10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2018

OR

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

For the transition period from to

001-32492

(Commission File Number)

LAZARD LTD

(Exact name of registrant as specified in its charter)

Bermuda	98-0437848
(State or Other Jurisdiction of Incorporation	(I.R.S. Employer Identification No.)
or Organization)

Clarendon House

2 Church Street

Hamilton HM11, Bermuda

(Address of principal executive offices)

Registrant’s telephone number: (441) 295-1422

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. (Check one):

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

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

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

As of October 19, 2018, there were 129,766,091 shares of the Registrant’s Class A common stock outstanding (including 11,694,113 shares held by subsidiaries).

TABLE OF CONTENTS

When we use the terms “Lazard”, “we”, “us”, “our” and “the Company”, we mean Lazard Ltd, a company incorporated under the laws of Bermuda, and its subsidiaries, including Lazard Group LLC, a Delaware limited liability company (“Lazard Group”), that is the current holding company for our businesses. Lazard Ltd’s primary operating asset is its indirect ownership as of September 30, 2018 of all of the common membership interests in Lazard Group and its controlling interest in Lazard Group.

	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	40
Item 3. Quantitative and Qualitative Disclosures About Market Risk	69
Item 4. Controls and Procedures	69
Part II. Other Information
Item 1. Legal Proceedings	70
Item 1A. Risk Factors	70
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	70
Item 3. Defaults Upon Senior Securities	71
Item 4. Mine Safety Disclosures	71
Item 5. Other Information	71
Item 6. Exhibits	72
Signatures	75

i

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

	Page
Condensed Consolidated Statements of Financial Condition as of September 30, 2018 and December 31, 2017	2
Condensed Consolidated Statements of Operations for the three month and nine month periods ended September 30, 2018 and 2017	4
Condensed Consolidated Statements of Comprehensive Income for the three month and nine month periods ended September 30, 2018 and 2017	5
Condensed Consolidated Statements of Cash Flows for the nine month periods ended September 30, 2018 and 2017	6
Condensed Consolidated Statements of Changes in Stockholders’ Equity for the nine month periods ended September 30, 2018 and 2017	7
Notes to Condensed Consolidated Financial Statements	9

1

LAZARD LTD

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

SEPTEMBER 30, 2018 AND DECEMBER 31, 2017

(UNAUDITED)

(dollars in thousands, except for per share data)

	September 30,		December 31,
	2018		2017
ASSETS
Cash and cash equivalents	$	1,132,395	$	1,483,836
Deposits with banks and short-term investments		1,015,872		935,431
Cash deposited with clearing organizations and other segregated cash		37,985		35,539
Receivables (net of allowance for doubtful accounts of $34,524 and $23,746    at September 30, 2018 and December 31, 2017, respectively):
Fees		546,808		487,800
Customers and other		93,979		83,816
		640,787		571,616
Investments		609,595		427,186
Property (net of accumulated amortization and depreciation of $331,937 and $317,827    at September 30, 2018 and December 31, 2017, respectively)		214,279		205,301
Goodwill and other intangible assets (net of accumulated amortization of $65,576 and    $63,099 at September 30, 2018 and December 31, 2017, respectively)		379,241		391,364
Deferred tax assets		610,389		650,260
Other assets		304,235		228,144
Total Assets	$	4,944,778	$	4,928,677

See notes to condensed consolidated financial statements.

2

LAZARD LTD

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

SEPTEMBER 30, 2018 AND DECEMBER 31, 2017

(UNAUDITED)

(dollars in thousands, except for per share data)

	September 30,			December 31,
	2018			2017
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Deposits and other customer payables	$	1,056,342		$	992,338
Accrued compensation and benefits		489,090			593,781
Senior debt		1,433,702			1,190,383
Tax receivable agreement obligation		277,163			310,275
Deferred tax liabilities		6,481			9,407
Other liabilities		560,415			573,588
Total Liabilities		3,823,193			3,669,772
Commitments and contingencies
STOCKHOLDERS’ EQUITY
Preferred stock, par value $.01 per share; 15,000,000 shares authorized:
Series A - no shares issued and outstanding		-			-
Series B - no shares issued and outstanding		-			-
Common stock:
Class A, par value $.01 per share (500,000,000 shares authorized;    129,766,091 shares issued at September 30, 2018 and December 31, 2017,    including shares held by subsidiaries as indicated below)		1,298			1,298
Additional paid-in-capital		701,849			788,140
Retained earnings		1,140,610			1,080,413
Accumulated other comprehensive loss, net of tax		(260,365	)		(232,518	)
		1,583,392			1,637,333
Class A common stock held by subsidiaries, at cost (11,293,254 and 10,747,142    shares at September 30, 2018 and December 31, 2017, respectively)		(516,267	)		(437,530	)
Total Lazard Ltd Stockholders’ Equity		1,067,125			1,199,803
Noncontrolling interests		54,460			59,102
Total Stockholders’ Equity		1,121,585			1,258,905
Total Liabilities and Stockholders’ Equity	$	4,944,778		$	4,928,677

See notes to condensed consolidated financial statements.

3

LAZARD LTD

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTH AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2018 AND 2017

(UNAUDITED)

(dollars in thousands, except for per share data)

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2018			2017		2018			2017
REVENUE
Investment banking and other advisory fees	$	309,690		$	305,530	$	1,139,860		$	1,050,721
Asset management fees		312,790			301,719		986,777			868,522
Interest income		3,029			1,630		7,877			4,893
Other		15,291			29,252		46,019			81,361
Total revenue		640,800			638,131		2,180,533			2,005,497
Interest expense		14,319			13,272		41,416			39,994
Net revenue		626,481			624,859		2,139,117			1,965,503
OPERATING EXPENSES
Compensation and benefits		343,987			361,787		1,165,193			1,138,200
Occupancy and equipment		28,848			29,156		88,326			87,468
Marketing and business development		21,868			19,798		75,755			63,577
Technology and information services		36,394			31,373		102,173			87,429
Professional services		13,353			11,005		42,498			33,701
Fund administration and outsourced services		34,748			18,325		103,159			52,576
Amortization and other acquisition-related (benefits) costs		(5,851	)		172		(13,468	)		5,003
Other		14,453			9,031		51,032			30,639
Total operating expenses		487,800			480,647		1,614,668			1,498,593
OPERATING INCOME		138,681			144,212		524,449			466,910
Provision for income taxes		29,956			32,742		105,684			124,109
NET INCOME		108,725			111,470		418,765			342,801
LESS - NET INCOME ATTRIBUTABLE TO    NONCONTROLLING INTERESTS		1,651			2,260		5,036			5,660
NET INCOME ATTRIBUTABLE TO LAZARD LTD	$	107,074		$	109,210	$	413,729		$	337,141
ATTRIBUTABLE TO LAZARD LTD CLASS A       COMMON STOCKHOLDERS:
WEIGHTED AVERAGE SHARES OF COMMON STOCK      OUTSTANDING:
Basic		119,456,516			121,243,598		119,897,626			122,142,303
Diluted		129,859,728			132,393,664		130,750,392			132,407,551
NET INCOME PER SHARE OF COMMON STOCK:
Basic	$	0.90		$	0.90	$	3.45		$	2.76
Diluted	$	0.82		$	0.82	$	3.16		$	2.55
DIVIDENDS DECLARED PER SHARE OF      COMMON STOCK	$	0.44		$	0.41	$	2.59		$	2.40

See notes to condensed consolidated financial statements.

4

LAZARD LTD

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE MONTH AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2018 AND 2017

(UNAUDITED)

(dollars in thousands)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
NET INCOME	$	108,725		$	111,470		$	418,765		$	342,801
OTHER COMPREHENSIVE INCOME (LOSS), NET OF    TAX:
Currency translation adjustments		(8,676	)		19,748			(34,783	)		62,847
Employee benefit plans:
Actuarial gain (loss) (net of tax expense (benefit) of $214    and $(1,197) for the three months ended    September 30, 2018  and 2017, respectively, and $618    and $(3,673) for the nine months ended September 30, 2018    and 2017, respectively)		863			(4,715	)		4,149			(13,819	)
Adjustment for items reclassified to earnings (net of    tax expense of $264 and $204 for the three months    ended September 30, 2018 and 2017, respectively,    and $948 and $676 for the nine months ended    September 30, 2018 and 2017, respectively)		949			1,081			2,788			3,523
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX		(6,864	)		16,114			(27,846	)		52,551
COMPREHENSIVE INCOME		101,861			127,584			390,919			395,352
LESS - COMPREHENSIVE INCOME ATTRIBUTABLE TO    NONCONTROLLING INTERESTS		1,653			2,262			5,037			5,662
COMPREHENSIVE INCOME ATTRIBUTABLE TO    LAZARD LTD	$	100,208		$	125,322		$	385,882		$	389,690

See notes to condensed consolidated financial statements.

5

LAZARD LTD

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2018 AND 2017

(UNAUDITED)

(dollars in thousands)

	Nine Months Ended
	September 30,
	2018			2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	418,765		$	342,801
Adjustments to reconcile net income to net cash provided by (used in)    operating activities:
Depreciation and amortization of property		25,303			23,209
Amortization of deferred expenses and share-based incentive compensation		294,380			285,162
Amortization and other acquisition-related (benefits) costs		(13,468	)		5,003
Deferred tax provision		27,287			50,699
Loss on extinguishment of debt		6,523			-
(Increase) decrease in operating assets:
Receivables-net		(82,161	)		112,499
Investments		(184,542	)		27,927
Other assets		(144,592	)		(71,053	)
Increase (decrease) in operating liabilities:
Accrued compensation and benefits and other liabilities		(56,035	)		(70,819	)
Net cash provided by operating activities		291,460			705,428
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property		(39,343	)		(15,463	)
Disposals of property		1,365			283
Net cash used in investing activities		(37,978	)		(15,180	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from:
Customer deposits		79,960			149,506
Contributions from noncontrolling interests		553			-
Issuance of senior debt, net of expenses		490,970			-
Payments for:
Senior debt		(255,543	)		-
Capital lease obligations		(57	)		(7,329	)
Distributions to noncontrolling interests		(10,232	)		(3,059	)
Payments under tax receivable agreement		(31,897	)		(789	)
Purchase of Class A common stock		(306,591	)		(252,538	)
Class A common stock dividends		(307,850	)		(292,293	)
Settlement of vested share-based incentive compensation		(109,485	)		(67,384	)
Other financing activities		(5,509	)		(10,073	)
Net cash used in financing activities		(455,681	)		(483,959	)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS AND    RESTRICTED CASH		(66,355	)		128,091
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS AND    RESTRICTED CASH		(268,554	)		334,380
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH—January 1		2,454,806			1,607,483
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH—September 30	$	2,186,252		$	1,941,863
RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH    WITHIN THE CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL    CONDITION:
	September 30,			December 31,
	2018			2017
Cash and cash equivalents	$	1,132,395		$	1,483,836
Deposits with banks and short-term investments		1,015,872			935,431
Cash deposited with clearing organizations and other segregated cash		37,985			35,539
TOTAL CASH AND CASH EQUIVALENTS AND RESTRICTED CASH	$	2,186,252		$	2,454,806

See notes to condensed consolidated financial statements.

6

LAZARD LTD

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 2017

(UNAUDITED)

(dollars in thousands)

					Additional						Accumulated Other Comprehensive			Class A Common Stock						Total Lazard Ltd						Total
	Common Stock				Paid-In-			Retained			Income (Loss),			Held By Subsidiaries						Stockholders’			Noncontrolling			Stockholders’
	Shares		$		Capital			Earnings			Net of Tax			Shares			$			Equity			Interests			Equity
Balance - January 1, 2017		129,766,091	$	1,298	$	688,231		$	1,134,186		$	(314,222	)		7,628,786		$	(273,506	)	$	1,235,987		$	57,826		$	1,293,813
Adjustment for the cumulative effect on prior    years from the adoption of new accounting    guidance related to share-based incentive    compensation									81,544												81,544						81,544
Balance, as adjusted - January 1, 2017		129,766,091		1,298		688,231			1,215,730			(314,222	)		7,628,786			(273,506	)		1,317,531			57,826			1,375,357
Comprehensive income:
Net income									337,141												337,141			5,660			342,801
Other comprehensive income - net    of tax												52,549									52,549		2				52,551
Amortization of share-based incentive    compensation						220,648															220,648						220,648
Dividend equivalents						36,482			(41,479	)											(4,997	)					(4,997	)
Class A common stock dividends									(292,293	)											(292,293	)					(292,293	)
Purchase of Class A common stock															5,838,520			(252,538	)		(252,538	)					(252,538	)
Delivery of Class A common stock in    connection with share-based incentive    compensation and related tax expense    of $4,819						(212,271	)								(3,772,169	)		140,068			(72,203	)					(72,203	)
Business acquisitions and related equity    transactions:
Delivery of Class A common stock    and related tax benefit of $832						(472	)								(47,474	)		1,909			1,437						1,437
Class A common stock issuable    (including related amortization)						363															363						363
Distributions to noncontrolling interests, net																					-			(3,059	)		(3,059	)
Other								204													204			204			408
Balance - September 30, 2017		129,766,091	$	1,298	$	732,981		$	1,219,303		$	(261,673	)		9,647,663		$	(384,067	)	$	1,307,842		$	60,633		$	1,368,475

See notes to condensed consolidated financial statements.

7

LAZARD LTD

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 2018

(UNAUDITED)

(dollars in thousands)

					Additional						Accumulated Other Comprehensive			Class A Common Stock						Total Lazard Ltd						Total
	Common Stock				Paid-In-			Retained			Income (Loss),			Held By Subsidiaries						Stockholders’			Noncontrolling			Stockholders’
	Shares		$		Capital			Earnings			Net of Tax			Shares			$			Equity			Interests			Equity
Balance - January 1, 2018		129,766,091	$	1,298	$	788,140		$	1,080,413		$	(232,518	)		10,747,142		$	(437,530	)	$	1,199,803		$	59,102		$	1,258,905
Comprehensive income (loss):
Net income									413,729												413,729			5,036			418,765
Other comprehensive loss - net of tax												(27,847	)								(27,847	)		1			(27,846	)
Amortization of share-based incentive    compensation						218,186															218,186						218,186
Dividend equivalents						38,923			(44,432	)											(5,509	)					(5,509	)
Class A common stock dividends									(307,850	)											(307,850	)					(307,850	)
Purchase of Class A common stock															5,797,789			(306,591	)		(306,591	)					(306,591	)
Delivery of Class A common stock in    connection with share-based incentive    compensation and related tax expense    of $7,745						(345,023	)								(5,249,819	)		227,793			(117,230	)					(117,230	)
Business acquisitions and related equity    transactions:
Delivery of Class A common stock						(61	)								(1,858	)		61			-						-
Class A common stock issuable    (including related amortization)						434															434						434
Dividend equivalents						1,250			(1,250	)											-						-
Distributions to noncontrolling interests, net																					-			(9,679	)		(9,679	)
Balance - September 30, 2018		129,766,091	$	1,298	$	701,849		$	1,140,610		$	(260,365	)		11,293,254		$	(516,267	)	$	1,067,125		$	54,460		$	1,121,585

See notes to condensed consolidated financial statements.

8

LAZARD LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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

1. ORGANIZATION AND BASIS OF PRESENTATION

Organization

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

Lazard Ltd indirectly held 100% of all outstanding Lazard Group common membership interests as of September 30, 2018 and December 31, 2017. Lazard Ltd, through its control of the managing members of Lazard Group, controls Lazard Group, which is governed by an Amended and Restated Operating Agreement dated as of October 26, 2015, as amended (the “Operating Agreement”).

Lazard Ltd’s primary operating asset is its indirect ownership of the common membership interests of, and managing member interests in, Lazard Group, whose principal operating activities are included in two business segments:

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

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

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

Basis of Presentation

The accompanying condensed consolidated financial statements of Lazard Ltd have been prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States of America (“U.S. GAAP”) for complete financial statements and should be read in conjunction with the audited consolidated financial statements and notes thereto included in Lazard Ltd’s Annual Report on Form 10-K for the year ended December 31, 2017. The accompanying December 31, 2017 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 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 and nine month periods ended September 30, 2018 are not indicative of the results to be expected for any future interim or annual period.

The condensed consolidated financial statements include Lazard Ltd, 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

9

LAZARD LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(UNAUDITED)

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

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

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

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

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

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

Certain prior period amounts have been reclassified to conform to the current period presentation, specifically related to the adoption of new guidance impacting the condensed consolidated statements of cash flows (see Note 2).

2. RECENT ACCOUNTING DEVELOPMENTS

Revenue from Contracts with Customers—In May 2014, the FASB issued comprehensive new revenue recognition guidance. The guidance requires a company to recognize revenue when it transfers promised services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those services and requires enhanced disclosures. The guidance also changes the accounting for certain contract costs, including whether they may be offset against revenue in the condensed consolidated statements of operations. On July 9, 2015, the FASB approved the deferral of the effective date of the new revenue guidance by one year to annual reporting periods beginning after December 15, 2017. The guidance may be adopted using a full retrospective approach or a modified cumulative effect approach. The Company adopted the revenue recognition guidance upon its effective date of January 1, 2018 using the modified cumulative effect approach. The Company applied the new guidance to contracts that have not yet been completed as of the adoption date. The Company’s adoption efforts included the identification of revenue within the scope of the guidance and the evaluation of revenue contracts. 

The Company evaluated the potential impact of the new guidance, including (i) the timing of revenue recognition for Financial Advisory and Asset Management fees and (ii) the presentation of certain contract costs. With respect to revenue recognition, the Company assessed the impact of the new guidance on the recognition of fees for Financial Advisory (e.g., transaction completion, transaction announcement and retainers), and Asset Management (e.g., management and incentive fees), including the potential requirement under the new guidance to recognize certain transaction completion fees in periods prior to the periods in which the applicable transactions close. The Company’s assessment included an analysis of whether the Company’s fulfillment of its performance obligations would be deemed to occur over time, or at specific points in time, under the new guidance. Specifically, recognition would be deemed to occur over time if the client receives and consumes benefits from the services as the Company performs the services. The Company concluded that Financial Advisory and Asset Management fees would typically be recognized over time as performance occurs, subject to constraints, using an appropriate measure of progress based on resources consumed, which is consistent with when the client receives benefits. There was no material impact to the Company’s recognition of revenue upon adoption of the new guidance.

The new guidance requires the Company to prospectively present certain contract costs on a gross basis. The most significant changes with respect to presentation relate to (a) certain distribution costs within our Asset Management business and (b) certain reimbursable deal costs within our Financial Advisory business, both of which were previously presented net against revenues and are now presented as expenses on a gross basis under the new guidance because the Company is primarily responsible for fulfilling the promise of the arrangement.  For the three month and nine month periods ended September 30, 2018, the presentation of such costs on a gross basis resulted in an increase to net revenue of $24,392 and $72,006, respectively, primarily comprised of increases to asset management fees and investment banking and other advisory fees. In addition, there was a corresponding increase to operating expenses of $24,392 and $72,006, respectively, primarily comprised of an increase to distribution costs presented within fund administration and outsourced services and an increase to reimbursable deal costs presented within marketing and business

10

LAZARD LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(UNAUDITED)

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

development. These amounts would have been presented on a net basis prior to the adoption of the new guidance, and there was no material impact to net income as a result of the gross basis of presentation under the new guidance.

See Note 3 for further information on contracts within the scope of the new guidance.

Classification of Certain Cash Receipts and Cash Payments—In August and November 2016, the FASB issued updated guidance which clarifies how a company should classify certain cash receipts and cash payments on the statement of cash flows and clarifies that restricted cash should be included in the total of cash and cash equivalents on the statement of cash flows. The new guidance for both updates is effective for annual and interim periods beginning after December 15, 2017 and is to be applied on a retrospective basis. The Company adopted this new guidance on January 1, 2018. The adoption of the new guidance in the first quarter of 2018 resulted in the reclassification of “cash deposited with clearing organizations and other segregated cash” and “deposits with banks and short-term investments” from operating activities to components of “cash and cash equivalents and restricted cash” on the condensed consolidated statement of cash flows. In addition, the Company reclassified cash flows related to customer deposits from operating activities to financing activities. This resulted in changes in deposits with banks and short-term investments and customer deposits no longer being reflected in cash flows from operating activities. Except for the reclassification of these items on the condensed consolidated statement of cash flows, the new guidance had no impact on the Company’s financial statements.

Clarifying the Definition of a Business—In January 2017, the FASB issued updated guidance to clarify the definition of a business within the context of business combinations. The updated guidance requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, such asset or group of assets is not a business. This updated guidance is expected to reduce the number of transactions that need to be further evaluated as business combinations. If further evaluation is necessary, the updated guidance will require that a business set include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output. The updated guidance will remove the evaluation of whether a market participant could replace missing elements. The new guidance is effective for annual and interim periods beginning after December 15, 2017 and is to be applied on a prospective basis. The Company adopted the new guidance on January 1, 2018 and it will be applied to business combinations on a prospective basis.

Compensation—Retirement Benefits—Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost—In March 2016, the FASB issued updated guidance on the presentation of net benefit cost in the statement of operations and the components eligible for capitalization. The new guidance requires that only the service cost component of net periodic pension cost and net periodic postretirement benefit cost be presented with other employee compensation costs in operating expenses, applied on a retrospective basis. The other components of net benefit cost, including amortization of prior service cost, and gains and losses from settlements and curtailments, are included in other operating expenses. The new guidance also stipulates that only the service cost component of net benefit cost is eligible for capitalization, applied on a prospective basis. This new guidance is effective for annual and interim periods beginning after December 15, 2017. The Company adopted the new guidance on January 1, 2018 and there was no material impact to the Company’s financial statements.

Compensation—Stock Compensation: Scope of Modification Accounting—In May 2017, the FASB issued updated guidance on modifications to share-based payment awards. The updated guidance requires entities to account for the effects of a modification to a share-based payment award unless the following are all the same immediately before and after the modification: (i) the fair value of the award, (ii) the vesting conditions of the award, and (iii) the classification of the award as an equity instrument or a liability instrument. This new guidance is effective for annual and interim periods beginning after December 15, 2017 and is to be applied on a prospective basis. The Company adopted the new guidance on January 1, 2018, and there was no material impact to the Company’s financial statements.

Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income—In February 2018, the FASB issued updated guidance on the tax effects of items in “accumulated other comprehensive income (loss), net of tax” (“AOCI”). Specifically, the new guidance will permit, but not require, a reclassification from AOCI to retained earnings for stranded tax effects resulting from the newly enacted federal corporate income tax rate under the Tax Cuts and Jobs Act of 2017 (see Note 15). The amount of the reclassification would be the difference between the historical corporate income tax rate and the newly enacted 21% corporate income tax rate. The new guidance is effective for annual and interim periods beginning after December 15, 2018, with an option to apply it in the period of adoption or on a retrospective basis for each period in which the effect of the change in the U.S. federal corporate income tax rate is recognized. Early adoption of the new guidance is permitted for public business entities for reporting periods for which financial statements have not yet been issued. The Company is currently evaluating the new guidance.

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LAZARD LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(UNAUDITED)

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

Leases—In February 2016, the FASB issued updated guidance for leases. The guidance requires a lessee to (i) recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, in the statement of financial condition, (ii) recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a generally straight-line basis, and (iii) classify all cash payments within operating activities in the statement of cash flows. The new guidance is effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted. Currently, the Company plans to adopt the new guidance as of the effective date, January 1, 2019, and is considering the practical expedients available. The new guidance is to be applied on a modified retrospective basis.

The Company continues to evaluate the new guidance, and is in the process of evaluating its leasing activities and contracts, as well as processes and internal controls over financial reporting relating to its leasing activities. See Note 11 for further information on the Company's commitments under lease agreements. The population of contracts potentially subject to recognition in the statement of financial condition and their initial measurement remains under evaluation.

Improvements to Nonemployee Share-Based Payment Accounting—In June 2018, the FASB issued updated guidance to simplify the accounting for nonemployee share-based payment transactions. The new guidance generally requires equity-classified nonemployee share-based payment awards to be measured at the grant date, which is the date at which a grantor and grantee reach a mutual understanding of the key terms and conditions of a share-based payment award.  This update generally aligns the accounting for equity-classified share-based payment awards to nonemployees with the measurement date required for employees.  The new guidance is effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted.  Upon adoption, the new guidance would be applied on a modified retrospective basis. The Company is currently evaluating the new guidance.

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

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

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 new guidance is effective for annual and interim reporting periods beginning after December 15, 2019, with early adoption permitted. Upon adoption, the Company may elect to apply the new guidance on either a prospective or retrospective basis. The Company is currently evaluating the new guidance.

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 new guidance is effective for annual and interim reporting periods beginning after December 15, 2019, with early adoption permitted. The Company is currently evaluating the new guidance.

12

LAZARD LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(UNAUDITED)

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

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 new guidance is effective for annual and interim reporting periods beginning after December 15, 2020, with early adoption permitted. The Company is currentlyevaluating the newguidance.

3. REVENUE RECOGNITION

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.

13

LAZARD LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(UNAUDITED)

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

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		Nine Months Ended
	September 30, 2018 (d)		September 30, 2018 (d)
Net Revenue:
Financial Advisory (a)	$	310,418	$	1,141,628
Asset Management:
Management Fees and Other (b)	$	323,283	$	1,012,127
Incentive Fees (c)		1,957		19,984
Total Asset Management	$	325,240	$	1,032,111

(a) Financial Advisory is comprised of M&A Advisory, Capital Advisory, Capital Raising, Restructuring, Shareholder Advisory, Sovereign Advisory, and other strategic advisory work for clients. The benefits of these advisory services are generally transferred to the Company’s clients over time, and consideration for these advisory services typically includes transaction completion, transaction announcement and retainer fees. Retainer fees are generally fixed and recognized over the period in which the advisory services are performed. However, transaction announcement and transaction completion fees are variable and subject to constraints, and they are typically not recognized until there is an announcement date or a completion date, respectively, due to the uncertainty associated with those events. The advisory fees that may be unrecognized as of the end of a reporting period, primarily comprised of fees associated with transaction announcements and transaction completions, generally remain unrecognized due to the uncertainty associated with those events.

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

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

(d) 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.

4. RECEIVABLES

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

14

LAZARD LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(UNAUDITED)

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

Receivables are stated net of an estimated allowance for doubtful accounts, for past due amounts and for specific accounts deemed uncollectible, which may include situations where a fee is in dispute.

Activity in the allowance for doubtful accounts for the three month and nine month periods ended September 30, 2018 and 2017 was as follows:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Beginning Balance	$	34,956		$	25,094		$	23,746		$	16,386
Bad debt expense, net of recoveries		1,488			4,753			18,106			18,584
Charge-offs, foreign currency translation and other    adjustments		(1,920	)		(2,383	)		(7,328	)		(7,506	)
Ending Balance	$	34,524		$	27,464		$	34,524		$	27,464

Bad debt expense, net of recoveries is included in “operating expenses—other” on the condensed consolidated statements of operations.

At September 30, 2018 and December 31, 2017, the Company had receivables past due or deemed uncollectible of $38,098 and $34,865, respectively.

Of the Company’s fee receivables at September 30, 2018 and December 31, 2017, $77,540 and $80,536, respectively, represented interest-bearing financing receivables. Based upon our historical loss experience, the credit quality of the counterparties, and the lack of past due or uncollectible amounts, there was no allowance for doubtful accounts required at those dates related to such receivables.

The aggregate carrying amount of our non-interest bearing receivables of $563,247 and $491,080 at September 30, 2018 and December 31, 2017, respectively, approximates fair value.

5. INVESTMENTS

The Company’s investments and securities sold, not yet purchased, consist of the following at September 30, 2018 and December 31, 2017:

	September 30,		December 31,
	2018		2017
Interest-bearing deposits	$	519	$	556
Debt		202,592		6
Equities		36,810		45,257
Funds:
Alternative investments (a)		18,169		20,993
Debt (a)		89,476		84,077
Equity (a)		202,354		199,618
Private equity		59,675		76,679
		369,674		381,367
Total investments		609,595		427,186
Less:
Interest-bearing deposits		519		556
Investments, at fair value	$	609,076	$	426,630
Securities sold, not yet purchased, at fair value (included in “other liabilities”)	$	6,876	$	7,338

(a) Interests in alternative investment funds, debt funds and equity funds include investments with fair values of $9,979, $59,282 and $149,813, respectively, at September 30, 2018 and $11,213, $48,391 and $131,893, respectively, at December 31, 2017, held in

15

LAZARD LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(UNAUDITED)

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

order to satisfy the Company’s liability upon vesting of previously granted Lazard Fund Interests (“LFI”) and other similar deferred compensation arrangements. LFI represent grants by the Company to eligible employees of actual or notional interests in a number of Lazard-managed funds, subject to service-based vesting conditions (see Notes 7 and 13).

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, (ii) a fund targeting significant noncontrolling-stake investments in established private companies and (iii) until the second quarter of 2017, a mezzanine fund (the “Mezzanine Fund”), which invests in mezzanine debt of a diversified selection of small- to mid-cap European companies. Lazard sold its interest in the Mezzanine Fund in May 2017.

Private equity investments consolidated but not owned by Lazard relate to the economic interests that are owned by the management team and other investors in the Edgewater Funds (“Edgewater”).

During the three month and nine month periods ended September 30, 2018 and 2017, the Company reported in “revenue-other” on its condensed consolidated statements of operations net unrealized investment gains and losses pertaining to “trading” securities still held as of the reporting date as follows:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018			2017
Net unrealized investment gains (losses)	$	1,972	$	6,949	$	(13,183	)	$	27,932

6. FAIR VALUE MEASUREMENTS

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

Level 1. Assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market that Lazard has the ability to access.

Level 2. Assets and liabilities whose values are based on (i) quoted prices for similar assets or liabilities in an active market, or quoted prices for identical or similar assets or liabilities in non-active markets, or (ii) inputs other than quoted prices that are directly observable or derived principally from, or corroborated by, market data.

16

LAZARD LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(UNAUDITED)

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

Level 3. Assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect our own assumptions about the assumptions a market participant would use in pricing the asset or liability. Items included in Level 3 include securities or other financial assets whose trading volume and level of activity have significantly decreased when compared with normal market activity and there is no longer sufficient frequency or volume to provide pricing information on an ongoing basis.

The fair value of 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 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 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 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. See Note 11.

The fair value of derivatives entered into by the Company is 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. 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.

17

LAZARD LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(UNAUDITED)

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

The following tables present, as of September 30, 2018 and December 31, 2017, 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:

	September 30, 2018
	Level 1		Level 2		Level 3		NAV		Total
Assets:
Investments:
Debt	$	202,592	$	-	$	-	$	-	$	202,592
Equities		35,182		-		1,628		-		36,810
Funds:
Alternative investments		17,254		-		-		915		18,169
Debt		89,469		-		-		7		89,476
Equity		202,302		-		-		52		202,354
Private equity		-		-		-		59,675		59,675
Derivatives		-		7,490		-		-		7,490
Total	$	546,799	$	7,490	$	1,628	$	60,649	$	616,566
Liabilities:
Securities sold, not yet purchased	$	6,876	$	-	$	-	$	-	$	6,876
Contingent consideration liability		-		-		12,921		-		12,921
Derivatives		-		206,729		-		-		206,729
Total	$	6,876	$	206,729	$	12,921	$	-	$	226,526

	December 31, 2017
	Level 1		Level 2		Level 3		NAV		Total
Assets:
Investments:
Debt	$	6	$	-	$	-	$	-	$	6
Equities		43,665		-		1,592		-		45,257
Funds:
Alternative investments		17,353		-		-		3,640		20,993
Debt		84,071		-		-		6		84,077
Equity		199,565		-		-		53		199,618
Private equity		-		-		-		76,679		76,679
Derivatives		-		3,732		-		-		3,732
Total	$	344,660	$	3,732	$	1,592	$	80,378	$	430,362
Liabilities:
Securities sold, not yet purchased	$	7,338	$	-	$	-	$	-	$	7,338
Contingent consideration liability		-		-		28,941		-		28,941
Derivatives		-		198,417		-		-		198,417
Total	$	7,338	$	198,417	$	28,941	$	-	$	234,696

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LAZARD LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(UNAUDITED)

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

The following tables provide a summary of changes in fair value of the Company’s Level 3 assets and liabilities for the three month and nine month periods ended September 30, 2018 and 2017:

	Three Months Ended September 30, 2018
	Beginning Balance		NetUnrealized/ Realized Gains/Losses Included In Earnings (a)			Purchases/ Acquisitions		Sales/ Dispositions		Foreign Currency Translation Adjustments			Ending Balance
Assets:
Investments:
Equities	$	1,629	$	-		$	-	$	-	$	(1	)	$	1,628
Total Level 3 Assets	$	1,629	$	-		$	-	$	-	$	(1	)	$	1,628
Liabilities:
Contingent consideration liability	$	19,628	$	(6,707	)	$	-	$	-	$	-		$	12,921
Total Level 3 Liabilities	$	19,628	$	(6,707	)	$	-	$	-	$	-		$	12,921

	Nine Months Ended September 30, 2018
	Beginning Balance		NetUnrealized/ Realized Gains/Losses Included In Earnings (a)			Purchases/ Acquisitions		Sales/ Dispositions		Foreign Currency Translation Adjustments			Ending Balance
Assets:
Investments:
Equities	$	1,592	$	61		$	1	$	-	$	(26	)	$	1,628
Total Level 3 Assets	$	1,592	$	61		$	1	$	-	$	(26	)	$	1,628
Liabilities:
Contingent consideration liability	$	28,941	$	(16,020	)	$	-	$	-	$	-		$	12,921
Total Level 3 Liabilities	$	28,941	$	(16,020	)	$	-	$	-	$	-		$	12,921

	Three Months Ended September 30, 2017
	Beginning Balance		Net Unrealized/ Realized Gains/Losses Included In Earnings (a)			Purchases/ Acquisitions		Sales/ Dispositions			Foreign Currency Translation Adjustments		Ending Balance
Assets:
Investments:
Equities	$	3,072	$	130		$	-	$	(1,661	)	$	6	$	1,547
Total Level 3 Assets	$	3,072	$	130		$	-	$	(1,661	)	$	6	$	1,547
Liabilities:
Contingent consideration liability	$	25,539	$	(612	)	$	-	$	-		$	-	$	24,927
Total Level 3 Liabilities	$	25,539	$	(612	)	$	-	$	-		$	-	$	24,927

19

LAZARD LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(UNAUDITED)

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

	Nine Months Ended September 30, 2017
	Beginning Balance		Net Unrealized/ Realized Gains/Losses Included In Earnings (a)		Purchases/ Acquisitions		Sales/ Dispositions			Foreign Currency Translation Adjustments		Ending Balance
Assets:
Investments:
Equities	$	1,508	$	4	$	1,661	$	(1,669	)	$	43	$	1,547
Total Level 3 Assets	$	1,508	$	4	$	1,661	$	(1,669	)	$	43	$	1,547
Liabilities:
Contingent consideration liability	$	22,608	$	2,568	$	-	$	(249	)	$	-	$	24,927
Total Level 3 Liabilities	$	22,608	$	2,568	$	-	$	(249	)	$	-	$	24,927

(a) Earnings recorded in “other revenue” for investments in equities for the three month and nine month periods ended September 30, 2018 and the three month and nine month periods ended September 30, 2017 include net unrealized gains of $0, $61, $130 and $2, respectively. Earnings recorded in “amortization and other acquisition-related (benefits) costs” for the contingent consideration liability for the three month and nine month periods ended September 30, 2018 and the three month and nine month periods ended September 30, 2017 include unrealized (gains) losses of $(6,707), $(16,020), $(612) and $2,568, respectively.

There were no transfers between any of the Level 1, 2 and 3 categories in the fair value measurement hierarchy during the three month and nine month periods ended September 30, 2018 and 2017.

The following tables present, at September 30, 2018 and December 31, 2017, certain investments that are valued using NAV or its equivalent as a practical expedient in determining fair value:

September 30, 2018

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

Alternativeinvestment funds:

Hedge funds

$

330

$

-

NA

NA

NA

NA

(a)

60 days

Funds of funds

23

-

NA

NA

NA

NA

(b)

90 days

Other

562

-

NA

NA

NA

NA

(c)

<30-60 days

Debt funds

7

-

NA

NA

NA

NA

(d)

30 days

Equity funds

52

-

NA

NA

NA

NA

(e)

<30-90 days

Private equity funds:

Equity growth

59,675

8,632

(f)

100

%

15

%

36

%

49

%

NA

NA

Total

$

60,649

$

8,632

(a) monthly (100%)

(b) quarterly (100%)

(c) daily (6%) and monthly (94%)

(d) daily (100%)

(e) daily (18%), monthly (47%), quarterly (31%) and annually (4%)

(f) Unfunded commitments to private equity investments consolidated but not owned by Lazard of $15,257 are excluded. Such commitments are required to be funded by capital contributions from noncontrolling interest holders.

20

LAZARD LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(UNAUDITED)

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

December 31, 2017

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

Alternativeinvestment funds:

Hedge funds

$

2,517

$

-

NA

NA

NA

NA

(a)

<30-60 days

Funds of funds

528

-

NA

NA

NA

NA

(b)

<30-90 days

Other

595

-

NA

NA

NA

NA

(c)

<30-60 days

Debt funds

6

-

NA

NA

NA

NA

(d)

30 days

Equity funds

53

-

NA

NA

NA

NA

(e)

<30-90 days

Private equity funds:

Equity growth

76,679

10,300

(f)

100

%

16

%

38

%

46

%

NA

NA

Total

$

80,378

$

10,300

(a) weekly (3%), monthly (5%) and quarterly (92%)

(b) monthly (97%) and quarterly (3%)

(c) daily (6%) and monthly (94%)

(d) daily (100%)

(e) daily (18%), monthly (50%) and quarterly (32%)

(f) Unfunded commitments to private equity investments consolidated but not owned by Lazard of $5,902 are excluded. Such commitments are required to be funded by capital contributions from noncontrolling interest holders.

Investment Capital Funding Commitments—At September 30, 2018, the Company’s maximum unfunded commitments for capital contributions to investment funds primarily arose from commitments to EGCP III, which amounted to $7,847. 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.

7. DERIVATIVES

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.

21

LAZARD LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(UNAUDITED)

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

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 September 30, 2018 and December 31, 2017:

	September 30,		December 31,
	2018		2017
Derivative Assets:
Forward foreign currency exchange rate contracts	$	4,709	$	3,314
Total return swaps and other (a)		2,781		418
	$	7,490	$	3,732
Derivative Liabilities:
Forward foreign currency exchange rate contracts	$	2,434	$	4,846
Total return swaps and other (a)		317		11,270
LFI and other similar deferred compensation arrangements		203,978		182,301
	$	206,729	$	198,417

(a) For total return swaps, amounts represent the netting of gross derivative assets and liabilities of $3,401 and $937 as of September 30, 2018, respectively, and $469 and $11,321 as of December 31, 2017, respectively, for contracts with the same counterparty under legally enforceable master netting agreements. Such amounts are recorded “net” in “other assets”, with receivables for net cash collateral under such contracts of $2,316 and $17,616 as of September 30, 2018 and December 31, 2017, respectively.

Net gains (losses) with respect to derivative instruments (predominantly reflected in “revenue-other”) and the Company’s derivative liabilities relating to its obligations pertaining to LFI and other similar deferred compensation arrangements (included in “compensation and benefits” expense) as reflected on the accompanying condensed consolidated statements of operations for the three month and nine month periods ended September 30, 2018 and 2017, were as follows:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Forward foreign currency exchange rate contracts	$	1,431		$	(2,991	)	$	5,184		$	(8,149	)
LFI and other similar deferred compensation arrangements		(3,647	)		(4,875	)		(1,712	)		(17,981	)
Total return swaps and other		(1,847	)		(3,890	)		599			(12,872	)
Total	$	(4,063	)	$	(11,756	)	$	4,071		$	(39,002	)

8. PROPERTY

At September 30, 2018 and December 31, 2017, property consisted of the following:

	Estimated Depreciable		September 30,		December 31,
	Life in Years		2018		2017
Buildings		33	$	146,630	$	151,912
Leasehold improvements	3-20			188,995		173,102
Furniture and equipment	3-10			199,192		183,541
Construction in progress				11,399		14,573
Total				546,216		523,128
Less - Accumulated depreciation and amortization			331,937			317,827
Property			$	214,279	$	205,301

22

LAZARD LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(UNAUDITED)

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

9. GOODWILL AND OTHER INTANGIBLE ASSETS

The components of goodwill and other intangible assets at September 30, 2018 and December 31, 2017 are presented below:

	September 30,		December 31,
	2018		2017
Goodwill	$	374,994	$	385,292
Other intangible assets (net of accumulated amortization)		4,247		6,072
	$	379,241	$	391,364

At September 30, 2018 and December 31, 2017, goodwill of $310,453 and $320,751, respectively, was attributable to the Company’s Financial Advisory segment and, at each such respective date, $64,541 of goodwill was attributable to the Company’s Asset Management segment.

Changes in the carrying amount of goodwill for the nine month periods ended September 30, 2018 and 2017 are as follows:

	Nine Months Ended
	September 30,
	2018			2017
Balance, January 1	$	385,292		$	373,117
Foreign currency translation adjustments		(10,298	)		12,369
Balance, September 30	$	374,994		$	385,486

All changes in the carrying amount of goodwill for the nine month periods ended September 30, 2018 and 2017 are attributable to the Company’s Financial Advisory segment.

The gross cost and accumulated amortization of other intangible assets as of September 30, 2018 and December 31, 2017, by major intangible asset category, are as follows:

	September 30, 2018						December 31, 2017
	Gross Cost		Accumulated Amortization		Net Carrying Amount		Gross Cost		Accumulated Amortization		Net Carrying Amount
Success/incentive fees	$	35,335	$	31,922	$	3,413	$	35,422	$	29,723	$	5,699
Management fees, customer relationships    and non-compete agreements		34,488		33,654		834		33,749		33,376		373
	$	69,823	$	65,576	$	4,247	$	69,171	$	63,099	$	6,072

Amortization expense of intangible assets, included in “amortization and other acquisition-related (benefits) costs” in the condensed consolidated statements of operations, for the three month and nine month periods ended September 30, 2018 was $856 and $2,552, respectively, and for the three month and nine month periods ended September 30, 2017 was $784 and $2,435, respectively. Estimated future amortization expense is as follows:

Year Ending December 31,	Amortization Expense (a)
2018 (October 1 through December 31)	$	484
2019		1,724
2020		1,701
2021		150
2022		150
2023		38
Total amortization expense	$	4,247

(a) Approximately 38% of intangible asset amortization is attributable to a noncontrolling interest.

23

LAZARD LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(UNAUDITED)

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

10. SENIOR DEBT

Senior debt is comprised of the following as of September 30, 2018 and December 31, 2017:

							Outstanding as of
	Initial			Annual			September 30, 2018						December 31, 2017
	Principal Amount		Maturity Date	Interest Rate(a)			Principal		Unamortized Debt Costs		Carrying Value		Principal		Unamortized Debt Costs		Carrying Value
Lazard Group 2020    Senior Notes	$	500,000	11/14/20		4.25	%	$	250,000	$	978	$	249,022	$	500,000	$	2,647	$	497,353
Lazard Group 2025    Senior Notes		400,000	2/13/25		3.75	%		400,000		3,006		396,994		400,000		3,361		396,639
Lazard Group 2027    Senior Notes		300,000	3/1/27		3.625	%		300,000		3,314		296,686		300,000		3,609		296,391
Lazard Group 2028    Senior Notes (b)		500,000	9/19/28		4.50	%		500,000		9,000		491,000		-		-		-
Total							$	1,450,000	$	16,298	$	1,433,702	$	1,200,000	$	9,617	$	1,190,383

(a) The effective interest rates of Lazard Group’s 4.25% senior notes due November 14, 2020 (the “2020 Notes”), Lazard Group’s 3.75% senior notes due February 13, 2025 (the “2025 Notes”), Lazard Group’s 3.625% senior notes due March 1, 2027 (the “2027 Notes”) and Lazard Group’s 4.50% senior notes due September 19, 2028 (the “2028 Notes”) are 4.44%, 3.87%,  3.76% and 4.68%, respectively.

(b) In September 2018, Lazard Group completed an offering of $500,000 aggregate principal amount of the 2028 Notes. Interest on the 2028 Notes is payable semi-annually on March 19 and September 19 of each year, beginning March 19, 2019. Lazard Group used a portion of the net proceeds of the 2028 Notes to redeem or otherwise retire $250,000 aggregate principal amount of the 2020 Notes, which, including the recognition of unamortized issuance costs, resulted in a loss on debt extinguishment of $6,523. Such loss on debt extinguishment was recorded in “operating expenses—other” on the condensed consolidated statement of operations for the three month and nine month periods ended September 30, 2018.

On September 25, 2015, Lazard Group entered into an Amended and Restated Credit Agreement for a five-year $150,000 senior revolving credit facility with a group of lenders (the “Amended and Restated Credit Agreement”), which expires in September 2020. The Amended and Restated Credit Agreement amended and restated the previous credit agreement dated September 25, 2012. 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. At September 30, 2018 and December 31, 2017, no amounts were outstanding under the Amended and Restated Credit Agreement.

The Amended and Restated Credit Agreement, the indenture and the supplemental indentures relating to Lazard Group’s senior notes contain certain covenants, events of default and other customary provisions, including a customary make-whole provision in the event of early redemption, where applicable. As of September 30, 2018, the Company was in compliance with such provisions. All of the Company’s senior debt obligations are unsecured.

As of September 30, 2018, the Company had approximately $169,000 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 $17,000 (at September 30, 2018 exchange rates).

The Company’s senior debt at September 30, 2018 and December 31, 2017 is carried at historical amounts of $1,433,702 and $1,190,383, respectively. At those dates, the fair value of such senior debt was approximately $1,407,000 and $1,230,000, 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.

24

LAZARD LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(UNAUDITED)

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

11. COMMITMENTS AND CONTINGENCIES

Leases—The Company has various leases and other contractual commitments arising in the ordinary course of business. At September 30, 2018, minimum rental commitments under non-cancelable operating leases, net of sublease income, are approximately as follows:

Year Ending December 31,
2018 (October 1 through December 31)	$	20,992
2019		85,689
2020		87,492
2021		83,164
2022		70,422
Thereafter		545,624
Total minimum rental commitments		893,383
Less - Sublease proceeds		28,796
Net rental commitments	$	864,587

In August 2018, the Company entered into a lease agreement for additional office facilities. Operating lease commitments in the table above include the impact of the new lease agreement.

Guarantees—In the normal course of business, LFB provides indemnifications to third parties to protect them in the event of non-performance by its clients. At September 30, 2018, LFB had $4,961 of such indemnifications and held $4,961 of collateral/counter-guarantees to secure these commitments. The Company believes the likelihood of loss with respect to these indemnities is remote. Accordingly, no liability is recorded in the condensed consolidated statement of financial condition.

Business Acquisitions—For businesses acquired in 2016, the remaining consideration consists of (i) 60,817 shares of Class A common stock subject to non-compete provisions, and non-contingent interests exchangeable into 202,984 shares of Class A common stock, and (ii) up to 810,742 additional shares of Class A common stock that are subject to certain performance thresholds, as well as applicable related dividend equivalent amounts. As of September 30, 2018, none of the contingent shares had been earned.

Other Commitments—The Company has various other contractual commitments arising in the ordinary course of business. In addition, from time to time, each of LFB and LFNY may enter into underwriting commitments in which it will participate as an underwriter. At September 30, 2018, LFB and LFNY had no 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, 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.

25

LAZARD LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(UNAUDITED)

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

12. STOCKHOLDERS’ EQUITY

Share Repurchase Program—During the nine month period ended September 30, 2018 and since 2015, the Board of Directors of Lazard authorized the repurchase of Class A common stock as set forth in the table below:

Date	Repurchase Authorization		Expiration
February 2015	$	150,000	December31, 2016
January 2016	$	200,000	December31, 2017
April 2016	$	113,182	December31, 2017
November 2016	$	236,000	December31, 2018
October 2017	$	200,000	December31, 2019
April 2018	$	300,000	December 31, 2020

The Company expects that the share repurchase program will primarily 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 (the “2018 Plan”). Pursuant to the share repurchase program, purchases have been made in the open market or through privately negotiated transactions. The rate at which the Company purchases shares in connection with the share repurchase program may vary from quarter to quarter due to a variety of factors. Purchases with respect to such program are set forth in the table below:

Nine Months Ended September 30:	Number of Shares Purchased		Average Price Per Share
2017		5,838,520	$	43.25
2018		5,797,789	$	52.88

During the nine month periods ended September 30, 2018 and 2017, certain of our executive officers received Class A common stock in connection with the vesting or settlement of previously-granted deferred equity incentive awards. The vesting or settlement of such equity awards gave rise to a tax payable by the executive officers, and, consistent with our past practice, the Company purchased shares of Class A common stock from the executive officers equal in value to all or a portion of the estimated amount of such tax. In addition, during the nine month periods ended September 30, 2018 and 2017, the Company purchased shares of Class A common stock from certain of our executive officers. The aggregate value of all such purchases during the nine month periods ended September 30, 2018 and 2017 was approximately $16,400 and $14,700, respectively.

As of September 30, 2018, a total of $241,793 of share repurchase authorization remained available under the Company’s share repurchase program, which will expire on December 31, 2020.

In addition, on October 24, 2018, the Board of Directors of Lazard authorized the repurchase of up to $300,000 of additional shares of Class A common stock, which authorization will expire on December 31, 2020, bringing the total share repurchase authorization as of October 24, 2018 to approximately $524,000.

During the nine month period ended September 30, 2018, the Company had in place trading plans under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), pursuant to which it effected stock repurchases in the open market.

Preferred Stock—Lazard Ltd has 15,000,000 authorized shares of preferred stock, par value $0.01 per share, inclusive of its Series A and Series B preferred stock. Series A and Series B preferred shares were issued in connection with certain prior year business acquisitions and were each non-participating securities convertible into Class A common stock, and had no voting or dividend rights. As of both September 30, 2018 and December 31, 2017, no shares of Series A or Series B preferred stock were outstanding.

26

LAZARD LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(UNAUDITED)

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

Accumulated Other Comprehensive Income (Loss), Net of Tax—The tables below reflect the balances of each component of AOCI at September 30, 2018 and 2017 and activity during the three month and nine month periods then ended:

	Three Months Ended September 30, 2018
	Currency Translation Adjustments			Employee Benefit Plans			Total AOCI			Amount Attributable to Noncontrolling Interests			Total Lazard Ltd AOCI
Balance, July 1, 2018	$	(109,642	)	$	(143,859	)	$	(253,501	)	$	(2	)	$	(253,499	)
Activity:
Other comprehensive income (loss) before    reclassifications		(8,676	)		863			(7,813	)		2			(7,815	)
Adjustments for items reclassified to earnings,    net of tax		-			949			949			-			949
Net other comprehensive income (loss)		(8,676	)		1,812			(6,864	)		2			(6,866	)
Balance, September 30, 2018	$	(118,318	)	$	(142,047	)	$	(260,365	)	$	-		$	(260,365	)

	Nine Months Ended September 30, 2018
	Currency Translation Adjustments			Employee Benefit Plans			Total AOCI			Amount Attributable to Noncontrolling Interests			Total Lazard Ltd AOCI
Balance, January 1, 2018	$	(83,535	)	$	(148,984	)	$	(232,519	)	$	(1	)	$	(232,518	)
Activity:
Other comprehensive income (loss) before    reclassifications		(34,783	)		4,149			(30,634	)		1			(30,635	)
Adjustments for items reclassified to earnings,    net of tax		-			2,788			2,788			-			2,788
Net other comprehensive income (loss)		(34,783	)		6,937			(27,846	)		1			(27,847	)
Balance, September 30, 2018	$	(118,318	)	$	(142,047	)	$	(260,365	)	$	-		$	(260,365	)

	Three Months Ended September 30, 2017
	Currency Translation Adjustments			Employee Benefit Plans			Total AOCI			Amount Attributable to Noncontrolling Interests			Total Lazard Ltd AOCI
Balance, July 1, 2017	$	(112,105	)	$	(165,682	)	$	(277,787	)	$	(2	)	$	(277,785	)
Activity:
Other comprehensive income (loss) before    reclassifications		19,748			(4,715	)		15,033			2			15,031
Adjustments for items reclassified to earnings,    net of tax		-			1,081			1,081			-			1,081
Net other comprehensive income (loss)		19,748			(3,634	)		16,114			2			16,112
Balance, September 30, 2017	$	(92,357	)	$	(169,316	)	$	(261,673	)	$	-		$	(261,673	)

27

LAZARD LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(UNAUDITED)

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

	Nine Months Ended September 30, 2017
	Currency Translation Adjustments			Employee Benefit Plans			Total AOCI			Amount Attributable to Noncontrolling Interests			Total Lazard Ltd AOCI
Balance, January 1, 2017	$	(155,204	)	$	(159,020	)	$	(314,224	)	$	(2	)	$	(314,222	)
Activity:
Other comprehensive income (loss) before    reclassifications		62,847			(13,819	)		49,028			2			49,026
Adjustments for items reclassified to earnings,    net of tax		-			3,523			3,523			-			3,523
Net other comprehensive income (loss)		62,847			(10,296	)		52,551			2			52,549
Balance, September 30, 2017	$	(92,357	)	$	(169,316	)	$	(261,673	)	$	-		$	(261,673	)

The table below reflects adjustments for items reclassified out of AOCI, by component, for the three month and nine month periods ended September 30, 2018 and 2017:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Amortization relating to employee benefit plans (a)	$	1,213	$	1,285	$	3,736	$	4,199
Less - related income taxes		264		204		948		676
Total reclassifications, net of tax	$	949	$	1,081	$	2,788	$	3,523

(a) Included in the computation of net periodic benefit cost (see Note 14). Such amounts are included in “operating expenses—other” on the condensed consolidated statements of operations.

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

The tables below summarize net income attributable to noncontrolling interests for the three month and nine month periods ended September 30, 2018 and 2017 and noncontrolling interests as of September 30, 2018 and December 31, 2017 in the Company’s condensed consolidated financial statements:

	Net Income Attributable to Noncontrolling Interests
	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Edgewater	$	1,651	$	2,260	$	5,034	$	5,657
Other		-		-		2		3
Total	$	1,651	$	2,260	$	5,036	$	5,660

	Noncontrolling Interests as of
	September 30,		December 31,
	2018		2017
Edgewater	$	53,902	$	58,568
Other		558		534
Total	$	54,460	$	59,102

Dividends Declared, October 24, 2018—On October 24, 2018, the Board of Directors of Lazard declared a quarterly dividend of $0.44 per share on our Class A common stock, payable on November 16, 2018, to stockholders of record on November 5, 2018.

28

LAZARD LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(UNAUDITED)

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

13. INCENTIVE PLANS

Share-Based Incentive Plan Awards

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 and nine month periods ended September 30, 2018 and 2017 is presented below.

Shares Available Under the 2018 Plan, 2008 Plan and 2005 Plan

The 2018 Plan became effective on April 24, 2018 and replaced the 2008 Plan, which was terminated on April 24, 2018. The 2018 Plan authorizes the issuance of up to 30,000,000 shares of Class A common stock pursuant to the grant or exercise of stock options, stock appreciation rights, restricted stock units (“RSUs”), performance-based restricted stock units (“PRSUs”) and other share-based awards.

The 2008 Plan authorized the issuance of shares of Class A 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 Class A 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 unvested awards granted under the 2008 Plan before its termination remain outstanding and continue to be subject to its terms.

The 2005 Plan authorized the issuance of up to 25,000,000 shares of Class A common stock pursuant to the grant or exercise of stock options, stock appreciation rights, RSUs and other share-based awards. The 2005 Plan expired in the second quarter of 2015, although unvested deferred stock unit (“DSU”) awards granted under the 2005 Plan before its expiration remain outstanding and 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 and restricted stock awards) and “professional services” expense (with respect to DSUs) within the Company’s accompanying condensed consolidated statements of operations for the three month and nine month periods ended September 30, 2018 and 2017:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Share-based incentive awards:
RSUs	$	38,121	$	39,898	$	154,643	$	150,193
PRSUs		3,107		9,896		31,125		38,095
Restricted Stock		6,950		7,697		30,323		30,507
DSUs		179		156		2,096		1,853
Total	$	48,357	$	57,647	$	218,187	$	220,648

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

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

29

LAZARD LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(UNAUDITED)

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

The Company’s share-based incentive plans and awards are described below.

RSUs and DSUs

RSUs generally require future service as a condition for the delivery of the underlying shares of Class A common stock (unless the recipient is then eligible for retirement under the Company’s retirement policy) and convert into shares of Class A common stock on a one-for-one basis after the stipulated vesting periods. PRSUs, which are RSUs that are also subject to service-based vesting conditions, have additional performance conditions, and are described below. The grant date fair value of the RSUs, net of an estimated forfeiture rate, is amortized over the vesting periods or requisite service periods (generally one-third after two years, and the remaining two-thirds after the third year), and is adjusted for actual forfeitures over such period.

RSUs generally include a dividend participation right that provides that during vesting periods each RSU is attributed additional RSUs (or fractions thereof) equivalent to any dividends paid on Class A common stock during such period. During the nine month periods ended September 30, 2018 and 2017, issuances of RSUs pertaining to such dividend participation rights and respective charges to “retained earnings”, net of estimated forfeitures (with corresponding credits to “additional paid-in-capital”), consisted of the following:

	Nine Months Ended
	September 30,
	2018		2017
Number of RSUs issued		746,324		866,914
Charges to retained earnings, net of estimated forfeitures	$	38,923	$	36,482

Non-executive members of the Board of Directors (“Non-Executive Directors”) receive approximately 55% of their annual compensation for service on the Board of Directors and its committees in the form of DSUs, which resulted in 30,463 and 31,280 DSUs granted during the nine month periods ended September 30, 2018 and 2017, respectively.  Their remaining compensation is payable in cash, which they may elect to receive in the form of additional DSUs under the Directors’ Fee Deferral Unit Plan described below. DSUs are convertible into shares of Class A common stock at the time of cessation of service to the Board of Directors and, for purposes of calculating diluted net income per share, are included in the diluted weighted average shares of Class A common stock outstanding using the “treasury stock” method. DSUs include a cash dividend participation right equivalent to dividends paid on Class A common stock.

The Company’s Directors’ Fee Deferral Unit Plan permits the Non-Executive Directors to elect to receive additional DSUs in lieu of some or all of their cash fees. The number of DSUs granted to a Non-Executive Director pursuant to this election will equal the value of cash fees that the applicable Non-Executive Director has elected to forego pursuant to such election, divided by the market value of a share of Class A common stock on the date immediately preceding the date of the grant. During the nine month periods ended September 30, 2018 and 2017, 9,837 and 10,541 DSUs, respectively, had been granted pursuant to such Plan.

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

30

LAZARD LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(UNAUDITED)

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

The following is a summary of activity relating to RSUs and DSUs during the nine month periods ended September 30, 2018 and 2017:

	RSUs					DSUs
	Units			Weighted Average Grant Date Fair Value		Units			Weighted Average Grant Date Fair Value
Balance, January 1, 2018		12,919,846		$	40.23		278,422		$	37.46
Granted (including 746,324 RSUs relating to dividend    participation)		4,096,939		$	53.78		40,300		$	52.00
Forfeited		(130,138	)	$	45.11		-			-
Vested		(5,603,901	)	$	42.88		-			-
Balance, September 30, 2018		11,282,746		$	43.78		318,722		$	39.30
Balance, January 1, 2017		11,698,138		$	40.65		276,725		$	36.05
Granted (including 866,914 RSUs relating to dividend    participation)		5,294,156		$	43.01		41,821		$	44.30
Forfeited		(162,320	)	$	39.97		-			-
Vested		(3,977,477	)	$	45.27		(43,465	)	$	35.77
Balance, September 30, 2017		12,852,497		$	40.20		275,081		$	37.35

In connection with RSUs that vested during the nine month periods ended September 30, 2018 and 2017, the Company satisfied its minimum statutory tax withholding requirements in lieu of delivering 1,640,513 and 1,282,843 shares of Class A common stock during such respective nine month periods. Accordingly, 3,963,388 and 2,694,634 shares of Class A common stock held by the Company were delivered during the nine month periods ended September 30, 2018 and 2017, respectively.

As of September 30, 2018, estimated unrecognized RSU compensation expense was approximately $166,534, with such expense expected to be recognized over a weighted average period of approximately 0.8 years subsequent to September 30, 2018.

Restricted Stock

The following is a summary of activity related to shares of restricted Class A common stock associated with compensation arrangements during the nine month periods ended September 30, 2018 and 2017:

	Restricted Shares			Weighted Average Grant Date Fair Value
Balance, January 1, 2018		1,938,160		$	40.54
Granted		529,987		$	54.45
Forfeited		(30,950	)	$	46.31
Vested		(869,312	)	$	44.15
Balance, September 30, 2018		1,567,885		$	43.13
Balance, January 1, 2017		1,655,073		$	40.95
Granted		841,355		$	42.58
Forfeited		(65,086	)	$	40.80
Vested		(483,811	)	$	45.42
Balance, September 30, 2017		1,947,531		$	40.54

In connection with shares of restricted Class A common stock that vested during the nine month periods ended September 30, 2018 and 2017, the Company satisfied its minimum statutory tax withholding requirements in lieu of delivering 290,321 and 147,775 shares of Class A common stock during such respective nine month periods. Accordingly, 578,991 and 336,036 shares of Class A common stock held by the Company were delivered during the nine month periods ended September 30, 2018 and 2017, respectively.

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LAZARD LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(UNAUDITED)

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

The restricted stock awards include a cash dividend participation right equivalent to dividends paid on Class A common stock during the period, which will vest concurrently with the underlying restricted stock award. At September 30, 2018, estimated unrecognized restricted stock expense was approximately $24,463, with such expense to be recognized over a weighted average period of approximately 0.8 years subsequent to September 30, 2018.

PRSUs

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

The following is a summary of activity relating to PRSUs during the nine month periods ended September 30, 2018 and 2017:

	PRSUs			Weighted Average Grant Date Fair Value
Balance, January 1, 2018		1,591,693		$	42.46
Granted (a)		399,869		$	56.80
Vested		(799,402	)	$	46.74
Balance, September 30, 2018		1,192,160		$	44.39
Balance, January 1, 2017		1,590,756		$	40.76
Granted (a)		458,113		$	43.76
Vested		(825,565	)	$	42.27
Balance, September 30, 2017		1,223,304		$	40.86

(a) Represents PRSU awards granted during the relevant year at the target payout level.

In connection with certain PRSUs that vested or were settled during the nine month periods ended September 30, 2018 and 2017, the Company satisfied its minimum statutory tax withholding requirements in lieu of delivering 91,962 and 127,530 shares of Class A common stock during such respective nine month periods. Accordingly, 707,440 and 698,035 shares of Class A common stock held by the Company were delivered during the nine month periods ended September 30, 2018 and 2017, respectively.

Compensation expense recognized for PRSU awards is determined by multiplying the number of shares of Class A common stock underlying such awards that, based on the Company’s estimate, are considered probable of vesting, by the grant date fair value. As of September 30, 2018, the total estimated unrecognized compensation expense was approximately $9,487, and the Company expects to amortize such expense over a weighted-average period of approximately 0.8 years subsequent to September 30, 2018.

LFI and Other Similar Deferred Compensation Arrangements

Commencing in February 2011, the Company granted LFI to eligible employees. In connection with LFI and other similar deferred compensation arrangements, which generally require future service as a condition for vesting, the Company recorded a

32

LAZARD LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(UNAUDITED)

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

prepaid compensation asset and a corresponding compensation liability on the grant date based upon the fair value of the award. The prepaid asset is amortized on a straight-line basis over the applicable vesting periods or requisite service periods (which are generally similar to the comparable periods for RSUs), and is charged to “compensation and benefits” expense within the Company’s condensed consolidated statement of operations. LFI and similar deferred compensation arrangements that do not require future service are expensed immediately. The related compensation liability is accounted for at fair value as a derivative liability, which contemplates the impact of estimated forfeitures, and is adjusted for changes in fair value primarily related to changes in value of the underlying investments.

The following is a summary of activity relating to LFI and other similar deferred compensation arrangements during the nine month periods ended September 30, 2018 and 2017:

	Prepaid Compensation Asset			Compensation Liability
Balance, January 1, 2018	$	60,355		$	182,301
Granted		104,740			104,740
Settled		-			(85,335	)
Forfeited		(1,166	)		(1,767	)
Amortization		(68,145	)		-
Change in fair value related to:
Increase in fair value of underlying investments		-			1,712
Adjustment for estimated forfeitures		-			3,730
Other		(1,489	)		(1,403	)
Balance, September 30, 2018	$	94,295		$	203,978

	Prepaid Compensation Asset			Compensation Liability
Balance, January 1, 2017	$	49,650		$	170,388
Granted		77,580			77,580
Settled		-			(95,718	)
Forfeited		(866	)		(1,647	)
Amortization		(52,702	)		-
Change in fair value related to:
Increase in fair value of underlying investments		-			17,981
Adjustment for estimated forfeitures	-				5,333
Other		1,515			1,833
Balance, September 30, 2017	$	75,177		$	175,750

The amortization of the prepaid compensation asset will generally be recognized over a weighted average period of approximately 0.9 years subsequent to September 30, 2018.

The following is a summary of the impact of LFI and other similar deferred compensation arrangements on “compensation and benefits” expense within the accompanying condensed consolidated statements of operations for the three month and nine month periods ended September 30, 2018 and 2017:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Amortization, net of forfeitures	$	19,145	$	15,961	$	71,274	$	57,254
Change in the fair value of underlying investments		3,647		4,875		1,712		17,981
Total	$	22,792	$	20,836	$	72,986	$	75,235

33

LAZARD LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(UNAUDITED)

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

14. EMPLOYEE BENEFIT PLANS

The Company provides retirement and other post-retirement benefits to certain of its employees through defined benefit pension plans (the “pension plans”). 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 (see Note 2).

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 and nine month periods ended September 30, 2018 and 2017:

	Three Months Ended September 30,
	2018			2017
Components of Net Periodic Benefit Cost (Credit):
Service cost	$	217		$	373
Interest cost		3,822			4,191
Expected return on plan assets		(7,315	)		(6,295	)
Amortization of:
Prior service cost		-			-
Net actuarial loss (gain)		1,213			1,285
Net periodic benefit cost (credit)	$	(2,063	)	$	(446	)

	Nine Months Ended September 30,
	2018			2017
Components of Net Periodic Benefit Cost (Credit):
Service cost	$	670		$	1,048
Interest cost		11,861			12,258
Expected return on plan assets		(22,681	)		(18,855	)
Amortization of:
Prior service cost		-			30
Net actuarial loss (gain)		3,736			4,169
Net periodic benefit cost (credit)	$	(6,414	)	$	(1,350	)

15. INCOME TAXES

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

On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Act”) was enacted. The Tax Act significantly revises the U.S. corporate income tax system by, among other changes, lowering the corporate income tax rate from 35% to 21%, implementing a partial territorial tax system and imposing a one-time repatriation tax on the deemed repatriated earnings of foreign subsidiaries. The Tax Act also includes several provisions that may limit the benefit of the tax rate reduction, such as restricting the deductibility of interest expense and other corporate business expenses. The Tax Act further includes anti-base erosion provisions such as the base erosion and anti-abuse tax and tax on global intangible low-taxed income.

34

LAZARD LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(UNAUDITED)

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

As a result of the reduction of the U.S. federal corporate tax rate to 21%, the Company was required to remeasure its deferred tax assets and liabilities at the new federal income tax rate of 21% based on the balances that existed on the date of the enactment of the Tax Act. The lower corporate tax rate resulted in a reduction of our net deferred tax assets by approximately $420,000 in the year ended December 31, 2017. See also Note 17 for the impact of the Tax Act on the tax receivable agreement obligation.

The Tax Act also requires companies to pay a one-time repatriation tax on previously unremitted earnings of certain non-U.S. corporate subsidiaries. Most of the Company’s operations outside the U.S. are conducted in “pass-through” entities for U.S. income tax purposes, and, as a result, the deemed repatriation transition tax does not apply to these pass-through entities or their earnings. The Company instead provides for U.S. income taxes on a current basis for those earnings. The Company also conducts operations outside the U.S. through foreign corporate subsidiaries, and the Company recorded a provisional amount ofdeferred tax expense in the year ended December 31, 2017 related to the one-time repatriation tax on the foreign earnings of those corporate subsidiaries.

In accordance with the guidance provided by Staff Accounting Bulletin No. 118, the Company has recognized the provisional tax impact related to the one-time deemed repatriation tax on certain foreign earnings and the remeasurement of our deferred tax assets. The impact of the Tax Act on the Company may differ from these provisional estimates, due to, among other items, the issuance of additional regulatory guidance, our interpretations of the provisions of the Tax Act, changes to certain estimates and amounts related to the earnings and profits of certain subsidiaries and the filing of our tax returns. We will recognize any changes to the provisional amounts as we refine our estimates. We expect to complete our analysis of the provisional items, including the one-time repatriation tax, in the fourth quarter of 2018.

The Company recorded income tax provisions of $29,956 and $105,684 for the three month and nine month periods ended September 30, 2018, respectively, and $32,742 and $124,109 for the three month and nine month periods ended September 30, 2017, respectively, representing effective tax rates of 21.6%, 20.2%, 22.7% and 26.6%, respectively. The difference between the U.S. federal statutory rate of 21.0% and 35.0% for 2018 and 2017, respectively, and the effective tax rates reflected above principally relates to (i) taxes payable to foreign jurisdictions that are not offset against U.S. income taxes, (ii) foreign source income (loss) not subject to U.S. income taxes (including interest on intercompany financings), (iii) change in the U.S. federal valuation allowance affecting the provision for income taxes, (iv) excess net tax benefit for share-based incentive compensation, and (v) U.S. state and local taxes, which are incremental to the U.S. federal statutory tax rate.

On January 1, 2017, the Company adopted new accounting guidance on share-based incentive compensation. As a result of the adoption of this new guidance, the Company recognized excess tax benefits of $32,287 and $9,053 from the vesting of share-based incentive compensation in the provision for income taxes in the condensed consolidated statements of operations for the nine month periods ended September 30, 2018 and 2017, respectively. The Company also recorded deferred tax assets of $81,544, net of a valuation allowance of $12,090, as of January 1, 2017, for previously unrecognized excess tax benefits (including tax benefits from dividends or dividend equivalents) on share-based incentive compensation, with an offsetting adjustment to retained earnings.

16. NET INCOME PER SHARE OF CLASS A COMMON STOCK

The Company’s basic and diluted net income per share calculations for the three month and nine month periods ended September 30, 2018 and 2017 are computed as described below.

Basic Net Income Per Share

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

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

Diluted Net Income Per Share

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

35

LAZARD LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(UNAUDITED)

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

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

The calculations of the Company’s basic and diluted net income per share and weighted average shares outstanding for the three month and nine month periods ended September 30, 2018 and 2017 are presented below:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Net income attributable to Lazard Ltd - basic	$	107,074	$	109,210	$	413,729	$	337,141
Net income attributable to Lazard Ltd - diluted	$	107,074	$	109,210	$	413,729	$	337,141
Weighted average number of shares of Class A common    stock outstanding		119,197,949		120,987,607		119,647,775		121,868,223
Add - adjustment for shares of Class A common stock    issuable on a non-contingent basis		258,567		255,991		249,851		274,080
Weighted average number of shares of Class A common    stock outstanding - basic		119,456,516		121,243,598		119,897,626		122,142,303
Add - dilutive effect, as applicable, of:
Weighted average number of incremental shares of Class A    common stock issuable from share-based    incentive compensation		10,403,212		11,150,066		10,852,766		10,265,248
Weighted average number of shares of Class A common stock    outstanding - diluted		129,859,728		132,393,664		130,750,392		132,407,551
Net income attributable to Lazard Ltd per share of Class    A common stock:
Basic	$	0.90	$	0.90	$	3.45	$	2.76
Diluted	$	0.82	$	0.82	$	3.16	$	2.55

17. RELATED PARTIES

Sponsored Funds

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 $158,425 and $510,414 for the three month and nine month periods ended September 30, 2018, respectively, and $163,767 and $471,727 for the three month and nine month periods ended September 30, 2017, respectively, and are included in “asset management fees” on the condensed consolidated statements of operations. Of such amounts, $69,430 and $69,107 remained as receivables at September 30, 2018 and December 31, 2017, respectively, and are included in “fees receivable” on the condensed consolidated statements of financial condition.

Tax Receivable Agreement

The Second Amended and Restated Tax Receivable Agreement, dated as of October 26, 2015 (the “Amended and Restated Tax Receivable Agreement”), between Lazard and LTBP Trust, a Delaware statutory trust (the “Trust”), provides for the payment by our subsidiaries to the Trust of (i) approximately 45% of the amount of cash savings, if any, in U.S. federal, state and local income tax or franchise tax that we actually realize as a result of certain increases in tax basis and of certain other tax benefits related to the Amended and Restated Tax Receivable Agreement, and (ii) an amount that we currently expect will approximate 85% of the cash tax savings that may arise from tax benefits attributable to payments under the Amended and Restated Tax Receivable Agreement. Our subsidiaries expect to benefit from the balance of cash savings, if any, in income tax that our subsidiaries realize. Any amount paid by our subsidiaries to the Trust will generally be distributed to the owners of the Trust, who include certain of our executive officers, in proportion to their beneficial interests in the Trust.

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LAZARD LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(UNAUDITED)

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

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

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

As described in Note 15, the Tax Act reduced the U.S. corporate tax rate from 35% to 21%, which required the Company to remeasure the tax receivable agreement obligation. Pursuant to the change in the U.S. corporate tax rate, in 2017, the Company reduced the tax receivable agreement obligation by $202,546. The cumulative liability relating to our obligations under the Amended and Restated Tax Receivable Agreement as of September 30, 2018 and December 31, 2017 was $277,163 and $310,275, respectively, and is recorded in “tax receivable agreement obligation” on the condensed consolidated statements of financial condition. The balance at September 30, 2018 reflects payments made under the Amended and Restated Tax Receivable Agreement in the nine months ended September 30, 2018 of $33,112.

Other

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

18. REGULATORY AUTHORITIES

LFNY is a U.S. registered broker-dealer and is subject to the net capital requirements of Rule 15c3-1 under the Exchange Act. Under the basic method permitted by this rule, the minimum required net capital, as defined, is a specified fixed percentage (6 ²/₃%) of total aggregate indebtedness recorded in LFNY’s Financial and Operational Combined Uniform Single (“FOCUS”) report filed with the Financial Industry Regulatory Authority (“FINRA”), or $100, whichever is greater. In addition, the ratio of aggregate indebtedness (as defined) to net capital may not exceed 15:1. At September 30, 2018, LFNY’s regulatory net capital was $71,698, which exceeded the minimum requirement by $69,461. LFNY’s aggregate indebtedness to net capital ratio was 0.47:1 as of September 30, 2018.

Certain U.K. subsidiaries of the Company, including LCL, Lazard Fund Managers Limited and Lazard Asset Management Limited (collectively, the “U.K. Subsidiaries”) are regulated by the Financial Conduct Authority. At September 30, 2018, the aggregate regulatory net capital of the U.K. Subsidiaries was $165,474, which exceeded the minimum requirement by $145,285.

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 September 30, 2018, the consolidated regulatory net capital of CFLF was $129,777, which exceeded the minimum requirement set for regulatory capital levels by $69,918. 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 June 30, 2018, the regulatory net capital of the combined European

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LAZARD LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(UNAUDITED)

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

regulated group was $197,797, which exceeded the minimum requirement set for regulatory capital levels by $94,827. Additionally, the combined European regulated group, together with our European Financial Advisory entities, is required to perform an annual risk assessment and provide certain other information on a periodic basis, including financial reports and information relating to financial performance, balance sheet data and capital structure.

Certain other U.S. and non-U.S. subsidiaries are subject to various capital adequacy requirements promulgated by various regulatory and exchange authorities in the countries in which they operate. At September 30, 2018, for those subsidiaries with regulatory capital requirements, their aggregate net capital was $148,447, which exceeded the minimum required capital by $120,949.

At September 30, 2018, 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.

19. SEGMENT INFORMATION

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

The Company’s segment information for the three month and nine month periods ended September 30, 2018 and 2017 is prepared using the following methodology:

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

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

• Segment assets are based on those directly associated with each segment, and include an allocation of certain assets relating to various segments, based on the most relevant measures applicable, including headcount, square footage and other factors.

The Company allocates investment gains and losses, 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.

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LAZARD LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(UNAUDITED)

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

Management evaluates segment results based on net revenue and operating income (loss) and believes that the following information provides a reasonable representation of each segment’s contribution with respect to net revenue, operating income (loss) and total assets:

		Three Months Ended						Nine Months Ended
		September 30,						September 30,
		2018			2017			2018			2017
Financial Advisory	Net Revenue	$	310,418		$	305,890		$	1,141,628		$	1,052,584
	Operating Expenses		250,651			245,465			893,524			821,935
	Operating Income	$	59,767		$	60,425		$	248,104		$	230,649
Asset Management	Net Revenue	$	325,240		$	320,487		$	1,032,111		$	913,728
	Operating Expenses		211,564			217,233			670,794			621,885
	Operating Income	$	113,676		$	103,254		$	361,317		$	291,843
Corporate	Net Revenue	$	(9,177	)	$	(1,518	)	$	(34,622	)	$	(809	)
	Operating Expenses		25,585			17,949			50,350			54,773
	Operating Loss	$	(34,762	)	$	(19,467	)	$	(84,972	)	$	(55,582	)
Total	Net Revenue	$	626,481		$	624,859		$	2,139,117		$	1,965,503
	Operating Expenses		487,800			480,647			1,614,668			1,498,593
	Operating Income	$	138,681		$	144,212		$	524,449		$	466,910

	As Of
	September 30, 2018		December 31, 2017
Total Assets
Financial Advisory	$	876,289	$	843,142
Asset Management		696,400		756,398
Corporate		3,372,089		3,329,137
Total	$	4,944,778	$	4,928,677

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

The following discussion should be read in conjunction with Lazard Ltd’s condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q (the “Form 10-Q”), as well as Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) included in our Annual Report on Form 10-K for the year ended December 31, 2017 (the “Form 10-K”). All references to “2018,” “2017,” “third quarter,” “first nine months” or “the period” refer to, as the context requires, the three month and nine month periods ended September 30, 2018 and September 30, 2017.

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

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 are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements. These factors include, but are not limited to, those discussed in our Form 10-K under the caption “Risk Factors,” including the following:

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

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

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

• losses due to unidentified or unanticipated risks;

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

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

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

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

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

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

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

• ability to offset stockholder dilution through share repurchases;

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

• strategies and investment policies;

• financing plans and the availability of short-term borrowing;

• competitive position;

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

• potential growth opportunities available to our businesses;

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• recruitment and retention of our managing directors and employees;

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

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

• likelihood of success and impact of litigation;

• expected tax rates, including effective tax rates;

• changes in interest and tax rates;

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

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

• changes in foreign currency exchange rates;

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

• effects of competition on our business; and

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

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

Business Summary

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 43 cities in key business and financial centers across 27 countries throughout North America, Europe, Asia, Australia, the Middle East, and Central and South America.

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

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

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

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

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

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

Our consolidated net revenue was derived from the following segments:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Financial Advisory		49	%		49	%		54	%		54	%
Asset Management		52			51			48			46
Corporate		(1	)		-			(2	)		-
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, (ii) a fund targeting significant noncontrolling-stake investments in established private companies and (iii) until the second quarter of 2017, a mezzanine fund (the “Mezzanine Fund”), which invests in mezzanine debt of a diversified selection of small- to mid-cap European companies. We sold our interest in the Mezzanine Fund in May 2017. We also make investments to seed our Asset Management strategies.

Business Environment and Outlook

Economic and global financial market conditions can materially affect 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.

Equity market indices for developed markets at September 30, 2018 generally increased as compared to such indices at September 30, 2017. Emerging markets equity indices at September 30, 2018 generally decreased as compared to such indices at December 31, 2017. In the global M&A markets during the first nine months of 2018, the number of all completed M&A transactions decreased as compared to the same period in the prior year, as did the subset of such transactions involving values greater than $500 million. During the same time, the value of all announced M&A transactions, including the subset of such transactions involving values greater than $500 million, increased. Additionally, with respect to announced M&A transactions, the number of all transactions decreased in the first nine months of 2018 as compared to 2017, while the number of announced transactions with values greater than $500 million increased in the first nine months of 2018 as compared to 2017. During the first nine months of 2018, global restructuring activity, as measured by the number of corporate defaults, decreased as compared to the first nine months of 2017.

On an ongoing basis, regional, macroeconomic and geopolitical factors, including trade policy and regional tax and regulatory reform, may impact our business. The U.S. economy remains healthy. The European economy’s growth rate has slowed, but it is still growing. Emerging markets as a group have experienced significant capital markets volatility. Borrowing costs remain low for companies with strong credit ratings, but interest rates have recently risen.

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

Financial Advisory—The fundamentals for continued M&A activity appear to remain in place, and we believe our Financial Advisory business is in a strong competitive position. Demand continues for expert, independent strategic advice that can be levered across geographies and our range of advisory capabilities. The global scale and breadth of our Financial Advisory business allows us to advise on large, complex cross-border transactions and restructuring transactions across a variety of industries. In addition, we believe our businesses throughout the emerging markets position us for growth in these markets, while enhancing our relationships with, and the services that we can provide to, clients in other economies. We continue to invest for growth in our Financial Advisory business and to hire talented senior professionals selectively.

Asset Management—In the short to intermediate term, we expect most investor demand will come from defined benefit and defined contribution plans in the developed economies because of their sheer scope and size. Over the longer term, and depending

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upon local market conditions, we would expect an increasing share of our AUM to come from the developing economies in Asia and the Middle East, as their retirement systems evolve and individual wealth is increasingly deployed in the financial markets. Given our diversified investment platform and our ability to provide investment solutions for a global mix of clients, we believe we are positioned to benefit from growth that may occur in the asset management industry. We are continually developing and seeding new investment strategies that extend our existing platforms and assessing potential product acquisitions or other inorganic growth opportunities. Recent examples of growth initiatives include the following investment strategies: various Quantitative Equity strategies, various Multi-Asset strategies, a Real Assets strategy, an International Value strategy, a Global Equity Franchise strategy, and a Market Neutral Quantitative Equity strategy.

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

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

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

Financial Advisory

As reflected in the following table, which sets forth global M&A industry statistics, the number of all completed transactions, including completed transactions with values greater than $500 million, decreased in the first nine months of 2018 as compared to 2017. With respect to announced M&A transactions, the value of all transactions, including the value of announced transactions involving values greater than $500 million, increased in the first nine months of 2018 as compared to 2017. Additionally, with respect to announced M&A transactions, the number of all transactions decreased in the first nine months of 2018 as compared to 2017, while the number of announced transactions with values greater than $500 million increased in the first nine months of 2018 as compared to 2017.

	Three Months Ended							Nine Months Ended
	September 30,							September 30,
	2018		2017		% Incr / (Decr)			2018		2017		% Incr / (Decr)
	($ in billions)
Completed M&A Transactions:
All deals:
Value	$	740	$	959		(23	)%	$	2,718	$	2,783		(2	)%
Number		6,478		10,495		(38	)%		24,343		31,051		(22	)%
Deals Greater than $500 million:
Value	$	569	$	728		(22	)%	$	2,139	$	2,099		2	%
Number		271		324		(16	)%		877		922		(5	)%
Announced M&A Transactions:
All deals:
Value	$	872	$	910		(4	)%	$	3,295	$	2,494		32	%
Number		6,966		10,396		(33	)%		25,359		30,922		(18	)%
Deals Greater than $500 million:
Value	$	668	$	680		(2	)%	$	2,654	$	1,820		46	%
Number		310		331		(6	)%		1,020		910		12	%

Source: Dealogic as of October 5, 2018.

Global restructuring activity during the first nine months of 2018, as measured by the number of corporate defaults, decreased as compared to the first nine months of 2017. The number of defaulting issuers decreased to 56 in the first nine months of 2018, according to Moody’s Investors Service, Inc., as compared to 71 in the first nine months of 2017.

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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. Beginning in the first quarter of 2018, we ceased separately reporting Restructuring revenue within our Financial Advisory segment, because our Financial Advisory practices have become highly integrated, and our assignments with clients often incorporate several disciplines. We believe that presenting unified Financial Advisory revenue is a more accurate representation of our Financial Advisory business.

Asset Management

The percentage change in major equity market indices at September 30, 2018, as compared to such indices at June 30, 2018, December 31, 2017, and at September 30, 2017, is shown in the table below.

	Percentage Changes September 30, 2018 vs.
	June 30, 2018			December 31, 2017			September 30, 2017
MSCI World Index		5	%		6	%		12	%
Euro Stoxx		-			-			(2	)%
MSCI Emerging Market		(1	)%		(7	)%		-
S&P 500		8	%		11	%		18	%

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. Our AUM at September 30, 2018 decreased 4% versus AUM at December 31, 2017, primarily due to foreign exchange depreciation, net outflows and market depreciation. Average AUM for the three month period ended September 30, 2018 was 3% higher than the average AUM for the three month period ended September 30, 2017. Average AUM for the first nine months of 2018 increased 12% as compared to the first nine months of 2017.

Financial Statement Overview

Net Revenue

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

Lazard’s Asset Management segment principally includes Lazard Asset Management LLC (together with its subsidiaries, “LAM”), Lazard Frères Gestion SAS (“LFG”) and Edgewater. Asset Management net revenue is derived from fees for investment management and advisory services provided to clients. As noted above, the main driver of Asset Management net revenue is the level and product mix of AUM, which is generally influenced by the performance of the global equity markets and, to a lesser extent, fixed income markets as well as Lazard’s investment performance, which impacts its ability to successfully attract and retain assets. As a result, fluctuations (including timing thereof) in financial markets and client asset inflows and outflows have a direct effect on Asset Management net revenue and operating income. Asset Management fees are generally based on the level of AUM measured daily, monthly or quarterly, and an increase or reduction in AUM, due to market price fluctuations, currency fluctuations, changes in product mix, or net client asset flows will result in a corresponding increase or decrease in management fees. The majority of our investment advisory contracts are generally terminable at any time or on notice of 30 days or less. Institutional and individual clients, and firms with which we have strategic alliances, can terminate their relationship with us, reduce the aggregate amount of AUM or shift their

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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 investments classified as “trading”, as well as due to changes in interest and currency exchange rates and in the levels of cash, investments and indebtedness.

Although Corporate segment net revenue during 2018 is not significant compared to Lazard’s net revenue, total assets in the Corporate segment represented 68% of Lazard’s consolidated total assets as of September 30, 2018, which are attributable to cash and cash equivalents, investments in debt and equity securities, interests in alternative investment, debt, equity and private equity funds, deferred tax assets and certain assets associated with LFB.

Operating Expenses

The majority of Lazard’s operating expenses relate to compensation and benefits for managing directors and employees. Our compensation and benefits expense includes (i) salaries and benefits, (ii) amortization of the relevant portion of previously granted deferred incentive compensation awards, including (a) share-based incentive compensation under the Lazard Ltd 2018 Incentive Compensation Plan (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.

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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 the most appropriate measures to assess the annual cost of compensation and provide the most meaningful basis for comparison of compensation and benefits expense between present, historical and future years. “Awarded compensation and benefits expense” for a given year is calculated using “adjusted compensation and benefits expense,” also a non-GAAP measure, as modified by the following items:

• we deduct amortization expense recorded for accounting principles generally accepted in the United States of America (“U.S. GAAP”) purposes in the fiscal year associated with deferred incentive compensation awards;

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

(i) the deferred incentive compensation awards granted in the year-end compensation process with respect to the fiscal year (e.g., deferred incentive compensation awards granted in 2018 related to the 2017 year-end compensation process), including Performance-based restricted stock unit (“PRSU”) awards (based on the target payout level);

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

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

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

Compensation and benefits expense is the largest component of our operating expenses. We seek to maintain discipline with respect to compensation, including the rate at which we award deferred compensation. Our goal is to maintain a ratio of awarded compensation and benefits expense to operating revenue and a ratio of adjusted compensation and benefits expense to operating revenue over the cycle in the mid- to high-50s percentage range, which compares to 55.6% and 55.8%, respectively, for the year ended December 31, 2017. 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. In 2018, non-compensation expense included expenses related to a partial redemption of the Company’s 4.25% senior notes due 2020 (the “2020 Notes”) (see Note 10 of Notes to Condensed Consolidated Financial Statements).

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

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

Provision for Income Taxes

Lazard Ltd, through its subsidiaries, is subject to U.S. federal income taxes on all of its U.S. operating income, as well as on the portion of non-U.S. income attributable to its U.S. subsidiaries. In addition, Lazard Ltd, through its subsidiaries, is subject to state and local taxes on its income apportioned to various state and local jurisdictions. Outside the U.S., Lazard Group operates principally through subsidiary corporations that are subject to local income taxes in foreign jurisdictions. Lazard Group is also subject to Unincorporated Business Tax (“UBT”) attributable to its operations apportioned to New York City (see Note 15 of Notes to Condensed Consolidated Financial Statements for additional information).

On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Act”) was enacted. The Tax Act significantly revises the U.S. corporate income tax system by, among other changes, lowering the corporate income tax rate from 35% to 21%, implementing a partial territorial tax system and imposing a one-time repatriation tax on the deemed repatriated earnings of foreign subsidiaries. The Tax Act also includes several provisions that may limit the benefit of the tax rate reduction, such as restricting the deductibility of

46

interest expense and other corporate business expenses. The Tax Act further includes anti-base erosion provisions such as the base erosion and anti-abuse tax and tax on global intangible low-taxed income. The reduced corporate tax rate required us to remeasure our deferred tax assets and liabilities, and tax receivable agreement obligation.

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

Noncontrolling Interests

Noncontrolling interests primarily consist of amounts related to Edgewater’s management vehicles that the Company is deemed to control but not own. See Note 12 of Notes to Condensed Consolidated Financial Statements for information regarding the Company’s noncontrolling interests.

Consolidated Results of Operations

Lazard’s condensed consolidated financial statements are presented in U.S. Dollars. Many of our non-U.S. subsidiaries have a functional currency (i.e., the currency in which operational activities are primarily conducted) that is other than the U.S. Dollar, generally the currency of the country in which the subsidiaries are domiciled. Such subsidiaries’ assets and liabilities are translated into U.S. Dollars using exchange rates as of the respective balance sheet date, while revenue and expenses are translated at average exchange rates during the respective periods based on the daily closing exchange rates. Adjustments that result from translating amounts from a subsidiary’s functional currency are reported as a component of stockholders’ equity. Foreign currency remeasurement gains and losses on transactions in non-functional currencies are included in the condensed consolidated statements of operations.

A portion of our net revenue is derived from transactions that are denominated in currencies other than the U.S. Dollar. Net revenue for the three month period ended September 30, 2018 was negatively impacted, and net revenue for the nine month period ended September 30, 2018 was positively impacted, by exchange rate movements, in each case in comparison to the relevant prior year period. The majority of the impact to net revenue, in both periods, was offset by the impact of the exchange rate movements 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						Nine Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
	($ in thousands)
Net Revenue	$	626,481		$	624,859		$	2,139,117		$	1,965,503
Operating Expenses:
Compensation and benefits		343,987			361,787			1,165,193			1,138,200
Non-compensation		149,664			118,688			462,943			355,390
Amortization and other acquisition-related (benefits) costs		(5,851	)		172			(13,468	)		5,003
Total operating expenses		487,800			480,647			1,614,668			1,498,593
Operating Income		138,681			144,212			524,449			466,910
Provision for income taxes		29,956			32,742			105,684			124,109
Net Income		108,725			111,470			418,765			342,801
Less - Net Income Attributable to Noncontrolling Interests		1,651			2,260			5,036			5,660
Net Income Attributable to Lazard Ltd	$	107,074		$	109,210		$	413,729		$	337,141
Operating Income, as a % of net revenue		22.1	%		23.1	%		24.5	%		23.8	%

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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 provide the most meaningful basis for comparison between present, historical and future periods, as described above.

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
	($ in thousands)
Operating Revenue:
Net revenue	$	626,481		$	624,859		$	2,139,117		$	1,965,503
Adjustments:
Interest expense (a)		13,168			12,380			38,305			37,477
Distribution fees, reimbursable deal costs and bad debt    expense (b)		(25,880	)		-			(90,112	)		-
Revenue related to noncontrolling interests (c)		(4,512	)		(5,039	)		(15,351	)		(13,079	)
(Gains) losses on investments pertaining to LFI (d)		(3,647	)		(4,875	)		(1,712	)		(17,981	)
Operating revenue	$	605,610		$	627,325		$	2,070,247		$	1,971,920

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

(b) Represents certain distribution fees and reimbursable deal costs paid to third parties for which an equal amount is excluded from both operating revenue and non-compensation expense, respectively, and excludes bad debt expense, which represents fees that are deemed uncollectible.

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

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

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
	($ in thousands)
Adjusted Compensation and Benefits Expense:
Total compensation and benefits expense	$	343,987		$	361,787		$	1,165,193		$	1,138,200
Adjustments:
Noncontrolling interests (a)		(2,410	)		(2,473	)		(8,283	)		(6,084	)
(Charges) credits pertaining to LFI (b)		(3,647	)		(4,875	)		(1,712	)		(17,981	)
Adjusted compensation and benefits expense	$	337,930		$	354,439		$	1,155,198		$	1,114,135
Adjusted compensation and benefits expense, as a % of operating    revenue		55.8	%		56.5	%		55.8	%		56.5	%

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

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

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	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
	($ in thousands)
Adjusted Non-Compensation Expense:
Total non-compensation expense	$	149,664		$	118,688		$	462,943		$	355,390
Adjustments:
Expenses associated with ERP system implementation (a)		(7,659	)		(6,530	)		(20,489	)		(15,391	)
Expenses related to office space reorganization (b)		-			(1,412	)		(2,425	)		(4,573	)
Distribution fees, reimbursable deal costs and bad debt    expense (c)		(25,880	)		-			(90,112	)		-
Charges pertaining to senior debt refinancing (d)		(6,523	)					(6,523	)
Noncontrolling interests (e)		(272	)		(239	)		(1,502	)		(1,338	)
Adjusted non-compensation expense	$	109,330		$	110,507		$	341,892		$	334,088
Adjusted non-compensation expense, as a % of operating  revenue		18.1	%		17.6	%		16.5	%		16.9	%

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

(b) Represents incremental rent expense and lease abandonment costs related to office space reorganization.

(c) Represents certain distribution fees and reimbursable deal costs paid to third parties for which an equal amount is excluded from both operating revenue and non-compensation expense, respectively, and excludes bad debt expense, which represents fees that are deemed uncollectible.

(d) In 2018, charges pertaining to the partial redemption of the Company’s 2020 Notes are excluded because of the non-operating nature of such transaction. See “—Liquidity and Capital Resources—Financing Activities” below.

(e) Expenses related to the consolidation of noncontrolling interests are excluded because the Company has no economic interest in such amounts.

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
	($ in thousands)
Earnings From Operations:
Operating revenue	$	605,610		$	627,325		$	2,070,247		$	1,971,920
Deduct:
Adjusted compensation and benefits expense		(337,930	)		(354,439	)		(1,155,198	)		(1,114,135	)
Adjusted non-compensation expense		(109,330	)		(110,507	)		(341,892	)		(334,088	)
Earnings from operations	$	158,350		$	162,379		$	573,157		$	523,697
Earnings from operations, as a % of operating revenue		26.1	%		25.9	%		27.7	%		26.6	%

Headcount information is set forth below:

	As of
	September 30, 2018		December 31, 2017		September 30, 2017
Headcount:
Managing Directors:
Financial Advisory		169		152		153
Asset Management		101		96		98
Corporate (a)		17		22		21
Total Managing Directors		287		270		272
Other Employees:
Business segment professionals		1,364		1,304		1,320
All other professionals and support staff		1,326		1,269		1,269
Total		2,977		2,843		2,861

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(a) Reduction in 2018 relates to a realignment of certain headcount from Corporate to the Financial Advisory and Asset Management segments.

Operating Results

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.

Three Months Ended September 30, 2018 versus September 30, 2017

The Company reported net income attributable to Lazard Ltd of $107 million, as compared to net income of $109 million in the 2017 period.

Net revenue increased $2 million, with operating revenue decreasing $22 million, or 3%, as compared to the 2017 period. Net revenue in the 2018 period reflects the adoption of new revenue recognition guidance (see Note 2 of Notes to Condensed Consolidated Financial Statements). Fee revenue from investment banking and other advisory activities increased $4 million, or 1%, as compared to the 2017 period. Asset management fees, including incentive fees, increased $11 million, or 4%, as compared to the 2017 period. In the aggregate, interest income, other revenue and interest expense decreased $13 million, or 77%, as compared to the 2017 period, primarily due to lower income attributable to investments.

Compensation and benefits expense decreased $18 million, or 5%, as compared to the 2017 period, primarily associated with decreased operating revenue.

Adjusted compensation and benefits expense (which excludes certain items and which we believe allows for improved comparability between periods, as described above) was $338 million, a decrease of $17 million, or 5%, as compared to $354 million in the 2017 period. The ratio of adjusted compensation and benefits expense to operating revenue was 55.8% for the 2018 period, as compared to 56.5% for the 2017 period and 55.8% for full-year 2017.

Non-compensation expense increased $31 million, or 26%, as compared to the 2017 period, primarily due to the impact of the new revenue recognition guidance discussed above and a charge relating to the redemption of a portion of the 2020 Notes in 2018. Adjusted non-compensation expense, which excludes such items, as well as costs related to the ERP system implementation, office space reorganization and noncontrolling interests, decreased $1 million, or 1%, as compared to the 2017 period. The ratio of adjusted non-compensation expense to operating revenue was 18.1% for the 2018 period, as compared to 17.6% for the 2017 period.

Amortization and other acquisition-related (benefits) costs reflects a benefit of $6 million in the 2018 period, as compared to costs of $0.2 million in the 2017 period, primarily due to the change in the fair market value of contingent consideration.

Operating income decreased $6 million, or 4%, as compared to the 2017 period.

Earnings from operations decreased $4 million, or 2%, as compared to the 2017 period, and, as a percentage of operating revenue, was 26.1%, as compared to 25.9% in the 2017 period.

The provision for income taxes reflects an effective tax rate of 21.6%, as compared to 22.7% for the 2017 period. The decrease in the effective tax rate is primarily due to the impact of various provisions under the Tax Act.

Net income attributable to noncontrolling interests decreased $1 million as compared to the 2017 period.

Nine Months Ended September 30, 2018 versus September 30, 2017

The Company reported net income attributable to Lazard Ltd of $414 million, as compared to net income of $337 million in the 2017 period.

Net revenue increased $174 million, or 9%, with operating revenue increasing $98 million, or 5%, as compared to the 2017 period. Net revenue in the 2018 period reflects the adoption of new revenue recognition guidance (see Note 2 of Notes to Condensed Consolidated Financial Statements). Fee revenue from investment banking and other advisory activities increased $89 million, or 8%, as compared to the 2017 period, primarily due to an increase in M&A Advisory revenue, partially offset by a decrease in

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Restructuring revenue. Asset management fees, including incentive fees, increased $118 million, or 14%, as compared to the 2017 period, primarily due to an increase in average AUM, as well as the impact of the new revenue recognition guidance discussed above. In the aggregate, interest income, other revenue and interest expense decreased $33 million, or 73%, as compared to the 2017 period, primarily due to lower income attributable to investments held in connection with LFI.

Compensation and benefits expense increased $27 million, or 2%, as compared to the 2017 period, primarily associated with increased operating revenue.

Adjusted compensation and benefits expense (which excludes certain items and which we believe allows for improved comparability between periods, as described above) was $1,155 million, an increase of $41 million, or 4%, as compared to $1,114 million in the 2017 period. The ratio of adjusted compensation and benefits expense to operating revenue was 55.8% for the 2018 period, as compared to 56.5% for the 2017 period and 55.8% for full-year 2017.

Non-compensation expense increased $108 million, or 30%, as compared to the 2017 period, primarily due to the impact of the new revenue recognition guidance discussed above, expenses associated with the ERP system implementation and a charge relating to the redemption of a portion of the 2020 Notes in 2018. Adjusted non-compensation expense, which excludes such items, as well as costs related to office space reorganization and noncontrolling interests, increased $8 million, or 2%, as compared to the 2017 period. The ratio of adjusted non-compensation expense to operating revenue was 16.5% for the 2018 period, as compared to 16.9% in the 2017 period.

Amortization and other acquisition-related (benefits) costs reflects a benefit of $13 million in the 2018 period, as compared to costs of $5 million in the 2017 period, primarily due to the change in the fair market value of contingent consideration.

Operating income increased $58 million, or 12%, as compared to the 2017 period.

Earnings from operations increased $49 million, or 9%, as compared to the 2017 period, and, as a percentage of operating revenue, was 27.7%, as compared to 26.6% in the 2017 period.

The provision for income taxes reflects an effective tax rate of 20.2%, as compared to 26.6% for the 2017 period. The decrease in the effective tax rate is primarily due to (i) an increase in excess net tax benefits related to share-based incentive compensation and (ii) the impact of various provisions under the Tax Act.

Net income attributable to noncontrolling interests remained substantially unchanged as compared to the 2017 period.

Business Segments

The following is a discussion of net revenue and operating income for the Company’s segments: Financial Advisory, Asset Management and Corporate. Each segment’s operating expenses include (i) compensation and benefits expenses that are incurred directly in 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.

Financial Advisory

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

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
	($ in thousands)
Net Revenue	$	310,418		$	305,890		$	1,141,628		$	1,052,584
Operating Expenses		250,651			245,465			893,524			821,935
Operating Income	$	59,767		$	60,425		$	248,104		$	230,649
Operating Income, as a % of net revenue		19.3	%		19.8	%		21.7	%		21.9	%

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

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Lazard Statistics:
Number of clients with fees greater than $1 million:
Financial Advisory		80			77			218			229
Percentage of total Financial Advisory net revenue from top 10    clients		29	%		37	%		18	%		27	%
Number of M&A transactions completed with values greater than    $500 million (a)		18			17			65			66

(a) Source: Dealogic as of October 5, 2018.

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. 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						Nine Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Americas		52	%		61	%		54	%		59	%
EMEA		44			34			41			36
Asia Pacific		4			5			5			5
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 Results of Operations

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.

Three Months Ended September 30, 2018 versus September 30, 2017

Financial Advisory net revenue increased $5 million, or 1%, as compared to the 2017 period. Clients which in the aggregate represented a significant portion of our Financial Advisory revenue in the 2018 period included Accruent, CDH Investments, Cirsa, Claire’s Stores, Daily Mail & General Trust, Dalmore Capital and Equitix, Quality Care Properties, Servier and Sky.

Operating expenses increased $5 million, or 2%, as compared to the 2017 period.

Financial Advisory operating income of $60 million was substantially unchanged as compared to the 2017 period and, as a percentage of net revenue, was 19.3%, as compared to 19.8% in the 2017 period.

Nine Months Ended September 30, 2018 versus September 30, 2017

Financial Advisory net revenue increased $89 million, or 8%, as compared to the 2017 period. The increase in Financial Advisory revenue was primarily a result of an increase in the number of transactions involving fees greater than $5 million, as compared to the 2017 period.

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Operating expenses increased 72 million, or 9%, as compared to the 2017 period, primarily due to an increase in compensation associated with increased operating revenue.

Financial Advisory operating income was $248 million, an increase of $17 million, or 8%, as compared to operating income of $231 million in the 2017 period and, as a percentage of net revenue, was 21.7%, as compared to 21.9% in the 2017 period.

Asset Management

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

	As of
	September 30, 2018		December 31, 2017
	($ in millions)
AUM by Asset Class:
Equity:
Emerging Markets	$	45,449	$	52,349
Global		46,088		43,663
Local		42,524		42,650
Multi-Regional		66,945		70,696
Total Equity		201,006		209,358
Fixed Income:
Emerging Markets		15,964		17,320
Global		4,745		4,109
Local		6,226		4,497
Multi-Regional		7,455		9,154
Total Fixed Income		34,390		35,080
Alternative Investments		2,650		2,846
Private Equity		1,453		1,478
Cash Management		588		697
Total AUM	$	240,087	$	249,459

Total AUM at September 30, 2018 was $240 billion, a decrease of $9 billion, or 4%, as compared to total AUM of $249 billion at December 31, 2017, primarily due to foreign exchange depreciation, net outflows and market depreciation. Average AUM for the three month and nine month periods ended September 30, 2018 increased 3% and 12%, respectively, as compared to the three month and nine month periods ended September 30, 2017, respectively.

As of September 30, 2018, approximately 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, compared to approximately 88% as of December 31, 2017. As of September 30, 2018, approximately 13% of our AUM was managed on behalf of individual client relationships, which are principally with family offices and individuals, compared to 12% at December 31, 2017.

As of September 30, 2018, AUM with foreign currency exposure represented approximately 70% of our total AUM as compared to 74% at December 31, 2017. 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.

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The following is a summary of changes in AUM by asset class for the three month and nine month periods ended September 30, 2018 and 2017:

	Three Months Ended September 30, 2018
	AUM Beginning Balance		Inflows (a)		Outflows (a)			Net Flows			Market Value Appreciation/ (Depreciation)			Foreign Exchange Appreciation/ (Depreciation)			AUM Ending Balance
	($ in millions)
Equity	$	198,841	$	7,141	$	(7,704	)	$	(563	)	$	4,310		$	(1,582	)	$	201,006
Fixed Income		34,065		1,538		(1,112	)		426			204			(305	)		34,390
Other		4,970		108		(259	)		(151	)		(106	)		(22	)		4,691
Total	$	237,876	$	8,787	$	(9,075	)	$	(288	)	$	4,408		$	(1,909	)	$	240,087

(a) Inflows in the Equity asset class were primarily attributable to the Global, Emerging Markets and Multi-Regional platforms, and inflows in the Fixed Income asset class were primarily attributable to the Global and Local platforms. Outflows in the Equity asset class were primarily attributable to the Emerging Markets, Multi-Regional and Global platforms and outflows in the Fixed Income asset class were primarily attributable to the Emerging Markets and Local platforms.

	Nine Months Ended September 30, 2018
	AUM Beginning Balance		Inflows (a)		Outflows (a)			Net Flows			Market Value Appreciation/ (Depreciation)			Foreign Exchange Appreciation/ (Depreciation)			AUM Ending Balance
	($ in millions)
Equity	$	209,358	$	24,849	$	(28,157	)	$	(3,308	)	$	1,008		$	(6,052	)	$	201,006
Fixed Income		35,080		5,593		(3,805	)		1,788			(1,095	)		(1,383	)		34,390
Other		5,021		413		(620	)		(207	)		(129	)		6			4,691
Total	$	249,459	$	30,855	$	(32,582	)	$	(1,727	)	$	(216	)	$	(7,429	)	$	240,087

(a) Inflows in the Equity asset class were primarily attributable to the Global, Emerging Markets and Multi-Regional platforms, and inflows in the Fixed Income asset class were primarily attributable to the Emerging Markets, Global and Local platforms. Outflows in the Equity asset class were primarily attributable to the Multi-Regional, Emerging Markets and Global equity platforms, and outflows in the Fixed Income asset class were primarily attributable to the Emerging Markets, Global and Multi-Regional platforms.

	Three Months Ended September 30, 2017
	AUM Beginning Balance		Inflows		Outflows			Net Flows			Market Value Appreciation/ (Depreciation)		Foreign Exchange Appreciation/ (Depreciation)		AUM Ending Balance
	($ in millions)
Equity	$	188,091	$	8,177	$	(8,769	)	$	(592	)	$	8,931	$	2,091	$	198,521
Fixed Income		33,165		1,478		(856	)		622			762		488		35,037
Other		4,505		139		(154	)		(15	)		23		54		4,567
Total	$	225,761	$	9,794	$	(9,779	)	$	15		$	9,716	$	2,633	$	238,125

	Nine Months Ended September 30, 2017
	AUM Beginning Balance		Inflows		Outflows			Net Flows			Market Value Appreciation/ (Depreciation)		Foreign Exchange Appreciation/ (Depreciation)		AUM Ending Balance
	($ in millions)
Equity	$	162,841	$	28,468	$	(25,505	)	$	2,963		$	25,360	$	7,357	$	198,521
Fixed Income		31,155		4,293		(4,544	)		(251	)		2,457		1,676		35,037
Other		3,914		918		(677	)		241			252		160		4,567
Total	$	197,910	$	33,679	$	(30,726	)	$	2,953		$	28,069	$	9,193	$	238,125

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As of October 19, 2018, AUM was $229.7 billion, a $10.4 billion decrease since September 30, 2018. The decrease in AUM was due to market depreciation of $9.7 billion, foreign exchange depreciation of $0.6 billion and net outflows of $0.1 billion.

Average AUM for the three month and nine month periods ended September 30, 2018 and 2017 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				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
	($ in millions)
Average AUM by Asset Class:
Equity	$	200,864	$	195,131	$	206,629	$	183,630
Fixed Income		34,223		33,907		35,440		32,750
Alternative Investments		2,689		2,881		2,796		2,760
Private Equity		1,453		1,458		1,457		1,342
Cash Management		668		431		598		358
Total Average AUM	$	239,897	$	233,808	$	246,920	$	220,840

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

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
	($ in thousands)
Net Revenue	$	325,240		$	320,487		$	1,032,111		$	913,728
Operating Expenses		211,564			217,233			670,794			621,885
Operating Income	$	113,676		$	103,254		$	361,317		$	291,843
Operating Income, as a % of net revenue		35.0	%		32.2	%		35.0	%		31.9	%

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						Nine Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Americas		56	%		59	%		56	%		58	%
EMEA		34			31			34			32
Asia Pacific		10			10			10			10
Total		100	%		100	%		100	%		100	%

Asset Management Results of Operations

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.

Three Months Ended September 30, 2018 versus September 30, 2017

Asset Management net revenue increased $5 million, or 1%, as compared to the 2017 period. Management fees and other revenue was $323 million, an increase of $6 million, or 2%, as compared to $317 million in the 2017 period, primarily due to the impact of the new revenue recognition guidance discussed above, partially offset by a change in the mix of average AUM. Incentive fees were $2 million, a decrease of $1 million as compared to $3 million in the 2017 period.

Operating expenses decreased $6 million, or 3%, as compared to the 2017 period, primarily due to a decrease in compensation and benefits expense, partially offset by the impact of the new revenue recognition guidance.

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Asset Management operating income was $114 million, an increase of $10 million, or 10%, as compared to operating income of $103 million in the 2017 period and, as a percentage of net revenue, was 35.0%, as compared to 32.2% in the 2017 period.

Nine Months Ended September 30, 2018 versus September 30, 2017

Asset Management net revenue increased $118 million, or 13%, as compared to the 2017 period. Management fees and other revenue was $1,012 million, an increase of $125 million, or 14%, as compared to $887 million in the 2017 period, primarily due to an increase in average AUM, as well as the impact of the new revenue recognition guidance discussed above. Incentive fees were $20 million, a decrease of $7 million as compared to $27 million in the 2017 period.

Operating expenses increased $49 million, or 8%, as compared to the 2017 period, primarily due to the impact of the new revenue recognition guidance.

Asset Management operating income was $361 million, an increase of $69 million, or 24%, as compared to operating income of $292 million in the 2017 period and, as a percentage of net revenue, was 35.0%, as compared to 31.9% in the 2017 period.

Corporate

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

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
	($ in thousands)
Interest Income	$	2,628		$	1,721		$	6,685		$	3,665
Interest Expense		(13,316	)		(13,000	)		(38,931	)		(38,514	)
Net Interest (Expense)		(10,688	)		(11,279	)		(32,246	)		(34,849	)
Other Revenue (Expense)		1,511			9,761			(2,376	)		34,040
Net Revenue (Expense)		(9,177	)		(1,518	)		(34,622	)		(809	)
Operating Expenses		25,585			17,949			50,350			54,773
Operating Income (Loss)	$	(34,762	)	$	(19,467	)	$	(84,972	)	$	(55,582	)

Corporate Results of Operations

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.

Three Months Ended September 30, 2018 versus September 30, 2017

Net interest expense remained substantially unchanged as compared to the 2017.

Other revenue decreased $8 million as compared to the 2017 period, primarily due to lower income in the 2018 period attributable to investments.

Operating expenses increased $8 million as compared to the 2017 period, primarily due to a charge of $7 million relating to the redemption of a portion of the 2020 Notes in 2018.

Nine Months Ended September 30, 2018 versus September 30, 2017

Net interest expense decreased $3 million, or 7%, as compared to the 2017 period.

Other revenue decreased $36 million as compared to the 2017 period, primarily due to lower income in the 2018 period attributable to investments held in connection with LFI.

Operating expenses decreased $4 million as compared to the 2017 period, primarily due to a decrease in compensation and benefits expense, including a decrease in charges pertaining to LFI, partially offset by a charge of $7 million relating to the redemption of a portion of the 2020 Notes in 2018.

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Cash Flows

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 shareholders, payments of incentive compensation to managing directors and employees and purchases of Class A common stock. Cash flows also were affected in 2018 by Lazard Group’s issuance of $500 million aggregate principal amount of its 4.50% senior notes maturing in 2028 (the “2028 Notes”) and the redemption of a portion 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. The Company also paid a special dividend in February 2018 and February 2017.

Summary of Cash Flows:

	Nine Months Ended
	September 30,
	2018			2017
	($ in millions)
Cash Provided By (Used In):
Operating activities:
Net income	$	419		$	343
Adjustments to reconcile net income to net cash provided by operating activities (a)		340			364
Other operating activities (b)		(468	)		(1	)
Net cash provided by operating activities		291			706
Investing activities		(38	)		(15	)
Financing activities (c)		(456	)		(484	)
Effect of exchange rate changes		(66	)		128
Net (Decrease) Increase  in Cash and Cash Equivalents and Restricted Cash		(269	)		335
Cash and Cash Equivalents and Restricted Cash (d):
Beginning of Period		2,455			1,607
End of Period	$	2,186		$	1,942

(a) Consists of the following:

	Nine Months Ended
	September 30,
	2018			2017
	($ in millions)
Depreciation and amortization of property	$	25		$	23
Amortization of deferred expenses and share-based incentive compensation		294			285
Deferred tax provision		27			51
Amortization and other acquisition-related (benefits) costs		(13	)		5
Loss on extinguishment of debt		7			-
Total	$	340		$	364

(b) Includes net changes in operating assets and liabilities.

(c) Consists primarily of purchases of shares of Class A common stock, tax withholdings related to the settlement of vested restricted stock units (“RSUs”), vested restricted stock awards and vested PRSUs, Class A common stock dividends, changes in customer deposits, distributions to noncontrolling interest holders and activity relating to borrowings (including in 2018, the redemption of a portion of the 2020 Notes and issuance of the 2028 Notes).

(d) Cash and cash equivalents and restricted cash consists of cash and cash equivalents, deposits with banks and short-term investments and cash deposited with clearing organizations and other segregated cash.

See Note 2 of Notes to Condensed Consolidated Financial Statements for a discussion of new accounting guidance impacting the Condensed Consolidated Statements of Cash Flows.

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Liquidity and Capital Resources

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

Operating Activities

Net revenue, operating income and cash receipts fluctuate significantly between periods. 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 our 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 nine months of 2018, as reflected on the condensed consolidated statements of financial condition, both “deposits with banks and short-term investments” and “deposits and other customer payables” increased as compared to December 31, 2017, due to a higher 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 stockholders’ 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, credit lines, principal investment commitments, interest and principal payments on debt, capital expenditures, dividend payments, purchases of shares of Class A common stock and matters relating to liquidity and to compliance with regulatory net capital requirements. At September 30, 2018, Lazard had approximately $1,132 million of cash, with such amount including approximately $605 million held at Lazard’s operations outside the U.S. Since Lazard provides for U.S. income taxes on substantially all of its unrepatriated foreign earnings, we expect that no material amount of additional U.S. income taxes would be recognized upon receipt of dividends or distributions of such earnings from our foreign operations. Although the Tax Act generally requires companies to pay a one-time repatriation tax on previously unremitted foreign earnings of certain non-U.S. corporate subsidiaries, most of the Company’s operations outside the U.S. are conducted in “pass-through” entities for U.S. income tax purposes, and the Company has already provided for U.S. income taxes on their earnings. As a result, the Company expects that no material amount of additional U.S. income taxes would be recognized as a result of the Tax Act’s one-time repatriation tax or otherwise upon the receipt of cash dividends or distributions of such earnings from our foreign operations.

We maintain lines of credit in excess of anticipated liquidity requirements. As of September 30, 2018, Lazard had approximately $169 million in unused lines of credit available to it, including a $150 million, five-year, senior revolving credit facility with a group of lenders that expires in September 2020 (the “Amended and Restated Credit Agreement”) (see “—Financing Activities” below) and unused lines of credit available to LFB of approximately $17 million (at September 30, 2018 exchange rates).

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.

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Financing Activities

The table below sets forth our corporate indebtedness as of September 30, 2018 and December 31, 2017. 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
		September 30, 2018						December 31, 2017
Senior Debt	Maturity Date	Principal		Unamortized Debt Costs		Carrying Value		Principal		Unamortized Debt Costs		Carrying Value
		($ in millions)
Lazard Group 2020 Senior Notes	2020	$	250.0	$	1.0	$	249.0	$	500.0	$	2.6	$	497.4
Lazard Group 2025 Senior Notes	2025		400.0		3.0		397.0		400.0		3.4		396.6
Lazard Group 2027 Senior Notes	2027		300.0		3.3		296.7		300.0		3.6		296.4
Lazard Group 2028 Senior Notes	2028		500.0		9.0		491.0		-		-		-
		$	1,450.0	$	16.3	$	1,433.7	$	1,200.0	$	9.6	$	1,190.4

During September 2018, Lazard Group completed an offering of the 2028 Notes. Lazard Group used a portion of the net proceeds of the 2028 Notes to redeem or otherwise retire $250 million of the 2020 Notes.

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, along with the use of our credit lines as needed, should be sufficient for us to fund our current obligations for the next 12 months.

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 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 September 30, 2018, Lazard Group was in compliance with such ratios, with its Consolidated Leverage Ratio being 1.32 to 1.00 and its Consolidated Interest Coverage Ratio being 21.20 to 1.00. In any event, no amounts were outstanding under the Amended and Restated Credit Agreement as of September 30, 2018.

In addition, the Amended and Restated Credit Agreement, indenture and supplemental indentures relating to Lazard Group’s senior notes contain certain other covenants (none of which relate to financial condition), events of default and other customary provisions. At September 30, 2018, 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.

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Stockholders’ Equity

At September 30, 2018, total stockholders’ equity was $1,122 million, as compared to $1,259 million at December 31, 2017, including $1,067 million and $1,200 million attributable to Lazard Ltd on the respective dates. The net activity in stockholders’ equity during the nine month period ended September 30, 2018 is reflected in the table below (in millions of dollars):

Stockholders’ Equity - January 1, 2018	$	1,259
Increase (decrease) due to:
Net income		419
Other comprehensive loss		(28	)
Amortization of share-based incentive compensation		218
Purchase of Class A common stock		(307	)
Settlement of share-based incentive compensation (a)		(117	)
Class A common stock dividends		(308	)
Distributions to noncontrolling interests, net		(10	)
Other - net		(4	)
Stockholders’ Equity - September 30, 2018	$	1,122

(a) The tax withholding portion of share-based compensation is settled in cash, not shares.

The Board of Directors of Lazard has issued a series of authorizations to repurchase Class A common stock, which help offset the dilutive effect of our share-based incentive compensation plans. During a given year the Company 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 the Company purchases shares in connection with this annual objective may vary from quarter to quarter due to a variety of factors. Purchases with respect to such program are set forth in the table below:

Nine Months Ended September 30:	Number of Shares Purchased		Average Price Per Share
2017		5,838,520	$	43.25
2018		5,797,789	$	52.88

As of September 30, 2018, a total of $242 million of share repurchase authorization remained available under the Company’s share repurchase program, which will expire on December 31, 2020.

In addition, on October 24, 2018, the Board of Directors of Lazard authorized the repurchase of up to $300 million of additional shares of Class A common stock, which authorization will expire on December 31, 2020, bringing the total share repurchase authorization as of October 24, 2018 to approximately $524 million.

During the nine month period ended September 30, 2018, the Company had in place trading plans under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended, pursuant to which it effected stock repurchases in the open market.

The Company plans to continue to deploy excess cash and may do so in a variety of ways, which may include repurchasing outstanding shares of Class A common stock, paying dividends to stockholders and repurchasing its outstanding debt.

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

Regulatory Capital

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 18 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.

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Contractual Obligations

The following table sets forth information relating to Lazard’s contractual obligations as of September 30, 2018:

	Contractual Obligations Payment Due by Period
	Total		Less than 1 Year		1-3 Years		3-5 Years		More than 5 Years
	($ in thousands)
Senior debt (including interest) (a)	$	1,890,792	$	59,000	$	362,688	$	96,750	$	1,372,354
Operating leases (exclusive of $28,796 of    committed sublease income) (b)		893,383		83,945		172,991		135,592		500,855
Investment capital funding commitments (c)		8,632		8,632		-		-		-
Total (d)	$	2,792,807	$	151,577	$	535,679	$	232,342	$	1,873,209

(a) During September 2018, Lazard Group completed an offering of $500,000 aggregate principal amount of the 2028 Notes. Interest on the 2028 Notes is payable semi-annually on March 19 and September 19 of each year, beginning March 19, 2019. Lazard Group used a portion of the net proceeds of the 2028 Notes to redeem or otherwise retire $250,000 of the 2020 Notes. See Note 10 of Notes to Condensed Consolidated Financial Statements.

(b) In August 2018, the Company entered into a lease agreement for additional office facilities. Operating lease commitments in the table above include the impact of the new lease agreement. See Note 11 of Notes to Condensed Consolidated Financial Statements.

(c) Unfunded commitments to private equity investments consolidated but not owned by Lazard of $15,257 are excluded. Such commitments are required to be funded by capital contributions from noncontrolling interest holders. See Note 6 of Notes to Condensed Consolidated Financial Statements. These amounts are generally due on demand and therefore are presented in the “less than 1 year” category.

(d) The table above excludes contingent obligations, given the inability to make a reasonably reliable estimate of the timing of the amounts of any such payments. The table above also excludes any possible payments for uncertain tax positions and payments pursuant to the Company’s tax receivable agreement, given that the actual amount and timing of payments under the tax receivable agreement could differ materially from our estimates. At September 30, 2018, a tax receivable agreement obligation of $277,163 was recorded on the condensed consolidated statements of financial condition. See “Critical Accounting Policies and Estimates—Income Taxes” below. See also Notes 11, 13, 14, 15 and 17 of Notes to Condensed Consolidated Financial Statements regarding information in connection with commitments, incentive plans, employee benefit plans, income taxes and tax receivable agreement obligations, respectively.

Critical Accounting Policies and Estimates

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 (including the impact on the tax receivable agreement obligation), 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.

Revenue Recognition

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:

• a contract with a client has been identified;

• the performance obligations in the contract have been identified;

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• the fee or other transaction price has been determined;

• the fee or other transaction price has been allocated to each performance obligation in the contract; and

• the Company has satisfied the applicable performance obligation.

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 by 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.

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. However, some Financial Advisory transactions include specific contractual payment terms that may vary from one month to four years (as is the case for our Private Capital Advisory fees) following the invoice date or may be subject to court approval (as is the case with restructuring assignments 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 in excess of 180 days are fully provided for unless there is evidence that the balance is collectible. Asset Management fees are deemed past due and fully provided for when such receivables are outstanding 12 months after the invoice date. Notwithstanding our policy for receivables past due, we specifically reserve against exposures relating to Financial Advisory and Asset Management fees where we determine receivables are impaired.

On January 1, 2018, the Company adopted new revenue recognition guidance. See Notes 2 and 3 of Notes to Consolidated Financial Statements.

Compensation Liabilities

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.

Income Taxes

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, 2017, on a consolidated basis, we recorded gross deferred tax assets of approximately $790.7 million, with such amount partially offset by a valuation allowance of approximately $61.5 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.

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

• future reversals of existing taxable temporary differences;

• future taxable income exclusive of reversing temporary differences and carryforwards;

• taxable income in prior carryback years; and

• tax-planning strategies.

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

• nature, frequency, magnitude and duration of any past losses and current operating results;

• duration of statutory carryforward periods;

• historical experience with tax attributes expiring unused; and

• near-term and medium-term financial outlook.

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 $61.5 million of deferred tax assets held by these entities as of December 31, 2017.

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.

On January 1, 2017, we adopted new accounting guidance on share-based incentive compensation. As a result of the adoption of this new guidance, we recognized excess tax benefits of $32.3 million and $9.1 million from the vesting of share-based incentive compensation in the provision for income taxes in the condensed consolidated statements of operations for the nine month periods ended September 30, 2018 and 2017, respectively. Upon adoption of the new guidance, we also recorded deferred tax assets of $81.5 million, net of a valuation allowance of $12.1 million, for previously unrecognized excess tax benefits (including tax benefits from dividends or dividend equivalents) on share-based incentive compensation, with an offsetting adjustment to retained earnings. See Note 15 of Notes to Condensed Consolidated Financial Statements for further information on the adoption of this new guidance. The new guidance has since January 1, 2017 affected, and the Company expects that in future periods the new guidance will affect, the provision for income taxes for the delivery of stock under share-based incentive compensation arrangements, as well as the effective tax rate in the relevant periods, which could be material to the condensed consolidated statements of operations and the classification of cash flows in the relevant periods.

On December 22, 2017, the Tax Act was enacted. The Tax Act significantly revises the U.S. corporate income tax system by, among other changes, lowering the corporate income tax rate from 35% to 21%, implementing a partial territorial tax system and imposing a one-time repatriation tax on the deemed repatriated earnings of foreign subsidiaries. The Tax Act also includes several provisions that may limit the benefit of the tax rate reduction, such as restricting the deductibility of interest expense and other corporate business expenses. The Tax Act further includes anti-base erosion provisions such as the base erosion and anti-abuse tax and tax on global intangible low-taxed income.

Lazard is a holding company that is treated as a publicly traded partnership for U.S. tax purposes, and our U.S. and certain foreign subsidiaries will be impacted by the Tax Act. While the Tax Act is currently expected to be moderately positive for us, the

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reduced corporate tax rate required us to remeasure our deferred tax assets and the liability associated with our tax receivable agreement. See Notes 15 and 17 of Notes to Condensed Consolidated Financial Statements for additional information regarding the impact of the Tax Act on us.

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 15 of Notes to Condensed Consolidated Financial Statements for additional information related to income taxes.

Amended and Restated Tax Receivable Agreement

During the period ended June 30, 2015, we released substantially all of our valuation allowance against deferred tax assets. As a result, we accrued a corresponding liability during the period ended June 30, 2015 for amounts relating to the Second Amended and Restated Tax Receivable Agreement, dated as of October 26, 2015 (the “Amended and Restated Tax Receivable Agreement”), between Lazard and LTBP Trust (the “Trust”). See Note 17 of Notes to Condensed Consolidated Financial Statements for additional information regarding the Amended and Restated Tax Receivable Agreement.

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

The cumulative liability relating to our obligations under the Amended and Restated Tax Receivable Agreement recorded as of September 30, 2018 and December 31, 2017 was $277 million and $310 million, respectively, which includes the impact of the Tax Act as of both periods and is recorded in “tax receivable agreement obligation” on the condensed consolidated statements of financial condition.

Investments

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.

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Data relating to investments is set forth below:

	September 30, 2018		December 31, 2017
	($ in thousands)
Seed investments by asset class:
Equities (a)	$	87,383	$	111,067
Fixed income		9,619		15,215
Alternative investments		7,284		8,392
Total seed investments		104,286		134,674
Other investments owned:
Private equity (b)		44,300		57,457
Interest-bearing deposits		519		556
Fixed income and other (c)		226,041		23,780
Total other investments owned		270,860		81,793
Subtotal		375,146		216,467
Add:
Private equity consolidated, not owned (d)		15,375		19,222
LFI (e)		219,074		191,497
Total investments	$	609,595	$	427,186

(a) At September 30, 2018 and December 31, 2017, seed investments in directly owned equity securities were invested as follows:

	September 30, 2018			December 31, 2017
Percentage invested in:
Financials		24	%		27	%
Consumer		27			25
Industrial		14			15
Technology		15			11
Other		20			22
Total		100	%		100	%

(b) Private equity investments include investments related to certain legacy businesses and co-investments in private equity funds managed by our Asset Management business. Co-investments owned were $28 million and $36 million as of September 30, 2018 and December 31, 2017, respectively.

(c) At September 30, 2018, includes investment in U.S. Treasury securities of approximately $199 million with original maturities of greater than three months and less than one year.

(d) Represents private equity investments that are consolidated but owned by noncontrolling interests, and therefore do not subject the Company to market or credit risk. The applicable noncontrolling interests are presented within “stockholders’ equity” on the condensed consolidated statements of financial condition.

(e) Composed of investments held in connection with LFI and other similar deferred compensation arrangements. The market risk associated with such investments is equally offset by the market risk associated with the derivative liability with respect to awards expected to vest. The Company is subject to market risk associated with any portion of such investments that employees may forfeit. See “—Risk Management—Risks Related to Derivatives” for risk management information relating to derivatives.  LFI investments held in entities in which the Company maintained a controlling interest were $53 million in five entities as of September 30, 2018, as compared to $53 million in two entities as of December 31, 2017.

At September 30, 2018 and December 31, 2017, total investments with a fair value of $609 million and $427 million, respectively, included $61 million and $80 million, respectively, or 10% and 19%, 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.

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As of September 30, 2018 and December 31, 2017, the Company held seed investments of approximately $104 million and $135 million, respectively. Seed investments held in entities in which the Company maintained a controlling interest were $30 million in eight entities as of September 30, 2018, as compared to $28 million in eight entities as of December 31, 2017.

As of September 30, 2018 and December 31, 2017, the Company did not consolidate or deconsolidate any seed investment entities or LFI investment entities. As such, 100% of the recorded balance of seed investments and LFI investments as of September 30, 2018 and December 31, 2017 represented the Company’s economic interest in the seed investments. See “—Consolidation of Variable Interest Entities” below for more information on the Company’s policy regarding the consolidation of seed 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.

Assets Under Management

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.

Goodwill

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.

Consolidation

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.

• Voting Interest Entities. VOEs are entities in which (i) the total equity investment at risk is sufficient to enable the entity to finance itself independently and (ii) the equity holders have the obligation to absorb losses, the right to receive residual returns and the right to make decisions about the entity’s activities. Lazard is required to consolidate a VOE if it holds a majority of the voting interest in such VOE.

• Variable Interest Entities. VIEs are entities that lack one or more of the characteristics of a VOE. If Lazard has a variable interest, or a combination of variable interests, in a VIE, it is required to analyze whether it needs to consolidate such VIE. Lazard is required to consolidate a VIE if we are the primary beneficiary having (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses of, or receive benefits from, the VIE that could be potentially significant to the VIE.

Lazard’s involvement with various entities that are VOEs or VIEs primarily arises from 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 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.

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Lazard makes seed investments in certain entities that are considered VOEs and often require consolidation as a result of our investment. The impact of seed 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 seed 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 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.

Risk Management

Investments

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 September 30, 2018 and December 31, 2017, 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 million and $107 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 $0.7 million and $2.0 million in the carrying value of such investments as of September 30, 2018 and December 31, 2017, respectively, including the effect of the hedging transactions.

Interest Rate/Credit Spread Risk—At September 30, 2018 and December 31, 2017, 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 $245 million and $58 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 $1.4 million and $1.3 million in the carrying value of such investments as of September 30, 2018 and December 31, 2017, respectively, including the effect of the hedging transactions.

Foreign Exchange Rate Risk—At September 30, 2018 and December 31, 2017, 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 $45 million and $65 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 $0.0 million and $1.7 million in the carrying value of such investments as of September 30, 2018 and December 31, 2017, 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 September 30, 2018 and December 31, 2017, the Company’s exposure to changes in fair value of such investments was approximately $44 million and $57 million, respectively. The Company estimates that a hypothetical 10% adverse change in fair value would result in a decrease of approximately $4.4 million and $5.7 million in the carrying value of such investments as of September 30, 2018 and December 31, 2017, respectively.

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Risks Related to Receivables

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 September 30, 2018, total receivables amounted to $641 million, net of an allowance for doubtful accounts of $35 million. As of that date, Financial Advisory and Asset Management fees, and customers and other receivables comprised 85% and 15% of total receivables, respectively. At December 31, 2017, total receivables amounted to $572 million, net of an allowance for doubtful accounts of $24 million. As of that date, Financial Advisory and Asset Management fees, and customers and other receivables comprised 85% and 15% of total receivables, respectively. At September 30, 2018 and December 31, 2017, the Company had receivables past due or deemed uncollectible of approximately $38 million and $35 million, 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 both September 30, 2018 and December 31, 2017, customer receivables included $61 million of LFB loans, with such loans being fully collateralized and closely monitored for counterparty creditworthiness.

Credit Concentrations

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

Risks Related to Derivatives

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 $7 million and $4 million at September 30, 2018 and December 31, 2017, respectively, and derivative liabilities, excluding the derivative liability arising from the Company’s obligation pertaining to LFI and other similar deferred compensation arrangements, amounted to $3 million and $16 million at such respective dates.

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 $204 million and $182 million at September 30, 2018 and December 31, 2017, respectively.

Risks Related to Cash and Cash Equivalents and Corporate Indebtedness

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 September 30, 2018, Lazard estimates that its annual operating income relating to cash and cash equivalents would increase by approximately $11 million in the event interest rates were to increase by 1% and decrease by approximately $11 million if rates were to decrease by 1%.

As of September 30, 2018, the Company’s cash and cash equivalents totaled approximately $1,132 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, (iii) in short-term certificates of deposit from such banks and (iv) in short-term U.S. Treasury securities. 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

Operational risk is inherent in all our business 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

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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.

Recent Accounting Developments

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.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Risk Management

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”.

Item 4. Controls and Procedures

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.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

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.

Item 1A. Risk Factors

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, 2017.

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

None.

Issuer Repurchases of Equity Securities

The following table sets forth information regarding Lazard’s purchases of its Class A common stock on a monthly basis during the third quarter of 2018. Share repurchases are recorded on a trade date basis.

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
July 1 – July 31, 2018
Share Repurchase Program (1)		425,263	$	51.03		425,263	$	302.9	million
Employee Transactions (2)		498	$	49.90		-		-
August 1 – August 31, 2018
Share Repurchase Program (1)		900,000	$	50.70		900,000	$	257.3	million
Employee Transactions (2)		1,350	$	49.01		-		-
September 1 – September 30, 2018
Share Repurchase Program (1)		325,000	$	47.60		325,000	$	241.8	million
Employee Transactions (2)		3,641	$	48.14		-		-
Total
Share Repurchase Program (1)		1,650,263	$	50.17		1,650,263	$	241.8	million
Employee Transactions (2)		5,489	$	48.51		-		-

(1) During the nine months ended September 30, 2018 and since 2015, the Board of Directors of Lazard authorized the repurchase of Class A common stock as set forth in the table below.

Date	Repurchase Authorization		Expiration
February 2015	$	150,000	December 31, 2016
January 2016	$	200,000	December 31, 2017
April 2016	$	113,182	December 31, 2017
November 2016	$	236,000	December 31, 2018
October 2017	$	200,000	December 31, 2019
April 2018	$	300,000	December 31, 2020

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In addition, on October 24, 2018, the Board of Directors of Lazard authorized the repurchase of up to $300 million of additional shares of Class A common stock, which authorization will expire on December 31, 2020, bringing the total share repurchase authorization as of October 24, 2018 to approximately $524 million.

A significant portion of the Company’s purchases under the share repurchase program are used to offset a portion of the shares that have been or will be issued under the 2008 Plan and the 2018 Plan. Purchases under the share repurchase program may be made in the open market or through privately negotiated transactions. The rate at which the Company purchases shares in connection with the share repurchase program may vary from quarter to quarter due to a variety of factors. Amounts shown in this line item include repurchases of Class A common stock and exclude the shares of Class A common stock withheld by the Company to meet the minimum statutory tax withholding requirements as described below.

(2) Under the terms of the 2008 Plan and the 2018 Plan, upon the vesting of RSUs, PRSUs, DSUs and delivery of restricted Class A common stock, shares of Class A common stock may be withheld by the Company to meet the minimum statutory tax withholding requirements. During the three month period ended September 30, 2018, the Company satisfied such obligations in lieu of issuing (i) 4,999 shares of Class A common stock upon the vesting or settlement of 61,268 RSUs and PRSUs and (ii) 490 shares of Class A common stock upon the vesting of 21,125 shares of restricted Class A common stock.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

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PART IV

Item 6. Exhibits

3.1	Certificate of Incorporation and Memorandum of Association of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant’s Registration Statement (File No. 333-121407) on Form S-1/A filed on March 21, 2005).
3.2	Certificate of Incorporation on Change of Name of the Registrant (incorporated by reference to Exhibit 3.2 to the Registrant’s Registration Statement (File No. 333-121407) on Form S-1/A filed on March 21, 2005).
3.3	Amended and Restated Bye-Laws of Lazard Ltd (incorporated by reference to Exhibit 3.3 to the Registrant’s Quarterly Report (File No. 001-32492) on Form 10-Q filed on June 16, 2005).
3.4	First Amendment to Amended and Restated Bye-Laws of Lazard Ltd (incorporated by reference to Exhibit 3.4 to the Registrant’s Quarterly Report (File No. 001-32492) on Form 10-Q filed on May 9, 2008).
3.5	Second Amendment to the Amended and Restated Bye-Laws of Lazard Ltd (incorporated by reference to Exhibit 3.5 to the Registrant’s Quarterly Report (File No. 001-32492) on Form 10-Q filed on April 30, 2010).
4.1	Form of Specimen Certificate for Class A common stock (incorporated by reference to Exhibit 4.1 to the Registrant’s Registration Statement (File No. 333-121407) on Form S-1/A filed on April 11, 2005).
4.2	Indenture, dated as of May 10, 2005, by and between Lazard Group LLC and The Bank of New York, as Trustee (incorporated by reference to Exhibit 4.1 to Lazard Group LLC’s Registration Statement (File No. 333-126751) on Form S-4 filed on July 21, 2005).
4.3	Fourth Supplemental Indenture, dated as of June 21, 2007, between Lazard Group LLC and The Bank of New York, as trustee (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K (File No. 001-32492) filed on June 22, 2007).
4.4	Fifth Supplemental Indenture, dated as of November 14, 2013, 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. 001-32492) filed on November 14, 2013).
4.5	Sixth Supplemental Indenture, dated as of February 13, 2015, 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. 001-32492) filed on February 13, 2015).
4.6	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. 001-32492) filed on November 7, 2016).
4.7	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. 001-32492) filed on September 19, 2018.
4.8	Form of Senior Note (included in Exhibits 4.3, 4.4, 4.5, 4.6 and 4.7).
10.1	Amended and Restated Operating Agreement of Lazard Group LLC, dated as of October 26, 2015 (incorporated by reference to Exhibit 10.1 to Registrant’s Quarterly Report (File No. 001-32492) on Form 10-Q filed on October 28, 2015).
10.2	Amendment No.1 to Amended and Restated Operating Agreement of Lazard Group LLC, dated as of October 27, 2016 (incorporated by reference to Exhibit 10.2 to Registrant’s Quarterly Report (File No. 001-32492) on Form 10-Q filed on October 28, 2016).
10.3	Second Amended and Restated Tax Receivable Agreement, dated as of October 26, 2015, by and among Ltd Sub A, Ltd Sub B and LTBP Trust (incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report (File No. 001-32492) on Form 10-Q filed on October 28, 2015).
10.4	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 the Registrant’s Registration Statement (File No. 333-121407) on Form S-1/A filed on February 11, 2005).
10.5	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 10.16 to the Registrant’s Quarterly Report (File No. 001-32492) on Form 10-Q filed on April 29, 2011).

72

10.6*	Lazard Ltd 2005 Equity Incentive Plan (incorporated by reference to Exhibit 10.21 to the Registrant’s Registration Statement (File No. 333-121407) on Form S-1/A filed on May 2, 2005).
10.7*	Lazard Ltd 2008 Incentive Compensation Plan (incorporated by reference to Annex B to the Registrant’s Definitive Proxy Statement on Schedule 14A (File No. 001-32492) filed on March 24, 2008).
10.8*	Lazard Ltd 2016 French Sub-plan (incorporated by reference to Annex B to the Registrant’s Definitive Proxy Statement on Schedule 14A (File No. 001-32492) filed on March 10, 2016).
10.9*	Lazard Ltd 2018 Incentive Compensation Plan (incorporated by reference to Annex B to the Registrant’s Definitive Proxy Statement on Schedule 14A (File No. 001-32492) filed on March 15, 2018).
10.10*	Amended and Restated Agreement relating to Retention and Noncompetition and Other Covenants, dated as of March 9, 2016, by and among the Registrant, Lazard Group LLC and Kenneth M. Jacobs (incorporated by reference to Exhibit 10.9 to the Registrant’s Quarterly Report (File No. 001-32492) on Form 10-Q filed on April 27, 2016).
10.11*	Amended and Restated Agreement relating to Retention and Noncompetition and Other Covenants, dated as of March 9, 2016, by and among the Registrant, Lazard Group LLC and Ashish Bhutani (incorporated by reference to Exhibit 10.10 to the Registrant’s Quarterly Report (File No. 001-32492) on Form 10-Q filed on April 27, 2016).
10.12*	Amended and Restated Agreement relating to Retention and Noncompetition and Other Covenants, dated as of March 9, 2016, by and among the Registrant, Lazard Group LLC and Matthieu Bucaille (incorporated by reference to Exhibit 10.11 to the Registrant’s Quarterly Report (File No. 001-32492) on Form 10-Q filed on April 27, 2016).
10.13*	Amended and Restated Agreement relating to Retention and Noncompetition and Other Covenants, dated as of March 9, 2016, by and among the Registrant, Lazard Group LLC and Scott D. Hoffman (incorporated by reference to Exhibit 10.12 to the Registrant’s Quarterly Report (File No. 001-32492) on Form 10-Q filed on April 27, 2016).
10.14*	Amendment, dated as of October 30, 2017, to Amended and Restated Agreement relating to Retention and Noncompetition and Other Covenants, dated as of March 9, 2016, by and among the Registrant, Lazard Group LLC and Scott D. Hoffman (incorporated by reference to Exhibit 10.14 to the Registrant’s Quarterly Report (File No. 001-324927) on Form 10-Q filed October 31, 2017).
10.15*	Agreement relating to Retention and Noncompetition and Other Covenants, dated as of October 30, 2017, by and among the Registrant, Lazard Group LLC and Evan L. Russo (incorporated by reference to Exhibit 10.15 to the Registrant’s Quarterly Report (File No. 001-324927) on Form 10-Q filed October 31, 2017).
10.16*	Amended and Restated Agreement relating to Retention and Noncompetition and Other Covenants, dated as of March 9, 2016, by and among the Registrant, Lazard Group LLC and Alexander F. Stern (incorporated by reference to Exhibit 10.13 to the Registrant’s Quarterly Report (File No. 001-32492) on Form 10-Q filed on April 27, 2016).
10.17*	Form of Award Letter for Annual Grant of Deferred Stock Units to Non-Executive Directors (incorporated by reference to Exhibit 99.1 to the Registrant’s Current Report on Form 8-K (File No. 001-32492) filed on September 8, 2005).
10.18*	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 the Registrant’s Annual Report (File No. 001-32492) on Form 10-K filed on March 2, 2009).
10.19*	Form of Agreement evidencing a grant of Deferred Cash Award to Executive Officers (incorporated by reference to Exhibit 10.42 to the Registrant’s Annual Report (File No. 001-32492) on Form 10-K filed on March 2, 2009).
10.20*	Directors’ Fee Deferral Unit Plan (incorporated by reference to Exhibit 10.39 to the Registrant’s Quarterly Report (File No. 001-32492) on Form 10-Q filed on May 11, 2006).
10.21	Amended and Restated Credit Agreement, dated as of September 25, 2015, among Lazard Group LLC, the Banks from time to time parties thereto, and Citibank, N.A., as Administrative Agent (incorporated by reference to Exhibit 10.27 to the Registrant’s Quarterly Report (File No. 001-32492) on Form 10-Q filed on October 28, 2015).
10.22*	Form of Agreement evidencing a grant of Lazard Fund Interests to Named Executive Officers (incorporated by reference to Exhibit 10.55 to the Registrant’s Quarterly Report (File No. 001-32492) on Form 10-Q filed on May 1, 2013).
10.23*	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 10.55 to the Registrant’s Quarterly Report (File No. 001-32492) on Form 10-Q filed May 6, 2014).
10.24*	Agreement between the Company 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 10.56 to the Registrant’s Quarterly Report (File No. 001-32492) on Form 10-Q filed on May 6, 2014).

73

10.25*	Form of Agreement evidencing a grant of Restricted Stock under the 2008 Incentive Compensation Plan (incorporated by reference to Exhibit 10.55 to the Registrant’s Quarterly Report (File No. 001-32492) on Form 10-Q filed on April 30, 2010).
10.26*	Form of Agreement evidencing a grant of Lazard Fund Interests (incorporated by reference to Exhibit 10.55 to the Registrant’s Quarterly Report (File No. 001-32492) on Form 10-Q filed on April 29, 2011).
12.1	Computation of Ratio of Earnings to Fixed Charges.
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.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.DEF	XBRL Taxonomy Extension Definition Linkbase
101.LAB	XBRL Taxonomy Extension Label Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase

* Management contract or compensatory plan or arrangement.

74

SIGNATURES

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.

Dated: October 29, 2018

LAZARD LTD
By:	/s/    Evan L. Russo
Name:	Evan L. Russo
Title:	Chief Financial Officer
By:	/s/    Dominick Ragone
Name:	Dominick Ragone
Title:	Chief Accounting Officer

75

EX-12.1

EXHIBIT 12.1

LAZARD LTD

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (a)

The following table sets forth the ratio of earnings to fixed charges for Lazard Ltd and its subsidiaries on a consolidated basis.

	Nine Months
	Ended			Year Ended December 31,
	September 30, 2018			2017			2016			2015				2014		2013
	(dollars in thousands)
Operating income (loss)	$	524,449		$	825,446		$	517,461		$	(16,620	)		$	519,465	$	216,807
Add—Fixed charges		60,986			77,716			73,654			75,109				86,066		103,668
Operating income before fixed charges	$	585,435		$	903,162		$	591,115		$	58,489			$	605,531	$	320,475
Fixed Charges:
Interest (b)	$	41,416		$	53,518		$	50,292		$	51,159			$	62,570	$	79,381
Other (c)		19,570			24,198			23,362			23,950				23,496		24,287
Total fixed charges	$	60,986		$	77,716		$	73,654		$	75,109			$	86,066	$	103,668
Ratio of earnings to fixed charges		9.60	(d)		11.62	(e)		8.03	(f)		-		(g)		7.04	3.09		(h)
Deficiency in the coverage of operating income   before fixed charges to total fixed charges										$	16,620

Notes (dollars in thousands):

(a) For purposes of computing the ratio of earnings to fixed charges:

• earnings for the periods presented represent income before income taxes and fixed charges, and

• fixed charges represent the interest expense and the portion of rental expense which represents an appropriate interest factor.

(b) The Company’s policy is to include interest expense on unrecognized tax benefits in income tax expense. Accordingly, such interest expense is not included in the computations of the ratio of earnings to fixed charges.

(c) Other fixed charges consist of the interest factor in rentals.

(d) Operating income for the nine months ended September 30, 2018  is presented after giving effect to (i) $16,020 of acquisition-related benefits, (ii) $20,489ofexpenses associated with the ERP system implementation, (iii) $2,425 of expenses related to office space reorganization, (iv) a charge of $6,523 relating to the redemption of a portion of the 4.25% senior notes due November 2020 (the “2020 Notes”) and (v) $295 excess interest expense due to the period of time between the issuance of the 2028 Notes and the settlement of the redemption of the 2020 Notes. Excluding the impact of such items, the ratio of earnings to fixed charges would have been 9.96.

(e) Operating income for the year ended December 31, 2017 is presented after giving effect to (i) $6,582 of acquisition-related costs, (ii) $25,308 of expenses associated with the ERP system implementation, (iii) $11,354 of expenses related to office space reorganization and (iv) $202,546 relating to the benefit pursuant to the tax receivable agreement.  Excluding the impact of such items, the ratio of earnings to fixed charges would have been 9.56.

(f) Operating income for the year ended December 31, 2016 is presented after giving effect to (i) a charge of $3,148 associated with the redemption of the remaining portion of the 6.85% senior notes due June 2017 (the “2017 Notes”), (ii) $599 excess interest expense due to the period of time between the issuance of the 2027 Notes and the settlement of the redemption of the 2017 Notes, (iii) $34,092 of acquisition-related costs and (iv) $12,668 gain on the acquisition of MBA Lazard (which resulted from the increase in the fair value of the Company’s investment in MBA Lazard prior to the acquisition). Excluding the impact of such items, the ratio of earnings to fixed charges would have been 8.43.

(g) Operating income for the year ended December 31, 2015 is presented after giving effect to (i) a charge of $60,219 associated with the redemption of $450 million of the 2017 Notes, (ii) $2,655 excess interest expense due to the period of time between the issuance of the 2025 Notes and the settlement of the redemption of the 2017 Notes, (iii) $12,203 relating to a private equity revenue adjustment and (iv) $542,270 relating to the provision pursuant to the tax receivable agreement. Excluding the impact of such items, the ratio of earnings to fixed charges would have been 8.95. The Company’s net income for the year ended December 31, 2015, which was affected by a significant income tax benefit during such period, was $992,932.

(h) Operating income for the year ended December 31, 2013 is presented after giving effect to a charge of (i) $64,703 associated with the cost saving initiatives announced by the Company in October 2012, (ii) $54,087 pertaining to the refinancing of the 7.125% senior notes due May 2015 and the issuance of the 2020 Notes and (iii) $12,203 relating to private equity incentive compensation. Excluding the impact of such items, the ratio of earnings to fixed charges would have been 4.35.

EX-31.1

EXHIBIT 31.1

I, Kenneth M. Jacobs, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended September 30, 2018 of Lazard Ltd (the “Registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: October 29, 2018

/s/ Kenneth M. Jacobs

Kenneth M. Jacobs

Chairman and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

I, Evan L. Russo, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended September 30, 2018 of Lazard Ltd (the “Registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: October 29, 2018

/s/ Evan L. Russo

Evan L. Russo

Chief Financial Officer

EX-32.1

EXHIBIT 32.1

October 29, 2018

Securities and Exchange Commission

100 F Street, NE

Washington, DC 20549

Pursuant to 18 U.S.C. § 1350, the undersigned officer of Lazard Ltd (the “Registrant”) hereby certifies that the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2018 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

/s/    Kenneth M. Jacobs

Kenneth M. Jacobs

Chairman and Chief Executive Officer

The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Report or as a separate disclosure document.

EX-32.2

EXHIBIT 32.2

October 29, 2018

Securities and Exchange Commission

100 F Street, NE

Washington, DC 20549

Pursuant to 18 U.S.C. § 1350, the undersigned officer of Lazard Ltd (the “Registrant”) hereby certifies that the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2018 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

/s/    Evan L. Russo

Evan L. Russo

Chief Financial Officer

The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Report or as a separate disclosure document.

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2018	Oct. 19, 2018
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q3
Trading Symbol	LAZ
Entity Registrant Name	LAZARD LTD
Entity Central Index Key	0001311370
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		129,766,091
Subsidiaries of Lazard Ltd [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		11,694,113

XML

Condensed Consolidated Statements of Financial Condition - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
ASSETS
Cash and cash equivalents	$ 1,132,395	$ 1,483,836
Deposits with banks and short-term investments	1,015,872	935,431
Cash deposited with clearing organizations and other segregated cash	37,985	35,539
Receivables (net of allowance for doubtful accounts of $34,524 and $23,746 at September 30, 2018 and December 31, 2017, respectively):
Fees	546,808	487,800
Customers and other	93,979	83,816
Total receivables, net	640,787	571,616
Investments	609,595	427,186
Property (net of accumulated amortization and depreciation of $331,937 and $317,827 at September 30, 2018 and December 31, 2017, respectively)	214,279	205,301
Goodwill and other intangible assets (net of accumulated amortization of $65,576 and $63,099 at September 30, 2018 and December 31, 2017, respectively)	379,241	391,364
Deferred tax assets	610,389	650,260
Other assets	304,235	228,144
Total Assets	4,944,778	4,928,677
Liabilities:
Deposits and other customer payables	1,056,342	992,338
Accrued compensation and benefits	489,090	593,781
Senior debt	1,433,702	1,190,383
Deferred tax liabilities	6,481	9,407
Other liabilities	560,415	573,588
Total Liabilities	3,823,193	3,669,772
Commitments and contingencies
Common stock:
Class A, par value $.01 per share (500,000,000 shares authorized; 129,766,091 shares issued at September 30, 2018 and December 31, 2017, including shares held by subsidiaries as indicated below)	1,298	1,298
Additional paid-in-capital	701,849	788,140
Retained earnings	1,140,610	1,080,413
Accumulated other comprehensive loss, net of tax	(260,365)	(232,518)
Stockholders' equity subtotal before common stock held by subsidiaries and Noncontrolling interests, total	1,583,392	1,637,333
Class A common stock held by subsidiaries, at cost (11,293,254 and 10,747,142 shares at September 30, 2018 and December 31, 2017, respectively)	(516,267)	(437,530)
Total Lazard Ltd Stockholders’ Equity	1,067,125	1,199,803
Noncontrolling interests	54,460	59,102
Total Stockholders’ Equity	1,121,585	1,258,905
Total Liabilities and Stockholders’ Equity	4,944,778	4,928,677
LTBP Trust [Member]
Liabilities:
Tax receivable agreement obligation	277,163	310,275
Series A Preferred Stock [Member]
Preferred stock:
Preferred stock
Series B Preferred Stock [Member]
Preferred stock:
Preferred stock

XML

Condensed Consolidated Statements of Financial Condition (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Allowance for doubtful accounts receivables	$ 34,524	$ 23,746
Property, accumulated amortization and depreciation	331,937	317,827
Other intangible assets, accumulated amortization	$ 65,576	$ 63,099
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	15,000,000	15,000,000
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares issued	129,766,091	129,766,091
Common stock held by subsidiaries, shares	11,293,254	10,747,142
Series A Preferred Stock [Member]
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Series B Preferred Stock [Member]
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0

XML

Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
REVENUE
Interest income	$ 3,029	$ 1,630	$ 7,877	$ 4,893
Total revenue	640,800	638,131	2,180,533	2,005,497
Interest expense	14,319	13,272	41,416	39,994
Net revenue	626,481	624,859	2,139,117	1,965,503
OPERATING EXPENSES
Amortization and other acquisition-related (benefits) costs	(5,851)	172	(13,468)	5,003
Other	14,453	9,031	51,032	30,639
Total operating expenses	487,800	480,647	1,614,668	1,498,593
OPERATING INCOME	138,681	144,212	524,449	466,910
Provision for income taxes	29,956	32,742	105,684	124,109
NET INCOME	108,725	111,470	418,765	342,801
LESS - NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS	1,651	2,260	5,036	5,660
NET INCOME ATTRIBUTABLE TO LAZARD LTD	$ 107,074	$ 109,210	$ 413,729	$ 337,141
WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING:
Basic	119,456,516	121,243,598	119,897,626	122,142,303
Diluted	129,859,728	132,393,664	130,750,392	132,407,551
NET INCOME PER SHARE OF COMMON STOCK:
Basic	$ 0.90	$ 0.90	$ 3.45	$ 2.76
Diluted	0.82	0.82	3.16	2.55
DIVIDENDS DECLARED PER SHARE OF COMMON STOCK	$ 0.44	$ 0.41	$ 2.59	$ 2.40
Investment Banking and Other Advisory Fees [Member]
REVENUE
Revenue	$ 309,690	$ 305,530	$ 1,139,860	$ 1,050,721
Asset Management Fees [Member]
REVENUE
Revenue	312,790	301,719	986,777	868,522
Other [Member]
REVENUE
Revenue	15,291	29,252	46,019	81,361
Compensation and Benefits [Member]
OPERATING EXPENSES
Operating expenses	343,987	361,787	1,165,193	1,138,200
Occupancy and Equipment [Member]
OPERATING EXPENSES
Operating expenses	28,848	29,156	88,326	87,468
Marketing and Business Development [Member]
OPERATING EXPENSES
Operating expenses	21,868	19,798	75,755	63,577
Technology and Information Services [Member]
OPERATING EXPENSES
Operating expenses	36,394	31,373	102,173	87,429
Professional Services [Member]
OPERATING EXPENSES
Operating expenses	13,353	11,005	42,498	33,701
Fund Administration and Outsourced Services [Member]
OPERATING EXPENSES
Operating expenses	$ 34,748	$ 18,325	$ 103,159	$ 52,576

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Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Statement Of Income And Comprehensive Income [Abstract]
NET INCOME	$ 108,725	$ 111,470	$ 418,765	$ 342,801
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
Currency translation adjustments	(8,676)	19,748	(34,783)	62,847
Employee benefit plans:
Actuarial gain (loss) (net of tax expense (benefit) of $214 and $(1,197) for the three months ended September 30, 2018 and 2017, respectively, and $618 and $(3,673) for the nine months ended September 30, 2018 and 2017, respectively)	863	(4,715)	4,149	(13,819)
Adjustment for items reclassified to earnings (net of tax expense of $264 and $204 for the three months ended September 30, 2018 and 2017, respectively, and $948 and $676 for the nine months ended September 30, 2018 and 2017, respectively)	949	1,081	2,788	3,523
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX	(6,864)	16,114	(27,846)	52,551
COMPREHENSIVE INCOME	101,861	127,584	390,919	395,352
LESS - COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS	1,653	2,262	5,037	5,662
COMPREHENSIVE INCOME ATTRIBUTABLE TO LAZARD LTD	$ 100,208	$ 125,322	$ 385,882	$ 389,690

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Condensed Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Statement Of Income And Comprehensive Income [Abstract]
Tax expense (benefit) on actuarial gain (loss), employee benefit plans	$ 214	$ (1,197)	$ 618	$ (3,673)
Tax expense, adjustment for items reclassified to earnings, employee benefit plans	$ 264	$ 204	$ 948	$ 676

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Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME	$ 418,765	$ 342,801
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization of property	25,303	23,209
Amortization of deferred expenses and share-based incentive compensation	294,380	285,162
Amortization and other acquisition-related (benefits) costs	(13,468)	5,003
Deferred tax provision	27,287	50,699
Loss on extinguishment of debt	6,523
(Increase) decrease in operating assets:
Receivables-net	(82,161)	112,499
Investments	(184,542)	27,927
Other assets	(144,592)	(71,053)
Increase (decrease) in operating liabilities:
Accrued compensation and benefits and other liabilities	(56,035)	(70,819)
Net cash provided by operating activities	291,460	705,428
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property	(39,343)	(15,463)
Disposals of property	1,365	283
Net cash used in investing activities	(37,978)	(15,180)
Proceeds from:
Customer deposits	79,960	149,506
Contributions from noncontrolling interests	553
Issuance of senior debt, net of expenses	490,970
Payments for:
Senior debt	(255,543)
Capital lease obligations	(57)	(7,329)
Distributions to noncontrolling interests	(10,232)	(3,059)
Payments under tax receivable agreement	(31,897)	(789)
Purchase of Class A common stock	(306,591)	(252,538)
Class A common stock dividends	(307,850)	(292,293)
Settlement of vested share-based incentive compensation	(109,485)	(67,384)
Other financing activities	(5,509)	(10,073)
Net cash used in financing activities	(455,681)	(483,959)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS AND RESTRICTED CASH	(66,355)	128,091
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH	(268,554)	334,380
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH	2,454,806	1,607,483
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH	$ 2,186,252	$ 1,941,863

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Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017	Sep. 30, 2017	Dec. 31, 2016
RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH WITHIN THE CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION:
Cash and cash equivalents	$ 1,132,395	$ 1,483,836
Deposits with banks and short-term investments	1,015,872	935,431
Cash deposited with clearing organizations and other segregated cash	37,985	35,539
TOTAL CASH AND CASH EQUIVALENTS AND RESTRICTED CASH	$ 2,186,252	$ 2,454,806	$ 1,941,863	$ 1,607,483

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Condensed Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands	Total	Common Stock [Member]	Additional Paid-In-Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss), Net of Tax [Member]	Class A Common Stock Held By Subsidiaries [Member]	Total Lazard Ltd Stockholders' Equity [Member]	Noncontrolling Interests [Member]
Balance at Dec. 31, 2016	$ 1,293,813	$ 1,298	$ 688,231	$ 1,134,186	$ (314,222)	$ (273,506)	$ 1,235,987	$ 57,826
Balance (in shares) at Dec. 31, 2016		129,766,091				7,628,786
Adjustment for the cumulative effect on prior years from the adoption of new accounting guidance related to share-based incentive compensation at Dec. 31, 2016	81,544			81,544			81,544
Balance, as adjusted at Dec. 31, 2016	1,375,357	$ 1,298	688,231	1,215,730	(314,222)	$ (273,506)	1,317,531	57,826
Comprehensive income (loss)
Net income	342,801			337,141			337,141	5,660
Other comprehensive income (loss) - net of tax	52,551				52,549		52,549	2
Amortization of share-based incentive compensation	220,648		220,648				220,648
Dividend equivalents	(4,997)		36,482	(41,479)			(4,997)
Class A common stock dividends	(292,293)			(292,293)			(292,293)
Purchase of Class A common stock	$ (252,538)					$ (252,538)	(252,538)
Purchase of Class A common stock (in shares)	5,838,520					5,838,520
Delivery of Class A common stock in connection with share-based incentive compensation and related tax expense	$ (72,203)		(212,271)			$ 140,068	(72,203)
Delivery of Class A common stock in connection with share-based incentive compensation and related tax expense (in shares)						(3,772,169)
Business acquisitions and related equity transactions:
Delivery of Class A common stock and related tax benefit	1,437		(472)			$ 1,909	1,437
Delivery of Class A common stock and related tax benefit (in shares)						(47,474)
Class A common stock issuable (including related amortization)	363		363				363
Distributions to noncontrolling interests, net	(3,059)							(3,059)
Other	408			204			204	204
Balance at Sep. 30, 2017	1,368,475	$ 1,298	732,981	1,219,303	(261,673)	$ (384,067)	1,307,842	60,633
Balance (in shares) at Sep. 30, 2017		129,766,091				9,647,663
Balance at Jun. 30, 2017					(277,785)
Comprehensive income (loss)
Net income	111,470
Other comprehensive income (loss) - net of tax	16,114				16,112
Balance at Sep. 30, 2017	1,368,475	$ 1,298	732,981	1,219,303	(261,673)	$ (384,067)	1,307,842	60,633
Balance (in shares) at Sep. 30, 2017		129,766,091				9,647,663
Balance at Dec. 31, 2017	1,258,905	$ 1,298	788,140	1,080,413	(232,518)	$ (437,530)	1,199,803	59,102
Balance (in shares) at Dec. 31, 2017		129,766,091				10,747,142
Comprehensive income (loss)
Net income	418,765			413,729			413,729	5,036
Other comprehensive income (loss) - net of tax	(27,846)				(27,847)		(27,847)	1
Amortization of share-based incentive compensation	218,186		218,186				218,186
Dividend equivalents	(5,509)		38,923	(44,432)			(5,509)
Class A common stock dividends	(307,850)			(307,850)			(307,850)
Purchase of Class A common stock	$ (306,591)					$ (306,591)	(306,591)
Purchase of Class A common stock (in shares)	5,797,789					5,797,789
Delivery of Class A common stock in connection with share-based incentive compensation and related tax expense	$ (117,230)		(345,023)			$ 227,793	(117,230)
Delivery of Class A common stock in connection with share-based incentive compensation and related tax expense (in shares)						(5,249,819)
Business acquisitions and related equity transactions:
Delivery of Class A common stock and related tax benefit			(61)			$ 61
Delivery of Class A common stock and related tax benefit (in shares)						(1,858)
Class A common stock issuable (including related amortization)	434		434				434
Dividend-equivalents			1,250	(1,250)
Distributions to noncontrolling interests, net	(9,679)							(9,679)
Balance at Sep. 30, 2018	1,121,585	$ 1,298	701,849	1,140,610	(260,365)	$ (516,267)	1,067,125	54,460
Balance (in shares) at Sep. 30, 2018		129,766,091				11,293,254
Balance at Jun. 30, 2018					(253,499)
Comprehensive income (loss)
Net income	108,725
Other comprehensive income (loss) - net of tax	(6,864)				(6,866)
Balance at Sep. 30, 2018	$ 1,121,585	$ 1,298	$ 701,849	$ 1,140,610	$ (260,365)	$ (516,267)	$ 1,067,125	$ 54,460
Balance (in shares) at Sep. 30, 2018		129,766,091				11,293,254

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Condensed Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Statement Of Stockholders Equity [Abstract]
Tax expense related to delivery of Class A Common Stock in connection with share-based incentive compensation	$ 7,745	$ 4,819
Tax expense (benefit) on delivery of Class A common stock in connection with business acquisitions		$ 832

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Organization and Basis of Presentation

9 Months Ended

Sep. 30, 2018

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Organization and Basis of Presentation

1. ORGANIZATION AND BASIS OF PRESENTATION

Organization

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

Lazard Ltd indirectly held 100% of all outstanding Lazard Group common membership interests as of September 30, 2018 and December 31, 2017. Lazard Ltd, through its control of the managing members of Lazard Group, controls Lazard Group, which is governed by an Amended and Restated Operating Agreement dated as of October 26, 2015, as amended (the “Operating Agreement”).

Lazard Ltd’s primary operating asset is its indirect ownership of the common membership interests of, and managing member interests in, Lazard Group, whose principal operating activities are included in two business segments:

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

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

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

Basis of Presentation

The accompanying condensed consolidated financial statements of Lazard Ltd have been prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States of America (“U.S. GAAP”) for complete financial statements and should be read in conjunction with the audited consolidated financial statements and notes thereto included in Lazard Ltd’s Annual Report on Form 10-K for the year ended December 31, 2017. The accompanying December 31, 2017 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 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 and nine month periods ended September 30, 2018 are not indicative of the results to be expected for any future interim or annual period.

The condensed consolidated financial statements include Lazard Ltd, Lazard Group and Lazard Group’s principal operating subsidiaries: Lazard Frères & Co. LLC (“LFNY”), a New York limited liability company, along with its subsidiaries, including Lazard Asset Management LLC and its subsidiaries (collectively referred to as “LAM”); the French limited liability companies Compagnie Financière Lazard Frères SAS (“CFLF”) along with its subsidiaries, LFB and Lazard Frères Gestion SAS (“LFG”), and Maison Lazard SAS and its subsidiaries; and Lazard & Co., Limited (“LCL”), through Lazard & Co., Holdings Limited (“LCH”), an English private limited company, together with their jointly owned affiliates and subsidiaries.

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

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

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

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

Certain prior period amounts have been reclassified to conform to the current period presentation, specifically related to the adoption of new guidance impacting the condensed consolidated statements of cash flows (see Note 2).

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Recent Accounting Developments

9 Months Ended

Sep. 30, 2018

New Accounting Pronouncements And Changes In Accounting Principles [Abstract]

Recent Accounting Developments

2. RECENT ACCOUNTING DEVELOPMENTS

Revenue from Contracts with Customers—In May 2014, the FASB issued comprehensive new revenue recognition guidance. The guidance requires a company to recognize revenue when it transfers promised services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those services and requires enhanced disclosures. The guidance also changes the accounting for certain contract costs, including whether they may be offset against revenue in the condensed consolidated statements of operations. On July 9, 2015, the FASB approved the deferral of the effective date of the new revenue guidance by one year to annual reporting periods beginning after December 15, 2017. The guidance may be adopted using a full retrospective approach or a modified cumulative effect approach. The Company adopted the revenue recognition guidance upon its effective date of January 1, 2018 using the modified cumulative effect approach. The Company applied the new guidance to contracts that have not yet been completed as of the adoption date. The Company’s adoption efforts included the identification of revenue within the scope of the guidance and the evaluation of revenue contracts. 

The Company evaluated the potential impact of the new guidance, including (i) the timing of revenue recognition for Financial Advisory and Asset Management fees and (ii) the presentation of certain contract costs. With respect to revenue recognition, the Company assessed the impact of the new guidance on the recognition of fees for Financial Advisory (e.g., transaction completion, transaction announcement and retainers), and Asset Management (e.g., management and incentive fees), including the potential requirement under the new guidance to recognize certain transaction completion fees in periods prior to the periods in which the applicable transactions close. The Company’s assessment included an analysis of whether the Company’s fulfillment of its performance obligations would be deemed to occur over time, or at specific points in time, under the new guidance. Specifically, recognition would be deemed to occur over time if the client receives and consumes benefits from the services as the Company performs the services. The Company concluded that Financial Advisory and Asset Management fees would typically be recognized over time as performance occurs, subject to constraints, using an appropriate measure of progress based on resources consumed, which is consistent with when the client receives benefits. There was no material impact to the Company’s recognition of revenue upon adoption of the new guidance.

The new guidance requires the Company to prospectively present certain contract costs on a gross basis. The most significant changes with respect to presentation relate to (a) certain distribution costs within our Asset Management business and (b) certain reimbursable deal costs within our Financial Advisory business, both of which were previously presented net against revenues and are now presented as expenses on a gross basis under the new guidance because the Company is primarily responsible for fulfilling the promise of the arrangement.  For the three month and nine month periods ended September 30, 2018, the presentation of such costs on a gross basis resulted in an increase to net revenue of $24,392 and $72,006, respectively, primarily comprised of increases to asset management fees and investment banking and other advisory fees. In addition, there was a corresponding increase to operating expenses of $24,392 and $72,006, respectively, primarily comprised of an increase to distribution costs presented within fund administration and outsourced services and an increase to reimbursable deal costs presented within marketing and business development. These amounts would have been presented on a net basis prior to the adoption of the new guidance, and there was no material impact to net income as a result of the gross basis of presentation under the new guidance.

See Note 3 for further information on contracts within the scope of the new guidance.

Classification of Certain Cash Receipts and Cash Payments—In August and November 2016, the FASB issued updated guidance which clarifies how a company should classify certain cash receipts and cash payments on the statement of cash flows and clarifies that restricted cash should be included in the total of cash and cash equivalents on the statement of cash flows. The new guidance for both updates is effective for annual and interim periods beginning after December 15, 2017 and is to be applied on a retrospective basis. The Company adopted this new guidance on January 1, 2018. The adoption of the new guidance in the first quarter of 2018 resulted in the reclassification of “cash deposited with clearing organizations and other segregated cash” and “deposits with banks and short-term investments” from operating activities to components of “cash and cash equivalents and restricted cash” on the condensed consolidated statement of cash flows. In addition, the Company reclassified cash flows related to customer deposits from operating activities to financing activities. This resulted in changes in deposits with banks and short-term investments and customer deposits no longer being reflected in cash flows from operating activities. Except for the reclassification of these items on the condensed consolidated statement of cash flows, the new guidance had no impact on the Company’s financial statements.

Clarifying the Definition of a Business—In January 2017, the FASB issued updated guidance to clarify the definition of a business within the context of business combinations. The updated guidance requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, such asset or group of assets is not a business. This updated guidance is expected to reduce the number of transactions that need to be further evaluated as business combinations. If further evaluation is necessary, the updated guidance will require that a business set include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output. The updated guidance will remove the evaluation of whether a market participant could replace missing elements. The new guidance is effective for annual and interim periods beginning after December 15, 2017 and is to be applied on a prospective basis. The Company adopted the new guidance on January 1, 2018 and it will be applied to business combinations on a prospective basis.

Compensation—Retirement Benefits—Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost—In March 2016, the FASB issued updated guidance on the presentation of net benefit cost in the statement of operations and the components eligible for capitalization. The new guidance requires that only the service cost component of net periodic pension cost and net periodic postretirement benefit cost be presented with other employee compensation costs in operating expenses, applied on a retrospective basis. The other components of net benefit cost, including amortization of prior service cost, and gains and losses from settlements and curtailments, are included in other operating expenses. The new guidance also stipulates that only the service cost component of net benefit cost is eligible for capitalization, applied on a prospective basis. This new guidance is effective for annual and interim periods beginning after December 15, 2017. The Company adopted the new guidance on January 1, 2018 and there was no material impact to the Company’s financial statements.

Compensation—Stock Compensation: Scope of Modification Accounting—In May 2017, the FASB issued updated guidance on modifications to share-based payment awards. The updated guidance requires entities to account for the effects of a modification to a share-based payment award unless the following are all the same immediately before and after the modification: (i) the fair value of the award, (ii) the vesting conditions of the award, and (iii) the classification of the award as an equity instrument or a liability instrument. This new guidance is effective for annual and interim periods beginning after December 15, 2017 and is to be applied on a prospective basis. The Company adopted the new guidance on January 1, 2018, and there was no material impact to the Company’s financial statements.

Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income—In February 2018, the FASB issued updated guidance on the tax effects of items in “accumulated other comprehensive income (loss), net of tax” (“AOCI”). Specifically, the new guidance will permit, but not require, a reclassification from AOCI to retained earnings for stranded tax effects resulting from the newly enacted federal corporate income tax rate under the Tax Cuts and Jobs Act of 2017 (see Note 15). The amount of the reclassification would be the difference between the historical corporate income tax rate and the newly enacted 21% corporate income tax rate. The new guidance is effective for annual and interim periods beginning after December 15, 2018, with an option to apply it in the period of adoption or on a retrospective basis for each period in which the effect of the change in the U.S. federal corporate income tax rate is recognized. Early adoption of the new guidance is permitted for public business entities for reporting periods for which financial statements have not yet been issued. The Company is currently evaluating the new guidance.

Leases—In February 2016, the FASB issued updated guidance for leases. The guidance requires a lessee to (i) recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, in the statement of financial condition, (ii) recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a generally straight-line basis, and (iii) classify all cash payments within operating activities in the statement of cash flows. The new guidance is effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted. Currently, the Company plans to adopt the new guidance as of the effective date, January 1, 2019, and is considering the practical expedients available. The new guidance is to be applied on a modified retrospective basis.

The Company continues to evaluate the new guidance, and is in the process of evaluating its leasing activities and contracts, as well as processes and internal controls over financial reporting relating to its leasing activities. See Note 11 for further information on the Company's commitments under lease agreements. The population of contracts potentially subject to recognition in the statement of financial condition and their initial measurement remains under evaluation.

Improvements to Nonemployee Share-Based Payment Accounting—In June 2018, the FASB issued updated guidance to simplify the accounting for nonemployee share-based payment transactions. The new guidance generally requires equity-classified nonemployee share-based payment awards to be measured at the grant date, which is the date at which a grantor and grantee reach a mutual understanding of the key terms and conditions of a share-based payment award.  This update generally aligns the accounting for equity-classified share-based payment awards to nonemployees with the measurement date required for employees.  The new guidance is effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted.  Upon adoption, the new guidance would be applied on a modified retrospective basis. The Company is currently evaluating the new guidance.

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

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

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 new guidance is effective for annual and interim reporting periods beginning after December 15, 2019, with early adoption permitted. Upon adoption, the Company may elect to apply the new guidance on either a prospective or retrospective basis. The Company is currently evaluating the new guidance.

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 new guidance is effective for annual and interim reporting periods beginning after December 15, 2019, with early adoption permitted. The Company is currently evaluating the new guidance.

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 new guidance is effective for annual and interim reporting periods beginning after December 15, 2020, with early adoption permitted. The Company is currently evaluating the new guidance.

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Revenue Recognition

9 Months Ended

Sep. 30, 2018

Revenue Recognition [Abstract]

Revenue Recognition

3. REVENUE RECOGNITION

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		Nine Months Ended
	September 30, 2018 (d)		September 30, 2018 (d)
Net Revenue:
Financial Advisory (a)	$	310,418	$	1,141,628
Asset Management:
Management Fees and Other (b)	$	323,283	$	1,012,127
Incentive Fees (c)		1,957		19,984
Total Asset Management	$	325,240	$	1,032,111

(a) Financial Advisory is comprised of M&A Advisory, Capital Advisory, Capital Raising, Restructuring, Shareholder Advisory, Sovereign Advisory, and other strategic advisory work for clients. The benefits of these advisory services are generally transferred to the Company’s clients over time, and consideration for these advisory services typically includes transaction completion, transaction announcement and retainer fees. Retainer fees are generally fixed and recognized over the period in which the advisory services are performed. However, transaction announcement and transaction completion fees are variable and subject to constraints, and they are typically not recognized until there is an announcement date or a completion date, respectively, due to the uncertainty associated with those events. The advisory fees that may be unrecognized as of the end of a reporting period, primarily comprised of fees associated with transaction announcements and transaction completions, generally remain unrecognized due to the uncertainty associated with those events.

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

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

(d) 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.

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Receivables

9 Months Ended

Sep. 30, 2018

Receivables [Abstract]

Receivables

4. RECEIVABLES

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

Receivables are stated net of an estimated allowance for doubtful accounts, for past due amounts and for specific accounts deemed uncollectible, which may include situations where a fee is in dispute.

Activity in the allowance for doubtful accounts for the three month and nine month periods ended September 30, 2018 and 2017 was as follows:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Beginning Balance	$	34,956		$	25,094		$	23,746		$	16,386
Bad debt expense, net of recoveries		1,488			4,753			18,106			18,584
Charge-offs, foreign currency translation and other    adjustments		(1,920	)		(2,383	)		(7,328	)		(7,506	)
Ending Balance	$	34,524		$	27,464		$	34,524		$	27,464

Bad debt expense, net of recoveries is included in “operating expenses—other” on the condensed consolidated statements of operations.

At September 30, 2018 and December 31, 2017, the Company had receivables past due or deemed uncollectible of $38,098 and $34,865, respectively.

Of the Company’s fee receivables at September 30, 2018 and December 31, 2017, $77,540 and $80,536, respectively, represented interest-bearing financing receivables. Based upon our historical loss experience, the credit quality of the counterparties, and the lack of past due or uncollectible amounts, there was no allowance for doubtful accounts required at those dates related to such receivables.

The aggregate carrying amount of our non-interest bearing receivables of $563,247 and $491,080 at September 30, 2018 and December 31, 2017, respectively, approximates fair value.

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Investments

9 Months Ended

Sep. 30, 2018

Investments Schedule [Abstract]

Investments

5. INVESTMENTS

The Company’s investments and securities sold, not yet purchased, consist of the following at September 30, 2018 and December 31, 2017:

	September 30,		December 31,
	2018		2017
Interest-bearing deposits	$	519	$	556
Debt		202,592		6
Equities		36,810		45,257
Funds:
Alternative investments (a)		18,169		20,993
Debt (a)		89,476		84,077
Equity (a)		202,354		199,618
Private equity		59,675		76,679
		369,674		381,367
Total investments		609,595		427,186
Less:
Interest-bearing deposits		519		556
Investments, at fair value	$	609,076	$	426,630
Securities sold, not yet purchased, at fair value (included in “other liabilities”)	$	6,876	$	7,338

(a) Interests in alternative investment funds, debt funds and equity funds include investments with fair values of $9,979, $59,282 and $149,813, respectively, at September 30, 2018 and $11,213, $48,391 and $131,893, respectively, at December 31, 2017, held in order to satisfy the Company’s liability upon vesting of previously granted Lazard Fund Interests (“LFI”) and other similar deferred compensation arrangements. LFI represent grants by the Company to eligible employees of actual or notional interests in a number of Lazard-managed funds, subject to service-based vesting conditions (see Notes 7 and 13).

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, (ii) a fund targeting significant noncontrolling-stake investments in established private companies and (iii) until the second quarter of 2017, a mezzanine fund (the “Mezzanine Fund”), which invests in mezzanine debt of a diversified selection of small- to mid-cap European companies. Lazard sold its interest in the Mezzanine Fund in May 2017.

Private equity investments consolidated but not owned by Lazard relate to the economic interests that are owned by the management team and other investors in the Edgewater Funds (“Edgewater”).

During the three month and nine month periods ended September 30, 2018 and 2017, the Company reported in “revenue-other” on its condensed consolidated statements of operations net unrealized investment gains and losses pertaining to “trading” securities still held as of the reporting date as follows:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018			2017
Net unrealized investment gains (losses)	$	1,972	$	6,949	$	(13,183	)	$	27,932

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Fair Value Measurements

9 Months Ended

Sep. 30, 2018

Fair Value Disclosures [Abstract]

Fair Value Measurements

6. FAIR VALUE MEASUREMENTS

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

Level 1. Assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market that Lazard has the ability to access.

Level 2. Assets and liabilities whose values are based on (i) quoted prices for similar assets or liabilities in an active market, or quoted prices for identical or similar assets or liabilities in non-active markets, or (ii) inputs other than quoted prices that are directly observable or derived principally from, or corroborated by, market data.

Level 3. Assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect our own assumptions about the assumptions a market participant would use in pricing the asset or liability. Items included in Level 3 include securities or other financial assets whose trading volume and level of activity have significantly decreased when compared with normal market activity and there is no longer sufficient frequency or volume to provide pricing information on an ongoing basis.

The fair value of 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 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 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 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. See Note 11.

The fair value of derivatives entered into by the Company is 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. 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 September 30, 2018 and December 31, 2017, 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:

	September 30, 2018
	Level 1		Level 2		Level 3		NAV		Total
Assets:
Investments:
Debt	$	202,592	$	-	$	-	$	-	$	202,592
Equities		35,182		-		1,628		-		36,810
Funds:
Alternative investments		17,254		-		-		915		18,169
Debt		89,469		-		-		7		89,476
Equity		202,302		-		-		52		202,354
Private equity		-		-		-		59,675		59,675
Derivatives		-		7,490		-		-		7,490
Total	$	546,799	$	7,490	$	1,628	$	60,649	$	616,566
Liabilities:
Securities sold, not yet purchased	$	6,876	$	-	$	-	$	-	$	6,876
Contingent consideration liability		-		-		12,921		-		12,921
Derivatives		-		206,729		-		-		206,729
Total	$	6,876	$	206,729	$	12,921	$	-	$	226,526

	December 31, 2017
	Level 1		Level 2		Level 3		NAV		Total
Assets:
Investments:
Debt	$	6	$	-	$	-	$	-	$	6
Equities		43,665		-		1,592		-		45,257
Funds:
Alternative investments		17,353		-		-		3,640		20,993
Debt		84,071		-		-		6		84,077
Equity		199,565		-		-		53		199,618
Private equity		-		-		-		76,679		76,679
Derivatives		-		3,732		-		-		3,732
Total	$	344,660	$	3,732	$	1,592	$	80,378	$	430,362
Liabilities:
Securities sold, not yet purchased	$	7,338	$	-	$	-	$	-	$	7,338
Contingent consideration liability		-		-		28,941		-		28,941
Derivatives		-		198,417		-		-		198,417
Total	$	7,338	$	198,417	$	28,941	$	-	$	234,696

The following tables provide a summary of changes in fair value of the Company’s Level 3 assets and liabilities for the three month and nine month periods ended September 30, 2018 and 2017:

	Three Months Ended September 30, 2018
	Beginning Balance		NetUnrealized/ Realized Gains/Losses Included In Earnings (a)			Purchases/ Acquisitions		Sales/ Dispositions		Foreign Currency Translation Adjustments			Ending Balance
Assets:
Investments:
Equities	$	1,629	$	-		$	-	$	-	$	(1	)	$	1,628
Total Level 3 Assets	$	1,629	$	-		$	-	$	-	$	(1	)	$	1,628
Liabilities:
Contingent consideration liability	$	19,628	$	(6,707	)	$	-	$	-	$	-		$	12,921
Total Level 3 Liabilities	$	19,628	$	(6,707	)	$	-	$	-	$	-		$	12,921

	Nine Months Ended September 30, 2018
	Beginning Balance		NetUnrealized/ Realized Gains/Losses Included In Earnings (a)			Purchases/ Acquisitions		Sales/ Dispositions		Foreign Currency Translation Adjustments			Ending Balance
Assets:
Investments:
Equities	$	1,592	$	61		$	1	$	-	$	(26	)	$	1,628
Total Level 3 Assets	$	1,592	$	61		$	1	$	-	$	(26	)	$	1,628
Liabilities:
Contingent consideration liability	$	28,941	$	(16,020	)	$	-	$	-	$	-		$	12,921
Total Level 3 Liabilities	$	28,941	$	(16,020	)	$	-	$	-	$	-		$	12,921

	Three Months Ended September 30, 2017
	Beginning Balance		Net Unrealized/ Realized Gains/Losses Included In Earnings (a)			Purchases/ Acquisitions		Sales/ Dispositions			Foreign Currency Translation Adjustments		Ending Balance
Assets:
Investments:
Equities	$	3,072	$	130		$	-	$	(1,661	)	$	6	$	1,547
Total Level 3 Assets	$	3,072	$	130		$	-	$	(1,661	)	$	6	$	1,547
Liabilities:
Contingent consideration liability	$	25,539	$	(612	)	$	-	$	-		$	-	$	24,927
Total Level 3 Liabilities	$	25,539	$	(612	)	$	-	$	-		$	-	$	24,927

	Nine Months Ended September 30, 2017
	Beginning Balance		Net Unrealized/ Realized Gains/Losses Included In Earnings (a)		Purchases/ Acquisitions		Sales/ Dispositions			Foreign Currency Translation Adjustments		Ending Balance
Assets:
Investments:
Equities	$	1,508	$	4	$	1,661	$	(1,669	)	$	43	$	1,547
Total Level 3 Assets	$	1,508	$	4	$	1,661	$	(1,669	)	$	43	$	1,547
Liabilities:
Contingent consideration liability	$	22,608	$	2,568	$	-	$	(249	)	$	-	$	24,927
Total Level 3 Liabilities	$	22,608	$	2,568	$	-	$	(249	)	$	-	$	24,927

(a) Earnings recorded in “other revenue” for investments in equities for the three month and nine month periods ended September 30, 2018 and the three month and nine month periods ended September 30, 2017 include net unrealized gains of $0, $61, $130 and $2, respectively. Earnings recorded in “amortization and other acquisition-related (benefits) costs” for the contingent consideration liability for the three month and nine month periods ended September 30, 2018 and the three month and nine month periods ended September 30, 2017 include unrealized (gains) losses of $(6,707), $(16,020), $(612) and $2,568, respectively.

There were no transfers between any of the Level 1, 2 and 3 categories in the fair value measurement hierarchy during the three month and nine month periods ended September 30, 2018 and 2017.

The following tables present, at September 30, 2018 and December 31, 2017, certain investments that are valued using NAV or its equivalent as a practical expedient in determining fair value:

September 30, 2018

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

Alternativeinvestment funds:

Hedge funds

$

330

$

-

NA

NA

NA

NA

(a)

60 days

Funds of funds

23

-

NA

NA

NA

NA

(b)

90 days

Other

562

-

NA

NA

NA

NA

(c)

<30-60 days

Debt funds

7

-

NA

NA

NA

NA

(d)

30 days

Equity funds

52

-

NA

NA

NA

NA

(e)

<30-90 days

Private equity funds:

Equity growth

59,675

8,632

(f)

100

%

15

%

36

%

49

%

NA

NA

Total

$

60,649

$

8,632

(a) monthly (100%)

(b) quarterly (100%)

(c) daily (6%) and monthly (94%)

(d) daily (100%)

(e) daily (18%), monthly (47%), quarterly (31%) and annually (4%)

(f) Unfunded commitments to private equity investments consolidated but not owned by Lazard of $15,257 are excluded. Such commitments are required to be funded by capital contributions from noncontrolling interest holders.

December 31, 2017

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

Alternativeinvestment funds:

Hedge funds

$

2,517

$

-

NA

NA

NA

NA

(a)

<30-60 days

Funds of funds

528

-

NA

NA

NA

NA

(b)

<30-90 days

Other

595

-

NA

NA

NA

NA

(c)

<30-60 days

Debt funds

6

-

NA

NA

NA

NA

(d)

30 days

Equity funds

53

-

NA

NA

NA

NA

(e)

<30-90 days

Private equity funds:

Equity growth

76,679

10,300

(f)

100

%

16

%

38

%

46

%

NA

NA

Total

$

80,378

$

10,300

(a) weekly (3%), monthly (5%) and quarterly (92%)

(b) monthly (97%) and quarterly (3%)

(c) daily (6%) and monthly (94%)

(d) daily (100%)

(e) daily (18%), monthly (50%) and quarterly (32%)

(f) Unfunded commitments to private equity investments consolidated but not owned by Lazard of $5,902 are excluded. Such commitments are required to be funded by capital contributions from noncontrolling interest holders.

Investment Capital Funding Commitments—At September 30, 2018, the Company’s maximum unfunded commitments for capital contributions to investment funds primarily arose from commitments to EGCP III, which amounted to $7,847. 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.

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Derivatives

9 Months Ended

Sep. 30, 2018

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Derivatives

7. DERIVATIVES

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 September 30, 2018 and December 31, 2017:

	September 30,		December 31,
	2018		2017
Derivative Assets:
Forward foreign currency exchange rate contracts	$	4,709	$	3,314
Total return swaps and other (a)		2,781		418
	$	7,490	$	3,732
Derivative Liabilities:
Forward foreign currency exchange rate contracts	$	2,434	$	4,846
Total return swaps and other (a)		317		11,270
LFI and other similar deferred compensation arrangements		203,978		182,301
	$	206,729	$	198,417

(a) For total return swaps, amounts represent the netting of gross derivative assets and liabilities of $3,401 and $937 as of September 30, 2018, respectively, and $469 and $11,321 as of December 31, 2017, respectively, for contracts with the same counterparty under legally enforceable master netting agreements. Such amounts are recorded “net” in “other assets”, with receivables for net cash collateral under such contracts of $2,316 and $17,616 as of September 30, 2018 and December 31, 2017, respectively.

Net gains (losses) with respect to derivative instruments (predominantly reflected in “revenue-other”) and the Company’s derivative liabilities relating to its obligations pertaining to LFI and other similar deferred compensation arrangements (included in “compensation and benefits” expense) as reflected on the accompanying condensed consolidated statements of operations for the three month and nine month periods ended September 30, 2018 and 2017, were as follows:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Forward foreign currency exchange rate contracts	$	1,431		$	(2,991	)	$	5,184		$	(8,149	)
LFI and other similar deferred compensation arrangements		(3,647	)		(4,875	)		(1,712	)		(17,981	)
Total return swaps and other		(1,847	)		(3,890	)		599			(12,872	)
Total	$	(4,063	)	$	(11,756	)	$	4,071		$	(39,002	)

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Property

9 Months Ended

Sep. 30, 2018

Property Plant And Equipment [Abstract]

Property

8. PROPERTY

At September 30, 2018 and December 31, 2017, property consisted of the following:

	Estimated Depreciable		September 30,		December 31,
	Life in Years		2018		2017
Buildings		33	$	146,630	$	151,912
Leasehold improvements	3-20			188,995		173,102
Furniture and equipment	3-10			199,192		183,541
Construction in progress				11,399		14,573
Total				546,216		523,128
Less - Accumulated depreciation and amortization			331,937			317,827
Property			$	214,279	$	205,301

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Goodwill and Other Intangible Assets

9 Months Ended

Sep. 30, 2018

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

9. GOODWILL AND OTHER INTANGIBLE ASSETS

The components of goodwill and other intangible assets at September 30, 2018 and December 31, 2017 are presented below:

	September 30,		December 31,
	2018		2017
Goodwill	$	374,994	$	385,292
Other intangible assets (net of accumulated amortization)		4,247		6,072
	$	379,241	$	391,364

At September 30, 2018 and December 31, 2017, goodwill of $310,453 and $320,751, respectively, was attributable to the Company’s Financial Advisory segment and, at each such respective date, $64,541 of goodwill was attributable to the Company’s Asset Management segment.

Changes in the carrying amount of goodwill for the nine month periods ended September 30, 2018 and 2017 are as follows:

	Nine Months Ended
	September 30,
	2018			2017
Balance, January 1	$	385,292		$	373,117
Foreign currency translation adjustments		(10,298	)		12,369
Balance, September 30	$	374,994		$	385,486

All changes in the carrying amount of goodwill for the nine month periods ended September 30, 2018 and 2017 are attributable to the Company’s Financial Advisory segment.

The gross cost and accumulated amortization of other intangible assets as of September 30, 2018 and December 31, 2017, by major intangible asset category, are as follows:

	September 30, 2018						December 31, 2017
	Gross Cost		Accumulated Amortization		Net Carrying Amount		Gross Cost		Accumulated Amortization		Net Carrying Amount
Success/incentive fees	$	35,335	$	31,922	$	3,413	$	35,422	$	29,723	$	5,699
Management fees, customer relationships    and non-compete agreements		34,488		33,654		834		33,749		33,376		373
	$	69,823	$	65,576	$	4,247	$	69,171	$	63,099	$	6,072

Amortization expense of intangible assets, included in “amortization and other acquisition-related (benefits) costs” in the condensed consolidated statements of operations, for the three month and nine month periods ended September 30, 2018 was $856 and $2,552, respectively, and for the three month and nine month periods ended September 30, 2017 was $784 and $2,435, respectively. Estimated future amortization expense is as follows:

Year Ending December 31,	Amortization Expense (a)
2018 (October 1 through December 31)	$	484
2019		1,724
2020		1,701
2021		150
2022		150
2023		38
Total amortization expense	$	4,247

(a) Approximately 38% of intangible asset amortization is attributable to a noncontrolling interest.

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Senior Debt

9 Months Ended

Sep. 30, 2018

Debt Disclosure [Abstract]

Senior Debt

10. SENIOR DEBT

Senior debt is comprised of the following as of September 30, 2018 and December 31, 2017:

							Outstanding as of
	Initial			Annual			September 30, 2018						December 31, 2017
	Principal Amount		Maturity Date	Interest Rate(a)			Principal		Unamortized Debt Costs		Carrying Value		Principal		Unamortized Debt Costs		Carrying Value
Lazard Group 2020    Senior Notes	$	500,000	11/14/20		4.25	%	$	250,000	$	978	$	249,022	$	500,000	$	2,647	$	497,353
Lazard Group 2025    Senior Notes		400,000	2/13/25		3.75	%		400,000		3,006		396,994		400,000		3,361		396,639
Lazard Group 2027    Senior Notes		300,000	3/1/27		3.625	%		300,000		3,314		296,686		300,000		3,609		296,391
Lazard Group 2028    Senior Notes (b)		500,000	9/19/28		4.50	%		500,000		9,000		491,000		-		-		-
Total							$	1,450,000	$	16,298	$	1,433,702	$	1,200,000	$	9,617	$	1,190,383

(a) The effective interest rates of Lazard Group’s 4.25% senior notes due November 14, 2020 (the “2020 Notes”), Lazard Group’s 3.75% senior notes due February 13, 2025 (the “2025 Notes”), Lazard Group’s 3.625% senior notes due March 1, 2027 (the “2027 Notes”) and Lazard Group’s 4.50% senior notes due September 19, 2028 (the “2028 Notes”) are 4.44%, 3.87%,  3.76% and 4.68%, respectively.

(b) In September 2018, Lazard Group completed an offering of $500,000 aggregate principal amount of the 2028 Notes. Interest on the 2028 Notes is payable semi-annually on March 19 and September 19 of each year, beginning March 19, 2019. Lazard Group used a portion of the net proceeds of the 2028 Notes to redeem or otherwise retire $250,000 aggregate principal amount of the 2020 Notes, which, including the recognition of unamortized issuance costs, resulted in a loss on debt extinguishment of $6,523. Such loss on debt extinguishment was recorded in “operating expenses—other” on the condensed consolidated statement of operations for the three month and nine month periods ended September 30, 2018.

On September 25, 2015, Lazard Group entered into an Amended and Restated Credit Agreement for a five-year $150,000 senior revolving credit facility with a group of lenders (the “Amended and Restated Credit Agreement”), which expires in September 2020. The Amended and Restated Credit Agreement amended and restated the previous credit agreement dated September 25, 2012. 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. At September 30, 2018 and December 31, 2017, no amounts were outstanding under the Amended and Restated Credit Agreement.

The Amended and Restated Credit Agreement, the indenture and the supplemental indentures relating to Lazard Group’s senior notes contain certain covenants, events of default and other customary provisions, including a customary make-whole provision in the event of early redemption, where applicable. As of September 30, 2018, the Company was in compliance with such provisions. All of the Company’s senior debt obligations are unsecured.

As of September 30, 2018, the Company had approximately $169,000 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 $17,000 (at September 30, 2018 exchange rates).

The Company’s senior debt at September 30, 2018 and December 31, 2017 is carried at historical amounts of $1,433,702 and $1,190,383, respectively. At those dates, the fair value of such senior debt was approximately $1,407,000 and $1,230,000, 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.

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2018

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

11. COMMITMENTS AND CONTINGENCIES

Leases—The Company has various leases and other contractual commitments arising in the ordinary course of business. At September 30, 2018, minimum rental commitments under non-cancelable operating leases, net of sublease income, are approximately as follows:

Year Ending December 31,
2018 (October 1 through December 31)	$	20,992
2019		85,689
2020		87,492
2021		83,164
2022		70,422
Thereafter		545,624
Total minimum rental commitments		893,383
Less - Sublease proceeds		28,796
Net rental commitments	$	864,587

In August 2018, the Company entered into a lease agreement for additional office facilities. Operating lease commitments in the table above include the impact of the new lease agreement.

Guarantees—In the normal course of business, LFB provides indemnifications to third parties to protect them in the event of non-performance by its clients. At September 30, 2018, LFB had $4,961 of such indemnifications and held $4,961 of collateral/counter-guarantees to secure these commitments. The Company believes the likelihood of loss with respect to these indemnities is remote. Accordingly, no liability is recorded in the condensed consolidated statement of financial condition.

Business Acquisitions—For businesses acquired in 2016, the remaining consideration consists of (i) 60,817 shares of Class A common stock subject to non-compete provisions, and non-contingent interests exchangeable into 202,984 shares of Class A common stock, and (ii) up to 810,742 additional shares of Class A common stock that are subject to certain performance thresholds, as well as applicable related dividend equivalent amounts. As of September 30, 2018, none of the contingent shares had been earned.

Other Commitments—The Company has various other contractual commitments arising in the ordinary course of business. In addition, from time to time, each of LFB and LFNY may enter into underwriting commitments in which it will participate as an underwriter. At September 30, 2018, LFB and LFNY had no 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, 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.

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Stockholders' Equity

9 Months Ended

Sep. 30, 2018

Equity [Abstract]

Stockholders' Equity

12. STOCKHOLDERS’ EQUITY

Share Repurchase Program—During the nine month period ended September 30, 2018 and since 2015, the Board of Directors of Lazard authorized the repurchase of Class A common stock as set forth in the table below:

Date	Repurchase Authorization		Expiration
February 2015	$	150,000	December31, 2016
January 2016	$	200,000	December31, 2017
April 2016	$	113,182	December31, 2017
November 2016	$	236,000	December31, 2018
October 2017	$	200,000	December31, 2019
April 2018	$	300,000	December 31, 2020

The Company expects that the share repurchase program will primarily 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 (the “2018 Plan”). Pursuant to the share repurchase program, purchases have been made in the open market or through privately negotiated transactions. The rate at which the Company purchases shares in connection with the share repurchase program may vary from quarter to quarter due to a variety of factors. Purchases with respect to such program are set forth in the table below:

Nine Months Ended September 30:	Number of Shares Purchased		Average Price Per Share
2017		5,838,520	$	43.25
2018		5,797,789	$	52.88

During the nine month periods ended September 30, 2018 and 2017, certain of our executive officers received Class A common stock in connection with the vesting or settlement of previously-granted deferred equity incentive awards. The vesting or settlement of such equity awards gave rise to a tax payable by the executive officers, and, consistent with our past practice, the Company purchased shares of Class A common stock from the executive officers equal in value to all or a portion of the estimated amount of such tax. In addition, during the nine month periods ended September 30, 2018 and 2017, the Company purchased shares of Class A common stock from certain of our executive officers. The aggregate value of all such purchases during the nine month periods ended September 30, 2018 and 2017 was approximately $16,400 and $14,700, respectively.

As of September 30, 2018, a total of $241,793 of share repurchase authorization remained available under the Company’s share repurchase program, which will expire on December 31, 2020.

In addition, on October 24, 2018, the Board of Directors of Lazard authorized the repurchase of up to $300,000 of additional shares of Class A common stock, which authorization will expire on December 31, 2020, bringing the total share repurchase authorization as of October 24, 2018 to approximately $524,000.

During the nine month period ended September 30, 2018, the Company had in place trading plans under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), pursuant to which it effected stock repurchases in the open market.

Preferred Stock—Lazard Ltd has 15,000,000 authorized shares of preferred stock, par value $0.01 per share, inclusive of its Series A and Series B preferred stock. Series A and Series B preferred shares were issued in connection with certain prior year business acquisitions and were each non-participating securities convertible into Class A common stock, and had no voting or dividend rights. As of both September 30, 2018 and December 31, 2017, no shares of Series A or Series B preferred stock were outstanding.

Accumulated Other Comprehensive Income (Loss), Net of Tax—The tables below reflect the balances of each component of AOCI at September 30, 2018 and 2017 and activity during the three month and nine month periods then ended:

	Three Months Ended September 30, 2018
	Currency Translation Adjustments			Employee Benefit Plans			Total AOCI			Amount Attributable to Noncontrolling Interests			Total Lazard Ltd AOCI
Balance, July 1, 2018	$	(109,642	)	$	(143,859	)	$	(253,501	)	$	(2	)	$	(253,499	)
Activity:
Other comprehensive income (loss) before    reclassifications		(8,676	)		863			(7,813	)		2			(7,815	)
Adjustments for items reclassified to earnings,    net of tax		-			949			949			-			949
Net other comprehensive income (loss)		(8,676	)		1,812			(6,864	)		2			(6,866	)
Balance, September 30, 2018	$	(118,318	)	$	(142,047	)	$	(260,365	)	$	-		$	(260,365	)

	Nine Months Ended September 30, 2018
	Currency Translation Adjustments			Employee Benefit Plans			Total AOCI			Amount Attributable to Noncontrolling Interests			Total Lazard Ltd AOCI
Balance, January 1, 2018	$	(83,535	)	$	(148,984	)	$	(232,519	)	$	(1	)	$	(232,518	)
Activity:
Other comprehensive income (loss) before    reclassifications		(34,783	)		4,149			(30,634	)		1			(30,635	)
Adjustments for items reclassified to earnings,    net of tax		-			2,788			2,788			-			2,788
Net other comprehensive income (loss)		(34,783	)		6,937			(27,846	)		1			(27,847	)
Balance, September 30, 2018	$	(118,318	)	$	(142,047	)	$	(260,365	)	$	-		$	(260,365	)

	Three Months Ended September 30, 2017
	Currency Translation Adjustments			Employee Benefit Plans			Total AOCI			Amount Attributable to Noncontrolling Interests			Total Lazard Ltd AOCI
Balance, July 1, 2017	$	(112,105	)	$	(165,682	)	$	(277,787	)	$	(2	)	$	(277,785	)
Activity:
Other comprehensive income (loss) before    reclassifications		19,748			(4,715	)		15,033			2			15,031
Adjustments for items reclassified to earnings,    net of tax		-			1,081			1,081			-			1,081
Net other comprehensive income (loss)		19,748			(3,634	)		16,114			2			16,112
Balance, September 30, 2017	$	(92,357	)	$	(169,316	)	$	(261,673	)	$	-		$	(261,673	)

	Nine Months Ended September 30, 2017
	Currency Translation Adjustments			Employee Benefit Plans			Total AOCI			Amount Attributable to Noncontrolling Interests			Total Lazard Ltd AOCI
Balance, January 1, 2017	$	(155,204	)	$	(159,020	)	$	(314,224	)	$	(2	)	$	(314,222	)
Activity:
Other comprehensive income (loss) before    reclassifications		62,847			(13,819	)		49,028			2			49,026
Adjustments for items reclassified to earnings,    net of tax		-			3,523			3,523			-			3,523
Net other comprehensive income (loss)		62,847			(10,296	)		52,551			2			52,549
Balance, September 30, 2017	$	(92,357	)	$	(169,316	)	$	(261,673	)	$	-		$	(261,673	)

The table below reflects adjustments for items reclassified out of AOCI, by component, for the three month and nine month periods ended September 30, 2018 and 2017:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Amortization relating to employee benefit plans (a)	$	1,213	$	1,285	$	3,736	$	4,199
Less - related income taxes		264		204		948		676
Total reclassifications, net of tax	$	949	$	1,081	$	2,788	$	3,523

(a) Included in the computation of net periodic benefit cost (see Note 14). Such amounts are included in “operating expenses—other” on the condensed consolidated statements of operations.

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

The tables below summarize net income attributable to noncontrolling interests for the three month and nine month periods ended September 30, 2018 and 2017 and noncontrolling interests as of September 30, 2018 and December 31, 2017 in the Company’s condensed consolidated financial statements:

	Net Income Attributable to Noncontrolling Interests
	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Edgewater	$	1,651	$	2,260	$	5,034	$	5,657
Other		-		-		2		3
Total	$	1,651	$	2,260	$	5,036	$	5,660

	Noncontrolling Interests as of
	September 30,		December 31,
	2018		2017
Edgewater	$	53,902	$	58,568
Other		558		534
Total	$	54,460	$	59,102

Dividends Declared, October 24, 2018—On October 24, 2018, the Board of Directors of Lazard declared a quarterly dividend of $0.44 per share on our Class A common stock, payable on November 16, 2018, to stockholders of record on November 5, 2018.

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Incentive Plans

9 Months Ended

Sep. 30, 2018

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Incentive Plans

13. INCENTIVE PLANS

Share-Based Incentive Plan Awards

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 and nine month periods ended September 30, 2018 and 2017 is presented below.

Shares Available Under the 2018 Plan, 2008 Plan and 2005 Plan

The 2018 Plan became effective on April 24, 2018 and replaced the 2008 Plan, which was terminated on April 24, 2018. The 2018 Plan authorizes the issuance of up to 30,000,000 shares of Class A common stock pursuant to the grant or exercise of stock options, stock appreciation rights, restricted stock units (“RSUs”), performance-based restricted stock units (“PRSUs”) and other share-based awards.

The 2008 Plan authorized the issuance of shares of Class A 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 Class A 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 unvested awards granted under the 2008 Plan before its termination remain outstanding and continue to be subject to its terms.

The 2005 Plan authorized the issuance of up to 25,000,000 shares of Class A common stock pursuant to the grant or exercise of stock options, stock appreciation rights, RSUs and other share-based awards. The 2005 Plan expired in the second quarter of 2015, although unvested deferred stock unit (“DSU”) awards granted under the 2005 Plan before its expiration remain outstanding and 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 and restricted stock awards) and “professional services” expense (with respect to DSUs) within the Company’s accompanying condensed consolidated statements of operations for the three month and nine month periods ended September 30, 2018 and 2017:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Share-based incentive awards:
RSUs	$	38,121	$	39,898	$	154,643	$	150,193
PRSUs		3,107		9,896		31,125		38,095
Restricted Stock		6,950		7,697		30,323		30,507
DSUs		179		156		2,096		1,853
Total	$	48,357	$	57,647	$	218,187	$	220,648

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

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

The Company’s share-based incentive plans and awards are described below.

RSUs and DSUs

RSUs generally require future service as a condition for the delivery of the underlying shares of Class A common stock (unless the recipient is then eligible for retirement under the Company’s retirement policy) and convert into shares of Class A common stock on a one-for-one basis after the stipulated vesting periods. PRSUs, which are RSUs that are also subject to service-based vesting conditions, have additional performance conditions, and are described below. The grant date fair value of the RSUs, net of an estimated forfeiture rate, is amortized over the vesting periods or requisite service periods (generally one-third after two years, and the remaining two-thirds after the third year), and is adjusted for actual forfeitures over such period.

RSUs generally include a dividend participation right that provides that during vesting periods each RSU is attributed additional RSUs (or fractions thereof) equivalent to any dividends paid on Class A common stock during such period. During the nine month periods ended September 30, 2018 and 2017, issuances of RSUs pertaining to such dividend participation rights and respective charges to “retained earnings”, net of estimated forfeitures (with corresponding credits to “additional paid-in-capital”), consisted of the following:

	Nine Months Ended
	September 30,
	2018		2017
Number of RSUs issued		746,324		866,914
Charges to retained earnings, net of estimated forfeitures	$	38,923	$	36,482

Non-executive members of the Board of Directors (“Non-Executive Directors”) receive approximately 55% of their annual compensation for service on the Board of Directors and its committees in the form of DSUs, which resulted in 30,463 and 31,280 DSUs granted during the nine month periods ended September 30, 2018 and 2017, respectively.  Their remaining compensation is payable in cash, which they may elect to receive in the form of additional DSUs under the Directors’ Fee Deferral Unit Plan described below. DSUs are convertible into shares of Class A common stock at the time of cessation of service to the Board of Directors and, for purposes of calculating diluted net income per share, are included in the diluted weighted average shares of Class A common stock outstanding using the “treasury stock” method. DSUs include a cash dividend participation right equivalent to dividends paid on Class A common stock.

The Company’s Directors’ Fee Deferral Unit Plan permits the Non-Executive Directors to elect to receive additional DSUs in lieu of some or all of their cash fees. The number of DSUs granted to a Non-Executive Director pursuant to this election will equal the value of cash fees that the applicable Non-Executive Director has elected to forego pursuant to such election, divided by the market value of a share of Class A common stock on the date immediately preceding the date of the grant. During the nine month periods ended September 30, 2018 and 2017, 9,837 and 10,541 DSUs, respectively, had been granted pursuant to such Plan.

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

The following is a summary of activity relating to RSUs and DSUs during the nine month periods ended September 30, 2018 and 2017:

	RSUs					DSUs
	Units			Weighted Average Grant Date Fair Value		Units			Weighted Average Grant Date Fair Value
Balance, January 1, 2018		12,919,846		$	40.23		278,422		$	37.46
Granted (including 746,324 RSUs relating to dividend    participation)		4,096,939		$	53.78		40,300		$	52.00
Forfeited		(130,138	)	$	45.11		-			-
Vested		(5,603,901	)	$	42.88		-			-
Balance, September 30, 2018		11,282,746		$	43.78		318,722		$	39.30
Balance, January 1, 2017		11,698,138		$	40.65		276,725		$	36.05
Granted (including 866,914 RSUs relating to dividend    participation)		5,294,156		$	43.01		41,821		$	44.30
Forfeited		(162,320	)	$	39.97		-			-
Vested		(3,977,477	)	$	45.27		(43,465	)	$	35.77
Balance, September 30, 2017		12,852,497		$	40.20		275,081		$	37.35

In connection with RSUs that vested during the nine month periods ended September 30, 2018 and 2017, the Company satisfied its minimum statutory tax withholding requirements in lieu of delivering 1,640,513 and 1,282,843 shares of Class A common stock during such respective nine month periods. Accordingly, 3,963,388 and 2,694,634 shares of Class A common stock held by the Company were delivered during the nine month periods ended September 30, 2018 and 2017, respectively.

As of September 30, 2018, estimated unrecognized RSU compensation expense was approximately $166,534, with such expense expected to be recognized over a weighted average period of approximately 0.8 years subsequent to September 30, 2018.

Restricted Stock

The following is a summary of activity related to shares of restricted Class A common stock associated with compensation arrangements during the nine month periods ended September 30, 2018 and 2017:

	Restricted Shares			Weighted Average Grant Date Fair Value
Balance, January 1, 2018		1,938,160		$	40.54
Granted		529,987		$	54.45
Forfeited		(30,950	)	$	46.31
Vested		(869,312	)	$	44.15
Balance, September 30, 2018		1,567,885		$	43.13
Balance, January 1, 2017		1,655,073		$	40.95
Granted		841,355		$	42.58
Forfeited		(65,086	)	$	40.80
Vested		(483,811	)	$	45.42
Balance, September 30, 2017		1,947,531		$	40.54

In connection with shares of restricted Class A common stock that vested during the nine month periods ended September 30, 2018 and 2017, the Company satisfied its minimum statutory tax withholding requirements in lieu of delivering 290,321 and 147,775 shares of Class A common stock during such respective nine month periods. Accordingly, 578,991 and 336,036 shares of Class A common stock held by the Company were delivered during the nine month periods ended September 30, 2018 and 2017, respectively.

The restricted stock awards include a cash dividend participation right equivalent to dividends paid on Class A common stock during the period, which will vest concurrently with the underlying restricted stock award. At September 30, 2018, estimated unrecognized restricted stock expense was approximately $24,463, with such expense to be recognized over a weighted average period of approximately 0.8 years subsequent to September 30, 2018.

PRSUs

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

The following is a summary of activity relating to PRSUs during the nine month periods ended September 30, 2018 and 2017:

	PRSUs			Weighted Average Grant Date Fair Value
Balance, January 1, 2018		1,591,693		$	42.46
Granted (a)		399,869		$	56.80
Vested		(799,402	)	$	46.74
Balance, September 30, 2018		1,192,160		$	44.39
Balance, January 1, 2017		1,590,756		$	40.76
Granted (a)		458,113		$	43.76
Vested		(825,565	)	$	42.27
Balance, September 30, 2017		1,223,304		$	40.86

(a) Represents PRSU awards granted during the relevant year at the target payout level.

In connection with certain PRSUs that vested or were settled during the nine month periods ended September 30, 2018 and 2017, the Company satisfied its minimum statutory tax withholding requirements in lieu of delivering 91,962 and 127,530 shares of Class A common stock during such respective nine month periods. Accordingly, 707,440 and 698,035 shares of Class A common stock held by the Company were delivered during the nine month periods ended September 30, 2018 and 2017, respectively.

Compensation expense recognized for PRSU awards is determined by multiplying the number of shares of Class A common stock underlying such awards that, based on the Company’s estimate, are considered probable of vesting, by the grant date fair value. As of September 30, 2018, the total estimated unrecognized compensation expense was approximately $9,487, and the Company expects to amortize such expense over a weighted-average period of approximately 0.8 years subsequent to September 30, 2018.

LFI and Other Similar Deferred Compensation Arrangements

Commencing in February 2011, the Company granted LFI to eligible employees. In connection with LFI and other similar deferred compensation arrangements, which generally require future service as a condition for vesting, the Company recorded a prepaid compensation asset and a corresponding compensation liability on the grant date based upon the fair value of the award. The prepaid asset is amortized on a straight-line basis over the applicable vesting periods or requisite service periods (which are generally similar to the comparable periods for RSUs), and is charged to “compensation and benefits” expense within the Company’s condensed consolidated statement of operations. LFI and similar deferred compensation arrangements that do not require future service are expensed immediately. The related compensation liability is accounted for at fair value as a derivative liability, which contemplates the impact of estimated forfeitures, and is adjusted for changes in fair value primarily related to changes in value of the underlying investments.

The following is a summary of activity relating to LFI and other similar deferred compensation arrangements during the nine month periods ended September 30, 2018 and 2017:

	Prepaid Compensation Asset			Compensation Liability
Balance, January 1, 2018	$	60,355		$	182,301
Granted		104,740			104,740
Settled		-			(85,335	)
Forfeited		(1,166	)		(1,767	)
Amortization		(68,145	)		-
Change in fair value related to:
Increase in fair value of underlying investments		-			1,712
Adjustment for estimated forfeitures		-			3,730
Other		(1,489	)		(1,403	)
Balance, September 30, 2018	$	94,295		$	203,978

	Prepaid Compensation Asset			Compensation Liability
Balance, January 1, 2017	$	49,650		$	170,388
Granted		77,580			77,580
Settled		-			(95,718	)
Forfeited		(866	)		(1,647	)
Amortization		(52,702	)		-
Change in fair value related to:
Increase in fair value of underlying investments		-			17,981
Adjustment for estimated forfeitures	-				5,333
Other		1,515			1,833
Balance, September 30, 2017	$	75,177		$	175,750

The amortization of the prepaid compensation asset will generally be recognized over a weighted average period of approximately 0.9 years subsequent to September 30, 2018.

The following is a summary of the impact of LFI and other similar deferred compensation arrangements on “compensation and benefits” expense within the accompanying condensed consolidated statements of operations for the three month and nine month periods ended September 30, 2018 and 2017:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Amortization, net of forfeitures	$	19,145	$	15,961	$	71,274	$	57,254
Change in the fair value of underlying investments		3,647		4,875		1,712		17,981
Total	$	22,792	$	20,836	$	72,986	$	75,235

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Employee Benefit Plans

9 Months Ended

Sep. 30, 2018

Compensation And Retirement Disclosure [Abstract]

Employee Benefit Plans

14. EMPLOYEE BENEFIT PLANS

The Company provides retirement and other post-retirement benefits to certain of its employees through defined benefit pension plans (the “pension plans”). 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 (see Note 2).

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 and nine month periods ended September 30, 2018 and 2017:

	Three Months Ended September 30,
	2018			2017
Components of Net Periodic Benefit Cost (Credit):
Service cost	$	217		$	373
Interest cost		3,822			4,191
Expected return on plan assets		(7,315	)		(6,295	)
Amortization of:
Prior service cost		-			-
Net actuarial loss (gain)		1,213			1,285
Net periodic benefit cost (credit)	$	(2,063	)	$	(446	)

	Nine Months Ended September 30,
	2018			2017
Components of Net Periodic Benefit Cost (Credit):
Service cost	$	670		$	1,048
Interest cost		11,861			12,258
Expected return on plan assets		(22,681	)		(18,855	)
Amortization of:
Prior service cost		-			30
Net actuarial loss (gain)		3,736			4,169
Net periodic benefit cost (credit)	$	(6,414	)	$	(1,350	)

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Income Taxes

9 Months Ended

Sep. 30, 2018

Income Tax Disclosure [Abstract]

Income Taxes

15. INCOME TAXES

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

On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Act”) was enacted. The Tax Act significantly revises the U.S. corporate income tax system by, among other changes, lowering the corporate income tax rate from 35% to 21%, implementing a partial territorial tax system and imposing a one-time repatriation tax on the deemed repatriated earnings of foreign subsidiaries. The Tax Act also includes several provisions that may limit the benefit of the tax rate reduction, such as restricting the deductibility of interest expense and other corporate business expenses. The Tax Act further includes anti-base erosion provisions such as the base erosion and anti-abuse tax and tax on global intangible low-taxed income.

As a result of the reduction of the U.S. federal corporate tax rate to 21%, the Company was required to remeasure its deferred tax assets and liabilities at the new federal income tax rate of 21% based on the balances that existed on the date of the enactment of the Tax Act. The lower corporate tax rate resulted in a reduction of our net deferred tax assets by approximately $420,000 in the year ended December 31, 2017. See also Note 17 for the impact of the Tax Act on the tax receivable agreement obligation.

The Tax Act also requires companies to pay a one-time repatriation tax on previously unremitted earnings of certain non-U.S. corporate subsidiaries. Most of the Company’s operations outside the U.S. are conducted in “pass-through” entities for U.S. income tax purposes, and, as a result, the deemed repatriation transition tax does not apply to these pass-through entities or their earnings. The Company instead provides for U.S. income taxes on a current basis for those earnings. The Company also conducts operations outside the U.S. through foreign corporate subsidiaries, and the Company recorded a provisional amount ofdeferred tax expense in the year ended December 31, 2017 related to the one-time repatriation tax on the foreign earnings of those corporate subsidiaries.

In accordance with the guidance provided by Staff Accounting Bulletin No. 118, the Company has recognized the provisional tax impact related to the one-time deemed repatriation tax on certain foreign earnings and the remeasurement of our deferred tax assets. The impact of the Tax Act on the Company may differ from these provisional estimates, due to, among other items, the issuance of additional regulatory guidance, our interpretations of the provisions of the Tax Act, changes to certain estimates and amounts related to the earnings and profits of certain subsidiaries and the filing of our tax returns. We will recognize any changes to the provisional amounts as we refine our estimates. We expect to complete our analysis of the provisional items, including the one-time repatriation tax, in the fourth quarter of 2018.

The Company recorded income tax provisions of $29,956 and $105,684 for the three month and nine month periods ended September 30, 2018, respectively, and $32,742 and $124,109 for the three month and nine month periods ended September 30, 2017, respectively, representing effective tax rates of 21.6%, 20.2%, 22.7% and 26.6%, respectively. The difference between the U.S. federal statutory rate of 21.0% and 35.0% for 2018 and 2017, respectively, and the effective tax rates reflected above principally relates to (i) taxes payable to foreign jurisdictions that are not offset against U.S. income taxes, (ii) foreign source income (loss) not subject to U.S. income taxes (including interest on intercompany financings), (iii) change in the U.S. federal valuation allowance affecting the provision for income taxes, (iv) excess net tax benefit for share-based incentive compensation, and (v) U.S. state and local taxes, which are incremental to the U.S. federal statutory tax rate.

On January 1, 2017, the Company adopted new accounting guidance on share-based incentive compensation. As a result of the adoption of this new guidance, the Company recognized excess tax benefits of $32,287 and $9,053 from the vesting of share-based incentive compensation in the provision for income taxes in the condensed consolidated statements of operations for the nine month periods ended September 30, 2018 and 2017, respectively. The Company also recorded deferred tax assets of $81,544, net of a valuation allowance of $12,090, as of January 1, 2017, for previously unrecognized excess tax benefits (including tax benefits from dividends or dividend equivalents) on share-based incentive compensation, with an offsetting adjustment to retained earnings.

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Net Income Per Share of Class A Common Stock

9 Months Ended

Sep. 30, 2018

Earnings Per Share [Abstract]

Net Income Per Share of Class A Common Stock

16. NET INCOME PER SHARE OF CLASS A COMMON STOCK

The Company’s basic and diluted net income per share calculations for the three month and nine month periods ended September 30, 2018 and 2017 are computed as described below.

Basic Net Income Per Share

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

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

Diluted Net Income Per Share

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

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

The calculations of the Company’s basic and diluted net income per share and weighted average shares outstanding for the three month and nine month periods ended September 30, 2018 and 2017 are presented below:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Net income attributable to Lazard Ltd - basic	$	107,074	$	109,210	$	413,729	$	337,141
Net income attributable to Lazard Ltd - diluted	$	107,074	$	109,210	$	413,729	$	337,141
Weighted average number of shares of Class A common    stock outstanding		119,197,949		120,987,607		119,647,775		121,868,223
Add - adjustment for shares of Class A common stock    issuable on a non-contingent basis		258,567		255,991		249,851		274,080
Weighted average number of shares of Class A common    stock outstanding - basic		119,456,516		121,243,598		119,897,626		122,142,303
Add - dilutive effect, as applicable, of:
Weighted average number of incremental shares of Class A    common stock issuable from share-based    incentive compensation		10,403,212		11,150,066		10,852,766		10,265,248
Weighted average number of shares of Class A common stock    outstanding - diluted		129,859,728		132,393,664		130,750,392		132,407,551
Net income attributable to Lazard Ltd per share of Class    A common stock:
Basic	$	0.90	$	0.90	$	3.45	$	2.76
Diluted	$	0.82	$	0.82	$	3.16	$	2.55

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Related Parties

9 Months Ended

Sep. 30, 2018

Related Party Transactions [Abstract]

Related Parties

17. RELATED PARTIES

Sponsored Funds

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 $158,425 and $510,414 for the three month and nine month periods ended September 30, 2018, respectively, and $163,767 and $471,727 for the three month and nine month periods ended September 30, 2017, respectively, and are included in “asset management fees” on the condensed consolidated statements of operations. Of such amounts, $69,430 and $69,107 remained as receivables at September 30, 2018 and December 31, 2017, respectively, and are included in “fees receivable” on the condensed consolidated statements of financial condition.

Tax Receivable Agreement

The Second Amended and Restated Tax Receivable Agreement, dated as of October 26, 2015 (the “Amended and Restated Tax Receivable Agreement”), between Lazard and LTBP Trust, a Delaware statutory trust (the “Trust”), provides for the payment by our subsidiaries to the Trust of (i) approximately 45% of the amount of cash savings, if any, in U.S. federal, state and local income tax or franchise tax that we actually realize as a result of certain increases in tax basis and of certain other tax benefits related to the Amended and Restated Tax Receivable Agreement, and (ii) an amount that we currently expect will approximate 85% of the cash tax savings that may arise from tax benefits attributable to payments under the Amended and Restated Tax Receivable Agreement. Our subsidiaries expect to benefit from the balance of cash savings, if any, in income tax that our subsidiaries realize. Any amount paid by our subsidiaries to the Trust will generally be distributed to the owners of the Trust, who include certain of our executive officers, in proportion to their beneficial interests in the Trust.

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

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

As described in Note 15, the Tax Act reduced the U.S. corporate tax rate from 35% to 21%, which required the Company to remeasure the tax receivable agreement obligation. Pursuant to the change in the U.S. corporate tax rate, in 2017, the Company reduced the tax receivable agreement obligation by $202,546. The cumulative liability relating to our obligations under the Amended and Restated Tax Receivable Agreement as of September 30, 2018 and December 31, 2017 was $277,163 and $310,275, respectively, and is recorded in “tax receivable agreement obligation” on the condensed consolidated statements of financial condition. The balance at September 30, 2018 reflects payments made under the Amended and Restated Tax Receivable Agreement in the nine months ended September 30, 2018 of $33,112.

Other

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

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Regulatory Authorities

9 Months Ended

Sep. 30, 2018

Regulatory Capital Requirements [Abstract]

Regulatory Authorities

18. REGULATORY AUTHORITIES

LFNY is a U.S. registered broker-dealer and is subject to the net capital requirements of Rule 15c3-1 under the Exchange Act. Under the basic method permitted by this rule, the minimum required net capital, as defined, is a specified fixed percentage (6 ²/₃%) of total aggregate indebtedness recorded in LFNY’s Financial and Operational Combined Uniform Single (“FOCUS”) report filed with the Financial Industry Regulatory Authority (“FINRA”), or $100, whichever is greater. In addition, the ratio of aggregate indebtedness (as defined) to net capital may not exceed 15:1. At September 30, 2018, LFNY’s regulatory net capital was $71,698, which exceeded the minimum requirement by $69,461. LFNY’s aggregate indebtedness to net capital ratio was 0.47:1 as of September 30, 2018.

Certain U.K. subsidiaries of the Company, including LCL, Lazard Fund Managers Limited and Lazard Asset Management Limited (collectively, the “U.K. Subsidiaries”) are regulated by the Financial Conduct Authority. At September 30, 2018, the aggregate regulatory net capital of the U.K. Subsidiaries was $165,474, which exceeded the minimum requirement by $145,285.

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 September 30, 2018, the consolidated regulatory net capital of CFLF was $129,777, which exceeded the minimum requirement set for regulatory capital levels by $69,918. 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 June 30, 2018, the regulatory net capital of the combined European regulated group was $197,797, which exceeded the minimum requirement set for regulatory capital levels by $94,827. Additionally, the combined European regulated group, together with our European Financial Advisory entities, is required to perform an annual risk assessment and provide certain other information on a periodic basis, including financial reports and information relating to financial performance, balance sheet data and capital structure.

Certain other U.S. and non-U.S. subsidiaries are subject to various capital adequacy requirements promulgated by various regulatory and exchange authorities in the countries in which they operate. At September 30, 2018, for those subsidiaries with regulatory capital requirements, their aggregate net capital was $148,447, which exceeded the minimum required capital by $120,949.

At September 30, 2018, 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.

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Segment Information

9 Months Ended

Sep. 30, 2018

Segment Reporting [Abstract]

Segment Information

19. SEGMENT INFORMATION

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

The Company’s segment information for the three month and nine month periods ended September 30, 2018 and 2017 is prepared using the following methodology:

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

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

• Segment assets are based on those directly associated with each segment, and include an allocation of certain assets relating to various segments, based on the most relevant measures applicable, including headcount, square footage and other factors.

The Company allocates investment gains and losses, 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						Nine Months Ended
		September 30,						September 30,
		2018			2017			2018			2017
Financial Advisory	Net Revenue	$	310,418		$	305,890		$	1,141,628		$	1,052,584
	Operating Expenses		250,651			245,465			893,524			821,935
	Operating Income	$	59,767		$	60,425		$	248,104		$	230,649
Asset Management	Net Revenue	$	325,240		$	320,487		$	1,032,111		$	913,728
	Operating Expenses		211,564			217,233			670,794			621,885
	Operating Income	$	113,676		$	103,254		$	361,317		$	291,843
Corporate	Net Revenue	$	(9,177	)	$	(1,518	)	$	(34,622	)	$	(809	)
	Operating Expenses		25,585			17,949			50,350			54,773
	Operating Loss	$	(34,762	)	$	(19,467	)	$	(84,972	)	$	(55,582	)
Total	Net Revenue	$	626,481		$	624,859		$	2,139,117		$	1,965,503
	Operating Expenses		487,800			480,647			1,614,668			1,498,593
	Operating Income	$	138,681		$	144,212		$	524,449		$	466,910

	As Of
	September 30, 2018		December 31, 2017
Total Assets
Financial Advisory	$	876,289	$	843,142
Asset Management		696,400		756,398
Corporate		3,372,089		3,329,137
Total	$	4,944,778	$	4,928,677

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Organization and Basis of Presentation (Policies)

9 Months Ended

Sep. 30, 2018

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Organization

Organization

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

Lazard Ltd indirectly held 100% of all outstanding Lazard Group common membership interests as of September 30, 2018 and December 31, 2017. Lazard Ltd, through its control of the managing members of Lazard Group, controls Lazard Group, which is governed by an Amended and Restated Operating Agreement dated as of October 26, 2015, as amended (the “Operating Agreement”).

Lazard Ltd’s primary operating asset is its indirect ownership of the common membership interests of, and managing member interests in, Lazard Group, whose principal operating activities are included in two business segments:

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

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

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

Basis of Presentation

Basis of Presentation

The accompanying condensed consolidated financial statements of Lazard Ltd have been prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States of America (“U.S. GAAP”) for complete financial statements and should be read in conjunction with the audited consolidated financial statements and notes thereto included in Lazard Ltd’s Annual Report on Form 10-K for the year ended December 31, 2017. The accompanying December 31, 2017 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 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 and nine month periods ended September 30, 2018 are not indicative of the results to be expected for any future interim or annual period.

The condensed consolidated financial statements include Lazard Ltd, Lazard Group and Lazard Group’s principal operating subsidiaries: Lazard Frères & Co. LLC (“LFNY”), a New York limited liability company, along with its subsidiaries, including Lazard Asset Management LLC and its subsidiaries (collectively referred to as “LAM”); the French limited liability companies Compagnie Financière Lazard Frères SAS (“CFLF”) along with its subsidiaries, LFB and Lazard Frères Gestion SAS (“LFG”), and Maison Lazard SAS and its subsidiaries; and Lazard & Co., Limited (“LCL”), through Lazard & Co., Holdings Limited (“LCH”), an English private limited company, together with their jointly owned affiliates and subsidiaries.

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

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

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

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

Certain prior period amounts have been reclassified to conform to the current period presentation, specifically related to the adoption of new guidance impacting the condensed consolidated statements of cash flows (see Note 2).

Recent Accounting Developments

Revenue from Contracts with Customers—In May 2014, the FASB issued comprehensive new revenue recognition guidance. The guidance requires a company to recognize revenue when it transfers promised services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those services and requires enhanced disclosures. The guidance also changes the accounting for certain contract costs, including whether they may be offset against revenue in the condensed consolidated statements of operations. On July 9, 2015, the FASB approved the deferral of the effective date of the new revenue guidance by one year to annual reporting periods beginning after December 15, 2017. The guidance may be adopted using a full retrospective approach or a modified cumulative effect approach. The Company adopted the revenue recognition guidance upon its effective date of January 1, 2018 using the modified cumulative effect approach. The Company applied the new guidance to contracts that have not yet been completed as of the adoption date. The Company’s adoption efforts included the identification of revenue within the scope of the guidance and the evaluation of revenue contracts. 

The Company evaluated the potential impact of the new guidance, including (i) the timing of revenue recognition for Financial Advisory and Asset Management fees and (ii) the presentation of certain contract costs. With respect to revenue recognition, the Company assessed the impact of the new guidance on the recognition of fees for Financial Advisory (e.g., transaction completion, transaction announcement and retainers), and Asset Management (e.g., management and incentive fees), including the potential requirement under the new guidance to recognize certain transaction completion fees in periods prior to the periods in which the applicable transactions close. The Company’s assessment included an analysis of whether the Company’s fulfillment of its performance obligations would be deemed to occur over time, or at specific points in time, under the new guidance. Specifically, recognition would be deemed to occur over time if the client receives and consumes benefits from the services as the Company performs the services. The Company concluded that Financial Advisory and Asset Management fees would typically be recognized over time as performance occurs, subject to constraints, using an appropriate measure of progress based on resources consumed, which is consistent with when the client receives benefits. There was no material impact to the Company’s recognition of revenue upon adoption of the new guidance.

The new guidance requires the Company to prospectively present certain contract costs on a gross basis. The most significant changes with respect to presentation relate to (a) certain distribution costs within our Asset Management business and (b) certain reimbursable deal costs within our Financial Advisory business, both of which were previously presented net against revenues and are now presented as expenses on a gross basis under the new guidance because the Company is primarily responsible for fulfilling the promise of the arrangement.  For the three month and nine month periods ended September 30, 2018, the presentation of such costs on a gross basis resulted in an increase to net revenue of $24,392 and $72,006, respectively, primarily comprised of increases to asset management fees and investment banking and other advisory fees. In addition, there was a corresponding increase to operating expenses of $24,392 and $72,006, respectively, primarily comprised of an increase to distribution costs presented within fund administration and outsourced services and an increase to reimbursable deal costs presented within marketing and business development. These amounts would have been presented on a net basis prior to the adoption of the new guidance, and there was no material impact to net income as a result of the gross basis of presentation under the new guidance.

See Note 3 for further information on contracts within the scope of the new guidance.

Classification of Certain Cash Receipts and Cash Payments—In August and November 2016, the FASB issued updated guidance which clarifies how a company should classify certain cash receipts and cash payments on the statement of cash flows and clarifies that restricted cash should be included in the total of cash and cash equivalents on the statement of cash flows. The new guidance for both updates is effective for annual and interim periods beginning after December 15, 2017 and is to be applied on a retrospective basis. The Company adopted this new guidance on January 1, 2018. The adoption of the new guidance in the first quarter of 2018 resulted in the reclassification of “cash deposited with clearing organizations and other segregated cash” and “deposits with banks and short-term investments” from operating activities to components of “cash and cash equivalents and restricted cash” on the condensed consolidated statement of cash flows. In addition, the Company reclassified cash flows related to customer deposits from operating activities to financing activities. This resulted in changes in deposits with banks and short-term investments and customer deposits no longer being reflected in cash flows from operating activities. Except for the reclassification of these items on the condensed consolidated statement of cash flows, the new guidance had no impact on the Company’s financial statements.

Clarifying the Definition of a Business—In January 2017, the FASB issued updated guidance to clarify the definition of a business within the context of business combinations. The updated guidance requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, such asset or group of assets is not a business. This updated guidance is expected to reduce the number of transactions that need to be further evaluated as business combinations. If further evaluation is necessary, the updated guidance will require that a business set include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output. The updated guidance will remove the evaluation of whether a market participant could replace missing elements. The new guidance is effective for annual and interim periods beginning after December 15, 2017 and is to be applied on a prospective basis. The Company adopted the new guidance on January 1, 2018 and it will be applied to business combinations on a prospective basis.

Compensation—Retirement Benefits—Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost—In March 2016, the FASB issued updated guidance on the presentation of net benefit cost in the statement of operations and the components eligible for capitalization. The new guidance requires that only the service cost component of net periodic pension cost and net periodic postretirement benefit cost be presented with other employee compensation costs in operating expenses, applied on a retrospective basis. The other components of net benefit cost, including amortization of prior service cost, and gains and losses from settlements and curtailments, are included in other operating expenses. The new guidance also stipulates that only the service cost component of net benefit cost is eligible for capitalization, applied on a prospective basis. This new guidance is effective for annual and interim periods beginning after December 15, 2017. The Company adopted the new guidance on January 1, 2018 and there was no material impact to the Company’s financial statements.

Compensation—Stock Compensation: Scope of Modification Accounting—In May 2017, the FASB issued updated guidance on modifications to share-based payment awards. The updated guidance requires entities to account for the effects of a modification to a share-based payment award unless the following are all the same immediately before and after the modification: (i) the fair value of the award, (ii) the vesting conditions of the award, and (iii) the classification of the award as an equity instrument or a liability instrument. This new guidance is effective for annual and interim periods beginning after December 15, 2017 and is to be applied on a prospective basis. The Company adopted the new guidance on January 1, 2018, and there was no material impact to the Company’s financial statements.

Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income—In February 2018, the FASB issued updated guidance on the tax effects of items in “accumulated other comprehensive income (loss), net of tax” (“AOCI”). Specifically, the new guidance will permit, but not require, a reclassification from AOCI to retained earnings for stranded tax effects resulting from the newly enacted federal corporate income tax rate under the Tax Cuts and Jobs Act of 2017 (see Note 15). The amount of the reclassification would be the difference between the historical corporate income tax rate and the newly enacted 21% corporate income tax rate. The new guidance is effective for annual and interim periods beginning after December 15, 2018, with an option to apply it in the period of adoption or on a retrospective basis for each period in which the effect of the change in the U.S. federal corporate income tax rate is recognized. Early adoption of the new guidance is permitted for public business entities for reporting periods for which financial statements have not yet been issued. The Company is currently evaluating the new guidance.

Leases—In February 2016, the FASB issued updated guidance for leases. The guidance requires a lessee to (i) recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, in the statement of financial condition, (ii) recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a generally straight-line basis, and (iii) classify all cash payments within operating activities in the statement of cash flows. The new guidance is effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted. Currently, the Company plans to adopt the new guidance as of the effective date, January 1, 2019, and is considering the practical expedients available. The new guidance is to be applied on a modified retrospective basis.

The Company continues to evaluate the new guidance, and is in the process of evaluating its leasing activities and contracts, as well as processes and internal controls over financial reporting relating to its leasing activities. See Note 11 for further information on the Company's commitments under lease agreements. The population of contracts potentially subject to recognition in the statement of financial condition and their initial measurement remains under evaluation.

Improvements to Nonemployee Share-Based Payment Accounting—In June 2018, the FASB issued updated guidance to simplify the accounting for nonemployee share-based payment transactions. The new guidance generally requires equity-classified nonemployee share-based payment awards to be measured at the grant date, which is the date at which a grantor and grantee reach a mutual understanding of the key terms and conditions of a share-based payment award.  This update generally aligns the accounting for equity-classified share-based payment awards to nonemployees with the measurement date required for employees.  The new guidance is effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted.  Upon adoption, the new guidance would be applied on a modified retrospective basis. The Company is currently evaluating the new guidance.

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

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

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 new guidance is effective for annual and interim reporting periods beginning after December 15, 2019, with early adoption permitted. Upon adoption, the Company may elect to apply the new guidance on either a prospective or retrospective basis. The Company is currently evaluating the new guidance.

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 new guidance is effective for annual and interim reporting periods beginning after December 15, 2019, with early adoption permitted. The Company is currently evaluating the new guidance.

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 new guidance is effective for annual and interim reporting periods beginning after December 15, 2020, with early adoption permitted. The Company is currently evaluating the new guidance.

Revenue Recognition Policy

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.

Derivative Instruments

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.

Fair Value Measurement Policy

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

Level 1. Assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market that Lazard has the ability to access.

Level 2. Assets and liabilities whose values are based on (i) quoted prices for similar assets or liabilities in an active market, or quoted prices for identical or similar assets or liabilities in non-active markets, or (ii) inputs other than quoted prices that are directly observable or derived principally from, or corroborated by, market data.

Level 3. Assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect our own assumptions about the assumptions a market participant would use in pricing the asset or liability. Items included in Level 3 include securities or other financial assets whose trading volume and level of activity have significantly decreased when compared with normal market activity and there is no longer sufficient frequency or volume to provide pricing information on an ongoing basis.

The fair value of 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 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 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 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. See Note 11.

The fair value of derivatives entered into by the Company is 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. 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.

Share-Based Incentive Plan Awards Policy

Share-Based Incentive Plan Awards

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 and nine month periods ended September 30, 2018 and 2017 is presented below.

Shares Available Under the 2018 Plan, 2008 Plan and 2005 Plan

The 2018 Plan became effective on April 24, 2018 and replaced the 2008 Plan, which was terminated on April 24, 2018. The 2018 Plan authorizes the issuance of up to 30,000,000 shares of Class A common stock pursuant to the grant or exercise of stock options, stock appreciation rights, restricted stock units (“RSUs”), performance-based restricted stock units (“PRSUs”) and other share-based awards.

The 2008 Plan authorized the issuance of shares of Class A 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 Class A 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 unvested awards granted under the 2008 Plan before its termination remain outstanding and continue to be subject to its terms.

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

Employer Contributions to Pension Plans

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

Computation of Basic and Diluted Net Income per Share

Basic Net Income Per Share

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

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

Diluted Net Income Per Share

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

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

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Revenue Recognition (Tables)

9 Months Ended

Sep. 30, 2018

Revenue Recognition [Abstract]

Revenue Based on Business Segment Results

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		Nine Months Ended
	September 30, 2018 (d)		September 30, 2018 (d)
Net Revenue:
Financial Advisory (a)	$	310,418	$	1,141,628
Asset Management:
Management Fees and Other (b)	$	323,283	$	1,012,127
Incentive Fees (c)		1,957		19,984
Total Asset Management	$	325,240	$	1,032,111

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Receivables (Tables)

9 Months Ended

Sep. 30, 2018

Receivables [Abstract]

Schedule of Activity in Allowance for Doubtful Accounts

Activity in the allowance for doubtful accounts for the three month and nine month periods ended September 30, 2018 and 2017 was as follows:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Beginning Balance	$	34,956		$	25,094		$	23,746		$	16,386
Bad debt expense, net of recoveries		1,488			4,753			18,106			18,584
Charge-offs, foreign currency translation and other    adjustments		(1,920	)		(2,383	)		(7,328	)		(7,506	)
Ending Balance	$	34,524		$	27,464		$	34,524		$	27,464

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Investments (Tables)

9 Months Ended

Sep. 30, 2018

Investments Schedule [Abstract]

Company's Investments and Securities Sold, Not Yet Purchased

The Company’s investments and securities sold, not yet purchased, consist of the following at September 30, 2018 and December 31, 2017:

	September 30,		December 31,
	2018		2017
Interest-bearing deposits	$	519	$	556
Debt		202,592		6
Equities		36,810		45,257
Funds:
Alternative investments (a)		18,169		20,993
Debt (a)		89,476		84,077
Equity (a)		202,354		199,618
Private equity		59,675		76,679
		369,674		381,367
Total investments		609,595		427,186
Less:
Interest-bearing deposits		519		556
Investments, at fair value	$	609,076	$	426,630
Securities sold, not yet purchased, at fair value (included in “other liabilities”)	$	6,876	$	7,338

(a) Interests in alternative investment funds, debt funds and equity funds include investments with fair values of $9,979, $59,282 and $149,813, respectively, at September 30, 2018 and $11,213, $48,391 and $131,893, respectively, at December 31, 2017, held in order to satisfy the Company’s liability upon vesting of previously granted Lazard Fund Interests (“LFI”) and other similar deferred compensation arrangements. LFI represent grants by the Company to eligible employees of actual or notional interests in a number of Lazard-managed funds, subject to service-based vesting conditions (see Notes 7 and 13).

Schedule of Trading Securities Net Unrealized Investment Gains and Losses

During the three month and nine month periods ended September 30, 2018 and 2017, the Company reported in “revenue-other” on its condensed consolidated statements of operations net unrealized investment gains and losses pertaining to “trading” securities still held as of the reporting date as follows:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018			2017
Net unrealized investment gains (losses)	$	1,972	$	6,949	$	(13,183	)	$	27,932

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2018

Fair Value Disclosures [Abstract]

Schedule of Classification of Investments and Certain Other Assets and Liabilities Measured at Fair Value on Recurring Basis and Investments Measured at NAV

The following tables present, as of September 30, 2018 and December 31, 2017, 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:

	September 30, 2018
	Level 1		Level 2		Level 3		NAV		Total
Assets:
Investments:
Debt	$	202,592	$	-	$	-	$	-	$	202,592
Equities		35,182		-		1,628		-		36,810
Funds:
Alternative investments		17,254		-		-		915		18,169
Debt		89,469		-		-		7		89,476
Equity		202,302		-		-		52		202,354
Private equity		-		-		-		59,675		59,675
Derivatives		-		7,490		-		-		7,490
Total	$	546,799	$	7,490	$	1,628	$	60,649	$	616,566
Liabilities:
Securities sold, not yet purchased	$	6,876	$	-	$	-	$	-	$	6,876
Contingent consideration liability		-		-		12,921		-		12,921
Derivatives		-		206,729		-		-		206,729
Total	$	6,876	$	206,729	$	12,921	$	-	$	226,526

	December 31, 2017
	Level 1		Level 2		Level 3		NAV		Total
Assets:
Investments:
Debt	$	6	$	-	$	-	$	-	$	6
Equities		43,665		-		1,592		-		45,257
Funds:
Alternative investments		17,353		-		-		3,640		20,993
Debt		84,071		-		-		6		84,077
Equity		199,565		-		-		53		199,618
Private equity		-		-		-		76,679		76,679
Derivatives		-		3,732		-		-		3,732
Total	$	344,660	$	3,732	$	1,592	$	80,378	$	430,362
Liabilities:
Securities sold, not yet purchased	$	7,338	$	-	$	-	$	-	$	7,338
Contingent consideration liability		-		-		28,941		-		28,941
Derivatives		-		198,417		-		-		198,417
Total	$	7,338	$	198,417	$	28,941	$	-	$	234,696

Summary of Changes in Fair Value of Company's Level 3 Assets and Liabilities

The following tables provide a summary of changes in fair value of the Company’s Level 3 assets and liabilities for the three month and nine month periods ended September 30, 2018 and 2017:

	Three Months Ended September 30, 2018
	Beginning Balance		NetUnrealized/ Realized Gains/Losses Included In Earnings (a)			Purchases/ Acquisitions		Sales/ Dispositions		Foreign Currency Translation Adjustments			Ending Balance
Assets:
Investments:
Equities	$	1,629	$	-		$	-	$	-	$	(1	)	$	1,628
Total Level 3 Assets	$	1,629	$	-		$	-	$	-	$	(1	)	$	1,628
Liabilities:
Contingent consideration liability	$	19,628	$	(6,707	)	$	-	$	-	$	-		$	12,921
Total Level 3 Liabilities	$	19,628	$	(6,707	)	$	-	$	-	$	-		$	12,921

	Nine Months Ended September 30, 2018
	Beginning Balance		NetUnrealized/ Realized Gains/Losses Included In Earnings (a)			Purchases/ Acquisitions		Sales/ Dispositions		Foreign Currency Translation Adjustments			Ending Balance
Assets:
Investments:
Equities	$	1,592	$	61		$	1	$	-	$	(26	)	$	1,628
Total Level 3 Assets	$	1,592	$	61		$	1	$	-	$	(26	)	$	1,628
Liabilities:
Contingent consideration liability	$	28,941	$	(16,020	)	$	-	$	-	$	-		$	12,921
Total Level 3 Liabilities	$	28,941	$	(16,020	)	$	-	$	-	$	-		$	12,921

	Three Months Ended September 30, 2017
	Beginning Balance		Net Unrealized/ Realized Gains/Losses Included In Earnings (a)			Purchases/ Acquisitions		Sales/ Dispositions			Foreign Currency Translation Adjustments		Ending Balance
Assets:
Investments:
Equities	$	3,072	$	130		$	-	$	(1,661	)	$	6	$	1,547
Total Level 3 Assets	$	3,072	$	130		$	-	$	(1,661	)	$	6	$	1,547
Liabilities:
Contingent consideration liability	$	25,539	$	(612	)	$	-	$	-		$	-	$	24,927
Total Level 3 Liabilities	$	25,539	$	(612	)	$	-	$	-		$	-	$	24,927

	Nine Months Ended September 30, 2017
	Beginning Balance		Net Unrealized/ Realized Gains/Losses Included In Earnings (a)		Purchases/ Acquisitions		Sales/ Dispositions			Foreign Currency Translation Adjustments		Ending Balance
Assets:
Investments:
Equities	$	1,508	$	4	$	1,661	$	(1,669	)	$	43	$	1,547
Total Level 3 Assets	$	1,508	$	4	$	1,661	$	(1,669	)	$	43	$	1,547
Liabilities:
Contingent consideration liability	$	22,608	$	2,568	$	-	$	(249	)	$	-	$	24,927
Total Level 3 Liabilities	$	22,608	$	2,568	$	-	$	(249	)	$	-	$	24,927

(a) Earnings recorded in “other revenue” for investments in equities for the three month and nine month periods ended September 30, 2018 and the three month and nine month periods ended September 30, 2017 include net unrealized gains of $0, $61, $130 and $2, respectively. Earnings recorded in “amortization and other acquisition-related (benefits) costs” for the contingent consideration liability for the three month and nine month periods ended September 30, 2018 and the three month and nine month periods ended September 30, 2017 include unrealized (gains) losses of $(6,707), $(16,020), $(612) and $2,568, respectively.

Fair Value of Certain Investments Based on NAV

The following tables present, at September 30, 2018 and December 31, 2017, certain investments that are valued using NAV or its equivalent as a practical expedient in determining fair value:

September 30, 2018

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

Alternativeinvestment funds:

Hedge funds

$

330

$

-

NA

NA

NA

NA

(a)

60 days

Funds of funds

23

-

NA

NA

NA

NA

(b)

90 days

Other

562

-

NA

NA

NA

NA

(c)

<30-60 days

Debt funds

7

-

NA

NA

NA

NA

(d)

30 days

Equity funds

52

-

NA

NA

NA

NA

(e)

<30-90 days

Private equity funds:

Equity growth

59,675

8,632

(f)

100

%

15

%

36

%

49

%

NA

NA

Total

$

60,649

$

8,632

(a) monthly (100%)

(b) quarterly (100%)

(c) daily (6%) and monthly (94%)

(d) daily (100%)

(e) daily (18%), monthly (47%), quarterly (31%) and annually (4%)

(f) Unfunded commitments to private equity investments consolidated but not owned by Lazard of $15,257 are excluded. Such commitments are required to be funded by capital contributions from noncontrolling interest holders.

December 31, 2017

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

Alternativeinvestment funds:

Hedge funds

$

2,517

$

-

NA

NA

NA

NA

(a)

<30-60 days

Funds of funds

528

-

NA

NA

NA

NA

(b)

<30-90 days

Other

595

-

NA

NA

NA

NA

(c)

<30-60 days

Debt funds

6

-

NA

NA

NA

NA

(d)

30 days

Equity funds

53

-

NA

NA

NA

NA

(e)

<30-90 days

Private equity funds:

Equity growth

76,679

10,300

(f)

100

%

16

%

38

%

46

%

NA

NA

Total

$

80,378

$

10,300

(a) weekly (3%), monthly (5%) and quarterly (92%)

(b) monthly (97%) and quarterly (3%)

(c) daily (6%) and monthly (94%)

(d) daily (100%)

(e) daily (18%), monthly (50%) and quarterly (32%)

(f) Unfunded commitments to private equity investments consolidated but not owned by Lazard of $5,902 are excluded. Such commitments are required to be funded by capital contributions from noncontrolling interest holders.

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Derivatives (Tables)

9 Months Ended

Sep. 30, 2018

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Fair Values of Derivatives Reported on Condensed Consolidated Statements of Financial Condition

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 September 30, 2018 and December 31, 2017:

	September 30,		December 31,
	2018		2017
Derivative Assets:
Forward foreign currency exchange rate contracts	$	4,709	$	3,314
Total return swaps and other (a)		2,781		418
	$	7,490	$	3,732
Derivative Liabilities:
Forward foreign currency exchange rate contracts	$	2,434	$	4,846
Total return swaps and other (a)		317		11,270
LFI and other similar deferred compensation arrangements		203,978		182,301
	$	206,729	$	198,417

(a) For total return swaps, amounts represent the netting of gross derivative assets and liabilities of $3,401 and $937 as of September 30, 2018, respectively, and $469 and $11,321 as of December 31, 2017, respectively, for contracts with the same counterparty under legally enforceable master netting agreements. Such amounts are recorded “net” in “other assets”, with receivables for net cash collateral under such contracts of $2,316 and $17,616 as of September 30, 2018 and December 31, 2017, respectively.

Net Gains and (Losses) With Respect To Derivative Instruments (Including Derivatives Not Designed As Hedging Instruments)

Net gains (losses) with respect to derivative instruments (predominantly reflected in “revenue-other”) and the Company’s derivative liabilities relating to its obligations pertaining to LFI and other similar deferred compensation arrangements (included in “compensation and benefits” expense) as reflected on the accompanying condensed consolidated statements of operations for the three month and nine month periods ended September 30, 2018 and 2017, were as follows:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Forward foreign currency exchange rate contracts	$	1,431		$	(2,991	)	$	5,184		$	(8,149	)
LFI and other similar deferred compensation arrangements		(3,647	)		(4,875	)		(1,712	)		(17,981	)
Total return swaps and other		(1,847	)		(3,890	)		599			(12,872	)
Total	$	(4,063	)	$	(11,756	)	$	4,071		$	(39,002	)

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Property (Tables)

9 Months Ended

Sep. 30, 2018

Property Plant And Equipment [Abstract]

Components of Property

At September 30, 2018 and December 31, 2017, property consisted of the following:

	Estimated Depreciable		September 30,		December 31,
	Life in Years		2018		2017
Buildings		33	$	146,630	$	151,912
Leasehold improvements	3-20			188,995		173,102
Furniture and equipment	3-10			199,192		183,541
Construction in progress				11,399		14,573
Total				546,216		523,128
Less - Accumulated depreciation and amortization			331,937			317,827
Property			$	214,279	$	205,301

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Goodwill and Other Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2018

Goodwill And Intangible Assets Disclosure [Abstract]

Components of Goodwill and Other Intangible Assets

The components of goodwill and other intangible assets at September 30, 2018 and December 31, 2017 are presented below:

	September 30,		December 31,
	2018		2017
Goodwill	$	374,994	$	385,292
Other intangible assets (net of accumulated amortization)		4,247		6,072
	$	379,241	$	391,364

Changes in Carrying Amount of Goodwill

Changes in the carrying amount of goodwill for the nine month periods ended September 30, 2018 and 2017 are as follows:

	Nine Months Ended
	September 30,
	2018			2017
Balance, January 1	$	385,292		$	373,117
Foreign currency translation adjustments		(10,298	)		12,369
Balance, September 30	$	374,994		$	385,486

Gross Cost and Accumulated Amortization of Other Intangible Assets

The gross cost and accumulated amortization of other intangible assets as of September 30, 2018 and December 31, 2017, by major intangible asset category, are as follows:

	September 30, 2018						December 31, 2017
	Gross Cost		Accumulated Amortization		Net Carrying Amount		Gross Cost		Accumulated Amortization		Net Carrying Amount
Success/incentive fees	$	35,335	$	31,922	$	3,413	$	35,422	$	29,723	$	5,699
Management fees, customer relationships    and non-compete agreements		34,488		33,654		834		33,749		33,376		373
	$	69,823	$	65,576	$	4,247	$	69,171	$	63,099	$	6,072

Estimated Future Amortization Expense

Estimated future amortization expense is as follows:

Year Ending December 31,	Amortization Expense (a)
2018 (October 1 through December 31)	$	484
2019		1,724
2020		1,701
2021		150
2022		150
2023		38
Total amortization expense	$	4,247

(a) Approximately 38% of intangible asset amortization is attributable to a noncontrolling interest.

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Senior Debt (Tables)

9 Months Ended

Sep. 30, 2018

Debt Disclosure [Abstract]

Senior Debt

Senior debt is comprised of the following as of September 30, 2018 and December 31, 2017:

							Outstanding as of
	Initial			Annual			September 30, 2018						December 31, 2017
	Principal Amount		Maturity Date	Interest Rate(a)			Principal		Unamortized Debt Costs		Carrying Value		Principal		Unamortized Debt Costs		Carrying Value
Lazard Group 2020    Senior Notes	$	500,000	11/14/20		4.25	%	$	250,000	$	978	$	249,022	$	500,000	$	2,647	$	497,353
Lazard Group 2025    Senior Notes		400,000	2/13/25		3.75	%		400,000		3,006		396,994		400,000		3,361		396,639
Lazard Group 2027    Senior Notes		300,000	3/1/27		3.625	%		300,000		3,314		296,686		300,000		3,609		296,391
Lazard Group 2028    Senior Notes (b)		500,000	9/19/28		4.50	%		500,000		9,000		491,000		-		-		-
Total							$	1,450,000	$	16,298	$	1,433,702	$	1,200,000	$	9,617	$	1,190,383

(a) The effective interest rates of Lazard Group’s 4.25% senior notes due November 14, 2020 (the “2020 Notes”), Lazard Group’s 3.75% senior notes due February 13, 2025 (the “2025 Notes”), Lazard Group’s 3.625% senior notes due March 1, 2027 (the “2027 Notes”) and Lazard Group’s 4.50% senior notes due September 19, 2028 (the “2028 Notes”) are 4.44%, 3.87%,  3.76% and 4.68%, respectively.

(b) In September 2018, Lazard Group completed an offering of $500,000 aggregate principal amount of the 2028 Notes. Interest on the 2028 Notes is payable semi-annually on March 19 and September 19 of each year, beginning March 19, 2019. Lazard Group used a portion of the net proceeds of the 2028 Notes to redeem or otherwise retire $250,000 aggregate principal amount of the 2020 Notes, which, including the recognition of unamortized issuance costs, resulted in a loss on debt extinguishment of $6,523. Such loss on debt extinguishment was recorded in “operating expenses—other” on the condensed consolidated statement of operations for the three month and nine month periods ended September 30, 2018.

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Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2018

Commitments And Contingencies Disclosure [Abstract]

Schedule of Future Minimum Rental Payment for Operating Leases

At September 30, 2018, minimum rental commitments under non-cancelable operating leases, net of sublease income, are approximately as follows:

Year Ending December 31,
2018 (October 1 through December 31)	$	20,992
2019		85,689
2020		87,492
2021		83,164
2022		70,422
Thereafter		545,624
Total minimum rental commitments		893,383
Less - Sublease proceeds		28,796
Net rental commitments	$	864,587

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Stockholders' Equity (Tables)

9 Months Ended

Sep. 30, 2018

Equity [Abstract]

Schedule of Share Repurchase Authorized by Board of Directors

Share Repurchase Program—During the nine month period ended September 30, 2018 and since 2015, the Board of Directors of Lazard authorized the repurchase of Class A common stock as set forth in the table below:

Date	Repurchase Authorization		Expiration
February 2015	$	150,000	December31, 2016
January 2016	$	200,000	December31, 2017
April 2016	$	113,182	December31, 2017
November 2016	$	236,000	December31, 2018
October 2017	$	200,000	December31, 2019
April 2018	$	300,000	December 31, 2020

Schedule of Shares Repurchased Under the Share Repurchase Program

The Company expects that the share repurchase program will primarily 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 (the “2018 Plan”). Pursuant to the share repurchase program, purchases have been made in the open market or through privately negotiated transactions. The rate at which the Company purchases shares in connection with the share repurchase program may vary from quarter to quarter due to a variety of factors. Purchases with respect to such program are set forth in the table below:

Nine Months Ended September 30:	Number of Shares Purchased		Average Price Per Share
2017		5,838,520	$	43.25
2018		5,797,789	$	52.88

Accumulated Other Comprehensive Income (Loss), Net of Tax

Accumulated Other Comprehensive Income (Loss), Net of Tax—The tables below reflect the balances of each component of AOCI at September 30, 2018 and 2017 and activity during the three month and nine month periods then ended:

	Three Months Ended September 30, 2018
	Currency Translation Adjustments			Employee Benefit Plans			Total AOCI			Amount Attributable to Noncontrolling Interests			Total Lazard Ltd AOCI
Balance, July 1, 2018	$	(109,642	)	$	(143,859	)	$	(253,501	)	$	(2	)	$	(253,499	)
Activity:
Other comprehensive income (loss) before    reclassifications		(8,676	)		863			(7,813	)		2			(7,815	)
Adjustments for items reclassified to earnings,    net of tax		-			949			949			-			949
Net other comprehensive income (loss)		(8,676	)		1,812			(6,864	)		2			(6,866	)
Balance, September 30, 2018	$	(118,318	)	$	(142,047	)	$	(260,365	)	$	-		$	(260,365	)

	Nine Months Ended September 30, 2018
	Currency Translation Adjustments			Employee Benefit Plans			Total AOCI			Amount Attributable to Noncontrolling Interests			Total Lazard Ltd AOCI
Balance, January 1, 2018	$	(83,535	)	$	(148,984	)	$	(232,519	)	$	(1	)	$	(232,518	)
Activity:
Other comprehensive income (loss) before    reclassifications		(34,783	)		4,149			(30,634	)		1			(30,635	)
Adjustments for items reclassified to earnings,    net of tax		-			2,788			2,788			-			2,788
Net other comprehensive income (loss)		(34,783	)		6,937			(27,846	)		1			(27,847	)
Balance, September 30, 2018	$	(118,318	)	$	(142,047	)	$	(260,365	)	$	-		$	(260,365	)

	Three Months Ended September 30, 2017
	Currency Translation Adjustments			Employee Benefit Plans			Total AOCI			Amount Attributable to Noncontrolling Interests			Total Lazard Ltd AOCI
Balance, July 1, 2017	$	(112,105	)	$	(165,682	)	$	(277,787	)	$	(2	)	$	(277,785	)
Activity:
Other comprehensive income (loss) before    reclassifications		19,748			(4,715	)		15,033			2			15,031
Adjustments for items reclassified to earnings,    net of tax		-			1,081			1,081			-			1,081
Net other comprehensive income (loss)		19,748			(3,634	)		16,114			2			16,112
Balance, September 30, 2017	$	(92,357	)	$	(169,316	)	$	(261,673	)	$	-		$	(261,673	)

	Nine Months Ended September 30, 2017
	Currency Translation Adjustments			Employee Benefit Plans			Total AOCI			Amount Attributable to Noncontrolling Interests			Total Lazard Ltd AOCI
Balance, January 1, 2017	$	(155,204	)	$	(159,020	)	$	(314,224	)	$	(2	)	$	(314,222	)
Activity:
Other comprehensive income (loss) before    reclassifications		62,847			(13,819	)		49,028			2			49,026
Adjustments for items reclassified to earnings,    net of tax		-			3,523			3,523			-			3,523
Net other comprehensive income (loss)		62,847			(10,296	)		52,551			2			52,549
Balance, September 30, 2017	$	(92,357	)	$	(169,316	)	$	(261,673	)	$	-		$	(261,673	)

Adjustments for Items Reclassified Out of AOCI

The table below reflects adjustments for items reclassified out of AOCI, by component, for the three month and nine month periods ended September 30, 2018 and 2017:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Amortization relating to employee benefit plans (a)	$	1,213	$	1,285	$	3,736	$	4,199
Less - related income taxes		264		204		948		676
Total reclassifications, net of tax	$	949	$	1,081	$	2,788	$	3,523

(a) Included in the computation of net periodic benefit cost (see Note 14). Such amounts are included in “operating expenses—other” on the condensed consolidated statements of operations.

Net Income Attributable to Noncontrolling Interests

The tables below summarize net income attributable to noncontrolling interests for the three month and nine month periods ended September 30, 2018 and 2017 and noncontrolling interests as of September 30, 2018 and December 31, 2017 in the Company’s condensed consolidated financial statements:

	Net Income Attributable to Noncontrolling Interests
	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Edgewater	$	1,651	$	2,260	$	5,034	$	5,657
Other		-		-		2		3
Total	$	1,651	$	2,260	$	5,036	$	5,660

	Noncontrolling Interests as of
	September 30,		December 31,
	2018		2017
Edgewater	$	53,902	$	58,568
Other		558		534
Total	$	54,460	$	59,102

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Incentive Plans (Tables)

9 Months Ended

Sep. 30, 2018

Summary of Impact of Share-Based Incentive Plans on Compensation and Benefits Expense

The following reflects the amortization expense recorded with respect to share-based incentive plans within “compensation and benefits” expense (with respect to RSUs, PRSUs and restricted stock awards) and “professional services” expense (with respect to DSUs) within the Company’s accompanying condensed consolidated statements of operations for the three month and nine month periods ended September 30, 2018 and 2017:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Share-based incentive awards:
RSUs	$	38,121	$	39,898	$	154,643	$	150,193
PRSUs		3,107		9,896		31,125		38,095
Restricted Stock		6,950		7,697		30,323		30,507
DSUs		179		156		2,096		1,853
Total	$	48,357	$	57,647	$	218,187	$	220,648

Schedule of Issuance of RSUs and Charges to Retained Earnings

During the nine month periods ended September 30, 2018 and 2017, issuances of RSUs pertaining to such dividend participation rights and respective charges to “retained earnings”, net of estimated forfeitures (with corresponding credits to “additional paid-in-capital”), consisted of the following:

	Nine Months Ended
	September 30,
	2018		2017
Number of RSUs issued		746,324		866,914
Charges to retained earnings, net of estimated forfeitures	$	38,923	$	36,482

Summary of LFI and Other Similar Deferred Compensation Arrangements

The following is a summary of activity relating to LFI and other similar deferred compensation arrangements during the nine month periods ended September 30, 2018 and 2017:

	Prepaid Compensation Asset			Compensation Liability
Balance, January 1, 2018	$	60,355		$	182,301
Granted		104,740			104,740
Settled		-			(85,335	)
Forfeited		(1,166	)		(1,767	)
Amortization		(68,145	)		-
Change in fair value related to:
Increase in fair value of underlying investments		-			1,712
Adjustment for estimated forfeitures		-			3,730
Other		(1,489	)		(1,403	)
Balance, September 30, 2018	$	94,295		$	203,978

	Prepaid Compensation Asset			Compensation Liability
Balance, January 1, 2017	$	49,650		$	170,388
Granted		77,580			77,580
Settled		-			(95,718	)
Forfeited		(866	)		(1,647	)
Amortization		(52,702	)		-
Change in fair value related to:
Increase in fair value of underlying investments		-			17,981
Adjustment for estimated forfeitures	-				5,333
Other		1,515			1,833
Balance, September 30, 2017	$	75,177		$	175,750

The following is a summary of the impact of LFI and other similar deferred compensation arrangements on “compensation and benefits” expense within the accompanying condensed consolidated statements of operations for the three month and nine month periods ended September 30, 2018 and 2017:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Amortization, net of forfeitures	$	19,145	$	15,961	$	71,274	$	57,254
Change in the fair value of underlying investments		3,647		4,875		1,712		17,981
Total	$	22,792	$	20,836	$	72,986	$	75,235

Restricted Stock Units and Deferred Stock Units [Member]

Schedule of Activity Relating to Share-based Awards

The following is a summary of activity relating to RSUs and DSUs during the nine month periods ended September 30, 2018 and 2017:

	RSUs					DSUs
	Units			Weighted Average Grant Date Fair Value		Units			Weighted Average Grant Date Fair Value
Balance, January 1, 2018		12,919,846		$	40.23		278,422		$	37.46
Granted (including 746,324 RSUs relating to dividend    participation)		4,096,939		$	53.78		40,300		$	52.00
Forfeited		(130,138	)	$	45.11		-			-
Vested		(5,603,901	)	$	42.88		-			-
Balance, September 30, 2018		11,282,746		$	43.78		318,722		$	39.30
Balance, January 1, 2017		11,698,138		$	40.65		276,725		$	36.05
Granted (including 866,914 RSUs relating to dividend    participation)		5,294,156		$	43.01		41,821		$	44.30
Forfeited		(162,320	)	$	39.97		-			-
Vested		(3,977,477	)	$	45.27		(43,465	)	$	35.77
Balance, September 30, 2017		12,852,497		$	40.20		275,081		$	37.35

Restricted Stock Awards Class A [Member]

Schedule of Activity Relating to Share-based Awards

The following is a summary of activity related to shares of restricted Class A common stock associated with compensation arrangements during the nine month periods ended September 30, 2018 and 2017:

	Restricted Shares			Weighted Average Grant Date Fair Value
Balance, January 1, 2018		1,938,160		$	40.54
Granted		529,987		$	54.45
Forfeited		(30,950	)	$	46.31
Vested		(869,312	)	$	44.15
Balance, September 30, 2018		1,567,885		$	43.13
Balance, January 1, 2017		1,655,073		$	40.95
Granted		841,355		$	42.58
Forfeited		(65,086	)	$	40.80
Vested		(483,811	)	$	45.42
Balance, September 30, 2017		1,947,531		$	40.54

PRSUs [Member]

Schedule of Activity Relating to Share-based Awards

The following is a summary of activity relating to PRSUs during the nine month periods ended September 30, 2018 and 2017:

	PRSUs			Weighted Average Grant Date Fair Value
Balance, January 1, 2018		1,591,693		$	42.46
Granted (a)		399,869		$	56.80
Vested		(799,402	)	$	46.74
Balance, September 30, 2018		1,192,160		$	44.39
Balance, January 1, 2017		1,590,756		$	40.76
Granted (a)		458,113		$	43.76
Vested		(825,565	)	$	42.27
Balance, September 30, 2017		1,223,304		$	40.86

(a) Represents PRSU awards granted during the relevant year at the target payout level.

XML

Employee Benefit Plans (Tables)

9 Months Ended

Sep. 30, 2018

Compensation And Retirement Disclosure [Abstract]

Components of Net Periodic Benefit Cost (Credit)

The following table summarizes the components of net periodic benefit cost (credit) related to the Company’s pension plans for the three month and nine month periods ended September 30, 2018 and 2017:

	Three Months Ended September 30,
	2018			2017
Components of Net Periodic Benefit Cost (Credit):
Service cost	$	217		$	373
Interest cost		3,822			4,191
Expected return on plan assets		(7,315	)		(6,295	)
Amortization of:
Prior service cost		-			-
Net actuarial loss (gain)		1,213			1,285
Net periodic benefit cost (credit)	$	(2,063	)	$	(446	)

	Nine Months Ended September 30,
	2018			2017
Components of Net Periodic Benefit Cost (Credit):
Service cost	$	670		$	1,048
Interest cost		11,861			12,258
Expected return on plan assets		(22,681	)		(18,855	)
Amortization of:
Prior service cost		-			30
Net actuarial loss (gain)		3,736			4,169
Net periodic benefit cost (credit)	$	(6,414	)	$	(1,350	)

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Net Income Per Share of Class A Common Stock (Tables)

9 Months Ended

Sep. 30, 2018

Earnings Per Share [Abstract]

Company's Basic and Diluted Net Income Per Share and Weighted Average Shares Outstanding

The calculations of the Company’s basic and diluted net income per share and weighted average shares outstanding for the three month and nine month periods ended September 30, 2018 and 2017 are presented below:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Net income attributable to Lazard Ltd - basic	$	107,074	$	109,210	$	413,729	$	337,141
Net income attributable to Lazard Ltd - diluted	$	107,074	$	109,210	$	413,729	$	337,141
Weighted average number of shares of Class A common    stock outstanding		119,197,949		120,987,607		119,647,775		121,868,223
Add - adjustment for shares of Class A common stock    issuable on a non-contingent basis		258,567		255,991		249,851		274,080
Weighted average number of shares of Class A common    stock outstanding - basic		119,456,516		121,243,598		119,897,626		122,142,303
Add - dilutive effect, as applicable, of:
Weighted average number of incremental shares of Class A    common stock issuable from share-based    incentive compensation		10,403,212		11,150,066		10,852,766		10,265,248
Weighted average number of shares of Class A common stock    outstanding - diluted		129,859,728		132,393,664		130,750,392		132,407,551
Net income attributable to Lazard Ltd per share of Class    A common stock:
Basic	$	0.90	$	0.90	$	3.45	$	2.76
Diluted	$	0.82	$	0.82	$	3.16	$	2.55

XML

Segment Information (Tables)

9 Months Ended

Sep. 30, 2018

Segment Reporting [Abstract]

Segment's Contribution with Respect to Net Revenue, Operating Expenses, Operating Income (Loss) and Total Assets

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						Nine Months Ended
		September 30,						September 30,
		2018			2017			2018			2017
Financial Advisory	Net Revenue	$	310,418		$	305,890		$	1,141,628		$	1,052,584
	Operating Expenses		250,651			245,465			893,524			821,935
	Operating Income	$	59,767		$	60,425		$	248,104		$	230,649
Asset Management	Net Revenue	$	325,240		$	320,487		$	1,032,111		$	913,728
	Operating Expenses		211,564			217,233			670,794			621,885
	Operating Income	$	113,676		$	103,254		$	361,317		$	291,843
Corporate	Net Revenue	$	(9,177	)	$	(1,518	)	$	(34,622	)	$	(809	)
	Operating Expenses		25,585			17,949			50,350			54,773
	Operating Loss	$	(34,762	)	$	(19,467	)	$	(84,972	)	$	(55,582	)
Total	Net Revenue	$	626,481		$	624,859		$	2,139,117		$	1,965,503
	Operating Expenses		487,800			480,647			1,614,668			1,498,593
	Operating Income	$	138,681		$	144,212		$	524,449		$	466,910

	As Of
	September 30, 2018		December 31, 2017
Total Assets
Financial Advisory	$	876,289	$	843,142
Asset Management		696,400		756,398
Corporate		3,372,089		3,329,137
Total	$	4,944,778	$	4,928,677

XML

Organization and Basis of Presentation - Additional Information (Detail) - Segment	9 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Organization And Basis Of Presentation [Line Items]
Governing operating agreement, date	Oct. 26, 2015
Number of business segments	2
Lazard Group LLC [Member]
Organization And Basis Of Presentation [Line Items]
Percentage of common membership interests held	100.00%	100.00%

XML

Recent Accounting Developments - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Sep. 30, 2018	Dec. 31, 2017
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
U.S. federal statutory income tax rate		21.00%	35.00%
Accounting Standards Update 2014-09 [Member]
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Effect of the reclassification of contract costs from net revenue to expenses	$ 24,392	$ 72,006
Effect of reclassification of costs from revenue to operating expenses	$ 24,392	$ 72,006

XML

Revenue Recognition - Representation of Performance Obligations Relate to Nature, Amount, Timing and Uncertainty of Revenue and Cash Flows (Detail) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2018
Financial Advisory Segment [Member]
Disaggregation Of Revenue [Line Items]
Net Revenue	$ 310,418	$ 1,141,628
Asset Management Segment [Member]
Disaggregation Of Revenue [Line Items]
Net Revenue	325,240	1,032,111
Asset Management Segment [Member] | Management Fees and Other [Member]
Disaggregation Of Revenue [Line Items]
Net Revenue	323,283	1,012,127
Asset Management Segment [Member] | Incentive Fees [Member]
Disaggregation Of Revenue [Line Items]
Net Revenue	$ 1,957	$ 19,984

XML

Receivables - Schedule of Activity in Allowance for Doubtful Accounts (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Allowance For Doubtful Accounts Receivable Rollforward
Allowance for doubtful accounts receivables, Beginning balance	$ 34,956	$ 25,094	$ 23,746	$ 16,386
Bad debt expense, net of recoveries	1,488	4,753	18,106	18,584
Charge-offs, foreign currency translation and other adjustments	(1,920)	(2,383)	(7,328)	(7,506)
Allowance for doubtful accounts receivables, Ending balance	$ 34,524	$ 27,464	$ 34,524	$ 27,464

XML

Receivables - Additional Information (Detail) - USD ($)	Sep. 30, 2018	Jun. 30, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Dec. 31, 2016
Accounts, Notes, Loans and Financing Receivable [Line Items]
Receivables past due or deemed uncollectible	$ 38,098,000		$ 34,865,000
Interest-bearing financing fee receivables	77,540,000		80,536,000
Allowance for doubtful accounts receivables	34,524,000	$ 34,956,000	23,746,000	$ 27,464,000	$ 25,094,000	$ 16,386,000
Aggregate carrying amount of non-interest bearing receivables	563,247,000		491,080,000
Financing Receivables [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Allowance for doubtful accounts receivables	$ 0		$ 0

XML

Investments - Company's Investments and Securities Sold, Not Yet Purchased (Detail) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Schedule of Investments [Line Items]
Total investments	$ 609,595	$ 427,186
Investments, at fair value	609,076	426,630
Securities sold, not yet purchased, at fair value (included in "other liabilities")	6,876	7,338
Interest-bearing Deposits [Member]
Schedule of Investments [Line Items]
Total investments	519	556
Debt [Member]
Schedule of Investments [Line Items]
Total investments	202,592	6
Investments, at fair value	202,592	6
Equities [Member]
Schedule of Investments [Line Items]
Total investments	36,810	45,257
Investments, at fair value	36,810	45,257
Alternative Investment Funds [Member]
Schedule of Investments [Line Items]
Total investments	18,169	20,993
Investments, at fair value	18,169	20,993
Debt Funds [Member]
Schedule of Investments [Line Items]
Total investments	89,476	84,077
Investments, at fair value	89,476	84,077
Equity Funds [Member]
Schedule of Investments [Line Items]
Total investments	202,354	199,618
Investments, at fair value	202,354	199,618
Private Equity Funds [Member]
Schedule of Investments [Line Items]
Total investments	59,675	76,679
Investments, at fair value	59,675	76,679
Funds Total [Member]
Schedule of Investments [Line Items]
Total investments	$ 369,674	$ 381,367

XML

Investments - Company's Investments and Securities Sold, Not Yet Purchased (Parenthetical) (Detail) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Schedule of Investments [Line Items]
Investments	$ 609,595	$ 427,186
Alternative Investment Funds [Member]
Schedule of Investments [Line Items]
Investments	18,169	20,993
Alternative Investment Funds [Member] | Lazard Fund Interests [Member]
Schedule of Investments [Line Items]
Investments	9,979	11,213
Debt Funds [Member]
Schedule of Investments [Line Items]
Investments	89,476	84,077
Debt Funds [Member] | Lazard Fund Interests [Member]
Schedule of Investments [Line Items]
Investments	59,282	48,391
Equity Funds [Member]
Schedule of Investments [Line Items]
Investments	202,354	199,618
Equity Funds [Member] | Lazard Fund Interests [Member]
Schedule of Investments [Line Items]
Investments	$ 149,813	$ 131,893

XML

Investments - Additional Information (Detail)	9 Months Ended
	Sep. 30, 2018
Minimum [Member] | Interest-bearing Deposits [Member]
Schedule of Investments [Line Items]
Deposits maturity period	3 months
Minimum [Member] | Debt [Member] | U.S. Treasury Securities [Member]
Schedule of Investments [Line Items]
US Treasury securities maturity period	3 months
Maximum [Member] | Interest-bearing Deposits [Member]
Schedule of Investments [Line Items]
Deposits maturity period	1 year
Maximum [Member] | Debt [Member] | U.S. Treasury Securities [Member]
Schedule of Investments [Line Items]
US Treasury securities maturity period	1 year

XML

Investments - Schedule of Trading Securities Net Unrealized Investment Gains and Losses (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Net Realized Or Unrealized Gain Loss On Trading Securities [Abstract]
Net unrealized investment gains (losses)	$ 1,972	$ 6,949	$ (13,183)	$ 27,932

XML

Fair Value Measurements - Schedule of Classification of Investments and Certain Other Assets and Liabilities Measured at Fair Value on Recurring Basis and Investments Measured at NAV (Detail) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Investments	$ 609,076	$ 426,630
Total Derivative Assets	7,490	3,732
Total investments measured at fair value	616,566	430,362
Securities sold, not yet purchased	6,876	7,338
Contingent consideration liability	12,921	28,941
Total Derivative Liabilities	206,729	198,417
Total of Liabilities Measured at Fair Value	226,526	234,696
Fair Value, Measurements, Recurring [Member] | NAV [Member]
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Total investments measured at fair value	60,649	80,378
Level 1 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Total investments measured at fair value	546,799	344,660
Securities sold, not yet purchased	6,876	7,338
Total of Liabilities Measured at Fair Value	6,876	7,338
Level 2 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Total Derivative Assets	7,490	3,732
Total investments measured at fair value	7,490	3,732
Total Derivative Liabilities	206,729	198,417
Total of Liabilities Measured at Fair Value	206,729	198,417
Level 3 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Total investments measured at fair value	1,628	1,592
Contingent consideration liability	12,921	28,941
Total of Liabilities Measured at Fair Value	12,921	28,941
Debt [Member]
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Investments	202,592	6
Debt [Member] | Level 1 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Investments	202,592	6
Equities [Member]
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Investments	36,810	45,257
Equities [Member] | Level 1 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Investments	35,182	43,665
Equities [Member] | Level 3 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Investments	1,628	1,592
Alternative Investment Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Investments	18,169	20,993
Alternative Investment Funds [Member] | Fair Value, Measurements, Recurring [Member] | NAV [Member]
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Investments	915	3,640
Alternative Investment Funds [Member] | Level 1 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Investments	17,254	17,353
Debt Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Investments	89,476	84,077
Debt Funds [Member] | Fair Value, Measurements, Recurring [Member] | NAV [Member]
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Investments	7	6
Debt Funds [Member] | Level 1 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Investments	89,469	84,071
Equity Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Investments	202,354	199,618
Equity Funds [Member] | Fair Value, Measurements, Recurring [Member] | NAV [Member]
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Investments	52	53
Equity Funds [Member] | Level 1 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Investments	202,302	199,565
Private Equity Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Investments	59,675	76,679
Private Equity Funds [Member] | Fair Value, Measurements, Recurring [Member] | NAV [Member]
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Investments	$ 59,675	$ 76,679

XML

Fair Value Measurements - Summary of Changes in Fair Value of Company's Level 3 Assets and Liabilities (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Assets:
Beginning Balance	$ 1,629	$ 3,072	$ 1,592	$ 1,508
Net Unrealized/Realized Gains/Losses Included In Earnings	0	130	61	4
Purchases/Acquisitions	0	0	1	1,661
Sales/Dispositions	0	(1,661)	0	(1,669)
Foreign Currency Translation Adjustments	(1)	6	(26)	43
Ending Balance	1,628	1,547	1,628	1,547
Liabilities:
Beginning Balance	19,628	25,539	28,941	22,608
Net Unrealized/Realized Gains/Losses Included In Earnings	(6,707)	(612)	(16,020)	2,568
Purchases/Acquisitions	0	0	0	0
Sales/Dispositions	0	0	0	(249)
Foreign Currency Translation Adjustments	0	0	0	0
Ending Balance	12,921	24,927	12,921	24,927
Contingent Consideration Liability [Member]
Liabilities:
Beginning Balance	19,628	25,539	28,941	22,608
Net Unrealized/Realized Gains/Losses Included In Earnings	(6,707)	(612)	(16,020)	2,568
Purchases/Acquisitions	0	0	0	0
Sales/Dispositions	0	0	0	(249)
Foreign Currency Translation Adjustments	0	0	0	0
Ending Balance	12,921	24,927	12,921	24,927
Equities [Member]
Assets:
Beginning Balance	1,629	3,072	1,592	1,508
Net Unrealized/Realized Gains/Losses Included In Earnings	0	130	61	4
Purchases/Acquisitions	0	0	1	1,661
Sales/Dispositions	0	(1,661)	0	(1,669)
Foreign Currency Translation Adjustments	(1)	6	(26)	43
Ending Balance	$ 1,628	$ 1,547	$ 1,628	$ 1,547

XML

Fair Value Measurements - Summary of Changes in Fair Value of Company's Level 3 Assets and Liabilities (Parenthetical) (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Equities [Member]
Fair Value of Assets and Liabilities Measured on Recurring Basis Unobservable Input Reconciliation [Line Items]
Net unrealized gains	$ 0	$ 130	$ 61	$ 2
Contingent Consideration Liability [Member]
Fair Value of Assets and Liabilities Measured on Recurring Basis Unobservable Input Reconciliation [Line Items]
Net unrealized (gains) losses	$ (6,707)	$ (612)	$ (16,020)	$ 2,568

XML

Fair Value Measurements - Additional Information (Detail) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Fair Value Option Quantitative Disclosures [Line Items]
Transfers between Level 1, 2 and 3 in fair value measurement hierarchy	$ 0	$ 0	$ 0	$ 0
Unfunded Commitments	8,632,000		8,632,000		$ 10,300,000
EGCP III [Member]
Fair Value Option Quantitative Disclosures [Line Items]
Unfunded Commitments	$ 7,847,000		$ 7,847,000
End of the investment period			Oct. 12, 2016
Remaining obligation date			Oct. 12, 2023

XML

Fair Value Measurements - Fair Value of Certain Investments Based on NAV (Detail) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Fair Value Investments Entities That Calculate Net Asset Value Per Share [Line Items]
Fair Value	$ 60,649	$ 80,378
Unfunded Commitments	8,632	10,300
Hedge Funds [Member]
Fair Value Investments Entities That Calculate Net Asset Value Per Share [Line Items]
Fair Value	$ 330	$ 2,517
Investments Redeemable, Redemption Notice Period	60 days
Hedge Funds [Member] | Monthly [Member]
Fair Value Investments Entities That Calculate Net Asset Value Per Share [Line Items]
Investments Redeemable, Percent	100.00%	5.00%
Hedge Funds [Member] | Quarterly [Member]
Fair Value Investments Entities That Calculate Net Asset Value Per Share [Line Items]
Investments Redeemable, Percent		92.00%
Hedge Funds [Member] | Weekly [Member]
Fair Value Investments Entities That Calculate Net Asset Value Per Share [Line Items]
Investments Redeemable, Percent		3.00%
Hedge Funds [Member] | Minimum [Member]
Fair Value Investments Entities That Calculate Net Asset Value Per Share [Line Items]
Investments Redeemable, Redemption Notice Period		30 days
Hedge Funds [Member] | Maximum [Member]
Fair Value Investments Entities That Calculate Net Asset Value Per Share [Line Items]
Investments Redeemable, Redemption Notice Period		60 days
Funds of Funds [Member]
Fair Value Investments Entities That Calculate Net Asset Value Per Share [Line Items]
Fair Value	$ 23	$ 528
Investments Redeemable, Redemption Notice Period	90 days
Funds of Funds [Member] | Monthly [Member]
Fair Value Investments Entities That Calculate Net Asset Value Per Share [Line Items]
Investments Redeemable, Percent		97.00%
Funds of Funds [Member] | Quarterly [Member]
Fair Value Investments Entities That Calculate Net Asset Value Per Share [Line Items]
Investments Redeemable, Percent	100.00%	3.00%
Funds of Funds [Member] | Minimum [Member]
Fair Value Investments Entities That Calculate Net Asset Value Per Share [Line Items]
Investments Redeemable, Redemption Notice Period		30 days
Funds of Funds [Member] | Maximum [Member]
Fair Value Investments Entities That Calculate Net Asset Value Per Share [Line Items]
Investments Redeemable, Redemption Notice Period		90 days
Other [Member]
Fair Value Investments Entities That Calculate Net Asset Value Per Share [Line Items]
Fair Value	$ 562	$ 595
Other [Member] | Monthly [Member]
Fair Value Investments Entities That Calculate Net Asset Value Per Share [Line Items]
Investments Redeemable, Percent	94.00%	94.00%
Other [Member] | Daily [Member]
Fair Value Investments Entities That Calculate Net Asset Value Per Share [Line Items]
Investments Redeemable, Percent	6.00%	6.00%
Other [Member] | Minimum [Member]
Fair Value Investments Entities That Calculate Net Asset Value Per Share [Line Items]
Investments Redeemable, Redemption Notice Period	30 days	30 days
Other [Member] | Maximum [Member]
Fair Value Investments Entities That Calculate Net Asset Value Per Share [Line Items]
Investments Redeemable, Redemption Notice Period	60 days	60 days
Debt Funds [Member]
Fair Value Investments Entities That Calculate Net Asset Value Per Share [Line Items]
Fair Value	$ 7	$ 6
Investments Redeemable, Redemption Notice Period	30 days	30 days
Debt Funds [Member] | Daily [Member]
Fair Value Investments Entities That Calculate Net Asset Value Per Share [Line Items]
Investments Redeemable, Percent	100.00%	100.00%
Equity Funds [Member]
Fair Value Investments Entities That Calculate Net Asset Value Per Share [Line Items]
Fair Value	$ 52	$ 53
Equity Funds [Member] | Monthly [Member]
Fair Value Investments Entities That Calculate Net Asset Value Per Share [Line Items]
Investments Redeemable, Percent	47.00%	50.00%
Equity Funds [Member] | Quarterly [Member]
Fair Value Investments Entities That Calculate Net Asset Value Per Share [Line Items]
Investments Redeemable, Percent	31.00%	32.00%
Equity Funds [Member] | Daily [Member]
Fair Value Investments Entities That Calculate Net Asset Value Per Share [Line Items]
Investments Redeemable, Percent	18.00%	18.00%
Equity Funds [Member] | Annually [Member]
Fair Value Investments Entities That Calculate Net Asset Value Per Share [Line Items]
Investments Redeemable, Percent	4.00%
Equity Funds [Member] | Minimum [Member]
Fair Value Investments Entities That Calculate Net Asset Value Per Share [Line Items]
Investments Redeemable, Redemption Notice Period	30 days	30 days
Equity Funds [Member] | Maximum [Member]
Fair Value Investments Entities That Calculate Net Asset Value Per Share [Line Items]
Investments Redeemable, Redemption Notice Period	90 days	90 days
Private Equity Funds [Member] | Equity Growth [Member]
Fair Value Investments Entities That Calculate Net Asset Value Per Share [Line Items]
Fair Value	$ 59,675	$ 76,679
Unfunded Commitments	$ 8,632	$ 10,300
% of Fair Value Not Redeemable	100.00%	100.00%
Estimated Liquidation Period of Investments Not Redeemable, % Next 5 Years	15.00%	16.00%
Estimated Liquidation Period of Investments Not Redeemable, % 5-10 Years	36.00%	38.00%
Estimated Liquidation Period of Investments Not Redeemable, % Thereafter	49.00%	46.00%

XML

Fair Value Measurements - Fair Value of Certain Investments Based on NAV (Parenthetical) (Detail) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Fair Value Investments Entities That Calculate Net Asset Value Per Share [Line Items]
Unfunded Commitments	$ 8,632	$ 10,300
Private Equity Funds [Member] | Consolidated But Not Owned [Member]
Fair Value Investments Entities That Calculate Net Asset Value Per Share [Line Items]
Unfunded Commitments	$ 15,257	$ 5,902

XML

Derivatives - Fair Values of Derivatives Reported on Condensed Consolidated Statements of Financial Condition (Detail) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017	Sep. 30, 2017	Dec. 31, 2016
Derivatives, Fair Value [Line Items]
Derivative Assets	$ 7,490	$ 3,732
Derivative Liabilities	206,729	198,417
Forward Foreign Currency Exchange Rate Contracts [Member]
Derivatives, Fair Value [Line Items]
Derivative Assets	4,709	3,314
Derivative Liabilities	2,434	4,846
Total Return Swaps and Other [Member]
Derivatives, Fair Value [Line Items]
Derivative Assets	2,781	418
Derivative Liabilities	317	11,270
LFI and Other Similar Deferred Compensation Arrangements [Member]
Derivatives, Fair Value [Line Items]
Derivative Liabilities	$ 203,978	$ 182,301	$ 175,750	$ 170,388

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Derivatives - Fair Values of Derivatives Reported on Condensed Consolidated Statements of Financial Condition (Parenthetical) (Detail) - Total Return Swaps [Member] - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Derivatives, Fair Value [Line Items]
Gross derivative assets	$ 3,401	$ 469
Gross derivative liability	937	11,321
Cash collateral pledged for total return swaps	$ 2,316	$ 17,616

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Derivatives - Net Gains (Losses) with Respect to Derivative Instruments Not Designated as Hedging Instruments (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Derivative Instruments, Gain (Loss) [Line Items]
Gains (losses) on derivatives instruments	$ (4,063)	$ (11,756)	$ 4,071	$ (39,002)
Forward Foreign Currency Exchange Rate Contracts [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gains (losses) on derivatives not designated as hedging instruments	1,431	(2,991)	5,184	(8,149)
LFI and Other Similar Deferred Compensation Arrangements [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gains (losses) on derivatives not designated as hedging instruments	(3,647)	(4,875)	(1,712)	(17,981)
Total Return Swaps and Other [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gains (losses) on derivatives designated as hedging instruments	$ (1,847)	$ (3,890)	$ 599	$ (12,872)

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Property - Components of Property (Detail) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	$ 546,216	$ 523,128
Less - Accumulated depreciation and amortization	331,937	317,827
Property	214,279	205,301
Buildings [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	$ 146,630	151,912
Property, plant and equipment, useful life	33 years
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	$ 188,995	173,102
Leasehold Improvements [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, useful life	3 years
Leasehold Improvements [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, useful life	20 years
Furniture and Equipment [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	$ 199,192	183,541
Furniture and Equipment [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, useful life	3 years
Furniture and Equipment [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, useful life	10 years
Construction in Progress [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	$ 11,399	$ 14,573

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Goodwill and Other Intangible Assets - Components of Goodwill and Other Intangible Assets (Detail) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017	Sep. 30, 2017	Dec. 31, 2016
Goodwill And Intangible Assets Disclosure [Abstract]
Goodwill	$ 374,994	$ 385,292	$ 385,486	$ 373,117
Other intangible assets (net of accumulated amortization)	4,247	6,072
Goodwill and other intangible assets, Total	$ 379,241	$ 391,364

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Goodwill and Other Intangible Assets - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017	Dec. 31, 2016
Goodwill And Intangible Assets [Line Items]
Goodwill	$ 374,994	$ 385,486	$ 374,994	$ 385,486	$ 385,292	$ 373,117
Amortization of intangible assets	856	$ 784	2,552	$ 2,435
Financial Advisory Segment [Member]
Goodwill And Intangible Assets [Line Items]
Goodwill	310,453		310,453		320,751
Asset Management Segment [Member]
Goodwill And Intangible Assets [Line Items]
Goodwill	$ 64,541		$ 64,541		$ 64,541

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Goodwill and Other Intangible Assets - Changes in Carrying Amount of Goodwill (Detail) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Goodwill And Intangible Assets Disclosure [Abstract]
Beginning Balance	$ 385,292	$ 373,117
Foreign currency translation adjustments	(10,298)	12,369
Ending Balance	$ 374,994	$ 385,486

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Goodwill and Other Intangible Assets - Gross Cost and Accumulated Amortization of Other Intangible Assets (Detail) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Finite-Lived Intangible Assets [Line Items]
Other intangible assets, Gross Cost	$ 69,823	$ 69,171
Other intangible assets, accumulated amortization	65,576	63,099
Other intangible assets, Net Carrying Amount	4,247	6,072
Success/Incentive Fees [Member]
Finite-Lived Intangible Assets [Line Items]
Other intangible assets, Gross Cost	35,335	35,422
Other intangible assets, accumulated amortization	31,922	29,723
Other intangible assets, Net Carrying Amount	3,413	5,699
Management Fees, Customer Relationships and Non-Compete Agreements [Member]
Finite-Lived Intangible Assets [Line Items]
Other intangible assets, Gross Cost	34,488	33,749
Other intangible assets, accumulated amortization	33,654	33,376
Other intangible assets, Net Carrying Amount	$ 834	$ 373

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Goodwill and Other Intangible Assets - Estimated Future Amortization Expense (Detail) $ in Thousands	Sep. 30, 2018 USD ($)
Goodwill And Intangible Assets Disclosure [Abstract]
2018 (October 1 through December 31)	$ 484
2019	1,724
2020	1,701
2021	150
2022	150
2023	38
Total amortization expense	$ 4,247

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Goodwill and Other Intangible Assets - Estimated Future Amortization Expense (Parenthetical) (Detail)	9 Months Ended
	Sep. 30, 2018
Goodwill And Intangible Assets Disclosure [Abstract]
Percentage of intangible asset amortization attributable to non-controlling interests	38.00%

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Senior Debt - Senior Debt (Detail) - USD ($)	9 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Senior Debt, Outstanding Principal	$ 1,450,000,000	$ 1,200,000,000
Senior Debt, Outstanding Unamortized Debt Costs	16,298,000	9,617,000
Senior Debt, Outstanding Carrying Value	1,433,702,000	1,190,383,000
Lazard Group 4.25% Senior Notes [Member]
Debt Instrument [Line Items]
Senior Debt, Initial Principal Amount	$ 500,000,000
Senior Debt, Maturity Date	Nov. 14, 2020
Senior Debt, Annual Interest Rate	4.25%
Senior Debt, Outstanding Principal	$ 250,000,000	500,000,000
Senior Debt, Outstanding Unamortized Debt Costs	978,000	2,647,000
Senior Debt, Outstanding Carrying Value	249,022,000	497,353,000
Lazard Group 3.75% Senior Notes [Member]
Debt Instrument [Line Items]
Senior Debt, Initial Principal Amount	$ 400,000,000
Senior Debt, Maturity Date	Feb. 13, 2025
Senior Debt, Annual Interest Rate	3.75%
Senior Debt, Outstanding Principal	$ 400,000,000	400,000,000
Senior Debt, Outstanding Unamortized Debt Costs	3,006,000	3,361,000
Senior Debt, Outstanding Carrying Value	396,994,000	396,639,000
Lazard Group 3.625% Senior Notes [Member]
Debt Instrument [Line Items]
Senior Debt, Initial Principal Amount	$ 300,000,000
Senior Debt, Maturity Date	Mar. 01, 2027
Senior Debt, Annual Interest Rate	3.625%
Senior Debt, Outstanding Principal	$ 300,000,000	300,000,000
Senior Debt, Outstanding Unamortized Debt Costs	3,314,000	3,609,000
Senior Debt, Outstanding Carrying Value	296,686,000	$ 296,391,000
Lazard Group 4.50% Senior Notes [Member]
Debt Instrument [Line Items]
Senior Debt, Initial Principal Amount	$ 500,000,000
Senior Debt, Maturity Date	Sep. 19, 2028
Senior Debt, Annual Interest Rate	4.50%
Senior Debt, Outstanding Principal	$ 500,000,000
Senior Debt, Outstanding Unamortized Debt Costs	9,000,000
Senior Debt, Outstanding Carrying Value	$ 491,000,000

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Senior Debt - Senior Debt (Parenthetical) (Detail)	9 Months Ended
	Sep. 30, 2018 USD ($)
Debt Instrument [Line Items]
Loss on extinguishment of debt	$ 6,523,000
Lazard Group 4.25% Senior Notes [Member]
Debt Instrument [Line Items]
Senior notes interest rate	4.25%
Original Maturity Date	Nov. 14, 2020
Effective interest rates of senior notes	4.44%
Senior Debt, Initial Principal Amount	$ 500,000,000
Redemption of senior debt aggregate principal amount	250,000,000
Loss on extinguishment of debt	$ 6,523,000
Lazard Group 3.75% Senior Notes [Member]
Debt Instrument [Line Items]
Senior notes interest rate	3.75%
Original Maturity Date	Feb. 13, 2025
Effective interest rates of senior notes	3.87%
Senior Debt, Initial Principal Amount	$ 400,000,000
Lazard Group 3.625% Senior Notes [Member]
Debt Instrument [Line Items]
Senior notes interest rate	3.625%
Original Maturity Date	Mar. 01, 2027
Effective interest rates of senior notes	3.76%
Senior Debt, Initial Principal Amount	$ 300,000,000
Lazard Group 4.50% Senior Notes [Member]
Debt Instrument [Line Items]
Senior notes interest rate	4.50%
Original Maturity Date	Sep. 19, 2028
Effective interest rates of senior notes	4.68%
Senior Debt, Initial Principal Amount	$ 500,000,000
Interest rate, payment terms	Interest on the 2028 Notes is payable semi-annually on March 19 and September 19 of each year, beginning March 19, 2019.

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Senior Debt - Additional Information (Detail) - USD ($)	Sep. 25, 2015	Sep. 30, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Senior debt		$ 1,433,702,000	$ 1,190,383,000
Unused Lines of Credit [Member]
Debt Instrument [Line Items]
Unused lines of credit		169,000,000
Senior Debt [Member]
Debt Instrument [Line Items]
Senior debt		1,433,702,000	1,190,383,000
Fair value of senior debt		1,407,000,000	1,230,000,000
LFB [Member] | Unused Lines of Credit [Member]
Debt Instrument [Line Items]
Unused lines of credit		17,000,000
Amended and Restated Credit Agreement [Member]
Debt Instrument [Line Items]
Senior revolving credit facility	$ 150,000,000
Duration of senior revolving credit facility, in years	5 years
Expiration of credit facility	2020-09
Outstanding credit facility		$ 0	$ 0

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Commitments and Contingencies - Schedule of Future Minimum Rental Payment for Operating Leases (Detail) $ in Thousands	Sep. 30, 2018 USD ($)
Commitments And Contingencies Disclosure [Abstract]
Minimum Rental Commitments Operating - 2018 (October 1 through December 31)	$ 20,992
Minimum Rental Commitments Operating - 2019	85,689
Minimum Rental Commitments Operating - 2020	87,492
Minimum Rental Commitments Operating - 2021	83,164
Minimum Rental Commitments Operating - 2022	70,422
Minimum Rental Commitments Operating - Thereafter	545,624
Total minimum rental commitments	893,383
Less - Sublease proceeds	28,796
Net rental commitments	$ 864,587

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Commitments and Contingencies - Additional Information (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2016	Sep. 30, 2018
Other Commitments [Line Items]
Guarantees indemnifications		$ 4,961,000
Collateral/counter-guarantees		4,961,000
LFB [Member]
Other Commitments [Line Items]
Other commitments		0
LFNY [Member]
Other Commitments [Line Items]
Other commitments		$ 0
Business Acquisitions [Member]
Other Commitments [Line Items]
Number of contingent additional shares earned		0
Business Acquisitions [Member] | Class A Common Stock [Member]
Other Commitments [Line Items]
Common stock issued and issuable	60,817
Business Acquisitions [Member] | Class A Common Stock [Member] | Non-Contingent [Member]
Other Commitments [Line Items]
Common stock issued and issuable	202,984
Business Acquisitions [Member] | Class A Common Stock [Member] | Maximum [Member]
Other Commitments [Line Items]
Contingent shares issuable upon satisfaction of performance thresholds	810,742

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Stockholders' Equity - Schedule of Share Repurchase Authorized by Board of Directors (Detail)	9 Months Ended
	Sep. 30, 2018 USD ($)
February, 2015 [Member]
Equity, Class of Treasury Stock [Line Items]
Share Repurchase Authorization	$ 150,000,000
Expiration	Dec. 31, 2016
January, 2016 [Member]
Equity, Class of Treasury Stock [Line Items]
Share Repurchase Authorization	$ 200,000,000
Expiration	Dec. 31, 2017
April, 2016 [Member]
Equity, Class of Treasury Stock [Line Items]
Share Repurchase Authorization	$ 113,182,000
Expiration	Dec. 31, 2017
November, 2016 [Member]
Equity, Class of Treasury Stock [Line Items]
Share Repurchase Authorization	$ 236,000,000
Expiration	Dec. 31, 2018
October, 2017 [Member]
Equity, Class of Treasury Stock [Line Items]
Share Repurchase Authorization	$ 200,000,000
Expiration	Dec. 31, 2019
April, 2018 [Member]
Equity, Class of Treasury Stock [Line Items]
Share Repurchase Authorization	$ 300,000,000
Expiration	Dec. 31, 2020

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Stockholders' Equity - Schedule of Shares Repurchased Under the Share Repurchase Program (Detail) - $ / shares	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Share Repurchase Program [Abstract]
Purchase of Class A common stock (in shares)	5,797,789	5,838,520
Average Price Per Share	$ 52.88	$ 43.25

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Stockholders' Equity - Additional Information (Detail) - USD ($)		3 Months Ended		9 Months Ended
	Oct. 24, 2018	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Schedule Of Stockholders Equity [Line Items]
Aggregate value of all shares repurchased				$ 306,591,000	$ 252,538,000
Share repurchase remaining authorization		$ 241,793,000		$ 241,793,000
Preferred stock, shares authorized		15,000,000		15,000,000		15,000,000
Preferred stock, par value		$ 0.01		$ 0.01		$ 0.01
Dividend declared per share of common stock		$ 0.44	$ 0.41	$ 2.59	$ 2.40
Subsequent Event [Member]
Schedule Of Stockholders Equity [Line Items]
Dividend declared per share of common stock	$ 0.44
Dividend payable date	Nov. 16, 2018
Dividend date of record	Nov. 05, 2018
Dividend declare date	Oct. 24, 2018
April, 2018 [Member]
Schedule Of Stockholders Equity [Line Items]
Share repurchase authorization expiration date				Dec. 31, 2020
Share Repurchase Authorization		$ 300,000,000		$ 300,000,000
October 24, 2018 [Member] | Subsequent Event [Member]
Schedule Of Stockholders Equity [Line Items]
Share repurchase remaining authorization	$ 524,000,000
Share repurchase authorization expiration date	Dec. 31, 2020
Share Repurchase Authorization	$ 300,000,000
Class A Common Stock [Member] | Executive Officers [Member]
Schedule Of Stockholders Equity [Line Items]
Aggregate value of all shares repurchased				$ 16,400,000	$ 14,700,000
Series A Preferred Stock [Member]
Schedule Of Stockholders Equity [Line Items]
Preferred stock, shares outstanding		0		0		0
Series B Preferred Stock [Member]
Schedule Of Stockholders Equity [Line Items]
Preferred stock, shares outstanding		0		0		0

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Stockholders' Equity - Accumulated Other Comprehensive Income (Loss), Net of Tax (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance			$ 1,258,905	$ 1,293,813
Other comprehensive income (loss) before reclassifications	$ (7,813)	$ 15,033	(30,634)	49,028
Adjustments for items reclassified to earnings, net of tax	949	1,081	2,788	3,523
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX	(6,864)	16,114	(27,846)	52,551
Balance	1,121,585	1,368,475	1,121,585	1,368,475
Accumulated Foreign Currency Adjustment Including Portion Attributable to Noncontrolling Interest
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance	(109,642)	(112,105)	(83,535)	(155,204)
Other comprehensive income (loss) before reclassifications	(8,676)	19,748	(34,783)	62,847
Adjustments for items reclassified to earnings, net of tax	0		0
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX	(8,676)	19,748	(34,783)	62,847
Balance	(118,318)	(92,357)	(118,318)	(92,357)
Accumulated Defined Benefit Plans Adjustment Including Portion Attributable to Noncontrolling Interest
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance	(143,859)	(165,682)	(148,984)	(159,020)
Other comprehensive income (loss) before reclassifications	863	(4,715)	4,149	(13,819)
Adjustments for items reclassified to earnings, net of tax	949	1,081	2,788	3,523
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX	1,812	(3,634)	6,937	(10,296)
Balance	(142,047)	(169,316)	(142,047)	(169,316)
AOCI Attributable to Noncontrolling Interest
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance	(2)	(2)	(1)	(2)
Other comprehensive income (loss) before reclassifications	2	2	1	2
Adjustments for items reclassified to earnings, net of tax	0
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX	2	2	1	2
Accumulated Other Comprehensive Income (Loss), Net of Tax [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance	(253,499)	(277,785)	(232,518)	(314,222)
Other comprehensive income (loss) before reclassifications	(7,815)	15,031	(30,635)	49,026
Adjustments for items reclassified to earnings, net of tax	949	1,081	2,788	3,523
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX	(6,866)	16,112	(27,847)	52,549
Balance	(260,365)	(261,673)	(260,365)	(261,673)
AOCI Including Portion Attributable to Noncontrolling Interest
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance	(253,501)	(277,787)	(232,519)	(314,224)
Balance	$ (260,365)	$ (261,673)	$ (260,365)	$ (261,673)

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Stockholders' Equity - Adjustments for Items Reclassified Out of AOCI (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Total reclassifications, net of tax	$ 949	$ 1,081	$ 2,788	$ 3,523
Accumulated Defined Benefit Plans Adjustment [Member]
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Amortization relating to employee benefit plans	1,213	1,285	3,736	4,199
Less - related income taxes	264	204	948	676
Total reclassifications, net of tax	$ 949	$ 1,081	$ 2,788	$ 3,523

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Stockholders' Equity - Net Income Attributable to Noncontrolling Interests (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Change In Ownership Interest [Line Items]
Net Income Attributable to Noncontrolling Interests	$ 1,651	$ 2,260	$ 5,036	$ 5,660
Noncontrolling interests	54,460		54,460		$ 59,102
Edgewater [Member]
Change In Ownership Interest [Line Items]
Net Income Attributable to Noncontrolling Interests	1,651	$ 2,260	5,034	5,657
Noncontrolling interests	53,902		53,902		58,568
Other [Member]
Change In Ownership Interest [Line Items]
Net Income Attributable to Noncontrolling Interests			2	$ 3
Noncontrolling interests	$ 558		$ 558		$ 534

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Incentive Plans - Additional Information (Detail) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Apr. 24, 2018
Lazard Fund Interests [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense, years	10 months 24 days
Non-Executive [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of annual compensation received by directors in the form of DSUs	55.00%
RSUs [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock conversion basis	one-for-one
Grant date fair value, amortized periods	generally one-third after two years, and the remaining two-thirds after the third year
Unrecognized compensation expense	$ 166,534
Unrecognized compensation expense, years	9 months 18 days
DSUs [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Annual compensation paid in DSUs	30,463	31,280
Units granted under the directors deferred unit plan	9,837	10,541
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense	$ 24,463
Unrecognized compensation expense, years	9 months 18 days
PRSUs [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense	$ 9,487
Unrecognized compensation expense, years	9 months 18 days
Percentage of target number of shares subject to each PRSU no longer subject to forfeiture due to threshold level of performance being achieved	25.00%
Descriptions of vesting period associated with PRSUs	PRSUs will vest on a single date approximately three years following the date of the grant
Vesting period of PRSUs granted	3 years
PRSUs target share distribution for Class A common stock, description	The target number of shares of Class A common stock subject to each PRSU is one; however, based on the achievement of the performance criteria, the number of shares of Class A common stock that may be received in connection with each PRSU generally can range from zero to two times the target number.
Class A Common Stock [Member] | RSUs [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Withholding taxes in lieu of share delivery	1,640,513	1,282,843
Delivery of common stock associated with stock awards	3,963,388	2,694,634
Class A Common Stock [Member] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Withholding taxes in lieu of share delivery	290,321	147,775
Delivery of common stock associated with stock awards	578,991	336,036
Class A Common Stock [Member] | PRSUs [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Withholding taxes in lieu of share delivery	91,962	127,530
Delivery of common stock associated with stock awards	707,440	698,035
Class A Common Stock [Member] | 2018 Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares authorized pertaining to share based compensation arrangements			30,000,000
Class A Common Stock [Member] | Awarded Under 2008 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of outstanding Class A common stock	30.00%
Compensation plan expiration period	Apr. 24, 2018
Class A Common Stock [Member] | 2005 Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares authorized pertaining to share based compensation arrangements	25,000,000

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Incentive Plans - Summary of Impact of Share-Based Incentive Plans on Compensation and Benefits Expense (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Share-based incentive awards:
Share-based incentive awards	$ 48,357	$ 57,647	$ 218,187	$ 220,648
RSUs [Member]
Share-based incentive awards:
Share-based incentive awards	38,121	39,898	154,643	150,193
PRSUs [Member]
Share-based incentive awards:
Share-based incentive awards	3,107	9,896	31,125	38,095
Restricted Stock [Member]
Share-based incentive awards:
Share-based incentive awards	6,950	7,697	30,323	30,507
DSUs [Member]
Share-based incentive awards:
Share-based incentive awards	$ 179	$ 156	$ 2,096	$ 1,853

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Incentive Plans - Schedule of Issuance of RSUs and Charges to Retained Earnings (Detail) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Number of RSUs issued	746,324	866,914
Charges to retained earnings, net of estimated forfeitures	$ 38,923	$ 36,482

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Incentive Plans - Schedule of Activity Relating to RSUs and DSUs (Detail) - $ / shares	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
RSUs [Member]
Share-based compensation arrangement by share-based payment award [Line Items]
Units, Beginning Balance	12,919,846	11,698,138
Units, Granted	4,096,939	5,294,156
Units, Forfeited	(130,138)	(162,320)
Units, Vested	(5,603,901)	(3,977,477)
Units, Ending Balance	11,282,746	12,852,497
Weighted Average Grant Date Fair Value, Beginning Balance	$ 40.23	$ 40.65
Weighted Average Grant Date Fair Value, Granted	53.78	43.01
Weighted Average Grant Date Fair Value, Forfeited	45.11	39.97
Weighted Average Grant Date Fair Value, Vested	42.88	45.27
Weighted Average Grant Date Fair Value, Ending Balance	$ 43.78	$ 40.20
DSUs [Member]
Share-based compensation arrangement by share-based payment award [Line Items]
Units, Beginning Balance	278,422	276,725
Units, Granted	40,300	41,821
Units, Vested		(43,465)
Units, Ending Balance	318,722	275,081
Weighted Average Grant Date Fair Value, Beginning Balance	$ 37.46	$ 36.05
Weighted Average Grant Date Fair Value, Granted	52.00	44.30
Weighted Average Grant Date Fair Value, Vested		35.77
Weighted Average Grant Date Fair Value, Ending Balance	$ 39.30	$ 37.35

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Incentive Plans - Schedule of Activity Relating to RSUs and DSUs (Parenthetical) (Detail) - shares	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Dividend participation rights	746,324	866,914

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Incentive Plans - Summary of Activity Related to Shares of Restricted Class A Common Stock (Detail) - Restricted Stock [Member] - $ / shares	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Share-based compensation arrangement by share-based payment award [Line Items]
Units, Beginning Balance	1,938,160	1,655,073
Units, Granted	529,987	841,355
Units, Forfeited	(30,950)	(65,086)
Units, Vested	(869,312)	(483,811)
Units, Ending Balance	1,567,885	1,947,531
Weighted Average Grant Date Fair Value, Beginning Balance	$ 40.54	$ 40.95
Weighted Average Grant Date Fair Value, Granted	54.45	42.58
Weighted Average Grant Date Fair Value, Forfeited	46.31	40.80
Weighted Average Grant Date Fair Value, Vested	44.15	45.42
Weighted Average Grant Date Fair Value, Ending Balance	$ 43.13	$ 40.54

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Incentive Plans - Summary of Activity Relating to PRSUs (Detail) - PRSUs [Member] - $ / shares	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Share-based compensation arrangement by share-based payment award [Line Items]
Units, Beginning Balance	1,591,693	1,590,756
Units, Granted	399,869	458,113
Units, Vested	(799,402)	(825,565)
Units, Ending Balance	1,192,160	1,223,304
Weighted Average Grant Date Fair Value, Beginning Balance	$ 42.46	$ 40.76
Weighted Average Grant Date Fair Value, Granted	56.80	43.76
Weighted Average Grant Date Fair Value, Vested	46.74	42.27
Weighted Average Grant Date Fair Value, Ending Balance	$ 44.39	$ 40.86

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Incentive Plans - Summary of LFI and Other Similar Deferred Compensation Arrangements (Detail) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Deferred Compensation Arrangement With Individual Excluding Share Based Payments And Postretirement Benefits [Line Items]
Compensation Liability, Beginning Balance	$ 198,417
Compensation Liability, Ending Balance	206,729
LFI and Other Similar Deferred Compensation Arrangements [Member]
Deferred Compensation Arrangement With Individual Excluding Share Based Payments And Postretirement Benefits [Line Items]
Prepaid Compensation Asset, Beginning Balance	60,355	$ 49,650
Prepaid Compensation Asset, Granted	104,740	77,580
Prepaid Compensation Asset, Forfeited	(1,166)	(866)
Prepaid Compensation Asset, Amortization	(68,145)	(52,702)
Prepaid Compensation Asset, Other	(1,489)	1,515
Prepaid Compensation Asset, Ending Balance	94,295	75,177
Compensation Liability, Beginning Balance	182,301	170,388
Compensation Liability, Granted	104,740	77,580
Compensation Liability, Settled	(85,335)	(95,718)
Compensation Liability, Forfeited	(1,767)	(1,647)
Compensation Liability, Increase in fair value of underlying investments	1,712	17,981
Compensation Liability, Adjustment for estimated forfeitures	3,730	5,333
Compensation Liability, Other	(1,403)	1,833
Compensation Liability, Ending Balance	$ 203,978	$ 175,750

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Incentive Plans - Summary of Impact of LFI and Other Similar Deferred Compensation Arrangements (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Share Based Compensation [Abstract]
Amortization, net of forfeitures	$ 19,145	$ 15,961	$ 71,274	$ 57,254
Change in the fair value of underlying investments	3,647	4,875	1,712	17,981
Total	$ 22,792	$ 20,836	$ 72,986	$ 75,235

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Employee Benefit Plans - Components of Net Periodic Benefit Cost (Credit) (Detail) - Pension Plans [Member] - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Components of Net Periodic Benefit Cost (Credit):
Service cost	$ 217	$ 373	$ 670	$ 1,048
Interest cost	3,822	4,191	11,861	12,258
Expected return on plan assets	(7,315)	(6,295)	(22,681)	(18,855)
Amortization of:
Prior service cost				30
Net actuarial loss (gain)	1,213	1,285	3,736	4,169
Net periodic benefit cost (credit)	$ (2,063)	$ (446)	$ (6,414)	$ (1,350)

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Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017	Jan. 01, 2017
Income Tax [Line Items]
U.S. federal statutory income tax rate			21.00%		35.00%
Reduction in deferred tax assets due to tax cuts and jobs act					$ 420,000
Income tax provisions	$ 29,956	$ 32,742	$ 105,684	$ 124,109
Effective income tax rates	21.60%	22.70%	20.20%	26.60%
Adjustments for New Accounting Principle [Member]
Income Tax [Line Items]
Income tax provisions			$ 32,287	$ 9,053
Deferred tax assets recorded for previously unrecognized excess tax benefits on share-based payment awards						$ 81,544
Deferred tax assets, valuation allowance						$ 12,090

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Net Income Per Share of Class A Common Stock - Company's Basic and Diluted Net Income Per Share and Weighted Average Shares Outstanding (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Earnings Per Share [Abstract]
Net income attributable to Lazard Ltd - basic	$ 107,074	$ 109,210	$ 413,729	$ 337,141
Net income attributable to Lazard Ltd - diluted	$ 107,074	$ 109,210	$ 413,729	$ 337,141
Weighted average number of shares of Class A common stock outstanding	119,197,949	120,987,607	119,647,775	121,868,223
Add - adjustment for shares of Class A common stock issuable on a non-contingent basis	258,567	255,991	249,851	274,080
Weighted average number of shares of Class A common stock outstanding - basic	119,456,516	121,243,598	119,897,626	122,142,303
Weighted average number of incremental shares of Class A common stock issuable from share-based incentive compensation	10,403,212	11,150,066	10,852,766	10,265,248
Weighted average number of shares of Class A common stock outstanding - diluted	129,859,728	132,393,664	130,750,392	132,407,551
Net income attributable to Lazard Ltd per share of Class A common stock:
Basic	$ 0.90	$ 0.90	$ 3.45	$ 2.76
Diluted	$ 0.82	$ 0.82	$ 3.16	$ 2.55

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Related Parties - Additional Information (Detail) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended		12 Months Ended
	Oct. 26, 2015	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Related Party Transaction [Line Items]
Fees receivable		$ 546,808		$ 546,808		$ 487,800
U.S. federal statutory income tax rate				21.00%		35.00%
Sponsored Funds [Member]
Related Party Transaction [Line Items]
Fees receivable		69,430		$ 69,430		$ 69,107
LTBP Trust [Member]
Related Party Transaction [Line Items]
Amount of cash savings in income or franchise tax that would be realized as a result of increases in tax basis and certain other tax benefits related to the amended and restated tax receivable agreement	45.00%
Cash tax saving that may arise from tax benefits attributable to payments under the amended and restated tax receivable agreement	85.00%
U.S. federal statutory income tax rate				21.00%		35.00%
Reduction in tax receivable agreement obligation						$ 202,546
Cumulative liability relating to obligations under Amended and Restated Tax Receivable Agreement		277,163		$ 277,163		$ 310,275
Payments under tax receivable agreement				33,112
Asset Management Fees [Member]
Related Party Transaction [Line Items]
Revenue		312,790	$ 301,719	986,777	$ 868,522
Asset Management Fees [Member] | Sponsored Funds [Member]
Related Party Transaction [Line Items]
Revenue		$ 158,425	$ 163,767	$ 510,414	$ 471,727

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Regulatory Authorities - Additional Information (Detail) - USD ($)	Sep. 30, 2018	Jun. 30, 2018
LFNY [Member]
Regulatory Requirements [Line Items]
Specified fixed percentage, minimum required capital	6.67%
Minimum net capital requirement as defined under exchange act	$ 100,000
Regulatory capital	71,698,000
Regulatory capital in excess of minimum requirement	$ 69,461,000
Aggregate indebtedness to net capital ratio	0.47
LFNY [Member] | Maximum [Member]
Regulatory Requirements [Line Items]
Aggregate indebtedness to net capital ratio	15
U.K. Subsidiaries [Member]
Regulatory Requirements [Line Items]
Regulatory capital	$ 165,474,000
Regulatory capital in excess of minimum requirement	145,285,000
CFLF [Member]
Regulatory Requirements [Line Items]
Regulatory capital	129,777,000
Regulatory capital in excess of minimum requirement	69,918,000
Combined European Regulated Group [Member]
Regulatory Requirements [Line Items]
Regulatory capital		$ 197,797,000
Regulatory capital in excess of minimum requirement		$ 94,827,000
Other U.S. and Non-U.S. Subsidiaries [Member]
Regulatory Requirements [Line Items]
Regulatory capital	148,447,000
Regulatory capital in excess of minimum requirement	$ 120,949,000

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Segment Information - Segment's Contribution with Respect to Net Revenue, Operating Expenses, Operating Income (Loss) and Total Assets (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Segment Reporting Information [Line Items]
Net Revenue	$ 626,481	$ 624,859	$ 2,139,117	$ 1,965,503
Operating Expenses	487,800	480,647	1,614,668	1,498,593
Operating Income (Loss)	138,681	144,212	524,449	466,910
Total Assets	4,944,778		4,944,778		$ 4,928,677
Operating Segments [Member] | Financial Advisory Segment [Member]
Segment Reporting Information [Line Items]
Net Revenue	310,418	305,890	1,141,628	1,052,584
Operating Expenses	250,651	245,465	893,524	821,935
Operating Income (Loss)	59,767	60,425	248,104	230,649
Total Assets	876,289		876,289		843,142
Operating Segments [Member] | Asset Management Segment [Member]
Segment Reporting Information [Line Items]
Net Revenue	325,240	320,487	1,032,111	913,728
Operating Expenses	211,564	217,233	670,794	621,885
Operating Income (Loss)	113,676	103,254	361,317	291,843
Total Assets	696,400		696,400		756,398
Corporate [Member]
Segment Reporting Information [Line Items]
Net Revenue	(9,177)	(1,518)	(34,622)	(809)
Operating Expenses	25,585	17,949	50,350	54,773
Operating Income (Loss)	(34,762)	$ (19,467)	(84,972)	$ (55,582)
Total Assets	$ 3,372,089		$ 3,372,089		$ 3,329,137