|
Maryland
|
|
52-2264646
|
(State of incorporation)
|
|
(I.R.S. Employer Identification No.)
|
Large accelerated filer
x
|
|
Accelerated filer
¨
|
Non-accelerated filer
¨
(do not check if smaller reporting company)
|
|
Smaller reporting company
¨
|
|
Emerging growth company
¨
|
|
Item 1.
|
Financial Statements.
|
|
|
12/31/2017
|
|
6/30/2018
|
||||
ASSETS
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
1,902.7
|
|
|
$
|
1,484.4
|
|
Accounts receivable and accrued revenue
|
|
565.3
|
|
|
564.4
|
|
||
Investments
|
|
1,477.3
|
|
|
2,459.5
|
|
||
Assets of consolidated T. Rowe Price investment products ($1,839.6 million at December 31, 2017 and $1,467.0 million at June 30, 2018, related to variable interest entities)
|
|
2,048.4
|
|
|
1,857.0
|
|
||
Property and equipment, net
|
|
652.0
|
|
|
655.2
|
|
||
Goodwill
|
|
665.7
|
|
|
665.7
|
|
||
Other assets
|
|
224.0
|
|
|
196.0
|
|
||
Total assets
|
|
$
|
7,535.4
|
|
|
$
|
7,882.2
|
|
|
|
|
|
|
||||
LIABILITIES
|
|
|
|
|
||||
Accounts payable and accrued expenses
|
|
$
|
216.2
|
|
|
$
|
220.0
|
|
Liabilities of consolidated T. Rowe Price investment products ($39.5 million at December 31, 2017, and $51.6 million at June 30, 2018, related to variable interest entities)
|
|
55.9
|
|
|
114.6
|
|
||
Accrued compensation and related costs
|
|
108.5
|
|
|
349.6
|
|
||
Supplemental savings plan liability
|
|
269.3
|
|
|
287.8
|
|
||
Income taxes payable
|
|
68.3
|
|
|
56.4
|
|
||
Total liabilities
|
|
718.2
|
|
|
1,028.4
|
|
||
|
|
|
|
|
||||
Commitments and contingent liabilities
|
|
|
|
|
|
|
||
|
|
|
|
|
||||
Redeemable non-controlling interests
|
|
992.8
|
|
|
739.2
|
|
||
|
|
|
|
|
||||
STOCKHOLDERS’ EQUITY
|
|
|
|
|
||||
Preferred stock, undesignated, $.20 par value – authorized and unissued 20,000,000 shares
|
|
—
|
|
|
—
|
|
||
Common stock, $.20 par value—authorized 750,000,000; issued 245,111,000 shares at December 31, 2017, and 243,180,000 at June 30, 2018
|
|
49.0
|
|
|
48.6
|
|
||
Additional capital in excess of par value
|
|
846.1
|
|
|
654.6
|
|
||
Retained earnings
|
|
4,932.9
|
|
|
5,435.1
|
|
||
Accumulated other comprehensive loss
|
|
(3.6
|
)
|
|
(23.7
|
)
|
||
Total permanent stockholders’ equity
|
|
5,824.4
|
|
|
6,114.6
|
|
||
Total liabilities, redeemable non-controlling interests, and permanent stockholders’ equity
|
|
$
|
7,535.4
|
|
|
$
|
7,882.2
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
6/30/2017
|
|
6/30/2018
|
|
6/30/2017
|
|
6/30/2018
|
||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Investment advisory fees
|
$
|
1,046.0
|
|
|
$
|
1,214.4
|
|
|
$
|
2,038.7
|
|
|
$
|
2,403.6
|
|
Administrative, distribution, and servicing fees
|
140.0
|
|
|
130.6
|
|
|
279.9
|
|
|
269.4
|
|
||||
Net revenues
|
1,186.0
|
|
|
1,345.0
|
|
|
2,318.6
|
|
|
2,673.0
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating expenses
|
|
|
|
|
|
|
|
||||||||
Compensation and related costs
|
403.8
|
|
|
456.0
|
|
|
801.2
|
|
|
897.4
|
|
||||
Distribution and servicing
|
64.8
|
|
|
71.6
|
|
|
124.6
|
|
|
141.9
|
|
||||
Advertising and promotion
|
18.7
|
|
|
19.0
|
|
|
44.4
|
|
|
43.6
|
|
||||
Product-related costs
|
34.4
|
|
|
37.1
|
|
|
73.0
|
|
|
79.2
|
|
||||
Technology, occupancy, and facility costs
|
85.6
|
|
|
93.2
|
|
|
168.4
|
|
|
187.3
|
|
||||
General, administrative, and other
|
71.1
|
|
|
73.4
|
|
|
127.7
|
|
|
145.1
|
|
||||
Nonrecurring insurance recoveries related to Dell appraisal rights matter
|
—
|
|
|
—
|
|
|
(50.0
|
)
|
|
—
|
|
||||
Total operating expenses
|
678.4
|
|
|
750.3
|
|
|
1,289.3
|
|
|
1,494.5
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net operating income
|
507.6
|
|
|
594.7
|
|
|
1,029.3
|
|
|
1,178.5
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Non-operating income
|
|
|
|
|
|
|
|
||||||||
Net gains on investments
|
71.4
|
|
|
17.4
|
|
|
136.2
|
|
|
31.8
|
|
||||
Net gains on consolidated investment products
|
39.4
|
|
|
19.1
|
|
|
88.3
|
|
|
19.9
|
|
||||
Other income (loss)
|
1.2
|
|
|
(2.4
|
)
|
|
2.5
|
|
|
(1.5
|
)
|
||||
Total non-operating income
|
112.0
|
|
|
34.1
|
|
|
227.0
|
|
|
50.2
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Income before income taxes
|
619.6
|
|
|
628.8
|
|
|
1,256.3
|
|
|
1,228.7
|
|
||||
Provision for income taxes
|
229.6
|
|
|
169.2
|
|
|
465.9
|
|
|
313.6
|
|
||||
Net income
|
390.0
|
|
|
459.6
|
|
|
790.4
|
|
|
915.1
|
|
||||
Less: net income attributable to redeemable non-controlling interests
|
16.1
|
|
|
10.7
|
|
|
30.6
|
|
|
12.5
|
|
||||
Net income attributable to T. Rowe Price Group
|
$
|
373.9
|
|
|
$
|
448.9
|
|
|
$
|
759.8
|
|
|
$
|
902.6
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per share on common stock of T. Rowe Price Group
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
1.52
|
|
|
$
|
1.81
|
|
|
$
|
3.08
|
|
|
$
|
3.62
|
|
Diluted
|
$
|
1.50
|
|
|
$
|
1.77
|
|
|
$
|
3.04
|
|
|
$
|
3.55
|
|
|
|
|
|
|
|
|
|
||||||||
Dividends declared per share
|
$
|
.57
|
|
|
$
|
.70
|
|
|
$
|
1.14
|
|
|
$
|
1.40
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
6/30/2017
|
|
6/30/2018
|
|
6/30/2017
|
|
6/30/2018
|
||||||||
Net income
|
$
|
390.0
|
|
|
$
|
459.6
|
|
|
$
|
790.4
|
|
|
$
|
915.1
|
|
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
||||||||
Net unrealized holding gains on available-for-sale investments
|
13.9
|
|
|
—
|
|
|
32.2
|
|
|
—
|
|
||||
Reclassification gains (losses) recognized in non-operating income upon dispositions, determined using average cost
|
(30.3
|
)
|
|
—
|
|
|
(77.9
|
)
|
|
—
|
|
||||
Net unrealized gains (losses) recognized upon the transfer to trading investments
|
(23.6
|
)
|
|
—
|
|
|
(23.6
|
)
|
|
—
|
|
||||
Total net unrealized holding gains (losses) recognized in other comprehensive income
|
(40.0
|
)
|
|
—
|
|
|
(69.3
|
)
|
|
—
|
|
||||
Currency translation adjustments
|
|
|
|
|
|
|
|
||||||||
Consolidated T. Rowe Price investment products - variable interest entities
|
30.0
|
|
|
(40.0
|
)
|
|
37.0
|
|
|
(23.8
|
)
|
||||
Reclassification gains (losses) recognized in non-operating income upon deconsolidation of certain T. Rowe Price investment products
|
—
|
|
|
(.5
|
)
|
|
—
|
|
|
(3.6
|
)
|
||||
Consolidated T. Rowe Price investment products - variable interest entities, net
|
30.0
|
|
|
(40.5
|
)
|
|
37.0
|
|
|
(27.4
|
)
|
||||
Equity method investments
|
6.7
|
|
|
(3.3
|
)
|
|
3.5
|
|
|
.5
|
|
||||
Total currency translation adjustments
|
36.7
|
|
|
(43.8
|
)
|
|
40.5
|
|
|
(26.9
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income (loss) before income taxes
|
(3.3
|
)
|
|
(43.8
|
)
|
|
(28.8
|
)
|
|
(26.9
|
)
|
||||
Net deferred tax benefits (income taxes)
|
4.6
|
|
|
6.0
|
|
|
15.3
|
|
|
3.5
|
|
||||
Total other comprehensive income (loss)
|
1.3
|
|
|
(37.8
|
)
|
|
(13.5
|
)
|
|
(23.4
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Total comprehensive income
|
391.3
|
|
|
421.8
|
|
|
776.9
|
|
|
891.7
|
|
||||
Less: comprehensive income attributable to redeemable non-controlling interests
|
23.6
|
|
|
(9.8
|
)
|
|
40.2
|
|
|
(1.0
|
)
|
||||
Comprehensive income attributable to T. Rowe Price Group
|
$
|
367.7
|
|
|
$
|
431.6
|
|
|
$
|
736.7
|
|
|
$
|
892.7
|
|
|
Six months ended
|
||||||
|
6/30/2017
|
|
6/30/2018
|
||||
Cash flows from operating activities
|
|
|
|
||||
Net income
|
$
|
790.4
|
|
|
$
|
915.1
|
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities
|
|
|
|
||||
Depreciation and amortization of property and equipment
|
71.9
|
|
|
74.7
|
|
||
Stock-based compensation expense
|
74.2
|
|
|
90.8
|
|
||
Realized gains on dispositions of available-for-sale T. Rowe Price investment products
|
(77.9
|
)
|
|
—
|
|
||
Gains recognized upon transfer of an investment in a T. Rowe Price mutual fund from available-for-sale to held as trading
|
(23.6
|
)
|
|
—
|
|
||
Net gains recognized on other investments
|
(23.9
|
)
|
|
(5.4
|
)
|
||
Net investments in T. Rowe Price investment products to economically hedge supplemental savings plan liability
|
(129.0
|
)
|
|
(13.7
|
)
|
||
Net change in securities held by consolidated T. Rowe Price investment products
|
(802.0
|
)
|
|
(407.1
|
)
|
||
Other changes in assets and liabilities
|
259.1
|
|
|
274.9
|
|
||
Net cash provided by (used in) operating activities
|
139.2
|
|
|
929.3
|
|
||
|
|
|
|
||||
Cash flows from investing activities
|
|
|
|
||||
Purchases of T. Rowe Price investment products
|
(23.4
|
)
|
|
(1,110.2
|
)
|
||
Dispositions T. Rowe Price investment products
|
294.7
|
|
|
259.3
|
|
||
Net cash of T. Rowe Price investment products on consolidation (deconsolidation)
|
(45.9
|
)
|
|
(21.7
|
)
|
||
Additions to property and equipment
|
(82.6
|
)
|
|
(78.6
|
)
|
||
Other investing activity
|
(5.2
|
)
|
|
7.2
|
|
||
Net cash provided by (used in) investing activities
|
137.6
|
|
|
(944.0
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities
|
|
|
|
||||
Repurchases of common stock
|
(446.9
|
)
|
|
(450.3
|
)
|
||
Common share issuances under stock-based compensation plans
|
74.4
|
|
|
92.8
|
|
||
Dividends paid to common stockholders of T. Rowe Price Group
|
(280.4
|
)
|
|
(348.7
|
)
|
||
Net subscriptions received from redeemable non-controlling interest holders
|
717.7
|
|
|
318.0
|
|
||
Net cash provided by (used in) financing activities
|
64.8
|
|
|
(388.2
|
)
|
||
|
|
|
|
||||
Effect of exchange rate changes on cash and cash equivalents of consolidated
T. Rowe Price investment products
|
3.8
|
|
|
(6.6
|
)
|
||
|
|
|
|
||||
Net change in cash and cash equivalents during period
|
345.4
|
|
|
(409.5
|
)
|
||
Cash and cash equivalents at beginning of year
|
1,270.5
|
|
|
2,005.8
|
|
||
Cash and cash equivalents at end of period, including $73.7 million at June 30, 2017, and $111.9 million at June 30, 2018, held by consolidated T. Rowe Price investment products)
|
$
|
1,615.9
|
|
|
$
|
1,596.3
|
|
|
Common
shares
outstanding
|
|
Common
stock
|
|
Additional
capital in
excess of
par value
|
|
Retained
earnings
|
|
Accumulated
other
comprehensive
income (loss)
|
|
Total
stockholders’
equity
|
|
Redeemable non-controlling interests
|
|||||||||||||
Balances at December 31, 2017
|
245,111
|
|
|
$
|
49.0
|
|
|
$
|
846.1
|
|
|
$
|
4,932.9
|
|
|
$
|
(3.6
|
)
|
|
$
|
5,824.4
|
|
|
$
|
992.8
|
|
Cumulative effect adjustment upon adoption of new financial instruments and accumulated other comprehensive income guidance on January 1, 2018
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
22.4
|
|
|
(7.9
|
)
|
|
14.5
|
|
|
—
|
|
||||||
Reclassification adjustment of stranded tax benefits on currency translation adjustments upon adoption of new accumulated other comprehensive income guidance on January 1, 2018
|
—
|
|
|
—
|
|
|
—
|
|
|
2.3
|
|
|
(2.3
|
)
|
|
—
|
|
|
—
|
|
||||||
Balances at January 1, 2018
|
245,111
|
|
|
49.0
|
|
|
846.1
|
|
|
4,957.6
|
|
|
(13.8
|
)
|
|
5,838.9
|
|
|
992.8
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
902.6
|
|
|
—
|
|
|
902.6
|
|
|
12.5
|
|
||||||
Other comprehensive income (loss), net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9.9
|
)
|
|
(9.9
|
)
|
|
(13.5
|
)
|
||||||
Dividends declared
|
—
|
|
|
—
|
|
|
—
|
|
|
(348.8
|
)
|
|
—
|
|
|
(348.8
|
)
|
|
—
|
|
||||||
Common stock-based compensation plans activity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Shares issued upon option exercises
|
2,241
|
|
|
.4
|
|
|
91.7
|
|
|
—
|
|
|
—
|
|
|
92.1
|
|
|
—
|
|
||||||
Restricted shares issued, net of shares withheld for taxes
|
8
|
|
|
—
|
|
|
(.1
|
)
|
|
—
|
|
|
—
|
|
|
(.1
|
)
|
|
—
|
|
||||||
Shares issued upon vesting of restricted stock units, net of shares withheld for taxes
|
56
|
|
|
—
|
|
|
(.7
|
)
|
|
—
|
|
|
—
|
|
|
(.7
|
)
|
|
—
|
|
||||||
Forfeiture of restricted awards
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
90.8
|
|
|
—
|
|
|
—
|
|
|
90.8
|
|
|
—
|
|
||||||
Restricted stock units issued as dividend equivalents
|
—
|
|
|
—
|
|
|
.1
|
|
|
(.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Common shares repurchased
|
(4,230
|
)
|
|
(.8
|
)
|
|
(373.3
|
)
|
|
(76.2
|
)
|
|
—
|
|
|
(450.3
|
)
|
|
—
|
|
||||||
Net subscriptions into T. Rowe Price investment products
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
322.6
|
|
||||||
Net deconsolidations of T. Rowe Price investment products
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(575.2
|
)
|
||||||
Balances at June 30, 2018
|
243,180
|
|
|
$
|
48.6
|
|
|
$
|
654.6
|
|
|
$
|
5,435.1
|
|
|
$
|
(23.7
|
)
|
|
$
|
6,114.6
|
|
|
$
|
739.2
|
|
|
Three months ended 3/31/2017
|
|
Three months ended 6/30/2017
|
||||||||||||||||||||||||||||
(in millions)
|
As previously reported
|
|
Change in Presentation
|
|
Impact of ASC 606
|
|
Recast
|
|
As previously reported
|
|
Change in Presentation
|
|
Impact of ASC 606
|
|
As reported herein
|
||||||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Investment advisory fees
|
$
|
991.1
|
|
|
$
|
—
|
|
|
$
|
1.6
|
|
|
$
|
992.7
|
|
|
$
|
1,043.9
|
|
|
$
|
—
|
|
|
$
|
2.1
|
|
|
$
|
1,046.0
|
|
Administrative, distribution, and servicing fees
(1)
|
122.5
|
|
|
—
|
|
|
17.4
|
|
|
139.9
|
|
|
127.7
|
|
|
—
|
|
|
12.3
|
|
|
140.0
|
|
||||||||
Net revenues
|
1,113.6
|
|
|
—
|
|
|
19.0
|
|
|
1,132.6
|
|
|
1,171.6
|
|
|
—
|
|
|
14.4
|
|
|
1,186.0
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Compensation and related costs
|
397.4
|
|
|
—
|
|
|
—
|
|
|
397.4
|
|
|
403.8
|
|
|
—
|
|
|
—
|
|
|
403.8
|
|
||||||||
Distribution and servicing
|
35.2
|
|
|
22.9
|
|
|
1.7
|
|
|
59.8
|
|
|
36.4
|
|
|
26.4
|
|
|
2.0
|
|
|
64.8
|
|
||||||||
Advertising and promotion
|
25.6
|
|
|
—
|
|
|
.1
|
|
|
25.7
|
|
|
18.6
|
|
|
—
|
|
|
.1
|
|
|
18.7
|
|
||||||||
Product-related costs
|
—
|
|
|
21.4
|
|
|
17.2
|
|
|
38.6
|
|
|
—
|
|
|
22.4
|
|
|
12.0
|
|
|
34.4
|
|
||||||||
Technology, occupancy, and facility costs
(2)
|
81.0
|
|
|
1.8
|
|
|
—
|
|
|
82.8
|
|
|
83.1
|
|
|
2.5
|
|
|
—
|
|
|
85.6
|
|
||||||||
General, administrative, and other
|
102.7
|
|
|
(46.1
|
)
|
|
—
|
|
|
56.6
|
|
|
122.1
|
|
|
(51.3
|
)
|
|
.3
|
|
|
71.1
|
|
||||||||
Nonrecurring insurance recoveries related to Dell appraisal rights matter
|
(50.0
|
)
|
|
—
|
|
|
—
|
|
|
(50.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Total operating expenses
|
591.9
|
|
|
—
|
|
|
19.0
|
|
|
610.9
|
|
|
664.0
|
|
|
—
|
|
|
14.4
|
|
|
678.4
|
|
||||||||
Net operating income
|
$
|
521.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
521.7
|
|
|
$
|
507.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
507.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Three months ended 9/30/2017
|
|
Three months ended 12/31/2017
|
||||||||||||||||||||||||||||
(in millions)
|
As previously reported
|
|
Change in Presentation
|
|
Impact of ASC 606
|
|
Recast
|
|
As previously reported
|
|
Change in Presentation
|
|
Impact of ASC 606
|
|
Recast
|
||||||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Investment advisory fees
|
$
|
1,096.7
|
|
|
$
|
—
|
|
|
$
|
2.2
|
|
|
$
|
1,098.9
|
|
|
$
|
1,156.0
|
|
|
$
|
—
|
|
|
$
|
2.2
|
|
|
$
|
1,158.2
|
|
Administrative, distribution, and servicing fees
(1)
|
125.0
|
|
|
—
|
|
|
14.8
|
|
|
139.8
|
|
|
130.1
|
|
|
—
|
|
|
9.3
|
|
|
139.4
|
|
||||||||
Net revenues
|
1,221.7
|
|
|
—
|
|
|
17.0
|
|
|
1,238.7
|
|
|
1,286.1
|
|
|
—
|
|
|
11.5
|
|
|
1,297.6
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Compensation and related costs
|
417.4
|
|
|
—
|
|
|
—
|
|
|
417.4
|
|
|
446.3
|
|
|
—
|
|
|
—
|
|
|
446.3
|
|
||||||||
Distribution and servicing
|
37.4
|
|
|
27.9
|
|
|
2.1
|
|
|
67.4
|
|
|
38.0
|
|
|
30.2
|
|
|
2.4
|
|
|
70.6
|
|
||||||||
Advertising and promotion
|
14.0
|
|
|
—
|
|
|
—
|
|
|
14.0
|
|
|
33.8
|
|
|
—
|
|
|
.2
|
|
|
34.0
|
|
||||||||
Product-related costs
|
—
|
|
|
23.4
|
|
|
14.5
|
|
|
37.9
|
|
|
—
|
|
|
26.0
|
|
|
9.1
|
|
|
35.1
|
|
||||||||
Technology, occupancy, and facility costs
(2)
|
84.0
|
|
|
2.2
|
|
|
.1
|
|
|
86.3
|
|
|
90.4
|
|
|
5.5
|
|
|
(.1
|
)
|
|
95.8
|
|
||||||||
General, administrative, and other
|
120.4
|
|
|
(53.5
|
)
|
|
.3
|
|
|
67.2
|
|
|
146.6
|
|
|
(61.7
|
)
|
|
(.1
|
)
|
|
84.8
|
|
||||||||
Total operating expenses
|
673.2
|
|
|
—
|
|
|
17.0
|
|
|
690.2
|
|
|
755.1
|
|
|
—
|
|
|
11.5
|
|
|
766.6
|
|
||||||||
Net operating income
|
$
|
548.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
548.5
|
|
|
$
|
531.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
531.0
|
|
|
Three months ended 6/30/2017
|
|
Three months ended 6/30/2018
|
||||||||||||||||||||||||||||
|
|
|
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
|
$
|
756.4
|
|
|
$
|
83.6
|
|
|
$
|
36.4
|
|
|
$
|
876.4
|
|
|
$
|
846.9
|
|
|
$
|
74.4
|
|
|
$
|
35.5
|
|
|
$
|
956.8
|
|
Subadvised and separate accounts and other investment products
|
289.6
|
|
|
—
|
|
|
—
|
|
|
289.6
|
|
|
367.5
|
|
|
—
|
|
|
—
|
|
|
367.5
|
|
||||||||
Other
|
—
|
|
|
20.0
|
|
|
—
|
|
|
20.0
|
|
|
—
|
|
|
20.7
|
|
|
—
|
|
|
20.7
|
|
||||||||
|
$
|
1,046.0
|
|
|
$
|
103.6
|
|
|
$
|
36.4
|
|
|
$
|
1,186.0
|
|
|
$
|
1,214.4
|
|
|
$
|
95.1
|
|
|
$
|
35.5
|
|
|
$
|
1,345.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Six months ended 6/30/2017
|
|
Six months ended 6/30/2018
|
||||||||||||||||||||||||||||
|
|
|
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
|
$
|
1,473.8
|
|
|
$
|
169.9
|
|
|
$
|
71.6
|
|
|
$
|
1,715.3
|
|
|
$
|
1,679.8
|
|
|
$
|
156.2
|
|
|
$
|
72.1
|
|
|
$
|
1,908.1
|
|
Subadvised and separate accounts and other investment products
|
564.9
|
|
|
—
|
|
|
—
|
|
|
564.9
|
|
|
723.8
|
|
|
—
|
|
|
—
|
|
|
723.8
|
|
||||||||
Other
|
—
|
|
|
38.4
|
|
|
—
|
|
|
38.4
|
|
|
—
|
|
|
41.1
|
|
|
—
|
|
|
41.1
|
|
||||||||
|
$
|
2,038.7
|
|
|
$
|
208.3
|
|
|
$
|
71.6
|
|
|
$
|
2,318.6
|
|
|
$
|
2,403.6
|
|
|
$
|
197.3
|
|
|
$
|
72.1
|
|
|
$
|
2,673.0
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
(in millions)
|
6/30/2017
|
|
6/30/2018
|
|
6/30/2017
|
|
6/30/2018
|
||||||||
U.S. mutual funds
|
|
|
|
|
|
|
|
||||||||
Equity and blended assets
|
$
|
628.9
|
|
|
$
|
718.0
|
|
|
$
|
1,223.1
|
|
|
$
|
1,423.5
|
|
Fixed income, including money market
|
127.5
|
|
|
128.9
|
|
|
250.7
|
|
|
256.3
|
|
||||
|
756.4
|
|
|
846.9
|
|
|
1,473.8
|
|
|
1,679.8
|
|
||||
Subadvised and separate accounts and other investment products
|
|
|
|
|
|
|
|
||||||||
Equity and blended assets
|
240.3
|
|
|
308.0
|
|
|
468.2
|
|
|
605.0
|
|
||||
Fixed income, including money market
|
49.3
|
|
|
59.5
|
|
|
96.7
|
|
|
118.8
|
|
||||
|
289.6
|
|
|
367.5
|
|
|
564.9
|
|
|
723.8
|
|
||||
Total
|
$
|
1,046.0
|
|
|
$
|
1,214.4
|
|
|
$
|
2,038.7
|
|
|
$
|
2,403.6
|
|
|
Average during
|
|
Average during
|
|
|
||||||||||||||||||
|
Three months ended
|
|
Six months ended
|
|
As of
|
||||||||||||||||||
(in billions)
|
6/30/2017
|
|
6/30/2018
|
|
6/30/2017
|
|
6/30/2018
|
|
12/31/2017
|
|
6/30/2018
|
||||||||||||
U.S. mutual funds
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Equity and blended assets
|
$
|
440.1
|
|
|
$
|
496.1
|
|
|
$
|
430.6
|
|
|
$
|
495.4
|
|
|
$
|
480.5
|
|
|
$
|
497.5
|
|
Fixed income, including money market
|
120.1
|
|
|
128.5
|
|
|
117.8
|
|
|
127.9
|
|
|
125.8
|
|
|
128.6
|
|
||||||
|
560.2
|
|
|
624.6
|
|
|
548.4
|
|
|
623.3
|
|
|
606.3
|
|
|
626.1
|
|
||||||
Subadvised and separate accounts and other investment products
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Equity and blended assets
|
244.7
|
|
|
314.9
|
|
|
238.0
|
|
|
311.6
|
|
|
291.9
|
|
|
320.1
|
|
||||||
Fixed income, including money market
|
81.0
|
|
|
97.0
|
|
|
79.2
|
|
|
96.1
|
|
|
92.9
|
|
|
97.9
|
|
||||||
|
325.7
|
|
|
411.9
|
|
|
317.2
|
|
|
407.7
|
|
|
384.8
|
|
|
418.0
|
|
||||||
Total
|
$
|
885.9
|
|
|
$
|
1,036.5
|
|
|
$
|
865.6
|
|
|
$
|
1,031.0
|
|
|
$
|
991.1
|
|
|
$
|
1,044.1
|
|
(in millions)
|
12/31/2017
|
|
6/30/2018
|
||||
Investments held at fair value
|
|
|
|
||||
T. Rowe Price investment products
(1)
|
$
|
692.1
|
|
|
$
|
1,398.2
|
|
T. Rowe Price investment products designated as an economic hedge of supplemental savings plan liability
|
268.2
|
|
|
288.3
|
|
||
Investment partnerships and other investments
(2)
|
78.0
|
|
|
93.9
|
|
||
Equity method investments
|
|
|
|
||||
T. Rowe Price investment products
|
277.4
|
|
|
508.8
|
|
||
26% interest in UTI Asset Management Company Limited (India)
|
155.8
|
|
|
164.6
|
|
||
Investment partnerships and other investments
|
4.8
|
|
|
4.7
|
|
||
U.S. Treasury note
|
1.0
|
|
|
1.0
|
|
||
Total
|
$
|
1,477.3
|
|
|
$
|
2,459.5
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
(in millions)
|
6/30/2017
|
|
6/30/2018
|
|
6/30/2017
|
|
6/30/2018
|
||||||||
Net increase (decrease) in assets of consolidated T. Rowe Price investment products
|
$
|
(38.1
|
)
|
|
$
|
97.1
|
|
|
$
|
(1,074.0
|
)
|
|
$
|
(660.4
|
)
|
Net increase (decrease) in liabilities of consolidated T. Rowe Price investment products
|
$
|
(.4
|
)
|
|
$
|
23.7
|
|
|
$
|
(133.6
|
)
|
|
$
|
18.5
|
|
Net increase (decrease) in redeemable non-controlling interests
|
$
|
(19.5
|
)
|
|
$
|
57.7
|
|
|
$
|
(787.2
|
)
|
|
$
|
(575.2
|
)
|
|
|
|
|
|
|
|
|
||||||||
Gains (losses) recognized upon deconsolidation
|
$
|
—
|
|
|
$
|
.5
|
|
|
$
|
—
|
|
|
$
|
3.6
|
|
(in millions)
|
12/31/2017
|
|
6/30/2018
|
||||
Investment carrying values
|
$
|
129.2
|
|
|
$
|
175.9
|
|
Unfunded capital commitments
|
38.8
|
|
|
35.0
|
|
||
Uncollected investment advisory and administrative fees
|
7.7
|
|
|
10.8
|
|
||
|
$
|
175.7
|
|
|
$
|
221.7
|
|
|
securities, interest rates, prepayment speeds, and credit risk. These inputs are based on market data
|
|
12/31/17
|
|
6/30/18
|
||||||||||||
(in millions)
|
Level 1
|
|
Level 2
|
|
Level 1
|
|
Level 2
|
||||||||
Cash equivalents held in T. Rowe Price money market funds
|
$
|
1,726.4
|
|
|
$
|
—
|
|
|
$
|
1,195.0
|
|
|
$
|
—
|
|
T. Rowe Price investment products
(1)
|
942.9
|
|
|
17.4
|
|
|
1,668.9
|
|
|
17.6
|
|
||||
Total
|
$
|
2,669.3
|
|
|
$
|
17.4
|
|
|
$
|
2,863.9
|
|
|
$
|
17.6
|
|
|
12/31/2017
|
|
6/30/2018
|
||||||||||||||||||||
(in millions)
|
Voting
interest entities |
|
Variable interest entities
|
|
Total
|
|
Voting
interest entities
|
|
Variable interest entities
|
|
Total
|
||||||||||||
Cash and cash equivalents
(1)
|
$
|
7.1
|
|
|
$
|
96.0
|
|
|
$
|
103.1
|
|
|
$
|
26.1
|
|
|
$
|
85.8
|
|
|
$
|
111.9
|
|
Investments
(2)
|
188.8
|
|
|
1,725.7
|
|
|
1,914.5
|
|
|
313.1
|
|
|
1,347.5
|
|
|
1,660.6
|
|
||||||
Other assets
|
12.9
|
|
|
17.9
|
|
|
30.8
|
|
|
50.8
|
|
|
33.7
|
|
|
84.5
|
|
||||||
Total assets
|
208.8
|
|
|
1,839.6
|
|
|
2,048.4
|
|
|
390.0
|
|
|
1,467.0
|
|
|
1,857.0
|
|
||||||
Liabilities
|
16.4
|
|
|
39.5
|
|
|
55.9
|
|
|
63.0
|
|
|
51.6
|
|
|
114.6
|
|
||||||
Net assets
|
$
|
192.4
|
|
|
$
|
1,800.1
|
|
|
$
|
1,992.5
|
|
|
$
|
327.0
|
|
|
$
|
1,415.4
|
|
|
$
|
1,742.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Attributable to T. Rowe Price Group
|
$
|
131.6
|
|
|
$
|
868.1
|
|
|
$
|
999.7
|
|
|
$
|
219.6
|
|
|
$
|
783.6
|
|
|
$
|
1,003.2
|
|
Attributable to redeemable non-controlling interests
|
60.8
|
|
|
932.0
|
|
|
992.8
|
|
|
107.4
|
|
|
631.8
|
|
|
739.2
|
|
||||||
|
$
|
192.4
|
|
|
$
|
1,800.1
|
|
|
$
|
1,992.5
|
|
|
$
|
327.0
|
|
|
$
|
1,415.4
|
|
|
$
|
1,742.4
|
|
|
Three months ended
|
||||||||||||||||||||||
|
6/30/2017
|
|
6/30/2018
|
||||||||||||||||||||
|
Voting interest entities
|
|
Variable interest entities
|
|
Total
|
|
Voting interest entities
|
|
Variable interest entities
|
|
Total
|
||||||||||||
Operating expenses reflected in net operating income
|
$
|
(.2
|
)
|
|
$
|
(2.5
|
)
|
|
$
|
(2.7
|
)
|
|
$
|
(.4
|
)
|
|
$
|
(2.7
|
)
|
|
$
|
(3.1
|
)
|
Net investment income reflected in non-operating income
|
4.8
|
|
|
34.6
|
|
|
39.4
|
|
|
.2
|
|
|
18.9
|
|
|
19.1
|
|
||||||
Impact on income before taxes
|
$
|
4.6
|
|
|
$
|
32.1
|
|
|
$
|
36.7
|
|
|
$
|
(0.2
|
)
|
|
$
|
16.2
|
|
|
$
|
16.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income attributable to T. Rowe Price Group
|
$
|
3.4
|
|
|
$
|
17.2
|
|
|
$
|
20.6
|
|
|
$
|
(.6
|
)
|
|
$
|
5.9
|
|
|
$
|
5.3
|
|
Net income attributable to redeemable non-controlling interests
|
1.2
|
|
|
14.9
|
|
|
16.1
|
|
|
.4
|
|
|
10.3
|
|
|
10.7
|
|
||||||
|
$
|
4.6
|
|
|
$
|
32.1
|
|
|
$
|
36.7
|
|
|
$
|
(.2
|
)
|
|
$
|
16.2
|
|
|
$
|
16.0
|
|
|
Six months ended
|
||||||||||||||||||||||
|
6/30/2017
|
|
6/30/2018
|
||||||||||||||||||||
(in millions)
|
Voting
interest entities |
|
Variable interest entities
|
|
Total
|
|
Voting
interest entities |
|
Variable interest entities
|
|
Total
|
||||||||||||
Operating expenses reflected in net operating income
|
$
|
(.5
|
)
|
|
$
|
(4.8
|
)
|
|
$
|
(5.3
|
)
|
|
$
|
(.7
|
)
|
|
$
|
(4.9
|
)
|
|
$
|
(5.6
|
)
|
Net investment income reflected in non-operating income
|
10.1
|
|
|
78.2
|
|
|
88.3
|
|
|
(.6
|
)
|
|
20.5
|
|
|
19.9
|
|
||||||
Impact on income before taxes
|
$
|
9.6
|
|
|
$
|
73.4
|
|
|
$
|
83.0
|
|
|
$
|
(1.3
|
)
|
|
$
|
15.6
|
|
|
$
|
14.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income attributable to T. Rowe Price Group
|
$
|
7.3
|
|
|
$
|
45.1
|
|
|
$
|
52.4
|
|
|
$
|
(1.3
|
)
|
|
$
|
3.1
|
|
|
$
|
1.8
|
|
Net income attributable to redeemable non-controlling interests
|
2.3
|
|
|
28.3
|
|
|
30.6
|
|
|
—
|
|
|
12.5
|
|
|
12.5
|
|
||||||
|
$
|
9.6
|
|
|
$
|
73.4
|
|
|
$
|
83.0
|
|
|
$
|
(1.3
|
)
|
|
$
|
15.6
|
|
|
$
|
14.3
|
|
|
Six months ended
|
||||||||||||||||||||||
|
6/30/2017
|
|
6/30/2018
|
||||||||||||||||||||
(in millions)
|
Voting
interest entities |
|
Variable interest entities
|
|
Total
|
|
Voting
interest entities |
|
Variable interest entities
|
|
Total
|
||||||||||||
Net cash provided by (used in) operating activities
|
$
|
(6.4
|
)
|
|
$
|
(727.8
|
)
|
|
$
|
(734.2
|
)
|
|
$
|
(38.1
|
)
|
|
$
|
(358.4
|
)
|
|
$
|
(396.5
|
)
|
Net cash provided by (used in) investing activities
|
(6.2
|
)
|
|
(39.7
|
)
|
|
(45.9
|
)
|
|
—
|
|
|
(21.7
|
)
|
|
(21.7
|
)
|
||||||
Net cash provided by (used in) financing activities
|
8.9
|
|
|
775.5
|
|
|
784.4
|
|
|
57.1
|
|
|
376.5
|
|
|
433.6
|
|
||||||
Effect of exchange rate changes on cash and cash equivalents of consolidated
T. Rowe Price investment products |
—
|
|
|
3.8
|
|
|
3.8
|
|
|
—
|
|
|
(6.6
|
)
|
|
(6.6
|
)
|
||||||
Net change in cash and cash equivalents during period
|
(3.7
|
)
|
|
11.8
|
|
|
8.1
|
|
|
19.0
|
|
|
(10.2
|
)
|
|
8.8
|
|
||||||
Cash and cash equivalents at beginning of year
|
10.3
|
|
|
55.3
|
|
|
65.6
|
|
|
7.1
|
|
|
96.0
|
|
|
103.1
|
|
||||||
Cash and cash equivalents at end of period
|
$
|
6.6
|
|
|
$
|
67.1
|
|
|
$
|
73.7
|
|
|
$
|
26.1
|
|
|
$
|
85.8
|
|
|
$
|
111.9
|
|
|
12/31/17
|
|
6/30/18
|
||||||||||||
(in millions)
|
Level 1
|
|
Level 2
|
|
Level 1
|
|
Level 2
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
6.2
|
|
|
$
|
.7
|
|
|
$
|
24.3
|
|
|
$
|
.9
|
|
Equity securities
|
536.0
|
|
|
667.5
|
|
|
207.8
|
|
|
571.3
|
|
||||
Fixed income securities
|
—
|
|
|
687.4
|
|
|
—
|
|
|
852.6
|
|
||||
Other investments
|
1.3
|
|
|
22.3
|
|
|
1.2
|
|
|
27.7
|
|
||||
|
$
|
543.5
|
|
|
$
|
1,377.9
|
|
|
$
|
233.3
|
|
|
$
|
1,452.5
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities
|
$
|
(.1
|
)
|
|
$
|
(13.7
|
)
|
|
$
|
(.6
|
)
|
|
$
|
(14.6
|
)
|
|
Options
|
|
Weighted-
average
exercise
price
|
|||
Outstanding at December 31, 2017
|
15,221,123
|
|
|
$
|
66.98
|
|
Exercised
|
(3,013,552
|
)
|
|
$
|
60.46
|
|
Forfeited
|
(36,455
|
)
|
|
$
|
75.74
|
|
Expired
|
(14,364
|
)
|
|
$
|
71.15
|
|
Outstanding at June 30, 2018
|
12,156,752
|
|
|
$
|
68.57
|
|
Exercisable at June 30, 2018
|
8,118,130
|
|
|
$
|
65.02
|
|
|
Restricted
shares
|
|
Restricted
stock
units
|
|
Weighted-average
fair value
|
||||
Nonvested at December 31, 2017
|
473,115
|
|
|
5,556,911
|
|
|
$
|
82.37
|
|
Time-based grants
|
8,775
|
|
|
21,376
|
|
|
$
|
111.46
|
|
Vested
|
(20,280
|
)
|
|
(30,300
|
)
|
|
$
|
71.97
|
|
Forfeited
|
(5,916
|
)
|
|
(65,513
|
)
|
|
$
|
78.94
|
|
Nonvested at June 30, 2018
|
455,694
|
|
|
5,482,474
|
|
|
$
|
82.64
|
|
Third quarter 2018
|
$
|
46.1
|
|
Fourth quarter 2018
|
40.5
|
|
|
2019
|
96.4
|
|
|
2020 through 2023
|
79.6
|
|
|
Total
|
$
|
262.6
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
(in millions)
|
6/30/2017
|
|
6/30/2018
|
|
6/30/2017
|
|
6/30/2018
|
||||||||
Net income attributable to T. Rowe Price Group
|
$
|
373.9
|
|
|
$
|
448.9
|
|
|
$
|
759.8
|
|
|
$
|
902.6
|
|
Less: net income allocated to outstanding restricted stock and stock unit holders
|
8.5
|
|
|
10.5
|
|
|
17.2
|
|
|
21.1
|
|
||||
Net income allocated to common stockholders
|
$
|
365.4
|
|
|
$
|
438.4
|
|
|
$
|
742.6
|
|
|
$
|
881.5
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average common shares
|
|
|
|
|
|
|
|
||||||||
Outstanding
|
239.8
|
|
|
242.2
|
|
|
240.9
|
|
|
243.2
|
|
||||
Outstanding assuming dilution
|
243.0
|
|
|
247.4
|
|
|
244.2
|
|
|
248.6
|
|
|
Three months ended
|
|
Six months ended
|
||||||||
(in millions)
|
6/30/2017
|
|
6/30/2018
|
|
6/30/2017
|
|
6/30/2018
|
||||
Weighted-average outstanding stock options excluded
|
8.5
|
|
|
—
|
|
|
9.0
|
|
|
—
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
(in millions)
|
6/30/2017
|
|
6/30/2018
|
|
6/30/2017
|
|
6/30/2018
|
||||||||
Net deferred tax benefits (income taxes) on:
|
|
|
|
|
|
|
|
||||||||
Net unrealized holding gains or losses
|
$
|
(5.4
|
)
|
|
$
|
—
|
|
|
$
|
(12.5
|
)
|
|
$
|
—
|
|
Reclassification adjustments recognized in the provision for income taxes:
|
|
|
|
|
|
|
|
||||||||
Net gains realized on dispositions
|
11.9
|
|
|
—
|
|
|
30.5
|
|
|
—
|
|
||||
Net gains recognized upon transfer to trading
investments
|
9.2
|
|
|
—
|
|
|
9.2
|
|
|
—
|
|
||||
Net deferred tax benefits (income taxes) on net unrealized holding gains or losses
|
15.7
|
|
|
—
|
|
|
27.2
|
|
|
—
|
|
||||
Currency translation adjustments
|
(11.1
|
)
|
|
5.9
|
|
|
(11.9
|
)
|
|
2.6
|
|
||||
Reclassification adjustment recognized in the provision for income taxes upon deconsolidation of T. Rowe Price investment product
|
—
|
|
|
.1
|
|
|
—
|
|
|
.9
|
|
||||
Total deferred tax benefits (income taxes) on currency translation adjustments
|
(11.1
|
)
|
|
6.0
|
|
|
(11.9
|
)
|
|
3.5
|
|
||||
Total net deferred tax benefits (income taxes)
|
$
|
4.6
|
|
|
$
|
6.0
|
|
|
$
|
15.3
|
|
|
$
|
3.5
|
|
|
|
|
Currency translation adjustments
|
|
|
||||||||||||||
(in millions)
|
Net unrealized holding gains
|
|
Equity method investments
|
|
Consolidated T. Rowe Price investment products - variable interest entities
|
|
Total currency translation adjustments
|
|
Total
|
||||||||||
Balances at December 31, 2017
|
$
|
7.9
|
|
|
$
|
(30.6
|
)
|
|
$
|
19.1
|
|
|
$
|
(11.5
|
)
|
|
$
|
(3.6
|
)
|
Reclassification of unrealized holding gains to retained earnings upon adoption of new financial instruments guidance
(1)
|
(7.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7.9
|
)
|
|||||
Reclassification adjustment of stranded tax benefits on currency translation adjustments upon adoption of new accumulated other comprehensive income guidance
|
—
|
|
|
(6.4
|
)
|
|
4.1
|
|
|
(2.3
|
)
|
|
(2.3
|
)
|
|||||
Balance at January 1, 2018
|
—
|
|
|
(37.0
|
)
|
|
23.2
|
|
|
(13.8
|
)
|
|
(13.8
|
)
|
|||||
Other comprehensive income before reclassifications and income taxes
|
—
|
|
|
.5
|
|
|
(10.3
|
)
|
|
(9.8
|
)
|
|
(9.8
|
)
|
|||||
Reclassification adjustments recognized in non-operating income
|
—
|
|
|
—
|
|
|
(3.6
|
)
|
|
(3.6
|
)
|
|
(3.6
|
)
|
|||||
|
—
|
|
|
.5
|
|
|
(13.9
|
)
|
|
(13.4
|
)
|
|
(13.4
|
)
|
|||||
Net deferred tax income taxes
|
—
|
|
|
(.1
|
)
|
|
3.6
|
|
|
3.5
|
|
|
3.5
|
|
|||||
Other comprehensive income (loss)
|
—
|
|
|
.4
|
|
|
(10.3
|
)
|
|
(9.9
|
)
|
|
(9.9
|
)
|
|||||
Balances at June 30, 2018
|
$
|
—
|
|
|
$
|
(36.6
|
)
|
|
$
|
12.9
|
|
|
$
|
(23.7
|
)
|
|
$
|
(23.7
|
)
|
|
Six months ended
|
||||||||||||||||||||||||||||||
|
6/30/2017
|
|
6/30/2018
|
||||||||||||||||||||||||||||
(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
|
||||||||||||||||
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net income
|
$
|
759.8
|
|
|
$
|
83.0
|
|
|
$
|
(52.4
|
)
|
|
$
|
790.4
|
|
|
$
|
902.6
|
|
|
$
|
14.3
|
|
|
$
|
(1.8
|
)
|
|
$
|
915.1
|
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Depreciation and amortization of property and equipment
|
71.9
|
|
|
—
|
|
|
—
|
|
|
71.9
|
|
|
74.7
|
|
|
—
|
|
|
—
|
|
|
74.7
|
|
||||||||
Stock-based compensation expense
|
74.2
|
|
|
—
|
|
|
—
|
|
|
74.2
|
|
|
90.8
|
|
|
—
|
|
|
—
|
|
|
90.8
|
|
||||||||
Realized gains on dispositions of available-for-sale T. Rowe Price investment products
|
(77.9
|
)
|
|
—
|
|
|
—
|
|
|
(77.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Gains recognized upon transfer of an investment in a T. Rowe Price mutual fund from available-for-sale to held as trading
|
(23.6
|
)
|
|
—
|
|
|
—
|
|
|
(23.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Net gains recognized on investments
|
(76.3
|
)
|
|
—
|
|
|
52.4
|
|
|
(23.9
|
)
|
|
(7.2
|
)
|
|
—
|
|
|
1.8
|
|
|
(5.4
|
)
|
||||||||
Net investments in T. Rowe Price investment products to economically hedge supplemental savings plan liability
|
(129.0
|
)
|
|
—
|
|
|
—
|
|
|
(129.0
|
)
|
|
(13.7
|
)
|
|
—
|
|
|
—
|
|
|
(13.7
|
)
|
||||||||
Net change in trading securities held by consolidated T. Rowe Price investment products
|
—
|
|
|
(802.0
|
)
|
|
—
|
|
|
(802.0
|
)
|
|
—
|
|
|
(407.1
|
)
|
|
—
|
|
|
(407.1
|
)
|
||||||||
Other changes in assets and liabilities
|
277.0
|
|
|
(15.2
|
)
|
|
(2.7
|
)
|
|
259.1
|
|
|
281.4
|
|
|
(3.7
|
)
|
|
(2.8
|
)
|
|
274.9
|
|
||||||||
Net cash provided by (used in) operating activities
|
876.1
|
|
|
(734.2
|
)
|
|
(2.7
|
)
|
|
139.2
|
|
|
1,328.6
|
|
|
(396.5
|
)
|
|
(2.8
|
)
|
|
929.3
|
|
||||||||
Net cash provided by (used in) investing activities
|
114.1
|
|
|
(45.9
|
)
|
|
69.4
|
|
|
137.6
|
|
|
(1,040.7
|
)
|
|
(21.7
|
)
|
|
118.4
|
|
|
(944.0
|
)
|
||||||||
Net cash provided by (used in) financing activities
|
(652.9
|
)
|
|
784.4
|
|
|
(66.7
|
)
|
|
64.8
|
|
|
(706.2
|
)
|
|
433.6
|
|
|
(115.6
|
)
|
|
(388.2
|
)
|
||||||||
Effect of exchange rate changes on cash and cash equivalents of consolidated T. Rowe Price investment products
|
—
|
|
|
3.8
|
|
|
—
|
|
|
3.8
|
|
|
—
|
|
|
(6.6
|
)
|
|
—
|
|
|
(6.6
|
)
|
||||||||
Net change in cash and cash equivalents during period
|
337.3
|
|
|
8.1
|
|
|
—
|
|
|
345.4
|
|
|
(418.3
|
)
|
|
8.8
|
|
|
—
|
|
|
(409.5
|
)
|
||||||||
Cash and cash equivalents at beginning of year
|
1,204.9
|
|
|
65.6
|
|
|
—
|
|
|
1,270.5
|
|
|
1,902.7
|
|
|
103.1
|
|
|
—
|
|
|
2,005.8
|
|
||||||||
Cash and cash equivalents at end of period
|
$
|
1,542.2
|
|
|
$
|
73.7
|
|
|
$
|
—
|
|
|
$
|
1,615.9
|
|
|
$
|
1,484.4
|
|
|
$
|
111.9
|
|
|
$
|
—
|
|
|
$
|
1,596.3
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
|
|
Three months ended
|
|
Six months ended
|
Index
|
|
6/30/2018
|
|
6/30/2018
|
S&P 500 Index
|
|
3.4%
|
|
2.7%
|
NASDAQ Composite Index
(1)
|
|
6.3%
|
|
8.8%
|
Russell 2000 Index
|
|
7.8%
|
|
7.7%
|
MSCI EAFE (Europe, Australasia, and Far East) Index
|
|
(1.0)%
|
|
(2.4)%
|
MSCI Emerging Markets Index
|
|
(7.9)%
|
|
(6.5)%
|
|
|
Three months ended
|
|
Six months ended
|
Index
|
|
6/30/2018
|
|
6/30/2018
|
Bloomberg Barclays U.S. Aggregate Bond Index
|
|
(.2)%
|
|
(1.6)%
|
JPMorgan Global High Yield Index
|
|
.2%
|
|
(.5)%
|
Bloomberg Barclays Municipal Bond Index
|
|
.9%
|
|
(.3)%
|
Bloomberg Barclays Global Aggregate Ex-U.S. Dollar Bond Index
|
|
(4.8)%
|
|
(1.3)%
|
JPMorgan Emerging Markets Bond Index Plus
|
|
(4.1)%
|
|
(6.1)%
|
|
Three months ended 6/30/2018
|
|
Six months ended 6/30/2018
|
||||||||||||||||||||||||||||
(in billions)
|
U.S. mutual funds
|
|
Subadvised and separate accounts
|
|
Other investment products
|
|
Total
|
|
U.S. mutual funds
|
|
Subadvised and separate accounts
|
|
Other investment products
|
|
Total
|
||||||||||||||||
Assets under management at beginning of period
|
612.9
|
|
|
260.4
|
|
|
140.9
|
|
|
1,014.2
|
|
|
606.3
|
|
|
255.2
|
|
|
129.6
|
|
|
991.1
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net cash flows before client transfers
|
4.0
|
|
|
1.5
|
|
|
2.1
|
|
|
7.6
|
|
|
12.1
|
|
|
.5
|
|
|
6.3
|
|
|
18.9
|
|
||||||||
Client transfers
|
(4.7
|
)
|
|
—
|
|
|
4.7
|
|
|
—
|
|
|
(13.6
|
)
|
|
2.6
|
|
|
11.0
|
|
|
—
|
|
||||||||
Net cash flows after client transfers
|
(.7
|
)
|
|
1.5
|
|
|
6.8
|
|
|
7.6
|
|
|
(1.5
|
)
|
|
3.1
|
|
|
17.3
|
|
|
18.9
|
|
||||||||
Net market appreciation and income
|
14.5
|
|
|
6.9
|
|
|
1.5
|
|
|
22.9
|
|
|
22.0
|
|
|
10.5
|
|
|
2.3
|
|
|
34.8
|
|
||||||||
Distributions not reinvested
|
(.6
|
)
|
|
—
|
|
|
—
|
|
|
(.6
|
)
|
|
(.7
|
)
|
|
—
|
|
|
—
|
|
|
(.7
|
)
|
||||||||
Change during the period
|
13.2
|
|
|
8.4
|
|
|
8.3
|
|
|
29.9
|
|
|
19.8
|
|
|
13.6
|
|
|
19.6
|
|
|
53.0
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Assets under management at June 30, 2018
|
$
|
626.1
|
|
|
$
|
268.8
|
|
|
$
|
149.2
|
|
|
$
|
1,044.1
|
|
|
$
|
626.1
|
|
|
$
|
268.8
|
|
|
$
|
149.2
|
|
|
$
|
1,044.1
|
|
|
Three months ended 6/30/2018
|
|
Six months ended 6/30/2018
|
||||||||||||||||||||||||||||
(in billions)
|
Equity
|
|
Fixed income, including money market
|
|
Multi-asset
(1)
|
|
Total
|
|
Equity
|
|
Fixed income, including money market
|
|
Multi-asset
(1)
|
|
Total
|
||||||||||||||||
Assets under management at beginning of period
|
$
|
579.3
|
|
|
$
|
135.8
|
|
|
$
|
299.1
|
|
|
$
|
1,014.2
|
|
|
$
|
564.1
|
|
|
$
|
134.4
|
|
|
$
|
292.6
|
|
|
$
|
991.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net cash flows
|
3.8
|
|
|
1.2
|
|
|
2.6
|
|
|
7.6
|
|
|
6.6
|
|
|
3.3
|
|
|
9.0
|
|
|
18.9
|
|
||||||||
Net market appreciation and income
(2)
|
20.5
|
|
|
(.6
|
)
|
|
2.4
|
|
|
22.3
|
|
|
32.9
|
|
|
(1.3
|
)
|
|
2.5
|
|
|
34.1
|
|
||||||||
Change during the period
|
24.3
|
|
|
.6
|
|
|
5.0
|
|
|
29.9
|
|
|
39.5
|
|
|
2.0
|
|
|
11.5
|
|
|
53.0
|
|
||||||||
Assets under management at June 30, 2018
|
$
|
603.6
|
|
|
$
|
136.4
|
|
|
$
|
304.1
|
|
|
$
|
1,044.1
|
|
|
$
|
603.6
|
|
|
$
|
136.4
|
|
|
$
|
304.1
|
|
|
$
|
1,044.1
|
|
|
As of
|
||||||||||
(in billions)
|
12/31/17
|
|
3/31/18
|
|
6/30/18
|
||||||
Target date retirement U.S. mutual funds
|
$
|
168.4
|
|
|
$
|
162.6
|
|
|
$
|
161.4
|
|
Target date separately managed retirement accounts
|
1.7
|
|
|
4.9
|
|
|
5.2
|
|
|||
Target date retirement trusts
|
63.7
|
|
|
72.4
|
|
|
77.6
|
|
|||
|
$
|
233.8
|
|
|
$
|
239.9
|
|
|
$
|
244.2
|
|
|
Three months ended
|
|
|
|
|
|||||||||
(in millions, except per-share data)
|
6/30/2017
|
|
6/30/2018
|
|
Dollar
change |
|
Percentage change
|
|||||||
U.S. GAAP basis
|
|
|
|
|
|
|
|
|||||||
Investment advisory fees
|
$
|
1,046.0
|
|
|
$
|
1,214.4
|
|
|
$
|
168.4
|
|
|
16.1
|
%
|
Net revenues
|
$
|
1,186.0
|
|
|
$
|
1,345.0
|
|
|
$
|
159.0
|
|
|
13.4
|
%
|
Operating expenses
|
$
|
678.4
|
|
|
$
|
750.3
|
|
|
$
|
71.9
|
|
|
10.6
|
%
|
Net operating income
|
$
|
507.6
|
|
|
$
|
594.7
|
|
|
$
|
87.1
|
|
|
17.2
|
%
|
Non-operating income
(2)
|
$
|
112.0
|
|
|
$
|
34.1
|
|
|
$
|
(77.9
|
)
|
|
n/m
|
|
Net income attributable to T. Rowe Price Group
|
$
|
373.9
|
|
|
$
|
448.9
|
|
|
$
|
75.0
|
|
|
20.1
|
%
|
Diluted earnings per common share
|
$
|
1.50
|
|
|
$
|
1.77
|
|
|
$
|
.27
|
|
|
18.0
|
%
|
Weighted average common shares outstanding assuming dilution
|
243.0
|
|
|
247.4
|
|
|
4.4
|
|
|
1.8
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
Adjusted non-GAAP basis
(2)
|
|
|
|
|
|
|
|
|||||||
Operating expenses
|
$
|
676.7
|
|
|
$
|
745.3
|
|
|
$
|
68.6
|
|
|
10.1
|
%
|
Net income attributable to T. Rowe Price Group
|
$
|
317.9
|
|
|
$
|
472.8
|
|
|
$
|
154.9
|
|
|
48.7
|
%
|
Diluted earnings per common share
|
$
|
1.28
|
|
|
$
|
1.87
|
|
|
$
|
.59
|
|
|
46.1
|
%
|
|
|
|
|
|
|
|
|
|||||||
Assets under management (in billions)
|
|
|
|
|
|
|
|
|||||||
Average assets under management
|
$
|
885.9
|
|
|
$
|
1,036.5
|
|
|
$
|
150.6
|
|
|
17.0
|
%
|
Ending assets under management
|
$
|
903.6
|
|
|
$
|
1,044.1
|
|
|
$
|
140.5
|
|
|
15.5
|
%
|
|
Three months ended
|
|
Q2 2018 vs. Q2 2017
|
|||||||||||
(in millions)
|
6/30/2017
|
|
6/30/2018
|
|
Dollar change
|
|
Percentage change
|
|||||||
Investment advisory fees
|
|
|
|
|
|
|
|
|||||||
U.S. mutual funds
|
$
|
756.4
|
|
|
$
|
846.9
|
|
|
$
|
90.5
|
|
|
12.0
|
%
|
Subadvised and separate accounts and other investment products
|
289.6
|
|
|
367.5
|
|
|
77.9
|
|
|
26.9
|
%
|
|||
|
1,046.0
|
|
|
1,214.4
|
|
|
168.4
|
|
|
16.1
|
%
|
|||
Administrative, distribution, and servicing fees
|
|
|
|
|
|
|
|
|||||||
Administrative fees
|
103.6
|
|
|
95.1
|
|
|
(8.5
|
)
|
|
(8.2
|
)%
|
|||
Distribution and servicing fees
|
36.4
|
|
|
35.5
|
|
|
(.9
|
)
|
|
(2.5
|
)%
|
|||
|
140.0
|
|
|
130.6
|
|
|
(9.4
|
)
|
|
(6.7
|
)%
|
|||
Net revenues
|
$
|
1,186.0
|
|
|
$
|
1,345.0
|
|
|
$
|
159.0
|
|
|
13.4
|
%
|
|
Three months ended
|
|
|
|
|
|||||||||
(in millions)
|
6/30/2017
|
|
6/30/2018
|
|
Dollar change
|
|
Percentage change
|
|||||||
Compensation and related costs
|
$
|
403.8
|
|
|
$
|
456.0
|
|
|
$
|
52.2
|
|
|
12.9
|
%
|
Distribution and servicing
|
64.8
|
|
|
71.6
|
|
|
6.8
|
|
|
10.5
|
%
|
|||
Advertising and promotion
|
18.7
|
|
|
19.0
|
|
|
0.3
|
|
|
1.6
|
%
|
|||
Product-related costs
|
34.4
|
|
|
37.1
|
|
|
2.7
|
|
|
7.8
|
%
|
|||
Technology, occupancy, and facility costs
|
85.6
|
|
|
93.2
|
|
|
7.6
|
|
|
8.9
|
%
|
|||
General, administrative, and other
|
71.1
|
|
|
73.4
|
|
|
2.3
|
|
|
3.2
|
%
|
|||
Total operating expenses
|
$
|
678.4
|
|
|
$
|
750.3
|
|
|
$
|
71.9
|
|
|
10.6
|
%
|
|
Three months ended
|
|
|
||||||||
(in millions)
|
6/30/2017
|
|
|
6/30/2018
|
|
|
Dollar change
|
||||
Net gains from non-consolidated T. Rowe Price investment products
|
|
|
|
|
|
||||||
Net realized gains on dispositions of available-for-sale investments
|
$
|
30.3
|
|
|
$
|
—
|
|
|
$
|
(30.3
|
)
|
Ordinary and capital gain dividend distributions
|
3.5
|
|
|
11.4
|
|
|
7.9
|
|
|||
Market gains (losses) on equity method and other investments at fair value
|
8.4
|
|
|
(10.7
|
)
|
|
(19.1
|
)
|
|||
Gains reclassified from accumulated other comprehensive income upon transfer of an available-for-sale sponsored investment portfolio to sponsored investment portfolios held as trading
|
23.6
|
|
|
—
|
|
|
(23.6
|
)
|
|||
Net gain recognized upon deconsolidation
|
—
|
|
|
.5
|
|
|
.5
|
|
|||
Dividends and market gains on investment products used to hedge the supplemental savings plan liability
|
—
|
|
|
5.0
|
|
|
5.0
|
|
|||
Total net gains from non-consolidated T. Rowe Price investment products
|
65.8
|
|
|
6.2
|
|
|
(59.6
|
)
|
|||
Other investment income
|
5.6
|
|
|
11.2
|
|
|
5.6
|
|
|||
Total earned on investments
|
71.4
|
|
|
17.4
|
|
|
(54.0
|
)
|
|||
Net gains (losses) on consolidated sponsored investment portfolios
|
39.4
|
|
|
19.1
|
|
|
(20.3
|
)
|
|||
Other income, including foreign currency gains and losses
|
1.2
|
|
|
(2.4
|
)
|
|
(3.6
|
)
|
|||
Non-operating income
|
$
|
112.0
|
|
|
$
|
34.1
|
|
|
$
|
(77.9
|
)
|
|
Three months ended
|
||||||
(in millions)
|
6/30/2017
|
|
6/30/2018
|
||||
Operating expenses reflected in net operating income
|
$
|
(2.7
|
)
|
|
$
|
(3.1
|
)
|
Net investment income reflected in non-operating income
|
39.4
|
|
|
19.1
|
|
||
Impact on income before taxes
|
$
|
36.7
|
|
|
$
|
16.0
|
|
|
|
|
|
||||
Net income attributable to our interest in the consolidated T. Rowe Price investment products
|
$
|
20.6
|
|
|
$
|
5.3
|
|
Net income attributable to redeemable non-controlling interests (unrelated third-party investors)
|
16.1
|
|
|
10.7
|
|
||
|
$
|
36.7
|
|
|
$
|
16.0
|
|
Statutory U.S. federal income tax rate
|
|
21.0
|
%
|
Impact of nonrecurring charge related to U.S. tax reform
|
|
1.7
|
%
|
Impact of nonrecurring charge related to new Maryland state tax legislation
|
|
.7
|
%
|
State income taxes for current year, net of federal income tax benefits
(1)
|
|
4.4
|
%
|
Net income attributable to redeemable non-controlling interests
|
|
(.2
|
)%
|
Net excess tax benefits from stock-based compensation plans activity
|
|
(2.4
|
)%
|
Other items
|
|
.3
|
%
|
Effective income tax rate
|
|
25.5
|
%
|
|
Six months ended
|
|
|
|
|
|||||||||
(in millions, except per-share data)
|
6/30/2017
|
|
6/30/2018
|
|
Dollar
change
|
|
Percentage change
|
|||||||
|
|
|
|
|
|
|
|
|||||||
U.S. GAAP basis
|
|
|
|
|
|
|
|
|||||||
Investment advisory fees
|
$
|
2,038.7
|
|
|
$
|
2,403.6
|
|
|
$
|
364.9
|
|
|
17.9
|
%
|
Net revenues
|
$
|
2,318.6
|
|
|
$
|
2,673.0
|
|
|
$
|
354.4
|
|
|
15.3
|
%
|
Operating expenses
|
$
|
1,289.3
|
|
|
$
|
1,494.5
|
|
|
$
|
205.2
|
|
|
15.9
|
%
|
Net operating income
|
$
|
1,029.3
|
|
|
$
|
1,178.5
|
|
|
$
|
149.2
|
|
|
14.5
|
%
|
Non-operating income
(1)
|
$
|
227.0
|
|
|
$
|
50.2
|
|
|
$
|
(176.8
|
)
|
|
n/m
|
|
Net income attributable to T. Rowe Price Group
|
$
|
759.8
|
|
|
$
|
902.6
|
|
|
$
|
142.8
|
|
|
18.8
|
%
|
Diluted earnings per share on common share
|
$
|
3.04
|
|
|
$
|
3.55
|
|
|
$
|
.51
|
|
|
16.8
|
%
|
Weighted average common shares outstanding assuming dilution
|
244.2
|
|
|
248.6
|
|
|
4.4
|
|
|
1.8
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
Adjusted non-GAAP basis
(2)
|
|
|
|
|
|
|
|
|||||||
Operating expenses
|
$
|
1,335.8
|
|
|
$
|
1,486.3
|
|
|
$
|
150.5
|
|
|
11.3
|
%
|
Net income attributable to T. Rowe Price Group
|
$
|
615.1
|
|
|
$
|
918.4
|
|
|
$
|
303.3
|
|
|
49.3
|
%
|
Diluted earnings per share on common share
|
$
|
2.46
|
|
|
$
|
3.61
|
|
|
1.15
|
|
|
46.7
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
Assets under management (in billions)
|
|
|
|
|
|
|
|
|||||||
Average assets under management
|
$
|
865.6
|
|
|
$
|
1,031.0
|
|
|
$
|
165.4
|
|
|
19.1
|
%
|
Ending assets under management
|
$
|
903.6
|
|
|
$
|
1,044.1
|
|
|
$
|
140.5
|
|
|
15.5
|
%
|
|
Six months ended
|
|
|
|
|
|||||||||
(in millions)
|
6/30/2017
|
|
6/30/2018
|
|
Dollar change
|
|
Percentage change
|
|||||||
Investment advisory fees
|
|
|
|
|
|
|
|
|||||||
U.S. mutual funds
|
$
|
1,473.8
|
|
|
$
|
1,679.8
|
|
|
$
|
206.0
|
|
|
14.0
|
%
|
Subadvised and separate accounts and other investment products
|
564.9
|
|
|
723.8
|
|
|
158.9
|
|
|
28.1
|
%
|
|||
|
2,038.7
|
|
|
2,403.6
|
|
|
364.9
|
|
|
17.9
|
%
|
|||
Administrative, distribution, and servicing fees
|
|
|
|
|
|
|
|
|||||||
Administrative fees
|
208.3
|
|
|
197.3
|
|
|
(11.0
|
)
|
|
(5.3
|
)%
|
|||
Distribution and servicing fees
|
71.6
|
|
|
72.1
|
|
|
.5
|
|
|
.7
|
%
|
|||
|
279.9
|
|
|
269.4
|
|
|
(10.5
|
)
|
|
(3.8
|
)%
|
|||
Net revenues
|
$
|
2,318.6
|
|
|
$
|
2,673.0
|
|
|
$
|
354.4
|
|
|
15.3
|
%
|
|
Six months ended
|
|
|
|
|
|||||||||
(in millions)
|
6/30/2017
|
|
6/30/2018
|
|
Dollar change
|
|
Percentage change
|
|||||||
Compensation and related costs
|
$
|
801.2
|
|
|
$
|
897.4
|
|
|
$
|
96.2
|
|
|
12.0
|
%
|
Distribution and servicing
|
124.6
|
|
|
141.9
|
|
|
17.3
|
|
|
13.9
|
%
|
|||
Advertising and promotion
|
44.4
|
|
|
43.6
|
|
|
(.8
|
)
|
|
(1.8
|
)%
|
|||
Product-related costs
|
73.0
|
|
|
79.2
|
|
|
6.2
|
|
|
8.5
|
%
|
|||
Technology, occupancy, and facility costs
|
168.4
|
|
|
187.3
|
|
|
18.9
|
|
|
11.2
|
%
|
|||
General, administrative, and other
|
127.7
|
|
|
145.1
|
|
|
17.4
|
|
|
13.6
|
%
|
|||
Nonrecurring insurance recoveries related to Dell appraisal rights matter
(1)
|
(50.0
|
)
|
|
—
|
|
|
50.0
|
|
|
n/m
|
|
|||
Total operating expenses
|
$
|
1,289.3
|
|
|
$
|
1,494.5
|
|
|
$
|
205.2
|
|
|
15.9
|
%
|
|
Six months ended
|
|
|
||||||||
(in millions)
|
6/30/2017
|
|
6/30/2018
|
|
Dollar change
|
||||||
Net gains from non-consolidated T. Rowe Price investment products
|
|
|
|
|
|
||||||
Net realized gains on dispositions of available-for-sale investments
|
$
|
77.9
|
|
|
$
|
—
|
|
|
$
|
(77.9
|
)
|
Ordinary and capital gain dividend distributions
|
5.9
|
|
|
19.3
|
|
|
13.4
|
|
|||
Market gains (losses) on equity method and other investments at fair value
|
18.7
|
|
|
(13.6
|
)
|
|
(32.3
|
)
|
|||
Gains reclassified from accumulated other comprehensive income upon transfer of an available-for-sale sponsored investment portfolio to sponsored investment portfolios held as trading
|
23.6
|
|
|
—
|
|
|
(23.6
|
)
|
|||
Net gain recognized upon deconsolidation
|
—
|
|
|
3.6
|
|
|
3.6
|
|
|||
Dividends and market gains on investment products used to hedge the supplemental savings plan liability
|
—
|
|
|
7.9
|
|
|
7.9
|
|
|||
Total net gains from non-consolidated T. Rowe Price investment products
|
126.1
|
|
|
17.2
|
|
|
(108.9
|
)
|
|||
Other investment income
|
10.1
|
|
|
14.6
|
|
|
4.5
|
|
|||
Total earned on investments
|
136.2
|
|
|
31.8
|
|
|
(104.4
|
)
|
|||
Net gains (losses) on consolidated sponsored investment portfolios
|
88.3
|
|
|
19.9
|
|
|
(68.4
|
)
|
|||
Other income, including foreign currency gains and losses
|
2.5
|
|
|
(1.5
|
)
|
|
(4.0
|
)
|
|||
Non-operating income
|
$
|
227.0
|
|
|
$
|
50.2
|
|
|
$
|
(176.8
|
)
|
|
Six months ended
|
||||||
(in millions)
|
6/30/2017
|
|
6/30/2018
|
||||
Operating expenses reflected in net operating income
|
$
|
(5.3
|
)
|
|
$
|
(5.6
|
)
|
Net investment income reflected in non-operating income
|
88.3
|
|
|
19.9
|
|
||
Impact on income before taxes
|
$
|
83.0
|
|
|
$
|
14.3
|
|
|
|
|
|
||||
Net income attributable to our interest in the consolidated T. Rowe Price investment products
|
$
|
52.4
|
|
|
$
|
1.8
|
|
Net income attributable to redeemable non-controlling interests (unrelated third-party investors)
|
30.6
|
|
|
12.5
|
|
||
Impact on income before taxes
|
$
|
83.0
|
|
|
$
|
14.3
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
(in millions, except per-share amounts)
|
6/30/2017
|
|
6/30/2018
|
|
6/30/2017
|
|
6/30/2018
|
||||||||
Operating expenses, GAAP basis
|
$
|
678.4
|
|
|
$
|
750.3
|
|
|
$
|
1,289.3
|
|
|
$
|
1,494.5
|
|
Non-GAAP adjustments:
|
|
|
|
|
|
|
|
||||||||
Expenses of consolidated T. Rowe Price investment products, net of elimination of its related management and administrative fees
(1)
|
(1.7
|
)
|
|
(1.7
|
)
|
|
(3.5
|
)
|
|
(2.5
|
)
|
||||
Compensation expense related to market valuation changes in the supplemental savings plan liability
(2)
|
—
|
|
|
(3.3
|
)
|
|
|
|
(5.7
|
)
|
|||||
Insurance recoveries related to Dell appraisal rights matter
(4)
|
—
|
|
|
—
|
|
|
50.0
|
|
|
—
|
|
||||
Adjusted operating expenses
|
$
|
676.7
|
|
|
$
|
745.3
|
|
|
$
|
1,335.8
|
|
|
$
|
1,486.3
|
|
|
|
|
|
|
|
|
|
||||||||
Net income attributable to T. Rowe Price Group, GAAP basis
|
$
|
373.9
|
|
|
$
|
448.9
|
|
|
$
|
759.8
|
|
|
$
|
902.6
|
|
Non-GAAP adjustments:
|
|
|
|
|
|
|
|
||||||||
Net income of consolidated T. Rowe Price investment products, net of redeemable non-controlling interests
(1)
|
(20.6
|
)
|
|
(5.3
|
)
|
|
(52.4
|
)
|
|
(1.8
|
)
|
||||
Non-operating income of investments designated as an economic hedge of the supplemental savings plan liability less related compensation expense
(2)
|
—
|
|
|
(1.7
|
)
|
|
—
|
|
|
(2.2
|
)
|
||||
Other non-operating income
(3)
|
(72.6
|
)
|
|
(2.0
|
)
|
|
(138.7
|
)
|
|
(14.4
|
)
|
||||
Insurance recoveries related to Dell appraisal rights matter
(4)
|
—
|
|
|
—
|
|
|
(50.0
|
)
|
|
—
|
|
||||
Income tax impacts of non-GAAP adjustments
(5)
|
37.2
|
|
|
4.2
|
|
|
96.4
|
|
|
5.5
|
|
||||
Nonrecurring charge related to enactment of U.S. tax reform
(6)
|
—
|
|
|
20.8
|
|
|
—
|
|
|
20.8
|
|
||||
Nonrecurring charge related to enactment of Maryland state tax legislation
(7)
|
—
|
|
|
7.9
|
|
|
—
|
|
|
7.9
|
|
||||
Adjusted net income attributable to T. Rowe Price Group
|
$
|
317.9
|
|
|
$
|
472.8
|
|
|
$
|
615.1
|
|
|
$
|
918.4
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings per common share, GAAP basis
|
$
|
1.50
|
|
|
$
|
1.77
|
|
|
$
|
3.04
|
|
|
$
|
3.55
|
|
Non-GAAP adjustments:
|
|
|
|
|
|
|
|
||||||||
Consolidated T. Rowe Price investment products
(1)
|
(.05
|
)
|
|
(.01
|
)
|
|
(.13
|
)
|
|
—
|
|
||||
Non-operating income of investments designated as an economic hedge of the supplemental savings plan liability less related compensation expense
(2)
|
—
|
|
|
—
|
|
|
—
|
|
|
(.01
|
)
|
||||
Other non-operating income
(3)
|
(.17
|
)
|
|
—
|
|
|
(.33
|
)
|
|
(.04
|
)
|
||||
Insurance recoveries related to Dell appraisal rights matter
(4)
|
—
|
|
|
—
|
|
|
(.12
|
)
|
|
—
|
|
||||
Nonrecurring charge related to enactment of U.S. tax reform
(6)
|
—
|
|
|
.08
|
|
|
—
|
|
|
.08
|
|
||||
Nonrecurring charge related to enactment of Maryland state tax legislation
(7)
|
—
|
|
|
.03
|
|
|
—
|
|
|
.03
|
|
||||
Adjusted diluted earnings per common share
(8)
|
$
|
1.28
|
|
|
$
|
1.87
|
|
|
$
|
2.46
|
|
|
$
|
3.61
|
|
|
Three months ended
|
|
|
Six months ended
|
||||||||||||
|
6/30/2017
|
|
6/30/2018
|
|
|
6/30/2017
|
|
6/30/2018
|
||||||||
Operating expenses before eliminations
|
$
|
2.7
|
|
|
$
|
3.1
|
|
|
|
$
|
5.3
|
|
|
$
|
5.6
|
|
Operating expenses eliminated in consolidation
|
(1.0
|
)
|
|
(1.4
|
)
|
|
|
(1.8
|
)
|
|
(3.1
|
)
|
||||
Total operating expenses, net of eliminations
|
$
|
1.7
|
|
|
$
|
1.7
|
|
|
|
$
|
3.5
|
|
|
$
|
2.5
|
|
|
Three months ended
|
|
|
Six months ended
|
||||||||||||
|
6/30/2017
|
|
6/30/2018
|
|
|
6/30/2017
|
|
6/30/2018
|
||||||||
Net gains on investments
|
$
|
39.4
|
|
|
$
|
19.1
|
|
|
|
$
|
88.3
|
|
|
$
|
19.9
|
|
Operating expenses
|
(2.7
|
)
|
|
(3.1
|
)
|
|
|
(5.3
|
)
|
|
(5.6
|
)
|
||||
Net income
|
36.7
|
|
|
16.0
|
|
|
|
83.0
|
|
|
14.3
|
|
||||
Less: net income attributable to redeemable non-controlling interests
|
16.1
|
|
|
10.7
|
|
|
|
30.6
|
|
|
12.5
|
|
||||
T. Rowe Price Group's portion of net income
|
$
|
20.6
|
|
|
$
|
5.3
|
|
|
|
$
|
52.4
|
|
|
$
|
1.8
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
6/30/2017
|
|
6/30/2018
|
|
6/30/2017
|
|
6/30/2018
|
||||||||
Non-operating income of investments designated as an economic hedge of supplemental savings plan liability
|
$
|
—
|
|
|
$
|
5.0
|
|
|
$
|
—
|
|
|
$
|
7.9
|
|
Compensation expense from market valuation changes in supplemental savings plan liability
|
—
|
|
|
(3.3
|
)
|
|
—
|
|
|
(5.7
|
)
|
||||
Non-operating income of investments designated as an economic hedge of supplemental savings plan liability less compensation expense
|
$
|
—
|
|
|
$
|
1.7
|
|
|
$
|
—
|
|
|
$
|
2.2
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
6/30/2017
|
|
6/30/2018
|
|
6/30/2017
|
|
6/30/2018
|
||||||||
Total non-operating income
|
$
|
112.0
|
|
|
$
|
34.1
|
|
|
$
|
227.0
|
|
|
$
|
50.2
|
|
Less: net investment gains of consolidated T. Rowe Price investment products
|
39.4
|
|
|
19.1
|
|
|
88.3
|
|
|
19.9
|
|
||||
Less: non-operating income from investments designated as an economic hedge of supplemental savings plan liability
|
—
|
|
|
5.0
|
|
|
—
|
|
|
7.9
|
|
||||
Less: investment gains earned on cash and discretionary investments
|
—
|
|
|
8.0
|
|
|
—
|
|
|
8.0
|
|
||||
Total other non-operating income
|
$
|
72.6
|
|
|
$
|
2.0
|
|
|
$
|
138.7
|
|
|
$
|
14.4
|
|
(in millions)
|
|
12/31/2017
|
|
6/30/2018
|
||||
Cash and cash equivalents
|
|
$
|
1,902.7
|
|
|
$
|
1,484.4
|
|
Discretionary investments
|
|
780.3
|
|
|
1,709.1
|
|
||
Total cash and discretionary investments
|
|
2,683.0
|
|
|
3,193.5
|
|
||
Redeemable seed capital investments
|
|
1,188.9
|
|
|
1,201.1
|
|
||
Investments used to hedge the supplemental savings plan liability
|
|
268.2
|
|
|
288.3
|
|
||
Total cash and investments in T. Rowe Price products
|
|
$
|
4,140.1
|
|
|
$
|
4,682.9
|
|
(in millions)
|
Recurring dividend
|
|
Stock repurchases
|
|
Total cash returned to stockholders
|
||||||
2016
|
$
|
541.2
|
|
|
$
|
676.9
|
|
|
$
|
1,218.1
|
|
2017
|
562.6
|
|
|
458.1
|
|
|
1,020.7
|
|
|||
Six months ended 6/30/2018
|
348.8
|
|
|
450.3
|
|
|
799.1
|
|
|||
Total
|
$
|
1,452.6
|
|
|
$
|
1,585.3
|
|
|
$
|
3,037.9
|
|
(in millions)
|
|
Cash and cash equivalents
|
|
Investments
|
|
Net assets of consolidated T. Rowe Price investment products
|
|
6/30/2018
|
||||||||
Cash and discretionary investments
|
|
$
|
1,484.4
|
|
|
$
|
1,675.1
|
|
|
$
|
34.0
|
|
|
$
|
3,193.5
|
|
Seed capital investments
|
|
—
|
|
|
231.9
|
|
|
969.2
|
|
|
1,201.1
|
|
||||
Investment products used to hedge supplemental savings plan
|
|
—
|
|
|
288.3
|
|
|
—
|
|
|
288.3
|
|
||||
Total cash and investments in T. Rowe Price products attributable to T. Rowe Price Group
|
|
1,484.4
|
|
|
2,195.3
|
|
|
1,003.2
|
|
|
4,682.9
|
|
||||
Investment in UTI and other investments
|
|
—
|
|
|
264.2
|
|
|
—
|
|
|
264.2
|
|
||||
Total cash and investments attributable to T. Rowe Price Group
|
|
1,484.4
|
|
|
2,459.5
|
|
|
1,003.2
|
|
|
4,947.1
|
|
||||
Redeemable non-controlling interests
|
|
—
|
|
|
—
|
|
|
739.2
|
|
|
739.2
|
|
||||
As reported on condensed consolidated balance sheet at June 30, 2018
|
|
$
|
1,484.4
|
|
|
$
|
2,459.5
|
|
|
$
|
1,742.4
|
|
|
$
|
5,686.3
|
|
|
Six months ended
|
||||||||||||||||||||||||||||||
|
6/30/2017
|
|
6/30/2018
|
||||||||||||||||||||||||||||
(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
|
||||||||||||||||
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net income
|
$
|
759.8
|
|
|
$
|
83.0
|
|
|
$
|
(52.4
|
)
|
|
$
|
790.4
|
|
|
$
|
902.6
|
|
|
$
|
14.3
|
|
|
$
|
(1.8
|
)
|
|
$
|
915.1
|
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Depreciation and amortization of property and equipment
|
71.9
|
|
|
—
|
|
|
—
|
|
|
71.9
|
|
|
74.7
|
|
|
—
|
|
|
—
|
|
|
74.7
|
|
||||||||
Stock-based compensation expense
|
74.2
|
|
|
—
|
|
|
—
|
|
|
74.2
|
|
|
90.8
|
|
|
—
|
|
|
—
|
|
|
90.8
|
|
||||||||
Realized gains on dispositions of available-for-sale T. Rowe Price investment products
|
(77.9
|
)
|
|
—
|
|
|
—
|
|
|
(77.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Gains recognized upon transfer of an investment in a T. Rowe Price mutual fund from available-for-sale to held as trading
|
(23.6
|
)
|
|
—
|
|
|
—
|
|
|
(23.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Net gains recognized on investments
|
(76.3
|
)
|
|
—
|
|
|
52.4
|
|
|
(23.9
|
)
|
|
(7.2
|
)
|
|
—
|
|
|
1.8
|
|
|
(5.4
|
)
|
||||||||
Net investments in T. Rowe Price investment products to economically hedge supplemental savings plan liability
|
(129.0
|
)
|
|
—
|
|
|
—
|
|
|
(129.0
|
)
|
|
(13.7
|
)
|
|
—
|
|
|
—
|
|
|
(13.7
|
)
|
||||||||
Net change in trading securities held by consolidated T. Rowe Price investment products
|
—
|
|
|
(802.0
|
)
|
|
—
|
|
|
(802.0
|
)
|
|
—
|
|
|
(407.1
|
)
|
|
—
|
|
|
(407.1
|
)
|
||||||||
Other changes in assets and liabilities
|
277.0
|
|
|
(15.2
|
)
|
|
(2.7
|
)
|
|
259.1
|
|
|
281.4
|
|
|
(3.7
|
)
|
|
(2.8
|
)
|
|
274.9
|
|
||||||||
Net cash provided by (used in) operating activities
|
876.1
|
|
|
(734.2
|
)
|
|
(2.7
|
)
|
|
139.2
|
|
|
1,328.6
|
|
|
(396.5
|
)
|
|
(2.8
|
)
|
|
929.3
|
|
||||||||
Net cash provided by (used in) investing activities
|
114.1
|
|
|
(45.9
|
)
|
|
69.4
|
|
|
137.6
|
|
|
(1,040.7
|
)
|
|
(21.7
|
)
|
|
118.4
|
|
|
(944.0
|
)
|
||||||||
Net cash provided by (used in) financing activities
|
(652.9
|
)
|
|
784.4
|
|
|
(66.7
|
)
|
|
64.8
|
|
|
(706.2
|
)
|
|
433.6
|
|
|
(115.6
|
)
|
|
(388.2
|
)
|
||||||||
Effect of exchange rate changes on cash and cash equivalents of consolidated T. Rowe Price investment products
|
—
|
|
|
3.8
|
|
|
—
|
|
|
3.8
|
|
|
—
|
|
|
(6.6
|
)
|
|
—
|
|
|
(6.6
|
)
|
||||||||
Net change in cash and cash equivalents during period
|
337.3
|
|
|
8.1
|
|
|
—
|
|
|
345.4
|
|
|
(418.3
|
)
|
|
8.8
|
|
|
—
|
|
|
(409.5
|
)
|
||||||||
Cash and cash equivalents at beginning of year
|
1,204.9
|
|
|
65.6
|
|
|
—
|
|
|
1,270.5
|
|
|
1,902.7
|
|
|
103.1
|
|
|
—
|
|
|
2,005.8
|
|
||||||||
Cash and cash equivalents at end of period
|
$
|
1,542.2
|
|
|
$
|
73.7
|
|
|
$
|
—
|
|
|
$
|
1,615.9
|
|
|
$
|
1,484.4
|
|
|
$
|
111.9
|
|
|
$
|
—
|
|
|
$
|
1,596.3
|
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
Item 4.
|
Controls and Procedures.
|
Item 1.
|
Legal Proceedings.
|
Item 1A.
|
Risk Factors.
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds.
|
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
|
|||||
April
|
|
1,338,212
|
|
|
$
|
105.83
|
|
|
1,295,239
|
|
|
20,954,201
|
|
May
|
|
153,638
|
|
|
$
|
119.99
|
|
|
—
|
|
|
20,954,201
|
|
June
|
|
81,435
|
|
|
$
|
124.89
|
|
|
—
|
|
|
20,954,201
|
|
Total
|
|
1,573,285
|
|
|
$
|
108.20
|
|
|
1,295,239
|
|
|
|
Item 5.
|
Other Information.
|
Item 6.
|
Exhibits.
|
3(i)
|
|
|
|
|
|
3(ii)
|
|
|
|
|
|
10.03
|
|
|
|
|
|
10.04
|
|
|
|
|
|
10.05
|
|
|
|
|
|
10.16.1
|
|
|
|
|
|
15
|
|
|
|
|
|
31(i).1
|
|
|
|
|
|
31(i).2
|
|
|
|
|
|
32
|
|
|
|
|
|
99.1
|
|
|
|
|
|
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 (File name: trow-20180630.xml).
|
|
|
|
|
|
101.SCH XBRL Taxonomy Extension Schema Document (File name: trow-20180630.xsd).
|
|
|
|
|
|
101.CAL XBRL Taxonomy Calculation Linkbase Document (File name: trow-20180630_cal.xml).
|
|
|
|
|
|
101.LAB XBRL Taxonomy Label Linkbase Document (File name: trow-20180630_lab.xml).
|
|
|
|
|
|
101.PRE XBRL Taxonomy Presentation Linkbase Document (File name: trow-20180630_pre.xml).
|
|
|
|
|
|
101.DEF XBRL Taxonomy Definition Linkbase Document (File name: trow-20180630_def.xml).
|
1.
|
I have reviewed this
Form 10-Q Quarterly Report
for the
quarterly period
ended
June 30, 2018
of T. Rowe Price Group, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
1.
|
I have reviewed this
Form 10-Q Quarterly Report
for the
quarterly period
ended
June 30, 2018
of T. Rowe Price Group, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|