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~~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 ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ 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 ~~and post~~ 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.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with 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 ~~November 1, 2017,~~July 24, 2023, there were ~~18,595,394~~24,193,651 shares of Class A common stock, par value $0.01 per share, and ~~240~~140 shares of Class B common stock, par value $0.01 per share, outstanding.

PJT Partners Inc. was formed in connection with certain merger and spin-off transactions whereby the financial and strategic advisory services, restructuring and reorganization advisory services and Park Hill Group businesses of ~~The~~ Blackstone ~~Group L.P.~~Inc. (“Blackstone” or our “former Parent”) were combined with PJT Capital LP, a financial advisory firm founded by Paul J. Taubman in 2013 (together with its then affiliates, “PJT Capital”), and the combined business was distributed to Blackstone’s unitholders to create PJT Partners Inc., a stand-alone, independent publicly traded company. Throughout this Quarterly Report on Form 10-Q, we refer to this transaction as the ~~“spin-off” or the “acquisition.~~“spin-off.” PJT Partners Inc. is a holding company and its only material asset is its controlling equity interest in PJT Partners Holdings LP, a holding partnership that holds the ~~company’s~~Company’s operating subsidiaries, and certain cash and cash equivalents it may hold from time to time. As the sole general partner of PJT Partners Holdings LP, PJT Partners Inc. operates and controls all of the business and affairs of PJT Partners Holdings LP and its operating subsidiaries.

~~Additionally in~~In this Quarterly Report on Form 10-Q, unless the context requires otherwise, the words “PJT Partners Inc.” refers to PJT Partners Inc., and “PJT Partners,” the ~~“company,~~“Company,” “we,” “us” and “our” refer to PJT Partners Inc., together with its consolidated subsidiaries, including PJT Partners Holdings LP and its operating subsidiaries.

Certain material presented herein contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as ~~amended.~~amended (the “Exchange Act”). Forward-looking statements include certain information concerning future results of operations, business strategies, acquisitions, financing plans, competitive position, potential growth opportunities, potential operating performance improvements, the effects of competition and the effects of future legislation or regulations. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words “believe,” “expect,” “opportunity,” “plan,” “intend,” “anticipate,” “estimate,” “predict,” “potential,” “continue,” “may,” “might,” “should,” “could” or the negative of these terms or similar expressions.

Forward-looking statements ~~involve~~are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations, and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy, and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, ~~uncertainties~~ and ~~assumptions. Actual~~changes in circumstances that are difficult to predict, many of which are outside our control. Our actual results and financial condition may differ materially from those ~~expressed~~indicated in ~~such~~the forward-looking statements. ~~You~~Therefore, you should not ~~put~~place undue reliance onupon any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements ~~contained herein. We undertake no obligation to publicly update~~include, among others, the following: (a) changes in governmental regulations and policies; (b) cyberattacks, security vulnerabilities, and internet disruptions, including breaches of data security and privacy leaks, data loss, and business interruptions; (c) failures of our computer systems or ~~review any forward-looking statement, whether~~communication systems, including as a result of ~~new information, future developments or otherwise.~~a catastrophic event and the use of remote work environments and virtual platforms; (d) the impact of catastrophic events, including business disruptions, pandemics, reductions in employment and an increase in business failures on (1) the U.S. and the global economy, and (2) our employees and our ability to provide services to our clients and respond to their needs; (e) the failure of third-party service providers to perform their functions; and (f) volatility in the political and economic environment, including as a result of inflation, rising interest rates, international conflict, and recent events affecting the financial services industry.

Any of these factors, as well as such other factors discussed in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, ~~2016,~~2022, filed with the United States Securities and Exchange Commission (“SEC”), as such factors may be updated from time to time in our periodic filings with the SEC, accessible on the SEC’s website at www.sec.gov, could cause our results to differ materially from those expressed in forward-looking statements. There may be other risks and uncertainties that we are unable to predict at this time or that are not currently expected to have a material adverse effect on ~~its~~our business. Any such risks could cause our results to differ materially from those expressed in forward-looking statements.

We use our website (www.pjtpartners.com) as a channel of distribution of ~~company~~Company information. The information we post may be deemed material. Accordingly, investors should monitor the website, in addition to following our press releases, SEC filings and public conference calls and webcasts. In addition, you may automatically receive e-mail alerts and other information about PJT Partners when you enroll your e-mail address by visiting the “Investor Relations” page of our website at ~~ir.pjtpartners.com/investor-relations.~~ir.pjtpartners.com. Although we refer to our website in this report, the contents of our website are not included or incorporated by reference into this report. All references to our website in this report are intended to be inactive textual references only.

Condensed Consolidated Statements of Comprehensive Income ~~(Loss)~~ (Unaudited)

Condensed Consolidated Statements of Changes in Equity ~~(Deficit)~~ (Unaudited)

(All Dollars Are in Thousands, Except Share and Per Share Data, Except Where Noted)

1.	~~ORGANIZATION~~

ORGANIZATION

PJT Partners Inc. and its consolidated subsidiaries (the “Company” or “PJT Partners”) deliver a wide array of strategic advisory, restructuring and special situations and private fund advisory and placement services to corporations, financial sponsors, institutional investors and governments around the world. The Company offersoffer a unique portfolio of advisory services designed to help ~~its~~ clients realize major corporate milestones and solve complex issues. Also, through Park Hill Group, the Company provides private fund advisory and placement services for alternative investment managers, including private equity funds, real estate funds and hedge funds.achieve their strategic objectives.

On October 1, 2015, ~~The~~ Blackstone ~~Group L.P.~~Inc. (“Blackstone” or the “former Parent”) distributed on a pro rata basis to its common unitholders all of the issued and outstanding shares of Class A common stock of PJT Partners Inc. held by it. This pro rata distribution is referred to as the “Distribution.” The separation of the PJT Partners business from Blackstone and related transactions, including the Distribution, the internal reorganization that preceded the Distribution and the acquisition by PJT Partners of PJT Capital LP (together with its general partner and their respective subsidiaries, “PJT Capital”) that occurred substantially concurrently with the Distribution, is referred to as the “spin-off.”

~~Following the spin-off,~~ PJT Partners Inc. ~~became~~is the sole general partner of PJT Partners Holdings LP. PJT Partners Inc. owns less than ~~100%~~100% of the economic interest in PJT Partners Holdings LP, but has ~~100%~~100% of the voting power and controls the management of PJT Partners Holdings LP. As of ~~September~~June 30, ~~2017,~~2023, the non-controlling interest of PJT Partners Holdings LP was ~~44.1%~~37.5%. As the sole general partner of PJT Partners Holdings LP, PJT Partners Inc. operates and controls all of the business and affairs and consolidates the financial results of PJT Partners Holdings LP and its operating subsidiaries. The Company operates through the following subsidiaries: PJT Partners LP, ~~Park Hill Group LLC,~~ PJT Partners (UK) Limited, PJT Partners (HK) Limited, PJT Partners Park Hill (Spain) A.V., S.A.U., PJT Partners (Germany) GmbH, PJT Partners (France) SAS and PJT Partners ~~(HK) Limited.~~Japan K.K.

REVENUES FROM CONTRACTS WITH CUSTOMERS

The following table provides a disaggregation of revenues recognized from contracts with ~~customers. The guidance requires that an entity should recognize revenue to depict~~customers for the ~~transfer~~three and six months ended June 30, 2023 and 2022:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Advisory Fees	$	323,794	$	186,649	$	491,884	$	368,307
Placement Fees		20,028		49,482		47,613		109,833
Interest Income from Placement Fees and Other		3,952		2,035		8,222		4,157
Revenues from Contracts with Customers	$	347,774	$	238,166	$	547,719	$	482,297

Remaining Performance Obligations and Revenue Recognized from Past Performance

As of ~~promised goods or services to customers in an~~June 30, 2023, the aggregate amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. An entity is required to (a) identify the contract(s) with a customer, (b) identify the performance obligations in the contract, (c) determineof the transaction price (d) allocate the transaction price to the performance obligations in the contract, and (e) recognize revenue when (or as) the entity satisfies a performance obligation. In determining the transaction price, an entity may include variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur when the uncertainty associated with the variable consideration is resolved. The guidance introduces new qualitative and quantitative disclosure requirements about contracts with customers including revenue and impairments recognized, disaggregation of revenue and information about contract balances and performance obligations. Information is required about significant judgments and changes in judgments in determining the timing of satisfaction of performance obligations and determining the transaction price and amounts allocated to performance ~~obligations. Additional disclosures~~obligations yet to be satisfied was $25.2 million and the Company generally expects to recognize this revenue within the next twelve months. Such amounts relate to the Company’s performance obligations of providing advisory and placement services.

The Company recognized revenue of $6.8 million and $10.4 million for the three and six months ended June 30, 2023, respectively, and $21.0 million and $45.6 million for the three and six months ended June 30, 2022, respectively, related to performance obligations that were fully satisfied in prior periods, primarily due to constraints on variable consideration in prior periods being resolved. Such amounts related primarily to the provision of corporate and fund placement services. The majority of Fee Revenue recognized by the Company during the three and six months ended June 30, 2023 and 2022 was predominantly related to performance obligations that were partially satisfied in prior periods.

Contract Balances

There were no significant impairments related to contract balances during the three and six months ended June 30, 2023 and 2022.

For the six months ended June 30, 2023 and 2022, $10.4 million and $9.9 million, respectively, of revenue was recognized that was included in the beginning balance of Deferred Revenue, primarily related to the Company’s performance obligation of standing ready to perform. In certain contracts, the Company receives customer expense advances, which are ~~required about assets recognized from the costs~~also considered to ~~obtain or fulfill a contract.~~be contract liabilities. As originally proposed, the guidance was effective prospectively for annual periods beginning after December 15, 2016 including interim periods within that reporting period. The FASB approved a one-year deferral of ~~the effective date of this guidance, such that it will be effective for annual reporting periods beginning after~~June 30, 2023 and December 31, ~~2017, with early adoption permitted for annual periods beginning after December 15, 2016. The~~2022, the Company plans to adopt the standard using the modified retrospective approach as of January 1, 2018. The Company has performed an assessment of the impact that adoption of this guidance will have on its consolidated financial statements, but is awaiting the outcome of decisions from the ~~AICPA’s industry task force on Broker-Dealers, the AICPA’s Revenue Recognition Working Group~~recorded $2.2 million and ~~the AICPA’s Financial Reporting Executive Committee (FinREC)~~$1.8 million, respectively, in ~~order to conclude on the revenue recognition pattern of advisory fees~~Accounts Payable, Accrued Expenses and the corresponding impact on the recognition of reimbursable expenses. The Company expects to provide disclosures regarding its assessment of performance obligations, contract balances, contract costs, significant judgments made and any practical expedients that have been applied. The Company will provide additional information about the expected impact of adoption as available.

In February 2016, the FASB issued new guidance regarding leases. The guidance requires lessees to recognize, on the balance sheet, assets and liabilities for the rights and obligations created by leases. Entities are also required to provide enhanced disclosure about leasing arrangements. The amendments retain lease classifications, distinguishing finance leases from operating leases, using criteria that are substantially similar for distinguishing capital leases from operating leases in previous guidance. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. Adoption requires a modified retrospective approach. Based on the Company’s initial evaluation, ~~adoption on January 1, 2019 will result~~Other Liabilities in the ~~present value of the Company’s lease commitments that have a term in excess of one year being recorded on the Company’s~~Condensed Consolidated Statements of Financial Condition ~~as a right-of-use asset with a corresponding liability. The Company’s lease commitments, as discussed in Note 11. “Commitments and Contingencies—Commitments, Leases,”~~ primarily ~~relate to office space. The lease-related assets will be amortized~~related to expense over the life of the leases and the liability, and related interest expense, will be reduced as lease payments are made over the life of the lease. The Company is currently assessing the impact that adoption of this guidance will have on its consolidated financial statements.advances.

In June 2016, the FASB issued guidance regarding the measurement of credit losses on financial instruments. The new guidance replaces the incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2018. The Company is currently assessing the impact that adoption of this guidance will have on its consolidated financial statements.

(All Dollars Are in Thousands, Except Share and Per Share Data, Except Where Noted)

ACCOUNTS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES

~~In November 2016, the FASB issued guidance that requires that a statement of cash flows explain the change during the period~~Changes in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash or restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The new guidance is effectiveallowance for ~~interim and annual periods beginning after December 15, 2017 and early adoption is permitted. Adoption requires a retrospective approach.~~ ~~The Company is currently assessing the impact~~credit losses consist of the ~~adoption~~following:


	Six Months Ended June 30,
	2023			2022
Beginning Balance	$	1,945		$	1,853
Provision for Credit Losses		2,574			1,687
Write-offs		(1,542	)		(1,372	)
Ending Balance	$	2,977		$	2,168

Included in Accounts Receivable, Net is accrued interest of ~~this guidance, but does not expect that adoption~~$3.4 million and $2.7 million as of ~~this guidance on January 1, 2018 will have a material impact on its Consolidated Statements of Cash Flows.~~June 30, 2023 and December 31, 2022, respectively, related to placement fees.

In January 2017, the FASB issued guidance clarifying the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions of assets or businesses. This new guidance becomes effective for the Company in the first quarter of 2019 and is applied prospectively. ~~The Company is currently assessing the impact that adoption of this guidance will have on its consolidated financial statements.~~

In January 2017, the FASB issued guidance intended to simplify how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. ~~This new guidance becomes effective for the Company in~~ ~~its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019~~ ~~and is applied prospectively, with early adoption permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017.~~ ~~The Company expects that adoption of this guidance will not have a material impact on its consolidated financial statements.~~

3.	~~ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS~~

Included in Accounts Receivable, Net are long-term receivables of ~~$65.3~~$125.8 million and ~~$73.1~~$133.3 million as of ~~September~~June 30, ~~2017~~2023 and December 31, ~~2016,~~2022, respectively, related to placement fees that are generally paid in installments over a period of three to four ~~years. The carrying value of such long-term receivables approximates fair value. Long-term receivables are classified as Level II in the fair value hierarchy.~~years.

The Company does not have any long-term receivables on non-accrual status. ~~Long-term~~Of receivables that originated as long-term, there were $1.1 million and $6.5 million as of June 30, 2023 and December 31, 2022, respectively, which were outstanding more than 90 ~~days past due as of September 30, 2017 and December 31, 2016 were $1.0 million and $2.7 million, respectively.~~

~~There was no~~days. The Company’s allowance for ~~doubtful accounts~~credit losses with respect to long-term receivables was $0.5 million as of ~~September~~each of June 30, ~~2017 or~~2023 and December 31, ~~2016.~~2022.

INTANGIBLE ASSETS

4.	~~INTANGIBLE ASSETS~~

Intangible Assets, Net consists of the following:

	September 30,			December 31,
	2017			2016			June 30, 2023			December 31, 2022
Finite-Lived Intangible Assets
Customer Relationships	$	26,476		$	26,476		$	61,276		$	61,276
Trade Name		5,700			5,700			9,800			9,800
Client Mandates and Other		—			1,276
Total Intangible Assets		32,176			33,452			71,076			71,076
Accumulated Amortization		(19,297	)		(18,739	)
Intangible Assets, Net (a)	$	12,879		$	14,713
Customer Relationships								(47,139	)		(44,964	)
Trade Name								(8,517	)		(8,232	)
Total Accumulated Amortization								(55,656	)		(53,196	)
Intangible Assets, Net							$	15,420		$	17,880

Amortization expense was $1.2 million and $2.5 million for the three and six months ended June 30, 2023, respectively, and $1.9 million and $3.8 million for the three and six months ended June 30, 2022, respectively.

~~(a)~~

Amortization of Intangible Assets held at June 30, 2023 is expected to be $2.5 million for the remainder of the year ending December 31, 2023; $4.9 million the year ending December 31, 2024; $4.8 million for the year ending December 31, 2025; and $3.3 million for the year ending December 31, 2026.

~~Excludes fully amortized intangible assets.~~

1012

PJT Partners Inc.

Notes to Condensed Consolidated Financial Statements – Continued (Unaudited)

(All Dollars Are in Thousands, Except Share and Per Share Data, Except Where Noted)

Amortization expense was $0.6 million and $1.8 million for the three and nine months ended September 30, 2017, respectively, and $2.6 million and $8.2 million for the three and nine months ended September 30, 2016, respectively.

Amortization of intangible assets held at September 30, 2017 is expected to be $2.4 million for the year ending December 31, 2017 and $2.3 million for each of the years ending December 31, 2018, 2019, 2020 and 2021.

5.	6. FURNITURE, EQUIPMENT AND LEASEHOLD IMPROVEMENTS

Furniture, Equipment and Leasehold Improvements, Net consists of the following:

	September 30,			December 31,
	2017			2016			June 30, 2023			December 31, 2022
Office Equipment	$	1,825		$	1,778
Leasehold Improvements		33,527			32,889		$	56,782		$	54,555
Furniture and Fixtures		12,069			11,364			19,326			18,811
Office Equipment								6,436			5,533
Total Furniture, Equipment and Leasehold Improvements		47,421			46,031			82,544			78,899
Accumulated Depreciation		(12,322	)		(7,876	)		(53,186	)		(48,206	)
Furniture, Equipment and Leasehold Improvements, Net	$	35,099		$	38,155		$	29,358		$	30,693

Depreciation expense was ~~$1.5~~$2.4 million and ~~$4.3~~$4.6 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2023, respectively, and ~~$1.4~~$2.2 million and ~~$3.7~~$4.6 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2022, respectively.

FAIR VALUE MEASUREMENTS

The following tables summarize the valuation of the Company’s investments by the fair value hierarchy:

6.	~~FAIR VALUE MEASUREMENTS~~


	June 30, 2023
	Level I		Level II		Level III		Total
Treasury Securities	$	—	$	104,208	$	—	$	104,208

	December 31, 2022
	Level I		Level II		Level III		Total
Treasury Securities	$	—	$	50,242	$	—	$	50,242

~~The Company generally invests~~Investments in ~~U.S.~~ Treasury securities with remaining maturities of less than twelve months. As of September 30, 2017 and December 31, 2016, the Company held investments in U.S. Treasury securities of $56.0 million and $50.0 million, respectively, of which $0.9 million and $50.0 million were included in both Cash and Cash Equivalents and Investments as of June 30, 2023 and in Investments as of December 31, 2022 in the Condensed Consolidated Statements of Financial Condition. ~~U.S. Treasury securities with original maturities of greater than 90 days are included in Investments in~~

INCOME TAXES

The following table summarizes the ~~Condensed Consolidated Statements of Financial Condition.~~Company’s tax position:

In making an assessment of the fair value hierarchy classification, the Company considers the amount of trading activity, observability of pricing inputs as well as whether the securities are of the most recent issuance of that security with the same maturity (referred to as “on-the-run”, which is the most liquid version of the maturity band). As of September 30, 2017 and December 31, 2016, all U.S. Treasury securities held by the Company were classified as Level II in the fair value hierarchy. During the three and nine months ended September 30, 2017, there were no transfers from Level I to Level II related to U.S. Treasury securities that were initially acquired as on-the-run and classified as Level I, but subsequently transferred to Level II as a result of becoming off-the-run. There were also no transfers between Level I, Level II or Level III during the three and nine months ended September 30, 2017.

7.	~~INCOME TAXES~~


	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Income Before Provision for Taxes	$	54,169		$	43,688		$	83,362		$	93,836
Provision for Taxes	$	13,117		$	8,495		$	14,324		$	14,175
Effective Income Tax Rate		24.2	%		19.4	%		17.2	%		15.1	%

The Company’s effective tax rate was 84.9% and 100.2% for the three and nine months ended September 30, 2017, respectively, and -427.3% and -43.7% for the three and nine months ended September 30, 2016, respectively. The Company’s income tax benefit was $13.3 million and $15.6 million for the three and nine months ended September 30, 2017, respectively, and income tax provision was $8.4 million and $4.1 million for the three and nine months ended September 30, 2016, respectively.

~~PJT Partners Inc.~~

~~Notes to Condensed Consolidated Financial Statements – Continued (Unaudited)~~

~~(All Dollars Are in Thousands, Except Share and Per Share Data, Except Where Noted)~~

The Company’s effective tax rate differed from the U.S. federal statutory tax rate for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 primarily due to ~~corporate entities~~partnership income not being subject to U.S. ~~federal, state, local~~corporate income taxes and ~~foreign income taxes;~~permanent differences related to ~~non-corporate entities~~compensation.

The Company had no unrecognized tax benefits as of June 30, 2023.

During the quarter ended March 31, 2023, the Company's holding partnership, PJT Partners Holdings LP, received a notice from the Internal Revenue Service that ~~are subject to New York City Unincorporated Business Tax and to certain compensation charges that are~~its Form 1065, U.S. Return of Partnership Income, was selected for examination for the tax year ended December 31, 2020. The Company currently does not ~~deductible for income tax purposes.~~

~~The change in~~expect the ~~Company’s effective tax rate between the three and nine months ended September 30, 2016 and three and nine months ended September 30, 2017 was largely due to the use~~results of the ~~actual year-to-date rate as of September 30, 2016~~audit to have any material impact on its condensed consolidated financial statements.

PJT Partners Inc.

Notes to Condensed Consolidated Financial Statements – Continued (Unaudited)

(All Dollars Are in ~~determining tax expense in comparison to using an annualized effective tax rate in determining tax expense for the nine months ended September 30, 2017.~~Thousands, Except Share and Per Share Data, Except Where Noted)

~~As of September 30, 2017, the Company had no unrecognized tax benefits.~~

8.	9. NET INCOME ~~(LOSS)~~ PER SHARE OF CLASS A COMMON STOCK

Basic and diluted net income ~~(loss)~~ per share of Class A common stock for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 and ~~2016~~2022 is presented below:

Three Months Ended September 30,

Nine Months Ended September 30,

2017

2016

2017

2016

Numerator:

Net Income (Loss) Attributable to PJT Partners Inc.

$
3,343

$
(9,711
)

$
4,891

$
(9,779
)
Less:

Dividends on Participating Securities (a)

20

—

68

—

Net Income Attributable to Participating Securities (a)

50

—

51

—

Net Income (Loss) Attributable to Shares of Class A
  Common Stock — Basic

3,273

(9,711
)

4,772

(9,779
)
Incremental Net Income from Dilutive Securities

286

—

123

—

Net Income (Loss) Attributable to Shares of Class A
  Common Stock — Diluted

$
3,559

$
(9,711
)

$
4,895

$
(9,779
)
Denominator:

Weighted-Average Shares of Class A Common
   Stock Outstanding — Basic

18,918,181

18,319,785

18,841,975

18,282,180

Weighted-Average Number of Incremental Shares from
  Unvested RSUs

4,000,474

(b)

3,575,867

(b)

Weighted-Average Shares of Class A Common
   Stock Outstanding — Diluted

22,918,655

18,319,785

22,417,842

18,282,180

Net Income (Loss) Per Share of Class A Common Stock

Basic

$
0.17

$
(0.53
)

$
0.25

$
(0.53
)
Diluted

$
0.16

$
(0.53
)

$
0.22

$
(0.53
)


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Numerator:
Net Income Attributable to Shares of Class A Common Stock — Basic	$	22,141	$	19,168	$	39,477	$	44,872
Incremental Net Income from Dilutive Securities		533		476		1,145		1,261
Net Income Attributable to Shares of Class A Common Stock — Diluted	$	22,674	$	19,644	$	40,622	$	46,133
Denominator:
Weighted-Average Shares of Class A Common Stock Outstanding — Basic		25,238,144		25,141,339		25,234,983		25,065,684
Weighted-Average Number of Incremental Shares from Unvested RSUs and Partnership Units		1,095,117		1,279,748		1,390,907		1,421,215
Weighted-Average Shares of Class A Common Stock Outstanding — Diluted		26,333,261		26,421,087		26,625,890		26,486,899
Net Income Per Share of Class A Common Stock
Basic	$	0.88	$	0.76	$	1.56	$	1.79
Diluted	$	0.86	$	0.74	$	1.53	$	1.74

~~(a)~~

~~Because the restricted stock unit (“RSU”~~The ownership interests of holders (other than PJT Partners Inc.) ~~participating securities do not have a mandatory redemption amount and the holders~~ of the ~~participating securities are not obligated to fund losses, neither the vested RSUs nor the unvested RSUs are subject to any contractual obligation to share in losses of the Company.~~

~~(b)~~

~~These securities were determined to be anti-dilutive for these periods and therefore excluded from the calculation of net income (loss) per share of Class A~~ common ~~stock.~~

~~Common~~ units of partnership interest in PJT Partners Holdings LP (“Partnership Units”) may be exchanged for PJT Partners Inc. Class A common stock on a one-for-one basis, subject to applicable vesting and transfer restrictions. If all Partnership Units were exchanged for Class A common stock, weighted-average Class A common stock outstanding would be ~~33,653,384~~39,869,008 and ~~33,930,510~~39,932,925 for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2023, respectively, excluding unvested ~~RSUs and participating RSUs.~~restricted stock units (“RSUs”). In computing the dilutive effect, if any, which the aforementioned exchange would have on net income ~~(loss)~~ per share, net income ~~(loss)~~ attributable to holders of

~~PJT Partners Inc.~~

~~Notes to Condensed Consolidated Financial Statements – Continued (Unaudited)~~

~~(All Dollars Are in Thousands, Except Share and Per Share Data, Except Where Noted)~~

Class A common stock would be adjusted due to the elimination of the non-controlling interests associated with the Partnership Units (including any tax impact). For the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023, there were 14,630,864 and ~~2016, such exchange is not reflected in diluted net income (loss) per share as the assumed exchange is~~14,697,942 weighted-average Partnership Units, respectively, that were anti-dilutive.

~~The following table summarizes the anti-dilutive securities for~~ For the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022, there were 15,131,311 and ~~2016,~~15,163,801 weighted-average Partnership Units, respectively, ~~which have been excluded from the calculation of net income (loss) per share of Class A common stock:~~that were anti-dilutive.

Three Months Ended September 30,

Nine Months Ended September 30,

2017

2016

2017

2016

Weighted-Average Unvested RSUs

(a)

2,202,324

(a)

1,821,987

Weighted-Average Participating RSUs

405,472

706,257

479,957

749,963

Weighted-Average Partnership Units

14,735,203

16,191,980

15,088,535

16,125,184

~~(a)~~

~~These securities were determined to be dilutive for these periods.~~

Share Repurchase Program

~~On October 26, 2017,~~During the ~~Company’s Board of Directors authorized~~six months ended June 30, 2023, the ~~repurchase of up to $100~~Company repurchased 1.4 million ~~of shares of the Company’s Class A common stock. Under this repurchase program,~~ shares of the Company’s Class A common stock ~~may be repurchased from time~~at an average price per share of $71.87, or $104.0 million in aggregate, pursuant to ~~time in open market transactions, in privately negotiated transactions or otherwise. The timing and~~ the ~~actual number~~share repurchase program. As of shares repurchased will depend on a variety of factors, including legal requirements, price and economic and market conditions. The repurchase program may be suspended or discontinued at any time and does not have a specified expiration date.

9.	~~EQUITY-BASED COMPENSATION~~

~~Overview~~

Further information regarding equity-based compensation awards granted in connection with the spin-off is described in Note 10. “Equity-Based Compensation” in the “Notes to Consolidated and Combined Financial Statements” in “Part II. Item 8. Financial Statements and Supplementary Data” inJune 30, 2023, the Company’s ~~Annual Report on Form 10-K for the year ended December 31, 2016.~~remaining repurchase authorization was $69.7 million.

10.

EQUITY-BASED AND OTHER DEFERRED COMPENSATION

Overview

On ~~October 1, 2015,~~May 24, 2023, the Company adopted the Second Amended and Restated PJT Partners Inc. ~~2015~~ Omnibus ~~Incentive~~ Plan (the “PJT Equity Plan”), which amended the Amended and Restated 2019 PJT Partners Inc. Omnibus Plan. The PJT Equity Plan authorizes an additional 16 million shares of Class A common stock for the purpose of providing incentive compensation measured by reference to the value of the Company’s Class A common stock or Partnership Units. The PJT Equity Plan provides for the granting of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, partnership interests and other stock-based or cash-based awards. ~~The~~Since October 1, 2015, the Company has ~~initially~~ authorized ~~12.2~~33 million shares of Class A common stock for issuance of new awards under the PJT Equity Plan. The Company intends to use PJT Partners’ Class A common stock to satisfy vested awards under the PJT Equity Plan.

~~The following table represents equity-based compensation expense and related income tax benefit for the three and nine months ended September 30, 2017 and 2016, respectively:~~

Three Months Ended September 30,

Nine Months Ended September 30,

2017

2016

2017

2016

Equity-Based Compensation Expense

$
27,689

$
22,897

$
88,379

$
65,082

Income Tax Benefit

$
3,600

$
2,745

$
11,910

$
7,835

1314

PJT Partners Inc.

Notes to Condensed Consolidated Financial Statements – Continued (Unaudited)

(All Dollars Are in Thousands, Except Share and Per Share Data, Except Where Noted)

The following table represents equity-based compensation expense and the related income tax benefit for the three and six months ended June 30, 2023 and 2022, respectively:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Equity-Based Compensation Expense	$	49,200	$	36,301	$	97,996	$	95,370
Income Tax Benefit	$	6,855	$	4,595	$	13,558	$	12,617

Restricted Stock Units

~~Pursuant~~The following table summarizes activity related to the PJT Equity Plan and in connection with the spin-off, annual compensation process and ongoing hiring process, the Company has issued RSUs, which generally vest over a service life of three to five years. Awards are generally forfeited if the employee ceases to be employed by the Company prior to vesting.

~~A summary of the status of the Company’s~~ unvested RSUs ~~in PJT Partners Inc. and PJT Partners Holdings LP as of September~~for the six months ended June 30, ~~2017 and of changes during the period January 1, 2017 through September 30, 2017 is presented below:~~2023:

	Restricted Stock Units
	PJT Partners Inc.					PJT Partners Holdings LP					Restricted Stock Units
				Weighted-					Weighted-					Weighted-
				Average					Average					Average
				Grant Date		Number of			Grant Date					Grant Date
	Number of			Fair Value		Partnership			Fair Value		Number of			Fair Value
	Units			(in dollars)		Units			(in dollars)		Units			(in dollars)
Balance, December 31, 2016		5,776,114		$	21.71		443,689		$	25.58
Balance, December 31, 2022												4,181,075		$	65.58
Granted		1,459,754			36.74		—			—		2,258,383			77.65
Dividends Reinvested on RSUs												(34,565	)		56.67
Forfeited												(18,587	)		72.18
Vested		(724,330	)		22.88		(199,689	)		18.02		(1,330,508	)		59.98
Forfeited		(56,365	)		22.81		—			—
Dividends Reinvested on Participating RSUs		7,831			33.52		—			—
Balance, September 30, 2017		6,463,004		$	24.98		244,000		$	31.76
Balance, June 30, 2023												5,055,798		$	72.48

As of ~~September~~June 30, ~~2017,~~2023, there was ~~$70.1~~$206.1 million of estimated unrecognized compensation expense related to unvested RSU awards. ~~The Company assumes a forfeiture rate of 1.0% to 14.0% annually based on expected turnover and periodically reassesses this rate.~~ This cost is expected to be recognized over a weighted-average period of ~~0.9~~ 1.9 years.

~~Partnership Units~~

In connection with the spin-off on October 1, 2015, certain individuals were issued Class A common stock of PJT Partners Inc., as well as Partnership Units that, subject to certain terms and conditions, are redeemable at the option of the holder for cash, or, at the Company’s election, for shares of PJT Partners Inc. Class A common stock on a one-for-one basis. These Partnership Units generally vest over a service life of five years.

~~A summary of the status of the Company’s unvested Partnership Units as of September 30, 2017 and of changes during the period January 1, 2017 through September 30, 2017 is presented below:~~

Partnership Units

Weighted-

Average

Number of

Grant Date

Partnership

Fair Value

Units

(in dollars)

Balance, December 31, 2016

5,591,357

$
21.23

Granted

74,894

37.24

Vested

(4,571
)

28.29

Balance, September 30, 2017

5,661,680

$
21.44

~~As of September 30, 2017, there was $61.4 million of estimated unrecognized compensation expense related to unvested Partnership Units.~~ The Company assumes a forfeiture rate of ~~4.0%~~1.0% to 7.0% annually based on expected turnover and periodically reassesses this rate. The weighted-average grant date fair value with respect to RSUs granted for the six months ended June 30, 2022 was $63.73.

RSU Awards with Both Service and Market Conditions

The following table summarizes activity related to unvested RSU awards with both a service and market condition for the six months ended June 30, 2023:


	RSU Awards with Both Service and Market Conditions
			Weighted-
			Average
			Grant Date
	Number of		Fair Value
	Units		(in dollars)
Balance, December 31, 2022		1,534,012	$	41.98
Dividends Reinvested on RSUs		161		34.22
Balance, June 30, 2023		1,534,173	$	41.98

As of June 30, 2023, there was $27.0 million of estimated unrecognized compensation expense related to RSU awards with both a service and market condition. This cost is expected to be recognized over a weighted-average period of ~~1.4~~ 1.8 years. The Company assumes a forfeiture rate of 4.0% to 7.0% annually based on expected turnover and periodically reassesses this rate. The weighted-average grant date fair value with respect to RSUs with both a service and market condition granted for the six months ended June 30, 2022 was $41.97.

1415

PJT Partners Inc.

Notes to Condensed Consolidated Financial Statements – Continued (Unaudited)

(All Dollars Are in Thousands, Except Share and Per Share Data, Except Where Noted)

~~Equity-Based Awards with Both Service and Market Conditions~~Partnership Units

The following table summarizes activity related to unvested Partnership Units for the six months ended June 30, 2023:

In connection with the spin-off, the Company also granted equity-based awards containing both service and market conditions. The effect of the market condition is reflected in the grant date fair value of the award. Compensation cost is recognized over the requisite service period, provided that the service period is completed, irrespective of whether the market condition is satisfied. The service condition requirement with respect to such equity-based awards is five years with 20% vesting in the third year, 30% in the fourth year and 50% in the fifth year. The market condition requirement will be satisfied upon the publicly traded shares of Class A common stock achieving certain volume-weighted average share price targets over any consecutive 30-day trading period following the consummation of the spin-off, pro ratably at $48, $55, $63, $71 and $79 per share of Class A common stock.

The market condition requirements must be met prior to the sixth anniversary of the consummation of the spin-off. No portion of these awards will become vested until both the service and market conditions have been satisfied.

A summary of the status of the Company’s unvested equity-based awards in PJT Partners Holdings LP with both a service and market condition as of September 30, 2017 and of changes during the period January 1, 2017 through September 30, 2017 is presented below:

Equity-Based Awards with
Both Service and Market
Conditions

Weighted-

Average

Number of

Grant Date

Partnership

Fair Value

Units

(in dollars)

Balance, December 31, 2016

6,503,464

$
5.72

Forfeited

(50,633
)

5.72

Balance, September 30, 2017

6,452,831

$
5.72


	Partnership Units
				Weighted-
				Average
	Number of			Grant Date
	Partnership			Fair Value
	Units			(in dollars)
Balance, December 31, 2022		178,067		$	60.62
Granted		36,726			74.57
Vested		(74,885	)		54.19
Balance, June 30, 2023		139,908		$	67.73

As of ~~September~~June 30, ~~2017,~~2023, there was ~~$16.9~~$6.9 million of estimated unrecognized compensation expense related to ~~equity-based awards with both a service and market condition. The Company assumes a forfeiture rate of 4.0% annually based on expected turnover and periodically reassesses this rate.~~unvested Partnership Units. This cost is expected to be recognized over a weighted-average period of ~~1.7~~1.2 years. The Company assumes a forfeiture rate of 4.0% annually based on expected turnover and periodically reassesses this rate. The weighted-average grant date fair value with respect to Partnership Units granted for the six months ended June 30, 2022 was $59.84.

Partnership Unit Awards with Both Service and Market Conditions

The following table summarizes activity related to unvested Partnership Unit awards with both a service and market condition for the six months ended June 30, 2023:


	Partnership Unit Awards with Both Service and Market Conditions
			Weighted-
			Average
	Number of		Grant Date
	Partnership		Fair Value
	Units		(in dollars)
Balance, December 31, 2022		1,107,768	$	39.10
Balance, June 30, 2023		1,107,768	$	39.10

As of June 30, 2023, there was $19.5 million of estimated unrecognized compensation expense related to Partnership Unit awards with both a service and market condition. This cost is expected to be recognized over a weighted-average period of 1.9 years. The Company assumes a forfeiture rate of 4.0% annually based on expected turnover and periodically reassesses this rate. The weighted-average grant date fair value with respect to Partnership Units with both a service and market condition granted for the six months ended June 30, 2022 was $39.10.

Units Expected to Vest

The following unvested units, after expected forfeitures, as of ~~September~~June 30, ~~2017,~~2023, are expected to vest:


			Weighted- Average
			Service Period
	Units		in Years
Restricted Stock Units		6,186,330		1.8
Partnership Units		1,197,052		1.8
Total Equity-Based Awards		7,383,382		1.8

PJT Partners Inc.

Notes to Condensed Consolidated Financial Statements – Continued (Unaudited)

(All Dollars Are in Thousands, Except Share and Per Share Data, Except Where Noted)

Deferred Cash Compensation

The Company has periodically issued deferred cash compensation in connection with annual incentive compensation as well as other hiring or retention related awards. These awards typically vest over a period of one to four years. Compensation expense related to deferred cash awards was $8.7 million and $19.0 million for the three and six months ended June 30, 2023, respectively, and $7.6 million and $14.6 million for the three and six months ended June 30, 2022, respectively. As of June 30, 2023, there was $76.3 million of unrecognized compensation expense related to these awards. The weighted-average period over which this compensation cost is expected to be recognized is 2.4 years.

11.

LEASES

The components of lease expense were as follows:


	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Operating Lease Cost	$	7,344		$	6,868		$	14,698		$	13,592
Variable Lease Cost		1,084			1,083			2,233			2,087
Sublease Income		(194	)		(196	)		(389	)		(406	)
Total Lease Cost	$	8,234		$	7,755		$	16,542		$	15,273

Supplemental information related to the Company’s operating leases was as follows:


	Six Months Ended June 30,
	2023		2022
Cash Paid for Amounts Included in Measurement of Lease Liabilities
Operating Cash Flows from Operating Leases	$	12,949	$	11,268
Right-of-Use Assets Obtained in Exchange for Operating Lease Liabilities	$	1,836	$	2,804


	June 30, 2023			December 31, 2022
Weighted-Average Remaining Lease Term (in years)		6.6			6.8
Weighted-Average Discount Rate		4.8	%		4.6	%

The following is a maturity analysis of the annual undiscounted cash flows of the Company’s operating lease liabilities as of June 30, 2023:

Weighted-Average

Service Period

Units

in Years

Partnership Units

11,723,249

1.5

Restricted Stock Units

6,538,228

0.9

Total Equity-Based Awards

18,261,477

1.3


Year Ending December 31,	Operating
2023 (July 1 through December 31)	$	16,300
2024		29,327
2025		25,040
2026		20,506
2027		12,185
Thereafter		44,044
Total Lease Payments		147,402
Less: Imputed Interest		21,192
Total	$	126,210

PJT Partners Inc.

Notes to Condensed Consolidated Financial Statements – Continued (Unaudited)

(All Dollars Are in Thousands, Except Share and Per Share Data, Except Where Noted)

~~10.~~

~~TRANSACTIONS WITH RELATED PARTIES~~

12.

TRANSACTIONS WITH RELATED PARTIES

Exchange Agreement

The Company has entered into an exchange agreement with the limited partners of PJT Partners Holdings LP pursuant to which they (or certain permitted transferees) have the right, subject to the terms and conditions set forth in the limited partnership agreement of PJT Partners Holdings LP, on a quarterly basis, ~~from and after the first anniversary of the date of the consummation of the spin-off (subject~~ to ~~the terms of the exchange agreement), to~~

~~PJT Partners Inc.~~

~~Notes to Condensed Consolidated Financial Statements – Continued (Unaudited)~~

~~(All Dollars Are in Thousands, Except Share and Per Share Data, Except Where Noted)~~

exchange all or part of their Partnership Units for cash or, at the Company’s election, for shares of PJT Partners Inc. Class A common stock on a ~~one-for-one~~one-for-one basis, subject to customary conversion rate adjustments for splits, unit distributions and reclassifications. ~~Pursuant~~Further, pursuant to the terms in the partnership agreement of PJT Partners Holdings LP, the Company may also require holders of Partnership Units who are not Service Providers (as defined in the partnership agreement of PJT Partners Holdings LP) to exchange such Partnership Units.

Further information regarding the exchange agreement is described in Note 13. “Transactions with Related Parties—Exchange Agreement” in the “Notes to Consolidated Financial Statements” in “Part II. Item 8. Financial Statements and Supplementary Data” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

Certain holders of Partnership Units exchanged 0.3 million and 0.2 million Partnership Units, respectively, for cash in the amounts of $19.4 million and $11.0 million, respectively, for the six months ended June 30, 2023 and 2022, respectively. Such amounts are recorded as a reduction of Non-Controlling Interests in the Condensed Consolidated Statements of Financial Condition.

The Company intends to exchange 2 thousand Partnership Units for cash on August 1, 2023 for an aggregate payment of $0.2 million. The price per Partnership Unit to be received in a cash-settled exchange will be equal to the fair value of a share of PJT Partners Inc. Class A common stock (determined in accordance with and subject to adjustment under the exchange agreement). In the event cash-settled exchanges of Partnership Units are funded with new issuances of Class A common stock, the fair value of a share of PJT Partners Inc. Class A common stock will be deemed to be equal to the net proceeds per share of Class A common stock received by PJT Partners Inc. in the related issuance. Accordingly, in this event, the price per Partnership Unit to which an exchanging Partnership Unitholder will be entitled may be greater than or less than the then-current market value of PJT Partners Inc. Class A common stock. The exchange agreement also provides that a holder of Partnership Units will not have the right to exchange Partnership Units in the event that PJT Partners Inc. determines that such exchange would be prohibited by law, or would result in any breach of any debt agreement or other material contract of PJT Partners Inc. or PJT Partners Holdings LP.

~~Certain Partnership Unitholders exchanged 1,068,377 Partnership Units for cash in the amount of $39.4 million during the nine months ended September 30, 2017.~~

During the third quarter of 2017, the Company was presented with 155,335 Partnership Units to be exchanged. The Company elected to settle the exchange of these Partnership Units on November 7, 2017 for an aggregate payment of $6.1 million with cash from the Company’s working capital. The price per Partnership Unit paid by the ~~Company was $39.58,~~company is $79.21, which is equal to the volume-weighted average price ~~of a~~per share of the Company’s Class A common stock on ~~November 2, 2017.~~July 27, 2023.

Registration Rights Agreement

The Company has entered into a registration rights agreement with the limited partners of PJT Partners Holdings LP pursuant to which the Company granted them, their affiliates and certain of their transferees the right, under certain circumstances and subject to certain restrictions, to require the Company to register under the Securities Act of 1933 shares of Class A common stock delivered in exchange for Partnership Units. The registration rights agreement does not contain any penalties associated with failure to file or to maintain the effectiveness of a registration statement covering the shares owned by individuals covered by such agreement.

Tax Receivable Agreement

The Company has entered into a tax receivable agreement with the holders of Partnership Units (other than PJT Partners Inc.) that provides for the payment by PJT Partners Inc. to exchanging holders of Partnership Units of 85% of the benefits, if any, that PJT Partners Inc. is deemed to realize as a result of the increases in tax basis related to such exchanges of Partnership Units and of certain other tax benefits related to entering into the tax receivable agreement, including tax benefits attributable to payments under the tax receivable agreement. As of June 30, 2023 and December 31, 2022, the Company had amounts due of $32.2 million and $30.3 million, respectively, pursuant to the tax receivable agreement, which represent management’s best estimate of the amounts currently expected to be owed in connection with the tax receivable agreement. Actual payments may differ significantly from estimated amounts due.

PJT Partners Inc.

Notes to Condensed Consolidated Financial Statements – Continued (Unaudited)

(All Dollars Are in Thousands, Except Share and Per Share Data, Except Where Noted)

Sublease

The Company has entered into a Sublease Agreement (the “Sublease”) with Dynasty Equity Partners Management, LLC (“Dynasty”) to sublease a portion of its office space to Dynasty. K. Don Cornwell, a member of the Board of Directors (the “Board”) as of January 2023, is the CEO and co-founder of Dynasty. The sublease commenced on October 1, 2022 with an initial term of two years. The rent, terms and conditions of the Sublease were consistent with those similar subleases in the market as of the time the Sublease was entered, and the Company recognized $0.2 million and $0.4 million of sublease income for the three and six months ended June 30, 2023, respectively. Such amounts are recorded in Interest Income and Other in the Condensed Consolidated Statements of Operations.

Aircraft Lease

The Company makes available to its partners and, on occasion, their family members personal use of a company leased aircraft when it is not being used for business purposes, for which the partners pay the full incremental costs associated with such use. Such amount is not material to the condensed consolidated financial statements.

13.

COMMITMENTS AND CONTINGENCIES

Commitments

Line of Credit

On February 1, 2021, PJT Partners Holdings LP, as borrower (the “Borrower”), entered into a Renewal and Modification Agreement (the “Renewal Agreement”) and related documents with First Republic Bank, as lender (the “Lender”), amending the terms of the Borrower’s revolving credit facility with the Lender under the Amended and Restated Loan Agreement dated October 1, 2018 (the “Amended and Restated Loan Agreement”). The Renewal Agreement provides for a revolving credit facility with aggregate commitments in an amount equal to $60.0 million, which aggregate commitments may be increased, pursuant to the terms and conditions set forth in the Renewal Agreement, to up to $80.0 million during the period beginning December 1 each year through March 1 of the following year. The revolving credit facility will mature and the commitments thereunder will terminate on the maturity date, subject to extension by agreement of the Borrower and Lender. On February 7, 2023, the Renewal Agreement was further amended with the same terms to extend the maturity date to October 1, 2024.

As of June 30, 2023 and December 31, 2022, there were no borrowings outstanding under the revolving credit facility.

As of June 30, 2023 and December 31, 2022, the Company was in compliance with the debt covenants under the Renewal Agreement and the Amended and Restated Loan Agreement.

Contingencies

Litigation

From time to time, the Company may be named as a defendant in legal actions relating to transactions conducted in the ordinary course of business. Some of these matters may involve claims of substantial amounts. Although there can be no assurance of the outcome of such legal actions, in the opinion of management, after consultation with external counsel, the Company believes it is not probable and/or reasonably possible that any current legal proceedings or claims would individually or in the aggregate have a material adverse effect on the condensed consolidated financial statements of the Company. The Company is not currently able to estimate the possible loss or range of loss until developments in such matters have provided sufficient information to support such an assessment, including quantification of a damage demand from plaintiffs, discovery from other parties and investigation of factual allegations, rulings by courts on motions or appeals, analysis by experts or the status of any settlement negotiations.

PJT Partners Inc.

Notes to Condensed Consolidated Financial Statements – Continued (Unaudited)

(All Dollars Are in Thousands, Except Share and Per Share Data, Except Where Noted)

Guarantee

The Company provides a guarantee to a lending institution for certain loans held by employees for investment in funds of its former Parent, which are secured by the underlying investments in those funds. The amount guaranteed was $2.6 million and $3.3 million as of June 30, 2023 and December 31, 2022, respectively. In connection with this guarantee, the Company currently expects any associated risk of loss to be insignificant.

Indemnifications

The Company has entered and may continue to enter into contracts that contain a variety of indemnification obligations. The Company’s maximum exposure under these arrangements is not known; however, the Company currently expects any associated risk of loss to be insignificant. In connection with these matters, the Company has incurred and may continue to incur legal expenses, which are expensed as incurred.

Transactions and Agreements with Blackstone

Employee Matters Agreement

The Company is required to reimburse Blackstone for the value of forfeited unvested equity awards granted to former Blackstone employees that transitioned to PJT Partners in connection with the spin-off. Such reimbursement is recorded in Accounts Payable, Accrued Expenses and Other Liabilities with an offset to Equity in the Condensed Consolidated Statements of Financial Condition. The accrual for these forfeitures was $0.9 million as of June 30, 2023 and December 31, 2022.

Pursuant to the Employee Matters Agreement, the Company has agreed to pay Blackstone the net realized cash benefit resulting from certain compensation-related tax deductions. Amounts are payable annually (for periods in which a cash benefit is realized) within nine months of the end of the relevant tax period. As of June 30, 2023 and December 31, 2022, the Company had accrued $1.2 million and $3.4 million, respectively, which the Company anticipates will be payable to Blackstone after the Company files its respective tax returns. The tax deduction and corresponding payable to Blackstone related to such deliveries will fluctuate primarily based on the price of Blackstone common stock at the time of delivery.

14.

REGULATED ENTITIES

Certain subsidiaries of the Company are subject to various regulatory requirements in the U.S., United Kingdom, Hong Kong and Spain, which specify, among other requirements, minimum net capital requirements for registered broker-dealers.

PJT Partners LP is a registered broker-dealer through which advisory and placement services are conducted in the U.S. and is subject to the net capital requirements of Rule 15c3-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). PJT Partners LP had net capital of $118.6 million and $125.9 million as of June 30, 2023 and December 31, 2022, respectively, which exceeded the minimum net capital requirement by $116.6 million and $124.1 million, respectively. PJT Partners LP does not carry customer accounts and does not otherwise hold funds or securities for, or owe money or securities to, customers and, accordingly, has no obligations under the SEC Customer Protection Rule (Rule 15c3-3).

As of June 30, 2023 and December 31, 2022, PJT Partners (UK) Limited, PJT Partners (HK) Limited and PJT Partners Park Hill (Spain) A.V., S.A.U. were in compliance with local capital adequacy requirements.

PJT Partners Inc.

Notes to Condensed Consolidated Financial Statements – Continued (Unaudited)

(All Dollars Are in Thousands, Except Share and Per Share Data, Except Where Noted)

15.

BUSINESS INFORMATION

The Company’s activities providing advisory and placement services constitute a single reportable segment. An operating segment is a component of an entity that conducts business and incurs revenues and expenses for which discrete financial information is available that is reviewed by the chief operating decision maker in assessing performance and making resource allocation decisions. The Company has a single operating segment and therefore a single reportable segment.

The Company is organized as one operating segment in order to maximize the value of advice to clients by drawing upon the diversified expertise and broad relationships of senior professionals across the Company. The chief operating decision maker assesses performance and allocates resources based on broad considerations, including the market opportunity, available expertise across the Company and the strength and efficacy of professionals’ collaboration, and not based upon profit or loss measures for the Company’s separate product lines.

Since the financial markets are global in nature, the Company generally manages its business based on the operating results of the Company taken as a whole, not by geographic region. The following tables set forth the geographical distribution of revenues and assets based on the location of the office that generates the revenues or holds the assets and therefore may not be reflective of the geography in which the Company’s clients are located.


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Revenues
Domestic	$	279,628	$	203,450	$	446,443	$	420,429
International		66,649		29,691		99,822		59,031
Total	$	346,277	$	233,141	$	546,265	$	479,460


	June 30, 2023		December 31, 2022
Assets
Domestic	$	907,557	$	921,274
International		179,545		129,378
Total	$	1,087,102	$	1,050,652

16.

SUBSEQUENT EVENTS

The Board has declared a quarterly dividend of $0.25 per share of Class A common stock, which will be paid on September 20, 2023 to Class A common stockholders of record as of September 6, 2023.

The Company has evaluated the impact of subsequent events through the date these financial statements were issued, and determined there were no subsequent events requiring adjustment or further disclosure to the financial statements besides those described in Note 12. “Transactions with Related Parties—Exchange Agreement.”

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with PJT Partners Inc.’s Condensed Consolidated Financial Statements and the related notes included in this Quarterly Report on Form 10-Q.

Our Business

PJT Partners is a premier, global, advisory-focused investment bank that was built from the ground up to be different. Our highly experienced, collaborative teams provide independent advice coupled with old-world, high-touch client service. This ethos has allowed us to attract some of the very best talent in the markets in which we operate. We deliver leading advice to many of the world's most consequential companies, effect some of the most transformative transactions and restructurings and raise billions of dollars of capital around the globe to support startups and more established companies.

We have world-class franchises in each of the areas in which we compete:

Strategic Advisory

Our team of leading professionals delivers strategic advice and innovative solutions to various opportunities and often highly complex challenges. We advise clients on transactions including mergers and acquisitions (“M&A”), spin-offs, activism defense, contested M&A, joint ventures, minority investments and divestitures. Additionally, we advise private and public company boards and management teams on strategies for building productive investor relationships with a focus on shareholder engagement; complex investor matters; environmental, social and governance transition solutions; and other critical strategic, governance and shareholder matters. Our capital markets advisory team advises and executes public and private capital raises in the debt and equity capital markets, including debt financings, acquisition financings, structured product offerings, public equity raises including IPO and SPAC offerings, private capital raises for early and later stage companies as well as other capital structure related matters. Our geopolitical and policy advisory practice assists boards and managements team navigate changing geopolitical relationships against the backdrop of evolving political landscapes.

Restructuring and Special Situations

Our Restructuring and Special Situations business is one of the world’s leading advisors in financial debt restructurings, liability management, distressed M&A and Chapter 11 matters, around the globe. We have been named IFR Restructuring Advisor of the Year for three years running beginning in 2020 and are consistently ranked among the top three financial advisors in announced global restructuring volume. With expertise in highly complex capital structure challenges, we advise management teams, corporate boards, sponsors and creditors in situations where a company is experiencing financial distress.

PJT Park Hill

PJT Park Hill, our leading global alternative asset advisory and fundraising business, provides private fund advisory and fundraising services for a diverse range of investment strategies. Moreover, PJT Park Hill is the only group among its peers with top-tier dedicated private equity, hedge fund, private credit, real estate, directs and private capital solutions groups. PJT Park Hill’s Private Capital Solutions business is a leading advisor to GPs and LPs on liquidity and other structured solutions.

Business Environment

Economic and global financial conditions can materially affect our operational and financial performance. See “Part I. Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022 for a discussion of some of the factors that can affect our performance.

M&A is a cyclical business that is impacted by macroeconomic conditions. There are several factors weighing on global M&A activity in the intermediate-term, including monetary policy, greater economic and geopolitical uncertainty and slowing global growth. Worldwide M&A announced volumes during the first half of 2023 were down 37% compared with the first half of 20221 as these factors adversely impacted the strength of strategic activity. While the pace of activity has changed, we expect corporate boards and management teams to continue to use M&A as a strategic tool.

Global restructuring activity remained elevated during the second quarter of 2023 as adverse macroeconomic conditions and higher interest rates continued to challenge companies with levered balance sheets. In the first half of 2023, out-of-court liability management transactions, primarily driven by financial sponsor activity, continued to drive an increase in restructuring mandates. Restructuring activity remains dispersed across a broad range of sectors, including healthcare, consumer-driven businesses and industrials, geographies, and across a mix of financial debt restructuring, liability management and in-court Chapter 11 matters.

Given the global macroeconomic environment and supply of alternative investment opportunities in the market seeking capital, the fundraising environment remains challenging as limited partners have become more discerning in their deployment of capital for both existing and new fund manager relationships. Investors continue to focus on existing relationships and, as a result, the bar for fund managers to attract new investors remains high as a flight to quality persists. As it relates to secondary and other private capital solutions activity, market volatility has increased resulting from rising inflation, supply chain disruption and geopolitical events. As a result, market sentiment has shifted away from highly concentrated portfolio structures in favor of diversification.

___________________________________________________________________________________________________________________________________________

1Source: Refinitiv Global Mergers & Acquisitions Review First Half of 2023 as of June 30, 2023.

Key Financial Measures

Revenues

Substantially all of our revenues are derived from contracts with clients to provide advisory and placement services. This revenue is primarily a function of the number of active engagements we have, the size of each of those engagements and the fees we charge for our services.

We provide a range of strategic advisory, capital markets advisory, restructuring and special situations and shareholder advisory services to corporations, financial sponsors, institutional investors and governments around the world. In conjunction with providing restructuring advice, we may also assist with raising various forms of financing, including debt and equity. Our private capital solutions services include providing GP solutions and investing solutions to clients seeking portfolio liquidity, unfunded commitment relief and investments in secondary markets. Our fund placement services primarily serve alternative investment strategies, including private equity, real estate, hedge funds and private credit. We advise on all aspects of the fundraising process including competitive positioning and market assessment, marketing materials and related documentation including partnership terms and conditions most prevalent in the current environment. We also provide public and private placement fundraising services to our corporate clients and recognize placement and underwriting fees based on the successful completion of the transaction.

The amount and timing of the fees paid vary by the type of engagement and are typically based on retainers, completion of a transaction or a capital raise. Fees earned for services provided to alternative asset managers are typically recognized upon acceptance by a fund of capital or capital commitments (referred to as a “closing”), in accordance with terms set forth in individual agreements. For commitment based fees, revenue is recognized over time as commitments are accepted. Fees for such closed-end fund arrangements are generally paid in installments over three or four years and interest is charged to the outstanding balance at an agreed upon rate, such as the Secured Overnight Financing Rate or an alternate reference rate, plus a market-based margin. For funds with multiple closings, the constraint on variable consideration is lifted upon each closing. For open-end fund structures, placement fees are typically calculated as a percentage of a placed investor’s month-end net asset value. Typically, we earn fees for such open-end fund structures over a four year period. For these arrangements, revenue is recognized over time as the constraint over variable consideration is lifted. We may receive non-refundable up-front

fees in our contracts with customers, which are recorded as revenues in the period over which services are estimated to be provided.

A transaction can fail to be completed for many reasons, including global and/or regional economic conditions, failure of parties to agree upon final terms, to secure necessary board or shareholder approvals, to secure necessary financing or to achieve necessary regulatory approvals. In the case of bankruptcy engagements, fees are subject to approval of the court.

Interest Income and Other – Interest Income and Other represents interest typically earned on Cash and Cash Equivalents, investments in Treasury securities and outstanding placement fees receivable; foreign exchange gains and losses arising from transactions denominated in currencies other than U.S. dollars; sublease income; and the amount of expense reimbursement invoiced to clients related to out-of-pocket expenses. Interest on placement fees receivable is earned from the time revenue is recognized and is calculated as mutually agreed upon with the receivable counterparty. Interest receivable is included in Accounts Receivable, Net in the Condensed Consolidated Statements of Financial Condition.

Expenses

Compensation and Benefits – Compensation and Benefits expense includes salaries, restricted and unrestricted cash awards, benefits, employer taxes and equity-based compensation associated with the grants of equity-based awards to partners and employees. Changes in this expense are driven by fluctuations in the number of employees, composition of our workforce, business performance, compensation adjustments in relation to market movements, changes in rates for employer taxes and other cost increases affecting benefit plans. The expense associated with our bonus and equity plans can also have a significant impact on this expense category and may vary from year to year.

We maintain compensation programs, including salaries, annual incentive compensation (that may include components of cash, restricted cash and/or equity-based awards) and benefits programs. We manage compensation to estimates of competitive levels based on market conditions and performance. Our level of compensation reflects our plan to maintain competitive compensation levels to retain key personnel and it reflects the impact of newly-hired senior professionals, including related grants of equity awards that are generally valued at their grant date fair value.

Increasing the number of high-caliber, experienced senior level employees is critical to our growth efforts. These hires generally do not begin to generate significant revenue in the year they are hired.

Non-Compensation Expense – Non-Compensation expenses are the other costs typical to operating our business, which generally consist of Occupancy and Related, Travel and Related, Professional Fees, Communications and Information Services, Depreciation and Amortization and Other Expenses. Further information regarding these expenses can be found in “Part II. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2022.

Income Taxes – PJT Partners Inc. is a corporation subject to U.S. federal, state and local income taxes in jurisdictions where it does business. Our businesses generally operate as partnerships for U.S. federal and state purposes and as corporate entities in non-U.S. jurisdictions. In the U.S. federal and state jurisdictions, taxes related to income earned by these entities generally represent obligations of the individual members and partners.

The operating entities have generally been subject to New York City Unincorporated Business Tax and to entity-level income taxes imposed by state and local as well as non-U.S. jurisdictions, as applicable. These taxes have been reflected in our condensed consolidated financial statements.

PJT Partners Inc. is subject to U.S. corporate federal, state and local income tax on its allocable share of results of operations from the operating partnership (PJT Partners Holdings LP).

Non-Controlling Interests

PJT Partners Inc. is a holding company and its only material asset is its controlling equity interest in PJT Partners Holdings LP, and certain cash and cash equivalents it may hold from time to time. As the sole general partner of PJT Partners Holdings LP, PJT Partners Inc. operates and controls all of the business and affairs and consolidates the financial results of PJT Partners Holdings LP and its operating subsidiaries. The portion of net income attributable to the non-controlling interests is presented separately in the Condensed Consolidated Statements of Operations.

Condensed Consolidated Results of Operations

The following table sets forth our condensed consolidated results of operations for the three and six months ended June 30, 2023 and 2022:


	Three Months Ended June 30,								Six Months Ended June 30,
	2023		2022			Change			2023		2022		Change
	(Dollars in Thousands)
Revenues
Advisory Fees	$	323,794	$	186,649			73	%	$	491,884	$	368,307		34	%
Placement Fees		20,028		49,482			(60	)%		47,613		109,833		(57	)%
Interest Income and Other		2,455		(2,990	)	N/M				6,768		1,320		413	%
Total Revenues		346,277		233,141			49	%		546,265		479,460		14	%
Expenses
Compensation and Benefits		246,614		150,587			64	%		379,657		309,819		23	%
Occupancy and Related		9,920		8,658			15	%		19,931		17,600		13	%
Travel and Related(1)		8,314		7,977			4	%		15,286		13,030		17	%
Professional Fees		11,454		7,226			59	%		18,381		14,277		29	%
Communications and Information Services		3,761		4,241			(11	)%		7,838		8,664		(10	)%
Depreciation and Amortization		3,597		4,094			(12	)%		7,040		8,401		(16	)%
Other Expenses(1)		8,448		6,670			27	%		14,770		13,833		7	%
Total Expenses		292,108		189,453			54	%		462,903		385,624		20	%
Income Before Provision for Taxes		54,169		43,688			24	%		83,362		93,836		(11	)%
Provision for Taxes		13,117		8,495			54	%		14,324		14,175		1	%
Net Income		41,052		35,193			17	%		69,038		79,661		(13	)%
Net Income Attributable to Non-Controlling Interests		18,911		16,025			18	%		29,561		34,789		(15	)%
Net Income Attributable to PJT Partners Inc.	$	22,141	$	19,168			16	%	$	39,477	$	44,872		(12	)%

__________________
N/M Not meaningful.

(1) Certain balances on the Condensed Consolidated Statements of Operations in the prior period have been reclassified to conform to their current presentation. For the three and six months ended June 30, 2022, this resulted in a reclassification of $1.3 million and $1.9 million, respectively, from Other Expenses to Travel and Related. This reclassification had no impact on net income or stockholders’ equity.

Revenues

The following table provides revenue statistics for the three and six months ended June 30, 2023 and 2022:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Total Number of Clients		226		234		282		293
Total Number of Fees of at least $1 Million from Client Transactions		52		41		104		89

Total Revenues were $346.3 million for the three months ended June 30, 2023, an increase of $113.1 million compared with $233.1 million for the three months ended June 30, 2022. Advisory Fees were $323.8 million for the three months ended June 30, 2023, an increase of $137.1 million compared with $186.6 million for the three months ended June 30, 2022. The increase in Advisory Fees was principally due to an increase in restructuring revenues. Placement Fees were $20.0 million for the three months ended June 30, 2023, a decrease of $29.5 million compared with $49.5 million for the three months ended June 30, 2022. The decrease in Placement Fees was principally due to a decrease in fund placement revenues. Interest Income and Other revenues were $2.5 million, an increase from a loss of $3.0 million in the prior year. Last year's results reflected the reduction in fair market value of certain equity securities received as part of transaction compensation.

Total Revenues were $546.3 million for the six months ended June 30, 2023, an increase of $66.8 million compared with $479.5 million for the six months ended June 30, 2022. Advisory Fees were $491.9 million for the six months ended June 30, 2023, an increase of $123.6 million compared with $368.3 million for the six months ended June 30, 2022. The increase in Advisory Fees was principally due to an increase in restructuring revenues. Placement Fees were $47.6 million for the six months ended June 30, 2023, a decrease of $62.2 million compared with $109.8 million for the six months ended June 30, 2022. The decrease in Placement Fees was principally due to a decrease in fund placement revenues. Interest Income and Other revenues were $6.8 million, an increase from $1.3 million in the prior year. Last year's results reflected the reduction in fair market value of certain equity securities received as part of transaction compensation.

Expenses

Expenses were $292.1 million for the three months ended June 30, 2023, an increase of $102.7 million compared with $189.5 million for the three months ended June 30, 2022. The increase in expenses was principally attributable to increases in Compensation and Benefits, Professional Fees, Other Expenses, and Occupancy and Related expenses. The increase in Compensation and Benefits was principally due to a higher six month accrual rate. Professional Fees increased principally due to higher consulting expense relating to the firm's business activities. Other Expenses increased principally due to higher bad debt expense. Occupancy and Related increased principally due to the further expansion of our New York office.

Expenses were $462.9 million for the six months ended June 30, 2023, an increase of $77.3 million compared with $385.6 million for the six months ended June 30, 2022. The increase in expenses was principally attributable to increases in Compensation and Benefits, Professional Fees, Occupancy and Related, and Travel and Related expenses. The increase in Compensation and Benefits was principally due to a higher compensation accrual rate and higher revenues. Professional Fees increased principally due to higher consulting expense relating to the firm's business activities. Occupancy and Related increased principally due to the further expansion of our New York office. Travel and Related increased due to increased levels of business travel.

Provision for Taxes

The Company’s Provision for Taxes for the three months ended June 30, 2023 was $13.1 million, which represents an effective tax rate of 24.2% on pretax income of $54.2 million. The Company’s Provision for Taxes for the three months ended June 30, 2022 was $8.5 million, which represents an effective tax rate of 19.4% on pretax income of $43.7 million.

The Company’s Provision for Taxes for the six months ended June 30, 2023 was $14.3 million, which represents an effective tax rate of 17.2% on pretax income of $83.4 million. The Company’s Provision for Taxes for the six months ended June 30, 2022 was $14.2 million, which represents an effective tax rate of 15.1% on pretax income of $93.8 million.

Non-Controlling Interests

Net Income Attributable to Non-Controlling Interests is derived from the Income Before Provision for Taxes and the percentage allocation of the income between the holders of common units of partnership interest in PJT Partners Holdings LP (“Partnership Units”) and holders of Class A common stock of PJT Partners Inc. after considering any contractual arrangements that govern the allocation of income.

Liquidity and Capital Resources

General

We regularly monitor our liquidity position, including cash and cash equivalents, investments, working capital assets and liabilities, any commitments and other liquidity requirements.

Our assets have been historically comprised of cash and cash equivalents, investments, receivables arising from advisory and placement engagements and operating lease right-of-use assets. Our liabilities generally include accrued compensation and benefits, accounts payable and accrued expenses, taxes payable and operating lease liabilities. We expect to pay a significant amount of incentive compensation toward the end of each year and during the beginning of the next calendar year with respect to the prior year’s results. A portion of annual compensation may be awarded with equity-based compensation and thus requires less cash. We expect levels of cash to decline at the end of the year and during the first quarter of each year after incentive compensation is paid to our employees. We then expect cash to build throughout the remainder of the year.

On February 1, 2021, PJT Partners Holdings LP, as borrower (the “Borrower”), entered into a Renewal and Modification Agreement (the “Renewal Agreement”) and related documents with First Republic Bank, as lender (the “Lender”), amending the terms of the Borrower’s revolving credit facility with the Lender under the Amended and Restated Loan Agreement dated October 1, 2018 (the “Amended and Restated Loan Agreement”). On February 7, 2023, the Renewal Agreement was further amended to extend the maturity date to October 1, 2024. Further information regarding the Renewal Agreement and Amended and Restated Loan Agreement can be found in Note 13. “Commitments and Contingencies—Commitments, Line of Credit” in the “Notes to Condensed Consolidated Financial Statements” in “—Item 1. Financial Statements” of this filing. As of June 30, 2023 and December 31, 2022, we were in compliance with the debt covenants under the Renewal Agreement and Amended and Restated Loan Agreement, respectively. Additionally, as of June 30, 2023 and December 31, 2022, there were no borrowings outstanding under the revolving credit facility.

We evaluate our cash needs on a regular basis. As of June 30, 2023 and December 31, 2022, we had cash, cash equivalents and short-term investments of $225.6 million and $223.5 million, respectively. The vast majority of these balances are either held in institutions labeled by the Financial Stability Board as global systemically important banks, fully insured cash sweep accounts or Treasury securities. Although we maintain multiple banking relationships with both global and regional banks and actively monitor the financial stability of such institutions, a failure at any institution where we maintain a banking relationship could impact our liquidity.

Our liquidity is highly dependent upon cash receipts from clients, which are generally dependent upon the successful completion of transactions as well as the timing of receivable collections. As of June 30, 2023 and December 31, 2022, total accounts receivable, net of allowance for credit losses, were $333.1 million and $317.8 million, respectively. As of June 30, 2023 and December 31, 2022, the allowance for credit losses was $3.0 million and $1.9 million, respectively. Included in Accounts Receivable, Net are long-term receivables of $125.8 million and $133.3 million as of June 30, 2023 and December 31, 2022, respectively, related to placement fees that are generally paid in installments over a period of three to four years.

Sources and Uses of Liquidity

Our primary cash needs are for working capital, paying operating expenses including cash compensation to our employees, exchanging of Partnership Units for cash, repurchasing shares of the Company’s Class A common stock, paying income taxes, making distributions to our shareholders in accordance with our dividend policy, partnership tax distributions, capital expenditures, making payments pursuant to the tax receivable agreement, commitments and strategic investments. We expect to fund these liquidity requirements through cash flows from operations and borrowings under our revolving credit facility. Our ability to fund these needs will depend, in part, on our ability to generate or raise cash in the future which depends on our future financial results, which are subject to general economic, financial, competitive, legislative and regulatory factors.

Additionally, our ability to generate positive cash flow from operations will be impacted by global economic conditions. If our cash flows from operations are significantly reduced, we may need to borrow from our revolving credit facility, incur debt, or issue additional equity. Although we believe that the arrangement we have in place, and our ability to renew that arrangement, will permit us to finance our operations on acceptable terms and conditions for the foreseeable future, our access to, and the availability of, financing on acceptable terms and conditions in the future will be impacted by many factors, including: (a) business performance, (b) our credit ratings or absence of a credit rating, (c) the liquidity of the overall capital markets, (d) the current state of the economy, and (e) stability of our lending institution. We cannot provide any assurance that such financing will be available to us on acceptable terms or that such financing will be available at all. We believe that our future cash from operations and availability under our revolving credit facility, together with our access to funds on hand, will provide adequate resources to fund our liquidity and capital needs.

Regulatory Capital

We actively monitor our regulatory capital base. We are subject to regulatory requirements in the U.S. and certain international jurisdictions to ensure general financial soundness and liquidity. This requires, among other things, that we comply with certain minimum capital requirements, recordkeeping, reporting procedures, 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 14. “Regulated Entities” in the “Notes to Condensed Consolidated Financial Statements” in “—Item 1. Financial Statements” of this filing for further information. The licenses under which we operate are meant to be appropriate to conduct our business. We believe that we provide each of these entities with sufficient capital and liquidity, consistent with their business and regulatory requirements.

Our activities may also be subject to regulation, including regulatory capital requirements, by various other foreign jurisdictions and self-regulatory organizations.

We do not anticipate that compliance with any and all such requirements will materially adversely impact the availability of funds for domestic and parent-level purposes.

Exchange Agreement

Subject to the terms and conditions of the exchange agreement between us and certain of the holders of Partnership Units (other than PJT Partners Inc.), Partnership Units are exchangeable at the option of the holder for cash or, at our election, for shares of our Class A common stock on a one-for-one basis. Depending on our liquidity and capital resources, market conditions, the timing and concentration of exchange requests and other considerations, we may choose to fund exchanges of Partnership Units with available cash, borrowings or new issuances of Class A common stock or to settle exchanges by issuing Class A common stock to the exchanging holder of Partnership Units.

Share Repurchase Program

During the six months ended June 30, 2023, the Company repurchased 1.4 million shares of the Company's Class A common stock at an average price per share of $71.87, or $104.0 million in aggregate, pursuant to the share repurchase program. As of June 30, 2023, the Company’s remaining repurchase authorization was $69.7 million.

Contractual Obligations

For a discussion of our contractual obligations, refer to “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Contractual Obligations” in our Annual Report on Form 10-K for the year ended December 31, 2022. There have not been any material changes to our contractual obligations since December 31, 2022.

Commitments and Contingencies

Litigation

With respect to our litigation matters, including any litigation discussed under the caption “Legal Proceedings” elsewhere in this report, we are not currently able to estimate the possible loss or range of loss until developments in such matters have provided sufficient information to support such an assessment, including quantification of a damage demand from plaintiffs, discovery from other parties and investigation of factual allegations, rulings by courts on motions or appeals, analysis by experts or the status of any settlement negotiations. While the ultimate outcome and the costs associated with litigation are inherently uncertain and difficult to predict, we believe, based on current knowledge and after consultation with counsel, that we are not currently party to any material pending proceedings, individually or in the aggregate, the resolution of which would have a material effect on the Company.

Guarantee

The Company provides a guarantee to a lending institution for certain loans held by employees for investment in funds of its former Parent, which are secured by the underlying investments in those funds. The amount guaranteed was $2.6 million and $3.3 million as of June 30, 2023 and December 31, 2022, respectively. In connection with this guarantee, we currently expect any associated risk of loss to be insignificant.

Indemnifications

We have entered and may continue to enter into contracts that contain a variety of indemnification obligations. Our maximum exposure under these arrangements is not known; however, we currently expect any associated risk of loss to be insignificant. In connection with these matters, we have incurred and may continue to incur legal expenses, which are expensed as incurred.

Tax Receivable Agreement

We have entered into a tax receivable agreement with the holders of Partnership Units (other than PJT Partners Inc.) that provides for the payment by PJT Partners Inc. to exchanging holders of Partnership Units of 85% of the benefits, if any, that PJT Partners Inc. is deemed to realize as a result of the increases in tax basis related to such exchanges of Partnership Units and of certain other tax benefits related to entering into the tax receivable agreement, including tax benefits attributable to payments under the tax receivable agreement. As of ~~September~~June 30, ~~2017~~2023 and December 31, ~~2016,~~2022, the Company had amounts due of ~~$3.8~~$32.2 million and ~~$1.0~~$30.3 million, respectively, pursuant to the tax receivable agreement, which represent management’s best estimate of the amounts currently expected to be owed in connection with the tax receivable agreement. Actual payments may differ significantly from estimated ~~payments.~~amounts due.

~~Aircraft Lease~~

On occasion, certain of the Company’s executive officers, employees and their families may make use of aircraft in which the Company owns a fractional interest (the “Aircraft”). Any such personal use of the Aircraft is charged to the executive officer or employee based on market rates and usage. The amount is not material to the condensed consolidated financial statements.

~~PJT Partners Inc.~~

~~Notes to Condensed Consolidated Financial Statements – Continued (Unaudited)~~

~~(All Dollars Are in Thousands, Except Share and Per Share Data, Except Where Noted)~~

~~11.~~

~~COMMITMENTS AND CONTINGENCIES~~

~~Commitments~~

~~Line of Credit~~

On October 1, 2015, PJT Partners Holdings LP entered into a Loan Agreement (the ��Loan Agreement”) and related documents with First Republic Bank. The Loan Agreement provides for a revolving credit facility with aggregate commitments in an amount equal to $60.0 million, which aggregate commitments may be increased, on the terms and subject to the conditions set forth in the Loan Agreement, to up to $80.0 million during the period beginning December 1 each year through March 1 of the following year. The proceeds of the revolving credit facility are available for working capital and general corporate purposes. Beginning October 30, 2017, drawings under the credit facility bear interest equal to the greater of a per annum rate of (a) 3%, or (b) the prime rate minus 1.0%. Undrawn commitments bear a commitment fee. The Loan Agreement contains customary representations, covenants and events of default. Financial covenants consist of a minimum consolidated tangible net worth, maximum leverage ratio, minimum consolidated liquidity ratio and limitation on additional indebtedness, each tested quarterly.

On October 30, 2017, PJT Partners Holdings LP entered into a Renewal Agreement (the “Renewal Agreement”) and related documents with First Republic Bank, amending the terms of the Company’s revolving credit facility under the Loan Agreement. The Renewal Agreement provides for an extension of the maturity of the revolving credit facility to October 1, 2019.

~~As of September 30, 2017 and December 31, 2016, there were no borrowings under the revolving credit facility and the Company was in compliance with the debt covenants.~~

~~Leases~~

~~The Company~~ ~~leases office space under non-cancelable lease agreements, which expire at~~ ~~various dates through 2030.~~ Occupancy lease agreements, in addition to base rentals, generally are subject to escalation provisions based on certain costs incurred by the landlord and are recognized on a straight-line basis over the term of the lease agreement.

Total rent expense was $6.3 million and $18.4 million for the three and nine months ended September 30, 2017, respectively, and $5.9 million and $18.5 million for the three and nine months ended September 30, 2016, respectively. Rent expense is included in Occupancy and Related in the Condensed Consolidated Statements of Operations. These amounts include variable operating escalation payments, which are paid when invoiced.

~~As of September 30, 2017 and December 31, 2016, the Company maintained an irrevocable standby letter of credit for certain operating leases of $4.9 million and $4.5 million, respectively.~~

Capital lease obligations recorded are payable through 2021 at a weighted-average interest rate of 2.3%. The net book value of all assets recorded under capital leases aggregated $0.3 million and $0.4 million as of September 30, 2017 and December 31, 2016, respectively.

~~PJT Partners Inc.~~

~~Notes to Condensed Consolidated Financial Statements – Continued (Unaudited)~~

~~(All Dollars Are in Thousands, Except Share and Per Share Data, Except Where Noted)~~

~~As of September 30, 2017, the aggregate minimum future payments required on non-cancelable leases are as follows:~~

Minimum Lease Payments

Year Ending December 31,

Capital

Operating

2017

$
27

$
5,509

2018

107

22,657

2019

107

22,611

2020

80

21,518

2021

3

22,013

Thereafter

—

113,786

Total Minimum Lease Payments

324

208,094

Less: Amount Representing Interest

12

Capital Lease Obligation

$
312

Less: Sublease Proceeds

18,734

Net Minimum Lease Payments

$
189,360

~~Litigation~~

From time to time, the Company is named as a defendant in legal actions relating to transactions conducted in the ordinary course of business. Some of these matters may involve claims of substantial amounts. Although there can be no assurance of the outcome of such legal actions, in the opinion of management, after consultation with external counsel, the Company believes it is not probable and/or reasonably possible that any current legal proceedings or claims would individually or in the aggregate have a material adverse effect on the condensed consolidated financial statements of the Company.

As previously disclosed, the Company terminated Andrew Caspersen on March 28, 2016 after learning of a number of unauthorized and unlawful transactions outside the scope of his employment with Park Hill Group. The Company recorded an expense of $8.9 million during the three months ended March 31, 2016, which represented the amount that was considered to be probable and reasonably estimable, as well as a related insurance reimbursement of $5.6 million deemed probable of receipt. The Company made payments totaling $8.9 million related to the charge and also received a $5.6 million insurance reimbursement during the year ended December 31, 2016.

With respect to actual and potential additional claims related to funds fraudulently obtained by Mr. Caspersen, the Company believes that any such claims are without merit and the Company will vigorously defend any such actions.

With respect to the Company’s other litigation matters, the Company is not currently able to estimate the possible loss or range of loss until developments in such matters have provided sufficient information to support such an assessment, including quantification of a damage demand from plaintiffs, discovery from other parties and investigation of factual allegations, rulings by courts on motions or appeals, analysis by experts or the status of any settlement negotiations.

~~Indemnifications~~

The Company has entered and may continue to enter into contracts, including contracts with Blackstone relating to the spin-off, which contain a variety of indemnifications. The Company’s maximum exposure under these arrangements is not known. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

~~PJT Partners Inc.~~

~~Notes to Condensed Consolidated Financial Statements – Continued (Unaudited)~~

~~(All Dollars Are in Thousands, Except Share and Per Share Data, Except Where Noted)~~

~~Transactions and Agreements with Blackstone~~

During the nine months ended September 30, 2016, the Company recorded $0.3 million related to certain professional fees payable to Blackstone. As of September 30, 2017, the Company had no amounts payable to Blackstone for such expenses and $0.3 million as of December 31, 2016.

~~During the nine months ended September 30, 2016, the Company recorded $4.1 million in non-cash contributions related to the settlement of balances due to and from Blackstone.~~

~~Transition Services Agreement~~

In connection with the spin-off, the Company entered into a Transition Services Agreement with Blackstone under which Blackstone or its respective affiliates may provide the Company with certain services for a period of up to 24 months from the date of the spin-off (subject to the earlier termination of the agreement or any or all of the services provided thereunder in the circumstances set forth therein) to help ensure an orderly transition for each of the Company and Blackstone following the distribution. Pursuant to the Transition Services Agreement, Blackstone agreed to provide the Company certain finance, information technology, human resources and compensation, facilities, legal and compliance, external relations and public company services. The Company pays Blackstone for any such services at agreed amounts as set forth in the Transition Services Agreement. In addition, from time to time during the term of the agreement, the Company and Blackstone may mutually agree on additional services to be provided by Blackstone to the Company at pricing based on market rates that are reasonably agreed by the parties.

~~The Company had amounts payable to Blackstone with respect to the Transition Services Agreement of $25 thousand as of September 30, 2017 and December 31, 2016.~~

~~Employee Matters Agreement~~

The Company is required to reimburse Blackstone for the value of forfeited unvested equity awards granted to former Blackstone employees that transitioned to PJT Partners in connection with the spin-off. Such reimbursement is recorded in Accounts Payable, Accrued Expenses and Other Liabilities with an offset to Equity in the Condensed Consolidated Statements of Financial Condition. The Company will cash settle the liability to Blackstone quarterly as the forfeitures attributable to these employees crystallize. The accrual for these forfeitures was $0.3 million and $0.5 million as of September 30, 2017 and December 31, 2016, respectively.

Pursuant to the Employee Matters Agreement, the Company has agreed to pay Blackstone the net realized cash benefit resulting from certain compensation-related tax deductions. The amount payable to Blackstone arising from the tax deductions has been recorded in Other Expenses in the Condensed Consolidated Statements of Operations and is payable annually (for periods in which a cash benefit is realized) within nine months of the end of the relevant tax period. As of September 30, 2017 and December 31, 2016, the Company had accrued $7.2 million and $4.1 million, respectively, which the Company anticipates will be payable to Blackstone after the Company files its respective tax returns. The tax deduction and corresponding payable to Blackstone related to such deliveries will fluctuate primarily based on the price of Blackstone common units at the time of delivery.

~~Tax Matters Agreement~~

The Company entered into a Tax Matters Agreement with Blackstone that governs the respective rights, responsibilities and obligations of the Company and Blackstone after the spin-off with respect to tax liabilities and benefits, tax attributes, tax contests and other tax sharing regarding U.S. federal, state, local and foreign income taxes, other tax matters and related tax returns. The Company has joint and several liability with Blackstone to the Internal Revenue Service (“IRS”) for the consolidated U.S. federal income taxes of the Blackstone consolidated group relating to the taxable periods in which the Company was part of that group. However, the Tax Matters Agreement specifies the portion, if any, of this tax liability for which the Company bears responsibility, and Blackstone agrees to indemnify the Company against any amounts for which the Company is not responsible. The Tax Matters Agreement also provides special rules for allocating tax liabilities in the event that the spin-off is determined not to be tax-free. Though valid as between the parties, the Tax Matters Agreement is not binding on the IRS.

~~PJT Partners Inc.~~

~~Notes to Condensed Consolidated Financial Statements – Continued (Unaudited)~~

~~(All Dollars Are in Thousands, Except Share and Per Share Data, Except Where Noted)~~

~~12.~~

~~EMPLOYEE BENEFIT PLANS~~

The Company contributes to employer sponsored defined contribution plans for certain employees, subject to eligibility and statutory requirements. The Company incurred expenses with respect to these defined contribution plans in the amounts of $0.2 million and $0.6 million for the three and nine months ended September 30, 2017, respectively, and $0.2 million and $0.6 million for the three and nine months ended September 30, 2016, respectively, which are included in Compensation and Benefits in the Condensed Consolidated Statements of Operations.

~~13.~~

~~REGULATED ENTITIES~~

Certain subsidiaries of the Company are subject to various regulatory requirements in the United States, United Kingdom and Hong Kong, which specify, among other requirements, minimum net capital requirements for registered broker-dealers.

PJT Partners LP is a registered broker-dealer through which strategic advisory and restructuring and special situations services are conducted in the United States and is subject to the net capital requirements of Rule 15c3‑1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). PJT Partners LP computes net capital based upon the aggregate indebtedness standard, which requires the maintenance of minimum net capital, as defined, which shall be the greater of $100 thousand or 6 2/3% of aggregate indebtedness, as defined, and requires that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1. PJT Partners LP had net capital of $90.6 million and $65.6 million as of September 30, 2017 and December 31, 2016, respectively, which exceeded the minimum net capital requirement by $90.3 million and $64.1 million, respectively.

Park Hill Group LLC is a registered broker-dealer through which private fund advisory and placement services are conducted in the United States and is subject to the net capital requirements of Rule 15c3-1 under the Exchange Act. Park Hill Group LLC elected to adopt the alternative standard, which defines minimum net capital as the greater of $250 thousand or 2% of aggregate debit items computed in accordance with the reserve requirement. Park Hill Group LLC had net capital of $9.8 million and $18.1 million as of September 30, 2017 and December 31, 2016, respectively, which exceeded the minimum net capital requirement by $9.5 million and $17.9 million, respectively.

PJT Partners LP and Park Hill Group LLC do not carry customer accounts and do not otherwise hold funds or securities for, or owe money or securities to, customers and, accordingly, are both exempt from the SEC Customer Protection Rule (Rule 15c3‑3).

PJT Partners (UK) Limited is licensed with the United Kingdom’s Financial Conduct Authority and is required to maintain regulatory net capital of €50 thousand. PJT Partners (HK) Limited is licensed with the Hong Kong Securities and Futures Commission and is subject to a minimum liquid capital requirement of HK$3 million. As of September 30, 2017 and December 31, 2016, both of these entities were in compliance with local capital adequacy requirements.

~~14.~~

~~BUSINESS INFORMATION~~

The Company’s activities providing strategic advisory, restructuring and special situations and private fund advisory and placement services constitute a single reportable segment. An operating segment is a component of an entity that conducts business, incurs revenues and expenses for which discrete financial information is available that is reviewed by the chief operating decision maker in assessing performance and making resource allocation decisions. The Company has a single operating segment and therefore a single reportable segment.

~~PJT Partners Inc.~~

~~Notes to Condensed Consolidated Financial Statements – Continued (Unaudited)~~

~~(All Dollars Are in Thousands, Except Share and Per Share Data, Except Where Noted)~~

The Company is organized as one operating segment in order to maximize the value of advice to clients by drawing upon the diversified expertise and broad relationships of senior professionals across the Company. The chief operating decision maker assesses performance and allocates resources based on broad considerations including the market opportunity, available expertise across the Company and the strength and efficacy of professionals’ collaboration, and not based upon profit or loss measures for the Company’s separate product lines.

Three Months Ended September 30,

Nine Months Ended September 30,

2017

2016

2017

2016

Revenues

Domestic

$
62,399

$
104,283

$
269,267

$
302,045

International

16,051

17,063

39,462

23,889

Total

$
78,450

$
121,346

$
308,729

$
325,934

September 30,

December 31,

2017

2016

Assets

Domestic

$
510,209

$
545,049

International

51,810

45,427

Total

$
562,019

$
590,476

The Company is not subject to any material concentrations with respect to its revenues for the three and nine months ended September 30, 2017 and three and nine months ended September 30, 2016 or credit risk with respect to its accounts receivable as of September 30, 2017 and December 31, 2016.

~~15.~~

~~SUBSEQUENT EVENTS~~

The Board of Directors of PJT Partners Inc. has declared a quarterly dividend of $0.05 per share of Class A common stock, which will be paid on December 20, 2017 to Class A common stockholders of record on December 6, 2017.

~~The Company did not identify any other subsequent events besides those described in Notes 8, 10 and 11.~~

~~ITEM 2.~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF~~ ~~FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

The following discussion and analysis should be read in conjunction with PJT Partners’ Condensed Consolidated Financial Statements and the related notes included in this Quarterly Report on Form 10‑Q.

~~Our Business~~

PJT Partners is a global advisory-focused investment bank. Our team of senior professionals delivers a wide array of strategic advisory, restructuring and special situations and private fund advisory and placement services to corporations, financial sponsors, institutional investors and governments around the world. We offer a unique portfolio of advisory services designed to help our clients realize major corporate milestones and solve complex issues. We also provide, through Park Hill Group, private fund advisory and placement services for alternative investment managers, including private equity funds, real estate funds and hedge funds.

We have world-class franchises in each of the areas in which we compete. Our strategic advisory business offers a broad range of financial advisory and transaction execution capability, including mergers and acquisitions (“M&A”), joint ventures, minority investments, asset swaps, divestitures, takeover defenses, corporate finance advisory, private placements and distressed sales. Our restructuring and special situations business is one of the world’s leading advisors in restructurings and recapitalizations, both in and out of court, around the globe. With vast expertise in highly complex capital structure challenges, our Restructuring and Special Situations Group’s services include advising companies, creditors and financial sponsors on recapitalizations, reorganizations, exchange offers, debt repurchases, capital raises and distressed mergers and acquisitions. Park Hill Group, our private fund advisory and placement business, is a world-leading fund placement agent and provides private fund advisory and placement services for a diverse range of investment strategies. Moreover, Park Hill Group is the only group among its peers with top-tier dedicated private equity, hedge fund, real estate and secondary advisory groups.

~~Business Environment~~

Economic and global financial conditions can materially affect our operational and financial performance. See “Part I. Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2016 for a discussion of some of the factors that can affect our performance.

M&A is a cyclical business that is impacted by macroeconomic conditions. According to Thomson Reuters, worldwide M&A announced volumes during the first nine months of 2017 were up 3% compared with the same period in the prior year¹~~. We remain in a very constructive environment for M&A by historical standards. We expect corporate boards and management teams to continue to use M&A as a tool for growth.~~

Restructuring activity increased during the quarter given momentum from new deal activity. Opportunities were across a broad range of industries including retail; energy; technology, media and telecommunications; and shipping.

As investors seek to enhance returns, diversification and portfolio yield, alternative assets continue to be in demand by institutional investors on a global basis. Within certain asset classes, we are seeing increased interest in narrow and niche strategies as well as customized solutions such as joint ventures, separate account and direct investment opportunities. We believe that Park Hill Group is well positioned to benefit from this demand given its access to best-in-breed managers and operators.

¹	Source: Thomson Reuters. Aggregate mergers and acquisitions values extracted from the official Thomson Reuters Mergers & Acquisitions Review for First Nine Months 2017, based on figures extracted from Thomson Reuters databases as of September 29, 2017.

On June 23, 2016, the United Kingdom (“U.K.”) voted to leave the European Union (“E.U.”), commonly referred to as “Brexit,” and on March 29, 2017, the U.K. began the process to withdraw from the E.U. The full impact of Brexit remains uncertain and the political climate in Europe continues to take shape. It is likely to take a significant period of time before the future terms of the E.U. are determined. Circumstances relating to Brexit have the potential to impact particular client transactions as well as the Company’s decisions around our organization and/or operations.

~~Key Financial Measures~~

~~Revenues~~

Substantially all of our revenues are derived from Advisory Fees and Placement Fees. These revenues are primarily a function of the number of active engagements we have, the size of each of those engagements and the fees we charge for our services.

~~Advisory Fees~~ – Our strategic advisory services include a broad range of financial advisory and transaction execution services relating to acquisitions, mergers, joint ventures, minority investments, asset swaps, divestitures, takeover defenses, corporate finance advisory and distressed sales. Our restructuring and special situations services include providing advice to corporations and creditors in recapitalizations and restructurings around the world, with particular expertise in large, complex and high-profile deals. In conjunction with providing such restructuring advice, we may also assist with raising various forms of financing, including debt and equity. Our secondary advisory services provided by Park Hill Group include providing solutions to investing clients seeking portfolio liquidity, unfunded commitment relief and investments in secondary markets. Advisory Fees typically consist of retainer and transaction-based fee arrangements. The amount and timing of the fees paid vary by the type of engagement. The majority of our Advisory Fees are dependent on the successful completion of a transaction.

A transaction can fail to be completed for many reasons, including failure of parties to agree upon final terms with the counterparty, to secure necessary board or shareholder approvals, to secure necessary financing or to achieve necessary regulatory approvals. In the case of bankruptcy engagements, fees are subject to approval of the court.

~~Placement Fees~~ – Our fund placement services are provided within Park Hill Group and primarily serve private equity, real estate and hedge funds. Our team advises on all aspects of the fundraising process including competitive positioning and market assessment, marketing materials and related documentation and partnership terms and conditions most prevalent in the current environment. We also provide private placement fundraising services to our corporate clients and earn placement fees based on successful completion of the transaction.

Fund placement fees earned for services provided to alternative asset managers are typically recognized as earned upon acceptance by a fund of capital or capital commitments (referred to as a “closing”), in accordance with terms set forth in individual agreements. For commitment based fees, revenue is recognized as commitments are accepted. Fees for such closed-end fund arrangements are generally paid in quarterly installments over three or four years and interest is charged to the outstanding balance at an agreed upon rate (typically the London Interbank Offered Rate (“LIBOR”) plus a market-based margin). For funds with multiple closings, each closing is treated as a separate performance obligation. As a result, we recognize revenue at each closing as our performance obligations are fulfilled. For open-end fund structures, placement fees are typically calculated as a percentage of a placed investor’s month-end net asset value. Typically, we earn fees for such open-end fund structures over a 48 month period. For these arrangements, revenue is recognized monthly as the amounts become fixed and determinable.

~~We may receive non-refundable up-front fees upon execution of agreements with clients to provide placement services, which are recorded as revenues in the period over which services are provided.~~

~~Interest Income and Other~~ – Interest Income and Other represents interest typically earned on Cash and Cash Equivalents, investments in U.S. Treasury securities and outstanding placement fees receivable; miscellaneous income; foreign exchange gains and losses arising on transactions denominated in currencies other than U.S. dollars; and sublease income. Interest on placement fees receivable is earned from the time revenue is recognized and is calculated based upon LIBOR plus an additional percentage as mutually agreed upon with the receivable counterparty. Interest receivable is included in Accounts Receivable in the Condensed Consolidated Statements of Financial Condition.

~~Expenses~~

~~Compensation and Benefits~~ – Compensation and Benefits expense includes salaries, bonuses, benefits, employer taxes and equity-based compensation associated with the grants of equity-based awards to employees and partners. Changes in this expense are driven by fluctuations in the number of employees, business performance, increases in wages as a result of inflation or labor market conditions, changes in rates for employer taxes and other cost increases affecting benefit plans. In addition, this expense is affected by the composition of our work force. The expense associated with our bonus and equity plans can also have a significant impact on this expense category and may vary from year to year.

We maintain compensation programs, including salaries, annual incentive bonuses (that may include components of restricted cash and/or restricted stock units), and other benefits programs. We manage compensation to estimates of competitive levels based on market conditions and performance. Our level of compensation reflects our plan to maintain competitive compensation levels to retain key personnel and it reflects the impact of newly-hired senior professionals, including related grants of equity awards which are generally valued at their grant date.

Increasing the number of high-caliber, experienced senior level employees is critical to our growth efforts. In our advisory businesses, these hires generally do not begin to generate significant revenue in the year they are hired.

~~Our remaining expenses are the other costs typical to operating our business, which generally consist of:~~

~~Occupancy and Related~~ – consisting primarily of costs related to leased property including rent, maintenance, real estate taxes, utilities and other related costs. Our company headquarters are located in New York, New York, and we maintain additional offices in the U.S. and throughout the world;

~~Travel and Related~~ ~~– consisting of costs for our partners and employees to render services where our clients are located;~~

~~Professional Fees~~ ~~– consisting principally of consulting, audit and tax, recruiting, legal and other professional services;~~

~~Communications and Information Services~~ ~~– consisting primarily of costs for our technology infrastructure and telecommunications costs;~~

~~Depreciation and Amortization~~ ~~– consisting of depreciation and amortization on our furniture, equipment, leasehold improvements and intangible assets; and~~

~~Other Expenses~~ ~~– consisting principally of bad debt, regulatory fees, insurance, fees paid for access to external market data, advertising and transaction-related payable to Blackstone.~~

~~Income Taxes~~ – PJT Partners Inc. is a corporation subject to U.S. federal, state and local income taxes in jurisdictions where it does business. The Company’s businesses generally operate as partnerships for U.S. federal and state purposes and as corporate entities in non-U.S. jurisdictions. In the U.S. federal and state jurisdictions, taxes related to income earned by these entities generally represent obligations of the individual members and partners.

The operating entities have generally been subject to New York City Unincorporated Business Tax (“UBT”) and to entity-level income taxes imposed by non-U.S. jurisdictions, as applicable. These taxes have been reflected in the Company’s condensed consolidated financial statements.

~~PJT Partners Inc. is subject to U.S. corporate federal, state and local income tax on its allocable share of results of operations from the operating partnership (PJT Partners Holdings LP)~~.

~~Redeemable Non-Controlling Interest~~

partnership interest in PJT Partners Holdings LP (“Partnership Units”) have redemption rights not solely within the Company’s control and thus their ownership interest is considered a redeemable non-controlling interest. Redeemable Non-Controlling Interests have been presented separately from Equity in the Condensed Consolidated Statements of Financial Condition and the portion of net income or loss attributable to the redeemable non-controlling interests has been presented separately in the Condensed Consolidated Statements of Operations.

~~Condensed Consolidated Results of Operations~~

~~The following table sets forth our condensed consolidated results of operations for the three and nine months ended September 30, 2017 and 2016:~~

Three Months Ended
September 30,

Nine Months Ended
September 30,

2017

2016

% Change

2017

2016

% Change

(Dollars in Thousands)

Revenues

Advisory Fees

$
60,457

$
100,728

(40
%)

$
233,145

$
241,360

(3
%)
Placement Fees

15,907

18,327

(13
%)

68,912

78,930

(13
%)
Interest Income and Other

2,086

2,291

(9
%)

6,672

5,644

18
%
Total Revenues

78,450

121,346

(35
%)

308,729

325,934

(5
%)
Expenses

Compensation and Benefits

68,018

95,841

(29
%)

251,258

255,976

(2
%)
Occupancy and Related

6,746

6,481

4
%

19,611

19,521

0
%
Travel and Related

3,369

3,208

5
%

9,325

8,755

7
%
Professional Fees

6,374

3,983

60
%

15,366

14,170

8
%
Communications and
   Information Services

2,556

1,970

30
%

7,823

6,670

17
%
Depreciation and
   Amortization

2,038

4,004

(49
%)

6,152

11,930

(48
%)
Other Expenses

4,963

7,819

(37
%)

14,803

18,394

(20
%)
Total Expenses

94,064

123,306

(24
%)

324,338

335,416

(3
%)
Loss Before
  Provision (Benefit) for Taxes

(15,614
)

(1,960
)

697
%

(15,609
)

(9,482
)

65
%
Provision (Benefit) for Taxes

(13,258
)

8,376

N/M

(15,647
)

4,139

N/M

Net Income (Loss)

(2,356
)

(10,336
)

(77
%)

38

(13,621
)

N/M

Net Loss
   Attributable to Redeemable
   Non-Controlling Interests

(5,699
)

(625
)

812
%

(4,853
)

(3,842
)

26
%
Net Income (Loss)
   Attributable to
   PJT Partners Inc.

$
3,343

$
(9,711
)

N/M

$
4,891

$
(9,779
)

N/M

~~N/M~~

~~Not meaningful.~~

~~Revenues~~

~~The following table provides revenue statistics for the three and nine months ended September 30, 2017 and 2016:~~

Three Months Ended September 30,

Nine Months Ended September 30,

2017

2016

2017

2016

Advisory Fees

Number of Fee-Paying Clients

61

68

116

116

Number of Fee-Paying Clients with $1 Million or
   More

18

20

62

63

Number of Fee-Paying Clients Representing
   Greater than 10% of Advisory Fees

—

2

—

—

Percentage of Such Clients’ Fees of Total
   Advisory Fees

N/A

21.9
%

N/A

N/A

Placement Fees

Number of Fee-Paying Clients

49

39

67

62

Number of Fee-Paying Clients with $1 Million or
   More

4

5

23

22

Number of Fee-Paying Clients Representing
   Greater than 10% of Placement Fees

—

2

—

—

Percentage of Such Clients’ Fees of Total
   Placement Fees

N/A

35.9
%

N/A

N/A

Total Revenues were $78.5 million for the three months ended September 30, 2017, a decrease of $42.9 million compared with $121.3 million for the three months ended September 30, 2016. Advisory Fees were $60.5 million for the three months ended September 30, 2017, a decrease of $40.3 million compared with $100.7 million for the three months ended September 30, 2016. The decrease in Advisory Fees was driven by lower average fees earned during the three months ended September 30, 2017, primarily as a result of the absence of large transaction closings during the third quarter of 2017 compared with the third quarter of 2016. Placement Fees were $15.9 million for the three months ended September 30, 2017, a decrease of $2.4 million compared with $18.3 million for the three months ended September 30, 2016. Despite an increase in the number of transaction closings during the third quarter of 2017 compared with the third quarter of 2016, a decline in the average fees earned per transaction resulted in an overall decline in revenues.

Total Revenues were $308.7 million for the nine months ended September 30, 2017, a decrease of $17.2 million compared with $325.9 million for the nine months ended September 30, 2016. Advisory Fees were $233.1 million for the nine months ended September 30, 2017, down slightly compared with $241.4 million for the nine months ended September 30, 2016. Placement Fees were $68.9 million for the nine months ended September 30, 2017, a decrease of $10.0 million compared with $78.9 million for the nine months ended September 30, 2016. Despite an increase in the number of transaction closings during the nine months ended September 30, 2017 compared with the nine months ended September 30, 2016, a decline in the average fees earned per transaction resulted in an overall decline in revenues.

~~Expenses~~

Expenses were $94.1 million for the three months ended September 30, 2017, a decrease of $29.2 million compared with $123.3 million for the three months ended September 30, 2016. The decrease in expenses was primarily attributable to decreases in Compensation and Benefits of $27.8 million, Other Expenses of $2.9 million and Depreciation and Amortization of $2.0 million, and partially offset by an increase in Professional Fees of $2.4 million. The decrease in Compensation and Benefits was primarily due to lower revenues. The decrease in Other Expenses was primarily related to a decrease in the net realized cash benefit from certain compensation-related tax deductions payable to Blackstone and a decrease in bad debt expense. The decrease in Depreciation and Amortization was primarily due to a decrease in amortization expense related to certain intangible assets identified in connection with the spin-off that were fully amortized in the prior year.

Expenses were $324.3 million for the nine months ended September 30, 2017, a decrease of $11.1 million compared with $335.4 million for the nine months ended September 30, 2016. The decrease in expenses was primarily attributable to decreases in Depreciation and Amortization of $5.8 million, Compensation and Benefits of $4.7 million and Other Expenses of $3.6 million, and partially offset by increases in Professional Fees and Communication and Information Services of $1.2 million and $1.2 million, respectively. The decrease in Depreciation and Amortization was primarily due to a decrease in amortization expense related to certain intangible assets identified in connection with the spin-off that were fully amortized in the prior year. The decrease in Compensation and Benefits was primarily due to lower revenues. Other Expenses were lower in the nine months ended September 30, 2017 primarily due to the absence of the Caspersen-related charge recorded during 2016 and lower bad debt expense.

~~Provision (Benefit) for Taxes~~

The Company’s Benefit for Taxes for the three months ended September 30, 2017 was $13.3 million, which represents an effective tax rate of 84.9% on pretax loss of $15.6 million. The Company’s Provision for Taxes for the three months ended September 30, 2016 was $8.4 million, which represents an effective tax rate of -427.3% on pretax loss of $2.0 million.

The Company’s Benefit for Taxes for the nine months ended September 30, 2017 was $15.6 million, which represents an effective tax rate of 100.2% on pretax loss of $15.6 million. The Company’s Provision for Taxes for the nine months ended September 30, 2016 was $4.1 million, which represents an effective tax rate of -43.7% on pretax loss of $9.5 million.

The Company’s effective tax rate differed from the U.S. federal statutory tax rate for the three and nine months ended September 30, 2017 due to corporate entities subject to U.S. federal, state, local and foreign income taxes; to non-corporate entities that are subject to New York City UBT and to certain compensation charges that are not deductible for income tax purposes.

The change in the Company’s effective tax rate between the three and nine months ended September 30, 2016 and three and nine months ended September 30, 2017 was largely due to the use of the actual year-to-date rate as of September 30, 2016 in determining tax expense in comparison to using an annualized effective tax rate in determining tax expense for the nine months ended September 30, 2017.

~~Redeemable Non-Controlling Interests~~

Net Loss Attributable to Redeemable Non-Controlling Interests is derived from the Income (Loss) Before Provision (Benefit) for Taxes and the percentage allocation of the net income (loss) between the holders of Partnership Units and holders of Class A common stock of PJT Partners Inc. after considering any contractual arrangements that govern the allocation of income (loss).

~~Liquidity and Capital Resources~~

~~General~~

~~We regularly monitor our liquidity position, including cash and cash equivalents, investments, working capital assets and liabilities, any commitments and other liquidity requirements.~~

Our assets are generally comprised of cash and cash equivalents, investments in U.S. Treasury securities and receivables arising from advisory and placement engagements. Our liabilities primarily include accrued compensation and benefits, accounts payable and accrued expenses and taxes payable. We expect to pay a significant amount of incentive compensation late each year or during the first two months of each calendar year with respect to the prior year’s results. A portion of annual compensation may be awarded with equity-based compensation and thus requires less cash. We expect levels of cash to decline at year-end or during the first quarter of each year after incentive compensation is paid to our employees. We then expect cash to gradually increase over the remainder of the year.

Additionally, in connection with the spin-off, we entered into a credit facility with First Republic Bank to provide a $60.0 million revolving credit facility, with the ability to increase the credit facility up to $80.0 million during the period beginning December 1 each year through March 1 the following year, so long as no event of default has occurred and is continuing or would be caused by exercising such option. The revolving credit facility is further described in Note 11. “Commitments and Contingencies—Commitments, Line of Credit” in the “Notes to Condensed Consolidated Financial Statements” in “—Item 1. Financial Statements” of this filing.

~~As of September 30, 2017 and December 31, 2016, there were no borrowings under the revolving credit facility and we were in compliance with all debt covenants.~~

We evaluate our cash needs on a regular basis in light of current market conditions. As of September 30, 2017 and December 31, 2016, we had cash, cash equivalents and investments in U.S. Treasury securities of $157.4 million and $152.4 million, respectively.

Our liquidity is highly dependent upon cash receipts from clients, which are generally dependent upon the successful completion of transactions as well as the timing of receivable collections. As of September 30, 2017 and December 31, 2016, accounts receivable were $168.4 million and $227.6 million, respectively, net of allowance for doubtful accounts of $1.9 million and $4.4 million, respectively. Included in Accounts Receivable are long-term receivables of $65.3 million and $73.1 million as of September 30, 2017 and December 31, 2016, respectively, related to placement fees that are generally paid in installments over a period of three to four years.

~~Sources and Uses of Liquidity~~

Our primary cash needs are for working capital, paying operating expenses, including cash compensation to our employees, funding the cash redemption of Partnership Units, paying income taxes, making distributions to our shareholders in accordance with our dividend policy, capital expenditures, commitments and strategic investments. We expect to fund these liquidity requirements through cash flows from operations and borrowings under our revolving credit facility. Our ability to fund these needs through cash flows from operations will depend, in part, on our ability to generate or raise cash in the future. This depends on our future financial results, which are subject to general economic, financial, competitive, legislative and regulatory factors. Furthermore, our ability to forecast future cash flows is more limited because we do not have a long-established operating history as a stand-alone company. If our cash flows from operations are less than we expect, we may need to incur debt, issue additional equity or borrow from our revolving credit facility. Although we believe that the arrangements we have in place will permit us to finance our operations on acceptable terms and conditions, our access to, and the availability of, financing on acceptable terms and conditions in the future will be impacted by many factors, including: (a) our credit ratings or absence of a credit rating, (b) the liquidity of the overall capital markets, and (c) the current state of the economy. We cannot provide any assurance that such financing will be available to us on acceptable terms or that such financing will be available at all. We believe that our future cash from operations and availability under our revolving credit facility, together with our access to funds on hand, will provide adequate resources to fund our short-term and long-term liquidity and capital needs.

Subject to the terms and conditions of the exchange agreement between us and certain of the holders of Partnership Units, Partnership Units are exchangeable at the option of the holder for cash, or, at our election, for shares of our Class A common stock on a one-for-one basis. Depending on our liquidity and capital resources, market conditions, the timing and concentration of exchange requests and other considerations, we may choose to fund cash-settled exchanges of Partnership Units with available cash, borrowings or new issuances of Class A common stock or to settle exchanges by issuing Class A common stock to the exchanging Partnership Unitholder. Issuing significant numbers of shares of our Class A common stock upon exchange of Partnership Units could adversely affect the tax consequences to Blackstone of the distribution. Accordingly, while we will retain the right under the Exchange Agreement to elect to settle exchanges in cash or Class A common stock in our sole discretion, we intend to limit such issuances of Class A common stock in settlement of exchanges of Partnership Units to the extent necessary to preserve the intended tax-free nature of the spin-off and to comply with our obligations under the Tax Matters Agreement.

~~Regulatory Capital~~

We actively monitor our regulatory capital base. We are subject to regulatory requirements in the U.S. and certain international jurisdictions to ensure general financial soundness and liquidity. This requires, among other things, that we comply with certain minimum capital requirements, recordkeeping, reporting procedures, 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 13. “Regulated Entities” in the “Notes to Condensed Consolidated Financial Statements” in “—Item 1. Financial Statements” of this filing for further information. The licenses under which we operate are meant to be appropriate to conduct our strategic advisory, restructuring and special situations and private fund advisory and placement services. We believe that we provide each of these entities with sufficient capital and liquidity, consistent with their business and regulatory requirements.

~~Our activities may also be subject to regulation, including regulatory capital requirements, by various other foreign jurisdictions and self-regulatory organizations.~~

~~We do not anticipate that compliance with any and all such requirements will materially adversely impact the availability of funds for domestic and parent-level purposes.~~

~~Share Repurchase Program~~

On October 26, 2017, our Board of Directors authorized the repurchase of up to $100 million of shares of the Company’s Class A common stock. Under this repurchase program, shares of the Company’s Class A common stock may be repurchased from time to time in open market transactions, in privately negotiated transactions or otherwise. The timing and the actual number of shares repurchased will depend on a variety of factors, including legal requirements, price and economic and market conditions. The repurchase program may be suspended or discontinued at any time and does not have a specified expiration date.

~~Contractual Obligations~~

~~The following table sets forth information relating to our contractual obligations as of September 30, 2017:~~

October 1, 2017 to

Contractual Obligations

December 31, 2017

2018–2019

2020–2021

Thereafter

Total

(Dollars in Thousands)

Operating Lease Obligations (a)

$
4,679

$
38,015

$
37,586

$
109,080

$
189,360

Capital Leases (including interest)

27

214

83

—

324

Purchase Obligations

1,274

7,025

3,222

—

11,521

Tax Benefit Liability (b)

4,096

3,074

—

—

7,170

Amount Due Pursuant to Tax Receivable
Agreement (c)

11

439

512

2,878

3,840

Contractual Obligations

$
10,087

$
48,767

$
41,403

$
111,958

$
212,215

~~(a)~~

We lease our office space under agreements that expire at various dates through 2030. Further disclosure regarding rent is provided in Note 11. “Commitments and Contingencies—Commitments, Leases” in the “Notes to Condensed Consolidated Financial Statements” in “—Item 1. Financial Statements” of this filing. The amounts presented are net of contractual sublease commitments.

~~(b)~~

Pursuant to the Employee Matters Agreement, we have agreed to pay Blackstone the net realized cash benefit resulting from certain compensation-related tax deductions. Amounts are payable annually (for periods in which a cash benefit is realized) within nine months of the end of the relevant tax period. Further disclosure regarding this liability is provided in Note 11. “Commitments and Contingencies—Transactions and Agreements with Blackstone, Employee Matters Agreement” in the “Notes to Condensed Consolidated Financial Statements” in “—Item 1. Financial Statements” of this filing.

~~(c)~~

As of September 30, 2017, the Company had an amount due of $3.8 million pursuant to the tax receivable agreement, which represents management’s best estimate of the amounts currently expected to be owed under the tax receivable agreement. Actual payments may differ significantly from estimated payments. Further disclosure regarding the tax receivable agreement is provided below.

~~Commitments and Contingencies~~

We previously recorded an expense of $8.9 million during the three months ended March 31, 2016 related to the Caspersen matter, which represented the amount that was considered to be probable and reasonably estimable, as well as a related insurance reimbursement of $5.6 million deemed probable of receipt. We made payments totaling $8.9 million related to the charge and also received a $5.6 million insurance reimbursement during the year ended December 31, 2016.

With respect to actual and potential additional claims related to funds fraudulently obtained by Mr. Caspersen, we believe that the total potential amount of any such claims to be less than $30 million, any such claims are without merit and we will vigorously defend any such actions.

With respect to our other litigation matters, we are not currently able to estimate the possible loss or range of loss until developments in such matters have provided sufficient information to support such an assessment, including quantification of a damage demand from plaintiffs, discovery from other parties and investigation of factual allegations, rulings by courts on motions or appeals, analysis by experts or the status of any settlement negotiations. ~~However, the disposition of these contingencies could be material to our financial results in the period in which it occurs.~~

~~Indemnifications~~

We have entered and may continue to enter into contracts, including contracts with Blackstone relating to the spin-off, which contain a variety of indemnifications. Our maximum exposure under these arrangements is not known. However, we have not had prior claims or losses pursuant to these contracts and expect the risk of loss to be remote.

~~Tax Receivable Agreement~~

We have entered into a tax receivable agreement with the holders of Partnership Units (other than PJT Partners Inc.) that provides for the payment by PJT Partners Inc. to exchanging holders of Partnership Units of 85% of the benefits, if any, that PJT Partners Inc. is deemed to realize as a result of the increases in tax basis related to such exchanges of Partnership Units and of certain other tax benefits related to entering into the tax receivable agreement, including tax benefits attributable to payments under the tax receivable agreement. This payment obligation is an obligation of PJT Partners Inc. and not of PJT Partners Holdings LP. PJT Partners Inc. expects to benefit from the remaining 15% of cash tax savings, if any, in income tax it realizes.

In connection with the exchange of Partnership Units for cash during the nine months ended September 30, 2017, we recorded an additional estimated deferred tax asset of $3.4 million as a result of the increase in the tax basis of the Company’s assets attributable to the exchanges. Pursuant to the tax receivable agreement, 85% of the tax benefits associated with this portion of the deferred tax asset are payable to such exchanging partners generally over 15 years and are recorded as Amount Due Pursuant to Tax Receivable Agreement in the Condensed Consolidated Statements of Financial Condition. The remaining tax benefit is allocable to the Company and is recorded in Additional Paid-In Capital.

Further information regarding the tax receivable agreement can be found in “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2022.

~~Other~~

Other

See Notes ~~7, 9,~~8, 10, 11 and 1213 in the “Notes to Condensed Consolidated Financial Statements” in “—Item 1. Financial Statements” of this filing for further information in connection with income taxes, ~~equity~~equity-based and other deferred compensation plans, leasing arrangements and commitments, ~~and employee benefit plans,~~ respectively.

Critical Accounting ~~Policies~~Estimates

Our significant accounting policies are summarized in Note 2. “Summary of Significant Accounting Policies” in the “Notes to Consolidated and Combined Financial Statements” in “Part II. Item 8. Financial Statements and Supplementary Data” in our Annual Report on Form 10-K for the year ended December 31, 2016. A discussion of critical accounting ~~policies~~estimates is included in “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, ~~2016. There were no~~2022.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risk and Credit Risk

Our business is not capital-intensive and we do not invest in derivative instruments or, generally, borrow. As a result, we are not subject to significant ~~changes~~market risk (including interest rate risk, foreign currency exchange rate risk and commodity price risk) or credit risk. Notwithstanding the foregoing, current economic and geopolitical uncertainty and slowing global growth could have a material adverse effect on the Company's condensed consolidated financial statements.

Risks Related to Cash, Cash Equivalents and Investments

Our cash and cash equivalents include short-term highly liquid investments that are readily convertible to known amounts of cash and have original maturities of three months or less from the date of purchase. Cash and cash equivalents are maintained in U.S. and non-U.S. bank accounts and are held at seven financial institutions. In addition to cash and cash equivalents, we hold investments in Treasury securities, certain of which are classified as Investments in our ~~significant accounting policies~~Condensed Consolidated Statements of Financial Condition. We believe our cash, cash equivalents and short-term investments are not subject to any material interest rate risk, equity price risk, credit risk or ~~critical accounting policies during~~other market risk based on our diversified use of global and regional financial institutions and the ~~nine~~short-term nature of the securities.

Credit Risk

We estimate our allowance for credit losses using relevant available information from internal and external sources relating to past events, current conditions and reasonable and supportable forecasts. We maintain an allowance for credit losses that, in our opinion, reflects current expected credit losses. As of June 30, 2023 and December 31, 2022, the allowance for credit losses was $3.0 million and $1.9 million, respectively.

Exchange Rate Risk

We are exposed to the risk that the exchange rate of the U.S. dollar relative to other currencies may have an adverse effect on the reported value of our non-U.S. dollar denominated or based assets and liabilities. In addition, the reported amounts of our revenues may be affected by movements in the rate of exchange between the transaction currency and the U.S. dollar, the currency in which our financial statements are denominated. The principal non-U.S. dollar currencies include the pound sterling, the euro, the Hong Kong dollar and the Japanese yen. For the six months ended ~~September~~June 30, ~~2017.~~

~~Off-Balance Sheet Arrangements~~

~~The Company is~~2023 and 2022, the impact of the fluctuation of foreign currencies in Other Comprehensive Income (Loss), Net of Tax – Currency Translation Adjustment in the Condensed Consolidated Statements of Comprehensive Income was a gain of $3.1 million and a loss of $5.1 million, respectively, and in Interest Income and Other in the Condensed Consolidated Statements of Operations, a loss of $2.7 million and $0.1 million, respectively. We have not ~~involved with~~entered into any ~~off-balance sheet arrangements that are not elsewhere reflected in~~transaction to hedge our exposure to these foreign currency fluctuations through the use of derivative instruments or other methods at this time. Given the geopolitical uncertainty and the ongoing economic impact, rising interest rates and heightened inflation, exchange rate fluctuations between the U.S. dollar and other currencies could unfavorably affect our condensed consolidated financial statements.

~~Recent Accounting Developments~~ITEM 4. CONTROLS AND PROCEDURES

Information regarding recent accounting developments and their impact on our financial statements can be found in Note 2. “Summary of Significant Accounting Policies” in the “Notes to Condensed Consolidated Financial Statements” in “—Item 1. Financial Statements” of this filing.

~~Emerging Growth Company Implications~~

Information regarding our emerging growth company status and implications can be found in “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2016. ~~We will cease to be an emerging growth company at the end of fiscal year 2017.~~

~~ITEM 3.~~

~~QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~

Quantitative and qualitative disclosures about market risk can be found in “Part II. Item 7A. Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report on Form 10-K for the year ended December 31, 2016. Our exposures to market risk have not changed materially since December 31, 2016.

~~ITEM 4.~~

~~CONTROLS AND PROCEDURES~~

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based upon this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were ~~effective~~.effective.

No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) occurred during ~~the period covered by this report~~our most recent quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

~~PART II.~~

~~OTHER INFORMATION~~

~~ITEM 1.~~

~~LEGAL PROCEEDINGS~~

ITEM 1. LEGAL PROCEEDINGS

From time to time, the Company and its affiliates may be subject to legal proceedings and claims in the ordinary course of business. In addition, government agencies and self-regulatory organizations in countries in which we conduct business ~~conduct~~undertake periodic examinations and may initiate administrative proceedings regarding the Company’s and its affiliates’ business, including, among other matters, accounting and operational matters, that can result in censure, fine, the issuance of cease-and-desist orders or the suspension or expulsion of a broker-dealer, ~~investment advisor,~~ or its directors, officers or employees. It is our policy to cooperate fully with such governmental requests, examinations and administrative proceedings. In view of the inherent difficulty of determining whether any loss in connection with any such matters is probable and whether the amount of such loss can be reasonably estimated, particularly in cases where claimants seek substantial or indeterminate damages or where investigations and proceedings are in the early stages, we cannot estimate the amount of such loss or range of loss, if any, related to such matters, how or if such matters will be resolved, when they will ultimately be resolved, or what the eventual settlement, fine, penalty or other relief, if any, might be. Subject to the foregoing, we believe, based on current knowledge and after consultation with counsel, that we are not currently party to any material pending proceedings, individually or in the aggregate, the resolution of which would have a material effect on the Company.

~~On April 15, 2016, Plaintiff Gregory G. Barrett~~In June 2017, an action was filed in ~~the Southern District of~~ New York ~~a putative class action for violation~~state court by affiliates of ~~the federal securities laws~~Moore Capital against defendants ~~PJT Partners Inc. and Andrew W. W. Caspersen in an action styled~~ ~~Gregory G. Barrett v. PJT Partners Inc. and Andrew W. W. Caspersen~~, No. 1:16-cv-02841-VEC (S.D.N.Y.). Generally, the complaint alleged that PJT Partners made misstatements about its business, operational and compliance policies and its compliance and fraud-prevention controls. These alleged misstatements allegedly caused members of the putative class, investors who purchased PJT Partners common stock during the class period, November 12, 2015 to March 28, 2016, to pay an inflated price for PJT Partners common stock. The complaint alleged claims under section 10(b) and Rule 10b-5 of the Exchange Act against PJT Partners and Mr. Caspersen, and under 20(a) of the Exchange Act against Mr. Caspersen. On June 14, 2016, plaintiff Gregory G. Barrett filed a motion for appointment as lead plaintiff and for approval of Pomerantz LLP as lead counsel. On August 3, 2016, the motion was granted. On September 23, 2016, lead plaintiff filed an amended class action complaint. The amended complaint alleged claims under section 10(b) and Rule 10b-5 of the Exchange Act against PJT Partners, Paul J. Taubman, Helen T. Meates and Mr. Caspersen and under Section 20(a) of the Exchange Act against Mr. Taubman and Ms. Meates. The Company, Mr. Taubman and Ms. Meates moved to dismiss the amended complaint on November 4, 2016. On September 8, 2017, the court granted the motion to dismiss and on October 11, 2017, the court entered judgment in favor of the Company, Mr. Taubman and Ms. Meates.

~~On June 29, 2017, The Moore Charitable Foundation and Kendall JMAC, LLC filed an action in the Supreme Court of the State of New York, County of New York, against~~ PJT Partners Inc., Park Hill Group LLC and Andrew W.W. Caspersen, arising out of the fraudulent conduct of ~~Mr.~~Caspersen. A principal of Plaintiffs had a personal relationship with Caspersen ~~in an action styled~~ ~~The Moore Charitable Foundation, et al. v.~~and Plaintiffs had no relationship with either Park Hill Group LLC or PJT Partners Inc.~~, et al., No. 654584/2017 (N.Y. Sup. Ct. June 29, 2017). Generally, the complaint alleges that~~ PJT Partners Inc.’s and Park Hill ~~Group’s inadequate supervision enabled Caspersen~~Group LLC moved to ~~commit multiple frauds while using PJT Partners Inc.’s and Park Hill Group’s name and business resources. The complaint alleges~~dismiss the complaint. On August 13, 2018, the court dismissed all of the claims asserted against PJT Partners Inc. and Park Hill Group LLC, except for ~~fraud under theories of~~the fraud-based apparent authority claim. Plaintiffs and ~~respondeat superior,~~PJT Partners Inc. and Park Hill Group LLC appealed the court’s decision. On December 3, 2019, the appellate court dismissed the complaint in its entirety against PJT Partners Inc. and Park Hill Group LLC. On January 2, 2020, Plaintiffs filed a motion with the appellate court seeking reargument or, alternatively, leave to appeal, which motion was denied by the appellate court. On September 15, 2020, the New York Court of Appeals granted Plaintiffs permission to file an appeal, which appeal was filed on December 30, 2020. On June 13, 2023, the New York Court of Appeals reversed the dismissals of the two lower courts and reinstated Plaintiff’s claim for negligent supervision and retention ~~and conversion. PJT Partners and Park Hill Group moved to dismiss~~for further proceedings at the ~~complaint on August 24, 2017.~~state court. We believe ~~that~~ this ~~action~~matter is without merit and will ~~defend it vigorously.~~continue to vigorously oppose Plaintiffs’ sole remaining claim.

~~On June 16, 2009, Plaintiffs Frank Foy and Suzanne Foy, purportedly as~~ ~~qui tam~~ plaintiffs on behalf of the State of New Mexico, filed a case in New Mexico state court against Park Hill Group and one of its officers, as well as The Blackstone Group L.P. (together, “Park Hill Defendants”), in addition to dozens of other named and unnamed defendants, alleging violations of New Mexico’s Fraud Against Taxpayers Act (“FATA”) in an action styled ~~Foy v. Austin Capital Management, Ltd., et al.~~, Case No. D-101-CV-2009-01189 (N.M. Dist. Ct.). The complaint alleged, among other things, that the New Mexico Educational Retirement Board and the New Mexico State Investment Council made investments that were influenced by kickbacks and other inducements. In the complaint, the Park Hill Defendants were grouped together with other defendants who were all alleged generically to have conspired to defraud the State of New Mexico. In May 2011, the trial court ruled that, as defendants had argued, FATA cannot constitutionally be applied retroactively. Plaintiffs appealed and, in December 2012, theITEM 1A. RISK FACTORS

intermediate appellate court affirmed the trial court’s determination that FATA cannot constitutionally be applied retroactively. Plaintiffs appealed. On June 25, 2015, the New Mexico Supreme Court reversed the intermediate appellate court and held that a provision of FATA imposing treble damages could be applied retroactively. The New Mexico Supreme Court reserved judgment on whether FATA’s provision imposing a civil penalty could be applied retroactively. The New Mexico Supreme Court also ordered this case to be consolidated with another case by the same plaintiffs, to which the Park Hill Defendants had not been parties. The proceedings in the trial court had been stayed pending resolution of Plaintiffs’ appeal. On November 30, 2015, the New Mexico Attorney General filed a motion on behalf of the State of New Mexico seeking wholesale dismissal of these proceedings. On June 6, 2017, the court granted the motion to dismiss brought on behalf of the State of New Mexico, the effect of which dismissed the action against the Park Hill Defendants. On October 5, 2017, Plaintiffs appealed the court’s decision.

~~ITEM 1A.~~

~~RISK FACTORS~~

There were no material changes from the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2022.

The risks described in our Annual Report on Form 10-K for the year ended December 31, ~~2016~~2022 and in our subsequently filed Quarterly Reports on Form ~~10‑Q~~10-Q are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities in the Second Quarter of 2023

Total Number

Approximate Dollar

of Shares

Value of Shares

Purchased as

that May Yet Be

Total Number

Part of Publicly

Purchased Under

of Shares

Average Price

Announced Plans

the Plans or

Repurchased

Paid Per Share

or Programs (a)

Programs (a)

April 1 to April 30

—

107.5 million

May 1 to May 31

507,598

63.29

507,598

75.4 million

June 1 to June 30

84,745

67.76

84,745

69.7 million

Total

592,343

63.93

592,343

69.7 million

~~ITEM 2.~~

~~UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS~~

~~In connection with~~(a)

On April 25, 2022, the ~~issuance during the third quarter~~Company’s Board of ~~2017 of (a) LTIP Units in PJT Partners Holdings LP to~~Directors (the “Board”) authorized a ~~partner~~$200 million repurchase program of the ~~Company and (b)~~Company’s Class A common stock, which is in addition to the ~~transfer by a limited partner~~previous Board authorizations. As of ~~PJT Partners Holdings LP partnership units, PJT Partners Inc. issued four corresponding~~June 30, 2023, the Company’s remaining repurchase authorization was $69.7 million. Under the repurchase program, shares of ~~its~~the Company’s Class BA common stock ~~par value $0.01 per share,~~may be repurchased from time to ~~these limited partners. Shares of Class B common stock have no economic rights but entitle~~time in open market transactions, in privately negotiated transactions or otherwise. The timing and the ~~holder, without regard to the~~actual number of shares repurchased depend on a variety of ~~Class B common stock held, to a number of votes that is equal to the aggregate number of vested~~factors, including legal requirements, price and ~~unvested Partnership Units~~economic and LTIP Units in PJT Partners Holdings LP held by such holder on all matters presented to stockholders of PJT Partners Inc. other than director elections and removals. With respect to the election and removal of directors of PJT Partners Inc., shares of Class B common stock will initially entitle holders to only one vote per share. However, the voting power of Class B common stock with respect to the election and removal of directors of PJT Partners Inc.market conditions. The repurchase program may be ~~increased to up to~~suspended or discontinued at any time and does not have a specified expiration date.

Unregistered Sales/Issuances of Equity Securities and Use of Proceeds

There were no unregistered sales/issuances of equity securities during the ~~number~~second quarter of ~~votes to which~~2023.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

During the three months ended June 30, 2023, none of the Company’s directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934, as amended) adopted, terminated, or modified a ~~holder is then entitled on all other matters presented to stockholders. The issuance~~Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of ~~shares~~Regulation S-K of ~~Class B common stock was not registered under~~ the Securities Act of 1933, ~~because such shares were~~as amended).

In addition, on July 27, 2023, and effective as of that date, the Company filed a Restated Certificate of Incorporation (the “Restated Certificate”) with the Secretary of State of the State of Delaware, integrating prior amendments to the Company’s existing Amended and Restated Certificate of Incorporation (the “Existing Charter”). The Restated Certificate was approved by the Company's Board of Directors in accordance with the DGCL and only restated and integrated, but did not ~~issued~~further amend, the Company’s Existing Charter. The foregoing description of the Company's Restated Certificate is qualified in ~~a transaction involving~~all respects by reference to the ~~offer or sale~~text of ~~securities.~~

~~Dividend Policy~~

~~The Company declared a dividend of $0.05 per share of Class A common stock in~~ the ~~third quarter of 2017 and plans~~Restated Certificate, which is filed as Exhibit 3.1 to ~~regularly pay quarterly dividends.~~

~~Refer to “Part II. Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities” in our Annual~~this Quarterly Report on Form ~~10-K for the year ended December 31, 2016 for further disclosure of the Company’s dividend policy.~~10-Q and incorporated herein by reference.

ITEM 6. EXHIBITS

~~ITEM 3.~~Exhibit

Number

~~DEFAULTS UPON SENIOR SECURITIES~~

~~Not applicable.~~

~~ITEM 4.~~

~~MINE SAFETY DISCLOSURES~~

~~Not applicable.~~

~~ITEM 5.~~

~~OTHER~~ ~~INFORMATION~~

~~Not applicable.~~

~~ITEM 6.~~

~~EXHIBITS~~

~~Exhibit~~ ~~Number~~		Exhibit Description

2.1		Separation and Distribution Agreement by and among The Blackstone Group L.P., Blackstone Holdings I L.P., New Advisory GP L.L.C., PJT Partners Inc. and PJT Partners Holdings LP, dated as of October 1, 2015 (incorporated herein by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K ~~(File No. 001-36869)~~ filed with the Securities and Exchange Commission on October 5, 2015).

3.1		~~Amended and~~ Restated Certificate of Incorporation of PJT Partners Inc. ~~(incorporated herein by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No. 001-36869) filed with the Securities and Exchange Commission on October 5, 2015).~~

~~3.1.1~~ 3.2		Certificate of Designation of Series A Junior Participating Preferred Stock of PJT Partners Inc. (incorporated herein by reference to Exhibit 3.1.1 to the Registrant’s Current Report on Form 8-K (File No. 001-36869) filed with the Securities and Exchange Commission on October 5, 2015).

~~3.2~~		Amended and Restated By-Laws of PJT Partners Inc. (incorporated herein by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K ~~(File No. 001-36869)~~ filed with the Securities and Exchange Commission on October 5, 2015).

~~31.1~~*10.1		Second Amended and Restated PJT Partners Inc. 2015 Omnibus Incentive Plan (incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 25, 2023).

31.1		Certification of the Chief Executive Officer pursuant to Rule 13a-14(a).

31.2		Certification of the Chief Financial Officer pursuant to Rule 13a-14(a).

32.1		Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).

32.2		Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).

101.INS		Inline XBRL Instance ~~Document.~~Document – the instance document does not appear in the Interactive Data File because iXBRL tags are embedded within the Inline XBRL document.

101.SCH		Inline XBRL Taxonomy Extension Schema Document.

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

______________________

* Indicates management or compensation plan or arrangement.

The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.

SIGNATURES

~~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.


Date: ~~November 7, 2017~~July 28, 2023

	PJT Partners Inc.

	By:	/s/ Paul J. Taubman
	Name:	Paul J. Taubman
	Title:	Chief Executive Officer

	By:	/s/ Helen T. Meates
	Name:	Helen T. Meates
	Title:	Chief Financial Officer
		(Principal Financial and Accounting Officer)


Delaware	36-4797143
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)


Large ~~accelerated filer~~Accelerated Filer	☐☒		Accelerated ~~filer~~Filer	☒☐
~~Non-accelerated filer~~Non-Accelerated Filer	☐	~~(Do not check if a smaller reporting company)~~	Smaller ~~reporting company~~Reporting Company	☐
			Emerging ~~growth company~~Growth Company	☒☐

	September 30,			December 31,
	2017			2016			June 30, 2023			December 31, 2022
Assets
Cash and Cash Equivalents	$	102,281		$	152,431		$	151,496		$	173,235
Investments		55,112			—
Accounts Receivable (net of allowance for doubtful accounts of $1,934 and $4,374 at September 30, 2017 and December 31, 2016, respectively)		168,417			227,560
Investments (at fair value)								74,144			50,242
Accounts Receivable (net of allowance for credit losses of $2,977 and $1,945 at June 30, 2023 and December 31, 2022, respectively)								333,059			317,751
Intangible Assets, Net		12,879			14,713			15,420			17,880
Goodwill		72,286			72,286			172,725			172,725
Furniture, Equipment and Leasehold Improvements, Net		35,099			38,155			29,358			30,693
Operating Lease Right-of-Use Assets								110,654			119,025
Other Assets		23,216			14,374			129,327			99,929
Deferred Tax Asset, Net		92,729			70,957			70,919			69,172
Total Assets	$	562,019		$	590,476		$	1,087,102		$	1,050,652
Liabilities, Redeemable Non-Controlling Interests and Equity (Deficit)
Liabilities and Equity
Accrued Compensation and Benefits	$	79,970		$	140,076		$	123,190		$	83,920
Accounts Payable, Accrued Expenses and Other Liabilities		22,789			17,354			25,178			24,782
Deferred Rent Liability		16,789			16,353
Operating Lease Liabilities								126,210			135,627
Amount Due Pursuant to Tax Receivable Agreement		3,840			964			32,244			30,315
Taxes Payable		1,073			1,527			3,844			3,451
Deferred Revenue		433			786			11,245			12,999
Total Liabilities		124,894			177,060			321,911			291,094
Commitments and Contingencies
Redeemable Non-Controlling Interests		574,272			421,976
Equity (Deficit)
Class A Common Stock, par value $0.01 per share (3,000,000,000 shares authorized; 18,585,160 issued and outstanding at September 30, 2017; 18,003,272 issued and outstanding at December 31, 2016)		186			180
Class B Common Stock, par value $0.01 per share (1,000,000 shares authorized; 239 issued and outstanding at September 30, 2017; 271 issued and outstanding at December 31, 2016)		—			—
Equity
Class A Common Stock, par value $0.01 per share (3,000,000,000 shares authorized; 32,251,216 and 31,062,575 issued at June 30, 2023 and December 31, 2022, respectively; 24,220,466 and 24,479,286 outstanding at June 30, 2023 and December 31, 2022, respectively)								322			310
Class B Common Stock, par value $0.01 per share (1,000,000 shares authorized; 140 issued and outstanding at June 30, 2023; 158 issued and outstanding at December 31, 2022)								—			—
Additional Paid-In Capital		10,204			9,145			541,750			502,585
Accumulated Deficit		(147,599	)		(17,946	)
Accumulated Other Comprehensive Income		62			61
Total Equity (Deficit)		(137,147	)		(8,560	)
Total Liabilities, Redeemable Non-Controlling Interests and Equity (Deficit)	$	562,019		$	590,476
Retained Earnings								88,149			60,969
Accumulated Other Comprehensive Loss								(562	)		(2,274	)
Treasury Stock at Cost (8,030,750 and 6,583,289 shares at June 30, 2023 and December 31, 2022, respectively)								(480,552	)		(376,484	)
Total PJT Partners Inc. Equity								149,107			185,106
Non-Controlling Interests								616,084			574,452
Total Equity								765,191			759,558
Total Liabilities and Equity							$	1,087,102		$	1,050,652


	Three Months Ended June 30,					Six Months Ended June 30,
	2023		2022			2023		2022
Net Income	$	41,052	$	35,193		$	69,038	$	79,661
Other Comprehensive Income (Loss), Net of Tax — Currency Translation Adjustment		1,677		(3,659	)		3,065		(5,095	)
Comprehensive Income		42,729		31,534			72,103		74,566
Less:
Comprehensive Income Attributable to Non- Controlling Interests		19,652		14,377			30,914		32,492
Comprehensive Income Attributable to PJT Partners Inc.	$	23,077	$	17,157		$	41,189	$	42,074


	Nine Months Ended September 30,						Six Months Ended June 30,
	2017			2016			2023			2022
Operating Activities
Net Income (Loss)	$	38		$	(13,621	)
Adjustments to Reconcile Net Income (Loss) to Net Cash Provided by Operating Activities
Net Income							$	69,038		$	79,661
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities
Equity-Based Compensation Expense		88,379			65,082			97,996			95,370
Depreciation and Amortization Expense		6,152			11,930			7,040			8,401
Bad Debt Expense		525			2,438
Deferred Taxes		(18,389	)		(2,995	)
Amortization of Operating Lease Right-of-Use Assets								11,871			10,327
Provision for Credit Losses								2,574			1,687
Other		(1,872	)		(255	)		791			4,512
Cash Flows Due to Changes in Operating Assets and Liabilities
Accounts Receivable		62,895			(15,406	)		(16,560	)		(19,871	)
Other Assets		(8,526	)		(3,836	)		(28,976	)		(19,606	)
Accrued Compensation and Benefits		(62,884	)		45,156			38,294			(28,998	)
Accounts Payable, Accrued Expenses and Other Liabilities		5,545			(519	)		(72	)		(2,529	)
Deferred Rent Liability		102			4,823
Operating Lease Liabilities								(12,949	)		(11,268	)
Taxes Payable		(460	)		(495	)		335			(870	)
Deferred Revenue		(365	)		4,687			(1,767	)		660
Net Cash Provided by Operating Activities		71,140			96,989			167,615			117,476
Investing Activities
Proceeds from Repayment of Note Issued to Employee		—			538
Purchases of Investments		(55,173	)		—			(78,845	)		(54,164	)
Proceeds from Sales and Maturities of Investments								54,797			19,979
Purchases of Furniture, Equipment and Leasehold Improvements		(844	)		(12,751	)		(2,874	)		(1,752	)
Change in Restricted Cash		—			778
Net Cash Used in Investing Activities		(56,017	)		(11,435	)		(26,922	)		(35,937	)
Financing Activities
Dividends		(2,849	)		(2,796	)		(12,297	)		(12,366	)
Tax Distributions		(19,125	)		(5,751	)		(12,149	)		(7,310	)
Proceeds from Revolving Credit Facility								15,000			42,000
Payments on Revolving Credit Facility								(15,000	)		(42,000	)
Employee Taxes Paid for Shares Withheld		(4,060	)		(256	)		(16,514	)		(15,387	)
Cash-Settled Exchanges of Partnership Units		(39,364	)		—			(19,443	)		(10,995	)
Principal Payments on Capital Lease Obligations		(72	)		(66	)
Treasury Stock Purchases								(104,068	)		(83,926	)
Payments Pursuant to Tax Receivable Agreement								(29	)		(559	)
Net Cash Used in Financing Activities		(65,470	)		(8,869	)		(164,500	)		(130,543	)
Effect of Exchange Rate Changes on Cash and Cash Equivalents		197			(2,108	)		2,068			(4,158	)
Net Increase (Decrease) in Cash and Cash Equivalents		(50,150	)		74,577
Net Decrease in Cash and Cash Equivalents								(21,739	)		(53,162	)
Cash and Cash Equivalents, Beginning of Period		152,431			82,322			173,235			200,481
Cash and Cash Equivalents, End of Period	$	102,281		$	156,899		$	151,496		$	147,319
Supplemental Disclosure of Cash Flows Information
Payments for Income Taxes, Net of Refunds Received	$	15,392		$	7,195		$	4,569		$	4,770
Supplemental Disclosure of Significant Non-Cash Activities
Non-Cash Contributions from Former Parent	$	—		$	4,061
Payments for Interest							$	20		$	133


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED ~~SEPTEMBER~~JUNE 30, ~~2017~~2023


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


		Page
PART I.	FINANCIAL INFORMATION

ITEM 1.	FINANCIAL STATEMENTS	34

	Unaudited Condensed Consolidated Financial Statements — ~~September~~June 30, ~~2017~~2023 and ~~2016:~~2022:

	Condensed Consolidated Statements of Financial Condition as of ~~September~~June 30, ~~2017~~2023 and December 31, ~~2016~~2022	34

	Condensed Consolidated Statements of Operations for the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2017~~2023 and ~~2016~~2022	45

	Condensed Consolidated Statements of Comprehensive Income ~~(Loss)~~ for the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2017~~2023 and ~~2016~~2022	56

	Condensed Consolidated Statements of Changes in Equity ~~(Deficit)~~ for the ~~Nine~~Three and Six Months Ended ~~September~~June 30, ~~2017~~2023 and ~~2016~~2022	67

	Condensed Consolidated Statements of Cash Flows for the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2017~~2023 and ~~2016~~2022	79

	Notes to Condensed Consolidated Financial Statements	810

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	22

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	31

ITEM 4.	CONTROLS AND PROCEDURES	31

PART II.	OTHER INFORMATION

ITEM 1.	LEGAL PROCEEDINGS	32

ITEM 1A.	RISK FACTORS	3332

ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	33

ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	33

ITEM 4.	MINE SAFETY DISCLOSURES	33

ITEM 5.	OTHER INFORMATION	3433

ITEM 6.	EXHIBITS	34

SIGNATURES		35


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended June 30,					Six Months Ended June 30,
	2017			2016			2017			2016			2023		2022			2023		2022
Revenues
Advisory Fees	$	60,457		$	100,728		$	233,145		$	241,360		$	323,794	$	186,649		$	491,884	$	368,307
Placement Fees		15,907			18,327			68,912			78,930			20,028		49,482			47,613		109,833
Interest Income and Other		2,086			2,291			6,672			5,644			2,455		(2,990	)		6,768		1,320
Total Revenues		78,450			121,346			308,729			325,934			346,277		233,141			546,265		479,460
Expenses
Compensation and Benefits		68,018			95,841			251,258			255,976			246,614		150,587			379,657		309,819
Occupancy and Related		6,746			6,481			19,611			19,521			9,920		8,658			19,931		17,600
Travel and Related		3,369			3,208			9,325			8,755			8,314		7,977			15,286		13,030
Professional Fees		6,374			3,983			15,366			14,170			11,454		7,226			18,381		14,277
Communications and Information Services		2,556			1,970			7,823			6,670			3,761		4,241			7,838		8,664
Depreciation and Amortization		2,038			4,004			6,152			11,930			3,597		4,094			7,040		8,401
Other Expenses		4,963			7,819			14,803			18,394			8,448		6,670			14,770		13,833
Total Expenses		94,064			123,306			324,338			335,416			292,108		189,453			462,903		385,624
Loss Before Provision (Benefit) for Taxes		(15,614	)		(1,960	)		(15,609	)		(9,482	)
Provision (Benefit) for Taxes		(13,258	)		8,376			(15,647	)		4,139
Net Income (Loss)		(2,356	)		(10,336	)		38			(13,621	)
Net Loss Attributable to Redeemable Non-Controlling Interests		(5,699	)		(625	)		(4,853	)		(3,842	)
Net Income (Loss) Attributable to PJT Partners Inc.	$	3,343		$	(9,711	)	$	4,891		$	(9,779	)
Net Income (Loss) Per Share of Class A Common Stock
Income Before Provision for Taxes														54,169		43,688			83,362		93,836
Provision for Taxes														13,117		8,495			14,324		14,175
Net Income														41,052		35,193			69,038		79,661
Net Income Attributable to Non-Controlling Interests														18,911		16,025			29,561		34,789
Net Income Attributable to PJT Partners Inc.													$	22,141	$	19,168		$	39,477	$	44,872
Net Income Per Share of Class A Common Stock
Basic	$	0.17		$	(0.53	)	$	0.25		$	(0.53	)	$	0.88	$	0.76		$	1.56	$	1.79
Diluted	$	0.16		$	(0.53	)	$	0.22		$	(0.53	)	$	0.86	$	0.74		$	1.53	$	1.74
Weighted-Average Shares of Class A Common Stock Outstanding
Basic		18,918,181			18,319,785			18,841,975			18,282,180			25,238,144		25,141,339			25,234,983		25,065,684
Diluted		22,918,655			18,319,785			22,417,842			18,282,180			26,333,261		26,421,087			26,625,890		26,486,899
Dividends Declared Per Share of Class A Common Stock	$	0.05		$	0.05		$	0.15		$	0.15

	Shares															Accumulated						Redeemable
	Class A		Class B			Class A		Class B		Additional						Other						Non-
	Common		Common			Common		Common		Paid-In			Accumulated			Comprehensive						Controlling
	Stock		Stock			Stock		Stock		Capital			Deficit			Income (Loss)			Total			Interests
Balance at December 31, 2015		17,966,456		300		$	180	$	—	$	43,132		$	(11,184	)	$	(48	)	$	32,080		$	309,855
Net Loss		—		—			—		—		—			(9,779	)		—			(9,779	)		(3,842	)
Currency Translation Adjustment		—		—			—		—		—			—			306			306			—
Dividends		—		—			—		—		—			(2,796	)		—			(2,796	)		—
Tax Distributions		—		—			—		—		—			—			—			—			(5,751	)
Non-Cash Contributions from Former Parent		—		—			—		—		4,061			—			—			4,061			—
Equity-Based Compensation		—		—			—		—		36,898			—			—			36,898			28,154
Forfeiture Liability for Equity Awards		—		—			—		—		759			—			—			759			—
Net Share Settlement		—		—			—		—		(220	)		—			—			(220	)		(36	)
Issuance of Shares of Class A Common Stock		36,382		—			—		—		—			—			—			—			—
Issuance of Shares of Class B Common Stock		—		5			—		—		(8,403	)		—			—			(8,403	)		8,403
Forfeitures of Shares of Class B Common Stock		—		(2	)		—		—		1,511			—			—			1,511			(1,511	)
Adjustment of Redeemable Non-Controlling Interests to Redemption Value		—		—			—		—		(56,746	)		—			—			(56,746	)		56,746
Balance at September 30, 2016		18,002,838		303		$	180	$	—	$	20,992		$	(23,759	)	$	258		$	(2,329	)	$	392,018

Balance at December 31, 2016		18,003,272		271		$	180	$	—	$	9,145		$	(17,946	)	$	61		$	(8,560	)	$	421,976
Net Income (Loss)		—		—			—		—		—			4,891			—			4,891			(4,853	)
Currency Translation Adjustment		—		—			—		—		—			—			1			1			4
Dividends		—		—			—		—		—			(2,849	)		—			(2,849	)		—
Tax Distributions		—		—			—		—		—			—			—			—			(19,125	)
Equity-Based Compensation		—		—			—		—		55,781			—			—			55,781			32,598
Forfeiture Liability for Equity Awards		—		—			—		—		177			—			—			177			—
Net Share Settlement		—		—			—		—		(4,025	)		—			—			(4,025	)		(35	)
Deliveries of Vested Shares of Class A Common Stock		581,888		—			6		—		(6	)		—			—			—			—
Issuance of Shares of Class B Common Stock		—		11			—		—		(2,789	)		—			—			(2,789	)		2,789
Forfeitures of Shares of Class B Common Stock		—		(3	)		—		—		1,939			—			—			1,939			(1,939	)
Cash-Settled Exchanges of Partnership Units		—		(40	)		—		—		508			—			—			508			(39,364	)
Adjustment of Redeemable Non-Controlling Interests to Redemption Value		—		—			—		—		(50,526	)		(131,695	)		—			(182,221	)		182,221
Balance at September 30, 2017		18,585,160		239		$	186	$	—	$	10,204		$	(147,599	)	$	62		$	(137,147	)	$	574,272


	Three Months Ended June 30, 2023
	Shares																		Accumulated
	Class A		Class B						Class A		Class B		Additional						Other						Non-
	Common		Common			Treasury			Common		Common		Paid-In			Retained			Comprehensive			Treasury			Controlling
	Stock		Stock			Stock			Stock		Stock		Capital			Earnings			Loss			Stock			Interests			Total
Balance at March 31, 2023		32,238,601		159			(7,438,407	)	$	322	$	—	$	531,034		$	72,076		$	(1,498	)	$	(442,664	)	$	578,879		$	738,149
Net Income		—		—			—			—		—		—			22,141			—			—			18,911			41,052
Other Comprehensive Income		—		—			—			—		—		—			—			936			—			741			1,677
Dividends Declared ($0.25 Per Share of Class A Common Stock)		—		—			—			—		—		—			(6,068	)		—			—			—			(6,068	)
Tax Distributions		—		—			—			—		—		—			—			—			—			(12,149	)		(12,149	)
Equity-Based Compensation		—		—			—			—		—		44,596			—			—			—			4,604			49,200
Net Share Settlement		—		—			—			—		—		(175	)		—			—			—			—			(175	)
Deliveries of Vested Shares of Class A Common Stock		12,615		—			—			—		—		—			—			—			—			—			—
Change in Ownership Interest		—		(19	)		—			—		—		(33,705	)		—			—			—			25,098			(8,607	)
Treasury Stock Purchases		—		—			(592,343	)		—		—		—			—			—			(37,888	)		—			(37,888	)
Balance at June 30, 2023		32,251,216		140			(8,030,750	)	$	322	$	—	$	541,750		$	88,149		$	(562	)	$	(480,552	)	$	616,084		$	765,191


	Six Months Ended June 30, 2023
	Shares																		Accumulated
	Class A		Class B						Class A		Class B		Additional						Other						Non-
	Common		Common			Treasury			Common		Common		Paid-In			Retained			Comprehensive			Treasury			Controlling
	Stock		Stock			Stock			Stock		Stock		Capital			Earnings			Loss			Stock			Interests			Total
Balance at December 31, 2022		31,062,575		158			(6,583,289	)	$	310	$	—	$	502,585		$	60,969		$	(2,274	)	$	(376,484	)	$	574,452		$	759,558
Net Income		—		—			—			—		—		—			39,477			—			—			29,561			69,038
Other Comprehensive Income		—		—			—			—		—		—			—			1,712			—			1,353			3,065
Dividends Declared ($0.50 Per Share of Class A Common Stock)		—		—			—			—		—		—			(12,297	)		—			—			—			(12,297	)
Tax Distributions		—		—			—			—		—		—			—			—			—			(12,149	)		(12,149	)
Equity-Based Compensation		—		—			—			—		—		88,672			—			—			—			9,324			97,996
Net Share Settlement		—		—			—			—		—		(16,514	)		—			—			—			—			(16,514	)
Deliveries of Vested Shares of Class A Common Stock		1,188,641		—			—			12		—		(12	)		—			—			—			—			—
Change in Ownership Interest		—		(18	)		—			—		—		(32,981	)		—			—			—			13,543			(19,438	)
Treasury Stock Purchases		—		—			(1,447,461	)		—		—		—			—			—			(104,068	)		—			(104,068	)
Balance at June 30, 2023		32,251,216		140			(8,030,750	)	$	322	$	—	$	541,750		$	88,149		$	(562	)	$	(480,552	)	$	616,084		$	765,191


	Three Months Ended June 30, 2022
	Shares																		Accumulated
	Class A		Class B						Class A		Class B		Additional						Other						Non-
	Common		Common			Treasury			Common		Common		Paid-In			Retained			Comprehensive			Treasury			Controlling
	Stock		Stock			Stock			Stock		Stock		Capital			Earnings			Loss			Stock			Interests			Total
Balance at March 31, 2022		30,593,822		164			(5,815,973	)	$	305	$	—	$	438,634		$	14,503		$	(156	)	$	(323,569	)	$	525,319		$	655,036
Net Income		—		—			—			—		—		—			19,168			—			—			16,025			35,193
Other Comprehensive Loss		—		—			—			—		—		—			—			(2,011	)		—			(1,648	)		(3,659	)
Dividends Declared ($0.25 Per Share of Class A Common Stock)		—		—			—			—		—		—			(6,098	)		—			—			—			(6,098	)
Tax Distributions		—		—			—			—		—		—			—			—			—			(7,310	)		(7,310	)
Equity-Based Compensation		—		—			—			—		—		30,811			—			—			—			5,490			36,301
Net Share Settlement		—		—			—			—		—		(20	)		—			—			—			—			(20	)
Deliveries of Vested Shares of Class A Common Stock		3,758		—			—			—		—		—			—			—			—			—			—
Change in Ownership Interest		—		(3	)		—			—		—		(23,464	)		—			—			—			19,029			(4,435	)
Treasury Stock Purchases		—		—			(404,076	)		—		—		—			—			—			(27,357	)		—			(27,357	)
Balance at June 30, 2022		30,597,580		161			(6,220,049	)	$	305	$	—	$	445,961		$	27,573		$	(2,167	)	$	(350,926	)	$	556,905		$	677,651


	Six Months Ended June 30, 2022
	Shares																	Accumulated
	Class A		Class B					Class A		Class B		Additional			Retained			Other						Non-
	Common		Common		Treasury			Common		Common		Paid-In			Earnings		��	Comprehensive			Treasury			Controlling
	Stock		Stock		Stock			Stock		Stock		Capital			(Deficit)			Income (Loss)			Stock			Interests			Total
Balance at December 31, 2021		29,248,457		159		(4,929,044	)	$	292	$	—	$	391,242		$	(4,933	)	$	631		$	(267,000	)	$	517,340		$	637,572
Net Income		—		—		—			—		—		—			44,872			—			—			34,789			79,661
Other Comprehensive Loss		—		—		—			—		—		—			—			(2,798	)		—			(2,297	)		(5,095	)
Dividends Declared ($0.50 Per Share of Class A Common Stock)		—		—		—			—		—		—			(12,366	)		—			—			—			(12,366	)
Tax Distributions		—		—		—			—		—		—			—			—			—			(7,310	)		(7,310	)
Equity-Based Compensation		—		—		—			—		—		84,528			—			—			—			10,842			95,370
Net Share Settlement		—		—		—			—		—		(15,387	)		—			—			—			—			(15,387	)
Deliveries of Vested Shares of Class A Common Stock		1,349,123		—		—			13		—		(13	)		—			—			—			—			—
Change in Ownership Interest		—		2		—			—		—		(14,409	)		—			—			—			3,541			(10,868	)
Treasury Stock Purchases		—		—		(1,291,005	)		—		—		—			—			—			(83,926	)		—			(83,926	)
Balance at June 30, 2022		30,597,580		161		(6,220,049	)	$	305	$	—	$	445,961		$	27,573		$	(2,167	)	$	(350,926	)	$	556,905		$	677,651

			Weighted-Average
			Service Period
	Units		in Years
Partnership Units		11,723,249		1.5
Restricted Stock Units		6,538,228		0.9
Total Equity-Based Awards		18,261,477		1.3

	Minimum Lease Payments
Year Ending December 31,	Capital		Operating
2017	$	27	$	5,509
2018		107		22,657
2019		107		22,611
2020		80		21,518
2021		3		22,013
Thereafter		—		113,786
Total Minimum Lease Payments		324		208,094
Less: Amount Representing Interest		12
Capital Lease Obligation	$	312
Less: Sublease Proceeds				18,734
Net Minimum Lease Payments			$	189,360

	Three Months Ended September 30,									Nine Months Ended September 30,
	2017			2016			% Change			2017			2016			% Change
	(Dollars in Thousands)
Revenues
Advisory Fees	$	60,457		$	100,728			(40	%)	$	233,145		$	241,360			(3	%)
Placement Fees		15,907			18,327			(13	%)		68,912			78,930			(13	%)
Interest Income and Other		2,086			2,291			(9	%)		6,672			5,644			18	%
Total Revenues		78,450			121,346			(35	%)		308,729			325,934			(5	%)
Expenses
Compensation and Benefits		68,018			95,841			(29	%)		251,258			255,976			(2	%)
Occupancy and Related		6,746			6,481			4	%		19,611			19,521			0	%
Travel and Related		3,369			3,208			5	%		9,325			8,755			7	%
Professional Fees		6,374			3,983			60	%		15,366			14,170			8	%
Communications and Information Services		2,556			1,970			30	%		7,823			6,670			17	%
Depreciation and Amortization		2,038			4,004			(49	%)		6,152			11,930			(48	%)
Other Expenses		4,963			7,819			(37	%)		14,803			18,394			(20	%)
Total Expenses		94,064			123,306			(24	%)		324,338			335,416			(3	%)
Loss Before Provision (Benefit) for Taxes		(15,614	)		(1,960	)		697	%		(15,609	)		(9,482	)		65	%
Provision (Benefit) for Taxes		(13,258	)		8,376		N/M				(15,647	)		4,139		N/M
Net Income (Loss)		(2,356	)		(10,336	)		(77	%)		38			(13,621	)	N/M
Net Loss Attributable to Redeemable Non-Controlling Interests		(5,699	)		(625	)		812	%		(4,853	)		(3,842	)		26	%
Net Income (Loss) Attributable to PJT Partners Inc.	$	3,343		$	(9,711	)	N/M			$	4,891		$	(9,779	)	N/M

	October 1, 2017 to
Contractual Obligations	December 31, 2017		2018–2019		2020–2021		Thereafter		Total
	(Dollars in Thousands)
Operating Lease Obligations (a)	$	4,679	$	38,015	$	37,586	$	109,080	$	189,360
Capital Leases (including interest)		27		214		83		—		324
Purchase Obligations		1,274		7,025		3,222		—		11,521
Tax Benefit Liability (b)		4,096		3,074		—		—		7,170
Amount Due Pursuant to Tax Receivable Agreement (c)		11		439		512		2,878		3,840
Contractual Obligations	$	10,087	$	48,767	$	41,403	$	111,958	$	212,215