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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
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(Mark One) | | | |
☑ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2022 |
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OR |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| FOR THE TRANSITION PERIOD FROM TO |
Commission file number: 001-35826
Artisan Partners Asset Management Inc.
(Exact name of registrant as specified in its charter)
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Delaware | 45-0969585 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
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875 E. Wisconsin Avenue, Suite 800 | |
Milwaukee, | WI | 53202 |
(Address of principal executive offices) | (Zip Code) |
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(414) 390-6100
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: | | | | | | | | |
Title of each class | Trading Symbol | Name of each exchange on which registered |
Class A common stock, par value $0.01 per share | APAM | New York Stock Exchange |
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act: | | | | | | | | | | | | | | | | | |
Large accelerated filer | ☑ | | | Accelerated filer | ☐ |
Non-accelerated filer | ☐ | | Smaller reporting company | ☐ |
| | | | Emerging growth company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑
The number of outstanding shares of the registrant’s Class A common stock, par value $0.01 per share, Class B common stock, par value $0.01 per share, and Class C common stock, par value $0.01 per share, as of October 28, 2022 were 67,911,057, 2,589,388 and 9,111,117, respectively.
TABLE OF CONTENTS | | | | | | | | |
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Part I | Financial Information | |
Item 1. | Unaudited Consolidated Financial Statements | |
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Item 2. | | |
Item 3. | | |
Item 4. | | |
Part II | Other Information | |
Item 1. | | |
Item 1A. | | |
Item 2. | | |
Item 3. | | |
Item 4. | | |
Item 5. | | |
Item 6. | | |
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Except where the context requires otherwise, in this report, references to the “Company”, “Artisan”, “we”, “us” or “our” refer to Artisan Partners Asset Management Inc. (“APAM”) and its direct and indirect subsidiaries, including Artisan Partners Holdings LP (“Artisan Partners Holdings” or “Holdings”). On March 12, 2013, APAM closed its initial public offering and related corporate reorganization. Prior to that date, APAM was a subsidiary of Artisan Partners Holdings.
Forward-Looking Statements
This report contains, and from time to time our management may make, forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Statements regarding future events and our future performance, as well as management’s current expectations, beliefs, plans, estimates, or projections relating to the future, are forward-looking statements within the meaning of these laws. In some cases, you can identify these statements by forward-looking words such as “may”, “might”, “will”, “should”, “expects”, “intends”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue”, the negative of these terms and other comparable terminology. Forward-looking statements are only predictions based on current expectations and projections about future events. Forward-looking statements are subject to a number of risks and uncertainties, and there are important factors that could cause actual results, level of activity, performance, actions or achievements to differ materially from the results, level of activity, performance, actions or achievements expressed or implied by the forward-looking statements. These factors include: the loss of key investment professionals or senior management, adverse market or economic conditions, poor performance of our investment strategies, change in the legislative and regulatory environment in which we operate, operational or technical errors or other damage to our reputation, the long-term impact of the COVID-19 pandemic and other factors disclosed in the Company’s filings with the Securities and Exchange Commission, including those factors listed under the caption entitled “Risk Factors” in Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the SEC on February 22, 2022, as such factors may be updated from time to time. Our periodic and current reports are accessible on the SEC’s website at www.sec.gov. We undertake no obligation to publicly update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this report, except as required by law.
Forward-looking statements include, but are not limited to, statements about:
•our anticipated future results of operations;
•our potential operating performance and efficiency, including our ability to operate under different and unique circumstances;
•our expectations with respect to future business initiatives;
•our expectations with respect to the performance of our investment strategies;
•our expectations with respect to future levels of assets under management, including the capacity of our strategies and client cash inflows and outflows;
•our expectations with respect to industry trends and how those trends may impact our business;
•our financing plans, cash needs and liquidity position;
•our intention to pay dividends and our expectations about the amount of those dividends;
•our expected levels of compensation of our employees, including equity- and cash-based long-term incentive compensation;
•our expectations with respect to future expenses and the level of future expenses;
•our expected tax rate, and our expectations with respect to deferred tax assets; and
•our estimates of future amounts payable pursuant to our tax receivable agreements.
Part I — Financial Information
Item 1. Unaudited Consolidated Financial Statements
ARTISAN PARTNERS ASSET MANAGEMENT INC.
Unaudited Condensed Consolidated Statements of Financial Condition
(U.S. dollars in thousands, except per share amounts) | | | | | | | | | | | |
| September 30, 2022 | | December 31, 2021 |
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ASSETS |
Cash and cash equivalents | $ | 168,123 | | | $ | 189,226 | |
Accounts receivable | 103,434 | | | 115,850 | |
Investment securities | 78,240 | | | 47,878 | |
Property and equipment, net | 47,398 | | | 35,313 | |
Deferred tax assets | 484,756 | | | 497,902 | |
Restricted cash | 629 | | | 629 | |
Prepaid expenses and other assets | 19,493 | | | 20,282 | |
Operating lease assets | 104,774 | | | 88,642 | |
Assets of consolidated investment products | | | |
Cash and cash equivalents | 18,870 | | | 10,916 | |
Accounts receivable and other | 52,865 | | | 6,408 | |
Investment assets, at fair value | 264,302 | | | 195,001 | |
Total assets | $ | 1,342,884 | | | $ | 1,208,047 | |
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LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS, AND STOCKHOLDERS’ EQUITY |
Accounts payable, accrued expenses, and other | $ | 26,276 | | | $ | 28,992 | |
Accrued incentive compensation | 105,971 | | | 7,521 | |
Borrowings | 199,007 | | | 199,444 | |
Operating lease liabilities | 123,476 | | | 100,303 | |
Amounts payable under tax receivable agreements | 398,247 | | | 425,427 | |
Liabilities of consolidated investment products | | | |
Accounts payable, accrued expenses, and other | 84,862 | | | 20,185 | |
Investment liabilities, at fair value | 21,051 | | | 19,179 | |
Total liabilities | 958,890 | | | 801,051 | |
Commitments and contingencies | | | |
Redeemable noncontrolling interests | 128,881 | | | 111,035 | |
Common stock | | | |
Class A common stock ($0.01 par value per share, 500,000,000 shares authorized, 67,911,928 and 66,699,872 shares outstanding at September 30, 2022 and December 31, 2021, respectively) | 679 | | | 667 | |
Class B common stock ($0.01 par value per share, 200,000,000 shares authorized, 2,589,388 and 3,206,580 shares outstanding at September 30, 2022 and December 31, 2021, respectively) | 26 | | | 32 | |
Class C common stock ($0.01 par value per share, 400,000,000 shares authorized, 9,111,117 and 9,128,617 shares outstanding at September 30, 2022 and December 31, 2021, respectively) | 91 | | | 91 | |
Additional paid-in capital | 163,769 | | | 141,835 | |
Retained earnings | 78,641 | | | 134,889 | |
Accumulated other comprehensive income (loss) | (4,289) | | | (1,310) | |
Total Artisan Partners Asset Management Inc. stockholders’ equity | 238,917 | | | 276,204 | |
Noncontrolling interests - Artisan Partners Holdings | 16,196 | | | 19,757 | |
Total stockholders’ equity | $ | 255,113 | | | $ | 295,961 | |
Total liabilities, redeemable noncontrolling interests, and stockholders’ equity | $ | 1,342,884 | | | $ | 1,208,047 | |
The accompanying notes are an integral part of the consolidated financial statements.
ARTISAN PARTNERS ASSET MANAGEMENT INC.
Unaudited Consolidated Statements of Operations
(U.S. dollars in thousands, except per share amounts) | | | | | | | | | | | | | | | | | | | | | | | |
| For the Three Months Ended September 30, | | For the Nine Months Ended September 30, |
| 2022 | | 2021 | | 2022 | | 2021 |
Revenues | | | | | | | |
Management fees | $ | 234,191 | | | $ | 316,176 | | | $ | 766,901 | | | $ | 901,011 | |
Performance fees | 121 | | | 398 | | | 397 | | | 11,189 | |
Total revenues | $ | 234,312 | | | $ | 316,574 | | | $ | 767,298 | | | $ | 912,200 | |
Operating Expenses | | | | | | | |
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Compensation and benefits | 122,033 | | | 142,235 | | | 389,359 | | | 419,713 | |
Distribution, servicing and marketing | 5,593 | | | 8,131 | | | 18,952 | | | 23,707 | |
Occupancy | 7,127 | | | 5,560 | | | 20,407 | | | 16,260 | |
Communication and technology | 11,945 | | | 10,873 | | | 35,833 | | | 31,150 | |
General and administrative | 8,888 | | | 6,717 | | | 28,622 | | | 18,700 | |
Total operating expenses | 155,586 | | | 173,516 | | | 493,173 | | | 509,530 | |
Total operating income | 78,726 | | | 143,058 | | | 274,125 | | | 402,670 | |
Non-operating income (expense) | | | | | | | |
Interest expense | (2,428) | | | (2,711) | | | (7,853) | | | (8,116) | |
Net gain (loss) on the tax receivable agreements | 431 | | | 358 | | | 913 | | | 358 | |
Net investment gain (loss) of consolidated investment products | (3,936) | | | 2,824 | | | (14,605) | | | 18,068 | |
Other net investment gain (loss) | (5,563) | | | (2,109) | | | (23,729) | | | 2,022 | |
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Total non-operating income (expense) | (11,496) | | | (1,638) | | | (45,274) | | | 12,332 | |
Income before income taxes | 67,230 | | | 141,420 | | | 228,851 | | | 415,002 | |
Provision for income taxes | 14,750 | | | 28,054 | | | 46,761 | | | 78,137 | |
Net income before noncontrolling interests | 52,480 | | | 113,366 | | | 182,090 | | | 336,865 | |
Less: Net income attributable to noncontrolling interests - Artisan Partners Holdings | 10,999 | | | 24,796 | | | 37,150 | | | 74,064 | |
Less: Net income (loss) attributable to noncontrolling interests - consolidated investment products | (2,754) | | | 2,157 | | | (9,007) | | | 10,903 | |
Net income attributable to Artisan Partners Asset Management Inc. | $ | 44,235 | | | $ | 86,413 | | | $ | 153,947 | | | $ | 251,898 | |
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Basic earnings per share | $ | 0.65 | | | $ | 1.30 | | | $ | 2.17 | | | $ | 3.84 | |
Diluted earnings per share | $ | 0.65 | | | $ | 1.30 | | | $ | 2.17 | | | $ | 3.84 | |
Basic weighted average number of common shares outstanding | 62,623,434 | | 59,965,549 | | 62,329,756 | | 59,519,634 |
Diluted weighted average number of common shares outstanding | 62,632,660 | | 59,982,774 | | 62,353,275 | | 59,535,894 |
Dividends declared per Class A common share | $ | 0.60 | | | $ | 1.00 | | | $ | 3.11 | | | $ | 3.16 | |
The accompanying notes are an integral part of the consolidated financial statements.
ARTISAN PARTNERS ASSET MANAGEMENT INC.
Unaudited Consolidated Statements of Comprehensive Income
(U.S. dollars in thousands) | | | | | | | | | | | | | | | | | | | | | | | |
| For the Three Months Ended September 30, | | For the Nine Months Ended September 30, |
| 2022 | | 2021 | | 2022 | | 2021 |
Net income before noncontrolling interests | $ | 52,480 | | | $ | 113,366 | | | $ | 182,090 | | | $ | 336,865 | |
Other comprehensive income (loss) | | | | | | | |
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Foreign currency translation gain (loss) | (1,518) | | | (595) | | | (3,476) | | | (358) | |
Total other comprehensive income (loss) | (1,518) | | | (595) | | | (3,476) | | | (358) | |
Comprehensive income | 50,962 | | | 112,771 | | | 178,614 | | | 336,507 | |
Comprehensive income attributable to noncontrolling interests - Artisan Partners Holdings | 10,800 | | | 24,697 | | | 36,654 | | | 74,028 | |
Comprehensive income (loss) attributable to noncontrolling interests - consolidated investment products | (2,754) | | | 2,157 | | | (9,007) | | | 10,903 | |
Comprehensive income attributable to Artisan Partners Asset Management Inc. | $ | 42,916 | | | $ | 85,917 | | | $ | 150,967 | | | $ | 251,576 | |
The accompanying notes are an integral part of the consolidated financial statements.
ARTISAN PARTNERS ASSET MANAGEMENT INC.
Unaudited Consolidated Statements of Changes in Stockholders’ Equity
(U.S. dollars in thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Three months ended September 30, 2022 | Class A Common Stock | Class B Common Stock | Class C Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests - Artisan Partners Holdings | Total Stockholders’ Equity | Redeemable Noncontrolling Interests |
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Balance at July 1, 2022 | $ | 674 | | $ | 31 | | $ | 91 | | $ | 153,134 | | $ | 75,443 | | $ | (2,971) | | $ | 16,892 | | $ | 243,294 | | $ | 127,078 | |
Net income | — | | — | | — | | — | | 44,235 | | — | | 10,999 | | 55,234 | | (2,754) | |
Other comprehensive income - foreign currency translation | — | | — | | — | | — | | — | | (1,294) | | (224) | | (1,518) | | — | |
Cumulative impact of changes in ownership of Artisan Partners Holdings LP | — | | — | | — | | 889 | | — | | (24) | | (865) | | — | | — | |
Amortization of equity-based compensation | — | | — | | — | | 8,660 | | — | | — | | 1,499 | | 10,159 | | — | |
Deferred tax assets, net of amounts payable under tax receivable agreements | — | | — | | — | | 1,378 | | — | | — | | — | | 1,378 | | — | |
Issuance of Class A common stock, net of issuance costs | — | | — | | — | | (7) | | — | | — | | — | | (7) | | — | |
Forfeitures and employee/partner terminations | — | | — | | — | | — | | — | | — | | — | | — | | — | |
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Employee net share settlement | — | | — | | — | | (285) | | (1) | | — | | (48) | | (334) | | — | |
Exchange of subsidiary equity | 5 | | (5) | | — | | — | | — | | — | | — | | — | | — | |
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Capital contributions, net | — | | — | | — | | — | | — | | — | | — | | — | | 4,557 | |
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Distributions | — | | — | | — | | — | | — | | — | | (12,026) | | (12,026) | | — | |
Dividends | — | | — | | — | | — | | (41,036) | | — | | (31) | | (41,067) | | — | |
Balance at September 30, 2022 | $ | 679 | | $ | 26 | | $ | 91 | | $ | 163,769 | | $ | 78,641 | | $ | (4,289) | | $ | 16,196 | | $ | 255,113 | | $ | 128,881 | |
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Three months ended September 30, 2021 | Class A Common Stock | Class B Common Stock | Class C Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests - Artisan Partners Holdings | Total Stockholders’ Equity | Redeemable Noncontrolling Interests |
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Balance at July 1, 2021 | $ | 648 | | $ | 36 | | $ | 106 | | $ | 119,855 | | $ | 100,429 | | $ | (817) | | $ | 20,207 | | $ | 240,464 | | $ | 90,458 | |
Net income | — | | — | | — | | — | | 86,413 | | — | | 24,795 | | 111,208 | | 2,157 | |
Other comprehensive income - foreign currency translation | — | | — | | — | | — | | — | | (489) | | (106) | | (595) | | — | |
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Cumulative impact of changes in ownership of Artisan Partners Holdings LP | — | | — | | — | | (412) | | — | | (7) | | 419 | | — | | — | |
Amortization of equity-based compensation | — | | — | | — | | 8,029 | | — | | — | | 1,716 | | 9,745 | | — | |
Deferred tax assets, net of amounts payable under tax receivable agreements | — | | — | | — | | 1,154 | | — | | — | | — | | 1,154 | | — | |
Issuance of Class A common stock, net of issuance costs | — | | — | | — | | (5) | | — | | — | | — | | (5) | | — | |
Forfeitures and employee/partner terminations | — | | — | | — | | — | | — | | — | | — | | — | | — | |
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Exchange of subsidiary equity | 4 | | — | | (4) | | — | | — | | — | | — | | — | | — | |
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Capital contributions, net | — | | — | | — | | — | | — | | — | | — | | — | | 4,776 | |
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Distributions | — | | — | | — | | — | | — | | — | | (25,629) | | (25,629) | | — | |
Dividends | — | | — | | — | | — | | (65,345) | | — | | (44) | | (65,389) | | — | |
Balance at September 30, 2021 | $ | 652 | | $ | 36 | | $ | 102 | | $ | 128,621 | | $ | 121,497 | | $ | (1,313) | | $ | 21,358 | | $ | 270,953 | | $ | 97,391 | |
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The accompanying notes are an integral part of the consolidated financial statements. |
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Nine months ended September 30, 2022 | Class A Common Stock | Class B Common Stock | Class C Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests - Artisan Partners Holdings | Total Stockholders’ Equity | Redeemable Noncontrolling Interests |
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Balance at January 1, 2022 | $ | 667 | | $ | 32 | | $ | 91 | | $ | 141,835 | | $ | 134,889 | | $ | (1,310) | | $ | 19,757 | | $ | 295,961 | | $ | 111,035 | |
Net income | — | | — | | — | | — | | 153,947 | | — | | 37,150 | | 191,097 | | (9,007) | |
Other comprehensive income - foreign currency translation | — | | — | | — | | — | | — | | (2,950) | | (526) | | (3,476) | | — | |
Cumulative impact of changes in ownership of Artisan Partners Holdings LP | — | | — | | — | | (262) | | — | | (29) | | 291 | | — | | — | |
Amortization of equity-based compensation | — | | — | | — | | 27,026 | | — | | — | | 4,587 | | 31,613 | | — | |
Deferred tax assets, net of amounts payable under tax receivable agreements | — | | — | | — | | 1,708 | | — | | — | | — | | 1,708 | | — | |
Issuance of Class A common stock, net of issuance costs | — | | — | | — | | (9) | | — | | — | | — | | (9) | | — | |
Forfeitures and employee/partner terminations | — | | — | | — | | — | | — | | — | | — | | — | | — | |
Issuance of restricted stock awards | 8 | | — | | — | | (8) | | — | | — | | — | | — | | — | |
Employee net share settlement | (2) | | — | | — | | (6,521) | | (26) | | — | | (1,205) | | (7,754) | | — | |
Exchange of subsidiary equity | 6 | | (6) | | — | | — | | — | | — | | — | | — | | — | |
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Capital contributions, net | — | | — | | — | | — | | — | | — | | — | | — | | 36,126 | |
Impact of deconsolidation of CIPs | — | | — | | — | | — | | — | | — | | — | | — | | (9,273) | |
Distributions | — | | — | | — | | — | | — | | — | | (43,721) | | (43,721) | | — | |
Dividends | — | | — | | — | | — | | (210,169) | | — | | (137) | | (210,306) | | — | |
Balance at September 30, 2022 | $ | 679 | | $ | 26 | | $ | 91 | | $ | 163,769 | | $ | 78,641 | | $ | (4,289) | | $ | 16,196 | | $ | 255,113 | | $ | 128,881 | |
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Nine months ended September 30, 2021 | Class A Common Stock | Class B Common Stock | Class C Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests - Artisan Partners Holdings | Total Stockholders’ Equity | Redeemable Noncontrolling Interests |
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Balance at January 1, 2021 | $ | 631 | | $ | 45 | | $ | 110 | | $ | 107,738 | | $ | 72,944 | | $ | (991) | | $ | 10,565 | | $ | 191,042 | | $ | 93,753 | |
Net income | — | | — | | — | | — | | 251,898 | | — | | 74,064 | | 325,962 | | 10,903 | |
Other comprehensive income - foreign currency translation | — | | — | | — | | — | | — | | (301) | | (57) | | (358) | | — | |
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Cumulative impact of changes in ownership of Artisan Partners Holdings LP | — | | — | | — | | (1,256) | | — | | (21) | | 1,277 | | — | | — | |
Amortization of equity-based compensation | — | | — | | — | | 24,798 | | — | | — | | 5,301 | | 30,099 | | — | |
Deferred tax assets, net of amounts payable under tax receivable agreements | — | | — | | — | | 4,994 | | — | | — | | — | | 4,994 | | — | |
Issuance of Class A common stock, net of issuance costs | 10 | | — | | — | | 46,651 | | — | | — | | — | | 46,661 | | — | |
Forfeitures and employee/partner terminations | (1) | | — | | — | | 1 | | — | | — | | — | | — | | — | |
Issuance of restricted stock awards | 7 | | — | | — | | (7) | | — | | — | | — | | — | | — | |
Employee net share settlement | (2) | | — | | — | | (7,380) | | — | | — | | (1,777) | | (9,159) | | — | |
Exchange of subsidiary equity | 7 | | (2) | | (5) | | — | | — | | — | | — | | — | | — | |
Purchase of equity and subsidiary equity | — | | (7) | | (3) | | (46,918) | | — | | — | | — | | (46,928) | | — | |
Capital contributions, net | — | | — | | — | | — | | — | | — | | — | | — | | 59,818 | |
Impact of deconsolidation of CIPs | — | | — | | — | | — | | — | | — | | — | | — | | (67,083) | |
Distributions | — | | — | | — | | — | | — | | — | | (67,889) | | (67,889) | | — | |
Dividends | — | | — | | — | | — | | (203,345) | | — | | (126) | | (203,471) | | — | |
Balance at September 30, 2021 | $ | 652 | | $ | 36 | | $ | 102 | | $ | 128,621 | | $ | 121,497 | | $ | (1,313) | | $ | 21,358 | | $ | 270,953 | | $ | 97,391 | |
The accompanying notes are an integral part of the consolidated financial statements. |
ARTISAN PARTNERS ASSET MANAGEMENT INC.
Unaudited Consolidated Statements of Cash Flows
(U.S. dollars in thousands) | | | | | | | | | | | |
| For the Nine Months Ended September 30, |
| 2022 | | 2021 |
Cash flows from operating activities | | | |
Net income before noncontrolling interests | $ | 182,090 | | | $ | 336,865 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | |
Depreciation and amortization | 5,618 | | | 5,081 | |
Deferred income taxes | 21,697 | | | 28,411 | |
| | | |
| | | |
Noncash lease expense | 1,271 | | | (1,272) | |
Net investment (gain) loss on nonconsolidated investment securities | 23,777 | | | (2,230) | |
Net (gain) loss on the tax receivable agreements | (913) | | | (358) | |
(Gain) loss on disposal of property and equipment | 38 | | | 1 | |
Amortization of debt issuance costs | 329 | | | 304 | |
Share-based compensation | 31,613 | | | 30,099 | |
Net investment (gain) loss of consolidated investment products | 14,605 | | | (18,068) | |
Purchase of investments by consolidated investment products | (319,093) | | | (190,614) | |
Proceeds from sale of investments by consolidated investment products | 151,198 | | | 127,863 | |
| | | |
Change in assets and liabilities resulting in an increase (decrease) in cash: | | | |
Accounts receivable | 12,416 | | | (22,260) | |
Prepaid expenses and other assets | 2,527 | | | (4,214) | |
Accounts payable and accrued expenses | 94,611 | | | 113,355 | |
Net change in operating assets and liabilities of consolidated investment products | 84,838 | | | 1,205 | |
Net cash provided by operating activities | 306,622 | | | 404,168 | |
Cash flows from investing activities | | | |
Acquisition of property and equipment | (5,284) | | | (1,791) | |
Leasehold improvements | (11,007) | | | (3,338) | |
| | | |
Proceeds from sale of investment securities | 5,164 | | | 12,813 | |
Purchase of investment securities | (49,337) | | | (33,820) | |
| | | |
Net cash used in investing activities | (60,464) | | | (26,136) | |
Cash flows from financing activities | | | |
Partnership distributions | (43,721) | | | (67,889) | |
Dividends paid | (210,306) | | | (203,471) | |
| | | |
Payment of debt issuance costs | (543) | | | — | |
Proceeds from issuance of notes payable | 90,000 | | | — | |
Principal payments on notes payable | (90,000) | | | — | |
Payment under the tax receivable agreements | (33,109) | | | (31,250) | |
Net proceeds from issuance of common stock | — | | | 46,928 | |
Payment of costs directly associated with the issuance of Class A common stock | — | | | (244) | |
Purchase of equity and subsidiary equity | — | | | (46,928) | |
Taxes paid related to employee net share settlement | (7,754) | | | (9,159) | |
| | | |
Capital contributions to consolidated investment products, net | 36,126 | | | 59,818 | |
Net cash used in financing activities | (259,307) | | | (252,195) | |
Net increase (decrease) in cash, cash equivalents, and restricted cash | ( |