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CONSOLIDATED T. ROWE PRICE INVESTMENT PRODUCTS | 9 Months Ended
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Sep. 30, 2021
Consolidated Sponsored Investment Portfolios [Abstract] |
CONSOLIDATED T. ROWE PRICE INVESTMENT PRODUCTS | CONSOLIDATED T. ROWE PRICE INVESTMENT PRODUCTS. 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. The following table details the net assets of the consolidated T. Rowe Price investment products:
| 9/30/2021 |  | 12/31/2020
(in millions) | Voting interest entities |  | Variable interest entities |  | Total |  | Voting interest entities |  | Variable interest entities |  | Total
Cash and cash equivalents(1) | $ | 6.2 |  |  | $ | 85.4 |  |  | $ | 91.6 |  |  | $ | 7.1 |  |  | $ | 97.7 |  |  | $ | 104.8 |
Investments(2) | 178.5 |  |  | 1,634.7 |  |  | 1,813.2 |  |  | 188.2 |  |  | 2,372.7 |  |  | 2,560.9 |
Other assets | 4.9 |  |  | 117.0 |  |  | 121.9 |  |  | 2.8 |  |  | 27.0 |  |  | 29.8 |
Total assets | 189.6 |  |  | 1,837.1 |  |  | 2,026.7 |  |  | 198.1 |  |  | 2,497.4 |  |  | 2,695.5 |
Liabilities | 29.8 |  |  | 62.3 |  |  | 92.1 |  |  | 10.0 |  |  | 47.7 |  |  | 57.7 |
Net assets | $ | 159.8 |  |  | $ | 1,774.8 |  |  | $ | 1,934.6 |  |  | $ | 188.1 |  |  | $ | 2,449.7 |  |  | $ | 2,637.8 |
Attributable to T. Rowe Price | $ | 126.4 |  |  | $ | 721.6 |  |  | $ | 848.0 |  |  | $ | 130.7 |  |  | $ | 945.4 |  |  | $ | 1,076.1 |
Attributable to redeemable non-controlling interests | 33.4 |  |  | 1,053.2 |  |  | 1,086.6 |  |  | 57.4 |  |  | 1,504.3 |  |  | 1,561.7 |
| $ | 159.8 |  |  | $ | 1,774.8 |  |  | $ | 1,934.6 |  |  | $ | 188.1 |  |  | $ | 2,449.7 |  |  | $ | 2,637.8 |
(1) Cash and cash equivalents includes $6.0 million at September 30, 2021, and $7.0 million at December 31, 2020, of T. Rowe Price money market mutual funds. (2) Investments include $44.5 million at September 30, 2021, and $26.9 million at December 31, 2020 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- and nine-months ended September 30, 2021 and 2020, are reflected in our unaudited condensed consolidated statements of income as follows:
| Three months ended
| 9/30/2021 |  | 9/30/2020
(in millions) | Voting interest entities |  | Variable interest entities |  | Total |  | Voting interest entities |  | Variable interest entities |  | Total
Operating expenses reflected in net operating income | $ | (.1) |  |  | $ | (2.7) |  |  | $ | (2.8) |  |  | $ | (.7) |  |  | $ | (3.7) |  |  | $ | (4.4) |
Net investment income (loss) reflected in non-operating income (loss) | .7 |  |  | (17.8) |  |  | (17.1) |  |  | 13.1 |  |  | 88.1 |  |  | 101.2 |
Impact on income before taxes | $ | .6 |  |  | $ | (20.5) |  |  | $ | (19.9) |  |  | $ | 12.4 |  |  | $ | 84.4 |  |  | $ | 96.8 |
Net income (loss) attributable to T. Rowe Price | $ | .5 |  |  | $ | (.6) |  |  | $ | (.1) |  |  | $ | 7.0 |  |  | $ | 34.4 |  |  | $ | 41.4 |
Net income (loss) attributable to redeemable non-controlling interests | .1 |  |  | (19.9) |  |  | (19.8) |  |  | 5.4 |  |  | 50.0 |  |  | 55.4 |
| $ | .6 |  |  | $ | (20.5) |  |  | $ | (19.9) |  |  | $ | 12.4 |  |  | $ | 84.4 |  |  | $ | 96.8 |
| Nine months ended
| 9/30/2021 |  | 9/30/2020
(in millions) | Voting interest entities |  | Variable interest entities |  | Total |  | Voting interest entities |  | Variable interest entities |  | Total
Operating expenses reflected in net operating income | $ | (.4) |  |  | $ | (8.7) |  |  | $ | (9.1) |  |  | $ | (1.2) |  |  | $ | (10.5) |  |  | $ | (11.7) |
Net investment income (loss) reflected in non-operating income | 14.1 |  |  | 61.5 |  |  | 75.6 |  |  | (5.7) |  |  | 19.0 |  |  | 13.3 |
Impact on income before taxes | $ | 13.7 |  |  | $ | 52.8 |  |  | $ | 66.5 |  |  | $ | (6.9) |  |  | $ | 8.5 |  |  | $ | 1.6 |
Net income (loss) attributable to T. Rowe Price | $ | 8.8 |  |  | $ | 35.1 |  |  | $ | 43.9 |  |  | $ | (2.7) |  |  | $ | (.1) |  |  | $ | (2.8) |
Net income (loss) attributable to redeemable non-controlling interests | 4.9 |  |  | 17.7 |  |  | 22.6 |  |  | (4.2) |  |  | 8.6 |  |  | 4.4 |
| $ | 13.7 |  |  | $ | 52.8 |  |  | $ | 66.5 |  |  | $ | (6.9) |  |  | $ | 8.5 |  |  | $ | 1.6 |
The operating expenses of the consolidated investment products are reflected in general, administrative and other expenses. In preparing our unaudited condensed consolidated financial statements, we eliminated operating expenses of $1.6 million and $2.7 million for the three months ended September 30, 2021 and 2020, respectively, against the investment advisory and administrative fees earned from these products. Operating expenses eliminated for the nine months ended September 30, 2021 and 2020, were $4.0 million and $7.3 million, respectively. The net investment income (loss) reflected in non-operating income (loss) includes dividend and interest income as well as realized and unrealized gains and losses on the underlying securities held by the consolidated 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 nine months ended September 30, 2021 and 2020.
| Nine months ended
| 9/30/2021 |  | 9/30/2020
(in millions) | Voting interest entities |  | Variable interest entities |  | Total |  | Voting interest entities |  | Variable interest entities |  | Total
Net cash provided by (used in) operating activities | $ | (109.1) |  |  | $ | 127.7 |  |  | $ | 18.6 |  |  | $ | (105.7) |  |  | $ | (241.0) |  |  | $ | (346.7) |
Net cash used in investing activities | (11.9) |  |  | (3.7) |  |  | (15.6) |  |  | (23.4) |  |  | (25.7) |  |  | (49.1) |
Net cash provided by (used in) financing activities | 120.1 |  |  | (132.7) |  |  | (12.6) |  |  | 124.4 |  |  | 269.5 |  |  | 393.9 |
Effect of exchange rate changes on cash and cash equivalents of consolidated T. Rowe Price investment products | — |  |  | (3.6) |  |  | (3.6) |  |  | — |  |  | 3.4 |  |  | 3.4 |
Net change in cash and cash equivalents during period | (.9) |  |  | (12.3) |  |  | (13.2) |  |  | (4.7) |  |  | 6.2 |  |  | 1.5 |
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 end of period | $ | 6.2 |  |  | $ | 85.4 |  |  | $ | 91.6 |  |  | $ | 5.2 |  |  | $ | 72.8 |  |  | $ | 78.0 |
The net cash provided by financing activities during the nine months ended September 30, 2021 and 2020 includes $35.3 million and $95.2 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.
| 9/30/2021 |  | 12/31/2020
(in millions) | Level 1 |  | Level 2 |  | Level 1 |  | Level 2
Assets |  |  |  |  |  |  |
Cash equivalents | $ | 6.0 |  |  | $ | — |  |  | $ | 7.0 |  |  | $ | — |
Equity securities | 278.9 |  |  | 239.7 |  |  | 308.0 |  |  | 708.0 |
Fixed income securities | — |  |  | 1,231.1 |  |  | — |  |  | 1,411.3 |
Other investments | 8.8 |  |  | 54.7 |  |  | 2.6 |  |  | 131.0 |
| $ | 293.7 |  |  | $ | 1,525.5 |  |  | $ | 317.6 |  |  | $ | 2,250.3 |
Liabilities | $ | (.3) |  |  | $ | (10.8) |  |  | $ | (.4) |  |  | $ | (18.8) |

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