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What changed in PJT Partners Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of PJT Partners Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+276 added−282 removedSource: 10-K (2024-02-28) vs 10-K (2023-02-24)

Top changes in PJT Partners Inc.'s 2023 10-K

276 paragraphs added · 282 removed · 230 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeDelivering optimal outcomes is what we strive for – our clients’ results are our reputation. • Premier Destination for Top Talent at All Levels. We have successfully recruited and will continue to recruit a wide range of diverse, talented colleagues at all levels who are attracted to our broad range of world-class advisory services and our unique culture.
Biggest changeWe have successfully recruited, and will continue to recruit, a wide range of talented colleagues from a diverse range of backgrounds and experiences who are attracted to our world-class advisory services and our unique culture. Since our earliest days, we have maintained that having the best people and an inclusive culture would be key to building an enduring franchise.
We benefit from close collaboration across all our businesses, increased dialogues with financial sponsors as well as the increased footprint and product expertise and capabilities of our growing Strategic Advisory business. Human Capital Management Philosophy Our culture drives our success.
We benefit from close collaboration across all our businesses, increased dialogues with financial sponsors as well as the increased footprint, product expertise and capabilities of our growing Strategic Advisory business. Human Capital Management Philosophy Our culture drives our success.
The FCPA also requires maintenance of appropriate books and records and maintenance of adequate internal controls to prevent and detect possible FCPA violations. Similarly, the UK Bribery Act prohibits us from bribing, being bribed or making other prohibited payments to government officials or other persons to obtain or retain business or gain some other business advantage.
The FCPA also requires maintenance of appropriate books and records and maintenance of adequate internal controls to prevent and detect possible FCPA violations. Similarly, the UK Bribery Act prohibits us from bribing, being bribed or making other 9 prohibited payments to government officials or other persons to obtain or retain business or gain some other business advantage.
We are generally prohibited from engaging in transactions involving any country, region or government that is subject to such comprehensive sanctions. 9 The Foreign Corrupt Practices Act (the “FCPA”) and the UK 2010 Bribery Act (the “UK Bribery Act”) prohibit the payment of bribes to foreign government officials and political figures.
We are generally prohibited from engaging in transactions involving any country, region or government that is subject to such comprehensive sanctions. The Foreign Corrupt Practices Act (the “FCPA”) and the UK 2010 Bribery Act (the “UK Bribery Act”) prohibit the payment of bribes to foreign government officials and political figures.
PJT Partners LP, through which our advisory and placement services are conducted in the U.S., as a registered broker-dealer, is subject to regulation and oversight by the SEC.
PJT Partners LP, through which our advisory and placement services are conducted in the U.S., is a registered broker-dealer, and is subject to regulation and oversight by the SEC.
The ownership interests of the holders (other than PJT Partners Inc.) of common units of partnership interest in PJT Partners Holdings LP (“Partnership Units”) are reflected as non-controlling interests in PJT Partners Inc.’s consolidated financial statements as of December 31, 2022. Partnership Unit holders are granted an accompanying share of Class B common stock.
The ownership interests of the holders (other than PJT Partners Inc.) of common units of partnership interest in PJT Partners Holdings LP (“Partnership Units”) are reflected as non-controlling interests in PJT Partners Inc.’s consolidated financial statements as of December 31, 2023. Partnership Unit holders are granted an accompanying share of Class B common stock.
As the world becomes increasingly more complex, clients value our ability to provide differentiated advice on a wide range of strategic matters, restructurings and recapitalizations, capital structure solutions, investor issues and fundraising alternatives. • Further Integration of Capabilities Across Businesses to Enhance Growth.
As the world becomes increasingly more complex, clients value our ability to provide differentiated advice on a wide range of strategic matters, restructurings and recapitalizations, capital structure solutions, investor issues and fundraising alternatives. • Further Integration of Capabilities Across Businesses.
Our premier advisory practices allow us to provide best-in-class advice to clients whether they are looking for growth through strategic alternatives, advice in shareholder engagement or in a restructuring or reorganization, or access to capital. Our deep networks across businesses allow us to connect clients and help them meet their strategic objectives. 5 • Asset- Light Business Model.
Our premier advisory franchises allow us to provide best-in-class advice to clients whether they are looking for growth through strategic alternatives, advice in shareholder engagement or in a restructuring or reorganization, or access to capital. Our deep networks across businesses allow us to connect clients and help them to meet their strategic objectives. • Asset-Light Business Model.
Our directors periodically attend partner meetings and dinners, participate in our town hall meetings, and meet with groups and individuals at our Company. • Directors receive relevant employee communications, including announcements of transactions on which the Company has advised. Employee Feedback and Engagement We view active dialogue with our employees as essential to maintaining our unique culture.
Our directors periodically attend partner meetings and dinners, participate in internal town hall meetings, and meet with groups and individuals at our Company. • Members of the Board receive relevant employee communications, including announcements of transactions on which the Company has advised. Employee Feedback and Engagement We view active dialogue with our employees as essential to maintaining our unique culture.
The Board holds CEO succession planning discussions in executive sessions led by the Lead Independent Director. 6 • The Board, including the Compensation Committee, maintains an active information flow and directs senior management to update and consult it regularly on key talent hires and other important aspects of the C ompany’s human capital strategy.
The Board holds CEO succession planning discussions in executive sessions led by the Lead Independent Director. • The Board, including the Compensation Committee, maintains an active information flow and directs senior management to update and consult it regularly on key talent hires and other important aspects of the Company’s human capital strategy.
We and the holders of Partnership Units (other than PJT Partners Inc.) have entered into an exchange agreement under which they (or certain permitted transferees) have the right, subject to the terms and conditions set 10 forth in the partnership agreement of PJT Partners Holdings LP, on a quarterly basis, to exchange all or part of their Partnership Units for cash or, at our el ection, for shares of our Class A common stock on a one-for-one basis, subject to customary conversion rate adjustments for splits, unit distributions and reclassifications.
We and the holders of Partnership Units (other than PJT Partners Inc.) have entered into an exchange agreement, as amended, under which they (or certain permitted transferees) have the right, subject to the terms and conditions set forth in the partnership agreement of PJT Partners Holdings LP, on a quarterly basis, to exchange all or part of their Partnership Units for cash or, at our election, for shares of our Class A common stock on a one-for-one basis, subject to customary conversion rate adjustments for splits, unit distributions and reclassifications.
Professionals at all levels choose to join PJT Partners because we offer the best qualities of a much larger, established organization along with the best qualities of a small, entrepreneurial firm where advice is the main event and where individual contribution matters. • Collaboration Embedded in Culture.
Professionals at all levels choose to join PJT Partners because we offer the best qualities of a much larger, established organization along with the best qualities of a small, entrepreneurial firm where advice is the main event and where individual contributions matter. • Collaboration Embedded in Culture.
By operating in a more integrated and cohesive manner, we offer our clients a comprehensive and differentiated suite of advisory services. In addition, our deep networks across our businesses allow us to connect clients and provide incremental value in helping them meet their strategic objectives.
By operating in a more integrated and cohesive manner, we offer our clients a comprehensive and differentiated suite of advisory services. Moreover, our deep networks across our businesses allow us to connect clients and provide additional value in helping them meet their strategic objectives.
As a matter of public policy, regulatory bodies in the U.S. and the rest of the world are charged with safeguarding the integrity of the securities and other financial markets and with protecting the interests of clients participating in those markets. In the U.S., the SEC is the federal agency responsible for the administration of the federal securities laws.
As a matter of public policy, regulatory bodies in the U.S. and the rest of the world are charged with safeguarding the integrity of the securities and other financial markets and with protecting the interests of 8 participants in those markets. In the U.S., the SEC is the federal agency responsible for the administration of the federal securities laws.
PJT Park Hill PJT Park Hill, our leading global alternative asset advisory and fundraising business, provides private fund advisory and fundraising services for a diverse range of investment strategies. Moreover, PJT Park Hill is the only group among its peers with top-tier dedicated private equity, hedge fund, private credit, real estate and secondary advisory groups.
PJT Park Hill PJT Park Hill, our leading global alternative asset advisory and fundraising business, provides private fund advisory and fundraising services for a diverse range of investment strategies. Moreover, PJT Park Hill is the only group among its peers with top-tier, dedicated private equity, alternative credit/hedge funds, real estate, directs and private capital solutions groups.
For a broad group of employees, discretionary bonuses also typically include a Company stock component to ensure long-term focus and alignment with the interests of our Company.
For a broad group of employees, discretionary bonuses also typically include a Company stock component to reinforce long-term focus and alignment with the interests of our Company and shareholders.
Accordingly, as of December 31, 2022, the holders of 10,339,443 vested and unvested Partnership Units have requested, and the Board has approved, that the shares of Class B common stock held by them provide them with the same number of votes for the election and removal of directors as they do for all other matters.
Accordingly, as of December 31, 2023, the holders of 10.2 million vested and unvested Partnership Units have requested, and the Board has approved, that the shares of Class B common stock held by them provide them with the same number of votes for the election and removal of directors as they do for all other matters.
The consistently positive themes include a strong belief in our commitment to doing the right thing for both our clients and our Company, a belief that PJT Partners has a differentiated culture, a commitment to excellence and a strong sense of respect among colleagues.
The recurring positive themes of these employee surveys include a strong belief in our commitment to doing the right thing for both our clients and our Company, a belief that PJT Partners has a differentiated culture, a commitment to excellence and a strong sense of respect among colleagues.
The price per Partnership Unit to be received in a cash-settled exchange will be equal to the fai r value of a share of our Class A common stock (determined in accordance with and subject to adjustment under the exchange agreement).
The price per Partnership Unit to be received in a cash-settled exchange will be equal to the fair value of a share of our Class A common stock (determined in accordance with and subject to adjustment under the exchange agreement, as amended).
From day one of our Company, we have been committed to developing our culture as a commercial differentiator – one that attracts and retains people in order to create a world-class Company built for the long term. Our culture is defined by strong character, differentiated capabilities and collaboration.
From day one of our Company, we have been committed to developing our culture as a commercial differentiator – one that attracts and retains people in order to create a world-class firm built for the long term. Our culture is defined by uncompromising character, deep capabilities, broad domain expertise and strong collaboration.
Our capital markets advisory team advises and executes public and private capital raises in the debt and equity capital markets, including debt financings, acquisition financings, structured product offerings, public equity raises including IPO and SPAC offerings, private capital raises for early and later stage companies as well as other capital structure related matters.
Our capital markets advisory team advises and executes public and private capital raises in the debt and equity capital markets, including debt financings, acquisition financings, structured product offerings, public equity raises including initial public offerings and special purpose acquisition company offerings, private capital raises for early and later stage companies as well as other capital structure related matters.
Reinforcement of the culture we are building comes through engagement with our employees, the reward principles we apply to compensation and promotion decisions and our various talent development initiatives, which continue to evolve as we grow. As of December 31, 2022, we employed 907 individuals globally, including 105 partners.
Reinforcement of the culture we are building comes through engagement with our employees, the reward principles we apply to compensation and promotion decisions and our various talent development initiatives, which continue to evolve as we grow. As of December 31, 2023, we employed 1,012 individuals globally, including 115 partners.
Organizational Structure PJT Partners Inc. is a holding company and its only material asset is its controlling equity interest in PJT Partners Holdings LP, and certain cash and cash equivalents it may hold from time to time as described herein in “Part II. Item 5.
Organizational Structure 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 described herein in “Part II. Item 5.
PJT Partners combines decades of experience and excellence with the energy and enthusiasm of a new firm. Our teams act as trusted advisors to a diverse group of clients around the world, providing clients with creative solutions addressing a range of complex strategic matters.
We combine decades of experience and excellence with the energy and enthusiasm of a new firm. Our teams act as trusted advisors to a diverse group of clients around the world, providing clients with creative solutions to address a range of complex strategic matters.
Under the Board’s oversight, the C ompany continuously refines human capital priorities based on business drivers, employee feedback and the overall environment for talent. • Directors actively engage and spend time with our senior management and other employees in a variety of ways.
With the Board’s oversight, the Company continuously refines human capital priorities based on business drivers, employee feedback and the overall environment for talent. 6 • Members of the Board actively engage and spend time with our senior management and other employees in a variety of ways.
In the event that PJT Partners Inc. elects to fund cash-settled e xchanges of Partnership Un its with new issuances of Class A common stock, the fai r value of a share of our Class A common stock will be deemed to be equal to the net proceeds per share of Class A common stock received by PJT Partners Inc. in the related issuance.
In the event that PJT Partners Inc. elects to fund cash-settled exchanges of Partnership Units with new issuances of Class A common stock, the fair value of a share of our Class A common stock will be deemed to be equal to the net proceeds per share of Class A common stock received by PJT Partners Inc. in the related issuance.
Additionally, the SEC’s uniform net capital rule imposes certain requirements that may have the effect of prohibiting a broker-dealer from distributing or withdrawing capital and requiring prior notice to the SEC for certain withdrawals of capital.
Additionally, the SEC’s uniform net capital rule imposes certain requirements that may have the effect of prohibiting a broker-dealer from distributing or withdrawing capital and requiring prior notice to the SEC for certain withdrawals of capital. In addition to the regulation we are subject to in the U.S., we are subject to regulation internationally.
We have numerous other channels through which we engage with our employees on human capital topics, including our talent development committee, women’s development series, individual performance reviews and other less formal forums, such as regularly scheduled meetings by business and level. We use these channels to solicit input on issues, such as resourcing and training priorities.
We also maintain several other channels to engage with our employees on human capital topics, including our talent development committee, women’s development series, individual performance reviews and other less formal forums, such as regularly scheduled meetings by business and level. We use these channels to discuss employee feedback and ideas relating to issues such as resourcing and training priorities.
Our employees, including our summer interns, have made significant contributions of their time to the communities in which we operate. We have continued to require our summer program participants to complete a community volunteering project as a pre-requisite for a full-time offer. Competition The financial services industry is intensely competitive, and we expect it to remain so.
Our employees also have the opportunity to participate in PJT fundraising events and volunteer days, and we have continued to require our summer program participants to complete a community volunteering project as a pre-requisite for a full-time offer. Competition The financial services industry is intensely competitive, and we expect it to remain so.
The Company has entered into a tax receivable agreement with the holders of Partnership Units (other than PJT Partners Inc.) that provides for the payment by PJT Partners Inc. to exchanging holders of Partnership Units of 85% of the benefits, if any, that PJT Partners Inc. is deemed to realize as a result of the increases in tax basis related to such exchanges of Partnership Units and of certain other tax benefits related to entering into the tax receivable agreement, including tax benefits attributable to payments under the tax receivable agreement.
Accordingly, in this event, the price per Partnership Unit to which an exchanging holder of Partnership Units will be entitled may be greater than or less than the then-current market value of our Class A common stock. 10 The Company has entered into a tax receivable agreement with the holders of Partnership Units (other than PJT Partners Inc.) that provides for the payment by PJT Partners Inc. to exchanging holders of Partnership Units of 85% of the benefits, if any, that PJT Partners Inc. is deemed to realize as a result of the increases in tax basis related to such exchanges of Partnership Units and of certain other tax benefits related to entering into the tax receivable agreement, including tax benefits attributable to payments under the tax receivable agreement.
We have always aimed to provide pay, benefits and other support that seeks to meet the varying needs of our employees. Our total rewards package is based on competitive pay and is often structured to include discretionary bonuses that include long-term incentives. Such incentives are designed to ensure alignment with our shareholders and the overall success of our Company.
Employer of Choice Initiatives We prioritize the health and well-being of our employees and their families. We have always aimed to provide pay, benefits and other support that seeks to meet the varying needs of our employees. Our total rewards package is based on competitive pay and is often structured to include discretionary bonuses that include long-term incentives.
It also lists individuals, groups and entities, such as terrorists and narcotics traffickers, designated under programs that are not country-specific. Collectively, such individuals and companies are called “Specially Designated Nationals,” or SDNs. Assets of SDNs are blocked, and we are generally prohibited from dealing with them.
It also lists individuals, groups and entities designated under programs that are not country-specific. Collectively, such individuals and companies are called “Specially Designated Nationals,” or SDNs. Assets of SDNs are blocked, and we are generally prohibited from dealing with them. In addition, OFAC administers a number of comprehensive sanctions and embargoes that target certain countries, governments and geographic regions.
Since our earliest days, we have maintained that having the best people would be key to building an enduring franchise. Our perspective was, and still is, that a great team not only brings in top-tier clients, but also appeals to a wide-range of talented colleagues.
Our perspective was, and still is, that a great team not only brings in top-tier clients, but also appeals to a wide-range of talented colleagues.
These essential qualities help us build stronger client relationships and better outcomes for our clients. Our human capital successes are evident through the number and quality of hires we have made, our historically low levels of attrition and the consistent positive feedback we receive through our employee surveys.
These qualities ensure we are best placed to provide unique commercial advice to our clients. Our human capital successes are evident through the number and quality of hires we have made, our historically low levels of regretted attrition and the consistent positive feedback we receive through our employee surveys.
Other benefits we provide employees include comprehensive health care, 401(k) plan matching and pension contributions, generous paid-time off, discounted gym memberships, access to walk-in health care and emergency child and elderly care. We recognize that mental health is an integral part of our employees’ overall well-being and essential to our success at PJT Partners.
Such incentives are designed to ensure alignment with our shareholders and the overall success of our Company. Other benefits we provide employees include comprehensive health care, 401(k) plan matching and pension contributions, generous paid-time off, discounted gym memberships, access to walk-in health care and emergency child and elderly care.
In addition to the regulation we are subject to in the U.S., we are subject to regulation internationally. PJT Partners (UK) Limited is authorized and regulated by the United Kingdom’s Financial Conduct Authority. PJT Partners (HK) Limited is licensed with the Hong Kong Securities and Futures Commission.
PJT Partners (UK) Limited is authorized and regulated by the United Kingdom’s Financial Conduct Authority. PJT Partners (HK) Limited is licensed with the Hong Kong Securities and Futures Commission. PJT Partners Park Hill (Spain) A.V., S.A.U. is an investment firm authorized and regulated by Spain’s National Securities Market Commission.
PJT Partners Park Hill (Spain) A.V., S.A.U. is an investment firm authorized and regulated by Spain’s National Securities Market Commission. Certain parts of our business are subject to compliance with laws and regulations of U.S. federal and state governments, non-U.S. governments, their respective agencies and/or various self-regulatory organizations or exchanges relating to, among other things, the privacy of client information.
Certain parts of our business are subject to compliance with laws and regulations of U.S. federal and state governments, non-U.S. governments, their respective agencies and/or various self-regulatory organizations or exchanges relating to, among other things, the privacy of client information. Any failure to comply with these regulations could expose us to liability and/or reputational damage.
We advise clients on transactions including mergers and acquisitions (“M&A”), spin-offs, activism defense, contested M&A, joint ventures, minority investments and divestitures. Additionally, we advise private and public company boards and management teams on strategies for building productive investor relationships with a focus on shareholder engagement; strategic investor relations; environmental, social and governance (“ESG”) matters; and other complex investor-related matters.
Additionally, we advise private and public company boards and management teams on strategies for building productive investor relationships with a focus on shareholder engagement; complex investor matters; environmental, social and governance ("ESG") transition solutions; and other critical strategic, governance and shareholder matters.
PJT Park Hill’s Secondary Advisory business is a leading advisor to global alternative asset managers. In the secondary market, we advise GPs and LPs on liquidity and other structured solutions. Our Key Competitive Strengths We intend to execute on our strategy by capitalizing on the following strengths of our organization: • Young, Entrepreneurial Firm.
PJT Park Hill’s private capital solutions business is a leading advisor to general partners and limited partners on liquidity and other structured solutions. 4 Our Key Competitive Strengths We strive to deliver on our Company strategy by leveraging the strengths of our organization: • Young, Entrepreneurial Firm.
As a result, we remain focused on ensuring that our employment proposition includes an attractive culture, development opportunities and competitive rewards. 8 Regulation Our business, as well as the financial services industry generally, is subject to extensive regulation in the U.S. and across the globe.
Regulation Our business, as well as the financial services industry generally, is subject to extensive regulation in the U.S. and across the globe.
Our industry-leading PJT Camberview business is a trusted advisor in the marketplace, having advised more than 55 Fortune 100 companies since its founding in 2012. Our partners have decades of experience and deep relationships with a vast network of corporate executives, board members, financial sponsors, fund managers and governments.
Our industry-leading PJT Camberview business is a trusted advisor in the marketplace, having advised more than 55 Fortune 100 companies since its founding in 2012. Our Restructuring and Special Situations Group is a global market leader.
Since the inception of our Company, our compensation and promotion structure has been designed to encourage the qualities we believe to be necessary for building a sustainable franchise. Our compensation is not formulaic and does not include individual revenue pay-outs.
Since the inception of our Company, our compensation and promotion approach has been designed to reward employees based on their commercial contribution and commitment to our values. Our compensation is not formulaic and does not include individual revenue pay-outs.
With this in mind, we invest in a range of growth and development opportunities including the improvement of technical skills, client communication and leadership capabilities. We also recognize that our long-term success requires not only the recruitment of best-in-class senior talent, but in providing positive career trajectory and upward mobility for our employees.
We also recognize that our long-term success requires not only the recruitment of best-in-class senior talent, but in providing positive career trajectories and upward mobility for our employees. To that end, we continue to refine our promotion processes and the mentorship of our rising talent, including through partnering with external executive coaches.
Our Growth Strategy Our strategy to achieve our growth objectives has the following components: • Significantly Increase the Breadth and Depth of Our Advisory Franchise through Footprint Expansion. We remain committed to attracting top talent to expand into new industry verticals to serve a broader range of clients.
We remain committed to attracting top talent to expand into new industry verticals to serve a broader range of clients.
Their expertise across multiple product areas, industry verticals and geographies are sought by clients in complex, cross-border situations. Our PJT Park Hill business has long-standing relationships around the globe that give them unique access to capital sources and drives incremental value for our clients. • Client Centric. Our success is built around the trust our clients have placed in us.
Their expertise across multiple product areas, industry verticals and geographies are sought by clients in some of the most complex domestic and cross-border situations. • Client Centric. Our success is built around the trust our clients have placed in us. We work every day to ensure that we are providing cutting-edge advice on the critical matters facing our clients.
In addition to providing workshops on mental health awareness, we recently expanded our employee benefits to include a comprehensive mental health platform that provides on-demand access 7 from a broad provider network. Furthermore, we acknowledge work-life balance issues for our employees through a paid-time off and leave policies that are consistent for all , regardless of level.
We recognize that mental health is an integral part of our employees’ overall well-being and essential to our success at PJT Partners. In addition to providing workshops on mental health awareness, we recently expanded our employee benefits to include a comprehensive mental health platform that provides on-demand access 7 from a broad provider network.
We have also established forums for engagement on broadening our diversity lens, including through our employee resource groups, such as the PJT Women’s Network, the PJT Black Professional Network and PJT Pride. Reward Principles We believe our Company culture is reinforced by rewarding employees who exemplify the pillars of our culture.
We continue to support our employee resource groups, including the PJT Women’s Network, PJT Pride and the PJT Black Professional Network, and challenge ourselves to be a more inclusive team and to create an atmosphere where all differences are celebrated. Reward Principles We believe our Company culture is reinforced by rewarding employees who exemplify the pillars of our culture.
The creativity and depth of our advice, and the integrity and judgment with which we deliver it, provide a strong foundation for our growing business. The quality of our advice is core to what we do. • Global Market Leadership. Our Restructuring and Special Situations Group is a global market leader.
The creativity and depth of our advice, and the integrity and judgment with which we deliver it, provide a strong foundation for our growing business. • Global Market Leadership. Our growing premier Strategic Advisory business is comprised of industry-leading practitioners and has advised on some of the most high-profile and complex transactions around the globe.
Our Company has deep global expertise, footprint and relationships while operating out of eleven locations around the world. Since inception, we have chosen to operate in a n asset-light, cloud-based environment, without the constraints of heavy infrastructure, legacy systems and processes. We focus on intellectual capital and relationships and rely on relatively limited embedded infrastructure to serve clients.
Since inception, we focus on intellectual capital and relationships and have chosen to operate in an asset-light, cloud-based environment, without the constraints of heavy infrastructure, legacy systems or processes. 5 Our Growth Strategy Our strategy to achieve our growth objectives has the following components: • Significantly Increase the Breadth and Depth of Our Advisory Franchise through Footprint Expansion.
Our ability to continue to compete effectively in our business will depend upon our ability to attract new employees and retain and motivate our existing employees.
Our ability to continue to compete effectively in our business will depend on our ability to attract new employees and retain and motivate our existing employees. As a result, we remain focused on ensuring that our employment proposition includes an attractive culture, development opportunities and competitive rewards.
It is our practice to review and benchmark not only our compensation practices, but our health and wellness benefits annually and consider feedback from our employees to ensure we remain an employer of choice. Diversity, Equity and Inclusion Our success as a Company is centered on recruiting, developing and retaining top talent from a diverse range of backgrounds and experiences.
Diversity, Equity and Inclusion Our success as a Company is predicated on recruiting, developing and retaining top talent from a diverse range of backgrounds and experiences, fostering an inclusive culture, and leveraging diversity of thought.
To aid in the support of the communities we serve, the Company and our employees have donated just over $6 million over the last three years to more than 260 global organizations dedicated to COVID-19 relief, mental health related causes or the advancement of racial equity.
Since 2020, the Company and our employees have donated over $7.9 million to more than 350 global organizations that support causes and humanitarian efforts that are important to our communities, including COVID-19 relief, mental health, disease cure and prevention, strengthening communities, the advancement of racial equity and providing aid to those affected by geopolitical and military conflicts and natural disasters.
PJT Partners began trading on the New York Stock Exchange (“NYSE”) under the symbol “PJT” on October 1, 2015. We have world-class capabilities in each of the areas in which we compete: Strategic Advisory Our team of leading professionals delivers strategic advice and innovative solutions to various opportunities and often highly complex challenges.
We have highly integrated world-class franchises in each of the areas in which we compete: Strategic Advisory Our team of leading professionals delivers strategic advice and innovative solutions to our clients in often highly complex and challenging situations. We advise clients on transactions including mergers and acquisitions (“M&A”), spin-offs, activism defense, contested M&A, joint ventures, minority investments and divestitures.
Engagement with the Broader Community Our company and our employees are actively engaged in supporting the needs of the underserved in the communities where we operate.
Engagement with the Broader Community A core measure of our success is our ability to make a difference in the communities where we live and work.
Restructuring and Special Situations Our Restructuring and Special Situations business is one of the world’s leading advisors in restructurings and recapitalizations, both in and out of court, around the globe. We have been named IFR’s Restructuring Advisor of the Year for three years running beginning in 2020 and are consistently ranked among the top three in announced global restructuring volume.
We have been named International Financing Review Restructuring Advisor of the Year for each of the past four years and are consistently ranked among the top three financial advisors in announced global restructuring volume. With expertise in highly complex capital structure challenges, we advise management teams, corporate boards, sponsors and creditors in situations where a company is experiencing financial distress.
We work every day to ensure that we are providing cutting edge advice on the critical matters facing our clients. We work to help them navigate through complex challenges and bold opportunities to meet their strategic objectives.
We work to help them navigate through complex challenges and bold opportunities in order to meet their strategic objectives. Delivering optimal outcomes is what we strive for – our clients’ results are our reputation. The quality of our advice is core to what we do. • Premier Destination for Top Talent at All Levels.
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ITEM 1. BUSINESS Overview PJT Partners is a premier global advisory-focused investment bank. We offer a unique portfolio of advisory services designed to help our clients achieve their strategic objectives.
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ITEM 1. BUSINESS Overview PJT Partners is a premier, global, advisory-focused investment bank that was built from the ground up to be different. Our highly experienced, collaborative teams provide independent advice coupled with old-world, high-touch client service. This ethos has allowed us to attract some of the very best talent in the markets in which we operate.
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Our team of senior professionals delivers a range of strategic advisory, capital markets advisory, restructuring and special situations and shareholder advisory services to corporations, financial sponsors, institutional investors and governments around the world. We also provide private fund advisory and fundraising services for alternative investment strategies, including private equity, real estate, hedge funds and private credit.
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We deliver leading advice to many of the world's most consequential companies, effect some of the most transformative transactions and restructurings and raise billions of dollars of capital around the globe to support startups and more established companies. PJT Partners began trading on the New York Stock Exchange (“NYSE”) under the symbol “PJT” on October 1, 2015.
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With expertise in highly complex capital structure challenges, we advise companies, 4 creditors and financial sponsors on liability management and related capital raise transactions including exchange s , recapitalizations, re organizations, debt repurchases and distressed mergers and acquisitions .
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Our geopolitical and policy advisory practice assists corporate boards and management teams to navigate changing geopolitical relationships against the backdrop of evolving political landscapes. Restructuring and Special Situations Our Restructuring and Special Situations business is one of the world’s leading advisors in financial restructuring and reorganization, liability management, distressed M&A and Chapter 11 matters.
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Our PJT Park Hill platform has a leading market position across its businesses: private equity, real estate, hedge funds, private credit and secondary advisory. Our growing premier Strategic Advisory business is comprised of industry leading practitioners and has advised on some of the most high-profile and complex transactions.
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Our PJT Park Hill platform has a leading market position across its businesses and has long-standing relationships around the globe that provides us with unique access to capital sources and drives incremental value for our clients. Our partners have decades of experience and deep relationships with a vast network of corporate executives, board members, financial sponsors, fund managers and governments.
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Since 2017, we have conducted various employee surveys to formally gather systematic feedback. Participation has been high with greater than 75% of employees responding each year.
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Our Company has deep global expertise, footprint and relationships while operating out of 12 locations around the world.
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In addition, we host regular Company-wide town halls to connect employees with our management team and business leaders. We use feedback from the survey, town halls and other employee connectivity forums to inform our ongoing efforts toward continuous improvement.
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Since 2017, we have conducted firmwide, anonymous employee surveys to formally solicit feedback from our teams regarding their on-the-job experiences, priorities and recommendations for improvement. Participation has been consistently high with response rates averaging 76%.
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All compensation and promotion decisions consider a number of factors within each of the following areas of impact, which are communicated to managers and employees alike: • character; • collaboration; • commercial impact/client relationships; and • content. Employer of Choice Initiatives We prioritize the health and well-being of our employees and their families.
Added
We use these results, along with feedback gathered through other employee connectivity forums, to further inform our priorities. Company leadership also maintains an active dialogue with employees through town hall meetings, which take place each quarter.
Removed
Fostering an inclusive culture, which welcomes differing perspectives and beliefs, enables us to provide the best advice to our clients. We continue to expand our Company’s diversity efforts. We have implemented initiatives to raise awareness and make DE&I a more regular part of employee conversations.
Added
All compensation and promotion decisions consider a number of factors aligned to the four core values of our culture: • Character - each individual is responsible for protecting our reputation, operating with the highest level of integrity and positively contributing to the development of our firm culture ; • Collaboration - working together allows us to learn from each other, leverage relationships and provide the best solutions ; • Commercial impact/client relationships - how we partner and gain the trust of our internal and external clients correlates with the reputation we earn across markets ; and • Content - our employees have deep and differentiated domain expertise, enabling thought leadership and innovation .
Removed
These include diversity training sessions with a globally recognized DE&I consultant attended by 100% of our senior leadership team and 80% of our Partners and Managing Directors overall. We continue to support our employee resource groups, including the PJT Women’s Network, the PJT Black Professional Network and PJT Pride.
Added
Furthermore, we acknowledge work-life balance challenges for our employees through paid-time off and leave policies that are consistent for all, regardless of level. It is our practice to review and benchmark not only our compensation practices, but our health and wellness benefits annually and consider feedback from our employees to ensure we remain an employer of choice.
Removed
In 2022, we conducted our first Company-wide survey on our commitment to diversity, which aimed to measure how comfortable our employees feel engaging with DE&I topics. We also included those questions in our broader annual employee survey.
Added
To support these aims, we have implemented initiatives to raise awareness and embed DE&I within our talent strategy: • Performance objectives relating to an employee's individual contributions to diversity and inclusion are incorporated in firmwide reviews; • We continue to support our employees resource groups, including the PJT Women’s Network, PJT Pride and the PJT Black Professional Network.
Removed
While early in our journey, we were encouraged to see that our employees increasingly believe the Company is committed to DE&I and are becoming more comfortable having discussions about DE&I topics at work. Employee Development We understand that retaining best-in-class talent and building a Company for the long term requires providing the opportunity for career growth.
Added
Employee Development We understand that to retain best-in-class talent, it is critical to invest in personal, professional and career growth. As such, our approach to talent development is multifaceted: we offer a suite of formal training to develop technical knowledge, client communication and leadership capabilities.
Removed
To that end, we continue to make significant improvements to our promotion processes and the mentorship of our rising talent, including through partnering with external executive coaches. These development efforts need to be consistently reinforced. Our review process and reward principles are designed to facilitate high-quality, honest feedback that supports and rewards the development of our people.
Added
In addition to programmatic efforts, we recognize the opportunities for growth and development that emerge on the job. These initiatives are supported by our performance review process, which is centered around the delivery of quality, development-focused feedback.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

96 edited+20 added−11 removed130 unchanged
Biggest changeWe have not entered into any transactions to hedge our exposure to these foreign exchange fluctuations through the use of derivative instruments or otherwise. An appreciation or depreciation of any of these currencies relative to the U.S. dollar would result in an adverse or beneficial impact, respectively, to our financial results.
Biggest changeOur financial statements are denominated in U.S. dollars and a portion of our operations is in other currencies, as a result, we are exposed to fluctuations in foreign currencies. We have not entered into any transactions to hedge our exposure to these foreign exchange fluctuations through the use of derivative instruments or otherwise.
In addition, certain aspects of our cost structure, such as costs for compensation, occupancy and equipment, communication and information technology services, and depreciation and amortization will be largely fixed, and we may not be able to timely adjust these costs to match fluctuations in revenue related to our entering into new lines of business.
In addition, certain aspects of our cost structure, such as costs for compensation, occupancy and equipment, communication and information technology services, and depreciation and amortization will be largely fixed, and we may not be able to timely adjust these costs to match fluctuations in revenue related to entering into new lines of business.
There is no guarantee that our current non-competition and compensation arrangements with our professionals, in which we mandatorily defer a substantial portion of their annual incentive bonus in the form of cash and equity awards with multi-year vesting periods, will provide sufficient protections or incentives to prevent our partners and other key personnel from resigning to join our competitors.
There is no guarantee that our current non-competition and compensation arrangements with our professionals, in which we mandatorily defer a substantial portion of their annual incentive bonus in the form of cash and/or equity awards with multi-year vesting periods, will provide sufficient protections or incentives to prevent our partners and other key personnel from resigning to join our competitors.
Any determination that we have violated the FCPA or other applicable anti-corruption laws could subject us to, among other things, civil and criminal penalties, material fines, profit disgorgement, injunctions on future conduct, securities litigation and a general loss of investor confidence, any one of which could adversely affect our business prospects, financial position or the market value of our Class A common stock.
Any determination that we have violated the FCPA or other applicable anti-corruption laws could subject us to, among other things, civil and criminal penalties, material fines, profit disgorgement, injunctions on future conduct, securities litigation and a general loss of investor confidence, 19 any one of which could adversely affect our business prospects, financial position or the market value of our Class A common stock.
If our international business increases relative to our total business, these factors could have a more pronounced effect on our operating results. As part of our day-to-day operations outside of the U.S., we are required to create compensation programs, employment policies, compliance policies and procedures and other administrative programs that comply with the laws of multiple countries.
If our international business increases relative to our total business, these factors could have a more pronounced effect on our operating results. As part of our day-to-day operations outside of the U.S., we are required to create compensation programs, employment policies, compliance policies and procedures and other administrative programs that comply with the laws of multiple countries and jurisdictions.
In the event of any such default, the lenders under the credit agreement could elect to: declare all outstanding debt, accrued interest and fees to be due and immediately payable; and require us to apply all of our available cash to repay our outstanding debt. Risks Relating to Talent and Competition We depend on the efforts and reputations of Mr.
In the event of any such default, the lenders under the credit agreement could elect to: declare all outstanding debt, accrued interest and fees to be due and immediately payable; and require us to apply all of our available cash to repay our outstanding debt. 18 Risks Relating to Talent and Competition We depend on the efforts and reputations of Mr.
If our employees or contractors were to improperly use or disclose confidential information provided by our clients, we could be subject to regulatory investigations or sanctions and we could suffer serious harm to our reputation, financial position, trading price of our Class A common stock, current client relationships and ability to attract future clients.
If our employees or contractors were to improperly use or disclose confidential information provided by our clients, we could be subject to regulatory investigations or sanctions and we could suffer serious harm to our reputation, financial position, the trading price of our Class A common stock, current client relationships or ability to attract future clients.
If an employee’s failure to do so results in the improper release of 18 confidential information, we could be subject to reputational harm and legal liability, which could impair our ability to attract and retain clients and in turn materially adversely affect our business. U.S. regulators and enforcement agencies, including the U.S.
If an employee’s failure to do so results in the improper release of confidential information, we could be subject to reputational harm and legal liability, which could impair our ability to attract and retain clients and in turn materially adversely affect our business. U.S. regulators and enforcement agencies, including the U.S.
These systems, including the systems of third parties on which we rely, may fail to operate properly or become disabled as a result of tampering or a breach of our network security systems or otherwise, including for reasons beyond our control. 14 Our clients typically provide us with sensitive and confidential information.
These systems, including the systems of third parties on which we rely, may fail to operate properly or become disabled as a result of tampering or a breach of our network security systems or otherwise, including for reasons beyond our control. Our clients typically provide us with sensitive and confidential information.
These changing rules, regulations and stakeholder expectations have resulted in, and are likely to continue to result in, increased costs and increased management time and attention to comply with or meet those regulations and 15 expectations. Developing and acting on ESG initiatives and collecting, measuring and reporting ESG related information and metrics can be costly, difficult and time consuming.
These changing rules, regulations and stakeholder expectations have resulted in, and are likely to continue to result in, increased costs and increased management time and attention to comply with or meet those regulations and expectations. Developing and acting on ESG initiatives and collecting, measuring and reporting ESG related information and metrics can be costly, difficult and time consuming.
Our activities may subject us to the risk of significant legal liabilities to our clients and affected third parties, including shareholders of our clients who could bring securities class actions against us. In recent years, the volume of claims and amount of damages claimed in litigation and regulatory proceedings against financial services companies have increased.
Our activities may subject us to the risk of significant legal liabilities to our clients and affected third parties, including shareholders of our clients who could bring class actions against us. In recent years, the volume of claims and amount of damages claimed in litigation and regulatory proceedings against financial services companies have increased.
We may be adversely affected by changes in the interpretation or enforcement of existing laws and rules by these governmental authorities and self-regulatory organizations. In addition, some of our clients or prospective clients may adopt policies that exceed regulatory requirements and impose additional restrictions affecting their dealings with us.
We may be adversely affected by changes in the interpretation or enforcement of existing laws and rules by these governmental authorities and self-regulatory organizations. In addition, some of our current or prospective clients may adopt policies that exceed regulatory requirements and impose additional restrictions affecting their dealings with us.
Our amended and restated certificate of incorporation and by-laws may discourage, delay or prevent a merger or acquisition that a stockholder may consider favorable by permitting the Board to issue one or more series of preferred stock, requiring advance notice for stockholder proposals and nominations and placing limitations on convening stockholder meetings.
Our restated certificate of incorporation and by-laws may discourage, delay or prevent a merger or acquisition that a stockholder may consider favorable by permitting the Board to issue one or more series of preferred stock, requiring advance notice for stockholder proposals and nominations and placing limitations on convening stockholder meetings.
Additionally, to the extent that PJT Partners Inc. needs funds, and PJT Partners Holdings LP is restricted from making such distributions under applicable law or regulation or under the terms of our financing arrangements, or is otherwise unable to provide such funds, it could materially adversely affect our liquidity and financial condition.
Additionally, to the extent that PJT Partners Inc. needs funds, and PJT Partners Holdings LP is restricted from making such distributions under applicable law or regulation or under the terms of 22 our financing arrangements, or is otherwise unable to provide such funds, it could materially adversely affect our liquidity and financial condition.
Our amended and restated certificate of incorporation authorizes us to issue these shares of Class A common stock and options, rights, warrants and appreciation rights relating to Class A common stock for the consideration and on the terms and conditions established by the Board in its sole discretion, whether in connection with acquisitions or otherwise.
Our restated certificate of incorporation authorizes us to issue these shares of Class A common stock and options, rights, warrants and appreciation rights relating to Class A common stock for the consideration and on the terms and conditions established by the Board in its sole discretion, whether in connection with acquisitions or otherwise.
Our engagements typically, but not always, include broad indemnities from our clients and provisions to limit our exposure to legal claims relating to our services, but these 19 provisions may not protect us in all cases, including when a client does not have the financial capacity to pay pursuant to the indemnity.
Our engagements typically, but not always, include broad indemnities from our clients and provisions to limit our exposure to legal claims relating to our services, but these provisions may not protect us in all cases, including when a client does not have the financial capacity to pay pursuant to the indemnity.
As part of the process of preparing our consolidated financial statements, we are required to estimate income taxes in each of the jurisdictions in which we operate. Significant management judgment is required in determining 20 our provision for income taxes, our deferred tax assets and liabilities and any valuation allowance recorded against our deferred tax assets.
As part of the process of preparing our consolidated financial statements, we are required to estimate income taxes in each of the jurisdictions in which we operate. Significant management judgment is required in determining our provision for income taxes, our deferred tax assets and liabilities and any valuation allowance recorded against our deferred tax assets.
Any Class A common stock that we issue, including under our Amended and Restated 2015 Omnibus Incentive Plan or other equity incentive plans that we may adopt in the future, would dilute your percentage ownership of PJT Partners Inc.
Any Class A common stock that we issue, including under our Second Amended and Restated PJT Partners Inc. 2015 Omnibus Incentive Plan or other equity incentive plans that we may adopt in the future, would dilute your percentage ownership of PJT Partners Inc.
These laws, regulations and treaties are complex, and the manner in which they apply to our facts and circumstances is sometimes open to interpretation. Management believes its application of current laws, regulations and treaties to be correct and sustainable upon examination by the tax authorities.
These laws, regulations and treaties are complex, and the manner in which they apply to our facts and circumstances is sometimes open to interpretation. Management 21 believes its application of current laws, regulations and treaties to be correct and sustainable upon examination by the tax authorities.
These issuances or sales, 24 or the possibility that they may occur, also might make it more difficult for holders of our Class A common stock to sell such stock in the future at a time and at a price that they deem appropriate.
These issuances or sales, or the possibility that they may occur, also might make it more difficult for holders of our Class A common stock to sell such stock in the future at a time and at a price that they deem appropriate.
The market price of shares of our Class A common stock could decline as a result of issuances or sales of our Class A common stock to fund exchanges of Partnership Units, or sales by exchanging holders of Partnership Units of Class A common stock received in stock-settled exchanges or, in each case, the perception that such issuances or sales could occur.
The market price of shares of our Class A common stock could decline as a result of issuances or sales of our Class A common stock to fund exchanges of Partnership Units, or sales by exchanging holders of Partnership Units of Class A common stock 25 received in stock-settled exchanges or, in each case, the perception that such issuances or sales could occur.
We face various cybersecurity and other operational risks related to our business on a day-to-day basis. We rely heavily on financial, human capital, accounting, communication and other information technology systems, and the people who operate them.
We face various cybersecurity and other operational risks related to our business on a day-to-day basis. We rely heavily on financial, human capital, accounting, communication and other information technology systems, and 14 the people who operate them.
Deterioration in the financial condition, earnings or cash flow of PJT Partners Holdings LP and its subsidiaries for any reason 21 could limit or impair their ability to pay such distributions.
Deterioration in the financial condition, earnings or cash flow of PJT Partners Holdings LP and its subsidiaries for any reason could limit or impair their ability to pay such distributions.
In addition, the structuring of future transactions may take into consideration these Partnership Unit holders’ tax or other considerations even where no similar benefit would accrue to us. 22 PJT Partners Inc. may be required to make payments under a tax receivable agreement for most of the benefits relating to certain tax depreciation or amortization deductions that we may claim as a result of certain increases in tax basis.
In addition, the structuring of future transactions may take into consideration these Partnership Unit holders’ tax or other considerations even where no similar benefit would accrue to us. 23 PJT Partners Inc. may be required to make payments under a tax receivable agreement for most of the benefits relating to certain tax depreciation or amortization deductions that we may claim as a result of certain increases in tax basis.
Our ability to assist fund managers and sponsors raise capital from investors depends on a number of factors, including many that are outside our control, such as the general economic environment, changes in the weight investors give to alternative asset investments as part of their overall investment portfolio among asset classes which may be impacted by the market liquidity and volatility.
Our ability to assist fund managers and sponsors raise capital from investors depends on a number of factors, including many that are outside our control, such as the general economic environment, available investor capital, changes in the weight investors give to alternative asset investments as part of their overall investment portfolio among asset classes which may be impacted by the market liquidity and volatility.
Holders of Partnership Units (other than PJT Partners Inc.) have the right, subject to the terms and conditions set forth in the partnership agreement of PJT Partners Holdings LP, on a quarterly basis (subject to the terms of the exchange agreement), to exchange all or part of their Partnership Units for cash or, at our election, for shares of our Class A common stock on a one-for-one basis, subject to customary conversion rate adjustments for splits, unit distributions and reclassifications.
Holders of Partnership Units (other than PJT Partners Inc.) have the right, subject to the terms and conditions set forth in the partnership agreement of PJT Partners Holdings LP, on a quarterly basis (subject to the terms of the exchange agreement, as amended), to exchange all or part of their Partnership Units for cash or, at our election, for shares of our Class A common stock on a one-for-one basis, subject to customary conversion rate adjustments for splits, unit distributions and reclassifications.
We may need to incur additional indebtedness to finance payments under the tax receivable agreement to the extent our cash resources are insufficient to meet our obligations under the tax receivable agreement as a result of timing discrepancies or otherwise. 23 Anti-takeover provisions in our organizational documents and Delaware law might discourage or delay acquisition attempts for us that you might consider favorable.
We may need to incur additional indebtedness to finance payments under the tax receivable agreement to the extent our cash resources are insufficient to meet our obligations under the tax receivable agreement as a result of timing discrepancies or otherwise. 24 Anti-takeover provisions in our organizational documents and Delaware law might discourage or delay acquisition attempts for us that you might consider favorable.
Inflation and rising interest rates have the potential to adversely affect our liquidity, business, financial condition and results of operations by increasing our overall cost structure, particularly if we are unable to achieve commensurate increases in the fees we charge our clients or if increased prices may lead to our clients requesting fewer services.
Inflation and elevated interest rates have the potential to adversely affect our liquidity, business, financial condition and results of operations by increasing our overall cost structure, particularly if we are unable to achieve commensurate increases in the fees we charge our clients or if increased prices may lead to our clients requesting fewer services.
As a result, our operating results, financial condition and liquidity may be significantly affected by the loss of a relatively small number of mandates or the failure of a relatively small number of assignments to be completed. However, no client accounted for more than 10% of our total revenues for the years ended December 31, 2022 or 2021.
As a result, our operating results, financial condition and liquidity may be significantly affected by the loss of a relatively small number of mandates or the failure of a relatively small number of assignments to be completed. However, no client accounted for more than 10% of our total revenues for the years ended December 31, 2023 or 2022.
We may face damage to our professional reputation or negative publicity if our services are not regarded as satisfactory or for other reasons. As an advisory service company, we depend to a large extent on our relationships with our clients and reputation for integrity and high-caliber advisory services to attract and retain clients.
We may face damage to our professional reputation or negative publicity if our services are not regarded as satisfactory or for any other reasons. As an advisory services company, we depend to a large extent on our relationships with our clients and reputation for integrity and high-caliber advisory services to attract and retain clients.
Our ability to conduct business and our operating results, including compliance costs, may be adversely affected as a result of complying with any new or existing requirements imposed by the SEC, FINRA or other U.S. or foreign governmental regulatory authorities or self-regulatory organizations that regulate financial services firms or supervise financial markets, such as the requirement to maintain sufficient net capital in order to provide certain services.
Our ability to conduct business and our operating results, may be adversely affected as a result of complying with any new or existing requirements, such as the requirement to maintain sufficient net capital in order to provide certain services, as imposed by the SEC, FINRA or other U.S. or foreign governmental regulatory authorities or self-regulatory organizations that regulate financial services firms or supervise financial markets.
During periods of unfavorable market or economic conditions, the number and value of M&A transactions may decrease, thereby reducing the demand for our M&A advisory services and increasing price competition among financial services companies seeking such engagements.
During periods of unfavorable market or economic conditions, the number and value of M&A and capital raising transactions may decrease, thereby reducing the demand for our M&A advisory services and increasing price competition among financial services companies seeking such engagements.
As cyber threats continue to multiply, become more sophisticated and threaten additional aspects of our business, we may also be required to expend additional resources on information security and compliance costs in order to continue to modify or enhance our protective measures or to investigate and remediate any information security vulnerabilities or other exposures.
As cybersecurity incidents or threats continue to multiply, become more sophisticated and threaten additional aspects of our business, we may also be required to expend additional resources on information security and compliance costs in order to continue to modify or enhance our protective measures or to investigate and remediate any information security vulnerabilities or other exposures.
Our international operations carry special financial, business, regulatory and reputational risks, which could include the following: greater difficulties in managing and staffing foreign operations; language and cultural differences; fluctuations in foreign currency exchange rates that could adversely affect our results; unexpected and costly changes in trading policies, regulatory requirements, tariffs and other barriers; sanctions; restrictions on travel; longer transaction cycles; higher operating costs; local labor conditions and regulations; adverse consequences or restrictions on the repatriation of earnings; potentially adverse tax consequences, such as trapped foreign losses; economic and geopolitical uncertainty; civil disturbances or other catastrophic events that reduce business activity; and disasters or other business continuity threats, such as pandemics, other man-made or natural disasters, or disruptions involving electronic communications or other services.
Our international operations carry special financial, business, regulatory and reputational risks, which could include the following: greater difficulties in managing and staffing foreign operations; language and cultural differences; fluctuations in foreign currency exchange rates that could adversely affect our results; unexpected and costly changes in trading policies, regulatory requirements, tariffs and other barriers; sanctions; restrictions on travel; longer transaction cycles; higher operating costs; local labor conditions and regulations; adverse consequences or restrictions on the repatriation of earnings; potentially adverse tax consequences, such as trapped foreign losses; economic and geopolitical uncertainty; and military conflicts or other catastrophic events that reduce business activity; and disasters or other business continuity threats, such as pandemics, other man-made or natural disasters, or disruptions involving communications and information systems or other services.
The existence of inflation in the economy has resulted in, and may continue to result in, higher interest rates and capital costs, increased costs of labor, weakening exchange rates and other similar effects.
The existence of inflation in the economy has resulted in, and may continue to result in, elevated interest rates and capital costs, increased costs of labor, weakening exchange rates and other similar effects.
A substantial portion of our revenue in any given period is dependent in part on the number of fee-paying clients in such period. We had 187 clients and 159 clients that generated fees equal to or greater than $1 million for the years ended December 31, 2022 and 2021, respectively.
A substantial portion of our revenue in any given period is dependent in part on the number of fee-paying clients in such period. We had 198 clients and 187 clients that generated fees equal to or greater than $1 million for the years ended December 31, 2023 and 2022, respectively.
ITEM 1A. RISK FACTORS Risks Relating to Our Business Changing market conditions can adversely affect our business in many ways, including by reducing the volume of the transactions involving our business, which could materially reduce our revenue.
ITEM 1A. RI SK FACTORS Risks Relating to Our Business Changing market conditions can adversely affect our business in many ways, including by reducing the volume of the transactions involving our business, which could materially reduce our revenue.
At December 31, 2022, our executive officers and directors held and/or controlled (including by way of the proxy granted to Mr.
At December 31, 2023, our executive officers and directors held and/or controlled (including by way of the proxy granted to Mr.
The conflict and the sanctions that have been or may be imposed may have further global economic and other consequences, including diminished liquidity and credit availability, reduced consumer confidence, disruptions to energy and food supplies, decreased economic growth, higher unemployment rates, increased inflation, and political and social upheaval.
These conflicts and the related sanctions that have been or may be imposed may have further global economic and other consequences, including diminished liquidity and credit availability, reduced consumer confidence, disruptions to energy and food supplies, decreased economic growth, higher unemployment rates, increased inflation, and political and social upheaval.
Any interruption or deterioration in the performance of these third parties or failures of their information systems and technology could impair our operations, expose sensitive information, affect our reputation and adversely affect our business.
Any interruption or deterioration in the performance of these third parties and their service providers or failures of their information systems and technology could impair our operations, expose sensitive information, affect our reputation, and adversely affect our 15 business.
For the year ended December 31, 2022, we earned 10.0% of our total revenues from our international operations. We intend to continue to grow our non-U.S. business, and this growth is important to our overall success. In addition, many of our clients are non-U.S. entities seeking to enter into transactions involving U.S. businesses.
For the year ended December 31, 2023, we earned 16% of our total revenues from our international operations. We intend to continue to grow our non-U.S. business, and this growth is important to our overall success. In addition, many of our clients are non-U.S. entities seeking to enter into transactions involving U.S. businesses.
Taubman by certain executive officers of Blackstone in connection with the spin-off) 25.3% of the voting power of PJT Partners Inc. with regard to the election and removal of directors, and 34.0% of the voting power of PJT Partners Inc. with regard to all other matters presented to stockholders of PJT Partners Inc.
Taubman by certain executive officers of Blackstone in connection with the spin-off) 25.5% of the voting power of PJT Partners Inc. with regard to the election and removal of directors, and 34.2% of the voting power of PJT Partners Inc. with regard to all other matters presented to stockholders of PJT Partners Inc.
If an employee’s failure to follow proper data security procedures results in the improper release of confidential information, or our systems are otherwise compromised, do not operate properly or are disabled, we could suffer a disruption of our business, financial losses, liability to clients, regulatory sanctions and damage to our reputation.
If an employee’s or consultant’s failure to follow proper data security procedures, as a result of human error or intentionally, results in the improper release of confidential information, or our systems are otherwise compromised, do not operate properly or are disabled, we could suffer a disruption of our business, financial losses, liability to clients, regulatory sanctions and damage to our reputation.
See “Certain Relationships and Related Person Transactions—PJT Partners Holdings LP Amended and Restated Limited Partnership Agreement” in our definitive proxy statement filed in connection with our 2022 Annual Meeting of Stockholders (our “2022 Proxy Statement”).
See “Certain Relationships and Related Person Transactions—PJT Partners Holdings LP Amended and Restated Limited Partnership Agreement” in our definitive proxy statement filed in connection with our 2023 Annual Meeting of Stockholders (our “2023 Proxy Statement”).
The impact of the conflict is ongoing, and is currently unknown, and could intensify other risks described herein, including cybersecurity-related risks, and otherwise have a material adverse effect on our business, financial condition and results of operations.
The impact of these geopolitical and military conflicts is ongoing, and is currently unknown, and could intensify other risks described herein, including cybersecurity-related risks, and otherwise have a material adverse effect on our business, financial condition and results of operations.
Phishing attacks and email spoofing attacks are often used to obtain information, facilitate unauthorized access, or impersonate employees and/or clients in order to, among other things, direct fraudulent financial transactions, obtain valuable information or disrupt business operations.
Phishing attacks and spoofing attacks, which may include deepfakes, are often used to obtain information, facilitate unauthorized access, or impersonate employees and/or clients in order to, among other things, direct fraudulent financial transactions, obtain valuable information or disrupt business operations.
Although we may take measures to mitigate the impact of this inflation, if these measures are not effective our business, financial condition, results of operations and liquidity could be materially adversely affected. As of December 31, 2022, we had cash, cash equivalents and short-term investments of $223.5 million, of which $50.2 million was invested in Treasury securities.
Although we may take measures to mitigate the impact of this inflation, if these measures are not effective, our business, financial condition, results of operations and liquidity could be materially adversely affected. As of December 31, 2023, we had cash, cash equivalents and short-term investments of $436.9 million, of which $183.5 million was invested in Treasury securities.
While we have developed and implemented policies and procedures designed to ensure strict compliance by our employees and contractors with anti-bribery, anti-money laundering, anti-corruption and other laws, such policies and procedures may not be effective in all instances to prevent violations.
While we have developed and implemented policies and procedures designed to ensure strict compliance by our employees and contractors with anti-bribery, anti-money laundering, anti-corruption, use of off-channel electronic messaging, and other laws, such policies and procedures may not be effective in all instances to prevent violations.
At December 31, 2022, our Class B common stockholders held 29.7% of the voting power of PJT Partners Inc. with regard to the election and removal of directors, and 39.4% of the voting power of PJT Partners Inc., with regard to all other matters presented to stockholders of PJT Partners Inc.
At December 31, 2023, our Class B common stockholders held 29.6% of the voting power of PJT Partners Inc. with regard to the election and removal of directors, and 39.6% of the voting power of PJT Partners Inc., with regard to all other matters presented to stockholders of PJT Partners Inc.
Department of Justice and the SEC, continue to devote significant resources to the enforcement of the FCPA, anti-money laundering laws and anti-corruption laws, and the United Kingdom and other jurisdictions have significantly expanded the reach of their anti-bribery laws.
Department of Justice and the SEC, continue to devote significant resources to the enforcement of the FCPA, use of off-channel electronic messaging, anti-money laundering laws and anti-corruption laws, and the United Kingdom and other jurisdictions have significantly expanded the reach of their anti-bribery laws.
Additionally, our reputation and client relationships may be damaged as a result of our involvement, or our clients’ involvement, in certain industries or projects associated with causing or exacerbating climate change, as well as any decisions we make to continue to conduct or change our activities in response to considerations relating to climate change.
Additionally, our reputation and client relationships may be damaged as a result of our involvement, or our clients’ involvement, in certain industries or projects associated with causing or exacerbating climate change, as well as any decisions we make to continue to conduct or change our activities in response to considerations relating to climate change. 16 We are exposed to risks related to our insurance coverage.
Taubman, have the ability to exercise increased influence over the outcome of director elections and removals as well. Additionally, as of December 31, 2022, our Class B common stockholders own 37.7% of the Partnership Units.
Taubman, have the ability to exercise increased influence over the outcome of director elections and removals as well. Additionally, as of December 31, 2023, our Class B common stockholders own 39.3% of the Partnership Units.
The placement fees earned by us are generally recognized by us for accounting purposes upon the successful subscription by an investor in a client’s fund and/or the closing of that fund.
The placement fees earned by us are generally recognized as revenue upon the successful subscription by an investor in a client’s fund and/or the closing of that fund.
As a result, if a client is not satisfied with our services or we experience negative publicity related to our business and our people, regardless of whether the allegations are valid, it may be more damaging in our business than in other businesses. Our business is subject to various cybersecurity and other operational risks.
As a result, if a client is not satisfied with our services or we experience negative publicity related to our business and our people, regardless of whether the allegations are valid, it may adversely affect our business. Our business is subject to various cybersecurity and other operational risks.
Additionally, certain investors, such as public pension plans, may have policies prohibiting the use of placement agents by fund sponsors or managers in connection with a limited partner’s investment.
Additionally, certain investors, such as public pension plans, may have policies prohibiting the use of placement agents by fund sponsors or managers in connection with their investments.
Despite our implementation of policies, our emphasis on a culture that supports diversity and inclusion, and training to prevent and detect misconduct, we cannot completely safeguard ourselves against the risk of workplace misconduct, such as sexual harassment or discrimination.
Despite our implementation of policies, our emphasis on an inclusive culture and training to prevent and detect misconduct, we cannot completely safeguard ourselves against the risk of workplace misconduct, such as sexual harassment or discrimination.
Our private fund advisory and fundraising business is dependent on the availability of private capital for deployment in illiquid asset classes such as private equity, real estate, hedge funds and private credit for clients we serve. PJT Park Hill provides private fund advisory and fundraising services for alternative investment strategies, including private equity, real estate, hedge funds and private credit.
Our private fund advisory and fundraising business is dependent on the availability of private capital for deployment in illiquid asset classes such as private equity, alternative credit/hedge funds, and real estate for clients we serve.
We are also at risk for malware/ransomware infection and/or other attacks that could result in disruption of our business operations and the theft, dissemination and destruction of corporate and client-sensitive information or other assets. We operate a business that is highly dependent on information systems and technology.
We are also at risk for malware/ransomware infection and/or other attacks that could result in disruption of our business operations and the theft, dissemination and destruction of corporate and client-sensitive information or other assets.
Our inability to access our cash or other assets could have a material adverse effect on our liquidity and result in our inability to meet our obligations timely, which could have a material adverse effect on the value of our common stock. 16 Our international operations are subject to certain risks, which may affect our revenue.
Our inability to access our cash or other assets could have a material adverse effect on our liquidity and result in our inability to meet our obligations timely, which may have a material adverse effect on our business, financial condition and results of operations. Our international operations are subject to certain risks, which may affect our revenue.
If a new business generates insufficient revenues or if we are unable to efficiently manage our expanded operations, our results of operations could be materially adversely affected. Fluctuations in foreign currency exchange rates could adversely affect our results.
If a new business generates insufficient revenues or if we are unable to efficiently manage our expanded operations, our results of operations could be materially adversely affected.
We have access to a revolving credit facility in an aggregate principal amount of $60 million with the option for a temporary increase of up to $80 million total. 17 The credit agreement governing such revolving credit facility contains a number of significant covenants that, among other things, would require us to maintain certain minimum tangible net worth and liquidity and maximum leverage levels and the covenants may restrict our ability to: sell assets; incur more indebtedness; repay certain indebtedness; make certain investments or business acquisitions; make certain capital expenditures; engage in business mergers or consolidations; and engage in certain transactions with subsidiaries and affiliates.
The credit agreement governing such revolving credit facility contains a number of significant covenants that, among other things, would require us to maintain certain minimum tangible net worth and liquidity and maximum leverage levels and the covenants may restrict our ability to: sell assets; incur more indebtedness; repay certain indebtedness; make certain investments or business acquisitions; make certain capital expenditures; engage in business mergers or consolidations; and engage in certain transactions with subsidiaries and affiliates.
The loss of one or more of these executives or other key individuals could impair our business and development until qualified replacements are found. We may not be able to replace these individuals quickly or with persons of equal experience and capabilities.
The loss of one or more of these executives or other key individuals could impair our business and development until qualified replacements are found. We may not be able to replace these individuals quickly or with persons of equal experience and capabilities. Although we have employment agreements with these individuals, we cannot prevent them from terminating their employment with us.
We may enter into new lines of business, joint ventures, strategic investments or jurisdictions, which may result in additional risks and uncertainties in our business. We currently generate substantially all of our revenue from our strategic advisory, capital markets advisory, restructuring and special situations, shareholder advisory, and private fund advisory and fundraising services businesses.
We currently generate substantially all of our revenue from our strategic advisory, capital markets advisory, restructuring and special situations, shareholder advisory, and private fund advisory and fundraising services businesses. However, we may grow our business by entering into new lines of business, joint ventures, strategic investments or jurisdictions.
In addition, we face the risk that certain clients may not have the financial resources to pay our agreed-upon fees. Certain clients may also be unwilling to pay our fees in whole or in part, in which case we may have to incur significant costs to bring legal action to enforce our engagement agreements to obtain such fees.
Certain clients may also be unwilling to pay our fees in whole or in part, in which case we may have to incur significant costs to bring legal action to enforce our engagement agreements to obtain such fees.
In May 2018, the EU’s General Data Protection Regulations (“GDPR”) came into effect, and changed how businesses can collect, use and process the personal data of EU residents. As we engage in significant business in the EU, we are subject to the GDPR’s requirements.
European Union’s ("EU") General Data Protection Regulations (“GDPR”) regulate how businesses can collect, use and process the personal data of EU residents. As we engage in significant business in the EU, we are subject to the GDPR’s requirements.
We also must communicate and monitor standards and directives across our global operations. Our failure to successfully manage and grow our geographically diverse operations could impair our ability to react quickly to changing business and market conditions and to enforce compliance with non-U.S. standards and procedures.
We also must communicate and monitor standards and directives across 17 our global operations. Our failure to successfully manage and grow our geographically diverse operations could impair our ability to react quickly to changing business and market conditions and to enforce compliance with non-U.S. laws and regulations. Fluctuations in foreign currency exchange rates could adversely affect our results.
These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell shares of Class A common stock in the future at a time and at a price that we deem appropriate. In addition, we and the holders of Partnership Units (other than PJT Partners Inc.) have entered into an exchange agreement.
These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell shares of Class A common stock in the future at a time and at a price that we deem appropriate.
Insurance claims may divert management resources away from operating our business. We may incur debt or other contractual obligations that we cannot service if we are unable to generate sufficient cash.
Our business may be negatively affected if our insurance coverage proves to be inadequate, unavailable or the insurance carriers deny coverage for whatever reason. Insurance claims may divert management resources away from operating our business. We may incur debt or other contractual obligations that we cannot service if we are unable to generate sufficient cash.
As a result, we may incur significant legal expenses in defending ourselves against or settling litigation or regulatory action. In addition, we may have to spend a significant amount to adequately insure against these potential claims.
As a result, we may incur significant legal expenses in defending ourselves against or settling litigation or regulatory actions. In addition, the associated litigation process can place operational strain on our business and we may have to spend a significant amount to adequately insure against these potential claims.
For example, a substantial portion of our revenue is directly related to the number and value of the transactions in which we are involved.
For example, worldwide M&A completed volumes were down in 2023 compared with historical average M&A volumes and a substantial portion of our revenue is directly related to the number and value of the transactions in which we are involved.
In addition, our operating results could be below the expectations of public market analysts and investors, and in response, the market price of our Class A common stock could decrease significantly.
This market volatility, as well as general economic, market or political conditions, could reduce the market price of our Class A common stock in spite of our operating performance. In addition, our operating results could be below the expectations of public market analysts and investors, and in response, the market price of our Class A common stock could decrease significantly.
We are subject to attempted cyberattacks and security breaches and, while such cyberattacks have not, to date, had a material impact on our operations, a successful breach of our systems, or the systems used by our clients and other third parties, could lead to shutdowns or disruptions of our systems or third-party systems on which we rely and potential unauthorized disclosure of sensitive or confidential information.
We are subject to cyber attacks and security breaches and a successful breach of our systems, or the systems used by our clients and other third parties, including cloud service providers, could lead to shutdowns or disruptions of our systems or third-party or cloud systems on which we rely and potential unauthorized access or disclosure of sensitive or confidential information.
As of December 31, 2022, we have 2,968,937,425 shares of Class A common stock authorized but unissued, including 14,826,162 shares of Class A common stock that may be issued upon exchange of Partnership Units.
As of December 31, 2023, we have 2,967,643,511 shares of Class A common stock authorized but unissued, including 15,645,987 shares of Class A common stock that may be issued upon exchange of Partnership Units.
The loss of the services of any of them, in particular Mr. Taubman, could have a material adverse effect on our business, including our ability to attract clients. Our future growth will depend on, among other things, our ability to successfully identify, recruit, motivate and develop talent and will require us to commit additional resources.
Taubman, could have a material adverse effect on our business, including our ability to attract clients. Our future growth will depend on, among other things, our ability to successfully identify, recruit, motivate and develop talent and will require us to commit additional resources. It typically takes time for our newly-recruited professionals to become effective and profitable.
Extensive and evolving regulation of our business and the business of our clients exposes us to the potential for significant penalties and fines due to compliance failures, increases our costs and may result in limitations on the manner in which our business is conducted.
Substantial legal liability or significant regulatory action against us could have material adverse financial effects or cause significant reputational harm to us, which could seriously harm our business prospects. 20 Extensive and evolving regulation of our business and the business of our clients exposes us to the potential for significant penalties and fines due to compliance failures, increases our costs and may result in limitations on the manner in which our business is conducted.
Because in many cases we do not recognize revenue until the successful consummation of the underlying transaction, our revenue and cash flow are highly dependent on market conditions and the decisions and actions of 13 our clients, interested third parties and governmental authorities.
In addition, our operating results could be below the expectations of public market analysts and investors, and in response, the market price of our Class A common stock could decrease significantly. 13 In many cases we do not recognize revenue until the successful consummation of the underlying transaction, as such, our revenue and cash flow are highly dependent on market conditions and the decisions and actions of our clients, interested third parties and governmental authorities.
Our ability to find suitable engagements and earn fees in this business depends on the availability of private and public capital for investments in illiquid assets such as private equity, real estate, hedge funds and private credit.
PJT Park Hill provides private fund advisory and fundraising services for a diverse range of investment strategies, including private equity, alternative credit/hedge funds, real estate, directs and private capital solutions groups. Our ability to find suitable engagements and earn fees in this business depends on the availability of private and public capital for investments in illiquid assets.
Any failure to keep accurate books and records can render us liable to disciplinary action by governmental and self-regulatory authorities, as well as to claims by our clients. We rely on third-party service providers for certain aspects of our business.
We operate a business that is highly dependent on information systems and technology. Any failure to keep accurate books and records can render us liable to disciplinary action by governmental and self-regulatory authorities, as well as to claims by our clients.
Our decision to repurchase shares of our Class A common stock will reduce our public float, which could cause our share price to decline. On April 25, 2022, the Board authorized a $200 million repurchase program of the Company’s Class A common stock, which is in addition to the previous Board authorizations.
Our decision to repurchase shares of our Class A common stock will reduce our public float, which could cause our share price to decline. On February 6, 2024, the Company announced that the Board authorized a $500 million Class A common stock repurchase program, which replaced the Company's existing repurchase program.
PJT Partners Inc. is a holding company and has no material assets other than its ownership of Partnership Units, and certain cash and cash equivalents it may hold from time to time as described herein in “Part II. Item 5.
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 described herein in “Part II. Item 5.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES Our principal executive offices are located in leased office space at 280 Park Avenue, New York, New York 10017. We currently lease office space for our employees in Boston, Chicago, Frankfurt, Hong Kong, Houston, London, Los Angeles, Madrid, San Francisco, and Paris. We do not own any real property.
Biggest changeITEM 2. P ROPERTIES Our principal executive offices are located in leased office space at 280 Park Avenue, New York, New York 10017. We currently lease office space for our employees in Boston, Chicago, Frankfurt, Hong Kong, Houston, London, Los Angeles, Madrid, San Francisco, Tokyo, and Paris. We do not own any real property.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeSubject to the foregoing, we believe, based on current knowledge and after consultation with counsel, that we are not currently party to any material pending proceedings (including the matters described below), individually or in the aggregate, the resolution of which would have a material effect on the Company.
Biggest changeSubject to the foregoing, we believe, based on current knowledge and after consultation with counsel, that we are not currently party to any material pending proceedings (including the matters described below), individually or in the aggregate, the resolution of which would have a material effect on the Company. Further disclosure regarding legal proceedings is provided in Note 14.
Removed
In June 2017, an action was filed in New York state court against defendants PJT Partners Inc., Park Hill Group LLC and Andrew W.W. Caspersen, arising out of the fraudulent conduct of Caspersen. PJT Partners Inc. and Park Hill Group LLC moved to dismiss the complaint.
Added
“Commitments and Contingencies—Contingencies, Litigation” in the “Notes to Consolidated Financial Statements” in “Part II. Item 8. Financial Statements and Supplementary Data” of this filing. ITEM 4. MINE SAF ETY DISCLOSURES None. 28 PART II.
Removed
On August 13, 2018, the court dismissed all of the claims asserted against PJT Partners Inc. and Park Hill Group LLC, except for the fraud-based apparent authority claim. Plaintiffs and PJT Partners Inc. and Park Hill Group LLC appealed the court’s decision.
Removed
On December 3, 2019, the appellate court dismissed the complaint in its entirety against PJT Partners Inc. and Park Hill Group LLC. On January 2, 2020, Plaintiffs filed a motion with the appellate court seeking reargument or, alternatively, leave to appeal, which motion was denied by the appellate court.
Removed
On September 15, 2020, the New York Court of Appeals granted Plaintiffs permission to file an appeal, which appeal was filed on December 30, 2020. We believe this matter is without merit and will continue to vigorously oppose Plaintiffs’ appeal of the dismissal of their action.
Removed
On June 16, 2009, Plaintiffs Frank Foy and Suzanne Foy, purportedly as qui tam plaintiffs on behalf of the State of New Mexico, filed a case in New Mexico state court against Park Hill Group LLC and one of its officers, as well as The Blackstone Group L.P.
Removed
(together, “Park Hill Defendants”), in addition to dozens of other named and unnamed defendants, alleging violations of New Mexico’s Fraud Against Taxpayers Act (“FATA”) in an action styled Foy v. Austin Capital Management, Ltd., et al. , Case No. D-101-CV-2009-01189 (N.M. Dist. Ct.).
Removed
The complaint alleged, among other things, that the New Mexico Educational Retirement Board and the New Mexico State Investment Council made investments that were influenced by kickbacks and other inducements. In the complaint, the Park Hill Defendants were grouped together with other defendants who were all alleged, generically, to have conspired to defraud the State of New Mexico.
Removed
On November 30, 2015, after several years of motion practice, including an earlier decision by the New Mexico Supreme Court to consolidate this case with another case by the same plaintiffs (in which the Park Hill Defendants were not parties), the New Mexico Attorney General filed a motion on behalf of the State of New Mexico seeking wholesale dismissal of these proceedings.
Removed
On June 6, 2017, the court granted the motion to dismiss brought on behalf of the State of New Mexico, the effect of which dismissed the action in its entirety, including as against the Park Hill Defendants. On June 9, 2020, Plaintiffs’ appeal of this decision was denied by the New Mexico Court of Appeals.
Removed
On October 9, 2020, Plaintiffs’ petition for a writ of certiorari was denied by the New Mexico Supreme Court. On October 26, 2020, Plaintiffs filed a motion for rehearing with the New Mexico Supreme Court, which was denied on April 15, 2022. Accordingly, Plaintiffs’ claims have been fully dismissed. ITEM 4. MINE SAFETY DISCLOSURES None. 26 PART II.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe performance shown in the graph represents past performance and should not be considered an indication of future performance. 28 Share Repurchases in the Fourth Quarter of 2022 Total Number of Approximate Dollar of Shares Value of Shares Purchased as that May Yet Be Total Number Part of Publicly Purchased Under of Shares Average Price Announced Plans the Plans or Repurchased Paid Per Share or Programs (a) Programs (a) October 1 to October 31 26,122 $ 68.39 26,122 $ 181.2 million November 1 to November 30 92,500 77.01 92,500 174.1 million December 1 to December 31 5,000 74.90 5,000 173.7 million Total 123,622 $ 75.11 123,622 $ 173.7 million (a) On April 25, 2022, the Board authorized a $200 million repurchase program of the Company’s Class A common stock, which is in addition to the previous Board authorizations.
Biggest changeThe performance shown in the graph represents past performance and should not be considered an indication of future performance. 30 Share Repurchases in the Fourth Quarter of 2023 Total Number Approximate Dollar of Shares Value of Shares Purchased as that May Yet Be Total Number Part of Publicly Purchased Under of Shares Average Price Announced Plans the Plans or Repurchased Paid Per Share or Programs (a) Programs (a) October 1 to October 31 — $ — — $ 67.8 Million November 1 to November 30 23,485 84.09 23,485 65.8 Million December 1 to December 31 90,000 98.17 90,000 57.0 Million Total 113,485 $ 95.26 113,485 $ 57.0 Million (a) On February 6, 2024, the Company announced that the Board authorized a $500 million Class A common stock repurchase program, which replaced the then-existing $200 million repurchase program authorized on April 25, 2022, of which $57.0 million was remaining as of December 31, 2023.
Subsidiaries of PJT Partners Holdings LP are generally subject to similar legal limitations on their ability to make distributions to PJT Partners Holdings LP. 27 Stock Performance The following performance graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933, as amended, or the Exchange Act except to the extent we specifically incorporate it by reference into such filing.
Subsidiaries of PJT Partners Holdings LP are generally subject to similar legal limitations on their ability to make distributions to PJT Partners Holdings LP. 29 Stock Performance The following performance graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933, as amended, or the Exchange Act except to the extent we specifically incorporate it by reference into such filing.
The graph assumes $100 was invested in our Class A common stock on December 31, 2017, and in the S&P 500 Index and the S&P Financials Index on December 31, 2017. It also assumes that the dividends were reinvested on the date of payment without payment of commissions.
The graph assumes $100 was invested in our Class A common stock on December 31, 2018, and in the S&P 500 Index and the S&P Financials Index on December 31, 2018. It also assumes that the dividends were reinvested on the date of payment without payment of commissions.
The issuance of shares of Class B common stock was not registered under the Securities Act of 1933 because such shares were not issued in a transaction involving the offer or sale of securities. ITEM 6. [RESERVED] 29
The issuance of Class B common stock was not registered under the Securities Act of 1933 because such shares were not issued in a transaction involving the offer or sale of securities. ITEM 6. [RESERVED] 31
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our Class A common stock is traded on the NYSE under the symbol “PJT.” There is no publicly traded market for our Class B common stock, which is held by the limited partners of PJT Partners Holdings LP.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STO CKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our Class A common stock is traded on the NYSE under the symbol “PJT.” There is no publicly traded market for our Class B common stock, which is held by the limited partners of PJT Partners Holdings LP.
Unregistered Sales/Issuances of Equity Securities and Use of Proceeds In connection with the issuance during the fourth quarter of 2022 of LTIP Units in PJT Partners Holdings LP to certain personnel and the transfer of Partnership Units in PJT Partners Holdings LP, PJT Partners Inc. issued three corresponding shares of its Class B common stock, par value $0.01 per share, to these limited partners.
Unregistered Sales/Issuances of Equity Securities and Use of Proceeds In connection with the issuance during the fourth quarter of 2023 of LTIP Units in PJT Partners Holdings LP to certain personnel and the transfer of Partnership Units in PJT Partners Holdings LP, PJT Partners Inc. issued two corresponding shares of its Class B common stock, par value $0.01 per share, to these limited partners.
Partnership Unit holders will not be precluded from effecting exchanges under our exchange agreement prior to any such actions being taken.
Partnership Unit holders will not be precluded from effecting exchanges under our exchange agreement, as amended, prior to any such actions being taken.
Our stock price performance shown in the graph below is not indicative of future stock price performance. The stock performance graph below compares the performance of an investment in our Class A common stock from December 31, 2017 through December 31, 2022, with that of the S&P 500 Index and the S&P Financials Index.
Our stock price performance shown in the graph below is not indicative of future stock price performance. The stock performance graph below compares the performance of an investment in our Class A common stock from December 31, 2018 through December 31, 2023, with that of the S&P 500 Index and the S&P Financials Index.
As of February 17, 2023, there were 91 holders of record of our Class A common stock. This does not include the number of holders that hold Class A common stock in “street name” through banks or broker-dealers. Dividend Policy The Company currently plans to regularly pay quarterly dividends.
As of February 21, 2024, there were 84 holders of record of our Class A common stock. This does not include the number of holders that hold Class A common stock in “street name” through banks or broker-dealers. Dividend Policy The Company currently plans to regularly pay quarterly dividends.
PJT Partners Inc. is a holding company and has no material assets other than its controlling equity interest in PJT Partners Holdings LP, and certain cash and cash equivalents it may hold from time to time as described below.
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 described below.
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.
Under the new repurchase program, which has no expiration date, 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.
Removed
As of December 31, 2022, the Company’s remaining repurchase authorization was $173.7 million. 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.
Added
The repurchase program may be suspended or discontinued at any time and does not have a specified expiration date.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe portion of net income attributable to the non-controlling interests is presented separately in the Consolidated Statements of Operations. 32 Consolidated Results of Operations The following table sets forth our consolidated results of operations for the years ended December 31, 2022, 2021 and 2020: Year Ended December 31, 2022 vs. 2021 2021 vs. 2020 2022 2021 2020 $ % $ % (Dollars in Thousands) Revenues Advisory Fees $ 823,496 $ 762,723 $ 872,286 $ 60,773 8 % $ (109,563 ) (13 %) Placement Fees 192,890 216,692 162,237 (23,802 ) (11 %) 54,455 34 % Interest Income and Other 9,119 12,530 17,777 (3,411 ) (27 %) (5,247 ) (30 %) Total Revenues 1,025,505 991,945 1,052,300 33,560 3 % (60,355 ) (6 %) Expenses Compensation and Benefits 669,141 640,040 683,393 29,101 5 % (43,353 ) (6 %) Occupancy and Related 35,253 34,686 34,282 567 2 % 404 1 % Travel and Related 25,197 9,073 7,345 16,124 178 % 1,728 24 % Professional Fees 27,200 27,209 23,014 (9 ) (0 %) 4,195 18 % Communications and Information Services 16,897 18,060 14,669 (1,163 ) (6 %) 3,391 23 % Depreciation and Amortization 15,475 15,750 15,055 (275 ) (2 %) 695 5 % Other Expenses 34,871 27,678 26,581 7,193 26 % 1,097 4 % Total Expenses 824,034 772,496 804,339 51,538 7 % (31,843 ) (4 %) Income Before Provision for Taxes 201,471 219,449 247,961 (17,978 ) (8 %) (28,512 ) (11 %) Provision for Taxes 36,699 29,494 35,535 7,205 24 % (6,041 ) (17 %) Net Income 164,772 189,955 212,426 (25,183 ) (13 %) (22,471 ) (11 %) Net Income Attributable to Non-Controlling Interests 74,238 83,787 94,877 (9,549 ) (11 %) (11,090 ) (12 %) Net Income Attributable to PJT Partners Inc. $ 90,534 $ 106,168 $ 117,549 $ (15,634 ) (15 %) $ (11,381 ) (10 %) Revenues The following table provides revenue statistics for the years ended December 31, 2022, 2021 and 2020: Year Ended December 31, 2022 2021 2020 Total Number of Clients 405 399 374 Total Number of Fees of at Least $1 Million from Client Transactions 187 159 173 There were no clients representing greater than 10% of revenues for the years ended December 31, 2022, 2021 and 2020.
Biggest changeThe portion of net income attributable to the non-controlling interests is presented separately in the Consolidated Statements of Operations. 34 Consolidated Results of Operations The following table sets forth our consolidated results of operations for the years ended December 31, 2023, 2022 and 2021: Year Ended December 31, 2023 vs. 2022 2022 vs. 2021 2023 2022 2021 $ % $ % (Dollars in Thousands) Revenues Advisory Fees $ 1,026,646 $ 823,496 $ 762,723 $ 203,150 25 % $ 60,773 8 % Placement Fees 102,611 192,890 216,692 (90,279 ) (47 %) (23,802 ) (11 %) Interest Income and Other 23,925 9,119 12,530 14,806 162 % (3,411 ) (27 %) Total Revenues 1,153,182 1,025,505 991,945 127,677 12 % 33,560 3 % Expenses Compensation and Benefits 805,385 669,141 640,040 136,244 20 % 29,101 5 % Occupancy and Related 40,420 35,253 34,686 5,167 15 % 567 2 % Travel and Related (1) 31,190 30,404 10,811 786 3 % 19,593 181 % Professional Fees 36,581 27,200 27,209 9,381 34 % (9 ) (0 %) Communications and Information Services 17,157 16,897 18,060 260 2 % (1,163 ) (6 %) Depreciation and Amortization 14,047 15,475 15,750 (1,428 ) (9 %) (275 ) (2 %) Other Expenses (1) 30,793 29,664 25,940 1,129 4 % 3,724 14 % Total Expenses 975,573 824,034 772,496 151,539 18 % 51,538 7 % Income Before Provision for Taxes 177,609 201,471 219,449 (23,862 ) (12 %) (17,978 ) (8 %) Provision for Taxes 31,927 36,699 29,494 (4,772 ) (13 %) 7,205 24 % Net Income 145,682 164,772 189,955 (19,090 ) (12 %) (25,183 ) (13 %) Net Income Attributable to Non-Controlling Interests 63,883 74,238 83,787 (10,355 ) (14 %) (9,549 ) (11 %) Net Income Attributable to PJT Partners Inc. $ 81,799 $ 90,534 $ 106,168 $ (8,735 ) (10 %) $ (15,634 ) (15 %) (1) Certain balances on the Consolidated Statements of Operations in the prior periods have been reclassified to conform to their current presentation.
This revenue is primarily a function of the number of active engagements we have, the size of each of those engagements and the fees we charge for our services. We provide a range of strategic advisory, capital markets advisory, restructuring and special situations and shareholder advisory services to corporations, financial sponsors, institutional investors and governments around the world.
This revenue is primarily a function of the number of active engagements we have, the size of each of those engagements and the fees we charge for our services. We provide a range of strategic advisory, shareholder advisory, capital markets advisory, and restructuring and special situations services to corporations, financial sponsors, institutional investors and governments around the world.
Changes in this expense are driven by fluctuations in the number of employees, composition of our workforce, business performance, compensation adjustments in relation to market movements, changes in rates for employer taxes and other cost increases affecting benefit plans.
Changes in this expense are driven by fluctuations in the number of employees, the composition of our workforce, business performance, compensation adjustments in relation to market movements, changes in rates for employer taxes and other cost increases affecting benefit plans.
Additionally, we allocate the transaction price to the respective performance obligation(s) by estimating the amount of consideration in which we expect to be entitled in exchange for transferring the promised services to the customer. For performance obligations that are satisfied over time, determining a measure of progress requires management to make judgments that affect the timing of revenue recognized.
Additionally, we allocate the transaction price to the respective performance obligation(s) by estimating the amount of consideration in which we expect to be entitled in exchange for transferring the promised services to the customer. 39 For performance obligations that are satisfied over time, determining a measure of progress requires management to make judgments that affect the timing of revenue recognized.
Interest Income and Other – Interest Income and Other represents interest typically earned on Cash and Cash Equivalents, investments in Treasury securities and outstanding placement fees receivable; miscellaneous income; foreign exchange gains and losses arising from transactions denominated in currencies other than U.S. dollars; sublease income; and the amount of expense reimbursement invoiced to clients related to out-of-pocket expenses.
Interest Income and Other – Interest Income and Other represents interest typically earned on Cash and Cash Equivalents, investments in Treasury securities and outstanding placement fees receivable; foreign exchange gains and losses arising from transactions denominated in currencies other than U.S. dollars; sublease income; and the amount of expense reimbursement invoiced to clients related to out-of-pocket expenses.
Compensation cost relating to the issuance of equity-based awards with a requisite service period to partners and employees is measured at fair value at the grant date, taking into consideration expected forfeitures, and expensed over the vesting period on a straight-line basis. Equity-based awards that do not require future service are expensed immediately.
Compensation costs relating to the issuance of equity-based awards with a requisite service period to partners and employees is measured at fair value at the grant date, taking into consideration expected forfeitures, and expensed over the vesting period on a straight-line basis. Equity-based awards that do not require future service are expensed immediately.
Exchange Agreement Subject to the terms and conditions of the exchange agreement between us and certain of the holders of Partnership Units (other than PJT Partners Inc.), Partnership Units are exchangeable at the option of the holder for cash or, at our election, for shares of our Class A common stock on a one-for-one basis.
Exchange Agreement Subject to the terms and conditions of the exchange agreement, as amended, between us and certain of the holders of Partnership Units (other than PJT Partners Inc.), Partnership Units are exchangeable at the option of the holder for cash or, at our election, for shares of our Class A common stock on a one-for-one basis.
These taxes have been reflected in our consolidated financial statements. PJT Partners Inc. is subject to U.S. corporate federal, state and local income tax on its allocable share of results of operations from the operating partnership (PJT Partners Holdings LP).
These taxes have been reflected in our consolidated financial statements. PJT Partners Inc. is subject to U.S. corporate federal, state and local income tax on its allocable share of results of operations from the holding partnership (PJT Partners Holdings LP).
Financial Statements and Supplementary Data” of this filing. As of December 31, 2022 and 2021, we were in compliance with the debt covenants under the Renewal Agreement and Amended and Restated Loan Agreement, respectively.
Financial Statements and Supplementary Data” of this filing. As of December 31, 2023 and 2022, we were in compliance with the debt covenants under the Renewal Agreement and Amended and Restated Loan Agreement, respectively.
Additionally, at that point we have a present right to payment, we have transferred the output of the service and the customer has significant risks and rewards of ownership. 37 Compensation and Benefits Compensation and Benefits includes salaries, cash bonuses and restricted cash awards, benefits, employer taxes and equity-based compensation associated with the grants of equity-based awards to partners and employees.
Additionally, at that point we have a present right to payment, we have transferred the output of the service and the customer has significant risks and rewards of ownership. Compensation and Benefits Compensation and Benefits includes salaries, restricted and unrestricted cash awards, benefits, employer taxes and equity-based compensation associated with the grants of equity-based awards to partners and employees.
For open-end fund structures, placement fees are typically calculated as a percentage of a placed investor’s month-end net asset value. Typically, we earn fees for such open-end fund structures over a 48 month period. For these arrangements, revenue is recognized over time as the constraint over variable consideration is lifted.
For open-end fund structures, placement fees are typically calculated as a percentage of a placed investor’s month-end net asset value. Typically, we earn fees for such open-end fund structures over a four year period. For these arrangements, revenue is recognized over time as the constraint over variable consideration is lifted.
We have omitted the discussion of the earliest of the three years covered in the 2022 Annual Report on Form 10-K. Such discussion is included in “Part II. Item 7.
We have omitted the discussion of the earliest of the three years covered in the 2023 Annual Report on Form 10-K. Such discussion is included in “Part II. Item 7.
Our company headquarters are located in New York, New York, and we maintain additional offices in the U.S. and throughout the world; • Travel and Related – consisting of costs for our partners and employees to render services where our clients are located; 31 • Professional Fees – consisting primarily of consulting, audit and tax, senior advisors, recruiting , legal and other professional services; • Communications and Information Services – consisting primarily of costs for our technology infrastructure and telecommunications costs; • Depreciation and Amortization – consisting of depreciation and amortization on our furniture, equipment, leasehold improvements and intangible assets; and • Other Expenses – consisting primarily of provision for credit losses, regulatory fees, insurance, fees paid for access to external market data, advertising, events, charitable contributions, and other general operating expenses.
Our company headquarters are located in New York, New York, and we maintain additional offices in the U.S. and throughout the world; • Travel and Related – consisting of costs for our partners and employees to render services where our clients are located; • Professional Fees – consisting primarily of consulting, audit and tax, senior advisors, recruiting, legal and other professional services; • Communications and Information Services – consisting primarily of costs for our technology infrastructure, business applications and cybersecurity related costs; • Depreciation and Amortization – consisting of depreciation and amortization on our furniture, equipment, leasehold improvements and intangible assets; and • Other Expenses – consisting primarily of provision for credit losses, regulatory fees, insurance, fees paid for access to external market data, advertising, charitable contributions, and other general operating expenses.
Expenses Compensation and Benefits – Compensation and Benefits expense includes salaries, cash bonuses and restricted cash awards, benefits, employer taxes and equity-based compensation associated with the grants of equity-based awards to partners and employees.
Expenses Compensation and Benefits – Compensation and Benefits expense includes salaries, restricted and unrestricted cash awards, benefits, employer taxes and equity-based compensation associated with the grants of equity-based awards to partners and employees.
On February 1, 2021, PJT Partners Holdings LP, as borrower (the “Borrower”), entered into a Renewal and Modification Agreement (the “Renewal Agreement”) and related documents with First Republic Bank, as lender (the “Lender”), amending the terms of the Borrower’s revolving credit facility with the Lender under the Amended and Restated Loan Agreement dated October 1, 2018 (the “Amended and Restated Loan Agreement”).
On February 1, 2021, PJT Partners Holdings LP, as borrower (the “Borrower”), entered into a Renewal and Modification Agreement (the “Renewal Agreement”) and related documents with First Republic Bank (now part of JPMorgan Chase), as lender (the “Lender”), amending the terms of the Borrower’s revolving credit facility with the Lender under the Amended and Restated Loan Agreement dated October 1, 2018 (the “Amended and Restated Loan Agreement”).
Sources and Uses of Liquidity Our primary cash needs are for working capital, paying operating expenses, including cash compensation to our employees, exchanging of Partnership Units for cash, repurchasing shares of the Company’s Class A common stock, paying income taxes, making distributions to our shareholders in accordance with our dividend policy, partnership tax distributions, capital expenditures, making payments pursuant to the tax receivable agreement, commitments and strategic investments.
Sources and Uses of Liquidity Our primary cash needs are for working capital, paying operating expenses, including cash compensation to our employees, exchanging of Partnership Units for cash, repurchasing shares of the Company’s Class A common stock, paying income taxes, dividend payments, partnership tax distributions, capital expenditures, making payments pursuant to the tax receivable agreement, commitments and strategic investments.
We are subject to regulatory requirements in the U.S. and certain international jurisdictions to ensure general financial soundness and liquidity. This requires, among other things, that we comply with certain minimum capital requirements, recordkeeping, reporting procedures, experience and training requirements for employees and certain other requirements and procedures.
Regulatory Capital We actively monitor our regulatory capital base. We are subject to regulatory requirements in the U.S. and certain international jurisdictions to ensure general financial soundness and liquidity. This requires, among other things, that we comply with certain minimum capital requirements, recordkeeping, reporting procedures, experience and training requirements for employees and certain other requirements and procedures.
Guarantee The Company provides a guarantee to a lending institution for certain loans held by employees for investment in funds of its former Parent, which are secured by the underlying investments in those funds. The amount guaranteed was $3.3 million and $4.1 million as of December 31, 2022 and 2021, respectively.
Guarantee The Company provides a guarantee to a lending institution for certain loans held by employees for investment in funds of its former Parent, which are secured by the underlying investments in those funds. The amount guaranteed was $2.3 million and $3.3 million as of December 31, 2023 and 2022, respectively.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the 2021 Annual Report on Form 10-K, as filed with the Securities and Exchange Commission on February 25, 2022, and is incorporated herein by reference.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the 2022 Annual Report on Form 10-K, as filed with the Securities and Exchange Commission on February 24, 2023, and is incorporated herein by reference.
Depending on our liquidity and capital resources, market conditions, the timing and concentration of exchange requests and other considerations, we may choose to fund exchanges of Partnership Units with available cash, borrowings or new issuances of Class A common stock or to settle exchanges by issuing Class A common stock to the exchanging holder of Partnership Units. 35 See Note 1 3.
Depending on our liquidity and capital resources, market conditions, the timing and concentration of exchange requests and other considerations, we may choose to fund exchanges of Partnership Units with available cash, borrowings or new 37 issuances of Class A common stock or to settle exchanges by issuing Class A common stock to the exchanging holder of Partnership Units.
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.
Under the new repurchase program, which has no expiration date, 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.
On April 25, 2022, the Renewal Agreement was further amended to extend the maturity date to October 1, 2023. Further information regarding the Renewal Agreement and Amended and Restated Loan Agreement can be found in Note 14. “Commitments and Contingencies—Commitments, Line of Credit” in the “Notes to Consolidated Financial Statements” in “ — Item 8.
On February 7, 2023, the Renewal Agreement was further amended to extend the maturity date to October 1, 2024. Further information regarding the Renewal Agreement and Amended and Restated Loan Agreement can be found in Note 14. “Commitments and Contingencies—Commitments, Line of Credit” in the “Notes to Consolidated Financial Statements” in “—Item 8.
Amounts are payable annually (for periods in which a cash benefit is realized) within nine months of the end of the relevant tax period. The amount of the tax benefit liability was $3.4 million as of December 31, 2022. Further disclosure regarding this liability is provided in Note 14.
Amounts are payable annually (for periods in which a cash benefit is realized) within nine months of the end of the relevant tax period. The amount of the tax benefit liability was $0.1 million as of December 31, 2023. Further disclosure regarding this liability is provided in Note 14.
In conjunction with providing restructuring advice, we may also assist with raising various forms of financing, including debt and equity. Our secondary advisory services include providing GP solutions and investing solutions to clients seeking portfolio liquidity, unfunded commitment relief and investments in secondary markets.
In conjunction with providing restructuring advice, we may also assist with raising various forms of financing, including debt and equity. Our private capital solutions services include providing General Partner solutions and investing solutions to clients seeking portfolio liquidity, unfunded commitment relief and investments in secondary markets.
Late payments under the tax receivable agreement generally will accrue interest at an uncapp ed rate equal to LIBOR plus 500 basis points. Pursuant to the employee matters agreement entered into with Blackstone, we have agreed to pay Blackstone the net realized cash benefit resulting from certain compensation-related tax deductions.
Late payments under the tax receivable agreement generally will accrue interest at an uncapped rate equal to SOFR plus 72 basis points. Pursuant to the employee matters agreement entered into with Blackstone, we have agreed to pay Blackstone the net realized cash benefit resulting from certain compensation-related tax deductions.
“Transactions with Related Parties—Exchange Agreement ” in the “Notes to Consolidated Financial Statements” in “ — Item 8. Financial Statements and Supplementary Data” of this filing for further information .
See Note 13. “Transactions with Related Parties—Exchange Agreement” in the “Notes to Consolidated Financial Statements” in “—Item 8. Financial Statements and Supplementary Data” of this filing for further information.
Financial Statements and Supplementary Data” of this filing. 36 Estimating the amount of payments that may be made under the tax receivable agreement entered into with the holders of Partnership Units (other than PJT Partners Inc.) is by its nature imprecise, insofar as the calculation of amounts payable depends on a variety of factors.
Estimating the amount of payments that may be made under the tax receivable agreement entered into with the holders of Partnership Units (other than PJT Partners Inc.) is by its nature imprecise, insofar as the calculation of amounts payable depends on a variety of factors.
In connection with these matters, we have incurred and may continue to incur legal expenses, which are expensed as incurred. Contractual Obligations We have entered into operating leases, primarily with respect to office space in our various locations. Further disclosure regarding our leases is provided in Note 12.
In connection with these matters, we have incurred and may continue to incur legal expenses, which are expensed as incurred. Contractual Obligations We have entered into operating leases, primarily with respect to office space in our various locations. Further disclosure regarding our leases is provided in Note 12. “Leases” in the “Notes to Consolidated Financial Statements” in “—Item 8.
Non-Controlling Interests PJT Partners Inc. is a holding company and its only material asset is its controlling equity interest in PJT Partners Holdings LP, and certain cash and cash equivalents it may hold from time to time.
Non-Controlling Interests 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.
Although we believe that the arrangement we have in place, and our ability to renew that arrangement, will permit us to finance our operations on acceptable terms and conditions for the foreseeable future, our access to, and the availability of, financing on acceptable terms and conditions in the future will be impacted by many factors, including: (a) business performance, (b) our credit ratings or absence of a credit rating, (c) the liquidity of the overall capital markets, and (d) the current state of the economy.
Although we believe that our revolving credit facility, and our ability to renew it, will permit us to finance our operations on acceptable terms and conditions for the foreseeable future, our access to, and the availability of, financing on acceptable terms and conditions in the future will be impacted by many factors, including: business performance; our credit ratings or absence of a credit rating; the liquidity of the overall capital markets; the current state of the economy; and stability of our lending institution.
This resulted in an effective tax rate of 18.2% and 13.4%, respectively, based on our Income Before Provision for Taxes of $201.5 million and $219.4 million for the years ended December 31, 2022 and 2021, respectively.
This resulted in an effective tax rate of 18.0% and 18.2%, respectively, based on our Income Before Provision for Taxes of $177.6 million and $201.5 million for the years ended December 31, 2023 and 2022, respectively.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis should be read in conjunction with PJT Partners Inc.’s Consolidated Financial Statements and the related notes included in this Annual Report on Form 10‑K. Our Business PJT Partners is a premier global advisory-focused investment bank.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis should be read in conjunction with PJT Partners Inc.’s Consolidated Financial Statements and the related notes included in this Annual Report on Form 10‑K.
Provision for Taxes The Company’s Provision for Taxes for the year ended December 31, 2022 was $36.7 million compared with $29.5 million for the year ended December 31, 2021.
Provision for Taxes The Company’s Provision for Taxes for the year ended December 31, 2023 was $31.9 million compared with $36.7 million for the year ended December 31, 2022.
Actual payments may differ significantly from estimated payments. Further disclosure regarding the tax receivable agreement is presented in Note 2. “Summary of Significant Accounting Policies—Amount Due Pursuant to Tax Receivable Agreement” and Note 13. “Transactions with Related Parties—Tax Receivable Agreement” in the “Notes to Consolidated Financial Statements” in “ — Item 8.
Further disclosure regarding the tax receivable agreement is presented in Note 2. “Summary of Significant Accounting Policies—Amount Due Pursuant to Tax Receivable Agreement” and Note 13. “Transactions with Related Parties—Tax Receivable Agreement” in the “Notes to Consolidated Financial Statements” in “—Item 8. Financial Statements and Supplementary Data” of this filing.
As a result, market sentiment has shifted away from highly concentrated portfolio structures in favor of diversification. Key Financial Measures Revenues Substantially all of our revenues are derived from contracts with clients to provide advisory and placement services.
As a result, market sentiment has shifted away from highly concentrated portfolio structures in favor of diversification. 1 Source: LSEG Global Mergers & Acquisitions Review for Full Year of 2023 as of December 31, 2023. Key Financial Measures Revenues Substantially all of our revenues are derived from contracts with clients to provide advisory and placement services.
We expect to fund these liquidity requirements through cash flows from operations and borrowings under our revolving credit facility. Our ability to fund these needs through cash flows from operations will depend, in part, on our ability to generate or raise cash in the future.
We expect to fund these liquidity requirements through cash flows from operations and borrowings under our revolving credit facility. Our ability to fund these needs will depend, in part, on our ability to generate or raise cash in the future which depends on our future financial results, which are subject to general economic, financial, competitive, legislative and regulatory factors.
Our remaining expenses are the other costs typical to operating our business, which generally consist of: • Occupancy and Related – consisting primarily of costs related to leased property, including rent, maintenance, real estate taxes, utilities and other related costs.
These hires generally do not generate significant revenue in the year they are hired. 33 Our remaining expenses are the other costs typical to operating our business, which generally consist of: • Occupancy and Related – consisting primarily of costs related to leased property, including rent, maintenance, real estate taxes, utilities and other related costs.
Included in Accounts Receivable, Net are long-term receivables of $133.3 million and $104.6 million as of December 31, 2022 and 2021, respectively, related to placement fees that are generally paid in installments over a period of three to four years.
As of December 31, 2023 and 2022, the allowance for credit losses was $2.4 million and $1.9 million, respectively. Included in Accounts Receivable, Net are long-term receivables of $84.4 million and $133.3 million as of December 31, 2023 and 2022, respectively, related to placement fees that are generally paid in installments over a period of three to four years.
Additionally, as of December 31, 2022 and 2021, there were no borrowings outstanding under the revolving credit facility. 34 We evaluate our cash needs on a regular basis in light of current market conditions.
Additionally, as of December 31, 2023 and 2022, there were no borrowings outstanding under the revolving credit facility. 36 We evaluate our cash needs on a regular basis in light of current market conditions. As of December 31, 2023 and 2022, we had cash, cash equivalents and short-term investments of $436.9 million and $223.5 million, respectively.
If our cash flows from operations are significantly reduced, we may need to incur debt, issue additional equity or borrow from our revolving credit facility.
Additionally, our ability to generate positive cash flow from operations will be impacted by global economic conditions. If our cash flows from operations are significantly reduced, we may need to borrow from our revolving credit facility, incur debt, or issue additional equity.
Recent Accounting Developments Information regarding recent accounting developments and their impact on PJT Partners can be found in Note 2. “Summary of Significant Accounting Policies—Recent Accounting Developments” in the “Notes to Consolidated Financial Statements” in “ — Item 8. Financial Statements and Supplementary Data” of this filing.
“Summary of Significant Accounting Policies—Recent Accounting Developments” in the “Notes to Consolidated Financial Statements” in “—Item 8. Financial Statements and Supplementary Data” of this filing.
“Leases” in the “Notes to Consolidated Financial Statements” in “ — Item 8. Financial Statements and Supplementary Data” of this filing. As of December 31, 2022, we had an amount due of $30.3 million pursuant to the tax receivable agreement, which represents management’s best estimate of the amounts currently expected to be owed under the tax receivable agreement.
Financial Statements and Supplementary Data” of this filing. 38 As of December 31, 2023, we had an amount due of $29.7 million pursuant to the tax receivable agreement, which represents management’s best estimate of the amounts currently expected to be owed under the tax receivable agreement. Actual payments may differ significantly from estimated payments.
Total Revenues were $1,025.5 million for the year ended December 31, 2022 compared with $991.9 million for the year ended December 31, 2021, a 3% increase. Advisory Fees were $823.5 million for the year ended December 31, 2022, an increase of $60.8 million compared with $762.7 million for the year ended December 31, 2021.
Total Revenues were $1,153.2 million for the year ended December 31, 2023 compared with $1,025.5 million for the year ended December 31, 2022, a 12% increase. Advisory Fees were $1,026.6 million for the year ended December 31, 2023, an increase of $203.1 million compared with $823.5 million for the year ended December 31, 2022.
The amount and timing of the fees paid vary by the type of engagement and are typically based on retainers, completion of a transaction or a capital raise.
We also provide public and private placement fundraising services to our corporate clients and recognize placement and underwriting fees based on the successful completion of the transaction. The amount and timing of the fees paid vary by the type of engagement and are typically based on retainers, completion of a transaction or a capital raise.
We believe that our future cash from operations and availability under our revolving credit facility, together with our access to funds on hand, will provide adequate resources to fund our short-term and long-term liquidity and capital needs. Regulatory Capital We actively monitor our regulatory capital base.
We cannot provide any assurance that such financing will be available to us on acceptable terms or that such financing will be available at all. We believe that our future cash from operations and availability under our revolving credit facility, together with our access to funds on hand, will provide adequate resources to fund our liquidity and capital needs.
Restricted cash awards are expensed over the vesting period on a straight-line basis. In certain instances, we may grant equity-based awards containing both a service and a market condition. The effect of the market condition is reflected in the grant date fair value of the award.
Restricted cash awards are expensed over the vesting period on a straight-line basis. Certain awards are expensed over the expected service period for partners and employees who are or will become retirement eligible prior to the stated vesting date. In certain instances, we may grant equity-based awards containing both a service and a market condition.
As of December 31, 2022 and 2021 , we had cash, cash equi valents and short-term investments of $ 223.5 million and $ 200.5 million , respectively . Our liquidity is highly dependent upon cash receipts from clients, which are generally dependent upon the successful completion of transactions as well as the timing of receivable collections.
Our liquidity is highly dependent upon cash receipts from clients, which are generally dependent upon the successful completion of transactions as well as the timing of receivable collections. As of December 31, 2023 and 2022, total accounts receivable, net of allowance for credit losses, were $263.5 million and $317.8 million, respectively.
The increase in Advisory Fees was principally due to an increase in restructuring revenues. Placement Fees were $192.9 million for the year ended December 31, 2022, a decrease of $23.8 million compared with $216.7 million for the year ended December 31, 2021.
The increase in Advisory Fees was due to an increase in restructuring revenues, which was partially offset by decreases in strategic advisory and private capital solutions. Placement Fees were $102.6 million for the year ended December 31, 2023, a decrease of $90.3 million compared with $192.9 million for the year ended December 31, 2022.
Compensation cost is recognized for an award with a market condition over the requisite service period, provided that the requisite service period is completed, irrespective of whether the market condition is satisfied. If the market condition has not been satisfied during the vesting period, the remaining unrecognized compensation cost will continue to be recognized over the requisite service period.
Compensation cost is recognized for an award with a market condition over the requisite service period, provided that the requisite service period is completed, irrespective of whether the market condition is satisfied. If a recipient terminates employment before completion of the requisite service period, any compensation cost previously recognized is reversed.
We advise on all aspects of the fundraising process including competitive positioning and market assessment, marketing materials and related documentation including partnership terms and conditions most prevalent in the current environment. We also provide public and private placement fundraising services to our corporate clients and recognize placement and underwriting fees based on the successful completion of the transaction.
Our fund placement services primarily serve a diverse range of investment strategies, 32 including private equity, alternative credit/hedge funds, and real estate. We advise on all aspects of the fundraising process including competitive positioning and market assessment, marketing materials and related documentation including partnership terms and conditions most prevalent in the current environment.
Share Repurchase Program On April 25, 2022, the Board authorized a $200 million repurchase program of the Company’s Class A common stock, which is in addition to the previous Board authorizations. As of December 31, 2022, the Company’s remaining repurchase authorization was $173.7 million.
Share Repurchase Program On February 6, 2024, the Company announced that the Board authorized a $500 million Class A common stock repurchase program, which replaced the then-existing $200 million repurchase program authorized on April 25, 2022, of which $57.0 million was remaining as of December 31, 2023.
At our discretion, we may provide compensation to certain employees with repayment obligations and/or service provisions. Such payments are recorded in Compensation and Benefits in the Consolidated Statements of Operations. We assess the potential risk of forfeiture and likelihood of recouping amounts paid, and if deemed necessary, record a provision for forfeitures in the financial statements.
If the market condition is satisfied after the service condition but before the derived service period, the remaining unrecognized compensation cost is accelerated. At our discretion, we may provide compensation to certain employees with repayment obligations and/or service provisions. Such payments are recorded in Compensation and Benefits in the Consolidated Statements of Operations.
Risk Factors” of this filing for a discussion of some of the factors that can affect our performance. M&A is a cyclical business that is impacted by macroeconomic conditions. There are several factors weighing on global M&A activity in the intermediate-term, including monetary policy, a downturn in equity markets, greater economic and geopolitical uncertainty and slowing global growth.
Business Environment Economic and global financial conditions can materially affect our operational and financial performance. See “Part I. Item 1A. Risk Factors” of this filing for a discussion of some of the factors that can affect our performance. M&A is a cyclical business that is impacted by macroeconomic conditions.
The increase in expenses was principally attributable to increases in Compensation and Benefits and Travel and Related of $29.1 million and $16.1 million, respectively. The increase in Compensation and Benefits reflects a higher compensation accrual rate in 2022 compared with 2021. Travel and Related increased during the current year due to increased levels of business travel.
The increase in expenses was principally attributable to increases in Compensation and Benefits, Professional Fees and Occupancy and Related expenses of $136.2 million, $9.4 million and $5.2 million, respectively. The increase in Compensation and Benefits was driven by the combination of higher revenues and a higher accrual rate compared with the prior year.
The decrease in Placement Fees was due to a decrease in corporate placement revenues. 33 Expenses Expenses were $824.0 million for the year ended December 31, 2022, an increase of $51.5 million compared with $772.5 million for the year ended December 31, 2021.
Interest Income and Other revenues were $23.9 million, an increase from $9.1 million in the prior year, principally due to higher interest income. 35 Expenses Expenses were $975.6 million for the year ended December 31, 2023, an increase of $151.5 million compared with $824.0 million for the year ended December 31, 2022.
The expense associated with our bonus and equity plans can also have a significant impact on this expense category and may vary from year to year. We maintain compensation programs, including salaries, annual incentive compensation (that may include components of cash, restricted cash and/or equity-based awards) and benefits programs.
The expense associated with our restricted and unrestricted cash award and equity plans can also have a significant impact on this expense category and may vary from year to year. Certain awards are expensed over the expected service period for partners and employees who are or will become retirement eligible prior to the stated vesting date.
Increasing the number of high-caliber, experienced senior level employees is critical to our growth efforts. In our advisory businesses, these hires generally do not begin to generate significant revenue in the year they are hired.
Increasing the number of high-caliber, experienced senior level employees is critical to our growth efforts and our continued investment in senior talent may also increase compensation and benefits expense.
Worldwide M&A announced volumes during 2022 were down 37% compared with 2021 1 as these factors adversely impacted the strength of strategic activity. While the pace of activity has changed, we expect corporate boards and management teams to continue to use M&A as a strategic tool.
There are several factors weighing on global M&A activity in the intermediate-term, including monetary policy, greater economic and geopolitical uncertainty and slowing global growth. Worldwide M&A announced volumes during 2023 were down 17% compared with 2022 1 as these factors adversely impacted the strength of strategic activity.
Removed
We offer a unique portfolio of advisory services designed to help our clients achieve their strategic objectives. Our team of senior professionals delivers a range of strategic advisory, capital markets advisory, restructuring and special situations and shareholder advisory services to corporations, financial sponsors, institutional investors and governments around the world.
Added
Our Business PJT Partners is a premier, global, advisory-focused investment bank that was built from the ground up to be different. Our highly experienced, collaborative teams provide independent advice coupled with old-world, high-touch client service. This ethos has allowed us to attract some of the very best talent in the markets in which we operate.
Removed
We also provide private fund advisory and fundraising services for alternative investment strategies, including private equity, real estate, hedge funds and private credit. Further information regarding our business is provided in “Part I. Item 1. Business” of this filing. Business Environment Economic and global financial conditions can materially affect our operational and financial performance. See “Part I. Item 1A.
Added
We deliver leading advice to many of the world's most consequential companies, effect some of the most transformative transactions and restructurings and raise billions of dollars of capital around the globe to support startups and more established companies. Further information regarding our business is provided in “Part I. Item 1. Business” of this filing.
Removed
A combination of sharply higher financing costs, dislocated capital markets and more challenging operating fundamentals led to increased global restructuring activity during 2022. Adverse macroeconomic conditions, particularly in the debt and equity markets drove an increase of in-court restructurings, particularly in the second half of the year.
Added
While we expect the markets to recover to historical relationships, between M&A activity and broader market benchmarks, the pace of such recovery remains unclear. Global restructuring and liability management activity remained at elevated levels throughout 2023 as elevated interest rates, dislocated capital markets and slowing economic growth drove an increase in balance sheet restructurings and liability management activity.
Removed
In addition, out-of-court liability management transactions, primarily driven by financial sponsor activity remained active. Restructuring opportunities remain across most sectors and geographies including healthcare, consumer-driven businesses and industrials driven by a mix of liability management, capital raise transactions and more traditional in-court Chapter 11 activities.
Added
Restructuring activity during the year was driven by a mix of both liability management activity as well as in-court restructuring assignments as companies, creditors and financial sponsors continued to focus on comprehensive capital structure solutions. Both liability management and more traditional restructuring transactions remain dispersed across a broad cross section of industries and geographies.
Removed
Our fund placement services primarily serve alternative investment strategies, including private equity, real estate, 1 Source: Refinitiv Global Mergers & Acquisitions Review for Full Year of 2022 as of December 31, 2022. 30 hedge funds and private credit .
Added
Over time, a greater number of partners and employees may become retirement eligible and the related requisite service period over which the expense is recognized will be shorter than the stated vesting period. We maintain compensation programs, including salaries, annual incentive compensation (that may include components of unrestricted cash, restricted cash and/or equity-based awards) and benefits programs.
Removed
The increase in effective tax rate for the year ended December 31, 2022 from the year ended December 31, 2021 was primarily driven by an increase in permanent differences related to equity-based compensation and entity level tax in state and local jurisdictions.
Added
For the years ended December 31, 2022 and 2021, this resulted in a reclassification of $5.2 million and $1.7 million, respectively, from Other Expenses to Travel and Related. This reclassification had no impact on net income or Consolidated Statements of Financial Condition.
Removed
As of December 31, 2022 and 2021, total accounts receivable, net of allowance for credit losses, were $317.8 million and $289.3 million, respectively. As of December 31, 2022 and 2021, the allowance for credit losses was $1.9 million.
Added
Revenues The following table provides revenue statistics for the years ended December 31, 2023, 2022 and 2021: Year Ended December 31, 2023 2022 2021 Total Number of Clients 381 405 399 Total Number of Fees of at least $1 Million from Client Transactions 198 187 159 There were no clients representing greater than 10% of revenues for the years ended December 31, 2023, 2022 and 2021.
Removed
This depends on our future financial results, which are subject to general economic, financial, competitive, legislative and regulatory factors. Additionally, our ability to generate positive cash flow from operations will be impacted by global economic conditions.
Added
The decrease in Placement Fees was principally due to a decrease in fund placement revenues.
Removed
We cannot provide any assurance that such financing will be available to us on acceptable terms or that such financing will be available at all.
Added
Professional Fees increased principally due to higher consulting and legal expenses relating to the firm's business activities. Occupancy and Related increased principally due to the further expansion of our New York headquarters.
Removed
If a recipient terminates employment before completion of the requisite service period, any compensation cost previously recognized is reversed unless the market condition has been satisfied prior to termination. If the market condition has been satisfied during the vesting period, the remaining unrecognized compensation cost is accelerated.
Added
The effect of the market condition is reflected in the grant date fair value of the award and, for some awards, in the requisite service period based on a derived service period.
Added
We assess the potential risk of forfeiture and likelihood of recouping amounts paid, and if deemed necessary, record a provision for forfeitures in the financial statements. Recent Accounting Developments Information regarding recent accounting developments and their impact on PJT Partners can be found in Note 2.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

7 edited+1 added−1 removed3 unchanged
Biggest changeWe believe our cash, cash equivalents and short-term investments are not subject to any material interest rate risk, equity price risk, credit risk or other market risk based on the short-term nature of the securities.
Biggest changeWe believe our cash, cash equivalents and short-term investments are not subject to any material interest rate risk, equity price risk, credit risk or other market risk based on our diversified use of global and regional financial institutions and the short-term nature of the securities. 40 Credit Risk We estimate our allowance for credit losses using relevant available information from internal and external sources relating to past events, current conditions and reasonable and supportable forecasts.
Notwithstanding, current economic and geopolitical uncertainty and slowing global growth could have a material adverse effect on the Company’s consolidated financial statements.
Notwithstanding the foregoing, current economic and geopolitical uncertainty and slowing global growth could have a material adverse effect on the Company’s consolidated financial statements.
For the years ended December 31, 2022, 2021 and 2020, the impact of the fluctuation of foreign currencies in Other Comprehensive Income (Loss), Net of Tax – Currency Translation Adjustment in the Consolidated Statements of Comprehensive Income were losses of $5.3 million, $1.4 million and a gain of $2.3 million, respectively, and in Interest Income and Other in the Consolidated Statements of Operations, a gain of $0.9 million and losses of $2.0 million and $0.2 million, respectively.
For the years ended December 31, 2023, 2022 and 2021, the impact of the fluctuation of foreign currencies in Other Comprehensive Income (Loss), Net of Tax – Currency Translation Adjustment in the Consolidated Statements of Comprehensive Income were a gain of $3.2 million, and losses of $5.3 million and $1.4 million, respectively, and in Interest Income and Other in the Consolidated Statements of Operations, a loss of $3.5 million, a gain of $0.9 million and a loss of $2.0 million, respectively.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Market Risk and Credit Risk Our business is not capital-intensive and we do not invest in derivative instruments or, generally, borrow. As a result, we are not subject to significant market risk (including interest rate risk, foreign currency exchange rate risk and commodity price risk) or credit risk.
ITEM 7A. QUANTITATIVE AND QUALITAT IVE DISCLOSURES ABOUT MARKET RISK Market Risk and Credit Risk Our business is not capital-intensive and we do not invest in derivative instruments or, generally, borrow. As a result, we are not subject to significant market risk (including interest rate risk, foreign currency exchange rate risk and commodity price risk) or credit risk.
Given the geopolitical uncertainty and the ongoing economic impact, rising interest rates and heightened inflation, exchange rate fluctuations between the U.S. dollar and other currencies could unfavorably affect our consolidated financial statements. 39
Given the geopolitical uncertainty and the ongoing economic impact, elevated interest rates and heightened inflation, exchange rate fluctuations between the U.S. dollar and other currencies could unfavorably affect our consolidated financial statements. 41
Risks Related to Cash, Cash Equivalents and Investments Our cash and cash equivalents include short-term highly liquid investments that are readily convertible to known amounts of cash and have original maturities of three months or less from the date of purchase. Cash and cash equivalents are primarily held at four major financial institutions.
Risks Related to Cash, Cash Equivalents and Investments Our cash and cash equivalents include short-term highly liquid investments that are readily convertible to known amounts of cash and have original maturities of three months or less from the date of purchase. Cash and cash equivalents are maintained in U.S. and non-U.S. bank accounts and are held at six financial institutions.
As of December 31, 2022 and 2021, the allowance for credit losses was $1.9 million. 38 Exchange Rate Risk We are exposed to the risk that the exchange rate of the U.S. dollar relative to other currencies may have an adverse effect on the reported value of our non-U.S. dollar denominated or based assets and liabilities.
Exchange Rate Risk We are exposed to the risk that the exchange rate of the U.S. dollar relative to other currencies may have an adverse effect on the reported value of our non-U.S. dollar denominated or based assets and liabilities.
Removed
Credit Risk We estimate our allowance for credit losses using relevant available information from internal and external sources relating to past events, current conditions and reasonable and supportable forecasts. We maintain an allowance for credit losses that, in our opinion, reflects current expected credit losses.
Added
We maintain an allowance for credit losses that, in our opinion, reflects current expected credit losses. As of December 31, 2023 and 2022, the allowance for credit losses was $2.4 million and $1.9 million, respectively.

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