Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically ~~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,~~April 27, 2020, there were ~~18,595,394~~24,074,927 shares of Class A common stock, par value $0.01 per share, and ~~240~~210 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”~~“spin-off.” In October 2018, we acquired CamberView Partners Holdings, LLC (“CamberView” or ~~the “acquisition.”~~“PJT CamberView”). 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 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~~include, among others, the following: (a) changes in governmental regulations and policies; (b) the possibility of cyberattacks, security vulnerabilities, and internet disruptions, including breaches of data security and privacy leaks, data loss, and business interruptions; (c) the possibility of failure of our computer systems or communication systems during a catastrophic event, including the outbreak of COVID-19; (d) the impact of catastrophic events, such as COVID-19, on the U.S. and the global economy, including business disruptions, reductions in employment and an increase in business failures; (e) the impact of catastrophic events, such as COVID-19, on our employees and our ability to ~~publicly update or review any forward-looking statement, whether~~provide services to our clients and respond to their needs; (f) the failure of third-party service providers to perform their functions; and (g) volatility in the political and economic environment.

Any of these factors, as ~~a result of new information, future developments or otherwise.~~

~~The risk~~well as such other factors discussed in the “Risk Factors” ~~section~~sections of this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, ~~2016,~~2019, 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 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. 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.

	September 30,			December 31,			March 31,			December 31,
	2017			2016			2020			2019
Assets
Cash and Cash Equivalents	$	102,281		$	152,431		$	88,344		$	215,950
Investments		55,112			—			24,354			1,543
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
Accounts Receivable (net of allowance for credit losses of $1,410 and $0 at March 31, 2020 and December 31, 2019, respectively)								245,746			227,516
Intangible Assets, Net		12,879			14,713			37,879			39,806
Goodwill		72,286			72,286			172,725			172,725
Furniture, Equipment and Leasehold Improvements, Net		35,099			38,155			39,946			37,123
Operating Lease Right-of-Use Assets								158,359			166,519
Other Assets		23,216			14,374			61,372			43,358
Deferred Tax Asset, Net		92,729			70,957			49,986			48,237
Total Assets	$	562,019		$	590,476		$	878,711		$	952,777
Liabilities, Redeemable Non-Controlling Interests and Equity (Deficit)
Liabilities and Equity
Accrued Compensation and Benefits	$	79,970		$	140,076		$	63,275		$	120,750
Accounts Payable, Accrued Expenses and Other Liabilities		22,789			17,354			18,822			24,767
Deferred Rent Liability		16,789			16,353
Operating Lease Liabilities								175,552			182,924
Amount Due Pursuant to Tax Receivable Agreement		3,840			964			10,363			9,289
Taxes Payable		1,073			1,527			7,685			4,841
Deferred Revenue		433			786			12,701			14,189
Loan Payable								—			21,500
Total Liabilities		124,894			177,060			288,398			378,260
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; 27,158,722 and 25,621,451 issued at March 31, 2020 and December 31, 2019, respectively; 24,074,768 and 23,076,794 outstanding at March 31, 2020 and December 31, 2019, respectively)								266			251
Class B Common Stock, par value $0.01 per share (1,000,000 shares authorized; 210 issued and outstanding at March 31, 2020; 204 issued and outstanding at December 31, 2019)								—			—
Additional Paid-In Capital		10,204			9,145			349,932			290,896
Accumulated Deficit		(147,599	)		(17,946	)		(128,214	)		(144,919	)
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
Accumulated Other Comprehensive Income (Loss)								(1,334	)		146
Treasury Stock at Cost (3,083,954 and 2,544,657 shares at March 31, 2020 and December 31, 2019, respectively)								(140,178	)		(114,984	)
Total PJT Partners Inc. Equity								80,472			31,390
Non-Controlling Interests								509,841			543,127
Total Equity								590,313			574,517
Total Liabilities and Equity							$	878,711		$	952,777

	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
	2017			2016			2017			2016			2020		2019
Revenues
Advisory Fees	$	60,457		$	100,728		$	233,145		$	241,360		$	156,591	$	104,467
Placement Fees		15,907			18,327			68,912			78,930			38,992		23,312
Interest Income and Other		2,086			2,291			6,672			5,644			4,588		277
Total Revenues		78,450			121,346			308,729			325,934			200,171		128,056
Expenses
Compensation and Benefits		68,018			95,841			251,258			255,976			134,024		95,151
Occupancy and Related		6,746			6,481			19,611			19,521			8,654		7,136
Travel and Related		3,369			3,208			9,325			8,755			5,296		6,959
Professional Fees		6,374			3,983			15,366			14,170			4,523		5,802
Communications and Information Services		2,556			1,970			7,823			6,670			3,546		3,213
Depreciation and Amortization		2,038			4,004			6,152			11,930			3,820		3,620
Other Expenses		4,963			7,819			14,803			18,394			6,749		6,262
Total Expenses		94,064			123,306			324,338			335,416			166,612		128,143
Loss Before Provision (Benefit) for Taxes		(15,614	)		(1,960	)		(15,609	)		(9,482	)
Income (Loss) Before Provision (Benefit) for Taxes														33,559		(87	)
Provision (Benefit) for Taxes		(13,258	)		8,376			(15,647	)		4,139			1,550		(1,024	)
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
Net Income														32,009		937
Net Income (Loss) Attributable to Non-Controlling Interests														13,149		(164	)
Net Income Attributable to PJT Partners Inc.													$	18,860	$	1,101
Net Income Per Share of Class A Common Stock
Basic	$	0.17		$	(0.53	)	$	0.25		$	(0.53	)	$	0.78	$	0.05
Diluted	$	0.16		$	(0.53	)	$	0.22		$	(0.53	)	$	0.72	$	0.04
Weighted-Average Shares of Class A Common Stock Outstanding
Basic		18,918,181			18,319,785			18,841,975			18,282,180			24,097,715		23,760,876
Diluted		22,918,655			18,319,785			22,417,842			18,282,180			40,353,624		40,019,889
Dividends Declared Per Share of Class A Common Stock	$	0.05		$	0.05		$	0.15		$	0.15

	Shares																	Accumulated
	Class A		Class B					Class A		Class B		Additional						Other						Non-
	Common		Common		Treasury			Common		Common		Paid-In			Accumulated			Comprehensive			Treasury			Controlling
	Stock		Stock		Stock			Stock		Stock		Capital			Deficit			Income (Loss)			Stock			Interests			Total
Balance at December 31, 2018		23,940,185		199		(1,353,398	)	$	240	$	—	$	210,939		$	(169,836	)	$	(627	)	$	(67,172	)	$	514,205		$	487,749
Net Income (Loss)		—		—		—			—		—		—			1,101			—			—			(164	)		937
Other Comprehensive Income		—		—		—			—		—		—			—			660			—			601			1,261
Dividends Declared ($0.05 Per Share of Class A Common Stock)		—		—		—			—		—		—			(1,188	)		—			—			—			(1,188	)
Equity-Based Compensation		—		—		—			—		—		23,884			—			—			—			11,089			34,973
Forfeiture Liability for Equity Awards		—		—		—			—		—		6			—			—			—			—			6
Net Share Settlement		—		—		—			—		—		(8,604	)		—			—			—			—			(8,604	)
Deliveries of Vested Shares of Class A Common Stock		1,088,396		—		—			11		—		(11	)		—			—			—			—			—
Acquisition-Related Equity Issuance		49,764		—		—			—		—		1,889			—			—			—			398			2,287
Change in Ownership Interest		—		1		—			—		—		53,377			—			—			—			(62,642	)		(9,265	)
Balance at March 31, 2019		25,078,345		200		(1,353,398	)	$	251	$	—	$	281,480		$	(169,923	)	$	33		$	(67,172	)	$	463,487		$	508,156

	Shares																	Accumulated
	Class A		Class B					Class A		Class B		Additional						Other						Non-
	Common		Common		Treasury			Common		Common		Paid-In			Accumulated			Comprehensive			Treasury			Controlling
	Stock		Stock		Stock			Stock		Stock		Capital			Deficit			Income (Loss)			Stock			Interests			Total
Balance at December 31, 2019		25,621,451		204		(2,544,657	)	$	251	$	—	$	290,896		$	(144,919	)	$	146		$	(114,984	)	$	543,127		$	574,517
Adoption of Accounting Standard		—		—		—			—		—		—			(938	)		—			—			—			(938	)
Net Income		—		—		—			—		—		—			18,860			—			—			13,149			32,009
Other Comprehensive Loss		—		—		—			—		—		—			—			(1,480	)		—			(1,302	)		(2,782	)
Dividends Declared ($0.05 Per Share of Class A Common Stock)		—		—		—			—		—		—			(1,217	)		—			—			—			(1,217	)
Equity-Based Compensation		—		—		—			—		—		35,043			—			—			—			2,289			37,332
Forfeiture Liability for Equity Awards		—		—		—			—		—		1			—			—			—			—			1
Net Share Settlement		—		—		—			—		—		(12,124	)		—			—			—			—			(12,124	)
Deliveries of Vested Shares of Class A Common Stock		1,537,271		—		—			15		—		(15	)		—			—			—			—			—
Change in Ownership Interest		—		6		—			—		—		36,131			—			—			—			(47,422	)		(11,291	)
Treasury Stock Purchases		—		—		(539,297	)		—		—		—			—			—			(25,194	)		—			(25,194	)
Balance at March 31, 2020		27,158,722		210		(3,083,954	)	$	266	$	—	$	349,932		$	(128,214	)	$	(1,334	)	$	(140,178	)	$	509,841		$	590,313

	Three Months Ended March 31,
	2020			2019
Operating Activities
Net Income	$	32,009		$	937
Adjustments to Reconcile Net Income to Net Cash Used in Operating Activities
Equity-Based Compensation Expense		37,332			34,973
Depreciation and Amortization Expense		3,820			3,620
Amortization of Operating Lease Right-of-Use Assets		5,193			3,632
Provision for Credit Losses		997			286
Deferred Taxes		(92	)		(1,438	)
Other		279			489
Cash Flows Due to Changes in Operating Assets and Liabilities
Accounts Receivable		(21,982	)		13,858
Other Assets		(18,319	)		(19,998	)
Accrued Compensation and Benefits		(55,645	)		(63,913	)
Accounts Payable, Accrued Expenses and Other Liabilities		(5,957	)		(3,043	)
Operating Lease Liabilities		(4,118	)		(5,137	)
Taxes Payable		2,838			(3,855	)
Deferred Revenue		(1,414	)		(329	)
Net Cash Used in Operating Activities		(25,059	)		(39,918	)
Investing Activities
Purchases of Investments		(23,918	)		—
Proceeds from Sales and Maturities of Investments		1,324			—
Purchases of Furniture, Equipment and Leasehold Improvements		(5,364	)		(1,561	)
Settlement of Acquisition-Related Escrow		—			7,485
Net Cash Provided by (Used in) Investing Activities		(27,958	)		5,924
Financing Activities
Dividends		(1,217	)		(1,188	)
Proceeds from Revolving Credit Facility		16,000			15,000
Payments on Revolving Credit Facility		(16,000	)		(15,000	)
Principal Payments on Term Loan		(21,500	)		—
Employee Taxes Paid for Shares Withheld		(12,124	)		(8,604	)
Cash-Settled Exchanges of Partnership Units		(11,480	)		(9,437	)
Treasury Stock Purchases		(25,194	)		—
Payments Pursuant to Tax Receivable Agreement		—			(210	)
Principal Payments on Finance Leases		(39	)		(40	)
Net Cash Used in Financing Activities		(71,554	)		(19,479	)
Effect of Exchange Rate Changes on Cash and Cash Equivalents		(3,035	)		1,710
Net Decrease in Cash and Cash Equivalents		(127,606	)		(51,763	)
Cash and Cash Equivalents, Beginning of Period		215,950			106,110
Cash and Cash Equivalents, End of Period	$	88,344		$	54,347
Supplemental Disclosure of Cash Flows Information
Payments for Income Taxes, Net of Refunds Received	$	2,407		$	4,253
Payments for Interest	$	109		$	475

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

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

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

Nine Months Ended September 30,

2017

2016

Operating Activities

Net Income (Loss)

$
38

$
(13,621
)
Adjustments to Reconcile Net Income (Loss) to Net Cash Provided by
Operating Activities

Equity-Based Compensation Expense

88,379

65,082

Depreciation and Amortization Expense

6,152

11,930

Bad Debt Expense

525

2,438

Deferred Taxes

(18,389
)

(2,995
)
Other

(1,872
)

(255
)
Cash Flows Due to Changes in Operating Assets and Liabilities

Accounts Receivable

62,895

(15,406
)
Other Assets

(8,526
)

(3,836
)
Accrued Compensation and Benefits

(62,884
)

45,156

Accounts Payable, Accrued Expenses and Other Liabilities

5,545

(519
)
Deferred Rent Liability

102

4,823

Taxes Payable

(460
)

(495
)
Deferred Revenue

(365
)

4,687

Net Cash Provided by Operating Activities

71,140

96,989

Investing Activities

Proceeds from Repayment of Note Issued to Employee

—

538

Purchases of Investments

(55,173
)

—

Purchases of Furniture, Equipment and Leasehold Improvements

(844
)

(12,751
)
Change in Restricted Cash

—

778

Net Cash Used in Investing Activities

(56,017
)

(11,435
)
Financing Activities

Dividends

(2,849
)

(2,796
)
Tax Distributions

(19,125
)

(5,751
)
Employee Taxes Paid for Shares Withheld

(4,060
)

(256
)
Cash-Settled Exchanges of Partnership Units

(39,364
)

—

Principal Payments on Capital Lease Obligations

(72
)

(66
)
Net Cash Used in Financing Activities

(65,470
)

(8,869
)
Effect of Exchange Rate Changes on Cash and Cash Equivalents

197

(2,108
)
Net Increase (Decrease) in Cash and Cash Equivalents

(50,150
)

74,577

Cash and Cash Equivalents, Beginning of Period

152,431

82,322

Cash and Cash Equivalents, End of Period

$
102,281

$
156,899

Supplemental Disclosure of Cash Flows Information

Payments for Income Taxes, Net of Refunds Received

$
15,392

$
7,195

Supplemental Disclosure of Significant Non-Cash Activities

Non-Cash Contributions from Former Parent

$
—

$
4,061

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

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

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% of the economic interest in PJT Partners Holdings LP, but has 100% of the voting power and controls the management of PJT Partners Holdings LP. As of ~~September 30, 2017,~~March 31, 2020, the non-controlling interest was ~~44.1%~~39.2%. 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 and PJT Partners (HK) Limited.

The spin-off, including the consummation of the acquisition of PJT Capital and the Distribution is described in Note 3. “Reorganization and Spin-off” and information regarding the Class A and Class B common stock issued in connection with the spin-off and Redeemable Non-Controlling Interests is described in Note 11. “Stockholders’ Equity (Deficit)” in the “Notes to Consolidated and Combined 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, 2016.

The Company prepared the accompanying condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q. The condensed consolidated financial statements, including these notes, are unaudited and exclude some of the disclosures required in annual financial statements. Management believes it has made all necessary adjustments (consisting of only normal recurring items) so that the condensed consolidated financial statements are presented fairly and that estimates made in preparing its condensed consolidated financial statements are reasonable and prudent. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. These condensed consolidated financial statements should be read in conjunction with the audited consolidated ~~and combined~~ financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2019.

Given the uncertainty of the COVID-19 pandemic and resulting economic impact, estimates may need to be revised in the future, which could materially impact the Company’s future results of operations and/or financial condition.

~~For a comprehensive disclosure~~During the second quarter of 2019, an adjustment was identified relating to the ~~Company’s significant accounting policies, see Note 2. “Summary~~presentation of ~~Significant Accounting Policies” in the “Notes to Consolidated and Combined Financial Statements” in “Part II. Item 8. Financial Statements and Supplementary Data”~~changes in the Company’s ~~Annual Report on Form 10-K for the year ended December 31, 2016.~~

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

~~(All Dollars Are~~Holdings LP, which resulted in ~~Thousands, Except Share~~a reclassification between Additional Paid-In Capital and ~~Per Share Data, Except Where Noted)~~

In June 2014, the Financial Accounting Standards Board (“FASB”) issued amended guidance on revenue from contracts with customers. The guidance requires that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an 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) determine 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 are required about assets recognized from the costs to obtain or fulfill a contract. 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 December 31, 2017, with early adoption permitted for annual periods beginning after December 15, 2016. 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 and the AICPA’s Financial Reporting Executive Committee (FinREC) in order to conclude on the revenue recognition pattern of advisory fees and the correspondingNon-Controlling Interests. This immaterial correction had no 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 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~~Operations and Statements of Cash Flows. The adjustment increased Additional Paid-In Capital by $169.2 million as ~~a right-of-use asset~~of March 31, 2019, with a corresponding ~~liability. The Company’s lease commitments, as discussed in Note 11. “Commitments~~decrease to Non-Controlling Interests. In accordance with Accounting Standards Codification (“ASC”) Topic 250, Accounting Changes and ~~Contingencies—Commitments, Leases,” primarily relate to office space. The lease-related assets will be amortized to expense over~~Error Corrections, the ~~life of~~Company evaluated 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~~materiality of this ~~guidance will have on its consolidated financial statements.~~

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.adjustment from both quantitative

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

and qualitative perspectives, and concluded that it was immaterial to the prior periods. Consequently, the Company revised the historical condensed consolidated financial information presented herein.

For a comprehensive disclosure of the Company’s significant accounting policies, see Note 2. “Summary of Significant Accounting Policies” 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, 2019.

Certain prior year amounts have been reclassified to conform to the current year presentation.

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 primarily held at three major U.S. financial institutions. Also included in Cash and Cash Equivalents are amounts held in bank accounts that are subject to advance notification to withdraw. Such amounts totaled $15.8 million and $16.8 million as of March 31, 2020 and December 31, 2019, respectively.

Treasury securities with original maturities greater than three months when purchased are classified as Investments in the Condensed Consolidated Statements of Financial Condition. These securities are recorded at fair value using broker quotes, reflecting inputs from auction yields.

In ~~November~~June 2016, the Financial Accounting Standards Board (“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 current expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates, which primarily impacts the Company’s allowance for credit losses on accounts receivable balances.

The Company adopted this guidance using the modified retrospective method as of January 1, 2020. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods.

The impact of adoption of the credit loss guidance on January 1, 2020 was as follows:

In August 2018, the FASB issued updated guidance on the accounting for implementation costs incurred in a cloud computing arrangement. The updated guidance requires the capitalization of the implementation costs incurred in a cloud computing arrangement to be aligned with the requirements for capitalizing costs incurred to develop or obtain internal-use software. The Company adopted this guidance on January 1, 2020 for cloud computing arrangements on a prospective basis.

In August 2018, the FASB issued updated guidance that modifies the disclosure requirements on fair value measurements. The updated guidance removes and modifies various disclosures under current guidance and includes additional requirements. The Company adopted this guidance on January 1, 2020 with no material impact on its condensed consolidated financial statements.

In December 2019, the FASB issued guidance that ~~requires~~modifies the accounting for income taxes. The guidance provides clarification on multiple topics, including hybrid tax regimes, the tax basis step-up in goodwill that is not classified as a ~~statement~~business combination, separate financial statements of ~~cash flows explain the change during the~~legal entities not subject to tax, intraperiod tax allocation, ownership changes in investments, interim period accounting for enacted changes in ~~the total of cash, cash equivalents~~tax law 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.year-to-date loss limitations in interim period tax accounting. The ~~new~~ guidance is effective for ~~interim~~annual and ~~annual~~interim periods beginning after December 15, ~~2017 and~~2020, with early adoption is permitted. ~~Adoption requires a retrospective approach.~~ The Company is currently assessing the impact of the adoption of this guidance, but does not expect that adoption of this guidance on January 1, 2018 will have a material impact on its Consolidated Statements of Cash Flows.

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 condensed consolidated financial statements.

The following table provides a disaggregation of revenues recognized from contracts with customers for the ~~FASB issued guidance intended to simplify how an entity is required to test goodwill for impairment by eliminating Step 2~~three months ended March 31, 2020 and 2019:

As of March 31, 2020, 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~~aggregate amount of ~~that goodwill.~~ ~~This new guidance becomes effective~~the transaction price allocated to performance obligations yet to be satisfied is $15.2 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 capital advisory services and standing ready to perform.

The Company recognized revenue of $5.8 million and $4.6 million for the three months ended March 31, 2020 and 2019, 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 capital advisory services. The majority of Advisory Fees and Placement Fees recognized by the Company during the three months ended March 31, 2020 and 2019 was predominantly related to performance obligations that were partially satisfied in ~~its annual or any interim goodwill impairment tests~~prior periods.

There were no significant impairments related to contract balances during the three months ended March 31, 2020 and 2019.

For the three months ended March 31, 2020 and 2019, $8.1 million and $5.1 million, respectively, of revenue was recognized that was included in ~~fiscal years~~the beginning ~~after~~balance of Deferred Revenue, primarily related to the Company’s performance obligation of standing ready to perform. In certain contracts, the Company receives customer deposits, which are also considered to be contract liabilities. As of March 31, 2020 and December ~~15,~~31, 2019, the Company recorded $2.3 million 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~~$2.2 million, respectively, of ~~this guidance will not have a material impact on its consolidated financial statements.~~customer deposits in Accounts Payable, Accrued Expenses and Other Liabilities in the Condensed Consolidated Statements of Financial Condition.

The Company adopted the new credit losses guidance as of January 1, 2020, which is further discussed in Note 2. “Summary of Significant Accounting Policies—Recent Accounting Developments.”

The Company estimates the allowance for credit losses using relevant available information from internal and external sources relating to past events, current conditions and reasonable and supportable forecasts. Historical

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

credit loss experience, including write-offs and recoveries that have occurred during the period, provides the basis for the estimation of expected credit losses.

The allowance for credit losses is measured on a collective basis when similar risk characteristics exist in the Company’s accounts receivable. The Company has classified its accounts receivable into short-term and long-term receivables, both of which relate to revenues from contracts with customers, in estimating the allowance for credit losses. Short-term receivables generally have payment terms less than one year and share similar historical credit loss patterns including write-offs and recoveries. These receivables arise from the Company’s performance obligation of standing ready to perform. Long-term receivables are generally paid in installments over a period of three to four years. These receivables share similar historical credit loss patterns including write-offs and recoveries, and arise from the Company’s performance obligation of providing capital advisory services.

The Company measures the allowance for credit losses using the loss-rate method by multiplying the historical loss rate by the asset’s amortized cost (including accrued interest) at the balance sheet date. The historical loss rate is derived from the Company’s historical loss experience over the prior three year period.

The Company reduces both the gross receivable and the allowance for credit losses in the period in which the receivable(s) are deemed uncollectible. The Company considers a receivable to be uncollectible at the point when all efforts at collection have been exhausted. A recovery may occur if cash is received after a receivable balance has been written-off. Such recovery would be recorded as an increase to the allowance at the time of the recovery.

The following table presents the aggregate change in the allowance for credit losses for the three months ended March 31, 2020:

Included in Accounts Receivable is accrued interest of $2.7 million and $3.1 million as of March 31, 2020 and December 31, 2019, respectively, related to placement fees.

Included in Accounts Receivable, Net are long-term receivables of ~~$65.3~~$77.4 million and ~~$73.1~~$77.6 million as of ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016,~~2019, 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.

The Company does not have any long-term receivables on non-accrual status. ~~Long-term~~Of receivables that originated as long-term, there were $9.5 million and $11.3 million as of March 31, 2020 and December 31, 2019, respectively, which were outstanding more than 90 ~~days past due as~~days. As of ~~September 30, 2017 and December~~March 31, ~~2016 were $1.0 million and $2.7 million, respectively.~~

~~There was no~~2020, the Company’s allowance for ~~doubtful accounts~~credit losses with respect to long-term receivables was $0.5 million. There was 0 allowance for credit losses with respect to such receivables as of ~~September 30, 2017 or~~ December 31, ~~2016.~~2019.

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

Amortization expense was ~~$0.6~~$1.9 million and ~~$1.8~~$2.0 million for the three ~~and nine~~ months ended ~~September 30, 2017, respectively,~~March 31, 2020 and ~~$2.6 million and $8.2 million for the three and nine months ended September 30, 2016,~~2019, respectively.

Amortization of ~~intangible assets~~Intangible Assets held at ~~September 30, 2017~~March 31, 2020 is expected to be ~~$2.4~~$5.8 million for the remainder of the year ending December 31, 2020; $7.7 million for the year ending December 31, ~~2017~~2021; $6.5 million for the year ending December 31, 2022 and ~~$2.3~~$4.9 million for each of the years ending December 31, ~~2018, 2019, 2020~~2023 and ~~2021.~~2024.

Depreciation expense was ~~$1.5~~$1.9 million and ~~$4.3~~$1.6 million for the three ~~and nine~~ months ended ~~September 30, 2017, respectively,~~March 31, 2020 and ~~$1.4 million and $3.7 million for the three and nine months ended September 30, 2016,~~2019, respectively.

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

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 Investments at March 31, 2020 and in both Cash and Cash Equivalents and Investments at December 31, 2019 in the Condensed Consolidated Statements of Financial Condition. ~~U.S. Treasury securities with original maturities~~The carrying value of ~~greater than 90 days are included in Investments in~~ the loan payable approximates fair value based on Level II inputs.

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

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

The Company’s effective tax rate ~~was 84.9% and 100.2%~~differed from the U.S. federal statutory tax rate for the three ~~and nine~~ months ended ~~September 30, 2017, respectively,~~March 31, 2020 due to corporate entities subject to U.S. federal, state, local and ~~-427.3%~~foreign income taxes, to non-corporate entities that are subject to New York City Unincorporated Business Tax, to certain compensation charges that are not deductible for income tax purposes and ~~-43.7%~~the impact of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”).

On March 27, 2020, the President of the United States signed the CARES Act into law, which includes several provisions for corporations regarding the tax treatment of net operating losses, interest deductionsand payroll benefits. The Company has elected to carryback certain net operating losses, which resulted in a $3.7 million decrease in the Company’s Provision for Income Taxes for the three ~~and nine~~ months ended ~~September 30, 2016, respectively. The Company’s~~March 31, 2020.

Basic and diluted net income ~~tax benefit was $13.3 million and $15.6 million~~per share of Class A common stock for the three ~~and nine~~ months ended ~~September 30, 2017, respectively,~~March 31, 2020 and ~~income tax provision was $8.4 million and $4.1 million for the three and nine months ended September 30, 2016, respectively.~~2019 is presented below:

(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 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 Unincorporated Business Tax 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~~ownership interests of holders (other than PJT Partners Inc.) 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.

~~Basic and diluted net income (loss) per share of Class A~~ common ~~stock for the three and nine months ended September 30, 2017 and 2016 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
)

~~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 and 33,930,510~~39,775,315 for the three ~~and nine~~ months ended ~~September 30, 2017, respectively,~~March 31, 2020, excluding unvested ~~RSUs~~restricted stock units (“RSUs”) and participating 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

~~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 months ended September 30, 2017 and 2016, such exchange is not reflected in diluted net income (loss) per share as the assumed exchange is anti-dilutive.~~

The following table summarizes the anti-dilutive securities for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2020 and ~~2016, respectively, which have been excluded from the calculation of net income (loss) per share of Class A common stock:~~2019:

On ~~October 26, 2017,~~April 24, 2019, the Company’s Board of Directors authorized the repurchase of ~~up to $100 million of~~ shares of the Company’s Class A common ~~stock.~~stock in an amount up to $100 million. Under ~~this~~the 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.

During the three months ended March 31, 2020, the Company repurchased 539,297 shares of Class A common stock at an average price of $46.71, or $25.2 million in aggregate, pursuant to the share repurchase program. As of March 31, 2020, the available amount remaining for repurchases under this program was $59.9 million.

Further information regarding the Company’s equity-based compensation awards ~~granted in connection with the spin-off~~ is described in Note ~~10.~~11. “Equity-Based and Other Deferred Compensation” in the “Notes to Consolidated ~~and Combined~~ 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, ~~2016.~~

On October 1, 2015, the Company adopted the PJT Partners Inc. 2015 Omnibus Incentive Plan (the “PJT Equity Plan”) 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 Company has initially authorized 12.2 million shares of Class A common stock for issuance under the PJT Equity Plan.2019.

The following table represents equity-based compensation expense and related income tax benefit for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2020 and ~~2016,~~2019, respectively:

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

Pursuant 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 30, 2017~~March 31, 2020 and offor changes during the ~~period January 1, 2017 through September 30, 2017~~three months ended March 31, 2020 is presented below:

	Restricted Stock Units										Restricted Stock Units
	PJT Partners Inc.					PJT Partners Holdings LP					PJT Partners Inc.					PJT Partners Holdings LP
				Weighted-					Weighted-					Weighted-				Weighted-
				Average					Average					Average				Average
				Grant Date		Number of			Grant Date					Grant Date				Grant Date
	Number of			Fair Value		Partnership			Fair Value		Number of			Fair Value		Number of		Fair Value
	Units			(in dollars)		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, 2019												4,137,595		$	44.84		18,302	$	41.57
Granted		1,459,754			36.74		—			—		2,405,781			52.61		—		—
Vested		(724,330	)		22.88		(199,689	)		18.02		(1,805,161	)		42.51		—		—
Forfeited		(56,365	)		22.81		—			—		(14,107	)		47.93		—		—
Dividends Reinvested on Participating RSUs		7,831			33.52		—			—
Balance, September 30, 2017		6,463,004		$	24.98		244,000		$	31.76
Dividends Reinvested on RSUs												10,009			47.61		—		—
Balance, March 31, 2020												4,734,117		$	49.67		18,302	$	41.57

As of ~~September 30, 2017,~~March 31, 2020, there was ~~$70.1~~$173.4 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~~1.6 years. The Company assumes a forfeiture rate of 1.0% to 9.0% annually based on expected turnover and periodically reassesses this rate.

~~In connection~~RSU Awards 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~~Both Service 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.Market Conditions

A summary of the status of the Company’s unvested ~~Partnership Units~~RSUs with both a service and market condition as of ~~September 30, 2017~~December 31, 2019 and ~~of changes during the period January 1, 2017 through September 30, 2017~~March 31, 2020 is presented below:

As of ~~September 30, 2017,~~March 31, 2020, there was ~~$61.4~~$3.8 million of estimated unrecognized compensation expense related to ~~unvested Partnership Units. The Company assumes~~RSU awards with both a ~~forfeiture rate of 4.0% annually based on expected turnover~~service and ~~periodically reassesses this rate.~~market condition. This cost is expected to be recognized over a weighted-average period of ~~1.4~~2.5 years. The Company assumes a forfeiture rate of 4.0% to 9.0% annually based on expected turnover and periodically reassesses this rate.

In connection with the acquisition of CamberView Partners Holdings, LLC, certain individuals were issued restricted shares of the Company’s Class A common stock. Based on the terms of the award, compensation expense will be recognized over four years. For the three months ended March 31, 2020, 0 restricted share awards were granted. For the three months ended March 31, 2019, 3,591 restricted share awards were granted. As of March 31, 2020, 0 restricted shares have vested or have been forfeited and there was $0.2 million of estimated unrecognized compensation expense related to restricted share awards. This cost is expected to be recognized over a weighted-average period of 1.5 years.

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

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.Partnership Units

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~~Partnership Units as of ~~September 30, 2017~~March 31, 2020 and offor changes during the ~~period January 1, 2017 through September 30, 2017~~three months ended March 31, 2020 is presented below:

As of ~~September 30, 2017,~~March 31, 2020, there was ~~$16.9~~$14.2 million of estimated unrecognized compensation expense related to ~~equity-based awards with both~~unvested Partnership Units. This cost is expected to be recognized over a ~~service and market condition.~~weighted-average period of 1.5 years. The Company assumes a forfeiture rate of 4.0% annually based on expected turnover and periodically reassesses this rate. ~~This cost~~

A summary of the status of the Company’s unvested Partnership Unit awards with both a service and market condition as of March 31, 2020 and for changes during the three months ended March 31, 2020 is ~~expected~~presented below:

As of March 31, 2020, there was 0 unrecognized compensation expense related to ~~be recognized over~~Partnership Unit awards with both a ~~weighted-average period of 1.7 years.~~service and market condition.

The following unvested units, after expected forfeitures, as of ~~September 30, 2017,~~March 31, 2020, are expected to vest:

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

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 $7.7 million and $6.7 million for the three months ended March 31, 2020 and 2019, respectively. As of March 31, 2020, there was $58.3 million of unrecognized compensation expense related to these awards. The weighted-average period over which this compensation cost is expected to be recognized is 2.1 years.

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

The following is a maturity analysis of the annual undiscounted cash flows of the finance and operating lease liabilities as of March 31, 2020:

In October 2019, the Company entered into a lease agreement for office space. Such lease has not been included in Operating Lease Right-of-Use Assets and Operating Lease Liabilities on the Condensed Consolidated Statement of Financial Condition as the Company does not yet have the right to use the premises. Commencement of the lease is currently anticipated to occur in 2020 with an initial term that expires in 2025.

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~~

~~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~~1-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. 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

Further information regarding the exchange ~~agreement). In the event cash-settled exchanges of Partnership Units are funded~~agreement is described in Note 14. “Transactions 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.Related Parties—Exchange Agreement” in the ~~related issuance. Accordingly,~~“Notes to Consolidated Financial Statements” 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“Part II. Item 8. Financial Statements and Supplementary Data” 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.Company’s Annual Report on Form 10-K for the year ended December 31, 2019.

Certain Partnership Unitholders exchanged ~~1,068,377~~226,784 and 216,330 Partnership Units, respectively, for cash in the ~~amount~~amounts of ~~$39.4~~$11.5 million ~~during~~and $9.4 million, respectively, for the ~~nine~~three months ended ~~September 30, 2017.~~March 31, 2020 and 2019. Such amounts are recorded as a reduction of Non-Controlling Interests in the Condensed Consolidated Statements of Financial Condition.

During the ~~third~~first quarter of ~~2017,~~2020, the Company was presented with ~~155,335~~176,929 Partnership Units to be exchanged. The Company ~~elected to~~will settle the exchange of these Partnership Units on ~~November 7, 2017~~May 5, 2020 for cash for an aggregate payment of ~~$6.1 million with cash from the Company’s working capital.~~$8.8 million. The price per Partnership Unit to be paid by the Company ~~was $39.58,~~is $49.60, which is equal to the volume-weighted average price of a share of the Company’s Class A common stock on ~~November 2, 2017.~~April 30, 2020.

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 maintain the effectiveness of a registration statement covering the shares owned by individuals covered by such agreement.

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

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 ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016,~~2019, the Company had amounts due of ~~$3.8~~$10.4 million and ~~$1.0~~$9.3 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.

~~On occasion, certain of~~We make available to our partners, including 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 a company leased business aircraft when the ~~Aircraft~~aircraft is ~~charged to~~not being used for business purposes, for which the executive ~~officer or employee based on market rates and usage. The~~officers pay the full incremental costs associated with such use. Such amount is not material to the condensed consolidated financial statements. On occasion, family members of the Company’s executive officers also may accompany the executive officers on the company leased business aircraft when the aircraft is being used for business purposes at de minimis incremental cost to the Company.

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

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

On October 1, ~~2015,~~2018, PJT Partners Holdings LP, as borrower (“Borrower”) entered into aan Amended and Restated Loan Agreement (the ~~��~~“Amended and Restated Loan Agreement”) and related documents with First Republic ~~Bank.~~Bank, as lender (the “Lender”). The Amended and Restated Loan Agreement provides for a revolving credit facility with aggregate commitments in an amount equal to ~~$60.0~~$40.0 million, which aggregate commitments may be increased, on the terms and subject to the conditions set forth in the Amended and Restated Loan Agreement, to up to ~~$80.0~~$60.0 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~~will mature and ~~general corporate purposes. Beginning October 30, 2017, drawings under~~ the ~~credit facility bear interest equal~~commitments thereunder will terminate on the maturity date, subject to extension by agreement of the ~~greater of a per annum rate of (a) 3%, or (b)~~Borrower and Lender. On February 4, 2020, the ~~prime rate minus 1.0%. Undrawn commitments bear a commitment fee. The~~Amended and Restated 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 ofwas further amended to extend the maturity ~~of the revolving credit facility~~date to October 1, ~~2019.~~2021.

As of ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016,~~2019, there were no0 borrowings under the revolving credit ~~facility and the Company was in compliance with the debt covenants.~~facility.

The ~~Company~~ ~~leases office space~~Amended and Restated Loan Agreement also provides for a term loan with an aggregate commitment of $30.0 million (the “Term Loan”). The Term Loan had an original maturity date of January 2, 2021, but was repaid in full during the three months ended March 31, 2020.

The Amended and Restated Loan Agreement requires the Borrower to maintain certain minimum financial covenants and limits or restricts the ability of the Borrower (subject to certain qualifications and exceptions) to incur additional indebtedness in excess of $20.0 million. Outstanding borrowings under ~~non-cancelable lease agreements, which expire at~~ ~~various dates through 2030.~~ ~~Occupancy lease agreements, in addition to base rentals, generally~~the Amended and Restated Loan Agreement are ~~subject to escalation provisions based on certain costs incurred~~secured by the ~~landlord~~accounts receivable of Park Hill Group LLC and ~~are recognized on a straight-line basis over the term of the lease agreement.~~PJT Partners LP.

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.

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

Outstanding borrowings under the revolving credit facility bear interest equal to the greater of a per annum rate of (a) 3%, or (b) the prime rate minus 1.0%. Outstanding borrowings under the Term Loan bear interest equal to the greater of a per annum rate of (a) 3.25%, or (b) the prime rate minus 0.75%. During an event of default, overdue principal under both the revolving credit facility and Term Loan bear interest at a rate 2.0% in excess of the otherwise applicable rate of interest. In connection with the closing of the Amended and Restated Loan Agreement, the Borrower paid the Lender certain closing costs and fees. In addition, on and after the closing date, the Borrower will also pay a commitment fee on the undrawn portion of the revolving credit facility of 0.125% per annum, payable quarterly in arrears.

As of ~~September 30, 2017,~~March 31, 2020 and December 31, 2019, the ~~aggregate minimum future payments required on non-cancelable leases are as follows:~~Company was in compliance with the debt covenants under the Amended and Restated Loan Agreement.

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.

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 $8.7 million and $8.0 million as of March 31, 2020 and December 31, 2019, respectively. In connection with this guarantee, the Company currently expects any associated risk of loss to be insignificant.

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.~~indemnification obligations. The Company’s maximum exposure under these arrangements is not ~~known. However,~~known; however, the Company ~~has not had prior claims or losses pursuant to these contracts and~~currently expects ~~the~~any associated risk of loss to be ~~remote.~~

~~Notes~~insignificant. In connection with these matters, the Company has incurred and may continue to ~~Condensed Consolidated Financial Statements – Continued (Unaudited)~~

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

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.~~

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.~~

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~~$0.9 million as of ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016, respectively.~~2019.

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

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~~March 31, 2020 and December 31, ~~2016,~~2019, the Company had accrued ~~$7.2~~$1.9 million and ~~$4.1~~$1.8 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~~stock at the time of delivery.

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.

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

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

The Company contributes to employer sponsored defined contribution plans for certain of its employees, subject to eligibility and statutory requirements. The Company incurred expenses with respect to these defined contribution plans in the amounts of ~~$0.2~~$1.5 million and $0.6 million for the three ~~and nine~~ months ended ~~September 30, 2017, respectively,~~March 31, 2020 and ~~$0.2 million and $0.6 million for the three and nine months ended September 30, 2016,~~2019, respectively, which are included in Compensation and Benefits in the Condensed Consolidated Statements of Operations.

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, shareholder 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~~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%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~~$28.8 million and ~~$65.6~~$74.4 million as of ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016,~~2019, respectively, which exceeded the minimum net capital requirement by ~~$90.3~~$27.5 million and ~~$64.1~~$72.8 million, respectively.

Park Hill Group LLC is a registered broker-dealer through which private fund advisory and ~~placement~~fundraising 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~~$6.4 million and ~~$18.1~~$22.1 million as of ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016,~~2019, respectively, which exceeded the minimum net capital requirement by ~~$9.5~~$6.1 million and ~~$17.9~~$21.8 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)~~15c3-3).

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

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~~March 31, 2020 and December 31, ~~2016,~~2019, both of these entities were in compliance with local capital adequacy requirements.

The Company’s activities providing strategic advisory, shareholder advisory, restructuring and special situations and private fund advisory and ~~placement~~fundraising 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.

~~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.

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.

The Company ishad 1 client that represented 13.5% and 15.6% of total revenues for the three months ended March 31, 2020 and 2019, respectively. The Company had 1 client that represented 11.0% of accounts receivable as of March 31, 2020. As of December 31, 2019, the Company was 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~~of credit risk with respect to its accounts ~~receivable as of September 30, 2017 and December 31, 2016.~~receivable.

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~~June 17, 2020 to Class A common stockholders of record on ~~December 6, 2017.~~June 3, 2020.

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

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

PJT Partners is a premier global advisory-focused investment bank. Our team of senior professionals delivers a wide array of strategic advisory, shareholder advisory, restructuring and special situations and private fund advisory and ~~placement~~fundraising 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.~~achieve their strategic objectives. We also provide, through PJT Park Hill, ~~Group,~~ private fund advisory and ~~placement~~fundraising 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.

Economic and global financial conditions can materially affect our operational and financial performance. See “Part II. Item 1A. Risk Factors” in this Quarterly Report on Form 10-Q and “Part I. Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, ~~2016~~2019 for a discussion of some of the factors that can affect our performance.

On March 11, 2020, the World Health Organization declared the outbreak of COVID-19 to be a pandemic. While we currently have not experienced a material decline in the demand for our services, we believe COVID-19’s impact on our business, financial performance and operating results will be significantly driven by a number of factors that we are unable to predict or control, such as the severity and duration of the pandemic and the impact on the U.S. and global economies. These external factors could have a material effect on our financial performance and operating results going forward.

M&A is a cyclical business that is impacted by macroeconomic conditions. According to ~~Thomson Reuters,~~Refinitiv, worldwide M&A announced volumes during the first ~~nine months~~quarter of ~~2017~~2020 were ~~up 3%~~down 25% compared with 2019, the ~~same period in the prior year~~slowest opening quarter since 2016¹. ~~We remain~~The true effect of the current COVID-19 pandemic on M&A activity levels in ~~a very constructive environment for M&A by historical standards.~~the short term is still to be seen. We expect corporate boards and management teams to continue to use M&A as a strategic tool ~~for growth.~~

~~Restructuring activity increased during~~in the ~~quarter given momentum from new deal activity. Opportunities were across a broad range of industries including retail; energy; technology, media~~medium 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.long term.

~~On June 23, 2016,~~Global restructuring activity for the first quarter of 2020 saw a dramatic increase primarily driven by the onset of the economic shutdown caused by the pandemic. Given the continued market dislocation, demand for restructuring and liability management services from companies, creditors and financial sponsors continues to drive significant activity across a broad range of industries. Near-term sectors being adversely impacted by the global economic shutdown include travel; tourism; leisure; gaming; and retail in addition to continued restructuring activity in sectors including technology, media and telecommunications; pharmaceuticals; consumer products and oil and gas.

We expect the global fundraising market to be affected by the COVID-19 pandemic and resulting market volatility. We are seeing an increased focus on existing relationships between fund managers and institutional investors, making the bar for new relationships in the near term extremely high. However, there are some institutional investors looking to capitalize on near-term market dislocations and there are a number of fund managers seeking capital for these and related strategies. Buyers, limited partners and general partners are assessing the impact of the market dislocation causing certain fundraising efforts and active transactions to be put on hold until there is more clarity on portfolio company valuations.

The United Kingdom (“U.K.”) ~~voted to leave~~formally left the European Union (“E.U.”), commonly referred to as “Brexit,” on January 31, 2020 and ~~on March 29, 2017, the U.K. began the process~~has immediately entered into a transition period, which is expected to ~~withdraw from the E.U.~~continue until December 31, 2020. The full impact of Brexit remains uncertain and the political climate in Europe continues to take shape. ~~It is likely to take a significant~~During this period, ~~of time before~~ the future terms of the U.K.’s relationship with the E.U. ~~are~~will be determined. ~~Circumstances~~We expect that circumstances relating to Brexit ~~have the potential to~~will impact ~~particular client transactions as well as~~ the Company’s ~~decisions around our~~ organization and/or ~~operations.~~operations and we are taking preparatory steps accordingly.

Substantially all of our revenues are derived from Advisory Fees and Placement Fees. ~~These revenues are~~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.

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, shareholder 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 PJT 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 recognized are dependent on the successful completion of a transaction.

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, ~~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~~fundraising services are provided within PJT 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 over time 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, the constraint on variable consideration is lifted upon each ~~closing is treated as a separate performance obligation. As a result, we recognize revenue at each closing as our performance obligations are fulfilled.~~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 48 month period. For these arrangements, revenue is recognized ~~monthly~~over time as the ~~amounts become fixed and determinable.~~constraint over variable consideration is lifted.

We may receive non-refundable up-front fees ~~upon execution of agreements~~in our contracts with ~~clients to provide placement services,~~customers, which are recorded as revenues in the period over which services are estimated to be 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 onfrom transactions denominated in currencies other than U.S. dollars; sublease income; and ~~sublease income.~~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 based upon LIBOR plus an additional percentage as mutually agreed upon with the receivable counterparty. Interest receivable is included in Accounts Receivable, Net in the Condensed Consolidated Statements of Financial Condition.

Compensation and Benefits – Compensation and Benefits expense includes salaries, cash bonuses, benefits, employer taxes and equity-based compensation associated with the grants of equity-based awards to ~~employees~~partners and ~~partners.~~employees. Changes in this expense are driven by fluctuations in the number of employees, business performance, ~~increases~~compensation adjustments in ~~wages as a result of inflation or labor~~relation to market ~~conditions,~~movements, 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~~compensation (that may include components of cash, restricted cash and/or ~~restricted stock units),~~equity-based awards) 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~~that are generally valued at their grant ~~date.~~date fair value.

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~~Income Taxes – 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;

~~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).

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 holders of common units of~~

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.

The following table sets forth our condensed consolidated results of operations for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2020 and ~~2016:~~2019:

	Three Months Ended September 30,									Nine Months Ended September 30,									Three Months Ended March 31,
	2017			2016			% Change			2017			2016			% Change			2020		2019			Change
	(Dollars in Thousands)																		(Dollars in Thousands)
Revenues
Advisory Fees	$	60,457		$	100,728			(40	%)	$	233,145		$	241,360			(3	%)	$	156,591	$	104,467			50	%
Placement Fees		15,907			18,327			(13	%)		68,912			78,930			(13	%)		38,992		23,312			67	%
Interest Income and Other		2,086			2,291			(9	%)		6,672			5,644			18	%		4,588		277		N/M
Total Revenues		78,450			121,346			(35	%)		308,729			325,934			(5	%)		200,171		128,056			56	%
Expenses
Compensation and Benefits		68,018			95,841			(29	%)		251,258			255,976			(2	%)		134,024		95,151			41	%
Occupancy and Related		6,746			6,481			4	%		19,611			19,521			0	%		8,654		7,136			21	%
Travel and Related		3,369			3,208			5	%		9,325			8,755			7	%		5,296		6,959			(24	)%
Professional Fees		6,374			3,983			60	%		15,366			14,170			8	%		4,523		5,802			(22	)%
Communications and Information Services		2,556			1,970			30	%		7,823			6,670			17	%		3,546		3,213			10	%
Depreciation and Amortization		2,038			4,004			(49	%)		6,152			11,930			(48	%)		3,820		3,620			6	%
Other Expenses		4,963			7,819			(37	%)		14,803			18,394			(20	%)		6,749		6,262			8	%
Total Expenses		94,064			123,306			(24	%)		324,338			335,416			(3	%)		166,612		128,143			30	%
Loss Before Provision (Benefit) for Taxes		(15,614	)		(1,960	)		697	%		(15,609	)		(9,482	)		65	%
Income (Loss) Before Provision (Benefit) for Taxes																				33,559		(87	)	N/M
Provision (Benefit) for Taxes		(13,258	)		8,376		N/M				(15,647	)		4,139		N/M				1,550		(1,024	)	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
Net Income																				32,009		937		N/M
Net Income (Loss) Attributable to Non-Controlling Interests																				13,149		(164	)	N/M
Net Income Attributable to PJT Partners Inc.																			$	18,860	$	1,101		N/M

The following table provides revenue statistics for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2020 and ~~2016:~~2019:

	Three Months Ended September 30,					Nine Months Ended September 30,				Three Months Ended March 31,
	2017		2016			2017		2016		2020			2019
Advisory Fees
Number of Fee-Paying Clients		61		68			116		116
Number of Clients											170			174
Number of Fee-Paying Clients with $1 Million or More		18		20			62		63		22			20
Number of Fee-Paying Clients Representing Greater than 10% of Advisory Fees		—		2			—		—		3			1
Percentage of Such Clients’ Fees of Total Advisory Fees	N/A			21.9	%	N/A		N/A			42.6	%		19.1	%

Placement Fees
Number of Fee-Paying Clients		49		39			67		62
Number of Clients											37			39
Number of Fee-Paying Clients with $1 Million or More		4		5			23		22		11			9
Number of Fee-Paying Clients Representing Greater than 10% of Placement Fees		—		2			—		—		3			2
Percentage of Such Clients’ Fees of Total Placement Fees	N/A			35.9	%	N/A		N/A			49.8	%		30.1	%

Total Revenues were ~~$78.5~~$200.2 million for the three months ended ~~September 30, 2017, a decrease~~March 31, 2020, an increase of ~~$42.9~~$72.1 million compared with ~~$121.3~~$128.1 million for the three months ended ~~September 30, 2016.~~March 31, 2019. Advisory Fees were ~~$60.5~~$156.6 million for the three months ended ~~September 30, 2017, a decrease~~March 31, 2020, an increase of ~~$40.3~~$52.1 million compared with ~~$100.7~~$104.5 million for the three months ended ~~September 30, 2016.~~March 31, 2019. The ~~decrease~~increase 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.strong increases in both our restructuring and strategic advisory businesses. Placement Fees were ~~$15.9~~$39.0 million for the three months ended ~~September 30, 2017, a decrease~~March 31, 2020, an increase of ~~$2.4~~$15.7 million compared with ~~$18.3~~$23.3 million for the three months ended ~~September 30, 2016. Despite an~~March 31, 2019. The 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~~was driven by growth in corporate private placement activity and increased fundraising activity 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 were $94.1~~alternative asset managers. Interest Income and Other was $4.6 million for the three months ended ~~September 30, 2017, a decrease~~March 31, 2020, an increase of ~~$29.2~~$4.3 million compared with ~~$123.3~~$0.3 million for the three months ended ~~September 30, 2016.~~March 31, 2019. The ~~decrease~~prior year results were impacted by $3.0 million of realized and unrealized foreign exchange losses.

Expenses were $166.6 million for the three months ended March 31, 2020, an increase of $38.5 million compared with $128.1 million for the three months ended March 31, 2019. The increase in expenses was primarily attributable to ~~decreases~~an increase in Compensation and Benefits of ~~$27.8~~$38.9 million, ~~Other Expenses~~which was principally the result 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 inhigher revenues during 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.current quarter.

The Company’s Provision for Taxes for the three months ended March 31, 2020 was $1.6 million, which represents an effective tax rate of 4.6% on pretax income of $33.6 million. The Company’s Benefit for Taxes for the three months ended ~~September 30, 2017~~March 31, 2019 was ~~$13.3~~$1.0 million ~~which represents an effective tax rate of 84.9%~~ on pretax loss of ~~$15.6~~$0.1 million. The ~~Company’s Provision for Taxes~~effective tax rate was not meaningful 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.March 31, 2019.

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~~March 31, 2020 due to corporate entities subject to U.S. federal, state, local and foreign income ~~taxes;~~taxes, to non-corporate entities that are subject to New York City ~~UBT and~~Unincorporated Business Tax, to certain compensation charges that are not deductible for income tax ~~purposes.~~purposes and the impact of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”).

On March 27, 2020, the President of the United States signed the CARES Act into law, which includes several provisions for corporations regarding the tax treatment of net operating losses, interest deductions and payroll benefits. The ~~change~~Company has elected to carryback certain net operating losses, which resulted in a $3.7 million decrease in the Company’s ~~effective tax rate between~~Provision for Income Taxes for the three ~~and nine~~ months ended ~~September 30, 2016 and three and nine months ended September 30, 2017 was largely due~~March 31, 2020.

While the Company benefited from the tax impact relating to the ~~use~~delivery of ~~the actual year-to-date rate as~~vested shares at a value in excess of ~~September 30, 2016~~their amortized cost, this benefit was less 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.~~2020 than 2019.

Net ~~Loss~~Income (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 common units of partnership interest in PJT Partners Holdings LP (“Partnership ~~Units~~Units”) and holders of Class A common stock of PJT Partners Inc. after considering any contractual arrangements that govern the allocation of income (loss).

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~~have historically been comprised of cash and cash equivalents, investments, ~~in U.S. Treasury securities and~~ receivables arising from strategic advisory and placement ~~engagements.~~engagements and operating lease right-of-use assets. Our liabilities primarily include accrued compensation and benefits, accounts payable and accrued expenses, taxes payable and ~~taxes payable.~~operating lease liabilities. We expect to pay a significant amount of incentive compensation late each year or during the ~~first two months~~beginning of ~~each~~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 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,~~Information regarding our Amended and Restated Loan Agreement can be found in ~~connection with~~“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 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 beginningyear ended 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.

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 1,31, 2019.

As of ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016, there were no borrowings under the revolving credit facility and~~2019, we were in compliance with ~~all~~the debt ~~covenants.~~covenants under the Amended and Restated Loan Agreement. The term loan was repaid in full in January 2020.

We evaluate our cash needs on a regular basis in light of current market conditions. As of ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016,~~2019, we had cash, cash equivalents and investments ~~in U.S. Treasury securities~~ of ~~$157.4~~$112.7 million and ~~$152.4~~$217.5 million, respectively. As of March 31, 2020, we had no debt outstanding and our full line of credit is available to us. Given the uncertainty in the rapidly changing market and economic conditions related to the COVID-19 pandemic, we will continue to evaluate the duration and severity of the resulting economic impact to our business and financial condition.

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~~March 31, 2020 and December 31, ~~2016,~~2019, total accounts receivable were ~~$168.4~~$245.7 million and ~~$227.6~~$227.5 million, ~~respectively, net of~~respectively. The allowance for ~~doubtful accounts~~credit losses was $1.4 million as of ~~$1.9 million~~March 31, 2020 and ~~$4.4 million, respectively.~~there was no allowance for credit losses as of December 31, 2019. Included in Accounts Receivable are long-term receivables of ~~$65.3~~$77.4 million and ~~$73.1~~$77.6 million as of ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016,~~2019, respectively, related to placement fees that are generally paid in installments over a period of three to four years.

Our primary cash needs are for working capital, paying operating expenses, including cash compensation to our employees, funding the cash redemption of Partnership Units, repurchasing shares of the Company’s Class A common stock, 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,~~

Additionally, our ability to ~~forecast future~~generate positive cash ~~flows is more limited because we do not have a long-established operating history as a stand-alone company.~~flow from operations will be impacted by global economic conditions, including the effect of the COVID-19 pandemic. If our cash flows from operations are ~~less than we expect,~~significantly reduced, 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.~~economy, which will likely be further impacted by the COVID-19 pandemic. 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 (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 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.

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.~~15. “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, shareholder advisory, restructuring and special situations and private fund advisory and ~~placement services.~~fundraising services businesses. 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.

On ~~October 26, 2017, our~~April 24, 2019, the Company’s Board of Directors authorized the repurchase ~~of up to $100 million~~ of shares of the Company’s Class A common ~~stock.~~stock in an amount up to $100 million. Under ~~this~~the 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.

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

~~We previously recorded an expense of $8.9 million during~~During the three months ended March 31, ~~2016 related~~2020, the Company repurchased 539,297 shares of Class A common stock at an average price of $46.71, or $25.2 million in aggregate, pursuant to the ~~Caspersen matter, which represented~~share repurchase program. As of March 31, 2020, the available amount ~~that~~remaining for repurchases under this program was ~~considered~~$59.9 million.

For a discussion of our contractual obligations, refer to ~~be probable~~“Part II. Item 7. Management’s Discussion and ~~reasonably estimable, as well as a related insurance reimbursement~~Analysis of ~~$5.6 million deemed probable~~Financial Condition and Results of ~~receipt. We made payments totaling $8.9 million related to the charge and also received a $5.6 million insurance reimbursement during~~Operations—Contractual Obligations” in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2019. There have not been any material changes to our contractual obligations since December 31, 2019.

As previously disclosed, with respect to actual and potential additional claims related to funds fraudulently obtained by ~~Mr.~~Andrew 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, including the litigation discussed under “—Item 1. Legal Proceedings” in “Part II. Other Information” included 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. However, the disposition of these contingencies could be material to our financial results in the period in which it occurs.

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.~~indemnification obligations. Our maximum exposure under these arrangements is not ~~known. However,~~known; however, we ~~have not had prior claims or losses pursuant to these contracts and~~currently expect ~~the~~any associated risk of loss to be ~~remote.~~insignificant. In connection with these matters, we have incurred and may continue to incur legal expenses, which are expensed as incurred.

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.~~2019.

See Notes ~~7, 9,~~8, 10, 11, 13 and 1214 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, commitments and employee benefit plans, respectively.

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 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 significant~~2019.

We test for impairment, at a minimum, on an annual basis or earlier where certain events or changes in circumstances indicate that goodwill may more likely than not be impaired. Additionally, we evaluate our ~~significant accounting policies~~intangible assets for recoverability whenever events or ~~critical accounting policies during~~changes in circumstances indicate that their carrying amount may not be recoverable.

As of March 31, 2020, we do not believe it is more likely than not that our goodwill was impaired. Additionally, as of March 31, 2020, we believe the ~~nine months ended September 30, 2017.~~carrying amounts of our intangible assets are recoverable. If there are decreases in our stock price for a sustained period (including as a result of the impact of the COVID-19 pandemic on equity securities), a decline in our revenues or other unfavorable factors, we may be required to recognize an impairment, which could be material to our condensed consolidated financial statements.

The realization of deferred tax assets arising from timing differences and net operating losses requires taxable income in future years in order to deduct the reversing timing differences and absorb the net operating losses. We assess positive and negative evidence in determining whether to record a valuation allowance with respect to deferred tax assets. This assessment is performed separately for each taxing jurisdiction. As of March 31, 2020, we believe that no additional valuation allowance is required with respect to our deferred tax assets. However, if there are material declines in the assumptions underlying such assessment (including as a result of the impact of the COVID-19 pandemic on the U.S. and global economies), we may be required to record a valuation allowance, which could be material to our condensed consolidated financial statements.

The Company is not involved with any off-balance sheet arrangements that are not elsewhere reflected in our condensed consolidated financial statements.

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.

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.~~

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 market risk ~~can be found~~(including interest rate risk, foreign currency exchange rate risk and commodity price risk) or credit risk. Notwithstanding, the COVID-19 global health crisis and its impact on the U.S. and global economies could have a material adverse effect on the Company’s condensed consolidated financial statements.

Our cash and cash equivalents include all 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 primarily maintained at three major U.S. financial institutions. In addition to cash and cash equivalents, we hold investments in ~~“Part II. Item 7A. Quantitative and Qualitative Disclosures About Market Risk”~~Treasury securities, certain of which are classified as Investments in our ~~Annual Report on Form 10-K~~Condensed Consolidated Statements of Financial Condition. We believe our cash, cash equivalents and investments are not subject to any material interest rate risk, equity price risk, credit risk or other market risk.

We regularly review our accounts receivable and allowance for credit losses by considering factors such as historical experience, credit quality, age of the ~~year ended~~accounts receivable and recoverable expense balances and the current economic conditions that may affect a customer’s ability to pay such amounts owed to us. We maintain an allowance for credit losses that, in our opinion, reflects current expected credit losses. As of March 31, 2020, the allowance for credit losses was $1.4 million. We had no allowance for credit losses as of December 31, ~~2016. Our exposures~~2019.

We are exposed to ~~market~~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 currency in which an invoice is issued and paid 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 Japanese yen and the Hong Kong dollar. For the three months ended March 31, 2020 and 2019, 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 loss of $2.8 million and gain of $1.3 million, respectively, and in Interest Income and Other in the Condensed Consolidated Statements of Operations, a gain of $11 thousand and loss of $3.1 million, respectively. We have not ~~changed materially since December 31, 2016.~~entered into any transaction to hedge our exposure to these foreign currency fluctuations through the use of derivative instruments or other methods at this time. Given the uncertainty of the COVID-19 global health crisis and the ongoing economic impact, exchange rate fluctuations between the U.S. dollar and other currencies could unfavorably affect our condensed consolidated financial statements.

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.

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.

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 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 of the federal securities laws~~state court 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, in an action styled~~ ~~The Moore Charitable Foundation, et al. v. 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 to commit multiple frauds while using PJT Partners Inc.’s and Park Hill Group’s name and business resources. The complaint alleges claims againstCaspersen. PJT Partners Inc. and Park Hill Group ~~for fraud under theories of apparent authority and respondeat superior, negligent supervision and retention and conversion. PJT Partners and Park Hill Group~~LLC moved to dismiss the complaint on August 24, 2017. On August 13, 2018, the court dismissed all of the claims asserted against PJT Partners Inc. and Park Hill Group LLC, except for the fraud-based apparent authority claim. Plaintiffs and PJT Partners Inc. and Park Hill Group LLC appealed the court’s August 2018 decision. On December 3, 2019, the appellate court dismissed the complaint in its entirety as 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 March 3, 2020. We believe ~~that~~ this ~~action~~matter is without merit and we will ~~defend it vigorously.~~

~~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 additioncontinue 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 influencedvigorously oppose any further appeals 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, the

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.

~~There were no material changes~~Our business is subject to risks arising from epidemic diseases, such as the recent global outbreak of the novel coronavirus, or COVID‑19.

The recent outbreak of COVID-19, which has been declared by the World Health Organization to be a pandemic, has spread across the globe and is impacting worldwide economic activity. While it is not possible at this time to estimate the impact that COVID-19 could have on our business, the continued spread of COVID-19, its impact on the global economy and the measures taken by the governments of countries affected and in which we operate, including proposed or potential legislation designed to restrain M&A and other financial transactions during the pandemic may, among other things, reduce demand for our services, delay client decisions to procure our services or their ability to timely pay for our services, or force our clients or their counterparties to seek to terminate existing agreements, which could materially adversely affect our operating results and financial condition. A pandemic, including COVID-19, or other public health epidemic further poses the risk ~~factors previously disclosed~~that our partners and employees may be prevented from conducting business activities at full capacity for an indefinite period of time, including due to spread of the disease or due to shutdowns that are requested or mandated by governmental authorities. Further, COVID-19 presents a significant threat to our partners’ and employees’ well-being. Our executives and partners may themselves become sick or otherwise unable to perform their duties for an extended period of time due to infection of COVID-19.

Although we have not experienced a material decline in the demand for services as a result of COVID-19, as events relating to the pandemic continue to develop globally, including in the U.S., and impact the capital markets, the Company’s results of operations, cash flows and financial condition could be materially adversely impacted due to a reduction in demand for our services, delay of client decisions to procure our services or possible deterioration in our ~~Annual Report~~clients’ financial condition and their ability to timely pay outstanding receivables owed to us. Further, we may be required to recognize an impairment in goodwill or intangible assets, which may have a material impact on ~~Form 10-K~~our condensed consolidated financial statements.

The vast majority of our employees have been working remotely and we are prepared to operate in this manner for the ~~year ended December 31, 2016.~~foreseeable future, if necessary. We may be subject to a heightened risk of cyberattacks or other privacy or data security incidents due to the increased use of remote work environments and virtual platforms.

The impact of COVID-19 on our business, financial performance and operating results will be affected to a significant extent by a number of factors that we are unable to predict or control, such as the severity and duration of

the pandemic and the impact on the U.S. and global economies. These external factors could have a material adverse effect on our financial performance and operating results going forward.

In addition to the foregoing, the COVID-19 pandemic is exacerbating many of the other risks described in our Annual Report on Form 10-K for the year ended December 31, ~~2016~~2019.

The risks described in this Quarterly Report on Form 10-Q, in our Annual Report on Form 10-K for the year ended December 31, 2019 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.

In connection with the issuance during the ~~third~~first quarter of ~~2017~~ 2020 of ~~(a)~~ LTIP Units in PJT Partners Holdings LP to ~~a partner of the Company and (b) the transfer by a limited partner of PJT Partners Holdings LP partnership units,~~certain personnel, PJT Partners Inc. issued ~~four~~nine corresponding shares of its Class B common stock, par value $0.01 per share, to these limited partners. Shares of Class B common stock have no economic rights but entitle the holder, without regard to the number of shares of Class B common stock held, to a number of votes that is equal to the aggregate number of vested and unvested Partnership Units 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. may be increased to up to the number of votes to which a holder is then entitled on all other matters presented to stockholders. The issuance of shares of Class B common stock was not registered under the Securities Act of 1933 because such shares were not issued in a transaction involving the offer or sale of ~~securities.~~securities.

The Company declared a dividend of $0.05 per share of Class A common stock in the ~~third~~first quarter of ~~2017~~2020, to be paid on June 17, 2020, and plans 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 Report on Form 10-K for the year ended December 31, ~~2016~~2019 for further disclosure of the Company’s dividend policy.

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.

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.


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

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

		Page
PART I.	FINANCIAL INFORMATION

ITEM 1.	FINANCIAL STATEMENTS	3

	Unaudited Condensed Consolidated Financial Statements — ~~September 30, 2017~~March 31, 2020 and ~~2016:~~2019:

	Condensed Consolidated Statements of Financial Condition as of ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016~~2019	3

	Condensed Consolidated Statements of Operations for the Three ~~and Nine~~ Months Ended ~~September 30, 2017~~March 31, 2020 and ~~2016~~2019	4

	Condensed Consolidated Statements of Comprehensive Income ~~(Loss)~~ for the Three ~~and Nine~~ Months Ended ~~September 30, 2017~~March 31, 2020 and ~~2016~~2019	5

	Condensed Consolidated Statements of Changes in Equity ~~(Deficit)~~ for the ~~Nine~~Three Months Ended ~~September 30, 2017~~March 31, 2020 and ~~2016~~2019	6

	Condensed Consolidated Statements of Cash Flows for the ~~Nine~~Three Months Ended ~~September 30, 2017~~March 31, 2020 and ~~2016~~2019	78

	Notes to Condensed Consolidated Financial Statements	89

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	2224

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	3133

ITEM 4.	CONTROLS AND PROCEDURES	3133

PART II.	OTHER INFORMATION

ITEM 1.	LEGAL PROCEEDINGS	32

~~ITEM 1A.~~	~~RISK FACTORS~~	33

~~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~~	34

ITEM 6.1A.	~~EXHIBITS~~RISK FACTORS	34

~~SIGNATURES~~ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	35

ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	36

ITEM 4.	MINE SAFETY DISCLOSURES	36

ITEM 5.	OTHER INFORMATION	36

ITEM 6.	EXHIBITS	36

SIGNATURES		38

	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Net Income (Loss)	$	(2,356	)	$	(10,336	)	$	38		$	(13,621	)
Other Comprehensive Income (Loss), Net of Tax — Currency Translation Adjustment		(57	)		(266	)		5			306
Comprehensive Income (Loss)		(2,413	)		(10,602	)		43			(13,315	)
Less:
Comprehensive Loss Attributable to Redeemable Non-Controlling Interests		(5,732	)		(783	)		(4,849	)		(3,667	)
Comprehensive Income (Loss) Attributable to PJT Partners Inc.	$	3,319		$	(9,819	)	$	4,892		$	(9,648	)

	September 30,			December 31,
	2017			2016
Finite-Lived Intangible Assets
Customer Relationships	$	26,476		$	26,476
Trade Name		5,700			5,700
Client Mandates and Other		—			1,276
Total Intangible Assets		32,176			33,452
Accumulated Amortization		(19,297	)		(18,739	)
Intangible Assets, Net (a)	$	12,879		$	14,713

	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

	December 31, 2019			Adjustments			January 1, 2020
Accounts Receivable, Net	$	227,516		$	(1,107	)	$	226,409
Deferred Tax Asset, Net		48,237			169			48,406
Accumulated Deficit		(144,919	)		(938	)		(145,857	)

Balance, December 31, 2019	$	—
Adoption of ASC 326		1,107
Provision for Credit Losses		997
Write-offs		(1,019	)
Recoveries		325
Balance, March 31, 2020	$	1,410

	March 31, 2020
	Level I		Level II		Level III		Total
Treasury Instruments	$	—	$	24,104	$	—	$	24,104

	December 31, 2019
	Level I		Level II		Level III		Total
Treasury Instruments	$	—	$	23,821	$	—	$	23,821

	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

	RSU Awards with Both Service and Market Conditions
			Weighted-
			Average
			Grant Date
	Number of		Fair Value
	Units		(in dollars)
Balance, December 31, 2019		262,342	$	24.84
Balance, March 31, 2020		262,342	$	24.84

	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 Unit Awards with Both Service and Market Conditions
				Weighted-
				Average
	Number of			Grant Date
	Partnership			Fair Value
	Units			(in dollars)
Balance, December 31, 2019		3,806,183		$	5.72
Vested		(158,541	)		5.72
Balance, March 31, 2020		3,647,642		$	5.72

			Weighted-Average				Weighted- Average
			Service Period				Service Period
	Units		in Years		Units		in Years
Partnership Units		11,723,249		1.5		390,447		1.5
Restricted Stock Units		6,538,228		0.9		4,716,150		1.7
Restricted Share Awards						7,605		1.5
Total Equity-Based Awards		18,261,477		1.3		5,114,202		1.6

Year Ending December 31,	Finance		Operating
2020 (April 1 through December 31)	$	94	$	17,717
2021		28		27,642
2022		15		27,551
2023		10		27,598
2024		7		25,974
Thereafter		—		90,238
Total Lease Payments		154		216,720
Less: Imputed Interest		6		41,168
Total	$	148	$	175,552

	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

	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

Exhibit Number		Exhibit Description

~~2.1~~+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~~		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).

10.1		Amended and Restated Loan Agreement, by and between PJT Partners Holdings LP and First Republic Bank, dated as of October 1, 2018 (incorporated herein by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q (File No. 001-36869) filed with the Securities and Exchange Commission on November 2, 2018).

10.2		Renewal Agreement, by and between PJT Partners Holdings LP and First Republic Bank, dated as of February 4, 2020 (incorporated herein by reference to Exhibit 10.4 to the Registrant’s Annual Report on Form 10-K (File No. 001-36869) filed with the Securities and Exchange Commission on February 27, 2020.

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).

Date: ~~November 7, 2017~~May 1, 2020

	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)