Artisan Partners Asset Management Inc.

Previous wording

We are an investment management firm focused on providing high-value added, active investment strategies for sophisticated clients around the world. As of June 30, 2025, our 11 autonomous investment teams managed a total of 26 investment strategies across multiple asset classes and investment styles.

Current wording

We are a global multi-asset investment platform focused on providing a broad range of high-value added investment strategies in growing asset classes to sophisticated clients around the world. As of September 30, 2025, our 11 autonomous investment teams managed a total of 26 investment strategies across multiple asset classes and investment styles.

Previous wording

We offer our investment management capabilities primarily to sophisticated investors that operate with institutional decision-making processes and longer-term investment horizons. We employ knowledgeable and investment focused relationship managers who are directly aligned with our investment teams, and we pair them with regional and distribution channel experts. We provide access to our investment strategies through multiple investment vehicles, including separate accounts and different types of pooled vehicles. As of June 30, 2025, approximately 74% of our assets under management (AUM) were managed for clients and investors domiciled in the U.S. and 26% of our AUM were managed for clients and investors domiciled outside of the U.S.

Current wording

We offer our investment management capabilities primarily to sophisticated investors that operate with institutional decision-making processes and longer-term investment horizons. We employ knowledgeable and investment focused relationship managers who are directly aligned with our investment teams, and we pair them with regional and distribution channel experts. We provide access to our investment strategies through multiple investment vehicles, including separate accounts and different types of pooled vehicles. As of September 30, 2025, approximately 73% of our assets under management (AUM) were managed for clients and investors domiciled in the U.S. and 27% of our AUM were managed for clients and investors domiciled outside of the U.S.

Previous wording

•During the three months ended June 30, 2025, our AUM increased to $175.5 billion, an increase of $13.1 billion, or 8%, compared to $162.4 billion at March 31, 2025, primarily due to $15.2 billion of market appreciation, partially offset by $1.9 billion of net client cash outflows and $0.2 billion of Artisan Funds’ distributions not reinvested.

Current wording

•During the three months ended September 30, 2025, our AUM increased to $181.3 billion, an increase of $5.8 billion, or 3%, compared to $175.5 billion at June 30, 2025, primarily due to $8.3 billion of market appreciation, partially offset by $2.3 billion of net client cash outflows and $0.2 billion of Artisan Funds’ distributions not reinvested.

Previous wording

•Average AUM for the three months ended June 30, 2025 was $166.8 billion, an increase of less than 1% from the average of $166.7 billion for the three months ended March 31, 2025, and an increase of 5% from the average of $158.6 billion for the three months ended June 30, 2024.

Current wording

•Average AUM for the three months ended September 30, 2025 was $177.4 billion, an increase of 6% from the average of $166.8 billion for the three months ended June 30, 2025, and an increase of 9% from the average of $162.8 billion for the three months ended September 30, 2024.

Previous wording

•We earned $282.8 million in revenue for the three months ended June 30, 2025, an increase of 4% from revenues of $270.8 million for the three months ended June 30, 2024.

Current wording

•We earned $301.3 million in revenue for the three months ended September 30, 2025, an increase of 8% from revenues of $279.6 million for the three months ended September 30, 2024.

Previous wording

•Our GAAP operating margin was 28.2% for the three months ended June 30, 2025, compared to 32.0% for the three months ended June 30, 2024. Adjusted operating margin was 31.7% for the three months ended June 30, 2025, compared to 32.2% for the three months ended June 30, 2024.

Current wording

•Our GAAP operating margin was 33.8% for the three months ended September 30, 2025, compared to 33.3% for the three months ended September 30, 2024. Adjusted operating margin was 36.2% for the three months ended September 30, 2025, compared to 35.0% for the three months ended September 30, 2024.

Previous wording

•We generated $0.94 of earnings per basic and diluted share and $0.83 of adjusted EPS.

Current wording

•We generated $0.93 of earnings per basic and diluted share and $1.02 of adjusted EPS.

Previous wording

•We declared and distributed dividends of $0.68 per share of Class A common stock during the three months ended June 30, 2025.

Current wording

•We declared and distributed dividends of $0.73 per share of Class A common stock during the three months ended September 30, 2025.

Previous wording

•We declared, effective July 29, 2025, a quarterly dividend with respect to the three months ended June 30, 2025, of $0.73 per share of Class A common stock.

Current wording

•We declared, effective October 28, 2025, a quarterly dividend with respect to the three months ended September 30, 2025, of $0.88 per share of Class A common stock.

Previous wording

During the six months ended June 30, 2025, certain limited partners of Holdings exchanged 51,500 common units (along with a corresponding number of shares of Class B or Class C common stock of APAM, as applicable) for 51,500 shares of Class A common stock. In connection with the exchanges, APAM received 51,500 GP units of Holdings increasing its ownership interest in Holdings.

Current wording

During the nine months ended September 30, 2025, certain limited partners of Holdings exchanged 51,500 common units (along with a corresponding number of shares of Class B or Class C common stock of APAM, as applicable) for 51,500 shares of Class A common stock. In connection with the exchanges, APAM received 51,500 GP units of Holdings increasing its ownership interest in Holdings.

Previous wording

The following table presents the total returns of relevant market indices for the three and six months ended June 30, 2025 and 2024:

Current wording

The following table presents the total returns of relevant market indices for the three and nine months ended September 30, 2025 and 2024:

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 $175.5 billion of AUM as of June 30, 2025 have performance fee billing arrangements.

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 3% of our $181.3 billion of AUM as of September 30, 2025 have performance fee billing arrangements.

Previous wording

The increase in revenues of $12.0 million, or 4%, for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, was driven primarily by a $8.2 billion, or 5% increase in our average AUM. The weighted average investment management fee, which excludes performance fees, was 68.1 basis points for the three months ended June 30, 2025, compared to 68.8 basis points for the three months ended June 30, 2024. The decrease in the weighted average investment management fee was due in part to amendments of certain investment management agreements as well as an increase in the AUM weighting of fixed income strategies with lower fee rates.

Current wording

The increase in revenues of $21.7 million, or 8%, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, was driven primarily by a $14.6 billion, or 9% increase in our average AUM. The weighted average investment management fee, which excludes performance fees, was 67.5 basis points for the three months ended September 30, 2025, compared to 68.5 basis points for the three months ended September 30, 2024. The decrease in the weighted average investment management fee was due in part to amendments of certain investment management agreements as well as an increase in the AUM weighting of credit strategies with lower fee rates.

Previous wording

The increase in compensation and benefits is primarily driven by an increase in long-term incentive compensation costs of $11.9 million, which includes a $9.3 million increase as a result of market valuation changes. Salaries, short-term incentive compensation and benefits increased 5% due to a $3.7 million increase in incentive compensation driven by higher revenues and a $2.3 million increase in employee separation costs, primarily those associated with the winding down of our China Post Venture strategy as of June 30, 2025.

Current wording

The increase in compensation and benefits is primarily driven by a $7.3 million increase in short-term incentive compensation driven by higher revenues and a $6.8 million increase in long-term incentive compensation. The long-term incentive compensation increase was comprised of a $4.1 million increase from higher grant date value amortization of the awards as a result of the higher 2025 grant value as compared to the 2020 grant that was fully amortized in 2025 as well as a $2.7 million increase from market valuation changes.

Previous wording

Total compensation and benefits was 59% and 54% of our revenues for the three months ended June 30, 2025 and 2024, respectively.

Current wording

Total compensation and benefits was 54% and 53% of our revenues for the three months ended September 30, 2025 and 2024, respectively.

Previous wording

Other operating expenses decreased $0.2 million for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, primarily due to a decrease in general and administrative costs.

Current wording

Other operating expenses decreased $1.2 million for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, primarily due to a decrease in general and administrative costs, most notably decreases in travel and entertainment costs and professional fees.

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 $37.8 million in the aggregate for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, predominately due to market conditions.

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 $14.8 million in the aggregate for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, predominately due to market conditions.

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 June 30, 2025 and 2024 was 20.6% and 20.8%, respectively. Several factors contribute to the effective tax rate, including a rate benefit attributable to the fact that approximately 14% of Holdings’ full year projected taxable earnings were not subject to corporate-level taxes for the three months ended June 30, 2025 and 2024. 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 and excess income tax benefits from the vesting of 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 September 30, 2025 and 2024 was 30.0% and 19.1%, respectively. Several factors contribute to the effective tax rate, including a rate benefit attributable to the fact that approximately 14% of Holdings’ full year projected taxable earnings were not subject to corporate-level taxes for the three months ended September 30, 2025 and 2024. 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 in the three months ended September 30, 2025 included a $10.7 million charge associated with the enactment of the OBBBA, which increased the effective tax rate by 8.6%. The effective tax rate was favorably impacted in both periods due to tax deductible dividends paid on unvested restricted share-based awards.

Previous wording

As a result of the changes to the IRC Section 162(m) executive compensation deduction limitation rules within the OBBBA, we estimate that our GAAP and adjusted effective tax rates will increase 1% to 3% beginning in 2027 compared to estimates before the legislation was enacted.

Current wording

We estimate that our GAAP and adjusted effective tax rates will increase 1% to 3% beginning in 2027 as a result of the compensation deduction limitation rules within the OBBBA.

Previous wording

The increase in revenues of $24.7 million, or 5%, for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, was driven primarily by a $10.4 billion, or 7%, increase in our average AUM. The weighted average management fee, which excludes performance fees, was 67.8 basis points for the six months ended June 30, 2025, compared to 69.0 basis points for the six months ended June 30, 2024. The decrease in the weighted average investment management fee was due in part to amendments of certain investment management agreements as well as an increase in the AUM weighting of fixed income strategies with lower fee rates.

Current wording

The increase in revenues of $46.4 million, or 6%, for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, was driven primarily by a $11.8 billion, or 7%, increase in our average AUM. The weighted average management fee, which excludes performance fees, was 67.7 basis points for the nine months ended September 30, 2025, compared to 68.8 basis points for the nine months ended September 30, 2024. The decrease in the weighted average investment management fee was due in part to amendments of certain investment management agreements as well as an increase in the AUM weighting of credit strategies with lower fee rates.

Previous wording

The increase in compensation and benefits was primarily due to a $12.3 million increase in long-term incentive compensation which includes a $7.8 million increase as a result of market valuation changes. Salaries, short-term incentive compensation and benefits increased 5% due to a $7.2 million increase in incentive compensation driven by higher revenues, and a $2.1 million increase in employee separation costs, primarily associated with the winding down of our China Post-Venture strategy as of June 30, 2025.

Current wording

The long-term incentive compensation increase was comprised of a $10.5 million increase from market valuation changes as well as a $8.6 million increase from higher grant date value amortization of the awards as a result of the higher 2025 grant value as compared to the 2020 grant that was fully amortized in 2025. Salaries, short-term incentive compensation and benefits increased 5% due to a $14.5 million increase in incentive compensation driven by higher revenues, and a $2.0 million increase in employee separation costs, primarily associated with the winding down of our China Post-Venture strategy as of June 30, 2025.

Previous wording

Total compensation and benefits was 57% and 55% of our revenues for the six months ended June 30, 2025, and 2024, respectively.

Current wording

Total compensation and benefits was 56% and 55% of our revenues for the nine months ended September 30, 2025, and 2024, respectively.

Previous wording

Other operating expenses decreased $1.6 million for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, primarily due to a decrease in general and administrative costs.

Current wording

Other operating expenses decreased $2.8 million for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, primarily due to a decrease in general and administrative costs, most notably decreases in travel and entertainment costs and professional fees.

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 $17.4 million in the aggregate for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, predominately due to market conditions.

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 increased $2.6 million in the aggregate for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, predominately due to market conditions.

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 was 20.6% and 20.5% for the six months ended June 30, 2025 and 2024, respectively.

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 was 24.0% and 19.9% for the nine months ended September 30, 2025 and 2024, respectively.

Previous wording

Several factors contribute to the effective tax rate, including a rate benefit attributable to the fact that approximately 14% of Holdings’ full year projected taxable earnings were not subject to corporate-level taxes for the six months ended June 30, 2025 and 2024. 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 and excess income tax benefits from the vesting of restricted share-based awards.

Current wording

Several factors contribute to the effective tax rate, including a rate benefit attributable to the fact that approximately 14% of Holdings’ full year projected taxable earnings were not subject to corporate-level taxes for the nine months ended September 30, 2025 and 2024. 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 for the nine months ended September 30, 2025 included a $10.7 million charge from the enactment of the OBBBA, which increased the effective tax rate by 3.1%. The effective tax rate was favorably impacted in both periods due to tax deductible dividends paid on unvested restricted share-based awards and excess income tax benefits from the vesting of restricted share-based awards.

Previous wording

Weighted average basic and diluted shares of Class A common stock outstanding were higher for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, 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 further discussion of earnings per share.

Current wording

Weighted average basic and diluted shares of Class A common stock outstanding were higher for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, 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 further discussion of earnings per share.

Previous wording

Our management uses non-GAAP measures (referred to as “adjusted” measures) of net income to evaluate the profitability and efficiency of the underlying operations of our business and as a factor when considering net income available for distributions and dividends. These adjusted measures remove the impact of (1) net gain (loss) on the tax receivable agreements (if any), (2) compensation expense (reversal) related to market valuation changes in compensation plans, (3) net investment gain (loss) of investment products, and (4) non-recurring expenses. These adjustments also remove the non-operational complexities of our structure by adding back noncontrolling interests and assuming all income of Artisan Partners Holdings is allocated to APAM. Management believes these non-GAAP measures provide more meaningful information to analyze our profitability and efficiency between periods and over time. We have included these non-GAAP measures to provide investors with the same financial metrics used by management to manage the Company.

Current wording

Our management uses non-GAAP measures (referred to as “adjusted” measures) of net income to evaluate the profitability and efficiency of the underlying operations of our business and as a factor when considering net income available for distributions and dividends. These adjusted measures remove the impact of (1) net gain (loss) on the tax receivable agreements (if any), (2) compensation expense (reversal) related to market valuation changes in compensation plans, (3) net investment gain (loss) of investment products, (4) non-recurring expenses, and (5) the adjustment to deferred taxes as a result of the OBBBA enactment. These adjusted measures also remove the non-operational complexities of our structure by adding back noncontrolling interests and assuming all income of Artisan Partners Holdings is allocated to APAM. Management believes these non-GAAP measures provide more meaningful information to analyze our profitability and efficiency between periods and over time. We have included these non-GAAP measures to provide investors with the same financial metrics used by management to manage the Company.

Previous wording

•Adjusted net income represents net income excluding the impact of (1) net gain (loss) on the tax receivable agreements (if any), (2) compensation expense (reversal) related to market valuation changes in compensation plans, (3) net investment gain (loss) of investment products, and (4) non-recurring expenses. Adjusted net income also reflects income taxes assuming the vesting of all unvested Class A share-based awards and as if all outstanding limited partnership units of Artisan Partners Holdings had been exchanged for Class A common stock of APAM on a one-for-one basis. Assuming full vesting and exchange, all income of Artisan Partners Holdings is treated as if it were allocated to APAM, and the adjusted provision for income taxes represents an estimate of income tax expense at an effective rate reflecting APAM’s current federal, state and local income statutory tax rates. The adjusted tax rate was 24.7% for all periods presented.

Current wording

•Adjusted net income represents net income excluding the impact of (1) net gain (loss) on the tax receivable agreements (if any), (2) compensation expense (reversal) related to market valuation changes in compensation plans, (3) net investment gain (loss) of investment products, (4) non-recurring expenses, and (5) the adjustment to deferred taxes as a result of the OBBBA enactment. Adjusted net income also reflects income taxes assuming the vesting of all unvested Class A share-based awards and as if all outstanding limited partnership units of Artisan Partners Holdings had been exchanged for Class A common stock of APAM on a one-for-one basis. Assuming full vesting and exchange, all income of Artisan Partners Holdings is treated as if it were allocated to APAM, and the adjusted provision for income taxes represents an estimate of income tax expense at an effective rate reflecting APAM’s current federal, state and local income statutory tax rates. The adjusted tax rate was 24.7% for all periods presented.

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. $216.9 million of our cash and cash equivalents balance was invested in money market funds as of June 30, 2025.

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. $274.4 million of our cash and cash equivalents balance was invested in money market funds as of September 30, 2025.

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 June 30, 2025, the balance of all seed investments, including investments in consolidated investment products, was $139.0 million. The seed investments are generally redeemable at our discretion, though subject to certain monthly or quarterly timing restrictions for the Artisan Private Funds. We monitor for opportunities to redeem our seed investments as sufficient scale in each investment strategy and vehicle 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 September 30, 2025, the balance of all seed investments, including investments in consolidated investment products, was $142.4 million. The seed investments are generally redeemable at our discretion, though subject to certain monthly or quarterly timing restrictions for the Artisan Private Funds. We monitor for opportunities to redeem our seed investments as sufficient scale in each investment strategy, vehicle and class, as applicable, is achieved.

Previous wording

During the six months ended June 30, 2025, we also made investments of $46.8 million related to funded long-term incentive compensation plans. As of June 30, 2025, the value of investments held in connection with funded long-term incentive compensation plans was $212.6 million.

Current wording

During the nine months ended September 30, 2025, we also made investments of $46.8 million related to funded long-term incentive compensation plans. As of September 30, 2025, the value of investments held in connection with funded long-term incentive compensation plans was $222.2 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 six months ended June 30, 2025.

Current wording

We have $190 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 E, Series F and Series G, each with a balloon payment at maturity. The $100 million revolving credit facility was unused as of and for the nine months ended September 30, 2025.

Previous wording

Artisan Partners Holdings’ distributions, including distributions to APAM for the three and six months ended June 30, 2025 and 2024, were as follows:

Current wording

Artisan Partners Holdings’ distributions, including distributions to APAM for the three and nine months ended September 30, 2025 and 2024, were as follows:

Previous wording

On July 29, 2025, we, acting as the general partner of Artisan Partners Holdings, declared a distribution of $45.1 million, payable by Artisan Partners Holdings to holders of its partnership units, including APAM.

Current wording

On October 28, 2025, we, acting as the general partner of Artisan Partners Holdings, declared a distribution of $27.5 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 and six months ended June 30, 2025 and 2024:

Current wording

APAM declared and paid the following dividends per share during the three and nine months ended September 30, 2025 and 2024:

Previous wording

Our board of directors declared, effective July 29, 2025, a variable quarterly dividend of $0.73 per share of Class A common stock with respect to the June quarter of 2025, payable on August 29, 2025 to stockholders of record as of the close of business on August 15, 2025. The variable quarterly dividend represents approximately 80% of the cash generated in the June quarter of 2025 and a pro-rata portion of 2025 tax savings related to our tax receivable agreements.

Current wording

Our board of directors declared, effective October 28, 2025, a variable quarterly dividend of $0.88 per share of Class A common stock with respect to the September quarter of 2025, payable on November 28, 2025 to stockholders of record as of the close of business on November 14, 2025. The variable quarterly dividend represents approximately 80% of the cash generated in the September quarter of 2025 and a pro-rata portion of 2025 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 $312.8 million liability as of June 30, 2025. 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 $303.1 million liability as of September 30, 2025. 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. In fiscal 2025, we expect to make TRA payments totaling approximately $38.9 million, $29.2 million of which was paid during the quarter ended June 30, 2025.

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. During the nine months ended September 30, 2025, we made payments totaling $38.3 million related to the TRAs. We do not intend to make any additional payments in 2025. In 2026, we expect to make payments of approximately $40.4 million related to the TRAs.

Previous wording

Net cash provided by operating activities decreased $14.1 million for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, primarily due to a decrease of $39.0 million in cash flow from CIP activity predominantly due to an increase in net outflows resulting from the increase in third party contributions to CIPs, partially offset by a benefit from changes in working capital of $26.7 million and an increase of $2.0 million in operating income.

Current wording

Net cash provided by operating activities decreased $86.5 million for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. As a result of the $111.6 million increase in third party investment subscriptions into our consolidated investment products in the nine months ended September 30, 2025, our net purchase activity within those products increased $116.2 million. This was partially offset by a $26.8 million benefit from changes in working capital and a $10.6 million increase in operating income.