Price T Rowe Group Inc 10-Q for FY2021 Q1

Price T Rowe Group Inc (TROW)

10-Q 2021-04-29 For: 2021-03-31

Added on April 08, 2026

About this 10-Q

Price T Rowe Group Inc filed this 10-Q on April 29, 2021, covering the quarter ended March 31, 2021 (FY2021 Q1).

Headline figures

Quarter ended March 31, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $1.83B; up 24.9% from $1.46B a year earlier
Net income: $749.4M; up 118.4% from net income of $343.1M a year earlier
Diluted EPS: $3.17; up 124.8% from $1.41 a year earlier

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Maryland						52-2264646
(State of incorporation)						(I.R.S. Employer Identification No.)


Common stock, $.20 par value per share	TROW	The NASDAQ Stock Market LLC
(title of security)	(ticker symbol)	(Name of exchange on which registered)


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer (do not check if smaller reporting company)	☐	Smaller reporting company	☐
		Emerging growth company	☐


	3/31/2021		12/31/2020
ASSETS
Cash and cash equivalents	$	2,830.1	$	2,151.7
Accounts receivable and accrued revenue	885.9		863.1
Investments	3,403.6		3,250.8
Assets of consolidated T. Rowe Price investment products ($1,782.9 million at March 31, 2021 and $2,497.4 million at December 31, 2020, related to variable interest entities)	1,946.8		2,695.5
Operating lease assets	110.2		117.6
Property and equipment, net	703.9		695.4
Goodwill	665.7		665.7
Other assets	218.2		219.2
Total assets	$	10,764.4	$	10,659.0

LIABILITIES
Accounts payable and accrued expenses	$	228.9	$	187.7
Liabilities of consolidated T. Rowe Price investment products ($49.0 million at March 31, 2021 and $47.7 million at December 31, 2020, related to variable interest entities)	53.7		57.7
Operating lease liabilities	146.0		154.1
Accrued compensation and related costs	260.8		133.6
Supplemental savings plan liability	769.9		772.2
Income taxes payable	284.0		85.0
Total liabilities	1,743.3		1,390.3

Commitments and contingent liabilities

Redeemable non-controlling interests	1,012.9		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 226,948,000 shares at March 31, 2021 and 227,965,000 at December 31, 2020	45.4		45.6
Additional capital in excess of par value	654.6		654.6
Retained earnings	7,338.7		7,029.8
Accumulated other comprehensive loss	(30.5)		(23.0)
Total permanent stockholders’ equity	8,008.2		7,707.0
Total liabilities, redeemable non-controlling interests, and permanent stockholders’ equity	$	10,764.4	$	10,659.0


	Three months ended
	3/31/2021		3/31/2020
Revenues
Investment advisory fees	$	1,687.8	$	1,327.8
Administrative, distribution, and servicing fees	139.0		134.8
Net revenues	1,826.8		1,462.6

Operating expenses
Compensation and related costs	583.5		440.7
Distribution and servicing	85.6		65.7
Advertising and promotion	18.9		24.9
Product-related costs	41.0		41.6
Technology, occupancy, and facility costs	117.3		105.4
General, administrative, and other	87.3		77.1

Total operating expenses	933.6		755.4

Net operating income	893.2		707.2

Non-operating income (loss)
Net gains (losses) on investments	68.6		(154.6)
Net gains (losses) on consolidated investment products	37.2		(330.3)
Other income (loss)	(3.7)		(15.4)
Total non-operating income (loss)	102.1		(500.3)

Income before income taxes	995.3		206.9
Provision for income taxes	230.5		40.3
Net income	764.8		166.6
Less: net income (loss) attributable to redeemable non-controlling interests	15.4		(176.5)
Net income attributable to T. Rowe Price Group	$	749.4	$	343.1

Earnings per share on common stock of T. Rowe Price Group
Basic	$	3.20	$	1.43
Diluted	$	3.17	$	1.41


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	Three months ended 3/31/2021
	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	—	—		—		749.4		—		749.4		15.4
Other comprehensive income (loss), net of tax	—	—		—		—		(7.5)		(7.5)		(11.8)
Dividends declared ($1.08 per share)	—	—		—		(252.3)		—		(252.3)		—

Shares issued upon option exercises	572	.1		25.3		—		—		25.4		—

Net shares issued upon vesting of restricted stock units	41	—		(3.7)		—		—		(3.7)		—

Stock-based compensation expense	—	—		57.5		—		—		57.5		—
Restricted stock units issued as dividend equivalents	—	—		.1		(.1)		—		—		—
Common shares repurchased	(1,630)	(.3)		(79.2)		(188.1)		—		(267.6)		—
Net subscriptions into T. Rowe Price investment products	—	—		—		—		—		—		187.5
Net deconsolidations of T. Rowe Price investment products	—	—		—		—		—		—		(739.9)
Balances at March 31, 2021	226,948	$	45.4	$	654.6	$	7,338.7	$	(30.5)	$	8,008.2	$	1,012.9

	Three months ended 3/31/2020
	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	—	—		—		343.1		—		343.1		(176.5)
Other comprehensive income (loss), net of tax	—	—		—		—		(6.1)		(6.1)		(17.2)
Dividends declared ($0.90 per share)	—	—		—		(214.7)		—		(214.7)		—

Shares issued upon option exercises	1,068	.2		41.1		—		—		41.3		—

Net shares issued upon vesting of restricted stock units	37	—		(3.0)		—		—		(3.0)		—

Stock-based compensation expense	—	—		58.3		—		—		58.3		—
Restricted stock units issued as dividend equivalents	—	—		.1		(.1)		—		—		—
Common shares repurchased	(8,334)	(1.6)		(96.5)		(788.9)		—		(887.0)		—
Net subscriptions into T. Rowe Price investment products	—	—		—		—		—		—		63.8
Net deconsolidations of T. Rowe Price investment products	—	—		—		—		—		—		(20.1)
Balances at March 31, 2020	227,985	$	45.6	$	654.6	$	5,782.9	$	(49.1)	$	6,434.0	$	971.0


	Three months ended
(in millions)	3/31/2021		3/31/2020
U.S. mutual funds
Equity	$	729.8	$	568.4
Fixed income, including money market	59.0		71.7
Multi-asset	261.4		236.1
	1,050.2		876.2
Subadvised funds, separate accounts, collective investment trusts, and other investment products
Equity	429.8		279.5
Fixed income, including money market	31.7		38.0
Multi-asset	176.1		134.1
	637.6		451.6
Total	$	1,687.8	$	1,327.8


	Average during
	Three months ended				As of
(in billions)	3/31/2021		3/31/2020			3/31/2021		12/31/2020
U.S. mutual funds
Equity	$	509.6	$	388.3		$	511.7	$	498.6
Fixed income, including money market	82.3		75.7			82.6		79.4
Multi-asset	222.6		190.3			222.1		216.6
	814.5		654.3			816.4		794.6
Subadvised funds, separate accounts, collective investment trusts, and other investment products
Equity	418.9		277.5			405.5		397.2
Fixed income, including money market	80.2		81.3			90.2		89.3
Multi-asset	195.2		149.6			205.9		189.4
	694.3		508.4			701.6		675.9
Total	$	1,508.8	$	1,162.7		$	1,518.0	$	1,470.5


	Options	Weighted- average exercise price
Outstanding at December 31, 2020	4,329,056	$	72.52



Exercised	(748,203)	$	72.28


Outstanding at March 31, 2021	3,580,853	$	72.57
Exercisable at March 31, 2021	3,580,853	$	72.57


	Restricted shares	Restricted stock units	Weighted-average fair value
Nonvested at December 31, 2020	7,412	6,367,059	$	116.51
Time-based grants	—	3,397	$	154.03

Dividend equivalents granted to non-employee directors	—	550	$	172.22
Vested	—	(64,942)	$	97.37
Forfeited	—	(19,489)	$	114.66
Nonvested at March 31, 2021	7,412	6,286,575	$	116.73


(in millions)

Second quarter 2021	$	56.9
Third quarter 2021	56.7
Fourth quarter 2021	50.2
2022	117.4
2023 through 2026	97.2
Total	$	378.4


	Assets under management				Net cash inflows (outflows) for three months ended
(in billions)	3/31/2021		12/31/2020		3/31/2021		3/31/2020
U.S. mutual funds	$	179.9	$	176.1	$	(3.8)	$	(5.0)
Collective investment trusts	160.3		145.4		8.1		5.6
Separately managed accounts	11.4		10.7		.2		.1
	$	351.6	$	332.2	$	4.5	$	.7


% of U.S. mutual funds that outperformed Morningstar median(1),(2)
	1 year	3 years	5 years	10 years
Equity	65%	68%	67%	87%
Fixed Income	71%	60%	55%	57%
Multi-Asset	94%	94%	91%	90%

All Funds	75%	73%	70%	78%

% of U.S. mutual funds that outperformed passive peer median(1),(3)
	1 year	3 years	5 years	10 years
Equity	57%	58%	62%	72%
Fixed Income	91%	59%	57%	60%
Multi-Asset	94%	91%	87%	86%

All Funds	78%	68%	68%	72%

% of composites that outperformed benchmarks(4)
	1 year	3 years	5 years	10 years
Equity	55%	60%	73%	78%
Fixed Income	87%	69%	80%	72%


All Composites	68%	63%	76%	76%


(in millions)	3/31/2021		12/31/2020
Investment carrying values	$	289.6	$	144.7
Unfunded capital commitments	11.3		12.3
Accounts receivable	60.7		13.8
	$	361.6	$	170.8


	3/31/2021						12/31/2020
(in millions)	Voting interest entities		Variable interest entities		Total		Voting interest entities		Variable interest entities		Total
Cash and cash equivalents(1)	$	3.0	$	80.7	$	83.7	$	7.1	$	97.7	$	104.8
Investments(2)	157.5		1,664.5		1,822.0		188.2		2,372.7		2,560.9
Other assets	3.4		37.7		41.1		2.8		27.0		29.8
Total assets	163.9		1,782.9		1,946.8		198.1		2,497.4		2,695.5
Liabilities	4.7		49.0		53.7		10.0		47.7		57.7
Net assets	$	159.2	$	1,733.9	$	1,893.1	$	188.1	$	2,449.7	$	2,637.8

Attributable to T. Rowe Price Group	$	96.4	$	783.8	$	880.2	$	130.7	$	945.4	$	1,076.1
Attributable to redeemable non-controlling interests	62.8		950.1		1,012.9		57.4		1,504.3		1,561.7
	$	159.2	$	1,733.9	$	1,893.1	$	188.1	$	2,449.7	$	2,637.8


	Three months ended
	3/31/2021						3/31/2020
(in millions)	Voting interest entities		Variable interest entities		Total		Voting interest entities		Variable interest entities		Total
Net cash provided by (used in) operating activities	$	(31.7)	$	(112.0)	$	(143.7)	$	11.3	$	(87.0)	$	(75.7)
Net cash used in investing activities	(9.1)		(18.2)		(27.3)		(.8)		—		(.8)
Net cash provided by financing activities	36.7		112.3		149.0		2.7		116.2		118.9
Effect of exchange rate changes on cash and cash equivalents of consolidated T. Rowe Price investment products	—		.9		.9		—		(1.2)		(1.2)
Net change in cash and cash equivalents during period	(4.1)		(17.0)		(21.1)		13.2		28.0		41.2
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	$	3.0	$	80.7	$	83.7	$	23.1	$	94.6	$	117.7


	3/31/2021				12/31/2020
(in millions)	Level 1		Level 2		Level 1		Level 2
Assets
Cash equivalents	$	2.8	$	—	$	7.0	$	—
Equity securities	225.7		449.9		308.0		708.0
Fixed income securities	—		1,107.2		—		1,411.3
Other investments	4.0		35.2		2.6		131.0
	$	232.5	$	1,592.3	$	317.6	$	2,250.3

Liabilities	$	(.4)	$	(9.9)	$	(.4)	$	(18.8)


AUM Weighted Performance
% of U.S. mutual funds AUM that outperformed Morningstar median(1),(2)
	1 year	3 years	5 years	10 years
Equity	63%	65%	83%	94%
Fixed Income	79%	58%	59%	60%
Multi-Asset	100%	96%	96%	96%

All Funds	73%	72%	84%	92%

% of U.S. mutual funds AUM that outperformed passive peer median(1),(3)
	1 year	3 years	5 years	10 years
Equity	51%	53%	81%	81%
Fixed Income	97%	52%	56%	64%
Multi-Asset	98%	96%	96%	96%

All Funds	66%	63%	83%	84%

% of composites AUM that outperformed benchmarks(4)
	1 year	3 years	5 years	10 years
Equity	51%	65%	72%	79%
Fixed Income	88%	54%	73%	72%


All Composites	57%	64%	73%	79%


	Three months ended				Q1 2021 vs. Q1 2020
(in millions, except per-share data)	3/31/2021		3/31/2020		$ change		% change
U.S. GAAP basis
Investment advisory fees	$	1,687.8	$	1,327.8	$	360.0	27.1	%
Net revenues	$	1,826.8	$	1,462.6	$	364.2	24.9	%
Operating expenses	$	933.6	$	755.4	$	178.2	23.6	%
Net operating income	$	893.2	$	707.2	$	186.0	26.3	%
Non-operating income (loss)(1)	$	102.1	$	(500.3)	$	602.4	n/m
Net income attributable to T. Rowe Price Group	$	749.4	$	343.1	$	406.3	118.4	%
Diluted earnings per common share	$	3.17	$	1.41	$	1.76	124.8	%
Weighted average common shares outstanding assuming dilution	230.0		236.8		(6.8)		(2.9)	%

Adjusted non-GAAP basis(2)
Operating expenses	$	909.2	$	817.9	$	91.3	11.2	%
Net operating income	$	918.9	$	647.2	$	271.7	42.0	%
Non-operating income (loss)(1)	$	13.7	$	(61.2)	$	74.9	n/m
Net income attributable to T. Rowe Price Group	$	712.0	$	454.3	$	257.7	56.7	%
Diluted earnings per common share	$	3.01	$	1.87	$	1.14	61.0	%

Assets under management (in billions)
Average assets under management	$	1,508.8	$	1,162.7	$	346.1	29.8	%
Ending assets under management	$	1,518.0	$	1,008.8	$	509.2	50.5	%


(in millions)	Recurring dividend		Stock repurchases		Total cash returned to stockholders
2019	$	733.6	$	708.8	$	1,442.4
2020	846.0		1,192.2		2,038.2
Three months ended 3/31/2021	252.3		267.6		519.9
Total	$	1,831.9	$	2,168.6	$	4,000.5


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
January	178,193	$	151.29	142,551	21,324,760
February	864,525	$	161.23	799,129	20,525,631
March	715,743	$	170.76	687,784	19,837,847
Total	1,758,461	$	164.10	1,629,464


Authorization Dates	1/1/2021	Total Number of Shares Purchased	Maximum Number of Shares that May Yet Be Purchased at 3/31/2021


February 2019	6,467,311	(1,629,464)	4,837,847
March 2020	15,000,000	—	15,000,000
	21,467,311	(1,629,464)	19,837,847


3(i)						Charter of T. Rowe Price Group, Inc., as reflected by Articles of Restatement dated June 20, 2018. (Incorporated by reference from Form 10-Q Quarterly Report filed on July 25, 2018.)

3(ii)						Amended and Restated By-Laws of T. Rowe Price Group, Inc. as of February 9 , 20 21 . (Incorporated by reference from Form 10 -K Annual Report filed on February 11 , 20 21 .)

15						Report from KPMG LLP, independent registered public accounting firm, re unaudited interim financial information.

31(i).1						Rule 13a-14(a) Certification of Principal Executive Officer.

31(i).2						Rule 13a-14(a) Certification of Principal Financial Officer.

32						Section 1350 Certifications.

99.1						Earnin gs release issued April 29, 202 1 , reporting our results of operations for the first quarter of 202 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 - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH						XBRL Taxonomy Extension Schema Document

101.CAL						XBRL Taxonomy Calculation Linkbase Document

101.LAB						XBRL Taxonomy Label Linkbase Document

101.PRE						XBRL Taxonomy Presentation Linkbase Document

101.DEF						XBRL Taxonomy Definition Linkbase Document