Q2 2022 PJT Partners Inc Earnings Call
Yeah.
Good day and elections the P. J T Partners' second quarter 2022 earnings call. Today's conference is being recorded at this time I would like to turn the conference over to Sharon Pearson head of the relationship.
Head of Investor Relations. Please go ahead ma'am.
Thank you very much and good morning, and welcome to the P. J T partners second quarter 2022 earnings conference call.
I'm, Sharon Pearson head of Investor Relations at P. J T partners.
Joining me today is Paul Taubman, our chairman and Chief Executive Officer, and tell them makes our chief financial Officer.
Before I turn the call over to Paul I want to point out that during the course of this conference call. We may make a number of forward looking statements.
These forward looking statements are subject to various risks and uncertainties and there are important factors that could cause actual outcomes to.
They're really from those indicated in these statements.
We believe that these factors are described in the risk factors section contained in P. J T partners 2021 and Form 10-K, which is available on our web site at P. J T partners don't come.
I want to remind you that the company assumes no duty to update any forward looking statements and the presentation, we make today.
non-GAAP financial measures, which we believe are meaningful in evaluating the company's performance.
The detailed disclosures on these non-GAAP metrics and the GAAP reconciliations.
Should refer to the financial data contained within the press release, we issued this morning also available on our website and with that I'll turn the call over to Paul.
Thank you Sharon and thank all of you for joining us this morning.
Before we turn to our results I wanted to provide some context on the broader operating environment.
As the year has progressed.
The macro environment has grown more challenging.
Steady stream of negative news flow and building recessionary fears.
Continued to weigh on market sentiment.
This uncertainty has pressured debt equity and M&A markets across the board.
While we always expect that M&A markets to cool in 2022.
This slowdown in activity is greater than we previously forecasted.
As M&A activity pools restructuring activity.
Okay.
In market environments, such as these our firm has set out.
Our unique combination of businesses combined with the ongoing strategic advisory build out.
Insulate us from market dislocations.
This resiliency is challenged in challenging markets as reflected in our record six months revenues.
We have often said that a slower M&A environment benefits us from a recruiting perspective.
Particularly at the senior level, where bankers have more bandwidth to engage and switching costs are lower.
In this environment the pace of our senior hiring has picked up.
And while our overall near term growth and head count is likely to moderate we expect this pace of senior hiring to continue.
Helen will now review our financial results.
Thank you Paul good morning, beginning with revenues.
Total revenues for the second quarter with $233 million.
Revenues in all three businesses were essentially unchanged from a year ago.
With slight increases in restructuring and park Hill, and a slight decline in strategic advisory revenues.
Interest income and other revenue decreased $6 million in the second quarter, resulting in total revenue was down 3% year over year.
For the six months ended June <unk> total revenues were $479 million, a record level and up 7% year over year.
Increases in restructuring and park hill more than offset the slight decline in strategic advisory revenues.
The decrease in interest income analysis of the quarter and six months periods was driven by a reduction in value of equity Securities. We received as part of transaction compensation.
Turning to expenses consistent with prior quarters, we presented the expenses with certain non-GAAP adjustments. These adjustments are more fully described in our 8-K first adjusted compensation expense.
Adjusted compensation expense continues to be accrued at 63%. This ratio represents our current best estimate for the full year 2022.
Total adjusted non compensation expense was 37 million for the second quarter up $5 million year over year, and 72 million for the first half up 12 million year over year as a percentage of revenue 15, 9% in the second quarter and 50% in the first half.
Of the $12 million year over year increase in non comp expense for the first half of the year approximately $9 million was due to increased travel and related expense.
Excluding traveling related and non comp expense was down 1% in the second quarter and up 5% for the first half compared to a year ago.
Given the timing of certain expenses, we expect growth in these non comp expenses will be higher in the second half of the year compared to the first half therefore for the full year, we expect our non comp expense, excluding traveling related to grow in the high single digit percentage.
This is less than we had initially forecast as we've remained disciplined in our expense management.
Turning to travel and related activity continues to normalize more quickly than we initially expected and this expense will continue to be the principal driver of year over year growth in our total non comp expense for the year.
Turning to adjusted pretax income.
We reported adjusted pre tax income of 49 million for the second quarter and $105 million for the first six months.
Our adjusted pretax margin of 21, 1% for the second quarter compared with 24, 1% for the same period last year and 22% for the first six months compared with 24% for the same period last year.
The provision for taxes as with prior quarters, we presented our results as if all partnership units had been converted to shares and that all of our income was taxed at a corporate tax rate.
We also take a full year view of the tax benefit relating to the delivery of vested shares during the first quarter.
Our effective tax rate for the first half of 2022 with 25, 8% and we expect this to be the effective tax rate for the full year.
Our adjusted if converted earnings per.
For sure for the second quarter and $1 88 per share for the first six months.
And the share count for the quarter, our weighted average share count was 41 6 million shares during the second quarter, we repurchased the equivalent of approximately 469000 shares primarily through open market repurchases.
Just as in the first six months totaled approximately one 7 million shares, including the exchange of partnership units for cash.
On the balance sheet, we ended the quarter with $181 million in cash cash equivalents and short term investments.
273 million in net working capital and we have no funded debt outstanding.
Finally, the board has approved a dividend of <unk> 25 per share the dividend will be paid on September 21, 2022 to class a common shareholders of record as of September 7th and with that I'll turn it back to Paul.
Thank you Helen and I will now review our businesses in greater detail.
Beginning with strategic advisory.
So M&A announcements have recently slowed and announced deals are currently taking longer to complete.
The level of strategic engagement across the board continues to be high.
In a world that is speeding up companies will need to respond more quickly to changes in their operating and competitive environment.
And that in turn will require companies to be more active strategically.
While M&A activity, often ebbs and flows in the short term.
M&A remains a secular growth business over the longer term.
Our strategic advisory build out remains central to our firm's long term growth.
To that end, we continue to invest in our strategic advisory franchise.
And we are beginning to see meaningful benefits from investments previously made.
As a case in point P. J P can review strategic shareholder advisory capabilities.
Have increasingly become a differentiating element of.
Our strategic advisory franchise.
The significant gains we have made across activism defense.
Strategic IR and.
And ESG advisory reflect our unique ability to knit together boardroom and investor perspective to deliver differentiated advice.
Our integrated approach is resonating with clients through enhanced win rates and deepened relationships.
Even with a challenging backdrop, our mandate count is up year over year and currently stands near record levels.
Turning to <unk> Park Hill.
The fund raising environment for alternative investments has also become more challenging.
With the fundraising market more crowded than ever before.
Alternatives outperformance relative to public market indices.
Has created a numerator and denominator effect.
And many investors have limited capital available for new commitments.
In this environment <unk> Park Hill delivered record six months results.
And remains on track to deliver record results for all of 2022.
While not immune to industry wide challenges, we are well positioned given <unk> Park Hill's leading franchise our.
Our castle careful selection of best in class managers and.
And differentiated relationships with capital allocators around the globe.
Turning to restructuring.
As the year has progressed stress is clearly building and the credit markets.
Companies are facing a combination of rising interest rates inflationary.
Inflationary pressures and supply chain disruptions.
Many are finding their degrees of freedom significantly reduced.
And there is broad based concern as to whether these companies will continue to have sufficient access to capital.
To deal with all the shocks that may come their way.
As a result clients are increasingly receptive to engaging on these topics earlier than ever before.
We have seen an uptick in liability management discussions.
Our mandate count is up meaningfully relative to a year ago.
While our 2022 restructuring revenues will be up relative to 2021 levels.
Most of our recent increase in activity won't be reflected in our restructuring results.
Until 2023 and beyond.
Looking ahead, we feel really good about our people our mix of businesses and our competitive positioning.
While this is a difficult market is fundamentally plays to our strengths.
Highlights the resilience of what we have built.
And makes it easier for us to continue the build out.
We continue to be optimistic about our near intermediate and long term prospects.
And with that we will take your questions.
So you'd like to ask a question at this time, please signal by pressing star one on your telephone keypad. Please ensure the mute function on your telephone is switched off to allow your signal to reach our equipment again. Please press star one to ask a question.
We'll take our first question now from Devin Ryan of JMP Securities. Please go ahead.
Hey, good morning team.
How are you.
Well good morning Devin.
I guess I'll start maybe with a two parter here on just the M&A advisory.
Outlook.
Appreciate you maybe the prior outlook you had given was maybe even a little more subdued than some of your peers, but.
Can you maybe just help us with.
Qualification or quantification of the degree of how much more challenging than previously forecast the M&A market as we call them and I think.
Tied into that the theme that we're hearing a lot is just kind of elongated.
Your processes and deal closings and so yeah, just how that kind of has evolved and maybe.
Where we are if you can quantify kind of how long deals are taking today versus maybe a year ago.
Sure.
Well look we came into the year with a more.
Cautious and I would suggest a more realistic sense of the M&A conditions around us and therefore, we believe that from a macro perspective, there was going to be a step down in activity for a variety of reasons and all of that remains true.
Fact is though that a lot of shocks to the system have caused it to become more difficult to get deals to an announcement phase and deals that have been announced.
Are taking longer to close so youre seeing a back up across the board and that's why we tend to focus principally mandates because mandates are really the single best indicator of company's willingness and desire to engage and to pursue strategic.
Transactions and even if it becomes more challenging for for deals to be agreed or if agreed deals take longer to close.
You need to start somewhere and what we've found is even through all of this volatility more challenging markets.
Volatile moves in prices and the like companies have strategic needs.
And they are willing to go forward to investigate those but if you step back and ask well why aren't transactions happening at the same pace.
I think it is.
Multifaceted explanation.
First and foremost when you have volatility.
And value.
It becomes just more difficult to agree between buyer and seller. So as as there is movements in most of the recent movements have been to the downside.
That just makes it harder for sellers to agreed to a price.
They may have started a price with one expectation is in the midst realized that that will no longer be obtainable.
Then choose to withdraw that asset from the marketplace, but it's inevitable or not inevitable, but nearly inevitable.
Asset will return to the market in the not too distant future. So that's one.
Element that you have here is just trying to find.
An equilibrium.
Second is the financing markets become more difficult and as a result, some of the buyers have had difficulty securing financing or some other capital sources are less willing to be aggressive in providing committed financing.
Simply the cost of the financing.
Has risen and its impact on valuations have been caused.
Buyers and sellers to be unable to agree.
I think there is a bit of exhaustion on the part of private equity community they've put out an extraordinary amount of capital.
Markets are uncertain and I think there's just a broader pause that we're seeing in the marketplace and then when you add on top of that in certain industries lots of shocks to the system.
That are driven by the war Ukraine.
Inflationary pressures supply chain disruptions, it's just harder to get to get companies together and then finally, when you think about out of the box transformative ideas.
The notion of bringing those to market and trying to tell that story.
A bearish market.
Is not something that we're seeing a lot of all of those reasons. There has been a meaningful reduction in activity.
But there has not been a meaningful reduction in engagement and hopefully devin that.
That helps get at your question.
Yeah, that's perfect, Paul and I guess kind of.
<unk> into my follow up here I mean appreciate the next couple of quarters or.
Yeah, a little bit uncertain, just with with all what you just said but.
If we were to kind of fast forward to 2023.
<unk>.
Just based on the way your business model works.
The balanced with restructuring as well.
Contributor.
Can you just talk little bit about like the maybe the more intermediate term outlook is it feels like.
2023 could actually.
<unk> be a better year than maybe you would've thought heading into 2022, just given that restructuring feels like it's accelerating in a much more meaningful pace youre, just not going to see it.
Over the next couple of quarters, just based on the way those revenues are recognized so can you maybe just kind of tailoring the restructuring piece and kind of the magnitude of acceleration and then how that plays in for maybe the more intermediate term outlook.
Well I certainly don't want to pass that gave us to 2023 until we actually get through 2022. So I think if you'll give me another six months I'd be more than happy to give you a a clearer sense of 2023, because a lot of that will reflect.
Missions that will exist that will operate in over the balance of the year, what I would say is.
Relative to where we started the year.
We are seeing increased pressures on strategic activity.
And that is a headwind, but we are seeing.
No clear stress in the system and our restructuring business heating up.
And I don't think that our overall perspective on the year has changed very much but clearly the composition of that has shifted and that is one of the benefits in having a broad based and balanced business and a lot of our strategic advisory work.
<unk> continues to be focused on securing mandates.
Introducing new clients to the firm.
Building out our capabilities.
And really using our or other tools to support clients, whether it's an activist defense.
Whether it's an investor outreach and positioning companies at all of those are our wonderful hooks and creating new clients. So so as we continue to do that good things are going to happen, but when and how it actually hits the <unk>.
P&L I think we will need to.
To play it out a little bit, but I would say that our our views on the year have not changed very much there's been shifting as to where the drivers will be this year.
Got it okay.
Thanks, So much Paul I will leave it there and let someone else in.
Okay. Thanks, Kevin.
We can now take our next question from Richard Johnson with Goldman Sachs. Please go ahead.
Good morning, guys. So Paul I was hoping you could talk about the engagement from financial sponsors and how that's evolved over the last few months just given the significant dislocations that we've seen in markets and I guess within that can you talk a little bit about financing conditions, both with strategics, let's proceed.
Eric transactions as well as for financial sponsors and how much of a headwind that has become in the last month or so thanks.
Sure.
So with respect to financial sponsors.
As I, just said a moment ago I wouldn't say that that the summer is being taken off but there's clearly been a pause.
Which is reflective of.
Two fundamental conditions.
One is the extraordinary.
Pacer, which capital was deployed over the past year or two.
And that has sort of.
Naturally pause the second is just given the uncertain environment.
I think sponsors are looking.
Carefully.
So where those.
We are headed there.
We're looking at businesses, who are all being buffeted by different challenges whether its supply chain.
As inflation ability to pass.
Higher costs on to consumers technological innovation competitive threats regulatory overlay, we're just dealing with an uncertain market and I do think that there is a general sense.
To sort of let things hit a new equilibrium before you start to see.
<unk>.
Very significant capital being deployed now again.
That's a macro theme that doesn't mean that capital isn't being put out that deals are getting done that sponsors arent willing to engage and I do think that from their own portfolio perspective. This is probably not viewed as the optimum time to monetize some of their own assets and one of the benefits of <unk>.
But equity is.
They are incredibly good.
The cadence and timing of their asset monetization. So I suspect you'll also see a little bit less supply there. So for all of those reasons. There has been a meaningful falloff in sponsor activity, but it's been relatively recent.
And I don't think it's at all permanent but it's it's going to it's going to weigh on activity levels.
The period of time.
And as I said I think financing is still available.
And financing is available incise financing has become meaningfully more costly.
And when you already have any difficulty sort of matching buyers and sellers I think that thats.
That's an issue and I would say that there are a number of banks that are still struggling with some capital commitments that they've made and probably are going to be less aggressive in new commitments.
Until it sort of works its way through the system. So this is a market where I don't think you can you can identify a single factor that is weighing on activity we're dealing with.
A lot of factors and almost all of them are surveying.
As the precedence to activity in the sponsor community I'd also say that sponsors are being very proactive in looking at their portfolio companies that are highly leveraged.
And seeing how the debt is trading in their own liquidity and being extraordinarily proactive.
And creating additional runway for their portfolio companies and also trying to capitalize on some.
Credit opportunities and the bonds of these companies, so it's creating a different sort of activity.
On the other side.
Okay. Thanks, a lot that's very helpful.
Thank you Richard.
We can now take our next question from Stephen Ju of Wolfe Research. Please go ahead.
Hey, good morning, Paul.
So you had spoke about slower deal activity more subdued sponsor deployment the elongation of deals.
Certainly a more tepid outlook as you noted then where things were at the start of the year unsurprising, given the higher recession probabilities and I was hoping you could just speak to our or at least provide some perspective on how activity compares with pre pandemic levels I think most people recognize.
<unk> 2000, 22021, there was a bit of a frenzy of activity, but was hoping you can provide some perspective on how you see activity levels trajectory relative to 2019.
Yes.
It's clearly slower now part of it is a lot of a lot of it's a function.
Of.
Where the where the equity markets are.
For better for us M&A tends to be highly pro cyclical it's almost the higher the price the more cut.
Company's transact and what you find is when there are big big declines.
Sellers don't want to sell and <unk>.
Buyers may be a little bit cautious.
They're they're they're catching a falling knife. So as a result, you sort of need some stabilization and I think that that makes this an unfavorable comparison relative to 2019 in 2019, we werent.
So trying to climb the wall of worry about whether or not we were headed into a recession, we didn't have inter.
Interest rates that were you know moving appreciably, we didn't have a lot of the challenges that we have now so I suspect.
That.
It's fair to say that we're looking at a more subdued activity level than 19 on the other hand.
We have a.
Incredible desire.
For companies to use M&A as a tool.
Either offensive Lee or defensively.
And what has not changed is the level of engagement. So if you ask me to compare the level of a desire or engagement or willingness to set up transactions I don't think it is very different than 2019, but.
A lot less is moving from conceptual stage or exploratory conversations.
Two full throated diligence negotiation and agreement, but I suspect that when we get to.
A more stable equilibrium.
That that will return so to me what gives me. The most comfort is just the very high level of strategic.
Jake discussions and engagement and in other market environments. We've seen that shut off that is clearly not the case in this current environment.
Got it and just for my follow up on the expense side, certainly encouraging to hear.
The more favorable and non comp expense guidance ex TNA at the same time, you did talk about it from a comp perspective, the favorable recruiting environment.
Just wanted to get a sense, whether you felt that you could maintain your comp ratio targets, even in the face of what a challenging advisory backdrop, and the really attractive opportunity that presented itself in terms of recruitment.
Okay.
Look I.
The current accrual, which was for the three months and six months is our best estimate of the full year.
And that has not changed.
I've always maintained that.
That.
We have.
A set of criteria for hiring senior bankers that does not change that has not changed it is the same as what it was before.
I think the rest of the activity and the ability to.
To recruit for that talent in this environment and particularly.
Covid sequestration and Lockdowns is just greater.
And last year, we were very clear that.
That was a challenge.
All of those reasons, we have all of those challenges too.
To.
AD.
Senior talent and while we did it just harder when people are locked down and it's even harder when people are locked down.
Up to their eyeballs in deal activity to pivot and just head off the gardening leave in the midst of that this environment dramatically different and as a result, since we think we have a very compelling proposition we have seen and I expect you'll continue to see us with.
More senior.
I don't think that will change and I'm quite comfortable that that fits.
Well with our current accrual estimates.
Really helpful color. Thanks for taking my questions.
Absolutely.
We will now take our next question from Jim Mitchell of Seaport Global Securities. Please go ahead.
Hey, good morning.
Good morning, Paul just just maybe to put a finer point on some of the discussion around.
The outlook you kind of said it didn't hasnt really changed much but maybe the geography has I think when we last spoke.
On the last call you were thinking the second half would be.
In strategic advisory a little bit stronger than the first half.
That changed dramatically as it you see restructuring doing better, but still sort of the message that second half looks a little better than the first stores that given the uncertainty kind of off the table.
Yes.
Talk about geography, I think youre talking about like which Florida are building as opposed.
Okay.
A broader geography.
Yes, so what I would say is this.
Shouldn't be all that surprising that from the beginning of the year.
We are more constructive on restructuring than how we started the year.
And just even though we have near record number of mandates.
And we have a very robust backlog.
You have to.
You have to acknowledge that the strategic advisory.
Backdrop as far more challenging and therefore some of that is going to affect our business. We're not 100% insulated from from that market environment. So I think thats a little bit of the shift one business probably has.
A more constructive forecast for the year the other obviously dealing with a.
More challenging backdrop I think that's it.
It's really as simple as that and as it relates to earlier commentary about strategic advisors.
With it being back end weighted that continues to be the case.
Okay. That's helpful.
Right.
In the first half.
Yes.
And maybe specifically on secondary advisory I would think given the disruptions in the public markets are you seeing any increased activity in secondary advisory in terms of demand for or shifting portfolios and things like that.
I think there there is which is a good trend in the intermediate and long term. The only challenge is in the short term when marks have moved an awful lot or maybe the marks you know need to be reconciled with what's happened in the public markets.
You find it a little bit more difficult to transact off of.
Our net asset value.
That.
Or maybe it doesn't fully reflect or has yet to fully adjust to what the new realities are so that typically takes a couple of quarters to play out. So I think that the demand as we've talked about as you have a more challenging fund raising environment and as Lps need to create priorities there more.
Likely to want to shift and that will create more demand.
<unk> GPS are going to continue.
These tools too.
Create monetization opportunities and liquidity for their own Lp's are all in place. So what you see price volatility you tend to want to see things sort of put on pause for a quarter or two until until everything is sort of our lives.
Okay. Thanks for that Sam Thanks for taking my questions.
Sure.
Okay.
And our final question today comes from Michael Brown of Keyw's Securities. Please go ahead.
Yeah.
Great. Thank you and good morning.
Good morning, Tom.
So Paul I wanted to start with restructuring just a follow up on that.
So it does sound like activities.
More active than than what you talked about on the last earnings call, but the revenue potential as you mentioned is probably more of a 2023 and beyond then.
So I.
I know that you don't have a crystal ball, but I, but I am trying to understand what this.
Restructuring up cycle could look like relative to prior ones because you seem to be a lot of <unk>.
Different factors in play here.
Any thoughts there as you kind of compare and contrast this to.
To prior cycles and then just.
As the team really changed at all versus 2020 is it relatively the same came on on the field and.
And that's kind of the right way to think about.
The ability to absorb more capacity tied to the growth of the strategic advisory businesses, perhaps most bankers could help.
On some of the restructuring activity that could pick up.
Later this year.
Sure So I mean.
How I mean, how big this opportunity gas is really going to be a function of.
How severe this economic.
Downturn is and I don't think anyone has a crystal ball. So you can.
You can do all sorts of stress scenarios.
It could be bigger it could be a lot bigger it could be dramatically bigger than where it is today.
And clearly the one thing that is different is just the quantum of debt outstanding towards.
Any other cycle.
That's the first point so the quantum of debt just dwarfs any other cycle. So.
Pending upon what overlay you put all of that you should see.
Higher activity levels that would be the first 0.2nd point, we have been consistent on this is COVID-19 did an awful lot of damage and disrupted a lot of business models, where the damage was not fully understood because of the extraordinary stimulus that was pumped into the market both fiscal and monetary.
And that over time.
As you move from a risk onto a risk off environment.
Those companies will have to deal with some fundamental challenges so that is.
At this time.
As I'd argue a lot of companies were weakened.
Because of the change in.
In a market structure.
Consumer buying patterns and the like that resulted from Covid.
I think the third is.
As we continue to build out our strategic advisory footprint.
As we're in more industries.
As we have more relationships, we get pulled into more liability management dialogues, which is a competitive advantage. So that's more of a micro.
You know.
<unk> as to how P J T should benefit more.
More from the next cycle than the last cycle, because being free of conflicts, having a much larger far more powerful strategic advisory business plays into that.
And as it relates to the team we have an extraordinary team of practitioners and they've been working hand in glove with their strategic advisory counterparts.
Four four.
For seven plus.
Years now.
If you include.
So when we first announced this transaction and I think the cadence.
And the familiarity and the way in which we've built up on the strategic advisory side.
Capital markets business, which does work hand in glove and on the.
Management side I think there is a lot more opportunity there to work together and we've promoted a lot of very talented individuals because we have a.
Fabulous.
Bench of.
Talent.
Our restructuring franchise and we've also moved to organize it.
More global basis.
By having it be better integrated on a global basis, and just given all of our.
Geographic expansion around the globe that also help so theres a lot of there's a lot of good data but.
But I also want to be I don't want to be lethal about.
You know the opportunity because you know Doug will only happen if.
If the markets and the economic backdrop.
Meaningfully dislocated the fact is there.
That 2021 was an aberration that when you look at the damage that was done at.
And how much of that was hidden because of extraordinary fiscal and monetary stimulus that was not.
So a fair indication of sort of the stress in the broader system and I just think that as you've taken the punch Bowl away 'twenty two 'twenty three is a meaningfully higher setpoint than 'twenty one.
Cause it sort of.
Jos the challenges that many companies are facing and then if you add to that a recession or Steve.
Steep inflation or the need to really drive interest rates higher to combat inflation it could be meaningfully worse than we're a firm where we.
So we will react and advised clients based on any economic condition and some of them are more favorable for certain businesses.
There is a more favorable for other businesses, but the central tenet is to be able to follow our clients serve our clients across the board in any market bullish bearish.
And in between and I think we are.
We're very focused on.
More than sort of which which area of the firm.
<unk> gets the workload.
Great that was really helpful. Paul Thank you.
It's just got to.
Kind of modeling.
Any questions here maybe for Alan.
Was there any pull forward into the second quarter from <unk> that we should be aware of that just kind of above the normal cadence and then on the interest income and other line there was a mark there this quarter.
Tell us what that line would have been without those marks and then any additional color you could share about those those marks of the security's been exited and if not what is the plan there.
Sure. So on the pull forward there was it was $14 million Q2, this year and that compares with 21 million same period last year.
In terms of the interest income another that's averaged about $3 million a quarter. If you look over the last four quarters.
And historically the two largest.
That line a reimbursable expenses.
Interest income that we have on occasion taken investments in this investment as I mentioned as a result of a transaction that we've lepton and some of the fee. We earned we applied to making an investment.
It is a mark to market of the position.
Unrealized.
So we have not sold the position and when we look at it where it sits today its still above where it was initially Matt.
Yeah.
Okay great.
Thank you for taking my questions.
Okay. Thanks, very much. Thank you I think there are no further questions. So I appreciate as does Helen your interest in our company your questions and we look forward to speaking with you all on our next earnings call.
This concludes today's call. Thank you for your participation you may now disconnect.
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