Item 1. Financial Statements
Item 1. Financial Statements.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions, except share data)
6/30/2023 12/31/2022
ASSETS
Cash and cash equivalents $ 2,249.7 $ 1,755.6
Accounts receivable and accrued revenue 761.4 748.7
Investments 2,718.4 2,539.2
Assets of consolidated sponsored investment products ($ 1,707.3 million at June 30, 2023 and $ 1,375.6 million at December 31, 2022, related to variable interest entities)
1,946.1 1,603.4
Operating lease assets 261.6 279.4
Property, equipment and software, net 771.2 755.7
Intangible assets, net 577.4 629.8
Goodwill 2,642.8 2,642.8
Other assets 692.8 688.7
Total assets $ 12,621.4 $ 11,643.3
LIABILITIES
Accounts payable and accrued expenses $ 381.3 $ 406.7
Liabilities of consolidated sponsored investment products ($ 47.2 million at June 30, 2023 and $ 39.1 million at December 31, 2022, related to variable interest entities)
71.7 89.1
Operating lease liabilities 323.4 329.6
Accrued compensation and related costs 511.2 228.0
Supplemental savings plan liability 817.3 761.2
Contingent consideration liability 23.0 95.8
Income taxes payable 42.4 46.0
Total liabilities 2,170.3 1,956.4
Commitments and contingent liabilities
Redeemable non-controlling interests 985.2 656.7
STOCKHOLDERS’ EQUITY
Preferred stock, undesignated, $ .20 par value – authorized and unissued 20,000,000 shares
— —
Common stock, $ .20 par value—authorized 750,000,000 ; issued 224,281,000 shares at June 30, 2023 and 224,310,000 at December 31, 2022
44.8 44.9
Additional capital in excess of par value 520.6 437.9
Retained earnings 8,746.2 8,409.7
Accumulated other comprehensive loss ( 47.8 ) ( 53.0 )
Total stockholders’ equity attributable to T. Rowe Price Group, Inc. 9,263.8 8,839.5
Non-controlling interests in consolidated entities 202.1 190.7
Total stockholders’ equity 9,465.9 9,030.2
Total liabilities, redeemable non-controlling interests, and stockholders’ equity $ 12,621.4 $ 11,643.3
The accompanying notes are an integral part of these statements.
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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per-share amounts)
Three months ended Six months ended
6/30/2023 6/30/2022 6/30/2023 6/30/2022
Revenues
Investment advisory fees $ 1,430.8 $ 1,496.7 $ 2,822.6 $ 3,158.8
Capital allocation-based income 38.7 ( 126.3 ) 55.6 ( 81.9 )
Administrative, distribution, and servicing fees 140.7 142.6 269.6 299.1
Net revenues 1,610.2 1,513.0 3,147.8 3,376.0
Operating expenses
Compensation and related costs 648.2 463.4 1,301.7 1,045.0
Distribution and servicing 67.8 75.7 139.3 161.6
Advertising and promotion 22.9 21.4 48.7 44.8
Product and recordkeeping related costs 77.7 76.3 149.8 156.7
Technology, occupancy, and facility costs 154.7 134.3 301.3 268.2
General, administrative, and other 100.0 96.4 207.5 195.2
Change in fair value of contingent consideration ( 23.2 ) ( 50.3 ) ( 72.8 ) ( 95.8 )
Acquisition-related amortization 28.6 27.2 54.6 54.3
Total operating expenses 1,076.7 844.4 2,130.1 1,830.0
Net operating income 533.5 668.6 1,017.7 1,546.0
Non-operating income (loss)
Net gains (losses) on investments 89.1 ( 169.9 ) 183.0 ( 259.8 )
Net gains (losses) on consolidated investment products 24.4 ( 104.6 ) 69.8 ( 206.0 )
Other losses ( 7.3 ) ( 5.4 ) ( 11.2 ) ( 12.6 )
Total non-operating income (loss) 106.2 ( 279.9 ) 241.6 ( 478.4 )
Income before income taxes 639.7 388.7 1,259.3 1,067.6
Provision for income taxes 158.5 100.9 336.4 265.4
Net income 481.2 287.8 922.9 802.2
Less: net income (loss) attributable to redeemable
non-controlling interests 4.8 ( 51.8 ) 25.0 ( 105.3 )
Net income attributable to T. Rowe Price Group $ 476.4 $ 339.6 $ 897.9 $ 907.5
Earnings per share on common stock of T. Rowe Price Group
Basic $ 2.07 $ 1.47 $ 3.90 $ 3.90
Diluted $ 2.06 $ 1.46 $ 3.89 $ 3.88
The accompanying notes are an integral part of these statements.
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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions)
Three months ended Six months ended
6/30/2023 6/30/2022 6/30/2023 6/30/2022
Net income $ 481.2 $ 287.8 $ 922.9 $ 802.2
Other comprehensive income (loss)
Currency translation adjustments
Consolidated T. Rowe Price investment products - variable interest entities 9.5 ( 26.6 ) 18.6 ( 42.1 )
Reclassification (gains) losses recognized in non-operating income upon deconsolidation of certain T. Rowe Price investment products — ( 5.3 ) — ( 6.9 )
Total currency translation adjustments of consolidated T. Rowe Price investment products - variable interest entities
9.5 ( 31.9 ) 18.6 ( 49.0 )
Equity method investments
1.1 ( 3.1 ) — ( 2.6 )
Other comprehensive income (loss) before income taxes 10.6 ( 35.0 ) 18.6 ( 51.6 )
Net deferred tax (expense) benefits ( 1.2 ) 3.4 ( 1.8 ) 5.2
Total other comprehensive income (loss) 9.4 ( 31.6 ) 16.8 ( 46.4 )
Total comprehensive income 490.6 256.2 939.7 755.8
Less: comprehensive income (loss) attributable to redeemable non-controlling interests 10.5 ( 67.5 ) 36.8 ( 130.8 )
Total comprehensive income attributable to T. Rowe Price Group $ 480.1 $ 323.7 $ 902.9 $ 886.6
The accompanying notes are an integral part of these statements.
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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
Six months ended
6/30/2023 6/30/2022
Cash flows from operating activities
Net income $ 922.9 $ 802.2
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation, amortization and impairment of property, equipment and software 117.9 109.2
Amortization and impairment of acquisition-related assets and retention arrangements 97.9 106.7
Fair value remeasurement of contingent consideration liability ( 72.8 ) ( 95.8 )
Stock-based compensation expense
115.4 122.9
Net (gains) losses recognized on investments ( 215.6 ) 338.8
Net redemptions in sponsored investment products used to economically hedge supplemental savings plan liability 18.4 3.9
Net change in securities held by consolidated sponsored investment products ( 414.5 ) 282.3
Other changes in assets and liabilities 336.9 56.8
Net cash provided by operating activities 906.5 1,727.0
Cash flows from investing activities
Purchases of sponsored investment products ( 27.3 ) ( 31.2 )
Dispositions of sponsored investment products 73.8 141.4
Net cash of sponsored investment products on deconsolidation ( 17.8 ) ( 13.5 )
Additions to property, equipment and software ( 132.4 ) ( 122.8 )
Other investing activity ( 32.2 ) 0.4
Net cash used in investing activities ( 135.9 ) ( 25.7 )
Cash flows from financing activities
Repurchases of common stock ( 50.4 ) ( 510.4 )
Common share issuances under stock-based compensation plans 12.1 7.8
Dividends paid to common stockholders of T. Rowe Price ( 562.4 ) ( 556.2 )
Net distributions to non-controlling interests in consolidated entities ( 2.7 ) ( 6.5 )
Net subscriptions (redemptions) from redeemable non-controlling interest holders 283.4 ( 65.7 )
Net cash used in financing activities ( 320.0 ) ( 1,131.0 )
Effect of exchange rate changes on cash and cash equivalents of consolidated
T. Rowe Price investment products
0.9 ( 7.3 )
Net change in cash and cash equivalents during period 451.5 563.0
Cash and cash equivalents at beginning of period, including $ 119.1 million at December 31, 2022, and $ 101.1 million at December 31, 2021, held by consolidated sponsored investment products
1,874.7 1,624.2
Cash and cash equivalents at end of period, including $ 76.5 million at June 30, 2023, and $ 71.2 million at June 30, 2022, held by consolidated sponsored investment products
$ 2,326.2 $ 2,187.2
The accompanying notes are an integral part of these statements.
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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(shares in thousands; dollars in millions)
Three months ended 6/30/2023
Common
shares
outstanding
Common
stock
Additional
capital in
excess of
par value
Retained
earnings
AOCI (1)
Total
stockholders’
equity attributable to T. Rowe Price Group, Inc. Non-controlling interests in consolidated entities Total stockholders’ equity Redeemable non-controlling interests
Balances at March 31, 2023 224,527 $ 44.9 $ 501.8 $ 8,550.4 $ ( 51.7 ) $ 9,045.4 $ 194.4 $ 9,239.8 $ 834.1
Net income — — — 476.4 — 476.4 10.6 487.0 4.8
Other comprehensive income, net of tax — — — — 3.9 3.9 — 3.9 5.5
Dividends declared ($ 1.22 per share)
— — — ( 280.5 ) — ( 280.5 ) — ( 280.5 ) —
Shares issued upon option exercises 69 — 4.6 — — 4.6 — 4.6 —
Restricted shares issued, net of shares withheld for taxes 54 — — — — — — — —
Net shares issued upon vesting of restricted stock units 26 — ( 0.4 ) — — ( 0.4 ) — ( 0.4 ) —
Stock-based compensation expense — — 56.8 — — 56.8 — 56.8 —
Restricted stock units issued as dividend equivalents — — 0.1 ( 0.1 ) — — — — —
Common shares repurchased ( 395 ) ( 0.1 ) ( 42.3 ) — — ( 42.4 ) — ( 42.4 ) —
Net distributions to non-controlling interests in consolidated entities — — — — — — ( 2.9 ) ( 2.9 ) —
Net subscriptions into T. Rowe Price investment products — — — — — — — — 134.9
Net consolidations of T. Rowe Price investment products — — — — — — — — 5.9
Balances at June 30, 2023 224,281 $ 44.8 $ 520.6 $ 8,746.2 $ ( 47.8 ) $ 9,263.8 $ 202.1 $ 9,465.9 $ 985.2
Three months ended 6/30/2022
Common
shares
outstanding Common
stock Additional
capital in
excess of
par value Retained
earnings AOCI (1)
Total
stockholders’
equity attributable to T. Rowe Price Group, Inc. Non-controlling interests in consolidated entities Total stockholders’ equity Redeemable non-controlling interests
Balances at March 31, 2022 227,283 $ 45.5 $ 668.2 $ 8,372.2 $ ( 31.5 ) $ 9,054.4 $ 272.2 $ 9,326.6 $ 790.4
Net income (loss) — — — 339.6 — 339.6 ( 50.9 ) 288.7 ( 51.8 )
Other comprehensive loss, net of tax — — — — ( 15.9 ) ( 15.9 ) — ( 15.9 ) ( 15.6 )
Dividends declared ($ 1.20 per share)
— — — ( 277.2 ) — ( 277.2 ) — ( 277.2 ) —
Shares issued upon option exercises 63 — 3.6 — — 3.6 — 3.6 —
Net shares issued upon vesting of restricted stock units 20 — ( 0.2 ) — — ( 0.2 ) — ( 0.2 ) —
Stock-based compensation expense — — 59.3 — — 59.3 — 59.3 —
Restricted stock units issued as dividend equivalents 9 — 0.1 ( 0.1 ) — — — — —
Common shares repurchased ( 1,660 ) ( 0.4 ) ( 76.4 ) ( 122.6 ) — ( 199.4 ) — ( 199.4 ) —
Net distributions from non-controlling interests in consolidated entities — — — — — — ( 12.5 ) ( 12.5 ) —
Net redemptions from T. Rowe Price investment products — — — — — — — — ( 3.2 )
Net deconsolidations of T. Rowe Price investment products — — — — — — — — ( 155.2 )
Balances at June 30, 2022 225,715 $ 45.1 $ 654.6 $ 8,311.9 $ ( 47.4 ) $ 8,964.2 $ 208.8 $ 9,173.0 $ 564.6
(1) Accumulated other comprehensive income
The accompanying notes are an integral part of these statements.
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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(shares in thousands; dollars in millions)
Six months ended 6/30/2023
Common
shares
outstanding Common
stock Additional
capital in
excess of
par value Retained
earnings AOCI (1)
Total
stockholders’
equity attributable to T. Rowe Price Group, Inc. Non-controlling interests in consolidated entities Total Stockholders’ equity Redeemable non-controlling interests
Balances at December 31, 2022 224,310 $ 44.9 $ 437.9 $ 8,409.7 $ ( 53.0 ) $ 8,839.5 $ 190.7 $ 9,030.2 $ 656.7
Net income — — — 897.9 — 897.9 14.1 912.0 25.0
Other comprehensive income (loss), net of tax — — — — 5.2 5.2 — 5.2 11.6
Dividends declared ($ 2.44 per share)
— — — ( 561.2 ) — ( 561.2 ) — ( 561.2 ) —
Shares issued upon option exercises 259 — 14.9 — — 14.9 — 14.9 —
Restricted shares issued, net of shares withheld for taxes 54 — — — — — — — —
Net shares issued upon vesting of restricted stock units 78 — ( 2.8 ) — — ( 2.8 ) — ( 2.8 ) —
Stock-based compensation expense — — 115.5 — — 115.5 — 115.5 —
Restricted stock units issued as dividend equivalents — — 0.2 ( 0.2 ) — — — — —
Common shares repurchased ( 420 ) ( 0.1 ) ( 45.1 ) — — ( 45.2 ) — ( 45.2 ) —
Net distributions to non-controlling interests in consolidated entities — — — — — — ( 2.7 ) ( 2.7 ) —
Net subscriptions into T. Rowe Price investment products — — — — — — — — 286.0
Net consolidations of T. Rowe Price investment products — — — — — — — — 5.9
Balances at June 30, 2023 224,281 $ 44.8 $ 520.6 $ 8,746.2 $ ( 47.8 ) $ 9,263.8 $ 202.1 $ 9,465.9 $ 985.2
Six months ended 6/30/2022
Common
shares
outstanding Common
stock Additional
capital in
excess of
par value Retained
earnings AOCI (1)
Total
stockholders’
equity attributable to T. Rowe Price Group, Inc. Non-controlling interests in consolidated entities Total Stockholders’ equity Redeemable non-controlling interests
Balances at December 31, 2021 229,175 $ 45.8 $ 919.8 $ 8,083.6 $ ( 26.5 ) $ 9,022.7 $ 248.7 $ 9,271.4 $ 982.3
Net income — — — 907.5 — 907.5 ( 33.4 ) 874.1 ( 105.3 )
Other comprehensive income (loss), net of tax — — — — ( 20.9 ) ( 20.9 ) — ( 20.9 ) ( 25.5 )
Dividends declared ($ 2.40 per share)
— — — ( 556.4 ) — ( 556.4 ) — ( 556.4 ) —
Shares issued upon option exercises 237 0.1 11.4 — — 11.5 — 11.5 —
Net shares issued upon vesting of restricted stock units 61 — ( 3.5 ) — — ( 3.5 ) — ( 3.5 ) —
Stock-based compensation expense — — 122.9 — — 122.9 — 122.9 —
Restricted stock units issued as dividend equivalents 9 — 0.2 ( 0.2 ) — — — — —
Common shares repurchased ( 3,767 ) ( 0.8 ) ( 396.2 ) ( 122.6 ) — ( 519.6 ) — ( 519.6 ) —
Net distributions to non-controlling interests in consolidated entities — — — — — — ( 6.5 ) ( 6.5 ) —
Net redemptions from T. Rowe Price investment products — — — — — — — — ( 68.8 )
Net deconsolidations of T. Rowe Price investment products — — — — — — — — ( 218.1 )
Balances at June 30, 2022 225,715 $ 45.1 $ 654.6 $ 8,311.9 $ ( 47.4 ) $ 8,964.2 $ 208.8 $ 9,173.0 $ 564.6
(1) Accumulated other comprehensive income .
The accompanying notes are an integral part of these statements.
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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 – THE COMPANY AND BASIS OF PREPARATION.
T. Rowe Price Group, Inc. (“T. Rowe Price”, “us”, or “we”) derives its consolidated revenues and net income primarily from investment advisory services that its subsidiaries provide to individual and institutional investors in the T. Rowe Price U.S. mutual funds (“U.S. mutual funds”), subadvised funds, separately managed accounts, collective investment trusts, and other sponsored products. The other sponsored products include: open-ended investment products offered to investors outside the U.S., products offered through variable annuity life insurance plans in the U.S., affiliated private investment funds, and collateralized loan obligations. 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; brokerage; trust services; and non-discretionary advisory services through model delivery. Additionally, we derive revenue from our interests in general partners of certain affiliated private investment funds that are entitled to a disproportionate allocation of income through capital allocation-based arrangements also known as carried interest.
Investment advisory revenues depend largely on the total value and composition of assets under our management. Accordingly, fluctuations in financial markets and in the composition of assets under management impact our revenues and results of operations.
BASIS OF PRESENTATION.
These unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States. These principles require the use of estimates and reflect all adjustments that are, in the opinion of management, necessary for a fair statement of our results for the interim periods presented. All such adjustments are of a normal recurring nature. Actual results may vary from our estimates.
The unaudited interim financial information contained in these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements contained in our 2022 Annual Report.
NEWLY ISSUED BUT NOT YET ADOPTED ACCOUNTING GUIDANCE.
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.
NOTE 2 – INFORMATION ABOUT RECEIVABLES, REVENUES, AND SERVICES.
Our revenues are derived primarily from investment advisory services provided to individual and institutional investors through the use of U.S. mutual funds, subadvised funds, separately managed accounts, collective investment trusts, and other sponsored products. The other sponsored products include: open-ended investment products offered to investors outside the U.S., products offered through variable annuity life insurance plans in the U.S., affiliated private investment funds, and collateralized loan obligations.
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; brokerage; trust services; and non-discretionary advisory services through model delivery.
Additionally, we derive revenue from our interests in general partners of certain affiliated private investment funds that are entitled to a disproportionate allocation of income through capital allocation-based arrangements also known as carried interest.
We manage a broad mix of equity, fixed income, multi-asset, and alternative classes and solutions that meet the varied needs and objectives of individual and institutional investors. Investment advisory revenues depend largely on the total value and composition of assets under our management. Accordingly, fluctuations in financial markets and in the composition of assets under management affect our revenues.
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Net revenues earned for the three and six months ended June 30, 2023 and 2022, are included in the table below along with details of investment advisory revenues earned from clients by their underlying asset class. We have also included average assets under management by asset class, on which we earn the investment advisory revenues.
Three months ended Six months ended
(in millions) 6/30/2023 6/30/2022 6/30/2023 6/30/2022
Investment advisory fees
Equity $ 862.3 $ 941.0 $ 1,696.2 $ 2,027.0
Fixed income, including money market 100.0 109.9 202.4 216.5
Multi-asset 391.3 377.5 777.3 782.1
Alternatives 77.2 68.3 146.7 133.2
Total investment advisory fees $ 1,430.8 $ 1,496.7 $ 2,822.6 $ 3,158.8
Total administrative, distribution, and servicing fees 140.7 142.6 269.6 299.1
Capital allocation-based income 38.7 ( 126.3 ) 55.6 ( 81.9 )
Net revenues $ 1,610.2 $ 1,513.0 $ 3,147.8 $ 3,376.0
Average AUM (in billions) :
Equity $ 703.4 $ 769.6 $ 695.2 $ 827.7
Fixed income, including money market 170.4 174.8 170.0 176.3
Multi-asset 439.0 420.2 430.7 436.9
Alternatives 44.6 42.5 44.3 42.1
Average AUM $ 1,357.4 $ 1,407.1 $ 1,340.2 $ 1,483.0
Total net revenues earned from our sponsored products, primarily our sponsored U.S. mutual funds and collective investment trusts, aggregate $ 1,324.4 million and $ 1,221.1 million for the three months ended June 30, 2023 and 2022, respectively. For the six months ended June 30, 2023 and 2022, total net revenues earned from our sponsored products aggregate $ 2,592.4 million and $ 2,757.5 million, respectively. Accounts receivable from our sponsored products aggregate to $ 493.0 million at June 30, 2023 and $ 492.4 million at December 31, 2022.
Investors that we serve are primarily domiciled in the U.S.; investment advisory clients outside the U.S. account for 8.9 %, 8.9 %, and 9.1 % of our assets under management at June 30, 2023, March 31, 2023, and December 31, 2022, respectively.
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NOTE 3 – INVESTMENTS.
The carrying values of our investments that are not part of the consolidated sponsored investment products are as follows:
(in millions) 6/30/2023 12/31/2022
Investments held at fair value
T. Rowe Price investment products
Discretionary investments $ 242.1 $ 242.0
Seed capital 233.2 195.1
Supplemental savings plan liability economic hedges 820.3 760.7
Investment partnerships and other investments 76.3 87.1
Investments in affiliated collateralized loan obligations 6.9 6.4
Equity method investments
T. Rowe Price investment products
Discretionary investments 215.0 199.6
Seed capital 87.5 125.7
23 % Investment in UTI Asset Management Company Limited (India)
163.2 158.8
Investments in affiliated private investment funds - carried interest 514.2 467.8
Investments in affiliated private investment funds - seed/co-investment 236.6 173.8
Other investment partnerships and investments 2.1 2.4
Held to maturity
Investments in affiliated collateralized loan obligations 106.6 109.6
Certificates of deposit 13.4 9.2
U.S. Treasury note 1.0 1.0
Total $ 2,718.4 $ 2,539.2
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 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 six- months ended June 30, 2023, net gains on investments included $ 28.3 million and $ 75.0 million, respectively, of net unrealized gains related to investments held at fair value that were still held at June 30, 2023. For the same periods of 2022, net losses on investments included $ 131.2 million and $ 225.5 million of net unrealized losses related to investments held at fair value that were still held at June 30, 2022.
During the six months ended June 30, 2023 and 2022, certain sponsored investment products in which we provided initial seed capital at the time of formation were deconsolidated, as we no longer had a controlling interest. Depending on our ownership interest, we are now reporting our residual interests in these sponsored investment products as either an equity method investment or an investment held at fair value. Additionally, during the six months ended June 30, 2023 and 2022, certain sponsored investment products 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 Six months ended
(in millions) 6/30/2023 6/30/2022 6/30/2023 6/30/2022
Net decrease in assets of consolidated sponsored investment products $ ( 79.0 ) $ ( 216.3 ) $ ( 81.4 ) $ ( 313.8 )
Net decrease in liabilities of consolidated sponsored investment products $ ( 33.0 ) $ ( 6.4 ) $ ( 33.1 ) $ ( 15.0 )
Net increase (decrease) in redeemable non-controlling interests $ 5.9 $ ( 155.0 ) $ 5.9 $ ( 218.1 )
Gains recognized upon deconsolidation $ — $ 5.2 $ — $ 6.8
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The gains recognized upon deconsolidation were the result of reclassifying currency translation adjustments accumulated on certain sponsored investment products with non-USD functional currencies from accumulated other comprehensive income (loss) to non-operating income (loss).
INVESTMENTS IN AFFILIATED COLLATERALIZED LOAN OBLIGATIONS.
There is debt associated with our long-term investments in affiliated collateralized loan obligations (“CLOs”). As of June 30, 2023 and December 31, 2022, the debt is carried at $ 100.0 million and $ 103.0 million, respectively, and is reported in accounts payable and accrued expenses in our unaudited condensed consolidated balance sheets. The debt includes outstanding repurchase agreements of € 65.7 million (equivalent to $ 71.7 million at June 30, 2023 and $ 71.3 million at December 31, 2022 at the respective EUR spot rates) that are collateralized by the CLO investments. The debt also includes outstanding note facilities of € 35.6 million (equivalent to $ 28.3 million at June 30, 2023 and $ 31.7 million at December 31, 2022 at the respective EUR spot rates) that are collateralized by first priority security interests in the assets of a consolidated subsidiary that is party to the notes. These note facilities bear interest at rates based on EURIBOR plus the initial margin, which equals all-in rates ranging from 1.15 % to 12.07 % as of June 30, 2023. The debt matures on various dates through 2035 or if the investments are paid back in full or cancelled, whichever is sooner.
VARIABLE INTEREST ENTITIES.
Our investments at June 30, 2023 and December 31, 2022 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:
(in millions) 6/30/2023 12/31/2022
Investment carrying values $ 858.7 $ 762.2
Unfunded capital commitments 125.9 84.7
Accounts receivable 100.1 91.5
$ 1,084.7 $ 938.4
The unfunded capital commitments, totaling $ 125.9 million at June 30, 2023 and $ 84.7 million at December 31, 2022, relate primarily to the affiliated private investment funds and 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.
INVESTMENTS IN AFFILIATED FUNDS.
During 2021, as part of the OHA acquisition, we acquired a majority of the equity interests in entities that have interests in general partners of affiliated private investment funds and are entitled to a disproportionate allocation of income. These entities are considered variable interest entities and are consolidated as T. Rowe Price was determined to be the primary beneficiary.
The total assets, liabilities and non-controlling interests of these consolidated variable interest entities are as follows:
(in millions) 6/30/2023 12/31/2022
Assets $ 558.3 $ 526.2
Liabilities $ 0.2 $ 15.8
Non-controlling interest $ 202.1 $ 190.7
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NOTE 4 – FAIR VALUE MEASUREMENTS.
We determine the fair value of our cash equivalents and investments held at fair value using the following broad levels of inputs as defined by related accounting standards:
Level 1 – quoted prices in active markets for identical securities.
Level 2 – observable inputs other than Level 1 quoted prices including, but not limited to, quoted prices for similar
securities, interest rates, prepayment speeds, and credit risk. These inputs are based on market data
obtained from independent sources.
Level 3 – unobservable inputs reflecting our own assumptions based on the best information available. The inputs into the determination of fair value require significant management judgment or estimation. Investments in this category generally include investments for which there is not an actively-traded market.
These levels are not necessarily an indication of the risk or liquidity associated with our investments. The following table summarizes our investments and liabilities that are recognized in our unaudited condensed consolidated balance sheets using fair value measurements determined based on the differing levels of inputs. This table excludes investments held by the consolidated sponsored investment products which are presented separately on our unaudited condensed consolidated balance sheets and are detailed in Note 5.
6/30/2023 12/31/2022
(in millions) Level 1
Level 2
Level 3 Level 1
Level 2
Level 3
T. Rowe Price investment products
Cash equivalents held in money market funds $ 1,757.3 $ — $ — $ 1,412.0 $ — $ —
Discretionary investments 242.1 — — 242.0 — —
Seed capital 185.4 47.8 — 161.0 34.1 —
Supplemental savings plan liability economic hedges 820.3 — — 760.7 — —
Other investments 0.6 — — 0.6 0.1 —
Investments in affiliated collateralized loan obligations — 6.9 — — 6.4 —
Total $ 3,005.7 $ 54.7 $ — $ 2,576.3 $ 40.6 $ —
Contingent consideration liability $ — $ — $ 23.0 $ — $ — $ 95.8
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 $ 75.7 million at June 30, 2023, and $ 86.4 million at December 31, 2022.
Contingent Consideration
As part of the purchase consideration for our acquisition of OHA in December 2021, there was contingent
consideration in the amount of up to $ 900 million, payable in cash, that may be due as part of an earnout payment starting in 2025 and ending in 2027 upon satisfying or exceeding certain defined revenue targets. These defined revenue targets will be evaluated on a cumulative basis beginning at the end of 2024, with the ability to extend two additional years if the defined revenue targets are not achieved. About 22 % of the earnout is conditioned upon continued service with T. Rowe Price and was excluded from the purchase consideration and deemed compensatory. The fair value of the earnout deemed compensatory is remeasured each reporting period and recognized over the related service period. The amount recorded as compensation expense for the three- and six- months ended June 30, 2023 was immaterial.
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The change in the contingent consideration liability measured at fair value for which we used Level 3 inputs to determine fair value is as follows:
Contingent Consideration Liability
Three months ended Six months ended
(in millions) 6/30/2023 6/30/2022 6/30/2023 6/30/2022
Balance at beginning of period $ 46.2 $ 211.5 $ 95.8 $ 306.3
Measurement period adjustment — — — ( 49.3 )
Unrealized gains, included in earnings ( 23.2 ) (23.2) ( 50.3 ) ( 72.8 ) ( 95.8 )
Balance at end of period $ 23.0 $ 161.2 $ 23.0 $ 161.2
The fair value of the contingent consideration is measured using the Monte Carlo simulation methodology of valuation. The most significant assumptions used relate to the discount rates and from changes pertaining to the achievement of the defined financial targets.
In addition, simultaneously with the OHA acquisition, a Value Creation Agreement was entered into whereby certain employees of OHA will receive incentive payments in the aggregate equal to 10 % of the appreciated value of the OHA business, subject to an annualized preferred return to T. Rowe Price, on the fifth anniversary of the acquisition date. This arrangement is treated as a post-combination compensation expense. This arrangement will be remeasured at fair value at each reporting date and recognized over the related service period. For the three- and six- months ended June 30, 2023, the amounts recognized as part of compensation expense in our unaudited condensed consolidated statements of income were immaterial.
NOTE 5 – CONSOLIDATED SPONSORED INVESTMENT PRODUCTS.
The sponsored investment products that we consolidate in our unaudited condensed consolidated financial statements are generally those products we provided initial seed capital at the time of their formation and have a controlling interest. Our U.S. mutual funds and certain other sponsored products are considered voting interest entities, while those regulated outside the U.S. are considered variable interest entities.
The following table details the net assets of the consolidated sponsored investment products:
6/30/2023 12/31/2022
(in millions)
Voting
interest entities
Variable interest entities
Total
Voting
interest entities
Variable interest entities
Total
Cash and cash equivalents (1)
$ 1.6 $ 74.9 $ 76.5 $ 16.2 $ 102.9 $ 119.1
Investments (2)
218.4 1,599.2 1,817.6 205.3 1,255.5 1,460.8
Other assets 18.8 33.2 52.0 6.3 17.2 23.5
Total assets 238.8 1,707.3 1,946.1 227.8 1,375.6 1,603.4
Liabilities 24.5 47.2 71.7 50.0 39.1 89.1
Net assets $ 214.3 $ 1,660.1 $ 1,874.4 $ 177.8 $ 1,336.5 $ 1,514.3
Attributable to T. Rowe Price Group $ 150.8 $ 738.4 $ 889.2 $ 142.4 $ 715.2 $ 857.6
Attributable to redeemable non-controlling interests 63.5 921.7 985.2 35.4 621.3 656.7
$ 214.3 $ 1,660.1 $ 1,874.4 $ 177.8 $ 1,336.5 $ 1,514.3
(1) Cash and cash equivalents includes $ 1.4 million at June 30, 2023, and $ 2.6 million at December 31, 2022, of investments in T. Rowe Price money market mutual funds.
(2) Investments include $ 6.3 million at June 30, 2023, and $ 7.6 million at December 31, 2022 of other sponsored investment products.
Although we can redeem our interest in these consolidated sponsored investment products at any time, we cannot directly access or sell the assets held by these products to obtain cash for general operations. Additionally, the assets of these investment products are not available to our general creditors.
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Since third party investors in these investment products have no recourse to our credit, our overall risk related to the net assets of consolidated sponsored investment products is limited to valuation changes associated with our interest. We, however, are required to recognize the valuation changes associated with all underlying investments held by these products in our unaudited condensed consolidated statements of income and disclose the portion attributable to third party investors as net income attributable to redeemable non-controlling interests.
The operating results of the consolidated sponsored investment products for the three- and six- months ended June 30, 2023 and 2022, are reflected in our unaudited condensed consolidated statements of income as follows:
Three months ended
6/30/2023 6/30/2022
(in millions) Voting
interest entities Variable interest entities Total Voting
interest entities Variable interest entities Total
Operating expenses reflected in net operating income $ ( 0.8 ) $ ( 2.6 ) $ ( 3.4 ) $ ( 0.1 ) $ ( 1.8 ) $ ( 1.9 )
Net investment income (loss) reflected in non-operating income (loss) 5.8 18.2 24.0 ( 8.1 ) ( 96.5 ) ( 104.6 )
Impact on income before taxes $ 5.0 $ 15.6 $ 20.6 $ ( 8.2 ) $ ( 98.3 ) $ ( 106.5 )
Net income (loss) attributable to T. Rowe Price Group $ 4.4 $ 11.4 $ 15.8 $ ( 5.6 ) $ ( 49.1 ) $ ( 54.7 )
Net income (loss) attributable to redeemable non-controlling interests 0.6 4.2 4.8 ( 2.6 ) ( 49.2 ) ( 51.8 )
$ 5.0 $ 15.6 $ 20.6 $ ( 8.2 ) $ ( 98.3 ) $ ( 106.5 )
Six months ended
6/30/2023 6/30/2022
(in millions) Voting
interest entities Variable interest entities Total Voting
interest entities Variable interest entities Total
Operating expenses reflected in net operating income $ ( 2.5 ) $ ( 4.9 ) $ ( 7.4 ) $ ( 0.3 ) $ ( 4.1 ) $ ( 4.4 )
Net investment income (loss) reflected in non-operating income (loss) 12.7 57.1 69.8 ( 14.7 ) ( 191.3 ) ( 206.0 )
Impact on income before taxes $ 10.2 $ 52.2 $ 62.4 $ ( 15.0 ) $ ( 195.4 ) $ ( 210.4 )
Net income (loss) attributable to T. Rowe Price Group $ 8.1 $ 29.3 $ 37.4 $ ( 10.3 ) $ ( 94.8 ) $ ( 105.1 )
Net income (loss) attributable to redeemable non-controlling interests 2.1 22.9 25.0 ( 4.7 ) ( 100.6 ) ( 105.3 )
$ 10.2 $ 52.2 $ 62.4 $ ( 15.0 ) $ ( 195.4 ) $ ( 210.4 )
The operating expenses of the consolidated investment products are reflected in general, administrative and other expenses. In preparing our unaudited condensed consolidated financial statements, we eliminated operating expenses of $ 0.3 million and $ 0.6 million for the three months ended June 30, 2023 and 2022, respectively, against the investment advisory and administrative fees earned from these products. Operating expenses eliminated for the six months ended June 30, 2023 and 2022, were $ 0.9 million and $ 1.5 million, respectively. The net investment income (loss) reflected in non-operating income (loss) includes dividend and interest income as well as realized and unrealized gains and losses on the underlying securities held by the consolidated sponsored investment products.
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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 six months ended June 30, 2023 and 2022.
Six months ended
6/30/2023 6/30/2022
(in millions)
Voting
interest entities
Variable interest entities
Total
Voting
interest entities
Variable interest entities
Total
Net cash provided by (used in) operating activities $ ( 77.3 ) $ ( 273.4 ) $ ( 350.7 ) $ ( 9.7 ) $ 93.2 $ 83.5
Net cash used in investing activities ( 15.5 ) ( 2.3 ) ( 17.8 ) — ( 13.5 ) ( 13.5 )
Net cash provided by (used in) financing activities 78.2 246.8 325.0 5.4 ( 98.0 ) ( 92.6 )
Effect of exchange rate changes on cash and cash equivalents of consolidated sponsored investment products — 0.9 0.9 — ( 7.3 ) ( 7.3 )
Net change in cash and cash equivalents during period
( 14.6 ) ( 28.0 ) ( 42.6 ) ( 4.3 ) ( 25.6 ) ( 29.9 )
Cash and cash equivalents at beginning of year
16.2 102.9 119.1 7.3 93.8 101.1
Cash and cash equivalents at end of period
$ 1.6 $ 74.9 $ 76.5 $ 3.0 $ 68.2 $ 71.2
The net cash provided by financing activities during the six months ended June 30, 2023 and 2022 includes $ 41.6 million and $ 26.9 million, respectively, of net redemptions we received from the consolidated sponsored investment products, including dividends. These cash flows were eliminated in consolidation.
FAIR VALUE MEASUREMENTS.
We determine the fair value of investments held by consolidated sponsored investment products using the following broad levels of inputs as defined by related accounting standards:
Level 1 – quoted prices in active markets for identical securities.
Level 2 – observable inputs other than Level 1 quoted prices including, but not limited to, quoted prices for similar securities, interest rates, prepayment speeds, and credit risk. These inputs are based on market data obtained from independent sources.
Level 3 – unobservable inputs reflecting our own assumptions based on the best information available.
These levels are not necessarily an indication of the risk or liquidity associated with these investment holdings. The following table summarizes the investment holdings held by our consolidated sponsored investment products using fair value measurements determined based on the differing levels of inputs.
6/30/2023 12/31/2022
(in millions)
Level 1
Level 2
Level 3 Level 1
Level 2
Level 3
Assets
Cash equivalents $ 1.4 $ 0.3 $ — $ 4.4 $ 20.6 $ —
Equity securities 217.2 173.9 — 136.7 167.8 —
Fixed income securities — 1,403.5 — — 1,051.1 —
Other investments 1.8 21.2 — 3.3 30.1 71.8
$ 220.4 $ 1,598.9 $ — $ — $ 144.4 $ 1,269.6 $ 71.8
Liabilities $ ( 4.0 ) $ ( 17.3 ) $ — $ ( 0.9 ) $ ( 19.1 ) $ —
During the three months ended June 30, 2023, certain sponsored investment products in which we provided initial seed capital at the time of formation were deconsolidated, as we no longer had a controlling interest. The residual interest is now reported as an equity method investment, and as such, the underlying investment holdings in these products previously classified as level 3 were removed from the fair value measurements table at June 30, 2023 above.
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NOTE 6 - GOODWILL AND INTANGIBLE ASSETS.
Goodwill and intangible assets consist of the following:
(in millions) 6/30/2023 12/31/2022
Goodwill $ 2,642.8 $ 2,642.8
Indefinite-lived intangible assets - trade name 117.1 117.1
Indefinite-lived intangible assets - investment advisory agreements 65.6 65.6
Definite-lived intangible assets - investment advisory agreements 394.7 447.1
Total $ 3,220.2 $ 3,272.6
Amortization expense for the definite-lived investment advisory agreements intangible assets was $ 26.4 million and $ 52.4 million for the three- and six- months ended June 30, 2023, respectively. For the three- and six- months ended June 30, 2022, amortization expense for the definite-lived investment advisory agreements intangible assets was $ 27.2 million and $ 54.3 millions, respectively. Estimated amortization expense for the definite-lived investment advisory agreements intangible assets for the remainder of 2023 is $ 52.4 million, $ 92.2 million for 2024, $ 90.8 million for 2025, $ 73.7 million for 2026, and $ 49.5 million for 2027.
We evaluate the carrying amount of goodwill in our unaudited condensed consolidated balance sheets for possible impairment on an annual basis in the fourth quarter of each year or if triggering events occur that require us to evaluate for impairment earlier. We did no t record any impairment charges for goodwill in either the three or six months ended June 30, 2023.
NOTE 7 – STOCK-BASED COMPENSATION.
STOCK OPTIONS.
The following table summarizes the status of, and changes in, our stock options during the six months ended June 30, 2023.
Options Weighted-
average
exercise
price
Outstanding at December 31, 2022
2,218,506 $ 74.31
Exercised ( 335,616 ) $ 71.17
Outstanding at June 30, 2023 1,882,890 $ 74.87
Exercisable at June 30, 2023 1,882,890 $ 74.87
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 six months ended June 30, 2023.
Restricted
shares
Restricted
stock
units
Weighted-average
fair value
Nonvested at December 31, 2022
8,715 5,901,600 $ 142.37
Time-based grants 54,262 41,517 $ 109.73
Dividend equivalents granted to non-employee directors — 1,967 $ 110.75
Vested ( 8,715 ) ( 90,547 ) $ 108.42
Forfeited — ( 68,297 ) $ 140.51
Nonvested at June 30, 2023 54,262 5,786,240 $ 142.43
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Nonvested at June 30, 2023, includes performance-based restricted stock units of 320,326 . These nonvested performance-based restricted stock units include 105,106 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 June 30, 2023. 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)
Third quarter 2023 $ 58.7
Fourth quarter 2023 51.5
2024 123.6
2025 through 2029 98.2
Total $ 332.0
NOTE 8 – EARNINGS PER SHARE CALCULATIONS.
The following table presents the reconciliation of net income attributable to T. Rowe Price to net income allocated to our common stockholders and the weighted-average shares that are used in calculating the basic and diluted earnings per share on our common stock. Weighted-average common shares outstanding assuming dilution reflects the potential dilution, determined using the treasury stock method, that could occur if outstanding stock options were exercised and non-participating stock awards vested. No outstanding stock options had an anti-dilutive impact on the diluted earnings per common share calculation in the periods presented.
Three months ended Six months ended
(in millions) 6/30/2023 6/30/2022 6/30/2023 6/30/2022
Net income attributable to T. Rowe Price $ 476.4 $ 339.6 $ 897.9 $ 907.5
Less: net income allocated to outstanding restricted stock and stock unit holders 11.6 7.4 22.1 20.4
Net income allocated to common stockholders $ 464.8 $ 332.2 $ 875.8 $ 887.1
Weighted-average common shares
Outstanding 224.4 226.7 224.4 227.5
Outstanding assuming dilution 225.2 227.9 225.2 228.8
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NOTE 9 – OTHER COMPREHENSIVE INCOME AND ACCUMULATED OTHER COMPREHENSIVE LOSS.
The changes in currency translation adjustments included in accumulated other comprehensive loss for the three months ended June 30, 2023 and 2022 are presented in the table below.
Three months ended 6/30/2023 Three months ended 6/30/2022
(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 $ ( 51.4 ) $ ( 0.3 ) $ ( 51.7 ) $ ( 36.3 ) $ 4.9 $ ( 31.4 )
Other comprehensive income (loss) before reclassifications and income taxes
1.1 3.9 5.0 ( 3.1 ) ( 11.0 ) ( 14.1 )
Reclassification adjustments recognized in non-operating income
— — — — ( 5.3 ) ( 5.3 )
1.1 3.9 5.0 ( 3.1 ) ( 16.3 ) ( 19.4 )
Net deferred tax benefits (income taxes)
( 0.2 ) ( 0.9 ) ( 1.1 ) ( 0.5 ) 3.9 3.4
Other comprehensive income (loss)
0.9 3.0 3.9 ( 3.6 ) ( 12.4 ) ( 16.0 )
Balances at end of period $ ( 50.5 ) $ 2.7 $ ( 47.8 ) $ ( 39.9 ) $ ( 7.5 ) $ ( 47.4 )
The other comprehensive income (loss) in the table above excludes net gains of $ 5.5 million in the 2023 period and net losses of $ 15.6 million in the 2022 period 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 six months ended June 30, 2023 and 2022, are presented in the table below.
Six months ended 6/30/2023 Six months ended 6/30/2022
(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 $ ( 50.5 ) $ ( 2.5 ) $ ( 53.0 ) $ ( 36.7 ) $ 10.2 $ ( 26.5 )
Other comprehensive income (loss) before reclassifications and income taxes — 6.9 6.9 ( 2.6 ) ( 16.6 ) ( 19.2 )
Reclassification adjustments recognized in non-operating income — — — ( 6.9 ) ( 6.9 )
— 6.9 6.9 ( 2.6 ) ( 23.5 ) ( 26.1 )
Net deferred tax benefits (income taxes) — ( 1.7 ) ( 1.7 ) ( 0.6 ) 5.8 5.2
Other comprehensive income (loss) — 5.2 5.2 ( 3.2 ) ( 17.7 ) ( 20.9 )
Balances at end of period $ ( 50.5 ) $ 2.7 $ ( 47.8 ) $ ( 39.9 ) $ ( 7.5 ) $ ( 47.4 )
The other comprehensive income (loss) in the table above excludes net gains of $ 11.6 million for 2023 period and net losses of $ 25.5 million for the 2022 period of other comprehensive income (loss) related to redeemable non-controlling interests held in our consolidated products.
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NOTE 10 – COMMITMENTS AND CONTINGENCIES.
COMMITMENTS.
T. Rowe Price has committed $ 481.5 million to fund OHA products over the next four years .
CONTINGENCIES.
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.
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and Board of Directors
T. Rowe Price Group, Inc.:
Results of Review of Interim Financial Information
We have reviewed the condensed consolidated balance sheet of T. Rowe Price Group, Inc. and subsidiaries (the Company) as of June 30, 2023, the related condensed consolidated statements of income, comprehensive income, and stockholders’ equity for the three-month and six-month periods ended June 30, 2023 and 2022, the related condensed consolidated statements of cash flows for the six-month periods ended June 30, 2023 and 2022, 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. generally accepted accounting principles.
We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of December 31, 2022, and the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for the year then ended (not presented herein); and in our report dated February 15, 2023, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2022, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.
Basis for Review Results
This consolidated interim financial information is the responsibility of the Company’s management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our reviews in accordance with the standards of the PCAOB. A review of consolidated interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.
/s/ KPMG LLP
Baltimore, Maryland
July 28, 2023
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Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.