Dear Fellow Shareholders,
As I write this letter, we are amid the COVID-19 pandemic. In a very quick time, we have seen the world transition from relatively stable to extreme uncertainty about the impact of the virus on loved ones, the global economy and life as we know it.
In times like these, we believe it's important to remain disciplined in our approach to running our business and focused on what we can control.
As a talent firm, people are our most important asset. We have aggressively taken steps so that our people are safe and able to care for themselves, their families and loved ones. This included providing technology and resources to effectively work from home. Today, most of our employees are working from home, communicating electronically and through phone and video streaming capabilities. We've seen little disruption in our ability to deliver for clients, while operating responsibly.
Our financial model was built to withstand market volatility and has served us well over the last 25 years. Most of our operating expenses vary directly with revenue, which provides stability and predictability during global market volatility. We take great care in our budgeting process to appropriately balance the percentage of our expenses that are variable with those that are fixed in nature. This includes stress testing our budgets and knowing where we can pull back on expenses without sacrificing the quality of our services.
Our business remains strong, our financial model continues to serve us well, and our business is more diversified than ever. We have added additional talent, developed our Third Generation strategies and strengthened our distribution and operational capabilities. We now have nine autonomous investment teams, 18 investment strategies spanning a range of asset classes, multiple distribution channels across geographies and robust operational capabilities to communicate with and deliver our services to clients. In addition, as a public company we are transparent and have a sustainable, flexible capital structure.
Our results for 2019 reflect the diversity and strength of our model. On January 1, 2019, our AUM was $96.2 billion reflecting the sharp decline in global equity markets in the fourth quarter of 2018. By the end of 2019, as a result of rising global equity markets and strong excess performance, our AUM was $121.0 billion. The excess returns of our strategies (returns greater than benchmarks) added approximately $4.8 billion to our AUM, more than offsetting net client cash outflows of $3.3 billion.
Revenues of $799 million for 2019 reflected the growth in our AUM. Operating expenses were in line with the expectations of our financial model, and we continued making investments in future growth through office upgrades for several investment teams and targeted hires in investments and distribution.
Our operating margin was 35.5% and adjusted net income was $2.67 per adjusted share. With respect to 2019, we returned $3.08 per share in dividends to shareholders, translating into a 12% yield on our average share price during 2019.
Our business is not capital intensive and our balance sheet is strong. We maintain approximately $100 million of excess cash to fund operations and seed new products and we have modest debt of $200 million.
Now more than ever, I am appreciative of our business and financial model. Despite the unprecedented disruption to people's lives and the economy as a result of the COVID-19 crisis, our model continues to operate and act as intended. In 2020, AUM levels are down meaningfully, which will drive revenues down proportionately beginning in the second quarter. Nonetheless, our firm remains profitable with healthy margins. Our balance sheet is strong. And we are well positioned to continue to deliver for our clients, associates and shareholders.
Stay safe and be well.
Charles (C.J.) Daley, Jr.
Chief Financial Officer
Artisan Partners