Stockholders' Equity

3 Months Ended

Mar. 31, 2013

Equity [Abstract]

Stockholders' Equity

11. STOCKHOLDERS’ EQUITY

Lazard Group Distributions—As previously described, Lazard Group’s common membership interests are held by subsidiaries of Lazard Ltd and by LAZ-MD Holdings. Pursuant to provisions of the Operating Agreement, Lazard Group distributions in respect of its common membership interests are allocated to the holders of such interests on a pro rata basis. Such distributions represent amounts necessary to fund (i) any dividends Lazard Ltd may declare on its Class A common stock and (ii) tax distributions in respect of income taxes that Lazard Ltd’s subsidiaries and the members of LAZ-MD Holdings incur as a result of holding Lazard Group common membership interests.

During the three month periods ended March 31, 2013 and 2012, Lazard Group distributed the following amounts to LAZ-MD Holdings and the subsidiaries of Lazard Ltd (none of which related to tax distributions):

	Three Months Ended March 31,
	2013		2012
LAZ-MD Holdings	$	–	$	1,081
Subsidiaries of Lazard Ltd		–		19,164
	$	–	$	20,245

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

Exchange of Lazard Group Common Membership Interests—During the three month period ended March 31, 2012, Lazard Ltd issued 85,196 shares of Class A common stock in connection with the exchange of a like number of Lazard Group common membership interests (received from members of LAZ-MD Holdings in exchange for a like number of LAZ-MD Holdings exchangeable interests). No such exchange occurred during the three month period ended March 31, 2013.

See “Noncontrolling Interests” below for additional information regarding Lazard Ltd’s and LAZ-MD Holdings’ ownership interests in Lazard Group.

Share Repurchase Program—In February 2011, October 2011, April 2012 and October 2012 the Board of Directors of Lazard Ltd authorized, on a cumulative basis, the repurchase of up to $250,000, $125,000, $125,000 and $200,000, respectively, in aggregate cost of Class A common stock and Lazard Group common membership interests through December 31, 2012, December 31, 2013, December 31, 2013 and December 31, 2014, respectively. The Company’s prior share repurchase authorizations expired on December 31, 2009 and December 31, 2011. The Company expects that the share repurchase program, with respect to the Class A common stock, will continue to be used, among other ways, to offset a portion of the shares that have been or will be issued under the Lazard Ltd 2005 Equity Incentive Plan (the “2005 Plan”) and the Lazard Ltd 2008 Incentive Compensation Plan (the “2008 Plan”). Pursuant to such authorizations, purchases have been made in the open market or through privately negotiated transactions. During the three month period ended March 31, 2013, the Company made purchases of 831,157 Class A common shares, at an aggregate cost of $30,168 (no Lazard Group common membership interests were purchased during such three month period).

As of March 31, 2013, $123,898 of the current share repurchase amount authorized as of such date remained available under the share repurchase program, all of which expires December 31, 2014. In addition, under the terms of the 2005 Plan and the 2008 Plan, upon the vesting of restricted stock units (“RSUs”), performance-based restricted stock units (“PRSUs”) and delivery of restricted Class A common stock, shares of Class A common stock may be withheld by the Company to cover its minimum statutory tax withholding requirements (see Note 12 of Notes to Condensed Consolidated Financial Statements).

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 are each non-participating securities convertible into Class A common stock, and have no voting or dividend rights. As of both March 31, 2013 and December 31, 2012, 7,921 shares of Series A preferred stock were outstanding, and no shares of Series B preferred stock were outstanding. At March 31, 2013, no shares of Series A preferred stock were convertible into shares of Class A common stock on a contingent or a non-contingent basis.

Accumulated Other Comprehensive Income (Loss), Net of Tax (“AOCI”)—The table below reflects the components of AOCI at March 31, 2013 and activity during the three month period ended March 31, 2013:

	Currency Translation Adjustments			Interest Rate Hedge			Employee Benefit Plans			Total AOCI			Amount Attributable to Noncontrolling Interests			Total Lazard Ltd AOCI
Balance, January 1, 2013	$	19,405		($	2,502	)	($	128,536	)	($	111,633	)	($	1,092	)	($	110,541	)
Activity January 1, 2013 to March 31, 2013:
Other comprehensive loss before reclassifications		(12,433	)		–			(3,423	)		(15,856	)		(175	)		(15,681	)
Adjustments for items reclassified to earnings, net of tax		–			264			1,218			1,482			18			1,464
Net other comprehensive income (loss)		(12,433	)		264			(2,205	)		(14,374	)		(157	)		(14,217	)
Balance, March 31, 2013	$	6,972		($	2,238	)	($	130,741	)	($	126,007	)	($	1,249	)	($	124,758	)

The table below reflects adjustments for items reclassified out of AOCI, by component, for the three month period ended March 31, 2013:

Amortization of interest rate hedge	$	264	(a)
Amortization expense relating to employee benefit plans		1,620	(b)
Less - tax expense		402
Net of tax		1,218
Total reclassifications, net of tax	$	1,482

(a) Included in “interest expense” on the condensed consolidated statement of operations.

(b) Included in the computation of net periodic benefit cost (see Note 13 of Notes to Condensed Consolidated Financial Statements). Such amount is included in “compensation and benefits” expense on the condensed consolidated statement of operations.

Noncontrolling Interests—Noncontrolling interests principally represent interests held in (i) Lazard Group by LAZ-MD Holdings and (ii) Edgewater’s management vehicles that the Company is deemed to control, but does not own.

The following tables summarize the changes in ownership interests in Lazard Group held by Lazard Ltd and LAZ-MD Holdings during the three month periods ended March 31, 2013 and 2012:

	Lazard Ltd					LAZ-MD Holdings						Total Lazard Group Common Membership Interests
	Common Membership Interests		% Ownership			Common Membership Interests			% Ownership
Balance, January 1, 2012		123,009,311		94.8	%		6,756,779			5.2	%		129,766,090
Activity January 1, 2012 to March 31, 2012:
Common membership interest activity in connection with:
Exchanges for Class A common stock		85,196					(85,196	)					–
Balance, March 31, 2012		123,094,507		94.9	%		6,671,583			5.1	%		129,766,090
Balance, January 1, 2013 and March 31, 2013		128,216,423		98.8	%		1,549,667			1.2	%		129,766,090

The change in Lazard Ltd’s ownership in Lazard Group in the three month periods ended March 31, 2012 did not materially impact Lazard Ltd’s stockholders’ equity.

The tables below summarize net income attributable to noncontrolling interests for the three month periods ended March 31, 2013 and 2012 and noncontrolling interests as of March 31, 2013 and December 31, 2012 in the Company’s condensed consolidated financial statements:

	Net Income Attributable to Noncontrolling Interests
	Three Months Ended March 31,
	2013			2012
Edgewater	$	2,366		$	2,174
LAZ-MD Holdings		192			1,325
Other		(269	)		5
Total	$	2,289		$	3,504

	Noncontrolling Interests As Of
	March 31, 2013		December 31, 2012
Edgewater	$	75,011	$	75,262
LAZ-MD Holdings		4,532		5,405
Other		958		1,217
Total	$	80,501	$	81,884

Dividend Declared, April 2013—On April 25, 2013, the Board of Directors of Lazard Ltd declared a quarterly dividend of $0.25 per share on its Class A common stock, payable on May 24, 2013, to stockholders of record on May 6, 2013.