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Income Taxes
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes INCOME TAXES
Following the Conversion on January 1, 2024, Lazard, Inc. is subject to U.S. federal income taxes on all its income and through its subsidiaries, is also subject to state and local taxes on its income apportioned to various state and local jurisdictions. Lazard Group operates principally through subsidiary corporations including those domiciled outside the U.S. that are subject to local income taxes in foreign jurisdictions. In addition, Lazard Group is subject to Unincorporated Business Tax (“UBT”) attributable to its operations apportioned to New York City.
The components of the Company’s provision (benefit) for income taxes for the years ended December 31, 2024, 2023 and 2022, and a reconciliation of the U.S. federal statutory income tax rate to the Company’s effective tax rates for such years, are shown below.
Year Ended December 31,
202420232022
Current:
Federal$8,693 $96 $2,081 
Foreign77,840 55,513 73,410 
State and local2,163 2,809 6,165 
Total current88,696 58,418 81,656 
Deferred:   
Federal21,312 (58,600)31,980 
Foreign(20,410)(5,123)3,960 
State and local10,166 (17,345)6,769 
Total deferred11,068 (81,068)42,709 
Total$99,764 $(22,650)$124,365 
Year Ended December 31,
202420232022
U.S. federal statutory income tax rate21.0 %21.0 %21.0 %
Foreign source income not subject to U.S. income tax
(0.1)1.0 (0.4)
Change in U.S. federal valuation allowance1.5 4.3 2.0 
Share-based incentive compensation0.5 (4.5)0.2 
Foreign taxes2.3 (20.9)4.0 
Foreign tax credits(1.4)5.0 (3.7)
State and local taxes2.9 19.2 2.3 
Income attributable to noncontrolling interests
(0.4)5.7 (1.4)
Uncertain tax positions(1.8)(0.3)(0.1)
Other1.3 (2.2)0.2 
Effective income tax rate25.8 %28.3 %24.1 %
See Note 23 regarding “operating income (loss)” by geographic region.
Deferred income taxes are provided for the effects of temporary differences between the tax basis of an asset or liability and its reported amount in the consolidated statements of financial condition. These temporary differences result in taxable or deductible amounts in future years. Details of the Company’s deferred tax assets and liabilities are as follows:
December 31,
20242023
Gross Deferred Tax Assets:
Basis adjustments (a)$74,214 $96,534 
Compensation and benefits211,677 199,989 
Net operating loss and tax credit carryforwards259,134 277,103 
Depreciation and amortization33,816 30,530 
Interest carryover - Section 163(j) limitation56,601 42,581 
Other41,393 41,969 
Gross deferred tax assets676,835 688,706 
Valuation allowance(89,662)(99,600)
Deferred tax assets (net of valuation allowance)587,173 589,106 
Gross Deferred Tax Liabilities:
  
Depreciation and amortization8,049 9,221 
Compensation and benefits31,460 22,129 
Goodwill46,237 46,686 
Other22,929 17,587 
Gross deferred tax liabilities108,675 95,623 
Net deferred tax assets$478,498 $493,483 
_____________________
(a)The basis adjustments recorded as of December 31, 2024 and 2023 are primarily the result of additional basis from acquisitions of interests, including the impact of the tax receivable agreement obligation.
The historical profitability of each tax-paying entity is an important factor in determining whether to record a valuation allowance and when to release any such allowance. 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, some of our tax-paying entities have recorded a valuation allowance on substantially all of their deferred tax assets due to the combined effect of operating losses in certain subsidiaries of these entities as well as foreign taxes that together limit their ability to eliminate residual 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 $89,662 and $99,600 of deferred tax assets held by these entities as of December 31, 2024 and 2023, respectively.
Changes in the deferred tax assets valuation allowance for the years ended December 31, 2024, 2023 and 2022 was as follows:
Year Ended December 31,
202420232022
Beginning Balance$99,600 $88,239 $88,953 
Charged (credited) to provision for income taxes(8,026)11,354 5,220 
Charged (credited) to other comprehensive income and other
(1,912)7 (5,934)
Ending Balance$89,662 $99,600 $88,239 
The Company had net operating loss and tax credit carryforwards for which related deferred tax assets of $259,134 were recorded at December 31, 2024 primarily relating to:
(i)indefinite-lived net operating loss carryforwards (subject to various limitations) of approximately $91,000 in Brazil, Germany, Hong Kong, Saudi Arabia and the U.S.; and
(ii)carryforwards of approximately $151,000 that expire in different periods, including U.S. foreign tax credits of which $19,000, if unused, will expire in 2028 and are fully offset by a valuation allowance.
With few exceptions, the Company is no longer subject to income tax examination by foreign tax authorities and by U.S. federal, state and local tax authorities for years prior to 2018. While the Company is under examination in various tax jurisdictions with respect to certain open years, the Company does not expect that the result of any final determination related to these examinations will have a material impact on its financial statements. Developments with respect to such examinations are monitored on an ongoing basis and adjustments to tax liabilities are made as appropriate.
A reconciliation of the beginning to the ending amount of gross unrecognized tax benefits (excluding interest and penalties) for the years ended December 31, 2024, 2023 and 2022 is as follows:
Year Ended December 31,
202420232022
Balance, January 1 (excluding interest and penalties of $18,501, $17,992 and $18,579, respectively)
$79,580 $77,701 $77,617 
Increases in gross unrecognized tax benefits relating to tax positions taken during:
   
Prior years– 615 341 
Current year16,229 18,604 19,193 
Decreases in gross unrecognized tax benefits relating to:
   
Tax positions taken during prior years(9,382)(836)(2,052)
Settlements with tax authorities– (243)(43)
Lapse of the applicable statute of limitations(17,801)(16,261)(17,355)
Balance, December 31 (excluding interest and penalties of $20,348, $18,501 and $17,992, respectively)
$68,626 $79,580 $77,701 
Additional information with respect to unrecognized tax benefits is as follows:
Year Ended December 31,
202420232022
Unrecognized tax benefits at the end of the year that, if recognized, would favorably affect the effective tax rate (includes interest and penalties of $20,348, $18,501 and $17,992, respectively)
$73,195 $80,346 $80,094 
Unrecognized tax benefits that, if recognized, would not affect the effective tax rate
$15,779 $17,735 $15,599 
Interest and penalties recognized in current income tax expense (after giving effect to the reversal of interest and penalties of $5,641, $5,528 and $6,344, respectively)
$1,847 $509 $(587)
The Company anticipates that it is reasonably possible that approximately $20,500 of unrecognized tax benefits, including interest and penalties recorded at December 31, 2024, may be recognized within 12 months as a result of the lapse of the statute of limitations in various tax jurisdictions.