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What changed in T. Rowe Price's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of T. Rowe Price's 2024 and 2025 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 2025 report.

+394 added−399 removedSource: 10-K (2026-02-13) vs 10-K (2025-02-14)

Top changes in T. Rowe Price's 2025 10-K

394 paragraphs added · 399 removed · 324 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

57 edited+16 added−13 removed23 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, 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.
Biggest changeEquity Growth Core Value Concentrated Integrated (Quantitative, Fundamental, Custom Solutions) Impact U.S.: All-Cap, Large-Cap, Mid-Cap, Small-Cap, Sectors, Tax Efficient Large-Cap, Mid-Cap, Small-Cap, Tax Efficient Large-Cap, Mid-Cap, Small-Cap, Tax Efficient 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, Emerging Markets Large-Cap Large-Cap, Regional, Emerging Markets Large-Cap, Regional Large-Cap (Core) Large-Cap Fixed Income Cash Low Duration High Yield / Bank Loans Government Securitized 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 Global / International: N/O N/O Euro High Yield, High Income, Global High Yield Global Government Bond N/O Investment Grade Credit Multi-Sector Emerging Markets Municipal (Tax-Free) Impact U.S.: Investment Grade, Corporate Income Bond QM Bond, Core Bond, Core Plus, Dynamic Credit, Investment Grade Core, Total Return N/O High Yield, Intermediate Muni, Intermediate, Long-Term, Short/Intermediate N/O Global / International: Euro Investment Grade Corporate, Global Investment Grade Corporate Dynamic Global Bond, Global Multi-Sector, Global Aggregate, International Bond, Euro Aggregate Bond, Corporate, Corporate High Yield, Dynamic Emerging Markets Bond, 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 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, Hong Kong, Japan, and Singapore.
Additionally, fund shareholders must approve material changes to these investment management agreements. Each agreement automatically terminates in the event of its assignment (as defined in the Investment Company Act) and, generally, either party may terminate the agreement without penalty after a 60-day notice.
Additionally, fund shareholders must approve material changes to these investment management agreements. Each fund agreement automatically terminates in the event of its assignment (as defined in the Investment Company Act) and, generally, either party may terminate the agreement without penalty after a 60-day notice.
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.
Our strategies are designed to meet the varied and changing needs 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.
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.
The other sponsored investment 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., exchange traded funds, affiliated private investment funds, business development companies, and sponsored collateralized loan obligations.
We introduce new strategies, investment vehicles, or other products to complement and expand our investment offerings, to respond to competitive developments in the financial marketplace, and to meet the changing needs of our clients.
We introduce new strategies, investment vehicles, and other products to complement and expand our investment offerings, to respond to competitive developments in the financial marketplace, and to meet the changing needs of our clients.
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.
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 products have been aggregated and presented in this category and not reported in the equity and fixed income rows.
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.
Additionally, fee 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 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 alternatives products, the investment term.
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.
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 55% 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 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.
We compete with brokerage and investment banking firms, insurance companies, banks, traditional and alternatives 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.
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.
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, 2025.
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.
We earn income 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.
(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.
(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 Page 3 Table of Contents included.
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.
Rowe Price complex; transfer agent services for defined contribution retirement plans investing in our sponsored U.S. mutual funds; brokerage; trust services; and other advisory services. Distribution and Servicing Fees 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.
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 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.
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.
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 identify and actively invest in opportunities to help people thrive in an evolving world.
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.
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. Page 9 Table of Contents COMPETITION. As a member of the financial services industry, we are subject to substantial competition in all aspects of our business.
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, .
Mutual Funds x x x x Collective Investment Trusts x 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 x Subadvised Accounts x x x x Separate Accounts x x x x x SICAVs (2) / FCPs (3) x 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 Interval Funds x x Page 6 Table of Contents (1) Includes both model delivery and manager traded SMAs, .
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.
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.
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.
This 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.
Page 4 Table of Contents The following tables set forth our broad investment capabilities as of December 31, 2024.
Page 4 Table of Contents The following tables set forth our broad investment capabilities as of December 31, 2025.
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.
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, interval funds, models, and collateralized loan obligations (CLOs).
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.
Unfunded capital commitments of $21.6 billion at December 31, 2025, $16.2 billion at December 31, 2024, and $11.6 billion at December 31, 2023 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.
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.
Additionally, we invest our capital in certain alternatives 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, 2025.
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.
These performance-based fees are recognized and reported separately in the consolidated statement of income when performance returns exceed the stated hurdle at the end of the performance period, which can lead to an uneven recognition pattern year-to-year. We distribute certain of our sponsored products through distribution agents and financial intermediaries.
We compete with other providers of investment advisory services based primarily on the availability and objectives of the investment products offered, investment performance, fees and related expenses, and the scope and quality of investment advice and other client services. We have and will continue to face significant competition from passive oriented investment strategies.
We compete with other providers of investment advisory services based primarily on the availability and objectives of the investment products offered, investment performance, fees and related expenses, and the scope and quality of investment advice and other client services. We have and will continue to face significant competition from passive-oriented investment strategies, which have taken market share from active managers.
Specifically, information in our sustainability report is not incorporated by reference into this Form 10-K. The SEC maintains a website that contains the materials we file with the SEC at www.sec.gov.
Specifically, information in our sustainability report is not incorporated by reference into this Form 10-K. The SEC maintains a website that contains the materials we file with the SEC at www.sec.gov. Page 11 Table of Contents
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.
Generally, we ensure the investment product has a sustainable level of assets from unrelated investors before we consider redemption of our seed capital investment in order to maintain the product's net asset value and its performance record. At December 31, 2025, we had seed capital investments in our products of $1.1 billion.
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.
These administrative services are provided by several of our subsidiaries and include mutual fund Page 7 Table of Contents transfer agent, fund/product accounting, distribution, and shareholder services; recordkeeping services for defined contribution retirement plans investing in our sponsored vehicles and vehicles outside the T.
We also provide certain investment advisory clients with related administrative services, including distribution, mutual fund transfer agent, accounting, and shareholder services; participant recordkeeping and transfer agent services for defined contribution retirement plans; brokerage; trust services; and non-discretionary advisory services through model delivery.
We also provide certain investment advisory clients with related administrative services, including distribution, mutual fund transfer agent, accounting, and shareholder services; participant recordkeeping and transfer agent services for defined contribution retirement plans; brokerage; trust services; and other advisory services.
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.
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 60 countries around the world.
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.
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 markets where we have existing business by investing more in resources, products, partnerships, and marketing. • Broaden our reach in the private and alternatives market by leveraging our distribution channels, expanding our investment capabilities, and blending our traditional capabilities with alternatives. • Grow and diversify our business through innovative global partnerships. • Enhance our relationships with clients and renew our individual investor base by investing in our ability to provide exceptional service and unique solutions. • Strengthen our distribution technology to enhance the digital client experience and client reporting. • Attract and retain top talent and enable effective 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.
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.
Before we introduce a new strategy, we must be confident 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 product receiving client assets.
State of Maryland, Office of Financial Regulation - T. Rowe Price Trust Company Outside the U.S. Financial Conduct Authority - T. Rowe Price International - T. Rowe Price UK - Oak Hill Advisors (Europe) - OHA (UK) Securities and Futures Commission - T. Rowe Price Hong Kong - Oak Hill Advisors (Hong Kong) Monetary Authority of Singapore - T.
State of Maryland, Office of Financial Regulation - T. Rowe Price Trust Company Page 8 Table of Contents Regulator T. Rowe Price Entity Outside the U.S. Financial Conduct Authority - T. Rowe Price International - Oak Hill Advisors (Europe) - T. Rowe Price UK - OHA (UK) Securities and Futures Commission - T.
Rowe Price Singapore Several provincial securities commissions in Canada - T. Rowe Price (Canada) Commission de Surveillance du Secteur Financier - T. Rowe Price (Luxembourg) Management Sàrl - OHA Services Sàrl Australian Securities and Investments Commission - T. Rowe Price Australia - Oak Hill Advisors (Australia) Pty Japan Financial Services Agency - T.
Rowe Price Hong Kong - Oak Hill Advisors (Hong Kong) Monetary Authority of Singapore - T. Rowe Price Singapore Several provincial securities commissions in Canada - T. Rowe Price (Canada) Commission de Surveillance du Secteur Financier - T. Rowe Price (Luxembourg) Management Sàrl - OHA Services Sàrl Australian Securities and Investments Commission - T.
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.
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, and is recognized as compensation expense in the consolidated statement of income. ADMINISTRATIVE, DISTRIBUTION, SERVICING, AND OTHER FEES.
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”).
We are subject to various securities/financial services, compliance, corporate governance, disclosure, privacy, cybersecurity, technology and artificial intelligence, 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.
Rowe Price Group, Inc. corporate holding company structure was established in 2000. Our common stock trades on the NASDAQ Global Select Market under the symbol "TROW". Our core capabilities have enabled us to deliver excellent operating results since our initial public offering.
Rowe Price Group corporate holding company structure was established in 2000. Our common stock trades on the NASDAQ Global Select Market under the symbol "TROW". Our core capabilities have enabled us to deliver excellent operating results since our initial public offering. We maintain a strong corporate culture focused on delivering superior long-term investment performance and world-class service to our clients.
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.
As a premier global asset management organization with more than 85 years of experience, we provide investment solutions and a broad range of equity, fixed income, multi-asset, and alternatives capabilities to individuals, advisors, institutions, and retirement plan sponsors.
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.
The investment management industry continues to evolve and face challenging trends, including the shift in market share from traditional active strategies to passive products, persistent downward fee pressure, demand for lower cost investment vehicles, and an ever-changing regulatory landscape. Despite these trends, we believe there are significant opportunities that align to our core capabilities.
Registrations • Our subsidiaries providing transfer agent services, T. Rowe Price Services and T. Rowe Price Retirement Plan Services, are registered under the Securities Exchange Act of 1934. • T. Rowe Price Investment Services (TRPIS) is an SEC registered introducing broker-dealer and member of the Financial Industry Regulatory Authority ("FINRA") and the Securities Investor Protection Corporation.
Rowe Price Investment Services (TRPIS) is an SEC registered introducing broker-dealer and member of the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation.
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.
Investors domiciled outside the U.S. represented nearly 9% of total assets under management at the end of 2025. The following table outlines the five distribution channels and vehicles through which our assets under management are sourced as of December 31, 2025. Vehicle Retail Institutional Americas financial intermediaries EMEA & APAC financial intermediaries Individual U.S. investors on a direct basis U.S.
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.
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. The Capital Appreciation Strategy has been closed to new investors since 2014 and represents about 6% of total assets under management at December 31, 2025.
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.
We distribute our broad array of active investment solutions through a diverse set of distribution channels and vehicles to meet the needs of our clients globally. These vehicles include an array of U.S. mutual funds, collective investment trusts, exchange-traded funds, subadvised funds, separately managed accounts, and other sponsored products.
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.
As of December 31, 2025, we employed 7,773 associates, a decrease of 4.7% from the 8,158 associates employed at the end of 2024. We also add temporary and part-time personnel to meet periodic and special project demands.
Rowe Price Japan Swiss Financial Market Supervisory Authority - T. Rowe Price (Switzerland) Serving the needs of retirement savers is an important focus of our business. Such activities are subject to regulators such as the U.S. Department of Labor, and applicable laws and regulations including the Employee Retirement Income Security Act of 1974 ("ERISA").
Such activities are subject to regulators such as the U.S. Department of Labor, and applicable laws and regulations including the Employee Retirement Income Security Act of 1974 (ERISA). Registrations • Our subsidiaries providing transfer agent services, T. Rowe Price Services and T. Rowe Price Retirement Plan Services, are registered under the Securities Exchange Act of 1934. • T.
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.
We also engage and retain Page 10 Table of Contents associates by offering opportunities for them to expand their experience and grow their skills, while fostering an environment that allows them to be and bring their best selves to work every day.
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.
In the U.S., the UK, and Canada, we offer associates backup childcare and eldercare, and in the APAC region, a working group provides support for working parents and caregivers. 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.
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.
The assets under management in our target date retirement products totaled $561.4 billion at December 31, 2025, or 31.6% of our managed assets at December 31, 2025, compared to 29.6% at the end of 2024. 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.
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 external research Page 5 Table of Contents in a supportive capacity as well as data, analysis, and commentary from private economists, political observers, government experts, and market analysts.
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.
Our culture of collaboration and inclusion enables us to identify and challenge our best ideas to arrive at well-informed decisions for our clients. To attract and retain top talent, we invest in the associate experience by creating individual and firmwide training and development opportunities and providing competitive and regionally specific benefits and programs that promote our associates’ health and wellness.
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).
Our strategic investments include hiring investment and distribution professionals, adopting new technologies, offering new products, and growing and diversifying our business through innovative global partnerships. 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), T.
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.
Rowe Price International Ltd (TRPIL), and Oak Hill Advisors (OHA). 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.
(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.
(4) Retail includes assets sourced through our direct-marketed business and financial intermediaries. United States U.S. Defined Contribution APAC, EMEA, Canada Other Retirement Other Accounts In 2025, our target date retirement products experienced net cash inflows of $5.2 billion.
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.
We provide resources and benefits that support associates’ work-life balance to ensure a supportive workplace for all. In addition to generous vacation time, our firm offers fully paid leave to all new parents, as well as adoption assistance for associates looking to expand their families.
As a result, such products have taken market share from active managers. While we cannot predict how much market share these competitors will continue to gain, we believe there will always be demand for good active management investment products.
While we cannot predict how much market share passive competitors will continue to gain, we believe there will always be demand for good active management. At the same time, we have broadened our offerings to include options that incorporate passive components, giving clients greater choice and flexibility to meet their unique goals.
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.
At December 31, 2025, we had $1,775.6 billion in assets under management, an increase of $169.0 billion from the end of 2024. This increase in assets under management was driven by market appreciation, net of distributions not reinvested, of $216.7 billion, offset by net cash outflows of $56.9 billion.
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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.
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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: • Deliver exceptional outcomes for clients while sustaining our leadership position in retirement.
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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.
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At the same time, we have developed a broad and ongoing plan to further align our expense growth with our anticipated revenue growth, which will allow us to realign resources and continue investing in existing and future capabilities.
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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.
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Page 2 Table of Contents In 2025, we took several steps to execute on this plan, including targeted role eliminations, outsourcing and expanding some of our technology capabilities through trusted vendor partnerships, and the decision to exit certain owned buildings with plans to dispose of the properties in 2026.
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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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The impact of these actions has been recorded as a restructuring charge in the consolidated statements of income and is discussed in Item 7. These measures also help offset ongoing inflationary pressures on compensation and contractual spending.
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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.
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Beginning on July 1, 2025, assets under management include managed account - model delivery portfolios assets, which had $9.2 billion in assets as of that date, and are reflected in the increase from December 31, 2024.
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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.
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Administrative Services We provide certain ancillary administrative services to a range of clients, some of whom may engage us solely for these services.
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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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Rowe Price Australia - Oak Hill Advisors (Australia) Pty Japan Financial Services Agency - T. Rowe Price Japan Swiss Financial Market Supervisory Authority - T. Rowe Price (Switzerland) Isle of Man Financial Services Authority - T. Rowe Price Investment Management Serving the needs of retirement savers is an important focus of our business.
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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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Investing in Our People We empower our associates to achieve their goals and advance their careers by offering comprehensive, tailored learning opportunities that build essential skills and support our business priorities. Through various development opportunities—including in-person, virtual, and online training, as well as a tuition reimbursement program—we cultivate an environment where associates grow in ways that matter to them.
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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.
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We also foster leadership and strengthen our firm’s culture through robust mentorship and leadership development programs, with participation in our mentorship programs growing steadily since their formal launch in 2022. Additionally, associates can access a range of leadership development opportunities, including speaker events and development programs facilitated by industry experts. The T.
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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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Rowe Price Leadership Academies further support our associates’ growth by building key capabilities aligned with our leadership framework—Lead Outcomes, Lead Change, and Lead People and Culture—ensuring we maximize potential; drive client value; and build an engaged, accountable workforce.
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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.
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Our commitment to helping associates reach their full potential enables us to achieve a high level of internal mobility, with approximately one-third of open positions filled by current associates. Attracting and Retaining Talent Our talent acquisition team is continually strengthening our recruitment strategies to ensure we attract highly qualified candidates from diverse backgrounds and with a wide range of perspectives.
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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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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThese may include: • risks related to the potential illiquidity, valuation and disposition of such investments; • risks related to emerging and less established companies that have, among other things, short operating histories, not yet achieved or sustained profitability, new technologies and products, nascent control functions, quickly evolving markets and limited financial resources; Page 15 Table of Contents • credit risks, including interest-rate movements and an issuer’s ability to make principal and interest payments on the debt it issues; • risks related to investment in “distressed” securities, including abrupt and erratic market movements and above-average price volatility; • risks associated with a lack of diversification, such that any adverse change in one or a small number of issuers could have a material adverse effect on an investment product or client’s investments; • risks relating to the use of leverage, including as a result of changes in interest rates or an inability to timely obtain and effectively deploy leverage; • failures on the part of third-party managers, service providers or sub-contractors appointed in connection with investments or projects to adequately perform their contractual duties or operate in accordance with applicable laws; • exposure to stringent and complex foreign, federal, state and local laws, ordinances and regulations; • changes to the supply and demand for properties and/or tenancies; • risks related to the availability, cost, coverage and other limitations on insurance; and • the financial resources of tenants or loan counterparties; and contingent liabilities on disposition of investments.
Biggest changeThese may include: • risks related to the potential illiquidity, valuation, concentration and disposition of such investments; • risks related to emerging and less established companies that have, among other things, short operating histories, not yet achieved or sustained profitability, new technologies and products, nascent control functions, quickly evolving markets and limited financial resources; • credit risks, including interest-rate movements and an issuer’s ability to make principal and interest payments on the debt it issues; • risks related to investment in “distressed” securities, including abrupt and erratic market movements and above-average price volatility; • risks relating to the use of leverage, including as a result of changes in interest rates or an inability to timely obtain and effectively deploy leverage; • failures on the part of third-party managers, service providers or sub-contractors appointed in connection with investments or projects to adequately perform their contractual duties or operate in accordance with applicable laws; • exposure to stringent and complex foreign, federal, state and local laws, ordinances and regulations; • risks related to the availability, cost, coverage and other limitations on insurance; and • the financial resources of tenants or loan counterparties; and contingent liabilities on disposition of investments.
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.
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, confidentiality and security 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.
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.
As jurisdictions globally continue to develop legal frameworks on sustainability 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.
We maintain a system of internal controls designed to provide reasonable assurance that both inadvertent errors and fraudulent activity, including misappropriation of assets, fraudulent financial reporting, and unauthorized access to sensitive or confidential data, is either prevented or detected in a timely manner. We also leverage cloud-based solutions for the transmission and storage of data.
We maintain a system of internal controls designed to provide reasonable assurance that both inadvertent errors and fraudulent activity, including misappropriation of assets, fraudulent financial reporting, and unauthorized access to personal or confidential sensitive data, is either prevented or detected in a timely manner. We also leverage cloud-based solutions for the transmission and storage of data.
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.
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 net income.
Poor performance relative to other competing products tends to result in decreased sales and increased redemptions with corresponding decreases in our revenues. • General Financial Market Declines. We derive a significant portion of our revenues from advisory fees on managed investment portfolios.
Poor performance relative to other competing products tends to result in decreased sales and increased redemptions with corresponding decreases in our revenues. • General Financial Market Declines. We derive a significant portion of our revenues from advisory fees on managed investment products.
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.
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.
Legal and regulatory developments in the mutual fund, retirement and investment advisory industry could increase our regulatory burden, impose significant financial and strategic costs on our business, and cause a loss of, or impact the servicing of, our clients and fund shareholders.
Legal and regulatory developments in the mutual fund, retirement and investment advisory industry could increase our regulatory burden, impose significant financial and strategic costs on our business, and cause a loss of, or impact the servicing of, our clients and product shareholders.
Our foreign business operations are also subject to the following risks: • difficulty in managing, operating, and marketing our international operations; • the inability to transact in various investments or to repatriate the proceeds from our investments from countries outside the U.S.; • the potential nationalization of our property or that of the companies in our investment portfolios; • fluctuations in currency exchange rates which may result in substantial negative effects on assets under our management, revenues, expenses, and assets in our U.S. dollar based financial statements; and • significant adverse changes in international legal and regulatory environments.
Our foreign business operations are also subject to the following risks: • difficulty in managing, operating, and marketing our international operations; • the inability to transact in various investments or to repatriate the proceeds from our investments from countries outside the U.S.; • the potential nationalization of our property or that of the companies in our investment products; • fluctuations in currency exchange rates which may result in substantial negative effects on assets under our management, revenues, expenses, and assets in our U.S. dollar based financial statements; and • significant adverse changes in international legal and regulatory environments.
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.
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, resilient and secure technology to conduct or expand our operations or if our technology became inoperative or obsolete.
Within our investment portfolios, changes in weather patterns around the world can impact companies in which we invest on behalf of our clients. Weather pattern changes may cause investment professionals to re-evaluate investments in affected companies. Valuations may be impacted resulting in declines in asset values and potential loss of revenue.
Within our investment products, changes in weather patterns around the world can impact companies in which we invest on behalf of our clients. Weather pattern changes may cause investment professionals to re-evaluate investments in affected companies. Valuations may be impacted resulting in declines in asset values and potential loss of revenue.
This limited transparency increases the challenges associated with assessing the proper operation of AI technology, understanding and monitoring the capabilities of the AI technology developed by third parties, and, to that extent, are dependent in part on the manner in which those third parties develop and train their models, including risks arising from the inclusion of any unauthorized material in the training data for their models, and the effectiveness of the steps these third parties have taken to limit the risks associated with the output of their models, matters over which we may have limited visibility.
This limited transparency increases the challenges associated with assessing the proper operation of AI technology, appreciating the risks and monitoring the capabilities of the AI technology developed by third parties, and, to that extent, are dependent in part on the manner in which those third parties develop and train their models, including for example, risks arising from the inclusion of any unauthorized material in the training data for their models, and the effectiveness of the steps these third parties have taken to limit the risks associated with the output of their models, matters over which we may have limited visibility.
For example, any failure to properly safeguard and maintain personal data in connection with our use of AI creates risk of us violating privacy laws and regulations in jurisdictions we operate in, and could subject us to disclosure obligations, regulatory investigations, actions or fines, and litigation.
For example, any failure to properly safeguard and maintain personal data in connection with our use of AI creates potential risk of violating applicable privacy laws and regulations in jurisdictions we operate in, and could subject us to disclosure obligations, regulatory investigations, actions or fines, and litigation.
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.
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 General Data Protection Regulation (“GDPR”) and laws enacted by a growing number of U.S. states; cybersecurity; current and emerging technology, including AI and automated decision-making technologies; 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.
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.
Future changes to laws 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 and related regulations in the U.S. and the European Market Infrastructure Regulation in the EU.
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.
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, Page 21 Table of Contents • 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.
Should the technology operations on which we rely be compromised, we may have to make significant investments to upgrade, repair or replace our technology infrastructure or third-party service providers and may not be able to make such investments on a timely basis.
Should the technologies on which we rely be compromised, we may have to make significant investments to upgrade, repair or replace our technology infrastructure or third-party service providers and may not be able to make such investments on a timely basis.
If the investment performance of our managed investment portfolios is less than that of our competitors or applicable third-party benchmarks, we could lose existing and potential clients and suffer a decrease in assets under management.
If the investment performance of our managed investment products is less than that of our competitors or applicable third-party benchmarks, we could lose existing and potential clients and suffer a decrease in assets under management.
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.
In addition, acquisitions and related transactions involve risks, including unanticipated problems regarding integration Page 18 Table of Contents 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.
These decisions may result in additional legal challenges to regulations and guidance issued by federal regulatory agencies that we or the companies we invest in have relied on and intend to rely on in the future.
These decisions may result in additional legal challenges to regulations and guidance issued by federal regulatory agencies that we or the companies our products invest in have relied on and intend to rely on in the future.
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.
If a 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.
Future changes could require us to modify or curtail our investment offerings and business operations which may impact our expenses and profitability. Additionally, some laws and regulations may not directly apply to our business but may impact the capital markets, service providers, or have other indirect effects on our ability to provide services to our clients.
F uture changes could require us to modify or curtail our investment offerings and business operations which may impact our expenses and profitability. Additionally, some laws and regulations may not directly apply to our business but may impact the capital markets, service providers, or have other indirect effects on our ability to provide services to our clients.
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.
Investor interest in and the valuation of our fixed income and multi-asset investment products are affected by changes in as well as uncertainty about interest rates. • Geo-Political Exposure.
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 significant portion of our business operations are concentrated in the Baltimore, Maryland region; Colorado Springs, Colorado; Fort Worth, Texas; New York City, New York; and London, England.
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.
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.
Fee reductions may vary depending on strategy and product offerings, which could result in investment rebalancing or reallocation adversely impacting revenues and operating margins. The failure or negative performance of products offered by competitors may cause our products, which are similar, to be impacted irrespective of our performance.
Fee reductions may vary depending on strategy and product offerings, which could result in investment rebalancing or reallocation adversely impacting revenues and operating margins. Page 13 Table of Contents The failure or negative performance of products offered by competitors may cause our products, which are similar, to be impacted irrespective of our performance.
We are dependent on the effectiveness of the information and cybersecurity policies, procedures and capabilities we maintain to protect our systems and data.
We are dependent on the effectiveness of the information and cybersecurity policies, procedures and technology-based capabilities we maintain to protect our systems and data.
We communicate certain approaches regarding environmental, social, diversity, and other ESG-related matters in our regulatory filings or in other public disclosures. We could be criticized for the accuracy or completeness of the disclosure and for the scope or nature of such initiatives or approaches, or for any changes to them over time.
We communicate certain approaches regarding environmental, social, human capital, and other related matters in our regulatory filings or in other public disclosures. We could be criticized for the accuracy or completeness of the disclosure and for the scope or nature of such initiatives or approaches, or for any changes to them over time.
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.
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 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.
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, partnerships, any of which may impact our business.
Examinations and audits by tax authorities could result in additional tax payments for prior periods, which could impact our financial results. Based on the global nature of our business, from time to time we are subject to tax audits in various jurisdictions.
Page 16 Table of Contents Examinations and audits by tax authorities could result in additional tax payments for prior periods, which could impact our financial results. Based on the global nature of our business, from time to time we are subject to tax audits in various jurisdictions.
Furthermore, in recent years several governments have proposed or enacted policies, legislation, and executive actions relating to ESG and DEI initiatives for the private sector. More recently, interested parties on both sides of the debate have sought to utilize the courts, social media and other means to change the practices of companies.
Furthermore, in recent years several governments have proposed or enacted policies, legislation, and executive actions relating to sustainability and human capital initiatives for the private sector. More recently, interested parties on both sides of the debate have sought to utilize the courts, social media and other means to change the practices of companies.
Any redemptions and other withdrawals from, or shifting among, our investment portfolios could reduce our assets under management.
Any redemptions and other withdrawals from, or shifting among, our investment products could reduce our assets under management.
Conversely, some U.S. states have adopted or proposed legislation or otherwise have taken official positions restricting or prohibiting state government entities from doing certain business with entities they believe are discriminating against particular industries or considering ESG factors in their investment processes and proxy voting.
Conversely, some U.S. states and foreign governments have adopted or proposed legislation or otherwise have taken official positions restricting or prohibiting government entities from doing certain business with entities they believe are discriminating against particular industries or considering sustainability factors in their investment processes and proxy voting.
Real or perceived conflicts between our clients’ interests and our own, as well as any fraudulent activity or other exposure of client assets or information, may impair our reputation and subject us to litigation or regulatory action.
Real or perceived conflicts Page 14 Table of Contents between our clients’ interests and our own, as well as any fraudulent activity or other exposure of client assets or information, may impair our reputation and subject us to litigation or regulatory action.
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.
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, 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 products 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 Page 17 Table of Contents • requiring substantial capital expenditures and operating expenses to remediate damage, replace our facilities, and restore our operations.
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.
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.
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.
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.
Our alternatives products include investments in private credit, real estate, and equity investments in private companies, which may expose us to new or increased risks and liabilities and to reputational harm.
Our alternatives products include investments in private credit, real estate, infrastructure and private companies, which may expose us to new or increased risks and liabilities and to reputational harm. Our alternatives products include investments in private credit, real estate, infrastructure and private companies, which may expose our investment products, clients and us to new or increased risks and liabilities.
We cannot assure that we will be able to attract or retain key personnel.
We cannot guarantee that we will be able to attract or retain key personnel.
Our international operations require us to comply with the legal and regulatory requirements of various foreign jurisdictions and expose us to political environments and risks that can compare less favorably than those in the United States.
Our international operations require us to comply with complex legal and regulatory requirements of various foreign jurisdictions that at times may be contradictory and expose us to political environments and risks that can compare less favorably than those in the United States.
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.
Additionally, over the past several years the pace Page 22 Table of Contents and scope of new rules, regulations, executive orders, directives, 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.
Changes in investing trends, particularly investor preference for passive or alternative investment products as well as increasing investor preference for environmentally and socially responsible investment products, and changes in retirement savings trends, may reduce interest in our products and may alter our mix of assets under management. • Interest Rate Changes.
Changes in investing trends, particularly investor preference for passive or alternatives investment products as well as changes in retirement savings trends, may reduce interest in our products and may alter our mix of assets under management. • Interest Rate Changes.
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.
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.
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.
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.
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.
These could be caused by investors reducing their investments in our products in general or in the market segments in which we focus; investors taking profits from their investments; product risk characteristics, which could cause investors to move assets to other investment managers; and investor and market sentiments. • Capacity Constraints.
The changing regulatory landscape may also impact a number of service providers that provide services to us and, to the extent such service providers alter their operations or increase their fees, it may impact our expenses or those of the products we offer. We may become involved in legal and regulatory proceedings that may not be covered by insurance.
The changing regulatory landscape may also impact a number of service providers that provide services to us and, to the extent such service providers alter their operations or increase their fees, it may impact our expenses or those of the products we offer.
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.
Furthermore, many aspects of the asset management industry are seeing increased regulatory activity and scrutiny, in particular related to transparency and unbundling of fees, inducements, conflicts of interest, risk management, cybersecurity, technology, privacy and data protection, sustainability, diversity, equity and inclusion, and compensation.
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.
All of our technology systems, including those provided or operated by third-party service providers, are not fully redundant and are vulnerable to disability or failures due to cyberattacks, natural disasters or extreme weather events, power failures, acts of war or terrorism, sabotage, coding errors, system outages, and other causes.
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.
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 and any insurance we have may not be sufficient to cover our liability which would impact our financial results.
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.
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.
Our expenses are subject to significant fluctuations that could materially decrease net income.
Page 15 Table of Contents Our expenses are subject to significant fluctuations that could materially decrease net income.
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.
A majority of our revenues are based on contracts with commingled vehicles that are subject to termination without cause and on short notice. We provide investment advisory, distribution, and other administrative services to commingled vehicles under various agreements. Investment advisory services are provided to each collective investment fund under individual investment management agreements, which can be terminated on short notice.
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.
Our managed investment products 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, recent events in Venezuela and the on-going conflicts in the Middle East), trade policies, wars or tariffs (including those imposed or threatened by the U.S. and retaliatory tariffs by U.S. trading partners), currency fluctuations, market volatility, illiquidity and capital controls, and changes in legislation related to ownership limitations. • Government Shutdown.
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.
An externally caused data security incident, such as a cyberattack, social engineering attacks (including phishing, impersonation and identity takeover attempts), virus, ransomware attack, denial-of-service attack, or an attack launched from within our systems could compromise the integrity of personal data of clients, personnel and other parties, as well as confidential client or competitive information and materially interrupt our business operations.
There also has been an increase in litigation and in regulatory investigations in the financial services industry in recent years, including client claims, class action suits, and government actions claiming substantial monetary damages and penalties.
From time to time, various claims against us arise in the ordinary course of business, including employment-related claims. There also has been an increase in litigation and in regulatory investigations in the financial services industry in recent years, including client claims, class action suits, and government actions claiming substantial monetary damages and penalties.
We have registered certain subsidiaries with the CFTC, subjecting us to additional regulatory requirements and costs, but also providing us additional flexibility to utilize such products.
We have registered certain subsidiaries with the CFTC, subjecting us to additional regulatory requirements and costs, but also providing us with additional flexibility to utilize such products. Nonetheless, there are still certain limitations on our investment products due to CFTC rules.
A decrease in the value of our assets under management, or an adverse change in their composition, particularly in market segments where our assets are concentrated, could have a material adverse effect on our investment advisory fees and revenues.
Uncertainty regarding the duration or frequency of government shutdowns may contribute to market volatility and increased redemptions from our products. A decrease in the value of our assets under management, or an adverse change in their composition, particularly in market segments where our assets are concentrated, could have a material adverse effect on our investment advisory fees and revenues.
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.
Furthermore, while we have in place robust and well-established plans for operational resiliency and business continuity, 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 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.
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 Page 25 Table of Contents disclosure obligations, regulatory investigations, actions or fines, and litigation, and our insurance may not be sufficient to cover our liability which would impact our financial results.
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.
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.
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.
Our fees vary depending on product offering, and our assets under management may be overly concentrated within limited market segments or strategies, which could impact our revenues should these fees be impacted. • Investor Mobility. Our investors may generally withdraw their funds at any time, without advance notice and with little to no significant penalty.
Many of these transactions expose us or such client portfolios to credit risk in the event of default of its counterparty. While we regularly conduct assessments of counterparty risks, the risk of non-performance by such parties is subject to sudden swings in the financial and credit markets.
While we regularly conduct assessments of counterparty risks, the risk of non-performance by such parties is subject to sudden swings in the financial and credit markets. Such non-performance could produce a financial loss for us or the products we manage.
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.
Page 23 Table of Contents • 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 technological breakdown or disruption in services could also interfere with our ability to comply with financial reporting and controls and other regulatory requirements, exposing us to regulatory action and liability to our clients.
A technological breakdown or disruption in Page 20 Table of Contents services could also interfere with our ability to comply with financial reporting and controls and other regulatory requirements, exposing us to regulatory action and liability to our clients, potentially resulting in financial losses that may not be sufficiently mitigated by insurance coverage.
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.
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.
Poor performance relative to other competing products tends to result in decreased sales and increased redemptions with corresponding decreases in our revenues, which may have a material adverse effect on us. The soundness of other financial services institutions could adversely affect us or the client portfolios we manage.
Poor performance relative to other competing products tends to result in decreased sales and increased redemptions with corresponding decreases in our revenues, which may have a material adverse effect on us. 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.
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.
We employ hedging strategies related to our deferred compensation 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 net income.
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.
Actions taken by applicable regulatory or legislative bodies may impact our business activities and increase our costs. • The Commodity Futures Trading Commission (CFTC) regulations may limit the ability of certain investment products to use futures, swaps, and other derivatives.
Financial services institutions are interrelated as a result of trading, clearing, counterparty or other relationships. We, and the client portfolios that we manage, have exposure to many different counterparties, and routinely execute transactions with counterparties in the financial services industry.
We, and the client portfolios that we manage, have exposure to many different counterparties, and routinely execute transactions with counterparties in the financial services industry. Many of these transactions expose us or such client portfolios to credit risk in the event of default of its counterparty.
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.
In addition, the Board of each T. Rowe Price U.S. mutual fund and ETF must annually approve the terms of the investment management and service agreements.
These requirements have introduced operational complexity and additional costs to derivatives portfolios. • New laws or regulations involving ESG integration and disclosure may materially impact the asset management industry.
These requirements have introduced operational complexity and additional costs to derivatives products. • New laws or regulations involving sustainability integration and disclosure may materially impact the asset management industry, including the EU's Sustainable Finance Disclosure Regulation, the EU’s Corporate Sustainability Reporting Directive, and similar initiatives proposed or adopted by various U.S. states.
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.
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.
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.
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. The soundness of other financial services institutions could adversely affect us or the client portfolios we manage. Financial services institutions are interrelated as a result of trading, clearing, counterparty or other relationships.
We are subject to regulatory and governmental inquiries and civil litigation. An adverse outcome of any such proceeding could involve substantial financial penalties and costs. From time to time, various claims against us arise in the ordinary course of business, including employment-related claims.
Page 24 Table of Contents We may become involved in legal and regulatory proceedings that may not be covered by insurance. We are subject to regulatory and governmental inquiries and civil litigation. An adverse outcome of any such proceeding could involve substantial financial penalties and costs.
Removed
Regulatory inquiries and rumors can tarnish or substantially damage our reputation, even if those inquiries are satisfactorily addressed. For example, ESG issues have been the subject of increased focus by regulators, clients and other stakeholders.
Added
The U.S. federal government periodically experiences funding gaps that result in partial or complete shutdowns of government operations. A prolonged shutdown could adversely impact the U.S. economy, financial markets, and our business directly and indirectly. During a shutdown, many federal agencies, such as the SEC, suspend or delay regulatory approvals.
Removed
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.
Added
A delay in the approval of new products Page 12 Table of Contents which we intend to offer could materially impact our performance and the timing with which we begin to attract investors. Additionally, a shutdown could have broader negative effects on consumer and business confidence, the financial markets, and the overall economy.
Removed
These differences pose challenges for us to manage divergent goals and preferences, and increase the risk that any action or lack thereof by us concerning ESG, or any actual or perceived failure to adequately address the ESG expectations will be viewed negatively by some stakeholders, which could adversely impact our reputation and business.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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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.
Biggest changeDuring the year ended December 31, 2025, no cybersecurity incident 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; however the scope and impact of any future incident cannot be predicted. See “Item 1A.
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.
The Enterprise Risk team provides guidance and support in identifying, assessing, and monitoring all aspects of risk 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.
Within Global Technology, Enterprise Security is responsible for maintaining security policies, standards, and guidelines and routinely works with our Enterprise Risk, Compliance, Internal Audit, and other key technology and corporate stakeholders to establish security controls, enforce them, and monitor their adherence on an ongoing basis.
Within TDO, Enterprise Security is responsible for maintaining security policies, standards, and guidelines and routinely works with our Enterprise Risk, Compliance, Internal Audit, and other key technology and corporate stakeholders to establish security controls, enforce them, and monitor their adherence on an ongoing basis.
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.
Our CEO has ultimate responsibility for developing strategy and overseeing execution to meet the firm’s objectives. The CEO has delegated to our Chief Technology Officer (CTO) oversight of this operational execution. The CTO has several leaders within the Technology organization who develop and oversee the firm’s risk management, technology, and information security practices.
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.
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.
In addition, OHA has established an independent risk committee, which includes responsibilities for prompt escalation of key risks and incidents such as cybersecurity to the T. Rowe Price CRO. T. Rowe Price maintains documented Enterprise Incident Management and Reporting Policies and Procedures, outlining responsibilities and requirements for escalation of various types of incidents, including cybersecurity threats and incidents.
In addition, OHA has established an independent risk committee, which includes responsibilities for prompt escalation of key risks and incidents such as cybersecurity to the T. Rowe Price CRO. Page 26 Table of Contents T.
Global Technology and Business Unit management are also responsible for implementing internal controls to manage risks from cybersecurity threats to an appropriate level and in line with the firm’s risk appetite. Cybersecurity risks are managed across all lines of business, requiring support and participation across all levels in the organization.
These procedures incorporate incident materiality determination within senior executive levels and operate firm-wide. Global Technology and Business Unit management are also responsible for implementing internal controls to manage risks from cybersecurity threats to an appropriate level and in line with the firm’s risk appetite.
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.
Risk Factors–Technology Risks” for more information on how a material cybersecurity incident may impact us.
These executive leaders play a critical role in cybersecurity risk management and strategy, as further described below.
These executive leaders play a critical role in cybersecurity risk management and strategy, as further described below. The firm has a unified Technology, Data, and Operations (TDO) organization to enhance alignment, efficiency, and innovation across global business functions.
Our process is designed to investigate incidents efficiently, identify root cause, communicate with the affected parties as appropriate, spot trends, and recommend improvements to mitigate risk. These procedures incorporate incident materiality determination within senior executive levels and operate firm-wide.
Rowe Price maintains documented Enterprise Incident Management and Reporting Policies and Procedures, outlining responsibilities and requirements for escalation of various types of incidents, including cybersecurity threats and incidents. Our process is designed to investigate incidents efficiently, identify root cause, communicate with the affected parties as appropriate, spot trends, and recommend improvements to mitigate risk.
Added
Under this TDO model, technology, data, and operational capabilities have been integrated to drive modernization, accelerate execution, and strengthen collaboration across the enterprise.
Added
Cybersecurity risks are managed across all lines of business, requiring support and participation across all levels in the organization.
Added
We have previously been the target of cybersecurity attacks and expect such attempts to continue, potentially with more frequency or sophistication.

Item 2. Properties

Properties — owned and leased real estate

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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.
Biggest changeItem 2. Properties. We have offices in 17 markets around the world, including the U.S. Our new corporate headquarters, which we moved to in early 2025, is located in the Harbor Point area of Baltimore, Maryland, in approximately 550,000 square feet of leased office space.
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.
Information concerning our anticipated capital expenditures in 2026 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, 2025, is set forth in Note 7 to our audited consolidated financial statements in Item 8. of this Form 10-K.
We lease certain offices in the U.S., including offices in New York City, our business operations recovery site in Maryland, and offices in Fort Worth, San Francisco, Washington D.C. and Philadelphia. We lease all our offices outside the U.S., with London and Hong Kong being our largest.
Page 27 Table of Contents We lease certain offices in the U.S., including offices in New York City, our business operations recovery site in Maryland, and offices in Fort Worth, San Francisco, Washington D.C. and Philadelphia. We lease all our offices outside the U.S., with London and Hong Kong being our largest.
Our operating and servicing activities are largely conducted at owned facilities in campus settings comprising 1.1 million square feet on two parcels of land in close proximity to Baltimore in Owings Mills, Maryland, and about 290,000 square feet in Colorado Springs, Colorado. We also maintain a nearly 60,000 square foot technology support facility in Hagerstown, Maryland.
Our operating and servicing activities are largely conducted at owned facilities in campus settings in close proximity to Baltimore in Owings Mills, Maryland and Colorado Springs, Colorado.
Removed
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.
Added
In 2025, we made the decision to exit two of the seven buildings in Owings Mills, which will reduce our occupied space to 708,000 square feet, and and about 290,000 square feet in Colorado Springs. We also maintain a nearly 60,000 square foot technology support facility in Hagerstown, Maryland.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeJackson (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.
Biggest changeJackson (63), 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. Josh B. Nelson (48), Head of Global Equity since 2025, Head of U.S. Equity from 2022 to 2024, Associate Head of U.S.
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.
Arif Husain (53), 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.
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.
Sharps (54), 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.
Equity 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.
Equity in 2021, Director of Equity Research North America from 2019 to 2021, and a Vice President since 2007. David Oestreicher (58), 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.
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.
August (64), 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.
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.
Large-Cap Equity Growth Strategy from 2001 to 2016, and a Vice President from 2001 to 2021. Jennifer B. Dardis (52), Chief Financial Officer and Treasurer since 2021, Head of Finance in 2021, Head of Corporate Strategy from 2016 to 2021, and a Vice President since 2010. Glenn R.
Item 4. Mine Safety Disclosures. Not applicable. Information about our Executive Officers. The following information includes the names, ages, and positions of our executive officers as of February 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.
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 13, 2026. There are no arrangements or understandings pursuant to which any person serves as an officer. The first ten individuals are members of our management committee. Robert W.
Hiebler (49), Principal Accounting Officer since 2010, Controller since 2020 and a Vice President since 2009. Page 29 Table of Contents PART II
Hiebler (50), Principal Accounting Officer since 2010, Corporate Controller since 2020 and a Vice President since 2009. Page 29 Table of Contents PART II
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.
Sebastien Page (49), Head of Global Multi-Asset and a Vice President since 2015 and Chief Investment Officer since 2022. Dorot hy C. Sawyer (58 ), 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. Eric L. Veiel (53), Head of Global Investments and Chief Investment Officer since 2024.
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. Page 28 Table of Contents Eric L. Veiel (54), Head of Global Investments and Chief Investment Officer since 2024.
Removed
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.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

6 edited+0 added−3 removed1 unchanged
Biggest changeShares repurchased by us in a quarter may include repurchases conducted pursuant to publicly announced board authorizations, outstanding shares surrendered to the firm to pay the exercise price in connection with swap exercises of employee stock options and shares withheld to cover the minimum tax withholding obligation associated with the vesting of restricted stock awards.
Biggest changeMonth Total number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced program Maximum number of shares that may yet be purchased under the program October 489,730 $ 104.03 489,730 13,078,647 November 456,981 $ 101.11 456,981 12,621,666 December 419,820 $ 104.06 419,820 12,201,846 Total 1,366,531 $ 103.06 1,366,531 Shares repurchased by us in a quarter may include repurchases conducted pursuant to publicly announced board authorizations, outstanding shares surrendered to the firm to pay the exercise price in connection with swap exercises of employee stock options and shares withheld to cover the minimum tax withholding obligation associated with the vesting of restricted stock awards.
"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.
"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 2025.
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.
Common stock owned outright by our associates and directors, combined with outstanding vested stock options and unvested restricted stock awards, total nearly 5% of our outstanding stock and outstanding vested stock options at December 31, 2025.
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.
Dividends per share during the past two years were: 1st quarter 2nd quarter 3rd quarter 4th quarter 2025 $ 1.27 $ 1.27 $ 1.27 $ 1.27 2024 $ 1.24 $ 1.24 $ 1.24 $ 1.24 See Part III, Item 12.
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.
Authorization dates 12/31/2024 Total number of shares purchased Maximum number of shares that may yet be purchased at 12/31/2025 March 2020 3,377,353 (3,377,353) — December 2024 15,000,000 (2,798,154) 12,201,846 18,377,353 (6,175,507) 12,201,846 We have 823 stockholders of record and approximately 502,000 beneficial stockholder accounts held by brokers, banks, and other intermediaries holding our common stock.
The following table details the changes in and status of the Board of Directors’ outstanding publicly announced authorization.
Of the total number of shares purchased during the fourth quarter of 2025, all were part of a publicly announced program. The following table details the changes in and status of the Board of Directors’ outstanding publicly announced authorization.
Removed
Month Total number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced program (1) Maximum number of shares that may yet be purchased under the program October 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.
Removed
The share repurchase program does not have an expiration date.
Removed
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.

Item 7. Management's Discussion & Analysis

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

151 edited+41 added−38 removed54 unchanged
Biggest changeNet revenues 2024 compared to 2023 2023 compared to 2022 (in millions) 2024 2023 2022 $ Change % Change (1) $ Change % Change (1) Investment advisory fees (2) Equity $ 3,864.7 $ 3,442.3 $ 3,758.4 $ 422.4 12.3 % $ (316.1) (8.4) % Fixed income, including money markets 410.7 400.4 426.3 10.3 2.6 % (25.9) (6.1) % Multi-asset 1,814.1 1,583.4 1,508.9 230.7 14.6 % 74.5 4.9 % Alternatives 310.2 283.4 269.1 26.8 9.5 % 14.3 5.3 % 6,399.7 5,709.5 5,962.7 690.2 12.1 % (253.2) (4.2) % Performance-based advisory fees (2) 59.3 38.2 6.4 21.1 55.2 % 31.8 n/m Capital allocation-based income 46.6 161.9 (54.3) (115.3) n/m 216.2 n/m Administrative, distribution, and servicing fees Administrative fees 498.8 467.5 481.4 31.3 6.7 % (13.9) (2.9) % Distribution and servicing fees 89.2 83.4 92.2 5.8 7.0 % (8.8) (9.5) % 588.0 550.9 573.6 37.1 6.7 % (22.7) (4.0) % Net revenues $ 7,093.6 $ 6,460.5 $ 6,488.4 $ 633.1 9.8 % $ (27.9) (0.4) % Average AUM (in billions): Equity $ 804.3 $ 705.2 $ 763.6 $ 99.1 14.1 % $ (58.4) (7.6) % Fixed income, including money market 178.6 169.3 173.4 9.3 5.5 % (4.1) (2.4) % Multi-asset 529.0 442.3 418.7 86.7 19.6 % 23.6 5.6 % Alternatives 50.0 45.5 42.7 4.5 9.9 % 2.8 6.6 % Average AUM $ 1,561.9 $ 1,362.3 $ 1,398.4 $ 199.6 14.7 % $ (36.1) (2.6) % Ending AUM (in billions) $ 1,606.6 $ 1,444.5 $ 1,274.7 $ 162.1 11.2 % $ 169.8 13.3 % (1) n/m - the percentage change is not meaningful.
Biggest changeNet revenues 2025 compared to 2024 2024 compared to 2023 (in millions) 2025 2024 2023 $ Change % Change (1) $ Change % Change (1) Investment advisory fees Equity $ 3,923.7 $ 3,864.7 $ 3,442.3 $ 59.0 1.5 % $ 422.4 12.3 % Fixed income, including money market 433.0 410.7 400.4 22.3 5.4 % 10.3 2.6 % Multi-asset 1,910.6 1,814.1 1,583.4 96.5 5.3 % 230.7 14.6 % Alternatives 335.0 310.2 283.4 24.8 8.0 % 26.8 9.5 % 6,602.3 6,399.7 5,709.5 202.6 3.2 % 690.2 12.1 % Performance-based advisory fees 37.4 59.3 38.2 (21.9) (36.9) % 21.1 55.2 % Capital allocation-based income Change in accrued carried interest 149.5 134.1 223.2 15.4 n/m (89.1) n/m Acquisition-related amortization and impairments (68.3) (87.5) (61.3) 19.2 n/m (26.2) n/m 81.2 46.6 161.9 34.6 n/m (115.3) n/m Administrative, distribution, services, and other fees Administrative and other fees 506.3 498.8 467.5 7.5 1.5 % 31.3 6.7 % Distribution and servicing fees 87.6 89.2 83.4 (1.6) (1.8) % 5.8 7.0 % 593.9 588.0 550.9 5.9 1.0 % 37.1 6.7 % Net revenues $ 7,314.8 $ 7,093.6 $ 6,460.5 $ 221.2 3.1 % $ 633.1 9.8 % Average AUM (in billions): Equity $ 840.9 $ 804.3 $ 705.2 $ 36.6 4.6 % $ 99.1 14.1 % Fixed income, including money market 201.0 178.6 169.3 22.4 12.5 % 9.3 5.5 % Multi-asset 580.7 529.0 442.3 51.7 9.8 % 86.7 19.6 % Alternatives 54.7 50.0 45.5 4.7 9.4 % 4.5 9.9 % Average AUM $ 1,677.3 $ 1,561.9 $ 1,362.3 $ 115.4 7.4 % $ 199.6 14.7 % Investment advisory annualized effective fee rate (EFR) (in bps) EFR without performance-based fees 39.4 41.0 41.9 (1.6) (3.9) % (0.9) (2.1) % EFR with performance-based fees 39.6 41.4 42.2 (1.8) (4.3) % (0.8) (1.9) % (1) n/m - the percentage change is not meaningful.
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.
Our revenues are substantially dependent on fees earned under contracts with the T. Rowe Price funds and could be adversely Page 54 Table of Contents 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 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.
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.
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.
The costs in this expense category 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.
Consolidation We consolidate all subsidiaries and sponsored investment products in which we have a controlling financial interest. We are deemed to have a controlling interest when we own the majority of the voting interest of an entity or are deemed to be the primary beneficiary of a variable interest entity ("VIE").
Consolidation We consolidate all subsidiaries and investment products in which we have a controlling financial interest. We are deemed to have a controlling interest when we own the majority of the voting interest of an entity or are deemed to be the primary beneficiary of a variable interest entity (VIE).
(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.
(3) 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.
GAAP Basis (FS line item) $ 4,760.3 $ 2,333.3 $ 486.3 $ 683.8 $ 2,100.1 $ 9.15 Non-GAAP adjustments: Acquisition-related: Investment and NCI amortization and impairments (1) (Capital allocation-based income and Compensation and related costs) 37.1 50.4 — 10.2 40.2 0.18 Acquisition-related retention arrangements (1) (Compensation and related costs) (44.8) 44.8 — 10.4 34.4 0.15 Contingent consideration (1) 13.4 (13.4) — (1.8) (11.6) (0.05) Intangible assets amortization and impairments (1) (156.7) 156.7 — 32.2 124.5 0.54 Total acquisition-related (151.0) 238.5 — 51.0 187.5 0.82 Deferred compensation liabilities (3) (Compensation and related costs) (104.3) 104.3 (96.4) 1.7 6.2 0.03 Consolidated investment products (4) (6.2) 9.8 (130.3) (17.5) (67.3) (0.29) Other non-operating income (5) — — (110.9) (23.9) (87.0) (0.38) Adjusted Non-GAAP Basis $ 4,498.8 $ 2,685.9 $ 148.7 $ 695.1 $ 2,139.5 $ 9.33 Page 44 Table of Contents 2023 (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.
GAAP Basis (FS line item) $ 4,760.3 $ 2,333.3 $ 486.3 $ 683.8 $ 2,100.1 $ 9.15 Non-GAAP adjustments: Acquisition-related: Investment and NCI amortization and impairments (1) (Capital allocation-based income and Compensation and related costs) 37.1 50.4 — 10.2 40.2 0.18 Acquisition-related retention arrangements (1) (Compensation and related costs) (44.8) 44.8 — 10.4 34.4 0.15 Contingent consideration (1) 13.4 (13.4) — (1.8) (11.6) (0.05) Intangible assets amortization and impairments (1) (156.7) 156.7 — 32.2 124.5 0.54 Total acquisition-related (151.0) 238.5 — 51.0 187.5 0.82 Deferred compensation liabilities (2) (Compensation and related costs) (104.3) 104.3 (96.4) 1.7 6.2 0.03 Consolidated investment products (4) (6.2) 9.8 (130.3) (17.5) (67.3) (0.29) Other non-operating income (5) — — (110.9) (23.9) (87.0) (0.38) Adjusted Basis $ 4,498.8 $ 2,685.9 $ 148.7 $ 695.1 $ 2,139.5 $ 9.33 2023 (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.
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.
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, 2025.
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.
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 2025, 2024 and 2023 on a U.S. GAAP and a non-GAAP basis.
Cash flow attributable to consolidated investment products Eliminations As reported Cash flows from operating activities Net income (loss) $ 2,100.1 $ 120.5 $ (84.8) $ 2,135.8 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities Depreciation, amortization and impairments of property, equipment and software 254.1 — — 254.1 Amortization and impairment of acquisition-related assets and retention agreements 250.1 — — 250.1 Fair value remeasurement of contingent consideration liability (13.4) — — (13.4) Stock-based compensation expense 247.3 — — 247.3 Net (gains) losses recognized on investments (425.0) — 84.8 (340.2) Total non-cash adjustments 313.1 — 84.8 397.9 Net investments in sponsored investment products used to economically hedge deferred compensation liabilities (123.2) — 30.0 (93.2) Net change in trading securities held by consolidated investment products — (760.4) — (760.4) Other changes 23.9 6.1 (24.5) 5.5 Net cash provided by (used in) operating activities 2,313.9 (633.8) 5.5 1,685.6 Net cash provided by (used in) investing activities (187.9) (15.8) 26.2 (177.5) Net cash provided by (used in) financing activities (1,542.8) 637.9 (31.7) (936.6) Effect of exchange rate changes on cash and cash equivalents of consolidated investment products — (2.4) — (2.4) Net change in cash and cash equivalents during year 583.2 (14.1) — 569.1 Cash and cash equivalents at beginning of year 2,066.6 77.2 — 2,143.8 Cash and cash equivalents at end of year $ 2,649.8 $ 63.1 $ — $ 2,712.9 Page 48 Table of Contents 2023 (in millions) Cash flow attributable to T.
Rowe Price Group Cash flow attributable to consolidated investment products Eliminations As reported Cash flows from operating activities Net income (loss) $ 2,100.1 $ 120.5 $ (84.8) $ 2,135.8 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities Depreciation, amortization and impairments of property, equipment and software 254.1 — — 254.1 Amortization and impairment of acquisition-related assets and retention agreements 250.1 — — 250.1 Fair value remeasurement of contingent consideration liability (13.4) — — (13.4) Stock-based compensation expense 247.3 — — 247.3 Net (gains) losses recognized on investments (425.0) — 84.8 (340.2) Total non-cash adjustments 313.1 — 84.8 397.9 Net (investments) redemptions in sponsored investment products used to economically hedge deferred compensation liabilities (123.2) — 30.0 (93.2) Net change in trading securities held by consolidated investment products — (760.4) — (760.4) Other changes 23.9 6.1 (24.5) 5.5 Net cash provided by (used in) operating activities 2,313.9 (633.8) 5.5 1,685.6 Net cash provided by (used in) investing activities (187.9) (15.8) 26.2 (177.5) Net cash provided by (used in) financing activities (1,542.8) 637.9 (31.7) (936.6) Effect of exchange rate changes on cash and cash equivalents of consolidated investment products — (2.4) — (2.4) Net change in cash and cash equivalents during year 583.2 (14.1) — 569.1 Cash and cash equivalents at beginning of year 2,066.6 77.2 — 2,143.8 Cash and cash equivalents at end of year $ 2,649.8 $ 63.1 $ — $ 2,712.9 Page 49 Table of Contents 2023 (in millions) Cash flow attributable to T.
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.
Any impairment loss would be the difference between the fair value of the asset group and its carrying amount. During 2025, 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.
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.
We present those significant accounting policies used in the preparation of our consolidated financial statements as an integral part of those statements within this 2025 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 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.
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 18 to the consolidated financial statements. Our lease obligations are disclosed in Note 7 to the consolidated financial statements.
The top chart reflects the percentage of T. Rowe Price funds with 1 year, 3 year, 5 year, and 10 year track record that are outperforming the Morningstar category median. The bottom chart reflects the percentage of T. Rowe Price funds AUM that has outperformed for the time periods indicated.
The top chart reflects the percentage of T. Rowe Price funds with 1 year, 3 year, 5 year, and 10 year track record that outperformed the Morningstar category median. The bottom chart reflects the percentage of T. Rowe Price funds AUM that has outperformed for the time periods indicated.
The top chart reflects the percentage of T. Rowe Price funds with 1 year, 3 year, 5 year, and 10 year track record that are outperforming the passive peer universe. The bottom chart reflects the percentage of T. Rowe Price funds AUM that has outperformed for the time periods indicated.
The top chart reflects the percentage of T. Rowe Price funds with 1 year, 3 year, 5 year, and 10 year track record that outperformed the passive peer universe. The bottom chart reflects the percentage of T. Rowe Price funds AUM that has outperformed for the time periods indicated.
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 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 Operating activities During 2025, operating activities attributable to T.
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.
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 other advisory services. Investment advisory fees depend largely on the total value and composition of our assets under management.
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.
Our material cash commitments primarily include our obligations related to our deferred compensation liabilities, facility leases, 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 annual testing has demonstrated that the fair value of our investment advisory business (our market capitalization) exceeds our carrying amount (our stockholders’ equity) and, therefore, no impairment exists. Should we reach a different conclusion in the future, additional work would be performed to ascertain the amount of the noncash impairment charge to be recognized.
Our annual testing has demonstrated that the fair value of our investment advisory business (our market capitalization) exceeds our carrying amount (our stockholders’ equity) and, therefore, no impairment exists. Should we reach a different conclusion in the future, additional work would be performed to ascertain the amount of the non-cash impairment charge to be recognized.
We expect to fund our anticipated capital expenditures with operating cash flows and other available resources. The following tables summarize the cash flows for 2024, 2023 and 2022, that are attributable to T.
We expect to fund our anticipated capital expenditures with operating cash flows and other available resources. Cash Flows The following tables summarize the cash flows for 2025, 2024 and 2023, that are attributable to T.
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.
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 globally to individual and institutional investors in a broad range of investment solutions across equity, fixed income, multi-asset, and alternatives capabilities.
Rowe Price Group, Inc. Diluted earnings per share (7) U.S.
Rowe Price Group Diluted earnings per share (7) U.S.
Rowe Price Group, Inc. Diluted earnings per share (7) U.S.
Rowe Price Group Diluted earnings per share (7) U.S.
If we determine that we would be able to realize our deferred tax assets in the future in excess of their net recorded amount, we would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. NEWLY ISSUED BUT NOT YET ADOPTED ACCOUNTING GUIDANCE.
Furthermore, if we determine that we would be able to realize our deferred tax assets in the future in excess of their net recorded amount, we would reduce the deferred tax asset valuation allowance, which would reduce the provision for income taxes. NEWLY ISSUED BUT NOT YET ADOPTED ACCOUNTING GUIDANCE.
Excludes money market mutual funds, funds with an operating history of less than one year, funds with fewer than three peers, T. Rowe Price passive funds, and T. Rowe Price funds that are clones of other funds. This analysis compares T. Rowe Price active funds with the applicable universe of passive/index open-end funds and ETFs of peer firms.
Excludes money market mutual funds, funds with an operating history of less than one year, funds with fewer than three peers, T. Rowe Price passive funds, and T. Rowe Price funds that are clones of a retail fund.This analysis compares T. Rowe Price active funds with the applicable universe of passive/index open-end funds and ETFs of peer firms.
Page 35 Table of Contents 2024 compared to 2023 2023 compared to 2022 (in millions, except per-share data) 2024 2023 2022 Change % Change (1) Change % Change (1) U.S.
Page 35 Table of Contents 2025 compared to 2024 2024 compared to 2023 (in millions, except per-share data) 2025 2024 2023 $ Change % Change (1) $ Change % Change (1) U.S.
A portion of the capital allocation-based income is passed through as compensation and recognized in compensation and related costs, with the unpaid amount reported as non-controlling interest on the consolidated balance sheet.
A portion of the capital allocation-based income is passed through to employees and recognized in compensation and related costs, with the unpaid amount reported as non-controlling interest in the consolidated balance sheet.
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.
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, including the restructuring charges.
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 it is useful to offset the non-operating investment income (loss) of the 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.
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.
Rowe Price Group, our consolidated investment products, and the related eliminations required in preparing the consolidated statement of cash flows. 2025 (in millions) Cash flow attributable to T.
Because the determination of our annual provision is subject to judgments and estimates, it is likely that actual results will vary from those recognized in our financial statements.
Because the determination of our annual provision is subject to judgments and estimates, actual results will vary from those recognized in our financial statements.
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.
Total AUM included for this analysis includes $272B for 1 year, $262B for 3 years, $260B for 5 years, and $252B 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.
Our seed capital investments are redeemable, although we generally expect to be invested for several years for the products to build an investment performance history and until unrelated third-party investors substantially reduce our relative ownership percentage. The cash and investment presentation on the consolidated balance sheet is based on how we account for the cash or investment.
Our seed capital investments are redeemable, although we generally expect to be invested several years for the products to build an investment performance history and until unrelated third-party investors substantially reduce our relative ownership percentage. The cash and investment presentation on the consolidated balance sheet is based on the accounting treatment for the cash equivalent or investment item.
Page 36 Table of Contents On a non-GAAP basis, operating expenses were $4,498.8 million, an increase of 5.6% compared to 2023. The increase in our non-GAAP operating expenses was primarily driven by higher costs across compensation and benefits, distribution and servicing, advertising, professional fees, and a non-recurring recovery of general and administrative costs recognized in 2023.
On a non-GAAP basis, operating expenses were $4,498.8 million, an increase of 5.6% compared to 2023. The increase in our non-GAAP operating expenses was primarily driven by higher costs across compensation and benefits, distribution and servicing, advertising, professional fees, and a nonrecurring recovery of general and administrative costs recognized in 2023.
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 $329B for 1 year, $319B 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.
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.
GAAP effective tax rate is also 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.
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.
Rowe Price Group increased to $10.9 billion at December 31, 2025 from $10.3 billion at December 31, 2024, and tangible book value increased to $7.9 billion at December 31, 2025 from $7.3 billion at December 31, 2024. Sources of Liquidity We have ample liquidity, including cash and investments in 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.
By comparison, 32.5% of Morningstar's fund population is given a rating of 4 or 5 stars (6) . In addition, 60.4% (6) of AUM in the firm's rated U.S. mutual funds (across primary share classes) ended 2025 with an overall rating of 4 or 5 stars. (1) The investment performance reflects that of T.
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.
As of December 31, 2025, total valuation allowances recorded were $130.1 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 UK- based deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of these allowances. Our U.S.
Reduced revenue expectations have resulted in a reduction in the fair value of the contingent consideration liability of $13.4 million in 2024, $82.4 million in 2023, and $161.2 million in 2022. The fair value of the contingent consideration liability as of December 31, 2024 is zero.
Reduced revenue expectations resulted in a reduction in the fair value of the contingent consideration liability of $13.4 million in 2024 and $82.4 million in 2023. The fair value of the contingent consideration liability as of December 31, 2025 and 2024 is zero.
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.
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 $5.08 per share in regular dividends in 2025, an increase of 2.4% over the $4.96 per share paid in 2024.
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.
Rowe Price U.S. mutual funds, ETFs, and composites. (2) Source: © 2026 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.
The remaining change in reported cash flows from investing activities of $41.0 million is related to the net cash removed from our balance sheet from consolidating and deconsolidating investment products. Net cash used in investing activities that are attributable to T. Rowe Price Group totaled $310.2 million in 2023 compared to $179.3 million in 2022.
The remaining change in reported cash flows from investing activities of $47.3 million is related to the net cash removed from our balance sheet from consolidating and deconsolidating investment products. Net cash used in investing activities that are attributable to T. Rowe Price Group totaled $187.9 million in 2024 compared to $310.2 million in 2023.
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.
Total AUM included for this analysis includes $1,565B for 1 year, $1,557B for 3 years, $1,551B for 5 years, and $1,512B 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.
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.
Morgan Global High Yield Index 8.5% Bloomberg Barclays Municipal Bond Index 4.3% Bloomberg Barclays Global Aggregate Ex-U.S. Dollar Bond Index 8.9% J.P. Morgan Emerging Markets Bond Index Plus 12.4% Bank of America US High Yield Index 8.5% Credit Suisse Leveraged Loan Index 5.9% ASSETS UNDER MANAGEMENT.
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.
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, changes in the mix of our earnings among countries with differing tax laws or rates, and changes in the valuation allowance of foreign-based deferred tax assets.
The impairment charges for both periods were the result of reduced growth expectations for both investment management and incentive fees and higher discount rate compared to when the acquisition closed in 2021. The remaining weighted average amortization period for our definite-lived intangible assets is 3.7 years.
The impairment charges in all periods were the result of reduced growth expectations for both investment management and incentive fees compared to when the acquisition closed in 2021. The remaining weighted average amortization period for our definite-lived intangible assets is 2.8 years.
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. MATERIAL CASH COMMITMENTS.
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. MATERIAL CASH COMMITMENTS.
The maximum future impairment of indefinite-lived intangible assets that we could incur is the amount recognized in our consolidated balance sheets within intangible assets, $151.6 million as of December 31, 2024.
The maximum future impairment of indefinite-lived intangible assets that we could incur is the amount recognized in our consolidated balance sheets within intangible assets, $148.3 million as of December 31, 2025.
The following table details our assets under management and net flows in our target date retirement products, which are included in the multi-asset column shown above: (in billions) 2024 2023 2022 Assets under management $ 475.6 $ 408.4 $ 334.2 Net cash flows $ 16.3 $ 13.1 $ 11.3 Page 33 Table of Contents Our net cash outflows in 2024 were driven primarily by growth-oriented equity strategies and a multi-asset sub-advised variable annuity outflow.
The following table details our assets under management and net flows in our target date retirement products, which are included in the multi-asset column shown above: (in billions) 2025 2024 2023 Assets under management $ 561.4 $ 475.6 $ 408.4 Net cash flows $ 5.2 $ 16.3 $ 13.1 Page 33 Table of Contents Our net cash outflows in 2025 were driven primarily by growth-oriented equity strategies.
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.
Rowe Price Group $ 2,194.9 $ 2,139.5 $ 1,750.1 Less: adjusted net income allocated to outstanding restricted stock and stock unit holders 53.3 56.8 43.4 Adjusted net income allocated to common stockholders $ 2,141.6 $ 2,082.7 $ 1,706.7 CAPITAL RESOURCES AND LIQUIDITY. Stockholders' equity attributable to T.
Technology, occupancy, and facility costs were $644.1 million for 2024, an increase of $11.5 million or 1.8%, compared to 2023. The increase was due to ongoing investment in our technology capabilities, primarily hosted solutions, partially offset by lower facility costs as 2023 included the rent cost of two London facilities until we occupied our new building in September 2023.
The increase was due to ongoing investment in our technology capabilities, primarily hosted solutions, partially offset by lower facility costs as 2023 included the rent cost of two London facilities until we occupied our new building in September 2023. General, administrative, and other expenses were $441.9 million for 2025, an increase of $8.1 million or 1.9%, compared to 2024.
Rowe Price Group $ 2,139.5 $ 1,750.1 $ 1,864.8 $ 389.4 22.3 % $ (114.7) (6.2) % Diluted earnings per common share $ 9.33 $ 7.59 $ 8.02 $ 1.74 22.9 % $ (0.43) (5.4) % Assets under management (AUM) (in billions) Average AUM $ 1,561.9 $ 1,362.3 $ 1,398.4 $ 199.6 14.7 % $ (36.1) (2.6) % Ending AUM $ 1,606.6 $ 1,444.5 $ 1,274.7 $ 162.1 11.2 % $ 169.8 13.3 % Investment advisory annualized effective fee rate (EFR) (in bps) EFR without performance-based fees 41.0 41.9 42.6 (0.9) (2.1) % (0.7) (1.6) % EFR with performance-based fees 41.4 42.2 42.7 (0.8) (1.9) % (0.5) (1.2) % (1) The percentage change is not meaningful (n/m).
Rowe Price Group $ 2,194.9 $ 2,139.5 $ 1,750.1 $ 55.4 2.6 % $ 389.4 22.3 % Diluted earnings per common share $ 9.72 $ 9.33 $ 7.59 $ 0.39 4.2 % $ 1.74 22.9 % Assets under management (AUM) (in billions) Average AUM $ 1,677.3 $ 1,561.9 $ 1,362.3 $ 115.4 7.4 % $ 199.6 14.7 % Ending AUM $ 1,775.6 $ 1,606.6 $ 1,444.5 $ 169.0 10.5 % $ 162.1 11.2 % Investment advisory annualized effective fee rate (EFR) (in bps) EFR without performance-based fees 39.4 41.0 41.9 (1.6) (3.9) % (0.9) (2.1) % EFR with performance-based fees 39.6 41.4 42.2 (1.8) (4.3) % (0.8) (1.9) % (1) n/m - the percentage change is not meaningful.
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 classes and products, including those with tiered-fee structures, along with price changes we make in existing products.
This approach includes inputs that require significant management judgment, the most relevant of which include revenue growth, discount rates, and effective tax rates. Changes in these inputs could produce different fair value amounts and therefore different impairment conclusions. During 2024, we recognized $31.1 million of non-cash impairment charges on the trade name intangible asset.
This approach includes inputs that require significant management judgment, the most relevant of which include revenue growth, discount rates, and effective tax rates. Changes in these inputs could produce different fair value amounts and therefore different impairment conclusions. During 2025, we recognized $3.3 million of non-cash impairment charges on the indefinite-lived investment advisory agreements intangible asset.
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.
Page 53 Table of Contents Provision for income taxes 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.
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.
Geographically, while the EMEA and APAC regions experienced net inflows, these were outweighed by outflows in the Americas. 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 alternatives strategies.
Advertising and promotion costs were $129.6 million for 2024, an increase of $15.4 million, or 13.5%, compared to 2023. The increase was primarily driven by higher media advertising. For 2023, advertising and promotion costs were $114.2 million, an increase of $16.9 million, or 17.4%, compared to 2022.
For 2024, advertising and promotion costs were $129.6 million, an increase of $15.4 million, or 13.5%, compared to 2023. The increase was primarily driven by higher media advertising. Product and recordkeeping related costs were $312.9 million for 2025, an increase of $15.4 million, or 5.2%, compared to 2024.
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.
Page 43 Table of Contents We currently estimate our effective tax rates for the full-year 2026 will be in the range of 23.0% to 27.0% on a GAAP basis, and 24.0% to 27.0% on a non-GAAP basis.
We generally repurchase our common stock over time to offset the dilution created by our equity-based compensation plans.
While opportunistic in our approach to stock buybacks, we will generally repurchase our common stock over time to offset the dilution created by our equity-based compensation plans.
The following table details how our interests in cash and investments relate to where they are presented in the consolidated balance sheet as of December 31, 2024.
The following table details how T. Rowe Price Group’s interests in cash and investments relate to where they are presented on the consolidated balance sheet as of December 31, 2025.
(2) Performance-based advisory fees were previously included in investment advisory fees. Prior periods were recast to reflect this change. (3) Capital allocation-based income represents the change in accrued carried interest. (4) See the reconciliation to the comparable U.S. GAAP measures at the end of the Results of Operations section of this Management's Discussion and Analysis.
(2) Capital allocation-based income represents the change in accrued carried interest. (3) See the reconciliation to the comparable U.S. GAAP measures at the end of the Results of Operations section of this Management's Discussion and Analysis.
The liabilities are adjusted for appreciation (depreciation) of hypothetical investments chosen by participants. We use investment products to economically hedge the market risk associated with the supplemental savings plan liability and the expected settlement value of unvested restricted fund units.
The liabilities are adjusted Page 45 Table of Contents based on the performance of hypothetical investments selected by participants. We use investment products to economically hedge the market risk associated with the supplemental savings plan liability and the expected settlement value of unvested restricted fund units.
Rowe Price products as follows: (in millions) 12/31/2024 12/31/2023 Cash and cash equivalents $ 2,649.8 $ 2,066.6 Discretionary investments 457.1 463.7 Total cash and discretionary investments 3,106.9 2,530.3 Redeemable seed capital investments 1,262.3 1,370.9 Investments used to hedge the deferred compensation liabilities 1,110.9 894.6 Total cash and investments in T.
Rowe Price products, as follows: (in millions) 2025 2024 Cash and cash equivalents $ 3,378.2 $ 2,649.8 Discretionary investments 463.7 457.1 Total cash and discretionary investments 3,841.9 3,106.9 Redeemable seed capital investments 1,144.1 1,262.3 Investments used to hedge the deferred compensation liabilities 1,317.3 1,110.9 Total cash and investments in T. Rowe Price products attributable to T.
We believe adjusting for the impact of the consolidated investment products helps the reader’s ability to understand our core operating results and increases 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.
GAAP Basis (FS line item) $ 4,474.3 $ 1,986.2 $ 504.1 $ 654.6 $ 1,788.7 $ 7.76 Non-GAAP adjustments: Acquisition-related: Investment and NCI amortization and impairments (1) (Capital allocation-based income and Compensation and related costs) 25.4 35.9 — 7.9 28.0 0.12 Acquisition-related retention arrangements (1) (Compensation and related costs) (55.0) 55.0 — 10.8 44.2 0.19 Contingent consideration (1) 82.4 (82.4) — (10.6) (71.8) (0.31) Intangible assets amortization and impairments (1) (134.2) 134.2 — 28.8 105.4 0.46 Total acquisition-related (81.4) 142.7 — 36.9 105.8 0.46 Deferred compensation liabilities (3) (Compensation and related costs) (123.2) 123.2 (123.6) 0.5 (0.9) — Consolidated investment products (4) (9.0) 11.1 (164.6) (22.3) (84.2) (0.37) Other non-operating income (5) — — (75.1) (15.8) (59.3) (0.26) Adjusted Non-GAAP Basis $ 4,260.7 $ 2,263.2 $ 140.8 $ 653.9 $ 1,750.1 $ 7.59 2022 (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.
GAAP Basis (FS line item) $ 4,474.3 $ 1,986.2 $ 504.1 $ 654.6 $ 1,788.7 $ 7.76 Non-GAAP adjustments: Acquisition-related: Investment and NCI amortization and impairments (1) (Capital allocation-based income and Compensation and related costs) 25.4 35.9 — 7.9 28.0 0.12 Acquisition-related retention arrangements (1) (Compensation and related costs) (55.0) 55.0 — 10.8 44.2 0.19 Contingent consideration (1) 82.4 (82.4) — (10.6) (71.8) (0.31) Intangible assets amortization and impairments (1) (134.2) 134.2 — 28.8 105.4 0.46 Total acquisition-related (81.4) 142.7 — 36.9 105.8 0.46 Deferred compensation liabilities (2) (Compensation and related costs) (123.2) 123.2 (123.6) 0.5 (0.9) — Consolidated investment products (4) (9.0) 11.1 (164.6) (22.3) (84.2) (0.37) Other non-operating income (5) — — (75.1) (15.8) (59.3) (0.26) Adjusted Basis $ 4,260.7 $ 2,263.2 $ 140.8 $ 653.9 $ 1,750.1 $ 7.59 (1) These non-GAAP adjustments remove the impact of acquisition-related amortization of intangible assets, the recurring fair value remeasurements of the contingent consideration liability, if any, amortization of acquired investment and non-controlling interest basis differences and amortization of compensation-related arrangements.
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.
GAAP financial measures to non-GAAP financial measures for each of the last three years: 2025 (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 Diluted earnings per share (7) U.S.
These increases were partially offset by lower external research fees, lower accrued carried interest compensation, and higher capitalized labor. In 2024, the firm changed its approach to paying for external research, consistent with regulations and general industry practice.
These increases were partially offset by lower external research fees, lower accrued carried interest compensation, and higher capitalized labor. In 2024, the firm changed its approach to paying for external research, consistent with regulations and general industry practice. Page 37 Table of Contents Operating margin was 32.9% in 2024 compared to 30.7% in 2023.
Non-operating activity for the years ended December 31, 2024, 2023 and 2022 are as follows: 2024 compared to 2023 2023 compared to 2022 (in millions) 2024 2023 2022 $ Change $ Change Net gains (losses) from non-consolidated sponsored investment products Cash and discretionary investments Dividend income $ 138.6 $ 109.1 $ 34.7 $ 29.5 $ 74.4 Market related gains (losses) and equity in earnings (losses) 4.8 24.5 (59.1) (19.7) 83.6 Total cash and discretionary investments 143.4 133.6 (24.4) 9.8 158.0 Seed capital investments Dividend income 2.4 1.8 0.8 0.6 1.0 Market related gains (losses) and equity in earnings (losses) 62.0 50.3 (60.1) 11.7 110.4 Total seed capital investments 64.4 52.1 (59.3) 12.3 111.4 Total cash, discretionary, and seed investments 207.8 185.7 (83.7) 22.1 269.4 Net gains recognized upon deconsolidation (0.4) — 3.0 (0.4) (3.0) Investments used to hedge the deferred compensation liabilities 96.4 123.6 (139.4) (27.2) 263.0 Total net gains (losses) from non-consolidated investment products 303.8 309.3 (220.1) (5.5) 529.4 Other investment income 59.4 45.9 15.4 13.5 30.5 Net gains (losses) on investments 363.2 355.2 (204.7) 8.0 559.9 Net gains (losses) on consolidated investment portfolios 130.3 164.6 (203.5) (34.3) 368.1 Other losses, including foreign currency losses (7.2) (15.7) (17.3) 8.5 1.6 Non-operating income (loss) $ 486.3 $ 504.1 $ (425.5) $ (17.8) $ 929.6 Adjusted non-operating income (loss) (1) $ 148.7 $ 140.8 $ (24.4) $ 7.9 $ 165.2 (1) See the reconciliation to the comparable U.S.
Non-operating income (loss) Non-operating activity for the years ended December 31, 2025, 2024 and 2023 are as follows: (in millions) 2025 compared to 2024 2024 compared to 2023 2025 2024 2023 $ Change $ Change Net gains (losses) from non-consolidated investment products Cash and discretionary investments Dividend income $ 143.5 $ 138.6 $ 109.1 $ 4.9 $ 29.5 Market-related gains (losses) and equity in earnings (losses) 33.1 4.8 24.5 28.3 (19.7) Total cash and discretionary investments 176.6 143.4 133.6 33.2 9.8 Seed capital investments Dividend income 3.2 2.4 1.8 0.8 0.6 Market-related gains (losses) and equity in earnings (losses) 48.2 62.0 50.3 (13.8) 11.7 Total seed capital investments 51.4 64.4 52.1 (13.0) 12.3 Total cash, discretionary, and seed investments 228.0 207.8 185.7 20.2 22.1 Net gains (losses) recognized upon deconsolidation 3.1 (0.4) — 3.5 (0.4) Investments used to hedge the deferred compensation liabilities 142.4 96.4 123.6 46.0 (27.2) Total net gains (losses) from non-consolidated investment products 373.5 303.8 309.3 69.7 (5.5) Other investment income 91.4 59.4 45.9 32.0 13.5 Net gains (losses) on investments 464.9 363.2 355.2 101.7 8.0 Net gains (losses) on consolidated investment products 219.9 130.3 164.6 89.6 (34.3) Other gains (losses), including foreign currency gains (losses) 1.9 (7.2) (15.7) 9.1 8.5 Non-operating income (loss) $ 686.7 $ 486.3 $ 504.1 $ 200.4 $ (17.8) Adjusted non-operating income (loss) (1) $ 177.5 $ 148.7 $ 140.8 $ 28.8 $ 7.9 (1) See the reconciliation to the comparable U.S.
Page 47 Table of Contents Since the end of 2021, we have returned $4.8 billion to stockholders through stock repurchases and our regular quarterly dividends, as follows: (in millions) Recurring dividend Stock repurchases Total cash returned to stockholders 2022 $ 1,108.8 $ 855.3 $ 1,964.1 2023 1,121.9 254.3 1,376.2 2024 1,135.2 334.5 1,469.7 Total $ 3,365.9 $ 1,444.1 $ 4,810.0 We anticipate property and equipment expenditures for the full-year 2025 to be about $300 million, of which more than three-quarters is planned for technology initiatives.
Page 47 Table of Contents Since the end of 2022, we have returned $4.6 billion to stockholders through stock repurchases and regular quarterly dividends, as follows: (in millions) Recurring dividend Stock repurchases Total returned to stockholders 2023 $ 1,121.9 $ 254.3 $ 1,376.2 2024 1,135.2 334.5 1,469.7 2025 1,143.4 624.6 1,768.0 Total $ 3,400.5 $ 1,213.4 $ 4,613.9 We anticipate property, equipment, software and other capital expenditures, including internal labor capitalization, for the full-year 2026 to be about $270 million, of which more than three-quarters is planned for technology initiatives.
The remaining change in reported cash flows from operating activities was attributable to the net change in trading securities held in our consolidated investment products’ underlying portfolios. During 2023, operating activities attributable to T. Rowe Price Group, Inc. provided cash flows of $2,058.6 million, a decrease of $381.7 million from $2,440.3 million provided during 2022.
The remaining change in reported cash flows from operating activities was attributable to the net change in trading securities held in our consolidated investment products’ underlying products. During 2024, operating activities attributable to T. Rowe Price Group provided cash flows of $2,313.9 million, an increase of $255.3 million from $2,058.6 million provided during 2023.
Page 42 Table of Contents The impact of consolidating investment products on the individual lines of our consolidated statements of income for 2024, 2023, and 2022 is as follows: 2024 compared to 2023 2023 compared to 2022 (in millions) 2024 2023 2022 $ Change $ Change Operating expenses reflected in net operating income $ (9.8) $ (11.1) $ (8.2) $ 1.3 $ (2.9) Net investment income (loss) reflected in non-operating income 130.3 164.6 (203.5) (34.3) 368.1 Impact on income before taxes $ 120.5 $ 153.5 $ (211.7) $ (33.0) $ 365.2 Net income (loss) attributable to our interest in the consolidated investment products $ 84.8 $ 106.5 $ (103.4) $ (21.7) $ 209.9 Net income (loss) attributable to redeemable non-controlling interests (unrelated third-party investors) 35.7 47.0 (108.3) (11.3) 155.3 Impact on income before taxes $ 120.5 $ 153.5 $ (211.7) $ (33.0) $ 365.2 Provision for income taxes The following table reconciles the statutory federal income tax rate to our effective tax rate for the years ended December 31, 2024, 2023, and 2022: 2024 2023 2022 Statutory U.S. federal income tax rate 21.0 % 21.0 % 21.0 % State income taxes for current year, net of federal income tax benefits (1) 2.9 2.3 3.4 Net income attributable to redeemable non-controlling interests (2) (0.3) (0.5) 1.3 Net excess tax benefits from stock-based compensation plans activity (0.2) 0.1 (0.4) Valuation allowance 0.2 3.4 — Other items 0.7 — 0.3 Effective income tax rate 24.3 % 26.3 % 25.6 % (1) State income tax benefits are reflected in the total benefits for net income attributable to redeemable non-controlling interests and stock-based compensation plans activity.
The table below displays how consolidated investment products affected the individual lines of our consolidated statements of income and the portion attributable to our interest.The impact of consolidating investment products on the individual lines of our consolidated statements of income for 2025, 2024, and 2023 is as follows: Page 42 Table of Contents 2025 compared to 2024 2024 compared to 2023 (in millions) 2025 2024 2023 $ Change $ Change Operating expenses reflected in net operating income $ (9.8) $ (9.8) $ (11.1) $ — $ 1.3 Net investment income (loss) reflected in non-operating income 219.9 130.3 164.6 89.6 (34.3) Impact on income before taxes $ 210.1 $ 120.5 $ 153.5 $ 89.6 $ (33.0) Net income (loss) attributable to our interest in the consolidated investment products $ 88.9 $ 84.8 $ 106.5 $ 4.1 $ (21.7) Net income (loss) attributable to redeemable non-controlling interests (unrelated third-party investors) 121.2 35.7 47.0 85.5 (11.3) Impact on income before taxes $ 210.1 $ 120.5 $ 153.5 $ 89.6 $ (33.0) Provision for income taxes The following table reconciles the statutory federal income tax rate to our effective tax rate for the years ended December 31, 2025, 2024, and 2023: 2025 2024 2023 Statutory U.S. federal income tax rate 21.0 % 21.0 % 21.0 % State income taxes, net of federal income tax benefits 2.1 2.9 2.3 Net (income) losses attributable to redeemable non-controlling interests (1) (0.9) (0.3) (0.4) Net excess tax benefits from stock-based compensation plans activity — (0.1) 0.1 Valuation allowances 0.4 0.2 3.3 Other items 0.6 0.6 — Effective income tax rate 23.2 % 24.3 % 26.3 % Adjusted effective tax rate 24.3 % 24.5 % 27.2 % (1) 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.
The 2024 amount includes an increase of $134.1 million in accrued carried interest from investments in affiliated investment funds, partially offset by $87.5 million of non-cash amortization and impairments related to acquisition-date asset basis differences. Impairments recognized in 2024 were $36.6 million, and should market and performance conditions deteriorate, additional impairments may be recognized in future periods.
This amount includes an increase of $134.1 million in accrued carried interest from investments in affiliated investment funds, partially offset by $87.5 million of non-cash amortization and impairments related to acquisition-date asset basis differences. Impairments recognized in 2024 were $36.6 million. The firm realized carried interest of $139.6 million compared to $109.8 million in 2023.
(3) This non-GAAP adjustment removes the compensation expense impact from market valuation changes in the deferred compensation liabilities, which include the supplemental savings plan and, beginning in the fourth quarter of 2024, restricted fund units, and the related net gains (losses) on investments designated as economic hedges against the related liabilities.
(2) This non-GAAP adjustment eliminates the compensation expense impact from market valuation changes in deferred compensation liabilities, including the supplemental savings plan and, starting in Q4 2024, restricted fund units, and the related net gains (losses) on investments used as economic hedges against the related liabilities.
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) Reflects net distributions not reinvested of $5.9 billion in 2024, $2.9 billion in 2023, and $3.3 billion in 2022.
Unfunded capital commitments were $21.6 billion at December 31, 2025, $16.2 billion at December 31, 2024, and $11.6 billion at December 31, 2023, and are not reflected in fee basis AUM above. (4) Includes net distributions not reinvested of $6.8 billion in 2025, $5.9 billion in 2024, and $2.9 billion in 2023.
For 2023, we recognized compensation expense of $44.6 million, consisting of $70.0 million in compensation expense related to the accrued carried interest offset in part by $25.4 million in amortization and impairment charges. Administrative, distribution, and servicing fees in 2024 were $588.0 million, an increase of $37.1 million compared to 2023.
For 2024, we recognized compensation expense of $5.4 million, consisting of $42.5 million related to the change in accrued carried interest offset in part by $37.1 million in amortization and impairment charges. Administrative, distribution, services, and other fees in 2025 were $593.9 million, an increase of $5.9 million compared to 2024.
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.
Further, we expended $624.6 million in 2025 to repurchase nearly 6.2 million shares, or 2.8%, of our outstanding common stock at an average price of $101.15 per share. These dividends and repurchases were funded using existing cash balances and cash generated from operations.
Assets under management ended 2024 at $1,606.6 billion, an increase of $162.1 billion from the end of 2023. This increase was driven by net market appreciation and income, net of distributions not reinvested, of $205.3 billion, offset by net cash outflows of $43.2 billion.
(1) Assets under management ended 2025 at $1,775.6 billion, an increase of $169.0 billion from the end of 2024. This increase was driven by net market appreciation and income, net of distributions not reinvested, of $216.7 billion, offset by net cash outflows of $56.9 billion.
Page 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.
Page 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 (2) Alternatives (3) Total 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 (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 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 (4) 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 Managed account - model delivery assets (5) 9.2 — — — 9.2 Net cash flows prior to manager-driven distributions (74.9) 12.5 1.8 6.9 (53.7) Manager-driven distributions — — — (3.2) (3.2) Net cash flows (74.9) 12.5 1.8 3.7 (56.9) Net market appreciation (depreciation) and income (4) 114.5 11.0 89.2 2.0 216.7 Change during the period (net cash flows and market appreciation (depreciation) and income) 39.6 23.5 91.0 5.7 159.8 Assets under management at December 31, 2025 $ 878.5 $ 211.6 $ 627.0 $ 58.5 $ 1,775.6 (1) Includes assets in which T.
General, administrative, and other costs were $433.8 million for 2024, an increase of $12.5 million or 3.0%, compared to 2023. The increase was primarily due to a cost recovery recognized in 2023 that did not recur in 2024, higher professional fees and travel costs. These increases were partially offset by lower external research fees and other general and administrative costs.
The increase was primarily driven by higher charitable contributions and other general and administrative costs, partially offset by lower travel-related expenses and lower external research fees. For 2024, general, administrative, and other expenses were $433.8 million, an increase of $12.5 million or 3.0% compared to 2023.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

11 edited+0 added−0 removed5 unchanged
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.
Biggest changePage 55 Table of Contents (in millions) Fair value 12/31/2025 Potential lower value Potential loss Investment in sponsored products Discretionary investments $ 463.7 $ 417.3 $ 46.4 10 % Redeemable seed capital investments 316.1 273.5 42.6 13 % Investments used to hedge the deferred compensation liabilities 1,243.3 1,028.8 214.5 17 % Investments in affiliated collateralized loan obligations 3.2 2.9 0.3 9 % Total $ 2,026.3 $ 1,722.5 $ 303.8 15 % Direct investment in consolidated investment products Redeemable seed capital investments 819.7 699.5 120.2 15 % Investments used to hedge the deferred compensation liabilities 74.0 65.8 8.2 11 % Total $ 893.7 $ 765.3 $ 128.4 14 % Investment partnerships and other investments $ 154.7 $ 138.4 $ 16.3 11 % Any losses arising from the change in fair value of our investments would result in a corresponding decrease, net of tax, in our net income attributable to T.
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").
Since we are hedging the liabilities, the impact on our net income attributable to T. Rowe Price Group would result from any ineffectiveness of this economic hedge. CURRENCY TRANSLATION RISK. Certain of our investments, including a few consolidated investment products, expose us to currency translation risk when the financial statements are translated into U.S. dollars (USD).
In considering this presentation, it is important to note that: not all products experienced their lowest net asset value per share on the same day; it is likely that the composition of the investment portfolio would be changed if adverse market conditions persisted; and we could experience future losses in excess of those presented below.
In considering this presentation, it is important to note that: not all investments experienced their lowest net asset value per share on the same day; it is likely that the composition of the investment portfolio would be changed if adverse market conditions persisted; and we could experience future losses in excess of those presented below.
In order to quantify the sensitivity of our investments to changes in market valuations, we have chosen to use a variant of each product's net asset value to quantify the equity price risk, as we believe the volatility in each product's net asset value best reflects the underlying risk potential as well as the market trends surrounding each of its investment objectives.
In order to quantify the sensitivity of our investments to changes in market valuations, we have chosen to use a variant of each investments net asset value, if available, to quantify the equity price risk, as we believe the volatility in each investments net asset value best reflects the underlying risk potential as well as the market trends surrounding each of its investment objectives.
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%.
The potential future loss of value, before any income tax benefits, of these investments at December 31, 2025 was determined by using the lower of each investment's lowest net asset value per share during 2025 or its net asset value per share at December 31, 2025, reduced by 10%.
We do not use derivative financial instruments to manage this currency risk, so both positive and negative fluctuations in the INR against the USD will affect accumulated other comprehensive income (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 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 $57.4 million at December 31, 2025, related to our investment in UTI.
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.
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, 2025, related to cash and non-consolidated investments of $177.6 million that are denominated in foreign currencies.
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.
Our most significant exposure relates to the translation of the financial statements of our equity method investment in UTI ($162.8 million at December 31, 2025). UTI's financial statements are denominated in Indian rupees (INR) and are translated to USD each reporting period.
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.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk. EQUITY PRICE RISK. Certain of our investments 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.
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.
The majority of our Investments are in mutual funds which 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 products.
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.
Rowe Price Group. The direct investment in consolidated investment products represents our portion of the net assets of the consolidated investment product.

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