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What changed in T. Rowe Price's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of T. Rowe Price's 2023 and 2024 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 2024 report.

+447 added−423 removedSource: 10-K (2025-02-14) vs 10-K (2024-02-16)

Top changes in T. Rowe Price's 2024 10-K

447 paragraphs added · 423 removed · 335 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

57 edited+12 added−9 removed24 unchanged
Biggest changeEquity 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.
Biggest changeEquity 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, High Yield Inflation Protection, Treasury Securitized Credit, CLO, GNMA Investment Grade, Corporate Income Bond Global / International: N/O N/O Euro High Yield, High Income, Global High Yield Global Government Bond N/O Euro Investment Grade Corporate, Global Investment Grade Corporate Multi-Sector Dynamic Suite Emerging Markets Municipal (Tax-Free) Impact U.S.: QM Bond, Core Bond, Core Plus, Investment Grade Core, Total Return N/O N/O High Yield, Intermediate Muni, Intermediate, Long-Term, 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 Bond, Corporate, Corporate High Yield, Investment Grade, Local Currency, 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 Alternatives U.S. / Global / International: Private Credit Leveraged Loans Mezzanine Real Assets / CRE Structured Products Stressed / Distressed CLOs - Non-Investment Grade Special Situations MA Alternatives Page 5 Table of Contents Our research staff conducts fundamental and quantitative security analysis primarily from offices located in the U.S. and U.K. with additional staff based in Australia, China, Hong Kong, Japan, and Singapore.
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.
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 investment products to begin building an investment performance history in advance of the portfolio receiving sustainable client assets.
Additionally, fees rates are typically higher for commingled vehicles including U.S. mutual funds, private investment funds and collective investment trusts as compared to separately managed accounts and subadvised funds. Investment management agreements typically provide the ability for termination upon relatively short notice with little or no penalty.
Additionally, fees rates are typically higher for commingled vehicles including U.S. mutual funds, private investment funds and collective investment trusts compared to separately managed accounts and subadvised funds. Investment management agreements typically provide the ability for termination upon relatively short notice with little or no penalty.
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.
The length of time we hold our seed capital investment will vary for each 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.
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.
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 compared to multi-asset and fixed income products.
AVAILABLE INFORMATION. We intend to use our website, troweprice.com, as means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. These disclosures will be included in the Investor Relations section of our website, investors.troweprice.com.
We intend to use our website, troweprice.com, as means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. These disclosures will be included in the Investor Relations section of our website, investors.troweprice.com.
(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.
(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 ADVISORY FEES.
We may also close or limit new investments to new investors across sponsored investment products in order to maintain the integrity of the investment strategy and to protect the interests of its existing shareholders and investors.
We may also close or limit investments to new investors across investment products in order to maintain the integrity of the investment strategy and to protect the interests of its existing shareholders and investors.
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.
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 advisory 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.
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.
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 54 countries around the world.
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.
With more than 85 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.
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”).
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 Page 8 Table of Contents 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”).
(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.
(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.
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.
We maintain a strong corporate culture focused on delivering superior 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.
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.
The following charts show our AUM (in billions) 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 AUM of the multi-asset portfolios have been aggregated and presented in this category and not reported in the equity and fixed income rows.
We make our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) of the Exchange Act, available free of charge in this section of our website as soon as reasonably practicable after they have been filed with the SEC.
We make our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Page 11 Table of Contents Section 13(a) of the Exchange Act, available free of charge in this section of our website as soon as reasonably practicable after they have been filed with the SEC.
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.
We recognize income earned from general partner interests in certain affiliated private investment funds that are entitled to a disproportionate allocation of income, also referred to as carried interest. We record our proportionate share of the investment funds' income assuming the funds were liquidated at each reporting date pursuant to each investment fund's governing agreements.
The termination of one or more of the U.S. mutual fund agreements could have a material adverse effect on our results of operations. We also earn performance-based investment advisory fees on certain separately managed accounts and affiliated private investment funds.
The termination of one or more of the U.S. mutual fund agreements could have a material adverse effect on our results of operations. Page 7 Table of Contents We also earn performance-based investment advisory fees on certain separately managed accounts and affiliated private investment funds.
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.
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 are our greatest asset.
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.
The fees we earn for distributing and marketing these products are part of the investment advisory fees earned for managing the product assets. We recognize any related distribution fees paid to financial intermediaries in distribution and servicing costs. CAPITAL ALLOCATION-BASED INCOME.
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.
These administrative services are provided by several of our subsidiaries and include mutual fund transfer agent, fund/portfolio accounting, distribution, and shareholder services; recordkeeping services for defined contribution retirement plans investing in our sponsored vehicles and vehicles outside the 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.
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.
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.
At present, the following strategies, which represent about 7% of total assets under management at December 31, 2024, are generally closed to new investors: Strategy Year closed U.S.
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.
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., exchange traded funds, affiliated private investment funds, business development companies, and sponsored collateralized loan obligations.
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.
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.
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, .
Mutual Funds x x x x Collective Investment Trusts x x Exchange-Traded Funds x x x College Savings Plans x x Model Portfolios x x x (6) Separately Managed Accounts (SMAs) (1) 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 x Japanese ITMs (5) x x Australian Unit Trusts x x Private Funds x Collateralized Loan Obligations x Business Development Company (BDC) x x (1) Includes both model delivery and manager traded SMAs, .
Our 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).
Our 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. • Broaden our reach in the private and alternatives market by leveraging our distribution channels and expanding our investment capabilities. • Enhance our relationships with clients and renew our individual investor base by investing in our ability to provide exceptional service and unique offerings. • Strengthen our distribution technology to enhance the digital client experience and client reporting. • Attract and retain top talent and enable effective hybrid collaboration. • 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.
These performance-based fees are recognized when performance returns exceed the stated hurdle at the end of the performance period, which can lead to an uneven recognition pattern in a given year. 20 Page 7 Table of Contents We distribute certain of our sponsored products outside the U.S. through distribution agents and other financial intermediaries.
These performance-based fees are recognized and reported separately in the consolidated income statement when performance returns exceed the stated hurdle at the end of the performance period, which can lead to an uneven recognition pattern in a given year. We distribute certain of our sponsored products outside the U.S. through distribution agents and other financial intermediaries.
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.
Generally, we ensure the investment product has a sustainable level of assets from unrelated shareholders before we consider redemption of our seed capital investment in order to maintain the product's net asset value or its performance record. At December 31, 2024, we had seed capital investments in our products of $1.3 billion.
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.
Rowe Price complex; transfer agent services for defined contribution retirement plans investing in our sponsored U.S. mutual funds; 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.
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.
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. Despite these challenging trends, we believe there are significant opportunities that align to our core capabilities.
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.
As of December 31, 2024, we employed 8,158 associates, an increase of 3.2% from the 7,906 associates employed at the end of 2023. We add temporary and part-time personnel to complement our staff from time to time to meet periodic and special project demands, primarily for technology and collective investment fund administrative services.
This subsidiary is the principal underwriter and distributor for our sponsored U.S. mutual funds and exchange- 20 Page 9 Table of Contents traded funds, and may also offer and make recommendations for certain funds that are not offered to the general public such as privately placed funds.
This Page 9 Table of Contents subsidiary is the principal underwriter and distributor for our sponsored U.S. mutual funds and exchange-traded funds, and may also offer and make recommendations for certain funds that are not offered to the general public such as privately placed funds. Investors may open a brokerage account with TRPIS in order to buy and sell securities.
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.
We derive substantially all of our net revenue from investment advisory fees that are earned pursuant to agreements with our sponsored products and clients. 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.
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.
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 certain employees that have non-controlling interests in the entities that hold the general partner's investments. ADMINISTRATIVE, DISTRIBUTION, AND SERVICING FEES. Administrative Services We provide certain ancillary administrative services to our investment advisory clients.
We compete with brokerage and investment banking firms, insurance companies, banks, mutual fund companies, hedge funds, and other financial institutions and funds in all aspects of our business and in every country in which we offer our products and services. Some of these financial institutions have greater resources than we do.
We compete with brokerage and investment banking firms, insurance companies, banks, traditional and alternative asset management companies, hedge funds, and other financial institutions and funds in all aspects of our business and in every country in which we offer our products and services.
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.
The assets under management in our target date retirement products totaled $475.6 billion at December 31, 2024, or 29.6% of our managed assets at December 31, 2024, compared to 28.3% at the end of 2023.
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.
This increase in assets under management was driven by market appreciation, net of distributions not reinvested, of $205.3 billion, offset by net cash outflows of $43.2 billion. In 2024, our target date retirement products experienced net cash inflows of $16.3 billion.
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.
Page 2 Table of Contents ASSETS UNDER MANAGEMENT (AUM). Our consolidated net revenues and net income are derived largely 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).
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.
To attract and retain the highest quality talent, we invest in the associate experience and develop talent and succession plans; deliver individual and firmwide training and development 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.
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.
Our revenues depend largely on the total value and composition of our assets under management. Accordingly, fluctuations in financial markets and in the composition of assets under management impact our revenues and results of operations. At December 31, 2024, we had $1,606.6 billion in assets under management, an increase of $162.1 billion from the end of 2023.
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.
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, business development companies, an interval fund, and collateralized loan obligations.
As a member of the financial services industry, we are subject to substantial competition in all aspects of our business. A significant number of proprietary and other sponsors’ mutual funds are sold to the public by other investment management firms, broker-dealers, mutual fund companies, banks, and insurance companies.
A significant number of proprietary and other sponsors’ investment products are sold to the public by other investment management firms, broker-dealers, mutual fund companies, banks, and insurance companies.
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.
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.
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.
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. As a member of the financial services industry, we are subject to substantial competition in all aspects of our business.
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.
Our strategies are designed to meet the varied and changing needs and objectives of investors and are delivered across a range of vehicles. We also offer specialized advisory services, including management of stable value investment contracts, customized multi-asset solutions, and a distribution management service for the disposition of equity securities our clients receive from third-party venture capital investment pools.
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.
(4) Retail includes assets sourced through our direct-marketed business and financial intermediaries. Page 3 Table of Contents United States U.S. 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 Part II, Item 7.
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.
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 Institutional investors U.S.
We are committed to the professional growth of our associates through the development of their knowledge, skills and experience, by providing them access to in-person, virtual and online training programs and by offering a generous tuition reimbursement program. We believe a critical driver of our firm’s future growth is our ability to grow leaders.
We fill approximately one-third of our open positions with internal applicants, and most of our portfolio managers have been promoted from within. We facilitate the professional development of our associates by advancing their knowledge, skills, and experience; providing them access to in-person, virtual, and online training programs; and offering a generous tuition reimbursement program.
Investors domiciled outside the U.S. represented about 9% of total assets under management at the end of 2023.
Investors domiciled outside the U.S. represented about 9% of total assets under management at the end of 2024. The following table outlines the five distribution channels and products through which our assets under management are sourced as of December 31, 2024.
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.
In addition, we publish our annual sustainability report, which includes transparency into our 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. Offering Benefits to Further Our Commitment We offer employee benefit solutions, including both health care and retirement benefits, where applicable; fitness club reimbursement; life insurance; and an Employee Assistance Program to support well-being.
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.
Management’s Discussion and Analysis of Financial Condition and Results of Operations as well as our consolidated financial statements, which are included in Item 8. of this Form 10-K. 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.
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.
Net Capital Requirements Certain subsidiaries are subject to net capital requirements, including those of various federal, state, and international regulatory agencies. Each of our subsidiary's net capital, as defined, meets or exceeds all minimum requirements as of December 31, 2024.
Investing In Our People We seek to help our clients achieve their long-term investment goals. In order to do this, we are committed to helping our associates achieve their long-term career goals. We continuously seek to identify new opportunities for our associates to expand their experience and grow their skills.
Page 10 Table of Contents Investing In Our People To help our clients achieve their long-term investment goals, we help our associates achieve their long-term career goals.
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.
Pershing, a third-party clearing broker and an affiliate of BNY Mellon, maintains our brokerage’s customer accounts and clears all transactions. • T. 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.
Reflecting this, we have held a series of leadership speaker events and offer access to virtual programs focused on leadership development led by professors at leading universities. Hiring Diverse Talent Having a diverse and inclusive workforce and providing an equal opportunity to all associates is a business and cultural imperative.
Reflecting this, we offer leadership experiences that include a series of leadership speaker events and access to virtual and in-person leadership development programs led by professors at leading universities and institutions. Attracting and Retaining Talent We recruit and engage candidates with different backgrounds and experiences who bring new perspectives.
(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.
Unfunded capital commitments of $16.2 billion at December 31, 2024, $11.6 billion at December 31, 2023, and $10.5 billion at December 31, 2022 are not reflected in AUM above. (3) Institutional includes assets sourced from institutions along with defined contribution assets that are sourced through intermediaries and our full-service recordkeeping business.
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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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These vehicles include an array of U.S. mutual funds, collective investment trusts, exchange-traded funds, subadvised funds, separately managed accounts, and other sponsored products.
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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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Page 4 Table of Contents The following tables set forth our broad investment capabilities as of December 31, 2024.
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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.
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Additionally, we invest our capital in certain alternative products we manage to further align our interest with those of our clients. These investments are commonly referred to as co-investments and totaled $0.3 billion at December 31, 2024.
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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.
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Some of these financial institutions have greater resources, may have more developed brand awareness in particular markets, or offer additional services to clients than we do.
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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.
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Our culture of collaboration, diversity and inclusion enables us to identify and challenge our best ideas to arrive at well-informed decisions for our clients.
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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.
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We continuously seek to identify new opportunities for our associates to expand their experience and grow their skills while cultivating an environment that allows them to be and bring their best selves to work every day. As a result of our associates developing these skills, we can promote from within.
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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.
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Our comprehensive learning platform allows associates to grow in ways that matter to them, while offering customized and bespoke learning paths to build critical capabilities that advance our business priorities. We encourage associates to participate in one of the four mentorship programs offered by the firm, which include mentoring, reciprocal mentoring, and mentor circle programs.
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Set forth below is our diversity information as of December 31, 2023, grouped by division. The data excludes information about the employees of OHA.
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Launched in 2022 and continuously enhanced, T. Rowe Price’s mentorship program enrollment has grown across the firm. We believe a critical driver of our firm’s future growth is our ability to cultivate leaders. Our leaders balance business credibility, accountability, and leadership capability to maximize potential, drive client value, and activate our culture.
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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.
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Our talent acquisition team continually enhances our recruitment and outreach strategies for all qualified applicants. Our talent strategy has garnered recognitions, including Forbes’ World’s Best Employers, World's Most Admired Companies from Fortune, Top Workplaces Culture Excellence from Energage, and America's Most Responsible Companies from Newsweek, among others. We publish our Equal Employment Opportunity ("EEO") data on our website at https://www.troweprice.com/content/dam/trowecorp/Pdfs/eeo-fact-sheet.pdf.
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Benefit competitiveness and design is assessed for a given country, and offerings reflect our global principles and local market practice. For example, retirement programs are uniquely designed to support associates in meeting retirement goals while also reflecting regional and country-specific practices in APAC, EMEA, and North America.
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Focus on Family We have always emphasized the importance of spending quality time away from work. In addition to generous vacation time, the firm offers fully paid maternity leave for birth mothers and fully paid parental leave to all new mothers and fathers. We also provide adoption assistance to associates looking to expand their families.
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In the U.S., the UK, and Canada, we offer our associates backup childcare and elder care. We also launched an APAC Family Program working group designed to support working parents and caregivers throughout the region in the workplace. AVAILABLE INFORMATION.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThese differences increase the risk that any action or lack thereof by us concerning ESG will be perceived negatively by some stakeholders and could adversely impact our reputation and business. Our global presence and investments on behalf of our clients around the world could also lead to heightened scrutiny and criticism in an increasingly fragmented geopolitical landscape.
Biggest changeOur global presence and investments on behalf of our clients around the world could also lead to heightened scrutiny and criticism in an increasingly fragmented geopolitical landscape. Misconduct by our personnel or third-party service providers could likewise adversely impact our reputation and lead to a loss of client assets.
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.
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 may generally withdraw their funds at any time, without advance notice and with little to no significant penalty.
A significant portion of our business operations are concentrated in the Baltimore, Maryland region; Colorado Springs, Colorado; Forth Worth, Texas; New York City, New York; and in London, England.
A significant portion of our business operations are concentrated in the Baltimore, Maryland region; Colorado Springs, Colorado; Forth Worth, Texas; New York City, New York; and London, England.
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.
A regulatory proceeding, even if it does not result in a finding of wrongdoing or sanctions, could consume a substantial amount of time, management attention, and expense.
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.
An externally caused data security incident, such as a cyberattack, 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.
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.
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 personnel; 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.
Our success depends on our highly skilled personnel, including our portfolio managers, investment analysts, sales and client relationship personnel, technology and operations professionals, and corporate officers, many of whom have specialized expertise and extensive experience in our industry. Professionals with financial services experience across functional areas are in demand, and we face significant competition for highly qualified employees.
Our success depends on our highly skilled personnel, including our portfolio managers, investment analysts, sales and client relationship personnel, technology and operations professionals, and corporate officers, many of whom have specialized expertise and extensive experience in our industry. Professionals with financial services experience across functional areas are in demand, and we face significant competition for highly qualified personnel.
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.
While we are under no obligation to provide financial support to our 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.
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.
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, personnel, 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.
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.
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 Page 16 Table of Contents • disruptions of infrastructure and third-party services such as communications, power, cloud services, transfer agent, investment management, trading, and accounting systems.
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.
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 and secure technology to conduct or expand our operations or if our technology became inoperative or obsolete.
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.
If we lose the availability of any personnel, 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.
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.
In addition, our third-party service providers and other intermediaries, with which we conduct business, 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.
Future 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.
Future changes to laws and regulations in these areas Page 24 Table of Contents 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 and related regulations in the U.S. and the European Market Infrastructure Regulation in the EU.
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.
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, system outages, and other causes.
There may be additional risks of which we are currently unaware, or which we currently consider immaterial. Any of these risks could have a material adverse effect on our financial condition, results of operations, and value of our common stock. RISKS RELATING TO OUR BUSINESS AND THE FINANCIAL SERVICES INDUSTRY.
There may be additional risks of which we are currently unaware, or which we currently consider immaterial. Any of these risks could have a material adverse effect on our business, financial condition, results of operations, liquidity, reputation, and value of our common stock. RISKS RELATING TO OUR BUSINESS AND THE FINANCIAL SERVICES INDUSTRY.
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.
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.
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.
Our business, financial condition, and results of operation may be adversely affected by pandemics, epidemics or disease outbreaks. 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.
While we maintain policies, procedures, and controls to reduce the likelihood of unauthorized activities, we are subject to the risk that our associates or third parties acting on our behalf may circumvent controls or act in a manner inconsistent with our policies and procedures.
While we maintain policies, procedures, and controls to reduce the likelihood of unauthorized activities, we are subject to the risk that our personnel or third parties acting on our behalf may circumvent controls or act in a manner inconsistent with our policies and procedures.
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.
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 personnel; • interrupting our business operations or those of critical service providers or other providers; • 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.
For example, the coronavirus pandemic has adversely affected global financial markets and impacted global supply chains.
For example, the coronavirus pandemic adversely affected global financial markets and impacted global supply chains.
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.
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.
A majority of our revenues are based on contracts with collective investment funds that are subject to termination without cause and on short notice. We provide investment advisory, distribution, and other administrative services to collective investment funds under various agreements. Investment advisory services are provided to each T.
A majority of our revenues are based on contracts with collective investment funds that are subject to termination without cause and on short notice. We provide investment advisory, distribution, and other administrative services to collective investment funds under various agreements.
In addition, we maintain offices with associates in many other global locations, including Sydney, Australia; Hong Kong; Singapore; Tokyo, Japan; and Luxembourg, some of which are in areas that are particularly vulnerable to extreme events.
In addition, we maintain offices with our personnel in many other global locations, including Sydney, Australia; Hong Kong; Singapore; Tokyo, Japan; and Luxembourg, some of which are in areas that are particularly vulnerable to extreme events.
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.
Page 13 Table of Contents 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, 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.
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.
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.
The loss of key personnel could also damage our reputation and make it more difficult to attract and retain personnel 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. TECHNOLOGY RISKS.
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.
Page 21 Table of Contents 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.
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.
We cannot predict the nature of future changes to the legal and regulatory requirements ap plicable to our business, nor the extent of the impacts that will result from current or future proposals.
We employ hedging strategies related to our supplemental savings plan in order to hedge the liability related to the plan. In the event that our hedging strategies are not effective, the resulting impact may adversely affect our results of operations, cash flows or financial condition.
We employ hedging strategies related to our supplemental savings plan and other incentive plans in order to hedge the liability related to the plans. In the event that our hedging strategies are not effective, the resulting impact may adversely affect our results of operations, cash flows or financial condition.
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.
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 business operations, and the cost of maintaining or upgrading such systems might increase from its current level.
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.
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.
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.
Since our revenue is based on the market value and composition of the assets under our management, the impact of such Page 18 Table of Contents events on global financial markets and our clients’ investment decisions could adversely affect our revenue and operating results.
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.
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.
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.
Page 23 Table of Contents 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 personnel, fines, penalties, sanctions, injunctive relief, exclusion from certain markets, or temporary or permanent loss of licenses or registrations necessary to conduct our business.
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.
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 Page 25 Table of Contents continue to be available at acceptable terms and fees.
Any of these risks may have a material adverse effect on our AUM, revenue and earnings. 20 Page 19 Table of Contents We are exposed to risks arising from our international operations. We operate in a number of jurisdictions outside of the United States.
Any of these risks may have a material adverse effect on our AUM, revenue and earnings. We are exposed to risks arising from our international operations. We operate in a number of jurisdictions outside of the United States.
HUMAN CAPITAL RISKS. Our success depends on our key personnel and our investment performance and financial results could be negatively affected by the loss of their services.
Page 20 Table of Contents HUMAN CAPITAL RISKS. Our success depends on our key personnel and our investment performance and financial results could be negatively affected by the loss of their services.
Furthermore, if any person, including any of our associates, negligently disregards or intentionally overrides or circumvents our established controls with respect to confidential data, or otherwise mismanages or misappropriates that data, we could be subject to significant monetary damages, regulatory enforcement actions, fines and/or criminal prosecution in one or more jurisdictions.
Page 22 Table of Contents Furthermore, if any person, including any of our personnel, negligently disregards or intentionally overrides or circumvents our established controls with respect to personal or confidential data, or otherwise mismanages or misappropriates that data, we could be subject to significant monetary damages, regulatory enforcement actions, fines and/or criminal prosecution in one or more jurisdictions.
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.
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 for us to digest and institute processes to comply.
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.
Such risks may include an increase in the intensity and frequency of extreme weather events, changes in temperature, rising sea levels and increase of wildfires, which may damage infrastructure and facilities, increase energy costs, negatively impact workforces, as well as disrupt connectivity or supply chains.
Investor interest in and the valuation of our fixed income and multi-asset investment portfolios are affected by changes in interest rates. • Geo-Political Exposure.
Investor interest in and the valuation of our fixed income and multi-asset investment portfolios are affected by changes in, as well as uncertainty about interest rates. • Geo-Political Exposure.
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.
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.
These could be caused by investors reducing their investments in our portfolios in general or in the market segments in which we focus; investors taking profits from their investments; and portfolio risk characteristics, which could cause investors to move assets to other investment managers . • Capacity Constraints.
These could be caused by investors reducing their investments in our portfolios in general or in the market segments in which we focus; investors Page 12 Table of Contents taking profits from their investments; portfolio risk characteristics, which could cause investors to move assets to other investment managers; and investor and market sentiments. • Capacity Constraints.
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.
We could be subject to losses if we fail to properly safeguard and maintain confidential data or our intellectual property. As part of our normal operations, we maintain and transmit personal and confidential data about our clients, personnel and other parties, as well as proprietary data and intellectual property relating to our business operations.
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.
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 laws enacted by a growing number of U.S. states; cybersecurity; current and emerging technology, including AI and automated decision-making; 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; amended Regulation S-P; and other similar matters that can concern the data of our clients and/or personnel.
Rowe Price collective investment fund under individual investment management agreements, which can be terminated on short notice. In addition, the Board of each T. Rowe Price U.S. mutual fund must annually approve the terms of the investment management and service agreements. If a T.
Investment advisory services are provided to each sponsored investment fund under individual investment management agreements, which can be terminated on short notice. In addition, the Board of each T. Rowe Price U.S. mutual fund must annually approve the terms of the investment management and service agreements. If a T.
Our investment income and asset levels may be negatively impacted by fluctuations in our investment portfolio. Separately from the investments we manage for our clients, we currently have a substantial investment portfolio in a variety of asset classes including equities, fixed income products, multi-asset products, financial instruments, real estate and alternative investments.
Separately from the investments we manage for our clients, we currently have a substantial investment portfolio in a variety of asset classes including equities, fixed income products, multi-asset products, financial instruments, real estate and alternative investments.
A suspension or termination of vendor-provided software licenses or related support, upgrades, and maintenance could cause system delays or interruption.
An outage, suspension or termination of vendor-provided services, software licenses or related support, upgrades, and maintenance could cause system delays or interruption.
Our managed investment portfolios may have significant investments in markets that are subject to risk of loss from political or diplomatic developments, government policies, wars, conflicts or civil unrest (such as the Russian invasion of Ukraine, the threat that Russia’s military aggression may expand beyond Ukraine, and the recent conflicts in the Middle East), trade wars or tariffs, currency fluctuations, illiquidity and capital controls, and changes in legislation related to ownership limitations.
Our managed investment portfolios may have significant investments in markets that are subject to risk of loss from political or diplomatic developments, government policies, wars, conflicts or civil unrest (such as the Russian invasion of Ukraine, the threat that Russia’s military aggression may expand, and the recent conflicts in the Middle East, including the Israel-Hamas war, and potential escalation of such conflicts), trade wars or tariffs (including those imposed or threatened by the U.S.), currency fluctuations, illiquidity and capital controls, and changes in legislation related to ownership limitations.
We cannot assure that we will be able to attract or retain key personnel. Due to the global nature of our investment advisory business, our key personnel may have reasons to travel to regions susceptible to higher risk of civil unrest, organized crime or terrorism, and we may be unable to ensure the safety of personnel traveling to these regions.
In addition, due to the global nature of our investment advisory business, our key personnel may have reasons to travel to regions susceptible to higher risk of civil unrest, organized crime or terrorism, and we may be unable to ensure the safety of personnel traveling to these regions.
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.
While our personnel can generally terminate their employment with us at any time, with most required to provide little to no notice, we have recently adopted more significant notification requirements for certain key positions, which may cause some personnel or candidates to be less willing to continue their employment with us or join our firm.
We own a 23% investment in UTI Asset Management Company Ltd ("UTI"), an Indian asset management company, and we may consider non-controlling minority investments in other entities in the future. We may not realize future returns from such investments or any collaborative activities that may develop in the future. On December 29, 2021, we completed our acquisition of OHA.
Page 19 Table of Contents We own a 23% investment in UTI Asset Management Company Ltd ("UTI"), an Indian asset management company, and we may consider non-controlling minority investments in other entities in the future. We may not realize future returns from such investments or any collaborative activities that may develop in the future.
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.
We are assessing the impact of the Retirement Security Rule on our business. • The Commodity Futures Trading Commission ("CFTC") regulations may limit the ability of certain investment products to use futures, swaps, and other derivatives.
Increasing competition for these distribution and sales channels as well as regulatory changes and initiatives may cause our distribution costs to rise, could cause further cost increases in the future, or could otherwise negatively impact the distribution of our products. Mergers, acquisitions, and other ownership or management changes could also adversely impact our relationships with these third-party intermediaries.
Increasing competition for these distribution and sales channels as well as regulatory changes and initiatives may cause our distribution costs to rise, could cause further cost increases in the future, or could otherwise negatively impact the distribution of our products.
These changes could be caused by investors reducing their investments in client portfolios in general or in the market segments in which we focus; investors taking profits from their investments; and portfolio risk 20 Page 18 Table of Contents characteristics, which could cause investors to move assets to other investment managers.
Redemptions and other withdrawals from, or shifting among, client portfolios also reduce our investment income. These changes could be caused by investors reducing their investments in client portfolios in general or in the market segments in which we focus; investors taking profits from their investments; and portfolio risk characteristics, which could cause investors to move assets to other investment managers.
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.
Certain insurance coverage may not be available or may be prohibitively expensive in future periods. 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.
Compliance within a complex regulatory environment imposes significant financial and strategic costs on our business, and non-compliance could result in fines and penalties. There is uncertainty associated with the regulatory and compliance environments in which we operate. Our business is subject to extensive and complex, overlapping and/or conflicting, and frequently changing rules, regulations, policies and legal interpretations, around the world.
There is uncertainty associated with the regulatory and compliance environments in which we operate. Our business is subject to extensive and complex, overlapping and/or conflicting, and frequently changing rules, regulations, policies and legal interpretations, around the world.
Actions taken by applicable regulatory or legislative bodies may impact our business activities and increase our costs. In October 2023, the U.S. Department of Labor proposed a new rule updating the definition of an investment advice fiduciary under ERISA (“Retirement Security Rule”), which would apply to retirement plans and accounts that comprise a majority of our accounts.
Actions taken by applicable regulatory or legislative bodies may impact our business activities and increase our costs. In September 2024, a new rule expanding the definition of, and requirements for, an investment advice fiduciary under ERISA (“Retirement Security Rule”) became effective, which applies to retirement plans and accounts that comprise a majority of our accounts.
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.
There have been increasing numbers of publicized cybersecurity incidents in recent years impacting financial services firms as well as firms in other industries, including incidents of increasing sophistication and scope, all of which have resulted in greater harm. Our use of third-party service providers could heighten this risk.
From time to time, we consider strategic opportunities, including potential acquisitions, dispositions, consolidations, organizational restructurings, joint ventures or similar transactions, any of which may impact our business.
We may review and pursue strategic transactions in order to maintain or enhance our competitive position and these could pose risks. From time to time, we consider strategic opportunities, including potential acquisitions, dispositions, consolidations, organizational restructurings, joint ventures or similar transactions, any of which may impact our business.
Furthermore, while we have in place robust and well-established plans for operational resiliency and business continuity that address the potential impact to our associates and our facilities, and a comprehensive suite of technologies which enable our associates to work remotely and conduct business, and to date while we have been successful in navigating these challenges, no assurance can be given that the steps we have taken will continue to be effective or appropriate.
Furthermore, while we have in place robust and well-established plans for operational resiliency and business continuity that address the potential impact of pandemics, epidemics or disease outbreaks to our personnel and our facilities, and to date have been successful in navigating the challenges presented by the COVID-19 pandemic, no assurance can be given that the steps we have taken will continue to be effective or appropriate against future pandemics, epidemics or disease outbreaks.
Any errors in the underlying models or model assumptions could have unanticipated and adverse consequences on our business and reputation. Any damage to our reputation could harm our business and lead to a loss of revenues and net income or access to capital. We have spent many years developing our reputation for integrity, strong investment performance, and superior client service.
Any errors in the underlying Page 14 Table of Contents models or model assumptions could have unanticipated and adverse consequences on our business and reputation. Any damage to our reputation could harm our business and lead to a loss of revenues and net income or access to capital.
As a result of these changes, more of our revenues may be concentrated with fewer intermediaries, which may impact our dependence on these intermediaries. A failure to maintain our third-party distribution and sales channels, or a failure to maintain strong business relationships with our distributors and other intermediaries, may impair our distribution and sales operations.
A failure to maintain our third-party distribution and sales channels, or a failure to maintain strong business relationships with our distributors and other intermediaries, may impair our distribution and sales operations.
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. Some institutions have proprietary products and distribution channels that make it more difficult for us to compete with them.
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, other client services and technology offerings.
As jurisdictions globally continue to develop legal frameworks on ESG and sustainability regulations, our industry and business may face increasingly fragmented regulatory frameworks, which may result in complex and potentially conflicting compliance obligations and legal and regulatory uncertainty .
As jurisdictions globally continue to develop legal frameworks on ESG and sustainability regulations, our industry and business may face increasingly fragmented regulatory frameworks, which may result in complex and potentially conflicting compliance obligations and legal and regulatory uncertainty. • Recently, several significant administrative law cases were decided by the U.S. Supreme Court, most notably Loper Bright Enterprises v.
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.
Regulators likewise may commence enforcement actions for violations of such requirements, which could lead to fines and penalties against us. Any such events could cause our revenues and profitability to decline, and significant errors for which we are responsible could have a material adverse impact on our reputation, results of operations, financial condition or liquidity.
The quantitative models we use may contain errors, which could result in financial losses or adversely impact product performance and client relationships. We use various quantitative models to support investment decisions and investment processes, including those related to portfolio management and portfolio risk analysis, as well as those related to client investment or savings advice or guidance.
The quantitative models we use may contain errors, which could result in financial losses or adversely impact product performance and client relationships.
Our brand is a valuable intangible asset, but it is vulnerable to a variety of threats that can be difficult or impossible to control, and costly or even impossible to remediate, if damaged. Regulatory inquiries and rumors can tarnish or substantially damage our reputation, even if those inquiries are satisfactorily addressed.
We have spent many years developing our reputation for integrity, strong investment performance, and superior client service. Our brand is a valuable intangible asset, but it is vulnerable to a variety of threats that can be difficult or impossible to control, and costly or even impossible to remediate, if damaged.
Climate change-related risks could adversely affect our business, products, operations and clients, which may cause our AUM, revenue and earnings to decline. Our business and those of our clients could be impacted by climate change-related risks. Climate change may present risk to our business through changes in the physical climate or from the process of transitioning to a lower-carbon economy.
Climate change-related risks could adversely affect our business, products, operations and clients, which may cause our AUM, revenues and earnings to decline. Our business and the assets we manage on behalf of clients could be impacted by climate change-related risks.
Any inability to meet applicable requirements or expectations may adversely impact our reputation. Additionally, various stakeholders have divergent views on ESG matters, including in the countries in which we operate and invest, as well as states and localities where we serve public sector clients.
Various clients and stakeholders have divergent views on ESG matters, with some aiming to increase their exposure to ESG investing and some choosing not to invest in products or strategies with an ESG investment objective, including in the countries in which we operate and invest, as well as states and localities where we serve public sector clients.
Climate-related physical risks arise from the direct impacts of a changing climate in the short- and long-term.
Climate change may present risk to our business through changes in the physical climate or from the process of transitioning to a lower-carbon economy. Climate-related physical risks arise from the direct impacts of a changing climate in the short-, medium- and long-term.
Such non-performance could produce a financial loss for us or the portfolios we manage. We may review and pursue strategic transactions in order to maintain or enhance our competitive position and these could pose risks.
Such non-performance could produce a financial loss for us or the portfolios we manage.
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.
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 and changes in existing regulations may lead to increased compliance costs, enhanced reporting obligations, regulation of existing products and/or services, exposure to litigation, and aggressive or inconsistent levels of regulatory enforcement globally.
The availability of such disclosures may impact the investment decisions of European investors. Furthermore, federal regulators, as well as state legislatures and regulators in the U.S. have proposed or adopted laws and regulations to pursue similar initiatives, such as the SEC’s proposed climate disclosure rules .
In the U.S., states have proposed or adopted laws and regulations to pursue similar initiatives, such as California’s Climate Accountability Package, federal regulations on ESG disclosures, such as the SEC's proposed climate disclosure rules that have been stayed, are expected to halt under the new administration in the U.S.
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.
In the event that our personnel become incapacitated by pandemics, epidemics or disease outbreaks, our business operations may be impacted, which could lead to reputational and financial harm. Our investment income and asset levels may be negatively impacted by fluctuations in our investment portfolio.
Removed
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.
Added
Some institutions have proprietary products, distribution channels or technology offerings that make it more difficult for us to compete with them.
Removed
Misconduct by our employees or third-party service providers could likewise adversely impact our reputation and lead to a loss of client assets.
Added
In addition, in recent years, there has been continued consolidation in the asset management industry, which continues to alter our competitive landscape, has led to fee compression, and requires us to modify or adapt our product offerings to attract and retain customers.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

10 edited+1 added−1 removed14 unchanged
Biggest changeAlthough no cybersecurity incident during the year ended December 31, 2023 resulted in an interruption of our operations, known losses of critical data or otherwise had a material impact on the firm’s strategy, financial condition or results of operations, the scope and impact of any future incident cannot be predicted. See “Item 1A.
Biggest changeWe have previously been the target of cybersecurity attacks and expect such attempts to continue, potentially with more frequency or sophistication. Although no cybersecurity incident during the year ended December 31, 2024, resulted in an interruption of our operations, known losses of critical data, nor a material impact on the firm’s strategy, financial condition or results of operations.
Our Chief Executive Officer and President (CEO) has ultimate responsibility for developing strategy and overseeing execution to meet the firm’s objectives. The CEO has delegated to our Chief Operating Officer (COO) oversight of this operational execution. The COO has several leaders within the COO organization who develop and oversee the firm’s risk management, technology, and information security practices.
Our CEO has ultimate responsibility for developing strategy and overseeing execution to meet the firm’s objectives. The CEO has delegated to our Chief Operating Officer (COO) oversight of this operational execution. The COO has several leaders within the COO organization who develop and oversee the firm’s risk management, technology, and information security practices.
The cybersecurity program includes regular assessment on the effectiveness of the firm's risk mitigation strategies. Assessments include third-party validation to help ensure our internal controls and safeguards adhere to security and compliance standards. We annually undergo external examinations, such as Sarbanes-Oxley relating to financial reporting and SOC 1 and/or SOC 2 for key operational Business Units.
The cybersecurity program includes regular assessment on the effectiveness of the firm's risk mitigation strategies. Assessments include third-party validation to help ensure our internal controls and safeguards adhere to security and compliance standards. We annually undergo external examinations, such as Sarbanes-Oxley relating to financial reporting, System and Organization Controls (SOC) 1, and SOC 2 for key operational Business Units.
The Enterprise Risk team provides guidance and support in identifying, assessing, and monitoring all aspects of risks from cybersecurity threats. The Enterprise Risk function conducts risk assessments for technology and cybersecurity, and coordinates with Internal Audit and Firm-wide Compliance to provide risk assurance activities.
The Enterprise Risk team provides guidance and support in identifying, assessing, and monitoring all aspects of risks from cybersecurity threats. The Enterprise Risk function conducts risk assessments for technology and cybersecurity, and coordinates with Internal Audit and Global Compliance to provide risk assurance activities.
Enterprise Security also conducts regular phishing tests and manages annual employee training focused on raising awareness, highlighting the important role our employees play in protecting the firm from cybersecurity threats. Business Continuity and Disaster Recovery programs execute regular testing across business and technology teams to demonstrate resilience.
Enterprise Security also conducts regular phishing tests and manages annual employee training Page 27 Table of Contents focused on raising awareness, highlighting the important role our employees play in protecting the firm from cybersecurity threats. Business Continuity and Disaster Recovery programs execute regular testing across business and technology teams to demonstrate resilience.
Action plans may be developed for identified control issues and management is responsible for addressing these issues. 20 Page 24 Table of Contents Although management is responsible for the firm’s day to day cybersecurity operations, the Board of Directors oversees the firm’s cybersecurity program.
Action plans may be developed for identified control issues and management is responsible for addressing these issues. Although management is responsible for the firm’s day to day cybersecurity operations, the Board of Directors ("the Board") oversees the firm’s cybersecurity program.
The results of these assessments are discussed with and reviewed by the Audit Committee, and shared with the Board, annually. 20 Page 25 Table of Contents Within the firm's global Procurement department, governance processes are established, including a formal Supplier Risk Management program overseeing third-party relationships based on documented risk thresholds.
The results of these assessments are discussed with and reviewed by the Audit Committee, and shared with the Board, annually. Within the firm's global risk department, governance processes are established, including a formal Supplier Risk Management program overseeing third-party relationships based on documented risk thresholds. The Supplier Risk Management program performs regular assessments, including information security reviews.
Risk Factors–Technology Risks” for more information on how a material cybersecurity incident may impact us.
The scope and impact of any future incident cannot be predicted. See “Item 1A. Risk Factors–Technology Risks” for more information on how a material cybersecurity incident may impact us.
The Supplier Risk Management program performs regular assessments, including information security reviews. Ongoing monitoring is performed through our centralized risk function as well as by business line supplier managers to raise new threats or weaknesses associated with a third-party service.
Ongoing monitoring is performed through our centralized risk function as well as by business line supplier managers to raise new threats or weaknesses associated with a third-party service. In accordance with our Enterprise Incident Management Policy, any third-party cybersecurity incident is reported and evaluated for further review and impact analysis.
This committee monitors risk management activities, including cybersecurity matters, and reports periodically and more frequently as necessary, to our Board of Directors and Audit Committee. Cybersecurity risk management practices operate enterprise-wide, across T. Rowe Price legal entities, including Oak Hill Advisors (OHA).
This committee monitors risk management activities, including cybersecurity matters, and reports periodically and more frequently, as necessary, to our Board of Directors and Audit Committee. For example, at each quarterly meeting the Audit Committee receives an update concerning the company’s cybersecurity metrics.
Removed
In accordance with our Enterprise Incident Management Policy, any third-party cybersecurity incident is reported and evaluated for further review and impact analysis. We have previously been the target of cybersecurity attacks and expect such attempts to continue, potentially with more frequency or sophistication.
Added
In addition, at least annually the Board receives a technology and cybersecurity update led by the senior management from the company’s technology and information security teams. Cybersecurity risk management practices operate enterprise-wide, across T. Rowe Price legal entities, including Oak Hill Advisors (OHA).

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe 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.
Biggest changeWe will vacate the space at 100 East Pratt Street once the new headquarters is fully completed, which is expected in early 2025. We have offices in 17 markets around the world, including the U.S.
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.
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 to a complex to be built with approximately 553,000 square feet of space under lease in Baltimore, Maryland.
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.
Information concerning our anticipated capital expenditures in 2025 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, 2024, is set forth in Note 7 to our audited consolidated financial statements in Item 8. of this Form 10-K.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

10 edited+1 added−1 removed1 unchanged
Biggest changeDavid 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.
Biggest changeEquity in 2021, Director of Equity Research North America from 2019 to 2021, and a Vice President since 2007. David Oestreicher (57), 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.
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.
Arif Husain (52), 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.
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.
August (63), 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.
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.
Jackson (62), 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 (52), Chief Operating Officer since 2022, and a Vice President since 2022. Prior to joining T.
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.
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 14, 2025. There are no arrangements or understandings pursuant to which any person serves as an officer. The first eleven individuals are members of our management committee. Robert W.
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.
Sharps (53), Chair of the Board since 2024, 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. 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.
Large-Cap Equity Growth Strategy from 2001 to 2016, and a Vice President from 2001 to 2021. Jennifer B. Dardis (51), 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.
Hiebler (48), Principal Accounting Officer since 2010, Controller since 2020 and a Vice President since 2009. 20 Page 27 Table of Contents PART II
Hiebler (49), Principal Accounting Officer since 2010, Controller since 2020 and a Vice President since 2009. Page 29 Table of Contents PART II
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.
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 (47), Head of Global Equity since 2025, Head of U.S. Equity from 2022 to 2024, Associate Head of U.S.
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.
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. Eric L. Veiel (53), Head of Global Investments and Chief Investment Officer since 2024.
Removed
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.
Added
Sebastien Page (48), Head of Global Multi-Asset and a Vice President since 2015 and Chief Investment Officer since 2022. Dorot hy C. Sawyer (57 ), Head of Global Distribution since 2024, Head of U.S.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeMonth 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.
Biggest changeMonth 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 3,951 $ 110.30 — 4,000,489 November 17,125 $ 121.70 — 4,000,489 December 630,014 $ 115.36 623,136 18,377,353 Total 651,090 $ 115.50 623,136 (1) In March 2020 the Board approved a share repurchase program of approximately 24.1 million shares and in December 2024, the Board approved an increase to the program of approximately 15.0 million shares.
"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.
"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 2024.
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.
Common stock owned outright by our associates and directors, combined with outstanding vested stock options and unvested restricted stock awards, total nearly 6% of our outstanding stock and outstanding vested stock options at December 31, 2024.
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.
Dividends per share during the past two years were: 1st quarter 2nd quarter 3rd quarter 4th quarter 2024 $ 1.24 $ 1.24 $ 1.24 $ 1.24 2023 $ 1.22 $ 1.22 $ 1.22 $ 1.22 See Part III, Item 12.
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.
Of the total number of shares purchased during the fourth quarter of 2024, 27,954 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.
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.
Authorization dates 12/31/2023 Additional shares authorized Total number of shares purchased Maximum number of shares that may yet be purchased at 12/31/2024 March 2020 6,348,517 — (2,971,164) 3,377,353 December 2024 — 15,000,000 — 15,000,000 6,348,517 15,000,000 (2,971,164) 18,377,353 We have 878 stockholders of record and approximately 480,000 beneficial stockholder accounts held by brokers, banks, and other intermediaries holding our common stock.

Item 7. Management's Discussion & Analysis

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

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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.
Biggest changePage 32 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, 2021 $ 992.7 $ 175.7 $ 477.7 $ 41.7 $ 1,687.8 Net cash flows prior to manager-driven distributions (72.7) 4.1 4.9 4.6 (59.1) Manager-driven distributions — — — (2.6) (2.6) Net cash flows (72.7) 4.1 4.9 2.0 (61.7) Net market appreciation (depreciation) and income (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 Net cash flows prior to manager-driven distributions (85.4) (6.8) 9.1 3.9 (79.2) Manager-driven distributions — — — (2.6) (2.6) Net cash flows (85.4) (6.8) 9.1 1.3 (81.8) Net market appreciation (depreciation) and income (3) 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 Net cash flows prior to manager-driven distributions (52.0) 12.6 (6.5) 6.4 (39.5) Manager-driven distributions — — — (3.7) (3.7) Net cash flows (52.0) 12.6 (6.5) 2.7 (43.2) Net market appreciation (depreciation) and income (3) 138.1 5.5 59.5 2.2 205.3 Change during the period 86.1 18.1 53.0 4.9 162.1 Assets under management at December 31, 2024 $ 829.7 $ 188.1 $ 536.0 $ 52.8 $ 1,606.6 (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.
These efforts often involve costs that precede any future revenues that we may recognize from an increase to our assets under management.
These efforts often involve costs that precede any future revenues we may recognize from an increase to our assets under management.
Making these estimates and judgments requires the analysis of information concerning events that may not yet be complete and of facts and circumstances that may change over time. Accordingly, actual amounts or future results can differ materially from those estimates that we include currently in our consolidated financial statements, significant accounting policies, and notes.
Making these estimates and judgments requires the analysis of information concerning events that may not yet be complete and of facts and circumstances that may change over time. Accordingly, actual amounts or future results can differ materially from those estimates that we currently include in our consolidated financial statements, significant accounting policies, and notes.
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, 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 effective 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.
During 2023, net proceeds from the sale of investments of $36.1 million were lower compared to $62.0 million during 2022. In 2023, we increased our property and equipment expenditures by $70.3 million and our other investing activity by $34.7 million. We eliminate our capital in those sponsored investment products we consolidate in preparing our consolidated statements of cash flows.
During 2023, net proceeds from the sale of investments of $36.1 million were lower compared to $62.0 million during 2022. In 2023, we increased our property and equipment expenditures by $70.3 million and our other investing activity by $34.7 million. We eliminate our capital in those investment products we consolidate in preparing our consolidated statements of cash flows.
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.
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.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. OVERVIEW. Our 2023 revenues and net income are derived primarily from investment advisory services provided to individual and institutional investors in a broad range of investment solutions across equity, fixed income, multi-asset, and alternative capabilities.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. OVERVIEW. Our revenues and net income are derived primarily from investment advisory services provided to individual and institutional investors in a broad range of investment solutions across equity, fixed income, multi-asset, and alternative capabilities.
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.
The investment management industry has been evolving and industry participants are facing 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.
The increase in our effective tax rate in 2023 from 2022 was primarily due to an increase in the valuation allowances recorded mainly against UK-based deferred tax assets, including net operating losses, and a decrease in discrete tax benefits associated with option exercises and restricted stock vests.
For 2023, the increase in our effective tax rate from 2022 was primarily due to an increase in the valuation allowances recorded mainly against UK-based deferred tax assets, including net operating losses, and a decrease in discrete tax benefits associated with option exercises and restricted stock vests.
Although we can redeem our net interest in these sponsored investment products at any time, we cannot directly access or sell the assets held by the products to obtain cash for general operations. Additionally, the assets of these sponsored investment products are not available to our general creditors.
Although we can redeem our net interest in these investment products at any time, we cannot directly access or sell the assets held by the products to obtain cash for general operations. Additionally, the assets of these investment products are not available to our general creditors.
Our net cash outflows in 2023 were driven primarily by our growth-oriented equity strategies sourced from Americas financial intermediaries and institutional clients. These outflows were partially offset by net cash inflows in our multi-asset strategies, predominately our target date retirement products, and alternative strategies.
For 2023, net outflows were driven primarily by our growth-oriented equity strategies sourced from Americas financial intermediaries and institutional clients. These outflows were partially offset by net cash inflows in our multi-asset strategies, predominately our target date retirement products, and alternative strategies.
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.
Our consolidated balance sheet reflects the assets and liabilities of those investment products we consolidate, as well as redeemable non-controlling interests for the portion of these investment products that are held by unrelated third-party investors.
Our annualized effective fee rates can be impacted by market or cash flow related shifts among asset and share classes, price changes in existing products, and asset level changes in products with tiered-fee structures.
Our annualized effective fee rates can be impacted by market or cash flow related shifts among asset and share classes, shifts among vehicles, price changes in existing products, and asset level changes in products with tiered-fee structures.
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.
Rowe Price mutual funds and other managed investment products compared to 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.
We must also perform impairment testing at other times if an event or circumstance occurs indicating that it is more likely than not that an impairment has been incurred. The maximum future impairment of goodwill that we could incur is the amount recognized in our consolidated balance sheets, $2.6 billion as of December 31, 2023.
We must also perform impairment testing at other times if an event or circumstance occurs indicating that it is more likely than not that an impairment has been incurred. The maximum future impairment of goodwill that we could incur is the amount recognized in our consolidated balance sheets, $2.6 billion as of December 31, 2024.
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.
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 2024, 2023 and 2022 on a U.S. GAAP basis and a non-GAAP basis.
(7) This non-GAAP measure was calculated by applying the two-class method to adjusted net income attributable to T. Rowe Price Group and dividing by the weighted-average common shares outstanding assuming dilution. The calculation of net income allocated to common stockholders is as follows: Year ended (in millions) 2023 2022 2021 Adjusted net income attributable to T.
(7) This non-GAAP measure was calculated by applying the two-class method to adjusted net income attributable to T. Rowe Price Group and dividing by the weighted-average common shares outstanding assuming dilution. The calculation of net income allocated to common stockholders is as follows: Year ended (in millions) 2024 2023 2022 Adjusted net income attributable to T.
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.
We present those significant accounting policies used in the preparation of our consolidated financial statements as an integral part of those statements within this 2024 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.
Definite-lived intangible assets are reviewed for impairment whenever events or circumstances indicate that the asset group's carrying amount may not be recoverable (i.e., the carrying amount is less than the undiscounted estimated future cash flows). Management must first determine the level at which definite-lived intangible assets are tested for impairment (i.e., asset group).
Definite-lived intangible assets are reviewed for impairment whenever events or circumstances indicate that the asset group's carrying amount may not be recoverable (i.e., the carrying amount is more than the undiscounted estimated future cash flows). Management must first determine the level at which definite-lived intangible assets are tested for impairment (i.e., asset group).
In this regard, we have ample liquidity and resources that allow us to take advantage of attractive growth opportunities. We are investing in key capabilities, including investment professionals, distribution professionals, technologies, and new product offerings in order to provide our clients with strong investment management expertise and service.
In this regard, we have ample liquidity and resources that allow us to take advantage of attractive growth opportunities. We are investing in key capabilities, including investment professionals, distribution professionals, technologies, and new product offerings in order to provide our clients with strong investment management expertise and service. MARKET TRENDS.
Accordingly, fluctuations in financial markets and in the composition of assets under management affect our revenues and results of operations. We incur significant expenditures to develop new products and services and improve and expand our capabilities and distribution channels in order to attract new investment advisory clients and additional investments from our existing clients.
Accordingly, fluctuations in financial markets and in the composition of assets under management affect our revenues and results of operations. We incur significant expenditures to develop new products and services and improve and expand our capabilities and distribution channels in order to attract new clients and additional investments from our existing clients.
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.
Rowe Price sponsored mutual funds and composites AUM. (2) Source: © 2025 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.
We evaluate the carrying amount of goodwill in our consolidated balance sheets for possible impairment on an annual basis in the fourth quarter of each year using a fair value approach. Goodwill would be considered impaired whenever our historical carrying amount exceeds the fair value of our investment advisory business.
We evaluate the carrying amount of goodwill in our consolidated balance sheets for possible impairment on an annual basis in the fourth quarter of each year using a fair value approach. Goodwill would be considered impaired whenever its carrying amount exceeds the fair value of our investment advisory business.
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.
Results Overview - 2023 compared to 2022 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.
We currently estimate our effective tax rates for the full-year 2024 will be in the range of 23.0% to 27.0% on a GAAP basis, and 23% to 26% on a non-GAAP basis.
We currently estimate our effective tax rates for the full-year 2025 will be in the range of 23.0% to 27.0% on a GAAP basis, and 23.0% to 26.0% on a non-GAAP basis.
Our interest in these sponsored investment products was used as initial seed capital and is recategorized as discretionary when it is determined by management that the seed capital is no longer needed.
Our interest in these investment products was primarily used as initial seed capital and is recategorized as discretionary when it is determined by management that the seed capital is no longer needed.
If required, fair value is generally 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 significant management judgment, the most relevant of which include revenue growth, discount rates, and effective tax rates.
We retain in our non-GAAP measures the investment gains recognized on the cash and discretionary investments as these assets and related income (loss) are considered part of our core operations. We believe adjusting for the remaining non-operating income (loss) helps the reader’s ability to understand our core operating results and increases comparability to prior years.
We retain in our non-GAAP measures the investment gains recognized on the cash and discretionary investments as these assets and related income (loss) are considered part of the firm's core operations. We believe adjusting for the remaining non-operating income (loss) helps the reader’s ability to understand the firm's core operating results and increases comparability period to period.
Our revenues are substantially dependent on fees earned under contracts with the T. Rowe Price funds and could be adversely affected if the independent directors of one or more of the T. Rowe Price funds terminated or significantly altered the terms of the investment management or related administrative services agreements.
Our revenues are substantially dependent on fees earned under contracts with the T. Rowe Price funds and could be adversely affected if the independent directors of one or more of the T. Rowe Price funds terminated or significantly altered the Page 54 Table of Contents terms of the investment management or related administrative services agreements.
Provision for income taxes After compensation and related costs, our provision for income taxes on our earnings is our largest annual expense. We operate in numerous states and countries through our various subsidiaries and must allocate our income, expenses, and earnings under the various laws and regulations of each of these taxing jurisdictions.
Page 53 Table of Contents Provision for income taxes After compensation and related costs, our provision for income taxes on our earnings is our largest annual expense. We operate in numerous states and countries through our various subsidiaries and must allocate our income, expenses, and earnings under the various laws and regulations of each of these taxing jurisdictions.
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.
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. Investment advisory fees depend largely on the total value and composition of assets under our management.
As our average assets under management increase or decrease in a given period, the level of our investment advisory fee revenue for that same period generally fluctuates in a similar manner.
As our average assets under management increase or decrease in a given period, the level of our investment advisory fees for that same period generally fluctuates in a similar manner.
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.
By comparison, 32.5% of Morningstar's fund population is given a rating of 4 or 5 stars (6) . In addition, 63.0% (6) of AUM in our rated U.S. mutual funds (across primary share classes) ended 2024 with an overall rating of 4 or 5 stars. (1) The investment performance reflects that of T.
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.
Additionally, we do not emphasize the impact of this portion of non-operating income (loss) when managing and evaluating the firm's performance. (6) The income tax impacts were calculated in order to achieve an overall non-GAAP effective tax rate of 24.5% for 2024, 27.2% for 2023 and 24.7% for 2022.
Any impairment loss would be the difference between the fair value of the asset group and its carrying amount. During 2023, we recognized an immaterial non-cash impairment charge on these intangible assets. Goodwill We internally conduct, manage, and report our operations as one reportable business segment - investment advisory business.
Any impairment loss would be the difference between the fair value of the asset group and its carrying amount. During 2024, we recognized immaterial non-cash impairment charges on these intangible assets. Goodwill We internally conduct, manage, and report our operations as one reportable business segment - investment advisory business.
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
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 investment products and investing in general or in particular classes of mutual funds or other investments.
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.
GAAP effective tax rate is also impacted by changes in the proportion of net income that is attributable to our redeemable non-controlling interests, non-controlling interests reflected in permanent equity and the remeasurement of the contingent consideration liability.
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.
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.
As of December 31, 2023, the total valuation allowance recorded was $102.8 million, of which nearly all is related to UK-based deferred tax assets. We intend to continue maintaining a full valuation allowance on these and future deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of these allowances. Our U.S.
As of December 31, 2024, the total valuation allowance recorded was $118.9 million, of which nearly all is related to UK-based deferred tax assets. We intend to continue maintaining a full valuation allowance on these and future deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of these allowances. Our U.S.
Investment advisory revenues earned in 2023 decreased 3.7% over the comparable 2022 period as average assets under our management decreased $36.1 billion, or 2.6%, to $1,362.3 billion. The average annualized effective fee rate earned on our assets under management was 42.2 basis points in 2023, compared with 42.7 basis points earned in 2022.
Investment advisory fees earned in 2023 decreased 3.7% over the comparable 2022 period as average assets under our management decreased $36.1 billion, or 2.6%, to $1,362.3 billion. The average annualized effective fee rate earned on our assets under management was 41.9 basis points in 2023, compared to 42.6 basis points earned in 2022.
(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.
(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 2024 was 24.3%, compared to 26.3% for 2023 and 25.6% for 2022.
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.
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 $4.96 per share in regular dividends in 2024, an increase of 1.6% over the $4.88 per share paid in 2023.
Rowe Price Group Consolidated sponsored investment products Elims As reported Cash flows from operating activities Net income $ 1,788.7 $ 153.5 $ (106.5) $ 1,835.7 Adjustments to reconcile net income to net cash provided by operating activities Depreciation, amortization and impairments of property, equipment and software 254.8 — — 254.8 Amortization and impairment of acquisition-related assets and retention agreements 226.8 — — 226.8 Fair value remeasurement of contingent consideration liability (82.4) — — (82.4) Stock-based compensation expense 265.6 — — 265.6 Net gains recognized on investments (567.3) — 106.5 (460.8) Net change in sponsored investment products used to economically hedge supplemental savings plan liability (10.3) — 66.4 56.1 Net change in trading securities held by consolidated sponsored investment products — (1,070.3) — (1,070.3) Other changes in assets and liabilities 182.7 27.9 (17.0) 193.6 Net cash provided by (used in) operating activities 2,058.6 (888.9) 49.4 1,219.1 Net cash provided by (used in) investing activities (310.2) (56.8) 495.2 128.2 Net cash provided by (used in) financing activities (1,437.4) 903.4 (544.6) (1,078.6) Effect of exchange rate changes on cash and cash equivalents of consolidated sponsored investment products — 0.4 — 0.4 Net change in cash and cash equivalents during period 311.0 (41.9) — 269.1 Cash and cash equivalents at beginning of year 1,755.6 119.1 — 1,874.7 Cash and cash equivalents at end of period $ 2,066.6 $ 77.2 $ — $ 2,143.8 20 Page 47 Table of Contents 2022 Cash flow attributable to: (in millions) T.
Cash flow attributable to consolidated investment products Eliminations As reported Cash flows from operating activities Net income (loss) $ 1,788.7 $ 153.5 $ (106.5) $ 1,835.7 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities Depreciation, amortization and impairments of property, equipment and software 254.8 — — 254.8 Amortization and impairment of acquisition-related assets and retention agreements 226.8 — — 226.8 Fair value remeasurement of contingent consideration liability (82.4) — — (82.4) Stock-based compensation expense 265.6 — — 265.6 Net (gains) losses recognized on investments (567.3) — 106.5 (460.8) Total non-cash adjustments 97.5 — 106.5 204.0 Net (investments) redemptions in sponsored investment products used to economically hedge deferred compensation liabilities (10.3) — 66.4 56.1 Net change in trading securities held by consolidated investment products — (1,070.3) — (1,070.3) Other changes 182.7 27.9 (17.0) 193.6 Net cash provided by (used in) operating activities 2,058.6 (888.9) 49.4 1,219.1 Net cash provided by (used in) investing activities (310.2) (56.8) 495.2 128.2 Net cash provided by (used in) financing activities (1,437.4) 903.4 (544.6) (1,078.6) Effect of exchange rate changes on cash and cash equivalents of consolidated investment products — 0.4 — 0.4 Net change in cash and cash equivalents during year 311.0 (41.9) — 269.1 Cash and cash equivalents at beginning of year 1,755.6 119.1 — 1,874.7 Cash and cash equivalents at end of year $ 2,066.6 $ 77.2 $ — $ 2,143.8 Page 49 Table of Contents 2022 (in millions) Cash flow attributable to 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.
Cash flow attributable to consolidated investment products Eliminations As reported Cash flows from operating activities Net income (loss) $ 1,557.9 $ (211.7) $ 103.4 $ 1,449.6 Adjustments to reconcile net income (loss) to net cash provided by (used in) 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 (gains) losses recognized on investments 314.0 — (103.4) 210.6 Total non-cash adjustments 1,084.0 — (103.4) 980.6 Net investments in sponsored investment products used to economically hedge deferred compensation liabilities (18.8) — — (18.8) Net change in trading securities held by consolidated investment products — 87.9 — 87.9 Other changes (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 investment products — 9.5 — 9.5 Net change in cash and cash equivalents during year 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 year $ 1,755.6 $ 119.1 $ — $ 1,874.7 Operating activities During 2024, operating activities attributable to T.
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.
Total Fund AUM included for this analysis includes $322B for 1 year, $318B for 3 years, $317B for 5 years, and $316B for 10 years. (4) Passive Peer Median was created by T. Rowe Price using data from Morningstar. Primary share class only.
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.
Total AUM included for this analysis includes $306B for 1 year, $302B for 3 years, $262B for 5 years, and $257B 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 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.
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.
The decrease in our operating margin in 2023 compared with 2022 is primarily driven by a decrease in investment advisory revenue as a result of lower average assets under management and higher operating expenses. Diluted earnings per share. Diluted earnings per share was $7.76 in 2023 as compared to $6.70 in 2022.
The decrease in our operating margin in 2023 compared to 2022 is primarily driven by a decrease in investment advisory fees as a result of lower average assets under management and higher operating expenses. Page 37 Table of Contents Diluted earnings per share. Diluted earnings per share was $7.76 in 2023 compared to $6.70 in 2022.
The increases over the last two years were primarily due to ongoing investment in our technology capabilities, including depreciation and hosting solution licenses, and increased office facility costs, mainly related to rent expense associated with a new London office that we began leasing in the second half of 2022 and occupied in September 2023.
The increase was primarily due to ongoing investment in our technology capabilities, including depreciation and hosting solution licenses, and increased office facility costs, mainly related to rent expense associated with a new London office that we began leasing in the second half of 2022 and occupied in September 2023.
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.
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. Financing Activities Net cash used in financing activities attributable to T. Rowe Price Group totaled $1,542.8 million in 2024 compared to $1,437.4 million in 2023.
The adjustment to operating expenses represents the operating expenses of the consolidated products, net of the elimination of related management and administrative fees. The adjustment to net income attributable to T. Rowe Price represents the net income of the consolidated products, net of redeemable non-controlling interests.
The adjustment to operating expenses represents the operating expenses of the consolidated investment products, net of the elimination of related investment advisory and administrative fees. The adjustment to net income attributable to T. Rowe Price Group, Inc. represents the net income of the consolidated investment products, net of redeemable non-controlling interests.
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.
Total AUM included for this analysis includes $1,423B for 1 year, $1,420B for 3 years, $1,418B for 5 years, and $1,367B 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.
We currently estimate our 2024 non-GAAP operating expenses, excluding non-GAAP accrued carried interest compensation, will grow in the range of 3%-5% from the comparable 2023 amount of $4,190.7 million. We could elect to adjust our expense growth should unforeseen circumstances arise, including significant market movements. Operating margin. Our operating margin in 2023 was 30.7%, compared with 36.6% in 2022.
We currently estimate our 2025 non-GAAP operating expenses, excluding non-GAAP accrued carried interest compensation, will grow in the range of 4%-6% from the 2024 amount of $4,456.3 million. We could elect to adjust our expense growth should unforeseen circumstances arise, including significant market movements. Operating margin was 32.9% in 2024 compared to 30.7% in 2023.
Rowe Price Diluted earnings per share (7) U.S.
Rowe Price Group, Inc. Diluted earnings per share (7) U.S.
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 believe it is useful to offset the non-operating investment income (loss) recognized on the economic hedges against the related compensation expense and remove the net impact to help the reader's ability to understand the firm's core operating results and to increase comparability period to period.
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.
We believe adjusting for these charges helps the reader's ability to understand our core operating results and increases comparability period to period. Page 45 Table of Contents (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 increases comparability period to period.
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 material cash commitments primarily include our obligations related to our deferred compensation liabilities, facility leases, 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.
Distribution and servicing costs paid to third-party intermediaries that source the assets of certain share classes of our U.S. mutual funds and our international products, such as our Japanese ITMs and SICAVs, are recognized in this expense category.
The costs in this expense category primarily include amounts paid to third-party intermediaries that source the assets of certain share classes of our U.S. mutual funds, ETFs and our international products, such as our Japanese ITMs and SICAVs.
Other-than-temporary impairments of equity method investments We evaluate our equity method investments, including our investment in UTI, certain investments in sponsored investment products, and our investments in the affiliated private investment funds, for impairment when events or changes in circumstances indicate that the carrying value of the investment exceeds its fair value, and the decline in fair value is other than temporary.
Other-than-temporary impairments of equity method investments We evaluate our equity method investments for impairment when events or changes in circumstances indicate that the carrying value of the investment exceeds its fair value, and the decline in fair value is other than temporary.
These unfavorable impacts were partially offset by a favorable impact of net gains attributable to redeemable non-controlling interests held in our consolidated investment products and state tax liability settlements.
These unfavorable impacts were partially offset by a favorable impact of net gains attributable to redeemable non-controlling interests held in our consolidated investment products and state tax liability settlements. The non-GAAP tax rate primarily adjusts for the impact of the consolidated investment products, including net income attributable to redeemable non-controlling interests.
The remaining change in reported cash flows from financing activities is primarily attributable to a $407.2 million increase in net subscriptions from redeemable non-controlling interest holders of our consolidated investment products during 2023. 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 financing activities is attributable to a $247.4 million increase in net subscriptions from redeemable non-controlling interest holders of our consolidated investment products during 2024. Net cash used in financing activities attributable to T. Rowe Price Group totaled $1,437.4 million in 2023 compared to $2,028.5 million in 2022.
Morgan Global High Yield Index 13.3% Bloomberg Barclays Municipal Bond Index 6.4% Bloomberg Barclays Global Aggregate Ex-U.S. Dollar Bond Index 5.7% J.P. Morgan Emerging Markets Bond Index Plus 10.3% Bank of America US High Yield Index 13.5% Credit Suisse Leveraged Loan Index 13.0% ASSETS UNDER MANAGEMENT.
Morgan Global High Yield Index 9.0% Bloomberg Barclays Municipal Bond Index 1.1% Bloomberg Barclays Global Aggregate Ex-U.S. Dollar Bond Index (4.2)% J.P. Morgan Emerging Markets Bond Index Plus 7.7% Bank of America US High Yield Index 8.2% Credit Suisse Leveraged Loan Index 9.1% ASSETS UNDER MANAGEMENT.
Rowe Price Group, our consolidated sponsored investment products, and the related eliminations required in preparing the statement. 2023 Cash flow attributable to: (in millions) T.
Rowe Price Group Inc., our consolidated investment products, and the related eliminations required in preparing the consolidated statement of cash flows. 2024 (in millions) Cash flow attributable to T. Rowe Price Group, Inc.
(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.
(4) This non-GAAP adjustment removes the impact the consolidated 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 investment products.
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.
(2) Includes $160.7 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.
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.
We expect to fund these cash commitments from future cash flows from operations. Our obligations under our deferred compensation liabilities are disclosed on our consolidated balance sheet with more information included in Note 12 and Note 17 to the consolidated financial statements. Our lease obligations are disclosed in Note 7 to the consolidated financial statements.
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.
Should conditions that led us to recognize these impairment charges worsen, additional impairments may be recognized in future periods. Page 41 Table of Contents Non-operating income (loss) Non-operating income was $486.3 million in 2024 compared to $504.1 million in 2023 and a non-operating loss of $425.5 million in 2022.
(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.
(5) This non-GAAP adjustment represents non-operating income (loss) and the net gains (losses) earned on the firm's investment portfolio that are not designated as economic hedges of the deferred compensation liabilities and that are not part of the cash and discretionary investment portfolio.
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.
Rowe Price Group $ 2,139.5 $ 1,750.1 $ 1,864.8 Less: net income allocated to outstanding restricted stock and stock unit holders 56.8 43.4 43.3 Adjusted net income allocated to common stockholders $ 2,082.7 $ 1,706.7 $ 1,821.5 CAPITAL RESOURCES AND LIQUIDITY. During 2024, stockholders’ equity attributable to T.
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.
For 2023, distribution and services costs were $289.9 million, a decrease of $11.6 million, or 3.8%, compared to 2022. 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 and SICAVs.
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.
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 51% 51% 46% 67% Fixed Income 48% 52% 55% 63% Multi-Asset 63% 63% 69% 82% All Funds 54% 56% 56% 70% % of U.S. mutual funds that outperformed passive peer median (2),(4) 1 year 3 years 5 years 10 years Equity 55% 47% 43% 55% Fixed Income 52% 52% 61% 63% Multi-Asset 55% 60% 68% 64% All Funds 54% 53% 56% 60% % of composites that outperformed benchmarks (5) 1 year 3 years 5 years 10 years Equity 39% 29% 40% 61% Fixed Income 60% 45% 56% 73% All Composites 48% 36% 46% 65% Page 34 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 57% 58% 49% 80% Fixed Income 66% 62% 64% 78% Multi-Asset 70% 68% 90% 94% All Funds 61% 61% 59% 83% % of U.S. mutual funds AUM that outperformed passive peer median (2),(4) 1 year 3 years 5 years 10 years Equity 64% 36% 29% 55% Fixed Income 68% 68% 85% 73% Multi-Asset 71% 58% 95% 95% All Funds 66% 43% 48% 66% % of composites AUM that outperformed benchmarks (5) 1 year 3 years 5 years 10 years Equity 50% 21% 42% 53% Fixed Income 65% 37% 47% 69% All Composites 52% 24% 43% 55% As of December 31, 2024, 54 of 90 (60.0%) of our rated U.S. mutual funds (across primary share classes) received an overall rating of 4 or 5 stars.
Our non-GAAP effective tax rates for 2023, 2022 and 2021 were 27.2% , 24.7%, 22.5%, r espectively. 20 Page 42 Table of Contents Our effective tax rate will continue to experience volatility in future periods due to, among other things, the impact on the stock-based compensation tax benefits recognized from market fluctuations in our stock price and timing of option exercises, changes in the mix of our earnings among countries with differing tax laws, and changes in the valuation allowance of foreign based deferred tax assets.
Page 43 Table of Contents Our effective tax rate will continue to experience volatility in future periods due to, among other things, the impact on the stock-based compensation tax benefits recognized from market fluctuations in our stock price and timing of option exercises, changes in the mix of our earnings among countries with differing tax laws, and changes in the valuation allowance of foreign-based deferred tax assets.
The non-GAAP basis adjusts for the impact of our consolidated sponsored investment products, the impact of market movements on the supplemental savings plan liability and related economic hedges, investment income related to certain other investments, acquisition-related amortization and costs, impairment charges, and certain nonrecurring charges and gains, if any. We completed the acquisition of OHA on December 29, 2021.
The non-GAAP basis adjusts for the impact of our consolidated investment products, the impact of market movements on the deferred compensation liabilities and related economic hedges, investment income related to certain other investments, acquisition-related amortization and costs, impairment charges, and certain nonrecurring charges and gains, if any.
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.
These costs were offset entirely by the distribution revenue we earn and report in net revenues: 12b-1 revenue is recognized in administrative, distribution, and servicing fees for the Advisor and R share classes of the U.S. mutual funds and investment advisory fees for our international products.
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.
Rowe Price Group, Inc. increased from $9.5 billion to $10.3 billion, and tangible book value increased to $7.5 billion at December 31, 2024 from $6.5 billion at December 31, 2023. Sources of Liquidity We have ample liquidity, including cash and investments in T.
These carried interest entities hold interests in general partners of affiliated private investment funds that are also VIEs; however, the carried interest entities are not the primary beneficiaries to these investment funds.
We consolidate the entities that hold the interest in the general partners; however, the entities are not the primary beneficiaries of the affiliated private investment funds.
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.
Further, we expended $334.5 million in 2024 to repurchase nearly 3.0 million shares, or 1.3%, of our outstanding common stock at an average price of $112.57 per share. These dividends and repurchases were expended using existing cash balances and cash generated from operations.
The 2023 amount includes an increase of $223.2 million in accrued carried interest from investments in affiliated investment funds, partially offset by $61.3 million of non-cash amortization and impairments associated with the difference between the assets' fair value and carrying value on the date they were acquired.
This amount includes an increase of $223.2 million in accrued carried interest, partially offset by $61.3 million of non-cash amortization and impairments related to the difference in the acquisition closing date fair value and the carrying value on the date they were acquired.
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.
The vast majority of these additional contributions will be made to investment partnerships in which we have Page 51 Table of Contents 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. Rowe Price committed $500 million to fund OHA product launches through 2026.
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 and may be calculated differently by other companies. The following schedules reconcile certain U.S. GAAP financial measures for each of the last three years. 2024 (in millions, except per-share amount) Operating expenses Net operating income Non-operating income (loss) Provision (benefit) for income taxes (6) Net income attributable to T. Rowe Price Group, Inc. Diluted earnings per share (7) U.S.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

12 edited+2 added−1 removed2 unchanged
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.
Biggest changePage 55 Table of Contents (in millions) Fair value 12/31/2024 Potential lower value Potential loss Investments in sponsored products Discretionary investments $ 258.8 $ 232.9 $ 25.9 10 % Seed capital not consolidated 262.8 231.0 31.8 12 % Investments designated as an economic hedge of deferred compensation liabilities 992.8 859.1 133.7 13 % Investments in affiliated collateralized loan obligations 6.3 5.7 0.6 10 % Total $ 1,520.7 $ 1,328.7 $ 192.0 13 % Direct investment in consolidated investment products Discretionary investments $ 137.5 $ 123.8 $ 13.7 10 % Seed capital 870.7 775.2 95.5 11 % Investments designated as an economic hedge of deferred compensation liabilities 29.7 26.2 3.5 12 % Total $ 1,037.9 $ 925.2 $ 112.7 11 % Investment partnerships and other investments held at fair value $ 62.6 $ 55.7 $ 6.9 11 % Any losses arising from the change in fair value of investments in T.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk. EQUITY PRICE RISK. Our investments in sponsored investment products are carried at fair value, and, as such, these investments are subject to market risk. The following table presents the equity price risk from our investments in sponsored investment products.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk. EQUITY PRICE RISK. Our investments in sponsored investment products are carried at fair value, and, as such, these investments are subject to market risk. The following table presents the equity price risk from our investments.
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%.
The potential future loss of value, before any income tax benefits, of these investments at December 31, 2024 was determined by using the lower of each product’s lowest net asset value per share during 2024 or its net asset value per share at December 31, 2024, reduced by 10%.
In addition, investment holdings may be altered from time to time in response to changes in market risks and other factors, as management deems appropriate. We do not actively manage the market risk related to our seed capital investments.
In addition, investment holdings may be altered from time to time in response to changes in market risks and other factors, as management deems appropriate. We do not actively hedge the market risk related to our seed capital investments.
Rowe Price products would result in a corresponding decrease, net of tax, in our net income attributable to T. Rowe Price Group. The direct investment in consolidated sponsored investment products represents our portion of the net assets of the product.
Rowe Price products would result in a corresponding decrease, net of tax, in our net income attributable to T. Rowe Price Group, Inc. The direct investment in consolidated investment products represents our portion of the net assets of the consolidated investment product.
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.
Investments in our sponsored investment 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.
Upon consolidation of these products, our direct investment is eliminated, and the net assets of the products are combined in our consolidated balance sheet, together with redeemable non-controlling interests, which represents the portion of the products that is owned by unrelated third-party investors.
Upon consolidation of these products, our direct investment is eliminated, and the net assets of the products are combined in our consolidated balance sheet, together with redeemable non-controlling interests, which represents the portion of the products that is owned by unrelated third-party investors. Further, we have investments that are used to economically hedge the change in our deferred compensation liabilities.
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.
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 (loss) and the carrying amount of our investment. We had a cumulative translation loss, net of tax, of $49.5 million at December 31, 2024, related to our investment in UTI.
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.
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.
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
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, 2024, related to cash and non-consolidated investments of $230.1 million that are denominated in foreign currencies.
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.
Since we are hedging the liabilities, the impact on our net income attributable to T. Rowe Price Group, Inc. would result from any ineffectiveness of this economic hedge. CURRENCY TRANSLATION RISK. Certain of our investments, including a few consolidated 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).
Our most significant exposure relates to the translation of the financial statements of our equity method investment in UTI ($173.5 million at December 31, 2024). UTI's financial statements are denominated in Indian rupees ("INR") and are translated to USD each reporting period.
Removed
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.
Added
Additionally, the underlying holdings of our assets under management are also subject to market risk, which may arise from changes in equity prices, credit ratings, foreign currency exchange rates, and interest rates.
Added
We do not believe that foreign currency fluctuations materially affect our results of operations. Page 56 Table of Contents

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