What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-04-29 compared with 2020-10-29 · 92 added, 222 removed, 437 unchanged (42% of the section changed)

7 unchanged sentences

Assets of consolidated T.

Rowe Price investment products ($ 2,255.3 million at September 30, 2020 and $ 1,975.3 million at December 31, 2019, related to variable interest entities)

Rowe Price investment products ($ 1,782.9 million at March 31, 2021 and $ 2,497.4 million at December 31, 2020, related to variable interest entities)

1,946.8 2,695.5

6 unchanged sentences

Liabilities of consolidated T.

Rowe Price investment products ($ 36.8 million at September 30, 2020 and $ 27.0 million at December 31, 2019, related to variable interest entities)

Rowe Price investment products ($ 49.0 million at March 31, 2021 and $ 47.7 million at December 31, 2020, related to variable interest entities)

Operating lease liabilities 146.0 154.1

8 unchanged sentences

Common stock, $ .20 par value—authorized 750,000,000 ;

issued 226,375,000 shares at September 30, 2020 and 235,214,000 at December 31, 2019

issued 226,948,000 shares at March 31, 2021 and 227,965,000 at December 31, 2020

Additional capital in excess of par value 654.6 654.6

6 unchanged sentences

(in millions, except per-share amounts)

Three months ended Nine months ended

Three months ended

3/31/2021 3/31/2020

12 unchanged sentences

Non-operating income (loss)

Net gains on investments 84.6 32.1 100.6 194.0

Net gains on consolidated investment products 101.2 11.6 13.3 176.3

Net gains (losses) on investments 68.6 ( 154.6 )

Net gains (losses) on consolidated investment products 37.2 ( 330.3 )

Other income (loss) ( 3.7 ) ( 15.4 )

Total non-operating income 191.6 43.0 106.4 370.3

Total non-operating income (loss) 102.1 ( 500.3 )

Income before income taxes 995.3 206.9

11 unchanged sentences

(in millions)

Three months ended Nine months ended

Three months ended

3/31/2021 3/31/2020

4 unchanged sentences

Rowe Price investment products - variable interest entities ( 18.9 ) ( 25.1 )

Reclassification (gains) losses recognized in non-operating income upon deconsolidation of certain T.

Reclassification gains recognized in non-operating income upon deconsolidation of certain T.

Rowe Price investment products ( 2.6 ) ( .1 )

4 unchanged sentences

( .8 ) ( .1 )

Other comprehensive income (loss) before income taxes 33.5 ( 31.0 ) 14.7 ( 26.9 )

Net deferred tax benefits (income taxes) ( 3.2 ) 3.4 ( .5 ) 2.5

Total other comprehensive income (loss) 30.3 ( 27.6 ) 14.2 ( 24.4 )

Other comprehensive loss before income taxes ( 22.3 ) ( 25.3 )

Net deferred tax benefits 3.0 2.0

Total other comprehensive loss ( 19.3 ) ( 23.3 )

Total comprehensive income 745.5 143.3

5 unchanged sentences

(in millions)

Nine months ended

Three months ended

3/31/2021 3/31/2020

4 unchanged sentences

Stock-based compensation expense

Net gains recognized on investments ( 75.3 ) ( 137.3 )

Net investments in T.

Net (gains) losses recognized on investments ( 59.5 ) 167.3

Net change in T.

Rowe Price investment products used to economically hedge supplemental savings plan liability 22.0 ( 8.9 )

( 19.1 ) ( 20.5 )

Net change in securities held by consolidated T.

12 unchanged sentences

Other investing activity 7.5 .4

Net cash used in investing activities ( 53.1 ) ( 76.7 )

Net cash (used in) provided by investing activities ( 30.8 ) 27.6

Cash flows from financing activities

11 unchanged sentences

2,256.5 1,858.3

Cash and cash equivalents at end of period, including $ 78.0 million at September 30, 2020, and $ 80.9 million at September 30, 2019, held by consolidated T.

Cash and cash equivalents at end of period, including $ 83.7 million at March 31, 2021, and $ 117.7 million at March 31, 2020, held by consolidated T.

Rowe Price investment products

7 unchanged sentences

Redeemable non-controlling interests

Balances at June 30, 2020 226,990 $ 45.4 $ 654.6 $ 6,102.9 $ ( 52.2 ) $ 6,750.7 $ 1,090.1

Balances at December 31, 2020 227,965 $ 45.6 $ 654.6 $ 7,029.8 $ ( 23.0 ) $ 7,707.0 $ 1,561.7

Net income — — — 749.4 — 749.4 15.4

3 unchanged sentences

Shares issued upon option exercises 572 .1 25.3 — — 25.4 —

Restricted shares issued, net of shares withheld for taxes — — — — — — —

Net shares issued upon vesting of restricted stock units 41 — ( 3.7 ) — — ( 3.7 ) —

6 unchanged sentences

Rowe Price investment products — — — — — — ( 739.9 )

Balances at September 30, 2020 226,375 $ 45.3 $ 654.6 $ 6,471.3 $ ( 42.7 ) $ 7,128.5 $ 1,340.2

Balances at March 31, 2021 226,948 $ 45.4 $ 654.6 $ 7,338.7 $ ( 30.5 ) $ 8,008.2 $ 1,012.9

Three months ended 3/31/2020

5 unchanged sentences

equity Redeemable non-controlling interests

Balances at June 30, 2019 235,518 $ 47.1 $ 654.6 $ 5,915.9 $ ( 38.5 ) $ 6,579.1 $ 1,012.3

Net income — — — 545.9 — 545.9 ( .8 )

Other comprehensive income (loss), net of tax — — — — ( 10.2 ) ( 10.2 ) ( 17.4 )

Dividends declared ($ 0.76 per share)

— — — ( 182.7 ) — ( 182.7 ) —

Shares issued upon option exercises 782 .1 36.4 — — 36.5 —

Restricted shares issued, net of shares withheld for taxes — — — — — — —

Net shares issued upon vesting of restricted stock units 18 — ( 1.2 ) — — ( 1.2 ) —

Forfeiture of restricted awards ( 3 ) — — — — — —

Stock-based compensation expense — — 45.5 — — 45.5 —

Restricted stock units issued as dividend equivalents — — — — — — —

Common shares repurchased ( 1,613 ) ( .3 ) ( 80.7 ) ( 92.1 ) — ( 173.1 ) —

Net subscriptions into T.

Rowe Price investment products — — — — — — 181.1

Net deconsolidations of T.

Rowe Price investment products — — — — — — ( 72.3 )

Balances at September 30, 2019 234,702 $ 46.9 $ 654.6 $ 6,187.0 $ ( 48.7 ) $ 6,839.8 $ 1,102.9

(1) Accumulated other comprehensive income.

The accompanying notes are an integral part of these statements.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(shares in thousands;

dollars in millions)

Nine months ended 9/30/2020

outstanding Common

stock Additional

par value Retained

earnings AOCI (1)

stockholders’

equity Redeemable non-controlling interests

Balances at December 31, 2019 235,214 $ 47.0 $ 654.6 $ 6,443.5 $ ( 43.0 ) $ 7,102.1 $ 1,121.0

4 unchanged sentences

Shares issued upon option exercises 1,068 .2 41.1 — — 41.3 —

Restricted shares issued, net of shares withheld for taxes 8 — — — — — —

Shares issued upon vesting of restricted stock units, net of shares withheld for taxes 60 — ( 4.8 ) — — ( 4.8 ) —

Stock-based compensation expense — — 164.3 — — 164.3 —

Restricted stock units issued as dividend equivalents — — .2 ( .2 ) — — —

Common shares repurchased ( 10,763 ) ( 2.1 ) ( 242.5 ) ( 926.0 ) — ( 1,170.6 ) —

Net subscriptions into T.

Rowe Price investment products — — — — — — 307.8

Net deconsolidations of T.

Rowe Price investment products — — — — — — ( 106.9 )

Balances at September 30, 2020 226,375 $ 45.3 $ 654.6 $ 6,471.3 $ ( 42.7 ) $ 7,128.5 $ 1,340.2

Nine months ended 9/30/2019

outstanding Common

stock Additional

par value Retained

earnings AOCI (1)

stockholders’

equity Redeemable non-controlling interests

Balances at December 31, 2018 238,069 $ 47.6 $ 654.6 $ 5,464.1 $ ( 42.0 ) $ 6,124.3 $ 740.3

Net income — — — 1,586.0 — 1,586.0 69.0

Other comprehensive income (loss), net of tax — — — — ( 6.7 ) ( 6.7 ) ( 17.7 )

Dividends declared ($ 2.28 per share)

— — — ( 549.9 ) — ( 549.9 ) —

Shares issued upon option exercises 2,277 .4 118.9 — — 119.3 —

Restricted shares issued, net of shares withheld for taxes 7 — ( .1 ) — — ( .1 ) —

Shares issued upon vesting of restricted stock units, net of shares withheld for taxes 51 — ( 2.6 ) — — ( 2.6 ) —

Forfeiture of restricted awards ( 10 ) — — — — — —

Net shares issued upon vesting of restricted stock units 37 — ( 3.0 ) — — ( 3.0 ) —

Stock-based compensation expense — — 58.3 — — 58.3 —

5 unchanged sentences

Rowe Price investment products — — — — — — ( 20.1 )

Balances at September 30, 2019 234,702 $ 46.9 $ 654.6 $ 6,187.0 $ ( 48.7 ) $ 6,839.8 $ 1,102.9

Balances at March 31, 2020 227,985 $ 45.6 $ 654.6 $ 5,782.9 $ ( 49.1 ) $ 6,434.0 $ 971.0

(1) Accumulated other comprehensive income.

6 unchanged sentences

mutual funds (“U.S.

mutual funds”), subadvised funds, separately managed accounts, collective investment trusts, and other T.

mutual funds”), subadvised funds, separately managed accounts, collective investment trusts, and other

Rowe Price products.

Rowe Price products include:

open-ended investment products offered to investors outside the U.S., and products offered through variable annuity life insurance plans in the U.S.

Rowe Price products include open-ended investment products offered to investors outside the U.S., and products offered through variable annuity life insurance plans in the U.S.

We also provide certain investment advisory clients with related administrative services, including distribution, mutual fund transfer agent, accounting, and shareholder services;

participant recordkeeping and transfer agent services for defined contribution retirement plans;

and trust services.

trust services;

and non-discretionary advisory services through model delivery.

Investment advisory revenues depend largely on the total value and composition of assets under our management.

7 unchanged sentences

The unaudited interim financial information contained in these unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements contained in our 2020 Annual Report.

NEW ACCOUNTING GUIDANCE.

We adopted Accounting Standards Update No.

2018-15 — Intangibles—Goodwill and Other— Internal-Use Software (Subtopic 350-40):

Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract on January 1, 2020 using the prospective method of adoption.

This update required implementation costs incurred in cloud computing arrangements to be deferred and recognized over the term of the hosting arrangement.

A hosting arrangement is an agreement that allows customers, like us, to access and use software on an as-needed basis without having possession of the software.

Beginning on January 1, 2020, we are required to defer such qualifying implementation costs.

As of September 30, 2020, we capitalized an immaterial amount of implementation costs incurred in a cloud computing arrangement.

Accordingly, the adoption of this guidance did not have a material impact on our consolidated balance sheets or our consolidated statements of income.

NEWLY ISSUED BUT NOT YET ADOPTED ACCOUNTING GUIDANCE

We have considered all other newly issued accounting guidance that is applicable to our operations and the preparation of our unaudited condensed consolidated statements, including those we have not yet adopted.

We have considered all newly issued accounting guidance that is applicable to our operations and the preparation of our unaudited condensed consolidated statements, including those we have not yet adopted.

We do not believe that any such guidance has or will have a material effect on our financial position or results of operations.

ECONOMIC RELIEF LEGISLATION

On March 27, 2020, the U.S.

enacted the Coronavirus Aid, Relief and Economic Security ("CARES") Act.

The CARES Act provides economic relief to eligible businesses and individuals impacted by the novel coronavirus pandemic.

The CARES Act’s provisions will not have a material impact on our financial position and results of operations.

NOTE 2 – INFORMATION ABOUT RECEIVABLES, REVENUES, AND SERVICES.

Revenues earned during the three- and nine-month periods ended September 30, 2020 and 2019 under agreements with clients include:

Revenues earned under agreements with clients include:

Three months ended 3/31/2021 Three months ended 3/31/2020

13 unchanged sentences

$ 1,687.8 $ 109.9 $ 29.1 $ 1,826.8 $ 1,327.8 $ 106.9 $ 27.9 $ 1,462.6

Nine months ended 9/30/2020 Nine months ended 9/30/2019

Administrative, distribution, and servicing fees

(in millions)

Investment advisory fees

Administrative fees

Distribution and servicing fees

Investment advisory fees

Administrative fees

Distribution and servicing fees

mutual funds $ 2,638.8 $ 219.0 $ 82.1 $ 2,939.9 $ 2,557.6 $ 215.3 $ 90.4 $ 2,863.3

Subadvised funds, separate accounts, collective investment trusts, and other investment products 1,452.1 — — 1,452.1 1,210.2 — — 1,210.2

Other clients

— 81.8 — 81.8 — 75.7 — 75.7

$ 4,090.9 $ 300.8 $ 82.1 $ 4,473.8 $ 3,767.8 $ 291.0 $ 90.4 $ 4,149.2

(1) Other clients primarily include individuals, defined contribution plans, college savings plans, and institutions related to model delivery.

Total net revenues earned from our related parties, specifically T.

Rowe Price investment products, aggregate $ 1,302.3 million and $ 1,180.9 million for the three months ended September 30, 2020 and 2019, respectively.

Total net revenues earned during the nine months ended September 30, 2020 and 2019 aggregate $ 3,652.8 million and $ 3,421.9 million, respectively.

Accounts receivable from these products aggregate to $ 442.0 million at September 30, 2020, and $ 424.8 million at December 31, 2019.

Rowe Price investment products, aggregate $ 1,482.3 million and $ 1,207.7 million for the three months ended March 31, 2021 and 2020, respectively.

receivable from these products aggregate to $ 540.0 million at March 31, 2021, and $ 523.4 million at December 31, 2020.

In the second quarter of 2020, we changed our fee structure of the target date retirement funds such that our investment advisory fee revenue is now earned at the target date retirement fund level rather than at the underlying mutual fund level.

As a result, we have modified our investment advisory fee and assets under management presentation below to separately breakout the fees earned from clients and related assets under management of our multi-asset portfolios.

As a result, we have modified our investment advisory fee and assets under management presentation below to separately breakout the fees earned and assets under management of our multi-asset portfolios.

All prior periods have been recast to conform to this new presentation and to provide comparability.

The following table details the investment advisory fees earned from clients by their underlying asset class.

Three months ended Nine months ended

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(in millions) 3/31/2021 3/31/2020

7 unchanged sentences

Multi-asset 176.1 134.1

529.8 422.4 1,452.1 1,210.2

Total $ 1,687.8 $ 1,327.8

The following table summarizes the assets under management on which we earn investment advisory fees.

Average during Average during

Three months ended Nine months ended As of

Average during

Three months ended As of

(in billions) 3/31/2021 3/31/2020 3/31/2021 12/31/2020

11 unchanged sentences

investment advisory clients outside the U.S.

account for 8.7 % and 6.9 % of our assets under management at September 30, 2020, and December 31, 2019, respectively.

account for 8.8 % and 9.3 % of our assets under management at March 31, 2021, and December 31, 2020, respectively.

NOTE 3 – INVESTMENTS.

3 unchanged sentences

Investments held at fair value

Rowe Price investment products - discretionary investments $ 1,005.6 $ 1,221.8

Rowe Price investment products - seed capital 160.0 181.1

Rowe Price investment products - supplemental savings plan liability economic hedges 565.3 561.1

Rowe Price investment products

Discretionary investments $ 1,664.3 $ 1,647.7

Seed capital 269.5 169.5

Supplemental savings plan liability economic hedges 766.9 768.1

Investment partnerships and other investments 100.6 95.1

Equity method investments

Rowe Price investment products - discretionary investments 829.1 610.0

Rowe Price investment products - seed capital 166.2 95.6

Rowe Price investment products - supplemental savings plan liability economic hedges 40.4 —

26 % interest in UTI Asset Management Company Limited (India)

Rowe Price investment products

Discretionary investments 245.8 242.9

Seed capital 203.7 178.6

23 % investment in UTI Asset Management Company Limited (India)

Investment partnerships and other investments 2.7 2.4

2 unchanged sentences

The investment partnerships are carried at fair value using net asset value (“NAV”) per share as a practical expedient.

Our interests in these partnerships are generally not redeemable and are subject to significant restrictions on transferability.

Our interests in these partnerships are generally not redeemable and are subject to significant transferability restrictions.

The underlying investments of these partnerships have contractual terms through 2029, though we may receive distributions of liquidating assets over a longer term.

The investment strategies of these partnerships include growth equity, buyout, venture capital, and real estate.

During the three- and nine-months ended September 30, 2020, net gains on investments included $ 75.5 million and $ 53.6 million, respectively, of net unrealized gains related to investments held at fair value that were still held at September 30, 2020.

For the same periods of 2019, the net gains on investments included $ 4.8 million and $ 84.2 million, respectively, of net unrealized gains on investments held at fair value that were still held at September 30, 2019.

During the nine months ended September 30, 2020 and 2019, certain T.

During the three months ended March 31, 2021, net gains on investments included $ 38.8 million of net unrealized gains related to investments held at fair value that were still held at March 31, 2021.

For the same period of 2020, net losses on investments included $ 103.6 million of net unrealized losses related to investments held at fair value that were still held at March 31, 2020.

During the three months ended March 31, 2021 and 2020, certain T.

Rowe Price investment products in which we provided initial seed capital at the time of formation were deconsolidated, as we no longer had a controlling interest.

1 unchanged sentence

Rowe Price investment products as either an equity method investment or an investment held at fair value.

Additionally, during the nine months ended September 30, 2019, certain T.

Additionally, during the three months ended March 31, 2020, certain T.

Rowe Price investment products that were being accounted for as equity method investments were consolidated, as we regained a controlling interest.

The net impact of these changes on our unaudited condensed consolidated balance sheets and statements of income as of the dates the portfolios were deconsolidated or reconsolidated is detailed below.

Three months ended Nine months ended

Three months ended

(in millions) 3/31/2021 3/31/2020

Net increase (decrease) in assets of consolidated T.

Net decrease in assets of consolidated T.

Rowe Price investment products $ ( 928.1 ) $ ( 46.2 )

1 unchanged sentence

Rowe Price investment products $ ( 15.3 ) $ ( 2.4 )

Net increase (decrease) in redeemable non-controlling interests $ ( 44.0 ) $ ( 72.3 ) $ ( 106.9 ) $ ( 81.4 )

Gains (losses) recognized upon deconsolidation $ — $ ( .1 ) $ .1 $ .1

Net decrease in redeemable non-controlling interests $ ( 739.9 ) $ ( 20.1 )

Gains recognized upon deconsolidation $ 2.6 $ .1

The gains or losses recognized upon deconsolidation were the result of reclassifying currency translation adjustments accumulated on certain T.

Rowe Price investment products with non-USD functional currencies from accumulated other comprehensive income to non-operating income.

In October 2020, UTI Asset Management Company Limited (India), one of our equity method investments, held an initial public offering in India.

As part of the offering, we sold a portion of our 26 % interest and recorded a net gain on the sale of approximately $ 3.5 million in the fourth quarter of 2020.

Subsequent to the sale, we have an ownership interest of 23 % in UTI Asset Management Company Limited (India).

VARIABLE INTEREST ENTITIES.

Our investments at September 30, 2020 and December 31, 2019, include interests in variable interest entities that we do not consolidate as we are not deemed the primary beneficiary.

Our investments at March 31, 2021 and December 31, 2020, include interests in variable interest entities that we do not consolidate as we are not deemed the primary beneficiary.

Our maximum risk of loss related to our involvement with these entities is as follows:

2 unchanged sentences

Unfunded capital commitments 11.3 12.3

Uncollected investment advisory and administrative fees 14.0 10.5

Accounts receivable 60.7 13.8

$ 361.6 $ 170.8

The unfunded capital commitments totaling $ 13.2 million at September 30, 2020, and $ 18.1 million at December 31, 2019, relate primarily to the investment partnerships in which we have an existing investment.

The unfunded capital commitments totaling $ 11.3 million at March 31, 2021 and $ 12.3 million at December 31, 2020 relate primarily to the investment partnerships in which we have an existing investment.

In addition to such amounts, a percentage of prior distributions may be called under certain circumstances.

13 unchanged sentences

3/31/2021 12/31/2020

(in millions)

Cash equivalents held in T.

Rowe Price money market funds $ 1,870.9 $ — $ 1,355.6 $ —

Rowe Price investment products - discretionary investments 1,005.6 — 1,221.8 —

Rowe Price investment products - seed capital 149.7 10.3 171.2 9.9

Rowe Price investment products - supplemental savings plan liability economic hedges 565.3 — 561.1 —

(in millions) Level 1

Rowe Price investment products

Cash equivalents held in money market funds 2,487.5 $ — $ 1,931.1 $ —

Discretionary investments 1,664.3 — 1,647.7 —

Seed capital 254.6 14.9 156.6 12.9

Supplemental savings plan liability economic hedges 766.9 768.1 —

Other investments .2 .7 .5 .6

Total $ 5,173.5 $ 15.6 $ 4,504.0 $ 13.5

As required by the accounting guidance, the fair value hierarchy level table above does not include the investment partnerships and other investments for which fair value is estimated using their NAV per share as a practical

The carrying value of these investments as disclosed in Note 3 were $ 96.8 million at September 30, 2020, and $ 99.7 million at December 31, 2019.

The fair value hierarchy level table above does not include the investment partnerships and other investments for which fair value is estimated using their NAV per share as a practical expedient.

The carrying value of these investments as disclosed in Note 3 were $ 99.7 million at March 31, 2021, and $ 94.0 million at December 31, 2020.

NOTE 5 – CONSOLIDATED T.

23 unchanged sentences

$ 159.2 $ 1,733.9 $ 1,893.1 $ 188.1 $ 2,449.7 $ 2,637.8

(1) Cash and cash equivalents includes $ 5.1 million at September 30, 2020, and $ 9.1 million at December 31, 2019, of T.

(1) Cash and cash equivalents includes $ 2.8 million at March 31, 2021, and $ 7.0 million at December 31, 2020, of T.

Rowe Price money market mutual funds.

(2) Investments includes $ 18.9 million at September 30, 2020, and $ 40.2 million at December 31, 2019 of other T.

(2) Investments include $ 24.4 million at March 31, 2021, and $ 26.9 million at December 31, 2020 of other T.

Rowe Price investment products.

6 unchanged sentences

The operating results of the consolidated T.

Rowe Price investment products for the three- and nine-months ended September 30, 2020 and 2019, are reflected in our unaudited condensed consolidated statements of income as follows:

Rowe Price investment products for the three months ended March 31, 2021 and 2020, are reflected in our unaudited condensed consolidated statements of income as follows:

Three months ended

9 unchanged sentences

$ 5.9 $ 27.8 $ 33.7 $ ( 35.4 ) $ ( 298.6 ) $ ( 334.0 )

Nine months ended

9/30/2020 9/30/2019

(in millions) Voting

interest entities Variable interest entities Total Voting

interest entities Variable interest entities Total

Operating expenses reflected in net operating income $ ( 1.2 ) $ ( 10.5 ) $ ( 11.7 ) $ ( 1.6 ) $ ( 9.0 ) $ ( 10.6 )

Net investment income (loss) reflected in non-operating income ( 5.7 ) 19.0 13.3 20.9 155.4 176.3

Impact on income before taxes $ ( 6.9 ) $ 8.5 $ 1.6 $ 19.3 $ 146.4 $ 165.7

Net income (loss) attributable to T.

Rowe Price Group $ ( 2.7 ) $ ( .1 ) $ ( 2.8 ) $ 14.6 $ 82.1 $ 96.7

Net income (loss) attributable to redeemable non-controlling interests ( 4.2 ) 8.6 4.4 4.7 64.3 69.0

$ ( 6.9 ) $ 8.5 $ 1.6 $ 19.3 $ 146.4 $ 165.7

The operating expenses of the consolidated investment products are reflected in other operating expenses.

In preparing our unaudited condensed consolidated financial statements, we eliminated operating expenses of $ 2.7 million and $ 2.6 million for the three months ended September 30, 2020 and 2019, respectively, against the investment advisory and administrative fees earned from these products.

Operating expenses eliminated for the nine months ended September 30, 2020 and 2019, were $ 7.3 million and $ 6.3 million, respectively.

The net investment income (loss) reflected in non-operating income (loss) includes dividend and interest income and realized and unrealized gains and losses on the underlying securities held by the consolidated T.

In preparing our unaudited condensed consolidated financial statements, we eliminated operating expenses of $ 1.3 million and $ 2.5 million for the three months ended March 31, 2021 and 2020, respectively, against the investment advisory and administrative fees earned from these products.

The net investment income (loss) reflected in non-

operating income (loss) includes dividend and interest income and realized and unrealized gains and losses on the underlying securities held by the consolidated T.

Rowe Price investment products.

The table below details the impact of these consolidated investment products on the individual lines of our unaudited condensed consolidated statements of cash flows for the nine months ended September 30, 2020 and 2019.

Nine months ended

The table below details the impact of these consolidated investment products on the individual lines of our unaudited condensed consolidated statements of cash flows for the three months ended March 31, 2021 and 2020.

Three months ended

3/31/2021 3/31/2020

6 unchanged sentences

Net cash used in investing activities ( 9.1 ) ( 18.2 ) ( 27.3 ) ( .8 ) — ( .8 )

Net cash provided by in financing activities 124.4 269.5 393.9 15.5 529.3 544.8

Net cash provided by financing activities 36.7 112.3 149.0 2.7 116.2 118.9

Effect of exchange rate changes on cash and cash equivalents of consolidated

7 unchanged sentences

$ 3.0 $ 80.7 $ 83.7 $ 23.1 $ 94.6 $ 117.7

The net cash provided by financing activities during the nine months ended September 30, 2020 and 2019 includes $ 95.2 million and $ 157.7 million, respectively, of net subscriptions we made into the consolidated T.

The net cash provided by financing activities during the three months ended March 31, 2021 and 2020 includes $ 34.1 million and $ 42.8 million, respectively, of net subscriptions we made into the consolidated T.

Rowe Price investment products, net of dividends received.

20 unchanged sentences

NOTE 6 – STOCKHOLDERS’ EQUITY.

Accounts payable and accrued expenses includes liabilities of $ 12.2 million at December 31, 2019, for common stock repurchases that settled during the first week of January 2020.

Accounts payable and accrued expenses includes liabilities of $ 10.9 million at March 31, 2021, and $ 2.5 million at December 31, 2020, for common stock repurchases that settled during the first week of April 2021 and January 2021, respectively.

NOTE 7 – STOCK-BASED COMPENSATION.

STOCK OPTIONS.

The following table summarizes the status of, and changes in, our stock options during the nine months ended September 30, 2020.

The following table summarizes the status of, and changes in, our stock options during the three months ended March 31, 2021.

Options Weighted-

1 unchanged sentence

Exercised ( 748,203 ) $ 72.28

Forfeited ( 6,874 ) $ 74.48

Outstanding at September 30, 2020 4,825,667 $ 72.39

Exercisable at September 30, 2020 4,165,306 $ 71.85

Outstanding at March 31, 2021 3,580,853 $ 72.57

Exercisable at March 31, 2021 3,580,853 $ 72.57

RESTRICTED SHARES AND STOCK UNITS.

The following table summarizes the status of, and changes in, our nonvested restricted shares and restricted stock units during the nine months ended September 30, 2020.

The following table summarizes the status of, and changes in, our nonvested restricted shares and restricted stock units during the three months ended March 31, 2021.

Weighted-average

4 unchanged sentences

Forfeited — ( 19,489 ) $ 114.66

Nonvested at September 30, 2020 7,412 6,574,702 $ 99.07

Nonvested at September 30, 2020, includes 403,008 performance-based restricted stock units, including 318,768 restricted stock units for which the performance period has expired and the performance threshold has been met.

Nonvested at March 31, 2021 7,412 6,286,575 $ 116.73

Nonvested at March 31, 2021, includes performance-based restricted stock units of 361,609 .

These nonvested performance-based restricted stock units include 198,205 units for which the performance period has lapsed, and the performance threshold has been met.

FUTURE STOCK-BASED COMPENSATION EXPENSE.

The following table presents the compensation expense to be recognized over the remaining vesting periods of the stock-based awards outstanding at September 30, 2020.

The following table presents the compensation expense to be recognized over the remaining vesting periods of the stock-based awards outstanding at March 31, 2021.

Estimated future compensation expense will change to reflect future grants of restricted stock awards and units, future option grants, changes in the probability of performance thresholds being met, and adjustments for actual forfeitures.

(in millions)

Second quarter 2021 $ 56.9

Third quarter 2021 56.7

Fourth quarter 2021 50.2

6 unchanged sentences

No outstanding stock options had an anti-dilutive impact on the diluted earnings per common share calculation in the periods presented.

Three months ended Nine months ended

Three months ended

(in millions) 3/31/2021 3/31/2020

7 unchanged sentences

NOTE 9 – OTHER COMPREHENSIVE INCOME AND ACCUMULATED OTHER COMPREHENSIVE LOSS.

The changes in each component of accumulated other comprehensive loss, including reclassification adjustments for the three months ended September 30, 2020 and 2019 are presented in the table below.

The changes in each component of accumulated other comprehensive loss, including reclassification adjustments for the three months ended March 31, 2021 and 2020 are presented in the table below.

Three months ended 3/31/2021 Three months ended 3/31/2020

14 unchanged sentences

Balances at end of period $ ( 43.9 ) $ 13.4 $ ( 30.5 ) $ ( 47.0 ) $ ( 2.1 ) $ ( 49.1 )

The other comprehensive income (loss) in the table above excludes $ 20.8 million in the 2020 quarter and $( 17.4 ) million in the 2019 quarter of other comprehensive income (loss) related to redeemable non-controlling interests held in our consolidated products.

The changes in each component of accumulated other comprehensive loss, including reclassification adjustments for the nine months ended September 30, 2020 and 2019, are presented in the table below.

Nine months ended 9/30/2020 Nine months ended 9/30/2019

(in millions) Equity method investments Consolidated T.

Rowe Price investment products - variable interest entities Total currency translation adjustments Equity method investments

Consolidated T.

Rowe Price investment products - variable interest entities Total currency translation adjustments

Balances at beginning of period $ ( 46.9 ) $ 3.9 $ ( 43.0 ) $ ( 48.8 ) $ 6.8 $ ( 42.0 )

Other comprehensive income (loss) before reclassifications and income taxes ( 9.4 ) 10.3 .9 5.4 ( 14.4 ) ( 9.0 )

Reclassification adjustments recognized in non-operating income — ( .1 ) ( .1 ) — ( .1 ) ( .1 )

( 9.4 ) 10.2 .8 5.4 ( 14.5 ) ( 9.1 )

Net deferred tax benefits (income taxes) 2.0 ( 2.5 ) ( .5 ) ( 1.1 ) 3.6 2.5

Other comprehensive income (loss) ( 7.4 ) 7.7 .3 4.3 ( 10.9 ) ( 6.6 )

Balances at end of period $ ( 54.3 ) $ 11.6 $ ( 42.7 ) $ ( 44.5 ) $ ( 4.1 ) $ ( 48.6 )

The other comprehensive income (loss) in the table above excludes $ 13.9 million for the 2020 period and $( 17.7 ) million for the 2019 period of other comprehensive income (loss) related to redeemable non-controlling interests held in our consolidated products.

The other comprehensive income (loss) in the table above excludes $ 11.8 million and $ 17.2 million of other comprehensive loss related to redeemable non-controlling interests held in our consolidated products for the three months ended March 31, 2021 and 2020, respectively.

NOTE 10 – COMMITMENTS AND CONTINGENCIES.

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Rowe Price believes the claims are without merit and is vigorously defending the action.

Plaintiffs have filed a motion for partial summary judgment and defendants have filed a cross-motion for summary judgment, and briefing is underway.

The parties each filed motions for summary judgment and, with the exception of one claim, the court has denied the parties’ cross motions for summary judgment.

A trial has been scheduled to begin in September 2021.

We cannot predict the eventual outcome, or whether it will have a material negative impact on our financial results, or estimate the possible loss or range of loss that may arise from any negative outcome.

On April 27, 2016, certain shareholders in the T.

Rowe Price Blue Chip Growth Fund, T.

Rowe Price Capital Appreciation Fund, T.

Rowe Price Equity Income Fund, T.

Rowe Price Growth Stock Fund, T.

Rowe Price International Stock Fund, T.

Rowe Price High Yield Fund, T.

Rowe Price New Income Fund and T.

Rowe Price Small Cap Stock Fund (the “Funds”) filed a Section 36(b) complaint under the caption Zoidis v.

Rowe Price Assoc., Inc., against T.

Rowe Price Associates, Inc.

Rowe Price”) in the United States District Court for the Northern District of California.

The complaint alleges that the management fees for the identified funds are excessive because

Rowe Price charges lower advisory fees to subadvised clients with funds in the same strategy.

The complaint seeks to recover the allegedly excessive advisory fees received by T.

Rowe Price in the year preceding the start of the lawsuit, along with investments’ returns and profits.

In the alternative, the complaint seeks the rescission of each fund’s investment management agreement and restitution of any allegedly excessive management fees.

Rowe Price believes the claims are without merit and is vigorously defending the action.

This matter is in the discovery phase of litigation and we cannot predict the eventual outcome, or whether it will have a material negative impact on our financial results, or estimate the possible loss or range of loss that may arise from any negative outcome.

In addition to the matters discussed above, various claims against us arise in the ordinary course of business, including employment-related claims.

In addition to the matter discussed above, various claims against us arise in the ordinary course of business, including employment-related claims.

In the opinion of management, after consultation with counsel, the likelihood of an adverse determination in one or more of these pending ordinary course of business claims that would have a material adverse effect on our financial position or results of operations is remote.

5 unchanged sentences

Rowe Price Group, Inc.

and subsidiaries ("the Company") as of September 30, 2020, the related condensed consolidated statements of income and comprehensive income, and stockholders’ equity for the three-month and nine-month periods ended September 30, 2020 and 2019, the related condensed consolidated statements of cash flows for the nine-month periods ended September 30, 2020 and 2019, and the related notes (collectively, the consolidated interim financial information).

and subsidiaries (the “Company") as of March 31, 2021, the related condensed consolidated statements of income and comprehensive income, stockholders’ equity, and cash flows for the three-month periods ended March 31, 2021 and 2020, and the related notes (collectively, the consolidated interim financial information).

Based on our reviews, we are not aware of any material modifications that should be made to the consolidated interim financial information for it to be in conformity with U.S.

12 unchanged sentences

Baltimore, Maryland

October 29, 2020

April 29, 2021

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements