investor presentation · 7/28/2020 · this presentation contains certain non-gaap financial...

Investor PresentationJuly 28, 2020

Notices and DisclaimersForward-Looking StatementsThis presentation 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 factsand 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 our current beliefs, expectations, and assumptions regarding the future of ourbusiness, 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 toinherent uncertainties, risks, and changes in circumstances that are difficult to predict, many of which are outside our control. Our actual results and financial condition may differ materially from thoseindicated in the forward-looking statements. Therefore, you should not place undue reliance upon any of these forward-looking statements. Important factors that could cause our actual results and financialcondition 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 ofcyberattacks, security vulnerabilities, and Internet disruptions, including breaches of data security and privacy leaks, data loss, and business interruptions; c) the possibility of failure of our computer systemsor communication systems during a catastrophic event, including the outbreak of COVID-19; d) the impact of catastrophic events, such as COVID-19, on the U.S. and the global economy, including businessdisruptions, reductions in employment and an increase in business failures; e) the impact of catastrophic events, such as COVID-19, on our employees and our ability to provide services to our clients andrespond to their needs; f) the failure of third-party service providers to perform their functions; and g) volatility in the political and economic environment.

The risk factors discussed in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2019, filed with the United States Securities and Exchange Commission (“SEC”),as such factors may be updated from time to time in our periodic filings with the SEC, accessible on the SEC’s website at www.sec.gov, could cause the results of PJT Partners to differ materially from thoseexpressed in forward-looking statements. There may be other risks and uncertainties that PJT Partners is unable to predict at this time or that are not currently expected to have a material adverse effect onits business. Any such risks could cause the results of PJT Partners to differ materially from those expressed in forward-looking statements.

Non-GAAP Financial MeasuresThis presentation contains certain non-GAAP financial measures. A “non-GAAP financial measure” is defined as a numerical measure of a company’s financial performance that excludes or includes amountsso as to be different than the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles in the United States of America (“GAAP”) in thestatements of operations, financial condition or cash flows of the company. 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: AdjustedPretax 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 presentation, remove the significant accounting impact of: (a) transaction-related compensation expense, includingexpense 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 The Blackstone Group Inc.(“Blackstone”) and acquisition of CamberView Partners Holdings, LLC (“CamberView”); (b) intangible asset amortization associated with Blackstone’s initial public offering (“IPO”), the acquisition of PJTCapital LP, and the acquisition of CamberView; (c) impairment of CamberView’s former leased space; and (d) the amount PJT Partners has agreed to pay Blackstone related to the net realized cash benefitfrom 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 providedon pages 24 and 28 of this presentation. For additional information about our non-GAAP financial measures, see our filings with the SEC.

DisclaimersThis document is “as is” and is based, in part, on information obtained from other sources. Our use of such information does not imply that we have independently verified or necessarily agree with any ofsuch information, and we have assumed and relied upon the accuracy and completeness of such information for purposes of this document. Neither we nor any of our affiliates or agents, make anyrepresentation or warranty, express or implied, in relation to the accuracy or completeness of the information contained in this document or any oral information provided in connection herewith, or any datait generates and expressly disclaim any and all liability (whether direct or indirect, in contract, tort or otherwise) in relation to any of such information or any errors or omissions therein. Any views or termscontained herein are preliminary, and are based on financial, economic, market and other conditions prevailing as of the date of this document and are subject to change. We undertake no obligations orresponsibility to update any of the information contained in this document. Past performance does not guarantee or predict future performance.

This document does not constitute an offer to sell or the solicitation of an offer to buy any security, nor does it constitute an offer or commitment to lend, syndicate or arrange a financing, underwrite orpurchase or act as an agent or advisor or in any other capacity with respect to any transaction, or commit capital, or to participate in any trading strategies, and does not constitute legal, regulatory,accounting or tax advice to the recipient. This document does not constitute and should not be considered as any form of financial opinion or recommendation by us or any of our affiliates. This document isnot a research report nor should it be construed as such.

Presentation of InformationAll facts, metrics and other information provided herein are presented as of June 30, 2020 unless otherwise stated.

Copyright © 2020, PJT Partners Inc. (and its affiliates, as applicable).

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(1) As of 6/30/20(2) Refinitiv announced volume since spin-off on 10/1/15 to 6/30/20(3) Since spin-off on 10/1/15 to 6/30/20

PJT Partners Is a Premier Advisory-Focused Global Investment Bank

Vision

Leading Businesses across Strategic Advisory, Strategic Capital

Markets, Restructuring, Shareholder Advisory and Fundraising

Global Platform with ~700 employees including

89 Partners in the U.S., Europe and Asia1

$100 Billion+ Capital raised3

$490 Billion+ M&A deals announced2

$450 Billion+ Liabilities restructured3

3

Financial Highlights

(1) Figures are shown ‘as adjusted’; see reconciliations on page 24

$233Million

Strong Revenue Growth

Pretax Income Growth1

$55Million

Strong EPS1

$1.00

+40% YoY +97% YoY +96% YoY

Full Year 2019

$433Million

$95Million

$1.72

+47% YoY +119% YoY +118% YoY

First Half2020

$718Million

$132Million

$2.41

+24% YoY +33% YoY +26% YoY

Second Quarter2020

4

PJT Partners Today…Five Years InNew take on the traditional advisory model

Young, entrepreneurial firm

Global reach and sophistication

Collaboration embedded in culture

Destination for talent at all levels

Client, not market share focused

Asset light business model

Broad based advisory capabilities

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PJT Partners Growth StrategyApproach to Investment

Continuous, disciplined investment

Forward thinking

Opportunity to expand footprint, geographic presence and adjacent capabilities

Ongoing investment in technology initiatives

Further integration of capabilities across businesses to enhance growth

Long-term investment horizon with significant growth opportunities ahead

6

Global Culture…Global Reach

28Languages

19Nationalities

25%+Employees Outside the U.S.

Global Talent Global Client Reach

Global Coverage

EuropeSouth AmericaNorth America Asia

51Countries

MENA

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Why Clients Choose PJT Partners

Broad & Deep Capabilities

> Activism Preparedness & Defense

> Contested Situations

> Corporate Finance

> Corporate Governance

> Debt Capital Markets

> Direct Investments

> Equity Capital Markets/IPO

> ESG/Sustainability

> Fundraising

> Liability Management

> Mergers and Acquisitions

> Private Capital Markets

> Restructuring & Special Situations

> Secondary Advisory

> Shareholder Vote Campaigns

> Strategic IR

Every Client Is Important

Partnership Culture

Advice Is the Main Event

Client Centric

Experienced, Engaged Teams

Mindshare, not Market Share

Fundraising

StrategicCapital Markets

ShareholderAdvisory

Restructuring& SpecialSituations

StrategicAdvisory

SecondaryAdvisory

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Destination for Top Talent: High-Grading The Big Firm Experience

Brand recognition

Entrepreneurial at all levels

Globalreach

Complex transaction flow

Advice is the main

event

Pride in accomplishing the build-out

Concentration of top

practitioners

Partnership culture

Opportunity for meaningful

impact

Collaboration & teamwork

Every Client Is ImportantBroad & Deep Capabilities

Focus on talent development

Commitment to excellence

Cross-product capabilities

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Note: Bloomberg and Refinitiv announced M&A volume as of 12/31/19

Premier Strategic Advisory Franchise

Fundraising

ShareholderAdvisory

Restructuring& Special

Situations


StrategicAdvisory

3Largest Gaming

Transactions

2nd

Largest Financials

Transaction

$235bn+ Global M&A Announced

Volume

#9 Global M&A Announced

Volume

3 of 6 Largest

Healthcare Transactions

#7U.S. M&A

Announced Volume

2019 Highlights

SecondaryAdvisory

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Advising Companies on Their Most Important Strategic Decisions…Large and Small

Fundraising

StrategicAdvisory

SecondaryAdvisory

$59 Billion$63 Billion $48 Billion $26 Billion

$21.4 Billion $18 Billion $17 Billion $11 Billion

€115 Million $123 Million $100 Million$162 Million

Select Transactions > $10 Billion

$290 Million $180 Million $167 Million$445 Million

Select Transactions < $500 Million

ShareholderAdvisory


Situations


11

Expanding Strategic Capital Market Capabilities

Fundraising

StrategicAdvisory

Select Recent Transactions

Structured Products

Debt Capital Markets

Equity Capital Markets

Private Capital Markets

SecondaryAdvisory

ShareholderAdvisory


Situations


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Leading Global Restructuring & Special Situations Franchise

Fundraising

StrategicAdvisory

Advised on 3 of the 4 Largest Restructurings in 1H201

#1 APACAnnounced Restructurings

#1 WorldwideAnnounced Restructurings

#1 WorldwideCompleted Restructurings

$21.9bn $18.0bn

#1 EMEAAnnounced Restructurings

$16.8bn

SecondaryAdvisory

Note: Announced deals sourced from BankruptcyData.com and based on actual liabilities; Rankings sourced from 1H 2020 Refinitiv Restructuring League Table rankings and based on number of deals(1) Based on filed total liabilities and pre-petition capital structures

ShareholderAdvisory


Situations


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Advising Companies Across Multiple Sectors

Fundraising

StrategicAdvisory

SecondaryAdvisory

ShareholderAdvisory


Situations


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Leading Shareholder Advisory Capabilities

Fundraising

StrategicAdvisory

Note: PJT Camberview statistics are cumulative as of 6/30/20; include situations prior to combination with PJT Partners; Campaigns include activism, M&A, Director Against, Say-on-Pay and shareholder proposals

8,200+Client

engagements with

260+ investors

Advised on

315+Complex proxy

votes and campaigns

95+Activism

preparedness and defense mandates

$650bn+Aggregate market cap of Strategic IR

clients

PJT Camberview

SecondaryAdvisory

50+Fortune

100 clients

235+Global public

company clients

ShareholderAdvisory


Situations


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Capital raised

Market Leadership in Alternative Asset ManagementPJT Park Hill

Fundraising

StrategicAdvisory

SecondaryAdvisory

Fundraising

325+ Primary funds represented

3Private Equity, Hedge Fund, Real Estate

3,000+ Investor

relationships

$375bn+

Note: Statistics since inception of businesses

Secondary Advisory

LPAdvisory

$29bn

LP portfolio sales

GPAdvisory

$20bn

GP-led secondary transactions

Structured Solutions

$2bn

Structured products

ShareholderAdvisory


Situations


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2Q202015 2016 2017 2018 2019

Note: Figures are as of period end

2Q202015 2016 2017 2018 2019

Employee Growth

46 51 61 71

45 14 15 7

Strategic Advisory Restructuring PJT Park Hill Corporate

81

37 13 16 527 13 17 420 13 15 318 11 14 3

353419

Partner Growth

473590 678

50 15 17 7

89

696

Premier Destination for Top Talent at All Levels

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~30% of partners still new to the PJT platform

3 5

9

18

23

30

36

5

18 20

27

37

45

50

2014 2015 2016 2017 2018 2019 2Q20

Strategic Advisory: Long-Term Growth Driven by a Growing Roster of Experienced Practitioners

NUMBER OF STRATEGIC ADVISORY PARTNERS1

(1) Partner counts are as of period end(2) As of 10/1/14(3) Individuals from Blackstone Advisory Partners that became part of PJT Partners post spin(4) Inclusive of individuals from CamberView Partners that became part of PJT Partners post acquisition

2,3 4

# of Strategic Advisory Partners with >2 years on PJT platform

Sustained growth in Strategic Advisory partner count

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Employer of ChoiceInclusive, collaborative culture reinforced by...

Giving voice to employees through frequent engagement

Compensation principles rewarding long-term perspectives

Recruiting efforts emphasizing core values, including diversity

Commitment to mentoring and advancement

Fostering a culture of continuous improvement

Training to ensure development of broad-based skills and capabilities

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What Our Employees Are Saying about Us

Commitment to Integrity

Differentiated Culture

Note: Based on PJT’s 2018 & 2019 employee feedback surveys and PJT’s 2020 Working From Home / COVID-19 employee feedback survey

Commitment to Excellence

Respect Among

Colleagues

I feel an intense sense of ownership and that what I do every day actually contributes to the success of the firm.

Collaborative environment where leadership encourages deep investment in relationships.

Shows a commitment to building a truly collaborative culture with exceptional talent.

PJT is a growing firm where it feels like it is ‘ours.’

PJT is a modern, forward thinking company that does well by its employees.

Offers the unique opportunity to build a growing business.

As the company continues to grow, PJT still feels small and tight-knit with an entrepreneurial mindset and culture.

The firm has a clear vision and identity and honestleadership.

The energetic environment and the peoplecontinue to make PJT a great place to work.

Each day, I am presented with new challenges and learning opportunities.

Concern for Well-Being of

Employees

I am truly impressed with PJT and how the company isfocusing on staying in touch with employees.

I truly feel how concerned the firm is for the well-being and work environment of the employees, just like a family.

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Our Clients’ Results Are Our Reputation...

Strong Legacy, New Energy

One Integrated Firm, Complementary Capabilities

A Forward Thinking Mindset

Defined by Deep Relationships

With a Culture Centered Around Collaboration, Clients and Content

And a Focus on the Future

…We are PJT Partners

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Financials

GAAP Statements of Operations

(Amounts in millions, except per share data)

Note: Totals may not add due to rounding

3 Months Ended 6/30, 6 Months Ended 6/30, 12 Months Ended 12/31,

2020 2019 2020 2019 2019 2018

Revenues

Advisory $192.5 $133.0 $349.1 $237.5 $571.8 $451.6 Placement 35.3 28.7 74.3 52.0 133.2 111.0 Interest Income and Other 4.8 5.0 9.4 5.3 12.7 17.7

Total Revenues 232.6 166.7 432.7 294.8 717.6 580.2

Expenses

Compensation and Benefits 154.7 119.2 288.8 214.3 502.2 424.5

Occupancy and Related 8.7 7.8 17.3 14.9 31.5 27.1

Travel and Related 0.5 6.7 5.8 13.7 25.7 23.4

Professional Fees 5.5 5.7 10.1 11.5 21.8 20.6

Communications and Information Services 3.6 3.5 7.1 6.7 13.4 12.5

Depreciation and Amortization 3.7 3.6 7.5 7.3 14.5 10.0

Other Expenses 6.1 6.6 12.9 12.9 26.4 20.6

Total Non-Compensation Expense 28.2 33.9 60.7 66.9 133.3 114.3

Total Expenses 182.9 153.1 349.5 281.3 635.4 538.7

Income Before Provision for Taxes $49.7 $13.6 $83.2 $13.5 $82.2 $41.5

Provision (Benefit) for Taxes 8.8 3.6 10.3 2.5 18.4 (1.0) Net Income $40.9 $10.0 $72.9 $11.0 $63.8 $42.6

Net Income Attributable to Non-Controlling Interests 19.2 5.2 32.4 5.0 34.2 15.4

Net Income Attributable to PJT Partners Inc. $21.7 $4.8 $40.5 $5.9 $29.6 $27.2

Net Income Per Share of Class A Common Stock — Basic $0.88 $0.20 $1.66 $0.24 $1.23 $1.23

Net Income Per Share of Class A Common Stock — Diluted $0.86 $0.20 $1.61 $0.24 $1.21 $1.16

Weighted-Average Shares of Class A Common Stock Outstanding — Basic

24.6 24.6 24.4 24.2 24.0 21.9

Weighted-Average Shares of Class A Common Stock Outstanding — Diluted

25.5 24.6 40.4 24.2 25.0 24.3

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Summary of GAAP to Adjusted Financial Information

(Amounts in millions, except per share data)

Note: Totals may not add due to roundingSee “Notes to Financials” on page 28 for footnote detail

3 Months Ended 6/30, 6 Months Ended 6/30, 12 Months Ended 12/31,

2020 2019 2020 2019 2019 2018

Revenues

Advisory $192.5 $133.0 $349.1 $237.5 $571.8 $451.6

Placement 35.3 28.7 74.3 52.0 $133.2 $111.0

Interest Income and Other 4.8 5.0 9.4 5.3 $12.7 $17.7

Total Revenues $232.6 $166.7 $432.7 $294.8 $717.6 $580.2

Compensation and Benefits Expense

Compensation and Benefits- US GAAP Basis 154.7 119.2 288.8 214.3 502.2 424.5

Adjustments:

Transaction-Related Compensation Expense (1) (3.6) (12.5) (7.5) (25.7) (41.9) (52.6)

Compensation and Benefits- As adjusted $151.1 $106.7 $281.3 $188.6 $460.3 $371.9

Non-Compensation Expense

Non-Compensation- US GAAP Basis 28.2 33.9 60.7 66.9 133.3 114.3

Adjustments:

Amortization of Intangible Assets (2) (1.9) (2.0) (3.9) (4.0) (7.7) (3.7)

Spin-Off-Related Payable Due to Blackstone (3) (0.0) (0.0) (0.1) (0.1) (0.5) (1.1)

Impairment (4) – – – – – (0.3)

Non-Compensation- As adjusted $26.2 $31.9 $56.8 $62.9 $125.1 $109.1

Pretax Income

Income Before Provision for Taxes- US GAAP Basis 49.7 13.6 83.2 13.5 82.2 41.5

Income Before Provision for Taxes- As adjusted $55.2 $28.1 $94.6 $43.2 $132.3 $99.2

Adjusted Taxes(5) 9.4 4.8 10.8 6.3 22.0 16.5

Net Income- As adjusted $45.8 $23.3 $83.8 $37.0 $110.2 $82.7

If-Converted Adjustments

Less: Adjusted Taxes (5) (9.4) (4.8) (10.8) (6.3) (22.0) (16.5)

Add: If-Converted Taxes (6) 14.2 7.1 24.4 10.8 33.7 22.7

Adjusted Net Income, If-Converted $41.1 $21.0 $70.2 $32.4 $98.5 $76.5

Adjusted Net Income, If-Converted Per Share $1.00 $0.51 $1.72 $0.79 $2.41 $1.91

Weighted-Average Shares Outstanding, If-Converted 41.0 41.1 40.8 41.1 41.0 40.1

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406

499 499

580

718

856

$400

$500

$600

$700

$800

$900

2015 2016 2017 2018 2019 LTM Jun 30, 2020

Historical Revenues

HISTORICAL REVENUES $mm

Full Year Revenues

25

Capital Priorities / Capitalization Approach

> CamberView acquisition completed on October 1, 2018

> 112% headcount growth since spin1

> 14% headcount growth last twelve months2,3

> Repurchased approximately 8.3 million shares since spin1,4

> Repurchased approximately 1.2 million shares in 1H204

> $0.20 per annum dividend

(1) Since spin-off on 10/1/15 to 6/30/20(2) As of 6/30/20(3) Pro forma headcount as of 6/30/19 for US Analyst Campus Joiners/Leavers(4) Aggregate of partnership unit exchanges, net share settlement and repurchases of our Class A common stock

Invest in Our Business Offset Dilution Current Dividends1 2 3

Capital Priorities

Debt free

Strong cash position

Capitalization Highlights

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24.6 24.6 23.7 24.2

12.514.9

11.3

14.9

3.5 0.64.7

0.60.6 0.8

4.4 4.941.1 41.0

44.0 44.4

6/30/2019 6/30/2020 6/30/2019 6/30/2020

Class A Common Shares Vested Holdings Units Unvested Holdings Units Unvested RSUs

Significant Investment Without Share Creep

SHARE COUNT1

Share count in mm

Note: Totals may not add due to rounding(1) Assumes all Partnership Units and unvested RSUs are fully converted to Class A common stock. Excluded from 6/30/20 Fully-Diluted Shares Outstanding are 3.6 million Partnership Units and

0.4 million RSUs that have yet to satisfy certain market conditions. Included in Class A Shares are Vested, Undelivered Shares.(2) Fully-Diluted 6/30/20 Vested Holdings Units include ~6.6 million shares held by current and former Blackstone partners(3) Weighted-average for the three months ended 6/30. Assumes all Partnership Units are fully converted and unvested RSUs are converted under the treasury stock method to

Class A common stock.

Fully-Diluted Shares Outstanding (If-Converted) Wtd. Avg. FD Shares Outstanding (Treasury Stock Method)

2

3

27

Notes to Financials

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. This adjustment adds back to GAAP Pretax Income the impairment on CamberView’s former leased space.

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

6. 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. 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.

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investor presentation · 7/28/2020 · this presentation contains certain non-gaap financial...

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