NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
|
NOTE 1
|
– THE COMPANY AND BASIS OF PREPARATION.
|
T. Rowe Price Group (Price Group) derives its consolidated revenues and net income primarily from investment advisory services that its subsidiaries provide to individual and institutional investors in the sponsored T. Rowe Price U.S. mutual funds and other investment portfolios, including separately managed accounts, subadvised funds, and other sponsored investment portfolios. We also provide our 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; and trust services.
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.
These unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States, which require the use of estimates and reflect all adjustments that are, in the opinion of management, necessary to 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. Certain prior year amounts have been reclassified to conform to the 2016 presentation.
The unaudited interim financial information contained in these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements contained in our
2015
Annual Report.
NEW ACCOUNTING GUIDANCE.
We implemented Accounting Standards Update No. 2015-02 - Consolidation (Topic 810): Amendments to the Consolidation Analysis on January 1, 2016, which did not require the restatement of prior year periods. In connection with the adoption of this guidance, we reevaluated all of our investments for consolidation, including our investments in sponsored investment portfolios. The adoption of the guidance resulted in sponsored investment products regulated outside the U.S. previously accounted for as voting interest entities (VOE) to be evaluated as variable interest entities (VIE) and led to the consolidation of an additional
24
portfolios that were previously accounted for as available-for-sale securities. The adoption also resulted in the consolidation of an additional
eight
U.S. sponsored investment portfolios that were previously accounted for as available-for sale-securities. The impact to the condensed consolidated balance sheet upon adoption was the consolidation of
$1.6 billion
of assets,
$21.3 million
of liabilities, and
$672.7 million
of non-controlling interests. We also reclassified
$32.5 million
in accumulated comprehensive income to retained earnings. The consolidation guidance provides a scope exception for reporting entities with interests in legal entities that are required to comply with or operate in accordance with requirements similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds. Additional disclosures relating to consolidated voting interest entities and variable interest entities, and the impact the new accounting guidance has had on the quarter are included in Note 5.
CONSOLIDATION.
Our condensed consolidated financial statements include the accounts of all subsidiaries and sponsored investment portfolios in which we have a controlling interest. We are generally deemed to have a controlling interest when we own the majority of the voting interest of an entity or deemed to be the primary beneficiary of a VIE. We perform an analysis of our investments to determine if the investment entity is a VOE or VIE. Our analysis involves judgment and considers several factors, including an entity’s legal organization, capital structure, the rights of the equity investment holders, our ownership interest in the entity, and our contractual involvement with the entity. We continually review and reconsider our previously reached VIE or VOE conclusions upon the occurrence of certain events, such as changes to our ownership interest, changes to an entity’s organization and legal structure, or amendments to governing documents. All material accounts and transactions between consolidated entities are eliminated in consolidation.
Upon consolidation of sponsored investment portfolios, the Company retains the specialized investment company accounting principles of the underlying funds. All of the underlying investments held by these portfolios are carried at fair value with corresponding changes in the investments’ fair values reflected in non-operating income (expense) on the condensed consolidated statements of income.
Variable interest entities
VIEs are entities that, by design (i
)
lack sufficient equity to permit the entity to finance its activities independently, or (ii) have equity holders that do not have the power to direct the activities of the entity that most significantly impact the entity’s economic performance, the obligation to absorb the entity’s losses, or the rights to receive the entity’s residual returns. We consolidate a VIE when we are the primary beneficiary, which is the party that has both (i) the power to direct the activities of the VIE that most significantly impact its economic performance and (ii) the obligation to absorb losses of the entity or the right to receive benefits from the VIE that could potentially be significant. Our Luxembourg-based SICAV (Société d'Investissement à Capital Variable) funds and other sponsored investment portfolios regulated outside the U.S. are determined to be VIEs.
Along with VIEs that we consolidate, we also hold variable interests in other VIEs, including several investment partnerships, that are not consolidated because we are not the primary beneficiary.
Redeemable non-controlling interests
We recognize redeemable non-controlling interests for the portion of the net assets of our consolidated sponsored investment portfolios held by unrelated third party investors as their interest is convertible to cash and other assets at their option. As such, we reflect redeemable non-controlling interests as temporary equity in our condensed consolidated balance sheet.
|
|
NOTE 2
|
– INFORMATION ABOUT RECEIVABLES, REVENUES, AND SERVICES.
|
Accounts receivable from our sponsored U.S. mutual funds for advisory fees and advisory-related administrative services aggregate
$252.8 million
at
December 31, 2015
, and
$247.7 million
at
March 31, 2016
.
Revenues (in millions) from advisory services provided under agreements with our sponsored U.S. mutual funds and other investment clients include:
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
3/31/2015
|
|
3/31/2016
|
Sponsored U.S. mutual funds
|
|
|
|
|
Stock and blended asset
|
|
$
|
543.2
|
|
|
$
|
519.5
|
|
Bond and money market
|
|
102.7
|
|
|
112.6
|
|
|
|
645.9
|
|
|
632.1
|
|
Other investment portfolios
|
|
|
|
|
Stock and blended asset
|
|
213.0
|
|
|
197.9
|
|
Bond, money market, and stable value
|
|
37.6
|
|
|
40.8
|
|
|
|
250.6
|
|
|
238.7
|
|
Total
|
|
$
|
896.5
|
|
|
$
|
870.8
|
|
We voluntarily waived
$13.7 million
and
$4.0 million
in money market related fees, including advisory fees and fund expenses, in the
first
quarter of
2015
and
2016
, respectively, in order to maintain a positive yield for fund investors.
The following table summarizes the investment portfolios and assets under management (in billions) on which we earn advisory fees.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average during
|
|
|
|
|
|
the first quarter of
|
|
As of
|
|
2015
|
|
2016
|
|
12/31/2015
|
|
3/31/2016
|
Sponsored U.S. mutual funds
|
|
|
|
|
|
|
|
Stock and blended asset
|
$
|
381.5
|
|
|
$
|
361.3
|
|
|
$
|
383.0
|
|
|
$
|
380.4
|
|
Bond and money market
|
105.6
|
|
|
104.3
|
|
|
104.1
|
|
|
106.3
|
|
|
487.1
|
|
|
465.6
|
|
|
487.1
|
|
|
486.7
|
|
Other investment portfolios
|
|
|
|
|
|
|
|
Stock and blended asset
|
209.5
|
|
|
196.3
|
|
|
209.8
|
|
|
208.8
|
|
Bond, money market, and stable value
|
62.4
|
|
|
66.2
|
|
|
66.2
|
|
|
69.1
|
|
|
271.9
|
|
|
262.5
|
|
|
276.0
|
|
|
277.9
|
|
Total
|
$
|
759.0
|
|
|
$
|
728.1
|
|
|
$
|
763.1
|
|
|
$
|
764.6
|
|
Investors that we serve are primarily domiciled in the U.S.;
investment advisory clients outside the U.S.
account for
4.9%
and
4.8%
of our
assets under management at December 31, 2015
and
March 31, 2016
, respectively.
The following table summarizes the other fees (in millions) earned from our sponsored U.S. mutual funds.
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
3/31/2015
|
|
3/31/2016
|
Administrative fees
|
$
|
76.0
|
|
|
$
|
72.3
|
|
Distribution and servicing fees
|
$
|
37.5
|
|
|
$
|
33.9
|
|
NOTE 3 - INVESTMENTS.
The carrying value of investments (in millions) we do not consolidate are as follows:
|
|
|
|
|
|
|
|
|
|
12/31/2015
|
|
3/31/2016
|
Available-for-sale sponsored investment portfolios
|
$
|
1,612.3
|
|
|
$
|
573.9
|
|
Equity method investments
|
|
|
|
26% interest in UTI Asset Management Company Limited (India)
|
132.8
|
|
|
134.8
|
|
Sponsored investment portfolios
|
113.7
|
|
|
276.3
|
|
Investment partnerships
|
6.2
|
|
|
5.6
|
|
Sponsored investment portfolios held as trading
|
25.8
|
|
|
47.4
|
|
Cost method investments
|
69.4
|
|
|
69.0
|
|
U.S. Treasury note
|
1.0
|
|
|
1.0
|
|
Total
|
$
|
1,961.2
|
|
|
$
|
1,108.0
|
|
In connection with the adoption of the new consolidation accounting guidance on January 1, 2016, we reevaluated all of our investments for consolidation, including our investments in sponsored investment portfolios. We determined that our interests in a number of our available-for-sale holdings held at December 31, 2015, were deemed controlling interests under the new accounting standard and resulted in these sponsored investment portfolios being consolidated on January 1, 2016.
During the first quarter of 2016, we also deconsolidated certain sponsored investment portfolios, in which we provided initial seed capital at the time of formation, as we no longer had a controlling interest. Accordingly, we deconsolidated from our condensed consolidated balance sheet the portfolio’s assets of
$338.8 million
, liabilities of
$.9 million
and redeemable non-controlling interests of
$152.6 million
, which were the carrying values on the deconsolidation dates. Since our consolidated investment portfolios were carried at fair value, and the investment portfolio's functional currency was U.S. dollars, we did not recognize any gain or loss in our consolidated statement of income upon deconsolidation. Depending on our ownership interest,
we are now reporting our residual interests in these sponsored investment portfolios as either equity method or available-for-sale investments.
AVAILABLE-FOR-SALE SPONSORED INVESTMENT PORTFOLIOS.
The available-for-sale sponsored investment portfolios (in millions) include:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate cost
|
|
Unrealized holding
|
|
Aggregate
fair value
|
|
|
gains
|
|
losses
|
|
December 31, 2015
|
|
|
|
|
|
|
|
Stock and blended asset funds
|
$
|
428.6
|
|
|
$
|
180.3
|
|
|
$
|
(9.1
|
)
|
|
$
|
599.8
|
|
Bond funds
|
990.5
|
|
|
39.1
|
|
|
(17.1
|
)
|
|
1,012.5
|
|
Total
|
$
|
1,419.1
|
|
|
$
|
219.4
|
|
|
$
|
(26.2
|
)
|
|
$
|
1,612.3
|
|
|
|
|
|
|
|
|
|
March 31, 2016
|
|
|
|
|
|
|
|
Stock and blended asset funds
|
$
|
108.0
|
|
|
$
|
84.4
|
|
|
$
|
(.4
|
)
|
|
$
|
192.0
|
|
Bond funds
|
380.3
|
|
|
3.7
|
|
|
(2.1
|
)
|
|
381.9
|
|
Total
|
$
|
488.3
|
|
|
$
|
88.1
|
|
|
$
|
(2.5
|
)
|
|
$
|
573.9
|
|
The following table details the number of holdings, the unrealized holding losses, and the aggregate fair value of available-for-sale sponsored investment portfolios with unrealized losses categorized by the length of time they have been in a continuous unrealized loss position:
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of holdings
|
|
Unrealized
holding losses
|
|
Aggregate
fair value
|
December 31, 2015
|
|
|
|
|
|
Less than 12 months
|
18
|
|
$
|
(15.8
|
)
|
|
$
|
419.6
|
|
12 months or more
|
4
|
|
|
(10.4
|
)
|
|
298.6
|
|
Total
|
22
|
|
$
|
(26.2
|
)
|
|
$
|
718.2
|
|
|
|
|
|
|
|
March 31, 2016
|
|
|
|
|
|
Less than 12 months
|
8
|
|
$
|
(.3
|
)
|
|
$
|
27.9
|
|
12 months or more
|
1
|
|
|
(2.2
|
)
|
|
168.6
|
|
Total
|
9
|
|
$
|
(2.5
|
)
|
|
$
|
196.5
|
|
In addition to the duration of the impairments, we reviewed the severity of the impairment as well as our intent and ability to hold the investments for a period of time sufficient for an anticipated recovery in fair value. Accordingly, impairment of these investment holdings is considered temporary at
December 31, 2015
, and
March 31, 2016
.
VARIABLE INTEREST ENTITIES.
Our investments at
March 31, 2016
, include
$81.2 million
of investments 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 at
March 31, 2016
, is
$140.8 million
, which includes our carrying value, any unfunded capital commitments, and uncollected investment advisory and administrative fees.
|
|
NOTE 4
|
– FAIR VALUE MEASUREMENTS.
|
We determine the fair value of our cash equivalents and certain investments 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. There have been no material transfers between the levels. The following table summarizes our investments (in millions) that are recognized in our condensed consolidated balance sheets using fair value measurements determined based on the differing levels of inputs.
|
|
|
|
|
|
|
|
|
|
Level 1
|
|
Level 2
|
December 31, 2015
|
|
|
|
Cash equivalents
|
$
|
997.5
|
|
|
$
|
—
|
|
Available-for-sale sponsored investment portfolios
|
1,612.3
|
|
|
—
|
|
Sponsored investment portfolios held as trading
|
25.8
|
|
|
—
|
|
Total
|
$
|
2,635.6
|
|
|
$
|
—
|
|
|
|
|
|
March 31, 2016
|
|
|
|
Cash equivalents
|
$
|
1,153.7
|
|
|
$
|
—
|
|
Available-for-sale sponsored investment portfolios
|
573.9
|
|
|
—
|
|
Sponsored investment portfolios held as trading
|
47.4
|
|
|
—
|
|
Total
|
$
|
1,775.0
|
|
|
$
|
—
|
|
The table above excludes investments held by consolidated sponsored investment portfolios which are presented separately on our condensed consolidated balance sheets and are detailed in Note 5.
NOTE 5 - CONSOLIDATED SPONSORED INVESTMENT PORTFOLIOS.
The sponsored investment portfolios that we consolidate in our 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. sponsored investment portfolios are considered voting interest entities while those regulated outside the United States are considered variable interest entities.
The following table details the net assets of consolidated sponsored investment portfolios at
March 31, 2016
.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voting
interest entities
|
|
Variable interest entities
|
|
Total
|
Cash and cash equivalents
|
$
|
9.1
|
|
|
$
|
68.4
|
|
|
$
|
77.5
|
|
Investments
|
210.5
|
|
|
1,500.4
|
|
|
1,710.9
|
|
Other assets
|
8.9
|
|
|
29.3
|
|
|
38.2
|
|
Total assets
|
228.5
|
|
|
1,598.1
|
|
|
1,826.6
|
|
Liabilities
|
8.9
|
|
|
49.6
|
|
|
58.5
|
|
Net assets
|
$
|
219.6
|
|
|
$
|
1,548.5
|
|
|
$
|
1,768.1
|
|
|
|
|
|
|
|
Attributable to redeemable non-controlling interests
|
$
|
69.2
|
|
|
$
|
755.9
|
|
|
$
|
825.1
|
|
Attributable to T. Rowe Price Group
|
150.4
|
|
|
792.6
|
|
|
943.0
|
|
|
$
|
219.6
|
|
|
$
|
1,548.5
|
|
|
$
|
1,768.1
|
|
Although we can redeem our net interest in these sponsored investment portfolios at any time, we cannot directly access or sell the assets held by the portfolios to obtain cash for general operations. Additionally, the assets of these investment portfolios are not available to our general creditors.
Since third party investors in these investment funds have no recourse to Price Group’s credit, our overall risk related to the net assets of consolidated sponsored investment portfolios is limited to valuation changes associated with our net interest. We, however, are required to recognize the valuation changes associated with all underlying investments held by these portfolios in our 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 (in millions) of the consolidated sponsored investment portfolios for the three months ended
March 31, 2016
, are reflected in our condensed consolidated statement of income as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voting
interest entities
|
|
Variable interest entities
|
|
Total
|
|
|
|
|
|
|
Operating expenses reflected in net operating income
|
$
|
(.5
|
)
|
|
$
|
(2.1
|
)
|
|
$
|
(2.6
|
)
|
Net investment income reflected in non-operating income
|
6.3
|
|
|
17.5
|
|
|
23.8
|
|
Impact on income before taxes
|
$
|
5.8
|
|
|
$
|
15.4
|
|
|
$
|
21.2
|
|
|
|
|
|
|
|
Attributable to redeemable non-controlling interests
|
$
|
2.0
|
|
|
$
|
7.2
|
|
|
$
|
9.2
|
|
Attributable to T. Rowe Price Group
|
3.8
|
|
|
8.2
|
|
|
12.0
|
|
|
$
|
5.8
|
|
|
$
|
15.4
|
|
|
$
|
21.2
|
|
The operating expenses of these consolidated portfolios are reflected in other operating expenses. We eliminated
$1.3 million
of these expenses against our investment advisory and administrative fees earned in preparing our condensed consolidated financial statements. The net investment income reflected in non-operating income includes dividend and interest income, and realized and unrealized gains and losses on the underlying securities held by the consolidated sponsored investment portfolios.
The table below details the impact of these consolidated investment portfolios on the individual lines of our condensed consolidated statement of cash flows (in millions) for the three months ended
March 31, 2016
.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voting
interest entities
|
|
Variable interest entities
|
|
Total
|
Net cash provided by operating activities
|
$
|
(9.4
|
)
|
|
$
|
(424.1
|
)
|
|
$
|
(433.5
|
)
|
Net cash provided by (used in) investing activities
|
26.3
|
|
|
42.8
|
|
|
69.1
|
|
Net cash used in financing activities
|
(7.8
|
)
|
|
451.1
|
|
|
443.3
|
|
Effect of exchange rate changes on cash and cash equivalents of consolidated sponsored investment portfolios
|
—
|
|
|
(1.4
|
)
|
|
(1.4
|
)
|
Net change in cash and cash equivalents during period
|
9.1
|
|
|
68.4
|
|
|
77.5
|
|
Cash and cash equivalents at beginning of year
|
—
|
|
|
—
|
|
|
—
|
|
Cash and cash equivalents at end of period
|
$
|
9.1
|
|
|
$
|
68.4
|
|
|
$
|
77.5
|
|
The net cash used in financing activities during the first quarter of 2016 includes
$172.5 million
of net investments we made into the consolidated sponsored investment portfolios, net of dividends received. These cash flows were eliminated in consolidation.
FAIR VALUE MEASUREMENTS.
We determine the fair value of investments held by consolidated sponsored investment portfolios 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 these investment holdings. There have been no material transfers between the levels. The following table summarizes the investment holdings held by our consolidated sponsored investment portfolios (in millions) using fair value measurements determined based on the differing levels of inputs.
|
|
|
|
|
|
|
|
|
|
Level 1
|
|
Level 2
|
December 31, 2015
|
|
|
|
Assets
|
|
|
|
Equity securities
|
$
|
2.8
|
|
|
$
|
11.2
|
|
Fixed income securities
|
—
|
|
|
43.0
|
|
Other investments
|
.7
|
|
|
—
|
|
|
$
|
3.5
|
|
|
$
|
54.2
|
|
|
|
|
|
March 31, 2016
|
|
|
|
Assets
|
|
|
|
Cash equivalents
|
$
|
7.8
|
|
|
$
|
.8
|
|
Equity securities
|
55.1
|
|
|
446.4
|
|
Fixed income securities
|
—
|
|
|
1,180.9
|
|
Other investments
|
.5
|
|
|
28.0
|
|
|
$
|
63.4
|
|
|
$
|
1,656.1
|
|
|
|
|
|
Liabilities
|
$
|
.2
|
|
|
$
|
24.3
|
|
NOTE 6 – STOCKHOLDERS’ EQUITY.
DIVIDENDS.
Regular cash dividends declared per share during the first
three
months of
2015
and
2016
were
$.52
and
$.54
, respectively. A
$2.00
per share special dividend was also declared in the first quarter of 2015.
|
|
NOTE 7
|
– STOCK-BASED COMPENSATION.
|
STOCK OPTIONS.
The following table summarizes the status of and changes in our stock options during
the first quarter of
2016
.
|
|
|
|
|
|
|
|
|
Options
|
|
Weighted-
average
exercise
price
|
Outstanding at December 31, 2015
|
30,818,229
|
|
|
$
|
59.24
|
|
Exercised
|
(1,141,382
|
)
|
|
$
|
47.22
|
|
Forfeited
|
(208,376
|
)
|
|
$
|
72.35
|
|
Expired
|
(1,344
|
)
|
|
$
|
71.61
|
|
Outstanding at March 31, 2016
|
29,467,127
|
|
|
$
|
59.62
|
|
Exercisable at March 31, 2016
|
18,726,499
|
|
|
$
|
52.55
|
|
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 first quarter of
2016
.
|
|
|
|
|
|
|
|
|
|
|
|
Restricted
shares
|
|
Restricted
stock
units
|
|
Weighted-average
fair value
|
Nonvested at December 31, 2015
|
1,470,827
|
|
|
2,216,431
|
|
|
$
|
74.66
|
|
Time-based grants
|
—
|
|
|
1,483,557
|
|
|
$
|
70.26
|
|
Performance-based grants
|
—
|
|
|
200,223
|
|
|
$
|
70.26
|
|
Vested
|
(4,730
|
)
|
|
(6,724
|
)
|
|
$
|
74.39
|
|
Forfeited
|
(29,387
|
)
|
|
(35,319
|
)
|
|
$
|
74.66
|
|
Nonvested at March 31, 2016
|
1,436,710
|
|
|
3,858,168
|
|
|
$
|
73.26
|
|
The nonvested at
March 31, 2016
, includes
21,600
performance-based restricted shares and
401,404
performance-based restricted stock units. These performance-based restricted shares and units include
21,600
restricted shares and
137,835
restricted stock units for which the performance period has lapsed and the performance threshold has been met.
FUTURE STOCK-BASED COMPENSATION EXPENSE.
The following table presents the compensation expense (in millions) to be recognized over the remaining vesting periods of the stock-based awards outstanding at
March 31, 2016
. Estimated future compensation expense will change to reflect future option grants; future awards of unrestricted shares and restricted stock units; changes in estimated forfeitures; changes in the probability of performance thresholds being met; and adjustments for actual forfeitures.
|
|
|
|
|
Second quarter 2016
|
$
|
39.0
|
|
Third quarter 2016
|
39.1
|
|
Fourth quarter 2016
|
35.4
|
|
2017
|
102.1
|
|
2018 through 2021
|
101.3
|
|
Total
|
$
|
316.9
|
|
|
|
NOTE 8
|
– EARNINGS PER SHARE CALCULATIONS.
|
The following table presents the reconciliation (in millions) of net income attributable to T. Rowe Price Group to net income allocated to our common stockholders and the weighted-average shares (in millions) that are used in calculating the basic and diluted earnings per share on our common stock. Weighted-average common shares outstanding assuming dilution reflect the potential dilution, determined using the treasury stock method, that could occur if outstanding stock options were exercised and non-participating stock awards vested.
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
3/31/2015
|
|
3/31/2016
|
Net income attributable to T. Rowe Price Group
|
$
|
309.5
|
|
|
$
|
295.2
|
|
Less: net income allocated to outstanding restricted stock and stock unit holders
|
(8.4
|
)
|
|
(5.6
|
)
|
Net income allocated to common stockholders
|
$
|
301.1
|
|
|
$
|
289.6
|
|
|
|
|
|
Weighted-average common shares
|
|
|
|
Outstanding
|
258.7
|
|
|
246.7
|
|
Outstanding assuming dilution
|
265.7
|
|
|
251.5
|
|
The following table shows the weighted-average outstanding stock options (in millions) that are excluded from the calculation of diluted earnings per common share as the inclusion of such shares would be anti-dilutive.
|
|
|
|
|
|
|
|
Three months ended
|
|
3/31/2015
|
|
3/31/2016
|
Weighted-average outstanding stock options excluded
|
4.6
|
|
|
10.8
|
|
NOTE 9 - OTHER COMPREHENSIVE INCOME AND ACCUMULATED OTHER COMPREHENSIVE INCOME.
The following table presents the impact of the components (in millions) of other comprehensive income or loss on deferred tax benefits (income taxes).
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
3/31/2015
|
|
3/31/2016
|
Net deferred tax benefits on:
|
|
|
|
Net unrealized holding gains or losses
|
$
|
(3.1
|
)
|
|
$
|
2.5
|
|
Reclassification adjustments recognized in the provision for income taxes:
|
|
|
|
Net gains realized on dispositions
|
5.9
|
|
|
20.6
|
|
Net deferred tax benefits on net unrealized holding gains or losses
|
2.8
|
|
|
23.1
|
|
Total deferred tax benefits (income taxes) on currency translation adjustments
|
.8
|
|
|
(6.7
|
)
|
Total net deferred tax benefits
|
$
|
3.6
|
|
|
$
|
16.4
|
|
The changes (in millions) in each component of accumulated other comprehensive income, including reclassification adjustments for
the first quarter of
2016
are presented in the table below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency translation adjustments
|
|
|
|
Net unrealized holding gains
|
|
Equity method investments
|
|
Consolidated sponsored investment portfolios - variable interest entities
|
|
Total currency translation adjustments
|
|
Total
|
Balances at December 31, 2015
|
$
|
120.3
|
|
|
$
|
(30.9
|
)
|
|
$
|
(2.8
|
)
|
|
$
|
(33.7
|
)
|
|
$
|
86.6
|
|
Reclass of accumulated other comprehensive income to retained earnings upon adoption of the new consolidation accounting guidance
|
(32.0
|
)
|
|
(.5
|
)
|
|
—
|
|
|
(.5
|
)
|
|
(32.5
|
)
|
Balance at January 1, 2016
|
88.3
|
|
|
(31.4
|
)
|
|
(2.8
|
)
|
|
(34.2
|
)
|
|
54.1
|
|
Other comprehensive income (loss) before reclassifications and income taxes
|
(6.3
|
)
|
|
(.8
|
)
|
|
18.0
|
|
|
17.2
|
|
|
10.9
|
|
Reclassification adjustments recognized in non-operating income
|
(52.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(52.3
|
)
|
|
(58.6
|
)
|
|
(.8
|
)
|
|
18.0
|
|
|
17.2
|
|
|
(41.4
|
)
|
Net deferred tax benefits
|
23.1
|
|
|
.3
|
|
|
(7.0
|
)
|
|
(6.7
|
)
|
|
16.4
|
|
Other comprehensive income (loss)
|
(35.5
|
)
|
|
(.5
|
)
|
|
11.0
|
|
|
10.5
|
|
|
(25.0
|
)
|
Balances at March 31, 2016
|
$
|
52.8
|
|
|
$
|
(31.9
|
)
|
|
$
|
8.2
|
|
|
$
|
(23.7
|
)
|
|
$
|
29.1
|
|