8-K


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 26, 2015
Artisan Partners Asset Management Inc.
(Exact name of registrant as specified in its charter)

Delaware
001-35826
45-0969585
(State or other jurisdiction of
incorporation or organization)
(Commission file number)
(I.R.S. Employer
Identification No.)
 
 
 
 
875 E. Wisconsin Avenue, Suite 800
Milwaukee, WI 53202
 
 
(Address of principal executive offices and zip code)
 

(414) 390-6100
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition
On October 26, 2015, Artisan Partners Asset Management Inc. (the “Company”) issued a press release and presentation materials announcing certain consolidated financial and operating results for the three and nine months ended September 30, 2015. Copies of the press release, the full earnings release and the presentation materials are attached hereto as Exhibit 99.1, 99.2 and 99.3, respectively, and are incorporated herein by reference.
The information furnished in this Item 2.02, including the exhibits incorporated herein by reference, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof, except as expressly set forth by specific reference in such a filing.





Item 9.01 Financial Statements and Exhibits
Exhibit Number
 
Description of Exhibit
99.1
 
Summary Release of Artisan Partners Asset Management Inc. dated October 26, 2015
99.2
 
Earnings Release of Artisan Partners Asset Management Inc. dated October 26, 2015
99.3
 
September Quarter 2015 Presentation of Artisan Partners Asset Management Inc.





SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Artisan Partners Asset Management Inc.
Date: October 26, 2015
By:
 
/s/ Charles J. Daley, Jr.
Name:
 
Charles J. Daley, Jr.
Title:
 
Executive Vice President, Chief Financial Officer and Treasurer




Exhibit

Artisan Partners Asset Management Inc. Reports 3Q15 Results
Milwaukee, WI - October 26, 2015 - Artisan Partners Asset Management Inc. (NYSE: APAM) (the “Company” or “Artisan Partners”) today reported its results for the three and nine months ended September 30, 2015, including net income and earnings per share. The full third quarter 2015 earnings release and investor presentation can be viewed at www.apam.com.

Eric Colson, Artisan Partners’ Chief Executive Officer, said, “In the third quarter, total AUM was negatively impacted by the significant decline in world-wide equity markets and by net client cash outflows. Recent market volatility, driven by macro events, changing investor behavior, and newly popular forms of investing such as high frequency trading, liquid alternatives and ETFs, has produced considerable uncertainty. That uncertainty has intensified negative sentiment and driven valuations lower. We have thoughtfully designed our financial model to adjust automatically in times like these, which allows us to remain focused on who we are as a firm and continue to make long-term investments in our business. We neither expect nor try to create linear outcomes.”

“The launch of our new Developing World strategy is an example of our approach. Despite uncertainty in emerging markets, at the beginning of 2015, we hired an experienced portfolio manager with a history of delivering strong results and a mind-set consistent with Artisan’s values. We launched the Developing World strategy at the beginning of July when the new Developing World team was ready. We weren’t trying to time markets or secular industry trends. While the third quarter proved to be the worst quarter for emerging markets equities in four years, the creation of the Developing World team and the launch of the Developing World strategy are positive investments in Artisan’s long-term business value that we made despite market uncertainty.”
Business Update
Regarding the firm’s results, Mr. Colson said, “As of September 30, 2015, all of our strategies have continued to follow their objectives with integrity. Eight of our twelve investment strategies with at least a five-year track record added value relative to their broad performance benchmarks over the trailing five-year period. Six of our eight strategies with a ten-year track record added value relative to their broad performance benchmarks over that period.
“During the quarter, net outflows from the strategies managed by our U.S. Value team continued to more than offset positive net flows for the rest of our business. We experienced a total of $1.3 billion in net outflows during the quarter, with $1.6 billion of net outflows from the U.S. Value team strategies. Our Global Equity, Growth, and Global Value teams continue to deliver strong investment returns and stable to growing client bases. While we have recently seen some attrition in several of those teams’ strategies, we are confident that the combination of strong long-term results and experienced leadership will allow us to manage capacity across those teams’ strategies.
“Despite market and industry uncertainty, we remain committed to delivering long-term investment results, which we believe will also drive thoughtful growth. Consistent with that commitment, in September, we announced the beginning of a process for closing our Non-U.S. Growth strategy and the partial re-opening of our Global Value strategy. Those decisions resulted from our business discipline, taking into account capacity and flows, client mix, portfolio positioning and liquidity, and the judgment of our investment decision-makers. While our disciplined approach to protecting and managing the integrity of our strategies impacts short-term client cash flow trends, we believe that it increases the probability of delivering exceptional long-term investment results. As long-term stewards of client assets and owners of this firm, we strongly believe that doing what’s best for clients and our investment talent will result in long-term sustainable growth.”




Conference Call
The Company will host a conference call on October 27th, at 11:00 a.m. (Eastern Time) to discuss these results. Hosting the call will be Eric Colson, Chief Executive Officer, and C.J. Daley, Chief Financial Officer. The call will be webcast and can be accessed via the investor relations section of artisanpartners.com. Listeners may also access the call by dialing 877.328.5507 or 412.317.5423 for international callers; the conference ID is 10067514. A replay of the call will be available until November 3, 2015 at 9:00 a.m. (Eastern Time), by dialing 877.344.7529 or 412.317.0088 for international callers; the replay conference ID is 10067514. In addition, the webcast will be available on the Company’s website.
Forward-Looking Statements and Other Disclosures
Certain statements in this release, and other written or oral statements made by or on behalf of the Company, are “forward-looking statements within the meaning of the federal securities laws. Statements regarding future events and developments 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. These forward-looking statements are only predictions based on current expectations and projections about future events. These 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 or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements. Among the important factors that could cause actual results, level of activity, performance or achievements to differ materially from those indicated by such forward-looking statements are: fluctuations in quarterly and annual results, incurrence of net losses, adverse effects of management focusing on implementation of a growth strategy, failure to develop and maintain the Artisan Partners brand 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 Companys Annual Report on Form 10-K for the fiscal year ended December 31, 2014, filed with the SEC on February 25, 2015. The Company undertakes no obligation to update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this release.

About Artisan Partners
Artisan Partners is a global investment management firm that provides a broad range of high value-added investment strategies in growing asset classes to sophisticated clients around the world. Since 1994, the firm has been committed to attracting experienced, disciplined investment professionals to manage client assets. Artisan Partners’ autonomous investment teams oversee a diverse range of investment strategies across multiple asset classes. Strategies are offered through various investment vehicles to accommodate a broad range of client mandates.

Source: Artisan Partners Asset Management Inc.

Investor Relations Inquiries
Makela Taphorn
866.632.1770
414.908.2176
ir@artisanpartners.com






Exhibit

Artisan Partners Asset Management Inc. Reports 3Q15 Results
Milwaukee, WI - October 26, 2015 - Artisan Partners Asset Management Inc. (NYSE: APAM) (the “Company” or “Artisan Partners”) today reported its results for the three and nine months ended September 30, 2015, including net income and earnings per share.

Eric Colson, Artisan Partners’ Chief Executive Officer, said, “In the third quarter, total AUM was negatively impacted by the significant decline in world-wide equity markets and by net client cash outflows. Recent market volatility, driven by macro events, changing investor behavior, and newly popular forms of investing such as high frequency trading, liquid alternatives and ETFs, has produced considerable uncertainty. That uncertainty has intensified negative sentiment and driven valuations lower. We have thoughtfully designed our financial model to adjust automatically in times like these, which allows us to remain focused on who we are as a firm and continue to make long-term investments in our business. We neither expect nor try to create linear outcomes.”

“The launch of our new Developing World strategy is an example of our approach. Despite uncertainty in emerging markets, at the beginning of 2015, we hired an experienced portfolio manager with a history of delivering strong results and a mind-set consistent with Artisan’s values. We launched the Developing World strategy at the beginning of July when the new Developing World team was ready. We weren’t trying to time markets or secular industry trends. While the third quarter proved to be the worst quarter for emerging markets equities in four years, the creation of the Developing World team and the launch of the Developing World strategy are positive investments in Artisan’s long-term business value that we made despite market uncertainty.”
Business Update
Regarding the firm’s results, Mr. Colson said, “As of September 30, 2015, all of our strategies have continued to follow their objectives with integrity. Eight of our twelve investment strategies with at least a five-year track record added value relative to their broad performance benchmarks over the trailing five-year period. Six of our eight strategies with a ten-year track record added value relative to their broad performance benchmarks over that period.
“During the quarter, net outflows from the strategies managed by our U.S. Value team continued to more than offset positive net flows for the rest of our business. We experienced a total of $1.3 billion in net outflows during the quarter, with $1.6 billion of net outflows from the U.S. Value team strategies. Our Global Equity, Growth, and Global Value teams continue to deliver strong investment returns and stable to growing client bases. While we have recently seen some attrition in several of those teams’ strategies, we are confident that the combination of strong long-term results and experienced leadership will allow us to manage capacity across those teams’ strategies.
“Despite market and industry uncertainty, we remain committed to delivering long-term investment results, which we believe will also drive thoughtful growth. Consistent with that commitment, in September, we announced the beginning of a process for closing our Non-U.S. Growth strategy and the partial re-opening of our Global Value strategy. Those decisions resulted from our business discipline, taking into account capacity and flows, client mix, portfolio positioning and liquidity, and the judgment of our investment decision-makers. While our disciplined approach to protecting and managing the integrity of our strategies impacts short-term client cash flow trends, we believe that it increases the probability of delivering exceptional long-term investment results. As long-term stewards of client assets and owners of this firm, we strongly believe that doing what’s best for clients and our investment talent will result in long-term sustainable growth.”




The table below presents AUM and a comparison of certain GAAP and non-GAAP (adjusted) financial measures.

For the Three Months Ended

 For the Nine Months Ended

September 30,

June 30,

September 30,
 
September 30,

September 30,

2015

2015

2014
 
2015

2014

(unaudited, in millions except per share amounts or as otherwise noted)
Assets Under Management (amounts in billions)
Ending
$
97.0


$
109.2


$
106.2


$
97.0


$
106.2

Average
104.7


111.4


110.2


108.2


108.2











Consolidated Financial Results (GAAP)
Revenues
$
198.4

 
$
211.5

 
$
212.4

 
$
613.5

 
$
622.7

Operating income
70.6

 
78.3

 
81.0

 
216.7

 
229.0

Operating margin
35.6
%

37.0
%

38.1
%

35.3
%

36.8
%
Net income attributable to Artisan Partners Asset Management Inc.
$
18.4

 
$
23.8

 
$
20.4

 
$
61.7

 
$
48.3

Basic and diluted earnings (loss) per share
0.44

 
0.50

 
0.57

 
1.38

 
(1.02
)










Adjusted1 Financial Results
Adjusted operating income
$
81.1


$
89.0


$
93.4


$
248.3


$
281.3

Adjusted operating margin
40.9
%
 
42.1
%
 
44.0
%
 
40.5
%
 
45.2
%
Adjusted EBITDA2
$
82.2


$
90.5


$
94.9


$
251.9


$
283.9

Adjusted net income
49.2


54.4


57.4


151.1


173.4

Adjusted earnings per adjusted share
0.67


0.74


0.79


2.06


2.41


______________________________________ 
1 Adjusted measures are non-GAAP measures and are explained and reconciled to the comparable GAAP measures in Exhibit 2.
2 EBITDA represents earnings before interest, tax, depreciation and amortization expense.
2


Assets Under Management Decreased to $97.0 billion
During the September quarter, our AUM decreased to $97.0 billion at September 30, 2015, a decrease of $12.2 billion, or 11.2%, compared to $109.2 billion at June 30, 2015, as a result of $10.9 billion of market depreciation and $1.3 billion in net client cash outflows. Compared to September 30, 2014, AUM decreased $9.3 billion, or 8.7%, due to $4.9 billion of market depreciation and $4.4 billion in net client cash outflows.
Average AUM for the September quarter of 2015 was $104.7 billion, a decrease of 6.0% compared to average AUM for the June quarter of 2015 of $111.4 billion and a 5.0% decrease from the average of $110.2 billion for the September quarter of 2014.
September Quarter of 2015 Compared to June Quarter of 2015
GAAP net income was $18.4 million, or $0.44 per basic and diluted share, in the September quarter of 2015 compared to net income of $23.8 million, or $0.50 per basic and diluted share, in the June quarter of 2015. Adjusted net income was $49.2 million, or $0.67 per adjusted share, in the September quarter of 2015 compared to adjusted net income of $54.4 million, or $0.74 per adjusted share, in the June quarter of 2015.
Revenues of $198.4 million in the September quarter of 2015 decreased $13.1 million from $211.5 million in the June quarter of 2015 primarily due to lower average AUM in the September quarter.
Operating expenses of $127.8 million in the September quarter of 2015 decreased $5.4 million from $133.2 million in the June quarter of 2015 as a result of lower incentive compensation and third-party distribution expenses in the September quarter, both of which are linked to our revenue, and a decrease in general and administrative expenses.
GAAP operating margin was 35.6% for the September quarter of 2015 compared to 37.0% for the June quarter of 2015.
Adjusted operating margin decreased to 40.9% for the September quarter of 2015 from 42.1% for the June quarter of 2015 primarily as a result of lower revenues, partially offset by decreased operating expenses.
September Quarter of 2015 Compared to September Quarter of 2014
GAAP net income was $18.4 million, or $0.44 per basic and diluted share, in the September quarter of 2015 compared to net income of $20.4 million, or $0.57 per basic and diluted share, in the September quarter of 2014. Adjusted net income was $49.2 million, or $0.67 per adjusted share, in the September quarter of 2015 compared to adjusted net income of $57.4 million, or $0.79 per adjusted share, in the September quarter of 2014.
Revenues of $198.4 million in the September quarter of 2015 decreased $14.0 million from $212.4 million in the September quarter of 2014 primarily due to lower average AUM.
Operating expenses of $127.8 million in the September quarter of 2015 decreased $3.6 million from $131.4 million in the September quarter of 2014 primarily as a result of decreases in incentive compensation and third-party distribution expenses in the September quarter of 2015, both of which are linked to our revenue, and a decrease in pre-offering related equity compensation expense. The decreases were partially offset by increased post-IPO equity compensation expense related to the July 2014 and January 2015 equity grants.
GAAP operating margin was 35.6% for the September quarter of 2015 compared to 38.1% for the September quarter of 2014.
Adjusted operating margin was 40.9% for the September quarter of 2015 compared to 44.0% for the September quarter of 2014. The decrease in adjusted operating margin was primarily a result of lower revenues and increased post-IPO equity compensation expense, partially offset by decreased operating expenses. The additional equity compensation expense reduced adjusted operating margin by 140 basis points.


3


Nine Months Ended September 30, 2015 Compared to Nine Months Ended September 30, 2014
GAAP net income was $61.7 million, or $1.38 per basic and diluted share, for the nine months ended September 30, 2015 compared to $48.3 million, or $1.02 loss per basic and diluted share, for the nine months ended September 30, 2014. Basic and diluted earnings per share were negatively impacted in the nine months ended September 30, 2014 by our 2014 purchase of our preferred securities, which reduced net income available to common stockholders. Adjusted net income was $151.1 million, or $2.06 per adjusted share, for the nine months ended September 30, 2015 compared to adjusted net income of $173.4 million, or $2.41 per adjusted share, for the nine months ended September 30, 2014.
Revenues of $613.5 million for the nine months ended September 30, 2015 decreased $9.2 million from $622.7 million for the nine months ended September 30, 2014 primarily due to a decline in the proportion of our total AUM managed through Artisan Funds which resulted in our weighted average investment management fee rate decreasing from 77 basis points for the nine months ended September 30, 2014 to 76 basis points for the nine months ended September 30, 2015.
Operating expenses of $396.8 million for the nine months ended September 30, 2015 increased $3.1 million from $393.7 million for the nine months ended September 30, 2014 as a result of an $11.9 million increase in equity compensation expense related to the July 2014 and January 2015 equity grants, $6.5 million of initial start-up costs associated with the formation of our Developing World team, and increases in other operating expenses. The increases were partially offset by a $20.6 million decrease in pre-offering related equity compensation expense.
GAAP operating margin was 35.3% for the nine months ended September 30, 2015 compared to 36.8% for the nine months ended September 30, 2014.
Adjusted operating margin was 40.5% for the nine months ended September 30, 2015 compared to 45.2% for the nine months ended September 30, 2014. The decrease in adjusted operating margin was primarily a result of the increased equity compensation expense and initial start-up costs for our Developing World team discussed above.
Capital Management
Cash and cash equivalents were $217.7 million at September 30, 2015 compared to $182.3 million at December 31, 2014. The Company paid its quarterly dividend of $0.60 per share of Class A common stock during the September quarter of 2015. The Company had total borrowings of $200.0 million at September 30, 2015 and December 31, 2014.
During the September quarter of 2015, limited partners of Artisan Partners Holdings exchanged 145,265 common units for 145,265 Class A common shares. The exchanges increased the Company’s public float of Class A common stock by 145,265 shares.
Total stockholders’ equity was $118.3 million at September 30, 2015 compared to $107.5 million at December 31, 2014. The Company had 39.4 million Class A common shares outstanding at September 30, 2015.
The Company’s debt leverage ratio, calculated in accordance with its loan agreements, was 0.5X at September 30, 2015.
On October 21, 2015, the Company’s Board of Directors declared a quarterly dividend of $0.60 per share payable on November 30, 2015, to Class A shareholders of record as of the close of business on November 16, 2015.
 

*********

4


Conference Call
The Company will host a conference call on October 27th, at 11:00 a.m. (Eastern Time) to discuss these results. Hosting the call will be Eric Colson, Chief Executive Officer, and C.J. Daley, Chief Financial Officer. The call will be webcast and can be accessed via the investor relations section of artisanpartners.com. Listeners may also access the call by dialing 877.328.5507 or 412.317.5423 for international callers; the conference ID is 10067514. A replay of the call will be available until November 3, 2015 at 9:00 a.m. (Eastern Time), by dialing 877.344.7529 or 412.317.0088 for international callers; the replay conference ID is 10067514. In addition, the webcast will be available on the Company’s website.
Forward-Looking Statements and Other Disclosures
Certain statements in this release, and other written or oral statements made by or on behalf of the Company, are “forward-looking statements within the meaning of the federal securities laws. Statements regarding future events and developments 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. These forward-looking statements are only predictions based on current expectations and projections about future events. These 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 or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements. Among the important factors that could cause actual results, level of activity, performance or achievements to differ materially from those indicated by such forward-looking statements are: fluctuations in quarterly and annual results, incurrence of net losses, adverse effects of management focusing on implementation of a growth strategy, failure to develop and maintain the Artisan Partners brand 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 Companys Annual Report on Form 10-K for the fiscal year ended December 31, 2014, filed with the SEC on February 25, 2015. The Company undertakes no obligation to update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this release.

Any discrepancies included in this release between totals and the sums of the amounts listed are due to rounding.
About Artisan Partners
Artisan Partners is a global investment management firm that provides a broad range of high value-added investment strategies in growing asset classes to sophisticated clients around the world. Since 1994, the firm has been committed to attracting experienced, disciplined investment professionals to manage client assets. Artisan Partners’ autonomous investment teams oversee a diverse range of investment strategies across multiple asset classes. Strategies are offered through various investment vehicles to accommodate a broad range of client mandates.

Source: Artisan Partners Asset Management Inc.

Investor Relations Inquiries
Makela Taphorn
866.632.1770
414.908.2176
ir@artisanpartners.com



5

Exhibit 1

Artisan Partners Asset Management Inc.
Consolidated Statements of Operations
(unaudited; in millions, except per share amounts or as noted)

 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
June 30,
 
September 30,
 
September 30,
 
September 30,
 
2015
 
2015
 
2014
 
2015
 
2014
Revenues
 
 
 
 
 
 
 
 
 
Management fees
 
 
 
 
 
 
 
 
 
Artisan Funds & Artisan Global Funds
$
134.7

 
$
142.6

 
$
148.7

 
$
415.4

 
$
434.2

Separate accounts
63.6

 
67.7

 
63.6

 
196.5

 
188.2

Performance fees
0.1

 
1.2

 
0.1

 
1.6

 
0.3

Total revenues
198.4


211.5


212.4


613.5


622.7

 
 
 
 
 
 
 
 
 
 
Operating expenses
 
 
 
 
 
 
 
 
 
Compensation and benefits
91.2

 
93.7

 
90.7

 
283.3

 
261.9

Pre-offering related compensation - share-based awards
10.5

 
10.7

 
12.4

 
31.6

 
52.2

Total compensation and benefits
101.7

 
104.4

 
103.1

 
314.9

 
314.1

Distribution and marketing
10.6

 
11.7

 
13.2

 
34.0

 
36.3

Occupancy
3.1

 
3.0

 
2.9

 
9.1

 
8.3

Communication and technology
6.4

 
6.4

 
5.7

 
18.0

 
15.7

General and administrative
6.0

 
7.7

 
6.5

 
20.8

 
19.3

Total operating expenses
127.8

 
133.2

 
131.4

 
396.8

 
393.7

Operating income
70.6


78.3


81.0


216.7


229.0

Interest expense
(3.0
)
 
(2.9
)
 
(2.9
)
 
(8.8
)
 
(8.7
)
Net gain (loss) of Launch Equity

 

 
(0.5
)
 

 
(2.0
)
Net gain (loss) on the tax receivable agreements
(5.8
)
 

 
0.3

 
(12.2
)
 
(4.2
)
Net investment income

 
0.4

 
0.4

 
0.4

 
0.4

Other non-operating income (loss)

 

 
0.2

 

 
(0.1
)
Total non-operating income (loss)
(8.8
)
 
(2.5
)
 
(2.5
)
 
(20.6
)
 
(14.6
)
Income before income taxes
61.8

 
75.8

 
78.5

 
196.1

 
214.4

Provision for income taxes
11.6

 
16.5

 
15.4

 
33.2

 
35.2

Net income before noncontrolling interests
50.2

 
59.3

 
63.1

 
162.9

 
179.2

Less: Net income attributable to noncontrolling interests - Artisan Partners Holdings LP
31.8

 
35.5

 
43.2

 
101.2

 
132.9

Less: Net income (loss) attributable to noncontrolling interests - Launch Equity

 

 
(0.5
)
 

 
(2.0
)
Net income attributable to Artisan Partners Asset Management Inc.
$
18.4


$
23.8


$
20.4


$
61.7


$
48.3

 
 
 
 
 
 
 
 
 
 
Basic and diluted earnings (loss) per share - Class A common shares
$
0.44


$
0.50


$
0.57


$
1.38


$
(1.02
)
 
 
 
 
 
 
 
 
 
 
Average shares outstanding
 
 
 
 
 
 
 
 
 
Class A common shares
36.4


36.0


30.4


35.0


26.2

Unvested restricted share-based awards
3.0


3.3


2.6


3.1


1.9

Convertible preferred shares








0.5

Total average shares outstanding
39.4

 
39.3

 
33.0

 
38.1

 
28.6


6

Exhibit 2

Artisan Partners Asset Management Inc.
Reconciliation of GAAP to Non-GAAP (Adjusted) Measures
(unaudited; in millions, except per share amounts or as noted)



Three Months Ended
 
Nine Months Ended

September 30,

June 30,

September 30,
 
September 30,
 
September 30,

2015

2015

2014
 
2015
 
2014
Net income attributable to Artisan Partners Asset Management Inc. (GAAP)
$
18.4

 
$
23.8

 
$
20.4

 
$
61.7

 
$
48.3

Add back: Net income attributable to noncontrolling interests - Artisan Partners Holdings LP
31.8


35.5


43.2

 
101.2

 
132.9

Add back: Provision for income taxes
11.6


16.5


15.4

 
33.2

 
35.2

Add back: Pre-offering related compensation - share-based awards
10.5


10.7


12.4

 
31.6

 
52.2

Add back: Offering related proxy expense





 

 
0.1

Add back: Net (gain) loss on the tax receivable agreements
5.8

 

 
(0.3
)
 
12.2

 
4.2

Less: Adjusted provision for income taxes
28.9


32.1


33.7

 
88.8

 
99.5

Adjusted net income (Non-GAAP)
$
49.2


$
54.4


$
57.4

 
$
151.1

 
$
173.4







 
 
 
 
Average shares outstanding





 
 
 
 
Class A common shares
36.4

 
36.0

 
30.4

 
35.0

 
26.2



 

 

 
 
 
 
Assumed vesting, conversion or exchange of:

 

 

 
 
 
 
Unvested restricted share-based awards
3.0

 
3.3

 
2.6

 
3.1

 
1.9

Convertible preferred shares outstanding

 

 

 

 
0.5

Artisan Partners Holdings LP units outstanding (non-controlling interest)
34.1


34.2


39.7

 
35.3

 
43.3

Adjusted shares
73.5


73.5


72.7

 
73.4

 
71.9







 
 
 
 
Adjusted net income per adjusted share (Non-GAAP)
$
0.67


$
0.74


$
0.79

 
$
2.06

 
$
2.41







 
 
 
 
Operating income (GAAP)
$
70.6

 
$
78.3

 
$
81.0

 
$
216.7

 
$
229.0

Add back: Pre-offering related compensation - share-based awards
10.5


10.7


12.4

 
31.6

 
52.2

Add back: Offering related proxy expense





 

 
0.1

Adjusted operating income (Non-GAAP)
$
81.1


$
89.0


$
93.4

 
$
248.3

 
$
281.3







 
 
 
 
Adjusted operating margin (Non-GAAP)
40.9
%

42.1
%

44.0
%

40.5
%

45.2
%






 
 
 
 
Net income attributable to Artisan Partners Asset Management Inc. (GAAP)
$
18.4

 
$
23.8

 
$
20.4

 
$
61.7

 
$
48.3

Add back: Net income attributable to noncontrolling interests - Artisan Partners Holdings LP
31.8


35.5


43.2

 
101.2

 
132.9

Add back: Pre-offering related compensation - share-based awards
10.5


10.7


12.4

 
31.6

 
52.2

Add back: Offering related proxy expense





 

 
0.1

Add back: Net (gain) loss on the tax receivable agreements
5.8

 

 
(0.3
)
 
12.2

 
4.2

Add back: Interest expense
3.0


2.9


2.9

 
8.8

 
8.7

Add back: Provision for income taxes
11.6


16.5


15.4

 
33.2

 
35.2

Add back: Depreciation and amortization
1.1


1.1


0.9

 
3.2

 
2.3

Adjusted EBITDA (Non-GAAP)
$
82.2


$
90.5


$
94.9

 
$
251.9


$
283.9


7


The Company’s management uses non-GAAP measures (referred to as adjusted measures) of net income and operating income to evaluate the profitability and efficiency of the underlying operations of the business and as a factor when considering net income available for distributions and dividends. These adjusted measures remove the impact of (1) pre-offering related compensation, (2) offering related proxy expense and (3) net gain (loss) on the tax receivable agreements. These adjustments also remove the non-operational complexities of the Company’s structure by adding back non-controlling interests and assuming all income of Artisan Partners Holdings is allocated to the Company. Management believes these non-GAAP measures provide more meaningful information to analyze the Company’s profitability and efficiency between periods and over time. The Company has included these non-GAAP measures to provide investors with the same financial metrics used by management to manage the Company.
Non-GAAP measures should be considered in addition to, and not as a substitute for, financial measures prepared in accordance with GAAP. The Company’s non-GAAP measures may differ from similar measures used by other companies, even if similar terms are used to identify such measures. The Company’s non-GAAP measures are as follows:
Adjusted net income represents net income excluding the impact of (1) pre-offering related compensation, (2) offering related proxy expense, and (3) net gain (loss) on the tax receivable agreements. Adjusted net income also reflects income taxes assuming the vesting of all unvested share-based awards of Class A common stock and as if all outstanding limited partnership units of Artisan Partners Holdings and all shares of the Company’s convertible preferred stock had been exchanged for or converted into Class A common stock of the Company on a one-for-one basis. Assuming full vesting, exchange and conversion, all income of Artisan Partners Holdings is treated as if it were allocated to the Company, and the adjusted provision for income taxes represents an estimate of income tax expense at an effective rate reflecting assumed federal, state, and local income taxes. The estimated adjusted effective tax rate was 37.0% and 36.5% for the 2015 and 2014 periods, respectively.
Adjusted net income per adjusted share is calculated by dividing adjusted net income by adjusted shares. The number of adjusted shares is derived by assuming the vesting of all unvested share-based awards of Class A common stock, the exchange of all outstanding limited partnership units of Artisan Partners Holdings and the conversion of all outstanding shares of the Company’s convertible preferred stock for or into Class A common stock of the Company on a one-for-one basis.
Adjusted operating income represents the operating income of the consolidated company excluding offering related proxy expense and pre-offering related compensation.
Adjusted operating margin is calculated by dividing adjusted operating income by total revenues.
Adjusted EBITDA represents income before income taxes, interest expense and depreciation and amortization, adjusted to exclude the impact of net income attributable to non-controlling interests, offering related proxy expense, pre-offering related compensation, and net gain (loss) on the tax receivable agreements

Pre-offering related compensation includes the amortization of unvested Class B common units of Artisan Partners Holdings that were granted before the Company’s initial public offering, which closed on March 12, 2013.

Offering related proxy expense represents costs incurred as a result of the change of control (for purposes of the Investment Company Act and Investment Advisers Act) which occurred on March 12, 2014. We incurred costs through the first quarter of 2014 to solicit the necessary approvals and consents from the boards and shareholders of the mutual funds that we advise or sub-advise and from our separate accounts clients, which were necessary because of the change of control.

Net gain (loss) on tax receivable agreements represents the income or expense associated with the amounts payable under the tax receivable agreements entered into in connection with the Company’s initial public offering and related reorganization.

8

Exhibit 3

Artisan Partners Asset Management Inc.
Condensed Consolidated Statements of Financial Condition
(unaudited; in millions)


 
As of
 
September 30,
 
December 31,
 
2015
 
2014
Assets
Cash and cash equivalents
$
217.7

 
$
182.3

Accounts receivable
67.6

 
69.4

Investment securities
9.8

 
6.7

Deferred tax assets
687.1

 
562.4

Other
28.6

 
28.7

Total assets
$
1,010.8

 
$
849.5

 
 
 
 
Liabilities and equity
Accounts payable, accrued expenses, and other
$
103.8

 
$
52.8

Borrowings
200.0

 
200.0

Amounts payable under tax receivable agreements
588.7

 
489.2

Total liabilities
892.5

 
742.0

 
 
 
 
Total equity
118.3

 
107.5

Total liabilities and equity
$
1,010.8

 
$
849.5


9

Exhibit 4
Artisan Partners Asset Management Inc.
Assets Under Management
(unaudited; in millions)

 
For the Three Months Ended
 
% Change from
 
 
September 30,
 
June 30,
 
September 30,
 
June 30,
 
September 30,
 
 
2015
 
2015
 
2014
 
2015
 
2014
 
 
 
 
 
 
 
 
 
 
 
 
Beginning assets under management
$
109,174

 
$
108,723

 
$
112,041

 
0.4
 %
 
(2.6
)%
 
Gross client cash inflows
4,179

 
5,097

 
4,677

 
(18.0
)%
 
(10.6
)%
 
Gross client cash outflows
(5,481
)
 
(5,402
)
 
(5,322
)
 
1.5
 %
 
3.0
 %
 
Net client cash flows
(1,302
)
 
(305
)
 
(645
)
 
(326.9
)%
 
(101.9
)%
 
Market appreciation (depreciation)
(10,904
)
 
756

 
(5,113
)
 
(1,542.3
)%
 
(113.3
)%
 
Net transfers 1

 

 
(37
)
 
 %
 
100.0
 %
 
Ending assets under management
$
96,968

 
$
109,174

 
$
106,246

 
(11.2
)%
 
(8.7
)%
 
Average assets under management
$
104,723

 
$
111,423

 
$
110,209

 
(6.0
)%
 
(5.0
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 For the Nine Months Ended
 
 
 
% Change from
 
 
 
September 30,
 
September 30,
 
 
 
September 30,
 
 
 
 
2015
 
2014
 
 
 
2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning assets under management
$
107,915

 
$
105,477

 
 
 
2.3%
 
 
 
Gross client cash inflows
13,700

 
17,411

 
 
 
(21.3)%
 
 
 
Gross client cash outflows
(17,533
)
 
(16,085
)
 
 
 
9.0%
 
 
 
Net client cash flows
(3,833
)
 
1,326

 
 
 
(389.1)%
 
 
 
Market appreciation (depreciation)
(7,114
)
 
(520
)
 
 
 
(1,268.1)%
 
 
 
Net transfers1

 
(37
)
 
 
 
100.0%
 
 
 
Ending assets under management
$
96,968

 
$
106,246

 
 
 
(8.7)%
 
 
 
Average assets under management
$
108,166

 
$
108,191

 
 
 
—%
 
 
 
 
 
 
 
 
 
 
 
 
 
 



______________________________________ 
1 Net transfers represent certain amounts that we have identified as having been transferred out of one investment strategy, investment vehicle, or account and into another strategy, vehicle, or account.

10

Exhibit 5
Artisan Partners Asset Management Inc.
Assets Under Management by Investment Team and Vehicle
(unaudited; in millions)

Three Months Ended
 
By Investment Team
 
By Vehicle
 
 
Global Equity
U.S. Value
Growth
Global Value
Emerging Markets
Credit
Developing World
Total
 
Artisan Funds & Artisan Global Funds
Separate Accounts
Total
September 30, 2015
 
 
Beginning assets under management
 
$
34,625

$
14,889

$
25,706

$
32,595

$
623

$
726

$
10

$
109,174

 
$
60,271

$
48,903

$
109,174

Gross client cash inflows
 
1,663

353

1,260

488

34

262

119

4,179

 
3,370

809

4,179

Gross client cash outflows
 
(1,469
)
(1,989
)
(1,147
)
(812
)
(7
)
(56
)
(1
)
(5,481
)
 
(4,038
)
(1,443
)
(5,481
)
Net client cash flows
 
194

(1,636
)
113

(324
)
27

206

118

(1,302
)
 
(668
)
(634
)
(1,302
)
Market appreciation (depreciation)
 
(4,539
)
(1,454
)
(2,082
)
(2,682
)
(117
)
(20
)
(10
)
(10,904
)
 
(6,178
)
(4,726
)
(10,904
)
Net transfers1
 








 
(54
)
54


Ending assets under management
 
$
30,280

$
11,799

$
23,737

$
29,589

$
533

$
912

$
118

$
96,968


$
53,371

$
43,597

$
96,968

Average assets under management
 
$
33,096

$
13,333

$
25,339

$
31,513

$
573

$
813

$
56

$
104,723

 
$
57,674

$
47,049

$
104,723

 
 
 
 
 
 
 
 
 
 
 
 
 
 
June 30, 2015
 
 
Beginning assets under management
 
$
33,601

$
16,243

$
25,064

$
32,512

$
629

$
674

$

$
108,723

 
$
60,649

$
48,074

$
108,723

Gross client cash inflows
 
1,932

865

1,459

731

1

99

10

5,097

 
3,289

1,808

5,097

Gross client cash outflows
 
(889
)
(1,992
)
(1,566
)
(890
)
(11
)
(54
)

(5,402
)
 
(3,888
)
(1,514
)
(5,402
)
Net client cash flows
 
1,043

(1,127
)
(107
)
(159
)
(10
)
45

10

(305
)
 
(599
)
294

(305
)
Market appreciation (depreciation)
 
(19
)
(227
)
749

242

4

7


756

 
272

484

756

Net transfers1
 








 
(51
)
51


Ending assets under management
 
$
34,625

$
14,889

$
25,706

$
32,595

$
623

$
726

$
10

$
109,174

 
$
60,271

$
48,903

$
109,174

Average assets under management2
 
$
34,995

$
15,951

$
25,824

$
33,295

$
659

$
699

$
10

$
111,423

 
$
61,761

$
49,662

$
111,423

 
 
 
 
 
 
 
 
 
 
 
 
 
 
September 30, 2014
 
 
Beginning assets under management
 
$
31,300

$
21,549

$
23,535

$
34,109

$
1,237

$
311

$

$
112,041

 
$
64,816

$
47,225

$
112,041

Gross client cash inflows
 
1,952

913

978

602

2

230


4,677

 
3,179

1,498

4,677

Gross client cash outflows
 
(1,356
)
(1,798
)
(1,079
)
(842
)
(213
)
(34
)

(5,322
)
 
(3,791
)
(1,531
)
(5,322
)
Net client cash flows
 
596

(885
)
(101
)
(240
)
(211
)
196


(645
)
 
(612
)
(33
)
(645
)
Market appreciation (depreciation)
 
(1,595
)
(1,118
)
(547
)
(1,809
)
(42
)
(2
)

(5,113
)
 
(3,077
)
(2,036
)
(5,113
)
Net transfers1
 



(37
)



(37
)
 
(160
)
123

(37
)
Ending assets under management
 
$
30,301

$
19,546

$
22,887

$
32,023

$
984

$
505

$

$
106,246

 
$
60,967

$
45,279

$
106,246

Average assets under management
 
$
30,919

$
20,976

$
23,364

$
33,374

$
1,155

$
421

$

$
110,209

 
$
63,418

$
46,791

$
110,209


______________________________________ 
1 Net transfers represent certain amounts that we have identified as having been transferred out of one investment strategy or investment vehicle and into another strategy or vehicle.
2 For the Developing World team, average assets under management is for the period between June 29, 2015, when the team’s strategy began investment operations, and June 30, 2015.



11

Exhibit 6
Artisan Partners Asset Management Inc.
Assets Under Management by Investment Team and Vehicle
(unaudited; in millions)

Nine Months Ended
 
By Investment Team
By Vehicle
 
 
Global Equity
U.S. Value
Growth
Global Value
Emerging Markets
Credit
Developing World
Total
 
Artisan Funds & Artisan Global Funds
Separate Accounts
Total
September 30, 2015
 
 
Beginning assets under management
 
$
31,452

$
18,112

$
24,499

$
32,481

$
806

$
565

$

$
107,915

 
$
60,257

$
47,658

$
107,915

Gross client cash inflows
 
5,833

1,663

3,608

1,937

38

491

130

13,700

 
10,367

3,333

13,700

Gross client cash outflows
 
(3,664
)
(6,567
)
(4,004
)
(2,945
)
(203
)
(149
)
(1
)
(17,533
)
 
(12,887
)
(4,646
)
(17,533
)
Net client cash flows
 
2,169

(4,904
)
(396
)
(1,008
)
(165
)
342

129

(3,833
)
 
(2,520
)
(1,313
)
(3,833
)
Market appreciation (depreciation)
 
(3,341
)
(1,409
)
(366
)
(1,884
)
(108
)
5

(11
)
(7,114
)
 
(4,108
)
(3,006
)
(7,114
)
Net transfers1
 








 
(258
)
258


Ending assets under management
 
$
30,280

$
11,799

$
23,737

$
29,589

$
533

$
912

$
118

$
96,968

 
$
53,371

$
43,597

$
96,968

Average assets under management2
 
$
33,567

$
15,498

$
25,301

$
32,413

$
660

$
709

$
56

$
108,166

 
$
59,890

$
48,276

$
108,166

 
 
 
 
 
 
 
 
 
 
 
 
 
 
September 30, 2014
 
 
Beginning assets under management
 
$
27,317

$
23,024

$
22,433

$
30,957

$
1,746

$

$

$
105,477

 
$
59,881

$
45,596

$
105,477

Gross client cash inflows
 
7,072

2,538

3,984

3,258

19

540


17,411

 
12,455

4,956

17,411

Gross client cash outflows
 
(3,633
)
(5,842
)
(3,437
)
(2,366
)
(768
)
(39
)

(16,085
)
 
(10,441
)
(5,644
)
(16,085
)
Net client cash flows
 
3,439

(3,304
)
547

892

(749
)
501


1,326

 
2,014

(688
)
1,326

Market appreciation (depreciation)
 
(455
)
(174
)
(140
)
258

(13
)
4


(520
)
 
(554
)
34

(520
)
Net transfers1
 


47

(84
)



(37
)
 
(374
)
337

(37
)
Ending assets under management
 
$
30,301

$
19,546

$
22,887

$
32,023

$
984

$
505

$

$
106,246

 
$
60,967

$
45,279

$
106,246

Average assets under management
 
$
29,485

$
21,591

$
22,974

$
32,610

$
1,311

$
308

$

$
108,191

 
$
62,305

$
45,886

$
108,191





______________________________________ 
1Net transfers represent certain amounts that we have identified as having been transferred out of one investment strategy, investment vehicle, or account and into another strategy, vehicle, or account.
2For the Developing World team, average assets under management is for the period between June 29, 2015, when the team’s strategy began investment operations, and September 30, 2015.

12

Exhibit 7


Artisan Partners Asset Management Inc.
Investment Strategy AUM and Gross Composite Performance 1 
As of September 30, 2015
(unaudited)
 
 
 
 
 
 
 
 
 
 
 
Average Annual
Value-Added2
Since Inception
(bps)
 
Inception
 
Strategy AUM
 
Average Annual Total Returns (%)
 
Investment Team and Strategy
Date
 
 (in $MM)
 
1 YR
3 YR
5 YR
10 YR
Inception
 
Global Equity Team
 
 
 
 
 
Non-U.S. Growth Strategy
1/1/1996
 
$
28,178

 
(8.70)%
6.83%
7.92%
6.17%
10.32%
 
609
MSCI EAFE Index
 
 
 
 
(8.66)%
5.63%
3.98%
2.97%
4.24%
 
 
Non-U.S. Small-Cap Growth Strategy
1/1/2002
 
$
1,254

 
3.43%
10.35%
9.14%
9.23%
14.20%
 
447
MSCI EAFE Small Cap Index
 
 
 
 
0.30%
10.17%
7.30%
4.65%
9.73%
 
 
Global Equity Strategy
4/1/2010
 
$
718

 
1.59%
11.78%
12.84%
N/A
12.10%
 
582
MSCI All Country World Index
 
 
 
 
(6.66)%
6.95%
6.82%
N/A
6.27%
 
 
Global Small-Cap Growth Strategy
7/1/2013
 
$
130

 
(1.23)%
N/A
N/A
N/A
4.29%
 
(187)
MSCI All Country World Small Cap Index
 
 
 
 
(3.28)%
N/A
N/A
N/A
6.16%
 
 
U.S. Value Team
 
 
 
 
 
 
 
 
 
 
 
U.S. Mid-Cap Value Strategy
4/1/1999
 
$
9,211

 
(7.37)%
10.23%
11.26%
8.31%
13.11%
 
432
Russell Midcap® Index
 
 
 
 
(0.25)%
13.91%
13.40%
7.86%
8.79%
 
 
Russell Midcap® Value Index
 
 
 
 
(2.07)%
13.69%
13.15%
7.41%
9.41%
 
 
U.S. Small-Cap Value Strategy
6/1/1997
 
$
1,002

 
(10.46)%
3.10%
4.78%
5.20%
10.64%
 
329
Russell 2000® Index
 
 
 
 
1.25%
11.02%
11.73%
6.54%
7.35%
 
 
Russell 2000® Value Index
 
 
 
 
(1.60)%
9.18%
10.16%
5.34%
8.29%
 
 
Value Equity Strategy
7/1/2005
 
$
1,586

 
(11.14)%
6.26%
9.59%
6.14%
6.29%
 
(88)
Russell 1000® Index
 
 
 
 
(0.61)%
12.66%
13.41%
6.95%
7.18%
 
 
Russell 1000® Value Index
 
 
 
 
(4.42)%
11.59%
12.28%
5.71%
5.95%
 
 
Growth Team
 
 
 
 
 
 
 
 
 
 
 
U.S. Mid-Cap Growth Strategy
4/1/1997
 
$
15,019

 
4.45%
14.28%
14.97%
11.11%
15.49%
 
560
Russell Midcap® Index
 
 
 
 
(0.25)%
13.91%
13.40%
7.86%
9.89%
 
 
Russell Midcap® Growth Index
 
 
 
 
1.45%
13.98%
13.58%
8.09%
8.48%
 
 
U.S. Small-Cap Growth Strategy
4/1/1995
 
$
2,259

 
8.02%
12.33%
16.10%
7.81%
9.88%
 
117
Russell 2000® Index
 
 
 
 
1.25%
11.02%
11.73%
6.54%
8.71%
 
 
Russell 2000® Growth Index
 
 
 
 
4.04%
12.85%
13.26%
7.66%
7.05%
 
 
Global Opportunities Strategy
2/1/2007
 
$
6,459

 
0.50%
10.91%
13.15%
N/A
8.73%
 
621
MSCI All Country World Index
 
 
 
 
(6.66)%
6.95%
6.82%
N/A
2.52%
 
 
Global Value Team
 
 
 
 
 
 
 
 
 
 
 
Non-U.S. Value Strategy
7/1/2002
 
$
16,016

 
(3.75)%
11.06%
10.60%
9.21%
12.59%
 
691
MSCI EAFE Index
 
 
 
 
(8.66)%
5.63%
3.98%
2.97%
5.68%
 
 
Global Value Strategy
7/1/2007
 
$
13,573

 
(3.33)%
11.55%
12.71%
N/A
7.28%
 
568
MSCI All Country World Index
 
 
 
 
(6.66)%
6.95%
6.82%
N/A
1.60%
 
 
Emerging Markets Team
 
 
 
 
 
 
 
 
 
 
 
Emerging Markets Strategy
7/1/2006
 
$
533

 
(19.47)%
(6.14)%
(6.14)%
N/A
2.15%
 
(91)
MSCI Emerging Markets Index
 
 
 
 
(19.28)%
(5.27)%
(3.57)%
N/A
3.06%
 
 
Credit Team
 
 
 
 
 
 
 
 
 
 
 
High Income Strategy
4/1/2014
 
$
912

 
2.74%
N/A
N/A
N/A
3.42%
 
543
BofA Merrill Lynch High Yield Master II Index
 
 
 
 
(3.57)%
N/A
N/A
N/A
(2.00)%
 
 
Developing World Team
 
 
 
 
 
 
 
 
 
 
 
Developing World Strategy
7/1/2015
 
$
118

 
N/A
N/A
N/A
N/A
(16.43)%
 
147
MSCI Emerging Markets Index
 
 
 
 
N/A
N/A
N/A
N/A
(17.90)%
 
 
Total Assets Under Management
 
 
$
96,968

 
 
 
 
 
 
 
 
______________________________________ 
1 We measure the results of our composites, which represent the aggregate performance of all discretionary client accounts, including mutual funds, invested in the same strategy except those accounts with respect to which we believe client-imposed socially based restrictions may have a material impact on portfolio construction and those accounts managed in a currency other than U.S. dollars (the results of these accounts, which represented approximately 8% of our assets under management at September 30, 2015, are maintained in separate composites, which are not presented in these materials).
2 Value-added is the amount in basis points by which the average annual gross composite return of each of our strategies has outperformed the broad-based market index most commonly used by our clients to compare the performance of the relevant strategy. Value-added for periods less than one year is not annualized. The Artisan High Income Strategy may hold loans and other security types that may not be included in the BofA Merrill Lynch High Yield Master II Index. At times, this can cause material differences in relative performance.


13
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a r t i s a n p a r t n e r s a s s e t m a n a g e m e n t 0 B U S I N E S S U P D A T E A N D T H I R D Q U A R T E R 2 0 1 5 E A R N I N G S P R E S E N T A T I O N Artisan Partners Asset Management


 
a r t i s a n p a r t n e r s a s s e t m a n a g e m e n t 1 BUSINESS UPDATE & QUARTERLY RESULTS DISCUSSION Eric R. Colson is President and Chief Executive Officer of Artisan Partners. Prior to joining the firm in January 2005, Mr. Colson was an executive vice president of Callan Associates, Inc. where he managed the institutional consulting group, providing business and investment advice to asset management firms. Prior to managing the institutional consulting group, he managed Callan's global manager research. Mr. Colson holds a BA in Economics from the University of California-Irvine. Mr. Colson is a CFA charterholder. • 23 years of industry experience • 11 years at Artisan Partners Charles (C.J.) Daley, Jr. is a Managing Director and Chief Financial Officer of Artisan Partners. Prior to joining the firm in July 2010, Mr. Daley was executive vice president, chief financial officer and treasurer of the global asset management firm Legg Mason, Inc. Mr. Daley holds a BS in Accounting from the University of Maryland. He is an inactive Certified Public Accountant. • 28 years of industry experience • 5 years at Artisan Partners


 
a r t i s a n p a r t n e r s a s s e t m a n a g e m e n t 2 FIRM FACTS  Founded in 1994; focused on providing high value-added investment strategies  Seven autonomous investment teams managing fifteen investment strategies for sophisticated, institutional investors  Principal offices in Milwaukee, San Francisco, Atlanta, New York, Kansas City and London, with approximately 363 associates  Approximately $97.0 billion under management as of September 30, 2015 AUM by Distribution Channel1 As of September 30, 2015. 1The allocation of AUM by distribution channel involves the use of estimates and the exercise of judgment. AUM by Investment Team management team Eric R. Colson Chief Executive Officer Charles (C.J.) Daley, Jr. Chief Financial Officer Sarah A. Johnson Chief Legal Officer Dean J. Patenaude Head of Global Distribution Credit 1% Emerging Markets 1% Developing World <1%


 
a r t i s a n p a r t n e r s a s s e t m a n a g e m e n t 3 0 50 100 150 200 250 300 350 400 450 500 0 10 20 30 40 50 60 70 80 90 M S C I A l l C o u n t r y W o r l d I n d e x C B O E V o l a t i l i t y I n d e x ® ( V I X ) VIX MSCI ACWI MARKET PERSPECTIVE MSCI All Country World Index vs. CBOE Volatility Index® Source: MSCI/CBOE.


 
a r t i s a n p a r t n e r s a s s e t m a n a g e m e n t 4 LONG-TERM INVESTMENT RESULTS Data as of and through September 30, 2015. Average Annual Total Returns represents gross of fees performance for the Artisan Composites. Value add measures the average annual outperformance or underperformance of the gross composite return of each Artisan Partners strategy compared to its broad-based benchmark. Periods less than one year are not annualized. See Notes & Disclosures at the end of this presentation for more information about our investment performance. Process Consistency Wealth Compounding Index Outperformance Peer Outperformance Strategy Global Equity Team Inception Non-U.S. Growth 1/1/96 28.2$ 10.32 % 6.09 % Non-U.S. Small-Cap Growth 1/1/02 1.3$ 14.20 % 4.47 % Global Equity 4/1/10 0.7$ 12.10 % 5.82 % Global Small-Cap Growth 7/1/13 0.1$ 4.29 % (1.87) % U.S. Value Team U.S. Mid-Cap Value 4/1/99 9.2$ 13.11 % 4.32 % U.S. Small-Cap Value 6/1/97 1.0$ 10.64 % 3.29 % Value Equity 7/1/05 1.6$ 6.29 % (0.88) % Growth Team U.S. Mid-Cap Growth 4/1/97 15.0$ 15.49 % 5.60 % U.S. Small-Cap Growth 4/1/95 2.3$ 9.88 % 1.17 % Global Opportunities 2/1/07 6.5$ 8.73 % 6.21 % Global Value Team Non-U.S. Value 7/1/02 16.0$ 12.59 % 6.91 % Global Value 7/1/07 13.6$ 7.28 % 5.68 % Emerging Markets Team Emerging Markets 7/1/06 0.5$ 2.15 % (0.91) % Credit Team High Income 4/1/14 0.9$ 3.42 % 5.43 % Developing World Team Developing World 7/1/15 0.1$ (16.43) % 1.47 % (in billions) AUM Value-AddedSince Inception Average Annual Returns (Gross)


 
a r t i s a n p a r t n e r s a s s e t m a n a g e m e n t 5 BUSINESS PHILOSOPHY & APPROACH Thoughtful Growth Active Strategies Autonomous Franchises Proven Results Designed for Investment Talent to Thrive Managed by Business Professionals Structured to Align Interests Active Talent Identification Entrepreneurial Commitment Focus on Long-Term Global Demand Since its founding, Artisan has built its business based upon a consistent philosophy and business model. Talent Driven Business Model High Value Added Investment Firm


 
a r t i s a n p a r t n e r s a s s e t m a n a g e m e n t 6 THOUGHTFUL GROWTH — Revenue Drivers Revenue Drivers Assets Under Management Fee RateX = Revenue Talent Alpha Capacity Beta Distribution Support Balance


 
a r t i s a n p a r t n e r s a s s e t m a n a g e m e n t 7 THOUGHTFUL GROWTH — Talent Recent New Team and Strategy Development  Driven by investment professionals’ interest and experience  Internal and external sources  Good fit as part of traditional, outcome and risk-based asset allocation strategies  Reflect increasing degrees of freedom to manage outcomes and risk  Not easily replicated with passive products 2013 2015 Global Small-Cap Growth Strategy Launched Sep-2015 Credit Team Established High Income Strategy Launched Developing World Team Established Developing World Strategy Launched 2014


 
a r t i s a n p a r t n e r s a s s e t m a n a g e m e n t 8 Sources: Artisan Partners/Lipper Inc/Morningstar. % of AUM in Outperforming Strategies at December 31 of each year. % of AUM in Outperforming Strategies represents the % of AUM in strategies where gross of fees composite performance had outperformed the benchmark for the average annual periods indicated above and since inception. % of AUM in Outperforming Strategies for each period includes only assets under management in all strategies in operation throughout the period. Lipper rankings and Morningstar Ratings are as of September 30, 2015. Lipper rankings are based on total return, are historical, and do not represent future results. Lipper Ranking does not include Funds with less than a 1-yr track record. Morningstar ratings are based on risk-adjusted return. The Overall Morningstar Rating for a fund is derived from a weighted average of the performance figures associated with its 3-, 5- and 10- year (if applicable) Morningstar Rating metrics. See Notes & Disclosures at the end of this presentation for more information about our investment performance. % of AUM in Outperforming Strategies % of AUM by Overall Lipper Ranking % of AUM by Overall Morningstar RatingTM 74% 76% 96% 100% 96%91% 91% 79% 100% 98% 58% 82% 82% 100% 97% 84% 86% 86% 96% 97% 58% 87% 87% 97% 98% 0% 20% 40% 60% 80% 100% 1 Year 3 Year 5 Year 10 Year Inception 2012 2013 2014 2Q 2015 3Q 2015 THOUGHTFUL GROWTH — Alpha


 
a r t i s a n p a r t n e r s a s s e t m a n a g e m e n t 9 Begin Closing Process for All New Investors THOUGHTFUL GROWTH — Capacity ’95 ’97 ’99 ‘01 ’03 ’05 ’07 ’09 ’11 ‘13 ‘15 Capacity management as part of our thoughtful growth strategy: Artisan Non-U.S. Growth Assets Under Management Artisan Global Value Assets Under Management Builds Client Trust Protects Alpha Supports Investment Talent Pooled Vehicles Re-Opened Strategy Closed to All New Investors Strategy Closed to Separate Accounts ’07 ’08 ’09 ’10 ’11 ’12 ’13 ‘14 ‘15


 
a r t i s a n p a r t n e r s a s s e t m a n a g e m e n t 10 Credit 1% Emerging Markets 1% Developing World <1% Channel Diversification1 Team Diversification AUM by Client DomicileAUM by Vehicle 1 The allocation of AUM by distribution channel involves the use of estimates and the exercise of judgment. THOUGHTFUL GROWTH — Balanced Distribution


 
a r t i s a n p a r t n e r s a s s e t m a n a g e m e n t 11 Focused on Long-Term Approach to Growth Disciplined Maintenance of Fees High Variable Costs and Stable Margins Strong Cash Flow and Conservative Balance Sheet Aligned Interests Invest in the business with a focus on sustainable long-term growth Commitment to maintain fee levels supported by value-added strategies Variable cost structure enhances stability through market volatility Modest leverage and strong cash generation provide financial stability Employee incentives aligned with growing and preserving shareholder value TRANSPARENT PREDICTABLE FINANCIAL MODEL — Consistent Philosophy & Approach


 
a r t i s a n p a r t n e r s a s s e t m a n a g e m e n t 12  AUM decreased 11% to $97.0 billion  Average AUM decreased 6% to $104.7 billion  Net outflows of $1.3 billion  Revenues decreased 6% to $198.4 million  GAAP operating margin of 35.6%  GAAP net income per basic and diluted share of $0.44  Adjusted operating margin of 40.9%  Adjusted net income per adjusted share of $0.67  Dividend of $0.60 per share of Class A common stock – Declaration Date: October 21st – Record Date: November 16th – Payable Date: November 30th Assets Under Management Net Client Cash Flows Operating Results Capital Management SUMMARY OF SEPTEMBER QUARTER 2015 RESULTS


 
a r t i s a n p a r t n e r s a s s e t m a n a g e m e n t 13 ASSETS UNDER MANAGEMENT & NET CLIENT CASH FLOWS (in billions) Net Client Cash Flows $106.2 $107.9 $108.7 $109.2 $97.0 $110.2 $106.9 $108.4 $111.4 $104.7 3Q14 4Q14 1Q15 2Q15 3Q15 Assets Under Management Assets Under Management Average Assets Under Management $(0.6) $(0.5) $(2.2) $(0.3) $(1.3) 3Q14 4Q14 1Q15 2Q15 3Q15 Quarter $1.3 $(3.8) YTD 2014 YTD 2015 Year To Date


 
a r t i s a n p a r t n e r s a s s e t m a n a g e m e n t 14 GLOBAL DISTRIBUTION (in billions) U.S. vs. Non-U.S. Client Net Flows 12% 13% 13% 13% 14% $13.0 $13.9 $13.8 $14.2 $13.1 3Q14 4Q14 1Q15 2Q15 3Q15 Non-U.S. Client AUM Non-U.S. Client AUM as a % of Firmwide AUM Non-U.S. Client AUM (0.6) (1.1) (2.0) (0.5) (1.4) $0.0 $0.6 (0.2) $0.2 $0.1 3Q14 4Q14 1Q15 2Q15 3Q15 Quarter U.S. Non-U.S. $0.4 (4.0) $0.9 $0.2 YTD 2014 YTD 2015 Year To Date U.S. Non-U.S.


 
a r t i s a n p a r t n e r s a s s e t m a n a g e m e n t 15 $110.2 $111.4 $104.7 3Q14 2Q15 3Q15 $212.4 $211.5 $198.4 3Q14 2Q15 3Q15 FINANCIAL RESULTS — Financial Highlights Average AUM (in billions) Revenues (in millions) Quarter Year To Date $108.2 $108.2 YTD 2014 YTD 2015 $622.7 $613.5 YTD 2014 YTD 2015


 
a r t i s a n p a r t n e r s a s s e t m a n a g e m e n t 16 FINANCIAL RESULTS — Financial Highlights Adjusted Operating Margin1 Adjusted Net Income (in millions) & Adjusted Net Income per Share1 3Q14 2Q15 3Q15 1 Operating Margin (GAAP) for the quarters ended September 30, 2014, June 30, 2015, and September 30, 2015 was 38.1%, 37.0%, and 35.6%, respectively, and for the nine months ended September 30, 2014 and September 30, 2015 was 36.8% and 35.3%, respectively. Net Income attributable to APAM for the quarters ended September 30, 2014, June 30, 2015, and September 30, 2015 was $20.4M, $23.8M, and $18.4M, respectively, and for the nine months ended September 30, 2014 and September 30, 2015 was $48.3M and $61.7M, respectively. Net Income (Loss) per basic and diluted share for the quarters ended September 30, 2014, June 30, 2015, and September 30, 2015 was $0.57, $0.50, and $0.44, respectively, and for the nine months ended September 30, 2014 and September 30, 2015 was $(1.02) and $1.38 respectively. See page 21 for a reconciliation of GAAP to Non-GAAP (“Adjusted”) Measures. Quarter Year To Date YTD 2014 YTD 2015 44.0% 42.1% 40.9% 3Q14 2Q15 3Q15 45.2% 40.5% YTD 2014 YTD 2015 $57.4 $0.79 $54.4 $0.74 $49.2 $0.67 $173.4 $2.41 $151.1 $2.06 Adjusted Net income Adjusted Net Income per Adjusted Share


 
a r t i s a n p a r t n e r s a s s e t m a n a g e m e n t 17  Incentive compensation is primarily variable compensation paid to investment and distribution teams based on revenue- share percentages and discretionary cash incentives paid to other employees. Incentive compensation decreased in the September 2015 quarter as compared to the June 2015 quarter due to lower revenues.  The equity based compensation expense of $9.7 million in the September 2015 quarter is the quarterly amortization of the equity grants we have made since our March 2013 IPO. The increase from the June 2015 quarter is due to an annual adjustment reflecting that fewer grants have been forfeited than we originally estimated. FINANCIAL RESULTS — Compensation & Benefits (in millions) September 2015 % of Rev. June 2015 % of Rev. September 2014 % of Rev. Salary 11.8$ 5.9% 11.6$ 5.5% 11.1$ 5.2% Incentive Compensation 64.2 32.4% 67.9 32.1% 67.7 31.9% Benefits & Payroll taxes 5.5 2.8% 5.1 2.4% 5.0 2.4% Equity Based Compensation Expense 9.7 4.9% 9.1 4.3% 6.9 3.2% Subtotal Compensation and Benefits 91.2 46.0% 93.7 44.3% 90.7 42.7% Pre-offering related compensation 10.5 5.3% 10.7 5.1% 12.4 5.8% Total Compensation and Benefits 101.7$ 51.3% 104.4$ 49.4% 103.1$ 48.5% For the Three Months Ended


 
a r t i s a n p a r t n e r s a s s e t m a n a g e m e n t 18 FINANCIAL RESULTS — Capital Management ¹ Calculated in accordance with debt agreements. $182.3 $217.7 4Q14 3Q15 Cash (in millions) $200.0 $200.0 4Q14 3Q15 Borrowings (in millions) 0.5x 0.5x 4Q14 3Q15 Leverage Ratio1 $107.5 $118.3 4Q14 3Q15 Equity (in millions)


 
a r t i s a n p a r t n e r s a s s e t m a n a g e m e n t 19 FINANCIAL RESULTS — Dividends Time periods noted above represent the period in which the dividends were paid. $0.43 $0.55 $0.60 $0.60 $0.60 $0.60 2013 2014 1Q15 2Q15 3Q15 4Q15 Quarterly Dividend Rate


 
APPENDIX


 
a r t i s a n p a r t n e r s a s s e t m a n a g e m e n t 21 RECONCILIATION OF GAAP TO NON-GAAP (“ADJUSTED”) MEASURES (in millions) September 30 June 30 September 30 September 30 September 30 2015 2015 2014 2015 2014 Net income attributable to Artisan Partners Asset Management Inc. (GAAP) 18.4 23.8 20.4 61.7 48.3 Add back: Net income (loss) attributable to noncontrolling interests - APH 31.8 35.5 43.2 101.2 132.9 Add back: Provision for income taxes 11.6 16.5 15.4 33.2 35.2 Add back: Pre-offering related compensation - share-based awards 10.5 10.7 12.4 31.6 52.2 Add back: Offering related proxy expense - - - - 0.1 Add back: Net (gain) loss on the tax receivable agreements 5.8 - (0.3) 12.2 4.2 Adjusted income (loss) before income taxes 78.1 86.5 91.3 240.0 272.9 Less: Adjusted provision for income taxes 28.9 32.1 33.7 88.8 99.5 Adjusted net income (loss) (Non-GAAP) 49.2 54.4 57.4 151.1 173.4 - - Average shares outstanding (in millions) - - Class A common shares 36.4 36.0 30.4 35.0 26.2 Assumed vesting, conversion or exchange of: - - Unvested restricted shares 3.0 3.3 2.6 3.1 1.9 Convertible preferred shares outstanding - - - - 0.5 Artisan Partners Holdings LP units outstanding (non-controlling interest) 34.1 34.2 39.7 35.3 43.3 Adjusted shares 73.5 73.5 72.7 73.4 71.9 - - Adjusted net income per adjusted share (Non-GAAP) 0.67$ 0.74$ 0.79$ 2.06$ 2.41$ - - Operating income (loss) (GAAP) 70.6 78.3 81.0 216.7 229.0 Add back: Pre-offering related compensation - share-based awards 10.5 10.7 12.4 31.6 52.2 Add back: Offering related proxy expense - - - - 0.1 Adjusted operating income (loss) (Non-GAAP) 81.1 89.0 93.4 248.3 281.2 - - Adjusted operating margin (Non-GAAP) 40.9% 42.1% 44.0% 40.5% 45.2% Three Months Ended Nine Months Ended


 
a r t i s a n p a r t n e r s a s s e t m a n a g e m e n t 22 LONG-TERM INVESTMENT RESULTS Source: Artisan Partners/MSCI/Russell/BofA Merrill Lynch. Average Annual Total Returns (Gross) represents gross of fees performance for the Artisan Composites. Value add measures the average annual outperformance or underperformance of the gross composite return of each Artisan Partners strategy compared to its broad-based benchmark. Periods less than one year are not annualized. See Notes & Disclosures at the end of this presentation for more information about our investment performance. Average Annual Value-Added As of September 30, 2015 1 Yr 3 Yr 5 Yr 7 Yr 10 Yr Inception Since Inception (bp) Global Equity Team Artisan Non-U.S. Growth (Inception: 1-Jan-96) -8.70% 6.83% 7.92% 7.21% 6.17% 10.32% 609 MSCI EAFE Index -8.66% 5.63% 3.98% 3.77% 2.97% 4.24% Artisan Non-U.S. Small-Cap Growth (Inception: 1-Jan-02) 3.43% 10.35% 9.14% 11.66% 9.23% 14.20% 447 MSCI EAFE Small Cap Index 0.30% 10.17% 7.30% 8.53% 4.65% 9.73% Artisan Global Equity (Inception 1-Apr-10) 1.59% 11.78% 12.84% --- --- 12.10% 582 MSCI All Country World Index -6.66% 6.95% 6.82% --- --- 6.27% Artisan Global Small-Cap Growth (Inception 1-Jul-13) -1.23% --- --- --- --- 4.29% -187 MSCI All Country World Small Cap Index -3.28% --- --- --- --- 6.16% U.S. Value Team Artisan U.S. Mid-Cap Value (Inception: 1-Apr-99) -7.37% 10.23% 11.26% 10.15% 8.31% 13.11% 432 Russell Midcap® Index -0.25% 13.91% 13.40% 11.37% 7.86% 8.79% Artisan U.S. Small-Cap Value (Inception: 1-Jun-97) -10.46% 3.10% 4.78% 5.09% 5.20% 10.64% 329 Russell 2000® Index 1.25% 11.02% 11.73% 8.63% 6.54% 7.35% Artisan Value Equity (Inception: 1-Jul-05) -11.14% 6.26% 9.59% 8.02% 6.14% 6.29% -88 Russell 1000® Index -0.61% 12.66% 13.41% 10.01% 6.95% 7.18% Growth Team Artisan U.S. Mid-Cap Growth (Inception: 1-Apr-97) 4.45% 14.28% 14.97% 14.39% 11.11% 15.49% 560 Russell Midcap® Index -0.25% 13.91% 13.40% 11.37% 7.86% 9.89% Artisan U.S. Small-Cap Growth (Inception: 1-Apr-95) 8.02% 12.33% 16.10% 13.26% 7.81% 9.88% 117 Russell 2000® Index 1.25% 11.02% 11.73% 8.63% 6.54% 8.71% Artisan Global Opportunities (Inception: 1-Feb-07) 0.50% 10.91% 13.15% 12.29% --- 8.73% 621 MSCI All Country World Index -6.66% 6.95% 6.82% 6.03% --- 2.52% Global Value Team Artisan Non-U.S. Value (Inception: 1-Jul-02) -3.75% 11.06% 10.60% 10.73% 9.21% 12.59% 691 MSCI EAFE Index -8.66% 5.63% 3.98% 3.77% 2.97% 5.68% Artisan Global Value (Inception: 1-Jul-07) -3.33% 11.55% 12.71% 11.59% --- 7.28% 568 MSCI All Country World Index -6.66% 6.95% 6.82% 6.03% --- 1.60% Emerging Markets Team Artisan Emerging Markets (Inception: 1-Jul-06) -19.47% -6.14% -6.14% 0.86% --- 2.15% -91 MSCI Emerging Markets Index -19.28% -5.27% -3.57% 2.55% --- 3.06% Credit Team Artisan High Income (Inception: 1-Apr-14) 2.74% --- --- --- --- 3.42% 543 BofA Merrill Lynch High Yield Master II Index -3.57% --- --- --- --- -2.00% Developing World Team Artisan Developing World (Inception: 1-Jul-15) --- --- --- --- --- -16.43% 147 MSCI Emerging Markets Index --- --- --- --- --- -17.90% Average Annual Total Returns (Gross)


 
a r t i s a n p a r t n e r s a s s e t m a n a g e m e n t 23 NOTES & DISCLOSURES Forward-Looking Statements Certain information in this presentation, and other written or oral statements made by or on behalf of Artisan Partners, are “forward-looking statements” within the meaning of the federal securities laws. Statements regarding future events and developments and the company’s 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. These forward-looking statements are only predictions based on current expectations and projections about future events. These 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 or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements. Among the important factors that could cause actual results, level of activity, performance or achievements to differ materially from those indicated by such forward-looking statements are: fluctuations in quarterly and annual results, incurrence of net losses, adverse effects of management focusing on implementation of a growth strategy, failure to develop and maintain the Artisan Partners brand 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, 2014, filed with the SEC on February 25, 2015. The company undertakes no obligation to update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this presentation. Investment Performance We measure the results of our “composites”, which represent the aggregate performance of all discretionary client accounts, including mutual funds, invested in the same strategy except those accounts with respect to which we believe client-imposed socially based restrictions may have a material impact on portfolio construction and those accounts managed in a currency other than U.S. dollars (the results of these accounts, which represented approximately 8% of our assets under management at September 30, 2015, are maintained in separate composites, which are not presented in these materials). Results for any investment strategy described herein, and for different investment products within a strategy, are affected by numerous factors, including different material market or economic conditions; different investment management fee rates, brokerage commissions and other expenses; and the reinvestment of dividends or other earnings. The returns for any strategy may be positive or negative, and past performance does not guarantee future results. Composite returns are presented gross of investment advisory fees applied to client accounts. Fees, if reflected, would reduce the results presented for an investor in an account managed within a Composite. In these materials, we present “Value-Added”, which is the amount in basis points by which the average annual gross composite return of each of our strategies has outperformed or underperformed the market index most commonly used by our clients to compare the performance of the relevant strategy. The market indices used to compute the value added for each of our strategies are as follows: Non-U.S. Growth Strategy / Non-U.S. Value Strategy—MSCI EAFE Index; Global Equity Strategy / Global Opportunities Strategy / Global Value Strategy—MSCI ACWI Index; Global Small-Cap Growth Strategy—MSCI ACWI Small Cap Index; Non-U.S. Small-Cap Growth Strategy—MSCI EAFE Small Cap Index; U.S. Mid-Cap Growth Strategy / U.S. Mid- Cap Value Strategy—Russell Midcap® Index; U.S. Small-Cap Growth Strategy / U.S. Small-Cap Value Strategy—Russell 2000® Index; Value Equity Strategy—Russell 1000® Index; Developing World Strategy / Emerging Markets Strategy—MSCI Emerging Markets Index; High Income Strategy—BofA Merrill Lynch High Yield Master II Index. Unlike the BofA Merrill Lynch High Yield Master ll Index, the Artisan High Income Strategy may hold loans and other security types. At times, this can cause material differences in relative performance. In this document, we present information based on Morningstar, Inc., or Morningstar, ratings for series of Artisan Partners Funds, Inc. (“Artisan Funds”). The Morningstar ratings refer to the ratings by Morningstar of the share class of the respective series of Artisan Funds with the earliest inception date and are based on a 5-star scale. Morningstar data © 2015 Morningstar, Inc.; all rights reserved. Morningstar data contained herein (1) is proprietary to Morningstar and/or its content providers, (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. For each fund with at least a three-year history, Morningstar calculates a Morningstar Rating™ which is based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a fund's monthly performance, including the effects of sales charges, loads, and redemption fees, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of funds in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars and the bottom 10% receive 1 star. Ratings are based on risk-adjusted returns and are historical and do not represent future results. The Overall Morningstar RatingTM for a fund is derived from a weighted average of the performance figures associated with its three-year, five-year, and ten-year (if applicable) Morningstar Ratings metrics. The Artisan Funds, the ratings of which form the basis for the information reflected in the table on page 5, and the categories in which they are rated are: Artisan International Fund—Foreign Large Blend Funds Category; Artisan International Small Cap Fund—Foreign Small/Mid Growth Funds Category; Artisan Global Equity Fund—World Stock; Artisan Small Cap Value Fund—Small Value Funds Category; Artisan Mid Cap Value Fund—Mid- Cap Value Funds Category; Artisan Value Equity Fund—Large Value Funds Category; Artisan Mid Cap Fund—Mid-Cap Growth Funds Category; Artisan Global Opportunities Fund—World Stock; Artisan Small Cap Fund—Small Growth Funds Category; Artisan International Value Fund—Foreign Small/Mid Funds Category; Artisan Global Value Fund—World Stock; Artisan Emerging Markets Fund— Diversified Emerging Markets Funds Category. Morningstar ratings are initially given on a fund’s three year track record and change monthly. We also present information based on Lipper rankings for series of Artisan Funds. Lipper rankings are based on total return, are historical and do not represent future results. The number of funds in a category may include multiple share classes of the same fund, which may have a material impact on a fund’s ranking within a category. Lipper, a Thomson Reuters company, is the owner of all trademarks and copyrights relating to Lipper rankings.


 
a r t i s a n p a r t n e r s a s s e t m a n a g e m e n t 24 NOTES & DISCLOSURES Financial Information Throughout these materials, we present historical information about our assets under management and our average assets under management for certain periods. We use our information management systems to track our assets under management and we believe the information in these materials regarding our assets under management is accurate in all material respects. We also present information regarding the amount of our assets under management sourced through particular distribution channels. The allocation of assets under management sourced through particular distribution channels involves estimates and the exercise of judgment. We have presented the information on our assets under management sourced by distribution channel in the way in which we prepare and use that information in the management of our business. Data sourced by distribution channel on our assets under management are not subject to our internal controls over financial reporting. Rounding Any discrepancies included in these materials between totals and the sums of the amounts listed are due to rounding. Trademark Notice The MSCI EAFE Index, the MSCI EAFE Growth Index, the MSCI EAFE Small Cap Index, the MSCI EAFE Value Index, the MSCI ACWI Index, the MSCI ACWI Small Cap Index and the MSCI Emerging Markets Index are trademarks of MSCI Inc. MSCI Inc. is the owner of all copyrights relating to these indices and is the source of the performance statistics of these indices that are referred to in these materials. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used to create indices or financial products. This report is not approved or produced by MSCI. The Russell 2000® Index, the Russell 2000® Value Index, the Russell Midcap® Index, the Russell Midcap® Value Index, the Russell 1000® Index, the Russell 1000® Value Index, the Russell Midcap® Growth Index, the Russell 1000® Growth Index and the Russell 2000® Growth Index are trademarks of Russell Investment Group. Russell Investment Group is the source and owner of the Russell Index data contained or reflected in this material and all trademarks and copyrights related thereto. The presentation may contain confidential information and unauthorized use, disclosure, copying, dissemination or redistribution is strictly prohibited. This is a presentation of Artisan Partners. Russell Investment Group is not responsible for the formatting or configuration of this material or for any inaccuracy in Artisan Partners' presentation thereof. The BofA Merrill Lynch US High Yield Master II Index tracks the performance of below investment grade $US- denominated corporate bonds publicly issued in the US domestic market. An investment cannot be made directly in an index. Source BofA Merrill Lynch, used with permission. BofA Merrill Lynch is licensing the BofA Merrill Lynch indices “as is,” makes no warranties regarding same, does not guarantee the suitability, quality, accuracy, timeliness, and/or completeness of the BofA Merrill Lynch indices or any data included in, related to, or derived there from, assumes no liability in connection with their use, and does not sponsor, endorse, or recommend Artisan Partners, or any of its products or services. Presentation None of the information in these materials constitutes either an offer or a solicitation to buy or sell any fund securities, nor is any such information a recommendation for any fund security or investment service. Copyright 2015 Artisan Partners. All rights reserved. This presentation may not be reproduced in whole or in part without Artisan Partners’ permission.