Perella Weinberg Partners

Previous wording

We are a leading global independent advisory firm that provides strategic and financial advice to clients across the most active industry sectors and international markets. Our wide range of global clients include large public multinational corporations, mid-sized public and private companies, individual entrepreneurs, private and institutional investors, creditor committees and government institutions.

Current wording

We are a leading global independent advisory firm that provides strategic and financial advice to clients across some of the most active industry sectors and international markets. Our wide range of global clients include large public multinational corporations, mid-sized public and private companies, individual entrepreneurs, private and institutional investors, creditor committees and government institutions.

Previous wording

Our core advisory services benefit from macroeconomic changes that impact our client base and lead them to consider business combinations, acquisitions and divestitures, capital raises and restructurings. We continue to invest in our platform to achieve scale, accelerate growth, and deliver value in anticipation of a rebound in activity levels.

Current wording

Our core advisory services benefit from macroeconomic changes that impact our client base and lead them to consider business combinations, acquisitions and divestitures, capital raises and restructurings. We continue to invest in our platform to achieve scale, accelerate growth, and deliver value.

Previous wording

Our compensation and benefits expenses consist of salaries, bonuses (discretionary awards and guaranteed amounts), severance, payroll and related taxes, benefits, and the amortization of equity-based compensation awards that are subject to a service vesting condition, and in some cases, a market-based performance vesting condition. These expenses also include signing bonuses and compensation paid pursuant to guarantees for new hires.

Current wording

Our compensation and benefits expenses consist of salaries, bonuses (discretionary awards and guaranteed amounts), severance, payroll and related taxes, benefits, and the amortization of equity-based compensation awards that are subject to a service-based vesting condition, and in some cases, a market-based performance vesting condition. These expenses also include signing bonuses and compensation paid pursuant to guarantees for new hires.

Previous wording

The amortization expense for certain equity-based awards granted by Professional Partners is allocated fully to non-controlling interests as these awards have no economic impact on, and do not dilute, PWP shareholders relative to Professional Partners.

Current wording

Prior to the Merger, the amortization expense for certain equity-based awards granted by Professional Partners was allocated fully to non-controlling interests. As a result of the Merger, these awards are considered granted by PWP OpCo and PWP OpCo as a whole bears the cost of the cash settlement feature of the awards, which was added in conjunction with the Merger. As a result, subsequent to the Merger, the Company allocates the costs associated with these awards between Perella Weinberg Partners and non-controlling interests in proportion to their ownership interests, which is consistent with the allocation of the other profit and loss activity of PWP OpCo.

Previous wording

Non-controlling interests represent the ownership interests in PWP OpCo held by holders other than Perella Weinberg Partners, which are Professional Partners and the ILP. In the notes to the condensed consolidated financial statements, refer to Note 9—Stockholders’ Equity, Note 11—Equity-Based Compensation, and Note 18—Subsequent Events for further information regarding the current and prospective accounting for non-controlling interests.

Current wording

Non-controlling interests represent the ownership interests in PWP OpCo held by holders other than Perella Weinberg Partners, which are current and former working partners and the ILP. Profits and losses of PWP OpCo are allocated to the non-controlling interests in proportion to their ownership interest regardless of their basis, with an exception for certain equity-based compensation expense which was fully attributed to non-controlling interests prior to the Merger.

Previous wording

The following table provides revenue statistics for the three months ended March 31, 2024 and 2023:

Current wording

The following table provides revenue statistics for the three and six months ended June 30, 2024 and 2023:

Previous wording

For the three months ended March 31, 2024, total non-compensation expenses were $40.3 million, an increase of 10% compared with $36.5 million for the three months ended March 31, 2023. The increase in non-compensation expenses was primarily the result of increased legal spend as well as higher depreciation expense due to new assets being placed in service subsequent to the first quarter of 2023 related to the renovation of the New York office space. These increases were partially offset by lower rent costs and reduced D&O insurance costs.

Current wording

For the three months ended June 30, 2024, total non-compensation expenses were $43.8 million, an increase of 13% compared with $38.9 million for the three months ended June 30, 2023. The increase in non-compensation expenses was primarily the result of increased legal and consulting spend, bad debt expense, and higher depreciation expense due to new assets being placed in service subsequent to the second quarter of 2023 related to the renovation of the New York office space. These increases were partially offset by lower rent costs and reduced VAT expense.

Previous wording

For the three months ended March 31, 2024, non-operating income was $2.7 million compared with non-operating income of $0.6 million for the three months ended March 31, 2023. In the current period, non-operating income included a net gain from foreign exchange rate fluctuations and interest income, which increased from the prior year due to higher interest rates and additional investments in U.S. Treasury securities that matured in the first quarter of 2024. In the prior year period, non-operating income included lower interest income, which was also offset by a net loss from foreign exchange rate fluctuations. For both periods, the impact of foreign exchange rate fluctuations was largely related to U.S. dollar-denominated cash and intercompany receivables held by our foreign subsidiaries.

Current wording

For the six months ended June 30, 2024, non-operating income was $3.4 million compared with non-operating expenses of $(0.5) million for the six months ended June 30, 2023. In the current period, non-operating income included interest income, which increased from the prior year due to higher interest rates and larger interest-bearing cash balances. Non-operating expenses in the prior year period primarily included interest income offset by a non-operating loss on investment as well as a net loss from foreign exchange rate fluctuations as compared to a nominal net gain during the six months ended June 30, 2024. For both periods, the impact of foreign exchange rate fluctuations was largely related to U.S. dollar-denominated cash and intercompany receivables held by our foreign subsidiaries.

Previous wording

The Company’s income tax expense and effective tax rate were $19.1 million and (37.5)%, respectively, for the three months ended March 31, 2024 compared to income tax expense and an effective tax rate of $5.3 million and (23.9)%, respectively, for the three months ended March 31, 2023. The change in the effective tax rate was primarily due to the relative size of our permanent differences in relation to the pre-tax loss in the respective periods, which was partially offset by the recognition of tax benefits associated with the appreciation in our share price upon vesting of RSUs above the original grant price during the three months ended March 31, 2024.

Current wording

The Company’s income tax expense and effective tax rate were $18.5 million and (13.9)%, respectively, for the six months ended June 30, 2024 compared to an income tax expense and effective tax rate of $0.7 million and (1.7)%, respectively, for the six months ended June 30, 2023. The change in the effective tax rate was primarily due to the relative size of our permanent differences in relation to the pre-tax loss in the respective periods, which was partially offset by the recognition of tax benefits associated with the appreciation in our share price upon vesting of RSUs above the original grant price during the six months ended June 30, 2024.

Previous wording

We regularly monitor our liquidity position, including cash and cash equivalents, working capital assets and liabilities, commitments and other liquidity requirements. Our primary sources of liquidity are generally our cash balances, investments in short-term marketable debt securities, the net cash generated from operations, and the available borrowing capacity under our Revolving Credit Facility. Our primary cash needs are for working capital, operating expenses (including cash compensation for our employees), repurchasing shares of the Company’s Class A common stock, withholding tax payments for vested PWP Incentive Plan Awards, income taxes, dividends and distributions, capital expenditures, making payments pursuant to the tax receivable agreement, commitments, and strategic investments. We generally pay a significant portion of our annual cash incentive compensation during the first quarter of each calendar year with respect to the prior year’s results. Therefore, levels of cash and/or investments in short-term marketable debt securities generally decline during the first quarter and build over the remainder of the year.

Current wording

We regularly monitor our liquidity position, including cash and cash equivalents, working capital assets and liabilities, commitments and other liquidity requirements. Our primary sources of liquidity are generally our cash balances, investments in short-term marketable debt securities, the net cash generated from operations, and the available borrowing capacity under our Revolving Credit Facility. Our primary cash needs are for working capital, operating expenses (including cash compensation for our employees), repurchasing shares of the Company’s Class A common stock, withholding tax payments for vested PWP Incentive Plan Awards, cash-settled exchanges of PWP OpCo Units, income taxes, dividends and distributions, capital expenditures, making payments pursuant to the tax receivable agreement, commitments, and strategic investments. We generally pay a significant portion of our annual cash incentive compensation during the first quarter of each calendar year with respect to the prior year’s results. Therefore, levels of cash and/or investments in short-term marketable debt securities generally decline during the first quarter and build over the remainder of the year.

Previous wording

Our current assets are primarily composed of cash, receivables related to fees earned from providing advisory services, certain prepaid expenses and certain amounts due from related parties. Our current liabilities are primarily composed of accrued employee compensation, accounts payable and other accrued expenses. Cash includes cash held at banks, including interest-bearing money market accounts. As of March 31, 2024 and December 31, 2023, the Company had cash balances of $156.7 million and $247.2 million, respectively, and as of December 31, 2023, investments in short-term marketable debt securities, consisting entirely of U.S. Treasury securities, of $91.2 million.

Current wording

Our current assets are primarily composed of cash, receivables related to fees earned from providing advisory services, certain prepaid expenses and certain amounts due from related parties. Our current liabilities are primarily composed of accrued employee compensation, accounts payable and other accrued expenses. Cash includes cash held at banks, including interest-bearing money market accounts. As of June 30, 2024 and December 31, 2023, we had cash balances of $185.3 million and $247.2 million, respectively, and as of December 31, 2023, investments in short-term marketable debt securities, consisting entirely of U.S. Treasury securities, of $91.2 million.

Previous wording

Our liquidity is highly dependent upon cash receipts from clients, which generally require the successful completion of transactions. Accounts receivable typically have net terms of 30 days. Accounts receivable were $57.9 million, net of a $2.7 million allowance for credit losses balance as of March 31, 2024. Accounts receivable were $47.8 million, net of a $2.2 million allowance for credit losses balance as of December 31, 2023.

Current wording

Our liquidity is highly dependent upon cash receipts from clients, which generally require the successful completion of transactions. Accounts receivable typically have net terms of 30 days. Accounts receivable were $90.5 million, net of a $1.2 million allowance for credit losses balance as of June 30, 2024. Accounts receivable were $47.8 million, net of a $2.2 million allowance for credit losses balance as of December 31, 2023.

Previous wording

The Company has a Revolving Credit Facility with Cadence Bank with an available line of credit of $50.0 million. Additionally, up to $20.0 million of incremental revolving commitments above the $50.0 million commitment amount may be incurred under the Credit Agreement. As of March 31, 2024, the Company had no outstanding balance related to the Revolving Credit Facility and no incremental revolving commitments were incurred. For further information on the Revolving Credit Facility, refer to Note 10—Debt in the notes to condensed consolidated financial statements included elsewhere in this Form 10-Q.

Current wording

We have a Revolving Credit Facility with Cadence Bank with an available line of credit of $50.0 million. Additionally, up to $20.0 million of incremental revolving commitments above the $50.0 million commitment amount may be incurred under the Credit Agreement. As of June 30, 2024, we had no outstanding balance related to the Revolving Credit Facility and no incremental revolving commitments were incurred. For further information on the Revolving Credit Facility, refer to Note 10—Debt in the notes to condensed consolidated financial statements included elsewhere in this Form 10-Q.

Previous wording

On March 1, 2024, the Company issued and sold 5,750,000 shares of Class A common stock at a price of $12.00 per share for net proceeds of $66.0 million after deducting underwriting discounts and offering costs. In connection with the Vesting Acceleration, we expect to use some or all of such proceeds to settle the conversion of certain ACUs of PWP OpCo into cash in an aggregate amount up to the converting unitholders’ estimated tax liability. Refer to Note 18—Subsequent Events in the notes to the condensed consolidated financial statements for further information regarding the Vesting Acceleration.

Current wording

On March 1, 2024, we issued and sold 5,750,000 shares of Class A common stock at a price of $12.00 per share for net proceeds of $66.0 million after deducting underwriting discounts and offering costs.

Previous wording

Operating activities resulted in a net cash outflow of $206.3 million primarily attributable to an increase in client receivables and cash operating expense outflows, including discretionary bonuses paid during the first quarter of 2024 with respect to prior year compensation expense.

Current wording

Operating activities resulted in a net cash outflow of $116.3 million primarily attributable to an increase in client receivables and cash operating expense outflows, including the settlement of liability-classified ACUs during the second quarter and discretionary bonuses paid during the first quarter of 2024 with respect to prior year compensation expense.

Previous wording

Investing activities resulted in a net cash inflow of $82.7 million attributable to the maturation of investments in U.S. Treasury securities partially offset by capital expenditures related to our office space renovations.

Current wording

Investing activities resulted in a net cash inflow of $76.5 million attributable to the maturation of investments in U.S. Treasury securities partially offset by capital expenditures related to office space renovations.

Previous wording

Financing activities resulted in a net cash inflow of $33.8 million primarily due to the issuance of 5,750,000 shares of Class A common stock for net proceeds of $66.0 million, partially offset by distributions to partners, withholding tax payments for vested PWP Incentive Plan Awards, and dividend payments.

Current wording

Financing activities resulted in a net cash outflow of $23.0 million primarily due to withholding tax payments for vested PWP Incentive Plan Awards and equity-classified ACUs, the cash settlement of exchanges of PWP OpCo Units, share repurchases, dividend payments, and distributions to partners, all of which was partially offset by the issuance of 5,750,000 shares of Class A common stock for net proceeds of $66.0 million.

Previous wording

Operating activities resulted in a net cash outflow of $131.9 million primarily attributable to cash operating expense outflows, including discretionary bonuses paid during the first quarter of 2023 with respect to prior year compensation expense, partially offset by cash collections from clients.

Current wording

Operating activities resulted in a net cash outflow of $50.4 million primarily attributable to cash operating expense outflows, including discretionary bonuses paid during the first quarter of 2023 with respect to prior year compensation expense, partially offset by cash collections from clients.

Previous wording

Investing activities resulted in a net cash inflow of $97.7 million largely attributable to the maturation of investments in U.S. Treasury securities, net of additional investments in U.S. Treasury securities as well as capital expenditures associated with the renovation of the New York office space and relocation of the London office space.

Current wording

Investing activities resulted in a net cash inflow of $56.5 million largely attributable to the maturation of investments in U.S. Treasury securities, net of additional investments in U.S. Treasury securities as well as capital expenditures related to office space renovations.

Previous wording

Financing activities resulted in a net cash outflow of $33.2 million primarily related to the repurchase of shares pursuant to the stock repurchase program, withholding tax payments for vested PWP Incentive Plan Awards, distributions to partners, and dividend payments.

Current wording

Financing activities resulted in a net cash outflow of $50.1 million primarily related to the repurchase of shares pursuant to the stock repurchase program, withholding tax payments for vested PWP Incentive Plan Awards, distributions to partners, and dividend payments.

Previous wording

The Company’s board of directors approved a stock repurchase program under which the Company is authorized to repurchase up to $200.0 million of the Company’s Class A common stock with no requirement to purchase any minimum number of shares. No shares were repurchased during the three months ended March 31, 2024. As of March 31, 2024, $108.8 million remains of the combined $200.0 million share repurchase authorization.

Current wording

Our board of directors approved a stock repurchase program under which we are authorized to repurchase up to $200.0 million of our Class A common stock with no requirement to purchase any minimum number of shares. During the six months ended June 30, 2024, we repurchased 1,000,000 founder shares at a purchase price of $15.00 per share. As of June 30, 2024, $93.8 million remains of the $200.0 million authorized for share repurchases.

Previous wording

In accordance with the limited partnership agreement of PWP OpCo, holders of PWP OpCo Units (other than the Company) may exchange these units for (i) shares of Class A common stock on a one-for-one basis or (ii) cash from an offering of shares of Class A common stock with the form of consideration determined by the Company. See Note 9—Stockholders’ Equity in the notes to the condensed consolidated financial statements included elsewhere in the Form 10-Q for further information.

Current wording

In accordance with the limited partnership agreement of PWP OpCo, holders of PWP OpCo Units (other than the Company) may exchange these units for (i) shares of Class A common stock on a one-for-one basis or (ii) cash from an offering of shares of Class A common stock and (iii) subsequent to the Merger, cash from any other source. Whether future exchanges are settled in cash or shares of Class A common stock is at our option and will depend on our liquidity and capital resources, market conditions, the timing and concentration of exchange elections and other factors. See Note 9—Stockholders’ Equity and Redeemable Non-Controlling Interests in the notes to the condensed consolidated financial statements included elsewhere in the Form 10-Q for further information.

Previous wording

As of March 31, 2024, we had an amount due of $34.2 million pursuant to the tax receivable agreement, which represents management’s best estimate of the amounts currently expected to be owed in connection with the tax receivable agreement for the Business Combination and subsequent exchanges made to date. See Note 15—Related Party Transactions in the notes to the condensed consolidated financial statements included elsewhere in the Form 10-Q for further information as well as the expected timing of payments.

Current wording

As of June 30, 2024, we had an amount due of $33.8 million pursuant to the tax receivable agreement, which represents management’s best estimate of the amounts currently expected to be owed in connection with the tax receivable agreement for the Business Combination and subsequent exchanges made to date. See Note 15—Related Party Transactions in the notes to the condensed consolidated financial statements included elsewhere in the Form 10-Q for further information as well as the expected timing of payments.

Previous wording

We have various non-cancelable operating leases in connection with the leases of our office spaces and equipment. As of March 31, 2024, we had $176.3 million of operating lease liabilities. See Note 4—Leases in the notes to condensed consolidated financial statements included elsewhere in this Form 10-Q for further information as well as the expected timing of payments.

Current wording

We have various non-cancelable operating leases for our office space and certain equipment. As of June 30, 2024, we had $181.5 million of operating lease liabilities. See Note 4—Leases in the notes to condensed consolidated financial statements included elsewhere in this Form 10-Q for further information as well as the expected timing of payments.

Previous wording

We regularly review our accounts receivable and allowance for credit losses by considering factors such as historical experience, credit quality, age of the accounts receivable, and the current economic conditions that may affect a client’s ability to pay such amounts owed to the Company. We maintain an allowance for credit losses that, in our opinion, provides for an adequate reserve to cover current expected credit losses. Refer to Note 2—Summary of Significant Accounting Policies in the notes to condensed consolidated financial statements included elsewhere in this Form 10-Q for further information.

Current wording

We regularly review our accounts receivable and allowance for credit losses by considering factors such as historical experience, credit quality, age of the accounts receivable, and the current economic conditions that may affect a client’s ability to pay such amounts owed to us. We maintain an allowance for credit losses that, in our opinion, provides for an adequate reserve to cover current expected credit losses. Refer to Note 2—Summary of Significant Accounting Policies in the notes to condensed consolidated financial statements included elsewhere in this Form 10-Q for further information.

Previous wording

The Company is exposed to exchange rate risk as a result of having foreign subsidiaries with non-U.S. dollar functional currencies as well as from entering into transactions and holding monetary assets and liabilities that are not denominated in the functional currency of its operating subsidiaries. Specifically, the reported amounts in our consolidated financial statements may be affected by movements in the rate of exchange between the pound sterling, euro, and Canadian dollar and our reporting currency, the U.S. dollar. For the three months ended March 31, 2024 and 2023, the net impact of non-functional currency related transaction gains (losses) recorded in Other income (expense) on our Condensed Consolidated Statements of Operations was $0.5 million and $(1.1) million, respectively, primarily related to U.S. dollar-denominated cash and intercompany receivables held by our foreign subsidiaries as the strength of the U.S. dollar fluctuated. For the three months ended March 31, 2024 and 2023, the net impact of the fluctuation of foreign currencies recorded in Foreign currency translation gain (loss) within our Condensed Consolidated Statements of Comprehensive Income (Loss) was $(1.2) million and $1.6 million, respectively. We have not entered into any transactions to hedge our exposure to these foreign currency fluctuations using derivative instruments or other methods but may do so if we deem appropriate in the future. As of March 31, 2024, we held cash balances of $22.0 million in non-U.S. dollar currencies, composed of pound sterling, euros, and Canadian dollars.

Current wording

We are exposed to exchange rate risk as a result of having foreign subsidiaries with non-U.S. dollar functional currencies as well as from entering into transactions and holding monetary assets and liabilities that are not denominated in the functional currency of its operating subsidiaries. Specifically, the reported amounts in our consolidated financial statements may be affected by movements in the rate of exchange between the pound sterling, euro, and Canadian dollar and our reporting currency, the U.S. dollar. For the six months ended June 30, 2024 and 2023, the net impact of non-functional currency related transaction gains (losses) recorded in Other income (expense) on our Condensed Consolidated Statements of Operations was $0.3 million and $(2.2) million, respectively, primarily related to U.S. dollar-denominated cash and intercompany receivables held by our foreign subsidiaries as the strength of the U.S. dollar fluctuated. For the six months ended June 30, 2024 and 2023, the net impact from the fluctuation of foreign currencies recorded in Foreign currency translation gain (loss) within our Condensed Consolidated Statements of Comprehensive Income (Loss) was $(1.2) million and $3.5 million, respectively. We have not entered into any transactions to hedge our exposure to these foreign currency fluctuations using derivative instruments or other methods but may do so if we deem appropriate in the future. As of June 30, 2024, we held cash balances of $27.4 million in non-U.S. dollar currencies, composed of pound sterling, euros, and Canadian dollars.