12.	COMMITMENTS AND CONTINGENCIES

Leases—The Company leases office space and equipment under non-cancelable lease agreements, which expire on various dates through 2033.

Operating lease agreements, in addition to base rentals, generally are subject to escalation provisions based on certain costs incurred by the landlord. For the years ended December 31, 2016, 2015 and 2014, aggregate rental expense relating to operating leases amounted to $76,704, $79,549 and $80,773, respectively, and is included in “occupancy and equipment” or “technology and information services” on the consolidated statements of operations, depending on the nature of the underlying asset. The Company also subleases office space under agreements which expire on various dates through 2022. Sublease income from such agreements was $7,858, $9,587 and $11,751 for the years ended December 31, 2016, 2015 and 2014, respectively, which includes sublease income of $1,281 and $3,097, respectively, from an affiliate of LMDC Holdings LLC (“LMDC Holdings”) for the years ended December 2015 and 2014.

Capital lease obligations recorded under sale/leaseback transactions are payable through 2017 at a weighted average interest rate of approximately 6.1%. Such obligations are collateralized primarily by certain buildings with a net book value of approximately $13,538 and $15,121 at December 31, 2016 and 2015, respectively. The net book value of all assets recorded under capital leases aggregated $13,628 and $15,273 at December 31, 2016 and 2015, respectively.

At December 31, 2016, minimum rental commitments under non-cancelable leases, net of sublease income, are approximately as follows:

	Minimum Rental Commitments
Year Ending December 31,	Capital		Operating
2017	$	7,282	$	75,996
2018		38		73,224
2019		32		65,368
2020		5		62,516
2021		-		61,479
Thereafter		-		489,575
Total minimum lease payments		7,357		828,158
Less amount representing interest		152
Present value of capital lease commitments	$	7,205
Less sublease proceeds				45,643
Net lease payments			$	782,515

With respect to abandoned leased facilities in the U.K., at December 31, 2016 and 2015, the Company has recognized liabilities of $2,819 and $6,155, respectively, which are included in “other liabilities” on the consolidated statements of financial condition. Payments toward the liabilities continue through the remaining term of the leases. Such liabilities are based on the discounted future commitment, net of expected sublease income.

Guarantees—In the normal course of business, LFB provides indemnifications to third parties to protect them in the event of non-performance by its clients. At December 31, 2016, LFB had $3,340 of such indemnifications and held $3,259 of collateral/counter-guarantees to secure these commitments. The Company believes the likelihood of loss with respect to these indemnities is remote. Accordingly, no liability is recorded in the consolidated statement of financial condition.

Certain Business Transactions—On July 15, 2009, the Company established a private equity business with Edgewater. Edgewater manages funds primarily focused on buy-out and growth equity investments in middle market companies. The acquisition was structured as a purchase by Lazard Group of interests in a holding company that in turn owns interests in the general partner and management company entities of the current Edgewater private equity funds (the “Edgewater Acquisition”). Following the Edgewater Acquisition, Edgewater’s leadership team retained a substantial economic interest in such entities.

The aggregate fair value of the consideration recognized by the Company at the acquisition date was $61,624. Such consideration consisted of (i) a one-time cash payment, (ii) 1,142,857 shares of Class A common stock (the “Initial Shares”) and (iii) up to 1,142,857 additional shares of Class A common stock (the “Earnout Shares”) that were subject to earnout criteria and payable over time. As of December 31, 2016 and 2015, 2,285,714 and 1,371,992 shares, respectively, have been earned and settled because applicable performance thresholds have been satisfied. As of December 31, 2016, the delivery of 913,722 shares of Class A common stock resulted in a non-cash tax benefit of approximately $12,000 recorded in deferred tax assets.

Other Business Acquisitions—For businesses acquired in 2016, consideration consisted of (i) one-time cash payments, 60,817 shares of Class A common stock subject to non-compete provisions and non-contingent interests exchangeable into 206,612 shares of Class A common stock, and (ii) up to 816,492 additional shares of Class A common stock that are subject to certain performance thresholds. As of December 31, 2016, none of the contingent shares had been earned.

For a business acquired in 2012, at December 31, 2012, 170,988 shares of Class A common stock (including dividend equivalent shares) were issuable on a non-contingent basis. Such shares were delivered in the first quarter of 2013. During the second quarter of 2015, the achievement of certain performance thresholds related to the acquired business were satisfied, resulting in the issuance of 27,316 shares of Class A common stock.

Other Commitments—The Company has various other contractual commitments arising in the ordinary course of business. In addition, from time to time, each of LFB and LFNY may enter into underwriting commitments in which it will participate as an underwriter. At December 31, 2016, LFB and LFNY had no such underwriting commitments.

See Notes 6 and 15 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 consolidated financial position or results of operations.

Legal—The Company is involved from time to time in judicial, 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.