EX-99 3 earningsreleasetemplateq12.htm EX-99.1 Document

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NEWS RELEASE

T. ROWE PRICE GROUP REPORTS FIRST QUARTER 2024 RESULTS
BALTIMORE (April 26, 2024) - T. Rowe Price Group, Inc. (NASDAQ-GS: TROW) today reported its results for the first quarter of 2024.
▪Quarter-end assets under management of $1.54 trillion
▪Net client outflows of $8.0 billion
▪Diluted earnings per common share (EPS) of $2.49; Adjusted diluted EPS of $2.38
▪Returned $365 million to stockholders from the recurring quarterly dividend and stock repurchases
▪Increased the quarterly dividend for the 38th consecutive year

Rob Sharps, chief executive officer and president, commented, “Tailwinds from stronger-than-anticipated markets drove assets under management to $1.54 trillion as of March 31. Net outflows of $8 billion played out as we expected and were about half the level of net outflows we had in the first quarter of 2023. While outflows will persist in 2024, we continue to believe that there will be substantial improvement this year driven by higher sales and lower redemptions.”

Financial Highlights
Three months ended
(in millions, except per-share data)3/31/20243/31/2023
 Change(1)
12/31/2023
Change(1)
U.S. GAAP basis
Investment advisory fees$1,554.0 $1,391.8 11.7 %$1,461.2 6.4 %
Capital allocation-based income(2)
$47.1 $16.9 n/m$40.2 n/m
Net revenues$1,750.2 $1,537.6 13.8 %$1,642.0 6.6 %
Operating expenses$1,163.6 $1,053.4 10.5 %$1,254.8 (7.3)%
Net operating income$586.6 $484.2 21.1 %$387.2 51.5 %
Non-operating income (loss)$188.9 $135.4 n/m$259.7 n/m
Net income attributable to T. Rowe Price$573.8 $421.5 36.1 %$437.6 31.1 %
Diluted earnings per common share$2.49 $1.83 36.1 %$1.90 31.1 %
Weighted average common shares outstanding assuming dilution224.2 225.2 (0.4)%224.0 0.1 %
Adjusted basis(3)
Operating expenses$1,071.4 $1,022.5 4.8 %$1,150.7 (6.9)%
Operating expenses, excluding accrued carried interest related compensation$1,052.9 $1,013.9 3.8 %$1,135.5 (7.3)%
Net operating income$692.4 $528.0 31.1 %$502.7 37.7 %
Non-operating income (loss)$28.5 $30.8 (7.5)%$49.5 n/m
Net income attributable to T. Rowe Price$548.5 $389.4 40.9 %$394.7 39.0 %
Diluted earnings per common share$2.38 $1.69 40.8 %$1.72 38.4 %
Assets under management (in billions)
Average assets under management$1,484.4 $1,322.9 12.2 %$1,374.3 8.0 %
Ending assets under management$1,542.2 $1,341.7 14.9 %$1,444.5 6.8 %
Investment advisory effective fee rate in basis points (bps)42.1 42.7 (0.6)42.2 (0.1)
(1) n/m - the percentage change is not meaningful.
(2) Capital allocation-based income represents the change in accrued carried interest.
(3) See the reconciliation to the comparable U.S. GAAP measures at the end of this earnings release.

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Assets Under Management
During Q1 2024, assets under management (AUM) increased $97.7 billion to $1.54 trillion. The components of the change in AUM, by asset class, are shown in the table below.
Three months ended 3/31/2024
(in billions)EquityFixed income, including money market
Multi-asset(1)
Alternatives(2)
Total
Assets under management at beginning of period$743.6 $170.0 $483.0 $47.9 $1,444.5 
Net cash flows prior to manager-driven distributions(12.8)0.2 5.5 0.1 (7.0)
Manager-driven distributions— — — (1.0)(1.0)
Net cash flows(12.8)0.2 5.5 (0.9)(8.0)
Net market appreciation (depreciation) and income(3)
72.1 0.7 32.1 0.8 105.7 
Change during the period59.3 0.9 37.6 (0.1)97.7 
Assets under management at March 31, 2024
$802.9 $170.9 $520.6 $47.8 $1,542.2 
(1)     The underlying AUM of the multi-asset portfolios have been aggregated and presented in this category and not reported in the equity and fixed income columns.
(2) The alternatives asset class includes strategies authorized to invest more than 50% of its holdings in private credit, leveraged loans, mezzanine, real assets/CRE, structured products, stressed/distressed, non-investment grade CLOs, special situations, business development companies, or that have absolute return as its investment objective. Generally, only those strategies with longer than daily liquidity are included. Unfunded capital commitments as of March 31, 2024 were $12.0 billion and $11.6 billion as of December 31, 2023, and are not reflected in fee basis AUM above.
(3) Includes net distributions not reinvested of $0.2 billion.


Investors domiciled outside the United States accounted for 8.5% of the firm's AUM at March 31, 2024 and 8.6% at December 31, 2023.

The firm provides participant accounting and plan administration for retirement plans that invest in the firm's U.S. mutual funds and collective investment trusts, as well as funds managed outside of the firm's complex. As of March 31, 2024, the firm's assets under administration were $266 billion, of which $156 billion were assets we manage.

The firm offers non-discretionary advisory services through model delivery and multi-asset solutions for providers to implement. The firm records the revenue earned on these services in administrative fees. The assets under advisement in these portfolios, predominantly in the United States, were $13.1 billion at March 31, 2024.



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Financial Results Highlights
Net Revenues
Three months ended
(in millions)3/31/20243/31/2023Change12/31/2023Change
Investment advisory fees
  Equity$949.6 $833.9 13.9 %$864.3 9.9 %
  Fixed income, including money market100.6 102.4 (1.8)%98.2 2.4 %
  Multi-asset429.7 386.0 11.3 %400.6 7.3 %
  Alternatives74.1 69.5 6.6 %98.1 (24.5)%
Total investment advisory fees1,554.0 1,391.8 11.7 %1,461.2 6.4 %
Capital allocation-based income(1)
47.1 16.9 n/m40.2 n/m
Administrative, distribution, and servicing fees149.1 128.9 15.7 %140.6 6.0 %
Net revenues$1,750.2 $1,537.6 13.8 %$1,642.0 6.6 %
Average AUM (in billions):
  Equity$770.4 $687.0 12.1 %$704.9 9.3 %
  Fixed income, including money market169.5 169.6 (0.1)%168.4 0.7 %
  Multi-asset497.0 422.2 17.7 %453.6 9.6 %
  Alternatives47.5 44.1 7.7 %47.4 0.2 %
Average AUM$1,484.4 $1,322.9 12.2 %$1,374.3 8.0 %
Investment advisory effective fee rate (bps)42.1 42.7 (0.6)42.2 (0.1)
(1)The Capital allocation-based income represents the change in accrued carried interest. The percentage change is not meaningful (n/m).

Net revenues in Q1 2024 were $1.8 billion, an increase of 13.8% from Q1 2023 and an increase of 6.6% from Q4 2023. The Q1 2024 increase over Q1 2023 was primarily driven by increases in investment advisory fees on higher average AUM, higher performance-based fees earned predominantly on certain U.S. equity strategies, and higher capital allocation-based income. Performance-based fees earned in Q1 2024 were $17.6 million. In comparison to Q4 2023, the increase was primarily driven by an increase in investment advisory fees on higher average AUM.

▪The investment advisory fee annualized effective fee rate of 42.1 basis points in Q1 2024 decreased from 42.7 basis points earned in Q1 2023 and 42.2 basis points earned in Q4 2023. In comparison to Q1 2023, outflows and client transfers over the past year drove a mix shift in assets under management toward lower fee vehicles leading to an unfavorable impact on the annualized effective fee rate. These unfavorable impacts were slightly offset by strong market returns over the last year and $17.6 million in performance-based fees earned predominantly on certain U.S. equity strategies.

▪Capital allocation-based income in Q1 2024 of $47.1 million includes $59.5 million in additional accrued carried interest, partially offset by $12.4 million in acquisition-related, non-cash amortization and impairments. Comparatively, the Q1 2023 amount of $16.9 million includes $29.2 million in additional accrued carried interest, offset by $12.3 million in non-cash amortization and impairments.


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A portion of the capital allocation-based income is passed through as compensation and recognized in compensation and related costs with the unpaid amount reported as non-controlling interest on the consolidated balance sheet. For detail of the quarterly change in accrued carried interest, which is reported as part of investments on the consolidated balance sheet, and related non-controlling interest, see the applicable tables at the end of this release.

▪Administrative, distribution and servicing fees in Q1 2024 were $149.1 million, an increase of $20.2 million from Q1 2023 and $8.5 million from Q4 2023. The increase from Q1 2023 and Q4 2023 is primarily driven by higher fees related to transfer agent services provided to the T. Rowe Price mutual funds.

Operating Expenses

Three months ended
(in millions)3/31/20243/31/2023
 Change (1)
12/31/2023
 Change (1)
Compensation, benefits, and related costs$629.3 $593.3 6.1 %$649.4 (3.1)%
Acquisition-related retention agreements13.5 14.2 (4.9)%13.5 — %
Capital allocation-based income compensation(2)
13.2 3.5 n/m10.6 n/m
Supplemental savings plan53.0 42.5 n/m61.9 n/m
Total compensation and related costs709.0 653.5 8.5 %735.4 (3.6)%
Distribution and servicing81.9 71.5 14.5 %75.7 8.2 %
Advertising and promotion25.3 25.8 (1.9)%44.4 (43.0)%
Product and recordkeeping related costs75.0 72.1 4.0 %68.1 10.1 %
Technology, occupancy, and facility costs149.9 146.6 2.3 %171.6 (12.6)%
General, administrative, and other92.6 107.5 (13.9)%128.1 (27.7)%
Change in fair value of contingent consideration— (49.6)n/m(9.6)n/m
Acquisition-related amortization and impairment costs29.9 26.0 15.0 %41.1 (27.3)%
Total operating expenses$1,163.6 $1,053.4 10.5 %$1,254.8 (7.3)%
Total adjusted operating expenses(3)
$1,071.4 $1,022.5 4.8 %$1,150.7 (6.9)%
(1) n/m - the percentage change is not meaningful.
(2) Capital allocation-based income compensation represents the change in accrued carried interest compensation.
(3) See the reconciliation to the comparable U.S. GAAP measures at the end of this earnings release.

Operating expenses were $1,163.6 million, an increase of 10.5% from Q1 2023 and a decrease of 7.3% from Q4 2023. On a non-GAAP basis, adjusted operating expenses in Q1 2024 were $1,071.4 million, a 4.8% increase from Q1 2023 and a 6.9% decrease from Q4 2023. The increase in adjusted operating expenses from Q1 2023 was primarily driven by higher compensation and benefit costs along with higher accrued carried interest related compensation. The decrease in adjusted operating expenses from Q4 2023 was primarily driven by lower stock-based compensation, advertising and promotion costs, and general and administrative-related costs.

▪Compensation, benefits, and related costs in Q1 2024 of $629.3 million increased $36.0 million from Q1 2023 and decreased $20.1 million from Q4 2023. The increase from Q1 2023 was primarily due to a higher interim bonus accrual and higher salaries and related benefits, which were partially offset by higher capitalized labor. In comparison to Q4 2023, the decrease was primarily due to lower stock-based compensation related to the firm's annual equity grant awarded in December, partially offset by a higher

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interim bonus accrual. The firm employed 7,878 associates at March 31, 2024, a decrease of 0.4% from the end of 2023, and an increase of 0.5% from March 31, 2023.

▪Distribution and servicing costs in Q1 2024 of $81.9 million increased $10.4 million from Q1 2023 and $6.2 million from Q4 2023. The increases from prior periods were primarily driven by higher costs incurred to distribute products through U.S. intermediaries and higher average assets under management.

▪Advertising and promotion expenses in Q1 2024 of $25.3 million were relatively flat to Q1 2023, and decreased $19.1 million from Q4 2023. The seasonal media and agency costs in Q4 2023, along with increased investment in the firm's brand in Q4 2023, contributed to the decline in advertising and promotion costs in Q1 2024.

▪Technology, occupancy, and facility costs in Q1 2024 of $149.9 million increased $3.3 million from Q1 2023 and decreased $21.7 million from Q4 2023. The decrease from Q4 2023 is primarily due to accelerated amortization of certain technology assets not recurring in Q1 2024, as well as a non-recurring cost benefit realized in Q1 2024 related to the firm's new UK facility.

▪General, administrative, and other costs in Q1 2024 of $92.6 million decreased $14.9 million from Q1 2023 and $35.5 million from Q4 2023. The decrease from Q1 2023 was primarily due to lower research fee expense as the firm changed its approach to paying for research, consistent with regulations and general industry practice. In comparison to Q4 2023, the seasonal timing of certain general and administrative related costs, including professional fees and charitable contributions, was the primary driver of the decrease.


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Non-operating income (loss)
(in millions) Three months ended
3/31/20243/31/202312/31/2023
Net gains (losses) from non-consolidated T. Rowe Price investment products
Cash and discretionary investments
Dividend income$27.8 $20.2 $33.1 
Market-related gains (losses) and equity in earnings (losses)0.2 10.6 5.4 
  Total net gains (losses) from cash and discretionary investments28.0 30.8 38.5 
Seed capital investments
Dividend income— 0.5 0.6 
Market-related gains (losses) and equity in earnings (losses)23.5 15.1 25.3 
Net gains (losses) recognized upon deconsolidation— — (0.7)
Investments used to hedge the supplemental savings plan liability49.7 44.7 65.0 
Total net gains (losses) from non-consolidated T. Rowe Price investment products101.2 91.1 128.7 
Other investment income20.3 2.8 12.8 
Net gains (losses) on investments121.5 93.9 141.5 
Net gains (losses) on consolidated sponsored investment products72.3 45.4 119.2 
Other gains (losses), including foreign currency gains (losses)(4.9)(3.9)(1.0)
Non-operating income (loss)$188.9 $135.4 $259.7 

On a non-GAAP basis, non-operating income (loss) consists of investment gains/losses generated from the firm's cash and discretionary investment portfolio.

Income taxes

The following reconciles the statutory federal income tax rate to the firm's effective tax rate for the first quarter of 2024 and 2023:
Three months ended
3/31/20243/31/2023
Statutory U.S. federal income tax rate21.0 %21.0 %
State income taxes for current year, net of federal income tax benefits(1)
2.5 3.0 
Net (income) losses attributable to redeemable non-controlling interests(2)
(0.5)(0.4)
Net excess tax losses (benefits) from stock-based compensation plans activity(0.3)(0.4)
Valuation allowances0.5 4.3 
Other items0.3 1.2 
Effective income tax rate23.5 %28.7 %
(1) State income tax benefits are reflected in the total benefits for net income attributable to redeemable non-controlling interests and stock-based compensation plans activity.
(2) Net income attributable to redeemable non-controlling interest represents the portion of earnings held in the firm's consolidated investment products, which are not taxable to the firm despite being included in pre-tax income.

The firm's non-GAAP effective tax rate for Q1 2024 was 23.9%, compared with 30.3% for Q1 2023. The decrease in the firm's effective tax rate in Q1 2024 compared to Q1 2023 is primarily due to lower valuation allowances recognized. In Q1 2023, valuation allowances were recognized against cumulative UK-based deferred tax assets. The 2024 rate was also favorably impacted by changes in state income apportionment rules in certain jurisdictions.

The firm estimates that its effective tax rate for the full year 2024 will be in the range of 23% to 27% on a U.S. GAAP basis, and 23% to 26% on a non-GAAP basis.

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Other Matters

The financial results presented in this release are unaudited. The firm expects that it will file its Form 10-Q Quarterly Report for the first quarter of 2024 with the U.S. Securities and Exchange Commission later today. The Form 10-Q will include additional information on the firm's unaudited financial results at March 31, 2024.

Certain statements in this earnings release may represent “forward-looking information,” including information relating to anticipated changes in revenues, our operations, expenses, earnings, liquidity, cash flows and capital expenditures, industry or market conditions, amount or composition of assets under management, regulatory developments, changes in our effective fee rate, demand for and pricing of our products, new products and services, effective tax rates, net income and earnings per common share, future transactions, our strategic initiatives, general economic conditions, dividends, stock repurchases, and other market conditions. For a discussion concerning risks and other factors that could affect future results, see the firm's 2023 Annual Report on Form 10-K.

Founded in 1937, T. Rowe Price (NASDAQ - GS: TROW) helps individuals and institutions around the world achieve their long-term investment goals. As a large global asset management company known for investment excellence, retirement leadership, and independent proprietary research, the firm is built on a culture of integrity that puts client interests first. Clients rely on the award-winning firm for its retirement expertise and active management of equity, fixed income, alternatives, and multi-asset investment capabilities. T. Rowe Price has $1.54 trillion in assets under management as of March 31, 2024, and serves millions of clients globally. News and other updates can be found on Facebook, Instagram, LinkedIn, X, YouTube, and troweprice.com/newsroom.

Webcast Information
Chief Executive Officer and President, Rob Sharps, Chief Financial Officer, Jen Dardis, and Head of Global Distribution, Dee Sawyer, will provide an update on business performance, review financial results, and answer questions on a webcast to be held on Friday, April 26, 2024 from 8:00 - 8:45 AM (Eastern Time). Head of Global Investments, Eric Veiel, will join for the Q&A. To access the webcast or to obtain dial in instructions to ask a question, please visit investors.troweprice.com.

Supplemental materials will be available on the company's investor relations website shortly before the start of the call. A replay of the webcast will be available on the company's investor relations website shortly after the event.

CONTACTS:
Public RelationsInvestor Relations
Jamaal MobleyLinsley Carruth
410-345-3403410-345-3717
jamaal.mobley@troweprice.comlinsley.carruth@troweprice.com


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Unaudited Consolidated Statements of Income
(in millions, except per-share amounts)
Three months ended
Revenues3/31/20243/31/202312/31/2023
Investment advisory fees$1,554.0 $1,391.8 $1,461.2 
Capital allocation-based income47.1 16.9 40.2 
Administrative, distribution, and servicing fees149.1 128.9 140.6 
Net revenues1,750.2 1,537.6 1,642.0 
Operating expenses
Compensation, benefits, and related costs629.3 593.3 649.4 
Acquisition-related retention agreements13.5 14.2 13.5 
Capital allocation-based income compensation13.2 3.5 10.6 
Supplemental savings plan53.0 42.5 61.9 
Total compensation and related costs709.0 653.5 735.4 
Distribution and servicing81.9 71.5 75.7 
Advertising and promotion25.3 25.8 44.4 
Product and recordkeeping related costs75.0 72.1 68.1 
Technology, occupancy, and facility costs149.9 146.6 171.6 
General, administrative, and other92.6 107.5 128.1 
Change in fair value of contingent consideration— (49.6)(9.6)
Acquisition-related amortization and impairment costs 29.9 26.0 41.1 
Total operating expenses1,163.6 1,053.4 1,254.8 
Net operating income586.6 484.2 387.2 
Non-operating income (loss)
Net gains (losses) on investments121.5 93.9 141.5 
Net gains (losses) on consolidated sponsored investment products72.3 45.4 119.2 
Other gains (losses), including foreign currency gains (losses)(4.9)(3.9)(1.0)
   Total non-operating income (loss)188.9 135.4 259.7 
Income before income taxes775.5 619.6 646.9 
Provision for income taxes182.1 177.9 173.3 
Net income593.4 441.7 473.6 
Less: net income (loss) attributable to redeemable non-controlling interests19.6 20.2 36.0 
Net income attributable to T. Rowe Price573.8 421.5 437.6 
Less: net income allocated to outstanding restricted stock and stock unit holders15.8 10.5 11.7 
Net income allocated to T. Rowe Price common stockholders$558.0 $411.0 $425.9 
Earnings per share
Basic$2.50 $1.83 $1.91 
Diluted$2.49 $1.83 $1.90 
Weighted-average common shares
Outstanding223.6 224.4 223.5 
Outstanding assuming dilution224.2 225.2 224.0 

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The following table summarizes the cash flows for the three months ended 2024 that are attributable to T. Rowe Price Group, our consolidated sponsored investment products, and the related eliminations required.

Three months ended
3/31/2024
(in millions)
Cash flow attributable to T. Rowe Price
Cash flow attributable to consolidated T. Rowe Price investment products
Elims
As reported
Cash flows from operating activities
Net income (loss)$573.8 $70.0 $(50.4)$593.4 
Adjustments to reconcile net income (loss) to net cash provided by operating activities
Depreciation, amortization and impairments of property, equipment and software62.6 — — 62.6 
Amortization and impairment of acquisition-related assets and retention agreements50.8 — — 50.8 
Stock-based compensation expense58.4 — — 58.4 
Net (gains) losses recognized on investments(197.4)— 50.4 (147.0)
Net redemptions in sponsored investment products used to economically hedge supplemental savings plan liability15.1 — — 15.1 
Net change in trading securities held by consolidated sponsored investment products— (158.3)— (158.3)
Other changes176.2 (7.4)(6.5)162.3 
Net cash provided by (used in) operating activities739.5 (95.7)(6.5)637.3 
Net cash provided by (used in) investing activities(34.4)(0.1)25.9 (8.6)
Net cash provided by (used in) financing activities(355.2)106.8 (19.4)(267.8)
Effect of exchange rate changes on cash and cash equivalents of consolidated sponsored investment products— (0.8)— (0.8)
Net change in cash and cash equivalents during period349.9 10.2 — 360.1 
Cash and cash equivalents at beginning of year2,066.6 77.2 — 2,143.8 
Cash and cash equivalents at end of period$2,416.5 $87.4 $— $2,503.9 

Unaudited Condensed Consolidated Balance Sheet Information (in millions)As of
3/31/202412/31/2023
Cash and cash equivalents$2,416.5 $2,066.6 
Accounts receivable and accrued revenue883.0 807.9 
Investments2,588.7 2,554.7 
Assets of consolidated sponsored investment products2,117.2 1,959.3 
Operating lease assets234.9 241.1 
Property, equipment and software, net846.4 806.6 
Goodwill and intangible assets 3,124.6 3,150.1 
Other assets642.7 692.5 
Total assets12,854.0 12,278.8 
Supplemental savings plan liability927.4 895.0 
Total other liabilities, includes $71.1 at March 31, 2024, and $54.2 at December 31, 2023, from consolidated sponsored investment products
1,260.4 1,092.6 
Non-controlling interests*882.1 786.1 
Stockholders' equity attributable to T. Rowe Price Group, Inc., 223.5 common shares outstanding at
March 31, 2024 and 223.9 common shares outstanding at December 31, 2023
$9,784.1 $9,505.1 
* This includes both redeemable and non-redeemable non-controlling interest in consolidated entities.




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The following tables detail changes in our investments in affiliated private investment funds - carried interest and non-controlling interest in consolidated entities.
Three months ended
Investments in affiliated private investment funds - carried interest3/31/20243/31/202312/31/2023
Balance at beginning of period$519.9 $467.8 $578.2 
Capital allocation-based income:
Change in accrued carried interest59.5 29.2 51.1 
Acquisition-related amortization and impairments(12.4)(12.3)(10.9)
Net distributions(52.7)(0.9)(98.5)
Balance at end of period
$514.3 $483.8 $519.9 

Three months ended
Non-controlling interests (NCI) in consolidated entities3/31/20243/31/202312/31/2023
Balance at beginning of period$192.0 $190.7 $221.5 
Capital allocation-based income compensation:
Change in accrued carried interest compensation18.5 8.6 15.2 
Acquisition-related amortization and impairments(5.3)(5.1)(4.6)
Net contributions (distributions)0.2 0.2 (40.1)
Balance at end of period
$205.4 $194.4 $192.0 

Non-GAAP Information and Reconciliation

The firm believes the non-GAAP financial measures below provide relevant and meaningful information to investors about its core operating results. These measures have been established in order to increase transparency for the purpose of evaluating the firm's core business, for comparing current results with prior period results, and to enable more appropriate comparison with industry peers. However, non-GAAP financial measures should not be considered as a substitute for financial measures calculated in accordance with U.S. GAAP and may be calculated differently by other companies.


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The following schedules reconcile U.S. GAAP financial measures to non-GAAP financial measures for the three months ended March 31, 2024 and 2023 and December 31, 2023.
Three months ended 3/31/2024
Operating expensesNet operating incomeNon-operating income (loss)
Provision (benefit) for income taxes(5)
Net income attributable to T. Rowe Price
Diluted earnings per share(6)
U.S. GAAP Basis (FS line item)$1,163.6 $586.6 $188.9 $182.1 $573.8 $2.49 
Non-GAAP adjustments:
Acquisition-related:
Investment and NCI amortization and impairments(1) (Capital allocation-based income and Compensation and related costs)
5.3 7.1 — 2.0 5.1 0.02 
Acquisition-related retention arrangements(1) (Compensation and related costs)
(13.5)13.5 — 3.8 9.7 0.04 
Intangible assets amortization and impairments(1)
(29.9)29.9 — 8.3 21.6 0.10 
Total acquisition-related(38.1)50.5 — 14.1 36.4 0.16 
Supplemental savings plan liability(2) (Compensation and related costs)
(53.0)53.0 (49.7)0.9 2.4 0.01 
Consolidated T. Rowe Price investment products(3)
(1.1)2.3 (72.3)(14.0)(36.4)(0.16)
Other non-operating income(4)
— — (38.4)(10.7)(27.7)(0.12)
Adjusted Non-GAAP Basis$1,071.4 $692.4 $28.5 $172.4 $548.5 $2.38 

Three months ended 3/31/2023
Operating expensesNet operating incomeNon-operating income (loss)
Provision (benefit) for income taxes(5)
Net income attributable to T. Rowe Price
Diluted earnings per share(6)
U.S. GAAP Basis (FS line item)$1,053.4 $484.2 $135.4 $177.9 $421.5 $1.83 
Non-GAAP adjustments:
Acquisition-related:
Investment and NCI amortization and impairments(1) (Capital allocation-based income and Compensation and related costs)
5.1 7.2 — 1.5 5.7 0.02 
Acquisition-related retention arrangements(1) (Compensation and related costs)
(14.2)14.2 — 3.1 11.1 0.05 
Contingent consideration(1)
49.6 (49.6)— (10.5)(39.1)(0.17)
Intangible assets amortization and impairments(1)
(26.0)26.0 — 5.6 20.4 0.09 
Total acquisition-related14.5 (2.2)— (0.3)(1.9)(0.01)
Supplemental savings plan liability(2) (Compensation and related costs)
(42.5)42.5 (44.7)(0.5)(1.7)(0.01)
Consolidated T. Rowe Price investment products(3)
(2.9)3.5 (45.4)(4.6)(17.1)(0.07)
Other non-operating income(4)
— — (14.5)(3.1)(11.4)(0.05)
Adjusted Non-GAAP Basis$1,022.5 $528.0 $30.8 $169.4 $389.4 $1.69 

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Three months ended 12/31/2023
Operating expensesNet operating incomeNon-operating income (loss)
Provision (benefit) for income taxes(5)
Net income attributable to T. Rowe Price
Diluted earnings per share(6)
U.S. GAAP Basis (FS line item)$1,254.8 $387.2 $259.7 $173.3 $437.6 $1.90 
Non-GAAP adjustments:
Acquisition-related:
Investment and NCI amortization and impairments(1) (Capital allocation-based income and Compensation and related costs)
4.6 6.3 — 1.7 4.6 0.02 
Acquisition-related retention arrangements(1) (Compensation and related costs)
(13.5)13.5 — 3.6 9.9 0.04 
Contingent consideration(1)
9.6 (9.6)— (2.6)(7.0)(0.03)
Intangible assets amortization and impairments(1)
(41.1)41.1 — 11.1 30.0 0.14 
Total acquisition-related(40.4)51.3 — 13.8 37.5 0.17 
Supplemental savings plan liability(2) (Compensation and related costs)
(61.9)61.9 (65.0)(0.8)(2.3)(0.01)
Consolidated T. Rowe Price investment products(3)
(1.8)2.3 (119.2)(21.8)(59.1)(0.26)
Other non-operating income(4)
— — (26.0)(7.0)(19.0)(0.08)
Adjusted Non-GAAP Basis$1,150.7 $502.7 $49.5 $157.5 $394.7 $1.72 

(1)    These non-GAAP adjustments remove the impact of acquisition-related amortization and costs including intangible assets and acquired assets amortization and impairments, contingent consideration liability fair value remeasurements, amortization and impairments of acquired investments and non-controlling interest basis differences, and amortization of compensation-related arrangements. Management believes adjusting for these charges helps the reader's ability to understand the firm's core operating results and to increase comparability period to period.

(2)    This non-GAAP adjustment removes the compensation expense impact from market valuation changes in the supplemental savings plan liability and the related net gains (losses) on investments designated as economic hedges against the related liability. Amounts deferred under the supplemental savings plan are adjusted for appreciation (depreciation) of hypothetical investments chosen by participants. The firm uses T. Rowe Price investment products to economically hedge the exposure to these market movements. Management believes it is useful to offset the non-operating investment income (loss) recognized on the economic hedges against the related compensation expense and remove the net impact to help the reader's ability to understand the firm's core operating results and to increase comparability period to period.

(3)    These non-GAAP adjustments remove the impact the consolidated sponsored investment products have on the firm's U.S. GAAP consolidated statements of income. Specifically, the firm adds back the operating expenses and subtracts the investment income of the consolidated sponsored investment products. The adjustment to operating expenses represents the operating expenses of the consolidated products, net of the elimination of related management and administrative fees. The adjustment to net income attributable to T. Rowe Price represents the net income of the consolidated products, net of redeemable non-controlling interests. Management believes the consolidated sponsored investment products may impact the reader’s ability to understand the firm's core operating results.

(4)    This non-GAAP adjustment represents the other non-operating income (loss) and the net gains (losses) earned on the firm's investment portfolio that are not designated as economic hedges of the supplemental savings plan liability and that are not part of the cash and discretionary investment portfolio. Management retains in its non-GAAP measures the investment gains recognized on the cash and discretionary investments as these assets and related income (loss) are considered part of the firm's core operations. Management believes adjusting for the remaining non-operating income (loss) helps the reader’s ability to understand the firm's core operating results and increases comparability to prior years. Additionally, management does not emphasize the impact of this portion of non-operating income (loss) when managing and evaluating the firm's performance.

(5)    The income tax impacts were calculated in order to achieve an overall non-GAAP effective tax rate for the three months ended March 31, 2024 and 2023 was 23.9% and 30.3%, respectively.

(6)    This non-GAAP measure was calculated by applying the two-class method to adjusted net income attributable to T. Rowe Price Group and dividing by the weighted-average common shares outstanding assuming dilution. The calculation of adjusted net income allocated to common stockholders is as follows:


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Three months ended
3/31/20243/31/202312/31/2023
Adjusted net income attributable to T. Rowe Price$548.5 $389.4 $394.7 
Less: adjusted net income allocated to outstanding restricted stock and stock unit holders15.2 9.6 10.6 
Adjusted net income allocated to common stockholders$533.3 $379.8 $384.1 


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