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What changed in T. Rowe Price's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of T. Rowe Price's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+430 added−453 removedSource: 10-K (2024-02-16) vs 10-K (2023-02-15)

Top changes in T. Rowe Price's 2023 10-K

430 paragraphs added · 453 removed · 327 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

59 edited+16 added−58 removed15 unchanged
Biggest changeAs such, we have been responding with several strategic, multi-year initiatives that are designed to strengthen our long-term competitive position and to: • Access growth through improved investment vehicles, technology, sales and content. • Focus on further growth in countries where we have an existing business by investing more in resources, products, and marketing in high opportunity countries. • Deepen client relationships and renew our individual client base by innovating and investing in our capabilities to deliver a differentiated offer to clients. • Broaden our reach in the private and alternatives market by leveraging our distribution channels and organically expanding our investment capabilities. 20 Page 2 Table of Contents • Strengthen our distribution technology to enhance the digital client experience and client reporting. • Attract and retain top talent, enable effective hybrid collaboration, and deliver on our expanded diversity, equity, and inclusion goals. • Deliver strong financial results and balance sheet strength for our stockholders over the long term.
Biggest changeOur ongoing financial strength and discipline allows us to respond to these opportunities with several strategic, multi-year initiatives that are designed to strengthen our long-term competitive position and to: • Sustain our leadership position in retirement. • Access growth of the U.S. wealth management channel through improved vehicle capabilities, technology, specialist sales, and content. • Focus on further global growth in select high-opportunity countries where we have existing business by investing more in resources, products, and marketing. • Deepen client relationships and renew our individual investor base by innovating and investing in our capabilities to deliver world class service and a differentiated offer to clients. • Broaden our reach in the private and alternatives market by leveraging our distribution channels and expanding our investment capabilities. • Strengthen our distribution technology to enhance the digital client experience and client reporting. • Attract and retain top talent, enable effective hybrid collaboration, and deliver on our expanded diversity, equity, and inclusion goals. • Nurture our brand globally and leverage it effectively across channels and geographies. • Deliver strong financial results and balance sheet strength for our stockholders over the long term. 20 Page 2 Table of Contents ASSETS UNDER MANAGEMENT (AUM).
Rowe Price Associates and certain subsidiaries are registered as commodity trading advisors and/or commodity pool operators with the Commodity Futures Trading Commission and are members of the National Futures Association. Net Capital Requirements Certain of our subsidiaries are subject to net capital requirements, including those of various federal, state, and international regulatory agencies.
Rowe Price Associates and certain subsidiaries are registered as commodity trading advisors and/or commodity pool operators with the Commodity Futures Trading Commission and are members of the National Futures Association. Net Capital Requirements Certain subsidiaries are subject to net capital requirements, including those of various federal, state, and international regulatory agencies.
The other sponsored products include: open-ended investment products offered to investors outside the U.S., products offered through variable annuity life insurance plans in the U.S., affiliated private investment funds and collateralized loan obligations.
The other sponsored investment portfolios include: open-ended investment products offered to investors outside the U.S., products offered through variable annuity life insurance plans in the U.S., affiliated private investment funds and sponsored collateralized loan obligations.
In order to attract and retain the highest quality talent, we develop key talent and succession plans, invest in Company diversity and inclusion initiatives, provide opportunities for our associates to learn and grow, and provide strong, competitive, and regionally specific benefits and programs that promote the health and wellness of our associates, both personally and financially.
In order to attract and retain the highest quality talent, we develop key talent and succession plans, invest in firm diversity and inclusion initiatives, provide opportunities for our associates to learn and grow, and provide strong, competitive, and regionally specific benefits and programs that promote the health and wellness of our associates, both personally and financially.
We maintain a strong corporate culture that is focused on delivering strong long-term investment performance and world-class service to our clients. We distribute our broad array of active investment strategies through a diverse set of distribution channels and vehicles to meet the needs of our clients globally.
We maintain a strong corporate culture that is focused on delivering strong long-term investment performance and world-class service to our clients. We distribute our broad array of active investment solutions through a diverse set of distribution channels and vehicles to meet the needs of our clients globally.
These administrative services are provided by several of our subsidiaries and include mutual fund transfer agent, accounting, distribution, and shareholder services; participant recordkeeping and transfer agent services for defined contribution retirement plans investing in U.S. mutual funds; recordkeeping services for defined contribution retirement plans investing in mutual funds outside the T.
These administrative services are provided by several of our subsidiaries and include mutual fund transfer agent, fund/portfolio accounting, distribution, and shareholder services; participant recordkeeping and transfer agent services for defined contribution retirement plans investing in our sponsored U.S. mutual funds; recordkeeping services for defined contribution retirement plans investing in mutual funds outside the T.
In addition, our website includes the following information: • our financial statement information from our periodic SEC filings in the form of XBRL data files that may be used to facilitate computer-assisted investor analysis; • corporate governance information including our governance guidelines, committee charters, senior officer code of ethics and conduct, and other governance-related policies; 20 Page 14 Table of Contents • other news and announcements that we may post from time to time that investors might find useful or interesting, including our monthly assets under management disclosure and periodic investor presentations; and • opportunities to sign up for email alerts and RSS feeds to have information pushed in real time.
In addition, our website includes the following information: • our financial statement information from our periodic SEC filings in the form of XBRL data files that may be used to facilitate computer-assisted investor analysis; • corporate governance information including our governance guidelines, committee charters, senior officer code of ethics and conduct, and other governance-related policies; • other news and announcements that we may post from time to time that investors might find useful or interesting, including our monthly assets under management disclosure and periodic investor presentations; and • opportunities to sign up for email alerts and RSS feeds to have information pushed in real time.
Accordingly, investors should monitor this section of our website, in addition to following our press releases, SEC filings, and public webcasts, all of which will be referenced on the website. Unless otherwise expressly stated, the information found on our website is not part of this or any other report we file with, or furnish to, the SEC.
Accordingly, investors should monitor this section of our website, in addition to following our press releases, SEC filings, and public webcasts, all of which will be referenced on the website. Unless otherwise expressly stated, the information found on our website is not incorporated into this or any other report we file with, or furnish to, the SEC.
Each of our subsidiary's net capital, as defined, meets or exceeds all minimum requirements. For further discussion of the potential impact of current or proposed legal or regulatory requirements, please see the Legal and Regulatory risk factors included in Item 1A of this Form 10-K. COMPETITION.
Each of our subsidiary's net capital, as defined, meets or exceeds all minimum requirements as of December 31, 2023. For further discussion of the potential impact of current or proposed legal or regulatory requirements, please see the Legal and Regulatory risk factors included in Item 1A of this Form 10-K. COMPETITION.
We are subject to various securities/financial services, compliance, corporate governance, disclosure, privacy, cybersecurity, technology, anti-bribery and anti-corruption, anti-money laundering, anti-terrorist financing, and economic, trade and sanctions laws and regulations, both domestically and internationally, as well as to various cross-border rules and regulations, and the data protection laws and regulations of numerous jurisdictions, including the General Data Protection Regulation (“GDPR”) of the European Union (“EU”).
We are subject to various securities/financial services, compliance, corporate governance, disclosure, privacy, cybersecurity, technology, anti-bribery and anti-corruption, anti-money laundering, anti-terrorist financing, and economic, trade and sanctions laws and regulations, both domestically and internationally, as well as to various cross-border rules and regulations, and the data protection laws and regulations of numerous jurisdictions, including the General Data Protection Regulation (“GDPR”) of the European Union (“EU”) and the California Consumer Privacy Act (“CCPA”).
Equity Growth Core Value Concentrated Integrated (Quantitative & Fundamental) Impact U.S.: All-Cap, Large-Cap, Mid-Cap, Small-Cap, Sectors Large-Cap, Mid-Cap, Small-Cap Large-Cap, Mid-Cap, Small-Cap Large-Cap (Value) Large-Cap (Growth & Value, Lower Volatility), Multi-Cap, Small-Cap Large-Cap Global / International: All-Cap, Large-Cap, Small-Cap, Sectors, Regional Large-Cap Large-Cap, Regional Large-Cap, Regional Large-Cap (Core) Large-Cap Fixed Income Cash Low Duration High Yield / Bank Loans Government Securitized Investment Grade Credit U.S.: Taxable Money, Tax-Exempt Money Stable Value, Short-Term Bond, Short Duration Income, Ultra-Short Term Bond Credit Opportunities, Floating Rate, US High Yield US Inflation Protection, US Treasury Securitized Credit, CLO, GNMA US Investment Grade Global / International: N/R N/R Euro High Yield, High Income, Global High Yield Global Government Bond, Global Government Bond ex-Japan, Global Government Bond High Quality N/R Global Investment Grade Corporate, Euro Investment Grade Corporate N/R - Not relevant Fixed Income, cont'd Multi-Sector Dynamic Suite Emerging Markets Municipal Impact U.S.: QM US Bond, US Core Bond, US Core Plus, US Investment Grade Core, US Total Return N/R N/R Tax-Free High Yield, Intermediate Tax-Free High Yield, Muni Intermediate, Tax-Free Long-Term, Tax-Free Short/Intermediate N/R Global / International: Global Multi-Sector, Global Aggregate, International Bond, Euro Aggregate Dynamic Credit, Dynamic Global Bond, Dynamic Global Bond Investment Grade, Dynamic Emerging Markets Bond EM Bond, EM Corporate, EM Corporate High Yield, EM Corporate Investment Grade, EM Local Bond, Asia Credit N/R Global Impact Credit N/R - Not relevant Multi-Asset U.S. / Global / International: Target Date, Custom Target Date Target Allocation Global Allocation Global Income Managed Volatility Custom Solutions Real Assets Retirement Income 20 Page 6 Table of Contents Alternatives U.S. / Global / International: Private Credit Leveraged Loans Mezzanine Real Assets / CRE Structured Products Stressed / Distressed CLOs - Non-Investment Grade Special Situations We employ fundamental and quantitative security analysis in the performance of the investment advisory function through substantial internal equity and fixed income investment research capabilities.
Equity Growth Core Value Concentrated Integrated (Quantitative & Fundamental) Impact U.S.: All-Cap, Large-Cap, Mid-Cap, Small-Cap, Sectors Large-Cap, Mid-Cap, Small-Cap Large-Cap, Mid-Cap, Small-Cap Large-Cap (Value) Large-Cap (Growth & Value, Lower Volatility), Multi-Cap, Small-Cap Large-Cap Global / International: All-Cap, Large-Cap, Small-Cap, Sectors, Regional Large-Cap Large-Cap, Regional Large-Cap, Regional Large-Cap (Core) Large-Cap Fixed Income Cash Low Duration High Yield / Bank Loans Government Securitized Investment Grade Credit U.S.: Taxable Money, Tax-Exempt Money Stable Value, Short-Term Bond, Short Duration Income, Ultra-Short Term Bond Credit Opportunities, Floating Rate, US High Yield US Inflation Protection, US Treasury Securitized Credit, CLO, GNMA US Investment Grade Global / International: N/O N/O Euro High Yield, High Income, Global High Yield Global Government Bond, Global Government Bond ex-Japan, Global Government Bond High Quality N/O Global Investment Grade Corporate, Euro Investment Grade Corporate Multi-Sector Dynamic Suite Emerging Markets Municipal Impact U.S.: QM US Bond, US Core Bond, US Core Plus, US Investment Grade Core, US Total Return N/O N/O Tax-Free High Yield, Intermediate Tax-Free High Yield, Muni Intermediate, Tax-Free Long-Term, Tax-Free Short/Intermediate N/O Global / International: Global Multi-Sector, Global Aggregate, International Bond, Euro Aggregate Dynamic Credit, Dynamic Global Bond, Dynamic Global Bond Investment Grade, Dynamic Emerging Markets Bond EM Bond, EM Corporate, EM Corporate High Yield, EM Corporate Investment Grade, EM Local Bond, Asia Credit N/O Global Impact Credit N/O - Not offered Multi-Asset U.S. / Global / International: Target Date, Custom Target Date Target Allocation Global Allocation Global Income Managed Volatility Custom Solutions Real Assets Retirement Income N/O N/O N/O - Not offered 20 Page 5 Table of Contents Alternatives U.S. / Global / International: Private Credit Leveraged Loans Mezzanine Real Assets / CRE Structured Products Stressed / Distressed CLOs - Non-Investment Grade Special Situations N/O N/O N/O - Not offered We employ fundamental and quantitative security analysis in the performance of the investment management function through substantial internal equity, fixed income, and alternative investment research capabilities.
We also offer specialized advisory services, including management of stable value investment contracts, modeled multi-asset solutions, and a distribution management service for the disposition of equity securities our clients receive from third-party venture capital investment pools. 20 Page 5 Table of Contents The following tables set forth our broad investment capabilities as of December 31, 2022.
We also offer specialized advisory services, including management of stable value investment contracts, modeled multi-asset solutions, and a distribution management service for the disposition of equity securities our clients receive from third-party venture capital investment pools. 20 Page 4 Table of Contents The following tables set forth our broad investment capabilities as of December 31, 2023.
Certain of the U.S. mutual funds also offer Advisor Class and R Class shares that are distributed to investors and defined contribution retirement plans, respectively. These share classes pay 12b-1 fees of 25 and 50 basis points, respectively, for distribution, administration, and personal services.
Certain of the U.S. mutual funds offer Advisor Class and R Class shares that are distributed to investors and defined contribution retirement plans, respectively. These share classes pay 12b-1 fees of 25 and 50 basis points, respectively, out of fund assets, for distribution, administration, and personal services.
We recognize income earned from interests in general partners of certain affiliated private investment funds that are entitled to a disproportionate allocation of income, which is also referred to as carried interest. We record our proportionate share of the investment funds' income assuming the funds were liquidated as of each reporting date pursuant to each investment fund's governing agreements.
We recognize income earned from general partner interests in certain affiliated private investment funds that are entitled to a disproportionate allocation of income, which we also refer to as carried interest. We record our proportionate share of the investment funds' income assuming the funds were liquidated as of each reporting date pursuant to each investment fund's governing agreements.
From time to time, we introduce new strategies, investment vehicles, and other products to complement and expand our investment offerings, respond to competitive developments in the financial marketplace, and meet the changing needs of our investment advisory clients.
We introduce new strategies, investment vehicles, or other products to complement and expand our investment offerings, to respond to competitive developments in the financial marketplace, and to meet the changing needs of our clients.
At December 31, 2022, we employed 7,868 associates, an increase of 4.5% from the 7,529 associates employed at the end of 2021. We may add temporary and part-time personnel to our staff from time to time to meet periodic and special project demands, primarily for technology and collective investment fund administrative services.
At December 31, 2023, we employed 7,906 associates, an increase of 0.5% from the 7,868 associates employed at the end of 2022. We may add temporary and part-time personnel to our staff from time to time to meet periodic and special project demands, primarily for technology and collective investment fund administrative services.
We also must comply with complex and changing tax regimes in the jurisdictions where we operate our business. The following table shows the securities and financial services regulator to certain of our subsidiaries: Regulator T. Rowe Price Entity Within the U.S. Securities & Exchange Commission - T. Rowe Price Associates - T. Rowe Price Hong Kong - T.
We also must comply with complex and changing tax regimes in the jurisdictions where we operate our business. 20 Page 8 Table of Contents The following table shows the securities and financial services regulator to certain of our subsidiaries: Regulator T. Rowe Price Entity Within the U.S. Securities & Exchange Commission - T. Rowe Price Associates - T.
The fees we earn for distributing and marketing these products are part of our overall investment management fees for managing the product assets. We currently recognize any related distribution fees paid to these financial intermediaries in distribution and servicing costs.
The fees we earn for distributing and marketing these products are part of our overall investment management fees for managing the product assets. We recognize any related distribution fees paid to these financial intermediaries in distribution and servicing costs. CAPITAL ALLOCATION-BASED INCOME.
Rowe Price International - T. Rowe Price Japan - T. Rowe Price Australia - T. Rowe Price Singapore - T. Rowe Price (Canada) - T. Rowe Price Advisory Services - T.
Rowe Price Hong Kong - T. Rowe Price International - T. Rowe Price Japan - T. Rowe Price Australia - T. Rowe Price Singapore - T. Rowe Price (Canada) - T. Rowe Price Advisory Services - T.
The length of time we hold our seed capital investment will vary for each new investment product as it is highly dependent on how long it takes to generate cash flows into the product from unrelated investors.
The length of time we hold our seed capital investment will vary for each new investment product as it is highly dependent on how long it takes to generate cash flows into the product from unrelated investors or, in the case of certain alternative products, the investment term.
We compete with other providers of investment advisory services primarily based on the availability and objectives of the investment products offered, investment performance, fees and related expenses, and the scope and quality of investment advice and other client services. In recent years, we have faced significant competition from passive oriented investment strategies.
We compete with other providers of investment advisory services based primarily on the availability and objectives of the investment products offered, investment performance, fees and related expenses, and the scope and quality of investment advice and other client services. We have and will continue to face significant competition from passive oriented investment strategies.
HUMAN CAPITAL. At T. Rowe Price, our people set us apart. We thrive because our company culture is based on collaboration and diversity. We believe that our culture of collaboration enables us to identify opportunities others might overlook. Our associates’ knowledge, insight, enthusiasm, and creativity are the reason our clients succeed and our firm excels.
We thrive because our company culture is based on collaboration and diversity. We believe that our culture of collaboration enables us to identify opportunities others might overlook. Our associates’ knowledge, insight, enthusiasm, and creativity are the reason our clients succeed and our firm excels.
The assets under management in our target date retirement products totaled $334.2 billion at December 31, 2022, or 26.2% of our managed assets at December 31, 2022, compared with 23.2% at the end of 2021.
The assets under management in our target date retirement products totaled $408.4 billion at December 31, 2023, or 28.3% of our managed assets at December 31, 2023, compared with 26.2% at the end of 2022.
As a result of our associates developing these skills we are able to promote from within, with approximately 34% of our open positions being filled by internal applicants, and almost all of our portfolio managers having been promoted from within.
As a result of our associates developing these skills we are able to promote from within, with more than 35% of our open positions being filled by internal applicants, and 20 Page 10 Table of Contents all of our portfolio managers having been promoted from within.
Rowe Price Hong Kong - Oak Hill Advisors (Hong Kong) Monetary Authority of Singapore - T. Rowe Price Singapore Several provincial securities commissions in Canada - T. Rowe Price (Canada) Commission de Surveillance du Secteur Financier - T. Rowe Price (Luxembourg) Management Sàrl - OHA Services Sàrl Australian Securities and Investments Commission - T.
Rowe Price Singapore Several provincial securities commissions in Canada - T. Rowe Price (Canada) Commission de Surveillance du Secteur Financier - T. Rowe Price (Luxembourg) Management Sàrl - OHA Services Sàrl Australian Securities and Investments Commission - T. Rowe Price Australia - Oak Hill Advisors (Australia) Pty Japan Financial Services Agency - T.
Additional information concerning our assets under management, results of operations, and financial condition during the past three years is contained in the Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7, as well as our consolidated financial statements, which are included in Item 8 of this Form 10-K. 20 Page 4 Table of Contents INVESTMENT MANAGEMENT SERVICES.
Defined Contribution APAC, EMEA, Canada Other Retirement Other Accounts Additional information concerning our assets under management, results of operations, and financial condition during the past three years is contained in the Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7, as well as our consolidated financial statements, which are included in Item 8 of this Form 10-K.
We attempt to ensure that the new investment product has a sustainable level of assets from unrelated shareholders before we consider redemption of our seed capital investment in order to not negatively impact the new investment product's net asset value or its investment performance record. We also provide seed capital for new investment products in the alternative asset class.
Generally, we ensure that the new investment product has a sustainable level of assets from unrelated shareholders before we consider redemption of our seed capital investment in order to not negatively impact the product's net asset value or its performance record. At December 31, 2023, we had seed capital investments in our products of $1.4 billion.
Mutual Funds Collective Investment Trusts Australian Unit Trusts ("AUTs") Separate Accounts Collective Investment Trusts Collective Investment Trusts Subadvised Accounts OEICs (4) College Savings Plans Separate Accounts SICAVs (2) / FCPs (3) Managed Accounts / Model Delivery Subadvised Accounts Model Portfolios (6) Separate / Subadvised Accounts Model Portfolios (1) Japanese ITMs (5) Active Exchange-Traded Funds Canadian Pooled Funds College Savings Plans Managed Accounts / Model Delivery Japanese ITMs (5) Canadian Pooled Funds Private Funds Active Exchange-Traded Funds (1) Mutual fund models delivered to a third-party program sponsor, .
Mutual Funds x x x x Collective Investment Trusts x x Active Exchange-Traded Funds x x College Savings Plans x x Model Portfolios (1) x x (6) Managed Accounts / Model Delivery x x Subadvised Accounts x x Separate Accounts x x x SICAVs (2) / FCPs (3) x x Canadian Pooled Funds x x OEICs (4) x Japanese ITMs (5) x x Australian Unit Trusts x Private Funds x Collateralized Loan Obligations x Business Development Company (BDC) x x (1) Mutual fund models, .
At present, the following strategies, which represent about 10% of total assets under management at December 31, 2022, are generally closed to new investors: Strategy Year closed High Yield Bond 2012 U.S. Small-Cap Growth 2013 U.S.
At present, the following strategies, which represent about 5% of total assets under management at December 31, 2023, are generally closed to new investors: Strategy Year closed U.S.
State of Maryland, Commissioner of Financial Regulation - T. Rowe Price Trust Company Outside the U.S. Financial Conduct Authority - T. Rowe Price International - T. Rowe Price UK - Oak Hill Advisors (Europe) 20 Page 11 Table of Contents Regulator T. Rowe Price Entity - OHA (UK) Securities and Futures Commission - T.
State of Maryland, Office of Financial Regulation - T. Rowe Price Trust Company Outside the U.S. Financial Conduct Authority - T. Rowe Price International - T. Rowe Price UK - Oak Hill Advisors (Europe) - OHA (UK) Securities and Futures Commission - T. Rowe Price Hong Kong - Oak Hill Advisors (Hong Kong) Monetary Authority of Singapore - T.
(2) Société d'Investissement à Capital Variable (Luxembourg), (3) Fonds Commun de Placement (Luxembourg), (4) Open-Ended Investment Company (U.K.), (5) Japanese Investment Trust Management Funds, (6) Provided through our ActivePlus and Retirement Advisory Service Portfolios. Investment Capabilities We manage a broad range of investment strategies in equity, fixed income, multi-asset, and alternatives across sectors, styles and regions.
(2) Société d'Investissement à Capital Variable (Luxembourg), (3) Fonds Commun de Placement (Luxembourg), (4) Open-Ended Investment Company (U.K.), (5) Japanese Investment Trust Management Funds, (6) Provided through our ActivePlus and Retirement Advisory Service Portfolios.
Rowe Price products include: open-ended investment products offered to investors outside the U.S., products offered through variable annuity life insurance plans in the U.S., affiliated private investment funds and collateralized loan obligations.
These vehicles include an array of U.S. mutual funds, collective investment trusts, subadvised funds, separately managed accounts, and other sponsored products. The other sponsored products include: open-ended investment products offered to investors outside the U.S., products offered through variable annuity life insurance plans in the U.S., affiliated private investment funds and collateralized loan obligations.
Each agreement automatically terminates in the event of its assignment (as defined in the Investment Company Act) and, generally, either party may terminate the agreement without penalty after a 60-day notice. The termination of one or more of these agreements could have a material adverse effect on our results of operations.
Additionally, fund shareholders must approve material changes to these investment management agreements. Each agreement automatically terminates in the event of its assignment (as defined in the Investment Company Act) and, generally, either party may terminate the agreement without penalty after a 60-day notice.
Rowe Price Australia - Oak Hill Advisors (Australia) Pty Japan Financial Services Agency - T. Rowe Price Japan Swiss Financial Market Supervisory Authority - T. Rowe Price (Switzerland) Serving the needs of retirement savers is an important focus of our business. Such activities are subject to regulators such as the U.S.
Rowe Price Japan Swiss Financial Market Supervisory Authority - T. Rowe Price (Switzerland) Serving the needs of retirement savers is an important focus of our business. Such activities are subject to regulators such as the U.S. Department of Labor, and applicable laws and regulations including the Employee Retirement Income Security Act of 1974 ("ERISA").
In addition, during 2022, we published our sustainability report which included transparency into our diversity, equity and inclusion data, a copy of which can be found on our website at https://www.troweprice.com/corporate/us/en/what-sets-us-apart/corporate-responsibility.html. Set forth below is our diversity information as of December 31, 2022, grouped by division.
In an effort to be more transparent, we publish our EEO data on our website at https://www.troweprice.com/corporate/us/en/what-sets-us-apart/diversity-and-inclusion.html. In addition, during 2023, we published our sustainability report which included transparency into our diversity, equity and inclusion data, a copy of which can be found on our website at https://www.troweprice.com/corporate/us/en/what-we-do/esg-approach/esg-corporate.html.
Furthermore, the regulations to which we are subject continue to change over time, resulting in uncertainty for our business as we must adapt to new laws and regulatory regimes. As a global company which offers its products to customers in a variety of jurisdictions, our subsidiaries are registered with or licensed by various U.S. and/or non-U.S. regulators.
As a global company which offers its products to customers in a variety of jurisdictions, our subsidiaries are registered with or licensed by various U.S. and/or non-U.S. regulators.
Financial Overview / Assets Under Management During 2022, we derived the vast majority of our consolidated net revenues and net income from investment advisory services provided by our subsidiaries, primarily T. Rowe Price Associates, T. Rowe Price International Ltd., and OHA. In March 2022, we established and launched T.
During 2023, we derived most of our consolidated net revenues and net income from investment advisory services provided by our subsidiaries, primarily T. Rowe Price Associates (TRPA), T. Rowe Price Investment Management (TRPIM), Oak Hill Advisors (OHA), and T. Rowe Price International Ltd (TRPIL). Our revenues depend largely on the total value and composition of our assets under management.
In addition, those U.S. mutual funds offered to investors through variable annuity life insurance plans have a share class that pays a 12b-1 fee of 25 basis points. We believe that our lower fund cost structure, distribution methods, and fund shareholder and administrative services help promote the stability of our fund assets under management through market cycles.
In addition, U.S. mutual funds offered to investors through variable annuity life insurance plans have a share class that pays a 12b-1 fee of 25 basis points. We pay all of the 12b-1 fees earned to financial intermediaries who source assets under management into these share classes and provide distribution, administration, and personal services on our behalf. REGULATION.
The industry in which we operate has been evolving and a number of headwinds have arisen over the last few years, including passive investments taking market share from traditional active strategies; continued downward fee pressure; demand for new investment vehicles to meet client needs; capacity challenges with some of our mutual funds and portfolios and an ever-changing regulatory landscape.
The investment management industry has been evolving and industry participants are facing several challenging trends including passive investments taking market share from traditional active strategies; continued downward fee pressure; demand for new investment vehicles to meet client needs; and an ever-changing regulatory landscape.
Our strategies are designed to meet the varied and changing needs and objectives of investors and are delivered across a range of vehicles.
SERVICES AND CAPABILITIES. INVESTMENT MANAGEMENT SERVICES. Investment Capabilities We manage a broad range of investment strategies in equity, fixed income, multi-asset, and alternatives across sectors, styles and regions. Our strategies are designed to meet the varied and changing needs and objectives of investors and are delivered across a range of vehicles.
The following table outlines the types of products within each distribution channel through which our assets under management are sourced as of December 31, 2022. Americas financial intermediaries EMEA & APAC financial intermediaries Individual U.S. investors on a direct basis U.S. retirement plan sponsors - full service recordkeeping Global institutions U.S. Mutual Funds SICAVs (2) / FCPs (3) U.S.
The following table outlines the five distribution channels and products through which our assets under management are sourced as of December 31, 2023. 20 Page 6 Table of Contents Vehicle Retail Institutional Americas financial intermediaries EMEA & APAC financial intermediaries Individual U.S. investors on a direct basis U.S. Defined Contribution Global institutions U.S.
We earn investment management fees from these clients based on, among other things, the specific investment services to be provided, and these investment management fees are computed using the value of assets under management at a contracted annual fee rate or the products' effective fee rate for those with a tiered-fee rate structure.
Our investment advisory fees are generally computed using the value of assets under management at a contracted annual fee rate or an effective fee rate for those products with a tiered-fee rate structure. For the majority of our revenue, the value of the assets under management used to calculate the fees are based on a daily valuation.
Accordingly, fluctuations in financial markets and in the composition of assets under management impact our revenues and results of operations.
Accordingly, fluctuations in financial markets and in the composition of assets under management impact our revenues and results of operations. At December 31, 2023, we had $1,444.5 billion in assets under management, an increase of $169.8 billion from 2022.
Rowe Price Investment Services ("TRPIS"), is the principal distributor of the U.S. mutual funds and contracts with third-party financial intermediaries who distribute these share classes. TRPIS enters into agreements with each intermediary under which each fund is responsible to pay the distribution and service fees directly to the applicable intermediaries.
Rowe Price complex; brokerage; trust services; and non-discretionary advisory services. Distribution and Servicing Our subsidiary, T. Rowe Price Investment Services, is the principal distributor of our U.S. mutual funds and contracts with third-party financial intermediaries who distribute these share classes.
Item 1. Business. T. Rowe Price Group, Inc. ("T. Rowe Price", "we", "us", or "our") is a financial services holding company that provides global investment management services through its subsidiaries to investors worldwide. We provide an array of U.S. mutual funds, subadvised funds, separately managed accounts, collective investment trusts, and other sponsored products.
Item 1. Business. T. Rowe Price Group, Inc. ("T. Rowe Price Group", "T. Rowe Price", "the firm", "we", "us", or "our") is a financial services holding company that provides global investment management services through its subsidiaries to investors worldwide. We are driven by our purpose: to identify and actively invest in opportunities to help people thrive in an evolving world.
We typically provide seed capital for new investment products to enable the portfolio manager to begin building an investment performance history in advance of the portfolio receiving sustainable client assets.
A new strategy is solely dependent on our belief we have the appropriate investment management expertise and its objective will be useful to investors over a long period. We typically provide seed capital for certain new investment products to begin building an investment performance history in advance of the portfolio receiving sustainable client assets.
Distribution Channels and Products We distribute our products across three broad geographical regions: Americas; Europe, Middle East and Africa ("EMEA"); and Asia Pacific ("APAC"). We service clients in 55 countries around the world. Investors domiciled outside the U.S. represented about 9% of total assets under management at the end of 2022.
Small-Cap Core 2013 Capital Appreciation 2014 Distribution Channels and Products We distribute our products across a diversified client base across five primary distribution channels in three broad geographical regions: Americas; Europe, Middle East and Africa ("EMEA"); and Asia Pacific ("APAC"). We service clients in 51 countries around the world.
Our priority is to increase our hiring, retention and development of talent from groups that are underrepresented in asset management; including both ethnically diverse associates and women. At the end of 2022, female associates held 32.7% of senior roles globally and ethnically diverse associates held 20.3% of senior roles in the U.S.
Although we have made progress in our workforce diversity representation, we seek to continuously improve in this area. Our priority is to increase our hiring, retention and development of talent from groups that are underrepresented in asset management; including both ethnically diverse associates and women.
We also use research provided by brokerage firms and security analysts in a supportive capacity and information received from private economists, political observers, commentators, government experts, and market analysts. Our securities selection process for some investment portfolios is based on quantitative analysis using computerized data modeling.
Our research staff operates primarily from offices located in the U.S. and U.K. with additional staff based in Australia, China, Hong Kong, Japan, and Singapore. We also use research provided by brokerage firms and security analysts in a supportive capacity and information received from private economists, political observers, commentators, government experts, and market analysts.
While we cannot predict how much market share these competitors will gain, we believe there will always be demand for good active management investment products. 20 Page 12 Table of Contents In order to maintain and enhance our competitive position, we may review acquisition and venture opportunities and, if appropriate, engage in discussions and negotiations that could lead to an acquisition transaction or other financial relationships with another entity.
In order to maintain and enhance our competitive position, we may review acquisition and venture opportunities and, if appropriate, engage in discussions and negotiations that could lead to an acquisition transaction or other financial relationships with another entity. HUMAN CAPITAL. At T. Rowe Price, our people set us apart.
Investment advisory services are provided to each U.S. mutual fund under individual investment management agreements that grant the fund the right to use the T. Rowe Price name. The Boards of the respective funds, including a majority of directors who are not interested persons of the funds or of T.
Specifically, our sponsored U.S. mutual fund investment management agreements must be approved, and fees are annually reviewed by the Boards of the respective funds, including a majority of directors who are not interested persons of the funds or of T. Rowe Price Group (as defined in the Investment Company Act of 1940).
Department of Labor, and applicable laws and regulations including the Employee Retirement Income Security Act of 1974. Registrations • Our subsidiaries providing transfer agent services, T. Rowe Price Services and T. Rowe Price Retirement Plan Services, are registered under the Securities Exchange Act of 1934. • T.
Registrations • Our subsidiaries providing transfer agent services, T. Rowe Price Services and T. Rowe Price Retirement Plan Services, are registered under the Securities Exchange Act of 1934. • T. Rowe Price Investment Services (TRPIS) is an SEC registered introducing broker-dealer and member of the Financial Industry Regulatory Authority ("FINRA") and the Securities Investor Protection Corporation.
We are focused on delivering global investment management excellence to help clients around the world achieve their long-term investment goals. The late Thomas Rowe Price, Jr., founded our firm in 1937, and the common stock of T. Rowe Price Associates, Inc. was first offered to the public in 1986. The T.
We take an active, independent approach to investing, offering our dynamic perspective and meaningful partnership, so our clients can feel more confident. The late Thomas Rowe Price, Jr., founded our firm in 1937, and the common stock of T. Rowe Price Associates, Inc. was first offered to the public in 1986. The T.
The data excludes information about the employees of OHA. 20 Page 13 Table of Contents Investments Group Diversity Breakdown Gender Representation - Global Population Ethnically Diverse - US Population Only Female Male Total Ethnically Diverse Non- Ethnically Diverse Total Investments Group 24% 76% 1,000 25% 75% 706 Portfolio Managers 13% 87% 158 13% 87% 112 Analysts 27% 73% 394 37% 63% 269 Traders 26% 74% 96 22% 78% 67 All Other Roles 35% 65% 352 17% 83% 258 Global Distribution and Global Product Group Diversity Breakdown Gender Representation - Global Population Ethnically Diverse - US Population Only Female Male Total Ethnically Diverse Non- Ethnically Diverse Total Global Distribution & Global Product 50% 50% 2,998 32% 68% 2,712 Senior Level* 36% 64% 476 16% 84% 386 All Others 53% 47% 2,522 34% 66% 2,326 Corporate Functions Group Diversity Breakdown Gender Representation - Global Population Ethnically Diverse - US Population Only Female Male Total Ethnically Diverse Non- Ethnically Diverse Total Corporate Functions 45% 55% 3,498 35% 65% 2,849 Senior Level* 44% 55% 447 21% 79% 354 All Others 45% 54% 3,051 37% 63% 2,495 * Senior Level is defined as people leaders and individual contributors with significant business or functional responsibility.
Investments Group Diversity Breakdown Gender Representation - Global Population Ethnically Diverse - US Population Only Female Male Total Ethnically Diverse Non- Ethnically Diverse Total Investments Group 28% 72% 968 24% 76% 683 Portfolio Managers 14% 86% 171 15% 85% 126 Analysts 30% 70% 361 37% 63% 247 Traders 26% 74% 97 21% 79% 66 All Other Roles 35% 65% 339 16% 84% 244 Global Distribution and Global Product Group Diversity Breakdown Gender Representation - Global Population Ethnically Diverse - US Population Only Female Male Total Ethnically Diverse Non- Ethnically Diverse Total Global Distribution & Global Product 48% 52% 2,927 30% 71% 2,636 Senior Level* 35% 65% 537 16% 84% 438 All Others 51% 49% 2,390 32% 68% 2,198 20 Page 11 Table of Contents Corporate Functions Group Diversity Breakdown Gender Representation - Global Population Ethnically Diverse - US Population Only Female Male Total Ethnically Diverse Non- Ethnically Diverse Total Corporate Functions 45% 55% 3,590 35% 65% 2,865 Senior Level* 43% 57% 462 20% 80% 358 All Others 45% 55% 3,128 37% 63% 2,507 * Senior Level is defined as people leaders and individual contributors with significant business or functional responsibility.
Rowe Price Investment Services is a registered broker-dealer and member of the Financial Industry Regulatory Authority ("FINRA") and the Securities Investor Protection Corporation. This subsidiary provides brokerage services to our U.S. mutual funds. Pershing, a third-party clearing broker and an affiliate of BNY Mellon, maintains our brokerage’s customer accounts and clears all transactions. • T.
Investors may open a brokerage account with TRPIS in order to buy and sell securities. Pershing, a third-party clearing broker and an affiliate of BNY Mellon, maintains our brokerage’s customer accounts and clears all transactions. • T.
For every open role at the firm, our goal is that at least 40% of interviewed candidates will be female and/or ethnically diverse, and during 2022, 66% of the candidates were ethnically diverse and/or female. In an effort to be more transparent, we publish our EEO data on our website, which can be seen on our website, at https://www.troweprice.com/corporate/us/en/what-sets-us-apart/Diversity-and-inclusion.html.
At the end of 2023, female associates held 32.5% of senior roles globally and ethnically diverse associates held 19.8% of senior roles in the U.S. For every open role at the firm, our goal is that at least 40% of interviewed candidates will be female and/or ethnically diverse, and during 2023, 65% of the candidates were ethnically diverse and/or female.
Incentive fees are generally paid within 90 days of the end of the private account’s measurement period. ADMINISTRATIVE, DISTRIBUTION, AND SERVICING FEES. Administrative Services We also provide certain administrative services as ancillary services to our investment advisory clients.
The income will fluctuate period-to-period and the realization of accrued carried interest occurs over a number of years. A portion of this income is allocated to non-controlling interest holders and is reflected in compensation expense as these holders are also employees. ADMINISTRATIVE, DISTRIBUTION, AND SERVICING FEES. Administrative Services We also provide certain ancillary administrative services to our investment advisory clients.
As a result, such products have taken market share from active managers.
As a result, such products have taken market share from active managers. While we cannot predict how much market share these competitors will continue to gain, we believe there will always be demand for good active management investment products.
Our diversity, equity, and inclusion initiatives have garnered recognitions, including Pensions & Investments 2021 Best Places to Work in Money Management, and Best Places to work for LGBTQ Equality by the Human Rights Campaign Foundation. Although we have made progress in our workforce diversity representation, we seek to continuously improve in this area.
Our diversity, equity, and inclusion initiatives have garnered recognitions, including World's Most Admired Companies from Fortune, Barron's 100 Most Sustainable Companies and America's Most Responsible Companies from Newsweek. We also continue to be a top company for LGBTQ+ equality by the Human Rights Campaign Foundation.
Removed
Rowe Price Group, Inc. corporate holding company structure was established in 2000. On December 29, 2021, we completed our acquisition of Oak Hill Advisors, L.P., a leading alternative credit manager, and other entities that had common ownership (collectively, "OHA").
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With more than 80 years of experience, we provide a broad range of investment solutions across equity, fixed income, multi-asset, and alternative capabilities for clients around the world— from individuals to advisors to institutions to retirement plan sponsors.
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We acquired 100% of the equity interests of Oak Hill Advisors, L.P., 100% of the equity interests in entities that make co-investments in certain affiliated private investment funds (the "co-investment entities") and a majority of the equity interests in entities that have interests in general partners of affiliated private investment funds and are entitled to a disproportionate allocation of income (the "carried interest entities").
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Rowe Price Group, Inc. corporate holding company structure was established in 2000. Our common stock trades on the NASDAQ Global Select Market under the symbol "TROW". Our core capabilities have enabled us to deliver excellent operating results since our initial public offering.
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The acquisition accelerates our expansion into alternative investment markets and complements our existing global platform and ongoing strategic initiatives in our core investments and distribution capabilities. Alternative credit strategies continue to be in demand from institutional and retail investors across the globe seeking attractive yields and risk-adjusted returns.
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It is also a unique time in our industry with a significant amount of money remaining out of the market as investors maintain a shorter investment time horizon and relatively low risk appetite. Despite these challenging trends, we believe there are significant opportunities that align to our core capabilities.
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As of December 31, 2022, OHA had $57 billion of capital under management (which includes net asset value, portfolio value and/or unfunded capital). Core Capabilities Our core capabilities have enabled us to deliver excellent operating results since our initial public offering.
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This increase in assets under management was driven by market appreciation, net of distributions not reinvested, of $251.6 billion, offset by net cash outflows of $81.8 billion. In 2023, our target date retirement products experienced net cash inflows of $13.1 billion.
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Our ongoing financial strength and discipline has allowed us to take advantage of attractive growth opportunities and invest in key capabilities.
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The following charts show our AUM by asset class, client type, geography, and account type as of December 31 for the prior three years: Equity Institutional (3) Fixed Income, including money market Retail (4) Multi-Asset (1) Alternatives (2) (1) The underlying assets under management of the multi-asset portfolios have been aggregated and presented in this category and not reported in the equity and fixed income rows.
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Our strategic investments have been focused on increasing our investment professional headcount globally, expanding our product offerings, expanding our global distribution footprint to strengthen our regional relationships and brand, and investing in new technology and the core infrastructure of the firm.
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(3) Institutional includes assets sourced from institutions along with defined contribution assets, including assets sourced through intermediaries and our full-service recordkeeping business. (4) Retail includes assets sourced through our direct-marketed business and financial intermediaries. 20 Page 3 Table of Contents United States U.S.
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Despite the headwinds, we believe there are significant opportunities that align to our core capabilities.
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Investors domiciled outside the U.S. represented about 9% of total assets under management at the end of 2023.
Removed
Rowe Price Investment Management, a separate SEC-registered investment advisor, to support our continued focus on generating strong investment results for clients. Since its launch in March 2022, services related to this investment advisor have been included in our consolidated net revenue and net income. Our revenues depend largely on the total value and composition of our assets under management.
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Investment Advisory Fees We derive substantially all of our net revenue from investment advisory fees that are earned pursuant to agreements with our sponsored funds and clients.
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At December 31, 2022, we had $1,274.7 billion in assets under management, including $627.8 billion in U.S. mutual funds, $320.5 billion in subadvised funds and separately managed accounts, $288.9 billion in collective investment trusts and other sponsored investment products, and $37.5 billion in private investment funds and CLOs. Assets under management decreased $413.1 billion from the end of 2021.
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Nearly 57% of our investment advisory fees are earned from our sponsored U.S. mutual funds, with the remaining investment advisory fees earned from our collective investment trusts, subadvised funds, separately managed accounts, and other sponsored products.
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This decrease was primarily driven by market depreciation and losses, including distributions not reinvested, of $351.4 billion and net cash outflows of $61.7 billion. 20 Page 3 Table of Contents The following tables show our assets under management by vehicle, asset class, distribution channel, and account type: (in billions) 2022 2021 Assets under management by vehicle U.S. mutual funds $ 627.8 $ 871.4 Subadvised and separately managed accounts 320.5 437.1 T.
Added
The contracted fee rate(s) applied to the fund or account’s assets under management will vary depending on the services provided, the asset class, and vehicle. For example, fee rates are typically higher for equities and alternatives as compared to multi-asset and fixed income products.
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Rowe Price collective investment trusts and other sponsored investment products: Collective investment trusts 223.9 258.3 Stable value, variable annuity products, and exchange-traded funds 29.6 29.1 SICAVs and other sponsored funds regulated outside the U.S. 35.4 55.9 Total T.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeEach of these types laws and regulations could impose significant limitations, require changes to our business, or restrict our collection, use or storage of personal data, which may increase our compliance expenses and make our business more costly or less efficient to conduct. 20 Page 23 Table of Contents • After the 2008 financial crisis, global regulations on over-the-counter derivatives spearheaded by The Dodd-Frank Wall Street Reform and Consumer Protection Act in the United States and European Market Infrastructure Regulation in the European Union ("EU") have imposed clearing, margin, trade reporting, electronic trading and recordkeeping requirements on market participants.
Biggest changeFuture changes to laws 20 Page 21 Table of Contents and regulations in these areas could impose significant limitations on our operations, require changes to our business, or restrict our collection, use or storage of data or related technologies, which may increase our compliance expenses and make our business more costly or less efficient to conduct. • Regulators have imposed certain clearing, margin, trade reporting, electronic trading and recordkeeping requirements on market participants aimed at market stabilization and risk reduction, such as the Dodd-Frank Wall Street Reform and Consumer Protection Act in the U.S. and the European Market Infrastructure Regulation in the EU.
We have a process to evaluate whether to record tax liabilities for anticipated tax audit issues based on our estimate of whether, and the extent to which, additional income taxes will be due. We adjust these liabilities in light of changing facts and circumstances.
We have a process to evaluate whether to record tax liabilities for anticipated tax audit issues based on our estimate of whether, and the extent to which, additional income taxes will be due, and adjust these liabilities in light of changing facts and circumstances.
We depend on significant quantities of technology and, in many cases, highly specialized or proprietary or third-party licensed technology to support our business functions, including among others: • securities analysis, • securities trading, • portfolio management, • client service, • accounting and internal financial reporting processes and controls, • data security and integrity, and • regulatory compliance and reporting.
We depend on significant quantities of technology and, in many cases, highly specialized, proprietary or third-party licensed technology to support our business functions, including among others: • securities analysis, • securities trading, • portfolio management, • client service, • accounting and internal financial reporting processes and controls, • data security and integrity, and • regulatory compliance and reporting.
Generally, our associates can terminate their employment with us at any time, with most required to provide little to no notice. Recently we have adopted more significant notification requirements for certain key positions. As a result of these new requirements, some employees may be less willing to continue their employment with us or join our firm.
Generally, our associates can terminate their employment with us at any time, with most required to provide little to no notice. Recently we have adopted more significant notification requirements for certain key positions. As a result of these new requirements, some employees or candidates may be less willing to continue their employment with us or join our firm.
We maintain a system of internal controls designed to provide reasonable assurance that both inadvertent errors and fraudulent activity, including misappropriation of assets, fraudulent financial reporting, and unauthorized access to sensitive or confidential data, is either prevented or detected in a timely manner. We also leverage cloud-based solutions for the transmission and storage of this data.
We maintain a system of internal controls designed to provide reasonable assurance that both inadvertent errors and fraudulent activity, including misappropriation of assets, fraudulent financial reporting, and unauthorized access to sensitive or confidential data, is either prevented or detected in a timely manner. We also leverage cloud-based solutions for the transmission and storage of data.
Our operating results are dependent on the level of our expenses, which can vary significantly for many reasons, including: • expenses incurred in connection with our multi-year strategic plan to strengthen our long-term competitive position; • variations in the level of total compensation expense due to changes in, among other things, bonuses, stock-based awards, employee benefit costs due to regulatory or plan design changes, our employee count and mix, competitive factors, market performance, and inflation; • changes in the level of our advertising and promotion expenses, including the costs of expanding investment advisory services to investors outside of the U.S. and further penetrating U.S. distribution channels; • expenses and capital costs incurred to maintain and enhance our administrative and operating services infrastructure, such as technology assets, depreciation, amortization, and research and development; • changes in the costs incurred for third-party service providers that perform certain administrative and operating services; • changes in expenses that are correlated to our assets under management, such as distribution and servicing fees; • a future impairment of investments that is recognized in our consolidated balance sheet; • a future impairment of goodwill or other intangible assets that is recognized in our consolidated balance sheet; • unanticipated material fluctuations in foreign currency exchange rates applicable to the costs of our operations abroad; • unanticipated costs incurred to protect investor accounts and client goodwill; • future changes to legal and regulatory requirements and potential litigation; and • disruptions of third-party services such as communications, power, cloud services, transfer agent, investment management, trading, and accounting systems.
Our operating results are dependent on the level of our expenses, which can vary significantly for many reasons, including: • expenses incurred in connection with our multi-year strategic plan to strengthen our long-term competitive position; • variations in the level of total compensation expense due to changes in, among other things, bonuses, stock-based awards, employee benefit costs due to regulatory or plan design changes, labor market conditions, our employee count and mix, competitive factors, market performance, and inflation; • changes in the level of our advertising and promotion expenses, including the costs of expanding investment advisory services to investors outside of the U.S. and further penetrating U.S. distribution channels; • expenses and capital costs incurred to maintain and enhance our administrative and operating services infrastructure, such as technology assets, depreciation, amortization, and research and development; • changes in the costs incurred for third-party service providers that perform certain administrative and operating services, including as a result of changes in market conditions, labor costs and inflation; • changes in expenses that are correlated to our assets under management, such as distribution and servicing fees; • a future impairment of investments that is recognized in our consolidated balance sheet; • a future impairment of goodwill or other intangible assets that is recognized in our consolidated balance sheet; • unanticipated material fluctuations in foreign currency exchange rates applicable to the costs of our operations abroad; • unanticipated costs incurred to protect investor accounts and client goodwill; • future changes to legal and regulatory requirements and potential litigation; and • disruptions of infrastructure and third-party services such as communications, power, cloud services, transfer agent, investment management, trading, and accounting systems.
For example, we began to pay for third-party investment research used by our UK-based investment manager, T. Rowe Price International Ltd, in 2018, and we now pay for all the research needs of our investment professionals globally. • New laws or regulations involving ESG integration and disclosure may materially impact the asset management industry.
For example, we began to pay for third-party investment research used by our UK-based investment manager, T. Rowe Price International Ltd, in 2018, and we pay for all the research needs of our investment professionals globally. • New laws or regulations involving ESG integration and disclosure may materially impact the asset management industry.
Future changes could require us to modify or curtail our investment offerings and business operations or impact our expenses and profitability. Additionally, some laws and regulations may not directly apply to our business but may impact the capital markets, service providers or have other indirect effects on our ability to provide services to our clients.
Future changes could require us to modify or curtail our investment offerings and business operations which may impact our expenses and profitability. Additionally, some laws and regulations may not directly apply to our business but may impact the capital markets, service providers or have other indirect effects on our ability to provide services to our clients.
Any regulatory investigation and any failure to maintain compliance with applicable laws and regulations could severely damage our reputation, adversely affect our ability to conduct business and decrease revenue and net income, and potentially result in complex litigation.
Any regulatory investigation and any failure to maintain compliance with applicable laws and regulations could severely damage our reputation, adversely affect our ability to conduct business and decrease revenue and net income, and potentially result in complex and costly litigation.
The allocation of investment products for assets under management within market segments or strategies may impact associated fees that can vary depending on product offerings. • Investor Mobility. Our investors generally may withdraw their funds at any time, without advance notice and with little to no significant penalty. • Capacity Constraints.
The allocation of investment products for assets under management within market segments or strategies may impact associated fees that can vary depending on product offerings. • Investor Mobility. Our investors generally may withdraw their funds at any time, without advance notice and with little to no significant penalty.
Due to the complexity of some of these uncertainties, however, the ultimate resolution may result in a payment that is materially different from our estimates. We have contracted with third-party financial intermediaries that distribute our investment products and such relationships may not be available or profitable to us in the future.
Due to the complexity of some of these uncertainties, however, the ultimate resolution may result in a payment that is materially different from our estimates and impact our financial results. We have contracted with third-party financial intermediaries that distribute our investment products and such relationships may not be available or profitable to us in the future.
Our business model is dependent on our personnel, who as part of their roles support internal controls, supervision, technology and training to provide comfort that our activities do not violate applicable guidelines, rules and regulations or adversely affect our clients, counterparties or us.
Our business model is dependent on our personnel, who as part of their roles support disclosure and internal controls, compliance, supervision, technology and training to provide comfort that our activities do not violate applicable guidelines, rules and regulations or adversely affect our clients, counterparties or us.
Actual or perceived failure to adequately address the environmental, social, and governance ("ESG") expectations, or failure to manage conflicts of interests, of our various stakeholders could lead to a tarnished reputation and loss of client assets or harm our access to capital. Furthermore, ESG issues have been the subject of increased focus by regulators and stakeholders.
Actual or perceived failure to adequately address the ESG expectations, or failure to manage conflicts of interests of our various stakeholders could lead to a tarnished reputation and loss of client assets or harm our access to capital. Furthermore, ESG issues have been the subject of increased focus by regulators and stakeholders.
Many of these transactions expose us or such client portfolios to credit risk in the event of default of its counterparty. While we regularly conduct assessments of such risk posed by counterparties, the risk of non-performance by such parties is subject to sudden swings in the financial and credit markets.
Many of these transactions expose us or such client portfolios to credit risk in the event of default of its counterparty. While we regularly conduct assessments of counterparty risks, the risk of non-performance by such parties is subject to sudden swings in the financial and credit markets.
Nonetheless, there are still certain limitations on our investment products due to CFTC rules. • There has been increased global regulatory focus on the manner in which intermediaries are paid for distribution of mutual funds or other collective investments funds.
Nonetheless, there are still certain limitations on our investment products due to CFTC rules. • There has been increased global regulatory focus on the manner in which interm ediaries are paid for distribution of mutual funds or other collective investments funds.
Additionally, changes in the status of tax deferred investment options, including retirement plans, tax-free municipal bonds, the capital gains and corporate dividend tax rates, and other individual and corporate tax rates could cause investors to view certain investment products less favorably and reduce investor demand for products and services we offer, which could have an adverse effect on our assets under management and revenues.
Additionally, changes in the status of tax deferred investment options, including retirement plans, tax-free municipal bonds, the capital gains and corporate dividend tax rates, and other individual and corporate tax rates could cause 20 Page 16 Table of Contents investors to view certain investment products less favorably and reduce investor demand for products and services we offer, which could have an adverse effect on our assets under management and revenues.
We cannot predict future changes in the tax regulations to which we are subject, and these regulations could have a material impact on our tax liability or result in increased costs of our tax compliance efforts.
We cannot predict future changes in the tax regulations to which we are subject, and any such changes could have a material impact on our tax liability or result in increased costs of our tax compliance efforts.
Our personnel and the personnel of others involved in our business may make errors or engage in fraudulent or malicious activities, that are not always immediately detected, which may disrupt our operations, cause losses, lead to regulatory fines or sanctions, litigation, or otherwise damage our reputation.
Our personnel and the personnel of others involved in our business may make errors or engage in fraudulent or malicious activities, that are not always immediately detected or that cannot be easily remediated, which may disrupt our operations, cause losses, lead to regulatory fines or sanctions, litigation, or otherwise damage our reputation.
Climate-related transition risks arise from exposure to the transition to a lower-carbon economy through policy, regulatory, technology and market 20 Page 21 Table of Contents changes. For instance, new regulations or guidance relating to climate change, as well as the perspectives of stakeholders regarding climate change, may impact our business and reputation, which could increase costs on our business.
Climate-related transition risks arise from exposure to the transition to a lower-carbon economy through policy, regulatory, technology and market changes. For instance, new regulations or guidance relating to climate change, as well as the perspectives of stakeholders regarding climate change, may impact our business and reputation, which could increase costs on our business.
Any loss of confidence in a product type could lead to withdrawals, redemptions and liquidity issues in such products, which may cause our AUM, revenue and earnings to decline. 20 Page 16 Table of Contents Our operations are complex and a failure to properly execute operational processes could have an adverse effect on our reputation and decrease our revenues.
Any loss of confidence in a product type could lead to withdrawals, redemptions and liquidity issues in such products, which may cause our AUM, revenue and earnings to decline. Our operations are complex and a failure to properly execute operational processes could have an adverse effect on our reputation and decrease our revenues.
If we are unable to maintain compliance with applicable laws and regulations, we could be subject to criminal and civil liability, the 20 Page 22 Table of Contents suspension of our employees, fines, penalties, sanctions, injunctive relief, exclusion from certain markets, or temporary or permanent loss of licenses or registrations necessary to conduct our business.
If we are unable to maintain compliance with applicable laws and regulations, we could be subject to criminal and civil liability, the suspension of our employees, fines, penalties, sanctions, injunctive relief, exclusion from certain markets, or temporary or permanent loss of licenses or registrations necessary to conduct our business.
Although we have robust business and disaster recovery plans, if our technology systems, including those provided by service providers, were to fail and we were unable to recover in a timely way, we would be unable to fulfill critical business functions, which could lead to a loss of clients and could harm our reputation.
Although we believe we have robust business and disaster recovery plans, if our technology systems, including those provided or operated by third-party service providers, were to fail and we were unable to recover in a timely way, we would be unable to fulfill critical business functions, which could lead to a loss of clients and could harm our reputation.
If we are unable to upgrade our infrastructure in a timely fashion, we might lose clients and fail to maintain regulatory compliance, which could affect our results of operations and severely damage our reputation. A cyberattack or a failure to implement effective information and cybersecurity policies, procedures and capabilities could disrupt operations and cause financial losses.
If we are unable to upgrade our technology stack in a timely fashion, we may lose clients and fail to maintain regulatory compliance, which could affect our results of operations and severely damage our reputation. A cyberattack or a failure to implement effective information and cybersecurity policies, procedures and capabilities could disrupt operations and cause financial losses.
Any significant change in the required net capital, an operating loss, or an extraordinary charge against net capital could adversely affect the ability of our subsidiaries to expand or maintain their operations if we were unable to make additional investments in them, which could impact our earnings. 20 Page 24 Table of Contents TECHNOLOGY RISKS.
Any significant change in the required net capital, an operating loss, or an extraordinary charge against net capital could adversely affect the ability of our subsidiaries to expand or maintain their operations if we were unable to make additional investments in them, which could impact our earnings. TECHNOLOGY RISKS.
If any of these factors were to arise it could disrupt our operations, increase our expenses or result in financial exposure, regulatory inquiry or reputational damage.
If any of these scenarios were to arise, it could disrupt our operations, increase our expenses or result in financial exposure, regulatory inquiry, litigation or reputational damage.
Changes to long-standing market practices related to fees or enhanced disclosure requirements may negatively impact sales of mutual funds or other collective investments funds by intermediaries, especially if such requirements are not applied to other investment products. • We remain subject to various state, federal and international laws and regulations (and associated judicial decisions) related to data collection and use; privacy and data protection; cybersecurity; current and emerging technology; data storage, localization, retention and destruction; data disclosure, transfer, availability, and integrity; notification of regulators and/or impacted parties regarding adverse data-related events; and other similar matters that can concern the data of our clients and employees.
Changes to long-standing market practices related to fees or enhanced disclosure requirements may negatively impact sales of mutual funds or other collective investments funds by intermediaries, especially if such requirements are not applied to other investment products. • We remain subject to various state, federal and international laws and regulations (and associated judicial decisions) related to privacy, data collection and use, including the EU’s GDPR and the CCPA; cybersecurity; current and emerging technology, including generative AI technology; storage, localization, retention and destruction of data; disclosure, transfer, availability, security and integrity of data; notification of regulators and/or impacted parties regarding adverse data-related events, including the SEC’s cybersecurity disclosure rules; and other similar matters that can concern the data of our clients and employees.
While we are under no obligation to provide financial support to any sponsored investment products, any financial support provided would reduce capital available for other purposes and may have an adverse effect on revenues and net income . 20 Page 18 Table of Contents Our hedging strategies utilized to mitigate risk may not be effective, which could impact our earnings.
While we are under no obligation to provide financial support to any sponsored investment products, any financial support provided would reduce capital available for other purposes and may have an adverse effect on revenues and net income. Our hedging strategies utilized to mitigate risk may not be effective, which could impact our earnings.
Examinations and audits by tax authorities could result in additional tax payments for prior periods. Based on the global nature of our business, from time to time we are subject to tax audits in various jurisdictions.
Examinations and audits by tax authorities could result in additional tax payments for prior periods, which could impact our financial results. Based on the global nature of our business, from time to time we are subject to tax audits in various jurisdictions.
Moreover, we can provide no assurance that we will continue to have access to the third-party financial intermediaries that currently distribute our products, or that we will continue to have the opportunity to offer all or some of our existing products through them.
Moreover, we can provide no assurance that we will continue to have access to the third-party financial intermediaries that currently distribute our products on favorable terms or at all, or that we will continue to have the opportunity to offer all or some of our existing products through them.
Our systems, or those of third-party service providers we may use to maintain and transmit such data, could be victimized by unauthorized users or corrupted by computer viruses or other malicious software code. Additionally, authorized persons could inadvertently or intentionally release or alter confidential or proprietary data.
Our systems, or those of the third-party service providers we use to maintain or transmit such data, could be accessed by unauthorized users or corrupted by computer viruses or other malicious software code. Additionally, authorized persons could inadvertently or intentionally release or alter confidential or proprietary data.
Rowe Price collective investment fund seeks to lower the fees that we receive or terminate its contract with us, we would experience a decline in fees earned from the collective investment funds, which could have a material adverse effect on our revenues and net income. We operate in an intensely competitive industry.
Rowe Price collective investment fund seeks to lower the fees that we receive or terminate its contract with us, we would experience a decline in fees earned from the collective investment funds, which could have a material adverse effect on our revenues and net income. 20 Page 13 Table of Contents We operate in an intensely competitive industry.
Our revenues are based on the market value and composition of the assets under our management, all of which are subject to fluctuation caused by factors outside of our control. We derive our revenues primarily from investment advisory services provided by our subsidiaries to individual and institutional investors.
Our revenues are based on the market value and composition of the assets under our management, all of which are subject to fluctuation caused by factors outside of our control. 20 Page 12 Table of Contents We derive our revenues primarily from investment advisory services provided by our subsidiaries to individual and institutional investors.
As our insurance policies come up for renewal, we may need to assume higher deductibles or co-insurance liabilities, or pay higher premiums, which would increase our expenses and reduce our net income. Net capital requirements may impede the business operations of our subsidiaries.
As our insurance policies come up for renewal, we may need to assume higher deductibles or co-insurance liabilities, or pay higher premiums, which would increase our expenses and reduce our net income. 20 Page 22 Table of Contents Net capital requirements may impede the business operations of our subsidiaries.
Such disclosure could, among other things: • seriously damage our reputation, • result in a loss of confidence in our business and products, • allow competitors access to our proprietary business data, • subject us to liability for a failure to safeguard data of clients, associates, and other parties, • result in the termination of contracts by our existing clients, • subject us to regulatory investigations, actions or fines, and potential litigation involving regulators, stockholders, or other members of the public, and • require significant capital and operating expenditures to investigate and remediate the breach, and organizational costs to mitigate against future incidents.
Any of these types of events could, among other things: • seriously damage our reputation, • result in a loss of confidence in our business and products, • allow competitors access to our proprietary business data, • materially impair our business operations, • subject us to liability for a failure to safeguard data of clients, associates, and other parties, • result in the termination of contracts by our existing clients, • subject us to disclosure obligations, regulatory investigations, actions or fines, and potential litigation involving regulators, stockholders, or other members of the public, and • require significant capital and operating expenditures to investigate and remediate the breach, and organizational costs to mitigate against future incidents.
In addition, acquisitions and related transactions involve risks, including unanticipated problems regarding integration of investor account and investment security recordkeeping, additional or new regulatory requirements, operating facilities and technologies, and new employees; adverse effects on our earnings in the event acquired intangible assets or goodwill become impaired; and the existence of liabilities or contingencies not disclosed to or otherwise known by us prior to closing a transaction.
In addition, acquisitions and related transactions involve risks, including unanticipated problems regarding integration of investor account and investment security recordkeeping, additional or new regulatory requirements, operating facilities and technologies, and new employees; adverse effects on our earnings in the event acquired intangible assets or goodwill become impaired; distracting management and other key personnel from our existing businesses; and the existence of liabilities or contingencies not disclosed to or otherwise known by us prior to closing a transaction.
The soundness of other financial services institutions could adversely affect us or the client portfolios we manage. Financial services institutions are interrelated as a result of trading, clearing, counterparty or other relationships. We, and the client portfolios that we manage, have exposure to many different counterparties, and routinely execute transactions with counterparties in the financial services industry.
Financial services institutions are interrelated as a result of trading, clearing, counterparty or other relationships. We, and the client portfolios that we manage, have exposure to many different counterparties, and routinely execute transactions with counterparties in the financial services industry.
We require significant quantities and types of technology to operate our business and would be adversely affected if we fail to maintain adequate infrastructure to conduct or expand our operations or if our technology became inoperative or obsolete.
We require significant quantities and types of technology to operate our business and would be adversely affected if we or our third party providers fail to maintain adequate technology to conduct or expand our operations or if our technology became inoperative or obsolete.
There have been increasing numbers of publicized cybersecurity incidents in recent years impacting other financial services firms as well as firms in other industries. Our use of third-party service providers and cloud technologies could heighten this risk.
There have been increasing numbers of publicized cybersecurity incidents in recent years impacting financial services firms as well as firms in other industries. Our use of third-party service providers and cloud technologies 20 Page 23 Table of Contents could heighten this risk.
Any damage to our brand 20 Page 17 Table of Contents could impede our ability to attract and retain clients and key personnel, and reduce the amount of assets under our management, any of which could have a material adverse effect on our revenues and net income.
Any damage to our brand could impede our ability to attract and retain clients and key personnel, and reduce the amount of assets under our management, any of which could have a material adverse effect on our revenues and net income.
Furthermore, many aspects of the asset management industry are seeing increased regulatory activity and scrutiny, in particular related to ESG practices and related matters, transparency and unbundling of fees, inducements, conflicts of interest, risk management, cybersecurity, technology, diversity, equity and inclusion, and compensation.
Furthermore, many aspects of the asset management industry are seeing increased regulatory activity and scrutiny, in particular related to environmental, social, and governance ("ESG") practices and related matters, transparency and unbundling of fees, inducements, conflicts of interest, risk management, cybersecurity, technology, privacy and data protection, diversity, equity and inclusion, and compensation.
Additionally, over the past several years the pace and scope of new rules, regulations, policies and legal interpretations has increased both in the U.S. and globally, which requires additional resources and expense in order to digest and institute process to comply.
Additionally, over the past several years the pace 20 Page 20 Table of Contents and scope of new rules, regulations, policies and legal interpretations has increased both in the U.S. and globally, which requires additional resources and expense in order for us to digest and institute process to comply.
If we lose the availability of any associates, or, if we are unable to respond adequately to such an event in a timely manner, we may be unable to timely resume our business operations, which could lead to financial losses, a tarnished reputation and loss of clients that could result in a decrease in assets under management, lower revenues, and materially reduced net income.
If we lose the availability of any associates, or, if we are unable to respond adequately to such an event in a timely manner, we may be unable to service our clients or timely resume our business operations, which could lead to financial losses, a tarnished reputation and loss of clients that could result in a decrease in assets under management, lower revenues, and materially reduced net income, particularly if our responses to such events are less adequate than those of our competitors.
A technological breakdown or disruption in services from a service provider could also interfere with our ability to comply with financial reporting and other regulatory requirements, exposing us to disciplinary action and liability to our clients.
A technological breakdown or disruption in services could also interfere with our ability to comply with financial reporting and controls and other regulatory requirements, exposing us to regulatory action and liability to our clients.
Business changes may require us to update our processes or technology and may increase risk to meeting our business objectives. In addition, our information systems and technology platforms might not be able to accommodate our business operations, and the cost of maintaining such systems might increase from its current level.
Business changes may require us to update our processes or technology and may increase risk to meeting our business objectives. In addition, our existing information systems and technology platforms might not be able to accommodate our 20 Page 14 Table of Contents business operations, and the cost of maintaining or upgrading such systems might increase from its current level.
An externally caused data security incident, such as a cyberattack, a phishing scam, virus, ransomware attack, denial-of-service attack, or an attack launched from within our systems could materially interrupt business operations or cause disclosure or modification of confidential client or competitive information.
An externally caused data security incident, such as a cyberattack, a phishing scam, virus, ransomware attack, denial-of-service attack, or an attack launched from within our systems could compromise the integrity of confidential client or competitive information and materially interrupt our business operations.
These contracted third-party intermediaries generally offer their clients various investment products in addition to, and in competition with, our investment products, and have no contractual obligation to encourage investment in our products.
Third-party financial intermediaries we contract with generally offer their clients various investment products in addition to, and in competition with, our investment products, and have no contractual obligation to encourage investment in our products.
In addition, our continued success depends on our ability to effectively integrate operations across many systems and/or countries, and to adopt new or adapt existing technologies to meet client, industry, and regulatory demands. We might be required to make significant capital expenditures to maintain competitive infrastructure.
In addition, our continued success depends on our ability to effectively integrate operations across many systems and/or countries, and to adopt new or adapt existing technologies to meet client, industry, and regulatory demands, including, for example, generative AI technology. We might be required to make significant capital expenditures to maintain a competitive technology stack.
The presence of any of the adverse conditions discussed above would reduce revenues and net income, possibly by material amounts. 20 Page 19 Table of Contents Natural disasters and other unpredictable events could adversely affect our operations.
The presence of any of the adverse conditions discussed above would reduce revenues and net income, possibly by material amounts. Natural disasters and other unpredictable events could adversely affect our operations and financial results.
In addition, our third-party service providers and other intermediaries with which we conduct business and transmit data could be subject to a successful cyberattack or other data security event, and we cannot ensure that such third parties have all appropriate controls in place to protect the confidentiality of data in the custody of those third parties or to allow them to continue their business operations, including their services to us, in a timely manner.
In addition, our third-party service providers and other intermediaries, with which we conduct busi ness, could also be subject to cyberattacks or other data security events, and we cannot ensure that such third parties have all appropriate controls in place to protect the integrity and confidentiality of our data that is in their custody or to allow them to continue their business operations, including their services to us, in a timely manner.
Amendments to tax laws may impact the marketability of the products and services we offer our clients or our financial position. We are subject to income taxes as well as non-income-based taxes, in both the United States and various foreign jurisdictions.
Changes in tax laws or exposure to additional tax liabilities may impact our financial position or the marketability of the products and services we offer our clients. We are subject to income taxes as well as non-income-based taxes and complex tax regimes in both the United States and various foreign jurisdictions in which we operate.
We could experience adverse business impacts if legislative and regulatory changes limit retirement plans to certain products and services, or favor certain investment vehicles, that we do not offer, materially limit retirement savings opportunities or foster substantial outflows from retirement savings plans for non-retirement purposes. • There has been substantial regulatory and legislative activity at federal and state levels regarding standards of care for financial services firms, related to both retirement and taxable accounts and the United States Department of Labor intends to propose new fiduciary rules applicable to retirement plans and accounts that comprise a majority of our accounts.
We could experience adverse business impacts if legislative and regulatory changes limit retirement plans to certain products and services, or favor certain investment vehicles, that we do not offer, materially limit retirement savings opportunities or foster substantial outflows from retirement savings plans for non-retirement purposes. • There has been substantial regulatory and legislative activity at federal and state levels regarding standards of care for financial services firms, related to both retirement and taxable accounts.
Health concerns and uncertainty regarding continued coronavirus impacts could lead to further and/or increased volatility in global capital and credit markets, adversely affect our key executives and other personnel, clients, investors, service providers and other vendors, suppliers, lessees, and other third parties, and negatively impact our assets under management ("AUM"), revenues, income, business and operations.
Concerns and uncertainty regarding pandemics, epidemics or disease outbreaks could lead to increased volatility in global capital and credit markets, adversely affect our operations, key executives and other personnel, clients, investors, service providers and other vendors, suppliers, and other third parties, and negatively impact our assets under management, revenues, income, business and operations.
We may become involved in legal and regulatory proceedings that may not be covered by insurance. We are subject to regulatory and governmental inquiries and civil litigation. An adverse outcome of any such proceeding could involve substantial financial penalties and costs. From time to time, various claims against us arise in the ordinary course of business, including employment-related claims.
We are subject to regulatory and governmental inquiries and civil litigation. An adverse outcome of any such proceeding could involve substantial financial penalties and costs. From time to time, various claims against us arise in the ordinary course of business, including employment-related claims.
We are exposed to risks arising from our international operations. We operate in a number of jurisdictions outside of the United States. Our international operations require us to comply with the legal and regulatory requirements of various foreign jurisdictions and expose us to political environments and risks that can compare less favorably than those in the United States.
Our international operations require us to comply with the legal and regulatory requirements of various foreign jurisdictions and expose us to political environments and risks that can compare less favorably than those in the United States.
A regulatory proceeding, even if it does not result in a finding of wrongdoing or sanctions, could consume substantial expenditures of time and capital.
A regulatory proceeding, even if it does not result in a finding of wrongdoing or sanctions, could consume substantial amount of time, management attention and expense.
Since our revenue is based on the market value and composition of the assets under our management, the ultimate impact on global financial markets and our clients’ decisions related to this event could adversely affect our revenue and operating results.
Since our revenue is based on the market value and composition of the assets under our management, the impact of such events on global financial markets and our clients’ investment decisions could adversely affect our revenue and operating results.
Alongside their general stabilizing and risk-reducing effect on the markets, these requirements have introduced operational complexity and additional costs to derivatives portfolios. • The revised Markets in Financial Instruments Directive ("MiFID II Directive") and Regulation ("MiFIR") (together “MiFID II”) applied across the EU and member states of the European Economic Area beginning on January 3, 2018.
T hese requirements have introduced operational complexity and additional costs to derivatives portfolios. • The revised Markets in Financial Instruments Directive ("MiFID II Directive") and Regulation ("MiFIR") (together “MiFID II”) applies across the EU and member states of the European Economic Area beginning on January 3, 2018.
Separately from the investments we manage for our clients, we currently have a substantial investment portfolio. All of these investments are subject to investment market risk, and our non-operating investment income could be adversely affected by the realization of losses upon the disposition of our investments or the recognition of significant impairments or unrealized losses on these investments.
All of these investments are subject to investment market risk, and our non-operating investment income could be adversely affected by the realization of losses upon the disposition of our investments or the recognition of significant impairments or unrealized losses on these investments.
As part of our normal operations, we maintain and transmit confidential data about our clients, associates and other parties, as well as, proprietary data relating to our business operations.
We could be subject to losses if we fail to properly safeguard and maintain confidential data. As part of our normal operations, we maintain and transmit confidential data about our clients, associates and other parties, as well as proprietary data relating to our business operations.
If the investment performance of our managed investment portfolios is less than that of our competitors or applicable third-party benchmarks, we could lose existing and potential clients and suffer a decrease in assets under management. • General Financial Market Declines. We derive a significant portion of our revenues from advisory fees on managed investment portfolios.
If the investment performance of our managed investment portfolios is less than that of our competitors or applicable third-party benchmarks, we could lose existing and potential clients and suffer a decrease in assets under management.
We cannot predict the nature of future changes to the legal and regulatory requirements applicable to our business, nor the extent of the impacts that will result from current or future proposals. However, any such changes are likely to increase the costs of compliance and the complexity of our operations.
We cannot predict the nature of future changes to the legal and regulatory requirements applicable to our business, nor the extent of the impacts that will result from current or future proposals.
Although we maintain insurance coverage that we believe is reasonable, prudent and adequate for the purpose of our business, it may be insufficient to protect us against all losses and costs stemming from breaches of security, cyberattacks and other types of unlawful activity, or any resulting disruptions from such events. 20 Page 25 Table of Contents We could be subject to losses if we fail to properly safeguard and maintain confidential data.
Although we maintain insurance coverage, under terms that we believe are reasonable, prudent and adequate for the purpose of our business, it may be insufficient to protect us against all losses and costs stemming from breaches of security, cyberattacks and other types of unlawful activity, or any resulting disruptions from such events.
Potential impacts of current or proposed legal or regulatory requirements include, without limitation, the following: • As part of the debate in Washington, D.C. and in state legislatures, there has been increasing focus on the framework of the U.S. retirement system.
Potential impacts of current or proposed legal or regulatory requirements include, without limitation, the following: • There has been increasing focus on the framework of the U.S. retirement system at the federal and state levels.
Any failure to properly safeguard and maintain confidential data creates risk that we could be found to be in violation of various laws and regulations. Item 1B. Unresolved Staff Comments. None.
Any failure to properly safeguard and maintain confidential data creates risk that we could be found to be in violation of laws and regulations and subject us to disclosure obligations, regulatory investigations, actions or fines, and litigation. Item 1B. Unresolved Staff Comments. None.
There also has been an increase in litigation and in regulatory investigations in the financial services industry in recent years, including client claims, class action suits, and government actions alleging substantial monetary damages and penalties. We carry insurance in amounts and under terms that we believe are appropriate.
There also has been an increase in litigation and in regulatory investigations in the financial services industry in recent years, including client claims, class action suits, and government actions claiming substantial monetary damages and penalties.
In addition, some investors rely on third-party financial planners, registered investment advisers, and other consultants or financial professionals to advise them on the choice of an investment adviser and investment products. These professionals and consultants can favor a competing investment product as better meeting their particular clients' needs.
In addition, some investors rely on third-party financial planners, registered investment advisers, and other consultants or financial professionals to advise them on the choice of an investment adviser and investment products. These professionals and consultants may favor a competing investment product for reasons we cannot control.
They may also result in changes to our product or service offerings. The changing regulatory landscape may also impact a number of service providers that provide services to us and, to the extent such service providers alter their services or increase their fees, it may impact our expenses or those of the products we offer.
The changing regulatory landscape may also impact a number of service providers that provide services to us and, to the extent such service providers alter their operations or increase their fees, it may impact our expenses or those of the products we offer. We may become involved in legal and regulatory proceedings that may not be covered by insurance.
Climate-related physical and transition risks could impact us both directly and indirectly through adverse impacts to our clients, including as a result of declines in asset values, changes in client preferences, increased regulatory and compliance costs and significant business disruptions. Any of these risks may cause our AUM, revenue and earnings to decline.
Climate-related physical and transition risks could impact us both directly and indirectly through adverse impacts to our clients and the global economy in general, including as a result of interruptions to infrastructure and our operations, declines in asset values and stranded assets, changes in client preferences, increased regulatory and compliance costs and significant business disruptions.
Armed conflicts, trade wars, tariffs or sanctions, terrorist attacks, cyberattacks, power failures, epidemics or pandemics, climate change, increased severity of weather events, or natural disasters and other events outside of our control could adversely affect our revenues, expenses, and net income by: • decreasing investment valuations in, and returns on, the investment portfolios that we manage; • causing disruptions in national or global economies that decrease investor confidence and make investment products generally less attractive; • incapacitating or inflicting losses of lives among our employees; • interrupting our business operations or those of critical service providers or other providers; • triggering technology delays or failures; and • requiring substantial capital expenditures and operating expenses to remediate damage, replace our facilities, and restore our operations.
The occurrence of extreme events, such as armed conflicts, terrorist attacks, epidemic, pandemic or disease outbreaks (such as the Covid-19 pandemic), infrastructure failures, natural disasters or extreme weather events (which may increase in intensity or frequency as a result of climate change), and other events outside of our control could adversely affect our revenues, expenses, and net income by: • decreasing investment valuations in, and returns on, the investment portfolios that we manage; • causing disruptions in national or global economies that decrease investor confidence and make investment products generally less attractive; • incapacitating or inflicting losses of lives among our employees; • interrupting our business operations or those of critical service providers or other providers; 20 Page 17 Table of Contents • affecting the availability of infrastructure upon which our operations depend, such as road networks and electrical power grids; • triggering technology delays or failures; and • requiring substantial capital expenditures and operating expenses to remediate damage, replace our facilities, and restore our operations.
We cannot be assured that our insurance will cover every liability and loss to which we may be exposed, or that our insurance policies will continue to be available at acceptable terms and fees. Certain insurance coverage may not be available or may be prohibitively expensive in future periods.
We carry insurance in amounts and under terms that we believe are appropriate, however, we cannot be assured that our insurance will cover every liability and loss to which we may be exposed, or that our insurance policies will continue to be available at acceptable terms and fees.
Additionally, we must effectively ensure a safe working environment for associates working onsite in our offices, and adequately manage the post-pandemic transition from remote to onsite or a hybrid working environment.
Additionally, we must effectively ensure a safe working environment for associates working onsite in our offices, and adequately manage the post-pandemic transition from remote to onsite or a hybrid working environment. In the event that our associates become incapacitated by the coronavirus, our business operations may be impacted, which could lead to reputational and financial harm.
Any such effects could cause our revenues and profitability to decline. We maintain various compliance procedures and other controls to seek to prevent, detect and correct such errors. Significant errors for which we are responsible could impact our reputation, results of operations, financial condition or liquidity. Our expenses are subject to significant fluctuations that could materially decrease net income.
Any such events could cause our revenues and profitability to decline, and significant errors for which we are 20 Page 15 Table of Contents responsible could have a material adverse impact on our reputation, results of operations, financial condition or liquidity. Our expenses are subject to significant fluctuations that could materially decrease net income.
The loss of key personnel could damage our reputation and make it more difficult to attract and retain employees and investors. Losses of assets from our client investors would decrease our revenues and net income, possibly materially. LEGAL AND REGULATORY RISKS.
The loss of key personnel could also damage our reputation and make it more difficult to attract and retain employees and investors, and in turn cause our assets under management to decrease, which could have a material adverse effect on our revenues and net income. LEGAL AND REGULATORY RISKS.
As noted above, we are subject to numerous laws and regulations designed to protect confidential data, such as U.S. federal and state laws and foreign laws and regulations governing the privacy and protection of personal or other confidential data, such as the EU’s General Data Protection Regulation and similar types of laws enacted in several U.S. states and other jurisdictions in Asia.
As noted above, we are subject to numerous laws and regulations governing privacy and the protection of personal or other data in the U.S., EU and other jurisdictions we operate in .
For example, in addition to the EU's GDPR data protection rules, we also are or may become subject to or affected by additional country, federal and state laws, regulations and guidance impacting consumer privacy, such as the California Consumer Privacy Act ("CCPA") (and new provisions becoming effective January 1, 2023 under the California Privacy Rights Act) that provides for enhanced consumer protections for California residents, enforcement authority by the California Attorney General and/or the California Privacy Protection Agency for violations, and the potential for private litigation, including statutory damages for data security breaches.
For example, in addition to the EU's GDPR data protection rules, we also are or may become subject to or affected by additional country, federal and state laws, regulations and guidance impacting consumer privacy, such as the California Consumer Privacy Act.
As a result, investment advisors that emphasize passive products have gained and may continue to gain market share from active managers like us. While we believe there will always be demand for strong performing active management, we cannot predict how much market share these competitors will gain.
While we believe there will always be demand for strong performing active management, we cannot predict how much market share these competitors will gain.
All of our technology systems, including those provided by service providers, are vulnerable to disability or failures due to cyberattacks, natural disasters, power failures, acts of war or terrorism, sabotage, coding errors, and other causes. A suspension or termination of vendor-provided software licenses or related support, upgrades, and maintenance could cause system delays or interruption.
All of our technology systems, including those provided or operated by third-party service providers, are vulnerable to disability or failures due to cyberattacks, natural disasters or extreme weather events (which may increase in frequency or intensity as a result of climate change), power failures, acts of war or terrorism, sabotage, coding errors, and other causes.
Actions taken by applicable regulatory or legislative bodies may impact our business activities and increase our costs. • The Commodity Futures Trading Commission ("CFTC") regulation may limit the ability of certain sponsored investment products to use futures, swaps, and other derivatives.
We are monitoring the rulemaki ng process and the potential impact the Retirement Security Rule may have on our business. • The Commodity Futures Trading Commission ("CFTC") regulation may limit the ability of certain sponsored investment products to use futures, swaps, and other derivatives.
Global pandemics create significant volatility, uncertainty and economic disruption to the global economy and may further impact our business, financial condition and results of operations. The coronavirus pandemic has adversely affected global financial markets and impacted global supply chains.
Our business, financial condition, and results of operation may be adversely affected by the coronavirus or other global pandemics. Pandemics, epidemics or disease outbreaks, as well as measures enacted to prevent their spread, may create significant volatility, uncertainty and disruption to the global economy and may impact our business, financial condition and results of operations.
Climate-related physical risks arise from the direct impacts of a changing climate in the short- and long-term. Such risks may include the risks of extreme weather events and changes in temperature, which may damage infrastructure and facilities, as well as disrupt connectivity or supply chains.
Such risks may include an increase in the intensity and frequency of extreme weather events, changes in temperature and rising sea level, which may damage infrastructure and facilities, increase our energy costs, negatively impact our workforce, as well as disrupt connectivity or supply chains.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe lease all our offices outside the U.S. with London and Hong Kong being our largest, as well as our business operations recovery site in Maryland, our technology development center in New York City, and offices in San Francisco, Washington D.C. and Philadelphia. 20 Page 26 Table of Contents OHA has leased offices in the United States (New York City, Fort Worth, and San Francisco), United Kingdom (London), Australia (Sydney/Melbourne), Hong Kong, and Luxembourg.
Biggest changeWe lease certain offices in the U.S., including offices in New York City, our business operations recovery site in Maryland, and offices in Fort Worth, San Francisco, Washington D.C. and Philadelphia. We lease all our offices outside the U.S., with London and Hong Kong being our largest.
Information concerning our anticipated capital expenditures in 2023 is set forth in the capital resources and liquidity and material cash commitments discussions in Item 7 of this Form 10-K and our future minimum rental payments under noncancellable operating leases at December 31, 2022 is set forth in the Leases footnote to our audited consolidated financial statements in Item 8 of this Form 10-K.
Information concerning our anticipated capital expenditures in 2024 is set forth in the capital resources and liquidity and material cash commitments discussions in Item 7 of this Form 10-K and our future minimum rental payments under noncancellable operating leases at December 31, 2023 is set forth in the Leases footnote to our audited consolidated financial statements in Item 8 of this Form 10-K.
Item 2. Properties. Our corporate headquarters occupies 444,000 square feet of space under lease at 100 East Pratt Street in Baltimore, Maryland. In December 2020, we announced that we are moving our headquarters in 2024 to a complex to be built with approximately 550,000 square feet of space under lease in Baltimore, Maryland.
Item 2. Properties. Our corporate headquarters occupies 446,000 square feet of space under lease at 100 East Pratt Street in Baltimore, Maryland. In December 2020, we announced that we are moving our headquarters in 2024 to a complex to be built with approximately 550,000 square feet of space under lease in Baltimore, Maryland.
In 2024, we will vacate the space at 100 East Pratt Street. We have offices in 17 markets around the world, including the U.S.
We will also vacate the space at 100 East Pratt Street once the new headquarters is fully completed. We have offices in 17 markets around the world, including the U.S.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeDardis (49), Chief Financial Officer and Treasurer since 2021, Head of Finance in 2021 and Head of Corporate Strategy from 2016 to 2021, and a Vice President from 2010. Glenn R. August (61), Chief Executive Officer of Oak Hill Advisors, L.P. (“OHA”), a Director and Vice President since 2021.
Biggest changeLarge-Cap Equity Growth Strategy from 2001 to 2016, and a Vice President from 2001 to 2021. 20 Page 26 Table of Contents Jennifer B. Dardis (50), Chief Financial Officer and Treasurer since 2021, Head of Finance in 2021, Head of Corporate Strategy from 2016 to 2021, and a Vice President since 2010. Glenn R.
Item 4. Mine Safety Disclosures. Not applicable. Information about our Executive Officers. The following information includes the names, ages, and positions of our executive officers as of February 15, 2023. There are no arrangements or understandings pursuant to which any person serves as an officer. The first twelve individuals are members of our management committee. Robert W.
Item 4. Mine Safety Disclosures. Not applicable. Information about our Executive Officers. The following information includes the names, ages, and positions of our executive officers as of February 16, 2024. There are no arrangements or understandings pursuant to which any person serves as an officer. The first twelve individuals are members of our management committee. Robert W.
David Oestreicher (55), General Counsel since 2020, Corporate Secretary since 2012, and a Vice President since 2001. From 2009 through 2020, Mr. Oestreicher was the Chief Legal Counsel. Sebastien Page (46), Head of Global Multi-Asset and a Vice President since 2015 and chief investment officer since 2022.
David Oestreicher (56), General Counsel since 2020, Corporate Secretary since 2012, and a Vice President since 2001. From 2009 through 2020, Mr. Oestreicher was the Chief Legal Counsel. Sebastien Page (47), Head of Global Multi-Asset and a Vice President since 2015 and Chief Investment Officer since 2022. Dorot hy C.
Sharps (51), Chief Executive Officer since 2022, a Director and President since 2021, Head of Investments from 2018 to 2021, Group Chief Investment Officer from 2017 to 2021, Co-Head of Global Equity from 2017 to 2018, Lead Portfolio Manager, Institutional U.S. Large-Cap Equity Growth Strategy from 2001 to 2016, and a Vice President from 2001 to 2021. Jennifer B.
Sharps (52), Chief Executive Officer since 2022, a Director and President since 2021, Head of Investments from 2018 to 2021, Group Chief Investment Officer from 2017 to 2021, Co-Head of Global Equity from 2017 to 2018, Lead Portfolio Manager, Institutional U.S.
Rowe Price Investment Management since 2020, Associate Head of U.S Equity from 2020 to 2021, and a Vice President since 2007. Kimberly H. Johnson (50), Chief Operating Officer since 2022, and a Vice President since 2022. Andrew C. McCormick (62), Head of Fixed Income since 2019 and chief investment officer since 2022, Head of U.S.
Jackson (61), Head of T. Rowe Price Investment Management since 2020, Associate Head of U.S Equity from 2020 to 2021, and a Vice President since 2007. Kimberly H. Johnson (51), Chief Operating Officer since 2022, and a Vice President since 2022. Prior to joining T.
Justin Thomson ( 55 ), Head of International Equity since 2021, chief investment officer since 2017 , Co-Head of Global Equity in 2021, and a Vice President since 2001. 20 Page 27 Table of Contents Eric L. Veiel (51), Head of Global Equity and chief investment officer since 2022. Co-Head of Global Equity from 2018 to 2021, Head of U.S.
Justin Thomson ( 56 ), Head of International Equity since 2021, Chief Investment Officer since 2017 , Co-Head of Global Equity in 2021, and a Vice President since 2001. Eric L. Veiel (52), Head of Global Investments and Chief Investment Officer since 2024.
He co-founded the predecessor investment firm to OHA in 1987 and took responsibility for the firm’s credit and distressed investment activities in 1990. Robert C.T.
August (62), Chief Executive Officer of OHA, a Director and Vice President since 2021. He co-founded the predecessor investment firm to OHA in 1987 and took responsibility for the firm’s credit and distressed investment activities in 1990.
Taxable Bond from 2013 to 2018, and a Vice President since 2008. Josh Nelson (45), Head of U.S. Equity since 2022, Associate Head of U.S. Equity in 2021, Director of Equity Research North America from 2019 to 2021, and a Vice President since 2007.
Rowe Price, she was Fannie Mae's Executive Vice President and Chief Operating Officer from 2018 to 2022, and its Chief Risk Officer, from 2015 to 2018. Josh Nelson (46), Head of U.S. Equity since 2022, Associate Head of U.S. Equity in 2021, Director of Equity Research North America from 2019 to 2021, and a Vice President since 2007.
Equity from 2016 to 2021, Director of Equity Research North America from 2014 to 2015, and a Vice President since 2006. Jessica M. Hiebler (47), Principal Accounting Officer since 2010, Controller since 2020 and a Vice President since 2009. PART II
Head of Global Equity and Chief Investment Officer From 2022 to 2023, Co-Head of Global Equity from 2018 to 2021, Head of U.S. Equity from 2016 to 2021, Director of Equity Research North America from 2014 to 2015, and a Vice President since 2006. Jessica M.
Higginbotham (55), Head of Global Distribution since 2019 and interim Chief Operating Officer since 2021, Head of Global Investment Management Services from 2018 to 2019, Head of Global Investment Services from 2012 to 2018, and a Vice President since 2012. Stephon A. Jackson (60), Head of T.
Sawyer (56 ), Head of Global Distribution since 2024, Head of U.S. Intermediaries and Retirement Plan Services from 2022 to 2023, Head of Individual Investors and Retirement Plan Services from 2019 to 2021, Head of Human Resources from 2018 to 2019, and a Vice President since 2012.
Added
Arif Husain (51), Head of Global Fixed Income since 2024 and Chief Investment Officer since 2023, Head of International Fixed Income from 2022 to 2023, Portfolio Manager for the Dynamic Global Bond Fund from 2015 to 2023 and Global Government Bond High Quality Strategy from 2019 to 2023, and a Vice President since 2013. Stephon A.
Added
Hiebler (48), Principal Accounting Officer since 2010, Controller since 2020 and a Vice President since 2009. 20 Page 27 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

6 edited+4 added−4 removed0 unchanged
Biggest changeMonth 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 October 610,184 $ 105.58 610,184 9,207,912 November 166,243 $ 106.02 157,695 9,050,217 December 278,999 $ 110.46 275,000 8,775,217 Total 1,055,426 $ 106.94 1,042,879 Shares repurchased by us in a quarter may include repurchases conducted pursuant to publicly announced board authorizations, 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.
Biggest changeShares repurchased by us in a quarter may include repurchases conducted pursuant to publicly announced board authorizations, outstanding shares surrendered to the firm 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.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Our common stock ($.20 par value per share) trades on the NASDAQ Global Select Market under the symbol TROW.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Our common stock ($0.20 par value per share) trades on the NASDAQ Global Select Market under the symbol TROW.
Common stock owned outright by our associates and directors, combined with outstanding vested stock options and unvested restricted stock awards, total approximately 7.4% of our outstanding stock and outstanding vested stock options at December 31, 2022. Item 6. Reserved
Common stock owned outright by our associates and directors, combined with outstanding vested stock options and unvested restricted stock awards, total nearly 7% of our outstanding stock and outstanding vested stock options at December 31, 2023.
Authorization dates 12/31/2021 Additional shares authorized Total Number of Shares Purchased Maximum Number of Shares that May Yet Be Purchased at 12/31/2022 February 2019 525,910 — (525,910) — March 2020 15,000,000 — (6,224,783) 8,775,217 15,525,910 — (6,750,693) 8,775,217 We have 980 stockholders of record and approximately 572,000 beneficial stockholder accounts held by brokers, banks, and other intermediaries holding our common stock.
Authorization dates 12/31/2022 Additional shares authorized Total number of shares purchased Maximum number of shares that may yet be purchased at 12/31/2023 March 2020 8,775,217 — (2,426,700) 6,348,517 We have 940 stockholders of record and approximately 478,000 beneficial stockholder accounts held by brokers, banks, and other intermediaries holding our common stock.
Of the total number of shares purchased during the fourth quarter of 2022, 12,547 were related to shares surrendered in connection with employee stock option exercises and none were related to shares withheld to cover tax withholdings associated with the vesting of restricted stock awards. 20 Page 28 Table of Contents The following table details the changes in and status of the Board of Directors’ outstanding publicly announced board authorizations.
Of the total number of shares purchased during the fourth quarter of 2023, 20,454 were related to shares surrendered in connection with employee stock option exercises and none were related to shares withheld to cover tax withholdings associated with the vesting of restricted stock awards.
Dividends per share during the past two years were: 1st quarter 2nd quarter 3rd quarter 4th quarter 2022 $ 1.20 $ 1.20 $ 1.20 $ 1.20 2021 $ 1.08 $ 4.08 $ 1.08 $ 1.08 The cash dividends declared during the second quarter of 2021 include a special dividend of $3.00 per share that was declared in June 2021 and paid in July 2021.
Dividends per share during the past two years were: 1st quarter 2nd quarter 3rd quarter 4th quarter 2023 $ 1.22 $ 1.22 $ 1.22 $ 1.22 2022 $ 1.20 $ 1.20 $ 1.20 $ 1.20 See Part III, Item 12.
Removed
Our common stockholders have approved all of our equity-based compensation plans.
Added
"Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters" for information relating to shares authorized for issuance under our equity compensation plans. The following table presents repurchase activity during the fourth quarter of 2023.
Removed
These plans provide for the following issuances of shares of our common stock at December 31, 2022: Employee and non-employee director plans Employee stock purchase plan Total Exercise of outstanding options 2,218,506 — 2,218,506 Settlement of outstanding restricted stock units 5,996,539 — 5,996,539 Future issuances 10,437,953 907,014 11,344,967 Total 18,652,998 907,014 19,560,012 The outstanding options included in the table above have a weighted-average exercise price of $74.31.
Added
Month Total number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced program (1) Maximum number of shares that may yet be purchased under the program October 120,282 $ 98.99 115,000 7,262,380 November 445,349 $ 96.09 438,863 6,823,517 December 483,686 $ 104.59 475,000 6,348,517 Total 1,049,317 $ 100.34 1,028,863 (1) In March 2020, the Board approved a share repurchase program of approximately 24.1 million shares.
Removed
Under the terms of the 2020 Long-Term Incentive Plan, approved by stockholders in May 2020, and the 2012 Long-Term Incentive Plan, the number of shares provided and available for future issuance will increase as we repurchase common stock in the future with the proceeds from stock option exercises.
Added
The share repurchase program does not have an expiration date.
Removed
No shares have been issued under our Employee Stock Purchase Plan since its inception; all shares have been purchased in the open market. The following table presents repurchase activity during the fourth quarter of 2022.
Added
The following table details the changes in and status of the Board of Directors’ outstanding publicly announced authorization.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

156 edited+53 added−59 removed52 unchanged
Biggest changeThe following table details changes in our assets under management by vehicle during the last three years: (in billions) U.S. mutual funds Subadvised and separate accounts Collective investment trusts and other investment products Total Assets under management at December 31, 2019 $ 682.7 $ 313.8 $ 210.3 $ 1,206.8 Net cash flows before client transfers (11.5) 8.0 9.1 5.6 Client transfers (13.7) 2.0 11.7 — Net cash flows after client transfers (25.2) 10.0 20.8 5.6 Net market appreciation and income 140.0 76.3 43.7 260.0 Distributions not reinvested (2.9) — (.2) (3.1) Acquired assets under management — — 1.2 1.2 Change during the period 111.9 86.3 65.5 263.7 Assets under management at December 31, 2020 794.6 400.1 275.8 1,470.5 Net cash flows before client transfers (4.9) (34.0) 10.4 (28.5) Client transfers (23.8) 2.7 21.1 — Net cash flows after client transfers (28.7) (31.3) 31.5 (28.5) Net market appreciation and income 111.8 57.4 36.2 205.4 Distributions not reinvested (6.3) — (.2) (6.5) Change during the period 76.8 26.1 67.5 170.4 Acquired fee-basis assets under management — 10.9 36.0 46.9 Assets under management at December 31, 2021 871.4 437.1 379.3 1,687.8 Net cash flows before client transfers (43.1) (23.8) 5.2 (61.7) Client transfers (12.4) 1.5 10.9 — Net cash flows after client transfers (55.5) (22.3) 16.1 (61.7) Net market depreciation and losses (184.8) (94.3) (69.0) (348.1) Distributions not reinvested (3.3) — — (3.3) Change during the period (243.6) (116.6) (52.9) (413.1) Assets under management at December 31, 2022 627.8 320.5 326.4 $ 1,274.7 20 Page 31 Table of Contents The following table details changes in our assets under management by asset class during the last three years: (in billions) Equity Fixed income, including money market Multi-asset (1) Alternatives (2) Total Assets under management at December 31, 2019 $ 698.9 $ 147.9 $ 360.0 $ — $ 1,206.8 Net cash flows — 14.1 (8.5) — 5.6 Net market appreciation and income (3) 196.9 5.5 54.5 — 256.9 Acquired assets under management — 1.2 — — 1.2 Change during the period 196.9 20.8 46.0 — 263.7 Assets under management at December 31, 2020 895.8 168.7 406.0 — 1,470.5 Net cash flows (44.6) 1.2 14.9 — (28.5) Net market appreciation and income (3) 141.5 .6 56.8 — 198.9 Acquired fee-basis assets under management — 5.2 — 41.7 46.9 Change during the period 96.9 7.0 71.7 41.7 217.3 Assets under management at December 31, 2021 992.7 175.7 477.7 41.7 1,687.8 Net cash flows (72.7) 4.1 4.9 2.0 (61.7) Net market depreciation and losses (3) (255.8) (12.8) (82.5) (0.3) (351.4) Change during the period (328.5) (8.7) (77.6) 1.7 (413.1) Assets under management at December 31, 2022 $ 664.2 $ 167.0 $ 400.1 $ 43.4 $ 1,274.7 (1) The underlying assets under management of the multi-asset portfolios have been aggregated and presented in this category and not reported in the equity and fixed income columns.
Biggest changeThis increase was primarily driven by net market appreciation and income, net of distributions not reinvested, of $251.6 billion, offset by net cash outflows of $81.8 billion. 20 Page 30 Table of Contents The following table details changes in our assets under management by asset class during the last three years: (in billions) Equity Fixed income, including money market Multi-asset (1) Alternatives (2) Total Assets under management at December 31, 2020 $ 895.8 $ 168.7 $ 406.0 $ — $ 1,470.5 Net cash flows (3) (44.6) 1.2 14.9 — (28.5) Net market appreciation (depreciation) and income (4) 141.5 0.6 56.8 — 198.9 Acquired assets under management — 5.2 — 41.7 46.9 Change during the period 96.9 7.0 71.7 41.7 217.3 Assets under management at December 31, 2021 992.7 175.7 477.7 41.7 1,687.8 Net cash flows (3) (72.7) 4.1 4.9 2.0 (61.7) Net market appreciation (depreciation) and income (4) (255.8) (12.8) (82.5) (0.3) (351.4) Change during the period (328.5) (8.7) (77.6) 1.7 (413.1) Assets under management at December 31, 2022 664.2 167.0 400.1 43.4 1,274.7 Net cash flows (3) (85.4) (6.8) 9.1 1.3 (81.8) Net market appreciation (depreciation) and income (4) 164.8 9.8 73.8 3.2 251.6 Change during the period 79.4 3.0 82.9 4.5 169.8 Assets under management at December 31, 2023 $ 743.6 $ 170.0 $ 483.0 $ 47.9 $ 1,444.5 (1) The underlying AUM of the multi-asset portfolios have been aggregated and presented in this category and not reported in the equity and fixed income columns.
Indefinite-lived intangible assets are tested for impairment annually, in the fourth quarter, or more frequently if events or changes in circumstances indicate that it is more likely than not that the intangible asset is impaired. Management must first determine the level at which indefinite-lived intangible assets are tested for impairment (i.e., unit of account).
Intangible assets Indefinite-lived intangible assets are tested for impairment annually, in the fourth quarter, or more frequently if events or changes in circumstances indicate that it is more likely than not that the intangible asset is impaired. Management must first determine the level at which indefinite-lived intangible assets are tested for impairment (i.e., unit of account).
For the first half of 2022, we voluntarily waived $9.3 million, or less than .2%, of our investment advisory fees from certain of our money market mutual funds, trusts, and other investment portfolios in order to maintain a positive yield for investors. No fees were waived in the second half of 2022.
For the first half of 2022, we voluntarily waived $9.3 million, or less than 0.2%, of our investment advisory fees from certain of our money market mutual funds, trusts, and other investment portfolios in order to maintain a positive yield for investors. No money market fees were waived in the second half of 2022.
The increase in our effective tax rate in 2022 from 2021 was primarily due to the unfavorable impact of net losses attributable to redeemable non-controlling interests held in our consolidated investment products and a reduction in the discrete tax benefits associated with option exercises and restricted stock vests.
For 2022, the increase in our effective tax rate from 2021 was primarily due to the unfavorable impact of net losses attributable to redeemable non-controlling interests held in our consolidated investment products and a reduction in the discrete tax benefits associated with option exercises and restricted stock vests.
(5) This non-GAAP adjustment represents the other non-operating income (loss) and the net gains (losses) earned on our non-consolidated investment portfolio that are not designated as economic hedges of the supplemental savings plan liability and that are not part of the cash and discretionary investment portfolio.
(5) This non-GAAP adjustment represents the other non-operating income (loss) and the net gains (losses) earned on our investment portfolio that are not designated as economic hedges of the supplemental savings plan liability and that are not part of the cash and discretionary investment portfolio.
Consolidation We consolidate all subsidiaries and sponsored investment products in which we have a controlling interest. We are deemed to have a controlling interest when we own the majority of the voting interest of an entity or are deemed to be the primary beneficiary of a variable interest entity ("VIE").
Consolidation We consolidate all subsidiaries and sponsored investment products in which we have a controlling financial interest. We are deemed to have a controlling interest when we own the majority of the voting interest of an entity or are deemed to be the primary beneficiary of a variable interest entity ("VIE").
(4) These non-GAAP adjustments remove the impact that the consolidated sponsored investment products have on our U.S. GAAP consolidated statements of income. Specifically, we add back the operating expenses and subtract the investment income of the consolidated sponsored investment products.
(4) These non-GAAP adjustments remove the impact the consolidated sponsored investment products have on our U.S. GAAP consolidated statements of income. Specifically, we add back the operating expenses and subtract the investment income of the consolidated sponsored investment products.
Rowe Price Group Consolidated sponsored investment products Elims As reported Cash flows from operating activities Net income $ 1,557.9 $ (211.7) $ 103.4 $ 1,449.6 Adjustments to reconcile net income to net cash provided by operating activities Depreciation, amortization and impairments of property, equipment and software 225.7 — — 225.7 Amortization and impairment of acquisition-related assets and retention agreements 420.1 — — 420.1 Fair value remeasurement of contingent consideration liability (161.2) — — (161.2) Stock-based compensation expense 285.4 — — 285.4 Net losses recognized on investments 314.0 — (103.4) 210.6 Net change in sponsored investment products used to economically hedge supplemental savings plan liability (18.8) — — (18.8) Net change in trading securities held by consolidated sponsored investment products — 87.9 — 87.9 Other changes in assets and liabilities (182.8) 46.6 (3.7) (139.9) Net cash provided by (used in) operating activities 2,440.3 (77.2) (3.7) 2,359.4 Net cash provided by (used in) investing activities (179.3) (8.7) 146.5 (41.5) Net cash provided by (used in) financing activities (2,028.5) 94.4 (142.8) (2,076.9) Effect of exchange rate changes on cash and cash equivalents of consolidated sponsored investment products — 9.5 — 9.5 Net change in cash and cash equivalents during period 232.5 18.0 — 250.5 Cash and cash equivalents at beginning of year 1,523.1 101.1 — 1,624.2 Cash and cash equivalents at end of period $ 1,755.6 $ 119.1 $ — $ 1,874.7 20 Page 47 Table of Contents 2021 Cash flow attributable to: (in millions) T.
Rowe Price Group Consolidated sponsored investment products Elims As reported Cash flows from operating activities Net income $ 1,557.9 $ (211.7) $ 103.4 $ 1,449.6 Adjustments to reconcile net income to net cash provided by operating activities Depreciation, amortization and impairments of property, equipment and software 225.7 — — 225.7 Amortization and impairment of acquisition-related assets and retention agreements 420.1 — — 420.1 Fair value remeasurement of contingent consideration liability (161.2) — — (161.2) Stock-based compensation expense 285.4 — — 285.4 Net losses recognized on investments 314.0 — (103.4) 210.6 Net change in sponsored investment products used to economically hedge supplemental savings plan liability (18.8) — — (18.8) Net change in trading securities held by consolidated sponsored investment products — 87.9 — 87.9 Other changes in assets and liabilities (182.8) 46.6 (3.7) (139.9) Net cash provided by (used in) operating activities 2,440.3 (77.2) (3.7) 2,359.4 Net cash provided by (used in) investing activities (179.3) (8.7) 146.5 (41.5) Net cash provided by (used in) financing activities (2,028.5) 94.4 (142.8) (2,076.9) Effect of exchange rate changes on cash and cash equivalents of consolidated sponsored investment products — 9.5 — 9.5 Net change in cash and cash equivalents during period 232.5 18.0 — 250.5 Cash and cash equivalents at beginning of year 1,523.1 101.1 — 1,624.2 Cash and cash equivalents at end of period $ 1,755.6 $ 119.1 $ — $ 1,874.7 2021 Cash flow attributable to: (in millions) T.
GAAP Basis $ 4,114.7 $ 2,373.7 $ (425.5) $ 498.6 $ 1,557.9 $ 6.70 Non-GAAP adjustments: Acquisition-related non-GAAP adjustments: Investment and NCI amortization and impairments (1) (Capital allocation-based income and Compensation and related costs) 40.5 57.5 — 15.5 42.0 .18 Acquisition-related retention arrangements (1) (Compensation and related costs) (70.2) 70.2 — 18.9 51.3 .22 Contingent consideration (1) 161.2 (161.2) — (43.3) (117.9) (.52) Intangible assets amortization and impairments (1) (283.5) 283.5 — 76.2 207.3 .89 Transaction costs (2) (General, admin and other) (.9) .9 — .2 .7 .01 Total acquisition-related non-GAAP adjustments (152.9) 250.9 — 67.5 183.4 .78 Supplemental savings plan liability (3) (Compensation and related costs) 132.3 (132.3) 139.4 1.9 5.2 .02 Consolidated T.
GAAP Basis (FS line item) $ 4,114.7 $ 2,373.7 $ (425.5) $ 498.6 $ 1,557.9 $ 6.70 Non-GAAP adjustments: Acquisition-related: Investment and NCI amortization and impairments (1) (Capital allocation-based income and Compensation and related costs) 40.5 57.5 — 15.5 42.0 0.18 Acquisition-related retention arrangements (1) (Compensation and related costs) (70.2) 70.2 — 18.9 51.3 0.22 Contingent consideration (1) 161.2 (161.2) — (43.3) (117.9) (0.52) Intangible assets amortization and impairments (1) (283.5) 283.5 — 76.2 207.3 0.89 Transaction costs (2) (General, admin and other) (0.9) 0.9 — 0.2 0.7 0.01 Total acquisition-related (152.9) 250.9 — 67.5 183.4 0.78 Supplemental savings plan liability (3) (Compensation and related costs) 132.3 (132.3) 139.4 1.9 5.2 0.02 Consolidated T.
The average annualized fee rate earned on our assets under management was 42.7 basis points in 2022, compared with 44.4 basis points earned in 2021.
The average annualized effective fee rate earned on our assets under management was 42.7 basis points in 2022, compared with 44.4 basis points earned in 2021.
The remaining change in reported cash flows from financing activities is primarily attributable to a $18.4 million decrease in net redemptions from redeemable non-controlling interest holders of our consolidated investment products and a $45.4 million increase in cash flow related to common stock issued under stock compensation plans during 2022 compared to 2021.
The remaining change in reported cash flows from financing activities is primarily attributable to a $18.4 million decrease in net redemptions from redeemable non-controlling interest holders of our consolidated investment products and a $45.4 million increase in cash flow related to common stock issued under stock compensation plans during 2022 compared to 2021. MATERIAL CASH COMMITMENTS.
The Overall Morningstar Rating™ is derived from a weighted average of the performance figures associated with a fund’s 3, 5, and 10 year (if applicable) Morningstar Rating™ metrics. RESULTS OF OPERATIONS. The following table and discussion set forth information regarding our consolidated financial results for 2022, 2021 and 2020 on a U.S. GAAP basis and a non-GAAP basis.
The Overall Morningstar Rating™ is derived from a weighted average of the performance figures associated with a fund’s 3, 5, and 10 year (if applicable) Morningstar Rating™ metrics. RESULTS OF OPERATIONS. The following table and discussion set forth information regarding our consolidated financial results for 2023, 2022 and 2021 on a U.S. GAAP basis and a non-GAAP basis.
These advice solutions, which the vast 20 Page 32 Table of Contents majority is overseen by our multi-asset division, may include strategic asset allocation, and in certain portfolios, asset selection and/or tactical asset allocation overlays. We also offer advice solutions through retail separately managed accounts and separately managed accounts model delivery.
These advice solutions, which the vast majority is overseen by our multi-asset division, may include strategic asset allocation, and in certain portfolios, asset selection and/or tactical asset allocation overlays. We also offer advice solutions through retail separately 20 Page 31 Table of Contents managed accounts and separately managed accounts model delivery.
We present those significant accounting policies used in the preparation of our consolidated financial statements as an integral part of those statements within this 2022 Annual Report on Form 10-K. In the following discussion, we highlight and explain further certain of those policies and estimates that are most critical to the preparation and understanding of our financial statements.
We present those significant accounting policies used in the preparation of our consolidated financial statements as an integral part of those statements within this 2023 Annual Report on Form 10-K. In the following discussion, we highlight and explain further certain of those policies and estimates that are most critical to the preparation and understanding of our financial statements.
Rowe Price sponsored mutual funds and composites AUM. (2) Source: © 2022 Morningstar, Inc. All rights reserved. The information contained herein: 1) is proprietary to Morningstar and/or its content providers; 2) may not be copied or distributed; and 3) is not warranted to be accurate, complete, or timely.
Rowe Price sponsored mutual funds and composites AUM. (2) Source: © 2024 Morningstar, Inc. All rights reserved. The information contained herein: 1) is proprietary to Morningstar and/or its content providers; 2) may not be copied or distributed; and 3) is not warranted to be accurate, complete, or timely.
GAAP financial measures for each of the last three years. 2022 (in millions) Operating expenses Net operating income Non-operating income (loss) Provision (benefit) for income taxes (6) Net income attributable to T. Rowe Price Group Diluted earnings per share (7) U.S.
GAAP financial measures for each of the last three years. 2023 (in millions) Operating expenses Net operating income Non-operating income (loss) Provision (benefit) for income taxes (6) Net income attributable to T. Rowe Price Group Diluted earnings per share (7) U.S.
GAAP rate will also be impacted by changes in the proportion of net income that is attributable to our redeemable non-controlling interests and non-controlling interests reflected in permanent equity as well as the remeasurement of the contingent consideration liability.
GAAP effective tax rate will also be impacted by changes in the proportion of net income that is attributable to our redeemable non-controlling interests and non-controlling interests reflected in permanent equity as well as the remeasurement of the contingent consideration liability.
Results Overview - 2022 as compared to 2021 Investment advisory revenues. Investment advisory fees are earned based on the value and composition of our assets under management, which change based on fluctuations in financial markets and net cash flows.
Results Overview - 2023 as compared to 2022 Investment advisory revenues. Investment advisory fees are earned based on the value and composition of our assets under management, which change based on fluctuations in financial markets and net cash flows.
Rowe Price Group Diluted earnings per share (7) U.S. GAAP Basis $ 3,961.9 $ 3,710.0 $ 284.6 $ 896.1 $ 3,082.9 $ 13.12 Non-GAAP adjustments: Acquisition-related transaction costs (2) (General, admin and other) (31.9) 31.9 — 7.2 24.7 .11 Supplemental savings plan liability (3) (Compensation and related costs) (83.0) 83.0 (83.0) — — — Consolidated T.
Rowe Price Group Diluted earnings per share (7) U.S. GAAP Basis (FS line item) $ 3,961.9 $ 3,710.0 $ 284.6 $ 896.1 $ 3,082.9 $ 13.12 Non-GAAP adjustments: Acquisition-related transaction costs (2) (General, admin and other) (31.9) 31.9 — 7.2 24.7 0.11 Supplemental savings plan liability (3) (Compensation and related costs) (83.0) 83.0 (83.0) — — — Consolidated T.
From a geography perspective, the Americas and EMEA regions experienced net outflows predominantly in equity in both regions, while APAC had positive net flows. Net cash flows for 2021 reflect net outflows from domestic equity as well as domestic fixed income.
From a geographical perspective, the Americas and EMEA regions experienced net outflows predominantly in equity in both regions, while APAC had positive net flows. Net cash flows for 2021 reflect net outflows from domestic equity as well as domestic fixed income.
Rowe Price Group Consolidated sponsored investment products Elims As reported Cash flows from operating activities Net income $ 3,082.9 $ 62.5 $ (46.9) $ 3,098.5 Adjustments to reconcile net income to net cash provided by operating activities Depreciation, amortization and impairments of property, equipment and software 204.8 — — 204.8 Stock-based compensation expense 274.6 — — 274.6 Net gains recognized on investments (169.4) — 46.9 (122.5) Net change in sponsored investment products used to economically hedge supplemental savings plan liability (85.7) — — (85.7) Net change in trading securities held by consolidated sponsored investment products — 14.9 — 14.9 Other changes in assets and liabilities 121.1 (51.9) (1.8) 67.4 Net cash provided by (used in) operating activities 3,428.3 25.5 (1.8) 3,452.0 Net cash provided by (used in) investing activities (1,134.9) (16.9) 53.7 (1,098.1) Net cash provided by (used in) financing activities (2,922.0) (14.9) (51.9) (2,988.8) Effect of exchange rate changes on cash and cash equivalents of consolidated sponsored investment products — 2.6 — 2.6 Net change in cash and cash equivalents during period (628.6) (3.7) — (632.3) Cash and cash equivalents at beginning of year 2,151.7 104.8 — 2,256.5 Cash and cash equivalents at end of period $ 1,523.1 $ 101.1 $ — $ 1,624.2 2020 Cash flow attributable to: (in millions) T.
Rowe Price Group Consolidated sponsored investment products Elims As reported Cash flows from operating activities Net income $ 3,082.9 $ 62.5 $ (46.9) $ 3,098.5 Adjustments to reconcile net income to net cash provided by operating activities Depreciation, amortization and impairments of property, equipment and software 204.8 — — 204.8 Stock-based compensation expense 274.6 — — 274.6 Net gains recognized on investments (169.4) — 46.9 (122.5) Net change in sponsored investment products used to economically hedge supplemental savings plan liability (85.7) — — (85.7) Net change in trading securities held by consolidated sponsored investment products — 14.9 — 14.9 Other changes in assets and liabilities 121.1 (51.9) (1.8) 67.4 Net cash provided by (used in) operating activities 3,428.3 25.5 (1.8) 3,452.0 Net cash provided by (used in) investing activities (1,134.9) (16.9) 53.7 (1,098.1) Net cash provided by (used in) financing activities (2,922.0) (14.9) (51.9) (2,988.8) Effect of exchange rate changes on cash and cash equivalents of consolidated sponsored investment products — 2.6 — 2.6 Net change in cash and cash equivalents during period (628.6) (3.7) — (632.3) Cash and cash equivalents at beginning of year 2,151.7 104.8 — 2,256.5 Cash and cash equivalents at end of period $ 1,523.1 $ 101.1 $ — $ 1,624.2 20 Page 48 Table of Contents Operating activities Operating activities attributable to T.
MATERIAL CASH COMMITMENTS. Our material cash commitments primarily include our obligations under the supplemental savings plan, our lease obligations, and other contractual amounts that will be due for the purchase of goods or services to be used in our operations. Some of these contractual amounts may be cancellable under certain conditions and may involve termination fees.
Our material cash commitments primarily include our obligations under the supplemental savings plan, our lease obligations, our headquarters build out, and other contractual amounts that will be due for the purchase of goods or services to be used in our operations. Some of these contractual amounts may be cancellable under certain conditions and may involve termination fees.
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 and promotion 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.; the pace and level of spending to support key strategic priorities, including the integration of OHA with and into our business; variations in the level of total compensation expense due to, among other things, bonuses, restricted stock units and other equity grants, other incentive awards, our supplemental savings plan, changes in our employee count and mix, and competitive factors; any goodwill, intangible asset or other asset impairment that may arise; fluctuation in foreign currency exchange rates applicable to 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; the timing of the assumption of all third party research payments, 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 fund and product recordkeeping, facilities, communications, power, and the mutual fund transfer agent and accounting systems.
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 and promotion 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.; the pace and level of spending to support key strategic priorities; variations in the level of total compensation expense due to, among other things, bonuses, restricted stock units and other equity grants, other incentive awards, our supplemental savings plan, changes in our employee count and mix, and competitive factors; any goodwill, intangible asset or other asset impairment that may arise; fluctuation in foreign currency exchange rates applicable to 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; the timing of the assumption of all third party research payments, 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 fund and product recordkeeping, facilities, communications, power, and the mutual fund transfer agent and accounting systems, as a result of extreme events, cyberattacks or otherwise.
The 2022 period includes OHA's compensation and related costs. Contributing to the increase was $131.7 million associated with an increase in base salaries and related benefits from higher average headcount and base salary increases in January and July 2022, and a total of $10.8 million in additional costs associated with non-cash stock-based compensation expense.
Contributing to the increase was $131.7 million associated with an increase in base salaries and related benefits from higher average headcount and base salary increases in January and July 2022, and a total of $10.8 million in additional costs associated with non-cash stock-based compensation expense.
(2) Net income attributable to redeemable non-controlling interests represents the portion of earnings held in the firm's consolidated investment products, which are not taxable to the firm despite being included in pre-tax income. Our effective tax rate for 2022 was 25.6%, compared with 22.4% for 2021 and 22.2% for 2020.
(2) Net income attributable to redeemable non-controlling interests represents the portion of earnings held in the firm's consolidated investment products, which are not taxable to the firm despite being included in pre-tax income. Our effective tax rate for 2023 was 26.3%, compared with 25.6% for 2022 and 22.4% for 2021.
We also have outstanding commitments to fund additional contributions to investment partnerships totaling $84.7 million. The vast majority of these additional contributions will be made to investment partnerships in which we have an existing investment. In addition to such amounts, a percentage of prior distributions may be called under certain circumstances. As part of the OHA acquisition, T.
We also have outstanding commitments to fund additional contributions to investment partnerships totaling $94.1 million. The vast majority of these additional contributions will be made to investment partnerships in which we have an existing investment. In addition to such amounts, a percentage of prior distributions may be called under certain circumstances. As part of the OHA acquisition, T.
For more detail on these arrangements, see Note 2 to our consolidated financial statements. CRITICAL ACCOUNTING POLICIES AND ESTIMATES. The preparation of financial statements often requires the selection of specific accounting methods and policies from among several acceptable alternatives.
For more detail on these arrangements, see Note 5 and Note 15 to our consolidated financial statements. CRITICAL ACCOUNTING POLICIES AND ESTIMATES. The preparation of financial statements often requires the selection of specific accounting methods and policies from among several acceptable alternatives.
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 sponsored investment products and investing in general or in particular classes of mutual funds or other investments.
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 sponsored investment products and investing in general or in particular classes of mutual funds or other investments. 20 Page 53 Table of Contents
If required, fair value would be determined using a discounted cash flow analysis where estimated future cash flows are discounted to arrive at a single present value amount. This approach includes inputs that require significant management judgment, the most relevant of which include revenue growth, discount rates, and effective tax rates.
If required, fair value would be determined using a discounted cash flow analysis where estimated future cash flows are discounted to arrive at a single present value amount. This approach includes inputs that require 20 Page 51 Table of Contents significant management judgment, the most relevant of which include revenue growth, discount rates, and effective tax rates.
We continually review and reconsider our VIE or VOE conclusions upon the occurrence of certain events, such as changes to our ownership interest, changes to an entity’s legal structure, or amendments to governing documents. 20 Page 50 Table of Contents Our VIEs are primarily sponsored investment products and our variable interest consists of our equity ownership in and investment management fees earned from these entities.
We continually review and reconsider our VIE or VOE conclusions upon the occurrence of certain events, such as changes to our ownership interest, changes to an entity’s legal structure, or amendments to governing documents. Our VIEs are primarily sponsored investment products and our variable interest consists of our equity ownership in and investment management fees earned from these entities.
Our consolidated balance sheet reflects the cash and cash equivalents, investments, other assets and liabilities of those sponsored investment products we consolidate, as well as redeemable non-controlling interests for the portion of these sponsored investment products that are held by unrelated third-party investors.
Our consolidated balance sheet reflects the assets and liabilities of those sponsored investment products we consolidate, as well as redeemable non-controlling interests for the portion of these sponsored investment products that are held by unrelated third-party investors.
We expect to fund these cash commitments from future cash flows from operations. Our obligations under the supplemental savings plan are disclosed on our consolidated balance sheet with more information included in Note 17 to the consolidated financial statements. Our lease obligations are disclosed in Note 8 to the consolidated financial statements.
We expect to fund these cash commitments from future cash flows from operations. Our obligations under the supplemental savings plan are disclosed on our consolidated balance sheet with more information included in Note 16 to the consolidated financial statements. Our lease obligations are disclosed in Note 7 to the consolidated financial statements.
These outflows also reflect the redemption of about $2.5 billion from our U.S. mutual fund investments to fund the cash portion of the OHA acquisition. These outflows were partially offset by cash inflows in our multi-asset franchise and international fixed income.
These outflows also reflect the redemption of about $2.5 billion from fixed income to fund the cash portion of our OHA acquisition. These outflows were partially offset by cash inflows in our multi-asset franchise and international fixed income.
The following table presents investment performance for the one-, three-, five-, and 10-years ended December 31, 2022.
The following table presents investment performance for the one-, three-, five-, and 10-years ended December 31, 2023.
Our effective fee rate has declined largely due to a mix shift toward lower fee asset classes and vehicles as a result of market declines and net flows, partially offset by a reduction in money market fee waivers and a higher-than-average effective fee rate earned on our alternative asset 20 Page 35 Table of Contents class.
Our effective fee rate has declined largely due to a mix shift toward lower fee asset classes and vehicles as a result of market declines and net flows, partially offset by a reduction in money market fee waivers and a higher-than-average effective fee rate earned on our alternative asset class.
The remaining change in reported cash flows from investing activities of $8.2 million is primarily related to the net cash removed from our balance sheet from consolidating and deconsolidating investment products. Net cash used in investing activities that are attributable to T.
The remaining change in reported cash flows from investing activities of $48.1 million is primarily related to the net cash removed from our balance sheet from consolidating and deconsolidating investment products. Net cash used in investing activities that are attributable to T.
As of December 31, 2022, total assets in these solutions were $410 billion, of which $403 billion are included in our reported assets under management in the tables above. We provide participant accounting and plan administration for defined contribution retirement plans that invest in the firm's U.S. mutual funds, collective investment trusts and funds managed outside of the firm's complex.
As of December 31, 2023, total assets in these solutions were $499 billion, of which $487 billion are included in our reported assets under management in the tables above. We provide participant accounting and plan administration for defined contribution retirement plans that invest in the firm's U.S. mutual funds, collective investment trusts and funds managed outside of the firm's complex.
NEWLY ISSUED BUT NOT YET ADOPTED ACCOUNTING GUIDANCE. See Note 1 - Basis of Preparation and Summary of Significant Accounting Policies within Item 8, Financial Statements for a discussion of newly issued but not yet adopted accounting guidance. FORWARD-LOOKING INFORMATION. From time to time, information or statements provided by or on behalf of T.
See Note 1 - Basis of Preparation and Summary of Significant Accounting Policies within Item 8, Financial Statements for a discussion of newly issued but not yet adopted accounting guidance. 20 Page 52 Table of Contents FORWARD-LOOKING INFORMATION. From time to time, information or statements provided by or on behalf of T.
Additionally, there are unrecognized tax benefits discussed in Note 11 to our consolidated financial statements. While most of our other material cash commitments consist of goods and services used in our operations, these commitments primarily consist of obligations related to long-term software licensing and maintenance contracts.
Additionally, there are unrecognized tax benefits discussed in Note 10 to our consolidated financial statements. While most of our other material cash commitments consist of goods and services used in our operations, these commitments primarily consist of obligations related to long-term software licensing and maintenance contracts, construction in process, and service contracts.
Non-operating investment income will also fluctuate primarily due to the size of our investments, changes in their market 20 Page 53 Table of Contents valuations, and any other-than-temporary impairments that may arise or, in the case of our equity method investments, our proportionate share of the investees’ net income.
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 investees’ net income.
Furthermore, our effective tax rate was unfavorably impacted by a valuation allowance recorded to recognize only the portion of a UK-based deferred tax asset that is more likely than not to be realized.
Furthermore, our effective tax rate was unfavorably impacted by a valuation allowance recorded to recognize only the portion of UK-based deferred tax assets that are more likely than not to be realized.
The average annualized fee rate earned on our assets under management was 42.3 basis points for the fourth quarter of 2022. Operating expenses. Operating expenses were $4,114.7 million in 2022, an increase of 3.9% over the comparable 2021 period.
The average annualized fee rate earned on our assets under management was 42.3 basis points for the fourth quarter of 2022. 20 Page 35 Table of Contents Operating expenses. Operating expenses were $4,114.7 million in 2022, an increase of 3.9% over the comparable 2021 period.
We assess the discretionary products and, when we decide to liquidate our interest, we seek to do so in a way as to not impact the product and, ultimately, the unrelated third-party investors. Uses of Liquidity We paid $4.80 per share in regular dividends in 2022, an increase of 11.1% over the $4.32 per share paid in 2021.
We assess the discretionary products and, when we decide to liquidate our interest, we seek to do so in a way as to not impact the product and, ultimately, the unrelated third-party investors. Uses of Liquidity We paid $4.88 per share in regular dividends in 2023, an increase of 1.7% over the $4.80 per share paid in 2022.
Additionally, in 2022, we had net investments of $18.8 million from certain investment products that economically hedge our supplemental savings plan liability, compared to net investments of $85.7 million in 2021. The remaining change in reported cash flows from operating activities was attributable to the net change in trading securities held in our consolidated investment products’ underlying portfolios.
Additionally, in 2023, we had net investments of $10.3 million from certain investment products that economically hedge our supplemental savings plan liability, compared to net investments of $18.8 million in 2022. The remaining change in reported cash flows from operating activities was attributable to the net change in trading securities held in our consolidated investment products’ underlying portfolios.
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 of common stock; changes in the amount and composition of our assets under management; our expense levels; our tax rate; the timing and expense related to the integration of OHA with and into our business; legal or regulatory developments; geopolitical instability; interest rates and currency fluctuations; and our expectations regarding financial markets, future transactions, dividends, stock repurchases, investments, new products and services, capital expenditures, changes in our effective fee rate, the impact of the coronavirus pandemic, and other industry or market conditions.
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 of common stock; changes in the amount and composition of our assets under management; our expense levels; our tax rate; legal or regulatory developments; geopolitical instability; interest rates and currency fluctuations; and our expectations regarding financial markets, future transactions, dividends, stock repurchases, investments, new products and services, capital expenditures, changes in our effective fee rate, and other industry or market conditions.
Rowe Price mutual funds and other managed investment products as compared with competing offerings and market indexes; the ability to maintain our investment management and administrative fees at appropriate levels; the impact of changes in interest rates and inflation; competitive conditions in the mutual fund, asset management, and broader financial services sectors; our level of success in implementing our strategy to expand our business, including our establishment of T.
Rowe Price mutual funds and other managed investment products as compared with competing offerings and market indexes; the ability to maintain our investment management and administrative fees at appropriate levels; the impact of changes in interest rates and inflation; competitive conditions in the mutual fund, asset management, and broader financial services sectors; our level of success in implementing our strategy to expand our business; and our ability to attract and retain key personnel.
By comparison, 32.5% of Morningstar's fund population is given a rate of 4 or 5 stars (6) . In addition, 65.9% (6) of AUM in our rated U.S. mutual funds (across primary share classes) ended 2022 with an overall rating of 4 or 5 stars. (1) The investment performance reflects that of T.
By comparison, 32.5% of Morningstar's fund population is given a rate of 4 or 5 stars (6) . In addition, 64.0% (6) of AUM in our rated U.S. mutual funds (across primary share classes) ended 2023 with an overall rating of 4 or 5 stars. (1) The investment performance reflects that of T.
Total Fund AUM included for this analysis includes $298B for 1 year, $297B for 3 years, $297B for 5 years, and $293B for 10 years. (4) Passive Peer Median was created by T. Rowe Price using data from Morningstar. Primary share class only.
Total Fund AUM included for this analysis includes $323B for 1 year, $323B for 3 years, $323B for 5 years, and $320B for 10 years. (4) Passive Peer Median was created by T. Rowe Price using data from Morningstar. Primary share class only.
Distribution and servicing costs were $301.5 million for 2022, a decrease of $72.4 million, or 19.4%, compared to 2021. The decrease was primarily driven by lower average assets under management in certain share classes of the U.S. mutual funds that earn 12(b)-1 fees.
For 2022, distribution and services costs were $301.5 million, a decrease of $72.4 million, or 19.4%, compared to $373.9 million for 2021. The decrease was primarily driven by lower average assets under management in certain share classes of the U.S. mutual funds that earn 12b-1 fees.
Should conditions that led us to recognize these impairment charges deteriorate, additional impairments may be recognized in future periods. 20 Page 40 Table of Contents Non-operating income (loss) Non-operating investment income decreased $710.1 million to a non-operating loss of $425.5 million in 2022 compared to a non-operating gain of $284.6 million in 2021.
Should conditions that led us to recognize these impairment charges deteriorate, additional impairments may be recognized in future periods. 20 Page 40 Table of Contents Non-operating income (loss) Non-operating investment income was $504.1 million in 2023 compared to a non-operating loss of $425.5 million in 2022 and non-operating income of $284.6 million in 2021.
Rowe Price investment products (4) (6.3) 8.2 203.5 27.8 75.6 .33 Other non-operating income (5) — — 58.2 15.5 42.7 .19 Adjusted Non-GAAP Basis $ 4,087.8 $ 2,500.5 $ (24.4) $ 611.3 $ 1,864.8 $ 8.02 20 Page 43 Table of Contents 2021 (in millions) Operating expenses Net operating income Non-operating income Provision (benefit) for income taxes (6) Net income attributable to T.
Rowe Price investment products (4) (6.3) 8.3 203.5 27.8 75.7 0.33 Other non-operating income (5) — — 58.2 15.5 42.7 0.19 Adjusted Non-GAAP Basis $ 4,087.8 $ 2,500.6 $ (24.4) $ 611.3 $ 1,864.9 $ 8.02 2021 (in millions) Operating expenses Net operating income Non-operating income Provision (benefit) for income taxes (6) Net income attributable to T.
Total AUM included for this analysis includes $282B for 1 year, $252B for 3 years, $249B for 5 years, and $236B for 10 years. (5) Composite net returns are calculated using the highest applicable separate account fee schedule. Excludes money market composites. All composites compared to official GIPS composite primary benchmark. The top chart reflects the percentage of T.
Total AUM included for this analysis includes $307B for 1 year, $272B for 3 years, $271B for 5 years, and $263B for 10 years. (5) Composite net returns are calculated using the highest applicable separate account fee schedule. Excludes money market composites. All composites compared to official GIPS composite primary benchmark. The top chart reflects the percentage of T.
VIEs are entities that lack sufficient equity to finance its activities or the equity holders do not have defined power to direct the activities of the entity normally associated with an equity investment.
VIEs are entities that lack sufficient equity 20 Page 50 Table of Contents to finance its activities or the equity holders do not have defined power to direct the activities of the entity normally associated with an equity investment.
As of December 31, 2022, our assets under administration were $214 billion, of which nearly $133 billion were assets we manage. INVESTMENT PERFORMANCE (1) . Strong investment performance and brand awareness is a key driver to attracting and retaining assets—and to our long-term success.
As of December 31, 2023, our assets under administration were $245 billion, of which nearly $146 billion were assets we manage. INVESTMENT PERFORMANCE (1) . Strong investment performance and brand awareness is a key driver to attracting and retaining assets—and to our long-term success.
Rowe Price has committed $500 million to fund OHA products through 2026. As of December 31, 2022, T. Rowe Price has $464.1 million remaining to commit to the OHA products. T. Rowe Price has also entered into certain earnout and other arrangements as part of that acquisition.
Rowe Price committed $500 million to fund OHA products through 2026. As of December 31, 2023, T. Rowe Price has $404.0 million remaining to commit to the OHA products. T. Rowe Price has also entered into certain earnout and other arrangements as part of that acquisition.
(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) Reported net of distributions not reinvested.
(2) The alternatives asset class includes strategies authorized to invest more than 50% of its holdings in private credit, leveraged loans, mezzanine, real assets/CRE, structured products, stressed/distressed, non-investment grade CLOs, special situations, business development companies, or that have absolute return as its investment objective. Generally, only those strategies with longer than daily liquidity are included.
Both of these costs are offset entirely by the revenue we earn and report in net revenues: 12B-1 revenue recognized in administrative, distribution, and servicing fees for the U.S. mutual funds and investment advisory fee revenue for our international products. Advertising and promotion.
Both of these costs are offset entirely by the revenue we earn and report in net revenues: 20 Page 39 Table of Contents 12b-1 revenue recognized in administrative, distribution, and servicing fees for the U.S. mutual funds and investment advisory fee revenue for our international products.
Rowe Price investment products $ (108.3) $ 15.6 $ 84.7 $ (123.9) $ (69.1) Net income attributable to redeemable non-controlling interests (unrelated third-party investors) (103.4) 46.9 150.6 (150.3) (103.7) Impact on income before taxes $ (211.7) $ 62.5 $ 235.3 $ (274.2) $ (172.8) Provision for income taxes The following table reconciles the statutory federal income tax rate to our effective tax rate for the years ended December 31, 2022, 2021, and 2020: 2022 2021 2020 Statutory U.S. federal income tax rate 21.0 % 21.0 % 21.0 % State income taxes for current year, net of federal income tax benefits (1) 3.4 3.7 3.8 Net income attributable to redeemable non-controlling interests (2) 1.3 (.1) (1.2) Net excess tax benefits from stock-based compensation plans activity (.4) (2.1) (1.9) Other items .3 (.1) .5 Effective income tax rate 25.6 % 22.4 % 22.2 % (1) State income tax benefits are reflected in the total benefits for net income attributable to redeemable non-controlling interests and stock-based compensation plans activity.
Rowe Price investment products $ 106.5 $ (103.4) $ 46.9 $ 209.9 $ (150.3) Net income attributable to redeemable non-controlling interests (unrelated third-party investors) 47.0 (108.3) 15.6 155.3 (123.9) Impact on income before taxes $ 153.5 $ (211.7) $ 62.5 $ 365.2 $ (274.2) Provision for income taxes The following table reconciles the statutory federal income tax rate to our effective tax rate for the years ended December 31, 2023, 2022, and 2021: 2023 2022 2021 Statutory U.S. federal income tax rate 21.0 % 21.0 % 21.0 % State income taxes for current year, net of federal income tax benefits (1) 2.3 3.4 3.7 Net income attributable to redeemable non-controlling interests (2) (0.5) 1.3 (0.1) Net excess tax benefits from stock-based compensation plans activity 0.1 (0.4) (2.1) Valuation allowance 3.4 — — Other items — 0.3 (0.1) Effective income tax rate 26.3 % 25.6 % 22.4 % (1) State income tax benefits are reflected in the total benefits for net income attributable to redeemable non-controlling interests and stock-based compensation plans activity.
Our contingent consideration consists of an earnout arrangement as part of our acquisition of OHA in December 2021 in which additional purchase price may be due to OHA upon satisfying or exceeding certain defined revenue targets. Every reporting period, we record the potential amount due under this arrangement at fair value.
Change in fair value of contingent consideration. Our contingent consideration consists of an earnout arrangement as part of the 2021 acquisition of OHA in which additional purchase price may be due to the sellers upon satisfying or exceeding certain defined revenue targets. Each reporting period, we record the fair value of the contingent consideration due under this arrangement.
Total AUM included for this analysis includes $1,117B for 1 year, $1,112B for 3 years, $1,108B for 5 years, and $1,070B for 10 years. (6) The Morningstar Rating™ for funds is calculated for funds with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes.
Total AUM included for this analysis includes $1,280B for 1 year, $1,264B for 3 years, $1,255B for 5 years, and $1,222B for 10 years. (6) The Morningstar Rating™ for funds is calculated for funds with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes.
The remaining change in reported cash flows from operating activities was attributable to the net change in trading securities held in our consolidated investment products’ underlying portfolios. Investing activities Net cash used in investing activities that are attributable to T. Rowe Price Group totaled $179.3 million in 2022 compared with $1,134.9 million of cash used in investing activities in 2021.
The remaining change in reported cash flows from operating activities was attributable to the net change in trading securities held in our consolidated investment products’ underlying portfolios. Investing activities Net cash used in investing activities that are attributable to T. Rowe Price Group totaled $310.2 million in 2023 compared with $179.3 million in 2022.
Tangible book value decreased to $5.8 billion at December 31, 2022. Sources of Liquidity We have ample liquidity, including cash and investments in T.
Tangible book value increased to $6.5 billion at December 31, 2023 from $5.8 billion at December 31, 2022. Sources of Liquidity We have ample liquidity, including cash and investments in T.
The remaining change in reported cash flows from investing activities of $37.0 million is primarily related to the net cash removed from our balance sheet from consolidating and deconsolidating investment products. Financing Activities Net cash used in financing activities attributable to T. Rowe Price Group totaled $2,028.5 million in 2022 compared with $2,922.0 million in 2021.
The remaining change in reported cash flows from investing activities of $8.2 million is primarily related to the net cash removed from our balance sheet from consolidating and deconsolidating investment products. Financing Activities Net cash used in financing activities attributable to T. Rowe Price Group totaled $1,437.4 million in 2023 compared with $2,028.5 million in 2022.
Operating activities attributable to T. Rowe Price Group during 2021 provided cash flows of $3,428.3 million as compared to $2,479.0 million during 2020. Operating cash flows attributable to T.
Operating activities attributable to T. Rowe Price Group during 2022 provided cash flows of $2,440.3 million as compared to $3,428.3 million during 2021. Operating cash flows attributable to T.
As a result, our results of operations for 2021 and 2020 do not include any financial results of OHA. 20 Page 34 Table of Contents 2022 compared with 2021 2021 compared with 2020 (in millions, except per-share data) 2022 2021 2020 $ Change % Change $ Change % Change U.S.
As a result, our results of operations for 2021 does not include any financial results of OHA. 20 Page 33 Table of Contents 2023 compared with 2022 2022 compared with 2021 (in millions, except per-share data) 2023 2022 2021 $ Change % Change (1) $ Change % Change (1) U.S.
Management believes the consolidated sponsored investment products may impact the reader’s ability to understand our core operating results.
We believe the consolidated sponsored investment products may impact the reader’s ability to understand our core operating results.
Rowe Price Group $ 1,864.8 $ 2,995.3 $ 2,276.8 Less: net income allocated to outstanding restricted stock and stock unit holders 43.3 77.9 62.4 Adjusted net income allocated to common stockholders $ 1,821.5 $ 2,917.4 $ 2,214.4 CAPITAL RESOURCES AND LIQUIDITY. During 2022, stockholders’ equity attributable to T. Rowe Price Group, Inc. decreased from $9.0 billion to $8.8 billion.
Rowe Price Group $ 1,750.1 $ 1,864.8 $ 2,995.3 Less: net income allocated to outstanding restricted stock and stock unit holders 43.4 43.3 77.9 Adjusted net income allocated to common stockholders $ 1,706.7 $ 1,821.5 $ 2,917.4 CAPITAL RESOURCES AND LIQUIDITY. During 2023, stockholders’ equity attributable to T. Rowe Price Group, Inc. increased from $8.8 billion to $9.5 billion.
Such changes result from many factors, including, among other things: cash inflows and outflows in the U.S. mutual funds, subadvised funds, separately managed accounts, collective investment trusts, and other investment products, performance fees, capital allocation-based income, 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 products, changes in retirement savings trends relative to participant-directed investments and defined contribution plans, and the impact of the coronavirus pandemic.
Such changes result from many factors, including, among other things: client-related cash inflows and outflows in our products, performance fees, capital allocation-based income, fluctuations in global financial markets that result in appreciation or depreciation of the assets under our management, our introduction of new investment products, and changes in retirement savings trends relative to participant-directed investments and defined contribution plans.
The non-cash adjustments were primarily driven by $314.0 million in net investment losses in 2022 compared to $169.4 million of net investment gains in 2021 as well as $420.1 million in amortization and impairments of acquisition-related assets and retention agreements incurred in 2022.
These non-cash adjustments were primarily driven by $567.3 million in net investment gains in 2023 compared to $314.0 million of net investment losses in 2022 as well as $226.8 million in amortization and impairments of acquisition-related assets and retention agreements incurred in 2023 compared to $420.1 million incurred in 2022.
Additionally, management does not emphasize the impact of the portion of non-operating income (loss) removed when managing and evaluating our performance. (6) The income tax impacts were calculated in order to achieve an overall non-GAAP effective tax rate of 24.7% for 2022, 22.5% for 2021 and 23.3% for 2020.
Additionally, we do not emphasize the impact of this portion of non-operating income (loss) when managing and evaluating our performance. (6) The income tax impacts were calculated in order to achieve an overall non-GAAP effective tax rate of 27.2% for 2023, 24.7% for 2022 and 22.5% for 2021.
(2) Includes $190.7 million of non-controlling interests in consolidated entities and represents the portion of these investments, held by third parties, that we cannot sell in order to obtain cash for general operations.
Financial Statements of this Form 10-K. (2) Includes $192.0 million of non-controlling interests in consolidated entities and represents the portion of these investments, held by third parties, that we cannot sell in order to obtain cash for general operations.
Management believes adjusting for these charges helps the reader's ability to understand our core operating results and to increase comparability period to period. (2) This non-GAAP adjustment removes the transaction costs incurred related to the acquisition of OHA.
We believe adjusting for these charges helps the reader's ability to understand our core operating results and to increase comparability period to period. (2) This non-GAAP adjustment removes acquisition-related transactions costs. We believe adjusting for these charges helps the reader's ability to understand our core operating results and to increase comparability period to period.
Rowe Price Group, Inc. common shares, approximately 4.4 million shares, to complete the acquisition of OHA. 20 Page 46 Table of Contents Since the end of 2019, we have returned $6.8 billion to stockholders through stock repurchases, our regular quarterly dividends, and a special dividend of $3.00 per share in 2021, as follows: (in millions) Recurring dividend Special dividend Stock repurchases Total cash returned to stockholders 2020 $ 846.0 $ — $ 1,192.2 $ 2,038.2 2021 1,003.7 699.8 1,136.0 2,839.5 2022 1,108.8 — 855.3 1,964.1 Total $ 2,958.5 $ 699.8 $ 3,183.5 $ 6,841.8 We anticipate property and equipment expenditures for the full-year 2023 to be about $350 million, of which more than two-thirds is planned for technology initiatives.
Rowe Price Group, Inc. common shares, approximately 4.4 million shares, to complete the acquisition of OHA. 20 Page 46 Table of Contents Since the end of 2020, we have returned $6.2 billion to stockholders through stock repurchases, our regular quarterly dividends, and a special dividend of $3.00 per share in 2021, as follows: (in millions) Recurring dividend Special dividend Stock repurchases Total cash returned to stockholders 2021 $ 1,003.7 $ 699.8 $ 1,136.0 $ 2,839.5 2022 1,108.8 — 855.3 1,964.1 2023 1,121.9 — 254.3 1,376.2 Total $ 3,234.4 $ 699.8 $ 2,245.6 $ 6,179.8 We anticipate property and equipment expenditures for the full-year 2024 to be about $487 million.
Lower 12b-1 revenue earned in 2022 primarily on the Advisor and R share classes of the U.S. mutual funds as a result of lower assets under management in these share classes was offset by higher trustee services revenue and transfer agent servicing activities provided to our U.S. mutual funds for retail shareholders.
For 2022, lower 12b-1 revenue earned in 2022 primarily on the Advisor and R share classes of the U.S. mutual funds as a result of lower assets under management in these share classes was offset by higher trustee services revenue and transfer agent servicing activities provided to our U.S. mutual funds for retail shareholders. 20 Page 37 Table of Contents Capital allocation-based income increased net revenues by $161.9 million.
Changes in these inputs could produce different fair value amounts and therefore different impairment conclusions. During 2022, our annual impairment review of our indefinite-lived intangible assets determined that both our indefinite-lived investment management agreements intangible asset and trade name were impaired at the review date.
Changes in these inputs could produce different fair value amounts and therefore different impairment conclusions. During 2023, our annual impairment review of our indefinite-lived intangible assets determined that they were not impaired at the review date.
Rowe Price products as follows: (in millions) 12/31/2022 12/31/2021 Cash and cash equivalents $ 1,755.6 $ 1,523.1 Discretionary investments 449.7 554.1 Total cash and discretionary investments 2,205.3 2,077.2 Redeemable seed capital investments 1,120.3 1,300.1 Investments used to hedge the supplemental savings plan liability 760.7 881.5 Total cash and investments in T.
Rowe Price products as follows: (in millions) 12/31/2023 12/31/2022 Cash and cash equivalents $ 2,066.6 $ 1,755.6 Discretionary investments 463.7 449.7 Total cash and discretionary investments 2,530.3 2,205.3 Redeemable seed capital investments 1,370.9 1,120.3 Investments used to hedge the supplemental savings plan liability 894.6 760.7 Total cash and investments in T.
Past performance is no guarantee of future results. % of U.S. mutual funds that outperformed Morningstar median (2),(3) 1 year 3 years 5 years 10 years Equity 53% 52% 62% 73% Fixed Income 53% 63% 65% 66% Multi-Asset 20% 81% 80% 90% All Funds 41% 64% 68% 74% % of U.S. mutual funds that outperformed passive peer median (2),(4) 1 year 3 years 5 years 10 years Equity 47% 45% 53% 69% Fixed Income 47% 53% 55% 48% Multi-Asset 27% 87% 76% 80% All Funds 39% 60% 60% 64% % of composites that outperformed benchmarks (5) 1 year 3 years 5 years 10 years Equity 36% 53% 58% 67% Fixed Income 26% 48% 50% 76% All Composites 32% 51% 54% 71% 20 Page 33 Table of Contents AUM Weighted Performance % of U.S. mutual funds AUM that outperformed Morningstar median (2),(3) 1 year 3 years 5 years 10 years Equity 52% 50% 57% 69% Fixed Income 63% 75% 77% 81% Multi-Asset 3% 92% 94% 98% All Funds 39% 64% 69% 78% % of U.S. mutual funds AUM that outperformed passive peer median (2),(4) 1 year 3 years 5 years 10 years Equity 51% 41% 49% 61% Fixed Income 52% 62% 58% 55% Multi-Asset 5% 96% 96% 96% All Funds 38% 60% 64% 70% % of composites AUM that outperformed benchmarks (5) 1 year 3 years 5 years 10 years Equity 37% 43% 47% 54% Fixed Income 17% 37% 39% 74% All Composites 33% 42% 46% 57% As of December 31, 2022, 72 of 125 (57.6%) of our rated U.S. mutual funds (across primary share classes) received an overall rating of 4 or 5 stars.
Past performance is no guarantee of future results. % of U.S. mutual funds that outperformed Morningstar median (2),(3) 1 year 3 years 5 years 10 years Equity 53% 50% 53% 71% Fixed Income 63% 58% 50% 62% Multi-Asset 76% 47% 67% 81% All Funds 64% 52% 56% 71% % of U.S. mutual funds that outperformed passive peer median (2),(4) 1 year 3 years 5 years 10 years Equity 58% 45% 51% 51% Fixed Income 59% 53% 58% 57% Multi-Asset 73% 45% 61% 54% All Funds 64% 48% 56% 53% % of composites that outperformed benchmarks (5) 1 year 3 years 5 years 10 years Equity 50% 30% 51% 62% Fixed Income 55% 35% 48% 73% All Composites 52% 32% 50% 66% 20 Page 32 Table of Contents AUM Weighted Performance % of U.S. mutual funds AUM that outperformed Morningstar median (2),(3) 1 year 3 years 5 years 10 years Equity 66% 46% 42% 83% Fixed Income 68% 69% 66% 76% Multi-Asset 94% 72% 91% 96% All Funds 74% 55% 57% 86% % of U.S. mutual funds AUM that outperformed passive peer median (2),(4) 1 year 3 years 5 years 10 years Equity 69% 34% 31% 51% Fixed Income 60% 68% 68% 63% Multi-Asset 94% 63% 95% 95% All Funds 75% 45% 52% 64% % of composites AUM that outperformed benchmarks (5) 1 year 3 years 5 years 10 years Equity 56% 33% 44% 51% Fixed Income 56% 31% 44% 52% All Composites 56% 33% 44% 51% As of December 31, 2023, 46 of 86 (53.5%) of our rated U.S. mutual funds (across primary share classes) received an overall rating of 4 or 5 stars.
Management believes it is useful to offset the non-operating investment income (loss) realized on the economic hedges against the related compensation expense and remove the net impact to help the reader's ability to understand our core operating results and to increase comparability period to period.
We believe it is useful to offset the non-operating investment income (loss) recognized on the 20 Page 44 Table of Contents economic hedges against the related compensation expense and remove the net impact to help the reader's ability to understand our core operating results and to increase comparability period to period.
We also provide certain 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; trust services; and non-discretionary advisory services through model delivery.
We also provide certain 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; trust services; and non-discretionary advisory services through model delivery. Investment advisory revenues depend largely on the total value and composition of assets under our management.
Further, we expended $855.3 million in 2022 to repurchase 6.8 million shares, or 2.9%, of our outstanding common stock at an average price of $126.69 per share. These dividends and repurchases were expended using existing cash balances and cash generated from operations.
Further, we expended $253.9 million in 2023 to repurchase 2.4 million shares, or 1.1%, of our outstanding common stock at an average price of $104.63 per share. These dividends and repurchases were expended using existing cash balances and cash generated from operations.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

8 edited+2 added−2 removed5 unchanged
Biggest changeIn considering this presentation, it is important to note that: not all products experienced their lowest net asset value per share on the same day; it is likely that the composition of the investment portfolio would be changed if adverse market conditions persisted; and we could experience future losses in excess of those presented below. 20 Page 54 Table of Contents (in millions) Fair value 12/31/2022 Potential lower value Potential loss Investments in sponsored products Discretionary investments $ 242.0 $ 217.8 $ 24.2 10 % Seed capital not consolidated 195.1 175.1 20.0 10 % Investments designated as an economic hedge of supplemental savings plan liability 760.7 682.1 78.6 10 % Investments in affiliated collateralized loan obligations 6.4 5.8 .6 9 % Total $ 1,197.8 $ 1,075.0 $ 122.8 10 % Direct investment in consolidated sponsored investment products Discretionary investments $ 8.1 $ 7.3 $ .8 10 % Seed capital 849.5 761.4 88.1 10 % Total $ 857.6 $ 768.7 $ 88.9 10 % Investment partnerships and other investments held at fair value $ 87.1 $ 75.9 $ 11.2 13 % Any losses arising from the change in fair value of investments in T.
Biggest change(in millions) Fair value 12/31/2023 Potential lower value Potential loss Investments in sponsored products Discretionary investments $ 246.4 $ 221.8 $ 24.6 10 % Seed capital not consolidated 247.8 219.3 28.5 12 % Investments designated as an economic hedge of supplemental savings plan liability 806.6 692.6 114.0 14 % Investments in affiliated collateralized loan obligations 8.4 7.6 0.8 10 % Total $ 1,309.2 $ 1,141.3 $ 167.9 13 % Direct investment in consolidated sponsored investment products Discretionary investments $ 212.0 $ 190.8 $ 21.2 10 % Seed capital 1,032.0 904.6 127.4 12 % Investments designated as an economic hedge of supplemental savings plan liability 67.0 $ 60.3 $ 6.7 10 % Total $ 1,311.0 $ 1,155.7 $ 155.3 12 % Investment partnerships and other investments held at fair value $ 69.7 $ 64.9 $ 4.8 7 % Any losses arising from the change in fair value of investments in T.
Investments in these products generally moderate market risk as they are diversified and invest in a number of different financial instruments. T. Rowe Price manages its cash and discretionary investments exposure to market risk by diversifying its investments among equity and fixed income portfolios.
Investments in these products generally moderate market risk as they are diversified and invest in a number of different financial instruments. T. Rowe Price manages its cash and discretionary investments exposure to market risk by diversifying its investments among various fixed income portfolios.
The potential future loss of value, before any income tax benefits, of these investments at December 31, 2022 was determined by using the lower of each product’s lowest net asset value per share during 2022 or its net asset value per share at December 31, 2022, reduced by 10%.
The potential future loss of value, before any income tax benefits, of these investments at December 31, 2023 was determined by using the lower of each product’s lowest net asset value per share during 2023 or its net asset value per share at December 31, 2023, reduced by 10%.
We do not use derivative financial instruments to manage this currency risk, so both positive and negative fluctuations in the INR against the USD will affect accumulated other comprehensive income and the carrying amount of our investment. We had a cumulative translation loss, net of tax, of $50.5 million at December 31, 2022, related to our investment in UTI.
UTI's financial statements are denominated in Indian rupees ("INR") and are translated to USD each reporting period. We do not use derivative financial instruments to manage this currency risk, so both positive and negative fluctuations in the INR against the USD will affect accumulated other comprehensive income and the carrying amount of our investment.
Any losses arising from the change in fair value of our direct investments in consolidated sponsored investment products would also result in a corresponding decrease, net of tax, in our net income attributable to T. Rowe Price Group. Further, we have investments that are used to economically hedge the change in our supplementary savings plan liability.
Further, we have investments that are used to economically hedge the change in our supplementary savings plan liability. Since we are hedging the liability, the impact on our net income attributable to T. Rowe Price Group would result from any ineffectiveness of this economic hedge. 20 Page 54 Table of Contents CURRENCY TRANSLATION RISK.
Given the nature of UTI’s business, should conditions deteriorate in markets in which they operate, we are at risk for loss up to our carrying amount. We operate in several countries outside the U.S. of which the United Kingdom is the most prominent.
We had a cumulative translation loss, net of tax, of $51.9 million at December 31, 2023, related to our investment in UTI. Given the nature of UTI’s business, should conditions deteriorate in markets in which they operate, we are at risk for loss up to our carrying amount.
We incur operating expenses and have assets and liabilities denominated in currencies other than USD associated with these operations, although our revenues are predominately realized in USD. The majority of our currency translation risk on our consolidated balance sheet at December 31, 2022, related to cash and non-consolidated investments of $209.6 million that are denominated in foreign currencies.
The majority of our currency translation risk on our consolidated balance sheet at December 31, 2023, related to cash and non-consolidated investments of $226.0 million that are denominated in foreign currencies. We do not believe that foreign currency fluctuations materially affect our results of operations. 20 Page 55 Table of Contents
Since we are hedging the liability, an impact on our net income attributable to T. Rowe Price Group would result from any ineffectiveness of this economic hedge. CURRENCY TRANSLATION RISK. Certain of our investments, including a few consolidated sponsored investment products, expose us to currency translation risk when the financial statements are translated into U.S. dollars ("USD").
Certain of our investments, including a few consolidated sponsored investment products, expose us to currency translation risk when the financial statements are translated into U.S. dollars ("USD"). Our most significant exposure relates to the translation of the financial statements of our equity method investment in UTI ($164.5 million at December 31, 2023).
Removed
Our most significant exposure relates to the translation of the financial statements of our equity method investment in UTI ($158.8 million at December 31, 2022). UTI's financial statements are denominated in Indian rupees ("INR") and are translated to USD each reporting period.
Added
In considering this presentation, it is important to note that: not all products experienced their lowest net asset value per share on the same day; it is likely that the composition of the investment portfolio would be changed if adverse market conditions persisted; and we could experience future losses in excess of those presented below.
Removed
We do not believe that foreign currency fluctuations materially affect our results of operations. 20 Page 55 Table of Contents
Added
We operate in several countries outside the U.S. of which the United Kingdom is the most prominent. We incur operating expenses and have assets and liabilities denominated in currencies other than USD associated with these operations, although our revenues are predominately realized in USD.

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