Lazard, Inc.LAZ
Lazard, Inc. Income Taxes Disclosure
INCOME TAXES
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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 LLC 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 LLC is subject to Unincorporated Business Tax (“UBT”) attributable to its operations apportioned to New York City.
The following table represents the U.S. and non-U.S. components of operating income (loss). The Company previously disclosed operating income (loss) by geographic region in its segment information. Comparable prior year information has been recast to reflect the updated presentation.
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| U.S. | $ | 119,552 | $ | 64,153 | $ | (194,353) | |||||||||||
| Non-U.S. | 208,046 | 322,319 | 114,396 | ||||||||||||||
| Operating income (loss) | $ | 327,598 | $ | 386,472 | $ | (79,957) | |||||||||||
The components of the Company’s provision (benefit) for income taxes for the years ended December 31, 2025, 2024 and 2023, are shown below.
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Current: | |||||||||||||||||
| Federal | $ | (3,993) | $ | 8,693 | $ | 96 | |||||||||||
| Foreign | 50,028 | 77,840 | 55,513 | ||||||||||||||
| State and local | 8,968 | 2,163 | 2,809 | ||||||||||||||
| Total current | 55,003 | 88,696 | 58,418 | ||||||||||||||
| Deferred: | |||||||||||||||||
| Federal | 20,728 | 21,312 | (58,600) | ||||||||||||||
| Foreign | 3,299 | (20,410) | (5,123) | ||||||||||||||
| State and local | (2,452) | 10,166 | (17,345) | ||||||||||||||
| Total deferred | 21,575 | 11,068 | (81,068) | ||||||||||||||
| Total | $ | 76,578 | $ | 99,764 | $ | (22,650) | |||||||||||
A reconciliation of the U.S. federal statutory income tax rate to the Company’s effective tax rate after the adoption of the new income tax disclosures guidance is shown below:
| Year Ended December 31, 2025 | |||||||||||
| Amount | Percent | ||||||||||
| U.S. Federal Statutory Tax Rate | $ | 68,796 | 21.0 | % | |||||||
| State and Local Income Taxes, Net of Federal Income Tax Effect (a) | 768 | 0.2 | |||||||||
| Foreign Tax Effects | |||||||||||
| France | |||||||||||
| Statutory tax rate difference between France and United States | 6,077 | 1.9 | |||||||||
| Withholding taxes | 4,534 | 1.4 | |||||||||
| Other | 1,380 | 0.4 | |||||||||
| United Kingdom | |||||||||||
| Share-based incentive compensation | (4,117) | (1.3) | |||||||||
| Other | (1,497) | (0.5) | |||||||||
| Other foreign jurisdictions | 8,221 | 2.5 | |||||||||
| Effect of Cross-Border Tax Laws | |||||||||||
| Foreign branch tax effects | (14,028) | (4.3) | |||||||||
| Other | 3,953 | 1.2 | |||||||||
| Tax Credits | (2,140) | (0.7) | |||||||||
| Changes in Valuation Allowances | 18,846 | 5.8 | |||||||||
| Nontaxable or Nondeductible Items | |||||||||||
| Share-based incentive compensation | (11,052) | (3.4) | |||||||||
| Non-deductible executive compensation | 10,330 | 3.2 | |||||||||
| Other | (9,441) | (2.8) | |||||||||
| Changes in Unrecognized Tax Benefits (b) | (4,052) | (1.2) | |||||||||
| Effective Income Tax Rate | $ | 76,578 | 23.4 | % | |||||||
(a)State taxes in New York made up the majority of the tax effect of this category.
(b)Changes in unrecognized tax benefits on an aggregated basis for all jurisdictions.
A reconciliation of the U.S. federal statutory income tax rate to the Company’s effective tax rates prior to the adoption of the new income tax disclosures guidance is shown below:
Year Ended December 31, | ||||||||||||||
| 2024 | 2023 | |||||||||||||
| U.S. federal statutory income tax rate | 21.0 | % | 21.0 | % | ||||||||||
Foreign source income not subject to U.S. income tax | (0.1) | 1.0 | ||||||||||||
| Change in U.S. federal valuation allowance | 1.5 | 4.3 | ||||||||||||
| Share-based incentive compensation | 0.5 | (4.5) | ||||||||||||
| Foreign taxes | 2.3 | (20.9) | ||||||||||||
| Foreign tax credits | (1.4) | 5.0 | ||||||||||||
| State and local taxes | 2.9 | 19.2 | ||||||||||||
Income attributable to noncontrolling interests | (0.4) | 5.7 | ||||||||||||
| Uncertain tax positions | (1.8) | (0.3) | ||||||||||||
| Other | 1.3 | (2.2) | ||||||||||||
| Effective income tax rate | 25.8 | % | 28.3 | % | ||||||||||
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, | |||||||||||
| 2025 | 2024 | ||||||||||
Gross Deferred Tax Assets: | |||||||||||
| Basis adjustments (a) | $ | 75,043 | $ | 74,214 | |||||||
| Compensation and benefits | 219,073 | 211,677 | |||||||||
| Net operating loss and tax credit carryforwards | 270,258 | 259,134 | |||||||||
| Depreciation and amortization | 22,779 | 33,816 | |||||||||
| Interest carryover - Section 163(j) limitation | 57,029 | 56,601 | |||||||||
| Other | 45,919 | 41,393 | |||||||||
| Gross deferred tax assets | 690,101 | 676,835 | |||||||||
| Valuation allowance | (112,627) | (89,662) | |||||||||
| Deferred tax assets (net of valuation allowance) | 577,474 | 587,173 | |||||||||
Gross Deferred Tax Liabilities: | |||||||||||
| Depreciation and amortization | 10,474 | 8,049 | |||||||||
| Compensation and benefits | 31,125 | 31,460 | |||||||||
| Goodwill | 48,153 | 46,237 | |||||||||
| Other | 30,003 | 22,929 | |||||||||
| Gross deferred tax liabilities | 119,755 | 108,675 | |||||||||
| Net deferred tax assets | $ | 457,719 | $ | 478,498 | |||||||
(a)The basis adjustments recorded as of December 31, 2025 and 2024 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 $112,627 and $89,662 of deferred tax assets held by these entities as of December 31, 2025 and 2024, respectively.
Changes in the deferred tax assets valuation allowance for the years ended December 31, 2025, 2024 and 2023 was as follows:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Beginning Balance | $ | 89,662 | $ | 99,600 | $ | 88,239 | |||||||||||
| Charged (credited) to provision for income taxes | 20,697 | (8,026) | 11,354 | ||||||||||||||
Charged (credited) to other comprehensive income and other | 2,268 | (1,912) | 7 | ||||||||||||||
| Ending Balance | $ | 112,627 | $ | 89,662 | $ | 99,600 | |||||||||||
The Company had net operating loss and tax credit carryforwards for which related deferred tax assets of $270,258 were recorded at December 31, 2025 primarily relating to:
(i)indefinite-lived net operating loss carryforwards (subject to various limitations) of approximately $90,000 in Brazil, Germany, Hong Kong, Saudi Arabia, United Kingdom and the U.S.; and
(ii)carryforwards of approximately $165,000 that expire in different periods, including U.S. foreign tax credits of which $20,000, 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, 2025, 2024 and 2023 is as follows:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
Balance, January 1 (excluding interest and penalties of $20,348, $18,501 and $17,992, respectively) | $ | 68,626 | $ | 79,580 | $ | 77,701 | |||||||||||
Increases in gross unrecognized tax benefits relating to tax positions taken during: | |||||||||||||||||
| Prior years | 3,999 | – | 615 | ||||||||||||||
| Current year | 12,812 | 16,229 | 18,604 | ||||||||||||||
Decreases in gross unrecognized tax benefits relating to: | |||||||||||||||||
| Tax positions taken during prior years | (2,293) | (9,382) | (836) | ||||||||||||||
| Settlements with tax authorities | (671) | – | (243) | ||||||||||||||
| Lapse of the applicable statute of limitations | (17,788) | (17,801) | (16,261) | ||||||||||||||
Balance, December 31 (excluding interest and penalties of $20,820, $20,348 and $18,501, respectively) | $ | 64,685 | $ | 68,626 | $ | 79,580 | |||||||||||
Additional information with respect to unrecognized tax benefits is as follows:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
Unrecognized tax benefits at the end of the year that, if recognized, would favorably affect the effective tax rate (includes interest and penalties of $20,820, $20,348 and $18,501, respectively) | $ | 68,472 | $ | 73,195 | $ | 80,346 | |||||||||||
Unrecognized tax benefits that, if recognized, would not affect the effective tax rate | $ | 17,033 | $ | 15,779 | $ | 17,735 | |||||||||||
Interest and penalties recognized in current income tax expense (after giving effect to the reversal of interest and penalties of $7,393, $5,641 and $5,528, respectively) | $ | 472 | $ | 1,847 | $ | 509 | |||||||||||
The amount of cash income taxes, net of refunds were as follows:
| Year Ended December 31, 2025 | |||||
| Federal | $ | 13,088 | |||
| State and local | 3,221 | ||||
| Foreign | |||||
| Australia | 6,377 | ||||
| France | 75,363 | ||||
| Italy | 8,857 | ||||
| All other foreign | 11,847 | ||||
| Income taxes, net of refunds | $ | 118,753 | |||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 23, 2026 | Showing above |
| 2024 | Feb 24, 2025 | |
| 2023 | Feb 23, 2024 | |
| 2022 | Feb 23, 2023 | |
| 2021 | Feb 28, 2022 | |
| 2020 | Feb 26, 2021 | |
| 2019 | Feb 25, 2020 | |
| 2018 | Feb 26, 2019 | |
| 2017 | Feb 27, 2018 | |
| 2016 | Feb 24, 2017 | |
| 2015 | Feb 25, 2016 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.