20
24
Annual
Report
T. Rowe Price Group
Helping people
thrive in an
evolving world.
As a premier global asset manager, we provide an
array of commingled funds, subadvisory services,
separate account management, collective investment
trusts, retirement recordkeeping, and related services
to individuals, advisors, institutions, and retirement
plan sponsors.
We take an active, independent approach to investing—
aiming to deliver consistently strong performance in
up and down markets. With our dynamic perspective
and meaningful partnership, clients can feel more
confident about navigating change and achieving their
financial goals.
T. ROWE PRICE GROUP
2024 ANNUAL REPORT
01
A letter from
Robert Sharps
Chair of the Board, Chief Executive Officer,
and President
Dear Stockholder,
For 88 years, we have been identifying and actively
investing in opportunities to help people thrive in
an evolving world. With our dynamic perspective
and client focus, we instill investor confidence.
In 2024, we built on this tradition—reaching $1.61
trillion in assets under management (AUM), an 11.2%
increase from 2023, and meaningfully improving
net outflows, reducing by nearly half year over year.
We are growing our exchange-traded funds (ETFs)
business, expanding our position in the insurance
channel, and extending our target date franchise
with customization and retirement income products.
The pace of redemptions is slowing, and we are
gaining traction on gross sales.
Capital Markets
A year that began with widespread fears of
recession but hopes for aggressive interest rate
cuts from the U.S. Federal Reserve played out
the opposite way in 2024—the U.S. economy
continued to power ahead, while investors
drastically scaled back their forecasts for future
Fed rate cuts. Most major U.S. equity benchmarks
delivered double-digit gains for the year. Credit-
sensitive fixed income sectors also performed well.
However, investment-grade (IG) corporate bonds
and U.S. Treasuries both struggled, especially in
the second half of the year.
For the year, the S&P 500 Index returned 25.02%
(all returns shown are in U.S. dollars), propelled by
strong earnings growth and investor enthusiasm
over the potential commercial applications of
artificial intelligence (AI). However, the bulk of
those gains were concentrated in a relative handful
of mega-cap technology stocks that dominate
the large-growth universe. The Russell 1000
Growth Index returned 33.36%, while the Nasdaq
Composite rose 28.64%.
U.S. value benchmarks lagged their growth
counterparts but by a narrower margin than in
2023. The Russell 1000 Value Index returned
14.37%. The Russell 2000 Index—a popular
measure of small-cap performance—gained
11.54%. The Russell 1000 Index returned 24.51%.
T. ROWE PRICE GROUP
2024 ANNUAL REPORT
02
Most non-U.S. equity markets posted relatively
modest returns in 2024, especially in U.S. dollar terms
as the U.S. currency surged against the euro, the
Japanese yen, and other major currencies. Sluggish
economic growth in Europe also curbed equity
gains. The MSCI Europe Index returned just 2.43%.
The MSCI Japan Index posted an 8.68% return.
But China’s equity market bounced back sharply
in 2024 after three consecutive years of losses,
returning 19.67%. This helped lift the MSCI Emerging
Markets Index to an 8.05% return, despite weak
performance in key Latin American equity markets.
The MSCI All Country World Index ex-USA posted
a 6.09% return.
In the fixed income universe, sticky U.S. consumer
inflation and a slowdown in the pace of Fed rate
cuts pushed longer-term U.S. Treasury yields higher.
Prices of government and IG corporate bonds
suffered as a result, although yield income helped
offset some of those losses. The Bloomberg
U.S. Aggregate Bond Index returned a narrowly
positive 1.25%.
Strong U.S. economic and earnings growth helped
drive credit spreads (the difference between yields
on securities that carry default risk and comparable
U.S. Treasuries) to multiyear lows, helping offset
the impact of rising U.S. Treasury yields. The J.P.
Morgan Global High Yield Index returned 9.03%,
while the J.P. Morgan Emerging Markets Index
Global returned 5.73%.
Financial Results and Flows
Financial results for our firm improved in 2024, as
strong U.S. equity market gains helped drive AUM
higher while net outflows slowed significantly.
AUM rose to $1,606.6 billion as of December 31,
2024, an 11.2% increase from $1,444.5 billion at the
end of 2023. Measured on an annual average basis,
AUM rose 14.7%, to $1,561.9 billion, from 2023’s
$1,362.3 billion. For the year, net asset outflows
totaled $43.2 billion, a reduction of nearly half from
the $81.8 billion that exited the firm in 2023.
Areas of net flow strength in 2024 included our
target date strategies (+$16.3 billion), fixed income
(+$12.6 billion), and alternatives (+$2.7 billion).
The Europe, Middle East, and Africa (EMEA) and
Asia Pacific (APAC) regions also saw positive flows,
as did our institutional channel in the Americas.
We closed the year by winning several major U.S.
equity mandates from wealth management and
institutional clients. We also saw continued fixed
income success in the insurance channel.
Like the variable annuity (VA) industry as a whole,
our VA subadvisory business experienced net
outflows in 2024, including a large redemption in
the fourth quarter. We do not expect this trend to
change meaningfully going forward. However, while
VAs are not an organic growth driver for the firm,
the business includes many longstanding clients,
and we will continue to deliver on their behalf.
On a more encouraging note, our pipeline for future
flows improved considerably over the course of
2024, largely driven by new opportunities but also
aided by a decline in assets that we deem at risk
of redemption. Accordingly, we believe we are on
pace to further reduce net outflows in 2025.
T. ROWE PRICE GROUP
2024 ANNUAL REPORT
03
Higher AUM increased revenues in 2024.
Investment advisory fees rose to $6,399.7 billion
from $5,709.5 billion in 2023, a 12.1% year-over-
year increase. Performance-based investment
advisory fees (which are not reported in advisory
fee revenue) added another $59.3 million, up from
$38.2 million in 2023. Total revenues for the year
reached $7,093.6 billion, a 9.8% increase from
$6,460.5 billion in 2023.
We continued to focus on spending discipline in
2024, although market-driven expenses contributed
heavily to cost growth—a typical pattern in years
when firm AUM and revenues are both rising. On
a generally accepted accounting principles (GAAP)
basis, annual operating expenses increased 6.4%
to $4,760.3 billion, from $4,474.3 billion in 2023. Non-
GAAP operating expenses rose to $4,498.8 billion
from $4,260.7 billion in 2023, a 5.6% increase.1
The firm also saw strong earnings growth in
2024, as revenue growth outpaced cost increases.
On a GAAP diluted basis, full-year earnings per
share (EPS) rose to $9.15 in 2024, a 17.9%
increase from $7.76 in 2023. Non-GAAP earnings,
which are adjusted for nonoperating investment
gains, acquisition-related costs, and certain other
items, rose to $9.33 in 2024 from $7.59 in 2023, a
22.9% gain. We believe the adjusted results better
reflect the performance of our core business.1
A critical point to note is that our balance sheet
remained rock-solid in 2024. The firm ended the
year with $3,106.9 million in cash and discretionary
investments, up more than $575 million from the
end of 2023. A strong financial position is a critical
advantage amid volatile markets, as the firm’s
revenues—and, to a lesser degree, expenses—
can fluctuate very quickly with market conditions.
Finally, I’m pleased to report that the firm was able
to return $1,469.7 million to stockholders in 2024
via dividends and share buybacks. We raised our
quarterly per share dividend to $1.24, marking the
firm’s 38th consecutive year of dividend increases.
We also bought back $335 million in shares during
the year, more than offsetting the dilution from
stock-based compensation. This left 223.0 million
shares outstanding as of December 31, 2024.
Over the last three years ended in 2024, we
returned over $4.8 billion to stockholders, which
was almost 84% of our adjusted net income for
these three years.
Investment Performance
Following generally strong results for our actively
managed strategies in 2023, market conditions
posed greater challenges for the firm in 2024. U.S.
equity market returns, in particular, were extremely
concentrated, with only eight companies accounting
for 60% of the S&P 500 Index’s gain for the year.
This type of environment can make it more difficult
for our active managers to outperform, given their
disciplined, long-term focus on fundamental factors.
As measured by their primary share class, 54%
of our actively managed U.S. funds outperformed
their Morningstar medians in 2024.
On an AUM-weighted basis, 61% of the firm’s
U.S. funds outperformed their Morningstar
medians during the year.
Over both trailing three- and five-year time periods,
56% of our U.S. funds beat their Morningstar
medians.
Longer-term performance remained strong,
with 70% of our funds outperforming their
Morningstar medians over the trailing 10 years
and 83% outperforming on an AUM-weighted
basis. See Investment Performance Overview
on next page for more details.
T. ROWE PRICE GROUP
2024 ANNUAL REPORT
04
Investment Performance Overview
% of Funds/
Composites
U.S. Mutual Funds Outperforming
Morningstar Median2,3
U.S. Mutual Funds Outperforming
Morningstar Passive Peer Median2,4
Composites Outperforming
Benchmarks5
1
year
3
years
5
years
10
years
1
year
3
years
5
years
10
years
1
year
3
years
5
years
10
years
Equity
51%
51%
46%
67%
55%
47%
43%
55%
39%
29%
40%
61%
Fixed Income
48%
52%
55%
63%
52%
52%
61%
63%
60%
45%
56%
73%
Multi-Asset
63%
63%
69%
82%
55%
60%
68%
64%
NA
NA
NA
NA
All Funds/
Composites
54%
56%
56%
70%
54%
53%
56%
60%
48%
36%
46%
65%
% of AUM
U.S. Mutual Funds Outperforming
Morningstar Median2,3
U.S. Mutual Funds Outperforming
Morningstar Passive Peer Median2,4
Composites Outperforming
Benchmarks5
1
year
3
years
5
years
10
years
1
year
3
years
5
years
10
years
1
year
3
years
5
years
10
years
Equity
57%
58%
49%
80%
64%
36%
29%
55%
50%
21%
42%
53%
Fixed Income
66%
62%
64%
78%
68%
68%
85%
73%
65%
37%
47%
69%
Multi-Asset
70%
68%
90%
94%
71%
58%
95%
95%
NA
NA
NA
NA
All Funds/
Composites
61%
61%
59%
83%
66%
43%
48%
66%
52%
24%
43%
55%
Past performance is no guarantee nor a reliable indicator of future results.
The investment performance reflects that of the T. Rowe Price-sponsored mutual funds, ETFs, and composites.
Investment performance for global equity was
mixed over three- and five-year periods but showed
stronger results for the 10-year period versus
peers and benchmarks. Within our fixed income
franchise, several of our municipal strategies
delivered strong performance across the 3-, 5-, and
10-year time periods. Fixed income results overall
were more mixed. Within alternatives, structured
credit generated the strongest returns for the year,
while liquid credit strategies generally kept pace
with their benchmarks. Private strategies experienced
greater dispersion with positive performance in private
credit, more muted results in special situations,
and modest losses in distressed products.
Amid challenging conditions, there were some
areas of enduring strength. Our U.S. equity
research strategy, for example, delivered another
year of Morningstar top-quartile performance2
and outperformed the S&P 500. This strategy
allows more than 25 of the firm’s equity analysts
to contribute to the portfolio in their focus area
of expertise, which we believe demonstrates the
strength of our research platform and our deep
bench of talented investment professionals. Our
clients appreciate the strategy’s rules-based
construction methodology and the risk management
features that isolate stock selection skill as the
primary driver of excess returns. Interest in the
strategy was demonstrated by the strong inflows
we saw in 2024.
T. ROWE PRICE GROUP
2024 ANNUAL REPORT
05
Our broad target date franchise also delivered
strong relative performance in 2024. On an AUM-
weighted basis, 73% of our target date funds beat
their Morningstar peer group medians over one-
and three-year time periods, while over 90% were
Morningstar top-quartile performers for the 5-, 10-,
and 15-year time periods.2 Results were also largely
positive for our new Retirement Blend series, as
all vintages outperformed their Morningstar peer
groups for the one- and three-year time periods.
Four of the nearer-dated vintages finished in the
top Morningstar decile for those periods.2
Despite mixed performance results in 2024, I remain
confident in our global research platform, the
depth of our investment talent, and the exceptional
strengths of our investment process and culture.
While we are far from satisfied with our recent
results, T. Rowe Price’s longer-term track record
makes me optimistic about our ability to deliver
superior risk-adjusted performance for our clients
going forward.
2024 Business Highlights
We reached several important milestones and
earned recognition in 2024.
Deepening Our Retirement Leadership Position
As the largest provider of active target date products
and an industry leader in retirement, we are always
focused on evolving client needs and expanding our
offerings to meet them.
In 2024, we:
extended the target date range to include
Personalized Retirement Manager, which
features a unique asset allocation tailored for the
individual by incorporating personal data into
the proven life-cycle investing philosophy and
processes that underpin our leading target date
strategies;
launched a Managed Lifetime Income product,
a new retirement solution intended to provide
retirees with stable and predictable monthly
income for life by combining a managed payout
investment from T. Rowe Price with a qualifying
longevity annuity contract (QLAC) from Pacific
Life;6 and
introduced the Social Security Optimizer tool and
five-dimensional framework, which evaluates
retirement income offerings.
We also created our first target date portfolios
for Canadians and are seeing more interest in
customized target date solutions and in the blend
suite of products.
T. ROWE PRICE GROUP
2024 ANNUAL REPORT
06
Expanding Our Reach
We are continuing to deliver compelling investment
strategies across a range of vehicles and asset
classes to help our clients achieve their financial
goals.
Our active ETF business saw tremendous growth
in 2024. With the launch of the Technology and
Intermediate Municipal Income ETFs, we ended
the year with 17 ETFs and almost $8 billion in
AUM, up from $2.5 billion at the end of 2023. We
expect to expand our ETFs further, as we consider
additional strategies to offer clients in this tax-
efficient wrapper. We also broadened our lineup
of separately managed accounts (SMAs) with the
launch of 10 new strategies, including US Capital
Appreciation Equity, after seeing strong demand
for the ETF version of the strategy.
We are extending our alternatives business with the
placement of OCREDIT with key strategic partners
in the wealth management channel, the launch our
first interval fund, and the first close for a private
lending fund. We are looking for ways to expand
opportunities for allocations to late-stage, pre-initial
public offering private companies beyond what we
have offered since 2007 in our U.S. ’40 Act mutual
funds and other pooled products.
We are making significant inroads into the insurance
sector, with a large insurance general account win
in 2024. Given that fixed income is the main asset
class of interest to these clients, and to a growing
number of clients across the board, we launched
a new multifunctional initiative to bolster our fixed
income capabilities and position us to capitalize on
market opportunities.
We also formed the T. Rowe Price Investment Institute
with the overarching mission of creating a center
of excellence within Investments that focuses on
our clients and our investors. With differentiated
thought leadership, client training, and other value-
added experiences, we will help inform clients’
investment decisions and ultimately help drive
enhanced commercial outcomes for our firm. Justin
Thomson, previously our head of International
Equity, has assumed the role of head of the institute.
Finally, we unlocked new ways to connect with
clients and prospects globally, anchoring to our
refreshed brand. “The Power of Curiosity”
advertising campaign rolled out across our markets,
emphasizing the critical role that active questioning
plays in driving informed insights to enhance
the investment process. In June, we announced a
marquee partnership with the Baltimore Orioles as
the baseball club’s exclusive investment and wealth
management sponsor, further elevating our brand
and underpinning our longstanding commitment
to the city of Baltimore.
Extending Our Capabilities
In 2024, we made continued investment in our
infrastructure and technology modernizations.
We progressed our capabilities in data science,
machine learning, and predictive models—
with over 250 investors now using our AI tool,
Investor Copilot, a custom chatbot embedded
within the private environment of our research
platforms—to summarize proprietary research
and surface insights.
We also launched a generative AI center of
excellence—a central innovation hub dedicated
to enhancing our analytical capabilities, improving
decision-making processes, and driving better
outcomes for our clients.
T. ROWE PRICE GROUP
2024 ANNUAL REPORT
07
Celebrating Our Culture
We are proud that our firm and our leaders were
recognized in 2024, including:
For the 14th consecutive year, the firm was
named one of Fortune® magazine’s World’s Most
Admired CompaniesTM in 2024.7
We retained our number two position among
the over 330 asset managers nominated in
Institutional Investor’s 2024 ranking of America’s
top asset management firms.
Dee Sawyer, our head of Global Distribution,
and Cheryl Mickel, our associate head of Fixed
Income, were named to Barron’s fifth annual Top
100 Most Influential Women in U.S. Finance list.
Steph Jackson, head of T. Rowe Price Investment
Management, and Kimberly Johnson, our
chief operating officer, were named by Savoy
magazine as two of the most influential
executives in corporate America in 2024.
Pensions & Investments named the firm on its Best
Places to Work in Money Management for 20248—
an award recognizing organizations that excel in
creating supportive and rewarding environments
for employees within the financial industry.
We successfully navigated several leadership
transitions in 2024, which is a reflection of the
strength of our succession planning and the
depth of our leadership bench.
In May, Bill Stromberg and Dr. Freeman Hrabowski
III retired from the Board of Directors. We thank
them for their integrity, insight, and thoughtful
leadership. Their impact on T. Rowe Price will be felt
for years to come. With Mr. Stromberg’s retirement,
I became chair of the Board, in addition to
continuing as chief executive officer and president.
Josh Nelson’s role expanded to become head
of Global Equity, with oversight of all the equity
strategies managed under our U.S. Equity and
International Equity Divisions. This broader role
reflects his deep investment expertise and strong
leadership skills. Kevin Collins was named head
of U.S. Intermediaries, our business supporting
financial advisors and consultants in the
intermediary channel.
Our Steadfast Commitment
With our steadfast focus on pursuing excellent
investment performance, delivering world-
class client service, being an industry leader in
retirement, and attracting and retaining top talent,
we are moving in the right direction and remain
on the path to positive flows.
I want to thank our associates for their dedication
to our clients, our stockholders, and our firm.
My optimism in our path forward is grounded in
my confidence in our associates and their work
to deepen our value to—and our connection with—
our clients.
Thank you for placing your trust in T. Rowe Price.
Sincerely,
Robert W. Sharps
Chair of the Board, Chief Executive Officer, and President
T. ROWE PRICE GROUP
2024 ANNUAL REPORT
08
Endnotes
1 See the reconciliation to the comparable U.S. GAAP measure
in the firm’s 2024 Annual Report on Form 10-K included at the
end of this Annual Report to stockholders.
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. Neither Morningstar nor its content providers are
responsible for any damages or losses arising from any use
of this information. Past performance is no guarantee of future
results.
3 Source: Primary share class only. Excludes money market
mutual funds, funds with an operating history of less than
1 year, T. Rowe Price passive funds, and T. Rowe Price funds
that are clones of other funds. 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. Total 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. 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. 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.
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 Net returns for composites are calculated using the highest
applicable separate account fee schedule and compared to
official GIPS composite primary benchmark. Excludes money
market composites.
6 Pacific Life provides a variety of products and services
designed to help individuals and businesses in the retail,
institutional, workforce benefits, and reinsurance markets
achieve financial security. All guarantees are subject to the
claims-paying ability and financial strength of the issuing
insurance company. See https://investors.troweprice.com/
news-releases/news-release-details/t-rowe-price-launches-
lifetime-income-solution-retirees-pacific
7 Fortune® is a registered trademark and Fortune World’s Most
Admired Companies™ is a trademark of Fortune Media IP
Limited and are used under license. From Fortune. ©2024
Fortune Media IP Limited All rights reserved. Used under
license. Fortune and Fortune Media IP Limited are not affiliated
with, and do not endorse products or services of, T. Rowe Price
8 Reprinted with permission from Pensions & Investments© 2024
Crain Communications Inc. All rights reserved.
Additional Disclosures
Past performance is no guarantee nor a reliable
indicator of future results.
Standard & Poor’s, LSE Group (Russell indices), NASDAQ, MSCI,
Bloomberg, and JP Morgan do not accept any liability for any
errors or omissions in the indexes or data, and hereby expressly
disclaim all warranties of originality, accuracy, completeness,
timeliness, merchantability and fitness for a particular purpose.
No party may rely on any indexes or data contained in this
communication. Visit www.troweprice.com/en/market-data-
disclosures for additional legal notices & disclaimers.
T. ROWE PRICE GROUP
2024 ANNUAL REPORT
09
Board of Directors
From Left to Right
1. Robert F. MacLellan
Non-executive Chairman
Northleaf Capital Partners
2. Eileen P. Rominger
Former Senior Advisor
CamberView Partners
3. William P. Donnelly
Retired Executive Vice President
Mettler Toledo International, Inc.
4. Cynthia Smith
Senior Vice President,
Regional Business and
Distribution Development
MetLife, Inc.
5. Mark S. Bartlett
Retired Managing Partner
Ernst & Young
6. Robert W. Sharps
Chair of the Board, Chief
Executive Officer, and President
T. Rowe Price Group, Inc.
7. Dina Dublon
Retired Executive Vice President
and Chief Financial Officer
JPMorgan Chase & Co.
8. Glenn R. August
Founder and Chief Executive Officer
Oak Hill Advisors, L.P.
9. Sandra S. Wijnberg
Former Partner and Chief
Administrative Officer
Aquiline Holdings LLC
10. Alan D. Wilson
Retired Executive Chairman
McCormick & Company, Inc.
11. Robert J. Stevens
Retired Chairman, President,
and Chief Executive Officer
Lockheed Martin Corporation
T. ROWE PRICE GROUP
2024 ANNUAL REPORT
10
Financial Information
and Form 10-K
Selected Consolidated Financial Data (in Millions, Except Per-Share Data)
2024
2023
2022
2021
2020
Net revenues
$
7,094 $
6,461 $
6,488 $
7,672 $
6,207
Net operating income
$
2,333 $
1,986 $
2,374 $
3,710 $
2,746
Net income
$
2,136 $
1,836 $
1,450 $
3,099 $
2,523
Net income (loss) attributable to
redeemable non-controlling interests
$
36 $
47 $
(108)
$
16 $
151
Net income attributable to
T. Rowe Price Group, Inc.
$
2,100
$
1,789 $
1,558 $
3,083 $
2,373
Adjusted net income attributable to
T. Rowe Price Group, Inc.i
$
2,140 $
1,750 $
1,865
$
2,995 $
2,277
Per common share information
Basic earnings
$
9.18
$
7.78
$
6.73 $
13.25 $
10.08
Diluted earnings
$
9.15
$
7.76
$
6.70 $
13.12 $
9.98
Adjusted diluted earningsi
$
9.33
$
7.59
$
8.02 $
12.75 $
9.58
Cash dividends declaredii
$
4.96
$
4.88
$
4.80 $
7.32 $
3.60
Weighted-average common shares
outstanding
222.80
224.10
226.0
226.6
228.8
Weighted-average common shares
outstanding assuming dilution
223.30
224.80
227.1
228.8
231.2
12/31/2024
12/31/2023
12/31/2022
12/31/2021
12/31/2020
Balance sheet data (in millions)
Total assets
$
13,472 $
12,279 $
11,643 $
12,509 $
10,659
Redeemable non-controlling interests
$
944 $
594 $
657 $
982 $
1,562
Stockholders’ equity attributable to
T. Rowe Price Group, Inc.
$
10,345 $
9,505 $
8,840 $
9,023 $
7,707
Assets under management (in billions)
$
1,606.6
$
1,444.5
$
1,274.7
$
1,687.8 $
1,470.5
i These items represent non-GAAP financial measures that have been established in order to increase transparency for the purpose
of evaluating our core business, for comparing current results with prior period results, and to enable more appropriate comparison
with industry peers. See Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations for the
definitions of these measures and the related reconciliation from U.S. GAAP.
ii The Board of Directors declared a special cash dividend of $3.00 per common share during 2021. Regular cash dividends declared
were $4.32 per common share for 2021.
T. ROWE PRICE GROUP
2024 ANNUAL REPORT
11
Common Stock Performance
Our common stock trades on the NASDAQ Global Select Market under the symbol TROW.
This chart compares the total cumulative return on our common stock with that of the S&P 500
Index and the NASDAQ Asset Manager Index.
For the purposes of this presentation, we assume that $100 was invested in our common stock
and each of the indexes on December 31, 2019, and that all subsequent dividends have been
reinvested. We have calculated this information based on data provided by NASDAQ OMX Global
Indexes and data obtained from the Standard & Poor’s website (standardandpoors.com).
Past performance is no guarantee nor a reliable indicator of future results.
0
50
100
150
200
$250
2024
2023
2022
2021
2020
2019
T. ROWE PRICE GROUP
2024 ANNUAL REPORT
12
[This page intentionally left blank]
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2024
Commission file number 000-32191
T. ROWE PRICE GROUP, INC.
(Exact name of registrant as specified in its charter)
Maryland
52-2264646
State of incorporation
IRS Employer Identification No.
100 East Pratt Street, Baltimore, Maryland 21202
Address, including zip code, of principal executive offices
(410) 345-2000
Registrant’s telephone number, including area code
Securities registered pursuant to Section 12(b) of the Act:
Common stock, $0.20 par value per share
TROW
The NASDAQ Stock Market LLC
(Title of class)
(Ticker symbol)
(Name of exchange on which registered)
Securities registered pursuant to Section 12(g) of the Act: None.
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☒ Yes ☐ No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ☐ Yes ☒ No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90
days. ☒ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant
to Rule 405 of Regulations S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period the registrant was
required to submit such files). ☒ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of
the Exchange Act.
Large accelerated filer
☒
Accelerated filer
☐
Non-accelerated filer (do not check if smaller reporting
company)
☐
Smaller reporting company
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.¨
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based
compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to Section
240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐ Yes ☒ No
The aggregate market value of the common equity (all voting) held by non-affiliates (excludes executive officers and directors) computed
using $115.31 per share (the NASDAQ Official Closing Price on June 30, 2024, the last business day of the registrant’s most recently
completed second fiscal quarter) was $25.3 billion.
The number of shares outstanding of the registrant's common stock as of the latest practicable date, February 11, 2025, is 222,634,484.
DOCUMENTS INCORPORATED BY REFERENCE: Certain portions of the registrant's Definitive Proxy Statement for the 2025 Annual
Meeting of Stockholders, to be filed pursuant to Regulation 14A of the general rules and regulations under the Act, are incorporated by
reference into Part III of this report.
Exhibit index begins on page 96.
PAGE
PART I
2
ITEM 1.
Business
2
ITEM 1A.
Risk Factors
12
ITEM 1B.
Unresolved Staff Comments
26
ITEM 1C.
Cybersecurity
27
ITEM 2.
Properties
28
ITEM 3.
Legal Proceedings
29
ITEM 4.
Mine Safety Disclosures
29
Information about our Executive Officers
29
PART II
30
ITEM 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
30
ITEM 6.
Reserved
30
ITEM 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
31
ITEM 7A.
Quantitative and Qualitative Disclosures about Market Risk
55
ITEM 8.
Financial Statements
57
ITEM 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
92
ITEM 9A.
Controls and Procedures
92
ITEM 9B.
Other Information
92
ITEM 9C.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
92
PART III
96
ITEM 10.
Directors, Executive Officers and Corporate Governance
96
ITEM 11.
Executive Compensation
96
ITEM 12.
Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
96
ITEM 13.
Certain Relationships and Related Transactions, and Director Independence
96
ITEM 14.
Principal Accountant Fees and Services
96
PART IV
96
ITEM 15.
Exhibits, Financial Statement Schedules
96
ITEM 16.
Form 10-K Summary
100
SIGNATURES
101
Page 1
PART I
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. With more than 85 years of experience, we provide a broad range of investment solutions across
equity, fixed income, multi-asset, and alternative capabilities for clients around the world— from individuals to
advisors to institutions to retirement plan sponsors. We 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 take an active, independent approach
to investing, offering our dynamic perspective and meaningful partnership, so our clients can feel more confident.
The late Thomas Rowe Price, Jr., founded our firm in 1937, and the common stock of T. Rowe Price Associates, Inc.
was first offered to the public in 1986. The T. 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. 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. 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. 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 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.
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.
Page 2
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 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. 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. 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 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:
Asset Class
$664.2
$743.6
$829.7
$167.0
$170.0
$188.1
$400.1
$483.0
$536.0
$43.4
$47.9
$52.8
2022
2023
2024
Client Type
$569.2
$634.6
$665.8
$705.5
$809.9
$940.8
2022
2023
2024
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.
(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. 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.
(4)Retail includes assets sourced through our direct-marketed business and financial intermediaries.
Page 3
Geography
$1,158.5
$1,320.5
$1,465.0
$116.2
$124.0
$141.6
2022
2023
2024
Account Type
$542.6
$627.4
$719.4
$304.3
$341.4
$349.1
$427.8
$475.7
$538.1
2022
2023
2024
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. Management’s Discussion and Analysis of Financial
Condition and Results of Operations as well as our consolidated financial statements, which are included in Item 8.
of this Form 10-K.
INVESTMENT MANAGEMENT SERVICES.
Investment Capabilities
We manage a broad range of investment strategies in equity, fixed income, multi-asset, and alternatives across
sectors, styles and regions. 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.
Page 4
Equity
Growth
Core
Value
Concentrated
Integrated
(Quantitative &
Fundamental)
Impact
U.S.:
All-Cap, Large-
Cap, Mid-Cap,
Small-Cap,
Sectors
Large-Cap, Mid-
Cap, Small-Cap
Large-Cap, Mid-
Cap, Small-Cap
Large-Cap
(Value)
Large-Cap
(Growth & Value,
Lower Volatility),
Multi-Cap, Small-
Cap
Large-Cap
Global /
International:
All-Cap, Large-
Cap, Small-Cap,
Sectors,
Regional
Large-Cap
Large-Cap,
Regional
Large-Cap,
Regional
Large-Cap
(Core)
Large-Cap
Fixed Income
Cash
Low Duration
High Yield /
Bank Loans
Government
Securitized
Investment
Grade Credit
U.S.:
Taxable Money,
Tax-Exempt
Money
Stable Value,
Short-Term
Bond, Short
Duration Income,
Ultra-Short Term
Bond
Credit
Opportunities,
Floating Rate,
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
The following tables set forth our broad investment capabilities as of December 31, 2024.
Page 5
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. 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 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. 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. 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.
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.
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.
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. 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. 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. 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.
Page 6
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. 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,. (2)Société d'Investissement à Capital Variable (Luxembourg), (3)Fonds Commun de
Placement (Luxembourg), (4)Open-Ended Investment Company (U.K.), (5)Japanese Investment Trust Management Funds, (6) Provided through
our ActivePlus and Retirement Advisory Service Portfolios.
INVESTMENT ADVISORY FEES.
We derive substantially all of our net revenue from investment advisory fees that are earned pursuant to
agreements with our sponsored products and clients. Nearly 57% of our investment advisory fees are earned from
our sponsored U.S. mutual funds, with the remaining investment advisory fees earned from our collective
investment trusts, subadvised funds, separately managed accounts, and other sponsored products. The 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.
Our investment advisory fees are generally computed using the value of assets under management at a contracted
annual fee rate or an effective fee rate for those products with a tiered-fee rate structure. For the majority of our
revenue, the value of the assets under management used to calculate the fees are based on a daily valuation. The
contracted fee rate(s) applied to the fund or account’s assets under management will vary depending on the
services provided, the asset class, and vehicle. For example, fee rates are typically higher for equities and
alternatives compared to multi-asset and fixed income products. 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. Specifically, our sponsored U.S. mutual fund investment management agreements must be
approved, and fees are annually reviewed by the Boards of the respective funds, including a majority of directors
who are not interested persons of the funds or of T. Rowe Price Group (as defined in the Investment Company Act
of 1940). 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. 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
We also earn performance-based investment advisory fees on certain separately managed accounts and affiliated
private investment funds. 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. The fees we earn for distributing and marketing these products are part of the investment advisory
fees earned for managing the product assets. We recognize any related distribution fees paid to financial
intermediaries in distribution and servicing costs.
CAPITAL ALLOCATION-BASED INCOME.
We recognize income earned from general partner interests in certain affiliated private investment funds that are
entitled to a disproportionate allocation of income, also referred to as carried interest. We record our proportionate
share of the investment funds' income assuming the funds were liquidated at each reporting date pursuant to each
investment fund's governing agreements. The 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. 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. 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. Certain of the U.S. mutual funds offer
Advisor Class and R Class shares that are distributed to investors and defined contribution retirement plans,
respectively. These share classes pay 12b-1 fees of 25 and 50 basis points, respectively, out of fund assets, for
distribution, administration, and personal services. In addition, U.S. mutual funds offered to investors through
variable annuity life insurance plans have a share class that pays a 12b-1 fee of 25 basis points. We pay all of the
12b-1 fees earned to financial intermediaries who source assets under management into these share classes and
provide distribution, administration, and personal services on our behalf.
REGULATION.
All aspects of our business are subject to extensive federal, state, and foreign laws and regulations. These laws and
regulations are primarily intended to benefit or protect our clients and product shareholders. They generally grant
supervisory agencies and bodies broad administrative powers, including the power to limit or restrict the conduct of
our business if we fail to comply with laws and regulations. Possible sanctions that may be imposed on us, if we fail
to comply, include the suspension of individual employees, limitations on engaging in certain business activities for
specified periods of time, revocation of our investment adviser and other registrations, censures, and fines.
Furthermore, the regulations to which we are subject continue to change over time, resulting in uncertainty for our
business as we must adapt to new laws and regulatory regimes and could significantly increase our reporting,
disclosure and compliance obligations, including for cybersecurity and climate-related disclosures.
As a global company which offers its products to customers in a variety of jurisdictions, our subsidiaries are
registered with or licensed by various U.S. and/or non-U.S. regulators. 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
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 also must comply
with complex and changing tax regimes in the jurisdictions where we operate our business.
The following table shows the securities and financial services regulator to certain of our subsidiaries:
Within the U.S.
Securities & Exchange Commission
- T. Rowe Price Associates
- T. Rowe Price Hong Kong
- T. Rowe Price International
- T. Rowe Price Japan
- T. Rowe Price Australia
- T. Rowe Price Singapore
- T. Rowe Price (Canada)
- T. Rowe Price Advisory Services
- T. Rowe Price Investment
Management
- Oak Hill Advisors
- Oak Hill Advisors (Europe)
- OHA (UK)
-OHA Private Credit Advisors
- OHA Private Credit Advisors II
All entities above are registered as investment advisers under the Investment
Advisers Act of 1940, which imposes substantive regulation around, among other
things, fiduciary duties to clients, transactions with clients, effective compliance
programs, conflicts of interest, advertising, recordkeeping, reporting, and disclosure
requirements.
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. 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 Japan
Swiss Financial Market Supervisory
Authority
- T. Rowe Price (Switzerland)
Regulator
T. Rowe Price Entity
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").
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. This
Page 9
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. Pershing, a third-party clearing broker and an affiliate of BNY Mellon, maintains our
brokerage’s customer accounts and clears all transactions.
• T. Rowe Price Associates and certain subsidiaries are registered as commodity trading advisors and/or
commodity pool operators with the Commodity Futures Trading Commission and are members of the National
Futures Association.
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.
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. A significant number of proprietary and other sponsors’ investment products are sold to the public by other
investment management firms, broker-dealers, mutual fund companies, banks, and insurance companies. 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. Some of these financial institutions have greater
resources, may have more developed brand awareness in particular markets, or offer additional services to clients
than we do. 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. 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.
In order to maintain and enhance our competitive position, we may review acquisition and venture opportunities
and, if appropriate, engage in discussions and negotiations that could lead to an acquisition transaction or other
financial relationships with another entity.
HUMAN CAPITAL.
At T. Rowe Price, our people are our greatest asset. 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. 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.
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.
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Investing In Our People
To help our clients achieve their long-term investment goals, we help our associates achieve their long-term career
goals. We continuously seek to identify new opportunities for our associates to expand their experience and grow
their skills 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 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. 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. 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.
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. 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. 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. 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.
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. In the
U.S., the UK, and Canada, we offer our associates backup childcare and elder care. We also launched an APAC
Family Program working group designed to support working parents and caregivers throughout the region in the
workplace.
AVAILABLE INFORMATION.
We intend to use our website, troweprice.com, as means of disclosing material non-public information and for
complying with our disclosure obligations under Regulation FD. These disclosures will be included in the Investor
Relations section of our website, investors.troweprice.com. We 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
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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. In addition, our website includes the following information:
•
our financial statement information from our periodic SEC filings in the form of XBRL data files that may be
used to facilitate computer-assisted investor analysis;
•
corporate governance information including our governance guidelines, committee charters, senior officer
code of ethics and conduct, and other governance-related policies;
•
other news and announcements that we may post from time to time that investors might find useful or
interesting, including our monthly assets under management disclosure and periodic investor presentations;
and
•
opportunities to sign up for email alerts and RSS feeds to have information pushed in real time.
Accordingly, investors should monitor this section of our website, in addition to following our press releases, SEC
filings, and public webcasts, all of which will be referenced on the website. Unless otherwise expressly stated, the
information found on our website is not incorporated into this or any other report we file with, or furnish to, the SEC.
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.
Item 1A. Risk Factors.
An investment in our common stock involves various risks, including those mentioned below and those that are
discussed from time to time in our periodic filings with the SEC. Investors should carefully consider these risks,
along with the other information contained in this report, before making an investment decision regarding our
common stock. There may be additional risks of which we are currently unaware, or which we currently consider
immaterial. Any of these risks could have a material adverse effect on our business, financial condition, results of
operations, liquidity, reputation, and value of our common stock.
RISKS RELATING TO OUR BUSINESS AND THE FINANCIAL SERVICES INDUSTRY.
Our revenues are based on the market value and composition of the assets under our management, all of
which are subject to fluctuation caused by factors outside of our control.
We derive our revenues primarily from investment advisory services provided by our subsidiaries to individual and
institutional investors. Our investment advisory fees typically are calculated as a percentage of the market value of
the assets under our management. As a result, our revenues are dependent on the value and composition of the
assets under our management, all of which are subject to substantial fluctuation due to many factors, including:
•
Investment Performance. 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. 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. A downturn in financial markets would cause the value of assets under our
management to decrease, and may also cause investors to withdraw their investments, thereby further
decreasing the level of assets under our management.
•
Investment Concentration. 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. Any redemptions and other withdrawals from, or shifting among, our
investment portfolios could reduce our assets under management. These could be caused by investors
reducing their investments in our portfolios in general or in the market segments in which we focus; investors
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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. Prolonged periods of strong relative investment performance and/or strong investor
inflows has resulted in, and may result in, capacity constraints within certain strategies, which can lead to,
among other things, the closure of those strategies to new investors.
•
Investing Trends. 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. 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. 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.
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. For any period in which revenues decline, net income and operating margins will likely
decline by a greater proportion because certain expenses will be fixed over that finite period and may not decrease
in proportion to the decrease in revenues.
A majority of our revenues are based on contracts with collective investment funds that are subject to
termination without cause and on short notice.
We provide investment advisory, distribution, and other administrative services to collective investment funds under
various agreements. Investment advisory services are provided to each 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. 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. Competitive pressures may result in a loss of clients and
their assets or compel us to reduce the fees we charge to clients, thereby reducing our revenues and net
income.
We are subject to competition in all aspects of our business from other financial institutions. Some of these financial
institutions have greater resources than we do and may offer a broader range of financial products across more
markets. Some competitors operate in a different regulatory environment than we do which may give them certain
competitive advantages in the investment products and portfolio structures that they offer. We compete with other
providers of investment advisory services primarily based on the availability and objectives of the investment
products offered, investment performance, fees and related expenses, and the scope and quality of investment
advice, other client services and technology offerings. Some institutions have proprietary products, distribution
channels or technology offerings that make it more difficult for us to compete with them. In addition, in recent years,
there has been continued consolidation in the asset management industry, which continues to alter our competitive
landscape, has led to fee compression, and requires us to modify or adapt our product offerings to attract and retain
customers. Substantially all of our investment products are available without sales or redemption fees, which means
that investors may be more willing to transfer assets to competing products. If our clients reduce their investments
with us, and we are not able to attract new clients, our AUM, revenue and earnings could decline.
The market environment in recent years has led investors to increasingly favor lower fee passive investment
products. As a result, investment advisors that emphasize passive products have gained and may continue to gain
market share from active managers like us. While we believe there will always be demand for strong performing
active management, we cannot predict how much market share these competitors will gain.
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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. We may respond to these regulatory matters or
may be impacted by these actions in a manner different from our competitors, which may impact our AUM or result
in the loss of clients and their assets.
As part of our continued efforts to attract and retain clients, we develop and launch new products and services,
which may require expenditure of resources and may expose us to new regulatory or compliance requirements as
well as increased risk of operational or client service errors.
In the event that we decide to reduce the fees we charge for investment advisory services in response to
competitive pressures, which we have done selectively in the past, revenues and operating margins could be
adversely impacted. 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.
Many competitors offer similar products to those offered by us, and the failure or negative performance of
competitors’ products could lead to a loss of confidence in similar products we offer, irrespective of the performance
of such products. Any loss of confidence in a product type could lead to withdrawals, redemptions and liquidity
issues in such products, which may cause our AUM, revenue and earnings to decline.
Our operations are complex and a failure to properly execute operational processes could have an adverse
effect on our reputation and decrease our revenues.
We provide global investment management and administrative services to our clients. In certain cases, we rely on
third-party service providers for the execution and delivery of these services. There can be no assurance that these
service providers will properly perform these processes or that there will not be interruptions in services from these
third parties. Failure to properly execute or oversee these services could have an adverse impact on our business,
financial results and reputation, and subject us to regulatory sanctions, fines, penalties, or litigation.
New investment strategies, investment vehicles, distribution channels, advancement in technology and digital
wealth and distribution tools, or other evolutions of or additions to our business may increase the risk that our
existing systems may not be adequate to control the risks introduced by such changes. Business changes may
require us to update our processes or technology and may increase risk to meeting our business objectives. In
addition, our existing information systems and technology platforms might not be able to accommodate our
business operations, and the cost of maintaining or upgrading such systems might increase from its current level. If
any of these scenarios were to arise, it could disrupt our operations, increase our expenses or result in financial
exposure, regulatory inquiry, litigation or reputational damage.
Our business model is dependent on our personnel, who as part of their roles support disclosure and internal
controls, compliance, supervision, technology and training to provide comfort that our activities do not violate
applicable guidelines, rules and regulations or adversely affect our clients, counterparties or us. We also rely on the
personnel of others involved in our business, such as third-party service providers, intermediaries or other vendors.
Our personnel and the personnel of others involved in our business may make errors or engage in fraudulent or
malicious activities, that are not always immediately detected or that cannot be easily remediated, which may
disrupt our operations, cause losses, lead to regulatory fines or sanctions, litigation, or otherwise damage our
reputation.
The quantitative models we use may contain errors, which could result in financial losses or adversely
impact product performance and client relationships.
We use various quantitative models (including ones supported by AI and machine-learning algorithms) to support
investment decisions and investment processes, including those related to portfolio management and portfolio risk
analysis, as well as those related to client investment or savings advice or guidance. Any errors in the underlying
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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. 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. For example,
ESG issues have been the subject of increased focus by regulators, clients and other stakeholders. 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.
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. We also communicate certain initiatives and goals for our corporate and investing activities related to
ESG matters. We could be scrutinized or criticized for the scope or nature of any such initiatives or goals, and may
not be able to accomplish them within our anticipated timeframe or at all. Our global presence and investments on
behalf of our clients around the world could also lead to heightened scrutiny and criticism in an increasingly
fragmented geopolitical landscape.
Misconduct by our personnel or third-party service providers could likewise adversely impact our reputation and
lead to a loss of client assets. While we maintain policies, procedures, and controls to reduce the likelihood of
unauthorized activities, we are subject to the risk that our personnel or third parties acting on our behalf may
circumvent controls or act in a manner inconsistent with our policies and procedures. 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. Any damage to our brand
could impede our ability to attract and retain clients and key personnel, and reduce the amount of assets under our
management, any of which could have a material adverse effect on our revenues and net income.
Failure to comply with client contractual requirements and/or investment guidelines could result in costs of
correction, damage awards or regulatory fines and penalties against us and loss of revenues due to client
terminations.
Many of the agreements under which we manage assets or provide products or services specify investment
guidelines or requirements, such as adherence to investment restrictions or limits, that we are required to observe in
the provision of our services. Laws and regulations impose similar requirements for certain investment products.
While we maintain various compliance procedures and other controls to seek to prevent, detect and correct such
errors, any failure to comply with these guidelines or requirements could result in damage to our reputation or in our
clients seeking to recover losses, withdrawing their assets or terminating their contracts. Regulators likewise may
commence enforcement actions for violations of such requirements, which could lead to fines and penalties against
us. Any such events could cause our revenues and profitability to decline, and significant errors for which we are
responsible could have a material adverse impact on our reputation, results of operations, financial condition or
liquidity.
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, and equity investments in private
companies, which may expose our investment products, clients and us to new or increased risks and liabilities.
These 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
•
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.
These (and similar) risks may expose our investment products, clients and us, to the extent of our investment in
such investment products, to expenses and liabilities, including costs associated with delays or remediation and
increased legal or regulatory costs, all of which could impact the returns earned by our investment products and
clients. These risks could also result in direct liability for us by exposing us to losses, regulatory sanctions or
litigation, including claims for compensatory or punitive damages. The occurrence of any such events may expose
us to reputational harm, or cause our AUM, revenues and net income to decline.
Our expenses are subject to significant fluctuations that could materially decrease net income.
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
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•
disruptions of infrastructure and third-party services such as communications, power, cloud services, transfer
agent, investment management, trading, and accounting systems.
Under our agreements with the U.S. mutual funds, we charge the funds certain administrative fees and related
expenses based upon contracted terms. If we fail to accurately estimate our underlying expense levels or are
required to incur expenses relating to the U.S. mutual funds that are not otherwise paid by the funds, our operating
results will be adversely affected. 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.
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.
Changes in tax laws or exposure to additional tax liabilities may impact our financial position or the
marketability of the products and services we offer our clients.
We are subject to income taxes as well as non-income-based taxes and complex tax regimes in both the United
States and various foreign jurisdictions in which we operate. We cannot predict future changes in the tax regulations
to which we are subject, and any such changes could have a material impact on our tax liability or result in
increased costs of our tax compliance efforts. For example, a financial transaction tax on stocks, bonds and a broad
range of financial instruments has been proposed in the United States and the EU.
Additionally, changes in the status of tax deferred investment options, including retirement plans, tax-free municipal
bonds, the capital gains and corporate dividend tax rates, and other individual and corporate tax rates could cause
investors to view certain investment products less favorably and reduce investor demand for products and services
we offer, which could have an adverse effect on our assets under management and revenues.
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.
The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax regulations
in a multitude of jurisdictions across our global operations. Tax authorities may disagree with certain positions we
have taken and assess additional taxes (and, in certain cases, interest, fines, or penalties). We have a process to
evaluate whether to record tax liabilities for anticipated tax audit issues based on our estimate of whether, and the
extent to which, additional income taxes will be due, and adjust these liabilities in light of changing facts and
circumstances. Due to the complexity of some of these uncertainties, however, the ultimate resolution may result in
a payment that is materially different from our estimates and impact our financial results.
We have contracted with third-party financial intermediaries that distribute our investment products and
such relationships may not be available or profitable to us in the future.
Third-party financial intermediaries we contract with generally offer their clients various investment products in
addition to, and in competition with, our investment products, and have no contractual obligation to encourage
investment in our products. It would be difficult for us to acquire or retain the management of those assets without
the assistance of the intermediaries, and we cannot assure that we will be able to maintain an adequate number of
investment product offerings and successful distribution relationships.
In addition, some investors rely on third-party financial planners, registered investment advisers, and other
consultants or financial professionals to advise them on the choice of an investment adviser and investment
products. These professionals and consultants may favor a competing investment product for reasons we cannot
control. We cannot assure that our investment products will be among their recommended choices in the future.
Further, their recommendations can change over time and we could lose their recommendation and their clients'
assets under our management. 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
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ownership or management changes could also adversely impact our relationships with these third-party
intermediaries. 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. Any inability to access and successfully sell our products to clients
through such third-party channels could have a negative effect on our level of AUM and adversely impact our
business. Moreover, we can provide no assurance that we will continue to have access to the third-party financial
intermediaries that currently distribute our products on favorable terms or at all, or that we will continue to have the
opportunity to offer all or some of our existing products through them. The presence of any of the adverse conditions
discussed above would reduce revenues and net income, possibly by material amounts.
Natural disasters and other unpredictable events could adversely affect our operations and financial
results.
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.
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. In addition, we maintain
offices with our personnel in many other global locations, including Sydney, Australia; Hong Kong; Singapore;
Tokyo, Japan; and Luxembourg, some of which are in areas that are particularly vulnerable to extreme events. We
have developed various backup systems and contingency plans, but we cannot be assured that those preparations
will be adequate in all circumstances that could arise, or that material interruptions and disruptions will not occur.
We also rely to varying degrees on outside service providers for service delivery in addition to technology and
disaster contingency support, and we cannot be assured that these service providers will be able to perform in an
adequate and timely manner. If we lose the availability of any personnel, or, if we are unable to respond adequately
to such an event in a timely manner, we may be unable to service our clients or timely resume our business
operations, which could lead to financial losses, a tarnished reputation and loss of clients that could result in a
decrease in assets under management, lower revenues, and materially reduced net income, particularly if our
responses to such events are less adequate than those of our competitors.
Our business, financial condition, and results of operation may be adversely affected by pandemics,
epidemics or disease outbreaks.
Pandemics, epidemics or disease outbreaks, as well as measures enacted to prevent their spread, may create
significant volatility, uncertainty and disruption to the global economy and may impact our business, financial
condition and results of operations. For example, the coronavirus pandemic adversely affected global financial
markets and impacted global supply chains. Concerns and uncertainty regarding pandemics, epidemics or disease
outbreaks could lead to increased volatility in global capital and credit markets, adversely affect our operations, key
executives and other personnel, clients, investors, service providers and other vendors, suppliers, and other third
parties, and negatively impact our assets under management, revenues, income, business and operations. Since
our revenue is based on the market value and composition of the assets under our management, the impact of such
Page 18
events on global financial markets and our clients’ investment decisions could adversely affect our revenue and
operating results.
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. 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.
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. Investments in these products are generally made to establish a track
record, meet purchase size requirements for trading blocks or demonstrate economic alignment with other investors
in our funds. All of these investments are subject to investment market risk, and our non-operating investment
income could be adversely affected by the realization of losses upon the disposition of our investments or the
recognition of significant impairments or unrealized losses on these investments. In addition, related investment
income has fluctuated significantly over the years depending upon the performance of our corporate investments,
including the impact of market conditions and interest rates, and the size of our corporate money market and longer-
term collective investment fund holdings. Fluctuations in other investment income are expected to occur in the
future. 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. 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.
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. 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. Such non-performance could produce a financial loss for us or the portfolios we manage. In addition,
concerns regarding the soundness of other financial services institutions may generate public concerns regarding
us or the financial services industry more broadly, which could harm our reputation and adversely affect our results
of operations and financial condition, even if the underlying matters impacting other financial institutions are of
limited or no direct applicability to us.
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
cannot be certain that we will be able to identify, consummate and successfully complete such transactions, and no
assurance can be given with respect to the timing, likelihood or business effect of any possible transaction. These
initiatives typically involve a number of risks and present financial, managerial and operational challenges to our
ongoing business operations. In addition, acquisitions and related transactions involve risks, including unanticipated
problems regarding integration of investor account and investment security recordkeeping, additional or new
regulatory requirements, operating facilities and technologies, and new 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.
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We own a 23% investment in UTI Asset Management Company Ltd ("UTI"), an Indian asset management company,
and we may consider non-controlling minority investments in other entities in the future. We may not realize future
returns from such investments or any collaborative activities that may develop in the future.
Climate change-related risks could adversely affect our business, products, operations and clients, which
may cause our AUM, revenues and earnings to decline.
Our business and the assets we manage on behalf of clients could be impacted by climate change-related risks.
Climate change may present risk to our business through changes in the physical climate or from the process of
transitioning to a lower-carbon economy. Climate-related physical risks arise from the direct impacts of a changing
climate in the short-, medium- and long-term. Such risks may include an increase in the intensity and frequency of
extreme weather events, changes in temperature, rising sea levels and increase of wildfires, which may damage
infrastructure and facilities, increase energy costs, negatively impact workforces, as well as disrupt connectivity or
supply chains. 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. Climate-related transition risks arise from exposure to the transition to a
lower-carbon economy through policy, regulatory, technology and market changes. For instance, new regulations
and changes in existing regulations may lead to increased compliance costs, enhanced reporting obligations,
regulation of existing products and/or services, exposure to litigation, and aggressive or inconsistent levels of
regulatory enforcement globally. Additionally, climate change may influence client preferences by increasing the
demand for investment products oriented toward climate change mitigation. Conversely, a climate-related backlash
could negatively impact demand for climate or transition related products. Climate change may also impact our
reputation if we are perceived to fall short of our own corporate commitments or stakeholder expectations. Any of
these risks may have a material adverse effect on our AUM, revenue and earnings.
We are exposed to risks arising from our international operations.
We operate in a number of jurisdictions outside of the United States. 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 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 financial condition and liquidity would be adversely affected by losses on our seed capital and co-
investments.
We have capital held in investment products we manage in a variety of asset classes, including equities, fixed
income products, multi-asset products, financial instruments, real estate and alternative investments. Investments in
these products are generally made to establish a track record, meet purchase size requirements for trading blocks
or demonstrate economic alignment with other investors in our funds. Adverse market conditions may result in the
need to write down the value of these seed capital and co-investments, which may adversely affect our results of
operations or liquidity.
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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.
Our success depends on our highly skilled personnel, including our portfolio managers, investment analysts, sales
and client relationship personnel, technology and operations professionals, and corporate officers, many of whom
have specialized expertise and extensive experience in our industry. Professionals with financial services
experience across functional areas are in demand, and we face significant competition for highly qualified
personnel. Changes in workplace environment, such as return to office arrangements and remote and hybrid work
models, have presented challenges to attracting and retaining talent. While our personnel can generally terminate
their employment with us at any time, with most required to provide little to no notice, we have recently adopted
more significant notification requirements for certain key positions, which may cause some personnel or candidates
to be less willing to continue their employment with us or join our firm. We cannot assure that we will be able to
attract or retain key personnel. In addition, due to the global nature of our investment advisory business, our key
personnel may have reasons to travel to regions susceptible to higher risk of civil unrest, organized crime or
terrorism, and we may be unable to ensure the safety of personnel traveling to these regions.
We have near- and long-term succession planning processes, including programs to develop our future leaders,
which are intended to address future talent needs and minimize the impact of losing key talent. However, in order to
retain or replace our key personnel, we may be required to increase compensation, which would decrease net
income. The loss of key personnel could also damage our reputation and make it more difficult to attract and retain
personnel and investors, and in turn cause our assets under management to decrease, which could have a material
adverse effect on our revenues and net income.
TECHNOLOGY RISKS.
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 depend on significant quantities of technology and, in many cases, highly specialized, proprietary or third-party
licensed technology to support our business functions, including among others:
•
securities analysis,
•
securities trading,
•
portfolio management,
•
client service,
•
accounting and internal financial reporting processes and controls,
•
data security and integrity, and
•
regulatory compliance and reporting.
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. An outage, suspension or termination of vendor-provided services,
software licenses or related support, upgrades, and maintenance could cause system delays or interruption.
Although we believe we have robust business and disaster recovery plans, if our technology systems, including
those provided or operated by third-party service providers, were to fail and we were unable to recover in a timely
way, we would be unable to fulfill critical business functions, which could lead to a loss of clients and could harm our
reputation. 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.
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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. If we are unable to upgrade our technology stack in a timely fashion, we
may lose clients and fail to maintain regulatory compliance, which could affect our results of operations and severely
damage our reputation.
A cyberattack or a failure to implement effective information and cybersecurity policies, procedures and
capabilities could disrupt operations and cause financial losses.
We are dependent on the effectiveness of the information and cybersecurity policies, procedures and capabilities
we maintain to protect our systems and data. An externally caused data security incident, such as a cyberattack,
phishing scam, virus, ransomware attack, denial-of-service attack, or an attack launched from within our systems
could compromise the integrity of confidential client or competitive information and materially interrupt our business
operations. In addition, 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.
There have been increasing numbers of publicized cybersecurity incidents in recent years impacting financial
services firms as well as firms in other industries, including incidents of increasing sophistication and scope, all of
which have resulted in greater harm. Our use of third-party service providers could heighten this risk. 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. Although we maintain insurance coverage, under terms that we believe are
reasonable, prudent and adequate for the purpose of our business, it may be insufficient to protect us against all
losses and costs stemming from breaches of security, cyberattacks and other types of unlawful activity, or any
resulting disruptions from such events.
We could be subject to losses if we fail to properly safeguard and maintain confidential data or our
intellectual property.
As part of our normal operations, we maintain and transmit personal and confidential data about our clients,
personnel and other parties, as well as proprietary data and intellectual property relating to our business operations.
Our business operations rely on such data being available as and when needed, and not being subjected to loss or
unauthorized access or alteration. We maintain a system of internal controls designed to provide reasonable
assurance that both inadvertent errors and fraudulent activity, including misappropriation of assets, fraudulent
financial reporting, and unauthorized access to sensitive or confidential data, is either prevented or detected in a
timely manner. We also leverage cloud-based solutions for the transmission and storage of data. Our systems, or
those of the third-party service providers we use to maintain or transmit such data, could be accessed by
unauthorized users or corrupted by computer viruses or other malicious software code. Additionally, authorized
persons could inadvertently or intentionally release or alter confidential or proprietary data. 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.
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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.
The recent advancements in and increased use of artificial intelligence (AI) present risks and challenges
that may adversely impact our business.
We or our third-party vendors, clients or counterparties have developed, and may continue to develop or incorporate
AI technology in certain business processes, services or products. The development and use of AI present a
number of risks and challenges to our business. The legal and regulatory environment relating to AI is uncertain and
rapidly evolving, in the U.S., and internationally, and includes regulation targeted specifically at AI technology, as
well as provisions in intellectual property, privacy, consumer protection, employment and other laws applicable to
the use of AI. 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. These evolving laws and regulations
could require changes in our implementation of AI technology, increase our compliance costs and the risk of non-
compliance, and restrict or impede our ability to develop, adopt and deploy AI technologies efficiently and effectively.
AI models, particularly generative AI models, may produce output or take action that is incorrect or outdated, that
result in the release of personal, confidential or proprietary information, that reflect biases included in the data on
which they are trained or introduced during the training or fine tuning process, that infringe on the intellectual
property rights of others, or that is otherwise harmful. In addition, the complexity of many AI models makes it
challenging to understand why they are generating particular outputs. 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. Any of these risks could expose us to liability or adverse legal or regulatory consequences and harm our
reputation and the public perception of our business or the effectiveness of our security measures. In addition to our
use of AI technologies, we are exposed to risks arising from the use of AI technologies by bad actors to commit
fraud and misappropriate funds and to facilitate cyberattacks. Generative AI, if used to perpetrate fraud or launch
cyberattacks, could result in losses, liquidity outflows, or other adverse effects at a particular financial institution or
exchange. If our use of AI becomes controversial, we may experience brand or reputational harm, competitive harm,
or legal liability.
LEGAL AND REGULATORY RISKS.
Compliance within a complex regulatory and legal environment which continues to evolve imposes
significant financial and strategic costs on our business, and non-compliance could result in fines and
penalties.
There is uncertainty associated with the regulatory and compliance environments in which we operate. Our
business is subject to extensive and complex, overlapping and/or conflicting, and frequently changing rules,
regulations, policies and legal interpretations, around the world. 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.
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.
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.
Page 23
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. A
regulatory proceeding, even if it does not result in a finding of wrongdoing or sanctions, could consume a substantial
amount of time, management attention, and expense. Any regulatory investigation and any failure to maintain
compliance with applicable laws and regulations could severely damage our reputation, adversely affect our ability
to conduct business and decrease revenue and net income, and potentially result in complex and costly litigation.
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.
Our regulatory environment is frequently altered by new laws and regulations and by revisions to, and evolving
interpretations of, existing regulations. New laws and regulations present areas of uncertainty susceptible to
alternative interpretations; regulators and prospective litigants may not agree with reasoned interpretations we
adopt. 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.
Potential impacts of current or proposed legal or regulatory requirements include, without limitation, the following:
•
There has been increasing focus on the framework of the U.S. retirement system at the federal and state
levels. We could experience adverse business impacts if legislative and regulatory changes limit retirement
plans to certain products and services, or favor certain investment vehicles, that we do not offer, materially
limit retirement savings opportunities or foster substantial outflows from retirement savings plans for non-
retirement purposes.
•
There has been substantial regulatory and legislative activity at federal and state levels regarding standards of
care for financial services firms, related to both retirement and taxable accounts. Actions taken by applicable
regulatory or legislative bodies may impact our business activities and increase our costs. In September 2024,
a new rule expanding the definition of, and requirements for, an investment advice fiduciary under ERISA
(“Retirement Security Rule”) became effective, which applies to retirement plans and accounts that comprise a
majority of our accounts. 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. 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. 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. 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. Requirements in these areas continue to expand and
evolve throughout the globe, most commonly in ways that increase the complexity and costs of compliance.
For example, the SEC proposed new rules in 2023 that would require broker-dealers and investment advisers,
when engaging or communicating with investors using predictive data analytics, to evaluate such technologies
for conflicts of interest and, where identified, eliminate or neutralize the conflict of interest. If adopted as
proposed, these rules could encompass a wide range of forward-looking uses of technology applications and
impose significant operational burdens and costs. Future changes to laws and regulations in these areas
Page 24
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. 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. For example, the EU’s Sustainable Finance Disclosure Regulation imposes mandatory
ESG disclosure obligations on asset managers and other financial markets participants, requiring all covered
firms to disclose how financial products integrate sustainability risks in the investment process, including
whether they consider adverse sustainability impacts, and sustainability-related information for products
promoting sustainable objectives. The availability of such disclosures may impact the investment decisions of
European investors. In addition, the EU’s Corporate Sustainability Reporting Directive imposes enhanced
sustainability reporting requirements for certain EU companies and non-EU companies, with phased reporting
requirements beginning in 2025 for certain companies. In the U.S., states have proposed or adopted laws and
regulations to pursue similar initiatives, such as California’s Climate Accountability Package, federal
regulations on ESG disclosures, such as the SEC's proposed climate disclosure rules that have been stayed,
are expected to halt under the new administration in the U.S. 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. 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. Raimondo, which overruled Chevron U.S.A., Inc. v. Natural Resources Defense
Council, Inc. In Loper Bright, the Supreme Court held that the U.S. Administrative Procedure Act required
courts to exercise their independent judgment when deciding whether an agency had acted within its statutory
authority, and that courts may not defer to an agency interpretation solely because a statute is ambiguous,
overruling the long-held Chevron decision that had required that courts defer to reasonable agency
interpretations of statutes and agency action. 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. Any such challenges, if successful, could have a material impact
on our business because we may make decisions based on legal guidance that may be overruled. In addition
to potential changes to regulations and agency guidance as a result of legal challenges, these decisions may
result in increased regulatory uncertainty and delays in and other impacts to the agency rulemaking process,
any of which could adversely impact our business and operations.
We cannot predict the nature of future changes to the legal and regulatory requirements applicable to our business,
nor the extent of the impacts that will result from current or future proposals. However, any such changes are likely
to increase the costs of compliance and the complexity of our operations, as well as result in changes to our product
or service offerings. The changing regulatory landscape may also impact a number of service providers that provide
services to us and, to the extent such service providers alter their 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.
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. 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 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
continue to be available at acceptable terms and fees. Certain insurance coverage may not be available or may be
prohibitively expensive in future periods. As our insurance policies come up for renewal, we may need to assume
higher deductibles or co-insurance liabilities, or pay higher premiums, which would increase our expenses and
reduce our net income.
Net capital requirements may impede the business operations of our subsidiaries.
Certain of our subsidiaries are subject to net capital requirements imposed by various federal, state, and foreign
authorities. Any significant change in the required net capital, an operating loss, or an extraordinary charge against
net capital could adversely affect the ability of our subsidiaries to expand or maintain their operations if we were
unable to make additional investments in them, which could impact our earnings.
We may be impacted adversely by claims or litigation, including claims or litigation relating to our fiduciary
responsibilities.
Our businesses involve the risk that clients or others may sue us, claiming that we or third parties for whom they say
we are responsible have failed to perform under a contract or otherwise failed to carry out a duty perceived to be
owed to them. Our trust and investment management businesses are particularly subject to this risk. Claims made
or actions brought against us, whether founded or unfounded, may result in lawsuits, injunctions, settlements,
damages, fines, or penalties, which could have a material adverse effect on our financial condition or results of
operations or require changes to our business. Even if we defend ourselves successfully, the cost of litigation is
often substantial, and public reports regarding claims made against us may cause damage to our reputation among
existing and prospective clients or negatively impact the confidence of counterparties, rating agencies and
stockholders, consequently affecting our earnings negatively.
We may be adversely affected by increased governmental and regulatory scrutiny or negative publicity.
Political and public sentiment regarding financial institutions has in the past resulted, and may in the future result, in
a significant amount of adverse press coverage, as well as adverse statements or charges by regulators or other
government officials. Press coverage and other public statements that assert some form of wrongdoing (including,
in some cases, press coverage and public statements that do not directly involve us) often result in some type of
investigation by regulators, legislators and law enforcement officials or in lawsuits. Responding to these
investigations and lawsuits, regardless of the ultimate outcome of the proceeding, is time-consuming and expensive
and can divert the time and effort of our senior management from our business. Penalties and fines sought by
regulatory authorities have increased substantially and certain regulators have been more likely in recent years to
commence enforcement actions or to support legislation targeted at the financial services industry. Governmental
authorities may also be more likely to pursue criminal or other actions, including seeking admissions of wrongdoing
or guilty pleas, in connection with the resolution of an inquiry or investigation to the extent a company is viewed as
having previously engaged in criminal, regulatory or other misconduct. Adverse publicity, governmental scrutiny and
legal and enforcement proceedings can also have a negative impact on our reputation and on the morale and
performance of our personnel, which could adversely affect our businesses and results of operations. The financial
services industry generally and asset management in particular have been subject to negative publicity. Our
reputation and businesses may be adversely affected by negative publicity or information regarding our businesses
and personnel, whether or not accurate or true, that may be posted on social media or other internet forums or
published by news organizations.
As noted above, we are subject to numerous laws and regulations governing privacy and the protection of personal
or other data in the U.S., EU and other jurisdictions we operate in. Any failure to properly safeguard and maintain
confidential data creates risk that we could be found to be in violation of laws and regulations and subject us to
disclosure obligations, regulatory investigations, actions or fines, and litigation.
Item 1B. Unresolved Staff Comments.
None.
Page 26
Item 1C. Cybersecurity.
Technology is a key component of our business operations, and cybersecurity is a significant consideration for the
firm. T. Rowe Price has a holistic firm-wide approach to risk management including material risks from cybersecurity
threats. The firm’s overall risk management activities are designed to identify, assess, report, and manage risks that
could affect the firm in achieving its objectives and goals. This risk management framework operates across our
business lines and integrates business operational resiliency and technology related risks such as cybersecurity
threats. As part of the firm’s risk identification and assessment framework, key risks from cybersecurity threats
specific to our environment are identified and assessed for adequacy of controls. Management identifies risk
inherent to cybersecurity threats, estimates the significance of the risks, assesses the likelihood of their occurrence,
establishes acceptable risk tolerance levels, and implements appropriate measures to monitor those risks. Action
plans may be developed for identified control issues and management is responsible for addressing these issues.
Although management is responsible for the firm’s day to day cybersecurity operations, the Board of Directors ("the
Board") oversees the firm’s cybersecurity program. The Board does not delegate this responsibility to a committee,
nor does the Board identify a cybersecurity expert to consider the firm’s activities and make recommendations or
provide advice to the Board. Instead, many of our directors have significant technology experience gained through
their prior work experience and through their positions on other boards of directors, all of which provides the Board
with insight and practical guidance in overseeing the firm’s technology and operations as well as our continuing
investment in and development of our cybersecurity program.
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. These executive leaders play a critical role in cybersecurity risk management and
strategy, as further described below.
The firm’s Chief Risk Officer (CRO) leads the Enterprise Risk program, providing the framework and tools used by
all business teams across the firm, including technology, to identify, assess, and manage risks from cybersecurity
threats in coordination with the firm's Chief Information Security Officer (CISO). The Enterprise Risk team provides
guidance and support in identifying, assessing, and monitoring all aspects of risks from cybersecurity threats. The
Enterprise Risk function conducts risk assessments for technology and cybersecurity, and coordinates with Internal
Audit and Global Compliance to provide risk assurance activities.
Enterprise Risk is primarily responsible for reporting risks from cybersecurity threats to executive leadership and our
Enterprise Risk Management Committee (ERMC). The ERMC supports the efforts of the CRO in providing
corporate-wide oversight of our firm’s risk management efforts and provides a path for risk escalation. This
committee monitors risk management activities, including cybersecurity matters, and reports periodically and more
frequently, as necessary, to our Board of Directors and Audit Committee. For example, at each quarterly meeting the
Audit Committee receives an update concerning the company’s cybersecurity metrics. In addition, at least annually
the Board receives a technology and cybersecurity update led by the senior management from the company’s
technology and information security teams. Cybersecurity risk management practices operate enterprise-wide,
across T. Rowe Price legal entities, including Oak Hill Advisors (OHA). 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. 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.
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. 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. Enterprise Security also conducts regular phishing tests and manages annual employee training
Page 27
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. The CISO regularly reviews the cybersecurity program and
strategy with various risk committees, including the ERMC, Management Committee, and the Audit Committee. This
ensures risks from cybersecurity threats are properly managed and our enterprise-wide cybersecurity program is
aligned with the business needs and defined risk tolerances or risk appetite.
The cybersecurity program includes regular assessment on the effectiveness of the firm's risk mitigation strategies.
Assessments include third-party validation to help ensure our internal controls and safeguards adhere to security
and compliance standards. We annually undergo external examinations, such as Sarbanes-Oxley relating to
financial reporting, System and Organization Controls (SOC) 1, and SOC 2 for key operational Business Units. In
addition, we periodically engage with third-party partners to perform an independent evaluation of our cybersecurity
program as well as external network penetration testing. This complements our internal assessments, such as
application security testing, vulnerability management, and penetration testing. The firm participates in various
industry threat intelligence information sharing forums to stay current on evolving cyber risks and threats. The
results of these assessments are discussed with and reviewed by the Audit Committee, and shared with the Board,
annually.
Within the firm's global risk department, governance processes are established, including a formal Supplier Risk
Management program overseeing third-party relationships based on documented risk thresholds. The Supplier Risk
Management program performs regular assessments, including information security reviews. Ongoing monitoring is
performed through our centralized risk function as well as by business line supplier managers to raise new threats
or weaknesses associated with a third-party service. In accordance with our Enterprise Incident Management
Policy, any third-party cybersecurity incident is reported and evaluated for further review and impact analysis.
We 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. 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.
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. We 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.
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.
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.
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.
Page 28
Item 3. Legal Proceedings.
For information about our legal proceedings, please see Note 16 to our audited consolidated financial statements in
Item 8. of this Form 10-K.
Item 4. Mine Safety Disclosures.
Not applicable.
Information about our Executive Officers.
The following information includes the names, ages, and positions of our executive officers as of February 14, 2025.
There are no arrangements or understandings pursuant to which any person serves as an officer. The first eleven
individuals are members of our management committee.
Robert W. Sharps (53), Chair of the Board since 2024, Chief Executive Officer since 2022, a Director and President
since 2021, Head of Investments from 2018 to 2021, Group Chief Investment Officer from 2017 to 2021, Co-Head
of Global Equity from 2017 to 2018, Lead Portfolio Manager, Institutional U.S. Large-Cap Equity Growth Strategy
from 2001 to 2016, and a Vice President from 2001 to 2021.
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. 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.
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. Jackson (62), Head of T. Rowe Price Investment Management since 2020, Associate Head of U.S
Equity from 2020 to 2021, and a Vice President since 2007.
Kimberly H. Johnson (52), Chief Operating Officer since 2022, and a Vice President since 2022. Prior to joining T.
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. 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.
Sebastien Page (48), Head of Global Multi-Asset and a Vice President since 2015 and Chief Investment Officer
since 2022.
Dorothy C. Sawyer (57), 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. Head of Global Equity and
Chief Investment Officer From 2022 to 2023, Co-Head of Global Equity from 2018 to 2021, Head of U.S. Equity from
2016 to 2021, Director of Equity Research North America from 2014 to 2015, and a Vice President since 2006.
Jessica M. Hiebler (49), Principal Accounting Officer since 2010, Controller since 2020 and a Vice President since
2009.
Page 29
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities.
Our common stock ($0.20 par value per share) trades on the NASDAQ Global Select Market under the symbol
TROW. 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. "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.
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. The share repurchase program does not
have an expiration date.
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. 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.
The following table details the changes in and status of the Board of Directors’ outstanding publicly announced
authorization.
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. 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.
Item 6. Reserved.
Page 30
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. 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.
Accordingly, fluctuations in financial markets and in the composition of assets under management affect our
revenues and results of operations.
We incur significant expenditures to develop new products and services and improve and expand our capabilities
and distribution channels in order to attract new clients and additional investments from our existing clients. These
efforts often involve costs that precede any future revenues we may recognize from an increase to our assets under
management.
The investment management industry has been evolving and industry participants are facing challenging trends
including passive investments taking market share from traditional active strategies; continued downward fee
pressure; demand for new investment vehicles to meet client needs; and an ever-changing regulatory landscape. In
this regard, we have ample liquidity and resources that allow us to take advantage of attractive growth opportunities.
We are investing in key capabilities, including investment professionals, distribution professionals, technologies, and
new product offerings in order to provide our clients with strong investment management expertise and service.
MARKET TRENDS.
U.S. stocks produced strong gains for the second consecutive year in 2024, and various equity indexes reached
new all-time highs during the year. The equity market was buoyed by generally favorable corporate earnings and by
continuing interest in companies expected to benefit from AI developments. Although inflation remained above the
Federal Reserve’s long-term 2% target, the central bank shifted its focus toward the moderating labor market in the
second half of the year and began reducing interest rates starting in September. In the final months of the year,
equity investors generally welcomed not only looser monetary policy, but also diminished political uncertainty
following U.S. elections in early November. Market volatility increased, however, as investors curtailed their
expectations for short-term interest rate cuts in 2025.
Developed non-U.S. equity markets were mostly positive in 2024, helped by looser monetary policies from various
central banks around the world. However, returns to U.S. investors were hurt by a stronger dollar versus major non-
U.S. currencies. In Europe, equity markets were widely mixed in U.S. dollar terms, whereas developed Asian
markets were mostly positive.
Emerging equity markets generally appreciated and outperformed stocks in developed non-U.S. markets in U.S.
dollar terms. Emerging Asian markets were mostly positive in dollar terms, though South Korean stocks fell sharply
due in large part to late-year political turmoil. Equities in the emerging Europe, Middle East, and Africa (EMEA)
region were also mostly positive. In Latin America, stocks in regional heavyweights Brazil and Mexico fell sharply,
though some smaller markets produced positive returns.
Page 31
S&P 500 Index
25.0%
NASDAQ Composite Index(1)
28.6%
Russell 2000 Index
11.5%
MSCI EAFE (Europe, Australasia, and Far East) Index
4.4%
MSCI Emerging Markets Index
8.1%
(1) Returns exclude dividends
Global bond returns were mostly positive in 2024, as many central banks around the world reduced short-term
interest rates due to easing inflation pressures. In the U.S., Treasury bill yields declined as the Federal Reserve
reduced the federal funds target rate by 100 basis points (1.00%) in three steps starting in mid-September.
Intermediate- and long-term U.S. Treasury yields fluctuated throughout the year, but ultimately increased for the
year amid expectations for fewer interest rate cuts in 2025 due to inflation remaining above the Federal Reserve’s
2% long-term goal. The 10-year U.S. Treasury note yield was 4.58% at December 31, 2024 compared to 3.88% at
December 31, 2023 .
In the U.S. investment-grade universe, sector performance was broadly positive. Non-agency commercial
mortgage-backed securities and asset-backed securities produced solid gains. Corporate bonds rose to a lesser
degree. Mortgage-backed securities performed in line with the broad investment-grade market. Treasuries lagged
with slight positive returns. Tax-free municipal bonds slightly trailed the broad taxable bond market. High yield
corporate bonds produced solid gains and strongly outperformed the investment-grade bond market.
Bonds in developed non-U.S. markets produced negative returns in U.S. dollar terms due to weaker currencies
versus the dollar and rising bond yields in some countries. Easing inflation pressures enabled central banks in
Europe and the UK to reduce interest rates a few times. In Japan, longer-term interest rates rose as the Bank of
Japan increased short-term rates in March, ending a multi-year period of negative interest rates. The Bank of Japan
also unexpectedly raised rates at the end of July. In the emerging markets fixed income universe, dollar-
denominated bonds produced gains in U.S. dollar terms, but local currency bonds produced negative returns, as
most developing markets currencies declined versus the dollar.
Returns of several major bond market indexes for 2024 are as follows:
Bloomberg Barclays U.S. Aggregate Bond Index
1.3%
J.P. 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.
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.
Returns of several major equity market indexes for 2024 are as follows:
Page 32
(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.
(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. 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.
Investment advisory clients outside the U.S. accounted for 8.8% of our assets under management at December 31,
2024, 8.6% at December 31, 2023, and 9.1% at December 31, 2022.
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
The following table details changes in our assets under management by asset class during the last three years:
Page 33
Our net cash outflows in 2024 were driven primarily by growth-oriented equity strategies and a multi-asset sub-
advised variable annuity outflow. These outflows were partially offset by net cash inflows in our target date
retirement products, fixed income and alternative strategies. Financial intermediaries were the main sources of net
outflows in 2024. 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
alternative strategies. From a geography perspective, net outflows were predominantly from U.S. clients invested in
equity strategies though all regions experienced net outflows. For 2022, net outflows were driven primarily by our
growth-oriented equity strategies sourced from U.S. intermediaries. These outflows were partially offset by net cash
inflows in our international fixed income, multi-asset, and alternative strategies. From a geographical perspective,
the Americas and EMEA regions experienced net outflows predominantly in equities, while APAC had positive net
flows.
We provide strategic investment advice solutions for certain portfolios. These advice solutions, the vast majority of
which are overseen by our multi-asset division, may include strategic asset allocation, and in certain portfolios,
asset selection and/or tactical asset allocation overlays. We also offer advice solutions through retail separately
managed accounts and separately managed accounts model delivery. As of December 31, 2024, total assets in
these solutions were $557 billion, of which $542 billion are reported in assets under management in the tables
above.
We provide participant accounting and plan administration for defined contribution retirement plans that primarily
invest in the firm's U.S. mutual funds, collective investment trusts and funds managed outside of the firm's complex.
As of December 31, 2024, our assets under administration were $282 billion, of which $159 billion were assets we
manage.
INVESTMENT PERFORMANCE(1).
Strong investment performance and brand awareness is a key driver to attracting and retaining assets—and to our
long-term success. The following table presents investment performance for the one-, three-, five-, and 10-years
ended December 31, 2024. Past performance is no guarantee of future results.
% of U.S. mutual funds that outperformed Morningstar median(2),(3)
1 year
3 years
5 years
10 years
Equity
51%
51%
46%
67%
Fixed Income
48%
52%
55%
63%
Multi-Asset
63%
63%
69%
82%
All Funds
54%
56%
56%
70%
% of U.S. mutual funds that outperformed passive peer median(2),(4)
1 year
3 years
5 years
10 years
Equity
55%
47%
43%
55%
Fixed Income
52%
52%
61%
63%
Multi-Asset
55%
60%
68%
64%
All Funds
54%
53%
56%
60%
% of composites that outperformed benchmarks(5)
1 year
3 years
5 years
10 years
Equity
39%
29%
40%
61%
Fixed Income
60%
45%
56%
73%
All Composites
48%
36%
46%
65%
Page 34
AUM Weighted Performance
% of U.S. mutual funds AUM that outperformed Morningstar median(2),(3)
1 year
3 years
5 years
10 years
Equity
57%
58%
49%
80%
Fixed Income
66%
62%
64%
78%
Multi-Asset
70%
68%
90%
94%
All Funds
61%
61%
59%
83%
% of U.S. mutual funds AUM that outperformed passive peer median(2),(4)
1 year
3 years
5 years
10 years
Equity
64%
36%
29%
55%
Fixed Income
68%
68%
85%
73%
Multi-Asset
71%
58%
95%
95%
All Funds
66%
43%
48%
66%
% of composites AUM that outperformed benchmarks(5)
1 year
3 years
5 years
10 years
Equity
50%
21%
42%
53%
Fixed Income
65%
37%
47%
69%
All Composites
52%
24%
43%
55%
As of December 31, 2024, 54 of 90 (60.0%) of our rated U.S. mutual funds (across primary share classes) received
an overall rating of 4 or 5 stars. 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. 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. Neither Morningstar nor its content providers are responsible for any damages or
losses arising from any use of this information.
(3) Source: Morningstar. Primary share class only. Excludes money market mutual funds, funds with an operating history of less than one year, T. Rowe Price passive
funds, and T. Rowe Price funds that are clones of other funds. 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. 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. 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. 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. 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. Rowe Price composites with 1 year, 3 year, 5 year, and 10 year track record
that are outperforming their benchmarks. The bottom chart reflects the percentage of T. Rowe Price composite AUM that has outperformed for the time periods
indicated. 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. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's
monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. Morningstar gives its best ratings of 5 or 4 stars
to the top 32.5% of all funds (of the 32.5%,10% get 5 stars and 22.5% get 4 stars). 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 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.
Page 35
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. GAAP basis
Investment advisory fees(2)
$ 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(3)
$
46.6
$
161.9
$
(54.3) $
(115.3)
n/m $
216.2
n/m
Net revenues
$ 7,093.6
$ 6,460.5
$ 6,488.4 $
633.1
9.8 % $
(27.9)
(0.4) %
Operating expenses
$ 4,760.3
$ 4,474.3
$ 4,114.7 $
286.0
6.4 % $
359.6
8.7 %
Net operating income
$ 2,333.3
$ 1,986.2
$ 2,373.7 $
347.1
17.5 % $
(387.5)
(16.3) %
Non-operating income
$
486.3
$
504.1
$ (425.5) $
(17.8)
(3.5) % $
929.6
n/m
Net income to T. Rowe Price Group
$ 2,100.1
$ 1,788.7
$ 1,557.9 $
311.4
17.4 % $
230.8
14.8 %
Diluted earnings per common share $
9.15
$
7.76
$
6.70 $
1.39
17.9 % $
1.06
15.8 %
Adjusted basis(4)
Operating expenses
$ 4,498.8
$ 4,260.7
$ 4,087.8 $
238.1
5.6 % $
172.9
4.2 %
Operating expenses, excluding
accrued carried interest related
compensation
$ 4,456.3
$ 4,190.7
$ 4,070.2 $
265.6
6.3 % $
120.5
3.0 %
Net operating income
$ 2,685.9
$ 2,263.2
$ 2,500.5 $
422.7
18.7 % $
(237.3)
(9.5) %
Non-operating income (loss)
$
148.7
$
140.8
$
(24.4) $
7.9
5.6 % $
165.2
n/m
Net income to T. 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).
(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.
Results Overview - 2024 compared to 2023
Investment advisory fees are earned based on the value and composition of our assets under management, which
change based on fluctuations in financial markets, investment performance, and net cash flows. As our average
assets under management increase or decrease in a given period, the level of our investment advisory fees for that
same period generally fluctuate in a similar manner. Our annualized effective fee rates can be impacted by market
or cash flow related shifts among asset and share classes, shifts among vehicles, price changes in existing
products, and asset level changes in products with tiered-fee structures.
Investment advisory fees earned in 2024 increased 12.1% compared to 2023 as average assets under
management increased $199.6 billion, or 14.7%, to $1,561.9 billion.
The average annualized effective fee rate, excluding performance-based advisory fees, earned on our assets under
management was 41.0 basis points in 2024, compared to 41.9 basis points earned in 2023. Our effective fee rate
has declined largely due to a mix shift in assets toward lower fee products and asset classes from client flows and
transfers, partially offset by higher market returns. The average annualized fee rate, excluding performance-based
fees, was 40.5 basis points for the fourth quarter of 2024.
Operating expenses were $4,760.3 million in 2024, an increase of 6.4% compared to 2023. The increase was
primarily driven by higher compensation costs, distribution and servicing costs, and advertising and promotion
costs. Additionally, 2023 included a $82.4 million reduction in operating expenses related to the remeasurement of
the contingent consideration liability compared to a $13.4 million reduction in 2024.
Page 36
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. 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.
We currently estimate our 2025 non-GAAP operating expenses, excluding non-GAAP accrued carried interest
compensation, will grow in the range of 4%-6% from the 2024 amount of $4,456.3 million. We could elect to adjust
our expense growth should unforeseen circumstances arise, including significant market movements.
Operating margin was 32.9% in 2024 compared to 30.7% in 2023. The increase is primarily driven by net revenue
growth outpacing operating expense growth primarily due to higher average assets under management.
Diluted earnings per share was $9.15 in 2024 compared to $7.76 in 2023. The increase in GAAP basis diluted
earnings per share was primarily due to higher operating income and a lower effective tax rate.
On a non-GAAP basis, diluted earnings per share was $9.33 in 2024 compared to $7.59 in 2023. The increase was
primarily due to higher operating income and a lower effective tax rate.
See our non-GAAP reconciliations later in this Management's Discussion and Analysis section.
Results Overview - 2023 compared to 2022
Investment advisory fees are earned based on the value and composition of our assets under management, which
change based on fluctuations in financial markets and net cash flows. As our average assets under management
increase or decrease in a given period, the level of our investment advisory fees for that same period generally
fluctuates in a similar manner. 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.
Investment advisory fees earned in 2023 decreased 3.7% over the comparable 2022 period as average assets
under our management decreased $36.1 billion, or 2.6%, to $1,362.3 billion.
The average annualized effective fee rate earned on our assets under management was 41.9 basis points in 2023,
compared to 42.6 basis points earned in 2022. Our effective fee rate has declined largely due to a mix shift toward
lower fee asset classes and vehicles as a result of net equity outflows, partially offset by higher market returns. The
average annualized fee rate earned on our assets under management was 41.5 basis points for the fourth quarter
of 2023.
Operating expenses were $4,474.3 million in 2023, an increase of 8.7% over the comparable 2022 period. The
impact of market movements on the supplemental savings plan liability accounted for about 70% of the increase in
U.S. GAAP operating expenses. Non-operating income has a corresponding increase due to our economic hedge of
the liability.
On a non-GAAP basis, operating expenses were $4,260.7 million, a 4.2% increase over the comparable 2022
period. The increase in our non-GAAP operating expenses was primarily driven by higher costs across
compensation and benefits, accrued carried interest related compensation expense, technology, facility, advertising,
and professional fees. These increases were offset in part by higher capitalized labor, lower stock-based
compensation, and a non-recurring recovery of general and administrative costs incurred in 2022.
Operating margin was 30.7% in 2023, compared to 36.6% in 2022. The decrease in our operating margin in 2023
compared to 2022 is primarily driven by a decrease in investment advisory fees as a result of lower average assets
under management and higher operating expenses.
Page 37
Diluted earnings per share. Diluted earnings per share was $7.76 in 2023 compared to $6.70 in 2022. The increase
in 2023 GAAP basis diluted earnings per share from 2022 was primarily due to net investment income in 2023
compared to net investment losses in 2022. These increases were partially offset by lower operating income and a
higher effective tax rate.
On a non-GAAP basis, diluted earnings per share was $7.59 in 2023 compared to $8.02 in 2022. The decrease in
2023 was primarily due to lower operating income and a higher effective tax rate. These decreases were offset by
net investment income earned on our cash and discretionary investment portfolio in 2023 compared to net
investment losses in 2022.
See our non-GAAP reconciliations later in this Management's Discussion and Analysis section.
Net 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.
(2) Performance-based advisory fees were previously included in investment advisory fees. Prior periods were recast to reflect this change.
Investment advisory fees. The relationship between the change in average assets under management and the
change in investment advisory fees for 2024, 2023 and 2022 are presented above.
In 2024, the increase in investment advisory fees was due to higher average AUM as stronger market returns and
appreciation were offset by net outflows over the last two years.
In 2023, the decline in overall advisory revenues was driven by lower average AUM and a mix shift toward lower fee
asset classes and vehicles. A lower starting AUM and net outflows in 2023 were the primary drivers of a lower
average AUM in 2023. These impacts were partially offset by stronger overall market returns in 2023.
Performance-based advisory fees in each period were primarily related to alternative strategies.
Page 38
Capital allocation-based income increased net revenues by $46.6 million. 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. The firm realized carried interest of $139.6 million compared to
$109.8 million in the 2023 period.
For 2023, capital allocation-based income increased net revenues by $161.9 million. This amount includes an
increase of $223.2 million in accrued carried interest, partially offset by $61.3 million of non-cash amortization and
impairments related to the difference in the acquisition closing date fair value and the carrying value on the date
they were acquired.
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. In 2024, the compensation expense was $5.4 million, consisting of $42.5 million related to the
accrued carried interest offset in part by $37.1 million in amortization and impairment charges. 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. The increase was primarily driven by higher average assets on which we earn non-discretionary advisory
services revenue and higher transfer agent servicing activities provided to the T. Rowe Price mutual funds.
For 2023, the decrease was primarily driven by lower transfer agent servicing activities provided to the T. Rowe
Price mutual funds, and lower 12b-1 revenue earned from the Advisor and R share classes of the U.S. mutual funds
as a result of lower average assets under management in these share classes. The decrease in 12b-1 revenue was
offset entirely by a decrease in the costs paid to third-party intermediaries that source these assets and is reported
in distribution and servicing expense.
Net revenues are presented after the elimination of $3.6 million for 2024, $2.1 million for 2023, and $2.0 million for
2022, earned from our consolidated investment products. The corresponding expenses recognized by these
consolidated investment products were also eliminated from operating expenses.
Page 39
2024 compared to 2023
2023 compared to 2022
(in millions)
2024
2023
2022
$ Change
% Change
$ Change
% Change
Compensation, benefits, and
related costs
$ 2,603.4
$ 2,450.7
$ 2,405.8
$
152.7
6.2 % $
44.9
1.9 %
Acquisition-related retention
agreements
44.8
55.0
70.2
(10.2)
(18.5) %
(15.2)
(21.7) %
Capital allocation-based income
compensation
5.4
44.6
(22.9)
(39.2)
n/m
67.5
n/m
Deferred compensation liabilities
104.3
123.2
(132.3)
(18.9)
(15.3) %
255.5
n/m
Compensation and related costs
2,757.9
2,673.5
2,320.8
84.4
3.2 %
352.7
15.2 %
Distribution and servicing costs
354.1
289.9
301.5
64.2
22.1 %
(11.6)
(3.8) %
Advertising and promotion
129.6
114.2
97.3
15.4
13.5 %
16.9
17.4 %
Product and recordkeeping related
costs
297.5
291.0
300.1
6.5
2.2 %
(9.1)
(3.0) %
Technology, occupancy, and facility
costs
644.1
632.6
560.5
11.5
1.8 %
72.1
12.9 %
General, administrative, and other
433.8
421.3
412.2
12.5
3.0 %
9.1
2.2 %
Change in fair value of contingent
consideration
(13.4)
(82.4)
(161.2)
69.0
(83.7) %
78.8
(48.9) %
Acquisition-related amortization and
impairment costs
156.7
134.2
283.5
22.5
16.8 %
(149.3)
(52.7) %
Total operating expenses
$ 4,760.3
$ 4,474.3
$ 4,114.7
$
286.0
6.4 % $
359.6
8.7 %
Total adjusted operating expenses(1) $ 4,498.8
$ 4,260.7
$ 4,087.8
$
238.1
5.6 % $
172.9
4.2 %
(1) 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.
Compensation, benefits and related costs were $2,603.4 million, an increase of $152.7 million, or 6.2%, compared
to 2023. The increase was driven by a higher bonus pool on an increase in revenue and higher salaries and related
benefits partially offset by higher capitalized labor and lower other employee related costs. The firm employed 8,158
associates at December 31, 2024, an increase of 3.2% from the end of 2023.
For 2023, compensation, benefits and related costs were $2,450.7 million, an increase of $44.9 million, or 1.9%,
compared to 2022. The increase was driven by $99.1 million in higher salaries and related benefits as a result of
base salary increases in January 2023 and July 2022. These increases were offset by higher capitalized labor,
lower non-cash stock-based compensation, and lower other employee-related costs.
Distribution and servicing costs were $354.1 million for 2024, an increase of $64.2 million, or 22.1%, compared to
$289.9 million in 2023. The increase was primarily driven by higher average assets under management distributed
through intermediaries.
For 2023, distribution and services costs were $289.9 million, a decrease of $11.6 million, or 3.8%, compared to
2022. The decrease was primarily driven by lower average assets under management in certain share classes of
the U.S. mutual funds that earn 12b-1 fees and SICAVs. These decreases were partially offset by higher costs
incurred to distribute certain products through U.S. intermediaries as the average assets under management in
these products were higher.
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. These costs were offset entirely by the distribution revenue we earn and report in net
revenues: 12b-1 revenue is recognized in administrative, distribution, and servicing fees for the Advisor and R share
classes of the U.S. mutual funds and investment advisory fees for our international products.
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. The increase was primarily driven by higher media advertising and agency costs in 2023.
Operating expenses
Page 40
Product and recordkeeping related costs were $297.5 million for 2024, an increase of $6.5 million, or 2.2%,
compared to 2023. The increase was primarily driven by higher product related costs to be reimbursed from our
sponsored investment products partially offset by lower recordkeeping related costs.
For 2023, product and recordkeeping related costs were $291.0 million for 2023, a decrease of $9.1 million, or
3.0%, compared to 2022. The decrease was driven by lower recordkeeping related costs.
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.
For 2023, technology, occupancy, and facility costs were $632.6 million, an increase of $72.1 million or 12.9%,
compared to 2022. The increase was primarily due to ongoing investment in our technology capabilities, including
depreciation and hosting solution licenses, and increased office facility costs, mainly related to rent expense
associated with a new London office that we began leasing in the second half of 2022 and occupied in September
2023.
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. In 2024, the firm changed its approach to paying for external research,
consistent with regulations and general industry practice.
For 2023, general, administrative, and other costs were $421.3 million, an increase of $9.1 million or 2.2%
compared to 2022. The increase was primarily due to higher professional fees and travel costs, partially offset by a
$20.8 million recovery of nonrecurring costs that were incurred in 2022.
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. 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.
Acquisition-related amortization and impairment costs primarily relate to the indefinite- and definite-lived intangible
assets identified and separately recognized, at fair value, on acquisition date. In 2024, we recognized acquisition-
related amortization and impairment costs of $156.7 million, an increase of $22.5 million or 16.8%, compared to
2023. The increase was primarily driven by impairment charges related to the trade name intangible asset.
For 2023, we recognized acquisition-related amortization and impairment costs of $134.2 million, a decrease of
$149.3 million, compared to 2022. The decrease was primarily driven by an insignificant amount of impairment
charges in 2023 for certain intangibles compared to $175.1 million in 2022.
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. Should
conditions that led us to recognize these impairment charges worsen, additional impairments may be recognized in
future periods.
Page 41
Non-operating income (loss)
Non-operating income was $486.3 million in 2024 compared to $504.1 million in 2023 and a non-operating loss of
$425.5 million in 2022. 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. GAAP measures at the end of the Results of Operations section of this Management's
Discussion and Analysis.
In 2024 and 2023, strong market returns contributed to the increased valuation and gains of our investment
portfolio, along with higher cash balances and interest rates increased dividend income. In 2022, our overall
investment portfolio valuations were negatively impacted by market declines caused by the continued elevated
inflation, supply chain disruptions, and a more aggressive pace of Federal Reserve interest rate increases.
Page 42
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.
(2) Net income attributable to redeemable non-controlling interests represents the portion of earnings held in the firm's consolidated investment
products, which are not taxable to the firm despite being included in pre-tax income.
Our effective tax rate for 2024 was 24.3%, compared to 26.3% for 2023 and 25.6% for 2022. The decrease in our
effective tax rate in 2024 from 2023 was primarily due to lower valuation allowances recognized in 2024. These
favorable impacts were slightly offset by higher state taxes.
For 2023, the increase in our effective tax rate from 2022 was primarily due to an increase in the valuation
allowances recorded mainly against UK-based deferred tax assets, including net operating losses, and a decrease
in discrete tax benefits associated with option exercises and restricted stock vests. These unfavorable impacts were
partially offset by a favorable impact of net gains attributable to redeemable non-controlling interests held in our
consolidated investment products and state tax liability settlements.
The non-GAAP tax rate primarily adjusts for the impact of the consolidated investment products, including net
income attributable to redeemable non-controlling interests. Our non-GAAP effective tax rates were 24.5% for 2024,
27.2% for 2023, and 24.7% for 2022.
Page 43
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. 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. 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.
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.
The Organization of Economic Co-operation and Development has issued Pillar Two Model Rules (Pillar Two)
introducing a global 15% minimum tax effective January 1, 2024 within certain countries where we operate. For
countries that have adopted Pillar Two in 2024, it did not have a material impact on the company's consolidated
results of operations, cash flows, and overall financial position. We will continue to monitor and evaluate the impacts
of future Pillar Two legislation proposed or enacted in jurisdictions that have not yet adopted the rules.
NON-GAAP INFORMATION AND RECONCILIATION.
We believe the non-GAAP financial measures below provide relevant and meaningful information to investors about
our core operating results. These measures have been established in order to increase transparency for the
purpose of evaluating our core business, for comparing current results with prior period results, and to enable more
appropriate comparison with industry peers. However, non-GAAP financial measures should not be considered a
substitute for financial measures calculated in accordance with U.S. GAAP and may be calculated differently by
other companies.
The following schedules reconcile certain U.S. GAAP financial measures for each of the last three years.
2024
(in millions, except per-share amount)
Operating
expenses
Net
operating
income
Non-
operating
income
(loss)
Provision
(benefit) for
income
taxes(6)
Net income
attributable to
T. Rowe Price
Group, Inc.
Diluted
earnings per
share(7)
U.S. 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
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. Rowe Price
Group, Inc.
Diluted
earnings per
share(7)
U.S. 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. Rowe Price
Group, Inc.
Diluted
earnings per
share(7)
U.S. GAAP Basis (FS line item)
$ 4,114.7 $ 2,373.7 $
(425.5) $
498.6 $
1,557.9 $
6.70
Non-GAAP adjustments:
Acquisition-related:
Investment and NCI amortization
and impairments(1) (Capital
allocation-based income and
Compensation and related costs)
40.5
57.5
—
15.5
42.0
0.18
Acquisition-related retention
arrangements(1) (Compensation
and related costs)
(70.2)
70.2
—
18.9
51.3
0.22
Contingent consideration(1)
161.2
(161.2)
—
(43.3)
(117.9)
(0.52)
Intangible assets amortization and
impairments(1)
(283.5)
283.5
—
76.2
207.3
0.89
Transaction costs(2) (General,
administrative and other)
(0.9)
0.9
—
0.2
0.7
0.01
Total acquisition-related
(152.9) —
250.9 —
— —
67.5 —
183.4 —
0.78
Deferred compensation liabilities(3)
(Compensation and related costs)
132.3
(132.3)
139.4
1.9
5.2
0.02
Consolidated investment products(4)
(6.3)
8.2
203.5
27.8
75.6
0.33
Other non-operating income(5)
—
—
58.2
15.5
42.7
0.19
Adjusted Non-GAAP Basis
$ 4,087.8 $ 2,500.5 $
(24.4) $
611.3 $
1,864.8 $
8.02
(1)
These non-GAAP adjustments remove the impact of acquisition-related amortization and costs, including amortization of
intangible assets, the recurring fair value remeasurements of the contingent consideration liability, amortization of acquired
investment and non-controlling interest basis differences and amortization of compensation-related arrangements. We
believe adjusting for these charges helps the reader's ability to understand our core operating results and increases
comparability period to period.
Page 45
(2)
This non-GAAP adjustment removes acquisition-related transactions costs. We believe adjusting for these charges helps the
reader's ability to understand our core operating results and increases comparability period to period.
(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.
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. 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.
(4)
This non-GAAP adjustment removes the impact the consolidated investment products have on our U.S. GAAP consolidated
statements of income. Specifically, we add back the operating expenses and subtract the investment income of the
consolidated investment products. The adjustment to operating expenses represents the operating expenses of the
consolidated investment products, net of the elimination of related investment advisory and administrative fees. The
adjustment to net income attributable to T. Rowe Price Group, Inc. represents the net income of the consolidated investment
products, net of redeemable non-controlling interests. 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.
(5)
This non-GAAP adjustment represents non-operating income (loss) and the net gains (losses) earned on the firm's
investment portfolio that are not designated as economic hedges of the deferred compensation liabilities and that are not
part of the cash and discretionary investment portfolio. We retain in our non-GAAP measures the investment gains
recognized on the cash and discretionary investments as these assets and related income (loss) are considered part of the
firm's core operations. We believe adjusting for the remaining non-operating income (loss) helps the reader’s ability to
understand the firm's core operating results and increases comparability period to period. Additionally, we do not emphasize
the impact of this portion of non-operating income (loss) when managing and evaluating the firm's performance.
(6)
The income tax impacts were calculated in order to achieve an overall non-GAAP effective tax rate of 24.5% for 2024,
27.2% for 2023 and 24.7% for 2022.
(7)
This non-GAAP measure was calculated by applying the two-class method to adjusted net income attributable to
T. Rowe Price Group and dividing by the weighted-average common shares outstanding assuming dilution. The calculation
of net income allocated to common stockholders is as follows:
Year ended
(in millions)
2024
2023
2022
Adjusted net income attributable to T. 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, 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 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
$
5,480.1 $
4,795.8
Page 46
Our discretionary investment portfolio is comprised primarily of short duration fixed income ETFs, which typically
yield higher than money market rates. Of our cash and cash equivalents, $653.9 million at December 31, 2024, and
$699.0 million at December 31, 2023 were held by our subsidiaries located outside the U.S. Our cash and
discretionary investment portfolio experienced market gains of $148.7 million in 2024 and $140.8 million in 2023.
Given the availability of our financial resources and cash expected to be generated through future operations, we do
not maintain an available external source of additional liquidity.
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. 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.
(in millions)
Cash and
cash
equivalents
Investments
Net assets of
consolidated
investment
products(1)
Total
Cash and discretionary investments
$
2,649.8 $
319.6 $
137.5 $
3,106.9
Seed capital investments
—
391.6
870.7
1,262.3
Investments used to hedge the deferred compensation
liabilities
—
1,081.2
29.7
1,110.9
Total cash and investments in T. Rowe Price products
attributable to T. Rowe Price Group, Inc.
2,649.8
1,792.4
1,037.9
5,480.1
Investments in affiliated private investment funds(2)
—
696.8
—
696.8
Investments in CLOs
—
67.4
—
67.4
Investment in UTI and other investments
—
443.9
—
443.9
Total cash and investments attributable to T. Rowe Price
Group, Inc.
2,649.8
3,000.5
1,037.9
6,688.2
Redeemable non-controlling interests
—
—
944.0
944.0
As reported on consolidated balance sheet at
December 31, 2024
$
2,649.8 $
3,000.5 $
1,981.9 $
7,632.2
(1)The consolidated investment products are generally those products we provided seed capital at the time of their formation and we have a controlling interest. The
$1,037.9 million represents the total value at December 31, 2024 of our interest in the consolidated investment products. The total net assets of the investment
products at December 31, 2024 of $1,981.9 million includes assets of $2,044.0 million, less liabilities of $62.1 million as reflected in the consolidated balance sheet
in Item 8. Financial Statements of this Form 10-K.
(2) Includes $160.7 million of non-controlling interests in consolidated entities and represents the portion of these investments, held by third parties, that we cannot
sell in order to obtain cash for general operations.
Our consolidated balance sheet reflects the assets and liabilities of those investment products we consolidate, as
well as redeemable non-controlling interests for the portion of these investment products that are held by unrelated
third-party investors. Although we can redeem our net interest in these investment products at any time, we cannot
directly access or sell the assets held by the products to obtain cash for general operations. Additionally, the assets
of these investment products are not available to our general creditors. Our interest in these investment products
was primarily used as initial seed capital and is recategorized as discretionary when it is determined by
management that the seed capital is no longer needed. 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.
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. We generally repurchase our common stock over time
to offset the dilution created by our equity-based compensation plans.
Page 47
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. 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. 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.
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
2023
(in millions)
Cash flow
attributable to
T. Rowe Price
Group, Inc.
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
2022
(in millions)
Cash flow
attributable to
T. Rowe Price
Group, Inc.
Cash flow
attributable to
consolidated
investment
products
Eliminations
As reported
Cash flows from operating activities
Net income (loss)
$
1,557.9
$
(211.7) $
103.4
$
1,449.6
Adjustments to reconcile net income (loss) to net cash provided
by (used in) operating activities
Depreciation, amortization and impairments of property,
equipment and software
225.7
—
—
225.7
Amortization and impairment of acquisition-related assets and
retention agreements
420.1
—
—
420.1
Fair value remeasurement of contingent consideration liability
(161.2)
—
—
(161.2)
Stock-based compensation expense
285.4
—
—
285.4
Net (gains) losses recognized on investments
314.0
—
(103.4)
210.6
Total non-cash adjustments
1,084.0
—
(103.4)
980.6
Net investments in sponsored investment products used to
economically hedge deferred compensation liabilities
(18.8)
—
—
(18.8)
Net change in trading securities held by consolidated investment
products
—
87.9
—
87.9
Other changes
(182.8)
46.6
(3.7)
(139.9)
Net cash provided by (used in) operating activities
2,440.3
(77.2)
(3.7)
2,359.4
Net cash provided by (used in) investing activities
(179.3)
(8.7)
146.5
(41.5)
Net cash provided by (used in) financing activities
(2,028.5)
94.4
(142.8)
(2,076.9)
Effect of exchange rate changes on cash and cash equivalents of
consolidated investment products
—
9.5
—
9.5
Net change in cash and cash equivalents during year
232.5
18.0
—
250.5
Cash and cash equivalents at beginning of year
1,523.1
101.1
—
1,624.2
Cash and cash equivalents at end of year
$
1,755.6
$
119.1
$
—
$
1,874.7
Operating activities
During 2024, operating activities attributable to T. Rowe Price Group, Inc. provided cash flows of $2,313.9 million,
an increase of $255.3 million from $2,058.6 million provided during 2023. The increase was primarily driven by a
$311.4 million increase in net income and a $215.6 million increase in the add-back for non-cash items as detailed
in the 2024 table above. These increases to operating cash flows were offset in part by a $158.8 million decrease in
cash flows related to timing differences associated with the cash settlement of our assets and liabilities. Additionally,
in 2024, we made $112.9 million more net investments in sponsored investment products used to economically
hedge our deferred compensation liabilities compared to 2023. 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 decrease was primarily driven by a
$986.5 million decrease in the add-back for non-cash items as detailed in the 2023 table above. These decreases to
operating cash flows were offset in part by a $230.8 million increase in net income and $365.5 million increase in
cash flows related to timing differences associated with the cash settlement of our assets and liabilities. Additionally,
in 2023, we expended $8.5 million less in net investments in sponsored investment products used to economically
hedge our deferred compensation liabilities compared to 2022. The remaining change in reported cash flows from
operating activities was attributable to the net change in trading securities held in our consolidated investment
products’ underlying portfolios.
Page 50
Investing activities
Net cash used in investing activities that are attributable to T. Rowe Price Group Inc. totaled $187.9 million in 2024
compared to $310.2 million in 2023. Net investing activities from our investments in sponsored investment products
generated net proceeds of $407.1 million in 2024 compared to $36.1 million in 2023. In 2024, we increased our
property and equipment expenditures by $115.5 million and our other investing activity by $133.2 million. We
eliminate our capital in those investment products we consolidate in preparing our consolidated statements of cash
flows. 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. During 2023, net proceeds from the sale of investments of $36.1 million were
lower compared to $62.0 million during 2022. In 2023, we increased our property and equipment expenditures by
$70.3 million and our other investing activity by $34.7 million. We eliminate our capital in those investment products
we consolidate in preparing our consolidated statements of cash flows. The remaining change in reported cash
flows from investing activities of $48.1 million is primarily related to the net cash removed from our balance sheet
from consolidating and deconsolidating investment products.
Financing Activities
Net cash used in financing activities attributable to T. Rowe Price Group totaled $1,542.8 million in 2024 compared
to $1,437.4 million in 2023. During 2024, we used $337.2 million to repurchase nearly 3.0 million shares compared
to $254.4 million to repurchase 2.4 million shares in 2023. The $13.9 million increase in dividends paid in 2024 was
a result of the 1.6% increase in our quarterly dividend per share. In addition, in 2024, net distributions to non-
controlling interests in consolidated entities decreased by $6.6 million and cash flow related to common stock
issued under stock compensation plans decreased by $15.3 million compared to 2023. The remaining change in
reported cash flows from financing activities is attributable to a $247.4 million increase in net subscriptions from
redeemable non-controlling interest holders of our consolidated investment products during 2024.
Net cash used in financing activities attributable to T. Rowe Price Group totaled $1,437.4 million in 2023 compared
to $2,028.5 million in 2022. During 2023, we used $254.4 million to repurchase 2.4 million shares compared to
$849.8 million to repurchase 6.8 million shares in 2022. The $14.3 million increase in dividends paid in 2023 is a
result of the 1.7% increase in our quarterly dividend per share in 2023. In addition, net distributions to non-
controlling interests in consolidated entities increased by $8.2 million and cash flow related to common stock issued
under stock compensation plans increased by $18.2 million during 2023 compared to 2022. 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.
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. 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. Additionally, there are unrecognized tax benefits
discussed in Note 10 to our consolidated financial statements. The note references above are in Item 8. of this Form
10-K.
While most of our other material cash commitments consist of goods and services used in our operations, these
commitments primarily consist of obligations related to long-term software licensing and maintenance contracts,
construction in process, and service contracts.
We also have outstanding commitments to fund additional contributions to investment partnerships totaling $202.5
million. The vast majority of these additional contributions will be made to investment partnerships in which we have
Page 51
an existing investment. In addition to such amounts, a percentage of prior distributions may be called under certain
circumstances.
As part of the OHA acquisition, T. Rowe Price committed $500 million to fund OHA product launches through 2026.
As of December 31, 2024, T. Rowe Price has $360 million remaining to commit to OHA products. T. Rowe Price has
also entered into certain earnout and other arrangements as part of that acquisition. For more detail on these
arrangements, see Note 5 and Note 16 to our consolidated financial statements in Item 8. of this Form 10-K.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES.
The preparation of financial statements often requires the selection of specific accounting methods and policies
from among several acceptable alternatives. Further, significant estimates and judgments may be required in
selecting and applying those methods and policies in the recognition of the assets and liabilities in our consolidated
balance sheets, the revenues and expenses in our consolidated statements of income, and the information that is
contained in our significant accounting policies and notes to the consolidated financial statements. These policies
and estimates are considered critical because they had a material impact or are reasonably likely to have a material
impact on our consolidated financial statements and because they require management to make significant
judgments, assumptions or estimates. Making these estimates and judgments requires the analysis of information
concerning events that may not yet be complete and of facts and circumstances that may change over time.
Accordingly, actual amounts or future results can differ materially from those estimates that we currently include in
our consolidated financial statements, significant accounting policies, and notes.
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.
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"). VIEs are entities that lack sufficient equity
to finance its activities or the equity holders do not have defined power to direct the activities of the entity normally
associated with an equity investment. Our analysis to determine whether an entity is a VIE or a voting interest entity
("VOE") involves judgment and considers several factors, including an entity’s legal organization, capital structure,
the rights of the equity investment holders, our ownership interest in the entity, and our contractual involvement with
the entity. We continually review and reconsider our VIE or VOE conclusions upon the occurrence of certain events,
such as changes to our ownership interest, changes to an entity’s legal structure, or amendments to governing
documents. Our VIEs are primarily sponsored investment products and our variable interest consists of our equity
ownership in and investment management fees earned from these entities.
We are the primary beneficiary if we have the power to direct the activities of the VIE that most significantly impact
its economic performance and the obligation to absorb losses of the entity or the right to receive benefits from the
VIE that could potentially be significant. Our SICAV funds and other investment products regulated outside the U.S.
are determined to be VIEs. We have interests in certain investment partnerships that are also considered VIEs,
including entities that have interests in general partners of affiliated private investment funds, which are also VIEs.
We consolidate the entities that hold the interest in the general partners; however, the entities are not the primary
beneficiaries of the affiliated private investment funds.
Other-than-temporary impairments of equity method investments
We evaluate our equity method investments for impairment when events or changes in circumstances indicate that
the carrying value of the investment exceeds its fair value, and the decline in fair value is other than temporary. For
our investments in our affiliated private investment funds, we consider the length of time and the extent to which
market value has been less than cost, any specific events that may influence the operations of the funds and our
intent and ability to retain the investment for a period of time to allow for any anticipated recovery in market value.
We generally believe an assessment period of four consecutive quarters of sustained market losses is a reasonable
period to allow for an anticipated market recovery.
Page 52
Intangible assets
Indefinite-lived intangible assets are tested for impairment annually, in the fourth quarter, or more frequently if
events or changes in circumstances indicate that it is more likely than not that the intangible asset is impaired.
Management must first determine the level at which indefinite-lived intangible assets are tested for impairment (i.e.,
unit of account). We have concluded that the trade name and investment advisory agreement indefinite-lived
intangible assets will be considered their own separate unit of account. Once the unit of account is determined,
management has the option to first assess indefinite-lived intangible assets for qualitative factors to determine
whether it is necessary to perform a quantitative impairment test. If a quantitative impairment test is required, the
impairment test consists of a comparison of the fair value of an intangible asset with its carrying amount. If the
carrying amount of the intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal
to that excess. If required, fair value is generally determined using a discounted cash flow analysis where estimated
future cash flows are discounted to arrive at a single present value amount. This approach includes inputs that
require significant management judgment, the most relevant of which include revenue growth, discount rates, and
effective tax rates. 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. 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.
Definite-lived intangible assets are reviewed for impairment whenever events or circumstances indicate that the
asset group's carrying amount may not be recoverable (i.e., the carrying amount is more than the undiscounted
estimated future cash flows). Management must first determine the level at which definite-lived intangible assets are
tested for impairment (i.e., asset group). The determination of the asset group is judgmental and the intangible
assets can be grouped based on the lowest level for which identifiable cash flows are largely independent of
identifiable cash flows for other groups of assets. Since each affiliated private investment fund has identifiable cash
flows separate from other funds, we determined that the asset group for testing is each individual affiliated private
investment fund. Once the asset group is identified, we next determine whether there are any triggering events that
would cause us to believe that the carrying value would not be recoverable. If there is a triggering event, then we
would perform a test of recoverability. Based on that test, if the carrying value is not recoverable, then a fair value
measurement is required of the asset group to determine if the fair value is less than the asset group's carrying
amount. If required, fair value would be determined using a discounted cash flow analysis where estimated future
cash flows are discounted to arrive at a single present value amount. This approach includes inputs that require
significant management judgment, the most relevant of which include revenue growth, discount rates, and effective
tax rates. 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. This reflects how the chief operating decision maker allocates resources and assesses
performance. Accordingly, we have one reporting unit - our investment advisory business, consistent with our single
operating segment, to which all goodwill has been assigned.
We evaluate the carrying amount of goodwill in our consolidated balance sheets for possible impairment on an
annual basis in the fourth quarter of each year using a fair value approach. Goodwill would be considered impaired
whenever its carrying amount exceeds the fair value of our investment advisory business. 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. 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.
Page 53
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. Accordingly,
our provision for income taxes represents our total estimate of the liability that we have incurred in doing business
each year in all of our locations. Annually, we file tax returns that represent our filing positions with each jurisdiction
and settle our return liabilities. Each jurisdiction has the right to audit those returns and may take different positions
with respect to income and expense allocations and taxable earnings determinations. From time to time, we may
also provide for estimated liabilities associated with uncertain tax return filing positions that are subject to, or in the
process of, being audited by various tax authorities. 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.
As a result, we recognize additions to, or reductions of, income tax expense during a reporting period that pertain to
prior period provisions as our estimated liabilities are revised and actual tax returns and tax audits are settled. We
recognize any such prior period adjustment in the discrete quarterly period in which it is determined.
We recognize deferred tax assets to the extent that we believe that these assets are more likely than not to be
realized. In making such a determination, we consider all available positive and negative evidence, including
future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies,
and results of recent operations. 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.
See Note 1 - Basis of Preparation and Summary of Significant Accounting Policies within Item 8. Financial
Statements for a discussion of newly issued but not yet adopted accounting guidance.
FORWARD-LOOKING INFORMATION.
From time to time, information or statements provided by or on behalf of T. Rowe Price, including those within this
report, may contain certain forward-looking information, including information or anticipated information relating to:
our revenues, net income, and earnings per share of common stock; changes in the amount and composition of our
assets under management; our expense levels; our effective tax rate; legal or regulatory developments; geopolitical
instability; interest rates and currency fluctuations; and our expectations regarding financial markets, future
transactions, dividends, stock repurchases, investments, new products and services, capital expenditures, changes
in our effective fee rate, and other industry or market conditions. Readers are cautioned that any forward-looking
information provided by or on behalf of T. Rowe Price is not a guarantee of future performance. Actual results may
differ materially from those in forward-looking information because of various factors including, but not limited to,
those discussed below and in Item 1A. Risk Factors, of this Form 10-K Annual Report. Further, forward-looking
statements speak only as of the date on which they are made, and we undertake no obligation to update any
forward-looking statement to reflect events or circumstances after the date on which it is made or to reflect the
occurrence of unanticipated events.
Our future revenues and results of operations will fluctuate primarily due to changes in the total value and
composition of assets under our management. Such changes result from many factors, including, among other
things: client-related cash inflows and outflows in our products, performance fees, capital allocation-based income,
fluctuations in global financial markets that result in appreciation or depreciation of the assets under our
management, our introduction of new investment products, and changes in retirement savings trends relative to
participant-directed investments and defined contribution plans.
The ability to attract and retain investors’ assets under our management is dependent on investor sentiment and
confidence; the relative investment performance of the T. Rowe Price mutual funds and other managed investment
products compared to competing offerings and market indexes; the ability to maintain our investment management
and administrative fees at appropriate levels; the impact of changes in interest rates and inflation; competitive
conditions in the mutual fund, asset management, and broader financial services sectors; our level of success in
implementing our strategy to expand our business; and our ability to attract and retain key personnel. 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
terms of the investment management or related administrative services agreements. Non-operating investment
income will also fluctuate primarily due to the size of our investments, changes in their market valuations, and any
other-than-temporary impairments that may arise or, in the case of our equity method investments, our
proportionate share of the investees’ net income.
Our future results are also dependent upon the level of our expenses, which are subject to fluctuation for the
following or other reasons: changes in the level of our advertising and promotion expenses in response to market
conditions, including our efforts to expand our investment advisory business to investors outside the U.S. and to
further penetrate our distribution channels within the U.S.; the pace and level of spending to support key strategic
priorities; variations in the level of total compensation expense due to, among other things, bonuses, restricted stock
units and other equity grants, other incentive awards, our supplemental savings plan, changes in our employee
count and mix, and competitive factors; any goodwill, intangible asset or other asset impairment that may arise;
fluctuation in foreign currency exchange rates applicable to the costs of our international operations; expenses and
capital costs, such as technology assets, depreciation, amortization, and research and development, incurred to
maintain and enhance our administrative and operating services infrastructure; the timing of the assumption of all
third party research payments, unanticipated costs that may be incurred to protect investor accounts and the
goodwill of our clients; and disruptions of services, including those provided by third parties, such as fund and
product recordkeeping, facilities, communications, power, and the mutual fund transfer agent and accounting
systems, as a result of extreme events, cyberattacks or otherwise.
Our business is also subject to substantial governmental regulation, and changes in legal, regulatory, accounting,
tax, and compliance requirements may have a substantial effect on our operations and results, including, but not
limited to, effects on costs that we incur and effects on investor interest in investment products and investing in
general or in particular classes of mutual funds or other investments.
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. 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. In addition, investment holdings may be
altered from time to time in response to changes in market risks and other factors, as management deems
appropriate. We do not actively hedge the market risk related to our seed capital investments.
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. The potential future loss of value, before any income tax benefits, of these investments at
December 31, 2024 was determined by using the lower of each product’s lowest net asset value per share during
2024 or its net asset value per share at December 31, 2024, reduced by 10%. In 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.
Additionally, the underlying holdings of our assets under management are also subject to market risk, which may
arise from changes in equity prices, credit ratings, foreign currency exchange rates, and interest rates.
Page 55
(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. 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. Upon consolidation of these products, our direct investment is eliminated, and the
net assets of the products are combined in our consolidated balance sheet, together with redeemable non-
controlling interests, which represents the portion of the products that is owned by unrelated third-party investors.
Further, we have investments that are used to economically hedge the change in our deferred compensation
liabilities. 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"). 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. 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. Given the nature of UTI’s business, should conditions
deteriorate in markets in which they operate, we are at risk for loss up to our carrying amount.
We operate in several countries outside the U.S. of which the United Kingdom is the most prominent. We 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 do not believe that foreign currency fluctuations
materially affect our results of operations.
Page 56
Page
Consolidated Balance Sheets at December 31, 2024 and 2023
58
Consolidated Statements of Income for each of the years in the three-year period ended
December 31, 2024
59
Consolidated Statements of Comprehensive Income for each of the years in the three-year period ended
December 31, 2024
60
Consolidated Statements of Cash Flows for each of the years in the three-year period ended
December 31, 2024
61
Consolidated Statements of Stockholders' Equity for each of the years in the three-year period ended
December 31, 2024
62
Notes to Consolidated Financial Statements
64
Report of Independent Registered Public Accounting Firm (KPMG LLP, Baltimore, MD, Auditor ID: 185)
90
Item 8. Financial Statements.
Index to Financial Statements:
Page 57
CONSOLIDATED BALANCE SHEETS
(in millions, except share data)
12/31/2024
12/31/2023
ASSETS
Cash and cash equivalents
$
2,649.8 $
2,066.6
Accounts receivable and accrued revenue
877.4
807.9
Investments
3,000.5
2,554.7
Assets of consolidated investment products ($1,555.6 million at December 31, 2024
and $1,204.4 million at December 31, 2023, related to variable interest entities)
2,044.0
1,959.3
Operating lease assets
226.8
241.1
Property, equipment and software, net
977.0
806.6
Intangible assets
368.1
507.3
Goodwill
2,642.8
2,642.8
Other assets
685.6
692.5
Total assets
$ 13,472.0 $ 12,278.8
LIABILITIES
Accounts payable and accrued expenses
$
353.5 $
422.9
Liabilities of consolidated investment products ($46.2 million at December 31, 2024 and
$35.2 million at December 31, 2023, related to variable interest entities)
62.1
54.2
Operating lease liabilities
278.7
308.5
Accrued compensation and related costs
219.8
240.8
Deferred compensation liabilities
1,020.7
895.0
Income taxes payable
87.1
66.2
Total liabilities
2,021.9
1,987.6
Commitments and contingent liabilities
Redeemable non-controlling interests
944.0
594.1
STOCKHOLDERS’ EQUITY
Preferred stock, undesignated, $0.20 par value—authorized and unissued
20,000,000 shares
—
—
Common stock, $0.20 par value—authorized 750,000,000; issued 222,966,000
shares at December 31, 2024 and 223,938,000 at December 31, 2023
44.6
44.8
Additional capital in excess of par value
311.9
431.7
Retained earnings
10,040.6
9,076.1
Accumulated other comprehensive loss
(51.7)
(47.5)
Total stockholders' equity attributable to T. Rowe Price Group, Inc.
10,345.4
9,505.1
Non-controlling interests in consolidated entities
160.7
192.0
Total permanent stockholders' equity
10,506.1
9,697.1
Total liabilities, redeemable non-controlling interests and permanent stockholders’
equity
$ 13,472.0 $ 12,278.8
The accompanying notes to consolidated financial statements are an integral part of these statements.
Page 58
CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per-share amounts)
2024
2023
2022
Revenues
Investment advisory fees
$
6,399.7 $
5,709.5 $
5,962.7
Performance-based advisory fees
59.3
38.2
6.4
Capital allocation-based income
46.6
161.9
(54.3)
Administrative, distribution, and servicing fees
588.0
550.9
573.6
Net revenues
7,093.6
6,460.5
6,488.4
Operating expenses
Compensation and related costs
2,757.9
2,673.5
2,320.8
Distribution and servicing
354.1
289.9
301.5
Advertising and promotion
129.6
114.2
97.3
Product and recordkeeping related costs
297.5
291.0
300.1
Technology, occupancy, and facility costs
644.1
632.6
560.5
General, administrative, and other
433.8
421.3
412.2
Change in fair value of contingent consideration
(13.4)
(82.4)
(161.2)
Acquisition-related amortization and impairment costs
156.7
134.2
283.5
Total operating expenses
4,760.3
4,474.3
4,114.7
Net operating income
2,333.3
1,986.2
2,373.7
Non-operating income (loss)
Net gains (losses) on investments
363.2
355.2
(204.7)
Net gains (losses) on consolidated investment products
130.3
164.6
(203.5)
Other losses, including foreign currency losses
(7.2)
(15.7)
(17.3)
Total non-operating income (loss)
486.3
504.1
(425.5)
Income before income taxes
2,819.6
2,490.3
1,948.2
Provision for income taxes
683.8
654.6
498.6
Net income
2,135.8
1,835.7
1,449.6
Less: net income (loss) attributable to redeemable non-controlling
interests
35.7
47.0
(108.3)
Net income attributable to T. Rowe Price Group, Inc.
$
2,100.1 $
1,788.7 $
1,557.9
Earnings per share on common stock of T. Rowe Price Group, Inc.
Basic
$
9.18 $
7.78 $
6.73
Diluted
$
9.15 $
7.76 $
6.70
The accompanying notes to consolidated financial statements are an integral part of these statements.
Page 59
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions)
2024
2023
2022
Net income
$
2,135.8 $
1,835.7 $
1,449.6
Other comprehensive income (loss)
Currency translation adjustments:
Consolidated investment products—variable interest entities
(14.0)
21.7
(34.9)
Reclassification of (gains) losses recognized in non-operating
investment income upon deconsolidation of certain investment
products
0.4
—
(3.0)
Total currency translation adjustments of consolidated investment
products—variable interest entities
(13.6)
21.7
(37.9)
Equity method investments
0.7
(1.6)
(14.6)
Other comprehensive income (loss) before income taxes
(12.9)
20.1
(52.5)
Net deferred tax benefits (income taxes)
3.7
(1.9)
5.0
Total other comprehensive income (loss)
(9.2)
18.2
(47.5)
Total comprehensive income
2,126.6
1,853.9
1,402.1
Less: comprehensive income (loss) attributable to redeemable non-
controlling interests
30.7
59.7
(129.1)
Comprehensive income attributable to T. Rowe Price Group, Inc.
$
2,095.9 $
1,794.2 $
1,531.2
The accompanying notes to consolidated financial statements are an integral part of these statements.
Page 60
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
2024
2023
2022
Cash flows from operating activities
Net income
$
2,135.8 $
1,835.7 $
1,449.6
Adjustments to reconcile net income to net cash provided by
operating activities
Depreciation, amortization and impairment of property,
equipment and software
254.1
254.8
225.7
Amortization and impairment of acquisition-related assets and
retention arrangements
250.1
226.8
420.1
Fair value remeasurement of contingent consideration liability
(13.4)
(82.4)
(161.2)
Stock-based compensation expense
247.3
265.6
285.4
Net (gains) losses recognized on other investments
(340.2)
(460.8)
210.6
Net (investments) redemptions in investment products used to
economically hedge deferred compensation liabilities
(93.2)
56.1
(18.8)
Net change in securities held by consolidated investment
products
(760.4)
(1,070.3)
87.9
Other changes in assets and liabilities
5.5
193.6
(139.9)
Net cash provided by operating activities
1,685.6
1,219.1
2,359.4
Cash flows from investing activities
Purchases of sponsored investment products
(100.1)
(85.3)
(55.1)
Dispositions of sponsored investment products
533.4
616.6
263.6
Net cash of investment products upon deconsolidation
(15.8)
(56.8)
(8.7)
Additions to property and equipment
(423.4)
(307.9)
(237.6)
Other investing activity
(171.6)
(38.4)
(3.7)
Net cash provided by (used in) investing activities
(177.5)
128.2
(41.5)
Cash flows from financing activities
Repurchases of common stock
(337.2)
(254.4)
(849.8)
Common share issuances under stock-based compensation plans
(33.3)
(18.0)
(36.2)
Dividends paid to common stock and equity-award holders
(1,135.6)
(1,121.7)
(1,107.4)
Net distributions to non-controlling interests in consolidated entities
(36.7)
(43.3)
(35.1)
Net subscriptions (redemptions) from redeemable non-controlling
interest holders
606.2
358.8
(48.4)
Net cash used in financing activities
(936.6)
(1,078.6)
(2,076.9)
Effect of exchange rate changes on cash and cash equivalents of
consolidated investment products
(2.4)
0.4
9.5
Net change in cash and cash equivalents during year
569.1
269.1
250.5
Cash and cash equivalents at beginning of year, including $77.2
million at December 31, 2023, $119.1 million at December 31, 2022
and $101.1 million at December 31, 2021 held by consolidated
investment products
2,143.8
1,874.7
1,624.2
Cash and cash equivalents at end of year, including $63.1 million at
December 31, 2024, $77.2 million at December 31, 2023, and
$119.1 million at December 31, 2022, held by consolidated
investment products
$
2,712.9 $
2,143.8 $
1,874.7
The accompanying notes to consolidated financial statements are an integral part of these statements.
Page 61
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (shares in thousands; dollars in millions)
Common
shares
outstanding
Common
stock
Additional
capital in
excess of par
value
Retained
earnings
AOCI(1)
Total
stockholders’
equity
attributable to
T. Rowe Price
Group, Inc.
Non-
controlling
interests in
consolidated
entities
Total
permanent
stockholders'
equity
Redeemable
non-
controlling
interests
Balances at December 31, 2021
229,175
$
45.8
$
919.8
$
8,083.6
$
(26.5) $
9,022.7
$
248.7
$
9,271.4
$
982.3
Net income (loss)
—
—
—
1,557.9
—
1,557.9
(22.9)
1,535.0
(108.3)
Other comprehensive income (loss), net of tax
—
—
—
—
(26.5)
(26.5)
—
(26.5)
(21.0)
Dividends declared ($4.80 per share)
—
—
—
(1,108.7)
—
(1,108.7)
—
(1,108.7)
—
Common stock-based compensation plans activity:
Shares issued upon option exercises
522
0.1
28.2
—
—
28.3
—
28.3
—
Restricted shares issued, net of shares withheld
for taxes
9
—
—
—
—
—
—
—
—
Shares issued upon vesting of restricted stock
units, net of shares withheld for taxes
1,355
0.3
(64.6)
—
—
(64.3)
—
(64.3)
—
Stock-based compensation expense
—
—
285.4
—
—
285.4
—
285.4
—
Restricted stock units issued as dividend
equivalents
—
—
0.5
(0.5)
—
—
—
—
—
Common shares repurchased
(6,751)
(1.3)
(731.4)
(122.6)
—
(855.3)
—
(855.3)
—
Net distributions to non-controlling interests in
consolidated entities
—
—
—
—
—
—
(35.1)
(35.1)
—
Net redemptions from consolidated investment
products
—
—
—
—
—
—
—
—
(49.3)
Net deconsolidations of investment products
—
—
—
—
—
—
—
—
(147.0)
Balances at December 31, 2022
224,310
44.9
437.9
8,409.7
(53.0)
8,839.5
190.7
9,030.2
656.7
Net income (loss)
—
—
—
1,788.7
—
1,788.7
44.6
1,833.3
47.0
Other comprehensive income (loss), net of tax
—
—
—
—
5.5
5.5
—
5.5
12.7
Dividends declared ($4.88 per share)
—
—
—
(1,121.9)
—
(1,121.9)
—
(1,121.9)
—
Common stock-based compensation plans activity:
Shares issued upon option exercises
585
0.1
35.6
—
—
35.7
—
35.7
—
Restricted shares withheld for taxes, net of
shares issued
57
—
—
—
—
—
—
—
—
Shares issued upon vesting of restricted stock
units, net of shares withheld for taxes
1,413
0.3
(54.0)
—
—
(53.7)
—
(53.7)
—
Stock-based compensation expense
—
—
265.6
—
—
265.6
—
265.6
—
Restricted stock units issued as dividend
equivalents
—
—
0.4
(0.4)
—
—
—
—
—
Common shares repurchased
(2,427)
(0.5)
(253.8)
—
(254.3)
—
(254.3)
—
Net distributions to non-controlling interests in
consolidated entities
—
—
—
—
—
—
(43.3)
(43.3)
—
Net subscriptions into consolidated investment
products
—
—
—
—
—
—
—
—
356.9
Net deconsolidations of investment products
—
—
—
—
—
—
—
—
(479.2)
Balances at December 31, 2023
223,938
$
44.8
$
431.7
$
9,076.1
$
(47.5) $
9,505.1
$
192.0
$
9,697.1
$
594.1
The accompanying notes to consolidated financial statements are an integral part of these statements.
Page 62
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (shares in thousands; dollars in millions)
Common
shares
outstanding
Common
stock
Additional
capital in
excess of par
value
Retained
earnings
AOCI(1)
Total
stockholders’
equity
attributable to
T. Rowe Price
Group, Inc.
Non-
controlling
interests in
consolidated
entities
Total
permanent
stockholders'
equity
Redeemable
non-
controlling
interests
Balances at December 31, 2023
223,938
$
44.8
$
431.7
$
9,076.1
$
(47.5) $
9,505.1
$
192.0
$
9,697.1
$
594.1
Net income (loss)
—
—
—
2,100.1
—
2,100.1
5.4
2,105.5
35.7
Other comprehensive income (loss), net of tax
—
—
—
—
(4.2)
(4.2)
—
(4.2)
(5.0)
Dividends declared ($4.96 per share)
—
—
—
(1,135.2)
—
(1,135.2)
—
(1,135.2)
—
Common stock-based compensation plans activity:
Shares issued upon option exercises
577
0.1
36.3
—
—
36.4
—
36.4
—
Restricted shares withheld for taxes, net of
shares issued
7
—
(0.3)
—
—
(0.3)
—
(0.3)
—
Shares issued upon vesting of restricted stock
units, net of shares withheld for taxes
1,415
0.3
(69.6)
—
—
(69.3)
—
(69.3)
—
Stock-based compensation expense
—
—
247.3
—
—
247.3
—
247.3
—
Restricted stock units issued as dividend
equivalents
—
—
0.4
(0.4)
—
—
—
—
—
Common shares repurchased
(2,971)
(0.6)
(333.9)
—
—
(334.5)
—
(334.5)
—
Net distributions to non-controlling interests in
consolidated entities
—
—
—
—
—
—
(36.7)
(36.7)
—
Net subscriptions into consolidated investment
products
—
—
—
—
—
—
—
—
592.0
Net deconsolidations of investment products
—
—
—
—
—
—
—
—
(272.8)
Balances at December 31, 2024
222,966
$
44.6
$
311.9
$
10,040.6
$
(51.7) $
10,345.4
$
160.7
$
10,506.1
$
944.0
(1) Accumulated other comprehensive income
The accompanying notes to consolidated financial statements are an integral part of these statements.
Page 63
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 – BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.
T. Rowe Price Group, Inc. derives its consolidated revenues and net income primarily from investment advisory
services that its subsidiaries provide to individual and institutional investors that invest in a broad range of
investment solutions across equity, fixed income, multi-asset, and alternative capabilities. 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.
The investment solutions are provided in a number of vehicles including the T. Rowe Price U.S. mutual funds ("U.S.
mutual funds"), subadvised funds, separately managed accounts, collective investment trusts, exchange-traded
funds, and other sponsored products. The other sponsored products include: open-ended investment products
offered to investors outside the U.S., products offered through variable annuity life insurance plans in the U.S.,
affiliated private investment funds, business development companies, an interval fund, and collateralized loan
obligations.
Investment advisory fees depend largely on the total value and composition of assets under our management.
Accordingly, fluctuations in financial markets and in the composition of assets under management impact our
revenues and results of operations.
BASIS OF PREPARATION.
These consolidated financial statements have been prepared by management in accordance with accounting
principles generally accepted in the United States. These principles require that we make certain estimates and
assumptions. Actual results may vary from our estimates. In 2024, we are reporting performance-based advisory
fees in a separate line of the consolidated income statement to increase transparency. As such, investment advisory
fees for prior periods were recast to reflect the new presentation and ensure comparability. Additionally, the
contingent consideration liability of zero at December 31, 2024 and $13.4 million at December 31, 2023, was
combined with accounts payable and accrued expenses as the carrying value is immaterial. Details on the
contingent consideration liability can be found in Note 5.
U.S. INFLATION REDUCTION LEGISLATION.
On August 16, 2022, the U.S. enacted the Inflation Reduction Act of 2022 ("IRA"). The IRA establishes new tax
provisions and various incentives and tax credits. Among other things, the IRA created a 15% minimum tax on
adjusted book income effective for taxable years beginning after December 31, 2022, as well as an excise tax of 1%
on stock repurchases, net of stock issuances, for publicly traded companies effective for net stock repurchases
made after December 31, 2022. The impact of the IRA’s provisions is not material to our financial position and
results of operations.
NEWLY ISSUED BUT NOT YET ADOPTED ACCOUNTING GUIDANCE.
In December 2023, the FASB issued Accounting Standards Update No. 2023-09 - Income Taxes (Topic 740) -
Improvements to Income Tax Disclosures, which requires public entities, on an annual basis, to provide disclosure
of specific categories in the rate reconciliation, as well as disclosure of income taxes paid disaggregated by
jurisdiction. This amendment is effective for the firm on January 1, 2025. We do not believe the additional disclosure
requirements will have a material impact on our consolidated financial statements.
In November 2024, the FASB issued Accounting Standards Update No. 2024-03 - Income Statement- Reporting
Comprehensive Income- Expense Disaggregation Disclosures (Subtopic 220-4): Disaggregation of Income
Statement Expenses, which requires disclosures of additional information and disaggregation of certain expenses
included in the income statement. The guidance is effective for the firm on January 1, 2027, and allows for either a
prospective or retrospective approach on adoption. We are currently evaluating the impact that the adoption will
have on our financial statements and have not yet determined our transition approach.
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We have considered all other newly issued accounting guidance that is applicable to our operations and the
preparation of our consolidated statements, including those we have not yet adopted. We do not believe that any
such guidance has or will have a material effect on our financial position or results of operations.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.
Consolidation
Our consolidated financial statements include the accounts of all wholly-owned subsidiaries, majority-owned entities
that are entitled to a disproportionate allocation of income, or carried interest, of affiliated private investment funds
("carried interest entities"), and investment products in which we have a controlling interest. We are deemed to have
a controlling interest when we own the majority of a voting interest entity ("VOE") or are deemed to be the primary
beneficiary of a variable interest entity ("VIE"). We perform an analysis of our investments to determine if the
investment entity is a VOE or a VIE. Our analysis involves judgment and considers several factors, including an
entity’s legal organization, capital structure, the rights of the equity investment holders, our ownership interest in the
entity, and our contractual involvement with the entity. We continually review and reconsider our VOE or VIE
conclusions upon the occurrence of certain events, such as changes to our ownership interest, changes to an
entity’s legal structure, or amendments to governing documents. All material accounts and transactions between
consolidated entities are eliminated in consolidation.
Variable interest entities
VIEs are entities that, by design: (i) lack sufficient equity to permit the entity to finance its activities independently or
(ii) have equity holders that do not have the power to direct the activities of the entity that most significantly impact
the entity’s economic performance, the obligation to absorb the entity’s losses, or the rights to receive the entity’s
residual returns. We consolidate a VIE when we are the primary beneficiary, which is the party that has both (i) the
power to direct the activities of the VIE that most significantly impact its economic performance and (ii) the
obligation to absorb losses of the entity or the right to receive benefits from the VIE that could potentially be
significant.
Our Luxembourg-based SICAV funds, and other investment products regulated outside the U.S., that we provide
seed capital were determined to be VIEs and are consolidated when we are the primary beneficiary. Certain of the
investment partnerships we have an interest in were determined to be VIEs and are not consolidated as we
concluded that we are not the primary beneficiary.
We have determined that our carried interest entities are VIEs and T. Rowe Price is the primary beneficiary. Further,
our carried interest entities hold interests in the general partners of certain affiliated private investment funds that
are VIEs, though these carried interest entities were determined to not be the primary beneficiary. Therefore, these
affiliated private investment funds are not consolidated.
Redeemable non-controlling interests
We recognize redeemable non-controlling interests for the portion of the net assets of our consolidated investment
products held by unrelated third-party investors as their interests are convertible to cash and other assets at their
option. As such, we reflect redeemable non-controlling interests as temporary equity in our consolidated balance
sheets.
Non-controlling interests in consolidated entities
We recognize non-controlling interests in the consolidated carried interest entities as a component of permanent
equity in our consolidated balance sheets. The non-controlling interests represent the minority interest held by
limited partnerships controlled by employees, one of which is a member of our Board of Directors. Income (loss) is
allocated to these non-controlling interests based on the contractual arrangements that govern the allocation of
income (loss) and recognized as compensation expense.
Investments in T. Rowe Price money market mutual funds
We do not consider our investments in T. Rowe Price money market mutual funds when performing our
consolidation analysis as the guidance provides a scope exception for interests in entities that are required to
comply with, or operate in accordance with, requirements similar to those in Rule 2a-7 of the Investment Company
Act of 1940 for registered money market funds.
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Cash equivalents
Cash equivalents consist primarily of short-term, highly liquid investments in T. Rowe Price money market mutual
funds. The cost of these funds is equivalent to fair value.
Investments
Investments held at fair value
Investments in sponsored products have been made for both general corporate investment purposes and to provide
seed capital for newly formed sponsored investment products. Those investments that we do not consolidate are
carried at fair value using the quoted closing NAV per share of each fund as of the balance sheet date. The
underlying portfolio investments held by our consolidated investment products retain investment company
specialized accounting in consolidation; are considered securities held in a trading account for cash flow reporting
purposes; and are valued in accordance with the valuation and pricing policy used to value our assets under
management which is further described in the Revenue Recognition policy below.
We elected to value certain interests in investment partnerships, for which market prices or quotations are not
readily available, at fair value using the NAV per share as a practical expedient.
Changes in the fair values of all these investments are reflected in non-operating income in our consolidated
statements of income.
Equity method investments
Equity method investments consist of investments in entities, including sponsored investment products and
investments in affiliated private investments funds, for which we have the ability to exercise significant influence
over the operating and financial policies of the investee. The carrying values of these investments are adjusted to
reflect our proportionate share of the investee's net income or loss, any unrealized gain or loss resulting from the
translation of foreign-denominated financial statements into U.S. dollars, and dividends received. Our proportionate
share of income or loss is included in non-operating income in our consolidated statements of income.
As permitted under existing accounting guidance, we adopted a policy by which we recognize our share of UTI
Asset Management Company Limited’s ("UTI") and other certain investment partnership earnings on a quarter lag
as current financial information is not available in a timely manner. The basis difference between our carrying value
and our proportionate share of UTI’s book value is primarily related to consideration paid in excess of the stepped-
up basis of assets and liabilities on the date of purchase.
Investments in affiliated private investment funds - carried interest
Investments in affiliated private investment funds - carried interest represent interests in general partners of affiliated
private investment funds that are contractually entitled to a disproportionate allocation of income, which is also
referred to as carried interest. We account for these investments as financial instruments under ASC 323,
Investments – Equity Method and Joint Ventures ("ASC 323") since the general partner has significant governance
rights in the investment funds in which it invests, which demonstrate significant influence. The income earned is
recognized as capital-allocation based income in our consolidated statements of income.
Held to Maturity
Investments in rated notes of certain European collateralized loan obligation funds are designated as held-to-
maturity and carried on the balance sheet at amortized cost.
Concentration of risk
Concentration of credit risk in accounts receivable is believed to be minimal in that our clients generally have
substantial assets, including those in the investment portfolios we manage for them.
Our investments held at fair value expose us to market risk, that is, the potential future loss of value that would
result from a decline in the fair value of each investment or its underlying net assets. The underlying holdings of our
assets under management are also subject to market risk, which may arise from changes in equity prices, credit
ratings, foreign currency exchange rates, and interest rates.
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Leases
We review new arrangements at inception to evaluate whether we have the right to obtain substantially all the
economic benefits of and have the right to control the use of an asset. If we determine that an arrangement qualifies
as a lease, we recognize a lease liability and a corresponding asset on the lease’s commencement date. The lease
liability is initially measured at the present value of the future minimum lease payments over the lease term using
the rate implicit in the arrangement or, if not available, our incremental borrowing rate. An operating lease asset is
measured initially at the value of the lease liability less any lease incentives received and initial direct costs incurred.
Our leases qualify as operating leases and consist primarily of real estate leases for corporate offices, data centers,
and other facilities. We measure our operating lease liabilities using an estimated incremental borrowing rate as an
implicit rate cannot be readily determinable from any of our operating lease arrangements. Since we do not have
any outstanding corporate borrowings, we estimate our incremental borrowing rate using an estimated credit rating
and available market information. Additionally, certain of our leases contain options to extend or terminate the lease
term that, if exercised, would result in the remeasurement of the operating lease liability.
Our operating leases contain both lease and non-lease components. Non-lease components are distinct elements
of a contract that are not related to securing the use of the lease assets, such as common area maintenance and
other management costs. We elected to measure the lease liability of our real estate operating leases by combining
the lease and non-lease components into one single lease component. As such, we included the fixed payments
and any payments that depend on a rate or index related to our lease and non-lease components in measuring the
operating lease liability.
We recognize operating lease expense on a straight-line basis over the lease term as part of technology,
occupancy, and facility costs in our consolidated statements of income.
Property, equipment and software
Property, equipment and software is stated at cost net of accumulated depreciation and amortization computed
using the straight-line method. Provisions for depreciation and amortization are based on the following weighted-
average estimated useful lives: computer and communications software and equipment, 3 years; buildings and
improvements, 33 years; leasehold improvements, 9 years; and furniture and other equipment, 6 years.
Intangible assets
Intangible assets consist primarily of acquired investment advisory agreements and trade name. The fair values of
the acquired investment advisory agreements were based on the net present value of estimated future cash flows
attributable to each agreement, and included significant assumptions related to revenue, discount rate, and effective
tax rate. The investment advisory agreement intangible assets are amortized using the straight-line method over
their estimated useful lives unless the asset was determined to have an indefinite life as there is no foreseeable limit
on the contract period. The weighted average remaining useful life of definite-lived intangibles assets is
approximately 3.7 years.
Definite-lived intangible assets are tested when there is an indication of impairment. Impairment is indicated when
the carrying value of the asset is not recoverable and exceeds its fair value. If indicators are present, we perform a
recoverability test by comparing the estimated undiscounted future cash flows attributable to the asset group in
question to the asset group’s carrying amount. If the undiscounted estimated future cash flows are less than the
carrying amount of the asset, the asset’s cost is adjusted to fair value and an impairment loss is recognized. The fair
value is determined using a discounted cash flow analysis where estimated future cash flows are discounted to
arrive at a single present value amount. This approach includes inputs that require significant management
judgment, the most relevant of which included revenue growth, discount rates, and effective tax rates.
The trade name fair value was determined using the relief from royalty method based on net present value of
estimated cash flows, which include significant assumptions about royalty rate, revenue growth rate, discount rate
and effective tax rate. Additionally, we identified the trade name intangible asset as indefinite-lived as there is no
foreseeable limit on use of the acquired name.
Indefinite-lived intangible assets are tested for impairment annually in the fourth quarter or more frequently when an
event occurs or circumstances change that more likely than not reduce the fair value of the indefinite-lived intangible
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asset below its carrying value. The fair value for each asset is determined using a discounted cash flow analysis
where estimated future cash flows were discounted to arrive at a single present value amount. This approach
includes inputs that require significant management judgment, the most relevant of which include revenue growth,
discount rates, and effective tax rates.
Goodwill
We internally conduct, manage, and report our operations as one investment advisory business. This reflects how
the chief operating decision maker allocates resources and assesses performance. Accordingly, we have one
reporting unit - investment advisory business, consistent with our single operating segment, to which all goodwill
has been assigned.
We evaluate the carrying amount of goodwill in our consolidated balance sheets for possible impairment on an
annual basis, in the fourth quarter, using a fair value approach. Our evaluations have indicated that no impairment
exists.
Revenue recognition
Our revenue is earned from investment advisory, administrative, and distribution services we provide to our clients.
Each distinct service we promise in our agreements is considered a performance obligation and is the basis for
determining when we recognize revenue. The fees are allocated to each distinct performance obligation and we
recognize revenue when, or as, we satisfy our promises. The consideration for our services is generally variable
and included in net revenues, when it is improbable that a significant reversal could occur in the future. For certain
client agreements, we have the discretion to hire a third party to provide services to our clients. In these
circumstances, we are generally deemed to control the services before transferring them to our clients, and
accordingly present the revenues gross of the related third-party costs. The timing of when we bill our clients and
related payment terms vary in accordance with agreed-upon contractual terms. For the majority of our agreements,
billing occurs after we have recognized revenue, which results in accounts receivable and accrued revenue. For an
insignificant portion of our contracts, billing occurs in advance of providing services, which results in deferred
revenue within the accounts payable and accrued expenses line of our consolidated balance sheets.
Taxes billed to our clients based on our fees for services rendered are not included in revenues.
Investment advisory fees
The majority of our investment advisory agreements, including those with the U.S. mutual funds, have a single
performance obligation as the promised services are not separately identifiable from other promises in the
agreements and, therefore, are not distinct. Substantially all performance obligations for providing advisory services
are satisfied over time and revenue is recognized as time passes.
Investment advisory agreements with sponsored investment products regulated outside the U.S. generally have two
performance obligations; one for investment management and one for distribution. For these agreements, we
allocate the management fee to each performance obligation using our best estimate of the standalone fee of each
of these services. The performance obligation for providing investment management services, like our other
advisory contracts, is satisfied over time and revenue is recognized as time passes. The performance obligation for
distribution is satisfied at the point in time when an investor makes an investment into the product. Accordingly, a
portion of the investment advisory fees earned from these products relate to distribution performance obligations
that were satisfied during prior periods. These distribution fees are reported within the investment advisory fees line
of our consolidated statements of income.
The management fee for our investment advisory agreements are based on our assets under management, which
change based on fluctuations in financial markets and net cash flows from investors, and represents variable
consideration. Therefore, investment advisory fees are generally constrained, and excluded from revenue, until the
asset values on which our client is billed are no longer subject to financial market volatility. Investment advisory fees
for certain investment products are presented net of fees waived pursuant to the contractual expense limitations of
the product. Our assets under management are valued in accordance with valuation and pricing processes for each
major type of investment. Fair values used in our processes are primarily determined from quoted market prices;
prices furnished by dealers who make markets in such securities; or from data provided by independent pricing
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services that considers yield or price of investments of comparable quality, coupon, maturity, and type. Investments
for which market prices are not readily available are not a material portion of our total assets under management.
We provide all services to the U.S. mutual funds under contracts that are subject to periodic review and approval by
the funds’ Boards. Regulations require that the funds’ shareholders also approve material changes to investment
advisory contracts.
Investment advisory fees also include fees earned from affiliated private investment funds or private accounts that
are determined either monthly or quarterly and are generally based on the fund’s or account's net asset value or
invested capital. Investment advisory fees earned from CLOs include senior collateral management fees and
subordinated collateral management fees, which are generally determined quarterly based on the sum of collateral
principal amounts and the aggregate principal amount of all defaulted obligations. If amounts distributable on any
payment date are insufficient to pay the collateral management fee according to the priority of payments, any
shortfall is deferred and payable on subsequent payment dates.
Performance-Based Fees
We recognize performance-based incentive fees in connection with the investment advisory agreements from
certain sponsored product and separately managed and subadvised accounts. We are entitled to receive
performance-based incentive fees when the return on investment assets exceeds a certain benchmark return. In
such arrangements, these incentive fees are recognized at the end of the measurement period when the
performance benchmark or contractual outperformance has been achieved. Performance-based incentive fees are
considered a form of variable consideration, and as such, these fees are subject to potential reversal up until the
end of the measurement period (which is generally one year) when the performance-based incentive fees become
fixed, determinable, and are not subject to significant reversal. There are no significant judgments made when
determining the performance-based incentive fees.
Administrative, distribution, and servicing fees
Administrative fees
The administrative services we provide include 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.
The administrative service agreements with the U.S. mutual funds for accounting oversight, transfer agency, and
recordkeeping services generally have one performance obligation as the promised services in each agreement are
not separately identifiable from other promises in the agreement and, therefore, are not distinct. The fees for
performing these services are earned based on a per participant fee and represent variable consideration. The fees
are generally constrained and are recognized as revenue when costs are incurred to perform the services.
Other administrative service agreements for participant recordkeeping and transfer agent services for defined
contribution retirement plans; brokerage services, and trust services generally have one performance obligation as
the promised services in each agreement are not separately identifiable from other performance obligations in the
contract and, therefore, are not distinct. Our performance obligation in each agreement is satisfied over time and
revenue is recognized as time passes. The fees for these services vary by contract and are both fixed and variable.
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Distribution and servicing fees
The agreements for distribution and servicing fees earned from 12b-1 plans of the Advisor Class, R Class, and
Variable Annuity II Class shares of the U.S. mutual funds have one performance obligation, as distribution services
are not separately identifiable from shareholder servicing promises in the agreements and, therefore, are not
distinct. Our performance obligation is satisfied at the point in time when an investor makes an investment into
these share classes of the U.S. mutual funds. The fees for these distribution and servicing agreements are based
on the assets under management in these share classes, which change based on fluctuations in financial markets,
and represent variable consideration. These fees are generally constrained, and excluded from revenue, until the
asset values on which our client is billed are not subject to financial market volatility. Accordingly, the majority of the
distribution and servicing revenue relates to distribution and servicing obligations that were satisfied during prior
periods.
We also recognize the corresponding costs paid to the third-party financial intermediaries that distribute these funds'
share classes within the distribution and servicing costs line of the consolidated statements of income. The fee
revenue that we recognize from the funds and the expense that we recognize for the fees paid to third-party
intermediaries are equal in amount and, therefore, do not impact our net operating income.
Capital allocation-based income
This represents the income earned from general partner investments in affiliated private investment funds with
arrangements that are entitled to a disproportionate allocation of income, which is also known as carried interest.
These investments are accounted for under ASC 323 and the income recognized in capital allocation-based income
in our consolidated statements of income represents the proportionate share of the income or loss assuming the
funds were liquidated as of each reporting date pursuant to the fund's governing agreements. Capital allocation-
based income will fluctuate period-to-period to reflect the adjustment to accrued carried interest for the change in
value of the affiliated funds' underlying investments assuming the value was realized as of the end of the period,
regardless of whether the fund's underlying investments have been realized. The realization of accrued carried
interest occurs over a number of years. Since this income is accounted for under ASC 323, it is outside the scope of
ASC 606, Revenue Recognition. A portion of this income is allocated to non-controlling interest holders and is
reflected as compensation expense.
Advertising
Costs of advertising are expensed the first time that the advertising takes place.
Long-term incentive compensation
We maintain two stockholder-approved employee long-term incentive plans (2020 Long-Term Incentive Plan and
2012 Long-Term Incentive Plan (collectively, the LTI Plans), and two stockholder-approved non-employee director
plans (2017 Non-Employee Director Equity Plan and 2007 Non-Employee Director Equity Plan, collectively the
Director Plans). We believe our stock-based compensation programs align the interests of our employees and
directors with those of our common stockholders. As of December 31, 2024, a total of 8,671,495 shares were
available for future grant under the 2020 Long-Term Incentive Plan and the 2017 Non-Employee Director Equity
Plan (2017 Plan).
Under our LTI Plans, we have issued restricted stock units to employees that settle in shares of our common stock
after vesting. Vesting of these awards is based on the individual continuing to render service over an average five-
year graded schedule. All restricted stock unit holders receive non-forfeitable cash dividend equivalents on our
dividend payable date. We are also authorized to grant qualified incentive and nonqualified fixed stock options with
a maximum term of 10 years. We have not granted options to employees since 2015.
We grant performance-based restricted stock units to certain executive officers in which the number of restricted
stock units ultimately retained is determined based on achievement of certain performance thresholds. The number
of restricted stock units retained is also subject to similar time-based vesting requirements as the other restricted
stock units described above. Cash dividend equivalents are accrued and paid to the holders of performance-based
restricted stock units only after the performance period has lapsed and the performance thresholds have been met.
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Effective July 2024, the 2020 Long-Term Incentive Plan was amended to provide certain employees the opportunity
to receive 50% of their annual long-term incentive award in the form of restricted fund units. Vesting of restricted
fund units is based on the individual continuing to render service over an average five-year graded schedule. These
awards are settled in cash upon vesting.
Under the Director Plans, we may grant options with a maximum term of 10 years, restricted shares, and restricted
stock units to non-employee directors. Under the 2017 Plan, awards generally vest over one year and, in the case
of restricted stock units, are settled upon the non-employee directors’ departure from the Board. For restricted
shares, cash dividends are accrued and paid only after the award vests. Restricted stock unit holders receive
dividend equivalents in the form of unvested stock units that vest over the same period as the underlying award. We
have not granted options to non-employee directors since 2016. As of December 31, 2024, non-employee directors
held 83,485 vested stock units and an additional 7,413 stock units that will generally vest over the next six months.
These units will convert to common shares upon their separation from the Board. Non-employee directors also held
8,970 restricted stock awards expected to vest over the next six months.
Our long-term incentive award values are converted to units on the grant-date using the closing market price of our
common stock for restricted stock units and awards. For restricted fund units, the award value is converted using
the closing market price of one or more hypothetical funds selected by employees from a group of sponsored
investment products prior to the grant date. We recognize the grant-date fair value of all long-term incentive awards
as compensation expense ratably over the awards' requisite service period. Compensation expense recognized for
performance-based restricted units includes an estimate regarding the probability of the performance thresholds
being met. For restricted fund units, the units are remeasured against the hypothetical funds chosen by the unit
holder each reporting period and the adjustment reported in compensation expense. We account for forfeitures as
they occur.
Earnings per share
We compute our basic and diluted earnings per share under the two-class method, which considers our outstanding
restricted shares and stock units, on which we pay non-forfeitable dividends as if they were a separate class of
stock.
Comprehensive income
The components of comprehensive income are presented in a separate statement following our consolidated
statements of income and include net income and the change in our currency translation adjustments. The currency
translation adjustments result from translating our proportionate share of the financial statements of our equity
method investment in UTI, and certain consolidated investment products into U.S. dollars. Assets and liabilities are
translated into U.S. dollars using year-end exchange rates, and revenues and expenses are translated using
weighted-average exchange rates for the period.
The changes in accumulated balances of each component of other comprehensive income, the deferred tax
impacts of each component, and information about significant items reclassified out of accumulated other
comprehensive income are presented in the notes to the consolidated financial statements. The notes also indicate
the line item of our consolidated statements of income in which the significant reclassifications were recognized.
We reclassify income tax effects relating to currency translation adjustments to tax expense when there is a
reduction in our ownership interest in the related investment. The amount of the reclassification depends on the
investment’s accounting treatment before and after the change in ownership percentage.
NOTE 2 – CASH EQUIVALENTS.
Cash equivalent investments in the T. Rowe Price money market mutual funds aggregate to $2,309.8 million at
December 31, 2024, and $1,678.1 million at December 31, 2023. Dividends earned on these investments totaled
$128.3 million in 2024, $101.3 million in 2023, and $30.0 million in 2022.
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NOTE 3 – INFORMATION ABOUT RECEIVABLES, REVENUES, AND SERVICES.
Revenues earned during the years ended December 31, 2024, 2023 and 2022, are included in the table below
along with details of investment advisory fees earned from clients by their underlying asset class. We have also
included average assets under management by asset class, on which we earn the investment advisory fees.
(in millions)
2024
2023
2022
Investment advisory fees
Equity
$ 3,864.7 $ 3,442.3 $ 3,758.4
Fixed income, including money market
410.7
400.4
426.3
Multi-asset
1,814.1
1,583.4
1,508.9
Alternatives
310.2
283.4
269.1
Total investment advisory fees
$ 6,399.7 $ 5,709.5 $ 5,962.7
Performance-based advisory fees
59.3
38.2
6.4
Capital allocation-based income
46.6
161.9
(54.3)
Total administrative, distribution, and servicing fees
588.0
550.9
573.6
Net revenues
$ 7,093.6 $ 6,460.5 $ 6,488.4
Average AUM (in billions):
Equity
$
804.3 $
705.2 $
763.6
Fixed income, including money market
178.6
169.3
173.4
Multi-asset
529.0
442.3
418.7
Alternatives
50.0
45.5
42.7
Average AUM
$ 1,561.9 $ 1,362.3 $ 1,398.4
Total net revenues earned from sponsored investment products totaled $5,859.8 million in 2024, $5,327.9 million in
2023, and $5,326.3 million in 2022. Accounts receivable from these products aggregate to $602.0 million at
December 31, 2024 and $533.9 million at December 31, 2023.
Investors that we serve are primarily domiciled in the U.S.; investment advisory clients outside the U.S. account for
8.8% at December 31, 2024 and 8.6% at December 31, 2023 of assets under management.
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NOTE 4 – INVESTMENTS.
The carrying values of investments that are not part of the consolidated investment products at December 31 are as
follows:
(in millions)
2024
2023
Investments held at fair value
T. Rowe Price investment products
Discretionary investments
$
258.8 $
246.4
Seed capital
262.8
247.8
Deferred compensation liabilities economic hedges
992.8
806.6
Investment partnerships and other investments
62.6
69.7
Investments in affiliated collateralized loan obligations
6.3
8.4
Equity method investments
T. Rowe Price investment products
Discretionary investments
60.8
5.3
Seed capital
128.8
91.1
Deferred compensation liabilities economic hedges
88.4
21.0
Investment in UTI Asset Management Company Limited (India)
173.5
164.5
Investments in affiliated private investment funds - carried interest
426.9
519.9
Investments in affiliated private investment funds - seed/co-investment
269.9
253.4
Other investment partnerships and investments
162.1
2.2
Held to maturity
Investments in affiliated collateralized loan obligations
61.1
94.1
Certificates of deposit
44.7
23.3
U.S. Treasury note
1.0
1.0
Total
$
3,000.5 $
2,554.7
INVESTMENTS AT FAIR VALUE
The investment partnerships are carried at fair value using net asset value ("NAV") per share as a practical
expedient. Our interests in these partnerships are generally not redeemable and are subject to significant
transferability restrictions. The underlying investments of these partnerships have contractual terms through 2029,
though we may receive distributions of liquidating assets over a longer term. The investment strategies of these
partnerships include growth equity, buyout, venture capital, and real estate.
During 2024, we recognized $51.3 million of net unrealized gains on investments held at fair value that were still
held at December 31, 2024. For 2023, we recognized $86.7 million of net unrealized gains on investments held at
fair value that were still held at December 31, 2023. For 2022, we recognized $240.5 million of net unrealized losses
on investments held at fair value that were still held at December 31, 2022.
Dividends, including capital gain distributions, earned on the sponsored investment products held at fair value,
totaled $67.6 million in 2024, $38.2 million in 2023, and $45.3 million in 2022.
During each of the last three years, certain investment products in which we provided initial seed capital at the time
of formation were deconsolidated, as we no longer had a controlling interest. Depending on our ownership interest,
we are now reporting our residual interests in these investment products as either an equity method investment or
an investment held at fair value. Additionally, during 2024 and 2023, certain investment products that were being
accounted for as either equity method or fair value investments were consolidated, as we regained a controlling
interest. The net impact of these changes on our consolidated balance sheets and statements of income as of the
dates the portfolios were deconsolidated or reconsolidated is detailed below.
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(in millions)
2024
2023
2022
Net decrease in assets of consolidated investment products
$
(673.9) $
(663.8) $
(256.9)
Net decrease in liabilities of consolidated investment products
$
(20.5) $
(29.7) $
(12.8)
Net decrease in redeemable non-controlling interests
$
(272.8) $
(479.2) $
(147.2)
Gains recognized upon deconsolidation
$
(0.4) $
— $
3.0
The gains recognized upon deconsolidation were the result of reclassifying currency translation adjustments
accumulated on certain investment products with non-USD functional currencies from accumulated other
comprehensive income to non-operating income.
VARIABLE INTEREST ENTITIES.
Our fair value and equity method investments at December 31, 2024 and 2023, include interests in variable interest
entities that we do not consolidate as we are not deemed the primary beneficiary. Our maximum risk of loss related
to our involvement with these entities is as follows:
(in millions)
2024
2023
Investment carrying values
$
955.9 $
919.3
Unfunded capital commitments
202.5
94.1
Accounts receivable
96.2
92.1
$
1,254.6 $
1,105.5
The unfunded capital commitments, totaling $202.5 million at December 31, 2024 and $94.1 million at
December 31, 2023, relate primarily to the affiliated private investment funds and the investment partnerships in
which we have an existing investment. In addition to such amounts, a percentage of prior distributions may be
called under certain circumstances.
Investments in affiliated private investment funds - carried interest represent interests in the general partners of
affiliated private investment funds that are entitled to a disproportionate allocation of income or carried interest. The
carried interest entities that hold these interests in the general partners of affiliated private investment funds are
considered variable interest entities and are consolidated as T. Rowe Price is determined to be the primary
beneficiary. The total assets, liabilities and non-controlling interests of these carried interest entities as of December
31 are as follows:
(in millions)
2024
2023
Assets
$
467.7 $
564.7
Liabilities
$
0.4 $
1.9
Non-controlling interest
$
160.7 $
192.0
INVESTMENTS IN AFFILIATED COLLATERALIZED LOAN OBLIGATIONS.
These investments represent European CLOs that invest in 5% vertical strips in each class of rated notes and
subordinated notes. Certain investments in the debt tranches of the CLOs are measured at amortized cost as
investments held to maturity and included in investments in our consolidated balance sheets. The subordinated note
tranches of these investments are held at fair value and any gain or loss is included in non-operating income (loss)
in the consolidated statements of income. Certain of the investments in the debt tranches of the CLOs have been
pledged as collateral against repurchase agreements.
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There is debt associated with our long-term investments in affiliated collateralized loan obligations (“CLOs”). This
debt is carried at $59.1 million at December 31, 2024 and $89.4 million at December 31, 2023, and is reported in
accounts payable and accrued expenses in our consolidated balance sheets. The debt outstanding is related to
repurchase agreements of €56.9 million at December 31, 2024, compared to €65.5 million at December 31, 2023
(equivalent to $59.1 million at December 31, 2024 and $72.3 million at December 31, 2023 at the respective EUR
spot rates) that are collateralized by the CLO investments. The debt included no outstanding note facilities at
December 31, 2024, compared to $17.1 million at December 31, 2023, that are collateralized by first priority security
interests in the assets of a consolidated subsidiary that is party to the notes. The note facilities bear interest at rates
based on EURIBOR plus the initial margin, which equals all-in rates ranging from 1.15% to 12.09% as of
December 31, 2024. The debt matures on various dates through 2035 or if the investments are paid back in full or
cancelled, whichever is sooner.
NOTE 5 – FAIR VALUE MEASUREMENTS.
We determine the fair value of our cash equivalents and certain investments using the following broad levels of
inputs as defined by related accounting standards:
Level 1 – quoted prices in active markets for identical financial instruments accessible at the reporting date.
Level 2 – observable inputs other than Level 1 quoted prices including, but not limited to, quoted prices for similar
financial instruments in active markets, quoted prices for identical or similar financial instruments in
inactive markets, interest rates and yield curves, implied volatilities, and credit spreads. These inputs are
based on market data obtained from independent sources.
Level 3 – unobservable inputs reflecting our own assumptions based on the best information available. The inputs
into the determination of fair value require significant management judgment or estimation. Investments in
this category generally include investments for which there is not an actively-traded market.
These levels are not necessarily an indication of the risk or liquidity associated with our investments. The following
table summarizes our investments that are recognized in our consolidated balance sheets at December 31 using
fair value measurements determined based on the differing levels of inputs. This table excludes investments held by
consolidated investment products which are presented separately on our consolidated balance sheets and are
detailed in Note 6.
2024
2023
(in millions)
Level 1
Level 2
Level 3
Level 1
Level 2
Level 3
T. Rowe Price investment products
Cash equivalents held in money market
funds
$ 2,309.8 $
— $
— $ 1,678.1 $
— $
—
Discretionary investments
258.8
—
—
246.4
—
—
Seed capital
209.4
53.4
—
206.0
41.8
—
Deferred compensation liabilities
economic hedges
992.8
—
—
806.6
—
—
Other investments
0.1
—
—
0.7
—
—
Investments in affiliated collateralized loan
obligations
—
6.3
—
—
8.4
—
Total
$ 3,770.9 $
59.7 $
— $ 2,937.8 $
50.2 $
—
Contingent consideration liability
$
— $
— $
— $
— $
— $
13.4
The fair value hierarchy level table above does not include the investment partnerships and other investments for
which fair value is estimated using their NAV per share as a practical expedient. The carrying value of these
investments as disclosed in Note 4 were $62.5 million at December 31, 2024 and $69.0 million at December 31,
2023.
As part of the purchase consideration for our acquisition of OHA in December 2021, there was contingent
consideration in an amount up to $900.0 million as part of an earnout cash payment that may be due starting in
2025 and ending in 2027, upon satisfying or exceeding certain defined revenue targets. These defined revenue
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targets are evaluated on a cumulative basis beginning at the end of 2024, with the ability to extend two additional
years if the defined revenue targets are not achieved. The earnout amount is subject to a proportional reduction if
OHA's actual revenue at the end of the earnout period does not meet the defined revenue targets and could result
in no earnout payout if OHA's actual revenue falls below 75% of the defined revenue target. About 22% of the
earnout is conditioned upon continued service with T. Rowe Price and was excluded from the purchase
consideration and deemed compensatory. The fair value of the earnout deemed compensatory is remeasured each
reporting period and recognized over the related service period. For the year ended December 31, 2024, 2023,and
2022, the amounts recognized as part of compensation expense in our consolidated statements of income were
immaterial.
The change in the contingent consideration liability, included in accounts payable and accrued expenses, is
measured at fair value for which we used Level 3 inputs to determine fair value is as follows:
Year-ended
(in millions)
12/31/2024
12/31/2023
Balance at beginning of the year
$
13.4 $
95.8
Unrealized gains, included in earnings
(13.4)
(82.4)
Balance at end of the year
$
— $
13.4
The fair value of the contingent consideration is calculated using the Monte Carlo simulation methodology of
valuation. The most significant assumptions used relate to the discount rates and from changes pertaining to the
achievement of the defined financial targets.
In addition, simultaneously with the OHA acquisition, a Value Creation Agreement was entered into whereby certain
employees of OHA will receive incentive payments equal to 10% of the appreciated value of the OHA business on
the fifth anniversary of the acquisition date, subject to an annualized preferred return to T. Rowe Price. This
arrangement is treated as a post-combination compensation expense. This arrangement will be remeasured at fair
value at each reporting date and recognized over the related service period. For the year ended December 31,
2024, 2023, and 2022, the amounts recognized as part of compensation expense in our consolidated statements of
income were immaterial.
In 2024, 2023, and 2022, we recognized impairment charges on certain of our identified intangible assets. As part of
the impairment recognition, a fair value measurement was determined for these intangible assets. See Note 9 for
further discussion of the impairments.
NOTE 6 – CONSOLIDATED INVESTMENT PRODUCTS.
The investment products that we consolidate in our consolidated financial statements are generally those products
we provided initial seed capital at the time of their formation and have a controlling interest. Our U.S. mutual funds
and certain other products are considered voting interest entities, while those regulated outside the U.S. are
considered variable interest entities.
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The following table details the net assets of the consolidated investment products at December 31:
2024
2023
(in millions)
VOE
VIE
Total
VOE
VIE
Total
Cash and cash equivalents(1)
$
7.2 $
55.9 $
63.1 $
25.7 $
51.5 $
77.2
Investments(2)
470.8
1,465.4
1,936.2
718.0
1,129.0
1,847.0
Other assets
10.4
34.3
44.7
11.2
23.9
35.1
Total assets
488.4
1,555.6
2,044.0
754.9
1,204.4
1,959.3
Liabilities
15.9
46.2
62.1
19.0
35.2
54.2
Net assets
$ 472.5 $ 1,509.4 $ 1,981.9 $ 735.9 $ 1,169.2 $ 1,905.1
Attributable to T. Rowe Price Group
$ 348.5 $ 689.4 $ 1,037.9 $ 589.9 $ 721.1 $ 1,311.0
Attributable to redeemable non-controlling
interests
124.0
820.0
944.0
146.0
448.1
594.1
$ 472.5 $ 1,509.4 $ 1,981.9 $ 735.9 $ 1,169.2 $ 1,905.1
(1) Cash and cash equivalents includes $4.9 million and $16.2 million at December 31, 2024 and 2023, respectively, of investments in
T. Rowe Price money market mutual funds.
(2) Consolidated investment products invest $9.3 million and $6.2 million at December 31, 2024 and 2023, respectively, in other sponsored
investment products.
Although we can generally redeem our net interest in the consolidated investment products at any time, we cannot
directly access or sell the assets held by these products to obtain cash for general operations. Additionally, the
assets of these investment products are not available to our general creditors.
Since third-party investors in these investment products have no recourse to our credit, our overall risk related to the
net assets of consolidated investment products is limited to valuation changes associated with our net interest.
However, we are required to recognize the valuation changes associated with all underlying investments held by
these products in our consolidated statements of income and disclose the portion attributable to unrelated third-
party investors as net income attributable to redeemable non-controlling interests.
The operating results of the consolidated investment products, are reflected in our consolidated statements of
income for the year ended December 31 as follows:
2024
2023
2022
(in millions)
VOE
VIE
Total
VOE
VIE
Total
VOE
VIE
Total
Operating expenses
reflected in net operating
income
$
(2.4) $
(7.4) $
(9.8) $
(3.7) $
(7.4) $ (11.1) $
(0.5) $
(7.7) $
(8.2)
Net gains (losses)
reflected in non-
operating income
41.7
88.6
130.3
52.4
112.2
164.6
(13.4)
(190.1) (203.5)
Impact on income before
taxes
$ 39.3 $ 81.2 $ 120.5 $ 48.7 $ 104.8 $ 153.5 $ (13.9) $ (197.8) $ (211.7)
Net income (loss)
attributable to T. Rowe
Price Group
$ 31.4 $ 53.4 $ 84.8 $ 40.9 $ 65.6 $ 106.5 $
(9.5) $ (93.9) $ (103.4)
Net income (loss)
attributable to
redeemable non-
controlling interests
7.9
27.8
35.7
7.8
39.2
47.0
(4.4)
(103.9) (108.3)
$ 39.3 $ 81.2 $ 120.5 $ 48.7 $ 104.8 $ 153.5 $ (13.9) $ (197.8) $ (211.7)
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The operating expenses of these consolidated products are reflected in other operating expenses. In preparing our
consolidated financial statements, we eliminated operating expenses of $3.6 million in 2024, $2.1 million in 2023,
and $2.0 million in 2022, against the investment advisory and administrative fees earned from these products. The
net gains (losses) reflected in non-operating income includes dividend and interest income and realized and
unrealized gains and losses on the underlying securities held by the consolidated investment products.
The following table details the impact of these consolidated investment products on the individual lines of our
consolidated statements of cash flows.
2024
2023
2022
(in millions)
VOE
VIE
Total
VOE
VIE
Total
VOE
VIE
Total
Net cash provided by (used in)
operating activities
$ (239.4) $ (394.4) $ (633.8) $ (517.5) $ (371.4) $ (888.9) $ (84.1) $
6.9
$ (77.2)
Net cash provided by (used in)
investing activities
(14.7)
(1.1)
(15.8)
(32.7)
(24.1)
(56.8)
0.1
(8.8)
(8.7)
Net cash provided by (used in)
financing activities
235.6
402.3
637.9
559.7
343.7
903.4
92.9
1.5
94.4
FX impact on cash
—
(2.4)
(2.4)
—
0.4
0.4
—
9.5
9.5
Net change in cash and cash
equivalents during period
(18.5)
4.4
(14.1)
9.5
(51.4)
(41.9)
8.9
9.1
18.0
Cash and cash equivalents at
beginning of year
25.7
51.5
77.2
16.2
102.9
119.1
7.3
93.8
101.1
Cash and cash equivalents at
end of year
$
7.2
$
55.9
$
63.1
$
25.7
$
51.5
$
77.2
$
16.2
$ 102.9
$ 119.1
The net cash provided by financing activities includes $31.7 million in 2024, $544.6 million in 2023 and $142.8
million in 2022, of net subscriptions we made into the consolidated investment products, net of dividends received.
These cash flows were eliminated in consolidation.
FAIR VALUE MEASUREMENTS.
We determine the fair value of investments held by consolidated investment products using the following broad
levels of inputs as defined by related accounting standards:
Level 1 – quoted prices in active markets for identical financial instruments accessible at the reporting date.
Level 2 – observable inputs other than Level 1 quoted prices including, but not limited to, quoted prices for similar
financial instruments in active markets, quoted prices for identical or similar financial instruments in
inactive markets, interest rates and yield curves, implied volatilities, and credit spreads. These inputs are
based on market data obtained from independent sources.
Level 3 – unobservable inputs reflecting our own assumptions based on the best information available. The inputs
into the determination of fair value require significant management judgment or estimation. Investments in
this category generally include investments for which there is not an actively-traded market. There are no
level 3 investments at December 31, 2024 and 2023.
These levels are not necessarily an indication of the risk or liquidity associated with these investment holdings. The
following table summarizes the investment holdings held by our consolidated investment products using fair value
measurements determined based on the differing levels of inputs as of December 31.
(in millions)
Level 1
Level 2
Level 1
Level 2
Assets
Cash equivalents
$
6.3 $
— $
17.2 $
8.0
Equity securities
452.3
285.4
365.1
213.6
Fixed income securities
—
1,173.5
—
1,241.9
Other investments
1.6
23.4
3.6
22.8
$
460.2 $
1,482.3 $
385.9 $
1,486.3
Liabilities
$
(1.7) $
(14.5) $
(5.1) $
(16.2)
2024
2023
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NOTE 7 – LEASES.
All of our leases are operating leases and primarily consist of real estate leases for corporate offices, data centers,
and other facilities.
At December 31, 2024, the weighted-average remaining lease term on our leases is approximately 10.2 years and
the weighted-average discount rate used to measure the lease liabilities is 3.4%.
Operating lease expense was $42.2 million in 2024, $52.4 million in 2023, and $50.0 million in 2022. Charges
related to our operating leases that are variable, including certain maintenance charges and other management-
related costs, and not included in the measurement of the lease liabilities, were $14.1 million in 2024. We made
lease payments of $59.6 million during 2024.
Our future undiscounted cash flows related to our operating leases, and the reconciliation to the operating lease
liability as of December 31, 2024, are as follows:
(in millions)
2024
2025
$
31.9
2026
40.5
2027
40.6
2028
36.5
2029
24.3
Thereafter
155.6
Total future undiscounted cash flows
329.4
Less: imputed interest to be recognized in lease expense
(50.7)
Operating lease liabilities, as reported
$
278.7
In December 2020, we announced that we signed a letter of intent for a long-term lease for our global headquarters
in a different downtown location in Baltimore, Maryland, and plan to relocate in early 2025.
NOTE 8 – PROPERTY, EQUIPMENT AND SOFTWARE.
Property, equipment and software at December 31 consists of:
(in millions)
2024
2023
Computer and communications software and equipment
$
1,680.3 $
1,497.3
Buildings and improvements
493.2
490.7
Leasehold improvements
414.0
260.9
Furniture and other equipment
225.3
207.8
Land
25.7
25.7
2,838.5
2,482.4
Less accumulated depreciation and amortization
1,861.5
1,675.8
Total
$
977.0 $
806.6
Compensation and related costs attributable to the development of computer software for internal use, totaling
$182.0 million in 2024, $156.1 million in 2023, and $134.6 million in 2022, have been capitalized.
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NOTE 9 - GOODWILL AND INTANGIBLE ASSETS.
Goodwill and intangible assets consist of the following at December 31:
(in millions)
2024
2023
Goodwill
$
2,642.8 $
2,642.8
Indefinite-lived intangible assets - trade name
86.0
117.1
Indefinite-lived intangible assets - investment advisory agreements
65.6
65.6
Definite-lived intangible assets - investment advisory agreements
216.5
324.6
Total
$
3,010.9 $
3,150.1
We evaluate the carrying amount of goodwill in our consolidated balance sheets for possible impairment on an
annual basis in the fourth quarter using a fair value approach. We did not record any impairment charges for
goodwill for the years ended December 31, 2024, 2023, or 2022.
We recognized impairments of indefinite-lived intangibles of $31.1 million in 2024, no impairments in 2023, and
$116.8 million in 2022. The $31.1 million impairment in 2024 was attributable to the trade name. Of the
$116.8 million in impairments in 2022, $99.2 million was attributable to investment advisory agreements and
$17.6 million for the trade name. The impairments in 2024 and 2022 were the result of reduced growth expectations
for both management and incentive fees and a higher discount rate.
Definite-lived investment advisory agreement intangible assets consisted of the following at December 31 :
(in millions)
2024
2023
Gross carrying amount
$
613.9 $
613.9
Accumulated amortization & impairments
(397.4)
(289.3)
Net carrying amount
$
216.5 $
324.6
Remaining weighted-average estimated useful life
3.7
5.5
We recognized insignificant impairments of definite-lived intangibles in 2024 and 2023, and $58.3 million in 2022.
The 2022 impairments resulted from reduced growth expectations for both management and incentive fees and a
higher discount rate.
Amortization and impairment expense for the definite-lived investment advisory agreement intangible assets was
$108.1 million in 2024, $122.5 million in 2023, and $166.8 million in 2022, respectively. Estimated amortization
expense for the definite-lived investment advisory agreements intangible assets for the five succeeding years is as
follows:
(in millions)
2024
2025
$
77.1
2026
61.8
2027
42.9
2028
12.7
2029
9.7
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NOTE 10 – INCOME TAXES.
INCOME TAX PROVISION.
The provision for income taxes consists of:
(in millions)
2024
2023
2022
Current income taxes
U.S. federal
$
634.7 $
554.0 $
574.7
State and local
112.4
68.1
115.4
Foreign
24.7
23.9
15.5
Deferred income taxes (benefits)
(88.0)
8.6
(207.0)
Total
$
683.8 $
654.6 $
498.6
Deferred income taxes (benefits) arise from temporary differences between taxable income for financial statement
and income tax return purposes. The deferred income taxes (benefits) recognized as part of our provision for
income taxes is related to:
(in millions)
2024
2023
2022
Property, equipment and software
$
(60.3) $
(43.2) $
(64.1)
Accrued, deferred, and long-term incentive compensation
(14.2)
(28.6)
11.8
Operating lease assets
(1.7)
(6.3)
24.8
Operating lease liabilities
5.0
3.8
(24.3)
Acquisition-related retention liability
(12.9)
(14.8)
(13.6)
Contingent consideration liability
3.1
15.4
32.4
Acquired investments
(27.9)
(19.5)
(73.0)
Unrealized gains (losses) recognized in non-operating income
16.8
43.8
(114.6)
Net operating losses
(11.2)
(31.5)
(11.0)
Change in valuation allowance
16.1
86.4
16.4
Other
(0.8)
3.1
8.2
Total net deferred income taxes (benefits)
$
(88.0) $
8.6 $
(207.0)
The following table reconciles the statutory federal income tax rate to our effective income tax rate.
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.
(2) Net income attributable to redeemable non-controlling interests represents the portion of earnings held in the firm's consolidated investment
products, which are not taxable to the firm despite being included in pre-tax income.
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DEFERRED TAX ASSETS (LIABILITIES).
The net deferred tax assets recognized in our consolidated balance sheets in other assets as of December 31 relate
to the following:
(in millions)
2024
2023
Deferred tax assets
Accrued, deferred, and long-term incentive compensation
$
317.7 $
303.5
Property, equipment and software
90.9
30.6
Acquired investments
66.4
40.3
Net operating loss carry-forwards
53.7
42.5
Operating lease liability
39.8
44.8
Other
12.9
16.0
Total deferred tax assets
581.4
477.7
Valuation allowance
(118.9)
(102.8)
Total deferred tax assets, net of valuation allowance
462.5
374.9
Deferred tax liabilities
Contingent consideration liability
(50.9)
(47.8)
Unrealized gains (losses) recognized in non-operating income
(50.0)
(33.2)
Operating lease assets
(41.1)
(42.8)
Acquisition-related retention liability
(26.6)
(39.5)
Other
(15.9)
(17.8)
Total deferred tax liabilities
(184.5)
(181.1)
Net deferred tax assets
$
278.0 $
193.8
We had operating loss carryforwards before tax of $220.0 million at December 31, 2024 and $173.4 million at
December 31, 2023. The increase in operating loss carryforwards from 2023 is primarily related to operating losses
generated by our United Kingdom subsidiary. Almost all of the operating loss carryforwards are attributable to the
United Kingdom and do not expire. However, the amount of annual profits that can be relieved by losses carried
forward is limited to 50%, subject to an annual allowance of GBP 5 million per group.
We consider the need for valuation allowances against our deferred tax assets to the extent that we believe that
these assets are more likely than not to be realized. The valuation allowances total $118.9 million at December 31,
2024 and $102.8 million at December 31, 2023. The increase of $16.1 million in the valuation allowances was due
to the uncertainty of generating sufficient taxable income in future periods in certain foreign jurisdictions. Any
additional or reversal of valuation allowances in future periods will be dependent on the generation of sufficient
taxable income. The future change in the valuation allowance could materially increase or decrease our income tax
expenses in future periods.
We intend to repatriate earnings of T. Rowe Price foreign subsidiaries to the U.S. in an amount not to exceed these
subsidiaries' previously taxed earnings and profits ("PTEP"), which are estimated to be approximately $989 million
at December 31, 2024. These earnings as well as our pro rata share of the earnings of foreign corporations in which
T. Rowe Price owns 10% or more were subject to the repatriation tax enacted with the U.S. tax reform and are
treated as PTEP. As such, we did not record a deferred tax liability with respect to the U.S. federal or foreign
withholding taxes as the PTEP should not be taxed in these jurisdictions.
OTHER DISCLOSURES.
Other assets include tax refund receivables of $52.4 million at December 31, 2024, and $81.0 million at
December 31, 2023.
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Cash outflows from operating activities include net income taxes paid of $723.2 million in 2024, $632.0 million in
2023, and $794.2 million in 2022.
In 2024, stock-based compensation plans activity decreased income tax expense by $4.5 million. In 2023 and 2022,
stock-based compensation plans activity increased income tax expense by $3.4 million and decreased income tax
expense by $7.1 million, respectively. These income tax impacts were recognized in the income tax provision.
UNRECOGNIZED TAX BENEFITS.
The following table summarizes the changes in our unrecognized tax benefits.
(in millions)
2024
2023
2022
Balance at beginning of year
$
42.7 $
35.4 $
29.3
Changes in tax positions related to
Current year
4.2
7.8
5.5
Prior years
(2.9)
0.5
1.3
Expired statute of limitations
(1.0)
(1.0)
(0.7)
Balance at end of year
$
43.0 $
42.7 $
35.4
If recognized, these tax benefits would affect our effective tax rate; however, we do not expect that unrecognized tax
benefits for tax positions taken with respect to 2024 and prior years will significantly change in 2025. As of January
2025, the U.S. Internal Revenue Service ("IRS") has concluded examinations related to federal tax obligations
through the year 2023.
A net interest payable related to our unrecognized tax benefits of $8.6 million at December 31, 2024, and $5.2
million at December 31, 2023, are recognized in our consolidated balance sheets. Our accounting policy with
respect to interest and penalties arising from income tax settlements is to recognize them as part of our provision for
income taxes. Interest recognized as part of our provision for income taxes was not material.
NOTE 11 – STOCKHOLDERS' EQUITY.
SHARE REPURCHASES.
The Board of Directors has authorized the future repurchase of up to 18,377,353 common shares as of
December 31, 2024.
Accounts payable and accrued expenses includes liabilities of $2.3 million at December 31, 2024 for common stock
repurchases that settled during the first week of January 2025.
RESTRICTED CAPITAL.
Our consolidated stockholders' equity at December 31, 2024, includes about $393 million that is restricted as to use
by various regulations and agreements arising in the ordinary course of our business.
NOTE 12 – LONG-TERM INCENTIVE COMPENSATION.
SHARES AUTHORIZED FOR STOCK-BASED COMPENSATION PROGRAMS.
At December 31, 2024, a total of 15,425,350 shares of unissued common stock were authorized for issuance under
our stock-based compensation plans. Additionally, a total of 2,991,898 shares are authorized for issuance under a
plan whereby substantially all employees may acquire common stock through payroll deductions at prevailing
market prices.
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STOCK OPTIONS.
The following table summarizes the status of, and changes in, our stock options during 2024.
Options
Weighted-
average
exercise
price
Weighted-average
remaining
contractual
term in
years
Outstanding at December 31, 2023
1,476,104 $
75.39
Exercised
(812,959) $
76.72
Expired
(1,768) $
76.75
Outstanding and exercisable at December 31, 2024
661,377 $
73.76
0.5
There was no stock option-based compensation expense in 2024, 2023, or 2022.
The total intrinsic value of options exercised was $27.7 million in 2024, $30.6 million in 2023, and $40.3 million in
2022. At December 31, 2024, the aggregate intrinsic value of in-the-money options outstanding was $26.0 million.
RESTRICTED SHARES AND STOCK UNITS.
The following table summarizes the status of, and changes in, our restricted stock units during 2024.
Restricted
stock
units
Weighted-
average
fair value
Nonvested at December 31, 2023
6,476,170 $
127.94
Time-based grants
1,597,968 $
122.56
Performance-based grants
98,668 $
123.00
Vested (value at vest date was $240.0 million)
(1,956,869) $
133.11
Forfeited
(214,358) $
128.24
Nonvested at December 31, 2024
6,001,579 $
124.73
Nonvested at December 31, 2024 includes performance-based restricted stock units of 359,941. These nonvested
performance-based restricted units include 35,500 units for which the performance period has lapsed, and the
performance threshold has been met.
Compensation and related costs includes expenses for restricted shares granted to directors and restricted stock
units of $247.3 million in 2024, $265.6 million in 2023, and $285.4 million in 2022.
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FUTURE STOCK-BASED COMPENSATION EXPENSE.
The following table presents the compensation expense to be recognized over the remaining vesting periods of the
stock-based awards outstanding at December 31, 2024. Estimated future compensation expense will change to
reflect future grants, changes in the probability of performance thresholds being met, and adjustments for actual
forfeitures.
(in millions)
First quarter 2025
$
53.2
Second quarter 2025
52.1
Third quarter 2025
51.5
Fourth quarter 2025
44.7
2026
100.4
2027 through 2030
67.2
Total
$
369.1
RESTRICTED FUND UNITS.
We granted $103.3M of restricted fund units in December 2024. Below is a roll forward of the restricted fund units
liability which is reported in deferred compensation liabilities on the consolidated balance sheet.
(in millions)
2024
Balance at beginning of year
$
—
Amortization of grant date value
14.8
Amortization of market appreciation (depreciation)
(0.1)
Balance at end of year
$
14.7
The following table presents the compensation expense to be recognized over the remaining vesting periods of the
restricted fund units outstanding at December 31, 2024. Estimated future compensation expense will change to
reflect future grants, changes in the market value of the restricted fund units which is based on selected hypothetical
investments, and adjustments for actual forfeitures.
(in millions)
First quarter 2025
$
11.7
Second quarter 2025
11.3
Third quarter 2025
11.2
Fourth quarter 2025
9.2
2026
22.9
2027 through 2030
21.6
Total
$
87.9
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NOTE 13 – EARNINGS PER SHARE CALCULATIONS.
The following table presents the reconciliation of net income attributable to T. Rowe Price Group Inc. to net income
allocated to our common stockholders and the weighted-average shares that are used in calculating the basic and
diluted earnings per share on our common stock. Weighted-average common shares outstanding assuming dilution
reflects the potential dilution, determined using the treasury stock method, that could occur if outstanding stock
options were exercised and non-participating stock awards vested.
(in millions)
2024
2023
2022
Net income attributable to T. Rowe Price Group Inc.
$
2,100.1 $
1,788.7 $
1,557.9
Less: net income allocated to outstanding restricted stock and stock
unit holders
55.8
44.4
36.1
Net income allocated to common stockholders
$
2,044.3 $
1,744.3 $
1,521.8
Weighted-average common shares
Outstanding
222.8
224.1
226.0
Outstanding assuming dilution
223.3
224.8
227.1
For the past three years, no stock options have been excluded from the calculation of diluted earnings per common
share as none of the options' inclusion would be anti-dilutive.
NOTE 14 – OTHER COMPREHENSIVE INCOME AND ACCUMULATED OTHER COMPREHENSIVE INCOME.
The following table presents the impact of the components of other comprehensive income or loss on deferred tax
benefits (income taxes).
(in millions)
2024
2023
2022
Net deferred tax benefits (income taxes) on:
Currency translation adjustments
$
3.7 $
(2.0) $
4.2
Reclassification adjustment recognized in the provision for income
taxes upon deconsolidation of investment products
—
0.1
0.8
Total net deferred tax benefits
$
3.7 $
(1.9) $
5.0
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The changes in each component of accumulated other comprehensive income (loss), including reclassification are
presented below.
(in millions)
Equity
method
investments
Consolidated
investment
products -
variable interest
entities
Total
currency
translation
adjustments
Balances at December 31, 2021
$
(36.7) $
10.2 $
(26.5)
Other comprehensive income (loss) before reclassifications and
income taxes
(14.6)
(13.9)
(28.5)
Reclassification adjustments recognized in non-operating income
—
(3.0)
(3.0)
(14.6)
(16.9)
(31.5)
Net deferred tax benefits (income taxes)
0.8
4.2
5.0
Other comprehensive income (loss)
(13.8)
(12.7)
(26.5)
Balances at December 31, 2022
(50.5)
(2.5)
(53.0)
Other comprehensive income (loss) before reclassifications and
income taxes
(1.6)
9.0
7.4
Net deferred tax benefits (income taxes)
0.2
(2.1)
(1.9)
Other comprehensive income (loss)
(1.4)
6.9
5.5
Balances at December 31, 2023
(51.9)
4.4
(47.5)
Other comprehensive income (loss) before reclassifications and
income taxes
0.7
(9.0)
(8.3)
Reclassification adjustments recognized in non-operating income
—
0.4
0.4
0.7
(8.6)
(7.9)
Net deferred tax benefits (income taxes)
1.7
2.0
3.7
Other comprehensive income (loss)
2.4
(6.6)
(4.2)
Balances at December 31, 2024
$
(49.5) $
(2.2) $
(51.7)
The other comprehensive income (loss) in the table above excludes $(5.0) million in 2024, $12.7 million in 2023,
and $(21.0) million in 2022 of other comprehensive income (loss) related to redeemable non-controlling interests
held in our consolidated investment products.
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NOTE 15 – SEGMENT REPORTING.
We have one reportable segment: investment management services. We derive our revenue and net income
globally and manage business activities on a consolidated basis.
We derive our revenues and net income from investment advisory services provided to individual and institutional
investors globally. We also provide certain ancillary administrative services, including mutual fund transfer agent,
fund and portfolio accounting, distribution, and shareholder services; participant recordkeeping and transfer agent
services for defined contribution retirement plans; and other advisory services. Our revenues and net income
depend largely on the total value and composition of our assets under management, as such, the consideration for
our services is generally variable and recognized over time.
Our chief operating decision maker (CODM) is the chief executive officer. The CODM utilizes consolidated net
income attributable to T. Rowe Price as reported on the consolidated income statement to assess performance and
allocate resources. Based on this metric, the CODM decides either to reinvest profits into the business based on our
strategic priorities and/or return cash to stockholders through dividends and share repurchases.
We determined there are no significant segment expenses that require a separate disclosure, as the major
categories of expenses regularly reviewed by the CODM to manage operations are disclosed in the consolidated
statements of income. Quarterly reviews of expenses highlight those influenced by financial markets, such as
distribution and servicing costs, as well as those that are both qualitatively and quantitatively significant.
NOTE 16 – COMMITMENTS AND CONTINGENCIES.
COMMITMENTS.
T. Rowe Price has committed $360 million for investments in future OHA product launches through 2026.
CONTINGENCIES.
Various claims against us arise in the ordinary course of business, including employment-related claims. In the
opinion of management, after consultation with counsel, the likelihood of an adverse determination in one or more of
these pending ordinary course of business claims that would have a material adverse effect on our financial position
or results of operations is remote.
NOTE 17 – OTHER DISCLOSURES.
RETIREMENT PLANS.
Compensation and related costs includes expense recognized for our defined contribution retirement plans of
$162.0 million in 2024, $152.5 million in 2023, and $130.2 million in 2022.
SUPPLEMENTAL SAVINGS PLAN.
The supplemental savings plan provides certain senior officers the opportunity to defer payment on up to 50% of
their annual cash incentive, limited to $2 million annually. The amounts deferred are adjusted in accordance with the
hypothetical investments chosen by the officer from a list of T. Rowe Price products. The officer must specify if they
would like to receive payment as a lump sum or up to ten annual installments upon separation of service.
Additionally, the officer may elect to receive a lump sum payment while still employed in as little as five years.
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Below is a roll forward of the supplement savings plan liability which is reported in deferred compensation liabilities
on the consolidated balance sheets.
(in millions)
2024
2023
Balance at beginning of the year
$
895.0 $
761.2
Deferrals (including taxes)
53.4
52.8
Market appreciation (depreciation)
104.3
123.2
Distributions
(46.7)
(42.2)
Balance at end of the year
$
1,006.0 $
895.0
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and Board of Directors
T. Rowe Price Group, Inc.:
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of T. Rowe Price Group, Inc. and subsidiaries (the
Company) as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive
income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31,
2024, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated
financial statements present fairly, in all material respects, the financial position of the Company as of December 31,
2024 and 2023, and the results of its operations and its cash flows for each of the years in the three-year period
ended December 31, 2024, in conformity with U.S.-generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2024, based on
criteria established in Internal Control–Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission, and our report dated February 14, 2025 expressed an unqualified
opinion on the effectiveness of the Company’s internal control over financial reporting.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is
to express an opinion on these consolidated financial statements based on our audits. We are a public accounting
firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with
the U.S.-federal securities laws and the applicable rules and regulations of the Securities and Exchange
Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free
of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the
risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and
performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence
regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating
the accounting principles used and significant estimates made by management, as well as evaluating the overall
presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our
opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated
financial statements that was communicated or required to be communicated to the audit committee and that:
(1) relates to accounts or disclosures that is material to the consolidated financial statements and (2) involved our
especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter
in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by
communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the
accounts or disclosures to which relates.
Evaluation of the completeness and accuracy of assets under management data used in the calculation of
investment advisory fee revenue
As discussed in Note 1 to the consolidated financial statements, the Company recognizes fees for its investment
advisory agreements based on a percentage of its assets under management (AUM). AUM data represents a
significant input to the calculation of investment advisory fees. The Company recognized $6.4 billion in investment
advisory fees during the year ended December 31, 2024, which included revenue related to T. Rowe U.S. mutual
funds (Funds).
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We identified the evaluation of the completeness and accuracy of AUM data for the Funds as a critical audit matter
as AUM data is transmitted through multiple information technology (IT) systems used in the calculation of
investment advisory fee revenue. Given the Company's use of multiple IT systems, the nature and extent of audit
effort involved in performing procedures to evaluate the completeness and accuracy of AUM data required the use
of IT professionals with specialized skills and knowledge.
The following are the primary procedures we performed to address the critical audit matter. We evaluated the
design and tested the operating effectiveness of certain controls over the Company’s revenue processes, including
manual controls over the completeness and accuracy of AUM data. We involved IT professionals with specialized
skills and knowledge, who assisted in the testing of general IT controls and the interface of data between multiple IT
systems used to maintain AUM data. To assess the AUM data, we (1) compared AUM used in the calculation of a
sample of investment advisory fees to the source IT systems, and (2) for a selection of Funds, compared AUM on
select dates from the source IT system to the audited Fund financial statements.
/s/ KPMG LLP
We have served as the Company’s auditor since 2001.
Baltimore, Maryland
February 14, 2025
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Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
Item 9A. Controls and Procedures.
Our management, including our principal executive and principal financial officers, have evaluated the effectiveness
of our disclosure controls and procedures as of December 31, 2024. Based on that evaluation, our principal
executive and principal financial officers have concluded that our disclosure controls and procedures as of
December 31, 2024, are effective at the reasonable assurance level to ensure that the information required to be
disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, including our Form
10-K annual report, is recorded, processed, summarized and reported, within the time periods specified in the
Securities and Exchange Commission’s rules and forms, and to ensure that information required to be disclosed by
us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our
management, including our principal executive and principal financial officers, or persons performing similar
functions, as appropriate to allow timely decisions regarding required disclosure.
Our management, including our principal executive and principal financial officers, have evaluated any change in
our internal control over financial reporting that occurred during the fourth quarter of 2024, and has concluded that
there was no change during the fourth quarter of 2024 that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting.
Management’s report on our internal control over financial reporting and the attestation report of KPMG LLP follow
after Item 9C.
Item 9B. Other Information.
None.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Not applicable.
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REPORT OF MANAGEMENT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
To the Stockholders of T. Rowe Price Group, Inc.:
We, together with other members of management of T. Rowe Price Group, Inc., (the Company) are responsible for
establishing and maintaining adequate internal control over the Company’s financial reporting. Internal control over
financial reporting is the process designed under our supervision, and effected by the Company’s Board of
Directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of the Company’s financial statements for external purposes in accordance with
accounting principles generally accepted in the United States of America.
There are inherent limitations in the effectiveness of internal control over financial reporting, including the possibility
that misstatements may not be prevented or detected. Accordingly, even effective internal controls over financial
reporting can provide only reasonable assurance with respect to financial statement preparation. Furthermore, the
effectiveness of internal controls can change with circumstances.
Management has evaluated the effectiveness of internal control over financial reporting as of December 31, 2024, in
relation to criteria described in Internal Control–Integrated Framework (2013) issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO). Based on management’s assessment, we believe
that the Company’s internal control over financial reporting was effective as of December 31, 2024.
KPMG LLP, an independent registered public accounting firm, has audited our financial statements that are included
in this annual report and expressed an unqualified opinion thereon. KPMG has also expressed an unqualified
opinion on the effective operation of our internal control over financial reporting as of December 31, 2024.
February 14, 2025
/s/ Robert W. Sharps
Chief Executive Officer and President
/s/ Jennifer B. Dardis
Vice President, Chief Financial Officer and Treasurer
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and Board of Directors
T. Rowe Price Group, Inc.:
Opinion on Internal Control Over Financial Reporting
We have audited T. Rowe Price Group, Inc. and subsidiaries’ (the Company) internal control over financial reporting
as of December 31, 2024, based on criteria established in Internal Control–Integrated Framework (2013) issued by
the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained,
in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria
established in Internal Control–Integrated Framework (2013) issued by the Committee of Sponsoring Organizations
of the Treadway Commission.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related
consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the
years in the three-year period ended December 31, 2024, and the related notes (collectively, the consolidated
financial statements), and our report dated February 14, 2025 expressed an unqualified opinion on those
consolidated financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for
its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Report
of Management on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the
Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered
with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the
PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting
was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an
understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and
testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our
audit also included performing such other procedures as we considered necessary in the circumstances. We
believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s
assets that could have a material effect on the financial statements.
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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may
become inadequate because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
/s/ KPMG LLP
Baltimore, Maryland
February 14, 2025
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PART III
Item 10. Directors, Executive Officers and Corporate Governance.
Information required by this item as to the identification of our executive officers is furnished in a separate item at
the end of Part I of this Report. Other information required by this item is incorporated by reference from the
definitive proxy statement required to be filed pursuant to Regulation 14A not later than 120 days after
December 31, 2024 for the 2025 Annual Meeting of our stockholders.
Item 11. Executive Compensation.
Information required by this item is incorporated by reference from the definitive proxy statement required to be filed
pursuant to Regulation 14A not later than 120 days after December 31, 2024 for the 2025 Annual Meeting of our
stockholders.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters.
Information required by this item is incorporated by reference from the definitive proxy statement required to be filed
pursuant to Regulation 14A not later than 120 days after December 31, 2024 for the 2025 Annual Meeting of our
stockholders.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
Information required by this item is incorporated by reference from the definitive proxy statement required to be filed
pursuant to Regulation 14A not later than 120 days after December 31, 2024 for the 2025 Annual Meeting of our
stockholders.
Item 14. Principal Accountant Fees and Services.
Information required by this item is incorporated by reference from the definitive proxy statement required to be filed
pursuant to Regulation 14A not later than 120 days after December 31, 2024 for the 2025 Annual Meeting of our
stockholders.
PART IV
Item 15. Exhibits, Financial Statement Schedules.
The following documents are filed as part of this report.
(1)
Financial Statements: See Item 8 of Part II of this report.
(2)
Financial Statement Schedules: None.
(3)
The following exhibits required by Item 601 of Regulation S-K are filed herewith, except for Exhibit 32 that is
furnished herewith. Management contracts and compensatory plans and arrangements are identified with an
asterisk (*).
3(i)
Charter of T. Rowe Price Group, Inc., as reflected by Articles of Restatement dated June 20,
2018. (Incorporated by reference from Form 10-Q Quarterly Report filed on July 25, 2018.)
3.1
Amended and Restated By-Laws of T. Rowe Price Group, Inc., as of February 9, 2021.
(Incorporated by reference from Form 10-K Annual Report filed on February 11, 2021.)
4.1
Description of Capital Stock (Incorporated by reference from Form 10-K Annual Report filed
on February 13, 2020.)
10.01.1
Representative Investment Management Agreement for the T. Rowe Price mutual funds that
pay a management fee consisting of two components - a group management fee and
individual management fee. (Incorporated by reference from Form 485BPOS filed on July
27, 2017.)
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10.01.2
Representative Investment Management Agreement for the T. Rowe Price mutual funds that
pay an individual management fee. (Incorporated by reference from Form 485BPOS filed on
August 13, 2015.)
10.01.3
Representative Investment Management Agreement for the T. Rowe Price mutual funds that
pay an all-inclusive fee (i.e., a single fee that covers investment management and ordinary
recurring operating expenses). (Incorporated by reference from Form 485BPOS filed on April
23, 2014.)
10.02
Representative Underwriting Agreement between a T. Rowe Price mutual fund and T. Rowe
Price Investment Services, Inc. (Incorporated by reference from Form N-1A/A filed on
August 30, 2017.)
10.03
Transfer Agency and Service Agreement as of January 1, 2024, between T. Rowe Price
Services, Inc. and the T. Rowe Price Funds.
10.04
Agreement as of January 1, 2024, between T. Rowe Price Retirement Plan Services, Inc.
and certain of the T. Rowe Price Funds.
10.05
Amended and Restated Agreement dated as of February 1, 2024 between T. Rowe Price
Associates, Inc. and the T. Rowe Price Funds for Fund Accounting and Related
Administrative Services.
10.06
*
Statements of additional terms and conditions for awards granted under the Amended and
Restated 2007 Non-Employee Director Equity Plans after February 12, 2009. (Incorporated
by reference from Form 10-Q for the quarterly period ended March 31, 2009 filed on April 22,
2009.)
10.07
*
Amended and Restated 2007 Non-Employee Director Equity Plan. (Incorporated by
reference from Form 10-K Annual Report for fiscal year ended December 31, 2015 filed on
February 5, 2016.)
10.08
*
T. Rowe Price Group, Inc. Outside Directors Deferred Compensation Plan. (Incorporated by
reference from Form 10-K for 2004 filed on March 1, 2005.)
10.09
*
2012 Long-term Incentive Plan. (Incorporated by reference from Form DEF14A filed on
March 17, 2017.)
10.10.1
*
Forms of agreement for restricted stock awards issued under the 2012 Long-term Incentive
Plan. (Incorporated by reference from Form 10-Q Report for the quarterly period ended June
30, 2012 filed on July 25, 2012.)
10.10.2
*
Forms of agreement for restricted stock units issued under the 2012 Long-term Incentive
Plan. (Incorporated by reference from Form 10-Q Report for the quarterly period ended June
30, 2012 filed on July 25, 2012.)
10.10.3
*
Forms of agreement of stock options issued under the 2012 Long-term Incentive Plan.
(Incorporated by reference from Form 10-Q Report for the quarterly period ended June 30,
2012 filed on July 25, 2012.)
10.10.4
*
HM Revenue and Customs Approved Sub-Plan for UK Employees under the 2012 Long-
Term Incentive Plan. (Incorporated by reference from Form 10-Q for the quarterly period
ended March 31, 2013 filed on April 24, 2013.)
10.10.5
*
Forms of Agreement for Stock Options issued under the HM Revenue and Customs
Approved Sub-Plan for UK Employees under the 2012 Long-Term Incentive Plan.
(Incorporated by reference from Form 10-Q for the quarterly period ended March 31, 2013
filed on April 24, 2013.)
10.10.6
*
Form of Statement of Additional Terms Regarding Awards of Restricted Stock Units (Version
3A) issued on or after December 6, 2017 under the T. Rowe Price Group, Inc. 2012 Long-
Term Incentive Plan. (Incorporated by reference from Form 8-K Current Report filed on
December 12, 2017.)
10.10.7
*
Form of Statement of Additional Terms Regarding Awards of Restricted Stock Units (Version
3B) issued on or after December 6, 2017 under the T. Rowe Price Group, Inc. 2012 Long-
Term Incentive Plan. (Incorporated by reference from Form 8-K Current Report filed on
December 12, 2017.)
10.10.8
*
Form of Statement of Additional Terms Regarding Awards of Stock Options (Version 3A)
issued on or after December 6, 2017 under the T. Rowe Price Group, Inc. 2012 Long-Term
Incentive Plan. (Incorporated by reference from Form 8-K Current Report filed on December
12, 2017.)
20
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10.10.9
*
Form of Statement of Additional Terms Regarding Awards of Stock Options (Version 3B)
issued on or after December 6, 2017 under the T. Rowe Price Group, Inc. 2012 Long-Term
Incentive Plan. (Incorporated by reference from Form 8-K Current Report filed on December
12, 2017.)
10.10.10
*
Form of Notice of Grant of Restricted Stock Units Award issued on or after December 6,
2017 under the T. Rowe Price Group, Inc. 2012 Long-Term Incentive Plan. (Incorporated by
reference from Form 8-K Current Report filed on December 12, 2017.)
10.10.11
*
Form of Statement of Additional Terms Regarding Awards of Restricted Stock Units (Version
4A) issued on or after December 9, 2018 under the T. Rowe Price Group, Inc. 2012 Long-
Term Incentive Plan. (Incorporated by reference from Form 10-Q for the quarterly period
ended September 30, 2018 filed on October 25, 2018.)
10.10.12
*
Form of Statement of Additional Terms Regarding Awards of Restricted Stock Units (Version
4B) issued on or after December 9, 2018 under the T. Rowe Price Group, Inc. 2012 Long-
Term Incentive Plan. (Incorporated by reference from Form 10-Q for the quarterly period
ended September 30, 2018 filed on October 25, 2018.)
10.10.13
*
Form of Notice of Grant of Restricted Stock Units Award issued under the T. Rowe Price
Group, Inc. 2012 Long-Term Incentive Plan (Incorporated by reference from Form 10-K
Annual Report filed on February 13, 2020.)
10.10.14
*
Supplemental Savings Plan, amended and restated as of July 28, 2020 (Incorporated by
reference from Form S-8 registration statement filed on August 2, 2023.)
10.11
*
2017 Non-Employee Director Equity Plan, as amended (Incorporated by reference from
Form 10-K Annual Report filed on February 13, 2020.)
10.12
*
Statements of additional terms and conditions for awards granted under the 2017 Non-
Employee Director Equity Plan (Incorporated by reference from Form S-8 registration
statement filed on April 27, 2017.)
10.13
*
T. Rowe Price Group, Inc. 2019 Annual Incentive Compensation Plan for Executive Officers.
(Incorporated by reference from Form 8-K Current Report filed on February 13, 2019.)
10.14
*
2020 Long-Term Incentive Plan (Amended and Restated July 30, 2024) (Incorporated by
reference from Form 10-Q filed on November 1, 2024.)
10.15.1
*
Form of Notice of Grant of Restricted Stock Units Award issued under the T. Rowe Price
Group, Inc. 2020 Long-Term Incentive Plan. (Incorporated by reference from Form 10-K filed
on February 11, 2021.)
10.15.2
*
Form of Notice of Grant of Restricted Stock Units Award (with supplemental vesting) issued
under the T. Rowe Price Group, Inc. 2020 Long-Term Incentive Plan. (Incorporated by
reference from Form 10-K filed on February 11, 2021.)
10.16.1
*
Form of Notice of Grant of Performance-Based Restricted Stock Units Award issued under
the T. Rowe Price Group, Inc. 2020 Long-Term Incentive Plan. (Incorporated by reference
from Form 10-K filed on February 11, 2021.)
10.16.2
*
Form of Notice of Grant of Performance-Based Restricted Stock Units Award (with
supplemental vesting) issued under the T. Rowe Price Group, Inc. 2020 Long-Term Incentive
Plan. (Incorporated by reference from Form 10-K filed on February 11, 2021.)
10.17
Transaction Agreement dated October 28, 2021, between T. Rowe Price Group, Inc., Oak
Hill Advisors, L.P., and the holders of equity interests in OHA. (Incorporated by reference
from Form 10-K filed on February 24, 2022.)
10.18
*
Employment Agreement as of October 28, 2021, between T. Rowe Price Group, Inc. and
Glenn R. August. (Incorporated by reference from Form 10-K filed on February 24, 2022.)
10.19.1
Form of Lock Up Agreement as of October 28, 2021, between T. Rowe Price Group, Inc. and
each of Glenn R. August, William H. Bohnsack, Jr., Adam B. Kertzner and Alan Schrager.
(Incorporated by reference from Form 10-K filed on February 24, 2022.)
10.19.2
Form of Lock Up Agreement as of October 28, 2021, between T. Rowe Price Group, Inc. and
the other holders of equity interests in OHA. (Incorporated by reference from Form 10-K filed
on February 24, 2022.)
10.20
*
Value Creation Agreement as of December 29, 2021 between T. Rowe Price Group, Inc. and
each of Glenn R. August, William H. Bohnsack, Jr., Adam B. Kertzner and Alan Schrager.
(Incorporated by reference from Form 10-K filed on February 24, 2022.)
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10.21
T. Rowe Price, Inc. 1986 Employee Stock Purchase Plan, restated as of May 9, 2023, as
amended. (Incorporated by reference from Form S-8 registration statement filed on August 2,
2023.)
10.22
*
Employment Agreement as of December 31, 2020, between T. Rowe Price International
Limited and Justin Thomson. (Incorporated by reference from Form 10-K filed on February
24, 2022.)
10.23
*
Summary of OHA Compensation Program. (Incorporated by reference from Form 10-K filed
on February 24, 2022.)
10.24
*
T. Rowe Price Group, Inc. Mutual Fund Unit Plan. (Incorporated by reference from Form 8-K
Current Report filed on December 2, 2022.)
10.25
*
Form of Notice of Grant--U.S. 6-Month Notice Period--Material Risk Taker (Incorporated by
reference from Form 8-K Current Report filed on December 2, 2022.)
10.26
*
Form of Notice of Grant--U.S. 6-Month Notice Period--Non-Material Risk Taker (Incorporated
by reference from Form 8-K Current Report filed on December 2, 2022.)
10.27
*
Form of Notice of Grant--U.S. 3-Month Notice Period--Material Risk Taker (Incorporated by
reference from Form 8-K Current Report filed on December 2, 2022.)
10.28
*
Form of Notice of Grant--U.S. 3-Month Notice Period--Non-Material Risk Taker (Incorporated
by reference from Form 8-K Current Report filed on December 2, 2022.)
10.29
*
Form of Notice of Grant--U.S. No Notice Period (Incorporated by reference from Form 8-K
Current Report filed on December 2, 2022.)
10.30
*
Form of Notice of Grant--Non-U.S.--Material Risk Taker (Incorporated by reference from
Form 8-K Current Report filed on December 2, 2022.)
10.31
*
Form of Notice of Grant--Non-U.S.--Non-Material Risk Taker (Incorporated by reference from
Form 8-K Current Report filed on December 2, 2022.)
10.32
*
Form of Notice of Grant for Performance Based Awards--U.S.--Material Risk Taker
(Incorporated by reference from Form 8-K Current Report filed on December 2, 2022.)
10.33
*
Form of Notice of Grant for Performance Based Awards--U.S.--Non-Material Risk Taker
(Incorporated by reference from Form 8-K Current Report filed on December 2, 2022.)
10.34
*
Form of Notice of Grant for Performance Based Awards--Non-U.S.--Material Risk Taker
(Incorporated by reference from Form 8-K Current Report filed on December 2, 2022.)
10.35
*
Form of Notice of Grant for Performance Based Awards--Non-U.S.--Non-Material Risk Taker
(Incorporated by reference from Form 8-K Current Report filed on December 2, 2022.)
10.36.1
*
Form of Notice of Grant for Restricted Fund Unit Awards U.S.
10.36.2
*
Form of Notice of Grant for Restricted Fund Unit Awards--Non-Material Risk Taker.
10.36.3
*
Form of Notice of Grant for Restricted Fund Unit Awards Non-U.S.-Material Risk Taker.
10.36.4
*
Form of Notice of Grant for Restricted Fund Unit Awards U.S. with Restricted Stock Units.
10.36.5
*
Form of Notice of Grant for Restricted Fund Unit Awards US Non-Material Risk Taker.
19
T. Rowe Price Group, Inc. Code of Ethics and Personal Transaction Policy
21
Subsidiaries of T. Rowe Price Group, Inc.
23
Consent of Independent Registered Public Accounting Firm, KPMG LLP.
31(i).1
Rule 13a-14(a) Certification of Principal Executive Officer.
31(i).2
Rule 13a-14(a) Certification of Principal Financial Officer.
32
Section 1350 Certifications.
97.1
*
Erroneously Awarded Compensation Recoupment Policy for Recoupment of Incentive
Compensation (Incorporated by reference from Form 10-K filed on February 16, 2024.)
97.2
*
Policy for Recoupment of Incentive Compensation (Incorporated by reference from Form 10-
K filed on February 16, 2024.)
20
Page 99
101
The following series of unaudited XBRL-formatted documents are collectively included
herewith as Exhibit 101. The financial information is extracted from T. Rowe Price Group’s
consolidated financial statements and notes that are included in this Form 10-K Report.
101.INS
XBRL Instance Document - the instance document does not appear in the Interactive Data
File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH
XBRL Taxonomy Extension Schema Document.
101.CAL
XBRL Taxonomy Calculation Linkbase Document.
101.LAB
XBRL Taxonomy Label Linkbase Document.
101.PRE
XBRL Taxonomy Presentation Linkbase Document.
101.DEF
XBRL Taxonomy Definition Linkbase Document.
Item 16. Form 10-K Summary.
None.
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SIGNATURES
Pursuant to the requirements of Section 13 of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly authorized, on February 14, 2025.
T. Rowe Price Group, Inc.
By: /s/ Robert W. Sharps, Chief Executive Officer and President (Principal Executive Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the capacities indicated on February 14, 2025.
/s/ Robert W. Sharps, Chair of the Board of Directors, Chief Executive Officer, and President (Principal Executive
Officer)
/s/ Glenn R. August, Director
/s/ Mark S. Bartlett, Director
/s/ William P. Donnelly, Director
/s/ Dina Dublon, Director
/s/ Robert F. MacLellan, Director
/s/ Eileen P. Rominger, Director
/s/ Cynthia F. Smith, Director
/s/ Robert J. Stevens, Director
/s/ Sandra S. Wijnberg, Director
/s/ Alan D. Wilson, Director
/s/ Jennifer B. Dardis, Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer)
/s/ Jessica M. Hiebler, Vice President (Principal Accounting Officer)
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T. ROWE PRICE GROUP
2024 ANNUAL REPORT
13
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T. ROWE PRICE GROUP
2024 ANNUAL REPORT
14
[This page intentionally left blank]
Board of Directors
Robert W. Sharps
Chair of the Board, Chief
Executive Officer, and President
T. Rowe Price Group, Inc.
Glenn R. August
Founder and Chief Executive Officer
Oak Hill Advisors, L.P.
Mark S. Bartlett
Retired Managing Partner
Ernst & Young
William P. Donnelly
Retired Executive Vice President
Mettler Toledo International, Inc.
Dina Dublon
Retired Executive Vice President
and Chief Financial Officer
JPMorgan Chase & Co.
Robert F. MacLellan
Non-executive Chairman
Northleaf Capital Partners
Eileen P. Rominger
Former Senior Advisor
CamberView Partners
Cynthia Smith
Senior Vice President,
Regional Business and
Distribution Development
MetLife, Inc.
Robert J. Stevens
Retired Chairman, President,
and Chief Executive Officer
Lockheed Martin Corporation
Sandra S. Wijnberg
Former Partner and Chief
Administrative Officer
Aquiline Holdings LLC
Alan D. Wilson
Retired Executive Chairman
McCormick & Company, Inc.
Corporate Headquarters
100 East Pratt Street
Baltimore, MD 21202
United States
410.345.2000
New HQ in 2025:
1307 Point Street
Baltimore, MD 21231
United States
Office Locations
Melbourne, Australia
Sydney, Australia
Toronto, Canada
Shanghai, China
Copenhagen, Denmark
Frankfurt, Germany
Hong Kong
Milan, Italy
Tokyo, Japan
Luxembourg
Amsterdam, Netherlands
Singapore
Madrid, Spain
Stockholm, Sweden
Zurich, Switzerland
Dubai, United Arab Emirates
London, United Kingdom
United States:
San Francisco, California
Colorado Springs, Colorado
Washington, District of Columbia
Baltimore, Maryland
Linthicum, Maryland
Owings Mills, Maryland
New York, New York
Philadelphia, Pennsylvania
Fort Worth, Texas
Additional Information
SEC Form 10-k
A paper copy is available, at no charge,
by sending a written request to:
David Oestreicher
General Counsel and Corporate Secretary
T. Rowe Price Group, Inc.
100 East Pratt Street
Baltimore, MD 21202
Fax: 410.345.6575
A copy is available on our website:
troweprice.com
Transfer Agent and Registrar
EQ Shareowner Services
1110 Centre Pointe Curve, Suite 101
Mendota Heights, MN 55120
888.648.8155
shareowneronline.com
Send Stockholder Inquiries to
EQ Shareowner Services
PO Box 64854
St. Paul, MN 55164-0854
Independent Registered
Public Accounting Firm
KPMG LLP
Baltimore, MD
Virtual Annual Meeting
May 8, 2025, at 8 a.m. ET
T. Rowe Price Group, Inc.
virtualshareholdermeeting.com/
TROW2025
View our digital Annual Report at:
troweprice.com/annualreport2024
T. Rowe Price Group, Inc.
1307 Point Street, Baltimore, Maryland 21231
United States | 410.345.2000
For more information, visit troweprice.com
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