In this Management's Discussion and Analysis of Financial Condition and Results
of Operations, "Greenhill", "we", "our", "Firm" and "us" refer to Greenhill &
Co., Inc.

This Management's Discussion and Analysis of Financial Condition and Results of
Operations should be read in conjunction with our Annual Report on Form 10-K for
the fiscal year ended December 31, 2021, the risk factors in item 1A of this
Quarterly Report on Form 10-Q and subsequent Current Reports on Form 8-K.

Cautionary Statement Concerning Forward-Looking Statements



The following discussion should be read in conjunction with our condensed
consolidated financial statements and the related notes that appear elsewhere in
this report. We have made statements in this discussion that are forward-looking
statements. In some cases, you can identify these statements by forward-looking
words such as "may", "might", "will", "should", "could", "expect", "plan",
"outlook", "anticipate", "believe", "estimate", "intend", "predict", "potential"
or "continue", the negative of these terms and other comparable terminology.
These forward-looking statements, which are subject to risks, uncertainties and
assumptions about us, may include current views and projections of our
operations and future financial performance, growth strategies and anticipated
trends in our business. These statements are only predictions based on our
current expectations and projections about future events. There are important
factors that could cause our actual results, level of activity, performance or
achievements to differ materially from the results, level of activity,
performance or achievements expressed or implied by the forward-looking
statements. These factors include, among other things, uncertainties associated
with catastrophes such as the coronavirus ("COVID-19") pandemic and other
economic and geopolitical events. You should consider the various risks outlined
under "Risk Factors" in our 2021 Annual Report on Form 10-K and this Quarterly
Report on Form 10-Q.

Although we believe the expectations reflected in the forward-looking statements
are reasonable, we cannot give assurances that these expectations will be
achieved, nor can we guarantee future results, level of activity, performance or
achievements. Moreover, neither we nor any other person assumes responsibility
for the accuracy or completeness of any of these forward-looking statements. You
should not rely upon forward-looking statements as predictions of future events.
We are under no duty to update or review any of these forward-looking statements
after the date of this filing to conform our prior statements to actual results
or revised expectations, whether as a result of new information, future
developments or otherwise.

Overview



Greenhill is a leading independent investment bank that provides financial and
strategic advice on significant domestic and cross-border mergers and
acquisitions, divestitures, restructurings, financings, capital raising and
other transactions to a diverse client base, including corporations,
partnerships, private equity sponsors, institutional investors, family offices
and governments globally. We serve as a trusted advisor to our clients
throughout the world on a collaborative, globally integrated basis from our
offices in the United States, Australia, Canada, France, Germany, Hong Kong,
Japan, Singapore, Spain, Sweden, and the United Kingdom.

We were established in 1996 by Robert F. Greenhill, the former President of
Morgan Stanley and former Chairman and Chief Executive Officer of Smith Barney.
Since our founding, Greenhill has grown significantly, by recruiting talented
managing directors and other senior professionals, acquiring complementary
advisory businesses and training, developing and promoting professionals
internally. We have expanded beyond merger and acquisition advisory services to
include financing, restructuring, and private capital advisory services, and we
have expanded the breadth of our sector expertise to cover substantially all
major industries. Since the opening of our original office in New York, we have
expanded globally to 15 offices across four continents.

Over our 26 years as an independent investment banking firm, we have sought to
opportunistically recruit new managing directors with a range of industry and
transaction specialties, as well as high-level corporate and other
relationships, from major investment banks, independent financial advisory firms
and other institutions. We also have sought to expand our geographic reach both
through recruiting managing directors in new locations and through strategic
acquisitions. Through our recruiting and acquisition activity, we have
significantly increased our geographic reach by adding offices in the United
States, United Kingdom, Germany, Canada, Japan, Australia, Sweden, Hong Kong,
Spain, Singapore and France.

During 2022, we have recruited 3 additional client facing managing directors.
With these recruits we have expanded our teams focused on coverage of financial
sponsors, telecom infrastructure, and private capital advisory. In addition, as
previously announced effective January 1, 2022, as part of our annual evaluation
and promotion process we named 7 new client facing Managing Directors. We remain
focused on adding more senior talent in the months to come. As of July 29, 2022,
we had 80 client facing managing directors, including those whose recruitment we
have announced to date.

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Business Environment and Outlook /Factors Affecting Our Results



Global and Regional Transaction Activity. Economic conditions and global
financial markets can materially affect our financial performance. We are solely
an advisory firm and our revenues are derived from fees we earn on advisory
services related to M&A, financing advisory and restructuring, and private
capital advisory transactions. In the first six months of 2022, market
uncertainty and volatility caused by the war in Ukraine, inflationary pressures,
supply chain issues and rising interest rates slowed the level of M&A
announcements from the rapid pace of 2021. While we have continued to have a
high level of client engagement, our revenue generation was light in the first
half of 2022 due to the relative lack of large transaction completions. However,
our backlog of activity continues to suggest that revenue generation this year
is likely to play out very much like the three years before it, when we had a
weak first half followed by a better second half and particularly a strong
fourth quarter.

In terms of client activity and revenue, recent economic and market developments
are impacting our expected sources of revenue in varying ways. By sector, we
expect relatively good performances in consumer, energy, mining and telecom
infrastructure. By region, we expect significant improvement in Europe relative
to a weak performance last year, and we expect a second year of strong
performances in Australia and Canada given higher commodity prices. By type of
advice, the restructuring business is relatively quiet given low default rates,
financing advisory is slower given tighter credit markets but M&A remains active
even if overall global deal activity is well below last year's level.

While our historic focus on M&A advice for public companies is serving us well
this year, we remain committed to the three strategic initiatives. First is
expanding our coverage of financial sponsors. That client type is one that can
make use of all our services, from M&A to financing and restructuring to capital
raising and secondary sales of fund limited partner interests. We believe we
made good progress on this initiative over the past 18 months. Second is winning
more financing advisory roles. This activity is highly complementary to our
restructuring advisory businesses for companies that are in financial distress.
We made some progress in this area last year, but believe that the tremendous
growth in the direct lending market creates a very large opportunity worth
pursuing. Third is our private capital advisory business, where in the past 18
months we have built out a global team to raise primary capital for private
funds of many types, including private equity, infrastructure, credit and
others. That team is already in the market with a number of high quality fund
offerings, and we expect that area to be a significant contributor to Firm
revenue in years to come. At the same time, we continue to develop the secondary
aspect of this business globally.

Globally, the number and volume of announced transactions decreased by 19% and
24%, respectively, in the six months ended June 30, 2022 versus the same period
in the prior year. The number of completed transactions globally decreased by
18% while the volume of completed transactions increased by 7% in the same
period due to the closings of larger transactions.

We believe our business performance is best measured over longer periods of
time, as we generally experience significant variations in revenues and profits
from quarter to quarter. These variations can generally be attributed to the
fact that our revenues are typically earned in large amounts upon the successful
completion of a transaction or restructuring, the timing of which is uncertain
and is not subject to our control. Accordingly, revenues, operating income and
net income in any period may not be indicative of full year results or the
results of any other period and may vary significantly from year to year and
quarter to quarter.

Competition. We operate in a highly competitive environment where there are no
long-term contracted sources of revenue. Each revenue-generating engagement is
separately awarded and negotiated. Our list of clients with whom there are
active engagements changes continually. To develop new client relationships, and
to develop new engagements from historic client relationships, we maintain, on
an ongoing basis, active business dialogues with a large number of clients and
potential clients. We gain new clients each year through our business
development initiatives, through recruiting additional senior investment banking
professionals who bring with them client relationships and expertise in certain
industry sectors or geographies, and through referrals from members of boards of
directors, attorneys and other parties with whom we have relationships. At the
same time, we lose clients each year as a result of the sale or merger of a
client, bankruptcy, a change in a client's senior management team, turnover of
our senior banking professionals, competition from other investment banks and
other similar reasons.

1 Excludes transactions less than $100,000 and withdrawn/canceled deals. Source: Thomson Financial as of July 29, 2022.


                                       19

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                             Results of Operations

Revenues



Our revenues are derived from both corporate advisory services related to M&A,
financings and restructurings, and private capital advisory services related to
sales or capital raises pertaining to alternative assets. A majority of our
revenue is contingent upon the closing of a merger, acquisition, financing,
restructuring, or other advisory transaction. While fees payable upon the
successful conclusion of a transaction generally represent the largest portion
of our corporate advisory fees, we also earn other fees, including on-going
retainer fees, substantially all of which relate to non-success-based strategic
advisory, financing advisory and restructuring assignments, and fees payable
upon the commencement of an engagement or upon the achievement of certain
milestones such as the announcement of a transaction or the rendering of a
fairness opinion. Additionally, we generate private capital advisory revenues
from sales of alternative assets in the secondary market and from capital raises
where we act as private placement agents.

Revenues were $36.0 million in the second quarter of 2022 compared to $43.2 million in the second quarter of 2021, a decrease of $7.2 million, or 17%. The decrease principally resulted from fewer significant merger and acquisition transaction completion fees.

For the six months ended June 30, 2022, revenues were $81.5 million compared to $112.2 million in 2021, a decrease of $30.7 million, or 27%. The decrease principally resulted from fewer significant transaction completion fees.



We generally experience significant variations in revenues during each quarterly
period. These variations can generally be attributed to the fact that a majority
of our revenues is usually earned in large amounts throughout the year upon the
successful completion of transactions, the timing of which are uncertain and are
not subject to our control. Accordingly, the revenues earned in any particular
period may not be indicative of revenues earned in future periods.

Operating Expenses



We classify operating expenses as employee compensation and benefits expenses
and non-compensation operating expenses. Non-compensation operating expenses
include the costs for occupancy and equipment rental, communications,
information services, professional fees, recruiting, travel and entertainment,
insurance, depreciation and amortization, and other operating expenses.

Our total operating expenses for the second quarter of 2022 were $56.9 million,
which compared to $52.4 million of total operating expenses for the second
quarter of 2021. The increase in total operating expenses of $4.5 million, or
9%, resulted from higher compensation and benefits expenses and non-compensation
operating expenses, each as described in more detail below.

For the six months ended June 30, 2022, our total operating expenses were $116.9
million, which compared to $114.1 million of total operating expenses for the
first half of 2021. The increase in total operating expenses of $2.8 million, or
2%, resulted from an increase in our compensation and benefits expenses,
partially offset by a decrease in our non-compensation operating expenses, each
as described in more detail below.
                                       20

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The following table sets forth information relating to our operating expenses.
                                                                                                  For the Six Months Ended
                                                 For the Three Months Ended June 30,                      June 30,
                                                      2022                  2021                 2022                  2021
                                                                            (in millions, unaudited)
Employee compensation and benefits expenses                $43.2                $39.8                 $90.0                $87.1
% of revenues                                             120  %                92  %                110  %                78  %
Non-compensation operating expenses                         13.8                 12.6                  26.9                 27.0
% of revenues                                              38  %                29  %                 33  %                24  %
Total operating expenses                                    56.9                 52.4                 116.9                114.1
% of revenues                                             158  %               121  %                143  %               102  %
Total operating income (loss)                             (20.9)                (9.2)                (35.4)                (2.0)
Operating profit margin                                       NM                   NM                    NM                   NM

Compensation and Benefits Expenses



The largest component of our operating expenses is employee compensation and
benefits expenses, which we determine annually based on a percentage of
revenues. The actual percentage of revenues, which we refer to as our
compensation ratio, is determined by management in consultation with the
Compensation Committee at each year end and is based on factors such as the
relative level of revenues, anticipated compensation requirements to retain and
reward our employees, the cost to recruit and exit employees, the charge for
amortization of restricted stock and deferred cash compensation awards and
related forfeitures, among others.

Our employee compensation and benefits expenses were $43.2 million in the second
quarter of 2022 as compared to $39.8 million for the second quarter of 2021. The
increase in expense of $3.4 million, or 8%, was principally due to growth in
professional headcount and a market driven increase in salaries. The ratios of
compensation to revenues for the second quarters in both 2022 and 2021 were
elevated due to lower than average quarterly revenues.

For the six months ended June 30, 2022, our employee compensation and benefits
expenses were $90.0 million compared to $87.1 million for the same period in
2021. The increase in expense of $2.9 million, or 3%, was principally
attributable to headcount growth and higher salary levels of our professional
staff. The ratio of compensation to revenues for the six month periods in 2022
and 2021 was elevated due to the low level of first half revenues in each year.

Our compensation expense is generally based upon revenues and can fluctuate
materially in any particular period depending upon changes in headcount, amount
of revenues recognized, as well as other factors. Accordingly, the amount of
compensation expense recognized in any particular period may not be indicative
of compensation expense in future periods.

Non-Compensation Operating Expenses



Our non-compensation operating expenses such as occupancy, depreciation, and
information services are relatively fixed year to year although they may vary
depending upon changes in headcount, geographic locations and other factors.
Other expenses such as travel, professional fees and other operating expenses
vary dependent on the level of business development, recruitment, foreign
currency movements and the amount of reimbursable client expenses, which are
reported in full in both our revenues and our operating expenses. It is
management's objective to maintain comparable non-compensation costs year over
year for each jurisdiction in which we operate. We monitor costs based on actual
costs incurred in prior periods and on headcount and seek to gain operating
efficiencies when possible. During the second half of 2022, we began the build
out of new London space and expect to incur additional non-cash rent expense of
approximately $1.6 million before we exit our existing space.

For the three months ended June 30, 2022, our non-compensation operating expenses of $13.8 million increased $1.2 million, or 9%, as compared to $12.6 million in the same period in 2021. The increase principally resulted from higher costs for business travel and entertainment.



Non-compensation expenses as a percentage of revenues for the three months ended
June 30, 2022 were 38% compared to 29% for the same period in 2021. The increase
in non-compensation expenses as a percentage of revenues resulted from the
effect of spreading slightly higher non-compensation costs over lower revenues
in the three months ended June 30, 2022 as compared to the same period in 2021.
                                       21

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For the first half of 2022, our non-compensation operating expenses of $26.9
million decreased $0.1 million, or 1% as compared to $27.0 million in the
comparable period in 2021. The slight decrease principally resulted from the
benefit of a small foreign currency gain compared to a small foreign currency
loss in the same period in the prior year, partially offset by increased travel
and entertainment costs.

Non-compensation expenses as a percentage of revenues for the six months ended
June 30, 2022 were 33% compared to 24% for the same period in 2021. The increase
in non-compensation expenses as a percentage of revenues resulted from the
effect of spreading comparable non-compensation costs over much lower revenues
in the first half of 2022 as compared to the same period in 2021.

Our non-compensation operating expenses can vary as a result of a variety of
factors such as changes in headcount, the amount of recruiting and business
development activity, the amount of office expansion, the amount of client
reimbursed expenses, the impact of currency movements and other factors.
Accordingly, the non-compensation operating expenses in any particular period
may not be indicative of the non-compensation operating expenses in future
periods.

Interest Expense



For the three months ended June 30, 2022, we incurred interest expense of $3.3
million as compared to $3.1 million for the same period in 2021. The increase of
$0.2 million principally related to higher market borrowing rates in the second
quarter of 2022 compared to the same period in 2021, offset in part by lower
borrowings outstanding as a result of accelerated debt repayments made during
2021.

For the six months ended June 30, 2022, we incurred interest expense of $6.0
million, a decrease of $0.3 million as compared to $6.3 million for the same
period in 2021. The decrease related to lower borrowings outstanding, offset in
part by higher average market borrowing rates in the first six months of 2022 as
compared to the same period in 2021.

The rate of interest on our borrowing is based on LIBOR and can vary from period
to period. Accordingly, the amount of interest expense in any particular period
may not be indicative of the amount of interest expense in future periods. There
can be no certainty that our borrowing rate will not increase in future periods
as a result of the transition from LIBOR to SOFR or another alternative rate.

Provision for Income Taxes



For the three months ended June 30, 2022, we recognized an income tax benefit of
$5.4 million as compared to an income tax benefit of $3.4 million for the same
period in 2021. The tax benefit recognized in the second quarter of 2022
increased as compared to the same period in 2021 as a result of a higher pre-tax
loss in the recent three-month period.

For the six months ended June 30, 2022, due to our pre-tax loss we recognized an
income tax benefit of $10.6 million, which included an additional benefit of
$1.0 million related to the tax effect of the vesting of restricted stock units
at a market price higher than the grant price. This compared to an income tax
benefit for the six month period ended June 30, 2021 of $1.5 million, which
included a charge of $0.6 million related to the tax effect of the difference
between the grant price value and the market price value of restricted stock
awards at the time of the vesting. Excluding these benefits/charges, the
effective tax rates for the six month periods ended June 30, 2022 and 2021 would
have been 23% and 25%, respectively. The lower effective rate for the six months
ended June 30, 2022 is principally the result of a greater portion of earnings
expected to be generated in the relatively low tax jurisdiction of the U.K. in
2022 as compared to 2021.

The effective tax rate can fluctuate as a result of variations in the amount of
income earned and the tax rate imposed in the tax jurisdictions in which we
operate. Accordingly, the effective tax rate in any particular period may not be
indicative of the effective tax rate in future periods.

Liquidity and Capital Resources



Our liquidity position, which consists of cash and cash equivalents, other
significant working capital assets and liabilities, debt and other matters
relating to liquidity requirements and current market conditions, is monitored
by management on a regular basis. We retain our cash in financial institutions
with high credit ratings and/or invest in short-term investments that are
expected to provide liquidity and as permitted under the credit agreement. It is
our objective to retain a global cash balance adequate to service our forecast
operating and financing needs. At June 30, 2022, we had cash and cash
equivalents of $64.5 million.


                                       22

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We generate substantially all of our cash from advisory fees. Since we are
solely a financial advisory services firm and we do not underwrite, trade
securities, lend or have asset management services, we do not need to retain a
significant amount of regulatory capital. Our cash needs thus are primarily a
function of working capital requirements. We use our cash primarily for
recurring operating expenses, the repayment and service of our debt, the
repurchase of our common shares and other capital needs. Our recurring monthly
operating disbursements principally consist of base compensation expense,
occupancy, travel and entertainment, and other operating expenses. In addition,
we generally make interest payments on our debt on a monthly basis. Our
recurring quarterly and annual disbursements consist of cash bonus payments, tax
payments, debt service payments, dividend payments, and repurchases of our
common stock from our employees in conjunction with the payment of tax
liabilities incurred on vesting of restricted stock units. These amounts vary
depending upon our profitability and other factors.

Because a portion of the compensation we pay to our employees is distributed in
annual cash bonus awards (usually in the first quarter of each year), our net
cash balance is typically at its lowest level during the first quarter of each
year and generally accumulates from our operating activities throughout the
remainder of the year. Our current liabilities primarily consist of accounts
payable, which are generally paid monthly, accrued compensation, which includes
accrued cash bonuses that are generally paid in the first quarter of the
following year to the large majority of our employees, and current taxes
payable. Our current assets include accounts receivable, which we generally
collect within 60 days, except for fees generated through our primary capital
advisory engagements, which are generally paid in installments over a period of
three years, and certain restructuring transactions, where collections may take
longer due to court-ordered holdbacks. At June 30, 2022, we had fees receivable
of $22.1 million. Because we can experience significant fluctuations in our
quarterly revenues due to the timing of transaction closings, there can be
periods (which may fall at any time of the calendar year) in which our cash
outflows exceed the cash inflows we generate from operations. If our cash
balance declined to a level where we were unable to support our capital and
operating requirements, we would seek other funding sources.

In 2017, we announced a leveraged recapitalization to put in place a capital
structure designed to enhance long term shareholder value. In 2019, we
refinanced the credit facility that was put in place at the time of the
recapitalization and entered into a new $375.0 million five-year term loan B
facility ("TLB").

Borrowings under the TLB bear interest at either the U.S. Prime Rate plus 2.25%
or LIBOR plus 3.25%. Our borrowing rates in the six month period ended June 30,
2022 ranged from 3.35% to 4.92%. The FCA, which regulates LIBOR, has announced
that it will not compel panel banks to contribute to LIBOR after 2021. In
November 2020, the ICE Benchmark Administration Limited announced a plan to
extend the date as of which most U.S. LIBOR values would cease being computed
from December 31, 2021 to June 30, 2023. On July 29, 2021, the Alternative
Reference Rates Committee announced that it is formally recommending the
forward-looking Secured Overnight Financing Rate ("SOFR") term rate. Our credit
agreement includes alternative rate fallback provisions, which provides for use
of a broadly accepted market convention to replace LIBOR as the rate of interest
and are triggered by a notification from the Administrative Agent. We have not
yet received such notification, but expect that when we do the TLB will likely
be converted to a SOFR term rate based facility. There can be no assurance the
LIBOR phase out will not increase our cost of capital.

The TLB requires quarterly principal amortization payments of $4.7 million from
September 30, 2019 through March 31, 2024, with the remaining balance due at
maturity on April 12, 2024. The TLB permits voluntary principal payments to be
made in advance without penalty and such payments are applied to the next
successive quarterly installments. As a result of voluntary advance payments
made in 2020 and 2021 we have repaid all required quarterly amortization
payments due in advance of maturity. As of July 29, 2022 the remaining
outstanding principal balance is $271.9 million and is due at maturity. Subject
to the terms of the credit agreement, we may also be required to repay certain
amounts in advance of maturity in connection with an annual excess cash flow
calculation, the non-ordinary course sale of assets, receipt of insurance
proceeds, and the issuance of debt obligations, subject to certain exceptions.

Future voluntary repayments on the TLB will be applied without penalty or
premium. Based on the current outstanding balance of the TLB we have temporarily
paused further principal repayments to maintain an appropriate level of trading
liquidity in the loan facility in the event we elect to refinance in advance of
maturity. We would consider refinancing, modifying or amending the TLB if market
conditions were favorable and permitted us to improve some or all of terms,
including an extension of the maturity date, a reduction of the borrowing rate,
the modification of the restricted payment covenants and other actions to
increase our flexibility with respect to our uses of free cash flow. We would
consider making further repayments prior to maturity if interest rates increased
meaningfully or we otherwise considered it a prudent use of our capital.

The TLB is guaranteed by our existing and subsequently acquired or organized
wholly-owned U.S. restricted subsidiaries (excluding any registered
broker-dealers) and secured with a first priority perfected security interest in
certain domestic assets, 100% of the capital stock of each U.S. subsidiary and
65% of the capital stock of each non-U.S. subsidiary, subject to certain
exclusions. The credit facility contains certain covenants that limit our
ability above certain permitted amounts to incur additional indebtedness, make
certain acquisitions, pay dividends and repurchase shares. The TLB does not have
financial
                                       23

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covenants, however, we are subject to certain non-financial covenants such as
repayment obligations, restricted payment limitations, financial reporting
requirements and others. Our failure to comply with the terms of these covenants
may adversely affect our operations and could permit lenders to accelerate the
maturity of the debt and to foreclose upon any collateral securing the debt. At
June 30, 2022, we were compliant with all loan covenants under the credit
agreement and we expect to continue to be compliant with all loan covenants in
future periods.

Since we announced our recapitalization in 2017, we have used the majority of
the TLB borrowing proceeds along with a portion of our excess cash flow over the
past several years to repurchase shares of our common stock through open market
purchases (including pursuant to 10b5-1 plans) and tender offers. During 2022,
we repurchased in the open market 1,130,208 shares of our common stock for $16.8
million and we are deemed to have repurchased 783,403 shares of common stock
equivalents from employees at the time of vesting of RSUs to settle withholding
tax liabilities for $13.4 million.

For the period beginning February 1, 2022 through January 31, 2023 our Board of
Directors has authorized $70.0 million in purchases of common stock and common
stock equivalents (via tax withholding on vesting of restricted stock units). As
of July 29, 2022, we had $44.6 million remaining and authorized for repurchase
through January 2023. Future share repurchases are subject to market conditions
and other factors, such as our results of operations, financial position and
capital requirements, general business conditions, legal, tax and regulatory
constraints or restrictions, any contractual restrictions and other factors
deemed relevant. There can be no assurances of the price at which we may be able
to repurchase our shares or that we will repurchase the full amount authorized
for the period ending January 31, 2023 or the amount authorized in any future
period.

In the first half of 2022, the Board of Directors declared quarterly dividend
payments of $0.10 per share payable in March and June. In August 2022, the Board
also declared a quarterly dividend payment of $0.10 per share, which will be
payable on September 28, 2022.

Future authorizations to repurchase our common stock and to pay dividends on our
common stock are at the discretion of our Board of Directors and depend upon,
among other things, general financial conditions, capital requirements and
surplus, cash flows, debt service obligations, our recent and expected future
operations and earnings, legal and contractual restrictions and other factors as
the Board of Directors may deem relevant. Further, under our credit agreement,
we are restricted in the amount of cash we may use to repurchase our common
stock and common stock equivalents and/or to make dividend distributions. Going
forward, we intend to take a balanced approach to our use of available cash,
allocating funds for a combination of deleveraging, share repurchases and
dividends depending on such factors as our financial position, capital
requirements, results of operations and outlook, as well as any legal, tax,
regulatory or contractual constraints and any other factors deemed relevant.

As part of our long term incentive award program, we may award restricted stock
units to managing directors and other employees at the time of hire and/or as
part of annual compensation. Awards of restricted stock units generally vest
over a three to five-year service period, subject to continued employment on the
vesting date. Each restricted stock unit represents the holder's right to
receive one share of our common stock (or at our election, a cash payment equal
to the fair value thereof) on the vesting date. Under the terms of our equity
incentive plan, we generally repurchase from our employees that portion of
restricted stock unit awards used to fund income tax withholding due at the time
the restricted stock unit awards vest and pay the remainder of the award in
shares of our common stock. Based upon the number of restricted stock unit
grants outstanding at July 29, 2022, we estimate repurchases of our common stock
from our employees in conjunction with the cash settlement of tax liabilities
incurred on vesting of restricted stock units of approximately $31.2 million (as
calculated based upon the closing share price as of July 29, 2022 of $8.70 per
share and assuming a withholding tax rate of 46% consistent with our recent
experience) over the next five years, of which an additional $4.2 million
remains payable in 2022, $9.3 million will be payable in 2023, $7.0 million will
be payable in 2024, $6.4 million will be payable in 2025, $2.8 million will be
payable in 2026, and $1.5 million will be payable in 2027. We will realize a
corporate income tax deduction concurrently with the vesting of the restricted
stock units. While we expect to fund future repurchases of our common stock
equivalents (if any) with operating cash flow, we are unable to predict the
price of our common stock, and as a result, the timing or magnitude of our share
repurchases may be greater or less than the amounts calculated above. Our credit
agreement limits the amount we may use for common stock and common stock
equivalent share repurchases. To the extent future repurchases are expected to
exceed the amount permitted under the credit agreement, we may seek to modify
the credit agreement to increase the amount or seek other means to settle the
withholding tax liability incurred on the vesting of the restricted stock units.

Also, as part of our long-term incentive award program, we may also award
deferred cash compensation to managing directors and other employees at the time
of hire and/or as part of annual compensation. Awards of deferred cash
compensation generally vest over a three to five year service period, subject to
continued employment. Each award provides the employee with the right to receive
future cash compensation payments, which are non-interest bearing, on the
vesting date. Based upon the value of the deferred cash awards outstanding at
July 29, 2022, we estimate payments of $36.7 million over the next five years,
of which $0.9 million remains payable in 2022, $11.5 million will be payable in
2023, $10.3 million will be payable in

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2024, $9.3 million will be payable in 2025, and $4.7 million will be payable in 2026. We will realize a corporate income tax deduction at the time of payment.



Our capital expenditures relate primarily to technology systems and periodic
refurbishment of our leased premises, which generally range from $2.0 million to
$3.0 million annually. From time to time we incur leasehold improvements related
to the build out of new space. In 2022, we expect to incur leasehold costs of
approximately $8.0 million, excluding the benefit of lease incentives, related
to the relocation of our London office. There are no other large leasehold
improvement expenditures planned in the near-term.

Under the U.S federal tax law, we can repatriate foreign cash with minimal or no
incremental tax burden. Subject to any limitations imposed by the Treasury
Department and any future changes made to current tax law, we intend to
repatriate our foreign cash dependent upon our needs for cash in the U.S. The
amount of foreign cash we repatriate is subject to our estimated foreign
operating and regulatory needs as well as our global cash management needs.
Based on recent regulatory pronouncements in the U.K. and Europe our regulatory
capital amounts are expected to modestly increase over the next few years.

We operate in multiple countries in North America, Europe, Australia and Asia.
As a financial services firm, we are subject to extensive regulation by
governments, their respective agencies and/or various self-regulatory
organizations or exchanges in each of the countries in which we operate. Each
regulator imposes varying degrees of regulatory requirements which generally
include net capital requirements, customer protection and market conduct
requirements. The amount of regulatory capital required by each regulatory
authority varies and may change through the implementation of new regulations or
a change in our business operations. Due to the enactment of new regulatory
standards in the U.K. and the relocation of our European headquarters to
Germany, our regulatory capital requirements in the U.K. and Europe have
increased moderately from historically very nominal levels. Elsewhere in the
world we are also subject to varying capital requirements. To comply with these
requirements, we may need to retain cash in certain jurisdictions in excess of
our forecasted working capital needs. In the event we need additional capital in
one or more locations we may be required to fund those needs by withdrawing
capital from another jurisdiction, subject to limitations imposed on
intercompany lending by our credit agreement.

While we believe that the cash generated from operations will be sufficient to
meet our expected operating needs, which include, among other things, our tax
obligations, interest and principal payments on our loan facilities, dividend
payments, share repurchases related to the tax settlement payments upon the
vesting of the restricted stock units, deferred cash compensation payments and
build-out costs of new office space, we may adjust our variable expenses and
other disbursements, if necessary, to meet our liquidity needs. However, there
is no assurance that our cash flow will be sufficient to allow us to meet our
operating obligations and make timely principal and interest payments under the
credit agreement. If we are unable to fund our operating and debt obligations,
we may need to consider taking other actions, including issuing additional
securities, seeking strategic investments, reducing operating costs or a
combination of these actions, in each case on terms which may not be favorable
to us. Further, failure to make timely principal and interest payments under the
credit agreement could result in a default. A default of our credit agreement
would permit lenders to accelerate the maturity for the debt and to foreclose
upon any collateral securing the debt. In addition, the limitations imposed by
the financing agreements on our ability to incur additional debt and to take
other actions might significantly impair our ability to obtain other financing.
Further, a failure to maintain adequate regulatory capital in one or more
jurisdictions could result in sanctions, a suspension of our regulatory license
in such locations or limit or prohibit us from conducting operations.

Cash Flows



In the six months ended June 30, 2022, our cash and cash equivalents decreased
by $70.1 million from December 31, 2021, including a decrease of $3.6 million
from the effect of the translation of foreign currency amounts into U.S. dollars
at the quarter-end foreign currency conversion rates. We used $31.1 million for
operating activities, which consisted of an operating loss of $10.5 million
after giving effect to non-cash items and a net increase in working capital of
$20.5 million, principally from the payment of annual bonuses. We used $0.9
million in investing activities to fund leasehold improvements and equipment
purchases. We used $34.5 million in financing activities, including $16.8
million for open market repurchases of our common stock, $13.4 million for the
repurchase of our common stock from employees in conjunction with the payment of
tax liabilities in settlement of restricted stock units, and $4.3 million for
the payment of dividends.

In the six months ended June 30, 2021, our cash and cash equivalents decreased
by $20.2 million from December 31, 2020, including an increase of $0.3 million
from the effect of the translation of foreign currency amounts into U.S. dollars
at the quarter-end foreign currency conversion rates. We generated $28.8 million
from operating activities, which consisted of $13.5 million from operating
earnings after giving effect to non-cash items and a net decrease in working
capital of $15.3 million, principally from the collection of fees receivables.
We used $2.9 million in investing activities principally to fund leasehold
improvements and equipment purchases. We used $46.4 million in financing
activities, including $20.0 million for the advance repayment of the term loan,
$12.5 million for open market repurchases of our common stock, $11.3 million for
the repurchase
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of our common stock from employees in conjunction with the payment of tax liabilities in settlement of restricted stock units, and $2.6 million for the payment of dividends.

Off-Balance Sheet Arrangements

We do not invest in off-balance sheet vehicles that provide financing, liquidity, market risk or credit risk support, or engage in any leasing or hedging activities that expose us to any liability that is not reflected in our condensed consolidated financial statements.

Contractual Obligations

There have been no material changes in our contractual obligations from those disclosed in the Firm's Annual Report on Form 10-K for the year ended December 31, 2021.


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Market Risk

Our business is not capital-intensive and as such, is not subject to significant market or credit risks.

Risks Related to Cash and Short-Term Investments



Our cash and cash equivalents are principally held in depository accounts and
money market funds and other short-term highly liquid investments with original
maturities of three months or less. We maintain our depository accounts with
financial institutions with high credit ratings. Although these deposits are
generally not insured, management believes we are not exposed to significant
credit risk due to the financial position of the depository institutions in
which those deposits are held. Further, we do not believe our cash equivalent
investments are exposed to significant credit risk or interest rate risk due to
the short-term nature and high quality of the underlying investments in which
the funds are invested.

Credit Risk

We regularly review our accounts receivable and allowance for doubtful accounts
by considering factors such as historical experience, credit quality, age of the
accounts receivable, and the current economic conditions that may affect a
customer's ability to pay such amounts owed to the Firm. We maintain an
allowance for doubtful accounts that, in our opinion, provides for an adequate
reserve to cover losses that may be incurred.

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 assets and liabilities. Non-functional currency
related transaction gains and losses are recorded in the condensed consolidated
statements of operations.

In addition, the reported amounts of our revenues may be affected by movements
in the rate of exchange between the currency in which an invoice is issued and
paid and the U.S. dollar, in which our financial statements are denominated. We
do not currently hedge against movements in these exchange rates through the use
of derivative instruments or other methods. We analyze our potential exposure to
a decline in exchange rates by performing a sensitivity analysis on our net
income in those jurisdictions in which we have generated a significant portion
of our foreign earnings, which generally include the United Kingdom, Europe, and
Australia. During the six months ended June 30, 2022, as compared to the same
period in 2021, the average value of the U.S. dollar strengthened relative to
the pound sterling, euro and Australian dollar. In aggregate, there was a slight
negative impact on our revenues in the six months ended June 30, 2022 as
compared to the same period in 2021 as a result of the timing of recognition of
foreign revenues. Even if the currency rates had changed more materially, the
impact would not have had been significant to our foreign operations because our
operating costs in foreign jurisdictions are denominated in local currency and
consequently we are effectively internally hedged to some extent against the
impact in the movements of foreign currency relative to the U.S. dollar. While
our earnings are subject to volatility from changes in foreign currency rates,
we do not believe we face any material risk in this respect.

Interest Rate Risk



Our TLB bears interest at the U.S. Prime Rate plus 2.25% or LIBOR plus 3.25%.
Because we have indebtedness which bears interest at variable rates, our
financial results will be sensitive to changes in prevailing market rates of
interest. As of June 30, 2022, we had $271.9 million of indebtedness
outstanding, all of which bears interest at floating rates. The rate of interest
varies from period to period and our interest rate exposure is not currently
hedged to mitigate the effect of interest rate fluctuations. Depending upon
future market conditions and our level of outstanding variable rate debt, we may
enter into interest rate swap or other hedge arrangements (with counterparties
that, in our judgment, have sufficient creditworthiness) to hedge our exposure
against interest rate volatility. As of June 30, 2022, a 100 basis point
increase in LIBOR would have increased our annual borrowing expense by $2.7
million.

The FCA, which regulates LIBOR, has announced that it will not compel panel
banks to contribute to LIBOR after 2021. In November 2020, the ICE Benchmark
Administration Limited announced a plan to extend the date as of which most U.S.
LIBOR values would cease being computed from December 31, 2021 to June 30, 2023.
On July 29, 2021, the Alternative Reference Rates Committee announced that it is
formally recommending the forward-looking SOFR term rate. Our credit agreement
includes alternative rate fallback provisions, which provides for use of a
broadly accepted market convention to replace LIBOR as the rate of interest and
are triggered by a notification from the Administrative Agent. We have not yet
received such notification, but expect that when we do the TLB will likely be
converted to a SOFR term rate based facility. There can be no assurance the
LIBOR phase out will not increase our cost of capital.


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Critical Accounting Policies and Estimates



Descriptions of our critical accounting policies and estimates, which are those
that are most important to the presentation of our financial condition and
results of operations and require management's most difficult, subjective and
complex judgments, are set forth above in "Item 1 - Notes to Condensed
Consolidated Financial Statements (unaudited), Note 2 - Summary of Significant
Accounting Policies" and are incorporated by reference herein.

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