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 every Interactive Data File required to be submitted 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 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.

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 April ~~24, 2020,~~23, 2021, in ~~addition~~additions to profit participation interests, there were 2 managing member ~~interests outstanding.~~interests..

When we use the terms “Lazard Group”,”Lazard”, “we”, “us”, “our” and “the Company”, we mean Lazard Group LLC, a Delaware limited liability company, that is the current holding company for the subsidiaries that conduct our businesses. Lazard Ltd is a Bermuda exempt company whose shares of Class A common stock (“common stock”), the only class of common stock of Lazard outstanding, are publicly traded on the New York Stock Exchange under the symbol “LAZ”. Lazard Ltd’s subsidiaries include Lazard Group and their respective subsidiaries. Lazard Ltd’s primary operating asset is its indirect ownership as of March 31, ~~2020~~2021 of all of the common membership interests in Lazard Group. Lazard Ltd controls Lazard Group through two of its indirect wholly-owned subsidiaries that are co-managing members of Lazard Group.

Lazard Group has granted profit participation interests in Lazard Group to certain of its managing directors. The profit participation interests are discretionary profits interests that are intended to enable Lazard Group to compensate its managing directors in a manner consistent with historical practices. Lazard Group has also granted profits interest participation rights to certain of its managing directors. See Note 13 of Notes to Condensed Consolidated Financial Statements.

	March 31,		December 31,		March 31,		December 31,
	2020		2019		2021		2020
ASSETS
Cash and cash equivalents	$	780,529	$	1,164,135	$	967,324	$	1,319,712
Deposits with banks and short-term investments		1,080,737		1,180,686		1,014,145		1,134,463
Cash deposited with clearing organizations and other segregated cash		41,398		43,280
Receivables (net of allowance for doubtful accounts of $31,284 and $27,130 at March 31, 2020 and December 31, 2019, respectively):
Restricted cash						615,090		44,488
Receivables (net of allowance for doubtful accounts of $34,997 and $36,649 at March 31, 2021 and December 31, 2020, respectively):
Fees		478,847		537,342		555,993		621,880
Customers and other		109,710		125,697		183,376		121,261
Lazard Ltd subsidiaries		68,107		34,612		134,748		131,380
		656,664		697,651		874,117		874,521
Investments		505,753		531,995		782,351		658,532
Property (net of accumulated amortization and depreciation of $369,568 and $366,880 at March 31, 2020 and December 31, 2019, respectively)		219,491		218,871
Property (net of accumulated amortization and depreciation of $397,910 and $401,505 at March 31, 2021 and December 31, 2020, respectively)						249,934		256,908
Operating lease right-of-use assets		532,873		551,050		491,817		513,616
Goodwill and other intangible assets (net of accumulated amortization of $66,185 and $65,757 at March 31, 2020 and December 31, 2019, respectively)		337,391		351,797
Goodwill and other intangible assets (net of accumulated amortization of $67,516 and $67,501 at March 31, 2021 and December 31, 2020, respectively)						359,535		361,892
Deferred tax assets		46,732		55,728		34,068		48,166
Other assets		403,226		256,435		448,191		303,449
Total Assets	$	4,604,794	$	5,051,628	$	5,836,572	$	5,515,747

	March 31,			December 31,			March 31,			December 31,
	2020			2019			2021			2020
LIABILITIES AND MEMBERS’ EQUITY
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND MEMBERS’ EQUITY
Liabilities:
Deposits and other customer payables	$	1,144,992		$	1,246,200		$	1,239,716		$	1,201,150
Accrued compensation and benefits		338,161			599,910			485,224			732,692
Operating lease liabilities		623,477			643,808			581,858			606,600
Senior debt								1,683,362			1,682,741
Payable to Lazard Ltd subsidiaries		9,378			63,399			54,963			59,584
Senior debt		1,680,204			1,679,562
Deferred tax liabilities		955			3,497			2,202			1,041
Other liabilities		522,768			527,926			562,087			521,070
Total Liabilities		4,319,935			4,764,302			4,609,412			4,804,878
Commitments and contingencies
Redeemable noncontrolling interests								575,000			-
MEMBERS’ EQUITY
Members' equity (net of 7,418,177 and 7,675,688 shares of Lazard Ltd Class A common stock, at a cost of $273,040 and $304,083 at March 31, 2020 and December 31, 2019, respectively)		501,490			469,324
Members' equity (net of 6,635,606 and 6,911,911 shares of Lazard Ltd Class A common stock, at a cost of $257,600 and $254,406 at March 31, 2021 and December 31, 2020, respectively)								763,859			818,430
Accumulated other comprehensive loss, net of tax		(286,387	)		(250,404	)		(211,082	)		(193,446	)
Total Lazard Group LLC Members' Equity		215,103			218,920			552,777			624,984
Noncontrolling interests		69,756			68,406			99,383			85,885
Total Members’ Equity		284,859			287,326			652,160			710,869
Total Liabilities and Members’ Equity	$	4,604,794		$	5,051,628
Total Liabilities, Redeemable Noncontrolling Interests and Members’ Equity							$	5,836,572		$	5,515,747

	Three Months Ended						Three Months Ended
	March 31,						March 31,
	2020			2019			2021		2020
REVENUE
Investment banking and other advisory fees	$	297,673		$	319,355		$	316,940	$	297,673
Asset management fees		269,218			292,438			326,950		269,218
Interest income		2,252			3,564			1,382		2,252
Other		(11,488	)		29,534			33,835		(11,488	)
Total revenue		557,655			644,891			679,107		557,655
Interest expense		20,075			18,889			19,758		20,075
Net revenue		537,580			626,002			659,349		537,580
OPERATING EXPENSES
Compensation and benefits		318,283			370,248			399,309		318,283
Occupancy and equipment		32,045			28,118			34,580		32,045
Marketing and business development		20,136			27,925			6,640		20,136
Technology and information services		31,316			32,025			33,622		31,316
Professional services		14,236			13,801			14,596		14,236
Fund administration and outsourced services		26,390			28,930			29,279		26,390
Amortization and other acquisition-related costs (benefits)		428			(684	)
Amortization of intangible assets related to acquisitions								15		428
Other		9,016			16,776			4,915		9,016
Total operating expenses		451,850			517,139			522,956		451,850
OPERATING INCOME		85,730			108,863			136,393		85,730
Provision for income taxes		15,995			15,988			26,777		15,995
NET INCOME		69,735			92,875			109,616		69,735
LESS - NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS		(5,691	)		(566	)
LESS - NET INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTERESTS								3,527		(5,691	)
NET INCOME ATTRIBUTABLE TO LAZARD GROUP LLC	$	75,426		$	93,441		$	106,089	$	75,426

	Three Months Ended						Three Months Ended
	March 31,						March 31,
	2020			2019			2021			2020
NET INCOME	$	69,735		$	92,875		$	109,616		$	69,735
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
Currency translation adjustments		(46,966	)		2,929			(20,038	)		(46,966	)
Employee benefit plans:
Prior service costs (net of tax expense of $36 for the three months ended March 31, 2020)		175			-
Actuarial gain (net of tax expense of $1,790 and $300 for the three months ended March 31, 2020 and 2019, respectively)		8,913			49
Adjustment for items reclassified to earnings (net of tax expense of $338 and $178 for the three months ended March 31, 2020 and 2019, respectively)		1,895			1,132
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX		(35,983	)		4,110
Actuarial gain (net of tax expense of $762 and $1,826 for the three months ended March 31, 2021 and 2020, respectively)								1,065			9,088
Adjustment for items reclassified to earnings (net of tax expense of $381 and $338 for the three months ended March 31, 2021 and 2020, respectively)								1,336			1,895
OTHER COMPREHENSIVE LOSS, NET OF TAX								(17,637	)		(35,983	)
COMPREHENSIVE INCOME		33,752			96,985			91,979			33,752
LESS - COMPREHENSIVE LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS		(5,691	)		(565	)
LESS - COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTERESTS								3,526			(5,691	)
COMPREHENSIVE INCOME ATTRIBUTABLE TO LAZARD GROUP LLC	$	39,443		$	97,550		$	88,453		$	39,443

	Three Months Ended						Three Months Ended
	March 31,						March 31,
	2020			2019			2021			2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	69,735		$	92,875		$	109,616		$	69,735
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization of property		8,908			8,108			9,285			8,908
Noncash lease expense		15,453			11,938			17,172			15,453
Amortization of deferred expenses and share-based incentive compensation		100,952			104,809			100,178			100,952
Amortization and other acquisition-related costs (benefits)		428			(684	)
Deferred tax provision (benefit)		3,034			(2,326	)
Loss on extinguishment of debt		-			4,243
Amortization of intangible assets related to acquisitions								15			428
Deferred tax provision								13,191			3,034
(Increase) decrease in operating assets and increase (decrease) in operating liabilities:
Receivables-net		26,477			(21,886	)		(10,608	)		26,477
Investments		23,325			(40,160	)		(202,534	)		23,325
Other assets		(171,365	)		(84,911	)		(15,968	)		(171,365	)
Accrued compensation and benefits and other liabilities		(253,157	)		(254,708	)		(140,538	)		(253,157	)
Net cash used in operating activities		(176,210	)		(182,702	)		(120,191	)		(176,210	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property		(11,994	)		(5,867	)		(7,498	)		(11,994	)
Disposals of property		69			70			628			69
Net cash used in investing activities		(11,925	)		(5,797	)		(6,870	)		(11,925	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from:
Issuance of senior debt, net of expenses		-			491,875
Customer deposits		-			185,871
Contributions from noncontrolling interests		-			72
LGAC IPO								575,000			-
Contribution from members								14,000			-
Other financing activities		25			925						25
Payments for:
Senior debt		-			(171,668	)
Customer deposits		(70,652	)		-			(58,739	)		(70,652	)
Distributions to noncontrolling interests		(1,411	)		(591	)		(1,000	)		(1,411	)
Payments of LGAC IPO underwriting fees and other offering costs								(9,308	)		-
Purchase of Class A common stock		(95,227	)		(192,097	)		(122,652	)		(95,227	)
Distributions to members		-			(52,210	)		(13,934	)		-
Settlement of share-based incentive compensation		(66,728	)		(90,657	)		(64,804	)		(66,728	)
Other financing activities		(1,869	)		(3,082	)		(14,321	)		(1,869	)
Net cash provided by (used in) financing activities		(235,862	)		168,438			304,242			(235,862	)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS AND RESTRICTED CASH		(61,440	)		(29,814	)		(79,285	)		(61,440	)
NET DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH		(485,437	)		(49,875	)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH								97,896			(485,437	)
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH— January 1		2,388,101			2,230,388			2,498,663			2,388,101
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH— March 31	$	1,902,664		$	2,180,513		$	2,596,559		$	1,902,664

RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH WITHIN THE CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION:
	March 31,			December 31,			March 31,			December 31,
	2020			2019			2021			2020
Cash and cash equivalents	$	780,529		$	1,164,135		$	967,324		$	1,319,712
Deposits with banks and short-term investments		1,080,737			1,180,686			1,014,145			1,134,463
Cash deposited with clearing organizations and other segregated cash		41,398			43,280
Restricted cash								615,090			44,488
TOTAL CASH AND CASH EQUIVALENTS AND RESTRICTED CASH	$	1,902,664		$	2,388,101		$	2,596,559		$	2,498,663

Accumulated
Other
Comprehensive

Total
Lazard Group

Total

Members'

Income (Loss),

Members'

Noncontrolling

Members'

Equity

Net of Tax

Equity

Interests

Equity

Balance - January 1, 2019 (*)

$
758,705

$
(228,660
)

$
530,045

$
52,707

$
582,752

Comprehensive income (loss):

Net income (loss)

93,441

93,441

(566
)

92,875

Other comprehensive income - net of tax

4,109

4,109

1

4,110

Amortization of share-based incentive
   compensation

84,681

84,681

84,681

Distributions to members and noncontrolling interests, net

(52,210
)

(52,210
)

(519
)

(52,729
)
Purchase of Class A common stock

(192,097
)

(192,097
)

(192,097
)
Delivery of Class A common stock in
   connection with share-based incentive
   compensation and related tax benefit
   of $88

(90,569
)

(90,569
)

(90,569
)
Business acquisitions and related equity
   transactions:

Class A common stock issuable
   (including related amortization)

53

53

53

Other

(2,231
)

(2,231
)

(2,231
)
Balance - March 31, 2019 (*)

$
599,773

$
(224,551
)

$
375,222

$
51,623

$
426,845

~~(*)~~ ~~At both January 1, 2019 and March 31, 2019, in addition to profit participation interests, there were two managing member interests.~~

				Accumulated Other Comprehensive			Total Lazard Group						Total						Accumulated Other Comprehensive			Total Lazard Group						Total
	Members'			Income (Loss),			Members'			Noncontrolling			Members'			Members'			Income (Loss),			Members'			Noncontrolling			Members'
	Equity			Net of Tax			Equity			Interests			Equity			Equity			Net of Tax			Equity			Interests			Equity
Balance - January 1, 2020 (*)	$	469,324		$	(250,404	)	$	218,920		$	68,406		$	287,326		$	469,324		$	(250,404	)	$	218,920		$	68,406		$	287,326
Adjustment for cumulative effect on prior years from the adoption of new accounting guidance		(7,571	)					(7,571	)					(7,571	)		(7,571	)					(7,571	)					(7,571	)
Balance, as adjusted January 1, 2020		461,753			(250,404	)		211,349			68,406			279,755			461,753			(250,404	)		211,349			68,406			279,755
Comprehensive income (loss):
Net income (loss)		75,426						75,426			(5,691	)		69,735			75,426						75,426			(5,691	)		69,735
Other comprehensive loss - net of tax					(35,983	)		(35,983	)					(35,983	)					(35,983	)		(35,983	)					(35,983	)
Amortization of share-based incentive compensation		72,161						72,161						72,161			72,161						72,161						72,161
Distributions to members and noncontrolling interests, net		-						-			(1,411	)		(1,411	)		-						-			(1,411	)		(1,411	)
Purchase of Class A common stock		(95,227	)					(95,227	)					(95,227	)		(95,227	)					(95,227	)					(95,227	)
Delivery of Class A common stock in connection with share-based incentive compensation and related tax benefit of $3		(66,725	)					(66,725	)					(66,725	)		(66,725	)					(66,725	)					(66,725	)
Contributions from members		55,941						55,941						55,941			55,941						55,941						55,941
Consolidated VIEs								-			8,452			8,452									-			8,452			8,452
Other		(1,839	)					(1,839	)					(1,839	)		(1,839	)					(1,839	)					(1,839	)
Balance - March 31, 2020 (*)	$	501,490		$	(286,387	)	$	215,103		$	69,756		$	284,859		$	501,490		$	(286,387	)	$	215,103		$	69,756		$	284,859

~~(*)~~ ~~At both January 1, 2020 and March~~See notes to condensed consolidated financial statements.

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

(dollars in ~~addition to profit participation interests, there were two managing member interests.~~thousands)

				Accumulated Other Comprehensive			Total Lazard Group						Total			Redeemable
	Members'			Income (Loss),			Members'			Noncontrolling			Members'			Noncontrolling
	Equity			Net of Tax			Equity			Interests			Equity			Interests
Balance - January 1, 2021	$	818,430		$	(193,446	)	$	624,984		$	85,885		$	710,869		$	-
Comprehensive income (loss):
Net income		106,089						106,089			3,527			109,616
Other comprehensive loss - net of tax					(17,636	)		(17,636	)		(1	)		(17,637	)
Amortization of share-based incentive compensation		68,191						68,191						68,191
Distributions to members and noncontrolling interests, net		(13,934	)					(13,934	)		(1,000	)		(14,934	)
Purchase of Class A common stock		(122,652	)					(122,652	)					(122,652	)
Delivery of Class A common stock in connection with share-based incentive compensation and related tax expense of $34		(64,838	)					(64,838	)					(64,838	)
Contributions from members		14,000						14,000						14,000
Transfer of Class A common stock to Lazard Ltd Subsidiaries		4,967						4,967						4,967
Consolidated VIEs								-			7,775			7,775
Contribution from redeemable noncontrolling interests, net								-						-			534,075
Change in redemption value of redeemable noncontrolling interests		(44,122	)					(44,122	)		3,197			(40,925	)		40,925
Other		(2,272	)					(2,272	)					(2,272	)
Balance - March 31, 2021	$	763,859		$	(211,082	)	$	552,777		$	99,383		$	652,160		$	575,000

The accompanying condensed consolidated financial statements are those of Lazard Group LLC and its subsidiaries (collectively referred to as “Lazard Group”, “we” or the “Company”). Lazard Group is a Delaware limited liability company, which is governed by an Amended and Restated Operating Agreement dated as of February 4, 2019 (the “Operating Agreement”).

Lazard Ltd, a Bermuda holding company, and its subsidiaries (collectively referred to as “Lazard Ltd”), including its indirect investment in Lazard Group, is one of the world’s preeminent financial advisory and asset management firms and has long specialized 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 March 31, ~~2020~~2021 and December 31, ~~2019.~~2020. Lazard Ltd, through its control of the managing members of Lazard Group, controls Lazard Group.

Lazard Group’s principal operating activities are included in 2 business segments:

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 (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 Group 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 Group’s Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020. The accompanying December 31, ~~2019~~2020 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 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 period ended March 31, ~~2020~~2021 are not indicative of the results to be expected for any future interim or annual period.

The condensed consolidated financial statements include 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:

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.

~~Financial Instruments—Credit Losses: Measurement~~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 ~~Credit Losses on Financial Instruments—In June 2016,~~effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (“Business Combination”). LGACo 1 LLC, a Delaware series limited liability company and the ~~FASB issued new guidance regarding~~Company’s subsidiary, is the ~~measurement~~sponsor of ~~credit losses on financial instruments.~~LGAC. The ~~new guidance replaces~~Company controls LGAC through the ~~incurred loss impairment methodology~~sponsor’s ownership of Class B founder shares of LGAC. As a result, both LGAC and the sponsor are consolidated in the ~~current guidance with~~Company’s financial statements.

The proceeds from the LGAC IPO of $575,000 are held in a ~~methodology that reflects current expected credit losses (“CECL”) and requires consideration~~trust account, until the earlier of: (i) the completion of a ~~broader range of reasonable~~Business Combination and ~~supportable information to determine credit loss estimates.~~

~~The Company adopted~~(ii) the ~~new guidance on January 1, 2020 using a modified retrospective approach and recorded a $7,571 cumulative-effect adjustment to retained earnings upon adoption. The impact~~distribution of the ~~new guidance primarily relates~~funds in the trust account to the ~~Company’s fee receivables.~~

~~To comply~~LGAC shareholders in connection with the ~~CECL model,~~redemption of LGAC’s Class A ordinary shares, subject to certain conditions. The cash held in the ~~Company applies~~trust account is recorded in “Restricted Cash” on the condensed consolidated statements of financial condition.

Transaction costs, which consisted of a ~~bad debt charge-off rate, determined based on historical charge-off experience~~net underwriting fee of $8,500, $20,125 of non-cash deferred underwriting fees and ~~adjusted for specific allowance based on current conditions~~$808 of ~~individual customers, to measure~~other offering costs, were charged against the expected credit loss for fee receivables. The Company also performs a qualitative assessment, on a quarterly basis, to monitor economic factors and other uncertainties that may require additional adjustment togross proceeds of the ~~expected credit loss allowance.~~ LGAC IPO as consistent with SEC Staff Accounting Bulletin (SAB) Topic 5.

~~See Note 4 for further details~~“Redeemable noncontrolling interests” of $575,000 associated with the publicly held LGAC Class A ordinary shares are recorded on the Company’s ~~receivables~~condensed consolidated statements of financial condition as of March 31, 2021 at redemption value and ~~allowance for doubtful accounts.~~

~~Intangibles—Goodwill~~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 ~~Other: Simplifying~~will adjust 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 faircarrying value of aredeemable noncontrolling interests to equal the redemption value at the end of each reporting ~~unit’s goodwill with~~period. Increases or decreases in the carrying amount of redeemable noncontrolling interests shall be affected by charges to additional paid-in-capital.

The warrants exercisable for LGAC Class A ordinary shares that ~~goodwill. The new guidance requires entities to measure~~were issued in connection with the LGAC IPO meet the definition of a ~~goodwill impairment loss~~liability under FASB ASC Topic 815 and are classified as ~~the amount by which a reporting unit’s carrying value exceeds its~~derivative liabilities remeasured at fair value ~~limited~~at each balance sheet date until exercised, with changes in fair value each period reported to earnings. See Note 7.

Restricted cash primarily represents LGAC deposits discussed above and other restricted cash deposits made by the ~~carrying amount of goodwill. The FASB also eliminated~~Company, including those to satisfy 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 Company adopted the new guidance on January 1, 2020 and, in accordance with the new guidance, applied it prospectively to goodwill impairment tests performed after the adoption date.clearing organizations.

~~Intangibles—Internal-Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract~~—In August 2018, the FASB issued updated guidance on the accounting for implementation costs incurred in a cloud computing arrangement. The new guidance requires the capitalization of the implementation costs incurred in a cloud computing arrangement to be aligned with the requirements for capitalizing costs incurred to develop or obtain internal-use software. The Company adopted the new guidance as of January 1, 2020 and, in accordance with the new guidance, applied it prospectively to implementation costs incurred after the adoption date.

~~Related Party Guidance for Variable Interest Entities~~—In October 2018, the FASB issued updated guidance that requires consideration of indirect interest held through related parties under common control for determining whether fees paid to decision makers and service providers are variable interests. The amendments are required to be applied retrospectively with a cumulative-effect adjustment. The Company adopted the new guidance as of January 1, 2020 and its application did not have a material impact to the Company’s financial statements.

~~Fair Value Measurement: Changes to the Disclosure Requirements for Fair Value Measurement~~—In August 2018, the FASB issued updated guidance which modifies the disclosure requirements on fair value measurement. The updated guidance eliminates or modifies various required disclosures under the current guidance and includes additional requirements. The additional disclosures related to level 3 fair value measurements are to be applied prospectively and other amendments are to be applied retrospectively. The Company adopted the new guidance on January 1, 2020 and its application did not have a material impact to the Company’s financial statements.

~~Compensation–Retirement Benefits: Changes to the Disclosure Requirements for Defined Benefit Plans~~—In August 2018, the FASB issued updated guidance which modifies the disclosure requirements regarding defined benefit plans and other postretirement plans. The updated guidance eliminates or clarifies certain currently required disclosures and includes additional requirements. The Company adopted the new guidance on January 1, 2020 and will update its annual disclosures in accordance with the new guidance.

Simplifying the Accounting for Income Taxes—In December 2019, the FASB issued new guidance to simplify the accounting for income taxes. The amendments include the removal of certain exceptions and various improvements. These improvements are related to the accounting for franchise tax based on income, evaluation of step up in tax basis of goodwill, allocation of consolidated tax expense to standalone legal entities, recognition of enacted change in tax laws or rates, and other minor changes. The new guidance is effective for annual and interim reporting periods beginning after December 15, ~~2020, with early adoption permitted.~~2020. The Company ~~is currently evaluating~~adopted the new ~~guidance.~~guidance on January 1, 2021. The Company evaluated each of the amendments, and the adoption of the amendments did not have a material impact to the Company’s financial statements.

~~Investment Banking and Other AdvisoryFees~~—Fees for Financial Advisory services are recorded when: (i) a contract with a client has been identified, (ii) the performance obligations in the contract have been identified, (iii) the fee or other transaction price has been determined, (iv) the fee or other transaction price has been allocated to each performance obligation in the contract, and (v) the Company has satisfied the applicable performance obligation. The expenses that are directly related to such transactions are recorded as incurred and presented within operating expenses when the Company is primarily responsible for fulfilling the promise of the arrangement. Revenues associated with the reimbursement of such expenses are recorded when the Company is contractually entitled to reimbursement and presented within investment banking and other advisory fees.

~~Asset Management Fees~~—Fees for Asset Management services are primarily comprised of management fees and incentive fees. Management fees are derived from fees for investment management and other services provided to clients. Revenue is recorded in accordance with the same five criteria as Financial Advisory fees, which generally results in management fees being recorded on a daily, monthly or quarterly basis, primarily based on a percentage of client assets managed. Fees vary with the type of assets managed, with higher fees earned on equity assets, alternative investment (such as hedge fund) and private equity funds, and lower fees earned on fixed income and money market products. Expenses that are directly related to the sale or distribution of fund interests are recorded as incurred and presented within operating expenses when the Company is primarily responsible for fulfilling the promise of the arrangement. Revenues associated with the reimbursement of such expenses are recorded when the Company is contractually entitled to reimbursement and presented within asset management fees.

In addition, 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 specific 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 when a significant reversal in the amount of the cumulative revenue to be recognized is not probable, which is typically at the end of the relevant performance measurement period. The incentive fee measurement period is generally an annual period (unless an account is terminated 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 generally are 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 interests during the life of the fund can occur. As a result, the Company records incentive fees earned on our private equity funds when a significant reversal in the amount of the cumulative revenue to be recognized is not probable, which is typically at the end of the relevant performance period.

~~Receivables relating to asset management and incentive fees are reported in “fees receivable” on the consolidated statements of financial condition.~~

The Company disaggregates revenue based on its business segment results and believes that the following information provides a reasonable representation of how performance obligations relate to the nature, amount, timing and uncertainty of revenue and cash flows:

	Three Months Ended				Three Months Ended
	March 31,				March 31,
	2020		2019		2021		2020
Net Revenue:
Financial Advisory (a)	$	298,970	$	321,926	$	317,522	$	298,970

Asset Management:
Management Fees and Other (b)	$	281,007	$	301,253	$	314,513	$	281,007
Incentive Fees (c)		1,514		580		32,977		1,514
Total Asset Management	$	282,521	$	301,833	$	347,490	$	282,521

In addition to the 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 to (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 financial statements.

The Company’s receivables represent fee receivables, amounts due from customers and other receivables, and amounts due from Lazard Ltd subsidiaries. The fee receivables are generally due within 60 days from the date of invoice, except as related to certain Restructuring services and certain Capital Raising activities, specifically Private Capital Advisory services, which have fee receivables due upon specified contractual payment terms. For customer loans within ~~customer~~customers and other receivables, the Company has elected to apply the practical expedient, in accordance with ~~CECL~~current expected credit losses (“CECL”) guidance, for financial assets with collateral maintenance provisions, which results in no expected credit losses given that these loans are maintained with collateral having a fair value in excess of the carrying amount of the loans as of March 31, ~~2020.~~2021.

Receivables are stated net of an estimated allowance for doubtful accounts determined in accordance with the CECL model, for general credit risk of the overall portfolio and for specific accounts deemed uncollectible, which may include situations where a fee is in dispute.

For fee receivables, the allowance for doubtful accounts is determined together for all Financial Advisory fees, except for Private Capital Advisory given the different nature of the business, ~~customer~~client composition and risk characteristics. In addition, a separate allowance for doubtful accounts is determined for all Asset Management fees. The allowance is measured by the application of an average charge-off rate, determined annually based on historical bad debt charge-off experience, to the fee receivable balance of the respective services, adjusted for specific allowance recognized based on current conditions of individual ~~customers.~~clients. The current factors are considered on a quarterly basis and include the aging of the receivables, the ~~customers’~~client’s ability to make payments, and the Company’s relationship with the ~~customer.~~client. In addition, the Company also performs a qualitative assessment on a quarterly basis to monitor economic factors and other uncertainties that may require additional adjustment to the expected credit loss allowance.

With respect to fees receivable from Financial Advisory activities, such receivables are generally deemed past due when they are outstanding 60 days from the date of invoice, except for certain transactions that include specific contractual payment terms ~~which~~that may vary from approximately one month to four years following the invoice date (as is the case for certain Private Capital Advisory fees) or may be subject to court approval (as is the case with Restructuring activities that include bankruptcy proceedings). In such cases, receivables are deemed past due when payment is not received by the agreed-upon contractual date or the court approval date, respectively. Financial Advisory fee receivables past due, from the date of invoice or the specific contractual payment terms, in excess of 180 days are fully provided for unless there is evidence that the balance is collectible. Notwithstanding our policy for receivables past due, any receivables that we determine are impaired result in specific reserves against such exposures. Asset Management fees are fully provided for when such receivables are outstanding 12 months after the invoice date. In addition, the Company specifically reserves against exposures relating to Asset Management fees where we determine receivables are impaired prior to being outstanding for 12 months.

Activity in the allowance for doubtful accounts for the three month periods ended March 31, ~~2020~~2021 and ~~2019~~2020 was as follows:

	Three Months Ended						Three Months Ended
	March 31,						March 31,
	2020			2019			2021			2020
Beginning Balance	$	27,130		$	40,115		$	36,649		$	27,130
Adjustment for adoption of new accounting guidance		7,571			-			-			7,571
Bad debt expense, net of reversals		(527	)		3,829			370			(527	)
Charge-offs, foreign currency translation and other adjustments		(2,890	)		(736	)		(2,022	)		(2,890	)
Ending Balance*	$	31,284		$	43,208		$	34,997		$	31,284

*The allowance for doubtful accounts balances are substantially all related to M&A and Restructuring fee receivables ~~which~~that include recoverable expense receivables.

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

Of the Company’s fee receivables at March 31, ~~2020~~2021 and December 31, ~~2019, $77,852~~2020, $90,826 and ~~$77,052,~~$90,521, respectively, represented ~~interest-bearing~~ financing receivables for our Private Capital Advisory fees. In addition, at both March 31, 2021 and December 31, 2020, the Company had interest-bearing receivables from Lazard Ltd subsidiaries of ~~$26,300.~~$86,800. Based upon our historical loss experience, the credit quality of the counterparties, and the lack of uncollectible amounts, there was 0 allowance for doubtful accounts required at those dates related to such receivables.

At March 31, 2021 and December 31, 2020, customers and other receivables included $110,954 and $99,965, 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 March 31, 2021 and December 31, 2020.

The aggregate carrying amount of ~~our non-interest bearing~~all other receivables of ~~$552,512~~$585,537 and ~~$620,599~~$597,235 at March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively, approximates fair value.

The Company’s investments and securities sold, not yet purchased, consist of the following at March 31, ~~2020~~2021 and December 31, ~~2019:~~2020:

	March 31,		December 31,		March 31,		December 31,
	2020		2019		2021		2020
Interest-bearing deposits	$	450	$	517
Debt		-		100,000	$	99,994	$	99,987
Equities		42,265		48,521		48,184		37,365
Funds:
Alternative investments (a)		29,832		16,581		39,371		34,264
Debt (a)		139,997		113,579		140,053		123,554
Equity (a)		254,051		218,435		415,056		325,795
Private equity		39,158		34,362		39,693		37,567
		463,038		382,957		634,173		521,180
Total investments		505,753		531,995
Less:
Interest-bearing deposits		450		517
Investments, at fair value	$	505,303	$	531,478	$	782,351	$	658,532
Securities sold, not yet purchased, at fair value (included in “other liabilities”)	$	12,123	$	12,894	$	3,221	$	1,176

Interest-bearing deposits have original maturities of greater than three months but equal to or less than one year and are carried at cost that approximates fair value due to their short-term maturities.

Debt primarily consists of U.S. Treasury securities with original maturities of greater than three months and less than one 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.

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”).

During the three month periods ended March 31, ~~2020~~2021 and ~~2019,~~2020, the Company reported in “revenue-other” on its condensed consolidated statements of operations net unrealized investment gains and losses pertaining to “equity securities and trading debt securities” still held as of the reporting date as follows:

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:

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 as of March 31, 2020.~~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 the contingent consideration liability is classified as Level 3 and the fair value of the liability 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~~14

(dollars in the fair value is recognized in “amortization and other acquisition-related (benefits) 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 fair value of the contingent payments on the acquisition date and is included in “other liabilities” on the condensed consolidated statements of financial condition.thousands, unless otherwise noted)

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 uncertainity. See Note 7.

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 March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, 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:

	March 31, 2020										March 31, 2021
	Level 1		Level 2		Level 3		NAV		Total		Level 1		Level 2		Level 3		NAV		Total
Assets:
Investments:
Debt											$	99,994	$	-	$	-	$	-	$	99,994
Equities	$	40,840	$	-	$	1,425	$	-	$	42,265		46,543		-		1,641		-		48,184
Funds:
Alternative investments		14,747		-		-		15,085		29,832		17,119		-		-		22,252		39,371
Debt		139,992		-		-		5		139,997		140,048		-		-		5		140,053
Equity		254,020		-		-		31		254,051		415,008		-		-		48		415,056
Private equity		-		-		1,347		37,811		39,158		-		-		1,472		38,221		39,693
Derivatives		-		26,621		-		-		26,621		-		1,254		-		-		1,254
Total	$	449,599	$	26,621	$	2,772	$	52,932	$	531,924	$	718,712	$	1,254	$	3,113	$	60,526	$	783,605
Liabilities:
Securities sold, not yet purchased	$	12,123	$	-	$	-	$	-	$	12,123	$	3,221	$	-	$	-	$	-	$	3,221
Derivatives		-		274,884		-		-		274,884		-		383,924		11,500		-		395,424
Total	$	12,123	$	274,884	$	-	$	-	$	287,007	$	3,221	$	383,924	$	11,500	$	-	$	398,645

	December 31, 2019										December 31, 2020
	Level 1		Level 2		Level 3		NAV		Total		Level 1		Level 2		Level 3		NAV		Total
Assets:
Investments:
Debt	$	100,000	$	-	$	-	$	-	$	100,000	$	99,987	$	-	$	-	$	-	$	99,987
Equities		46,921		-		1,600		-		48,521		35,694		-		1,671		-		37,365
Funds:
Alternative investments		15,731		-		-		850		16,581		17,411		-		-		16,853		34,264
Debt		113,574		-		-		5		113,579		123,549		-		-		5		123,554
Equity		218,393		-		-		42		218,435		325,749		-		-		46		325,795
Private equity		-		-		1,371		32,991		34,362		-		-		1,486		36,081		37,567
Derivatives		-		1,395		-		-		1,395		-		536		-		-		536
Total	$	494,619	$	1,395	$	2,971	$	33,888	$	532,873	$	602,390	$	536	$	3,157	$	52,985	$	659,068
Liabilities:
Securities sold, not yet purchased	$	12,894	$	-	$	-	$	-	$	12,894	$	1,176	$	-	$	-	$	-	$	1,176
Derivatives		-		236,273		-		-		236,273		-		314,485		-		-		314,485
Total	$	12,894	$	236,273	$	-	$	-	$	249,167	$	1,176	$	314,485	$	-	$	-	$	315,661

The following tables provide a summary of changes in fair value of the Company’s Level 3 assets and liabilities for the three month periods ended March 31, ~~2020~~2021 and ~~2019:~~2020:

	Three Months Ended March 31, 2020														Three Months Ended March 31, 2021
	Beginning Balance		Net Unrealized/ Realized Gains/Losses Included In Earnings (a)			Purchases/ Acquisitions		Sales/ Dispositions/ Settlements		Foreign Currency Translation Adjustments			Ending Balance		Beginning Balance		Net Unrealized/ Realized Gains/Losses Included In Earnings (a)		Purchases/ Acquisitions/ Issuances		Sales/ Dispositions/ Settlements		Foreign Currency Translation Adjustments			Ending Balance
Assets:
Investments:
Equities	$	1,600	$	(99	)	$	-	$	-	$	(76	)	$	1,425	$	1,671	$	1	$	0	$	0	$	(31	)	$	1,641
Private equity funds		1,371		(24	)		-		-		-			1,347		1,486		0		0		0		(14	)		1,472
Total Level 3 Assets	$	2,971	$	(123	)	$	-	$	-	$	(76	)	$	2,772	$	3,157	$	1	$	0	$	0	$	(45	)	$	3,113

Liabilities:
Derivatives															$	0	$	0	$	11,500	$	0	$	0		$	11,500
Total Level 3 Liabilities															$	0	$	0	$	11,500	$	0	$	0		$	11,500

	Three Months Ended March 31, 2019														Three Months Ended March 31, 2020
	Beginning Balance		Net Unrealized/ Realized Gains/Losses Included In Earnings (a)			Purchases/ Acquisitions		Sales/ Dispositions/ Settlements		Foreign Currency Translation Adjustments			Ending Balance		Beginning Balance		Net Unrealized/ Realized Gains/Losses Included In Earnings (a)			Purchases/ Acquisitions		Sales/ Dispositions/ Settlements		Foreign Currency Translation Adjustments			Ending Balance
Assets:
Investments:
Equities	$	1,622	$	(2	)	$	-	$	-	$	(2	)	$	1,618	$	1,600	$	(99	)	$	0	$	0	$	(76	)	$	1,425
Private equity funds																1,371		(24	)		0		0		0			1,347
Total Level 3 Assets	$	1,622	$	(2	)	$	-	$	-	$	(2	)	$	1,618	$	2,971	$	(123	)	$	0	$	0	$	(76	)	$	2,772

Liabilities:
Contingent consideration liability	$	1,309	$	(1,095	)	$	-	$	-	$	-		$	214
Total Level 3 Liabilities	$	1,309	$	(1,095	)	$	-	$	-	$	-		$	214

There were 0 transfers into or out of Level 3 within the fair value hierarchy during the three month periods ended March 31, 2021 and 2020.

The following tables present, at March 31, 2021 and December 31, 2020, certain investments that are valued using NAV or its equivalent as a practical expedient in determining fair value:

March 31, 2021

Investments

Redeemable

Fair Value

Unfunded

Commitments

% of

Fair Value

Not

Redeemable

Redemption

Frequency

Redemption

Notice Period

Alternative investment funds:

Hedge funds

21,635

(a)

30-60 days

Other

617

(b)

<30-30 days

Debt funds

(c)

<30 days

Equity funds

(d)

<30-60 days

Private equity funds:

Equity growth

38,221

5,865

(e)

100

(f)

Total

60,526

5,865

December 31, 2020

Investments Redeemable

Fair Value

Unfunded

Commitments

% of

Fair Value

Not

Redeemable

Redemption

Frequency

Redemption

Notice Period

Alternative investment funds:

Hedge funds

16,216

(a)

30-60 days

Other

637

(b)

<30-30 days

Debt funds

(c)

<30 days

Equity funds

(d)

<30-60 days

Private equity funds:

Equity growth

36,081

5,865

(e)

100

(f)

Total

52,985

5,865

~~There were 0 transfers between any of the Level 1, 2 and 3 categories in the fair value measurement hierarchy during the three month periods ended March 31, 2020 and 2019.~~

~~The following tables present, at March 31, 2020 and December 31, 2019, certain investments that are valued using NAV or its equivalent as a practical expedient in determining fair value:~~

March 31, 2020

Estimated Liquidation Period of
Investments Not Redeemable

Investments Redeemable

Fair Value

Unfunded
Commitments

% of
Fair Value
Not
Redeemable

%
Next
5 Years

%
5-10
Years

%
Thereafter

Redemption
Frequency

Redemption
Notice Period
Alternative investment funds:

Hedge funds

$
14,518

$
-

NA

NA

NA

NA

(a)

30-60 days
Other

567

-

NA

NA

NA

NA

(b)

<30-30 days
Debt funds

5

-

NA

NA

NA

NA

(c)

<30 days
Equity funds

31

-

NA

NA

NA

NA

(d)

<30-60 days
Private equity funds:

Equity growth

37,811

6,056

(e)

100
%

17
%

25
%

58
%

NA

NA
Total

$
52,932

$
6,056

December 31, 2019

Estimated Liquidation Period of
Investments Not Redeemable

Investments Redeemable

Fair Value

Unfunded
Commitments

% of
Fair Value
Not
Redeemable

%
Next
5 Years

%
5-10
Years

%
Thereafter

Redemption
Frequency

Redemption
Notice Period
Alternative investment funds:

Hedge funds

$
241

$
-

NA

NA

NA

NA

(a)

30-60 days
Other

609

-

NA

NA

NA

NA

(b)

<30-30 days
Debt funds

5

-

NA

NA

NA

NA

(c)

<30 days
Equity funds

42

-

NA

NA

NA

NA

(d)

<30-60 days
Private equity funds:

Equity growth

32,991

6,056

(e)

100
%

22
%

12
%

66
%

NA

NA
Total

$
33,888

$
6,056

Investment Capital Funding Commitments—At March 31, ~~2020,~~2021, the Company’s maximum unfunded commitments for capital contributions to investment funds primarily arose from commitments to EGCP III, which amounted to ~~$5,484.~~$5,370. 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 below presents 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 13) on the accompanying condensed consolidated statements of financial condition as of March 31, ~~2020~~2021 and December 31, ~~2019:~~2020:

	March 31,		December 31,		March 31,		December 31,
	2020		2019		2021		2020
Derivative Assets:
Forward foreign currency exchange rate contracts	$	7,859	$	1,395	$	1,254	$	536
Total return swaps and other (a)		18,762		-
	$	26,621	$	1,395	$	1,254	$	536
Derivative Liabilities:
Forward foreign currency exchange rate contracts	$	3,281	$	1,720	$	340	$	333
Total return swaps and other (a)		-		8,527		718		2,752
Warrants						11,500		-
LFI and other similar deferred compensation arrangements		271,603		226,026		382,866		311,400
	$	274,884	$	236,273	$	395,424	$	314,485

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 periods ended March 31, ~~2020~~2021 and ~~2019,~~2020, were as follows:

	Three Months Ended					Three Months Ended
	March 31,					March 31,
	2020		2019			2021			2020
Forward foreign currency exchange rate contracts	$	1,772	$	4,520		$	6,818		$	1,772
LFI and other similar deferred compensation arrangements		19,637		(13,870	)		(7,487	)		19,637
Total return swaps and other		18,845		(7,657	)		(4,279	)		18,845
Total	$	40,254	$	(17,007	)	$	(4,948	)	$	40,254

At March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, property consisted of the following:

	Estimated Depreciable		March 31,		December 31,		Estimated Depreciable		March 31,		December 31,
	Life in Years		2020		2019		Life in Years		2021		2020
Buildings		33	$	138,777	$	142,298		33	$	148,518	$	155,434
Leasehold improvements	3-20			195,384		196,277	3-20			219,262		219,871
Furniture and equipment	3-10			213,489		214,700	3-10			238,587		240,284
Construction in progress				41,409		32,476				41,477		42,824
Total				589,059		585,751				647,844		658,413
Less - Accumulated depreciation and amortization				369,568		366,880				397,910		401,505
Property			$	219,491	$	218,871			$	249,934	$	256,908

The components of goodwill and other intangible assets at March 31, ~~2020~~2021 and December 31, ~~2019~~2020 are presented below:

	March 31,		December 31,		March 31,		December 31,
	2020		2019		2021		2020
Goodwill	$	335,897	$	350,029	$	359,340	$	361,682
Other intangible assets (net of accumulated amortization)		1,494		1,768		195		210
	$	337,391	$	351,797	$	359,535	$	361,892

At March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, goodwill of ~~$271,356~~$294,799 and ~~$285,488,~~$297,141, 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 three month periods ended March 31, ~~2020~~2021 and ~~2019~~2020 are as follows:

	Three Months Ended					Three Months Ended
	March 31,					March 31,
	2020			2019		2021			2020
Balance, January 1	$	350,029		$	350,829	$	361,682		$	350,029
Foreign currency translation adjustments		(14,132	)		361		(2,342	)		(14,132	)
Balance, March 31	$	335,897		$	351,190	$	359,340		$	335,897

20All changes in the carrying amount of goodwill for the three month periods ended March 31, 2021 and 2020 are attributable to the Company’s Financial Advisory segment.

The gross cost and accumulated amortization of other intangible assets as of March 31, 2021 and December 31, 2020, by major intangible asset category, are as follows:

~~All changes in the carrying amount of goodwill for the three month periods ended March 31, 2020 and 2019 are attributable to the Company’s Financial Advisory segment.~~

~~The gross cost and accumulated amortization of other intangible assets as of March 31, 2020 and December 31, 2019, by major intangible asset category, are as follows:~~

Amortization expense of intangible assets, included in “amortization ~~and other acquisition-related costs (benefits)”~~of intangible assets related to acquisitions” in the condensed consolidated statements of operations, for the three month periods ended March 31, 2021 and 2020 was $15 and ~~2019 was~~ $428, ~~and $411,~~ respectively. Estimated future amortization expense is as follows:

Year Ending December 31,	Amortization Expense		Amortization Expense
2020 (April 1 through December 31)	$	1,284
2021		60
2021 (April 1 through December 31)			$	45
2022		60		60
2023		60		60
2024		30		30
Total amortization expense	$	1,494	$	195

Senior debt is comprised of the following as of March 31, ~~2020~~2021 and December 31, ~~2019:~~2020:

							Outstanding as of																		Outstanding as of
	Initial			Annual			March 31, 2020						December 31, 2019						Initial			Annual			March 31, 2021						December 31, 2020
	Principal Amount		Maturity Date	Interest Rate(b)			Principal		Unamortized Debt Costs		Carrying Value		Principal		Unamortized Debt Costs		Carrying Value		Principal Amount		Maturity Date	Interest Rate(a)			Principal		Unamortized Debt Costs		Carrying Value		Principal		Unamortized Debt Costs		Carrying Value
Lazard Group 2025 Senior Notes		400,000	2/13/25		3.75	%		400,000		2,298		397,702		400,000		2,416		397,584	$	400,000	2/13/25		3.75	%	$	400,000	$	1,830	$	398,170	$	400,000	$	1,948	$	398,052
Lazard Group 2027 Senior Notes		300,000	3/1/27		3.625	%		300,000		2,723		297,277		300,000		2,822		297,178		300,000	3/1/27		3.625	%		300,000		2,308		297,692		300,000		2,405		297,595
Lazard Group 2028 Senior Notes		500,000	9/19/28		4.50	%		500,000		7,590		492,410		500,000		7,814		492,186		500,000	9/19/28		4.50	%		500,000		6,355		493,645		500,000		6,568		493,432
Lazard Group 2029 Senior Notes ~~(a)~~		500,000	3/11/29		4.375	%		500,000		7,185		492,815		500,000		7,386		492,614		500,000	3/11/29		4.375	%		500,000		6,145		493,855		500,000		6,338		493,662
Total							$	1,700,000	$	19,796	$	1,680,204	$	1,700,000	$	20,438	$	1,679,562							$	1,700,000	$	16,638	$	1,683,362	$	1,700,000	$	17,259	$	1,682,741

The Company’s senior debt at March 31, 2021 and December 31, 2020 is carried at historical amounts of $1,683,362 and $1,682,741, respectively. At those dates, the fair value of such senior debt was approximately $1,885,000 and $1,954,000, 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~~three-year ~~$150,000~~, $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 March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, 0 amounts were outstanding under the Amended and Restated Credit Agreement.

As of March 31, 2021, the Company had approximately $213,000 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 $12,000.

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 March 31, ~~2020,~~2021, the Company was in compliance with such provisions. All of the Company’s senior debt obligations are unsecured.

As of March 31, 2020, the Company had approximately $168,000 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 $16,000.

The Company’s senior debt at March 31, 2020 and December 31, 2019 is carried at historical amounts of $1,680,204 and $1,679,562, respectively. At those dates, the fair value of such senior debt was approximately $1,701,000 and $1,839,000, 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.

Other Commitments—The Company has various other contractual commitments arising in the ordinary course of business. In addition, from time to time, LFB and LFNY may enter into underwriting commitments in which it will participate as an underwriter. At March 31, ~~2020,~~2021, LFB and LFNY had 0 such underwriting commitments.

See Notes 6 and 14 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 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.

Lazard Group Distributions—Distributions in respect of Lazard Group’s common membership interests are allocated to the holders of such interests in accordance with the provisions of the Operating Agreement. Such distributions primarily represent amounts necessary to fund (i) any dividends Lazard Ltd may declare on its Class A common stock (“common stock”), the only class of common stock of Lazard outstanding, and (ii) tax distributions in respect of income taxes that Lazard Ltd’s subsidiaries incur.

During the three month period ended March 31, ~~2019,~~2021, Lazard Group distributed ~~$52,210~~$13,934 to the subsidiaries of Lazard Ltd.

Pursuant to Lazard Group’s Operating Agreement, Lazard Group allocates and distributes to its members a substantial portion of its distributable profits in installments as soon as practicable after the end of each fiscal year. Such installment distributions usually begin in February.

~~Contributions From Members—See Note 17 for information regarding related party transaction.~~

Share Repurchase Program—~~During~~ Since 2019 and through the three month period ended March 31, ~~2020 and since 2018,~~2021, the Board of Directors of Lazard authorized the repurchase of common stock, as set forth in the table below:

Date	Repurchase Authorization		Expiration	Repurchase Authorization		Expiration
April 2018	$	300,000	December 31, 2020
October 2018	$	300,000	December 31, 2020
February 2019	$	300,000	December 31, 2020	$	300,000	December 31, 2020
October 2019	$	300,000	December 31, 2021	$	300,000	December 31, 2021

The Company expects that the share repurchase program will 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 period to period due to a variety of factors. Purchases with respect to such program are set forth in the table below:

Three Months Ended March 31:	Number of Shares Purchased		Average Price Per Share		Number of Shares Purchased		Average Price Per Share
2019		5,177,948	$	37.10
2020		2,912,035	$	32.70		2,912,035	$	32.70
2021						2,899,541	$	42.30

During the three month periods ended March 31, ~~2020~~2021 and ~~2019,~~2020, certain of our executive officers received common stock in connection with the vesting or settlement of previously-granted deferred equity incentive awards. The vesting or settlement of such equity awards gave rise to a tax payable by the executive officers, and, consistent with our past practice, the Company purchased shares of common stock from certain of our executive officers equal in value to all or a portion of the estimated amount of such tax. In addition, during the three month ~~period~~periods ended March 31, 2021 and 2020, the Company purchased shares of common stock from certain of our executive officers. The aggregate value of all such purchases during the three month periods ended March 31, ~~2020~~2021 and ~~2019~~2020 was approximately ~~$10,000~~$18,600 and ~~$14,600,~~$10,000, respectively. Such shares of common stock are reported at cost.

As of March 31, ~~2020,~~2021, a total of ~~$305,598~~$177,348 of share repurchase authorization remained available under Lazard Ltd’s share repurchase program, ~~$5,598 of which will expire on December 31, 2020 and $300,000 of~~ which will expire on December 31, 2021.

In addition, on April 29, 2021, the Board of Directors of Lazard authorized the repurchase of up to $300,000 of additional shares of common stock, which authorization will expire on December 31, 2022, bringing the total available share repurchase authorization as of April 29, 2021 to approximately $439,000.

During the three month period ended March 31, ~~2020,~~2021, 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.

23Accumulated Other Comprehensive Income (Loss) (“AOCI”), Net of Tax—The tables below reflect the balances of each component of AOCI at March 31, 2021 and 2020 and activity during the three month periods then ended:

	Three Months Ended March 31, 2021
	Currency Translation Adjustments			Employee Benefit Plans			Total AOCI			Amount Attributable to Noncontrolling Interests			Total Lazard Group AOCI
Balance, January 1, 2021	$	(20,438	)	$	(173,006	)	$	(193,444	)	$	2		$	(193,446	)
Activity:
Other comprehensive income (loss) before reclassifications		(20,038	)		1,065			(18,973	)		(1	)		(18,972	)
Adjustments for items reclassified to earnings, net of tax		0			1,336			1,336						1,336
Net other comprehensive income (loss)		(20,038	)		2,401			(17,637	)		(1	)		(17,636	)
Balance, March 31, 2021	$	(40,476	)	$	(170,605	)	$	(211,081	)	$	1		$	(211,082	)

~~Accumulated Other Comprehensive Income (Loss), Net of Tax—The tables below reflect the balances of each component of AOCI at March 31, 2020 and 2019 and activity during the three month periods then ended:~~

Three Months Ended March 31, 2020

Currency
Translation
Adjustments

Employee
Benefit
Plans

Total
AOCI

Amount
Attributable to
Noncontrolling
Interests

Total
Lazard Group
AOCI

Balance, January 1, 2020

$
(74,369
)

$
(176,035
)

$
(250,404
)

$
-

$
(250,404
)
Activity:

Other comprehensive income (loss) before
reclassifications

(46,966
)

9,088

(37,878
)

-

(37,878
)
Adjustments for items reclassified to earnings,
net of tax

-

1,895

1,895

1,895

Net other comprehensive income (loss)

(46,966
)

10,983

(35,983
)

-

(35,983
)
Balance, March 31, 2020

$
(121,335
)

$
(165,052
)

$
(286,387
)

$
-

$
(286,387
)

Three Months Ended March 31, 2019

Currency
Translation
Adjustments

Employee
Benefit
Plans

Total
AOCI

Amount
Attributable to
Noncontrolling
Interests

Total
Lazard Group
AOCI

Balance, January 1, 2019

$
(82,829
)

$
(145,831
)

$
(228,660
)

$
-

$
(228,660
)
Activity:

Other comprehensive income before
reclassifications

2,929

49

2,978

1

2,977

Adjustments for items reclassified to earnings,
net of tax

-

1,132

1,132

-

1,132

Net other comprehensive income

2,929

1,181

4,110

1

4,109

Balance, March 31, 2019

$
(79,900
)

$
(144,650
)

$
(224,550
)

$
1

$
(224,551
)

	Three Months Ended March 31, 2020
	Currency Translation Adjustments			Employee Benefit Plans			Total AOCI			Amount Attributable to Noncontrolling Interests		Total Lazard Group AOCI
Balance, January 1, 2020	$	(74,369	)	$	(176,035	)	$	(250,404	)	$	-	$	(250,404	)
Activity:
Other comprehensive income (loss) before reclassifications		(46,966	)		9,088			(37,878	)		-		(37,878	)
Adjustments for items reclassified to earnings, net of tax		0			1,895			1,895			-		1,895
Net other comprehensive income (loss)		(46,966	)		10,983			(35,983	)		-		(35,983	)
Balance, March 31, 2020	$	(121,335	)	$	(165,052	)	$	(286,387	)	$	-	$	(286,387	)

The table below reflects adjustments for items reclassified out of AOCI, by component, for the three month periods ended March 31, ~~2020~~2021 and ~~2019:~~2020:

	Three Months Ended				Three Months Ended
	March 31,				March 31,
	2020		2019		2021		2020
Amortization relating to employee benefit plans (a)	$	2,233	$	1,310	$	1,717	$	2,233
Less - related income taxes		338		178		381		338
Total reclassifications, net of tax	$	1,895	$	1,132	$	1,336	$	1,895

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) LGAC interests (see Note 1) and ~~(ii)~~(iii) consolidated VIE interests held by employees (see Note ~~20)~~19).

24The tables below summarize net income (loss) attributable to noncontrolling interests for the three month periods ended March 31, 2021 and 2020 and noncontrolling interests as of March 31, 2021 and December 31, 2020 in the Company’s condensed consolidated financial statements:

The tables below summarize net loss attributable to noncontrolling interests for the three month periods ended March 31, 2020 and 2019 and noncontrolling interests as of March 31, 2020 and December 31, 2019 in the Company’s condensed consolidated financial statements:

	Noncontrolling Interests as of				Noncontrolling Interests as of
	March 31,		December 31,		March 31,		December 31,
	2020		2019		2021		2020
Edgewater	$	47,339	$	50,151	$	45,808	$	45,352
Consolidated VIEs		22,404		18,241		50,560		40,517
LGAC						2,997		-
Other		13		14		18		16
Total	$	69,756	$	68,406	$	99,383	$	85,885

A description of Lazard Ltd’s 2018 Plan, 2008 Plan and 2005 Equity Incentive Plan (the “2005 Plan”) and activity with respect thereto during the three month periods ended March 31, ~~2020~~2021 and ~~2019~~2020 is presented below.

The 2018 Plan became effective on April 24, 2018 and was amended on April 29, 2021 to increase the aggregate number of shares authorized for issuance under the 2018 plan. The 2018 Plan replaced the 2008 Plan, which was terminated on April 24, 2018. The 2018 Plan ~~authorizes the~~originally authorized issuance of up to 30,000,000 shares of common stock, plus any shares of common stock that were subject to outstanding awards under the 2008 Plan as of March 14, 2018 that are forfeited, canceled or settled in cash following April 24, 2018, which was the date that the 2018 Plan was approved by our shareholders. The amendment that our shareholders approved on April 29, 2021 increased the shares of common stock available pursuant to the 2018 Plan by 20,000,000 shares, which is in addition to any shares of common stock that remain available under the original authorization. Such shares may be issued pursuant to the grant or exercise of stock options, stock appreciation rights, restricted stock units (“RSUs”), performance-based restricted stock units (“PRSUs”), profits interest participation rights, including performance-based restricted participation units (“PRPUs”), and other share-based awards.

The 2008 Plan authorized the issuance of shares of common stock pursuant to the grant or exercise of stock options, stock appreciation rights, RSUs, PRSUs and other share-based awards. Under the 2008 Plan, the maximum number of shares available was based on a formula that limited the aggregate number of shares that could, at any time, be subject to awards that were considered “outstanding” under the 2008 Plan to 30% of the then-outstanding shares of common stock. The 2008 Plan was terminated on April 24, 2018, and no additional awards have been or will be granted under the 2008 Plan after its termination, although outstanding awards granted under the 2008 Plan before its termination continue to be subject to its terms.

The 2005 Plan authorized the issuance of up to 25,000,000 shares of common stock pursuant to the grant or exercise of stock options, stock appreciation rights, RSUs and other share-based awards. The 2005 Plan expired in the second quarter of 2015, although outstanding deferred stock unit (“DSU”) awards granted under the 2005 Plan before its expiration continue to be subject to its terms.

The following reflects the amortization expense recorded with respect to share-based incentive plans within “compensation and benefits” expense (with respect to RSUs, PRSUs, restricted stock, profits interest participation rights, including PRPUs, and other share-based awards) and “professional services” expense (with respect to DSUs) within the Company’s accompanying condensed consolidated statements of operations for the three month periods ended March 31, ~~2020~~2021 and ~~2019:~~2020:

	Three Months Ended				Three Months Ended
	March 31,				March 31,
	2020		2019		2021		2020
Share-based incentive awards:
RSUs	$	42,917	$	55,197	$	34,805	$	42,917
PRSUs		4,361		1,321		5,559		4,361
Restricted Stock		8,531		9,512		6,067		8,531
Profits interest participation rights		16,166		18,468		21,573		16,166
DSUs		93		91		93		93
Total	$	72,068	$	84,589	$	68,097	$	72,068

The ultimate amount of compensation and benefits expense relating to share-based awards is dependent upon the actual number of shares of common stock that vest. 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 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.

RSUs generally require future service as a condition for the delivery of the underlying shares of common stock (unless the recipient is then eligible for retirement under the Company’s retirement policy) and convert into shares of common stock on a one-for-one basis after the stipulated vesting periods. 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 period, each RSU is attributed additional RSUs equivalent to any dividends paid on common stock during such period. During the three month period ended March 31, ~~2020,~~2021, dividend participation rights required the issuance of ~~180,271~~138,585 RSUs.

Non-executive members of the Board of Directors of Lazard Group, who are the same Non-Executive Directors of Lazard Ltd (“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. 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 common stock at the time of cessation of service to the Board of Directors. DSUs include a cash dividend participation right equivalent to dividends paid on common stock.

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 common stock on the date immediately preceding the date of the grant. During the three month period ended March 31, ~~2020, 4,416~~2021, 4,457 DSUs had been granted pursuant to such Plan.

DSU awards are expensed at their fair value on their date of grant, inclusive of amounts related to the Directors’ Fee Deferral Unit Plan.

The following is a summary of activity relating to RSUs and DSUs during the three month period ended March 31, ~~2020:~~2021:

RSUs

DSUs

Units

Weighted
Average
Grant Date
Fair Value

Units

Weighted
Average
Grant Date
Fair Value

Balance, January 1, 2020

10,387,566

$
44.66

395,973

$
38.01

Granted (including 180,271 RSUs relating to
dividend participation)

2,937,529

$
42.82

4,416

$
42.31

Forfeited

(19,680
)

$
42.25

-

-

Settled

(4,009,221
)

$
47.00

-

-

Balance, March 31, 2020

9,296,194

$
43.08

400,389

$
38.05

	RSUs					DSUs
	Units			Weighted Average Grant Date Fair Value		Units		Weighted Average Grant Date Fair Value
Balance, January 1, 2021		9,266,344		$	42.96		478,800	$	36.36
Granted (including 138,585 RSUs relating to dividend participation)		2,776,805		$	43.13		4,457	$	41.92
Forfeited		(63,425	)	$	41.05		-		-
Settled		(3,690,643	)	$	47.52		-		-
Balance, March 31, 2021		8,289,081		$	41.00		483,257	$	36.41

In connection with RSUs that settled during the three month period ended March 31, ~~2020,~~2021, the Company satisfied its minimum statutory tax withholding requirements in lieu of delivering ~~1,498,306~~1,348,433 shares of common stock during such three month period. Accordingly, ~~2,510,915~~2,342,210 shares of common stock held by the Company were delivered during the three month period ended March 31, ~~2020.~~2021.

As of March 31, ~~2020,~~2021, estimated unrecognized RSU compensation expense was ~~$197,625,~~$177,587, with such expense expected to be recognized over a weighted average period of approximately 1.0 years subsequent to March 31, ~~2020.~~2021.

The following is a summary of activity related to shares of restricted common stock associated with compensation arrangements during the three month period ended March 31, ~~2020:~~2021:

In connection with shares of restricted common stock that settled during the three month period ended March 31, ~~2020,~~2021, the Company satisfied its minimum statutory tax withholding requirements in lieu of delivering ~~122,758~~162,533 shares of common stock during such three month period. Accordingly, ~~199,295~~265,765 shares of common stock held by the Company were delivered during the three month period ended March 31, ~~2020.~~2021.

Restricted stock awards granted in 2021 and 2020 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 on common stock during such period. During the three month period ended March 31, 2021, dividend participation rights required the issuance of 10,571 shares of restricted common stock. With respect to awards granted prior to 2020, the restricted stock awards include a cash dividend participation right equivalent to dividends paid on common stock during the period, which will vest concurrently with the underlying restricted stock award. At March 31, ~~2020,~~2021, estimated unrecognized restricted stock expense was ~~$37,120,~~$28,420, with such expense to be recognized over a weighted average period of approximately ~~0.9~~1.0 years subsequent to March 31, ~~2020.~~2021.

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 common stock that a recipient will receive upon vesting of a PRSU will be calculated by reference to certain ~~performance~~performance-based and, for awards granted in February 2021, market-based metrics that relate to Lazard Ltd’s performance over a three-year period. The target number of shares of common stock subject to each PRSU is

one; however, based on the achievement of the performance criteria, the number of shares of 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 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 Lazard Ltd has achieved a threshold level of performance with respect to the fiscal year, 25% of the target number of shares of 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 common stock that are no longer subject to performance conditions)~~ receive dividend equivalents at the same rate that dividends are paid on 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 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.

The following is a summary of activity relating to PRSUs during the three month period ended March 31, ~~2020:~~2021:

In connection with certain PRSUs that settled during the three month period ended March 31, ~~2020,~~2021, the Company satisfied its minimum statutory tax withholding requirements in lieu of delivering ~~91,314~~100,882 shares of common stock during such three month period. Accordingly, ~~459,336~~446,077 shares of common stock held by the Company were delivered during the three month period ended March 31, ~~2020.~~2021.

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 March 31, ~~2020,~~2021, the total estimated unrecognized compensation expense was ~~$2,318,~~$1,817, and the Company expects to amortize such expense over a weighted-average period of approximately ~~0.5~~1.5 years subsequent to March 31, ~~2020.~~2021.

~~In early 2019, the Company established a new long-term incentive compensation program consisting of profits~~Profits interest participation rights ~~which~~ are equity incentive awards that, subject to certain conditions, may be exchanged for shares of common stock pursuant to the 2018 Plan. ~~Pursuant to the program, in February 2019 and February 2020, the~~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 ~~each~~certain of ~~the Company’s NEOs, and~~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, pursuant to profits interest participation right agreements.~~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 the Company that are intended to qualify as “profits interests” for U.S. federal income tax purposes, and are recorded within members’ equity in the Company’s condensed consolidated statements of financial condition. 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~~performance-based and incremental market-based conditions, are satisfied, and (ii) an amount of economic appreciation in the assets of the Company 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 ~~three month period~~year ended ~~March~~December 31, ~~2020.~~2020 and during February 2021, respectively.

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. PRPUs, like outstanding PRSUs, are subject to the achievement of incremental pre-established performance conditions and financial metrics and only result in value to the recipient to the extent the conditions are satisfied.

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 ~~financial metrics.~~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 ~~each~~the PRPU ~~award~~awards granted in February 2019 and February 2020 will range from zero to two times the target number. For the PRPU awards granted 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 ~~performance~~ 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 ~~each~~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 following is a summary of activity relating to profits interest participation rights, including PRPUs, during the three month period ended March 31, ~~2020:~~2021:

Compensation expense recognized for profits interest participation rights, including PRPUs, is determined by multiplying the number of shares of common stock underlying such awards that, based on the Company’s estimate, are considered probable of vesting, by the grant date fair value. As of March 31, ~~2020,~~2021, the total estimated unrecognized compensation expense was ~~$46,761, and the~~$68,529. The Company expects to amortize such expense over a weighted-average period of approximately ~~0.9~~0.7 years subsequent to March 31, ~~2020.~~2021.

~~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 three month period ended March 31, ~~2020:~~2021:

	Prepaid Compensation Asset			Compensation Liability			Prepaid Compensation Asset			Compensation Liability
Balance, January 1, 2020	$	74,597		$	226,026
Balance, January 1, 2021							$	101,631		$	311,400
Granted		143,289			143,289			161,892			161,892
Settled		-			(76,799	)		-			(95,904	)
Forfeited		(937	)		(960	)		(346	)		(2,928	)
Amortization		(25,283	)		-			(30,413	)		-
Change in fair value related to:
Decrease in fair value of underlying investments		-			(19,637	)
Change in fair value of underlying investments								-			7,487
Adjustment for estimated forfeitures		-			988			-			2,192
Other		(63	)		(1,304	)		2			(1,273	)
Balance, March 31, 2020	$	191,603		$	271,603
Balance, March 31, 2021							$	232,766		$	382,866

The amortization of the prepaid compensation asset will generally be recognized over a weighted average period of approximately 1.0 years subsequent to March 31, ~~2020.~~2021.

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 periods ended March 31, ~~2020~~2021 and ~~2019:~~2020:

	Three Months Ended					Three Months Ended
	March 31,					March 31,
	2020			2019		2021		2020
Amortization, net of forfeitures	$	26,248		$	17,934	$	30,023	$	26,248
Change in the fair value of underlying investments		(19,637	)		13,870		7,487		(19,637	)
Total	$	6,611		$	31,804	$	37,510	$	6,611

The Company provides retirement and other post-retirement benefits to certain of its employees through defined benefit pension plans (the “pension plans”). The Company also offers defined contribution plans to its employees. The 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.

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. 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 pension plans for the three month periods ended March 31, ~~2020~~2021 and ~~2019:~~2020:

	Pension Plans						Pension Plans
	Three Months Ended March 31,						Three Months Ended March 31,
	2020			2019			2021			2020
Components of Net Periodic Benefit Cost (Credit):
Service cost	$	135		$	207		$	226		$	135
Interest cost		2,983			3,902			2,115			2,983
Expected return on plan assets		(6,628	)		(7,026	)		(6,534	)		(6,628	)
Amortization of:
Prior service cost		27			29			30			27
Net actuarial loss (gain)		2,206			1,281			1,687			2,206
Settlement loss		922			1,783			380			922
Net periodic benefit cost (credit)	$	(355	)	$	176		$	(2,096	)	$	(355	)

The Company conducted a review of our business, which resulted in a realignment that included employee reductions and the closing of subscale offices and investment strategies, most of which were completed during the third quarter of 2019.

~~Activity related to the obligations pursuant to business realignment during the three month period ended March 31, 2020 was as follows:~~

Although a portion of Lazard Group’s income is subject to U.S. federal income taxes, Lazard Group primarily operates in the U.S. as a limited liability company that is treated as a partnership for U.S. federal income tax purposes. As a result, Lazard Group’s income from its U.S. operations is generally not subject to U.S. federal income taxes because such income is attributable to its partners. Lazard Group, 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 Unincorporated Business Tax (“UBT”) attributable to its operations apportioned to New York City.

The Company recorded income tax provisions of ~~$15,995~~$26,777 and ~~$15,988~~$15,995 for the three month periods ended March 31, ~~2020~~2021 and ~~2019,~~2020, respectively, representing effective tax rates of ~~18.7%~~19.6% and ~~14.7%~~18.7%, respectively. The difference between the U.S. federal

statutory rate of 21.0% and the effective tax rates reflected above principally relates to (i) Lazard Group primarily operating as a limited liability company in the U.S., (ii) taxes payable to foreign jurisdictions, (iii) the tax impact of differences in the value of share based incentive compensation and other discrete items, (iv) change in the valuation allowance affecting the provision for income taxes, (v) U.S. state and local taxes, which are incremental to the U.S. federal statutory tax rate, and (vi) impact of U.S. tax reform, including base erosion and anti-abuse tax.

Lazard Group’s receivables from subsidiaries of Lazard Ltd at both March 31, 2021 and December 31, 2020 included interest-bearing loans of ~~$26,300~~. $86,800. Interest income relating to interest-bearing loans with subsidiaries of Lazard Ltd amounted to $30 and $15 for ~~both~~ the three month periods ended March 31, 2021 and 2020, ~~and 2019.~~respectively.

Lazard Group’s payables to subsidiaries of Lazard Ltd at March 31, 2021 and December 31, ~~2019~~ 2020 included interest-bearing loans ~~including interest thereon,~~ of ~~$57,160.~~$45,033 and $50,000, respectively. Interest expense relating to interest-bearing loans with subsidiaries of Lazard Ltd amounted to ~~$54~~$18 and ~~$887~~$54 for the three month periods ended March 31, 2021 and 2020, respectively. The partial settlement of the interest-bearing loans in the first quarter of 2021 of $4,967 reflects the transfer of 121,794 shares of common stock from Lazard Group to a subsidiary of Lazard Ltd. Such amount was reflected in members’ equity as of March 31, 2021 and ~~2019, respectively.~~was a non-cash transaction.

In the first quarter of 2020, a subsidiary of Lazard Ltd contributed an interest-bearing intercompany loan, including interest thereon, of $55,941 due from a Lazard Group subsidiary to Lazard Group. Such amount iswas reflected in members’ equity as of March 31, 2020 and iswas a non-cash transaction.

The Company serves as an investment advisor for certain affiliated investment companies and fund entities and receives management fees and, for the alternative investment funds, performance-based incentive fees for providing such services. Investment advisory fees relating to such services were ~~$135,955~~$173,678 and ~~$144,170~~$135,955 for the three month periods ended March 31, ~~2020~~2021 and ~~2019,~~2020, respectively, and are included in “asset management fees” on the condensed consolidated statements of operations. Of such amounts, ~~$54,526~~$78,046 and ~~$54,561~~$72,076 remained as receivables at March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively, and are included in “fees receivable” on the condensed consolidated statements of financial condition.

See Note 12 for information regarding related party transactions pertaining to shares repurchased from certain of our executive officers.

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 2/3%) 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 $5, whichever is greater. In addition, the ratio of aggregate indebtedness (as defined) to net capital may not exceed 15:1. At March 31, ~~2020,~~2021, LFNY’s regulatory net capital was ~~$106,935,~~$142,039, which exceeded the minimum requirement by ~~$104,135.~~$138,286. LFNY’s aggregate indebtedness to net capital ratio was ~~0.39:~~0.40:1 as of March 31, ~~2020.~~2021.

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 March 31, ~~2020,~~2021, the aggregate regulatory net capital of the U.K. Subsidiaries was ~~$180,813,~~$185,727, which exceeded the minimum requirement by ~~$161,667.~~$161,659.

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, also are subject to regulation and supervision by the Autorité des

Marchés Financiers. At March 31, ~~2020,~~2021, the consolidated regulatory net capital of CFLF was ~~$124,770,~~$141,077, which exceeded the minimum requirement set for regulatory capital levels by ~~$67,433.~~$72,867. 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. During 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 December 31, ~~2019,~~2020, the regulatory net capital of the combined European regulated group was ~~$182,054,~~$184,842, which exceeded the minimum requirement set for regulatory capital levels by ~~$75,566.~~$66,782. 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 March 31, ~~2020,~~2021, for those subsidiaries with regulatory capital requirements, their aggregate net capital was ~~$145,129,~~$208,178, which exceeded the minimum required capital by ~~$119,036.~~$179,051.

At March 31, ~~2020,~~2021, 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.

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 periods ended March 31, ~~2020~~2021 and ~~2019~~2020 is prepared using the following methodology:

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:

		Three Months Ended							Three Months Ended
		March 31,							March 31,
		2020			2019				2021			2020
Financial Advisory	Net Revenue	$	298,970		$	321,926		Net Revenue	$	317,522		$	298,970
	Operating Expenses		244,247			274,035		Operating Expenses		255,907			244,247
	Operating Income	$	54,723		$	47,891		Operating Income	$	61,615		$	54,723
Asset Management	Net Revenue	$	282,521		$	301,833		Net Revenue	$	347,490		$	282,521
	Operating Expenses		204,769			207,348		Operating Expenses		232,103			204,769
	Operating Income	$	77,752		$	94,485		Operating Income	$	115,387		$	77,752
Corporate	Net Revenue	$	(43,911	)	$	2,243		Net Revenue	$	(5,663	)	$	(43,911	)
	Operating Expenses		2,834			35,756		Operating Expenses		34,946			2,834
	Operating Loss	$	(46,745	)	$	(33,513	)	Operating Loss	$	(40,609	)	$	(46,745	)
Total	Net Revenue	$	537,580		$	626,002		Net Revenue	$	659,349		$	537,580
	Operating Expenses		451,850			517,139		Operating Expenses		522,956			451,850
	Operating Income	$	85,730		$	108,863		Operating Income	$	136,393		$	85,730

	As Of				As Of
	March 31, 2020		December 31, 2019		March 31, 2021		December 31, 2020
Total Assets
Financial Advisory	$	1,090,942	$	1,113,266	$	1,137,054	$	1,157,844
Asset Management		736,487		821,641		893,605		958,588
Corporate		2,777,365		3,116,721		3,805,913		3,399,315
Total	$	4,604,794	$	5,051,628	$	5,836,572	$	5,515,747

The Company’s consolidated VIEs as of March 31, ~~2020~~2021 and December 31, ~~2019~~2020 include certain 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 Company’s consolidated VIE assets and liabilities as reflected in the condensed consolidated statements of financial condition consist of the following at March 31, ~~2020~~2021 and December 31, ~~2019:~~2020. The Company’s consolidated VIE assets, except as it relates to $170,080 and $121,376 of LFI held by Lazard Group as of March 31, 2021 and December 31, 2020, respectively, can only be used to settle the obligations of the consolidated VIEs.

	March 31, 2020		December 31, 2019		March 31, 2021		December 31, 2020
ASSETS
Cash and cash equivalents	$	4,637	$	3,826	$	2,425	$	3,558
Customers and other receivables		502		102		108		160
Investments ~~(a)~~		145,055		97,474		217,876		158,370
Other assets		462		245		767		400
Total Assets	$	150,656	$	101,647	$	221,176	$	162,488

LIABILITIES
Deposits and other customer payables	$	418	$	62	$	67	$	104
Other liabilities		536		513		469		491
Total Liabilities	$	954	$	575	$	536	$	595

On March 11, 2020, the World Health Organization declared the coronavirus (“COVID-19”) a pandemic. In response, on March 27, 2020 the President of the United States signed the Coronavirus Aid, Relief, and Economic Security (CARES) Act into law and the United States Congress continues to discuss additional stimulus measures. Several governments in jurisdictions that encompass the Company’s largest offices and most significant operations have implemented extended strict social distancing measures. In response, the Company has implemented remote work arrangements for virtually all of its employees and restricted business travel. These arrangements have not materially affected our ability to maintain and conduct our business operations, including the operation of financial reporting systems, internal controls over financial reporting, and disclosure controls and procedures. While the COVID-19 pandemic has adversely affected the global economy, the nature and extent of COVID-19’s effect on the Company’s operational and financial performance will depend on future developments, including the course of the pandemic, the success of governments in relaxing social distancing measures and restarting economic activity, the efficacy of monetary and fiscal measures taken or that may be taken in the future, and the potential for structural damage to the economy due to the sharp drop in aggregate demand and, particularly in the U.S., a high level of unemployment, all of which are uncertain and difficult to predict considering the rapidly evolving landscape.

The following discussion should be read in conjunction with Lazard Group’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, ~~2019~~2020 (the “Form 10-K”). All references to ~~“2020,~~“2021,” ~~“2019,~~“2020,” “first quarter” or “the period” refer to, as the context requires, the three month periods ended March 31, ~~2020~~2021 and ~~March 31, 2019.~~2020.

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:

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.

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 is one of the world’s preeminent financial advisory and asset management firms. 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. Founded in 1848 in New Orleans, we currently operate from more than 40 cities and 25 countries across key business and financial centers in North America, Europe, Asia, Australia, 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 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:

	Three Months Ended						Three Months Ended
	March 31,						March 31,
	2020			2019			2021			2020
Financial Advisory		56	%		52	%		48	%		56	%
Asset Management		53			48			53			53
Corporate		(9	)		-			(1	)		(9	)
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 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 and (ii) a fund targeting significant noncontrolling-stake investments in established private companies. We also 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. 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.

InWhile the coronavirus (“COVID-19”) pandemic continues to have a negative impact on economic activity around the world, the rollout of COVID-19 vaccines is raising expectations in the developed economies that the health crisis can be mitigated. Governments and central banks have taken extraordinary measures to support local economies and capital markets, but the macroeconomic outlook remains uncertain while significant health risks persist.

Lazard’s offices around the world have continued to operate in the context of applicable local regulations and guidelines regarding business activity, and in the first quarter of ~~2020, regional outbreaks~~2021, the majority of a novel coronavirus (“COVID-19”) became a global pandemic of unprecedented proportion and impact. The actions taken by governments, including social distancing mandates, severely impacted the global economy. As a result of this global crisis, we are experiencing an unprecedented period of volatility. The impact of this global crisis on the economy and our businesses remains uncertain but we expect a challenging environment in the near-term as a result of elevated uncertainty, capital markets volatility, lower asset valuations and a downturn in global M&A activity.employees worked remotely.

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

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 ~~this Form 10-Q and~~ 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 member 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 equity to our members.

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~~increased in the first quarter of ~~2020~~2021 as compared to ~~2019.~~2020. 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~~increased in the first quarter of ~~2020~~2021 as compared to ~~2019.~~2020.

	Three Months Ended							Three Months Ended
	March 31,							March 31,
	2020		2019		% Incr / (Decr)			2021		2020		% Incr / (Decr)
	($ in billions)							($ in billions)
Completed M&A Transactions:
All deals:
Value	$	653	$	939		(30	)%	$	1,001	$	707		42	%
Number		7,679		8,707		(12	)%		7,044		8,714		(19	)%
Deals Greater than $500 million:
Value	$	496	$	734		(32	)%	$	788	$	519		52	%
Number		239		292		(18	)%		277		268		3	%
Announced M&A Transactions:
All deals:
Value	$	689	$	1,072		(36	)%	$	1,441	$	667		116	%
Number		8,021		8,722		(8	)%		7,722		8,635		(11	)%
Deals Greater than $500 million:
Value	$	516	$	875		(41	)%	$	1,177	$	486		142	%
Number		222		250		(11	)%		450		225		100	%

Global restructuring activity during the first quarter of ~~2020,~~2021, as measured by the number of corporate defaults, ~~increased~~decreased as compared to the first quarter of ~~2019.~~2020. The number of defaulting issuers was 2813 in the first quarter of ~~2020~~2021 according to Moody’s Investors Service, ~~Inc,~~Inc., as compared to 2030 in the first quarter of ~~2019.~~2020.

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.

Equity market indices for major markets at March 31, ~~2020~~2021 generally ~~decreased~~increased as compared to such indices at December 31, ~~2019~~2020 and March 31, ~~2019.~~2020. The percentage change in major equity market indices at March 31, ~~2020,~~2021, as compared to such indices at December 31, ~~2019~~2020 and at March 31, ~~2019,~~2020, is shown in the table below.

	Percentage Changes March 31, 2020 vs.						Percentage Changes March 31, 2021 vs.
	December 31, 2019			March 31, 2019			December 31, 2020			March 31, 2020
MSCI World Index		(21	)%		(10	)%		5	%		55	%
Euro Stoxx		(25	)%		(14	)%		11	%		44	%
MSCI Emerging Market		(24	)%		(17	)%		2	%		59	%
S&P 500		(20	)%		(7	)%		6	%		56	%

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 services, ~~capital raising, restructuring,~~ shareholder advisory, sovereign advisory, capital raising 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, 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 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 ~~60%~~65% of Lazard’s consolidated total assets as of March 31, ~~2020,~~2021, 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, deferred tax assets and certain other assets associated with ~~LFB.~~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 13 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, ~~are~~when presented in conjunction with accounting principles generally accepted in the ~~most~~United States of America (“U.S. GAAP”) measures, are appropriate measures to assess the annual cost of compensation and provide ~~the most~~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:

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. 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, investments in our businesses or various other factors could prevent us from achieving this goal.

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 ~~more~~ 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 ~~and other acquisition-related costs (benefits)” which includes in 2019 the change in fair value~~ of ~~the contingent consideration associated with business acquisitions.~~intangible assets related to acquisitions”.

Lazard Group primarily operates in the U.S. as a limited liability company that is treated as a partnership for U.S. federal income tax purposes. As a result, Lazard Group’s income pertaining to the limited liability company is not subject to U.S. federal income tax because taxes associated with such income represent obligations of its partners. Lazard Group, 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 Unincorporated Business Tax (“UBT”) attributable to its operations apportioned to New York City.

See “Critical Accounting Policies and Estimates—Income Taxes” below and Note 1615 of Notes to Condensed Consolidated Financial Statements for additional information regarding income taxes and our deferred tax assets.

Noncontrolling interests primarily consist of (i) amounts related to Edgewater’s management vehicles that the Company is deemed to control but not own, (ii) LGAC interests (see Note 1 of Notes to Condensed Consolidated Financial Statements) and (iii) consolidated VIE interests held by employees. See Notes 12 and 2019 of Notes to Condensed Consolidated Financial Statements for information regarding the Company’s noncontrolling interests and consolidated VIEs.

Lazard’s condensed consolidated financial statements are presented in U.S. Dollars. Many of our non-U.S. subsidiaries have a functional currency (i.e., the currency in which operational activities are primarily conducted) that is other than the U.S. Dollar, generally the currency of the country in which the subsidiaries are domiciled. Such subsidiaries’ assets and liabilities are translated into U.S. Dollars using exchange rates as of the respective balance sheet date, while revenue and expenses are translated at average exchange rates during the respective periods based on the daily closing exchange rates. Adjustments that result from translating amounts from a subsidiary’s functional currency are reported as a component of members’ 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 March 31, 2020 was negatively impacted by exchange rate movements in comparison to the relevant prior year period. The majority of the impact to net revenue was offset by the impact of the exchange rate movements 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 consolidated and business segment results.

	Three Months Ended						Three Months Ended
	March 31,						March 31,
	2020			2019			2021			2020
	($ in thousands)						($ in thousands)
Net Revenue	$	537,580		$	626,002		$	659,349		$	537,580
Operating Expenses:
Compensation and benefits		318,283			370,248			399,309			318,283
Non-compensation		133,139			147,575			123,632			133,139
Amortization and other acquisition-related costs (benefits)		428			(684	)
Amortization of intangible assets related to acquisitions								15			428
Total operating expenses		451,850			517,139			522,956			451,850
Operating Income		85,730			108,863			136,393			85,730
Provision for income taxes		15,995			15,988			26,777			15,995
Net Income		69,735			92,875			109,616			69,735
Less - Net Loss Attributable to Noncontrolling Interests		(5,691	)		(566	)
Less - Net Income (Loss) Attributable to Noncontrolling Interests								3,527			(5,691	)
Net Income Attributable to Lazard Group	$	75,426		$	93,441		$	106,089		$	75,426
Operating Income, as a % of net revenue		15.9	%		17.4	%		20.7	%		15.9	%

The tables below describe the components of operating revenue, adjusted compensation and benefits expense, adjusted non-compensation expense, earnings from operations and related key ratios, which are non-GAAP measures used by the Company to manage its business. We believe such non-GAAP measures in conjunction with U.S. GAAP measures provide ~~the most~~a meaningful and useful basis for comparison between present, historical and future periods, as described above.

	Three Months Ended						Three Months Ended
	March 31,						March 31,
	2020			2019			2021			2020
	($ in thousands)						($ in thousands)
Adjusted Compensation and Benefits Expense:
Total compensation and benefits expense	$	318,283		$	370,248		$	399,309		$	318,283
Adjustments:
Noncontrolling interests (a)		(1,706	)		(1,889	)		(1,958	)		(1,706	)
(Charges) credits pertaining to LFI (b)		19,637			(13,870	)		(7,487	)		19,637
Expenses associated with restructuring and closing of certain offices								(6,623	)		-
Adjusted compensation and benefits expense	$	336,214		$	354,489		$	383,241		$	336,214
Adjusted compensation and benefits expense, as a % of operating revenue		59.8	%		58.8	%		59.2	%		59.8	%

(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						Three Months Ended
	March 31,						March 31,
	2020			2019			2021			2020
	($ in thousands)						($ in thousands)
Adjusted Non-Compensation Expense:
Total non-compensation expense	$	133,139		$	147,575		$	123,632		$	133,139
Adjustments:
Expenses associated with ERP system implementation (a)		-			(3,205	)
Expenses relating to office space reorganization (b)		(3,664	)		-
Distribution fees, reimbursable deal costs and bad debt expense (c)		(16,388	)		(24,296	)
Charges pertaining to senior debt refinancing (d)		-			(4,243	)
Noncontrolling interests (e)		(1,036	)		(770	)
Expenses relating to office space reorganization (a)								(1,416	)		(3,664	)
Distribution fees, reimbursable deal costs, bad debt expense and other (b)								(16,705	)		(16,388	)
Noncontrolling interests (c)								(679	)		(1,036	)
Expenses associated with restructuring and closing of certain offices								(2,971	)		-
Adjusted non-compensation expense	$	112,051		$	115,061		$	101,861		$	112,051
Adjusted non-compensation expense, as a % of operating revenue		19.9	%		19.1	%		15.7	%		19.9	%

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

~~(b) Represents incremental rent expense related to office space reorganization.~~

	Three Months Ended						Three Months Ended
	March 31,						March 31,
	2020			2019			2021			2020
	($ in thousands)						($ in thousands)
Earnings From Operations:
Operating revenue	$	562,304		$	603,240		$	647,070		$	562,304
Deduct:
Adjusted compensation and benefits expense		(336,214	)		(354,489	)		(383,241	)		(336,214	)
Adjusted non-compensation expense		(112,051	)		(115,061	)		(101,861	)		(112,051	)
Earnings from operations	$	114,039		$	133,690		$	161,968		$	114,039
Earnings from operations, as a % of operating revenue		20.3	%		22.2	%		25.0	%		20.3	%

	As of						As of
	March 31, 2020		December 31, 2019		March 31, 2019		March 31, 2021		December 31, 2020		March 31, 2020
Headcount:
Managing Directors:
Financial Advisory		167		160		178		181		168		167
Asset Management		107		104		110		110		105		107
Corporate		21		19		17		23		21		21
Total Managing Directors		295		283		305		314		294		295
Other Business Segment Professionals and Support Staff:
Financial Advisory		1,347		1,342		1,326		1,334		1,370		1,347
Asset Management		965		986		1,004		1,012		1,012		965
Corporate		418		389		396		412		412		418
Total		3,025		3,000		3,031		3,072		3,088		3,025

The Company’s quarterly revenue and profits can fluctuate materially depending on the number, size and timing of completed transactions on which it advised, as well as seasonality, 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.

The Company reported net income attributable to Lazard Group of ~~$75~~$106 million, as compared to net income attributable to Lazard Group of ~~$93~~$75 million in the ~~2019~~2020 period.

Net revenue ~~decreased $88~~increased $122 million, or ~~14%~~23%, with operating revenue ~~decreasing $41~~increasing $85 million, or 7%15%, as compared to the ~~2019~~2020 period. Fee revenue from investment banking and other advisory activities ~~decreased $22~~increased $19 million, or 7%6%, as compared to the ~~2019~~2020 period. Asset management fees, including incentive fees, ~~decreased $23~~increased $58 million, or 8%21%, as compared to the ~~2019~~2020 period. In the aggregate, interest income, other revenue and interest expense ~~decreased $43~~increased $45 million, as compared to the ~~2019~~2020 period.

Compensation and benefits expense ~~decreased $52~~increased $81 million, or ~~14%~~25%, as compared to the ~~2019 period.~~2020 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) ~~decreased $18~~was $383 million, an increase of $47 million, or 5%14%, as compared to $336 million in the ~~2019~~2020 period. The ratio of adjusted compensation and benefits expense to operating revenue was 59.2% for the 2021 period, as compared to 59.8% for the 2020 ~~period, as compared to 58.8% for the 2019~~ period.

Non-compensation expense decreased ~~$14~~$10 million, or ~~10%~~7%, as compared to the ~~2019~~2020 period, primarily due to decreased marketing and business development expenses due to lower travel expenses. Adjusted non-compensation expense decreased $3$10 million, or 3%9%, as compared to the ~~2019~~2020 period. The ratio of adjusted non-compensation expense to operating revenue was 15.7% for the 2021 period, as compared to 19.9% for the 2020 ~~period,~~period.

Amortization of intangible assets related to acquisitions remained substantially the same as compared ~~to 19.1% for~~ the ~~2019~~2020 period.

Operating income ~~decreased $23~~increased $51 million, or ~~21%~~59%, as compared to the ~~2019~~2020 period.

Earnings from operations ~~decreased $20~~increased $48 million, or ~~15%~~42%, as compared to the ~~2019~~2020 period, and, as a percentage of operating revenue, was ~~20.3%~~25.0%, as compared to ~~22.2%~~20.3% in the ~~2019~~2020 period.

The provision for income taxes reflects an effective tax rate of ~~18.7%~~19.6%, as compared to ~~14.7%~~18.7% for the ~~2019~~2020 period. The increase in the effective tax rate principally relates to ~~a decrease~~an increase in discrete ~~benefits from share-based incentive compensation.~~charges and changes in the geographic mix of earnings.

Net ~~loss~~income (loss) attributable to noncontrolling interests ~~increased $5~~reflects income of $4 million in the 2021 period as compared to a loss of $6 million in the ~~2019~~2020 period.

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 support of the segment 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 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.

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

	Three Months Ended						Three Months Ended
	March 31,						March 31,
	2020			2019			2021			2020
	($ in thousands)						($ in thousands)
Net Revenue	$	298,970		$	321,926		$	317,522		$	298,970
Operating Expenses		244,247			274,035			255,907			244,247
Operating Income	$	54,723		$	47,891		$	61,615		$	54,723
Operating Income, as a % of net revenue		18.3	%		14.9	%		19.4	%		18.3	%

Certain Lazard fee and transaction statistics for the Financial Advisory segment are set forth below:

	Three Months Ended						Three Months Ended
	March 31,						March 31,
	2020			2019			2021			2020
Lazard Statistics:
Number of clients with fees greater than $1 million:
Financial Advisory		56			63			75			56
Percentage of total Financial Advisory net revenue from top 10 clients		40	%		43	%		32	%		40	%
Number of M&A transactions completed with values greater than $500 million (a)		19			22			20			22

The geographical distribution of Financial Advisory net revenue is set forth below in percentage terms and is based on the Lazard offices that generate Financial Advisory net revenue, which are located in the Americas ~~(primarily in the U.S.~~(U.S. and Latin America), EMEA (primarily in the U.K., France, Germany, Italy and Spain) and the Asia Pacific region ~~(primarily in Australia)~~ and therefore may not be reflective of the geography in which the clients are located.

	Three Months Ended						Three Months Ended
	March 31,						March 31,
	2020			2019			2021			2020
Americas		59	%		64	%		56	%		59	%
EMEA		39			34			42			39
Asia Pacific		2			2			2			2
Total		100	%		100	%		100	%		100	%

The Company’s managing directors and many of its professionals have significant experience, and many of them are able to use this experience to advise on M&A, restructuring and other strategic advisory matters, depending on clients’ needs. This flexibility allows Lazard to better match its professionals with the counter-cyclical business cycles of mergers and acquisitions and restructurings. While Lazard measures revenue by practice area, Lazard does not separately measure the costs or profitability of M&A services as compared to restructuring or other services. Accordingly, Lazard measures performance in its Financial Advisory segment based on overall segment operating revenue and operating income margins.

Financial Advisory’s quarterly revenue and profits can fluctuate materially depending on the number, size and timing of completed transactions on which it advised, as well as seasonality and other factors. Accordingly, the revenue and profits in any particular quarter or period 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.

Financial Advisory net revenue ~~decreased $23~~increased $19 million, or 7%6%, as compared to the ~~2019~~2020 period. The ~~decrease~~increase in Financial Advisory net revenue was primarily a result of ~~a decrease~~an increase in the number of fees ~~greater than $10~~between $1 million and $5 million as compared to the ~~2019~~2020 period.

Operating expenses ~~decreased $30~~increased $12 million, or ~~11%~~5%, as compared to the ~~2019~~2020 period, primarily due to ~~a decrease~~increases in compensation and benefits expense ~~and~~associated with increased operating revenue, partially offset by a decrease in marketing and business development expenses.

Financial Advisory operating income was ~~$55~~$62 million ~~an increase of $7 million, or 14%,~~ as compared to operating income of ~~$48~~$55 million in the ~~2019~~2020 period and, as a percentage of net revenue, was ~~18.3%~~19.4%, as compared to ~~14.9%~~18.3% in the ~~2019~~2020 period.

The following table shows the composition of AUM for the Asset Management segment:

	As of				As of
	March 31, 2020		December 31, 2019		March 31, 2021		December 31, 2020
	($ in millions)				($ in millions)
AUM by Asset Class:
Equity:
Emerging Markets	$	27,716	$	40,612	$	32,700	$	33,254
Global		39,094		49,759		58,560		56,246
Local		37,496		48,985		51,246		48,672
Multi-Regional		50,335		66,185		72,953		71,560
Total Equity		154,641		205,541		215,459		209,732
Fixed Income:
Emerging Markets		11,424		14,387		12,708		13,651
Global		9,100		9,233		14,177		11,962
Local		5,421		5,450		5,556		5,600
Multi-Regional		8,376		9,193		11,808		12,571
Total Fixed Income		34,321		38,263		44,249		43,784
Alternative Investments		1,902		2,149		3,141		2,748
Private Equity		1,406		1,385		1,324		1,420
Cash Management		778		901		679		958
Total AUM	$	193,048	$	248,239	$	264,852	$	258,642

Total AUM at March 31, ~~2020~~2021 was ~~$193~~$265 billion, ~~a decrease~~an increase of ~~$55~~$6 billion, or ~~22%~~2%, as compared to total AUM of ~~$248~~$259 billion at December 31, ~~2019~~2020 due to market ~~depreciation, net outflows and~~appreciation, partially offset by foreign exchange ~~depreciation.~~depreciation and net outflows. Average AUM for the first quarter of ~~2020 decreased 3%~~2021 increased 18% as compared to the first quarter of ~~2019~~2020 and ~~decreased 7%~~increased 6% as compared to the fourth quarter of ~~2019.~~2020.

As of both March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, approximately ~~86%~~87% of our AUM was managed on behalf of institutional clients, including corporations, labor unions, public pension funds, insurance companies and banks, and through sub-advisory relationships, mutual fund sponsors, broker-dealers and registered advisors. As of both March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, approximately ~~14%~~13% of our AUM was managed on behalf of individual client relationships, which are principally with family offices and individuals.

As of March 31, ~~2020,~~2021, AUM with foreign currency exposure represented approximately ~~70%~~68% of our total AUM, as compared to ~~67% as of~~69% at December 31, ~~2019.~~2020. AUM with foreign currency exposure generally declines in value with the strengthening of the U.S. Dollar and increases in value as the U.S. Dollar weakens, with all other factors held constant.

The following is a summary of changes in AUM by asset class for the three month periods ended March 31, ~~2020~~2021 and ~~2019:~~2020:

	Three Months Ended March 31, 2020																		Three Months Ended March 31, 2021
	AUM Beginning Balance		Inflows (a)		Outflows (a)			Net Flows			Market Value Appreciation/ (Depreciation)			Foreign Exchange Appreciation/ (Depreciation)			AUM Ending Balance		AUM Beginning Balance		Inflows (a)		Outflows (a)			Net Flows			Market Value Appreciation/ (Depreciation)			Foreign Exchange Appreciation/ (Depreciation)			AUM Ending Balance
	($ in millions)																		($ in millions)
Equity	$	205,541	$	6,593	$	(10,398	)	$	(3,805	)	$	(42,083	)	$	(5,012	)	$	154,641	$	209,732	$	7,561	$	(11,327	)	$	(3,766	)	$	12,779		$	(3,286	)	$	215,459
Fixed Income		38,263		2,442		(3,487	)		(1,045	)		(1,397	)		(1,500	)		34,321		43,784		3,794		(1,946	)		1,848			(133	)		(1,250	)		44,249
Other		4,435		250		(313	)		(63	)		(207	)		(79	)		4,086		5,126		700		(461	)		239			(166	)		(55	)		5,144
Total	$	248,239	$	9,285	$	(14,198	)	$	(4,913	)	$	(43,687	)	$	(6,591	)	$	193,048	$	258,642	$	12,055	$	(13,734	)	$	(1,679	)	$	12,480		$	(4,591	)	$	264,852

	Three Months Ended March 31, 2019																		Three Months Ended March 31, 2020
	AUM Beginning Balance		Inflows		Outflows			Net Flows			Market Value Appreciation/ (Depreciation)			Foreign Exchange Appreciation/ (Depreciation)			AUM Ending Balance		AUM Beginning Balance		Inflows		Outflows			Net Flows			Market Value Appreciation/ (Depreciation)			Foreign Exchange Appreciation/ (Depreciation)			AUM Ending Balance
	($ in millions)																		($ in millions)
Equity	$	176,998	$	6,398	$	(7,229	)	$	(831	)	$	19,564		$	(636	)	$	195,095	$	205,541	$	6,593	$	(10,398	)	$	(3,805	)	$	(42,083	)	$	(5,012	)	$	154,641
Fixed Income		32,938		2,618		(1,884	)		734			1,568			(232	)		35,008		38,263		2,442		(3,487	)		(1,045	)		(1,397	)		(1,500	)		34,321
Other		4,798		519		(384	)		135			(44	)		(13	)		4,876		4,435		250		(313	)		(63	)		(207	)		(79	)		4,086
Total	$	214,734	$	9,535	$	(9,497	)	$	38		$	21,088		$	(881	)	$	234,979	$	248,239	$	9,285	$	(14,198	)	$	(4,913	)	$	(43,687	)	$	(6,591	)	$	193,048

As of April ~~24, 2020,~~23, 2021, AUM was ~~$198.1~~$274.1 billion, a ~~$5.1~~$9.2 billion increase since March 31, ~~2020.~~2021. The increase in AUM was due to market appreciation of ~~$7.6~~$6.7 billion and foreign exchange appreciation of $2.7 billion, partially offset by net outflows of ~~$1.8 billion and foreign exchange depreciation of $0.7~~$0.2 billion.

Average AUM for the three month periods ended March 31, ~~2020~~2021 and ~~2019~~2020 for each significant asset class is set forth below. Average AUM generally represents the average of the monthly ending AUM balances for the period.

	Three Months Ended				Three Months Ended
	March 31,				March 31,
	2020		2019		2021		2020
	($ in millions)				($ in millions)
Average AUM by Asset Class:
Equity	$	180,375	$	189,221	$	211,999	$	180,375
Fixed Income		36,896		34,716		44,335		36,896
Alternative Investments		2,047		2,693		2,918		2,047
Private Equity		1,400		1,415		1,347		1,400
Cash Management		816		792		864		816
Total Average AUM	$	221,534	$	228,837	$	261,463	$	221,534

The following table summarizes the reported operating results attributable to the Asset Management segment:

	Three Months Ended						Three Months Ended
	March 31,						March 31,
	2020			2019			2021			2020
	($ in thousands)						($ in thousands)
Net Revenue	$	282,521		$	301,833		$	347,490		$	282,521
Operating Expenses		204,769			207,348			232,103			204,769
Operating Income	$	77,752		$	94,485		$	115,387		$	77,752
Operating Income, as a % of net revenue		27.5	%		31.3	%		33.2	%		27.5	%

The geographical distribution of Asset Management net revenue is set forth below in percentage terms, and is based on the Lazard offices that manage and distribute the respective AUM amounts. Such geographical distribution may not be reflective of the geography of the investment products or clients.

	Three Months Ended						Three Months Ended
	March 31,						March 31,
	2020			2019			2021			2020
Americas		51	%		55	%		46	%		51	%
EMEA		36			34			44			36
Asia Pacific		13			11			10			13
Total		100	%		100	%		100	%		100	%

Asset Management’s quarterly revenue and profits in any particular quarter or period may not be indicative of future results and may fluctuate based on the performance of the equity and other capital markets. Lazard management believes that annual results are the most meaningful basis for comparison among present, historical and future periods.

Asset Management net revenue ~~decreased $19~~increased $65 million, or 6%23%, as compared to the ~~2019~~2020 period. Management fees and other revenue was ~~$281~~$315 million, ~~a decrease~~an increase of ~~$20~~$34 million, or 7%12%, as compared to ~~$301~~$281 million in the ~~2019~~2020 period, primarily due to ~~a decrease~~an increase in average ~~AUM and change in asset mix.~~AUM. Incentive fees were $2$33 million, an increase of $1$31 million as compared to $1$2 million in the ~~2019~~2020 period.

Operating expenses ~~decreased $3~~increased $27 million, or 1%13%, as compared to the ~~2019 period.~~2020 period primarily due to increases in compensation and benefits expense associated with increased operating revenue.

Asset Management operating income was ~~$78~~$115 million, ~~a decrease~~an increase of ~~$16~~$37 million, or ~~18%~~47%, as compared to operating income of ~~$94~~$78 million in the ~~2019~~2020 period and as a percentage of net revenue, was ~~27.5%~~33.2%, as compared to ~~31.3%~~27.5% in the ~~2019~~2020 period.

The following table summarizes the reported operating results attributable to the Corporate segment:

	Three Months Ended						Three Months Ended
	March 31,						March 31,
	2020			2019			2021			2020
	($ in thousands)						($ in thousands)
Interest Income	$	1,839		$	2,605		$	494		$	1,839
Interest Expense		(18,970	)		(17,901	)		(18,763	)		(18,970	)
Net Interest (Expense)		(17,131	)		(15,296	)		(18,269	)		(17,131	)
Other Revenue (Expense)		(26,780	)		17,539			12,606			(26,780	)
Net Revenue (Expense)		(43,911	)		2,243			(5,663	)		(43,911	)
Operating Expenses (Benefit)		2,834			35,756
Operating Expenses								34,946			2,834
Operating Income (Loss)	$	(46,745	)	$	(33,513	)	$	(40,609	)	$	(46,745	)

Corporate operating results in any particular quarter or period may not be indicative of future results and may fluctuate based on a variety of factors. Lazard management believes that annual results are the most meaningful basis for comparison among present, historical and future periods.

Net interest expense increased $2$1 million, or ~~12%~~7%, as compared to the ~~2019.~~2020 period.

Other revenue ~~decreased $44~~increased $39 million as compared to the ~~2019~~2020 period primarily due to ~~losses~~higher income in the ~~2020 period as compared to gains in the 2019~~2021 period attributable to investments held in connection with LFI.

Operating expenses ~~decreased $33~~increased $32 million as compared to the ~~2019~~2020 period, primarily due to ~~a decrease~~an increase in compensation and benefits expense, ~~which reflected a decrease~~including an increase in charges pertaining to LFI.

The Company’s cash flows are influenced primarily by the timing of the receipt of Financial Advisory and Asset Management fees, the timing of distributions to members, payments of incentive compensation to managing directors and employees and purchases of common stock. Cash flows were also affected in 2019 by Lazard Group’s issuance of $500 million aggregate principal amount of its 4.375% senior notes maturing in 2029 (the “2029 Notes”) and the redemption of the 2020 Notes.

M&A and other advisory and Asset Management fees are generally collected within 60 days of billing, while Restructuring fee collections may extend beyond 60 days, particularly those that involve bankruptcies with court-ordered holdbacks. Fees from our

Private Capital Advisory activities are generally collected over a four-year period from billing and typically include an interest component.

The Company makes cash payments for, or in respect of, a significant portion of its incentive compensation during the first three months of each calendar year with respect to the prior year’s results.

	Three Months Ended						Three Months Ended
	March 31,						March 31,
	2020			2019			2021			2020
	($ in millions)						($ in millions)
Cash Provided By (Used In):
Operating activities:
Net income	$	70		$	93		$	110		$	70
Adjustments to reconcile net income to net cash provided by operating activities (a)		128			126			139			128
Other operating activities (b)		(374	)		(401	)		(369	)		(374	)
Net cash provided by (used in) operating activities		(176	)		(182	)
Net cash used in operating activities								(120	)		(176	)
Investing activities		(12	)		(6	)		(7	)		(12	)
Financing activities (c)		(236	)		169			304			(236	)
Effect of exchange rate changes		(61	)		(30	)		(79	)		(61	)
Net Decrease in Cash and Cash Equivalents and Restricted Cash		(485	)		(49	)
Net Increase (Decrease) in Cash and Cash Equivalents and Restricted Cash								98			(485	)
Cash and Cash Equivalents and Restricted Cash (d):
Beginning of Period		2,388			2,230			2,499			2,388
End of Period	$	1,903		$	2,181		$	2,597		$	1,903

	Three Months Ended					Three Months Ended
	March 31,					March 31,
	2020		2019			2021		2020
	($ in millions)					($ in millions)
Depreciation and amortization of property	$	9	$	8		$	9	$	9
Noncash lease expense		15		12			17		15
Amortization of deferred expenses and share-based incentive compensation		101		105			100		101
Deferred tax provision (benefit)		3		(2	)
Amortization and other acquisition-related costs (benefits)		-		(1	)
Loss on extinguishment of debt		-		4
Deferred tax provision							13		3
Total	$	128	$	126		$	139	$	128

The Company’s liquidity and capital resources are derived from operating activities, financing activities and equity offerings.

Net revenue, operating income and cash receipts fluctuate significantly between periods and could be affected by various risks and uncertainties, including, but not limited to, the ongoing effects of the COVID-19 pandemic. In the case of Financial Advisory, fee receipts

are generally dependent upon the successful completion of client transactions, the occurrence and timing of which is irregular and not subject to Lazard’s control.

Liquidity is significantly impacted by cash payments for, or in respect of, incentive compensation, a significant portion of which are made during the first three months of the year. As a consequence, cash on hand generally declines in the beginning of the year and gradually builds over the remainder of the year. We also pay certain tax advances during the year on behalf of certain managing directors, which serve to reduce their respective incentive compensation payments. We expect this seasonal pattern of cash flow to continue.

Liquidity is also affected by the level of deposits and other customer payables, principally at LFB. To the extent that such deposits and other customer payables rise or fall, this has a corresponding impact on liquidity held at LFB, with the majority of such amounts generally being recorded in “deposits with banks and short-term investments”. In the first quarter of ~~2020,~~2021, as reflected on the condensed consolidated statements of financial condition, both “deposits with banks and short-term investments” and “deposits and other customer payables” ~~decreased~~were relatively flat as compared to December 31, ~~2019, due to a lower~~2020, and reflect the level of LFB customer-related demand deposits, primarily from clients and funds managed by LFG.

Lazard’s condensed consolidated financial statements are presented in U.S. Dollars. Many of Lazard’s non-U.S. subsidiaries have a functional currency (i.e., the currency in which operational activities are primarily conducted) that is other than the U.S. Dollar, generally the currency of the country in which such subsidiaries are domiciled. Such subsidiaries’ assets and liabilities are translated into U.S. Dollars at the respective balance sheet date exchange rates, while revenue and expenses are translated at average exchange rates during the year 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 members’ equity. Foreign currency remeasurement gains and losses on transactions in non-functional currencies are included on the condensed consolidated statements of operations.

We regularly monitor our liquidity position, including cash levels, investments in U.S. Treasury securities, credit lines, principal investment commitments, interest and principal payments on debt, capital expenditures, distributions to members, purchases of shares of common stock and matters relating to liquidity and to compliance with regulatory net capital requirements. At March 31, ~~2020,~~2021, Lazard had approximately ~~$781~~$967 million of cash, with such amount including approximately ~~$468~~$528 million held at Lazard’s operations outside the U.S. Lazard provides for income taxes on substantially all of its foreign earnings. We expect that no material amount of additional taxes would be recognized upon receipt of dividends or distributions of such earnings from our foreign operations.

As of March 31, ~~2020,~~2021, Lazard had approximately ~~$168~~$213 million in unused lines of credit available to it, including a ~~$150~~$200 million, ~~five-year,~~three-year, senior revolving credit facility with a group of lenders that expires in ~~September 2020~~July 2023 (the “Amended and Restated Credit Agreement”) and unused lines of credit available to LFB of approximately ~~$16~~$12 million.

The Amended and Restated Credit Agreement contains customary terms and conditions, including limitations on consolidations, mergers, indebtedness and certain payments, as well as financial condition covenants relating to leverage and interest coverage ratios. Lazard Group’s obligations under the Amended and Restated Credit Agreement may be accelerated upon customary events of default, including non-payment of principal or interest, breaches of covenants, cross-defaults to other material debt, a change in control and specified bankruptcy events. 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.

As long as the lenders’ commitments remain in effect, any loan pursuant to the Amended and Restated Credit Agreement remains outstanding and unpaid or any other amount is due to the lending bank group, the Amended and Restated Credit Agreement includes financial covenants that require that Lazard Group not permit (i) its Consolidated Leverage Ratio (as defined in the Amended and Restated Credit Agreement) for the 12-month period ending on the last day of any fiscal quarter to be greater than 3.25 to 1.00, provided that the Consolidated Leverage Ratio may be greater than 3.25 to 1.00 for two (consecutive or nonconsecutive) quarters so long as it is not greater than 3.50 to 1.00 on the last day of any such quarter, or (ii) its Consolidated Interest Coverage Ratio (as defined in the Amended and Restated Credit Agreement) for the 12-month period ending on the last day of any fiscal quarter to be less than 3.00 to 1.00. For the 12-month period ended March 31, ~~2020,~~2021, Lazard Group was in compliance with such ratios, with its Consolidated Leverage Ratio being ~~1.83~~1.69 to 1.00 and its Consolidated Interest Coverage Ratio being ~~12.21~~13.53 to 1.00. In any event, no amounts were outstanding under the Amended and Restated Credit Agreement as of March 31, ~~2020.~~2021.

In addition, the Amended and Restated Credit Agreement contains certain other covenants (none of which relate to financial condition), events of default and other customary ~~provisions.~~provisions and also contains customary LIBOR-replacement mechanics. At March 31, ~~2020,~~2021, the Company was in compliance with all of these provisions.

Lazard’s annual cash flow generated from operations historically has been sufficient to enable it to meet its annual obligations. We believe that our cash flows from operating activities should be sufficient for us to fund our current obligations for the next 12 months.

The table below sets forth our corporate indebtedness as of March 31, ~~2020~~2021 and December 31, ~~2019.~~2020. The agreements with respect to this indebtedness are discussed in more detail in our condensed consolidated financial statements and related notes included elsewhere in this Form 10-Q and in our Form 10-K.

		Outstanding as of													Outstanding as of
		March 31, 2020						December 31, 2019							March 31, 2021						December 31, 2020
Senior Debt	Maturity Date	Principal		Unamortized Debt Costs		Carrying Value		Principal		Unamortized Debt Costs		Carrying Value		Maturity Date	Principal		Unamortized Debt Costs		Carrying Value		Principal		Unamortized Debt Costs		Carrying Value
		($ in millions)													($ in millions)
Lazard Group 2025 Senior Notes	2025	$	400.0	$	2.3	$	397.7	$	400.0	$	2.4	$	397.6	2025	$	400.0	$	1.8	$	398.2	$	400.0	$	2.0	$	398.0
Lazard Group 2027 Senior Notes	2027		300.0		2.7		297.3		300.0		2.8		297.2	2027		300.0		2.3		297.7		300.0		2.4		297.6
Lazard Group 2028 Senior Notes	2028		500.0		7.6		492.4		500.0		7.8		492.2	2028		500.0		6.4		493.6		500.0		6.6		493.4
Lazard Group 2029 Senior Notes	2029		500.0		7.2		492.8		500.0		7.4		492.6	2029		500.0		6.1		493.9		500.0		6.3		493.7
		$	1,700.0	$	19.8	$	1,680.2	$	1,700.0	$	20.4	$	1,679.6		$	1,700.0	$	16.6	$	1,683.4	$	1,700.0	$	17.3	$	1,682.7

During March 2019, Lazard Group completed an offering of the 2029 Notes. Lazard Group used a portion of the net proceeds of the 2029 Notes to redeem or otherwise retire the remaining 2020 Notes in transactions that occurred during March 2019 and April 2019.

The indenture and supplemental indentures relating to Lazard Group’s senior notes contain certain covenants (none of which relate to financial condition), events of default and other customary provisions. At March 31, ~~2020,~~2021, the Company was in compliance with all of these provisions. We may, to the extent required and subject to restrictions contained in our financing arrangements, use other financing sources, which may cause us to be subject to additional restrictions or covenants.

See Note 10 of Notes to Condensed Consolidated Financial Statements for additional information regarding senior debt.

At March 31, ~~2020,~~2021, total members’ equity was ~~$285~~$652 million, as compared to ~~$287~~$711 million at December 31, ~~2019,~~2020, including ~~$215~~$553 million and ~~$219~~$625 million attributable to Lazard Group on the respective dates. The net activity in members’ equity during the three month period ended March 31, ~~2020~~2021 is reflected in the table below (in millions of dollars):

Members’ Equity - January 1, 2020	$	287
Adjustment for cumulative effect on prior years from the adoption of new accounting guidance		(8	)
Balance as adjusted January 1, 2020		279
Members’ Equity - January 1, 2021				$	711
Increase (decrease) due to:
Net income		70			110
Other comprehensive loss		(36	)		(18	)
Amortization of share-based incentive compensation		72			68
Purchase of common stock		(95	)		(123	)
Settlement of share-based incentive compensation (a)		(67	)		(65	)
Distributions to members and noncontrolling interests					(15	)
Contributions from members		56			14
Change in redemption value of redeemable noncontrolling interests					(41	)
Other - net		6			11
Members’ Equity - March 31, 2020	$	285
Members’ Equity - March 31, 2021				$	652

The Board of Directors of Lazard has issued a series of authorizations to repurchase common stock, which help offset the dilutive effect of our share-based incentive compensation plans. During a given year Lazard Ltd intends to repurchase at least as many shares as it expects to ultimately issue pursuant to such compensation plans in respect of year-end incentive compensation attributable to the prior year. The rate at which Lazard Ltd purchases shares in connection with this annual objective may vary from period to period due to a variety of factors. Purchases with respect to such program are set forth in the table below:

As of March 31, ~~2020,~~2021, a total of ~~$306~~$177 million of share repurchase authorization remained available under Lazard Ltd’s share repurchase program, ~~$6 million of which will expire on December 31, 2020 and $300 million of~~ which will expire on December 31, 2021.

In addition, on April 29, 2021, the Board of Directors of Lazard authorized the repurchase of up to $300 million of additional shares of common stock, which authorization will expire on December 31, 2022, bringing the total available share repurchase authorization as of April 29, 2021 to approximately $439 million.

See Notes 12 and 13 of Notes to Condensed Consolidated Financial Statements for additional information regarding Lazard’s members’ equity and incentive plans, respectively.

We actively monitor our regulatory capital base. Our principal subsidiaries are subject to regulatory requirements in their respective jurisdictions to ensure their general financial soundness and liquidity, which require, among other things, that we comply with rules regarding certain minimum capital requirements, record-keeping, reporting procedures, relationships with customers, experience and training requirements for employees and certain other requirements and procedures. These regulatory requirements may restrict the flow of funds to and from affiliates. See Note 1817 of Notes to Condensed Consolidated Financial Statements for further information. These regulations differ in the U.S., the U.K., France and other countries in which we operate. Our capital structure is designed to provide each of our subsidiaries with capital and liquidity consistent with its business and regulatory requirements. For a discussion of regulations relating to us, see Item 1, “Business—Regulation” included in our Form 10-K.

The following table sets forth information relating to Lazard’s contractual obligations as of March 31, ~~2020:~~2021:

	Contractual Obligations Payment Due by Period										Contractual Obligations Payment Due by Period
	Total		Less than 1 Year		1-3 Years		3-5 Years		More than 5 Years		Total		Less than 1 Year		1-3 Years		3-5 Years		More than 5 Years
	($ in thousands)										($ in thousands)
Senior debt (including interest)	$	2,238,542	$	70,250	$	140,500	$	539,792	$	1,488,000	$	2,168,292	$	70,250	$	140,500	$	524,792	$	1,432,750
Operating leases (exclusive of $16,502 of committed sublease income)		767,436		64,901		150,713		124,169		427,653
Operating leases (exclusive of $10,101 of committed sublease income)												705,938		67,621		140,427		123,116		374,774
Investment capital funding commitments (a)		6,056		6,056		-		-		-		5,865		5,865		-		-		-
Total (b)	$	3,012,034	$	141,207	$	291,213	$	663,961	$	1,915,653	$	2,880,095	$	143,736	$	280,927	$	647,908	$	1,807,524

Management’s discussion and analysis of our condensed consolidated financial condition and results of operations is based upon our condensed consolidated financial statements, which have been prepared in conformity with U.S. GAAP. The preparation of Lazard’s condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, Lazard evaluates its estimates, including those related to revenue recognition, income taxes, investing activities and goodwill. Lazard bases these estimates on historical experience and various other assumptions that it believes to be reasonable under the circumstances, the

results of which form the basis for making judgments, including judgments regarding the carrying values of assets and liabilities, that are not readily apparent from other sources. Actual results may differ from these estimates.

Lazard believes that the critical accounting policies set forth below comprise the most significant estimates and judgments used in the preparation of its condensed consolidated financial statements.

Lazard generates substantially all of its net revenue from providing Financial Advisory and Asset Management services to clients. Lazard recognizes revenue when the following criteria are met:

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. See “Financial Statement Overview” for a description of our revenue recognition policies on such fees. If, in Lazard’s judgment, collection of a fee is not probable, Lazard will not recognize revenue until the uncertainty is removed. We maintain an allowance for doubtful accounts to provide coverage for estimated losses from our receivables. We determine the adequacy of the allowance under CECL by (i) applying a bad debt charge-off rate based on historical charge-off experience; (ii) estimating the probability of loss based on our analysis of the client’s creditworthiness and specifically reserve against exposures where we determine the receivables are impaired, which may include situations where a fee is in dispute or litigation has commenced; and (iii) performing qualitative assessments to monitor economic risks that may require additional adjustments.

With respect to fees receivable from Financial Advisory activities, such receivables are generally deemed past due when they are outstanding 60 days from the date of invoice, except for certain transactions that include specific contractual payment terms which may vary from approximately one month to four years following the invoice date (as is the case for certain Private Capital Advisory fees) or may be subject to court approval (as is the case with ~~Restructuring~~restructuring activities that include bankruptcy proceedings). In such cases, receivables are deemed past due when payment is not received by the agreed-upon contractual date or the court approval date, respectively. Financial Advisory fee receivables past due, from the date of the invoice or specific contractual payment terms, in excess of 180 days are fully provided for unless there is evidence that the balance is collectible. Notwithstanding our policy for receivables past due, any receivables that we determine are impaired result in specific reserves against such exposures. Asset Management fees are fully provided for when such receivables are outstanding 12 months after the invoice date. In addition, the Company specifically reserves against exposures relating to Asset Management fees where we determine receivables are impaired prior to being outstanding for 12 months.

Annual discretionary compensation represents a significant portion of our annual compensation and benefits expense. We allocate the estimated amount of such annual discretionary compensation to interim periods in proportion to the amount of operating revenue earned in such periods based on an assumed annual ratio of awarded compensation and benefits expense to operating revenue. See “Financial Statement Overview—Operating Expenses” for more information on our periodic compensation and benefits expense.

As part of the process of preparing our consolidated financial statements, we estimate our income taxes for each of our tax-paying entities in its respective jurisdiction. In addition to estimating actual current tax liabilities for these jurisdictions, we also must account for the tax effects of differences between the financial reporting and tax reporting of items, such as basis adjustments, compensation and benefits expense, and depreciation and amortization. Differences which are temporary in nature result in deferred tax assets and liabilities. Significant judgment is required in determining our provision for income taxes, our deferred tax assets and liabilities, any valuation allowance recorded against our deferred tax assets and our unrecognized tax benefits.

We recognize a deferred tax asset if it is more likely than not (defined as a likelihood of greater than 50%) that a tax benefit will be accepted by a taxing authority. The measurement of deferred tax assets and liabilities is based upon currently enacted tax rates in

the applicable jurisdictions. At December 31, ~~2019,~~2020, on a consolidated basis, we recorded gross deferred tax assets of approximately ~~$139~~$154 million, with such amount partially offset by a valuation allowance of approximately ~~$70~~$77 million (as described below).

Subsequent to the initial recognition of deferred tax assets, we also must continually assess the likelihood that such deferred tax assets will be realized. If we determine that we may not fully derive the benefit from a deferred tax asset, we consider whether it would be appropriate to apply a valuation allowance against the applicable deferred tax asset, taking into account all available information. The ultimate realization of a deferred tax asset for a particular entity depends, among other things, on the generation of taxable income by such entity in the applicable jurisdiction.

We consider multiple possible sources of taxable income when assessing a valuation allowance against a deferred tax asset, including:

The assessment regarding whether a valuation allowance is required or should be adjusted also considers all available information, including the following:

The weight we give to any particular item is, in part, dependent upon the degree to which it can be objectively verified. We give greater weight to the recent results of operations of a relevant entity. Pre-tax operating losses on a three year cumulative basis or lack of sustainable profitability are considered objectively verifiable evidence and will generally outweigh a projection of future taxable income.

Certain of our tax-paying entities have individually experienced losses on a cumulative three year basis or have tax attributes that may expire unused. In addition, one of our tax-paying entities has recorded a valuation allowance on substantially all of its deferred tax assets due to the combined effect of operating losses in certain subsidiaries of that entity as well as foreign taxes that together substantially offset any U.S. tax liability. Taking into account all available information, we cannot determine that it is more likely than not that deferred tax assets held by these entities will be realized. Consequently, we have recorded valuation allowances on ~~$70~~$77 million of deferred tax assets held by these entities as of December 31, ~~2019.~~2020.

We record tax positions taken or expected to be taken in a tax return based upon our estimates regarding the amount that is more likely than not to be realized or paid, including in connection with the resolution of any related appeals or other legal processes. Accordingly, we recognize liabilities for certain unrecognized tax benefits based on the amounts that are more likely than not to be settled with the relevant taxing authority. Such liabilities are evaluated periodically as new information becomes available and any changes in the amounts of such liabilities are recorded as adjustments to “income tax expense.” Liabilities for unrecognized tax benefits involve significant judgment and the ultimate resolution of such matters may be materially different from our estimates.

In addition to the discussion above regarding deferred tax assets and associated valuation allowances, as well as unrecognized tax benefit liability estimates, other factors affect our provision for income taxes, including changes in the geographic mix of our business, the level of our annual pre-tax income, transfer pricing and intercompany transactions.

See Item 1A, “Risk Factors” in our Form 10-K and Note 1615 of Notes to Condensed Consolidated Financial Statements for additional information related to income taxes.

Investments consist primarily of ~~interest-bearing deposits,~~ debt and equity securities, and interests in alternative investment, debt, equity and private equity funds.

These investments ~~with the exception of interest-bearing deposits,~~ are carried at fair value on the condensed consolidated statements of financial condition, and any increases or decreases in the fair value of these investments are reflected in earnings. The fair value of investments is generally based upon market prices or the net asset value (“NAV”) or its equivalent for investments in funds. See Note 6 of Notes to Condensed Consolidated Financial Statements for additional information on the measurement of the fair value of investments.

Lazard is subject to market and credit risk on investments held. As such, gains and losses on investment positions held, which arise from sales or changes in the fair value of the investments, are not predictable and can cause periodic fluctuations in net income.

	March 31, 2020		December 31, 2019		March 31, 2021		December 31, 2020
	($ in thousands)				($ in thousands)
Seed investments by asset class:
Equities (a)	$	87,936	$	93,535	$	109,005	$	82,699
Fixed income		12,067		13,923		11,016		10,977
Alternative investments		19,724		5,850		23,201		22,113
Total seed investments		119,727		113,308		143,222		115,789
Other investments owned:
Private equity (b)		20,597		23,588		21,412		20,675
Interest-bearing deposits		450		517
Fixed income and other (c)		24,963		124,670		125,427		125,565
Total other investments owned		46,010		148,775		146,839		146,240
Subtotal		165,737		262,083		290,061		262,029
Add:
Private equity consolidated, not owned (d)		18,561		10,774		18,281		16,892
LFI (e)		321,455		259,138		474,009		379,611
Total investments	$	505,753	$	531,995	$	782,351	$	658,532

	March 31, 2020			December 31, 2019			March 31, 2021			December 31, 2020
Percentage invested in:
Financials		19	%		26	%		14	%		16	%
Consumer		35			32			37			38
Industrial		14			15			13			12
Technology		20			16			25			21
Other		12			11			11			13
Total		100	%		100	%		100	%		100	%

At March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, total investments with a fair value of ~~$505~~$782 million and ~~$531~~$659 million, respectively, included ~~$53~~$61 million and ~~$34~~$53 million, respectively, or ~~10%~~8% and 6%8%, respectively, of investments that were classified using NAV or its equivalent as a practical expedient. See Notes 5 and 6 of Notes to Condensed Consolidated Financial Statements for additional information regarding investments measured at fair value, including the levels of fair value within which such measurements of fair value fall.

As of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, the Company held seed investments of approximately ~~$120~~$143 million and ~~$113~~$116 million, respectively. Seed investments held in entities in which the Company maintained a controlling interest were ~~$56~~$80 million in ~~eight~~nine entities as of March 31, ~~2020,~~2021, as compared to ~~$47~~$59 million in seven entities as of December 31, ~~2019.~~2020.

As of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, the Company did not consolidate or deconsolidate any seed investment entities or LFI investment entities with the exception of the consolidation of certain LFI funds (see Note 2019 of Notes to the Condensed Consolidated Financial Statements). As such, 100% of the recorded balance of seed investments and substantially all of LFI investments as of March 31, ~~2020~~2021 and December 31, ~~2019~~2020 represented the Company’s economic interest in the seed and LFI investments. See “—Consolidation of Variable Interest Entities” below for more information on the Company’s policy regarding the consolidation of seed and LFI investment entities.

For additional information regarding risks associated with our investments, see “Risk Management—Investments” below as well as Item 1A, “Risk Factors—Other Business Risks—Our results of operations may be affected by fluctuations in the fair value of positions held in our investment portfolios” in our Form 10-K.

AUM primarily consists of debt and equity instruments, which have a value that is readily available based on either prices quoted on a recognized exchange or prices provided by external pricing services.

Prices of equity and debt securities and other instruments that comprise our AUM are provided by well-recognized, independent, third-party vendors. Such third-party vendors rely on prices provided by external pricing services which are obtained from recognized exchanges or markets, or, for certain fixed income securities, from an evaluated bid or other similarly sourced price.

Either directly, or through our third-party vendors, we perform a variety of regular due diligence procedures on our pricing service providers. Those procedures include oversight by our internal operations group, review of the pricing service providers’ internal control frameworks, review of the pricing service providers’ valuation methodologies, reconciliation to client custodial account values and comparison of significant pricing differences.

In accordance with current accounting guidance, goodwill has an indefinite life and is tested for impairment annually, as of November 1, or more frequently if circumstances indicate impairment may have occurred. The Company performs a qualitative evaluation about whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount in lieu of actually calculating the fair value of the reporting unit. See Note 9 of Notes to Condensed Consolidated Financial Statements for additional information regarding goodwill.

The condensed consolidated financial statements include the accounts of Lazard Group and entities in which it has a controlling interest. Lazard determines whether it has a controlling interest in an entity by first evaluating whether the entity is a voting interest entity (“VOE”) or a variable interest entity (“VIE”) under U.S. GAAP.

Lazard’s involvement with various entities that are VOEs or VIEs primarily arises from LFI investments and investment management contracts with fund entities in our Asset Management business. Lazard is not required to consolidate such entities because, with the exception of certain seed and LFI investments, as discussed below, we do not hold more than an inconsequential equity interest in such entities and we do not hold other variable interests (including our investment management agreements, which do not meet the definition of variable interests) in such entities.

Lazard makes seed and LFI investments in certain entities that are considered VOEs and VIEs and often require consolidation as a result of our investment. The impact of seed and LFI investment entities that require consolidation on the condensed consolidated financial statements, including any consolidation or deconsolidation of such entities, is not material to our financial statements. Our exposure to loss from entities in which we have made such investments is limited to the extent of our investment in, or investment commitment to, such entities. See “Critical Accounting Policies and Estimates—Investments” above for more information regarding our investments.

Generally, when the Company initially invests to seed an investment entity, the Company is the majority owner of the entity. Our majority ownership in seed investment entities represents a controlling interest, except when we are the general partner in such entities and the third-party investors have the right to replace the general partner. To the extent material, we consolidate seed and LFI investment entities in which we own a controlling interest, and we would deconsolidate any such entity when we no longer have a controlling interest in such entity.

The Company has investments in a variety of asset classes, primarily debt and equity securities, and interests in alternative investments, debt, equity and private equity funds. The Company makes investments primarily to seed strategies in our Asset Management business or to reduce exposure arising from LFI and other similar deferred compensation arrangements. The Company measures its net economic exposure to market and other risks arising from investments that it owns, excluding (i) investments held in connection with LFI and other similar deferred compensation arrangements, (ii) investments in funds owned entirely by the noncontrolling interest holders of certain acquired entities and (iii) interest-bearing deposits with maturities over 90 days that allow daily withdrawals without principal penalties.

Risk sensitivities include the effects of economic hedging. For equity market price risk, investment portfolios and their corresponding hedges are beta-adjusted to the All-Country World equity index. Fair value and sensitivity measurements presented herein are based on various portfolio exposures at a particular point in time and may not be representative of future results. Risk exposures may change as a result of ongoing portfolio activities and changing market conditions, among other things.

Equity Market Price Risk—At March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, the Company’s exposure to equity market price risk in its investment portfolio, which primarily relates to investments in equity securities, equity funds and hedge funds, was approximately ~~$98~~$126 million and ~~$85~~$95 million, respectively. The Company hedges market exposure arising from a significant portion of our equity investment portfolios by entering into total return swaps. The Company estimates that a hypothetical 10% adverse change in market prices would result in a net decrease of approximately ~~$0.4~~$1.5 million and ~~$1.0~~$0.2 million in the carrying value of such investments as of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively, including the effect of the hedging transactions.

Interest Rate/Credit Spread Risk—At March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, the Company’s exposure to interest rate and credit spread risk in its investment portfolio related to investments in debt securities or funds which invest primarily in debt securities was ~~$47~~$145 million and ~~$153~~$139 million, respectively. The Company hedges market exposure arising from a portion of our debt investment portfolios by entering into total return swaps. The Company estimates that a hypothetical 100 basis point adverse change in interest rates or credit spreads would result in a decrease of approximately ~~$1.1~~$0.8 million and $1.0 million in the carrying value of such investments as of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively, including the effect of the hedging transactions.

Foreign Exchange Rate Risk—At March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, the Company’s exposure to foreign exchange rate risk in its investment portfolio, which primarily relates to investments in foreign currency denominated equity and debt securities, was ~~$43~~$72 million and ~~$37~~$48 million, respectively. A significant portion of the Company’s foreign currency exposure related to our equity and debt investment portfolios is hedged through the aforementioned total return swaps. The Company estimates that a 10% adverse change in foreign exchange rates versus the U.S. Dollar would result in a decrease of approximately ~~$0.2~~$1.5 million and ~~$0.2~~$0.4 million in the carrying value of such investments as of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively, including the effect of the hedging transactions.

Private Equity—The Company invests in private equity primarily as a part of its co-investment activities and in connection with certain legacy businesses. At both March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, the Company’s exposure to changes in fair value of such investments was approximately $21 ~~million and $24 million, respectively.~~million. The Company estimates that a hypothetical 10% adverse change in fair value would result in a decrease of approximately $2.1 million ~~and $2.4 million~~ in the carrying value of such investments as of both March 31, ~~2020~~2021 and December 31, ~~2019, respectively.~~2020.

We maintain an allowance for doubtful accounts to provide coverage for probable losses from our receivables. We determine the adequacy of the allowance by estimating the probability of loss based on our analysis of the client’s creditworthiness, among other things, and specifically provide for exposures where we determine the receivables are impaired. At March 31, ~~2020,~~2021, total receivables amounted to ~~$657~~$874 million, net of an allowance for doubtful accounts of ~~$31~~$35 million. As of that date, Financial Advisory and Asset Management fees, receivables from Lazard Ltd subsidiaries, and customers and other receivables comprised ~~73%~~64%, ~~10%,~~15% and ~~17%~~21% of total receivables, respectively. At December 31, ~~2019,~~2020, total receivables amounted to ~~$698~~$875 million, net of an allowance for doubtful accounts of ~~$27~~$37 million. As of that date, Financial Advisory and Asset Management fees, receivables from Lazard Ltd subsidiaries, and customers and other receivables comprised ~~77%~~71%, 5%15% and ~~18%~~14% of total receivables, respectively. See also “Critical Accounting Policies and Estimates—Revenue Recognition” above and Note 4 of Notes to Condensed Consolidated Financial Statements for additional information regarding receivables.

LFB engages in lending activities, including commitments to extend credit (primarily for clients of LFG). At March 31, ~~2020~~2021 and December 31, ~~2019, customer~~2020, customers and other receivables included ~~$75~~$111 million and ~~$76~~$100 million, respectively, of LFB loans, with such loans being fully collateralized and closely monitored for counterparty creditworthiness.

To reduce the exposure to concentrations of credit, the Company monitors large exposures to individual counterparties.

Lazard enters into forward foreign currency exchange contracts and interest rate swaps to hedge exposures to currency exchange rates and interest rates and uses total return swap contracts on various equity and debt indices to hedge a portion of its market exposure with respect to certain seed investments related to our Asset Management business. Derivative contracts are recorded at fair value. Derivative assets amounted to ~~$27 million and~~ $1 million at both March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively, and derivative liabilities, excluding the derivative liability arising from the Company’s obligation pertaining to LFI and other similar deferred compensation arrangements and the derivative liability for warrants issued in connection with the LGAC IPO, amounted to $3$1 million and ~~$10~~$3 million at such respective dates.

The Company records the warrants exercisable for LGAC Class A ordinary shares that were issued in connection with the LGAC IPO, which amounted to $12 million at March 31, 2021, as derivative liabilities at fair value with remeasurement gains and losses recorded in earnings.

The Company also records derivative liabilities relating to its obligations pertaining to LFI awards and other similar deferred compensation arrangements, the fair value of which is based on the value of the underlying investments, adjusted for estimated forfeitures. Changes in the fair value of the derivative liabilities are equally offset by the changes in the fair value of investments which are expected to be delivered upon settlement of LFI awards. Derivative liabilities relating to LFI amounted to ~~$272~~$383 million and ~~$226~~$311 million at March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively.

A significant portion of the Company’s indebtedness has fixed interest rates, while its cash and cash equivalents generally have market interest rates. Based on account balances as of March 31, ~~2020,~~2021, Lazard estimates that its annual operating income relating to cash and cash equivalents would increase by approximately $8$10 million in the event interest rates were to increase by 1% and decrease by approximately $8$10 million if rates were to decrease by 1%.

As of March 31, ~~2020,~~2021, the Company’s cash and cash equivalents totaled approximately ~~$781~~$967 million. Substantially all of the Company’s cash and cash equivalents were invested in (i) highly liquid institutional money market funds (a significant majority of which were invested solely in U.S. Government or agency money market funds), (ii) in short-term interest bearing and non-interest bearing accounts at a number of leading banks throughout the world, and (iii) in short-term certificates of deposit from such banks. Cash and cash equivalents are constantly monitored. On a regular basis, management reviews its investment profile as well as the credit profile of its list of depositor banks in order to adjust any deposit or investment thresholds as necessary.

Operational risk is inherent in all of our businesses and may, for example, manifest itself in the form of errors, breaches in the system of internal controls, employee misconduct, business interruptions, fraud, including fraud perpetrated by third parties, or legal actions due to operating deficiencies or noncompliance. The Company maintains a framework including policies and a system of internal controls designed to monitor and manage operational risk and provide management with timely and accurate information. Management within each of the operating companies is primarily responsible for its operational risk programs. The Company has in place business continuity and disaster recovery programs that manage its capabilities to provide services in the case of a disruption. We purchase insurance policies designed to help protect the Company against accidental loss and losses that may significantly affect our financial objectives, personnel, property or our ability to continue to meet our responsibilities to our various stakeholder groups.

For a discussion of recently issued accounting developments and their impact or potential impact on Lazard’s consolidated financial statements, see Note 2 of Notes to Condensed Consolidated Financial Statements.

Quantitative and qualitative disclosures about market risk are included under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Risk Management”.

Our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Exchange Act as of the end of the period covered by this quarterly report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this quarterly report, our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) are effective to ensure that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

In addition, no change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) occurred during our most recent fiscal quarter that has materially affected, or is likely to materially affect, our internal control over financial reporting.

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 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.

~~Except for the new risk factor below, there~~There were no material changes from the risk factors previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2019.~~

~~Our business, financial condition and results of operations could be materially adversely affected by the COVID-19 pandemic.~~

The recent outbreak of a novel strain of coronavirus (“COVID-19”) is now affecting the global community and our business, financial condition and results of operations. The nature and severity of the impact is highly uncertain, and the extent to which COVID-19 affects our operations and heightens the risks described in the section entitled “Risk Factors” in our Form 10-K will depend largely on future developments, including the course of the pandemic and the extent of actions that have been or may be taken to contain or address its impact. These actions, many of which have already been implemented in various jurisdictions worldwide, include, but are not limited to, declarations of states of emergency, business closures (including the complete or partial closure of many of our offices), restrictions on businesses’ ability to pay dividends or make distributions, restrictions on in-person meetings and travel, or other similar restrictions and limitations. While such actions may be relaxed or suspended if and when the COVID-19 pandemic abates, they may also be reinstated as the pandemic continues to evolve, and the relaxation or suspension of such actions may not be successful in restarting economic activity. The scope and timing of any such actions or reinstatements is difficult to predict.

Moreover, the COVID-19 pandemic has adversely affected the economies in impacted countries and regions, including those in which our businesses operate, and the global financial markets, including the global debt and equity capital markets, which are experiencing, and may continue to experience, significant volatility. The pandemic has led to an economic downturn, including a sharp drop in aggregate demand and, particularly in the U.S., a high level of unemployment, that could adversely affect our business, financial condition and results of operations and could have a negative impact on our Financial Advisory and Asset Management businesses. Disruptions to, and volatility in, the global financial markets as a result of the COVID-19 pandemic may result in a decrease in the volume and value of M&A transactions, thereby reducing the demand for our Financial Advisory services and increasing price competition among financial services companies seeking such engagements, which may adversely affect our financial condition and results of operations. Those same market disruptions may result in a decrease in our AUM resulting in lower investment advisory fees for our Asset Management business, may also affect our ability to effect transactions for our Asset Management clients and may negatively impact the liquidity of the assets held in our client portfolios. Furthermore, any such disruptions to the global financial markets may affect our ability to incur debt or issue equity on acceptable terms, or at all, to fund our working capital requirements or refinance existing indebtedness, or to make acquisitions and other investments. Additionally, we have exposure to many different industries and counterparties, and we routinely execute transactions with counterparties in the financial services industry, including brokers and dealers, commercial banks, investment banks, mutual and hedge funds and other institutional clients. Many of these transactions expose us to credit risk in the event our counterparty or client defaults~~, which defaults could become more frequent or widespread due to the impact of the COVID-19 pandemic~~.

Our efforts to mitigate the impact of the COVID-19 pandemic have required, and will continue to require, a significant investment of time and resources across our businesses. In response to recommendations or orders by governmental institutions limiting certain business or commercial activities in jurisdictions in which we operate around the world, we have taken, and may take further, preventative or protective actions, including instituting policies requiring employees who are capable of performing their functions remotely to do so. These arrangements may result in reduced productivity and limitations on the ability of our managing directors and employees to communicate or interact, which may adversely impact our business, financial condition and results of operations. Furthermore, given the unprecedented number of employees performing their functions remotely, we have reinforced policies, procedures and guidelines that we believe are reasonably designed to protect the confidentiality of our and our clients’2020.

confidential information, but there can be no assurance that these measures will be adequate. Any unauthorized disclosure of such information could result in legal action, regulatory sanctions and reputational or financial harm.

Similarly, due to the unprecedented number of employees continuously deploying the remote working capabilities of our information systems, including on home networks or through increased use of mobile technologies, we face a heightened risk of operational interruptions and security breaches involving such systems. Additionally, such home and mobile technology resources could be more susceptible to interruptions and security breaches than our dedicated business resources. There can be no assurance that protective measures and policies we have instituted in an effort to reduce the likelihood and severity of such interruptions and breaches, including as a result of cyber attacks, will be adequate. For additional information regarding operational risks with respect to our businesses, which may be exacerbated by COVID-19 and the associated actions taken to contain or address its impact, see the Risk Factors entitled “A failure in or breach of our information systems or infrastructure, or those of third parties with which we do business, including as a result of cyber attacks, could disrupt our businesses, lead to reputational harm and legal liability or otherwise impact our ability to operate our business” in our Form 10-K.

Certain of our third party vendors or service providers may take, have taken or may take further preventative or protective actions, including instituting policies requiring their respective employees who are capable of performing their functions remotely to do so and implementing or expanding back-up procedures and capabilities, and may be experiencing a growing demand for their services. ~~Any failure of or interruption to their systems or any back-up procedures and capabilities as a result of such actions or such growth in demand could materially adversely affect our~~ ~~business, financial condition and results of operations~~. ~~For additional information risks related to our reliance on vendor systems, see the Risk Factor entitled “Other operational risks may disrupt our businesses, result in regulatory action against us or limit our growth” in our Form 10-K.~~

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Delaware	51-0278097
(State or Other Jurisdiction of Incorporation	(I.R.S. Employer Identification No.)
or Organization)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
None	None	None

		Page
Part I. Financial Information

Item 1. Financial Statements (Unaudited)		1

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		3635

Item 3. Quantitative and Qualitative Disclosures About Market Risk		6160

Item 4. Controls and Procedures		61

Part II. Other Information

Item 1. Legal Proceedings		62

Item 1A. Risk Factors		62

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		6362

Item 3. Defaults Upon Senior Securities		6362

Item 4. Mine Safety Disclosures		6362

Item 5. Other Information		6362

Item 6. Exhibits		6463

Signatures		6665

		Page

Condensed Consolidated Statements of Financial Condition as of March 31, ~~2020~~2021 and December 31, ~~2019~~2020		2

Condensed Consolidated Statements of Operations for the three month periods ended March 31, 2021 and 2020 ~~and 2019~~		4

Condensed Consolidated Statements of Comprehensive Income for the three month periods ended March 31, ~~2020~~2021 and ~~2019~~2020		5

Condensed Consolidated Statements of Cash Flows for the three month periods ended March 31, ~~2020~~2021 and ~~2019~~2020		6

Condensed Consolidated Statements of Changes in Members’ Equity and Redeemable Noncontrolling Interests for the three month periods ended March 31, ~~2020~~2021 and ~~2019~~2020		7

Notes to Condensed Consolidated Financial Statements		9

	March 31, 2021						December 31, 2020
	Gross Cost		Accumulated Amortization		Net Carrying Amount		Gross Cost		Accumulated Amortization		Net Carrying Amount
Success/incentive fees	$	33,040	$	33,040	$	-	$	33,040	$	33,040	$	-
Management fees, customer relationships and non-compete agreements		34,671		34,476		195		34,671		34,461		210
	$	67,711	$	67,516	$	195	$	67,711	$	67,501	$	210


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☐
		Emerging growth company	☐

	Net Income (Loss) Attributable to Noncontrolling Interests
	Three Months Ended
	March 31,
	2021			2020
Edgewater	$	1,456		$	(1,403	)
Consolidated VIEs		2,268			(4,288	)
LGAC		(200	)		-
Other		3			-
Total	$	3,527		$	(5,691	)

	Restricted Shares			Weighted Average Grant Date Fair Value
Balance, January 1, 2020		1,039,306		$	41.79
Granted		670,672		$	42.89
Forfeited		(7,311	)	$	37.60
Settled		(322,053	)	$	45.78
Balance, March 31, 2020		1,380,614		$	41.41

	Accrued
	Compensation			Other
	and Benefits			Liabilities			Total
Balance, January 1, 2020	$	20,210		$	5,068		$	25,278
Less:
Payments		(12,020	)		(11	)		(12,031	)
Balance, March 31, 2020	$	8,190		$	5,057		$	13,247

3.1		Certificate of Formation of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant’s Registration Statement (File No. 333-126751) on Form S-4 filed on July 21, 2005).

3.2		Certificate of Amendment of Certificate of Formation of the Registrant, changing name to Lazard Group LLC (incorporated by reference to Exhibit 3.2 to the Registrant’s Registration Statement (File No. 333-126751) on Form S-4 filed on July 21, 2005).

3.3		Amended and Restated Operating Agreement of the Registrant, dated as of February 4, 2019 (incorporated by reference to Exhibit 99.1 to the Registrant’s Current Report (File No. 333-126751) on Form 8-K filed on February 5, 2019).

4.1		Indenture, dated as of May 10, 2005, by and between the Registrant and The Bank of New York, as Trustee (incorporated by reference to Exhibit 4.1 to the Registrant’s Registration Statement (File No. 333-126751) on Form S-4 filed on July 21, 2005).

4.2		Sixth Supplemental Indenture, dated as of February 13, 2015, between the Registrant and The Bank of New York Mellon, as trustee (incorporated by reference to Exhibit 4.1 of the Registrant’s Current Report on Form 8-K (File No. 333-126751) filed on February 13, 2015).

4.3		Seventh Supplemental Indenture, dated as of November 4, 2016, between Lazard Group LLC and the Bank of New York Mellon, as trustee (incorporated by reference to Exhibit 4.1 of the Registrant’s Current Report on Form 8-K (File No. 333-126751) filed on November 7, 2016).

4.4		Eighth Supplemental Indenture, dated as of September 19, 2018, between Lazard Group LLC and the Bank of New York Mellon, as trustee (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K (File No. 333-126751) filed on September 19, 2018).

4.5		Ninth Supplemental Indenture, dated as of March 11, 2019, between Lazard Group LLC and The Bank of New York Mellon, as trustee (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K (File No. 333-126751) filed on March 11, 2019).

4.6		Form of Senior Note (included in Exhibits 4.2, 4.3, 4.4 and 4.5).

10.1		Lease, dated as of January 27, 1994, by and between Rockefeller Center Properties and Lazard Frères & Co. LLC (incorporated by reference to Exhibit 10.19 to Lazard Ltd’s Registration Statement (File No. 333-121407) on Form S-1/A filed on February 11, 2005).

10.2		Fourth Amendment dated as of February 16, 2011, by and among RCPI Landmark Properties, L.L.C. (as the successor in interest to Rockefeller Center Properties), RCPI 30 Rock 22234849, L.L.C. and Lazard Group LLC (as the successor in interest to Lazard Frères & Co. LLC), to the Lease dated as of January 27, 1994, by and among Rockefeller Center Properties and Lazard Frères & Co. LLC (incorporated by reference to Exhibit 10.15 to the Registrant’s Quarterly Report (File No. 333-126751) on Form 10-Q filed on April 29, 2011).

10.3*		Lazard Ltd’s 2005 Equity Incentive Plan (incorporated by reference to Exhibit 10.21 to Lazard Ltd’s Registration Statement (File No. 333-121407) on Form S-1/A filed on May 2, 2005).

10.4*		Lazard Ltd’s 2008 Incentive Compensation Plan (incorporated by reference to Annex B to Lazard Ltd’s Definitive Proxy Statement on Schedule 14A (File No. 001-32492) filed on March 24, 2008).

10.5*		Lazard ~~Ltd’s 2016 French Sub-plan (incorporated by reference to Annex B to Lazard Ltd’s Definitive Proxy Statement on Schedule 14A (File No. 001-32492) filed on March 10, 2016).~~

10.6*		~~Lazard~~ Ltd 2018 Incentive Compensation Plan (incorporated by reference to Annex B to Lazard Ltd’s Definitive Proxy Statement on Schedule 14A (File No. 001-32492) filed on March 15, 2018).

10.710.6		Amended and Restated Agreement relating to Retention and Noncompetition and Other Covenants, dated as of March 29, 2019, by and among the Registrant, Lazard Ltd and Kenneth M. Jacobs (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 333-126751) filed on April 3, 2019).

10.810.7		Amended and Restated Agreement relating to Retention and Noncompetition and Other Covenants, dated as of March 29, 2019, by and among the Registrant, Lazard Ltd and Ashish Bhutani (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K (File No. 333-126751) filed on April 3, 2019).

10.910.8		Amended and Restated Agreement relating to Retention and Noncompetition and Other Covenants, dated as of March 29, 2019, by and among the Registrant, Lazard Ltd and Scott D. Hoffman (incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K (File No. 333-126751) filed on April 3, 2019).

10.1010.09		Amended and Restated Agreement relating to Retention and Noncompetition and Other Covenants, dated as of March 29, 2019, by and among the Registrant, Lazard Ltd and Evan L. Russo (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K (File No. 333-126751) filed April 3, 2019).

10.1110.10		Amended and Restated Agreement relating to Retention and Noncompetition and Other Covenants, dated as of March 29, 2019, by and among the Registrant, Lazard Ltd and Alexander F. Stern (incorporated by reference to Exhibit 10.5 to the Registrant’s Current Report on Form 8-K (File No. 333-126751) filed on April 3, 2019).

10.11*		Agreement relating to Retention and Noncompetition and Other Covenants, dated as of February 25, 2021, by and among the Registrant, Lazard Ltd and Peter Orszag.

10.12*		Form of Award Letter for Annual Grant of Deferred Stock Units to Non-Executive Directors (incorporated by reference to Exhibit 99.1 to Lazard Ltd’s Current Report on Form 8-K (File No. 001-32492) filed on September 8, 2005).

10.13*		Form of Agreement evidencing a grant of Restricted Stock Units to Executive Officers under the 2008 Incentive Compensation Plan (incorporated by reference to Exhibit 10.41 to Lazard Ltd’s Annual Report (File No. 001-32492) on Form 10-K filed on March 2, 2009).

10.14*		Form of Agreement evidencing a grant of Deferred Cash Award to Executive Officers (incorporated by reference to Exhibit 10.42 to Lazard Ltd’s Annual Report (File No. 001-32492) on Form 10-K filed on March 2, 2009).

10.1510.13		Directors’ Fee Deferral Unit Plan (incorporated by reference to Exhibit 10.39 to Lazard Ltd’s Quarterly Report (File No.001-32492) on Form 10-Q filed on May 11, 2006).

~~10.16~~10.14		Amended and Restated Credit Agreement, dated as of ~~September 25, 2015,~~July 22, 2020, among the Registrant, the Banks from time to time parties thereto, and Citibank, N.A., as Administrative Agent (incorporated by reference to Exhibit ~~10.25~~10.16 to the Registrant’s Quarterly Report (File No. 333-126751) on Form 10-Q filed on ~~October 28, 2015)~~August 4, 2020).

10.17*		Form of Agreement evidencing a grant of Lazard Fund Interests to Named Executive Officers (incorporated by reference to Exhibit 10.54 to the Registrant’s Quarterly Report (File No. 333-126751) on Form 10-Q filed on May 1, 2013).

10.18*		Form of Agreement evidencing a February 20, 2014 grant of Performance-Based Stock Units under the 2008 Incentive Compensation Plan (incorporated by reference to Exhibit 10.54 to the Registrant’s Quarterly Report (File No. 333-126751) on Form 10-Q filed on May 6, 2014).

10.19*		Agreement between Lazard Ltd and Kenneth M. Jacobs, dated as of February 20, 2014, evidencing a grant of Performance-Based Stock Units under the 2008 Incentive Compensation Plan (incorporated by reference to Exhibit 10.55 to the Registrant’s Quarterly Report (File No. 333-126751) on Form 10-Q filed on May 6, 2014).

10.20*		Form of Agreement evidencing a grant of Restricted Stock under the 2008 Incentive Compensation Plan (incorporated by reference to Exhibit 10.54 to the Registrant’s Quarterly Report (File No. 333-126751) on Form 10-Q filed on April 30, 2010).

10.21*		Form of Agreement evidencing a grant of Lazard Fund Interests (incorporated by reference to Exhibit 10.54 to the Registrant’s Quarterly Report (File No. 333-126751) on Form 10-Q filed on April 29, 2011).

10.2210.15		Form of Agreement for Performance-Based Profits Interest Participation Right Units under the 2018 Incentive Compensation Plan (incorporated by reference to Exhibit 10.22 to the Registrant’s Quarterly Report (File No 333-126751) on Form 10-Q filed on April 30, 2019).

10.16*		First Amendment to the Lazard Ltd 2018 Incentive Compensation Plan (incorporated by reference to Annex B to Lazard Ltd’s Definitive Proxy Statement on Schedule 14A (File No. 001-32492) filed on March 16, 2021).

10.17*		Form of Agreement evidencing grant of Performance-Based Restricted Participation Units under the 2018 Incentive Compensation Plan.

10.18*		Form of Agreement evidencing grant of Lazard Fund Interests to Named Executive Officers under the 2018 Incentive Compensation Plan.

10.19*		Form of Agreement for Profits Interest Participation Right Units under the 2018 Compensation Plan.

31.1		Rule 13a-14(a) Certification of Kenneth M. Jacobs.

31.2		Rule 13a-14(a) Certification of Evan L. Russo.

32.1		Section 1350 Certification for Kenneth M. Jacobs.

32.2		Section 1350 Certification for Evan L. Russo.


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	LAZARD GROUP LLC

	By:		/s/ Evan L. Russo
	Name:		Evan L. Russo
	Title:		Chief Financial Officer

	By:		/s/ Dominick Ragone
	Name:		Dominick Ragone
	Title:		Chief Accounting Officer