SEC Filing | T. Rowe Price Group, Inc.

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10Q- Q2 2015

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________________________________

FORM 10-Q

______________________________________

QUARTERLY REPORT PURSUANT TO SECTION 13 OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2015

Commission File Number: 000-32191

______________________________________

T. ROWE PRICE GROUP, INC.

(Exact name of registrant as specified in its charter)

______________________________________



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

100 East Pratt Street, Baltimore, Maryland 21202

(Address, including Zip Code, of principal executive offices)

(410) 345-2000

(Registrant’s telephone number, including area code)

______________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. x Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months. x Yes ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.



Large accelerated filer x		Accelerated filer ¨
Non-accelerated filer ¨		Smaller reporting company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ¨ Yes x No

The number of shares outstanding of the issuer’s common stock ($.20 par value), as of the latest practicable date, July 21, 2015, is 256,212,813.

The exhibit index is at Item 6 on page 24.

PART I – FINANCIAL INFORMATION


Item 1.	Financial Statements.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions, except share data)



	12/31/2014		6/30/2015
ASSETS
Cash and cash equivalents	$	1,506.1	$	1,269.2
Accounts receivable and accrued revenue	442.8		449.4
Investments in sponsored funds	1,884.0		1,856.7
Other investments	408.3		414.4
Property and equipment, net	586.4		607.3
Goodwill	665.7		665.7
Other assets	151.1		152.8
Total assets	$	5,644.4	$	5,415.5

LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities
Accounts payable and accrued expenses	$	143.4	$	168.5
Accrued compensation and related costs	82.2		267.9
Income taxes payable	23.6		12.0
Total liabilities	249.2		448.4

Commitments and contingent liabilities

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 261,110,000 shares at December 31, 2014 and 257,428,000 at June 30, 2015	52.2		51.5
Additional capital in excess of par value	756.5		647.9
Retained earnings	4,450.1		4,141.9
Accumulated other comprehensive income	136.4		125.8
Total stockholders’ equity	5,395.2		4,967.1
Total liabilities and stockholders’ equity	$	5,644.4	$	5,415.5

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				Six months ended
	6/30/2014		6/30/2015		6/30/2014		6/30/2015
Revenues
Investment advisory fees	$	855.3	$	942.2	$	1,681.7	$	1,838.7
Administrative fees	93.6		91.6		188.1		184.6
Distribution and servicing fees	35.4		38.6		69.1		76.1
Net revenues	984.3		1,072.4		1,938.9		2,099.4

Operating expenses
Compensation and related costs	326.4		360.9		645.3		707.4
Advertising and promotion	14.6		14.2		37.2		39.5
Distribution and servicing costs	35.4		38.6		69.1		76.1
Depreciation and amortization of property and equipment	28.0		32.2		55.1		61.3
Occupancy and facility costs	36.0		39.9		71.4		78.2
Other operating expenses	70.8		78.8		138.6		151.3
Total operating expenses	511.2		564.6		1,016.7		1,113.8

Net operating income	473.1		507.8		922.2		985.6

Non-operating investment income	26.1		33.0		68.2		59.8

Income before income taxes	499.2		540.8		990.4		1,045.4
Provision for income taxes	193.4		207.6		380.3		402.7
Net income	$	305.8	$	333.2	$	610.1	$	642.7

Earnings per share on common stock
Basic	$	1.16	$	1.28	$	2.32	$	2.45
Diluted	$	1.13	$	1.24	$	2.25	$	2.39

Dividends declared per share	$	.44	$	.52	$	.88	$	3.04

The accompanying notes are an integral part of these statements.

Page 3

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in millions)



	Three months ended						Six months ended
	6/30/2014			6/30/2015			6/30/2014			6/30/2015
Net income	$	305.8		$	333.2		$	610.1		$	642.7
Other comprehensive income (loss)
Net unrealized holding gains on available-for-sale investments	37.4			5.1			59.8			22.1
Reclassification adjustments recognized in non-operating investment income:
Net gains realized on dispositions determined using average cost	(11.7		)	(22.7		)	(43.7		)	(39.3		)
Total net unrealized holding gains (losses) recognized in other comprehensive income	25.7			(17.6		)	16.1			(17.2		)
Currency translation adjustments	4.8			(1.9		)	7.3			(4.1		)
Other comprehensive income (loss) before income taxes	30.5			(19.5		)	23.4			(21.3		)
Deferred tax benefits (income taxes)	(11.6		)	7.1			(8.8		)	10.7
Total other comprehensive income (loss)	18.9			(12.4		)	14.6			(10.6		)
Total comprehensive income	$	324.7		$	320.8		$	624.7		$	632.1

The accompanying notes are an integral part of these statements.

Page 4

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)



	Six months ended
	6/30/2014			6/30/2015
Cash flows from operating activities
Net income	$	610.1		$	642.7
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization of property and equipment	55.1			61.3
Stock-based compensation expense	61.8			66.6
Realized gains on dispositions of sponsored funds	(43.7		)	(39.3		)
Net gains recognized on other investments	(11.4		)	(6.2		)
Net change in trading securities held by consolidated sponsored investment portfolios	(77.2		)	(5.0		)
Other changes in assets and liabilities	130.9			166.6
Net cash provided by operating activities	725.6			886.7

Cash flows from investing activities
Investments in sponsored funds	(242.0		)	(146.4		)
Dispositions of sponsored funds	121.8			195.6
Additions to property and equipment	(59.7		)	(79.9		)
Other investing activity	(7.9		)	(3.2		)
Net cash used in investing activities	(187.8		)	(33.9		)

Cash flows from financing activities
Repurchases of common stock	(56.9		)	(353.8		)
Common share issuances under stock-based compensation plans	39.5			42.0
Excess tax benefits from stock-based compensation plans	17.6			16.6
Dividends paid	(231.7		)	(794.5		)
Net cash used in financing activities	(231.5		)	(1,089.7		)

Cash and cash equivalents
Net change during period	306.3			(236.9		)
At beginning of year	1,398.0			1,506.1
At end of period	$	1,704.3		$	1,269.2

The accompanying notes are an integral part of these statements.

Page 5

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

(shares in thousands; dollars in millions)



	Common shares outstanding		Common stock			Additional capital in excess of par value			Retained earnings			Accumulated other comprehensive income			Total stockholders’ equity
Balances at December 31, 2014	261,110		$	52.2		$	756.5		$	4,450.1		$	136.4		$	5,395.2
Net income									642.7						642.7
Other comprehensive loss, net of tax												(10.6		)	(10.6		)
Dividends declared									(794.7		)				(794.7		)
Common stock-based compensation plans activity
Shares issued upon option exercises	1,168		.2			36.2									36.4
Restricted shares issued, net of shares withheld for taxes	3		—			(.1		)							(.1		)
Shares issued upon vesting of restricted stock units, net of shares withheld for taxes	2		—			—									—
Forfeiture of restricted awards	(45	)	—			—									—
Net tax benefits						16.5									16.5
Stock-based compensation expense						66.6									66.6
Restricted stock units issued as dividend equivalents						.1			(.1		)				—
Common shares repurchased	(4,810	)	(.9		)	(227.9		)	(156.1		)				(384.9		)
Balances at June 30, 2015	257,428		$	51.5		$	647.9		$	4,141.9		$	125.8		$	4,967.1

The accompanying notes are an integral part of these statements.

Page 6

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1	– THE COMPANY AND BASIS OF PREPARATION.

T. Rowe 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 2015 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 2014 Annual Report.


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

Accounts receivable from our sponsored mutual funds for advisory fees and advisory-related administrative services aggregate $245.8 million at December 31, 2014, and $253.1 million at June 30, 2015.

Revenues (in millions) from advisory services provided under agreements with our sponsored U.S. mutual funds and other investment clients include:



	Three months ended				Six months ended
	6/30/2014		6/30/2015		6/30/2014		6/30/2015
Sponsored U.S. mutual funds
Stock and blended asset	$	514.7	$	575.5	$	1,012.0	$	1,118.7
Bond and money market	98.7		107.5		192.2		210.2
	613.4		683.0		1,204.2		1,328.9
Other investment portfolios
Stock and blended asset	202.4		220.0		399.3		433.0
Bond, money market, and stable value	39.5		39.2		78.2		76.8
	241.9		259.2		477.5		509.8
Total	$	855.3	$	942.2	$	1,681.7	$	1,838.7

Page 7

The following table summarizes the investment portfolios and assets under management (in billions) on which we earn advisory fees.



	Average during				Average during
	the second quarter of				the first half of
	2014		2015		2014		2015
Sponsored U.S. mutual funds
Stock and blended asset	$	355.0	$	398.9	$	350.6	$	390.2
Bond and money market	100.9		107.3		98.7		106.5
	455.9		506.2		449.3		496.7
Other investment portfolios
Stock and blended asset	198.6		214.2		197.5		211.9
Bond, money market, and stable value	62.7		63.2		62.4		62.8
	261.3		277.4		259.9		274.7
Total	$	717.2	$	783.6	$	709.2	$	771.4

					As of
					12/31/2014		6/30/2015
Sponsored U.S. mutual funds
Stock and blended asset					$	373.0	$	392.9
Bond and money market					104.6		107.2
					477.6		500.1
Other investment portfolios
Stock and blended asset					206.9		210.0
Bond, money market, and stable value					62.3		62.9
					269.2		272.9
Total					$	746.8	$	773.0

Investors that we serve are primarily domiciled in the U.S.; investment advisory clients outside the U.S. account for 5.6% and 5.0% of our assets under management at December 31, 2014 and June 30, 2015, respectively.

The following table summarizes the other fees (in millions) earned from our sponsored U.S. mutual funds.



	Three months ended				Six months ended
	6/30/2014		6/30/2015		6/30/2014		6/30/2015
Administrative fees	$	73.7	$	74.6	$	148.6	$	150.6
Distribution and servicing fees	$	35.4	$	38.6	$	69.1	$	76.1

Page 8


NOTE 3	– INVESTMENTS IN SPONSORED FUNDS - AVAILABLE-FOR-SALE.

We make investments in our sponsored funds for general corporate investment purposes or to provide seed capital for newly formed funds. These sponsored funds (in millions) are voting interest entities and include:



	Aggregate cost		Unrealized holding					Aggregate fair value
	Aggregate cost		gains		losses			Aggregate fair value
December 31, 2014
Stock and blended asset funds	$	505.4	$	231.4	$	(4.2	)	$	732.6
Bond funds	1,107.9		52.0		(8.5		)	1,151.4
Total	$	1,613.3	$	283.4	$	(12.7	)	$	1,884.0

June 30, 2015
Stock and blended asset funds	$	422.9	$	224.7	$	(.4	)	$	647.2
Bond funds	1,180.5		40.3		(11.3		)	1,209.5
Total	$	1,603.4	$	265.0	$	(11.7	)	$	1,856.7

The unrealized holding losses are attributable to 12 fund holdings with an aggregate fair value of $788.5 million at December 31, 2014, and 13 fund holdings with an aggregate fair value of $403.4 million at June 30, 2015. These unrealized losses are considered temporary.


NOTE 4	– OTHER INVESTMENTS.

These investments (in millions) include:



	12/31/2014		6/30/2015
Cost method investments	$	63.7	$	64.9
Equity method investments
26% interest in UTI Asset Management Company Limited (India)	132.4		134.1
Sponsored fund investments	125.6		126.5
Other investments	5.7		5.5
Investments held as trading
Sponsored fund investments	10.3		9.5
Securities held by consolidated sponsored investment portfolios	69.6		72.9
U.S. Treasury note	1.0		1.0
Total	$	408.3	$	414.4

The securities held by consolidated sponsored investment portfolios, sponsored fund investments held as trading, and the sponsored fund investments treated as equity method investments relate to investment portfolios in which we provided initial seed capital at the time of its formation. We have determined at December 31, 2014 and June 30, 2015, that these investment portfolios are voting interest entities and, as a result, have consolidated those sponsored portfolios in which we own a majority of the voting interest.

Page 9


NOTE 5	– FAIR VALUE MEASUREMENTS.

We determine the fair value of our 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, 2014
Cash equivalents	$	1,345.8	$	—
Investments in sponsored funds - available-for-sale	1,884.0		—
Investments held as trading	27.7		52.2
Total	$	3,257.5	$	52.2

June 30, 2015
Cash equivalents	$	1,043.7	$	—
Investments in sponsored funds - available-for-sale	1,856.7		—
Investments held as trading	26.5		55.9
Total	$	2,926.9	$	55.9

NOTE 6 – STOCKHOLDERS’ EQUITY.

DIVIDENDS.

Regular cash dividends declared per share during the first six months of 2014 and 2015 were $.88 and $1.04 respectively. On February 19, 2015, the Board of Directors also declared a special cash dividend of $2.00 per share, payable on April 23, 2015 to stockholders of record as of the close of business on April 9, 2015.

COMMON SHARE REPURCHASES.

At June 30, 2015, a liability of $31.1 million is included in accounts payable and accrued expenses for common stock repurchases that settled by July 7, 2015.


NOTE 7	– STOCK-BASED COMPENSATION.

EFFECT OF SPECIAL CASH DIVIDEND.

As a result of the special cash dividend declared by the Board of Directors in February 2015, 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 dividend. On the special dividend's ex-dividend date (April 7, 2015), the number of shares authorized and the number of stock options outstanding and their exercise price were adjusted resulting in an increase of 749,578 stock options outstanding on the ex-dividend date, and no incremental compensation expense.

Page 10

STOCK OPTIONS.

The following table summarizes the status of and changes in our stock option grants during the first half of 2015. All numbers have been adjusted to reflect the effect of the special dividend as noted above.



	Options		Weighted- average exercise price
Outstanding at December 31, 2014	30,463,211		$	55.63
Semiannual grants	1,979,081		$	80.95
New hire grants	9,735		$	79.19
Non-employee director grants	8,700		$	82.40
Exercised	(1,591,893	)	$	45.01
Forfeited	(314,795	)	$	68.22
Expired	(658	)	$	63.66
Outstanding at June 30, 2015	30,553,381		$	57.71
Exercisable at June 30, 2015	17,498,513		$	49.41

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 half of 2015.



	Restricted shares		Restricted stock units		Weighted-average fair value
Nonvested at December 31, 2014	2,061,559		1,006,753		$	72.79
Time-based grants	5,200		639,105		$	82.93
Performance-based grants	—		27,975		$	82.97
Vested	(14,588	)	(9,955	)	$	78.27
Forfeited	(45,371	)	(31,633	)	$	72.97
Nonvested at June 30, 2015	2,006,800		1,632,245		$	74.62

The nonvested at June 30, 2015, includes 28,800 performance-based restricted shares and 175,500 performance-based restricted stock units. These performance-based restricted shares and units include 22,800 restricted shares and 121,050 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 June 30, 2015. Estimated future compensation expense will change to reflect future option grants; future awards of unrestricted shares, restricted stock units; changes in estimated forfeitures; changes in the probability of performance thresholds being met; and adjustments for actual forfeitures.



Third quarter 2015	$	35.3
Fourth quarter 2015	31.7
2016	87.3
2017 through 2020	88.8
Total	$	243.1

Page 11


NOTE 8	– EARNINGS PER SHARE CALCULATIONS.

The following table presents the reconciliation (in millions) of our net income 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 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.



	Three months ended						Six months ended
	6/30/2014			6/30/2015			6/30/2014			6/30/2015
Net income	$	305.8		$	333.2		$	610.1		$	642.7
Less: net income allocated to outstanding restricted stock and stock unit holders	(3.4		)	(4.1		)	(6.7		)	(9.8		)
Net income allocated to common stockholders	$	302.4		$	329.1		$	603.4		$	632.9

Weighted-average common shares
Outstanding	260.7			257.7			260.5			258.2
Outstanding assuming dilution	268.7			264.6			268.7			265.1

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		Six months ended
	6/30/2014	6/30/2015	6/30/2014	6/30/2015
Weighted-average outstanding stock options excluded	3.8	5.7	3.5	5.1

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						Six months ended
	6/30/2014			6/30/2015			6/30/2014			6/30/2015
Net deferred tax benefits (income taxes) on:
Net unrealized holding gains or losses	$	(14.6	)	$	(2.4	)	$	(23.3	)	$	(5.5	)
Reclassification adjustment recognized in the provision for income taxes related to net gains realized on dispositions	4.6			8.8			17.0			14.7
Net deferred tax benefits on net unrealized holding gains or losses	(10.0		)	6.4			(6.3		)	9.2
Net deferred tax benefits (income taxes) on currency translation adjustments	(1.6		)	.7			(2.5		)	1.5
Total deferred tax benefit (income taxes)	$	(11.6	)	$	7.1		$	(8.8	)	$	10.7

Page 12

The changes (in millions) in each component of accumulated other comprehensive income, including reclassification adjustments for the first half of 2015 are presented in the table below.



	Net unrealized holding gains
	Investments in sponsored funds			Equity share of UTI’s net unrealized holding gains			Total net unrealized holding gains			Currency translation adjustments			Total
Balances at December 31, 2014	$	165.0		$	.5		$	165.5		$	(29.1	)	$	136.4
Other comprehensive income (loss) before reclassifications and income taxes	21.9			.2			22.1			(4.1		)	18.0
Reclassification adjustments related to net gains realized on dispositions recognized in non-operating investment income, determined using average cost	(39.3		)	—			(39.3		)	—			(39.3		)
	(17.4		)	.2			(17.2		)	(4.1		)	(21.3		)
Deferred tax benefits (income taxes)	9.3			(.1		)	9.2			1.5			10.7
Other comprehensive income (loss)	(8.1		)	.1			(8.0		)	(2.6		)	(10.6		)
Balances at June 30, 2015	$	156.9		$	.6		$	157.5		$	(31.7	)	$	125.8

Page 13

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders

T. Rowe Price Group, Inc.:

We have reviewed the condensed consolidated balance sheet of T. Rowe Price Group, Inc. and subsidiaries (“the Company”) as of June 30, 2015, the related condensed consolidated statements of income and comprehensive income for the three- and six--month periods ended June 30, 2015 and 2014, the related condensed consolidated statements of cash flows for the six-month periods ended June 30, 2015 and 2014, and the related condensed consolidated statement of stockholders’ equity for the six-month period ended June 30, 2015. These condensed consolidated financial statements are the responsibility of the Company’s management.

We conducted our reviews in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of 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 Public Company Accounting Oversight Board (United States), 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.

Based on our reviews, we are not aware of any material modifications that should be made to the condensed consolidated financial statements referred to above for them to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of T. Rowe Price Group, Inc. and subsidiaries as of December 31, 2014, 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 5, 2015, 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, 2014, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

/s/ KPMG LLP

Baltimore, Maryland

July 23, 2015

Page 14


Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.

GENERAL.

Our revenues and net income are derived primarily from investment advisory services provided to individual and institutional investors in our sponsored U.S. mutual funds and other investment portfolios. The other investment portfolios include separately managed accounts, subadvised funds, and other sponsored investment portfolios including collective investment trusts, target-date retirement trusts, Luxembourg-based funds offered to investors outside the U.S., and portfolios offered through variable annuity life insurance plans. Investment advisory clients domiciled outside the U.S. account for 5% of our assets under management at June 30, 2015.

We manage a broad range of U.S., international and global stock, bond, and money market mutual funds and other investment portfolios, which meet the varied needs and objectives of individual and institutional investors. 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 affect our revenues and results of operations.

We remain debt-free with substantial liquidity and resources that allow us to take advantage of attractive growth opportunities, invest in key capabilities, including investment professionals, technologies, and new fund offerings; and, most importantly, provide our clients with strong investment management expertise and service both now and in the future. We expect to continue our investment in long-term initiatives to sustain and deepen our investment talent, add investment capabilities both in terms of new strategies and new investment vehicles, expand capabilities through enhanced technology, and broaden our distribution reach globally.

In 2014, we made a long-term strategic decision to change our delivery of certain administrative services, including fund accounting and other investment recordkeeping operations. In the second quarter of 2015, we finalized our agreement with BNY Mellon to provide such services. As part of the agreement, approximately 220 associates are expected to become employees of BNY Mellon on August 1, 2015. Though the compensation and related costs and other operating expenses line items of our consolidated income statement will be affected, we do not expect that the impact on our future operating results will be material.

BACKGROUND.

U.S. stock market returns were mixed in the second quarter of 2015. Most major indexes reached new all-time highs in May or June, but they closed below their highest levels of the quarter following a sharp sell-off at the end of June. For most of the quarter, the market was supported by merger activity, a strengthening economy, and better-than-expected first-quarter corporate earnings. As the quarter ended, global markets reacted negatively to events in Greece, including the implementation of capital controls, a missed payment to the International Monetary Fund, and the expiration of its bailout agreement.

Stocks in developed non-U.S. markets narrowly outperformed large-cap U.S. shares. In Asia, Hong Kong shares produced positive returns, lifted by Chinese economic stimulus measures, while Japanese stocks rose amid signs of stronger economic growth. European markets in aggregate saw little change in dollar terms. Stocks in emerging markets performed in line with developed non-U.S. markets. Certain markets, such as Russia, Brazil, and China, produced strong returns in dollar terms for the quarter, but Chinese shares slumped in the second half of June.

Returns of several major equity market indexes for the three- and six-month periods ended June 30, 2015 are as follows:



	Three months ended	Six months ended
Index	6/30/2015	6/30/2015
S&P 500 Index	0.3%	1.2%
NASDAQ Composite Index ⁽¹⁾	1.8%	5.3%
Russell 2000 Index	0.4%	4.8%
MSCI EAFE (Europe, Australasia, and Far East) Index	0.8%	5.9%
MSCI Emerging Markets Index	0.8%	3.1%

⁽¹⁾returns exclude dividends

Global bonds fell slightly in dollar terms in the second quarter of 2015. In the U.S., investment-grade issues declined as longer-term Treasury interest rates increased. However, yields closed below their highest levels of the quarter as fears that Greece

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would exit the eurozone prompted investors to favor the safety of U.S. government bonds. The yield on the benchmark 10-year Treasury note rose from 1.94% to 2.35% during the quarter. High yield bond returns were flat, but they outperformed high-quality issues, helped by a rebound in oil prices and lower interest rate sensitivity.

Bonds in developed non-U.S. markets fell slightly in dollar terms, as bond price depreciation was mostly offset by the positive effects of stronger European currencies versus the dollar. U.S. dollar-denominated and local currency-denominated emerging markets bonds edged lower. The dollar was not uniformly strong versus all emerging markets currencies, so returns varied by country.

Returns for several major bond market indexes for the three- and six-month periods ended June 30, 2015 are as follows:



	Three months ended	Six months ended
Index	6/30/2015	6/30/2015
Barclays U.S. Aggregate Bond Index	(1.7)%	(0.1)%
Credit Suisse High Yield Index	0.3%	2.9%
Barclays Municipal Bond Index	(0.9)%	0.1%
Barclays Global Aggregate Ex-U.S. Dollar Bond Index	(0.8)%	(5.4)%
JPMorgan Emerging Markets Bond Index Plus	(0.9)%	1.0%

ASSETS UNDER MANAGEMENT.

Assets under management ended the second quarter of 2015 at $773.0 billion, an increase of $.3 billion from March 31, 2015, and $26.2 billion from the end of 2014. Assets under management (in billions) as of December 31, 2014 and June 30, 2015, are presented by investment portfolio and investment objective in the following table.



	As of
	12/31/2014		6/30/2015
Sponsored U.S. mutual funds	$	477.6	$	500.1
Other investment portfolios	269.2		272.9
Total	$	746.8	$	773.0

	As of
	12/31/2014		6/30/2015
Stock and blended asset portfolios	$	579.9	$	602.9
Fixed income portfolios	166.9		170.1
Total	$	746.8	$	773.0

The following table details the changes in our assets under management (in billions) during the three- and six-month periods ended June 30, 2015:



	Three months ended 6/30/2015									Six months ended 6/30/2015
	Sponsored U.S. mutual funds			Other investment portfolios			Total			Sponsored U.S. mutual funds			Other investment portfolios			Total
Assets under management at beginning of period	$	497.2		$	275.5		$	772.7		$	477.6		$	269.2		$	746.8

Net cash flows before client transfers	2.5			(4.6		)	(2.1		)	8.7			(8.9		)	(0.2		)
Client transfers from mutual funds to other portfolios	(1.1		)	1.1			—			(3.9		)	3.9			—
Net cash flows after client transfers	1.4			(3.5		)	(2.1		)	4.8			(5.0		)	(0.2		)
Net market appreciation and income	1.5			0.9			2.4			17.7			8.7			26.4
Change during the period	2.9			(2.6		)	0.3			22.5			3.7			26.2

Assets under management at June 30, 2015	$	500.1		$	272.9		$	773.0		$	500.1		$	272.9		$	773.0

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The client transfers from mutual funds to other investment portfolios noted in the table above were primarily transfers from mutual funds to collective investment trusts, including our retirement date trusts.

For the second quarter of 2015, the net cash inflows, after client transfers, into the mutual funds of $1.4 billion, include net inflows of $1.5 billion into the fixed income funds and $.4 billion into the stock and blended asset funds. These net inflows were offset by net outflows from money market funds of $.5 billion. The net cash outflows during the second quarter of 2015 from the other investment portfolios were largely concentrated among a small number of institutional and subadvised clients who redeemed primarily from large-cap U.S. equity strategies.

For the six-month period ended June 30, 2015, the net cash inflows, after client transfers, into the mutual funds of $4.8 billion, include net inflows of $3.1 billion into the fixed income funds and $2.5 billion into the stock and blended asset funds. These net inflows were offset by net outflows from money market funds of $.8 billion. The net cash outflows during the first half of 2015 from the other investment portfolios were largely concentrated among a small number of institutional and subadvised clients who redeemed primarily from large-cap U.S. equity strategies.

Our target-date retirement portfolios invest in a broadly diversified portfolio of other T. Rowe Price funds or T. Rowe Price collective investment trusts, and automatically rebalance to maintain their specific asset allocation weightings. Total net cash flows for the three- and six- month periods ended June 30, 2015 include $5.2 billion and $12.7 billion, respectively, in net cash inflows sourced from our target-date retirement portfolios. Assets under management in these portfolios at June 30, 2015 totaled $166.5 billion, including $137.2 billion in target-date retirement funds and $29.3 billion in target-date retirement trusts.

We incur significant expenditures to attract new investment advisory clients and additional investments from our existing clients. These efforts involve costs that generally precede any future revenues that we might recognize from additions to our assets under management.

RESULTS OF OPERATIONS.

Second quarter of 2015 versus second quarter of 2014.



	Three months ended
	6/30/2015		6/30/2014		Dollar change		Percentage change
(in millions, except per-share data)
Investment advisory fees	$	942.2	$	855.3	$	86.9	10.2	%
Net revenues	$	1,072.4	$	984.3	$	88.1	9.0	%
Operating expenses	$	564.6	$	511.2	$	53.4	10.4	%
Net operating income	$	507.8	$	473.1	$	34.7	7.3	%
Non-operating investment income	$	33.0	$	26.1	$	6.9	26.4	%
Net income	$	333.2	$	305.8	$	27.4	9.0	%

Diluted earnings per share on common stock	$	1.24	$	1.13	$	.11	9.7	%

Average assets under management (in billions)	$	783.6	$	717.2	$	66.4	9.3	%

Investment advisory fees earned in the second quarter of 2015 increased over the comparable 2014 quarter as average assets under our management increased $66.4 billion, or 9.3%, to $783.6 billion. The average annualized effective fee rate earned on our assets under management during the second quarter of 2015 was 48.2 basis points compared with 47.8 basis points earned during the second quarter of 2014. We voluntarily waived $12.5 million in money market related fees, including advisory fees and fund expenses, in the second quarter of 2015, in order to maintain a positive yield for fund investors. The fee waivers in the second quarter of 2015 were down $2.5 million from the comparable 2014 quarter and represent about 1% of total investment advisory fees earned during the second quarter of 2015. Fees were waived from each of our money market mutual funds and trusts, which have combined net assets of $15.3 billion at June 30, 2015. We expect that these fee waivers will continue for the remainder of 2015.

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Our operating margin in the second quarter of 2015 was 47.4%, a slight decline compared to 48.1% in the 2014 quarter, as we continue to make investments to broaden and deepen our investment management, distribution, and service capabilities around the world.

Net revenues

Investment advisory revenues earned in the second quarter of 2015 from the T. Rowe Price mutual funds distributed in the U.S. were $683.0 million, an increase of $69.6 million, or 11.3%, from the comparable 2014 quarter. Average mutual fund assets under management in the second quarter of 2015 were $506.2 billion, an increase of 11.0% from the average in the second quarter of 2014.

Investment advisory revenues earned in the second quarter of 2015 from the other investment portfolios were $259.2 million, an increase of $17.3 million, or 7.2%, from the comparable 2014 quarter. Average assets under management in the second quarter of 2015 were $277.4 billion, an increase of 6.2% from the average in the second quarter of 2014.

Distribution and servicing fee revenues earned from 12b-1 plans of the Advisor Class, R Class, and variable annuity class shares of our sponsored funds and portfolios increased $3.2 million from the second quarter of 2014 on greater average assets under management in these share classes. The 12b-1 fees earned are offset entirely by the costs paid to third-party intermediaries who source these assets. These costs are reported as distribution and servicing costs in the condensed consolidated statements of income.

Operating expenses

Compensation and related costs were $360.9 million in the second quarter of 2015, an increase of $34.5 million, or 10.6%, compared to the second quarter of 2014. The largest part of the change is attributable to a $11.5 million increase in the interim accrual for our annual variable compensation programs and $17.0 million in higher base salaries and related benefits, which result from a modest increase in salaries at the beginning of 2015 combined with a 4.0% increase in our average staff size from the second quarter of 2014. The balance of the change from the 2014 quarter is attributable to an increase in non-cash stock-based compensation expense, higher other employee-related costs, and an increase in temporary personnel to support our continued investment in our capabilities. At June 30, 2015, we employed 5,991 associates.

Occupancy and facility costs, together with depreciation and amortization expense, were $72.1 million in the second quarter of 2015, up $8.1 million compared to the second quarter of 2014. The increase is primarily attributable to the added costs to update and enhance technology capabilities, including related maintenance programs.

Other operating expenses in the second quarter of 2015 were up $8.0 million from the comparable 2014 quarter, as increased business demands and our continued investment in our operating capabilities have increased costs. These higher costs in the second quarter of 2015 include those related to the firm's defined contribution recordkeeping business, information and other third-party service costs, travel costs, and other general and administrative costs.

Non-operating investment income

Net non-operating investment income, which includes the recognition of investment gains and losses, in the second quarter of 2015 increased $6.9 million from the 2014 quarter to $33.0 million. We realized gains of $22.7 million from the sale of certain of our sponsored fund investments in the second quarter of 2015 compared with $11.7 million of realized gains in the 2014 quarter. The proceeds from the sale of the fund investments in 2015 were used to provide new or additional seed capital to other sponsored funds in support of our global distribution efforts. The increase in realized gains in the 2015 quarter was offset in part by smaller net investment gains recognized on our other investment portfolios and lower dividends earned on our sponsored investment portfolios.

Provision for income taxes

The effective tax rate for the second quarter of 2015 was 38.4%, which reflects certain adjustments made in the quarter to our 2014 tax accruals. We currently estimate that our effective rate for the full-year 2015 will be about 38.7%. Our effective income tax rate reflects the relative contribution of pre-tax income generated by our non-U.S. subsidiaries that are subject to tax rates that are lower than our U.S. rates. Changes in the relative contribution of pre-tax income from U.S. and non-U.S. sources or changes in tax rates in the U.S. or relevant non-U.S. jurisdictions may affect our effective income tax rate and overall net income in the future.

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First half of 2015 versus first half of 2014.



	Six months ended
	6/30/2015		6/30/2014		Dollar Change			Percent Change
(in millions, except per-share data)
Investment advisory fees	$	1,838.7	$	1,681.7	$	157.0		9.3	%
Net revenues	$	2,099.4	$	1,938.9	$	160.5		8.3	%
Operating expenses	$	1,113.8	$	1,016.7	$	97.1		9.6	%
Net operating income	$	985.6	$	922.2	$	63.4		6.9	%
Non-operating investment income	$	59.8	$	68.2	$	(8.4	)	(12.3	)%
Net income	$	642.7	$	610.1	$	32.6		5.3	%

Diluted earnings per share on common stock	$	2.39	$	2.25	$	.14		6.2	%

Average assets under management (in billions)	$	771.4	$	709.2	$	62.2		8.8	%

Investment advisory revenues earned in the first half of 2015 increased over the comparable 2014 period, as average assets under our management increased $62.2 billion, or 8.8%, to $771.4 billion. The average annualized fee rate earned on our assets under management was 48.1 basis points in the first half of 2015, up from the 47.8 basis points earned in the first half of 2014. We waived $26.2 million in money market related fees, including advisory fees and fund expenses, in the first half of 2015, a decrease of $3.1 million from the $29.3 million waived in the 2014 period. The fee waivers in the first half of 2015 represent about 1% of our total investment advisory revenues earned during the same period.

Our operating margin in the first half of 2015 was 46.9% compared to 47.6% in the 2014 period. The slight decline is a result of the investments we have been making to broaden and deepen our investment management, distribution, and service capabilities around the world.

Net revenues

Investment advisory revenues earned from the T. Rowe Price mutual funds distributed in the U.S. increased 10.4%, or $124.7 million, to $1.3 billion, on higher average mutual fund assets. Average mutual fund assets in the first half of 2015 were $496.7 billion, an increase of 10.5% from the average for the comparable 2014 period.

Investment advisory revenues earned on the other investment portfolios for the first half of 2015 were $509.8 million, an increase of $32.3 million, or 6.8%, from the $477.5 million earned in the comparable 2014 period. Average assets in these portfolios were $274.7 billion during the first half of 2015, up $14.8 billion from the comparable 2014 period.

Administrative fee revenues decreased $3.5 million to $184.6 million in the first half of 2015. The decrease is primarily attributable to a reduction in certain administrative service fee rates paid by certain fund shareholders. Changes in administrative fee revenues are generally offset by similar changes in related operating expenses that are incurred to provide services to the funds and their investors.

Distribution and servicing fee revenues earned from 12b-1 plans of the Advisor, R, and variable annuity II class shares of our sponsored portfolios were $76.1 million in the first half of 2015, an increase of $7.0 million from the comparable 2014 period on greater average assets under management in these share classes. The 12b-1 fees earned are offset entirely by the costs paid to third-party intermediaries who source these assets. These costs are reported as distribution and servicing costs in the condensed consolidated income statements.

Operating expenses

Compensation and related costs were $707.4 million in the first half of 2015, an increase of $62.1 million, or 9.6%, compared to the 2014 period. The largest part of the increase is attributable to a $29.6 million increase in salaries and related benefits and a $21.1 million increase in our interim accrual for our annual variable compensation program. Our average staff size has

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increased 3.8% from the first half of 2014. Higher non-cash stock-based compensation expense, temporary staff expense, and other employee costs account for the remainder of the increase in compensation and related costs in the 2015 period.

Advertising and promotion costs were $39.5 million in the first half of 2015, an increase of $2.3 million from the comparable 2014 period. The increase in cost is primarily attributable to the creation and launch of a new advertising campaign. We currently expect advertising and promotion costs for the full-year 2015 to increase about 5% from 2014 levels.

Occupancy and facility costs, together with depreciation expense, increased $13.0 million, or 10.3%, compared to the first half of 2014. The increase is primarily attributable to the added costs to update and enhance technology capabilities, including related maintenance programs.

Other operating expenses were $151.3 million in the first half of 2015, an increase of $12.7 million from the comparable 2014 period as increased business demands and our continued investment in capabilities have increased costs. These costs include information and third-party service costs, costs related to our defined contribution recordkeeping business, travel costs, and other general and administrative costs.

Non-operating investment income

Our non-operating investment income, which includes the recognition of investment gains and losses, was down $8.4 million from the first half of 2014. The decrease is primarily due to the 2015 results including $39.3 million in gains realized on the sale of certain sponsored fund holdings compared with $43.7 million in gains realized in the comparable 2014 period. The balance of the decrease primarily results from smaller net investment gains recognized on our other investment portfolios and net foreign currency transaction losses recognized in the second quarter of 2015.

CAPITAL RESOURCES AND LIQUIDITY.

Operating activities during the first half of 2015 provided cash flows of $886.7 million, up $161.1 million from the 2014 period. We used $72.2 million less cash in the first half of 2015 compared with the 2014 period to seed new sponsored investment portfolios that we consolidate and treat their underlying investment holdings as trading securities. Higher net income, non-cash depreciation and amortization, and non-cash stock-based compensation in 2015 period increased cash flows by $43.6 million. Timing differences on the cash settlement of our assets and liabilities increased our operating cash flows by $35.7 million compared to the 2014 period. Our interim operating cash flows do not include the cash impact of variable compensation that is accrued throughout the year before being substantially paid out in December.

Net cash used in investing activities totaled $33.9 million in the first half of 2015, a decrease of $153.9 million from the comparable 2014 period, as net investments made into our sponsored funds declined by $169.4 million from the 2014 period. We increased our property and equipment additions by $20.2 million during the first half of 2015 compared to the 2014 period.

Net cash used in financing activities was $1,089.7 million in the first half of 2015, up $858.2 million from the comparable 2014 period. The payment of a $2.00 special dividend on April 23, 2015, and an 18% increase in our regular quarterly per-share dividend, accounted for $562.8 million of the increase from the 2014 period. We also increased our common stock repurchases by $296.9 million during the first half of 2015 compared with the 2014 period.

Our cash and sponsored investment holdings at June 30, 2015, were $3.1 billion, and we have no debt. We anticipate property and equipment expenditures for the full year 2015 to be approximately $175 million and expect to fund them from our operating resources. We generally repurchase shares of our common stock over time to offset the dilution created by our equity-based compensation plans. For the first half of 2015, we have expended $385 million to repurchase 4.8 million shares, or nearly 2%, of our outstanding common stock. Given the availability of our financial resources, we do not maintain an available external source of liquidity.

NEW ACCOUNTING STANDARDS.

In May 2014, the FASB issued Accounting Standards Update No. 2014-09 - Revenue from Contracts with Customers. The objective of the new standard is to provide a single, comprehensive revenue recognition model for all contracts with customers to improve comparability within industries, across industries, and across capital markets. The revenue standard contains principles that will be applied to determine the measurement of revenue and timing of when it is recognized. In July 2015, the FASB voted to defer the effective date of the standard by one year. We would be required to adopt the new standard on January 1, 2018. We are currently evaluating the impact this standard will have on our financial position and results of operations.

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In February 2015, the FASB issued Accounting Standards Update No. 2015-02 - Consolidation (Topic 810): Amendments to the Consolidation Analysis. This standard modifies existing consolidation guidance for reporting companies that are required to evaluate whether they should consolidate certain legal entities. ASU 2015-02 is effective for fiscal years and interim periods within those years beginning after December 15, 2015, and requires either a retrospective or a modified retrospective approach to adoption. The guidance does permit early adoption. We are currently evaluating the impact this standard will have on our financial position and results of operations.

We have considered all other newly issued accounting guidance that is applicable to our operations and the preparation of our condensed consolidated statements, including that which 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.

FORWARD-LOOKING INFORMATION.

From time to time, information or statements provided by or on behalf of T. Rowe Price, including those within this report, may contain certain forward-looking information, including information or anticipated information relating to: our revenues, net income and earnings per share on common stock; changes in the amount and composition of our assets under management; our expense levels; our estimated effective income tax rate; and our expectations regarding financial markets, future transactions, dividends, investments, capital expenditures, stock repurchases, and other conditions. Readers are cautioned that any forward-looking information provided by or on behalf of T. Rowe Price is not a guarantee of future performance. Actual results may differ materially from those in forward-looking information because of various factors including, but not limited to, those discussed below and in Item 1A, Risk Factors, of our Form 10-K Annual Report for 2014. Further, forward-looking statements speak only as of the date on which they are made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which it is made or to reflect the occurrence of unanticipated events.

Our future revenues and results of operations will fluctuate primarily due to changes in the total value and composition of assets under our management. Such changes result from many factors including, among other things: cash inflows and outflows in the T. Rowe Price U.S. mutual funds (Price funds) and other managed investment portfolios; fluctuations in global financial markets that result in appreciation or depreciation of the assets under our management; our introduction of new mutual funds and investment portfolios; and changes in retirement savings trends relative to participant-directed investments and defined contribution plans. The ability to attract and retain investors’ assets under our management is dependent on investor sentiment and confidence; the relative investment performance of the Price funds and other managed investment portfolios as compared to competing offerings and market indexes; the ability to maintain our investment management and administrative fees at appropriate levels; competitive conditions in the mutual fund, asset management, and broader financial services sectors; and our level of success in implementing our strategy to expand our business. Our revenues are substantially dependent on fees earned under contracts with the Price funds and could be adversely affected if the independent directors of one or more of the Price funds terminated or significantly altered the terms of the investment management or related administrative services agreements. Non-operating investment income will also fluctuate primarily due to the size of our investments, changes in their market valuations, and any other-than-temporary impairments that may arise, or in the case of our equity method investments, our proportionate share of the investee’s net income.

Our future results are also dependent upon the level of our expenses, which are subject to fluctuation for the following or other reasons: changes in the level of our advertising expenses in response to market conditions, including our efforts to expand our investment advisory business to investors outside the U.S. and to further penetrate our distribution channels within the U.S.; variations in the level of total compensation expense due to, among other things, bonuses, stock option grants and other equity grants, other incentive awards, changes in our employee count and mix, and competitive factors; any goodwill or other asset impairment that may arise; fluctuation in foreign currency exchange rates applicable to our investment in and the costs of our international operations; expenses and capital costs, such as technology assets, depreciation, amortization, and research and development, incurred to maintain and enhance our administrative and operating services infrastructure; unanticipated costs that may be incurred to protect investor accounts and the goodwill of our clients; and disruptions of services, including those provided by third parties, such as facilities, communications, power, and the mutual fund transfer agent and accounting systems.

Our business is also subject to substantial governmental regulation, and changes in legal, regulatory, accounting, tax, and compliance requirements may have a substantial effect on our operations and results, including but not limited to effects on costs that we incur and effects on investor interest in mutual funds and investing in general, or in particular classes of mutual funds or other investments.

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Item 3.	Quantitative and Qualitative Disclosures About Market Risk.

There has been no material change in the information provided in Item 7A of the Form 10-K Annual Report for 2014.


Item 4.	Controls and Procedures.

Our management, including our principal executive and principal financial officers, has evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2015. Based on that evaluation, our principal executive and principal financial officers have concluded that our disclosure controls and procedures as of June 30, 2015, are effective at the reasonable assurance level to ensure that the information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, including this Form 10-Q quarterly report, is recorded, processed, summarized, and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms, and to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Our management, including our principal executive and principal financial officers, has evaluated any change in our internal control over financial reporting that occurred during the second quarter of 2015, and has concluded that there was no change during the second quarter of 2015 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION


Item 1.	Legal Proceedings.

From time to time, 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 that an adverse determination in one or more pending claims would have a material adverse effect on our financial position or results of operations is remote.


Item 1A.	Risk Factors.

There have been no material changes in the information provided in Item 1A of our Form 10-K Annual Report for 2014.


Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.



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
April	42,927	$	82.18	—	19,489,755
May	1,308,972	$	81.34	1,300,000	18,189,755
June	2,105,769	$	78.87	2,099,010	16,090,745
Total	3,457,668	$	79.84	3,399,010

Shares repurchased by us in a quarter may include repurchases conducted pursuant to publicly announced board authorization, outstanding shares surrendered to the company to pay the exercise price in connection with swap exercises of employee stock options, and shares withheld to cover the minimum tax withholding obligation associated with the vesting of restricted stock awards. Of the total number of shares purchased during the second quarter of 2015, 57,687 were related to shares surrendered in connection with employee stock option exercises and 971 were related to shares withheld to cover tax withholdings associated with the vesting of restricted stock awards.

The maximum number of shares that may be purchased are available under the Board of Directors’ September 8, 2010 and December 11, 2014, publicly announced authorization. The 3,399,010 shares of our common stock were repurchased pursuant to the Board of Directors’ September 8, 2010, publicly announced authorizations.


Item 4.	Mine Safety Disclosures.

Not applicable.


Item 5.	Other Information.

On July 23, 2015, we issued a press release reporting our results of operations for the second quarter of 2015 and first six months of 2015. A copy of that press release is furnished herewith as Exhibit 99. This information shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933.

SEC FILINGS.

We make available free of charge through our website our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to Section 13(a) of the Exchange Act as soon as reasonably practicable after we electronically file them with, or furnish them to, the SEC. To obtain any of this information, access our website at troweprice.com. We use our website as a channel of distribution for material company information.

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Item 6.	Exhibits.

The following exhibits required by Item 601 of Regulation S-K are furnished herewith.



3(i).1		Charter of T. Rowe Price Group, Inc., as Amended by Articles of Amendment dated April 10, 2008. (Incorporated by reference from Form 10-Q Report for the quarterly period ended June 30, 2008 filed on April 10, 2008; File No. 033-07012-99).

3(ii)		Amended and Restated By-Laws of T. Rowe Price Group, Inc. as of February 12, 2009. (Incorporated by reference from Form 8-K Current Report file on February 17, 2009; File No. 033-07012-99).

10.03		Transfer Agency and Service Agreement as of January 1, 2015, between T. Rowe Price Services, Inc. and the T. Rowe Price Funds. (Incorporated by reference from Form 485BPOS filed on April 27, 2015; File No. 033-16567).

10.04		Agreement as of January 1, 2015, between T. Rowe Price Retirement Plan Services, Inc. and certain of the T. Rowe Price Funds. (Incorporated by reference from Form 485BPOS filed on April 27, 2015; File No. 033-16567).

10.05		Fund Accounting Services Agreement as of January 1, 2014 between T. Rowe Price Associates, Inc. and the T. Rowe Price Funds. (Incorporated by reference from Form 485BPOS filed on April 27, 2015; File No. 033-16567).

10.18.1		Amended and Restated 2012 Long-term Incentive Plan. (Incorporated by reference from Form 10-Q for the quarterly period ended March 31, 2015 filed on April 22, 2015; File No. 000-32191).

15		Letter 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		Earnings release issued July 23, 2015, reporting our results of operations for the second quarter and first half of 2015.

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 (File name: trow-20150630.xml).

		101.SCH XBRL Taxonomy Extension Schema Document (File name: trow-20150630.xsd).

		101.CAL XBRL Taxonomy Calculation Linkbase Document (File name: trow-20150630_cal.xml).

		101.LAB XBRL Taxonomy Label Linkbase Document (File name: trow-20150630_lab.xml).

		101.PRE XBRL Taxonomy Presentation Linkbase Document (File name: trow-20150630_pre.xml).

		101.DEF XBRL Taxonomy Definition Linkbase Document (File name: trow-20150630_def.xml).

Page 24

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on July 23, 2015.

T. Rowe Price Group, Inc.

By: /s/ Kenneth V. Moreland

Vice President, Chief Financial Officer and Treasurer

Page 25

TROW-EX15_Q2 2015-10Q

EXHIBIT 15 Letter from KPMG LLP, independent registered public accounting firm,

re unaudited interim financial information

T. Rowe Price Group, Inc.

100 East Pratt Street

Baltimore, Maryland 21202

Re: Registration Statements on Form S-8: No. 33-7012, No. 333-90967, No. 333-59714, No. 333-120882, No. 333-120883, No. 333-142092, No. 333-167317, No. 333-180904, and No. 333-199560.

With respect to the subject registration statements, we acknowledge our awareness of the use therein of our report dated July 23, 2015 related to our review of interim financial information.

Pursuant to Rule 436 under the Securities Act of 1933 (the Act), such report is not considered part of a registration statement prepared or certified by an independent registered public accounting firm, or a report prepared or certified by an independent registered public accounting firm within the meaning of Sections 7 and 11 of the Act.

/s/ KPMG LLP

Baltimore, Maryland

July 23, 2015

TROW-EX31(i).1_Q2 2015

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

I, James A. C. Kennedy, certify that:


1.	I have reviewed this Form 10-Q Quarterly Report for the quarterly period ended June 30, 2015 of T. Rowe Price Group, Inc.;


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

July 23, 2015

/s/ James A.C. Kennedy

Chief Executive Officer and President

TROW-EX31(i).2_Q2 2015

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

I, Kenneth V. Moreland, certify that:


1.	I have reviewed this Form 10-Q Quarterly Report for the quarterly period ended June 30, 2015 of T. Rowe Price Group, Inc.;


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

July 23, 2015

/s/ Kenneth V. Moreland

Vice President, Chief Financial Officer and Treasurer

TROW-EX32_Q2 2015

EXHIBIT 32 Section 1350 Certifications

We certify, to the best of our knowledge, based upon a review of the Form 10-Q Quarterly Report for the quarterly period ended June 30, 2015 of T. Rowe Price Group, Inc., that:

(1) The Form 10-Q Quarterly Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Form 10-Q Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of T. Rowe Price Group, Inc.

July 23, 2015

/s/ James A.C. Kennedy

Chief Executive Officer and President

/s/ Kenneth V. Moreland

Vice President, Chief Financial Officer and Treasurer

A signed original of this written statement has been provided to T. Rowe Price Group, Inc. and will be retained by T. Rowe Price Group, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

q22015trowpressrelease2

1 NEWS RELEASE T. ROWE PRICE GROUP REPORTS SECOND QUARTER 2015 RESULTS Assets Under Management Increase to $773.0 Billion BALTIMORE (July 23, 2015) - T. Rowe Price Group, Inc. (NASDAQ-GS: TROW) today reported its second quarter of 2015 results, including net revenues of $1.1 billion, net income of $333.2 million, and diluted earnings per common share of $1.24. On a comparable basis, net revenues were $984.3 million, net income was $305.8 million, and diluted earnings per common share was $1.13 in the second quarter of 2014. Financial Highlights Three months ended Percentage Change Six months ended Percentage Change (in millions, exception per-share data) 6/30/2014 6/30/2015 6/30/2014 6/30/2015 Investment advisory fees $ 855.3 $ 942.2 10% $ 1,681.7 $ 1,838.7 9 % Net revenues $ 984.3 $ 1,072.4 9% $ 1,938.9 $ 2,099.4 8 % Operating expenses $ 511.2 $ 564.6 10% $ 1,016.7 $ 1,113.8 10 % Net operating income $ 473.1 $ 507.8 7% $ 922.2 $ 985.6 7 % Net non-operating investment income $ 26.1 $ 33.0 26% $ 68.2 $ 59.8 (12)% Net income $ 305.8 $ 333.2 9% $ 610.1 $ 642.7 5 % Diluted earnings per share $ 1.13 $ 1.24 10% $ 2.25 $ 2.39 6 % Average assets under management (in billions) $ 717.2 $ 783.6 9% $ 709.2 $ 771.4 9 % Assets under management at June 30, 2015 were $773.0 billion, an increase of $.3 billion from March 31, 2015 and $26.2 billion from the end of 2014. Three months ended 6/30/2015 Six months ended 6/30/2015 (in billions) Sponsored U.S. mutual funds Other investment portfolios Total Sponsored U.S. mutual funds Other investment portfolios Total Assets under management at beginning of period $ 497.2 $ 275.5 $ 772.7 $ 477.6 $ 269.2 $ 746.8 Net cash flows before client transfers 2.5 (4.6) (2.1) 8.7 (8.9) (.2) Client transfers from mutual funds to other portfolios (1.1) 1.1 — (3.9) 3.9 — Net cash flows after client transfers 1.4 (3.5) (2.1) 4.8 (5.0) (.2) Net market appreciation and income 1.5 .9 2.4 17.7 8.7 26.4 Change during the period 2.9 (2.6) .3 22.5 3.7 26.2 Assets under management at June 30, 2015 $ 500.1 $ 272.9 $ 773.0 $ 500.1 $ 272.9 $ 773.0

2 For the three-month period ended June 30, 2015, the net cash inflows after client transfers into the mutual funds of $1.4 billion include net inflows of $1.5 billion into the fixed income funds and $.4 billion into the stock and blended asset funds. These net inflows were offset by net outflows from money market funds of $.5 billion. The net cash outflows during the second quarter of 2015 from the other investment portfolios were largely concentrated among a small number of institutional and subadvised clients who redeemed primarily from large-cap U.S. equity strategies. The firm's overall net cash flows for the second quarter of 2015 include $5.2 billion that originated in the firm's target-date retirement strategies, which totaled $166.5 billion in assets under management at June 30, 2015. These target-date assets contribute to the nearly $213 billion of assets under management in the firm's asset allocation portfolios. T. Rowe Price remains debt-free with ample liquidity, including cash and sponsored portfolio investment holdings of nearly $3.1 billion at June 30, 2015. During the second quarter of 2015, the firm expended $271 million to repurchase 3.4 million shares. For the first half of 2015, the firm has expended $385 million to repurchase 4.8 million shares, or nearly 2%, of its outstanding common stock, and invested $80 million in capitalized technology and facilities. Capital expenditures for the full year 2015 are expected to be approximately $175 million. Investment Performance For the three-year period ended June 30, 2015, 76% of the T. Rowe Price mutual funds across their share classes outperformed their comparable Lipper averages on a total return basis, 80% outperformed for the five- year period, 86% outperformed for the 10-year period, and 78% outperformed for the one-year period. In addition, T. Rowe Price stock, bond, and blended asset funds that ended the quarter with an overall rating of four or five stars from Morningstar account for 82% of the assets under management in the firm's rated funds. The performance of the firm's institutional strategies against their benchmarks was substantially similar. The firm's target-date retirement funds continue to deliver very attractive long-term performance, with 100% of these funds outperforming their comparable Lipper averages on a total return basis for the three- and five-year periods ended June 30, 2015. Financial Results Investment advisory revenues earned in the second quarter of 2015 from the T. Rowe Price mutual funds distributed in the U.S. were $683.0 million, an increase of $69.6 million, or 11%, from the comparable 2014 quarter. Average mutual fund assets under management in the second quarter of 2015 were $506.2 billion, an increase of 11% from the average in the second quarter of 2014. Investment advisory revenues earned in the second quarter of 2015 from the other investment portfolios were $259.2 million, an increase of $17.3 million, or 7%, from the comparable 2014 quarter. Average assets under management in the second quarter of 2015 were $277.4 billion, an increase of 6% from the average in the second quarter of 2014. Investors domiciled outside the United States accounted for about 5% of the firm's assets under management at June 30, 2015.

3 Money market advisory fees and other fund expenses voluntarily waived by the firm to maintain positive yields for investors in the second quarter of 2015 were $12.5 million, compared with $15.0 million in the 2014 quarter. The firm expects that it will continue to waive such fees for the remainder of the year. Operating expenses were $564.6 million in the second quarter of 2015, up $53.4 million from the comparable 2014 quarter. Compensation and related costs have increased $34.5 million from the second quarter of 2014, due primarily to higher salaries, benefits, and related employee costs from modest base salary increases at the beginning of the year and added headcount; an increase in the interim accrual for year-end bonus compensation; and higher stock-based compensation. The firm has increased its average staff size by 4.0% from the second quarter of 2014. At June 30, 2015, the firm employed 5,991 associates. Advertising and promotion costs were $14.2 million in the second quarter of 2015, compared with $14.6 million in the comparable 2014 period. The firm currently expects advertising and promotion costs for the full-year 2015 to increase about 5% from 2014 levels. Occupancy and facility costs, together with depreciation and amortization expense, were $72.1 million in the second quarter of 2015, up $8.1 million compared to the second quarter of 2014. The increase is primarily attributable to the added costs to update and enhance technology capabilities, including related maintenance programs. Other operating expenses in the second quarter of 2015 were up $8.0 million from the comparable 2014 quarter, as increased business demands and the firm's continued investment in its operating capabilities have increased costs. These higher costs in the second quarter of 2015 include costs related to the firm's defined contribution recordkeeping business, information and other third-party service costs, travel costs, and other general and administrative costs. Net non-operating investment income in the second quarter of 2015 increased $6.9 million from the 2014 quarter. The firm realized gains of $22.7 million from the sale of certain of its sponsored fund investments in the second quarter of 2015 compared with $11.7 million of realized gains in the 2014 quarter. The proceeds from the sale of the fund investments in 2015 were used to provide new or additional seed capital to other sponsored funds in support of the firm's global distribution efforts. The increase in realized gains in the 2015 quarter was offset in part by smaller net investment gains recognized on the firm's other investment portfolios and lower dividends earned on its sponsored investment portfolios. The firm's effective tax rate for the second quarter of 2015 is 38.4%, which reflects certain adjustments made in the quarter to the 2014 tax accruals. The firm currently estimates that its effective rate for the full-year 2015 will be about 38.7%.

4 Management Commentary James A. C. Kennedy, the company’s chief executive officer and president, commented: “U.S. economic growth picked up in the second quarter, as evidenced by increased consumer spending and exports, solid jobs improvement, and income growth. While oil prices ticked up from their first-quarter lows, they remain subdued and should continue to provide a tailwind for consumers and global economies. Corporate earnings also rose modestly. The Fed once again deferred its first rate hike since 2006, though improving economic data suggest the central bank could begin raising short-term interest rates later this year. We believe the pace of those rate hikes will be gradual. “The overseas economic picture was mixed. Europe’s growth outlook improved and deflation fears abated, but fallout from the Greek debt crisis and the political turmoil it has created on the Continent could hinder the broad recovery. Japanese growth likewise improved, although structural reforms have been slow to materialize. Weakening Chinese economic growth and the sharp downturn in Chinese asset prices since mid-June clearly bear close watching, as they could have broader economic and political ramifications. “Against this backdrop, major U.S. stock indexes reached new highs during the quarter, before retreating by the end of June. U.S. bond returns were mostly negative, but high yield issues had a modestly positive return. The broad MSCI indexes measuring equities in developed non-U.S. markets and emerging markets rose less than 1% in U.S. dollar terms. Global government bonds fell slightly, and bond returns in emerging markets varied as U.S. currency strength moderated and countries pursued divergent monetary policies. “Global market volatility has increased and is likely to remain higher for the near term. Given the significant appreciation of many asset classes over the last six years, we believe investors should continue to temper their performance expectations. U.S. equity valuations are mostly full and earnings growth could be harder to achieve as the economic expansion matures. With global bond yields at or near historically low levels, we expect modest fixed income returns going forward. “Our investment performance for our clients generally remains very strong, especially in our asset allocation portfolios. Our financial strength allows us to continue to invest in developing our talent, broadening our capabilities, and gaining efficiencies. We are confident that these investments will enable us to maintain competitive investment performance, further broaden our distribution reach, and meet changing client needs.” 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 second quarter of 2015 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 June 30, 2015.

5 Certain statements in this earnings release may represent “forward-looking information,” including information relating to anticipated changes in revenues, net income and earnings per common share, anticipated changes in the amount and composition of assets under management, anticipated expense levels, estimated tax rates, and expectations regarding financial results, future transactions, investments, capital expenditures, dividends, stock repurchases, and other market conditions. For a discussion concerning risks and other factors that could affect future results, see the firm's 2014 Form 10-K. Founded in 1937, Baltimore-based T. Rowe Price (troweprice.com) is a global investment management organization that provides a broad array of mutual funds, subadvisory services, and separate account management for individual and institutional investors, retirement plans, and financial intermediaries. The organization also offers a variety of sophisticated investment planning and guidance tools. T. Rowe Price's disciplined, risk-aware investment approach focuses on diversification, style consistency, and fundamental research. CONTACT T. ROWE PRICE, PUBLIC RELATIONS Brian Lewbart 410-345-2242 brian_lewbart@troweprice.com Bill Benintende 410-345-3482 bill_benintende@troweprice.com Kylie Muratore 410-345-2533 kylie_muratore@troweprice.com

6 Unaudited Condensed Consolidated Statements of Income (in millions, except per share amounts) Three months ended Six months ended Revenues 6/30/2014 6/30/2015 6/30/2014 6/30/2015 Investment advisory fees $ 855.3 $ 942.2 $ 1,681.7 $ 1,838.7 Administrative fees 93.6 91.6 188.1 184.6 Distribution and servicing fees 35.4 38.6 69.1 76.1 Net revenues 984.3 1,072.4 1,938.9 2,099.4 Operating expenses Compensation and related costs 326.4 360.9 645.3 707.4 Advertising and promotion 14.6 14.2 37.2 39.5 Distribution and servicing costs 35.4 38.6 69.1 76.1 Depreciation and amortization of property and equipment 28.0 32.2 55.1 61.3 Occupancy and facility costs 36.0 39.9 71.4 78.2 Other operating expenses 70.8 78.8 138.6 151.3 Total operating expenses 511.2 564.6 1,016.7 1,113.8 Net operating income 473.1 507.8 922.2 985.6 Non-operating investment income 26.1 33.0 68.2 59.8 Income before income taxes 499.2 540.8 990.4 1,045.4 Provision for income taxes 193.4 207.6 380.3 402.7 Net income $ 305.8 $ 333.2 $ 610.1 $ 642.7 Net income allocated to common stockholders Three months ended Six months ended 6/30/2014 6/30/2015 6/30/2014 6/30/2015 Net income $ 305.8 $ 333.2 $ 610.1 $ 642.7 Less: net income allocated to outstanding restricted stock and stock unit holders (3.4) (4.1 ) (6.7) (9.8) Net income allocated to common stockholders $ 302.4 $ 329.1 $ 603.4 $ 632.9 Earnings per share on common stock Basic $ 1.16 $ 1.28 $ 2.32 $ 2.45 Diluted $ 1.13 $ 1.24 $ 2.25 $ 2.39 Weighted-average common shares Outstanding 260.7 257.7 260.5 258.2 Outstanding assuming dilution 268.7 264.6 268.7 265.1 Dividends declared per share, including a $2.00 per share special cash dividend declared and paid in first half of 2015 $ .44 $ .52 $ .88 $ 3.04

7 Investment Advisory Revenues (in millions) Three months ended Six months ended 6/30/2014 6/30/2015 6/30/2014 6/30/2015 Sponsored U.S. mutual funds Stock and blended asset $ 514.7 $ 575.5 $ 1,012.0 $ 1,118.7 Bond and money market 98.7 107.5 192.2 210.2 613.4 683.0 1,204.2 1,328.9 Other investment portfolios Stock and blended asset 202.4 220.0 399.3 433.0 Bond, money market, and stable value 39.5 39.2 78.2 76.8 241.9 259.2 477.5 509.8 Total $ 855.3 $ 942.2 $ 1,681.7 $ 1,838.7 Average Assets Under Management (in billions) Three months ended Six months ended 6/30/2014 6/30/2015 6/30/2014 6/30/2015 Sponsored U.S. mutual funds Stock and blended asset $ 355.0 $ 398.9 $ 350.6 $ 390.2 Bond and money market 100.9 107.3 98.7 106.5 455.9 506.2 449.3 496.7 Other investment portfolios Stock and blended asset 198.6 214.2 197.5 211.9 Bond, money market, and stable value 62.7 63.2 62.4 62.8 261.3 277.4 259.9 274.7 Total $ 717.2 $ 783.6 $ 709.2 $ 771.4 Ending Assets Under Management (in billions) As of 12/31/2014 6/30/2015 Sponsored U.S. mutual funds Stock and blended asset $ 373.0 $ 392.9 Bond and money market 104.6 107.2 477.6 500.1 Other investment portfolios Stock and blended asset 206.9 210.0 Bond, money market, and stable value 62.3 62.9 269.2 272.9 Total $ 746.8 $ 773.0 Stock and blended asset portfolios $ 579.9 $ 602.9 Fixed income portfolios 166.9 170.1 Total $ 746.8 $ 773.0 Condensed Consolidated Cash Flows Information (in millions) Six months ended 6/30/2014 6/30/2015 Cash provided by operating activities, including $66.6 of stock-based compensation expense in 2015 $ 725.6 $ 886.7 Cash used in investing activities, including ($79.9) for additions to property and equipment and $49.2 in net proceeds from sponsored fund dispositions in 2015 (187.8) (33.9) Cash used in financing activities, including common stock repurchases of ($353.8) and dividends paid of ($794.5) in 2015 (231.5) (1,089.7) Net change in cash during the period $ 306.3 $ (236.9) Condensed Consolidated Balance Sheet Information (in millions) As of 12/31/2014 6/30/2015 Cash and cash equivalents $ 1,506.1 $ 1,269.2 Accounts receivable and accrued revenue 442.8 449.4 Investments in sponsored funds 1,884.0 1,856.7 Other investments 408.3 414.4 Property and equipment, net 586.4 607.3 Goodwill 665.7 665.7 Other assets 151.1 152.8 Total assets 5,644.4 5,415.5 Total liabilities 249.2 448.4 Stockholders' equity, 257.4 common shares outstanding at June 30, 2015, includes net unrealized holding gains of $157.5 at June 30, 2015 $ 5,395.2 $ 4,967.1