Noncontrolling Interest - Holdings

12 Months Ended

Dec. 31, 2019

Note 7. Noncontrolling Interests - Holdings

Net income attributable to noncontrolling interests - Artisan Partners Holdings in the Consolidated Statements of Operations represents the portion of earnings or loss attributable to the equity ownership interests in Holdings held by the limited partners of Holdings. As of December 31, 2019, APAM held approximately 73% of the equity ownership interests in Holdings.

Limited partners of Artisan Partners Holdings are entitled to exchange partnership units (along with a corresponding number of shares of Class B or C common stock of APAM) for shares of Class A common stock from time to time (the "Holdings Common Unit Exchanges"). The Holdings Common Unit Exchanges increase APAM's equity ownership interest in Holdings and result in an increase to deferred tax assets and amounts payable under the tax receivable agreements. See Note 11, “Income Taxes and Related Payments”.

In order to maintain the one-to-one correspondence of the number of Holdings partnership units and APAM common shares, Holdings will issue one general partner (“GP”) unit to APAM for each share of Class A common stock issued by APAM. For the years ended December 31, 2019, 2018 and 2017, APAM’s equity ownership interest in Holdings has increased as a result of the following transactions:


	Holdings GP Units	Limited Partnership Units	Total	APAM Ownership %
Balance at January 1, 2017	42,149,436	32,205,433	74,354,869	57	%
Issuance of APAM Restricted Shares, Net	1,218,604	—	1,218,604	1	%
2017 Follow-On Offering	5,626,517	(5,626,517)	—	7	%
Holdings Common Unit Exchanges	1,472,197	(1,472,197)	—	2	%
Forfeitures from Employee Terminations ⁽¹⁾	(3,628)	—	(3,628)	—	%
Balance at December 31, 2017	50,463,126	25,106,719	75,569,845	67	%
Issuance of APAM Restricted Shares, Net⁽¹⁾	1,440,282	—	1,440,282	—	%
2018 Follow-On Offering	644,424	(644,424)	—	1	%
Holdings Common Unit Exchanges	1,590,611	(1,590,611)	—	2	%
Forfeitures from Employee Terminations ⁽¹⁾	(67,255)	—	(67,255)	—	%
Balance at December 31, 2018	54,071,188	22,871,684	76,942,872	70	%
Issuance of APAM Restricted Shares, Net⁽¹⁾	876,271	—	876,271	—	%

Holdings Common Unit Exchanges	1,499,655	(1,499,655)	—	3	%
Forfeitures from Employee Terminations⁽¹⁾	(17,289)	—	(17,289)	—	%
Balance at December 31, 2019	56,429,825	21,372,029	77,801,854	73	%
⁽¹⁾The impact of the transaction on APAM’s ownership percentage was less than 1%.

Changes in ownership of Holdings are accounted for as equity transactions because APAM continues to have a controlling interest in Holdings. Additional paid-in capital and noncontrolling interests - Artisan Partners Holdings in the Consolidated Statements of Financial Condition are adjusted to reallocate Holdings’ historical equity to reflect the change in APAM’s ownership of Holdings.

The reallocation of equity had the following impact on the Consolidated Statements of Financial Condition:


Statement of Financial Condition	For the Years Ended December 31,
			2019			2018
Additional paid-in capital	$	(3,533)		$	(4,878)
Noncontrolling interest - Artisan Partners Holdings	3,584			4,923
Accumulated other comprehensive income (loss)	(51)			(45)
Net impact to financial condition	$	—		$	—

In addition to the reallocation of historical equity, the change in ownership resulted in an increase to deferred tax assets and additional paid-in capital of $0.7 million and $0.8 million for the years ended December 31, 2019 and 2018, respectively.