XML 25 R14.htm IDEA: XBRL DOCUMENT v3.24.1.u1
CONSOLIDATED SPONSORED INVESTMENT PRODUCTS
 3 Months Ended
Mar. 31, 2024
Consolidated Sponsored Investment Portfolios [Abstract]  
CONSOLIDATED SPONSORED INVESTMENT PRODUCTS CONSOLIDATED SPONSORED INVESTMENT PRODUCTS.
The sponsored 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 and certain other sponsored products 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 sponsored investment products:
3/31/202412/31/2023
(in millions)
Voting
interest entities
Variable interest entities
Total
Voting
interest entities
Variable interest entities
Total
Cash and cash equivalents(1)
$36.6 $50.8 $87.4 $25.7 $51.5 $77.2 
Investments(2)
828.2 1,158.0 1,986.2 718.0 1,129.0 1,847.0 
Other assets23.2 20.4 43.6 11.2 23.9 35.1 
Total assets888.0 1,229.2 2,117.2 754.9 1,204.4 1,959.3 
Liabilities43.4 27.7 71.1 19.0 35.2 54.2 
Net assets$844.6 $1,201.5 $2,046.1 $735.9 $1,169.2 $1,905.1 
Attributable to T. Rowe Price Group$611.1 $758.3 $1,369.4 $589.9 $721.1 $1,311.0 
Attributable to redeemable non-controlling interests233.5 443.2 676.7 146.0 448.1 594.1 
$844.6 $1,201.5 $2,046.1 $735.9 $1,169.2 $1,905.1 
(1) Cash and cash equivalents includes $22.5 million at March 31, 2024, and $16.2 million at December 31, 2023, of investments in T. Rowe Price money market mutual funds.
(2) Investments include $6.4 million at March 31, 2024, and $6.2 million at December 31, 2023 of other sponsored investment products.

Although we can redeem our interest in these consolidated sponsored 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 sponsored investment products is limited to valuation changes associated with our 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 sponsored investment products for the three months ended March 31, 2024 and 2023, are reflected in our unaudited condensed consolidated statements of income as follows:
Three months ended
3/31/20243/31/2023
(in millions)Voting
interest entities		Variable interest entitiesTotalVoting
interest entities		Variable interest entitiesTotal
Operating expenses reflected in net operating income$(0.8)$(1.5)$(2.3)$(1.7)$(2.3)$(4.0)
Net investment income (loss) reflected in non-operating income (loss)33.4 38.9 72.3 6.9 38.9 45.8 
Impact on income before taxes$32.6 $37.4 $70.0 $5.2 $36.6 $41.8 
Net income (loss) attributable to T. Rowe Price Group$25.8 $24.6 $50.4 $3.7 $17.9 $21.6 
Net income (loss) attributable to redeemable non-controlling interests6.8 12.8 19.6 1.5 18.7 20.2 
$32.6 $37.4 $70.0 $5.2 $36.6 $41.8 

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 $1.2 million and $0.6 million for the three months ended March 31, 2024 and 2023, respectively, against the investment advisory and administrative fees earned from these products. The net investment income (loss) reflected in non-operating income (loss) includes dividend and interest income as well as realized and unrealized gains and losses on the underlying securities held by the consolidated sponsored investment products.
The table below details the impact of these consolidated investment products on the individual lines of our unaudited condensed consolidated statements of cash flows for the three months ended March 31, 2024 and 2023.
Three months ended
3/31/20243/31/2023
(in millions)
Voting
interest entities
Variable interest entities
Total
Voting
interest entities
Variable interest entities
Total
Net cash provided by (used in) operating activities$(61.8)$(33.9)$(95.7)$(12.4)$(147.2)$(159.6)
Net cash provided by (used in) investing activities— (0.1)(0.1)— (2.5)(2.5)
Net cash provided by (used in) financing activities72.7 34.1 106.8 4.4 129.2 133.6 
Effect of exchange rate changes on cash and cash equivalents of consolidated sponsored investment products— (0.8)(0.8)— 1.5 1.5 
Net change in cash and cash equivalents during period
10.9 (0.7)10.2 (8.0)(19.0)(27.0)
Cash and cash equivalents at beginning of year
25.7 51.5 77.2 16.2 102.9 119.1 
Cash and cash equivalents at end of period
$36.6 $50.8 $87.4 $8.2 $83.9 $92.1 

For the three months ended March 31, 2024, the net cash provided by or used in financing activities includes $19.4 million of net redemptions we made from the consolidated sponsored investment products and dividends received. For the three months ended March 31, 2023, the net cash provided by or used in financing activities included $4.4 million of net subscriptions we made into the consolidated sponsored 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 sponsored 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 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 an actively-traded market.

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 sponsored investment products using fair value measurements determined based on the differing levels of inputs.
3/31/202412/31/2023
(in millions)
Level 1
Level 2
Level 1
Level 2
Assets
  Cash equivalents$23.6 $12.0 $17.2 $8.0 
Equity securities430.8 228.7 365.1 213.6 
Fixed income securities— 1,308.9 — 1,241.9 
Other investments3.2 14.6 3.6 22.8 
$457.6 $1,564.2 $— $385.9 $1,486.3 
Liabilities$(4.9)$(7.5)$(5.1)$(16.2)