Stockholders' Equity

12 Months Ended

Dec. 31, 2014

Stockholders' Equity Note [Abstract]

Shareholder's equity

As of December 31, 2014, APAM had the following authorized and outstanding equity:

		Outstanding
	Authorized	December 31, 2014	December 31, 2013	Voting Rights (1)	Economic Rights
Common shares
Class A, par value $0.01 per share	500,000,000	34,238,131	19,807,436	1 vote per share	Proportionate
Class B, par value $0.01 per share	200,000,000	21,463,033	25,271,889	5 votes per share	None
Class C, par value $0.01 per share	400,000,000	17,226,379	25,206,554	1 vote per share	None
Preferred shares
Convertible preferred, par value $0.01 per share	15,000,000	—	1,198,128	1 vote per share	Proportionate
(1) The Company’s employees to whom Artisan has granted equity have entered into a stockholders agreement with respect to all shares of APAM common stock they have acquired from the Company and any shares they may acquire from the Company in the future, pursuant to which they granted an irrevocable voting proxy to a Stockholders Committee. As of December 31, 2014, Artisan’s employees held 2,700,634 shares of Class A common stock subject to the agreement and all 21,463,033 outstanding shares of Class B common stock.

APAM is dependent on cash generated by Holdings to fund any dividends. Generally, Holdings will make distributions to all of its partners, including APAM, based on the proportionate ownership each holds in Holdings. APAM will fund dividends to its stockholders from its proportionate share of those distributions after provision for its taxes and other obligations. APAM declared and paid dividends of $3.83 and $0.86 per share of outstanding Class A common stock during the years ended December 31, 2014 and 2013, respectively. During the year ended December 31, 2014, APAM paid dividends of $3.81 per share of outstanding convertible preferred stock.

APAM issued (cancelled) the following shares during the years ended December 31, 2014 and 2013:

	Total Stock		Class A Common Stock		Class B Common Stock		Class C Common Stock		Convertible Preferred Stock
Balance at January 1, 2013	—		—		—		—		—
Initial Public Offering	69,991,505		12,712,279		26,271,120		28,442,643		2,565,463
2013 Follow-On Offering	—		5,520,000		—		(4,152,665	)	(1,367,335	)
Restricted Share Award Grants	1,575,157		1,575,157		—		—		—
Employee-Partner Terminations	(82,655	)	—		(999,231	)	916,576		—
Balance at December 31, 2013	71,484,007		19,807,436		25,271,889		25,206,554		1,198,128
2014 Follow-On Offering	—		9,284,337		(3,705,453	)	(4,835,767	)	(743,117	)
H&F Conversion	—		1,836,898		—		(1,381,887	)	(455,011	)
Holdings Common Unit Exchanges	—		1,865,924		(10,260	)	(1,855,664	)	—
Restricted Share Award Grants	1,444,688		1,444,688		—		—		—
Restricted Share Award Net Share Settlement	(5,880	)	(5,880	)	—		—		—
Restricted Stock Unit Settlement (1)	4,728		4,728		—		—		—
Employee-Partner Terminations	—		—		(93,143	)	93,143		—
Balance at December 31, 2014	72,927,543		34,238,131		21,463,033		17,226,379		—
(1) There were 20,612 and 16,670 restricted stock units outstanding at December 31, 2014 and 2013, respectively.

Each Class A, Class B, Class D and Class E common unit of Holdings (together with the corresponding share of Class B or Class C common stock) is exchangeable for one share of Class A common stock. The preferred units of Holdings (together with the corresponding shares of Class C common stock) were also exchangeable for Class A common stock generally on a one-for-one basis. APAM’s convertible preferred stock was convertible into Class A common stock generally on a one-for-one basis.

Upon termination of employment with Artisan, an employee-partner’s vested Class B common units are automatically exchanged for Class E common units; unvested Class B common units are forfeited. The employee-partner’s shares of Class B common stock are canceled and APAM issues the former employee-partner a number of shares of Class C common stock equal to the former employee-partner’s number of Class E common units. The former employee-partner’s Class E common units are exchangeable for Class A common stock subject to the same restrictions and limitations on exchange applicable to the other common units of Holdings.

Artisan Partners Holdings - Partners’ Equity

Prior to the IPO, Holdings was a private company. Holdings has several outstanding classes of partnership units held by investors.

Holdings makes cash distributions to the holders of its partnership units under the terms of the partnership agreement. The distributions are recorded in the financial statements on the declaration date, or on the payment date in lieu of a declaration date.

Holdings’ partnership distributions totaled $427.2 million, $332.0 million and $135.0 million for the years ended December 31, 2014, 2013 and 2012, respectively. The portion of these distributions made prior to the IPO to the holders of Class B common units (which were classified as liability awards prior to the IPO) are reflected as compensation and benefits expense within the Consolidated Statements of Operations, and totaled $65.7 million and $54.2 million for the years ended December 31, 2013 and 2012, respectively. The portion of these distributions made prior to the IPO to the other partners of Holdings and, after the IPO, to all partners are recorded as a reduction to consolidated stockholders’ equity, with the exception of the portion of distributions made to APAM, which is eliminated upon consolidation. Holdings distributions to APAM totaled $160.4 million and $41.5 million for the years ended December 31, 2014 and 2013.