Exhibit 99.4
PJT Partners Inc.
Unaudited Supplemental Adjusted Pro Forma Financial Information
For the Nine Months Ended September 30, 2018
(Dollars in Millions, Except Per Share Data)
The following tables present a summary of results on both a Pro Forma GAAP and As Adjusted basis.
Management believes the non-GAAP measures presented, together with comparable GAAP measures, are useful to investors in understanding the Company’s operating results. The non-GAAP measures remove the significant accounting impact of certain transaction-related compensation and other adjustments not reflective of the Company’s core operations as explained below. These measures should not be considered substitutes for, or superior to, financial measures prepared in accordance with GAAP.
The Company has presented As Adjusted Net Income and As Adjusted Earnings Per Share in the tables below, which illustrate the impact of taxes on Adjusted Pretax Income, assuming all Partnership Units (excluding the unvested Partnership Units that have yet to satisfy certain market condition) were exchanged for shares of the Company’s Class A common stock, resulting in all of the Company’s income becoming subject to corporate-level tax, considering both current and deferred income tax effects.
Please refer to the GAAP pro forma condensed combined financial information included in Exhibit 99.3 herein.
1
PJT Partners Inc.
Unaudited Supplemental Adjusted Pro Forma Financial Information – continued
For the Nine Months Ended September 30, 2018
(Dollars in Millions, Except Per Share Data)
Selected Historical Financial Data for CamberView (GAAP)(1)
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Nine Months Ended September 30, |
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Year Ended December 31, |
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2018 |
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2017 |
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2017 |
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2016 |
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Revenues |
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$ |
35.4 |
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$ |
25.9 |
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$ |
32.7 |
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$ |
36.6 |
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Expenses |
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Compensation and Benefits |
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$ |
19.8 |
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$ |
13.9 |
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$ |
18.8 |
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$ |
18.4 |
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% of Revenues |
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55.9 |
% |
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53.6 |
% |
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57.4 |
% |
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50.3 |
% |
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Non-Compensation |
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$ |
9.0 |
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$ |
5.2 |
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$ |
7.1 |
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$ |
7.2 |
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% of Revenues |
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25.6 |
% |
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20.0 |
% |
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21.7 |
% |
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19.7 |
% |
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Operating Income(2) |
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$ |
6.6 |
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(3) |
$ |
6.8 |
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$ |
6.8 |
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$ |
11.0 |
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% of Revenues |
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18.5 |
% |
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26.4 |
% |
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20.9 |
% |
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30.1 |
% |
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__________________________
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(1) |
Refer to the historical consolidated financial statements of CamberView included in Exhibits 99.1 and 99.2 herein. |
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(2) |
Operating income excludes interest expense, foreign exchange adjustments and taxes. |
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(3) |
Includes $1.4 million in transaction-related professional fees and $1.1 million in employee severance. Excluding these expenses, operating income would have been $9.1 million or 25.7% of revenues. |
Pro Forma GAAP Combined Financial Data
Revenue Summary
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Twelve Months |
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Ended |
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September 30, |
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Nine Months Ended September 30, 2018 |
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2018 |
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PJT |
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CamberView |
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Pro Forma Combined |
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Pro Forma Combined |
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Revenues |
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Advisory |
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$ |
318.9 |
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$ |
35.1 |
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$ |
354.0 |
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$ |
514.0 |
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Placement |
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72.5 |
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— |
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72.5 |
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106.4 |
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Interest Income & Other |
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13.5 |
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0.3 |
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13.8 |
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17.3 |
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Total Revenues |
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$ |
404.9 |
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$ |
35.4 |
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$ |
440.3 |
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$ |
637.6 |
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(1) |
_________________________
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(1) |
CamberView LTM Revenues (ended September 30, 2018) were $42.2 million, up 40.2% versus the same period in 2017. |
2
PJT Partners Inc.
Unaudited Supplemental Adjusted Pro Forma Financial Information – continued
For the Nine Months Ended September 30, 2018
(Dollars in Millions, Except Per Share Data)
Pro Forma GAAP Combined Financial Data
Expense Summary
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Nine Months Ended September 30, 2018 |
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Pro Forma |
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Pro Forma |
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PJT Partners Inc. |
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CamberView |
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Adjustments(1) |
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Combined |
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Compensation and Benefits |
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$ |
297.8 |
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$ |
19.5 |
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$ |
6.7 |
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$ |
324.0 |
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Non-Compensation |
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82.2 |
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10.8 |
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0.5 |
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93.5 |
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Total Expenses |
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380.0 |
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30.3 |
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7.2 |
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417.5 |
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Pretax Income |
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24.8 |
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5.1 |
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(7.2 |
) |
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22.7 |
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Net Income |
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30.0 |
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5.0 |
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(7.1 |
) |
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27.9 |
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Earnings Per Share - Diluted |
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0.85 |
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0.80 |
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__________________________
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(1) |
Refer to the pro forma condensed combined financial information included in Exhibit 99.3 herein for detail of these pro forma adjustments. |
Summary of Expense Adjustments
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Nine Months Ended September 30, 2018 |
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Non-Recurring |
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Pro Forma |
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Pro Forma |
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Transaction |
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CamberView |
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Combined |
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Combined |
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Related |
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Expenses |
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As Adjusted |
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Compensation and Benefits |
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$ |
324.0 |
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$ |
(45.4 |
) |
(1) |
$ |
(1.1 |
) |
(3) |
$ |
277.5 |
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Non-Compensation |
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93.5 |
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(7.0 |
) |
(2) |
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— |
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86.5 |
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Total Expenses |
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417.5 |
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(52.3 |
) |
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(1.1 |
) |
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364.1 |
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Pretax Income |
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22.7 |
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52.3 |
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1.1 |
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76.2 |
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Provision (Benefit) for Taxes |
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(5.2 |
) |
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22.1 |
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(4) |
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0.3 |
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17.2 |
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Net Income |
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27.9 |
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59.0 |
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Earnings Per Share - Diluted |
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0.80 |
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1.42 |
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__________________________
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(1) |
This adjustment adds back to Pro Forma GAAP Pretax Income transaction-related equity-based compensation expense consisting of (i) amortization of equity awards granted as part of the spin-off from Blackstone, and (ii) amortization of equity-based and cash awards granted in connection with the CamberView acquisition on October 1, 2018. |
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(2) |
This adjustment adds back to Pro Forma GAAP Pretax Income amounts for the amortization of intangible assets that are associated with Blackstone’s IPO and amounts for the amortization of intangible assets identified in connection with the acquisitions of PJT Capital LP on October 1, 2015 and CamberView on October 1, 2018. This adjustment also adds back to Pro Forma GAAP Pretax Income the amount the Company has agreed to pay Blackstone related to the net realized cash benefit from certain compensation-related tax deductions. |
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(3) |
This adjustment adds back to Pro Forma GAAP Pretax Income amounts related to employee severance. |
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(4) |
This adjustment reflects the tax impact on adjustments to compensation and non-compensation expense described above, assuming all Partnership Units (excluding the unvested Partnership Units that have yet to satisfy market conditions) were exchanged for shares of the Company’s Class A common stock, resulting in all of the Company’s income becoming subject to corporate-level tax, considering both current and deferred income tax effects. Of the $22.1 million adjustment, approximately $15.3 million relates to the tax impact of the transaction-related adjustments, with the remaining $6.8 million resulting from the adjustment to assume all income is subject to corporate-level tax. |
3
PJT Partners Inc.
Unaudited Supplemental Adjusted Pro Forma Financial Information – continued
For the Nine Months Ended September 30, 2018
(Dollars in Millions, Except Per Share Data)
Summary Data – GAAP and As Adjusted
|
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Nine Months Ended September 30, 2018 |
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Pro Forma Combined |
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PJT Standalone |
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GAAP |
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As Adjusted |
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GAAP |
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As Adjusted |
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Compensation and Benefits |
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$ |
324.0 |
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$ |
277.5 |
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$ |
297.8 |
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$ |
259.1 |
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% of Revenues |
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73.6 |
% |
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63.0 |
% |
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73.6 |
% |
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64.0 |
% |
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Non-Compensation |
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$ |
93.5 |
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$ |
86.5 |
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$ |
82.2 |
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$ |
79.4 |
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% of Revenues |
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21.2 |
% |
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19.7 |
% |
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20.3 |
% |
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19.6 |
% |
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Pretax Income |
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$ |
22.7 |
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$ |
76.2 |
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$ |
24.8 |
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$ |
66.3 |
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% of Revenues |
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|
5.2 |
% |
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|
17.3 |
% |
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6.1 |
% |
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16.4 |
% |
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Net Income |
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$ |
27.9 |
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$ |
59.0 |
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$ |
30.0 |
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$ |
51.6 |
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Earnings Per Share - Diluted |
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$ |
0.80 |
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$ |
1.42 |
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$ |
0.85 |
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$ |
1.30 |
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4