are as follows:
+Added: Nine Months Ended
+Added: September 30,
Balance, January 1 $ 377,240 $ 379,421
1 unchanged sentence
Foreign currency translation adjustments 80 ( 3,637 )
−Removed: Balance, June 30 $ 394,622 $ 377,884
−Removed: The acquisition in the six month period ended June 30, 2023 was attributable to the Company’s Asset Management segment.
−Removed: All other changes in the carrying amount of goodwill for the six month periods ended June 30, 2023 and 2022 are attributable to the Company’s Financial Advisory segment.
−Removed: Amortization expense of intangible assets, included in “amortization and other acquisition-related costs” in the condensed consolidated statements of operations, for the three month and six month periods ended June 30, 2023 was $ 15 and $ 30 , respectively, and for the three month and six month periods ended June 30, 2022 was $ 15 and $ 30 , respectively.
+Added: Balance, September 30 $ 394,049 $ 375,784
+Added: The acquisition in the nine month period ended September 30, 2023 was attributable to the Company’s Asset Management segment.
+Added: All other changes in the carrying amount of goodwill for the nine month periods ended September 30, 2023 and 2022 are attributable to the Company’s Financial Advisory segment.
+Added: Amortization expense of intangible assets, included in “amortization and other acquisition-related costs” in the condensed consolidated statements of operations, for both the three month and nine month periods ended September 30, 2023 and 2022 was $ 15 and $ 45 , respectively.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(dollars in thousands, except for per share data, unless otherwise noted)
−Removed: Senior debt is comprised of the following as of June 30, 2023 and December 31, 2022:
+Added: Senior debt is comprised of the following as of September 30, 2023 and December 31, 2022:
Outstanding as of
−Removed: June 30, 2023 December 31, 2022
+Added: September 30, 2023 December 31, 2022
Amount Maturity
10 unchanged sentences
(a) The effective interest rates of Lazard Group’s 3.75 % senior notes due February 13, 2025 (the “2025 Notes”), Lazard Group’s 3.625 % senior notes due March 1, 2027 (the “2027 Notes”), Lazard Group’s 4.50 % senior notes due September 19, 2028 (the “2028 Notes”) and Lazard Group’s 4.375 % senior notes due March 11, 2029 (the “2029 Notes”) are 3.87 %, 3.76 %, 4.67 % and 4.53 %, respectively.
−Removed: The Company’s senior debt at June 30, 2023 and December 31, 2022 is carried at their principal balances outstanding, net of unamortized debt costs.
+Added: The Company’s senior debt at September 30, 2023 and December 31, 2022 is carried at their principal balances outstanding, net of unamortized debt costs.
At those dates, the fair value of such senior debt was approximately $ 1,586,000 and $ 1,602,000 , respectively.
5 unchanged sentences
The Second Amended and Restated Credit Agreement contains certain covenants, events of default and other customary provisions, including customary benchmark-replacement mechanics.
−Removed: At June 30, 2023 and December 31, 2022, no amounts were outstanding under the Second Amended and Restated Credit Agreement and the Previous Credit Agreement, respectively.
−Removed: As of June 30, 2023, the Company had approximately $ 209,200 in unused lines of credit available to it, including the credit facility provided under the Second Amended and Restated Credit Agreement.
+Added: At September 30, 2023 and December 31, 2022, no amounts were outstanding under the Second Amended and Restated Credit Agreement and the Previous Credit Agreement, respectively.
+Added: As of September 30, 2023, the Company had approximately $ 209,000 in unused lines of credit available to it, including the credit facility provided under the Second Amended and Restated Credit Agreement.
The Second Amended and Restated Credit Agreement and the indenture and the supplemental indentures relating to Lazard Group’s senior notes contain certain covenants, events of default and other customary provisions, including a customary make-whole provision in the event of early redemption, where applicable.
−Removed: As of June 30, 2023, the Company was in compliance with such provisions.
+Added: As of September 30, 2023, the Company was in compliance with such provisions.
All of the Company’s senior debt obligations are unsecured.
2 unchanged sentences
COMMITMENTS AND CONTINGENCIES
−Removed: Guarantees —A subsidiary of LAM guaranteed a revolving credit facility of an unconsolidated subsidiary expiring on October 1, 2023.
−Removed: At June 30, 2023, the maximum amount of future payments under such guarantee is $ 10,000 .
+Added: Guarantees —A subsidiary of LAM guaranteed a revolving credit facility of an unconsolidated fund expiring on October 1, 2023.
+Added: At September 30, 2023, the maximum amount of future payments under such guarantee is $ 10,000 .
Other Commitments —From time to time, LFB and LFNY may enter into underwriting commitments in which they will participate as an underwriter.
−Removed: At June 30, 2023, LFB and LFNY had no such underwriting commitments.
+Added: At September 30, 2023, LFB and LFNY had no such underwriting commitments.
See Notes 5 and 13 for information regarding commitments relating to investment capital funding commitments and obligations to fund our pension plans, respectively.
6 unchanged sentences
STOCKHOLDERS’ EQUITY AND REDEEMABLE NONCONTROLLING INTERESTS
−Removed: Share Repurchase Program —Since 2021 and through the six month period ended June 30, 2023, the Board of Directors of Lazard authorized the repurchase of Lazard Ltd Class A common stock (“common stock”), the only class of common stock of Lazard outstanding as set forth in the table below:
+Added: Share Repurchase Program —Since 2021 and through the nine month period ended September 30, 2023, the Board of Directors of Lazard authorized the repurchase of Lazard Ltd Class A common stock (“common stock”), the only class of common stock of Lazard outstanding as set forth in the table below:
Date Repurchase
7 unchanged sentences
Purchases with respect to such program are set forth in the table below:
−Removed: Six Months Ended June 30:
+Added: Nine Months Ended September 30:
Purchased Average
1 unchanged sentence
2023 2,782,662 $ 36.67
−Removed: During the six month periods ended June 30, 2023 and 2022, certain of our executive officers received common stock in connection with the vesting or settlement of previously-granted deferred equity incentive awards.
+Added: During the nine month periods ended September 30, 2023 and 2022, certain of our executive officers received common stock in connection with the vesting or settlement of previously-granted deferred equity incentive awards.
The vesting or settlement of such equity awards gave rise to a tax payable by the executive officers, and, consistent with our past practice, the Company purchased shares of common stock from certain of our executive officers equal in value to all or a portion of the estimated amount of such tax.
−Removed: In addition, during the six month periods ended June 30, 2023 and 2022, the Company purchased shares of common stock from certain of our executive officers.
−Removed: The aggregate value of all such purchases during
+Added: In addition, during the nine month periods ended September 30, 2023 and 2022, the Company purchased shares of common stock from certain of our executive officers.
+Added: The aggregate value of all
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(dollars in thousands, except for per share data, unless otherwise noted)
−Removed: the six month periods ended June 30, 2023 and 2022 was approximately $ 11,100 and $ 13,400 , respectively.
+Added: such purchases during the nine month periods ended September 30, 2023 and 2022 was approximately $ 11,100 and $ 16,500 , respectively.
Such shares of common stock are reported at cost.
−Removed: As of June 30, 2023, a total of $ 203,049 of share repurchase authorization remained available under Lazard Ltd’s share repurchase program, which authorization will expire on December 31, 2024.
−Removed: During the six month period ended June 30, 2023, Lazard Ltd had in place trading plans under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), pursuant to which it effected stock repurchases in the open market.
+Added: As of September 30, 2023, a total of $ 200,095 of share repurchase authorization remained available under Lazard Ltd’s share repurchase program, which authorization will expire on December 31, 2024 .
+Added: During the nine month period ended September 30, 2023, Lazard Ltd had in place trading plans under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), pursuant to which it effected stock repurchases in the open market.
Preferred Stock —Lazard Ltd has 15,000,000 authorized shares of preferred stock, par value $ 0.01 per share, inclusive of its Series A and Series B preferred stock.
Series A and Series B preferred shares were issued in connection with certain prior year business acquisitions and were each non-participating securities convertible into common stock, and had no voting or dividend rights.
−Removed: As of both June 30, 2023 and December 31, 2022, no shares of Series A or Series B preferred stock were outstanding.
−Removed: Accumulated Other Comprehensive Income (Loss) (“AOCI”), Net of Tax —The tables below reflect the balances of each component of AOCI at June 30, 2023 and 2022 and activity during the three month and six month periods then ended:
−Removed: Three Months Ended June 30, 2023
+Added: As of both September 30, 2023 and December 31, 2022, no shares of Series A or Series B preferred stock were outstanding.
+Added: Accumulated Other Comprehensive Income (Loss) (“AOCI”), Net of Tax —The tables below reflect the balances of each component of AOCI at September 30, 2023 and 2022 and activity during the three month and nine month periods then ended:
+Added: Three Months Ended September 30, 2023
Adjustments Employee
2 unchanged sentences
Interests Total
−Removed: Balance, April 1, 2023 $ ( 142,385 ) $ ( 140,571 ) $ ( 282,956 ) $ 1 $ ( 282,957 )
+Added: Balance, July 1, 2023 $ ( 139,907 ) $ ( 141,980 ) $ ( 281,887 ) $ ( 1 ) $ ( 281,886 )
Other comprehensive income (loss) before reclassifications ( 19,935 ) 5,054 ( 14,881 ) 1 ( 14,882 )
1 unchanged sentence
Net other comprehensive income (loss) ( 17,806 ) 6,634 ( 11,172 ) 1 ( 11,173 )
−Removed: Balance, June 30, 2023 $ ( 139,907 ) $ ( 141,980 ) $ ( 281,887 ) $ ( 1 ) $ ( 281,886 )
−Removed: Six Months Ended June 30, 2023
+Added: Balance, September 30, 2023 $ ( 157,713 ) $ ( 135,346 ) $ ( 293,059 ) $ - $ ( 293,059 )
+Added: Nine Months Ended September 30, 2023
Adjustments Employee
3 unchanged sentences
Balance, January 1, 2023 $ ( 156,924 ) $ ( 138,930 ) $ ( 295,854 ) $ - $ ( 295,854 )
−Removed: Other comprehensive income (loss) before reclassifications 17,017 ( 5,386 ) 11,631 ( 1 ) 11,632
+Added: Other comprehensive loss before reclassifications ( 2,946 ) ( 332 ) ( 3,278 ) - ( 3,278 )
Adjustments for items reclassified to earnings, net of tax 2,157 3,916 6,073 - 6,073
Net other comprehensive income (loss) ( 789 ) 3,584 2,795 - 2,795
−Removed: Balance, June 30, 2023 $ ( 139,907 ) $ ( 141,980 ) $ ( 281,887 ) $ ( 1 ) $ ( 281,886 )
+Added: Balance, September 30, 2023 $ ( 157,713 ) $ ( 135,346 ) $ ( 293,059 ) $ - $ ( 293,059 )
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(dollars in thousands, except for per share data, unless otherwise noted)
−Removed: Three Months Ended June 30, 2022
+Added: Three Months Ended September 30, 2022
Adjustments Employee
2 unchanged sentences
Interests Total
−Removed: Balance, April 1, 2022 $ ( 110,246 ) $ ( 127,381 ) $ ( 237,627 ) $ ( 1 ) $ ( 237,626 )
+Added: Balance, July 1, 2022 $ ( 171,741 ) $ ( 118,289 ) $ ( 290,030 ) $ ( 1 ) $ ( 290,029 )
Other comprehensive income (loss) before reclassifications ( 54,439 ) 8,786 ( 45,653 ) - ( 45,653 )
1 unchanged sentence
Net other comprehensive income (loss) ( 54,301 ) 9,948 ( 44,353 ) - ( 44,353 )
−Removed: Balance, June 30, 2022 $ ( 171,741 ) $ ( 118,289 ) $ ( 290,030 ) $ ( 1 ) $ ( 290,029 )
−Removed: Six Months Ended June 30, 2022
+Added: Balance, September 30, 2022 $ ( 226,042 ) $ ( 108,341 ) $ ( 334,383 ) $ ( 1 ) $ ( 334,382 )
+Added: Nine Months Ended September 30, 2022
Adjustments Employee
6 unchanged sentences
Net other comprehensive income (loss) ( 133,864 ) 23,328 ( 110,536 ) ( 1 ) ( 110,535 )
−Removed: Balance, June 30, 2022 $ ( 171,741 ) $ ( 118,289 ) $ ( 290,030 ) $ ( 1 ) $ ( 290,029 )
−Removed: The table below reflects adjustments for items reclassified out of AOCI, by component, for the three month and six month periods ended June 30, 2023 and 2022:
+Added: Balance, September 30, 2022 $ ( 226,042 ) $ ( 108,341 ) $ ( 334,383 ) $ ( 1 ) $ ( 334,382 )
+Added: The table below reflects adjustments for items reclassified out of AOCI, by component, for the three month and nine month periods ended September 30, 2023 and 2022:
Three Months Ended
−Removed: June 30, Six Months Ended
+Added: September 30, Nine Months Ended
+Added: September 30,
2023 2022 2023 2022
6 unchanged sentences
__________________________
−Removed: (a) Represents currency translation losses reclassified from AOCI associated with restructuring and closing of certain of our offices.
+Added: (a) Represents currency translation losses reclassified from AOCI associated with closing of certain of our offices.
Such amounts are included in “revenue—other” on the condensed consolidated statements of operations.
4 unchanged sentences
Noncontrolling Interests —Noncontrolling interests principally represent (i) interests held in Edgewater’s management vehicles that the Company is deemed to control, but does not own, (ii) profits interest participation rights (see Note 12), (iii) LGAC interests (see Note 1) and (iv) consolidated VIE interests held by employees (see Note 20).
−Removed: The tables below summarize net income (loss) attributable to noncontrolling interests for the three month and six month periods ended June 30, 2023 and 2022 and noncontrolling interests as of June 30, 2023 and December 31, 2022 in the Company’s condensed consolidated financial statements:
+Added: The tables below summarize net income (loss) attributable to noncontrolling interests for the three month and nine month periods ended September 30, 2023 and 2022 and noncontrolling interests as of September 30, 2023 and December 31, 2022 in the Company’s condensed consolidated financial statements:
Net Income (Loss)
1 unchanged sentence
Three Months Ended
−Removed: June 30, Six Months Ended
+Added: September 30, Nine Months Ended
+Added: September 30,
2023 2022 2023 2022
5 unchanged sentences
Noncontrolling Interests as of
+Added: September 30,
2023 December 31,
4 unchanged sentences
Total $ 58,243 $ 118,936
−Removed: Redeemable Noncontrolling Interests —Redeemable noncontrolling interests principally represent LGAC interests as of December 31, 2022 (see Note 1) and consolidated VIE interests held by employees as of June 30, 2023 (see Note 20).
+Added: Redeemable Noncontrolling Interests —Redeemable noncontrolling interests principally represent LGAC interests as of December 31, 2022 (see Note 1) and consolidated VIE interests held by employees as of September 30, 2023 (see Note 20).
Consolidated VIE interests held by employees (vested LFI awards), which may be redeemed at any time at the option of the holder for cash, are recorded on the Company’s condensed consolidated statements of financial position at redemption value and classified as temporary equity.
Changes in redemption value are recognized immediately as they occur and will adjust the carrying value of redeemable noncontrolling interests to equal the redemption value at the end of each reporting period.
−Removed: Dividends Declared, July 26, 2023 —On July 26, 2023 , the Board of Directors of Lazard declared a quarterly dividend of $ 0.50 per share on our common stock.
−Removed: The dividend is payable on August 18, 2023 , to stockholders of record on August 7, 2023 .
+Added: Dividends Declared, October 25, 2023 —On October 25, 2023 , the Board of Directors of Lazard declared a quarterly dividend of $ 0.50 per share on our common stock.
+Added: The dividend is payable on November 17, 2023 , to stockholders of record on November 6, 2023 .
INCENTIVE PLANS
Share-Based Incentive Plan Awards
−Removed: A description of Lazard Ltd’s 2018 Plan, 2008 Incentive Compensation Plan (the “2008 Plan”) and 2005 Equity Incentive Plan (the “2005 Plan”) and activity with respect thereto during the three month and six month periods ended June 30, 2023 and 2022 is presented below.
+Added: A description of Lazard Ltd’s 2018 Plan, 2008 Incentive Compensation Plan (the “2008 Plan”) and 2005 Equity Incentive Plan (the “2005 Plan”) and activity with respect thereto during the three month and nine month periods ended September 30, 2023 and 2022 is presented below.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
4 unchanged sentences
The 2018 Plan originally authorized issuance of up to 30,000,000 shares of common stock, plus any shares of common stock that were subject to outstanding awards under the 2008 Plan as of March 14, 2018 that are forfeited, canceled or settled in cash following April 24, 2018, which was the date that the 2018 Plan was approved by our shareholders.
−Removed: Such shares may be issued pursuant to the grant or exercise of stock options, stock appreciation rights, restricted stock units (“RSUs”), performance-based restricted stock units (“PRSUs”), restricted stock awards (“RSAs”), profits interest participation rights, including performance-based restricted participation units (“PRPUs”), and other share-based awards.
+Added: Such shares may be issued pursuant to the grant or exercise of stock options, stock appreciation rights, restricted stock units (“RSUs”), performance-based restricted stock units (“PRSUs”), restricted stock awards (“RSAs”), profits interest participation rights, including performance-based restricted participation units (“PRPUs”) and stock performance-based restricted participation units (“SPRPUs”), and other share-based awards.
The 2008 Plan authorized the issuance of shares of common stock pursuant to the grant or exercise of stock options, stock appreciation rights, RSUs, PRSUs and other share-based awards.
3 unchanged sentences
The 2005 Plan expired in the second quarter of 2015, although outstanding DSU awards granted under the 2005 Plan before its expiration continue to be subject to its terms.
−Removed: The following reflects the amortization expense recorded with respect to share-based incentive plans within “compensation and benefits” expense (with respect to RSUs, PRSUs, RSAs and profits interest participation rights, including PRPUs) and “professional services” expense (with respect to DSUs) within the Company’s accompanying condensed consolidated statements of operations for the three month and six month periods ended June 30, 2023 and 2022:
+Added: The following reflects the amortization expense recorded with respect to share-based incentive plans within “compensation and benefits” expense (with respect to RSUs, PRSUs, RSAs and profits interest participation rights, including PRPUs and SPRPUs) and “professional services” expense (with respect to DSUs) within the Company’s accompanying condensed consolidated statements of operations for the three month and nine month periods ended September 30, 2023 and 2022:
Three Months Ended
−Removed: June 30, Six Months Ended
+Added: September 30, Nine Months Ended
+Added: September 30,
2023 2022 2023 2022
6 unchanged sentences
Total $ 58,362 $ 74,916 $ 209,630 $ 201,102
−Removed: The ultimate amount of compensation and benefits expense relating to share-based awards is dependent upon the actual number of shares of common stock that vest.
+Added: Compensation and benefits expense relating to share-based awards with service and/or performance conditions is reversed if the awards are forfeited due to these conditions not being met.
+Added: Compensation and benefits expense relating to share-based awards with market conditions is not reversed if these awards are forfeited based solely on failing to meet such market conditions.
The Company periodically assesses the forfeiture rates used for such estimates, including as a result of any applicable performance conditions.
1 unchanged sentence
The Company’s share-based incentive plans and awards are described below.
−Removed: RSUs and DSUs
−Removed: RSUs generally require future service as a condition for the delivery of the underlying shares of common stock (unless the recipient is then eligible for retirement under the Company’s retirement policy) and convert into shares of
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(dollars in thousands, except for per share data, unless otherwise noted)
−Removed: common stock on a one-for-one basis after the stipulated vesting periods.
−Removed: The grant date fair value of the RSUs, net of an estimated forfeiture rate, is amortized over the vesting periods or requisite service periods (generally, one-third after two years and the remaining two-thirds after the third year), and is adjusted for actual forfeitures over such period.
+Added: RSUs and DSUs
+Added: RSUs generally require future service as a condition for the delivery of the underlying shares of common stock (unless the recipient is then eligible for retirement under the Company’s retirement policy) and convert into shares of common stock on a one-for-one basis after the stipulated vesting periods.
+Added: The grant date fair value of the RSUs, net of an estimated forfeiture rate, is amortized over the requisite service periods (generally, one-third after two years and the remaining two-thirds after the third year), and is adjusted for actual forfeitures over such period.
RSUs generally include a dividend participation right that provides that, during the applicable vesting period, each RSU is attributed additional RSUs equivalent to any dividends paid on common stock during such period.
−Removed: During the six month period ended June 30, 2023, dividend participation rights required the issuance of 352,254 RSUs and the associated charge to “retained earnings”, net of estimated forfeitures (with corresponding credits to “additional paid-in-capital”) was $ 11,311 .
−Removed: Non-executive members of the Board of Directors (“Non-Executive Directors”) receive approximately 55 % of their annual compensation for service on the Board of Directors and its committees in the form of DSUs, which resulted in 43,999 DSUs being granted during the six month period ended June 30, 2023.
+Added: During the nine month period ended September 30, 2023, dividend participation rights required the issuance of 515,420 RSUs and the associated charge to “retained earnings”, net of estimated forfeitures (with corresponding credits to “additional paid-in-capital”) was $ 16,736 .
+Added: Non-executive members of the Board of Directors (“Non-Executive Directors”) receive approximately 55 % of their annual compensation for service on the Board of Directors and its committees in the form of DSUs, which resulted in 43,999 DSUs being granted during the nine month period ended September 30, 2023.
Their remaining compensation is payable in cash, which they may elect to receive in the form of additional DSUs under the Directors’ Fee Deferral Unit Plan described below.
3 unchanged sentences
The number of DSUs granted to a Non-Executive Director pursuant to this election will equal the value of cash fees that the applicable Non-Executive Director has elected to forego pursuant to such election, divided by the market value of a share of common stock on the date immediately preceding the date of the grant.
−Removed: During the six month period ended June 30, 2023, 9,998 DSUs had been granted pursuant to such Plan.
+Added: During the nine month period ended September 30, 2023, 14,415 DSUs had been granted pursuant to such Plan.
DSU awards are expensed at their fair value on their date of grant, inclusive of amounts related to the Directors’ Fee Deferral Unit Plan.
−Removed: The following is a summary of activity relating to RSUs and DSUs during the six month period ended June 30, 2023:
+Added: The following is a summary of activity relating to RSUs and DSUs during the nine month period ended September 30, 2023:
Units Weighted
5 unchanged sentences
Settled ( 3,359,950 ) $ 41.65 ( 134,744 ) $ 36.21
−Removed: Balance, June 30, 2023 11,150,560 $ 36.28 380,454 $ 36.85
−Removed: The weighted-average grant date fair value of RSUs granted in the six month periods ended June 30, 2023 and 2022 was $ 36.75 and $ 33.49 , respectively.
−Removed: The weighted-average grant date fair value of DSUs granted in the six month periods ended June 30, 2023 and 2022 was $ 29.50 and $ 35.19 , respectively.
−Removed: In connection with RSUs that settled during the six month period ended June 30, 2023, the Company satisfied its minimum statutory tax withholding requirements in lieu of delivering 1,121,423 shares of common stock during such six month period.
−Removed: Accordingly, 1,711,773 shares of common stock held by the Company were delivered during the six month period ended June 30, 2023.
−Removed: As of June 30, 2023, estimated unrecognized RSU compensation expense was $ 189,180 , with such expense expected to be recognized over a weighted average period of approximately 1.0 years subsequent to June 30, 2023.
+Added: Balance, September 30, 2023 11,031,771 $ 36.17 324,490 $ 36.86
+Added: The weighted-average grant date fair value of RSUs granted in the nine month periods ended September 30, 2023 and 2022 was $ 36.51 and $ 33.64 , respectively.
+Added: The weighted-average grant date fair value of DSUs granted in the nine month periods ended September 30, 2023 and 2022 was $ 29.87 and $ 35.53 , respectively.
+Added: In connection with RSUs that settled during the nine month period ended September 30, 2023, the Company satisfied its minimum statutory tax withholding requirements in lieu of delivering 1,204,403 shares of common stock during such nine month period.
+Added: Accordingly, 2,155,547 shares of common stock held by the Company were delivered during the nine month period ended September 30, 2023.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(dollars in thousands, except for per share data, unless otherwise noted)
−Removed: The following is a summary of activity related to RSAs associated with compensation arrangements during the six month period ended June 30, 2023:
+Added: As of September 30, 2023, estimated unrecognized RSU compensation expense was $ 156,284 , with such expense expected to be recognized over a weighted average period of approximately 1.0 year subsequent to September 30, 2023.
+Added: The following is a summary of activity related to RSAs associated with compensation arrangements during the nine month period ended September 30, 2023:
RSAs Weighted
4 unchanged sentences
Settled ( 660,282 ) $ 39.27
−Removed: Balance, June 30, 2023 1,408,725 $ 36.32
−Removed: The weighted-average grant date fair value of RSAs granted in the six month periods ended June 30, 2023 and 2022 was $ 37.69 and $ 33.21 , respectively.
−Removed: In connection with RSAs that settled during the six month period ended June 30, 2023, the Company satisfied its minimum statutory tax withholding requirements in lieu of delivering 202,120 shares of common stock during such six month period.
−Removed: Accordingly, 271,239 shares of common stock held by the Company were delivered during the six month period ended June 30, 2023.
+Added: Balance, September 30, 2023 1,240,674 $ 36.10
+Added: The weighted-average grant date fair value of RSAs granted in the nine month periods ended September 30, 2023 and 2022 was $ 37.65 and $ 33.31 , respectively.
+Added: In connection with RSAs that settled during the nine month period ended September 30, 2023, the Company satisfied its minimum statutory tax withholding requirements in lieu of delivering 268,402 shares of common stock during such nine month period.
+Added: Accordingly, 391,880 shares of common stock held by the Company were delivered during the nine month period ended September 30, 2023.
RSAs granted in 2023 generally include a dividend participation right that provides that during the applicable vesting period each RSA is attributed additional RSAs equivalent to any dividends paid on common stock during such period.
−Removed: During the six month period ended June 30, 2023, dividend participation rights required the issuance of 50,754 RSAs and the associated charge to “retained earnings”, net of estimated forfeitures (with corresponding credits to “additional paid-in-capital”) was $ 1,650 .
−Removed: At June 30, 2023, estimated unrecognized RSAs expense was $ 25,871 , with such expense to be recognized over a weighted average period of approximately 0.9 years subsequent to June 30, 2023.
+Added: During the nine month period ended September 30, 2023, dividend participation rights required the issuance of 71,900 RSAs and the associated charge to “retained earnings”, net of estimated forfeitures (with corresponding credits to “additional paid-in-capital”) was $ 2,358 .
+Added: At September 30, 2023, estimated unrecognized RSAs expense was $ 20,050 , with such expense to be recognized over a weighted average period of approximately 0.9 years subsequent to September 30, 2023.
PRSUs are RSUs that are subject to performance-based and service-based vesting conditions, and beginning with awards granted in February 2021, a market-based condition.
4 unchanged sentences
PRSUs include dividend participation rights that are subject to the same vesting restrictions (including performance criteria) as the underlying PRSUs to which they relate and are settled in cash at the same rate that dividends are paid on common stock.
−Removed: The following is a summary of activity relating to PRSUs during the six month period ended June 30, 2023:
−Removed: PRSUs Weighted
−Removed: Balance, January 1, 2023 94,690 $ 39.27
−Removed: Balance, June 30, 2023 94,690 $ 39.27
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(dollars in thousands, except for per share data, unless otherwise noted)
−Removed: The weighted-average grant date fair value of PRSUs granted in the six month period ended June 30, 2022 was $ 35.44 .
+Added: The following is a summary of activity relating to PRSUs during the nine month period ended September 30, 2023:
+Added: PRSUs Weighted
+Added: Balance, January 1, 2023 94,690 $ 39.27
+Added: Balance, September 30, 2023 94,690 $ 39.27
+Added: The weighted-average grant date fair value of PRSUs granted in the nine month period ended September 30, 2022 was $ 35.44 .
Compensation expense recognized for PRSU awards is determined by multiplying the number of shares of common stock underlying such awards that, based on the Company’s estimate, are considered probable of vesting, by the grant date fair value.
−Removed: As of June 30, 2023, the total estimated unrecognized compensation expense was $ 2,322 , and the Company expects to amortize such expense over a weighted-average period of approximately 0.6 years subsequent to June 30, 2023.
+Added: As of September 30, 2023, the total estimated unrecognized compensation expense was $ 1,754 , and the Company expects to amortize such expense over a weighted-average period of approximately 0.5 years subsequent to September 30, 2023.
Profits Interest Participation Rights
Profits interest participation rights are equity incentive awards that, subject to certain conditions, may be exchanged for shares of common stock pursuant to the 2018 Plan.
−Removed: Prior to 2023, the Company granted profits interest participation rights subject to service-based and performance-based vesting criteria and other conditions, and beginning in February 2021, incremental market-based vesting criteria, which we refer to as performance-based restricted participation units (“PRPUs”), to certain of our executive officers.
+Added: The Company has granted profits interest participation rights subject to service-based and performance-based vesting criteria and other conditions, and beginning in February 2021, incremental market-based vesting criteria, which we refer to as performance-based restricted participation units (“PRPUs”), to certain of our executive officers.
The Company has also granted profits interest participation rights subject to service-based vesting criteria and other conditions, but not the performance-based and incremental market-based vesting criteria associated with PRPUs, to a limited number of other senior employees, including in March 2023 to certain of our executive officers.
−Removed: Profits interest participation rights generally provide for vesting approximately three years following the grant date, so long as applicable conditions have been satisfied.
+Added: In August 2023, the Company granted profits interest participation rights, SPRPUs, to certain of our executive officers that are eligible to vest in three tranches, each subject to service-based vesting criteria and the achievement of specified common stock price milestones measured as of a specified anniversary of the grant date.
+Added: Profits interest participation rights, with the exception of SPRPUs, as explained below, generally provide for vesting approximately three years following the grant date, so long as applicable conditions have been satisfied.
Profits interest participation rights are a class of membership interests in Lazard Group that are intended to qualify as “profits interests” for U.S.
federal income tax purposes, and are recorded as noncontrolling interests within stockholders’ equity in the Company’s condensed consolidated statements of financial condition until they are exchanged into common stock, at which time there is a reclassification to additional paid-in-capital.
−Removed: The profits interest participation rights generally allow the recipient to realize value only to the extent that both (i) the service-based vesting conditions and, if applicable, the performance-based and incremental market-based conditions, are satisfied, and (ii) an amount of economic appreciation in the assets of Lazard Group occurs as necessary to satisfy certain partnership tax rules (referred to as the “Minimum Value Condition”) before the fifth anniversary of the grant date, otherwise the profits interest participation rights will be forfeited.
+Added: The profits interest participation rights generally allow the recipient to realize value only to the extent that (i) the service-based vesting conditions and, if applicable, the performance-based and incremental market-based conditions, or stock price milestones, are satisfied, and (ii) an amount of economic appreciation in the assets of Lazard Group occurs as necessary to satisfy certain partnership tax rules (referred to as the “Minimum Value Condition”), otherwise the profits interest participation rights will be forfeited.
Upon satisfaction of such conditions, profits interest participation rights that are in parity with the value of common stock will be exchanged on a one-for-one basis for shares of common stock.
−Removed: If forfeited based solely on failing to meet the Minimum Value Condition, the associated compensation expense would not be reversed.
+Added: If forfeited based solely on failing to meet the Minimum Value Condition, or, if applicable, stock price milestones, the associated compensation expense would not be reversed.
With regard to the profits interest participation rights granted in February 2020, the Minimum Value Condition was met during the year ended December 31, 2021.
1 unchanged sentence
Like outstanding RSUs and similar awards, profits interest participation rights are subject to continued employment and other conditions and restrictions and are forfeited if those conditions and restrictions are not fulfilled.
−Removed: More specifically, vesting of profits interest participation rights are subject to compliance with restrictive covenants including non-compete, non-solicitation of clients, no hire of employees and confidentiality, which are similar to those applicable to PRSUs and RSUs.
+Added: More specifically, vesting of profits interest participation rights are subject to compliance with restrictive covenants
+Added: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
+Added: (dollars in thousands, except for per share data, unless otherwise noted)
+Added: including non-compete, non-solicitation of clients, no hire of employees and confidentiality, which are similar to those applicable to PRSUs and RSUs.
In addition, profits interest participation rights must satisfy the Minimum Value Condition.
4 unchanged sentences
Unless applicable conditions are satisfied during the three year performance period, and the Minimum Value Condition is satisfied within five years following the grant date, all PRPUs will be forfeited, and the recipients will not be entitled to any such awards.
−Removed: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
−Removed: (dollars in thousands, except for per share data, unless otherwise noted)
−Removed: The performance metrics applicable to the PRPU awards granted prior to February 2021 were also evaluated on an annual basis at the end of each fiscal year during the performance period, and, if Lazard Ltd achieved a threshold level of performance with respect to the fiscal year, 25 % of the target number of PRPUs were no longer at risk of forfeiture based on the achievement of performance criteria.
−Removed: Profits interest participation rights are allocated income, subject to vesting and settled in cash, in respect of dividends paid on common stock.
−Removed: The following is a summary of activity relating to profits interest participation rights, including PRPUs, during the six month period ended June 30, 2023:
+Added: SPRPUs are eligible to vest in three tranches (each, a “Tranche”) based on the achievement of service conditions and Tranche-specific common stock price milestones measured as of a specified anniversary of the date of grant, as described below.
+Added: Their aggregate fair value at the grant date, which based on the estimated probability of achieving the common stock price milestones is approximately $ 33,900 , is amortized over the requisite service periods.
+Added: SPRPUs will vest:
+Added: • 20 % if, three years following the date of grant, the Company’s common stock price has appreciated 25 % above the average trailing 30 consecutive day stock price preceding the date of grant (the “Grant Date Stock Price”);
+Added: • 40 % if, five years following the date of grant, the Company’s common stock price has appreciated 50 % above the Grant Date Stock Price;
+Added: • and the remainder of the SPRPUs will vest if, seven years following the date of grant, the Company’s common stock price has appreciated 100 % above the Grant Date Stock Price.
+Added: Each Tranche is subject to the executive’s continued employment through the applicable anniversary of the date of grant and requires that the applicable common stock price milestone is sustained for any 30 consecutive day period prior to the anniversary of the date of grant of the applicable Tranche (the “Expiration Date”).
+Added: If the vesting conditions, as described above, are not achieved as of the Expiration Date, all SPRPUs in such Tranche will be forfeited.
+Added: The following is a summary of activity relating to all profits interest participation rights, including PRPUs and SPRPUs, during the nine month period ended September 30, 2023:
Profits Interest Participation Rights Weighted
3 unchanged sentences
Settled ( 1,521,620 ) $ 42.17
−Removed: Balance, June 30, 2023 (a) 3,831,387 $ 37.98
+Added: Balance, September 30, 2023 (a) 6,081,387 $ 29.50
__________________________
−Removed: (a) Table includes 1,474,002 PRPUs as of June 30, 2023.
−Removed: This includes 2,447,224 PRPUs as of January 1, 2023, net of 973,222 PRPUs settled during the six month period ended June 30, 2023.
−Removed: The balance as of June 30, 2023 reflects the target number of PRPUs granted in February 2021 and March 2022.
−Removed: There were no PRPUs granted during the six month period ended June 30, 2023.
−Removed: The weighted average grant date fair values for PRPUs and other profits interest participation rights outstanding as of January 1, 2023 were $ 40.29 and $ 39.96 , respectively.
−Removed: The weighted average grant date fair values for other profits interest participation rights granted during the six month period ended June 30, 2023 was $ 35.94 .
−Removed: The weighted average grant date fair values for other profits interest participation rights forfeited during the six month period ended June 30, 2023 was $ 43.23 .
−Removed: The weighted average grant date fair values for PRPUs and other profits interest participation rights settled during the six month period ended June 30, 2023 were $ 41.76 and $ 42.89 , respectively.
−Removed: The weighted average grant date fair values for PRPUs and other profits interest participation rights outstanding as of June 30, 2023 were $ 39.31 and $ 37.14 , respectively.
−Removed: The weighted average grant date fair value of profits interest participation rights granted in the six month periods ended June 30, 2023 and 2022 was $ 35.94 and $ 34.53 , respectively.
+Added: (a) Table includes 1,474,002 PRPUs and 2,250,000 SPRPUs as of September 30, 2023.
+Added: This includes 2,447,224 PRPUs as of January 1, 2023, net of 973,222 PRPUs settled and 2,250,000 SPRPUs granted during the nine month period ended September 30, 2023.
+Added: The balance as of September 30, 2023 reflects the target number of PRPUs granted in February 2021 and March 2022.
+Added: There were no PRPUs granted during the nine month period ended September 30, 2023.
+Added: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
+Added: (dollars in thousands, except for per share data, unless otherwise noted)
+Added: weighted average grant date fair values for PRPUs and other profits interest participation rights outstanding as of January 1, 2023 were $ 40.29 and $ 39.96 , respectively.
+Added: The weighted average grant date fair values for SPRPUs and other profits interest participation rights granted during the nine month period ended September 30, 2023 was $ 15.06 and $ 35.94 , respectively.
+Added: The weighted average grant date fair values for other profits interest participation rights forfeited during the nine month period ended September 30, 2023 was $ 43.23 .
+Added: The weighted average grant date fair values for PRPUs and other profits interest participation rights settled during the nine month period ended September 30, 2023 were $ 41.76 and $ 42.89 , respectively.
+Added: The weighted average grant date fair values for PRPUs, SPRPUs and other profits interest participation rights outstanding as of September 30, 2023 were $ 39.31 , $ 15.06 and $ 37.14 , respectively.
+Added: The weighted average grant date fair value of profits interest participation rights, including PRPUs and SPRPUs, granted in the nine month periods ended September 30, 2023 and 2022 was $ 22.47 and $ 34.53 , respectively.
Compensation expense recognized for profits interest participation rights, including PRPUs, is determined by multiplying the number of shares of common stock underlying such awards that, based on the Company’s estimate, are considered probable of vesting, by the grant date fair value.
−Removed: As of June 30, 2023, the total estimated unrecognized compensation expense was $ 34,515 and the Company expects to amortize such expense over a weighted-average period of approximately 0.9 years subsequent to June 30, 2023.
+Added: Compensation expense recognized for SPRPUs is determined by multiplying the number of shares of common stock underlying such awards by the grant date fair value.
+Added: As of September 30, 2023, the total estimated unrecognized compensation expense of all profits interest participation rights, including PRPUs and SPRPUs was $ 57,590 and the Company expects to amortize such expense over a weighted-average period of approximately 1.9 years subsequent to September 30, 2023.
LFI and Other Similar Deferred Compensation Arrangements
In connection with LFI and other similar deferred compensation arrangements, granted to eligible employees, which generally require future service as a condition for vesting, the Company recorded a prepaid compensation asset and a corresponding compensation liability on the grant date based upon the fair value of the award.
−Removed: The prepaid asset is amortized on a straight-line basis over the applicable vesting periods or requisite service periods (which are generally similar to the comparable periods for RSUs) and is charged to “compensation and benefits” expense within the Company’s condensed consolidated statement of operations.
+Added: The prepaid asset is amortized on a straight-line basis over the applicable requisite service periods (which are generally similar to the comparable periods for RSUs) and is charged to “compensation and benefits” expense within the Company’s condensed consolidated statement of operations.
LFI and similar deferred compensation arrangements that do not require future service are expensed immediately.
The related compensation liability is accounted for at fair value as a derivative liability, which contemplates the impact of estimated forfeitures, and is adjusted for changes in fair value primarily related to changes in value of the underlying investments.
−Removed: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
−Removed: (dollars in thousands, except for per share data, unless otherwise noted)
−Removed: The following is a summary of activity relating to LFI and other similar deferred compensation arrangements during the six month period ended June 30, 2023:
+Added: The following is a summary of activity relating to LFI and other similar deferred compensation arrangements during the nine month period ended September 30, 2023:
Asset Compensation
2 unchanged sentences
Settled - ( 167,526 )
−Removed: Forfeited 2,752 ( 2,622 )
−Removed: Amortization ( 89,660 ) -
−Removed: Change in fair value related to:
+Added: Amortization and the impact of forfeitures ( 126,169 ) 7,285
Change in fair value of underlying investments - 15,530
−Removed: Adjustment for estimated forfeitures - 7,800
Other 109 ( 969 )
−Removed: Balance, June 30, 2023 $ 185,334 $ 372,910
−Removed: The amortization of the prepaid compensation asset will generally be recognized over a weighted average period of approximately 1.0 years subsequent to June 30, 2023.
−Removed: The following is a summary of the impact of LFI and other similar deferred compensation arrangements on “compensation and benefits” expense within the accompanying condensed consolidated statements of operations for the three month and six month periods ended June 30, 2023 and 2022:
+Added: Balance, September 30, 2023 $ 146,045 $ 340,583
+Added: The amortization of the prepaid compensation asset will generally be recognized over a weighted average period of approximately 0.9 years subsequent to September 30, 2023.
+Added: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
+Added: (dollars in thousands, except for per share data, unless otherwise noted)
+Added: The following is a summary of the impact of LFI and other similar deferred compensation arrangements on “compensation and benefits” expense within the accompanying condensed consolidated statements of operations for the three month and nine month periods ended September 30, 2023 and 2022:
Three Months Ended
−Removed: June 30, Six Months Ended
+Added: September 30, Nine Months Ended
+Added: September 30,
2023 2022 2023 2022
−Removed: Amortization, net of forfeitures $ 57,558 $ 47,629 $ 92,086 $ 83,254
+Added: Amortization and the impact of forfeitures $ 41,368 $ 41,956 $ 133,454 $ 125,210
Change in the fair value of underlying investments ( 10,598 ) ( 16,180 ) 15,530 ( 65,601 )
8 unchanged sentences
Management also evaluates from time to time whether to make voluntary contributions to the plans.
−Removed: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
−Removed: (dollars in thousands, except for per share data, unless otherwise noted)
−Removed: The following table summarizes the components of net periodic benefit cost (credit) related to the Company’s pension plans for the three month and six month periods ended June 30, 2023 and 2022:
+Added: The following table summarizes the components of net periodic benefit cost (credit) related to the Company’s pension plans for the three month and nine month periods ended September 30, 2023 and 2022:
Pension Plans
−Removed: Three Months Ended June 30,
+Added: Three Months Ended September 30,
Components of Net Periodic Benefit Cost (Credit):
7 unchanged sentences
Net periodic benefit cost (credit) $ 2,073 $ ( 1,275 )
+Added: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
+Added: (dollars in thousands, except for per share data, unless otherwise noted)
Pension Plans
−Removed: Six Months Ended June 30,
+Added: Nine Months Ended September 30,
Components of Net Periodic Benefit Cost (Credit):
7 unchanged sentences
Net periodic benefit cost (credit) $ 5,470 $ ( 4,995 )
−Removed: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
−Removed: (dollars in thousands, except for per share data, unless otherwise noted)
COST-SAVING INITIATIVES
−Removed: The Company is conducting firm-wide cost-saving initiatives including closing certain offices over the course of 2023.
−Removed: Expenses associated with the cost-saving initiatives for the three month and six month periods ended June 30, 2023 consisted of the following:
−Removed: Three Months Ended June 30, 2023
+Added: The Company is conducting firm-wide cost-saving initiatives over the course of 2023.
+Added: Expenses and losses associated with the cost-saving initiatives for the three month and nine month periods ended September 30, 2023 consisted of the following:
+Added: Three Months Ended September 30, 2023
Financial Advisory Asset Management Corporate Total
Severance and other employee
−Removed: termination costs (included
+Added: termination expenses (included
in "compensation and benefits"
3 unchanged sentences
information services") 56 515 - 571
+Added: Foreign exchange related losses
+Added: associated with closing
+Added: of certain offices (included in
+Added: "revenue-other") 2,164 - 2,483 4,647
Other 1,478 28 42 1,548
Total $ 3,677 $ 4,733 $ 7,297 $ 15,707
−Removed: Six Months Ended June 30, 2023
+Added: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
+Added: (dollars in thousands, except for per share data, unless otherwise noted)
+Added: Nine Months Ended September 30, 2023
Financial Advisory Asset Management Corporate Total
Severance and other employee
−Removed: termination costs (included
+Added: termination expenses (included
in "compensation and benefits"
3 unchanged sentences
information services") 144 7,812 - 7,956
+Added: Foreign exchange related losses
+Added: associated with closing
+Added: of certain offices (included in
+Added: "revenue-other") 2,164 - 2,483 4,647
Other 2,000 308 1,952 4,260
Total $ 94,330 $ 53,078 $ 35,744 $ 183,152
−Removed: Activity related to the obligations pursuant to the cost-saving initiatives during the six month period ended June 30, 2023 was as follows:
+Added: Activity related to the obligations pursuant to the cost-saving initiatives during the nine month period ended September 30, 2023 was as follows:
Accrued Compensation and Benefits Other Total
2 unchanged sentences
Noncash expenses (a) 31,073 10,726 41,799
−Removed: Payments 46,052 1,535 47,587
−Removed: Balance, June 30, 2023 $ 82,815 $ 1,072 $ 83,887
+Added: Payments and settlements 73,511 4,834 78,345
+Added: Balance, September 30, 2023 $ 61,705 $ 1,303 $ 63,008
___________________________________
(a) Noncash expenses reflected in “accrued compensation and benefits” activity principally represents accelerated amortization of deferred incentive compensation awards.
−Removed: Noncash expenses reflected in “other” activity principally relates to technology asset impairments.
−Removed: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
−Removed: (dollars in thousands, except for per share data, unless otherwise noted)
+Added: Noncash expenses reflected in “other” activity principally relates to technology asset impairments and certain foreign exchange related losses.
Lazard Ltd, through its subsidiaries, is subject to U.S.
6 unchanged sentences
Lazard Group is also subject to Unincorporated Business Tax (“UBT”) attributable to its operations apportioned to New York City.
−Removed: The Company recorded an income tax provision (benefit) of $ 10,303 and $( 11,422 ) for the three month and six month periods ended June 30, 2023, respectively, and income tax provisions of $ 34,187 and $ 72,940 for the three month and six month periods ended June 30, 2022, respectively, representing effective tax rates of ( 9.4 )%, 7.8 %, 27.2 % and 25.5 %, respectively.
+Added: The Company recorded income tax benefits of $ 11,631 and $ 23,053 for the three month and nine month periods ended September 30, 2023, respectively, and income tax provisions of $ 35,350 and $ 108,290 for the three month and nine month periods ended September 30, 2022, respectively, representing effective tax rates of 239.5 %, 15.2 %, 22.4 % and 24.4 %, respectively.
The difference between the U.S.
2 unchanged sentences
income taxes, (iv) change in the U.S.
+Added: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
+Added: (dollars in thousands, except for per share data, unless otherwise noted)
federal valuation allowance affecting the provision for income taxes and (v) U.S.
4 unchanged sentences
GAAP to treat as participating securities and therefore the Company is required to utilize the “two-class” method of computing basic and diluted net income per share.
−Removed: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
−Removed: (dollars in thousands, except for per share data, unless otherwise noted)
−Removed: The Company’s basic and diluted net income (loss) per share calculations using the “two-class” method for the three month and six month periods ended June 30, 2023 and 2022 are presented below:
+Added: The Company’s basic and diluted net income (loss) per share calculations using the “two-class” method for the three month and nine month periods ended September 30, 2023 and 2022 are presented below:
Three Months Ended
−Removed: June 30, Six Months Ended
+Added: September 30, Nine Months Ended
+Added: September 30,
2023 2022 2023 2022
14 unchanged sentences
___________________________________
−Removed: (a) The weighted average number of incremental shares of common stock issuable from share-based incentive compensation for the three month and six month periods ended June 30, 2023 of 3,427,886 and 4,737,193 , respectively, that could be potentially dilutive, have been excluded from the computation of diluted net loss per share as the effect would be antidilutive .
+Added: (a) The aggregate weighted average number of incremental shares of common stock issuable from RSUs, PRSUs and profits interest participation rights for the nine month period ended September 30, 2023 of 4,785,903 , that could be potentially dilutive in future periods, have been excluded from the computation of diluted net loss per share as the effect would be antidilutive in the current periods.
RELATED PARTIES
1 unchanged sentence
The Company serves as an investment advisor for certain affiliated investment companies and fund entities and receives management fees and, for the alternative investment funds, performance-based incentive fees for providing such services.
−Removed: Investment advisory fees relating to such services were $ 135,847 and $ 269,370 for the three month and six month periods ended June 30, 2023, respectively, and $ 134,342 and $ 298,713 for the three month and six month periods ended June 30, 2022, respectively, and are included in “asset management fees” on the condensed consolidated statements of operations.
−Removed: Of such amounts, $ 51,721 and $ 57,283 remained as receivables at June 30, 2023 and December 31, 2022, respectively, and are included in “fees receivable” on the condensed consolidated statements of financial condition.
−Removed: Tax Receivable Agreement
−Removed: The Second Amended and Restated Tax Receivable Agreement, dated as of October 26, 2015 (the “TRA”), between Lazard and LTBP Trust, a Delaware statutory trust (the “Trust”), provides for the payment by our subsidiaries to
+Added: Investment advisory fees relating to such services were $ 135,899 and $ 405,269 for the three month and nine
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(dollars in thousands, except for per share data, unless otherwise noted)
−Removed: the Trust of (i) approximately 45 % of the amount of cash savings, if any, in U.S.
+Added: month periods ended September 30, 2023, respectively, and $ 159,749 and $ 458,462 for the three month and nine month periods ended September 30, 2022, respectively, and are included in “asset management fees” on the condensed consolidated statements of operations.
+Added: Of such amounts, $ 57,040 and $ 57,283 remained as receivables at September 30, 2023 and December 31, 2022, respectively, and are included in “fees receivable” on the condensed consolidated statements of financial condition.
+Added: Tax Receivable Agreement
+Added: The Second Amended and Restated Tax Receivable Agreement, dated as of October 26, 2015 (the “TRA”), between Lazard and LTBP Trust, a Delaware statutory trust (the “Trust”), provides for the payment by our subsidiaries to the Trust of (i) approximately 45 % of the amount of cash savings, if any, in U.S.
federal, state and local income tax or franchise tax that we actually realize as a result of the increases in the tax basis of certain assets and of certain other tax benefits related to the TRA, and (ii) an amount that we currently expect will equal 85 % of the cash tax savings that may arise from tax basis increases attributable to payments under the TRA.
9 unchanged sentences
Pursuant to the periodic revaluation of the TRA liability and the assumptions reflected in the estimate, the revaluation had the effect of reducing the estimated liability under the TRA.
−Removed: As a result, the Company recorded a “benefit pursuant to tax receivable agreement” of $ 40,435 on the condensed consolidated statement of operations for the six month period ended June 30, 2023.
−Removed: In addition, the Company made a payment under the TRA in the six months ended June 30, 2023 of $ 32,208 .
−Removed: The cumulative liability relating to our obligations under the TRA as of June 30, 2023 and December 31, 2022 was $ 118,546 and $ 191,189 , respectively, and is recorded in “tax receivable agreement obligation” on the condensed consolidated statements of financial condition.
+Added: As a result, the Company recorded a “benefit pursuant to tax receivable agreement” of $ 40,435 on the condensed consolidated statement of operations for the nine month period ended September 30, 2023.
+Added: In addition, the Company made a payment under the TRA in the nine months ended September 30, 2023 of $ 32,208 .
+Added: The cumulative liability relating to our obligations under the TRA as of September 30, 2023 and December 31, 2022 was $ 118,546 and $ 191,189 , respectively, and is recorded in “tax receivable agreement obligation” on the condensed consolidated statements of financial condition.
See Note 11 for information regarding related party transactions pertaining to shares repurchased from certain of our executive officers.
4 unchanged sentences
In addition, the ratio of aggregate indebtedness (as defined) to net capital may not exceed 15:1.
−Removed: At June 30, 2023, LFNY’s regulatory net capital was $ 39,311 , which exceeded the minimum requirement by $ 32,662 .
−Removed: LFNY’s aggregate indebtedness to net capital ratio was 2.54 :1 as of June 30, 2023.
+Added: At September 30,
+Added: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
+Added: (dollars in thousands, except for per share data, unless otherwise noted)
+Added: 2023, LFNY’s regulatory net capital was $ 73,105 , which exceeded the minimum requirement by $ 69,493 .
+Added: LFNY’s aggregate indebtedness to net capital ratio was 0.74 :1 as of September 30, 2023.
subsidiaries of the Company, including LCL, Lazard Fund Managers Limited and Lazard Asset Management Limited (collectively, the “U.K.
Subsidiaries”) are regulated by the Financial Conduct Authority.
−Removed: At June 30, 2023, the aggregate regulatory net capital of the U.K.
+Added: At September 30, 2023, the aggregate regulatory net capital of the U.K.
Subsidiaries was $ 174,572 , which exceeded the minimum requirement by $ 111,142 .
−Removed: CFLF, under which asset management and commercial banking activities are carried out in France, is subject to regulation by the Autorité de Contrôle Prudentiel et de Résolution (“ACPR”) for its banking activities conducted through
−Removed: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
−Removed: (dollars in thousands, except for per share data, unless otherwise noted)
−Removed: its subsidiary, LFB.
+Added: CFLF, under which asset management and commercial banking activities are carried out in France, is subject to regulation by the Autorité de Contrôle Prudentiel et de Résolution (“ACPR”) for its banking activities conducted through its subsidiary, LFB.
LFB, as a registered bank, is engaged primarily in commercial and private banking services for clients and funds managed by LFG (asset management) and other clients, and asset-liability management.
The investment services activities exercised through LFB and other subsidiaries of CFLF, primarily LFG, also are subject to regulation and supervision by the Autorité des Marchés Financiers.
−Removed: At March 31, 2023, the consolidated regulatory net capital of CFLF was $ 154,250 , which exceeded the minimum requirement set for regulatory capital levels by $ 73,195 .
+Added: At June 30, 2023, the consolidated regulatory net capital of CFLF was $ 154,143 , which exceeded the minimum requirement set for regulatory capital levels by $ 68,939 .
In addition, pursuant to the consolidated supervision rules in the European Union, LFB, in particular, as a French credit institution, is required to be supervised by a regulatory body, either in the U.S.
2 unchanged sentences
Under this supervision, the combined European regulated group is required to comply with minimum requirements for regulatory net capital to be reported on a quarterly basis and satisfy periodic financial and other reporting obligations.
−Removed: At March 31, 2023, the regulatory net capital of the combined European regulated group was $ 179,474 , which exceeded the minimum requirement set for regulatory capital levels by $ 89,649 .
+Added: At June 30, 2023, the regulatory net capital of the combined European regulated group was $ 180,261 , which exceeded the minimum requirement set for regulatory capital levels by $ 86,449 .
Additionally, the combined European regulated group, together with our European Financial Advisory entities, is required to perform an annual risk assessment and provide certain other information on a periodic basis, including financial reports and information relating to financial performance, balance sheet data and capital structure.
1 unchanged sentence
subsidiaries are subject to various capital adequacy requirements promulgated by various regulatory and exchange authorities in the countries in which they operate.
−Removed: At June 30, 2023, for those subsidiaries with regulatory capital requirements, their aggregate net capital was $ 154,896 , which exceeded the minimum required capital by $ 120,690 .
−Removed: At June 30, 2023, each of these subsidiaries individually was in compliance with its regulatory capital requirements.
+Added: At September 30, 2023, for those subsidiaries with regulatory capital requirements, their aggregate net capital was $ 141,320 , which exceeded the minimum required capital by $ 114,703 .
+Added: At September 30, 2023, each of these subsidiaries individually was in compliance with its regulatory capital requirements.
SEGMENT INFORMATION
3 unchanged sentences
In addition, as described in Note 1, the Company records selected other activities in its Corporate segment.
−Removed: The Company’s segment information for the three month and six month periods ended June 30, 2023 and 2022 is prepared using the following methodology:
+Added: The Company’s segment information for the three month and nine month periods ended September 30, 2023 and 2022 is prepared using the following methodology:
• Revenue and expenses directly associated with each segment are included in determining operating income.
1 unchanged sentence
• Segment assets are based on those directly associated with each segment, and include an allocation of certain assets relating to various segments, based on the most relevant measures applicable, including headcount, square footage and other factors.
+Added: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
+Added: (dollars in thousands, except for per share data, unless otherwise noted)
The Company records other revenue, interest income and interest expense among the various segments based on the segment in which the underlying asset or liability is reported.
1 unchanged sentence
Such administrative services include, but are not limited to, accounting, tax, human resources, legal, facilities management and senior management activities.
−Removed: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
−Removed: (dollars in thousands, except for per share data, unless otherwise noted)
Management evaluates segment results based on net revenue and operating income (loss) and believes that the following information provides a reasonable representation of each segment’s contribution with respect to net revenue, operating income (loss) and total assets:
Three Months Ended
−Removed: June 30, Six Months Ended
+Added: September 30, Nine Months Ended
+Added: September 30,
2023 2022 2023 2022
11 unchanged sentences
Operating Income (Loss) $ ( 4,857 ) $ 158,142 $ ( 151,854 ) $ 443,708
−Removed: June 30, 2023 December 31, 2022
+Added: September 30, 2023 December 31, 2022
Financial Advisory $ 1,036,825 $ 1,099,921
5 unchanged sentences
CONSOLIDATED VIEs
−Removed: The Company’s consolidated VIEs as of June 30, 2023 and December 31, 2022 include LGAC (see Note 1) and certain funds (“LFI Consolidated Funds”) that were established for the benefit of employees participating in the Company’s existing LFI deferred compensation arrangement.
+Added: The Company’s consolidated VIEs as of September 30, 2023 and December 31, 2022 include LGAC (see Note 1) and certain funds (“LFI Consolidated Funds”) that were established for the benefit of employees participating in the Company’s existing LFI deferred compensation arrangement.
Lazard invests in these funds and is the investment manager and is therefore deemed to have both the power to direct the most significant activities of the funds and the right to receive benefits (or the obligation to absorb losses) that could potentially be significant to these funds.
−Removed: The assets of LFI Consolidated Funds, except as it relates to $ 130,081 and $ 115,666 of LFI held by Lazard Group as of June 30, 2023 and December 31, 2022, respectively, can only be used to settle the obligations of LFI Consolidated Funds.
−Removed: The Company’s consolidated VIE assets and liabilities for LFI Consolidated Funds as reflected in the condensed consolidated statements of financial condition consist of the following at June 30, 2023 and December 31, 2022.
−Removed: June 30, 2023 December 31, 2022
+Added: The assets of LFI Consolidated Funds, except as it relates to $ 112,773 and $ 115,666 of LFI held by Lazard Group as of September 30, 2023 and December 31, 2022, respectively, can only be used to settle the obligations of LFI Consolidated Funds.
+Added: The Company’s consolidated VIE assets and liabilities for LFI Consolidated Funds as reflected in the condensed consolidated statements of financial condition consist of the following at September 30, 2023 and December 31, 2022.
+Added: September 30, 2023 December 31, 2022
Cash and cash equivalents $ 3,224 $ 3,644
7 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.