Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the Registrant has submitted electronically ~~and posted on its corporate Website, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit ~~and post~~ such files). Yes ☒ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. ~~(Check one):~~

If the Registrant is an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of October ~~20, 2017,~~21, 2022, there were ~~129,766,091~~112,766,091 shares of the Registrant’s ~~Class A~~ common stock outstanding (including ~~9,820,657~~26,850,692 shares held by subsidiaries).

When we use the terms “Lazard”, “we”, “us”, “our” and “the Company”, we mean Lazard Ltd, a company incorporated under the laws of Bermuda, and its subsidiaries, including Lazard Group LLC, a Delaware limited liability company (“Lazard Group”), that is the current holding company for our businesses. Lazard Ltd’s primary operating asset is its indirect ownership as of September 30, ~~2017~~2022 of all of the common membership interests in Lazard Group and its controlling interest in Lazard Group. When we use the term “common stock”, we mean Class A common stock of Lazard Ltd, the only class of common stock of Lazard outstanding.

Item 1.

Financial Statements (Unaudited)

FOR THE THREE MONTH AND NINE MONTH PERIODS ENDED SEPTEMBER 30, ~~2017~~2022 AND ~~2016~~2021

	Three Months Ended				Nine Months Ended				Three Months Ended				Nine Months Ended
	September 30,				September 30,				September 30,				September 30,
	2017		2016		2017		2016		2022		2021		2022			2021
REVENUE
Investment banking and other advisory fees	$	305,530	$	343,154	$	1,050,721	$	894,906	$	454,255	$	384,821	$	1,249,085		$	1,177,813
Asset management fees		301,719		254,551		868,522		729,679		279,040		323,747		863,103			997,162
Interest income		1,630		1,128		4,893		3,668		8,148		1,276		13,971			3,910
Other		29,252		22,269		81,361		49,607		4,988		27,963		(2,926	)		82,090
Total revenue		638,131		621,102		2,005,497		1,677,860		746,431		737,807		2,123,233			2,260,975
Interest expense		13,272		12,194		39,994		36,054		19,687		20,378		62,051			60,302
Net revenue		624,859		608,908		1,965,503		1,641,806		726,744		717,429		2,061,182			2,200,673
OPERATING EXPENSES
Compensation and benefits		361,787		353,756		1,138,200		959,276		420,937		419,627		1,181,608			1,336,091
Occupancy and equipment		29,156		26,973		87,468		81,143		30,696		31,015		91,344			95,638
Marketing and business development		19,798		16,927		63,577		60,492		19,633		9,922		56,429			25,905
Technology and information services		31,373		24,179		87,429		71,406		44,579		37,559		124,577			107,003
Professional services		11,005		10,870		33,701		31,877		15,665		16,698		48,243			51,642
Fund administration and outsourced services		18,325		17,097		52,576		46,427		27,110		34,137		85,364			94,718
Amortization and other acquisition-related costs		172		863		5,003		1,837
Amortization of intangible assets related to acquisitions										15		15		45			45
Other		9,031		9,251		30,639		28,743		9,967		13,497		29,864			34,121
Total operating expenses		480,647		459,916		1,498,593		1,281,201		568,602		562,470		1,617,474			1,745,163
OPERATING INCOME		144,212		148,992		466,910		360,605		158,142		154,959		443,708			455,510
Provision for income taxes		32,742		36,374		124,109		95,900		35,350		39,446		108,290			124,255
NET INCOME		111,470		112,618		342,801		264,705		122,792		115,513		335,418			331,255
LESS - NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS		2,260		82		5,660		4,989		16,995		8,304		20,265			13,568
NET INCOME ATTRIBUTABLE TO LAZARD LTD	$	109,210	$	112,536	$	337,141	$	259,716	$	105,797	$	107,209	$	315,153		$	317,687
ATTRIBUTABLE TO LAZARD LTD CLASS A COMMON STOCKHOLDERS:
WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING:
Basic		121,243,598		124,408,884		122,142,303		125,303,758		93,275,631		105,415,743		98,161,027			106,484,652
Diluted		132,393,664		132,320,855		132,407,551		132,517,887		98,865,156		112,994,037		103,268,378			114,139,936
NET INCOME PER SHARE OF COMMON STOCK:
Basic	$	0.90	$	0.90	$	2.76	$	2.07	$	1.11	$	1.00	$	3.16		$	2.94
Diluted	$	0.82	$	0.85	$	2.55	$	1.96	$	1.06	$	0.94	$	3.03		$	2.78
DIVIDENDS DECLARED PER SHARE OF COMMON STOCK	$	0.41	$	0.38	$	2.40	$	2.31

FOR THE THREE MONTH AND NINE MONTH PERIODS ENDED SEPTEMBER 30, ~~2017~~2022 AND ~~2016~~2021

	Nine Months Ended						Nine Months Ended
	September 30,						September 30,
	2017			2016			2022			2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	342,801		$	264,705		$	335,418		$	331,255
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization of property		23,209			24,586			31,895			28,315
Noncash lease expense								46,046			52,509
Currency translation adjustment reclassification								265			23,630
Amortization of deferred expenses and share-based incentive compensation		285,162			276,714			333,100			325,645
Amortization and other acquisition-related costs		5,003			1,837
Amortization of intangible assets related to acquisitions								45			45
Deferred tax provision		50,699			49,184			55,725			53,766
(Increase) decrease in operating assets:
Deposits with banks and short-term investments		(171,734	)		(135,152	)
Cash deposited with clearing organizations and other segregated cash		(5,138	)		115
(Increase) decrease in operating assets and increase (decrease) in operating liabilities:
Receivables-net		112,499			(43,593	)		43,233			26,453
Investments		27,927			79,698			236,275			(360,959	)
Other assets		(71,053	)		(61,778	)		(72,312	)		(33,946	)
Increase (decrease) in operating liabilities:
Deposits and other payables		164,784			70,165
Accrued compensation and benefits and other liabilities		(86,097	)		(227,356	)		(490,029	)		(33,489	)
Net cash provided by operating activities		678,062			299,125			519,661			413,224
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property		(15,463	)		(22,070	)		(24,986	)		(25,290	)
Disposals of property		283			866			272			699
Other investing activities								(7,500	)		-
Net cash used in investing activities		(15,180	)		(21,204	)		(32,214	)		(24,591	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from:
Contributions from noncontrolling interests		-			93			388			413
Excess tax benefits from share-based incentive compensation		-			2,343
Other financing activities		-			30,518
LGAC IPO								-			575,000
Customer deposits, net								281,360			295,837
Payments for:
Capital lease obligations		(7,329	)		(1,234	)
Distributions to noncontrolling interests		(3,059	)		(966	)		(27,062	)		(7,731	)
Payments under tax receivable agreement		(789	)		(10,086	)		(21,035	)		(10,215	)
Payments of LGAC IPO underwriting fees and other offering costs								-			(9,352	)
Purchase of Class A common stock		(252,538	)		(228,865	)		(612,175	)		(286,193	)
Class A common stock dividends		(292,293	)		(289,326	)		(138,914	)		(147,593	)
Settlement of vested share-based incentive compensation		(67,384	)		(55,562	)
Settlement of share-based incentive compensation in satisfaction of tax withholding requirements								(61,257	)		(67,525	)
LFI Consolidated Funds redemptions								(11,296	)		-
Other financing activities		(10,073	)		(3,080	)		(10,841	)		(21,369	)
Net cash used in financing activities		(633,465	)		(556,165	)
EFFECT OF EXCHANGE RATE CHANGES ON CASH		65,808			48
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		95,225			(278,196	)
CASH AND CASH EQUIVALENTS—January 1		1,158,785			1,132,083
CASH AND CASH EQUIVALENTS—September 30	$	1,254,010		$	853,887
Net cash provided by (used in) financing activities								(600,832	)		321,272
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS AND RESTRICTED CASH								(353,914	)		(117,706	)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH								(467,299	)		592,199
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH— January 1								3,430,014			2,568,827
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH— September 30							$	2,962,715		$	3,161,026

RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH WITHIN THE CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION:
							September 30,			December 31,
							2022			2021
Cash and cash equivalents							$	1,000,102		$	1,465,022
Deposits with banks and short-term investments								1,341,514			1,347,544
Restricted cash								621,099			617,448
TOTAL CASH AND CASH EQUIVALENTS AND RESTRICTED CASH							$	2,962,715		$	3,430,014

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY AND REDEEMABLE NONCONTROLLING INTERESTS

					Additional						Accumulated Other Comprehensive			Class A Common Stock						Total Lazard Ltd						Total			Redeemable
	Common Stock				Paid-In-			Retained			Income (Loss),			Held By Subsidiaries						Stockholders’			Noncontrolling			Stockholders’			Noncontrolling
	Shares		$		Capital			Earnings			Net of Tax			Shares			$			Equity			Interests			Equity			Interests
Balance - July 1, 2021		112,766,091	$	1,128	$	58,000		$	1,348,121		$	(226,648	)		8,705,297		$	(353,718	)	$	826,883		$	104,972		$	931,855		$	575,000
Comprehensive income (loss):
Net income									107,209												107,209			8,304			115,513
Other comprehensive loss - net of tax												(19,886	)								(19,886	)		(1	)		(19,887	)
Amortization of share-based incentive compensation						50,663															50,663			1,229			51,892
Dividend equivalents						4,214			(4,507	)											(293	)		(1,731	)		(2,024	)
Class A common stock dividends ($0.47 per share)									(48,629	)											(48,629	)					(48,629	)
Purchase of Class A common stock															1,139,888			(52,448	)		(52,448	)					(52,448	)
Delivery of Class A common stock in connection with share-based incentive compensation and related tax expense of $381						(18,740	)								(400,684	)		16,426			(2,314	)					(2,314	)
Business acquisitions and related equity transactions:
Delivery of Class A common stock						(292	)								(6,084	)		292			-						-
Dividend equivalents						3			(3	)											-						-
Distributions to noncontrolling interests, net																					-			(4,897	)		(4,897	)
LFI Consolidated Funds																					-			8,653			8,653
Change in redemption value of redeemable noncontrolling interests						16,622															16,622			(16,622	)		-			-
Balance - September 30, 2021		112,766,091	$	1,128	$	110,470		$	1,402,191		$	(246,534	)		9,438,417		$	(389,448	)	$	877,807		$	99,907		$	977,714		$	575,000

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY AND REDEEMABLE NONCONTROLLING INTERESTS

Series A

Additional

Accumulated
Other
Comprehensive

Class A
Common Stock

Total
Lazard Ltd

Total

Preferred Stock

Common Stock

Paid-In-

Retained

Income (Loss),

Held By Subsidiaries

Stockholders’

Noncontrolling

Stockholders’

Shares

$

Shares

$

Capital

Earnings

Net of Tax

Shares

$

Equity

Interests

Equity

Balance - January 1, 2016

7,921

$
-

129,766,091

$
1,298

$
600,034

$
1,123,728

$
(234,356
)

4,253,381

$
(177,249
)

$
1,313,455

$
53,851

$
1,367,306

Comprehensive income (loss):

Net income

259,716

259,716

4,989

264,705

Other comprehensive loss - net
   of tax

(1,732
)

(1,732
)

(1,732
)
Amortization of share-based incentive
   compensation

213,144

213,144

213,144

Dividend-equivalents

32,849

(35,929
)

(3,080
)

(3,080
)
Class A common stock dividends

(289,326
)

(289,326
)

(289,326
)
Purchase of Class A common stock

6,656,250

(228,865
)

(228,865
)

(228,865
)
Delivery of Class A common stock in
   connection with share-based incentive
   compensation and related tax benefit
   of $6,900

(216,610
)

(4,217,819
)

167,948

(48,662
)

(48,662
)
Business acquisitions and related equity
   transactions:

Delivery of Class A common stock
    and related tax benefit of $12,653

(21,777
)

(913,722
)

34,430

12,653

12,653

Class A common stock issuable
   (including related amortization)

6,313

6,313

6,313

Distributions to noncontrolling interests,
   net

-

(873
)

(873
)
Other

9,559

9,559

9,559

Balance - September 30, 2016

7,921

$
-

129,766,091

$
1,298

$
623,512

$
1,058,189

$
(236,088
)

5,778,090

$
(203,736
)

$
1,243,175

$
57,967

$
1,301,142

					Additional						Accumulated Other Comprehensive			Class A Common Stock						Total Lazard Ltd						Total			Redeemable
	Common Stock				Paid-In-			Retained			Income (Loss),			Held By Subsidiaries						Stockholders’			Noncontrolling			Stockholders’			Noncontrolling
	Shares		$		Capital			Earnings			Net of Tax			Shares			$			Equity			Interests			Equity			Interests
Balance - January 1, 2021		112,766,091	$	1,128	$	135,439		$	1,295,386		$	(238,368	)		7,728,387		$	(281,813	)	$	911,772		$	87,661		$	999,433		$	-
Comprehensive income (loss):
Net income									317,687												317,687			13,568			331,255
Other comprehensive loss - net of tax												(8,166	)								(8,166	)		(1	)		(8,167	)
Amortization of share-based incentive compensation						188,647															188,647			7,132			195,779
Dividend equivalents						14,177			(15,326	)											(1,149	)		(5,193	)		(6,342	)
Class A common stock dividends ($1.41 per share)									(147,593	)											(147,593	)					(147,593	)
Purchase of Class A common stock															6,469,429			(286,193	)		(286,193	)					(286,193	)
Delivery of Class A common stock in connection with share-based incentive compensation and related tax expense of $1,525						(163,821	)		(47,902	)					(3,741,351	)		142,673			(69,050	)					(69,050	)
Business acquisitions and related equity transactions:
Delivery of Class A common stock						(35,885	)								(1,018,048	)		35,885			-						-
Dividend equivalents						61			(61	)											-						-
Distributions to noncontrolling interests, net																					-			(7,318	)		(7,318	)
LFI Consolidated Funds																					-			16,164			16,164
Contribution from redeemable noncontrolling interests, net																					-						-			534,746
Change in redemption value of redeemable noncontrolling interests						(28,148	)														(28,148	)		(12,106	)		(40,254	)		40,254
Balance - September 30, 2021		112,766,091	$	1,128	$	110,470		$	1,402,191		$	(246,534	)		9,438,417		$	(389,448	)	$	877,807		$	99,907		$	977,714		$	575,000

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY AND REDEEMABLE NONCONTROLLING INTERESTS

					Additional							Accumulated Other Comprehensive			Class A Common Stock						Total Lazard Ltd						Total			Redeemable
	Common Stock				Paid-In-			Retained			��	Income (Loss),			Held By Subsidiaries						Stockholders’			Noncontrolling			Stockholders’			Noncontrolling
	Shares		$		Capital			Earnings				Net of Tax			Shares			$			Equity			Interests			Equity			Interests
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):
Net income									105,797													105,797			13,253			119,050			3,742
Other comprehensive loss - net of tax													(44,353	)								(44,353	)		-			(44,353	)
Amortization of share-based incentive compensation						70,281																70,281			4,635			74,916
Dividend equivalents						5,100			(5,343	)												(243	)		(1,823	)		(2,066	)
Class A common stock dividends ($0.50 per share)									(46,238	)												(46,238	)					(46,238	)
Purchase of Class A common stock																6,650,998			(236,990	)		(236,990	)					(236,990	)
Delivery of Class A common stock in connection with share-based incentive compensation and related tax benefit of $346						(19,685	)									(464,482	)		17,513			(2,172	)		-			(2,172	)
Distributions to noncontrolling interests, net																						-			(17,420	)		(17,420	)
LFI Consolidated Funds																						-			6,702			6,702
Change in redemption value of redeemable noncontrolling interests						670																670			287			957			(957	)
Other						(1,538	)									7,661			(240	)		(1,778	)		(241	)		(2,019	)
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

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY AND REDEEMABLE NONCONTROLLING INTERESTS

					Additional						Accumulated Other Comprehensive			Class A Common Stock						Total Lazard Ltd						Total			Redeemable
	Common Stock				Paid-In-			Retained			Income (Loss),			Held By Subsidiaries						Stockholders’			Noncontrolling			Stockholders’			Noncontrolling
	Shares		$		Capital			Earnings			Net of Tax			Shares			$			Equity			Interests			Equity			Interests
Balance - January 1, 2022		112,766,091	$	1,128	$	144,729		$	1,560,636		$	(223,847	)		12,046,140		$	(507,426	)	$	975,220		$	102,744		$	1,077,964		$	575,000
Comprehensive income (loss):
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	)
Amortization of share-based incentive compensation						188,529															188,529			12,573			201,102
Dividend equivalents						13,189			(13,919	)											(730	)		(8,074	)		(8,804	)
Class A common stock dividends ($1.44 per share)									(138,914	)											(138,914	)					(138,914	)
Purchase of Class A common stock															17,249,880			(612,175	)		(612,175	)					(612,175	)
Delivery of Class A common stock in connection with share-based incentive compensation and related tax benefit of $6,604						(222,190	)		(40,558	)					(4,869,445	)		204,587			(58,161	)		3,508			(54,653	)
Distributions to noncontrolling interests, net																					-			(26,674	)		(26,674	)
LFI Consolidated Funds																					-			20,110			20,110
Change in redemption value of redeemable noncontrolling interests						4,027															4,027			1,726			5,753			(5,753	)
Other						(1,538	)								7,661			(240	)		(1,778	)		(241	)		(2,019	)
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

Additional

Accumulated
Other
Comprehensive

Class A
Common Stock

Total
Lazard Ltd

Total

Common Stock

Paid-In-

Retained

Income (Loss),

Held By Subsidiaries

Stockholders’

Noncontrolling

Stockholders’

Shares

$

Capital

Earnings

Net of Tax

Shares

$

Equity

Interests

Equity

Balance - January 1, 2017

129,766,091

$
1,298

$
688,231

$
1,134,186

$
(314,222
)

7,628,786

$
(273,506
)

$
1,235,987

$
57,826

$
1,293,813

Adjustment for the cumulative effect on prior
   years from the adoption of new accounting
   guidance related to share-based incentive
   compensation

81,544

81,544

81,544

Balance, as adjusted - January 1, 2017

129,766,091

1,298

688,231

1,215,730

(314,222
)

7,628,786

(273,506
)

1,317,531

57,826

1,375,357

Comprehensive income:

Net income

337,141

337,141

5,660

342,801

Other comprehensive income - net of tax

52,549

52,549

2

52,551

Amortization of share-based incentive
   compensation

220,648

220,648

220,648

Dividend-equivalents

36,482

(41,479
)

(4,997
)

(4,997
)
Class A common stock dividends

(292,293
)

(292,293
)

(292,293
)
Purchase of Class A common stock

5,838,520

(252,538
)

(252,538
)

(252,538
)
Delivery of Class A common stock in
   connection with share-based incentive
   compensation and related tax expense
   of $4,819

(212,271
)

(3,772,169
)

140,068

(72,203
)

(72,203
)
Business acquisitions and related equity
   transactions:

Delivery of Class A common stock
    and related tax benefit of $832

(472
)

(47,474
)

1,909

1,437

1,437

Class A common stock issuable
   (including related amortization)

363

363

363

Distributions to noncontrolling interests, net

-

(3,059
)

(3,059
)
Other

-

204

204

204

408

Balance - September 30, 2017

129,766,091

$
1,298

$
732,981

$
1,219,303

$
(261,673
)

9,647,663

$
(384,067
)

$
1,307,842

$
60,633

$
1,368,475

1.	ORGANIZATION AND BASIS OF PRESENTATION

Lazard Ltd, a Bermuda holding company, and its subsidiaries (collectively referred to as “Lazard Ltd”, “Lazard”, “we” or the “Company”), including Lazard Ltd’s indirect investment in Lazard Group LLC, a Delaware limited liability company (collectively referred to, together with its subsidiaries, as “Lazard Group”), is one of the world’s preeminent financial advisory and asset management firms ~~and has long specialized~~that specializes in crafting solutions to the complex financial and strategic challenges of our clients. We serve a diverse set of clients around the world, including corporations, governments, institutions, partnerships and individuals.

Lazard Ltd indirectly held 100% of all outstanding Lazard Group common membership interests as of September 30, ~~2017~~2022 and December 31, ~~2016.~~2021. Lazard Ltd, through its control of the managing members of Lazard Group, controls Lazard Group, which is governed by an Amended and Restated Operating Agreement dated as of ~~October 26, 2015, as amended~~February 4, 2019 (the “Operating Agreement”).

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:

Financial Advisory, which offers corporate, partnership, institutional, government, sovereign and individual clients across the globe a wide array of financial advisory services regarding mergers and acquisitions (“M&A”) and other strategic matters, restructurings, capital structure, capital raising, shareholder advisory, and various other financial matters, and

•

Financial Advisory, which offers corporate, partnership, institutional, government, sovereign and individual clients across the globe a wide array of financial advisory services regarding mergers and acquisitions (“M&A”), restructurings, capital advisory, shareholder advisory, capital raising, sovereign advisory and other strategic advisory matters; and

Asset Management, which offers a broad range of global investment solutions and investment 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.

•

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

In addition, we record selected other activities in our Corporate segment, including management of cash, investments, deferred tax assets, outstanding indebtedness, certain contingent obligations and certain assets and liabilities associated with (i) Lazard Group’s Paris-based subsidiary, Lazard Frères Banque SA (“LFB”), and (ii) a special purpose acquisition company sponsored by an affiliate of the Company, Lazard Growth Acquisition Corp. I (“LGAC”).

The accompanying condensed consolidated financial statements of Lazard Ltd have been prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States of America (“U.S. GAAP”) for complete financial statements and should be read in conjunction with the audited consolidated financial statements and notes thereto included in Lazard Ltd’s Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2021. The accompanying December 31, ~~2016~~2021 unaudited condensed consolidated statement of financial condition data was derived from audited consolidated financial statements, but does not include all disclosures required by U.S. GAAP for annual financial statement purposes. The accompanying condensed consolidated financial statements reflect all adjustments ~~which~~that are, in the opinion of management, necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods presented.

Preparing financial statements requires management to make estimates and assumptions that affect the amounts that are reported in the financial statements and the accompanying disclosures. For example, discretionary compensation and benefits expense for interim periods is accrued based on the year-to-date amount of revenue earned, and an ~~assumed~~estimated annual ratio of compensation and benefits expense to revenue, with the applicable amounts adjusted for certain items. 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.

The consolidated results of operations for the three month and nine month periods ended September 30, ~~2017~~2022 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: Lazard Frères & Co. LLC (“LFNY”), a New York limited liability company, along with its subsidiaries, including Lazard Asset Management LLC and its subsidiaries (collectively referred to as “LAM”); the French limited liability companies Compagnie

Financière Lazard Frères SAS (“CFLF”), along with its subsidiaries, LFB and Lazard Frères Gestion SAS (“LFG”), and Maison Lazard SAS and its subsidiaries; and Lazard & Co., Limited (“LCL”), through Lazard & Co., Holdings Limited (“LCH”), an English private limited company, together with their jointly owned affiliates and subsidiaries.

The Company’s policy is to consolidate entities in which it has a controlling financial interest. The Company consolidates:

~~Voting interest entities (“VOEs”) where the Company holds a majority of the voting interest in such VOEs, and~~

•

Voting interest entities (“VOEs”) where the Company holds a majority of the voting interest in such VOEs and

Variable interest entities (“VIEs”) where the Company is the primary beneficiary having the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and the obligation to absorb losses of, or receive benefits from, the VIE that could be potentially significant to the VIE.

•

When the Company does not have a controlling interest in an entity, but exerts significant influence over such entity’s operating and financial decisions, the Company either (i) applies the equity method of accounting in which it records a proportionate share of the entity’s net earnings or (ii) elects the option to measure its investment at fair value. Intercompany transactions and balances have been eliminated.

~~Certain prior period amounts have been reclassified~~Lazard Growth Acquisition Corp. I

In February 2021, LGAC consummated its $575,000 initial public offering (the “LGAC IPO”). LGAC is a special purpose acquisition company, incorporated as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (a “Business Combination”). LGACo 1 LLC, a Delaware series limited liability company and the Company’s subsidiary, is the sponsor of LGAC. LGAC is considered to ~~conform~~be a VIE. The Company holds a controlling financial interest in LGAC through the sponsor’s ownership of Class B founder shares of LGAC. As a result, both LGAC and the sponsor are consolidated in the Company’s financial statements.

The proceeds from the LGAC IPO of $575,000 are held in a trust account, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the funds in the trust account to the ~~current period presentation, specifically by including capital lease obligations, previously presented separately,~~LGAC shareholders in ~~other liabilities~~connection with the redemption of LGAC’s Class A ordinary shares, subject to certain conditions. The cash held in the trust account is recorded in “Restricted Cash” on the condensed consolidated statements of financial condition.

~~Compensation—Stock Compensation: Improvements to Employee Share-Based Payment Accounting—In March 2016, the Financial Accounting Standards Board (the “FASB”) issued new guidance regarding share-based incentive compensation. The new guidance includes several amendments~~Transaction costs, which ~~affect various aspects~~consisted of ~~the accounting for share-based incentive compensation transactions, including the income tax consequences, estimation~~a net underwriting fee of ~~forfeitures, effect~~$8,500, $20,125 of non-cash deferred underwriting fees (included in “other liabilities” on earnings per share, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The new guidance is effective for annual and interim periods beginning after December 15, 2016. The Company adopted this new guidance on January 1, 2017. The new guidance has since January 1, 2017 affected, and the Company expects that in future periods the new guidance will affect, the provision for income taxes for the delivery of stock under share-based incentive compensation arrangements, as well as the effective tax rate in the relevant periods, which could be material to the condensed consolidated statements of ~~operations~~financial condition) and $852 of other offering costs, were charged against the ~~classification~~gross proceeds of ~~cash flows in~~ the ~~relevant periods. The inclusion~~LGAC IPO, consistent with SEC Staff Accounting Bulletin (SAB) Topic 5.

“Redeemable noncontrolling interests” of ~~excess tax benefits as an operating activity within~~$578,495 associated with the ~~statement of cash flows was adopted on a prospective basis, with prior periods unadjusted. Based~~publicly held LGAC Class A ordinary shares are recorded on the new guidance, the excess tax benefits are no longer included as assumed proceeds in the calculation of earnings per share under the treasury stock method on a prospective basis. Upon adoption of the new guidance, the Company also recorded deferred tax assets of $81,544, net of a valuation allowance of $12,090, for previously unrecognized excess tax benefits (including tax benefits from dividends or dividend equivalents) on share-based incentive compensation arrangements, with an offsetting adjustment to retained earnings. With respect to forfeiture rates, the Company will continue to estimate the number of awards expected to be forfeited, rather than electing the option to account for forfeitures as they occur. See Note 14.

~~Revenue from Contracts with Customers~~—In May 2014, the FASB issued comprehensive new revenue recognition guidance. The guidance requires a company to recognize revenue when it transfers promised services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those services and requires enhanced disclosures. The guidance also changes the accounting for certain contract costs, including whether they may be offset against revenue in theCompany’s condensed consolidated statements of ~~operations. On July 9, 2015,~~financial condition as of September 30, 2022 at redemption value and classified as temporary equity in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from 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. Increases or decreases in the carrying amount of redeemable noncontrolling interests shall be affected by credits or charges to additional paid-in-capital and noncontrolling interests attributable to certain members of LGACo 1 LLC based on pro rata ownership.

The warrants exercisable for LGAC Class A ordinary shares that were issued in connection with the LGAC IPO (the “LGAC Warrants”) meet the definition of a liability under FASB ~~approved the deferral of the effective~~ASC Topic 815 and are classified as derivative liabilities which are remeasured at fair value at each balance sheet date ~~of the new revenue guidance by one year~~until exercised, with changes in fair value reported to annual reporting periods beginning after December 15, 2017. The guidance may be adopted using a full retrospective approach or a modified cumulative effect approach. The Company will adopt the revenue recognition guidance upon its effective date of January 1, 2018 and it intends to apply the modified cumulative effect approach upon transition. The Company’s implementation efforts include the identification of revenue within the scope of the guidance and the evaluation of revenue contracts. earnings. See Note 6.

The Company continues to evaluate the potential impact of the new guidance including (i) the timing of revenue recognition for Financial Advisory fees and (ii) the presentation of certain contract costs. With respect to revenue recognition, the Company is assessing the potential impact of the new guidance on the Company’s recognition of certain M&A Advisory fees (e.g., transaction completion, transaction announcement and retainer fees), including whether the Company’s fulfillment of its performance obligations under M&A Advisory engagement contracts would be deemed to occur over time, or at specific points in time, under the new

2.	REVENUE RECOGNITION

The Company disaggregates revenue based on ~~this particular issue continues to be deliberated by~~its business segment results and believes that the ~~Financial Reporting Executive Committee~~following information provides a reasonable representation of ~~the American Institute of Certified Public Accountants. With respect~~how performance obligations relate to the ~~potential impact~~nature, amount, timing and uncertainty of revenue and cash flows:

(a)

Financial Advisory is comprised of a wide array of financial advisory services regarding M&A advisory, restructuring, capital advisory, shareholder advisory, capital raising, sovereign advisory and other strategic advisory 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. Retainer fees are generally fixed and recognized over the period in which the advisory services are performed. However, transaction announcement and transaction completion fees are variable and subject to constraints, and they are typically not recognized until there is an announcement date or a completion date, respectively, due to the uncertainty associated with those events. Therefore, in any given period, advisory fees recognized for certain transactions will relate to services performed in prior periods. The advisory fees that may be unrecognized as of the end of a reporting period, primarily comprised of fees associated with transaction announcements and transaction completions, generally remain unrecognized due to the uncertainty associated with those events.

(b)

Management fees and other is primarily comprised of management services. The benefits of these management services are transferred to the Company’s clients over time. Consideration for these management services generally includes management fees, which are based on assets under management and recognized over the period in which the management services are performed. The selling or distribution of fund interests is a separate performance obligation within management fees and other, and the benefits of such services are transferred to the Company’s clients at the point in time that such fund interests are sold or distributed.

(c)

Incentive fees is primarily comprised of management services. The benefits of these management services are transferred to the Company’s clients over time. Consideration for these management services is generally variable and includes performance or incentive fees. The fees allocated to these management services that are unrecognized as of the end of the reporting period are generally amounts that are subject to constraints due to the uncertainty associated with performance targets and clawbacks.

In addition to the ~~new~~above, contracts with clients include trade-based commission income, which is recognized at the point in time of execution and presented within other revenue. Such income may be earned by providing trade facilitation, execution, clearance and settlement, custody, and trade administration services to clients.

With regard to the disclosure requirement for remaining performance obligations, the Company elected the practical expedients permitted in the guidance onto (i) exclude contracts with a duration of one year or less; and (ii) exclude variable consideration, such as transaction completion and transaction announcement fees, that is allocated entirely to unsatisfied performance obligations. Excluded variable consideration typically relates to contracts with a duration of one year or less, and is generally constrained due to uncertainties. Therefore, when applying the practical expedients, amounts related to remaining performance obligations are not material to the Company’s presentation of certain contract costs, the Company anticipates that the new guidance will result in the gross basis of presentation of certain contract costs that are currently presented net of certain items in revenues. The most significant changes identified to date with respect to presentation relate to (a) certain distribution costs within our Asset Management business and (b) certain reimbursable deal costs within our Financial Advisory business, both of which are currently presented net against revenues and will be presented as expenses on a gross basis under the new guidance. The Company is currently evaluating the impact of this presentation.financial statements.

~~Classification of Certain Cash Receipts and Cash Payments—~~In August and November 2016, the FASB issued updated guidance which clarifies how a company should classify certain cash receipts and cash payments on the statement of cash flows and clarifies that restricted cash should be included in the total of cash and cash equivalents on the statement of cash flows. The new guidance for both updates is effective for annual and interim periods beginning after December 15, 2017 and early adoption is permitted. The new guidance is to be applied on a retrospective basis. The Company is currently evaluating the new guidance.

~~Clarifying the Definition of a Business—~~In January 2017, the FASB issued updated guidance to clarify the definition of a business within the context of business combinations. The updated guidance requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This updated guidance is expected to reduce the number of transactions that need to be further evaluated as business combinations. If further evaluation is necessary, the updated guidance will require that a business set include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output. The updated guidance will remove the evaluation of whether a market participant could replace missing elements. The new guidance is effective for annual and interim periods beginning after December 15, 2017 and is to be applied on a prospective basis. The Company is currently evaluating the new guidance.

~~Compensation~~—~~Retirement Benefits~~—~~Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost~~—In March 2016, the FASB issued updated guidance on the presentation of net benefit cost in the statement of operations and the components eligible for capitalization. The new guidance requires that only the service cost component of net periodic pension cost and net periodic postretirement benefit cost be presented with other employee compensation costs in operating expenses. The other components of net benefit cost, including amortization of prior service cost, and gains and losses from settlements and curtailments, are to be included in non-operating expenses. The new guidance also stipulates that only the service cost component of net benefit cost is eligible for capitalization. This new guidance is effective for annual and interim periods beginning after December 15, 2017, with early adoption permitted. The Company is currently evaluating the new guidance.

~~Compensation—Stock Compensation: Scope of Modification Accounting—~~In May 2017, the FASB issued updated guidance on modifications to share-based payment awards. The updated guidance requires entities to account for the effects of a modification to a share-based payment award unless the following are all the same immediately before and after the modification: (i) the fair value of the award, (ii) the vesting conditions of the award, and (iii) the classification of the award as an equity instrument or a liability instrument. This new guidance is effective for annual and interim periods beginning after December 15, 2017, with early adoption permitted. The new guidance is to be applied on a prospective basis. The Company is currently evaluating the new guidance.

~~Leases~~—In February 2016, the FASB issued updated guidance for leases. The guidance requires a lessee to (i) recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, in the statement of financial condition, (ii) recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a generally straight-line basis, and (iii) classify all cash payments within operating activities in the statement of cash flows. The new guidance is effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted. The new guidance is to be applied on a modified retrospective basis. The Company is currently evaluating the new guidance.

~~Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments~~—In June 2016, the FASB issued new guidance regarding the measurement of credit losses on financial instruments. The new guidance replaces the incurred loss impairment methodology in the current guidance with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to determine credit loss estimates. The new guidance is effective for annual and interim periods beginning after December 15, 2019 with early adoption permitted for fiscal years beginning after December 15, 2018. The Company is currently evaluating the new guidance.

~~Intangibles—Goodwill and Other: Simplifying the Test for Goodwill Impairment~~—In January 2017, the FASB issued updated guidance which eliminated Step 2 from the goodwill impairment test. Step 2 is the process of measuring a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. The new guidance~~requires entities to measure a goodwill impairment loss as the amount by which a reporting unit’s carrying value exceeds its fair value, limited to thecarrying amount of~~goodwill. The FASB also eliminated the requirements for entities that have reporting units with zero or negative carrying amounts to perform a qualitative assessment for the goodwill impairment test. Instead, those entities would be required to disclose the amount of goodwill allocated to each reporting unit with a zero or negative carrying amount. The new guidance is effective for interim or annual~~goodwill impairment tests performed in fiscal years beginning after December 15, 2019, with early adoption permitted. The Company is currentlyevaluating the newguidance.~~

3.	RECEIVABLES AND ALLOWANCE FOR DOUBTFUL ACCOUNTS

The Company’s receivables represent fee receivables, amounts due from customers and other receivables.

~~Receivables~~ Where applicable, receivables are stated net of an estimated allowance for doubtful accounts determined in accordance with the current expected credit losses (“CECL”) model, for ~~past due amounts~~general credit risk of the overall portfolio and for specific accounts deemed uncollectible, which may include situations where a fee is in dispute.

Activity in the allowance for doubtful accounts for the three month and nine month periods ended September 30, ~~2017~~2022 and ~~2016~~2021 was as follows:

(a)	The allowance for doubtful accounts balances are substantially all related to M&A and Restructuring fee receivables that include reimbursable expense receivables.

Bad debt expense, net of ~~recoveries~~reversals represents the current period provision of expected credit losses and is included in ~~“investment banking and other advisory fees”~~“operating expenses—other” on the condensed consolidated statements of operations.

~~At September 30, 2017 and December 31, 2016, the Company had receivables past due or deemed uncollectible of $44,372 and $22,212, respectively.~~

Of the Company’s fee receivables at September 30, ~~2017~~2022 and December 31, ~~2016, $64,965~~2021, $103,695 and ~~$76,133,~~$123,189, respectively, represented ~~interest-bearing~~ financing ~~receivables.~~receivables for our Private Capital Advisory fees. Based upon our historical loss experience, the credit quality of the counterparties, and the lack of ~~past due or~~ uncollectible amounts, there was no allowance for doubtful accounts required at those dates related to such receivables.

At September 30, 2022 and December 31, 2021, customers and other receivables included $119,173 and $122,229, respectively, of customer loans, which are fully collateralized and closely monitored for counterparty creditworthiness, with such collateral having a fair value in excess of the carrying amount of the loans as of September 30, 2022 and December 31, 2021.

The aggregate carrying amount of ~~our non-interest bearing~~all other receivables of ~~$486,923~~$517,527 and ~~$562,149~~$560,391 at September 30, ~~2017~~2022 and December 31, ~~2016,~~2021, respectively, approximates fair value.

The Company’s investments and securities sold, not yet purchased, consist of the following at September 30, ~~2017~~2022 and December 31, ~~2016:~~2021:

(a)

Interests in alternative investment funds, debt funds and equity funds include investments with fair values of ~~$13,850, $48,451~~$23,525, $137,949 and ~~$124,570,~~$248,488, respectively, at September 30, ~~2017~~2022 and ~~$13,080, $37,869~~$18,326, $132,875 and ~~$128,219,~~$306,618, respectively, at December 31, ~~2016,~~2021, held in order to satisfy the Company’s liability 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 actual or notional interests in a number of Lazard-managed funds, subject to service-based vesting conditions (see Notes 6 and 12).

~~Interest-bearing deposits have~~Debt primarily consists of U.S. Treasury securities with original maturities of greater than three months ~~but equal to or~~and less than one ~~year and are carried at cost that approximates fair value due to their short-term maturities.~~year.

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.

Alternative investment funds primarily consist of interests in various Lazard-managed hedge funds, funds of funds and mutual funds. Such amounts primarily consist of seed investments in funds related to our Asset Management business and amounts related to LFI discussed above.

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.

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.

Private equity investments include those owned by Lazard and those consolidated but not owned by Lazard. Private equity investments owned by Lazard are primarily comprised of investments in private equity funds. Such investments primarily include (i) Edgewater Growth Capital Partners III, L.P. (“EGCP III”), a fund primarily making equity and buyout investments in middle market companies and (ii) a fund targeting significant noncontrolling-stake investments in established private ~~companies and (iii) until the second quarter of 2017, a mezzanine fund (the “Mezzanine Fund”), which invests in mezzanine debt of a diversified selection of small- to mid-cap European~~ companies. ~~Lazard sold its interest in the Mezzanine Fund in May 2017.~~

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”).

13Equity method investments represent partnership interests accounted for under the equity method of accounting.

During the three month and nine month periods ended September 30, ~~2017~~2022 and ~~2016,~~2021, the Company reported in “revenue-other” on its condensed consolidated statements of operations net unrealized investment gains and losses pertaining to ~~“trading”~~“equity securities and trading debt securities” still held as of the reporting date as follows:

5.	FAIR VALUE MEASUREMENTS

Fair Value Hierarchy of Investments and Certain Other Assets and Liabilities—Lazard categorizes its investments and certain other assets and liabilities recorded at fair value into a three-level fair value hierarchy as follows:

Level 1.

Assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market that Lazard has the ability to access.

Level 2.

Assets and liabilities whose values are based on (i) quoted prices for similar assets or liabilities in an active market, or quoted prices for identical or similar assets or liabilities in non-active markets, or (ii) inputs other than quoted prices that are directly observable or derived principally from, or corroborated by, market data.

Level 3.

Assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect our own assumptions about the assumptions a market participant would use in pricing the asset or liability. 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.

The fair value of debt is classified as Level 1 when the fair values are based on unadjusted quoted prices in active markets.

The fair value of equities is classified as Level 1 or Level 3 as follows: marketable equity securities are classified as Level 1 and are valued based on the last trade price on the primary exchange for that security as provided by external pricing services; equity ~~securities~~interests in private companies are generally classified as Level 3.

The fair value of investments in alternative investment funds, debt funds and equity funds is classified as Level 1 when the fair values are primarily based on the publicly reported closing price for the fund.

The fair value of investments in private equity funds is classified as Level 3 for certain investments that are valued based on the potential transaction value.

The fair value of securities sold, not yet purchased, is classified as Level 1 when the fair values are based on unadjusted quoted prices in active markets.

The fair value of derivatives entered into by the ~~contingent consideration liability is~~Company and classified as Level ~~3 and the estimated fair value of the liability~~1 is remeasured at each reporting period. The inputs used to derive the fair value of the contingent consideration include the application of probabilities when assessing certain performance thresholds for the relevant periods. Any change in the fair value is recognized in “amortization and other acquisition-related costs” in the condensed consolidated statement of operations. Our business acquisitions may involve the potential payment of contingent consideration upon the achievement of certain performance thresholds. The contingent consideration liability is initially recorded at the estimated fair value of the contingent paymentsbased on the ~~acquisition date and is included in “other liabilities” on the condensed consolidated statements~~listed market price of ~~financial condition. See Note 10.~~

such instruments. The fair value of derivatives entered into by the Company isand classified as Level 2 ~~and~~ is based on the values of the related underlying assets, indices or reference rates as follows: the fair value of forward foreign currency exchange rate contracts is a function of the spot rate and the interest rate differential of the two currencies from the trade date to settlement date; the fair value of total return swaps is based on the change in fair value of the related underlying equity security, financial instrument or index and a specified notional holding; the fair value of interest rate swaps is based on the interest rate yield curve; and the fair value of derivative liabilities related to LFI and other similar deferred compensation arrangements is based on the value of the underlying investments, adjusted for forfeitures. The fair value of derivatives entered into by the Company and classified as Level 3 is based on a Black-Scholes valuation model that utilizes both observable and unobservable inputs. Unobservable inputs include model adjustments for valuation uncertainty. See Note 6.

Investments Measured at Net Asset Value (“NAV”)—As a practical expedient, the Company uses NAV or its equivalent to measure the fair value of certain investments. NAV is primarily determined based on information provided by external fund

administrators. 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.

The following tables present, as of September 30, ~~2017~~2022 and December 31, ~~2016,~~2021, 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:

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, ~~2017~~2022 and ~~2016:~~2021:

Nine Months Ended September 30, 2016

Beginning
Balance

Net Unrealized/
Realized
Gains/Losses
Included In
Earnings (a)

Purchases/
Acquisitions

Sales/
Dispositions

Foreign
Currency
Translation
Adjustments

Ending
Balance

Assets:

Investments:

Equities

$
1,276

$
12

$
-

$
-

$
33

$
1,321

Total Level 3 Assets

$
1,276

$
12

$
-

$
-

$
33

$
1,321

Liabilities:

Contingent consideration liability

$
-

$
28

$
17,000

$
-

$
-

$
17,028

Total Level 3 Liabilities

$
-

$
28

$
17,000

$
-

$
-

$
17,028

(b)

Transfers out of Level 3 derivatives during the ~~contingent consideration liability for the three month and~~ nine month ~~periods~~period ended September 30, ~~2017 and~~2021 reflected transfers of derivative liabilities for LGAC Warrants to Level 1 principally due to a change in the ~~three month and nine month periods ended September 30, 2016 include unrealized gains (losses) of $612, $(2,568), $(28) and $(28), respectively.~~inputs used to value these derivatives.

There were no other transfers ~~between any~~into or out of ~~the~~ Level ~~1, 2 and~~ 3 ~~categories in~~within the fair value ~~measurement~~ hierarchy during the three month and nine month periods ended September 30, ~~2017~~2022 and 2016. Certain investments that were valued at NAV as of December 31, 2016 were transferred to Level 2 from the NAV category in the six months ended June 30, 2017, as these investments were valued based on a probable transaction value as of the reporting date that differs from NAV. Such investments were sold in the second quarter of 2017.2021.

The following tables present, at September 30, ~~2017~~2022 and December 31, ~~2016,~~2021, certain investments that are valued using NAV or its equivalent as a practical expedient in determining fair value:

(a)	~~weekly (51%),~~ monthly ~~(2%~~(67%) and quarterly ~~(47%~~(33%)

(b)	~~monthly (97%) and quarterly (3%)~~

~~(d)~~(c)

daily (100%)

~~(e)~~(d)

~~daily (18%),~~ monthly ~~(50%~~(32%) and ~~quarterly (32%~~annually (68%)

~~(f)~~(e)

Unfunded commitments to private equity investments consolidated but not owned by Lazard of ~~$5,915~~$8,032 are excluded. Such commitments are required to be funded by capital contributions from noncontrolling interest holders.

(f)	Distributions from each fund will be received as the underlying investments of the funds are liquidated.

(a)	monthly (79%) and quarterly (21%)

(b)	daily (8%) and monthly (92%)

(d)	monthly (36%) and annually (64%)

~~(a)~~(e)

~~weekly (73%), monthly (2%) and quarterly (25%)~~

(f)	Distributions from each fund will be received as the underlying investments of the funds are liquidated.

Investment Capital Funding Commitments—At September 30, ~~2017,~~2022, the Company’s maximum unfunded commitments for capital contributions to investment funds primarily arose from commitments to EGCP III, which amounted to ~~$8,613.~~$5,158. 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.

The Company enters into forward foreign currency exchange rate contracts, interest rate swaps, interest rate futures, total return swap contracts on various equity and debt indices and other derivative contracts to economically hedge exposures to fluctuations in currency exchange rates, interest rates and equity and debt prices. The Company reports its derivative instruments separately as assets and liabilities unless a legal right of set-off exists under a master netting agreement enforceable by law. The Company’s derivative instruments are recorded at their fair value, and are included in “other assets” and “other liabilities” on the condensed consolidated statements of financial condition. Gains and losses on the Company’s derivative instruments are generally included in “interest income” and “interest expense”, respectively, or “revenue-other”, depending on the nature of the underlying item, in the condensed consolidated statements of operations.

In addition to the derivative instruments described above, the Company records derivative liabilities relating to its obligations pertaining to LFI and other similar deferred compensation arrangements, the fair value of which is based on the value of the underlying investments, adjusted for estimated forfeitures, and is included in “accrued compensation and benefits” in the condensed consolidated statements of financial condition. Changes in the fair value of the derivative liabilities are included in “compensation and benefits” in the condensed consolidated statements of operations, the impact of which equally offsets the changes in the fair value of investments which are currently expected to be delivered upon settlement of LFI and other similar deferred compensation arrangements, which are reported in “revenue-other” in the condensed consolidated statements of operations.

~~The table~~tables below ~~presents~~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, ~~2017~~2022 and December 31, ~~2016:~~2021. Notional amounts provide an indication of the volume of the Company's derivative activity.

Derivative assets and liabilities, as well as the related cash collateral from the same counterparty, have been netted on the condensed consolidated statements of financial condition where the Company has obtained an appropriate legal opinion with respect to the master netting agreement. Where such a legal opinion has not been either sought or obtained, amounts are not eligible for netting on the condensed consolidated statements of financial condition, and those derivative assets and liabilities are shown separately in the table below.

In addition to the cash collateral received and transferred that is presented on a net basis with derivative assets and liabilities, the Company receives and transfers additional securities and cash collateral. 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.

(a)

Amounts are subject to master netting arrangements but do not meet the criteria for netting on the condensed consolidated statements of financial condition under U.S. GAAP. For ~~total return swaps,~~some counterparties, the collateral amounts ~~represent~~of securities and cash collateral pledged may exceed the ~~netting of gross~~ derivative assets and derivative liabilities ~~of $509~~balances. Where this is the case, the total amount reported is limited to the net derivative assets and ~~$9,561 as of September 30, 2017, respectively, and $357 and $9,400 as of December 31, 2016, respectively, for contracts~~net derivative liabilities balances with the same counterparty under legally enforceable master netting agreements. Such amounts are recorded “net” in “other assets”, with receivables for net cash collateral under such contracts of $17,496 and $16,996 as of September 30, 2017 and December 31, 2016, respectively.that counterparty.

Net gains (losses) with respect to derivative instruments ~~(predominantly reflected~~(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, ~~2017~~2022 and ~~2016,~~2021, were as follows:

~~At September 30, 2017 and December 31, 2016, property consisted of the following:~~

At September 30, 2022 and December 31, 2021, property consisted of the following:

8.	GOODWILL AND OTHER INTANGIBLE ASSETS

The components of goodwill and other intangible assets at September 30, ~~2017~~2022 and December 31, ~~2016~~2021 are presented below:

At September 30, ~~2017~~2022 and December 31, ~~2016,~~2021, goodwill of ~~$320,945~~$311,243 and ~~$308,576,~~$314,880, respectively, was attributable to the Company’s Financial Advisory segment and, at each such respective date, $64,541 of goodwill was attributable to the Company’s Asset Management segment.

Changes in the carrying amount of goodwill for the nine month periods ended September 30, ~~2017~~2022 and ~~2016~~2021 are as follows:

All changes in the carrying amount of goodwill for the nine month periods ended September 30, ~~2017~~2022 and ~~2016~~2021 are attributable to the Company’s Financial Advisory segment.

~~The gross cost and accumulated amortization of other intangible assets as of September 30, 2017 and December 31, 2016, by major intangible asset category, are as follows:~~

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 nine month periods ended September 30, 2017 was $784 and $2,435, respectively, and for the three month and nine month periods ended September 30, 2016 was $835 and $1,809, respectively. Estimated future amortization expense is as follows:

Senior debt is comprised of the following as of September 30, ~~2017~~2022 and December 31, ~~2016:~~2021:

(a)

The effective interest rates of ~~Lazard Group’s 4.25% senior notes due November 14, 2020 (the “2020 Notes”),~~ Lazard Group’s 3.75% senior notes due February 13, 2025 (the “2025 Notes”) ~~and~~, 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 ~~4.43%~~3.87%, ~~3.87%~~3.76%, 4.67% and ~~3.76%~~4.53%, respectively.

The Company’s senior debt at September 30, 2022 and December 31, 2021 is carried at their principal balances outstanding, net of unamortized debt costs. At those dates, the fair value of such senior debt was approximately $1,578,000 and $1,885,000, respectively. The fair value of the Company’s senior debt is based on market quotations. The Company’s senior debt would be categorized within Level 2 of the hierarchy of fair value measurements if carried at fair value.

On ~~September 25, 2015,~~July 22, 2020, Lazard Group entered into an Amended and Restated Credit Agreement for a ~~five-year $150,000~~three-year, $200,000 senior revolving credit facility with a group of lenders, which expires in July 2023 (the “Amended and Restated Credit Agreement”)~~, which expires in September 2020.~~. The Amended and Restated Credit Agreement amended and restated ~~the previous~~Lazard Group’s amended and restated credit agreement, dated September 25, ~~2012.~~2015, in its entirety. Borrowings under the Amended and Restated Credit Agreement generally will bear interest at LIBOR plus an applicable margin for specific interest periods determined based on Lazard Group’s highest credit rating from an internationally recognized credit agency. The Amended and Restated Credit Agreement contains certain covenants, events of default and other customary provisions, including customary LIBOR-replacement mechanics. At September 30, ~~2017~~2022 and December 31, ~~2016,~~2021, no amounts were outstanding under the Amended and Restated Credit Agreement.

As of September 30, 2022, the Company had approximately $208,300 in unused lines of credit available to it, including the credit facility provided under the Amended and Restated Credit Agreement and unused lines of credit available to LFB of approximately $7,300.

The 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. As of September 30, ~~2017,~~2022, the Company was in compliance with such provisions. All of the Company’s senior debt obligations are unsecured.

As of September 30, 2017, the Company had approximately $175,000 in unused lines of credit available to it, including the credit facility provided under the Amended and Restated Credit Agreement and unused lines of credit available to LFB of approximately $24,000 (at September 30, 2017 exchange rates).

The Company’s senior debt at September 30, 2017 and December 31, 2016 is carried at historical amounts of $1,189,936 and $1,188,600, respectively. At those dates, the fair value of such senior debt was approximately $1,230,000 and $1,204,000, respectively. The fair value of the Company’s senior debt is based on market quotations. The Company’s senior debt would be categorized within Level 2 of the hierarchy of fair value measurements if carried at fair value.

~~Leases—The Company has various leases and other contractual commitments arising in the ordinary course of business.~~

~~Guarantees~~—In the normal course of business, LFB provides indemnifications to third parties to protect them in the event of non-performance by its clients. At September 30, 2017, LFB had $2,948 of such indemnifications and held $2,948 of collateral/counter-guarantees to secure these commitments. The Company believes the likelihood of loss with respect to these indemnities is remote. Accordingly, no liability is recorded in the condensed consolidated statement of financial condition.

~~Business Acquisitions~~—For businesses acquired in 2016, consideration consists of (i) previously paid one-time cash payments, 60,817 shares of Class A common stock subject to non-compete provisions, and non-contingent interests exchangeable into 204,651 shares of Class A common stock, and (ii) up to 810,742 additional shares of Class A common stock that are subject to certain performance thresholds. As of September 30, 2017, none of the contingent shares had been earned.

10.	COMMITMENTS AND CONTINGENCIES

Other Commitments—The Company has various other contractual commitments arising in the ordinary course of business. In addition, from time to time, ~~each of~~ LFB and LFNY may enter into underwriting commitments in which it will participate as an underwriter. At September 30, ~~2017,~~2022, 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.

In the opinion of management, the fulfillment of the commitments described herein will not have a material adverse effect on the Company’s condensed consolidated financial position or results of operations.

Legal—The Company is involved from time to time in judicial, governmental, regulatory and arbitration proceedings and inquiries concerning matters arising in connection with the conduct of our businesses, including proceedings initiated by former employees alleging wrongful termination. The Company reviews such matters on a case-by-case basis and establishes any required accrual if a loss is probable and the amount of such loss can be reasonably estimated. The Company ~~experiences~~may experience significant variation in its revenue and earnings on a quarterly basis. Accordingly, the results of any pending matter or matters could be significant when compared to the Company’s earnings in any particular ~~fiscal~~ quarter. The Company believes, however, based on currently available information, that the results of any pending matters, in the aggregate, will not have a material effect on its business or financial condition.

11.	STOCKHOLDERS’ EQUITY

Share Repurchase Program—During 2021 and through the nine month period ended September 30, ~~2017 and since 2014,~~2022, 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:

The Company expects that the share repurchase program will ~~primarily~~continue to be used to offset a portion of the shares that have been or will be issued under the Lazard Ltd 2008 Incentive Compensation Plan (the “2008 Plan”) and the Lazard Ltd 2018 Incentive Compensation Plan, as amended (the “2018 Plan”). Pursuant to the share repurchase program, purchases have been made in the open market or through privately negotiated transactions. The rate at which the Company purchases shares in connection with the share repurchase program may vary from ~~quarter~~period to ~~quarter~~period due to a variety of factors. Purchases with respect to such program are set forth in the table below:

During the nine month periods ended September 30, ~~2017~~2022 and ~~2016,~~2021, certain of our executive officers received ~~Class A~~ 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 ~~Class A~~ common stock from ~~the~~certain of our executive officers equal in value to all or a portion of the estimated amount of such tax. In addition, during the nine month periods ended September 30, ~~2017~~2022 and ~~2016,~~2021, the Company purchased shares of ~~Class A~~ common stock from ancertain of our executive ~~officer.~~officers. The aggregate value of all such purchases during the nine month periods ended September 30, ~~2017~~2022 and ~~2016~~2021 was approximately ~~$14,700~~$16,500 and ~~$4,900,~~$18,600, respectively. Such shares of common stock are reported at cost.

~~As of September 30, 2017, a total of $102,587 of share repurchase authorization remained available under the Company’s share repurchase program, which will expire on December 31, 2018.~~

~~In addition, on October 25, 2017, the Board~~As of ~~Directors~~September 30, 2022, a total of $381,676 of share repurchase authorization remained available under Lazard ~~authorized the~~Ltd’s share repurchase ~~of up to $200,000 of additional shares of Class A common stock,~~program, which authorization will expire on December 31, ~~2019.~~2024.

During the nine month period ended September 30, ~~2017, the Company~~2022, 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 ~~Class A~~ common stock, and had no voting or dividend rights. As of both September 30, ~~2017~~2022 and December 31, ~~2016,~~2021, no shares of Series A or Series B preferred stock were outstanding.

Accumulated Other Comprehensive Income (Loss) (“AOCI”), Net of Tax ~~(“AOCI”)~~—The tables below reflect the balances of each component of AOCI at September 30, ~~2017~~2022 and ~~2016~~2021 and activity during the three month and nine month periods then ended:

~~The table below reflects adjustments for items reclassified out of AOCI, by component, for the three month and nine month periods ended September 30, 2017 and 2016:~~

~~Noncontrolling Interests—Noncontrolling interests principally represent interests held in Edgewater’s management vehicles that the Company is deemed to control, but does not own.~~

The tables below summarize net income attributable to noncontrolling interests for the three month and nine month periods ended September 30, 2017 and 2016 and noncontrolling interests as of September 30, 2017 and December 31, 2016 in the Company’s condensed consolidated financial statements:

~~Dividends Declared, October 25, 2017~~—On October 25, 2017, the Board of Directors of Lazard declared a quarterly dividend of $0.41 per share on our Class A common stock, payable on November 17, 2017, to stockholders of record on November 6, 2017.

A description of Lazard Ltd’s 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, 2017 and 2016 is presented below.

The 2008 Plan authorizes the issuance of shares of Class A common stock pursuant to the grant or exercise of stock options, stock appreciation rights, restricted stock units (“RSUs”), performance-based restricted stock units (“PRSUs”) and other share-based awards. Under the 2008 Plan, the maximum number of shares available is based on a formula that limits the aggregate number of shares that may, at any time, be subject to awards that are considered “outstanding” under the 2008 Plan to 30% of the then-outstanding shares of Class A common stock.

The 2005 Plan authorized the issuance of up to 25,000,000 shares of Class A common stock pursuant to the grant or exercise of stock options, stock appreciation rights, RSUs and other share-based awards. Each RSU or similar award granted under the 2005 Plan represents a contingent right to receive one share of Class A common stock, at no cost to the recipient. The fair value of such awards is generally determined based on the closing market price of Class A common stock at the date of grant. The 2005 Plan expired in the second quarter of 2015, although unvested awards granted under the 2005 Plan remain outstanding and continue to be subject to its terms.

The table below reflects adjustments for items reclassified from AOCI, by component, for the three month and nine month periods ended September 30, 2022 and 2021:

(a)	Represents currency translation losses reclassified to earnings from AOCI associated with restructuring and closing of certain of our offices. Such amounts are included in “revenue—other” on the condensed consolidated statements of operations.

(b)	Included in the computation of net periodic benefit cost (see Note 13). Such amounts are included in “operating expenses—other” on the condensed consolidated statements of operations.

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 19).

The following reflects the amortization expense recorded with respect to share-based incentive plans within “compensation and benefits” expense (with respect to RSUs, PRSUs, ~~and~~ restricted stock, profits interest participation rights, including PRPUs, and other share-based awards) and “professional services” expense (with respect to ~~deferred stock units (“DSUs”))~~DSUs) within the Company’s accompanying condensed consolidated statements of operations for the three month and nine month periods ended September 30, ~~2017~~2022 and ~~2016:~~2021:

The ultimate amount of compensation and benefits expense relating to share-based awards is dependent upon the actual number of shares of ~~Class A~~ common stock that vest. The Company periodically assesses the forfeiture rates used for such estimates, including as a result of any applicable performance conditions. A change in estimated forfeiture rates or performance results in a cumulative adjustment to ~~previously recorded~~ compensation and benefits expense and also would cause the aggregate amount of compensation expense recognized in future periods to differ from the estimated unrecognized compensation expense described below.

For purposes of calculating diluted net income per share, RSUs, DSUs and restricted stock awards are included in the diluted weighted average shares of Class A common stock outstanding using the “treasury stock” method. PRSUs are included in the diluted weighted average shares of Class A common stock outstanding to the extent the performance conditions are met at the end of the reporting period, also using the “treasury stock” method.

RSUs generally require future service as a condition for the delivery of the underlying shares of ~~Class A~~ common stock (unless the recipient is then eligible for retirement under the Company’s retirement policy) and convert into shares of ~~Class A~~ common stock on a one-for-one basis after the stipulated vesting periods. ~~PRSUs, which are RSUs that are also subject to service-based vesting conditions, have additional performance conditions, and are described below.~~ 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.

RSUs generally include a dividend participation right that provides that, during the applicable vesting ~~periods~~period, each RSU is attributed additional RSUs ~~(or fractions thereof)~~ equivalent to any dividends paid on ~~Class A~~ common stock during such period. During the nine month ~~periods~~period ended September 30, ~~2017 and 2016, issuances of RSUs pertaining to such~~2022, dividend participation rights required the issuance of 336,740 RSUs and ~~respective charges~~the associated charge to “retained earnings”, net of estimated forfeitures (with corresponding credits to “additional paid-in-capital”)~~, consisted of the following:~~ was $11,416.

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 ~~31,280 and 38,771~~44,772 DSUs being granted during the nine month ~~periods~~period ended September 30, ~~2017 and 2016, respectively.~~2022. 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. DSUs are convertible into shares of ~~Class A~~ common stock at the time of cessation of service to the Board of ~~Directors and, for~~

~~purposes of calculating diluted net income per share, are included in the diluted weighted average shares of Class A common stock outstanding using the “treasury stock” method.~~Directors. DSUs include a cash dividend participation right equivalent to dividends paid on ~~Class A~~ common stock.

~~The Company’s~~Lazard Ltd’s Directors’ Fee Deferral Unit Plan permits the Non-Executive Directors to elect to receive additional DSUs in lieu of some or all of their cash fees. 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 ~~Class A~~ common stock on the date immediately preceding the date of the grant. During the nine month ~~periods~~period ended September 30, ~~2017 and 2016, 10,541 and 7,407~~2022, 12,985 DSUs ~~respectively,~~ 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.

The following is a summary of activity relating to RSUs and DSUs during the nine month ~~periods~~period ended September 30, ~~2017 and 2016:~~2022:

~~In connection with~~The weighted-average grant date fair value of RSUs ~~that vested~~granted during the nine month periods ended September 30, ~~2017~~2022 and ~~2016,~~2021, was $33.64 and $43.19, respectively. The weighted-average grant date fair value of DSUs granted during the nine month periods ended September 30, 2022 and 2021 was $35.53 and $46.66, respectively.

In connection with RSUs that settled during the nine month period ended September 30, 2022, the Company satisfied its minimum statutory tax withholding requirements in lieu of delivering ~~1,282,843 and 1,416,643~~1,514,142 shares of ~~Class A~~ common stock during such ~~respective~~ nine month ~~periods.~~period. Accordingly, ~~2,694,634 and 3,110,916~~2,591,484 shares of ~~Class A~~ common stock held by the Company were delivered during the nine month ~~periods~~period ended September 30, ~~2017 and 2016, respectively.~~2022.

As of September 30, ~~2017,~~2022, estimated unrecognized RSU compensation expense was ~~approximately $178,321,~~$142,667, with such expense expected to be recognized over a weighted average period of approximately ~~0.9 years~~1.0 year subsequent to September 30, ~~2017.~~2022.

The following is a summary of activity related to shares of restricted common stock associated with compensation arrangements during the nine month period ended September 30, 2022:

The weighted-average grant date fair value of restricted stock granted during the nine month periods ended September 30, 2022 and 2021 was $33.31 and $43.30, respectively.

In connection with shares of restricted common stock that settled during the nine month period ended September 30, 2022, the Company satisfied its minimum statutory tax withholding requirements in lieu of delivering 198,455 shares of common stock during such nine month period. Accordingly, 375,205 shares of common stock held by the Company were delivered during the nine month period ended September 30, 2022.

Restricted stock awards granted in 2022 generally include a dividend participation right that provides that during the applicable vesting period each restricted stock award is attributed additional shares of restricted common stock equivalent to any dividends paid

~~The following is a summary of activity related to shares of restricted Class A common stock associated with compensation arrangements during the nine month periods ended September 30, 2017 and 2016:~~

In connection with shares of restricted Class A common stock that vested during the nine month periods ended September 30, 2017 and 2016, the Company satisfied its minimum statutory tax withholding requirements in lieu of delivering 147,775 and 132,984 shares of Class Aon common stock during such ~~respective nine month periods. Accordingly, 336,036 and 669,292 shares of Class A common stock held by the Company were delivered during~~period. During the nine month ~~periods~~period ended September 30, ~~2017 and 2016, respectively.~~

~~The restricted stock awards include a cash~~2022, dividend participation ~~right equivalent to dividends paid on Class A~~rights required the issuance of 49,713 shares of restricted common stock ~~during~~and the ~~period, which will vest concurrently with the underlying restricted stock award.~~ associated charge to “retained earnings”, net of estimated forfeitures (with corresponding credits to “additional paid-in-capital”) was $1,772.

At September 30, ~~2017,~~2022, estimated unrecognized restricted stock expense was ~~approximately $35,369,~~$24,708, with such expense to be recognized over a weighted average period of approximately ~~0.8~~0.9 years subsequent to September 30, ~~2017.~~2022.

PRSUs are RSUs that are subject to ~~both~~ performance-based and service-based vesting ~~conditions.~~conditions, and beginning with awards granted in February 2021, a market-based condition. The number of shares of ~~Class A~~ common stock that a recipient will receive upon vesting of a PRSU will be calculated by reference to certain ~~performance~~performance-based and, beginning with awards granted in February 2021, market-based metrics that relate to ~~the Company’s~~Lazard Ltd’s performance over a three-year period. The target number of shares of ~~Class A~~ common stock subject to each PRSU is one; however, based on the achievement of the performance criteria, the number of shares of ~~Class A~~ common stock that may be received in connection with each PRSU generally can range from zero to two times the target number for awards granted prior to February 2021. For awards granted beginning in February 2021, based on both the performance-based and market-based criteria, the number of shares of common stock can range from zero to 2.4 times the target number. PRSUs will vest on a single date approximately three years following the date of the grant, provided the applicable service and performance conditions are satisfied. ~~In addition, the performance metrics applicable~~PRSUs granted prior to each PRSU will be evaluated on an annual basis at the end of each fiscal year during the performance period and, if the Company has achieved a threshold level of performance with respect to the fiscal year, 25% of the target number of shares of Class A common stock subject to each PRSU will no longer be at risk of forfeiture based on the achievement of performance criteria. PRSUsFebruary 2021 include dividend participation rights that provide that during vesting periods, the target number of PRSUs ~~(or, following the relevant performance period, the actual number of shares of Class A common stock that are no longer subject to performance conditions)~~ receive dividend equivalents at the same rate that dividends are paid on ~~Class A~~ common stock during such periods. These dividend equivalents are credited as RSUs that are not subject to the performance-based vesting criteria but are otherwise subject to the same restrictions as the underlying PRSUs to which they relate. PRSUs granted beginning in February 2021 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.

28The following is a summary of activity relating to PRSUs during the nine month period ended September 30, 2022:

The weighted-average grant date fair value of PRSUs granted during the nine month periods ended September 30, 2022 and 2021 was $35.44 and $46.63, respectively.

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. As of September 30, 2022, the total estimated unrecognized compensation expense was $3,920, and the Company expects to amortize such expense over a weighted-average period of approximately 1.0 year subsequent to September 30, 2022.

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. 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. The Company 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. Profits interest participation rights 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. 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. 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. If forfeited based solely on failing to meet the Minimum Value Condition, the associated compensation expense would not be reversed. With regard to the profits interest participation rights granted in February 2019 and February 2020, the Minimum Value Condition was met during the years ended December 31, 2020 and December 31, 2021, respectively. On March 1, 2022, the profits interest participation rights granted in February 2019, for which the Minimum Value Condition and other vesting conditions were satisfied, were exchanged on a one-for-one basis for shares of common stock.

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. 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. In addition, profits interest participation rights must satisfy the Minimum Value Condition.

The number of shares of common stock that a recipient will receive upon the exchange of a PRPU award is calculated by reference to applicable performance-based and, beginning with PRPUs granted in 2021, incremental market-based conditions and only result in value to the recipient to the extent the conditions are satisfied. The target number of shares of common stock subject to each PRPU is one. Based on the achievement of performance criteria, as determined by the Compensation Committee, the number of shares of common stock that may be received in connection with the PRPU awards granted in February 2019 and February 2020 will range from zero to two times the target number. For the PRPU awards granted beginning in February 2021, subject to both performance-based and incremental market-based criteria, the number of shares will range from zero to 2.4 times the target number. 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.

In addition, the performance metrics applicable to the PRPU awards granted in February 2019 and February 2020 will be evaluated on an annual basis at the end of each fiscal year during the performance period, and, if Lazard Ltd has achieved a threshold level of performance with respect to the fiscal year, 25% of the target number of PRPUs will no longer be at risk of forfeiture based on the achievement of performance criteria. Profits interest participation rights are allocated income, subject to vesting and settled in cash, in respect of dividends paid on common stock.

The weighted average grant date fair value of profits interest participation rights granted during the nine month periods ended September 30, ~~2017~~2022 and ~~2016:~~

~~In connection with certain PRSUs that vested or were settled during the nine month periods ended September 30, 2017~~2021 was $34.53 and 2016, the Company satisfied its minimum statutory tax withholding requirements in lieu of delivering 127,530 and 64,169 shares of Class A common stock during such respective nine month periods. Accordingly, 698,035 and 352,852 shares of Class A common stock held by the Company were delivered during the nine month periods ended September 30, 2017 and 2016,$44.73, respectively.

Compensation expense recognized for ~~PRSU awards~~profits interest participation rights, including PRPUs, is determined by multiplying the number of shares of ~~Class A~~ common stock underlying such awards that, based on the Company’s estimate, are considered probable of vesting, by the grant date fair value. As of September 30, ~~2017,~~2022, the total estimated unrecognized compensation expense was ~~approximately $11,846, and the~~$27,687. The Company expects to amortize such expense over a weighted-average period of approximately ~~0.8~~0.9 years subsequent to September 30, ~~2017.~~2022.

~~Commencing in February 2011, the Company granted LFI to eligible employees.~~ 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. 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. 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.

The following is a summary of activity relating to LFI and other similar deferred compensation arrangements during the nine month ~~periods~~period ended September 30, ~~2017 and 2016:~~2022:

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, ~~2017.~~2022.

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, ~~2017~~2022 and ~~2016:~~2021:

13.	EMPLOYEE BENEFIT PLANS

The Company provides retirement and other post-retirement benefits to certain of its employees through defined benefit pension plans (the “pension plans”) and, until December 2016, in the U.S., a partially funded contributory medical post-retirement plan covering certain qualifying U.S. employees (the “medical plan” and together with the pension plans, the “post-retirement plans”). The Company also offers defined contribution plans to its employees. The ~~post-retirement~~pension plans generally provide benefits to participants based on average levels of compensation. Expenses related to the Company’s employee benefit plans are included in “compensation and benefits” expense for the service cost component, and “operating expenses—other” for the other components of benefit costs on the condensed consolidated statements of operations.

30Employer Contributions to Pension Plans—The Company’s funding policy for its U.S. and non-U.S. pension plans is to fund when required or when applicable upon an agreement with the plans’ trustees. Management also evaluates from time to time whether to make voluntary contributions to the plans.

~~Employer Contributions to Pension Plans~~—The Company’s funding policy for its U.S. and non-U.S. pension plans is to fund when required or when applicable upon an agreement with the plans’ trustees (the “Trustees”). Management also evaluates from time to time whether to make voluntary contributions to the plans.

The following table summarizes the components of net periodic benefit cost (credit) related to the Company’s ~~post-retirement~~pension plans for the three month and nine month periods ended September 30, ~~2017~~2022 and ~~2016:~~2021:

Lazard Ltd, through its subsidiaries, is subject to U.S. federal income taxes on all of its U.S. operating income, as well as on the portion of non-U.S. income attributable to its U.S. subsidiaries. In addition, Lazard Ltd, through its subsidiaries, is subject to state and local taxes on its income apportioned to various state and local jurisdictions. Outside the U.S., Lazard Group operates principally through subsidiary corporations that are subject to local income taxes in foreign jurisdictions. Lazard Group is also subject to ~~New York City~~ Unincorporated Business Tax (“UBT”) attributable to its operations apportioned to New York City.

The Company recorded income tax provisions of ~~$32,742~~$35,350 and ~~$124,109~~$108,290 for the three month and nine month periods ended September 30, ~~2017,~~2022, respectively, and ~~$36,374~~$39,446 and ~~$95,900~~$124,255 for the three month and nine month periods ended September 30, ~~2016,~~2021, respectively, representing effective tax rates of ~~22.7%, 26.6%~~22.4%, 24.4%, 25.5% and ~~26.6%~~27.3%, respectively. The difference between the U.S. federal statutory rate of ~~35.0%~~21.0% and the effective tax rates reflected above principally relates to (i) ~~taxes payable to foreign jurisdictions that are not offset against U.S. income taxes,~~the tax impact of differences in the value of share based incentive compensation and other discrete items, (ii) foreign source income (loss) not subject to U.S. income taxes (including interest on intercompany financings), (iii) taxes payable to foreign jurisdictions that are not offset against U.S. income taxes, (iv) change in the U.S. federal valuation allowance affecting the provision for income taxes, ~~(iv) excess net tax benefit for share-based incentive compensation, and~~ (v) U.S. state and local taxes, which are incremental to the U.S. federal statutory tax ~~rate.~~rate, and (vi) impact of U.S. tax reform, including base erosion and anti-abuse tax.

On January 1, 2017, the Company adopted new accounting guidance on share-based incentive compensation. As a result of the adoption of this new guidance, the Company recognized excess tax benefits of $9,053 from the vesting of share-based incentive compensation in the provision for income taxes in the condensed consolidated statements of operations for the nine month period ended September 30, 2017. The Company also recorded deferred tax assets of $81,544, net of a valuation allowance of $12,090, as of January 1, 2017, for previously unrecognized excess tax benefits (including tax benefits from dividends or dividend equivalents) on share-based incentive compensation, with an offsetting adjustment to retained earnings. See Note 2 for further information on the adoption of this new guidance.

Substantially all of Lazard’s operations outside the U.S. are conducted in “pass-through” entities for U.S. income tax purposes. The Company provides for U.S. income taxes on a current basis for those earnings. The repatriation of prior earnings attributable to “non-pass-through” entities would not result in the recognition of a material amount of additional U.S. income taxes.

15.	NET INCOME PER SHARE OF ~~CLASS A~~ COMMON STOCK

The Company issued certain profits interest participation rights, including certain PRPUs, that the Company is required under U.S. 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.

The Company’s basic and diluted net income per share calculations using the “two-class” method for the three month and nine month periods ended September 30, ~~2017~~2022 and ~~2016 are computed as described below.~~

~~Numerator—utilizes net income attributable to Lazard Ltd for the respective periods.~~

~~Denominator~~—utilizes the weighted average number of shares of Class A common stock outstanding for the respective periods, plus applicable adjustments to such shares associated with shares of Class A common stock issuable on a non-contingent basis.

~~Numerator—utilizes net income attributable to Lazard Ltd for the respective periods as in the basic net income per share calculation described above.~~

~~Denominator~~—utilizes the weighted average number of shares of Class A common stock outstanding for the respective periods as in the basic net income per share calculation described above, plus, to the extent dilutive, the incremental number of shares of Class A common stock required to settle share-based incentive compensation.

~~The calculations of the Company’s basic and diluted net income per share and weighted average shares outstanding for the three month and nine month periods ended September 30, 2017 and 2016~~2021 are presented below:

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~~performance-based incentive fees for providing such services. Investment advisory fees relating to such services were ~~$163,767~~$159,749 and ~~$471,727~~$458,462 for the three month and nine month periods ended September 30, ~~2017,~~2022, respectively, and ~~$130,546~~$164,340 and ~~$374,250~~$524,464 for the three month and nine month periods ended September 30, ~~2016,~~2021, respectively, and are included in “asset management fees” on the condensed consolidated statements of operations. Of such amounts, ~~$57,156~~$56,527 and ~~$49,944~~$96,740 remained as receivables at September 30, ~~2017~~2022 and December 31, ~~2016,~~2021, respectively, and are included in “fees receivable” on the condensed consolidated statements of financial condition.

The Second Amended and Restated Tax Receivable Agreement, dated as of October 26, 2015 (the ~~“Amended and Restated Tax Receivable Agreement”~~“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 ~~certain~~the increases in the tax basis of certain assets and of certain other tax benefits related to the ~~Amended and Restated Tax Receivable Agreement,~~TRA, and (ii) an amount that we

currently expect will ~~approximate~~equal 85% of the cash tax savings that may arise from tax ~~benefits~~basis increases attributable to payments under the ~~Amended and Restated Tax Receivable Agreement.~~TRA. Our subsidiaries expect to benefit from the balance of cash savings, if any, in income tax that our subsidiaries ~~realize.~~realize from such tax basis increases. Any amount paid by our subsidiaries to the Trust will generally be distributed pro rata to the owners of the Trust, ~~including~~who include certain of our executive ~~officers, in proportion to their beneficial interests in the Trust.~~officers.

For purposes of the ~~Amended and Restated Tax Receivable Agreement,~~TRA, cash savings in income and franchise tax will be computed by comparing our subsidiaries’ actual income and franchise tax liability to the amount of such taxes that our subsidiaries would have been required to pay had there been no increase in the tax basis of certain ~~tangible and intangible~~ assets of ~~Lazard Group attributable to our subsidiaries’ interest in~~ Lazard Group and had our subsidiaries not entered into the ~~Amended and Restated Tax Receivable Agreement.~~TRA. The term of the ~~Amended and Restated Tax Receivable Agreement~~TRA will continue until approximately 2033 or, if earlier, until all relevant tax benefits have been utilized or expired.

The amount of the ~~Amended and Restated Tax Receivable Agreement~~TRA liability is an undiscounted amount based upon ~~currently enacted~~current tax laws and the ~~current~~ structure of the Company and various assumptions regarding potential future operating profitability. The assumptions reflected in the estimate involve significant ~~judgment.~~judgment and if our structure or income assumptions were to change, we could be required to accelerate payments under the TRA. As such, the actual amount and timing of payments under the ~~Amended and Restated Tax Receivable Agreement~~TRA could differ materially from our estimates. Any changes in the amount of the estimated liability would be recorded as a non-compensation expense in the condensed consolidated statement of operations. Adjustments, if necessary, to the related deferred tax assets would be recorded through the “provision (benefit) for income taxes”.

The cumulative liability relating to our obligations under the ~~Amended and Restated Tax Receivable Agreement~~TRA as of September 30, ~~2017~~2022 and December 31, ~~2016~~2021 was ~~$512,821~~$192,399 and ~~$513,610,~~$213,434, respectively, and is recorded in “tax receivable agreement obligation” on the condensed consolidated statements of financial condition. The balance at September 30, ~~2017~~2022 reflects a payment made under the ~~Amended and Restated Tax Receivable Agreement~~TRA in the nine months ended September 30, ~~2017~~2022 of ~~$789.~~$21,035.

See Note 11 for information regarding related party transactions pertaining to shares repurchased from certain of our executive officers.

17.	REGULATORY AUTHORITIES

LFNY is a U.S. registered broker-dealer and is subject to the net capital requirements of Rule 15c3-1 under the Exchange Act. Under the basic method permitted by this rule, the minimum required net capital, as defined, is a specified fixed percentage (6 ²/_{(6 2/3}%) of total aggregate indebtedness recorded in LFNY’s Financial and Operational Combined Uniform Single (“FOCUS”) report filed with the Financial Industry Regulatory Authority (“FINRA”), or ~~$100,~~$5, whichever is greater. In addition, the ratio of aggregate indebtedness (as defined) to net capital may not exceed 15:1. At September 30, ~~2017,~~2022, LFNY’s regulatory net capital was ~~$254,141,~~$76,509, which exceeded the minimum requirement by ~~$247,866.~~$70,877. LFNY’s aggregate indebtedness to net capital ratio was ~~0.37:~~1.10:1 as of September 30, ~~2017.~~2022.

Certain U.K. 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. At September 30, ~~2017,~~2022, the aggregate regulatory net capital of the U.K. Subsidiaries was ~~$190,884,~~$154,119, which exceeded the minimum requirement by ~~$172,104.~~$101,511.

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 of the Paris group, exercised through LFB and other subsidiaries of CFLF, primarily LFG, ~~(asset management),~~ also are subject to regulation and supervision by the Autorité des Marchés Financiers. At ~~September~~June 30, ~~2017,~~2022, the consolidated regulatory net capital of CFLF was ~~$137,988,~~$148,433 which exceeded the minimum requirement set for regulatory capital levels by ~~$89,582.~~$80,917. 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. or in the European Union. InDuring the third quarter of 2013, the Company and the ACPR agreed on terms for the consolidated supervision of LFB and certain other non-Financial Advisory European subsidiaries of the Company (referred to herein, on a combined basis, as the “combined European regulated group”) under such rules. 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. At June 30, ~~2017,~~2022, the regulatory net capital of the combined European regulated group was ~~$167,325,~~$172,680, which exceeded the minimum requirement set for regulatory capital levels by ~~$81,079.~~$94,820. 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.

Certain other U.S. and non-U.S. subsidiaries are subject to various capital adequacy requirements promulgated by various regulatory and exchange authorities in the countries in which they operate. At September 30, ~~2017,~~2022, for those subsidiaries with regulatory capital requirements, their aggregate net capital was ~~$151,460,~~$165,159, which exceeded the minimum required capital by ~~$124,535.~~$139,702.

At September 30, ~~2017,~~2022, each of these subsidiaries individually was in compliance with its regulatory capital requirements.

Any new or expanded rules and regulations that may be adopted in countries in which we operate (including regulations that have not yet been proposed) could affect us in other ways.

18.	SEGMENT INFORMATION

The Company’s reportable segments offer different products and services and are managed separately as different levels and types of expertise are required to effectively manage the segments’ transactions. Each segment is reviewed to determine the allocation of resources and to assess its performance. The Company’s principal operating activities are included in its Financial Advisory and Asset Management business segments as described in Note 1. In addition, as described in Note 1, the Company records selected other activities in its Corporate segment.

The Company’s segment information for the three month and nine month periods ended September 30, ~~2017~~2022 and ~~2016~~2021 is prepared using the following methodology:

~~Revenue and expenses directly associated with each segment are included in determining operating income.~~

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Expenses not directly associated with specific segments are allocated based on the most relevant measures applicable, including headcount, square footage and other factors.

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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.

The Company ~~allocates investment gains and losses,~~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.

Each segment’s operating expenses include (i) compensation and benefits expenses incurred directly in support of the businesses and (ii) other operating expenses, which include directly incurred expenses for occupancy and equipment, marketing and business development, technology and information services, professional services, fund administration and outsourced services and indirect support costs (including compensation and other operating expenses related thereto) for administrative services. Such administrative services include, but are not limited to, accounting, tax, human resources, legal, facilities management and senior management activities.

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:

19.	CONSOLIDATED VIEs

The Company’s consolidated VIEs as of September 30, 2022 and December 31, 2021 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. The assets of LFI Consolidated Funds, except as it relates to $115,446 and $140,371 of LFI held by Lazard Group as of September 30, 2022 and December 31, 2021, respectively, can only be used to settle the obligations of LFI Consolidated Funds. 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, 2022 and December 31, 2021.

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with Lazard Ltd’s condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q (the “Form 10-Q”), as well as Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) included in our Annual Report on Form 10-K for the year ended December 31, ~~2016~~2021 (the “Form 10-K”). All references to ~~“2017,~~“2022,” ~~“2016,~~“2021,” “third quarter,” “first nine months” or “the period” refer to, as the context requires, the three month and nine month periods ended September 30, ~~2017~~2022 and ~~September 30, 2016.~~2021.

Management has included in Parts I and II of this Form 10-Q, including in its MD&A, statements that are forward-looking statements. In some cases, you can identify these statements by forward-looking words such as “may,” “might,” “will,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “target,” “goal” or “continue,” and the negative of these terms and other comparable terminology. These forward-looking statements, which are subject to known and unknown risks, uncertainties and assumptions about us, may include projections of our future financial performance based on our growth strategies, business plans and initiatives and anticipated trends in our business. These statements, including with respect to the current COVID-19 pandemic, are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements. These factors include, but are not limited to, those discussed in our Form 10-K under the caption “Risk Factors,” including the following:

~~a decline in general economic conditions or global or regional financial markets;~~

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a decline in general economic conditions or the global or regional financial markets;

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

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

~~losses caused by financial or other problems experienced by third parties;~~

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losses caused by financial or other problems experienced by third parties;

~~losses due to unidentified or unanticipated risks;~~

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losses due to unidentified or unanticipated risks;

~~a lack of liquidity,~~ ~~i.e., ready access to funds, for use in our businesses; and~~

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a lack of liquidity, i.e., ready access to funds, for use in our businesses; and

~~competitive pressure on our businesses and on our ability to retain and attract employees at current compensation levels.~~

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competitive pressure on our businesses and on our ability to retain and attract employees at current compensation levels.

These risks and uncertainties are not exhaustive. Other sections of the Form 10-K and this Form 10-Q describe additional factors that could adversely affect our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for our management to predict all risks and uncertainties, nor can management assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy or completeness of any of these forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. We are under no duty to update any of these forward-looking statements after the date of this Form 10-Q to conform our prior statements to actual results or revised expectations and we do not intend to do so.

~~financial goals, including the ratio of awarded compensation and benefits expense to operating revenue;~~

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

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ability to offset stockholder dilution through share repurchases;

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possible or assumed future results of operations and operating cash flows;

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strategies and investment policies;

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financing plans and the availability of short-term borrowing;

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competitive position;

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future acquisitions, including the consideration to be paid and the timing of consummation;

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potential growth opportunities available to our businesses;

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potential impact of investments in our technology infrastructure and data science capabilities;

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recruitment and retention of our managing directors and employees;

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

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

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

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

~~likelihood of success and impact of litigation;~~

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likelihood of success and impact of litigation;

~~expected tax rates, including effective tax rates;~~

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expected tax rates, including effective tax rates;

~~changes in interest and tax rates;~~

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changes in interest and tax rates;

~~availability of certain tax benefits, including certain potential deductions;~~

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availability of certain tax benefits, including certain potential deductions;

~~potential impact of certain events or circumstances on our financial statements;~~

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potential impact of certain events or circumstances on our financial statements and operations, including the ongoing COVID-19 pandemic;

~~changes in foreign currency exchange rates;~~

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changes in foreign currency exchange rates;

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

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

~~effects of competition on our business; and~~

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effects of competition on our business; and

~~impact of future legislation and regulation on our business.~~

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impact of new or future legislation and regulation, including tax laws and regulations, on our business.

The Company is committed to providing timely and accurate information to the investing public, consistent with our legal and regulatory obligations. To that end, the Company uses its website, its twitter account (twitter.com/Lazard) and other social media sites to convey information about our businesses, including the anticipated release of quarterly financial results, quarterly financial, statistical and business-related information, and the posting of updates of AUM in ~~various mutual funds, hedge funds and other investment products managed by~~ our Asset Management business. Investors can link to Lazard Ltd, Lazard Group and their operating company websites through http://www.lazard.com. Our websites and social media sites and the information contained therein or connected thereto shall not be deemed to be incorporated into this Form 10-Q.

19.	CONSOLIDATED VIEs

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with Lazard Ltd’s condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q (the “Form 10-Q”), as well as Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) included in our Annual Report on Form 10-K for the year ended December 31, 2021 (the “Form 10-K”). All references to “2022,” “2021,” “third quarter,” “first nine months” or “the period” refer to, as the context requires, the three month and nine month periods ended September 30, 2022 and 2021.

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a decline in general economic conditions or the global or regional financial markets;

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a decline in our revenues, for example due to a decline in overall mergers and acquisitions (“M&A”) activity, our share of the ~~world’s preeminent~~M&A market or our assets under management (“AUM”);

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losses caused by financial ~~advisory~~or other problems experienced by third parties;

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losses due to unidentified or unanticipated risks;

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a lack of liquidity, i.e., ready access to funds, for use in our businesses; and ~~asset management firms. We have long specialized~~

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competitive pressure on our businesses and on our ability to retain and attract employees at current compensation levels.

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financial goals, including ratios of compensation and benefits expense to operating revenue;

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

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ability to offset stockholder dilution through share repurchases;

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possible or assumed future results of operations and operating cash flows;

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strategies and investment policies;

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financing plans and the availability of short-term borrowing;

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competitive position;

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future acquisitions, including the consideration to be paid and the timing of consummation;

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potential growth opportunities available to our businesses;

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potential impact of investments in ~~crafting solutions to the complex financial~~our technology infrastructure and ~~strategic challenges of a diverse set of clients around the world, including corporations, governments, institutions, partnerships~~data science capabilities;

•

recruitment and individuals. Founded in 1848 in New Orleans, we currently operate from 43 cities in key business and financial centers across 27 countries throughout North America, Europe, Asia, Australia, the Middle East, and Central and South America.

Our primary business purpose is to serve our clients. Our deep roots in business centers around the world form a global network of relationships with key decision-makers in corporations, governments and investing institutions. This network is both a competitive strength and a powerful resource for Lazard and our clients. As a firm that competes on the qualityretention of our ~~advice, we have two fundamental assets: our people~~managing directors and ~~our reputation.~~employees;

~~We operate~~

•

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

•

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

•

likelihood of success and impact of litigation;

•

expected tax rates, including effective tax rates;

•

changes in ~~cyclical businesses across multiple geographies, industries~~interest and asset classes. In recent years, we have expanded our geographic reach, bolstered our industry expertise and continued to build in growth areas. Companies, government bodies and investors seek independent advice with a geographic perspective, deep understandingtax rates;

•

availability of ~~capital structure, informed research and knowledge~~certain tax benefits, including certain potential deductions;

•

potential impact of ~~global, regional and local economic conditions. We believe that our business model as an independent advisor will continue to create opportunities for us to attract new clients and key personnel.~~

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

Financial Advisory, which offers corporate, partnership, institutional, government, sovereign and individual clients across the globe a wide array of financial advisory services regarding M&A and other strategic matters, restructurings, capital structure, capital raising, shareholder advisory, and various other financial matters, and

~~In addition, we record selected other activities in our Corporate segment, including management of cash, investments, deferred tax assets, outstanding indebtedness,~~ certain ~~contingent obligations, and assets and liabilities associated with Lazard Group’s Paris-based subsidiary, Lazard Frères Banque SA (“LFB”).~~

~~Our consolidated net revenue was derived from the following segments:~~

Three Months Ended

Nine Months Ended

September 30,

September 30,

2017

2016

2017

2016

Financial Advisory

49
%

56
%

54
%

54
%
Asset Management

51

44

46

47

Corporate

-

-

-

(1
)
Total

100
%

100
%

100
%

100
%

~~We also invest our own capital from time to time, generally alongside capital of qualified institutional and individual investors in alternative investments~~events or private equity investments, and, since 2005, we have engaged in a number of alternative investments and private equity activities, including, historically, investments through (i) Edgewater, our Chicago-based private equity firm, (ii) a fund targeting significant noncontrolling-stake investments in established private companies and (iii) until the second quarter of 2017, a mezzanine fund (the “Mezzanine Fund”), which invests in mezzanine debt of a diversified selection of small- to mid-cap European companies. Lazard sold its interest in the Mezzanine Fund in May 2017.We also make investments to seed our Asset Management strategies.

~~Business Environment and Outlook~~

~~Economic and global financial market conditions can materially affect~~circumstances on our financial ~~performance. As described above, our principal sources of revenue are derived from activities in our Financial Advisory~~statements and Asset Management business segments. As our Financial Advisory revenues are primarily dependent on the successful completion of merger, acquisition, restructuring, capital raising or similar transactions, and our Asset Management revenues are primarily driven by the levels of AUM, weak economic and global financial market conditions can result in a challenging business environment for M&A and capital-raising activity as well as our Asset Management business, but may provide opportunities for our restructuring business.

Equity market indices for developed and emerging markets at September 30, 2017 increased as compared to such indices at September 30, 2016 and December 31, 2016. In the global M&A markets during the first nine months of 2017, the value of all completed M&A transactions decreased as compared to the same period in the prior year, as did the subset of such transactions involving values greater than $500 million. During the same time, the number of all announced M&A transactions,operations, including the subset of such transactions involving values greater than $500 million, increased. During the first nine months of 2017, global restructuring activity, as measured by the number of corporate defaults, decreased as compared to the first nine months of 2016.

~~On an~~ ongoing basis, regional, macroeconomic and geopolitical factors, including any potential regional tax or regulatory reform, may impact our business. Overall, the global macroeconomic outlook for the near- to mid-term appears positive. The U.S. economy appears to be healthy, and the European economy seems to continue to recover. Corporate cash balances remain high, and borrowing costs remain low for companies with strong credit ratings. Although market volatility may affect our business from time to time, the longer-term trends appear to remain favorable for both of our businesses.COVID-19 pandemic;

~~Our outlook~~

•

changes in foreign currency exchange rates;

•

expectations with respect to ~~our Financial Advisory~~the economy, the securities markets, the market for mergers, acquisitions, restructuring and ~~Asset Management businesses is described below.~~

~~Financial Advisory~~—The fundamentals for continued M&A activity appear to remain in place. Although the strength of our Financial Advisory business in the second half of 2016 could make comparisons to future periods more challenging, we believe our Financial Advisory business is in a strong competitive position. Demand continues for expert, independent strategic advice that can be levered across geographies and our range of advisory capabilities. The global scale and breadth of our Financial Advisory business allows us to advise on large, complex cross-border transactions and restructuring transactions across a variety of industries. In addition, we believe our businesses throughout the emerging markets position us for growth in these markets, while enhancing our relationships with, and the services that we can provide to, clients in other ~~economies. In the third quarter of 2016, we expanded our North American Financial Advisory business through the acquisition of an independent~~ financial advisory ~~firm based in Canada. In addition, in October 2016, we acquired~~activity, the ~~portion~~market for asset management activity and other macroeconomic, regional and industry trends;

•

effects of ~~MBA Lazard that we did not previously own, thereby fully integrating~~competition on our ~~Latin American operations. We believe that these transactions have augmented the strength of our Financial Advisory business throughout the Americas.~~business; and

impact of ~~all potentially applicable factors~~new or future legislation and regulation, including tax laws and regulations, on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. See Item 1A, “Risk Factors” in our Form 10-K. Furthermore, net income and revenue in any period may not be indicative of full-year results or the results of any other period and may vary significantly from year to year and quarter to quarter.business.

Overall, we continue to focus on the development of our business, including the generation of stable revenue growth, earnings growth and shareholder returns, the evaluation of potential growth opportunities, the prudent management of our costs and expenses, the efficient use of our assets and the return of capital to our shareholders.

The Company is committed to providing timely and accurate information to the investing public, consistent with our legal and regulatory obligations. To that end, the Company uses its website, its twitter account (twitter.com/Lazard) and other social media sites to convey information about our businesses, including the anticipated release of quarterly financial results, quarterly financial, statistical and business-related information, and the posting of updates of AUM in our Asset Management business. Investors can link to Lazard Ltd, Lazard Group and their operating company websites through http://www.lazard.com. Our websites and social media sites and the information contained therein or connected thereto shall not be deemed to be incorporated into this Form 10-Q.

~~Certain data with respect to our Financial Advisory and Asset Management businesses is included below.~~

As reflected in the following table, which sets forth global M&A industry statistics, the value of all completed transactions, including completed transactions with values greater than $500 million, decreased in the first nine months of 2017 as compared to 2016. With respect to announced M&A transactions, the number of all transactions, including the number of announced transactions involving values greater than $500 million, increased in the first nine months of 2017 as compared to 2016.

Global restructuring activity during the first nine months of 2017, as measured by the number of corporate defaults, decreased as compared to the first nine months of 2016. The number of defaulting issuers decreased to 64 in the first nine months of 2017, according to Moody’s Investors Service, Inc., as compared to 115 in the first nine months of 2016.456,521

Net revenue trends in Financial Advisory for M&A and Strategic Advisory and Restructuring are generally correlated to the level of completed industry-wide M&A transactions and restructuring transactions occurring subsequent to corporate debt defaults, respectively. However, deviations from this relationship can occur in any given year for a number of reasons. For instance, our results can diverge from industry-wide activity where there are material variances from the level of industry-wide M&A activity in a particular market where Lazard has significant market share, or regarding the relative number of our advisory engagements with respect to larger-sized transactions, and where we are involved in non-public or sovereign advisory assignments. For example, our M&A and Strategic Advisory revenue, which includes M&A Advisory, Capital Advisory, Capital Raising, Sovereign Advisory and Shareholder Advisory revenue, increased 13% in the first nine months of 2017 as compared to 2016. The industry statistics for global M&A transactions described above reflect a 5% decrease in the value of all completed transactions in the first nine months of 2017 as compared to 2016. In addition, with respect to our restructuring activity, revenue increased 38% in the first nine months of 2017 as compared to 2016, in contrast to a 44% decrease in global default activity in the first nine months of 2017 as compared to 2016.

~~The percentage change in major equity market indices at September 30, 2017, as compared to such indices at June 30, 2017, December 31, 2016, and at September 30, 2016, is shown in the table below.~~

Percentage Changes
September 30, 2017 vs.

June 30,
2017

December 31,
2016

September 30,
2016

MSCI World Index

4
%

14
%

16
%
Euro Stoxx

4
%

9
%

20
%
MSCI Emerging Market

7
%

25
%

20
%
S&P 500

4
%

13
%

16
%

19.	CONSOLIDATED VIEs

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with Lazard Ltd’s condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q (the “Form 10-Q”), as well as Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) included in our Annual Report on Form 10-K for the year ended December 31, 2021 (the “Form 10-K”). All references to “2022,” “2021,” “third quarter,” “first nine months” or “the period” refer to, as the context requires, the three month and nine month periods ended September 30, 2022 and 2021.

~~The fees that we receive~~•

a decline in general economic conditions or the global or regional financial markets;

•

a decline in our revenues, for ~~providing investment management~~example due to a decline in overall mergers and ~~advisory services are primarily driven by the level of AUM and the nature~~acquisitions (“M&A”) activity, our share of the ~~AUM product mix. Accordingly,~~M&A market ~~movements, foreign currency exchange rate volatility and changes~~or our assets under management (“AUM”);

•

losses caused by financial or other problems experienced by third parties;

•

losses due to unidentified or unanticipated risks;

•

a lack of liquidity, i.e., ready access to funds, for use in our ~~AUM product mix will impact the level of revenues we receive from~~businesses; and

•

competitive pressure on our ~~Asset Management business when comparing periodic results. A substantial portion of~~businesses and on our AUM is invested in equities. Movements in AUM during the period generally reflect the changes in equity market indices. Our AUM at September 30, 2017 increased 20% versus AUM at December 31, 2016, primarily due to market and foreign exchange appreciation and net inflows. Average AUM for the three month period ended September 30, 2017 was 16% higher than the average AUM for the three month period ended September 30, 2016. Average AUM for the first nine months of 2017 increased 14% as compared to average AUM in the first nine months of 2016.

~~Financial Statement Overview~~

~~Net Revenue~~

The majority of Lazard’s Financial Advisory net revenue historically has been earned from the successful completion of M&A transactions, strategic advisory matters, restructuring and capital structure advisory services, capital raising and similar transactions. The main drivers of Financial Advisory net revenue are overall M&A activity, the level of corporate debt defaults and the environment for capital raising activities, particularly in the industries and geographic markets in which Lazard focuses. In some client engagements, often those involving financially distressed companies, revenue is earned in the form of retainers and similar fees that are contractually agreed upon with each client for each assignment and are not necessarily linked to the completion of a transaction. In addition, Lazard also earns fees from providing strategic advice to clients, with such fees not being dependent on a specific transaction, and may also earn fees in connection with public and private securities offerings. Significant fluctuations in Financial Advisory net revenue can occur over the course of any given year, because a significant portion of such net revenue is earned upon the successful completion of a transaction, restructuring or capital raising activity, the timing of which is uncertain and is not subject to Lazard’s control.

•

financial markets and client asset inflows and outflows have a direct effect on Asset Management net revenue and operating income. Asset Management fees are generally based on the level of AUM measured daily, monthly or quarterly, and an increase or reduction in AUM, due to market price fluctuations, currency fluctuations, changes in product mix, or net client asset flows will result in a corresponding increase or decrease in management fees. The majority of our investment

advisory contracts are generally terminable at any time or on notice of 30 days or less. Institutional and individual clients, and firms with which we have strategic alliances, can terminate their relationship with us, reduce the aggregate amount of AUM or shift their funds to other types of accounts with different rate structures for a number of reasons,goals, including investment performance, changes in prevailing interest rates and financial market performance. In addition, as Lazard’s AUM includes significant amounts of assets that are denominated in currencies other than U.S. Dollars, changes in the value of the U.S. Dollar relative to foreign currencies will impact the value of Lazard’s AUM and the overall amount of management fees generated by the AUM. Fees vary with the type of assets managed and the vehicle in which they are managed, with higher fees earned on equity assets and alternative investment funds, such as hedge funds and private equity funds, and lower fees earned on fixed income and cash management products.

~~The Company earns performance-based incentive fees on various investment products, including traditional products and alternative investment funds, such as hedge funds and private equity funds.~~

For hedge funds, incentive fees are calculated based on a specified percentage of a fund’s net appreciation, in some cases in excess of established benchmarks or thresholds. The Company records incentive fees on traditional products and hedge funds at the end of the relevant performance measurement period, when potential uncertainties regarding the ultimate realizable amounts have been determined. The incentive fee measurement period is generally an annual period (unless an account terminates or a redemption occurs during the year). The incentive fees received at the end of the measurement period are not subject to reversal or payback. Incentive fees on hedge funds are often subject to loss carryforward provisions in which losses incurred by the hedge funds in any year are applied against certain gains realized by the hedge funds in future periods before any incentive fees can be earned.

For private equity funds, incentive fees may be earned in the form of a “carried interest” if profits arising from realized investments exceed a specified threshold. Typically, such carried interest is ultimately calculated on a whole-fund basis and, therefore, clawback of carried interest during the life of the fund can occur. As a result, incentive fees earned on our private equity funds are not recognized until potential uncertainties regarding the ultimate realizable amounts have been determined, including any potential for clawback.

Corporate segment net revenue consists primarily of investment gains and losses on the Company’s “seed investments” related to our Asset Management business, principal investments in private equity funds and “equity method” investments, net of hedging activities, as well as gains and losses on investments held in connection with Lazard Fund Interests (“LFI”) and interest income and interest expense. Corporate net revenue also can fluctuate due to changes in the fair value of investments classified as “trading”, as well as due to changes in interest and currency exchange rates and in the levels of cash, investments and indebtedness.

Although Corporate segment net revenue during 2017 is not significant compared to Lazard’s net revenue, total assets in the Corporate segment represented 69% of Lazard’s consolidated total assets as of September 30, 2017, which are attributable to cash and cash equivalents, investments in debt and equity securities, interests in alternative investment, debt, equity and private equity funds, deferred tax assets and certain assets associated with LFB. LFB, as a registered bank, is engaged primarily in commercial and private banking services for clients and funds managed by LFG and other clients, and asset-liability management.

~~Operating Expenses~~

The majority of Lazard’s operating expenses relate to compensation and benefits for managing directors and employees. Our compensation and benefits expense includes (i) salaries and benefits, (ii) amortization of the relevant portion of previously granted deferred incentive compensation awards, including (a) share-based incentive compensation under the Lazard Ltd 2008 Incentive Compensation Plan (the “2008 Plan”), and (b) LFI and other similar deferred compensation arrangements (see Note 12 of Notes to Condensed Consolidated Financial Statements), (iii) a provision for discretionary or guaranteed cash bonuses and profit pools and (iv) when applicable, severance payments. Compensation expense in any given period is dependent on many factors, including general economic and market conditions, our actual and forecasted operating and financial performance, staffing levels, estimated forfeiture rates, competitive pay conditions and the nature of revenues earned, as well as the mix between current and deferred compensation.

For interim periods, we use “adjusted compensation and benefits expense” and the ratio of “adjusted compensation and benefits expense” to “operating revenue,” both non-U.S. GAAP measures, for comparisonratios of compensation and benefits expense ~~between periods. For the reconciliations~~to operating revenue;

•

ability to deploy surplus cash through dividends, share repurchases and ~~calculations with respect~~debt repurchases;

•

ability to ~~“adjusted compensation~~offset stockholder dilution through share repurchases;

•

possible or assumed future results of operations and ~~benefits expense”~~operating cash flows;

•

strategies and ~~related ratios to “operating revenue,” see the table under “Consolidated Results of Operations” below.~~investment policies;

•

competitive position;

•

future acquisitions, including the consideration to be paid and ~~benefits expense”~~the timing of consummation;

•

potential growth opportunities available to ~~“operating revenue,” both non-U.S. GAAP measures, are the most appropriate measures to assess the annual cost~~our businesses;

•

potential impact of investments in our technology infrastructure and data science capabilities;

•

recruitment and retention of our managing directors and employees;

•

potential levels of compensation ~~and provide the most meaningful basis for comparison of~~expense, including awarded compensation and benefits expense ~~between present, historical~~ and ~~future years. “Awarded~~adjusted compensation and benefits ~~expense”~~expense, and non-compensation expense;

•

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

•

likelihood of success and impact of litigation;

•

expected tax rates, including effective tax rates;

•

changes in interest and tax rates;

•

availability of certain tax benefits, including certain potential deductions;

•

potential impact of certain events or circumstances on our financial statements and operations, including the ongoing COVID-19 pandemic;

•

changes in foreign currency exchange rates;

•

effects of competition on our business; and

•

impact of new or future legislation and regulation, including tax laws and regulations, on our business.

The Company is committed to providing timely and accurate information to the investing public, consistent with our legal and regulatory obligations. To that end, the Company uses its website, its twitter account (twitter.com/Lazard) and other social media sites to convey information about our businesses, including the anticipated release of quarterly financial results, quarterly financial, statistical and business-related information, and the posting of updates of AUM in our Asset Management business. Investors can link to Lazard Ltd, Lazard Group and their operating company websites through http://www.lazard.com. Our websites and social media sites and the information contained therein or connected thereto shall not be deemed to be incorporated into this Form 10-Q.

Lazard, one of the world’s preeminent financial advisory and asset management firms, operates from 41 cities across 26 countries in North, Central and South America, Europe, Asia and Australia. With origins dating to 1848, we have long specialized in crafting solutions to the complex financial and strategic challenges of a diverse set of clients around the world, including corporations, governments, institutions, partnerships and individuals.

Our primary business purpose is to serve our clients. Our deep roots in business centers around the world form a global network of relationships with key decision-makers in corporations, governments and investing institutions. This network is both a competitive strength and a powerful resource for Lazard and our clients. As a firm that competes on the quality of our advice, we have two fundamental assets: our people and our reputation.

We operate in cyclical businesses across multiple geographies, industries and asset classes. In recent years, we have expanded our geographic reach, bolstered our industry expertise and continued to build in growth areas. Companies, government bodies and investors seek independent advice with a geographic perspective, deep understanding of capital structure, informed research and knowledge of global, regional and local economic conditions. We believe that our business model as an independent advisor will continue to create opportunities for us to attract new clients and key personnel.

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

•

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

•

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

Economic and global financial market conditions can materially affect our financial performance. As described above, our principal sources of revenue are derived from activities in our Financial Advisory and Asset Management business segments. Our Financial Advisory revenues are primarily dependent on the successful completion of merger, acquisition, restructuring, capital raising or similar transactions, and our Asset Management revenues are primarily driven by the levels of AUM. Weak economic and global financial market conditions can result in a challenging business environment for M&A and capital-raising activity as well as our Asset Management business, but may provide opportunities for our restructuring business.

The global macroeconomic environment remains uncertain, characterized by global inflation at multi-decade highs, rising interest rates, and turbulent capital markets.

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

•

Financial Advisory—The global scale and breadth of our Financial Advisory business enables us to advise on a wide range of strategic and restructuring transactions across a variety of industries. In addition, we continue to invest in our Financial Advisory business by selectively hiring talented senior professionals in an effort to enhance our capabilities and sector expertise in M&A, capital structure and public and private capital markets.

•

Asset Management—In the short to intermediate term, we normally would expect most investor demand to come through financial institutions, and from defined benefit and defined contribution plans in developed economies because of their sheer scope and size. However, uncertainty due to continued concerns about inflation and geopolitical instability may impact our business in a manner that we cannot predict. Over the longer term, and depending upon local and global market conditions, we would expect an increasing share of our AUM to come from the developing economies around the globe, as their retirement systems evolve and individual wealth is increasingly deployed in the financial markets. Given our diversified investment platform and our ability to provide investment solutions for a ~~given year is calculated using “adjusted compensation~~global mix of clients, we believe we are positioned to benefit from opportunities across the asset management industry despite the current challenges that markets have created for that industry. We are continually developing new investment strategies that extend our existing platforms and ~~benefits expense,” also~~assessing potential product acquisitions or other inorganic growth opportunities. Among other efforts, we have been particularly focused on continuing to incorporate environmental, social and governance (“ESG”) considerations, as appropriate, into our investment research and launching strategies that use ESG and sustainability factors to drive long-term investment returns. In

addition, recent examples of growth initiatives include the following: various Quantitative Equity strategies, convertible bond strategies, thematically oriented strategies, a ~~non-U.S. GAAP measure, as modified by the following items:~~long/short credit strategy and a new inflation oriented equity strategy.

~~we deduct amortization expense recorded~~

We operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge continuously, and it is not possible for our management to predict all risks and uncertainties, nor can we assess the impact of all potentially applicable factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. See Item 1A, “Risk Factors” in our Form 10-K. Furthermore, net income and revenue in any period may not be indicative of full-year results or the results of any other period and may vary significantly from year to year and quarter to quarter.

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

Certain market data with respect to our Financial Advisory and Asset Management businesses is included below.

As reflected in the following table, which sets forth global M&A industry statistics, the value and number of all completed transactions, including the subset of completed transactions involving values greater than $500 million, decreased in the first nine months of 2022 as compared to the first nine months of 2021. With respect to announced M&A transactions, the value and number of all transactions, including the subset of announced transactions involving values greater than $500 million, decreased in the first nine months of 2022 as compared to the first nine months of 2021.

Global restructuring activity during the first nine months of 2022, as measured by the number of corporate defaults, increased as compared to 2021. The number of defaulting issuers was 63 in the first nine months of 2022 according to Moody’s Investors Service, Inc., as compared to 41 in 2021.

Net revenue trends in Financial Advisory are generally correlated to the level of completed industry-wide M&A transactions and restructuring transactions occurring subsequent to corporate debt defaults, respectively. However, deviations from this relationship can occur in any given year for a number of reasons. For instance, our results can diverge from industry-wide activity where there are material variances from the level of industry-wide M&A activity in a particular market where Lazard has significant market share, or regarding the relative number of our advisory engagements with respect to larger-sized transactions, and where we are involved in non-public or sovereign advisory assignments.

The percentage change in major equity market indices at September 30, 2022, as compared to such indices at June 30, 2022, December 31, 2021 and at September 30, 2021, is shown in the table below.

The fees that we receive for providing investment management and advisory services are primarily driven by the level of AUM and the nature of the AUM product mix. Accordingly, market movements, foreign currency exchange rate volatility and changes in our AUM product mix will impact the level of revenues we receive from our Asset Management business when comparing periodic results. A substantial portion of our AUM is invested in equities. Movements in AUM during the period generally reflect the changes in equity market indices.

The majority of Lazard’s Financial Advisory net revenue historically has been earned from the successful completion of M&A transactions, restructuring, capital advisory, shareholder advisory, capital raising, sovereign advisory and other strategic advisory matters. The main drivers of Financial Advisory net revenue are overall M&A activity, the level of corporate debt defaults and the environment for capital raising activities, particularly in the industries and geographic markets in which Lazard focuses. In some client engagements, often those involving financially distressed companies, revenue is earned in the form of retainers and similar fees that are contractually agreed upon with each client for each assignment and are not necessarily linked to the completion of a transaction. In addition, Lazard also earns fees from providing strategic advice to clients, with such fees not being dependent on a specific transaction, and may also earn fees in connection with public and private securities offerings. Significant fluctuations in Financial Advisory net revenue can occur over the course of any given year, because a significant portion of such net revenue is earned upon the successful completion of a transaction, restructuring or capital raising activity, the timing of which is uncertain and is not subject to Lazard’s control.

Lazard’s Asset Management segment principally includes Lazard Asset Management LLC (together with its subsidiaries, “LAM”), Lazard Frères Gestion SAS (“LFG”) and Edgewater. Asset Management net revenue is derived from fees for investment management and advisory services provided to clients. As noted above, the main driver of Asset Management net revenue is the level and product mix of AUM, which is generally influenced by the performance of the global equity markets and, to a lesser extent, fixed income markets as well as Lazard’s investment performance, which impacts its ability to successfully attract and retain assets. As a result, fluctuations (including timing thereof) in financial markets and client asset inflows and outflows have a direct effect on Asset Management net revenue and operating income. Asset Management fees are generally based on the level of AUM measured daily, monthly or quarterly, and an increase or reduction in AUM, due to market price fluctuations, currency fluctuations, changes in product mix, or net client asset flows will result in a corresponding increase or decrease in management fees. The majority of our investment advisory contracts are generally terminable at any time or on notice of 30 days or less. Institutional and individual clients, and firms with which we have strategic alliances, can terminate their relationship with us, reduce the aggregate amount of AUM or shift their funds to other types of accounts with different rate structures for a number of reasons, including investment performance, changes in prevailing interest rates and financial market performance. In addition, as Lazard’s AUM includes significant amounts of assets that are denominated in currencies other than U.S. Dollars, changes in the value of the U.S. Dollar relative to foreign currencies will impact the value of Lazard’s AUM and the overall amount of management fees generated by the AUM. Fees vary with the type of assets managed and the vehicle in which they are managed, with higher fees earned on equity assets and alternative investment funds, such as hedge funds and private equity funds, and lower fees earned on fixed income and cash management products.

The Company earns performance-based incentive fees on various investment products, including traditional products and alternative investment funds, such as hedge funds and private equity funds.

For hedge funds, incentive fees are calculated based on a specified percentage of a fund’s net appreciation, in some cases in excess of established benchmarks or thresholds. The Company records incentive fees on traditional products and hedge funds at the end of the relevant performance measurement period, when potential uncertainties regarding the ultimate realizable amounts have been determined. The incentive fee measurement period is generally an annual period (unless an account terminates or redemption occurs during the year). The incentive fees received at the end of the measurement period are not subject to reversal or payback. Incentive fees on hedge funds are often subject to loss carryforward provisions in which losses incurred by the hedge funds in any year are applied against certain gains realized by the hedge funds in future periods before any incentive fees can be earned.

For private equity funds, incentive fees may be earned in the form of a “carried interest” if profits arising from realized investments exceed a specified threshold. Typically, such carried interest is ultimately calculated on a whole-fund basis and, therefore, clawback of carried interest during the life of the fund can occur. As a result, the Company recognizes incentive fees earned on our private equity funds when it is probable that a clawback will not occur.

Corporate segment net revenue consists primarily of investment gains and losses on the Company’s “seed investments” related to our Asset Management business and principal investments in private equity funds, net of hedging activities, as well as gains and losses on investments held in connection with Lazard Fund Interests (“LFI”) and interest income and interest expense. Corporate net revenue also can fluctuate due to changes in the fair value of debt and equity securities, as well as due to changes in interest and currency exchange rates and in the levels of cash, investments and indebtedness.

Corporate segment total assets represented 66% of Lazard’s consolidated total assets as of September 30, 2022, which are attributable to cash and cash equivalents, restricted cash associated with LGAC, investments in debt and equity securities, interests in alternative investment, debt, equity and private equity funds, investments accounted for under the equity method of accounting, deferred tax assets and certain other assets associated with LFB and LGAC.

The majority of Lazard’s operating expenses relate to compensation and benefits for managing directors and employees. Our compensation and benefits expense includes (i) salaries and benefits, (ii) amortization of the relevant portion of previously granted deferred incentive compensation awards, including (a) share-based incentive compensation under the Lazard Ltd 2018 Incentive Compensation Plan, as amended (the “2018 Plan”) and the Lazard Ltd 2008 Incentive Compensation Plan (the “2008 Plan”) and (b) LFI and other similar deferred compensation arrangements (see Note 12 of Notes to Condensed Consolidated Financial Statements), (iii) a provision for discretionary or guaranteed cash bonuses and profit pools and (iv) when applicable, severance payments. Compensation expense in any given period is dependent on many factors, including general economic and market conditions, our actual and forecasted operating and financial performance, staffing levels, estimated forfeiture rates, competitive pay conditions and the nature of revenues earned, as well as the mix between current and deferred compensation.

For interim periods, we use “adjusted compensation and benefits expense” and the ratio of “adjusted compensation and benefits expense” to “operating revenue,” both non-GAAP measures, for comparison of compensation and benefits expense between periods. For the reconciliations and calculations with respect to “adjusted compensation and benefits expense” and related ratios to “operating revenue,” see the table under “Consolidated Results of Operations” below.

We believe that “awarded compensation and benefits expense” and the ratio of “awarded compensation and benefits expense” to “operating revenue,” both non-GAAP measures, when presented in conjunction with accounting principles generally accepted in the United States of America (“U.S. GAAP”) measures, are appropriate measures to assess the annual cost of compensation and provide a meaningful and useful basis for comparison of compensation and benefits expense between present, historical and future years. “Awarded compensation and benefits expense” for a given year is calculated using “adjusted compensation and benefits expense,” also a non-GAAP measure, as modified by the following items:

•

we deduct amortization expense recorded for U.S. GAAP purposes in the fiscal year associated with deferred incentive compensation awards;

•

we add incentive compensation with respect to the fiscal year, which is comprised of:

~~(i)~~

~~the deferred incentive compensation awards granted in the year-end compensation process with respect to the fiscal year (e.g~~., deferred incentive compensation awards granted in 2017 related to the 2016 year-end compensation process), including Performance-based restricted stock unit (“PRSU”) awards (based on the target payout level);

~~(ii)~~

~~the portion of investments in people (e.g., “sign-on” bonuses or retention awards) and other special deferred incentive compensation awards that is applicable to the fiscal year the award becomes effective; and~~

~~(iii)~~

~~amounts in excess of the target payout level for PRSU awards at the end of their respective performance periods;~~

(i)

the deferred incentive compensation awards granted in the year-end compensation process with respect to the fiscal year (e.g., deferred incentive compensation awards granted in 2022 related to the 2021 year-end compensation process), including performance-based restricted stock unit (“PRSU”) and performance-based restricted participation unit (“PRPU”) awards (based on the target payout level);

(ii)

the portion of investments in people (e.g., “sign-on” bonuses or retention awards) and other special deferred incentive compensation awards that is applicable to the fiscal year the award becomes effective; and

(iii)

amounts in excess of the target payout level for PRSU and PRPU awards at the end of their respective performance periods; and

•

we reduce the amounts in (i), (ii) and (iii) above by an estimate of future forfeitures with respect to such ~~awards; and~~awards.

~~we adjust for year-end foreign exchange fluctuations.~~

Compensation and benefits expense is the largest component of our operating expenses. We seek to maintain discipline with respect to compensation, including the rate at which we award deferred compensation. Our goal is to maintain a ratio of awarded compensation and benefits expense to operating revenue and a ratio of adjusted compensation and benefits expense to operating revenue over the cycle in the mid-to high-50s percentage range. While we have implemented policies and initiatives that we believe will assist us in maintaining ratios within this range, there can be no guarantee that we will continue to maintain such ratios, or that our policies or initiatives will not change, in the future. Increased competition for professionals, changes in the macroeconomic environment or the financial markets generally, lower operating revenue resulting from, for example, a decrease in M&A activity, our share of the M&A market or our AUM levels, changes in the mix of revenues from our businesses, investments in our businesses or various other factors could prevent us from achieving this goal; however, in future periods we may benefit from pressure on compensation costs within the financial services industry.

Our operating expenses also include “non-compensation expense”, which includes costs for occupancy and equipment, marketing and business development, technology and information services, professional services, fund administration and outsourced services and other expenses. Our occupancy costs represent a significant portion of our aggregate operating expenses and are subject to change from time to time, particularly as leases for real property expire and are renewed or replaced with new, long-term leases for the same or other real property.

We believe that “adjusted non-compensation expense”, a non-GAAP measure, when presented in conjunction with U.S. GAAP measures provides a meaningful and useful basis for our investors to assess our operating results. For calculations with respect to “adjusted non-compensation expense”, see the table under “Consolidated Results of Operations” below.

Our operating expenses also include “amortization of intangible assets related to acquisitions”.

We do not believe inflation will have a significant affect on our compensation costs as they are substantially variable in nature. However, the rate of inflation may affect our other expenses. To the extent inflation results in rising interest rates and has other effects upon the securities markets or general macroeconomic conditions, it may adversely affect our financial position and results of operations by impacting overall levels of M&A activity, reducing our AUM or net revenue, or otherwise.

Compensation and benefits expense is the largest component of our operating expenses. We seek to maintain discipline with respect to compensation, including the rate at which we award deferred compensation. Our goal is to maintain a ratio of awarded compensation and benefits expense to operating revenue and a ratio of adjusted compensation and benefits expense to operating revenue over the cycle in the mid-to-high-50s percentage range, which compares to 55.8% and 56.5%, respectively, for the year ended December 31, 2016. While we have implemented policies and initiatives that we believe will assist us in maintaining ratios within this range, there can be no guarantee that we will continue to maintain such ratios, or that our policies or initiatives will not change, in the future. We may benefit from pressure on compensation costs within the financial services industry in future periods; however, increased competition for senior professionals, changes in the macroeconomic environment or the financial markets generally, lower operating revenue resulting from, for example, a decrease in M&A activity, our share of the M&A market or our AUM levels, changes in the mix of revenues from our businesses or various other factors could prevent us from achieving this goal.

We believe that “adjusted non-compensation expense”, a non-U.S. GAAP measure, provides a more meaningful basis for our investors to assess our operating results. For calculations with respect to “adjusted non-compensation expense”, see the table under “Consolidated Results of Operations” below.

Our operating expenses also include “amortization and other acquisition-related costs”, which includes the change in fair value of the contingent consideration associated with business acquisitions.

~~Provision for~~Financial Advisory

Net Revenue

456,521

384,976

1,254,621

1,155,328

Operating Expenses

341,578

304,482

956,410

931,612

Operating Income ~~Taxes~~

~~Lazard Ltd, through its subsidiaries, is subject to U.S. federal income taxes on all~~

114,943

80,494

298,211

223,716

Asset Management

Net Revenue

298,797

338,747

926,449

1,051,492

Operating Expenses

233,614

246,094

707,676

747,511

Operating Income

65,183

92,653

218,773

303,981

Corporate

Net Revenue (Loss)

(28,574

)

(6,294

)

(119,888

)

(6,147

)

Operating Expenses (Credit)

(6,590

)

11,894

(46,612

)

66,040

Operating Loss

(21,984

)

(18,188

)

(73,276

)

(72,187

)

Total

Net Revenue

726,744

717,429

2,061,182

2,200,673

Operating Expenses

568,602

562,470

1,617,474

1,745,163

Operating Income

158,142

154,959

443,708

455,510

	As Of
	September 30, 2022		December 31, 2021
Total Assets
Financial Advisory	$	1,175,237	$	1,239,964
Asset Management		912,481		1,128,549
Corporate		4,120,207		4,778,668
Total	$	6,207,925	$	7,147,181

LAZARD LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(UNAUDITED)

(dollars in thousands, except for per share data, unless otherwise noted)

19.	CONSOLIDATED VIEs

	September 30, 2022		December 31, 2021
ASSETS
Cash and cash equivalents	$	3,879	$	3,936
Customers and other receivables		273		305
Investments		180,951		204,062
Other assets		595		328
Total Assets	$	185,698	$	208,631

LIABILITIES
Deposits and other customer payables	$	719	$	50
Other liabilities		517		910
Total Liabilities	$	1,236	$	960

Item 2.

Management’s Discussion and Analysis of ~~its U.S. operating income, as well as on the portion of non-U.S. income attributable to its U.S. subsidiaries. In addition, Lazard Ltd, through its subsidiaries, is subject to state~~Financial Condition and local taxes on its income apportioned to various state and local jurisdictions. Outside the U.S., Lazard Group operates principally through subsidiary corporations that are subject to local income taxes in foreign jurisdictions. Lazard Group is also subject to Unincorporated Business Tax (“UBT”) attributable to its operations apportioned to New York City (see Note 14 of Notes to Condensed Consolidated Financial Statements for additional information).

See “Critical Accounting Policies and Estimates—Income Taxes” below and Notes 14 and 16 of Notes to Condensed Consolidated Financial Statements for additional information regarding income taxes and the tax receivable agreement obligation.

~~Noncontrolling Interests~~

Noncontrolling interests primarily consist of amounts related to Edgewater’s management vehicles that the Company is deemed to control but not own. See Note 11 of Notes to Condensed Consolidated Financial Statements for information regarding the Company’s noncontrolling interests.

~~Consolidated~~ Results of Operations

~~Lazard’s~~

The following discussion should be read in conjunction with Lazard Ltd’s condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q (the “Form 10-Q”), as well as Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) included in our Annual Report on Form 10-K for the year ended December 31, 2021 (the “Form 10-K”). All references to “2022,” “2021,” “third quarter,” “first nine months” or “the period” refer to, as the context requires, the three month and nine month periods ended September 30, 2022 and 2021.

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

•

a decline in general economic conditions or the global or regional financial ~~statements are presented~~markets;

•

a decline in ~~U.S. Dollars. Many of~~ our ~~non-U.S. subsidiaries have~~revenues, for example due to a ~~functional currency (i.e., the currency~~decline in ~~which operational activities are primarily conducted) that is other than the U.S. Dollar, generally the currency~~overall mergers and acquisitions (“M&A”) activity, our share of the ~~country~~M&A market or our assets under management (“AUM”);

•

losses caused by financial or other problems experienced by third parties;

•

losses due to unidentified or unanticipated risks;

•

a lack of liquidity, i.e., ready access to funds, for use in ~~which the subsidiaries are domiciled. Such subsidiaries’ assets~~our businesses; and liabilities are translated into U.S. Dollars using exchange rates as of the respective balance sheet date, while revenue and expenses are translated at average exchange rates during the respective periods based on the daily closing exchange rates. Adjustments that result from translating amounts from a subsidiary’s functional currency are reported as a component of stockholders’ equity. Foreign currency remeasurement gains and losses on transactions in non-functional currencies are included in the condensed consolidated statements of operations.

A portion of our net revenue is derived from transactions that are denominated in currencies other than the U.S. Dollar. Net revenue for the three month period ended September 30, 2017 was positively impacted, and net revenue for the nine month period ended September 30, 2017 was negatively impacted, by exchange rate movements, in each case in comparison to the relevant prior year period. The majority of the impact to net revenue, in both periods, was offset by the impact of the exchange rate movements

•

competitive pressure on our ~~operating expenses during the periods denominated in currencies other than the U.S. Dollar.~~

The condensed consolidated financial statements are prepared in conformity with U.S. GAAP. Selected financial data derived from the Company’s reported condensed consolidated results of operations is set forth below, followed by a more detailed discussion of both the consolidatedbusinesses and ~~business segment results.~~on our ability to retain and attract employees at current compensation levels.

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

Three Months Ended

Nine Months Ended

September 30,

September 30,

2017

2016

2017

2016

($ in thousands)

Net Revenue

$
624,859

$
608,908

$
1,965,503

$
1,641,806

Operating Expenses:

Compensation and benefits

361,787

353,756

1,138,200

959,276

Non-compensation

118,688

105,297

355,390

320,088

Amortization and other acquisition-related costs

172

863

5,003

1,837

Total operating expenses

480,647

459,916

1,498,593

1,281,201

Operating Income

144,212

148,992

466,910

360,605

Provision for income taxes

32,742

36,374

124,109

95,900

Net Income

111,470

112,618

342,801

264,705

Less - Net Income Attributable to Noncontrolling Interests

2,260

82

5,660

4,989

Net Income Attributable to Lazard Ltd

$
109,210

$
112,536

$
337,141

$
259,716

Operating Income, as a % of net revenue

23.1
%

24.5
%

23.8
%

22.0
%

•

~~The tables below describe the components~~financial goals, including ratios of ~~operating revenue, adjusted~~ compensation and benefits expense ~~adjusted non-compensation expense, earnings from~~to operating revenue;

•

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

•

ability to offset stockholder dilution through share repurchases;

•

possible or assumed future results of operations and ~~related key ratios, which are non-U.S. GAAP measures used by~~operating cash flows;

•

strategies and investment policies;

•

financing plans and the ~~Company~~availability of short-term borrowing;

•

competitive position;

•

future acquisitions, including the consideration to ~~manage its business. We believe such non-U.S. GAAP measures provide~~be paid and the ~~most meaningful basis for comparison between present, historical and future periods, as described above.~~timing of consummation;

Three Months Ended

Nine Months Ended

September 30,

September 30,

2017

2016

2017

2016

($ in thousands)

Operating Revenue:

Net revenue

$
624,859

$
608,908

$
1,965,503

$
1,641,806

Adjustments:

Interest expense (a)

12,380

11,430

37,477

34,313

Revenue related to noncontrolling interests (b)

(5,039
)

(2,661
)

(13,079
)

(12,271
)
Gains on investments pertaining to LFI (c)

(4,875
)

(6,909
)

(17,981
)

(4,707
)
Operating revenue

$
627,325

$
610,768

$
1,971,920

$
1,659,141

~~(a)~~

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

~~(b)~~

~~Revenue related to the consolidation of noncontrolling interests is excluded from operating revenue because the Company has no economic interest in such amount.~~

~~(c)~~

Represents changes in the fair value of investments held in connection with LFI and other similar deferred compensation arrangements for which a corresponding equal amount is excluded from compensation and benefits expense.

•

Three Months Ended

Nine Months Ended

September 30,

September 30,

2017

2016

2017

2016

($ in thousands)

Adjusted Compensation and Benefits Expense:

Total compensation and benefits expense

$
361,787

$
353,756

$
1,138,200

$
959,276

Adjustments:

Noncontrolling interests (a)

(2,473
)

(1,763
)

(6,084
)

(5,109
)
Charges pertaining to LFI (b)

(4,875
)

(6,909
)

(17,981
)

(4,707
)
Adjusted compensation and benefits expense

$
354,439

$
345,084

$
1,114,135

$
949,460

Adjusted compensation and benefits expense, as a % of operating
revenue

56.5
%

56.5
%

56.5
%

57.2
%

~~(a)~~

~~Expenses related to the consolidation of noncontrolling interests are excluded because Lazard has no economic interest in such amounts.~~

~~(b)~~

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

Three Months Ended

Nine Months Ended

September 30,

September 30,

2017

2016

2017

2016

($ in thousands)

Adjusted Non-Compensation Expense:

Total non-compensation expense

$
118,688

$
105,297

$
355,390

$
320,088

Adjustments:

Expenses associated with ERP system implementation (a)

(6,530
)

-

(15,391
)

-

Expenses related to office space reorganization (b)

(1,412
)

-

(4,573
)

-

Noncontrolling interests (c)

(239
)

(465
)

(1,338
)

(1,500
)
Adjusted non-compensation expense

$
110,507

$
104,832

$
334,088

$
318,588

Adjusted non-compensation expense, as a % of operating revenue

17.6
%

17.2
%

16.9
%

19.2
%

~~(a)~~

~~Represents expenses associated with the Enterprise Resource Planning (“ERP”) system implementation.~~

~~(b)~~

~~Represents incremental rent expense and lease abandonment costs related to office space reorganization.~~

~~(c)~~

~~Expenses related to the consolidation of noncontrolling interests are excluded because the Company has no economic interest in such amounts.~~potential growth opportunities available to our businesses;

Three Months Ended

Nine Months Ended

September 30,

September 30,

2017

2016

2017

2016

($ in thousands)

Earnings From Operations:

Operating revenue

$
627,325

$
610,768

$
1,971,920

$
1,659,141

Deduct:

Adjusted compensation and benefits expense

(354,439
)

(345,084
)

(1,114,135
)

(949,460
)
Adjusted non-compensation expense

(110,507
)

(104,832
)

(334,088
)

(318,588
)
Earnings from operations

$
162,379

$
160,852

$
523,697

$
391,093

Earnings from operations, as a % of operating revenue

25.9
%

26.3
%

26.6
%

23.6
%

~~Headcount information is set forth below:~~•

potential impact of investments in our technology infrastructure and data science capabilities;

•

recruitment and retention of our managing directors and employees;

As of

September 30,
2017

December 31,
2016

September 30,
2016

Headcount:

Managing Directors:

Financial Advisory

153

149

144

Asset Management

98

92

92

Corporate

21

20

20

Total Managing Directors

272

261

256

Other Employees:

Business segment professionals

1,320

1,276

1,253

All other professionals and support staff

1,269

1,244

1,219

Total

2,861

2,781

2,728

~~Operating Results~~•

~~The Company’s quarterly revenue and profits can fluctuate materially depending on the number, size and timing~~potential levels of completed transactions on which it advised, as well as seasonality, the performance of equity markets and other factors. Accordingly, the revenue and profits in any particular quarter may not be indicative of future results. Lazard management believes that annual results are the most meaningful basis for comparison among present, historical and future periods.

~~Three Months Ended September 30, 2017 versus September 30, 2016~~

~~The Company reported net income attributable to Lazard Ltd of $109 million, as compared to net income of $113 million in the 2016 period.~~

Net revenue increased $16 million, or 3%, with operating revenue increasing $17 million, or 3%, as compared to the 2016 period. Fee revenue from investment banking and other advisory activities decreased $38 million, or 11%, as compared to the 2016 period, primarily due to a decrease in M&A and Strategic Advisory revenue. Asset management fees,compensation expense, including incentive fees, increased $47 million, or 19%, as compared to the 2016 period, primarily due to an increase in average AUM. In the aggregate, interest income, other revenue and interest expense increased $7 million as compared to the 2016 period.

~~Compensation and benefits expense increased $8 million, or 2%, as compared to the 2016 period, primarily associated with increased operating revenue.~~

~~Adjusted~~awarded compensation and benefits expense ~~(which excludes certain items~~ and which we believe allows for improved comparability between periods, as described above) was $354 million, an increase of $9 million, or 3%, as compared to $345 million in the 2016 period. The ratio of adjusted compensation and benefits expense, toand non-compensation expense;

•

potential operating ~~revenue was 56.5% for both~~performance, achievements, productivity improvements, efficiency and cost reduction efforts;

•

likelihood of success and impact of litigation;

•

expected tax rates, including effective tax rates;

•

changes in interest and tax rates;

•

availability of certain tax benefits, including certain potential deductions;

•

potential impact of certain events or circumstances on our financial statements and operations, including the ~~2017 and 2016 periods and 56.5% for full-year 2016.~~ongoing COVID-19 pandemic;

~~Non-compensation expense increased $13 million, or 13%, as compared~~

•

changes in foreign currency exchange rates;

•

expectations with respect to the ~~2016 period,~~economy, the securities markets, the market for mergers, acquisitions, restructuring and other financial advisory activity, the market for asset management activity and other macroeconomic, regional and industry trends;

•

effects of competition on our business; and

•

impact of new or future legislation and regulation, including tax laws and regulations, on our business.

The Company is committed to providing timely and accurate information to the investing public, consistent with our legal and regulatory obligations. To that end, the Company uses its website, its twitter account (twitter.com/Lazard) and other social media sites to convey information about our businesses, including the anticipated release of quarterly financial results, quarterly financial, statistical and business-related information, and the posting of updates of AUM in our Asset Management business. Investors can link to Lazard Ltd, Lazard Group and their operating company websites through http://www.lazard.com. Our websites and social media sites and the information contained therein or connected thereto shall not be deemed to be incorporated into this Form 10-Q.

Business Summary

Our primary business purpose is to serve our clients. Our deep roots in business centers around the world form a global network of relationships with key decision-makers in corporations, governments and investing institutions. This network is both a competitive strength and a powerful resource for Lazard and our clients. As a firm that competes on the quality of our advice, we have two fundamental assets: our people and our reputation.

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

•

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

•

Our consolidated net revenue was derived from the following segments:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2022			2021			2022			2021
Financial Advisory		63	%		54	%		61	%		52	%
Asset Management		41			47			45			48
Corporate		(4	)		(1	)		(6	)		-
Total		100	%		100	%		100	%		100	%

Business Environment and Outlook

The global macroeconomic environment remains uncertain, characterized by global inflation at multi-decade highs, rising interest rates, and turbulent capital markets.

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

•

Asset Management—In the short to intermediate term, we normally would expect most investor demand to come through financial institutions, and from defined benefit and defined contribution plans in developed economies because of their sheer scope and size. However, uncertainty due to continued concerns about inflation and geopolitical instability may impact our business in a manner that we cannot predict. Over the longer term, and depending upon local and global market conditions, we would expect an increasing share of our AUM to come from the developing economies around the globe, as their retirement systems evolve and individual wealth is increasingly deployed in the financial markets. Given our diversified investment platform and our ability to provide investment solutions for a global mix of clients, we believe we are positioned to benefit from opportunities across the asset management industry despite the current challenges that markets have created for that industry. We are continually developing new investment strategies that extend our existing platforms and assessing potential product acquisitions or other inorganic growth opportunities. Among other efforts, we have been particularly focused on continuing to incorporate environmental, social and governance (“ESG”) considerations, as appropriate, into our investment research and launching strategies that use ESG and sustainability factors to drive long-term investment returns. In

addition, recent examples of growth initiatives include the following: various Quantitative Equity strategies, convertible bond strategies, thematically oriented strategies, a long/short credit strategy and a new inflation oriented equity strategy.

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

Certain market data with respect to our Financial Advisory and Asset Management businesses is included below.

Financial Advisory

	Three Months Ended							Nine Months Ended
	September 30,							September 30,
	2022		2021		% Incr / (Decr)			2022		2021		% Incr / (Decr)
	($ in billions)
Completed M&A Transactions:
All deals:
Value	$	771	$	1,461		(47	)%	$	3,007	$	3,763		(20	)%
Number		6,220		10,093		(38	)%		26,247		29,578		(11	)%
Deals Greater than $500 million:
Value	$	617	$	1,125		(45	)%	$	2,328	$	2,853		(18	)%
Number		276		486		(43	)%		988		1,208		(18	)%
Announced M&A Transactions:
All deals:
Value	$	733	$	1,561		(53	)%	$	2,982	$	4,474		(33	)%
Number		7,027		10,206		(31	)%		28,167		30,080		(6	)%
Deals Greater than $500 million:
Value	$	535	$	1,232		(57	)%	$	2,218	$	3,527		(37	)%
Number		278		515		(46	)%		968		1,432		(32	)%

Source: Dealogic as of October 4, 2022.

Asset Management

The percentage change in major equity market indices at September 30, 2022, as compared to such indices at June 30, 2022, December 31, 2021 and at September 30, 2021, is shown in the table below.

	Percentage Changes September 30, 2022 vs.
	June 30, 2022			December 31, 2021			September 30, 2021
MSCI World Index		(6	)%		(25	)%		(20	)%
Euro Stoxx		(4	)%		(20	)%		(15	)%
MSCI Emerging Market		(12	)%		(27	)%		(28	)%
S&P 500		(5	)%		(24	)%		(15	)%

Financial Statement Overview

Net Revenue

The Company earns performance-based incentive fees on various investment products, including traditional products and alternative investment funds, such as hedge funds and private equity funds.

For hedge funds, incentive fees are calculated based on a specified percentage of a fund’s net appreciation, in some cases in excess of established benchmarks or thresholds. The Company records incentive fees on traditional products and hedge funds at the end of the relevant performance measurement period, when potential uncertainties regarding the ultimate realizable amounts have been determined. The incentive fee measurement period is generally an annual period (unless an account terminates or redemption occurs during the year). The incentive fees received at the end of the measurement period are not subject to reversal or payback. Incentive fees on hedge funds are often subject to loss carryforward provisions in which losses incurred by the hedge funds in any year are applied against certain gains realized by the hedge funds in future periods before any incentive fees can be earned.

For private equity funds, incentive fees may be earned in the form of a “carried interest” if profits arising from realized investments exceed a specified threshold. Typically, such carried interest is ultimately calculated on a whole-fund basis and, therefore, clawback of carried interest during the life of the fund can occur. As a result, the Company recognizes incentive fees earned on our private equity funds when it is probable that a clawback will not occur.

Operating Expenses

The majority of Lazard’s operating expenses relate to compensation and benefits for managing directors and employees. Our compensation and benefits expense includes (i) salaries and benefits, (ii) amortization of the relevant portion of previously granted deferred incentive compensation awards, including (a) share-based incentive compensation under the Lazard Ltd 2018 Incentive Compensation Plan, as amended (the “2018 Plan”) and the Lazard Ltd 2008 Incentive Compensation Plan (the “2008 Plan”) and (b) LFI and other similar deferred compensation arrangements (see Note 12 of Notes to Condensed Consolidated Financial Statements), (iii) a provision for discretionary or guaranteed cash bonuses and profit pools and (iv) when applicable, severance payments. Compensation expense in any given period is dependent on many factors, including general economic and market conditions, our actual and forecasted operating and financial performance, staffing levels, estimated forfeiture rates, competitive pay conditions and the nature of revenues earned, as well as the mix between current and deferred compensation.

•

we deduct amortization expense recorded for U.S. GAAP purposes in the fiscal year associated with deferred incentive compensation awards;

•

we add incentive compensation with respect to the ~~ERP system implementation and expenses related~~fiscal year, which is comprised of:

(i)

the deferred incentive compensation awards granted in the year-end compensation process with respect to ~~office space reorganization, as well as higher mutual fund service fees~~the fiscal year (e.g., deferred incentive compensation awards granted in 2022 related to the ~~growth~~2021 year-end compensation process), including performance-based restricted stock unit (“PRSU”) and performance-based restricted participation unit (“PRPU”) awards (based on the target payout level);

(ii)

the portion of investments in ~~AUM~~people (e.g., “sign-on” bonuses or retention awards) and ~~higher marketing and business development expenses. Adjusted non-compensation~~

~~expense, which excludes non-compensation costs related~~other special deferred incentive compensation awards that is applicable to the ~~ERP system implementation, office space reorganization~~fiscal year the award becomes effective; and noncontrolling interests, increased $6 million, or 5%, as compared to the 2016 period. The ratio of adjusted non-compensation expense to operating revenue was 17.6% for the 2017 period, as compared to 17.2%

(iii)

amounts in ~~the 2016 period.~~

~~Amortization and other acquisition-related costs decreased $1 million as compared to the 2016 period, primarily due to the change in the fair market value of contingent consideration.~~

~~Operating income decreased $5 million, or 3%, as compared to the 2016 period.~~

~~Earnings from operations increased $2 million, or 1%, as compared to the 2016 period, and, as a percentage of operating revenue, was 25.9%, as compared to 26.3% in the 2016 period.~~

~~The provision for income taxes reflects an effective tax rate of 22.7%, as compared to 24.4% for the 2016 period.~~ ~~The effective tax rate decreased primarily due to the change in the geographic mix of earnings.~~

~~Net income attributable to noncontrolling interests increased $2 million as compared to the 2016 period.~~

~~Nine Months Ended September 30, 2017 versus September 30, 2016~~

~~The Company reported net income attributable to Lazard Ltd of $337 million, as compared to net income of $260 million in the 2016 period.~~

Net revenue increased $324 million, or 20%, with operating revenue increasing $313 million, or 19%, as compared to the 2016 period. Fee revenue from investment banking and other advisory activities increased $156 million, or 17%, as compared to the 2016 period, due to an increase in M&A and Strategic Advisory and Restructuring revenue. Asset management fees, including incentive fees, increased $139 million, or 19%, as compared to the 2016 period, primarily due to an increase in average AUM. In the aggregate, interest income, other revenue and interest expense increased $29 million as compared to the 2016 period, primarily due to gains in the 2017 period attributable to investments held in connection with LFI.

~~Compensation and benefits expense increased $179 million, or 19%, as compared to the 2016 period, primarily associated with increased operating revenue.~~

Adjusted compensation and benefits expense (which excludes certain items and which we believe allows for improved comparability between periods, as described above) was $1,114 million, an increase of $165 million, or 17%, as compared to $949 million in the 2016 period. The ratio of adjusted compensation and benefits expense to operating revenue was 56.5% for the 2017 period, as compared to 57.2% for the 2016 period and 56.5% for full-year 2016.

Non-compensation expense increased $35 million, or 11%, as compared to the 2016 period, primarily due to expenses associated with the ERP system implementation and expenses related to office space reorganization, as well as higher mutual fund service fees related to the growth in AUM and higher marketing and business development expenses. Adjusted non-compensation expense, which excludes non-compensation costs related to the ERP system implementation, office space reorganization and noncontrolling interests, increased $16 million, or 5%, as compared to the 2016 period. The ratio of adjusted non-compensation expense to operating revenue was 16.9% for the 2017 period, as compared to 19.2% in the 2016 period.

~~Amortization and other acquisition-related costs increased $3 million as compared to the 2016 period, primarily due to the change in the fair market value of contingent consideration.~~

~~Operating income increased $106 million, or 29%, as compared to the 2016 period.~~

~~Earnings from operations increased $133 million, or 34%, as compared to the 2016 period, and, as a percentage of operating revenue, was 26.6%, as compared to 23.6% in the 2016 period.~~

~~The provision for income taxes reflects an effective tax rate of 26.6% for both the 2017 and the 2016 periods.~~ The effective tax rate reflects the Company’s adoption of new accounting guidance on share-based incentive compensation and the change in the geographic mix of earnings. See Notes 2 and 14 of Notes to Condensed Consolidated Financial Statements.

~~Net income attributable to noncontrolling interests increased $1 million, or 13%, as compared to the 2016 period.~~

~~Business Segments~~

The following is a discussion of net revenue and operating income for the Company’s segments: Financial Advisory, Asset Management and Corporate. Each segment’s operating expenses include (i) compensation and benefits expenses that are incurred directly in supportexcess of the ~~segment~~target payout level for PRSU and ~~(ii) other operating expenses, which include directly incurred expenses for occupancy~~PRPU awards at the end of their respective performance periods; and equipment, marketing and business development, technology and information services, professional services, fund administration and outsourcing, and indirect support costs (including compensation and benefits expense and other operating expenses related thereto) for administrative services. Such administrative services include, but are not limited to, accounting, tax, human resources, legal, information technology, facilities management and senior management activities. Such support costs are allocated to the relevant segments based on various statistical drivers such as revenue, headcount, square footage and other factors.

~~Effective January 1, 2017,~~•

we reduce the ~~Company’s reporting~~amounts in (i), (ii) and (iii) above by ~~geographic region was transitioned from the Company’s previously disclosed North America, Europe and rest~~an estimate of ~~the world regions~~future forfeitures with respect to ~~the Americas; Europe, Middle East and Africa (“EMEA”); and Asia Pacific. Comparable prior year information has been recast to reflect our revised geographic presentation.~~such awards.

Our operating expenses also include “amortization of intangible assets related to acquisitions”.

Financial Advisory

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

Net Revenue

456,521

384,976

1,254,621

1,155,328

Operating Expenses

341,578

304,482

956,410

931,612

Operating Income

114,943

80,494

298,211

223,716

Asset Management

Net Revenue

298,797

338,747

926,449

1,051,492

Operating Expenses

233,614

246,094

707,676

747,511

Operating Income

65,183

92,653

218,773

303,981

Corporate

Net Revenue (Loss)

(28,574

)

(6,294

)

(119,888

)

(6,147

)

Operating Expenses (Credit)

(6,590

)

11,894

(46,612

)

66,040

Operating Loss

(21,984

)

(18,188

)

(73,276

)

(72,187

)

Total

Net Revenue

726,744

717,429

2,061,182

2,200,673

Operating Expenses

568,602

562,470

1,617,474

1,745,163

Operating Income

158,142

154,959

443,708

455,510

Three Months Ended

Nine Months Ended

September 30,

September 30,

2017

2016

2017

2016

($ in thousands)

Net Revenue

$
305,890

$
343,488

$
1,052,584

$
896,467

Operating Expenses

245,465

258,865

821,935

719,670

Operating Income

$
60,425

$
84,623

$
230,649

$
176,797

Operating Income, as a % of net revenue

19.8
%

24.6
%

21.9
%

19.7
%

~~(a)~~

~~Source: Dealogic as of October 5, 2017.~~

Management’s Discussion and Analysis of Financial ~~Advisory net revenue is set forth below~~Condition and Results of Operations

The following discussion should be read in conjunction with Lazard Ltd’s condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q (the “Form 10-Q”), as well as Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) included in our Annual Report on Form 10-K for the year ended December 31, 2021 (the “Form 10-K”). All references to “2022,” “2021,” “third quarter,” “first nine months” or “the period” refer to, as the context requires, the three month and nine month periods ended September 30, 2022 and 2021.

•

a decline in ~~percentage terms~~general economic conditions or the global or regional financial markets;

•

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

•

losses caused by financial or other problems experienced by third parties;

•

losses due to unidentified or unanticipated risks;

•

a lack of liquidity, i.e., ready access to funds, for use in our businesses; and

•

competitive pressure on ~~the Lazard offices that generate Financial Advisory net revenue, which are located in the Americas (primarily in the U.S.~~our businesses and ~~Latin America), EMEA (primarily in the U.K., France, Germany, Italy~~on our ability to retain and ~~Spain)~~attract employees at current compensation levels.

•

financial goals, including ratios of compensation and benefits expense to operating revenue;

•

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

•

ability to offset stockholder dilution through share repurchases;

•

possible or assumed future results of operations and operating cash flows;

•

strategies and investment policies;

•

financing plans and the ~~Asia Pacific region (primarily in Australia)~~availability of short-term borrowing;

•

competitive position;

•

future acquisitions, including the consideration to be paid and ~~therefore may not be reflective~~the timing of ~~the geography in which the clients are located.~~consummation;

Three Months Ended

Nine Months Ended

September 30,

September 30,

2017

2016

2017

2016

Americas

61
%

57
%

59
%

59
%
EMEA

34

40

36

38

Asia Pacific

5

3

5

3

Total

100
%

100
%

100
%

100
%

•

potential growth opportunities available to our businesses;

•

recruitment and retention of our managing directors and ~~many~~employees;

•

potential levels of ~~its professionals have significant experience,~~compensation expense, including awarded compensation and ~~many~~benefits expense and adjusted compensation and benefits expense, and non-compensation expense;

•

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

•

likelihood of ~~them are able~~success and impact of litigation;

•

expected tax rates, including effective tax rates;

•

changes in interest and tax rates;

•

availability of certain tax benefits, including certain potential deductions;

•

potential impact of certain events or circumstances on our financial statements and operations, including the ongoing COVID-19 pandemic;

•

changes in foreign currency exchange rates;

•

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

•

effects of competition on our business; and

•

impact of new or future legislation and regulation, including tax laws and regulations, on our business.

The Company is committed to providing timely and accurate information to the investing public, consistent with our legal and regulatory obligations. To that end, the Company uses its website, its twitter account (twitter.com/Lazard) and other social media sites to convey information about our businesses, including the anticipated release of quarterly financial results, quarterly financial, statistical and business-related information, and the posting of updates of AUM in our Asset Management business. Investors can link to Lazard Ltd, Lazard Group and their operating company websites through http://www.lazard.com. Our websites and social media sites and the information contained therein or connected thereto shall not be deemed to be incorporated into this Form 10-Q.

Our primary business purpose is to serve our clients. Our deep roots in business centers around the world form a global network of relationships with key decision-makers in corporations, governments and investing institutions. This network is both a competitive strength and a powerful resource for Lazard and our clients. As a firm that competes on the quality of our advice, we have two fundamental assets: our people and our reputation.

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

•

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

•

The global macroeconomic environment remains uncertain, characterized by global inflation at multi-decade highs, rising interest rates, and turbulent capital markets.

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

•

Financial Advisory—The global scale and breadth of our Financial Advisory business enables us to advise on ~~M&A,~~a wide range of strategic ~~advisory matters~~ and restructuring transactions ~~depending on clients’ needs. This flexibility allows Lazard~~across a variety of industries. In addition, we continue to ~~better match its~~invest in our Financial Advisory business by selectively hiring talented senior professionals ~~with the counter-cyclical business cycles of mergers~~in an effort to enhance our capabilities and ~~acquisitions and restructurings. While Lazard measures revenue by practice area, Lazard does not separately measure the costs or profitability of~~sector expertise in M&A, ~~services~~capital structure and public and private capital markets.

•

Asset Management—In the short to intermediate term, we normally would expect most investor demand to come through financial institutions, and from defined benefit and defined contribution plans in developed economies because of their sheer scope and size. However, uncertainty due to continued concerns about inflation and geopolitical instability may impact our business in a manner that we cannot predict. Over the longer term, and depending upon local and global market conditions, we would expect an increasing share of our AUM to come from the developing economies around the globe, as ~~compared~~their retirement systems evolve and individual wealth is increasingly deployed in the financial markets. Given our diversified investment platform and our ability to provide investment solutions for a global mix of clients, we believe we are positioned to benefit from opportunities across the asset management industry despite the current challenges that markets have created for that industry. We are continually developing new investment strategies that extend our existing platforms and assessing potential product acquisitions or other inorganic growth opportunities. Among other efforts, we have been particularly focused on continuing to incorporate environmental, social and governance (“ESG”) considerations, as appropriate, into our investment research and launching strategies that use ESG and sustainability factors to drive long-term investment returns. In