pjt-ex991

New York, October 29, 2019: PJT Partners Inc. (the “Company” or “PJT Partners”) (NYSE: PJT) today reported Total Revenues of $174.2 million for third quarter 2019 compared with $140.1 million for the prior year quarter. GAAP Net Income and Adjusted Net Income, If-Converted were $14.8 million and $24.5 million, respectively, for the current quarter compared with $12.3 million and $18.0 million, respectively, for the prior year quarter. GAAP Diluted EPS and Adjusted EPS were $0.28 and $0.60, respectively, for the current quarter compared with $0.33 and $0.44, respectively, for the prior year quarter.

Total Revenues for the nine months ended September 30, 2019 were $469.0 million compared with $404.9 million for 2018. GAAP Net Income and Adjusted Net Income, If-Converted were $25.7 million and $56.9 million, respectively, for the nine months compared with $30.0 million and $51.6 million, respectively, for 2018. GAAP Diluted EPS and Adjusted EPS were $0.52 and $1.39, respectively, for the nine months compared with $0.85 and $1.30, respectively, for 2018.

The following table sets forth revenues for the three and nine months ended September 30, 2019 and 2018:

	Three Months Ended September 30,							Nine Months Ended September 30,
	2019		2018		% Change			2019		2018		% Change
	(Dollars in Millions)
Revenues
Advisory	$	146.1	$	117.2		25	%	$	383.6	$	318.9		20	%
Placement		25.6		18.2		40	%		77.6		72.5		7	%
Interest Income & Other		2.6		4.8		(46	%)		7.8		13.5		(42	%)
Total Revenues	$	174.2	$	140.1		24	%	$	469.0	$	404.9		16	%

Total Revenues were $174.2 million for third quarter 2019 compared with $140.1 million for the prior year quarter, an increase of 24%.

Advisory Revenues were $146.1 million for the current quarter compared with $117.2 million for the prior year quarter, an increase of 25%. The increase in Advisory Revenues was driven by significant growth in our strategic advisory business, which more than offset a decline in restructuring activity.

Placement Revenues were $25.6 million for the current quarter compared with $18.2 million for the prior year quarter, an increase of 40%. The increase in Placement Revenues was primarily driven by growth in corporate private placement activity and fund placement activity for private equity clients.

Interest Income & Other was $2.6 million for the current quarter compared with $4.8 million for the prior year quarter. The decrease was primarily driven by lower reimbursable expenses billed to clients as well as realized and unrealized foreign currency losses.

Total Revenues were $469.0 million for the nine months ended September 30, 2019 compared with $404.9 million for the same period a year ago, an increase of 16%.

Advisory Revenues were $383.6 million for the nine months compared with $318.9 million for the same period a year ago, an increase of 20%. The increase in Advisory Revenues was driven by significant growth in our strategic advisory business.

Placement Revenues were $77.6 million for the nine months compared with $72.5 million for the same period a year ago, an increase of 7%. The increase was primarily driven by growth in corporate private placement activity.

Interest Income & Other was $7.8 million for the nine months compared with $13.5 million for the same period a year ago. The decrease was primarily driven by lower reimbursable expenses billed to clients as well as realized and unrealized foreign currency losses.

The following tables set forth information relating to the Company’s expenses for the three and nine months ended September 30, 2019 and 2018:

	Three Months Ended September 30,
	2019						2018
	GAAP			As Adjusted			GAAP			As Adjusted
	(Dollars in Millions)
Expenses
Compensation and Benefits	$	123.0		$	111.5		$	99.9		$	89.7
% of Revenues		70.6	%		64.0	%		71.3	%		64.0	%
Non-Compensation	$	31.4		$	29.2		$	28.2		$	27.3
% of Revenues		18.0	%		16.8	%		20.1	%		19.5	%
Total Expenses	$	154.4		$	140.7		$	128.1		$	117.0
% of Revenues		88.6	%		80.8	%		91.4	%		83.5	%
Pretax Income	$	19.8		$	33.5		$	12.1		$	23.1
% of Revenues		11.4	%		19.2	%		8.6	%		16.5	%

	Nine Months Ended September 30,
	2019						2018
	GAAP			As Adjusted			GAAP			As Adjusted
	(Dollars in Millions)
Expenses
Compensation and Benefits	$	337.4		$	300.2		$	297.8		$	259.1
% of Revenues		71.9	%		64.0	%		73.6	%		64.0	%
Non-Compensation	$	98.3		$	92.1		$	82.2		$	79.4
% of Revenues		21.0	%		19.6	%		20.3	%		19.6	%
Total Expenses	$	435.7		$	392.3		$	380.0		$	338.5
% of Revenues		92.9	%		83.6	%		93.9	%		83.6	%
Pretax Income	$	33.3		$	76.7		$	24.8		$	66.3
% of Revenues		7.1	%		16.4	%		6.1	%		16.4	%

GAAP Compensation and Benefits Expense was $123.0 million for third quarter 2019 compared with $99.9 million for the prior year quarter. Adjusted Compensation and Benefits Expense was $111.5 million for the current quarter compared with $89.7 million for the prior year quarter. The increase in Compensation and Benefits Expense reflected higher revenues during the current quarter as well as increased headcount.

GAAP Compensation and Benefits Expense was $337.4 million for the nine months ended September 30, 2019 compared with $297.8 million for the same period a year ago. Adjusted Compensation and Benefits Expense was $300.2 million for the nine months compared with $259.1 million for the same period a year ago. The increase in Compensation and Benefits Expense reflected higher revenues during the current nine month period as well as increased headcount.

GAAP Non-Compensation Expense was $31.4 million for third quarter 2019 compared with $28.2 million for the prior year quarter. Adjusted Non-Compensation Expense was $29.2 million for the current quarter compared with $27.3 million for the prior year quarter.

GAAP Non-Compensation Expense increased during the current quarter compared with the prior year quarter, primarily due to increases in Occupancy and Related and Depreciation and Amortization. The increase in Occupancy and Related was primarily due to expansion in footprint in our existing locations as well as the assumption of leases in the CamberView acquisition. Depreciation and Amortization increased primarily due to additional amortization expense related to intangible assets recorded in the acquisition of CamberView during the fourth quarter of 2018.

Adjusted Non-Compensation Expense increased during the current quarter compared with the prior year quarter, primarily due to an increase in Occupancy and Related for the same reasons noted above.

GAAP Non-Compensation Expense was $98.3 million for the nine months ended September 30, 2019 compared with $82.2 million for the same period a year ago. Adjusted Non-Compensation Expense was $92.1 million for the nine months compared with $79.4 million for the same period a year ago.

GAAP Non-Compensation Expense increased during the nine months compared with the same period a year ago, primarily due to increases in Depreciation and Amortization, Other Expenses, Occupancy and Related, Travel and Related and Professional Fees. Depreciation and Amortization increased primarily due to additional amortization expense related to intangible assets recorded in the acquisition of CamberView during the fourth quarter of 2018. Other Expenses increased primarily due to interest expense associated with the acquisition of CamberView and additional market data and other expenses associated with increased headcount and business activity. The increase in Occupancy and Related was primarily due to expansion in footprint in our existing locations as well as the assumption of leases in the CamberView acquisition. The increases in Travel and Related and Professional Fees were primarily due to increased headcount and business activity.

Adjusted Non-Compensation Expense increased during the nine months compared with the same period a year ago, primarily due to increases in Other Expenses, Occupancy and Related, Travel and Related and Professional Fees for the same reasons noted above.

As of September 30, 2019, PJT Partners Inc. owned 59.5% of PJT Partners Holdings LP. PJT Partners Inc. is subject to corporate U.S. federal and state income tax while PJT Partners Holdings LP is subject to New York City unincorporated business tax and other entity-level taxes imposed by certain state and foreign jurisdictions. Please refer to Note 12. “Stockholders’ Equity (Deficit)” in the “Notes to Consolidated Financial Statements” in “Part II. Item 8. Financial Statements and Supplementary Data” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 for further information about the corporate ownership structure.

In calculating Adjusted Net Income, If-Converted, the Company has assumed that all outstanding Class A partnership units in PJT Partners Holdings LP (“Partnership Units”) (excluding the unvested partnership units that have yet to satisfy certain market conditions) have been exchanged into shares of the Company’s Class A common stock, subjecting all of the Company’s income to corporate-level tax.

The effective tax rate for Adjusted Net Income, If-Converted for the nine months ended September 30, 2019 was 25.8% compared with 22.2% for the same period a year ago. This tax rate excludes the tax benefits of the adjustments for transaction-related compensation expense, amortization expense and spin-off-related payable due to The Blackstone Group Inc. (“Blackstone”). The increase in tax rate from the nine months ended September 30, 2018 is primarily due to a decreased tax benefit related to the delivery during the period of vested shares at values in excess of their amortized cost.

As of September 30, 2019, the Company held cash, cash equivalents and short-term investments of $118.2 million. Additionally, the Company had funded debt of $25.8 million.

On April 24, 2019, the Company’s Board of Directors authorized the repurchase of shares of the Company’s Class A common stock in an amount up to $100 million. As of September 30, 2019, the Company’s remaining repurchase authorization was $89.4 million.

During third quarter 2019, the Company repurchased 441,032 shares of Class A common stock pursuant to the share repurchase program, net share settled 4,320 shares to satisfy employee tax obligations and repurchased 108,586 Partnership Units for cash pursuant to the quarterly exchange program.

In aggregate during third quarter 2019, the Company repurchased an equivalent of 553,938 shares at an average price of $40.38 per share.

The Company intends to repurchase 108,108 Partnership Units for cash on November 5, 2019 at a price to be determined by the per share volume-weighted average price of the Company’s Class A common stock on October 31, 2019.

The Board of Directors of PJT Partners Inc. has declared a quarterly dividend of $0.05 per share of Class A common stock. The dividend will be paid on December 18, 2019 to Class A common stockholders of record on December 4, 2019.

PJT Partners will host a conference call on October 29, 2019 at 8:30 a.m. ET to discuss its third quarter 2019 results. The conference call can be accessed via the internet on www.pjtpartners.com or by dialing +1 (888) 339-2688 (U.S. domestic) or +1 (617) 847-3007 (international), passcode 912 737 52#. For those unable to listen to the live broadcast, a replay will be available following the call at www.pjtpartners.com or by dialing +1 (888) 286-8010 (U.S. domestic) or +1 (617) 801-6888 (international), passcode 766 561 76#.

PJT Partners is a 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 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 achieve their strategic objectives. We also provide, through PJT Park Hill, private fund advisory and fundraising services for alternative investment managers, including private equity funds, real estate funds and hedge funds. To learn more about PJT Partners, please visit the Company’s website at www.pjtpartners.com.

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. 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 risks, uncertainties and assumptions. Actual results may differ materially from those expressed in such forward-looking statements. You should not put undue reliance on any forward-looking statements contained herein. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

The risk factors discussed in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2018, 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 our business. Any such risks could cause our results to differ materially from those expressed in forward-looking statements.

The following represent key performance measures that management uses in making resource allocation and/or compensation decisions. These measures should not be considered substitutes for, or superior to, financial measures prepared in accordance with GAAP.

Management believes the following non-GAAP measures, when presented together with comparable GAAP measures, are useful to investors in understanding the Company’s operating results: Adjusted Pretax Income; Adjusted Net Income; Adjusted Net Income, If-Converted, in total and on a per-share basis; Adjusted Earnings Per Share; Adjusted Compensation and Benefits Expense and Adjusted Non-Compensation Expense. These non-GAAP measures, presented and discussed in this earnings release, remove the significant accounting impact of: (a) transaction-related compensation expense, including

expense related to Partnership Units with both time-based vesting and market conditions as well as equity-based and cash awards granted in connection with the spin-off from Blackstone and acquisition of CamberView; (b) intangible asset amortization associated with Blackstone’s initial public offering (“IPO”), the acquisition of PJT Capital LP, and the acquisition of CamberView; and (c) the amount the Company has agreed to pay Blackstone related to the net realized cash benefit from certain compensation-related tax deductions. Reconciliations of the non-GAAP measures to their most directly comparable GAAP measures and further detail regarding the adjustments are provided in the Appendix.

To help investors understand the effect of the Company’s ownership structure on its Adjusted Net Income, the Company has presented Adjusted Net Income, If-Converted. This measure illustrates the impact of taxes on Adjusted Pretax Income, assuming all Partnership Units (excluding the unvested partnership units that have yet to satisfy certain 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.

	Three Months Ended September 30,					Nine Months Ended September 30,
	2019		2018			2019		2018
Revenues
Advisory	$	146,075	$	117,161		$	383,577	$	318,918
Placement		25,596		18,229			77,603		72,481
Interest Income and Other		2,556		4,753			7,807		13,456
Total Revenues		174,227		140,143			468,987		404,855
Expenses
Compensation and Benefits		123,040		99,875			337,356		297,780
Occupancy and Related		7,883		6,641			22,821		20,017
Travel and Related		5,567		5,449			19,247		16,906
Professional Fees		6,120		6,072			17,589		15,290
Communications and Information Services		3,365		2,781			10,071		9,521
Depreciation and Amortization		3,454		2,263			10,709		6,362
Other Expenses		5,015		4,980			17,906		14,140
Total Expenses		154,444		128,061			435,699		380,016
Income Before Provision (Benefit) for Taxes		19,783		12,082			33,288		24,839
Provision (Benefit) for Taxes		5,002		(197	)		7,544		(5,189	)
Net Income		14,781		12,279			25,744		30,028
Net Income Attributable to Non-Controlling Interests		7,956		4,729			12,992		10,297
Net Income Attributable to PJT Partners Inc.	$	6,825	$	7,550		$	12,752	$	19,731
Net Income Per Share of Class A Common Stock
Basic	$	0.28	$	0.34		$	0.53	$	0.91
Diluted	$	0.28	$	0.33		$	0.52	$	0.85
Weighted-Average Shares of Class A Common Stock Outstanding
Basic		24,013,033		22,275,847			24,107,179		21,425,766
Diluted		24,973,570		24,112,349			25,024,084		24,047,660

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
GAAP Net Income	$	14,781		$	12,279		$	25,744		$	30,028
Less: GAAP Provision (Benefit) for Taxes		5,002			(197	)		7,544			(5,189	)
GAAP Pretax Income		19,783			12,082			33,288			24,839

Adjustments to GAAP Pretax Income
Transaction-Related Compensation Expense⁽¹⁾		11,535			10,185			37,205			38,673
Amortization of Intangible Assets⁽²⁾		1,758			583			5,726			1,751
Spin-Off-Related Payable Due to Blackstone⁽³⁾		430			274			515			1,075
Adjusted Pretax Income		33,506			23,124			76,734			66,338
Adjusted Taxes⁽⁴⁾		6,192			3,642			12,457			8,751
Adjusted Net Income		27,314			19,482			64,277			57,587

If-Converted Adjustments
Less: Adjusted Taxes⁽⁴⁾		(6,192	)		(3,642	)		(12,457	)		(8,751	)
Add: If-Converted Taxes⁽⁵⁾		8,959			5,160			19,786			14,713
Adjusted Net Income, If-Converted	$	24,547		$	17,964		$	56,948		$	51,625

GAAP Net Income Per Share of Class A Common Stock
Basic	$	0.28		$	0.34		$	0.53		$	0.91
Diluted	$	0.28		$	0.33		$	0.52		$	0.85
GAAP Weighted-Average Shares of Class A Common Stock Outstanding
Basic		24,013,033			22,275,847			24,107,179			21,425,766
Diluted		24,973,570			24,112,349			25,024,084			24,047,660

Adjusted Net Income, If-Converted Per Share	$	0.60		$	0.44		$	1.39		$	1.30
Weighted-Average Shares Outstanding, If-Converted		40,917,949			40,623,599			41,022,464			39,666,627

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
GAAP Compensation and Benefits Expense	$	123,040		$	99,875		$	337,356		$	297,780
Transaction-Related Compensation Expense⁽¹⁾		(11,535	)		(10,185	)		(37,205	)		(38,673	)
Adjusted Compensation and Benefits Expense	$	111,505		$	89,690		$	300,151		$	259,107

Non-Compensation Expenses
Occupancy and Related	$	7,883		$	6,641		$	22,821		$	20,017
Travel and Related		5,567			5,449			19,247			16,906
Professional Fees		6,120			6,072			17,589			15,290
Communications and Information Services		3,365			2,781			10,071			9,521
Depreciation and Amortization		3,454			2,263			10,709			6,362
Other Expenses		5,015			4,980			17,906			14,140
GAAP Non-Compensation Expense		31,404			28,186			98,343			82,236
Amortization of Intangible Assets⁽²⁾		(1,758	)		(583	)		(5,726	)		(1,751	)
Spin-Off-Related Payable Due to Blackstone⁽³⁾		(430	)		(274	)		(515	)		(1,075	)
Adjusted Non-Compensation Expense	$	29,216		$	27,329		$	92,102		$	79,410

The following table provides a summary of weighted-average shares outstanding for the three and nine months ended September 30, 2019 and 2018 for both basic and diluted shares. The table also provides a reconciliation to If-Converted Shares Outstanding assuming that all Partnership Units and unvested PJT Partners Inc. restricted stock units (“RSUs”) were converted to shares of the Company’s Class A common stock:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Weighted-Average Shares Outstanding - GAAP
Shares of Class A Common Stock Outstanding		22,968,953		21,039,687		23,127,276		20,174,832
Vested, Undelivered RSUs		1,044,080		1,236,160		979,903		1,250,934
Basic Shares Outstanding, GAAP		24,013,033		22,275,847		24,107,179		21,425,766
Dilutive Impact of Unvested Common RSUs⁽⁶⁾		960,537		1,836,502		916,905		2,621,894
Diluted Shares Outstanding, GAAP		24,973,570		24,112,349		25,024,084		24,047,660

Weighted-Average Shares Outstanding - If-Converted
Shares of Class A Common Stock Outstanding		22,968,953		21,039,687		23,127,276		20,174,832
Vested, Undelivered RSUs		1,044,080		1,236,160		979,903		1,250,934
Conversion of Unvested Common RSUs⁽⁶⁾		960,537		1,836,502		916,905		2,621,894
Conversion of Participating RSUs		28,514		125,388		45,039		143,856
Conversion of Partnership Units		15,915,865		16,385,862		15,953,341		15,475,111
If-Converted Shares Outstanding		40,917,949		40,623,599		41,022,464		39,666,627

	As of September 30,
	2019		2018
Fully-Diluted Shares Outstanding⁽⁷⁾⁽⁸⁾		43,274,179		42,300,645

As of September 30, 2019, there were 3.7 million Partnership Units and 0.3 million RSUs subject to market conditions that are not included in fully-diluted shares outstanding.