Item 1. Financial Statements.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions, except share data)

						9/30/2021						12/31/2020
ASSETS
Cash and cash equivalents						$	3,418.5					$	2,151.7
Accounts receivable and accrued revenue						941.6						863.1
Investments						3,330.3						3,250.8
Assets of consolidated T. Rowe Price investment products ($1,837.1 million at September 30, 2021 and $2,497.4 million at December 31, 2020, related to variable interest entities)						2,026.7						2,695.5
Operating lease assets						106.2						117.6
Property and equipment, net						719.1						695.4
Goodwill						665.7						665.7
Other assets						242.6						219.2
Total assets						$	11,450.7					$	10,659.0
LIABILITIES
Accounts payable and accrued expenses						$	309.8					$	187.7
Liabilities of consolidated T. Rowe Price investment products ($62.3 million at September 30, 2021 and $47.7 million at December 31, 2020, related to variable interest entities)						92.1						57.7
Operating lease liabilities						142.1						154.1
Accrued compensation and related costs						697.5						133.6
Income taxes payable						60.7						85.0
Supplemental savings plan liability						799.8						772.2
Total liabilities						2,102.0						1,390.3
Commitments and contingent liabilities
Redeemable non-controlling interests						1,086.6						1,561.7
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 226,217,000 shares at September 30, 2021 and 227,965,000 at December 31, 2020						45.2						45.6
Additional capital in excess of par value						654.6						654.6
Retained earnings						7,591.7						7,029.8
Accumulated other comprehensive loss						(29.4)						(23.0)
Total permanent stockholders’ equity						8,262.1						7,707.0
Total liabilities, redeemable non-controlling interests, and permanent stockholders’ equity						$	11,450.7					$	10,659.0

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												Nine months ended
			9/30/2021						9/30/2020						9/30/2021						9/30/2020
Revenues
Investment advisory fees			$	1,813.4					$	1,469.3					$	5,288.4					$	4,090.9
Administrative, distribution, and servicing fees			140.7						126.5						421.8						382.9
Net revenues			1,954.1						1,595.8						5,710.2						4,473.8
Operating expenses
Compensation and related costs			564.6						552.3						1,751.9						1,542.0
Distribution and servicing			96.0						73.5						274.3						201.2
Advertising and promotion			22.1						14.2						61.4						52.5
Product and recordkeeping related costs			70.3						36.8						154.6						118.0
Technology, occupancy, and facility costs			123.1						115.6						359.7						332.3
General, administrative, and other			81.8						74.5						260.8						238.0
Total operating expenses			957.9						866.9						2,862.7						2,484.0
Net operating income			996.2						728.9						2,847.5						1,989.8
Non-operating income (loss)
Net gains on investments			8.7						84.6						165.0						100.6
Net gains (losses) on consolidated investment products			(17.1)						101.2						75.7						13.3
Other income (loss)			(3.1)						5.8						(6.2)						(7.5)
Total non-operating income			(11.5)						191.6						234.5						106.4
Income before income taxes			984.7						920.5						3,082.0						2,096.2
Provision for income taxes			227.3						221.9						717.1						502.5
Net income			757.4						698.6						2,364.9						1,593.7
Less: net income (loss) attributable to redeemable non-controlling interests			(19.8)						55.4						22.6						4.4
Net income attributable to T. Rowe Price			$	777.2					$	643.2					$	2,342.3					$	1,589.3
Earnings per share on common stock of T. Rowe Price
Basic			$	3.34					$	2.75					$	10.04					$	6.73
Diluted			$	3.31					$	2.73					$	9.94					$	6.66

The accompanying notes are an integral part of these statements.

Page 3

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in millions)

			Three months ended												Nine months ended
			9/30/2021						9/30/2020						9/30/2021						9/30/2020
Net income			$	757.4					$	698.6					$	2,364.9					$	1,593.7
Other comprehensive income (loss)
Currency translation adjustments
Consolidated T. Rowe Price investment products - variable interest entities			(17.2)						33.4						(30.0)						24.2
Reclassification gains recognized in non-operating income upon deconsolidation of certain T. Rowe Price investment products			—						—						(2.6)						(.1)
Total currency translation adjustments of consolidated T. Rowe Price investment products - variable interest entities			(17.2)						33.4						(32.6)						24.1
Equity method investments			3.5						.1						2.4						(9.4)
Other comprehensive income (loss) before income taxes			(13.7)						33.5						(30.2)						14.7
Net deferred tax (expense) benefits			.8						(3.2)						3.6						(.5)
Total other comprehensive income (loss)			(12.9)						30.3						(26.6)						14.2
Total comprehensive income			744.5						728.9						2,338.3						1,607.9
Less: comprehensive income (loss) attributable to redeemable non-controlling interests			(32.0)						76.2						2.4						18.3
Total comprehensive income attributable to T. Rowe Price			$	776.5					$	652.7					$	2,335.9					$	1,589.6

The accompanying notes are an integral part of these statements.

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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

			Nine months ended
			9/30/2021						9/30/2020
Cash flows from operating activities
Net income			$	2,364.9					$	1,593.7
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization of property and equipment			151.1						144.0
Stock-based compensation expense			166.3						164.5
Net gains recognized on investments			(144.4)						(75.3)
Net (investments) redemptions in T. Rowe Price investment products used to economically hedge supplemental savings plan liability			28.1						(19.1)
Net change in securities held by consolidated T. Rowe Price investment products			(5.3)						(350.8)
Other changes in assets and liabilities			530.0						459.9
Net cash provided by operating activities			3,090.7						1,916.9
Cash flows from investing activities
Purchases of T. Rowe Price investment products			(47.3)						(240.3)
Dispositions of T. Rowe Price investment products			285.4						381.9
Net cash of T. Rowe Price investment products on deconsolidation			(15.6)						(49.1)
Additions to property and equipment			(178.7)						(155.4)
Other investing activity			13.8						9.8
Net cash provided by (used in) investing activities			57.6						(53.1)
Cash flows from financing activities
Repurchases of common stock			(493.1)						(1,158.5)
Common share issuances under stock-based compensation plans			33.3						76.2
Dividends paid to common stockholders of T. Rowe Price			(1,454.0)						(635.7)
Net subscriptions received from redeemable non-controlling interest holders			22.7						298.7
Net cash used in financing activities			(1,891.1)						(1,419.3)
Effect of exchange rate changes on cash and cash equivalents of consolidated T. Rowe Price investment products			(3.6)						3.4
Net change in cash and cash equivalents during period			1,253.6						447.9
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 $91.6 million at September 30, 2021, and $78.0 million at September 30, 2020, held by consolidated T. Rowe Price investment products			$	3,510.1					$	2,306.2

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 9/30/2021
			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 June 30, 2021			226,925						$	45.4					$	673.7					$	7,202.6					$	(28.7)					$	7,893.0					$	880.4
Net income			—						—						—						777.2						—						777.2						(19.8)
Other comprehensive income (loss), net of tax			—						—						—						—						(.7)						(.7)						(12.2)
Dividends declared ($1.08 per share)			—						—						—						(250.7)						—						(250.7)						—
Shares issued upon option exercises			321						—						9.0						—						—						9.0						—
Net shares issued upon vesting of restricted stock units			5						—						(.5)						—						—						(.5)						—
Stock-based compensation expense			—						—						52.3						—						—						52.3						—
Restricted stock units issued as dividend equivalents			—						—						.4						(.2)						—						.2						—
Common shares repurchased			(1,034)						(.2)						(80.3)						(137.2)						—						(217.7)						—
Net redemptions from T. Rowe Price investment products			—						—						—						—						—						—						(292.8)
Net consolidations of T. Rowe Price investment products			—						—						—						—						—						—						531.0
Balances at September 30, 2021			226,217						$	45.2					$	654.6					$	7,591.7					$	(29.4)					$	8,262.1					$	1,086.6
			Three months ended 9/30/2020
			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 June 30, 2020			226,990						$	45.4					$	654.6					$	6,102.9					$	(52.2)					$	6,750.7					$	1,090.1
Net income			—						—						—						643.2						—						643.2						55.4
Other comprehensive income (loss), net of tax			—						—						—						—						9.5						9.5						20.8
Dividends declared ($0.90 per share)			—						—						—						(210.2)						—						(210.2)						—
Shares issued upon option exercises			492						.1						25.9						—						—						26.0						—
Net shares issued upon vesting of restricted stock units			17						—						(1.6)						—						—						(1.6)						—
Stock-based compensation expense			—						—						52.8						—						—						52.8						—
Restricted stock units issued as dividend equivalents			—						—						.1						(.1)						—						—						—
Common shares repurchased			(1,124)						(.2)						(77.2)						(64.5)						—						(141.9)						—
Net subscriptions into T. Rowe Price investment products			—						—						—						—						—						—						217.9
Net deconsolidations of T. Rowe Price investment products			—						—						—						—						—						—						(44.0)
Balances at September 30, 2020			226,375						$	45.3					$	654.6					$	6,471.3					$	(42.7)					$	7,128.5					$	1,340.2

(1) Accumulated other comprehensive income.

The accompanying notes are an integral part of these statements.

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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(shares in thousands; dollars in millions)

			Nine months ended 9/30/2021
			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, 2020			227,965						$	45.6					$	654.6					$	7,029.8					$	(23.0)					$	7,707.0					$	1,561.7
Net income			—						—						—						2,342.3						—						2,342.3						22.6
Other comprehensive income (loss), net of tax			—						—						—						—						(6.4)						(6.4)						(20.2)
Dividends declared ($3.24 per share)			—						—						—						(754.8)						—						(754.8)						—
Special cash dividend declared ($3.00 per share)			—						—						—						(699.5)						—						(699.5)						—
Shares issued upon option exercises			1,083						.2						38.6						—						—						38.8						—
Restricted shares issued, net of shares withheld for taxes			4						—						—						—						—						—						—
Net shares issued upon vesting of restricted stock units			54						—						(4.8)						—						—						(4.8)						—
Stock-based compensation expense			—						—						166.2						—						—						166.2						—
Restricted stock units issued as dividend equivalents			—						—						.6						(.7)						—						(.1)						—
Common shares repurchased			(2,889)						(.6)						(200.6)						(325.4)						—						(526.6)						—
Net subscriptions into T. Rowe Price investment products			—						—						—						—						—						—						6.1
Net deconsolidations of T. Rowe Price investment products			—						—						—						—						—						—						(483.6)
Balances at September 30, 2021			226,217						$	45.2					$	654.6					$	7,591.7					$	(29.4)					$	8,262.1					$	1,086.6
			Nine months ended 9/30/2020
			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			—						—						—						1,589.3						—						1,589.3						4.4
Other comprehensive income (loss), net of tax			—						—						—						—						.3						.3						13.9
Dividends declared ($2.70 per share)			—						—						—						(635.3)						—						(635.3)						—
Shares issued upon option exercises			1,856						.4						82.8						—						—						83.2						—
Restricted shares issued, net of shares withheld for taxes			8						—						—						—						—						—						—
Net shares issued upon vesting of restricted stock units			60						—						(4.8)						—						—						(4.8)						—
Forfeiture of restricted awards			—						—						—						—						—						—						—
Stock-based compensation expense			—						—						164.3						—						—						164.3						—
Restricted stock units issued as dividend equivalents			—						—						.2						(.2)						—						—						—
Common shares repurchased			(10,763)						(2.1)						(242.5)						(926.0)						—						(1,170.6)						—
Net subscriptions into T. Rowe Price investment products			—						—						—						—						—						—						307.8
Net deconsolidations of T. Rowe Price investment products			—						—						—						—						—						—						(106.9)
Balances at September 30, 2020			226,375						$	45.3					$	654.6					$	6,471.3					$	(42.7)					$	7,128.5					$	1,340.2

(1) Accumulated other comprehensive income.

The accompanying notes are an integral part of these statements.

Page 7

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 products. The other T. Rowe Price products 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. 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 and other multi-asset solutions for providers to implement.

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.

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.

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 Annual Report.

NEWLY ISSUED BUT NOT YET ADOPTED ACCOUNTING 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 8

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

Revenues earned under agreements with clients include:

			Three months ended 9/30/2021																								Three months ended 9/30/2020
									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			$	1,125.5					$	82.6					$	30.9					$	1,239.0					$	939.5					$	72.4					$	28.5					$	1,040.4
Subadvised funds, separate accounts, collective investment trusts, and other investment products			687.9						—						—						687.9						529.8						—						—						529.8
Other clients(1)			—						27.2						—						27.2						—						25.6						—						25.6
			$	1,813.4					$	109.8					$	30.9					$	1,954.1					$	1,469.3					$	98.0					$	28.5					$	1,595.8
			Nine months ended 9/30/2021																								Nine months ended 9/30/2020
									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			$	3,273.2					$	243.1					$	90.0					$	3,606.3					$	2,638.8					$	219.0					$	82.1					$	2,939.9
Subadvised funds, separate accounts, collective investment trusts, and other investment products			2,015.2						—						—						2,015.2						1,452.1						—						—						1,452.1
Other clients(1)			—						88.7						—						88.7						—						81.8						—						81.8
			$	5,288.4					$	331.8					$	90.0					$	5,710.2					$	4,090.9					$	300.8					$	82.1					$	4,473.8

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

Total net revenues earned from our related parties, specifically T. Rowe Price investment products, aggregate $1,599.5 million and $1,302.3 million for the three months ended September 30, 2021 and 2020, respectively. Total net revenues earned from these products during the nine months ended September 30, 2021 and 2020 aggregate $4,653.7 million and $3,652.8 million, respectively. Accounts receivable from these products aggregate to $581.6 million at September 30, 2021 and $523.4 million at December 31, 2020.

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

			Three months ended												Nine months ended
(in millions)			9/30/2021						9/30/2020						9/30/2021						9/30/2020
U.S. mutual funds
Equity			$	813.0					$	636.3					$	2,310.8					$	1,750.6
Fixed income, including money market			64.8						66.6						183.7						205.1
Multi-asset			247.7						236.6						778.7						683.1
			1,125.5						939.5						3,273.2						2,638.8
Subadvised funds, separate accounts, collective investment trusts, and other investment products
Equity			458.8						339.6						1,329.0						924.7
Fixed income, including money market			41.3						38.4						119.6						110.3
Multi-asset			187.8						151.8						566.6						417.1
			687.9						529.8						2,015.2						1,452.1
Total			$	1,813.4					$	1,469.3					$	5,288.4					$	4,090.9

Page 9

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

			Average during
			Three months ended												Nine months ended												As of
(in billions)			9/30/2021						9/30/2020						9/30/2021						9/30/2020						9/30/2021						12/31/2020
U.S. mutual funds
Equity			$	559.8					$	433.4					$	534.0					$	398.9					$	546.1					$	498.6
Fixed income, including money market			88.4						78.1						85.6						76.0						87.7						79.4
Multi-asset			232.8						197.3						228.5						189.1						227.2						216.6
			881.0						708.8						848.1						664.0						861.0						794.6
Subadvised funds, separate accounts, collective investment trusts, and other investment products
Equity			445.7						338.8						427.3						303.3						428.6						397.2
Fixed income, including money market			94.3						82.4						92.1						80.3						93.0						89.3
Multi-asset			227.7						162.9						213.8						151.3						229.7						189.4
			767.7						584.1						733.2						534.9						751.3						675.9
Total			$	1,648.7					$	1,292.9					$	1,581.3					$	1,198.9					$	1,612.3					$	1,470.5

Investors that we serve are primarily domiciled in the U.S.; investment advisory clients outside the U.S. account for 8.8%, 9.0% and 9.3% of our assets under management at September 30, 2021, June 30, 2021 and December 31, 2020, respectively.

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)			9/30/2021						12/31/2020
Investments held at fair value
T. Rowe Price investment products
Discretionary investments			$	1,610.2					$	1,647.7
Seed capital			236.6						169.5
Supplemental savings plan liability economic hedges			795.5						768.1
Investment partnerships and other investments			108.6						95.1
Equity method investments
T. Rowe Price investment products
Discretionary investments			254.1						242.9
Seed capital			164.9						178.6
23% investment in UTI Asset Management Company Limited (India)			156.6						145.5
Investment partnerships and other investments			2.8						2.4
U.S. Treasury note			1.0						1.0
Total			$	3,330.3					$	3,250.8

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.

During the three months ended September 30, 2021, net losses on investments included $4.6 million of net unrealized losses related to investments held at fair value that were still held at September 30, 2021. During the nine months ended September 30, 2021, net gains on investments included $83.7 million of net unrealized gains

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related to investments held at fair value that were still held at September 30, 2021. For the three and nine months ended September 30, 2020, net gains on investments included $75.5 million and $53.6 million, respectively, of net unrealized gains related to investments held at fair value that were still held at September 30, 2020.

During the nine months ended September 30, 2021 and 2020, 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 nine months ended September 30, 2021 and September 30, 2020, certain T. Rowe Price investment products 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												Nine months ended
(in millions)			9/30/2021						9/30/2020						9/30/2021						9/30/2020
Net increase (decrease) in assets of consolidated T. Rowe Price investment products			$	589.7					$	(132.2)					$	(727.6)					$	(278.4)
Net increase (decrease) in liabilities of consolidated T. Rowe Price investment products			$	7.1					$	(4.0)					$	(17.1)					$	(7.6)
Net increase (decrease) in redeemable non-controlling interests			$	531.0					$	(44.0)					$	(483.6)					$	(106.9)
Gains recognized upon deconsolidation			$	—					$	—					$	2.6					$	.1

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.

VARIABLE INTEREST ENTITIES.

Our investments at September 30, 2021 and December 31, 2020, 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)			9/30/2021						12/31/2020
Investment carrying values			$	193.4					$	144.7
Unfunded capital commitments			9.2						12.3
Accounts receivable			21.7						13.8
			$	224.3					$	170.8

The unfunded capital commitments totaling $9.2 million at September 30, 2021 and $12.3 million at December 31, 2020 relate primarily to 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.

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 not

value any investments using Level 3 inputs.

These levels are not necessarily an indication of the risk or liquidity associated with our investments. The following table summarizes our investments that are recognized in our unaudited condensed consolidated balance sheets

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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.

			9/30/2021												12/31/2020
(in millions)			Level 1						Level 2						Level 1						Level 2
T. Rowe Price investment products
Cash equivalents held in money market funds			2,966.7						$	—					$	1,931.1					$	—
Discretionary investments			1,610.2						—						1,647.7						—
Seed capital			216.2						20.4						156.6						12.9
Supplemental savings plan liability economic hedges			795.5						—						768.1						—
Other investments			.7						.1						.5						.6
Total			$	5,589.3					$	20.5					$	4,504.0					$	13.5

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 $107.8 million at September 30, 2021, and $94.0 million at December 31, 2020.

NOTE 5 – 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

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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.

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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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NOTE 6 – STOCKHOLDERS’ EQUITY.

Accounts payable and accrued expenses includes liabilities of $36.0 million at September 30, 2021, and $2.5 million at December 31, 2020 for common stock repurchases that settled during the first week of October 2021 and January 2021, respectively.

On June 14, 2021, the Board of Directors declared a special cash dividend of $3.00 per common share, or $699.8 million, that was paid on July 7, 2021 to stockholders of record as of the close of business on June 25, 2021.

NOTE 7 – STOCK-BASED COMPENSATION.

STOCK OPTIONS.

The following table summarizes the status of, and changes in, our stock options during the nine months ended September 30, 2021.

			Options						Weighted- average exercise price
Outstanding at December 31, 2020			4,379,663						$	71.67
Exercised			(1,403,996)						$	69.20
Outstanding at September 30, 2021			2,975,667						$	72.83
Exercisable at September 30, 2021			2,975,667						$	72.83

EFFECT OF SPECIAL CASH DIVIDEND.

As a result of the special cash dividend declared by the Board of Directors in June 2021, the anti-dilution provisions of our employee long-term incentive plans and non-employee director plans (collectively, the LTI plans) require an automatic adjustment to neutralize the effect of the special cash dividend. On the special cash dividend’s ex-dividend date (June 24, 2021), the number of shares authorized and the number of stock options outstanding and their exercise price were adjusted resulting in an increase of 50,607 stock options outstanding on the ex-dividend date, and no incremental compensation expense. In the table above, the number of options outstanding at December 31, 2020 was updated to reflect this adjustment.

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 nine months ended September 30, 2021.

			Restricted shares						Restricted stock units						Weighted-average fair value
Nonvested at December 31, 2020			7,412						6,367,059						$	116.51
Time-based grants			4,336						29,314						$	188.58
Dividend equivalents granted to non-employee directors			—						2,978						$	192.66
Vested			(7,412)						(99,091)						$	103.07
Forfeited			—						(137,390)						$	118.39
Nonvested at September 30, 2021			4,336						6,162,870						$	117.21

Nonvested at September 30, 2021, includes performance-based restricted stock units of 335,162. These nonvested performance-based restricted stock units include 188,612 units for which the performance period has lapsed, and the performance threshold has been met.

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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 September 30, 2021. 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)
Fourth quarter 2021			49.9
2022			116.4
2023 through 2026			95.8
Total			$	262.1

NOTE 8 – EARNINGS PER SHARE CALCULATIONS.

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

			Three months ended												Nine months ended
(in millions)			9/30/2021						9/30/2020						9/30/2021						9/30/2020
Net income attributable to T. Rowe Price			$	777.2					$	643.2					$	2,342.3					$	1,589.3
Less: net income allocated to outstanding restricted stock and stock unit holders			19.5						17.9						61.6						44.1
Net income allocated to common stockholders			$	757.7					$	625.3					$	2,280.7					$	1,545.2
Weighted-average common shares
Outstanding			226.9						227.0						227.2						229.5
Outstanding assuming dilution			229.1						229.4						229.4						231.9

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 September 30, 2021 and 2020 are presented in the table below.

						Three months ended 9/30/2021																		Three months ended 9/30/2020
(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						$	(43.8)					$	15.1					$	(28.7)					$	(54.4)					$	2.2					$	(52.2)
Other comprehensive income (loss) before reclassifications and income taxes						3.5						(5.0)						(1.5)						(2.0)						12.5						10.5
Net deferred tax benefits (income taxes)						(.4)						1.2						.8						2.1						(3.1)						(1.0)
Other comprehensive income (loss)						3.1						(3.8)						(.7)						.1						9.4						9.5
Balances at end of period						$	(40.7)					$	11.3					$	(29.4)					$	(54.3)					$	11.6					$	(42.7)

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The other comprehensive income (loss) in the table above excludes $(12.2) million and $20.8 million of other comprehensive income related to redeemable non-controlling interests held in our consolidated products for the three months ended September 30, 2021 and 2020, respectively.

The changes in each component of accumulated other comprehensive loss, including reclassification adjustments for the nine months ended September 30, 2021 and 2020, are presented in the table below.

									Nine months ended 9/30/2021																		Nine months ended 9/30/2020
(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									$	(43.6)					$	20.6					$	(23.0)					$	(46.9)					$	3.9					$	(43.0)
Other comprehensive income (loss) before reclassifications and income taxes									2.4						(9.8)						(7.4)						(9.4)						10.3						.9
Reclassification adjustments recognized in non-operating income									—						(2.6)						(2.6)						—						(.1)						(.1)
									2.4						(12.4)						(10.0)						(9.4)						10.2						.8
Net deferred tax benefits (income taxes)									.5						3.1						3.6						2.0						(2.5)						(.5)
Other comprehensive income (loss)									2.9						(9.3)						(6.4)						(7.4)						7.7						.3
Balances at end of period									$	(40.7)					$	11.3					$	(29.4)					$	(54.3)					$	11.6					$	(42.7)

The other comprehensive income (loss) in the table above excludes $20.2 million for the 2021 period and $13.9 million for the 2020 period of other comprehensive income (loss) related to redeemable non-controlling interests held in our consolidated products.

NOTE 10 – COMMITMENTS AND 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 have reached an agreement in principle for a settlement, which will be presented to the court for approval. The proposed settlement would not be material to T. Rowe Price 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.

NOTE 11 - SUBSEQUENT EVENTS.

PENDING ACQUISITION OF OAK HILL ADVISORS, L.P.

On October 28, 2021, we entered into a definitive purchase agreement to acquire 100% of the equity of Oak Hill Advisors, L.P. (OHA), and certain other entities that have common ownership. OHA is an alternative investment management firm with a focus on performing and distressed credit investments in North America, Europe and other geographies. Under the purchase agreement, we will acquire OHA for a purchase price of up to $4.2 billion, with $3.3 billion payable at closing, approximately 74% in cash and 26% in T. Rowe Price Group, Inc. common stock, and up to an additional $900 million in cash upon the achievement of certain business milestones beginning in 2025. The purchase price includes the retirement of OHA debt outstanding at closing. The completion of the acquisition is subject to various approvals and other customary closing conditions and is expected to close in the fourth quarter of 2021.

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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 September 30, 2021, the related condensed consolidated statements of income, comprehensive income, and stockholders’ equity for the three-month and nine-month periods ended September 30, 2021 and 2020, the related condensed consolidated statements of cash flows for the nine-month periods ended September 30, 2021 and 2020, 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, 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, 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, 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

October 28, 2021

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