Artisan Partners Asset Management Inc

Previous wording

We are an investment management firm focused on providing high-value added, active investment strategies in asset classes for sophisticated clients around the world. Effective March 31, 2024, the International Small-Mid team, managing the Non-U.S. Small-Mid Growth strategy, became its own autonomous investment franchise. As such, as of March 31, 2024, our 11 autonomous investment teams managed a total of 25 investment strategies across multiple asset classes and investment styles.

Current wording

We are an investment management firm focused on providing high-value added, active investment strategies in asset classes for sophisticated clients around the world. As of June 30, 2024, our 11 autonomous investment teams managed a total of 25 investment strategies across multiple asset classes and investment styles.

Previous wording

•During the three months ended March 31, 2024, our assets under management increased to $160.4 billion, an increase of $10.2 billion, or 7%, compared to $150.2 billion at December 31, 2023, primarily due to $10.8 billion of market appreciation, partially offset by net client cash outflows of $0.5 billion.

Current wording

•During the three months ended June 30, 2024, our assets under management declined to $158.9 billion, a decrease of $1.5 billion, or 1%, compared to $160.4 billion at March 31, 2024, primarily due to $1.6 billion of net client cash outflows, partially offset by market appreciation.

Previous wording

•Average assets under management for the three months ended March 31, 2024 were $154.2 billion, a 14% increase from the average of $135.4 billion for the three months ended March 31, 2023. Average assets under management for the three months ended March 31, 2024 increased 10% from the average of $140.3 billion for the three months ended December 31, 2023.

Current wording

•Average assets under management for the three months ended June 30, 2024 increased 3% from the average of $154.2 billion for the three months ended March 31, 2024 and 14% from the average of $139.3 billion for the three months ended June 30, 2023.

Previous wording

•We earned $264.4 million in revenue for the three months ended March 31, 2024, an increase of 13% from revenues of $234.5 million for the three months ended March 31, 2023. Performance fees of less than $0.1 million were recognized in each of the respective periods.

Current wording

•We earned $270.8 million in revenue for the three months ended June 30, 2024, an increase of 11% from revenues of $242.9 million for the three months ended June 30, 2023. Performance fees of less than $0.1 million were recognized in each of the respective periods.

Previous wording

•Our GAAP operating margin was 29.4% for the three months ended March 31, 2024, compared to 29.1% for the three months ended March 31, 2023. Adjusted operating margin was 30.9% for the three months ended March 31, 2024, compared to 29.9% for the three months ended March 31, 2023.

Current wording

•Our GAAP operating margin was 32.0% for the three months ended June 30, 2024, compared to 31.6% for the three months ended June 30, 2023. Adjusted operating margin was 32.2% for the three months ended June 30, 2024, compared to 31.9% for the three months ended June 30, 2023.

Previous wording

•We generated $0.84 of earnings per basic and diluted share and $0.76 of adjusted EPS.

Current wording

•We generated $0.80 of earnings per basic and diluted share and $0.82 of adjusted EPS.

Previous wording

•We declared and distributed dividends of $1.02 per share of Class A common stock during the three months ended March 31, 2024.

Current wording

•We declared and distributed dividends of $0.61 per share of Class A common stock during the three months ended June 30, 2024.

Previous wording

•We declared, effective April 23, 2024, a quarterly dividend with respect to the three months ended March 31, 2024, of $0.61 per share of Class A common stock.

Current wording

•We declared, effective July 23, 2024, a quarterly dividend with respect to the three months ended June 30, 2024, of $0.71 per share of Class A common stock.

Previous wording

During the three months ended March 31, 2024, certain limited partners of Holdings exchanged 992,454 common units (along with a corresponding number of shares of Class B or Class C common stock of APAM, as applicable) for 992,454 shares of Class A common stock. In connection with the exchanges, APAM received 992,454 GP units of Holdings.

Current wording

During the six months ended June 30, 2024, certain limited partners of Holdings exchanged 992,454 common units (along with a corresponding number of shares of Class B or Class C common stock of APAM, as applicable) for 992,454 shares of Class A common stock. In connection with the exchanges, APAM received 992,454 GP units of Holdings.

Previous wording

The following table presents the total returns of relevant market indices for the three months ended March 31, 2024 and 2023:

Current wording

The following table presents the total returns of relevant market indices for the three and six months ended June 30, 2024 and 2023:

Previous wording

Assets under management within our consolidated investment products, and investment advisory fees earned thereon, are excluded from our weighted average fee calculations and total revenues, since any such revenues are eliminated upon consolidation. Assets under management within Artisan Private Funds are included in the reported firmwide, separate accounts and other, and institutional assets under management figures reported below.

Current wording

Assets under management within our consolidated investment products, and investment advisory fees earned thereon, are excluded from our weighted average fee calculations and total revenues, since any such revenues are eliminated upon consolidation.

Previous wording

During the quarter, our AUM increased by $10.2 billion primarily due to $10.8 billion of market appreciation, partially offset by net client cash outflows of $0.5 billion. For the quarter, 11 of our 25 investment strategies had net outflows totaling $2.3 billion, which were partially offset by $1.8 billion of net inflows across the remaining 14 strategies.

Current wording

During the quarter, our AUM declined by $1.5 billion, primarily due to $1.6 billion of net client cash outflows, partially offset by $0.2 billion of market appreciation. For the quarter, 15 of our 25 investment strategies had net outflows totaling $3.1 billion, which were partially offset by $1.5 billion of net inflows across the remaining 10 strategies.

Previous wording

When we close or otherwise restrict the growth of a strategy, we typically continue to allow additional investments in the strategy by existing clients and certain related entities. We may also permit new investments by other eligible investors in our discretion. As a result, during a given period we may have net client cash inflows in a closed strategy. However, when a strategy is closed or its growth is restricted we expect there to be periods of net client cash outflows.

Current wording

When we close or otherwise restrict the growth of a strategy, we typically continue to allow additional investments in the strategy by existing clients and certain related entities. We may also permit new investments by other eligible investors in our discretion.

Previous wording

Essentially all of our revenues consist of fees earned from managing clients’ assets. Investment advisory fees, which are comprised of management fees and performance fees, fluctuate based on a number of factors, including the total value of our assets under management, the composition of assets under management among investment vehicles and our investment strategies, changes in the investment management fee rates on our products, the extent to which we enter into fee arrangements that differ from our standard fee schedules, which can be affected by custom and the competitive landscape in the relevant market and, for the accounts on which we earn performance fees, the investment performance of those accounts.

Current wording

Essentially all of our revenues consist of fees earned from managing clients’ assets. Investment advisory fees, which are comprised of management fees and performance fees (including incentive allocations), fluctuate based on a number of factors, including the total value of our assets under management, the composition of assets under management among investment vehicles and our investment strategies, changes in the investment management fee rates on our products, the extent to which we enter into fee arrangements that differ from our standard fee schedules, which can be affected by custom and the competitive landscape in the relevant market and, for the accounts on which we earn performance fees, the investment performance of those accounts.

Previous wording

Certain separate account clients pay us fees based on the performance of their accounts relative to agreed-upon benchmarks, which typically results in a lower base fee but allows us to earn higher fees if the performance we achieve for that client is superior to the performance of the agreed-upon benchmark. We may also receive performance fees or incentive allocations from Artisan Private Funds. Approximately 3% of our $160.4 billion of assets under management as of March 31, 2024 have performance fee billing arrangements. Performance fees of less than $0.1 million were recognized in each of the three-month periods ended March 31, 2024 and March 31, 2023.

Current wording

Certain separate account clients pay us fees based on the performance of their accounts relative to agreed-upon benchmarks, which typically results in a lower base fee but allows us to earn higher fees if the performance we achieve for that client is superior to the performance of the agreed-upon benchmark. We may also receive performance fees or incentive allocations from Artisan Private Funds. Approximately 2% of our $158.9 billion of assets under management as of June 30, 2024 have performance fee billing arrangements. Performance fees of less than $0.1 million were recognized in each of the three-month periods ended June 30, 2024 and June 30, 2023.

Previous wording

The increase in revenues of $29.9 million, or 13%, for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, was driven primarily by an $18.8 billion, or 14% increase in our average assets under management. The weighted average investment management fee, which excludes performance fees, was 69.1 basis points for the three months ended March 31, 2024, compared to 70.4 basis points for the three months ended March 31, 2023. The decrease in the weighted average investment management fee was predominantly due to mix and the tiered billing structure within many of our investment management agreements with clients, wherein the fee rate decreases upon the achievement of specified thresholds of assets under management.

Current wording

The increase in revenues of $27.9 million, or 11%, for the three months ended June 30, 2024, compared to the three months ended June 30, 2023, was driven primarily by a $19.3 billion, or 14% increase in our average assets under management. The weighted average investment management fee, which excludes performance fees, was 68.8 basis points for the three months ended June 30, 2024, compared to 70.1 basis points for the three months ended June 30, 2023. The decrease in the weighted average investment management fee was predominantly due to changes in strategy mix.

Previous wording

Operating expenses increased $20.5 million for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, as a result of an $18.4 million increase in compensation and benefits and a $2.1 million increase in other operating expenses.

Current wording

Operating expenses increased $18.0 million for the three months ended June 30, 2024, compared to the three months ended June 30, 2023, as a result of a $16.4 million increase in compensation and benefits and a $1.6 million increase in other operating expenses.

Previous wording

The increase in salaries, incentive compensation and benefits is primarily due to a $10.5 million increase in incentive compensation largely due to higher revenues in the three months ended March 31, 2024. A 4% increase in full-time associates led to increases in salaries and benefit related expenses. Long-term incentive compensation costs also increased $4.8 million as a result of the market valuation impact on compensation plans of $2.2 million and $2.1 million of additional expense from the new retirement acceleration feature on awards granted in the March 2024 quarter.

Current wording

The increase in salaries, incentive compensation and benefits is primarily due to a $10.9 million increase in incentive compensation driven by higher revenues in the three months ended June 30, 2024. Long-term incentive compensation costs also increased $3.3 million, which includes $1.9 million of additional expense resulting from the retirement acceleration feature on 2024 grants.

Previous wording

Total compensation and benefits was 57% and 56% of our revenues for the three months ended March 31, 2024 and 2023, respectively.

Current wording

Total compensation and benefits was 54% of our revenues for the three months ended June 30, 2024 and 2023.

Previous wording

Net investment gain (loss) of consolidated investment products, net investment gain (loss) on nonconsolidated seed investments, and net investment gain (loss) on franchise capital investments increased $7.6 million in the aggregate for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, predominately due to market conditions. In addition, the increase in interest income on cash and cash equivalents and other increased $1.3 million due to higher yields.

Current wording

Net investment gain (loss) of consolidated investment products, net investment gain (loss) on nonconsolidated seed investments, and net investment gain (loss) on franchise capital investments decreased $13.0 million in the aggregate for the three months ended June 30, 2024, compared to the three months ended June 30, 2023, predominately due to market conditions. In addition, the increase in interest income on cash and cash equivalents and other increased $0.9 million due to higher yields.

Previous wording

The provision for income taxes primarily represents APAM’s U.S. federal, state and local income taxes on its allocable portion of Holdings’ income, as well as foreign income taxes payable by Holdings’ subsidiaries. APAM’s effective income tax rate for the three months ended March 31, 2024 and 2023 was 20.2% and 20.6%, respectively. Several factors contribute to the effective tax rate, including a rate benefit attributable to the fact that approximately 14% and 16% of Holdings’ full year projected taxable earnings were not subject to corporate-level taxes for the three months ended March 31, 2024 and 2023, respectively. Thus, income before income taxes includes amounts that are attributable to noncontrolling interests and not taxable to APAM and its subsidiaries, which reduces the effective tax rate. As APAM’s equity ownership in Holdings increases, the effective tax rate will likewise increase as more income will be subject to corporate-level taxes. The effective tax rate was favorably impacted in both periods due to tax deductible dividends paid on unvested restricted share-based awards.

Current wording

The provision for income taxes primarily represents APAM’s U.S. federal, state and local income taxes on its allocable portion of Holdings’ income, as well as foreign income taxes payable by Holdings’ subsidiaries. APAM’s effective income tax rate for the three months ended June 30, 2024 and 2023 was 20.8% and 20.0%, respectively. Several factors contribute to the effective tax rate, including a rate benefit attributable to the fact that approximately 14% and 16% of Holdings’ full year projected taxable earnings were not subject to corporate-level taxes for the three months ended June 30, 2024 and 2023, respectively. Thus, income before income taxes includes amounts that are attributable to noncontrolling interests and not taxable to APAM and its subsidiaries, which reduces the effective tax rate. As APAM’s equity ownership in Holdings increases, the effective tax rate will likewise increase as more income will be subject to corporate-level taxes. The effective tax rate was favorably impacted in both periods due to tax deductible dividends paid on unvested restricted share-based awards.

Previous wording

Weighted average basic and diluted shares of Class A common stock outstanding were higher for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, as a result of Holdings' unit exchanges and equity award grants. See Note 12, “Earnings Per Share” in the Notes to the unaudited consolidated financial statements for discussion of earnings per share.

Current wording

Weighted average basic and diluted shares of Class A common stock outstanding were higher for the three months ended June 30, 2024, compared to the three months ended June 30, 2023, as a result of equity award grants. See Note 12, “Earnings Per Share” in the Notes to the unaudited consolidated financial statements for discussion of earnings per share.

Previous wording

During the first quarter of 2024, the board of directors of APAM approved the grant of long-term incentive awards with a grant date fair value of $59.2 million consisting of $20.8 million of restricted share-based awards and $38.4 million of franchise capital awards, to certain employees pursuant to the Company’s 2023 Omnibus Incentive Compensation Plan. Long-term incentive compensation expense for all awards is expected to range from $17 million to $18 million for the remaining quarters in fiscal 2024, exclusive of the impact of investment returns on franchise capital awards.

Current wording

During the first quarter of 2024, the Company’s board of directors approved the grant of long-term incentive awards with a grant date fair value of $59.2 million consisting of $20.8 million of restricted share-based awards and $38.4 million of franchise capital awards, to certain employees pursuant to the Company’s 2023 Omnibus Incentive Compensation Plan. Long-term incentive compensation award expense for all awards is expected to be approximately $16 million for the remaining quarters in fiscal 2024, exclusive of the impact of investment returns on franchise capital awards.

Previous wording

We manage our cash balances in order to fund our day-to-day operations. We mitigate concentration risk through the diversification of financial institutions holding daily operating cash balances and by investing excess operating cash in various money market funds. $160.4 million of our cash and cash equivalents balance was invested in money market funds as of March 31, 2024.

Current wording

We manage our cash balances in order to fund our day-to-day operations. We mitigate concentration risk through the diversification of financial institutions holding daily operating cash balances and by investing excess operating cash in various money market funds. $176.6 million of our cash and cash equivalents balance was invested in money market funds as of June 30, 2024.

Previous wording

We utilize cash to make seed investments in Artisan-sponsored investment products to support the development of new investment strategies and vehicles. As of March 31, 2024, the balance of all seed investments, including investments in consolidated investment products, was $155.5 million. Subject to certain restrictions on the timing of redemptions, the seed investments are generally redeemable at our discretion. We monitor for opportunities to redeem existing seed investments as sufficient scale in those strategies and vehicles is achieved.

Current wording

We utilize cash to make seed investments in Artisan-sponsored investment products to support the development of new investment strategies and vehicles. As of June 30, 2024, the balance of all seed investments, including investments in consolidated investment products, was $154.0 million. Subject to certain restrictions on the timing of redemptions, the seed investments are generally redeemable at our discretion. We monitor for opportunities to redeem existing seed investments as sufficient scale in those strategies and vehicles is achieved.

Previous wording

During the three months ended March 31, 2024, we also made investments of $38.4 million related to funded long-term incentive compensation plans. As of March 31, 2024, the value of investments held in connection with funded long-term incentive compensation plans was $152.5 million.

Current wording

During the six months ended June 30, 2024, we also made investments of $38.4 million related to funded long-term incentive compensation plans. As of June 30, 2024, the value of investments held in connection with funded long-term incentive compensation plans was $145.9 million.

Previous wording

We have $200 million in unsecured notes outstanding and a $100 million revolving credit facility with a five-year term ending in August 2027. The notes are comprised of three series, Series D, Series E and Series F, each with a balloon payment at maturity. The $100 million revolving credit facility was unused as of and for the three months ended March 31, 2024.

Current wording

We have $200 million in unsecured notes outstanding and a $100 million revolving credit facility with a five-year term ending in August 2027. The notes are comprised of three series, Series D, Series E and Series F, each with a balloon payment at maturity. The $100 million revolving credit facility was unused as of and for the six months ended June 30, 2024.

Previous wording

Artisan Partners Holdings’ distributions, including distributions to APAM for the three months ended March 31, 2024 and 2023, were as follows:

Current wording

Artisan Partners Holdings’ distributions, including distributions to APAM for the three and six months ended June 30, 2024 and 2023, were as follows:

Previous wording

On April 23, 2024, we, acting as the general partner of Artisan Partners Holdings, declared a distribution of $30.2 million, payable by Artisan Partners Holdings to holders of its partnership units, including APAM.

Current wording

On July 23, 2024, we, acting as the general partner of Artisan Partners Holdings, declared a distribution of $38.6 million, payable by Artisan Partners Holdings to holders of its partnership units, including APAM.

Previous wording

APAM declared and paid the following dividends per share during the three months ended March 31, 2024 and 2023:

Current wording

APAM declared and paid the following dividends per share during the three and six months ended June 30, 2024 and 2023:

Previous wording

Our board of directors declared, effective April 23, 2024, a variable quarterly dividend of $0.61 per share of Class A common stock with respect to the March quarter of 2024, payable on May 31, 2024 to stockholders of record as of the close of business on May 17, 2024. The variable quarterly dividend represents approximately 80% of the cash generated in the March quarter of 2024 and a pro-rata portion of 2024 tax savings related to our tax receivable agreements.

Current wording

Our board of directors declared, effective July 23, 2024, a variable quarterly dividend of $0.71 per share of Class A common stock with respect to the June quarter of 2024, payable on August 30, 2024 to stockholders of record as of the close of business on August 16, 2024. The variable quarterly dividend represents approximately 80% of the cash generated in the June quarter of 2024 and a pro-rata portion of 2024 tax savings related to our tax receivable agreements.

Previous wording

In addition to funding our normal operations, we will be required to fund amounts payable under the TRAs that we entered into in connection with the IPO, which resulted in the recognition of a $375.6 million liability as of March 31, 2024. The liability generally represents 85% of the tax benefits APAM expects to realize as a result of the merger of an entity into APAM as part of the IPO Reorganization, our purchase of partnership units from limited partners of Holdings and the exchange of partnership units (for shares of Class A common stock or other consideration). The estimated liability assumes no material changes in the relevant tax law and that APAM earns sufficient taxable income to realize all tax benefits subject to the TRAs. An increase or decrease in future tax rates will increase or decrease, respectively, the expected tax benefits APAM would realize and the amounts payable under the TRAs. Changes in the estimate of expected tax benefits APAM would realize and the amounts payable under the TRAs as a result of change in tax rates have been and will be recorded in net income.

Current wording

In addition to funding our normal operations, we will be required to fund amounts payable under the TRAs that we entered into in connection with the IPO, which resulted in the recognition of a $347.7 million liability as of June 30, 2024. The liability generally represents 85% of the tax benefits APAM expects to realize as a result of the merger of an entity into APAM as part of the IPO Reorganization, our purchase of partnership units from limited partners of Holdings and the exchange of partnership units (for shares of Class A common stock or other consideration). The estimated liability assumes no material changes in the relevant tax law and that APAM earns sufficient taxable income to realize all tax benefits subject to the TRAs. An increase or decrease in future tax rates will increase or decrease, respectively, the expected tax benefits APAM would realize and the amounts payable under the TRAs. Changes in the estimate of expected tax benefits APAM would realize and the amounts payable under the TRAs as a result of change in tax rates have been and will be recorded in net income.

Previous wording

The actual increase in tax basis, as well as the amount and timing of any payments under these agreements, will vary depending upon a number of factors, including the timing of sales or exchanges by the holders of limited partnership units, the price of the Class A common stock at the time of such sales or exchanges, whether such sales or exchanges are taxable, the amount and timing of the taxable income APAM generates in the future and the tax rate then applicable and the portion of APAM’s payments under the TRAs constituting imputed interest or depreciable basis or amortizable basis. In certain cases, payments under the TRAs may be accelerated and/or significantly exceed the actual benefits we realize in respect of the tax attributes subject to the TRAs. In such cases, we intend to fund those payments with cash on hand, although we may have to borrow funds depending on the amount and timing of the payments. We did not make payments related to the TRA during the three months ended March 31, 2024. In fiscal 2024, we expect to make TRA payments totaling approximately $37.2 million, $27.9 million of which was paid during April 2024.

Current wording

The actual increase in tax basis, as well as the amount and timing of any payments under these agreements, will vary depending upon a number of factors, including the timing of sales or exchanges by the holders of limited partnership units, the price of the Class A common stock at the time of such sales or exchanges, whether such sales or exchanges are taxable, the amount and timing of the taxable income APAM generates in the future and the tax rate then applicable and the portion of APAM’s payments under the TRAs constituting imputed interest or depreciable basis or amortizable basis. In certain cases, payments under the TRAs may be accelerated and/or significantly exceed the actual benefits we realize in respect of the tax attributes subject to the TRAs. In such cases, we intend to fund those payments with cash on hand, although we may have to borrow funds depending on the amount and timing of the payments. In fiscal 2024, we expect to make TRA payments totaling approximately $37.2 million, $27.9 million of which was paid during the quarter ended June 30, 2024.

Previous wording

Net cash provided by operating activities increased $26.1 million for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily due to the $8.6 million increase in operating income (excluding share based compensation expense), the $6.7 million net increase from changes in working capital, and the $8.8 million net increase as a result of activity within the consolidated investment products.

Current wording

Net cash provided by operating activities increased $39.8 million for the six months ended June 30, 2024, compared to the six months ended June 30, 2023, primarily due to the $10.0 million increase in operating income (excluding share based compensation expense), the $38.1 million net increase as a result of activity within the consolidated investment products, and the $8.5 million net decrease from changes in working capital.

Previous wording

Investing activities consist primarily of acquiring property and equipment, leasehold improvements and the purchase and sale of investment securities. Net cash used in investing activities decreased $7.1 million for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily due to a decrease in the purchase of investment securities relating to franchise capital awards allocated to non-consolidated investment products, a decrease in capital expenditures, and an increase in redemptions of seed investments and franchise capital investments in the quarter ended March 31, 2024, compared to March 31, 2023.

Current wording

Investing activities consist primarily of acquiring property and equipment, leasehold improvements and the purchase and sale of investment securities. Net cash used in investing activities decreased $10.3 million for the six months ended June 30, 2024, compared to the six months ended June 30, 2023, primarily due to a decrease in the purchase of investment securities relating to franchise capital awards allocated to non-consolidated investment products, a decrease in capital expenditures, and an increase in redemptions of seed investments and franchise capital investments in the six months ended June 30, 2024 compared to the six months ended June 30, 2023 .

Previous wording

Financing activities consist primarily of partnership distributions to non-controlling interests, dividend payments to holders of our Class A common stock, proceeds from the issuance of Class A common stock in follow-on offerings, payments to purchase Holdings partnership units, and payments of amounts owed under the tax receivable agreements. Net cash used in financing activities increased $8.9 million for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily due to a $9.2 million increase in dividends paid, partially offset by a $1.1 million increase in contributions from noncontrolling interests in our consolidated investment products.

Current wording

Financing activities consist primarily of partnership distributions to non-controlling interests, dividend payments to holders of our Class A common stock, payments to purchase Holdings partnership units, and payments of amounts owed under the tax receivable agreements. Net cash used in financing activities increased $46.1 million for the six months ended June 30, 2024, compared to the six months ended June 30, 2023, primarily due to a $17.6 million increase in dividends paid as well as a $24.9 million decrease in contributions from noncontrolling interests in our consolidated investment products.

Previous wording

During the three months ended March 31, 2024, the Company determined that it no longer had a controlling financial interest in an investment product that was previously consolidated. The deconsolidation of the investment product resulted in a $4.0 million decrease in cash, cash equivalents and restricted cash.

Current wording

During the six months ended June 30, 2024, the Company determined that it no longer had a controlling financial interest in an investment product that was previously consolidated. The deconsolidation of the investment product resulted in a $4.0 million decrease in cash, cash equivalents and restricted cash.

Previous wording

As previously discussed in this report, the TRA liability increased from $364.0 million at December 31, 2023 to $375.6 million at March 31, 2024. Amounts payable under the TRAs will increase upon exchanges of Holdings units for our Class A common stock or sales of Holdings units to us, with the increase representing 85% of the estimated future tax benefits, if any, resulting from such exchanges or sales and decrease when payments are made. The actual amount and timing of payments associated with our existing payable under the TRAs or future exchanges or sales, and associated tax benefits, will vary depending upon a number of factors as described under “Liquidity and Capital Resources.” As a result, the timing of payments by period is currently unknown. We did not make payments related to the TRAs during the three months ended March 31, 2024. Overall in fiscal 2024, we expect to make payments of approximately $37.2 million, of which $27.9 million was paid during April 2024.

Current wording

As previously discussed in this report, the TRA liability decreased from $364.0 million at December 31, 2023 to $347.7 million at June 30, 2024. Amounts payable under the TRAs will increase upon exchanges of Holdings units for our Class A common stock or sales of Holdings units to us, with the increase representing 85% of the estimated future tax benefits, if any, resulting from such exchanges or sales and decrease when payments are made. The actual amount and timing of payments associated with our existing payable under the TRAs or future exchanges or sales, and associated tax benefits, will vary depending upon a number of factors as described under “Liquidity and Capital Resources.” As a result, the timing of payments by period is currently unknown. Overall in fiscal 2024, we expect to make payments of approximately $37.2 million, of which $27.9 million was paid during the quarter ended June 30, 2024.