What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-11-01 compared with 2024-07-26 · 225 added, 194 removed, 550 unchanged (43% of the section changed)

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MARKET TRENDS.

stocks were mixed in the second quarter amid strength in large, high-growth companies, especially technology-oriented companies expected to benefit from artificial intelligence (AI) developments.

In contrast, stocks of smaller companies, which tend to be more sensitive than large-caps to the economy and interest rate movements, were hurt by diminished expectations for Federal (“Fed”) Reserve rate cuts this year stemming from persistent inflation.

stock market indexes rose in the third quarter of 2024.

Shares were supported by generally favorable corporate earnings and expectations that a softening labor market and easing inflation pressures would enable the Federal Reserve to begin reducing short-term interest rates.

Volatility increased considerably at times, but the market finished the quarter on a positive note, as Fed Chair Jerome Powell declared in late August at the central bank’s annual economic symposium that “the time has come” for policymakers to adjust short-term rates.

On September 18, the central bank reduced the fed funds target rate by 50 basis points—which was more than some investors expected—and Fed officials noted the potential for “additional adjustments” as they “carefully assess incoming data, the evolving outlook, and the balance of risks.”

Developed non-U.S.

equity markets generally underperformed large-cap U.S.

stocks in dollar terms.

In Europe, equity markets were mixed, with French shares falling about 7%.

Developed Asian markets were mostly positive in dollar terms.

Shares in Singapore led the region with a 9% gain, but Japanese stocks fell 4%.

Emerging equity markets outperformed stocks in developed markets in U.S.

dollar terms.

Equities in the emerging Europe, Middle East, and Africa (EMEA) region were mostly positive.

Turkish shares rose more than 21%, as S&P Global Ratings upgraded its sovereign credit rating.

Emerging Asian markets were widely mixed in dollar terms, but Latin American markets were mostly negative, as regional heavyweights Mexico and Brazil tumbled 16% and 12%, respectively.

equity markets generally outperformed large-cap U.S.

stocks in U.S.

dollar terms, as a weaker dollar versus major non-U.S.

currencies lifted overseas returns in dollar terms.

In Europe, equity markets were mostly positive.

Several markets produced double-digit gains, while UK shares climbed about 8%.

Developed Asian markets were broadly positive.

Hong Kong shares surged more than 24%, lifted in part by Chinese stimulus measures intended to bolster the Chinese economy.

Emerging equity markets outperformed stocks in developed non-U.S.

markets in dollar terms.

Emerging Asian markets were mostly positive;

a few rose more than 20%.

Chinese shares surged more than 23%, while the A shares market climbed more than 21%, thanks to brisk gains in September stemming from new Chinese economic stimulus measures.

Markets in Latin America and in the emerging Europe, Middle East, and Africa (EMEA) region were largely positive in dollar terms.

Returns of several major equity market indexes were as follows:

Three months ended Six months ended

Three months ended Nine months ended

Index 9/30/2024 9/30/2024

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(1) Returns exclude dividends

bond index returns were mostly positive in the second quarter of 2024.

Treasury bill yields were little changed as the Fed kept the fed funds target rate in the 5.25% to 5.50% range, but intermediate- and long-term

Treasury yields increased and bond prices eased as Fed rate cut expectations for 2024 continued to wane.

Global bond returns were broadly positive in the third quarter of 2024.

In the U.S., Treasury bill yields and shorter-term bond yields declined as the Fed reduced the fed funds target rate to the 4.75% to 5.00% range and signaled the potential for more rate cuts.

Longer-term U.S.

Treasury yields fell to a lesser degree.

The 10-year U.S.

Treasury note yield increased from 4.20% to 4.36% during the quarter.

investment-grade bond universe, sector performance was mostly positive.

Asset-backed securities and non-agency commercial mortgage-backed securities performed best.

Treasuries and mortgage-backed securities rose marginally, while corporate bonds edged lower.

Tax-free municipal bonds performed mostly in line with the broad taxable bond market.

High yield corporate bonds outperformed investment-grade issues.

Treasury note yield declined from 4.36% to 3.81% during the quarter.

investment-grade universe, sector performance was broadly positive.

Corporate bonds and mortgage-backed securities fared best.

Treasuries and non-agency commercial mortgage-backed securities also did well.

Asset-backed securities underperformed, but still produced solid gains.

Tax-free municipal bonds lagged the broad taxable bond market, as municipal bond yields generally did not fall as much as comparable Treasury yields.

High yield corporate bonds performed mostly in line with the investment-grade market.

Bonds in developed non-U.S.

markets produced negative returns in U.S.

dollar terms.

In Europe, official short-term interest rates in England were unchanged, while the European Central Bank reduced its key policy rate by 25 basis points in early June.

However, bond yields in several European countries rose late in the quarter amid political uncertainty in France.

In Japan, short-term rates were unchanged, and the yen fell 6% versus the dollar to 38-year lows by the end of June, while the 10-year Japanese government bond yield rose above 1.00% for the first time in more than a decade.

In the emerging markets universe, dollar-denominated bonds were flat, but they outperformed local currency bonds in dollar terms, as most developing markets currencies depreciated versus the U.S.

Returns for several major bond market indexes were as follows:

Three months ended Six months ended

markets produced positive returns in dollar terms.

Bond prices rose and yields declined in many European countries, as central banks in the UK and the eurozone reduced short-term interest rates, and a weaker dollar versus various currencies lifted overseas returns in dollar terms.

In Japan, the central bank unexpectedly increased its benchmark interest rate in late July, resulting in a significant strengthening of the yen versus the dollar.

In the emerging markets fixed income universe, local currency bonds outperformed dollar-denominated bonds in U.S.

dollar terms, as the dollar weakened versus many developing markets currencies.

Returns of several major bond market indexes were as follows:

Three months ended Nine months ended

Index 9/30/2024 9/30/2024

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ASSETS UNDER MANAGEMENT.

Assets under management ended the second quarter of 2024 at $1,569.1 billion, an increase of $26.9 billion from March 31, 2024.

The increase in assets under management during the second quarter of 2024 was driven by market appreciation and income, net of distributions not reinvested, of $30.6 billion, offset by net cash outflows of $3.7 billion.

For the six months ended June 30, 2024, the increase in assets under management was driven by market appreciation, net of distributions not reinvested, of $136.3 billion, offset by net cash outflows of $11.7 billion.

The following tables detail changes in our assets under management, by asset class, during the three- and six-month periods ended June 30, 2024:

Assets under management ended the third quarter of 2024 at $1,630.9 billion, an increase of $61.8 billion from June 30, 2024.

The increase in assets under management during the third quarter of 2024 was driven by market appreciation and income, net of distributions not reinvested, of $74.0 billion, offset by net cash outflows of $12.2 billion.

For the nine months ended September 30, 2024, the increase in assets under management was driven by market appreciation, net of distributions not reinvested, of $210.3 billion, offset by net cash outflows of $23.9 billion.

The following tables detail changes in our assets under management, by asset class, during the three- and nine-month periods ended September 30, 2024:

Three months ended 9/30/2024

Six months ended 6/30/2024

Nine months ended 9/30/2024

(in billions) Equity Fixed income, including money market Multi-asset (1)

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Change during the period 21.7 6.4 31.8 1.9 61.8 88.4 16.3 77.9 3.8 186.4

Assets under management at June 30, 2024 $ 810.3 $ 179.9 $ 529.1 $ 49.8 $ 1,569.1 $ 810.3 $ 179.9 $ 529.1 $ 49.8 $ 1,569.1

Assets under management at September 30, 2024 $ 832.0 $ 186.3 $ 560.9 $ 51.7 $ 1,630.9 $ 832.0 $ 186.3 $ 560.9 $ 51.7 $ 1,630.9

(1) The underlying assets under management of the multi-asset portfolios have been aggregated and presented in this category and not reported in the equity and fixed income columns.

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Generally, only those strategies with longer than daily liquidity are included.

Unfunded capital commitments were $11.3 billion at June 30, 2024, $12.0 billion at March 31, 2024, and $11.6 billion at December 31, 2023, and are not reflected in fee basis AUM above.

(3) Includes net distributions not reinvested for the three- and six-month periods ended June 30, 2024 of $0.7 billion and $0.9 billion, respectively.

Investment advisory clients outside the United States account for 8.6% of our assets under management at June 30, 2024, 8.5% at March 31, 2024, and 8.6% at December 31, 2023.

Assets under management in our target date retirement products, which are included in the multi-asset totals shown above, were $452.6 billion at June 30, 2024, $443.0 billion at March 31, 2024, and $408.4 billion at December 31, 2023.

Net flows into these portfolios were $3.7 billion and $10.5 billion in the three- and six-month periods ended June 30, 2024.

Unfunded capital commitments were $14.5 billion at September 30, 2024, $11.3 billion at June 30, 2024, and $11.6 billion at December 31, 2023, and are not reflected in fee basis AUM above.

(3) Includes net distributions not reinvested for the three- and nine-month periods ended September 30, 2024 of $0.2 billion and $1.1 billion, respectively.

Investment advisory clients outside the United States account for 8.6% of our assets under management at September 30, 2024, June 30, 2024, and December 31, 2023.

Assets under management in our target date retirement products, which are included in the multi-asset totals shown above, were $482.1 billion at September 30, 2024, $452.6 billion at June 30, 2024, and $408.4 billion at December 31, 2023.

Net flows into these portfolios were $3.6 billion and $14.1 billion in the three- and nine-month periods ended September 30, 2024.

We also provide strategic investment advice solutions for certain portfolios.

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We also offer advice solutions through retail separately managed accounts and separately managed accounts model delivery.

As of June 30, 2024, total assets in these solutions were $549 billion, of which $534 billion are included in our reported assets under management in the tables above.

We provide participant accounting and plan administration for retirement plans that invest in the firm's U.S.

As of September 30, 2024, total assets in these solutions were $582 billion, of which $567 billion are included in our reported assets under management in the tables above.

We provide participant accounting and plan administration for retirement plans that primarily invest in the firm's U.S.

mutual funds, collective investment trusts and funds outside of the firm's complex.

As of June 30, 2024, our assets under administration were $273 billion, of which nearly $157 billion are assets we manage.

As of September 30, 2024, our assets under administration were $286 billion, of which nearly $163 billion are assets we manage.

INVESTMENT PERFORMANCE.

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Our performance disclosures include specific asset classes, assets under management weighted performance, mutual fund performance against passive peers and composite performance against benchmarks.

The following tables present investment performance for the one-, three-, five-, and 10-years ended June 30, 2024.

Past performance is no guarantee of future results.

The following tables present investment performance for the one-, three-, five-, and 10-years ended September 30, 2024.

Past performance is not a reliable indicator of future performance.

funds that outperformed Morningstar median (2),(3)

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All Composites 60% 27% 40% 55%

As of June 30, 2024, 65 of 130 (50.0%) of the firm's rated U.S.

As of September 30, 2024, 69 of 142 (48.6%) of the firm's rated U.S.

mutual funds (across primary share classes) received an overall rating of 4 or 5 stars.

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In addition, 67% (6) of AUM in the firm's rated U.S.

mutual funds (across primary share classes) ended June 30, 2024 with an overall rating of 4 or 5 stars.

mutual funds (across primary share classes) ended September 30, 2024 with an overall rating of 4 or 5 stars.

(1) The investment performance reflects that of T.

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RESULTS OF OPERATIONS.

The following table and discussion sets forth information regarding our consolidated financial results for the three- and six-month periods ended June 30, 2024 and 2023 on a U.S.

The following table and discussion sets forth information regarding our consolidated financial results for the three- and nine-month periods ended September 30, 2024 and 2023 on a U.S.

GAAP basis and a non-GAAP basis.

The non-GAAP basis adjusts for the impact of our consolidated sponsored investment products, the impact of market movements on the supplemental savings plan liability and related economic hedge, investment income related to certain other investments, acquisition-related amortization and costs, impairment charges, and certain nonrecurring charges and gains.

Three months ended Q2 2024 vs.

Q2 2023 Six months ended YTD 2024 vs.

Three months ended Nine months ended

(in millions, except per-share data) 9/30/2024 9/30/2023 $ change % change (1)

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Net income attributable to T.

Rowe Price $ 483.4 $ 476.4 $ 7.0 1.5 % $ 1,057.2 $ 897.9 $ 159.3 17.7 %

Rowe Price Group, Inc.

$ 603.0 $ 453.2 $ 149.8 33.1 % $ 1,660.2 $ 1,351.1 $ 309.1 22.9 %

Diluted earnings per common share $ 2.64 $ 1.97 $ 0.67 34.0 % $ 7.23 $ 5.86 $ 1.37 23.4 %

5 unchanged sentences

Net income attributable to T.

Rowe Price $ 519.7 $ 466.5 $ 53.2 11.4 % $ 1,068.2 $ 855.9 $ 212.3 24.8 %

Rowe Price Group, Inc.

$ 586.5 $ 499.5 $ 87.0 17.4 % $ 1,654.7 $ 1,355.4 $ 299.3 22.1 %

Diluted earnings per common share $ 2.57 $ 2.17 $ 0.40 18.4 % $ 7.21 $ 5.88 $ 1.33 22.6 %

7 unchanged sentences

GAAP measures at the end of the Results of Operations section of this Management’s Discussion and Analysis.

Results Overview - Quarter ended June 30, 2024

Results Overview - Quarter ended September 30, 2024

Net revenues consist of investment advisory revenues;

1 unchanged sentence

and capital allocation-based income.

Approximately 90% of our net revenues are related to investment advisory fees.

Total net revenues were $1,733.3 million in the second quarter of 2024, a 7.6% increase compared with $1,610.2 million in the second quarter of 2023.

The increase was primarily driven by an 10.8% increase in investment advisory fee revenue as higher overall markets increased average assets under management by 13.0%, partially offset by a $38.6 million decrease in capital allocation-based income (change in accrued carried interest) earned from investments in certain affiliated funds.

More than 90% of our net revenues are related to investment advisory fees.

Total net revenues were $1,785.6 million in the third quarter of 2024, a 6.9% increase over $1,670.7 million in the third quarter of 2023.

The increase was primarily driven by an 11.5% increase in investment advisory fee revenue as higher overall markets increased average assets under management by 14.1%.

This increase was partially offset by a $61.5 million decrease in capital allocation-based income (change in accrued carried interest) earned from investments in certain affiliated funds.

Investment advisory fees are generally earned based on the value and composition of our assets under management, which change based on fluctuations in financial markets and net cash flows.

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Our annualized effective fee rates can be impacted by market or cash flow related shifts among asset classes and products, including those with tiered-fee structures, along with price changes we make in existing products.

Capital allocation-based income will fluctuate quarter-to-quarter to reflect the adjustment to accrued carried interest for the change in value of certain affiliated funds, assuming the funds’ underlying investments were realized as of the end of the period, regardless of whether the funds’ underlying investments have been realized.

Capital allocation-based income will fluctuate quarter-to-quarter to reflect the adjustment to accrued carried interest for the change in value of certain affiliated funds assuming the funds’ underlying investments were realized as of the end of the period.

Operating expenses on a U.S.

GAAP basis were $1,168.6 million in the second quarter of 2024, a 8.5% increase over the comparable 2023 period.

GAAP basis were $1,172.0 million in the third quarter of 2024, a 7.6% increase over the comparable 2023 period.

On a non-GAAP basis, operating expenses were $1,099.0 million, a 3.6% increase over the comparable 2023 period.

In comparison to the second quarter of 2023, the increases in U.S.

GAAP and non-GAAP operating expenses were primarily driven by higher compensation and related benefits, including the interim bonus accrual, along with higher distribution and servicing costs and advertising and promotion costs.

GAAP operating expense increase was also impacted by intangible amortization and impairments and the remeasurement of contingent consideration liability.

Operating margin in the second quarter of 2024 was 32.6% on a U.S.

GAAP basis, compared to 33.1% earned in the second quarter of 2023.

In comparison to the third quarter of 2023, about 70% of the increase in U.S.

GAAP operating expenses was due to a market-related increase of $43.4 million in the supplemental savings liability in the third quarter of 2024, compared to a decrease of $14.2 million in the supplemental savings liability in the 2023 period.

Also contributing to the increase in U.S.

GAAP operating expenses and the primary drivers of the increase in non-GAAP operating expenses were higher general, administrative and other costs due to a $20 million cost recovery recognized in Q3 2023 that didn't recur in Q3 2024, higher distribution and servicing costs on higher average assets under management distributed through intermediaries, and higher compensation and related benefits.

These increases were partially offset by lower accrued carried interest-related compensation.

Operating margin in the third quarter of 2024 was 34.4% on a U.S.

GAAP basis, compared to 34.8% earned in the third quarter of 2023.

The decrease in our U.S.

GAAP operating margin for the second quarter of 2024 compared to the 2023 period was driven by operating expense growth outpacing net revenue growth primarily due to acquisition-related amortization and impairments along with changes in the supplemental savings plan liability.

Diluted earnings per share was $2.11 for the second quarter of 2024 compared to $2.06 for the second quarter of 2023.

The increase was primarily driven by higher operating income offset slightly by lower non-operating income compared to the 2023 period.

On a non-GAAP basis, diluted earnings per share was $2.26 for the second quarter of 2024 as compared to $2.02 for the second quarter of 2023.

The increase was primarily due to higher adjusted operating income compared to the 2023 period.

Results Overview - Year-to-Date ended June 30, 2024

GAAP operating margin for the third quarter of 2024 compared to the 2023 period was driven by operating expense growth outpacing net revenue growth primarily due to changes in the supplemental savings plan liability and lower capital allocation-based income.

Diluted earnings per share was $2.64 for the third quarter of 2024 compared to $1.97 for the third quarter of 2023.

The increase was primarily driven by higher operating income, higher net investment gains, and a lower effective tax rate compared to the 2023 period.

On a non-GAAP basis, diluted earnings per share was $2.57 for the third quarter of 2024 as compared to $2.17 for the third quarter of 2023.

The increase was primarily due to higher adjusted operating income, higher adjusted net investment gains, and a lower effective tax rate compared to the 2023 period.

Results Overview - Year-to-Date ended September 30, 2024

Net revenues consist of investment advisory revenues;

1 unchanged sentence

and capital allocation-based income.

Approximately 90% of our net revenues for the six months ended June 30, 2024 are related to investment advisory fees.

Total net revenues were $3,483.5 million in the six months ended June 30, 2024, a 10.7% increase compared with $3,147.8 million in the 2023 period.

The increase was primarily driven by a 11.2% increase in investment advisory fee revenue as average assets under management increased by 12.6%.

Operating expenses were $2,332.2 million in the six months ended June 30, 2024 compared with $2,130.1 million in the 2023 period.

On a non-GAAP basis, our operating expenses for the six months ended June 30, 2024 increased 6.3% to $2,177.2 million compared to the 2023 period.

In comparison to the six months ended June 30, 2023, more than a third of the increase in U.S.

GAAP operating expenses was driven by the remeasurement of the contingent consideration liability, as the 2023 period reflected a $72.8 million reduction in the liability compared to no change in the 2024 period.

More than 90% of our net revenues for the nine months ended September 30, 2024 are related to investment advisory fees.

Total net revenues were $5,269.1 million in the nine months ended September 30, 2024, a 9.4% increase over $4,818.5 million in the 2023 period.

The increase was primarily driven by a 11.3% increase in investment advisory fee revenue as average assets under management increased by 13.1%, partially offset by a $69.9 million decrease in capital allocation-based income (change in accrued carried interest) earned from investments in certain affiliated funds.

Operating expenses were $3,504.2 million in the nine months ended September 30, 2024 compared with $3,219.5 million in the 2023 period.

On a non-GAAP basis, our operating expenses for the nine months ended September 30, 2024 increased 5.3% to $3,276.2 million compared to the 2023 period.

In comparison to the nine months ended September 30, 2023, about 40% of the increase in U.S.

GAAP operating expenses was driven by the change in remeasurement of the contingent consideration liability, as the 2023 period reflected a $72.8 million reduction in the liability compared to a $13.4M reduction in the 2024 period.

Additionally, a market-related increase in the supplemental savings plan liability, and higher amortization and impairments related to acquisition-related intangibles, were also primary contributors to the increase in U.S.

GAAP operating expenses.

Also contributing to the increase in U.S.

GAAP operating expenses and the primary drivers of non-GAAP operating expenses were higher compensation and related benefits, including the interim bonus accrual;

salaries and benefits along with distribution and servicing costs, and advertising and promotion costs.

Operating margin in the six months ended June 30, 2024 was 33.1%, compared to 32.3% earned in the 2023 period.

The increase in our operating margin for the six months ended June 30, 2024 compared to the 2023 period was primarily driven by net revenue growth outpacing operating expense growth.

Diluted earnings per share was $4.60 for the six months ended June 30, 2024 compared to $3.89 for the six months ended June 30, 2023.

The 18.3% increase was driven by higher operating income, a lower effective tax rate, and higher net investment gains in the six months ended June 30, 2024, as compared to the comparable 2023 period

On a non-GAAP basis, adjusted diluted earnings per share was $4.64 for the six months ended June 30, 2024 as compared to $3.71 for the 2023 period.

The 25.1% increase was driven by higher operating income and a lower effective tax rate.

Three months ended Q2 2024 vs.

Q2 2023 Six months ended YTD 2024 vs.

GAAP operating expenses and the primary drivers of the increase in non-GAAP operating expenses were higher compensation and related benefits, including the interim bonus accrual, salaries and benefits, distribution and servicing costs, and general, administrative and other costs.

Operating margin in the nine months ended September 30, 2024 was 33.5% on a U.S.

GAAP basis, compared to 33.2% earned in the 2023 period.

The increase in our U.S.

GAAP operating margin for the nine months ended September 30, 2024 compared to the 2023 period was primarily driven by net revenue growth outpacing operating expense growth.

Diluted earnings per share was $7.23 for the nine months ended September 30, 2024 compared to $5.86 for the nine months ended September 30, 2023.

The 23.4% increase was driven by higher net investment gains, higher operating income, and a lower effective tax rate in the nine months ended September 30, 2024, as compared to the comparable 2023 period.

On a non-GAAP basis, adjusted diluted earnings per share was $7.21 for the nine months ended September 30, 2024 as compared to $5.88 for the 2023 period.

The 22.6% increase was primarily due to higher adjusted operating income and a lower effective tax rate.

Three months ended Nine months ended

(in millions) 9/30/2024 9/30/2023 $ change % change (1)

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Investment advisory annualized effective fee rate (bps) 40.9 41.7 (0.8) (1.9) % 41.5 42.2 (0.7) (1.7) %

Investment advisory annualized effective fee rate excluding performance-based fees (bps) 40.7 41.6 (0.9) (2.2) % 41.2 42.1 (0.9) (2.1) %

(1) n/m - The percentage change is not meaningful.

Investment advisory fees in the second quarter of 2024 increased 10.8% over the comparable 2023 quarter as average assets under management increased $176.6 billion or 13.0%, to $1,534.0 billion.

For the six months ended June 30, 2024, investment advisory revenues increased 11.2% over the comparable 2023 period as average assets under management increased $169.0 billion, or 12.6%, to $1,509.2 billion.

The average annualized effective fee rate earned for the three- and six-month periods ended June 30, 2024 declined from the comparable 2023 periods due to client flows and transfers creating a mix shift in assets under management toward lower fee products and asset classes.

The 2024 year-to-date annualized effective fee rate was also favorably impacted by about 0.3 basis points in higher performance based fees within equity and alternative products compared to the 2023 year-to-date period.

Capital allocation-based income in the second quarter of 2024 increased net revenues by $0.1 million compared to an increase in net revenues of $38.7 million in the 2023 period.

For the six months ended June 30, 2024, capital allocation-based income increased net revenues by $47.2 million compared to $55.6 million for the 2023 period.

The change in accrued carried interest in the second quarter of 2024 declined $24.0 million compared to the 2023 period due to lower overall market returns and relative performance.

For the six months ended June 30, 2024, the change in accrued carried interest increased $6.3 million compared to the 2023 period due to higher overall market returns and relative performance.

A portion of the capital allocation-based income is passed through to certain associates as compensation and the related expense is recognized in compensation and related costs with the unpaid amount reported as non-controlling interest on the consolidated balance sheet.

Administrative, distribution, and servicing fees in the second quarter of 2024 were $147.6 million, an increase of $6.9 million, or 4.9%, from the comparable 2023 quarter.

For the six months ended June 30, 2024, these fees were $296.7 million, an increase of $27.1 million, or 10.1%, from the 2023 period.

The increases for both periods were primarily due to higher retail transfer agent servicing activities provided to the T.

Rowe Price mutual funds and higher average assets on which we earn administrative revenue for non-discretionary advisory services.

Investment advisory fees in the third quarter of 2024 increased 11.5% over the comparable 2023 quarter as average assets under management increased $195.9 billion or 14.1%, to $1,589.5 billion.

For the nine months ended September 30, 2024, investment advisory revenues increased 11.3% over the comparable 2023 period as average assets under management increased $178.0 billion, or 13.1%, to $1,536.2 billion.

Investment advisory fees includes performance fees of $5.6 million and $40.0 million for the three- and nine-month periods ended September 30, 2024, respectively, compared to $2.1 million and $13.0 million in the same respective 2023 periods.

Performance fees earned in 2024 and 2023 were primarily from equity and alternative products.

The average annualized effective fee rate earned for the three- and nine-month periods ended September 30, 2024 declined from the comparable 2023 periods due to client flows and transfers creating a mix shift in assets under management toward lower fee products and asset classes.

The 2024 year-to-date annualized effective fee rate was favorably impacted by higher performance based fees of about 0.2 basis points.

Capital allocation-based income includes the change in accrued carried interest along with acquisition-related amortization and impairments.

In the third quarter of 2024, the change in accrued carried interest increased net revenues by $35.1 million compared to $91.9 million in the 2023 period.

For the nine months ended September 30, 2024, the change in accrued carried interest increased net revenues by $51.8 million compared to $121.7 million for the 2023 period.

The decrease in the change in accrued carried interest for both periods was due to lower relative performance.

We also recognized higher acquisition-related amortization and impairment changes in the 2024 periods.

A portion of the capital allocation-based income was passed through to certain associates as compensation and the related expense was recognized in compensation and related costs with the unpaid amount reported as non-controlling interest on the unaudited condensed consolidated balance sheet.

Administrative, distribution, and servicing fees in the third quarter of 2024 were $148.1 million, an increase of $7.4 million, or 5.3%, from the comparable 2023 quarter.

For the nine months ended September 30, 2024, these fees were $444.8 million, an increase of $34.5 million, or 8.4%, from the 2023 period.

The increases for both periods were primarily due to higher average assets on which we earn administrative revenue for non-discretionary advisory services.

For the nine months ended September 30, 2024, higher retail transfer agent servicing activities provided to the T.

Rowe Price mutual funds also contributed to the increase.

Our net revenues reflect the elimination of advisory and administrative fee revenue earned from our consolidated

1 unchanged sentence

The corresponding expenses recognized by these products, and consolidated in our financial statements, were also eliminated from operating expenses.

For the second quarter, we eliminated net revenue of $0.5 million in 2024 and $0.3 million in 2023.

For the six months ended June 30, we eliminated net revenue of $1.7 million in 2024 and $0.9 million in 2023.

For the third quarter, we eliminated net revenue of $1.3 million in 2024 and $0.7 million in 2023.

For the nine months ended September 30, we eliminated net revenue of $3.0 million in 2024 and $1.6 million in 2023.

Operating expenses

Three months ended Q2 2024 vs.

Q2 2023 Six months ended YTD 2024 vs.

Three months ended Nine months ended

(in millions) 9/30/2024 9/30/2023 $ change % change (1)

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General, administrative, and other 104.2 85.7 18.5 21.6 % 305.5 293.2 12.3 4.2 %

Change in fair value of contingent consideration — (23.2) 23.2 (100.0) % — (72.8) 72.8 (100.0) %

Change in fair value of contingent consideration (13.4) — (13.4) n/m (13.4) (72.8) 59.4 (81.6) %

Acquisition-related amortization and impairment costs 51.5 38.5 13.0 33.8 % 125.3 93.1 32.2 34.6 %

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(2) The impact of the market on the supplemental savings plan liability drives the expense recognized each period.

Compensation, benefits, and related costs were $635.8 million in the second quarter of 2024, an increase of $44.8 million, or 7.6%, compared to the 2023 quarter.

For the six months ended June 30, 2024, these costs were $1,265.1 million, an increase of $80.8 million, or 6.8%, compared to the 2023 period.

The increase in both periods were primarily due to a higher interim bonus accrual, and higher salaries and related benefits, as base salary modestly increased in January 2024.

These increases were partially offset by higher labor capitalization compared to the 2023 periods.

The firm employed 7,929 associates at June 30, 2024, an increase of 0.3% from the end of 2023 and June 30, 2023.

Distribution and servicing costs were $87.7 million for the second quarter of 2024, an increase of $19.9 million, or 29.5%, from $67.8 million recognized in the 2023 quarter.

For the six months ended June 30, 2024, these costs were $169.7 million, an increase of 21.8% over $139.3 million recognized in the comparable 2023 period.

Compensation, benefits, and related costs were $632.9 million in the third quarter of 2024, an increase of $15.9 million, or 2.6%, compared to the 2023 quarter.

For the nine months ended September 30, 2024, these costs were $1,898.0 million, an increase of $96.7 million, or 5.4%, compared to the 2023 period.

The increases in both periods were primarily due to a higher interim bonus accrual, and higher salaries and related benefits, as base salary modestly increased in January 2024 and we increased our headcount.

These increases were partially offset by higher labor capitalization and lower stock-based compensation compared to the 2023 periods.

The 2023 periods included severance costs related to the July 2023 workforce action.

The firm employed 8,104 associates at September 30, 2024, an increase of 2.5% from the end of 2023 and an increase of 3.3% from September 30, 2023.

Distribution and servicing costs were $91.6 million for the third quarter of 2024, an increase of $16.7 million, or 22.3%, from $74.9 million recognized in the 2023 quarter.

For the nine months ended September 30, 2024, these costs were $261.2 million, an increase of 21.9%, from $214.2 million recognized in the comparable 2023 period.

The increases in both periods were primarily driven by higher average assets under management distributed through intermediaries.

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12b-1 revenue is recognized in administrative, distribution, and servicing fees for the Advisor and R share classes of the U.S.

mutual funds and investment advisory fee revenue for our international products.

Advertising and promotion costs were $33.3 million in the second quarter of 2024, an increase of $10.4 million, or 45.4%, compared to the $22.9 million recognized in the 2023 quarter.

For the six months ended June 30, 2024, these costs were $58.6 million, an increase of $9.9 million, or 20.3%, compared to the 2023 period.

The increases for both periods were primarily driven by higher media spend and increased investment in our brand.

Technology, occupancy, and facility costs were $160.7 million in the second quarter of 2024, an increase of $6.2 million, or 4.0%, compared to the $154.7 million recognized in the 2023 quarter.

For the six months ended June

30, 2024, these costs were $310.8 million, an increase of $9.5 million, or 3.2%, compared with the 2023 period.

The increases in both periods were primarily related to higher costs from the firm's ongoing investment in its technology capabilities, including hosted solution licenses and depreciation.

These increases were partially offset by lower office facility costs related to double rent incurred in the 2023 period until we occupied our new UK facility in the second half of 2023, and a non-recurring cost benefit related to the UK facility in the first quarter of 2024.

General, administrative, and other expenses were $108.7 million in the second quarter of 2024, an increase of $8.7 million, or 8.7%, compared to the $100.0 million recognized in the 2023 quarter.

The increase was primarily due to higher professional fees and travel and entertainment.

mutual funds and investment advisory fee revenue for our international products and ETFs.

Advertising and promotion costs were $20.8 million in the third quarter of 2024, a decrease of $0.3 million, or 1.4%, compared to the $21.1 million recognized in the 2023 quarter.

For the nine months ended September 30, 2024, these costs were $79.4 million, an increase of $9.6 million, or 13.8%, compared to the 2023 period.

For the nine months ended September 30, 2024, the increase was primarily driven by higher media spend and increased investment in our brand.

Technology, occupancy, and facility costs were $164.0 million in the third quarter of 2024, an increase of $4.3 million, or 2.7%, compared to the $159.7 million recognized in the 2023 quarter.

For the nine months ended September 30, 2024, these costs were $474.8 million, an increase of $13.8 million, or 3.0%, compared with the 2023 period.

The increases in both periods were primarily related to higher costs from the firm's ongoing investment in its technology capabilities, primarily hosted solution licenses.

Specific to the nine months ended comparison, these increases were offset by lower office facility costs, as the 2023 period included the rent cost of two UK facilities until we occupied our new building in the second half of 2023, and the first quarter of 2024 included a non-recurring cost benefit related to the UK facility.

General, administrative, and other expenses were $104.2 million in the third quarter of 2024, an increase of $18.5 million, or 21.6%, compared to the $85.7 million recognized in the 2023 quarter.

For the nine months ended September 30, 2024, these costs were $305.5 million, an increase of $12.3 million, or 4.2%, compared with the 2023 period.

The increases in both periods were primarily due to a cost recovery recognized in 2023 that didn't recur in 2024, higher professional fees, and higher travel and entertainment.

These increases were partially offset by lower research fee expense as the firm changed its approach to paying for research, consistent with regulations and general industry practice.

For the six months ended June 30, 2024, these costs were $201.3 million, a decrease of $6.2 million, or 3.0%, compared with the 2023 period.

The decrease was primarily due to lower research fee expense as the firm changed its approach to paying for research, consistent with regulations and general industry practice.

This decrease was partially offset by higher professional fees and information services.

Change in fair value of contingent consideration.

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Every reporting period, we record the potential amount due under this arrangement at fair value.

In 2024, there was no change in the fair value of the contingent consideration liability.

In the three- and six-month periods ended June 30, 2023, we recognized reductions in the fair value of the contingent consideration liability of $23.2 million and $72.8 million, respectively.

Challenging market conditions have reduced revenue expectations used in the fair value determinations.

For the three months ended September 30, 2024, we recognized a $13.4 million reduction in the liability in 2024 compared to no change in the 2023 period.

During the nine months ended September 30, 2024 and 2023, we recognized reductions of the contingent consideration liability of $13.4 million and $72.8 million, respectively.

Challenging market conditions have reduced revenue expectations below the defined revenue targets resulting in a reduction of the contingent consideration liability to zero as of September 30, 2024.

Acquisition-related amortization and impairment costs.

As part of the purchase accounting for our acquisitions, we identified and separately recognized, at fair value, certain intangible assets.

During the three- and six-month periods ended June 30, 2024, we recognized $43.9 million and $73.8 million, respectively, in amortization and impairments related to the definite and indefinite-lived intangible assets.

In the second quarter of 2024, we also recognized impairments charges totaling $18.0 million on definite and indefinite-lived intangible assets.

During the three- and six-month periods ended June 30, 2023, we recognized $28.6 million and $54.6 million, respectively, in amortization.

No impairment costs were recognized during the 2023 periods.

Should conditions that led us to recognize the impairment charges deteriorate, additional impairments may be recognized in future periods.

During the three- and nine-month periods ended September 30, 2024, we recognized $51.5 million and $125.3 million, respectively, in amortization and impairments related to the definite and indefinite-lived intangible assets.

These amounts include impairment charges of $25.6 million and $59.7 million, respectively, recognized on certain definite and indefinite-lived intangibles as reduced growth expectations reduced their fair value.

For the comparable 2023 periods, amortization and impairment costs were of $38.5 million and $93.1 million, respectively.

Should conditions that led us to recognize the impairment charges deteriorate further, additional impairments may be recognized in future periods.

Non-operating income (loss)

Non-operating income for the second quarter of 2024 was $80.3 million compared to $106.2 million in the 2023 quarter.

The following table details the components of non-operating income for both the three- and six-month periods ended June 30, 2024 and 2023.

Three months ended Six months ended

Non-operating income for the third quarter of 2024 was $212.5 million compared to $2.8 million in the 2023 quarter.

The following table details the components of non-operating income for both the three- and nine-month periods ended September 30, 2024 and 2023.

Three months ended Nine months ended

(in millions) 9/30/2024 9/30/2023 9/30/2024 9/30/2023

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Market-related gains (losses) and equity in earnings (losses) 21.3 (4.5) 60.1 25.0

Net gains (losses) recognized upon deconsolidation (0.6) 0.7 (0.6) 0.7

Investments used to hedge the supplemental savings plan liability 41.1 (19.7) 105.6 58.6

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Non-operating income (loss) $ 212.5 $ 2.8 $ 481.7 $ 244.4

The investment gains recognized by our investment portfolio during the three- and six-month periods ended June 30, 2024 and 2023 were primarily due to strong market returns over both periods.

Higher investment gains earned by our investment portfolio during the three- and nine-month periods ended September 30, 2024 compared to the 2023 periods were primarily due to overall stronger market returns and higher dividend income over both periods.

The table above includes the net investment income of the underlying portfolios included in the consolidated

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The table below shows the impact that the consolidated sponsored investment products had on the individual lines of our unaudited condensed consolidated statements of income and the portion attributable to our interest:

Three months ended Six months ended

Three months ended Nine months ended

(in millions) 9/30/2024 9/30/2023 9/30/2024 9/30/2023

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Provision for income taxes

The GAAP effective tax rate for Q2 2024 and Q2 2023 was 24.8%.

The GAAP effective tax rate for the third quarter of 2024 was 22.5% compared with 24.8% in the third quarter of 2023.

These quarterly rates were the result of an overall year-to-date rate of 23.5% for 2024 and 26.1% for 2023.

The following table reconciles the statutory federal income tax rate to our effective tax rate on a U.S.

GAAP basis for the six months ended June 30, 2024 and 2023:

Six months ended

GAAP basis for the nine months ended September 30, 2024 and 2023:

Nine months ended

9/30/2024 9/30/2023

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Valuation allowance 0.3 2.7

Other items, including valuation allowances 0.6 (0.2)

Other items 0.3 (0.1)

Effective income tax rate 23.5 % 26.1 %

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The non-GAAP effective tax rate primarily adjusts for the impact of the consolidated investment products, including the net income attributable to the redeemable non-controlling interests.

Our non-GAAP effective tax rate was 24.6% in the second quarter of 2024 compared with 25.8% in second quarter of 2023.

Our non-GAAP effective tax rate was 24.3% for the six months ended June 30, 2024 compared to 27.9% for the 2023 period.

Our non-GAAP effective tax rate was 23.8% in the third quarter of 2024 compared with 24.8% in the third quarter of 2023.

Our non-GAAP effective tax rate was 24.1% for the nine months ended September 30, 2024 compared to 26.8% for the 2023 period.

The year-to-date 2024 U.S.

GAAP and non-GAAP effective tax rates decreased compared to 2023 rates due to lower valuation allowances recognized.

In the first half of 2023, we recognized a full valuation allowance against all UK-based deferred tax assets recorded at the time.

GAAP and non-GAAP effective tax rates decreased compared to 2023 rates primarily due to lower valuation allowances recognized.

In the first nine months of 2023, we recognized a full valuation allowance against all UK-based deferred tax assets recorded at the time.

We currently estimate that our effective tax rate for the full year 2024, on a U.S.

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GAAP financial measures for the three months ended

June 30, 2024 and 2023.

September 30, 2024 and 2023.

Three months ended 9/30/2024

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Net income attributable to T.

Rowe Price Diluted earnings per share (6)

Rowe Price Group, Inc.

Diluted earnings per share (6)

GAAP Basis (FS line item) $ 1,172.0 $ 613.6 $ 212.5 $ 185.7 $ 603.0 $ 2.64

5 unchanged sentences

(4.0) 4.0 — 0.5 3.5 0.02

Contingent consideration (1)

13.4 (13.4) — (1.8) (11.6) (0.05)

Intangible assets amortization and impairments (1)

12 unchanged sentences

Net income attributable to T.

Rowe Price Diluted earnings per share (6)

Rowe Price Group, Inc.

Diluted earnings per share (6)

GAAP Basis (FS line item) $ 1,089.4 $ 581.3 $ 2.8 $ 144.9 $ 453.2 $ 1.97

5 unchanged sentences

(13.7) 13.7 — 4.2 9.5 0.04

Contingent consideration (1)

23.2 (23.2) — 2.5 (25.7) (0.11)

Intangible assets amortization and impairments (1)

10 unchanged sentences

The following schedules reconcile certain U.S.

GAAP financial measures for the six months ended June 30, 2024 and 2023.

Six months ended 6/30/2024

GAAP financial measures for the nine months ended September 30, 2024 and 2023.

Nine months ended 9/30/2024

Operating expenses Net operating income Non-operating income (loss) Provision (benefit) for income taxes (5)

Net income attributable to T.

Rowe Price Diluted earnings per share (6)

Rowe Price Group, Inc.

Diluted earnings per share (6)

GAAP Basis (FS line item) $ 3,504.2 $ 1,764.9 $ 481.7 $ 527.5 $ 1,660.2 $ 7.23

5 unchanged sentences

(30.6) 30.6 — 7.2 23.4 0.10

Contingent consideration (1)

13.4 (13.4) — (1.8) (11.6) (0.05)

Intangible assets amortization and impairments (1)

9 unchanged sentences

Adjusted Non-GAAP Basis $ 3,276.2 $ 2,065.7 $ 114.4 $ 525.4 $ 1,654.7 $ 7.21

Six months ended 6/30/2023

Nine months ended 9/30/2023

Operating expenses Net operating income Non-operating income (loss) Provision (benefit) for income taxes (5)

Net income attributable to T.

Rowe Price Diluted earnings per share (6)

Rowe Price Group, Inc.

Diluted earnings per share (6)

GAAP Basis (FS line item) $ 3,219.5 $ 1,599.0 $ 244.4 $ 481.3 $ 1,351.1 $ 5.86

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(2) This non-GAAP adjustment removes the compensation expense impact from market valuation changes in the supplemental savings plan liability and the related net gains (losses) on investments designated as an economic hedge against the related liability.

Amounts deferred under the supplemental savings plan are adjusted for appreciation (depreciation) of hypothetical

investments chosen by participants.

Rowe Price investment products to economically hedge the exposure to these market movements.

Amounts deferred under the supplemental savings plan are adjusted for appreciation (depreciation) of hypothetical investments chosen by participants.

Rowe Price investment products to economically hedge the exposure to

these market movements.

Management believes it is useful to offset the non-operating investment income (loss) realized on the economic hedges against the related compensation expense and remove the net impact to help the reader's ability to understand our core operating results and to increase comparability period to period.

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The adjustment to net income attributable to T.

Rowe Price represents the net income of the consolidated products, net of redeemable non-controlling interests.

Rowe Price Group, Inc.

represents the net income of the consolidated products, net of redeemable non-controlling interests.

Management believes the consolidated T.

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(5) The income tax impacts were calculated in order to achieve an overall year-to-date non-GAAP effective tax rate of 24.1% in 2024 and 26.8% in 2023.

As such, the non-GAAP effective tax rate for the three months ended June 30, 2024 and 2023 was 24.6% and 25.8%, respectively.

As such, the non-GAAP effective tax rate for the three months ended September 30, 2024 and 2023 was 23.8% and 24.8%, respectively.

(6) This non-GAAP measure was calculated by applying the two-class method to adjusted net income attributable to T.

Rowe Price divided by the weighted-average common shares outstanding assuming dilution.

Rowe Price Group, Inc.

divided by the weighted-average common shares outstanding assuming dilution.

The calculation of adjusted net income allocated to common stockholders is as follows:

Three months ended Six months ended

Three months ended Nine months ended

9/30/2024 9/30/2023 9/30/2024 9/30/2023

Adjusted net income attributable to T.

Rowe Price $ 519.7 $ 466.5 $ 1,068.2 $ 855.9

Rowe Price Group, Inc.

$ 586.5 $ 499.5 $ 1,654.7 $ 1,355.4

adjusted net income allocated to outstanding restricted stock and stock unit holders 15.0 11.7 44.1 32.8

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Our discretionary investment portfolio is comprised of short duration bond funds, which typically yield higher than money market rates.

Our subsidiaries outside the United States held cash and discretionary investments of $680.6 million at June 30, 2024 and $699.0 million at December 31, 2023.

Our subsidiaries outside the United States held cash and discretionary investments of $771.5 million at September 30, 2024 and $699.0 million at December 31, 2023.

Given the availability of our financial resources and cash expected to be generated through future operations, we do not maintain an available external source of additional liquidity.

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The following table details how T.

Rowe Price’s interests in cash and investments relate to where they are presented on the unaudited condensed consolidated balance sheet as of June 30, 2024.

Rowe Price Group, Inc.’s interests in cash and investments relate to where they are presented on the unaudited condensed consolidated balance sheet as of September 30, 2024.

(in millions) Cash and cash equivalents Investments Net assets of consolidated T.

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Rowe Price products attributable to T.

Rowe Price 2,714.9 1,576.1 1,175.5 5,466.5

Rowe Price Group, Inc.

3,173.5 1,784.8 1,036.0 5,994.3

Investments in affiliated private investment funds (2)

3 unchanged sentences

Total cash and investments attributable to T.

Rowe Price 2,714.9 2,758.9 1,175.5 6,649.3

Rowe Price Group, Inc.

3,173.5 2,966.0 1,036.0 7,175.5

Redeemable non-controlling interests — — 763.4 763.4

As reported on unaudited condensed consolidated balance sheet at June 30, 2024

As reported on unaudited condensed consolidated balance sheet at September 30, 2024

$ 3,173.5 $ 2,966.0 $ 1,799.4 $ 7,938.9

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mutual funds, ETFs, and funds regulated outside the U.S.

The $1,175.5 million represents the total value at June 30, 2024 of our interest in the consolidated T.

The $1,036.0 million represents the total value at September 30, 2024 of our interest in the consolidated T.

Rowe Price investment products.

The total net assets of the T.

Rowe Price investment products at June 30, 2024 of $1,864.5 million includes assets of $1,929.6 million, less liabilities of $65.1 million as reflected in our unaudited condensed consolidated balance sheets.

Rowe Price investment products at September 30, 2024 of $1,799.4 million includes assets of $1,857.2 million, less liabilities of $57.8 million as reflected in our unaudited condensed consolidated balance sheets.

(2) Includes $203.4 million of non-controlling interests in consolidated entities and represents the portion of these investments, held by related parties, that we cannot sell in order to obtain cash for general operations.

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We increased our quarterly recurring dividend per common share in February 2024 by 1.6% to $1.24 per common share from $1.22 per common share.

Further, we expended $192.4 million in the first half of 2024 to repurchase 1.7 million shares of our outstanding common stock, at an average price of $114.23 per share.

Further, we expended $263.7 million in the first nine months of 2024 to repurchase 2.3 million shares of our outstanding common stock, at an average price of $112.30 per share.

These dividends and repurchases were expended using existing cash balances and cash generated from operations.

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2023 1,121.9 254.3 1,376.2

Six months ended 6/30/2024

Nine months ended 9/30/2024

850.7 263.7 1,114.4

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We expect to fund our anticipated capital expenditures with operating cash flows and other available resources.

The following table summarizes the cash flows for the six months ended June 30, 2024 and 2023, that are attributable to T.

Rowe Price, our consolidated sponsored investment products, and the related eliminations required in preparing the statement.

Six months ended

The following table summarizes the cash flows for the nine months ended September 30, 2024 and 2023, that are attributable to T.

Rowe Price Group, Inc., our consolidated sponsored investment products, and the related eliminations required in preparing the statement.

Nine months ended

9/30/2024 9/30/2023

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Cash flow attributable to T.

Rowe Price Cash flow attributable to consolidated sponsored investment products Elims

Rowe Price Group, Inc.

Cash flow attributable to consolidated sponsored investment products Elims

Cash flow attributable to T.

Rowe Price Cash flow attributable to consolidated sponsored investment products Elims

Rowe Price Group, Inc.

Cash flow attributable to consolidated sponsored investment products Elims

Cash flows from operating activities

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Operating activities attributable to T.

Rowe Price Group during the first half of 2024 provided cash flows of $1,470.4 million, an increase of $209.4 million from $1,261.0 million during the 2023 period.

The increase was primarily driven by a $159.3 million increase in net income and an $89.8 million increase in the add-back for non-cash items.

The details of our non-cash adjustments are detailed in the table above.

These increases to operating cash flows were offset in part by a $36.4 million decrease in cash flow due to timing differences related to the cash settlement of our assets and liabilities.

Additionally, in 2024, proceeds from net redemptions of investments that economically hedge our supplemental savings plan liability decreased $3.3 million as compared to the 2023 period.

Rowe Price Group, Inc.

during the first nine months of 2024 provided cash flows of $2,339.4 million, an increase of $222.1 million from $2,117.3 million provided during the 2023 period.

The increase was primarily driven by a $309.1 million increase in net income and a $1.5 million increase in cash flows related to timing differences associated with the cash settlement of our assets and liabilities.

These increases to operating cash flows were offset in part by a $17.0 million decrease in the add-back for non-cash items as detailed in the table above.

Additionally, in 2024, proceeds received from net redemptions of investments that economically hedge our supplemental savings plan liability decreased $71.5 million as compared to the 2023 period.

The remaining change in reported cash flows from operating activities was attributable to the net change in trading securities held in our consolidated investment products’ underlying portfolios.

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Net cash used in investing activities that were attributable to T.

Rowe Price Group totaled $75.7 million in 2024 compared with $163.5 million in 2023.

During 2024, net proceeds from the sale of investments of $172.0 million were higher compared to $1.1 million during the 2023 period.

Rowe Price Group, Inc.

totaled $143.1 million in 2024 compared with $333.3 million in 2023.

During 2024, we had net proceeds from the sale of investments of $209.9 million compared to net purchases of investments totaling $72.1 million during the 2023 period.

In 2024, we increased our property and equipment expenditures by $84.4 million and other investing activity by $7.4 million compared to the 2023 period.

We eliminate our capital in those sponsored investment products we consolidate in preparing our consolidated statements of cash flows.

The remaining change in reported cash flows from investing activities of $4.7 million is primarily related to the net cash removed from our balance sheet from consolidating and deconsolidating investment products.

The remaining change in reported cash flows from investing activities of $19.9 million is primarily related to the net cash removed from our unaudited condensed consolidated balance sheet from consolidating and deconsolidating investment products.

Financing Activities

Net cash used in financing activities attributable to T.

Rowe Price Group totaled $746.4 million in 2024 compared with $603.4 million in 2023.

During 2024, we used $195.5 million to repurchase 1.7 million shares compared to $45.2 million to repurchase 420 thousand shares in 2023.

The $7.3 million increase in dividends paid in 2024 is a result of the 1.6% increase in our quarterly dividend per share in 2024.

In addition, cash flow related to common stock issued under stock compensation plans increased by $4.2 million during 2024 compared to 2023.

The remaining change in reported cash flows from financing activities is primarily attributable to a $112.5 million increase in net subscriptions from redeemable non-controlling interest holders of our consolidated investment products during 2024.

Rowe Price Group, Inc.

totaled $1,089.4 million in 2024 compared with $960.9 million in 2023.

During 2024, we used $269.1 million to repurchase 2.3 million shares compared to $151.4 million to repurchase 1.4 million shares in 2023.

The $9.0 million increase in dividends paid in 2024 was a result of the 1.6% increase in our quarterly dividend per share over prior year.

In addition, cash flows generated from common stock issued under stock compensation plans increased by $2.6 million during 2024 compared to 2023.

The remaining change in reported cash flows from financing activities was primarily attributable to a $17.5 million increase in net subscriptions from redeemable non-controlling interest holders of our consolidated investment products during 2024.

CRITICAL ACCOUNTING POLICIES.

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From time to time, information or statements provided by or on behalf of T.

Rowe Price, including those within this report, may contain certain forward-looking information, including information or anticipated information relating to:

Rowe Price Group, Inc., including those within this report, may contain certain forward-looking information, including information or anticipated information relating to:

our revenues, net income, and earnings per share of common stock;

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Readers are cautioned that any forward-looking information provided by or on behalf of T.

Rowe Price is not a guarantee of future performance.

Rowe Price Group, Inc.

is not a guarantee of future performance.

Actual results may differ materially from those in forward-looking information because of various factors including, but not limited to, those discussed below and in Item 1A, Risk Factors, included in our Form 10-K Annual Report for 2023.

29 unchanged sentences

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 2. Management’s Discussion and Analysis