UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________________________________

FORM 10-Q

______________________________________


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, ~~2021~~2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 000-32191

______________________________________

T. ROWE PRICE GROUP, INC.

(Exact name of registrant as specified in its charter)


Maryland						52-2264646
(State of incorporation)						(I.R.S. Employer Identification No.)

100 East Pratt Street, Baltimore, Maryland 21202

(Address, including Zip Code, of principal executive offices)

(410) 345-2000

(Registrant’s telephone number, including area code)

________________


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common ~~stock,~~Stock, $.20 par value per share	TROW	The NASDAQ Stock Market LLC
~~(title of security)~~	~~(ticker symbol)~~	~~(Name of exchange on which registered)~~

______________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 ~~months.~~months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer (do not check if smaller reporting company)	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

The number of shares outstanding of the issuer’s common stock ($.20 par value), as of the latest practicable date,

April ~~27, 2021,~~26, 2022, is ~~226,855,575.~~227,296,619.

The exhibit index is at Item 6 on page ~~34.~~38.

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions, except share data)


		3/31/2021		12/31/2020			3/31/2022		12/31/2021
ASSETS	ASSETS					ASSETS
Cash and cash equivalents	Cash and cash equivalents	$	2,830.1	$	2,151.7	Cash and cash equivalents	$	1,997.5	$	1,523.1
Accounts receivable and accrued revenue	Accounts receivable and accrued revenue	885.9		863.1		Accounts receivable and accrued revenue	919.5		1,058.3
Investments	Investments	3,403.6		3,250.8		Investments	2,879.3		2,975.5
Assets of consolidated T. Rowe Price investment products ($1,782.9 million at March 31, 2021 and $2,497.4 million at December 31, 2020, related to variable interest entities)		1,946.8		2,695.5
Assets of consolidated T. Rowe Price investment products ($1,501.0 million at March 31, 2022 and $1,761.5 million at December 31, 2021, related to variable interest entities)						Assets of consolidated T. Rowe Price investment products ($1,501.0 million at March 31, 2022 and $1,761.5 million at December 31, 2021, related to variable interest entities)	1,658.2		1,962.8
Operating lease assets	Operating lease assets	110.2		117.6		Operating lease assets	164.5		201.2
Property and equipment, net		703.9		695.4
Property, equipment and software, net						Property, equipment and software, net	736.3		736.2
Intangible assets, net						Intangible assets, net	886.3		913.4
Goodwill	Goodwill	665.7		665.7		Goodwill	2,643.9		2,693.2
Other assets	Other assets	218.2		219.2		Other assets	462.5		445.3
Total assets	Total assets	$	10,764.4	$	10,659.0	Total assets	$	12,348.0	$	12,509.0

LIABILITIES	LIABILITIES					LIABILITIES
Accounts payable and accrued expenses	Accounts payable and accrued expenses	$	228.9	$	187.7	Accounts payable and accrued expenses	$	417.3	$	431.0
Liabilities of consolidated T. Rowe Price investment products ($49.0 million at March 31, 2021 and $47.7 million at December 31, 2020, related to variable interest entities)		53.7		57.7
Liabilities of consolidated T. Rowe Price investment products ($44.2 million at March 31, 2022 and $36.2 million at December 31, 2021, related to variable interest entities)						Liabilities of consolidated T. Rowe Price investment products ($44.2 million at March 31, 2022 and $36.2 million at December 31, 2021, related to variable interest entities)	55.9		51.5
Operating lease liabilities	Operating lease liabilities	146.0		154.1		Operating lease liabilities	211.8		249.2
Accrued compensation and related costs	Accrued compensation and related costs	260.8		133.6		Accrued compensation and related costs	293.6		256.8

Supplemental savings plan liability	Supplemental savings plan liability	769.9		772.2		Supplemental savings plan liability	826.3		882.6
Contingent consideration liability						Contingent consideration liability	211.5		306.3
Income taxes payable	Income taxes payable	284.0		85.0		Income taxes payable	214.6		77.9
Total liabilities	Total liabilities	1,743.3		1,390.3		Total liabilities	2,231.0		2,255.3

Commitments and contingent liabilities	Commitments and contingent liabilities	0		0		Commitments and contingent liabilities	0		0

Redeemable non-controlling interests	Redeemable non-controlling interests	1,012.9		1,561.7		Redeemable non-controlling interests	790.4		982.3

STOCKHOLDERS’ EQUITY	STOCKHOLDERS’ EQUITY					STOCKHOLDERS’ EQUITY
Preferred stock, undesignated, $.20 par value – authorized and unissued 20,000,000 shares	Preferred stock, undesignated, $.20 par value – authorized and unissued 20,000,000 shares	0		0		Preferred stock, undesignated, $.20 par value – authorized and unissued 20,000,000 shares	—		—
Common stock, $.20 par value—authorized 750,000,000; issued 226,948,000 shares at March 31, 2021 and 227,965,000 at December 31, 2020		45.4		45.6
Common stock, $.20 par value—authorized 750,000,000; issued 227,283,000 shares at March 31, 2022 and 229,175,000 at December 31, 2021						Common stock, $.20 par value—authorized 750,000,000; issued 227,283,000 shares at March 31, 2022 and 229,175,000 at December 31, 2021	45.5		45.8
Additional capital in excess of par value	Additional capital in excess of par value	654.6		654.6		Additional capital in excess of par value	668.2		919.8
Retained earnings	Retained earnings	7,338.7		7,029.8		Retained earnings	8,372.2		8,083.6
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(30.5)		(23.0)		Accumulated other comprehensive loss	(31.5)		(26.5)
Total stockholders’ equity attributable to T. Rowe Price Group, Inc.						Total stockholders’ equity attributable to T. Rowe Price Group, Inc.	9,054.4		9,022.7
Non-controlling interests in consolidated entities						Non-controlling interests in consolidated entities	272.2		248.7
Total permanent stockholders’ equity	Total permanent stockholders’ equity	8,008.2		7,707.0		Total permanent stockholders’ equity	9,326.6		9,271.4
Total liabilities, redeemable non-controlling interests, and permanent stockholders’ equity	Total liabilities, redeemable non-controlling interests, and permanent stockholders’ equity	$	10,764.4	$	10,659.0	Total liabilities, redeemable non-controlling interests, and permanent stockholders’ equity	$	12,348.0	$	12,509.0

The accompanying notes are an integral part of these statements.

Page 2

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in millions, except per-share amounts)


		Three months ended				Three months ended
		3/31/2021		3/31/2020				3/31/2022		3/31/2021
Revenues	Revenues						Revenues
Investment advisory fees	Investment advisory fees	$	1,687.8	$	1,327.8		Investment advisory fees	$	1,662.1	$	1,687.8
Capital allocation-based income							Capital allocation-based income	44.4		—
Administrative, distribution, and servicing fees	Administrative, distribution, and servicing fees	139.0		134.8			Administrative, distribution, and servicing fees	156.5		139.0
Net revenues	Net revenues	1,826.8		1,462.6			Net revenues	1,863.0		1,826.8

Operating expenses	Operating expenses						Operating expenses
Compensation and related costs	Compensation and related costs	583.5		440.7			Compensation and related costs	581.6		583.5
Distribution and servicing	Distribution and servicing	85.6		65.7			Distribution and servicing	85.9		85.6
Advertising and promotion	Advertising and promotion	18.9		24.9			Advertising and promotion	23.4		18.9
Product-related costs		41.0		41.6
Product and recordkeeping related costs							Product and recordkeeping related costs	80.4		41.0
Technology, occupancy, and facility costs	Technology, occupancy, and facility costs	117.3		105.4			Technology, occupancy, and facility costs	133.9		117.3
General, administrative, and other	General, administrative, and other	87.3		77.1			General, administrative, and other	80.4		87.3

Total operating expenses	Total operating expenses	933.6		755.4			Total operating expenses	985.6		933.6

Net operating income	Net operating income	893.2		707.2			Net operating income	877.4		893.2

Non-operating income (loss)	Non-operating income (loss)						Non-operating income (loss)
Net gains (losses) on investments	Net gains (losses) on investments	68.6		(154.6)			Net gains (losses) on investments	(89.9)		68.6
Net gains (losses) on consolidated investment products	Net gains (losses) on consolidated investment products	37.2		(330.3)			Net gains (losses) on consolidated investment products	(101.4)		37.2
Other income (loss)	Other income (loss)	(3.7)		(15.4)			Other income (loss)	(7.2)		(3.7)
Total non-operating income (loss)	Total non-operating income (loss)	102.1		(500.3)			Total non-operating income (loss)	(198.5)		102.1

Income before income taxes	Income before income taxes	995.3		206.9			Income before income taxes	678.9		995.3
Provision for income taxes	Provision for income taxes	230.5		40.3			Provision for income taxes	164.5		230.5
Net income	Net income	764.8		166.6			Net income	514.4		764.8
Less: net income (loss) attributable to redeemable non-controlling interests	Less: net income (loss) attributable to redeemable non-controlling interests	15.4		(176.5)			Less: net income (loss) attributable to redeemable non-controlling interests	(53.5)		15.4
Net income attributable to T. Rowe Price Group	Net income attributable to T. Rowe Price Group	$	749.4	$	343.1		Net income attributable to T. Rowe Price Group	$	567.9	$	749.4

Earnings per share on common stock of T. Rowe Price Group	Earnings per share on common stock of T. Rowe Price Group						Earnings per share on common stock of T. Rowe Price Group
Basic	Basic	$	3.20	$	1.43		Basic	$	2.43	$	3.20
Diluted	Diluted	$	3.17	$	1.41		Diluted	$	2.41	$	3.17

The accompanying notes are an integral part of these statements.

Page 3

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in millions)


		Three months ended				Three months ended
		3/31/2021		3/31/2020				3/31/2022		3/31/2021
Net income	Net income	$	764.8	$	166.6		Net income	$	514.4	$	764.8
Other comprehensive income (loss)	Other comprehensive income (loss)						Other comprehensive income (loss)
Currency translation adjustments	Currency translation adjustments						Currency translation adjustments
Consolidated T. Rowe Price investment products - variable interest entities	Consolidated T. Rowe Price investment products - variable interest entities	(18.9)		(25.1)			Consolidated T. Rowe Price investment products - variable interest entities	(15.5)		(18.9)
Reclassification gains recognized in non-operating income upon deconsolidation of certain T. Rowe Price investment products	Reclassification gains recognized in non-operating income upon deconsolidation of certain T. Rowe Price investment products	(2.6)		(.1)			Reclassification gains recognized in non-operating income upon deconsolidation of certain T. Rowe Price investment products	(1.6)		(2.6)
Total currency translation adjustments of consolidated T. Rowe Price investment products - variable interest entities	Total currency translation adjustments of consolidated T. Rowe Price investment products - variable interest entities	(21.5)		(25.2)			Total currency translation adjustments of consolidated T. Rowe Price investment products - variable interest entities	(17.1)		(21.5)
Equity method investments	Equity method investments	(.8)		(.1)			Equity method investments	.5		(.8)

Other comprehensive loss before income taxes		(22.3)		(25.3)
Net deferred tax benefits		3.0		2.0
Total other comprehensive loss		(19.3)		(23.3)
Other comprehensive income (loss) before income taxes							Other comprehensive income (loss) before income taxes	(16.6)		(22.3)
Net deferred tax (expense) benefits							Net deferred tax (expense) benefits	1.8		3.0
Total other comprehensive income (loss)							Total other comprehensive income (loss)	(14.8)		(19.3)

Total comprehensive income	Total comprehensive income	745.5		143.3			Total comprehensive income	499.6		745.5
Less: comprehensive income (loss) attributable to redeemable non-controlling interests	Less: comprehensive income (loss) attributable to redeemable non-controlling interests	3.6		(193.7)			Less: comprehensive income (loss) attributable to redeemable non-controlling interests	(63.3)		3.6
Total comprehensive income attributable to T. Rowe Price Group	Total comprehensive income attributable to T. Rowe Price Group	$	741.9	$	337.0		Total comprehensive income attributable to T. Rowe Price Group	$	562.9	$	741.9

The accompanying notes are an integral part of these statements.

Page 4

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)


		Three months ended					Three months ended
		3/31/2021		3/31/2020			3/31/2022		3/31/2021
Cash flows from operating activities	Cash flows from operating activities					Cash flows from operating activities
Net income	Net income	$	764.8	$	166.6	Net income	$	514.4	$	764.8
Adjustments to reconcile net income to net cash provided by operating activities	Adjustments to reconcile net income to net cash provided by operating activities					Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization of property and equipment		49.0		46.1
Depreciation and amortization of property, equipment and software						Depreciation and amortization of property, equipment and software	54.5		49.0
Amortization of acquisition-related assets and retention arrangements						Amortization of acquisition-related assets and retention arrangements	53.9		—
Fair value remeasurement of contingent consideration liability						Fair value remeasurement of contingent consideration liability	(45.5)		—

Stock-based compensation expense	Stock-based compensation expense	57.5		58.3		Stock-based compensation expense	63.6		57.5
Net (gains) losses recognized on investments	Net (gains) losses recognized on investments	(59.5)		167.3		Net (gains) losses recognized on investments	38.3		(59.5)
Net change in T. Rowe Price investment products used to economically hedge supplemental savings plan liability		22.0		(8.9)
Net redemptions in T. Rowe Price investment products used to economically hedge supplemental savings plan liability						Net redemptions in T. Rowe Price investment products used to economically hedge supplemental savings plan liability	6.1		22.0
Net change in securities held by consolidated T. Rowe Price investment products	Net change in securities held by consolidated T. Rowe Price investment products	(120.9)		234.6		Net change in securities held by consolidated T. Rowe Price investment products	180.1		(120.9)
Other changes in assets and liabilities		281.8		123.7
Other changes						Other changes	238.0		281.8
Net cash provided by operating activities	Net cash provided by operating activities	994.7		787.7		Net cash provided by operating activities	1,103.4		994.7

Cash flows from investing activities	Cash flows from investing activities					Cash flows from investing activities
Purchases of T. Rowe Price investment products		(12.5)		(225.1)
Dispositions of T. Rowe Price investment products		60.3		299.1
Purchases of investment products						Purchases of investment products	(6.0)		(12.5)
Dispositions of investment products						Dispositions of investment products	64.9		60.3
Net cash of T. Rowe Price investment products on deconsolidation	Net cash of T. Rowe Price investment products on deconsolidation	(27.3)		(.8)		Net cash of T. Rowe Price investment products on deconsolidation	(5.9)		(27.3)
Additions to property and equipment		(58.8)		(46.0)
Additions to property, equipment and software						Additions to property, equipment and software	(54.9)		(58.8)
Other investing activity	Other investing activity	7.5		.4		Other investing activity	5.7		7.5
Net cash (used in) provided by investing activities		(30.8)		27.6
Net cash provided by (used in) investing activities						Net cash provided by (used in) investing activities	3.8		(30.8)

Cash flows from financing activities	Cash flows from financing activities					Cash flows from financing activities
Repurchases of common stock	Repurchases of common stock	(259.2)		(891.3)		Repurchases of common stock	(320.1)		(259.2)
Common share issuances under stock-based compensation plans	Common share issuances under stock-based compensation plans	20.9		38.1		Common share issuances under stock-based compensation plans	5.1		20.9
Dividends paid to common stockholders of T. Rowe Price Group		(252.3)		(215.2)
Net subscriptions received from redeemable non-controlling interest holders		183.1		76.1
Dividends paid to common stockholders of T. Rowe Price						Dividends paid to common stockholders of T. Rowe Price	(279.2)		(252.3)
Net contributions from non-controlling interests in consolidated entities						Net contributions from non-controlling interests in consolidated entities	6.0		—
Net subscriptions (redemptions) received from redeemable non-controlling interest holders						Net subscriptions (redemptions) received from redeemable non-controlling interest holders	(55.9)		183.1
Net cash used in financing activities	Net cash used in financing activities	(307.5)		(992.3)		Net cash used in financing activities	(644.1)		(307.5)

Effect of exchange rate changes on cash and cash equivalents of consolidated T. Rowe Price investment products	Effect of exchange rate changes on cash and cash equivalents of consolidated T. Rowe Price investment products	.9		(1.2)		Effect of exchange rate changes on cash and cash equivalents of consolidated T. Rowe Price investment products	(2.7)		.9

Net change in cash and cash equivalents during period	Net change in cash and cash equivalents during period	657.3		(178.2)		Net change in cash and cash equivalents during period	460.4		657.3
Cash and cash equivalents at beginning of period, including $104.8 million at December 31, 2020, and $76.5 million at December 31, 2019, held by consolidated T. Rowe Price investment products		2,256.5		1,858.3
Cash and cash equivalents at end of period, including $83.7 million at March 31, 2021, and $117.7 million at March 31, 2020, held by consolidated T. Rowe Price investment products		$	2,913.8	$	1,680.1
Cash and cash equivalents at beginning of period, including $101.1 million at December 31, 2021, and $104.8 million at December 31, 2020, held by consolidated T. Rowe Price investment products						Cash and cash equivalents at beginning of period, including $101.1 million at December 31, 2021, and $104.8 million at December 31, 2020, held by consolidated T. Rowe Price investment products	1,624.2		2,256.5
Cash and cash equivalents at end of period, including $87.1 million at March 31, 2022, and $83.7 million at March 31, 2021, held by consolidated T. Rowe Price investment products						Cash and cash equivalents at end of period, including $87.1 million at March 31, 2022, and $83.7 million at March 31, 2021, held by consolidated T. Rowe Price investment products	$	2,084.6	$	2,913.8

The accompanying notes are an integral part of these statements.

Page 5

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(shares in thousands; dollars in millions)


		Three months ended 3/31/2021														Three months ended 3/31/2022
		Common shares outstanding	Common stock		Additional capital in excess of par value		Retained earnings		AOCI(1)		Total stockholders’ equity		Redeemable non-controlling interests			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 permanent stockholders’ equity		Redeemable non-controlling interests
Balances at December 31, 2020		227,965	$	45.6	$	654.6	$	7,029.8	$	(23.0)	$	7,707.0	$	1,561.7
Net income		—	—		—		749.4		—		749.4		15.4
Balances at December 31, 2021															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 (loss)															Net income (loss)	—	—		—		567.9		—		567.9		17.5		585.4		(53.5)
Other comprehensive income (loss), net of tax	Other comprehensive income (loss), net of tax	—	—		—		—		(7.5)		(7.5)		(11.8)		Other comprehensive income (loss), net of tax	—	—		—		—		(5.0)		(5.0)		—		(5.0)		(9.9)
Dividends declared ($1.08 per share)		—	—		—		(252.3)		—		(252.3)		—
Dividends declared ($1.20 per share)															Dividends declared ($1.20 per share)	—	—		—		(279.2)		—		(279.2)		—		(279.2)		—

Shares issued upon option exercises	Shares issued upon option exercises	572	.1		25.3		—		—		25.4		—		Shares issued upon option exercises	174	—		7.8		—		—		7.8		—		7.8		—

Net shares issued upon vesting of restricted stock units	Net shares issued upon vesting of restricted stock units	41	—		(3.7)		—		—		(3.7)		—		Net shares issued upon vesting of restricted stock units	41			(3.2)		—		—		(3.2)		—		(3.2)		—

Stock-based compensation expense	Stock-based compensation expense	—	—		57.5		—		—		57.5		—		Stock-based compensation expense	—	—		63.5		—		—		63.5		—		63.5		—
Restricted stock units issued as dividend equivalents	Restricted stock units issued as dividend equivalents	—	—		.1		(.1)		—		—		—		Restricted stock units issued as dividend equivalents	—	—		.1		(.1)		—		—		—		—		—
Common shares repurchased	Common shares repurchased	(1,630)	(.3)		(79.2)		(188.1)		—		(267.6)		—		Common shares repurchased	(2,107)	(.3)		(319.8)		—		—		(320.1)		—		(320.1)		—
Net subscriptions into T. Rowe Price investment products		—	—		—		—		—		—		187.5
Net contributions from non-controlling interests in consolidated entities															Net contributions from non-controlling interests in consolidated entities	—	—		—		—		—		—		6.0		6.0		—
Net redemptions from T. Rowe Price investment products															Net redemptions from T. Rowe Price investment products	—	—		—		—		—		—		—		—		(65.6)
Net deconsolidations of T. Rowe Price investment products	Net deconsolidations of T. Rowe Price investment products	—	—		—		—		—		—		(739.9)		Net deconsolidations of T. Rowe Price investment products	—	—		—		—		—		—		—		—		(62.9)
Balances at March 31, 2021		226,948	$	45.4	$	654.6	$	7,338.7	$	(30.5)	$	8,008.2	$	1,012.9
Balances at March 31, 2022															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

		Three months ended 3/31/2020
		Common shares outstanding	Common stock		Additional capital in excess of par value		Retained earnings		AOCI(1)		Total stockholders’ equity		Redeemable non-controlling interests
Balances at December 31, 2019		235,214	$	47.0	$	654.6	$	6,443.5	$	(43.0)	$	7,102.1	$	1,121.0

Net income		—	—		—		343.1		—		343.1		(176.5)
Other comprehensive income (loss), net of tax		—	—		—		—		(6.1)		(6.1)		(17.2)
Dividends declared ($0.90 per share)		—	—		—		(214.7)		—		(214.7)		—

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

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

Stock-based compensation expense		—	—		58.3		—		—		58.3		—
Restricted stock units issued as dividend equivalents		—	—		.1		(.1)		—		0		—
Common shares repurchased		(8,334)	(1.6)		(96.5)		(788.9)		—		(887.0)		—
Net subscriptions into T. Rowe Price investment products		—	—		—		—		—		—		63.8
Net deconsolidations of T. Rowe Price investment products		—	—		—		—		—		—		(20.1)
Balances at March 31, 2020		227,985	$	45.6	$	654.6	$	5,782.9	$	(49.1)	$	6,434.0	$	971.0


	Three months ended 3/31/2021
	Common shares outstanding	Common stock		Additional capital in excess of par value		Retained earnings		AOCI(1)		Total permanent stockholders’ equity		Redeemable non-controlling interests
Balances at December 31, 2020	227,965	$	45.6	$	654.6	$	7,029.8	$	(23.0)	$	7,707.0	$	1,561.7



Net income	—	—		—		749.4		—		749.4		15.4
Other comprehensive income (loss), net of tax	—	—		—		—		(7.5)		(7.5)		(11.8)
Dividends declared ($1.08 per share)	—	—		—		(252.3)		—		(252.3)		—

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

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

Stock-based compensation expense	—	—		57.5		—		—		57.5		—
Restricted stock units issued as dividend equivalents	—	—		.1		(.1)		—		—		—
Common shares repurchased	(1,630)	(.3)		(79.2)		(188.1)		—		(267.6)		—
Net subscriptions into T. Rowe Price investment products	—	—		—		—		—		—		187.5
Net deconsolidations of T. Rowe Price investment products	—	—		—		—		—		—		(739.9)
Balances at March 31, 2021	226,948	$	45.4	$	654.6	$	7,338.7	$	(30.5)	$	8,008.2	$	1,012.9

(1) Accumulated other comprehensive ~~income.~~

income

The accompanying notes are an integral part of these statements.

Page 6

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – THE COMPANY AND BASIS OF PREPARATION.

T. Rowe Price Group Inc. 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

~~T. Rowe Price~~affiliated products. The other ~~T. Rowe Price~~affiliated products ~~include~~include: open-ended investment products offered to investors outside the U.S., ~~and~~ products offered through variable annuity life insurance plans in the U.S., affiliated private investment funds or private accounts, 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 also 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.

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.

On December 29, 2021, we completed our acquisition of Oak Hill Advisors, L.P., a leading alternative credit manager, and other entities that had common ownership (collectively, OHA). We acquired 100% of the equity interests of Oak Hill Advisors, L.P., 100% of the equity interests in entities that make co-investments in certain affiliated private investment funds (the "co-investment entities") and 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 (the "carried interest entities"). As of March 31, 2022, OHA had $57 billion of capital under management (which includes net assets value, portfolio value and/or unfunded capital). We have reflected the financial position, operating results and cash flows of OHA in these financial statements.

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. ~~Certain prior year amounts have been reclassified to conform to the 2021 presentation.~~

The unaudited interim financial information contained in these unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements contained in our ~~2020~~2021 Annual Report.

NEWLY ISSUED BUT NOT YET ADOPTED ACCOUNTING ~~GUIDANCE~~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.

Page 7

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

Revenues earned under agreements with clients include:

Three months ended 3/31/2021 Three months ended 3/31/2020
Administrative, distribution, and servicing fees Administrative, distribution, and servicing fees
(in millions) Investment advisory fees Administrative fees Distribution and servicing fees Net revenues Investment advisory fees Administrative fees Distribution and servicing fees Net revenues
U.S. mutual funds $ 1,050.2 $ 78.7 $ 29.1 $ 1,158.0 $ 876.2 $ 77.2 $ 27.9 $ 981.3
Subadvised funds, separate accounts, collective investment trusts, and other investment products 637.6 0 0 637.6 451.6 0 0 451.6
Other clients(1)
0 31.2 0 31.2 0 29.7 0 29.7
$ 1,687.8 $ 109.9 $ 29.1 $ 1,826.8 $ 1,327.8 $ 106.9 $ 27.9 $ 1,462.6


	Three months ended 3/31/2022										Three months ended 3/31/2021
			Administrative, distribution, and servicing fees										Administrative, distribution, and servicing fees
(in millions)	Investment advisory fees		Administrative fees		Distribution and servicing fees		Capital allocation-based income		Net revenues		Investment advisory fees		Administrative fees		Distribution and servicing fees		Net revenues
U.S. mutual funds	$	976.5	$	93.1	$	26.3	$	—	$	1,095.9	$	1,050.2	$	78.7	$	29.1	$	1,158.0
Subadvised funds, separate accounts, collective investment trusts, and other investment products	685.6		—		—		44.4		730.0		637.6		—		—		637.6
Other clients(1)	—		37.1		—		—		37.1		—		31.2		—		31.2
	$	1,662.1	$	130.2	$	26.3	$	44.4	$	1,863.0	$	1,687.8	$	109.9	$	29.1	$	1,826.8

(1) Other clients primarily include individuals, defined contribution plans, college savings plans, and institutions related to ~~model delivery.~~our non-discretionary advisory services.

Total net revenues earned from our related parties ~~specifically T. Rowe Price investment products,~~ aggregate ~~$1,482.3~~$1,536.4 million and ~~$1,207.7~~$1,482.3 million for the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively. Accounts

~~Page 7~~

receivable from these products aggregate to ~~$540.0~~$584.5 million at March 31, ~~2021,~~2022 and ~~$523.4~~$577.9 million at December 31, ~~2020.~~

In the second quarter of 2020, we changed our fee structure of the target date retirement funds such that our investment advisory fee revenue is now earned at the target date retirement fund level rather than at the underlying mutual fund level. As a result, we have modified our investment advisory fee and assets under management presentation below to separately breakout the fees earned and assets under management of our multi-asset portfolios. All prior periods have been recast to conform to this new presentation and to provide comparability.2021.

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


		Three months ended				Three months ended
(in millions)	(in millions)	3/31/2021		3/31/2020			(in millions)	3/31/2022		3/31/2021
U.S. mutual funds	U.S. mutual funds						U.S. mutual funds
Equity	Equity	$	729.8	$	568.4		Equity	$	691.9	$	729.8
Fixed income, including money market	Fixed income, including money market	59.0		71.7			Fixed income, including money market	64.0		59.0
Multi-asset	Multi-asset	261.4		236.1			Multi-asset	220.6		261.4
		1,050.2		876.2				976.5		1,050.2
Subadvised funds, separate accounts, collective investment trusts, and other investment products	Subadvised funds, separate accounts, collective investment trusts, and other investment products						Subadvised funds, separate accounts, collective investment trusts, and other investment products
Equity	Equity	429.8		279.5			Equity	394.1		424.2
Fixed income, including money market	Fixed income, including money market	31.7		38.0			Fixed income, including money market	42.6		37.5
Multi-asset	Multi-asset	176.1		134.1			Multi-asset	184.0		175.9
Alternatives							Alternatives	64.9		—
		637.6		451.6				685.6		637.6
Total	Total	$	1,687.8	$	1,327.8		Total	$	1,662.1	$	1,687.8

Page 8

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


		Average during							Average during
		Three months ended				As of			Three months ended								As of
(in billions)	(in billions)	3/31/2021		3/31/2020			3/31/2021			12/31/2020		(in billions)	3/31/2022		3/31/2021			3/31/2022		12/31/2021
U.S. mutual funds	U.S. mutual funds											U.S. mutual funds
Equity	Equity	$	509.6	$	388.3		$	511.7		$	498.6	Equity	$	491.3	$	509.6		$	489.0	$	553.9
Fixed income, including money market	Fixed income, including money market	82.3		75.7			82.6			79.4		Fixed income, including money market	86.4		82.3			83.9		85.3
Multi-asset	Multi-asset	222.6		190.3			222.1			216.6		Multi-asset	220.3		222.6			216.5		232.2
		814.5		654.3			816.4			794.6			798.0		814.5			789.4		871.4
Subadvised funds, separate accounts, collective investment trusts, and other investment products	Subadvised funds, separate accounts, collective investment trusts, and other investment products											Subadvised funds, separate accounts, collective investment trusts, and other investment products
Equity	Equity	418.9		277.5			405.5			397.2		Equity	395.2		408.4			389.0		438.8
Fixed income, including money market	Fixed income, including money market	80.2		81.3			90.2			89.3		Fixed income, including money market	91.4		90.7			91.3		90.4
Multi-asset	Multi-asset	195.2		149.6			205.9			189.4		Multi-asset	233.4		195.2			239.9		245.5
Alternatives												Alternatives	41.9		—			42.2		41.7
		694.3		508.4			701.6			675.9			761.9		694.3			762.4		816.4
Total	Total	$	1,508.8	$	1,162.7		$	1,518.0		$	1,470.5	Total	$	1,559.9	$	1,508.8		$	1,551.8	$	1,687.8

Investors that we serve are primarily domiciled in the U.S.; investment advisory clients outside the U.S. account for ~~8.8%~~9.7% and ~~9.3%~~9.9% of our assets under management at March 31, ~~2021,~~2022 and December 31, ~~2020,~~2021, respectively.

~~Page 8~~

NOTE 3 – INVESTMENTS.

The carrying values of our investments that are not part of the consolidated T. Rowe Price investment products are as follows:


(in millions)	(in millions)	3/31/2021		12/31/2020		(in millions)	3/31/2022		12/31/2021

Investments held at fair value	Investments held at fair value					Investments held at fair value
T. Rowe Price investment products	T. Rowe Price investment products					T. Rowe Price investment products
Discretionary investments	Discretionary investments	$	1,664.3	$	1,647.7	Discretionary investments	$	502.2	$	518.7
Seed capital	Seed capital	269.5		169.5		Seed capital	224.6		264.8
Supplemental savings plan liability economic hedges	Supplemental savings plan liability economic hedges	766.9		768.1		Supplemental savings plan liability economic hedges	820.0		881.5
Investment partnerships and other investments	Investment partnerships and other investments	100.6		95.1		Investment partnerships and other investments	105.0		108.9
Investments in affiliated collateralized loan obligations						Investments in affiliated collateralized loan obligations	9.3		10.8
Equity method investments	Equity method investments					Equity method investments
T. Rowe Price investment products
Discretionary investments		245.8		242.9
Seed capital		203.7		178.6

23% investment in UTI Asset Management Company Limited (India)		149.1		145.5
Investment partnerships and other investments		2.7		2.4

T. Rowe Price investment products - seed capital						T. Rowe Price investment products - seed capital	134.0		141.7

Investments in affiliated private investment funds - carried interest						Investments in affiliated private investment funds - carried interest	642.1		609.8
Investments in affiliated private investment funds - seed/co-investment						Investments in affiliated private investment funds - seed/co-investment	153.1		151.3
23% Investment in UTI Asset Management Company Limited (India)						23% Investment in UTI Asset Management Company Limited (India)	170.3		165.4
Other investment partnerships and investments						Other investment partnerships and investments	2.5		2.5
Held to maturity						Held to maturity
Investments in affiliated collateralized loan obligations						Investments in affiliated collateralized loan obligations	115.2		119.1
U.S. Treasury note	U.S. Treasury note	1.0		1.0		U.S. Treasury note	1.0		1.0
Total	Total	$	3,403.6	$	3,250.8	Total	$	2,879.3	$	2,975.5

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.

Page 9

During the three months ended March 31, 2022, net losses on investments included $99.9 million of net unrealized losses related to investments held at fair value that were still held at March 31, 2022. For the same period of 2021, net gains on investments included $38.8 million of net unrealized gains related to investments held at fair value that were still held at March 31, 2021. ~~For the same period of 2020, net losses on investments included $103.6 million of net unrealized losses related to investments held at fair value that were still held at March 31, 2020.~~

During the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, certain T. Rowe Price investment products in which we provided initial seed capital at the time of formation were deconsolidated, as we no longer had a controlling interest. Depending on our ownership interest, we are now reporting our residual interests in these T. Rowe Price investment products as either an equity method investment or an investment held at fair value. Additionally, during the three months ended March 31, ~~2020,~~2022 and March 31, 2021, certain T. Rowe Price investment products ~~that were being accounted for as equity method investments~~ were consolidated, as we regained a controlling interest. The net impact of these changes on our unaudited condensed consolidated balance sheets and statements of income as of the dates the portfolios were deconsolidated or reconsolidated is detailed below.

Three months ended
(in millions) 3/31/2021 3/31/2020
Net decrease in assets of consolidated T. Rowe Price investment products $ (928.1) $ (46.2)
Net decrease in liabilities of consolidated T. Rowe Price investment products $ (15.3) $ (2.4)
Net decrease in redeemable non-controlling interests $ (739.9) $ (20.1)
Gains recognized upon deconsolidation $ 2.6 $ .1


	Three months ended
(in millions)	3/31/2022		3/31/2021
Net increase (decrease) in assets of consolidated T. Rowe Price investment products	$	(97.5)	$	(928.1)
Net increase (decrease) in liabilities of consolidated T. Rowe Price investment products	$	(8.6)	$	(15.3)
Net increase (decrease) in redeemable non-controlling interests	$	(63.0)	$	(739.9)

Gains recognized upon deconsolidation	$	1.6	$	2.6

The gains ~~or losses~~ recognized upon deconsolidation were the result of reclassifying currency translation adjustments accumulated on certain T. Rowe Price investment products with non-USD functional currencies from accumulated other comprehensive income to non-operating income.

INVESTMENTS IN AFFILIATED COLLATERALIZED LOAN OBLIGATIONS.

There is debt associated with our long-term investments in affiliated collateralized loan obligations (“CLOs”). As of March 31, 2022 and December 31, 2021, the debt is valued at $108.7 million and $113.5 million, and is reported in accounts payable and accrued expenses in our unaudited condensed consolidated balance sheets. The debt includes outstanding repurchase agreements of €66.7 million (equivalent to $73.8 million at March 31, 2022 and $75.9 million at December 31, 2021 at the respective EUR spot rates) and collateralized by the CLO investments. The debt also includes outstanding note facilities of €32.4 million (equivalent to $34.9 million at March 31, 2022 and $36.9 million at December 31, 2021 at the respective EUR spot rates) and are collateralized by first priority security interests in the assets of the consolidated OHA entity that is party to the notes. The debt bears interest at rates based on EURIBOR plus the initial margin, which equals all-in rates ranging from 1.70% to 1.95% as of March 31, 2022. The debt matures on various dates through 2032 or if the investments are paid back in full or cancelled.

~~Page 9~~

VARIABLE INTEREST ENTITIES.

Our investments at March 31, ~~2021~~2022 and December 31, ~~2020,~~2021 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)	(in millions)	3/31/2021		12/31/2020		(in millions)	3/31/2022		12/31/2021
Investment carrying values	Investment carrying values	$	289.6	$	144.7	Investment carrying values	$	951.9	$	943.3
Unfunded capital commitments	Unfunded capital commitments	11.3		12.3		Unfunded capital commitments	110.4		94.2
Accounts receivable	Accounts receivable	60.7		13.8		Accounts receivable	94.2		145.1
		$	361.6	$	170.8		$	1,156.5	$	1,182.6

The unfunded capital commitments totaling ~~$11.3~~$110.4 million at March 31, ~~2021~~2022 and ~~$12.3~~$94.2 million at December 31, ~~2020~~2021 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.

Page 10

INVESTMENTS IN AFFILIATED PARTNERS.

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)	3/31/2022		12/31/2021
Assets	$	695.4	$	692.7
Liabilities	$	1.1	$	56.4
Non-controlling interest	$	272.2	$	248.7

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. ~~We do~~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

~~value any investments using Level 3 inputs.~~ 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 liability 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 T. Rowe Price investment products which are presented separately on our unaudited condensed consolidated balance sheets and are detailed in Note 5.


		3/31/2021				12/31/2020					3/31/2022						12/31/2021
(in millions)	(in millions)	Level 1		Level 2		Level 1		Level 2		(in millions)	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
T. Rowe Price investment products	T. Rowe Price investment products									T. Rowe Price investment products
Cash equivalents held in money market funds	Cash equivalents held in money market funds	2,487.5		$	—	$	1,931.1	$	—	Cash equivalents held in money market funds	1,551.1		$	—	$	—	$	1,183.9	$	—	$	—
Discretionary investments	Discretionary investments	1,664.3		—		1,647.7		—		Discretionary investments	502.2		—		—		518.7		—		—
Seed capital	Seed capital	254.6		14.9		156.6		12.9		Seed capital	202.9		21.7		—		241.4		23.4		—
Supplemental savings plan liability economic hedges	Supplemental savings plan liability economic hedges	766.9				768.1		—		Supplemental savings plan liability economic hedges	820.0		—		—		881.5		—		—
Other investments	Other investments	.2		.7		.5		.6		Other investments	1.3		.1		—		.7		.1		—
Investments in affiliated collateralized loan obligations										Investments in affiliated collateralized loan obligations	—		9.3		—		—		10.8		—
Total	Total	$	5,173.5	$	15.6	$	4,504.0	$	13.5	Total	$	3,077.5	$	31.1	$	—	$	2,826.2	$	34.3	$	—

Contingent consideration liability										Contingent consideration liability	$	—	$	—	$	211.5	$	—	$	—	$	306.3

The fair value hierarchy level table above does not include the investment partnerships and other investments for which fair value is estimated using their NAV per share as a practical expedient. The carrying value of these investments as disclosed in Note 3 were ~~$99.7~~$103.6 million at March 31, ~~2021,~~2022, and ~~$94.0~~$108.1 million at December 31, ~~2020.~~2021.

Page 11

As part of the purchase consideration for our acquisition of OHA in December 2021, there was contingent consideration in the amount of up to $900.0 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 is remeasured each reporting period and recognized over the related service period. For the three months ended March 31, 2022, $5.1 million was recorded as part of compensation expense in our unaudited condensed consolidated statements of income for the portion of the earnout deemed compensatory.

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
(in millions)	Three Months Ended 3/31/2022
Balance, 12/31/2021	$	306.3
Measurement period adjustment	(49.3)
Unrealized (gains) losses, included in earnings	(45.5)
Balance, 3/31/2022	$	211.5

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 periods and rates and from changes pertaining to the achievement of the defined financial targets. The unrealized (gains) losses during the quarter are reflected in general, administrative and other expenses in our unaudited condensed consolidated statements of income.

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. As of March 31, 2022, $2.0 million was recognized as part of compensation expense in our unaudited condensed consolidated statements of income.

NOTE 5 – CONSOLIDATED T. ROWE PRICE INVESTMENT ~~PRODUCTS.~~PRODUCTS AND OTHER ENTITIES.

The T. Rowe Price 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 are considered voting interest entities, while those regulated outside the U.S. are considered variable interest entities.

Page 1012

The following table details the net assets of the consolidated T. Rowe Price investment products:


		3/31/2021						12/31/2020							3/31/2022						12/31/2021
(in millions)	(in millions)	Voting interest entities		Variable interest entities		Total		Voting interest entities		Variable interest entities		Total		(in millions)	Voting interest entities		Variable interest entities		Total		Voting interest entities		Variable interest entities		Total
Cash and cash equivalents(1)	Cash and cash equivalents(1)	$	3.0	$	80.7	$	83.7	$	7.1	$	97.7	$	104.8	Cash and cash equivalents(1)	$	9.5	$	77.5	$	87.0	$	7.3	$	93.8	$	101.1
Investments(2)	Investments(2)	157.5		1,664.5		1,822.0		188.2		2,372.7		2,560.9		Investments(2)	144.4		1,391.5		1,535.9		188.9		1,645.0		1,833.9
Other assets	Other assets	3.4		37.7		41.1		2.8		27.0		29.8		Other assets	3.3		32.0		35.3		5.1		22.7		27.8
Total assets	Total assets	163.9		1,782.9		1,946.8		198.1		2,497.4		2,695.5		Total assets	157.2		1,501.0		1,658.2		201.3		1,761.5		1,962.8
Liabilities	Liabilities	4.7		49.0		53.7		10.0		47.7		57.7		Liabilities	11.7		44.2		55.9		15.3		36.2		51.5
Net assets	Net assets	$	159.2	$	1,733.9	$	1,893.1	$	188.1	$	2,449.7	$	2,637.8	Net assets	$	145.5	$	1,456.8	$	1,602.3	$	186.0	$	1,725.3	$	1,911.3

Attributable to T. Rowe Price Group		$	96.4	$	783.8	$	880.2	$	130.7	$	945.4	$	1,076.1
Attributable to T. Rowe Price														Attributable to T. Rowe Price	$	99.6	$	712.3	$	811.9	$	125.3	$	803.7	$	929.0
Attributable to redeemable non-controlling interests	Attributable to redeemable non-controlling interests	62.8		950.1		1,012.9		57.4		1,504.3		1,561.7		Attributable to redeemable non-controlling interests	45.9		744.5		790.4		60.7		921.6		982.3
		$	159.2	$	1,733.9	$	1,893.1	$	188.1	$	2,449.7	$	2,637.8		$	145.5	$	1,456.8	$	1,602.3	$	186.0	$	1,725.3	$	1,911.3

(1) Cash and cash equivalents includes ~~$2.8~~$6.6 million at March 31, ~~2021,~~2022, and ~~$7.0~~$6.5 million at December 31, ~~2020,~~2021, of T. Rowe Price money market mutual funds.

(2) Investments include ~~$24.4~~$39.3 million at March 31, ~~2021,~~2022, and ~~$26.9~~$42.5 million at December 31, ~~2020~~2021 of other T. Rowe Price investment products.

Although we can redeem our net interest in these consolidated T. Rowe Price 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.

Since third party investors in these investment products have no recourse to our credit, our overall risk related to the net assets of consolidated T. Rowe Price investment products is limited to valuation changes associated with our net 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 T. Rowe Price investment products for the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, are reflected in our unaudited condensed consolidated statements of income as follows:


		Three months ended													Three months ended
		3/31/2021						3/31/2020							3/31/2022						3/31/2021
(in millions)	(in millions)	Voting interest entities		Variable interest entities		Total		Voting interest entities		Variable interest entities		Total		(in millions)	Voting interest entities		Variable interest entities		Total		Voting interest entities		Variable interest entities		Total
Operating expenses reflected in net operating income	Operating expenses reflected in net operating income	$	(.2)	$	(3.3)	$	(3.5)	$	(.2)	$	(3.5)	$	(3.7)	Operating expenses reflected in net operating income	$	(.2)	$	(2.3)	$	(2.5)	$	(.2)	$	(3.3)	$	(3.5)
Net investment income (loss) reflected in non-operating income (loss)	Net investment income (loss) reflected in non-operating income (loss)	6.1		31.1		37.2		(35.2)		(295.1)		(330.3)		Net investment income (loss) reflected in non-operating income (loss)	(6.6)		(94.8)		(101.4)		6.1		31.1		37.2
Impact on income before taxes	Impact on income before taxes	$	5.9	$	27.8	$	33.7	$	(35.4)	$	(298.6)	$	(334.0)	Impact on income before taxes	$	(6.8)	$	(97.1)	$	(103.9)	$	5.9	$	27.8	$	33.7

Net income (loss) attributable to T. Rowe Price Group		$	4.0	$	14.3	$	18.3	$	(22.6)	$	(134.9)	$	(157.5)
Net income (loss) attributable to T. Rowe Price														Net income (loss) attributable to T. Rowe Price	$	(4.7)	$	(45.7)	$	(50.4)	$	4.0	$	14.3	$	18.3
Net income (loss) attributable to redeemable non-controlling interests	Net income (loss) attributable to redeemable non-controlling interests	1.9		13.5		15.4		(12.8)		(163.7)		(176.5)		Net income (loss) attributable to redeemable non-controlling interests	(2.1)		(51.4)		(53.5)		1.9		13.5		15.4
		$	5.9	$	27.8	$	33.7	$	(35.4)	$	(298.6)	$	(334.0)		$	(6.8)	$	(97.1)	$	(103.9)	$	5.9	$	27.8	$	33.7

The operating expenses of the consolidated investment products are reflected in general, administrative and other ~~operating~~ expenses. In preparing our unaudited condensed consolidated financial statements, we eliminated operating expenses of ~~$1.3~~$0.9 million and ~~$2.5~~$1.3 million for the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively, against the investment advisory and administrative fees earned from these products. The net investment income (loss) reflected in ~~non-~~

~~Page 11~~

~~operating~~non-operating income (loss) includes dividend and interest income ~~and~~as well as realized and

Page 13

unrealized gains and losses on the underlying securities held by the consolidated T. Rowe Price investment products.

The table below details the impact of these consolidated investment products on the individual lines of our unaudited condensed consolidated statements of cash flows for the three months ended March 31, ~~2021~~2022 and ~~2020.~~2021.


		Three months ended													Three months ended
		3/31/2021						3/31/2020							3/31/2022						3/31/2021
(in millions)	(in millions)	Voting interest entities		Variable interest entities		Total		Voting interest entities		Variable interest entities		Total		(in millions)	Voting interest entities		Variable interest entities		Total		Voting interest entities		Variable interest entities		Total
Net cash provided by (used in) operating activities	Net cash provided by (used in) operating activities	$	(31.7)	$	(112.0)	$	(143.7)	$	11.3	$	(87.0)	$	(75.7)	Net cash provided by (used in) operating activities	$	(2.6)	$	88.2	$	85.6	$	(31.7)	$	(112.0)	$	(143.7)
Net cash used in investing activities	Net cash used in investing activities	(9.1)		(18.2)		(27.3)		(.8)		0		(.8)		Net cash used in investing activities	—		(5.9)		(5.9)		(9.1)		(18.2)		(27.3)
Net cash provided by financing activities		36.7		112.3		149.0		2.7		116.2		118.9
Net cash provided by (used in) financing activities														Net cash provided by (used in) financing activities	4.9		(95.9)		(91.0)		36.7		112.3		149.0
Effect of exchange rate changes on cash and cash equivalents of consolidated T. Rowe Price investment products	Effect of exchange rate changes on cash and cash equivalents of consolidated T. Rowe Price investment products	0		.9		.9		0		(1.2)		(1.2)		Effect of exchange rate changes on cash and cash equivalents of consolidated T. Rowe Price investment products	—		(2.7)		(2.7)		—		.9		.9
Net change in cash and cash equivalents during period	Net change in cash and cash equivalents during period	(4.1)		(17.0)		(21.1)		13.2		28.0		41.2		Net change in cash and cash equivalents during period	2.3		(16.3)		(14.0)		(4.1)		(17.0)		(21.1)
Cash and cash equivalents at beginning of year	Cash and cash equivalents at beginning of year	7.1		97.7		104.8		9.9		66.6		76.5		Cash and cash equivalents at beginning of year	7.3		93.8		101.1		7.1		97.7		104.8
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	3.0	$	80.7	$	83.7	$	23.1	$	94.6	$	117.7	Cash and cash equivalents at end of period	$	9.6	$	77.5	$	87.1	$	3.0	$	80.7	$	83.7

The net cash provided by financing activities during the three months ended March 31, 2022 and 2021 ~~and 2020~~ includes ~~$34.1~~$35.1 million and ~~$42.8~~$34.1 million, respectively, of net subscriptions we made into the consolidated T. Rowe Price investment products, net of dividends received. These cash flows were eliminated in consolidation.

FAIR VALUE MEASUREMENTS.

We determine the fair value of investments held by consolidated T. Rowe Price 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. The value of investments using Level 3 inputs is insignificant.

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 T. Rowe Price investment products using fair value measurements determined based on the differing levels of inputs.


		3/31/2021				12/31/2020					3/31/2022				12/31/2021
(in millions)	(in millions)	Level 1		Level 2		Level 1		Level 2		(in millions)	Level 1		Level 2		Level 1		Level 2
Assets	Assets									Assets
Cash equivalents	Cash equivalents	$	2.8	$	0	$	7.0	$	0	Cash equivalents	$	6.6	$	2.1	$	6.5	$	.7
Equity securities	Equity securities	225.7		449.9		308.0		708.0		Equity securities	212.4		239.0		247.8		340.3
Fixed income securities	Fixed income securities	0		1,107.2		0		1,411.3		Fixed income securities	—		1,024.6		—		1,187.4
Other investments	Other investments	4.0		35.2		2.6		131.0		Other investments	8.6		51.3		5.7		52.7
		$	232.5	$	1,592.3	$	317.6	$	2,250.3		$	227.6	$	1,317.0	$	260.0	$	1,581.1

Liabilities	Liabilities	$	(.4)	$	(9.9)	$	(.4)	$	(18.8)	Liabilities	$	(1.9)	$	(13.1)	$	(.7)	$	(9.7)

Page 1214

NOTE 6 ~~– STOCKHOLDERS’ EQUITY.~~- GOODWILL AND INTANGIBLE ASSETS.

~~Accounts payable~~Goodwill and ~~accrued expenses includes liabilities~~intangible assets consist of ~~$10.9~~the following:


(in millions)	3/31/2022		12/31/2021
Goodwill	$	2,643.9	$	2,693.2
Indefinite-lived intangible assets - trade name	134.7		134.7
Indefinite-lived intangible assets - investment advisory agreements	164.8		164.8
Definite-lived intangible assets - investment advisory agreements	586.8		613.9
Total	$	3,530.2	$	3,606.6

Estimated amortization expense for the definite-lived investment advisory agreements intangible assets for the remainder of 2022 is $81.4 million, at$108.1 million for 2023, $105.7 million for 2024, $105.0 million for 2025, and $87.7 million for 2026. Amortization expense for the definite-lived investment advisory agreements intangible assets was $27.1 million for the three months ended March 31, ~~2021, and $2.5 million at December 31, 2020, for common stock repurchases that settled~~2022.

Goodwill activity during the ~~first week~~three months ended March 31, 2022 was as follows:


(in millions)	2022
Balance, 12/31/2021	$	2,693.2
Measurement period adjustment	(49.3)
Balance, 3/31/2022	$	2,643.9

We evaluate the carrying amount of ~~April 2021 and January 2021, respectively.~~goodwill for possible impairment on an annual basis in the third quarter using a fair value approach or if triggering events occur that require us to evaluate for impairment earlier.

NOTE 7 – STOCK-BASED COMPENSATION.

STOCK OPTIONS.

The following table summarizes the status of, and changes in, our stock options during the three months ended March 31, ~~2021.~~2022.

Options
Weighted-
average
exercise
price
Outstanding at December 31, 2020 4,329,056 $ 72.52
Exercised (748,203) $ 72.28
Outstanding at March 31, 2021 3,580,853 $ 72.57
Exercisable at March 31, 2021 3,580,853 $ 72.57


	Options	Weighted- average exercise price
Outstanding at December 31, 2021	2,846,579	$	72.87



Exercised	(214,772)	$	64.58


Outstanding at March 31, 2022	2,631,807	$	73.55
Exercisable at March 31, 2022	2,631,807	$	73.55

Page 15

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 three months ended March 31, ~~2021.~~2022.


		Restricted shares	Restricted stock units	Weighted-average fair value			Restricted shares	Restricted stock units	Weighted-average fair value
Nonvested at December 31, 2020		7,412	6,367,059	$	116.51
Nonvested at December 31, 2021						Nonvested at December 31, 2021	5,720	5,701,865	$	146.87
Time-based grants	Time-based grants	0	3,397	$	154.03	Time-based grants	—	8,078	$	173.08

Dividend equivalents granted to non-employee directors	Dividend equivalents granted to non-employee directors	0	550	$	172.22	Dividend equivalents granted to non-employee directors	—	786	$	153.10
Vested	Vested	0	(64,942)	$	97.37	Vested	—	(62,378)	$	98.23
Forfeited	Forfeited	0	(19,489)	$	114.66	Forfeited	—	(61,216)	$	141.91
Nonvested at March 31, 2021		7,412	6,286,575	$	116.73
Nonvested at March 31, 2022						Nonvested at March 31, 2022	5,720	5,587,135	$	147.50

Nonvested at March 31, ~~2021,~~2022, includes performance-based restricted stock units of ~~361,609.~~294,518. These nonvested performance-based restricted stock units include ~~198,205~~81,123 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 March 31, ~~2021.~~2022. Estimated future compensation expense will change to reflect future grants of restricted stock awards and units, future option grants, changes in the probability of performance thresholds being met, and adjustments for actual forfeitures.

(in millions)
Second quarter 2021 $ 56.9
Third quarter 2021 56.7
Fourth quarter 2021 50.2
2022 117.4
2023 through 2026 97.2
Total $ 378.4


(in millions)

Second quarter 2022	$	64.0
Third quarter 2022	63.1
Fourth quarter 2022	54.3
2023	125.5
2024 through 2026	105.4
Total	$	412.3

~~Page 13~~

NOTE 8 – EARNINGS PER SHARE CALCULATIONS.

The following table presents the reconciliation of net income attributable to T. Rowe Price ~~Group~~ 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. ~~NaN~~No outstanding stock options had an anti-dilutive impact on the diluted earnings per common share calculation in the periods presented.


		Three months ended				Three months ended
(in millions)	(in millions)	3/31/2021		3/31/2020			(in millions)	3/31/2022		3/31/2021
Net income attributable to T. Rowe Price Group		749.4		$	343.1
Net income attributable to T. Rowe Price							Net income attributable to T. Rowe Price	$	567.9	$	749.4
Less: net income allocated to outstanding restricted stock and stock unit holders	Less: net income allocated to outstanding restricted stock and stock unit holders	19.9		9.4			Less: net income allocated to outstanding restricted stock and stock unit holders	13.0		19.9
Net income allocated to common stockholders	Net income allocated to common stockholders	$	729.5	$	333.7		Net income allocated to common stockholders	$	554.9	$	729.5

Weighted-average common shares	Weighted-average common shares						Weighted-average common shares
Outstanding	Outstanding	227.7		234.1			Outstanding	228.2		227.7
Outstanding assuming dilution	Outstanding assuming dilution	230.0		236.8			Outstanding assuming dilution	229.8		230.0

Page 16

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

The changes in each component of accumulated other comprehensive loss, including reclassification adjustments for the three months ended March 31, ~~2021~~2022 and ~~2020~~2021 are presented in the table below.


		Three months ended 3/31/2021						Three months ended 3/31/2020							Three months ended 3/31/2022						Three months ended 3/31/2021

(in millions)	(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		(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	Balances at beginning of period	$	(43.6)	$	20.6	$	(23.0)	$	(46.9)	$	3.9	$	(43.0)	Balances at beginning of period	$	(36.7)	$	10.2	$	(26.5)	$	(43.6)	$	20.6	$	(23.0)

Other comprehensive income (loss) before reclassifications and income taxes	Other comprehensive income (loss) before reclassifications and income taxes	(.8)		(7.1)		(7.9)		(.1)		(7.9)		(8.0)		Other comprehensive income (loss) before reclassifications and income taxes	.5		(5.6)		(5.1)		(.8)		(7.1)		(7.9)
Reclassification adjustments recognized in non-operating income	Reclassification adjustments recognized in non-operating income	0		(2.6)		(2.6)		0		(.1)		(.1)		Reclassification adjustments recognized in non-operating income	—		(1.6)		(1.6)		—		(2.6)		(2.6)
		(.8)		(9.7)		(10.5)		(.1)		(8.0)		(8.1)			.5		(7.2)		(6.7)		(.8)		(9.7)		(10.5)
Net deferred tax benefits (income taxes)	Net deferred tax benefits (income taxes)	.5		2.5		3.0		0		2.0		2.0		Net deferred tax benefits (income taxes)	(.1)		1.9		1.8		.5		2.5		3.0
Other comprehensive income (loss)	Other comprehensive income (loss)	(.3)		(7.2)		(7.5)		(.1)		(6.0)		(6.1)		Other comprehensive income (loss)	.4		(5.3)		(4.9)		(.3)		(7.2)		(7.5)
Balances at end of period	Balances at end of period	$	(43.9)	$	13.4	$	(30.5)	$	(47.0)	$	(2.1)	$	(49.1)	Balances at end of period	$	(36.3)	$	4.9	$	(31.4)	$	(43.9)	$	13.4	$	(30.5)

The other comprehensive income (loss) in the table above excludes ~~$11.8~~losses of $9.9 million and ~~$17.2~~income of $11.8 million of other comprehensive ~~loss~~income related to redeemable non-controlling interests held in our consolidated products for the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively.

~~Page 14~~

NOTE 10 – COMMITMENTS AND CONTINGENCIES.

COMMITMENTS.

T. Rowe Price has committed $499.1 million to fund OHA products over the next five years.

CONTINGENCIES.

On February 14, 2017, T. Rowe Price Group, Inc., T. Rowe Price Associates, Inc., T. Rowe Price Trust Company, current and former members of the management committee, and trustees of the T. Rowe Price U.S. Retirement Program were named as defendants in a lawsuit filed in the United States District Court for the District of Maryland. The lawsuit alleges breaches of ERISA’s fiduciary duty and prohibited transaction provisions on behalf of a class of all participants and beneficiaries of the T. Rowe Price 401(k) Plan from February 14, 2011, to the time of judgment. The matter has been certified as a class action. The parties reached a settlement agreement, and, on January 18, 2022, the Court provided preliminary approval of the proposed settlement and set a fairness hearing for May 24, 2022. The proposed settlement would not be material to T. Rowe Price believes the claims are without merit and is vigorously defending the action. The parties each filed motions for summary judgment and, with the exception of one claim, the court has denied the parties’ cross motions for summary judgment. A trial has been scheduled to begin in September 2021. We cannot predict the eventual outcome, or whether it will have a material negative impact on our financial results, or estimate the possible loss or range of loss that may arise from any negative outcome.Group, Inc.

In addition to the matter discussed above, various claims against us arise in the ordinary course of business, including employment-related claims. In the opinion of management, after consultation with counsel, the likelihood of an adverse determination in one or more of these pending ordinary course of business claims that would have a material adverse effect on our financial position or results of operations is remote.

Page 1517

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 March 31, ~~2021,~~2022, the related condensed consolidated statements of income, ~~and~~ comprehensive income, stockholders’ equity, and cash flows for the three-month periods ended March 31, ~~2021~~2022 and ~~2020,~~2021, 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, ~~2020,~~2021, 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 ~~11, 2021,~~24, 2022, 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, ~~2020,~~2021, 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

April ~~29, 2021~~28, 2022

Page 1618

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations.

OVERVIEW.

Our revenues and net income are derived primarily from investment advisory services provided to individual and institutional investors in U.S. mutual funds, subadvised funds, separately managed accounts, collective investment trusts, and other ~~T. Rowe Price~~affiliated products. The other ~~T. Rowe Price~~affiliated products ~~include~~include: open-ended investment products offered to investors outside the U.S., ~~and~~ products offered through variable annuity life insurance plans in the U.S., affiliated private investment funds or private accounts, 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 also 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.

We manage a broad range of U.S., international and global stock, bond, and money market mutual funds and collective investment trusts and other investment products, which 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 and results of operations. ~~Additionally, approximately 30% of our operating expenses are impacted by fluctuations in our assets under management.~~

We incur significant expenditures to develop new products and services and improve and expand our capabilities and distribution channels in order to attract new investment advisory clients and additional investments from our existing clients. These efforts often involve costs that precede any future revenues that we may recognize from an increase to our assets under management.

The general trend to passive investing has been persistent and accelerated in recent years, which has negatively impacted our new client inflows. However, over the long term we expect well-executed active management to play an important role for investors. In this regard, we ~~remain debt-free with~~have ample liquidity and resources that allow us to take advantage of attractive growth opportunities. We are investing in key capabilities, including investment professionals, distribution professionals, technologies, and new product offerings in order to provide our clients with strong investment management expertise and service.

~~MARKET TRENDS.~~On December 29, 2021, we completed our acquisition of Oak Hill Advisors, L.P., a leading alternative credit manager, and other entities that had common ownership (collectively, OHA). We acquired 100% of the equity interests of Oak Hill Advisors, L.P., 100% of the equity interests in entities that make co-investments in certain affiliated private investment funds (the "co-investment entities") and 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 (the "carried interest entities"). As of March 31, 2022, OHA had $57 billion of capital under management (which includes net assets value, portfolio value and/or unfunded capital).

~~U.S. equities generated strong returns~~

MARKET TRENDS.

Many global equity markets declined in the first quarter of ~~2021, a continuation of a remarkably robust~~2022. In fact, the U.S. stock market ~~given~~experienced its worst quarter since the pandemic began about two years ago. Stocks fell as Russia invaded Ukraine in late February, prompting the U.S. and ~~related~~many other nations, especially in Europe, to respond with broad and damaging economic ~~dislocations. Most major U.S. equity indexes hit all-time highs during the quarter, although the market was led~~sanctions targeting a number of key Russian individuals and institutions. Equities were also hurt by ~~shares of smaller companies as well as value stocks and cyclical businesses that are closely tied to the health of the economy. Technology and other growth stocks trailed.~~

~~In general, equities were lifted~~elevated inflation—exacerbated by the accelerating rollout of coronavirus vaccines, favorable economic data and corporate earnings reports, and expectations for new federal fiscal stimulus measures. Although Congress passed a $1.9 trillion coronavirus relief bill in March and the Biden administration prepared to pursue a significant increase in infrastructure spending, some investors were concerned about a sharp increase in ~~longer-term U.S. Treasury yields during~~commodity prices—as well as the ~~quarter~~onset of Federal Reserve interest rate increases and ~~possibly higher inflation later in 2021.~~expectations for the Federal Reserve to pursue an aggressive pace of monetary tightening.

Stocks in developed non-U.S. equity markets advanced but underperformed U.S. equities; a stronger U.S. dollar versus several key currencies weighed on local returns in U.S. dollar terms. European stock markets were mostly positive despite the reinstatement of lockdown measures in some countries. Most developedDeveloped Asian and Far East markets ~~posted gains; Japanese shares~~were mostly lower in U.S. dollar terms, but Australian stocks bucked the negative trend with a 7% gain, helped by local currency strength versus the U.S. dollar. In Europe, most markets declined in dollar terms, as local losses were exacerbated by a weak euro and British pound. Equities in energy producer Norway, however, rose ~~less~~more than 10%. Stocks in Portugal and the UK rose about 2%.

~~Emerging~~In emerging Asia, markets ~~stocks also advanced but underperformed developed markets, hurt~~were mixed in ~~part by rising U.S. Treasury yields and a stronger~~ U.S. dollar ~~against many currencies.~~terms, but Chinese shares skidded 14%. Emerging European markets were widely mixed, but Latin American markets ~~were mostly negative~~produced excellent returns in dollar ~~terms. Asian market returns varied widely. In emerging Europe, Turkish shares and the lira tumbled~~terms, as the ~~Turkish president unexpectedly replaced~~resource-rich region benefited from higher commodity prices. Gulf Cooperation Council markets in the ~~head of the central bank shortly after an interest rate increase in March.~~

Middle East were buoyed by higher global oil prices.

Page 1719

Returns of several major equity market indexes were as follows:

Three months ended

Index

~~3/31/2021~~

3/31/2022

S&P 500 Index

~~6.2%~~

(4.6)%

NASDAQ Composite Index(1)

~~2.8%~~

(9.1)%

Russell 2000 Index

~~12.7%~~

(7.5)%

MSCI EAFE (Europe, Australasia, and Far East) Index

~~3.6%~~

(5.8)%

MSCI Emerging Markets Index

~~2.3%~~

(6.9)%

(1) Returns exclude dividends

Global ~~bond returns were~~bonds produced mostly negative returns in U.S. dollar ~~terms. In~~terms, as the U.S., high yield securities benefited from favorable corporate earnings and expectations of a stronger economy to post gains. Higher-quality securities with greater interest rate sensitivity were hurt by a sharp increase in intermediate- and long-term U.S. Treasury yields. The Federal Reserve ~~kept~~began to raise short-term interest rates ~~near 0%, but the~~and Treasury yields—especially short- and intermediate-term yields—rose in anticipation of tighter monetary policy in response to elevated inflation. The 10-year U.S. Treasury note yield ~~increased~~rose from ~~0.93%~~1.52% to ~~1.74%~~2.32%. ~~Longer-term~~

In the taxable investment-grade universe, long-term Treasury and corporate bonds fared worst. Mortgage-backed and ~~U.S. Treasury bonds were among the worst performers. Mortgage- and asset-backed~~commercial mortgage-backed securities ~~fell to a lesser extent.~~also declined materially. Asset-backed securities held up best. Tax-free municipal bonds ~~held up relatively well, helped by~~fared slightly worse than the ~~prospect of more federal aid~~taxable bond market. High yield corporate bonds declined due to ~~shore up state and local finances.~~risk aversion.

Bonds in developed non-U.S. markets ~~declined~~produced negative returns in U.S. dollar terms, ~~hurt by rising longer-term interest rates~~as government bond yields in ~~local~~various markets rose amid concerns about inflation and ~~weaker currencies versus~~ the potential for tighter central bank monetary policies this year. A stronger U.S. ~~dollar. The British pound, however, appreciated about 1% versus the dollar.~~dollar reduced overseas bond returns in dollar terms.

Emerging markets bonds ~~also produced negative returns~~slumped as ~~longer-term interest rates generally increased and a few countries also raised short-term rates. Local~~investors shunned riskier investments, but local currency issues ~~underperformed bonds denominated~~held up better than dollar-denominated emerging markets debt. Currencies in ~~dollars as many currencies, especially the Turkish lira and the Brazilian real, weakened~~several Latin American countries appreciated strongly versus the ~~dollar.~~U.S. dollar, but many other currencies depreciated.

Returns for several major bond market indexes were as follows:

Three months ended

Index

~~3/31/2021~~

3/31/2022

Bloomberg ~~Barclays~~ U.S. Aggregate Bond Index

~~(3.4)%~~

(5.9)%

JPMorgan Global High Yield Index

~~1.2%~~

(4.5)%

Bloomberg ~~Barclays~~ Municipal Bond Index

~~(.4)%~~

(6.2)%

Bloomberg ~~Barclays~~ Global Aggregate Ex-U.S. Dollar Bond Index

~~(5.3)%~~

(6.2)%

JPMorgan Emerging Markets Bond Index Plus

~~(7.2)%~~

(16.2)%

Page 1820

ASSETS UNDER ~~MANAGEMENT.~~MANAGEMENT(1).

Assets under management ended the first quarter of ~~2021~~2022 at ~~$1,518.0~~$1,551.8 billion, ~~an increase~~a decrease of ~~$47.5~~$136.0 billion from December 31, ~~2020. This increase~~2021. The decrease in assets under management was driven by net cashoutflows of $5.3 billion and market ~~appreciation, net of~~depreciation, including distributions not reinvested, of ~~$46.3 billion and net cash inflows of $1.2~~$130.7 billion. Clients transferred ~~$5.6~~$4.1 billion in net assets from the U.S. mutual funds primarily to collective investment trusts and other investment products, of which ~~$4.9~~$3.3 billion transferred into the retirement date trusts.

The following tables detail changes in our assets under management, by vehicle and asset class, during the first quarter of ~~2021:~~2022:


		Three months ended 3/31/2021								Three months ended 3/31/2022
(in billions)	(in billions)	U.S. mutual funds		Subadvised funds and separate accounts		Collective investment trusts and other investment products		Total			(in billions)	U.S. mutual funds		Subadvised funds and separate accounts		Collective investment trusts and other investment products		Total
Assets under management at beginning of period	Assets under management at beginning of period	$	794.6	$	400.1	$	275.8	$	1,470.5		Assets under management at beginning of period	$	871.4	$	437.1	$	379.3	$	1,687.8

Net cash flows before client transfers	Net cash flows before client transfers	2.0		(8.2)		7.4		1.2			Net cash flows before client transfers	(5.7)		(4.5)		4.9		(5.3)
Client transfers	Client transfers	(5.6)		—		5.6		—			Client transfers	(4.1)		—		4.1		—
Net cash flows after client transfers	Net cash flows after client transfers	(3.6)		(8.2)		13.0		1.2			Net cash flows after client transfers	(9.8)		(4.5)		9.0		(5.3)
Net market appreciation and gains		25.5		11.9		9.0		46.4
Net market depreciation and losses											Net market depreciation and losses	(71.8)		(34.6)		(23.9)		(130.3)
Net distributions not reinvested	Net distributions not reinvested	(.1)		—		—		(.1)			Net distributions not reinvested	(.4)		—		—		(.4)

Change during the period	Change during the period	21.8		3.7		22.0		47.5			Change during the period	(82.0)		(39.1)		(14.9)		(136.0)

Assets under management at March 31, 2021		$	816.4	$	403.8	$	297.8	$	1,518.0
Assets under management at March 31, 2022											Assets under management at March 31, 2022	$	789.4	$	398.0	$	364.4	$	1,551.8

Three months ended 3/31/2021
(in billions) Equity Fixed income, including money market
Multi-asset(1)
Total
Assets under management at beginning of period $ 895.8 $ 168.7 $ 406.0 $ 1,470.5
Net cash flows (8.9) 5.4 4.7 1.2
Net market appreciation and gains(2)
30.3 (1.3) 17.3 46.3
Change during the period 21.4 4.1 22.0 47.5
Assets under management at March 31, 2021 $ 917.2 $ 172.8 $ 428.0 $ 1,518.0


	Three months ended 3/31/2022
(in billions)	Equity		Fixed income, including money market		Multi-asset(2)		Alternatives(3)		Total
Assets under management at beginning of period	$	992.7	$	175.7	$	477.7	$	41.7	$	1,687.8

Net cash flows	(18.1)		5.3		6.7		.8		(5.3)
Net market depreciation and losses(4)	(96.6)		(5.8)		(28.0)		(.3)		(130.7)


Change during the period	(114.7)		(.5)		(21.3)		.5		(136.0)
Assets under management at March 31, 2022	$	878.0	$	175.2	$	456.4	$	42.2	$	1,551.8

(1) Includes fee basis assets under management.

(2)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.

~~(2)~~(3) The alternatives asset class includes strategies authorized to invest more than 50% of its holdings in private credit, leveraged loans, mezzanine, real assets/CRE, structured products, stressed / distressed, non-investment grade CLOs, special situations, or have absolute return as its investment objective. Generally, only those strategies with longer than daily liquidity are included.

(4)Includes distributions reinvested and not reinvested.

Investment advisory clients outside the United States account for ~~about 8.8%~~9.7% of our assets under management at March 31, ~~2021~~2022 and ~~9.3%~~9.9% at December 31, ~~2020.~~2021.

Page 21

Our target date retirement products, which are included in the multi-asset totals shown above, continue to be a significant part of our assets under management. Assets under management in these portfolios, as well as net cash inflows (outflows), by vehicle, were as follows:


																Net cash inflows (outflows)
		Assets under management				Net cash inflows (outflows) for three months ended					Assets under management				Three months ended
(in billions)	(in billions)	3/31/2021		12/31/2020		3/31/2021		3/31/2020		(in billions)	3/31/2022		12/31/2021			3/31/2022		3/31/2021
U.S. mutual funds	U.S. mutual funds	$	179.9	$	176.1	$	(3.8)	$	(5.0)	U.S. mutual funds	$	174.4	$	187.1		$	(1.6)	$	(3.8)
Collective investment trusts	Collective investment trusts	160.3		145.4		8.1		5.6		Collective investment trusts	188.6		191.1			8.8		8.1
Separately managed accounts		11.4		10.7		.2		.1
Subadvised and separately managed accounts										Subadvised and separately managed accounts	12.2		12.9			.1		.2
		$	351.6	$	332.2	$	4.5	$	.7		$	375.2	$	391.1		$	7.3	$	4.5

We also provide strategic investment advice solutions for certain portfolios. These advice solutions, which the vast majority is overseen by our multi-asset division, may include strategic asset allocation, and in certain portfolios, asset selection and/or tactical asset allocation overlays. We also offer advice solutions through retail separately managed accounts and separately managed accounts model delivery. As of March 31, 2022, total assets in these solutions were $466 billion, of which $459 billion are included in our reported assets under management in the tables above.

We provide participant accounting and plan administration for defined contribution retirement plans that invest in the firm's U.S. mutual funds, collective investment trusts and funds outside of the firm's complex. As of March 31, ~~2021,~~2022, our assets under administration were ~~$248~~$256 billion, of which nearly $153 billion are assets we manage. In recent years, we began offering non-discretionary advisory services through model delivery, which are managed accounts where portfolio holdings and trades in the portfolio are provided to sponsor platforms to implement for their clients.

~~Page 19~~

~~We record the revenue earned on these services in administrative fees. The assets under advisement in these portfolios, predominantly in the United States, is $3 billion at March 31, 2021.~~

INVESTMENT ~~PERFORMANCE.~~PERFORMANCE(1).

Strong investment performance and brand awareness is a key driver to attracting and retaining assets—and to our long-term success. 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 ~~table presents~~tables present investment performance for the one-, three-, five-, and 10-years ended March 31, ~~2021.~~2022. Past performance is no guarantee of future results.


% of U.S. mutual funds that outperformed Morningstar median(1),(2)
% of U.S. mutual funds that outperformed Morningstar median(2),(3)						% of U.S. mutual funds that outperformed Morningstar median(2),(3)
		1 year	3 years	5 years	10 years		1 year	3 years	5 years	10 years
Equity	Equity	65%	68%	67%	87%	Equity	41%	60%	64%	85%
Fixed Income	Fixed Income	71%	60%	55%	57%	Fixed Income	63%	71%	62%	63%
Multi-Asset	Multi-Asset	94%	94%	91%	90%	Multi-Asset	37%	81%	79%	90%

All Funds	All Funds	75%	73%	70%	78%	All Funds	47%	69%	68%	79%

% of U.S. mutual funds that outperformed passive peer median(1),(3)
% of U.S. mutual funds that outperformed passive peer median(2),(4)						% of U.S. mutual funds that outperformed passive peer median(2),(4)
		1 year	3 years	5 years	10 years		1 year	3 years	5 years	10 years
Equity	Equity	57%	58%	62%	72%	Equity	38%	52%	55%	67%
Fixed Income	Fixed Income	91%	59%	57%	60%	Fixed Income	53%	69%	55%	50%
Multi-Asset	Multi-Asset	94%	91%	87%	86%	Multi-Asset	31%	76%	68%	69%

All Funds	All Funds	78%	68%	68%	72%	All Funds	40%	64%	59%	63%
											% of composites that outperformed benchmarks~~(4)~~(5)
		1 year	3 years	5 years	10 years		1 year	3 years	5 years	10 years
Equity	Equity	55%	60%	73%	78%	Equity	34%	49%	59%	72%
Fixed Income	Fixed Income	87%	69%	80%	72%	Fixed Income	58%	73%	77%	79%

All Composites	All Composites	68%	63%	76%	76%	All Composites	44%	59%	66%	74%

AUM Weighted Performance
% of U.S. mutual funds AUM that outperformed Morningstar median(1),(2)
1 year 3 years 5 years 10 years
Equity 63% 65% 83% 94%
Fixed Income 79% 58% 59% 60%
Multi-Asset 100% 96% 96% 96%
All Funds 73% 72% 84% 92%
% of U.S. mutual funds AUM that outperformed passive peer median(1),(3)
1 year 3 years 5 years 10 years
Equity 51% 53% 81% 81%
Fixed Income 97% 52% 56% 64%
Multi-Asset 98% 96% 96% 96%
All Funds 66% 63% 83% 84%
% of composites AUM that outperformed benchmarks(4)
1 year 3 years 5 years 10 years
Equity 51% 65% 72% 79%
Fixed Income 88% 54% 73% 72%
All Composites 57% 64% 73% 79%

Page 2022


AUM Weighted Performance
% of U.S. mutual funds AUM that outperformed Morningstar median(2),(3)
	1 year	3 years	5 years	10 years
Equity	46%	47%	76%	92%
Fixed Income	75%	81%	68%	80%
Multi-Asset	37%	95%	96%	97%

All Funds	46%	63%	81%	92%

% of U.S. mutual funds AUM that outperformed passive peer median(2),(4)
	1 year	3 years	5 years	10 years
Equity	43%	46%	57%	59%
Fixed Income	69%	71%	63%	48%
Multi-Asset	27%	96%	95%	92%

All Funds	40%	61%	67%	67%

% of composites AUM that outperformed benchmarks(5)
	1 year	3 years	5 years	10 years
Equity	38%	38%	61%	76%
Fixed Income	63%	80%	75%	74%


All Composites	42%	45%	63%	76%

As of March 31, ~~2021, 80~~2022, 69 of ~~123 (65.0%~~124 (55.6%) of the firm's rated U.S. mutual funds (across primary share classes) received an overall rating of 4 or 5 stars. By comparison, 32.5% of Morningstar's fund population is given a ~~rate~~rating of 4 or 5 stars(5). In addition, ~~88%~~67%(5) of AUM in the firm's rated U.S. mutual funds (across primary share classes) ended March 31, ~~2021~~2022 with an overall rating of 4 or 5 stars.

(1) The investment performance reflects that of T. Rowe Price sponsored mutual funds and composites AUM and not of OHA’s products.

(2) Source: © ~~2021~~2022 Morningstar, Inc. All rights reserved. The information contained herein: 1) is proprietary to Morningstar and/or its content providers; 2) may not be copied or distributed; and 3) is not warranted to be accurate, complete, or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.

~~(2)~~(3) Source: Morningstar. Primary share class only. Excludes money market mutual funds, funds with an operating history of less than one year, T. Rowe Price passive funds, and T. Rowe Price funds that are clones of other funds. The top chart reflects the percentage of T. Rowe Price funds with 1 year, 3 year, 5 year, and 10 year track record that are outperforming the Morningstar category median. The bottom chart reflects the percentage of T. Rowe Price funds AUM that has outperformed for the time periods indicated. Total AUM included for this analysis includes ~~$503B~~$394B for 1 year, ~~$503B~~$393B for 3 years, ~~$503B~~$393B for 5 years, and ~~$493B~~$386B for 10 years.

~~(3)~~(4) Passive Peer Median was created by T. Rowe Price using data from Morningstar. Primary share class only. Excludes money market mutual funds, funds with an operating history of less than one year, funds with fewer than three peers, T. Rowe Price passive funds, and T. Rowe Price funds that are clones of other funds. This analysis compares T. Rowe Price active funds to the applicable universe of passive/index open-end funds and ETFs of peer firms. The top chart reflects the percentage of T. Rowe Price funds with 1 year, 3 year, 5 year, and 10 year track record that are outperforming the passive peer universe. The bottom chart reflects the percentage of T. Rowe Price funds AUM that has outperformed for the time periods indicated. Total AUM included for this analysis includes ~~$491B~~$372B for 1 year, ~~$482B~~$370B for 3 years, ~~$439B~~$368B for 5 years, and ~~$416B~~$353B for 10 years.

~~(4)~~(5)Composite net returns are calculated using the highest applicable separate account fee schedule. Excludes money market composites. All composites compared to official GIPS composite primary benchmark. The top chart reflects the percentage of T. Rowe Price composites with 1 year, 3 year, 5 year, and 10 year track record that are outperforming their benchmarks. The bottom chart reflects the percentage of T. Rowe Price composite AUM that has outperformed for the time periods indicated. Total AUM included for this analysis includes $1,392B for 1 year, ~~$1,388B~~$1,390B for 3 years, ~~$1,364B~~$1,376B for 5 years, and ~~$1,316B~~$1,337B for 10 years.

~~(5)~~(6) The Morningstar Rating™ for funds is calculated for funds with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. Morningstar gives its best ratings of 5 or 4 stars to the top 32.5% of all funds (of the 32.5%,10% get 5 stars and 22.5% get 4 stars). The Overall Morningstar Rating™ is derived from a weighted average of the performance figures associated with a fund’s 3, 5, and 10 year (if applicable) Morningstar Rating™ metrics.

RESULTS OF OPERATIONS.

The following table and discussion sets forth information regarding our consolidated financial results for the three months ended March 31, ~~2021~~2022 and ~~2020~~2021 on a U.S. GAAP basis as well as a non-GAAP basis. The first quarter of 2022 reflects the operating results of OHA which was acquired at the end of 2021. The non-GAAP basis adjusts for the impact of our consolidated T. Rowe Price investment products, the impact of market movements on the supplemental savings plan liability and related economic hedges, investment income related to certain other investments, and certain nonrecurring charges and gains, ~~if any.~~including acquisition-related amortization and costs.

Three months ended Q1 2021 vs. Q1 2020
(in millions, except per-share data) 3/31/2021 3/31/2020 $ change % change
U.S. GAAP basis
Investment advisory fees $ 1,687.8 $ 1,327.8 $ 360.0 27.1 %
Net revenues $ 1,826.8 $ 1,462.6 $ 364.2 24.9 %
Operating expenses $ 933.6 $ 755.4 $ 178.2 23.6 %
Net operating income $ 893.2 $ 707.2 $ 186.0 26.3 %
Non-operating income (loss)(1)
$ 102.1 $ (500.3) $ 602.4 n/m
Net income attributable to T. Rowe Price Group $ 749.4 $ 343.1 $ 406.3 118.4 %
Diluted earnings per common share $ 3.17 $ 1.41 $ 1.76 124.8 %
Weighted average common shares outstanding assuming dilution 230.0 236.8 (6.8) (2.9) %
Adjusted non-GAAP basis(2)
Operating expenses $ 909.2 $ 817.9 $ 91.3 11.2 %
Net operating income $ 918.9 $ 647.2 $ 271.7 42.0 %
Non-operating income (loss)(1)
$ 13.7 $ (61.2) $ 74.9 n/m
Net income attributable to T. Rowe Price Group $ 712.0 $ 454.3 $ 257.7 56.7 %
Diluted earnings per common share $ 3.01 $ 1.87 $ 1.14 61.0 %
Assets under management (in billions)
Average assets under management $ 1,508.8 $ 1,162.7 $ 346.1 29.8 %
Ending assets under management $ 1,518.0 $ 1,008.8 $ 509.2 50.5 %

Page 23


	Three months ended				Q1 2022 vs. Q1 2021
(in millions, except per-share data)	3/31/2022		3/31/2021		$ change		% change
U.S. GAAP basis
Investment advisory fees	$	1,662.1	$	1,687.8	$	(25.7)	(1.5)	%
Net revenues	$	1,863.0	$	1,826.8	$	36.2	2.0	%
Operating expenses	$	985.6	$	933.6	$	52.0	5.6	%
Net operating income	$	877.4	$	893.2	$	(15.8)	(1.8)	%
Non-operating income (loss)(1)	$	(198.5)	$	102.1	$	(300.6)	n/m
Net income attributable to T. Rowe Price	$	567.9	$	749.4	$	(181.5)	(24.2)	%
Diluted earnings per common share	$	2.41	$	3.17	$	(.76)	(24.0)	%
Weighted average common shares outstanding assuming dilution	229.8		230.0		$	(.2)	(.1)	%

Adjusted non-GAAP basis(2)
Operating expenses	$	1,039.1	$	909.2	$	129.9	14.3	%
Net operating income	$	838.0	$	918.9	$	(80.9)	(8.8)	%
Non-operating income (loss)(1)	$	(23.8)	$	13.7	$	(37.5)	n/m
Net income attributable to T. Rowe Price	$	616.9	$	712.0	$	(95.1)	(13.4)	%
Diluted earnings per common share	$	2.62	$	3.01	$	(.39)	(13.0)	%

Assets under management (in billions)
Average assets under management	$	1,559.9	$	1,508.8	$	51.1	3.4	%
Ending assets under management	$	1,551.8	$	1,518.0	$	33.8	2.2	%

(1) The percentage change in non-operating income (loss) is not meaningful (n/m).

(2) See the reconciliation to the comparable U.S. GAAP measures at the end of the Results of Operations section of this Management’s Discussion and Analysis.

Results Overview - Quarter ended March 31, ~~2021~~2022

~~Investment~~Net revenues.Total net revenues consist of investment advisory revenues; administrative, distribution, and servicing fees, and capital allocation-based income. Total net revenues were $1,863.0 million in the first quarter of 2022 compared with $1,826.8 million in the first quarter of 2021. Approximately 90% of our total net revenues are earned from investment advisory revenues.

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. As our average assets under management increase or decrease in a given period, the level of our investment advisory fee

~~Page 21~~

revenue for that same period generally fluctuates in a similar manner. Our annualized effective fee rates can be impacted by market or cash flow related shifts among asset and share classes, price changes in existing products, and asset level changes in products with tiered-fee structures.

Operating expenses. Operating expenses on a GAAP basis were $985.6 million in the first quarter of 2022 compared with $933.6 million in the first quarter of 2021. On a non-GAAP basis, operating expenses were $1,039.1 million, a 14.3% increase over the comparable 2021 period.

About half of the increase in our non-GAAP operating expenses from the first quarter of 2021 is due to the inclusion of OHA’s operating expenses in the first quarter of 2022 following the acquisition at the end of 2021. OHA's operating expenses primarily impact compensation expense; technology, occupancy, and facility costs; and general, administrative and other costs. The remaining increase is primarily attributable to higher costs for technology development and core operations provided by FIS since August 2021 for the firm's full-service recordkeeping offering and higher costs related to the ongoing investment in the firm's technology capabilities. The costs incurred from the FIS arrangement were partially offset by a reduction in compensation expenses as a result of the approximately 800 associates who transitioned to FIS in August 2021.

Our non-GAAP operating expenses exclude the impact of the supplemental savings plan, consolidated sponsored products, the remeasurement of the contingent consideration liability, amortization of certain acquisition-related assets, and other acquisition-related costs. See our non-GAAP reconciliations later in this Management’s Discussion and Analysis section.

Page 24

We updated our forecasted 2022 non-GAAP operating expenses, including a full-year of OHA’s operating expenses, from a range of 12% to 16% to a range of 10% to 14% to reflect lower market-related expenses and a slower pace of net hiring experienced in the quarter. We could elect to further adjust our expense growth should unforeseen circumstances arise, including significant market movements.

Operating margin. Our operating margin in the first quarter of 2022 was 47.1%, compared to 48.9% earned in the 2021 quarter. The decrease in our operating margin for the first quarter of 2022 compared to the 2021 period was primarily driven by expense growth outpacing the increase in net revenues in the first quarter of 2022.

Diluted earnings per share. Our 2022 diluted earnings per share reflects the net income of OHA that was acquired at the end of 2021.

Diluted earnings per share was $2.41 for the first quarter of 2022 as compared to $3.17 for the first quarter of 2021. The 24.0% decrease was primarily driven by lower operating income and net investment losses recognized in the first quarter of 2022 as compared to net investment gains in the first quarter of 2021, as the strong market returns in 2021 outpaced the market performance in the first quarter of 2022.

On a non-GAAP basis, diluted earnings per share was $2.62 for the first quarter of 2022 as compared to $3.01 for the first quarter of 2021. Similar to our GAAP diluted earnings, the decrease is largely attributable to lower operating income compared to 2021 period and net investment losses on our seed and discretionary portfolio recognized in the first quarter of 2022 as compared to net investment gains in the first quarter of 2021.

Net revenues


	Three months ended				Q1 2022 vs. Q1 2021
(in millions)	3/31/2022		3/31/2021		$ change		% change
Investment advisory fees
U.S. mutual funds	$	976.5	$	1,050.2	$	(73.7)	(7.0)	%
Subadvised funds, separate accounts, collective investment trusts, and other investment products	685.6		637.6		48.0		7.5	%
	1,662.1		1,687.8		(25.7)		(1.5)	%
Administrative, distribution, and servicing fees
Administrative fees	130.2		109.9		20.3		18.5	%
Distribution and servicing fees	26.3		29.1		(2.8)		(9.6)	%
	156.5		139.0		17.5		12.6	%
Capital allocation-based income(1)	44.4		—		44.4		n/m
Net revenues	$	1,863.0	$	1,826.8	$	36.2	2.0	%

(1) The percentage change for capital allocation-based income is not meaningful (n/m).

Investment advisory fees.

Investment advisory revenues earned in the first quarter of ~~2021 increased~~2022 decreased over the comparable ~~2020~~2021 quarter asdespite an increase in average assets under our management ~~increased $346.1~~of $51.1 billion, or ~~29.8%~~3.4%, to ~~$1,508.8~~$1,559.9 billion. In the first quarter of ~~2021,~~2022, we voluntarily waived ~~$15.0~~$9.2 million, or less than 1%, of our investment advisory fees in order to continue to maintain a positive yield for investors. At March 31, ~~2021,~~2022, combined net assets of the investment portfolios in which we waived fees in the first quarter of ~~2021~~2022 were ~~$29.5~~$22.8 billion. We ~~expect to continue to waive fees for all of 2021 and~~ anticipate that the waivers will decline in ~~each~~the second quarter of 2022 and are expected to cease by the end of the ~~next three quarters~~second quarter of ~~2021 will be at similar levels.~~2022.

The total average annualized effective fee rate earned during the first quarter of ~~2021~~2022 was ~~45.4~~43.2 basis points, compared with ~~45.9~~45.4 basis points earned during the first quarter of ~~2020~~2021 and ~~45.7~~43.4 basis points earned during the fourth quarter of ~~2020.~~2021. In comparison to the first quarter of ~~2020,~~2021, our annualized effective fee rate declined primarily due to ~~client transfers within~~ the ~~complex~~July 2021 fee reductions in our target-date products and an asset mix shift to lower fee vehicles ~~or share~~and asset classes within the complex over the last twelve ~~months and the money market~~months. These fee ~~waivers. In comparison to the fourth quarter of 2020, our average annualized effective fee rate declined primarily due to lower performance fees earned in 2021.~~

~~Operating expenses.~~ ~~Operating expenses~~pressures were $933.6 million in the first quarter of 2021 compared with $755.4 million in the first quarter of 2020. Nearly half of the increase in operating expenses for the first quarter of 2021 compared to the first quarter of 2020 was due to an $85.9 million increase in expense related to the supplemental savings plan from higher market returns. The remaining increase was due primarily to higher compensation expenses as well as distribution and servicing costs. For the first quarter of 2021, the higher expense related to the supplemental savings plan was almost entirely offset by the non-operating gains earned on the investments used to economically hedge the related liability.

On a non-GAAP basis, our operating expenses in the first quarter of 2021 increased 11.2% to $909.2 million compared to the first quarter of 2020. Our non-GAAP operating expenses do not include the impact of our supplemental savings plan and consolidated sponsored investment products. See our non-GAAP reconciliations later in this Management’s Discussion and Analysis section.

In 2021 and beyond, we expect to advance our strategic priorities to maintain our position as a global and diversified asset manager, a global partner for retirement investors and a provider of integrated investment solutions; to embed environmental, social and governance principles across the firm; to maintain effective processes and controls while becoming a more adaptive and agile firm; and to become a destination of choice for top talent with a diverse workforce and inclusive culture. We updated our 2021 non-GAAP operating expense growth guidance from a range of 8% - 12% to a range of 10% - 14% to reflect an increase in our expectations for AUM-related expenses. We can elect to adjust our expense growth in the future should unforeseen circumstances arise, including significant market movements.

~~Operating margin.~~ Our operating margin in the first quarter of 2021 was 48.9%, compared to 48.4% earned in the 2020 quarter. The increase in our operating margin for the first quarter of 2021 compared to the 2020 period was primarily driven by higher investment advisory fee revenue, partially offset by the higher ~~expense related to our supplemental savings plan, as market returns in the first quarter of 2021 outperformed the same period in 2020.~~

~~Diluted earnings per share.~~ Diluted earnings per share was $3.17 for the first quarter of 2021 as compared to $1.41 for the first quarter of 2020. The 124.8% increase was primarily driven by the net investment gains recognized in the first quarter of 2021 as compared to significant investment losses recognized in the first quarter of 2020 following sharp market declines at the end of March 2020.

On a non-GAAP basis, diluted earnings per share was $3.01 for the first quarter of 2021 as compared to $1.87 for the first quarter of 2020. The increase in diluted earnings per share was primarily due to higher operating income as well as net gainsthan average fee rate earned on our ~~cash and discretionary investments in the 2021 quarter compared with investment losses in the 2020 period.~~

~~Page 22~~

~~Net revenues~~

Three months ended Q1 2021 vs. Q1 2020
(in millions) 3/31/2021 3/31/2020 $ change % change
Investment advisory fees
U.S. mutual funds $ 1,050.2 $ 876.2 $ 174.0 19.9 %
Subadvised funds, separate accounts, collective investment trusts, and other investment products 637.6 451.6 186.0 41.2 %
1,687.8 1,327.8 360.0 27.1 %
Administrative, distribution, and servicing fees
Administrative fees 109.9 106.9 3.0 2.8 %
Distribution and servicing fees 29.1 27.9 1.2 4.3 %
139.0 134.8 4.2 3.1 %
Net revenues $ 1,826.8 $ 1,462.6 $ 364.2 24.9 %

~~Investment advisory fees.~~alternative asset class.

U.S. mutual funds

Investment advisory revenues earned in the first quarter of ~~2021~~2022 from our U.S. mutual funds were ~~$1,050.2~~$976.5 million, ~~an increase~~a decrease of ~~19.9%~~7.0% from the comparable ~~2020~~2021 quarter. Average assets under management in these funds for the first ~~quarter of 2021 increased 24.5% from the 2020 quarter to $814.5 billion.~~

~~For~~Page 25

quarter of 2022 decreased 2.0% from the 2021 quarter to $798.0 billion. The annualized effective fee rate of 49.6 basis points for the first quarter of 2022 decreased from 52.3 basis points in the first quarter of 2021 primarily due to the ~~relationship between U.S. mutual funds’ average assets under management~~July 2021 fee reductions in our target-date products and ~~investment advisory~~an asset mix shift to lower fee ~~growth was impacted primarily by~~vehicles and asset classes within the ~~money market fee waivers. In addition, strong market returns led to a decrease in~~complex over the ~~fee earned as the asset levels of certain tiered-fee funds crossed a new tier.~~last twelve months.

Subadvised funds, separate accounts, collective investment trusts and other investment products (other portfolios)

Investment advisory revenues earned in the first quarter of ~~2021~~2022 from these other portfolios were ~~$637.6~~$685.6 million, an increase of ~~41.2%~~7.5% from the comparable ~~2020~~2021 quarter. Average assets under management for these products increased ~~36.6%~~9.7% from the ~~2020~~2021 quarter to ~~$694.3~~$761.9 billion.

For the other portfolios, inflows into our international products, which have a higher fee rate relative to other products, and performance-based fees earned on certain separate accounts drove investment advisory revenues to outpace A portion of the increase in these advisory revenues and related average assets under ~~management.~~

~~These investment advisory revenues include distribution-related services we provide~~management is due to the ~~international~~acquisition of OHA at the end of 2021. The annualized effective fee rate of 36.5 basis points for the first quarter of 2022 decreased from 37.2 basis points in the first quarter of 2021. The decrease is primarily due to the July 2021 fee reductions in our target-date products and ~~then contract with third-party intermediaries~~an asset mix shift to ~~distribute these products. The costs we incur to pay~~lower fee vehicles and asset classes within the ~~third-party intermediaries are recorded as part of distribution and servicing expenses.~~complex over the last twelve months. These fee pressures were partially offset by the higher than average fee rate earned on our alternative asset class.

Administrative, distribution, and servicing fees. Administrative, distribution, and servicing fees in the first quarter of ~~2021~~2022 were ~~$139.0~~$156.5 million, an increase of ~~$4.2~~$17.5 million, or ~~3.1%~~12.6%, from the comparable ~~2020~~2021 quarter. The increase was primarily due to higher transfer agent servicing activities provided to the ~~U.S.~~T. Rowe Price mutual funds, higher model delivery revenue, ~~as well as~~and higher trustee services revenue. These increases were partially offset by lower 12b-1 revenue earned on the Advisor and R share ~~class~~classes of the U.S. mutual funds as a result of ~~increased~~lower assets under management in ~~this~~these share ~~class.~~classes. The ~~increase~~decrease in 12b-1 revenue is offset entirely by ~~an increase~~a decrease in the costs paid to third-party intermediaries that source these assets and are reported in distribution and servicing expense.

Capital allocation-based income. Capital allocation-based income in the first quarter of 2022 was $44.4 million. This represents $57.6 million of the carried interest we earn from investments in affiliated private investment funds, partially offset by $13.2 million in non-cash amortization associated with the difference in the closing date fair value and carrying value of investments acquired as part of the OHA acquisition.

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

T. Rowe Price investment products. The corresponding expenses recognized by these products, and consolidated in our financial statements, were also eliminated from operating expenses. For the first quarter, we eliminated net revenue of $.9 million in 2022 and $1.3 million in ~~2021 and $2.5 million in 2020.~~2021.

Operating expenses

~~Page 23~~

~~Operating expenses~~


		Three months ended				Q1 2021 vs. Q1 2020				Three months ended		Q1 2022 vs. Q1 2021
(in millions)	(in millions)	3/31/2021		3/31/2020		$ change		% change			(in millions)	3/31/2022		3/31/2021		$ change		% change
Compensation and related costs, excluding supplemental savings plan	Compensation and related costs, excluding supplemental savings plan	$	561.3	$	504.4	$	56.9	11.3	%		Compensation and related costs, excluding supplemental savings plan	$	632.6	$	561.3	$	71.3	12.7	%
Supplemental savings plan(1)	Supplemental savings plan(1)	22.2		(63.7)		85.9		n/m			Supplemental savings plan(1)	(51.0)		22.2		(73.2)		n/m
Total compensation and related costs	Total compensation and related costs	583.5		440.7		142.8		32.4	%		Total compensation and related costs	581.6		583.5		(1.9)		(.3)	%
Distribution and servicing	Distribution and servicing	85.6		65.7		19.9		30.3	%		Distribution and servicing	85.9		85.6		.3		.4	%
Advertising and promotion	Advertising and promotion	18.9		24.9		(6.0)		(24.1)	%		Advertising and promotion	23.4		18.9		4.5		23.8	%
Product-related costs		41.0		41.6		(.6)		(1.4)	%
Product and recordkeeping related costs											Product and recordkeeping related costs	80.4		41.0		39.4		96.1	%
Technology, occupancy, and facility costs	Technology, occupancy, and facility costs	117.3		105.4		11.9		11.3	%		Technology, occupancy, and facility costs	133.9		117.3		16.6		14.2	%
General, administrative, and other	General, administrative, and other	87.3		77.1		10.2		13.2	%		General, administrative, and other	80.4		87.3		(6.9)		(7.9)	%

Total operating expenses	Total operating expenses	$	933.6	$	755.4	$	178.2	23.6	%		Total operating expenses	$	985.6	$	933.6	$	52.0	5.6	%

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

Compensation and related costs, excluding supplemental savings plan. Compensation and related costs, excluding supplemental savings plan, were ~~$561.3~~$632.6 million in the first quarter of ~~2021,~~2022, an increase of ~~$56.9~~$71.3 million, or ~~11.3%~~12.7%, compared to the ~~2020~~2021 quarter. The ~~increase from the 2020 quarter was primarily due to strong operating results in the~~ first quarter of 2021 that led to a $36.3 million increase in our interim accrual for annual variable compensation, primarily bonus compensation. Also contributing to the increase in 2021 costs compared to the first quarter of 2020 was a $22.6 million increase in salaries and benefits due to a 3.4% increase in our average staff size and modest increases in base salaries at the beginning of the year. These increases in2022 includes OHA’s compensation and related costs, ~~were offset~~carried interest-related compensation, and $13.7 million in ~~part by higher labor capitalization related to internally developed software.~~non-cash amortization of certain acquisition-related retention arrangements. The firm employed 7,573 associates at March 31, 2022, an increase of .6% from the end of 2021.

Distribution and servicing. Distribution and servicing costs were ~~$85.6~~$85.9 million for the first quarter of ~~2021,~~2022, an increase of ~~30.3%~~.4% from the ~~$65.7~~$85.6 million recognized in the ~~2020~~2021 quarter. The slight increase iswas primarily driven by

Page 26

higher costs incurred to distribute certain products through U.S. financial intermediaries, as assets under management in these products have increased from prior year, and by higher AUM-based distribution costs ~~as a result of continued inflows and market appreciation~~ in our international products, including our Japanese Investment Trusts (ITMs), and ~~SICAVs.~~certain SICAV share classes. These increases were partially offset by lower 12b-1 fees due to lower average assets under management in the U.S. mutual funds.

~~Distribution and servicing costs~~The amounts paid to third-party intermediaries that source the assets of ~~certain~~the Advisor and R share classes of our U.S. mutual funds and our international products, such as our Japanese ITMs and SICAVs, are recognized in ~~this expense.~~the distribution and servicing expense category. Both of these costs are offset entirely by the revenue we earn and report in net revenues: 12b-1 revenue recognized in administrative, distribution, and servicing fees for the U.S. mutual funds and investment advisory fee revenue for our international products.

Advertising and promotion. Advertising and promotion costs were ~~$18.9~~$23.4 million in the first quarter of ~~2021, a decrease~~2022, an increase of ~~$6.0~~$4.5 million, or ~~24.1%~~23.8%, compared to the ~~$24.9~~$18.9 million recognized in the ~~2020~~2021 quarter. The ~~decrease is~~increase was driven primarily by ~~the timing of media-related~~increased media spend as well as ~~fewer conference~~advertising development costs during the quarter, along with lower spending in 2021 due to the impact of the coronavirus pandemic.

Product and ~~promotional events since the later part of~~recordkeeping related costs. Product and recordkeeping costs were $80.4 million in the first quarter of ~~2020 due~~2022, an increase of $39.4 million, or 96%, compared to the ~~coronavirus pandemic.~~$41.0 million in the 2021 quarter. Approximately 80% of the increase in the first quarter of 2022 was driven by the recordkeeping costs incurred as part of our expanded FIS relationship that began in August 2021.

Technology, occupancy, and facility costs. Technology, occupancy, and facility costs were ~~$117.3~~$133.9 million in the first quarter of ~~2021,~~2022, an increase of ~~$11.9~~$16.6 million, or ~~11.3%~~14.2%, compared to the ~~$105.4~~$117.3 million recognized in the ~~2020~~2021 quarter. The increase is due primarily to the ongoing investment in our technology capabilities, including hosted solution licenses, ~~and~~ depreciation and ~~higher~~ office ~~lease~~facility costs.

General, administrative, and other. General, administrative, and other expenses were ~~$87.3~~$80.4 million in the first quarter of ~~2021,~~2022, a decrease of ~~$10.2~~$6.9 million, or ~~13.2%~~7.9%, compared to the ~~$77.1~~$87.3 million recognized in the ~~2020~~2021 quarter. The ~~timing~~decrease was primarily related to the favorable impact of ~~when certain general~~the change in fair value of the contingent consideration liability of $45.5 million, partially offset by $27.1 million in acquisition-related amortization and other acquisition-related costs. Higher information services, external research, travel and other nonrecurring administrative costs ~~were incurred~~further offset the decrease in general, administrative and other expenses in the first quarter of ~~2021~~2022 compared to ~~the 2020 period contributed to the higher costs. Lower travel-related expenses nearly offset increases in other general and administrative costs.~~2021.

Page 27

Non-operating income (loss)

Non-operating ~~income~~loss for the first quarter of ~~2021~~2022 was ~~$102.1~~$198.5 million ~~an increase~~as compared to non-operating income of ~~$602.4 million from non-operating loss of $500.3~~$102.1 million in the ~~2020~~2021 quarter. The following table details the components of non-operating income (loss) for both the first quarter ofended March 31, ~~2021~~2022 and ~~2020.~~2021.

~~Page 24~~


		Three months ended				Three months ended
(in millions)	(in millions)	3/31/2021		3/31/2020			(in millions)	3/31/2022		3/31/2021
Net gains (losses) from non-consolidated T. Rowe Price investment products	Net gains (losses) from non-consolidated T. Rowe Price investment products						Net gains (losses) from non-consolidated T. Rowe Price investment products
Cash and discretionary investments	Cash and discretionary investments						Cash and discretionary investments
Dividend income	Dividend income	$	5.1	$	10.4		Dividend income	$	.8	$	5.1
Market related gains (losses) and equity in earnings (losses)	Market related gains (losses) and equity in earnings (losses)	8.6		(71.6)			Market related gains (losses) and equity in earnings (losses)	(24.6)		8.6
Total cash and discretionary investments	Total cash and discretionary investments	13.7		(61.2)			Total cash and discretionary investments	(23.8)		13.7
Seed capital investments	Seed capital investments						Seed capital investments
Dividend income	Dividend income	.1		.7			Dividend income	.2		.1
Market related gains (losses) and equity in earnings (losses)	Market related gains (losses) and equity in earnings (losses)	11.9		(34.1)			Market related gains (losses) and equity in earnings (losses)	(22.8)		11.9
Net gain recognized upon deconsolidation		2.6		.1
Net gains recognized upon deconsolidation							Net gains recognized upon deconsolidation	1.6		2.6
Investments used to hedge the supplemental savings plan liability	Investments used to hedge the supplemental savings plan liability	22.1		(68.5)			Investments used to hedge the supplemental savings plan liability	(55.3)		22.1
Total net gains (losses) from non-consolidated T. Rowe Price investment products	Total net gains (losses) from non-consolidated T. Rowe Price investment products	50.4		(163.0)			Total net gains (losses) from non-consolidated T. Rowe Price investment products	(100.1)		50.4
Other investment income	Other investment income	18.2		8.4			Other investment income	10.2		18.2
Net gains (losses) on investments	Net gains (losses) on investments	68.6		(154.6)			Net gains (losses) on investments	(89.9)		68.6
Net gains (losses) on consolidated sponsored investment portfolios	Net gains (losses) on consolidated sponsored investment portfolios	37.2		(330.3)			Net gains (losses) on consolidated sponsored investment portfolios	(101.4)		37.2
Other income (loss), including foreign currency gains and losses	Other income (loss), including foreign currency gains and losses	(3.7)		(15.4)			Other income (loss), including foreign currency gains and losses	(7.2)		(3.7)
Non-operating income (loss)	Non-operating income (loss)	$	102.1	$	(500.3)		Non-operating income (loss)	$	(198.5)	$	102.1

The ~~impact of strong market returns on our~~significant investment portfolio gains in the first quarter of 2021 ~~compared with significant market~~outperformed the investment portfolio losses in the first quarter of ~~2020 drove~~2022 as the ~~increase~~Russian invasion of Ukraine, inflation fears and the Federal Reserve interest rate increases weighed on the global economy and markets resulting in ~~non-operating income. Our consolidated investment products and supplemental savings plan hedge portfolio comprised more than half~~lower valuations at the end of ~~the net gains recognized during~~ the first quarter ~~of 2021. Our~~2022. The cash and discretionary investment portfolio also experienced net investment ~~gains~~losses of ~~$13.7~~$23.8 million induring the first quarter of ~~2021.~~2022.

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

T. Rowe Price investment products and not just the net investment income related to our interest. The table below shows the impact that the consolidated T. Rowe Price 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
(in millions) 3/31/2021 3/31/2020
Operating expenses reflected in net operating income $ (3.5) $ (3.7)
Net investment income (loss) reflected in non-operating income 37.2 (330.3)
Impact on income before taxes $ 33.7 $ (334.0)
Net income (loss) attributable to our interest in the consolidated T. Rowe Price investment products $ 18.3 $ (157.5)
Net income (loss) attributable to redeemable non-controlling interests (unrelated third-party investors) 15.4 (176.5)
$ 33.7 $ (334.0)

~~Provision for income taxes~~

Our effective tax rate for the first quarter of 2021 was 23.2%, compared with 19.5% in the 2020 quarter. The increase in our effective tax rate for the first quarter of 2021 as compared to the first quarter of 2020 is primarily due to lower discrete tax benefits associated with option exercises as well as the impact of these benefits relative to the higher pre-tax income in the first quarter of 2021 as compared to the comparable 2020 quarter. These benefits were partially offset by higher net gains attributable to redeemable non-controlling interests held in the firm's consolidated investment products, which are not taxable to the firm despite being included in pre-tax income, and a lower state effective tax rate. The state effective rate in the first quarter of 2020 was unfavorably impacted by the remeasurement of deferred state tax assets and liabilities related to our investment portfolio.


	Three months ended
(in millions)	3/31/2022		3/31/2021
Operating expenses reflected in net operating income	$	(2.5)	$	(3.5)
Net investment income (loss) reflected in non-operating income	(101.4)		37.2
Impact on income before taxes	$	(103.9)	$	33.7

Net income (loss) attributable to our interest in the consolidated T. Rowe Price investment products	$	(50.4)	$	18.3
Net income (loss) attributable to redeemable non-controlling interests (unrelated third-party investors)	(53.5)		15.4
	$	(103.9)	$	33.7

Page 2528

Provision for income taxes

The following table reconciles the statutory federal income tax rate to our effective tax rate on a GAAP basis for both the three months ended March 31, ~~2021~~2022 and ~~2020:~~2021:

Three months ended
3/31/2021 3/31/2020
Statutory U.S. federal income tax rate 21.0 % 21.0 %
State income taxes for current year, net of federal income tax benefits(1)
3.8 6.4
Net (income) losses attributable to redeemable non-controlling interests (.6) 3.1
Net excess tax benefits from stock-based compensation plans activity (1.2) (8.1)
Other items .2 (2.9)
Effective income tax rate 23.2 % 19.5 %


	Three months ended
	3/31/2022		3/31/2021
Statutory U.S. federal income tax rate	21.0	%	21.0	%


State income taxes for current year, net of federal income tax benefits(1)	3.3		3.8
Net (income) losses attributable to redeemable non-controlling interests	.3		(.6)
Net excess tax benefits from stock-based compensation plans activity	(.6)		(1.2)
Other items	.2		.2
Effective income tax rate	24.2	%	23.2	%

(1) State income tax benefits are reflected in the total benefits for net income attributable to redeemable non-controlling interests and stock-based compensation plans activity.

Our GAAP effective tax rate ~~will continue~~for the first quarter of 2022 was 24.2%, compared with 23.2% in the 2021 quarter. The increase in the GAAP effective tax rate in 2022 from 2021 was primarily due to ~~experience volatility~~net losses attributable to redeemable non-controlling interests held in future periods as the discrete tax benefits recognized from option exercises are impacted by market fluctuations in our stock price and timing of option exercises. The rate will also be impacted by net investment income recognized on our consolidated investment products ~~that are driven~~and lower discrete tax benefits associated with the settlement of stock-based awards. These increases were partially offset by ~~market fluctuations and changes~~the favorable impacts of the reduction in the ~~proportion~~effective state tax rate due to the full phase-in of ~~their net income that is attributable~~the 2018 Maryland state tax legislation and the remeasurement of the contingent consideration liability with respect to ~~non-controlling interests.~~the earnout arrangement with OHA.

The non-GAAP 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 ~~increased to 23.7%~~was 24.2% in the first quarter of ~~2021~~2022 compared with ~~22.5%~~23.7% in first quarter of ~~2020,~~2021. The increase in the non-GAAP effective tax rate was primarily ~~due~~attributable to lower discrete tax benefits associated with ~~option exercises in~~the settlement of stock-based awards compared to the first quarter of ~~2021 as well as~~2021. The non-GAAP effective tax rate for the ~~impact of these benefits relative to the higher pre-tax income in the first quarter of 2021 as compared to the comparable 2020 quarter and a lower effective state tax rate. The firm~~three months ended March 31, 2022 continues to ~~see~~be favorably impacted by the ~~phased-in~~complete phase-in benefit of the 2018 Maryland state tax ~~legislation~~legislation.

Our effective tax rate will continue to experience volatility in ~~which we expect~~future periods as the tax benefits recognized from stock-based compensation are impacted by market fluctuations in our stock price and timing of option exercises as well as the remeasurement of the contingent consideration liability. Our GAAP rate will also be impacted by changes in the proportion of net income that is attributable to ~~reduce~~ our ~~effective state rate over the five-year phase-in period to less than 3% by the end of 2022.~~redeemable non-controlling interests and non-controlling interests reflected in permanent equity.

We currently estimate that our effective tax rate for the full year ~~2021,~~2022, on a GAAP basis, will be in the range of ~~22%~~22.0% to ~~25%~~25.0%. On a non-GAAP basis, the range is ~~23%~~23.0% to ~~25%~~25.0%.

NON-GAAP INFORMATION AND RECONCILIATION.

We believe the non-GAAP financial measures below provide relevant and meaningful information to investors about our core operating results. These measures have been established in order to increase transparency for the purpose of evaluating our core business, for comparing current results with prior period results, and to enable more appropriate comparison with industry peers. However, non-GAAP financial measures should not be considered a substitute for financial measures calculated in accordance with U.S. GAAP and may be calculated differently by other companies.

Page 29

The following schedules reconcile certain U.S. GAAP financial measures for the three months ended

March 31, ~~2021~~2022 and ~~2020.~~

Three months ended 3/31/2021
Operating expenses Net operating income Non-operating income (loss)
Provision (benefit) for income taxes(4)
Net income attributable to T. Rowe Price Group
Diluted earnings per share(5)
U.S. GAAP Basis $ 933.6 $ 893.2 $ 102.1 $ 230.5 $ 749.4 $ 3.17
Non-GAAP adjustments:
   Consolidated T. Rowe Price
investment products(1)
(2.2) 3.5 (37.2) (3.8) (14.5) (.06)
   Supplemental savings plan liability(2)
(22.2) 22.2 (22.1) — .1 —
   Other non-operating income(3)
— — (29.1) (6.1) (23.0) (.10)
Adjusted Non-GAAP Basis $ 909.2 $ 918.9 $ 13.7 $ 220.6 $ 712.0 $ 3.01
2021.


	Three months ended 3/31/2022
	Operating expenses		Net operating income		Non-operating income (loss)		Provision (benefit) for income taxes(6)		Net income attributable to T. Rowe Price		Diluted earnings per share(7)
U.S. GAAP Basis	$	985.6	$	877.4	$	(198.5)	$	164.5	$	567.9	$	2.41
Non-GAAP adjustments:
Consolidated T. Rowe Price investment products(1)	(1.6)		2.5		101.4		20.3		30.0		.13
Supplemental savings plan liability(2)	51.0		(51.0)		55.3		1.7		2.7		.01
Acquisition-related transaction costs(3)	(.7)		.7		—		.3		.4		—
Acquisition-related contingent consideration(4)	45.5		(45.5)		—		(18.2)		(27.3)		(.12)
Acquisition-related compensation arrangements(4)	(13.6)		13.6		—		5.4		8.2		.04
Acquisition-related amortization - investments and intangible assets(4)	(27.1)		40.3		—		16.1		24.2		.10
Other non-operating income(5)	—		—		18.0		7.2		10.8		.05


Adjusted Non-GAAP Basis	$	1,039.1	$	838.0	$	(23.8)	$	197.3	$	616.9	$	2.62

~~Page 26~~


		Three months ended 3/31/2020													Three months ended 3/31/2021
		Operating expenses		Net operating income		Non-operating income (loss)		Provision (benefit) for income taxes(4)		Net income attributable to T. Rowe Price Group		Diluted earnings per share(5)			Operating expenses		Net operating income		Non-operating income (loss)		Provision (benefit) for income taxes(6)		Net income attributable to T. Rowe Price		Diluted earnings per share(7)
U.S. GAAP Basis	U.S. GAAP Basis	$	755.4	$	707.2	$	(500.3)	$	40.3	$	343.1	$	1.41	U.S. GAAP Basis	$	933.6	$	893.2	$	102.1	$	230.5	$	749.4	$	3.17
Non-GAAP adjustments:	Non-GAAP adjustments:													Non-GAAP adjustments:
Consolidated T. Rowe Price investment products(1)	Consolidated T. Rowe Price investment products(1)	(1.2)		3.7		330.3		71.1		86.4		.36		Consolidated T. Rowe Price investment products(1)	(2.2)		3.5		(37.2)		(3.8)		(14.5)		(.06)
Supplemental savings plan liability(2)	Supplemental savings plan liability(2)	63.7		(63.7)		68.5		2.1		2.7		.01		Supplemental savings plan liability(2)	(22.2)		22.2		(22.1)		—		.1		—
Other non-operating income~~(3)~~(5)	Other non-operating income~~(3)~~(5)	—		—		40.3		18.2		22.1		.09		Other non-operating income~~(3)~~(5)	—		—		(29.1)		(6.1)		(23.0)		(.10)

Adjusted Non-GAAP Basis	Adjusted Non-GAAP Basis	$	817.9	$	647.2	$	(61.2)	$	131.7	$	454.3	$	1.87	Adjusted Non-GAAP Basis	$	909.2	$	918.9	$	13.7	$	220.6	$	712.0	$	3.01

(1) These non-GAAP adjustments remove the impact that the consolidated T. Rowe Price investment products have on our U.S. GAAP consolidated statements of income. Specifically, we add back the operating expenses and subtract the investment income of the consolidated T. Rowe Price investment products. The adjustment to our operating expenses represents the operating expenses of the consolidated products, net of the elimination of related management and administrative fees. The adjustment to net income attributable to T. Rowe Price ~~Group~~ represents the net income of the consolidated products, net of redeemable non-controlling ~~interest.~~interests. We remove the impact of the consolidated T. Rowe Price investment products as we believe they impact the reader’s ability to understand our core operating results.

(2) These non-GAAP adjustments remove 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. We use T. Rowe Price investment products to economically hedge the exposure to these market movements. We believe 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.

(3)This non-GAAP adjustment removes the transactions costs incurred related to the acquisition of OHA. Management believes adjusting for these charges help the reader's ability to understand the firm's core operating results and to increase comparability period to period.

Page 30

(4)These non-GAAP adjustments remove the impact of acquisition-related amortization and costs including amortization of intangible assets, the recurring fair value remeasurements of the contingent consideration liability, amortization of acquired investment and non-controlling interest basis differences and amortization of compensation-related arrangements. Management believes adjusting for these charges helps the reader's ability to understand the firm's core operating results and to increase comparability period to period.

(5) This non-GAAP adjustment represents the other non-operating income (loss) and the net gains (losses) earned on our non-consolidated investment portfolio that are not designated as economic hedges of the supplemental savings plan liability, and non-consolidated seed investments and other investments that are not part of the cash and discretionary investment portfolio. We retain the investment gains recognized on our non-consolidated cash and discretionary investments as these assets and related income (loss) are considered part of our core operations. We believe adjusting for these non-operating income (loss) items helps the reader’s ability to understand our core operating results and increases comparability to prior years. Additionally, we do not emphasize the impact of the portion of non-operating income (loss) removed when managing and evaluating our core performance.

~~(4)~~(6) The income tax impacts were calculated in order to achieve an overall non-GAAP effective tax rate for the three months ended March 31, 2022 and 2021 of ~~23.7% for 2021~~24.2% and ~~22.5% for 2020. We estimate~~23.7%, respectively. The firm estimates that ~~our~~its effective tax rate for the full-year ~~2021~~2022 on a non-GAAP basis will be in the range of ~~23%~~23.0% to ~~25%~~25.0%.

~~(5)~~(7) This non-GAAP measure was calculated by applying the two-class method to adjusted net income attributable to T. Rowe Price ~~Group~~ 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
3/31/2021 3/31/2020
Adjusted net income attributable to T. Rowe Price Group $ 712.0 $ 454.3
Less: adjusted net income allocated to outstanding restricted stock and stock unit holders 18.9 12.4
Adjusted net income allocated to common stockholders $ 693.1 $ 441.9

~~Page 27~~


	Three months ended
	3/31/2022		3/31/2021
Adjusted net income attributable to T. Rowe Price	$	616.9	$	712.0
Less: adjusted net income allocated to outstanding restricted stock and stock unit holders	14.1		18.9
Adjusted net income allocated to common stockholders	$	602.8	$	693.1

CAPITAL RESOURCES AND LIQUIDITY.

Sources of Liquidity

We ~~remain debt-free with~~have ample liquidity, including cash and investments in T. Rowe Price products, as follows:


(in millions)	(in millions)	3/31/2021		12/31/2020		(in millions)	3/31/2022		12/31/2021
Cash and cash equivalents	Cash and cash equivalents	$	2,830.1	$	2,151.7	Cash and cash equivalents	$	1,997.5	$	1,523.1
Discretionary investments	Discretionary investments	2,019.2		2,095.7		Discretionary investments	576.1		554.1
Total cash and discretionary investments	Total cash and discretionary investments	4,849.3		4,247.4		Total cash and discretionary investments	2,573.6		2,077.2
Redeemable seed capital investments	Redeemable seed capital investments	1,244.3		1,219.1		Redeemable seed capital investments	1,096.6		1,300.1
Investments used to hedge the supplemental savings plan liability	Investments used to hedge the supplemental savings plan liability	766.9		768.1		Investments used to hedge the supplemental savings plan liability	820.0		881.5
Total cash and investments in T. Rowe Price products	Total cash and investments in T. Rowe Price products	$	6,860.5	$	6,234.6	Total cash and investments in T. Rowe Price products	$	4,490.2	$	4,258.8

Our discretionary investment portfolio is comprised ~~primarily~~ of short duration bond funds, which typically yield higher than money market rates, and asset allocation products. Cash and discretionary investments ~~returned gains~~experienced market losses of ~~$13.7~~$23.8 million in the three months ended March 31, ~~2021, as~~2022 compared to investment ~~losses~~gains of ~~$61.2~~$13.7 million in the ~~three months ended March 31, 2020. Cash and discretionary investments in T. Rowe Price products held by our~~2021 quarter. Our subsidiaries outside the United States ~~were $754.4~~hold cash and discretionary investments of $869.1 million at March 31, ~~2021~~2022 and ~~$675.8~~$764.2 million at December 31, ~~2020.~~2021. 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.

Our seed capital investments are redeemable, although we generally expect to be invested for several years for the products to build an investment performance history and until unrelated third-party investors substantially reduce our relative ownership percentage.

The cash and investment presentation on the unaudited condensed consolidated balance sheet is based on the accounting treatment for the cash equivalent or investment item. The following table details how T. Rowe ~~Price Group’s~~ Price’s

Page 31

interests in cash and investments relate to where they are presented on the unaudited condensed consolidated balance sheet as of March 31, ~~2021.~~2022.

(in millions) Cash and cash equivalents Investments
Net assets of consolidated T. Rowe Price investment products(1)
3/31/2021
Cash and discretionary investments $ 2,830.1 $ 1,910.1 $ 109.1 $ 4,849.3
Seed capital investments — 473.2 771.1 1,244.3
Investments used to hedge the supplemental savings plan liability — 766.9 — 766.9
Total cash and investments in T. Rowe Price products attributable to T. Rowe Price Group 2,830.1 3,150.2 880.2 6,860.5
Investment in UTI and other investments — 253.4 — 253.4
Total cash and investments attributable to T. Rowe Price Group 2,830.1 3,403.6 880.2 7,113.9
Redeemable non-controlling interests — — 1,012.9 1,012.9
As reported on unaudited condensed consolidated balance sheet at March 31, 2021 $ 2,830.1 $ 3,403.6 $ 1,893.1 $ 8,126.8


(in millions)	Cash and cash equivalents		Investments		Net assets of consolidated T. Rowe Price investment products(1)		3/31/2022
Cash and discretionary investments	$	1,997.5	$	502.2	$	73.9	$	2,573.6
Seed capital investments	—		358.6		738.0		1,096.6
Investments used to hedge the supplemental savings plan liability	—		820.0		—		820.0
Total cash and investments in T. Rowe Price products attributable to T. Rowe Price	1,997.5		1,680.8		811.9		4,490.2
Investments in affiliated private investment funds(2)	—		795.2		—		795.2
Investments in CLOs	—		124.5		—		124.5
Investment in UTI and other investments	—		278.8		—		278.8
Total cash and investments attributable to T. Rowe Price	1,997.5		2,879.3		811.9		5,688.7
Redeemable non-controlling interests	—		—		790.4		790.4
As reported on unaudited condensed consolidated balance sheet at March 31, 2022	$	1,997.5	$	2,879.3	$	1,602.3	$	6,479.1

(1) The consolidated T. Rowe Price investment products are generally those products we provided seed capital at the time of their formation and we have a controlling interest. These products generally represent U.S. mutual funds as well as those funds regulated outside the U.S. The ~~$109.1~~$73.9 million and the ~~$771.1~~$738.0 million represent the total value at March 31, ~~2021~~2022 of our interest in the consolidated T. Rowe Price investment products. The total net assets of the T. Rowe Price investment products at March 31, ~~2021~~2022 of ~~$1,893.1~~$1,602.3 million includes assets of ~~$1,946.8~~$1,658.2 million, less liabilities of ~~$53.7~~$55.9 million as reflected in our unaudited condensed consolidated balance sheets.

(2)Includes $272.2 million of non-controlling interests in consolidated entities and represents the portion of these investments, held by third parties, that we cannot sell in order to obtain cash for general operations.

Our unaudited condensed consolidated balance sheet reflects the cash and cash equivalents, investments, other assets and liabilities of those T. Rowe Price investment products we consolidate, as well as redeemable non-controlling interests for the portion of these T. Rowe Price investment products that are held by unrelated third-party investors. Although we can redeem our net interest in these T. Rowe Price investment products at any time, we

~~Page 28~~

cannot directly access or sell the assets held by the products to obtain cash for general operations. Additionally, the assets of these T. Rowe Price investment products are not available to our general creditors. Our interest in these

T. Rowe Price investment products was used as initial seed capital and is recategorized as discretionary when it is determined by management that the seed capital is no longer needed. We assess the discretionary investment products and, when we decide to liquidate our interest, we seek to do so in a way as to not impact the product and, ultimately, the unrelated third-party investors.

Uses of Liquidity

We increased our quarterly recurring dividend per common share in February ~~2021~~2022 by ~~20.0%~~11.1% to ~~$1.08~~$1.20 per common share from ~~$.90~~$1.08 per common share. ~~Additionally,~~Further, we expended ~~$.3 billion~~$320.1 million in the first quarter of ~~2021~~2022 to repurchase ~~1.6~~2.1 million shares, or ~~0.7%,~~.9% of our outstanding common stock, at an average price of ~~$164.22~~$151.97 per share. These dividends and repurchases were expended using existing cash balances and cash generated from operations. While opportunistic in our approach to stock buybacks, we will generally repurchase our common stock over time to offset the dilution created by our equity-based compensation plans.

Page 32

Since the end of ~~2018,~~2019, we have returned ~~$4.0~~$5.5 billion to stockholders through stock repurchases, ~~and our~~ regular quarterly dividends, and a special dividend, as follows:

(in millions) Recurring dividend Stock repurchases Total cash returned to stockholders
2019 $ 733.6 $ 708.8 $ 1,442.4
2020 846.0 1,192.2 2,038.2
Three months ended 3/31/2021 252.3 267.6 519.9
Total $ 1,831.9 $ 2,168.6 $ 4,000.5


(in millions)	Recurring dividend		Special dividend		Stock repurchases		Total cash returned to stockholders
2020	$	846.0	$	—	$	1,192.2	$	2,038.2
2021	1,003.7		699.8		1,136.0		2,839.5
Three months ended 3/31/2022	279.2		—		320.1		599.3
Total	$	2,128.9	$	699.8	$	2,648.3	$	5,477.0

We anticipate property, equipment, software and other capital expenditures, including internal labor capitalization, for the full-year ~~2021~~2022 to be about ~~$265~~$290 million, of which more than three-quarters is planned for technology initiatives. We expect to fund our anticipated capital expenditures with operating cash flows and other available resources.

Page 2933

Cash Flows

The following table summarizes the cash flows for the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, that are attributable to T. Rowe Price, ~~Group,~~ our consolidated T. Rowe Price investment products, and the related eliminations required in preparing the statement.


		Three months ended																	Three months ended
		3/31/2021								3/31/2020									3/31/2022								3/31/2021
(in millions)	(in millions)	Cash flow attributable to T. Rowe Price Group		Cash flow attributable to consolidated T. Rowe Price investment products		Elims		As reported		Cash flow attributable to T. Rowe Price Group		Cash flow attributable to consolidated T. Rowe Price investment products		Elims		As reported		(in millions)	Cash flow attributable to T. Rowe Price		Cash flow attributable to consolidated T. Rowe Price investment products		Elims		As reported		Cash flow attributable to T. Rowe Price		Cash flow attributable to consolidated T. Rowe Price investment products		Elims		As reported
Cash flows from operating activities	Cash flows from operating activities																	Cash flows from operating activities
Net income		$	749.4	$	33.7	$	(18.3)	$	764.8	$	343.1	$	(334.0)	$	157.5	$	166.6
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization of property and equipment		49.0		—		—		49.0		46.1		—		—		46.1
Net income (loss)																		Net income (loss)	$	567.9	$	(103.9)	$	50.4	$	514.4	$	749.4	$	33.7	$	(18.3)	$	764.8
Adjustments to reconcile net income (loss) to net cash provided by operating activities																		Adjustments to reconcile net income (loss) to net cash provided by operating activities
Depreciation and amortization of property, equipment and software																		Depreciation and amortization of property, equipment and software	54.5		—		—		54.5		49.0		—				49.0
Amortization of acquired assets and liabilities																		Amortization of acquired assets and liabilities	53.9		—		—		53.9		—		—				—
Fair value remeasurement of contingent liability																		Fair value remeasurement of contingent liability	(45.5)		—		—		(45.5)		—		—		—		—

Stock-based compensation expense	Stock-based compensation expense	57.5		—		—		57.5		58.3		—		—		58.3		Stock-based compensation expense	63.6		—		—		63.6		57.5		—				57.5
Net (gains) losses recognized on investments	Net (gains) losses recognized on investments	(77.8)		—		18.3		(59.5)		324.8		—		(157.5)		167.3		Net (gains) losses recognized on investments	88.7		—		(50.4)		38.3		(77.8)		—		18.3		(59.5)
Net change in T. Rowe Price investment products used to economically hedge supplemental savings plan liability		22.0		—		—		22.0		(8.9)		—		—		(8.9)
Net redemptions in T. Rowe Price investment products used to economically hedge supplemental savings plan liability																		Net redemptions in T. Rowe Price investment products used to economically hedge supplemental savings plan liability	6.1		—		—		6.1		22.0		—				22.0
Net change in trading securities held by consolidated T. Rowe Price investment products	Net change in trading securities held by consolidated T. Rowe Price investment products	—		(120.9)		—		(120.9)		—		234.6		—		234.6		Net change in trading securities held by consolidated T. Rowe Price investment products	—		180.1		—		180.1		—		(120.9)				(120.9)
Other changes in assets and liabilities		338.5		(56.5)		(.2)		281.8		100.6		23.7		(.6)		123.7
Other changes																		Other changes	229.0		9.4		(.4)		238.0		338.5		(56.5)		(.2)		281.8
Net cash provided by (used in) operating activities	Net cash provided by (used in) operating activities	1,138.6		(143.7)		(.2)		994.7		864.0		(75.7)		(.6)		787.7		Net cash provided by (used in) operating activities	1,018.2		85.6		(.4)		1,103.4		1,138.6		(143.7)		(.2)		994.7
Net cash provided by (used in) investing activities	Net cash provided by (used in) investing activities	30.4		(27.3)		(33.9)		(30.8)		(15.0)		(.8)		43.4		27.6		Net cash provided by (used in) investing activities	44.4		(5.9)		(34.7)		3.8		30.4		(27.3)		(33.9)		(30.8)
Net cash provided by (used in) financing activities	Net cash provided by (used in) financing activities	(490.6)		149.0		34.1		(307.5)		(1,068.4)		118.9		(42.8)		(992.3)		Net cash provided by (used in) financing activities	(588.2)		(91.0)		35.1		(644.1)		(490.6)		149.0		34.1		(307.5)
Effect of exchange rate changes on cash and cash equivalents of consolidated T. Rowe Price investment products	Effect of exchange rate changes on cash and cash equivalents of consolidated T. Rowe Price investment products	—		.9		—		.9		—		(1.2)		—		(1.2)		Effect of exchange rate changes on cash and cash equivalents of consolidated T. Rowe Price investment products	—		(2.7)		—		(2.7)		—		.9		—		.9
Net change in cash and cash equivalents during period	Net change in cash and cash equivalents during period	678.4		(21.1)		—		657.3		(219.4)		41.2		—		(178.2)		Net change in cash and cash equivalents during period	474.4		(14.0)		—		460.4		678.4		(21.1)		—		657.3
Cash and cash equivalents at beginning of year	Cash and cash equivalents at beginning of year	2,151.7		104.8		—		2,256.5		1,781.8		76.5		—		1,858.3		Cash and cash equivalents at beginning of year	1,523.1		101.1		—		1,624.2		2,151.7		104.8		—		2,256.5
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	2,830.1	$	83.7	$	—	$	2,913.8	$	1,562.4	$	117.7	$	—	$	1,680.1	Cash and cash equivalents at end of period	$	1,997.5	$	87.1	$	—	$	2,084.6	$	2,830.1	$	83.7	$	—	$	2,913.8

Page 3034

Operating Activities

Operating activities attributable to T. Rowe Price ~~Group~~ during the first quarter of ~~2021~~2022 provided cash flows of ~~$1,138.6~~$1,018.2 million as compared to ~~$864.0~~$1,138.6 million during the first quarter of ~~2020.~~2021. Operating cash flows attributable to T. Rowe Price ~~Group increased $274.6~~decreased $120.4 million, including a ~~$406.3~~$181.5 million ~~increase~~decrease in net income from the first quarter of ~~2020~~2021 and timing differences primarily on the cash settlement of our assets and liabilities of ~~$237.9~~$109.5 million. These ~~increases~~decreases were partially offset by ~~$400.5~~$186.5 million in lower non-cash adjustments, including unrealized investment gains/losses, depreciation, amortization of acquisition-related assets and retention arrangements, the fair value remeasurement of the contingent consideration liability, stock-based compensation ~~expense.~~expense, and other noncash items. The non-cash adjustments were primarily driven by ~~a $402.6~~$88.7 million ~~increase~~in net investment losses in the first quarter of 2022 compared with $77.8 million in net investment gains in the first quarter of ~~2021 compared with net investment losses in the first quarter of 2020.~~2021. Additionally, in ~~2021,~~2022, we had net proceeds of ~~$22.0~~$6.1 million from certain investment products that economically hedge our supplemental savings plan liability ~~while we had~~compared to net ~~investments~~proceeds of ~~$8.9~~$22.0 million in the same period of ~~2020.~~2021. Our interim operating cash flows do not include the cash impact of variable compensation that is accrued throughout the year before being substantially paid out in December. 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.

Investing Activities

Net cash provided by investing activities that are attributable to T. Rowe Price ~~Group~~ totaled ~~$30.4~~$44.4 million in the first quarter of ~~2021~~2022 compared with ~~$15.0~~$30.4 million of cash ~~used~~provided by investing activities in the ~~2020~~2021 period. During ~~2021,~~ 2022,

we increased the cash provided by investing activities with higher net proceeds from the sale of certain of our discretionary investments of $58.9 million compared to net proceeds of $47.8 million during 2021. Partially offsetting these increases were decreased property, equipment and software expenditures of $3.9 million. We also decreased the level of seed capital provided by ~~$77.3~~$.8 million. We eliminate our seed capital in those T. Rowe Price investment products we consolidate in preparing our unaudited condensed consolidated statement of cash flows. Partially offsetting this increase to cash provided by investing activities were lower net proceeds from the sale of certain of our discretionary investments of $47.8 million compared to net proceeds of $74.0 million during 2020. In addition, we increased our property and equipment expenditures by $12.8 million. The remaining ~~$26.5~~$21.4 million change in reported cash flows from investing activities is related to the net cash removed from our balance sheet from consolidating and deconsolidating investment products.

Financing Activities

Net cash used in financing activities attributable to T. Rowe Price ~~Group~~ were ~~$490.6~~$588.2 million in the first quarter of ~~2021~~2022 compared with ~~$1,068.4~~$490.6 million in the ~~2020~~2021 period. During ~~2021, there was a $632.1~~the first quarter of 2022, we used $320.1 million ~~decrease in cash paid for common stock repurchases as we repurchased 6.7~~to repurchase 2.1 million ~~less~~ shares ~~of common stock~~compared to $259.2 million to repurchase 1.6 million shares in the first quarter of ~~2021 as compared to~~2021. During the first quarter of ~~2020. Partially offsetting this decrease in cash used for financing activities~~2022, there was a ~~$37.1~~$26.9 million increase in dividends paid in ~~2021~~2022 as a result of ~~an 20.0%~~the 11.1% increase in our quarterly dividend per share. Partially offsetting these increases in net cash used in financing activities were $6.0 million in net contributions from non-controlling interests in consolidated entities. The remaining change in reported cash flows from financing activities is primarily attributable to ~~a $107.0~~$55.9 million ~~increase~~in net redemptions from redeemable non-controlling interest holders of our consolidated investment products during the first quarter of 2022 as compared to $183.1 million in net subscriptions received from redeemable non-controlling interest holders of our consolidated investment products during the first quarter of ~~2021 compared to the 2020 period.~~2021.

CRITICAL ACCOUNTING POLICIES.

The preparation of financial statements often requires the selection of specific accounting methods and policies from among several acceptable alternatives. Further, significant estimates and judgments may be required in selecting and applying those methods and policies in the recognition of the assets and liabilities in our unaudited condensed consolidated balance sheets, the revenues and expenses in our unaudited condensed consolidated statements of income, and the information that is contained in our significant accounting policies and notes to unaudited condensed consolidated financial statements. Making these estimates and judgments requires the analysis of information concerning events that may not yet be complete and of facts and circumstances that may change over time. Accordingly, actual amounts or future results can differ materially from those estimates that we include currently in our unaudited condensed consolidated financial statements, significant accounting policies, and notes.

There have been no material changes in the critical accounting policies previously identified in our ~~2020~~2021 Annual Report on Form 10-K.

NEWLY-ISSUED BUT NOT YET ADOPTED ACCOUNTING GUIDANCE.

See Note 1 - The Company and Basis of Preparation note within Item 1. Financial Statements for a discussion of newly issued but not yet adopted accounting guidance.

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FORWARD-LOOKING INFORMATION.

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: our revenues, net income, and earnings per share onof common stock; changes in the amount and composition of our assets under management; our expense levels; our tax rate; the timing and expense related to the integration of OHA with and into our business; and our expectations regarding financial markets, future transactions, dividends, stock repurchases, investments, new products and services, capital expenditures, changes in our effective fee rate, the impact of the coronavirus pandemic, and other market conditions. Readers are cautioned that any forward-looking information provided by or on behalf of T. Rowe Price 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 ~~2020.~~2021. Further, forward-looking statements speak only as of the date on which they are made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which it is made or to reflect the occurrence of unanticipated events.

Our future revenues and results of operations will fluctuate primarily due to changes in the total value and composition of assets under our management. Such changes result from many factors, including, among other things: cash inflows and outflows in the U.S. mutual funds, subadvised funds, separately managed accounts, collective investment trusts, and other investment products, performance fees, capital allocation-based income, fluctuations in global financial markets that result in appreciation or depreciation of the assets under our management, our introduction of new mutual funds and investment products, changes in retirement savings trends relative to participant-directed investments and defined contribution plans, and the impact of the coronavirus outbreak. The ability to attract and retain investors’ assets under our management is dependent on investor sentiment and confidence; the relative investment performance of the ~~U.S.~~T. Rowe Price mutual funds and other managed investment products as compared with competing offerings and market indexes; the ability to maintain our investment management and administrative fees at appropriate levels; competitive conditions in the mutual fund, asset management, and broader financial services sectors; ~~and~~ our level of success in implementing our strategy to expand our business, including our ~~announced plan to establish~~establishment of T. Rowe Price Investment Management as a separate registered investment ~~adviser.~~adviser; and our ability to attract and retain key personnel. Our revenues are substantially dependent on fees earned under contracts with the T. Rowe Price funds and could be adversely affected if the independent directors of one or more of the T. Rowe Price funds terminated or significantly altered the terms of the investment management or related administrative services agreements. Non-operating investment income will also fluctuate primarily due to the size of our investments, changes in their market valuations, and any other-than-temporary impairments that may arise or, in the case of our equity method investments, our proportionate share of the investees' net income.

Our future results are also dependent upon the level of our expenses, which are subject to fluctuation for the following or other reasons: changes in the level of our advertising and promotion expenses in response to market conditions, including our efforts to expand our investment advisory business to investors outside the U.S. and to further penetrate our distribution channels within the U.S.; the pace and level of spending to support key strategic ~~priorities;~~priorities, including the integration of OHA with and into our business; variations in the level of total compensation expense due to, among other things, bonuses, restricted stock units and other equity grants, other incentive awards, our supplemental savings plan, changes in our employee count and mix, and competitive factors; any goodwill or other asset impairment that may arise; fluctuation in foreign currency exchange rates applicable to the costs of our international operations; expenses and capital costs, such as technology assets, depreciation, amortization, and research and development, incurred to maintain and enhance our administrative and operating services infrastructure; the ~~level~~timing of the assumption of all third party research ~~costs,~~payments, unanticipated costs that may be incurred to protect investor accounts and the goodwill of our clients; and disruptions of services, including those provided by third parties, such as fund and product recordkeeping, facilities, communications, power, and the mutual fund transfer agent and accounting systems.

Our business is also subject to substantial governmental regulation, and changes in legal, regulatory, accounting, tax, and compliance requirements may have a substantial effect on our operations and results, including, but not limited to, effects on costs that we incur and effects on investor interest in T. Rowe Price investment products and investing in general or in particular classes of mutual funds or other investments.

Page 3236

Item 3.Quantitative and Qualitative Disclosures About Market Risk.

There has been no material change in the total potential loss information provided in Item 7A of the Form 10-K Annual Report for ~~2020.~~2021.

Item 4.Controls and Procedures.

Our management, including our principal executive and principal financial officers, has evaluated the effectiveness of our disclosure controls and procedures as of March 31, ~~2021.~~2022. Based on that evaluation, our principal executive and principal financial officers have concluded that our disclosure controls and procedures as of March 31, ~~2021,~~2022, are effective at the reasonable assurance level to ensure that the information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, including this Form 10-Q quarterly report, is recorded, processed, summarized, and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms, and to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Our management, including our principal executive and principal financial officers, has evaluated any change in our internal control over financial reporting that occurred during the first quarter of ~~2021,~~2022, and has concluded that there was no change during the first quarter of ~~2021~~2022 that ~~have~~has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

For information about our legal proceedings, please see our Commitments and Contingencies footnote to our unaudited condensed consolidated financial statements in Part 1. of this Form 10-Q.

Item 1A. Risk Factors.

There have been no material changes in the information provided in Item 1A of our Form 10-K Annual Report for ~~2020.~~2021.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.


Month	Month	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Program	Maximum Number of Shares that May Yet Be Purchased Under the Program	Month	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Program	Maximum Number of Shares that May Yet Be Purchased Under the Program
January	January	178,193	$	151.29	142,551	21,324,760	January	603,619	$	173.23	600,000	14,925,910
February	February	864,525	$	161.23	799,129	20,525,631	February	912,273	$	145.01	889,270	14,036,640
March	March	715,743	$	170.76	687,784	19,837,847	March	619,593	$	141.46	618,000	13,418,640
Total	Total	1,758,461	$	164.10	1,629,464		Total	2,135,485	$	151.96	2,107,270

Shares repurchased by us in a quarter may include repurchases conducted pursuant to publicly announced board authorization, outstanding shares surrendered to the company to pay the exercise price in connection with swap exercises of employee stock options, and shares withheld to cover the minimum tax withholding obligation associated with the vesting of restricted stock awards. Of the total number of shares purchased during the first quarter of ~~2021, 128,997~~2022, 28,215 were related to shares surrendered in connection with employee stock option exercises and no shares were withheld to cover tax withholdings associated with the vesting of restricted stock awards.

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The following table details the changes in and status of the Board of Directors’ outstanding publicly announced board authorizations.

Authorization Dates 1/1/2021 Total Number of
Shares Purchased Maximum Number of Shares that May Yet Be Purchased at 3/31/2021
February 2019 6,467,311 (1,629,464) 4,837,847
March 2020 15,000,000 — 15,000,000
21,467,311 (1,629,464) 19,837,847


Authorization Dates	1/1/2022	Total Number of Shares Purchased	Maximum Number of Shares that May Yet Be Purchased at 3/31/2022


February 2019	525,910	(525,910)	—
March 2020	15,000,000	(1,581,360)	13,418,640
	15,525,910	(2,107,270)	13,418,640

Item 3. Defaults Upon Senior Securities.

Not applicable.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5.Other Information.

On April ~~29, 2021,~~28, 2022, we issued an earnings release reporting our results of operations for the first quarter of ~~2021.~~2022. A copy of that earnings release is furnished herewith as Exhibit 99.1. This information shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933.

Item 6. Exhibits.

The following exhibits required by Item 601 of Regulation S-K are furnished herewith.


3(i)						Charter of T. Rowe Price Group, Inc., as reflected by Articles of Restatement dated June 20, 2018. (Incorporated by reference from Form 10-Q Quarterly Report filed on July 25, 2018.)

3(ii)						Amended and Restated By-Laws of T. Rowe Price Group, Inc. as of February 9,~~, 20~~21 . 2021. (Incorporated by reference from Form 10 -K 10-K Annual Report filed on February 11,~~, 20~~21 . 2021.)

15						Report from KPMG LLP, independent registered public accounting firm, re unaudited interim financial information.

31(i).1						Rule 13a-14(a) Certification of Principal Executive Officer.

31(i).2						Rule 13a-14(a) Certification of Principal Financial Officer.

32						Section 1350 Certifications.

99.1						~~Earnin~~gsEarnings release issued April ~~29, 202~~1 , 28, 2022, reporting our results of operations for the first quarter of ~~202~~1 .2022.

101						The following series of unaudited XBRL-formatted documents are collectively included herewith as Exhibit 101. The financial information is extracted from T. Rowe Price Group’s unaudited condensed consolidated interim financial statements and notes that are included in this Form 10-Q Report.

101.INS						XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH						XBRL Taxonomy Extension Schema Document

101.CAL						XBRL Taxonomy Calculation Linkbase Document

101.LAB						XBRL Taxonomy Label Linkbase Document

101.PRE						XBRL Taxonomy Presentation Linkbase Document

101.DEF						XBRL Taxonomy Definition Linkbase Document

Page 3438

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on April ~~29, 2021.~~28, 2022.

T. Rowe Price Group, Inc.

By: /s/ ~~Céline S. Dufétel~~Jennifer B. Dardis

Vice President, ~~Chief Operating Officer,~~ Chief Financial Officer and Treasurer

Page 3539


	Options	Weighted- average exercise price
Outstanding at December 31, 2020	4,329,056	$	72.52



Exercised	(748,203)	$	72.28


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


(in millions)

Second quarter 2021	$	56.9
Third quarter 2021	56.7
Fourth quarter 2021	50.2
2022	117.4
2023 through 2026	97.2
Total	$	378.4


Authorization Dates	1/1/2021	Total Number of Shares Purchased	Maximum Number of Shares that May Yet Be Purchased at 3/31/2021


February 2019	6,467,311	(1,629,464)	4,837,847
March 2020	15,000,000	—	15,000,000
	21,467,311	(1,629,464)	19,837,847