pjt-10q_20160630.htm

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 x No o

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 x No o

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 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 o No x

As of August 4, 2016, there were 17,966,456 shares of Class A common stock, par value $0.01 per share, and 302 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. (“Blackstone”) 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. 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 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 entity subsidiaries.

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,” “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. Forward-looking statements include the information concerning our results of operations, business strategies, 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,” “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, 2015, as filed with the United States Securities and Exchange Commission (“SEC”) on February 29, 2016, 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 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 our Company when you enroll your e-mail address by visiting the “Investor Relations” page of our website at ir.pjtpartners.com/investor-relations. The contents of our website are not, however, a part of this report.

Condensed Consolidated and Combined Statements of Financial Condition (Unaudited)

	June 30,			December 31,
	2016			2015
Assets
Cash and Cash Equivalents	$	103,200		$	82,322
Restricted Cash		—			827
Accounts Receivable (net of allowance for doubtful accounts of $2,173 and $862 at June 30, 2016 and December 31, 2015, respectively)		184,585			169,590
Intangible Assets, Net		18,014			23,646
Goodwill		72,286			75,769
Furniture, Equipment and Leasehold Improvements, Net		37,047			31,490
Other Assets		26,211			14,920
Deferred Tax Assets		74,043			68,688
Total Assets	$	515,386		$	467,252

Liabilities, Redeemable Non-Controlling Interests and Equity
Accrued Compensation and Benefits	$	78,960		$	81,221
Accounts Payable, Accrued Expenses and Other Liabilities		29,147			29,533
Deferred Rent Liability		17,042			12,414
Taxes Payable		878			1,672
Deferred Revenue		5,159			477
Total Liabilities		131,186			125,317

Commitments and Contingencies

Redeemable Non-Controlling Interests		298,785			309,855

Equity
Class A Common Stock, par value $0.01 per share (3,000,000,000 shares authorized; 17,966,456 issued and outstanding at June 30, 2016; 17,966,456 issued and outstanding at December 31, 2015)		180			180
Class B Common Stock, par value $0.01 per share (1,000,000 shares authorized; 302 issued and outstanding at June 30, 2016; 300 issued and outstanding at December 31, 2015)		—			—
Additional Paid-In Capital		97,825			43,132
Retained Deficit		(13,114	)		(11,184	)
Accumulated Other Comprehensive Income (Loss)		524			(48	)
Total Equity		85,415			32,080
Total Liabilities, Redeemable Non-Controlling Interests and Equity	$	515,386		$	467,252

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2016			2015			2016			2015
Revenues
Advisory Fees	$	59,078		$	46,592		$	140,632		$	105,266
Placement Fees		28,652			25,189			60,603			48,323
Interest Income and Other		1,554			688			3,353			1,205
Total Revenues		89,284			72,469			204,588			154,794
Expenses
Compensation and Benefits		71,964			60,125			160,135			139,760
Occupancy and Related		6,622			8,762			13,040			14,044
Travel and Related		2,802			3,055			5,547			6,359
Professional Fees		6,691			3,007			10,187			5,536
Communications and Information Services		2,647			1,761			4,700			3,167
Depreciation and Amortization		4,025			1,508			7,926			3,035
Other Expenses		4,788			690			10,575			4,021
Total Expenses		99,539			78,908			212,110			175,922
Loss Before Provision (Benefit) for Taxes		(10,255	)		(6,439	)		(7,522	)		(21,128	)
Provision (Benefit) for Taxes		(5,539	)		584			(4,237	)		2,002
Net Loss		(4,716	)	$	(7,023	)		(3,285	)	$	(23,130	)
Net Loss Attributable to Redeemable Non-Controlling Interests		(4,393	)					(3,217	)
Net Loss Attributable to PJT Partners Inc.	$	(323	)				$	(68	)
Net Loss Per Share of Class A Common Stock — Basic and Diluted	$	(0.02	)				$	(0.00	)
Weighted-Average Shares of Class A Common Stock Outstanding — Basic and Diluted		18,264,742						18,263,365
Dividends Declared Per Share of Class A Common Stock	$	0.05					$	0.10
Revenues Earned from Affiliates
Advisory Fees	$	—		$	960		$	—		$	3,410
Placement Fees	$	—		$	10,300		$	—		$	11,368

Condensed Consolidated and Combined Statements of Comprehensive Income (Loss) (Unaudited)

	Shares															Accumulated			Former						Redeemable
	Class A		Class B			Class A		Class B		Additional						Other			Parent						Non-
	Common		Common			Common		Common		Paid-In			Retained			Comprehensive			Company						Controlling
	Stock		Stock			Stock		Stock		Capital			Deficit			Income (Loss)			Investment			Total			Interests
Balance at December 31, 2014		—		—		$	—	$	—	$	—		$	—		$	1,010		$	331,310		$	332,320		$	—
Net Loss		—		—			—		—		—			—			—			(23,130	)		(23,130	)		—
Currency Translation Adjustment		—		—			—		—		—			—			828			—			828			—
Net Decrease in Former Parent Company Investment		—		—			—		—		—			—			—			(26,165	)		(26,165	)		—
Balance at June 30, 2015		—		—		$	—	$	—	$	—		$	—		$	1,838		$	282,015		$	283,853		$	—

Balance at December 31, 2015		17,966,456		300		$	180	$	—	$	43,132		$	(11,184	)	$	(48	)	$	—		$	32,080		$	309,855
Net Loss		—		—			—		—		—			(68	)		—			—			(68	)		(3,217	)
Currency Translation Adjustment		—		—			—		—		—			—			572			—			572			—
Dividends		—		—			—		—		—			(1,862	)		—			—			(1,862	)		—
Non-Cash Contributions from Former Parent		—		—			—		—		4,061			—			—			—			4,061			—
Equity-Based Compensation		—		—			—		—		23,937			—			—			—			23,937			18,225
Forfeiture Liability for Equity Awards		—		—			—		—		653			—			—			—			653			—
Net Share Settlement		—		—			—		—		—			—			—			—			—			(36	)
Issuance of Shares of Class B Common Stock		—		4			—		—		(3,401	)		—			—			—			(3,401	)		3,401
Forfeitures of Shares of Class B Common Stock		—		(2	)		—		—		1,511			—			—			—			1,511			(1,511	)
Adjustment of Redeemable Non- Controlling Interests to Redemption Value		—		—			—		—		27,932			—			—			—			27,932			(27,932	)
Balance at June 30, 2016		17,966,456		302		$	180	$	—	$	97,825		$	(13,114	)	$	524		$	—		$	85,415		$	298,785

	Six Months Ended June 30,
	2016			2015
Operating Activities
Net Loss	$	(3,285	)	$	(23,130	)
Adjustments to Reconcile Net Loss to Net Cash Provided by Operating Activities
Equity-Based Compensation Expense		42,185			19,345
Depreciation Expense		2,342			1,709
Amortization Expense		5,584			1,326
Bad Debt Expense (Recovery)		1,185			(740	)
Foreign Currency Transaction Gains		(320	)		—
Deferred Taxes		(1,750	)		—
Other Non-Cash Amounts Included in Net Loss		—			(365	)
Cash Flows Due to Changes in Operating Assets and Liabilities
Accounts Receivable		(16,211	)		29,912
Receivable from Affiliates		—			(8,273	)
Due from Blackstone		—			2,750
Deferred Tax Assets		(228	)		—
Other Assets		(11,853	)		(3,447	)
Accrued Compensation and Benefits		(815	)		46,127
Accounts Payable, Accrued Expenses and Other Liabilities		4,641			10,048
Deferred Rent Liability		5,049			2,187
Taxes Payable		(795	)		2
Deferred Revenue		4,679			(57	)
Net Cash Provided by Operating Activities		30,408			77,394
Investing Activities
Proceeds from Repayment of Note Issued to Employee		538			—
Purchases of Furniture, Equipment and Leasehold Improvements		(8,716	)		—
Change in Restricted Cash		800			—
Net Cash Used in Investing Activities		(7,378	)		—
Financing Activities
Dividends		(1,862	)		—
Principal Payments on Capital Lease Obligations		(6	)		—
Employee Taxes Paid for Shares Withheld for Taxes		(36	)		—
Net Decrease from Former Parent Company Investment		—			(45,146	)
Net Cash Used in Financing Activities		(1,904	)		(45,146	)
Effect of Exchange Rate Changes on Cash and Cash Equivalents		(248	)		—
Net Increase in Cash and Cash Equivalents		20,878			32,248
Cash and Cash Equivalents, Beginning of Period		82,322			38,533
Cash and Cash Equivalents, End of Period	$	103,200		$	70,781
Supplemental Disclosure of Cash Flows Information
Payments for Income Taxes, including those to Former Parent	$	3,886		$	1,148
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)

On October 7, 2014, the board of directors of the general partner of The Blackstone Group L.P. (the “former Parent” or “Blackstone”) approved a plan to separate Blackstone’s strategic advisory services, restructuring and reorganization advisory services and Park Hill Group businesses from Blackstone and combine the separated business with PJT Capital (as defined below) to form PJT Partners (“PJT Partners” or the “Company”), which separation occurred on October 1, 2015.

On October 1, 2015, Blackstone 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.”

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” 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, 2015. As of June 30, 2016, there were 17,966,456 and 302 shares, respectively, of Class A common stock and Class B common stock issued and outstanding.

Following the spin-off, PJT Partners Inc. became 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 June 30, 2016, the non-controlling interest was 47.2%.

PJT Partners delivers a wide array of strategic advisory, restructuring and special situations and private fund advisory and placement services to corporations, financial sponsors, institutional investors and governments around the world. The Company offers a balanced portfolio of advisory services designed to help its clients realize major corporate milestones and solve complex issues. Also, through the Park Hill Group, the Company provides private fund advisory and placement services for alternative investment managers, including private equity funds, real estate funds and hedge funds.

The Company prepared the accompanying unaudited condensed consolidated and combined 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 and combined financial statements, including these notes, are unaudited and exclude some of the disclosures required in audited financial statements. Management believes it has made all necessary adjustments (consisting of only normal recurring items) so that the condensed consolidated and combined financial statements are presented fairly and that estimates made in preparing its condensed consolidated and combined 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 and combined 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, 2015 filed with the SEC. For a comprehensive disclosure of the Company’s significant accounting policies, see 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 the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.

Notes to Condensed Consolidated and Combined Financial Statements – Continued (Unaudited)

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

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 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 Company did not operate as an independent, stand-alone entity for all periods included in these condensed consolidated and combined financial statements. Prior to the spin-off on October 1, 2015, the Company’s operations were included in Blackstone’s results as they were historically managed as part of Blackstone, in conformity with GAAP. For periods prior to October 1, 2015, the accompanying condensed consolidated and combined financial statements were prepared on a stand-alone basis and were derived from the consolidated financial statements and accounting records of Blackstone. Prior to October 1, 2015, the condensed consolidated and combined financial statements included certain assets that were historically held at the Blackstone corporate level but were specifically identifiable or otherwise attributable to these financial statements, primarily goodwill and intangible assets. Additionally prior to October 1, 2015, Blackstone’s net investment in PJT Partners is shown as Former Parent Company Investment in lieu of Stockholders’ Equity in the condensed consolidated and combined financial statements.

The Condensed Consolidated and Combined Statements of Operations reflect intercompany expense allocations made to the Company by Blackstone for certain corporate functions and for shared services provided by Blackstone prior to October 1, 2015. Where possible, these allocations were made on a specific identification basis and, in other cases, these expenses were allocated by Blackstone based on a pro rata basis of headcount, usage or some other basis depending on the nature of the allocated cost. Expenses without a specific consumption based indicator were allocated based on revenues adjusted for factors such as the size and complexity of the business. See Note 10. “Transactions with Related Parties” for further information on expenses allocated by Blackstone.

Both the Company and Blackstone consider the basis on which the expenses were previously allocated to be a reasonable reflection of the utilization of services provided to or the benefit received by the Company during the periods presented prior to October 1, 2015. The allocations may not, however, reflect the expense the Company would have incurred as an independent, publicly traded company for the periods presented. Actual costs that may have been incurred if PJT Partners had been a stand-alone company would depend on a number of factors, including the chosen organizational structure, which functions were outsourced or performed by employees and strategic decisions made in areas such as information technology and infrastructure. Following the spin-off, the Company has been performing these functions using its own resources or purchased services. For an interim period, however, some of these functions may continue to be provided by Blackstone, pursuant to a transition services agreement for a period of 24 months with the option for Blackstone or the Company to terminate any given service with 60 days’ notice. See Note 10. “Transactions with Related Parties” for further information on services provided by Blackstone to the Company for the three and six months ended June 30, 2016.

The Company changed the presentation of certain prior year financial statement amounts to conform to the current year presentation. Previously, the Company reported Interest Income and Other Revenue in separate financial statement captions and combined Depreciation and Amortization Expense with Other Expenses. These changes in presentation had no effect on Net Income (Loss).

Notes to Condensed Consolidated and Combined Financial Statements – Continued (Unaudited)

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

During the second quarter of 2016, a misstatement was identified in the accounting for certain partnership interests in PJT Partners Holdings LP, which resulted in a reclassification from Redeemable Non-Controlling Interests to Retained Deficit and Additional Paid-In Capital. In accordance with Accounting Standards Codification (“ASC”) Topic 250, Accounting Changes and Error Corrections, the Company evaluated the materiality of the misstatement from quantitative and qualitative perspectives, and concluded that it was immaterial to the prior periods. Consequently, the Company revised the historical consolidated financial information presented herein. The immaterial restatement resulted in a reduction in Retained Deficit and an increase in Additional Paid-In Capital of $99.8 million and $43.1 million, respectively, and a decrease in Redeemable Non-Controlling Interests of $142.9 million in the Company’s Condensed Consolidated and Combined Statements of Financial Condition and Statements of Changes in Equity as of December 31, 2015. This immaterial restatement had no impact in the Company’s Condensed Consolidated and Combined Statements of Operations and Statements of Cash Flows.

The Company records loss contingencies if (a) information available prior to issuance of the condensed consolidated and combined financial statements indicates that it is probable that an asset had been impaired or a liability had been incurred at the date of the condensed consolidated and combined financial statements, and (b) the amount of loss can be reasonably estimated. If one or both criteria for accrual are not met, but there is at least a reasonable possibility that a loss will occur, the Company does not record an accrual for a loss contingency but describes the contingency and provides detail, when possible, of the estimated potential loss or range of loss. If an estimate cannot be made, a statement to that effect is made. Costs incurred with defending matters are expensed as incurred. Accruals related to loss contingencies are recorded in Other Expenses in the Condensed Consolidated and Combined Statements of Operations.

Receipts from insurance reimbursements up to the amount of the losses recognized are considered recoveries. These recoveries are accounted for when they are probable of receipt. Insurance recoveries are not recognized prior to the recognition of the related loss. Any receivable for insurance recoveries is recorded separately from the corresponding liability, and only if recovery is determined to be probable and reasonably estimable. Insurance reimbursements are recorded in Other Expenses in the Condensed Consolidated and Combined Statements of Operations.

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. In recent re-deliberations, 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

Notes to Condensed Consolidated and Combined Financial Statements – Continued (Unaudited)

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

after December 15, 2016. The Company is currently evaluating the impact of the new guidance and the method of adoption on the condensed consolidated and combined financial statements.

In September 2015, the FASB issued guidance on measurement-period adjustments with respect to business combinations. The amendments apply to entities that have reported provisional amounts for items in a business combination for which the accounting is incomplete by the end of the reporting period in which the combination occurs and during the measurement period have an adjustment to provisional amounts recognized. An entity is now required to recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined, not on a retrospective basis as previously required. The amendments apply prospectively to adjustments to provisional amounts that occur in fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. Adoption of this guidance did not have a material impact on the Company’s condensed consolidated and combined financial statements.

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. The Company is currently assessing the impact the adoption of this guidance will have on its condensed consolidated and combined financial statements.

In March 2016, the FASB issued amendments to the guidance on employee share-based payment accounting intended to improve the accounting for employee share-based payments. This amended guidance simplifies several aspects of the accounting for share-based payment award transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification in the statement of cash flows. The amendments are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted. The Company elected to early adopt the new guidance in the second quarter of fiscal year 2016, which requires the Company to reflect any adjustments as of January 1, 2016, the beginning of the annual period that includes the interim period of adoption. The primary impact of the adoption was the recognition of excess tax benefits in the Company’s Provision for Taxes rather than Additional Paid-In Capital for all periods in the year ended December 31, 2016. As no excess tax benefits were previously recognized during the three months ended March 31, 2016, no adjustments are required to show the impact to the previously reported amounts in the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2016. Additionally, there were no previously unrecognized excess tax benefits. The Company elected to apply the presentation requirements for cash flows related to excess tax benefits retrospectively and prior periods have been adjusted to remove the amounts of excess tax benefits presented in operating and financing activities in the Condensed Consolidated and Combined Statements of Cash Flows. Such prior period adjustment was immaterial. Additionally, the Company has retrospectively included in financing activities on the Condensed Consolidated and Combined Statements of Cash Flows amounts for employee taxes paid in instances when the Company withheld shares for tax withholding purposes. The Company has elected to maintain its current accounting policy of estimating forfeitures in its computation of equity-based compensation expense. Upon the adoption of this guidance, the Company excluded the estimated impact of excess tax benefits and tax deficiencies from the calculation of assumed proceeds for determining diluted net income (loss) per share using the treasury stock method. There was no impact on net loss per share of Class A common stock.

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 the adoption of this guidance will have on its condensed consolidated and combined financial statements.

Notes to Condensed Consolidated and Combined Financial Statements – Continued (Unaudited)

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

On October 1, 2015, PJT Partners Holdings LP acquired all of the outstanding equity interests in PJT Capital LP. The effect of the transaction was a transfer of PJT Capital LP interests to PJT Partners Holdings LP in exchange for unvested PJT Partners Holdings LP units. No other consideration was transferred. This transaction was accounted for as a business combination and PJT Capital LP’s operating results have been included in the Company’s financial statements from the date of the transaction. The Company incurred $0.1 million of costs related to the acquisition which were included in Professional Fees in the Condensed Consolidated and Combined Statements of Operations in the fourth quarter of 2015.

The following table summarizes the estimated allocation of the purchase price for PJT Capital LP at the acquisition date as well as measurement period adjustments to date:


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

Large accelerated filer	o		Accelerated filer	o
Non-accelerated filer	x	(Do not check if a smaller reporting company)	Smaller reporting company	o

		Page
PART I.	FINANCIAL INFORMATION

ITEM 1.	FINANCIAL STATEMENTS	3

	Unaudited Condensed Consolidated and Combined Financial Statements — June 30, 2016 and 2015:

	Condensed Consolidated and Combined Statements of Financial Condition as of June 30, 2016 and December 31, 2015	3

	Condensed Consolidated and Combined Statements of Operations for the Three and Six Months Ended June 30, 2016 and 2015	4

	Condensed Consolidated and Combined Statements of Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2016 and 2015	5

	Condensed Consolidated and Combined Statements of Changes in Equity for the Six Months Ended June 30, 2016 and 2015	6

	Condensed Consolidated and Combined Statements of Cash Flows for the Six Months Ended June 30, 2016 and 2015	7

	Notes to Condensed Consolidated and Combined Financial Statements	8

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	26

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	36

ITEM 4.	CONTROLS AND PROCEDURES	36

PART II.	OTHER INFORMATION

ITEM 1.	LEGAL PROCEEDINGS	37

ITEM 1A.	RISK FACTORS	37

ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	38

ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	38

ITEM 4.	MINE SAFETY DISCLOSURES	38

ITEM 5.	OTHER INFORMATION	38

ITEM 6.	EXHIBITS	39

SIGNATURES		40

	December 31, 2015		Measurement Period Adjustments			June 30, 2016
Assets
Cash	$	12,653	$	—		$	12,653
Accounts Receivable		1,170		—			1,170
Furniture, Equipment and Leasehold Improvements		334		—			334
Other Assets		362		—			362
Intangible Assets		13,300		—			13,300
Deferred Tax Assets		—		3,483			3,483
Goodwill		6,896		(3,483	)		3,413
		34,715		—			34,715