PRESS RELEASE: T. Rowe Price Group Reports Second Quarter 2022 Results

NEWS RELEASE

T. ROWE PRICE GROUP REPORTS SECOND QUARTER 2022 RESULTS

BALTIMORE (July 28, 2022) - T. Rowe Price Group, Inc. (NASDAQ-GS: TROW) today reported its results for the second quarter of 2022.

• Quarter end assets under management of $1.31 trillion
• Net client outflows of $14.7 billion
• Net revenues of $1.5 billion, including negative capitalallocation-based income of $126.3 million
• Diluted earnings per common share (EPS) of $1.46; Adjustednon-GAAP diluted EPS of $1.79
• Returned $476.6 million to stockholders in Q2 2022, including $199.4 million of share repurchases
• Solid investment performance over longer time horizons

Financial Highlights

					Three months ended
(in millions, except per-share data)	6/30/2022(1)			6/30/2021		% change	3/31/2022(1)		% change
U.S. GAAP basis
Investment advisory fees	$	1,496.7	$	1,787.2	(16.3)%	$	1,662.1	(10.0)%
Capital allocation-based income(2)(3)	$	(126.3)	$	-		n/m	$	44.4		n/m
Net revenues	$	1,513.0	$	1,929.3	(21.6)%	$	1,863.0	(18.8)%
Operating expenses	$	844.4	$	971.2	(13.1)%	$	985.6	(14.3)%
Net operating income	$	668.6	$	958.1	(30.2)%	$	877.4	(23.8)%
Non-operating income (loss)(3)	$	(279.9)	$	143.9		n/m	$	(198.5)		n/m
Net income attributable to T. Rowe Price	$	339.6	$	815.7	(58.4)%	$	567.9	(40.2)%
Diluted earnings per common share	$	1.46	$	3.46	(57.8)%	$	2.41	(39.4)%
Weighted average common shares outstanding assuming dilution		227.9			229.2	(.6)%		229.8	(.8)%
Adjustednon-GAAPbasis(4)
Operating expenses	$	947.3	$	931.8	1.7 %	$	1,039.1	(8.8)%
Net operating income	$	579.7	$	998.6	(41.9)%	$	838.0	(30.8)%
Non-operating income (loss)(3)	$	(30.6)	$	17.8		n/m	$	(23.8)		n/m
Net income attributable to T. Rowe Price	$	417.7	$	779.0	(46.4)%	$	616.9	(32.3)%
Diluted earnings per common share	$	1.79	$	3.31	(45.9)%	$	2.62	(31.7)%
Assets under Management(5)(in billions)
Average assets under management	$	1,407.1	$	1,585.3	(11.2)%	$	1,559.9	(9.8)%
Ending assets under management	$	1,309.7	$	1,623.1	(19.3)%	$	1,551.8	(15.6)%
Investment advisory effective fee rate (in bps)		42.7			45.2	(5.5)%		43.2	(1.2)%

1. The firm's Q1 and Q2 2022 operating results include the results of OHA following its acquisition on December 29, 2021.
2. Capitalallocation-based income fluctuates period to period as it reflects the adjustment to accrued carried interest for the change in value of the underlying investments. The realization of accrued carried interest occurs over a number of years.
3. The percentage change is not meaningful (n/m).
4. Adjusts the U.S. GAAP basis for the impact of consolidated T. Rowe Price investment products, the impact of market movements on the supplemental savings plan liability and related economic hedges, investment income related to certain other investments,acquisition-related amortization and costs, and certain nonrecurring charges and gains, if any. The firm believes the non-GAAP financial measures provide relevant and meaningful information to investors about its core operating results. See the reconciliation to the comparable U.S. GAAP measures at the end of this earnings release.
5. Assets under management for the 2021 period do not include the acquiredfee-basis assets under management related to the OHA acquisition.

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Management Commentary

Rob Sharps, chief executive officer and president, commented, "Global equity markets suffered their biggest quarterly decline since the start of the pandemic, as fears grew that central banks would tip the global economy into recession in their fight against the highest inflation in four decades. The Federal Reserve raised official short-term interest rates at the most aggressive pace since 1994, while the European Central Bank announced plans for its first rate increase in 11 years as cuts in oil and gas imports from Russia pushed up energy prices dramatically. Sharply higher rates took an especially large toll on the stocks of rapidly-growing companies by making future earnings less attractive, sending the tech-heavy Nasdaq Composite down 22.5% in the quarter, while major bond indices were once again down.

"Our net revenues of $1.5 billion were down 21.6% over the second quarter of 2021 due to the declining markets' impact on our average assets under management and capital allocation-based income. Diluted U.S. GAAP EPS was $1.46, while diluted non-GAAP EPS was $1.79. Expenses, which now include OHA, were down 13% on a U.S. GAAP basis, while on a non-GAAP basis were up 1.7% from the second quarter of 2021. We are committed to continuing our investments in initiatives to drive long-term growth, but we are taking steps to reduce the pace of hiring to slow the rate of expense growth in response to these market conditions. Our balance sheet remains strong with $2.6 billion of cash and discretionary investments, and we repurchased 1.7 million shares which combined with our regular quarterly dividend returned $476.6 million to stockholders in the second quarter.

"Delivering outstanding investment performance remains our top priority. While many of our strategies continue to produce strong results, especially over longer time periods, several of our large equity strategies had challenged performance. We have experienced periods of softer performance in the past and we expect our disciplined investment process and focus on fundamentals will deliver the results our clients expect and deserve. Longer-term performance in our target date franchise remains strong.

"We had net outflows of $14.7 billion which continues to be largely driven by outflows from growth-oriented equity strategies. Second quarter outflows in multi-asset of $2.1 billion were driven by a client's model-driven reallocation impacting our risk-based target allocation products, while target date products had net inflows. Fixed income and alternatives also had net inflows for the quarter. We expect net outflows to persist until we see a more constructive equity environment, improved performance in certain strategies, less overall market volatility, and more traction from strategic growth investment.

"We continue to focus on our strategic priorities to position the business for long-term success. Highlights from Q2 include:

• We hired a new chief operating officer who will oversee operations and technology, functions which are essential to enabling our strategic priorities.
• We also hired a new head of environmental, social, and governance (ESG) enablement who will oversee the firm's corporate ESG positioning, global ESG product development, regulatory engagement, and client reporting.
• We joined the Net Zero Asset Managers Initiative which supports the goal of net zero greenhouse gas emission by 2050 or sooner and demonstrates our commitment to providing investment products for those clients who have net zero ambitions.
• Our individual investor business was ranked number one in customer satisfaction and highest on all seven factors in the J.D. Power 2022 U.S.Self-Directed Investor Satisfaction Study.

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"While markets are challenged, I remain confident in our associates' ability to deliver exceptional value to our global clients. I'd like to thank our associates for their enduring commitment to our clients and to each other."

Assets Under Management

During Q2 2022, assets under management (AUM) decreased $242.1 billion to $1.31 trillion. Market depreciation, along with net distributions not reinvested, of $227.4 billion and net cash outflows of $14.7 billion reduced the firm's AUM during Q2 2022. Clients transferred $2.9 billion in net assets from the U.S. mutual funds to collective investment trusts and other investment products, of which $1.6 billion transferred into the retirement date trusts. The components of the change in AUM, by vehicle and asset class, are shown in the tables below.

								Three months ended 6/30/2022
								Subadvised		Collective
									investment
					U.S. mutual			funds and	trusts and other
(in billions)							separate		investment		Total
				funds			accounts		products
Assets under management at beginning of period	$	789.4		$	398.0		$	364.4		$	1,551.8
Net cash flows before client transfers					(11.8)			(3.6)			.7			(14.7)
Client transfers					(2.9)			1.0			1.9			-
Net cash flows after client transfers					(14.7)			(2.6)			2.6			(14.7)
Net market depreciation and losses					(117.4)			(62.6)			(47.2)			(227.2)
Net distributions not reinvested					(.2)			-		-		(.2)
Change during the period					(132.3)			(65.2)			(44.6)			(242.1)
Assets under management at June 30, 2022			$	657.1		$	332.8		$	319.8		$	1,309.7
					Three months ended 6/30/2022
					Fixed income,
(in billions)		Equity		including money			Multi-asset(1)			Alternatives(2)			Total
		market
Assets under management at beginning of	$	878.0		$	175.2	$	456.4		$	42.2		$	1,551.8
period
Net cash flows		(17.5)			3.2			(2.1)			1.7			(14.7)
Net market depreciation and losses(3)		(160.9)			(7.3)			(58.4)			(.8)			(227.4)
Change during the period		(178.4)			(4.1)			(60.5)			.9			(242.1)
Assets under management at	$	699.6		$	171.1	$	395.9		$	43.1		$	1,309.7
June 30, 2022

1. The underlying AUM of themulti-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, or have absolute return as its investment objective. Generally, only those strategies with longer than daily liquidity are included.
3. Includes distributions reinvested and not reinvested.

AUM in the firm's target date retirement products, which are reported as part of the multi-asset column in the table above, were $327.1 billion at June 30, 2022, compared with $375.2 billion at March 31, 2022. These portfolios experienced net cash inflows of $0.5 billion for Q2 2022.

Investors domiciled outside the United States accounted for 9.4% of the firm's AUM at June 30, 2022, 9.7% at March 31, 2022, and 9.9% at December 31, 2021.

The firm provides participant accounting and plan administration for defined contribution 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

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complex. As of June 30, 2022, the firm's assets under administration were $216 billion, of which $133 billion were assets we manage.

In recent years, the firm began offering 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 $7 billion at

June 30, 2022.

Financial Results

Net revenues earned in Q2 2022 were $1.5 billion, a decrease of 21.6% from Q2 2021. Average AUM in Q2 2022 were $1.41 trillion, a decrease of 11.2% from Q2 2021. The firm did not waive a significant level of money market investment advisory fees in Q2 2022 and does not expect to waive any fees for the remainder of the year. In Q2 2021, the firm voluntarily waived money market investment advisory fees of $14.3 million.

• Investment advisory revenues earned in Q2 2022 from the firm's U.S. mutual funds were $876.2 million, a decrease of 20.2% from Q2 2021. Average AUM in these funds decreased 16.2% to $711.1 billion in Q2 2022 from Q2 2021.
• Investment advisory revenues earned in Q2 2022 from subadvised funds, separate accounts, collective investment trusts and other investment products were $620.5 million, a decrease of 10.0% from Q2 2021. Average AUM for these products decreased 5.6% to $696.0 billion in Q2 2022 from Q2 2021. Investment advisory revenues and average AUM in Q2 2022 reflect OHA's revenue and related average AUM.
• The investment advisory fee annualized effective fee rate of 42.7 basis points in Q2 2022 decreased from 43.2 basis points earned in Q1 2022 and 45.2 basis points earned in Q2 2021. In comparison to Q1 2022, the annualized effective fee rate was primarily impacted by transfers to lower fee vehicles and an asset class mix shift due to market volatility, offset slightly by a reduction in money market fee waivers. Further, in comparison to Q2 2021, the annualized effective fee rate was primarily impacted by the July 2021 target date fee reductions, partially offset by ahigher-than-average effective fee rate earned on the firm's alternative asset class. Over time, the firm's effective fee rate can be impacted by market or cash flow related shifts among asset and share classes, price changes in existing products, and asset level changes in products with tiered-fee structures.
• Capitalallocation-based income in Q2 2022 reduced net revenues by $126.3 million. Capital allocation- based income will fluctuate quarter-to-quarter as it reflects the adjustment to accrued carried interest for the change in value of the affiliated funds' underlying investments assuming the value was realized as of the end of the period, regardless of whether the funds' underlying investments have been realized. The

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realization of accrued carried interest occurs over a number of years. The Q2 2022 amount represents $113.0 million in market-related reductions of accrued carried interest from investments in affiliated private investment funds and $13.3 million in non-cash amortization associated with the difference in the closing date fair value and carrying value of investments acquired as part of the OHA acquisition. For a detail of the change in accrued carried interest, which is reported as investments on the condensed consolidated balance sheet, from the end of 2021, including realized carry distributions, see the applicable table at the end of this release.

• Administrative, distribution, and servicing fees in Q2 2022 were $142.6 million, an increase of 0.4% from Q2 2021. The increase was primarily attributable to higher transfer agent servicing activities provided to the T. Rowe Price mutual funds, partially offset by lower12b-1 fees earned from certain share classes of the U.S. mutual funds.

Operating expenses in Q2 2022 were $844.4 million, a decrease of 13.1% compared to Q2 2021 and a decrease of 14.3% compared to Q1 2022. On a non-GAAP basis, the firm's operating expenses in Q2 2022 were

$947.3 million, a 1.7% increase over Q2 2021 and a decrease of 8.8% compared to Q1 2022. The firm's non-GAAP operating expenses exclude the impact of the supplemental savings plan, consolidated sponsored products, the remeasurement of the contingent consideration liability, amortization of certain acquisition-related assets, and other acquisition-related costs. The firm's 2022 operating expenses include OHA's operating expenses as a result of the acquisition at the end of 2021. OHA's operating expenses primarily impact compensation expense; technology, occupancy, and facility costs; and general, administrative and other costs.

The increase in the firm's non-GAAP operating expenses compared to the 2021 quarter was primarily attributable to salaries and benefits, the addition of OHA operating expenses, and higher costs related to the ongoing investment in the firm's technology capabilities. These increases were mostly offset by lower distribution and servicing costs and a lower interim bonus accrual. Q2 2022 operating expenses include the accrued carried interest compensation associated with capital allocation-based income. This accrued carried interest compensation is reported in non- controlling interest in the condensed consolidated balance sheet.

• Compensation and related costs on a U.S. GAAP basis were $463.4 million in Q2 2022, a decrease of 23.3%, compared to Q2 2021. Compensation and related costs, excluding the impact of the supplemental savings plan andnon-cash amortization of certain acquisition-related retention arrangements, were $544.6 million in Q2 2022, a decrease of 3.8% compared to Q2 2021. The second quarter of 2022 includes higher salaries and benefits from increased average headcount and inclusion of OHA and a lower interim bonus accrual. The firm employed 7,771 associates at June 30, 2022, an increase of 3.2% from the end of 2021.

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