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PJT Partners Inc. Reports Full Year and Fourth Quarter 2020 Results

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Full Year Highlights

  • Total Revenues of $1.05 billion, up 47% from a year ago
    • Advisory Revenues of $872 million, up 53%
    • Placement Revenues of $162 million, up 22%
  • GAAP Pretax Income of $248 million and Adjusted Pretax Income of $271 million
  • GAAP Diluted EPS of $4.40 and Adjusted EPS of $4.93

Fourth Quarter Highlights

  • Total Revenues of $322 million, up 29% from a year ago
    • Advisory Revenues of $261 million, up 39%
    • Placement Revenues of $56 million, up 1%
  • GAAP Pretax Income of $95 million and Adjusted Pretax Income of $100 million
  • GAAP Diluted EPS of $1.67 and Adjusted EPS of $1.81

Capital Management and Balance Sheet

  • Repurchased 1.2 million share equivalents during the fourth quarter and 2.9 million share equivalents during 2020
    • Intend to repurchase an additional 680,368 Partnership Units for cash in February 2021
  • $437 million of cash, cash equivalents and short-term investments
  • Board authorizes additional $150 million of repurchases of shares of the Company's Class A common stock

Paul J. Taubman, Chairman and Chief Executive Officer, said, "We are extremely proud of all that we have accomplished these past five years. Against a backdrop of extraordinarily dislocated conditions, PJT Partners delivered record 2020 results. Our differentiated culture of collaboration coupled with our unique combination of capabilities has enabled us to deliver exceptional performance, and we remain confident in our future growth prospects."

PJT Partners Inc. (the "Company" or "PJT Partners") (NYSE:PJT) today reported Total Revenues of $1.05 billion for the year ended December 31, 2020 compared with $717.6 million for 2019. GAAP Net Income and Adjusted Net Income, If-Converted were $212.4 million and $203.9 million, respectively, for 2020 compared with $63.8 million and $98.5 million, respectively, for 2019. GAAP Diluted EPS and Adjusted EPS were $4.40 and $4.93, respectively, for 2020 compared with $1.21 and $2.41, respectively, for 2019.

Total Revenues for the three months ended December 31, 2020 were $322.0 million compared with $248.7 million for 2019. GAAP Net Income and Adjusted Net Income, If-Converted were $81.4 million and $77.0 million, respectively, for the current quarter compared with $38.0 million and $41.6 million, respectively, for the prior year quarter. GAAP Diluted EPS and Adjusted EPS were $1.67 and $1.81, respectively, for the current quarter compared with $0.69 and $1.02, respectively, for the prior year quarter.

Revenues

The following table sets forth revenues for the three months and year ended December 31, 2020 and 2019:

 

 

Three Months Ended

December 31,

 

 

 

 

 

 

 

Year Ended

December 31,

 

 

 

 

 

 

2020

 

 

2019

 

 

% Change

 

 

 

2020

 

 

2019

 

 

% Change

 

 

(Dollars in Millions)

Revenues

 

 

Advisory

 

$

260.8

 

 

$

188.2

 

 

39%

 

 

 

$

872.3

 

 

$

571.8

 

 

53%

Placement

 

 

56.2

 

 

 

55.6

 

 

1%

 

 

 

 

162.2

 

 

 

133.2

 

 

22%

Interest Income & Other

 

 

5.0

 

 

 

4.9

 

 

3%

 

 

 

 

17.8

 

 

 

12.7

 

 

40%

Total Revenues

 

$

322.0

 

 

$

248.7

 

 

29%

 

 

 

$

1,052.3

 

 

$

717.6

 

 

47%

Year Ended

Total Revenues were $1.05 billion for 2020 compared with $718 million for 2019, an increase of 47%.

Advisory Revenues were $872 million for 2020 compared with $572 million for 2019, an increase of 53%. Advisory Revenues increased due to significant increases in both restructuring revenues and strategic advisory revenues.

Placement Revenues were $162 million for 2020 compared with $133 million for 2019, an increase of 22%. Placement Revenues increased principally due to increased corporate private placement activity and fund placement activity for private equity clients.

Interest Income & Other was $18 million for 2020 compared with $13 million for 2019. The increase in Interest Income & Other was primarily driven by increases in other income, partially offset by a decrease in reimbursable expenses.

Three Months Ended

Total Revenues were $322 million for fourth quarter 2020 compared with $249 million for the prior year quarter, an increase of 29%.

Advisory Revenues were $261 million for the current quarter compared with $188 million for the prior year quarter, an increase of 39%. Growth in Advisory Revenues was driven by a significant increase in restructuring revenues as well as increased strategic advisory revenues.

Placement Revenues were $56 million for the current quarter, roughly flat compared with the prior year quarter.

Interest Income & Other was $5 million for the current quarter, roughly flat compared with the prior year quarter.

Expenses

The following tables set forth information relating to the Company's expenses for the three months and year ended December 31, 2020 and 2019:

 

 

Year Ended December 31,

 

 

2020

 

2019

 

 

GAAP

 

As Adjusted

 

GAAP

 

As Adjusted

 

 

(Dollars in Millions)

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and Benefits

 

$

683.4

 

 

$

668.7

 

 

$

502.2

 

 

$

460.3

 

% of Revenues

 

 

64.9

%

 

 

63.5

%

 

 

70.0

%

 

 

64.1

%

Non-Compensation

 

$

120.9

 

 

$

112.6

 

 

$

133.3

 

 

$

125.1

 

% of Revenues

 

 

11.5

%

 

 

10.7

%

 

 

18.6

%

 

 

17.4

%

Total Expenses

 

$

804.3

 

 

$

781.4

 

 

$

635.4

 

 

$

585.4

 

% of Revenues

 

 

76.4

%

 

 

74.3

%

 

 

88.5

%

 

 

81.6

%

Pretax Income

 

$

248.0

 

 

$

270.9

 

 

$

82.2

 

 

$

132.3

 

% of Revenues

 

 

23.6

%

 

 

25.7

%

 

 

11.5

%

 

 

18.4

%

 

 

Three Months Ended December 31,

 

 

2020

 

2019

 

 

GAAP

 

As Adjusted

 

GAAP

 

As Adjusted

 

 

(Dollars in Millions)

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and Benefits

 

$

197.7

 

 

$

194.0

 

 

$

164.8

 

 

$

160.1

 

% of Revenues

 

 

61.4

%

 

 

60.3

%

 

 

66.3

%

 

 

64.4

%

Non-Compensation

 

$

29.6

 

 

$

27.6

 

 

$

34.9

 

 

$

33.0

 

% of Revenues

 

 

9.2

%

 

 

8.6

%

 

 

14.1

%

 

 

13.3

%

Total Expenses

 

$

227.4

 

 

$

221.6

 

 

$

199.8

 

 

$

193.1

 

% of Revenues

 

 

70.6

%

 

 

68.8

%

 

 

80.3

%

 

 

77.7

%

Pretax Income

 

$

94.6

 

 

$

100.4

 

 

$

48.9

 

 

$

55.5

 

% of Revenues

 

 

29.4

%

 

 

31.2

%

 

 

19.7

%

 

 

22.3

%

Compensation and Benefits Expense

Year Ended

GAAP Compensation and Benefits Expense was $683 million for 2020 compared with $502 million for 2019. Adjusted Compensation and Benefits Expense was $669 million for 2020 compared with $460 million for 2019. The increase in Compensation and Benefits Expense was principally the result of significantly improved operating performance during 2020.

Three Months Ended

GAAP Compensation and Benefits Expense was $198 million for fourth quarter 2020 compared with $165 million for the prior year quarter. Adjusted Compensation and Benefits Expense was $194 million for the current quarter compared with $160 million for the prior year quarter. The increase in Compensation and Benefits Expense was principally the result of significantly improved operating performance during the quarter.

Non-Compensation Expense

Year Ended

GAAP Non-Compensation Expense was $121 million for 2020 compared with $133 million for 2019. Adjusted Non-Compensation Expense was $113 million for 2020 compared with $125 million for 2019.

GAAP and Adjusted Non-Compensation Expense decreased during 2020 compared with 2019, primarily driven by a decrease in Travel and Related and partially offset by an increase in Occupancy and Related. Travel and Related decreased due to reduced travel and entertainment activity. Occupancy and Related increased due to expansion in certain locations.

Three Months Ended

GAAP Non-Compensation Expense was $30 million for fourth quarter 2020 compared with $35 million for the prior year quarter. Adjusted Non-Compensation Expense was $28 million for the current quarter compared with $33 million for the prior year quarter.

GAAP and Adjusted Non-Compensation Expense decreased during fourth quarter 2020 compared with the prior year quarter, primarily driven by decreases in Travel and Related and Other Expenses and partially offset by an increase in Professional Fees. Travel and Related decreased due to reduced travel and entertainment activity. Other Expenses decreased due to a variety of factors, including a reduction in bad debt expense. Professional Fees increased primarily due to higher consulting payments relating to the firm's business activities.

Provision for Taxes

As of December 31, 2020, PJT Partners Inc. owned 59.0% 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, 2019 for further information about the corporate ownership structure. The effective tax rate for GAAP Net Income for the year ended December 31, 2020 was 14.3%.

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 year ended December 31, 2020 was 24.8% compared with 25.5% for the same period a year ago. This tax rate excludes the tax benefits of the adjustments for transaction-related compensation expense, amortization expense, tax benefit recorded pursuant to the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") as well as certain payments to The Blackstone Group Inc. ("Blackstone") resulting from the October 1, 2015 spin-off.

Capital Management and Balance Sheet

As of December 31, 2020, the Company held cash, cash equivalents and short-term investments of $437.4 million, and had no funded debt.

On February 1, 2021, the Company's Board of Directors authorized the repurchase of shares of the Company's Class A common stock in an amount up to $150 million, which is in addition to the previous authorizations, of which $36.4 million is remaining as of December 31, 2020. Under 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 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 fourth quarter 2020, the Company repurchased 1.1 million Partnership Units for cash pursuant to the quarterly exchange program, 103,522 shares of Class A common stock pursuant to the share repurchase program, and net share settled 6,165 shares to satisfy employee tax obligations. In aggregate during fourth quarter 2020, the Company repurchased an equivalent of 1.2 million shares at an average price of $67.40 per share. During the year ended December 31, 2020, the total share equivalent repurchases were 2.9 million shares at an average price of $56.94 per share.

The Company intends to repurchase 680,368 Partnership Units for cash on February 9, 2021 at a price to be determined by the per share volume-weighted average price of the Company's Class A common stock on February 4, 2021.

Dividend

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 March 17, 2021 to Class A common stockholders of record on March 3, 2021.

COVID-19 Update

The vast majority of the Company's employees continue to work remotely, as they have since mid-March 2020. There have been no material changes to the Company's internal controls as a result of this working environment. The Company has undertaken steps to allow a limited number of employees to return to certain office locations on a voluntary basis, following safety protocols from health advisors and the respective governmental agencies. The Company is prepared to continue operating in a remote work environment for the foreseeable future, if necessary.

Quarterly Investor Call Details

PJT Partners will host a conference call on February 2, 2021 at 8:30 a.m. ET to discuss its full year and fourth quarter 2020 results. The conference call can be accessed via the internet at www.pjtpartners.com or by dialing +1 (800) 458-4121 (U.S. domestic) or +1 (720) 543-0206 (international), passcode 9176574. 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) 203-1112 (U.S. domestic) or +1 (719) 457-0820 (international), passcode 9176574.

About PJT Partners

PJT Partners is a premier global advisory-focused investment bank. Our team of senior professionals delivers a wide array of strategic advisory, strategic capital markets, restructuring and special situations, shareholder advisory, and private fund advisory and 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 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 our website at www.pjtpartners.com.

Forward-Looking Statements

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 are neither historical facts nor assurances of future performance. Instead, they are based only on the Company's current beliefs, expectations, and assumptions regarding the future of its 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, and changes in circumstances that are difficult to predict, many of which are outside the Company's control. The Company's actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not place undue reliance upon any of these forward-looking statements. Important factors that could cause the Company's actual results and financial condition to differ materially from those indicated in the forward-looking statements 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 the Company's computer systems or communication systems during a catastrophic event, including as a result of the increased use of remote work environments and virtual platforms during the outbreak of COVID-19 (coronavirus); (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 the Company's employees and the Company's ability to provide services to its 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 well as such other factors discussed in the "Risk Factors" section of the Company's Annual Report on Form 10-K for the year ended December 31, 2019 and Quarterly Report on Form 10-Q for the three months ended June 30, 2020, in each case filed with the United States Securities and Exchange Commission ("SEC"), as such factors may be updated from time to time in the Company's periodic filings with the SEC, accessible on the SEC's website at www.sec.gov, could cause the Company's results to differ materially from those expressed in forward-looking statements. There may be other risks and uncertainties that the Company is unable to predict at this time or that are not currently expected to have a material adverse effect on its business. Any such risks could cause the Company's results to differ materially from those expressed in forward-looking statements.

Non-GAAP Financial Measures

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 (referred to as "Adjusted EPS"); 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 Partners Holdings, LLC ("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 as well as return to provision adjustments. This tax rate excludes the tax benefits of the adjustments for transaction-related compensation expense, amortization expense, tax benefit recorded pursuant to the CARES Act as well as certain payments to Blackstone resulting from the October 1, 2015 spin-off.

Appendix

GAAP Condensed Consolidated Statements of Operations (unaudited)

Reconciliations of GAAP to Non-GAAP Financial Data (unaudited)

Summary of Shares Outstanding (unaudited)

Footnotes

PJT Partners Inc.

GAAP Condensed Consolidated Statements of Operations (unaudited)

(Dollars in Thousands, Except Share and Per Share Data)

 

 

 

Three Months Ended

December 31,

 

Year Ended

December 31,

 

 

2020

 

2019

 

2020

 

2019

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Advisory

 

$

260,756

 

 

$

188,194

 

 

$

872,286

 

 

$

571,771

 

Placement

 

 

56,211

 

 

 

55,577

 

 

 

162,237

 

 

 

133,180

 

Interest Income and Other

 

 

5,036

 

 

 

4,881

 

 

 

17,777

 

 

 

12,688

 

Total Revenues

 

 

322,003

 

 

 

248,652

 

 

 

1,052,300

 

 

 

717,639

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and Benefits

 

 

197,743

 

 

 

164,809

 

 

 

683,393

 

 

 

502,165

 

Occupancy and Related

 

 

8,405

 

 

 

8,726

 

 

 

34,282

 

 

 

31,547

 

Travel and Related

 

 

966

 

 

 

6,453

 

 

 

7,345

 

 

 

25,700

 

Professional Fees

 

 

6,937

 

 

 

4,190

 

 

 

23,014

 

 

 

21,779

 

Communications and Information Services

 

 

4,094

 

 

 

3,309

 

 

 

14,669

 

 

 

13,380

 

Depreciation and Amortization

 

 

3,826

 

 

 

3,787

 

 

 

15,055

 

 

 

14,496

 

Other Expenses

 

 

5,403

 

 

 

8,476

 

 

 

26,581

 

 

 

26,382

 

Total Expenses

 

 

227,374

 

 

 

199,750

 

 

 

804,339

 

 

 

635,449

 

Income Before Provision for Taxes

 

 

94,629

 

 

 

48,902

 

 

 

247,961

 

 

 

82,190

 

Provision for Taxes

 

 

13,236

 

 

 

10,859

 

 

 

35,535

 

 

 

18,403

 

Net Income

 

 

81,393

 

 

 

38,043

 

 

 

212,426

 

 

 

63,787

 

Net Income Attributable to Non-Controlling Interests

 

 

35,281

 

 

 

21,233

 

 

 

94,877

 

 

 

34,225

 

Net Income Attributable to PJT Partners Inc.

 

$

46,112

 

 

$

16,810

 

 

$

117,549

 

 

$

29,562

 

Net Income Per Share of Class A Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

1.87

 

 

$

0.71

 

 

$

4.80

 

 

$

1.23

 

Diluted

 

$

1.67

 

 

$

0.69

 

 

$

4.40

 

 

$

1.21

 

Weighted-Average Shares of Class A Common Stock Outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

24,601,311

 

 

 

23,710,261

 

 

 

24,496,285

 

 

 

24,007,138

 

Diluted

43,547,220

24,991,277

 

43,127,166

 

25,014,569

PJT Partners Inc.

Reconciliations of GAAP to Non-GAAP Financial Data (unaudited)

(Dollars in Thousands, Except Share and Per Share Data)

 

 

 

Three Months Ended

December 31,

 

Year Ended

December 31,

 

 

2020

 

2019

 

2020

 

2019

GAAP Net Income

 

$

81,393

 

 

$

38,043

 

 

$

212,426

 

 

$

63,787

 

Less: GAAP Provision for Taxes

 

 

13,236

 

 

 

10,859

 

 

 

35,535

 

 

 

18,403

 

GAAP Pretax Income

 

 

94,629

 

 

 

48,902

 

 

 

247,961

 

 

 

82,190

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments to GAAP Pretax Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transaction-Related Compensation Expense(1)

 

 

3,705

 

 

 

4,681

 

 

 

14,662

 

 

 

41,886

 

Amortization of Intangible Assets(2)

 

 

1,993

 

 

 

1,928

 

 

 

7,776

 

 

 

7,654

 

Spin-Off-Related Payable Due to Blackstone(3)

 

 

33

 

 

 

24

 

 

 

550

 

 

 

539

 

Adjusted Pretax Income

 

 

100,360

 

 

 

55,535

 

 

 

270,949

 

 

 

132,269

 

Adjusted Taxes(4)

 

 

15,136

 

 

 

9,573

 

 

 

38,788

 

 

 

22,030

 

Adjusted Net Income

 

 

85,224

 

 

 

45,962

 

 

 

232,161

 

 

 

110,239

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

If-Converted Adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less: Adjusted Taxes(4)

 

 

(15,136

)

 

 

(9,573

)

 

 

(38,788

)

 

 

(22,030

)

Add: If-Converted Taxes(5)

 

 

23,373

 

 

 

13,937

 

 

 

67,090

 

 

 

33,723

 

Adjusted Net Income, If-Converted

 

$

76,987

 

 

$

41,598

 

 

$

203,859

 

 

$

98,546

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Net Income Per Share of Class A Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

1.87

 

 

$

0.71

 

 

$

4.80

 

 

$

1.23

 

Diluted

 

$

1.67

 

 

$

0.69

 

 

$

4.40

 

 

$

1.21

 

GAAP Weighted-Average Shares of Class A Common Stock Outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

24,601,311

 

 

 

23,710,261

 

 

 

24,496,285

 

 

 

24,007,138

 

Diluted

 

 

43,547,220

 

 

 

24,991,277

 

 

 

43,127,166

 

 

 

25,014,569

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Net Income, If-Converted Per Share

 

$

1.81

 

 

$

1.02

 

 

$

4.93

 

 

$

2.41

 

Weighted-Average Shares Outstanding, If-Converted

 

 

42,490,854

 

 

 

40,808,615

 

 

 

41,365,572

 

 

 

40,967,316

 

PJT Partners Inc.

Reconciliations of GAAP to Non-GAAP Financial Data - continued (unaudited)

(Dollars in Thousands)

 

 

 

Three Months Ended

December 31,

 

Year Ended

December 31,

 

 

2020

 

2019

 

2020

 

2019

GAAP Compensation and Benefits Expense

 

$

197,743

 

 

$

164,809

 

 

$

683,393

 

 

$

502,165

 

Transaction-Related Compensation Expense(1)

 

 

(3,705

)

 

 

(4,681

)

 

 

(14,662

)

 

 

(41,886

)

Adjusted Compensation and Benefits Expense

 

$

194,038

 

 

$

160,128

 

 

$

668,731

 

 

$

460,279

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-Compensation Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Occupancy and Related

 

$

8,405

 

 

$

8,726

 

 

$

34,282

 

 

$

31,547

 

Travel and Related

 

 

966

 

 

 

6,453

 

 

 

7,345

 

 

 

25,700

 

Professional Fees

 

 

6,937

 

 

 

4,190

 

 

 

23,014

 

 

 

21,779

 

Communications and Information Services

 

 

4,094

 

 

 

3,309

 

 

 

14,669

 

 

 

13,380

 

Depreciation and Amortization

 

 

3,826

 

 

 

3,787

 

 

 

15,055

 

 

 

14,496

 

Other Expenses

 

 

5,403

 

 

 

8,476

 

 

 

26,581

 

 

 

26,382

 

GAAP Non-Compensation Expense

 

 

29,631

 

 

 

34,941

 

 

 

120,946

 

 

 

133,284

 

Amortization of Intangible Assets(2)

 

 

(1,993

)

 

 

(1,928

)

 

 

(7,776

)

 

 

(7,654

)

Spin-Off-Related Payable Due to Blackstone(3)

 

 

(33

)

 

 

(24

)

 

 

(550

)

 

 

(539

)

Adjusted Non-Compensation Expense

 

$

27,605

 

 

$

32,989

 

 

$

112,620

 

 

$

125,091

 

PJT Partners Inc.

Summary of Shares Outstanding (unaudited)

The following table provides a summary of weighted-average shares outstanding for the three months and year ended December 31, 2020 and 2019 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

December 31,

 

Year Ended

December 31,

 

 

2020

 

2019

 

2020

 

2019

Weighted-Average Shares Outstanding - GAAP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares of Class A Common Stock Outstanding

 

 

23,832,155

 

 

 

23,088,660

 

 

 

23,827,264

 

 

 

23,117,559

 

Vested, Undelivered RSUs

 

 

769,156

 

 

 

621,601

 

 

 

669,021

 

 

 

889,579

 

Basic Shares Outstanding, GAAP

 

 

24,601,311

 

 

 

23,710,261

 

 

 

24,496,285

 

 

 

24,007,138

 

Dilutive Impact of Unvested Common RSUs(6)

 

 

2,295,401

 

 

 

1,281,016

 

 

 

1,344,152

 

 

 

1,007,431

 

Dilutive Impact of Partnership Units(7)

 

 

16,650,508

 

 

 

 

 

 

17,286,729

 

 

 

 

Diluted Shares Outstanding, GAAP

 

 

43,547,220

 

 

 

24,991,277

 

 

 

43,127,166

 

 

 

25,014,569

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-Average Shares Outstanding - If-Converted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares of Class A Common Stock Outstanding

 

 

23,832,155

 

 

 

23,088,660

 

 

 

23,827,264

 

 

 

23,117,559

 

Vested, Undelivered RSUs

 

 

769,156

 

 

 

621,601

 

 

 

669,021

 

 

 

889,579

 

Conversion of Unvested Common RSUs(6)

 

 

2,295,401

 

 

 

1,281,016

 

 

 

1,344,152

 

 

 

1,007,431

 

Conversion of Participating RSUs

 

 

5,185

 

 

 

27,208

 

 

 

16,483

 

 

 

40,544

 

Conversion of Partnership Units

 

 

15,588,957

 

 

 

15,790,130

 

 

 

15,508,652

 

 

 

15,912,203

 

If-Converted Shares Outstanding

 

 

42,490,854

 

 

 

40,808,615

 

 

 

41,365,572

 

 

 

40,967,316

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of December 31,

 

 

 

 

 

2020

 

2019

 

 

 

 

 

 

 

 

Fully-Diluted Shares Outstanding(8)(9)

 

 

45,420,101

 

 

 

43,066,139

 

 

 

 

 

 

 

 

 

During the three months ended December 31, 2020, 2.4 million Partnership Units and 0.1 million RSUs were included in the Company's share count due to the satisfaction of certain market conditions. As of December 31, 2020, 1.2 million Partnership Units and 0.3 million RSUs were excluded from any share count calculations, as these Partnership Units and RSUs are included only if the Company achieves a volume-weighted average share price of $79 over any consecutive 30-day trading period prior to October 1, 2021.

Footnotes

(1)

This adjustment adds back to GAAP Pretax Income transaction-related compensation expense for 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 the acquisition of CamberView.

(2)

This adjustment adds back to GAAP Pretax Income amounts for the amortization of intangible assets that are associated with Blackstone's IPO, the acquisition of PJT Capital LP on October 1, 2015 and the acquisition of CamberView on October 1, 2018.

(3)

This adjustment adds back to 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. Such expense is reflected in Other Expenses in the Condensed Consolidated Statements of Operations.

(4)

Represents taxes on Adjusted Pretax Income, considering both current and deferred income tax effects for the current ownership structure.

(5)

Represents taxes on Adjusted Pretax Income, 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 as well as return to provision adjustments. This tax rate excludes the tax benefits of the adjustments for transaction-related compensation expense, amortization expense, tax benefit recorded pursuant to the CARES Act as well as certain payments to Blackstone resulting from the October 1, 2015 spin-off.

(6)

Represents the dilutive impact under the treasury method of unvested, non-participating RSUs that have a remaining service requirement.

(7)

Represents the number of shares assuming the conversion of vested Partnership Units, the dilutive impact of unvested Partnership Units with a remaining service requirement, and Partnership Units that achieved certain market conditions.

(8)

Excludes 1.2 million Partnership Units and 0.3 million RSUs as of December 31, 2020 that are included only if the Company achieves a volume-weighted average share price of $79 over any consecutive 30-day trading period prior to October 1, 2021.

(9)

Assumes all Partnership Units and unvested participating RSUs have been converted to shares of the Company's Class A common stock.

Note: Amounts presented in tables above may not add or recalculate due to rounding.

 

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