CONSOLIDATED T. ROWE PRICE INVESTMENT PRODUCTS.

The T. Rowe Price investment products that we consolidate in our consolidated financial statements are generally those products we provided initial seed capital at the time of their formation and have a controlling interest. Our T. Rowe Price U.S. mutual funds are considered voting interest entities, while those regulated outside the U.S. are considered variable interest entities.

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



	December 31, 2016						December 31, 2017
(in millions)	Voting interest entities		Variable interest entities		Total		Voting interest entities		Variable interest entities		Total
Cash and cash equivalents⁽¹⁾	$	10.3	$	55.3	$	65.6	$	7.1	$	96.0	$	103.1
Investments⁽²⁾	219.3		1,340.6		1,559.9		188.8		1,725.7		1,914.5
Other assets	4.8		50.2		55.0		12.9		17.9		30.8
Total assets	234.4		1,446.1		1,680.5		208.8		1,839.6		2,048.4
Liabilities	8.8		56.8		65.6		16.4		39.5		55.9
Net assets	$	225.6	$	1,389.3	$	1,614.9	$	192.4	$	1,800.1	$	1,992.5

Attributable to T. Rowe Price Group	$	156.1	$	771.6	$	927.7	$	131.6	$	868.1	$	999.7
Attributable to redeemable non-controlling interests	69.5		617.7		687.2		60.8		932.0		992.8
	$	225.6	$	1,389.3	$	1,614.9	$	192.4	$	1,800.1	$	1,992.5

⁽¹⁾Cash and cash equivalents includes $8.8 million and $6.2 million at December 31, 2016 and 2017, respectively, of investments in T. Rowe Price money market mutual funds.

⁽²⁾Investments include $4.2 million and $15.0 million at December 31, 2016 and 2017, respectively, of T. Rowe Price investment products.

Although we can redeem our net interest in these 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 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, are reflected in our consolidated statements of income as follows:



	2016									2017
(in millions)	Voting interest entities			Variable interest entities			Total			Voting interest entities			Variable interest entities			Total
Operating expenses reflected in net operating income	$	(1.6	)	$	(11.4	)	$	(13.0	)	$	(1.1	)	$	(11.2	)	$	(12.3	)
Net investment income reflected in non-operating income	22.5			98.6			121.1			18.8			175.1			193.9
Impact on income before taxes	$	20.9		$	87.2		$	108.1		$	17.7		$	163.9		$	181.6

Net income attributable to T. Rowe Price Group	$	15.0		$	54.1		$	69.1		$	13.3		$	84.9		$	98.2
Net income attributable to redeemable non-controlling interests	5.9			33.1			39.0			4.4			79.0			83.4
	$	20.9		$	87.2		$	108.1		$	17.7		$	163.9		$	181.6

The operating expenses of these consolidated products are reflected in other operating expenses. In preparing our consolidated financial statements, we eliminated operating expenses of $6.5 million and $5.6 million in 2016 and 2017, respectively, against the investment advisory and administrative fees earned from these products. The net investment income reflected in non-operating income includes dividend and interest income and realized and unrealized gains and losses on the underlying securities held by the consolidated T. Rowe Price investment products.

The table below details the impact of these consolidated investment products on the individual lines of our consolidated statements of cash flows as follows:



	2016									2017
(in millions)	Voting interest entities			Variable interest entities			Total			Voting interest entities			Variable interest entities			Total
Net cash provided by (used in) operating activities	$	(80.1	)	$	(1,086.5	)	$	(1,166.6	)	$	(33.0	)	$	(1,282.3	)	$	(1,315.3	)
Net cash provided by (used in) investing activities	21.6			19.8			41.4			(9.0		)	(55.2		)	(64.2		)
Net cash provided by (used in) financing activities	68.8			1,124.1			1,192.9			38.8			1,372.9			1,411.7
Effect of exchange rate changes on cash and cash equivalents of consolidated T. Rowe Price investment products	—			(2.1		)	(2.1		)	—			5.3			5.3
Net change in cash and cash equivalents during period	10.3			55.3			65.6			(3.2		)	40.7			37.5
Cash and cash equivalents at beginning of year	—			—			—			10.3			55.3			65.6
Cash and cash equivalents at end of year	$	10.3		$	55.3		$	65.6		$	7.1		$	96.0		$	103.1

The net cash provided by financing activities during 2016 and 2017, includes $277.9 million and $130.1 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. There have been no material transfers between the levels during 2016 and 2017. 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.



(in millions)	Level 1			Level 2
December 31, 2016
Assets
Cash equivalents	$	8.8		$	.8
Equity securities	281.8			325.3
Fixed income securities	—			918.1
Other investments	.4			34.3
	$	291.0		$	1,278.5

Liabilities	$	(.6	)	$	(13.6	)

December 31, 2017
Assets
Cash equivalents	$	6.2		$	.7
Equity securities	536.0			667.5
Fixed income securities	—			687.4
Other investments	1.3			22.3
	$	543.5		$	1,377.9

Liabilities	$	(.1	)	$	(13.7	)